1. FRANCISCO S. TATAD, JOHN H. OSMENA and RODOLFO G.

BIAZON, petitioners,
vs.
HON. JESUS B. GARCIA, JR., in his capacity as the Secretary of the Department of
Transportation and Communications, and EDSA LRT CORPORATION, LTD., respondents.

Facts: In 1989, DOTC planned to construct a light railway transit line (EDSA LRT III) along EDSA to
provide a mass transit system along EDSA and alleviate the congestion and growing transportation
problem in the metropolis.
EDSA LRT Consortium won the bidding and entered into an "Agreement to Build, Lease and Transfer a
Light Rail Transit System for EDSA" under the terms of the BOT Law.

Private respondents shall undertake and finance the entire project required for a complete operational
light rail transit system. Target completion date is 1,080 days or approximately three years from the
implementation date of the contract inclusive of mobilization, site works, initial and final testing of the
system. Upon full or partial completion and viability thereof, private respondent shall deliver the use and
possession of the completed portion to DOTC which shall operate the same DOTC shall pay private
respondent rentals on a monthly basis through an Irrevocable Letter of Credit. After of 25 years of
payment of rentals, ownership of the project shall be transferred to DOTC for a $1 consideration.

The petitioners asserted that the agreements are invalid and unconstitutional as the EDSA LRT III is a
public utility, and the ownership and operation thereof is limited by the Constitution to Filipino citizens and
domestic corporations, not foreign corporations like private respondent.

Held: What private respondent owns are the rail tracks, rolling stocks like the coaches, rail stations,
terminals and the power plant, not a public utility. While a franchise is needed to operate these facilities to
serve the public, they do not by themselves constitute a public utility. What constitutes a public utility is
not their ownership but their use to serve the public

The right to operate a public utility may exist independently and separately from the ownership of the
facilities thereof. One can own said facilities without operating them as a public utility, or conversely, one
may operate a public utility without owning the facilities used to serve the public. The devotion of property
to serve the public may be done by the owner or by the person in control thereof who may not necessarily
be the owner thereof.

Indeed, a mere owner and lessor of the facilities used by a public utility is not a public utility

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 corporations or associations organized under the laws
of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such
franchise, certificate or authorization be exclusive character or for a longer period than fifty years . . .
(Emphasis supplied).

In law, there is a clear distinction between the "operation" of a public utility and the ownership of the
facilities and equipment used to serve the public.

While private respondent is the owner of the facilities necessary to operate the EDSA. LRT III, it admits
that it is not enfranchised to operate a public utility (Revised and Restated Agreement, Sec. 3.2; Rollo, p.
57). In view of this incapacity, private respondent and DOTC agreed that on completion date, private
respondent will immediately deliver possession of the LRT system by way of lease for 25 years, during
which period DOTC shall operate the same as a common carrier and private respondent shall provide
technical maintenance and repair services to DOTC (Revised and Restated Agreement, Secs. 3.2, 5.1
and 5.2; Rollo, pp. 57-58, 61-62). Technical maintenance consists of providing (1) repair and
maintenance facilities for the depot and rail lines, services for routine clearing and security; and (2)
producing and distributing maintenance manuals and drawings for the entire system
 2. FIRST PHILIPPINE INDUSTRIAL CORPORATION, petitioner, vs. COURT OF APPEALS,
HONORABLE PATERNO V. TAC-AN, BATANGAS CITY and ADORACION C. ARELLANO, in
her official capacity as City Treasurer of Batangas, respondents.

Facts: Petitioner is a grantee of a pipeline concession under Republic Act No. 387, as amended, to
contract, install and operate oil pipelines. The original pipeline concession was granted in 1967[1] and
renewed by the Energy Regulatory Board in 1992.[2]

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 issued, the respondent City Treasurer
required petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to the
Local Government Code.

In order not to hamper its operations, petitioner paid the tax under protest in the amount of P239,019.01
for the first quarter of 1993. Petitioner argued that it is exempted under Section 133 (j) of the Local
Government Code since it is engaged in the business of transportation. Respondent contented that
petitioner is not a common carrier, hence, not exempted.

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.[15]

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.

3. LOADSTAR SHIPPING CO., INC., petitioner, vs. COURT OF APPEALS and THE MANILA
INSURANCE CO., INC., respondents.

Facts: Loadstar received on board its M/V Cherokee goods for shipment. The goods, amounting to
P6,067,178, were insured for the same amount with MIC against various risks including TOTAL LOSS BY
TOTAL LOSS OF THE VESSEL. The vessel, in turn, was insured by Prudential Guarantee & Assurance,
Inc. (hereafter PGAI) for P4 million.

On 20 November 1984, on its way to Manila from the port of Nasipit, Agusan del Norte, the vessel, along
with its cargo, sank off Limasawa Island. As a result of the total loss of its shipment, the consignee made
a claim with LOADSTAR which, however, ignored the same. As the insurer, MIC paid P6,075,000 to the
insured in full settlement of its claim

On 4 February 1985, MIC filed a complaint against LOADSTAR and PGAI, alleging that the sinking of the
vessel was due to the fault and negligence of LOADSTAR and its employees.

