Annotation Common Carrier

8/17/2019 Annotation Common Carrier

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§ I.

§ II.

§ III.

a)

b)

c)

d)

e)

f)

§ IV.

a)

b)

c)

d)

232 SUPREME COURT REPORTS ANNOTATED

Common Carrier, Revisited

A N N O T A T I O N

COMMON CARRIER, REVISITED

By

ROGELIO E. SUBONG*

________________

Introduction, p. 233

Common Carrier: A Brief Background, p. 235

Definitions, p. 235

Webster’s New World College Dictionary, 14th

Edition, p. 295, p. 235

Black Law Dictionary, Abridged Fifth Edition, p.

143, p. 236From 13 Am. Jur 2d. 561-562, p. 236

Ballantine’s Law Dictionary, Third Edition, p. 226,

p. 236

Sec. 13 of Act No. 3108, as amended by Act No.

3316, p. 236

Sec. 13 (a) the Public Service Act, as amended, or

Com. Act No. 146, as amended, p. 237

Elements of a Common Carrier, p. 237

Any person, corporation, firm or association, p. 237

Engaged in the business of carrying or

transporting, p. 238

Carrying or transporting passengers or goods or

both, p. 238


both by land, water or air, p. 238


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e)

f)

§ V.

§ VI.

a)

b)

c)

d)

e)

f)

g)

h)

i) j)

§ VII.

§ VIII.

The carrying or transporting of passengers or goods

or both for a fee or compensation, p. 239

Offering their services to the public as a general or

limited clientele, whether permanent, occasional or

accidental, p. 239

Constitutional and Legal Basis for Regulation

of Common Carriers, p. 240Pertinent Supreme Court Decisions on

Common Carriers, p. 241

U.S. v. Quinajon, et al. and U.S. vs. Tan Piaco, p.

241

Two (2) Luzon Brokerage vs. PSC cases, p. 242

Mendoza vs. PAL, p. 243

_______________

* A.B (UP) and LL.B (UP).

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VOL. 401, APRIL 9, 2003 233


Home Insurance Inc. vs. American Steamship

Agencies, Inc., et al., 23 SCRA 24 (1968), p. 244

San Pablo vs. Pantranco South Express, Inc., p. 245

De Guzman vs. CA, p. 247

Planters Products, Inc. vs. CA, 226 SCRA 476

(1993), p. 248

Valenzuela Hardwood and Industrial Supply, Inc.

vs. CA, p. 250

National Steel Corp. vs. CA, p. 251Philippine American General Insurance Co. vs.

PKS Shipping Co., p. 252

Summary of the Pertinent Holdings on the

Nature of Common Carriers, p. 253

Significance of the Case under Annotation, p.

255


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a)

b)

c)

d)

e)

f)

§ IX.

A continuing ambivalence, p. 255

Determination crucial, p. 256

Akin to the case of a flat-footed draft dodger, p. 256

Was fortuitous event or force majeure established?,

p. 256

Several instances when findings of the CA may be

reviewed on appeal, p. 257 Affirmation of the holding in De Guzman vs. CA &

Planters Products, Inc. vs. CA, p. 257

Conclusion, p. 257

________________

§ I. Introduction

Legal concepts are usually constant in their meanings yet

must yield to changes and expansions as demanded by

moment. This is akin to the minor enigma made famous by

Harvard Law School Dean Roscoe Pound: “ Law must be

stable, but it cannot stand still.” In Constitutional Law

alone, numerous concepts and doctrines have been modified

and expanded to include matters which could not have

been conceived by the founding fathers at the drafting of

the fundamental law yet are fairly comprehended underthe rudiments of justice and fair-play. The right to privacy

has been expanded to include wire-tapping and wireless

mode of snooping although such right had a limited scope

before the electronic age. The right to employment as

property within Constitutional protection was not as

fortified then as they are now when labor rights were not

as established as they are today. Copyrights have expanded

to computer programs, databases, and computer-generated

words, things unheard of before circa 1980s. And other

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legal rights, which used to have a limited ambit have been

pushed into the frontiers of cyberspace.


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Expansion of the coverage of legal concepts is inevitable

if law is to be responsive to “the felt necessities of the

times” as per Justice Oliver Wendell Holmes. This holds

true in public utility jurisprudence, particularly on the

concept of public utility service and common carrier. The

basic idea of a public utility operator used to include

ownership of the equipment used in the service being

provided. This has been modified with the advent of Tatadvs. Garcia, 243 SCRA 477 (1995) where such ownership of

the equipment by the grantee-operator may not be

necessary. Furthermore, a common carrier has been

traditionally viewed as a rolling or moving equipment that

transfers passengers and cargoes from one place to

another. This idea has now been expanded to include

permanently immobile iron pipelines through which flow

oil or gas, linking distant refineries or plants to their depot

deep into the metropolis with the promulgation First

Philippine Industrial Corp. vs. Court of Appeals, 300 SCRA 661 (1998).

Philippine American General Insurance Co. vs. PKS

Shipping Co., G.R. No. 149038 promulgated on April 9,

2003 highlights a continuing uncertainty as to the precise

nature of a common carrier. The trial court and the Court

of Appeals differed in their conclusions in classifying the

ship owner whether a common carrier or a private carrier.

The High Court made its own holding on this issue by

relying upon settled jurisprudence on the nature of acommon carrier. In this regard, there appears a need to re-

examine conflicting decisions on whether a charter party

contract renders the service of the carrier a private carrier

(Home Insurance Co. vs. American Steamship Agencies Inc.,

et al., 23 SCRA 24 (1968) and Planters Products, Inc. vs.

Court of Appeals, 226 SCRA 476 (1993).

In the case under Annotation, the trial court and the

two (2) appellate courts arrived at the same conclusion

absolving the ship owner from liability not because of the

nature of its service as carrier but due to fortuitous eventor force majeure which caused the loss of the cargoes

carried by the ship owner. Hence, this is as good a time as

any to revisit this concept of common carrier whether there

have been changes since the latest jurisprudence on the

matter. An accurate determination of a transport facility

whether a private or common carrier will also determine

the quantum of proof needed and the level of diligence the

latter has to exercise


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over passengers and cargoes in transporting them to their

destination.

