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PANTRANCO SOUTH EXPRESS, INC. vs.

BOARD OF TRANSPORTATION and BATANGAS


LAGUNA TAYABAS BUS CO., INC., G.R. No. 49664-67

Facts:

On August 5, 1971, the then Public Service Commission granted certificates of public convenience
to Batangas Laguna Tayabas Bus Co., Inc. (BLTB) for the operation of twenty-eight (28) bus units
on the Pasay City — Legaspi City line, Bulan-Sorsogon line, Sorsogon line. On April 4, 1975,
Pantranco South Express, Inc. (PANTRANCO) filed a complaint against BLTB before the Board of
Transportation (BOT) charging it with abandonment of services on said lines and praying for the
cancellation of BLTB’s certificates of public convenience.

BLTB referred the matter to hearings before the BOT. At said hearings, BLTB admitted non-
operation of the bus services based on the following supervening factors which are beyond their
control which prevented them from operating the lines at issue:

(1) The gasoline crises starting 1971;


(2) The destructive big floods in 1972 and 1974;
(3) The general troubled conditions of peace and order in 1971 and 1972 leading to the
declaration of martial law;
(4) Starting 1973 and on to 1974,1975 and 1976 the nearly prohibitive cost of units and spare
parts (if available at all), the higher costs of operations and acute tire shortages particularly in
1974;
(5) All these, which are of general public knowledge and known to the Board, brought the whole
land transportation industry in what might be termed as in extremis condition causing the
bankruptcy of many operators, big and small; and
(6) Complainant Pantranco South Express, Inc. was not spared the ill effects of these adverse
conditions to the extent that up to the present it has not registered all the buses required for its
regular bus operations.

On January 4, 1979, the BOT issued an order, ordering the respondent to operate within fifteen (15)
days and inform the Board within ten (10) days from commencement of operation, pay the fine of
P10,000.00, and declare the consolidated complaints filed closed and terminated.

The BOT rationalized the non-cancellation of BLTB’s certificates of public convenience, as follows:

The BOT rationalized that cancellation of a certificate of public convenience is a penalty of the
severest degree. Its consequences are suffered not exclusively by the operator; it extends to the
travelling public whose needs for transportation facilities would further be aggravated by a diminution
of needed services.

Sec. 16 (n) of the Public Service Law empowers the Board ‘to suspend or revoke any certificate . . .
whenever the holder thereof has violated or wilfully and contumaciously refused to comply with any
order, rule or regulation of the Board or any provision of this Act.’

A reading of the provisions of Public Service Law would show that failure to comply with the terms
and conditions of any certificate of public convenience is basically punished with a fine, unless the
violation is willful or contumacious, in which case the penalty of suspension, or cancellation may be
imposed.

Judged by the foregoing standards, the evidence of the complainant to be sadly lacking in elements
that would qualify the BLTB’s failure to operate as wilful and contumacious. True the respondent did
not operate on its certificate from the time it was granted but is had given its justification by writing to
the Board, that because of unfinished portions of the road it could not render the service authorized
by the Board to be rendered.

The Board, in its desire to be responsive to public need, has always kept itself informed of actual
and latest transportation conditions in the provinces, including the Bicol region. Thru reports/
complaints from the general public, from reports of its field men, and from its own personal
observations acquired thru inspection trips, the Board is aware that buses which are operating are
very much less than what has been authorized.

In Bicol region, for instance, PANTRANCO registered and operated less than 50% of its authorized
units. The non-operation by PANTRANCO of these more than two hundred (200) buses clearly
requires the entry or operation of an equal number of buses. Any prohibition against an effort to fill
up a public need would be contrary to public interest.

Public interest will better be served if respondent is allowed to operate the service authorized in its
certificate of public convenience. To cancel these certificates at a time when the clamor and demand
for such service have been increasing day to day, prodded by the people’s desire to avail of the
excellent road conditions, which in turn conduces to fast and convenient travel, would be to negate
and turn back the clock of progress which has been seeping steadily and constantly to the long
neglected vast communal area that is the Bicol Region.

Issue:

Whether BOT has the discretion to decree or refuse the cancellation of a certificate of public
convenience based on its own observation and investigation.

Decision of the Supreme Court:

There can be no dispute that the law (Section 16 (n) of the Public Service Act) gives to the BOT
ample power and discretion to decree or refuse the cancellation of a certificate of public convenience
issued to an operator as long as there is evidence to support its action, as held by this Court in a
long line of cases, wherein it was even intimated that in matters of this nature so long as the action is
justified this Court will not substitute its discretion for that of the BOT.

The BOT, in refusing to cancel the certificates of public convenience of BLTB, relied on these pieces
of evidence; (1) the letter of BLTB dated September 18, 1972; (2) reports/complaints from the
general public; (3) reports of its field men; and (4) its own observations acquired thru inspection trips,
all of which form part of its records. The BOT is particularly a fact-finding body whose decisions on
questions regarding certificates of public convenience are influenced not only by the facts as
disclosed by the evidence in the case before it but also by the reports of its field agents and
inspectors that are periodically submitted to it. Likewise, the BOT has the power to take into
consideration the result of its own observation and investigation of the matter submitted to it for
decision, in connection with other evidence presented at the hearing of a case.

BLTB acted in good faith when it did not immediately operate on those lines and not because of a
design to prejudice public interest. Certificates of public convenience involve investment of a big
amount of capital, both in securing the certificate and in maintaining the operation of the lines
covered thereby, and mere failure to operate temporarily should not be a ground for cancellation,
especially as when, in the case at bar, the suspension of the service was directly caused by
circumstances beyond the operator’s control. In the absence of showing that there is willful and
contumacious violation on the part of the utility operator, no certificate of public convenience may be
validly revoked. More importantly, what cannot be ignored is that the needs of the public are
paramount, as elucidated by the BOT in its order. In the exercise of its power to grant or cancel
certificates of public convenience, the BOT is guided by public necessity and convenience as
primary considerations.

