G.R. No.

L-8095 March 31, 1915

F.C. FISHER, vs. YANGCO STEAMSHIP COMPANY, J.S. STANLEY, as Acting Collector of Customs of the Philippine Islands,
IGNACIO VILLAMOR, as Attorney-General of the Philippine Islands, and W.H. BISHOP, as prosecuting attorney of the city of
Manila,

FACTS:

plaintiff is a stockholder in the Yangco Steamship Company, the owner of a large number of steam vessels, duly licensed to
engage in the coastwise trade of the Philippine Islands;

the directors of the company adopted a resolution which was ratified and affirmed by the shareholders of the company,
expressly prohibiting the officers, agents and servants of the company from offering to carry, accepting for carriage
dynamite, powder or other explosives;

Acting Collector of Customs demanded and required of the company the acceptance and carriage of such explosives; that he
has refused and suspended the issuance of the necessary clearance documents of the vessels of the company unless and until
the company consents to accept such explosives for carriage;

plaintiff is advised and believes that should the company decline to accept such explosives for carriage, the respondent
Attorney-General of the Philippine Islands and the respondent prosecuting attorney of the city of Manila intend to institute
proceedings under the penal provisions of sections 4, 5, and 6 of Act No. 98 of the Philippine Commission against the
company, its managers, agents and servants, to enforce the requirements of the Acting Collector of Customs as to the
acceptance of such explosives for carriage; that notwithstanding the demands of the plaintiff stockholder, the manager,
agents and servants of the company decline and refuse to cease the carriage of such explosives, on the ground that by reason
of the severity of the penalties with which they are threatened upon failure to carry such explosives, they cannot subject
themselves to "the ruinous consequences which would inevitably result" from failure on their part to obey the demands and
requirements of the Acting Collector of Customs as to the acceptance for carriage of explosives;

that plaintiff believes that the Acting Collector of Customs erroneously construes the provisions of Act No. 98 in holding that
they require the company to accept such explosives for carriage notwithstanding the above mentioned resolution of the
directors and stockholders of the company, and that if the Act does in fact require the company to carry such explosives it is to
that extent unconstitutional and void; that notwithstanding this belief of complainant as to the true meaning of the Act, the
questions involved cannot be raised by the refusal of the company or its agents to comply with the demands of the Acting
Collector of Customs, without the risk of irreparable loss and damage resulting from his refusal to facilitate the documentation
of the company's vessels, and without assuming the company to test the questions involved by refusing to accept such
explosives for carriage.

Petitioner contends that as a common carrier in the Philippine Islands, it may decline to accept for carriage any shipment of
merchandise of a class which it expressly or impliedly declines to accept from all shippers alike, because as he contends "the
duty of a common carrier to carry for all who offer arises from the public profession he has made, and limited by it."

The duties and liabilities of common carriers in this jurisdiction are defined and fully set forth in Act No. 98 of the Philippine
Commission, and until and unless that statute be declared invalid or unconstitutional, we are bound by its provisions.

Sections 2, 3 and 4 of the Act are as follows:

SEC. 2. It shall be unlawful for any common carrier engaged in the transportation of passengers or property as above set forth
to make or give any unnecessary or unreasonable preference or advantage to any particular person, company, firm,
corporation or locality, or any particular kind of traffic in any respect whatsoever, or to subject any particular person,
company, firm, corporation or locality, or any particular kind of traffic, to undue or unreasonable prejudice or discrimination
whatsoever, and such unjust preference or discrimination is also hereby prohibited and declared to be unlawful.

SEC. 3. No common carrier engaged in the carriage of passengers or property as aforesaid shall, under any pretense
whatsoever, fail or refuse to receive for carriage, and as promptly as it is able to do so without discrimination, to carry any
person or property offering for carriage, and in the order in which such persons or property are offered for carriage, nor shall
any such common carrier enter into any arrangement, contract or agreement with any other person or corporation whereby
the latter is given an exclusive or preferential or monopolize the carriage any class or kind of property to the exclusion or
partial exclusion of any other person or persons, and the entering into any such arrangement, contract or agreement, under
any form or pretense whatsoever, is hereby prohibited and declared to be unlawful.