In its answer, LOADSTAR denied any liability for the loss of the shippers goods and claimed that the
sinking of its vessel was due to force majeure.
Issues:

(1) Is the M/V Cherokee a private or a common carrier?

Held: LOADSTAR submits that the vessel was a private carrier because it was not issued a certificate of
public convenience, it did not have a regular trip or schedule nor a fixed route, and there was only one
shipper, one consignee for a special cargo.

LOADSTAR is a common carrier. It is not necessary that the carrier be issued a certificate of public
convenience, and this public character is not altered by the fact that the carriage of the goods in question
was periodic, occasional, episodic or unscheduled.

Under the facts and circumstances obtaining in this case, LOADSTAR fits the definition of a common
carrier under Article 1732 of the Civil Code. In the case of De Guzman v. Court of Appeals,[15] the Court
juxtaposed the statutory definition of common carriers with the peculiar circumstances of that case, viz.:
The Civil Code defines common carriers in the following terms:
Article 1732. 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.

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. We think that Article
1733 deliberately refrained from making such distinctions.

Moving on to the second assigned error, we find that the M/V Cherokee was not seaworthy when it
embarked on its voyage on 19 November 1984. The vessel was not even sufficiently manned at the
time. For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a
sufficient number of competent officers and crew. The failure of a common carrier to maintain in
seaworthy condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in
Article 1755 of the Civil Code.

4. SABENA BELGIAN WORLD AIRLINES, petitioner, vs. HON. COURT OF APPEALS and MA.
PAULA SAN AGUSTIN, respondents.

Facts: On August 21, 1987, plaintiff was a passenger on board Flight SN 284 of defendant airline
originating from Casablanca to Brussels, Belgium on her way back to Manila. Plaintiff checked in her
luggage which contained her valuables, namely: jewelries valued at $2,350.00; clothes $1,500.00;
shoes/bag $150; accessories $75; luggage itself $10.00; or a total of $4,265.00, for which she was issued
Tag No. 71423. She stayed overnight in Brussels and her luggage was left on board Flight SN 284.
Plaintiff arrived at Manila International Airport on September 2, 1987 and immediately submitted her Tag
No. 71423 to facilitate the release of her luggage but the luggage was missing. The luggage was found,
but was lost the second time.

Plaintiff demanded from the defendant the money value of the luggage and its contents amounting to
$4,265.00 or its exchange value, but defendant refused to settle the claim.
The trial court rendered judgment ordering petitioner Sabena Belgian World Airlines to pay private
respondent Ma. Paula San Agustin.
Held: Art. 1733 of the [Civil] Code provides that from the very nature of their business and by reasons of
public policy, common carriers are bound to observe extraordinary diligence in the vigilance over the
goods transported by them. This extraordinary responsibility, according to Art. 1736, lasts from the time
the goods are unconditionally placed in the possession of and received by the carrier until they are
delivered actually or constructively to the consignee or person who has the right to receive them. Art.
1737 states that the common carriers duty to observe extraordinary diligence in the vigilance over the
goods transported by them remains in full force and effect even when they are temporarily unloaded or
stored in transit. And Art. 1735 establishes the presumption that if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless
they prove that they had observed extraordinary diligence as required in Article 1733.

The only exceptions to the foregoing extraordinary responsibility of the common carrier is when the loss,
destruction, or deterioration of the goods is due to any of the following causes:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
Not one of the above excepted causes obtains in this case.[

5. MONARCH INSURANCE CO., INC., TABACALERA INSURANCE CO., INC and Hon. Judge
AMANTE PURISIMA, petitioners, vs. COURT OF APPEALS and ABOITIZ SHIPPING
CORPORATION, respondents.

Facts: All cases arose from the loss of cargos of various shipppers when the M/V P. Aboitiz, a common
carrier of Aboitiz Shipping Corporation, sank on her voyage from Hongkong to Manila on October 31,
1980. The shippers, their successors in interest, and the cargo insurers filed separate suits against
Aboitiz before the RTCs.

Held: The petitioners assert in common that the vessel M/V P. Aboitiz did not sink by reason of force
majeurebut because of its unseaworthiness and the concurrent fault and/or negligence of Aboitiz, the
captain and its crew, thereby barring Aboitiz from availing of the benefit of the limited liability rule.

