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01. People v. Quasha, G.R. No.

L-6055, June 12, 1953

Facts:

Pacific Airways Corporation registered its articles of incorporation with SEC, and
that its primary purpose is to carry on a business of a common carrier (a public utility).
They made it appear that Arsenio Baylon, a Filipino citizen owned the 60.005 per cent of
the corporation when in reality it was owned by American citizens and Baylon was only
a trustee.

Issue:

Whether or not foreign citizen can form a public utility corporation.

Ruling:

Yes, foreign citizen can form a public utility corporation.

Section 8, Article XIV of the 1935 Constitution provides that “no franchise,
certificate, or any other form of authorization for the operation of a public utility shall
be granted except to citizens of the Philippines or to corporation or other entities
organized under the law of the Philippines, sixty per centum of the capital of which is
owned by citizens of the Philippines . . . .”

Here, for a corporation to be entitled to operate a public utility it is not necessary


that it be organized with 60 per cent of its capital owned by Filipinos from the start. A
corporation formed with capital that is entirely alien may subsequently change the
nationality of its capital through transfer of shares to Filipino citizens. The moment for
determining whether a corporation is entitled to operate as a public utility is when it
applies for a franchise, certificate, or any other form of authorization for that purpose.
And that can be done after the corporation has already come into being and not while it
is still being formed.
02. Tawang MPC (TMPC) v. La Trinidad Water District (LTWD),
G.R. No. 166471, March 22, 2011

Facts:

TMPC filed with the National Water Resources Board (NWRB) an application for
a certificate of public convenience (CPC) to operate and maintain a waterworks system
in Barangay Tawang. LTWD opposed TMPC’s application claiming that, under Section
47 of PD No. 198, as amended, LTWD’s franchise is exclusive.

Issue:

Whether or not LTWD as a public utility can be granted with exclusive franchise
under PD No. 198, as amended.

Ruling:

No, LTWD as a public utility cannot be granted with exclusive franchise.

Section 11, Article XII of the 1987 Constitution provides that, “No franchise,
certificate, or any other form of authorization for the operation of a public utility shall
be granted except to citizens of the Philippines… nor shall such franchise, certificate or
authorization be exclusive in character or for a longer period than fifty years.

Here, by express prohibition of the Constitution, the President, Congress and the
Court cannot create directly franchises that are exclusive in character. What they cannot
legally do directly they cannot do indirectly. Thus, they cannot create indirectly
franchises that are exclusive in character by allowing the Board of Directors (BOD) of a
water district and the Local Water Utilities Administration (LWUA) to create franchises
that are exclusive in character.
03. De Guzman v. CA, G.R. No. L-47822, December 22, 1988

Facts:
Private Respondent a junk dealer, was engaged in buying up used bottles and
scrap metal in Pangasinan and bring such material to Manila for resale utilizing 2 six-
wheeler trucks for hauling. On the return trip to Pangasinan, respondent would load his
vehicles with cargo which various merchants wanted delivered to differing
establishments in Pangasinan. For that service, respondent charged freight rates which
were commonly lower than regular commercial rates.

Issue:
Whether or not Private Respondent is characterized as a common carrier.

Ruling:
Yes, Private Respondent can be characterized as a common carrier.

Article 1732 of the Civil Code provides that, “Common carriers are persons,
corporations, firms or associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air for compensation, offering their
services to the public.”

Here, The above article 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 (in local Idiom as "a sideline"). Article 1732 also
carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish
between a carrier offering its services to the "general public," i.e., the general community
or population, and one who offers services or solicits business only from a narrow
segment of the general population. Hence, It appears to the Court that private
respondent is properly characterized as a common carrier even though he merely "back-
hauled" goods for other merchants from Manila to Pangasinan, although such back-
hauling was done on a periodic or occasional rather than regular or scheduled manner,
and even though private respondent's principal occupation was not the carriage of
goods for others. There is no dispute that private respondent charged his customers a
fee for hauling their goods; that fee frequently fell below commercial freight rates is not
relevant here.
04. Crisostomo v. CA, G.R. No. 138334, August 25, 2003

Facts:

Crisostomo contracted the services of respondent Caravan Travel and Tours


International, Inc. to arrange and facilitate her booking, ticketing and accommodation in
a tour dubbed Jewels of Europe. She was told that her flight was on June 15, 1991.
Without checking her travel documents, she went to NAIA but the date of her flight she
was supposed to take had already departed the previous date. Hence, she demanded a
refund contending that in the contract of carriage the common carrier is obliged to
observe utmost care and extra-ordinary diligence.

Issue:

Whether or not a travel agency is a common carrier.

Ruling:

No, a travel agency is not a common carrier.

Commentaries and Jurisprudence on the Commercial Laws of the Philippines, Vol.


4 (1993 Edition), Aguedo F. Agbayani states that, a contract of carriage or transportation
is one whereby a certain person or association of persons obligate themselves to
transport persons, things, or news from one place to another for a fixed price. Also, a
common carrier is defined under Article 1732 of the Civil Code as persons, corporations,
firms or associations engaged in the business of carrying or transporting passengers or
goods or both, by land, water or air, for compensation, offering their services to the
public.

Here, It is obvious from the above definition that respondent is not an entity
engaged in the business of transporting either passengers or goods and is therefore,
neither a private nor a common carrier. Respondent did not undertake to transport
petitioner from one place to another since its covenant with its customers is simply to
make travel arrangements in their behalf.