SEC. 4. Any willful violation of the provisions of this Act by any common carrier engaged in the transportation of passengers or
property as hereinbefore set forth is hereby declared to be punishable by a fine not exceeding five thousand dollars money of
the United States, or by imprisonment not exceeding two years, or both, within the discretion of the court.

The validity of this Act has been questioned on various grounds, and it is vigorously contended that in so far as it imposes any
obligation on a common carrier to accept for carriage merchandise of a class which he makes no public profession to carry, or
which he has expressly or impliedly announced his intention to decline to accept for carriage from all shippers alike, it is ultra
vires, unconstitutional and void.
We agree with counsel for petitioner that the provision of the Act which prescribes that, "No common carrier ... shall, under
any pretense whatsoever, fail or refuse to receive for carriage ... to carry any person or property offering for carriage," is not
to be construed in its literal sense and without regard to the context, so as to impose an imperative duty on all common
carriers to accept for carriage, and to carry all and any kind of freight which may be offered for carriage without regard to the
facilities which they may have at their disposal. The legislator could not have intended and did not intend to prescribe that a
common carrier running passenger automobiles for hire must transport coal in his machines; nor that the owner of a tank
steamer, expressly constructed in small watertight compartments for the carriage of crude oil must accept common carrier
must accept and carry contraband articles, such as opium, morphine, cocaine, or the like, the mere possession of which is
declared to be a criminal offense; nor that common carriers must accept eggs offered for transportation in paper parcels or
any merchandise whatever do defectively packed as to entail upon the company unreasonable and unnecessary care or risks.

Read in connection with its context this, as well as all the other mandatory and prohibitory provisions of the statute, was
clearly intended merely to forbid failures or refusals to receive persons or property for carriage involving any "unnecessary or
unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular kind
of traffic in any respect whatsoever," or which would "subject any particular person, company, firm, corporation or locality, or
any particular kind of traffic to any undue or unreasonable prejudice or discrimination whatsoever."

The question, then, of construing and applying the statute, in cases of alleged violations of its provisions, always involves a
consideration as to whether the acts complained of had the effect of making or giving an "unreasonable or unnecessary
preference or advantage" to any person, locality or particular kind of traffic, or of subjecting any person, locality, or particular
kind of traffic to any undue or unreasonable prejudice or discrimination. It is very clear therefore that the language of the
statute itself refutes any contention as to its invalidity based on the alleged unreasonableness of its mandatory or prohibitory
provisions.

Counsel for petitioner contends also that the statute, if construed so as to deny the right of the steamship company to elect at
will whether or not it will engage in a particular business, such as that of carrying explosives, is unconstitutional "because it is a
confiscation of property, a taking of the carrier's property without due process of law," and because it deprives him of his
liberty by compelling him to engage in business against his will.

ISSUE:

whether the refusal of the owners and officers of a steam vessel to accept for carriage "dynamite, powder or other
explosives" from any and all shippers who may offer such explosives for carriage can be held to be a lawful act

RULING:

To require of a carrier, as a condition to his continuing in said business, that he must carry anything and every thing is to
render useless the facilities he may have for the carriage of certain lines of freight. It would be almost as complete a
confiscation of such facilities as if the same were destroyed. Their value as a means of livelihood would be utterly taken away.
The law is a prohibition to him to continue in business; the alternative is to get out or to go into some other business.

