CHAPTER II THE PUBLIC SERVICE LAW

A. Public Service Commission and its functions

1. Sections 1 and 2, C.A. No. 146 or the Public Service Act of 1936
2. Public service defined
3. Statutory definition of public utility abandoned
JG Summit Holdings, Inc. v. CA, GR 124293. Sept. 24, 2003, 412 SCRA
10; Tinga, J., Sep. Op.
4. Public use defined
Iloilo Ice and Cold Storage Co. vs. Public Utility Board, GR L-19857.
Mar. 2, 1923; 44 Phil. 551
5. Services not deemed as public utilities
B. Franchise for public services
1. Franchise defined
2. Authority to issue franchises
a. Section 11 of Article XII of the 1987 Constitution
b. Albano v. Reyes, GR 83551, July 11, 1989, 175 SCRA 264
3. Public Service Commission abolished and replaced
4. Certificate of Public Convenience (CPC) or Certificate of Public
Convenience and Necessity (CPCN) defined
5. Conditions for the issuance of CPC or CPCN
Sec. 15, par. 2, C.A. No. 146, as amended
6. Requisites for the grant of CPC or CPCN
7. Prior operator rule or Old operator rule; Exceptions
Halili v. Cruz, GR L-21061. June 27, 1968, 23 SCRA 1174
8. Prior applicant rule
9. Third operator rule
10. Protection of investment rule

Sections 1 and 2, C.A. No. 146 or the Public Service Act of 1936
BY ALVIN CLARIDADES ON JANUARY 10, 2017

Sections 1 and 2, C.A. No. 146 or the Public Service Act of 1936

Section 1. This Act shall be known as the Public Service Act.

Section 2. There is created under the Department of Justice a commission which
shall be designated and known as the Public Service Commission, composed of
one Public Service Commissioner and five Associate Commissioners, and which
shall be vested with the powers and duties hereafter specified. Whenever the
word Commission is used in this Act, it shall be held to mean the Public Service
Commission, and whenever the word Commissioner is used in this Act it shall
be held to mean the Public Service Commissioner or anyone of the Associate
Commissioners. The Public Service Commissioner and the Associate Public
Service Commissioners shall be natural born citizens and residents of the
Philippines, not under thirty years of age; members of the Bar of the Philippines,
with at least five years of law practice or five years of employment in the
government service requiring a lawyers diploma; and shall be appointed by the
President of the Philippines, with the consent of the Commission on
Appointments of the Congress of the Philippines: Provided, however, That the
present Commissioner and the personnel of the Commission shall continue in
office without the necessity of re-appointment. The Commissioners shall have
the rank and privilege of retirement of Judges of the Courts of First Instance. (As
amended by Republic Act Nos. 178 and 2677)
 Republic of the Philippines
SUPREME COURT
Manila

SPECIAL FIRST DIVISION

G.R. No. 124293 September 24, 2003

JG SUMMIT HOLDINGS, INC., Petitioner,

vs.
COURT OF APPEALS, COMMITTEE ON PRIVATIZATION, its Chairman and
Members; ASSET PRIVATIZATION TRUST and PHILYARDS HOLDINGS,
INC., Respondents.

SEPARATE OPINION

TINGA, J.:

Whether a shipyard is a public utility is at the heart of the present controversy.

Although I take a different route, I reach the same result as Mr. Justice Puno.

Since the enactment of Commonwealth Act No. 454 on June 8, 1939, shipyards have
never been considered public utilities, whether by legislative declaration or executive fiat,
or even in administrative practice.

True, "shipyard" is mentioned along with other business operations in the course of the
definition by enumeration of "public service" in the Public Service Act.1 The terms "public
service" and "public utility," however, do not have the same legal meaning, at least since
the enactment of C.A. No. 454.2 The terms are related though.

The definition of "public service" in the Public Service Act, as last amended by Republic
Act No. 2677, includes every person who owns, operates, manages or controls, for hire
or compensation, and done for general business purposes, any common carrier, railroad,
street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or
both with or without fixed route and whatever may be its classification, freight or carrier
service of any class, express service, steamboat, or steamship line, pontines, ferries, and
water craft, engaged in the transportation of passengers or freight or both, shipyard,
marine railway, marine repair shop, wharf or dock, ice plant, icerefrigeration plant,
canal, irrigation system, gas, electric light, heat and power, water supply and power,
petroleum, sewerage system, wire or wireless communications systems, broadcasting
stations and other similar public services.3 A "public utility," on the other hand, is a
business or service engaged in regularly supplying the public with some commodity or
service of public consequence such as electricity, gas, water, transportation, telephone or
telegraph service.4 Simply stated, a public utility provides a service or facility needed for
present day living which cannot be denied to any one who is willing to pay for it.5

Formerly, there was a statutory definition of "public utility," but it was abandoned in C.A.
No. 454.6 The definition was instead solely applied to "public service" apparently because
it did not exactly fit the concept of public utility. It is significant in this regard that while the
1935 Constitution which took effect on February 2, 1935 specifically mentioned "public
utility,"7 C.A. No. 454 shifted from "public utility" to "public service" as the sole reference
term in the Public Service Act.

Another dissimilarity is that a public utility requires a franchise, aside from a certificate of
public necessity and convenience, for its operation, while a public service which is not a
public utility requires only a certificate of public convenience.8 The dichotomy in
requirements flows from the enforced indeterminacy of the market for the service
provided by a public utility. Thus, it may be pointed out that all public utilities are public
services but the converse is not true. This is so because the term "public utility" connotes
public use and service to the public.9

A legislative declaration such as the definition by enumeration in the Public Service

Act10 does not ipso facto render a business or service a public utility. For, as this Court
held in North Negros Sugar Co. v. Hidalgo,11 whether or not one is a public utility is a
matter of judicial, not legislative determination.

"* * * Whether or not a given business, industry, or service is a public utility

does not depend upon legislative definition, but upon the nature of the business or
service rendered, and an attempt to declare a company or enterprise to be a public utility,
where it is inherently not such, is, by virtue of the guaranties of the federal constitution,
void whenever it interferes with private rights of property or contract. So a legislature
cannot by mere fiat or regulatory order convert a private business or enterprise into a
public utility, and the question whether or not a particular company or service is a public
utility is a judicial one, and must be determined as such by a court of competent
jurisdiction; * * *." (51 C.J., sec. 3, p. 5)12 [Emphasis supplied.]

Paraphrasing a decision13 of the United States Supreme Court, a private enterprise doing
business under private contracts with customers of its choice and therefore not devoted
to public use cannot by legislative enactment or administrative order be converted into a
public utility, for that would constitute taking of private property for public use without just
compensation in derogation of the Constitution.

Again, the categorization of a business or service as a public utility or other wise is a

judicial prerogative. Hence, this Court held in a significant number of cases that the
business or services involved were not public utilities despite contradicting legislative
classifications.

In one case,14 we declared that an oil company is not a public utility, notwithstanding the
law15 which categorizes petroleum operation, including refining, as a public utility:

A "public utility" under the Constitution and the Public Service Law is one organized "for
hire or compensation" to serve the public, which is given the right to demand its service.
PETRON is not engaged in oil refining to process the oil of other parties.16

In another case,17 we intimated that a "wharf" or "dock" as contemplated under the Public
Service Act is not necessarily a public utility.18

An operator of trucks who furnished service under special agreements to carry particular
persons and property was held to be not a public utility as he did not hold himself out to
serve any and all persons.19 So is a mere owner and lessor of the equipment and
facilities needed to operate a rail system not a public utility since the right to operate a
public utility may exist independently of and separately from the ownership of the facilities
thereof.20

An ice plant, although included in the definition of a public service under Act No.
2307,21 is not a public utility if it is organized solely for particular persons under strictly
private contracts, and never was devoted by its owner to public use. However, it is
treated as a public utility if the ice it produces is sold to the public.22

The test, therefore, in determining if a service is a public utility, is whether the public may
enjoy it by right or only by permission.23 A shipyard fails this test. As Justice Puno points
out, a shipyard is not, by nature or tradition, a public utility in much the same way as
automobile or airplane manufacturers are not public utilities.24

Apart from shipyards, marine repair shops, wharves or docks, canals, irrigation systems,
petroleum supply and wire or wireless broadcasting stations, although included in the
definition of "public service" in the Public Service Act, as amended, are clearly not public
utilities. Services which were once included in the definition of "public service" were later
on excluded from the statutory enumeration,25 indicating the impermanence of "public
service" as a concept in the law on utilities.

Still on the legislative side, to the best of my knowledge,26 no person or firm has secured
a legislative franchise to operate a shipyard or even applied for one. On the
administrative side, as noted by Mr. Justice Puno,27 the Maritime Industry Authority
(MARINA) has not been empowered to issue franchise for shipyard operation. It is
authorized under Executive Orders No. 124 and NO. 125-A, effective as of January 10
and April 13, 1987, respectively, to issue certificates of public convenience to domestic
and water carriers.28 But the presidential issuances have no similar provision with respect
to shipyard operation.

To reiterate, shipyards have never been in legal contemplation considered as public

utilities. The promulgation of P.D. No. 666 in 1975 which required, in Section
1(d)29 thereof, the registration of shipyards merely as such, definitely not as public
utilities, served simply to remove any doubt as to their nonpublic utility status. Note in
this regard that MARINA was created by P.D. No. 47430 on June 1, 1974, or prior to the
promulgation of P.D. No. 666. And P.D. No. 474 did not authorize MARINA to issue
franchise for shipyard operation, not unlike E.O. Nos. 125 and 125-A which were
promulgated after it.

The repeal of Section 1 of P.D. No. 666 by Batas Pambansa Blg. 391, enacted in 1983,
did not convert shipyards into public utilities. Of course, the subsequent repeal of Batas
Pambansa Blg. 391 by E.O. No. 22631 in 1987 has effectively laid the issue to rest once
and for all.

Except for this divergence, I concur in Mr. Justice Punos well-reasoned opinion.

I vote to GRANT respondents motions for reconsideration.

Footnotes

1 C.A. No. 146, as amended.

2"Public utility" was used in Act No. 2307, Act No. 269 and Act No. 3108. "Public
service" and "public utility" were interchangeably used in C.A. No. 146. "Public
utility" was abandoned and "public service" used in its place in C.A. No. 454. The
subsequent enactments, R.A. No. 1270 and R.A. No. 2677, also defined "public
service" only.
3
Sec. 1, R.A. No. 2677, amending Sec. 13(b), C.A. No. 146 as amended.

4National Power Corporation v. Court of Appeals, 345 Phil. 9 (1997), citing

Albano v. Reyes, G.R. No. 83551, July 11, 1989, 175 SCRA 264, and 64 Am.
Jur. 2d, p. 549.

5A more comprehensive definition of "public utility" has been offered by a noted

American author:

In its most extended sense the term public utilities is designed to cover
certain industries which in the course of time have been classified apart
from industry in general and have likewise been distinguished from
governmental services with which, however, they often are intimately
related. The basis of the classification is essentially economic and
technological, although the meaning of the term is derived from the law.

(Martin G. Glaeser, PUBLIC UTILITIES IN AMERICAN CAPITALISM

[New York: The MacMillan Co., 1957], p. 8.)

6 See note 2, supra.

7 1935 CONST., Art. XIV, Sec. 8.

8 See Agbayani, Commentaries and Jurisprudence on the Commercial Laws of

the Philippines, 1972 ed. Vol. 4, p. 307; Sec. 14(i), Act No. 3108.

964 Am Jur 2d, p. 549, cited in Albano v. Reyes and National Power Corporation
v. Court of Appeals, supra, note 4.

10 See note 3, supra.

11 63 Phil. 664 (1936).

12 Id., at 691.

Pipe Line Cases, 234 U.S. 548, cited in Iloilo Ice and Cold Storage Co. v.
13

Public Utility Board, 44 Phil. 551, at 560 (1923).

Bagatsing v. Committee or Privatization, G.R. No. 112399, Gonzales v. Lazaro,

14

G.R. No. 115334, July 14, 1995, 246 SCRA 334.

15R.A. No. 387, otherwise known as the Petroleum Act of 1949. Act No. 3108
and C.A. No. 146, included "oil" in the definition of "public utility" while the
definition of "public service" in C.A. No. 146 and No. 454, R.A. No. 1270 and No.
2677 covered "petroleum."

