Case No.
1: Kilusang Mayo Uno Labor Center vs. Jesus Garcia, GR 115381, 23 December
1994
Doctrine:
Common Carriers; When 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.
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.
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.
Facts:
The case is about the petition for certiorari assailing the constitutionality of certain memoranda, circulars and/or
orders of the Department of Transportation and Communications and the Land Transportation Franchising and
Regulatory Board.
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.
On March 24, 1994, the LTFRB issued one of the assailed orders dismissing the petition for lack of merit.
Hence, the instant petition for certiorari with an urgent prayer for issuance of a temporary restraining order.
Issue/s:
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
Ruling:
No. 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.
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.
Dispositive Portion:
WHEREFORE, the instant petition is hereby GRANTED
No pronouncement as to costs.
SO ORDERED.
Philippine Airlines vs. Civil Aviation Board, GR 119528, 26 March 1997
Doctrine:
The Civil Aeronautics Board is expressly authorized by Republic Act No. 776 to issue a
temporary operating permit or Certificate of Public Convenience and Necessity, and nothing
contained in the said law negates the power to issue said permit before the completion of the
applicant’s evidence and that of the oppositor thereto on the main petition.
Facts:
Philippine Airlines seeks to prohibit Civil Aeronautics Board from exercising jurisdiction over
private respondents Application for the issuance of a Certificate of Public Convenience and
Necessity, and to annul and set aside a temporary operating permit issued by the Civil
Aeronautics Board in favor of GrandAir, allowing the same to engage in scheduled domestic air
transportation services, particularly the Manila-Cebu, Manila-Davao, and converse routes. PAL
contested the grant issued by CAB to GrandAir as the latter does not possess a legislative
franchise authorizing it to engage in air transportation service within the Philippines or
elsewhere.
Such franchise is, allegedly, a requisite for the issuance of a Certificate of Public Convenience or
Necessity by the respondent Board, as mandated under Section 11, Article XII of the
Constitution. GrandAir, on the other hand, posits that a legislative franchise is no longer a
requirement for the issuance of a Certificate of Public Convenience and Necessity or a
Temporary Operating Permit, following the Courts pronouncements in the case of Albano vs.
Reyes GrandAir applied for a Certificate of Public Convenience and Necessity with CAB, which
the Chief Hearing Officer of the CAB issued a Notice of Hearing setting the application for
initial hearing. 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 because, accordingly, CAB has no jurisdiction to hear the petitioners application until
GrandAir has first obtained a franchise to operate from Congress. Chief Hearing Officer of CAB
issued an Order denying petitioners Opposition.
The Board promulgated Resolution approving the issuance of a Temporary Operating Permit in
favor of Grand Air for a period of three months, which was later, extended to six months.
Issue: Whether the respondent has the power to issue a temporary operating permit.
Held:
The Civil Aeronautics Board has jurisdiction over Grand Air’s application for a Temporary
Operating Permit. The Board is expressly authorized by Republic Act No. 776 to issue a
temporary operating permit or Certificate of Public Convenience and Necessity, and nothing
contained in the said law negates the power to issue said permit before the completion of the
applicants evidence and that of the oppositor thereto on the main petition.
The CAB’s authority to grant a temporary permit upon its own initiative strongly suggests the
power to exercise said authority, even before the presentation of said evidence has begun. Even
if a legislative franchise is prerequisite to the issuance of a permit, the absence of the same does
not affect the jurisdiction of the Board to hear the application, but tolls only upon the ultimate
issuance of the requested permit.
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.
Dispositive Portion:
ACCORDINGLY, in view of the foregoing considerations, the Court RESOLVED to DISMISS
the instant petition for lack of merit. The respondent Civil Aeronautics Board is hereby
DIRECTED to CONTINUE hearing the application of respondent Grand International Airways,
Inc. for the issuance of a Certificate of Public Convenience and Necessity.
SO ORDERED.
Rodolfo Albano vs. Raniero Reyes, GR 83551, 11 July 1989
Doctrine:
A legislative franchise is not necessary for the operation of the Manila International Container
Port (MICP)
A review of the applicable provisions of law indicates that a franchise specially granted by
Congress is not necessary for the operation of the Manila International Container Port (MICP) by
private entity, a contract entered into by the PPA and such entity constituting substantial
compliance with the law.
The law granted certain administrative agencies the power to grant licenses for the operation of
public utilities. Theory that MICT is a “wharf” or a “dock”, as contemplated under the Public
Service Act, would not necessarily call for a franchise from the Legislative Branch.