6. COASTWISE LIGHTERAGE CORPORATION, petitioner,

Facts: Pag-asa Sales, Inc. entered into a contract to transport molasses from the province of Negros to
Manila with Coastwise Lighterage Corporation (Coastwise for brevity), using the latter's dumb barges.
The barges were towed in tandem by the tugboat MT Marica, which is likewise owned by Coastwise.
Upon reaching Manila Bay, while approaching Pier 18, one of the barges, "Coastwise 9", struck an
unknown sunken object. The forward buoyancy compartment was damaged, and water gushed in through
a hole "two inches wide and twenty-two inches long"1 As a consequence, the molasses at the cargo tanks
were contaminated and rendered unfit for the use it was intended. This prompted the consignee, Pag-asa
Sales, Inc. to reject the shipment of molasses as a total loss. Thereafter, Pag-asa Sales, Inc. filed a
formal claim with the insurer of its lost cargo, herein private respondent, Philippine General Insurance
Company (PhilGen, for short) and against the carrier, herein petitioner, Coastwise Lighterage. Coastwise
Lighterage denied the claim and it was PhilGen which paid the consignee, Pag-asa Sales, Inc., the
amount of P700,000.00, representing the value of the damaged cargo of molasses.
In turn, PhilGen then filed an action against Coastwise Lighterage before the Regional Trial Court of
Manila, seeking to recover the amount of P700,000.00 which it paid to Pag-asa Sales, Inc. for the latter's
lost cargo.

Issues:
 1. Whether or not petitioner Coastwise Lighterage was transformed into a private carrier, by virtue of
the contract of affreightment which it entered into with the consignee, Pag-asa Sales, Inc.
2. did it exercise the ordinary diligence to which a private carrier is in turn bound?

Held: Although a charter party may transform a common carrier into a private one, the same however is
not true in a contract of affreightment on account of the aforementioned distinctions between the two.
Petitioner admits that the contract it entered into with the consignee was one of affreightment.5 We agree.
Pag-asa Sales, Inc. only leased three of petitioner's vessels, in order to carry cargo from one point to
another, but the possession, command and navigation of the vessels remained with petitioner Coastwise
Lighterage.

It follows then that the presumption of negligence that attaches to common carriers, once the goods it
transports are lost, destroyed or deteriorated, applies to the petitioner. This presumption, which is
overcome only by proof of the exercise of extraordinary diligence, remained unrebutted in this case.

Jesus R. Constantino, the patron of the vessel "Coastwise 9" admitted that he was not licensed. It cannot
safely claim to have exercised extraordinary diligence, by placing a person whose navigational skills are
questionable, at the helm of the vessel which eventually met the fateful accident. It may also logically,
follow that a person without license to navigate, lacks not just the skill to do so, but also the utmost
familiarity with the usual and safe routes taken by se zis liable for breach of the contract of carriage,
having failed to overcome the presumption of negligence with the loss and destruction of goods it
transported, by proof of its exercise of extraordinary diligence.

7. SAMAR MINING COMPANY, INC., plaintiff-appellee,

Facts: The case arose from an importation made by plaintiff, now appellee, SAMAR MINING COMPANY,
INC., of one (1) crate Optima welded wedge wire sieves through the M/S SCHWABENSTEIN a vessel
owned by defendant-appellant NORDEUTSCHER LLOYD, (represented in the Philippines by its agent,
C.F. SHARP & CO., INC.), which shipment is covered by Bill of Lading No. 18 duly issued to consignee
SAMAR MINING COMPANY, INC. Upon arrival of the aforesaid vessel at the port of Manila, the
aforementioned importation was unloaded and delivered in good order and condition to the bonded
warehouse of AMCYL. 1 The goods were however never delivered to, nor received by, the consignee at
the port of destination Davao.

Bill of Lading No. 18 sets forth in page 2 thereof 6 that one (1) crate of Optima welded wedge wire sieves
was received by the carrier NORDEUTSCHER LLOYD at the "port of loading" which is Bremen,
Germany, while the freight had been prepaid up to the port of destination or the "port of discharge of
goods in this case, Davao, the carrier undertook to transport the goods in its vessel, M/S
SCHWABENSTEIN only up to the "port of discharge from ship-Manila.

8. Maersk line v ca gr no 94761 may 17 1993

8. Ma
9. Ganzon
10. Guzman

11. ESTRELLITA M. BASCOS, petitioner, vs.

CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita M. Bascos (petitioner) doing business
under the name A.M. Bascos Trucking to deliver 400 sacks of soya bean meal from Manila to Laguna.
Petitioner failed to deliver the said cargo.

As a consequence, Cipriano paid Jibfair Shipping Agency of the amount of the lost goods and demanded
reimbursement from Bascos but the latter refused to pay, causing him to file a complaint. The lower court
rendered a decision in favor of Cipriano, which was affirmed by the Court of Appeals. The Supreme Court
is now faced with the following issues:

1. Whether or not the petitioner is a common carrier.

Held: Article 1732 of the Civil Code defines common carrier as a person, 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. The test to determine a common
carrier is whether the given undertaking is a part of the business engaged in by the carrier which he has
held out to the general public as his occupation rather than the quantity or extent of the business
transacted."

Article 1732 does not 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.

In De Guzman vs. Court of Appeals, the Court held that hijacking, not being included in the provisions of
Article 1734, must be dealt with under the provisions of Article 1735 and thus, the common carrier is
presumed to have been at fault or negligent. To exculpate the carrier from liability arising from hijacking,
he must prove that the robbers or the hijackers acted with grave or irresistible threat, violence, or force.

The presumption of negligence was raised against petitioner. It was petitioner's burden to overcome it.

Her own failure to adduce sufficient proof of extraordinary diligence made the presumption conclusive
against her.