De Guzman v.
Court of Appeals general community or population, and one who offers
Respondent Ernesto Cendaña, a junk dealer, was
engaged in buying up used bottles and scrap metal. n.
Upon gathering sufficient quantities of such scrap
material, respondent would bring such material to
Manila for resale. e. He utilized two (2) sixwheeler
trucks which he owned for hauling the material to
Manila. n. For that service, respondent charged
freight rates which were commonly lower than
regular commercial rates.
petitioner Pedro de Guzman, a merchant and
authorized dealer of General Milk Company
(Philippines), , contracted with respondent for the
hauling of 750 cartons of Liberty filled milk from a
warehouse of General Milk in Makati, Rizal, to
petitioner's establishment in Urdaneta on or before 4
December 1970. Accordingly, on 1 December 1970,
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 while the 600 ever reach the petiotner due
to it was hijacked. So the petitioner filed an action
against the petioner.
Issue : Whether or not cendana 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 principalbusiness 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
services or solicits business only from a narrow
segment of the general population. We think that
Article 1733 deliberately refrained from making such
distinctions
So understood, the concept of "common carrier"
under Article 1732 may be seen to coincide neatly
with the notion of "public service" under the Public
Service Act (Commonwealth Act No. 1416, as
amended) which at least partially supplements the
law on common carriers set forth in the Civil Code.
Under Section 13, paragraph (b) of the Public Service
Act, "public service" 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.
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;
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity; (2) Act of the public
enemy in war, whether international or civil; (3) Act
or omission of the shipper or owner of the goods; (4)
The character of the goods or defects in the packing
or in the containers; (5) Order or act of competent
public authority."
Common carriers, "by the nature of their business and
for reasons of public policy,"[2] are held to a very
high degree of care and diligence ("extraordinary
diligence") in the carriage of goods as well as of
passengers. The specific import of extraordinary
diligence in the care of goods transported by a
common carrier is, according to Article 1733,
"further expressed in Articles 1734, 1735 and 1745,
numbers 5, 6 and 7" of the Civil Code.
FIRST PHILIPPINE INDUSTRIAL
CORPORATION v. CA, GR No. 125948, 1998-12-
29
Facts:
Petitioner is a grantee of a pipeline concession under
Republic Act No. 387, as amended, to contract,
install and operate oil pipelines. The original pipeline
concession was granted in 1967[1] and renewed by
the Energy Regulatory Board in 1992.
petitioner applied for a mayor's permit with the
Office of the Mayor of Batangas City.
However, 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.
The respondent City Treasurer assessed a business
tax on the petitioner... based on the gross receipts for
products pumped... petitioner paid the tax under
protest... respondent City Treasurer denied the protest
contending that petitioner cannot be considered
engaged in transportation business, thus it cannot
claim exemption
Issues:
Court of Appeals erred in holding that (1) the
petitioner is not a common carrier or a transportation
contractor, and (2) the exemption sought for by
petitioner is not clear under the law.
Ruling:
There is merit in the petition.
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.
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.
SPOUSES TEODORO and NANETTE PERENA,
Petitioners, v. SPOUSES NICOLAS and
TERESITA L. ZARATE, PHILIPPINE
NATIONAL RAILWAYS, and the COURT OF
APPEALS, Respondents.
BERSAMIN, J.:
FACTS:
Spouses Teodoro and Nanette Peres (Peres) were
engaged in the business of transporting students from
their respective residences in Paraque City to Don
Bosco in Pasong Tamo, Makati City, and back. They
employed Clemente Alfaro (Alfaro) as driver of the
van. Spouses Nicolas and Teresita Zarate (Zarates)
contracted the Peres to transport their son Aaron to
and from Don Bosco.
Considering that the students were due at Don Bosco
by 7:15 a.m., and that they were already running late
because of the heavy vehicular traffic on the South
Superhighway, Alfaro took the van to an alternate
route at about 6:45 a.m. by traversing the narrow path
underneath the Magallanes Interchange. The railroad
crossing in the narrow path had no railroad warning
signs, or watchmen, or other responsible persons
manning the crossing. In fact, the bamboo barandilla
was up, leaving the railroad crossing open to
traversing motorists.
At about the time the van was to traverse the railroad
crossing, PNR Commuter No. 302 (train), was in the
vicinity of the Magallanes Interchange travelling
northbound. As the train neared the railroad crossing,
Alfaro drove the van eastward across the railroad
tracks, closely tailing a large passenger bus. His view
of the oncoming train was blocked because he
overtook the passenger bus on its left side. The train
blew its horn to warn motorists of its approach. The
passenger bus successfully crossed the railroad
tracks, but the van driven by Alfaro did not. The
impact threw nine of the 12 students in the rear,
including Aaron, out of the van. Aaron landed in the
path of the train, which dragged his body and severed
his head, instantaneously killing him.
Thus, the Zarates sued the Peres for breach of
contract of carriage and the PNR for quasi-delict. The
RTC ruled in favor of the Zarates. On appeal, the CA
affirmed the findings of the RTC.
ISSUE: Whether or not the Peres are liable for breach
of contract of carriage?
HELD: The petition has no merit.
CIVIL LAW: common carrier; extraordinary
diligence
common carrier should "carry the passengers safely
as far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with a
due regard for all the circumstances." To successfully
fend off liability in an action upon the death or injury
to a passenger, the common carrier must prove his or
its observance of that extraordinary diligence;
otherwise, the legal presumption that he or it was at
fault or acted negligently would stand.
According to Article 1759 of the Civil Code, their
liability as a common carrier did not cease upon
proof that they exercised all the diligence of a good
father of a family in the selection and supervision of
their employee. The Peres were liable for the death of
Aaron despite the fact that their driver might have
acted beyond the scope of his authority or even in
violation of the orders of the common
carrier. DENIED.

A common carrier is a 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 such services
to the public. Contracts of common carriage are
governed by the provisions on common carriers of
the Civil Code, the Public Service Act, and other
special laws relating to transportation. A common
carrier is required to observe extraordinary diligence,
and is presumed to be at fault or to have acted
negligently in case of the loss of the effects of
passengers, or the death or injuries to passengers. The
true test for a common carrier is not the quantity or
extent of the business actually transacted, or the
number and character of the conveyances used in the
activity, but whether the undertaking is a part of the
activity engaged in by the carrier that he has held out
to the general public as his business or occupation.

Applying these considerations to the case before us,

there is no question that the Peres as the operators of
a school bus service were: (a) engaged in transporting
passengers generally as a business, not just as a
casual occupation; (b) undertaking to carry
passengers over established roads by the method by
which the business was conducted; and (c)
transporting students for a fee. Despite catering to a
limited clientele, the Peres operated as a common
carrier because they held themselves out as a ready
transportation indiscriminately to the students of a
particular school living within or near where they
operated the service and for a fee.

Article 1755 of the Civil Code specifies that the