G.R. Nos. L-39902, L-39903 November 29, 1933 disclaim any interest in this certificate.
disclaim any interest in this certificate. Therefore, the question to be decided on this appeal is, which of the two
DOMINADOR RAYMUNDO, Petitioner-Appellant, vs. LUNETA MOTOR CO., ET AL., respondents-appellees.
A.M. Zarate for appellant.
Jose Agbulos for appellee Luneta Motor Co.
No appearance for the other appellee.
MALCOLM, J.:
The question squarely raised in these concerns the forced sales of certificates of public convinced held by public
service operators and the liability to execution of such certificates.chanroblesvirtualawlibrary chanrobles virtual
law library
Breaking into the narration of the facts at the proper point, we find Nicanor de Guzman, signing as Guzco Transit,
purchasing trucks from the Luneta Motor Co. and to pay for them executing a series of promissory notes
guaranteed by a chattel mortgage on several trucks. On failure of De Guzman or Guzco Transit to pay the
promissory notes, suit was brought in the Court of First Instance of Manila for the collection of the amount
outstanding and unpaid. When the complaint was presented, a writ of attachment was obtained against the
properties of the Guzco Transit, and as a consequence garnishment was served on the Secretary of the Public
Service Commission attacking the right, title, and participation of the Guzco Transit in the certificates of public
convenience issued in cases Nos. 25635, 23914 and 24255 covering the bus transportation lines between Manila
and Cardona, Rizal, and between Manila and Pililla, Rizal. These certificates were ordered sold by the Court of First
Instance of Manila, and in fact the certificates of public convenience Nos. 25635 and 23914 were sold to the Luneta
Motor Co. as the highest bidder. The approval of the sheriff's sale was prayed for before the Public Service
Commission, and is one of the cases under review.chanroblesvirtualawlibrary chanrobles virtual law library
Going back a moment, it is necessary to insert in the statement of facts that on July 16, 1932, or nine days after
the certificates were attached by the Luneta Motor Co., the same certificates, together with certificate No. 25951
and several trucks, were sold by De Guzman for the Guzco Transit to Dominador Raymundo. The approval of this
sale was sought from the Public Service commission, and is the other case now under review. On the two cases
being heard together, the commission in its decision approved the sale at public auction in favor of the Luneta
Motor Co., and disapproved the sale made to Dominador Raymundo, reserving to Raymundo the right to present
another petition for the approval of the sale of certificate of public convenience No. 25951 which was not included
in the sale in favor of the Luneta Motor Co.chanroblesvirtualawlibrary chanrobles virtual law library
Sweeping incidental matters to one side, the prime question need not be complicated by determining if a sale of
a certificate of public convenience without any equipment may be the object of execution and garnishment sale,
for this is matter of policy to be determined by the Public Service Commission, and it appears that sale of
certificates of public convenience without equipment have been approved by the commission. Also it is evident
that the articles of incorporation of the Luneta Motor Co. are broad enough in scope to authorize the company, if
it so desires, to engage in the autotruck business, and if not, there would be nothing to preclude the company
from transferring the certificates to a third party with the approval of the Public Service Commission. Further, the
nature of the partnership which may have been entered into by Nicanor de Guzman and Agapito C. Correa cannot
now be discussed, considering that the promissory notes were signed Guzco Transit, by Nicanor de Guzman, and
considering that the judgment against Guzco Transit in the Court of First Instance of Manila has become final.
Finally, the dismissal in case No. 33033 pertaining to certificate No. 25951 was without prejudice, and the appellees
sales, the one at public auction by virtue of an attachment, or two voluntary sale made after the property had
been levied upon, should prevail, and a decision on this question is dependent on a decision relative to the liability
to execution of certificates of public convenience.chanroblesvirtualawlibrary chanrobles virtual law library
The Public Service Law, Act No. 3108, as amended, authorizes certificates of public convenience to be secured by
public service operators from the Public Service Commission. (Sec. 15 [ i].) A certificate of public convenience
granted to the owner or operator of public service motor vehicles, it has been held, grants a right in the nature of
a limited franchise. (Public Utilities Commission vs. Garviloch [191], 54 Utah, 406.)chanrobles virtual law library
The Code of Civil Procedure establishes the general rule that "property, both real and personal, or any interest
therein of the judgment debtor, not exempt by law, and all property and rights of property seized and held under
attachment in the action, shall be liable to execution." (Sec. 450.) The statutory exemptions do not include
franchises or certificates of public convenience. (Sec. 452.) The word "property" as used in section 450 of the Code
of Civil Procedure comprehends every species of title, inchoate or complete, legal or equitable. The test by which
to determine whether or not property can be attached and sold upon execution is whether the judgment debtor
has such a beneficial interest therein that he can sell or otherwise dispose of it for value. (Reyes vs. Grey [1911],
21 Phil., 73.)chanrobles virtual law library
It will be noted that the Public Service Law and the Code of Civil Procedure are silent on the question at issue, that
is, silent in the sense of not containing specific provisions on the right to attach certificates of public convenience.
