Francisco Tatad, John Osmeña and granted except to citizens of the Philippines

Rodolfo Biazon v. Jesus Garcia, Jr. (DOTC or to corporations or associations organized

Sec.), EDSA LRT Corp. Ltd. under the laws of the Philippines at least sixty
G.R. No. 114222 April 6, 1995 per centum of whose capital is owned by such
Quiason, J. citizens, nor shall such franchise, certificate
or authorization be exclusive character or for
a longer period than fifty years.”
FACTS:  there is a distinction between the “operation”
 DOTC planned to construct a light railway of a public utility and the ownership of the
transit line along EDSA, a major thoroughfare facilities and equipment used to serve the
in Metropolitan Manila, which shall traverse public
the cities of Pasay, Quezon, Mandaluyong  ownership - a relation in law by virtue of
and Makati which a thing pertaining to one person is
 RA No. 6957 entitled “An Act Authorizing the completely subjected to his will in everything
Financing, Construction, Operation and not prohibited by law or the concurrence with
Maintenance of Infrastructure Projects by the the rights of another
Private Sector, and For Other Purposes” or  operation of a rail system as a public utility –
BOT Law provided for two schemes for the includes the transportation of passengers
financing, construction and operation of from one point to another point, their loading
government projects through private initiative and unloading at designated places and the
and investment: Build-Operate-Transfer movement of the trains at pre-scheduled
(BOT) or Build-Transfer (BT) times
 Prequalification Bids and Awards Committee  right to operate a public utility may exist
(PBAC) and the Technical Committee were independently and separately from the
created by the DOTC in relation to EDSA ownership of the facilities thereof. One can
Light Rail Transit III project own said facilities without operating them as
 only the EDSA LRT Consortium (later called a public utility, or conversely, one may
EDSA LRT Corporation, Ltd.) met the operate a public utility without owning the
requirements of PBAC facilities used to serve the public
 DOTC requested presidential approval of the  EDSA LRT Corp. Ltd. – merely the owner of
contract but then Exe. Sec. Drilon conveyed the facilities necessary to operate the EDSA
that the Pres. could not sign the same. So LRT III
DOTC and private respondents re-negotiated  on completion date of the LRT project, EDSA
the agreement. LRT Corp. Ltd. will immediately deliver
 The agreement provided inter alia that upon possession of the LRT system by way of
full or partial completion and viability thereof, lease for 25 years, during which period DOTC
private respondent shall deliver the use and shall operate the same as a common carrier
possession of the completed portion to DOTC and private respondent shall provide
which shall operate the same. technical maintenance and repair services to
 RA No. 7718 – amended RA No. 6957; it DOTC; technical maintenance consists of
expressly provides for BLT scheme and providing 1) repair and maintenance facilities
allows direct negotiation of BLT contracts for the depot and rail lines, services for
routine clearing and security; and 2)
ISSUE: WON EDSA LRT Corp., Ltd., a foreign producing and distributing maintenance
corporation can own EDSA LRT III, a public manuals and drawings for the entire system
utility  EDSA LRT Corp. Ltd. shall also train DOTC
personnel for familiarization with the
HELD: Yes. operation, use, maintenance and repair of the
 What private respondent owns are the rail rolling stock, power plant, substations,
tracks, rolling stocks like the coaches, rail electrical, signaling, communications and all
stations, terminals and the power plant, not a other equipment as supplied in the
public utility. While a franchise is needed to agreement.
operate these facilities to serve the public,  Since DOTC shall operate the EDSA LRT III,
they do not by themselves constitute a public it shall assume all the obligations and
utility. What constitutes a public utility is not liabilities of a common carrier.
