76. Pangasinan Transportation Co., Inc. v. Public Service Commission, G.R. No. 47065. June 26, 1940; 70 Phil.

221

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 47065             June 26, 1940
PANGASINAN TRANSPORTATION CO., INC., petitioner,
vs.
THE PUBLIC SERVICE COMMISSION, respondent.
C. de G. Alvear for petitioner.
Evaristo R. Sandoval for respondent.
LAUREL, J.:
The petitioner has been engaged for the past twenty years in the business of transporting passengers in the Province
of Pangasinan and Tarlac and, to a certain extent, in the Province of Nueva Ecija and Zambales, by means of motor
vehicles commonly known as TPU buses, in accordance with the terms and conditions of the certificates of public
convenience issued in its favor by the former Public Utility Commission in cases Nos. 24948, 30973, 36830, 32014 and
53090. On August 26, 1939, the petitioner filed with the Public Service Commission an application for authorization to
operate ten additional new Brockway trucks (case No. 56641), on the ground that they were needed to comply with the
terms and conditions of its existing certificates and as a result of the application of the Eight Hour Labor Law. In the
decision of September 26, 1939, granting the petitioner's application for increase of equipment, the Public Service
Commission ordered:
Y de acuerdo con que se provee por el articulo 15 de la ley No. 146 del Commonwealth, tal como ha sido
enmendada por el articulo 1 de la Ley No. 454, por la presente se enmienda las condiciones de los certificados
de convenciencia publica expedidos en los expedientes Nos. 24948, 30973, 36831, 32014 y la authorizacion el
el expediente No. 53090, asi que se consideran incorporadas en los mismos las dos siguientes condiciones:
Que los certificados de conveniencia publica y authorizacion arriba mencionados seran validos y subsistentes
solamente durante de veinticinco (25) anos, contados desde la fecha de la promulgacion de esta decision.
Que la empresa de la solicitante porda ser adquirida por el Commonwealth de Filipinas o por alguna
dependencia del mismo en cualquier tiempo que lo deseare previo pago del precio d costo de su equipo util,
menos una depreciacion razonable que se ha fijar por la Comision al tiempo de su adquisicion.
Not being agreeable to the two new conditions thus incorporated in its existing certificates, the petitioner filed on
October 9, 1939 a motion for reconsideration which was denied by the Public Service Commission on November 14,
1939. Whereupon, on November 20, 1939, the present petition for a writ of certiorari was instituted in this court praying
that an order be issued directing the secretary of the Public Service Commission to certify forthwith to this court the
records of all proceedings in case No. 56641; that this court, after hearing, render a decision declaring section 1 of
Commonwealth Act No. 454 unconstitutional and void; that, if this court should be of the opinion that section 1 of
Commonwealth Act No. 454 is constitutional, a decision be rendered declaring that the provisions thereof are not
applicable to valid and subsisting certificates issued prior to June 8, 1939. Stated in the language of the petitioner, it is
contended:
1. That the legislative powers granted to the Public Service Commission by section 1 of Commonwealth Act
No. 454, without limitation, guide or rule except the unfettered discretion and judgment of the Commission,
constitute a complete and total abdication by the Legislature of its functions in the premises, and for that
reason, the Act, in so far as those powers are concerned, is unconstitutional and void.
2. That even if it be assumed that section 1 of Commonwealth Act No. 454, is valid delegation of legislative
powers, the Public Service Commission has exceeded its authority because: (a) The Act applies only to future
certificates and not to valid and subsisting certificates issued prior to June 8, 1939, when said Act took effect,
and (b) the Act, as applied by the Commission, violates constitutional guarantees.
Section 15 of Commonwealth Act No. 146, as amended by section 1 of Commonwealth Act No. 454, invoked by the
respondent Public Service Commission in the decision complained of in the present proceedings, reads as follows:
With the exception to those enumerated in the preceding section, no public service shall operate in the
Philippines without possessing a valid and subsisting certificate from the Public Service Commission, known as
"certificate of public convenience," or "certificate of convenience and public necessity," as the case may be, to
the effect that the operation of said service and the authorization to do business will promote the public
interests in a proper and suitable manner.
The Commission may prescribed as a condition for the issuance of the certificate provided in the preceding
paragraph that the service can be acquired by the Commonwealth of the Philippines or by any instrumentality
thereof upon payment of the cost price of its useful equipment, less reasonable depreciation; and likewise, that
 the certificate shall valid only for a definite period of time; and that the violation of any of these conditions shall
produce the immediate cancellation of the certificate without the necessity of any express action on the part of
the Commission.
In estimating the depreciation, the effect of the use of the equipment, its actual condition, the age of the model,
or other circumstances affecting its value in the market shall be taken into consideration.
The foregoing is likewise applicable to any extension or amendment of certificates actually force and to those
which may hereafter be issued, to permits to modify itineraries and time schedules of public services and to
authorization to renew and increase equipment and properties.
Under the first paragraph of the aforequoted section 15 of Act No. 146, as amended, no public service can operate
without a certificate of public convenience or certificate of convenience and public necessity to the effect that the
operation of said service and the authorization to do business will "public interests in a proper and suitable manner."
Under the second paragraph, one of the conditions which the Public Service Commission may prescribed the issuance
of the certificate provided for in the first paragraph is that "the service can be acquired by the Commonwealth of the
Philippines or by any instrumental thereof upon payment of the cost price of its useful equipment, less reasonable
depreciation," a condition which is virtually a restatement of the principle already embodied in the Constitution, section
6 of Article XII, which provides that "the State may, in the interest of national welfare and defense, establish and
operate industries and means of transportation and communication, and, upon payment of just compensation, transfer
to public ownership utilities and other private enterprises to be operated by the Government. "Another condition which
the Commission may prescribed, and which is assailed by the petitioner, is that the certificate "shall be valid only for a
definite period of time." As there is a relation between the first and second paragraphs of said section 15, the two
provisions must be read and interpreted together. That is to say, in issuing a certificate, the Commission must
necessarily be satisfied that the operation of the service under said certificate during a definite period fixed therein "will
promote the public interests in a proper and suitable manner." Under section 16 (a) of Commonwealth Act. No. 146
which is a complement of section 15, the Commission is empowered to issue certificates of public convenience
whenever it "finds that the operation of the public service proposed and the authorization to do business will promote
the public interests in a proper and suitable manner." Inasmuch as the period to be fixed by the Commission under
section 15 is inseparable from the certificate itself, said period cannot be disregarded by the Commission in
determining the question whether the issuance of the certificate will promote the public interests in a proper and
suitable manner. Conversely, in determining "a definite period of time," the Commission will be guided by "public
interests," the only limitation to its power being that said period shall not exceed fifty years (sec. 16 (a), Commonwealth
Act No. 146; Constitution, Art. XIII, sec. 8.) We have already ruled that "public interest" furnishes a sufficient standard.
(People vs. Fernandez and Trinidad, G. R. No. 45655, promulgated June 15, 1938; People vs. Rosenthal and
Osmeña, G. R. Nos. 46076 and 46077, promulgated June 12, 1939, citing New York Central Securities
Corporation vs. U.S.A., 287 U.S. 12, 24, 25, 77 Law. ed. 138, 145, 146; Schenchter Poultry Corporation vs. I.S., 295,
540, 79 Law. ed. 1570, 1585; Ferrazzini vs. Gsell, 34 Phil., 697, 711-712.)
Section 8 of Article XIII of the Constitution provides, among other things, that no franchise, certificate, or any other form
of authorization for the operation of a public utility shall be "for a longer period than fifty years," and when it was
ordained, in section 15 of Commonwealth Act No. 146, as amended by Commonwealth Act No. 454, that the Public
Service Commission may prescribed as a condition for the issuance of a certificate that it "shall be valid only for a
definite period of time" and, in section 16 (a) that "no such certificates shall be issued for a period of more than fifty
years," the National Assembly meant to give effect to the aforesaid constitutional mandate. More than this, it has
thereby also declared its will that the period to be fixed by the Public Service Commission shall not be longer than fifty
years. All that has been delegated to the Commission, therefore, is the administrative function, involving the use
discretion, to carry out the will of the National Assembly having in view, in addition, the promotion of "public interests in
a proper and suitable manner." The fact that the National Assembly may itself exercise the function and authority thus
conferred upon the Public Service Commission does not make the provision in question constitutionally objectionable.
The theory of the separation of powers is designed by its originators to secure action and at the same time to forestall
overaction which necessarily results from undue concentration of powers, and thereby obtain efficiency and prevent
deposition. Thereby, the "rule of law" was established which narrows the range of governmental action and makes it
subject to control by certain devices. As a corollary, we find the rule prohibiting delegation of legislative authority, and
from the earliest time American legal authorities have proceeded on the theory that legislative power must be
exercised by the legislature alone. It is frankness, however, to confess that as one delves into the mass of judicial
pronouncement, he finds a great deal of confusion. One thing, however, is apparent in the development of the principle
of separation of powers and that is that the maxim of delegatus non potest delegari or delegata potestas non potest
delegari, attributed to Bracton (De Legius et Consuetedinious Angliae, edited by G. E. Woodbine, Yale University
Press, 1922, vol. 2, p. 167) but which is also recognized in principle in the Roman Law (D. 17.18.3), has been made to
adapt itself to the complexities of modern governments, giving rise to the adoption, within certain limits, of the principle
of "subordinate legislation," not only in the United States and England but in practically all modern governments.
(People vs. Rosenthal and Osmeña, G. R. Nos. 46076 and 46077, promulgated June 12, 1939.) Accordingly, with the
growing complexity of modern life, the multiplication of the subjects of governmental regulation, and the increased
difficulty of administering the laws, there is a constantly growing tendency toward the delegation of greater powers by
the legislature, and toward the approval of the practice by the court. (Dillon Catfish Drainage Dist, v. Bank of Dillon,
141 S. E. 274, 275, 143 S. Ct. 178; State vs. Knox County, 54 S. W. 2d. 973, 976, 165 Tenn. 319.) In harmony with
such growing tendency, this Court, since the decision in the case of Compañia General de Tabacos de Filipinas vs.
Board of Public Utility Commissioner (34 Phil., 136), relied upon by the petitioner, has, in instances, extended its seal
of approval to the "delegation of greater powers by the legislature." (Inchausti Steamship Co. vs. Public Utility
Commissioner, 44 Phil., Autobus Co. vs. De Jesus, 56 Phil., 446; People vs. Fernandez & Trinidad, G. R. No. 45655,
promulgated June 15, 1938; People vs. Rosenthal & Osmeña, G. R. Nos. 46076, 46077, promulgated June 12, 1939;
and Robb and Hilscher vs. People, G. R. No. 45866, promulgated June 12, 1939.).
Under the fourth paragraph of section 15 of Commonwealth Act No. 146, as amended by Commonwealth Act No. 454,
the power of the Public Service Commission to prescribed the conditions "that the service can be acquired by the
Commonwealth of the Philippines or by any instrumentality thereof upon payment of the cost price of its useful
equipment, less reasonable," and "that the certificate shall be valid only for a definite period of time" is expressly made
applicable "to any extension or amendment of certificates actually in force" and "to authorizations to renew and
increase equipment and properties." We have examined the legislative proceedings on the subject and have found that
these conditions were purposely made applicable to existing certificates of public convenience. The history of
Commonwealth Act No. 454 reveals that there was an attempt to suppress, by way of amendment, the sentence "and
likewise, that the certificate shall be valid only for a definite period of time," but the attempt failed:
xxx     xxx     xxx
Sr. CUENCO. Señor Presidente, para otra enmienda. En la misma pagina, lineas 23 y 24, pido que se
supriman las palabras 'and likewise, that the certificate shall be valid only for a definite period time.' Esta
disposicion del proyecto autoriza a la Comision de Servicios Publicos a fijar un plazo de vigencia certificado de
conveniencia publica. Todo el mundo sabe que bo se puede determinar cuando los intereses del servicio
publico requiren la explotacion de un servicio publico y ha de saber la Comision de Servisios, si en un tiempo
determinado, la explotacion de algunos buses en cierta ruta ya no tiene de ser, sobre todo, si tiene en cuenta;
que la explotacion de los servicios publicos depende de condiciones flutuantes, asi como del volumen como
trafico y de otras condiciones. Ademas, el servicio publico se concede por la Comision de Servicios Publicos el
interes publico asi lo exige. El interes publico no tiene duracion fija, no es permanente; es un proceso mas o
menos indefinido en cuanto al tiempo. Se ha acordado eso en el caucus de anoche.
EL PRESIDENTE PRO TEMPORE. ¿Que dice el Comite?
Sr. ALANO. El Comite siente tener que rechazar esa enmienda, en vista de que esto certificados de
conveniencia publica es igual que la franquicia: sepuede extender. Si los servicios presentados por la
compañia durante el tiempo de su certificado lo require, puede pedir la extension y se le extendera; pero no
creo conveniente el que nosotros demos un certificado de conveniencia publica de una manera que podria
pasar de cincuenta anos, porque seria anticonstitucional.
xxx     xxx     xxx
By a majority vote the proposed amendment was defeated. (Sesion de 17 de mayo de 1939, Asamblea Nacional.)
The petitioner is mistaken in the suggestion that, simply because its existing certificates had been granted before June
8, 1939, the date when Commonwealth Act No. 454, amendatory of section 15 of Commonwealth Act No. 146, was
approved, it must be deemed to have the right of holding them in perpetuity. Section 74 of the Philippine Bill provided
that "no franchise, privilege, or concession shall be granted to any corporation except under the conditions that it shall
be subject to amendment, alteration, or repeal by the Congress of the United States." The Jones Law, incorporating a
similar mandate, provided, in section 28, that "no franchise or right shall be granted to any individual, firm, or
corporation except under the conditions that it shall be subject to amendment, alteration, or repeal by the Congress of
the United States." Lastly, the Constitution of the Philippines provided, in section 8 of Article XIII, that "no franchise or
right shall be granted to any individual, firm, or corporation, except under the condition that it shall be subject to
amendment, alteration, or repeal by the National Assembly when the public interest so requires." The National
Assembly, by virtue of the Constitution, logically succeeded to the Congress of the United States in the power to
amend, alter or repeal any franchise or right granted prior to or after the approval of the Constitution; and when
Commonwealth Acts Nos. 146 and 454 were enacted, the National Assembly, to the extent therein provided, has
declared its will and purpose to amend or alter existing certificates of public convenience.
Upon the other hand, statutes enacted for the regulation of public utilities, being a proper exercise by the state of its
police power, are applicable not only to those public utilities coming into existence after its passage, but likewise to
those already established and in operation.
Nor is there any merit in petitioner's contention, that, because of the establishment of petitioner's operations
prior to May 1, 1917, they are not subject to the regulations of the Commission. Statutes for the regulation of
public utilities are a proper exercise by the state of its police power. As soon as the power is exercised, all
phases of operation of established utilities, become at once subject to the police power thus called into
 operation. Procedures' Transportation Co. v. Railroad Commission, 251 U. S. 228, 40 Sup. Ct. 131, 64 Law.
ed. 239, Law v. Railroad Commission, 184 Cal. 737, 195 Pac. 423, 14 A. L. R. 249. The statute is applicable
not only to those public utilities coming into existence after its passage, but likewise to those already
established and in operation. The 'Auto Stage and Truck Transportation Act' (Stats. 1917, c. 213) is a statute
passed in pursuance of the police power. The only distinction recognized in the statute between those
established before and those established after the passage of the act is in the method of the creation of their
operative rights. A certificate of public convenience and necessity it required for any new operation, but no
such certificate is required of any transportation company for the operation which was actually carried on in
good faith on May 1, 1917, This distinction in the creation of their operative rights in no way affects the power
of the Commission to supervise and regulate them. Obviously the power of the Commission to hear and
dispose of complaints is as effective against companies securing their operative rights prior to May 1, 1917, as
against those subsequently securing such right under a certificate of public convenience and necessity. (Motor
Transit Co. et al. v. Railroad Commission of California et al., 209 Pac. 586.)
Moreover, Commonwealth Acts Nos. 146 and 454 are not only the organic acts of the Public Service Commission but
are "a part of the charter of every utility company operating or seeking to operate a franchise" in the Philippines.
(Streator Aqueduct Co. v. et al., 295 Fed. 385.) 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 ceased to be juris privati only." 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 discounting the
use, but so long as he maintains the use he must submit to control. 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 public utilities may be
exercised through boards of commissioners. (Fisher vs. Yangco Steamship Company, 31 Phil., 1, citing
Munn vs. Illinois, 94 U.S. 113; Georgia R. & Bkg. Co. vs. Smith, 128 U.S. 174; Budd vs. New York, 143 U.S. 517; New
York etc. R. Co. vs. Bristol 151 U.S. 556, 571; Connecticut etc. R. Co. vs. Woodruff, 153 U.S. 689; Louisville etc. Ry
Co. vs. Kentucky, 161 U.S. 677, 695.) This right of the state to regulate public utilities is founded upon the police
power, and statutes for the control and regulation of utilities are a legitimate exercise thereof, for the protection of the
public as well as of the utilities themselves. Such statutes are, therefore, not unconstitutional, either impairing the
obligation of contracts, taking property without due process, or denying the equal protection of the laws, especially
inasmuch as the question whether or not private property shall be devoted to a public and the consequent burdens
assumed is ordinarily for the owner to decide; and if he voluntarily places his property in public service he cannot
complain that it becomes subject to the regulatory powers of the state. (51 C. J., sec. 21, pp. 9-10.) in the light of
authorities which hold that a certificate of public convenience constitutes neither a franchise nor contract, confers no
property right, and is mere license or privilege. (Burgess vs. Mayor & Alderman of Brockton, 235 Mass. 95, 100, 126 N.
E. 456; Roberto vs. Commisioners of Department of Public Utilities, 262 Mass. 583, 160 N. E. 321;
Scheible vs. Hogan, 113 Ohio St. 83, 148 N. E. 581; Martz vs. Curtis [J. L.] Cartage Co. [1937], 132 Ohio St. 271, 7 N.
E. [d] 220; Manila Yellow Taxicab Co. vs. Sabellano, 59 Phil., 773.)
Whilst the challenged provisions of Commonwealth Act No. 454 are valid and constitutional, we are, however, of the
opinion that the decision of the Public Service Commission should be reversed and the case remanded thereto for
further proceedings for the reason now to be stated. The Public Service Commission has power, upon proper notice
and hearing, "to amend, modify or revoke at any time any certificate issued under the provisions of this Act, whenever
the facts and circumstances on the strength of which said certificate was issued have been misrepresented or
materially changed." (Section 16, par. [m], Commonwealth Act No. 146.) The petitioner's application here was for an
increase of its equipment to enable it to comply with the conditions of its certificates of public convenience. On the
matter of limitation to twenty five (25) years of the life of its certificates of public convenience, there had been neither
notice nor opportunity given the petitioner to be heard or present evidence. The Commission appears to have taken
advantage of the petitioner to augment petitioner's equipment in imposing the limitation of twenty-five (25) years which
might as well be twenty or fifteen or any number of years. This is, to say the least, irregular and should not be
sanctioned. There are cardinal primary rights which must be respected even in proceedings of this character. The first
of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own
case and submit evidence in support thereof. In the language of Chief Justice Hughes, in Morgan v. U.S., (304 U.S. 1,
58 S. Ct. 773, 999, 82 Law. ed. 1129), "the liberty and property of the citizen shall be protected by the rudimentary
requirements of fair play." Not only must the party be given an opportunity to present his case and to adduce evidence
tending to establish the rights which he asserts but the tribunal must consider the evidence presented. (Chief Justice
Hughes in Morgan vs. U.S., 298 U.S. 468, 56 S. Ct. 906, 80 :Law. ed. 1288.) In the language of this Court in  Edwards
vs. McCoy (22 Phil., 598), "the right to adduce evidence, without the corresponding duty on the part of the board to
consider it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is presented can
thrust it aside without or consideration." While the duty to deliberate does not impose the obligation to decide right, it
does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. A
decision with absolutely nothing to support it is a nullity, at least when directly attacked. (Edwards vs. McCoy, supra.)
This principle emanates from the more fundamental principle that the genius of constitutional government is contrary to
the vesting of unlimited power anywhere. Law is both a grant and a limitation upon power.
The decision appealed from is hereby reversed and the case remanded to the Public Service Commission for further
proceedings in accordance with law and this decision, without any pronouncement regarding costs. So ordered.
Avanceña, C.J., Imperial, Diaz, Concepcion and Moran, JJ., concur.
77. Luque v. Villegas, G.R. No. L-22545. Nov. 28, 1969; 30 SCRA 408

