TRANSPORTATION AND PUBLIC UTILITIES 4th Assignment A. Topic : B. Cases: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

17. 18. 19. 20. 21. 22. 23. 24. 25. Public Service Act, as amended

Batangas Transportation Co. vs Orlanes 52 Phil 455 Albano vs Reyes 175 SCRA 264 Chamber of Filipino Retailers, Inc. vs Villegas 44 SCRA 406 Philippine Rabbit Bus Lines, Inc. vs Gabatin 24 SCRA 411 Republic vs PLDT Co. 26 SCRA 620 Mandbusco vs Francisco 32 SCRA 405 Yangco vs Esteban 58 Phil 346 Vda. de Cruz vs Marcelo 4 SCRA 694 de los Santos vs Pasay Trans. Co. 54 Phil 357 Rizal Light and Ice Co., Inc. vs Municipality 25 SCRA 286 of Morong, Rizal Halili vs Ice and Cold Storage Industries, Inc. 77 Phil 823 Manila Yellow Taxicab vs PSC L-2875, Oct. 31, 1951 Intestate Testate of Teofilo M. Tiongson vs PSC 36 SCRA 241 Villa Rey Transit, Inc. vs Pangasinan Trans. Co. 5 SCRA 234 Escoto vs Vda. de Granada 40 SCRA 444 Danan vs Aspillera 6 SCRA 610 Meralco vs CA 157 SCRA 243 Cogeo-Cubao Operators and Drivers 207 SCRA 346 Association vs CA Montoya vs Ignacio L-5868, Dec. 29, 1953 Vargas vs Langcay 6 SCRA 174 Benedicto vs IAC 187 SCRA 547 Lisa Enterprises, Inc. vs IAC 129 SCRA 79 Teja Marketing vs IAC 148 SCRA 347 Santos vs Sibug 104 SCRA 520 Gelisan vs Alday 154 SCRA 388

C. References: 1. Public Service Act, as amended 2. Transportation Laws and Public Service Act by Hernando B. Perez

G.R. No. L-23688 April 30, 1970 MANDBUSCO, INC., MANDALUYONG BUS CO., INC., PRESCILO CAMAGANACAN, BLAS REYES and ANASTACIO ESMAO, petitioners, vs. PABLO FRANSCISCO, respondent. Clemente and Clemente for petitioners. Baldomero S. Luque for respondent.

