#76 reason, the Act, in so far as those powers are

concerned, is unconstitutional and void.

G.R. No. 47065             June 26, 1940
2. That even if it be assumed that section 1 of
Commonwealth Act No. 454, is valid delegation of
PANGASINAN TRANSPORTATION CO., INC., petitioner,
legislative powers, the Public Service Commission has
vs.
exceeded its authority because: (a) The Act applies
THE PUBLIC SERVICE COMMISSION, respondent.
only to future certificates and not to valid and
subsisting certificates issued prior to June 8, 1939,
LAUREL, J.: when said Act took effect, and (b) the Act, as applied
by the Commission, violates constitutional guarantees.
The petitioner has been engaged for the past twenty years in the
business of transporting passengers in the Province of Section 15 of Commonwealth Act No. 146, as amended by
Pangasinan and Tarlac and, to a certain extent, in the Province section 1 of Commonwealth Act No. 454, invoked by the
of Nueva Ecija and Zambales, by means of motor vehicles respondent Public Service Commission in the decision
commonly known as TPU buses, in accordance with the terms complained of in the present proceedings, reads as follows:
and conditions of the certificates of public convenience issued in
its favor by the former Public Utility Commission in cases Nos.
With the exception to those enumerated in the
24948, 30973, 36830, 32014 and 53090. On August 26, 1939,
preceding section, no public service shall operate in
the petitioner filed with the Public Service Commission an
the Philippines without possessing a valid and
application for authorization to operate ten additional new
subsisting certificate from the Public Service
Brockway trucks (case No. 56641), on the ground that they were
Commission, known as "certificate of public
needed to comply with the terms and conditions of its existing
convenience," or "certificate of convenience and public
certificates and as a result of the application of the Eight Hour
necessity," as the case may be, to the effect that the
Labor Law. In the decision of September 26, 1939, granting the
operation of said service and the authorization to do
petitioner's application for increase of equipment, the Public
business will promote the public interests in a proper
Service Commission ordered:
and suitable manner.

Y de acuerdo con que se provee por el articulo 15 de

The Commission may prescribed as a condition for the
la ley No. 146 del Commonwealth, tal como ha sido
issuance of the certificate provided in the preceding
enmendada por el articulo 1 de la Ley No. 454, por la
paragraph that the service can be acquired by the
presente se enmienda las condiciones de los
Commonwealth of the Philippines or by any
certificados de convenciencia publica expedidos en los
instrumentality thereof upon payment of the cost price
expedientes Nos. 24948, 30973, 36831, 32014 y la
of its useful equipment, less reasonable depreciation;
authorizacion el el expediente No. 53090, asi que se
and likewise, that the certificate shall valid only for a
consideran incorporadas en los mismos las dos
definite period of time; and that the violation of any of
siguientes condiciones:
these conditions shall produce the immediate
cancellation of the certificate without the necessity of
Que los certificados de conveniencia publica y any express action on the part of the Commission.
authorizacion arriba mencionados seran validos y
subsistentes solamente durante de veinticinco (25)
In estimating the depreciation, the effect of the use of
anos, contados desde la fecha de la promulgacion de
the equipment, its actual condition, the age of the
esta decision.
model, or other circumstances affecting its value in the
market shall be taken into consideration.
Que la empresa de la solicitante porda ser adquirida
por el Commonwealth de Filipinas o por alguna
The foregoing is likewise applicable to any extension
dependencia del mismo en cualquier tiempo que lo
or amendment of certificates actually force and to
deseare previo pago del precio d costo de su equipo
those which may hereafter be issued, to permits to
util, menos una depreciacion razonable que se ha fijar
modify itineraries and time schedules of public services
por la Comision al tiempo de su adquisicion.
and to authorization to renew and increase equipment
and properties.
Not being agreeable to the two new conditions thus incorporated
in its existing certificates, the petitioner filed on October 9, 1939
Under the first paragraph of the aforequoted section 15 of Act
a motion for reconsideration which was denied by the Public
No. 146, as amended, no public service can operate without a
Service Commission on November 14, 1939. Whereupon, on
certificate of public convenience or certificate of convenience
November 20, 1939, the present petition for a writ
and public necessity to the effect that the operation of said
of certiorari was instituted in this court praying that an order be
service and the authorization to do business will "public interests
issued directing the secretary of the Public Service Commission
in a proper and suitable manner." Under the second paragraph,
to certify forthwith to this court the records of all proceedings in
one of the conditions which the Public Service Commission may
case No. 56641; that this court, after hearing, render a decision
prescribed the issuance of the certificate provided for in the first
declaring section 1 of Commonwealth Act No. 454
paragraph is that "the service can be acquired by the
unconstitutional and void; that, if this court should be of the
Commonwealth of the Philippines or by any instrumental thereof
opinion that section 1 of Commonwealth Act No. 454 is
upon payment of the cost price of its useful equipment, less
constitutional, a decision be rendered declaring that the
reasonable depreciation," a condition which is virtually a
provisions thereof are not applicable to valid and subsisting
restatement of the principle already embodied in the
certificates issued prior to June 8, 1939. Stated in the language
Constitution, section 6 of Article XII, which provides that "the
of the petitioner, it is contended:
State may, in the interest of national welfare and defense,
establish and operate industries and means of transportation
1. That the legislative powers granted to the Public and communication, and, upon payment of just compensation,
Service Commission by section 1 of Commonwealth transfer to public ownership utilities and other private enterprises
Act No. 454, without limitation, guide or rule except the to be operated by the Government. "Another condition which the
unfettered discretion and judgment of the Commission, Commission may prescribed, and which is assailed by the
constitute a complete and total abdication by the petitioner, is that the certificate "shall be valid only for a definite
Legislature of its functions in the premises, and for that 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
#77
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
power21 — 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.

#78
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.
#79
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)2 which, among others, (a) authorize provincial bus and
jeepney operators to increase or 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.3 The
offending provisions contained in the 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,7 we ruled that judicial power is the power to
hear and decide causes pending between parties who 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.,9 we ruled in the same lines and
enumerated some of the 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.10 A 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. 11 The policy of
allowing the provincial bus operators to change and increase
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.,12 where
respondent Philippine Railway Co. was granted by the Public
Service Commission the authority to 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.13 (Emphasis ours).
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, 14 to our mind, already
mirrors an orderly and satisfactory arrangement for all 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.15 Discarding such procedural
and constitutional right is 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.16 As one of 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 No pronouncement as to costs
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.17 Basic 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. 18 And all this will be possible only if a public hearing
were conducted for that purpose.