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-22545      November 28, 1969
BALDOMERO S. LUQUE AND OTHER PASSENGERS FROM THE PROVINCE OF CAVITE AND BATANGAS;
AND PUBLIC SERVICE OPERATORS FILOMENA ABALOS, AND OTHERS, petitioners,
vs.
HON. ANTONIO J. VILLEGAS, MAYOR OF MANILA; MUNICIPAL BOARD OF MANILA; MANILA POLICE
DEPARTMENT; HON. ENRIQUE MEDINA, PSC COMMISSIONER; PUBLIC SERVICE COMMISSION; SAULOG
TRANSIT, INC.; AND BATANGAS TRANSPORTATION CO., INC., respondents.
SANCHEZ, J.:
Challenged as unconstitutional, illegal and unjust in these original proceedings for certiorari and mandamus are two
substantially identical bus ban measures: (1) Ordinance No. 4986 of the City of Manila approved on July 13, 1964,
entitled "An Ordinance Rerouting Traffic on Roads and Streets in the City of Manila, and for Other Purposes," and (2)
Administrative Order No. 1, series of 1964, dated February 7, 1964, and Administrative Order No. 3, series of 1964,
dated April 21, 1964, both issued by Commissioner Enrique Medina (hereinafter referred to as the Commissioner) of
the Public Service Commission.
Original petitioners are passengers from the provinces of Cavite and Batangas who ride on buses plying along the
routes between the said provinces and Manila. Other petitioners are public service operators operating PUB and PUJ
public service vehicles from the provinces with terminals in Manila, while the rest are those allegedly operating PUB,
PUJ or AC motor vehicles operating within Manila and suburbs.
Ordinance 4986, amongst others, provides that:
RULE II. ENTRY POINTS AND ROUTES OF PROVINCIAL PASSENGER BUSES AND JEEPNEYS
1. Provincial passenger buses and jeepneys (PUB and PUJ) shall be allowed to enter Manila, but only through
the following entry points and routes, from 6:30 A.M. to 8:30 P.M. every day except Sundays and holidays:
xxx      xxx      xxx
(m) Those coming from the south through F. B. Harrison shall proceed to Mabini; turn right to Harrison
Boulevard; turn right to Taft Avenue and proceed towards Pasay City;
(n) Those coming from the south through Taft Avenue shall turn left at Vito Cruz; turn right to Dakota;
turn right to Harrison Boulevard; turn right to Taft Avenue; thence proceed towards Pasay City;
Loading and unloading shall be allowed only at Harrison Boulevard, between A. Mabini and Taft
Avenue;
xxx      xxx      xxx
RULE III. FLEXIBLE SHUTTLE BUS SERVICE
1. In order that provincial commuters shall not be unduly inconvenienced as a result of the implementation of
these essential traffic control regulations, operators of provincial passenger buses shall be allowed to provide
buses to shuttle their passengers from their respective entry control points, under the following conditions:
(a) Each provincial bus company or firm shall be allowed such number of shuttle buses proportionate to
the number of units authorized it, the ratio to be determined by the Chief, Traffic Control Bureau, based
on his observations as to the actual needs of commuters and traffic volume; in no case shall the
allocation be more than one shuttle bus for every 10 authorized units, or fraction thereof.
(b) No shuttle bus shall enter Manila unless the same shall have been provided with identification
stickers as required under Rule IV hereof, which shall be furnished and allocated by the Chief, Traffic
Control Bureau to each provincial bus company or firm.
(c) All such shuttle buses are not permitted to load or unload or to pick and/or drop passengers along
the way but must do so only in the following places:
xxx      xxx      xxx
(3) South
(a) Harrison Boulevard, between Dakota and Taft Avenue.
Administrative Order No. 1, series of 1964, issued by the Commissioner, in part, provides:
2. All public utilities including jeepneys heretofore authorized to operate from the City of Manila to any point in
Luzon, beyond the perimeter of Greater Manila, shall carry the words "For Provincial Operation" in bold and
 clear types on both sides or on one side and at the back of the vehicle and must not be less than 12 inches in
dimension. All such vehicles marked "For Provincial Operation" are authorized to operate outside the perimeter
of Greater Manila in accordance with their respective certificates of public convenience, and are not authorized
to enter or to operate beyond the boundary line fixed in our order of March 12, 1963 and July 22, 1963, with the
exception of those vehicles authorized to carry their provincial passengers thru the boundary line up to their
Manila terminal which shall be identified by a sticker signed and furnished by the PSC and by the Mayors of the
affected Cities and municipalities, and which shall be carried on a prominent place of the vehicle about the
upper middle part of the windshield.
xxx      xxx      xxx
All such public utility vehicles authorized by this Order to enter the City of Manila and to carry their passengers
thru the boundary line, are not permitted to load or unload or to pick and/or drop passengers along the way, but
must do so only in the following places:
xxx      xxx      xxx
c. Vehicles coming from the SOUTH may load or unload at the San Andres-Taft Rotonda; at Plaza Lawton or at
the Corner of Harrison and Mabini Streets near the Manila Zoo.
On April 21, 1964, the Commissioner issued Administrative Order No. 3 which resolved motions for reconsideration (of
the first administrative order — Administrative Order No. 1, series of 1964) filed by several affected operators. This
order (No. 3), amongst others, states that only 10% of the provincial buses and jeepneys shall be allowed to enter
Manila; however, provincial buses and jeepneys "operating within a radius of 50 kms. from Manila City Hall and whose
business is more on the Manila end than on the provincial end are given fifteen per cent to prevent a dislocation of
their business; provided that operators having less than five units are not permitted to cross the boundary and shall
operate exclusively on the provincial end." This order also allocated the number of units each provincial bus operator is
allowed to operate within the City of Manila.
1. On the main, nothing new there is in the present petition. For, the validity of Ordinance 4986 and the
Commissioner's Administrative Order No. 1, series of 1964, here challenged, has separately passed judicial tests in
two cases brought before this Court.
In Lagman vs. City of Manila (June 30, 1966), 17 SCRA 579, petitioner Lagman was an operator of PU auto trucks with
fixed routes and regular terminals for the transportation of passengers and freight on the Bocaue (Bulacan) —
Parañaque (Rizal) line via Rizal Avenue, Plaza Goiti, Sta. Cruz Bridge, Plaza Lawton, P. Burgos, Taft Avenue, and Taft
Avenue Extension, Manila. He sought to prohibit the City of Manila, its officers and agents, from enforcing Ordinance
4986. His ground was that said ordinance was unconstitutional, illegal, ultra vires and null and void. He alleged,
amongst others, that (1) "the power conferred upon respondent City of Manila, under said Section 18 (hh) of Republic
Act No. 409, as amended, does not include the right to enact an ordinance such as the one in question, which has the
effect of amending or modifying a certificate of public convenience granted by the Public Service Commission, because
any amendment or modification of said certificate is solely vested by law in the latter governmental agency, and only
after notice and hearing (Sec. 16 [m], Public Service Act); but since this procedure was not adopted or followed by
respondents in enacting the disputed ordinance, the same is likewise illegal and null and void"; (2) "the enforcement of
said ordinance is arbitrary, oppressive and unreasonable because the city streets from which he had been prevented
to operate his buses are the cream of his business"; and (3) "even assuming that Ordinance No. 4986 is valid, it is only
the Public Service Commission which can require compliance with its provisions (Sec. 17[j], Public Service Act), but
since its implementation is without the sanction or approval of the Commission, its enforcement is also unauthorized
and illegal." This Court, in a decision impressive because of its unanimity, upheld the ordinance. Speaking through Mr.
Justice J.B.L. Reyes, we ruled:
First, as correctly maintained by respondents, Republic Act No. 409, as amended, otherwise known as the
Revised Charter of the City of Manila, is a special law and of later enactment than Commonwealth Act No. 548
and the Public Service Law (Commonwealth Act No. 146, as amended), so that even if conflict exists between
the provisions of the former act and the latter acts, Republic Act No. 409 should prevail over both
Commonwealth Acts Nos. 548 and 146. In Cassion vs. Banco Nacional Filipino, 89 Phil. 560, 561, this Court
said:
". . . for with or without an express enactment it is a familiar rule of statutory construction that to the
extent of any necessary repugnancy between a general and a special law or provision, the latter will
control the former without regard to the respective dates of passage."
It is to be noted that Commonwealth Act No. 548 does not confer an exclusive power or authority upon the
Director of Public Works, subject to the approval of the Secretary of Public Works and Communications, to
promulgate rules and regulations relating to the use of and traffic on national roads or streets. This being the
case, section 18 (hh) of the Manila Charter is deemed enacted as an exception to the provisions of
Commonwealth Act No. 548.
xxx      xxx      xxx
 Second, the same situation holds true with respect to the provision of the Public Service Act. Although the
Public Service Commission is empowered, under its Section 16(m), to amend, modify or revoke certificates of
public convenience after notice and hearing, yet there is no provision, specific or otherwise, which can be found
in this statute (Commonwealth Act No. 146) vesting power in the Public Service Commission to superintend,
regulate, or control the streets of respondent City or suspend its power to license or prohibit the occupancy
thereof. On the other hand, this right or authority, as hereinabove concluded is conferred upon respondent City
of Manila. The power vested in the Public Service Commission under Section 16(m) is, therefore, subordinate
to the authority granted to respondent City, under said section 18 (hh). . . .
xxx      xxx      xxx
That the powers conferred by law upon the Public Service Commission were not designed to deny or
supersede the regulatory power of local governments over motor traffic, in the streets subject to their control is
made evident by section 17 (j) of the Public Service Act (Commonwealth Act No. 146) that provides as follows:
"SEC. 17. Proceedings of Commission without previous hearing. — The Commission shall have power,
without previous hearing, subject to established limitations and exceptions, and saving provisions to the
contrary:
xxx      xxx      xxx.
(j) To require any public service to comply with the laws of the Philippines, and with any
provincial resolution or municipal ordinance relating thereto, and to conform to the duties
imposed upon it thereby, or by the provisions of its own charter, whether obtained under any
general or special law of the Philippines." (Emphasis supplied)
The petitioner's contention that, under this section, the respective ordinances of the City can only be enforced
by the Commission alone is obviously unsound. Subsection (j) refers not only to ordinances but also to "the
laws of the Philippines," and it is plainly absurd to assume that even laws relating to public services are to
remain a dead letter without the placet of the Commission; and the section makes no distinction whatever
between enforcement of laws and that of municipal ordinances.
The very fact, furthermore, that the Commission is empowered, but not required, to demand compliance with
apposite laws and ordinances proves that the Commission's powers are merely supplementary to those of
state organs, such as the police, upon which the enforcement of laws primarily rests.
Third, the implementation of the ordinance in question cannot be validly assailed as arbitrary, oppressive and
unreasonable. Aside from the fact that there is no evidence to substantiate this charge it is not disputed that
petitioner has not been totally banned or prohibited from operating all his buses, he having been allowed to
operate two (2) "shuttle" buses within the city limits. 1
The second case for certiorari and prohibition, filed by same petitioner in the first case just mentioned, is entitled
"Lagman vs. Medina" (December 24, 1968), 26 SCRA 442. Put at issue there is the validity of the Commissioner's
Administrative Order No. 1, series of 1964, also disputed herein. It was there alleged, inter alia, that "the provisions of
the bus ban had not been incorporated into his certificate of public convenience"; "to be applicable to a grantee of such
certificate subsequently to the issuance of the order establishing the ban, there should be a decision, not merely by the
Commissioner, but, also, by the PSC, rendered after due notice and hearing, based upon material changes in the facts
and circumstances under which the certificate had been granted"; and "the ban is unfair, unreasonable and
oppressive." We dismissed this petition and upheld the validity of the questioned order of the Commissioner. On the
aforequoted issues, Chief Justice Roberto Concepcion, speaking for an equally unanimous Court, said —
Petitioner's claim is devoid of merit, inasmuch as:
1. The terms and conditions of the bus ban established by the Commissioner are substantially identical to