§ II. Common Carrier: A Brief Background

The concept of common carrier was generally unheard of

during the Spanish regime. Public utility regulation

formally started with the Americans at the turn of the

century. Besides, motorized vehicles for the movement of

people and goods arrived in the country from the United

States during the earlier decades of the 1900. Then as now,transport facilities, especially the motorized ones were

sorely needed by the inhabitants who regularly commute to

the seat of government in Manila from their respective

provinces in Luzon and vice-versa. During the early days of

the American regime or better known as the pre-war years,

transport service was not organized, let alone,

institutionalized. Some enterprising Filipinos who had the

fortune of acquiring these new contraptions from the

United States engaged in “colorum” service (operation

without authority or franchise) because of demand fromlocal travellers. During the early decades of the 1900s the

United States, started producing cars, trucks and buses,

thanks to Mr. John Henry Ford who introduced the

assembly line method of mass production with its car

models. This development resulted in the increase of the

number of motor vehicles that reach our transport starved

country.

With the arrival of motor vehicles or transport systems

from the U.S. that carry passengers like cars, trucks andbuses and even railway trains, the concept of a common

carrier was developed. What comes to mind when the term

“common carrier” is mentioned is a mode of transportation

of people and goods from one place to another for a fee. This

is fairly correct but it has legal definitions recognized

through the years in American as well as in Philippine

jurisdiction.


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a)

b)

c)

§ III. Definitions

For a better appreciation of the concept of a common

carrier, let us reproduce its various definitions:

Webster’s New World College Dictionary, 14th

Edition, p. 295 —“A person or company in thebusiness of transporting passengers or goods for a

fee, at uniform rates available to all persons

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Black Law Dictionary, Abridged Fifth Edition, p.

143— “Any carrier required by law to convey

passengers or freight without refusal if the

approved fare or charge is paid in contrast to

private or contract carrier. One who holds himself

out to the public as engaged in business of

transportation of person or property from place to

place for compensation, and who offers services to

the public generally.”

From 13 Am Jur 2d. 561-562— “A common carriermay be defined, very generally, as one who holds

himself out to the public as engaged in the business

of transporting persons or property from place to

place, for compensation, offering his services to the

public generally. The dominant and controlling

factor in determining the status of one as a common

carrier is his public profession or holding out, by

words or by a course of conduct, as to the service

offered or performed, with the result that he may beheld liable for refusal, if there is no valid excuse, to

carry for all who apply. The distinctive

characteristic of a common carrier is that he

undertakes to carry for all people indifferently, and

he is regarded in some respects, as a public servant.

Hence, one performing transportation service for

himself only is not a common carrier. One does not

have the status of a common carrier where he

undertake carriage for a particular group or class of


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d)

e)

f)

persons under a special arrangement, or for a

particular person only.”

Ballantine’s Law Dictionary, Third Edition, p. 226)

— “One who holds himself out to the public as

engaged in transporting persons or property from

place to place, for compensation, offering his

services to the public generally. 13 Am Jur 2d Car

S. 2. xxx xxx The dominant and controlling factor indetermining the status of a common carrier is his

public profession or holding out by words, or by a

course of conduct, as to the services offered or

performed. ( Ace-High Dresses v. J.C. Trucking Co.,

122 Conn 578, 191 A 536, 112 ALR 86.)

Sec. 13 of Act No. 3108, as amended by Act No. 3316

—This was an earlier public utility law wherein

common carrier is a species of the term public

utility or public service which has been defined, towit:

x x x x x x x x x

The term ‘public service’ is hereby defined to include every individual, co-

partnership, etc. x x x

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VOL. 401, APRIL 9, 2003 237


x x x x that now or thereafter may own, operate, manage, or control

within the Philippine Islands for hire or compensation, any common

carrier, railroad, street railway, traction railway, subway, freight and/or

passenger motor vehicles, with or without fixed route, freight or any

other car service, x x x x x x engaged in the transportation of passengers

or cargoes x x x (Sec. 13 of Act No. 3108, as amended by Act No. 3316).

In this definition, the following phrase was not yet included: “with general or limited clientele, whether permanent, occasional

or accidental, and done for general business purposes.” Act No.

3108 was the earlier Public Service Law which was thereafter

superseded and repealed by Com. Act No. 146, as amended or the

Public Service Act, as amended.

Sec. 13. (a) the Public Service Act, as amended, or

Com. Act No. 146, as amended.We should note that

under this subsequent law, common carrier is still


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a)

comprehended within the concept of public service

which is defined, to wit:

“SEC. 13. (a) x x x x

xxxx

xxxx

(b) The term “public service” includes every person

that now or hereafter may own, operate, manage, or

control in the Philippines, for hire or compensation,with general or limited clientele, whether

permanent, occasional or accidental, and done for

general business purposes, any common carrier,

railroad, street railway, traction railway, subway,

motor vehicle, either for freight or passenger, or

both with or without fixed route x x x x” (The

underlined phrase were added, among others.)

§ IV. Elements of a Common Carrier

While there are several definitions of common carrier as set

forth above, the basic elements are about the same. From

the above definitions, we can deduce the following basic

elements:

Any person, corporation, firm or association —A

natural or juridical person is the usual applicant

and/or grantee of a certificate of public convenienceor franchise which makes for a franchised common

carrier. However, it has been held that

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a Certificate of Public Convenience (CPC) or a

franchise is not necessary to be classified as a

common carrier ( De Guzman vs. Court of Appeals,

168 SCRA 612 [1988]). So long as the elements as

per definition of a common carrier are present, such

operator is a common carrier, whether or not

covered by a franchise. In other words, a CPC or a

franchise is not a part of the definition of a common

carrier as set forth above. The list of common


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b)

c)

d)

carriers has expanded to include even non-stock

and supposedly non-profit corporations like the

cooperatives, e.g ., transport cooperatives. Although

from their Articles of Incorporation, the transport

cooperatives are organized for the main purpose of

mutually helping its members, they are allowed to

operate transport public utility service for which

they charge a fee or for which they earn profit.Engaged in the business of carrying or transporting

—As the term “common carrier” suggests, the

business is in the nature of carrying or

transporting. The traditional notion of carrying or

transporting is through a moving or rolling

equipment or vehicles that load and hold persons

and goods for transfer from one place to another

and vice-versa. But this concept has been expanded

to include even immobile and miles of iron pipes

mainly embedded underground through which flow

gas or oil en route from one destination to another

(First Philippine Industrial Corp. vs. Court of

Appeals, 300 SCRA 661 [1998]);


both —As stated above, a common carrier usually

transports persons or goods or both, from one place

to another with the use of moving equipment or

rolling vehicles. But due to THE expanded meaning

of the term common carrier with First PhilippineIndustrial Corp. vs. Court of Appeals, et al. supra.,

the idea of carrying or transporting which

traditionally conjures up physical movement of a

rolling equipment from one place to another and

vice-versa would not seem to be accurate anymore;


both by land, water or air —Again the traditional

notion of common carrier as physical transport of

people and goods from one place to another by land,water or air has been expanded to include “travel”

through pipelines of goods or commodities in

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e)

f)

the nature of oil or gas. How do we classify the

route travelled by oil or gas through these extended

pipes which as in the case of Alaska—US pipeline,

is sometimes buried underground, constructed

above the grounds or crosses the sea sitting on the

ocean floor?

