DE GUZMAN VS.

COURT OF APPEALS (168 SCRA 612)

Facts: Cendena was a junk dealer and was engaged in buying used bottles and
scrap materials in Pangasinan and brought these to Manila for resale. He used two
6-wheeler trucks. On the return trip to Pangasinan, he would load his vehicles with
cargo which various merchants wanted delivered to Pangasinan. For that service, he
charged freight lower than regular rates. General Milk Co. contacted with him for the
hauling of 750 cartons of milk. On the way to Pangasinan, one of the trucks was
hijacked by armed men who took with them the truck and its cargo and kidnapped
the driver and his helper. Only 150 cartons of milk were delivered. The Milk Co. sued
to claim the value of the lost merchandise based on an alleged contract of carriage.
Cendena denied that he was a common carrier and contended that he could not be
liable for the loss it was due to force majeure. The trial court ruled that he was a
common carrier. The CA reversed.
Issue: Whether or not Cendena is a common carrier?
Held: Yes, Cendena is properly characterized as a common carrier even though he
merely backhauled goods for other merchants, and even if it was done on a periodic
basis rather than on a regular basis, and even if his principal occupation was not the
carriage of goods.

Article 1732 makes no distinction between one whose principal business activity
is the carrying of persons or goods or both, and one who does such carrying only as
an ancillary activity. It also avoids making a distinction between a person or
enterprise offering transportation services on a regular or scheduled basis and one
offering service on an occasional, episodic or unscheduled basis. Neither does it
make a distinction between a carrier offering its services to the general public and
one who offers services or solicits business only from a narrow segment of
population.

2. First Philippine Industrial Corporation vs. Court of Appeals

G.R. No. 125948 December 29, 1998
Facts:
Petitioner, First Phil. Industrial Corporation (FirstPhil for brevity) is a grantee of a
pipeline concession under Republic Act No. 387, as amended, to contract, install and
operate oil pipelines. FirstPhil applied for a mayor's permit, but before the mayor's
permit could be issued, the respondent City Treasurer required petitioner to pay a

local tax pursuant to the Local Government Code. Petitioner filed a letter-protest
addressed to the respondent City Treasurer, but the latter denied the same
contending that petitioner cannot be considered engaged in transportation
business, thus it cannot claim exemption under Section 133 (j) of the Local
Government Code.
FirstPhil filed with the RTC Batangas a complaint for tax refund with prayer for writ
of preliminary injunction against respondents, contending that the imposition of tax
upon them violates Sec 133 of the Local Government Code. On the other hand,
respondents assert that pipelines are not included in the term "common carrier"
which refers solely to ordinary carriers such as trucks, trains, ships and the like.
Respondents further posit that the term "common carrier" under the said code
pertains to the mode or manner by which a product is delivered to its destination.
RTC dismissed the complaint, ruling that exemption granted under Sec. 133 (j)
encompasses only "common carriers" so as not to overburden the riding public or
commuters with taxes. And that petitioner is not a common carrier, but a special
carrier extending its services and facilities to a single specific or "special customer"
under a "special contract."
The case was elevated by the petitioner to the CA, but CA affirmed the decision of
the RTC. Hence this petition.
Issue:
WON the petitioner is a "common carrier" and, therefore, exempt from the business
taxc
Held: Petition was granted. CA decision was REVERSED and SET ASIDE.
SC ruled in this case that petitioner is a common carrier and thus, exempt from
business tax.
A "common carrier" may be defined, broadly, as one who holds himself out to the
public as engaged in the business of transporting persons or property from place to
place, for compensation, offering his services to the public generally. Art. 1732 of
the Civil Code defines a "common carrier" as "any person, corporation, firm or
association engaged in the business of carrying or transporting passengers or goods
or both, by land, water, or air, for compensation, offering their services to the
public." The test for determining whether a party is a common carrier of goods is:
1. He must be engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in the transportation of
goods for person generally as a business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his business is confined;

3. He must undertake to carry by the method by which his business is conducted

and over his established roads; and
4. The transportation must be for hire.
Based on the above definitions and requirements, there is no doubt that petitioner
is a common carrier. It is engaged in the business of transporting or carrying goods,
i.e. petroleum products, for hire as a public employment. It undertakes to carry for
all persons indifferently, that is, to all persons who choose to employ its services,
and transports the goods by land and for compensation. The fact that petitioner has
a limited clientele does not exclude it from the definition of a common carrier.
The definition of "common carriers" in the Civil Code makes no distinction as to the
means of transporting, as long as it is by land, water or air. It does not provide that
the transportation of the passengers or goods should be by motor vehicle. In fact, in
the United States, oil pipe line operators are considered common carriers.
Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is
considered a "common carrier.", and at the same time, said act also regards
petroleum operation as a public utility. BIR likewise considers the petitioner a
"common carrier." In so ruling, it held that, since petitioner is a pipeline
concessionaire that is engaged only in transporting petroleum products, it is
considered a common carrier under Republic Act No. 387. Such being the case, it is
not subject to withholding tax prescribed by Revenue Regulations No. 13-78, as
amended.
Section 133 (j), of the Local Government Code, provides:
Sec. 133.Common Limitations on the Taxing Powers of Local Government Units.
Unless otherwise provided herein, the exercise of the taxing powers of provinces,
cities, municipalities, and barangays shall not extend to the levy of the following:
(j) Taxes on the gross receipts of transportation contractors and persons engaged in
the transportation of passengers or freight by hire and common carriers by air, land
or water, except as provided in this Code.
SC held that the legislative intent in excluding from the taxing power of the local
government unit the imposition of business tax against common carriers is to
prevent a duplication of the so-called "common carrier's tax."

