LEONARDO GARCIA, PLAINTIFF AND APPELLANT, VS. FRANCISCO BONIFACIO AND SIMPLICIO PEÑA, DEFENDANTS AND APPELLEES.

Leonardo Garcia has appealed the order of the Manila court of first instance,
dismissing his complaint whefeby he attempted to recover damages and compel
defendants to convey to him the certificate of public convenience issued by the
Public Service Commission covering a certain jeepney. He claimed to have
purchased both. The Hon. Bienvenido Tan, Judge, held that plaintiff had no
rights enforceable before the courts—not even damages—since he had not secured
the sale’s approval by the said Commission. Thither, he implied, plaintiff
should go for relief.

Such certificate of public convenience plaintiff-appellant relates—”was
issued by the Public Service Commission, to Eustacio Lazcano in PSC Case No.
63399 (Exhibit G). Lazcano sold this certificate to defendant Simplicio Peña on
February 15, 1953 (Exhibit A), and Peña in turn sold it to defendant Francisco
Bonifacio on June 19, 1953 (Exhibit B). Plaintiff acquired the said certificate
from Bonifacio by deed of absolute sale dated February 27, 1956 (Exhibit F),
together with one TPU jeepney.”

Subsequently, the plaintiff discovered that the certificate in the name of
Lazcano which he bought from defendant Bonifacio “had already been cancelled”
because defendant Peña presented to the Commission a false deed of sale by
Lazcano to him of April 28, 1955, and obtained another certificate for himself,
even as he requested for—and received—permission to drop from the service the
very jeepney he (Peña) had previously transferred to Bonifacio (which plaintiff
acquired). For that reason, plaintiff avers, he was prevented from operating the
jeepney.

There are other circumstances, which defendants-appellees bring to our
attention to explain their side, particularly to support their defense that upon
plaintiff’s failure to secure the Commission’s approval, steps had to be taken
to prevent the certificate’s cancellation through abandonment. But these need
not be recounted, inasmuch as we agree that the courts were not the appropriate
place wherein to obtain what the plaintiff desired: conveyance of the
certificate, with the concommitant privilege to operate the jeepney as common
carrier.

The law is quite clear and specific. No sale of a certificate of public
convenience shall be operative.^[1] without
the approval of the Public Service Commission, which may be given even after the
contract of sale is perfected. The consummation of the sale, however, takes
place and the operation under the certificate begins, on the date to be fixed by
the Commission in its decree of approval.

Here are the statutory provisions;

“SEC. 20.—Acts requiring the approval of the Commission.—Subject to
established limitations and exceptions and saving provisions to the contrary, it
shall be unlawful for any public service or for the owner, lessee or operator
thereof, without the approval and authorization of the Commission previously had
* * *

“(g) To sell, alienate, mortgage, encumber or lease its property, franchises,
certificates, privileges, or rights, or any part thereof; * * * The approval
herein required shall be given, after notice to the public and after hearing the
persons interested at a public hearing, if it be shown that there are just and
reasonable grounds for making * * * the sale, alienation, lease, merger, or
consolidation to be approved, and that the same are not detrimental to the
public interest, and in case of a sale, the date on which the same is to be
consummated shall be fixed in the order of approval: Provided, however, That
nothing herein contained shall be construed to prevent the transaction from
being negotiated or completed before its approval. * * * “

Obviously, the Manila court had no authority to grant the relief demanded,
because the sale had not been okayed by the Commission. Plaintiff admitted he
never asked for such approval, which, by the way is not a mere formality that
could be dispensed with or taken for granted. As the statute directs, the
Commission must, before approving, be convinced after a hearing and notice, that
the sale shall not hinder the public’s convenience.

“I could not properly go to the Commission”—argues appellant—”because there
was a dispute as to the terms of the sale: whereas I claimed the whole
certificate for three jeepneys, defendant Bonifacio asserted he had sold part
only.” “The Commission,” he continues “can not be expected to act on a
petition for approval of a sale if the vendor himself denies having made the
sale.”

Herein lies the erroneous assumption, root and basis of plaintiffs,
contentions.

In Del Rosario vs. Vergara^[2] the alleged
seller denied having made the sale (of certificate) for which the approval of
the Commission was requested by the purchaser. The Commission, after listening
to both sides, approved the sale notwithstanding the seller’s objection. On
appeal, we affirmed.

Indeed, if as appellant represents, the certificate sold to him was later
illegally transferred to Peña, who now holds the Commission’s approval and
certificate, there is no better place than the Commission itself to thresh out
the respective rights of the parties, bearing in mind that said Commission is
the only entity empowered to withdraw the certificate from Pena and to transfer
it to herein plaintiff or grant him a new certificate. Of course, if the
evidence and the law applicable thereto so warranted.

Again, appellant doubts the usefulness of a resort to the Commission, because
he wishes to collect monetary damages, which, he believes, that Body has no
power to award.

Let us concede, for the moment, the alleged lack of authority on. the
Commission’s part—a point we do not decide.

Plaintiff’s amended complaint asked for:

“P-2a. Damages, by way of loss of earning, from February 28, 1956, up to the
time the certificate of public convenience above referred to is finally conveyed
to plaintiff, at the rate of P30.00 per day;

P-2b. Moral damages in the sum of P2,000.00;

P-2c. Attorney’s fees in the sum of P1,000.00, plus the costs of this suit;

P-3. Ordering defendant Simplicio Peña to pay to plaintiff exemplary damages,
by way of example or correction for the public good, in the sum of
P1,000.00.”

The first item could not evidently be granted, because plaintiff had no
right to operate the jeepney without having previously secured the approval
of the Commission which he never asked. Therefore, he could claim no loss of
earning. The moral and exemplary damages may only be recovered, if at all, after
plaintiff’s position is upheld. Yet even if the sale be disapproved, perhaps
plaintiff may recover, if such disapproval should rest on actionable acts of
defendants, or one of them. At any rate, damages if any should be awarded only
after the matter of the sale has been clarified, and/or approved.

As to attorney’s fees, when the complaint is dismissed—as in this case—the
defendant could not obviously be charged with plaintiff’s counsel fees.

In view of the foregoing, and finding no reversible error in the appealed
order, we hereby affirm it, with coats against appellant.

Paras, C. J., Padilla, Montemayor, Reyes, A., Bautista Angelo, Concepcion,
Reyes, J. B. L., and Endencia, JJ., concur.

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^[1]Cebu Autobus Co. vs. Lozano, 66 Phil.
51.

^[2]L-11648 decided April 28, 1958.