Case Digest: First Philippine Industrial v. Court of Appeals, 300 SCRA 661, G.R. No. 125948

First Philippine Industrial v. Court of Appeals, 300 SCRA 661, G.R. No. 125948 December 29, 1998

Subject: Transportation Law

FACTS

Petitioner FPIC is a grantee of a pipeline concession under RA No. 387, as amended, to contract, install and operate oil pipelines. Its original pipeline concession was renewed by the Energy Regulatory Board in 1992. 

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. The respondent City Treasurer assessed a business tax on the petitioner amounting to P956,076.04, payable in four installments, based on the gross receipts for products pumped for the fiscal year 1993 which amounted to P181,681,151.00. FPIC paid the tax under protest in the amount of P239,019.01 for the first quarter of 1993. 

On January 20, 1994, petitioner filed a letter-protest addressed to the respondent City Treasurer, alleging exemption under Sec. 133(j) of the Local Government Code.

On March 8, 1994, the respondent City Treasurer denied the protest contending that petitioner cannot be considered engaged in transportation business because pipelines are not included in the term “common carrier” which refers solely to ordinary carriers such as trucks, trains, ships and the like. Thus, petitioner cannot claim exemption under the aforementioned provision.

RTC and CA ruled against FPIC. Hence, this petition for review on certiorari.

ISSUE

Whether or not petitioner FPIC is a common carrier.

RULING

Yes, FPIC is a common carrier.

Under the law, 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.

In this case, 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. Furthermore, the law 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 only be by motor vehicle.