Philippine Supreme Court Jurisprudence


Philippine Supreme Court Jurisprudence > Year 1953 > September 1953 Decisions > G.R. No. L-5458 September 16, 1953 - LUZON STEVEDORING CO. v. PUBLIC SERVICE COMMISSION, ET AL.

093 Phil 735:




PHILIPPINE SUPREME COURT DECISIONS

EN BANC

[G.R. No. L-5458. September 16, 1953.]

LUZON STEVEDORING CO., INC., and VISAYAN STEVEDORE TRANSPORTATION CO., Petitioners, v. THE PUBLIC SERVICE COMMISSION and THE PHILIPPINE SHIPOWNERS ASSOCIATION, Respondents.

Perkins, Ponce Enrile, Contreras and Enrique Belo, for Petitioners.

Ozaeta, Roxas, Lichauco, Picazo, Juan H. Paulino and Gerardo M. Alfonso for respondent Philippine Shipowners Association.


SYLLABUS


1. CONTRACTS AND OBLIGATIONS; ADMIRALTY LAW; HIRE OF VESSEL, DISTINGUISHED FROM LEASE THEREOF. — Where the lighters and tugboats in question were not leased, but used to carry goods for compensation at a fixed rate for a fixed weight, they must be deemed to have been hired, hired in the sense that the shippers did not have direction, control, and maintenance thereof, which is a characteristic feature of lease.

2. PUBLIC UTILITY; DETERMINATION WHETHER A FIRM OR COMPANY IS A PUBLIC UTILITY. — Public Utility, even where the term is not defined by statute, is not determined by the number of people actually served. Nor does the mere fact that service is rendered only under contract prevent a company from being a public utility. [43 Am. Jur., 573; Luzon Brokerage Co. v. Public Service Commission, 40 Off. Gaz., Supp. 7, p. 271. ] On the other hand, causal or incidental service devoid of public character and interest is not brought within the category of public utility. The demarkation line is not susceptible of exact description or definition, each being governed by its circumstance.

3. ID.; ID.; CASE AT BAR. — The transportation service which was the subject of complaint was not casual or incidental. It had been carried on regularly for years at almost uniform rates of charges. Although the number of the company’s customers was limited, the value of goods, transported was not inconsiderable. It did not have the same customers all the time embraced in the complaint, and there was no reason to believe that it would not accept, and there was nothing to prevent it from accepting, new customers that might be willing to avail of its services to the extent of its capacity. Held: Applying the plain letter of Commonwealth Act No. 146, it is a public utility, and to restrain it from further operating its watercraft to transport goods for hire or compensation between points in the Philippines until the rates it proposes to charge are approved by the Public Service Commission, does not invade private rights of property or contract. The constitutionality of Commonwealth Act No. 146 was upheld, implicity in Luzon Brokerage Co. v. Public Service Commission [40 Off. Gaz., Supp. 7, p. 271] and explicitly in Pangasinan Transportation Co. v. Public Service Commission [70 Phil., 221].

4. ID.; RUINOUS; COMPETITION; ITS PREVENTION, ONE OF THE PURPOSES OF THE PUBLIC SERVICE LAW. — The Public Service Law was enacted not only to protect the public against unreasonable charges and poor, inefficient service, but also to prevent ruinous competition. That is the main purpose in bringing under the jurisdiction of the Public Service Commission Motor Vehicles, other means of transportation, ice plants, etc., which cater to a limited portion of the public under private agreements. To the extent that such agreements may tend to wreek or impair the financial stability and efficiency of public utilities who do offer service to the public in general, they are affected with public interest and come within the police power of the state to regulate.

5. PUBLIC SERVICE COMMISSION; HEARINGS THEREIN; DESIGNATION OF COMMISSION TO TAKE EVIDENCE; WAIVER OF OBJECTION TO SUCH DESIGNATION. — It was tardy to object, for the first time to the designation of a commissioner to take the evidence, after decision was rendered. The point is procedural, not jurisdictional, and may be waived by express consent or acquiescence [Everett Steamship Corpn. v. Chua Hiong, 90 Phil., 64; La Paz Ice Plant v. Comision de Utilidades Publicas, 89 Phil., 109]. Where in a prolonged hearing before a commissioner, a party crossexamined his adversary’s witnesses and presented his own evidence, he has waived objection to such designation.


