G.R. No. L-15490-93; April 29, 1961
CAMARINES SUR INDUSTRY CORPORATION, petitioner, vs. JAIME T. BUENAFLOR, respondent.

FACTS

The case involves competing applications before the Public Service Commission (PSC) for authority to operate an ice plant and cold storage service in Sabang, Calabanga, Camarines Sur. Respondent Jaime T. Buenaflor filed his applications first on June 25, 1957. Petitioner, then known as Camarines Sur Industry Corporation (the old corporation), opposed Buenaflor’s applications and subsequently filed its own competing applications on October 1, 1957. During the hearings, Buenaflor moved to dismiss the old corporation’s applications, challenging its legal personality as its corporate life had expired in November 1953. In response, the corporators of the old corporation organized a new corporation under the same name on October 30, 1957, and conveyed to it the assets and certificates of public convenience of the old corporation, which the PSC provisionally approved.
The PSC, in its joint decision, granted the new corporation’s application for a 5-ton ice plant but denied its application for a cold storage service. Conversely, it granted Buenaflor’s application for a 1-ton ice plant and a cold storage service but denied his application for a 5-ton plant. Both parties appealed different aspects of this decision. In a prior related case (G.R. Nos. L-14991-94), the Supreme Court had already ruled on the ice plant aspect, revoking the grant to the corporation and awarding Buenaflor a certificate for a 5-ton ice plant instead. The present appeal concerns the PSC’s denial of the corporation’s application for the cold storage service.

ISSUE

Whether the petitioner corporation is entitled to a certificate of public convenience to operate a cold storage service in Sabang.

RULING

The Supreme Court denied the petition and affirmed the PSC’s decision. The legal logic hinges on the petitioner’s lack of legal standing and the principle that an entity cannot benefit from its own prior illegality. The Court clarified that the petitioner in this appeal is either the old corporation or the new one. If it is the old corporation, it has no legal personality to appeal or seek a certificate, as its corporate existence expired in 1953. If it is the new corporation, it lacks standing because it never filed an application for a cold storage service in Sabang; the applications were filed by the old, defunct corporation.
Crucially, the Court refused to acknowledge any preferential right in favor of the petitioner. The old corporation’s continued operation after its dissolution in 1953 was illegal. To grant its successor a certificate based on the pioneer service rendered during this period of illegal existence would be to reward that illegality, as the Court had previously held in the related ice plant case. The preference Buenaflor claimed as the first applicant was thus upheld as valid and equitable. The Court emphasized that the new corporation was merely a transferee of assets, not a continuation of the old entity, and had not complied with the publication requirements for a new application. Therefore, the PSC correctly granted the cold storage service franchise to Buenaflor.