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TRANSPORTATION: COMMON CARRIERS - Coggle Diagram

- - - - TEST FOR COMMON CARRIER OF GOODS
        Test for determining whether a party Is a common carrier of goods
        
        Must be engaged in the business of carrying goods for others as a public employment, and
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        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;
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        Must undertake to carry goods of the kind to which his business is confined;
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        Must undertake to carry by the method by which his business is conducted and over his established roads; and
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        The transportation must be for hire
        
        THERE IS A CATEGORY OF COMMON CARRIER EXEMPT FROM LOCAL TAXES
        When FPIC (a pipeline concessionaire) was applying for a Mayor’s permit in Batangas City, the city treasurer required him to pay local taxes, to which FPIC complied with in protest.
        Thus, FPIC filed this case arguing that it is exempt from paying taxes on gross receipts pursuant to the exemption found in Section 133(j) of the Local Government Code. On the other hand, the city treasurer is arguing that FPIC does not fall within the category of a common carrier exempted from local taxes.
        The Supreme Court ruled in favor of FPIC, stating that it is indeed a common carrier.
        It said that FPIC is
        
        transporting petroleum products as public employment,
        
        it carries for all persons who choose to use its services, and
        
        it transports the goods by land and for compensation.
        
        COMMON CARRIERS MAY EITHER BE MOTORIZED OR NOT; THE LAW DOES NOT DISTINGUISH SO LONG AS IT TRAVELS BY LAND, WATER, OR AIR
        The SC further noted that the definition of a “common carrier” in the Civil Code does not make a distinction as to the means of transporting (whether motorized or not) as long as it is by land, water, or air.
        (FIRST PHIL. INDUSTRIAL CORP. V. CA, 1998)
  - - - PUBLIC UTILITY DEFINED
        The term "public utility" is hereby defined to include
        every individual, co-partnership, association, corporation or joint stock company, their lessees, trustees or receivers appointed by any court whatsoever,
        that now or hereafter may own, operate, manage or control within the Philippine Islands
        any steam railroad, street railway, traction railway, canal, express, subway, pipe line, gas, electric light, heat, power, water, oil, sewer, telephone, telegraph system, plant, or equipment
        for public use,
        under privileges granted or hereafter to be granted
        by the Government of the Philippine Islands or by any political subdivision thereof."
        (Act No. 2307, Section 14)
        
        PUBLIC USE = NOT CONFINED TO
        PRIVILEGE OF INDIVIDUALS BUT IS
        OPEN TO THE INDEFINITE PUBLIC
        Public Use: The essential feature of the public use is that it is not confined to privilege individuals, but is open to the indefinite public. It is this indefinite or unrestricted quality that gives it its public character.
        
        SPECIAL CONTRACT TO OPERATE FOR PRIVILEGED INDIVIDUALS = NOT OPERATED FOR PUBLIC
        Tan Piaco was convicted under Act 2307 (Public Utility Law) for operating a public utility without permission from the public utility commissioner.
        Tan Piaco argued that his acts – renting of trucks and carrying of passengers and freights under a special contract – did not make his services one that is a public utility.
        The Supreme Court ruled in favor of Tan Piaco stating that he was not operating as a public utility.
        Due to the fact that his clients operate under a special contract and he operates only for “privileged” individuals (not for any and all people), his services cannot be categorized as one for public use.
        (US v. Tan Piaco, 1920)
        
        PUBLIC USE vs PUBLIC SERVICE?
        What is the true distinction between the two?
    - - PUBLIC SERVICE DEFINITION
        “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, sub-way motor vehicle, either for freight or passenger, or both
        with or without fixed route and
        whether may be its classification, freight or carrier service of any class, express service, steamboat or steamship line, pontines, ferries, and water craft,
        engaged in the transportation of passengers or freight or both,
        shipyard, marine railways, marine repair shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services:
        
        THIRD PARTIES' TRANSPO, PROCESSING, AND MARKETING OF AGRI PRODUCTS ARE NOT CONSIDERED PUBLIC SERVICE
        Provided, however, That
        a person engaged in agriculture, not otherwise a public service,
        who owns a motor vehicle AND
        uses it personally
        AND/OR enters into a special contract
        whereby said motor vehicle is offered for hire or compensation
        to a third party or third parties engaged in agriculture,
        not itself or themselves a public service,
        for operation by the latter for a limited time AND
        for a specific purpose directly connected with the cultivation of his or their farm,
        the transportation, processing, and marketing of agricultural products of such third party or third parties shall not be considered as operating a public service for the purposes of this Act.”
        
