GR L 7224; (May, 1955) (Digest)
G.R. No. L-7224; May 27, 1955
RAYMUNDO TRANSPORTATION CO., INC., petitioner, vs. A. GERGARAY TANCHINGCO, respondent.
FACTS
On January 12, 1946, respondent A. Gergaray Tanchingco was granted a temporary certificate of public convenience to operate an auto-truck service of ten round trips daily between Binangonan, Rizal, and Manila, using four units. On December 10, 1947, he applied to make this certificate permanent. Pending this application, and due to a scarcity of trucks and spare parts, the Public Service Commission permitted him on February 23, 1948, to withdraw or lay off two of the four units without prejudice to their future reinstatement. The application for permanent conversion was opposed by other operators, with only petitioner Raymundo Transportation Co., Inc., prosecuting its opposition. The Commission, finding that public convenience would be promoted, granted the application and issued a permanent certificate for 25 years, authorizing the operation of the trips and all four units originally under the temporary certificate.
ISSUE
Whether the Public Service Commission erred in granting respondent a permanent certificate of public convenience authorizing the operation of four units, including the two previously withdrawn, instead of restricting it to only two units on the ground of preventing ruinous competition.
RULING
The Supreme Court affirmed the decision of the Public Service Commission. The claim of ruinous competition was not proven. The Commission found a need to reinstate respondent’s two laid-off units, especially since eleven of petitioner’s authorized units were in storage and not in actual operation. Thus, the operation of respondent’s two units would merely replace part of the service that petitioner was not providing. Petitioner’s evidence showed actual yearly gains despite some monthly losses, with no showing that such losses were due to ruinous competition or a decreased volume of business from increased competing units. The mere possibility of reduced earnings does not constitute ruinous competition; it must be shown that the business would not earn a fair return on its capital investment. Protection of established operators should be consistent with public need and cannot be invoked to favor an old operator not utilizing its full authorized fleet while preventing a newcomer from supplying the abandoned service.