Case Digest: Lim vs. CA, G.R. No. 125817

 

Lim vs. CA, G.R. No. 125817, January 16, 2002

Subject: Transportation Law

FACTS

Sometime in 1982 private respondent Donato Gonzales purchased an Isuzu passenger jeepney from Gomercindo Vallarta, holder of a certificate of public convenience for the operation of public utility vehicle plying the Monumento- Bulacan route.

While private respondent Gonzales continued offering the jeepney for public transport services he did not have the registration of the vehicle transferred in his name nor did he source for himself a certificate of public convenience for its operation. Thus, Vallarta remained on record as its registered owner and operator.

On 22 July 1990, while the jeepney was running northbound along the North diversion road somewhere in Meycauayan, Bulacan, it collided with a ten-wheeler- truck owned by petitioner Abelardo Lim and driven by his co-petitioner Esmadito Gunnaban. Gunnaban owned responsibility for the accident, explaining that while he was traveling towards Manila the truck suddenly lost its brakes.

Petitioner Lim shouldered the costs for hospitalization of the wounded, compensated the heirs of the deceased passenger, and had the Ferroza restored to good condition.He also negotiated with private respondent and offered to have the passenger jeepney repaired at his shop. Private respondent however did not accept the offer so Lim offered him P20,000.00, the assessment of the damage as estimated by his chief mechanic.

Again, petitioner Lim’s proposition was rejected; instead, private respondent was unyielding. Under the circumstances, negotiations had to be abandoned; hence, the filing of the complaint for damages by private respondent against petitioners.

RTC upheld the private respondent’s claim. On appeal, CA affirmed RTC’s ruling.

Petitioner contends that the Court of Appeals erred in sustaining the decision of the trial court despite their opposition to the well-established doctrine that an operator of a vehicle continues to be its operator as long as he remains the operator of record. According to them, to recognize an operator under the kabit system as the real party in interest and to countenance his claim for damages is utterly subversive of public policy.

ISSUE

Whether or not the new owner have any legal personality to bring the action, or is he the real party in interest in the suit, despite the fact that he is not the registered owner under the certificate of public convenience.

RULING

Yes, the new owner have any legal personality to bring the action, or is he the real party in interest in the suit, despite the fact that he is not the registered owner under the certificate of public convenience.

The kabit system is an arrangement whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate them under his license, sometimes for a fee or percentage of the earnings.

The kabit system is invariably recognized as being contrary to public policy and therefore void and inexistent under Art. 1409 of the Civil Code. One of the primary factors considered in the granting of a certificate of public convenience for the business of public transportation is the financial capacity of the holder of the license, so that liabilities arising from accidents may be duly compensated.

The kabit system renders illusory such purpose and, worse, may still be availed of by the grantee to escape civil liability caused by a negligent use of a vehicle owned by another and operated under his license. If a registered owner is allowed to escape liability by proving who the supposed owner of the vehicle is, it would be easy for him to transfer the subject vehicle to another who possesses no property with which to respond financially for the damage done.

Thus, for the safety of passengers and public who may have been wronged and deceived through the baneful kabit system, the registered owner of the vehicle is not allowed to prove that another person has become the owner so that he may be thereby relieved of responsibility.

In this case, it is at once apparent that the evil sought to be prevented in enjoining the kabit system does not exist. First, neither of the parties to the pernicious kabit system is being held liable for damages. Second, the case arose from the negligence of another vehicle in using the public road to whom no representation, or misrepresentation, was necessary. Thus it cannot be said that private respondent Gonzales and the registered owner of the jeepney were in estoppel for leading the public to believe that the jeepney belonged to the registered owner. Third, the riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. On the contrary, it was private respondent himself who had been wronged and was seeking compensation for the damage done to him. Certainly, it would be the height of inequity to deny him his right. It is evident that private respondent has the right to proceed against petitioners for the damage caused on his passenger jeepney as well as on his business. Any effort then to frustrate his claim of damages by the ingenuity with which petitioners framed the issue should be discouraged, if not repelled.