D E C I S I O N


TUASON, J.:


Petitioners apply for review of a decision of the Public Service Commission restraining them "from further operating their watercraft to transport goods for hire or compensation between points in the Philippines until the rates they propose to charge are approved by this Commission."cralaw virtua1aw library

The facts are summarized by the Commission as follows:jgc:chanrobles.com.ph

". . . respondents are corporations duly organized and existing under the laws of the Philippines, mainly engaged in the stevedoring or lighterage and harbor towage business. At the same time, they are engaged in interisland service which consists of hauling cargoes such as sugar, oil, fertilizer and other commercial commodities which are loaded in their barges and towed by their tugboats from Manila to various points in the Visayan Islands, particularly in the Provinces of Negros Occidental and Capiz, and from said places to Manila. For this service respondents charge freightage on a unit price with rates ranging from P0.50 to P0.62 1/2 per bag or picul of sugar loaded or on a unit price per ton in the case of fertilizer or sand. There is no fixed route in the transportation of these cargoes, the same being left at the indication of the owner or shipper of the goods. The barge and the tugboats are manned by the crew of respondents and, in case of damage to the goods in transit caused by the negligence of said crews, respondents are liable therefor. The service for which respondents charge freightage covers the hauling or carriage of the goods from the point of embarkation to the point of disembarkation either in Manila or in any point in the Visayan Islands, as the case may be.

"The evidence also sufficiently establishes that respondents are regularly engaged in this hauling business serving a limited portion of the public. Respondent Luzon Stevedoring Company, Inc., has among its regular customers the San Miguel Glass Factory, PRATRA, Shell Co., of P.I., Ltd., Standard Oil Co., of New York and Philippine-Hawaiian; while respondent Visayan Stevedore Transportation Co., has among its regular customers the Insular Lumber, Shell Company, Ltd., Kim Kee Chua Yu & Co., PRATRA and Luzon Merchandising Corporation. During the period from January, 1949 and up to the present, respondent Luzon Stevedoring Co. Inc., has been rendering to PRATRA regularly and on many occasions such service by carrying fertilizer from Manila to various points in the Provinces of Negros Occidental and Capiz, such as Hinigatan, Silay, Fabrica, Marayo, Mambaquid, Victorias and Pilar, and on the return trip sugar was loaded from said provinces to Manila. For these services, as evidenced by Exhibits A, A-1, A-2, A-3 and A-4, respondent Luzon Stevedoring Company, Inc., charged PRATRA at the rate of P0.60 per picul or bag of sugar and, according to Mr. Mauricio Rodriguez, chief of the division in charge of sugar and fertilizer of the PRATRA, for the transportation of fertilizer, this respondent charged P12 per metric ton. During practically the same period, respondent Visayan Stevedore Transportation Company transported in its barges and towed by its tugboats sugar for Kim Kee Chua Yu & Company coming from Victorias, Marayo and Pilar to Manila, and for Luzon Merchandising Corporation, from Hinigaran, Bacolod, Marayo and Victorias to Manila. For such service respondent Visayan Stevedore Transportation Company charge Kim Kee Chua Yu Company for freightage P0.60 per picul or bag as shown in Exhibits C, C-1, C-2, C-3, C-4, C- 5, C-6, C-7 and C-8, and Luzon Merchandising Corporation was also charged for the same service and at the same rate as shown in Exhibits B, B-1 and B-2."cralaw virtua1aw library

It was upon these findings that the Commission made the order now sought to be reviewed, upon complaint of the Philippine Shipowners’ Association charging that the then respondents were engaged in the transportation of cargo in the Philippines for hire or compensation without authority or approval of the Commission, having adopted, filed and collected freight charges at the rate of P0.60 per bag or picul, particularly sugar, loaded and transported in their lighters and towed by their tugboats between different points in the Province of Negros Occidental and Manila, which said rates resulted in ruinous competition with complainant.

