Pampanga Bus Co. v. Enriquez
REITERATIONFacts
The Antecedents: The Pampanga Bus Company, Inc. (PBC) and Fernando Enriquez (Enriquez) entered into an agreement on November 9, 1929, concerning their respective public land transportation services. This agreement was later incorporated into a decision by the Court of First Instance (CFI) of Manila in civil case No. 45149, which declared a preliminary injunction permanent, restraining Enriquez from picking up or dropping passengers where not authorized and enjoining PBC from certain routes. The agreement stipulated that Enriquez would withdraw motions, not apply for operations in PBC's territory, and PBC would withdraw opposition to Enriquez's application for additional hours from Masantol to Manila with rights to pick up passengers in Macabebe and Apalit. PBC also agreed to permit Enriquez to carry passengers between Masantol and Macabebe and Calumpit on Tuesdays only, and not to establish a direct service between Masantol and Manila or Masantol and Calumpit on Tuesdays. Enriquez agreed not to acquire any competing line of PBC. Procedural History: For alleged violation of this agreement, PBC filed a complaint in civil case No. 45159, seeking an injunction against Enriquez. Both parties obtained preliminary injunctions. On April 6, 1937, Enriquez filed an application (No. 48802) before the Public Service Commission (PSC) to lift restrictions on his certificates. PBC alleged this violated the November 9, 1929 agreement and asked for dismissal. When the PSC did not act, PBC filed a complaint in civil case No. 51550, praying for an injunction to restrain Enriquez from prosecuting his PSC application and to require him to withdraw it. The CFI denied this injunction. Subsequently, PBC filed a complaint in civil case No. 45159, praying that Enriquez be adjudged guilty of contempt for violating the permanent injunction and committed to prison until he withdraws his PSC application or its revocation. The CFI of Manila, on November 27, 1937, found Enriquez guilty of contempt for violating the permanent injunction by filing the PSC application. The Petition: Enriquez appealed the CFI's decision finding him guilty of contempt.
Issue(s)
Whether the trial court erred in finding the defendant-appellant guilty of contempt for violating a permanent injunction that enforced a restrictive agreement regarding certificates of public convenience.
Ruling
The Supreme Court reversed the appealed decision, holding that the trial court erred in finding Fernando Enriquez guilty of contempt. The Court declared the writ of injunction and the contempt judgment illegal and void because they sought to enforce an illegal and void agreement.
Ratio Decidendi
On Issue 1: The Supreme Court held that the trial court erred because the underlying agreement was null and void. Citing the companion case of Pampanga Bus Company vs. Enriquez (G.R. No. 46040), the Court emphasized that a public land transportation operator cannot validly waive the right to apply for the lifting of restrictions on his certificates of public convenience. Such a waiver is illegal because it affects public interest and the regulatory authority of the Public Service Commission (PSC), which must remain free to adjust services based on public necessity. Because the agreement itself was illegal and void, any injunction issued to enforce its terms was inherently erroneous. The Court reasoned that a writ of injunction cannot be used to compel a party to respect a contract that is contrary to law and public policy. Since the injunction was void, the judgment finding Enriquez guilty of contempt for disobeying said injunction was likewise void and illegal. Therefore, the defendant cannot be punished for contempt for refusing to comply with a court order that seeks to enforce a void obligation.
Main Doctrine
A decision finding an operator of a land transportation company guilty of contempt for violating a permanent writ of injunction that is illegal and void, is also illegal and void.