Javier v. De Leon
REITERATIONFacts
1. The Antecedents: Respondent Enrique de Leon held certificates of public convenience for operating forty (40) auto-truck units on various lines, including Baliuag-Manila, Cabiao-Manila, Pulo (San Rafael)-Manila, and Lupao-Manila. Facing forfeiture of 34 trucks due to indebtedness to Manila Trading and Supply Company, De Leon sold all his certificates of public convenience, along with six auto-trucks on the Lupao-Manila line, to Fortunato B. Cruz on February 9, 1957. Subsequently, De Leon abandoned the operation of the Baliuag-Manila, Cabiao-Manila, and Pulo (San Rafael)-Manila lines on February 14, 1957, without prior authorization from the Public Service Commission. 2. Procedural History: Applications for special permits to operate additional units on the abandoned lines by Victoria Vda. de Tengco and La Mallorca were denied by the Commission on March 6, 1957, citing adequate service. On April 4, 1957, petitioners Nicolas Javier, et al., sought the cancellation of De Leon's certificates for the abandoned lines. De Leon admitted abandonment and the sale of his certificates to Cruz. Cruz, unable to secure trucks, subsequently sold the certificates to Eugenio Trinidad on May 25, 1957. The Commission, on June 26, 1957, ordered the cancellation of De Leon's Baliuag-Manila line certificate and directed him to resume service on the Cabiao-Manila line within 60 days. Petitioners appealed to the Supreme Court (G.R. No. L-12483) seeking cancellation of the Cabiao-Manila and Pulo (San Rafael)-Manila lines. De Leon and Goodrich International Rubber Company filed motions for reconsideration. The Commission, on August 30, 1957, dismissed Goodrich's motion, modified its decision by reviving the Baliuag-Manila line, and fined De Leon P1,000.00. Petitioners moved for reconsideration of this order. The Commission then set for hearing the provisional approval of the sales from De Leon to Cruz and Cruz to Trinidad. Despite objections, Commissioners Galang and Prieto provisionally approved the sales on September 24, 1957, with Commissioner Aspillera dissenting. This led to a petition for certiorari (G.R. Nos. L-12896 and L-12897), consolidated with the earlier appeal. 3. The Petition: The petitioners, holders of certificates of public convenience on the lines operated by De Leon, sought review of the Public Service Commission's decisions and orders. Their primary arguments centered on the Commission's modification of its initial decision, allowing De Leon to resume operation of the Baliuag-Manila line upon payment of a fine instead of cancellation, which they contended was an abuse of discretion and contrary to public interest. They also challenged the Commission's refusal to cancel the Cabiao-Manila and Pulo (San Rafael)-Manila lines. Furthermore, they contested the provisional approval of the sale of De Leon's certificates to Cruz and subsequently to Trinidad, arguing that such approval was premature given pending motions for reconsideration and existing writs of attachment that placed the certificates in custodia legis. The petitioners invoked Rule 45 of the Rules of Court for their appeal.
Issue(s)
Whether the Public Service Commission committed an abuse of discretion in modifying its decision to cancel Enrique de Leon's certificate on the Baliuag-Manila line and instead imposing a fine. Whether the Public Service Commission erred in refusing to cancel De Leon's certificates on the Cabiao-Manila and Pulo (San Rafael)-Manila lines. Whether the Public Service Commission erred in approving the provisional sale of certificates to Eugenio Trinidad while a motion for reconsideration and writs of attachment were pending.
Ruling
The Supreme Court affirmed the decision of the Public Service Commission insofar as it maintained the Cabiao-Manila and Pulo (San Rafael)-Manila lines, and affirmed the orders dated August 30, 1957, and September 24, 1957.
Ratio Decidendi
On the modification of the cancellation of the Baliuag-Manila line: The Court held that the Commission acted within its ample power and discretion when it modified its decision. While abandonment of service is grounds for cancellation, the Commission considered that De Leon's abandonment was due to the forfeiture of his trucks, an event beyond his control, and that he had already sold his certificates to Cruz before ceasing operations. The modification, imposing a fine instead of outright cancellation, was seen as a measure to allow De Leon to recover some investment and was justified by the fact that he acted in good faith and the sale was initiated before the cessation of operations. The Commission's observation that De Leon was a diligent operator with substantial investments, facing temporary financial difficulties, further supported the mitigation. The Court cited Pangasinan Transportation Co. vs. F.F. Halili, et al., stating that mere temporary failure to operate, especially due to circumstances beyond the operator's control, should not be a ground for cancellation. On the refusal to cancel the Cabiao-Manila and Pulo (San Rafael)-Manila lines: The Court found that the Commission's decision not to cancel these lines was based on factual findings that De Leon was the principal operator of the Cabiao-Manila line and its cancellation would greatly prejudice the public, whereas the Baliuag-Manila line had many operators and adequate service. These factual determinations are beyond the scope of appellate review. The Court also noted that total cancellation would deprive De Leon of proceeds from the sale, which he badly needed for his financial condition. On the provisional approval of the sale of certificates: The Court affirmed the Commission's action in provisionally approving the sale of certificates to Trinidad. It reasoned that the Commission has the power to control and dispose of certificates of public convenience for the promotion of public interest, even if they are under judicial attachment (custodia legis). The provisional approval was deemed not to prejudice the substantial rights of creditors, who would still have an opportunity to be heard before final disposition. The Court also clarified that the publication requirement applies to final approval, not provisional approval, and that the memorandum order regarding sales of temporary certificates did not apply to certificates with a normal life of 25 years. The Commission's action was presumed to implicitly deny the pending motion for reconsideration, indicating its intent to stand by its decision to revive the line for De Leon's benefit.
Main Doctrine
The Public Service Commission has ample power and discretion to decree the cancellation of a certificate of public convenience, but may modify its decisions considering intervening factors and the promotion of public interest, even if assets are under judicial attachment, as long as substantial rights of creditors are protected.