        NOT COMMON CARRIERS? LIMITED CLIENTELE
        The law includes the enumeration after "common carrier", possibly implying that the enumerated are not common carriers but are deemed for public service
        railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger
        
        COMMON CARRIERS MAY HAVE LIMITED CLIENTELE
        Given the breadth of the aforequoted characterization of a common carrier, the Court has considered as common carriers pipeline operators, 18 custom brokers and warehousemen, 19 and barge operators 20 even if they had limited clientèle.
        (Spouses Pereña v. Spouses Zarate, G.R. No. 157917, [August 29, 2012], 693 PHIL 373-399)
        
        "WITH OR WITHOUT FIXED ROUTE"
        EVEN WITH NO FIXED OR PUBLICLY KNOWN ROUTE, TERMINALS, TICKETS, A COMMON CARRIER IS SUCH IF IT OFFERS ITS SERVICES TO THE PUBLIC
        Prudential Guarantee (Asia Lighterage's insurer) filed a complaint for a sum of money against Asia Lighterage after the former paid General Milling Corporation when AL’s barge containing GMC’s products sunk.
        AL is arguing that they are not liable because they are not a common carrier, thus, it is not expected to exercise extraordinary diligence, but rather mere due diligence.
        The Supreme Court ruled against AL.
        Here, even though AL argued that it is a private carrier because it has no fixed and publicly known route, no terminals, and issues no tickets, the SC said that the law (Article 1732, NCC) does not distinguish between a carrier offering its services to the general public, and one who offers them to a narrow segment.
        The fact AL offers its barges to the public for carrying goods by water for compensation makes it a common carrier expected to exercise extraordinary diligence
        (Asia Lighterage v. CA, 2003)
  - - - BUT IF CHARTER INCLUDES BOTH VESSEL AND CREW, THEN COMMON CARRIER BECOMES PRIVATE
        It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned.
        Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property of the charterer.
        
        HERE, THE CHARTER WAS A VOYAGE CHARTER NOT INCLUDING THE CREW; HENCE, IT REMAINED A COMMON CARRIER
        Conformably, petitioner remains a common carrier notwithstanding the existence of the charter agreement with the Northern Mindanao Transport Company, Inc. since the said charter is limited to the ship only and does not involve both the vessel and its crew.
        As elucidated in Planters Products, its charter is only a voyage-charter, not a bareboat charter.||| (Loadstar Shipping Co., Inc. v. Pioneer Asia Insurance Corp., G.R. No. 157481, [January 24, 2006], 515 PHIL 615-625)
    - - BURDEN OF PROOF IS ON COMMON CARRIER TO SHOW IT OBSERVED ED TO AVOID RESPONSIBILITY FOR LOST CARGO
        Petitioner therefore has the burden of proving that it observed extraordinary diligence in order to avoid responsibility for the lost cargo.
        In Compania Maritima v. Court of Appeals, we said:... it is incumbent upon the common carrier to prove that the loss, deterioration or destruction was due to accident or some other circumstances inconsistent with its liability. . . .
        