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.
#80
G.R. No. L-21061           June 27, 1968
FORTUNATO F. HALILI, petitioner,
vs.
RUPERTO CRUZ, respondent.
ZALDIVAR, J.:
This is a petition for review of the decision of the Public Service
Commission, in its Case No. 61-6113, granting to respondent-
appellee Ruperto Cruz a certificate of public convenience to
operate a transportation service for passengers and freight, with
authority to operate ten units on the line he applied for.
Herein respondent filed, on September 19, 1961, with the Public
Service Commission an application, praying for the grant of a
certificate of public convenience to operate, under PUB
denomination, ten buses between Norzagaray (Bulacan) and
Piers (Manila), via Novaliches Road, A. Bonifacio Road,
Blumentritt Street, Rizal Avenue, MacArthur Bridge, Aduana and
13th Streets; and on the return trip, via Boston Street, MacArthur
Bridge, Rizal Avenue, Blumentritt Street, A. Bonifacio Road, and
Novaliches Road. The application was opposed by De Dios
Transportation Co., Inc., Raymundo Transportation Co., Inc.,
PDP Transit Inc., Villa Rey Transit, Inc., and by herein petitioner-
appellant Fortunato F. Halili who was the operator of the
transportation service known as "Halili Transit." Petitioner, in his
opposition alleged, substantially, that he was an operator of a
bus service on the line applied for, enumerating at the same
time the other lines he operated which were traversed by the
route mentioned in respondent's application; that his service, as
well as that of other bus operators on the route, was more than
adequate to meet the demands of the traveling public; that the
grant of the application would merely result in wasteful and
ruinous competition, and that the respondent was not financially
capable of operating and maintaining the service proposed by
him.
After several hearings in which the parties presented their
evidence, oral and documentary, the Public Service Commission
rendered a decision, on February 13, 1963, granting a certificate
of public convenience to respondent Ruperto Cruz to operate
ten buses under PUB denomination on the line Norzagaray
(Bulacan) — Piers (Manila) passing through the routes applied
for. The decision states, among others, as follows:
After a careful study of the evidence presented by the
contesting parties, we find the following facts
established; that applicant is applying for a service
from Norzagaray to Piers and vice-versa; that not one
of the oppositors herein operate a service up to Piers
— most of them go up to Divisoria and the rest up to
Folgueras; that there are commuters starting from
Norzagaray up to Piers; that applicant has the
experience in the operation of a PUB service and that
applicant has the means with which to operate and
maintain the service herein applied for.
From the facts in evidence, this Commission is of the
belief that the weight of evidence tips in favor of the
applicant.
It appearing, therefore, that applicant is a Filipino
citizen, that he is financially capable to operate and
maintain the service herein applied for, and that public
convenience and necessity will be promoted by the
approval of this application, and furthermore, that the
oppositions of the oppositors herein are without merit,
the same are overruled and the instant application
APPROVED.
It is the above-mentioned decision of the Public Service
Commission that is now sought to be reviewed by this Court.
Petitioner contends that:
1. "The finding of the Public Service Commission that
there was a public need for the operation by
respondent of ten buses on the line of Norzagaray
(Bulacan) - Piers (Manila) is not supported by the
evidence;
2. "The Public Service Commission erred when it did
not recognize the fact that petitioner-appellant was
rendering sufficient and adequate service on the line in
question; and
3. "The Public Service Commission erred in failing to
give petitioner-appellant the right of protection to
investment to which petitioner-appellant is entitled."
In support of his first two contentions petitioner argues that the
500 passengers found by the Commission as commuting daily
from Norzagaray to Manila could easily be accommodated in the
buses of existing operators; that the existing operators were
authorized to operate 31 buses which made around 100 round
trips a day; that since a bus could accommodate about 50
passengers, the existing authorized services could easily
accommodate not only the 500 but even 5000 passengers a
day. Petitioner also asserted that the Commission failed to
consider that 200 of the 500 commuters worked in the Republic
Cement Factory located at Norzagaray and so there were really
only 300 commuters daily traveling on the Norzagaray — Manila
line. Petitioner further claimed that the new terminal proposed in
the application was not based on actual need, because there
were no importing firms, or business establishments, or
manufacturing concerns, in Norzagaray, whose employees had
to make trips to the piers at the south harbor in a Manila. On the
question of public necessity, petitioner pointed out that the
evidence presented by the respondent consisted only of the
testimony of two witnesses who did not make any formal or
systematic study of the movement and frequency of public utility
buses, so that their testimonies were based only on casual
observations. On the other hand, as petitioner pointed out, the
oppositors presented five witnesses, two of whom made
meticulous, systematic and daily observations on the line
applied for. Petitioner urged that according to Exhibits "1", "1-A"
to "1-R", consisting of different pages of entries in a checkbook
at the various PSC checkpoints in the proposed line, buses
passing the checkpoints were carrying only from 1 to 5
passengers — which fact proved that the existing operators
more than adequately served the needs of the public.
Petitioner likewise asserted that public necessity did not require
the operation of the ten buses applied for by the respondent
because of the fact that on December 20, 1961, the Public
Service Commission granted to herein petitioner, in Case No.
61-5807, authority to operate only 10 buses on the line
Norzagaray — Manila, even if he had applied for 20 buses; and
that out of the many application to operate buses from Paradise
Farms (Bulacan) to Manila, only 10 buses were authorized.
The first two contentions of petitioner raise questions of fact.
This Court has repeatedly held that where the Public Service
Commission has reached a finding, after weighing the conflicting
evidence, that public necessity and convenience warrant the
operation of additional public utility service, the finding must not
be disturbed as long as there is evidence reasonably supporting
such finding.1 In reviewing the decision of the Commission, this
Court is not even required to examine the proof de novo and
determine for itself whether or not the preponderance of
evidence really justifies the decision. The only function of this
Court is to determine whether or not there is evidence before the
Commission upon which its decision might reasonably be
based.2
The Commission stated in its decision that "after a careful study
of the evidence presented by the contesting parties ... the
Commission is of the belief that the weight of evidence tips in
favor of the application." There is evidence on record that there
are numerous students, professionals, merchants, and
employees in both government and private concerns, that
commute daily between Norzagaray and Manila and the
intermediate points along the line;3 that along the same line have
emerged numerous centers of population, residential
subdivisions and housing projects, industrial projects like the
Republic Cement Factory, Angat River Dam Hydro-electric
Power Project, and hollow blocks manufacturing
establishments;4 that commuters experienced difficulties in
getting accommodated on buses traveling between Norzagaray
and Manila; that the Villa Rey Transit used to make two trips
from Angat to Manila via Norzagaray, the La Mallorca Pambusco
also two trips from Norzagaray to Manila via Sta. Maria, and the
Halili Transit likewise two trips from Norzagaray to Manila via the
Novaliches Road; that said trips were fully loaded at Norzagaray
such that many commuters from Norzagaray had to take jeeps
which brought them only up to Sta. Maria and Bocaue and there
waited for other means of transportation to bring them to
Manila;5 and that commuters from Manila to Norzagaray also
had to resort to broken trips for lack of direct trips.6 We are
persuaded that the evidence in the record support the decision
appealed from.
Petitioner claims that the Public Service Commission did not
consider the checker's reports (Exhs. 1, 1-A, to 1-R), on the face
of which it appears that there was no overcrowding in the buses
checked at the various checkpoints. The Commission, however,
states in its decision that it had arrived at the finding "after a
careful study of the evidence presented by the contesting
parties," — and necessarily the evidence thus studied included
the checker's reports. But assuming, gratia argumenti, that said
reports were not considered the failure of the Commission to
consider the reports would not constitute a reversible error,
because we find that the reports refer to trips of buses from
Manila to Ipo, Sapang Palay, San Jose and back, and from
upland to lowland and back, and none of the buses checked had
trips along Norzagaray-Manila or Manila-Norzagaray line. The
relative weight of these checker's reports as evidence must have
been considered by the Commission before making its decision.
As we have stated, the finding of fact of the Public Service
Commission is conclusive on this Court. Thus, in a case, this
Court said:
It appearing that the main issues raised by petitioner
merely affect questions of fact which by their very
nature involve an evaluation of the relative weight of
the evidence of both parties, or the credibility of
witnesses who testified before the Commission,
following the law and jurisprudence applicable to the
matter in this jurisdiction, said questions are now
conclusive upon this Court, and cannot be looked into,
it appearing that there is sufficient evidence to support
its findings.7
The claim of petitioner, that he was rendering adequate services
on the line in question as would preclude the necessity of
another operator, is untenable. In the first place, as shown in the
record, petitioner does not have a direct line from Norzagaray to
the Piers — the line that is applied for by respondent. In the
second place, there is evidence to the effect that oppositor Halili
was authorized 48 trips between Norzagaray and
Folgueras,8 but it was making two trips only.9 This circumstance
indicated that there was shortage of transportation units or
facilities, and that the line was not adequately serviced by the
petitioner. Thus, in a case concerning the non-operation of
authorized units, this Court said:
Apart from the existence of competent evidence in
support of these findings, certain undisputed facts
therein contained reveal that the assignment of error
under consideration is manifestly untenable. We refer
to the circumstance that, of the 75 buses that the
Raytranco is authorized to operate in all its lines, its
right with respect to 30 has been leased, 14 to Rizman
and 16 to Laguna-Tayabas Bus Company. Again,
though still entitled to operate 45 units in its remaining
lines, the Raytranco has registered only 17 buses,
aside from the circumstance that such buses are not in
continuous operation. These facts lead to the
conclusion that there must be a shortage of
transportation facilities in the lines aforementioned and
that the Raytranco is unable to meet fully the demands
of public convenience therein.10
Petitioner claims, in his third contention, that the Public Service
Commission failed to give him the protection that he is entitled
to, being an old and established public service operator. As a
general principle public utility operators must be protected from
ruinous competition, such that before permitting a new operator
to serve in a territory already served by another operator, the
latter should first be given opportunity to improve his equipment
and service. This principle, however, is subject to justifiable
exceptions. The primary consideration in the grant of a
certificate of public convenience must always be public
convenience. Thus, this Court said:
While it is the duty of the government as far as
possible to protect public utility operators against unfair
and unjustified competition, it is nevertheless obvious
that public convenience must have the first
consideration....11
The public convenience is properly served if passengers who
take buses at points in one part of a line are able to proceed
beyond those points without having to change buses. On this
point this Court said:
It is the convenience of the public that must be taken into
account, other things being equal, and that convenience would
be effectuated by passengers who take buses at points in one
part of a line being able to proceed beyond those points without
having to change buses and to wait the arrival of buses of a
competitive operator. We can perceive how under such
conditions one public utility could gain business at the expense
of a rival.12
In the instant case, public convenience would be properly served
if commuters from Norzagaray going to the Piers in Manila could
go to their destination without the need of changing buses.
Certainly the Public Service Commission has power to grant a
certificate of public convenience to a new operator, and the old
operator cannot with reason complain that it had not been given
opportunity to improve its equipment and service, if it is shown
that the old operator has not placed in the service all the units of
equipment that it had been authorized to operate, and also when
the old operator has violated, or has not complied with,
important conditions in its certificate. 13 In the instant case, it
has been shown that petitioner had not operated all the units
that it was authorized to operate.
IN VIEW OF THE FOREGOING, the decision of the Public
Service Commission, sought to be reviewed, is affirmed; with
costs against petitioner-appellant. It is so ordered.
#81

