First Philippine Industrial Corp.
vs CA Case Digest
First Philippine Industrial Corp. vs. Court of Appeals
300 SCRA 661, 1998
Facts: Petitioner is a grantee of a pipeline concession under R.A. No. 387, as
amended, a contract, install and operate oil pipelines. The original pipeline concession
was granted in 1967 and 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 Treasure assessed a business tax on the petitioner amounting to
P956,076.04 payable in four installments based on the gross receipts for products
pumped at GPS-1 for the fiscal year 1993 which amounted to P181,681,151.00. 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.
On June 15, 1994, petitioner filed with the RTC of Batangas City a complaint for tax
refund with prayer for writ of preliminary injunction against respondents City of Batangas
and Adoracion Arellano in her capacity as City Treasurer. In its complaint, petitioner
alleged, inter alia, that: (1) the imposition and collection of the business tax on its gross
receipts violates Sec. 133 of the Local Government Code; (2) the authority of cities to
impose and collect a tax on the gross receipts of “contractors and independent
contractors” under Sec. 141(e) and 151 does not include the authority to collect such
taxes on transportation contractors for, as defined under Sec. 131(h), the term
“contractors” excludes transportation contactors; and (3) the City Treasurer illegally and
erroneously imposed and collected the said tax, thus meriting the immediate refund of
the tax paid.
Traversing the complaint, the respondents argued that petitioner cannot be exempt from
taxes under Sec. 133 (J) of the Local Government Code as said exemption applied only
to “transportation contractors and persons engaged in the transportation by hire and
common carriers by air land and water.” Respondents assert that pipelines are not
included in the term “common carrier” which refers solely to ordinary carriers as trucks,
trains, ships and the like. Respondents further posit that the term “common carrier”
under the said Code pertains to the mode or manner by which a product is delivered to
its destination.
Issue: Whether or not the petitioner is a common carrier so that in the affirmative, he is
not liable to pay the carriers tax under the Local Government Code of 1991?
Held: Petitioner is a common carrier.
A “common carrier” may be defined, broadly, as one who holds himself out to the public
as engaged in the business of transporting persons or property from place to place, for
compensation, offering his services to the public generally.
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 carrying of goods for others as a public employment, and
must hold himself out as ready to engage in the transportation of goods or persons
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.
Cruz vs. Sun Holidays
622 SCRA 389
Facts:
In 2000 newly weds Ruelito and his wife brought a package tour
contract from Sun Holidays. The tour was scheduled from September 9-
11, 2016 inclusive of transportation to and from the resort. On the last
day, due to heavy rains the day before and heavy winds, the couple
along with other guests trekked to the other side of the beach where
they boarded M/B Coco Beach III. Shortly after the boat sailed, it
started to rain and when the reached the open seas the wind got
stronger causing the boat to tilt from side to side and eventually
capsized putting all passengers underwater. Ruelito and his wife
perished from the accident which, prompted his parents to fled a
complaint for damages against Sun Holidays alleging that the latter
failed to observed extraordinary diligence as common carrier in
allowing the boat to sail despite a storm warning. Sun Holidays denied
responsibility claiming that they are not a common carrier hence they
are only required to observe ordinary diligence and the accident was
due to a fortuitous event.
Issue:
W/N Sun Holidays is a common carrier within the ambit of the law
hence liable for damages.
Ruling:
YES. Article 1732 of the Civil Code defning “common carriers”
has deliberately refrained from making distinctions on whether the
carrying of persons or goods is the carrier’s principal business, whether
it is offered on a regular basis, or whether it is offered to the general
public. The intent of the law is thus to not consider such distinctions.
Otherwise, there is no telling how many other distinctions may be
concocted by unscrupulous businessmen engaged in the carrying of
persons or goods in order to avoid the legal obligations and liabilities of
common carriers.
The evidence shows that PAGASA issued 24-hour public weather
forecasts and tropical cyclone warnings for shipping on September 10
and 11, 2000 advising of tropical depressions in Northern Luzon, which
would also affect the province of Mindoro. By the testimony of Dr.
Frisco Nilo, supervising weather specialist of PAGASA, squalls are to be
expected under such weather condition.
A very cautious person exercising the utmost diligence would
thus not brave such stormy weather and put other people’s lives at
risk. The extraordinary diligence required of common carriers demands
that they take care of the goods or lives entrusted to their hands as if
they were their own. This respondent failed to do.
