National Development Company vs.

CA
Facts:
The evidence before us shows that in accordance with a memorandum agreement entered into
between defendants NDC and MCP on September 13, 1962, defendant NDC as the first
preferred mortgagee of three ocean going vessels including one with the name 'Dona Nati'
appointed defendant MCP as its agent to manage and operate said vessel for and in its behalf
and account (Exh. A). Thus, on February 28, 1964 the E. Philipp Corporation of New York
loaded on board the vessel "Dona Nati" at San Francisco, California, a total of 1,200 bales of
American raw cotton consigned to the order of Manila Banking Corporation, Manila and the
People's Bank and Trust Company acting for and in behalf of the Pan Asiatic Commercial
Company, Inc., who represents Riverside Mills Corporation (Exhs. K-2 to K7-A & L-2 to L-7-A).
Also loaded on the same vessel at Tokyo, Japan, were the cargo of Kyokuto Boekui, Kaisa,
Ltd., consigned to the order of Manila Banking Corporation consisting of 200 cartons of sodium
lauryl sulfate and 10 cases of aluminum foil (Exhs. M & M-1). En route to Manila the vessel
Dofia Nati figured in a collision at 6:04 a.m. on April 15, 1964 at Ise Bay, Japan with a Japanese
vessel 'SS Yasushima Maru' as a result of which 550 bales of aforesaid cargo of American raw
cotton were lost and/or destroyed, of which 535 bales as damaged were landed and sold on the
authority of the General Average Surveyor for Yen 6,045,-500 and 15 bales were not landed
and deemed lost (Exh. G). The damaged and lost cargoes was worth P344,977.86 which
amount, the plaintiff as insurer, paid to the Riverside Mills Corporation as holder of the
negotiable bills of lading duly endorsed (Exhs. L-7-A, K-8-A, K-2-A, K-3-A, K-4-A, K-5-A, A- 2,
N-3 and R-3}. Also considered totally lost were the aforesaid shipment of Kyokuto, Boekui Kaisa
Ltd., consigned to the order of Manila Banking Corporation, Manila, acting for Guilcon, Manila,
The total loss was P19,938.00 which the plaintiff as insurer paid to Guilcon as holder of the duly
endorsed bill of lading (Exhibits M-1 and S-3). Thus, the plaintiff had paid as insurer the total
amount of P364,915.86 to the consignees or their successors-in-interest, for the said lost or
damaged cargoes. Hence, plaintiff filed this complaint to recover said amount from the
defendants-NDC and MCP as owner and ship agent respectively, of the said 'Dofia Nati' vessel.

On November 12, 1969, after DISC and MCP presented their respective evidence, the trial court
rendered a decision ordering the defendants MCP and NDC to pay jointly and solidarity to DISC
the sum of P364,915.86 plus the legal rate of interest to be computed from the filing of the
complaint on April 22, 1965, until fully paid and attorney's fees of P10,000.00. Likewise, in said
decision, the trial court granted MCP's crossclaim against NDC.

MCP interposed its appeal on December 20, 1969, while NDC filed its appeal on February 17,
1970 after its motion to set aside the decision was denied by the trial court in its order dated
February 13,1970.

On November 17,1978, the Court of Appeals promulgated its decision affirming in toto the
decision of the trial court.

Issue:
The pivotal issue in these consolidated cases is the determination of which laws govern loss or
destruction of goods due to collision of vessels outside Philippine waters

Held:
This issue has already been laid to rest by this Court of Eastern Shipping Lines Inc. v. IAC (1 50
SCRA 469-470 [1987]) where it was held under similar circumstance "that the law of the country
to which the goods are to be transported governs the liability of the common carrier in case of
their loss, destruction or deterioration" (Article 1753, Civil Code). Thus, the rule was specifically
laid down that for cargoes transported from Japan to the Philippines, the liability of the carrier is
governed primarily by the Civil Code and in all matters not regulated by said Code, the rights
and obligations of common carrier shall be governed by the Code of commerce and by laws
(Article 1766, Civil Code). Hence, the Carriage of Goods by Sea Act, a special law, is merely
suppletory to the provision of the Civil Code.

In the case at bar, it has been established that the goods in question are transported from San
Francisco, California and Tokyo, Japan to the Philippines and that they were lost or due to a
collision which was found to have been caused by the negligence or fault of both captains of the
colliding vessels. Under the above ruling, it is evident that the laws of the Philippines will apply,
and it is immaterial that the collision actually occurred in foreign waters, such as Ise Bay, Japan.