It is manifest, however, that this contention is directed against a construction of the statute, which, as we have said, is not
warranted by its terms. As we have already indicated, the statute does not "require of a carrier, as a condition to his
continuing in said business, that he must carry anything and everything," and thereby "render useless the facilities he may
have for the carriage of certain lines of freight." It merely forbids failures or refusals to receive persons or property for carriage
which have the effect of giving an "unreasonable or unnecessary preference or advantage" to any person, locality or particular
kind of traffic, or of subjecting any person, locality or particular kind of traffic to any undue or unreasonable prejudice or
discrimination.

there is nothing in the statute which would deprive any person of his liberty "by requiring him to engage in business against
his will." The prohibitions of the statute against undue, unnecessary or unreasonable regulations which the legislator has seen
fit to prescribe for the conduct of the business in which the carrier is engaged of his own free will and accord. In so far as the
self-imposed limitations by the carrier upon the business conducted by him, in the various examples given by counsel, do not
involve an unreasonable or unnecessary discrimination the statute would not control his action in any wise whatever. It
operates only in cases involving such unreasonable or unnecessary preferences or discriminations. Thus in the hypothetical
case suggested by the petitioner, a carrier engaged in the carriage of green, blue or black jusi, and duly equipped therefor
would manifestly be guilty of "giving an unnecessary and unreasonable preference to a particular kind of traffic" and of
subjecting to "an undue and reasonable prejudice a particular kind of traffic," should he decline to carry red jusi, to the
prejudice of a particular shipper or of those engaged in the manufacture of that kind of jusi, basing his refusal on the ground of
"mere whim or caprice" or of mere personal convenience. So a public carrier of passengers would not be permitted under this
statute to absolve himself from liability for a refusal to carry a Chinaman, a Spaniard, an American, a Filipino, or a mestizo by
proof that from "mere whim or caprice or personal scruple," or to suit his own convenience, or in the hope of increasing his
business and thus making larger profits, he had publicly announced his intention not to carry one or other of these classes of
passengers.
The nature of the business of a common carrier as a public employment is such that it is clearly within the power of the
state to impose such just and reasonable regulations thereon in the interest of the public as the legislator may deem
proper. Of course such regulations must not have the effect of depriving an owner of his property without due process of law,
nor of confiscating or appropriating private property without just compensation, nor of limiting or prescribing irrevocably
vested rights or privileges lawfully acquired under a charter or franchise. But aside from such constitutional limitations, the
determination of the nature and extent of the regulations which should be prescribed rests in the hands of the legislator.

Common carriers exercise a sort of public office, and have duties to perform in which the public is interested. Their business is,
therefore, affected with a public interest, and is subject of public regulation. Indeed, this right of regulation is so far beyond
question that it is well settled that the power of the state to exercise legislative control over railroad companies and other
carriers "in all respects necessary to protect the public against danger, injustice and oppression" may be exercised through
boards of commissioners.

Regulations limiting of passengers the number of passengers that may be carried in a particular vehicle or steam vessel, or
forbidding the loading of a vessel beyond a certain point, or prescribing the number and qualifications of the personnel in the
employ of a common carrier, or forbidding unjust discrimination as to rates, all tend to limit and restrict his liberty and to
control to some degree the free exercise of his discretion in the conduct of his business. But since the Granger cases were
decided by the Supreme Court of the United States no one questions the power of the legislator to prescribe such reasonable
regulations upon property clothed with a public interest as he may deem expedient or necessary to protect the public against
danger, injustice or oppression. The right to enter the public employment as a common carrier and to offer one's services to
the public for hire does not carry with it the right to conduct that business as one pleases, without regard to the interest of the
public and free from such reasonable and just regulations as may be prescribed for the protection of the public from the
reckless or careless indifference of the carrier as to the public welfare and for the prevention of unjust and unreasonable
discrimination of any kind whatsoever in the performance of the carrier's duties as a servant of the public.

Business of certain kinds, including the business of a common carrier, holds such a peculiar relation to the public interest that
there is superinduced upon it the right of public regulation. When private property is "affected with a public interest it ceases
to be juris privati only." Property becomes clothed with a public interest when used in a manner to make it of public
consequence and affect the community at large. "When, therefore, one devotes his property to a use in which the public has
an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the
common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use, but so
long as he maintains the use he must submit to control.

