G.R. No. L-16659. April 26, 1961
ALFREDO REYES, PLAINTIFF AND APPELLANT, VS. JOSE PASCUAL, DEFENDANT AND APPELLEE.
REYES, J.B.L., J.:
in the Court of First Instance of Camarines Norte to enjoin the defendant Jose
Pascual from operating a ferry business along the Mercedes-Manguisoc Ferry,
Mercedes, Camarines Norte, and for damages.
From the stipulation of facts submitted by the parties in the court below, it
appears that both plaintiff and defendant are simultaneously operating the
business of ferrying passengers and cargo on the ferry line in question; that
plaintiff started operating his service on September 25, 1958, under authority
(1) of an award and contract from the municipal council of Mercedes (duly
approved by the provincial board of Camarines Norte), granting him the exclusive
lease and operation of the Mercedes-Manguisoc Ferry for one year, after having
been declared the highest and winning bidder in a public bidding conducted by
said municipality for that purpose on August 27, 1958, and (2) of a “bay and
river license” issued by the Bureau of Customs on September 25, 1958; that
defendant, on his part, started his ferry business sometime on May 15, 1958, on
the strength of a “bay and river license” granted by the Bureau of Customs on
May 15, 1958; that defendant had personal knowledge of the public bidding
conducted by the Municipality of Mercedes on August 27, 1958 offering for lease
the operation of the Mercedes-Manguisoc Ferry, but did not participate in said
bidding; that the Mercedes-Manguisoc Ferry line has been in existence since time
immemorial, and since the creation of the municipality of Mercedes as an
independent juridical entity in 1948, the operation of said ferry line has
always been under the administration of said municipality; that there is an
application pending with the Public Service Commission filed by defendant and
opposed by plaintiff, for a motorboat service covering the ferry line in
question; that plaintiff nets an average income of P4.00 from his ferry
business, which income could have been doubled were it not for defendant’s
competing business; and that as a result of the filing of this case, each of the
parties has suffered and will suffer liquidated damages of P500.00, attorney’s
fees and P600.00) other expenses.
The theory upon which plaintiff brought his complaint for injunction is that
he has an exclusive right to operate said ferry business by virtue of his award
and contract from the Municipality of Mercedes, and that defendant’s operation
of the same service is illegal; while the theory of defendant is that the
municipality of Mercedes does not have the power to grant plaintiff the
exclusive privilege of operating said ferry line, and that as holder of. a bay
and river license from the Bureau of Customs authorizing him to engage in the
same ferry service, ahead of the license issued to plaintiff, he should be
considered the one with the exclusive right to operate said ferry line.
Sustaining defendant’s line of defense, but without holding thut he has an
exclusive right to operate the ferry service in question, the lower court, on
September 7, 1959, rendered judgment dismissing the complaint and ordering
plaintiff to pay defendant costs and liquidated damages in the sum of P1,100.00.
Whereupon, plaintiff appealed to this Court.
In deciding this appeal, three different sets of legal provisions should be
considered:
(1) Secs. 2318-2320 of the Revised Administrative Code providing that a
municipal council shall have authority to acquire or establish municipal ferries
and to either conduct said public utility on account of the municipality or let
it to the private party who is the highest and best bidder, for a period of one
year, or for a longer period not exceeding five years upon the previous approval
of the provincial board;
(2) Secs. 602, paragraph (3), and 910-912 of Republic Act No. 1937, formerly
sections 1139, paragraph (b), and 1217-1219 of the Revised Administrative
Code, providing for the issuance by the Bureau of Customs of annual “bay and
river license” to vessels engaged in the business of towing or carrying
merchandise or passengers in the bays, harbors, rivers and inland waters
navigable from the sea, and prescribing the conditions under which a vessel
should be so licensed, as well as the classes of vessels that are exempt from
such license; and
(3) Sec. 13, C.A. 146, conferring upon the Public Service Commission
jurisdiction, supervision and control over ferries as part of its general
jurisdiction over public utilities.
In Municipality of Gattaran vs. Elizaga, 91 Phil., 440 this Court held
that while section 13 of Commonwealth Act No. 146 confers general jurisdiction
upon the Public Service Commission over ferries, said jurisdiction does not
include the issuance of a certificate of public convenience to an applicant for
a ferry service in a municipality who has not been previously granted the
privilege to operate said ferry by the municipality in which the ferry is
located, under sections 2318 and 2320 of the Revised Administrative Code. In
that case, we also reconciled the two seemingly conflicting jurisdictions of the
municipality, on the one hand, and the Public Service Commission, on the other,
over municipal ferries, in that the first is specific and aimed at “providing an
additional source of revenue to municipal corporations for their maintenance and
operation”; so that a private party must first be awarded the right to operate
the municipal ferry before he can file an application for a certificate or
permit with the Commission, and the latter, upon granting it, will fix the rates
to be charged as well as specify the kind of equipment to be used by him for the
comfort, convenience, and safety of the public using the ferry. Only when the
ferry is not a municipal one (that is, does not lie entirely within the
territorial jurisdiction of a municipality) and is impressed with the character
of a national highway in that it connects portions of a national highway on
opposite sides of the river, is the municipal approval dispensed with as a
prerequisite for the Public Service Commission’s grant of a permit to operate
(Cababa vs. Public Service Commission, 102 Phil., 1013; 54 Off. Gaz.,
6868).