The carrying or transporting of passengers or goods

or both for a fee or compensation —This impliesprofit incentive. In spite of claims of applicants for

public utility service or common carrier that they

aim to serve the public or to respond to public need,

the overriding consideration is still profit. This is

why charging fee is expected even by supposed non-

stock and non-profit corporations. Profit is the

universal denominator. All these incantations about

serving public need and convenience are pure shield

to profit motive. Perhaps to serve public need and

convenience is a factor for the proposed service, but

to think that that is the main motivation for

entering into the business of public utility is pure

naiveté;

Offering their services to the public as a general or

limited clientele, whether permanent, occasional or

accidental —This element has been added in the

definition under Com. Act No. 146, as amended. It

was not included in the definition in Act No. 3108, a

prior law. The earlier definition of common carrierin U.S. vs. Quinajon & Quitoriano, 31 Phil. 189

promulgated in 1915, or prior to the

Commonwealth Period did not contain this element:

“A common carrier is a person or corporation whose

regular business is to carry passengers or property

for all persons who may choose to employ and

remuner-ate him. A common carrier is a person or

corporation who undertakes to carry goods or

persons for hire.” Note also the phrase “to carrypersons or property” which implies physical

delivery by a moving equipment of persons or

property from one place to another. Flow of gas or

oil inside a pipeline has not been anticipated then.

From the above and in light of the subsequent High Court

ruling in First Philippine Industrial Corp. vs. CA, supra,

the above definitions and elements/requisites of a common

carrier may need revision. This case declared pipelines


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owner/operator as a common carrier. This is unmaking a

lot of settled views on common carrier. There is truly a

need to restudy this holding notwithstanding the

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provisions of Art. 86 (“Pipe line concessionaire as common

carrier”) of Rep. Act No. 387, or the Petroleum Act of the

Philippines.

§ V. Constitutional and legal Basis for Regulation of

Common Carriers

The State is vested with inherent powers for its survival

and the well-being of its citizenry. Most basic of these

inherent powers is police power which is power of the State

or government vested in the legislature to enact laws for

the general welfare (Gonzales, Neptali, Political Law

Reviewer, p. 234 citing 16 C.J.S. 537, 1965, ed.)

particularly for the regulation of human activities that

have adverse impact upon the populace if left to the private

sector to regulate. These human activities could be in the

nature of harnessing private property for public use or foruse which is opened to the public for a certain fee.

A public utility service is a kind of human activity using

private property or equipment for the satisfaction of certain

needs of the citizenry, e.g ., water system, electrical system,

telephone system, common carriers, etc. These kinds of

human activities, more than any other, are subject to

regulation because they affect the lives, limbs and health of

the public. Their operation is subject to regulation in the

interest of public protection. If the water system were

polluted or cut-off by the concessionaire, the sufferings andinconvenience are not hard to imagine; if electric service

were also cutoff, people may even rise in revolt unless the

same were restored; and if telephone or wireless

communications were blocked, it is as if the world stood

still for the citizenry who would feel isolated and insecure

like in the early hours of Martial Law circa 1972 when TV

and radio stations where cut off the air then.

Thus the legal basis for regulation is nothing more but


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order and community welfare. If every one who has the

wherewithal operates at will an electric, water or telephone

service in a single municipality or city, there would be

confusion, overlapping of infrastructures and ruinous

competition. This holds true with the operation of common

carriers, in land, sea and air. If everyone can just operate a

common carrier without securing franchise and without

being subjected to a higher standards of care, the ridingpublic and their goods would be at constant risk let alone

covered by lesser degree of care while in transit.

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There is public interest in the use of private property forpublic utility service, like ships, airplanes or trucks and

buses so much so that regulatory bodies concerned are

empowered to oversee their operations. If such private

property were no longer in harness for public use, then its

public character and the interest of the regulatory body in

its use also ceases. This is well expounded in that leading

US case of Munn vs. Illinois, 94 U.S. 113 (1877) and

reiterated by Justice Laurel in Pantranco vs. PSC , 70 Phil.

221:

“This brings us to the principles upon which this power of

regulations rests, in order that we may determine what is within

and what without its operative effect. Looking, then, to the

common law, from whence came the right the Constitution

protects, we find that when property is ‘affected with a public

interest, it ceases to be juris privati only.’ This was said by Lord

Chief Justice Hale more than two hundred years ago . . . . . .

Property does become clothed with a public interest when used in

a manner to make it of public consequence, and affects the

community at large. When therefore, one devotes his property to a

use in which the public has an interest, he, in effect grants to the

public an interest in that use, and must submit to be controlled by

the public for the common good, to the extent of the interest he

has thus created. He may withdraw his grant by discontinuing

the use, but so long as he maintains the use, he must submit to

the control. . . .

x x x

x x x


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a)

“From the same source comes the power to regulate the

charges of common carriers, which was done in England as long

ago as the third year of the reign of William and Mary, and

continued until within a comparatively recent period. . .”

“Common carriers exercise a sort of public office, and have

duties to perform in which the public is interested . . . . . . . . Their

business is, therefore, ‘affected with a public interest’ within the

meaning of the doctrine which Lord Hale has so forcibly stated.”

§ VI. Pertinent Supreme Court Decisions on Common

Carrier

U.S vs. Quinajon, et al. and U.S vs. Tan Piaco —

The High Court relies heavily upon American

jurisprudence for authority in public utility as in otherareas of the law. Many of our laws come from American

jurisdiction, especially that of public utility. The earliest

case on common carrier was the US vs. Quinajon and

Quitoriano, 31 Phil. 189 (1915) which involved the viola-

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tion of an old law (Act No. 98) requiring uniform charges by

a common carrier. In this case, two (2) operators of

virayas/barges charged “differently” or overcharged in

transporting sacks of rice. The accused were found to have

violated Act No.98 and were directed to refund the

overcharge. The High Court then came up with about the

earliest definition of this term: “A common carrier is a

person or corporation whose regular business is to carrypassengers or property for all persons who may choose to

employ and remunerate him. A common carrier is a person

or corporation who undertakes to carry goods or persons for

hire.”

