VILLA REY TRANSIT, INC., PETITIONER, VS. PANGASINAN TRANSPORTATION COMPANY, INC., ET AL., RESPONDENTS.

This is a petition for review of a decision of the Public Service
Commission cancelling the provisional authority granted to Villa Rey
Transit to operate a line of buses in connection with two certificates
of public convenience and granting authority to operate the same line
to Pangasinan Transportation Co.

On April 7, 1959, Villa Rey Transit, a corporation, purchased from
Valentin A. Fernando for the sum of P249,500.00 five certificates of
public convenience authorizing the operation of a fleet of TPU buses on
the lines, among others, Lingayen-Manila via Dagupan and
Lingayen-Manila via Camiling, and vice-versa. One of said certificates
was, however, excluded because it turned out that the same had already
expired before the purchase. On the same date, Villa Rey Transit filed
an application with the Public Service Commission for the approval of
the purchase as well as for authority to operate provisionally the
lines covered by the purchased certificates.

On May 19, 1959, the Commission approved provisionally the sale and
granted the provisional authority requested. In the order, however, it
was required that Villa Rey Transit register in its name the fleet of
45 buses it had acquired from Fernando within 45 days from the date of
the order.

Upon receipt of the order, Villa Rey Transit started operating the
buses on the line covered by the purchased certificates while at the
same time it began the job of repairing and reconditioning the buses
purchased to place them in road-worthy condition. Since this job could
not be completed within the 45-day period granted by the Commission
within which the buses had to be registered in purchaser’s name, Villa
Rey Transit asked for an extension of time to comply with the
requirement, which was granted, the period having been extended up to
July 30, 1959. Within the extended period, Villa Rey Transit registered
in its name all of the 45 buses purchased from Fernando and submitted
to the Commission certified copies of the corresponding certificates of
registration.

On July 22,1959, or three months after Villa Rey Transit had
purchased the certificates of public convenience from Fernando, and two
months after the Commission had provisionally approved the same, Villa
Rey Transit received copy of an order dated July 22, 1959 issued by the
Commission in another case wherein it provisionally approved a
certificate of sale executed by the Sheriff of Manila in favor of
Eusebio E. Ferrer and another deed of sale executed by the latter in
favor of Pangasinan Transportation Co. covering two of the five
certificates of public convenience which Villa Rey Transit had earlier
purchased from Fernando.

An examination of the record of that case revealed that it was also
an application filed by Ferrer and Pantranco for the approval of the
two sales abovementioned and for the issuance of a provisional
authority to operate the lines covered by the certificates of public
convenience sold. The examination also revealed that Ferrer claimed
ownership of said certificates by virtue of a certificate of sale of
July 16, 1959 issued by the Sheriff of Manila as a result of an auction
sale conducted by him on the same date by virtue of a levy in execution
issued by the Court of First Instance of Pangasinan in Civil Case No.
13798 in which Eusebio E. Ferrer was the plaintiff and Valentin A.
Fernando the defendant.

Upon receipt of said order, Villa Rey Transit filed with the
Commission a petition for reconsideration alleging that on the date of
the levy on execution made by the Sheriff of Manila by virtue of the writ of execution issued in said civil case, as well as on the date of
.he auction sale of the certificates of public convenience
abovementioned, Valentin A. Fernando was no longer the owner of said
certificates since Villa Rey Transit had earlier acquired them from
Fernando for valuable consideration and with the approval of the
Commission. In due time, Pantranco filed its opposition thereto.
Because the two applications for approval and for authority to operate
refer to the same certificates of public convenience, the same were
heard jointly, together with the petition for reconsideration, in which
hearing the parties adduced their respective evidence.

In the meantime, an appeal was taken by Fernando from the decision
rendered in Civil Case No. 13798 pursuant to at decision of the Court
of Appeals, said appeal being still pending up to the present time.
Likewise, subsequent to the receipt of the order approving the sale
made by Ferrer of the two certificates in favor of the Pantranco, Villa
Rey Transit filed an action in the Court of First Instance of Manila
for the cancellation and revocation of the sheriff’s sale made in favor
of Ferrer, as well as the deed of sale made by the latter in favor of
Pantranco, covering the two certificates of public convenience in
question. Said action is also still pending up to the present time.

On September 13, 1960, the Public Service Commission rendered a
joint decision wherein it virtually held that Pantranco is the lawful
owner of the two certificates of public convenience and hence it issued
a certificate of public convenience in its favor to operate the lines
covered by them and, as a consequence, it ordered Villa Rey Transit to
cease operating on the same lines as was previously authorized by the
Commission.

Its motion for reconsideration having been denied, Villa Rey Transit interposed the present petition for review.