CASTRO, J.: The respondent Pablo Francisco applied for a certificate of public convenience covering the operation of five (5) PUJ jitneys from barrio Pinagbuhatan, Pasig, Rizal to the intersection of Highway 54 and Shaw Boulevard, Mandaluyong, Rizal (otherwise known as the "Crossing") and vice-versa. Hearing was conducted, after due notice and publication, enabling both the respondent applicant and the oppositors Mandbusco, Inc., et al., to adduce their respective evidence. On June 15, 1964 a decision was rendered by the Public Service Commission granting the respondent's application, it appearing to a division of three commissioners that: After [a] careful study of the evidence presented by the parties, the Commission finds that the proposed service will benefit the people of Bo. Pinagbuhatan considering that there is no direct service from that place to the crossing of Highway 54 and Shaw Blvd. It can be noted also that the provincial capitol, provincial hospital and other big establishments are located past the Poblacion of Pasig and nearer to the other proposed terminal at Highway 54 and Shaw Blvd. and that residents from Pinagbuhatan have to take 2 rides to reach these places. The dispositive portion of the decision reads: Finding further from the evidence adduced by the applicant that he is [a] Filipino citizen, legally and financially capable [of operating and maintaining] the same, the oppositions filed in this case are hereby overruled and the certificate of public convenience applied for, may be, as it is hereby GRANTED to the applicant .... It is mainly at the findings above-quoted that the petitioners, all bus operators, have aimed their present petition for review, following the rejection of their motion for reconsideration by the Commission en banc. The petitioners want to make capital of the declarations of their two witnesses, Federico Dantayana and Arturo Clemente. Let us appraise these declarations. Dantayana, an official inspector of the Commission, testified that he posted himself somewhere along the route covered by the respondent's application, and conducted a survey of the number of passenger vehicles availing themselves of the use of the Shaw Boulevard in going to and coming from Pasig, Rizal. The inspection sheets offered in evidence show that buses with a usual loading capacity of from 65 to 75 passengers each were barely half-filled on the whole, while "jitneys" with a usual loading capacity of 13 passengers each actually carried an average of only 6 passengers each for every trip. These facts, the petitioners argue, illustrate an excess of available passenger vehicles over the actual needs of the riding public. They negate the advisability of allowing the applicant's "jitneys" to serve the route between barrio Pinagbuhatan and the crossing of Highway 54 and Shaw Boulevard in Mandaluyong. Closely scrutinizing Dantayana's testimony, we cannot acquiesce in the petitioners' conclusions. The length of the route which the respondent applied for is divided into two parts. The first starts at barrio Pinagbuhatan and ends at the poblacion of the town of Pasig. The second begins at the poblacion and winds up at the crossing of Highway 54 and Shaw Boulevard in Mandaluyong. Dantayana's survey covered passenger vehicles passing through the second part of the route applied for. It appears, however, that the second part is actually only a converging point for passenger vehicles coming from towns east of Pasig, not to mention other passenger vehicles, equally numerous, destined for Manila coming from their terminals located in the Pasig poblacion itself. In short, Dantayana's survey does not at all indicate the volume of the traffic of passenger vehicles corning all the way from barrio Pinagbuhatan. After all, the primary objective of the grant of the certificate of public convenience in question was the welfare of the inhabitants of barrio Pinagbuhatan and other inhabitants along the first part of the route applied for. The petitioners' only other witness, Arturo Clemente, the president of both the Mandbusco, Inc. and of the Pasig-Manila Bus Operators Association, testified that a total of 125 buses are operating between Pasig, Rizal and Quiapo, Manila, all taking the Shaw Boulevard, which thoroughfare is part of the route applied for by the respondent. Likewise, a total of 51 "jitneys" serve that same portion of Shaw Boulevard to and from the various points in Pasig. In addition, a total of 171 buses coming from towns east of Pasig pass daily through the latter town, proceed to Shaw Boulevard, and then to Manila. All these public conveyances, the witness pointed out, are more than adequate to meet the transportation needs of the riding public in the areas served. The petitioners, the witness added, have made substantial investments in their business and, therefore, the allowance of

