G.R. No.
88195-96 January 27, 1994 of the NLRC decision as it was issued with grave abuse of discretion amounting
"Y" TRANSIT CO, INC., petitioner, 
vs.
THE NATIONAL LABOR RELATIONS COMMISSION AND YUJUICO
TRANSIT EMPLOYEES UNION (ASSOCIATED LABOR UNION),
MANUEL VILLARTA, respondents.
FACTS: In March 1960 and sometime thereafter, Yujuico Transit Co., Inc.,
mortgaged ten (10) of its buses to the Development Bank of the Philippines
(DBP) to secure a loan in the amount of P2,795,129.36.
Thereafter, the Board of Directors of Yujuico Transit Co., Inc. passed a
resolution authorizing its President, Jesus Yujuico to enter into a dacion en
pago  arrangement with the DBP, whereby Jesus Yujuico would transfer to the
DBP the Saint Martin Technical Institute in consideration of the full
settlement of the obligations of three companies, one of which was Yujuico
Transit Co, Inc.
Accordingly, on or about October 24, 1978, the transfer of the property was
made and DBP released the mortgages constituted on the buses of Yujuico
Transit Co., Inc. Consequently, the company transferred the ownership of its
mortgaged properties, including the buses, to Jesus Yujuico.
Meanwhile, sometime in June and July 1979, the Yujuico Transit Employees
Union (Associated labor Union) filed two (2) consolidated complaints against
Yujuico Transit Co., Inc. for Unfair Labor Practice and violations of
Presidential Decrees Nos. 525, 1123, 1614 and 851 (non-payment of living
allowances).
On May 21, 1980, Jesus Yujuico sold the subject buses to herein petitioner
"Y" Transit Co., Inc. for P3,485,400.00.
LA: dismissing the complaint for unfair labor practice but holding Yujuico
Transit Co., Inc. liable under the aforementioned Presidential Decrees in the
amount of P142,790.49.
On February 9, 1982, a writ of execution for the said amount was issued by
the Labor Arbiter. On June 14, 1982, an alias writ of execution was issued and
levy was made upon the ten (10) buses.
Thereafter, "Y" Transit Co., Inc. filed Affidavits of Third Party Claim.
PRIVATE RESPONDENT ARGUMENTS: opposed the Third party claim on
the ground that the transactions leading to the transfer of the buses to "Y" Transit
Co., Inc. were void because they lacked the approval of the BOT as required by
the Public Service Act.
- They also argued that the buses were still registered in the name of
Yujuico Transit Co. which was, therefore, still the lawful owner
thereof.
LA: Found that "Y" Transit Co., Inc. had valid title to the buses and that the
BOT, by its subsequent acts had approved the transfer.
- The fact that the registration certificates of most of the vehicles in
question are still in the name of Yujuico Transit Co., Inc. at the
time of the levy on execution does not militate against the
claimant. Registration of a motor vehicle is not the operative act
that transfers ownership, unlike in land registration cases.
Furthermore, the evidence shows that the claimant cannot be
faulted for its failure to have the certificates of registration
transferred in its own name. Prior to the levy, claimant had already
paid for the transfer fee, the fee for the cancellation of mortgage
and other fees required by the BLT. Moreover, the registration fees
of the vehicles whose last digit of their plate numbers made the
vehicles due for registration were already paid for by the claimant
(Exhibits "N" to "N-7"). Therefore, there was already a
constructive registration made by the claimant (Mariano B.
Arroyo vs. Maria Corazon Yu de Sane, et al., 54 Phil. 511, 518),
sufficient notice to affect the rights of third-parties. It is now
ministerial on the part of the BLT to issue the Registration
Certificates in the name of the claimant, but the same was held in
abeyance pending the computerization of the records of BOT on
public utility vehicles.
- Accordingly, the Third-Party Claim was granted and the release
of all the buses levied for execution was ordered.
NLRC: reversed LA.
- on the ground that the transfer of the buses lacked the BOT
approval. It ordered the reinstatement of the levy and the auction of
properties.
"Y" Transit Co., Inc. thereafter filed this special civil action
for certiorari under Rule 65 of the Rules of Court praying for the issuance of a
Restraining Order and/or a Writ of Preliminary Injunction and for the annulment
to lack of jurisdiction.
On July 6, 1989, petitioner filed a motion to cite Labor Arbiter Benigno C.
Villarente, Jr. for contempt of court and for the issuance of an order for the
immediate release of the property.
Petitioner argues that the Labor Arbiter refused to release the vehicles levied
on June 5, 1989 despite notice that a TRO has been issued by the Supreme
Court; that there was no reason to hold on to the levy as petitioner had
already posted a bond to answer for the damages and award in the above-