Case Digest: Jardin vs. National Labor Relations Commission, G.R. No. 119268

 

Jardin vs. National Labor Relations Commission, G.R. No. 119268, February 23, 2000

Subject: Transportation Law

FACTS

Petitioners worked as drivers for Philjama International Inc., fulfilling responsibilities within a 24-hour work schedule under a boundary system. Notably, the private respondent consistently deducted P30.00 from the daily earnings of the petitioners, citing it as a fee for washing taxi units. Suspecting the legality of this deduction, the petitioners, in an effort to protect their rights and interests, formed a labor union. However, tensions arose when, on August 6, 1991, the private respondent, suspecting union formation, prohibited the petitioners from driving.

In response to this restriction, petitioners filed a comprehensive complaint, encompassing allegations of unfair labor practices, illegal dismissal, and illegal deduction. Despite their efforts, the labor arbiter dismissed the complaint for lack of merit. Subsequently, the National Labor Relations Commission (NLRC) intervened, reversing the labor arbiter's decision and officially recognizing the petitioners as employees.

While the private respondent's initial motion for reconsideration was denied, a subsequent attempt proved successful. This turn of events prompted the petitioners to seek reconsideration, alleging grave abuse of discretion in the proceedings.

ISSUE/S

1. Whether NLRC has jurisdiction to entertain the second motion for reconsideration.

2. Whether the existence of an employer-employee relationship is a settled issue.

3. Whether existing jurisprudence supports the view that petitioners are employees.

RULING

1. Yes, the court held that NLRC's acceptance of the second motion for reconsideration was a violation of its own rules, constituting grave abuse of discretion. NLRC's rules explicitly allow only one motion for reconsideration from the same party. The court emphasized the importance of adhering to procedural rules to ensure an expeditious resolution of labor cases. The court noted that the rationale for allowing only one motion for reconsideration is to promote the swift and cost-effective settlement of labor disputes.

2. Yes, the court disagreed with NLRC's ruling that there was no employer-employee relationship between the parties. It cited prevailing jurisprudence that establishes the relationship between taxi owners/operators and taxi drivers under the boundary system as that of employer-employee, not lessor-lessee. The court emphasized that control is a crucial factor in determining an employer-employee relationship, and the owners/operators did exercise supervision and control over the drivers.

3. Yes, the court reiterated that termination of employment must follow legal procedures and be based on just and authorized causes. Since the termination of petitioners was without valid cause and lacked compliance with notice and hearing requirements, it was deemed illegal. The court ordered private respondent to reinstate the petitioners to their positions and pay them full backwages, computed from the date of dismissal until their actual reinstatement.

Case Digest: Paguio Transport Corp. vs. National Labor Relations Commission, G.R. No. 119500

 

Paguio Transport Corp. vs. National Labor Relations Commission, G.R. No. 119500, August 28, 1998

Subject: Transportation Law

FACTS

Complainant Melchor was hired by PTC as a taxi driver under the boundary system. He was advised to stop working and have a rest after a car accident involving the taxi unit he was driving. He was told by the PTC that his service was no longer needed. Then the complaint for illegal dismissal was raised. The petitioner concludes that he had no control over the number of hour’s private respondent had to work and the routes he had to take; therefore no employer-employee relationship exists.

ISSUE

Whether or not an employer-employee relationship exists.

RULING

Yes, there is an employee-employer relationship between them.

Under the law, boundary system is that of employer-employee and not of lessor-lessee. The “boundary system” the drivers do not receive fixed wages; all the excess in the amount of boundary was considered his income but it is not sufficient to withdraw the relationship between them from that of employer and employee.

In this case, private respondents were employees because they had been engaged to perform activities which were usually necessary or desirable in the usual trade or business of the employer. The petition was dismissed, the private respondent was entitled for the claim of damages and illegal dismissal.

Case Digest: Fisher vs. Yangco Steamship Company, G.R. No. L8095

 

Fisher vs. Yangco Steamship Company, G.R. No. L8095, March 31, 1915

Subject: Transportation Law

FACTS

The plaintiff, a stockholder in the Yangco Steamship Company, is suing the company for refusing to accept dynamite, powder, or other explosives for carriage on its vessels. The company's directors have declared that the classes of merchandise to be carried do not include such explosives, and prohibiting officers, agents, and servants from carrying or accepting such explosives. The Acting Collector of Customs demanded the company's acceptance and carriage of such explosives, and the company has refused to issue clearance documents until the company consents.