additional public transportation vehicles, clearly unneeded, would result in ruinous competition and threaten the stability of their financial positions. This argument suffers, however, from the same basic oversight afflicting the testimony of Dantayana. All the vehicles mentioned by Clemente, except possibly for two buses a matter which we will shortly discuss do not run the full course of the route applied for by the respondent. The overlapping of service exists only with regard to the second part of that route, and this is clearly unavoidable since the stretch of road from the Pasig poblacion to the crossing serves as a common access to Highway 54 whence passengers embark for separate destinations. In the course of the hearing the petitioners presented a certificate of public convenience allowing the Mandaluyong Bus Co., Inc. to utilize two of their buses, and a third as reserve, for the line from Pinagbuhatan (Pasig, Rizal) to Plaza Miranda (Quiapo, Manila) via Mandaluyong, Rizal. This, according to petitioners, should completely negate the finding of the Commission that there exists no direct service from barrio Pinagbuhatan to the crossing of Highway 54 and Shaw Boulevard. We disagree. The certificate of public convenience adverted to merely proves that authority has been given to the grantee to operate public utility vehicles in the designated territory. It cannot serve as proof that the grantee has made actual use of such authority. Lacking any positive proof that the petitioners (or any of them) adequately serve the transportation requirements of the inhabitants of barrio Pinagbuhatan and the adjacent places, we are not inclined to overturn the finding of fact of the Commission, realizing as we do, after the reading of the record, that the same is reasonably supported by evidence.1 The petitioners invoke the "old operator rule," which is to the effect that a public utility operator should be shielded from ruinous competition by affording him the opportunity to improve his equipment and service before allowing a new operator to serve in the same territory he covers. 2 This rule has no application in this case because the certificate of public convenience granted to the respondent is a maiden franchise covering the particular line connecting barrio Pinagbuhatan and the crossing of Highway 54 and Shaw Boulevard. The certificate of public convenience authorizing the Mandaluyong Bus Co., Inc. to operate two buses, with one reserve, on the line extending from barrio Pinagbuhatan to Plaza Miranda in Quiapo, Manila, while in a sense overlapping with the authority given to the respondent, was essentially intended to cover the great distance run between barrio Pinagbuhatan and Quiapo, Manila, via Pasig Boulevard, P. Sanchez, V. Mapa, Valenzuela, Old Sta. Mesa, Sta. Mesa Boulevard, Legarda, Tanduay, P. Casal, Ayala Bridge, Concepcion, Arroceros, Quezon Bridge and Quezon Boulevard. Upon the other hand, the grant in favor of the respondent covers only a brief shuttle run of 8 kilometers linking barrio Pinagbuhatan directly with the Pasig poblacion and the crossing of Highway 54 and Shaw Boulevard. The Commission favored the respondent with the certificate of public convenience in question; we are not prepared to substitute our discretion with that of the Public Service Commission in the determination of what can best meet the requirements of public convenience. The ability of the respondent to finance the maintenance and operation of the service he applied for is likewise questioned by the petitioners. This issue is now academic for the reason that the respondent has, since his receipt of the franchise, actually registered the five units covered by the authority. He has, moreover, registered one reserve unit for the same line, with the approval of the Commission. These units, plus the assets he proved he owns, are sufficient guaranty that the respondent can sustain the service he applied for.3 The petitioners, in their brief, invoke the Public Service Commission Memorandum of May 15, 1963 and its Supplemental Memorandum of July 22, 1963, with a view to establishing that the certificate of public convenience in favor of respondent was issued in violation of these memoranda. The first memorandum comes as a suggestion to all Commissioners that action on all pending applications, for certificates of public convenience for the operation of passenger service in Manila, Quezon City, Pasay City, Caloocan, Mandaluyong, Paraaque, San Juan and Makati, be suspended until further studies could be made. The supplemental memorandum contains an order addressed to the Secretary of the Commission enjoining him from calendaring for hearing or for continuation of hearing any application for passenger service in Manila and suburbs; and any decision purporting to have been rendered prior to May 15, 1963 but had not been turned over to the Secretary and recorded prior to the date of the order, should be withheld until further orders. It is not difficult to see that the territory applied for is not among the one enumerated in the Memorandum of May 15, 1963. The respondent's service stretches mainly across the town of Pasig in Rizal, and if it abuts into a tiny fraction of Mandaluyong, one of the areas covered by the enumeration, the incursion is incidental and does not necessarily render Mandaluyong the mainstream of the respondent's service. Moreover, even if the memorandum in question comprehend the present application, still public welfare and convenience, where positively found by the Commission to be subserved, should prevail.4

ACCORDINGLY, the decision appealed from is hereby affirmed. No pronouncement as to costs. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, and Villamor, JJ., concur. Teehankee, J., concurs in the result. Barredo, J., took no part. G.R. No. L-22306 March 18, 1967

