EASTERN TAYABAS BUS CO., INC., PETITIONER, VS. PUBLIC SERVICE COMMISSION, THE HON. ENRIQUE MEDINA, ATTY. JESUS K. CALDERON, AND BATANGAS LAGUNA TAYA­BAS BUS CO., INC., RESPONDENTS.

The authority of respondent Public Service Commission to proceed
further with a pending application for a regular bus service covering barrios
and towns in the provinces of Camarines Sur and Norte up to the boundary of Pasay
and Manila^[1]
is challenged
in this certiorari and prohibition proceeding, filed on October 8, 1968, by
petitioner Eastern Tayabas Bus Co., oppo­sitor in such application.  The other respondents are Commissioner
Enrique Medina, Jesus K. Calderon, an attorney in the Public Service Commission
with the rank of public utility adviser, designated by respondent Medina to
hear the aforesaid application and Batangas Laguna Tayabas Bus Co., the applicant for such bus service.  The
jurisdictional questions arose from the failure of respondent Public Service
Commission to sustain a motion to dis­miss such application, or to hold its hearing in
abeyance, in view of its alleged repugnancy to an existing memorandum Order of
re­spondent Commission, declaring it to be its policy not to grant certificate
of public convenience along certain lines including that covered by the
application of respondent Batangas Laguna Tayabas Bus Co.  It
is the contention of petitioner that far respondent Commission to adopt a
policy that is binding on one operator but not on others, when no distinction
exists under the circumstances, is a manifestation of arbitrariness, sufficient
to oust it of jurisdiction.  Petitioner
would likewise justify its plea for the nullification of the action taken on
such application by respondent Commissioner on the ground that contrary to the
applicable statutory provision^[2]
the hearing thereon as of the date of its petition had been conducted by
respondent Jesus K. Calderon, a
public utility adviser, who is not legally empowered to do so.

In a resolution of October 10, 1968, this Court required re­spondent
to file an answer and upon petitioner posting a bond of P1,000.00 issued a
preliminary injunction restraining respondent Commissioner from proceeding with
the hearing or trial on the application, subject of the certiorari and
prohibition proceeding.  Such an answer
was filed on November 4, 1968, seeking the dis­solution of the preliminary
injunction and the dismissal of the petition for certiorari and
prohibition.  The petition was then set
for argument on February 26, 1969 with petitioner being given a period of
twenty five (25) days to submit a memorandum in lieu of oral argument and
respondents arguing the case.  With the
filing of such memorandum on April 16, 1969, the matter was deemed submitted
for decision.

It is our conclusion that the jurisdiction of respondent Public
Service Commission has not been ousted by its failure to grant the motion to
dismiss the questioned application or at least hold the hearing in
abeyance.  Nonetheless, the proceeding
thus far conducted should be nullified, respondent Jesus K. Calderon, designated
by respondent Public Service Commission to hear such application, not being
included among the subordinate officials, who, under the applicable statutory
provision, is empowered to do so.

1. In its application with respondent Public Service Com­mission,
dated October 9, 1967, respondent
Batangas Laguna Tayabas Bus
Co., after alleging that it is the holder of various certificates of public
convenience for the operation of bus services for passengers and freight in the
provinces of Quezon, Laguna, Batangas,
as well as portions of Camarines Norte, Cavite and Rizal to Manila and
back and that there has been an increase in passenger
traffic in the outlying barrios and towns in Quezon
and Camarines Norte, proposed to operate regular
services on certain lines from such places to the boundary of Pasay and Manila with the use of a total of seventy buses
in accordance with a proposed time schedule therein set forth, with the
statement that it was then operating seventy (70) equip­ment in various lines
in the provinces of Quezon and Camarines
Norte and therefrom to Manila and vice-versa, by
virtue of a lease contract duly approved by the Commission with petitioner
Eastern Tayabas Bus Company, the lease to expire on
March 11, 1968.  There was an assertion
as to its financial capability to maintain and operate such service, demanded
according to it by public necessity and convenience.  It did admit that petitioner Eastern Tayabas Bus
Co. has the right to operate such lines, but would justify its plea on the
ground of such firm lacking sufficient equipment and of avoidance of monopoly.^[3]