Torres Madrid Brokerage Inc. vs Feb Mitsui and BMT
Facts:
Sony engaged the services of Torres Madrid Brokerage (TMBI) to facilitate, process, withdraw, and
deliver the shipment of various electronic goods from Thailand at the port to its warehouse in Biñan,
Laguna.
TMBI subcontracted the services of Benjamin Manalastas’ company, BMT Trucking services (BMT) to
transport the shipment as they do not own any delivery trucks. TMBI notified Sony and had no
objections of the arrangement.
4 BMT trucks picked up the shipment from the port on Oct. 7, 2000 but due to the truck ban they could
not undertake delivery immediately and bec the ff. Day was Sunday. BMT scheduled delivery on Oct. 9
2000. October 9 early morning however, only 3 trucks arrived at Sony’s Biñan warehouse. The 4th truck
was seen abandoned along Diversion Road in Filinvest, Alabang, Muntinlupa City at 12noon wherein
both the driver Rufo Lapesura and the shipments were missing.
Victor Torres, TMBI’s general manager, filed with NBI against Lapesura for’hijacking’
TMBI notified Sony of the loss and sent BMT a letter demanding payment for the lost shipment. BMT
refused so insisting the goods were ‘hijacked,’.
SONY filed an insurance claim with the Mitsui, the insurer of goods. Mitsui paid Sony P7,293,386.23.
After being subrogated to Sony’s rights, Mitsui sent TMBI a demand letter for payment of the lost goods.
TMBI refused to pay. Mitsui then filed a complaint against TMBI. TMBI impleaded BMT as a 3rd party
defendant, alleging BMT’s driver responsible and claimed BMT’s negligence as the proximate cause.
TMBI prayed that in te event it is held liable to Mitsui, it should be reimbursed by BMT.
RTC found BMT and TMBI jointly and solidarily liable. That they have been doing business since early
80’s and the same incident happened on Sony’s cargo in 1997 but neither sony nor its insurer filed a
complaint.
BMT AND TMBI appealed.
TMBI denied that it was a common carrier required to exercise extraordinary diligence and that ‘hijack’
is a fortuitous event.
BMT claimed that it exercised extraordinary diligence and ye loss result from a forfuitous event.
Issue:
1. WON TMBI is a common carrier engaged in the business of transporting goods for the
general public for a fee
2. WON TMBI and BMT are solidarily liable to MITSUI
3. WON BMT is directly liable to Sony or Mitsui
4. WON BMT is liable to TMBI for breach of their contract of carriage
Ruling:
1.A brokerage may be considered a common carrier if it also undertakes to deliver the goods for its
customers. Common carriers are persons, corporations, firms or associations engaged in the business of
transporting passengers or goods or both, by land, water, or air, for compensation, offering their
services to the public. They are bound to observe extraordinary diligence for reasons of public policy in
the vigilance over the goods and in rhe safety of their passengers. The law does not disringuish between
one whose principal business activity is the carrying of goods and one who undertakes this task only as
an ancillary activity.TMBI’s delivery of the goods is an integral, albeit ancillary, part of its brokerage
services. As long as an entity holds itself to the public for the transport of goods as a business, it os
considered a common carrier regardless of whether it owns a vehicle or has actually to hire one.
Consequently, as in the case of theft or robbery of goods,, a common carrier is presumed to have been
at fault or to have acted negligently, unless it can prove that it observed extraordinary diligence. And
that a robbery attended by grave or irresistble threat, violence or force is a fortuitous event that
absolves the common carrier from liability.
In the present case, despite the subcontract, TMBI remained responsible for the cargo. Under Article
1763, a common carrier’s extraordinary responsibility 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.TMBI simply argued that it was not a
common carrier bound to observe extraordinary diligence. Its failure to successfully establish this
premise carries with it the presumption of fault thus rendering it liably to Sony or Mitsui for breach of
contract
2.NO. TMBI’s liability to Mitsui does not stem from a quasi delict but from its breach of contract. Th e tie
that binds TMBI with Mitsui is contractual, albeit one that oassed on to Mitsui as a result of TMBI’s
contract of carriage with Sony to which Mitsui had been subrogated as an insurer. The legal reality that
results from this contractual tie precludes the application of quasi- delict
3.No. There is no direct contractual relationship existed between Sony/Mitsui. Mitsui did not even sue
BMT, much less prove any negligence on its part. There is no basis to directly hold BMT Liable to Mitsui
for quasi-delict
4.YES. By subcontracting the delivery, TMBI entered into its ownc contract of carriage with a fellow
common carrier. The cargo was lost after is transfer to BMT’s custody based on its contract with TMBI.