entitled case; that the labor arbiter wrongly required the payment of storage
charges and sheriff's fees before releasing the levied buses.
ISSUE: Did public respondent commit grave abuse of discretion in
reinstating the levy on the buses which have been allegedly transferred to a
third party, herein petitioner "Y" Transit Co., Inc.?
RULING: NO! The following facts have been established before the NLRC:
that the transfer of ownership from Yujuico Transit Co., Inc. to Jesus Yujuico,
and from Jesus Yujuico to "Y" Transit Co., Inc. lacked the prior approval of
the BOT as required by Section 20 of the Public Service Act; 4 that the buses
were transferred to "Y" Transit Co., Inc. during the pendency of the action; and
that until the time of the execution, the buses were still registered in the name of
Yujuico Transit Co., Inc.
In Montoya v. Ignacio,5 we held:
. . . The law really requires the approval of the Public Service
Commission in order that a franchise, or any privilege pertaining
thereto, may be sold or leased without infringing the certificate issued
to the grantee. The reason is obvious. Since a franchise is personal
in nature any transfer or lease thereof should be notified to the
Public Service Commission so that the latter may take proper
safeguards to protect the interest of the public. In fact, the law
requires that, before approval is granted, there should be a public
hearing with notice to all interested parties in order that the
commission may determine if there are good and reasonable
grounds justifying the transfer or lease of the property covered
by the franchise, or if the sale or lease is detrimental to public
interest. Such being the reason and philosophy behind this
requirement, it follows that if the property covered by the
franchise is transferred, or leased to another without obtaining
the requisite approval, the transfer is not binding against Public
Service Commission and in contemplation of law, the grantee
continues to be responsible under the franchise in relation to the
Commission and to the public. . . .
It may be argued that Section 16, paragraph (h) provides in its last
part that "nothing herein contained shall be construed to prevent
the sale, alienation, or lease by any public utility of any of its
property in the ordinary course of business," which gives the
impression that the approval of Public Service Commission is but a
mere formality which does not affect the effectivity of the transfer
or lease of the property belonging to a public utility. But such
provision only means that even if the approval has not been
obtained the transfer or lease is valid and binding between the
parties although not effective against the public and the Public
Service Commission. The approval is only necessary to protect
public interest.  (Emphasis ours)
APPLICATION IN THE CASE
There being no prior BOT approval in the transfer of property from
Yujuico Transit Co., Inc. to Jesus Yujuico, it only follows that as far as the
BOT and third parties are concerned, Yujuico Transit Co., Inc. still owned the
properties. and Yujuico, and later, "Y" Transit Co., Inc. only held the same
as agents of the former.
Conversely, where the registered owner is liable for obligations to third parties
and vehicles registered under his name are levied upon to satisfy his obligations,
the transferee of such vehicles cannot prevent the levy by asserting his
ownership because as far as the law is concerned, the one in whose name the
vehicle is registered remains to be the owner and the transferee merely
holds the vehicles for the registered owner.
Thus, "Y" Transit Co., Inc. cannot now argue that the buses could not be
levied upon to satisfy the money judgment in favor of herein respondents.
However, this does not deprive the transferee of the right to recover from
the registered owner any damages which may have been incurred by the
former since the . . . transfer or lease is valid and binding between the
parties. . . . 7 Thus, had there been any real contract between "Y" Transit Co.,
Inc. and Yujuico Transit Co., Inc. of "Y" Transit Co., Inc. and Jesus Yujuico
regarding the sale or transfer of the buses, the former may avail of its remedies
to recover damages.
RE: MOTION TO CONTEMPT
COURT: deny the same since the Order to levy upon petitioner's alleged
properties was issued even before the issuance by the Court of a temporary
restraining order. From the records, it appeared that Labor Arbiter Villarente
ordered the public auction of the subject properties on May 12, 1989. The sheriff
levied on the properties on June 5, 1989. The Supreme Court issued the
Temporary Restraining Order on June 19, 1989 and this was received by the
Labor Arbiter on June 22, 1989. On June 28, 1989, the Labor Arbiter directed
the sheriff to release the two buses already levied upon by him.

