Title
Blanco vs. Manalo
Case
G.R. No. L-21842
Decision Date
May 29, 1971
PSC granted 330 additional taxicab units to existing operators, prioritizing them over new applicants; Supreme Court upheld the decision, citing public necessity, financial capacity, and policy considerations.
taxicab units
existing operators
estoppel

Case Summary (G.R. No. L-21842)

PSC’s Decision and the Allocation of Additional Units

The PSC rendered a decision granting authority to operate additional taxicab units to listed applicant-operators, while denying other applications. The dispositive portion authorized additional units to numerous operators, listing, for each operator, a specific increase of equipment, for an overall total of 330 additional taxicab units. It declared that public necessity had been duly proven and that granting additional units would promote public welfare in a proper and suitable manner. It further held that the applicant-operators were financially capable and were Filipino citizens or corporations with at least 60% Filipino capital ownership.

The PSC also specified conditions attached to the authority. Applicants were required to register the authorized additional units with the Motor Vehicles Office in Quezon City within a fixed period from the date of the decision and to submit certified copies of the certificates of registration within another period; otherwise, the decision would be cancelled and revoked. The PSC required operation of the additional units strictly according to the terms and conditions in their respective certificates of public convenience, with particular attention to the validity period of applicable certificates. The decision was to take effect immediately and became final after the prescribed notice period.

Procedural and Factual Backdrop Before the PSC

A total of 357 applications were filed separately with the PSC. Fifty-nine (59) applications came from existing taxicab operators for authority to obtain additional units in the City of Manila and its suburbs. The remaining two hundred ninety-eight (298) applications were filed by applicants described as non-operators, who requested certificates to operate taxicab units in the same territorial scope and vice-versa to any place in Luzon accessible by motor vehicle traffic.

The PSC dismissed fifty-seven (57) applications for failure of the applicants to appear on the hearing date. It also noted that Cases Nos. 121255, 121865, and 121328 had previously been dismissed upon petition of the applicants themselves. Some taxicab operators did not file their own applications for additional units but opposed the applications of the others. The City of Manila opposed the applications. The operator-applicants who sought additional units also opposed the non-operator applications, asserting that if the PSC found it necessary to authorize additional units, the increase should go to them because of their claimed priority.

After notice by publication, the PSC heard the applications jointly upon agreement of the parties and rendered the decision quoted in the opening portion of the record. The PSC found that public necessity existed for additional units in the area and that all applicants had the financial capacity to acquire and operate whichever units would be awarded. However, it considered it unreasonable to authorize the full scale of 14,995 units implicated in the applications and accordingly authorized only 330 additional units.

Controlling Logic Used by the PSC in Choosing Awardees

The PSC treated the determination of who should receive the 330 units as a matter requiring serious deliberation. It emphasized that while many applicants appeared to have financial capacity, it could not grant units to everyone because the number of applicants exceeded the number of authorized additional units. It also invoked a policy that a taxicab operator should have at least a minimum number of units. Based on these constraints, the PSC viewed it as unfair to grant some new applicants and deny others when all were allegedly under equal circumstances.

The PSC then relied on Supreme Court doctrines governing when preference may be given and under what circumstances additional certificates should be granted. It cited Bohol Land Transportation Co. vs. Jureidini (53, Phil. 560), for the principle that before granting a certificate of public necessity and convenience to a transportation company where another has a proper certificate, the latter should be given an opportunity to improve service if deficient or inadequate. It also cited Yangco vs. Esteban (58, Phil. 345), stating the doctrine that where two operators already serve the public, there is no reason to permit a third operator to enter competition. Further, it quoted Encarnacion Elchico vda. de Fernando et al. vs. Gallardo, G.R. No. L-4860, September 5, 1953, for the proposition that being old operators, the petitioners were entitled to protection and priority over new operators.

The PSC concluded that existing operator-applicants should receive preference because they were willing and capable of increasing their equipment. It also treated the recent increase in car prices, spare parts, and fuel as a factor affecting the ability of operator-applicants to make good business, and it referred to a prior fare increase granted by the Commission in Case No. 128510 on October 4, 1960, to allow a fair and reasonable return for investment. The PSC also considered its supervisory capacity and stated that it maintained the number of present operators at its existing level, citing its limited transportation inspectors for Manila and suburbs.

Finally, the PSC said it used the individual operation records of applicant-operators in distributing the additional units, with some receiving more than others. It sought to distribute units in proportion to existing authorized units, with the consequence that some operators received only one additional unit. It added that existing operators had advantages over new applicants due to experience, shops, mechanics, and personnel.

Post-Decision Conduct and the Supreme Court Petition

After the PSC decision, Jaime R. Blanco appealed by filing a petition for review. The record showed that petitioner failed to file his brief within the period granted. It also showed that respondents were required to file their brief within thirty days from notice under the Rules of Court, but no brief was filed.

Despite these omissions, the Supreme Court addressed the issues raised in the petition for review. Those issues were described by petitioner as pure questions of law that he allegedly squarely raised before the PSC.

The Issues Raised by Petitioner

Petitioner challenged, in essence, the PSC’s grant of preference to existing operator-applicants and several procedural and factual elements of the PSC’s allocation. He argued jointly that the PSC should have ruled that existing operators—except La Mallorca—had sold and/or assigned their franchises, and thus were estopped or had waived or lost any right to preference, and that those operators had violated PSC rules and therefore had no right to preference.

He also argued that the PSC erred by relying on an outdated factor of fair and reasonable return. He further alleged that PSC violated due process when it granted forty-eight (48) of the 330 additional units to nine (9) “unlisted” taxicab operators. He asserted that PSC erred in refusing to disturb its decision on the ground that the commissioners at reconsideration did not hear recorded evidence presented to predecessors. He also argued that PSC erred in refusing to disturb its decision because reconsideration and appeal did not stay immediate effectivity and the grantees had already invested. Lastly, petitioner insisted that the PSC should have granted him the franchise and units he applied for.

The Parties’ Positions Before the Supreme Court

Petitioner’s primary theory was that existing operators had disengaged from actual operation by selling and/or assigning franchises, and that they had violated PSC rules and regulations. He therefore claimed that the Commission should have denied them preference in allocating the additional units.

The PSC’s position, as reflected in the record, was that operator-applicants had the right—subject to the PSC’s approval—to sell, in whole or in part, their franchises or certificates of public convenience because these were treated as ordinary property. The PSC also addressed petitioner’s allegations about “sales” by noting that it found no sufficient evidence showing the kind of prohibited “trafficking” that would involve applicants seeking authority to speculate through later selling and then asking for additional authority.

Supreme Court’s Treatment of Preference, Sales, and Alleged Violations

The Supreme Court considered petitioner’s first and second issues jointly. It agreed with the PSC’s assessment that the record did not show that any of the operator-applicants had engaged in the alleged practice of trafficking, which the PSC had understood as behavior not aimed at serving the public but at speculation through subsequent sale of the authorized units and later requests for additional authority. The Court accepted that agreement with the PSC rested on the absence of evidence of such practice.

The “Fair and Reasonable Return” and Policy to Maintain Operator Levels

On petitioner’s third issue, the Supreme Court found no merit. It observed that the PSC had found that operator-applicants had not been making good business lately due to increases in car prices, spare parts, and fuel, which prompted the PSC to grant fare increases in the cited prior case.

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