MUNICIPALITY OF ECHAGUE, Represented by
MAYOR SALVADOR H. GAFFUD, petitioner,
vs.
HONORABLE LEOPOLDO M. ABELLERA, Acting
Chairman, BOARD OF TRANSPORTATION, and
AVELINO BALLAD
FACTS: Since 1936, the petitioner municipality, had
been operating a municipal ferry service 'traversing the
Cagayan River to and from the Barangays Soyung-
Malitao and Barangays Embarcadero-Dammang East
and West, all within the municipality of Echague,
Isabela.
Private respondent Ballad furnished petitioner, a xerox
copy of a Decision by the Board of Transportation
granting respondent Ballad a Certificate of Public
Convenience to operate a two-motor boat service for
the regular and public transportation of passengers
and freight between Barrio Soyung-Dammang West
and vice-versa across the Cagayan River all in the
municipality of Echague, Isabela. In furnishing
petitioner with a copy of the Decision in his favor,
private respondent gave notice that he would start his
ferry boat service operation in January, 1978 and
petitioner Municipality has to stop its own ferry boat
service within the aforementioned routes.
Petitioner expressed its surprise over said Decision
because it is averred that it was never notified of the
application of respondent Ballad with the Board of
Transportation to operate the ferry service. On January
17, 1977, the respondent Board of Transportation,
upon motion of petitioner Municipality, issued an Order
suspending the operation of the motor boat service of
private respondent after a rehearing of the case by the
Board en banc.
Petitioner filed an MR on the ground of lack of notice
and deprivation of opportunity to be heard by the Board
and secondly, the award of said Certificate of Public
Convenience to respondent Ballad was approved
without favorable indorsement by resolution of the
Sangguniang Bayan of Echague, Isabela of Ballad's
application.
The Board denied the MR. PETITIONER rests its case
with 2 principal contention (1) lack of due process
because the municipality was never notified of the
application filed by Ballad with respondent Board; and
(2) the absence of any resolution passed by the
Sangguniang Bayan of Echague favorably indorsing to
the respondent Board, Ballad's application for a
certificate of public convenience to operate the ferry
service. issuance to Ballad of the certificate of public
convenience was with grave abuse of discretion
amounting to lack of or in excess of its jurisdiction.
ISSUE: Whether or not, under Presidential Decree No.
1, or the Integrated Reorganization Plan, which vests
on the Board of Transportation the jurisdiction and
authority to issue Certificate of Public Convenience for
the operation of public land, water and air
transportation utilities, there would still be need for an
applicant for a ferry boat service operating between
two points within a municipality to obtain a favorable
resolution of the Sangguniang Bayan of said
municipality before the Board of Transportation can
validly award the corresponding franchise to the
applicant, considering the provisions of Sections 2318-
2320 of the Revised Administrative Code.
RULING: The Court cannot consider the alleged
publication of the said notice in two unnamed Manila
dailies as sufficient compliance of notice to petitioner
when the singular date of such supposed publication is
not even mentioned by respondents nor disclosed by
the records. As a party to be directly affected by the
setting up of a ferry service by private respondent,
petitioner Municipality is entitled to be directly informed
and afforded an opportunity to be heard by the Board.
With respect to the issue of whether an indorsing
resolution is a requisite before the respondent Board
may award a certificate of public convenience to
respondent Ballad "where a ferry lies entirely within the
territorial jurisdiction of a municipality, previous
approval of that municipality is necessary before the
Public Service Commission can grant a private
operator a certificate of public convenience for its
operation.
(1) Under Article XX, Chapter 57, Title IX, Book III
of the Revised Administrative Code, entitled "Conduct
of Certain Public Utilities," Sections 2318-2320 provide
that a municipal council shall have authority to acquire
or establish municipal ferries; that the municipal
authorities may either conduct said public utility upon
account of the municipality or let it be a private party
who is the highest and best bidder for a period of one
year, or upon the previous approval of the Provincial
Board, for a longer period not exceeding five years.