G.R. No. L-38586             August 18, 1933

TEODORO R. YANGCO, petitioner-appellant,
vs.
SIMPLICIO ESTEBAN, respondent-appellee.

HULL, J.:

This is an appeal from orders of the Public Service Commission

in which it finally permitted respondent-appellee to operate one
Ford truck once a day between Subic and Olongapo, Philippine
Islands. Both parties are operators of trucks under certificates of
public convinience and necessity within the Province of
Zambales. There is also another operators between the points in
question.

This question has been repeatedly before the Public Service

Commission. On a complaint of petitioner-appellant, the Public
Service Commission dismissed the complaint, in other words
permitted the operation. Subsequently, the Public Service
Commission ordered respondent-appellee to stop operating over
these eleven kilometers, and that order became final.
Subsequently, he asked permission to operate one truck one trip
a day over this route, which was granted by the commission. On
reconsideration, the Public Service Commission denied it, and
on reconsideration, it regranted it.

That the Public Service Commission should be confronted with

the necessity of making six decisions on the question whether
one Ford truck should be allowed to make one trip a day over
eleven kilometers, shows a most peculiar and unjustified abuse
of the privileges of litigation. The evidence clearly shows that the
two operators now on this territory often operate their busses
virtually empty. One of the operators,
petitioner-appellant, stands ready to increase his service should
the Public Service Commission decide that it is for the interest of
the Public so to do.

Where two operators are more than serving the public, there is
no reason to permit a third operator to engage in competition
with them. The fact that it is only one trip and of little
consequence, is not a sufficient reason to grant it.

There is a real public interest in this matter which seems to have

been lost sight of. The Public Service Commission and the
courts are maintained at considerable expenses to the public at
large, Litigious and contentious applicants for the right of using
our highways for the purpose of carrying a few passengers
should not be permitted so to monopolize the time of the Public
Service Commission as to render it difficult for that body to
attend to the many important and complicated questions
involving real public interest presented to it for action.