their ownership but their use to serve the  BOT scheme - contractor undertakes the
public. construction and financing in infrastructure
 Sec. 11, Art. XII of the Const.: “No franchise, facility, and operates and maintains the
certificate or any other form of authorization same; contractor operates the facility for a
for the operation of a public utility shall be fixed period during which it may recover its
 expenses and investment in the project plus
a reasonable rate of return thereon; after the FACTS:
expiration of the agreed term, the contractor
transfers the ownership and operation of the  Petitioner Tawang Multi-Purpose
project to the government Cooperative (TMPC) was
 BT scheme - contractor undertakes the
construction and financing of the facility, but
organized to provide domestic
after completion, the ownership and water services in Brgy. Twang, La
operation thereof are turned over to the Trinidad, Benguet. Respondent La
government. The government, in turn, shall Trinidad Water District (LTWD) is a
pay the contractor its total investment on the government owned and controlled
project in addition to a reasonable rate of
corporation, a local water utility
return. If payment is to be effected through
amortization payments by the government created under PD No. 198,
infrastructure agency or local government authorized to supply water for
unit concerned, this shall be made in domestic, industrial and
accordance with a scheme proposed in the commercial purpose within
bid and incorporated in the contract municipality of La Trinidad,
 BLT scheme which is challenged by
petitioners is but a variation of the BT scheme Benguet.
 lease – contract where one of the parties
 October 9, 2000, TMPC filed with
binds himself to give to another the
enjoyment or use of a thing for a certain price National Water Resources Board
and for a period which may be definite or an application for Certificate of
indefinite but not longer than 99 years; no Public Convenience (CPC) to
transfer of ownership at the end of the lease operate and maintain a waterworks
period system in Brgy. Tawang LTWD
 lease-purchase agreement - parties
stipulate that title to the leased premises shall claimed that under Sec. 47 of PD
be transferred to the lessee at the end of the No. 198, as amended, its franchise
lease period upon the payment of an agreed is exclusive.
sum
 the claim that the BLT scheme and direct  August 15, 2002, the NWRB held
negotiation of contracts are not contemplated that LTWD’s franchise cannot be
by the BOT Law has now been rendered exclusive since exclusive
moot and academic by RA No. 7718 franchises are unconstitutional
 Section 3 thereof authorizes all government
infrastructure agencies, government-owned under Sec. 2, Art. XII.
and controlled corporations and local
 October 1, 2004, upon appeal of
government units to enter into contract with
any duly prequalified proponent for the LTWD to the RTC, the latter
financing, construction, operation and cancelled TMPC’s CPC and held
maintenance of any financially viable that Sec. 47 of PD No. 198 is valid;
infrastructure or development facility through that the ultimate purpose of the
a BOT, BT, BLT, BOO (Build-own-and- Constitution is for the State,
operate), CAO (Contract-add-operate), DOT
(Develop-operate-and-transfer), ROT through its authorized agencies or
(Rehabilitate-operate-and-transfer), and instrumentalities, to be able to
ROO (Rehabilitate-own-operate) keep and maintain ultimate control
and supervision over the operation
of public utilities. What is
Tawang Multi-Purpose Cooperative v.
repugnant to the Constitution is a
La Trinidad Water District
grant of franchise exclusive in
TAWANG MULTI-PURPOSE character so as to preclude the
COOPERATIVE v. LA TRINIDAD State itself from granting a
WATER DISTRICT franchise to any other person or
G.R. No. 166471, March 22, 2011 entity than the present grantee
when public interest so requires.
  November 6, 2004, RTC denied the fiscal year 1993 pursuant to
the motion for reconsideration filed the Local Government Code. It
by TMPC. paid the tax under protest.
 It filed a complaint for tax refund
ISSUE: alleging that 1) the imposition and
collection of the business tax on its
Whether RTC erred in holding that Sec.
gross receipts violates Section 133
47 of PD No. 198 is valid
of the Local Government Code
which grants tax exemption to
HELD: common carriers; 2) the authority
of cities to impose and collect a tax
Yes, the Supreme Court ruled in favor of on the gross receipts of
petitioner. Quando aliquid prohibetur ex “contractors and independent
directo, prohibetur et per obliquum – contractors” under Sec. 141 (e)
Those that cannot be done directly cannot and 151 does not include the
be done indirectly. Under Sec. 2 and 11, authority to collect such taxes on
Art. XII of the 1987 Constitution, The transportation contractors for, as
President, Congress, and Court cannot defined under Sec. 131 (h), the
create indirectly franchises that are term “contractors” excludes
exclusive in character by allowing the transportation contractors; and, 3)
Board of Directors (BOD) of a water the City Treasurer illegally and
district and Local Water Utilities erroneously imposed and collected
Administration (LWUA) to create the said tax, thus meriting the
franchises that are exclusive in character. immediate refund of the tax paid.