By the same pattern of reasoning, we should also hold that where a municipal
ferry is concerned, the specific jurisdiction and authority given by sections
2318-2320 of the Revised Administrative Code to the municipality wherein the
ferry is situated should prevail over the general jurisdiction given by the
Tariff and Customs Code to the Bureau of Customs over the carriage of passengers
and freight in Philippine bays and rivers, so that without first obtaining
municipal approval and grant, a private party can not legally operate a
municipal ferry even if he should hold a bay and river license from the Bureau
of Customs. Besides, a careful reading of sections 910-912, in relation to
section 602 (3), of the Tariff and Customs Code of 1957 (which was already the
applicable law when the facts of .this case arose)[1], superseding sections 1217-1219 and section
1139, paragraph (b) of the Revised Administrative Code, would indicate
that the jurisdiction of the Bureau of Customs is primarily over the “vessels”
engaged in the carrying of passengers and freight in Philippine rivers, i.e.,
their seaworthiness, adequacy and safety, rather than over the granting of the
exclusive right or privilege to operate such carrying business between specific
termini. In other words, although a private party already has municipal approval
to engage in, a municipal ferry service, he must likewise obtain a bay and river
license from the Bureau of Customs for the vessel or craft he would utilize for
such service, under the conditions prescribed by the customs law for that
purpose, as another condition precedent to his operation. But the authority to
grant exclusive right or privilege to operate the municipal ferry service lies
with the municipality concerned and not with the Bureau of Customs, so that
although a vessel has already been duly licensed by said Bureau to engage in a
municipal ferry service, still the owner of said vessel can not legally operate
unless he is duly authorized to do so by the municipality in whose territory the
ferry lies.
For the above reasons, we hold that as the party duly authorized by the
municipality of Mercedes to operate the Mercedes-Manguisoc Ferry,
plaintiff-appellant has the legal right and privilege to conduct such ferry
service, to the exclusion of defendant-appellee, who holds no municipal
authority for that purpose. Considering, however, that defendant was not guilty
of any bad faith but fell into an honest mistake when he thought he could
lawfully operate another ferry service along the same line with a license duly
issued by the Bureau of Customs, he should not be adjudged liable in attorney’s
fees and litigation expenses to plaintiff-appellant.
Wherefore, the judgment appealed from is reversed, and another one entered
permanently enjoining defendant-appellee Jose Pascual from operating a ferry
service along the Mercedes-Manguisoc Ferry for the duration of the award and
contract given by the Municipality of Mercedes to plaintiff-appellant Alfredo
Reyes to operate said ferry service. Costs against defendant-appellee in both
instances.
Bengzon, Acting C.J., Padilla, Bautista Angelo, Labrador,
Concepcion, and Dizon, JJ., concur.
[1] The text of these provisions are:
“Sec. 602. Functions of the Bureau.
The general duties, powers and jurisdiction of the bureau shall include:
* * * *
* * *d. The general supervision, control and regulation of vessels engaged
in the carrying of passengers and freight or in towage in coastwise trade andi
in the bays and rivers of the Philippines.* * * *
* * *“SEC. 910. Bay and river license.
Annual license authorizing vessels of any tonnage to engage in the
business of towing or carrying of articles or passengers in the bays, harbors,
rivers and inland waters navigable from the eea shall be issued by the Collector
of the various ports of entry under the conditions herein below prescribed; and
except so otherwise expressly provided, no vessel shall be permitted to
engage in this character of business until the proper license therefor has been
procured.A bay and river license shall specify the particular port or other body of
water in which the vessel in question may engage in business as aforesaid.”“SEC. 911. Vessels eligible for bay and river license.
To be eligible for the bay and river license, a vessel must be built
in the Philippines, and the ownership of such vessel must be vested in: (a)
citizens of the Philippines; (b) domestic corporations or companies seventy-five
per centum of whose corporate capital belongs to citizens of the
Philippines: Provided, That the present owners of vessels with bay and
river license under existing law who do not possess any of the requirements
herein prescribed may nevertheless continue operating such vessels as eligible
for said bay and river license.” (All italics supplied)