G.R. No. L-13910; May 30, 1960
MANILA YELLOW TAXI-CAB, INC., petitioner, vs. EDMUNDO L. CASTELO, respondent.

FACTS

On March 7, 1957, respondent Edmundo L. Castelo applied with the Public Service Commission (PSC) for a certificate of public convenience to operate ten taxicab units in Cabanatuan City and throughout Luzon. Petitioner Manila Yellow Taxi-Cab, Inc., an existing operator of ten taxicab units in the same territory, opposed the application. It argued that its current service was more than sufficient to meet public demand, and granting the application would create ruinous competition. It further claimed a preferential right as an old operator if additional service was deemed necessary. After trial, the PSC, by a 21 vote, granted Castelo a certificate to operate six taxicab units. The petitioner appealed, contending the PSC erred in finding a need for more taxicab facilities and that existing service was insufficient.
At the hearing, the petitioner presented testimonial and documentary evidence to show its taxicab business in Cabanatuan was operating at a loss. Witnesses testified that transportation in the city included calesas, jitneys, buses, and the petitioner’s ten taxicabs, with many taxicabs often empty. The branch manager stated that only seven of the ten units were operational, with three under repair, and average daily earnings were low except during carnival season.
In contrast, Castelo presented testimonial and documentary evidence, including resolutions from the Cabanatuan Jaycees and City Council endorsing his application. He testified that Cabanatuan had seven colleges, numerous government offices, and organizations, and that students and employees often had to use calesas due to a lack of available taxis. He cited the inadequacy of the petitioner’s service, noting its units were old (1952 models) with holes in the floors, causing discomfort, especially for hospital patients. Other witnesses corroborated the insufficiency of transportation, particularly at night and during rainy seasons when calesa service diminished.

ISSUE

Whether the Public Service Commission erred in finding a need for additional taxicab facilities in Cabanatuan City and in granting the application of respondent Castelo instead of giving preferential right to the petitioner as an old operator.

RULING

The Supreme Court affirmed the decision of the Public Service Commission.
1. On the Finding of Public Need: The Court upheld the PSC’s factual finding that there was a need for more taxicab facilities in Cabanatuan City. It emphasized that the question of public necessity and convenience is factual, and the PSC’s finding, supported by sufficient evidence, should not be disturbed. The record showed Cabanatuan was a large, well-populated city with many schools, businesses, and government offices, creating continuous travel demand. The PSC found that the petitioner’s service was insufficient, often with fewer than ten units operational due to breakdowns, and its vehicles were in poor condition, leading to low patronage. The Court cited precedent (Raymundo Transportation Co. vs. Cervo) that it will not substitute its discretion for the PSC on questions of fact unless there is no evidence to support the decision.
2. On Preferential Right of Old Operator: The Court rejected the petitioner’s claim of preferential right. Citing Isidro vs. Ocampo, it ruled that preferential right applies only when the old operator has applied to meet the increased demand. Here, the petitioner did not apply for an increase in its service; instead, Castelo, a new operator, offered to provide the additional service. Therefore, no preferential right could be invoked.
The decision of the Public Service Commission was affirmed, with costs against the petitioner.