As could be expected, an opposition was filed by petitioner
before us, Eastern Tayabas Bus Co., on November 15,
1967, stressing that such proposed services would be but a duplication, only
under a different guise and schedule of trips, of the lines granted to it, that
applicant was not financially capable of render­ing and maintaining the
service, that such application was pre­mature, and that the allegation as to a
resulting monopoly was malicious and unfounded. 
A supplemental opposition was filed on November 28, 1967.^[4]

On April 26, 1968, in the course of the hearing of such
application, a motion to dismiss or to hold such hearing in abeyance was filed
by the oppositor, now petitioner Eastern Tayabas Bus Co.  It
was there alleged that such application of
respondent Batangas Laguna Tayabas
Bus Co.  was contrary to respondent
Public Service Commission’s Memorandum Order No. 2, Series of 1965, relied upon
by the applicant itself in seeking the dismissal or the holding in abeyance of
similar applications in the past thus giving rise to estoppel;
that in any event, petitioner should be preferred as the prior operator in
providing additional bus services; that it was false and untrue that applicant
would have excess personnel and equipment on the expiration of its lease
contract with petitioner; and that the claim that a monopoly would be created
was “malicious and immoral.”^[5]

Then came the challenged order of September 23, 1968 by
respondent Commission, which insofar as pertinent reads: “Upon
consideration of the Motion to Dismiss and/or To Hold Hearing in Abeyance filed
by oppositor in the above-entitled case dated April
26, 1968, and finding that said motion goes into the merits of the case, same
is hereby [denied], without prejudice to considering same anew in the decision
that may be rendered.”^[6]

1. It would thus appear that the fact of the denial of peti­tioner’s
motion and the reasons given for such action do not justify the charge hurled
at respondent Commission that it was guilty of grave abuse of discretion.  A study of the pleadings filed confirms the
above conclusion.

It must be
admitted of course that the petition as submitted, with its intimation of a
denial of equal protection by respondent Commission indicative of favoritism
shown to respondent appli­cant, possesses more than its share of
plausibility.  It did present its side in
the most favorable light, no effort being
spared to magnify alleged shortcomings of respondent Commission, even at the risk of slight
exaggeration, yielding the definite im­pression
that petitioner was the victim of arbitrary exercise of authority by respondent Commission.  We were thus persuaded to give it due course,
especially in view of the other ground alleged of a public official devoid of
power to act discharging a function
not conferred by law on him.  What did
turn out after the answer and the hearing is that based on the ground alone of
such denial of the motion to dismiss or to hold in abeyance, no warrant exists for an affirmative response to
this petition for certiorari and prohibition.

It must not be lost sight of that the jurisdiction to pass on the merit or lack of it of the
application in question is unquestionably possessed by respondent
Commission.  It could be lost of course
if in the process of adjudication, there is such arbitrariness or irregularity
as to constitute a grave abuse of discretion. 
As pointed out, there is no such showing.  The allegations in the peti­tion call to mind the words of Frankfurter: “It
is always easy to conjure up
extreme and even oppressive possibilities in
the exertion of authority.”^[7]
That does not suffice.  It must be shown that the procedure followed is tainted by improvidence or
caprice.  It would be an entirely different matter if there was a
violation of any of what Justice Laurel referred to as the “fundamental
and essential requirements of due process in trials and investi­gations of an
administrative character.”^[8]
Such is not the case, however.

