G.R. No. 37321 ; March 3, 1933
INOCENCIO TAN SIMA, applicant-appellee, vs. DOLORES HACBANG, opponent-appellant.

FACTS

Inocencio Tan Sima applied with the Public Service Commission to operate two trucks on specific routes between Catbalogan, Gandara, Wright, and Loquinlocon. Dolores Hacbang, who was already operating nine trucks on the same and overlapping routes under certificates she obtained (though her applications were filed after Tan Sima’s), opposed the application. She argued her service was satisfactory, granting a new certificate would not serve public interest, and would cause ruinous competition. The Commission initially granted Tan Sima’s application. After a motion for new trial, Hacbang was allowed to present evidence, but the Commission affirmed its decision. Hacbang appealed.

ISSUE

Whether the Public Service Commission erred in granting Tan Sima a certificate of public convenience to operate on routes where Hacbang, a prior operator, was already rendering adequate and satisfactory service.

RULING

Yes. The Supreme Court reversed the Commission’s decision and cancelled Tan Sima’s certificate. The Court held that the policy of the law is to protect a first operator who is rendering sufficient, adequate, and satisfactory service and complying with regulations. Such an operator has a preferential right and should not be subjected to ruinous competition. Public interest is not served by authorizing a new operator where existing service is adequate. Priority is determined not by the date of filing an application, but by the date of issuance of the certificate and commencement of operation. Here, Hacbang was the prior operator both in certificate issuance and in actual service. The Commission should have given her the opportunity to improve or expand her service if needed, rather than granting a certificate to a competitor.

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