Tatad vs. Sec. Garcia

Facts:
In 1989, DOTC planned to construct a light railway transit line along EDSA, a major
thoroughfare in Metropolitan Manila, which shall traverse the cities of Pasay, Quezon,
Mandaluyong and Makati. The plan, referred to as EDSA Light Rail Transit III (EDSA LRT III),
was intended to provide a mass transit system along EDSA and alleviate the congestion and
growing transportation problem in the metropolis.

After evaluating the prequalification, bids, the PBAC issued a Resolution on May 9, 1991
declaring that of the five applicants, only the EDSA LRT Consortium "met the requirements of
garnering at least 21 points per criteria [sic], except for Legal Aspects, and obtaining an over-all
passing mark of at least 82 points" (Rollo, p. 146). The Legal Aspects referred to provided that
the BOT/BT contractor-applicant meet the requirements specified in the Constitution and other
pertinent laws (Rollo, p. 114).

In a letter dated March 13, 1992, Executive Secretary Franklin Drilon, who replaced Executive
Secretary Orbos, informed Secretary Prado that the President could not grant the requested
approval for the following reasons: (1) that DOTC failed to conduct actual public bidding in
compliance with Section 5 of the BOT Law; (2) that the law authorized public bidding as the only
mode to award BOT projects, and the prequalification proceedings was not the public bidding
contemplated under the law; (3) that Item 14 of the Implementing Rules and Regulations of the
BOT Law which authorized negotiated award of contract in addition to public bidding was of
doubtful legality; and (4) that congressional approval of the list of priority projects under the BOT
or BT Scheme provided in the law had not yet been granted at the time the contract was
awarded (Rollo, pp. 178-179).

In view of the comments of Executive Secretary Drilon, the DOTC and private respondents
re-negotiated the agreement. On April 22, 1992, the parties entered into a "Revised and
Restated Agreement to Build, Lease and Transfer a Light Rail Transit System for EDSA" (Rollo,
pp. 47-78) inasmuch as "the parties [are] cognizant of the fact the DOTC has full authority to
sign the Agreement without need of approval by the President pursuant to the provisions of
Executive Order No. 380 and that certain events [had] supervened since November 7, 1991
which necessitate[d] the revision of the Agreement" (Rollo, p. 51). On May 6, 1992, DOTC,
represented by Secretary Jesus Garcia vice Secretary Prado, and private respondent entered
into a "Supplemental Agreement to the 22 April 1992 Revised and Restated Agreement to Build,
Lease and Transfer a Light Rail Transit System for EDSA" so as to "clarify their respective rights
and responsibilities" and to submit [the] Supplemental Agreement to the President, of the
Philippines for his approval" (Rollo, pp. 79-80).

In the main, petitioners asserted that the Revised and Restated Agreement of April 22, 1992
and the Supplemental Agreement of May 6, 1993 are unconstitutional and invalid for the
following reasons:

(1) the EDSA LRT III is a public utility, and the ownership and operation thereof is limited by the
Constitution to Filipino citizens and domestic corporations, not foreign corporations like private
respondent;

(2) the Build-Lease-Transfer (BLT) scheme provided in the agreements is not the BOT or BT
Scheme under the law;

(3) the contract to construct the EDSA LRT III was awarded to private respondent not through
public bidding which is the only mode of awarding infrastructure projects under the BOT law;
and

(4) the agreements are grossly disadvantageous to the government.

Private respondent EDSA LRT Corporation, Ltd. to whom the contract to construct the EDSA
LRT III was awarded by public respondent, is admittedly a foreign corporation "duly incorporated
and existing under the laws of Hongkong" (Rollo, pp. 50, 79). There is also no dispute that once
the EDSA LRT III is constructed, private respondent, as lessor, will turn it over to DOTC, as
lessee, for the latter to operate the system and pay rentals for said use.

Issue:
Can respondent EDSA LRT Corporation, Ltd., a foreign corporation own EDSA LRT III; a public
utility?
Held:
What private respondent owns are the rail tracks, rolling stocks like the coaches, rail stations,
terminals and the power plant, not a public utility. While a franchise is needed to operate these
facilities to serve the public, they do not by themselves constitute a public utility. What
constitutes a public utility is not their ownership but their use to serve the public (Iloilo Ice & Cold
Storage Co. v. Public Service Board, 44 Phil. 551, 557 558 [1923]).

The Constitution, in no uncertain terms, requires a franchise for the operation of a public utility.
However, it does not require a franchise before one can own the facilities needed to operate a
public utility so long as it does not operate them to serve the public.

Section 11 of Article XII of the Constitution provides:

No franchise, certificate or any other form of authorization for the operation of a public utility
shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least sixty per centum of whose capital is owned
by such citizens, nor shall such franchise, certificate or authorization be exclusive character or
for a longer period than fifty years . . . (Emphasis supplied).

