Title
Luzon Brokerage Co., Inc. vs. Public Service Commission
Case
G.R. No. 37661
Decision Date
Nov 16, 1932
A customs brokerage firm challenged the Public Service Commission's jurisdiction, arguing its private truck operations for clients did not constitute a public service. The Supreme Court ruled in favor, holding the firm was not a common carrier or public utility under the law.
common carrier
public utility
regulation
A

Case Summary (G.R. No. 37661)

Factual Background

The LUZON BROKERAGE CO., INC. conducted for approximately twenty years the business of customs brokerage in Manila and, in connection therewith and not otherwise, maintained and operated a fleet of motor trucks used exclusively to receive, store, forward, and deliver cargoes belonging to its particular customers. The petitioner did not solicit or hold itself out to the public as willing to carry goods indiscriminately and performed transportation services pursuant to special contracts with particular patrons, receiving compensation for such transportation in addition to brokerage fees. The trucks were registered under the TH denomination with the Bureau of Public Works and been so registered for many years.

Agreed Statement of Facts

The parties filed an agreed statement of facts that recited the foregoing practices of the petitioner, the long established registration of its trucks as TH, the petitioner’s refusal to accept shipments from the public generally, the petitioner’s receipt of compensation for transportation under special contracts, and the historical fact that neither the Public Utility Commission nor its successors had previously attempted to regulate the petitioner’s truck operations under Acts Nos. 2307, 2362, 2694, or 3108. The stipulation also recited the Public Service Commission’s May 9, 1932 letter requiring the petitioner to apply for a certificate of public convenience within thirty days, the petitioner’s June 3, 1932 reply denying that it was a public service or public utility, and the commission’s June 9, 1932 resolution ordering the petitioner to file within fifteen days and threatening endorsement to the Director of Public Works for confiscation of license plates upon noncompliance.

Procedural History

The petitioner previously sought an identical writ in G. R. No. 36752, which this Court denied February 5, 1932, as premature because the commission had not then taken action to determine jurisdiction over the petitioner. After the commission issued specific communications and a resolution in May and June 1932, the petitioner filed the present petition for a writ of prohibition on June 22, 1932, and obtained a preliminary injunction the same day. The Attorney-General filed an answer admitting the petitioner’s business operations but asserting statutory jurisdiction; the parties thereafter submitted an agreed statement of facts, and the Court decided the matter on November 16, 1932.

The Parties' Contentions

The Petitioner contended that its truck operations were incidental to its private business as customs broker, that it did not operate as a common carrier or a public utility, and that it therefore was not required to obtain a certificate of public convenience and necessity or submit to the regulatory control of the Public Service Commission. The respondents maintained that section 13 of Act No. 3108, as amended by Act No. 3316, redefined “public service” to include any person operating freight or passenger motor vehicles “for hire or compensation,” thereby bringing the petitioner’s TH-registered trucks under the commission’s supervision, regulation, jurisdiction and control, and that the Director of Public Works should be instructed to confiscate the petitioner’s plates if it failed to apply.

Issue Presented

The central question was whether section 13 of Act No. 3108, as amended by Act No. 3316, conferred upon the Public Service Commission jurisdiction to require LUZON BROKERAGE CO., INC. to secure a certificate of public convenience for the operation of its fleet of trucks that serve only the petitioner’s customers and do not solicit the public generally.

Majority Ruling (Disposition)

The Court granted the writ of prohibition as prayed for, restrained the respondents from enforcing the commission’s order against the petitioner, and directed that each party bear its own costs. The Court found it unnecessary to resolve the constitutional questions pressed by the parties.

Majority Reasoning

The Court examined the text and history of section 13 of Act No. 3108, as amended by Act No. 3316, noting that the amendatory changes were verbal: the substitution of the term “public service” for “public utility”, the omission of the phrase “for public use”, and the insertion of “for hire or compensation.” The Court concluded that these verbal changes did not demonstrate a legislative intent to effect a sweeping enlargement of the commission’s jurisdiction to include private enterprises not devoted to public use. The Court emphasized that prior Public Utility Acts and practice had not subjected the petitioner’s trucks to regulation, that the agreed facts disclosed trucks used exclusively for the petitioner’s patrons, and that such operations were not common carrier business as contemplated by the statutory framework. The Court further observed that the foundational provisions of the Public Service Law — sections 14 through 22 — remained unchanged and were drafted with common carriers in view; if the Legislature had intended to bring private carriers within the commission’s full regulatory scheme, it would have amended those basic provisions to adapt them to such enterprises. The Court warned that construing the amendment to subject private carriers to a statute framed for public utilities would produce uncertainty and unfairness by imposing obligations and penalties without clear legislative standards. On these grounds the Court held the commission exceeded its jurisdiction and granted the writ.

Dissenting Opinion

Justice Vickers, joined by Justices Villamor, Villa-Real, and Imperial, dissented. The dissent maintained that the petitioner was a common carrier in a restricted sense because it held itself out to transport the goods of import

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