The last orders in this case are without real foundation in the
evidence of record and are contrary to the principles this court
has enunciated in Batangas Transportation Co. vs. Orlanes (52
Phil., 455), and Visayan Rapid Transit Company vs. Viajante
Interino Co., G.R. No. 36262.1

The orders appealed from are therefore reversed with costs

against the appellee. So ordered.
#82
G.R. No. L-28865          December 19, 1928
BATANGAS TRANSPORTATION CO., petitioner-appellant,
vs.
CAYETANO ORLANES, respondent-appellee.
STATEMENT
In his application for a permit, the appellee Orlanes alleges that
he is the holder of a certificate of public convenience issued by
the Public Service Commission in case No. 7306, to operate an
autobus line from Taal to Lucena, passing through Batangas,
Bolbok and Bantilan, in the Province of Batangas, and
Candelaria and Sariaya, in the Province of Tayabas, without any
fixed schedule; that by reason of the requirements of public
convenience, he has applied for a fixed schedule from Bantilan
to Lucena and return; that in case No. 7306, he cannot accept
passengers or cargo from Taal to any point before Balbok, and
vice versa; that the public convenience requires that he be
converted into what is known as a regular operator on a fixed
schedule between Taal and Bantilan and intermediate points,
and for that purpose, he has submitted to the Commission
proposed schedule for a license to make trips between those
and intermediate points. He then alleges that by reason of
increase of traffic, the public convenience also requires that he
be permitted to accept passengers and cargo at points between
Taal and Bantilan, and he asked for authority to establish that
schedule, and to accept passengers at all points between Taal
and Bantilan.
To this petition the Batangas Transportation Company appeared
and filed an application for a permit, in which it alleged that it is
operating a regular service of auto trucks between the principal
municipalities of the Province of Batangas and some of those of
the Province of Tayabas; that since 1918, it has been operating
a regular service between Taal and Rosario, and that in 1920, its
service was extended to the municipality of San Juan de Bolbok,
with a certificate of public convenience issued by the Public
Servise Commission; that in the year 1925 Orlanes obtained
from the Commission a certificate of public convenience to
operate an irregular service of auto trucks between Taal,
Province of Batangas, and Lucena, Province of Tayabas,
passing through the municipalities of Bauan, Batangas, Ibaan,
Rosario, and San Juan de Bolbok, with the express limitation
that he could not accept passengers from intermediate points
between Taal and Bolbok, except those which were going to
points beyond San Juan de Bolbok or to the Province of
Tayabas; that he inaugurated this irregular in March, 1926, but
maintained it on that part of the line between Taal and Bantilan
only for about three months, when he abandoned that portion of
it in the month of June and did not renew it until five days before
the hearing of case No. 10301, which was set for November 24,
1926, in which hearing the Batangas Transportation Company
asked for additional hours for its line between Batangas and
Bantilan; that in June, 1926, Orlanes sought to obtain a license
as a regular operator on that portion of the line between Bantilan
and Lucena without having asked for a permit for tat portion of
the line between Bantilan and Taal; that from June, 1926,
Orlanes and the Batangas Transportation Company were jointly
operating a regular service between Bantilan and Lucena, with
trips every half an hour, and Orlanes not having asked for a
regular service between Bantilan and Taal, the Batangas
Transportation Company remedied this lack of service under the
authority of the Commission, and increased its trips between
Bantilan and Tayabas to make due and timely connections in
Bantilan on a half-hour service between Bantilan and Batangas
with connections there for Taal and all other points in the
Province of Batangas. It is then alleged that the service
maintained by the company is sufficient to satisafy the
convenience of the public, and that the public convenience does
not require the granting of the permit for the service which
Orlanes petitions, and that to do so would result in ruinous
competition and to the grave prejudice of the company and
without any benefit to the public, and it prayed that the petition of
Orlanes to operate a regular service be denied.
After the evidence was taken upon such issues, the Public
Service Commission granted the petition of Orlanes, as prayed
for, and the company then filed a motion for a rehearing, which
was denied, and the case is now before this court, in which the
appellant assigns the following errors:
The Commission erred in ordering that a certificate of
public convenience be issued in favor of Cayetano
Orlanes to operate the proposed service without
finding and declaring that the public interest will be
prompted in a proper and suitable by the operation of
such service, or when the evidence does not show that
the public interests will be so prompted.
That the Commission erred in denying the motion for a
rehearing.
JOHNS, J.:
The questions presented involve a legal construction of the
powers and duties of the Public Service Commission, and the
purpose and intent for which it was created, and the legal rights
and privileges of a public utility operating under a prior license.
It must be conceded that an autobus line is a public utility, and
that in all things and respects, it is what is legally known as a
common carrier, and that it is an important factor in the business
conditions of the Islands, which is daily branching out and
growing very fast.
Before such a business can be operated, it must apply for, and
obtain, a license or permit from the Public Service Commission,
and comply with certain defined terms and conditions, and when
license is once, granted, the operator must conform to, and
comply with all, reasonable rules and regulations of the Public
Service Commission. The object and purpose of such a
commission, among other things, is to look out for, and protect,
the interests of the public, and, in the instant case, to provide it
with safe and suitable means of travel over the highways in
question, in like manner that a railroad would be operated under
like terms and conditions. To all intents and purposes, the
operation of an autobus line is very similar to that of a railroad,
and a license for its operation should be granted or refused on
like terms and conditions. For many and different reasons, it has
never been the policy of a public service commission to grant a
license for the operation of a new line of railroad which parallels
and covers the same field and territory of another old
established line, for the simple reason that it would result in
ruinous competition between the two lines, and would not be of
any benefit or convenience to the public.
The Public Service Commission has ample power and authority
to make any and all reasonable rules and regulations for the
operation of any public utility and to enforce complience with
them, and for failure of such utility to comply with, or conform to,
such reasonable rules and regulations, the Commission has
power to revoke the license for its operation. It also has ample
power to specify and define what is a reasonable compensation
for the services rendered to the traveling public.
That is to say, the Public Service Commission, as such has the
power to specify and define the terms and conditions upon
which the public utility shall be operated, and to make
reasonable rules and regulations for its operation and the
compensation which the utility shall receive for its services to the
public, and for any failure to comply with such rules and
regulations or the violation of any of the terms and conditions for
which the license was granted the Commission has ample
power to enforce the provisions of the license or even to revoke
it, for any failure or neglect to comply with any of its terms and
provisions.
Hence, and for such reasons, the fact that the Commission has
previously granted a license to any person to operate a bus line
over a given highway and refuses to grant a similar license to
another person over the same highway, does not in the least
create a monopoly in the person of the licensee, for the reason
that at all times the Public Service Commission has the power to
say what is a reasonable compensation to the utility, and to
make reasonable rules and regulations for the convenience of
the traveling public and to enforce them.
In the instant case, Orlanes seek to have a certificate of public
convenience to operate a line of auto trucks with fixed times of
departure between Taal and Bantilan, in the municipality of
Bolbok, Province of Batangas, with the right to receive
passengers and freight from intermediate points. The evidence
is conclusive that at the time of his application, Orlanes was
what is known as an irregular operator between Bantilan and
Taal, and that the Batangas operator between Batangas and
Rosario. Orlanes now seeks to have his irregular changed into a
regular one, fixed hours of departure and arrival between
Bantilan and Taal, and to set aside and nullify the prohibition
against him in his certificate of public convenience, in substance
and to the effect that he shall not have or receive any
passengers or freight at any of the points served by the