Following Article 1735, BMT Is presumed to be at fault.Since BMT failed to provethat it observed
extraordinary diligence, it is liable to TMBI for breach of their contract of carriage
TMBI is liable to Sony/Mitsui for breaching the contract of carriage. In turn, TMBI is entitled to
reimbursement from BMT due to the latter’s won breach of its contract of carriage with TMBI
Abdullahi vs. Pfizer Case Case Digest
Facts:
A group of Nigerian children and their guardians alleged that Pfizer experimented on 200 children
suffering from meningitis without their consent or knowledge. At the time of the 1996 meningitis
epidemic in northern Nigeria, Pfizer was attempting to obtain Food and Drug Administration (FDA)
approval for a new antibiotic Trovafloxacin Mesylate (Trovan). The complainants further alleged
that Pfizer purposefully under-dosed the children treated with the well-established and FDA-
approved drug Ceftriaxone in order to skew the trial results in favour of Trovan. 11 children died as
a result of the trial and many others were left blind, paralysed or brain-damaged.
The complainants filed a claim under the Alien Tort Statute (ATS) grounded in the prohibitions of
the Nuremberg Code, the World Medical Association's Declaration of Helsinki, the guidelines of the
Council for International Organisations of Medical Services and the International Covenant on Civil
and Political Rights which categorically forbid medical experimentation without consent.
Pfizer filed a motion to dismiss for failure to state a claim under the ATS which the United States
District Court granted for lack of subject matter jurisdiction under the ATS.
Issue: Whether or not the prohibition on medical experimentation on non-consenting human
subjects is covered by the Alien Tort Statute.
Ruling:
Although the US has not ratified or adopted the above international instruments, the ATS provides
that District Courts have jurisdiction in civil actions committed in contravention of the law of
nations, or customary international law. The Second Circuit Court of Appeal held that the restriction
on medical experimentation without consent is a norm of international law and is capable of being
enforced under the ATS. The case was subsequently referred back to the District Court for further
proceedings.
The Court held that the three-part test to determine whether the restriction was an obligation
under customary international law was satisfied. The test required the restriction to be (1)
universal in nature; (2) specific and definable; and (3) of mutual concern. The Court gave the
following reason for each strand of the test:
(1) The legal principles of the Nuremberg Code and the International Convention on Civil and
Political Rights are examples of the normality and universality of this restriction;
(2) The allegations stated that Pfizer carried out these experiments knowingly and purposefully
which went beyond a simple isolated case of failing to obtain consent, and would therefore be
clearly covered by the restriction on experimentation on non-consenting human beings; and
(3) The case was of mutual concern to both the US and Nigeria as such conduct could foster distrust,
reduce co-operation between nations and generate substantial anti-American feeling in the region.
Impact:
In July 2009, Pfizer petitioned the US Supreme Court to appeal this ruling. In November, the
Supreme Court asked the US Solicitor General to file a brief, which he did in May 2010, denying
Pfizer's petition. On 23 February 2011, the parties announced that they had reached a confidential
settlement in the lawsuit.
Following various proceedings in Nigeria, Pfizer and the Kano state government came to an out-of-
court settlement worth $75 million in August 2009. A new lawsuit was filed by the victims in
November 2013 in the Federal High Court in Kano who complained that, by restricting the criteria
for compensation, Pfizer had breached the terms of the 2009 agreement. In November 2014, Pfizer
paid out full and final compensation to the 14 victims who passed the DNA tests in accordance with
the terms of the 2009 settlement.
Foreign Element - factual situation cutting across territorial lines, affected by diverse laws of two
or more States. The presence of foreign element in a case determines the existence of a Conflict of
Laws situation. Where there is no foreign element, no Conflict of Laws exists.
Phases in Conflict Resolution
1. Jurisdiction – concerns the authority of a court of law to take cognizance of a case. (Where
can or should litigation be initiated?
2. Choice of Law – refers to the applicable law to the problem. (Which law will the court
apply?)
3. Recognition and Enforcement – concerns the enforcement of foreign laws and judgments
in another jurisdiction (Where can the resulting judgment be enforced?)