those contained in Ordinance No. 4986 of the City of Manila 'rerouting traffic on roads and streets' therein,
approved on July 30, 1964. In G.R. No. L-23305, entitled "Lagman vs. City of Manila, petitioner herein assailed
the validity of said ordinance," upon the ground, among others, that it tended to amend or modify certificates of
public conveniences issued by the PSC; that the power therein exercised by the City of Manila belongs to the
PSC; and that the ordinance is arbitrary, oppressive and unreasonable. In a decision promulgated on June 30,
1966, this Court rejected this pretense and dismissed Lagman's petition in said case.
2. Petitioner's certificate of public convenience, like all other similar certificates, was issued subject to the
condition that operators shall observe and comply [with] . . . all the rules and regulations of the Commission
relative to PUB service," and the contested orders — issued pursuant to Sections 13 (a), 16 (g) and 17 (a) of
Commonwealth Act 146, as amended — partake of the nature of such rules and regulations.
xxx      xxx      xxx
4. The purpose of the ban — to minimize the "traffic problem in the City of Manila" and the "traffic congestion,
delays and even accidents" resulting from the free entry into the streets of said City and the operation "around
said streets, loading and unloading or picking up passengers and cargoes" of PU buses in great "number and
size" — and the letter and spirit of the contested orders are inconsistent with the exclusion of Lagman or of
 those granted certificates of public convenience subsequently to the issuance of said orders from the operation
thereof.
xxx      xxx      xxx
9. The theory to the effect that, to be valid, the aforementioned orders must be issued by the PSC, not merely
by its Commissioner, and only after due notice and hearing, is predicated upon the premise that the bus ban
operates as an amendment of petitioner's certificate of public convenience, which is false, and was not
sustained by this Court in its decision in G.R. No. L-23305, which is binding upon Lagman, he being the
petitioner in said case.2
The issues raised by Lagman in the two cases just mentioned were likewise relied upon by the petitioners in the case
now before us. But for the fact that the present petitioners raised other issues, we could have perhaps written  finis to
the present case. The obvious reason is that we find no cause or reason why we should break away from our ruling in
said cases. Petitioners herein, however, draw our attention to points which are not specifically ruled upon in
the Lagman cases heretofore mentioned.
2. Petitioners' other gripe against Ordinance 4986 is that it destroys vested rights of petitioning public services to
operate inside Manila and to proceed to their respective terminals located in the City. They would want likewise to
nullify said ordinance upon the averment that it impairs the vested rights of petitioning bus passengers to be
transported directly to downtown Manila.
It has been said that a vested right is one which is "fixed, unalterable, or irrevocable." 3 Another definition would give
vested right the connotation that it is "absolute, complete, and unconditional, to the exercise of which no obstacle
exists . . . ."4 Petitioners' citation from 16 C.J.S., pp. 642-643, 5 correctly expresses the view that when the "right to
enjoyment, present or prospective, has become the property of some particular person or persons as a present
interest," that right is a vested right. Along the same lines is our jurisprudential concept. Thus, in Benguet Consolidated
Mining Co. vs. Pineda,6 we put forth the thought that a vested right is "some right or interest in the property which has
become fixed and established, and is no longer open to doubt or controversy"; it is an "immediate fixed right of present
and future enjoyment"; it is to be contra-distinguished from a right that is "expectant or contingent." The Benguet case
also quoted from 16 C.J.S., Sec. 215, pp. 642-643, as follows: "Rights are vested when the right to enjoyment, present
or prospective, has become the property of some particular person or persons as a present interest. The right must be
absolute, complete, and unconditional, independent of a contingency, and a mere expectancy of future benefit, or a
contingent interest in property founded on anticipated continuance of existing laws, does not constitute a vested right.
So, inchoate rights which have not been acted on are not vested." 7
Of course, whether a right is vested or not, much depends upon the environmental facts. 8
Contending that they possess valid and subsisting certificates of public convenience, the petitioning public services
aver that they acquired a vested right to operate their public utility vehicles to and from Manila as appearing in their
said respective certificates of public convenience.
Petitioner's argument pales on the face of the fact that the very nature of a certificate of public convenience is at cross
purposes with the concept of vested rights. To this day, the accepted view, at least insofar as the State is concerned, is
that "a certificate of public convenience constitutes neither a franchise nor a contract, confers no property right, and is
a mere license or privilege." 9 The holder of such certificate does not acquire a property right in the route covered
thereby. Nor does it confer upon the holder any proprietary right or interest of franchise in the public
highways.10 Revocation of this certificate deprives him of no vested right. 11 Little reflection is necessary to show that the
certificate of public convenience is granted with so many strings attached. New and additional burdens, alteration of
the certificate, and even revocation or annulment thereof is reserved to the State.
We need but add that the Public Service Commission, a government agency vested by law with "jurisdiction,
supervision, and control over all public services and their franchises, equipment, and other properties" 12 is empowered,
upon proper notice and hearing, amongst others: (1) "[t]o amend, modify or revoke at any time a certificate issued
under the provisions of this Act [Commonwealth Act 146, as amended], whenever the facts and circumstances on the
strength of which said certificate was issued have been misrepresented or materially changed"; 13 and (2) "[t]o suspend
or revoke any certificate issued under the provisions of this Act whenever the holder thereof has violated or wilfully and
contumaciously refused to comply with any order, rule or regulation of the Commission or any provision of this
Act: Provided, That the Commission, for good cause, may prior to the hearing suspend for a period not to exceed thirty
days any certificate or the exercise of any right or authority issued or granted under this Act by order of the
Commission, whenever such step shall in the judgment of the Commission be necessary to avoid serious and
irreparable damage or inconvenience to the public or to private interests." 14 Jurisprudence echoes the rule that the
Commission is authorized to make reasonable rules and regulations for the operation of public services and to enforce
them.15 In reality, all certificates of public convenience issued are subject to the condition that all public services "shall
observe and comply [with] ... all the rules and regulations of the Commission relative to" the service. 16 To further
emphasize the control imposed on public services, before any public service can "adopt, maintain, or apply practices or
measures, rules, or regulations to which the public shall be subject in its relation with the public service," the
Commission's approval must first be had. 17
And more. Public services must also reckon with provincial resolutions and municipal ordinances relating to the
operation of public utilities within the province or municipality concerned. The Commission can require compliance with
these provincial resolutions or municipal ordinances. 18
Illustrative of the lack of "absolute, complete, and unconditional" right on the part of public services to operate because
of the delimitations and restrictions which circumscribe the privilege afforded a certificate of public convenience is the
following from the early (March 31, 1915) decision of this Court in Fisher vs. Yangco Steamship Company, 31 Phil. 1,
18-19:
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. (New Jersey
Steam Nav. Co. vs. Merchants Banks, 6 How. 344, 382; Munn vs. Illinois, 94 U.S. 113, 130.) 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. (New York, etc. R. Co.
vs. Bristol, 151 U.S. 556, 571; Connecticut, etc. R. Co. vs. Woodruff, 153 U.S. 689.).
xxx      xxx      xxx
. . . . 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 interests 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. (Budd vs. New York, 143 U.S.
517, 533.) 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." (Munn vs. Illinois, 94 U.S. 113;
Georgia R. & Bkg. Co. vs. Smith, 128 U.S. 174; Budd vs. New York, 143 U.S. 517; Louisville, etc. Ry. Co. vs.
Kentucky, 161 U.S. 677, 695.).
The foregoing, without more, rejects the vested rights theory espoused by petitioning bus operators.
Very little need be added to show that neither do bus passengers have a vested right to be transported directly into the
City of Manila. It would suffice if a statement be here made that the alleged right of bus passengers, to a great extent,
is dependent upon the manner public services are allowed to operate within a given area. Because, regulations
imposed upon public services directly affect the bus passengers. It is quite obvious that if buses were allowed to load
or unload solely at specific or designated places, a passenger cannot legally demand or insist that the operator load or
unload him at a place other than those specified or designated.
It is no argument to support the vested rights theory that petitioning passengers have enjoyed the privilege of having
been continuously transported even before the outbreak of the war directly without transfer from the provinces to
places inside Manila up to the respective bus terminals in said City. Times have changed. Vehicles have increased in
number. Traffic congestion has moved from bad to worse, from tolerable to critical. The number of people who use the
thoroughfares has multiplied.
3. It is because of all of these that it has become necessary for the police power of the State to step in, not for the
benefit of the few, but for the benefit of the many. Reasonable restrictions have to be provided for the use of the
thoroughfares.19 The operation of public services may be subjected to restraints and burdens, in order to secure the
general comfort.20 No franchise or right can be availed of to defeat the proper exercise of police power 21 — the authority
"to enact rules and regulations for the promotion of the general welfare."  22 So it is, that by the exercise of the police
power, which is a continuing one, a business lawful today may in the future, because of the changed situation, the
growth of population or other causes, become a menace to the public health and welfare, and be required to yield to
the public good."23 Public welfare, we have said, lies at the bottom of any regulatory measure designed "to relieve
congestion of traffic, which is, to say the least, a menace to public safety." 24 As a corollary, measures calculated to
promote the safety and convenience of the people using the thoroughfares by the regulation of vehicular traffic,
present a proper subject for the exercise of police power. 25
Both Ordinance 4986 and the Commissioner's administrative orders fit into the concept of promotion of the general
welfare. Expressive of the purpose of Ordinance 4986 is Section 1 thereof, thus — "As a positive measure to relieve
the critical traffic congestion in the City of Manila, which has grown to alarming and emergency proportions, and in the
best interest of public welfare and convenience, the following traffic rules and regulations are hereby promulgated."
Along the same lines, the bus ban instituted by the Commissioner has for its object "to minimize the 'traffic problem in
the City of Manila' and the 'traffic congestion, delays and even accidents' resulting from the free entry into the streets of
said City and the operation 'around said streets, loading and unloading or picking up passengers and cargoes' of PU
buses in great 'number and size.'"26
Police power in both was properly exercised.
4. We find no difficulty in saying that, contrary to the assertion made by petitioners, Ordinance 4986 is not a class
legislation.
It is true that inter-urban buses are allowed to enter the City of Manila, while provincial buses are not given the same
privilege, although they are allowed shuttle service into the City of Manila. There is no point, however, in placing
provincial buses on the same level as the inter-urban buses plying to and from Manila and its suburban towns and
cities (Makati, Pasay, Mandaluyong, Caloocan, San Juan, Quezon City and Navotas). Inter-urban buses are used for
transporting passengers only. Provincial buses are used for passengers and freight. Provincial buses, because of the
freight or baggage which the passengers usually bring along with them, take longer time to load or unload than inter-
urban buses. Provincial buses generally travel along national highways and provincial roads, cover long distances,
have fixed trip schedules. Provincial buses are greater in size and weight than inter-urban buses. The routes of inter-
urban buses are short, covering contiguous municipalities and cities only. Inter-urban buses mainly use city and
