GR L 48671; (December, 1986) (Digest)
G.R. No. L-48671 December 12, 1986
MUNICIPALITY OF ECHAGUE, Represented by MAYOR SALVADOR H. GAFFUD, petitioner, vs. HONORABLE LEOPOLDO M. ABELLERA, Acting Chairman, BOARD OF TRANSPORTATION, and AVELINO BALLAD, respondents.
FACTS
The Municipality of Echague, Isabela, had operated a municipal ferry service across the Cagayan River since 1936, either directly or by leasing it to the highest bidder, pursuant to its authority under the Revised Administrative Code. This service provided adequate transport and revenue. In 1977, private respondent Avelino Ballad secured a Certificate of Public Convenience from the Board of Transportation to operate a competing ferry service on the same intra-municipal routes. He notified the municipality that it must cease its own operations.
The petitioner municipality was surprised, claiming it received no notice of Ballad’s application before the Board. It filed a motion for reconsideration with the Board, arguing the award was void for lack of due process and, crucially, because it lacked the required favorable endorsement or resolution from the municipal Sangguniang Bayan. The Board denied the motion, asserting its exclusive jurisdiction under the Integrated Reorganization Plan ( P.D. No. 1 ) to issue certificates and that the decision had become final.
ISSUE
The sole issue is whether the Board of Transportation could validly award a Certificate of Public Convenience for an intra-municipal ferry service without a prior favorable resolution or endorsement from the municipal Sangguniang Bayan.
RULING
The Supreme Court granted the petition and nullified the Board’s decision. The legal logic reconciles the jurisdictions of the local government and the regulatory board. Sections 2318-2320 of the Revised Administrative Code grant the municipal council the primary authority to establish municipal ferries and to let their operation to private parties. This is a proprietary function. Conversely, the Board of Transportation, under P.D. No. 1 , possesses the regulatory authority to issue a Certificate of Public Convenience, which governs the actual operation by fixing rates, safety standards, and equipment.
These jurisdictions are complementary, not conflicting. The municipality’s authority to grant the privilege to operate is antecedent. The Board’s power to issue a certificate for supervision and regulation is subsequent. Therefore, a private applicant must first secure the municipal franchise or privilege through the Sangguniang Bayan before applying to the Board for a Certificate of Public Convenience to operate under the Board’s rules. The Board cannot bypass this prerequisite. Since Ballad’s application lacked the required municipal endorsement, the Board acted without jurisdiction in granting the certificate. The Court also noted the lack of due process in failing to notify the municipality of the application.