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.
NATIONAL STEEL CORPORATION vs. CA and VLASONS SHIPPING, INC.

[G.R. No. 112287. December 12, 1997]

FACTS:

National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc. (VSI) as Owner, entered into a
Contract of Voyage Charter Hire (Affreightment) whereby NSC hired VSI’s vessel, the MV ‘VLASONS I’ to make one (1)
voyage to load steel products at Iligan City and discharge them at North Harbor, Manila. VSI carried passengers or goods
only for those it chose under a “special contract of charter party.”

The vessel arrived with the cargo in Manila, but when the vessel’s three (3) hatches containing the shipment were
opened, nearly all the skids of tin plates and hot rolled sheets were allegedly found to be wet and rusty.

NSC filed its complaint against defendant before the CFI wherein it claimed that it sustained losses as a result of the “act,
neglect and default of the master and crew in the management of the vessel as well as the want of due diligence on the
part of the defendant to make the vessel seaworthy … -- all in violation of defendant’s undertaking under their Contract of
Voyage Charter Hire.”

In its answer, defendant denied liability for the alleged damage claiming that the MV ‘VLASONS I’ was seaworthy in all
respects for the carriage of plaintiff’s cargo; that said vessel was not a ‘common carrier’ inasmuch as she was under
voyage charter contract with the plaintiff as charterer under the charter party.

The trial court ruled in favor of VSI; it was affirmed by the CA on appeal.

ISSUE:

Whether or not Vlazons is a private carrier.

HELD:

Yes.

At the outset, it is essential to establish whether VSI contracted with NSC as a common carrier or as a private carrier. The
resolution of this preliminary question determines the law, standard of diligence and burden of proof applicable to the
present case.

Article 1732 of the Civil Code defines a common carrier as “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.” 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.”

In the instant case, it is undisputed that VSI did not offer its services to the general public. As found by the Regional Trial
Court, it carried passengers or goods only for those it chose under a “special contract of charter party.” As correctly
concluded by the Court of Appeals, the MV Vlasons I “was not a common but a private carrier.” Consequently, the rights
and obligations of VSI and NSC, including their respective liability for damage to the cargo, are determined primarily by
stipulations in their contract of private carriage or charter party. Recently, in Valenzuela Hardwood and Industrial Supply,
Inc., vs. Court of Appeals and Seven Brothers Shipping Corporation, the Court ruled:

“ x x x [I]n a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce
would be binding on them. Unlike in a contract involving a common carrier, private carriage does not involve the general
public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot
justifiably be applied to a ship transporting commercial goods as a private carrier. Consequently, the public policy
embodied therein is not contravened by stipulations in a charter party that lessen or remove the protection given by law
in contracts involving common carriers.”
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 mayor’s 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.

Calvo v. UCPB General Insurance

G.R. No. 148496 March 19, 2002

Facts: Petitioner Virgines Calvo, owner of Transorient Container Terminal Services, Inc. (TCTSI), and a custom broker,
entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper
and 124 reels of kraft liner board from the port area to the Tabacalera Compound, Ermita, Manila. The cargo was insured
by respondent UCPB General Insurance Co., Inc.

On July 14, 1990, contained in 30 metal vans, arrived in Manila on board “M/V Hayakawa Maru”. After 24 hours, they
were unloaded from vessel to the custody of the arrastre operator, Manila Port Services, Inc. From July 23 to 25, 1990,
petitioner, pursuant to her contract with SMC, withdrew the cargo from the arrastre operator and delivered it to SMC’s
warehouse in Manila. On July 25, the goods were inspected by Marine Cargo Surveyors, reported that 15 reels of the semi-
chemical fluting paper were “wet/stained/torn” and 3 reels of kraft liner board were also torn. The damages cost
P93,112.00.
SMC collected the said amount from respondent UCPB under its insurance contract. Respondent on the other hand, as a
subrogee of SMC, brought a suit against petitioner in RTC, Makati City. On December 20, 1995, the RTC rendered
judgment finding petitioner liable for the damage to the shipment. The decision was affirmed by the CA.

Issue: Whether or not Calvo is a common carrier?

Held: In this case the contention of the petitioner, that he is not a common carrier but a private carrier, has no merit.

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 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. We think that Article 1733 deliberately refrained from
making such distinction. (De Guzman v. CA, 68 SCRA 612)

Te concept of “common carrier” under Article 1732 coincide with the notion of “public service”, under the Public Service
Act which partially supplements the law on common carrier. Under Section 13, paragraph (b) of the Public Service Act, it
includes:

“ x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or
compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general
business purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight
or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any
class, express service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the transportation of
passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal,
irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or
wireless communications systems, wire or wireless broadcasting stations and other similar public services. x x x”