Of course this power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation. Under pretense
of regulating fares and freight the state can not require a railroad corporation to carry persons or property without reward.
Nor can it do that which in law amounts to a taking of private property for public use without just compensation, or without
due process of law. But the judiciary ought not to interfere with regulations established and palpably unreasonable as to make
their enforcement equivalent to the taking of property for public use without such compensation as under all the
circumstances is just both to the owner and to the public, that is, judicial interference should never occur unless the case
presents, clearly and beyond all doubt, such a flagrant attack upon the rights of property under the guise of regulations as to
compel the court to say that the regulation in question will have the effect to deny just compensation for private property
taken for the public use.

Under the common law of England it was early recognized that common carriers owe to the public the duty of carrying
indifferently for all who may employ them, and in the order in which application is made, and without discrimination as to
terms. True, they were allowed to restrict their business so as to exclude particular classes of goods, but as to the kinds of
property which the carrier was in the habit of carrying in the prosecution of his business he was bound to serve all customers
alike; and it is to be observed in passing that these common law rules are themselves regulations controlling, limiting and
prescribing the conditions under which common carriers were permitted to conduct their business.

It was found, in the course of time, that the correction of abuses which had grown up with the enormously increasing business
of common carriers necessitated the adoption of statutory regulations controlling the business of common carriers, and
imposing severe and drastic penalties for violations of their terms. In England, the Railway Clauses Consolidation Act was
enacted in 1845, the Railway and Canal Traffic Act in 1854, and since the passage of those Acts much additional legislation has
been adopted tending to limit and control the conduct of their business by common carriers. In the United States, the business
of common carriers has been subjected to a great variety of statutory regulations. Among others Congress enacted "The
Interstate Commerce Act" (1887) and its amendments, and the Elkins Act as amended (1906); and most if not all of the States
of the Union have adopted similar legislation regulating the business of common carriers within their respective jurisdictions.
Unending litigation has arisen under these statutes and their amendments, but nowhere has the right of the state to prescribe
just and reasonable regulations controlling and limiting the conduct of the business of common carriers in the public interest
and for the general welfare been successfully challenged, though of course there has been wide divergence of opinion as to
the reasonableness, the validity and legality of many of the regulations actually adopted.
The power of the Philippine legislator to prohibit and to penalize all and any unnecessary or unreasonable discriminations by
common carriers may be maintained upon the same reasoning which justified the enactment by the Parliament of England
and the Congress of the United States of the above mentioned statutes prohibiting and penalizing the granting of certain
preferences and discriminations in those countries. we find nothing confiscatory or unreasonable in the conditions imposed in
the Philippine statute upon the business of common carriers. Correctly construed they do not force him to engage in any
business his will or to make use of his facilities in a manner or for a purpose for which they are not reasonably adapted. It is
only when he offers his facilities as a common carrier to the public for hire, that the statute steps in and prescribes that he
must treat all alike, that he may not pick and choose which customer he will serve, and, specifically, that he shall not make any
undue or unreasonable preferences or discriminations whatsoever to the prejudice not only of any person or locality but also
of any particular kind of traffic.

The legislator having enacted a regulation prohibiting common carriers from giving unnecessary or unreasonable preferences
or advantages to any particular kind of traffic or subjecting any particular kind of traffic to any undue or unreasonable
prejudice or discrimination whatsoever, it is clear that whatever may have been the rule at the common law, common carriers
in this jurisdiction cannot lawfully decline to accept a particular class of goods for carriage, to the prejudice of the traffic in
those goods, unless it appears that for some sufficient reason the discrimination against the traffic in such goods is reasonable
and necessary. Mere whim or prejudice will not suffice. The grounds for the discrimination must be substantial ones, such as
will justify the courts in holding the discrimination to have been reasonable and necessary under all circumstances of the case.

