Crisostomo v. CA given to petitioner two days ahead of the scheduled trip.

G.R. No. 138334, August 25, 2003, 409 SCRA 528 Respondent further contend that petitioner had only herself to
FACTS: blame for missing the flight, as she did not bother to read or
Petitioner contracted the services of respondent Caravan Travel confirm her flight schedule as printed on the ticket.
and Tours International, Inc. to arrange and facilitate her
booking, ticketing and accommodation in a tour dubbed Jewels ISSUE:
of Europe. Pursuant to said contract, the travel documents and Whether or not Caravan Travel & Tours International Inc. is
plane tickets were delivered to the petitioner who in turn gave negligent in the fulfilment of its obligation to petitioner
the full payment for the package tour on June 12, 1991. Without Crisostomo thus granting to the petitioner the consequential
checking her travel documents, petitioner went to NAIA on damages due her as a result of breach of contract of carriage.
Saturday, June 15, 1991, to take the flight for the first leg of her
journey from Manila to Hongkong. To petitioner’s dismay, she RULING:
discovered that the flight she was supposed to take had already Contention of petitioner has no merit. A contract of carriage or
departed the previous day. She learned that her plane ticket was transportation is one whereby a certain person or association of
for the flight scheduled on June 14, 1991. She thus called up persons obligate themselves to transport persons, things, or
Menor to complain. Subsequently, Menor prevailed upon news from one place to another for a fixed price. Such person
petitioner to take another tour- the British Pageant. Upon or association of persons are regarded as carriers and are
petitioner’s return from Europe, she demanded from respondent classified as private or special carriers and common or public
the reimbursement of the difference between the sum she paid carriers. Respondent is not an entity engaged in the business of
for Jewels of Europe and the amount she owed respondent for transporting either passengers or goods and is therefore, neither
the British Pageant tour. a private nor a common carrier. Respondent did not undertake
Petitioner filed a complaint against respondent for breach of to transport petitioner from one place to another since its
contract of carriage and damages alleging that her failure to covenant with its customers is simply to make travel
join Jewels of Europe was due to respondent’s fault since it did arrangements in their behalf. Respondent’s services as a travel
not clearly indicate the departure date on the plane, failing to agency include procuring tickets and facilitating travel permits
observe the standard of care required of a common carrier when or visas as well as booking customers for tours.
it informed her wrongly of the flight schedule. For its part, The object of petitioner’s contractual relation with respondent
respondent company, denied responsibility for petitioner’s is the service of arranging and facilitating petitioners booking,
failure to join the first tour, insisting that petitioner was ticketing and accommodation in the package tour. In contrast,
informed of the correct departure date, which was clearly and the object of a contract of carriage is the transportation of
legibly printed on the plane ticket. The travel documents were passengers or goods. It is in this sense that the contract between

the parties in this case was an ordinary one for services and not
one of carriage. Since the contract between the parties is an
ordinary one for services, the standard of care required of
respondent is that of a good father of a family under Article
1173 of the Civil Code. The evidence on record shows that
respondent exercised due diligence in performing its
obligations under the contract and followed standard procedure
in rendering its services to petitioner. As correctly observed by
the lower court, the plane ticket issued to petitioner clearly
reflected the departure date and time, contrary to petitioner’s
contention. The travel documents, consisting of the tour
itinerary, vouchers and instructions, were likewise delivered to
petitioner two days prior to the trip. Respondent also properly
booked petitioner for the tour, prepared the necessary
documents and procured the plane tickets. It arranged
petitioner’s hotel accommodation as well as food, land transfers
and sightseeing excursions, in accordance with its avowed
undertaking. The evidence on record shows that respondent
company performed its duty diligently and did not commit any
contractual breach. Hence, petitioner cannot recover and must
bear her own damage.

 De Guzman vs CA gathering sufficient quantities of such scrap material,

respondent would bring such material to Manila for resale. He
The law makes no distinction between one whose principal utilized two (2) six-wheeler trucks which he owned for hauling
business activity is the carrying of persons or goods or both, the material to Manila. On the return trip to Pangasinan,
and one who does such carrying only as an ancillary activity respondent would load his vehicles with cargo which various
(in local Idiom as "a sideline"). Article 1732 also carefully merchants wanted delivered to differing establishments in
avoids making any distinction between a person or enterprise Pangasinan. For that service, respondent charged freight rates
offering transportation service on a regular or scheduled basis which were commonly lower than regular commercial rates.
and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish Sometime in November 1970, petitioner Pedro de Guzman a
between a carrier offering its services to the "general public," merchant and authorized dealer of General Milk Company
i.e., the general community or population, and one who offers (Philippines), Inc. in Urdaneta, Pangasinan, contracted with
services or solicits business only from a narrow segment of the respondent for the hauling of 750 cartons of Liberty filled milk
general population. from a warehouse of General Milk in Makati, Rizal, to
petitioner's establishment in Urdaneta on or before 4 December
Here, Ernesto Cendana is deemed a common carrier. He is a 1970. Accordingly, on 1 December 1970, respondent loaded in
junk dealer who was engaged in buying up used bottles and Makati the merchandise on to his trucks: 150 cartons were
scrap metal in Pangasinan. Upon gathering sufficient loaded on a truck driven by respondent himself, while 600
quantities of such scrap material, respondent would bring such cartons were placed on board the other truck which was driven
material to Manila for resale. He utilized two (2) six-wheeler by Manuel Estrada, respondent's driver and employee.
trucks which he owned for hauling the material to Manila. On
the return trip to Pangasinan, respondent would load his Only 150 boxes of Liberty filled milk were delivered to
vehicles with cargo which various merchants wanted delivered petitioner. The other 600 boxes never reached petitioner, since
to differing establishments in Pangasinan. For that service, the truck which carried these boxes was hijacked somewhere
respondent charged freight rates which were commonly lower along the MacArthur Highway in Paniqui, Tarlac, by armed
than regular commercial rates. men who took with them the truck, its driver, his helper and the
cargo.
FACTS
On 6 January 1971, petitioner commenced action against
Respondent Ernesto Cendana, a junk dealer, was engaged in private respondent in the Court of First Instance of Pangasinan,
buying up used bottles and scrap metal in Pangasinan. Upon demanding payment of P 22,150.00, the claimed value of the

 lost merchandise, plus damages and attorney's fees. Petitioner So understood, the concept of "common carrier" under Article
argued that private respondent, being a common carrier, and 1732 may be seen to coincide neatly with the notion of "public
having failed to exercise the extraordinary diligence required of service," under the Public Service Act (Commonwealth Act No.
him by the law, should be held liable for the value of the 1416, as amended) which at least partially supplements the law
undelivered goods. on common carriers set forth in the Civil Code. Under Section
13, paragraph (b) of the Public Service Act, "public service"
In his Answer, private respondent denied that he was a common includes:
carrier and argued that he could not be held responsible for the
value of the lost goods, such loss having been due to force ... every person that now or hereafter may own, operate,
majeure. manage, or control in the Philippines, for hire or compensation,
with general or limited clientele, whether permanent,
ISSUES occasional or accidental, and done for general business
purposes, any common carrier, railroad, street railway, traction
I. Whether respondent is a common carrier (YES) II. Whether railway, subway motor vehicle, either for freight or passenger,
respondent is liable (NO) or both, with or without fixed route and whatever may be its
classification, freight or carrier service of any class, express
RULING
service, steamboat, or steamship line, pontines, ferries and
I. water craft, engaged in the transportation of passengers or
The law makes no distinction between one whose principal freight or both, shipyard, marine repair shop, wharf or dock, ice
business activity is the carrying of persons or goods or both, plant, ice-refrigeration plant, canal, irrigation system, gas,
and one who does such carrying only as an ancillary activity (in electric light, heat and power, water supply and power
local Idiom as "a sideline"). Article 1732 also carefully avoids petroleum, sewerage system, wire or wireless communications
making any distinction between a person or enterprise offering systems, wire or wireless broadcasting stations and other
transportation service on a regular or scheduled basis and one similar public services.
offering such service on an occasional, episodic or unscheduled
It appears to the Court that private respondent is properly
basis. Neither does Article 1732 distinguish between a carrier
characterized as a common carrier even though he merely
offering its services to the "general public," i.e., the general
"back-hauled" goods for other merchants from Manila to
community or population, and one who offers services or
Pangasinan, although such back-hauling was done on a periodic
solicits business only from a narrow segment of the general
or occasional rather than regular or scheduled manner, and even
population.
though private respondent's principal occupation was not the



 carriage of goods for others. There is no dispute that private II.

