PANTRANCO SOUTH EXPRESS, INC., PETITIONER, VS. BOARD OF TRANSPORTATION AND BATANGAS LAGUNA TAYABAS BUS CO., INC., RESPONDENTS.

This is a petition for certiorari and/or
prohibition with prayer for the issuance of a restraining order seeking to
annul the order of public respondent Board of Transportation dated January 4, 1979.

The antecedent facts, as culled from the pleadings, are as
follows:

On August 5, 1971, the then Public Service Commission granted
certificates of public convenience to private respondent Batangas
Laguna Tayabas Bus Co., Inc. (BLTB) for the operation
of twelve (12) bus units on the Pasay City – Legaspi City line (Case No. 70?5749); six (6) bus
units on the Pasay City – Bulan,
Sorsogon line (Case No. 70-5750), and ten (10) bus
units on the Pasay City – Sorsogon
line (Case No. 70- 5751) (pp. 59-64, Rollo).

On April 4, 1975, petitioner Pantranco
South Express, Inc. (PANTRANCO) filed a complaint against BLTB before public
respondent Board of Transportation (BOT), docketed as Case No. 75-31-C,
charging it with abandonment of services on said lines from August, 1971 to
April, 1975 and praying for the cancellation of BLTB’s
certificates of public convenience (pp. 69-70, Rollo).

On March 24, 1976,
in Cases Nos. 70-5749, 70-5750 and 70-5751, PANTRANCO filed an urgent petition
charging BLTB with abandoning said services from March, 1975 to March, 1976 and reiterating its prayer for the cancellation of
the certificates of public convenience
(pp. 77-78, Rollo).

BLTB did not file
any written answer either to the complaint in Case No. 75-31-C or to the urgent
petition in Cases Nos. 70-5749, 70-5750, and 70-5751.  Rather, in a Motion dated July 26,
1978, BLTB, referring to
hearings before the BOT on March 24, 1977 and April 13, 1977, alleged (pp. 126-128, Rollo):

“3. At said hearings, Respondent admitted non-operation of the bus
services authorized in Cases Nos. 70-5749, 70-5750 and 70-5751 and thus the
need for Complainant to present evidence in both proceedings may be dispensed
with.

“4. At the said hearings, Respondent advanced affirmative defenses
on Complainant’s Urgent Motion of March
24, 1977 (sic) which Respondent, in its Rejoinder of May 5, 1977, adopted also as its
affirmative defenses with respect to Case No. 75-31-C.

“Briefly, these affirmative defenses are:

(a) Respondent
actually registered under PUB denomination all the twenty eight (28) buses
authorized for operation under the certificates sought to be cancelled (Annex
‘A’);

(b) The following supervening factors which are beyond Respondent’s
control however, arose and prevented Respondent from operating the lines at
issue:

(1)  The gasoline crises starting 1971;

(2)  The destructive big floods in 1972 and 1974;

(3)  The general troubled conditions of peace and
order in 1971 and 1972 leading to the declaration of martial law;

(4)  Starting 1973 and on to 1974, 1975 and 1976
the nearly prohibitive cost of units and spare parts (if available at all), the higher costs of operations and acute tire
shortages particularly in 1974;

(5)  All these, which are of general public knowledge and known to the
Board, brought the whole land transportation industry in what might be termed as
in extremis condition causing the bankruptcy of
many operators, big and small; and

(6)  Complainant Pantranco
South Express, Inc. was not spared the ill effects of these adverse conditions
to the extent that up to the present it has not registered all the buses
required for its regular bus operations (Annex ‘B’, ‘B-1’).

“5. At the said hearings also, Respondent prayed that these
incidents in these proceedings be considered and, decided in the light of
present conditions which are:

(a) The certificates of public
convenience of Respondent are still valid;

(b) Respondent is willing and desirous
to operate (sic) the said certificates;

(c) Respondent has the capability to
operate, in fact, has ready the full twenty-eight (28) buses needed for full
operation of the authorized services;

(d) Complainant is not operating all
its authorized bus services for lack of sufficient rolling stock;

(e) The need for the services sought to
be cancelled is patent, in fact, urgent at the present time; and

(f) That the public interest is
paramount against other considerations such as the incidents in these
cases.”

On January 4, 1979,
the BOT issued an order, the dispositive portion of
which reads (p. 133, Rollo):

“In view of all the foregoing, this Board, in addition to its
rulings mentioned above –

“1. Orders respondent to operate within fifteen (15) days from
date hereof the whole complement of twenty-eight (28) units authorized under
the said certificates, utilizing for the purpose such units presently
authorized as RESERVES and inform the Board within ten (10) days from
commencement of operation, the makes and motor numbers of the units to be
operated for each line and the case numbers under which they are authorized for
appropriate entry in the records of the above-entitled cases, and

“2. Orders the fine of P10,000.00 imposed above to be paid to
this Board within ten (10) days from receipt by it of a copy of this Order and
declares the consolidated complaints filed in the above-entitled cases closed
and terminated.

“Failure of respondent/applicant to comply with any of the
foregoing requirements shall be considered sufficient cause for this Board to
withdraw the authority herein granted.