G.R. No. 186312

June 29, 2010

SPOUSES DANTE CRUZ and LEONORA CRUZ, Petitioners,

vs.
SUN HOLIDAYS, INC., Respondent.

Facts: Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint on January
25, 2001 against Sun Holidays, Inc. (respondent) with the Regional Trial Court (RTC)
of Pasig City for damages arising from the death of their son Ruelito C. Cruz
(Ruelito) who perished with his wife on September 11, 2000 on board the boat M/B
Coco Beach III that capsized en route to Batangas from Puerto Galera, Oriental
Mindoro where the couple had stayed at Coco Beach Island Resort (Resort) owned
and operated by respondent.
On September 11, 2000, as it was still windy, Matute and 25 other Resort
guests including petitioners son and his wife trekked to the other side of the Coco
Beach mountain that was sheltered from the wind where they boarded M/B Coco
Beach III, which was to ferry them to Batangas.
Shortly after the boat sailed, it started to rain. As it moved farther away from
Puerto Galera and into the open seas, the rain and wind got stronger, causing the
boat to tilt from side to side and the captain to step forward to the front, leaving the
wheel to one of the crew members.
The waves got more unwieldy. After getting hit by two big waves which came
one after the other, M/B Coco Beach III capsized putting all passengers underwater.
The passengers, who had put on their life jackets, struggled to get out of the boat.
Upon seeing the captain, Matute and the other passengers who reached the surface
asked him what they could do to save the people who were still trapped under the
boat. The captain replied "Iligtas niyo na lang ang sarili niyo" (Just save yourselves).
Help came after about 45 minutes when two boats owned by Asia Divers in
Sabang, Puerto Galera passed by the capsized M/B Coco Beach III. Boarded on those
two boats were 22 persons, consisting of 18 passengers and four crew members,
who were brought to Pisa Island. Eight passengers, including petitioners son and his
wife, died during the incident.

Issue: Whether or not respondent is a common carrier.

Held: The Civil Code defines "common carriers" in the following terms:
Article 1732. Common carriers are persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both, by
land, water, or air for compensation, offering their services to the public.
The above article makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one who does such

carrying only as an ancillary activity (in local idiom, as "a sideline"). Article 1732
also carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service
on an occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the "general public," i.e., the
general community or population, and one who offers services or solicits business
only from a narrow segment of the general population. We think that Article 1733
deliberately refrained from making such distinctions.
Indeed, respondent is a common carrier. Its ferry services are so intertwined
with its main business as to be properly considered ancillary thereto. The constancy
of respondents ferry services in its resort operations is underscored by its having its
own Coco Beach boats. And the tour packages it offers, which include the ferry
services, may be availed of by anyone who can afford to pay the same. These
services are thus available to the public.
That respondent does not charge a separate fee or fare for its ferry services
is of no moment. It would be imprudent to suppose that it provides said services at
a loss. The Court is aware of the practice of beach resort operators offering tour
packages to factor the transportation fee in arriving at the tour package price. That
guests who opt not to avail of respondents ferry services pay the same amount is
likewise inconsequential. These guests may only be deemed to have overpaid.

Schmitz Transport & Brokerage Corporation vs Transport Venture Inc

FACTS:
Petitioner, who was in charge of securing requisite clearances, receive the cargoes
from the shipside and deliver it to the consignee Little Giant Steel Pipe Corporation
warehouse at Cainta, Rizal, hired the services of respondent Transport Venture
Incorporation (TVI)s tugboat for the hot rolled steel sheets in coil. Coils were
unloaded to the barge but there was no tugboat to pull the barge to the pier. Due to
strong waves caused by approaching storm, the barge was abandoned. Later, the
barge capsized washing 37 coils into the sea. Consignee was executed a
subrogation receipt by Industrial Insurance after the formers filing of formal claim.
Industrial Insurance filed a complaint against both petitioner and respondent herein.
The trial court held that petitioner and respondent TVI were jointly and severally
liable for the subrogation.
ISSUE:

Whether or not the loss of cargoes was due to fortuitous event.

RULING:
NO. In order, to be considered a fortuitous event: (1) the cause of the unforeseen
and unexpected occurrence, or the failure of the debtor to comply with his
obligation, must be independent of human will; (2) it must be impossible to foresee
the event which constitute the caso fortuito, or if it can be foreseen it must be
impossible to avoid; (3) the occurrence must be such as to render it impossible for
the debtor to fulfill his obligation in any manner; and (4) the obligor must be free
from any participation in the aggravation of the injury resulting to the creditor.
Petitioner and respondent TVI were jointly and severally liable for the amount
of paid by the consignee plus interest computed from the date of decision of the
trial court.