Batangas Transportation Company for which that company
holds a prior license from the Commission. His petition to
become such a regular operator over such conflicting routes is
largely based upon the fact that, to comply with the growing
demands of the public, the Batangas Transportation Company,
in case No. 10301, applied to the Commission for a permit to
increase the number of trip hours at and between the same
places from Batangas to Rosario, and or for an order that all
irregular operators be prohibited from operating their respective
licenses, unless they should observe the interval of two hours
before, or one hour after, the regular hours of the Batangas
Transportation Company.
In his petition Orlanes sought to be releived from his prohibition
to become a regular operator, and for a license to become a
regular operator with a permission to make three trips daily
between Bantilan and Taal, the granting of which make him a
regular operator between those points and bring him in direct
conflict and competition over the same points with the Batangas
Transportation Company under its prior license, and in legal
effect that was the order which the Commission made, of which
the Batangas Transportation Company now complains.
The appellant squarely plants its case on the proposition:
Is a certificate of public convenience going to be
issued to a second operator to operate a public utility
in a field where, and in competition with, a first
operator who is already operating, adequate and
satisfactory service?
There is no claim or pretense that the Batangas Transportation
Company has violated any of the terms and conditions of its
license. Neiher does the Public Service Commission find as a
fact that the grantring of a license to Orlanes as a regular
operator between the points in question is required or necessary
for the convenience of the traveling public, or that there is any
complaint or criticism by the public of the services rendered by
the Batangas Transportation Company over the route in
question.
The law creating the Public service Commission of the Philippine
Islands is known as Act No. 3108, as amended by Act No. 3316,
and under it the supervision and control of public utilities is very
broad and comprehensive.
Section 15 of Act No. 3108 provides that the Commission shall
have power, after hearing, upon notice, by order in writing to
require every public utility:
(a) To comply with the laws of the Philippine Islands;
(b) To furnish safe, adequate, and proper service as regards the
manner of furnishing the same as well as the maintenance of the
necessary material equipment, etc;
(c) To establish, construct, maintain, and operate any
reasonable extention of its existing facilities, where such
extension is reasonable and practicable and will furnish
sufficient business to justify the construction and maintenance of
the same;
(d) To keep a uniform system of books, records and accounts;
(e) To make specific answer with regard to any point on which
the Commission requires information, and to furnish annual
reports of finance and operations;
(f) To carry, whenever the Commission may require, a proper
and adequate depreciation account;
(g) To notify the Commission of all accidents;
(h) That when any public utility purposes to increase or reduce
any existing individual rates, it shall give the Commission written
notice thirty days prior to the proposed change; and
(i) "No public utility as herein defind shall operate in the
Philippine Islands without having first secured from the
Commission a certificate, which shall be known as Certificate of
Public Convenience, to the effect that the operation of said
public utility and the authorization to do busibness wikll promote
the public interest in a proper and suitable maner."
Section 16 specially prohibits any discrimination in the handling
of freight charges.
In construing a similar law of the State of Kansas, the United
States Supreme Court, in an opinion written by Chief Justice
Taft, in Wichita Railroad and Light Co. vs. Public Utilities
Commission of Kansas (260 U. S. 48; 67 Law. ed., 124), said:
The proceeding we are considering is governed by
section 13. That is the general section of the act
comprehensively describing the duty of the
Commission, vesting it with power to fix and order
substituted new rates for existing rates. The power is
expressly made to depend on the condition that, after
full hearing and investigation, the Commission shall
find existing rates to be unjust, unreasonable, unjustly
discriminatory, or unduly preferential. We conclude that
a valid order of the Commission under the act must
contain a finding of fact after hearing and investigation,
upon which the order is founded, and that, for lack of
such a finding, the order in this case was void.
This conclusion accords with the construction put upon
similar statutes in other states. (State Public Utilities
Commission ex rel. Springfield vs. Springfield Gas and
E. Co., 291 Ill., 209; P. U. R., 1920C, 640; 125 N. E.
891; State Public Utilities Co. vs. Baltimore and O. S.
W. R. Co., 281 Ill; 405; P. U. R., 1918B, 655; 118 N.
E., 81.) Moreover, it accords with general principles of
constitutional government. The maxim that a
legislature may not delegate legislative power has
some qualifications, as in the creation of municipalities,
and also in the creation of administrative boards to
apply to the myriad details of rate schedule the
 regulatory police power of the state. The latter
qualification is made necessary in order that the
legislative power may be effectively exercised. In
creating such an administrative agency, the legislature,
to prevent its being a pure delegation of legislative
power, must enjoin upon a certain course of procedure
and certain rules of decision in the perfomance of its
function. It is a wholesome and necessary principle
that such an agency must pursue the procedure and
rules enjoined, and show a substantial compliance
therewith, to give validity to its action. When, therefore,
such an administrative agency is required, as a
condition precedent to an order, to make a finding of
facts, the validity of the order rest upon the needed
finding. It is lacking, the order is ineffective.
It is pressed on us that the lack of an express finding
may be supplied by implication and by reference to the
averments of the petition invoking the action of the
Commission. We cannot agree to this point. It is
doubtful whether the facts averred in the petition were
sufficient to justify a finding that the contract rates were
unreasonably low; but we do not find it necessay to
answer this question. We rest our decision on the
principle that an express finding of unreasonableness
by the Commission was indispensable under the
statutes of the state.
That is to say, in legal effect, that the power of the Commission
to issue a certificate of public convenience depends on the
condition precedent that, after a full hearing and investigation,
the Commission shall have found as a fact that the operation of
the proposed public service and its authority to do business
must be based upon the finding that it is for the convenience of
the public.
In the Philippine Islands the cetificate of public convenience is
as folows:
CERTIFICATE OF PUBLIC CONVENIENCE
To whom it may concern:
THIS IS TO CERTIFY, That in pursuance of the power
and authority conferred upon it by subsection (i) of
section 15 of Act No. 3108 of the Philippine
Legislature,
THE PUBLIC SERVICE COMMISSION OF THE
PHILIPPINE ISLANDS, after having duly considered
the application of ................. for a certificate of public
convenience the operation of ........................ in
connection with the evidence submitted in support
thereof, has rendered its decision on................, 192....,
in case No. ............, declaring that the operation by the
applicant ...................... of the business above
described will promote the public interests in a proper
and suitable manner, and granting................. to this
effect the corresponding authority, subject to the
conditions prescribed in said decision.
Given at Manila Philippine Islands, this ......... day
of ....................., 192 .....
PUBLIC SERVICE COMMISSION OF THE
PHILIPPINE ISLANDS
By..................................
Commissioner
Attested:
.....................................
Secretary
That is to say, that the certificate of public convenince granted to
Orlanes in the instant case expressly recites that it "will promote
the public interests in a proper and suitable manner." Yet no
such finding of fact was made by the Commission.
In the instant case, the evidence is conclusive that the Batangas
Transportation Company operated its line five years before
Orlanes ever turned a wheel, yet the legal effect of the decision
of the Public Service Commission is to give an irregular
operator, who was the last in the field, a preferential right over a
regular operator, who was the first in the field. That is not the
law, and there is no legal principle upon which it can be
sustained.
So long as the first licensee keeps and performs the terms and
conditions of its license and complies with the reasonable rules
and regulations of the Commission and meets the reasonable
demands of the public, it should have more or less of a vested
and preferential right over a person who seeks to acquire
another and a later license over the same route. Otherwise, the
first license would not have protection on his investment, and
