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De Grano Notes
De Grano Notes

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Categories:Types, Business/Law
Published by: Carence Janelle Navidad on Jul 28, 2013
Copyright:Attribution Non-commercial


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 - Persons, corporations, firms or associations engaged in the business of carrying or transportingpassengers or goods or both, by land, water, or air, for compensation, offering their services to the public.
(Art. 1732, Civil Code)
.- One that holds itself out as ready to engage in the transportation of goods for hire as a publicemployment and not as a casual occupation.
(De Guzman vs. Court of Appeals, No. L-47822, December 22,1988)
Art. 1732 of the Civil Code avoids any distinction between one whose principal business is thecarrying of persons or goods or both, and one who does such carrying only as an ancillary activity(sideline).
It also avoids a distinction between a person or enterprise offering transportation service on aregular or scheduled basis and one offering such service on an occasional, episodic or unscheduledbasis.
Article 1732 does not distinguish between a carrier offering its services to the general public, that is the general community or population, and one who offers services or solicits business only froma narrow segment of the general population.
A person or entity is a common carrier even if he did not secure a Certificate of PublicConvenience
The Civil Code makes no distinction as to the means of transporting, as long as it is by land, wateror air.
The Civil Code does not provide that the transportation should be by motor vehicle.
A person or entity may be a common carrier even if he has no fixed publicly known route,maintains no terminals, and issues no tickets.
Undertakes to carry for all people indifferently and thus is liable for refusal without sufficient reason
(Lastimoso vs. Doliente, 3 SCRA , [1961]);
Cannot lawfully decline to accept a particular class of goods for carriage to the prejudice of thetraffic in these goods;
No monopoly is favored
(Batangas Trans. vs. Orlanes, 52 Phil. 455)
Provides public convenience.
It must be engaged in the business of carrying goods for others as a public employment and must hold itself out as ready to engage in the transportation of goods generally as a business and not as acasual occupation;
It must undertake to carry goods of the kind to which its business is confined;
It must undertake to carry by the method by which his business is conducted and over itsestablished roads; and
The transportation must be for hire.
(First Philippine Industrial Corp. v. CA, 300 SCRA 661, [1998)
Test whether a party is a common carrier 
Petitioner is a grantee of a pipeline concession under R.A. No. 387, as amended, a contract, installand operate oil pipelines. The original pipeline concession was granted in 1967 and renewed by theEnergy Regulatory Board in 1992.
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Sometime in January
1995, petitioner applied for a mayor’s permit with the Office of the Mayor of Batangas City. However, before the mayor’s permit could be i
ssued, the respondent City Treasurerrequired petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to theLocal Government Code. The respondent City Treasure assessed a business tax on the petitioneramounting to P956,076.04 payable in four installments based on the gross receipts for products pumpedat GPS-1 for the fiscal year 1993 which amounted to P181,681,151.00. in order not to hamper itsoperations, petitioner paid the tax under protest in the amount of P239, 019.01 for the first quarter of 1993.On June 15, 1994, petitioner filed with the RTC of Batangas City a complaint for tax refund withprayer for writ of preliminary injunction against respondents City of Batangas and Adoracion Arellano inher capacity as City Treasurer. In its complaint, petitioner alleged, inter alia, that: (1) the imposition andcollection of the business tax on its gross receipts violates Sec. 133 of the Local Government Code; (2) theauthority of cities to impose and collect a tax on
the gross receipts of “contractors and independent contractors” under Sec. 141(e) and 151 does not include the authority to collect such taxes ontransportation contractors for, as defined under Sec. 131(h), the term “contractors” excludes
transportation contactors; and (3) the City Treasurer illegally and erroneously imposed and collected thesaid tax, thus meriting the immediate refund of the tax paid.Traversing the complaint, the respondents argued that petitioner cannot be exempt from taxesunder Sec. 133
(J) of the Local Government Code as said exemption applied only to “transportation
contractors and persons engaged in the transportation by hire and common carriers by air land and
water.” Respondents assert that pipelines are not included in the term “common carrier” which refers
solely to ordinary carriers as trucks, trains, ships and the like. Respondents further posit that the term
“common carrier” under the said Code pertains to the mode or manner by which a product is delivered to