In law, there is a clear distinction between the "operation" of a public utility and the ownership of
the facilities and equipment used to serve the public. The right to operate a public utility may
exist independently and separately from the ownership of the facilities thereof. One can own
said facilities without operating them as a public utility, or conversely, one may operate a public
utility without owning the facilities used to serve the public. The devotion of property to serve the
public may be done by the owner or by the person in control thereof who may not necessarily be
the owner thereof. While private respondent is the owner of the facilities necessary to operate
the EDSA. LRT III, it admits that it is not enfranchised to operate a public utility (Revised and
Restated Agreement, Sec. 3.2; Rollo, p. 57). In view of this incapacity, private respondent and
DOTC agreed that on completion date, private respondent will immediately deliver possession
of the LRT system by way of lease for 25 years, during which period DOTC shall operate the
same as a common carrier and private respondent shall provide technical maintenance and
repair services to DOTC (Revised and Restated Agreement, Secs. 3.2, 5.1 and 5.2; Rollo, pp.
57-58, 61-62). Technical maintenance consists of providing (1) repair and maintenance facilities
for the depot and rail lines, services for routine clearing and security; and (2) producing and
distributing maintenance manuals and drawings for the entire system

Radio Communication of the Phils, Inc v. NTC

Facts:
Petitioner has been operating a radio communications system since 1957 under its legislative
franchise granted by Republic Act No. 2036 which was enacted on June 23, 1957.
In 1968, the petitioner established a radio telegraph service in Sorsogon, Sorsogon. In 1971,
another radio telegraph service was put up in San Jose, Mindoro followed by another in
Catarman, Samar in 1976. The installation of radio telephone services started in 1971 in San
Jose, Mindoro; then in Sorsogon, Sorsogon and Catarman, Samar in 1983.

In a decision dated June 24, 1980 in NTC Case No. 80-08, private respondent Kayumanggi
Radio Network Incorporated was authorized by the public respondent to operate radio
communications systems in Catarman, Samar and in San Jose, Mindoro.

On December 14, 1983, the private respondent filed a complaint with the NTC alleging that the
petitioner was operating in Catarman, Samar and in San Jose, Mindoro without a certificate of
public covenience and necessity. The petitioner, on the other hand, counter-alleged that its
telephone services in the places subject of the complaint are covered by the legislative
franchise recognized by both the public respondent and its predecessor, the Public Service
Commission. In its supplemental reply, the petitioner further stated that it has been in operation
in the questioned places long before private respondent Kayumanggi filed its application to
operate in the same places.

After conducting a hearing, NTC, in its decision dated August 22, 1984 ordered petitioner RCPI
to immediately cease or desist from the operation of its radio telephone services in Catarman
Northern Samar; San Jose, Occidental Mindoro; and Sorsogon, Sorsogon stating that under
Executive Order No. 546, a certificate of public convenience and necessity is mandatory for the
operation of communication utilities and services including radio communications.

Issue:
Whether or not petitioner RCPI, a grantee of a legislative franchise to operate a radio company,
is required to secure a certificate of public convenience and necessity before it can validly
operate its radio stations including radio telephone services in Catarman, Northern Samar; San
Jose, Occidental Mindoro; and Sorsogon, Sorsogon.

Held:
Pursuant to Presidential Decree No. 1 dated September 23,1972, reorganizing the executive
branch of the National Government, the Public Service Commission was abolished and its
functions were transferred to three specialized regulatory boards, as follows: the Board of
Transportation, the Board of Communications and the Board of Power and Waterworks. The
functions so transferred were still subject to the limitations provided in sections 14 and 15 of the
Public Service Law, as amended. With the enactment of Executive Order No. 546 on July 23,
1979 implementing P.D. No.1, the Board of Communications and the Telecommunications
Control Bureau were abolished and their functions were transferred to the National
Telecommunications Commission (Sec. 19(d), Executive Order No. 546).

It is clear from the aforequoted provision that the exemption enjoyed by radio companies from
the jurisdiction of the Public Service Commission and the Board of Communications no longer
exists because of the changes effected by the Reorganization Law and implementing executive
orders. The petitioner's claim that its franchise cannot be affected by Executive Order No. 546
on the ground that it has long been in operation since 1957 cannot be sustained.

Thus, in the words of R.A. No. 2036 itself, approval of the then Secretary of Public Works and
Communications was a precondition before the petitioner could put up radio stations in areas
where it desires to operate. It has been repeated time and again that where the statutory norm
speaks unequivocally, there is nothing for the courts to do except to apply it. The law, leaving no
doubt as to the scope of its operation, must be obeyed. (Gonzaga v. Court of Appeals, 51 SCRA
381).