respondent charged his customers a fee for hauling their goods; The precise issue that we address here relates to the specific
that fee frequently fell below commercial freight rates is not requirements of the duty of extraordinary diligence in the
relevant here. vigilance over the goods carried in the specific context of
hijacking or armed robbery.
The Court of Appeals referred to the fact that private
respondent held no certificate of public convenience, and Under Article 1745 (6) above, a common carrier is held
concluded he was not a common carrier. This is palpable error. responsible - and will not be allowed to divest or to diminish
A certificate of public convenience is not a requisite for the such responsibility - even for acts of strangers like thieves or
incurring of liability under the Civil Code provisions governing robbers, except where such thieves or robbers in fact acted
common carriers. That liability arises the moment a person or "with grave or irresistible threat, violence or force." We believe
firm acts as a common carrier, without regard to whether or not and so hold that the limits of the duty of extraordinary diligence
such carrier has also complied with the requirements of the in the vigilance over the goods carried are reached where the
applicable regulatory statute and implementing regulations and goods are lost as a result of a robbery which is attended by
has been granted a certificate of public convenience or other "grave or irresistible threat, violence or force."
franchise. To exempt private respondent from the liabilities of a
common carrier because he has not secured the necessary In the instant case, armed men held up the second truck owned
certificate of public convenience, would be offensive to sound by private respondent which carried petitioner's cargo. The
public policy; that would be to reward private respondent record shows that an information for robbery in band was filed
precisely for failing to comply with applicable statutory in the Court of First Instance of Tarlac, Branch 2, in Criminal
requirements. The business of a common carrier impinges Case No. 198 entitled "People of the Philippines v. Felipe
directly and intimately upon the safety and well being and Boncorno, Napoleon Presno, Armando Mesina, Oscar Oria and
property of those members of the general community who one John Doe." There, the accused were charged with willfully
happen to deal with such carrier. The law imposes duties and and unlawfully taking and carrying away with them the second
liabilities upon common carriers for the safety and protection of truck, driven by Manuel Estrada and loaded with the 600
those who utilize their services and the law cannot allow a cartons of Liberty filled milk destined for delivery at
common carrier to render such duties and liabilities merely petitioner's store in Urdaneta, Pangasinan. The decision of the
facultative by simply failing to obtain the necessary permits and trial court shows that the accused acted with grave, if not
authorizations. irresistible, threat, violence or force. Three (3) of the five (5)
hold-uppers were armed with firearms. The robbers not only
took away the truck and its cargo but also kidnapped the driver



and his helper, detaining them for several days and later
releasing them in another province (in Zambales). The hijacked
truck was subsequently found by the police in Quezon City.
The Court of First Instance convicted all the accused of
robbery, though not of robbery in band.

In these circumstances, 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.

We, therefore, agree with the result reached by the Court of

Appeals that private respondent Cendana is not liable for the
value of the undelivered merchandise which was lost because
of an event entirely beyond private respondent's control.

 Examples of common carrier 1. Pipeline operator business tax on the petitioner. In order not to hamper its
operations, petitioner paid the tax under protest.
First Philippine Industrial Corporation vs. Court of Appeals,
G.R. No. 125948, December 29, 1989 On January 20, 1994, petitioner filed a letter-protest addressed
to the respondent City Treasurer claiming that it is exempt from
FIRST PHILIPPINE INDUSTRIAL CORPORATION, said tax because if is a transportation contractor.
Petitioner, -versus- COURT OF APPEALS, HONORABLE
PATERNO V. TAC-AN, BATANGAS CITY and Respondent City Treasurer denied the protest contending that
ADORACION C. ARELLANO, in her official capacity as petitioner cannot be considered engaged in transportation
City Treasurer of Batangas, Respondents business, thus it cannot claim exemption under Section 133 (j)
G.R. No. 125948, SECOND DIVISION, December 29, 1998, of the Local Government Code
MARTINEZ, J.
Petitioner filed with the Regional Trial Court of Batangas City
As correctly pointed out by petitioner, the definition of a complaint6 for tax refund with prayer for writ of preliminary
"common carriers" in the Civil Code makes no distinction as to injunction against respondents City of Batangas and Adoracion
the means of transporting, as long as it is by land, water or air. Arellano in her capacity as City Treasurer. In its complaint,
It does not provide that the transportation of the passengers or petitioner alleged, inter alia, that: (1) the imposition and
goods should be by motor vehicle. In fact, in the United States, collection of the business tax on its gross receipts violates
oil pipe line operators are considered common carriers. Section 133 of the Local Government Code; (2) the authority of
cities to impose and collect a tax on the gross receipts of
FACTS "contractors and independent contractors" under Sec. 141 (e)
and 151 does not include the authority to collect such taxes on
Petitioner is a grantee of a pipeline concession under Republic transportation contractors for, as defined under Sec. 131 (h), the
Act No. 387, as amended, to contract, install and operate oil term "contractors" excludes transportation contractors; and, (3)
pipelines. the City Treasurer illegally and erroneously imposed and
collected the said tax, thus meriting the immediate refund of the
Sometime in January 1995, petitioner applied for a mayor's
tax paid.
permit with the Office of the Mayor of Batangas City. However,
before the mayor's permit could be issued, the respondent City ISSUE
Treasurer required petitioner to pay a local tax based on its
gross receipts for the fiscal year 1993 pursuant to the Local Whether the petitioner is a common carrier (YES)
Government Code. The respondent City Treasurer assessed a
􏰆

 RULING clientele does not exclude it from the definition of a common

carrier.
"Common carrier" may be defined, broadly, as one who holds
himself out to the public as engaged in the business of Also, respondent's argument that the term "common carrier" as
transporting persons or property from place to place, for used in Section 133 (j) of the Local Government Code refers
compensation, offering his services to the public generally. only to common carriers transporting goods and passengers
through moving vehicles or vessels either by land, sea or water,
Art. 1732 of the Civil Code defines a "common carrier" as "any is erroneous.
person, corporation, firm or association engaged in the business
of carrying or transporting passengers or goods or both, by As correctly pointed out by petitioner, the definition of
land, water, or air, for compensation, offering their services to "common carriers" in the Civil Code makes no distinction as to
the public." 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
The test for determining whether a party is a common carrier of goods should be by motor vehicle. In fact, in the United States,
goods is: oil pipe line operators are considered common carriers.
1. He must be engaged in the business of carrying goods for
others as a public employment, and must hold himself out as Under the Petroleum Act of the Philippines (Republic Act 387),
ready to engage in the transportation of goods for person petitioner is considered a "common carrier."
generally as a business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his The Bureau of Internal Revenue likewise considers the
business is confined; petitioner a "common carrier." In BIR Ruling No. 069-83, it
3. He must undertake to carry by the method by which his declared:
business is conducted and over his established roads; and
. . . since [petitioner] is a pipeline concessionaire that is
4. The transportation must be for hire.
engaged only in transporting petroleum products, it is
Based on the above definitions and requirements, there is no considered a common carrier under Republic Act No. 387 . . . .
doubt that petitioner is a common carrier. It is engaged in the Such being the case, it is not subject to withholding tax
business of transporting or carrying goods, i.e. petroleum prescribed by Revenue Regulations No. 13-78, as amended.
products, for hire as a public employment. It undertakes to
From the foregoing disquisition, there is no doubt that
carry for all persons indifferently, that is, to all persons who
petitioner is a "common carrier" and, therefore, exempt from
choose to employ its services, and transports the goods by land
and for compensation. The fact that petitioner has a limited

the business tax as provided for in Section 133 (j), of the Local
Government Code.

It is clear that the legislative intent in excluding from the taxing

power of the local government unit the imposition of business
tax against common carriers is to prevent a duplication of the
so-called "common carrier's tax."

