A. L. AMMEN TRANSPORTATION CO., INC., PETITIONER, VS. DANIEL RAYALA AND ENRIQUE DE LEON, RESPONDENTS.

Ammen Transportation versus Rayala

The Case

This is a petition brought by Ammen Transportation Company against two holders of certificates of public convenience, Daniel Rayala and Enrique de Leon, decided by the Supreme Court in May 1960. Ammen, a pre-war operator over the very lines in question, opposed before the Public Service Commission the application of Rayala to convert his emergency certificate into a regular one, and the application of De Leon to renew his five-year certificate. The Commission granted both applications, and Ammen appealed. The case matters because it fixes the standard by which the Commission weighs a new operator's certificate against the claim of an old operator that it can already serve the public: the test is not the mere resumption of pre-war operations, but the public need and convenience as shaped by changed conditions.

Procedural History

In the first case, Rayala, holder of an emergency certificate of public convenience to operate an auto-truck service over the Oas lines in Albay, applied to the Public Service Commission for a regular certificate. Ammen, a pre-war operator over the same lines, filed an opposition. After hearing, the Commission granted the application, and Ammen appealed.

In the second case, De Leon, holder of a five-year certificate of public convenience over several lines in Camarines Norte, applied for a renewal for another five years. Ammen again opposed, on the ground that it was already rendering complete, efficient, adequate and satisfactory service on the same lines. The Commission, after considering each party's evidence, granted the application, and Ammen appealed. Both appeals were resolved by the Supreme Court in one decision, which affirmed the Commission.

Facts

Rayala held an emergency certificate to operate an auto-truck service over the Oas lines in Albay. He asked the Commission to make his certificate regular and permanent. Ammen, which had operated over the same lines before the war, opposed, alleging that it had already resumed its pre-war service with the acquisition of 263 units in 1952, so that the conditions that warranted the emergency certificate no longer existed.

The evidence for Rayala showed heavy traffic throughout the week on market days, buses filled with passengers and freight, many students traveling to schools and colleges in the morning and returning in the afternoon, more commercial and industrial activity in Albay and Camarines Sur, laborers migrating from Albay to Camarines Sur during harvest season, and an increased population requiring more transportation facilities. Ammen, through its Assistant Traffic Manager, countered that Rayala had not been profiting from his business, as shown by a certification of the municipal treasurer of Oas, and that Ammen had completed its pre-war equipment of 263 units.

The emergency certificate itself provided that, considering that the service applied for was authorized during a state of emergency, the Commission reserved the right to alter or modify its conditions or impose additional ones in order to adjust the applicant's operation to changing conditions and to eventual resumption of operation under normal conditions. In the second case, the evidence showed that merchants made daily trips to and from Daet to bring their products and transact business, that transportation was urgently needed on the Mercedes line because it was a fishing district whose products had to reach Daet without delay, and that mines were operating in Panganiban, requiring transportation for laborers and for the requirements of the mining operations.

Issues

• Whether or not Rayala's emergency certificate was subject to the condition that it expires upon Ammen's resumption of its pre-war operations.
• Whether or not the Commission erred in granting Rayala's application for a regular certificate despite Ammen's completed pre-war equipment of 263 units.
• Whether or not the Commission erred in granting De Leon's application for renewal despite Ammen's claim that it was already rendering complete, efficient, adequate and satisfactory service on the same lines.

Applicable Provisions

The decision turns on the terms of the emergency certificate itself, which the Court quotes. It provides:

Considering the service applied for in this case is authorized during a state of emergency, the Commission hereby reserves the right to alter or modify the conditions herein enumerated or to impose additional conditions in order to adjust applicant's operation to changing conditions and to eventual resumption of operation and under normal conditions.

This clause bears on the case because Ammen read it as making the emergency certificate expire upon its resumption of pre-war operations, while the Court read it as a reservation of regulatory flexibility, not a condition of expiry.

Ruling

On the first issue, the Court refused to sustain Ammen's contention that the emergency certificate was subject to the condition that it expires upon Ammen's resumption of its pre-war operations. Ammen's acquisition of 263 units could not be deemed the sole event contemplated by the clause on changing conditions and eventual resumption of operation under normal conditions. The Court listed the other factors the Commission may properly consider:

The changes brought about by the last world war, the complications of rehabilitation, the economic and industrial strides, the increase in population, the intensified agricultural programs, and men's inspiring interest in education, are a few other factors properly to be considered by the Commission in determining whether or not respondent's applications should be granted.

On the second issue, the Court held that the Commission did not err in granting Rayala a regular certificate. The evidence of heavy market-day traffic, student travel, expanded commercial and industrial activity, harvest migration, and increased population supported the finding of public need, and the Commission was entitled to weigh these against Ammen's completed equipment.

On the third issue, the Court applied the same considerations to De Leon's renewal. The daily business trips of merchants, the urgent need on the fishing line at Mercedes, and the transportation requirements of the mines at Panganiban justified the renewal, notwithstanding Ammen's claim that it already rendered adequate service.

Doctrine

An emergency certificate of public convenience is not automatically extinguished by the old operator's resumption of pre-war operations. The reservation in the certificate allowing the Commission to alter or modify conditions and to adjust the operation to changing conditions and eventual resumption of operation under normal conditions is a grant of regulatory flexibility, not a condition of expiry.

The grant of a certificate of public convenience, whether original or by renewal, is determined by public need and convenience as shown by present conditions. The Commission may consider the changes brought about by war, the complications of rehabilitation, economic and industrial strides, increase in population, intensified agricultural programs, and the people's interest in education. The fact that an existing operator has completed its equipment does not, by itself, bar the grant of a competing certificate where the evidence shows a need for more service.

Disposition

The Supreme Court affirmed both appealed decisions of the Public Service Commission, with costs against Ammen Transportation Company.

Remember This

The line to memorize is that an emergency certificate does not expire by the mere resumption of the old operator's pre-war service, because the Commission weighs changing conditions and public need. Examiners use this case to test the standard for granting and renewing certificates of public convenience against the opposition of an existing operator.