would be subject to ruinous competition and thus defeat the very
purpose and intent for which the Public Service Commission
was created.
It does not appear that the public has ever made any complaint
the Batangas Transportation Company, yet on its own volition
and to meet the increase of its business, it has applied to the
Public Service Commission for authority to increase the number
of daily trips to nineteen, thus showing a spirit that ought to be
commended.
Such is the rule laid down in the case of Re B. F. Davis Motor
Lines, cited by the Public Service Commission of Indiana (P. U.
R., 1927-B, page 729), in which it was held:
A motor vehicle operator having received a certificate
with a voluntary stipulation not to make stops (that is
not to carry passengers) on a part of a route served by
other carriers, and having contracted with such carries
not to make the stops, will not subsequently are able to
carry all passengers who present theselves for
transportation within the restricted district.
And in Re Mount Baker Development Co., the Public Service
Commission of Washington (P. U. R., 1925D, 705), held:
A cerificate authorizing through motor carrier service
should not authorize local service between points
served by the holders of a certificate, without first
giving the certificate holders an opportunity to render
additional service desired.
In the National Coal Company case (47 Phil., 356), this court
said:
When there is no monopoly. — There is no such thing
as a monopoly where a property is operated as a
public utility under the rules and regulations of the
Public Utility Commission and the terms and provision
of the Public Utility Act.
Section 775 of Pond on Public Utilities, which is recognized as a
standard authority, states the rule thus:
The policy of regulation, upon which our present public
utility commission plan is based and which tends to do
 away with competition among public utilities as they
are natural monopolies, is at once reason and the
justification for the holding of our courts that the
regulation of an existing system of transportation,
which is properly serving a given field, or may be
required to do so, is to be preferred to competition
among several independent systems. While requiring a
proper service from, a single system for a city or
territory in consideration for protecting it as a monopoly
for all service required and in conserving its resources,
no economic waste results and service may be
furnished at the minimum cost. The prime object and
real purpose of commission control is to secure
adequate sustained service for the public at the least
possible cost, and to protect and conserve investments
already made for this purpose. Experience has
demonstrated beyond any question that competition
among natural monopolies is wasteful economically
and results finally in insufficient and unsatisfactory
service and extravagant rates.
The rule has been laid down, without dissent in numerous
decisions, that where an operator is rendering good, sufficient
and adequate service to the public, that the convenince does not
require and the public interests will not be promoted in a proper
and suitable manner by giving another operator a certificate of
public convenience to operate a competing line over the same
ruote.
In Re Haydis (Cal.), P. U. R., 1920A, 923:
A certificate of convenience and necessity for the
operation of an auto truck line in occupied territory will
not be granted, where there is no complaint as to
existing rates and the present company is rendering
adequate service.
In Re Chester Auto Bus Line (Pa.), P. U. R., 1923E, 384:
A Commission should not approve an additional
charter and grant an additional certificate to a second
bus company to operate in territory covered by a
certificate granted to another bus company as a
subsidiary of a railway company for operation in
conjunction with the trolley system where one bus
service would be ample for all requirements.
In Re Branham (Ariz.), P. U. R., 1924C, 500:
A showing must be clear and affirmative that an
existing is unable or has refused to maintain adequate
and satisfactory service, before a certificate of
convenience and necessity will be granted for the
operation of an additional service.
In Re Lambert (N. H.), P. U. R., 1923D, 572:
Authority to operate a jitney bus should be refused
when permision has been given to other parties to
operate and, from the evidence, they are equipped
adequately to accommodate the public in this respect,
no complaints having been received in regard to
service rendered.
In Re White (Md.), P. U. R., 1924E, 316:
A motor vehicle operator who has built up a business
between specified points after years of effort should
not be deprived of the fruits of his labor and of the
capital he has invested in his operation by a larger
concern desiring to operate between the same points.
In Re Kocin (Mont.), P. U. R., 1924C, 214:
A certificate authorizing the operation of passenger
motor service should be denied where the record
shows that the admission of another operator into the
territory served by present licensees is not necessary
and would render their licensee oppressive and
confiscatory because of further division and depletion
of revenues and would defeat the purpose of the
statue and disorganize the public service.
In Re Nevada California Stage Co., P. U. R., 1924A, 460:
The Nevada Commission denied an application for a
certificate of convenience and necessity for the
operation of an automobile passenger service in view
of the fact that the service within the territory proposed
to be served appeared to be adequate and it was the
policy of the Commission to protect the established line
in the enjoyment of business which it had built, and in
view of the further fact that it was very uncertain
whether the applicant could secure sufficient business
to enable him to operate profitably.
In Re Idaho Light & P. Co. (Idaho), P. U. R., 1915A, 2:
Unless it is shown that the utility desiring to enter a
competitive field can give such service as will be a
positive advantage to the public, a certificate of
convenience will be denied by the Idaho Commission,
provided that the existing utility furnishing adequate
service at reasonable rates at the time of the
threatened competition.
In Scott, vs. Latham (N. Y. 2d Dist), P. U. R., 1921C, 714:
Competition between bus lines should be prohibited
the same as competition between common carriers.
In Re Portland Taxicab Co. (Me.), P. U. R., 1923E, 772:
Certificates permitting the operation of motor vehicles
for carrying passengers for hire over regular routes
between points served by steam and electric railways
should not be granted when the existing service is
reasonable, safe, and adequate as required by statue.
In Re Murphy (Minnesota), P.U.R., 1927C, 807:
Authority to operate an auto transportation service over
a route which is served by another auto transportation
company should be denied if no necessity is shown for
additional service.
In Re Hall, editorial notes, P. U. R., 1927E:
A certificate of convenience and necessity for the
operation of a motor carrier service has been denied
by the Colorado Commission where the only ground
adduced for the certificate was that competition
thereby afforded to an existing utility would benefit the
public by lowering rates. The Commission said: "Up to
the present time the Commission has never issued a
certificate authorizing a duplication of motor vehicle
operation over a given route unless it appeared that
the service already rendered was not adequate, that
there was no ruinous competition or that the second
applicant could, while operating on a sound
businesslike basis, afford transportation at cheaper
rates than those already in effect. There has been no
complaint to date as to the rates now being charged on
the routes over which the applicant desires to serve.
Moreover, the Commission stand ready, at any time
the unreasonable of the rates of any carrier are
questioned, to determine their reasonableness and to
 order them reduced if they are shown to be
unreasonable." In this case the Commission also
expressed its disappoval of the practice of an applicant
securing a certificate for the sole purpose of
transferring it to another.
In Re Sumner (Utah), P. U. R., 1927D, 734:
The operation of an automobile stage line will not be
authorized over a route adequately served by a
railroad and other bus line, although the proposed
service would be an added convenience to the
territory.
In Bartonville Bus Line vs. Eagle Motor Coach Line (Ill. Sup.
Court), 157 N. E., 175; P. U. R., 1927E, 333:
importance deserves. The Government having taken over the
control and supervision of all public utilities, so long as an
operator under a prior license complies with the terms and
conditions of his license and reasonable rules and regulation for
its operation and meets the reasonable demands of the public, it
is the duty of the Commission to protect rather than to destroy
his investment by the granting of a subsequent license to
another for the same thing over the same route of travel. The
granting of such a license does not serve its convenience or
promote the interests of the public.
The decision of the Public Service Commission, granting to
Orlanes the license in question, is revoked and set aside, and
the case is remanded to the Commission for such other and
further proceedings as are not inconsistent with this opinion.
Neither party to recover costs on this appeal. So ordered.

