Tuesday, 2 July 2019

Trapor

7-10

- Batangas transportation co. vs Cayetano Orlanes

facts: -Batangas Transportation Company filed an application for a permit, in

which it alleged that it is operating a regular service of auto trucks between the
principal municipalities of the Province of Batangas and some of those of the Province
of Tayabas. In 1920, its service was extended to the municipality of San Juan de
Bolbok, with a certificate of public convenience issued by the Public Servise
Commission. 1925, Orlanes obtained from the Commission a certificate of public
convenience to operate an irregular service of auto trucks between Taal, Province of
Batangas, and Lucena, Province of Tayabas, with the express limitation that he could
not accept passengers from intermediate points between Taal and Bolbok, except
those which were going to points beyond San Juan de Bolbok or to the Province of
Tayabas. 1926, Orlanes sought to obtain a license as a regular operator on that portion
of the line between Bantilan and Lucena without having asked for a permit for that
portion of the line between Bantilan and Taal. From June, 1926, Orlanes and the
Batangas Transportation Company were jointly operating a regular service between
Bantilan and Lucena. Orlanes not having asked for a regular service between Bantilan
and Taal, the Batangas Transportation Company remedied this lack of service under
the authority of the Commission, and increased its trips between Bantilan and Tayabas
to make due and timely connections in Bantilan on a half-hour service. It is then
alleged that the service maintained by the company is sufficient to satisfy the
convenience of the public, and that the public convenience does not require the
granting of the permit for the service which Orlanes petitions, and that to do so would
result in ruinous competition and to the grave prejudice of the company and without
any benefit to the public, and it prayed that the petition of Orlanes to operate a regular
service be denied.

Issue: Is a certificate of public convenience going to be issued to a second

operator to operate a public utility in a field where, and in competition with, a first
operator who is already operating, adequate and satisfactory service?

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Held: No. Section 15 of Act No. 3108 provides that the Commission shall have
power, after hearing, upon notice, by order in writing to require every public utility:

(i) "No public utility as herein defined shall operate in the Philippine Islands
without having first secured from the Commission a certificate, which shall be known
as Certificate of Public Convenience, to the effect that the operation of said public
utility and the authorization to do busibness wikll promote the public interest in a
proper and suitable maner."

The certificate of public convenience granted to Orlanes in the instant case expressly
recites that it "will promote the public interests in a proper and suitable manner." Yet no
such finding of fact was made by the Commission. The evidence is conclusive that the
Batangas Transportation Company operated its line five years before Orlanes ever
turned a wheel, yet the legal effect of the decision of the Public Service Commission is
to give an irregular operator, who was the last in the field, a preferential right over a
regular operator, who was the first in the field. That is not the law, and there is no legal
principle upon which it can be sustained. So long as the first licensee keeps and
performs the terms and conditions of its license and complies with the reasonable rules
and regulations of the Commission and meets the reasonable demands of the public, it
should have more or less of a vested and preferential right over a person who seeks to
acquire another and a later license over the same route. Otherwise, the first license
would not have protection on his investment, and would be subject to ruinous
competition and thus defeat the very purpose and intent for which the Public Service
Commission was created.

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 Tuesday, 2 July 2019
—Epitacio San Pablo vs Pantranco South Express

facts: PANTRANCO is a domestic corporation engaged in the land

transportation business with PUB service for passengers and freight and various
certificates for public conveniences to operate passenger buses from Metro Manila to
Bicol Region and Eastern Samar. PANTRANCO through its counsel wrote to Maritime
Industry Authority (MARINA) requesting authority to lease/purchase a vessel to be used
for its project to operate a ferryboat service from Matnog, Sorsogon and Allen, Samar
that will provide service to company buses and freight trucks that have to cross San
Bernardo Strait. It acquired vessel and proposes to operate a ferry service to carry its
passenger buses and freight trucks between Allen and Matnog in connection with its
trips to Tacloban City. PANTRANCO claims that it can operate a ferry service in
connection with its franchise for bus operation in the highway from Pasay City to
Tacloban City "for the purpose of continuing the highway, which is interrupted by a
small body of water, the said proposed ferry operation is merely a necessary and
incidental service to its main service and obligation of transporting its passengers from
Pasay City to Tacloban City. Such being the case there is no need to obtain a separate
certificate for public convenience to operate a ferry service between Allen and Matnog
to cater exclusively to its passenger buses and freight trucks. Epitacio San Pablo claim
they adequately service the PANTRANCO by ferrying its buses, trucks and passengers.
BOT then asked the legal opinion from the Minister of Justice whether or not a bus
company with an existing CPC between Pasay City and Tacloban City may still be
required to secure another certificate in order to operate a ferry service between two
terminals of a small body of water.