The same attitude was not assumed in the enactment of Act No. 667, section 10, as amended, which gave authority
for the mortgage and sale under foreclosure proceedings of franchises granted by Provincial and municipal
governments. A similar tendency was evident in the Corporation Law, for in section 56 and following thereof
express provisions were made for the sale on execution used in connection with them. Should the legislative
intention thus evidenced be taken as meaning that the generality of the language used by the Code of Civil
Procedure was too vague to permit of forced sales of franchises and certificates of public convenience, or
notwithstanding the provisions to be found in these special laws, is the language of the code of Civil Procedure
broad enough to include certificates of public convenience? We lean to the latter proposition, and will now
proceed to elucidate our viewpoint.chanroblesvirtualawlibrary chanrobles virtual law library
The test to be applied was announced by our Supreme Court in Reyes vs. Grey, supra, and there is nothing in
Tufexis vs. Olaguera and Municipal Council of Guinobatan ( [1915], 32 Phil., 654), cited by appellant, which
sanctions a contrary test. That rule it will be recalled tested the liability of property to execution by determining if
the interest of the judgment debtor in the case can be sold or conveyed to another in any way. Now the Public
Service Law permits the Public Service Commission to approved the sale, alienation, mortgaging, encumbering, or
leasing of property, franchises, privileges, or rights or any part thereof (sec. 16 [ h]), and in practice the purchase
and sale of certificates of public convenience has been permitted by the Public Service Commission. If the holder
of a certificate of public convenience can sell it voluntarily, there is no valid reason why the same certificate cannot
be taken and sold involuntarily pursuant to process.chanroblesvirtualawlibrary chanrobles virtual law library
If this was all that there was to the case, we might hesitate to approve attachments of certificates of public
convenience. But there is more. Certificates of public convenience have come to have considerable material value.
They are valuable assets. In many cases the certificates are the cornerstones on which are builded the business of
bus transportation. The United States Supreme Court considers a franchise granted in consideration of the
performance of public service as constituting property within the protection of the Fourteenth Amendment to the
United States Constitution. (Frost vs. Corporation Commission of Oklahoma [1929], 278 U.S., 515.) If the holder of
the certificate of public convenience can thus be protected in his constitutional rights, we see no reason why the
certificate of public convenience should not assume corresponding responsibilities and be susceptible as property
or an interest therein of being liable to execution. In at least one State, the certificate of the railroad commission
permitting the operation of a bus line has been held to be included in the term "property" in the broad sense of
the term. If thus is true, the certificate under our law, considered as a species of property, would be liable to
execution. (Willis vs. Buck [1928], 81 Mont., 472.)chanrobles virtual law library
As has been intimated herein before, a practice has grown up in the Public Service Commission of permitting the
alienation of certificates of public convenience and in so doing approval has been given to the sale through
foreclosure proceedings of the certificates of public convenience to third parties. The very decision in the two
cases before us is an illustration of this practice. The same tendency is to be noted in the lower courts. As an
example in the instant record, there is a previous foreclosure of a mortgage apparently uncontested, Not only this,
but tacit approval to the attachment of certificates of public convenience either through chattel mortgages or
court writs has been given by this court. (Orlanes & Banaag Transportation Co. vs. Public Service Commission
[1932], 57 Phil., 634; Manila Electric Company vs. Orlanes & Banaag Transportation Co. [1933], 57 Phil., 805; Nos.
