G.R. No. 213088 June 28, 2017
LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD (LTFRB), Petitioner vs. G.V. FLORIDA TRANSPORT, INC., Respondent

FACTS

On February 7, 2014, a bus bearing the “G.V. Florida” mark and license plate TXT-872 met a fatal accident in Mountain Province. An investigation revealed that plate TXT-872 was registered to a different bus owned by Norberto Cue, Sr. under a specific Certificate of Public Convenience (CPC). The ill-fated bus itself was registered as a private vehicle under Dagupan Bus Co., Inc., with respondent G.V. Florida as the previous owner. The LTFRB immediately issued a preventive suspension order against Cue’s and Florida’s entire fleets.
In subsequent proceedings, it was established that Florida had purchased Cue’s CPC and his ten old buses, including the unit legitimately bearing plate TXT-872. Pending LTFRB approval of the CPC transfer, Florida replaced the old, dilapidated buses with new units but improperly used the license plates from the old fleet on the new buses. The ill-fated bus was one such new unit operating with a plate not lawfully assigned to it. The LTFRB later canceled Cue’s CPC and suspended 186 of Florida’s buses for six months. The Court of Appeals nullified this suspension, prompting the LTFRB’s petition.

ISSUE

Whether the LTFRB gravely abused its discretion in suspending the operations of 186 buses of G.V. Florida Transport, Inc. for six months.

RULING

Yes, the Supreme Court found that the LTFRB committed grave abuse of discretion. The legal logic is grounded in the principle that administrative penalties must be proportionate to the offense and based on substantial evidence connecting the violation to the sanctioned party. The LTFRB’s suspension order was a blanket penalty applied to 186 buses under 28 distinct CPCs owned by Florida. However, the established violation—the unauthorized use of a license plate (TXT-872) on an unregistered bus—was directly traceable only to the specific unit involved in the accident and, by extension, to the single CPC (Cue’s CPC No. 2007-0407) under which that plate was originally authorized.
The Court ruled that there was no substantial evidence demonstrating that the violation was a systemic practice permeating Florida’s entire fleet of 186 buses. Imposing a severe, fleet-wide suspension for an isolated infraction committed by one unit under a specific, pending CPC transfer was arbitrary and oppressive. The penalty lacked a rational relation to the proven transgression, effectively punishing buses and routes that were not implicated in the violation. Therefore, the LTFRB’s action was not merely an error of judgment but a capricious and whimsical exercise of power amounting to grave abuse of discretion, warranting judicial correction. The Court of Appeals’ decision was affirmed.