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1. Yujuico Transit Co. transferred ownership of 10 buses to Jesus Yujuico without approval from the Board of Transportation (BOT). Jesus then sold the buses to Y Transit Co.
2. The Yujuico Transit Employees Union filed complaints against Yujuico for unfair labor practices and non-payment. The buses were levied to satisfy the judgment.
3. Y Transit Co. claimed third party ownership of the buses. The NLRC ruled the transfer of buses without BOT approval was invalid and Yujuico remained the lawful owner.
1. Yujuico Transit Co. transferred ownership of 10 buses to Jesus Yujuico without approval from the Board of Transportation (BOT). Jesus then sold the buses to Y Transit Co.
2. The Yujuico Transit Employees Union filed complaints against Yujuico for unfair labor practices and non-payment. The buses were levied to satisfy the judgment.
3. Y Transit Co. claimed third party ownership of the buses. The NLRC ruled the transfer of buses without BOT approval was invalid and Yujuico remained the lawful owner.
1. Yujuico Transit Co. transferred ownership of 10 buses to Jesus Yujuico without approval from the Board of Transportation (BOT). Jesus then sold the buses to Y Transit Co.
2. The Yujuico Transit Employees Union filed complaints against Yujuico for unfair labor practices and non-payment. The buses were levied to satisfy the judgment.
3. Y Transit Co. claimed third party ownership of the buses. The NLRC ruled the transfer of buses without BOT approval was invalid and Yujuico remained the lawful owner.
FACTS 1. On 24 October 1978, Yujuico Transit Co., Inc. (Yujuico) transferred ownership of ten buses to Jesus Yujuico (Jesus) as a consequence of the latters transfer of property to DBP to satisfy the formers obligations. 2. Sometime in June and July 1979, respondent Yujuico Transit Employees Union (Union) filed two consolidated complaints against Yujuico for unfair labor practice and for non-payment of living allowances. 3. Meanwhile, on 21 May 1980, Jesus sold the buses to petitioner Y Transit Co., Inc. . 4. On 21 July 1981, the LA dismissed the complaint for unfair labor practice but held Yujuico liable for non-payment of living allowances and the buses were levied upon to satisfy the writ of execution. 5. Y filed Affidavits of Third Party Claim, which Union opposed on the grounds that: (1) the transactions leading to the transfer of the buses to Y were void because they lacked the approval of the BOT as required by the Public Service Act; and (2) the buses were still registered in the name of Yujuico which means it is still the lawful owner. 6. The LA found that Y had valid title to the buses and that the BOT, by its subsequent acts, had approved the transfer; he further ruled that registration is not the operative act that transfers ownership and that, in addition, Y had already constructively registered the vehicles. 7. On appeal the NLRC reversed the decision on the ground that the transfer of the buses lacked the BOT approval.
ISSUES/HELD Were the transfer of the buses, without BOT approval, valid insofar as the respondents are concerned? NO.
RATIONALE The law really requires the approval of the Public Service Commission in order that a franchise, or any privilege pertaining thereto, may be sold or leased without infringing the certificate issued to the grantee. o Since a franchise is personal in nature, any transfer or lease thereof should be notified to the PSC so that the latter may take proper safeguards to protect the interest of the public. o In fact, the law requires that, before the approval is granted, there should be a public hearing with notice to all interested parties in order that the commission may determine if there are good and reasonable ground justifying the transfer or lease of the property covered by the franchise, or is the sale or lease is detrimental to public interest. If the property covered by the franchise is transferred, or leased to another without obtaining the requisite approval, the transfer is not binding against the PSC and, in contemplation of law, the grantee continues to be responsible under the franchise. The last part of Section 16 (h) (which states that nothing herein contained shall be construed to prevent the sale, alienation, or lease by any public utility of any of its property in the ordinary course of business) does not mean that the approval of the PSC is a mere formality and that the transfer or lease is still binding; said provision only means that, even if the approval has not been obtained, the transfer or lease is valid and binding between the parties although not effective against the public and the PSC as the approval is only necessary to protect public interest. There being no prior BOT approval in the transfer of the property from Yujuico to Jesus, it only follows that, as far as the BOT and third parties are concerned, Yujuico still owned the properties and Jesus, and later Y, only held the same as agents of the former. Conversely, where the registered owner is liable for obligations to third parties and vehicles registered under his name are levied upon to satisfy his obligations, the transferee of such vehicles cannot prevent the levy by asserting his ownership because, as far as the law is concerned, the one in whose name the vehicle is registered remains to be the owner and the transferee merely holds the vehicles for the registered owner. o However, this does not deprive the transferee of the right to recover from the registered owner any damages which may have been incurred by the former since the transfer or lease is valid and binding between the parties.