Petitioner is already paying three (3%) percent common

carrier's tax on its gross sales/earnings under the National
Internal Revenue Code. To tax petitioner again on its gross
receipts in its transportation of petroleum business would defeat
the purpose of the Local Government Code.

 SPOUSES JESUS FERNANDO and ELIZABETH Immigration Officer, he was granted only a twelve (12)-day
FERNANDO NORTHWEST AIRLINES, INC. Petitioners – stay in the United States (US), instead of the usual six (6)
versus- NORTHWEST AIRLINES, INC., Respondent. months. Since Jesus Fernando was granted only a twelve (12)-
G.R. No. 212038 and G.R. No. 212043, February 8, 2017, day stay in the US, his scheduled plans with his family as well
SECOND DIVISION, PERALTA, J. as his business commitments were disrupted.

Passengers are entitled to be protected against personal Second, the departure from the Los Angeles Airport on January
misconduct, injurious language, indignities and abuses from 29, 2002.
the carrier’s employees. Any rude or discourteous conduct on
the part of employees towards a passenger gives the latter an When Jesus Fernando and his family reached the gate area
action for damages against the carrier. where boarding passes need to be presented, Northwest
supervisor Linda Tang stopped them and demanded for the
FACTS: presentation of their paper tickets (coupon type). They failed to
present the same since, according to them, Northwest issued
There were two incidents in this case. electronic tickets (attached to the boarding passes) which they
showed to the supervisor. In the presence of the other
First, the arrival at Los Angeles Airport on December 20, 2001. passengers, Linda Tang rudely pulled them out of the queue.
Elizabeth Fernando explained to Linda Tang that the matter
Jesus Fernando was asked by the Immigration Officer to have
could be sorted out by simply verifying their electronic tickets
his return ticket verified and validated since the date reflected
in her computer and all she had to do was click and punch in
thereon is August 2001. So he approached a Linda
their Elite Platinum World Perks Card number. But Linda Tang
Puntawongdaycha, a Northwest personnel but the latter merely
arrogantly told them that if they wanted to board the plane, they
glanced at his ticket without checking its status with the
should produce their credit cards and pay for their new tickets,
computer and peremptorily said that the ticket has been used
otherwise Northwest would order their luggage off-loaded from
and could not be considered as valid. He gave Linda the
the plane. Exasperated and pressed for time, the Fernandos
number of his Elite Platinum World Perks Card for the latter to
rushed to the Northwest Airline Ticket counter to clarify the
access the ticket control record with the airline's computer for
matter. To ensure that the Fernandos would no longer encounter
her to see that the ticket is still valid. But Linda refused to
any problem with Linda Tang, Jeanne Meyer printed coupon
check the validity of the ticket in the computer. As a result, the
tickets for them who were then advised to rush back to the
Immigration Officer brought Jesus Fernando to the
boarding gates since the plane was about to depart. But when
interrogation room of the INS where he was interrogated for
more than two (2) hours. When he was finally cleared by the

 the Fernandos reached the boarding gate, the plane had already tickets in the presence of the other passengers, Northwest
departed. They were able to depart, instead, the day after. personnel Linda Tang pulled the Fernandos out of the queue
and asked for paper tickets (coupon type). Even the matter
ISSUE: could be sorted out by simply verifying their electronic tickets
in her computer and all she had to do was click and punch in
Whether or not there was breach of contract of carriage and their Elite Platinum World Perks Card number, Tang refused to
whether it was done in a wanton, malevolent or reckless do so; she, instead, told them to pay for new tickets so they
manner amounting to bad faith. (YES) could board the plane.
RULING: Passengers do not contract merely for transportation. They have
a right to be treated by the carrier's employees with kindness,
Northwest committed a breach of contract "in failing to provide
respect, courtesy and due consideration. They are entitled to be
the spouses with the proper assistance to avoid any
protected against personal misconduct, injurious language,
inconvenience" and that the actuations of Northwest in both
indignities and abuses from such employees. So it is, that any
subject incidents "fall short of the utmost diligence of a very
rude or discourteous conduct on the part of employees towards
cautious person expected of it." Considering that the Fernandos
a passenger gives the latter an action for damages against the
are not just ordinary passengers but, in fact, frequent flyers of
carrier.
Northwest, the latter should have been more courteous and
accommodating to their needs so that the delay and Hence, moral damages and attorney's fees amounting to
inconveniences they suffered could have been avoided. 3,000,000 and ten percent (10%) of the damages are awarded,
Northwest was remiss in its duty to provide the proper and respectively. Exemplary damages in the amount of 2,000,000 is
adequate assistance to them. also awarded.
Further, the actuations of Northwest personnel in both subject
incidents are constitutive of bad faith. In ignoring Jesus
Fernando's pleas to check the validity of the tickets in the
computer, the Northwest personnel exhibited an indifferent
attitude without due regard for the inconvenience and anxiety
Jesus Fernando might have experienced. As to the second
incident, there was likewise fraud or bad faith on the part of
Northwest when it did not allow the Fernandos to board their
flight for Manila on scheduled date, in spite of confirmed

 VLASONS SHIPPING, INC vs. CA and NATIONAL STEEL

CORPORATION In its answer, defendant denied liability for the alleged damage
[G.R. No. 112350. December 12, 1997] claiming that the MV ‘VLASONS I’ was seaworthy in all
respects for the carriage of plaintiff’s cargo; that said vessel
NATIONAL STEEL CORPORATION vs. CA and VLASONS was not a ‘common carrier’ inasmuch as she was under voyage
SHIPPING, INC. charter contract with the plaintiff as charterer under the charter
[G.R. No. 112287. December 12, 1997] party.

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

FACTS: on appeal.

National Steel Corporation (NSC) as Charterer and defendant ISSUE:

Vlasons Shipping, Inc. (VSI) as Owner, entered into a Contract
of Voyage Charter Hire (Affreightment) whereby NSC hired Whether or not Vlazons is a private carrier.
VSI’s vessel, the MV ‘VLASONS I’ to make one (1) voyage to
load steel products at Iligan City and discharge them at North HELD:
Harbor, Manila. VSI carried passengers or goods only for those
it chose under a “special contract of charter party.” Yes.

The vessel arrived with the cargo in Manila, but when the At the outset, it is essential to establish whether VSI contracted
vessel’s three (3) hatches containing the shipment were opened, with NSC as a common carrier or as a private carrier. The
nearly all the skids of tin plates and hot rolled sheets were resolution of this preliminary question determines the law,
allegedly found to be wet and rusty. standard of diligence and burden of proof applicable to the
present case.
NSC filed its complaint against defendant before the CFI
wherein it claimed that it sustained losses as a result of the “act, Article 1732 of the Civil Code defines a common carrier as
neglect and default of the master and crew in the management “persons, corporations, firms or associations engaged in the
of the vessel as well as the want of due diligence on the part of business of carrying or transporting passengers or goods or
the defendant to make the vessel seaworthy … -- all in violation both, by land, water, or air, for compensation, offering their
of defendant’s undertaking under their Contract of Voyage services to the public.” It has been held that the true test of a
Charter Hire.” common carrier is the carriage of passengers or goods,

provided it has space, for all who opt to avail themselves of its carrier. Consequently, the public policy embodied therein is not
transportation service for a fee. A carrier which does not qualify contravened by stipulations in a charter party that lessen or
under the above test is deemed a private carrier. “Generally, remove the protection given by law in contracts involving
private carriage is undertaken by special agreement and the common carriers.”
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

 Loadstar Shipping Co., Inc. v. Court of Appeals Whether or not M/V Cherokee was a private carrier so as to
G.R. No. 131621, 28 September 1999, 315 SCRA 339 exempt it from the provisions covering Common Carrier?

