G.R. No. L-28725, March 12, 1968
BATANGAS LAGUNA TAYABAS BUS COMPANY, petitioner, vs. ASSOCIATE COMMISSIONER JOSUE L. CADIAO, PUBLIC SERVICE COMMISSION, LAND TRANSPORTATION COMMISSION, and EASTERN TAYABAS BUS CO., INC., respondents.

FACTS

Petitioner Batangas Laguna Tayabas Bus Company (BLTB) is a holder of several certificates of public convenience for bus service. It filed a petition for mandamus and contempt with a prayer for a restraining order to compel the Land Transportation Commission to act on its letters seeking deferment of action on any request by respondent Eastern Tayabas Bus Co., Inc. (Eastern Tayabas) for the issuance of plates for units involved in a lease agreement between them. This request was based on the alleged nullity of an order dated November 2, 1967, issued by respondent Associate Commissioner Josue L. Cadiao of the Public Service Commission (PSC). The PSC order granted Eastern Tayabas’s petition to acquire and register units to operate its certificates, as its lease contract with BLTB was to terminate on March 6, 1968, with the proviso that it could not operate earlier than that date. The order was without prejudice to the resolution of Eastern Tayabas’s contention, pending before the regular courts, that it had the right to terminate the lease after a 60-day notice.
BLTB contended the November 2, 1967 order was beyond the PSC’s jurisdiction because the matter was pending resolution in an arbitration proceeding, pursuant to a Supreme Court decision of August 31, 1966, which declared the PSC without jurisdiction to continue with cases between the parties until final judgment by the Court of First Instance of Laguna in a specific civil case, and which had issued a restraining order. BLTB also alleged a denial of procedural due process, as no hearing was accorded to it before the order’s issuance. BLTB later filed an amended petition adding certiorari, prohibition, and injunction, alleging surreptitious registration of units and improper, capricious, and arbitrary actions by the respondents.
Eastern Tayabas filed a motion to dismiss, arguing BLTB came to court with unclean hands and failed to state a cause of action. It specified that BLTB’s petition omitted material facts, including the existence and terms of the lease contracts (1958 and its 1963 renewal), the full circumstances of the prior Supreme Court restraining order, and that a full hearing on the matter was actually conducted by the PSC on January 24, 1968, regarding BLTB’s petition to set aside and reconsider the November 2, 1967 order.

ISSUE

1. Whether the Public Service Commission, through Associate Commissioner Cadiao, had jurisdiction to issue the order of November 2, 1967, allowing Eastern Tayabas to acquire and register units for operating its certificates.
2. Whether procedural due process was observed in the issuance of the said order.

RULING

The Supreme Court DISMISSED the petition.
1. On Jurisdiction: The PSC had jurisdiction. The Court clarified that its prior decision in Batangas Laguna Tayabas Bus Company v. Public Service Commission (L-25994, Aug. 31, 1966) restrained the PSC only from acting on the private aspects of the lease agreement—the private rights of the parties as lessor and lessee. The PSC was without jurisdiction to resolve disputes over the terms of the private lease agreement. However, the Court intimated that matters involving the public interest or public aspect of the utility operation fall within the PSC’s jurisdiction. The order of November 2, 1967, which dealt with Eastern Tayabas’s petition to acquire and register units to operate its certificates after deciding not to renew the lease, involved the public aspect of operating a public utility. Citing Garcia v. Bonifacio, the Court reaffirmed that the PSC is the sole entity empowered to handle matters concerning the operation, withdrawal, or transfer of certificates of public convenience. Therefore, the PSC acted within its jurisdiction.
2. On Due Process: Procedural due process was observed. The allegation that no hearing was accorded to BLTB was without basis. As detailed in Eastern Tayabas’s motion to dismiss, the PSC conducted a full hearing on January 24, 1968, on BLTB’s petition to set aside and reconsider the November 2, 1967 order. Prior to this, a notice of hearing was issued for November 24, 1967, and an en banc session was held on December 7, 1967, where lawyers for both parties argued extensively. The Court held that even if there was an initial absence of notice, the defect was cured by the subsequent opportunity for a full hearing on the motion for reconsideration. Due process requires fairness and the substance of an opportunity to be heard, which was satisfied here.
The Court also admonished BLTB’s counsel for lack of candor, noting the petition omitted material facts to impart a semblance of plausibility, failing in the duty of an officer of the court to present facts with truth and accuracy. Costs were imposed against the petitioner.