Section 13 (b) of the Public Service Law (Commonwealth Act No. 146) defines public service thus:jgc:chanrobles.com.ph

"The term ’public service’ includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes any common carrier, railroad, street railway, traction railway, subway, motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries, and small water craft, engaged in the transportation of passengers and freight, shipyard, marine railway, marine repair shop, warehouse, wharf or dock, ice plant, ice-refrigeretion plant, canal, irrigation system, sewerage, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, telephone, wire or wireless telegraph system and broadcasting radio stations."cralaw virtua1aw library

It is not necessary, under this definition, that one holds himself out as serving or willing to serve the public in order to be considered public service.

In Luzon Brokerage Company v. Public Service Commission (40 Off. Gaz., 7th Supplement, p. 271), this court declared that "Act 454 is clear in including in the definition of a public service that which is rendered for compensation, although limited exclusively to the customers of the petitioner."cralaw virtua1aw library

In that case, the Luzon Brokerage Company, a customs broker, had been receiving, depositing and delivering goods discharged from ships at the pier to its customers. As here, the Luzon Brokerage was then rendering transportation service for compensation to a limited clientele, not to the public at large.

In the United States where, it is said, there is no fixed definition of what constitutes public service or public utility, it is also held that it is not always necessary, in order to be a public service, that an organization be dedicated to public use, i.e., ready and willing to serve the public as a class. It is only necessary that it must in some way be impressed with a public interest; and whether the operation of a given business is a public utility depends upon whether or not the service rendered by it is of a public character and of public consequence and concern. (51 C. J. 5.) Thus, a business may be affected with public interest and regulated for public good although not under any duty to serve the public. (43 Am. Jur., 572.)

It can scarcely be denied that the contracts between the owners of the barges and the owners of the cargo at bar were ordinary contracts of transportation and not of lease. Petitioners’ watercraft was manned entirely by crews in their employ and payroll, and the operation of the said craft was under their direction and control, the customers assuming no responsibility for the goods handled on the barges. The great preponderance of the evidence contradicts the assertion that there was any physical or symbolic conveyance of the possession of the tugboats and barges to the shippers. Whether the agreements were written or verbal, the manner of payment of freight charges, the question who loaded and unloaded the cargo, the propriety of the admission of certain receipts in evidence, etc., to all of which the parties have given much attention — these are matters of form which do not alter the essential nature of the relationship of the parties to the transactions as revealed by the fundamental facts of record.

It is contended that "if the Public Service Act were to be construed in such manner as to include private lease contracts, said law would be unconstitutional," seemingly implying that, to prevent the law from being in contravention of the Constitution, it should be so read as to embrace only those persons and companies that are in fact engaged in public service" with its corresponding qualification of an offer to serve indiscriminately the public."cralaw virtua1aw library

It has been already shown that the petitioners’ lighters and tugboats were not leased, but used to carry goods for compensation at a fixed rate for a fixed weight. At the very least, they were hired, hired in the sense that the shippers did not have direction, control, and maintenance thereof, which is a characteristic feature of lease.

On the second proposition, the Public Service Commission has, in our judgment, interpreted the law in accordance with legislative intent. Commonwealth Act No. 146 declares in unequivocal language that an enterprise of any of the kinds therein enumerated is a public service if conducted for hire or compensation even if the operator deals only with a portion of the public or limited clientele.

It has been seen that public utility, even where the term is not defined by statute, is not determined by the number of people actually served. Nor does the mere fact that service is rendered only under contract prevent a company from being a public utility. (43 Am. Jur., 573.) On the other hand, casual or incidental service devoid of public character and interest, it must be admitted, is not brought within the category of public utility. The demarkation line is not susceptible of exact description or definitions, each case being governed by its peculiar circumstances.

"It is impossible to lay down any general rule on the subject whether the rendering of incidental service to members of the public by an individual or corporation whose principal business is of a different nature constitute such person a public utility. In the result reached, the cases are in conflict, as the question involved depends on such factors as the extent of service, whether such person or company has held himself or itself out as ready to serve the public or a portion of the public generally, or in other ways conducted himself or itself as a public utility. Tn several cases, it has been held that the incidental service rendered to others constituted such person or corporation a public utility, but in other cases, a contrary decision has been reached." (43 Am. Jur., 573.)