39525 and 39531, Red Line Transportation Co. vs. Rural Transit Co. and Bachrach Motor Co., November 17,
1933. 1 )chanrobles virtual law library
When the motion of the plaintiff praying that the certificates of public convenience granted by the Public Service
Commission which were attached be sold at public auction and the answer opposing the granting of the motion
on the ground that franchises can not be the subject of attachment and sale by garnishment came before the
Court of First Instance of Manila, the presiding Judge Anacleto Diaz, promulgated an order which sustained the
right of the plaintiff to attachment and garnishment. That order gains particular force because a later judgment by
consent was taken and no appeal was attempted to this court. It is true that the sale further required the approval
of the Public Service Commission, but the Public Service Commission respected the decision of the court and so
we have the concurrence of the court and the commission on this question. In the order in first instance appears
the following well considered language:
It remains to be determined whether, under the law, certificates of public convenience are liable to attachment
and seizure by legal process. The law is silent as to this matter. It can not be denied that such franchises are
valuable. They are subject to being sold for a consideration as much as any other property. They are even more
valuable than ordinary properties, taking into consideration than that they are not granted to every one who
applies for them but only to those who undertake to furnish satisfactory and convenient service to the public. It
may also be said that dealers in motor vehicles even extend credit to owners of such certificates or franchises. The
law permits the seizure by means of a writ of attachment not only of chattels but also for shares and credits. While
these franchises may be said to be intangible character, they are however of value and are considered properties
which can be seized through legal process.chanroblesvirtualawlibrary chanrobles virtual law library
For all the foregoing, the court is of the opinion that the plaintiff is entitled to the remedy it prays for in its motion
which is hereby granted.
The ruling of the Supreme Court on the question raised by the record and the assignments of error is this:
Certificates of public convenience secured by public service operators are liable to execution, and the Public
Service Commission is authorized to approve the transfer of the certificates of public convenience to the execution
creditor. As a consequence, the decision brought on review will be affirmed, with costs against the
appellant.chanroblesvirtualawlibrary chanrobles virtual law library
Avanceña, C.J., Villa-Real, Hull, and Imperial, JJ., concur.
G.R. No. L-61461 August 21, 1987
EPITACIO SAN PABLO, (Substituted by Heirs of E. San Pablo), petitioners,
vs.
PANTRANCO SOUTH EXPRESS, INC., respondent.
CARDINAL SHIPPING CORPORATION, petitioner,
vs.
HONORABLE BOARD OF TRANSPORTATION AND PANTRANCO SOUTH EXPRESS, INC., respondents.
GANCAYCO, J.:
The question that is posed in these petitions for review is whether the sea can be considered as a continuation
of the highway. The corollary issue is whether a land transportation company can be authorized to operate a
ferry service or coastwise or interisland shipping service along its authorized route as an incident to its franchise
without the need of filing a separate application for the same.
The Pantranco South Express, Inc., hereinafter referred to as PANTRANCO is a domestic corporation engaged in
the land transportation business with PUB service for passengers and freight and various certificates for public
conveniences CPC to operate passenger buses from Metro Manila to Bicol Region and Eastern Samar. On March
27,1980 PANTRANCO through its counsel wrote to Maritime Industry Authority (MARINA) requesting authority
to lease/purchase a vessel named M/V "Black Double" "to be used for its project to operate a ferryboat service
from Matnog, Sorsogon and Allen, Samar that will provide service to company buses and freight trucks that
have to cross San Bernardo Strait. 1 In a reply of April 29,1981 PANTRANCO was informed by MARINA that it
cannot give due course to the request on the basis of the following observations:
1. The Matnog-Allen run is adequately serviced by Cardinal Shipping Corp. and Epitacio San Pablo; MARINA
policies on interisland shipping restrict the entry of new operators to Liner trade routes where these are
adequately serviced by existing/authorized operators.
