MANILA RAILROAD COMPANY, APPLICANT AND APPELLANT, VS. M. P. TRANCO, INC., OPPONENT AND APPELLEE.

The
Manila Railroad Company put into effect on November 17, 1932, an
alleged joint rate on fuel oil in tank cars from Manila to Bauang and
from Bauang to the mines in the vicinity of Baguio. The Manila Railroad
Company also owns the Benguet Auto Line, which operates from Bauang to
the mines. The opponent-appellee operates an auto line from Bauang to
the mines in direct competition with the Benguet Auto Line.

At present, the oil is shipped on the railroad consigned to the shipper
at Bauang and redistributed at Bauang not only to the mines but also to
other portions of Northern Luzon. Such is not a through shipment in
fact. The application for the through rate on its face applies only
when the Manila Railroad Company is given both the railroad and the
truck haul, and, owning both services, it proposed a division of rates
so that the truck line absorbed the entire reduction.

Appellant insists that shippers are riot interested in the divisions
that are made of through rates, and in this it is correct But
competitors are vitally interested in divisions, and shippers over the
railroad have a right to avail themselves of the services of appellee
as well as of the services of the Benguet Auto Line.

Divisions of joint rates should bear a direct relation to the service
rendered, and a manipulation of divisions to bring about an unfair
advantage over certain competition cannot be tolerated.

After hearing in which both sides fully presented their evidence as to
the cost of hauling bulk oil in tanks, the Public Service Commission in
its order dated January 24, 1933, in effect cancelled and revoked the
rates in force for the hauling of bulk oil from Bauang to the mines and
directed that a new rate of P10.50 and P11.20 from Bauang to the mines
in areas 1 and 2, be put into effect.

The Manila Railroad Company appeals and claims that the commission erred in its action.

From the evidence there is no question that the rate proposed by the
Manila Railroad Company for the haul in tank trucks is too low and
would be unremunerative to the Benguet Auto Line and introduces an
element of ruinous competition to the M. P. Tranco, Inc., appellee.

It is also contended that the Public Service Commission exceeded its
authority when it proceeded to say in this case what it thought a fair
and just rate should be. Appellant claims that the existing rates were
too high and that the rates it proposed were proper, and on a hearing
in which all available evidence was taken on that very question, it
insists that the commission was without power to do anything but choose
between the old rates and the proposed new rates, and that if it wanted
to fix a rate of its own, it would have to proceed in a separate
proceeding and retake the testimony.

This is to regard the
form and not the substance, and we hold that the entire question was
presented by the interested parties and the Public Service Commission
is not limited to a selection of the old or the new rates, but can
establish such rates as are proper under the evidence presented. As to
fixing the rate it thought would be fair, the Public Service Commission
had ample testimony to guide it. It did not act arbitrarily, and we
cannot see from the evidence presented that the rates as now fixed are
not fair, just, and properly remunerative to the auto services.

The order appealed from is affirmed, with costs against appellant. So ordered.

Malcolm, Villa-Real, Imperial, and Diaz, JJ., concur.