Issue: Whether a land transportation company can be authorized to operate a

ferry service or coastwise or interisland shipping service along its authorized route as
an incident to its franchise without the need of filing a separate application for the
same.

held: No. The Court holds that the water transport service between Matnog and
Allen is not a ferry boat service but a coastwise or interisland shipping service. Before
private respondent may be issued a franchise or CPC for the operation of the said
service as a common carrier, it must comply with the usual requirements of filing an
application, payment of the fees, publication, adducing evidence at a hearing and
affording the oppositors the opportunity to be heard, among others, as provided by
law. Commonwealth Act No. 146, known as the Public Service Act and the provisions

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 Tuesday, 2 July 2019
of the Revised Administrative Code regarding municipal ferries and those regarding the
jurisdiction of the Bureau of Customs over documentation, registration, licensing,
inspection, etc. of steamboats, motorboats or motor vessels, and the definition of ferry
as above quoted we have the impression and we are inclined to believe that the
Legislature intended ferry to mean the service either by barges or rafts, even by motor
or steam vessels, between the banks of a river or stream to continue the highway
which is interrupted by the body of water, or in some cases to connect two points on
opposite shores of an arm of the sea such as bay or lake which does not involve too
great a distance or too long a time to navigate But where the line or service involves
crossing the open sea like the body of water between the province of Batangas and the
island of Mindoro which the oppositors describe thus "the intervening waters between
Calapan and Batangas are wide and dangerous with big waves where small boat
barge, or raft are not adapted to the service," then it is more reasonable to regard said
line or service as more properly belonging to interisland or coastwise trade. A ferry
service is distinguished from a motorship or motorboat service engaged in the
coastwise trade in that the latter is intended for the transportation of passengers and/
or freight for hire or compensation between ports or places in the Philippines without
definite routes or lines of service.

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 Tuesday, 2 July 2019
—Teja marketing and Angel Jaucian vs IAC

facts: Pedro Nale bought from Teja Marketing a motorcycle with complete accessories
and a sidecar. A chattel mortgage was constituted as a security for the payment of the balance
of the purchase price. The records of the Land Transportation Commission show that the
motorcycle sold to the defendant was first mortgaged to the Teja Marketing by Angel Jaucian
though the Teja Marketing and Angel Jaucian are one and the same, because it wasmade to
appear that way only as the defendant had no franchise of his own and he attached the unit to
the plaintiffs MCH Line. The agreement also ofthe parties here was for the plaintiff to undertake
the yearly registration of the motorcycle with the Land Transportation Commission. The plaintiff,
however failed to register the motorcycle on that year on the ground that the defendant failed to
comply with some requirements such as the payment of theinsurance premiums and the
bringing of the motorcycle to the LTC for stenciling, the plaintiff said that the defendant was
hiding the motorcycle from him. Lastly, the plaintiff also explained that though the ownership of
the motorcycle was already transferred to the defendant, the vehicle was still mortgaged with
the consent of the defendant to the Rural Bank of Camaligan for the reason that all motorcycle
purchased from the plaintiff on credit was rediscounted with the bank. Teja Marketing made
demands for the payment of the motorcycle but just the same Nale failed to comply, thus forcing
Teja Marketing to consult a lawyer and file an action for damage before the City Court of Naga
in the amount of P546.21 for attorneys fees and P100.00 for expenses of litigation. Teja
Marketing also claimed that as of 20 February 1978, the total account of Nale was already P2,
731, 05 as shown in a statement of account; includes not only the balance of P1, 700.00 but an
additional 12% interest per annum on the said balance from 26 January 1976 to 27 February
1978; a 2% service charge; and P546.21 representing attorneys fees. On his part, Nale did not
dispute the sale and the outstanding balance of P1,700.00 still payable toTeja Marketing; but
contends that because of this failure of Teja Marketing to comply with his obligation to register
the motorcycle, Nale suffered damages when he failed to claim any insurance indemnity which
would amount to no less than P15,000.00 for the more than 2 times that the motorcycle figured
in accidents aside from the loss of the daily income of P15.00 as boundary fee beginning
October 1976 when the motorcycle was impounded by the LTC for not being registered. The
City Court rendered judgment in favor of Teja Marketing, dismissing the counterclaim, and
ordered Nale to pay Teja Marketing On appeal to the Court of First Instance of Camarines Sur,
the decision was affirmed in toto.

