G.R. No. L-12544; August 25, 1958
Charlie Brown, plaintiff-appellant, vs. Constancio S. Suezo, an operator of the motor-launch ferry service doing business under the common name “C. S. Suezo and Bros.”, defendant-appellee.

FACTS

Charlie Brown operated a motor-launch ferry service across Panguil Bay (from Ozamis City to Baroy, Lanao, via Tubod) since 1947 using registered motor launches. He secured a certificate of public convenience from the Public Service Commission (PSC) for this service on February 17, 1956. Constancio S. Suezo, in early 1954, obtained a license from the Bureau of Customs to engage in the same business along the same route, using two motor launches. Suezo did not secure a certificate from the PSC. On April 4, 1956, Brown filed a complaint in the Court of First Instance against Suezo, alleging that Suezo’s operation without a PSC certificate was unauthorized and constituted ruinous and illegal competition, causing Brown damages and forcing him to pull one launch out of operation. Brown sought a declaration of illegality, damages, and an injunction. The lower court initially issued a preliminary injunction but later dissolved it upon Suezo’s posting of a counterbond. Suezo moved to dismiss the complaint for lack of cause of action and lack of jurisdiction, arguing that a PSC certificate was not a prerequisite for the business and that the PSC had exclusive jurisdiction over grievances against public utility operators. The lower court denied the motion to dismiss. However, upon Suezo’s motion for reconsideration citing the Supreme Court’s ruling in Javellana vs. Public Service Commission (98 Phil. 964), which held that the PSC has no authority to require operators of steamboats, motorboats, or motor vessels used in ferry or coastwise trade to secure a certificate of public convenience, the lower court dismissed Brown’s complaint. Brown appealed.

ISSUE

Whether the Public Service Commission has the authority to require operators of motor launches used in a ferry service (specifically across Panguil Bay) to secure a certificate of public convenience, thereby making Suezo’s operation without such a certificate illegal and actionable for damages.

RULING

No. The Supreme Court affirmed the lower court’s order dismissing the complaint. The Court, applying its precedent in Javellana vs. Public Service Commission, ruled that under Section 13(a) and (b) of Commonwealth Act No. 146 (the Public Service Act), as amended, the Public Service Commission has no authority to require operators of steamboats, motorboats, or motor vessels used in ferry or coastwise trade to obtain a certificate of public convenience or to prescribe their definite routes. Jurisdiction over the coastwise trade and the carrying or towing of passengers and freight in bays and rivers is vested in the Bureau of Customs under Section 1139 of the Revised Administrative Code. Since appellee Suezo was duly granted a permit by the Bureau of Customs, his operation could not be declared unauthorized or illegal. The Court noted that appellant Brown himself had operated his ferry service from 1947 to 1956 with only a permit from the Bureau of Customs, which demonstrated the sufficiency of such a permit prior to his competitor’s entry. Costs were awarded against appellant Brown.