G.R. No. L-19487 January 31, 1967
ROSARIO DARANG, plaintiff-appellee, vs. PEDRO TY BELIZAR, ANDRES SALAMIDA and ATTY. ANDRES SAJUL, Motor Vehicles Registrar, defendants-appellants.

FACTS

Rosario Darang, a holder of a certificate of public convenience for a bus line in Samar, filed a complaint for injunction (Civil Case No. 909) in the Court of First Instance of Samar. She sought to enjoin defendants Pedro Ty Belizar and Andres Salamida from illegally operating motor vehicles on her line and to restrain the Motor Vehicles Registrar from registering said vehicles in Salamida’s name. Darang alleged that Belizar, without authority, was operating on her line since June 7, 1957, in connivance with Salamida. She further alleged that Salamida, through a simulated deed of transfer, caused three motor vehicles registered under Belizar’s name to be transferred to his name to operate on the line covered by a certificate of public convenience granted to Salamida by the Public Service Commission (PSC), which decision was under appeal before the Supreme Court (G.R. No. L-12442). Darang also contended that these vehicles, having been withdrawn from public service by Belizar, could not be newly registered under the Motor Vehicles Act. A writ of preliminary injunction was granted. The Court of First Instance ruled in favor of Darang, declaring the sale of the trucks null and void for reasons including that the certificates of registration were not properly accomplished, the deeds of sale were fictitious as the trucks remained registered with the PSC in both names, and the sale lacked prior PSC approval. It also found Salamida violated conditions of his certificate. The court enjoined the defendants’ operations, ordered damages, and prohibited the Registrar from registering the trucks. The defendants appealed, and the case was certified to the Supreme Court.

ISSUE

1. Whether the Court of First Instance had jurisdiction over the complaint for injunction.
2. Whether the sale of the trucks from Belizar to Salamida was valid under Section 20(g) of Commonwealth Act 146 (Public Service Act).
3. Whether moral damages can be awarded in the absence of a specific allegation thereof in the complaint.
4. The application of Section 16, Act 3108.

RULING

1. The Court of First Instance had jurisdiction. The cases pending before the Supreme Court (a petition for review of the PSC decision granting Salamida’s certificate) and the PSC (a complaint against Belizar for encroachment) involved different parties and issues. The instant case primarily involved the validity of the deed of sale of the trucks and alleged violations of Salamida’s certificate, matters properly within the court’s jurisdiction and not for the PSC’s determination.
2. The Supreme Court analyzed Section 20(g) of Commonwealth Act 146, noting a change from the old law (Act 3108). Under the old law, a sale without PSC approval was null and void. Under Commonwealth Act 146, the proviso states that “nothing shall be construed to prevent the transaction from being negotiated or completed before its approval.” Thus, PSC approval is not a condition precedent to the validity of the contract but is necessary to protect public interest. However, this analysis did not affect the lower court’s finding of nullity based on other unappealed reasons (e.g., fictitious deeds, improper registration).
3. Moral damages cannot be awarded without pleading and proof of moral suffering. The general prayer in the complaint for “other remedies which may be just and equitable” was sufficient to warrant an award of exemplary damages. The Supreme Court modified the award, stating the P3,000 should be considered exemplary damages, not moral damages.
4. The issue regarding Section 16 of Act 3108 was subsumed under the discussion of Section 20(g) of Commonwealth Act 146. The Court highlighted the substantive change between the old and new laws regarding the effect of lack of PSC approval on the validity of a sale.
The decision of the lower court was affirmed in all respects except the award of damages, which was modified to be exemplary only.