2. Market conditions in the proposed route cannot support the entry of additional tonnage; vessel acquisitions
intended for operations therein are necessarily limited to those intended for replacement purposes only. 2
PANTRANCO nevertheless acquired the vessel MV "Black Double" on May 27, 1981 for P3 Million pesos. It wrote
the Chairman of the Board of Transportation (BOT) through its counsel, that it proposes to operate a ferry
service to carry its passenger buses and freight trucks between Allen and Matnog in connection with its trips to
Tacloban City invoking the case of Javellana vs. Public Service Commission. 3 PANTRANCO claims that it can
operate a ferry service in connection with its franchise for bus operation in the highway from Pasay City to
Tacloban City "for the purpose of continuing the highway, which is interrupted by a small body of water, the
said proposed ferry operation is merely a necessary and incidental service to its main service and obligation of
transporting its passengers from Pasay City to Tacloban City. Such being the case ... there is no need ... to obtain
a separate certificate for public convenience to operate a ferry service between Allen and Matnog to cater
exclusively to its passenger buses and freight trucks.4
Without awaiting action on its request PANTRANCO started to operate said ferry service. Acting Chairman Jose
C. Campos, Jr. of BOT ordered PANTRANCO not to operate its vessel until the application for hearing on Oct. 1,
1981 at 10:00 A.M. 5 In another order BOT enjoined PANTRANCO from operating the MV "Black Double"
otherwise it will be cited to show cause why its CPC should not be suspended or the pending application
denied. 6
Epitacio San Pablo (now represented by his heirs) and Cardinal Shipping Corporation who are franchise holders
of the ferry service in this area interposed their opposition. They claim they adequately service the PANTRANCO
by ferrying its buses, trucks and passengers. BOT then asked the legal opinion from the Minister of Justice
whether or not a bus company with an existing CPC between Pasay City and Tacloban City may still be required
to secure another certificate in order to operate a ferry service between two terminals of a small body of water.
On October 20, 1981 then Minister of Justice Ricardo Puno rendered an opinion to the effect that there is no
need for bus operators to secure a separate CPC to operate a ferryboat service holding as follows:
Further, a common carrier which has been granted a certificate of public convenience is expected to provide
efficient, convenient and adequate service to the riding public. (Hocking Valley Railroad Co. vs. Public Utilities
Commission, 1 10 NE 521; Louiseville and NR Co. vs. Railroad Commissioners, 58 SO 543) It is the right of the
public which has accepted the service of a public utility operator to demand that the service should be
conducted with reasonable efficiency. (Almario, supra, citing 73 C.J.S. 990-991) Thus, when the bus company in
the case at bar proposes to add a ferry service to its Pasay Tacloban route, it merely does so in the discharge of
its duty under its current certificate of public convenience to provide adequate and convenient service to its
riders. Requiring said bus company to obtain another certificate to operate such ferry service when it merely
forms a part — and constitutes an improvement — of its existing transportation service would simply be
duplicitous and superfluous. 7
Thus on October 23, 1981 the BOT rendered its decision holding that the ferry boat service is part of its CPC to
operate from Pasay to Samar/Leyte by amending PANTRANCO's CPC so as to reflect the same in this wise:
Let the original Certificate of public convenience granted to Pantranco South Express Co., Inc. be amended to
embody the grant of authority to operate a private ferry boat service as one of the conditions for the grant of
the certificate subject to the condition that the ferryboat shall be for the exclusive use of Pantranco buses, its
passengers and freight trucks, and should it offer itself to the public for hire other than its own passengers, it
must apply for a separate certificate of public convenience as a public ferry boat service, separate and distinct
from its land transport systems. 8
Cardinal Shipping Corporation and the heirs of San Pablo filed separate motions for reconsideration of said
decision and San Pablo filed a supplemental motion for reconsideration that were denied by the BOT on July 21,
1981. 9
Hence, San Pablo filed the herein petition for review on certiorari with prayer for preliminary
injunction 10 seeking the revocation of said decision, and pending consideration of the petition, the issuance of
a restraining order or preliminary injunction against the operation by PANTRANCO of said ferry service. San
Pablo raised the following issues:
A. DID THE RESPONDENT BOARD VIOLATE PETITIONERS' RIGHT TO DUE PROCESS, THE RULES OF PROCEDURE
AND SECTION 16 (m) OF THE PUBLIC SERVICE ACT, WHEN IT ISSUED IN A COMPLAINT CASE THE DECISION DATED
OCTOBER 23, 1981 WHICH MOTU PROPIOAMENDED RESPONDENT PANTRANCO'S PUB CERTIFICATE TO INCLUDE
AND AUTHORIZE OPERATION OF A SHIPPING SERVICE ON THE ROUTE MATNOG, SORSOGON — ALLEN, SAMAR
— EVEN AS THERE MUST BE A FORMAL APPLICATION FOR AMENDMENT AND SEPARATE PROCEEDINGS HELD
THEREFORE, ASSUMING AMENDMENT IS PROPER?