16 Supra note 13, at 358.

17 Albano v. Reyes, supra 8.

18 Id., at 270-271.
19
United States v. Tan Piaco, 40 Phil. 853, 855 (1949). Under Sec. 13 (b), C.A.
No. 146, as amended, a "freight or carrier service of any class...engaged in the
transportation of passenger or freight or both" is a public service.

20Tatad V. Garcia, G.R. No. 114222, April 6, 1995, 243 SCRA 436. Also under
Sec. 13(b), C.A. No. 146, as amended, a railway "engaged in the transportation
of passengers or freight or both" is a public service.

21 This Act is one of the precursors of C.A. No. 146.

La Paz Ice Plant & cold Storage Co., Inc. v. John Bordman and Iloilo
22

Commercial & Ice Co., 65 Phil. 401 (1938).

23 United States v. Tan Piaco, supra, note 16.

24 Resolution, J. Puno, p. 13.

25 E.g., Warehouses, radio companies, small watercraft, plant or equipment.

26This writer was the chairman of the House Committee on Corporations and
Franchises in the Eight Congress (1987-1992).

27 Resolution, J. Puno, p 21..

28Sec. 14(c ), E.O. No. 125; Sec. 3, E.O. No. 125-A, amending Sec. 14, E.O. No.
125.

29Sec. 1(d). Registration required but not as Public Utility. The business of
constructing and repairing vessels or parts thereof shall not be considered a
public utility and no Certificate of Public Convenience shall be required therefor.
However, no shipyard, graving dock, marine railway or marine repair shop and no
person or enterprise shall engage in the construction and/or repair of any vessel,
or any phase or part thereof, without a valid Certificate of Registration and license
for this purpose from the Maritime Industry Authority, except those owned or
operated by the Armed Forces of the Philippines or by foreign governments
pursuant to a treaty or agreement (P.D. No. 666).

30"An Act for the Reorganization of Maritime Functions in the Philippine," creating
the Maritime Industry Authority, and for other purposes.

31This Order, other wise known as the "Omnibus Investments Code of 1987,"
was promulgated by then President Corazon C. Aquino in the exercise of her
residual legislative powers.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-19857 March 2, 1923

THE ILOILO ICE AND COLD STORAGE COMPANY, petitioner,

vs.
PUBLIC UTILITY BOARD, respondent.

John Bordman for petitioner.

Attorney-General Villa-Real for respondent.

MALCOLM, J.:

This action in certiorari is for the purpose of reviewing a decision of the Public Utility
Commissioner, affirmed by the Public Utility Board, holding that the petitioner, the Iloilo
Ice and Cold Storage Company, is a public utility and, as such, subject to the control and
jurisdiction of the Public Utility Commissioner.

The case can be best understood by a consideration of its various phases, under the
following topic: Statement of the issue, statement of the case, statement of the facts,
statement of the law, statement of the authorities, statement of the petitioner's case, and
of the government's case, and judgment.

STATEMENT OF THE ISSUE

The issue is whether the Iloilo Ice and Cold Storage Company is a public utility, as that
term is defined by section 9 of Act No. 2694.

STATEMENT OF THE CASE

Francisco Villanueva, Jr., secretary of the Public Utility Commission, investigated the
operation of ice plants in Iloilo early in November, 1921. He reported to the Public Utility
Commissioner that the Iloilo Ice and Cold Storage Company should be considered a
public utility, and that, accordingly, the proper order should issue.

Agreeable to the recommendation of Secretary Villanueva, the Public Utility

Commissioner promulgated an order on December 19, 1921, reciting the facts
abovementioned, and directing the Iloilo Ice and Cold Storage Company to show cause
why it should not be considered a public utility and as such required to comply with each
and every duty of public utilities provided in Act No. 2307, as amended by Act No. 2694.
To this order, John Bordman, treasurer of the Iloilo Ice and Cold Storage Company,
interposed a special answer, in which it was alleged that the company is, and always has
been operated as a private enterprise.

Hearing was then had, at which the testimonies of Francisco Villanueva, Jr., and of John
Bordman were received. Various exhibits were presented and received in evidence. Mr.
Bordman, as the managing director and treasurer of the company, later submitted an
affidavit.

The Public Utility Commissioner rendered a decision holding in effect that the Iloilo Ice
and Cold Storage Company was a public utility, and that, accordingly, it should file in the
office of the Public Utility Commissioner, a statement of its charges for ice. This decision
was affirmed on appeal to the Public Utility Board. From this last decision, petitioner has
come before this court, asking that the proceeding below be reviewed, and the decisions
set aside.

STATEMENT OF THE FACTS

The petitioner, the Iloilo Ice and Cold Storage Company, is a corporation organized under
the laws of the Philippine Islands in 1908, with a capital stock of P60,000. Continuously
since that date, the company has maintained and operated a plant for the manufacture
and sale of ice in the City of Iloilo. It also does business to a certain extent in the
Provinces of Negros, Capiz, and Antique, and with boats which stop at the port of Iloilo.
At the time its operation were started, two additional ice plants were operating in Iloilo.
Subsequently, however, the other plants ceased to operate, so that the petitioner now
has no competitor in the field.

The normal production of ice of the Iloilo Ice and Cold Storage Company is about 3 tons
per day. In the month of January, 1922, a total of 83,837 kilos of ice were sold, of which
56,400 kilos were on written contracts in the City of Iloilo and adjoining territory, 14,214
kilos, also on written contracts, to steamers calling at the port of Iloilo, and 13,233 kilos
on verbal contracts. Although new machinery has been installed in the plant, this was
merely for replacement purposes, and did not add to its capacity. The demand for ice has
usually been much more than the plant could produce and no effort has been made to
provide sufficient ice to supply all who might apply.

Since 1908, the business of the Iloilo Ice and Cold Storage Company, accordingly to its
managing director and treasurer, has been carried on with selected customers only.
Preference, however, is always given to hospitals, the request of practicing physicians,
and the needs of sick persons. The larger part of the company's business is perfected by
written contracts signed by the parties served, which, in the present form, includes an
agreement that no right to future service is involved.

The coupon books of the company contain on the outside the following:

This agreement witnesseth, that The Iloilo Ice and Cold Storage Co. will furnish
the undersigned with ice as indicated herein at the rate of one coupon per day.
These coupons are not transferable. It is further agreed that the company is not
obligated to similar service in future except by special agreement.

Iloilo, ......................................................................................., 192 ......

(Signed) ....................................................................... No. ..................

Cash sales of ice are accomplished on forms reading: "In receiving the ice represented
by this ticket I hereby agree that the Iloilo Ice and Cold Storage Co. is not bound in future
to extend to me further service." A notice posted in the Iloilo store reads: "No ice is sold
to the public by this plant. Purchases can only be made by private contract." In August,
1918, all storage facilities were abolished, and resumed in 1920 only with contracts, a
copy of the form at present in use waiving any right to continued service.

On only one point of fact is there any divergence, and this is relatively unimportant.
Secretary Villanueva reported, and the Public Utility Commissioner found, that the Iloilo
Ice and Cold Storage Company sold ice to the public, and advertised its sale through the
papers; while managing director Bordman claims that only once have the instructions of
the board of directors prohibiting public advertising been violated.
 STATEMENT OF THE LAW

The original public utility law, Act No. 2307, in its section 14, 1n speaking of the
jurisdiction of the Board of Public Utility Commissioner, and in defining the term "public
utility," failed to include ice, refrigeration, and cold storage plants. This deficiency was,
however, remedied by Act No. 2694, enacted in 1917, which amended section 14 of Act
No. 2307, to read as follows:

* * * The term "public utility" is hereby defined to include every individual,

copartnership, association, corporation or joint stock company, whether domestic
or foreign, their lessee, trustees or receivers appointed by any court whatsoever,
or any municipality, province or other department of the Government of the
Philippine Islands, that now or hereafter may own, operate, manage or control
within the Philippine Islands any common carrier, railroad, street railway, traction
railway, steamboat or steamship line, small water craft, such
as bancas, virais, lorchas, and others, engaged in the transportation of
passengers and cargo, line of freight and passenger automobiles, shipyard,
marine railway, marine repair shop, ferry, freight or any other car services, public
warehouse, public wharf or dock not under the jurisdiction of the Insular Collector
of Customs, ice, refrigeration, cold storage, canal, irrigation, express, subway,
pipe line, gas, electric light, heat, power, water, oil sewer, telephone, wire or
wireless telegraph system, plant or equipment, for public use: Provided, That the
Commission or Commissioner shall have no jurisdiction over ice plants, cold
storage plants, or any other kind of public utilities operated by the Federal
Government exclusively for its own and not for public use. . . .

It will thus be noted that the term "public utility," in this jurisdiction, includes every
individual, copartnership, association, corporation, or joint stock company that now or
hereafter may own, operate, manage, or control, within the Philippine Islands, any ice,
refrigeration, cold storage system, plant, or equipment, for public use. Particular attention
is invited to the last phrase, "for public use."

STATEMENT OF THE AUTHORITIES

The authorities are abundant, although some of them are not overly instructive. Selection
is made of the pertinent decisions coming from our own Supreme Court, the Supreme
Court of the United States, and the Supreme Court of California.

In the case of United States vs. Tan Piaco ([1920], 40 Phil., 853), the facts were that the
trucks of the defendant furnished service under special agreements to carry particular
persons and property. Following the case of Terminal Taxicab Co. vs. Kutz ([1916], 241
U. S., 252), it was held that since the defendant did not hold himself out to carry all
passengers and freight for all persons who might offer, he was not a public utility and,
therefore, was not criminally liable for his failure to obtain a license from the Public Utility
Commissioner. It was said:

Under the provisions of said section, two things are necessary: (a) The individual,
copartnership, etc., etc., must be a public utility; and (b) the business in which
such individual, copartnership, etc., etc., is engaged must be for public use. So
long as the individual or copartnership, etc., etc., is engaged in a purely private
enterprise, without attempting to render service to all who may apply, he can in
no sense be considered a public utility, for public use.

"Public use" means the same as "use by the public." The essential feature of the
public use is that it is not confined to privileged individuals, but is open to the
indefinite public. It is this indefinite or unrestricted quality that gives it its public
 character. In determining whether a use is public, we must look not only to the
character of the business to be done, but also to the proposed mode of doing it. If
the use is merely optional with the owners, or the public benefit is merely
incidental, it is not a public use, authorizing the exercise of the jurisdiction of the
public utility commission. There must be, in general, a right which the law
compels the owner to give to the general public. It is not enough that the general
prosperity of the public is promoted. Public use is not synonymous with public
interest. The true criterion by which to judge of the character of the use is
whether the public may enjoy it by right or only by permission.

In the decision of the Supreme Court of the United States in Terminal Taxicab
Company vs. Kutz, supra, it was held: "A taxicab company is a common carrier within the
meaning of the Act of March 4, 1913 (37 Stat. at L., 938, chap. 150), sec. 8, and hence
subject to the jurisdiction of the Public Utilities Commission of the District of Columbia as
a "public utility" in respect of its exercise of its exclusive right under lease from the
Washington Terminal Company, the owner of the Washington Union Railway Station, to
solicit livery and taxicab business from persons passing to or from trains, and of its
exclusive right under contracts with certain Washington hotels to solicit taxicab business
from guest, but that part of its business which consists in furnishing automobiles from its
central garage on individual orders, generally by telephone, cannot be regarded as a
public utility, and the rates charged for such service are therefore not open to inquiry by
the Commission." Mr. Justice Holmes, delivering the opinion of the court, in part said:

The rest of the plaintiff's business, amounting to four tenths, consists mainly in
furnishing automobiles from its central garage on orders, generally by telephone.
It asserts the right to refuse the service, and no doubt would do so it the pay was
uncertain, but it advertises extensively, and, we must assume, generally accepts
any seemingly solvent customer. Still, the bargains are individual, and however
much they may tend towards uniformity in price, probably have not quite the
mechanical fixity of charges that attends the use of taxicabs from the station and
hotels. There is no contract with a third person to serve the public generally. The
question whether, as to this part of its business, it is an agency for public use
within the meaning of the statute, is more difficult. . . . Although I have not been
able to free my mind from doubt, the court is of opinion that this part of the
business is not to be regarded as a public utility. It is true that all business, and,
for the matter of that, every life in all its details, has a public aspect, some bearing
upon the welfare of the community in which it is passed. But, however it may
have been in earlier days as to the common callings, it is assumed in our time
that an invitation to the public to buy does not necessarily entail an obligation to
sell. It is assumed an ordinary shopkeeper may refuse his wares arbitrary to a
customer whom he dislikes, and although that consideration is not conclusive
(233 U. S., 407), it is assumed that such a calling is not public as the word is
used. In the absence of clear language to the contrary it would be assumed that
an ordinary livery stable stood on the same footing as a common shop, and there
seems to be no difference between the plaintiff's service from its garage and that
of a livery stable. It follows that the plaintiff is not bound to give information as to
its garage rates.