(2) Under Paragraph (a)-(c) No. 4, Article III,
Chapter I, Part X of the Integrated Reorganization Plan
(Presidential Decree No. 1), the functions of the
respondent Board of Transportation are as follows:
a.) IIssue Certificate of Public Convenience for the
operation of public land, water and air transportation
utilities and services such as motor vehicles, railroad
lines, domestic and overseas water carriers, domestic
and international air carriers and similar public utilities;
We hold that the specific jurisdiction and authority
given by Sections 2318-2320 of the Revised
Administrative Code to a municipality to operate or
lease the ferry service within its own territorial limits
should prevail. The grant of supervision and authority
by Administrative Code to municipalities or municipal
councils over public utilities such as municipal ferries,
markets, etc. is specific, and undoubtedly was
"intended to provide an additional source of revenue to
municipal corporations for their maintenance and
operation".
We decline to accept the proposition that the operation
of the ferry being then exercised by petitioner
municipality, pursuant to clear provisions of the law,
was removed by a general reorganization plan which-
was intended only to indicate the agency which would
supervise or regulate the operation of public services.
The provisions of the Revised Administrative Code
which grant to the municipal council of Sangguniang
Bayan the power to acquire or establish municipal
ferries, are different and should be distinguished from
the authority of the Board of Transportation to issue a
Certificate of Public Convenience.
THE METROPOLITAN MANILA DEVELOPMENT
AUTHORITY, et al . v . VIRON TRANSPORTATION
CO., INC., et al . 530 SCRA 341 (2007)
FATCS: To solve the worsening traffic congestions
problem in Metro Manila the President issued
Executive Order (E.O.) 179, ―Providing for the
Establishment of Greater Manila Mass Transportation
System. As determined in E.O. 179, the primary cause
of traffic congestion in Metro Manila has been the
numerous buses plying the streets that impede the flow
of vehicles and commuters and the inefficient
connectivity of the different transport modes.
To decongest traffic, petitioner Metropolitan Manila
Development Authority (MMDA) came up with a
recommendation, proposing the elimination of bus
terminals located along major Metro Manila
thoroughfares, and the construction of mass transport
terminal facilties to provide a more convenient access
to mass transport system to the commuting public. The
project provided for under this E.O. was called
―Greater Manila Transport System‖ (Project) wherein
the MMDA was designated as the implementing
agency.
Accordingly, the Metro Manila Council the governing
board of the MMDA issued a resolution, expressing full
support of the project. The respondents, which are
engaged in the business of public transportation with a
provincial bus operation, Viron Transport Co., Inc. and
Mencorp Transportation System, Inc., assailed the
constitutionality of E.O. 179 before the Regional Trial
Court of Manila. They alleged that the E.O., insofar as
it permitted the closure of existing bus terminal,
constituted a deprivation of property without due
process; that it contravened the Public Service Act
which mandates public utilities to provide and maintain
their own terminals as a requisite for the privilege of
operating as common carriers; and that Republic Act
7924, which created MMDA, did not authorize the latter
to order the closure of bus terminals. The trial court
declared the E.O. unconstitutional.
The MMDA argued before the Court that there was no
justiciable controversy in the case for declaratory relief
filed by the respondents; that E.O. 179 was only an
administrative directive to government agencies to
coordinate with the MMDA, and as such did not bind
third persons; that the President has the authority to
implement the Project pursuant to E.O. 125; and that
E.O. 179 was a valid exercise of police power.
ISSUE: Whether or not E.O, 179 is constitutional.
HELD: By designating the MMDA as implementing
agency of the “Greater Manila Transport System,” the
President clearly overstepped the limits of the authority
conferred by law, rendering E.O. 179 ultra vires.
Executive Order 125, invoked by the MMDA, was
issued by former President Aquino in her exercise of
legislative powers. This executive order reorganized
the Ministry (now Department) of Transportation and
Communications (DOTC), and defined its powers and
functions.
It mandated the DOTC to be the primary policy,
planning, programming, coordinating, implementing,
regulating and administrative entity to promote,
develop and regulate networks of transportation and
communications. The grant of authority to the DOTC
includes the power to establish and administer
comprehensive and integrated programs for
transportation and communications. Accordingly, it is
the DOTC Secretary who is authorized to issue such
orders, rules, regulations and other issuances as may
be necessary to ensure the effective implementation of
the law.