The records of the case do not show any grant of authority from the then Secretary of Public
Works and Communications before the petitioner installed the questioned radio telephone
services in San Jose, Mindoro in 1971. The same is true as regards the radio telephone
services opened in Sorsogon, Sorsogon and Catarman, Samar in 1983. No certificate of public
convenience and necessity appears to have been secured by the petitioner from the public
respondent when such certificate,was required by the applicable public utility regulations

Luzon Stevedoring v. Public Service Commission

Facts:
The evidence also sufficiently establishes that respondents are regularly engaged in this hauling
business serving a limited portion of the public. Respondent Luzon Stevedoring Company, Inc.,
has among its regular customers the San Miguel Glass Factory, PRATRA, Shell Co., of P. I.,
Ltd., Standard Oil Co., of New York and Philippine-Hawaiian; while respondent Visayan
Stevedore transportation Co., has among its regular customers the Insular Lumber, Shell
Company, Ltd., Kim Kee Chua Yu & Co., PRATRA and Luzon Merchandising Corporation.
During the period from January, 1949 and up to the present, respondents Luzon Stevedoring
Co. Inc., has been rendering to PRATRA regularly and on many occasions such service by
carrying fertilizer from Manila to various points in the Provinces of Negros Occidental and Capiz,
such as Hinigatan, Silay, Fabrica, Marayo, Mambaquid, Victorias and Pilar, and on the return
services, as evidenced by Exhibits A, A-1, A-2, A-3 and A-4, respondent Luzon Stevedoring
Company, Inc., charged PRATRA at the rate of P0.60 per picul or bag of sugar and, according
to Mr. Mauricio Rodriquez, chief of the division in charge of sugar and fertilizer of the PRATRA,
for the transportation of fertilizer, this respondent charged P12 per metric ton. During practically
the same period, respondent Visayan Stevedore Transportation Company transported in its
barges and towed by its tugboats sugar for Kim Kee Chua Yu & Company coming from
Victorias, Marayo and Pilar to Manila, and for Luzon Merchandising Corporation, from
Hinigaran, Bacolod, Marayo and Victorias to Manila. For such service respondent Visayan
Stevedore Transportation Company charge Kim Kee Chua Yu Company for freightage P0.60
per picul or bag as shown in Exhibits C, C-1, C-2, C-3, C-4, C-5, C-6, C-7 and C-8, and Luzon
Merchandising Corporation was also charged for the same service and at the same rate as
shown in Exhibits B, B-1 and B-2.
It was upon these findings that the Commission made the order now sought to be reviewed,
upon complaint of the Philippine Shipowners' Association charging that the then respondent
were engaged in the transportation of cargo in the Philippines for hire or compensation without
authority or approval of the Commission, having adopted, fixed and collected freight charges at
the rate of P0.60 per bag or picul, particularly sugar, loaded and transported in their lighters and
towed by their tugboats between different points in the Province of Negros Occidental and
Manila, which said rates resulted in ruinous competition with complainant.

Issue:
Whether or not the respondents needed the authority from the Public Service Commission to
continue their business.

Held:
It is contended that "if the Public Service Act were to be construed in such manner as to include
private lease contracts, said law would be unconstitutional," seemingly implying that, to prevent
the law from being in contravention of the Constitution, it should be so read as to embrace only
those persons and companies that are in fact engaged in public service" with its corresponding
qualification of an offer to serve indiscriminately the public.".

It has been already shown that the petitioners' lighters and tugboats were not leased, but used
to carry goods for compensation at a fixed rate for a fixed weight. At the very least, they were
hired, hired in the sense that the shippers did not have directions, control and maintenance
thereof, which is a characteristic feature of lease.

It has been seen that public utility, even where the term is not defined by statute, is not
determined by the number of people actually served. Nor does the mere fact that service is
rendered only under contract prevent a company from being a public utility. (43 Am. Jur., 573.)
on the other hand, casual or incidental service devoid of public character and interest, it must be
admitted, is not brought within the category of public utility. The demarcation line is not
susceptible of exact description or definition, each case being governed by its peculiar
circumstances.

