G.R. No. L-10629. October 31, 1958.
BATANGAS TRANSPORTATION CO., petitioner, vs. GRACIANO REYES, respondent.

FACTS

The Public Service Commission (PSC) granted Graciano Reyes certificates of public convenience to operate passenger and freight services: (1) between Batangas and Balayan with 5 units, and (2) between Lemery and Lipa with 3 units. The decision was based on a finding of public need, with one commissioner dissenting. The applicant, Graciano Reyes, and his two witnesses (Macario Reyes and Antonio Comia) testified that existing services were inadequate. They claimed that the oppositor Batangas Transportation Company’s buses were often full, operated as express services to Manila that did not pick up intermediate passengers, and had irregular schedules, forcing passengers to wait for multiple trips or use overcrowded jeepneys and cargo trucks. They identified students, refinery workers, merchants, and farmers as the main passengers. The oppositor presented evidence through its Chief Traffic Supervisor, Gabriel Gomez, who stated that the company operated trips at 30-minute intervals, that buses were rarely filled to capacity (usually carrying only 8-17 passengers against a capacity of 47-1/2), and that the company was incurring significant annual losses on these lines. The oppositor also submitted traffic inspection reports (Exhibits 6 and 7) prepared by its employees, Juan Manlapaz and Paulino Mañebo, which documented low passenger volumes. The PSC disregarded these inspection reports, considering them not original and self-serving, and relied on the testimonial evidence of the applicant and his witnesses.

ISSUE

Whether the Public Service Commission erred in disregarding the traffic inspection reports submitted by the oppositor and in relying solely on the testimonial evidence presented by the applicant to grant the certificates of public convenience.

RULING

Yes. The Supreme Court reversed the decision of the Public Service Commission. The Court held that the PSC committed an error of law in refusing to consider the oppositor’s inspection reports. These reports, being documentary evidence prepared by employees in the ordinary course of business, were more reliable than the testimonies of the applicant’s witnesses. The Court found that if these reports had been considered, they would have completely discredited the applicant’s evidence, as they conclusively showed low passenger volumes and adequate existing service, contradicting the claim of public necessity. Consequently, the application of Graciano Reyes was denied.