G.R. No. L-3899 May 21, 1952
RAYMUNDO TRANSPORTATION CO., INC., petitioner, vs. VICTORINO CERVO, respondent.

FACTS

Respondent Victorino Cervo secured an emergency certificate of public convenience to operate one auto-truck from Pililla to Manila after liberation. This certificate, expiring on December 31, 1948, was extended indefinitely. Cervo then applied for its conversion into a permanent certificate. The Public Service Commission delegated its authority to receive evidence to Chief Attorney Antonio H. Aspillera. Petitioner Raymundo Transportation Co., Inc., an old operator on the Pililla-Manila line, opposed the application, arguing there was no public necessity for additional service, that it was willing to provide any needed additional service itself, and that granting the application would lead to ruinous competition. The Commission granted Cervo a permanent certificate. Petitioner’s motion for reconsideration was denied, prompting this petition for review.

ISSUE

1. Whether the Public Service Commission validly delegated its authority to receive evidence to its Chief Attorney in a contested case.
2. Whether the Public Service Commission erred in granting respondent a permanent certificate of public convenience to operate on the Pililla-Manila line.

RULING

1. On the delegation of authority, the Court found petitioner’s claim that it was illegal for a contested case was well-taken based on a recent decision. However, the Court ruled that this question could not be raised for the first time on appeal, as petitioner never objected before the Commission and instead participated in the trial before Attorney Aspillera. Under Rule 43, Section 2 of the Rules of Court, only questions raised before the Commission can be raised in a petition for review.
2. On the merits of granting the certificate, the Court affirmed the Commission’s decision.
* The fact that petitioner was a long-time operator on the line does not preclude the Commission from granting an additional permit if public necessity demands it.
* The claim of ruinous competition was unmeritorious. When public necessity requires a new operator, the resulting competition is considered wholesome and constructive, promoting efficiency. There was no showing the competition would be ruinous or prejudicial to petitioner.
* The finding of public necessity and convenience is a question of fact supported by sufficient evidence, which the Court will not disturb.
* While preference should generally be given to an old operator to provide additional service, this rule cannot be applied rigidly without causing injustice to emergency operators like respondent, who entered the field due to the old operator’s inability to rehabilitate post-war service promptly. To deprive respondent of the privilege after his investment would be unfair and unjust and could lead to monopoly.
The decision of the Public Service Commission was affirmed, with costs against petitioner.
Separate Opinion:
Justice Montemayor concurred in the result, agreeing that respondent’s emergency certificate should be converted to a permanent one as a reward for post-war service and that the delegation issue could not be raised for the first time. However, he dissented from the majority’s broader reasoning. He maintained that an old operator providing adequate service should be protected from new competition and given the first opportunity to provide any additional needed service. He cited a line of Supreme Court decisions establishing a policy of protecting established operators from ruinous competition and unnecessary duplication of services.