PANGASINAN TRANSPORTATION COMPANY, PETITIONER AND APPELLANT, VS. MANILA RAILROAD COMPANY, RESPONDENT AND APPELLEE.

The petitioner and appellant in this case
complains that the Public Service Commission erred in granting to the
Manila Railroad Company a certificate of public convenience to invade
the regular route adequately and efficiently served by the Pangasinan
Transportation Company.

The Pangasinan Transportation Company operates an autobus service
in the Province of Pangasinan and other provinces. The Manila Railroad
Company operates the Benguet Auto Line from Baguio by way of the Kennon
Road to Sison. The railroad now desires to extend its auto line from
Sison to Binalonan via Pozorrubio in the Province of Pangasinan. If
this be permitted it will be a competitor of the busses of the
Pangasinan Transportation Company.

The basic inquiry in this as in other public service commission
cases is whether or not it clearly appears that there was no evidence
before the commission to support reasonably its order. Our mature
judgment is that the findings of fact made by the commission do not
meet this test.

In one class of cases it has oft been emphasized, and properly,
that the convenience of the public must be taken into account and is a
prime criterion. In another class of cases it has as appropriately been
emphasized that the investments made by public service operators must
be protected rather than destroyed. Here we have the two principles
meeting in collision. It is our desire at once to afford all reasonable
facilities to the public and to afford all reasonable safeguards for
capital invested in the transportation business.

On the one hand it is shown that there are a few passengers whose
convenience would be better served if the Manila Railroad Company was
permitted to extend its buss service from Sison to Binalonan. However,
their convenience is more fancied than real, for the busses of the
Pangasinan Transportation Company and the Manila Railroad Company meet
at Sison and if there is any difference in the hour of meeting this
could readily be arranged. On the other side, it is disclosed that
while busses of the Pangasinan Transportation Company have a capacity
for thirtytwo pay passengers, they are only carrying an average load of
six passengers on these trips. It has further been established that
from June, 1932, to May, 1933, the Pangasinan Transportation Company
lost f*2,733.29 on this line alone. Under these conditions, can it be
said that public necessity is more compelling than what amounts to
ruinous competition?

The true effect of granting the petition of the Manila Railroad
Company would be to force the Pangasinan Transportation Company out of
the Sison-Pozorrubio-Binalonan territory. Moreover, if the railroad
company could extend its auto line to Binalonan, it requires no vast
amount of imagination to visualize the company extending its line to
the next municipality and so on indefinitely, to the great disadvantage
of other operators and with the result that they would be deprived of
substantial revenue. With all due respect to the Public Service
Commission which we are the first to uphold when its decisions can be
justified, we are unable to put the stamp of our approval on the
principle it has invoked and sanctioned in this case.

Agreeable to the foregoing, the assigned errors will be sustained,
and the decision set aside, with the costs of both instances to be paid
by the respondent and appellee.

Street, Villa-Real, Hull, Vickers, Butte, Goddard, and Diaz, JJ., concur.

 

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DISSENTING

IMPERIAL, J.,

The majority opinion for the first time abandons the uniform and
well established doctrine in this jurisdiction that this court shall in
no case substitute its discretion for the sound discretion of the
Public Service Commission as recognized by law, and that the judgment
rendered by it shall not be altered nor reversed unless the conclusions
therein are not reasonably supported by the evidence (sec. 35, Act No.
3108, as amended by Act No. 3316).

The facts of the case are those contained in the majority opinion;
but in addition thereto it must be stated that the extension of service
applied for, is supported by the testimony of the superintendent of the
Benguet Auto Line and also by written petitions signed by more than one
hundred (100) residents of Binalonan, most of them merchants; and by a
resolution of the municipal council of Binalonan praying that the
present service of the appellee be extended from Sison to Binalonan.

There can be no doubt that the requested extension of service will
redound to the benefit of the public concerned, inasmuch as the
proposed trips will save the passengers from the annoyance of having to
change cars at the station in Sison and to unload and load their
baggage and freight. This is shown by the petitions of numerous persons
and the resolution of the municipal council of Binalonan, and no
evidence was presented by the appellant which would weaken the
evidentiary force of said petitions and resolution. By reason thereof
it clearly follows that in this respect the judgment appealed from is
reasonably and sufficiently supported by the evidence.

In the instant case the doctrine above referred to finds special
application inasmuch as no new service is contemplated, but merely an
extension of the present line maintained by the Manila Railroad Company
is requested.

In the case of Raymundo Transportation Co. vs. Perez (56 Phil., 274), this court said:

“While it is the duty of the government as far as
possible to protect public utility operators against unfair and
unjustified competition, it is nevertheless obvious that public
convenience must have the first consideration.”

In the case of Mindanao Bus Company vs. Paradies (G. R. No. 38442, 58 Phil., 970), it was also said:

“It is the convenience of the public that must be
taken into account, other things being equal, and that convenience
would be effectuated by passengers who take buses at points in one part
of a line being able to proceed beyond those points without having to
change buses and to await the arrival of buses of a competitive
operator. We can perceive how under such conditions one public utility
could gain business at the expense of a rival.”

As will readily be seen, this court in said cases laid down the
doctrine that public convenience is the first and primordial
consideration to be kept in mind in determining whether a service
should be granted and whether a certificate of public convenience
should be issued. The majority opinion completely abandons the doctrine
thus laid down, and holds that, in conjunction with public convenience,
the private interest of an operator should be taken into consideration
in order to avoid ruinous competition.

In the case at bar the alleged ruinous competition does not exist
or, at least, it has not been satisfactorily established. Admitting
that the appellant has suffered losses in its trips from Binalonan to
Sison as shown by its evidence, this fact, however, does not
necessarily lead to the conclusion that a ruinous competition will
arise upon the approval of the extension of service requested by the
Manila Railroad Company. The failure of a business of this nature must
not be based upon the partial losses suffered by the operator, but upon
the result of the business on all the lines maintained by it. The
appellant may have really suffered losses in that particular line but
the same would be compensated if his business on all the lines shows a
reasonable margin of profit.

The majority opinion deprives a great part of the public of a
necessary and convenient service, and strips the Public Service
Commission of the exercise of its sound discretion, and for these
reasons, with all due respect, I dissent, and believe that the judgment
appealed from should be affirmed.

ACANCENA, C. J., concurs in this dissenting opinion of Justice Imperial.

ABAD SANTOS, J.:

I concur in the dissenting opinion of Justice Imperial.