FACTS: HELD:

On November 19, 1984, loadstar received on board its M/V Loadstar is a common carrier.
“Cherokee” bales of lawanit hardwood, tilewood and Apitong
Bolidenized for shipment, of which the goods were insured for The Court held that LOADSTAR is a common carrier. It is not
the with the Manila Insurance Company against various risks necessary that the carrier be issued a certificate of public
including “Total Loss by Total Loss of the Vessel”. The vessel convenience, and this public character is not altered by the fact
sank off at Limasawa Island along with its cargo. As a result of that the carriage of the goods in question was periodic,
the total loss of its shipment, the consignee made a claim with occasional, episodic or unscheduled. Further, the bare fact that
loadstar which, however, ignored the same. As the insurer, MIC the vessel was carrying a particular type of cargo for one
paid to the insured in full settlement of its claim, and the latter shipper, which appears to be purely co-incidental; it is no
executed a subrogation receipt therefor. MIC thereafter filed a reason enough to convert the vessel from a common to a private
complaint against loadstar alleging that the sinking of the vessel carrier, especially where, as in this case, it was shown that the
was due to fault and negligence of loadstar and its employees. vessel was also carrying passengers.
In its answer, Loadstar denied any liability for the loss of the Article 1732 also carefully avoids making any distinction
shipper’s goods and claimed that the sinking of its vessel was between a person or enterprise offering transportation service
due to force majeure. The court a quo rendered judgment in on a regular or scheduled basis and one offering such service on
favor of MIC, prompting loadstar to elevate the matter to the an occasional, episodic or unscheduled basis. Neither does
Court of Appeals, which however, agreed with the trial court Article 1732 distinguish between a carrier offering its services
and affirmed its decision in toto. On appeal, loadstar to the “general public,” i.e., the general community or
maintained that the vessel was a private carrier because it was population, and one who offers services or solicits business
not issued a Certificate of Public Convenience, it did not have a only from a narrow segment of the general population.
regular trip or schedule nor a fixed route, and there was only
“one shipper, one consignee for a special cargo”.

ISSUE:

 nasa una nadigest na

FIRST PHILIPPINE INDUSTRIAL CORPORATION, On January 20, 1994, petitioner filed a letter-protest addressed
Petitioner, -versus- COURT OF APPEALS, HONORABLE to the respondent City Treasurer claiming that it is exempt from
PATERNO V. TAC-AN, BATANGAS CITY and said tax because if is a transportation contractor.
ADORACION C. ARELLANO, in her official capacity as
City Treasurer of Batangas, Respondents Respondent City Treasurer denied the protest contending that
G.R. No. 125948, SECOND DIVISION, December 29, 1998, petitioner cannot be considered engaged in transportation
MARTINEZ, J. business, thus it cannot claim exemption under Section 133 (j)
of the Local Government Code
As correctly pointed out by petitioner, the definition of
"common carriers" in the Civil Code makes no distinction as to Petitioner filed with the Regional Trial Court of Batangas City
the means of transporting, as long as it is by land, water or air. a complaint6 for tax refund with prayer for writ of preliminary
It does not provide that the transportation of the passengers or injunction against respondents City of Batangas and Adoracion
goods should be by motor vehicle. In fact, in the United States, Arellano in her capacity as City Treasurer. In its complaint,
oil pipe line operators are considered common carriers. petitioner alleged, inter alia, that: (1) the imposition and
collection of the business tax on its gross receipts violates
FACTS Section 133 of the Local Government Code; (2) the authority of
cities to impose and collect a tax on the gross receipts of
Petitioner is a grantee of a pipeline concession under Republic "contractors and independent contractors" under Sec. 141 (e)
Act No. 387, as amended, to contract, install and operate oil and 151 does not include the authority to collect such taxes on
pipelines. transportation contractors for, as defined under Sec. 131 (h), the
term "contractors" excludes transportation contractors; and, (3)
Sometime in January 1995, petitioner applied for a mayor's the City Treasurer illegally and erroneously imposed and
permit with the Office of the Mayor of Batangas City. However, collected the said tax, thus meriting the immediate refund of the
before the mayor's permit could be issued, the respondent City tax paid.
Treasurer required petitioner to pay a local tax based on its
gross receipts for the fiscal year 1993 pursuant to the Local ISSUE
Government Code. The respondent City Treasurer assessed a
business tax on the petitioner. In order not to hamper its Whether the petitioner is a common carrier (YES)
operations, petitioner paid the tax under protest.
RULING

 "Common carrier" may be defined, broadly, as one who holds clientele does not exclude it from the definition of a common
himself out to the public as engaged in the business of carrier.
transporting persons or property from place to place, for
compensation, offering his services to the public generally. Also, respondent's argument that the term "common carrier" as
used in Section 133 (j) of the Local Government Code refers
Art. 1732 of the Civil Code defines a "common carrier" as "any only to common carriers transporting goods and passengers
person, corporation, firm or association engaged in the business through moving vehicles or vessels either by land, sea or water,
of carrying or transporting passengers or goods or both, by is erroneous.
land, water, or air, for compensation, offering their services to
the public." As correctly pointed out by petitioner, the definition of
"common carriers" in the Civil Code makes no distinction as to
The test for determining whether a party is a common carrier of the means of transporting, as long as it is by land, water or air.
goods is: It does not provide that the transportation of the passengers or
1. He must be engaged in the business of carrying goods for goods should be by motor vehicle. In fact, in the United States,
others as a public employment, and must hold himself out as oil pipe line operators are considered common carriers.
ready to engage in the transportation of goods for person
generally as a business and not as a casual occupation; Under the Petroleum Act of the Philippines (Republic Act 387),
2. He must undertake to carry goods of the kind to which his petitioner is considered a "common carrier."
business is confined;
The Bureau of Internal Revenue likewise considers the
3. He must undertake to carry by the method by which his
petitioner a "common carrier." In BIR Ruling No. 069-83, it
business is conducted and over his established roads; and
declared:
4. The transportation must be for hire.
. . . since [petitioner] is a pipeline concessionaire that is
Based on the above definitions and requirements, there is no
engaged only in transporting petroleum products, it is
doubt that petitioner is a common carrier. It is engaged in the
considered a common carrier under Republic Act No. 387 . . . .
business of transporting or carrying goods, i.e. petroleum
Such being the case, it is not subject to withholding tax
products, for hire as a public employment. It undertakes to
prescribed by Revenue Regulations No. 13-78, as amended.
carry for all persons indifferently, that is, to all persons who
choose to employ its services, and transports the goods by land From the foregoing disquisition, there is no doubt that
and for compensation. The fact that petitioner has a limited
petitioner is a "common carrier" and, therefore, exempt from

the business tax as provided for in Section 133 (j), of the Local
Government Code.

It is clear that the legislative intent in excluding from the taxing

power of the local government unit the imposition of business
tax against common carriers is to prevent a duplication of the
so-called "common carrier's tax."

Petitioner is already paying three (3%) percent common

carrier's tax on its gross sales/earnings under the National
Internal Revenue Code. To tax petitioner again on its gross
receipts in its transportation of petroleum business would defeat
the purpose of the Local Government Code.

 National Steel Corp. v. Court of Appeals refused and failed to pay.

On appeal, and on 12 August 1993, the Court of Appeals
G.R. No. 112287, 12 December 1997, 283 SCRA 45 modified the decision of the trial court by reducing the
demurrage from P88,000.00 to P44,000.00 and deleting the
FACTS: award of attorneys fees and expenses of litigation. NSC and
VSI filed separate motions for reconsideration. The CA denied
both motions. NSC and VSI filed their respective petitions for
The MV Vlasons I is a vessel which renders tramping service
review before the Supreme Court.
and, as such, does not transport cargo or shipment for the
general public. Its services are available only to specific
persons who enter into a special contract of charter party with ISSUE:
its owner. The ship is a private carrier, and it is in this capacity
that its owner, Vlasons Shipping, Inc. (VSA), entered into a Whether or not VSI contracted with NSC as a common carrier
contract of affreightment or contract of voyage charter hire with or a private carrier.
National Steel Corporation (NSC) on 17 July 1974, whereby
NSC hired VSI’s vessel, the MV ‘VLASONS I’ to make 1
RULING:
voyage to load steel products at Iligan City and discharge them
at North Harbor, Manila
Article 1732 of the Civil Code defines a common carrier as
“persons, corporations, firms or associations engaged in the
The shipment was placed in the 3 hatches of the ship which
business of carrying or transporting passengers or goods or
arrived with the cargo at Pier 12, North Harbor, Manila, on 12
both, by land, water, or air, for compensation, offering their
August 1974. The following day, when the vessel’s 3 hatches
services to the public.” It has been held that the true test of a
containing the shipment were opened by NSC’s agents, nearly
common carrier is the carriage of passengers or goods,
all the skids of tinplates and hot rolled sheets were allegedly
provided it has space, for all who opt to avail themselves of its
found to be wet and rusty. The cargo was discharged and
transportation service for a fee.
unloaded by stevedores hired by the Charterer.