The transportation service which was the subject of complaint was not casual or incidental. It
had been carried on regularly for two years at almost uniform rates of charges. Although the
number of the petitioners' customers was limited, the value of goods transported was not
inconsiderable. Petitioners did not have the same customers all the time embraced in the
complaint, and there was no reason to believe that they would not accept, and there was
nothing to prevent them from accepting, new customers that might be willing to avail of their
service to the extent of their capacity. Upon the well-established facts as applied to the plain
letter of Commonwealth Act No. 146, we are of the opinion that the Public Service
Commission's order does not invade private rights of property or contract..
In at least one respect, the business complained of was a matter of public concern. The Public
Service Law was enacted not only to protect the public against unreasonable charges and poor,
inefficient service, but also to prevent ruinous competition. That, we venture to say, is the main
purpose in bringing under the jurisdiction of the Public Service Commission motor vehicles,
other means of transportation, ice plants, etc., which cater to a limited portion of the public
under private agreements. To the extent that such agreement may tent to wreck or impair the
financial stability and efficiency of public utilities who do offer service to the public in general,
they are affected with interest and come within the police power of the state to regulate.

San Pablo v. Pantranco

Facts:
On March 27,1980 PANTRANCO through its counsel wrote to Maritime Industry Authority
(MARINA) requesting authority to lease/purchase a vessel named M/V "Black Double" "to be
used for its project to operate a ferryboat service from Matnog, Sorsogon and Allen, Samar that
will provide service to company buses and freight trucks that have to cross San Bernardo Strait.
In a reply of April 29,1981 PANTRANCO was informed by MARINA that it cannot give due
course to the request. PANTRANCO nevertheless acquired the vessel MV "Black Double" on
May 27, 1981 for P3 Million pesos. It wrote the Chairman of the Board of Transportation (BOT)
through its counsel, that it proposes to operate a ferry service to carry its passenger buses and
freight trucks between Allen and Matnog in connection with its trips to Tacloban City invoking
the case of Javellana vs. Public Service Commission. PANTRANCO claims that it can operate
a ferry service in connection with its franchise for bus operation in the highway from Pasay City
to Tacloban City "for the purpose of continuing the highway, which is interrupted by a small body
of water, the said proposed ferry operation is merely a necessary and incidental service to its
main service and obligation of transporting its passengers from Pasay City to Tacloban City.
Such being the case ... there is no need ... to obtain a separate certificate for public
convenience to operate a ferry service between Allen and Matnog to cater exclusively to its
passenger buses and freight trucks. Thus on October 23, 1981 the BOT rendered its decision
holding that the ferry boat service is part of its CPC to operate from Pasay to Samar/Leyte by
amending PANTRANCO's CPC.

Issue:
Whether a ferry service is an extension of the highway and thus is a part of the authority
originally granted PANTRANCO.

Held:
Considering the environmental circumstances of the case, the conveyance of passengers,
trucks and cargo from Matnog to Allen is certainly not a ferry boat service but a coastwise or
interisland shipping service. Under no circumstance can the sea between Matnog and Allen be
considered a continuation of the highway. While a ferry boat service has been considered as a
continuation of the highway when crossing rivers or even lakes, which are small body of waters
- separating the land, however, when as in this case the two terminals, Matnog and Allen are
separated by an open sea it can not be considered as a continuation of the highway.
Respondent PANTRANCO should secure a separate CPC for the operation of an interisland or
coastwise shipping service in accordance with the provisions of law. Its CPC as a bus
transportation cannot be merely amended to include this water service under the guise that it is
a mere private ferry service.

What appears clear from the record is that at the beginning PANTRANCO planned to operate
such ferry boat service between Matnog and Alien as a common carrier so it requested authority
from MARINA to purchase the vessel M/V "Black Double in accordance with the procedure
provided for by law for such application for a certificate of public convenience. However when its
request was denied as the said routes "are adequately serviced by existing/authorized
operators, it nevertheless purchased the vessel and started operating the same. Obviously to go
about this obstacle to its operation, it then contrived a novel theory that what it proposes to
operate is a private ferryboat service across a small body of water for the exclusive use of its
buses, trucks and passengers as an incident to its franchise to convey passengers and cargo
on land from Pasay City to Tacloban so that it believes it need not secure a separate certificate
of public convenience. Based on this representation, no less than the Secretary of Justice was
led to render an affirmative opinion on October 20, 1981, followed a few days later by the
questioned decision of public respondent of October 23, 1981. Certainly the Court cannot give
its imprimatur to such a situation.

Thus the Court holds that the water transport service between Matnog and Allen is not a ferry
boat service but a coastwise or interisland shipping service.