Issue: Whether the defendant can recover damages against the plaintiff?

Held: No. Unquestionably, the parties herein operated under an arrangement, commonly
known as the "kabit system" whereby a person who has been granted a certificate of public
convenience allows another person who owns motor vehicles to operate under such franchise
for a fee. A certificate of public convenience is a special privilege conferred by the government.
Abuse of this privilege by the grantees thereof cannot be countenanced. The "kabit system" has
been identified as one of the root causes of the prevalence of graft and corruption in the
government transportation offices. Although not out rightly penalized as a criminal offense, the
kabit system is invariably recognized as being contrary to public policy and, therefore, voidand
in existent under Article 1409 of the Civil Code.

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 Tuesday, 2 July 2019
—Lourdes J. Lara vs Brigida Valencia

facts: The defendant is engaged in the business of exporting logs from his lumber
concession in Cotabato. Lara went to said concession upon instructions of his chief to classify
the logs of defendant which were about to be loaded on a ship anchored in the port of Parang.
In the morning of January 9, 1954, Lara who then in a hurry to return to Davao asked defendant
if he could take him in his pick-up as there was then no other means of transportation, to which
defendant agreed, and in that same morning the pick-up left Parang bound for Davao taking
along six passengers, including Lara. It was their understanding that upon reaching barrio
Samoay, Cotabato, the passengers were to alight and take a bus bound for Davao, but when
they arrived at that place, only Bernardo alighted and the other passengers requested
defendant to allow them to ride with him up to Davao because there was then no available bus
that they could take in going to that place. Defendant again accommodated the passengers.
Upon reaching Km. 96, barrio Catidtuan, Lara accidentally fell from the pick-up and as a result
he suffered serious injuries. Valencia stopped the pick-up to see what happened to Lara.An
investigation was made regarding the circumstances surrounding the death of Lara but no
criminal action was taken against defendant.

It should be noted that the deceased went to the lumber concession of defendant in Parang,
Cotabato upon instructions of his chief in order to classify the logs of defendant which were then
ready to be exported and to be loaded on a ship anchored in the port of Parang. It therefore
appears that the deceased, as well as his companions who rode in the pick-up of defendant,
were merely accommodation passengers who paid nothing for the service and so they can be
considered as invited guests within the meaning of the law. As accommodation passengers or
invited guests, defendant as owner and driver of the pick-up owes to them merely the duty to
exercise reasonable care so that they may be transported safely to their destination.

Issue: Is there enough evidence to show that defendant failed to observe ordinary care
or diligence in transporting the deceased from Parang to Davao on the date in question?

Held: No. Supreme Court held that “all things considered, we are persuaded to conclude
that the accident occurred not due to the negligence of defendant but to circumstances beyond
his control and so he should be exempt from liability.” We may rather attribute the incident to
lack of care on the part of the deceased considering that the pick-up was open and he was then
in crouching position. Indeed the law provides that "A passenger must observe the diligence of a
good father of a family to avoid injury to himself" (Article 1761, new Civil Code), which means
that if the injury to the passenger has been proximately caused by his own negligence, the
carrier cannot be held liable.