Then in U.S. vs. Tan Piaco, et al., 40 Phil. 853 (1920) the

High Court applied the definition of common carrier in US

vs. Quinajon, et al., supra. which resulted in the acquittal

of the accused. The accused was charged with operating a

common carrier by using two (2) automobile trucks for hire


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b)

in the province of Leyte carrying passengers and freight

without the required authority from the then Public Utility

Commission. Upon conviction, accused appealed claiming

that “he had not held himself out” to the public. Applying

the definition then of a common carrier the High Court

acquitted the accused because it found that he was not

operating a common carrier which required securing the

corresponding franchise. The High Court found that theaccused “furnished service under special agreements to

carry particular persons and property” and did not hold

himself out to the public.

Two (2) Luzon Brokerage vs. PSC cases —

In Luzon Brokerage Co. vs. PSC , 57 Phil. 536 (1932) a

brokerage firm was exempted from securing a franchise or

certificate of public convenience as it was not considered a

public utility or specifically, a common carrier. The HighCourt found that the brokerage firm only offered its

services to a limited clientele – the customers of said

brokerage firm. Under Act No. 3108, the public utility law

in 1932 when this case was decided, the definition of a

public utility which comprehended common carrier did not

include services offered even to “a limited clientele”. But

this ruling was later abandoned in a subsequent case

involving the same brokerage firm in Luzon Brokerage Co.,

Inc. vs. Comision de Servicios Publico, 70 Phil. 148 (1940).

Since said company insisted that its trucking service solely

catered to its brokerage customer, a limited clientele, it

should still be exempted from securing a franchise for

trucking service. Act No. 3108 which was the governing law

then was sub-

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VOL. 401, APRIL 9, 2003 243


sequently amended by Act No. 454 which included in the

definition of a public service—even trucking service

rendered by a brokerage firm solely to its customers. The

pertinent portion of the decision written in Spanish

decreed:

“La ley No. 454 es clara encuantro incluye en la definicion de lo


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c)

que servicio publico el que se preta mediante compensacion,

aunque esta limitado exclusivamente a los parroquinos de la

recurrente” (Italics supplied).

This was also the holding in Ohkawa vs. PSC , 70 Phil. 168

(1940). It pertained also to the same service of a customs

brokerage firm to its customers. The High Court noted that

the definition of “public service” was enlarged or broadened

to include even such brokerage firms trucking service

although limited exclusively to its customers.

Mendoza vs. PAL —

After the war the High Court decided the case of Mendoza

vs. PAL, 90 Phil. 836 (1952). This was a suit for damages

filed against the Philippine Airlines (PAL) for failure to

deliver on time a film entitled “Himala ng Birhen” for

showing during the fiesta in Naga City. The film actuallyreached the airport in Pili before the scheduled showing

date, but was returned for unexplained reasons. Thus the

theater owner sued PAL for damages. The trial court found

that the theater owner suffered damages for the late

arrival of the film but it absolved the airline company from

liability.

On appeal the High Court sustained the trial court

ruling citing failure of the theater owner to make suitable

arrangement for the prompt delivery of the film and notice

of possible damages he would suffer in case of delay indelivery.

On appeal the High Court affirmed the trial court

decision and cited U.S. authorities on the nature of a

common carrier. It was about the first Philippine case that

recognized airline operator as common carrier:

x x x x “But an airplane owner cannot be classed as a common

carrier of passengers unless he undertakes, for hire, to carry all

persons who apply for passage indiscriminately as long as there is

room and no legal excuse for refusing x x x x Am Jur., Aviation,

Sec. 58, pp. 34-35.

“The test of whether one is a common carrier by air is whether

he holds out that he will carry for hire, so long as he has room,

goods of everyone bringing goods to him for carriage, not whether

he is carrying as a

244


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d)



public employment or whether he carries to a fixed place.” (Ibid.,

Sec. 39, p. 99).

Home Insurance Inc. vs. American Steamship

Agencies Inc., et al., 23 SCRA 24 (1968)—

A firm in Peru shipped several thousands of jute bags of

Peruvian fish meal to the Philippines consigned to San

Miguel Corp. The cargo was carried by a vessel of the

American Steamship Agencies, Inc. (ASAI) and insured

with the Home Insurance Inc. (HII). When said cargo

arrived, it was loaded onto the lighters of Luzon

Stevedoring Co. (LSC) for final delivery to consignee. Upon

verification, there were shortages of more than P12,000

worth of the cargo. After claims were made, the HII paid the value of the

lost cargo which amounted to over P14,000. HII then filed

suit against LSC and ASAI. The trial court absolved the

LSC and found the ASASI liable because, among others,

while there was a provision in the charter party contract

exempting the ship owner from liability, the court found

the same as against public policy under Art. 1744 of the

Civil Code. ASAI appealed raising the validity of this

provision in the charter party contract.Held: Decision reversed. The ship owner was a private

carrier for which such stipulation limiting its liability is not

contrary to public policy.

“A perusal of the charter party referred to shows that while the

possession and control of the ship were not entirely transferred to

the charterer, the vessel was chartered to its full and complete

capacity (Exh. 3). Furthermore, the charter had the option to go

north or south or vice-versa, loading, stowing and discharging at

its risk and expense. Accordingly, the charter party contract isone of affreightment over the whole vessel rather than a demise.

As such, the liability of the ship owner for acts or negligence of its

captain and crew, would remain in the absence of stipulation.”

The High Court pointed out that Section 2 of par. 2 of the

charter party contract provided that the ship owner is liable for

loss of goods arising from want of diligence on its part or its

manager in making the vessel seaworthy and in the operations of

the said vessel. But it also noted that; “Said paragraph however

exempts the owner of the vessel from any loss


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e)

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VOL. 401, APRIL 9, 2003 245


or damage or delay arising from any other source, even from the

neglect or fault of the captain or crew or some other person

employed by the owner on board, for whose acts the owner would

ordinarily be liable except for said paragraph.”

The High Court held that the character of the carrier because

of the charter party contract or affreightment, is that of a private

carrier and not a common carrier. Accordingly, the ship owner can

enter into a contract that would limit its liability.

“The provision of our Civil Code on common carrier were taken

from Anglo-American law. Under American jurisprudence, a

common carrier undertaking to carry a special cargo or chartered

to a special person only, becomes a private carrier. As a privatecarrier, a stipulation exempting the owner from liability for the

negligence of its agent is not against public policy, and is deemed

valid.”

“Such doctrine. We find reasonable. The Civil Code provisions

on common carriers should not be applied where the carrier is not

acting as such but as a private carrier. The stipulation in the

charter party absolving the owner from liability for loss due to the

negligence of its agent would be void only if the strict public policy

governing common carriers is applied. Such policy has no force

where the public at large is not involved, as in the case of a ship

totally chartered for the use of a single party.”