FELICITAS C. TAN, EUGENIO GALVEZ, EMIGDIO MERCADO, CEBU YELLOW TAXI (MANILA YELLOW TAXICAB CO., INC. & CEBU CHECKERED CAB CO., INC.), petitioners, vs. PUBLIC SERVICE COMMISSION and ANTONIO DE PIO, respondents. V. L. Legaspi Antonio Y. de Pio for respondents. CONCEPCION, C.J.: This is an appeal by Felicitas Tan, Eugenio Galvez, Emigdio Mercado and Cebu Yellow Taxi (Manila Yellow Taxicab Co., Inc. and Cebu Checkered Cab Co., Inc.) from a decision of the Public Service Commission granting Antonio de Pio a Certificate of Public Convenience to operate fifteen (15) units of taxicabs within the City of Cebu. Appellants maintain that said decision should be reversed because: (a) Mrs. Tan has been denied due process; and (b) said decision was rendered without evidence to reasonably support its finding that there is public necessity for the operation of said fifteen (15) units. With respect to the first question, the record shows that, on or about May 27, 1963, De Pio filed with the PSC, in Manila an application for authority to operate twenty-five (25) units of taxicabs in the Island of Cebu. Soon thereafter, or on July 31, 1963, the PSC issued a notice setting said application for hearing on October 1, 1962, and requiring all affected operators to file their oppositions thereto, if any, on or before the latter date. Eugenio Galvez, Emigdio Mercado and the Cebu Yellow Taxi (Manila Yellow Taxicab Co., Inc. and Cebu Checkered Cab Co., Inc.) filed their respective oppositions in due time. The opposition of Mrs. Tan was sent by registered mail in Cebu to the PSC in Manila, on September 30, 1963. Before it reached its destination, or on October 4, 1963, the PSC had issued an order commissioning the Municipal Judge of Cebu City to receive such evidence as the parties may wish to present. Inasmuch as Mrs. Tan's opposition had not, as yet, been received in the office of the PSC in Manila, she was not notified of this order, which, seemingly, did not mention her among the oppositors to De Pio's application. Hence, neither did the Commissioner cause to be served upon Mrs. Tan official notice of the first hearing scheduled to be held in Cebu City on November 4, 1963, although De Pio's counsel stated, under oath, that he had personally notified her counsel of said hearing. Further hearings were held on November 7, 15 and 18, 1963, of which Mrs. Tan was not, for the same reason, notified officially. In the course of these hearings De Pio introduced documentary and testimonial evidence, whereas appellees Galvez, Mercado and Cebu Yellow Taxi (Manila Yellow Taxicab Co., Inc., Cebu Checkered Cab Co., Inc.) presented their own witnesses. As a consequence, the only issue raised before and resolved by the PSC was whether or not there is public necessity for the taxicab service applied for, which, on December 4, 1963, the PSC decided in the affirmative. Thereupon, or on January 8, 1964, Mrs. Tan filed her petition for review with this Court. It should be noted that Mrs. Tan has not asked the PSC for, either a reconsideration of its aforementioned decision, or a new trial to present her evidence. Neither has she stated in her petition for review before us, what evidence if any, she would introduce, should a new trial be held. The record before us is thus absolutely devoid of any indicia that would justify a reasonable belief expectation or even the hope, that the outcome of the case would be otherwise, if a new trial were held. There being no showing, that Mrs. Tan has suffered any substantial injury, she has no cause for complaint in this appeal.1Needless to say, the other oppositors can not even claim a denial of due process. and A. V. Muntuertes for petitioners.

As regards the second issue the decision appealed from has the following to say: 1wph1.t Although the applicant had only two witnesses and the oppositors, six, nevertheless the Commission finds that the weight of evidence preponderates in favor of the applicant's stand. For the criteria or yardstick used by the Commission in weighing the oral testimony is not the quantity of witnesses produced but by the quality of the statements adduced. It should be noted that four of the six witnesses of oppositors were drivers or employees of said oppositors. Consequently, we find their testimony without such evidentiary value because the same is not completely free from bias. Likewise we cannot give much weight to the testimony of the two other witnesses of the oppositors that it is not hard to get a taxicab in the City of Cebu. That statement is more of a conjecture than a product of their own actual experience. For both of them testified that in going from one point to another in the City of Cebu they invariably take a jeepney or a rig and only rarely do they ride in a taxicab . They were not even sure that the vacant taxicabs they claimed to have seen running around were looking for passengers or actually answering phone calls of prospective passengers, nor were they certain that the vacant taxicabs they have seen parked were waiting for passengers or merely parked because of engine trouble or their drivers merely taking a brief rest. At this point, we wish to emphasize the fact that the oppositors'witnesses themselves testified to the existence of "Colorum" cars illegally competing with authorized taxicabs for passengers. This, in itself is a tangible indication of an existing demand for means of transportation other than jeepneys or rigs. Moreover, these same witnesses testified that there are eight or nine taxicab operators actually operating in Cebu City although the records of the Commission show that there are eleven authorized to operate a combined total of 273 units. Of these, however, about ten to twenty per cent are not in actual operation. Lastly, our records show that the last application for additional taxicab units in Cebu City was granted way back in November of 1960 or more than three years ago. Certainly, within that period of time Cebu must have expanded in population and business activity. Premises considered, we find that there is an existing public necessity for the service herein applied for. Considering that applicant has assets worth about P360,000.00 plus a yearly income of about P15,500.00 and P45,000.00 ready cash available for immediate investment; that he has a repair shop ready for use; that he has had experience as a common carrier operator; that the Delta Motors Corporation, distributor of Toyopet cars in the Philippines, has already agreed to supply him with the necessary units; that he already has the necessary personnel to implement the service applied for, the Commission believes that public convenience would best be promoted if we grant to the applicant herein fifteen (15) units only instead of the twenty-five (25) herein applied for. The testimonial and documentary evidence introduced in this case substantially bear out the foregoing findings. Mrs. Tan impugns the veracity of the testimonial evidence for appellee De Pio; but, in a petition for review, like the one at bar, this Court will not disturb the findings of the PSC on the credibility of witness, so long as their version is not inherently improbable, which is not the one before us. Wherefore, the decision appealed from should be as it is hereby affirmed, with costs against the appellants herein. It is so ordered. Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ., concur. G.R. No. 100727 March 18, 1992 COGEO-CUBAO OPERATORS AND DRIVERS ASSOCIATION, petitioner, vs. THE COURT OF APPEALS, LUNGSOD SILANGAN TRANSPORT SERVICES, CORP., INC., respondents.

