Prior-operator Rule

Batangas Transportation vs. Orlanes

FACTS:
Orlanes, who is an irregular operator of an autobus line in Batangas, filed a petition
for the issuance of a Certificate of Public Convenience to be able operate as a regular
service (which has a fixed schedule; and permitted to accept passengers at all points)
Batangas Transportation Company, a regular operator in Batangas for already 5
years, opposed the petition of Orlanes, and alleged that the service maintained by
the former is sufficient to satisfy the convenience of the public, and that granting
such petition would result in ruinous competition and to the grave prejudice of the
company and without any benefit to the public.
The Public Service Commission granted the petition of Orlanes.
ISSUE:
1) Whether the order of the Commission in granting the petition of Orlanes is proper
2) Whether it is proper to issue a certificate of public convenience to a second operator
to operate a public utility in a field where a first operator is already operating
adequate and satisfactory service
RULING:
1) NO. The order of the Commission granting the petition of Orlanes is null and void
2) NO. So long as the first licensee keeps and performs the terms and conditions of its
license and complies with the reasonable rules and regulations of the Commission
and meets the reasonable demands of the public, it should have more or less of a
vested and preferential right over a person who seeks to acquire another and a later
license over the same route. Otherwise, the first license would not have protection on
his investment, and would be subject to ruinous competition and thus defeat the very
purpose and intent for which the Public Service Commission was created.