“SO ORDERED.”

It rationalized the non-cancellation of BLTB’s certificates of public convenience, as follows (pp. 128 A – 133, Rollo):

“Obviously, cancellation of a certificate of public
convenience is a penalty of the severest degree.  Its consequences are suffered not exclusively
by the operator; it extends to the travelling public
whose needs for transportation facilities would further be aggravated by a
diminution of needed services. 
Consequently, where such a penalty is prayed for, this Board requires
the evidence to be strong.  Less than that
this Board must apply the less severe penalties provided for by law, but equally
disciplinary in nature.

“Sec. 16 (n) of the Public Service Law empowers this Board ‘to
suspend or revoke any certificate x x whenever the
holder thereof has violated or willfully (sic) and contumaciously refused to
comply with any order, rule or regulation of the Board or any provision of this
Act.  x x x’

“Sec. 21 of the same law
provides that ‘every public service violating
or failing to comply with the terms
and conditions of any certificate
or any orders, decisions or regulations of the Commission shall be
subject to a fine not exceeding two hundred pesos per day for every day of
service during which such default or violation continues x x
x’

“A reading of both provisions would show that failure to
comply with the terms and conditions of any certificate of public convenience
is basically punished with a fine, unless the violation is wilful
or contumacious, in which case the penalty of suspension, or cancellation may
be imposed.

“Judged by the foregoing standards, this Board declares the
evidence of the complainant to be sadly lacking in elements that would qualify
the respondent’s failure to operate as wilful and
contumacious.  True the respondent did
not operate on its certificate from the time it was granted on August 4, 1971 up to the present.  It had not justified its non-operation from
said date up to September 2, 1972.  But on September
2, 1972, the respondent justified its non?operation by
writing to the Board, that because of unfinished portions of the road it could
not render the service authorized by the Board to be rendered.  The Board never overruled the respondent.

“x x x.

“At this point, it must be borne in mind that whether in the
case of application for new services, or for the cancellation of lines already
granted, this Board must determine what the public need is.

“This leads us into discussing what the public need is in the
areas covered by the certificates of public convenience in question.

“The  Board, in its
desire to  be responsive to public need,
has always kept itself informed of actual and latest transportation conditions
in the provinces, including the Bicol region.  Thru reports/complaints from the general
public, from reports of its fieldmen, and from its
own personal observations acquired thru inspection trips, this Board is aware
that buses which are operating are very much less than what has been
authorized.  This was officially
confirmed in a meeting of provincial and Metro-Manila bus operators held in Malacañang Palace
on June 21, 1976, presided
over by His Excellency, President Ferdinand E. Marcos himself.

“In Bicol region, for instance, in
the past four years (1974, 1975, 1976 and 1977) PSEI (PANTRANCO) registered and
operated less than 50% of its authorized units:

and among the lines not so operated or only
partially operated, either through expiration of certificates, petitioned
suspension of operation or for sheer lack of units are long distance lines from
Manila to the provinces of Quezon, Camarines Norte, Camarines Sur, Albay and Sorsogon aside from
lines serving inter-provincial and local needs in Quezon
province and the whole Bicol Region.  Among them are the following lines which are concurrent
in whole or in portions of the lines Pasay City
– Legaspi City,
Pasay – Sorsogon and Pasay
– Bulan, all the said lines requiring the operation
of some two hundred twenty seven (227) buses:

“x x x.

“The non-operation by PSEI (PANTRANCO) of these more than two
hundred (200) buses clearly requires the entry or operation of an equal number
of buses.  Any prohibition against an
effort to fill up a public need would be contrary to public interest.

“Public interest will better be served if respondent is
allowed to operate the service authorized in its certificate of public
convenience.  To cancel these
certificates at a time when the clamor and demand for such service have been
increasing day to day, prodded by the people’s desire to avail of the excellent
road conditions, which in turn conduces to fast and convenient travel, would be
to negate and turn back the clock of progress which has been seeping steadily
and constantly to the long neglected vast communal area that is the Bicol Region.  To
authorize the operation of these services will complement the government’s
multi-purpose development effort to hasten the Socio-Economic growth of these areas, notable
among which are the Philippines-Japan Friendship Highway, of which the routes
covered by applicant/respondent’s certificates traverse and the Bicol River Basin Development Project, a program designed
to tap the rich natural
resources of the region.”

Hence, the present petition.

On January 15, 1979,
We issued a temporary restraining order enjoining the BOT from enforcing its January 4, 1979 order (pp. 147-148, Rollo).

In this petition, PANTRANCO imputes grave abuse of discretion,
acting without or in excess of jurisdiction on the part of the BOT when it issued the questioned order, as
indicated by several circumstance that it enumerated.  Among these, only the following deserve discussion:

1) refusal to cancel the certificates of public convenience of
BLTB despite its abandonment and/or non-operation on the subject lines since August 5, 1971 up to the present;

2) using as basis for its questioned order BLTB’s
letter dated September 2, 1972 (wherein it justified its non-operation on
account of unfinished portions of the road) which is not part of the records of
the case; and

3) resorting to extraneous facts not supported by competent
evidence as basis for its conclusion that the demand of public need would be
more paramount than the need to penalize BLTB.

