G.R. No. L-4378-79 May 28, 1952.
THE MUNICIPALITY OF GATTARAN, petitioner, vs. DOROTEO ELIZAGA, respondent.

THE MUNICIPALITY OF GATTARAN, petitioner, vs. FRUTO ELIZAGA, respondent.

FACTS

The Municipality of Gattaran, Cagayan, had for many years maintained ferry services across the Cagayan River and its tributaries within its jurisdiction under Ordinance No. 17, series of 1948, enacted pursuant to Sections 2318-2320 of the Revised Administrative Code. This ordinance provided rules, regulations, a schedule of fares, and called for public bidding for the operation of these ferries. As a result of a public bidding held on December 15, 1949, Fruto Elizaga won the bids for the Centro-Callao and Minanga-Casicallan ferries. Subsequently, on March 4 and 6, 1950, respectively, Fruto Elizaga and Doroteo Elizaga filed separate applications with the Public Service Commission (PSC) for certificates of public convenience to operate ferry services at various points within the Municipality of Gattaran. The municipality filed an opposition and a motion to dismiss these applications, asserting that jurisdiction over the establishment and operation of municipal ferries was vested in the municipal council, not the PSC. The PSC overruled the opposition, granted the applications, and held that under Section 13 of Commonwealth Act 146 (the Public Service Act), it had jurisdiction, supervision, and control over ferry services. The Municipality of Gattaran appealed these decisions.

ISSUE

Whether the Public Service Commission has jurisdiction to grant certificates of public convenience for the operation of ferry services within a municipality without the prior approval and grant from the municipal council, in light of the seemingly conflicting provisions of the Revised Administrative Code (granting authority to municipalities) and the Public Service Act (granting general jurisdiction to the PSC).

RULING

The Supreme Court reversed the decisions of the Public Service Commission. The Court reconciled the general jurisdiction of the PSC over ferries under the Public Service Act and the specific authority of municipalities over municipal ferries under the Revised Administrative Code. It held that the municipality has the primary authority to acquire, establish, and grant the privilege of operating a municipal ferry, either by operating it itself or by letting it to a private party through public bidding. However, a private party who obtains such a grant from the municipality must still secure a certificate of public convenience from the PSC before operating. The PSC’s role is to exercise supervision and control, such as fixing reasonable rates (taking into account the amount paid to the municipality) and specifying equipment and manner of operation to ensure public convenience, comfort, and safety. In these cases, the PSC exceeded its jurisdiction by granting the applications of Doroteo and Fruto Elizaga without their first having obtained the requisite grant or privilege from the Municipality of Gattaran. Interested persons must first apply to the municipal council concerned. The proceedings before the PSC were annulled.