G.R. Nos. L-15301 and L-15302; March 30, 1962
MARIA CONCEPCION PAEZ VDA. DE CRUZ, in her capacity as Administratrix of the Intestate Estate of Don PEDRO B. CRUZ, petitioner, vs. TOBIAS P. MARCELO, respondent.

FACTS

The late Pedro B. Cruz was granted a certificate of public convenience in 1951 to operate a 15-ton ice plant in Tondo, Manila. Upon his death, his widow, Maria Concepcion Paez Vda. de Cruz, was appointed administratrix of his estate. In 1957, she applied to substitute worn-out equipment and transfer the plant’s site. However, inspections by the Public Service Commission (PSC) in 1958 revealed the original site was being used as a pig pen, with no ice plant machinery present. Although some equipment was being delivered during a subsequent inspection, the PSC found that Cruz had failed to install and operate the plant as required by his certificate. Consequently, the PSC cancelled Cruz’s certificate in March 1958, a decision which became final after the denial of a motion for reconsideration.
Following the final cancellation, four parties, including the administratrix (Vda. de Cruz) and Tobias P. Marcelo, filed separate applications for a new certificate to operate a 15-ton ice plant in Manila. Marcelo’s application was filed first on July 25, 1958. The PSC, finding all applicants financially capable but deeming it impractical to grant multiple certificates for the same service area, granted Marcelo’s application and denied the others. The administratrix appealed, arguing she should be preferred as the successor of the prior operator and that the PSC erred in strictly applying the priority-of-application rule.

ISSUE

The primary issues were: (1) whether the administratrix, as successor, had a preferential right to a new certificate after the original was cancelled for abandonment; and (2) whether the PSC correctly applied the rule on priority of application in granting the certificate to Marcelo.

RULING

The Supreme Court affirmed the PSC’s decision. On the first issue, the Court held that the administratrix had no preferential right. The certificate was cancelled due to the grantee’s abandonment of service, as evidenced by the non-operation of the plant and the conversion of its site to a pig pen. Abandonment constitutes a violation of law prejudicial to public interest and forfeits any rights under the certificate. This rule applies equally to the original grantee and his successor. Citing precedent, the Court stated a certificate should not be granted to a successor where the predecessor has violated the law.
On the second issue, the Court found no reason to disturb the PSC’s discretion. While priority of application is not ordinarily controlling, it becomes a decisive factor when, as here, all applicants are equally qualified in terms of financial capability and the public need would be served by only one of them. The PSC correctly determined that granting multiple certificates for the same area was inadvisable. Between equally qualified applicants, the PSC acted within its sound discretion in awarding the certificate to the first applicant, Tobias P. Marcelo. The Court emphasized that the issuance of such certificates rests on the PSC’s sound judgment, which was not abused in this instance.