        WHEN CC HAS EXERCISED ED:
        The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for safe carriage and delivery.
        It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristics of goods tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their nature requires."
        (Loadstar Shipping Co., Inc. v. Pioneer Asia Insurance Corp., G.R. No. 157481, [January 24, 2006], 515 PHIL 615-625)
        
        INSTANCES WHEN CC IS
        EXEMPT FROM LIABILITY
        Article 1734 enumerates the instances when a carrier might be exempt from liability for the loss of the goods. These are:
        
        NATURAL DISASTER
        Flood, storm, earthquake, lightning, or other natural disaster or calamity;
        
        PUBLIC ENEMY'S ACT IN WAR
        Act of the public enemy in war, whether international or civil;
        
        SHIPPER/OWNER'S ACT/OMISSION
        Act or omission of the shipper or owner of the goods;
        
        GOODS - The character of the goods or defects in the packing or in the containers; and
        
        ORDER/ACT OF COMPETENT PUBLIC AUTHORITY
        Order or act of competent public authority.||| (Loadstar Shipping Co., Inc. v. Pioneer Asia Insurance Corp., G.R. No. 157481, [January 24, 2006], 515 PHIL 615-625)
  - - - CC -> PUBLIC SERVICE PROVIDER
        The concept of a common carrier touches upon public utility under the Public Service Act. Thus, a common carrier who’s in the business of transporting people or goods is considered as a public service provider.
        Transportation is considered a public utility as it is imbued with public interest for the purpose of public use or service.
        
        TEST OF COMMON CARRIER
        
        CLASSES OF COMMON CARRIER
        
        NCC: COMMON CARRIERS DEFINED
        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.
        (Article 1732, NCC)
        
        NCC: EXTRAORDINARY VIGILANCE
        Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.
        Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.
        (ARTICLE 1733, NCC)
        
        NCC: ED OF CC EXPLAINED
        A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.
        (ARTICLE 1755, NCC)
        
        NATURE OF FRANCHISE, BUSINESS, POWER OF STATE TO REGULATE
        
        RIGHT OF STATE TO REGULATE PUBLIC UTILITIES IS FOUNDED ON POLICE POWER
        The right of the state to regulate public utilities is founded upon police power, and statutes for the control and regulation of utilities are a legitimate exercise thereof, for the protection of the public as well as of the utilities themselves.
        
        A CPC CONFERS NO PROPERTY RIGHT, NEITHER A FRANCHISE NOR CONTRACT. IT IS
        MERE LICENSE OR PRIVILEGE
        In light of authorities which hold that a certificate of public convenience constitutes neither a franchise nor contract, a CPC confers no property right, and is mere license or privilege.
        
        1 more item...
        
        SCOPE OF FRANCHISE
        
        A FRANCHISE CAN HAVE A RESTRICTIVE SCOPE.
        "INTERCOASTAL TRADE" MAY BE OUTSIDE OF "FERRYING"
        PANTRANCO started operating a ferry service – carrying passenger buses from Matnog, Sorsogon and Allen, Samar – under the same franchise for bus operation in the highway from Pasay City and Tacloban City.
        This practice was opposed by Epitacio San Pablo and Cardinal Shipping Corporation, who are franchise holders of the ferry service in the area claiming that they adequately service PANTRANCO for their ferrying needs.
        The Supreme Court ruled against PANTRANCO stating that the activities did was not part of the franchise granted to it, because their activities fall under the category of an “intercoastal trade” rather than the more restricted term “ferrying.”
        Thus, PANTRANCO needs to apply for a separate Certificate of Public Convenience should it plan to continue operating its services.
        
        NATURE AND BASIS OF LIABILITY
        
        3 more items...
        
        COMMON CARRIERS ARE SUCH, NO MATTER THE MEANS OF TRANSPORTING
        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. In fact, in the United States, oil pipeline operators are considered common carriers.
        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.
- - - - May such diligence be lowered?
        NO.
        
        EXTRAORDINARY DILIGENCE MAY NOT BE LESSENED BY STIPULATION
        No device, whether by stipulation, posting of notices, statements on tickets, or otherwise, may dispense with or lessen the responsibility of the common carrier as defined under Article 1755 of the Civil Code.
        (Spouses Pereña v. Spouses Zarate, G.R. No. 157917, [August 29, 2012], 693 PHIL 373-399)