municipal streets.
These distinctions generally hold true between provincial passenger jeepneys and inter-urban passenger jeepneys.
No unjustified discrimination there is under the law.
The obvious inequality in treatment is but the result flowing from the classification made by the ordinance and does not
trench upon the equal protection clause. 27 The least that can be said is that persons engaged in the same business
"are subjected to different restrictions or are held entitled to different privileges under the same conditions." 28
Neither is there merit to the charge that private vehicles are being unjustifiably favored over public vehicles. Private
vehicles are not geared for profit, usually have but one destination. Public vehicles are operated primarily for profit and
for this reason are continually operated to make the most of time. Public and private vehicles belong to different
classes. Differences in class beget differences in privileges. And petitioners have no cause to complain.
The principles just enunciated have long been recognized. In Ichong vs. Hernandez,29 our ruling is that the equal
protection of the law clause "does not demand absolute equality amongst residents; it merely requires that all persons
shall be treated alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced";
and, that the equal protection clause "is not infringed by legislation which applies only to those persons falling within a
specified class, if it applies alike to all persons within such class, and reasonable grounds exist for making a distinction
between those who fall within such class and those who do not." 30
FOR THE REASONS GIVEN, the petition herein is denied.
Costs against petitioners. So ordered.
78. Raymundo v. Luneta Motor Co., G.R. No. L-39902, L-39903. Nov. 29, 1933; 58 Phil. 889
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. Nos. L-39902, L-39903             November 29, 1933
DOMINADOR RAYMUNDO, petitioner-appellant,
vs.
LUNETA MOTOR CO., ET AL., respondents-appellees.
MALCOLM, J.:
The question squarely raised in these concerns the forced sales of certificates of public convinced held by public
service operators and the liability to execution of such certificates.
Breaking into the narration of the facts at the proper point, we find Nicanor de Guzman, signing as Guzco Transit,
purchasing trucks from the Luneta Motor Co. and to pay for them executing a series of promissory notes guaranteed
by a chattel mortgage on several trucks. On failure of De Guzman or Guzco Transit to pay the promissory notes, suit
was brought in the Court of First Instance of Manila for the collection of the amount outstanding and unpaid. When the
complaint was presented, a writ of attachment was obtained against the properties of the Guzco Transit, and as a
consequence garnishment was served on the Secretary of the Public Service Commission attacking the right, title, and
participation of the Guzco Transit in the certificates of public convenience issued in cases Nos. 25635, 23914 and
24255 covering the bus transportation lines between Manila and Cardona, Rizal, and between Manila and Pililla, Rizal.
These certificates were ordered sold by the Court of First Instance of Manila, and in fact the certificates of public
convenience Nos. 25635 and 23914 were sold to the Luneta Motor Co. as the highest bidder. The approval of the
sheriff's sale was prayed for before the Public Service Commission, and is one of the cases under review.
Going back a moment, it is necessary to insert in the statement of facts that on July 16, 1932, or nine days after the
certificates were attached by the Luneta Motor Co., the same certificates, together with certificate No. 25951 and
several trucks, were sold by De Guzman for the Guzco Transit to Dominador Raymundo. The approval of this sale was
sought from the Public Service commission, and is the other case now under review. On the two cases being heard
together, the commission in its decision approved the sale at public auction in favor of the Luneta Motor Co., and
disapproved the sale made to Dominador Raymundo, reserving to Raymundo the right to present another petition for
the approval of the sale of certificate of public convenience No. 25951 which was not included in the sale in favor of the
Luneta Motor Co.
Sweeping incidental matters to one side, the prime question need not be complicated by determining if a sale of a
certificate of public convenience without any equipment may be the object of execution and garnishment sale, for this
is matter of policy to be determined by the Public Service Commission, and it appears that sale of certificates of public
convenience without equipment have been approved by the commission. Also it is evident that the articles of
incorporation of the Luneta Motor Co. are broad enough in scope to authorize the company, if it so desires, to engage
in the autotruck business, and if not, there would be nothing to preclude the company from transferring the certificates
to a third party with the approval of the Public Service Commission. Further, the nature of the partnership which may
have been entered into by Nicanor de Guzman and Agapito C. Correa cannot now be discussed, considering that the
promissory notes were signed Guzco Transit, by Nicanor de Guzman, and considering that the judgment against
Guzco Transit in the Court of First Instance of Manila has become final. Finally, the dismissal in case No. 33033
pertaining to certificate No. 25951 was without prejudice, and the appellees disclaim any interest in this certificate.
Therefore, the question to be decided on this appeal is, which of the two sales, the one at public auction by virtue of an
attachment, or two voluntary sale made after the property had been levied upon, should prevail, and a decision on this
question is dependent on a decision relative to the liability to execution of certificates of public convenience.
The Public Service Law, Act No. 3108, as amended, authorizes certificates of public convenience to be secured by
public service operators from the Public Service Commission. (Sec. 15 [i].) A certificate of public convenience granted
to the owner or operator of public service motor vehicles, it has been held, grants a right in the nature of a limited
franchise. (Public Utilities Commission vs. Garviloch [191], 54 Utah, 406.)
The Code of Civil Procedure establishes the general rule that "property, both real and personal, or any interest therein
of the judgment debtor, not exempt by law, and all property and rights of property seized and held under attachment in
the action, shall be liable to execution." (Sec. 450.) The statutory exemptions do not include franchises or certificates of
public convenience. (Sec. 452.) The word "property" as used in section 450 of the Code of Civil Procedure
comprehends every species of title, inchoate or complete, legal or equitable. The test by which to determine whether or
not property can be attached and sold upon execution is whether the judgment debtor has such a beneficial interest
therein that he can sell or otherwise dispose of it for value. (Reyes vs. Grey [1911], 21 Phil., 73.)
It will be noted that the Public Service Law and the Code of Civil Procedure are silent on the question at issue, that is,
silent in the sense of not containing specific provisions on the right to attach certificates of public convenience. The
same attitude was not assumed in the enactment of Act No. 667, section 10, as amended, which gave authority for the
mortgage and sale under foreclosure proceedings of franchises granted by Provincial and municipal governments. A
similar tendency was evident in the Corporation Law, for in section 56 and following thereof express provisions were
made for the sale on execution used in connection with them. Should the legislative intention thus evidenced be taken
as meaning that the generality of the language used by the Code of Civil Procedure was too vague to permit of forced
sales of franchises and certificates of public convenience, or notwithstanding the provisions to be found in these
special laws, is the language of the code of Civil Procedure broad enough to include certificates of public
convenience? We lean to the latter proposition, and will now proceed to elucidate our viewpoint.
The test to be applied was announced by our Supreme Court in Reyes vs. Grey, supra, and there is nothing in
Tufexis vs. Olaguera and Municipal Council of Guinobatan ( [1915], 32 Phil., 654), cited by appellant, which sanctions
a contrary test. That rule it will be recalled tested the liability of property to execution by determining if the interest of
the judgment debtor in the case can be sold or conveyed to another in any way. Now the Public Service Law permits
the Public Service Commission to approved the sale, alienation, mortgaging, encumbering, or leasing of property,
franchises, privileges, or rights or any part thereof (sec. 16 [h]), and in practice the purchase and sale of certificates of
public convenience has been permitted by the Public Service Commission. If the holder of a certificate of public
convenience can sell it voluntarily, there is no valid reason why the same certificate cannot be taken and sold
involuntarily pursuant to process.
If this was all that there was to the case, we might hesitate to approve attachments of certificates of public
convenience. But there is more. Certificates of public convenience have come to have considerable material value.
They are valuable assets. In many cases the certificates are the cornerstones on which are builded the business of bus
transportation. The United States Supreme Court considers a franchise granted in consideration of the performance of
public service as constituting property within the protection of the Fourteenth Amendment to the United States
Constitution. (Frost vs. Corporation Commission of Oklahoma [1929], 278 U.S., 515.) If the holder of the certificate of
public convenience can thus be protected in his constitutional rights, we see no reason why the certificate of public
convenience should not assume corresponding responsibilities and be susceptible as property or an interest therein of
being liable to execution. In at least one State, the certificate of the railroad commission permitting the operation of a
bus line has been held to be included in the term "property" in the broad sense of the term. If thus is true, the certificate
under our law, considered as a species of property, would be liable to execution. (Willis vs. Buck [1928], 81 Mont.,
472.)
As has been intimated herein before, a practice has grown up in the Public Service Commission of permitting the
alienation of certificates of public convenience and in so doing approval has been given to the sale through foreclosure
proceedings of the certificates of public convenience to third parties. The very decision in the two cases before us is an
illustration of this practice. The same tendency is to be noted in the lower courts. As an example in the instant record,
there is a previous foreclosure of a mortgage apparently uncontested, Not only this, but tacit approval to the
attachment of certificates of public convenience either through chattel mortgages or court writs has been given by this
court. (Orlanes & Banaag Transportation Co. vs. Public Service Commission [1932], 57 Phil., 634; Manila Electric
Company vs. Orlanes & Banaag Transportation Co. [1933], 57 Phil., 805; Nos. 39525 and 39531, Red Line
Transportation Co. vs. Rural Transit Co. and Bachrach Motor Co., November 17, 1933.  1)
When the motion of the plaintiff praying that the certificates of public convenience granted by the Public Service
Commission which were attached be sold at public auction and the answer opposing the granting of the motion on the
ground that franchises can not be the subject of attachment and sale by garnishment came before the Court of First
Instance of Manila, the presiding Judge Anacleto Diaz, promulgated an order which sustained the right of the plaintiff to
attachment and garnishment. That order gains particular force because a later judgment by consent was taken and no
appeal was attempted to this court. It is true that the sale further required the approval of the Public Service
Commission, but the Public Service Commission respected the decision of the court and so we have the concurrence
of the court and the commission on this question. In the order in first instance appears the following well considered
language:
It remains to be determined whether, under the law, certificates of public convenience are liable to attachment
and seizure by legal process. The law is silent as to this matter. It can not be denied that such franchises are
valuable. They are subject to being sold for a consideration as much as any other property. They are even
more valuable than ordinary properties, taking into consideration than that they are not granted to every one
who applies for them but only to those who undertake to furnish satisfactory and convenient service to the
public. It may also be said that dealers in motor vehicles even extend credit to owners of such certificates or
franchises. The law permits the seizure by means of a writ of attachment not only of chattels but also for shares
and credits. While these franchises may be said to be intangible character, they are however of value and are
considered properties which can be seized through legal process.
For all the foregoing, the court is of the opinion that the plaintiff is entitled to the remedy it prays for in its motion
which is hereby granted. lawphil.net

