A. L. AMMEN TRANSPORTATION COMPANY, INC., ET AL., PETITIONERS, VS. FROILAN JAPA, RESPONDENT.

Ammen Transportation versus Japa

The Case

This is a petition for review brought by A. L. Ammen Transportation Company, Bicol Transportation Company, and Consolidated Auto Line, all under a joint management, against Froilan Japa, an applicant for a certificate of public convenience. The petitioners opposed Japa's application before the Public Service Commission to operate buses on the Legaspi to Naga City line, and when the Commission granted the application in part, they asked the Supreme Court to reverse it. The case matters because it fixes the narrow scope of judicial review over the Commission's findings of fact, and because it settles that an appellate court will not weigh evidence that was never before the Commission.

Procedural History

Froilan Japa filed his application for authority to operate eight buses on the Legaspi to Naga City line before the Public Service Commission. The petitioners opposed it, and after hearing, the Commission rendered its decision in February 1962, authorizing Japa to operate four auto-trucks instead of the eight applied for, subject to conditions stated in the decision. The petitioners then filed a petition for review with the Supreme Court, assigning grave abuse of discretion on two grounds: that Japa was not financially qualified, and that the proposed service would not promote public interest. While the appeal was pending, the petitioners filed a motion claiming newly discovered evidentiary documents on Japa's finances, which the Court resolved together with the merits.

Facts

On April 12, 1961, Froilan Japa applied to the Public Service Commission for authority to operate eight buses on the Legaspi to Naga City line and back. The petitioners opposed, claiming they already had a fleet rendering adequate and satisfactory service over the line, and that a grant would only produce cut-throat or ruinous competition.

Japa and his witness Medardo Alvarez testified that on their trips they observed many passengers along the line; that to be accommodated on the petitioners' buses, passengers had to go to the starting points and incur additional expense, because buses almost full to capacity would not pick up passengers elsewhere, so many were left behind, especially in the intermediate towns. On finances, Japa showed two stores on Quezon Boulevard with 150,000 pesos invested, 8,000 pesos in the Philippine Savings Bank in Quiapo, 30,000 pesos in the Bank of Commerce, and a lot on Concha Street in Tondo not yet registered in his name.

The petitioners presented their Assistant to the Operations Manager, Felipe Abaño. He testified that the three companies ran 34, 18, and 10 round trips a day respectively; that other individual operators made a total of 34 round trips; that trips began at four in the morning and every fifteen minutes thereafter; that during peak hours the larger buses carried an average of 35 to 40 passengers and the smaller ones 25 to 30, while during lean hours 20 to 25 and 15 to 20; and that the combined service was more than sufficient. On cross examination he admitted that the towns between Naga and Legaspi hold market days every day of the week, sometimes two towns on the same day, which greatly affected the volume of traffic. It also came out that some individual operators on the route had already abandoned their service. The Commission granted the application in part, and this petition followed.

Issues

• Whether or not the Public Service Commission committed grave abuse of discretion in finding the respondent financially qualified to operate and maintain the proposed service.
• Whether or not the Public Service Commission abused its discretion in finding that the proposed service would promote public interest and replace the services of operators who had abandoned their operations.
• Whether or not the Supreme Court may admit and consider the newly discovered evidentiary documents offered by the petitioners during the pendency of the appeal.

Applicable Provisions

Section 35 of the Public Service Act, as cited in the decision, provides:

It appearing that the main issues raised by petitioners 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 the 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 said findings.

This is the statutory and jurisprudential anchor of the Court's deference: findings of fact supported by evidence are conclusive and cannot be reopened on appeal.

Ruling

On the first two issues, the Court sustained the Commission. Both issues, it held, relate to questions of fact affecting the findings made by the Commission after considering conflicting evidence and the credibility of witnesses, and the record shows ample evidence to support those conclusions. The Court reiterated its settled rule that such findings are conclusive upon it where there is sufficient evidence to support them.

On financial capacity, the petitioners argued that bank deposits and store investments could not qualify Japa because he owned no registered real property, so no dealer or financing corporation would extend him credit. The Court rejected this, noting that Japa had actually acquired and registered the four units authorized and had been operating them on the line since then, and that his assets when granted the certificate were worth 188,000 pesos against only four auto-trucks. It cited with approval the reasoning in an earlier case that where the Commission authorized fewer units than applied for and the applicant had already acquired units and arranged for more, the Commission cannot be said to have erred on financial capacity.

On the third issue, the Court refused to admit the newly discovered documents. It stated the governing rule:

In reviewing a decision of the Public Service Commission, this Court is not required to examine the proof de novo and determine for itself whether or not the preponderance of evidence really justifies that decision. Our only function is to determine whether or not there is evidence before the Commission upon which its decision might reasonably be based. This Court will not substitute its discretion for that of the Commission on questions of fact and will not interfere in the latter's decision unless it clearly appears that there is no evidence to support it.

Since the Court's only function is to ask whether there was sufficient evidence before the Commission, the evidence it may consider is only that presented before the Commission. To consider new evidence offered first on appeal would be to evaluate proof the Commission never had, and the Court could not then say the Commission abused its discretion for failing to evaluate evidence it could not have foreseen.

Doctrine

First, findings of fact of the Public Service Commission, supported by sufficient evidence, are conclusive upon the Supreme Court and will not be disturbed on review. Second, the Court does not examine the proof de novo; its only function is to determine whether there is evidence before the Commission upon which its decision might reasonably be based, and it will not substitute its discretion for the Commission's unless it clearly appears that no evidence supports the decision. Third, evidence not presented before the Commission cannot be considered for the first time on appeal, because the question is whether the Commission abused its discretion on the record before it. Fourth, on financial capacity, the Commission may grant fewer units than applied for, and actual acquisition and operation of the authorized units supports a finding of financial qualification.

Disposition

The Supreme Court affirmed the decision of the Public Service Commission, with costs against the petitioners.

Remember This

Memorize the line that the Court's only function is to determine whether there is evidence before the Commission upon which its decision might reasonably be based, not to weigh the proof de novo. Examiners use this case for the conclusiveness of the Public Service Commission's factual findings and for the rule that newly discovered evidence offered for the first time on appeal cannot be considered.