The transportation service which was the subject of complaint was not casual or incidental. It had been carried on regularly for years at almost uniform rates of charges. Although the number of the petitioners’ customers was limited, the value of goods transported was not inconsiderable. Petitioners did not have the same customers all the time embraced in the complaint, and there was no reason to believe that they would not accept, and there was nothing to prevent them from accepting, new customers that might be willing to avail of their service to the extent of their capacity. Upon the well-established facts as applied to the plain letter of Commonwealth Act No. 146, we are of the opinion that the Public Service Commission’s order does not invade private rights of property or contract.

In at least one respect, the business complained of was a matter of public concern. The Public Service Law was enacted not only to protect the public against unreasonable charges and poor, inefficient service, but also to prevent ruinous competition. That, we venture to say, is the main purpose in bringing under the jurisdiction of the Public Service Commission motor vehicles, other means of transportation, ice plants, etc., which cater to a limited portion of the public under private agreements. To the extent that such agreements may tend to wreck or impair the financial stability and efficiency of public utilities who do offer service to the public in general, they are affected with public interest and come within the police power of the state to regulate.

Just as the legislature may not "declare a company or enterprise to be a public utility when it is not inherently such," a public utility may not evade control and supervision of its operation by the government by selecting its customers under the guise of private transactions.

For the rest, the constitutionality of Commonwealth Act No. 146 was upheld, implicitly in Luzon Brokerage Company v. Public Service Commission, supra, and explicitly in Pangasinan Transportation Company v. Public Service Commission (70 Phil., 221).

Were there serious doubts, the courts should still be reluctant to invalidate the Public Service Law or any provision thereof. Although the legislature can not, by its mere declaration, make something a public utility which is not in fact such, "the public policy of the state as announced by the legislature will be given due weight, and the determination of the legislature that a particular business is subject to the regulatory power, because the public welfare is dependent upon its proper conduct and regulation, will not lightly be disregarded by the courts." (51 C. J. 5.)

The objection to the designation of Attorney Aspillera as commissioner to take the evidence was tardy. It was made for the first time after decision was rendered, following a prolonged hearing in which the petitioners crossexamined the complainant’s witnesses and presented their own evidence.

The point is procedural, not jurisdictional, and may be waived by express consent or acquiescence. So it was held in Everett Steamship Corporation v. Chua Hiong, 90 Phil. 64 and La Paz Ice Plant and Cold Storage Company v. Comision de Utilidades P�blicas Et. Al., 89 Phil., 109.

Upon the foregoing considerations, the appealed order of the Public Service Commission is affirmed, with costs against the petitioners.

Paras, C.J., Pablo, Bengzon, Padilla, Montemayor, Reyes, Jugo, Bautista Angelo and Labrador, JJ., concur.




Back to Home | Back to Main




















chanrobles.com





ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com






September-1953 Jurisprudence                 

  • G.R. No. L-4860 September 8, 1953 - ENCARNACION E. VDA. DE FERNANDO, ET AL. v. MAGDALENA F. GALLARDO

    093 Phil 708

  • G.R. No. L-5269 September 8, 1953 - ENRIQUE AL. CAPISTRANO v. FEDERICO CARIÑO, ET AL.

    093 Phil 710

  • G.R. No. L-5284 September 11, 1953 - PEOPLE OF THE PHIL. v. EDUARDO ABESAMIS

    093 Phil 712

  • G.R. No. L-5451 September 14, 1953 - MANILA RAILROAD COMPANY v. RODOLFO BALTAZAR

    093 Phil 715

  • G.R. Nos. L-4505 & L-5228 September 15, 1953 - YSIDRA COJUANGCO v. MANUEL ERNESTO GONZALES

    093 Phil 718

  • G.R. No. L-4005 September 16, 1953 - JUAN S. RUSTIA, ET AL. v. AGUINALDO & AGUINALDO

    093 Phil 729

  • G.R. No. L-5458 September 16, 1953 - LUZON STEVEDORING CO. v. PUBLIC SERVICE COMMISSION, ET AL.

