Ammen Transportation Co. v. La Comision de Servicios Publicos
REITERATIONFacts
The Antecedents: The A. L. Ammen Transportation Company, Inc. (applicant) sought authorization from the Public Service Commission (Commission) to substitute two Chevrolet auto-trucks and ten Dodge auto-trucks with two and ten Brockway auto-trucks, respectively. The Commission granted these authorizations subject to several conditions, including registration of the new trucks within 30 days, adherence to approved designs and capacity, submission of registration certificates, operation according to existing certificates of public convenience, and return of plates for the decommissioned vehicles. Procedural History: The Commission, in its order dated December 22, 1939, also amended the conditions of numerous existing certificates of public convenience and authorizations. These amendments included a validity period of twenty-five (25) years from the order's promulgation and the possibility of acquisition by the Commonwealth of the Philippines upon payment of the cost price less reasonable depreciation. The applicant appealed this order. The Petition: The applicant argued that Commonwealth Act No. 454, upon which the Commission based its order, (1) deprived them of property without due process of law, (2) improperly delegated legislative powers without prescribing rules, and (3) impaired contractual obligations.
Issue(s)
Whether Commonwealth Act No. 454 deprives the applicant of property without due process of law. Whether Commonwealth Act No. 454 improperly delegates legislative powers without prescribing rules. Whether Commonwealth Act No. 454 impairs contractual obligations. Whether the applicant was afforded an opportunity to be heard regarding the amendments to its certificate of public convenience.
Ruling
The Supreme Court revoked the appealed order of the Public Service Commission and remanded the case for further proceedings. The Court held that while a Certificate of Public Convenience is a property, it is also a privilege subject to regulation. The constitutional provision limiting franchises to fifty years served as a rule for the Commission. However, the Court found that the applicant was not given an opportunity to be heard on the amendments made to its certificate, thus violating due process.
Ratio Decidendi
On the issue of deprivation of property without due process of law: The Court acknowledged that a Certificate of Public Convenience is a property. If its duration, granted without a fixed term, is reduced to 25 years, the holder is deprived of a portion of that property. However, the Court distinguished this by citing Manila Yellow Taxicab Co. v. Sabellano, stating that a certificate is a privilege, not a right, and can be modified or withdrawn by the power that created it. Nevertheless, the lack of an opportunity to be heard on the amendments was a violation of due process. On the issue of improper delegation of legislative powers: The Court found that Commonwealth Act No. 454 did not constitute an unlimited delegation of powers. It pointed to Article XIII, Section 8 of the Constitution, which limits the duration of public service franchises to fifty years, as a sufficient rule for the Public Service Commission to observe when fixing the term of a certificate of public convenience. On the issue of impairment of contractual obligations: The Court reiterated that a Certificate of Public Convenience is a privilege, not a right. Furthermore, it is understood that such a grant is subject to the condition of being amended, altered, or even revoked. Therefore, Commonwealth Act No. 454, in imposing these conditions, was deemed to be in harmony with the Constitution and did not impair contractual obligations in the sense prohibited by law. On the issue of opportunity to be heard: The Court found that the applicant was not given an opportunity to be heard regarding the amendments to its certificate of public convenience made by the Public Service Commission. This procedural defect was sufficient grounds to revoke the appealed order, following established doctrines on the matter.
Main Doctrine
A Certificate of Public Convenience is considered property, and its duration cannot be arbitrarily reduced without due process. However, such certificates are subject to the regulatory powers of the state, including amendments or revocations, as long as constitutional and statutory limitations are observed. The Court also affirmed that the Constitution provides a rule for the Public Service Commission in fixing the duration of certificates.