Facts:
This is a Petition for Prohibition with prayer for Preliminary Injunction or Restraining Order
seeking to restrain the respondents Philippine Ports Authority (PPA) and the Secretary of the
Department of Transportation and Communications Rainerio O. Reyes from awarding to the
International Container Terminal Services, Inc. (ICTSI) the contract for the development,
management and operation of the Manila International Container Terminal (MICT). PPA Board
adopted Resolution No. 850 directing PPA management to prepare the Invitation to Bid and all
other docs for the public bidding etc of the MICT at the Port of Manila, and authorizing the
Board Chairman, Sec. Rainerio O. Reyes, to oversee the preparation of the requirements for the
MICT leasing Sec. Reyes created a Special MICT Bidding Committee charged with evaluation
and recommendation to the Board of all bid proposals and the best bid, and to prepare the
contract between the PPA and the winning bidder 7 consortia of companies submitted bids After
evaluation, the Bidding committee recommended the award of the contract to International
Container Terminal Services, Inc. (Int’l Container) Eventually, President Aquino approved the
proposed MICT Contract, with directives that "the responsibility for planning, detailed
engineering, construction, expansion, rehabilitation and capital dredging of the port, as well as
the determination of how the revenues of the port system shall be allocated for future port works,
shall remain with the PPA; and the contractor shall not collect taxes and duties except that in the
case of wharfage or tonnage dues and harbor and berthing fees, payment to the Government may
be made through the contractor who shall issue provisional receipts and turn over the payments
to the Government which will issue the official receipts." The next day, PPA and Int’l Container
perfected the contract and incorporated the above directives.
The petitioner, Rodolfo A. Albano filed the present petition as citizen and taxpayer and as a
member of the House of Representatives, assailing the award of the MICT contract to the Int’l
Container by the PPA. The petitioner claims that since the MICT is a public utility, it needs a
legislative franchise before it can legally operate as a public utility, pursuant to Article 12,
Section 11 of the 1987 Constitution.
Issue:
Whether or not the MICT needs a legislative franchise before it can legally operate as a public
utility.
Held:
NO. A review of the applicable provisions of law indicates that a franchise specially granted by
Congress is not necessary for the operation of the Manila International Container Port (MICP) by
a private entity, a contract entered into by the PPA and such entity constituting substantial
compliance with the law.
Even if the MICT is considered a public utility, its operation would not necessarily need a
franchise from the legislature because the law has granted certain administrative agencies the
power to grant licenses for or to authorize the operation of public utilities. Reading E.O. 30 and
P.D. 857 together, it is clear that the lawmaker has empowered the PPA to undertake by itself the
operation and management of the MICP or to authorize its operation and management by another
by contract or other means, at its option.
The law granted certain administrative agencies the power to grant licenses for the operation of
public utilities; Theory that MICP is a “wharf” or a “dock”, not necessarily calls for a franchise
from Legislative Branch. Even if the MICP be considered a public utility, or a public service on
the theory that it is a “wharf” or a “dock” as contemplated under the Public Service Act, its
operation would not necessarily call for a franchise from the Legislative Branch. Franchises
issued by Congress are not required before each and every public utility may operate. Thus, the
law has granted certain administrative agencies the power to grant licenses for or to authorize the
operation of certain public utilities.
The lawmaker has empowered the PPA to undertake by itself the operation of MICP or to
authorize its operation by another by contract or other means. As stated in E.O. No. 30 has
tasked the PPA with the operation and management of the MICP, in accordance with P.D. 857
and other applicable laws and regulations. However, P.D. 857 itself authorizes the PPA to
perform the service by itself, by contracting it out, or through other means. Reading E.O. No. 30
and P.D. No.857 together, the inescapable conclusion is that the lawmaker has empowered the
PPA to undertake by itself the operation and management of the MICP or to authorize its
operation and management by another by contract or other means, at its option. The latter power
having been delegated to the PPA, a franchise from Congress to authorize an entity other than
the PPA to operate and manage the MICP becomes unnecessary.
Dispositive portion:
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Baldomero Luque, et al. vs. Hon. Antonio Villegas, et al., GR L-22545, 28 November 1969
Doctrine:
Certificate of Public Convenience confers no vested right to operate public utility vehicles in the
route covered thereby. A certificate of public convenience constitutes neither a franchise nor a
contract, confers no property right, and is a mere license or privilege. 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 or franchise in the public highways. Revocation of
this certificate deprives him of no vested right. New and additional burdens, alteration of the
certificate, and even revocation or annulment thereof is reserved to the State.