San Pablo vs. Pantranco South Express Inc. —

There is this interesting case in maritime public utility

jurisprudence known as “the sea-as-a-continuation-of-the-

highway case”, San Pablo vs. Pantranco South Express,

Inc., 153 SCRA 199 (1987). This writer had the privilege of

representing the late Petitioner Epitacio San Pablo beforethe Board of Transportation. He brought the appeal to the

Supreme Court which resulted in this important decision.

Hence, his familiarity with the facts of the case. Pantranco

South Express, Inc. (PSEI) was a big bus company with

large fleet with lines from Pasay City to Tacloban City via

Matnog—Allen sea route crossing the San Bernardino

Strait and vice-versa. The buses were loaded on the RORO

vessels of E San Pablo and another shipping operator, the

Cardinal Shipping Corp.


18/33

246



for a fee. Then PSEI bought its own RORO vessel

purportedly to load its own buses along the Matnog-Allencrossing.

Prior to acquiring this vessel, PSEI tried to secure an

authority to purchase from the Maritime Industry

Authority (Marina) but was denied since the route where it

intended to serve was already adequately served by San

Pablo and Cardinal Shipping. Just the same, Pantranco

bought the vessel named, M/V Black Double and to avoid

applying for a separate franchise “it then contrived a novel

theory that what it proposes to operate is private ferryboat

service across a small body of water for the exclusive use of

its buses, trucks and passengers as an incident to its

franchise to convey passengers and cargo on land from

Pasay City to Tacloban City.” And “based on this

representation, no less than the Secretary of Justice

(Ricardo Puno) was led to render an affirmative opinion on

October 20, 1981.”

Armed with this opinion, Pantranco fielded its RORO

vessel which led to the filing of complaint by San Pablo and

Cardinal Shipping. After a brief hearing, the Board of Transportation rendered its decision, the pertinent portion

held: “The ferryboat service of Pantranco is a continuation

of the highway traversed by its buses from Pasay City to

Samar, Leyte passing through Matnog (Sorsogon) through

San Bernardino Strait to Allen (Samar). It is a private

carrier because it will be used exclusively to transport its

own buses, passengers and freight trucks traversing its

route.” San Pablo and Cardinal Shipping directly appealed

to the Supreme Court.

Held: The appealed decision was set-aside. Pantranco

had to apply for a separate water transportation franchise

and that it operated as a common carrier its supposed ferry

service. The High Court rejected the claim of Pantranco

that the San Bernardino Strait portion of its route is a

mere ferry crossing or a continuation of the highway

traversed by its buses because said strait is a large body of

water facing an open sea (Pacific Ocean) with occasional

strong winds and huge waves making it dangerous to small


19/33

f)

a)

b)

sea craft, and involving great distance with 1and 1/2 to 2

hours travel time.

The High Court also dismissed the claim of Pantranco as

absurd that its ferry service was a private carrier. It did

not deny it charged separately and issued separate tickets

for the sea voyage. “It cannot pretend that in issuing

tickets to its passengers it did so

247

VOL. 401, APRIL 9, 2003 247


as a private carrier and not as a common carrier.” And

evidence to show that it accepted walk-in passengers just

for the purpose of crossing the Matnog-Allen sea corridor

had been submitted.

De Guzman vs. Court of Appeals —

Then came De Guzman vs. Court of Appeals, 168 SCRA 612

(1988) which is now a leading case on the concept of a

common carrier. A junk dealer from Pangasinan was

engaged in the business of buying used bottles and scrap

iron from his province which he sold in Manila. He used

two (2) big trucks to carry these bottles and scrap from

Pangasinan to Manila and in one return trip he wascontracted to carry cartons of milk. However, one of the

trucks was hijacked and several cartons of milk were lost.

The owner of the goods sued the truck owner for the value

of the lost goods.

After trial, the court a quo found the junk dealer

operating as common carrier and liable for the loss of the

goods. He appealed to the Court of Appeals claiming error

in finding him a common carrier; that he habitually offered

trucking services to the public; in not exempting him fromliability on the ground of force majeure, etc. The CA

reversed the holding of the trial court and ruled that the

truck owner was not a common carrier since carrying goods

in the return trip from Manila was a “casual occupation—a

sideline to his scrap business.” On appeal the shipper

raised the following errors in the findings of the CA that:

the truck owner was not a common carrier;

the hijacking of the truck was force majeure;


20/33

c)

g)

and truck owner was not liable for the loss of the

goods.

Held: The decision of the CA affirmed. However the High

Court found that the junk dealer was a common carrier

although it absolved the former from liability for the loss of

the goods. It held that armed robbery was a fortuitous

event which was beyond the control of the junk dealer. As to the conclusion that the junk dealer was a common

carrier, the High Court cited the definition of a common

carrier under Art. 1732 of the Civil Code: “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.” It also

held that: The above article makes no distinction between

one whose principal business activity is the carrying of

persons or goods or

248



both, and one who does such carrying only as an ancillary

activity (in local idiom, as “a sideline”.)

It found the junk dealer to be operating as common

carrier even “with general or limited clientele, whether

permanent or accidental x x x.” It finally declared that: “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 occupation

was not the carriage of goods for others.”It also noted that the concept of common carrier “under

Art. 1732 may seem to coincide neatly with the notion of

“public service” under the Public Service Act, as amended,

“which at least partially supplements the law on common

carriers set forth in the Civil Code.”

Planters Products, Inc. vs. Court of Appeals, 226

SCRA 476 (1993)—


21/33

In 1974, Planters Products Inc. (PPI) bought from

Mitsubishi International of New York, several metric tons

of urea 46% fertilizer which were shipped through a vessel

owned by a Japanese shipping firm from Alaska, USA to

Poro Point, San Fernando, La Union, Philippines. A time

charter party contract was executed on the vessel prior to

departure.

Upon arrival in the Philippines, several metric tonswere discovered lost as well as contaminated, PPI sued the

resident agent of the ship owner for this loss. The ship

owner argued that strict public policy on common carrier of

presumption of negligence does not apply to it because of

the charter party contract which has transformed it into a

private carrier. The trial court found for the PPI.

On appeal to the Court of Appeals the latter court

reversed the trial court ruling and absolved the shipper

from liability for the value of the lost and damaged cargo.

The CA ruled that that the ship owner was a privatecarrier by reason of the charter party contract and not a

common carrier in line with the Home Insurance case. As

such the presumption of negligence under the Civil Code on

common carrier cannot apply to the ship owner.

249

VOL. 401, APRIL 9, 2003 249


PPI appealed to the High Court arguing that the Home

Insurance Inc. case has no relevance as it involved

delimitation of liability pursuant to a charter party

agreement and not whether the presumption of negligence

under the Civil Code applies only to common carriers and

not to private carriers.