The Supreme Court of California in the case of Thayer and Thayer vs. California
Development Company ([1912], 164 Cal., 117), announced, among other things, that the
essential feature of a public use is that "it is not confined to privileged individuals, but is
open to the indefinite public. It is this indefiniteness or unrestricted quality that gives it its
public character." Continuing, reference was made to the decision of the United States
Supreme Court in Fallbrook Irrigation District vs. Bradley ([1896], 164 U. S., 161), where
the United States Supreme Court considered the question of whether or not the water
belonging to an irrigation district organized under the California statute of 1887, and
acquired for and applied to its authorized uses and purposes, was water dedicated to a
public use. Upon this question, the Supreme Court on appeal said:

The fact that the use of the water is limited to the landowner is not therefore a
fatal objection to this legislation. It is not essential that the entire community, or
even any considerable portion thereof, should directly enjoy or participate in an
improvement in order to constitute a public use. All landowners in the district
have the right to a proportionate share of the water, and no one landowner is
favored above his fellow in his right to the use of the water. It is not necessary, in
order that the use should be public, that every resident in the district should have
the right to the use of the water. The water is not used for general, domestic, or
for drinking purposes, and it is plain from the scene of the act that the water is
intended for the use of those who will have occasion to use it on their lands. . . .
We think it clearly appears that all who by reason of their ownership of or
connection with any portion of the lands would have occasion to use the water,
would in truth have the opportunity to use it upon the same terms as all others
similarly situated. In this away the use, so far as this point is concerned, is
public because all persons have the right to use the water under the same
circumstances. This is sufficient.

The latest pronouncement of the United States Supreme Court here available is found in
the case of Producers Transportation Company vs. Railroad Commission of the State of
California ([1920], 251 U. S., 228). Mr. Justice Van Devander, delivering the opinion of
the court, in part said:

It is, of course, true that if the pipe line was constructed solely to carry oil for
particular procedures under strictly private contracts and never was devoted by
its owner to public use, that is, to carrying for the public, the State could not by
mere legislative fiat or by any regulating order of a commission convert it into a
public utility or make its owner a common carrier; for that would be taking private
property for public use without just compensation, which no State can do
consistently with the due process of law clause of the Fourteenth Amendment. . .
. On the other hand, if in the beginning or during its subsequent operation the
pipe line was devoted by its owner to public use, and if the right thus extended to
the public has not been withdrawn, there can be no doubt that the pipe line is a
public utility and its owner a common carrier whose rates and practices are
subject to public regulation. Munn vs. Illinois, supra.

The state court, upon examining the evidence, concluded that the company
voluntarily had devoted the pipe line to the use of the public in transporting oil,
and it rested this conclusion upon the grounds . . . that, looking through the maze
of contracts, agency agreements and the like, under which the transportation was
effected, subordinating form to substance, and having due regard to the agency's
ready admission of new members and its exclusion of none, it was apparent that
the company did in truth carry oil for all producers seeking its service, in other
words, for the public. (See Pipe Line Cases, 234 U. S., 548.)

Lastly, we take note of the case of Allen vs. Railroad Commission of the State of
California ([1918], 179 Cal., 68; 8 A. L. R., 249). It was here held that a water company
does not, by undertaking to furnish a water supply to a municipality which will require only
a small percentage of its product, become a public utility as to the remainder, which it
sells under private contracts. The court observed that its decision fully recognized that a
private water company may be organized to sell water for purposes of private gain, and
that in doing, it does not become a public utility. "To hold that property has been
dedicated to a public use," reads the opinion, "is not a trivial thing, and such dedication is
never presumed without evidence of unequivocal intention." Continuing, the court
discusses what is a public utility in the following language:
 What is a public utility, over which the state may exercise its regulatory control
without regard to the private interest which may be affected thereby? It its
broadest sense everything upon which man bestows labor for purpose other than
those for the benefits of his immediate family is impressed with a public use. No
occupation escapes it, no merchant can avoid it, no professional man can deny it.
As an illustrative type one may instance the butcher. He deals with the public; he
invites and is urgent that the public should deal with him. The character of his
business is such that, under the police power of the state, it may well be subject
to regulation, and in many places and instances is so regulated. The preservation
of cleanliness, the inspection of meats to see that they are wholesome, all such
matters are within the due and reasonable regulatory powers of the state or
nation. But these regulatory powers are not called into exercise because the
butcher has devoted his property to public service so as to make it a public utility.
He still has the unquestionable right to fix his prices; he still has the questioned
right to say that he will or will not contract with any member of the public. What
differentiates all such activities from a true public utility is this and this only: That
the devotion to public use must be of such character that the public generally, or
that part of it which has been served and which has accepted the services, has
the right to demand that that service shall be conducted, so long as it is
continued, with reasonable efficiency under reasonable charges. Public use,
then, means the use by the public and be every individual member of it, as a
legal right.

STATEMENT OF THE PETITIONER'S CASE AND OF THE GOVERNMENT'S CASE

Petitioner contends on the facts, that the evidence shows that the petitioner is operating
a small ice plant in Iloilo; that no attempt has been made to supply the needs of all who
may apply for accommodation or to expand the plant to meet all demands; that sales
have been made to selected customers only, and that the right has been freely exercised
to refuse sales not only to whole districts, but constantly to individuals as wells; that the
greater portion of the business is conducted through signed contracts with selected
individuals, and on occasions, when there is a surplus, the same is sold for cash to
selected applicants; that no sales are made except to persons who have waived all claim
of right to similar accommodation in the future; and that no offer, agreement, or tender of
service to the public has ever been made. Petitioner contends, as to the law, that the
decisions heretofore referred to are controlling.

The Government has no quarrel with the petitioner as to the facts. But the Attorney-
General attempts to differentiate the authorities from the instant situation. The Attorney-
General also argues that to sanction special contracts would "open a means of escape
from the application of the law."

The result is, therefore, that we have substantial agreement between the petitioner and
the government as to the issue, as to the facts, as to the law, and as to the applicable
authorities. The question, however, remains as puzzling as before.

Planting ourselves of the authorities, which discuss the subject of public use, the criterion
by which to judge of the character of the use is whether the public may enjoy it by right or
only by permission. (U. S. vs. Tan Piaco, supra.) The essential feature of a public use is
that it is not confined to privileged individuals, but is open to the indefinite public. (Thayler
and Thayler vs. California Development Company, supra.) The use is public if all persons
have the right to the use under the same circumstances. (Fall brook Irrigation
District vs. Bradley, supra.) If the company did in truth sell ice to all persons seeking its
service, it would be a public utility. But if on the other hand, it was organized solely for
particular persons under strictly private contracts, and never was devoted by its owners
to public use, it could not be held to be a public utility without violating the due process of
law clause of the Constitution. (Producers Transportation Co. vs. Railroad
Commission, supra.) And the apparent and continued purpose of the Iloilo Ice and
Storage Company has been, and is, to remain a private enterprise and to avoid
submitting to the Public Utility law.

The argument for the Government, nevertheless, merits serious consideration. The
attempt of the Public Utility Commissioner to intervene in corporate affairs, to protect the
public, is commendable. Sympathetic thought should always be given to the facts laid
before the Commissioner, with reference to the law under which he is acting.

Aware of the foregoing situation, the members of the Court are of the opinion that the
present case is governed by the authorities mentioned in this decision, which means, of
course, that, upon the facts shown in the record, the Iloilo Ice and Storage Company is
not a public utility within the meaning of the law. Like Mr. Justice Holmes, in his opinion in
Terminal Taxicab Company vs. Kutz, supra, when, in speaking for himself personally, he
admitted that he had not been able to free his mind from doubt, so has the writer not
been able to free his mind from doubt, but is finally led to accept the authorities as
controlling.

JUDGMENT

It is declared that the business of the Iloilo Ice and Cold Storage Company is not a public
utility, subject to the control and jurisdiction of the Public Utility Commissioner, and that,
accordingly, the decisions of the Public Utility Commissioner and of the Public Utility
Board must be revoked, without special finding as to costs. So ordered.

Araullo, C. J., Street, Avancea, Johns, and Romualdez, JJ., concur.

Separate Opinions

OSTRAND, J., concurring:

I concur in the result on the ground that an ice plant is not public utility by common law,
but is only made so by statute; that in the present case the plant existed in approximately
its present form and as, in a then legal sense, a private enterprise, before the statute
making such plants public utilities was enacted; and that under these circumstances to
deprive the owner of a part of the control over his property amounts to a taking of
property without compensation and without due process of law, and cannot be regarded
as being within the police power of the State.

I find it difficult to agree to the proposition that an ice plant, the product of which is not
intended primarily for the use of the owners thereof but for general consumption, is for
private use, merely, and not for "public use" within the meaning of Act No. 2307, the
Public Utilities Act. The fact that sales of ice are made under special contracts and that
some individuals have been denied the privilege of purchasing cannot after the fact that
the plant is designed to supply the trade and to serve the public as far as the quantity of
ice produced permits and the purchasers are acceptable. To hold that a utility of a public
character can escape regulatory control by the simple expedient of arbitrary excluding a
limited number of persons from the enjoyment of its benefits and by posting notices to the
effect that it does not deal with the public, will seriously impair the efficacy of the Public
Utilities Act. I think a tendency may be discerned in later decisions to give the expression
"public use" a broader significance than that given it by the earlier authorities.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 83551 July 11, 1989

RODOLFO B. ALBANO, petitioner,

vs.
HON. RAINERIO O. REYES, PHILIPPINE PORTS AUTHORITY, INTERNATIONAL
CONTAINER TERMINAL SERVICES, INC., E. RAZON, INC., ANSCOR CONTAINER
CORPORATION, and SEALAND SERVICES. LTD., respondents.

Vicente Abad Santos for petitioner.

Bautista, Picazo, Buyco & Tan for private respondents.

PARAS, J.:

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).

On April 20, 1987, the PPA Board adopted its Resolution No. 850 directing PPA
management to prepare the Invitation to Bid and all relevant bidding documents and
technical requirements necessary for the public bidding of the development,
management and operation of the MICT at the Port of Manila, and authorizing the Board
Chairman, Secretary Rainerio O. Reyes, to oversee the preparation of the technical and
the documentation requirements for the MICT leasing as well as to implement this
project.

Accordingly, respondent Secretary Reyes, by DOTC Special Order 87-346, created a

seven (7) man "Special MICT Bidding Committee" charged with evaluating all bid
proposals, recommending to the Board the best bid, and preparing the corresponding
contract between the PPA and the winning bidder or contractor. The Bidding Committee
consisted of three (3) PPA representatives, two (2) Department of Transportation and
Communications (DOTC) representatives, one (1) Department of Trade and Industry
(DTI) representative and one (1) private sector representative. The PPA management
prepared the terms of reference, bid documents and draft contract which materials were
approved by the PPA Board.

The PPA published the Invitation to Bid several times in a newspaper of general
circulation which publication included the reservation by the PPA of "the right to reject
any or all bids and to waive any informality in the bids or to accept such bids which may
be considered most advantageous to the government."

Seven (7) consortia of companies actually submitted bids, which bids were opened on
July 17, 1987 at the PPA Head Office. After evaluation of the several bids, the Bidding
Committee recommended the award of the contract to develop, manage and operate the
MICT to respondent International Container Terminal Services, Inc. (ICTSI) as having
offered the best Technical and Financial Proposal. Accordingly, respondent Secretary
declared the ICTSI consortium as the winning bidder.

