G.R. No. L-21842 May 29, 1971
JAIME R. BLANCO, petitioner, vs. NELIA MANALO, ET AL., respondents.

FACTS

The Public Service Commission (PSC) consolidated 357 separate applications for authority to operate taxicab units in Manila and its suburbs. Fifty-nine were from existing operators seeking additional units, while 298 were from new, non-operator applicants. After hearings, the PSC found public necessity justified authorizing only 330 additional units, a fraction of the nearly 15,000 units collectively applied for. It granted these units exclusively to 56 of the existing operator-applicants, denying all applications from new entrants. The PSC based its allocation on findings that existing operators were financially capable but had faced poor business conditions due to increased costs, and that limiting new operators would aid regulatory supervision.
Petitioner Jaime R. Blanco, a non-operator applicant whose application was denied, sought review. He contended the PSC erred by granting units to some operators who had allegedly sold their previously authorized units (a practice called “speculation”), by relying on an outdated “fair return” principle to favor incumbents, by violating due process in awarding units to certain unlisted operators, and by various other alleged procedural and substantive errors.

ISSUE

Did the Public Service Commission commit a reversible error in allocating the 330 additional taxicab units exclusively to existing operators and denying the applications of new entrants like petitioner?

RULING

No. The Supreme Court affirmed the PSC’s decision. The Court upheld the Commission’s factual finding of public necessity for a limited number of additional units and its discretion in allocating them. On the “speculation” charge, the Court agreed with the PSC that the record did not substantiate the claim that any grantee had engaged in the practice of securing units only to sell them. Regarding the preference for existing operators, the Court found it justified under the circumstances. Contrary to petitioner’s claim, the ruling in Manila Yellow Taxicab Co. was not violated because the PSC had evidence that existing operators were suffering from increased operational costs, bringing the case within an exception to the general rule against automatic preference. The Court also deemed reasonable the PSC’s ancillary policy to limit the proliferation of new operators to maintain effective supervision with its limited inspectors.
The due process challenge concerning awards to “unlisted” operators was deemed inconsequential to petitioner, a non-operator, as any grievance would properly belong to other existing operators. The Court found the remaining issues insufficient to warrant reversal, emphasizing the PSC’s broad discretion in assessing public necessity and convenience. The decision, being supported by substantial evidence and not tainted by grave abuse of discretion, was sustained.