Sec. 47 of PD no. 198 is in conflict with
the above-mentioned provision of the ISSUES: 1. WON FPIC is a common
Constitution. And the rule is that in case of carrier; 2. WON it is exempted from
conflict between the Constitution and a paying the taxes required by the City
statute, the former prevails, because the Treasurer
constitution is the basic law to which all HELD: 1. Yes. FPIC is engaged in the
other laws must conform to.
business of transporting or carrying
First Philippine Industrial Corp. v. CA, goods, i.e. petroleum products, for hire as
Paterno Tac-an, Bantangas City, and a public employment. It undertakes to
Adoracion Arellano (treasurer of carry for all persons indifferently, that is, to
Batangas) all persons who choose to employ its
services, and transports the goods by land
G.R. No. 125948 December 29, 1998 and for compensation.
FACTS:  common carrier - holds himself out
 FPIC – grantee of a pipeline to the public as engaged in the
concession under Republic Act No. business of transporting persons
387, as amended, to contract, or property from place to place, for
install and operate oil pipelines compensation, offering his
services to the public generally
 It applied for a mayor’s permit with (see also Art. 1732)
the Office of the Mayor of
Batangas City. Before the permit  test for determining whether a
could be issued, it was required by party is a common carrier of
the City Treasurer to pay a local goods:
tax based on its gross receipts for
 a. engaged in the business of 1416, as amended, otherwise
carrying goods for others as a known as the Public Service Act)
public employment, and must hold
 FPIC - considered a common
himself out as ready to engage in
carrier under Art. 86 of the
the transportation of goods for
Petroleum Act of the Philippines
person generally as a business
(RA 387), which provides that: Art.
and not as a casual occupation;
86. Pipe line concessionaire as
 b. undertakes to carry goods of the common carrier. — A pipe line
kind to which his business is shall have the preferential right to
confined utilize installations for the
transportation of petroleum owned
 c. undertakes to carry by the
by him, but is obligated to utilize
method by which his business is
the remaining transportation
conducted and over his
capacity pro rata for the
established roads
transportation of such other
 d. transportation is for hire petroleum as may be offered by
others for transport, and to charge
 common service coincides with without discrimination such rates
public service as may have been approved by
 public service – includes every the Secretary of Agriculture and
person that now or hereafter may Natural Resources.
own, operate. manage, or control  FPIC is also a public utility
in the Philippines, for hire or pursuant to Art. 7 of RA 387 which
compensation, with general or states that “everything relating to
limited clientele, whether the exploration for and exploitation
permanent, occasional or of petroleum . . . and everything
accidental, and done for general relating to the manufacture,
business purposes, any common refining, storage, or transportation
carrier, railroad, street railway, by special methods of petroleum,
traction railway, subway motor is hereby declared to be a public
vehicle, either for freight or utility”
passenger, or both, with or without
fixed route and whatever may be  2. Yes. Legal basis is Section 133
its classification, freight or carrier (j), of the Local Government Code
service of any class, express which provides that “Unless
service, steamboat, or steamship otherwise provided herein, the
line, pontines, ferries and water exercise of the taxing powers of
craft, engaged in the transportation provinces, cities, municipalities,
of passengers or freight or both, and barangays shall not extend to
shipyard, marine repair shop, the levy of the following: Taxes on
wharf or dock, ice plant, ice- the gross receipts of transportation
refrigeration plant, canal, irrigation contractors and persons engaged
system gas, electric light heat and in the transportation of passengers
power, water supply and power or freight by hire and common
petroleum, sewerage system, wire carriers by air, land or water,
or wireless communications except as provided in this Code”.
systems, wire or wireless
 Reason for the exception: to avoid
broadcasting stations and other
duplication of tax
similar public services (CA No.