The plaintiff believes that if the company declines to accept such explosives, the Attorney-General of the Philippine Islands and the prosecuting attorney of Manila intend to institute proceedings against the company, its managers, agents, and servants to enforce the requirements. As a result, the company's managers and agents refuse to cease the carriage of such explosives.

The plaintiff filed a case to enjoin the steamship company from accepting such explosives under any conditions, prohibit the Collector of Customs and prosecuting officers from compel the company to accept such explosives, and prohibit officials from invoked penal provisions of Act No. 98 in case of refusal. The petitioner argued that a common carrier in the Philippine Islands may decline to accept any shipment of merchandise of a class it expressly or impliedly declines to accept from all shippers, as the duty of a common carrier to carry for all who offer arises from their public profession.

ISSUE

Whether or not a steam vessel's owners and officers, licensed to engage in coastwise trade of the Philippine Islands, can refuse to accept "dynamite, powder, or other explosives" from any shippers offering such explosives for carriage, if they are a common carrier.

RULING

No, a steam vessel's owners and officers, licensed to engage in the coastwise trade of the Philippine Islands, cannot refuse to accept "dynamite, powder, or other explosives" from any shippers offering such explosives for carriage, if they are a common carrier.

Under the law, common carriers cannot decline to accept certain goods for carriage due to traffic prejudice unless it is reasonable and necessary. Discrimination must be substantial, justifying the courts' decision. The state has the power to impose just regulations in the public's interest, but these must not deprive property owners without due process, confiscate private property without just compensation, or limit vested rights or privileges acquired under a charter or franchise. Mere prejudice or whim will not suffice.

The provisions of the Philippine statute (Act No. 98) do not force a common carrier to engage in any business against their will or make use of their facilities in a manner or for a purpose for which they are not reasonably adapted. It only prescribes that a common carrier must treat all alike, may not pick and choose which customer he will serve, and shall not make any undue or unreasonable preferences or discriminations whatsoever to the prejudice not only of any person or locality but also of any particular kind of traffic.

In the case of a steamship company, the refusal of a vessel to accept explosives for carriage on any of its vessels subjects the traffic in such explosives to a manifest prejudice and discrimination. The mere fact that violent and destructive explosions can be obtained by the use of dynamite under certain conditions is not sufficient to justify the refusal of a vessel, duly licensed as a common carrier of merchandise, to accept it for carriage. If the carrier can exercise due diligence and take reasonable precautions, the carrier would not be justified in subjecting the traffic in this commodity to prejudice or discrimination by proof that there would be a possibility of danger from explosion when no such precautions are taken.

Case Digest: Batangas CATV vs. Court of Appeals, 439 SCRA 326, G.R. No. 138810

 

Batangas CATV vs. Court of Appeals, 439 SCRA 326, G.R. No. 138810, September 29, 2004

Subject: Transportation Law

FACTS

On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No. 210 granting petitioner a permit to construct, install, and operate a CATV system in Batangas City. Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum rates specified therein, “provided, however, that any increase of rates shall be subject to the approval of the Sangguniang Panlungsod.

Sometime in November 1993, petitioner increased its subscriber rates from P88.00 to P180.00 per month. As a result, respondent Mayor wrote petitioner a letter threatening to cancel its permit unless it secures the approval of respondent Sangguniang Panlungsod, pursuant to Resolution No. 210.

Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction alleging that respondent Sangguniang Panlungsod has no authority to regulate the subscriber rates charged by CATV operators because under Executive Order No. 205, the National Telecommunications Commission (NTC) has the sole authority to regulate the CATV operation in the Philippines.

ISSUE

Whether or not a local government unit (LGU) regulate the subscriber rates charged by CATV operators within its territorial jurisdiction

RULING

No, a local government unit (LGU) cannot regulate the subscriber rates charged by CATV operators within its territorial jurisdiction.

The logical conclusion, therefore, is that in light of the above laws and E.O. No. 436, the NTC exercises regulatory power over CATV operators to the exclusion of other bodies. Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. (It uses public properties in order to reach subscribers.) The physical realities of constructing CATV system – the use of public streets, rights of ways, the founding of structures, and the parceling of large regions – allow an LGU a certain degree of regulation over CATV operators.

