De Guzman v.

CA

Facts:

Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those that he gathered to Manila
for resale using 2 six-wheeler trucks. On the return trip to Pangasinan, respondent would load his vehicle with cargo
which various merchants wanted delivered, charging fee lower than the commercial rates. Sometime in November
1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750 cartons of Liberty Milk. On
December 1, 1970, respondent loaded the cargo. Only 150 boxes were delivered to petitioner because the truck
carrying the boxes was hijacked along the way. Petitioner commenced an action claiming the value of the lost
merchandise. Petitioner argues that respondent, being a common carrier, is bound to exercise extraordinary
diligence, which it failed to do. Private respondent denied that he was a common carrier, and so he could not be held
liable for force majeure. The trial court ruled against the respondent, but such was reversed by the Court of Appeals.

Issues:

(1) Whether or not private respondent is a common carrier

(2) Whether private respondent is liable for the loss of the goods

Held:

(1) Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an ancillary activity. Article 1732 also carefully avoids making
any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and
one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish
between a carrier offering its services to the "general public," i.e., the general community or population, and one
who offers services or solicits business only from a narrow segment of the general population. It appears to the Court
that private respondent is properly characterized as a common carrier even though he merely "back-hauled" goods
for other merchants from Manila to Pangasinan, although such backhauling was done on a periodic or occasional
rather than regular or scheduled manner, and even though private respondent's principal occupation was not the
carriage of goods for others. There is no dispute that private respondent charged his customers a fee for hauling their
goods; that fee frequently fell below commercial freight rates is not relevant here. A certificate of public convenience
is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers.

(2) Article 1734 establishes the general rule that common carriers are responsible for the loss, destruction or
deterioration of the goods which they carry, "unless the same is due to any of the following causes only:

a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;

b. Act of the public enemy in war, whether international or civil;

c. Act or omission of the shipper or owner of the goods;

d. The character of the goods or defects in the packing or in the containers; and

e. Order or act of competent public authority."

The hijacking of the carrier's truck - does not fall within any of the five (5) categories of exempting causes listed in
Article 1734. Private respondent as common carrier is presumed to have been at fault or to have acted negligently.
This presumption, however, may be overthrown by proof of extraordinary diligence on the part of private
respondent. We believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the
goods carried are reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible
threat, violence or force." we hold that the occurrence of the loss must reasonably be regarded as quite beyond the
control of the common carrier and properly regarded as a fortuitous event. It is necessary to recall that even
common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are not held
liable for acts or events which cannot be foreseen or are inevitable, provided that they shall have complied with the
rigorous standard of extraordinary diligence.
First Philippine Industrial Corp. vs. CA

Facts:

Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in January 1995, petitioner
applied for mayors permit in Batangas. However, the Treasurer required petitioner to pay a local tax based on gross
receipts amounting to P956,076.04. In order not to hamper its operations, petitioner paid the taxes for the first
quarter of 1993 amounting to P239,019.01 under protest. On January 20, 1994, petitioner filed a letter-protest to the
City Treasurer, claiming that it is exempt from local tax since it is engaged in transportation business. The respondent
City Treasurer denied the protest, thus, petitioner filed a complaint before the Regional Trial Court of Batangas for
tax refund. Respondents assert that pipelines are not included in the term common carrier which refers solely to
ordinary carriers or motor vehicles. The trial court dismissed the complaint, and such was affirmed by the Court of
Appeals.

Issue:

Whether a pipeline business is included in the term common carrier so as to entitle the petitioner to the exemption

Held:

Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or association engaged in
the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation,
offering their services to the public."

The test for determining whether a party is a common carrier of goods is:

(1) He must be engaged in the business of carrying goods for others as a public employment, and must hold himself
out as ready to engage in the transportation of goods for person generally as a business and not as a casual
occupation;

(2) He must undertake to carry goods of the kind to which his business is confined;

(3) He must undertake to carry by the method by which his business is conducted and over his established roads; and

(4) The transportation must be for hire.

Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier. It is engaged
in the business of transporting or carrying goods, i.e. petroleum products, for hire as a public employment. It
undertakes to carry for all persons indifferently, that is, to all persons who choose to employ its services, and
transports the goods by land and for compensation. The fact that petitioner has a limited clientele does not exclude it
from the definition of a common carrier.
Perea vs Spouses Nicolas and Teresita Zarate

Civil Law Common Carrier Private School Transport are Common Carriers
Torts and Damages Heirs of a high school student may be awarded damages for loss income
In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette Perea to transport their (Zarates) son,
Aaron Zarate, to and from school. The Pereas were owners of a van being used for private school transport.
At about 6:45am of August 22, 1996, the driver of the said private van, Clemente Alfaro, while the children were on
board including Aaron, decided to take a short cut in order to avoid traffic. The usual short cut was a railroad
crossing of the Philippine National Railway (PNR).
Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway) was up which means it was okay
to cross. He then tried to overtake a bus. However, there was in fact an oncoming train but Alfaro no longer saw the
train as his view was already blocked by the bus he was trying to overtake. The bus was able to cross unscathed but
the vans rear end was hit. During the collision, Aaron, was thrown off the van. His body hit the railroad tracks and his
head was severed. He was only 15 years old.
It turns out that Alfaro was not able to hear the train honking from 50 meters away before the collision because the
vans stereo was playing loudly.
The Zarates sued PNR and the Pereas (Alfaro became at-large). Their cause of action against PNR was based on
quasi-delict. Their cause of action against the Pereas was based on breach of contract of common carriage.
In their defense, the Pereas invoked that as private carriers they were not negligent in selecting Alfaro as their
driver as they made sure that he had a drivers license and that he was not involved in any accident prior to his being
hired. In short, they observed the diligence of a good father in selecting their employee.
PNR also disclaimed liability as they insist that the railroad crossing they placed there was not meant for railroad
crossing (really, thats their defense!).
The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the RTC. In the decision of the RTC and the CA,
they awarded damages in favor of the Zarates for the loss of earning capacity of their dead son.
The Pereas appealed. They argued that the award was improper as Aaron was merely a high school student, hence,
the award of such damages was merely speculative. They cited the case of People vs Teehankee where the Supreme
Court did not award damages for the loss of earning capacity despite the fact that the victim there was enrolled in a
pilot school.
ISSUES: Whether or not the defense of due diligence of a good father by the Pereas is untenable. Whether or not
the award of damages for loss of income is proper.
HELD: Yes, in both issues.
Defense of Due Diligence of a Good Father
This defense is not tenable in this case. The Pereas are common carriers. They are not merely private carriers. (Prior
to this case, the status of private transport for school services or school buses is not well settled as to whether or not
they are private or common carriers but they were generally regarded as private carriers). Private transport for
schools are common carriers. The Pereas, as the operators of a school bus service were: (a) engaged in transporting
passengers generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over
established roads by the method by which the business was conducted; and (c) transporting students for a fee.
Despite catering to a limited clientle, the Pereas operated as a common carrier because they held themselves out
as a ready transportation indiscriminately to the students of a particular school living within or near where they
operated the service and for a fee.
Being a common carrier, what is required of the Pereas is not mere diligence of a good father. What is specifically
required from them by law is extraordinary diligence a fact which they failed to prove in court. Verily, their
obligation as common carriers did not cease upon their exercise of diligently choosing Alfaro as their employee.
(It is recommended that you read the full text, the Supreme Court made an elaborate and extensive definition of
common and private carriers as well as their distinctions.)
Award of Damages for Aarons loss of earning capacity despite he being a high school student at the time of his death
The award is proper. Aaron was enrolled in a reputable school (Don Bosco). He was of normal health and was an
able-bodied person. Further, the basis of the computation of his earning capacity was not on what he would have
become. It was based on the current minimum wage. The minimum wage was validly used because with his
circumstances at the time of his death, it is most certain that had he lived, he would at least be a minimum wage
earner by the time he starts working. This is not being speculative at all.
The Teehankee case was different because in that case, the reason why no damages were awarded for loss of
earning capacity was that the defendants there were already assuming that the victim would indeed become a pilot
hence, that made the assumption speculative. But in the case of Aaron, there was no speculation as to what he
might be but whatever hell become, it is certain that he will at the least be earning minimum wage.