 Vlasons Shipping Inc v. CA plaintiff as charterer under the
GR no. L-112350 charter party. The trial court
 Facts: ruled in favor of VSI; it was
 National Steel Corporation affirmed by the CA on appeal.
(NSC) as Charterer and  ISSUE: Whether or not Vlazons
Vlasons Shipping, Inc. (VSI) as is a private carrier so that it is
Owner, entered into a Contract free from liabilities re the
of Voyage Charter Hire damages incurred by NSC with
(Affreightment) whereby NSC respect to its cargoes.
hired VSI‟s vessel, the MV  HELD:
„VLASONS I‟ to make one (1)  Yes. In the instant case, it is
voyage to load steel products at undisputed that VSI did not offer
Iligan Cityand discharge them at its services to the general
North Harbor, Manila. VSI public. As found by the
carried passengers or goods Regional Trial Court, it carried
only for those it chose under a passengers or goods only for
“special contract of charter those itchose under a “special
party.”The vessel arrived with contract of charter party.” As
the cargo in Manila, butwhen correctly concluded by the
the vessel‟s three (3) hatches Court of Appeals, the MV
containing the shipment were Vlasons I “was not a common
opened, nearly all the skids oftin but a private carrier.”
plates and hot rolled sheets Consequently, the rights and
were allegedly found to be wet obligations of VSI and NSC,
and rusty. NSC filed its including their respective liability
complaint against defendant for damage to the cargo, are
before the CFI wherein it determined primarily by
claimed that it sustained losses stipulations in their contract of
as a result of the “act,neglect private carriage or charter party.
and default of the master and Recently, in Valenzuela
crew in the management of the Hardwood and Industrial
vessel as well as the want of Supply, Inc., vs. Court of
due diligence on the part of the Appeals and Seven Brothers
defendant to make the vessel Shipping Corporation, the Court
seaworthy …-- all in violation of ruled:
defendant‟s undertaking under  “ x x x [I]n a contract of private
their Contract of Voyage carriage, the parties may freely
Charter Hire.” stipulate their duties and
 In its answer, defendant denied obligations which perforce
liability for the alleged damage would be binding on them.
claiming that the MV Unlike in a contract involving a
„VLASONS I‟ was seaworthy in common carrier, private
all respects for the carriage of carriage does not involve the
plaintiff‟s cargo; that said vessel general public. Hence, the
was not a „common carrier‟ stringent provisions of the Civil
inasmuch as she was under Code on common carriers
voyage charter contract with the
 protecting the general public TMBI notified Sony of the loss
cannot justifiably be applied to a through a letter dated October 10, 2000. It
ship transporting commercial also sent BMT a letter dated March 29,
goods as a private carrier. 2001, demanding payment for the lost
shipment. BMT refused to pay, insisting
Consequently, the public policy
that the goods were "hijacked."
embodied therein is not
contravened by stipulations in a In the meantime, Sony filed an
charter party that lessen or insurance claim with the Mitsui, the insurer
remove the protection given by of the goods. Mitsui paid P7,293,386.23 for
law in contracts involving the value of the lost goods and became
common carriers.” subrogated to Sony’s rights. Mitsui then
sent TMBI a demand letter dated August
Title Torres-Madrid Brokerage, Inc. 30, 2001 for payment of the lost goods.
vs. FEB Mitsu Marine TMBI refused to pay Mitsui’s claim, thus,
: Insurance Co., Inc. and Mitsui filed a complaint against TMBI.
Benjamin P. Manalastas TMBI, in turn, impleaded Benjamin
GR G.R. No. 194121 Manalastas, the proprietor of BMT, as a
No. third-party defendant. TMBI prayed that in
the event it is held liable to Mitsui for the
Date July 11, 2016 loss, it should be reimbursed by BMT.
