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 v. COURT OF APPEALS

G.R. No. 112287 December 12, 1997
Panganiban, J.

Doctrine:
The stringent provisions of the Civil Code on common carriers protecting the general public cannot
justifiably be applied to a private carrier.

Facts:
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 VSI’s vessel, the MV Vlasons I
to make one voyage to load steel products at Iligan City and discharge them at North Harbor, Manila.
The handling, loading and unloading of the cargoes were the responsibility of the Charterer.

The skids of tinplates and hot rolled sheets shipped were allegedly found to be wet and rusty. Plaintiff,
alleging negligence, filed a claim for damages against the defendant who denied liability 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; that in the course its voyage, the vessel encountered very rough seas.

Issue:
Whether or not the provisions of the Civil Code on common carriers pursuant to which there exists a
presumption of negligence against the common carrier in case of loss or damage to the cargo are
applicable to a private carrier.

Held:
No. In 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.

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 [Mendoza vs.
Philippine Airlines, Inc., 90 Phil. 836, 842-843 (1952)]. 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.

Because the MV Vlasons I was a private carrier, the ship owner’s obligations are governed by the
foregoing provisions of the Code of Commerce and not by the Civil Code which, as a general rule, places
the prima facie presumption of negligence on a common carrier.

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”

FGU Insurance Corporation vs. G.P. Sarmiento Trucking Corporation and Lambert Eroles
PONENTE:Vitug, J.

DOCTRINES: 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 hire
or compensation, offering their services to the public, whether to the public in general or to a
limited clientele in particular, but never on an exclusive basis. The true test of a common carrier
is the carriage of passengers or goods, providing space for those who opt to avail themselves of
its transportation service for a fee. Given accepted standards, GPS scarcely falls within the term
“common carrier"

FACTS: G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver (30) units of Condura S.D.
white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of
Concepcion Industries, Inc., along South Superhighway in Alabang, Metro Manila, to the Central
Luzon Appliances in Dagupan City. While the truck was traversing the north diversion road along
McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck,
causing it to fall into a deep canal, resulting in damage to the cargoes.

ISSUE: WON GPS is common carrier

PETITIONER’S CONTENTION: FGU Insurance Corporation (FGU), an insurer of the shipment, paid to
Concepcion Industries, Inc., and sought reimbursement from GPS. Since the trucking company failed
to heed the claim, FGU filed a complaint for damages and breach of contract of carriage against
GPS and its driver Lambert Eroles.

RESPONDENT’S CONTENTION: Respondents asserted that GPS was the exclusive hauler only of
Concepcion Industries, Inc., since 1988, and it was not so engaged in business as a common
carrier. Respondents further claimed that the cause of damage was purely accidental
RULING: CA decision REVERSED. GPS, being an exclusive contractor and hauler of Concepcion
Industries, Inc., rendering or offering its services to no other individual or entity, cannot be
considered a common carrier. (Define Common Carrier and cite True Test of a Common Carrier).
GPS cannot escape from liability. GPS is liable culpa contractual. The mere proof of existence of
contract of carriage and the failure to comply therewith, justify, prima facie, corresponding right
of relief. As the driver of the insured was not shown to be at fault, he cannot be ordered to
pay FGU because the driver is not the party to the contract of carriage

PhilAm Generql Insurance vs. PKS Shipping Company

Facts:

Davao Union Marketing Corporation (DUMC) contracted the services of respondent PKS Shipping
Company (PKS Shipping) for the shipment to Tacloban City of seventy-five thousand (75,000) bags of
cement worth Three Million Three Hundred Seventy-Five Thousand Pesos (P3,375,000.00). DUMC
insured the goods for its full value with petitioner Philippine American General Insurance Company
(Philamgen). During the transport, the barge where the bags of cement were loaded, sank. Upon
demand of payment by DUMC, Philamgen immediately paid them. Hence, it sought reimbursement
from PKS Shipping but the latter refused.

Issue:

Whether PKS Shipping is a common carrier or a private carrier; and

WON PKS Shipping exercised the required diligence over the goods they carry. Or, WON PKS Shipping is
liable.

Held:

PKS Shipping is a common carrier.

PKS Shipping has engaged itself in the business of carrying goods for others, although for a limited
clientele, undertaking to carry such goods for a fee. The regularity of its activities in this area indicates
more than just a casual activity on its part. Neither can the concept of a common carrier change merely
because individual contracts are executed or entered into with patrons of the carrier.

PKS Shipping is not liable.

The vessel was suddenly tossed by waves of extraordinary height of six (6) to eight (8) feet and
buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches. The official
Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise Load Line
Certificate would attest to the seaworthiness of Limar I. As such, under Art. 1733, NCC, common carriers
are exempt from liability for loss, destruction, or deterioration of the goods due to any of the following
causes, among others:
Flood, storm, earthquake, lightning, or other natural disaster or calamity x x x