Before the corresponding MICT contract could be signed, two successive cases were
filed against the respondents which assailed the legality or regularity of the MICT bidding.
The first was Special Civil Action 55489 for "Prohibition with Preliminary Injunction" filed
with the RTC of Pasig by Basilio H. Alo, an alleged "concerned taxpayer", and,
the second was Civil Case 88-43616 for "Prohibition with Prayer for Temporary
Restraining Order (TRO)" filed with the RTC of Manila by C.F. Sharp Co., Inc., a member
of the nine (9) firm consortium "Manila Container Terminals, Inc." which had actively
participated in the MICT Bidding.

Restraining Orders were issued in Civil Case 88-43616 but these were subsequently
lifted by this Court in Resolutions dated March 17, 1988 (in G.R. No. 82218 captioned
"Hon. Rainerio O. Reyes etc., et al. vs. Hon. Doroteo N. Caneba, etc., et al.) and April 14,
1988 (in G.R. No. 81947 captioned "Hon. Rainerio O. Reyes etc., et al. vs. Court of
Appeals, et al.")

On May 18, 1988, the President of the Philippines 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." (Annex "I").

The next day, the PPA and the ICTSI perfected the MICT Contract (Annex "3")
incorporating therein by "clarificatory guidelines" the aforementioned presidential
directives. (Annex "4").

Meanwhile, 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 ICTSI 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.

The petition is devoid of merit.

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.

1. Executive Order No. 30, dated July 16, 1986, provides:

WHEREFORE, I, CORAZON C. AQUINO, President of the Republic of

the Philippines, by virtue of the powers vested in me by the Constitution
and the law, do hereby order the immediate recall of the franchise
granted to the Manila International Port Terminals, Inc. (MIPTI) and
authorize the Philippine Ports Authority (PPA) to take over, manage and
operate the Manila International Port Complex at North Harbor, Manila
and undertake the provision of cargo handling and port related services
 thereat, in accordance with P.D. 857 and other applicable laws and
regulations.

Section 6 of Presidential Decree No. 857 (the Revised Charter of the Philippine Ports
Authority) states:

a) The corporate duties of the Authority shall be:

xxx xxx xxx

(ii) To supervise, control, regulate, construct, maintain,

operate, and provide such facilities or services as are
necessary in the ports vested in, or belonging to the
Authority.

xxx xxx xxx

(v) To provide services (whether on its own, by contract,

or otherwise) within the Port Districts and the approaches
thereof, including but not limited to

berthing, towing, mooring, moving, slipping, or docking

of any vessel;

loading or discharging any vessel;

sorting, weighing, measuring, storing, warehousing, or

otherwise handling goods.

xxx xxx xxx

b) The corporate powers of the Authority shall be as

follows:

xxx xxx xxx

(vi) To make or enter into contracts of any kind or nature

to enable it to discharge its functions under this Decree.

xxx xxx xxx

[Emphasis supplied.]

Thus, while the PPA has been tasked, under E.O. No. 30, with the management and
operation of the Manila International Port Complex and to undertake the providing of
cargo handling and port related services thereat, the law provides that such shall be "in
accordance with P.D. 857 and other applicable laws and regulations." On the other hand,
P.D. No. 857 expressly empowers the PPA to provide services within Port Districts
"whether on its own, by contract, or otherwise" [See. 6(a) (v)]. Therefore, under the terms
of E.O. No. 30 and P.D. No. 857, the PPA may contract with the International Container
Terminal Services, Inc. (ICTSI) for the management, operation and development of the
MICP.

2. Even if the MICP be considered a public utility, 1 or a public service 2 on the theory that it
is a "wharf' or a "dock" 3 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. (See E.O. Nos. 172 and 202)

That the Constitution provides in Art. XII, Sec. 11 that the issuance of a franchise,
certificate or other form of authorization for the operation of a public utility shall be subject
to amendment, alteration or repeal by Congress does not necessarily, imply, as petitioner
posits that only Congress has the power to grant such authorization. Our statute books
are replete with laws granting specified agencies in the Executive Branch the power to
issue such authorization for certain classes of public utilities. 4

As stated earlier, 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.

In the instant case, the PPA, in the exercise of the option granted it by P.D. No. 857,
chose to contract out the operation and management of the MICP to a private
corporation. This is clearly within its power to do. Thus, PPA's acts of privatizing the
MICT and awarding the MICT contract to ICTSI are wholly within the jurisdiction of the
PPA under its Charter which empowers the PPA to "supervise, control, regulate,
construct, maintain, operate and provide such facilities or services as are necessary in
the ports vested in, or belonging to the PPA." (Section 6(a) ii, P.D. 857)

The contract between the PPA and ICTSI, coupled with the President's written approval,
constitute the necessary authorization for ICTSI's operation and management of the
MICP. The award of the MICT contract approved by no less than the President of the
Philippines herself enjoys the legal presumption of validity and regularity of official action.
In the case at bar, there is no evidence which clearly shows the constitutional infirmity of
the questioned act of government.

For these reasons the contention that the contract between the PPA and ICTSI is illegal
in the absence of a franchise from Congress appears bereft of any legal basis.

3. On the peripheral issues raised by the party, the following observations may be made:

A. That petitioner herein is suing as a citizen and taxpayer and as a Member of the
House of Representatives, sufficiently clothes him with the standing to institute the
instant suit questioning the validity of the assailed contract. While the expenditure of
public funds may not be involved under the contract, public interest is definitely involved
considering the important role of the MICP in the economic development of the country
and the magnitude of the financial consideration involved. Consequently, the disclosure
provision in the Constitution 5 would constitute sufficient authority for upholding petitioner's
standing. [Cf. Taada v. Tuvera, G.R. No. 63915, April 24, 1985,136 SCRA 27, citing
Severino v. Governor General, 16 Phil. 366 (1910), where the Court considered the
petitioners with sufficient standing to institute an action where a public right is sought to be
enforced.]

B. That certain committees in the Senate and the House of Representatives have, in their
respective reports, and the latter in a resolution as well, declared their opinion that a
franchise from Congress is necessary for the operation of the MICP by a private
individual or entity, does not necessarily create a conflict between the Executive and the
Legislative Branches needing the intervention of the Judicial Branch. The court is not
faced with a situation where the Executive Branch has contravened an enactment of
Congress. As discussed earlier, neither is the Court confronted with a case of one branch
usurping a power pertaining to another.

C. Petitioner's contention that what was bid out, i.e., the development, management and
operation of the MICP, was not what was subsequently contracted, considering the
conditions imposed by the President in her letter of approval, thus rendering the bids and
projections immaterial and the procedure taken ineffectual, is not supported by the
established facts. The conditions imposed by the President did not materially alter the
substance of the contract, but merely dealt on the details of its implementation.

D. The determination of whether or not the winning bidder is qualified to undertake the
contracted service should be left to the sound judgment of the PPA. The PPA, having
been tasked with the formulation of a plan for the development of port facilities and its
implementation [Sec. 6(a) (i)], is the agency in the best position to evaluate the feasibility
of the projections of the bidders and to decide which bid is compatible with the
development plan. Neither the Court, nor Congress, has the time and the technical
expertise to look into this matter.

Thus, the Court in Manuel v. Villena (G.R. No. L-28218, February 27, 1971, 37 SCRA
745] stated:

[C]ourts, as a rule, refuse to interfere with proceedings undertaken by

administrative bodies or officials in the exercise of administrative
functions. This is so because such bodies are generally better equipped
technically to decide administrative questions and that non-legal factors,
such as government policy on the matter, are usually involved in the
decisions. [at p. 750.]

In conclusion, it is evident that petitioner has failed to show a clear case of grave abuse
of discretion amounting to lack or excess of jurisdiction as to warrant the issuance of the
writ of prohibition.

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Gancayco, Bidin, Cortes, Grio-Aquino,

Medialdea and Regalado, JJ., concur.

Feliciano, J., concurs in the result.

Padilla and Sarmiento, JJ., took no part.

Separate Opinions

GUTIERREZ, JR., J., concurring:

I concur in the Court's decision that the determination of whether or not the winning
bidder is qualified to undertake the contracted service should be left to the sound
judgment of the Philippine Ports Authority (PPA). I agree that the PPA is the agency
which can best evaluate the comparative qualifications of the various bidding contractors
and that in making such evaluation it has the technical expertise which neither this Court
nor Congress possesses.

However, I would feel more comfortable in the thought that the above rulings are not only
grounded on firm legal foundations but are also factually accurate if the PPA shows
greater consistency in its submissions to this Court.

I recall that in E. Razon, Inc. v. Philippine Ports Authority (151 SCRA 233 [1977]), this
Court decided the case in favor of the PPA because, among others, of its submissions
that: (1) the petitioner therein committed violations as to outside stevedoring services,
inadequate equipment, delayed submission of reports, and non-compliance with certain
port regulations; (2) respondent Marina Port Services and not the petitioner was better
qualified to handle arrastre services; (3) the petitioner being controlled by Alfredo
Romualdez could not enter into a management contract with PPA and any such contract
would be null and void; and (4) even if the petitioner may not have shared in the illegal
intention behind the transfer of majority shares, it shared in the benefits of the violation of
law.

I was surprised during the oral arguments of the present petition to hear the counsel for
PPA submit diametrically different statements regarding the capabilities and worth of E.
Razon, Inc., as an arrastre operator. It now turns out that the Manila International
Container Terminal will depend a great deal on the expertise, reliability and competence
of E. Razon, Inc., for its successful operations. The time difference between the two
petitions is insubstantial. After going over the pleadings of the present petition, I am now
convinced that it is the submissions of PPA in this case and not its contentions in G.R.
No. 75197 which are accurate and meritorious. There is the distinct possibility that we
may have been unfair in the earlier petition because of assertions made therein which
are contradictory to the submissions in the instant petition. No such doubts would exist if
the Government is more consistent in its pleadings on such important factual matters as
those raised in these two petitions.

Separate Opinions

GUTIERREZ, JR., J., concurring:

I concur in the Court's decision that the determination of whether or not the winning
bidder is qualified to undertake the contracted service should be left to the sound
judgment of the Philippine Ports Authority (PPA). I agree that the PPA is the agency
which can best evaluate the comparative qualifications of the various bidding contractors
and that in making such evaluation it has the technical expertise which neither this Court
nor Congress possesses.

However, I would feel more comfortable in the thought that the above rulings are not only
grounded on firm legal foundations but are also factually accurate if the PPA shows
greater consistency in its submissions to this Court.

I recall that in E. Razon, Inc. v. Philippine Ports Authority (151 SCRA 233 [1977]), this
Court decided the case in favor of the PPA because, among others, of its submissions
that: (1) the petitioner therein committed violations as to outside stevedoring services,
inadequate equipment, delayed submission of reports, and non-compliance with certain
port regulations; (2) respondent Marina Port Services and not the petitioner was better
qualified to handle arrastre services; (3) the petitioner being controlled by Alfredo
Romualdez could not enter into a management contract with PPA and any such contract
would be null and void; and (4) even if the petitioner may not have shared in the illegal
intention behind the transfer of majority shares, it shared in the benefits of the violation of
law.

I was surprised during the oral arguments of the present petition to hear the counsel for
PPA submit diametrically different statements regarding the capabilities and worth of E.
Razon, Inc., as an arrastre operator. It now turns out that the Manila International
Container Terminal will depend a great deal on the expertise, reliability and competence
of E. Razon, Inc., for its successful operations. The time difference between the two
petitions is insubstantial. After going over the pleadings of the present petition, I am now
convinced that it is the submissions of PPA in this case and not its contentions in G.R.
No. 75197 which are accurate and meritorious. There is the distinct possibility that we
may have been unfair in the earlier petition because of assertions made therein which
are contradictory to the submissions in the instant petition. No such doubts would exist if
the Government is more consistent in its pleadings on such important factual matters as
those raised in these two petitions.

Footnotes

1 A "Public utility" is a business or service engaged in regularly supplying

the public with some commodity or service of public consequence such
as electricity, gas, water, transportation, telephone or telegraph service.
Apart from statutes which define the public utilities

that are within the purview of such statutes, it would be difficult to

construct a definition of a public utility which would fit every conceivable
case. As its name indicates, however, the term public utility implies a
public use and service to the public. (Am. Jur. 2d V. 64, p. 549).

