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Batangas Transportation Co. v.

Cayetano Orlanes 013


GR No. L-28865, 19 Dec 1928, Johns, J.
Digested by Fonzy Vargas Law 138 Transportation Law
Topic: Prior Operator Rule

An irregular operator of an auto bus lines sought to acquire CPC for the operation of a public
utility, to which currently another operator already holds a prior CPC. The court held that so
long as the first operator keeps and performs his terms and conditions of its license and complies
with the reasonable demands of the public, it has more or less of a vested and preferential right
over another who seeks to acquire a later license to operate over the same route.

FACTS
Orlanes sought to have a Certificate of Public Convenience (CPC) to operate a line of
auto trucks with fixed times of departure between Taal and Bantilan, with the right to
receive passengers and freight from intermediate points.
o Orlanes was what is known as an irregular operator between Bantilan and Taal.
Batranco appeared and filed an application for a permit, praying that the petition of
Orlanes be denied, alleging that:
o Batangas Transportation Co. (BTC) was a regular operator between Taal and
Rosario
o Since 1918, Orlanes has been operating an irregular service of auto
trucks between Batangas and Tayabas.
In a prior application, the Batangas Transportation Company, applied to the Commission
for a permit to increase the number of trip hours at and between the same places from
Batangas to Rosario, and or for an order that all irregular operators be prohibited from
operating their respective licenses, unless they should observe the interval of two hours
before, or one hour after, the regular hours of the Batangas Transportation Company.
o Orlanes sought to have his irregular operation changed into a regular operation,
and to set aside and nullify the prohibition against him in his CPC.
BTC alleged that the service maintained by the company is sufficient to satisfy the
convenience of the public, and that the same does not require the granting of the permit
for the service which Orlanes petitions and that to do so would result in ruinous
competition.
PSC granted the petition of Orlanes. Thus, this petition for review.

ISSUES & HOLDING


Whether a CPC to operate a public utility can be issued to an applicant thereof in a field
where a person is already granted a license to operate a public utility? No. A CPC should
not be issued to a second operator, and in competition with a first operator who is
already operating a sufficient, adequate and satisfactory service.

RATIO
The Public Service Commission has ample power and authority to make any and all
reasonable rules and regulations for the operation of any public utility and to enforce
compliance with them.
Act No. 3108, as amended by Act No. 3316, created the PSC. The supervision and
control of public utilities under said law is very broad and comprehensive.
The p no such finding of fact was made by the Commission that Orlanes will promote
the public interests. There is no claim that:
o BTC has violated any of the terms and conditions of its license
o PSC found the grant of a license to Orlanes as a regular operator over the
conflicting routes is required or necessary for the convenience of the traveling
public
o The services of BTC over the conflicting routes is subject to any complaint or
criticism by the public
So long as the first operator keeps and performs his terms and conditions of its license
and complies with the reasonable demands of the public, it has more or less of a vested
and preferential right over another who seeks to acquire a later license to operate over the
same route.
The fact that the Commission has previously granted a license to any person and refuses
to grant a similar license to another person, does not create a monopoly in the person of
the licensee, for the reason that at all times the Public Service Commission has the power
to say what is a reasonable compensation to the utility, under the powers granted to the
PSC.
To carry out the purpose and intent for which the PSC was created the law contemplates
that the first license will be protected in his investment and will not be subjected
to ruinous competition. The primary purpose of the PSC is to secure adequate, sustained
service for the public at the least possible cost and to protect and conserve investments
which have already been made for that purpose.

DISPOSITIVE
The decision of the PSC granting the license is revoked and set aside, the case being remanded
for further proceedings.

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