RE: STORAGE FEES

COURT: we find no error in requiring petitioner to pay the storage fees

prior to the release of the properties. Storage costs are imposed in accordance
with the provisions of Rule IX of the NLRC Manuel of Instructions for
Sheriffs, to wit:

Sec. 3. Storing of Levied Property. — To avoid pilferage of or

damage to levied property, the same shall be inventoried and
stored in a bonded warehouse, wherever available, or in a secured
place as may be determined by the sheriff with notice to and
conformity of the losing party or third party claimant. In case of
disagreement, the same shall be referred to the Labor Arbiter or
proper officer who issued the writ of execution for proper
disposition. For this purpose, sheriffs should inform the Labor
Arbiter or proper officer issuing the writ of corresponding storage
fees, furnishing him as well as the parties with a copy of the
inventory. The storage fees shall be shouldered by the losing party.

WHEREFORE, in view of the foregoing, this petition is hereby DISMISSED.

G.R. No. L-59234 September 30, 1982 On February 16, 1981, petitioners filed before the BOT a "Manifestation and
Urgent Motion", praying for an early hearing of their petition. The case was
heard on February 20, 1981. Petitioners presented testimonial and
TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO
documentary evidence, offered the same, and manifested that they would
CABIGAO and ACE TRANSPORTATION CORPORATION, petitioners, 
submit additional documentary proofs. Said proofs were submitted on March 27,
vs.
1981 attached to petitioners' pleading entitled, "Manifestation, Presentation of
THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE
Additional Evidence and Submission of the Case for Resolution." 3
BUREAU OF LAND TRANSPORTATION, respondents.

On November 28, 1981, petitioners filed before the same Board a

FACTS: This Petition for "Certiorari, Prohibition and mandamus with
"Manifestation and Urgent Motion to Resolve or Decide Main Petition"
Preliminary Injunction and Temporary Restraining Order" filed by the Taxicab
praying that the case be resolved or decided not later than December 10, 1981 to
Operators of Metro Manila, Inc., Felicisimo Cabigao and Ace Transportation,
enable them, in case of denial, to avail of whatever remedy they may have
seeks to declare the nullity of Memorandum Circular No. 77-42, dated
under the law for the protection of their interests before their 1975 model
October 10, 1977, of the Board of Transportation, and Memorandum
cabs are phased-out on January 1, 1982.
Circular No. 52, dated August 15, 1980, of the Bureau of Land
Transportation.
Petitioners, through its President, allegedly made personal follow-ups of the
case, but was later informed that the records of the case could not be
Petitioner Taxicab Operators of Metro Manila, Inc. (TOMMI) is a domestic
located.
corporation composed of taxicab operators, who are grantees of Certificates
of Public Convenience to operate taxicabs within the City of Manila and to
any other place in Luzon accessible to vehicular traffic. ISSUES:

Petitioners Ace Transportation Corporation and Felicisimo Cabigao are two
of the members of TOMMI, each being an operator and grantee of such
certificate of public convenience.
On October 10, 1977, respondent Board of Transportation (BOT) issued
Memorandum Circular No. 77-42 which reads:
SUBJECT: Phasing out and Replacement of Old and Dilapidated Taxis
A. Did BOT and BLT promulgate the questioned memorandum circulars in
accord with the manner required by Presidential Decree No. 101, thereby
safeguarding the petitioners' constitutional right to procedural due process?
YES!
B. Granting, arguendo, that respondents did comply with the procedural
requirements imposed by Presidential Decree No. 101, would the
implementation and enforcement of the assailed memorandum circulars violate
the petitioners' constitutional rights to.

