transportation LAW

A.Y. 2018-2019
CASE TITLE: FIRST PHILIPPINE INDUSTRIAL CORPORATION VS. COURT OF APPEALS
G.R. NO/DATE: G.R. No. 125948. December 29, 1998
COMMON CARRIERS: The Civil Code makes no distinction as to the means of
DOCTRINE: transporting, as long as it is by land, water or air. It does not provide that the
transportation of the passengers or goods should be by motor vehicle.

FACTS:
Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in
January 1995, petitioner applied for mayor’s 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.

1
 transportation LAW
A.Y. 2018-2019

Furthermore, the definition of "common carriers" in the Civil Code makes no distinction as to the
means of transporting, as long as it is by land, water or air. It does not provide that the
transportation of the passengers or goods should be by motor vehicle.