The President may also exercise the same power and
authority to order the implementation of the mass
transport system project, which admittedly is one for
transportation. Such authority springs from the
President‘s power of control over all executive
departments as well as for the faithful execution of the
laws under the Constitution.
Thus, the President, although authorized to establish
or cause the implementation of the Project, must
exercise the authority through the instrumentality of the
DOTC, which, by law, is the primary implementing and
administrative entity in the promotion, development
and regulation of networks of transportation. It is the
DOTC, and not the MMDA, which is authorized to
establish and implement a project such as the mass
transport system. By designating the MMDA as
implementing agency of the Project, the President
clearly overstepped the limits of the authority conferred
by law, rendering E.O. 179 ultra vires.
In the absence of a specific grant of authority to it under
R.A. 7924, MMDA cannot issue order for the closure of
existing bus terminals Republic Act (R.A.) 7924
authorizes the MMDA to perform planning, monitoring
and coordinative functions, and in the process
exercises regulatory and supervisory authority over the
delivery of metro-wide services, including transport and
traffic management. While traffic decongestion has
been recognized as a valid ground in the exercise of
police power, MMDA is not granted police power, let
alone legislative power. Unlike the legislative bodies of
the local government units, there is no provision in R.A.
7924 that empowers the MMDA or the Metro Manila
Council to enact ordinances, approve resolutions and
appropriate funds for the general welfare of the
inhabitants of Metro Manila.
In light of the administrative nature of its powers and
functions, the MMDA is devoid of authority to
implement the Greater Manila Transport System as
envisioned by E.O. 179; hence, it could not have been
validly designated by the President to undertake the
project. It follows that the MMDA cannot validly order
the elimination of respondents‘ terminals.
Even assuming arguendo that police power was
delegated to the MMDA, its exercise of such power
does not satisfy the two sets of a valid police power
measure: (1) the interest of the public generally, as
distinguished from that of a particular class, requires its
exercise; and (2) the means employed are reasonably
necessary for the accomplishment of the purpose and
not unduly oppressive upon individuals.
In various cases, the Court has recognized that traffic
congestion is a public, not merely a private concern.
Indeed, the E.O. was issued due to the felt need to
address the worsening traffic congestion in Metro
Manila which, the MMDA so determined, is caused by
the increasing volume of buses plying the major
thoroughfares and the inefficient connectivity of
existing transport system.
With the avowed objective of decongesting traffic in
Metro Manila the E.O. seeks to eliminate the bus
terminals now located along major Metro Manila
thoroughfares and provide more convenient access to
the mass transport system to the commuting public
through the provision of mass transport terminal
facilities. Common carriers with terminals along the
major thoroughfares of Metro Manila would thus be
compelled to close down their existing bus terminals
and use the MMDA-designated common parking
areas.
The Court fails to see how the prohibition against
respondents’ terminals can be considered a
reasonable necessity to ease traffic congestion in the
metropolis. On the contrary, the elimination of
respondents‘ bus terminals brings forth the distinct
possibility and the equally harrowing reality of traffic
congestion in the common parking areas, a case of
transference from one site to another.
Moreover, an order for the closure of bus terminals is
not in line with the provisions of the Public Service Act.
The establishment, as well as the maintenance of
vehicle parking areas or passenger terminals, is
generally considered a necessary service by provincial
bus operators, hence, the investments they have
poured into the acquisition or lease of suitable terminal
sites.
RULING: YES. The authority of the President to order
the implementation of the Project notwithstanding, the
designation of the MMDA as the implementing agency
for the Project may not be sustained. It is ultra vires,
there being no legal basis therefor.
It bears stressing that under the provisions of E.O. No.
125, as amended, it is the DOTC, and not the MMDA,
which is authorized to establish and implement a
project such as the one subject of the cases at bar.