The order of September
23, 1968 of respondent Commission complained of did not in reality
deny the motion to dismiss or to hold the hearing in abeyance.  It postponed final action on the matter.  It expressly affirmed that the action taken
by it was “without prejudice to considering the same anew in the decision
that may be rendered.” As of this stage then, it would be quite premature
to visit condemnation on such order.  To
repeat, there is no justification for a finding that a grave abuse of discretion
could be attributed to respondent Commission. 
What Justice Holmes one time said would appear to fit the occasion:
“Now that the case has been more fully considered than it could be on the
petition for certiorari it seems to us that the facts do not present the nice
question upon which the petitioner wished us to pass.”^[9]

2. Insofar however as this petition is predicated on the un­authorized
exercise of power of respondent Jesus K.
Calderon, designated by respondent Commissioner Enrique Medina to hear
the application, it rests on a firmer foundation.  We cannot
see, if such indeed were the case, how we can lend approval to what was done.

What do the facts show? 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.^[12]

Respondents however would seek to blunt the force of the above
allegations, while substantially admitting the truth of such facts, by
characterizing petitioner’s contention as to lack of authority as being
“too technical, narrow, and restricted because the rank of Public Utility
Adviser is even higher than that of an attorney of the legal division and
equivalent in rank to a division chief of the
Commission.” They would argue further: “Inasmuch as he is a lawyer
and qualified to receive evidence, he has the right and is justified in denying
petitioner’s Motion that he inhibit or disqualify himself from hearing the
case.”^[13]

There the matter rests.  On
such facts, what is the appli­cable law? We turn to the controlling statutory
provision.  It reads: “‘The
Commission may also, by proper order, authorize any of the 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.’”^[14]

Respondent Calderon could not thus have been validly designated
to conduct the hearing.  The words of the
statute leave no room for doubt.  They
convey only one meaning.  The structure
of the paragraph and the clarity of expression combine to deny power in
respondent Commission to authorize any other official not falling within the
class specified.  The provision does not
need any interpretation, only application. 
It denies any validity to the attempted conferment of authority to
respondent Calderon, who is manifestly outside its terms.  To lend approval to his designation is to
condone rather than to condemn a clear violation of the law.  This Court cannot be a party to such a
nullification of the statutory scheme.^[15]

WHEREFORE, the petition for certiorari is granted
nullifying all the proceeding thus far conducted by respondent Jesus K.
Calderon and ordering respondent Commission to pass upon PSC Case No. 67-6672
strictly in accordance with law.  With
costs against respondent Batangas Laguna Tayabas Bus Co.

Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar, Sanchez, nd Barredo, JJ., concur.

Makalintal, J., did not take part.

Ruiz Castro and Teehankee, JJ., in the
result.

^[1]
Case No. 67-6672 of the Public Service Commission.

^[2]
Section 32, Republic Act No. 146 as amended by Republic Act No. 723 (1952).

^[3]
Petition, Annex A.

^[4]
Ibid, Annexes B and B-1.

^[5]
Ibid, Annex D.

^[6]
Ibid, Annex N.

^[7]
Federal Com. Com. v. Pottsville Broadcasting Co., 309 US
134, 146 (1940).

^[8]
Ang Tibay v. Court, 69
Phil. 635, 64I-642 (1940).

^[9]
Beech-Nut Packing Co. v. P. Lorillard Co., 273 US 629, 633 (1927).

^[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]
Petition, pars. IV-17 to IV-19 and pars. V-1 to V-7.

^[13]
Answer, I A.

^[14]
Section 32 of Com. Act No. 146 as amended by Rep. Act No. 723 (1952).

^[15]
Cf. People v. Mapa, 20 SCRA 1164 (1967);
Pacific Oxygen & Acetylene Co. v. Central Bank, 22 SCRA 917 (1968); Dequito v. Lopez, 22 SCRA 1352 (1968); Padilla v.
City of Pasay, 23 SCRA 1349 (1968); Garcia v.
Vasquez, 27 SCRA 505 (1969); La Perla Cigar &
Cigarette Factory v. Capapas, 28 SCRA 1085
(1969); Mobil Oil Philippines v. Diocares,
L-26371, Sept. 30, 1969; Luzon Surety Co. Inc. v. Aguirre de Garcia,
L-25659, Oct. 31, 1969.