Manzanal v. Ausejo
Facts:
The case stemmed from the affidavit of Mauro A. Ausejo, with the Complaint, Investigation and
Enforcement Office (CIEO) of the Public Service Commission narrating a hold up incident on
March 13, 1966. In this affidavit, he implicated a taxicab unit whose plate number was said to be
"6100" and which was allegedly boarded by three (3) robbers as they escaped from Roxas
Boulevard in front of the L & S Building at about 6:00 a.m. of March 13, 1966, after affiant and a
companion, Mr. Jose Caballes were accosted and held-up. On the basis of this affidavit,
respondent Commission issued a "Show-Cause Order" dated May 25, 1966 upon petitioner, to
wit:
... respondent (Petitioner Manzanal) is hereby ordered to appeal before this Commission, on
this 24th day of June, 1966, at 9:00 o'clock in the morning to show cause why her certificate of
public convenience issued under Case No. 62-4503 should not be cancelled for not rendering
safe, adequate and proper service by employing a driver with criminal tendencies, in violation of
Section 19 (a) of the Public Service Law and Section 47 of the Revised Order No. 1 of this
Commission.
On June 30, 1967, the Public Service Commissioner Enrique Medina issued an order deploring
the fact that the respondent did not file a formal answer or explanation. The Commission found
that (a) there was no motive on the part of the said witnesses for the complainant to testify
against the operator or against the driver of taxi with Plate No. 61 00; (b) the attention of the
witnesses was concentrated on the number of the registration plate and it is understandable that
they paid little or no attention at all to the colors; and (c) the conduct of the operator gave the
impression that instead of applying a strong arm against the erring driver, she has tried to
protect and shield him.

Accordingly, respondent Commission considered the charges proven since the hold-up incident
was duly established and ordered the certificate of public convenience issued in Case No.
62-4503, for five units revoked and cancelled.

Issue:
Whether or not the Respondent Commission erred in cancelling and revoking the certificate of
petitioner Manzanal on charges of failure to render safe, proper and adequate service under
Section. 19 (a) of the Public Service Act as amended and for employing a driver with criminal
record under Sec. 47 of the Revised Order No. 1, as there was absolutely no evidence whatever
presented to prove such charges.

Held:
Section 19 (a) of the Public Service Act contemplates of failure to provide a service that is safe,
proper or adequate and refusal to render any service which can reasonably be demanded and
furnished. It refers specifically to the operator's inability to provide reliable vehicles to transport
the riding public to their places of destination and to the failure to provide an adequate number
of units authorized under his franchise at all times to secure the public of sustained service. The
facts of the case are bereft and wanting of any evidence to the effect that petitioner rendered a
service that is unsafe, inadequate and improper. There was no testimony whatsoever that her
vehicles are of such kind which may endanger the lives of the passengers or are not suitable for
the peculiar characteristics of the area serviced. There is no proof that petitioner is not in a
position to cope with the obligations and responsibilities of the service and to maintain a
complete number of units as authorized. While we agree with respondent Commission that said
provision does not necessarily require a "passenger-operator" relationship, We disagree that a
single hold-up incident which does not clearly link petition's taxicab can be comprehended within
its meaning.

Section 47 of the Revised Order No. 1, on the other hand, refers to the kind of persons an
operator must keep under his employ, namely: courteous, of good moral character and no
record of criminal conviction. There is no proof that she has hired a driver with criminal record or
bad moral character or has kept under her employ, such driver despite knowledge about his
moral behavior, discourteous conduct or criminal record. Besides, the show cause order merely
speaks of employing a driver with "criminal tendencies" while Section 47 is couched in
unmistakable mandatory terms; it forbids the employment of persons "convicted" of offenses
enumerated therein. Finally, under Section 16 (n) of the Public Service Act, the power of the
Commission to suspend or revoke any certificate received under the provisions of the Act may
only be exercised whenever the holder thereof has violated or willfully and contumaciously
refused to comply with any order, rule or regulation of the Commission or any provision of the
Act. In the absence of showing that there is willful and contumacious violation on the part of
petitioner, no certificate of public convenience may be validly revoked. In the case at bar, it has
been duly established that the driver of the taxicab, Felicisimo M. Valdez, was always present
during the initial hearings of this case before his death on September 18, 1966. This fact is
indicative of his willingness to take the witness stand but death sealed his lips. For her part,
petitioner explained that she did not testify because she was candid enough not to pretend to
know the exact whereabouts of her taxi at the fateful time. Hence, the conclusion of respondent
Commission that she tried to protect or shield her driver by her refusal to refute or deny the
claim of respondent Ausejo and Mr. Caballes is not warranted by the facts of the case.

ACCORDINGLY, the instant petition for review is hereby GRANTED and the decision of
respondent Public Service Commission (now Land Transportation Franchising and Regulatory
Board [LTFRB]) dated June 30, 1967 cancelling and revoking the certificate of public
convenience of petitioner to operate a taxicab service in Manila for five (5) units under Case No.
62-4503 as well as the order denying the motion for reconsideration are hereby REVERSED
and SET ASIDE.