its destination.
Whether or not the petitioner is a common carrier so that in the affirmative, he is not liable to paythe carriers tax under the Local Government Code of 1991?
Petitioner is a common carrier.
A “common carrier” may be defined, broadly
, as one who holds himself out to the public asengaged in the business of transporting persons or property from place to place, for compensation,offering his services to the public generally.
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 carrying of goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods or persons generally as a business and not as acasual 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 establishedroads; and4. The transportation must be for hire.
D. Cases:1. DE GUZMAN VS. COURT OF APPEALS (168 SCRA 612)Facts:
Cendena was a junk dealer and was engaged in buying used bottles and scrap materials inPangasinan and brought these to Manila for resale. He used two 6-wheeler trucks. On the return trip toPangasinan, he would load his vehicles with cargo which various merchants wanted delivered toPangasinan. For that service, he charged freight lower than regular rates. General Milk Co. contacted withhim for the hauling of 750 cartons of milk. On the way to Pangasinan, one of the trucks was hijacked byarmed men who took with them the truck and its cargo and kidnapped the driver and his helper. Only150 cartons of milk were delivered. The Milk Co. sued to claim the value of the lost merchandise based onan alleged contract of carriage. Cendena denied that he was a common carrier and contended that hecould not be liable for the loss it was due to force majeure. The trial court ruled that he was a commoncarrier. The CA reversed.
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Whether or not Cendena is a common carrier?
Yes, Cendena is properly characterized as a common carrier even though he merely backhauledgoods for other merchants, and even if it was done on a periodic basis rather than on a regular basis, andeven if his principal occupation was not the carriage of goods.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. It also avoidsmaking a distinction between a person or enterprise offering transportation services on a regular orscheduled basis and one offering service on an occasional, episodic or unscheduled basis. Neither does it make a distinction between a carrier offering its services to the general public and one who offersservices or solicits business only from a narrow segment of population.
Planters Product Inc. purchased from Mitsubishi international corporation metric tons of Ureafertilizer, which the latter shipped aboard the cargo vessel M/V Sun Plum owned by private respondent Kyosei Kisen Kabushiki Kaisha. Prior to its voyage, a time charter-party on the vessel respondent enteredinto between Mitsubishi as shipper/charterer and KKKK as ship owner, in Tokyo, Japan.Before loading the fertilizer aboard the vessel, (4) of her holds were presumably inspected by the
charterer’s representative and found fit to take a load of urea in bulk. After the Urea fertilizer was loaded
in bulk by stevedores hired by and under the supervision of the shipper, the steel hatches were closedwith heavy iron lids. Upon arrival of vessel at port, the petitioner unloaded the cargo pursuant to theterms and conditions of the charter-party. The hatches remained open throughout the duration of thedischarge.
Upon arrival at petitioner’s warehouse a survey conducted over the cargo revealed a shortage and
the most of the fertilizer was contaminated with dirt. As such, Planters filed an action for damages. Thedefendant argued that the public policy governing common carriers do not apply to them because theyhave become private carriers by reason of the provisions of the charter-party.
: Whether or not the charter-party contract between the ship owner and the charterer transforms acommon carrier into a private carrier?
A charter party may either her be time charter wherein the vessel is leased to the charterer,wherein the ship is leased to the charterer for a fixed period of time or voyage charter, wherein the shipis leased for a single voyage. In both cases, the charter party provides for the hire of the vessel only,either for a determinate time or for a single or consecutive voyage.It is therefor imperative that such common carrier shall remain as such, notwithstanding thecharter of the whole or part of the vessel by one or more persons, provided the charter is limited to theship only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both shipand its crew as in bareboat or demise that it becomes a private carrier. Undoubtedly, a shipowner in atime or voyage charter retains in possession and control of the ship, although her holds may be theproperty of the charterer.
3. 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 acustom 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 TabacaleraCompound, 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 thecargo 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 

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