The ruling of the Supreme Court on the question raised by the record and the assignments of error is this: Certificates
of public convenience secured by public service operators are liable to execution, and the Public Service Commission
is authorized to approve the transfer of the certificates of public convenience to the execution creditor. As a
consequence, the decision brought on review will be affirmed, with costs against the appellant.
Avanceña, C.J., Villa-Real, Hull, and Imperial, JJ., concur.

79. Kilusang Mayo Uno Labor Center v. Garcia, Jr., G.R. No. 115381. Dec. 23, 1994
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
 
G.R. No. 115381 December 23, 1994
KILUSANG MAYO UNO LABOR CENTER, petitioner,
vs.
HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD, and
the PROVINCIAL BUS OPERATORS ASSOCIATION OF THE PHILIPPINES, respondents.
KAPUNAN, J.:
Public utilities are privately owned and operated businesses whose service are essential to the general public. They
are enterprises which specially cater to the needs of the public and conduce to their comfort and convenience. As
such, public utility services are impressed with public interest and concern. The same is true with respect to the
business of common carrier which holds such a peculiar relation to the public interest that there is superinduced upon it
the right of public regulation when private properties are affected with public interest, hence, they cease to be  juris
privati only. 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 the control by the public for the common good, to the extent of
the interest he has thus created. 1