2 The Public Service Act (C.A. No. 146, as amended) provides that the
term public service "includes every person that now or hereafter may
own, operate, manage, or control in the Philippines, for hire or
compensation, with general or limited clientele, whether permanent,
occasional or accidental, and done for general business purposes, any
common carrier, railroad, street railway, traction railway, subway motor
vehicle, either for freight or passenger, or both with or without fixed route
and whatever may be its classification, freight or carrier service of any
class, express service, steamboat, or steamship line, pontines, ferries,
and water craft, engaged in the transportation of passengers and freight
or both, shipyard, marine railway, refrigeration plant, canal, irrigation
system, gas, electric light, heat and power, water supply and power,
petroleum, sewerage system, wire or wireless communications system,
wire or wireless broadcasting stations and other similar public services. .
." [Sec. 13 (b).].

3 Under P.D. 857 the term dock "includes locks, cuts entrances, graving
docks, inclined planes, slipways, quays and other works and things
appertaining to any dock", while wharf "means a continuous structure
built parallel to along the margin of the sea or alongside riverbanks,
canals, or waterways where vessels may lie alongside to receive or
discharge cargo, embark or disembark passengers, or lie at rest." [Sec.
30) and (o).].

4 Examples of such agencies are:

1. The Land Transportation Franchising and Regulatory Board created
under E.O. No. 202, which is empowered to "issue, amend, revise,
suspend or cancel Certificates of Public Convenience or permits
authorizing the operation of public land transportation services provided
by motorized vehicles, and to prescribe the appropriate terms and
conditions therefor." [Sec. 5(b).].

2. The Board of Energy, reconstituted into the Energy Regulatory Board

created under E.O. No. 172, is empowered to license refineries and
regulate their capacities and to issue certificates of public convenience for
the operation of electric power utilities and services, except electric
cooperatives [Sec. 9 (d) and (e), P.D. No. 1206.].

5 Art. II, Sec. 28. Subject to reasonable conditions prescribed by law, the
State adopts and implements a policy of full disclosure of all its
transactions involving public interest.
COMMONWEALTH ACT No. 146

THE PUBLIC SERVICE LAW

(As amended, and as modified particularly by PD No. 1, Integrated Reorganization Plan

and EO 546

Section 15. With the exception of those enumerated in the preceding section, no public
service shall operate in the Philippines without possessing a valid and subsisting
certificate from the Public Service Commission known as "certificate of public
convenience," or "certificate of public convenience and necessity," as the case may be,
to the effect that the operation of said service and the authorization to do business will
promote the public interests in a proper and suitable manner.

The Commission may prescribe as a condition for the issuance of the certificate provided
in the preceding paragraph that the service can be acquired by the Republic of the
Philippines or any instrumentality thereof upon payment of the cost price of its useful
equipment, less reasonable depreciation; and likewise, that the certificate shall be valid
only for a definite period of time; and that the violation of any of these conditions shall
produce the immediate cancellation of the certificate without the necessity of any express
action on the part of the Commission.

In estimating the depreciation, the effect of the use of the equipment, its actual condition,
the age of the model, or other circumstances affecting its value in the market shall be
taken into consideration.

The foregoing is likewise applicable to any extension or amendment of certificates

actually in force and to those which may hereafter be issued, to permit to modify
itineraries and time schedules of public services, and to authorizations to renew and
increase equipment and properties.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-21061 June 27, 1968

FORTUNATO F. HALILI, petitioner,

vs.
RUPERTO CRUZ, respondent.

Amado A. Amador for petitioner.

Benjamin S. Somera for respondent.

ZALDIVAR, J.:

This is a petition for review of the decision of the Public Service Commission, in its Case
No. 61-6113, granting to respondent-appellee Ruperto Cruz a certificate of public
convenience to operate a transportation service for passengers and freight, with authority
to operate ten units on the line he applied for.

Herein respondent filed, on September 19, 1961, with the Public Service Commission an
application, praying for the grant of a certificate of public convenience to operate, under
PUB denomination, ten buses between Norzagaray (Bulacan) and Piers (Manila), via
Novaliches Road, A. Bonifacio Road, Blumentritt Street, Rizal Avenue, MacArthur Bridge,
Aduana and 13th Streets; and on the return trip, via Boston Street, MacArthur Bridge,
Rizal Avenue, Blumentritt Street, A. Bonifacio Road, and Novaliches Road. The
application was opposed by De Dios Transportation Co., Inc., Raymundo Transportation
Co., Inc., PDP Transit Inc., Villa Rey Transit, Inc., and by herein petitioner-appellant
Fortunato F. Halili who was the operator of the transportation service known as "Halili
Transit." Petitioner, in his opposition alleged, substantially, that he was an operator of a
bus service on the line applied for, enumerating at the same time the other lines he
operated which were traversed by the route mentioned in respondent's application; that
his service, as well as that of other bus operators on the route, was more than adequate
to meet the demands of the traveling public; that the grant of the application would
merely result in wasteful and ruinous competition, and that the respondent was not
financially capable of operating and maintaining the service proposed by him.

After several hearings in which the parties presented their evidence, oral and
documentary, the Public Service Commission rendered a decision, on February 13,
1963, granting a certificate of public convenience to respondent Ruperto Cruz to operate
ten buses under PUB denomination on the line Norzagaray (Bulacan) Piers (Manila)
passing through the routes applied for. The decision states, among others, as follows:

After a careful study of the evidence presented by the contesting parties, we find
the following facts established; that applicant is applying for a service from
Norzagaray to Piers and vice-versa; that not one of the oppositors herein operate
a service up to Piers most of them go up to Divisoria and the rest up to
Folgueras; that there are commuters starting from Norzagaray up to Piers; that
applicant has the experience in the operation of a PUB service and that applicant
has the means with which to operate and maintain the service herein applied for.

From the facts in evidence, this Commission is of the belief that the weight of
evidence tips in favor of the applicant.
 It appearing, therefore, that applicant is a Filipino citizen, that he is financially
capable to operate and maintain the service herein applied for, and that public
convenience and necessity will be promoted by the approval of this application,
and furthermore, that the oppositions of the oppositors herein are without merit,
the same are overruled and the instant application APPROVED.

It is the above-mentioned decision of the Public Service Commission that is now sought
to be reviewed by this Court.

Petitioner contends that:

1. "The finding of the Public Service Commission that there was a public need for
the operation by respondent of ten buses on the line of Norzagaray (Bulacan) -
Piers (Manila) is not supported by the evidence;

2. "The Public Service Commission erred when it did not recognize the fact that
petitioner-appellant was rendering sufficient and adequate service on the line in
question; and

3. "The Public Service Commission erred in failing to give petitioner-appellant the

right of protection to investment to which petitioner-appellant is entitled."

In support of his first two contentions petitioner argues that the 500 passengers found by
the Commission as commuting daily from Norzagaray to Manila could easily be
accommodated in the buses of existing operators; that the existing operators were
authorized to operate 31 buses which made around 100 round trips a day; that since a
bus could accommodate about 50 passengers, the existing authorized services could
easily accommodate not only the 500 but even 5000 passengers a day. Petitioner also
asserted that the Commission failed to consider that 200 of the 500 commuters worked in
the Republic Cement Factory located at Norzagaray and so there were really only 300
commuters daily traveling on the Norzagaray Manila line. Petitioner further claimed
that the new terminal proposed in the application was not based on actual need, because
there were no importing firms, or business establishments, or manufacturing concerns, in
Norzagaray, whose employees had to make trips to the piers at the south harbor in a
Manila. On the question of public necessity, petitioner pointed out that the evidence
presented by the respondent consisted only of the testimony of two witnesses who did
not make any formal or systematic study of the movement and frequency of public utility
buses, so that their testimonies were based only on casual observations. On the other
hand, as petitioner pointed out, the oppositors presented five witnesses, two of whom
made meticulous, systematic and daily observations on the line applied for. Petitioner
urged that according to Exhibits "1", "1-A" to "1-R", consisting of different pages of entries
in a checkbook at the various PSC checkpoints in the proposed line, buses passing the
checkpoints were carrying only from 1 to 5 passengers which fact proved that the
existing operators more than adequately served the needs of the public.

Petitioner likewise asserted that public necessity did not require the operation of the ten
buses applied for by the respondent because of the fact that on December 20, 1961, the
Public Service Commission granted to herein petitioner, in Case No. 61-5807, authority
to operate only 10 buses on the line Norzagaray Manila, even if he had applied for 20
buses; and that out of the many application to operate buses from Paradise Farms
(Bulacan) to Manila, only 10 buses were authorized.

The first two contentions of petitioner raise questions of fact. This Court has repeatedly
held that where the Public Service Commission has reached a finding, after weighing the
conflicting evidence, that public necessity and convenience warrant the operation of
additional public utility service, the finding must not be disturbed as long as there is
evidence reasonably supporting such finding.1 In reviewing the decision of the
Commission, this Court is not even required to examine the proof de novo and determine
for itself whether or not the preponderance of evidence really justifies the decision. The
only function of this Court is to determine whether or not there is evidence before the
Commission upon which its decision might reasonably be based.2

The Commission stated in its decision that "after a careful study of the evidence
presented by the contesting parties ... the Commission is of the belief that the weight of
evidence tips in favor of the application." There is evidence on record that there are
numerous students, professionals, merchants, and employees in both government and
private concerns, that commute daily between Norzagaray and Manila and the
intermediate points along the line;3 that along the same line have emerged numerous
centers of population, residential subdivisions and housing projects, industrial projects
like the Republic Cement Factory, Angat River Dam Hydro-electric Power Project, and
hollow blocks manufacturing establishments;4 that commuters experienced difficulties in
getting accommodated on buses traveling between Norzagaray and Manila; that the Villa
Rey Transit used to make two trips from Angat to Manila via Norzagaray, the La Mallorca
Pambusco also two trips from Norzagaray to Manila via Sta. Maria, and the Halili Transit
likewise two trips from Norzagaray to Manila via the Novaliches Road; that said trips
were fully loaded at Norzagaray such that many commuters from Norzagaray had to take
jeeps which brought them only up to Sta. Maria and Bocaue and there waited for other
means of transportation to bring them to Manila;5 and that commuters from Manila to
Norzagaray also had to resort to broken trips for lack of direct trips.6 We are persuaded
that the evidence in the record support the decision appealed from.