Thus, the President, although authorized to establish
or cause the implementation of the Project, must
exercise the authority through the instrumentality of the
DOTC which, by law, is the primary implementing and
administrative entity in the promotion, development
and regulation of networks of transportation, and the
one so authorized to establish and implement a project
such as the Project in question.
By designating the MMDA as the implementing agency
of the Project, the President clearly overstepped the
limits of the authority conferred by law, rendering E.O.
No. 179 ultra vires.
In another vein, the validity of the designation of MMDA
flies in the absence of a specific grant of authority to it
under R.A. No. 7924.
SECTION 2. Creation of the Metropolitan Manila
Development Authority. — . . .
The MMDA shall perform planning, monitoring and
coordinative functions, and in the process exercise
regulatory and supervisory authority over the delivery
of metro-wide services within Metro Manila, without
diminution of the autonomy of the local government
units concerning purely local matters
In light of the administrative nature of its powers and
functions, the MMDA is devoid of authority to
implement the Project as envisioned by the E.O;
hence, it could not have been validly designated by the
President to undertake the Project. It follows that the
MMDA cannot validly order the elimination of
respondents’ terminals
This Court commiserates with the MMDA for the
roadblocks thrown in the way of its efforts at solving the
pestering problem of traffic congestion in Metro Manila.
These efforts are commendable, to say the least, in the
face of the abominable traffic situation of our roads day
in and day out. This Court can only interpret, not
change, the law, however. It needs only to be reiterated
that it is the DOTC ─ as the primary policy, planning,
programming, coordinating, implementing, regulating
and administrative entity to promote, develop and
regulate networks of transportation and
communications ─ which has the power to establish
and administer a transportation project like the Project
subject of the case at bar.
SURIGAO ELECTRIC COMPANY VS MUNICIPAL
OF SURIGAO 24 SCRA 898
Facts: Congress amended the Public Service Act
changing the requirements of a certificate of public
convenience and necessity from the Public Service
Commission for public services owned and controlled
by the government but at the same time affirming its
power of regulation. The petitioners Surigao Electric
Co. and Arturo Lumanlan to whom the rights and
privileges of the former including its plants and facilities
were transferred challenged the validity of such order
of the Public Service Act holding that it had no
alternative but to approve the tentative schedules of
rate submitted by the Municipality of Surigao.
Issue: Whether or not the Municipality of Surigao has
the power to directly maintain and operate an electric
plant without obtaining a specific franchise for the
purpose and without obtaining specific franchise from
the Public Service Commission.
Held: The court held that a municipality corporation
maintains a dual personality: governmental and
corporate. No franchise or right can override the proper
exercise of police power of the government. Municipal
corporations may promote public services without the
need of a certificate of public convenience. The
Amendatory Act provided in the Public Service Act lend
encouragement and support for municipality
corporaions to undertake activities and the result of
which is competing firms would be adversely affected.
CHAMBER OF FILIPIN RETAILER v VILLEGAS
Facts:On July 25, 1968, City Ordinance No. 6696 was
approved raising the Market Stall fees to be charged in
all City Markets.
Petitioners brought action questioning the legality of
this ordinance on the ground that the City Charter of
Manila only authorizes the collection of “fees” and the
rise in market stall fees would make this a source of
revenue.
On October 4, 1968, while this case was pending, the
Municipal Board approved Ordinance No. 6767
lowering the market stall fees as provided for by
Ordinance No. 6696, but still much higher than the old
rate.
Issue: (1)W/N the enactment of Ordinance No. 6767
was in the exercise of the governmental or the
proprietary function of the city, it being agreed by the
parties that if the enactment was “governmental”, the
city may only collect such fees as would cover
supervision of the market stalls, but, if “proprietary”, the
city may charge said fees for revenue purposes
(2) W/N City of Manila can charge fees for the use of
its public markets without the approval of the Public
Service Commission
Held: 1. No. We see no merit in this appeal. For
assuming, ad arguendo, the correctness of appellant’s
view that under its section 18 (cc) the Manila Charter,
only authorizes the City of Manila to charge reasonable
fees for the use of public markets, in an amount
sufficient to cover the cost of supervision, maintenance
and regulation, still this power was broadened by the
subsequent Republic Act No. 2264 (the so-called Local
Autonomy Act) section 2 of which grant all chartered
cities, municipalities and municipal districts —
“authority to impose municipal license taxes or fees
upon persons engaged in any occupation or business
or exercising privileges in chartered cities,
municipalities or municipal districts …”
Since it is not deniable that persons selling in public
markets are engaged in occupation or business (in the
sense of engaging human activity for gain), it becomes
plain that the city can impose at present upon market
vendors or retailers fees designed to obtain revenue for
the city, above or in addition to the amount needed to
reimburse it for strictly supervisory services.