Held: The CA decision was reversed and the trial court

decision reinstated. The High Court actually abandoned orreversed the holding in Home Insurance on the effect of

charter party contract on the nature of the carrier. In Home

Insurance Inc., the charter contract makes the ship owner a

private carrier whereas in the instant case, the High Court

departed from said holding by insisting that said charter

contract does not the change nature of the service of the

ship owner into a private carrier unless the contract is

demise or bareboat charter.

“A ‘charter party’ is defined as a contract by which an


22/33

h)

entire ship, or some principal part thereof, is let by the

owner to another person for a specified time or use, a

contract of affreightment by which the owner of a ship or

other vessel lets the whole or a part of her to a merchant or

other person for the conveyance of goods, on a particular

voyage, in consideration of the payment of freight.”

x x x

x x x

It is therefore imperative that a public carrier shall remain as

such, notwithstanding the charter of the whole or portion of a

vessel by one or more persons, provided the charter is limited to the

ship only, as in the case of time-charger or voyage-charter. It is

only when the charter includes both the vessel and its crew, as in

bareboat or demise that a common carrier becomes private, at

least insofar as the particular voyage covering the charter-party

concerned.” (Italics supplied)

It actually abandoned the holding in Home Insurance Inc.,

supra.:

At any rate, the rule in the United States that a ship chartered by

a single shipper to carry special cargo is not a common carrier,

does not find application in our jurisdiction, for we have observed

that the growing concern for safety in the transportation of

passengers and/or carriage of goods by sea requires a more

exacting interpretation of admiralty laws,

250



more particularly, the rules governing common carriers.” (Italics

supplied)

However, even as the finding of the High Court is that the

ship owner remains a common carrier regardless of the

charter party contract, the latter is still absolved from

liability as it was “not remiss in the exercise of due

diligence in order to minimize the loss or damage to the

goods it carried.”

Valenzuela Hardwood and Industrial Supply, Inc.

vs. Court of Appeals—


23/33

In Valenzuela Hardwood and Industrial Supply, Inc. vs.

Court of Appeals, 274 SCRA 642 (1997), a logging firm

chartered a ship of the Seven Brothers Shipping Corp. to

carry 940 lauan logs from Isabela to Manila. The logs were

insured insured with South Sea Surety and Inc., Co. for P2

million. The vessel sank and the cargo lost.

Valenzuela sued ship owner and insurer before the

Regional Trial Court. After trial, the RTC found the insurerliable as well as the ship owner, in the alternative. It found

the stipulation contrary to public policy which absolved the

shipowner for the loss of the cargo. Both appealed to the

Court of Appeals (CA) which modified the decision and

absolved the shipowner. Valenzuela Hardwood appealed

CA the decision absolving the ship owner from liability.

The sole issue was whether the provision in the charter

party absolving the ship owner from liability “arising from

the negligence of its (Seven Brothers’) captain was valid”?

Held: Court of Appeals decision affirmed. Petitiondismissed.

It is undisputed that the loss of the cargo was due to the

negligence of the captain. The High Court held that the

shipowner was a “private carrier when it contracted to

transport the cargo of Petitioner Valenzuela.” And as

private carrier, the parties may stipulate in the charter

party that responsibility for loss of the cargo may rest

solely upon the charterer and may even exempt the ship

owner from liability for loss due to the negligence of itscaptain. “Pursuant to Article 1306 of the Civil Code such

stipulation is valid because it its freely entered into by the

parties and the same is not contrary to law, mores, morals,

good customs, public order, or public policy.”

The High Court inexplicably still quoted with approval

that portion of Home Insurance case where a carrier

“undertaking to

251

VOL. 401, APRIL 9, 2003 251


carry a special cargo or chartered to a special person only

becomes a private carrier.” As against the contention of

petitioner that the Home Insurance case is not applicable,

the High Court insisted that: “ Undoubtedly, Home

Insurance is applicable to the case at bar.” This is a little


24/33

i)

strange because this holding was clearly abandoned by the

High Court in Planters Product, Inc. vs. Court of Appeals,

supra.

National Steel Corp. vs. Court of Appeals —

This case also involved the charter of a vessel owned by

Vlasons Shipping Inc. (VLI) to carry steel for the NationalSteel Corp (NSC) from Iligan City to Manila. When the

cargo arrived in Manila, they were damaged with rusts,

etc. The vessel involved was a tramping vessel which has

been declared at the outset by the High Court as a private

carrier. The refusal of the ship owner to pay for the damage

led to this suit by NSC against VSI. After trial the

complaint was dismissed and the counter-claim of VSI

granted. On appeal, the Court of Appeals affirmed the trial

court decision but reduced the award of damages and

eliminated attorneys fees.Both litigants appealed to the High Court. Several

issues were raised but what is pertinent to this

Annotation is: “Whether or not the provisions of the Civil

Code of the Philippines on common carriers pursuant to

which there exists a presumption of negligence against the

common carrier in case of loss or damage to the cargo are

applicable to a private carrier?”

Held: Decision affirmed. And as to the question of

whether the shipping company was a common carrier or a

private carrier the High Court held:

“Article 1732 of the Civil Code defines a common carrier 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.” It has been held that the true test of a common carrier

is the carriage of passengers or goods, provided it has space, for

all who opt to avail themselves of its transportation service for a

fee. A carrier which does not qualify under the above test isdeemed a private carrier. “Generally, private carriage is

undertaken by special agreement and the carrier does not hold

himself out to carry goods for the general public. The most typical,

although not the only contract by which the charterer, a party

other than the shipowner, obtains the use and services of all or

some part of a ship for a period of time or voyages.”

252


25/33

j)



“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 carrier 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

or carriage or charter party.”

Philippine American General Insurance Co. vs. PKS

Shipping Co.—

This case under Annotation involves a petition for reviewof the decision of the Court of Appeals which affirmed the

decision of the trial court finding lack of merit in the

complaint for reimbursement and damages filed by

plaintiff.

This case started when Davao Union Marketing Corp.

(DMUC) hired the services of PKS Shipping Corporation

(PKS Shipping) to transport 75,000 bags of cement valued

at P3 million plus pesos to Tacloban City. DMUC insured

the goods with Phil. American General Insurance Co.

(Philamgen) for the value of the cement. Along the way thebarge carrying the cement sank resulting in the total loss

of the goods.

DMUC collected payment from Philamgen by virtue of

the insurance agreement. Philamgen thereafter demanded

reimbursement from PKS Shipping which refused and this

resulted in a suit.