B. DID THE RESPONDENT BOARD ERR IN FINDING IN ITS DECISION OF OCTOBER 23, 1981, THAT THE SEA FROM
THE PORT OF MATNOG, SORSOGON, LUZON ISLAND TO THE PORT OF ALLEN, SAMAR ISLAND, OR FROM LUZON
ISLAND TO SAMAR ISLAND IS A MERE FERRY OR CONTINUATION OF THE HIGHWAY — IT BEING 23 KILOMETERS
OF ROUGH AND OPEN SEA AND ABOUT 2 HOURS TRAVEL TIME REQUIRING BIG INTER-ISLAND VESSELS, NOT
MERE BARGES, RAFTS OR SMALL BOATS UTILIZED IN FERRY SERVICE?
C. DID THE RESPONDENT BOARD ERR WHEN IT RULED THAT RESPONDENT PANTRANCO'S VESSEL M/V BLACK
DOUBLE IS MERELY A PRIVATE CARRIER, NOT A PUBLIC FERRY OPERATING FOR PUBLIC SERVICE (ASSUMING
THAT THE MATNOG-ALLEN SEA ROUTE IS A MERE FERRY OR CONTINUATION OF HIGHWAY) EVEN IF SAID VESSEL
IS FOR HIRE AND COLLECTS SEPARATE FARES AND CATERS TO THE PUBLIC EVEN FOR A LIMITED CLIENTELE?
D. DID THE RESPONDENT BOARD ERR WHEN IT GRANTED RESPONDENT PANTRANCO AUTHORITY TO OPERATE
A SHIPPING SERVICE IN THE FACE OF THE LATTER'S CONTENTION AS AN AFTER THOUGH THAT IT NEED NOT
APPLY THEREFOR, AND IN SPITE OF ITS FAILURE TO SECURE THE PRE-REQUISITE MARITIME INDUSTRY
AUTHORITY (MARINA) APPROVAL TO ACQUIRE A VESSEL UNDER ITS MEMORANDUM CIRCULAR NO. 8-A AS
WELL AS ITS PRIOR FAVORABLE ENDORSEMENT BEFORE ANY SHIPPING AUTHORIZATION MAY BE GRANTED
UNDER BOT — MARINA AGREEMENT OF AUGUST 10, 1976 AND FEBRUARY 26, 1982?
E. DID RESPONDENT BOARD ERR WHEN IT GRANTED RESPONDENT PANTRANCO AUTHORITY TO OPERATE A
SHIPPING SERVICE ON A ROUTE ADEQUATELY SERVICED IF NOT ALREADY "SATURATED" WITH THE SERVICES OF
TWO 12) EXISTING OPERATORS PETITIONERS AND CARDINAL SHIPPING CORP.) IN VIOLATION OF THE PRINCIPLE
OF PRIOR OPERATOR RULE'? 11
By the same token Cardinal Shipping Corporation filed a separate petition raising similar issues, namely:
a. the decision did not conform to the procedures laid down by law for an amendment of the original certificate
of public convenience, and the authority to operate a private ferry boat service to PANTRANCO was issued
without ascertaining the established essential requisites for such grant, hence, violative of due process
requirements;
b. the grant to PANTRANCO of authority to operate a ferryboat service as a private carrier on said route
contravenes existing government policies relative to the rationalization of operations of all water transport
utilities;
c. it contravenes the memorandum of agreement between MARINA and the Board of Transportation; d. the
grant of authority to operate a ferry service as a private carrier is not feasible; it lessens PANTRANCO's liability
to passengers and cargo to a degree less than extraordinary diligence?
e. PANTRANCO is not a private carrier when it operates its ferry service;
f. it runs counter to the "old operator" doctrine; and
g. the operation by PANTRANCO of the ferry service c•nstitutes undue competition.
The foregoing considerations constitutes the substantial errors committed by the respondent Board which
would more than amply justify review of the questioned decision by this Honorable Court.12
Both cases were consolidated and are now admitted for decision.
The resolution of all said issues raised revolves on the validity of the questioned BOT decision.
The BOT resolved the issue of whether a ferry service is an extension of the highway and thus is a part of the
authority originally granted PANTRANCO in the following manner:
A ferry service, in law, is treated as a continuation of the highway from one side of the water over which passes
to the other side for transportation of passengers or of travellers with their teams vehicles and such other
property as, they may carry or have with them. (U.S. vs. Pudget Sound Nev. Co. DC Washington, 24 F. Supp.
