Raymundo vs Luneta Motor 58 Phil 889

F: Nicanor de Guzman signing as Guzco Transit purchased trucks from

Luneta Motor and executed PNs guaranteed by a chattel mortgage on
several trucks. Failing to pay the PNs, a suit for collection was filed. A writ
of attachment was issued and garnishment was served on the PSC
attaching the right, title, and participation of Guzco Transit in the CPC
covering the bus transportation lines between Manila and Rizal. The CFI
ordered the selling of these certificates in a public bidding in which Luneta
Motor was the highest bidder. Nine days after the certificates were
attached, these were sold to Raymundo (including certificate No. 25951
which was not included in the sale to Luneta Motor Co.). The approval of
the sale was sought from the PSC. The PSC approved the sale in the public
bidding and disapproved the sale to Raymundo except with respect to
Certificate No. 25951 which Raymundo could apply for its approval.
Issue : Which of the two sales should prevail? public auction by virtue of an
attachment vs voluntary sale Held : Sale to Luneta Motor Co. in a public
auction The Public Service Law authorizes certificates of public
convenience to be secured by public service operators from the PSC. A
CPC grants a right in the nature of a limited franchise. The Code of Civil
Procedure does not exclude franchises or certificates from the word
"property." The test by which to determine WON a 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. The Public Service Law permits the PSC to approve the sale,
alienation, mortgaging, encumbering or leasing of property, franchises,
privileges, or rights or any part thereof. If the holder of a certificate can
voluntary sell it, there is no reason why the same cannot be sold
involuntarily pursuant to court process. CPCs have considerable material
value. They are valuable assets. They are subject to being sold for
consideration as much as any other property. They are even more valuable
than ordinary properties, taking into consideration 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.
Though intangible, they are of value and are considered properties which
can be seized through legal process..

Batangas Transportation Co. vs Orlanes 52 Phil 455

F: Orlanes sought to have a CPC to operate a line of auto trucks with fixed
times of departure between Taal and Bantilan, with the right to receive
passengers and freight from intermediate points.
The evidence is
conclusive that at the time of his application, Orlanes was an irregular
operator between Bantilan and Taal, and that BTC was a regular operator
between Batangas and Rosario. Orlanes sought to have his irregular
operation changed into a regular operation, and to set aside and nullify the
prohibition against him in his CPC that he shall not have or receive any
passengers or freight at any of the points served by the BTC which holds a
prior license from the PSC. His petition is based on the fact that to comply
with the growing demands of the public, the BTC applied for a permit to
increase the no. of trip hours at and between the same places and for an
order that all irregular operators be prohibited from operating unless they
should observe an interval of 2 hours before or one hour after the regular
hours of the BTC. The PSC granted the petition of Orlanes.
Issue : WON a CPC should be issued to a second operator in a field where,
and in competition with, a first operator who is already operating a
sufficient, adequate and satisfactory service.
Held : NO. Decision of PSC is revoked. An autobus line is a public utility,
and as such, is a common carrier and an impt. factor in the business affairs
of the community. The PSC has the power to specify and define the terms
and conditions upon which any public utility shall operate and to make
reasonable rules and regulations for its operation, and to fix the
compensation that it shall receive for its service to the public, and for good
cause may suspend or even revoke a license granted. It is not the policy of
the law for the PSC to issue a CPC to a second operator to cover the same
field and in competition with a first operator who is rendering sufficient,
adequate and satisfactory service, and who in all things and respects is
complying with the rules and regulations of the PSC. The power of the PSC
to issue a CPC is founded on the condition precedent that after a full
hearing and investigation, it shall find as a fact that the proposed operation
is for the convenience of the public. So long as the first operator keeps and
performs his terms and conditions of its license and complies with the
reasonable demands of the public, it has more or less of a vested and
preferential right over another who seeks to acquire a later license to
operate over the same route. To carry out the purpose and intent for which
the PSC was created, the law contemplates that the first license will be
protected in his investment and will not be subjected to ruinous
competition. The primary purpose of the PSC is to secure adequate,

sustained service for the public at the least possible cost and to protect
and conserve investments which have already been made for that
purpose. A CPCN for the operation of an auto truck line in occupied
territory should not be granted where there is no complaint as to existing
rates and the co. in the field is rendering adequate service. It is the duty
of the PSC to protect rather than to destroy the investment of a public
utility. The policy of regulation upon which the 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
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 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 a minimum cost.