A carrier which does not qualify under the test of a common

On 6 September 1974 NSC filed with VSI its claim for
carrier is deemed a private carrier. “Generally, private carriage
damages suffered due to the downgrading of the damaged
is undertaken by special agreement and the carrier does not
tinplates in the amount of P941,145.18. Then on 3 October
hold himself out to carry goods for the general public. The most
1974, NSC formally demanded payment of said claim but VSI

 typical, although not the only form of private carriage, is the NANYOZAI Charter Party, which was incorporated in the
charter party, a maritime contract by which the charterer, a parties’ contract of transportation further provided that the
party other than the shipowner, obtains the use and service of shipowner shall not be liable for loss of or damage to the cargo
all or some part of a ship for a period of time or a voyage or arising or resulting from unseaworthiness, unless the same was
voyages.”Herein, VSI did not offer its services to the general caused by its lack of due diligence to make the vessel
public. It carried passengers or goods only for those it chose seaworthy or to ensure that the same was “properly manned,
under a “special contract of charter party.” The MV Vlasons I equipped and supplied,” and to “make the holds and all other
“was not a common but a private carrier.” Consequently, the parts of the vessel in which cargo was carried, fit and safe for
rights and obligations of VSI and NSC, including their its reception, carriage and preservation.” The NANYOZAI
respective liability for damage to the cargo, are determined Charter Party also provided that “owners shall not be
primarily by stipulations in their contract of private carriage or responsible for split, chafing and/or any damage unless caused
charter party. by the negligence or default of the master or crew.”
Herein, NSC must prove that the damage to its shipment was
In Valenzuela Hardwood and Industrial Supply, Inc., vs. Court caused by VSI’s willful negligence or failure to exercise due
of Appeals and Seven Brothers Shipping Corporation, the Court diligence in making MV Vlasons I seaworthy and fit for
ruled that “in a contract of private carriage, the parties may holding, carrying and safekeeping the cargo. Ineluctably, the
freely stipulate their duties and obligations which perforce burden of proof was placed on NSC by the parties’ agreement.
would be binding on them. Unlike in a contract involving a Article 361 of the Code of Commerce provides that
common carrier, private carriage does not involve the general “Merchandise shall be transported at the risk and venture of the
public. Hence, the stringent provisions of the Civil Code on shipper, if the contrary has not been expressly stipulated.
common carriers protecting the general public cannot Therefore, the damage and impairment suffered by the goods
justifiably be applied to a ship transporting commercial goods during the transportation, due to fortuitous event, force
as a private carrier. Consequently, the public policy embodied majeure, or the nature and inherent defect of the things, shall be
therein is not contravened by stipulations in a charter party that for the account and risk of the shipper. The burden of proof of
lessen or remove the protection given by law in contracts these accidents is on the carrier.”
involving common carriers.”
Article 362 of the Code of Commerce provides that “The
From the parties’ Contract of Voyage Charter Hire, dated 17 carrier, however, shall be liable for damages arising from the
July 1974, VSI “shall not be responsible for losses except on cause mentioned in the preceding article if proofs against him
proven willful negligence of the officers of the vessel.” The show that they occurred on account of his negligence or his





omission to take the precautions usually adopted by careful
persons, unless the shipper committed fraud in the bill of
lading, making him to believe that the goods were of a class or
quality different from what they really were.”

As the MV Vlasons I was a private carrier, the shipowner’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.

The Supreme Court denied the consolidated petitions; and

affirmed the questioned Decision of the Court of Appeals with
the modification that the demurrage awarded to VSI is deleted.
No pronouncement as to costs.

 BASCOS vs. COURT OF APPEALS and RODOLFO A. to load the cargo from Manila Port Area to Laguna and that the
CIPRIANO truck carrying the cargo was hijacked and being a force
majeure, exculpated petitioner from any liability

G.R. No. 101089

After trial, the trial court rendered a decision in favor of
Cipriano and against Bascos ordering the latter to pay the
April 7, 1993 former for actual damages for attorney’s fees and cost of suit.

FACTS: Rodolfo A. Cipriano representing Cipriano Trading The “Urgent Motion To Dissolve/Lift preliminary Attachment”
Enterprise (CIPTRADE for short) entered into a hauling Bascos is DENIED for being moot and academic.
contract with Jibfair Shipping Agency Corp whereby the former
bound itself to haul the latter’s 2,000 m/tons of soya bean meal
to the warehouse in Calamba, Laguna. To carry out its Petitioner appealed to the Court of Appeals but respondent
obligation, CIPTRADE, through Cipriano, subcontracted with Court affirmed the trial court’s judgment.
Bascos to transport and to deliver 400 sacks of soya bean meal
from the Manila Port Area to Calamba, Laguna. Petitioner
failed to deliver the said cargo. As a consequence of that Hence this petition for review on certiorari
failure, Cipriano paid Jibfair Shipping Agency the amount of
the lost goods in accordance with their contract.
ISSUE:

Cipriano demanded reimbursement from petitioner but the

(1) WON petitioner a common carrier
latter refused to pay. Eventually, Cipriano filed a complaint for
a sum of money and damages with writ of preliminary
attachment for breach of a contract of carriage. The trial court (2) WON the hijacking referred to a force majeure
granted the writ of preliminary attachment.

HELD: The petition is DISMISSED and the decision of the

In her answer, petitioner interposed the defense that there was Court of Appeals is hereby AFFIRMED.
no contract of carriage since CIPTRADE leased her cargo truck

 1. YES But petitioner argues that there was only a contract of lease
because they offer their services only to a select group of
people. Regarding the first contention, the holding of the Court
In disputing the conclusion of the trial and appellate courts that in De Guzman vs. Court of Appeals 14 is instructive. In
petitioner was a common carrier, she alleged in this petition that referring to Article 1732 of the Civil Code, it held thus:
the contract between her and Cipriano was lease of the truck.
She also stated that: she was not catering to the general public.
Thus, in her answer to the amended complaint, she said that she “The above article makes no distinction between one whose
does business under the same style of A.M. Bascos Trucking, principal business activity is the carrying of persons or goods or
offering her trucks for lease to those who have cargo to move, both, and one who does such carrying only as an ancillary
not to the general public but to a few customers only in view of activity (in local idiom, as a “sideline”). Article 1732 also
the fact that it is only a small business. 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,
We agree with the respondent Court in its finding that petitioner episodic or unscheduled basis. Neither does Article 1732
is a common carrier. 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
Article 1732 of the Civil Code defines a common carrier as “(a) segment of the general population. We think that Article 1732
person, corporation or firm, or association engaged in the deliberately refrained from making such distinctions.”
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 to determine a common carrier 2. NO
is “whether the given undertaking is a part of the business
engaged in by the carrier which he has held out to the general
public as his occupation rather than the quantity or extent of the Likewise, We affirm the holding of the respondent court that
business transacted.” 12 In this case, petitioner herself has the loss of the goods was not due to force majeure.
made the admission that she was in the trucking business,
offering her trucks to those with cargo to move. Judicial
admissions are conclusive and no evidence is required to prove Common carriers are obliged to observe extraordinary diligence
the same. 13 in the vigilance over the goods transported by them.
Accordingly, they are presumed to have been at fault or to have

 acted negligently if the goods are lost, destroyed or 1. She cited as evidence certain affidavits which referred to the
deteriorated. There are very few instances when the contract as “lease”. These affidavits were made by Jesus Bascos
presumption of negligence does not attach and these instances and by petitioner herself and Cipriano and CIPTRADE did not
are enumerated in Article 1734. 19 In those cases where the object to the presentation of affidavits by petitioner where the
presumption is applied, the common carrier must prove that it transaction was referred to as a lease contract. Both the trial and
exercised extraordinary diligence in order to overcome the appellate courts have dismissed them as self-serving and
presumption. petitioner contests the conclusion. We are bound by the
appellate court’s factual conclusions. Yet, granting that the said
evidence were not self-serving, the same were not sufficient to
In this case, petitioner alleged that hijacking constituted force prove that the contract was one of lease. It must be understood
majeure which exculpated her from liability for the loss of the that a contract is what the law defines it to be and not what it is
cargo. In De Guzman vs. Court of Appeals, the Court held that called by the contracting parties. Furthermore, petitioner
hijacking, not being included in the provisions of Article 1734, presented no other proof of the existence of the contract of
must be dealt with under the provisions of Article 1735 and lease. He who alleges a fact has the burden of proving it.
thus, the common carrier is presumed to have been at fault or
negligent. To exculpate the carrier from liability arising from
hijacking, he must prove that the robbers or the hijackers acted 2. Having affirmed the findings of the respondent Court on the
with grave or irresistible threat, violence, or force. This is in substantial issues involved, We find no reason to disturb the
accordance with Article 1745 of the Civil Code which provides: conclusion that the motion to lift/dissolve the writ of
preliminary attachment has been rendered moot and academic
by the decision on the merits.
“Art. 1745. Any of the following or similar stipulations shall be
considered unreasonable, unjust and contrary to public policy;
xx