431). It maybe said to be a necessary service of a specially constructed boat to carry passengers and property
across rivers or bodies of water from a place in one shore to a point conveniently opposite on the other shore
and continuation of the highway making a connection with the thoroughfare at each terminal (U.S. vs. Canadian
Pac. N.Y. Co. 4 P. Supp, 85). It comprises not merely the privilege of transportation but also the use for that
purpose of the respective landings with outlets therefrom. (Nole vs. Record, 74 OKL. 77; 176 Pac. 756). A ferry
service maybe a public ferry or a private ferry. A public ferry service is one which all the public have the right to
resort to and for which a regular fare is established and the ferryman is a common carrier be inbound to take
an who apply and bound to keep his ferry in operation and good repair. (Hudspeth v. Hall, 11 Oa. 510; 36 SB
770). A ferry (private) service is mainly for the use of the owner and though he may take pay for ferriage, he
does not follow it as a business. His ferry is not open to the public at its demand and he may or may not keep it
in operation (Hudspeth vs. Hall, supra, St. Paul Fire and Marine Ins. 696), Harrison, 140 Ark 158; 215 S.W. 698).
The ferry boat service of Pantranco is a continuation of the highway traversed by its buses from Pasay City to
Samar, Leyte passing through Matnog (Sorsogon) through San Bernardino Strait to Alien (Samar). It is a private
carrier because it will be used exclusively to transport its own buses, passengers and freight trucks traversing
the said route. It will cater exclusively to the needs of its own clientele (passengers on board- Pantranco buses)
and will not offer itself indiscriminately for hire or for compensation to the general public. Legally therefore,
Pantranco has the right to operate the ferry boat M/V BLACK DOUBLE, along the route from Matnog (Sorsogon)
to Allen (Samar) and vice versa for the exclusive use of its own buses, passengers and freight trucks without the
need of applying for a separate certificate of public convenience or provisional authority. Since its operation is
an integral part of its land transport system, its original certificate of public convenience should be amended to
include the operation of such ferryboat for its own exclusive use
In Javellana 14 this Court recited the following definition of ferry :
The term "ferry" implied the continuation by means of boats, barges, or rafts, of a highway or the connection of
highways located on the opposite banks of a stream or other body of water. The term necessarily implies
transportation for a short distance, almost invariably between two points, which is unrelated to other
transportation .(Emphasis supplied)
The term "ferry" is often employed to denote the right or franchise granted by the state or its authorized
mandatories to continue by means of boats, an interrupted land highway over the interrupting waters and to
charge toll for the use thereof by the public. In this sense it has also been defined as a privilege, a liberty, to take
tolls for transporting passengers and goods across a lake or stream or some other body of water, with no
essential difference from a bridge franchise except as to the mode of transportation, 22 Am. Jur. 553.
A "ferry" has been defined by many courts as "a public highway or thoroughfare across a stream of water or
river by boat instead of a bridge." (St. Clare Country v. Interstate Car and Sand Transfer Co., 192 U.S. 454, 48 L.
ed. 518; etc.)
The term ferry is often employed to denote the right or franchise granted by the state or its authorized
mandatories to continue by means of boats, an interrupted land highway over the interrupting waters and to
charge toll for the use thereof by the public. (Vallejo Ferry Co. vs. Solano Aquatic Club, 165 Cal. 255, 131 P. 864,
Ann. Cas. 1914C 1179; etc.) (Emphasis supplied)
"Ferry" is service necessity for common good to reach point across a stream lagoon, lake, or bay. (U.S. vs.
Canadian Pac. Ry. Co. DC Was., 4 Supp. 851,853)'
"Ferry" properly means a place of transit across a river or arm of the sea, but in law it is treated as a franchise,
and defined as the exclusive right to carry passengers across a river, or arm of the sea, from one vill to another,
or to connect a continuous line of road leading from township or vill to another. (Canadian Pac. Ry. Co. vs. C.C.