An abdication of the licensing and regulatory government agencies of their functions as the instant petition seeks to
show, is indeed lamentable. Not only is it an unsound administrative policy but it is inimical to public trust and public
interest as well.
The instant petition for certiorari assails the constitutionality and validity of certain memoranda, circulars and/or orders
of the Department of Transportation and Communications (DOTC) and the Land Transportation Franchising and
Regulatory Board LTFRB)  which, among others, (a) authorize provincial bus and jeepney operators to increase or
2

decrease the prescribed transportation fares without application therefor with the LTFRB and without hearing and
approval thereof by said agency in violation of Sec. 16(c) of Commonwealth Act No. 146, as amended, otherwise
known as the Public Service Act, and in derogation of LTFRB's duty to fix and determine just and reasonable fares by
delegating that function to bus operators, and (b) establish a presumption of public need in favor of applicants for
certificates of public convenience (CPC) and place on the oppositor the burden of proving that there is no need for the
proposed service, in patent violation not only of Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same
Act mandating that fares should be "just and reasonable." It is, likewise, violative of the Rules of Court which places
upon each party the burden to prove his own affirmative allegations.  The offending provisions contained in the
3

questioned issuances pointed out by petitioner, have resulted in the introduction into our highways and thoroughfares
thousands of old and smoke-belching buses, many of which are right-hand driven, and have exposed our consumers
to the burden of spiraling costs of public transportation without hearing and due process.
The following memoranda, circulars and/or orders are sought to be nullified by the instant petition, viz: (a) DOTC
Memorandum Order 90-395, dated June 26, 1990 relative to the implementation of a fare range scheme for provincial
bus services in the country; (b) DOTC Department Order No.
92-587, dated March 30, 1992, defining the policy framework on the regulation of transport services; (c) DOTC
Memorandum dated October 8, 1992, laying down rules and procedures to implement Department Order No. 92-587;
(d) LTFRB Memorandum Circular No. 92-009, providing implementing guidelines on the DOTC Department Order No.
92-587; and (e) LTFRB Order dated March 24, 1994 in Case No. 94-3112.
The relevant antecedents are as follows:
On June 26, 1990; then Secretary of DOTC, Oscar M. Orbos, issued Memorandum Circular No. 90-395 to then LTFRB
Chairman, Remedios A.S. Fernando allowing provincial bus operators to charge passengers rates within a range of
15% above and 15% below the LTFRB official rate for a period of one (1) year. The text of the memorandum order
reads in full:
One of the policy reforms and measures that is in line with the thrusts and the priorities set out in the
Medium-Term Philippine Development Plan (MTPDP) 1987 — 1992) is the liberalization of regulations
in the transport sector. Along this line, the Government intends to move away gradually from regulatory
policies and make progress towards greater reliance on free market forces.
Based on several surveys and observations, bus companies are already charging passenger rates
above and below the official fare declared by LTFRB on many provincial routes. It is in this context that
some form of liberalization on public transport fares is to be tested on a pilot basis.
In view thereof, the LTFRB is hereby directed to immediately publicize a fare range scheme for all
provincial bus routes in country (except those operating within Metro Manila). Transport Operators shall
be allowed to charge passengers within a range of fifteen percent (15%) above and fifteen percent
(15%) below the LTFRB official rate for a period of one year.
Guidelines and procedures for the said scheme shall be prepared by LTFRB in coordination with the
DOTC Planning Service.
The implementation of the said fare range scheme shall start on 6 August 1990.
For compliance. (Emphasis ours.)
Finding the implementation of the fare range scheme "not legally feasible," Remedios A.S. Fernando submitted the
following memorandum to Oscar M. Orbos on July 24, 1990, to wit:
With reference to DOTC Memorandum Order No. 90-395 dated 26 June 1990 which the LTFRB
received on 19 July 1990, directing the Board "to immediately publicize a fare range scheme for all
provincial bus routes in the country (except those operating within Metro Manila)" that will allow
operators "to charge passengers within a range of fifteen percent (15%) above and fifteen percent
(15%) below the LTFRB official rate for a period of one year" the undersigned is respectfully adverting
the Secretary's attention to the following for his consideration:
1. Section 16(c) of the Public Service Act prescribes the following for the fixing and
determination of rates — (a) the rates to be approved should be proposed by public
service operators; (b) there should be a publication and notice to concerned or affected
parties in the territory affected; (c) a public hearing should be held for the fixing of the
rates; hence, implementation of the proposed fare range scheme on August 6 without
complying with the requirements of the Public Service Act may not be legally feasible.
2. To allow bus operators in the country to charge fares fifteen (15%) above the present
LTFRB fares in the wake of the devastation, death and suffering caused by the July 16
earthquake will not be socially warranted and will be politically unsound; most likely
public criticism against the DOTC and the LTFRB will be triggered by the untimely motu
propio implementation of the proposal by the mere expedient of publicizing the fare
range scheme without calling a public hearing, which scheme many as early as during
the Secretary's predecessor know through newspaper reports and columnists'
comments to be Asian Development Bank and World Bank inspired.
3. More than inducing a reduction in bus fares by fifteen percent (15%) the
implementation of the proposal will instead trigger an upward adjustment in bus fares by
fifteen percent (15%) at a time when hundreds of thousands of people in Central and
Northern Luzon, particularly in Central Pangasinan, La Union, Baguio City, Nueva Ecija,
and the Cagayan Valley are suffering from the devastation and havoc caused by the
recent earthquake.
4. In lieu of the said proposal, the DOTC with its agencies involved in public
transportation can consider measures and reforms in the industry that will be socially
uplifting, especially for the people in the areas devastated by the recent earthquake.
In view of the foregoing considerations, the undersigned respectfully suggests that the implementation
of the proposed fare range scheme this year be further studied and evaluated.
On December 5, 1990, private respondent Provincial Bus Operators Association of the Philippines, Inc. (PBOAP) filed
an application for fare rate increase. An across-the-board increase of eight and a half centavos (P0.085) per kilometer
for all types of provincial buses with a minimum-maximum fare range of fifteen (15%) percent over and below the
proposed basic per kilometer fare rate, with the said minimum-maximum fare range applying only to ordinary, first class
and premium class buses and a fifty-centavo (P0.50) minimum per kilometer fare for aircon buses, was sought.
On December 6, 1990, private respondent PBOAP reduced its applied proposed fare to an across-the-board increase
of six and a half (P0.065) centavos per kilometer for ordinary buses. The decrease was due to the drop in the expected
price of diesel.
The application was opposed by the Philippine Consumers Foundation, Inc. and Perla C. Bautista alleging that the
proposed rates were exorbitant and unreasonable and that the application contained no allegation on the rate of return
of the proposed increase in rates.
On December 14, 1990, public respondent LTFRB rendered a decision granting the fare rate increase in accordance
with the following schedule of fares on a straight computation method, viz:
AUTHORIZED FARES
LUZON
MIN. OF 5 KMS. SUCCEEDING KM.
REGULAR P1.50 P0.37
STUDENT P1.15 P0.28
VISAYAS/MINDANAO
REGULAR P1.60 P0.375
STUDENT P1.20 P0.285
FIRST CLASS (PER KM.)
LUZON P0.385
VISAYAS/
MINDANAO P0.395
PREMIERE CLASS (PER KM.)
LUZON P0.395
VISAYAS/
MINDANAO P0.405
AIRCON (PER KM.) P0.415. 4

On March 30, 1992, then Secretary of the Department of Transportation and Communications Pete Nicomedes Prado
issued Department Order No.
92-587 defining the policy framework on the regulation of transport services. The full text of the said order is
reproduced below in view of the importance of the provisions contained therein:
WHEREAS, Executive Order No. 125 as amended, designates the Department of Transportation and
Communications (DOTC) as the primary policy, planning, regulating and implementing agency on
transportation;
WHEREAS, to achieve the objective of a viable, efficient, and dependable transportation system, the
transportation regulatory agencies under or attached to the DOTC have to harmonize their decisions
and adopt a common philosophy and direction;
WHEREAS, the government proposes to build on the successful liberalization measures pursued over
the last five years and bring the transport sector nearer to a balanced longer term regulatory
framework;
NOW, THEREFORE, pursuant to the powers granted by laws to the DOTC, the following policies and
principles in the economic regulation of land, air, and water transportation services are hereby adopted:
1. Entry into and exit out of the industry. Following the Constitutional dictum against monopoly, no
franchise holder shall be permitted to maintain a monopoly on any route. A minimum of two franchise
holders shall be permitted to operate on any route.
The requirements to grant a certificate to operate, or certificate of public convenience, shall be: proof of
Filipino citizenship, financial capability, public need, and sufficient insurance cover to protect the riding
public.
In determining public need, the presumption of need for a service shall be deemed in favor of the
applicant. The burden of proving that there is no need for a proposed service shall be with the
oppositor(s).
In the interest of providing efficient public transport services, the use of the "prior operator" and the
"priority of filing" rules shall be discontinued. The route measured capacity test or other similar tests of
demand for vehicle/vessel fleet on any route shall be used only as a guide in weighing the merits of
each franchise application and not as a limit to the services offered.
 Where there are limitations in facilities, such as congested road space in urban areas, or at airports and
ports, the use of demand management measures in conformity with market principles may be
considered.
The right of an operator to leave the industry is recognized as a business decision, subject only to the
filing of appropriate notice and following a phase-out period, to inform the public and to minimize
disruption of services.
2. Rate and Fare Setting. Freight rates shall be freed gradually from government controls. Passenger
fares shall also be deregulated, except for the lowest class of passenger service (normally third class
passenger transport) for which the government will fix indicative or reference fares. Operators of
particular services may fix their own fares within a range 15% above and below the indicative or
reference rate.
Where there is lack of effective competition for services, or on specific routes, or for the transport of
particular commodities, maximum mandatory freight rates or passenger fares shall be set temporarily
by the government pending actions to increase the level of competition.
For unserved or single operator routes, the government shall contract such services in the most
advantageous terms to the public and the government, following public bids for the services. The
advisability of bidding out the services or using other kinds of incentives on such routes shall be studied
by the government.
3. Special Incentives and Financing for Fleet Acquisition. As a matter of policy, the government shall
not engage in special financing and incentive programs, including direct subsidies for fleet acquisition
and expansion. Only when the market situation warrants government intervention shall programs of this
type be considered. Existing programs shall be phased out gradually.
The Land Transportation Franchising and Regulatory Board, the Civil Aeronautics Board, the Maritime
Industry Authority are hereby directed to submit to the Office of the Secretary, within forty-five (45) days
of this Order, the detailed rules and procedures for the Implementation of the policies herein set forth.
In the formulation of such rules, the concerned agencies shall be guided by the most recent studies on
the subjects, such as the Provincial Road Passenger Transport Study, the Civil Aviation Master Plan,
the Presidential Task Force on the Inter-island Shipping Industry, and the Inter-island Liner Shipping
Rate Rationalization Study.
For the compliance of all concerned. (Emphasis ours)
On October 8, 1992, public respondent Secretary of the Department of Transportation and Communications Jesus B.
Garcia, Jr. issued a memorandum to the Acting Chairman of the LTFRB suggesting swift action on the adoption of
rules and procedures to implement above-quoted Department Order No. 92-587 that laid down deregulation and other
liberalization policies for the transport sector. Attached to the said memorandum was a revised draft of the required
rules and procedures covering (i) Entry Into and Exit Out of the Industry and (ii) Rate and Fare Setting, with comments
and suggestions from the World Bank incorporated therein. Likewise, resplendent from the said memorandum is the
statement of the DOTC Secretary that the adoption of the rules and procedures is a pre-requisite to the approval of the
Economic Integration Loan from the World Bank. 5