(6) That the common carrier’s liability for acts committed by

thieves, or of robbers who do not act with grave or irresistible
threat, violences or force, is dispensed with or diminished;” xx

NOTES:

 Spouses Cruz vs. Sun Holidays, Inc. GR No. 186312 ISSUE

29 June 2010
Whether M/B Coco Beach III breached a contract of carriage
FACTS
HELD
Spouses Cruz files a complaint for damages against Sun
Holidays arising from the death of their son who perished with Respondent is a common carrier. Its ferry services are so
his wife on board the boat M/B Coco Beach III that capsized en intertwined with its business as to be properly considered
route Batangas from Puerto Galera where the couple had stayed ancillary thereto. The constancy of respondent’s ferry services
at Coco Beach Island Resort owned and operated by in its resort operations is underscored by its having its own
respondent. Their stay was by virtue of a tour package-contract Coco Beach boats. And the tour packages it offers, which
with respondent that included transportation to and from the include the ferry services, may be availed of by anyone who
Resort and the point of departure in Batangas. Eight of the can afford to pay the same. These services are thus available to
passengers, including petitioners’ son and his wife, died during the public.
the accident. Sun denied any responsibility for the incident
In the De Guzman case, Article 1732 of the Civil Code defining
which it considered to be a fortuitous event. Petitioners allege
“common carriers” has deliberately refrained from making
that as a common carrier, Sun was negligent in allowing the
distinctions on whether the carrying of persons or goods is the
boat to sail despite the storm warning bulletins issued by
carrier’s principal business, whether it is offered on a regular
PAGASA. Respondent denied being a common carrier, alleging
basis, or whether it is offered to the general public.
that its boats are not available to the public but are only used as
ferry resort carrier. It also claimed to have exercised the utmost Under the Civil Code, common carriers, from the nature of
diligence in ensuring the safety of its passengers, and that their business and for reasons of public policy, are bound to
contrary to petitioners’ allegation, there was no storm as the observe extraordinary diligence for the safety of the passengers
Coast Guard in fact cleared the voyage. M/B Coco Beach III transported by them, according to all the circumstances of each
was not filled to capacity and had sufficient life jackets for its case. They are bound to carry the passengers safely as far as
passengers. human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all the
RTC dismissed the complaint. CA denied the appeal holding
circumstances.
that Sun is a private carrier which is only required to observe
ordinary diligence and that the proximate cause of the incident
When a passenger dies or is injured in the discharge of a
was a fortuitous event. contract of carriage, it is presumed that the common carrier is at

 fault or negligent. In fact, there is even no need for the court to

make an express finding of fault or negligence on the part of
the common carrier. This statutory presumption may only be
overcome by evidence that the carrier exercised extraordinary
diligence.

 A.F. SANCHEZ BROKERAGE INC., Petitioner, -versus consignee, Wyeth-Suaco Laboratories, Inc. Wyeth-Suaco
THE HON. COURT OF APPEALS and FGU INSURANCE insured the shipment against all risks with FGU Insurance.
CORPORATION, Respondents.
G.R. No. 147079, THIRD DIVISION, December 21, 2004, Upon arrival of the shipment, it was discharged "without
CARPIO MORALES, J. exception" and delivered to the warehouse of the Philippine
Skylanders, Inc. (PSI) located also at the NAIA for
Article 1732 does not distinguish between one whose principal safekeeping.
business activity is the carrying of goods and one who does
such carrying only as an ancillary activity. The contention, In order to secure the release of the cargoes, Wyeth-Suaco
therefore, of engaged the services of Sanchez Brokerage.

petitioner that it is not a common carrier but a customs broker Wyeth-Suaco being a regular importer, the customs examiner
whose principal function is to prepare the correct customs did not inspect the cargoes which were thereupon stripped from
declaration and proper shipping documents as required by law the aluminum containers and loaded inside two transport
is bereft of merit. It suffices that petitioner undertakes to deliver vehicles hired by Sanchez Brokerage.
the goods for pecuniary consideration.
Upon instructions of Wyeth-Suaco, the cargoes were delivered
In this light, petitioner as a common carrier is mandated to to Hizon Laboratories Inc. in Antipolo City for quality control
observe, under Article 1733 of the Civil Code, extraordinary check. Upon inspection, it was discovered that 44 cartons
diligence in the vigilance over the goods it transports containing Femenal and Nordiol tablets were in bad order. The
according to all the circumstances of each case. In the event remaining 160 cartons of oral contraceptives were accepted as
that the goods are lost, destroyed or deteriorated, it is complete and in good order.
presumed to have been at fault or to have acted negligently,
Wyeth-Suaco later demanded, by letter from Sanchez
unless it proves that it observed extraordinary diligence.
Brokerage the payment of P191,384.25 representing the value
FACTS of its loss arising from the damaged tablets. As the Sanchez
Brokerage refused to heed the demand, Wyeth-Suaco filed an
On July 8, 1992, Wyeth-Pharma GMBH shipped on board an insurance claim against FGU Insurance which paid Wyeth-
aircraft of KLM Royal Dutch Airlines at Dusseldorf, Germany Suaco the amount of P181,431.49 in settlement of its claim.
oral contraceptives consisting of 86,800 Blisters Femenal Wyeth-Suaco thus issued Subrogation Receipt30 in favor of
tablets, 14,000 Blisters Nordiol tablets and 42,000 Blisters FGU Insurance.
Trinordiol tablets for delivery to Manila in favor of the

􏰅
 On demand by FGU Insurance for payment of the amount of Anacleto F. Sanchez, Jr., the Manager and Principal Broker of
P181,431.49 it paid Wyeth-Suaco, Sanchez Brokerage, by letter Sanchez Brokerage himself testified that the services the firm
of January 7, 1993, disclaimed liability for the damaged goods, offers include the delivery of goods to the warehouse of the
positing that the damage was due to improper and insufficient consignee or importer, stating:
export packaging; that when the sealed containers were opened
outside the PSI warehouse. “As customs broker, we calculate the taxes that has to be paid
in cargos, and those upon approval of the importer, we prepare
Hence, FGU Insurance of a complaint for damages before the the entry together for processing and claims from customs and
Regional Trial Court of Makati City against the Sanchez finally deliver the goods to the warehouse of the importer.
Brokerage. The trial court dismissed the complaint. On appeal,
the appellate court reversed the decision of the trial court, it Article 1732 does not distinguish between one whose principal
holding that the Sanchez Brokerage engaged not only in the business activity is the carrying of goods and one who does
business of customs brokerage but also in the transportation and such carrying only as an ancillary activity. The contention,
delivery of the cargo of its clients, hence, a common carrier therefore, of petitioner that it is not a common carrier but a
within the context of Article 1732 of the New Civil Code. customs broker whose principal function is to prepare the
correct customs declaration and proper shipping documents as
ISSUE required by law is bereft of merit. It suffices that petitioner
undertakes to deliver the goods for pecuniary consideration.
Whether petitioner is a "common carrier" within the context of
Article 1732 of the New Civil Code. (YES) In this light, petitioner as a common carrier is mandated to
observe, under Article 1733 of the Civil Code, extraordinary
RULING diligence in the vigilance over the goods it transports according
to all the circumstances of each case. In the event that the goods
The appellate court did not err in finding petitioner, a customs
are lost, destroyed or deteriorated, it is presumed to have been
broker, to be also a common carrier, as defined under Article
at fault or to have acted negligently, unless it proves that it
1732 of the Civil Code, to wit:
observed extraordinary diligence.
Art. 1732. Common carriers are persons, corporations, firms or
The concept of "extra-ordinary diligence" was explained in
associations engaged in the business of carrying or transporting
Compania Maritima v. Court of Appeals:
passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public. The extraordinary diligence in the vigilance over the goods
tendered for shipment requires the common carrier to know and