The trial court dismissed the complaint after finding

that the total loss of the cargo could have been due to

fortuitous event for which the shipping company was notliable. Or if through the negligence of the captain and crew,

under the limited liability rule under Art. 487 of the Code

of Commerce, the ship owner is still not liable if it

abandoned the vessel, which it did.

On appeal to the Court of Appeals, it affirmed in toto the

decision. It however noted that the evidence to establish

that PKS Shipping was a common carrier was “wanting

because the peculiar method of the shipping company’s

carrying goods for others was not generally held out as a


26/33

business but as a casual occupation.” Thus the CA

concluded that the PKS Shipping was not a common carrier

and was not duty bound to exercise extraordinary diligence

in the care of goods transported by it. Besides, it also found

that the loss was due to fortuitous event—typhoon that hit

the area.

253

VOL. 401, APRIL 9, 2003 253


Issue: Is the PKS Shipping a common carrier or private

carrier?

Held: It is a common carrier. The High Court reasoned:

“Much of the distinction between a “common or public carrier” anda “private or special carrier” lies in the character of the business,

such that if the undertaking is an isolated transaction, not part of

the business or occupation, and the carrier does not hold itself out

to carry the goods for the general public or to a limited clientele,

although involving the carriage of goods for a fee, the person or

corporation providing such service could very well be just a

private carrier. x x x

x x x

Contrary to the conclusions made by the appellate court, its

factual findings indicate that PKS Shipping has engaged itself in

the business of carrying goods for others, although for a limited

clientele, undertaking to carry such goods for a fee. The regularity

of its activities in this area indicates more than just casual

activity on its part.”

But then, even as the High Court held that the PKS

Shipping is a common carrier which reversed the

conclusion of the CA that it was a private carrier, it still

absolved the latter from liability. It found that under Art.

1734 a common carrier is absolved from any liability if the

loss of goods is due, but not limited to the following causes:

(1) “Flood, storm, earthquake, lightning, or other natural

disaster or calamity.” It found that the waves were

unusually high and the winds very strong which caused the

barge to sink. This situation was considered as a fortuitous

event as a natural calamity.

§ VII. Summary of the Pertinent Holdings on the


27/33

Nature of Common Carriers

We heavily rely upon American authorities in the

adjudication of our public utility cases. In US vs. Quinajon,

et al., supra. initial basic elements of a common carrier are

culled from American sources: a person or corporation; in

the regular business; of carrying passengers and property;

for all persons who may avail of such service; and for a fee.

These elements were reiterated in US vs. Tan Piaco, et al.

and the first Luzon Brokerage Co vs. PSC , 57 Phil. 536

case. But in the second Luzon Brokerage Co. vs. PSC (70

Phil. 148) case, the meaning of common carrier was

broadened to include service even to a limited clientele, the

brokerage customers. This was the same holding in

Okhawa vs. PSC, supra.

254



Mendoza vs. PAL, supra, made an official recognition that

an airplane operator was a new type of common carrier.

This case cited US authorities to the effect that a common

carrier undertakes to carry all persons as long as there is

room and there is no legal excuse for refusing. Home

Insurance Co. vs. American Steamship Agencies Inc. supra.came out with this strange ruling that a ship owner who

enters into a charter party contract, like for affreightment

(voyage or time charter), the ship owner is classified as a

private carrier. Then San Pablo vs. Pantranco, supra. held

that a carrier that issues separate tickets and accepts

walk-in passengers is not a private carrier but a common

carrier. De Guzman vs. Court of Appeals, supra,

acknowledged by the Supreme Court as a leading case on

the nature of common carrier, highlighted its expandedmeaning which includes limited clientele for which the

carrier merely “back hauled” goods. In this case, the main

business was selling used bottles and scrap iron for which

he used his trucks to deliver these items from Pangasinan

to Manila. And he merely “back hauled” other goods on the

way back—a limited and occasional activity. Yet, he was

classified as a common carrier.

Then in Planters Products, Inc. vs. Court of Appeals,

supra, the holding in Home Insurance Inc. vs. American


28/33

Steamship Agencies, Inc., supra. was abandoned, if not

reversed, but without the High Court explicitly saying so.

It declared that: “It is therefore imperative that a public

carrier shall remain as such, notwithstanding the charter

of the whole or portion of a vessel by one or more persons,

provided the charter is limited to the ship only, as in the

case of time-charger or voyage-charter.” This is actually the

more sensible view because even if the entire vessel werehired or chartered, so long as this excludes the crew, there

is no reason why the carrier becomes a private carrier. This

is akin to a franchised bus hired in its entirety for

excursion or special trip. Such contract or hiring does not

change the basic nature of his service from a common

carrier to a private carrier. With more reason that it should

remain a common carrier for there is need for a higher

degree of care of its passengers. Then in Valenzuela

Hardwood and Industrial Supply, Inc. vs. Court of Appeals,

supra, the High Court appears to have reinstated theholding in Home Insurance Co. vs. American Steamship

Agencies, Inc., supra, where “a common carrier undertaking

to carry a special cargo or chartered to a special person

only becomes a private carrier.” The High Court even

assured that: “Undoubtedly, Home Insurance is applicable

to the case at bar.” There seems

255

VOL. 401, APRIL 9, 2003 255


to be ambivalence here. And conflict with the more correct

view held in Planters Products, Inc. vs. Court of Appeals,

supra. Which is which really?

In National Steel Corp. vs. Court of Appeals, supra, the

High Court at the outset declared that a tramping vessel is

a private carrier. This should not be the case because atramping vessel is the counter-part of a TH or truck for

hire in land transportation which has no point to point

route and for cargo hauling only. This is definitely a

common carrier. Then it also held that the ship owner in

this case “did not offer its services to the general public”

and it carried passengers or goods under a “special contract

of charter party”, and therefore, it “was not a common

carrier but a private carrier”. So what, if it carried goods

“under special contract of charter party”? That does not


29/33

a)

b)

change anything at all. Precisely the amendment to the

definition of common carrier under Sec. 13 of Com Act No.

146, as amended and the holding in De Guzman vs. Court

of Appeals, supra. hold that a common carrier includes

operation for a limited clientele and on occasional or

periodic basis.

Finally, with the case under annotation, the Philippine

American General Insurance Co. vs. PKS Shipping Co.supra, the High Court actually reiterated the De Guzman

vs. Court of Appeals, supra, ruling in finding that the ship

owner in this case as a common carrier for it has “engaged

itself in the business of carrying goods for others, although

for a limited clientele, undertaking to carry such goods for

a fee. The regularity of its activities in this area indicates

more than just casual activity on its part.”

§ VIII. Significance of the Case Under Annotation

A continuing ambivalence —

This case highlights the continuing ambivalence over the

distinction between a private carrier and common carrier.

