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

Cambare versus Union Obrera de Tabaco Lines

The Case

This is a civil action for damages and injunction brought by Vicente Cambare, the owner and operator of motor launches engaged in the public freight and passenger service between the port of Tabaco, Albay and various points in the province of Catanduanes, against Union Obrera de Tabaco Lines, Incorporated, a corporation holding a coastwise license from the Bureau of Customs. Cambare complains that the defendant company operates over the same route, charges rates lower than those fixed by the Public Service Commission, and thereby causes him ruinous and illegal competition. The case matters because it draws the precise boundary between two questions that are easily confused: whether a motor launch operator may operate at all without a certificate of public convenience, and whether it may fix its own rates without the approval of the Public Service Commission. The Supreme Court answers the first in the affirmative and the second in the negative, and in doing so distinguishes the earlier ruling in Brown versus Suezo.

Procedural History

Cambare filed his complaint in the Court of First Instance of Albay, praying for a writ of preliminary attachment on the defendant's motor launches, for damages, for attorney's fees, and for an order prohibiting the defendant from operating as a public service. The defendant moved to dismiss and opposed the application for attachment, invoking the decision in Brown versus Suezo. The trial court granted the motion to dismiss for lack of cause of action and, necessarily, denied the motion for a writ of preliminary attachment, with no pronouncement as to costs. Cambare appealed from that order directly to the Supreme Court, assigning as error the dismissal of his complaint and the holding that he had no cause of action.

Facts

Vicente Cambare owned and operated several motor launches for public freight between the port of Tabaco, Albay and various points in Catanduanes, especially Virac and Calolbon, at rates duly authorized and fixed by the Public Service Commission. On July 18, 1958, the Public Service Commission granted the defendant company a provisional authority to operate passenger and freight service along the lines it had applied for, including the ports of Tabaco, Albay and Virac, Catanduanes. On October 2, 1958, that provisional authority was revoked by the Commission.

Earlier, on July 11, 1958, the defendant company had 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 it used two launches, the motor launch Glory, licensed from January 17, 1958 to January 16, 1959, and the motor launch U.O.T., licensed from March 26, 1958 to March 25, 1959. Its operation was the same business of carrying or towing passengers or freight along the same route covered by Cambare's motor launches.

Cambare alleged that after the issuance of the provisional authority the defendant charged rates lower than his own, or lower than those allowed and fixed by the Public Service Commission, causing him damages at the rate of 400 pesos daily, amounting to 30,000 pesos; that the defendant would continue to operate in utter disregard of the revocation of its provisional authority, causing further damages at the rate of 500 pesos daily; and that he had suffered moral damages of 20,000 pesos. The trial court dismissed the complaint, relying on Brown versus Suezo, which held that the Commission has no authority to require an operator of steamboats, motorboats and motor vessels to obtain a certificate of public convenience, and that one granted a permit by the Bureau of Customs to engage in ferrying passengers or towing freight does so legally.

Issues

• Whether or not the trial court erred in dismissing the complaint on the ground that it states no cause of action, in light of the ruling in Brown versus Suezo.
• Whether or not a motor launch operator holding a coastwise license from the Bureau of Customs may charge freight and passenger rates without the authority of, and regulation by, the Public Service Commission.

Applicable Provisions

Section 13, paragraphs (a) and (b), of the Public Service Act, as amended by Commonwealth Act 454, is the statutory basis discussed in the decision for the jurisdiction of the Commission over steamboats, motorboats and motor vessels. The Court quotes the Javellana ruling construing it:

This is evident from the provisions of Section 13 (a) and (b) of the Public Service Act, as amended by Commonwealth Act 454.

The provision bears on the case because it is the source of the Commission's jurisdiction over these water craft, which the Court divides into a power it does not have, to require a certificate of public convenience, and a power it does have, to prescribe schedules and rates.

Ruling

On the first issue, the Court held that the contention is meritorious and that the trial court erred. The principal question is not whether the respondent company can operate at all without a permit from the Public Service Commission, but whether it can charge rates for freight and passenger fares without authority from and regulation by the Commission. This distinguishes the case from Brown versus Suezo, where the very issue was the legality of the operation of the ferry services under a license issued by the Bureau of Customs. The ruling in Suezo is therefore inapplicable.

On the second issue, the Court held that the case in point is Javellana versus Public Service Commission, where it was declared that the Commission has authority to prescribe the schedule of trips of motor launches licensed by the Bureau of Customs to ferry or carry passengers and freight, and the rates to be charged by them. The Court quoted that ruling with approval:

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.

And further:

But we hold that the Commission had authority to prescribe the schedule of their trips and the rates to be charged.

Applying this, the Court found it undisputed that the defendant company held a coastwise license from the Bureau of Customs and operated the same business along the same route as the plaintiff, using the motor launches Glory and U.O.T. Its operation, traversing the open sea between the Bicol Peninsula and the island of Catanduanes, is interisland or coastwise trade service which does not require a certificate of public convenience from the Commission. Nevertheless, in line with Javellana, it must submit its rates and schedule of trips to the Commission for approval. Since the complaint was predicated on the defendant's charging of rates below those provisionally allowed and fixed by the Commission, and subsequently without authority at all after the provisional permit was withdrawn, it states a cause of action and should not have been dismissed.

Doctrine

A motor launch operator holding a coastwise license from the Bureau of Customs may lawfully engage in interisland or coastwise trade service without a certificate of public convenience from the Public Service Commission, because under Section 13 of the Public Service Act, as amended, the Commission has no authority to require steamboats, motorboats and motor vessels to obtain such certificates or to prescribe their definite route or line. But the Commission does have authority to prescribe the schedule of their trips and the rates to be charged, and the operator must submit its rates and schedule to the Commission for approval. Charging rates below those fixed by the Commission, or charging rates without its authority after a provisional permit is withdrawn, is actionable and gives a competing operator a cause of action for damages.

Disposition

The order of the trial court dismissing the complaint was reversed and set aside, and the case was remanded to that court for further proceedings in accordance with law, without pronouncement as to costs.

Remember This

The line to memorize is that a coastwise license from the Bureau of Customs dispenses with the certificate of public convenience but never with the approval of rates and schedules by the Public Service Commission. Examiners use this case to test the distinction between the power to require a certificate and the power to regulate rates, and to test whether a candidate can separate it from Brown versus Suezo.