In the second place, there is a clear difference between
the license to sell within the premises of public markets
and the privilege of doing business at a definite location
or stall in said market for a definite period of time. The
permit to exercise the latter privilege partakes of the
nature of a lease of the area occupied by the stall which
is patrimonial property of the City of Manila. The renting
by the City of its private property is a patrimonial activity
or proprietary function, and in this sphere, the city —
“like any private owner, it is … free to charge such
sums as it may deem best, regardless of the
reasonableness of the amount fixed, for the
prospective lessees are free to enter into the
corresponding contract of lease, if they are agreeable
to the terms thereof, or, otherwise, not enter into such
contract.”
And it is idle for appellants to contend that public
markets are for public use, hence not patrimonial
property susceptible of lease. It is not certainly for
public use so far as the appellant stall market vendors
are concerned, the city charter authorizing a charge for
their use of public markets (ante).
2. No. While a public market is a public service or utility,
it is not one that falls under the jurisdiction of the Public
Service Commission, not being ejusdem generis with
those public services enumerated in Section 13(b) of
the Public Service Act over which the Commission has
jurisdiction. Hence the approval by the Commission of
the fees fixed by the City of Manila for the use of its
markets is not covered by Section 20 of the Public
Service Act. And even if appellants had cited (which
they did not) Republic Act 2677, amending the Public
Service Act, by exempting any instrumentality of the
National Government from securing a certificate of
public convenience and necessity, but affirming the
Commission’s power of regulation over public service
utilities operated by government entities, except with
respect to fixing of rates, the amendatory statute could
not have helped the theory of the appellants (that
Manila cannot fix fees for the use of its public markets
without the approval of the Commission), for the
reason that public markets are not among (or not
similar to) those utilities over which the Commission
was vested with jurisdiction.
GMCR INC.; SMART COMMUNICATIONS, INC.;
INT’L COMMUNICATIONSCORP.; ISLA
COMMUNICATIONS CO., INC., vs. BELL
COMMUNICATIONSPHILS., INC.; THE
NATIONAL TELECOMMUNICATIONS
COMMISSIONAND HON. SIMEON KINTANARGR
16496April 30, 1997
FACTS: Bell Telecommunications (BellTel) filed
before the National Telecommunications
Commission (NTC) an application for a
Certificate of Public Convenience and Necessity
(CPCN) to procure, install, operate and maintain
Nationwide Integrated Telecommunications Services
(NITS) and a Provisional Authority (PA) to effect such.
During such application, Bell Tel has not been given a
legislative franchise to engage in the telecoms service
which made in unable to participate in the deliberations
for service area assignments for local exchange
carrier service (LEC) where the petitioners above
participated in. Subsequently, RA 7692 was enacted
granting BellTel a congressional franchise.
On 12 July 1994, BellTel filed a second
application for a certificate of public convenience,
proposing to install 2.6 million telephone lines in 10
years and to provide a100% digital local exchange
network (NTC Case 94-229). It also moved for
the withdrawal of the first application, without prejudice,
which was granted by the NTC. BellTel’s application
(2nd) was opposed by various telecommunication
companies. BellTel’s application was referred to the
Common Carriers Authorization Department (CCAD),
which found BellTel’s proposal technically feasible
and BellTel to be financially capable. The two
deputy commissioners of the NTC signified their
approval of the CCAD recommendation.