In this case, there was variance in the findings of the trial

court and the Court of Appeals as to what to classify the

ship owner. The trial court found that the shipping

company was a common carrier. On the other hand, theCourt of Appeals held “that the evidence that PKS

Shipping was a common carrier at the time it undertook to

transport the bags of cement was wanting.” This difference

in the conclusions in the nature of the carrier between the

trial court and the Court of Appeals had previously

occurred in De Guzman vs.

256



Court of Appeals, supra. and Planters Products, Inc. vs.

Court of Appeals, supra.

Determination crucial—

This determination as to the nature of the carrier is crucial


30/33

c)

d)

as it determines the burden of prove between the parties. If

the ship owner were a private carrier, the shipper has to

prove the fact of loss and the failure to exercise due

diligence in the care of the goods involved in this case. On

the other hand, if the ship owner were a common carrier,

all that the shipper has to prove is the fact of loss and the

presumption of negligence follows. In other words, to be

absolved from liability, after the fact of loss has beenestablished, the ship owner must prove that it has

exercised extraordinary diligence in the care of the goods

while in transit. This is often a tough order, in a manner of

speaking.

Akin to the case of a flat-footed draft dodger —

What is however curious about this case, is that while the

trial court found the ship owner to be a common carrier,

the Court of Appeals found it to be a private carrier.Finally, the Supreme Court agreed with the findings of the

trial court that the shipper was a common carrier.

However, regardless of the nature of the service, the three

(3) courts absolved the shipper from liability on the ground

of fortuitous event or force majeure. Sometimes, it is a little

amusing how the three (3) courts took pains in discussing

with authorities the actual nature of the service of the ship

owner in this case only to absolve it due to fortuitous event

or force majeure. Why waste time and scholarship over a

point which was not relied upon as the basis of liability? In

an analogous manner, we are reminded of an American

draft dodger before the Second World War. He took pains

in coming up with all sorts of excuses to avoid being

compelled to join the armed forces. He even had all his

teeth to certain of rejection from military service. When the

result of his physical examinations was released, he was

indeed denied draft. He learned the reason, his utter

consternation: he was flat-footed.

Was fortuitous event or force majeure established?—

In this case, reliance upon fortuitous event or force majeure

seems not so convincing. The ship owner was freed from

liability due to supposed force majeure or fortuitous event

like strong winds and big waves. It was a little strange that

there was a finding of

257


31/33

e)

f)

VOL. 401, APRIL 9, 2003 257


this natural calamity under Art. 1733 although the shipper

claimed that tropical storm “ Asiang ” then had not yet

entered the Philippine area of responsibility. There appears

no mention of any evidence to dispute the same. Thus

under Art. 1733, the ship owner is absolved from

responsibility in case of loss of goods due to among others,

flood, storm, etc. But there was no finding that it was really

a storm that caused the sinking, as its presence was

disputed and there appeared no counter-veiling evidence

against this claim.

Several instances when findings of the Court of

Appeals may be reviewed on appeal—

It is also significant that in this decision the High Court

took pains in enumerating numerous instances (ten

instances in all) wherein the findings of the Court of

Appeals may be reviewed by the former.

Affirmation of the holding in De Guzman vs. Court

of Appeals & Planters Products Inc. vs. Court of

Appeals—

Finally, there was no new holding introduced in theconcept of common carrier but at least there was continued

adherence to the guidelines set forth in Sec. 13 of Com. Act

No. 146, as amended and in the decision of De Guzman vs.

Court of Appeals, 168 SCRA 612 (1988). And on the effect of

charter party contract on the nature of the carrier, the

High court reaffirmed the holding in Planters Products Inc.

vs. Court of Appeals in spite of the more recent decisions of

Valenzuela Hardwood and Industrial Supply vs. Court of

Appeals and National Steel Corp. vs. Court of Appeals,

supra.

§ IX. Conclusion

The concept of common carrier continues to confuse and

bedevil lawyers and students of public utility

jurisprudence. In the case of De Guzman vs. Court of

Appeals, supra. and the case under Annotation, there was

variance in the conclusions reached by the trial court and


32/33

the Court of Appeals as to nature of the transport service in

these two (2) cases. If anything, this demonstrates the

lingering difficulty in getting a precise handle on this term,

so to speak. The uncertainty may be attributed to the latest

element introduced under Sec. 13 (b) of Com. Act No. 146,

as amended: “Offering their services to the public as a

general or limited clientele, whether permanent, occasional

or accidental.” There is often confusion in

258



the interpretation of this element as against the facts of the

case or the nature of the service being determined. In the

De Guzman vs. Court of Appeals, supra, case, the basicbusiness for which the trucks in question in the case was

junk dealership for which these motor vehicles are

specifically used to transport empty bottles and scrap iron.

In the return trip, the truck owner took in cartons of milk

to compensate for the gasoline used on the return trip. For

this act of hauling for a fee cartons of milk, the CA

classified the truck owner as a private carrier whereas the

Supreme Court held him to be a common carrier. This

confusion spills over into shipping service when the entire

ship is under a charter agreement.

Then, there is this fairly recent holding in First

Philippine Industrial Corp. vs. Court of Appeals, supra.

That pipeline owner or operator or concessionaire is a

common carrier. While the heading of Art. 86 of Rep. Act

No. 387 or Petroleum Act of the Philippines is “Pipeline

Concessionaire as common carrier” it was not explained

how and why. Then with the decision, this bare statutory

declaration was fortified into jurisprudence and part of the

law of the land (Art. 8, New Civil Code). Perhaps, there is aneed to re-examine this holding that a pipeline

owner/operator is a common carrier. After all is said and

done, after all that beautiful rationale of law, and after all

that enlightened vision of jurisprudence are sang in lyrical

prose and poetry, it all boils down to one dictum: Law is

common sense. In other words, if a legal concept has no

foundation in common sense, it would be constantly grating

against the general notion of what is right and fair.

Finally, in the review of pertinent cases, it would seem


33/33

that there is this lingering issue of whether entering into a

charter party contract (except bareboat or demise whereby

the entire vessel and crew are leased and hired by the

charterer) changes the complexion of the service of the

shipper into a private carrier. This was the holding in

Home Insurance Inc. vs. Court of Appeals, supra. This was

supposed to be abandoned in Planters Products Inc. vs.

Court of Appeals, supra. but seems to have been revived or“resurrected” in Valenzuela Hardwood and Industrial

Supply Inc. vs. Court of Appeals, supra. and National Steel

Corp. vs. Court of Appeals, supra. How could this have

happened in so short a time without any clarification is a

veritable source of wonderment. Indeed, a hard look and a

serious re-examination of these cases are in order.

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