VICENTE CAMBARE, PLAINTIFF AND APPELLANT, VS. UNION OBRERA DE TABACO LINES, INCORPORATED, DEFENDANT AND APPELLEE.

Plaintiff Vicente Cambare appeals from the order dated January 5, 1959
of the Court of First Instance of Albay (in Civil Case No. 1992)
dismissing his complaint against defendant Union Obrera de Tabaco
Lines, Incorporated, for lack of cause of action, and denying his
motion for writ of preliminary attachment on certain property owned by
said defendant.

The facts of the case are succinctly stated in the decision of the lower court, thus:

“Plaintiff
Vicente Cambare is the owner and operator of several motor launches for
public freight between the port of Tabaco, Albay and various points in
the province of Catanduanes, especially Virac and Calolbon, with rates
duly authorized and fixed by the Public Service Commission. On July 18,
1958, the Public Service Commission granted a provisional authority to
the defendant to operate passenger and freight service along the lines
applied for, including the ports of Tabaco, Albay and Virac,
Catanduanes. On October 2, 1958, the provisional authority was revoked
by the Public Service Commission. However, on July 11, 1958 defendant
Union Obrera de Tabaco Lines, Inc. obtained a coastwise license from
the Bureau of Customs to engage in the coastwise trade of the
Philippines. In offering its services to the public, the defendant
utilizes two launches, namely the motor launch ‘Glory’, the license is
for a period from January 17, 1958 to January 16, 1959. As regards the
motor launch ‘U.O.T.’, the license is from March 26, 1958 to March 25,
1959. The operation of the defendant is the-same business of carrying
or towing passengers or freight along the same route covered by the
plaintiff’s motor launches.

“The plaintiff’s complaint
further alleges that posterior to the issuance of the provisional
authority, the defendant has charged rates lower than those of the
plaintiff, or those allowed and fixed by the Public Service Commission,
by reason o£ which the plaintiff has suffered damages at the rate of
P400.00 daily, which amounts to P30,000.00; that the defendant will
continue to operate in utter disregard of the revocation of its
provisional authority, thus causing the plaintiff to suffer damages
from such illegal operation at the rate of P500.00 daily; and that the
plaintiff has likewise suffered moral damages in the sum P20,000.00.
The plaintiff then prays that a writ of attachment be granted on the
motor launches of the defendant; that the defendant be ordered to pay
damages at the rate of P400.00 daily from July 18, 1958 to October 7,
1958, for damages at the rate of P500.00 daily from October 8, 1958
until it stops operation, for moral damages of P20,000.00 and
attorney’s fees; and that the defendant be prohibited from operating as
a public service in ferrying passengers and freight by reason of the
revocation of the provisional authority granted to him on July 18,
1958.”

Relying on our decision in the case
of Brown vs. Suezo 104 Phil., 388, the trial court dismissed
plaintiff’s complaint and denied his motion for writ of preliminary
attachment, stating in part as follows:

“The
defendant, through counsel, in its motion to dismiss and opposition to
the issuance of the writ of preliminary attachment, cites the very
recent case of Charlie Brown vs. Constancio S. Suezo, 104
Phil., 388 promulgated by the Supreme Court on August 25, 1958. It was
held there that the Public Service Commission has no authority to
require an operator to obtain a certificate of public convenience for
the operation of steam boats, motor boats and motor vessels, whether
these means of transportation are used in the ferry or coastwise trade
and that a person, who is granted a permit by the Bureau of Customs to
engage in ferrying passenger or towing freight, does so legally * * *.

“The
aforementioned case is in point to the instant suit in controversy.
There is, therefore, no other course for the Court except to adopt and
follow the doctrine enunciated therein, which carries with it the
directive to have plaintiff’s complaint dismissed.

“It is
contended by the plaintiff that the defendant, even if it holds a
coastwise license, cannot automatically engage in the traffic of
passengers and freight as a public service, like the plaintiff, and
charge its own rates, the Public Service Commission not withstanding.
This argument inevitably leads to the conclusion that the defendant is
offering the plaintiff a ruinous and illegal competition. Ruinous and
illegal competition was also alleged in the complaint filed by Charlie
Brown in the aforecited case. And the Supreme Court ruled that the
operation of defendant Constancio S. Suezo, who was duly granted a
permit by the Bureau of Customs to engage in ferrying passengers and
freight or towing freight, could not be declared unauthorized or
illegal. On the same basis, the operation of the defendant herein
cannot be declared unauthorized or illegal.

“Wherefore, the defendant’s motion to dismiss is hereby granted, and the complaint dismissed. Necessarily, the motion for a writ of preliminary attachment filed by the plaintiff is denied. There is no pronouncement as to costs.

“SO ORDERED.”

Plaintiff-appellant claims that the lower court erred in dismissing the complaint and holding that he has no cause of action.