Petitioner claims that the Public Service Commission did not consider the checker's
reports (Exhs. 1, 1-A, to 1-R), on the face of which it appears that there was no
overcrowding in the buses checked at the various checkpoints. The Commission,
however, states in its decision that it had arrived at the finding "after a careful study of the
evidence presented by the contesting parties," and necessarily the evidence thus
studied included the checker's reports. But assuming, gratia argumenti, that said reports
were not considered the failure of the Commission to consider the reports would not
constitute a reversible error, because we find that the reports refer to trips of buses from
Manila to Ipo, Sapang Palay, San Jose and back, and from upland to lowland and back,
and none of the buses checked had trips along Norzagaray-Manila or Manila-Norzagaray
line. The relative weight of these checker's reports as evidence must have been
considered by the Commission before making its decision. As we have stated, the finding
of fact of the Public Service Commission is conclusive on this Court. Thus, in a case, this
Court said:

It appearing that the main issues raised by petitioner merely affect questions of
fact which by their very nature involve an evaluation of the relative weight of the
evidence of both parties, or the credibility of witnesses who testified before the
Commission, following the law and jurisprudence applicable to the matter in this
jurisdiction, said questions are now conclusive upon this Court, and cannot be
looked into, it appearing that there is sufficient evidence to support its findings.7

The claim of petitioner, that he was rendering adequate services on the line in question
as would preclude the necessity of another operator, is untenable. In the first place, as
shown in the record, petitioner does not have a direct line from Norzagaray to the Piers
the line that is applied for by respondent. In the second place, there is evidence to the
effect that oppositor Halili was authorized 48 trips between Norzagaray and
Folgueras,8 but it was making two trips only.9 This circumstance indicated that there was
shortage of transportation units or facilities, and that the line was not adequately serviced
by the petitioner. Thus, in a case concerning the non-operation of authorized units, this
Court said:
 Apart from the existence of competent evidence in support of these findings,
certain undisputed facts therein contained reveal that the assignment of error
under consideration is manifestly untenable. We refer to the circumstance that, of
the 75 buses that the Raytranco is authorized to operate in all its lines, its right
with respect to 30 has been leased, 14 to Rizman and 16 to Laguna-Tayabas
Bus Company. Again, though still entitled to operate 45 units in its remaining
lines, the Raytranco has registered only 17 buses, aside from the circumstance
that such buses are not in continuous operation. These facts lead to the
conclusion that there must be a shortage of transportation facilities in the lines
aforementioned and that the Raytranco is unable to meet fully the demands of
public convenience therein.10

Petitioner claims, in his third contention, that the Public Service Commission failed to give
him the protection that he is entitled to, being an old and established public service
operator. As a general principle public utility operators must be protected from ruinous
competition, such that before permitting a new operator to serve in a territory already
served by another operator, the latter should first be given opportunity to improve his
equipment and service. This principle, however, is subject to justifiable exceptions. The
primary consideration in the grant of a certificate of public convenience must always be
public convenience. Thus, this Court said:

While it is the duty of the government as far as possible to protect public utility
operators against unfair and unjustified competition, it is nevertheless obvious
that public convenience must have the first consideration....11

The public convenience is properly served if passengers who take buses at points in one
part of a line are able to proceed beyond those points without having to change buses.
On this point this Court said:

It is the convenience of the public that must be taken into account, other things being
equal, and that convenience would be effectuated by passengers who take buses at
points in one part of a line being able to proceed beyond those points without having to
change buses and to wait the arrival of buses of a competitive operator. We can perceive
how under such conditions one public utility could gain business at the expense of a
rival.12

In the instant case, public convenience would be properly served if commuters from
Norzagaray going to the Piers in Manila could go to their destination without the need of
changing buses. Certainly the Public Service Commission has power to grant a certificate
of public convenience to a new operator, and the old operator cannot with reason
complain that it had not been given opportunity to improve its equipment and service, if it
is shown that the old operator has not placed in the service all the units of equipment that
it had been authorized to operate, and also when the old operator has violated, or has
not complied with, important conditions in its certificate. 13 In the instant case, it has
been shown that petitioner had not operated all the units that it was authorized to
operate.

IN VIEW OF THE FOREGOING, the decision of the Public Service Commission, sought
to be reviewed, is affirmed; with costs against petitioner-appellant. It is so ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Sanchez, Castro, Angeles and
Fernando, JJ., concur.

Footnotes
1
Red Line Transportation Co., Inc. vs. Matias Santo Tomas, G. R. No. L-18472,
January 30, 1967; La Mallorca and Pampanga Bus Co., Inc. vs. Mercado, G.R.
No. L-19120, November 29, 1965; Halili vs. Dallas, G. R. No. L-20282, May 19,
1965; La Mallorca and Pampanga Bus Co., Inc. vs. Mendiola, G.R. No. L-19558,
November 28, 1963; MD Transit & Taxi Co., Inc. vs. Pepito, G. R. No. L-16481,
September 29, 1962; Pineda vs. Carandang, G.R. Nos. L-13279-71, March 24,
1960.

2Pineda vs. Carandang, Nos. L-13270-71, March 24, 1960; La Mallorca and
Pampanga Bus Co., Inc. vs. Mendiola, L-19558, November 29, 1963; Del Pilar
Transit, Inc. vs. Silva, et al., L-21547, July 15, 1966.

3T.S.N., April 18, 1962. pp. 25-31; July 25, 1962, pp. 45-51; July 31, 1962; pp.
63-66, 73-76; August 17, 1962, p. 219.

4 T.S.N., April 18, 1962, pp. 27-28, 30-31; October 2, 1962; pp. 171-172.

5T.S.N., April 18, 1962, pp. 22-27; July 31, 1962, pp. 64-66; November 7, 1962,
pp. 220-221.

6
T.S.N., November 7, 1962, p. 220.

MD Transit and Taxi Co., Inc. vs. Santiago Pepito, G. R. No. L-16481,
7

September 29, 1962.

8 T.S.N., October 2, 1962, pp. 395-398.

9 T. S. N., April 18, 1962, p. 271.

Zarate, et al. vs. Rizal-Manila Transit Co., G.R. Nos. L-11300 and L-11301,
10

May 29, 1959.

11 Raymundo Transportation Co. vs. Perez, 56 Phil. 274.

Mindanao Bus Co. vs. Paradies, G. R. No. 38442 (1933); 58 Phil. 970. (See
12

Pangasinan Transportation Co. vs. Manila Railroad Co., 60 Phil. 617, 621.)

Mirasol Transportation Co., Inc. vs. Negros Travelways Corporation and Matus,
13

64 Phil. 317.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-28865 December 19, 1928

BATANGAS TRANSPORTATION CO., petitioner-appellant,

vs.
CAYETANO ORLANES, respondent-appellee.

L. D. Lockwood and C. de G. Alvear for appellant.

Paredes, Buencamino and Yulo and Menandro Quiogue for appellee.

STATEMENT

In his application for a permit, the appellee Orlanes alleges that he is the holder of a
certificate of public convenience issued by the Public Service Commission in case No.
7306, to operate an autobus line from Taal to Lucena, passing through Batangas, Bolbok
and Bantilan, in the Province of Batangas, and Candelaria and Sariaya, in the Province
of Tayabas, without any fixed schedule; that by reason of the requirements of public
convenience, he has applied for a fixed schedule from Bantilan to Lucena and return;
that in case No. 7306, he cannot accept passengers or cargo from Taal to any point
before Balbok, and vice versa; that the public convenience requires that he be converted
into what is known as a regular operator on a fixed schedule between Taal and Bantilan
and intermediate points, and for that purpose, he has submitted to the Commission
proposed schedule for a license to make trips between those and intermediate points. He
then alleges that by reason of increase of traffic, the public convenience also requires
that he be permitted to accept passengers and cargo at points between Taal and
Bantilan, and he asked for authority to establish that schedule, and to accept passengers
at all points between Taal and Bantilan.

To this petition the Batangas Transportation Company appeared and filed an application
for a permit, in which it alleged that it is operating a regular service of auto trucks
between the principal municipalities of the Province of Batangas and some of those of
the Province of Tayabas; that since 1918, it has been operating a regular service
between Taal and Rosario, and that in 1920, its service was extended to the municipality
of San Juan de Bolbok, with a certificate of public convenience issued by the Public
Servise Commission; that in the year 1925 Orlanes obtained from the Commission a
certificate of public convenience to operate an irregular service of auto trucks between
Taal, Province of Batangas, and Lucena, Province of Tayabas, passing through the
municipalities of Bauan, Batangas, Ibaan, Rosario, and San Juan de Bolbok, with the
express limitation that he could not accept passengers from intermediate points between
Taal and Bolbok, except those which were going to points beyond San Juan de Bolbok or
to the Province of Tayabas; that he inaugurated this irregular in March, 1926, but
maintained it on that part of the line between Taal and Bantilan only for about three
months, when he abandoned that portion of it in the month of June and did not renew it
until five days before the hearing of case No. 10301, which was set for November 24,
1926, in which hearing the Batangas Transportation Company asked for additional hours
for its line between Batangas and Bantilan; that in June, 1926, Orlanes sought to obtain a
license as a regular operator on that portion of the line between Bantilan and Lucena
without having asked for a permit for tat portion of the line between Bantilan and Taal;
that from June, 1926, Orlanes and the Batangas Transportation Company were jointly
operating a regular service between Bantilan and Lucena, with trips every half an hour,
and Orlanes not having asked for a regular service between Bantilan and Taal, the
Batangas Transportation Company remedied this lack of service under the authority of
the Commission, and increased its trips between Bantilan and Tayabas to make due and
timely connections in Bantilan on a half-hour service between Bantilan and Batangas
with connections there for Taal and all other points in the Province of Batangas. It is then
alleged that the service maintained by the company is sufficient to satisafy the
convenience of the public, and that the public convenience does not require the granting
of the permit for the service which Orlanes petitions, and that to do so would result in
ruinous competition and to the grave prejudice of the company and without any benefit to
the public, and it prayed that the petition of Orlanes to operate a regular service be
denied.

After the evidence was taken upon such issues, the Public Service Commission granted
the petition of Orlanes, as prayed for, and the company then filed a motion for a
rehearing, which was denied, and the case is now before this court, in which the
appellant assigns the following errors:

The Commission erred in ordering that a certificate of public convenience be

issued in favor of Cayetano Orlanes to operate the proposed service without
finding and declaring that the public interest will be prompted in a proper and
suitable by the operation of such service, or when the evidence does not show
that the public interests will be so prompted.

That the Commission erred in denying the motion for a rehearing.

JOHNS, J.:

The questions presented involve a legal construction of the powers and duties of the
Public Service Commission, and the purpose and intent for which it was created, and the
legal rights and privileges of a public utility operating under a prior license.

It must be conceded that an autobus line is a public utility, and that in all things and
respects, it is what is legally known as a common carrier, and that it is an important factor
in the business conditions of the Islands, which is daily branching out and growing very
fast.

Before such a business can be operated, it must apply for, and obtain, a license or permit
from the Public Service Commission, and comply with certain defined terms and
conditions, and when license is once, granted, the operator must conform to, and comply
with all, reasonable rules and regulations of the Public Service Commission. The object
and purpose of such a commission, among other things, is to look out for, and protect,
the interests of the public, and, in the instant case, to provide it with safe and suitable
means of travel over the highways in question, in like manner that a railroad would be
operated under like terms and conditions. To all intents and purposes, the operation of
an autobus line is very similar to that of a railroad, and a license for its operation should
be granted or refused on like terms and conditions. For many and different reasons, it
has never been the policy of a public service commission to grant a license for the
operation of a new line of railroad which parallels and covers the same field and territory
of another old established line, for the simple reason that it would result in ruinous
competition between the two lines, and would not be of any benefit or convenience to the
public.
The Public Service Commission has ample power and authority to make any and all
reasonable rules and regulations for the operation of any public utility and to enforce
complience with them, and for failure of such utility to comply with, or conform to, such
reasonable rules and regulations, the Commission has power to revoke the license for its
operation. It also has ample power to specify and define what is a reasonable
compensation for the services rendered to the traveling public.

That is to say, the Public Service Commission, as such has the power to specify and
define the terms and conditions upon which the public utility shall be operated, and to
make reasonable rules and regulations for its operation and the compensation which the
utility shall receive for its services to the public, and for any failure to comply with such
rules and regulations or the violation of any of the terms and conditions for which the
license was granted the Commission has ample power to enforce the provisions of the
license or even to revoke it, for any failure or neglect to comply with any of its terms and
provisions.

Hence, and for such reasons, the fact that the Commission has previously granted a
license to any person to operate a bus line over a given highway and refuses to grant a
similar license to another person over the same highway, does not in the least create a
monopoly in the person of the licensee, for the reason that at all times the Public Service
Commission has the power to say what is a reasonable compensation to the utility, and
to make reasonable rules and regulations for the convenience of the traveling public and
to enforce them.

In the instant case, Orlanes seek to have a certificate of public convenience to operate a
line of auto trucks with fixed times of departure between Taal and Bantilan, in the
municipality of Bolbok, Province of Batangas, with the right to receive passengers and
freight from intermediate points. The evidence is conclusive that at the time of his
application, Orlanes was what is known as an irregular operator between Bantilan and
Taal, and that the Batangas operator between Batangas and Rosario. Orlanes now
seeks to have his irregular changed into a regular one, fixed hours of departure and
arrival between Bantilan and Taal, and to set aside and nullify the prohibition against him
in his certificate of public convenience, in substance and to the effect that he shall not
have or receive any passengers or freight at any of the points served by the Batangas
Transportation Company for which that company holds a prior license from the
Commission. His petition to become such a regular operator over such conflicting routes
is largely based upon the fact that, to comply with the growing demands of the public, the
Batangas Transportation Company, in case No. 10301, applied to the Commission for a
permit to increase the number of trip hours at and between the same places from
Batangas to Rosario, and or for an order that all irregular operators be prohibited from
operating their respective licenses, unless they should observe the interval of two hours
before, or one hour after, the regular hours of the Batangas Transportation Company.