Petition DISMISSED.

IN RE CONTEMPT PROCEEDINGS AGAINST ARMANDO RAMOS, JESUS L. CARMELO, in his


capacity as Chairman of the Probe Committee, Office of the Mayor of Manila vs. ARMANDO
RAMOS, G.R. No. L-17778

Facts:

On February 3, 1960, the Mayor of Manila issued an executive order creating a committee to
investigate the anomalies involving the license inspectors and other personnel of the License
Inspection Division of the Office of the City Treasurer and of the License and Permits Division of the
City of Manila. He named Mr. Jesus L. Carmelo as chairman of said committee.

It appears that the committee issued subpoenas to Armando Ramos, a private citizen working as a
bookkeeper in the Casa de Alba, requiring him to appear before it in connection with an
administrative case against Crisanta Estanislao but Ramos refused to appear.

Claiming that Ramos' refusal tended "to impede, obstruct, or degrade the administrative
proceedings," petitioner filed in the CFI of Manila a petition to declare Armando Ramos in contempt.
The trial court dismissed the petition and held that there is no law empowering committees created
by municipal mayors to issue subpoenas and demand that witnesses testify under oath. It also held
that to compel Ramos to testify would be to violate his right against self-incrimination.

It appears that in a statement given to investigators of the Office of the Mayor, Ramos admitted
having misappropriated on several occasions, sums of money given to him by the owner of Casa de
Alba for the payment of the latter's taxes and that this fact had not been discovered earlier because
Ramos used to entertain employees in the City Treasurer's office at Casa de Alba. The trial court
held that to compel Ramos to confirm this statement in the administrative case against certain
employees in the Office of the City Treasurer would be to compel him to give testimony that could be
used against him in a criminal case for estafa of which the owner of Casa de Alba was the offended
party. From that decision, petitioner appealed to this Court.

Issue:

The power, if any, of the Committee to subpoena witnesses to appear before it and to ask for their
punishment in case of refusal.

Decision of the Supreme Court:

The rule is that Rule 64 (Contempt) of the Rules of Court applies only to inferior and superior courts
and does not comprehend contempt committed against administrative officials or bodies like the one
in this case, unless said contempt is clearly considered and expressly defined as contempt of court,
as is done in paragraph 2 of Section 580 of the Revised Administrative Code.

Petitioner invokes Section 580 of the Revised Administrative Code which provides as follows:

Powers incidental to taking of testimony. — When authority to take testimony or evidence is


conferred upon an administrative officer or upon any nonjudicial person, committee, or other
body, such authority shall be understood to comprehend the right to administer oaths and
summons witnesses and shall include authority to require the production of documents under
a subpoena duces tecum or otherwise, subject in all respects to the same restrictions and
qualifications as apply in judicial proceedings of a similar character.

Saving the provisions of section one hundred and two of this Act, any one who, without lawful
excuse, fails to appear upon summons issued under the authority of the preceding paragraph or
who, appearing before any individual or body exercising the power therein defined, refuses to
make oath, give testimony, or produce documents for inspection, when thereunto lawfully
required, shall be subject to discipline as in case of contempt of court and upon application of the
individual or body exercising the power in question shall be dealt with by the judge of first
instance having jurisdiction of the case in the manner provided by law.

However, one who invokes this provision of the law must first show that he has "authority to take
testimony or evidence" before he can apply to the courts for the punishment of hostile witnesses. To
be sure, there is nothing said in the executive order of the Mayor creating the committee about such
a grant of power. All that the order gives to this body is the power to investigate anomalies involving
certain city employees.

Petitioner contends that the Mayor of Manila has the implied power to investigate city officials and
employees appointed by him to the end that the power expressly vested in him to suspend and
remove such officials of employees may be justly and fairly exercised.

We agree with this proposition But We do not agree with the petitioner that a delegation of such
power to investigation implies also a delegation of the power to take testimony or evidence of
witnesses whose appearance may be require by the compulsory process of subpoena. Furthermore,
it is doubtful whether the provisions of section 580 of the Administrative Code are applicable to the
City of Manila as these pertain to national bureaus or offices of the government.

Petitioner contends that "the power of the investigation committee to issue compulsory process to
secure the attendance of witnesses undoubtedly exists since only complimentary to the power of the
mayor to investigate, suspend and remove city officers and employees, supra, is the recognized rule
that where the statute grants a right, it also confers by implication every particular power necessary
for the exercise thereof."

There is no merit in the argument. In the first place, the authority cited speaks of statutory, grant of
power to a body. Here, We have seen that whatever power may be claimed by petitioner's
committee may only be traced to the power of the Mayor to investigate as implied from his power to
suspend or remove certain city employees. There is no statutory grant of power to investigate to
petitioner's committee.

In the second place, even granting that the Mayor has the implied power to require the appearance
of witnesses before him, the rule, as noted earlier, is that the Mayor can not delegate this power to a
body like the committee of the petitioner.

Lastly, 50 Am. Jur. Sec. 428, p. 450 itself admits an exception to the rule invoked by the petitioner.
Thus, it is stated that "where the liberty and property of persons are sought to be brought within the
operation of a power claimed to be impliedly granted by an act because necessary to its due
execution, the case must be clearly seen to be within those intended to be reached." Here, no less
than the liberty of Armando Ramos is involved in the claim of the committee to the right to cite
witnesses.