This petition is anchored on the following propositions:

1. Although in its order of July 22, 1959 and in its joint decision
   the Commission expressly stated that petitioner had acquired by
   purchase in good faith and for valuable consideration the certificates
   of public convenience in question and that it had provisionally
   approved the same, the Commission did not declare petitioner the
   rightful owner thereof with the right to operate the lines covered by
   them in accordance with the terms and conditions imposed upon it;

2. Although
   in said order and joint decision the Commission expressly stated that
   at the time the Sheriff of Manila levied in execution said certificates
   on July 16, 1959 they were no longer the property of Valentin A.
   Fernando because as early as April 7, 1959 petitioner had already
   acquired them by purchase, the Commission failed to declare that
   neither Ferrer nor Pantranco acquired any right to said certificates
   arising from the levy and auction sale conducted by the Sheriff of
   Manila; and

3. Although it was obvious that
   the dispute between the parties was one involving a question of
   ownership and the Commission already well knew that said question had
   already been submitted by the parties to the proper regular courts of
   competent jurisdiction, it proceeded nevertheless to determine and
   resolve the same when it should have held it in abeyance pending
   resolution thereof by the regular civil courts.

It appears that petitioner bought the two certificates of
convenience in question, together with other three, from Valentin A.
Fernando, on April 7, 1959, covering 45 buses, for the sum of P249,500.00, of which P100,000.00 was paid in cash, and the balance to
be paid later to various creditors of Fernando. This sale was
provisionally approved by respondent Commission od May 19, 1959,
granting at the same time provisional authority to operate the lines
covered by the certificates. This authority was granted subject to the
condition that petitioner should register in its name the fleet of 45
buses it had acquired within 45 days from the date of the order of
approval.

Upon receipt of said order, petitioner started operating the buses
on the lines covered by the purchased certificates while at the same
time began repairing and reconditioning said buses to place them in
road worthy condition. Since this job could not be completed within the
45-day period originally granted by the Commission, petitioner filed a
petition for extention which was granted, the period having been
extended up to July 30, 1959. And within the extended period,
petitioner registered in its name all the 45 buses and submitted to the
Commission certified copies of the certificates of registration.

It developed, however, that the papers relative to the petition for
extension as well as the order granting the same were misplaced or
mixed with the records of other cases with the result that when the
petition for approval of the purchase of the certificates was filed by
Pantranco so the Commission declared that petitioner was not entitled
to continue with their operation because it failed to register the
buses in its name as required in the order. The Commission said that
“This lack of service has worked prejudice to the public because it has
been deprived of the facilities which could be rendered by its buses.”
It is undoubtedly because of this misapprehension that the Commission
gave the right of preference to Pantranco and not to petitioner. This
misapprehension should be rectified m fairness to petitioner.

Considering that petitioner purchased the certificates in question
in. good faith and for valuable consideration and much ahead in point
of time then either Eusebio E. Ferrer or the Pantranco, which fact was
found to be well-proven by respondent Commission, no valid reason is
seen why the right of preference should not be given to petitioner.
This is more so when the financial condition of petitioner has not been
contested. On the contrary, it was acknowledged that it can adequately
undertake the operation without jeopardizing the interest of the riding
public. And it is no reason to hold that Pantranco is better
financially equipped because it is an operator that has many and
extensive lines plying between Manila and Lingayen and is much older
in the business, for such theory is conducive to monopoly and is
contrary to the principle that promotes a healthy competition.

It is true that the Commission has been influenced by the impression
that petitioner has violated its provisional authority for having
operated buses which were not registered in its name, but this is again
based on a misapprehension, the truth being that petitioner operated
the same buses that it bought from Fernando although they have not yet
been registered in its name. Petitioner had to make use of said buses
even if not registered in its name because it started its operation
immediately, and it had 45 days within which to effect the
registration, which was extended up to July 30, 1959. There was no
requirement that petitioner must first register the buses in its name
before it could start to operate, nor was there any prohibition to
operate unless the buses are first registered. And when petitioner was
given an extension to effect their registration it complied with the
requirement by registering all the buses within the period extended.
The finding that petitioner violated its authority has, therefore, no
basis.

Wherefore, the decision appealed from is reversed. The order of
respondent Commission dated July 22, 1959 is hereby set aside. In lieu
thereof, respondent Commission is hereby directed to allow petitioner
to continue the operation of the lines covered by the certificates in
question provisionally, until the question of ownership thereof shall
have been determined by the proper regular courts. Costs against
respondents, other than the Public Service Commission.

Padilla, Concepcion, Reyes, J. B. L., Barrera, Paredes, and Dizon JJ., concur.