The policy of the state is to compel an established

public utility occupying a given filed to provide
adequate service and at the same time protect it from
ruinous competition, and to allow it an apportunity to
provide additional service when required instead of
permitting such service by a newly established
competitor.

Upon the question of "Reason and Rule for Regulation," in

section 775, Pond says:

The policy of regulation, upon which our present public

utility commission plan is based and which tends to do
away with competition among public utilities as they
are natural monopolies, is at once the reason and the
justification for the holding of our courts that the
regulation of an existing system of transportation,
which is properly serving a given field or may be
required to do so, is to be preferred to competition
among several independent systems. While requiring a
proper service from a single system for a city or
territory in consideration for protecting it as a monopoly
for all the service required and in conserving its
resources, no economic waste results and service may
be furnished at the minimum cost. The prime object
and real purpose of commission control is to secure
adequate sustained service for the public at the least
possible cost, and to protect and conserve investments
already made for this purpose. Experience has
demostrated beyond any question that competition
among natural monopolies is wasteful economically
and results finally in insufficient and unsatisfactory
service and extravagant rates. Neither the number of
the individuals demanding other service nor the
question of the fares constitutes the entire question,
but rather what the proper agency should be to furnish
the best service to the public generally and
continuously at the least cost. Anything which tends to
cripple seriously or destroy an established system of
transportation that is necessary to a community is not
a convenience and necessity for the public and its
introduction would be a handicap rather than a help
ultimately in such a field.

That is the legal construction which should be placed on

paragraph (e) of section 14, and paragraph (b) and (c) of section
15 of the Public Service Law.

We are clearly of the opinion that the order of the Commission

granting the petition of Orlanes in question, for the reason
therein stated, is null and void, and that it is in direct conflict with
the underlying and fundamental priciples for which the
Commission was created.1awphi1.net