Cogeo-Cubao Operator’s and Driver’s Association v. CA

Facts:
It appears that a certificate of public convenience to operate a jeepney service was ordered to
be issued in favor of Lungsod Silangan to ply the Cogeo-Cubao route sometime in 1983 on the
justification that public necessity and convenience will best be served, and in the absence of
existing authorized operators on the lined apply for . . . On the other hand,
defendant-Association was registered as a non-stock, non-profit organization with the Securities
and Exchange Commission on October 30, 1985 . . . with the main purpose of representing
plaintiff-appellee for whatever contract and/or agreement it will have regarding the ownership of
units, and the like, of the members of the Association . . .

Perturbed by plaintiffs' Board Resolution No. 9 . . . adopting a Bandera' System under which a
member of the cooperative is permitted to queue for passenger at the disputed pathway in
exchange for the ticket worth twenty pesos, the proceeds of which shall be utilized for Christmas
programs of the drivers and other benefits, and on the strength of defendants' registration as a
collective body with the Securities and Exchange Commission, defendants-appellants, led by
Romeo Oliva decided to form a human barricade on November 11, 1985 and assumed the
dispatching of passenger jeepneys . . . This development as initiated by defendants-appellants
gave rise to the suit for damages.
Defendant-Association's Answer contained vehement denials to the insinuation of take over and
at the same time raised as a defense the circumstance that the organization was formed not to
compete with plaintiff-cooperative. It, however, admitted that it is not authorized to transport
passengers .

On July 31, 1989, the trial court rendered a decision in favor of respondent Lungsod Corp.

On May 27, 1991, respondent appellate court rendered its decision affirming the findings of the
trial court except with regard to the award of actual damages in the amount of P50,000.00 and
attorney's fees in the amount of P10,000.00

Issue:
Whether or not the petitioner usurped the property right of the respondent which shall entitle the
latter to the award of nominal damages.

Held:
In the instant case, a certificate of public convenience was issued to respondent corporation on
January 24, 1983 to operate a public utility jeepney service on the Cogeo-Cubao route.

A certification of public convenience is included in the term "property" in the broad sense of the
term. Under the Public Service Law, a certificate of public convenience can be sold by the
holder thereof because it has considerable material value and is considered as valuable asset
(Raymundo v. Luneta Motor Co., et al., 58 Phil. 889). Although there is no doubt that it is private
property, it is affected with a public interest and must be submitted to the control of the
government for the common good (Pangasinan Transportation Co. v. PSC, 70 Phil 221). Hence,
insofar as the interest of the State is involved, a certificate of public convenience does not
confer upon the holder any proprietary right or interest or franchise in the route covered thereby
and in the public highways (Lugue v. Villegas, L-22545, Nov . 28, 1969, 30 SCRA 409).
However, with respect to other persons and other public utilities, a certificate of public
convenience as property, which represents the right and authority to operate its facilities for
public service, cannot be taken or interfered with without due process of law. Appropriate
actions may be maintained in courts by the holder of the certificate against those who have not
been authorized to operate in competition with the former and those who invade the rights which
the former has pursuant to the authority granted by the Public Service Commission (A.L.
Ammen Transportation Co. v. Golingco. 43 Phil. 280).

In the case at bar, the trial court found that petitioner association forcibly took over the operation
of the jeepney service in the Cogeo-Cubao route without any authorization from the Public
Service Commission and in violation of the right of respondent corporation to operate its
services in the said route under its certificate of public convenience.

These were its findings which were affirmed by the appellate court:
The Court from the testimony of plaintiff's witnesses as well as the documentary evidences
presented is convinced that the actions taken by defendant herein though it admit that it did not
have the authority to transport passenger did in fact assume the role as a common carrier
engaged in the transport of passengers within that span of ten days beginning November 11,
1985 when it unilaterally took upon itself the operation and dispatching of jeepneys at St. Mary's
St. The president of the defendant corporation.

The findings of the trial court especially if affirmed by the appellate court bear great weight and
will not be disturbed on appeal before this Court.

KMU Labor Center v. Garcia

Facts:
On June 26, 1990 Secretary of DOTC issued Memorandum Circular No. 90-395 to LTFRB
Chairman 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.

Fernando respectfully called attention of DOTC Sec. that the Public Service Act requires
publication and notice to concerned parties and public hearing.

In Dec. 1990, Provincial Bus Operators Assoc. of the Phils. (PBOAP) filed an application for
across the board fare rate increase, which was granted by LTFRB. 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.
LTFRB issued one of the assailed orders dismissing the petition for lack of merit.