A. Wash. 73 F. 2d. 831, 832)'
Includes various waters: (1) But an arm of the sea may include various subordinate descriptions of waters, where
the tide ebbs and flows. It may be a river, harbor, creek, basin, or bay; and it is sometimes used to designate
very extensive reaches of waters within the projecting capes or points or a country. (See Rex vs. Bruce, Deach
C.C. 1093). (2) In an early case the court said: "The distinction between rivers navigable and not navigable, that
is, where the sea does, or does not, ebb and flow, is very ancient. Rex vs. Smith, 2 Dougl. 441, 99 Reprint 283.
The former are called arms of the sea, while the latter pass under the denomination of private or inland rivers"
Adams vs. Pease 2 Conn. 481, 484. (Emphasis supplied)
In the cases of Cababa vs. Public Service Commission, 16 Cababa vs. Remigio & Carillo and Municipality of
Gattaran vs. Elizaga 17 this Court considered as ferry service such water service that crosses rivers.
However, in Javellana We made clear distinction between a ferry service and coastwise or interisland service
by holding that:
We are not unmindful of the reasons adduced by the Commission in considering the motorboat service between
Calapan and Batangas as ferry; but from our consideration of the law as it stands, particularly Commonwealth
Act No. 146, known as the Public Service Act and the provisions of the Revised Administrative Code regarding
municipal ferries and those regarding the jurisdiction of the Bureau of Customs over documentation,
registration, licensing, inspection, etc. of steamboats, motorboats or motor vessels, and the definition of ferry
as above quoted we have the impression and we are inclined to believe that the Legislature intended ferry to
mean the service either by barges or rafts, even by motor or steam vessels, between the banks of a river or
stream to continue the highway which is interrupted by the body of water, or in some cases to connect two
points on opposite shores of an arm of the sea such as bay or lake which does not involve too great a distance
or too long a time to navigate But where the line or service involves crossing the open sea like the body of water
between the province of Batangas and the island of Mindoro which the oppositors describe thus "the
intervening waters between Calapan and Batangas are wide and dangerous with big waves where small boat
barge, or raft are not adapted to the service," then it is more reasonable to regard said line or service as more
properly belonging to interisland or coastwise trade. According to the finding of the Commission itself the
distance between Calapan is about 24 nautical miles or about 44.5 kilometers. We do not believe that this is the
short distance contemplated by the Legislature in referring to ferries whether within the jurisdiction of a single
municipality or ferries between two municipalities or provinces. If we are to grant that water transportation
between Calapan and Batangas is ferry service, then there would be no reason for not considering the same
service between the different islands of the Philippines, such as Boac Marinduque and Batangas; Roxas City of
Capiz and Romblon; Cebu City, Cebu and Ormoc, Leyte; Guian, Samar and Surigao, Surigao; and Dumaguete,
Negros Oriental and Oroquieta or Cagayan de Oro.
The Commission makes the distinction between ferry service and motorship in the coastwise trade, thus:
A ferry service is distinguished from a motorship or motorboat service engaged in the coastwise trade in that
the latter is intended for the transportation of passengers and/or freight for hire or compensation between
ports or places in the Philippines without definite routes or lines of service.
We cannot agree. The definiteness of the route of a boat is not the deciding factor. A boat of say the William
Lines, Inc. goes from Manila to Davao City via Cebu, Tagbilaran, Dumaguete, Zamboanga, every week. It has a
definite route, and yet it may not for that reason be regarded as engaged in ferry service. Again, a vessel of the
Compania Maritima makes the trip from Manila to Tacloban and back, twice a week. Certainly, it has a definite
route. But that service is not ferry service, but rather interisland or coastwise trade.
