De Guzman v.

CA

Facts:

Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those
that he gathered to Manila for resale using 2 six-wheeler trucks. On the return trip to
Pangasinan, respondent would load his vehicle with cargo which various merchants
wanted delivered, charging fee lower than the commercial rates. Sometime in November
1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750
cartons of Liberty Milk. On December 1, 1970, respondent loaded the cargo. Only 150
boxes were delivered to petitioner because the truck carrying the boxes was hijacked along
the way. Petitioner commenced an action claiming the value of the lost merchandise.
Petitioner argues that respondent, being a common carrier, is bound to exercise
extraordinary diligence, which it failed to do. Private respondent denied that he was a
common carrier, and so he could not be held liable for force majeure. The trial court ruled
against the respondent, but such was reversed by the Court of Appeals.

Issues:

(1) Whether or not private respondent is a common carrier

(2) Whether private respondent is liable for the loss of the goods

Held:

(1) 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. 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. It appears to the Court that private respondent
is properly characterized as a common carrier even though he merely "back-hauled"
goods for other merchants from Manila to Pangasinan, although such backhauling was
done on a periodic or occasional rather than regular or scheduled manner, and even
though private respondent's principal occupation was not the carriage of goods for others.
There is no dispute that private respondent charged his customers a fee for hauling their
goods; that fee frequently fell below commercial freight rates is not relevant here. A
certificate of public convenience is not a requisite for the incurring of liability under the
Civil Code provisions governing common carriers.

(2) Article 1734 establishes the general rule that common carriers are responsible for the
loss, destruction or deterioration of the goods which they carry, "unless the same is due
to any of the following causes only:

a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;

b. Act of the public enemy in war, whether international or civil;

c. Act or omission of the shipper or owner of the goods;

d. The character of the goods or defects in the packing or in the containers; and

e. Order or act of competent public authority."

The hijacking of the carrier's truck - does not fall within any of the five (5) categories of
exempting causes listed in Article 1734. Private respondent as common carrier is
presumed to have been at fault or to have acted negligently. This presumption, however,
may be overthrown by proof of extraordinary diligence on the part of private respondent.
We believe and so hold that the limits of the duty of extraordinary diligence in the
vigilance over the goods carried are reached where the goods are lost as a result of a
robbery which is attended by "grave or irresistible threat, violence or force." we hold that
the occurrence of the loss must reasonably be regarded as quite beyond the control of the
common carrier and properly regarded as a fortuitous event. It is necessary to recall that
even common carriers are not made absolute insurers against all risks of travel and of
transport of goods, and are not held liable for acts or events which cannot be foreseen or
are inevitable, provided that they shall have complied with the rigorous standard of
extraordinary diligence.

First Philippine Industrial Corp. vs. CA

Facts:

Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in
January 1995, petitioner applied for mayors permit in Batangas. However, the Treasurer
required petitioner to pay a local tax based on gross receipts amounting to P956,076.04.
In order not to hamper its operations, petitioner paid the taxes for the first quarter of
1993 amounting to P239,019.01 under protest. On January 20, 1994, petitioner filed a
letter-protest to the City Treasurer, claiming that it is exempt from local tax since it is
engaged in transportation business. The respondent City Treasurer denied the protest,
thus, petitioner filed a complaint before the Regional Trial Court of Batangas for tax
refund. Respondents assert that pipelines are not included in the term common carrier
which refers solely to ordinary carriers or motor vehicles. The trial court dismissed the
complaint, and such was affirmed by the Court of Appeals.

Issue:

Whether a pipeline business is included in the term common carrier so as to entitle the
petitioner to the exemption

Held:
Article 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.