MEDIALDEA, J.: This is a petition for review on certiorari of the decision of the Court of Appeals which affirmed with modification the decision of the Regional Trial Court awarding damages in favor of respondent Lungsod Silangan Transport Services Corp., Inc. (Lungsod Corp. for brevity).

The antecedents facts of this case are as follows: It appears that a certificate of public convenience to operate a jeepney service was ordered to be issued in favor of Lungsod Silangan to ply the Cogeo-Cubao route sometime in 1983 on the justification that public necessity and convenience will best be served, and in the absence of existing authorized operators on the lined apply for . . . On the other hand, defendantAssociation was registered as a non-stock, non-profit organization with the Securities and Exchange Commission on October 30, 1985 . . . with the main purpose of representing plaintiffappellee for whatever contract and/or agreement it will have regarding the ownership of units, and the like, of the members of the Association . . . Perturbed by plaintiffs' Board Resolution No. 9 . . . adopting a Bandera' System under which a member of the cooperative is permitted to queue for passenger at the disputed pathway in exchange for the ticket worth twenty pesos, the proceeds of which shall be utilized for Christmas programs of the drivers and other benefits, and on the strength of defendants' registration as a collective body with the Securities and Exchange Commission, defendants-appellants, led by Romeo Oliva decided to form a human barricade on November 11, 1985 and assumed the dispatching of passenger jeepneys . . . This development as initiated by defendants-appellants gave rise to the suit for damages. Defendant-Association's Answer contained vehement denials to the insinuation of take over and at the same time raised as a defense the circumstance that the organization was formed not to compete with plaintiff-cooperative. It, however, admitted that it is not authorized to transport passengers . . . (pp. 15-16, Rollo) On July 31, 1989, the trial court rendered a decision in favor of respondent Lungsod Corp., the dispositive portion of which states: WHEREFORE FROM THE FOREGOING CONSIDERATION, the Court hereby renders judgment in favor of the plaintiff and against the defendants as follows: 1. Ordering defendants to pay plaintiff the amount of P50,000.00 as actual damages; 2. Ordering the defendants to pay the plaintiffs the amount of P10,000.00 as attorney's fees. SO ORDERED. (P. 39, Rollo) Not satisfied with the decision, petitioner Association appealed with the Court of Appeals. On May 27, 1991, respondent appellate court rendered its decision affirming the findings of the trial court except with regard to the award of actual damages in the amount of P50,000.00 and attorney's fees in the amount of P10,000.00. The Court of Appeals however, awarded nominal damages to petitioner in the amount of P10,000.00. Hence, this petition was filed with the petitioner assigning the following errors of the appellate court: I. THE RESPONDENT COURT ERRED IN MERELY MODIFYING THE JUDGMENT OF THE TRIAL COURT. II. THE RESPONDENT COURT ERRED IN HOLDING THAT THE PETITIONER USURPED THE PROPERTY RIGHT OF THE PRIVATE RESPONDENT. III. AND THE RESPONDENT COURT ERRED IN DENYING THE MOTION FOR RECONSIDERATION. Since the assigned errors are interrelated, this Court shall discuss them jointly. The main issue raised by the petitioner is whether or not the petitioner usurped the property right of the respondent which shall entitle the latter to the award of nominal damages. Petitioner contends that the association was formed not to complete with the respondent corporation in the latter's operation as a common carrier; that the same was organized for the common protection of drivers from abusive traffic officers who extort money from them, and for the elimination of the practice of respondent