The working draft was prepared by the legal
department, was initialed by the two deputy
commissioners, but was not signed by NTC
Commissioner Simeon Kintanar. The petitioners
questioned the validity of the PA because according to
them it is the prevailing policy and procedure in the
NTC that the Commissioner has the exclusive authority
to sign, validate and promulgate any and all orders,
resolutions and decisions of the NTC and only his vote
counts. BellTel filed two motions to resolve the
application and the issuance of the PA but the NTC did
not act on it.
In that relation, the petitioners filed an Opposition.
Commissioner Kintanar issued an Order setting said
motions for hearing but did not resolve said motions.
However, no hearing was conducted and it was
rescheduled. BellTel filed a motion to promulgate, after
previously filing two urgent ex-parte motion to resolve
application, which was not acted upon by the NTC. On
4 July 1995, the NTC denied the motion in an order
signed solely by Commissioner Kintanar. On 17 July
1995,Bell Tel filed a petition for certiorari, mandamus
and prohibition against NTC before the Supreme
Court. The Court referred the case to the Court
of Appeals pursuant to Paragraph 1, Section 9 of BP
129. The Court of Appeals granted BellTel’s position.
Hence, the petitions for review by the opposing
telecommunication companies and Commissioner
Kintanar.
Issue: Whether the vote of the Chairman of the
Commission is sufficient to legally render an NTC
order, resolution or decision.
Held: Having been organized under Executive Order authorize the operation of domestic air transport
146 as a three-man commission, the NTC is a collegial services to the CAB, an administrative agency. The
body and was a collegial body even during the time it delegation of such authority is not without limits since
was acting as alone-man regime. NTC is a collegial Congress had set specific standard and limitations on
body requiring a majority vote out of three members of how such authority should be exercised.
the commission in order to validly decides a case or
any incident therein. The vote alone of the chairman of Public convenience and necessity exists when the
the Commission, absent the required concurring vote proposed facility will meet a reasonable want of the
coming from the rest of the membership of the public and supply a need which the existing facilities do
commission to at least arrive at a majority decision, is not adequately afford.
not sufficient to legally render an NTC order, resolution
or decision. EO 546, which created the NTC under the Thus, the Board should be allowed to continue hearing
Ministries of Public Works and of Transportation and the application, since it has jurisdiction over it provided
Communication, does not specifically provide that the that the applicant meets all the requirements of the law.
NTC is not a collegiate body nor did it mention that NTC
should meet En Banc in deciding its case or quasi-
judicial functions. However, this does not militate
against the collegial nature of the NTC because the
Rules of Procedure and Practice applied by the NTC in
its proceedings states that incases heard by the Board
En Banc, the resolution or order should be reached
with the concurrence of at least two regular members
after deliberation and consultation. NTC Circulars 1-1-
93, 3-1-93 and the Order of Kintanar, declaring the
NTC as a single entity or non-collegial entity, are
contrary to law and thus are null and void.

PHILIPPINE AIRLINES, INC. VS. CIVIL

AERONAUTICS BOARD

Facts: Grand Air applied for a Certificate of Public

Convenience and Necessity with the Civil Aeronautics
Board (CAB). The Chief Hearing Officer issued a notice
of hearing directing Grand Air to serve a copy of the
application and notice to all scheduled Philippine
Domestic operators. Grand Air filed its compliance and
requested for a Temporary Operating Permit (TOP).
PAL filed an opposition to the application on the ground
that the CAB had no jurisdiction to hear the application
until Grand Air first obtains a franchise to operate from
Congress. The Chief Hearing Officer denied the
opposition and the CAB approved the issuance of the
TOP for a period of 3 months. The opposition for the
TOP was likewise denied. The CAB justified its
assumption of jurisdiction over Grand Air’s application
on the basis of Republic Act 776 which gives it the
specific power to issue any TOP or Certificate of Public
Convenience and Necessity.

Issue: Whether or not the CAB can issue a Certificate

of Public Convenience and Necessity or TOP even
though the prospective operator does not have a
legislative franchise?

Held: Yes, as mentioned by the CAB, it is duly

authorized to do so under Republic Act 776 and a
legislative franchise is not necessary before it may do
so, since Congress has delegated the authority to