San Pablo vs Pantranco South Express, Inc. 153 SCRA 199

F: Pantranco operates passenger buses from Metro Manila to Bicol and
Eastern Samar.
It wrote to the Maritime Industry Authority (MARINA)
requesting authority to lease/purchase MV Black Double to be used in
operating a ferryboat service from Matnog, Sorsogon and Allen, Samar that
will provide service to co. buses and freight trucks that have to cross the
Bernardo Strait. MARINA denied the petition on the ground that the
Matnog- Allen run is adequately serviced by the Cardinal Shipping Corp.
and Epitacio San Pablo and that market conditions cannot support the
entry of additional tonnage. Pantranco acquired the vessel. It then applied
to BOT claiming 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, and that the proposed ferry operation is merely a necessary
and incidental service to its main service and obligation of transferring
passengers from Pasay City to Tacloban City. Accdg. to it, there is no need
to obtain a separate CPC to operate a ferry service to cater exclusively to
its passenger buses and ferry trucks. Pantranco began operating its ferry
service. The BOT held that the ferryboat service is part of Pantranco's CPC
and amended Pantranco's CPC to provide so. The two other ferry boat
services filed motions for reconsideration.
Issue : WON the sea can be considered as a continuation of the highway.
WON a land transpo co. can be authorized to operate a ferry service or
coastwise or interisland shipping service along its authorized route as an
incident to its franchise without the need of filing a separate application for
the same. Held : The water transport service between Matnog and Allen is
not a ferryboat service but a coastwise or interisland shipping service.
Before private respondent may be issued a franchise or CPC for the
operation of the said service as a common carrier, it must comply with the
usual reqts. of filing an application, payment of the fees, publication,
adducing evidence at a hearing and affording the oppositors the
opportunity to be heard. Considering the environmental circumstances of

the case, the conveyance of passengers from Matnog to Allen is not a

ferryboat service but a coastwise or interisland shipping service. Under no
circumstances can the sea between Matnog and Allen be considered a
continuation of the highway.
While a ferryboat 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 are separated by an open sea, it cannot
be considered a continuation of the highway. Pantranco must secure a
separate CPC for the operation of an interisland or coastwise shipping
service. Its CPC cannot be merely amended to include this water service
under the guise that it is a mere private ferry service. Pantranco does not
deny that it charges its passengers separately from the charges for the bus
trips and issues separate tickets whenever they board the MV Black
Double. It cannot pretend that it issued tickets as a private carrier and not
as a common carrier. It in fact accepts walk in passengers during the trips.
It cannot claim that it is both a private carrier and a common carrier at the
same time.
In the case of Javellana vs PSC, the Court differentiated between ferry
service and interisland or coastwide service. Ferry means service either by
barges or rafts, even by motor or steam vessels, between the banks of a
river or stream to continue the highway which is interrupted by a body of
water, or in some cases, to connect two points on opposite shores of an
arm of the sea such as a bay or lake which does not involve too great a
distance or too long a time to navigate. But where the line or service
involves crossing a body of water which is wide and dangerous with big
waves, then such line or service belongs properly to interisland or
coastwide trade. 3. Private nature: rights and obligations of parties inter
se arising from transactions relating to transportation
(a) absent a transportation
contract
(b) arising from a
transportation contract
(i) contract of transportation, defined - one whereby a certain person or
association of persons obligate themselves to transport persons, things or
news from one place to another for a fixed price
(ii) contract of
transportation, elements

subject to attachment and seizure by legal process, and may be acquired

by purchase.
Determination of WON an issuance of a certificate is for public convenience
- (1) financial responsibility of the applicant, (2) reliability of the applicant,
(3) priority of filing the application for a certificate, and (4) priority of
operation

(b) The Certificate of Public Convenience (CPC), the Certificate of Public

Convenience and Necessity (CPCN), and the Prior Operator Rule
Difference between CPC and CPCN : A CPCN is issued by the PSC to a
public service to which any political subdivision has granted a franchise
under Act 667 after the PSC has approved the same under Section 16(b). A
CPC is any authorization to operate a public service issued by the PSC. A
CPC is an authorization issued by the Commission for the operation of
public services for which no franchise, either municipal or legislative, is
required by law (e.g. auto-trucks and motor vehicles). A CPCN is an
authorization issued by the PSC for the operation of public services for
which a franchise is required by law (e.g. electric, telephone services).
Nature of certificate : It constitutes neither a franchise nor a contract,
confers no property rights and is a mere license or privilege, and such
privilege is forfeited when the grantee fails to comply with his
commitments behind which lies the paramount interest of the public, for
public necessity cannot be made to wait, nor sacrificed for private
convenience. However, certificates represent property rights to the extent
that if the rights which any public utility is exercising pursuant to lawful
orders of the PSC has been invaded by another public utility, in appropriate
cases actions may be maintained by the complainant public utility. Owners
of public utilities have the right to maintain appropriate actions against
other public utilities not authorized to operate in competition with the
complainant. Certificates are considered as property as used in Civil
Procedure as they have material value and are material assets. They are

Prior operator rule - to carry out the purpose and intent for which the PSC
was created the law contemplates that the first licensee will be protected
in his investment and will not be subjected to a ruinous competition. It is
not therefore the policy of the law for the PSC to issue a CPC to a second
operator to cover the same field and in competition with a first operator
who is rendering sufficient, adequate and satisfactory service, and who in
all things and respects is complying with the rules and regulations of the
PSC. Accordingly, a CPC or CPCN ought not to be granted where there is
no complaint as to existing rates and the co. in the field is rendering
adequate services. - regular operators are preferred over irregular
operators
- prior operator is given opportunity to improve service
- prior operator given opportunity to extend lines
- basis of rule : to prevent ruinous and wasteful competition in order that
the interests of the public would be conserved and preserved; so long as
the operator complied with the terms and conditions of the license and the
reasonable demands of the public, it is the duty of the PSC to protect
rather than to destroy its investment