The question presented is very important and far-reaching and

one of first impression in this court, and for such reasons we
have given this case the careful consideration which its
#83
G.R. No. L-24701 December 16, 1970
INTESTATE TESTATE OF TEOFILO M. TIONGSON, petitioner,
vs.
THE PUBLIC SERVICE COMMISSION and MARIO Z.
LANUZA, respondents.
MAKALINTAL, J.:
On May 11, 1965 the Public Service Commission decided its
Case No. 124626, approving the application of Mario Z. Lanuza
for a certificate of public convenience to install and operate a 20-
ton daily capacity ice-plant in Pagsanjan, Laguna, and to sell the
ice to be produced in said municipality as well as in the
municipalities of Longos, Paete, Pakil, Pangil, Siniloan, Famy,
Sta. Maria, Cavinti, Magdalena, Majayjay, Nagcarlan, Rizal,
Lilio, Sta. Cruz, Lumban, Pila and Victoria, all in the province of
Laguna.
Three existing operators had opposed the application. One of
them, Victorino de Peña, who has an ice-plant in Mauban,
Quezon, withdrew his opposition after the applicant excluded the
municipality of Luisiana from the territory originally applied for.
Another oppositor, Emilio Gomez, did not appeal from the
decision of the Public Service Commission. The petitioner here,
the Estate of Teofilo M. Tiongson, remains the only oppositor in
the present appeal.
The petitioner is the grantee of a certificate of public
convenience to maintain and operate a 30-ton (increased to 40
tons in 1960 and then to 70 tons in 1964) ice plant in San Pablo
City, with authority to sell ice therein as well as in the
municipalities of Sta. Cruz, Rizal, Nagcarlan, Calauan, Victoria,
Pila, Lumban, Paete, Pakil, Pangil, Cavinti, Siniloan and
Alaminos.
There is no question as to the applicant's financial capacity. The
principal issue is whether there is sufficient need for ice in the
places stated in the decision to justify the establishment of a
plant in Pagsanjan with the daily capacity authorized by the
Commission. This issue is essentially one of fact on which, as a
rule, the findings of the Commission are binding on this Court
unless it clearly appears that there is no evidence to reasonably
support them.1 Such findings in this case, and the conclusion
derived therefrom, are as follows:
At one of the hearings of this case, applicant, a businessman
and Filipino citizen, manifested that at present there is no ice
plant in Pagsanjan, Laguna; that there was formerly one in that
municipality but it was transferred to San Pablo City; that the
nearest ice plant is located in Kalayaan (Longos, Laguna) which
is about 10 kilometers from Pagsanjan, Laguna; that there is a
demand for ice by the people of Pagsanjan and of the towns
proposed to be served by the applicant because the present
supply of ice coming from ice plant operators and distributed by
ice dealers is inadequate; that in the territory proposed to be
served by applicant, ice is needed for "halo-halo," for cooling soft
drinks and drinking water, and for the preservation of the fish
caught by fishermen; that aside from these refreshment parlors,
there are "sari-sari" stores selling soft drinks; that along Laguna
de Bay from Lumban to Sta. Maria, Laguna, from 30% to 50% of
the people are engaged in fishing throughout the year; that
fishes caught consist of "dalag," "hito," "carpa", "banak," and
"shrimps" and to preserve these fishes from the time they are
caught until they are sold or disposed of, ice is needed; that ice
is also needed in movie houses where soft drinks are sold, in
homes, clinics and hospitals that in a small town where there are
about 20 stores, about 6 blocks of ice of 300 lbs. each are
consumed during the day, and in a big town like Sta. Cruz, the
consumption is about 20 blocks of ice of 300 lbs. each during
the rainy season and the consumption is about double during
the dry season; and that due to the inadequacy of ice supply in
the towns proposed to be served by applicant, an ice block of ice
of 300 lbs. costs from P5.00 to P8.00.
xxx xxx xxx
Applicant presented the following witnesses: Manuel Zaide, a
fish dealer of Paete, Laguna; Willie Limlengco, a businessman
and sari-sari store owner of Pagsanjan Laguna; Conrado
Almario, a refreshment parlor and sari-sari store owner of
Lumban, Laguna; Alfonso Rebong, Municipal Mayor of Victoria,
Laguna; and Ernesto Marina, business (sic) and sari-sari store
owner of Pila, Laguna.
All witnesses presented at the hearings of this case manifest
that there is shortage of ice supply in the territory proposed to be
served by the applicant, especially during summer months; that
the fish dealers do not get their ice requirements so that most
often fish are not preserved in ice when sent to other places to
be sold like Sta. Maria, San Pablo City, or Manila; and that when
the ice supply is inadequate, shrimps which are shipped to
Manila are often cooked to minimize spoilage.
The oppositors to this application have not established to the
satisfaction of the Commission the adequacy of the service
rendered by them in the eighteen (18) municipalities proposed to
be served by the applicant, considering that most of these
municipalities are far from the locations of their ice plants.
After a thorough examination of the evidence submitted by the
parties and after a careful consideration of our records on
existing service in the territory applied for, and considering that
an ice plant which manufactures its ice in the locality where it
sells that commodity is more advantageous and convenient to
the general public in that locality than ice plant located some
kilometers away, and that applicant is financially capable of
undertaking the installation, and maintaining the operation of the
proposed service, the Commission believes that the oppositions
filed by Emilio Gomez, operator of an ice plant in San Juan,
Longos, Laguna, and Teofilo Tiongson, operator of an ice plant
in San Pablo City, in this case should be, as these are hereby
overruled and that the application herein filed may be, as it is
hereby, APPROVED.
The foregoing findings are assailed on two grounds: (1) that only
eight witnesses were presented by the applicant, who
individually testified as to the need for ice in each of only seven
of the municipalities included in the application; and (2) that their
testimony even as to those referred to by them is deficient. We
have gone over the record in this regard and found enough
support therein for the decision appealed from. Manuel Zaide is
a fish dealer in Paete, Willie Limlengco is a sari-sari and
refreshment store-owner in Pagsanjan; Conrado Almario has a
similar business in Lumban; Alfonso Rebong was the municipal
mayor of Victoria since 1960; Ernesto Marina is a businessman
in Pila; Jose Acuiza is a businessman and fisherman in Pakil;
Jose Maceda was the municipal secretary of Pagsanjan; and
Eligio Lorenzo is a grocery merchant in Sta. Cruz. They all
affirmed the inadequacy and frequent lack of ice supply in their
respective localities not only for home consumption but also for
restaurants and refreshment parlors as well as for the fishing
industry or occupation of the inhabitants, particularly in the
regions bordering Laguna Bay. It is true their combined
testimony did not cover all the municipalities applied for, but the
applicant himself, respondent here, demonstrated sufficient
familiarity with the entire area to be able to give evidence, as he
did, on the ice-supply situation in everyone of them. He did a lot
of traveling as owner of three movie houses in Pagsanjan, Sta.
Cruz and Pila, and in connection with his application in this case
personally conducted a thorough investigation of the local
demands for ice in the municipalities covered by said
application. That he is the applicant does not necessarily affect
his credibility; on the contrary, such an investigation was
necessary and called for by sound business policy, for no one
would invest capital in the production and sale of any commodity
without first ascertaining the needs of the prospective market.
One significant fact may be noted insofar as the petitioner's
existing ice plant in San Pablo is concerned. The petitioner
formerly operated another plant in Pagsanjan, and in each of
them it had one delivery truck to service the customers in
different municipalities. The Pagsanjan plant, however, was
closed in 1952 and transferred to San Pablo, and since then the
petitioner has been maintaining only one delivery-truck service,
with a single dealer-employee in charge. Under the
circumstances the Public Service Commission correctly
remarked that "the oppositors have not established ... the
adequacy of the service rendered by them in the eighteen (18)
municipalities proposed to be served by the applicant,
considering that most of these municipalities are far from the
locations of their ice-plants.

The "prior operator" and "protection of investment" rules cited by

petitioner cannot take precedence over the convenience of the
public. There is no ice plant at present in Pagsanjan; and from
the testimony of the witnesses for the applicant there exists a
great demand for ice not only there but also in certain
neighboring municipalities. There is nothing in the record to
show that the petitioner had exerted efforts to meet this demand
before the respondent made his offer to service the areas where
ice was needed.2 Moreover the respondent is authorized to
produce only 20 tons of ice daily, whereas the petitioner has
been allowed to increase its daily capacity from 30 to 40 tons in
1960, and recently, in 1964, to 70 tons. This only proves that
there is indeed a great demand for ice in the area applied for by
the respondent, and negates the probability of ruinous
competition. On the contrary the resulting competition will
undoubtedly benefit the public through improvement in the
service and reduction in retail prices.

On the whole, we find no reason to deviate from the rule

heretofore consistently applied that findings and conclusions of
fact made by the Public Service Commission, when supported
by evidence, are binding upon this Court.

WHEREFORE, the decision appealed is affirmed, with costs

against the petitioner.