SC held that while it recognizes the LGUs’ power under the general welfare clause, it cannot sustain Resolution No. 210. The respondents strayed from the well-recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the State’s deregulation policy over the CATV industry. LGUs must recognize that technical matters concerning CATV operation are within the exclusive regulatory power of the NTC.

Case Digest: Philcomsat vs. Alcuaz, 180 SCRA 218, G.R. No. 84818

 

Philcomsat vs. Alcuaz, 180 SCRA 218, G.R. No. 84818, December 18, 1989

Subject: Transportation Law

FACTS

The petition seeks to annul and set aside an Order 1 issued by respondent Commissioner Jose Luis Alcuaz of the NTC which directs the provisional reduction of the rates which may be charged by petitioner for certain specified lines of its services by fifteen percent (15%) with the reservation to make further reductions later, for being violative of the constitutional prohibition against undue delegation of legislative power and a denial of procedural, as well as substantive, due process of law.

Petitioner was exempt from the jurisdiction of the then Public Service Commission, now respondent NTC. However, pursuant to Executive Order No. 196 placed under the jurisdiction, control and regulation of respondent NTC, including all its facilities and services and the fixing of rates. Implementing said Executive Order No. 196, respondents required petitioner to apply for the requisite certificate of public convenience and necessity covering its facilities and the services it renders, as well as the corresponding authority to charge rates therefor.

Petitioner filed with respondent NTC an application for authority to continue operating and maintaining the same facilities it has been continuously operating and maintaining since 1967, to continue providing the international satellite communications services it has likewise been providing since 1967, and to charge the current rates applied for in rendering such services.

Pending hearing, it also applied for a provisional authority so that it can continue to operate and maintain the above-mentioned facilities, provide the services and charge therefor the aforesaid rates therein applied for. petitioner was granted a provisional authority which was valid for six (6) months which was extended 3 times, but the last extension directed the petitioner to charge modified reduced rates through a reduction of fifteen percent (15%) on the present authorized rates. Hence this petition.

ISSUE

Whether or not the Respondent violates procedural due process for having been issued without prior notice and hearing in exercising its power to fix the rate of the Petitioner?

RULING

Yes, the respondent violated the procedural due process.

Under the law, if the authorities that where the function of the administrative body is legislative, notice of hearing is not required by due process of law, aside from statute, the necessity of notice and hearing in an administrative proceeding depends on the character of the proceeding and the circumstances involved. 

In so far as generalization is possible in view of the great variety of administrative proceedings, it may be stated as a general rule that notice and hearing are not essential to the validity of administrative action where the administrative body acts in the exercise of executive, administrative, or legislative functions; but where a public administrative body acts in a judicial or quasi-judicial matter, and its acts are particular and immediate rather than general and prospective, the person whose rights or property may be affected by the action is entitled to notice and hearing.

Case Digest: Republic vs. MERALCO, 391 SCRA 700, G.R. No. 141314

 

Republic vs. MERALCO, 391 SCRA 700, G.R. No. 141314, November 15, 2002

Subject: Transportation Law

FACTS

MERALCO filed with petitioner ERB an application for the revision of its rate schedules to reflect an average increase in its distribution charge. ERB granted a provisional increase subject to the condition that should the COA thru its audit report find MERALCO is entitled to a lesser increase, all excess amounts collected from the latter’s customers shall either be refunded to them or correspondingly credited in their favor.

The COA report found that MERALCO is entitled to a lesser increase, thus ERB ordered the refund or crediting of the excess amounts. On appeal, the CA set aside the ERB decision. MRs were denied.

ISSUE

Whether or not the regulation of ERB as to the adjustment of rates of MERALCO is valid.

RULING

Yes, the regulation of ERB as to the adjustment of rates of MERALCO is valid.

The regulation of rates to be charged by public utilities is founded upon the police powers of the State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and is affected with public interest, it ceases to be juris privati only and becomes subject to regulation. The regulation is to promote the common good. Submission to regulation may be withdrawn by the owner by discontinuing use; but as long as use of the property is continued, the same is subject to public regulation.

In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State the right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State must be one that yields a fair return on the public utility upon the value of the property performing the service and one that is reasonable to the public for the services rendered. The fixing of just and reasonable rates involves a balancing of the investor and the consumer interests.