FACTS:
The 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.
They assailed the validity of Ordinance 4986 and A.O. No. 1. Under Ordinance 4986, PUB and
PUJs shall be allowed to enter Manila only from 6:30am to 8:30pm every day except Sundays
and holidays. Meanwhile, A.O. No. 1 issued by Commissioner of Public Service states that all
jeeps authorized to operate from Manila to any point in Luzon, beyond the perimeter of Greater
Manila, shall carry the words "For Provincial Operation". Commissioner issued A.O. No. 3
which resolved motions for reconsideration (of A.O. 1) filed by several affected operators.
This order (No. 3) 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.
Petitioners contend that since they possess a valid Certficiate of Piublic Convenience (CPC),
they have already acquired a vested right to operate. Moreover, Ordinance 4986 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.
ISSUES:
1. Whether or not the said regulations are valid.
2. Whether or not Ordinance 4986 destroys vested rights to operate in Manila.
HELD:
1. YES. Using the doctrine in Lagman vs. City of Manila, Petitioner's Certificate of Public
Convenience was issued subject to the condition that operators shall observe and comply
with all the rules and regulations of the PSC relative to PUB service. The purpose of the ban
is to minimize the problem in Manila and the traffic congestion, delays and accidents
resulting from the free entry into the streets of Manila and the operation around said streets.
Both Ordinance 4986 and AO 1 fit into the concept of promotion and regulation of general
welfare.
3. NO. 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. As far as the State is concerned, a
CPC constitutes neither a franchise nor a contract, confers no property right, and is a mere
license or privilege. The holder does not acquire a property right in the route covered, nor
does it confer upon the holder any proprietary right/interest/franchise in the public highways.
Neither do bus passengers have a vested right to be transported directly to Manila. The
alleged right is dependent upon the manner public services are allowed to operate within a
given area. It is no argument that the passengers enjoyed the privilege of having been
continuously transported even before outbreak of war. Times have changed and vehicles
have increased. Traffic congestion has moved from worse to critical. Hence, there is a need
to regulate the operation of public services.
Dispositive portion:
FOR THE REASONS GIVEN, the petition herein is denied.
Costs against petitioners, So ordered.
F.C. Fisher vs. Yangco Steamship Co., et al., GR L-8095, 31 March 1915
Doctrine:
Whatever may have been the rule at common law, common carriers in this jurisdiction cannot
lawfully decline to accept a particular class of goods for carriage to the prejudice of the traffic in
those goods unless it appears that for some sufficient reason the discrimination against the traffic
in such goods is reasonable and necessary. Mere prejudice or whim will not suffice. The grounds
of the discrimination must be substantial ones, such as will justify the courts in holding the
discrimination to have been reasonable and necessary under all the circumstances of the case.
FACTS:
The plaintiff is a stockholder in the Yangco Steamship Company, the owner of a large number of
steam vessels, duly licensed to engage in the coastwise trade of the Philippine Islands the
directors of the company adopted a "expressly declaring and providing that the classes of
merchandise to be carried by the company in its business as a common carrier do not include
dynamite, powder or other explosives, and expressly prohibiting the officers, agents and servants
of the company from offering to carry, accepting for carriage or carrying said dynamite, powder
or other explosives”
Respondent Acting Collector of Customs demanded and required of the company the acceptance
and carriage of such explosives; also, he has refused and suspended the issuance of the necessary
clearance documents of the vessels of the company unless and until the company consents to
accept such explosives for carriage;
The plaintiff is advised and believes that should the company decline to accept such explosives
for carriage, the respondent Attorney-General of the Philippine Islands and the respondent
prosecuting attorney of the city of Manila intend to institute proceedings against the company, its
managers, agents and servants, to enforce the requirements of the Acting-Collector of Customs
as to the acceptance of such explosives for carriage.
As a consequence, the manager, agents and servants of the company decline and refuse to cease
the carriage of such explosives.
This case was filed by plaintiff to enjoin the steamship company from accepting for carriage on
any of its vessels, dynamite, powder or other explosives, under any conditions whatsoever; to
prohibit the Collector of Customs and the prosecuting officers of the government from all
attempts to compel the company to accept such explosives for carriage on any of its vessels
under any conditions whatsoever; and to prohibit these officials from any attempt to invoke the
penal provisions of Act No. 98, in any case of a refusal by the company or its officers so to do.