On February 17, 1993, the LTFRB issued Memorandum Circular No. 92-009 promulgating the guidelines for the
implementation of DOTC Department Order No. 92-587. The Circular provides, among others, the following challenged
portions:
xxx xxx xxx
IV. Policy Guidelines on the Issuance of Certificate of Public Convenience.
The issuance of a Certificate of Public Convenience is determined by public need. The presumption of
public need for a service shall be deemed in favor of the applicant, while burden of proving that there is
no need for the proposed service shall be the oppositor'(s).
xxx xxx xxx
V. Rate and Fare Setting
The control in pricing shall be liberalized to introduce price competition complementary with the quality
of service, subject to prior notice and public hearing. Fares shall not be provisionally authorized without
public hearing.
A. On the General Structure of Rates
1. The existing authorized fare range system of plus or minus 15 per cent for provincial buses and
jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an
indicative or reference rate as the basis for the expanded fare range.
2. Fare systems for aircon buses are liberalized to cover first class and premier services.
xxx xxx xxx
(Emphasis ours).
Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowing
provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for
the purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent of the
existing fares. Said increased fares were to be made effective on March 16, 1994.
On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares.
On March 24, 1994, the LTFRB issued one of the assailed orders dismissing the petition for lack of merit. The
dispositive portion reads:
PREMISES CONSIDERED, this Board after considering the arguments of the parties, hereby
DISMISSES FOR LACK OF MERIT the petition filed in the above-entitled case. This petition in this
case was resolved with dispatch at the request of petitioner to enable it to immediately avail of the legal
remedies or options it is entitled under existing laws.
SO ORDERED. 6

Hence, the instant petition for certiorari with an urgent prayer for issuance of a temporary restraining order.
The Court, on June 20, 1994, issued a temporary restraining order enjoining, prohibiting and preventing respondents
from implementing the bus fare rate increase as well as the questioned orders and memorandum circulars. This meant
that provincial bus fares were rolled back to the levels duly authorized by the LTFRB prior to March 16, 1994. A
moratorium was likewise enforced on the issuance of franchises for the operation of buses, jeepneys, and taxicabs.
Petitioner KMU anchors its claim on two (2) grounds. First, the authority given by respondent LTFRB to provincial bus
operators to set a fare range of plus or minus fifteen (15%) percent, later increased to plus twenty (20%) and minus
twenty-five (-25%) percent, over and above the existing authorized fare without having to file a petition for the purpose,
is unconstitutional, invalid and illegal. Second, the establishment of a presumption of public need in favor of an
applicant for a proposed transport service without having to prove public necessity, is illegal for being violative of the
Public Service Act and the Rules of Court.
In its Comment, private respondent PBOAP, while not actually touching upon the issues raised by the petitioner,
questions the wisdom and the manner by which the instant petition was filed. It asserts that the petitioner has no legal
standing to sue or has no real interest in the case at bench and in obtaining the reliefs prayed for.
In their Comment filed by the Office of the Solicitor General, public respondents DOTC Secretary Jesus B. Garcia, Jr.
and the LTFRB asseverate that the petitioner does not have the standing to maintain the instant suit. They further
claim that it is within DOTC and LTFRB's authority to set a fare range scheme and establish a presumption of public
need in applications for certificates of public convenience.
We find the instant petition impressed with merit.
At the outset, the threshold issue of locus standi must be struck. Petitioner KMU has the standing to sue.
The requirement of locus standi inheres from the definition of judicial power. Section 1 of Article VIII of the Constitution
provides:
xxx xxx xxx
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
In Lamb v. Phipps,  we ruled that judicial power is the power to hear and decide causes pending between parties who
7

have the right to sue in the courts of law and equity. Corollary to this provision is the principle of  locus standi of a party
litigant. One who is directly affected by and whose interest is immediate and substantial in the controversy has the
standing to sue. The rule therefore requires that a party must show a personal stake in the outcome of the case or an
injury to himself that can be redressed by a favorable decision so as to warrant an invocation of the court's jurisdiction
and to justify the exercise of the court's remedial powers in his behalf. 8

In the case at bench, petitioner, whose members had suffered and continue to suffer grave and irreparable injury and
damage from the implementation of the questioned memoranda, circulars and/or orders, has shown that it has a clear
legal right that was violated and continues to be violated with the enforcement of the challenged memoranda, circulars
and/or orders. KMU members, who avail of the use of buses, trains and jeepneys everyday, are directly affected by the
burdensome cost of arbitrary increase in passenger fares. They are part of the millions of commuters who comprise the
riding public. Certainly, their rights must be protected, not neglected nor ignored.
Assuming arguendo that petitioner is not possessed of the standing to sue, this court is ready to brush aside this
barren procedural infirmity and recognize the legal standing of the petitioner in view of the transcendental importance
of the issues raised. And this act of liberality is not without judicial precedent. As early as the  Emergency Powers
Cases, this Court had exercised its discretion and waived the requirement of proper party. In the recent case
of Kilosbayan, Inc., et al. v. Teofisto Guingona, Jr., et al.,  we ruled in the same lines and enumerated some of the
9

cases where the same policy was adopted, viz:

. . . A party's standing before this Court is a procedural technicality which it may, in the exercise of its
discretion, set aside in view of the importance of the issues raised. In the landmark  Emergency Powers
Cases, [G.R. No. L-2044 (Araneta v. Dinglasan); G.R. No. L-2756 (Araneta v. Angeles); G.R. No. L-
3054 (Rodriguez v. Tesorero de Filipinas); G.R. No. L-3055 (Guerrero v. Commissioner of Customs);
and G.R. No. L-3056 (Barredo v. Commission on Elections), 84 Phil. 368 (1949)], this Court brushed
aside this technicality because "the transcendental importance to the public of these cases demands
that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure.
(Avelino vs. Cuenco, G.R. No. L-2621)." Insofar as taxpayers' suits are concerned, this Court had
declared that it "is not devoid of discretion as to whether or not it should be entertained," (Tan v.
Macapagal, 43 SCRA 677, 680 [1972]) or that it "enjoys an open discretion to entertain the same or
not." [Sanidad v. COMELEC, 73 SCRA 333 (1976)].
xxx xxx xxx
In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress,
and even association of planters, and
non-profit civic organizations were allowed to initiate and prosecute actions before this court to question
the constitutionality or validity of laws, acts, decisions, rulings, or orders of various government
agencies or instrumentalities. Among such cases were those assailing the constitutionality of (a) R.A.
No. 3836 insofar as it allows retirement gratuity and commutation of vacation and sick leave to
Senators and Representatives and to elective officials of both Houses of Congress (Philippine
Constitution Association, Inc. v. Gimenez, 15 SCRA 479 [1965]); (b) Executive Order No. 284, issued
by President Corazon C. Aquino on 25 July 1987, which allowed members of the cabinet, their
undersecretaries, and assistant secretaries to hold other government offices or positions (Civil Liberties
Union v. Executive Secretary, 194 SCRA 317 [1991]); (c) the automatic appropriation for debt service in
the General Appropriations Act (Guingona v. Carague, 196 SCRA 221 [1991]; (d) R.A. No. 7056 on the
holding of desynchronized elections (Osmeña v. Commission on Elections, 199 SCRA 750 [1991]); (e)
P.D. No. 1869 (the charter of the Philippine Amusement and Gaming Corporation) on the ground that it
is contrary to morals, public policy, and order (Basco v. Philippine Amusement and Gaming Corp., 197
SCRA 52 [1991]); and (f) R.A. No. 6975, establishing the Philippine National Police. (Carpio v.
Executive Secretary, 206 SCRA 290 [1992]).
Other cases where we have followed a liberal policy regarding locus standi include those attacking the
validity or legality of (a) an order allowing the importation of rice in the light of the prohibition imposed
by R.A. No. 3452 (Iloilo Palay and Corn Planters Association, Inc. v. Feliciano, 13 SCRA 377 [1965];
(b) P.D. Nos. 991 and 1033 insofar as they proposed amendments to the Constitution and P.D. No.
1031 insofar as it directed the COMELEC to supervise, control, hold, and conduct the referendum-
plebiscite on 16 October 1976 (Sanidad v. Commission on Elections, supra); (c) the bidding for the sale
of the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo, Japan (Laurel v. Garcia, 187 SCRA
797 [1990]); (d) the approval without hearing by the Board of Investments of the amended application
of the Bataan Petrochemical Corporation to transfer the site of its plant from Bataan to Batangas and
the validity of such transfer and the shift of feedstock from naphtha only to naphtha and/or liquefied
petroleum gas (Garcia v. Board of Investments, 177 SCRA 374 [1989]; Garcia v. Board of Investments,
191 SCRA 288 [1990]); (e) the decisions, orders, rulings, and resolutions of the Executive Secretary,
Secretary of Finance, Commissioner of Internal Revenue, Commissioner of Customs, and the Fiscal
Incentives Review Board exempting the National Power Corporation from indirect tax and duties
(Maceda v. Macaraig, 197 SCRA 771 [1991]); (f) the orders of the Energy Regulatory Board of 5 and 6
December 1990 on the ground that the hearings conducted on the second provisional increase in oil
prices did not allow the petitioner substantial cross-examination; (Maceda v. Energy Regulatory Board,
199 SCRA 454 [1991]); (g) Executive Order No. 478 which levied a special duty of P0.95 per liter of
imported oil products (Garcia v. Executive Secretary, 211 SCRA 219 [1992]); (h) resolutions of the
Commission on Elections concerning the apportionment, by district, of the number of elective members
of Sanggunians (De Guia vs. Commission on Elections, 208 SCRA 420 [1992]); and (i) memorandum
orders issued by a Mayor affecting the Chief of Police of Pasay City (Pasay Law and Conscience
Union, Inc. v. Cuneta, 101 SCRA 662 [1980]).
In the 1975 case of Aquino v. Commission on Elections (62 SCRA 275 [1975]), this Court, despite its
unequivocal ruling that the petitioners therein had no personality to file the petition, resolved
nevertheless to pass upon the issues raised because of the far-reaching implications of the petition. We
did no less in De Guia v. COMELEC (Supra) where, although we declared that De Guia "does not
appear to have locus standi, a standing in law, a personal or substantial interest," we brushed aside the
procedural infirmity "considering the importance of the issue involved, concerning as it does the political
exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion
and violation of the Constitution by respondent."
Now on the merits of the case.
 On the fare range scheme.
Section 16(c) of the Public Service Act, as amended, reads:
Sec. 16. Proceedings of the Commission, upon notice and hearing. — The Commission shall have
power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject
to the limitations and exceptions mentioned and saving provisions to the contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as
well as commutation, mileage kilometrage, and other special rates which shall be imposed, observed,
and followed thereafter by any public service: Provided, That the Commission may, in its discretion,
approve rates proposed by public services provisionally and without necessity of any hearing; but it
shall call a hearing thereon within thirty days thereafter, upon publication and notice to the concerns
operating in the territory affected: Provided, further, That in case the public service equipment of an
operator is used principally or secondarily for the promotion of a private business, the net profits of said
private business shall be considered in relation with the public service of such operator for the purpose
of fixing the rates. (Emphasis ours).
xxx xxx xxx
Under the foregoing provision, the Legislature delegated to the defunct Public Service Commission the power
of fixing the rates of public services. Respondent LTFRB, the existing regulatory body today, is likewise vested
with the same under Executive Order No. 202 dated June 19, 1987. Section 5(c) of the said executive order
authorizes LTFRB "to determine, prescribe, approve and periodically review and adjust, reasonable fares, rates
and other related charges, relative to the operation of public land transportation services provided by motorized
vehicles."
Such delegation of legislative power to an administrative agency is permitted in order to adapt to the increasing
complexity of modern life. As subjects for governmental regulation multiply, so does the difficulty of administering the
laws. Hence, specialization even in legislation has become necessary. Given the task of determining sensitive and
delicate matters as
route-fixing and rate-making for the transport sector, the responsible regulatory body is entrusted with the power of
subordinate legislation. With this authority, an administrative body and in this case, the LTFRB, may implement broad
policies laid down in a statute by "filling in" the details which the Legislature may neither have time or competence to
provide. However, nowhere under the aforesaid provisions of law are the regulatory bodies, the PSC and LTFRB alike,
authorized to delegate that power to a common carrier, a transport operator, or other public service.
In the case at bench, the authority given by the LTFRB to the provincial bus operators to set a fare range over and
above the authorized existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislative
authority. Potestas delegata non delegari potest. What has been delegated cannot be delegated. This doctrine is
based on the ethical principle that such a delegated power constitutes not only a right but a duty to be performed by
the delegate through the instrumentality of his own judgment and not through the intervening mind of another.  A 10