The prayer of the petition in the case at bar cannot be granted unless we hold that the refusal of the defendant steamship
company to accept for carriage on any of its vessels "dynamite, gunpowder or other explosives" would in no instance involve a
violation of the provisions of this statute. There can be little doubt, however, that cases may and will arise wherein the refusal
of a vessel "engaged in the coastwise trade of the Philippine Islands as a common carrier" to accept such explosives for
carriage would subject some person, company, firm or corporation, or locality, or particular kind of traffic to a certain
prejudice or discrimination. Indeed it cannot be doubted that the refusal of a "steamship company, the owner of a large
number of vessels" engaged in that trade to receive for carriage any such explosives on any of its vessels would subject the
traffic in such explosives to a manifest prejudice and discrimination. The only question to be determined therefore is whether
such prejudice or discrimination might in any case prove to be undue, unnecessary or unreasonable.

This of course is, in each case, a question of fact, and we are of the opinion that the facts alleged in the complaint are not
sufficient to sustain a finding in favor of the contentions of the petitioner. It is not alleged in the complaint that "dynamite,
gunpowder and other explosives" can in no event be transported with reasonable safety on board steam vessels engaged in
the business of common carriers. It is not alleged that all, or indeed any of the defendant steamship company's vessels are
unsuited for the carriage of such explosives. It is not alleged that the nature of the business in which the steamship company is
engaged is such as to preclude a finding that a refusal to accept such explosives on any of its vessels would subject the traffic
in such explosives to an undue and unreasonable prejudice and discrimination.

Plaintiff's contention in this regard is as follows:

In the present case, the respondent company has expressly and publicly renounced the carriage of explosives, and expressly
excluded the same terms from the business it conducts. This in itself were sufficient, even though such exclusion of explosives
were based on no other ground than the mere whim, caprice or personal scruple of the carrier. It is unnecessary, however, to
indulge in academic discussion of a moot question, for the decision not a carry explosives rests on substantial grounds which
are self-evident.

We think however that the answer to the question whether such a refusal to carry explosives involves an unnecessary or
unreasonable preference or advantage to any person, locality or particular kind of traffic or subjects any person, locality or
particular to traffic to an undue or unreasonable prejudice and discrimination is by no means "self-evident," and that it is a
question of fact to be determined by the particular circumstances of each case.

The words "dynamite, powder or other explosives" are broad enough to include matches, and other articles of like nature, and
may fairly be held to include also kerosene oil, gasoline and similar products of a highly inflammable and explosive character.
Many of these articles of merchandise are in the nature of necessities in any country open to modern progress and
advancement. We are not fully advised as to the methods of transportation by which they are made commercially available
throughout the world, but certain it is that dynamite, gunpowder, matches, kerosene oil and gasoline are transported on many
vessels sailing the high seas. Indeed it is a matter of common knowledge that common carriers throughout the world transport
enormous quantities of these explosives, on both land and sea, and there can be little doubt that a general refusal of the
common carriers in any country to accept such explosives for carriage would involve many persons, firms and enterprises in
utter ruin, and would disastrously affect the interests of the public and the general welfare of the community.

It would be going to far to say that a refusal by a steam vessel engaged in the business of transporting general merchandise as
a common carrier to accept for carriage a shipment of matches, solely on the ground of the dangers incident to the explosive
quality of this class of merchandise, would not subject the traffic in matches to an unnecessary, undue or unreasonable
prejudice and discrimination without proof that for some special reason the particular vessel is not fitted to carry articles of
that nature.
There may be and doubtless are some vessels engaged in business as common carriers of merchandise, which for lack of
suitable deck space or storage rooms might be justified in declining to carry kerosene oil, gasoline, and similar products, even
when offered for carriage securely packed in cases; and few vessels are equipped to transport those products in bulk. But in
any case of a refusal to carry such products which would subject any person, locality or the traffic in such products would be
necessary to hear evidence before making an affirmative finding that such prejudice or discrimination was or was not
unnecessary, undue or unreasonable. The making of such a finding would involve a consideration of the suitability of the
vessel for the transportation of such products ; the reasonable possibility of danger or disaster resulting from their
transportation in the form and under the conditions in which they are offered for carriage; the general nature of the business
done by the carrier and, in a word, all the attendant circumstances which might affect the question of the reasonable
necessity for the refusal by the carrier to undertake the transportation of this class of merchandise.

