Litimco v La Mallorca

Facts:
Tomas Litimco filed a petition before the Public Service Commission (PSC) praying for authority to operate a TPU service on the line Manila-Malolos via Sta. Isabel with the use of 10 units. Several operators filed written oppositions.

Before PSC could render its decision, La Mallorca, another operator, moved to reopen the case stating that if the petition to operate the line proposed be granted it would work to its prejudice and so it requested a reopening in order that it may file its opposition. The motion was granted.

However, instead of presenting evidence in support of its opposition, La Mallorca moved for postponement, only to announce days later that instead of merely objecting to the petition, it decided to file an application under a separate number (Case No. 63120) requesting for authority to operate the same line applied for by petitioner by rerouting 4 of its 10 round trip units of the line Malolos-Manila via Guiguinto.

The PSC rendered decision denying petitioner’s application but granting that of respondent on the ground that the latter has a better right to render the service applied for.

Petitioner contends that the Public Service Commission erred because:
1. his application was filed much ahead than that of respondent and as such it is entitled to preference
2. in awarding the line to respondent it in effect gave recognition to the unfair attitude of respondent
3. to grant the service in favor of respondent will work to the prejudice of the riding public for it would be allowing respondent to abandon a portion of its service on its original line Manila-Malolos via Guiguinto, a service which was previously found to promote the need and convenience of the people in said territory.

Respondent reasoned out that its:
1. application for rerouting will not involve any increase of trips or units nor will involve the purchase of new trucks, while that of petitioner would call for the use of 10 new trucks, which means a further depletion of the already depleted dollar reserve of our government
2. application for re-routing will not involve the acquisition of an operating right over the national highway from Malolos railroad crossing up to Guiguinto, while, on the other hand, petitioner’s application will involve the acquisition of a new operating right

Issue:
Who has a better right to render the service?

Held:
Litimco. Since it is admitted that he is financially competent and able to operate the line proposed and is also an operator of a bus line from Manila to Malolos via Bulacan, we see no plausible reason why he should not be given preference to operate the service applied for considering that he is the first one to apply for such line.

This is in accord with the policy to stave off any act of discrimination or partiality against any application for operation of a new line. While there may be cases where an applicant, even if ahead in time, was not given the service, it is because it was proven that he was financially incompetent, or otherwise disqualified, to render the service, If an applicant is qualified financially, and is able to undertake the service, he should be given the preference as a matter of fairness and justice.

Priority in the filing of the application for a certificate of public convenience is, other conditions being equal, an important factor in determining the right of the public service companies.

The argument that the application of petitioner for the operation of the new line calls for the purchase of 10 new trucks is of no consequence, if the operation will redound to the benefit of the riding public. The operation of a new line as a general proposition always involves a new investment which may happen even with old operators. In the course of operation, and with the passing of time, new equipment and facilities may be found necessary to maintain an efficient service, which additional expenditure cannot certainly be considered as a cause for disruption of the service. This is a matter of finance which concerns exclusively the one who desires to operate the new line.

At any rate, the new line merely covers 7 kilometers of new territory which traverses three sparsely populated barrios, and considering that respondent did not deem it necessary to cover said territory except after the passing of many years, and only thought of giving the service when petitioner filed his application, fairness requires that preference be given to petitioner.