    093 Phil 735

  • G.R. No. L-6756 September 16, 1953 - NICOLAS Y. FELICIANO, ET AL. v. ARSENIO LUGAY, ET AL.

    093 Phil 744

  • G.R. Nos. L-5664 & L-5698 September 17, 1953 - PHILIPPINE LAND-AIR-SEA LABOR UNION v. COURT OF INDUSTRIAL RELATIONS, ET AL.

    093 Phil 747

  • G.R. No. L-5023 September 18, 1953 - LUIS F. JOSE v. CONSOLIDATED INVESTMENTS INC., ET ,AL.

    093 Phil 752

  • G.R. No. L-5820 September 18, 1953 - ROSARIO MATUTE v. HIGINO MACADAEG, ET AL.

    093 Phil 761

  • G.R. No. L-4080 September 21, 1953 - JOSE R. MARTINEZ v. PHILIPPINE NATIONAL BANK

    093 Phil 765

  • G.R. No. L-5189 September 21, 1953 - GAUDENCIO SERRANO v. DONATA CABRERA, ET AL.

    093 Phil 774

  • G.R. No. L-4669 September 22, 1953 - BENJAMIN ASTUDILLO, ET AL. v. ANTONIO ASTUDILLO

    093 Phil 777

  • G.R. No. L-4942 September 23, 1953 - NIEVES DURAN EMBATE v. RAFAEL F. PENOLIO

    093 Phil 782

  • G.R. No. L-5856 September 23, 1953 - MARCELINO A. BUSACAY v. ANTONIO F. BUENAVENTURA, ET AL.

    093 Phil 786

  • G.R. No. L-4972 September 25, 1953 - SATURNINO MOLDERO, ET AL. v. SATURNINO MOLDERO

    093 Phil 792

  • G.R. No. L-5469 September 25, 1953 - AIDA F. PENDATUN v. CRISANTO ARAGON, ET AL.

    093 Phil 798

  • G.R. No. L-5536 September 25, 1953 - LAUREANA TORIO v. NICANOR ROSARIO

    093 Phil 800

  • G.R. No. L-6050 September 25, 1953 - NARCISO BAGTAS v. BIENVENIDO A. TAN

    093 Phil 804

  • G.R. No. L-535 September 28, 1953 - RUTH GREY v. INSULAR LUMBER COMPANY

    093 Phil 807

  • G.R. No. L-5763 September 28, 1953 - EUGENIO AQUINO v. EULOGIO F. DE GUZMAN, ET AL.

    093 Phil 824

  • G.R. No. L-1411 September 29, 1953 - DIONISIO RELLOSA v. GAW CHEE HUN

    093 Phil 827

  • G.R. No. 3007 September 29, 1953 - PILAR BAUTISTA, ETC., ET AL. v. HILARIA UY ISABELO, ETC.

    093 Phil 843

  • G.R. No. L-3529 September 29, 1953 - APOLINAR TALENTO, ET AL. v. EIGERO MAKIKI, ET AL.

    093 Phil 855

  • G.R. No. L-4068 September 29, 1953 - BERNABE B. CAOILE v. YU CHIAO PENG

    093 Phil 861

  • G.R. No. L-5040 September 29, 1953 - BASILISA ZAFRA VDA. DE ANCIANO v. FAUSTINA CABALLES

    093 Phil 875

  • G.R. No. L-5438 September 29, 1953 - CEBU PORTLAND CEMENT COMPANY v. VICENTE VARELA

    093 Phil 878

  • G.R. No. L-5516 September 29, 1953 - FAUSTO COTIA v. POTENCIANO PECSON, ET AL.

    093 Phil 881

  • G.R. No. L-4130 September 30, 1953 - YSABEL B.DE PADILLA v. CONCEPCION PATERNO

    093 Phil 884

  • G.R. Nos. L-4792-95 September 30, 1953 - ERLANGER & GALINGER, INC. v. AMPARO EXCONDE

    093 Phil 894