But it is contended that whatever the rule may be as to other explosives, the exceptional power and violence of dynamite and
gunpowder in explosion will always furnish the owner of a vessel with a reasonable excuse for his failure or refusal to accept
them for carriage or to carry them on board his boat. We think however that even as to dynamite and gunpowder we would
not be justified in making such a holding unaided by evidence sustaining the proposition that these articles can never be
carried with reasonable safety on any vessel engaged in the business of a common carrier. It is said that dynamite is so erratic
an uncontrollable in its action that it is impossible to assert that it can be handled with safety in any given case. On the other
hand it is contended that while this may be true of some kinds of dynamite, it is a fact that dynamite can be and is
manufactured so as to eliminate any real danger from explosion during transportation. These are of course questions of fact
upon which we are not qualified to pass judgment without the assistance of expert witnesses who have made special studies
as to the chemical composition and reactions of the different kinds of dynamite, or attained a thorough knowledge of its
properties as a result of wide experience in its manufacture and transportation.

As we construe the Philippine statute, the mere fact that violent and destructive explosions can be obtained by the use of
dynamite under certain conditions would not be sufficient in itself to justify the refusal of a vessel, duly licensed as a common
carrier of merchandise, to accept it for carriage, if it can be proven that in the condition in which it is offered for carriage there
is no real danger to the carrier, nor reasonable ground to fear that his vessel or those on board his vessel will be exposed to
unnecessary and unreasonable risk in transporting it, having in mind the nature of his business as a common carrier engaged
in the coastwise trade in the Philippine Islands, and his duty as a servant of the public engaged in a public employment. So
also, if by the exercise of due diligence and the taking of unreasonable precautions the danger of explosions can be practically
eliminated, the carrier would not be justified in subjecting the traffic in this commodity to prejudice or discrimination by proof
that there would be a possibility of danger from explosion when no such precautions are taken.

The traffic in dynamite, gunpowder and other explosives is vitally essential to the material and general welfare of the
people of these Islands. If dynamite, gunpowder and other explosives are to continue in general use throughout the
Philippines, they must be transported by water from port to port in the various islands which make up the Archipelago. We
are satisfied therefore that the refusal by a particular vessel, engaged as a common carrier of merchandise in the coastwise
trade of the Philippine Islands, to accept any or all of these explosives for carriage would constitute a violation of the
prohibitions against discriminations penalized under the statute, unless it can be shown by affirmative evidence that there
is so real and substantial a danger of disaster necessarily involved in the carriage of any or all of these articles of
merchandise as to render such refusal a due or a necessary or a reasonable exercise of prudence and discretion on the part
of the shipowner.

DIGEST:

Facts: The complained alleges that plaintiff is a stockholder in Yangco Steamship Company, the owner of the large steam
vessels, duly licensed to engage in the coastwise trade of the Philippine Island; that on or about June 10, 1912, the directors of
the company, adopted a resolution which was thereafter ratified and affirmed by the stockholders of the company “expressly
declaring and providing that the classes of merchandise to be carried by the company in its business as common carrier do not
include dynamite, powder or other explosives, and expressly prohibiting the officers, agents an d servants of the company
from offering to carry, accepting for carriage or carrying said dynamite, powder or other explosives.”

Issue: Whether the refusal of the owner and officer of a steam vessel, to accept for carriage dynamite, powder or other
explosives for carriage can be held to be a lawful act?

Held: The traffic in dynamite gun powder and other explosive is vitally essential to the material and general welfare of the
inhabitants of this islands and it these products are to continue in general use throughout the Philippines they must be
transported from water to port to port in various island which make up the Archipelago.

It follows that a refusal by a particular vessel engage as a common carrier of merchandise in coastwise trade in the Philippine
Island to accept such explosives for carriage constitutes a violation.

The prohibition against discrimination penalized under the statute, unless it can be shown that there is so Real and substantial
danger of disaster necessarily involved in the courage of any or all of this article of merchandise as to render such refusal a due
or unnecessary or a reasonable exercise or prudence and discreation on the part of the ship owner.