LEOPOLDO T. CALDERON, JR., PETITIONER, VS. PUBLIC SERVICE COMMISSION AND CECILIO V. MILO, RESPONDENTS.

Original action for certiorari
and prohibition to annul an order of respondent Public Service Commission
setting aside its previous decision approving the uncontested sale and transfer
of municipal franchise and certificate of public convenience for the operation
of electric service in Pulilan, Bulacan,
in favor of petitioner and to prohibit respondent commission from further
proceedings in the case below.

Private respondent Milo was the grantee of
a municipal franchise, and upon application, was granted a certificate of
public convenience for the operation of electric service in Pulilan,
Bulacan, in a decision of respondent commission
rendered on November 10, 1958.^[1]

On February 15, 1967,
said respondent sold his franchise and corresponding certificate of public
convenience to petitioner.  The parties
to the sale filed on April 24, 1967 with respondent commission a joint petition
for approval of the sale,^[2]
setting forth the inability of respondent-vendor to devote the necessary time
and attention to the operation of his franchise to the prejudice of the public
and the willingness and financial capacity of petitioner-vendee to operate the
franchise with the resultant promotion of public necessity and convenience.

After various hearings which were postponed by the parties’
agreement, respondent executed and submitted his affidavit of October 25, 1967 that “I have
no objection and will not interpose any in the early approval of the sale and
transfer subject of the above case.”

Associate Commissioner Gregorio C. Panganiban,
to whom the case had been assigned and who had earlier on June 15, 1967 issued
a provisional order of approval of the sale, thereupon scheduled the hearing on
November 16, 1967, at which hearing respondent’s counsel manifested that there
was no further reason for postponements of the hearing as were obtained
“several times in the past to enable the parties to reach an agreement on
certain collateral agreements between them” and “I will have no more
objection to the hearing of Case No. 67-2819 for approval of the sale and
transfer and also to the deputization of a hearing
commissioner to receive the evidence in support of the application.”

Commissioner Panganiban then delegated
first the reception of evidence to an Atty. Gueco,
but as the latter was not in his office, the parties asked for the deputization of another hearing commissioner.  Commissioner Panganiban
then delegated the reception of evidence to the then chief of the industrial
division, Engr. Pedro Talavera,
who was the same commissioner who received the evidence in the original case
granting respondent Milo the subject certificate of
public convenience.^[3]

Thereafter, Engr. Talavera
conducted inspections of petitioner-vendee’s electric service in the
municipality to verify his compliance with certain requirements for the
improvement of his electric service and installations, as required in the
commission’s provisional order of approval, and received the evidence in
support of the petition.

On December 19, 1967, on the basis of the evidence submitted,
Commissioner Panganiban rendered decision finding the
petition in order and approving the transfer and sale of the franchise and
certificate of public convenience, including all machinery and equipment in
favor of petitioner, as promoting the public interest in a proper and suitable
manner.

On January 19, 1968, or 30 days after the decision, respondent
Milo filed a petition for reconsideration alleging that the decision was
“incomplete and premature” since “collateral agreements”
only “partially” complied with, and “subsequent”
commitments not complied with, by petitioner-vendee, had not been submitted to
the commission for approval; that petitioner was not financially qualified to
operate and maintain the electric service; and that “the transaction with
applicant-vendee belongs to the category of inexistent or void contracts”
and that “no amount of approval by the commission can cure the inherent
nullity of the transaction.” Petitioner duly filed his opposition thereto
of March 13, 1968.

Subsequently, however, at the hearing of the motion for
reconsideration, respondent added a new ground and filed a supplemental motion,
assailing the validity of the proceedings before Engr.
Talavera, on the ground that not being a lawyer, he
could not be authorized to receive the evidence in the case.

On June 24, 1968, respondent commission, by a vote of four to
one, Commissioner Panganiban dissenting, issued its
order granting the reconsideration, setting aside the decision of December 19,
1967 and directing the commission secretary to set the case for hearing anew on
the ground that “Mr. Talavera is not a lawyer
and does not have the necessary preparation to process the evidence, oral and
documentary, presented in this case; and the provisions of Section 32 of Act
146, as amended, being clear that the hearing of cases may only be delegated to
duly qualified attorneys of the Public Service Commission or Division Chiefs
‘if they be lawyers’ x x x.”