The RTC found TMBI and Benjamin
Principle A brokerage may be Manalastas jointly and solidarily liable to
considered a common carrier pay Mitsui P7,293,386.23 as actual
: if it also undertakes to deliver damages, attorney’s fees and the costs of
the goods for its customers the suit. The RTC held that TMBI and
Manalastas were common carriers and had
FACTS acted negligently. Both TMBI and BMT
appealed the RTC’s verdict.
On October 7, 2000, a shipment of
various electronic goods from Thailand and The CA affirmed the RTC’s decision
Malaysia arrived at the Port of Manila for but reduced the award of attorney’s fees.
Sony Philippines, Inc. (Sony). Previous to TMBI disagreed with the CA’s ruling and
the arrival, Sony had engaged the services filed the present petition for review on
of TMBI to facilitate, process, withdraw, certiorari.
and deliver the shipment from the port to its
TMBI denies being a common
warehouse in Biñan, Laguna.
carrier because it does not own a single
truck to transport its shipment and it does
not offer transport services to the public for
TMBI, with the acquiescence of compensation. It also argued hat the
Sony, subcontracted the services of hijacking was a fortuitous event which
Benjamin Manalastas’ company, BMT should exonerate it. BMT claimed that it
Trucking Services (BMT), to transport the had exercised extraordinary diligence over
shipment from the port to the Biñan the lost shipment, and argued as well that
warehouse. the loss resulted from a fortuitous event.
On October 9, four trucks set out to ISSUE: Whether TMBI is a common carrier
deliver the goods but only three arrived at
Sony’s Biñan warehouse. It appeared that HELD Yes. In A.F. Sanchez Brokerage
the truck driven by Rufo Reynaldo Inc. v. Court of Appeals, the Court held that
Lapesura (NSF-391) was hijacked. a customs broker – whose principal
business is the preparation of the correct This does not necessarily mean,
customs declaration and the proper then, that TMBI must absorb the loss. By
shipping documents – is still considered a subcontracting the cargo delivery to BMT,
common carrier if it also undertakes to TMBI entered into its own contract of
deliver the goods for its customers. The law carriage with a fellow common carrier.
does not distinguish between one whose
The cargo was lost after its transfer
principal business activity is the carrying of
to BMT's custody based on its contract of
goods and one who undertakes this task
carriage with TMBI. Following Article 1735,
only as an ancillary activity.
BMT is presumed to be at fault. Since BMT
Despite TMBI’s present denials, the failed to prove that it observed
Court found that the delivery of the goods extraordinary diligence in the performance
is an integral, albeit ancillary, part of its of its obligation to TMBI, it is liable to TMBI
brokerage services. TMBI admitted that it for breach of their contract of carriage.
was contracted to facilitate, process, and
In these lights, TMBI is liable to
clear the shipments from the customs
Sony (subrogated by Mitsui) for breaching
authorities, withdraw them from the pier,
the contract of carriage. In tum, TMBI is
then transport and deliver them to Sony’s
entitled to reimbursement from BMT due to
warehouse in Laguna.
the latter's own breach of its contract of
That TMBI does not own trucks and carriage with TMBI. The proverbial buck
has to subcontract the delivery of its clients’ stops with BMT who may either: (a) absorb
goods, is immaterial. As long as an entity the loss, or (b) proceed after its missing
holds itself to the public for the transport of driver, the suspected culprit, pursuant to
goods as a business, it is considered a Article 2181.
common carrier regardless of whether it
owns the vehicle used or has to actually
hire one.
Lastly, TMBI’s customs brokerage
services – including the transport/delivery
of the cargo – are available to anyone
willing to pay its fees. Given these
circumstances, it is undeniable that TMBI is
a common carrier.
Despite the subcontract, TMBI
remained responsible for the cargo. Under
Article 1736, a common carrier’s
extraordinary responsibility over the
shipper’s goods lasts from the time these
goods are unconditionally placed in the
possession of, and received by, the carrier
for transportation, until they are delivered,
actually or constructively, by the carrier to
the consignee.48
That the cargo disappeared during
transit while under the custody of BMT –
TMBI’s subcontractor – did not diminish nor
terminate TMBI’s responsibility over the
cargo. Article 1735 of the Civil Code
presumes that it was at fault.