G.R. No. L-16899 - Dangwa Transportation Co., Inc. vs. Public Service Commission

Pangasinan Transportation Co., Inc. (PANTRANCO), the respondent, was operating passenger buses between Baguio and Tarlac via Kennon Road and Urdaneta.
PANTRANCO had been granted authority by the Public Service Commission (PSC) to make 5% round trips daily along the established route.

On June 29, 1959, PANTRANCO applied for authority to extend its route southward from Tarlac to Manila.
The application stipulated that there would be no change in the number of trips and that no passengers would be accepted between Tarlac and Manila.
The primary justification for the extension was the inconvenience encountered by many through passengers traveling between Baguio and Manila, who were forced to transfer at Tarlac, causing undue delay and, at times, difficulty with cargo.

Dangwa Transportation Company (the petitioner) filed opposition to the extension application, arguing that adequate service was already being rendered.
Other oppositions came from the Manila Railroad Company and the Estate of Buan, the latter operating the Philippine Rabbit Bus Line.
The petitioner’s arguments included:

There was no demonstrable demand for additional service between Tarlac and Manila.
Granting the extension would lead to ruinous competition among operators.

Respondent PANTRANCO presented its evidence at the hearing before the PSC on August 4, 1959.
On the same day, the petitioner filed an application for 22 additional trips on its own Baguio-Manila line, indicating an interest in expanding operations.
Subsequent hearings were held:

August 28, 1959 – continuation of the hearing.
December 18, 1959 – Manila Railroad Company presented its evidence.
January 13, 1960 – the petitioner was scheduled to present its evidence but failed to appear after filing a motion for postponement (for which no notice was given to the respondent).

The Commission denied the petitioner’s motion for postponement and proceeded to decide the case based on the evidence already on record.
It found that:

A significant number of passengers traveling from Baguio to Manila (and vice versa) were inconvenienced by having to transfer at Tarlac because PANTRANCO did not operate directly to Manila.
The petitioner's principal argument—no need for extension due to sufficient existing service—was undermined by its own subsequent application to increase trips on its Baguio-Manila route.
The evidence supported that public convenience would be significantly enhanced by allowing an express, non-stop service from Tarlac to Manila.

On January 28, 1960, the Commission decided in favor of the respondent, approving the extension request for an express service between Manila and Baguio.

Petitioner's subsequent elevation of the case to the Supreme Court challenged the Commission’s findings and decision.
The petitioner contended that:

The PSC improperly disregarded the doctrine of preferential treatment for long-established (regular) operators over new entrants or irregular operators.
The denial of its motion for postponement resulted in it being deprived of a fair chance to present its case.

The Supreme Court examined the comparative evidence and arguments, noting that unlike in the Batangas Transportation Co. vs. Orlanes case, PANTRANCO was a regular operator with an established service, and its extension was aimed at benefiting its loyal passengers rather than initiating new competition.

Whether the Public Service Commission erred in denying the petitioner’s motion for postponement and deciding the case without the petitioner’s subsequent evidence.
Whether, based on the evidence presented, there existed an unmet need for a direct, express bus service from Baguio to Manila.
Whether the doctrine prioritizing established operators over new or irregular ones applies in a manner that should favor the petitioner’s position.
Whether the fear of ruinous competition raised by the petitioner constituted a valid ground to deny PANTRANCO’s extension of service.