NOW, THEREFORE, pursuant to this policy, the Board hereby declares that
(1) Equal protection of the law; = NO!
no car beyond six years shall be operated as taxi, and in implementation of
the same hereby promulgates the following rules and regulations:
(2) Substantive due process; and= NO!
As of December 31, 1977, all taxis of Model 1971 and earlier are ordered
withdrawn from public service and thereafter may no longer be registered (3) Protection against arbitrary and unreasonable classification and standard?=
and operated as taxis. In the registration of cards for 1978, only taxis of Model NO!
1972 and later shall be accepted for registration and allowed for operation;
RULING:
As of December 31, 1978, all taxis of Model 1972 are ordered withdrawn
from public service and thereafter may no longer be registered and
On Procedural and Substantive Due Process:
operated as taxis. In the registration of cars for 1979, only taxis of Model 1973
and later shall be accepted for registration and allowed for operation; and every
year thereafter, there shall be a six-year lifetime of taxi, to wit: Presidential Decree No. 101 grants to the Board of Transportation the power

1980 — Model 1974 4. To fix just and reasonable standards, classification, regulations,
practices, measurements, or service to be furnished, imposed,
observed, and followed by operators of public utility motor vehicles.
1981 — Model 1975, etc.

Section 2 of said Decree provides procedural guidelines for said agency to

All taxis of earlier models than those provided above are hereby ordered
withdrawn from public service as of the last day of registration of each
particular year and their respective plates shall be surrendered directly to the
Board of Transportation for subsequent turnover to the Land Transportation
Commission.
For an orderly implementation of this Memorandum Circular, the rules herein
shall immediately be effective in Metro-Manila. Its implementation outside
Metro- Manila shall be carried out only after the project has been
implemented in Metro-Manila and only after the date has been determined by
the Board.
Pursuant to the above BOT circular, respondent Director of the Bureau of
Land Transportation (BLT) issued Implementing Circular No. 52, dated
August 15, 1980, instructing the Regional Director, the MV Registrars and
other personnel of BLT, all within the National Capitol Region, to implement
said Circular, and formulating a schedule of phase-out of vehicles to be
allowed and accepted for registration as public conveyances. To quote said
Circular:
Pursuant to BOT Memo-Circular No. 77-42, taxi units with year
models over six (6) years old are now banned from operating as
public utilities in Metro Manila. As such the units involved should
be considered as automatically dropped as public utilities and,
therefore, do not require any further dropping order from the BOT.
Henceforth, taxi units within the National Capitol Region having year
models over 6 years old shall be refused registration.
On January 27, 1981, petitioners filed a Petition with the BOT, docketed as
Case No. 80-7553, seeking to nullify MC No. 77-42 or to stop its
implementation; to allow the registration and operation in 1981 and
subsequent years of taxicabs of model 1974, as well as those of earlier
models which were phased-out, provided that, at the time of registration,
they are roadworthy and fit for operation.
follow in the exercise of its powers:
Sec. 2. Exercise of powers. — In the exercise of the powers granted
in the preceding section, the Board shag proceed promptly along the
method of legislative inquiry.
Apart from its own investigation and studies, the Board, in its
discretion, may require the cooperation and assistance of the Bureau
of Transportation, the Philippine Constabulary, particularly the
Highway Patrol Group, the support agencies within the Department
of Public Works, Transportation and Communications, or any other
government office or agency that may be able to furnish useful
information or data in the formulation of the Board of any policy,
plan or program in the implementation of this Decree.
The Board may also can conferences, require the submission of
position papers or other documents, information, or data by operators
or other persons that may be affected by the implementation of this
Decree, or employ any other suitable means of inquiry.
PETITIONER CONTENTION: they were not caged upon to submit their
position papers, nor were they ever summoned to attend any conference
prior to the issuance of the questioned BOT Circular.
COURT: It is clear from the provision aforequoted, however, that the leeway
accorded the Board gives it a wide range of choice in gathering necessary
information or data in the formulation of any policy, plan or program. It is
not mandatory that it should first call a conference or require the
submission of position papers or other documents from operators or
persons who may be affected, this being only one of the options open to the
Board, which is given wide discretionary authority. Petitioners cannot
justifiably claim, therefore, that they were deprived of procedural due
process.
Neither can they state with certainty that public respondents had not availed
of other sources of inquiry prior to issuing the challenged Circulars.
operators of public conveyances are not the only primary sources of the
data and information that may be desired by the BOT.
RE: PUBLIC HEARING
the object or subject of the law provided classification is reasonable or based on
substantial distinction, which make for real differences, and that it must apply
equally to each member of the class. 8 What is required under the equal
protection clause is the uniform operation by legal means so that all persons
under Identical or similar circumstance would be accorded the same
treatment both in privilege conferred and the liabilities imposed. 9 The
challenged Circulars satisfy the foregoing criteria.