Issue:
Whether or not administrative issuances and orders of the LTFRB and DOT giving public utilities
the power to determine rate fare is valid and constitutional

Held:
No.
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. With this authority, an administrative body and in this
case, the LTFRB, may implement broad policies laid down in a statute by “filling in” the details
which the Legislature may neither have time or competence to provide. However, nowhere
under the aforesaid provisions of law are the regulatory bodies, the PSC and LTFRB alike,
authorized to delegate that power to a common carrier, a transport operator, or other public
service.

In the case at bench, the authority given by the LTFRB to the provincial bus operators to set a
fare range over and above the authorized existing fare, is illegal and invalid as it is tantamount
to an undue delegation of legislative authority. Potestas delegata non delegari potest. What has
been delegated cannot be delegated. This doctrine is based on the ethical principle that such a
delegated power constitutes not only a right but a duty to be performed by the delegate through
the instrumentality of his own judgment and not through the intervening mind of another. A
further delegation of such power would indeed constitute a negation of the duty in violation of
the trust reposed in the delegate mandated to discharge it directly. The policy of allowing the
provincial bus operators to change and increase 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.

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.

PAL v. CAB
Facts:
On November 24, 1994, private respondent GrandAir applied for a Certificate of Public
Convenience and Necessity with the Board, which application was docketed as CAB Case No.
EP-12711.4 Accordingly, the Chief Hearing Officer of the CAB issued a Notice of Hearing
setting the application for initial hearing on December 16, 1994, and directing GrandAir to serve
a copy of the application and corresponding notice to all scheduled Philippine Domestic
operators. On December 14, 1994, GrandAir filed its Compliance, and requested for the
issuance of a Temporary Operating Permit. Petitioner, itself the holder of a legislative franchise
to operate air transport services, filed an Opposition to the application for a Certificate of Public
Convenience and Necessity on December 16, 1995

At the initial hearing for the application, petitioner raised the issue of lack of jurisdiction of the
Board to hear the application because GrandAir did not possess a legislative franchise.

On December 20, 1994, the Chief Hearing Officer of CAB issued an Order denying petitioner's
Opposition.

On December 23, 1994, the Board promulgated Resolution No. 119(92) approving the issuance
of a Temporary Operating Permit in favor of Grand Air for a period of three months, i.e., from
December 22, 1994 to March 22, 1994. Petitioner moved for the reconsideration of the issuance
of the Temporary Operating Permit on January 11, 1995, but the same was denied in CAB
Resolution No. 02 (95) on February 2, 1995.

Issue:
Whether or not the Civil Aeronautics Board can issue the Certificate of Public Convenience and
Necessity or Temporary Operating Permit to a prospective domestic air transport operator who
does not possess a legislative franchise to operate as such.

Held:
The power to authorize and control the operation of a public utility is admittedly a prerogative of
the legislature, since Congress is that branch of government vested with plenary powers of
legislation. The trend of modern legislation is to vest the Public Service Commissioner with the
power to regulate and control the operation of public services under reasonable rules and
regulations, and as a general rule, courts will not interfere with the exercise of that discretion
when it is just and reasonable and founded upon a legal right.

Given the foregoing postulates, we find that the Civil Aeronautics Board has the authority to
issue a Certificate of Public Convenience and Necessity, or Temporary Operating Permit to a
domestic air transport operator, who, though not possessing a legislative franchise, meets all
the other requirements prescribed by the law. Such requirements were enumerated in Section
21 of R.A. 776.

There is nothing in the law nor in the Constitution, which indicates that a legislative franchise is
an indispensable requirement for an entity to operate as a domestic air transport operator.
Although Section 11 of Article XII recognizes Congress' control over any franchise, certificate or
authority to operate a public utility, it does not mean Congress has exclusive authority to issue
the same. Franchises issued by Congress are not required before each and every public utility
may operate. In many instances, Congress has seen it fit to delegate this function to
government agencies, specialized particularly in their respective areas of public service. The
use of the word "necessity", in conjunction with "public convenience" in a certificate of
authorization to a public service entity to operate, does not in any way modify the nature of such
certification, or the requirements for the issuance of the same. It is the law which determines the
requisites for the issuance of such certification, and not the title indicating the certificate.

Congress, by giving the respondent Board the power to issue permits for the operation of
domestic transport services, has delegated to the said body the authority to determine the
capability and competence of a prospective domestic air transport operator to engage in such
venture. This is not an instance of transforming the respondent Board into a mini-legislative
body, with unbridled authority to choose who should be given authority to operate domestic air
transport services. In sum, respondent Board should now be allowed to continue hearing the
application of GrandAir for the issuance of a Certificate of Public Convenience and Necessity,
there being no legal obstacle to the exercise of its jurisdiction.