to follow the required precaution for avoiding damage to, or without protest or exception notwithstanding such condition, he
destruction of the goods entrusted to it for sale, carriage and is not relieved of liability for the resulting damage.
delivery. It requires common carriers to render service with the
greatest skill and foresight and "to use all reasonable means to Since petitioner received all the cargoes in good order and
ascertain the nature and characteristics of goods tendered for condition at the time they were turned over by the PSI
shipment, and to exercise due care in the handling and stowage, warehouseman, and upon their delivery to Hizon Laboratories,
including such methods as their nature requires." Inc. a portion thereof was found to be in bad order, it was
incumbent on petitioner to prove that it exercised extraordinary
In the case at bar, it was established that petitioner received the diligence in the carriage of the goods. It did not, however.
cargoes from the PSI warehouse in NAIA in good order and Hence, its presumed negligence under Article 1735 of the Civil
condition; and that upon delivery by petitioner to Hizon Code remains unrebutted.
Laboratories Inc., some of the cargoes were found to be in bad
order, as noted in the Delivery Receipt issued by petitioner, and
as indicated in the Survey Report of Elite Surveyors and the
Destruction Report of Hizon Laboratories, Inc.

In an attempt to free itself from responsibility for the damage to

the goods, petitioner posits that they were damaged due to the
fault or negligence of the shipper for failing to properly pack
them and to the inherent characteristics of the goods; and that it
should not be faulted for following the instructions of Calicdan
of Wyeth-Suaco to proceed with the delivery despite
information conveyed to the latter that some of the cartons, on
examination outside the PSI warehouse, were found to be wet.

While paragraph No. 4 of Article 1734 of the Civil Code

exempts a common carrier from liability if the loss or damage
is due to the character of the goods or defects in the packing or
in the containers, the rule is that if the improper packing is
known to the carrier or his employees or is apparent upon
ordinary observation, but he nevertheless accepts the same

 Planters Products, Inc. v. CA Issues:

(1) Whether a common carrier becomes a private carrier by

Facts:
reason of a charter party
Planters Products, Inc. purchased from Mitsubishi International
(2) Whether the ship owner was able to prove the exercise of
Corporation 9,329.7069 metric tons of Urea 46% fertilizer,
the diligence required under the circumstances
which the latter shipped aboard the cargo vessel M/V Sun Plum
on June 16, 1974. Prior to its voyage, a time-charter party was
Held:
entered into between Mitsubishi as shipper, and Kyosei Kisen
Kabushiki Kaisha as shipowner. Before loading the fertilizer
(1) A "charter-party" is defined as a contract by which an entire
aboard the vessel, four of her holds were presumably inspected
ship, or some principal part thereof, is let by the owner to
by the charterer’s representative and found it fit to take the
another person for a specified time or use; Charter parties are of
load. After loading the cargo, the steel hatches were closed with
two types: (a) contract of affreightment which involves the use
heavy iron lids, covered with 3 layers of tarpaulin then tied
of shipping space on vessels leased by the owner in part or as a
with steel bonds. It remained sealed throughout the entire
whole, to carry goods for others; and, (b) charter by demise or
voyage.
bareboat charter, by the terms of which the whole vessel is let
to the charterer with a transfer to him of its entire command and
Upon arrival of the vessel, petitioner unloaded the cargo, which
possession and consequent control over its navigation,
took 11 days. A private marine and cargo surveyor, Cargo
including the master and the crew, who are his servants.
Superintendents Company, Inc. (CSCI) was hired by petitioner
Contract of affreightment may either be time charter, wherein
to determine the outturn of the cargo shipped. CSCI reported
the vessel is leased to the charterer for a fixed period of time, or
shortage of 106.726 metric tons, and contamination of 18
voyage charter, wherein the ship is leased for a single voyage.
metric tons due to dirt. PPI sent a claim letter against Soriamont
Steamship Agencies, the resident agent of KKKK. The request
Upon the other hand, the term "common or public carrier" is
was denied, hence, PPI filed an action for damages before the
defined in Art. 1732 of the Civil Code. The definition extends
CFI Manila. The lower court sustained the petitioner’s claim,
to carriers either by land, air or water which hold themselves
but such decision was reversed by the appellate court, which
out as ready to engage in carrying goods or transporting
absolved the carrier from liability. The appellate court ruled that
passengers or both for compensation as a public employment
the vessel was a private carrier and not a common carrier by
and not as a casual occupation. The distinction between a
reason of the charter party.
"common or public carrier" and a "private or special carrier"

lies in the character of the business, such that if the undertaking carrier becomes private, at least insofar as the particular voyage
is a single transaction, not a part of the general business or covering the charter-party is concerned.
occupation, although involving the carriage of goods for a fee,
the person or corporation offering such service is a private (2) In an action for recovery of damages against a common
carrier. Article 1733 of the New Civil Code mandates that carrier on the goods shipped, the shipper or consignee should
common carriers, by reason of the nature of their business, first prove the fact of shipment and its consequent loss or
should observe extraordinary diligence in the vigilance over the damage while the same was in the possession, actual or
goods they carry. In the case of private carriers, however, the constructive, of the carrier. Thereafter, the burden of proof
exercise of ordinary diligence in the carriage of goods will shifts to respondent to prove that he has exercised extraordinary
suffice. Moreover, in case of loss, destruction or deterioration diligence required by law or that the loss, damage or
of the goods, common carriers are presumed to have been at deterioration of the cargo was due to fortuitous event, or some
fault or to have acted negligently, and the burden of proving other circumstances inconsistent with its liability. To our mind,
otherwise rests on them. On the contrary, no such presumption respondent carrier has sufficiently overcome, by clear and
applies to private carriers, for whosoever alleges damage to or convincing proof, the prima facie presumption of negligence.
deterioration of the goods carried has the onus of proving that
the cause was the negligence of the carrier. Before the fertilizer was loaded, the four (4) hatches of the
vessel were cleaned, dried and fumigated. After completing the
When petitioner chartered the vessel M/V "Sun Plum", the ship loading of the cargo in bulk in the ship's holds, the steel
captain, its officers and compliment were under the employ of pontoon hatches were closed and sealed with iron lids, then
the shipowner and therefore continued to be under its direct covered with three (3) layers of serviceable tarpaulins which
supervision and control. Hardly then can we charge the were tied with steel bonds. The hatches remained close and
charterer, a stranger to the crew and to the ship, with the duty of tightly sealed while the ship was in transit as the weight of the
caring for his cargo when the charterer did not have any control steel covers made it impossible for a person to open without the
of the means in doing so. This is evident in the present case use of the ship's boom. It was also shown during the trial that
considering that the steering of the ship, the manning of the the hull of the vessel was in good condition, foreclosing the
decks, the determination of the course of the voyage and other possibility of spillage of the cargo into the sea or seepage of
technical incidents of maritime navigation were all consigned water inside the hull of the vessel. When M/V "Sun Plum"
to the officers and crew who were screened, chosen and hired docked at its berthing place, representatives of the consignee
by the shipowner. It is only when the charter includes both the boarded, and in the presence of a representative of the
vessel and its crew, as in a bareboat or demise that a common shipowner, the foreman, the stevedores, and a cargo surveyor
representing CSCI, opened the hatches and inspected the

condition of the hull of the vessel. The stevedores unloaded the Bulk shipment of highly soluble goods like fertilizer carries
cargo under the watchful eyes of the shipmates who were with it the risk of loss or damage, more so, with a variable
overseeing the whole operation on rotation basis. weather condition prevalent during its unloading, as was the
case at bar. This is a risk the shipper or the owner of the goods
The period during which private respondent was to observe the has to face. Clearly, respondent carrier has sufficiently proved
degree of diligence required of it as a public carrier began from the inherent character of the goods which makes it highly
the time the cargo was unconditionally placed in its charge after vulnerable to deterioration; as well as the inadequacy of its
the vessel's holds were duly inspected and passed scrutiny by packaging which further contributed to the loss. On the other
the shipper, up to and until the vessel reached its destination hand, no proof was adduced by the petitioner showing that the
and its hull was re-examined by the consignee, but prior to carrier was remiss in the exercise of due diligence in order to
unloading. A shipowner is liable for damage to the cargo minimize the loss or damage to the goods it carried.
resulting from improper stowage only when the stowing is done
by stevedores employed by him, and therefore under his control
and supervision, not when the same is done by the consignee or
stevedores under the employ of the latter.