COURT: Dispensing with a public hearing prior to the issuance of the

Evident then is the conclusion that the questioned Circulars do not suffer from
Circulars is neither violative of procedural due process . As held in Central
any constitutional infirmity. To declare a law unconstitutional, the
Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972):
infringement of constitutional right must be clear, categorical and
undeniable. 10
Previous notice and hearing as elements of due process, are constitutionally
required for the protection of life or vested property rights, as well as of liberty,
WHEREFORE, the Writs prayed for are denied and this Petition is hereby
when its limitation or loss takes place in consequence of a judicial or quasi-
dismissed. No costs.
judicial proceeding, generally dependent upon a past act or event which has to be
established or ascertained. It is not essential to the validity of general rules or
regulations promulgated to govern future conduct of a class or persons or
enterprises, unless the law provides otherwise. (Emphasis supplied)

RE: ARBITRARY & OPPRESSIVE

PETITIONER CONTENTION: fixing the ceiling at six (6) years is arbitrary

and oppressive because the roadworthiness of taxicabs depends upon their
kind of maintenance and the use to which they are subjected, and,
therefore, their actual physical condition should be taken into consideration
at the time of registration.

RESPONDENT CONTENTION: it is impractical to subject every taxicab

to constant and recurring evaluation, not to speak of the fact that it can open
the door to the adoption of multiple standards, possible collusion, and even graft
and corruption.

COURT: A reasonable standard must be adopted to apply to an vehicles

affected uniformly, fairly, and justly. The span of six years supplies that
reasonable standard. The product of experience shows that by that time taxis
have fully depreciated, their cost recovered, and a fair return on investment
obtained. They are also generally dilapidated and no longer fit for safe and
comfortable service to the public specially considering that they are in
continuous operation practically 24 hours everyday in three shifts of eight hours
per shift. With that standard of reasonableness and absence of arbitrariness,
the requirement of due process has been met.

RE: EQUAL PROTECTION

PETITIONER CONTENTION: the Circular in question violates their right to

equal protection of the law because the same is being enforced in Metro
Manila only and is directed solely towards the taxi industry.

COURT: At the outset it should be pointed out that implementation outside

Metro Manila is also envisioned in Memorandum Circular No. 77-42. To
repeat the pertinent portion:

For an orderly implementation of this Memorandum

Circular, the rules herein shall immediately be effective in
Metro Manila. Its implementation outside Metro Manila
shall be carried out only after the project has been
implemented in Metro Manila and only after the date
has been determined by the Board. 4

In fact, it is the understanding of the Court that implementation of the Circulars

in Cebu City is already being effected, with the BOT in the process of
conducting studies regarding the operation of taxicabs in other cities.

REASON WHY METRO MANILA: The Board's reason for enforcing the
Circular initially in Metro Manila is that taxicabs in this city, compared to
those of other places, are subjected to heavier traffic pressure and more
constant use. This is of common knowledge. Considering that traffic conditions
are not the same in every city, a substantial distinction exists so that
infringement of the equal protection clause can hardly be successfully claimed.

PURPOSE OF CIRCULAR: As enunciated in the preambular clauses of the

challenged BOT Circular, the overriding consideration is the safety and
comfort of the riding public from the dangers posed by old and dilapidated
taxis.

The State, in the exercise, of its police power, can prescribe regulations to
promote the health, morals, peace, good order, safety and general welfare of the
people. It can prohibit all things hurtful to comfort, safety and welfare of
society. 5 It may also regulate property rights. 6 In the language of Chief
Justice Enrique M. Fernando "the necessities imposed by public welfare may
justify the exercise of governmental authority to regulate even if thereby
certain groups may plausibly assert that their interests are disregarded".  7

In so far as the non-application of the assailed Circulars to other transportation

services is concerned, it need only be recalled that the equal protection clause
does not imply that the same treatment be accorded all and sundry. It applies to
things or persons Identically or similarly situated. It permits of classification of