In his petition Orlanes sought to be releived from his prohibition to become a regular
operator, and for a license to become a regular operator with a permission to make three
trips daily between Bantilan and Taal, the granting of which make him a regular operator
between those points and bring him in direct conflict and competition over the same
points with the Batangas Transportation Company under its prior license, and in legal
effect that was the order which the Commission made, of which the Batangas
Transportation Company now complains.

The appellant squarely plants its case on the proposition:

Is a certificate of public convenience going to be issued to a second operator to

operate a public utility in a field where, and in competition with, a first operator
who is already operating, adequate and satisfactory service?
There is no claim or pretense that the Batangas Transportation Company has violated
any of the terms and conditions of its license. Neiher does the Public Service
Commission find as a fact that the grantring of a license to Orlanes as a regular operator
between the points in question is required or necessary for the convenience of the
traveling public, or that there is any complaint or criticism by the public of the services
rendered by the Batangas Transportation Company over the route in question.

The law creating the Public service Commission of the Philippine Islands is known as Act
No. 3108, as amended by Act No. 3316, and under it the supervision and control of
public utilities is very broad and comprehensive.

Section 15 of Act No. 3108 provides that the Commission shall have power, after
hearing, upon notice, by order in writing to require every public utility:

(a) To comply with the laws of the Philippine Islands;

(b) To furnish safe, adequate, and proper service as regards the manner of furnishing the
same as well as the maintenance of the necessary material equipment, etc;

(c) To establish, construct, maintain, and operate any reasonable extention of its existing
facilities, where such extension is reasonable and practicable and will furnish sufficient
business to justify the construction and maintenance of the same;

(d) To keep a uniform system of books, records and accounts;

(e) To make specific answer with regard to any point on which the Commission requires
information, and to furnish annual reports of finance and operations;

(f) To carry, whenever the Commission may require, a proper and adequate depreciation
account;

(g) To notify the Commission of all accidents;

(h) That when any public utility purposes to increase or reduce any existing individual
rates, it shall give the Commission written notice thirty days prior to the proposed change;
and

(i) "No public utility as herein defind shall operate in the Philippine Islands without having
first secured from the Commission a certificate, which shall be known as Certificate of
Public Convenience, to the effect that the operation of said public utility and the
authorization to do busibness wikll promote the public interest in a proper and suitable
maner."

Section 16 specially prohibits any discrimination in the handling of freight charges.

In construing a similar law of the State of Kansas, the United States Supreme Court, in
an opinion written by Chief Justice Taft, in Wichita Railroad and Light Co. vs. Public
Utilities Commission of Kansas (260 U. S. 48; 67 Law. ed., 124), said:

The proceeding we are considering is governed by section 13. That is the general
section of the act comprehensively describing the duty of the Commission,
vesting it with power to fix and order substituted new rates for existing rates. The
power is expressly made to depend on the condition that, after full hearing and
investigation, the Commission shall find existing rates to be unjust, unreasonable,
unjustly discriminatory, or unduly preferential. We conclude that a valid order of
 the Commission under the act must contain a finding of fact after hearing and
investigation, upon which the order is founded, and that, for lack of such a
finding, the order in this case was void.

This conclusion accords with the construction put upon similar statutes in other
states. (State Public Utilities Commission ex rel. Springfield vs. Springfield Gas
and E. Co., 291 Ill., 209; P. U. R., 1920C, 640; 125 N. E. 891; State Public
Utilities Co. vs. Baltimore and O. S. W. R. Co., 281 Ill; 405; P. U. R., 1918B, 655;
118 N. E., 81.) Moreover, it accords with general principles of constitutional
government. The maxim that a legislature may not delegate legislative power has
some qualifications, as in the creation of municipalities, and also in the creation of
administrative boards to apply to the myriad details of rate schedule the
regulatory police power of the state. The latter qualification is made necessary in
order that the legislative power may be effectively exercised. In creating such an
administrative agency, the legislature, to prevent its being a pure delegation of
legislative power, must enjoin upon a certain course of procedure and certain
rules of decision in the perfomance of its function. It is a wholesome and
necessary principle that such an agency must pursue the procedure and rules
enjoined, and show a substantial compliance therewith, to give validity to its
action. When, therefore, such an administrative agency is required, as a condition
precedent to an order, to make a finding of facts, the validity of the order rest
upon the needed finding. It is lacking, the order is ineffective.

It is pressed on us that the lack of an express finding may be supplied by

implication and by reference to the averments of the petition invoking the action
of the Commission. We cannot agree to this point. It is doubtful whether the facts
averred in the petition were sufficient to justify a finding that the contract rates
were unreasonably low; but we do not find it necessay to answer this question.
We rest our decision on the principle that an express finding of unreasonableness
by the Commission was indispensable under the statutes of the state.

That is to say, in legal effect, that the power of the Commission to issue a certificate of
public convenience depends on the condition precedent that, after a full hearing and
investigation, the Commission shall have found as a fact that the operation of the
proposed public service and its authority to do business must be based upon the finding
that it is for the convenience of the public.

In the Philippine Islands the cetificate of public convenience is as folows:

CERTIFICATE OF PUBLIC CONVENIENCE

To whom it may concern:

THIS IS TO CERTIFY, That in pursuance of the power and authority conferred

upon it by subsection (i) of section 15 of Act No. 3108 of the Philippine
Legislature,

THE PUBLIC SERVICE COMMISSION OF THE PHILIPPINE ISLANDS, after

having duly considered the application of ................. for a certificate of public
convenience the operation of ........................ in connection with the evidence
submitted in support thereof, has rendered its decision on................, 192...., in
case No. ............, declaring that the operation by the applicant ...................... of
the business above described will promote the public interests in a proper and
 suitable manner, and granting................. to this effect the corresponding
authority, subject to the conditions prescribed in said decision.

Given at Manila Philippine Islands, this ......... day of ....................., 192 .....

PUBLIC SERVICE COMMISSION OF THE PHILIPPINE ISLANDS

By..................................
Commissioner

Attested:
.....................................
Secretary

That is to say, that the certificate of public convenince granted to Orlanes in the instant
case expressly recites that it "will promote the public interests in a proper and suitable
manner." Yet no such finding of fact was made by the Commission.

In the instant case, the evidence is conclusive that the Batangas Transportation
Company operated its line five years before Orlanes ever turned a wheel, yet the legal
effect of the decision of the Public Service Commission is to give an irregular operator,
who was the last in the field, a preferential right over a regular operator, who was the first
in the field. That is not the law, and there is no legal principle upon which it can be
sustained.

So long as the first licensee keeps and performs the terms and conditions of its license
and complies with the reasonable rules and regulations of the Commission and meets
the reasonable demands of the public, it should have more or less of a vested and
preferential right over a person who seeks to acquire another and a later license over the
same route. Otherwise, the first license would not have protection on his investment, and
would be subject to ruinous competition and thus defeat the very purpose and intent for
which the Public Service Commission was created.

It does not appear that the public has ever made any complaint the Batangas
Transportation Company, yet on its own volition and to meet the increase of its business,
it has applied to the Public Service Commission for authority to increase the number of
daily trips to nineteen, thus showing a spirit that ought to be commended.

Such is the rule laid down in the case of Re B. F. Davis Motor Lines, cited by the Public
Service Commission of Indiana (P. U. R., 1927-B, page 729), in which it was held:

A motor vehicle operator having received a certificate with a voluntary stipulation

not to make stops (that is not to carry passengers) on a part of a route served by
other carriers, and having contracted with such carries not to make the stops, will
not subsequently are able to carry all passengers who present theselves for
transportation within the restricted district.

And in Re Mount Baker Development Co., the Public Service Commission of Washington
(P. U. R., 1925D, 705), held:

A cerificate authorizing through motor carrier service should not authorize local
service between points served by the holders of a certificate, without first giving
the certificate holders an opportunity to render additional service desired.
In the National Coal Company case (47 Phil., 356), this court said:

When there is no monopoly. There is no such thing as a monopoly where a

property is operated as a public utility under the rules and regulations of the
Public Utility Commission and the terms and provision of the Public Utility Act.

Section 775 of Pond on Public Utilities, which is recognized as a standard authority,

states the rule thus:

The policy of regulation, upon which our present public utility commission plan is
based and which tends to do away with competition among public utilities as they
are natural monopolies, is at once reason and the justification for the holding of
our courts that the regulation of an existing system of transportation, which is
properly serving a given field, or may be required to do so, is to be preferred to
competition among several independent systems. While requiring a proper
service from, a single system for a city or territory in consideration for protecting it
as a monopoly for all service required and in conserving its resources, no
economic waste results and service may be furnished at the minimum cost. The
prime object and real purpose of commission control is to secure adequate
sustained service for the public at the least possible cost, and to protect and
conserve investments already made for this purpose. Experience has
demonstrated beyond any question that competition among natural monopolies is
wasteful economically and results finally in insufficient and unsatisfactory service
and extravagant rates.

The rule has been laid down, without dissent in numerous decisions, that where an
operator is rendering good, sufficient and adequate service to the public, that the
convenince does not require and the public interests will not be promoted in a proper and
suitable manner by giving another operator a certificate of public convenience to operate
a competing line over the same ruote.

In Re Haydis (Cal.), P. U. R., 1920A, 923:

A certificate of convenience and necessity for the operation of an auto truck line
in occupied territory will not be granted, where there is no complaint as to existing
rates and the present company is rendering adequate service.

In Re Chester Auto Bus Line (Pa.), P. U. R., 1923E, 384:

A Commission should not approve an additional charter and grant an additional

certificate to a second bus company to operate in territory covered by a certificate
granted to another bus company as a subsidiary of a railway company for
operation in conjunction with the trolley system where one bus service would be
ample for all requirements.

In Re Branham (Ariz.), P. U. R., 1924C, 500:

A showing must be clear and affirmative that an existing is unable or has refused
to maintain adequate and satisfactory service, before a certificate of convenience
and necessity will be granted for the operation of an additional service.

In Re Lambert (N. H.), P. U. R., 1923D, 572:

Authority to operate a jitney bus should be refused when permision has been
given to other parties to operate and, from the evidence, they are equipped
 adequately to accommodate the public in this respect, no complaints having been
received in regard to service rendered.

In Re White (Md.), P. U. R., 1924E, 316:

A motor vehicle operator who has built up a business between specified points
after years of effort should not be deprived of the fruits of his labor and of the
capital he has invested in his operation by a larger concern desiring to operate
between the same points.

In Re Kocin (Mont.), P. U. R., 1924C, 214:

A certificate authorizing the operation of passenger motor service should be

denied where the record shows that the admission of another operator into the
territory served by present licensees is not necessary and would render their
licensee oppressive and confiscatory because of further division and depletion of
revenues and would defeat the purpose of the statue and disorganize the public
service.

In Re Nevada California Stage Co., P. U. R., 1924A, 460:

The Nevada Commission denied an application for a certificate of convenience

and necessity for the operation of an automobile passenger service in view of the
fact that the service within the territory proposed to be served appeared to be
adequate and it was the policy of the Commission to protect the established line
in the enjoyment of business which it had built, and in view of the further fact that
it was very uncertain whether the applicant could secure sufficient business to
enable him to operate profitably.

In Re Idaho Light & P. Co. (Idaho), P. U. R., 1915A, 2:

Unless it is shown that the utility desiring to enter a competitive field can give
such service as will be a positive advantage to the public, a certificate of
convenience will be denied by the Idaho Commission, provided that the existing
utility furnishing adequate service at reasonable rates at the time of the
threatened competition.

In Scott, vs. Latham (N. Y. 2d Dist), P. U. R., 1921C, 714:

Competition between bus lines should be prohibited the same as competition

between common carriers.

In Re Portland Taxicab Co. (Me.), P. U. R., 1923E, 772:

Certificates permitting the operation of motor vehicles for carrying passengers for
hire over regular routes between points served by steam and electric railways
should not be granted when the existing service is reasonable, safe, and
adequate as required by statue.