Main of argument of petitioner is that a common carrier in the Philippine Islands may decline to
accept for carriage any shipment of merchandise of a class which it expressly or impliedly
declines to accept from all shippers alike, because, as he contends "the duty of a common carrier
to carry for all who offer arises from the public profession he has made, and is limited by it." As
such, petitioner argued, the prohibition imposed on Yangco is a prohibition on its liberty by
requiring it to engage in business against its will.
ISSUE:
Whether the refusal of the owners and officers of a steam vessel to accept for carriage
“dynamite, powder or other explosives” is a valid act.
RULING:
No. The traffic in dynamite gun powder and other explosive is vitally essential to the material
and general welfare of the inhabitants of this islands and it these products are to continue in
general use throughout the Philippines they must be transported from water to port to port in
various island which make up the Archipelago.
It follows that a refusal by a particular vessel engage as a common carrier of merchandise in
coastwise trade in the Philippine Island to accept such explosives for carriage constitutes a
violation. The prohibition against discrimination penalized under the statute, unless it can be
shown that there is so Real and substantial danger of disaster necessarily involved in the courage
of any or all of this article of merchandise as to render such refusal a due or unnecessary or a
reasonable exercise or prudence and discretion on the part of the ship owner.
Furthermore, Common carriers in this jurisdiction cannot lawfully decline to accept a particular
class of goods for carriage to the prejudice of the traffic in those goods unless it appears that for
some sufficient reason the discrimination against the traffic in such goods is reasonable and
necessary. Mere prejudice or whim will not suffice. The grounds of the discrimination must be
substantial ones, such as will justify the courts in holding the discrimination to have been
reasonable and necessary under all the circumstances of the case. - The nature of the business of
a common carrier as a public employment is such that it is clearly within the power of the state to
impose such just and reasonable regulations thereon in the interest of the public as the legislator
may deem proper. Of course such regulations must not have the effect of depriving an owner of
his property without due course of law, nor of confiscating or appropriating private property
without just compensation, nor of limiting or prescribing irrevocably vested rights or privileges
lawfully acquired under a charter or franchise. But aside from such constitutional limitations, the
determination of the nature and extent of the regulations which should be prescribed rests in the
hands of the legislator.
Correctly construed, the provisions of the Philippine statute (Act No. 98) do not force a common
carrier to engage in any business against his will or to make use of his facilities in a manner or
for a purpose for which they are not reasonably adapted. It is only when he offers his facilities as
a common carrier to the public for hire, that the statute steps in and prescribes that he must treat
all alike, that he may not pick and choose which customer he will serve, and, specifically, that he
shall not make any undue or unreasonable preferences or discriminations whatsoever to the
prejudice not only of any person or locality, but also of any particular kind of traffic. The refusal
of a "steamship company, the owner of a large number of vessels" engaged in the coastwise trade
of the Philippine Islands as a common carrier of merchandise, to accept explosives for carriage
on any of its vessels subjects the traffic in such explosives to a manifest prejudice and
discrimination. -This of course is, in each case, a question of fact, and we are of opinion that the
facts alleged in the complaint are not sufficient to sustain a finding in favor of the contentions of
the petitioner. It is not alleged in the complaint that "dynamite, gunpowder and other explosives"
can in no event be transported with reasonable safety on board steam vessels engaged in the
business of common carriers.
It is not alleged that all, or indeed any of the defendant steamship company's vessels are unsuited
for the carriage of such explosives. It is not alleged that the nature of the business in which the
steamship company is engaged is such. as to preclude a finding that a refusal to accept such
explosives on any of its vessels would subject the traffic in such explosives to an undue and
unreasonable prejudice and discrimination. The mere fact that violent and destructive explosions
can be obtained by the use of dynamite under certain conditions is not sufficient in itself to
justify the refusal of a vessel, duly licensed as a common carrier of merchandise, to accept it for
carriage, if it can be proven that in the condition in which it is offered for carriage there is no real
danger to the carrier nor reasonable ground to fear that his vessel or those on board his vessel
will be exposed to unnecessary or unreasonable risks in transporting it, having in mind the nature
of his business as a common carrier engaged in the coastwise trade in the Philippine Islands, and
his duty as a servant of the public engaged in a public employment. If by the exercise of due
diligence, taking all reasonable precautions, the danger of explosions can be eliminated, the
carrier would not be justified in subjecting the traffic in this commodity to prejudice or
discrimination by proof that there would be a possibility of danger from explosion when no such
precautions are taken.
Dispositive portion:
Petition DISMISSED