Common carriers are not responsible for the loss, destruction or

deterioration of the goods if caused by the character of the
goods or defects in the packaging or in the containers. The
primary cause of these spillages is the clamped shell which
does not seal very tightly. Also, the wind tends to blow away
some of the materials during the unloading process. The
probability of the cargo being damaged or getting mixed or
contaminated with foreign particles was made greater by the
fact that the fertilizer was transported in "bulk," thereby
exposing it to the inimical effects of the elements and the grimy
condition of the various pieces of equipment used in
transporting and hauling it. If there was loss or contamination
of the cargo, it was more likely to have occurred while the same
was being transported from the ship to the dump trucks and
finally to the consignee's warehouse.

 SPOUSES TEODORO and NANETTE PERENA., about the time the van was to traverse the railroad crossing,
Petitioners, -versus SPOUSES TERESITA PHILIPPINE PNR Commuter No. 302 (train) was in the vicinity of the
NICOLAS and L. ZARATE, NATIONAL RAILWAYS, and Magallanes Interchange travelling northbound. The train hit the
the COURT OF APPEALS, Respondents. rear end of the van, and the impact threw nine of the 12
G.R. No. 157917, FIRST DIVISION, August 29, 2012, students in the rear, including Aaron, out of the van. Aaron
BERSAMIN, J. landed in the path of the train, which dragged his body and
severed his head, instantaneously killing him.
The true test for a common carrier is not the quantity or extent
of the business actually transacted, or the number and Devastated, the Zarates commenced an action for damages
character of the conveyances used in the activity, but whether against Alfaro, the Pereñas, PNR and Alano. The RTC ruled in
the undertaking is a part of the activity engaged in by the favor of the Zarates and held that the cooperative gross
carrier that he has held out to the general public as his negligence of the Pereñas and PNR had caused the collision
business or occupation. that led to the death of Aaron.

Despite catering to a limited clientèle, the Pereñas operated as Upon appeal, the Court of Appealspromulgated its decision,
a common carrier because they held themselves out as a ready affirming the findings of the RTC.
transportation indiscriminately to the students of a particular
school living within or near where they operated the service ISSUE
and for a fee.
Whether defendant spouses Pereña are liable for breach of the
FACTS contract of carriage with plaintiff- spouses in failing to provide
adequate and safe transportation for the latter's son. (YES)
The Pereñas were engaged in the business of transporting
students from their respective residences in Parañaque City to RULING
Don Bosco in Pasong Tamo, Makati City, and back. They
Although in this jurisdiction the operator of a school bus
employed Clemente Alfaro (Alfaro) as driver of the van.
service has been usually regarded as a private carrier, primarily
In June 1996, the Zarates contracted the Pereñas to transport because he only caters to some specific or privileged
Aaron to and from Don Bosco. Considering that the students individuals, and his operation is neither open to the indefinite
were due at Don Bosco by 7:15 a.m., and that they were already public nor for public use, the exact nature of the operation of a
running late because of the heavy vehicular traffic on the South school bus service has not been finally settled. This is the
Superhighway, Alfaro took the van to an alternate route. At occasion to lay the matter to rest.

A carrier is a person or corporation who undertakes to transport indefinite or unrestricted quality that gives it its public
or convey goods or persons from one place to another, character. In determining whether a use is public, we must look
gratuitously or for hire. The carrier is classified either as a not only to the character of the business to be done, but also to
private/special carrier or as a common/public carrier. A private the proposed mode of doing it. If the use is merely optional
carrier is one who, without making the activity a vocation, or with the owners, or the public benefit is merely incidental, it is
without holding himself or itself out to the public as ready to not a public use, authorizing the exercise of the jurisdiction of
act for all who may desire his or its services, undertakes, by the public utility commission. There must be, in general, a right
special agreement in a particular instance only, to transport which the law compels the owner to give to the general public.
goods or persons from one place to another either gratuitously It is not enough that the general prosperity of the public is
or for hire. The provisions on ordinary contracts of the Civil promoted. Public use is not synonymous with public interest.
Code govern the contract of private carriage. The diligence The true criterion by which to judge the character of the use is
required of a private carrier is only ordinary, that is, the whether the public may enjoy it by right or only by permission.
diligence of a good father of the family. In contrast, a common
carrier is a person, corporation, firm or association engaged in In De Guzman v. Court of Appeals, the Court noted that Article
the business of carrying or transporting passengers or goods or 1732 of the Civil Code avoided any distinction between a
both, by land, water, or air, for compensation, offering such person or an enterprise offering transportation on a regular or
an isolated basis; and has not distinguished a carrier offering his
services to the public. Contracts of common carriage are services to the general public, that is, the general community or
governed by the provisions on common carriers of the Civil population, from one offering his services only to a narrow
Code, the Public Service Act, and other special laws relating to segment of the general population.
transportation. A common carrier is required to observe
extraordinary diligence, and is presumed to be at fault or to Nonetheless, the concept of a common carrier embodied in
have acted negligently in case of the loss of the effects of Article 1732 of the Civil Code coincides neatly with the notion
passengers, or the death or injuries to passengers. of public service under the Public Service Act, which
supplements the law on common carriers found in the Civil
In relation to common carriers, the Court defined public use in Code. Public service, according to Section 13, paragraph (b) of
the following terms in United States v. Tan Piaco, viz: the Public Service Act, includes:

"Public use" is the same as "use by the public". The essential x x x every person that now or hereafter may own, operate,
feature of the public use is not confined to privileged manage, or control in the Philippines, for hire or compensation,
individuals, but is open to the indefinite public. It is this with general or limited clientèle, whether permanent or

 occasional, and done for the general business purposes, any by any secret intention or mental reservation it may entertain or
common carrier, railroad, street railway, traction railway, assert when charged with the duties and obligations that the law
subway motor vehicle, either for freight or passenger, or both, imposes.
with or without fixed route and whatever may be its
classification, freight or carrier service of any class, express Applying these considerations to the case before us, there is no
service, steamboat, or steamship line, pontines, ferries and question that the Pereñas as the operators of a school bus
water craft, engaged in the transportation of passengers or service were: (a) engaged in transporting passengers generally
freight or both, shipyard, marine repair shop, ice-refrigeration as a business, not just as a casual occupation; (b) undertaking to
plant, canal, irrigation system, gas, electric light, heat and carry passengers over established roads by the method by
power, water supply and power petroleum, sewerage system, which the business was conducted; and (c) transporting
wire or wireless communications systems, wire or wireless students for a fee. Despite catering to a limited clientèle, the
broadcasting stations and other similar public services. x x x. Pereñas operated as a common carrier because they held
themselves out as a ready transportation indiscriminately to the
Given the breadth of the aforequoted characterization of a students of a particular school living within or near where they
common carrier, the Court has considered as common carriers operated the service and for a fee.
pipeline operators, custom brokers and warehousemen, and
barge operators even if they had limited clientèle.

As all the foregoing indicate, 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. If the undertaking is a single
transaction, not a part of the general business or occupation
engaged in, as advertised and held out to the general public, the
individual or the entity rendering such service is a private, not a
common, carrier. The question must be determined by the
character of the business actually carried on by the carrier, not