On July 12, 1968, within the reglementary
30-day period, petitioner filed the present petition, submitting that appeal
was not a plain, speedy or adequate remedy, because of “the great
prejudice (to) petitioner who not only has paid respondent the purchase price
of the sale, but also has introduced many improvements and invested money and
effort in the operation of the franchise.” In the alternative, petitioner
submitted that should the Court rule appeal to be an adequate remedy, that the
petition, timely filed, be treated as one for review under Rule 44 and that the
questioned order be stayed.

The Court accepted the petition and issued summons on July 17, 1968 requiring respondents
to answer the petition.  On July 20, 1968, the Court, upon a
P1,000.00-bond, issued a writ of preliminary injunction enjoining the
enforcement of the questioned order.

The basic issue raised by the petition concerns the validity of
the decision rendered by Commissioner Panganiban on
the basis of the evidence received by Engr. Talavera, chief of the industrial division, who admittedly
is not a lawyer.  The resolution thereof
depends on this question:  may a joint
applicant in an uncontested joint petition in an industrial case before
the Public Service Commission for approval of the transfer and sale of a
certificate of public convenience made by him in favor of his co-applicant,
after submitting an affidavit that he has no objection to the early approval of
the sale and agreeing through counsel to the delegation by the commission of
the reception of evidence to the chief of the industrial division, be
permitted, after the commission had rendered its decision of approval as prayed
for and on the basis of the evidence thus received, to assail the decision so
rendered on the ground that the said delegate, not being a lawyer, could not be
legally authorized to receive the evidence in the case?

1.  Respondent Milo
must be held to be now clearly estopped from
assailing the delegation of the reception of evidence to Engr.
Talavera, then chief of the industrial division of
the commission, and questioning the validity of the decision thus rendered,
after not having presented any timely objection to such delegation but having
consented thereto.  In fact, the grounds
of his last-minute motion for reconsideration were ignored and brushed aside by
respondent commission, since the sale executed by him in favor of petitioner
was clearly legally valid and binding and he could not be heard in the
commission to question its validity, after he himself had submitted it for
approval, for alleged non-compliance with “collateral” and ”
subsequent” agreements, and the proper form for its annulment was not the
commission but the regular courts of competitive jurisdiction.  The alleged ground of nullity of the
delegation of Engr. Talavera
was just an after-thought submitted by respondent in a supplemental motion at
the hearing of his motion for reconsideration. 
Indeed, if respondent were to be consistent with his present posture
that the decision was a nullity because the evidence was received by Engr. Talavera, who is not a
lawyer, and therefore excluded from those expressly authorized in section 32 of
the Public Service Act (Comm. Act No. 146) since its amendment by Republic Act
No. 723 which took effect on June 6, 1952,^[4]
to be delegated to receive evidence – he must perforce concede the nullity of
the commission’s original decision granting him on November 10, 1958 the
subject certificate of public convenience, for the reception of evidence in
said case was likewise delegated to and received by Engr.
Talavera.  (The
whole question would then be moot, for respondent in such case would have no
valid certificate to retain or sell.)

2.  Whatever defect there may
have been in delegating the reception of evidence to a non-lawyer but to Engr. Talavera with his long
experience and knowledgability as chief of the
industrial division must be deemed waived by the parties’ consent to his
designation.  The objectives of the law
were well complied with in the designation of Engr. Talavera, as observed by Commissioner Panganiban
in his dissenting opinion:  “(D)uring the hearing of the Motion for Reconsideration,
counsel for the petitioner, added a new ground which is not included in the
petition for reconsideration to the effect that since Mr. Pedro Talavera who was then the Chief of the Industrial Division
of this Commission is not a lawyer, he can not be authorized to receive the
evidence in this case and the proceedings conducted by him is null and
void.  The practice in this Commission,
even in the past, is when a case is uncontested, like the present case, the
Commission delegates the reception of the evidence to Mr. Talavera,
who is an engineer and the Chief of the Industrial Division and who is believed
more competent than a lawyer to know about industrial cases like electric
plants, ice plants, cold storage plants and the like, as regards their
technical aspect.  No objection was
made to the delegation of the hearing to Mr. Talavera
by any party, so that whatever defect it has is deemed waived, particularly as
in this case when the party now questioning the delegation was present and even
agreed to it.”^[5]