The contention is meritorious. The principal question presented here is not whether respondent company can operate at all
without a permit from the Public Service Commission but whether it can
charge during its operation, rates for freight and passenger fares
without authority from and regulation by the Public Service Commission.
This distinguishes this case from that of Brown vs. Suezo relied upon by the trial court in dismissing the instant complaint. In the Suezo
case, the issue was itself the legality of the operation of the ferry
services of Suezo under a license issued by the Bureau of Customs. We
there held that “Appellee Constancio Suezo was duly granted permit by
the Bureau of Customs to engage in ferrying passengers or towing
freight in said areas (crossing the Panguil Bay, from Ozamis City to
Baroy, Lanao, by way of Tubod, Lanao) ; hence, said operation cannot be
declared to be unauthorized or illegal” as prayed for by Brown.
Consequently, the ruling in the Suezo case is inapplicable to the case
now before us.

Upon the other hand, the case in point is that of Javellana, et al. vs.
Public Service Commission, et al., 98 Phil., 964, where we declared
that the Public Service Commission has the authority to prescribe the schedule
of the trips of motor launches licensed by the Bureau of Customs to
ferry or carry passengers and freights, and the rates to be charged by
them. In the cited case, we held:

“We
believe that it will be more in consonance with the spirit of the law
to consider steamboat or motorboat service between the different
islands, involving more or less turbulent and dangerous waters of the
open sea, to be coastwise or interisland service. Any way whether said
service between the different islands is regarded as ferry service or
coastwise trade service, as long as the water craft used are
steamboats, motorboats or motor vessels, the result will be the same as
far as the (Public Service) Commission is concerned. This is evident
from the provisions of Section 13 (a) & (b) of the
Public Service Act, as amended by Commonwealth Act 454 * * *. It is
true that steamboats, motorboats and motor vessels are included in the
public service over which the Commission has jurisdiction. It is
equally true, however, that as regards those means of transportation,
whether used in a ferry or in the coastwise trade, the Commission has
no authority to require them to obtain certificates of public
convenience or prescribe their definite route or line. So, inasmuch as
the water craft used by the respondent in the service between Calapan
and Batangas, namely, ‘R. O. Barron I’, ‘R. O. Barron II’, and
‘Batangas Liner’ are motorboats and of considerable tonnage at that, The
Commission has no authority to require the said boats or the respondent
to obtain a certificate of public convenience or to prescribe their
route such as the trip from Calapan to Batangas via Lobo. But we hold
that the Commission had authority to prescribe the schedule of their
trips and the rates to be charged.

*           *           *           *           *           *           *

“In
view of the foregoing, we hold that the motorboat service between
Calapan, Oriental Mindoro and Batangas, Batangas, constitutes
interisland and coastwise trade; that the Commission has no
authority to require petitioners and respondents, operators of said
service to obtain a certificate of public convenience, or permit to
operate, but that it may prescribe the schedule of trips and passenger and freight rates.
The parties herein are reverted to their status as operators before the
commencement of these proceedings before the Commission, and such
proceedings, including the orders involved are held null and void. No
costs.” (Italics supplied.)

It is not disputed in the instant case that on July 11, 1958, defendant company obtained a coastwise license from the Bureau of Customs “to engage in the coastwise trade
of the Philippines.” It operates the same business of carrying or
towing passengers or freight along the same route covered by
plaintiff’s motor launches, namely, “between the port of Tabaco, Albay
and. various points in the province of Catanduanes, especially Virac
and Calolbon”, using 2 motor launches named “Glory” and “U.O.T.”

The operation of defendant company, traversing as it does the open sea
between the Bicol Peninsula and the island of Catanduanes, is,
therefore, interisland or coastwise trade service which does not
require a certificate of public convenience from the Public Service
Commission. However, in line with our ruling in the Javellana case, supra,^[1]
it must, nevertheless, submit its rates and schedule of trips to the
Commission for approval. This being the case, plaintiff’s complaint
against the defendant company predicated on defendant’s charging of
rates below those provisionally allowed and fixed by the Public Service
Commission and, subsequently, without authority at all, after the
provisional permit was withdrawn, states a cause of action and should
not have been dismissed.

For all the foregoing, the order of
the trial court appealed from is hereby reversed and set aside, and the
case is remanded to said court for further proceedings in accordance
with law. Without pronouncement as to costs. So ordered.

Bengzon, Acting C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Paredes, and Dizon, JJ., concur.

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^[1] Reiterated, in effect, in the case of Jugueta, et al. vs.
Public Service Commission, et al. (105 Phil., 721), where the authority
of the Commission was upheld to fix the rates charged by an operator of
a motorboat service between Atimonan (Quezon Province) and Alabat
Island licensed by the Bureau of Customs, without requiring a
certificate of public convenience from the Public Service Commission.