G.R. No. 33537 , December 5, 1930
ESCUDERO ELECTRIC SERVICE COMPANY, petitioner-appellant, vs. MARGARITA ROXAS Y AYALA VIUDA DE SORIANO, respondent-appellee.

FACTS

The Escudero Electric Service Company (Escudero) applied to the municipal council of Alaminos, Laguna, in October 1928 for a franchise to operate an electric light service. The council took no action due to dissatisfaction with the proposed tariff. In August 1929, a bill (later enacted as Act No. 3648 ) granting Escudero a legislative franchise was filed in the Philippine Legislature. Meanwhile, in October 1929, Margarita Roxas y Ayala Viuda de Soriano (Roxas) applied for and obtained a municipal franchise from the same council, which was approved by the provincial board. Both parties subsequently applied to the Public Service Commission (PSC) for certificates of public convenience: Escudero on October 14, 1929, and Roxas on November 11, 1929. Act No. 3648 , granting Escudero a legislative franchise, was approved on December 7, 1929, but Section 8 of the Act conditioned its exercise upon obtaining a certificate of public convenience from the PSC. After a hearing, the PSC denied Escudero’s application and granted Roxas’s certificate. Escudero appealed, arguing that its legislative franchise should prevail over Roxas’s municipal franchise.

ISSUE

Whether the Public Service Commission erred in denying Escudero’s application for a certificate of public convenience and granting Roxas’s application, despite Escudero’s prior legislative franchise.

RULING

No, the Public Service Commission did not err. The Supreme Court affirmed the PSC’s decision. While a legislative franchise ( Act No. 3648 ) is superior to a municipal franchise, Section 8 of Act No. 3648 expressly conditioned the exercise of Escudero’s franchise upon first obtaining a certificate of public convenience from the PSC. The PSC, after due hearing, determined that the public convenience and necessity were better served by granting the certificate to Roxas, who had demonstrated sufficient capital and a viable proposal supported by the municipal council. The Court found that the record supported the PSC’s conclusions and that Escudero’s conditional legislative franchise did not obligate the PSC to issue the certificate. Thus, the PSC’s discretion was properly exercised in favor of Roxas.