3.  Such defect in the
delegation of reception of evidence to the person designated by the commission
was invariably held to be a procedural defect which was deemed waived if no
timely objection were raised by a party in our jurisprudence prior to the
enactment on June 6, 1952 of Republic Act No. 723 – when the Public Service Act
contained no provision authorizing the commission to delegate the conduct of
hearings and reception of evidence to hearing commissioners. “By timely
objection,” the Court pointed out in Enriquez & Co. vs. Ortega^[6],
“we mean when the point is raised at the beginning of the hearing or
investigation before the person assigned to receive the evidence, and not after
he has completed the investigation.  The
reason is obvious.  If the objection is
raised at the beginning of the hearing, and the objection is sustained, the
trouble and expense that a trial or an investigation generally entails could be
avoided and the case may then be tried by the Commission, or by a member
thereof, as the law requires.  And if the
objection is interposed opportunely and is overruled and the investigation is
continued over and above the objection of the opposing counsel, the party so
objecting can later reiterate his objection and pray for the nullification of
the proceedings for then it is not fair that he be made to suffer the
consequence resulting from the mistaken resolution of the officer assigned to
receive the evidence.” The Court thus emphasized that “the objection
must be timely interposed in order to prevent the presentation of the evidence
before a person who has no legal authority to receive the evidence.  If the objection is interposed after the
evidence had been presented, it comes late and should be disregarded.”

4.  In Rizal
Light & Ice Co. vs. Municipality of Morong,^[7]
involving the very question of a similar belated objection to the delegation of
the very same Engr. Talavera
as division chief to hear the case and receive the evidence, although he is not
a lawyer, and therefore excluded from those expressly authorized in section 32
of the Public Service Act, as amended by Republic Act 723, to be designated to
receive evidence, the Court, per Mr. Justice Zaldivar,
nevertheless adhered to the ruling of Enriquez, and other precedents, supra,
that such defect in delegation was a procedural, not a jurisdictional, point
that was waived by failure to interpose timely objection thereto.  Thus, it was held therein that “(T)his
Court in several cases has ruled that objection to the delegation of authority
to hear a case filed before the Commission and to receive the evidence in
connection therewith is a procedural, not a jurisdictional point, and is waived
by failure to interpose timely the objection and the case had been decided by
the Commission.  Since petitioner has
never raised any objection to the authority of Mr. Talavera
before the Commission, it should be deemed to have waived such procedural defect,
and consonant with the precedents on the matter, petitioner’s claim that the
Commission acted without or in excess of jurisdiction in so authorizing Mr. Talavera should be dismissed.”

5.  In the later case of Eastern
Tayabas Bus Co. Inc. vs. Public Service Commission,^[8]
however, the petitioner therein timely interposed an objection and motion for
inhibition and disqualification of the public utility adviser designated to
receive the evidence, since he was not a division chief, although a lawyer, and
the rationale of Enriquez,^[9]
was expressly invoked.  The Court found
that “It was alleged that at the hearing on September 26, 1968, counsel
for petitioner upon learning for, the first time that respondent Calderon,
while a member of the bar, was not included in the legal division of respondent
Commission and was not a division chief, moved for his inhibition or
disqualification, invoking the appropriate statutory provision^[10]
as well as two decisions of this Court.^[11]
Respondent Calderon was deaf to such a plea and insisted on continuing with the
hearing on the merits of such application, justifying such adamant stand on the
view that while neither a member of the legal division nor a division chief,
his being a public utility adviser placed him in the latter category.” The
Court thus held that “respondent Calderon could not thus have been validly
designated to conduct the hearing,” and in consonance with Enriquez
ordered the nullification of the proceedings before therein respondent
Calderon.