We believe that it will be more in consonance with the spirit of the law to consider steamboat or motorboat
service between the different islands, involving more or less great distance and over more or less turbulent and
dangerous waters of the open sea, to be coastwise or inter-island service. Anyway, whether said service
between the different islands is regarded as ferry service or coastwise trade service, as long as the water craft
used are steamboats, motorboats or motor vessels, the result will be the same as far as the Commission is
concerned. " 18 (Emphasis supplied)
This Court takes judicial notice of the fact, and as shown by an examination of the map of the Philippines, that
Matnog which is on the southern tip of the island of Luzon and within the province of Sorsogon and Allen which
is on the northeastern tip of the island of Samar, is traversed by the San Bernardino Strait which leads towards
the Pacific Ocean. The parties admit that the distance between Matnog and Allen is about 23 kilometers which
maybe negotiated by motorboat or vessel in about 1-1/2 hours as claimed by respondent PANTRANCO to 2
hours according to petitioners. As the San Bernardino Strait which separates Matnog and Allen leads to the
ocean it must at times be choppy and rough so that it will not be safe to navigate the same by small boats or
barges but only by such steamboats or vessels as the MV "Black Double. 19
Considering the environmental circumstances of the case, the conveyance of passengers, trucks and cargo from
Matnog to Allen is certainly not a ferry boat service but a coastwise or interisland shipping service. Under no
circumstance can the sea between Matnog and Allen be considered a continuation of the highway. While a ferry
boat service has been considered as a continuation of the highway when crossing rivers or even lakes, which
are small body of waters - separating the land, however, when as in this case the two terminals, Matnog and
Allen are separated by an open sea it can not be considered as a continuation of the highway. Respondent
PANTRANCO should secure a separate CPC for the operation of an interisland or coastwise shipping service in
accordance with the provisions of law. Its CPC as a bus transportation cannot be merely amended to include this
water service under the guise that it is a mere private ferry service.
The contention of private respondent PANTRANCO that its ferry service operation is as a private carrier, not as
a common carrier for its exclusive use in the ferrying of its passenger buses and cargo trucks is absurd.
PANTRANCO does not deny that it charges its passengers separately from the charges for the bus trips and issues
separate tickets whenever they board the MV "Black Double" that crosses Matnog to Allen, 20 PANTRANCO
cannot pretend that in issuing tickets to its passengers it did so as a private carrier and not as a common carrier.
The Court does not see any reason why inspite of its amended franchise to operate a private ferry boat service
it cannot accept walk-in passengers just for the purpose of crossing the sea between Matnog and Allen. Indeed
evidence to this effect has been submitted. 21 What is even more difficult to comprehend is that while in one
breath respondent PANTRANCO claims that it is a private carrier insofar as the ferryboat service is concerned,
in another breath it states that it does not thereby abdicate from its obligation as a common carrier to observe
extraordinary diligence and vigilance in the transportation of its passengers and goods. Nevertheless,
considering that the authority granted to PANTRANCO is to operate a private ferry, it can still assert that it
cannot be held to account as a common carrier towards its passengers and cargo. Such an anomalous situation
that will jeopardize the safety and interests of its passengers and the cargo owners cannot be allowed.
What appears clear from the record is that at the beginning PANTRANCO planned to operate such ferry boat
service between Matnog and Alien as a common carrier so it requested authority from MARINA to purchase the
vessel M/V "Black Double 22 in accordance with the procedure provided for by law for such application for a
certificate of public convenience. 23 However when its request was denied as the said routes "are adequately
serviced by existing/authorized operators, 24 it nevertheless purchased the vessel and started operating the
same. Obviously to go about this obstacle to its operation, it then contrived a novel theory that what it proposes
to operate is a private ferryboat service across a small body of water for the exclusive use of its buses, trucks
and passengers as an incident to its franchise to convey passengers and cargo on land from Pasay City to
Tacloban so that it believes it need not secure a separate certificate of public convenience. 25 Based on this
representation, no less than the Secretary of Justice was led to render an affirmative opinion on October 20,
1981, 26 followed a few days later by the questioned decision of public respondent of October 23,
1981. 27 Certainly the Court cannot give itsimprimatur to such a situation.
Thus the Court holds that the water transport service between Matnog and Allen is not a ferry boat service but a
coastwise or interisland shipping service. Before private respondent may be issued a franchise or CPC for the
operation of the said service as a common carrier, it must comply with the usual requirements of filing an
application, payment of the fees, publication, adducing evidence at a hearing and affording the oppositors the
opportunity to be heard, among others, as provided by law. 28
WHEREFORE, the petitions are hereby GRANTED and the Decision of the respondent Board of Transportation (BOT)
of October 23, 1981 in BOT Case No. 81-348-C and its Order of July 21, 1982 in the same case denying the motions
for reconsideration filed by petitioners are hereby Reversed and set aside and declared null and void. Respondent
PANTRANCO is hereby permanently enjoined from operating the ferryboat service and/or coastwise/interisland
services between Matnog and Allen until it shall have secured the appropriate Certificate of Public Convenience
(CPC) in accordance with the requirements of the law, with costs against respondent PANTRANCO.
SO ORDERED.
Teehankee, C.J., Narvasa, Cruz and Paras, JJ., concur.