further delegation of such power would indeed constitute a negation of the duty in violation of the trust reposed in the
delegate mandated to discharge it directly.  The policy of allowing the provincial bus operators to change and increase
11

their fares at will would result not only to a chaotic situation but to an anarchic state of affairs. This would leave the
riding public at the mercy of transport operators who may increase fares every hour, every day, every month or every
year, whenever it pleases them or whenever they deem it "necessary" to do so. In  Panay Autobus Co. v. Philippine
Railway Co.,  where respondent Philippine Railway Co. was granted by the Public Service Commission the authority to
12

change its freight rates at will, this Court categorically declared that:
In our opinion, the Public Service Commission was not authorized by law to delegate to the Philippine
Railway Co. the power of altering its freight rates whenever it should find it necessary to do so in order
to meet the competition of road trucks and autobuses, or to change its freight rates at will, or to regard
its present rates as maximum rates, and to fix lower rates whenever in the opinion of the Philippine
Railway Co. it would be to its advantage to do so.
The mere recital of the language of the application of the Philippine Railway Co. is enough to show that
it is untenable. The Legislature has delegated to the Public Service Commission the power of fixing the
rates of public services, but it has not authorized the Public Service Commission to delegate that power
to a common carrier or other public service. The rates of public services like the Philippine Railway Co.
have been approved or fixed by the Public Service Commission, and any change in such rates must be
authorized or approved by the Public Service Commission after they have been shown to be just and
reasonable. The public service may, of course, propose new rates, as the Philippine Railway Co. did in
case No. 31827, but it cannot lawfully make said new rates effective without the approval of the Public
Service Commission, and the Public Service Commission itself cannot authorize a public service to
enforce new rates without the prior approval of said rates by the commission. The commission must
approve new rates when they are submitted to it, if the evidence shows them to be just and reasonable,
 otherwise it must disapprove them. Clearly, the commission cannot determine in advance whether or
not the new rates of the Philippine Railway Co. will be just and reasonable, because it does not know
what those rates will be.
In the present case the Philippine Railway Co. in effect asked for permission to change its freight rates
at will. It may change them every day or every hour, whenever it deems it necessary to do so in order
to meet competition or whenever in its opinion it would be to its advantage. Such a procedure would
create a most unsatisfactory state of affairs and largely defeat the purposes of the public service
law.  (Emphasis ours).
13

One veritable consequence of the deregulation of transport fares is a compounded fare. If transport operators will be
authorized to impose and collect an additional amount equivalent to 20% over and above the authorized fare over a
period of time, this will unduly prejudice a commuter who will be made to pay a fare that has been computed in a
manner similar to those of compounded bank interest rates.
Picture this situation. On December 14, 1990, the LTFRB authorized provincial bus operators to collect a thirty-seven
(P0.37) centavo per kilometer fare for ordinary buses. At the same time, they were allowed to impose and collect a fare
range of plus or minus 15% over the authorized rate. Thus P0.37 centavo per kilometer authorized fare plus P0.05
centavos (which is 15% of P0.37 centavos) is equivalent to P0.42 centavos, the allowed rate in 1990. Supposing the
LTFRB grants another five (P0.05) centavo increase per kilometer in 1994, then, the base or reference for computation
would have to be P0.47 centavos (which is P0.42 + P0.05 centavos). If bus operators will exercise their authority to
impose an additional 20% over and above the authorized fare, then the fare to be collected shall amount to P0.56 (that
is, P0.47 authorized LTFRB rate plus 20% of P0.47 which is P0.29). In effect, commuters will be continuously
subjected, not only to a double fare adjustment but to a compounding fare as well. On their part, transport operators
shall enjoy a bigger chunk of the pie. Aside from fare increase applied for, they can still collect an additional amount by
virtue of the authorized fare range. Mathematically, the situation translates into the following:
Year** LTFRB authorized Fare Range Fare to be
rate*** collected per
kilometer
1990 P0.37 15% (P0.05) P0.42
1994 P0.42 + 0.05 = 0.47 20% (P0.09) P0.56
1998 P0.56 + 0.05 = 0.61 20% (P0.12) P0.73
2002 P0.73 + 0.05 = 0.78 20% (P0.16) P0.94
Moreover, rate making or rate fixing is not an easy task. It is a delicate and sensitive government function that requires
dexterity of judgment and sound discretion with the settled goal of arriving at a just and reasonable rate acceptable to
both the public utility and the public. Several factors, in fact, have to be taken into consideration before a balance could
be achieved. A rate should not be confiscatory as would place an operator in a situation where he will continue to
operate at a loss. Hence, the rate should enable public utilities to generate revenues sufficient to cover operational
costs and provide reasonable return on the investments. On the other hand, a rate which is too high becomes
discriminatory. It is contrary to public interest. A rate, therefore, must be reasonable and fair and must be affordable to
the end user who will utilize the services.
Given the complexity of the nature of the function of rate-fixing and its far-reaching effects on millions of commuters,
government must not relinquish this important function in favor of those who would benefit and profit from the industry.
Neither should the requisite notice and hearing be done away with. The people, represented by reputable oppositors,
deserve to be given full opportunity to be heard in their opposition to any fare increase.
The present administrative procedure,   to our mind, already mirrors an orderly and satisfactory arrangement for all
14

parties involved. To do away with such a procedure and allow just one party, an interested party at that, to determine
what the rate should be, will undermine the right of the other parties to due process. The purpose of a hearing is
precisely to determine what a just and reasonable rate is.  Discarding such procedural and constitutional right is
15

certainly inimical to our fundamental law and to public interest.

On the presumption of public need.
A certificate of public convenience (CPC) is an authorization granted by the LTFRB for the operation of land
transportation services for public use as required by law. Pursuant to Section 16(a) of the Public Service Act, as
amended, the following requirements must be met before a CPC may be granted, to wit: (i) the applicant must be a
citizen of the Philippines, or a corporation or co-partnership, association or joint-stock company constituted and
organized under the laws of the Philippines, at least 60 per centum of its stock or paid-up capital must belong entirely
to citizens of the Philippines; (ii) the applicant must be financially capable of undertaking the proposed service and
meeting the responsibilities incident to its operation; and (iii) the applicant must prove that the operation of the public
service proposed and the authorization to do business will promote the public interest in a proper and suitable manner.
It is understood that there must be proper notice and hearing before the PSC can exercise its power to issue a CPC.
While adopting in toto the foregoing requisites for the issuance of a CPC, LTFRB Memorandum Circular No. 92-009,
Part IV, provides for yet incongruous and contradictory policy guideline on the issuance of a CPC. The guidelines
states:
The issuance of a Certificate of Public Convenience is determined by public need. The presumption of
public need for a service shall be deemed in favor of the applicant, while the burden of proving that
there is no need for the proposed service shall be the oppositor's. (Emphasis ours).
The above-quoted provision is entirely incompatible and inconsistent with Section 16(c)(iii) of the Public Service Act
which requires that before a CPC will be issued, the applicant must prove by proper notice and hearing that the
operation of the public service proposed will promote public interest in a proper and suitable manner. On the contrary,
the policy guideline states that the presumption of public need for a public service shall be deemed in favor of the
applicant. In case of conflict between a statute and an administrative order, the former must prevail.
By its terms, public convenience or necessity generally means something fitting or suited to the public need.  As one of
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the basic requirements for the grant of a CPC, public convenience and necessity exists when the proposed facility or
service meets a reasonable want of the public and supply a need which the existing facilities do not adequately supply.
The existence or
non-existence of public convenience and necessity is therefore a question of fact that must be established by
evidence, real and/or testimonial; empirical data; statistics and such other means necessary, in a public hearing
conducted for that purpose. The object and purpose of such procedure, among other things, is to look out for, and
protect, the interests of both the public and the existing transport operators.
Verily, the power of a regulatory body to issue a CPC is founded on the condition that after full-dress hearing and
investigation, it shall find, as a fact, that the proposed operation is for the convenience of the public.  Basic 17

convenience is the primary consideration for which a CPC is issued, and that fact alone must be consistently borne in
mind. Also, existing operators in subject routes must be given an opportunity to offer proof and oppose the application.
Therefore, an applicant must, at all times, be required to prove his capacity and capability to furnish the service which
he has undertaken to
render.   And all this will be possible only if a public hearing were conducted for that purpose.
18

Otherwise stated, the establishment of public need in favor of an applicant reverses well-settled and institutionalized
judicial, quasi-judicial and administrative procedures. It allows the party who initiates the proceedings to prove, by mere
application, his affirmative allegations. Moreover, the offending provisions of the LTFRB memorandum circular in
question would in effect amend the Rules of Court by adding another disputable presumption in the enumeration of 37
presumptions under Rule 131, Section 5 of the Rules of Court. Such usurpation of this Court's authority cannot be
countenanced as only this Court is mandated by law to promulgate rules concerning pleading, practice and
procedure.  19

Deregulation, while it may be ideal in certain situations, may not be ideal at all in our country given the present
circumstances. Advocacy of liberalized franchising and regulatory process is tantamount to an abdication by the
government of its inherent right to exercise police power, that is, the right of government to regulate public utilities for
protection of the public and the utilities themselves.
While we recognize the authority of the DOTC and the LTFRB to issue administrative orders to regulate the transport
sector, we find that they committed grave abuse of discretion in issuing DOTC Department Order
No. 92-587 defining the policy framework on the regulation of transport services and LTFRB Memorandum Circular No.
92-009 promulgating the implementing guidelines on DOTC Department Order No. 92-587, the said administrative
issuances being amendatory and violative of the Public Service Act and the Rules of Court. Consequently, we rule that
the twenty (20%) per centum fare increase imposed by respondent PBOAP on March 16, 1994 without the benefit of a
petition and a public hearing is null and void and of no force and effect. No grave abuse of discretion however was
committed in the issuance of DOTC Memorandum Order No. 90-395 and DOTC Memorandum dated October 8, 1992,
the same being merely internal communications between administrative officers.
WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED and the challenged administrative
issuances and orders, namely: DOTC Department Order No. 92-587, LTFRB Memorandum Circular
No. 92-009, and the order dated March 24, 1994 issued by respondent LTFRB are hereby DECLARED contrary to law
and invalid insofar as they affect provisions therein (a) delegating to provincial bus and jeepney operators the authority
to increase or decrease the duly prescribed transportation fares; and (b) creating a presumption of public need for a
service in favor of the applicant for a certificate of public convenience and placing the burden of proving that there is no
need for the proposed service to the oppositor.
The Temporary Restraining Order issued on June 20, 1994 is hereby MADE PERMANENT insofar as it enjoined the
bus fare rate increase granted under the provisions of the aforementioned administrative circulars, memoranda and/or
orders declared invalid.
No pronouncement as to costs.
SO ORDERED.