6.  Even if such defect in
the delegation of reception of evidence were to be considered a jurisdictional
matter, it must be raised by timely objection as in the Eastern Tayabas case cited above, for otherwise the complaining
party would fall under the principle enunciated by Mr. Justice Dizon for the Court in Tijam
vs. Sibonghanoy^[12]
that “after voluntarily submitting a cause and encountering an adverse
decision on the merits, it is too late for the loser to question the
jurisdiction or power of the court.” As restated in Crisostomo
vs. Reyes^[13]
and a number of subsequent cases,^[14]
the principle decrees that “While the jurisdiction of a tribunal may be
challenged at any time, sound public policy bars the petitioners from so doing
after their having procured that jurisdiction themselves, speculating on the
fortunes of litigation.”

7.  Finally, it may be noted
that petitioner’s right to operate the electric service in Pulilan,
Bulacan, is no longer open to question, petitioner
having been granted a twenty-five year congressional franchise therefor under Republic Act No. 6013 enacted on August 4,
1969.^[15]

ACCORDINGLY, the order of respondent commission dated June 24, 1968 is hereby set aside and
the writ of preliminary injunction heretofore issued is made permanent.  With costs against private respondent.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Barredo, Villamor, and Makasiar, JJ., concur.

Fernando, J., concurs on the ground set forth in par. 7 of the opinion.

^[1]Docketed
as Case No. 119036 of the Public Service Commission.

^[2]
Docketed as Case No. 67-2819.

^[3] Supra,
fn. 1.

^[4] The
pertinent provisions of Sec. 32, C.A. 146, as thus amended, provide:  “The Commission may also, by proper
order, authorize any attorneys of the legal division or division chiefs of the
Commission, if they be lawyers, to hear and investigate any case filed with the
Commission and in connection therewith to receive such evidence as may be
material thereto.  At the conclusion of
the hearing or investigation, the attorney or division chief so authorized
shall submit the evidence received by him to the Commission to enable the
latter to render its decision.”

^[5]
Emphasis furnished.

^[6]
92 Phil. 352 (1952).  To the same effect
are the precedents of Everett Steamship Corp. vs. Chuahiong,
90 Phil. 64 (1951); Silva vs. Ocampo, 90 Phil.
777 (1952); La Paz Ice Plant & Cold Storage Co. vs. Public Service
Commission, 89 Phil. 109 (1951); Raymundo Trans. Co. vs.
Cervo, 91 Phil. 313 (May 21, 1952); and Luzsteveco vs. Public Service Commission, 93 Phil.
735 (Sept. 16, 1953).

^[7]
25 SCRA 285 (Sept. 28, 1968).

^[8]
30 SCRA 620 (Nov. 28, 1969).

^[9]
92 Phil, 352 (1952); supra

^[10]
“Sec. 32 of Com. Act No. 146, as amended by Rep. Act No. 723 (1952).”

^[11]
“Silva v. Ocampo, 90 Phil. 777 (1952) and
R. J. Enriquez & Co. v. Ortega, 92 Phil. 352 (1952).”

^[12]
23 SCRA 29 (Apr. 15, 1968), citing Tan vs. Filipinas Cia.
de Seguros, L-10096, Mar. 23, 1956; Pindañgan etc. vs. Dans,
et al., G.R. L-14591, September 26, 1962; Montelibano,
et al., vs. Bacolod-Murcia Milling Co., Inc.,
G.R. L-15092; Young Men Labor Union, etc. vs. The Court of Industrial
Relations, et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100
Phil. p. 277.

^[13] Crisostomo vs. Reyes, 32 SCRA 54 (Mar. 25, 1970).

^[14] Vide
Lopez Carillo vs. AWA, 24 SCRA 566 (July 31, 1968); Rodriguez vs.
Court of Appeals, 29 SCRA 419 (Aug.
29, 1969).

^[15] Republic
Act No. 6013 is entitled “An act granting a franchise for an electric
light, heat and power system to Leopoldo T. Calderon,
Jr., in the Municipality of Pulilan, Province
of Bulacan.”
See Art. XIV, sec. 8, Philippine Constitution.