In Re Murphy (Minnesota), P.U.R., 1927C, 807:

Authority to operate an auto transportation service over a route which is served

by another auto transportation company should be denied if no necessity is
shown for additional service.
In Re Hall, editorial notes, P. U. R., 1927E:

A certificate of convenience and necessity for the operation of a motor carrier

service has been denied by the Colorado Commission where the only ground
adduced for the certificate was that competition thereby afforded to an existing
utility would benefit the public by lowering rates. The Commission said: "Up to the
present time the Commission has never issued a certificate authorizing a
duplication of motor vehicle operation over a given route unless it appeared that
the service already rendered was not adequate, that there was no ruinous
competition or that the second applicant could, while operating on a sound
businesslike basis, afford transportation at cheaper rates than those already in
effect. There has been no complaint to date as to the rates now being charged on
the routes over which the applicant desires to serve. Moreover, the Commission
stand ready, at any time the unreasonable of the rates of any carrier are
questioned, to determine their reasonableness and to order them reduced if they
are shown to be unreasonable." In this case the Commission also expressed its
disappoval of the practice of an applicant securing a certificate for the sole
purpose of transferring it to another.

In Re Sumner (Utah), P. U. R., 1927D, 734:

The operation of an automobile stage line will not be authorized over a route
adequately served by a railroad and other bus line, although the proposed
service would be an added convenience to the territory.

In Bartonville Bus Line vs. Eagle Motor Coach Line (Ill. Sup. Court), 157 N. E., 175; P. U.
R., 1927E, 333:

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

Upon the question of "Reason and Rule for Regulation," in section 775, Pond says:

The policy of regulation, upon which our present public utility commission plan is
based and which tends to do away with competition among public utilities as they
are natural monopolies, is at once the reason and the justification for the holding
of our courts that the regulation of an existing system of transportation, which is
properly serving a given field or may be required to do so, is to be preferred to
competition among several independent systems. While requiring a proper
service from a single system for a city or territory in consideration for protecting it
as a monopoly for all the service required and in conserving its resources, no
economic waste results and service may be furnished at the minimum cost. The
prime object and real purpose of commission control is to secure adequate
sustained service for the public at the least possible cost, and to protect and
conserve investments already made for this purpose. Experience has
demostrated beyond any question that competition among natural monopolies is
wasteful economically and results finally in insufficient and unsatisfactory service
and extravagant rates. Neither the number of the individuals demanding other
service nor the question of the fares constitutes the entire question, but rather
what the proper agency should be to furnish the best service to the public
generally and continuously at the least cost. Anything which tends to cripple
seriously or destroy an established system of transportation that is necessary to a
community is not a convenience and necessity for the public and its introduction
would be a handicap rather than a help ultimately in such a field.
That is the legal construction which should be placed on paragraph (e) of section 14, and
paragraph (b) and (c) of section 15 of the Public Service Law.

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

The question presented is very important and far-reaching and one of first impression in
this court, and for such reasons we have given this case the careful consideration which
its importance deserves. The Government having taken over the control and supervision
of all public utilities, so long as an operator under a prior license complies with the terms
and conditions of his license and reasonable rules and regulation for its operation and
meets the reasonable demands of the public, it is the duty of the Commission to protect
rather than to destroy his investment by the granting of a subsequent license to another
for the same thing over the same route of travel. The granting of such a license does not
serve its convenience or promote the interests of the public.

The decision of the Public Service Commission, granting to Orlanes the license in
question, is revoked and set aside, and the case is remanded to the Commission for
such other and further proceedings as are not inconsistent with this opinion. Neither party
to recover costs on this appeal. So ordered.

Johnson, Street, Malcolm and Ostrand, JJ., concur.

Separate Opinions

ROMUALDEZ, J., dissenting:

I believe the Public Service Commission had jurisdiction to try this case and that there is
sufficient evidence of record to sustain the appealed judgment. However, I think there
sould be no conflict between trip hours, and that the Commission could do away with it by
making the necessary arrangements.

Villa-Real, J., concur.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-24701 December 16, 1970

INTESTATE TESTATE OF TEOFILO M. TIONGSON, petitioner,

vs.
THE PUBLIC SERVICE COMMISSION and MARIO Z. LANUZA, respondents.

Graciano C. Regala and Associates for petitioner.

E. R. Castro and D. A. Guzman for respondents.

MAKALINTAL, J.:

On May 11, 1965 the Public Service Commission decided its Case No. 124626,
approving the application of Mario Z. Lanuza for a certificate of public convenience to
install and operate a 20-ton daily capacity ice-plant in Pagsanjan, Laguna, and to sell the
ice to be produced in said municipality as well as in the municipalities of Longos, Paete,
Pakil, Pangil, Siniloan, Famy, Sta. Maria, Cavinti, Magdalena, Majayjay, Nagcarlan,
Rizal, Lilio, Sta. Cruz, Lumban, Pila and Victoria, all in the province of Laguna.

Three existing operators had opposed the application. One of them, Victorino de Pea,
who has an ice-plant in Mauban, Quezon, withdrew his opposition after the applicant
excluded the municipality of Luisiana from the territory originally applied for. Another
oppositor, Emilio Gomez, did not appeal from the decision of the Public Service
Commission. The petitioner here, the Estate of Teofilo M. Tiongson, remains the only
oppositor in the present appeal.

The petitioner is the grantee of a certificate of public convenience to maintain and

operate a 30-ton (increased to 40 tons in 1960 and then to 70 tons in 1964) ice plant in
San Pablo City, with authority to sell ice therein as well as in the municipalities of Sta.
Cruz, Rizal, Nagcarlan, Calauan, Victoria, Pila, Lumban, Paete, Pakil, Pangil, Cavinti,
Siniloan and Alaminos.

There is no question as to the applicant's financial capacity. The principal issue is

whether there is sufficient need for ice in the places stated in the decision to justify the
establishment of a plant in Pagsanjan with the daily capacity authorized by the
Commission. This issue is essentially one of fact on which, as a rule, the findings of the
Commission are binding on this Court unless it clearly appears that there is no evidence
to reasonably support them. 1 Such findings in this case, and the conclusion derived
therefrom, are as follows:
At one of the hearings of this case, applicant, a businessman and Filipino
citizen, manifested that at present there is no ice plant in Pagsanjan,
Laguna; that there was formerly one in that municipality but it was
transferred to San Pablo City; that the nearest ice plant is located in
Kalayaan (Longos, Laguna) which is about 10 kilometers from
Pagsanjan, Laguna; that there is a demand for ice by the people of
Pagsanjan and of the towns proposed to be served by the applicant
because the present supply of ice coming from ice plant operators and
distributed by ice dealers is inadequate; that in the territory proposed to
be served by applicant, ice is needed for "halo-halo," for cooling soft
drinks and drinking water, and for the preservation of the fish caught by
fishermen; that aside from these refreshment parlors, there are "sari-sari"
stores selling soft drinks; that along Laguna de Bay from Lumban to Sta.
Maria, Laguna, from 30% to 50% of the people are engaged in fishing
throughout the year; that fishes caught consist of "dalag," "hito," "carpa",
"banak," and "shrimps" and to preserve these fishes from the time they
are caught until they are sold or disposed of, ice is needed; that ice is
also needed in movie houses where soft drinks are sold, in homes, clinics
and hospitals that in a small town where there are about 20 stores, about
6 blocks of ice of 300 lbs. each are consumed during the day, and in a big
town like Sta. Cruz, the consumption is about 20 blocks of ice of 300 lbs.
each during the rainy season and the consumption is about double during
the dry season; and that due to the inadequacy of ice supply in the towns
proposed to be served by applicant, an ice block of ice of 300 lbs. costs
from P5.00 to P8.00.

xxx xxx xxx

Applicant presented the following witnesses: Manuel Zaide, a fish dealer

of Paete, Laguna; Willie Limlengco, a businessman and sari-sari store
owner of Pagsanjan Laguna; Conrado Almario, a refreshment parlor and
sari-sari store owner of Lumban, Laguna; Alfonso Rebong, Municipal
Mayor of Victoria, Laguna; and Ernesto Marina, business (sic) and sari-
sari store owner of Pila, Laguna.

All witnesses presented at the hearings of this case manifest that there is
shortage of ice supply in the territory proposed to be served by the
applicant, especially during summer months; that the fish dealers do not
get their ice requirements so that most often fish are not preserved in ice
when sent to other places to be sold like Sta. Maria, San Pablo City, or
Manila; and that when the ice supply is inadequate, shrimps which are
shipped to Manila are often cooked to minimize spoilage.

The oppositors to this application have not established to the satisfaction

of the Commission the adequacy of the service rendered by them in the
eighteen (18) municipalities proposed to be served by the applicant,
considering that most of these municipalities are far from the locations of
their ice plants.

After a thorough examination of the evidence submitted by the parties

and after a careful consideration of our records on existing service in the
territory applied for, and considering that an ice plant which manufactures
its ice in the locality where it sells that commodity is more advantageous
and convenient to the general public in that locality than ice plant located
some kilometers away, and that applicant is financially capable of
undertaking the installation, and maintaining the operation of the
proposed service, the Commission believes that the oppositions filed by
 Emilio Gomez, operator of an ice plant in San Juan, Longos, Laguna, and
Teofilo Tiongson, operator of an ice plant in San Pablo City, in this case
should be, as these are hereby overruled and that the application herein
filed may be, as it is hereby, APPROVED.

The foregoing findings are assailed on two grounds: (1) that only eight witnesses were
presented by the applicant, who individually testified as to the need for ice in each of only
seven of the municipalities included in the application; and (2) that their testimony even
as to those referred to by them is deficient. We have gone over the record in this regard
and found enough support therein for the decision appealed from. Manuel Zaide is a fish
dealer in Paete, Willie Limlengco is a sari-sari and refreshment store-owner in
Pagsanjan; Conrado Almario has a similar business in Lumban; Alfonso Rebong was the
municipal mayor of Victoria since 1960; Ernesto Marina is a businessman in Pila; Jose
Acuiza is a businessman and fisherman in Pakil; Jose Maceda was the municipal
secretary of Pagsanjan; and Eligio Lorenzo is a grocery merchant in Sta. Cruz. They all
affirmed the inadequacy and frequent lack of ice supply in their respective localities not
only for home consumption but also for restaurants and refreshment parlors as well as for
the fishing industry or occupation of the inhabitants, particularly in the regions bordering
Laguna Bay. It is true their combined testimony did not cover all the municipalities
applied for, but the applicant himself, respondent here, demonstrated sufficient familiarity
with the entire area to be able to give evidence, as he did, on the ice-supply situation in
everyone of them. He did a lot of traveling as owner of three movie houses in Pagsanjan,
Sta. Cruz and Pila, and in connection with his application in this case personally
conducted a thorough investigation of the local demands for ice in the municipalities
covered by said application. That he is the applicant does not necessarily affect his
credibility; on the contrary, such an investigation was necessary and called for by sound
business policy, for no one would invest capital in the production and sale of any
commodity without first ascertaining the needs of the prospective market.

One significant fact may be noted insofar as the petitioner's existing ice plant in San
Pablo is concerned. The petitioner formerly operated another plant in Pagsanjan, and in
each of them it had one delivery truck to service the customers in different municipalities.
The Pagsanjan plant, however, was closed in 1952 and transferred to San Pablo, and
since then the petitioner has been maintaining only one delivery-truck service, with a
single dealer-employee in charge. Under the circumstances the Public Service
Commission correctly remarked that "the oppositors have not established ... the
adequacy of the service rendered by them in the eighteen (18) municipalities proposed to
be served by the applicant, considering that most of these municipalities are far from the
locations of their ice-plants.

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

On the whole, we find no reason to deviate from the rule heretofore consistently applied
that findings and conclusions of fact made by the Public Service Commission, when
supported by evidence, are binding upon this Court.
WHEREFORE, the decision appealed is affirmed, with costs against the petitioner.

Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo and Villamor, JJ.,
concur.

Concepcion, C. J., took no part.

Dizon and Makasiar, JJ., are on leave.

Footnotes

1 RC Ledesma vs. PSC, L-26900, Feb. 27, 1970, 31 SCRA 805; and
cases cited.

2 Phil. Long Distance Telephone Company vs. City of Davao, L-23080,

September 20, 1965.