I.

DEFINITION
1. De Guzman v. CA
FACTS
- Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal
in Pangasinan. He would bring such material to Manila for resale. He utilized two (2) six- wheeler
trucks which he owned for hauling the material to Manila. On the return trip to Pangasinan,
respondent would load his vehicles with cargo which various merchants wanted delivered to
different establishments in Pangasinan. For that service, respondent charged freight rates.
- Petitioner Pedro de Guzman a merchant and authorized dealer of General Milk Company
(Philippines), Inc. in Urdaneta, Pangasinan, contracted with respondent for the hauling of 750
cartons of Liberty filled milk from a warehouse of General Milk in Makati to petitioner's
establishment in Urdaneta
- Respondent loaded in Makati the merchandise on to his trucks: 150 cartons were loaded on a truck
driven by respondent himself, while 600 cartons were placed on board the other truck which was
driven by Manuel Estrada, respondent's driver and employee.
- Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never
reached petitioner, since the truck was hijacked somewhere along MacArthur Highway in Tarlac, by
armed men
- Petitioner commenced action against private respondent demanding payment of P 22,150.00, the
claimed value of the lost merchandise - Petitioner argued that private respondent, being common
carrier, and should be held liable for the value of the undelivered goods-- respondent denied that he
was a common carrier
- The trial court rendered a Decision finding private respondent to be a common carrier and holding
him liable
- The Court of Appeals reversed the judgment of the trial court and held that respondent had been
engaged in transporting return loads of freight "as a casual occupation a sideline to his scrap iron
business" and not as a common carrier.
ISSUE
- Whether or not private respondent Ernesto Cendana may be properly characterized as a common
carrier (Yes)
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.
2. National Steel Corp v. CA
FACTS
- The MV Vlasons I is a vessel which renders tramping service and, as such, does not transport cargo
or shipment for the general public. It is undisputed that the ship is a private carrier. And it is in this
capacity that its owner, Vlasons Shipping, Inc., entered into a contract of affreightment or contract of
voyage charter hire with National Steel Corporation.
- Plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc.
(VSI) as Owner, entered into a Contract of Voyage Charter Hire whereby NSC hired VSIs vessel, the
MV VLASONS I to make one (1) voyage to load steel products at Iligan City and discharge them at
North Harbor, Manila

- Under paragraph 10 of the contract, it is provided that owners shall exercise due diligence to make
the vessel seaworthy and properly manned, equipped and supplied. Owners shall not be liable for
loss of or damage o the cargo arising or resulting from unseaworthiness unless caused by want of
due diligence on the part of the owners; also provides that owners shall not be responsible for any
damage unless caused by the negligence or default of the master and crew.
- MV VLASONS I loaded at plaintiffs pier at Iligan City, the NSCs shipment of 1,677 skids of
tinplates and 92 packages of hot rolled sheets or a total of 1,769 packages-- shipment was placed in
the three (3) hatches of the ship.
- The vessel arrived with the cargo when the vessels three (3) hatches containing the shipment were
opened by plaintiffs agents, nearly all the skids of tinplates and hot rolled sheets were allegedly
found to be wet and rusty. Unloading was completed after incurring a delay of 11 days due to the
heavy rain
- It was reported that the rusting of the tinplates was caused by contact with SEA WATER sustained
while still on board the vessel as a consequence of the heavy weather and rough seas encountered
- Plaintiff filed a complaint and claimed that it sustained losses because of the neglect and default of
the master and crew in the management of the vessel well as the want of due diligence on the part of
the defendant to make the vessel seaworthy
- Defendant denied liability for the alleged damage claiming that the MV VLASONS was seaworthy
in all respects for the carriage of plaintiffs cargo; that said vessel was not a common carrier; that
MVLASONS I exercised due diligence and proper seamanship and were not willfully negligent; that
the stevedores of plaintiff who discharged the cargo in Manila were negligent and did not exercise
due care in the discharge of the cargo
- Trial court's decision: that the MV VLASONS I was seaworthy and properly that tinplates sweat by
themselves when packed even without being in contract (sic) with water from outside especially
when the weather is bad or raining; defendant cannot be held liable for it pursuant to Article 1734 of
the Civil Code; The stevedores hired by the plaintiff to discharge the cargo of tinplates were
negligent in not osing the hatch openings of the MV VLASONS I when rains occurred
ISSUE
- Whether MV VLASONS I is a common carrier or not
HELD
- It has been held that the true test of a common carrier is the carriage of passengers or goods,
provided it has space, for all who opt to avail themselves of its transportation service for a fee. A
carrier which does not qualify under the above test is deemed a private carrier. Generally, private
carriage is undertaken by special agreement and the carrier does not hold himself out to carry
goods for the general public. The most typical, although not the only form of private carriage, is
the charter party, a maritime contract by which the charterer, a party other than the shipowner,
obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages.
- MV Vlasons I was not a common but a private carrier. Consequently, the rights and obligations of
VSI an NSC, including their respective liability for damage to the cargo, are determined primarily by
stipulations in their contract of private carriage or charter party
3. First Philippine Industrial Corp v. CA
FACTS
- Petitioner is a grantee of a pipeline concession under Republic Act No. 387 to contract, install and
operate oil pipelines
- In 1995, petitioner applied for a mayor's permit. However, before it could be issued, the respondent
City Treasurer required petitioner to pay a local tax based on its gross receipts for the fiscal year
1993 pursuant to the Local Government Code.
- Not to hamper its operations, petitioner paid the tax under protest. Petitioner wrote a letter
addressed to the City Treasurer stating that their company is a pipeline operator with a government
concession granted under the Petroleum Act. It is engaged in the business of transporting petroleum
products from the Batangas refineries, via pipeline, to Sucat and JTF Pandacan Terminals. Thus,
their company is exempt from paying tax on gross receipts under Section 133 of the Local
Government Code of 1991
- Petitioner filed with the RTC a complaint for tax refund.

- Respondents contention: exemption applies only to "transportation contractors and persons

engaged in the transportation by hire and common carriers by air, land and water." Pipelines are not
included in the term "common carrier" which refers solely to ordinary carriers such as trucks, trains,
ships and the like. And 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 petitioners complaint. CA affirmed.
ISSUE
- Whether or not petitioner is a common carrier or not
HELD
- 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
- As correctly pointed out by petitioner, 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.
4. Calvo v. UCPB General Insurance Terminal Services
5. FGU Insurance Corporation v.
II. CHARACTERESTICS