For its part, BLTB contends that:

1) the cancellation or non-cancellation of its certificates of
public convenience is addressed to the sound discretion of the BOT;

2) its letter dated September
18, 1972 (erroneously referred to as the letter dated September 2, 1972) forms part of the BOT’s records; and

3) the BOT acted correctly in the exercise of its sound
discretion and within its jurisdiction when it found that the demand of public
need would be paramount than the need to penalize it (BLTB).

There can be no dispute that the law (Section 16(n) of the Public
Service Act) gives to the BOT (successor of the Public Service Commission)*
ample power and discretion to decree or refuse the cancellation of a
certificate of public convenience issued to
an operator as long as there is evidence to support its action, as held by
this Court in a long line of cases, wherein it was even intimated
that in matters of this nature so long as the action is justified this
Court will not substitute its discretion for that of the BOT (see Javier, et
al. v. de Leon, et al., 109 Phil. 751; Santiago Ice Plant and Co. v. Lahoz, 87
Phil. 221; Raymundo Transportation Co. v. Cedra, 99 Phil. 99; Manila Yellow Taxicab Co., Inc. v. Castelo, 108 Phil. 394; Dagupan
Ice Plant Co., Inc. v. de Lucero, et al. citing Manila Yellow Taxicab Co.,
Inc., et al. v. Araullo, 34 O.G. 241; Sambrano v. Northern Luzon Transportation Co., 35 O.G.
2271).  The BOT, in refusing to cancel
the certificates of public convenience
of BLTB, relied on these pieces of evidence: 
(1) the letter of BLTB dated September 18, 1972; (2) reports/complaints
from the general public; (3) reports of its fieldmen;
and (4) its own observations acquired thru
inspection trips, all of which form part of its records.  As We have ruled before, the BOT is particularly a fact-finding body
whose decisions on questions regarding certificates of public convenience are influenced not only by the facts as disclosed by the
evidence in the case before it but also by the reports of its field
agents and inspectors that are periodically submitted to it (see La Mallorca and Pampanga Bus Co., Inc. v. Mercado, G.R. No. L­19120, November 29, 1965, 15 SCRA 343).  Likewise, the BOT has the power to take into
consideration the result of its own observation and investigation of the matter
submitted to it for decision, in connection with other evidence
presented at the hearing of a case (Manila Yellow Taxicab Co., Inc., et al. v.
N. & B. Stables Co., Inc.,
60 Phil. 851 citing Manila
Yellow Taxicab Co., Inc., et al. v. Danon, 58 Phil.
75; Manila Electric Co. v. Balagtas, 58 Phil. 429).

Taking into consideration BLTB’s letter
dated September 18, 1972,
it acted in good faith when it did not immediately operate on those lines and
not because of a design to prejudice public interest.  Certificates of public convenience involve
investment of a big amount of capital, both in securing the certificate and in
maintaining the operation of the lines covered thereby, and mere failure to
operate temporarily should not be a ground for cancellation, especially as
when, in the case at bar, the suspension of the service was directly caused by
circumstances beyond the operator’s control (Pangasinan
Transportation Co. v. F.F. Halili, et al., 95 Phil.
694).  In the absence of showing that
there is willful and contumacious violation on the part of the utility
operator, no certificate of public convenience may be validly revoked (Manzanal v. Ausejo, et
al., G.R. No. L-31056, August 4, 1988, 164 SCRA
36).  More importantly, what cannot be
ignored is that the needs of the public are paramount, as elucidated by the BOT
in its order.  In the exercise of its power
to grant or cancel certificates of public convenience, the BOT is guided by
public necessity and convenience as primary considerations (see Dizon v. Public Service Commission, et al., G.R. No.
L-34820, April 30, 1973, 50
SCRA 500).

Apparently, PANTRANCO’s purpose in
instituting the proceedings for cancellation of BLTB’s
certificates of public convenience is to remove it (BLTB) as a competitor in
the business in which they are both engaged (see Pangasinan
Transportation Co. v. F.F. Halili, et al., supra), which is detestable. 
Experience has demonstrated that healthy competition always redounds to
the benefit of the commuters and the development of transportation as a whole.

ACCORDINGLY, the petition is hereby DISMISSED.  The order of the Board of Transportation
dated January 4, 1979 is
AFFIRMED.  The temporary restraining
order issued on January 15, 1979
is LIFTED.

SO ORDERED.

Narvasa, (Chairman), Cruz, Gancayco, and Griño-Aquino, JJ., concur.

*
On September 23, 1972, Presidential Decree No.1 was promulgated
reorganizing the executive branch of the national government.  The Public Service Commission was then
abolished.  Its functions were
transferred to three specialized regulatory boards, namely, the Board of
Transportation, Board of Communications and Board of Power and Waterworks.  On June 19,
1987, Executive
Order No. 202 was issued creating the Land Transportation Franchising and
Regulatory Board (LTFRB) which now exercises the powers and functions of the
BOT.