corporation of requiring jeepney owners to execute deed of sale in favor of the corporation to show that the latter is the owner of the jeeps under its certificate of public convenience. Petitioner also argues that in organizing the association, the members thereof are merely exercising their freedom or right to redress their grievances. We find the petition devoid of merit. Under the Public Service Law, a certificate of public convenience is an authorization issued by the Public Service Commission for the operation of public services for which no franchise is required by law. In the instant case, a certificate of public convenience was issued to respondent corporation on January 24, 1983 to operate a public utility jeepney service on the Cogeo-Cubao route. As found by the trial court, the certificate was issued pursuant to a decision passed by the Board of Transportation in BOT Case No. 82-565. A certification of public convenience is included in the term "property" in the broad sense of the term. Under the Public Service Law, a certificate of public convenience can be sold by the holder thereof because it has considerable material value and is considered as valuable asset (Raymundo v. Luneta Motor Co., et al., 58 Phil. 889). Although there is no doubt that it is private property, it is affected with a public interest and must be submitted to the control of the government for the common good (Pangasinan Transportation Co. v. PSC, 70 Phil 221). Hence, insofar as the interest of the State is involved, a certificate of public convenience does not confer upon the holder any proprietary right or interest or franchise in the route covered thereby and in the public highways (Lugue v. Villegas, L-22545, Nov . 28, 1969, 30 SCRA 409). However, with respect to other persons and other public utilities, a certificate of public convenience as property, which represents the right and authority to operate its facilities for public service, cannot be taken or interfered with without due process of law. Appropriate actions may be maintained in courts by the holder of the certificate against those who have not been authorized to operate in competition with the former and those who invade the rights which the former has pursuant to the authority granted by the Public Service Commission (A.L. Ammen Transportation Co. v. Golingco. 43 Phil. 280). In the case at bar, the trial court found that petitioner association forcibly took over the operation of the jeepney service in the Cogeo-Cubao route without any authorization from the Public Service Commission and in violation of the right of respondent corporation to operate its services in the said route under its certificate of public convenience. These were its findings which were affirmed by the appellate court: The Court from the testimony of plaintiff's witnesses as well as the documentary evidences presented is convinced that the actions taken by defendant herein though it admit that it did not have the authority to transport passenger did in fact assume the role as a common carrier engaged in the transport of passengers within that span of ten days beginning November 11, 1985 when it unilaterally took upon itself the operation and dispatching of jeepneys at St. Mary's St. The president of the defendant corporation. Romeo Oliva himself in his testimony confirmed that there was indeed a takeover of the operations at St. Mary's St. . . . (p. 36, Rollo) The findings of the trial court especially if affirmed by the appellate court bear great weight and will not be disturbed on appeal before this Court. Although there is no question that petitioner can exercise their constitutional right to redress their grievances with respondent Lungsod Corp., the manner by which this constitutional right is to be, exercised should not undermine public peace and order nor should it violate the legal rights of other persons. Article 21 of the Civil Code provides that any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. The provision covers a situation where a person has a legal right which was violated by another in a manner contrary to morals, good customs or public policy. It presupposes loss or injury, material or otherwise, which one may suffer as a result of such violation. It is clear form the facts of this case that petitioner formed a barricade and forcibly took over the motor units and personnel of the respondent corporation. This paralyzed the usual activities and earnings of the latter during the period of ten days and violated the right of respondent Lungsod Corp. To conduct its operations thru its authorized officers. As to the propriety of damages in favor of respondent Lungsod Corp., the respondent appellate court stated: . . . it does not necessarily follow that plaintiff-appellee is entitled to actual damages and attorney's fees. While there may have been allegations from plaintiff-cooperative showing that it did in fact suffer some from of injury . . . it is legally unprecise to order the payment of P50,000.00 as actual damages for lack of concrete proof therefor. There is, however, no denying

of the act of usurpation by defendants-appellants which constituted an invasion of plaintiffs'appellees' property right. For this, nominal damages in the amount of P10,000.00 may be granted. (Article 2221, Civil Code). (p. 18,Rollo) No compelling reason exists to justify the reversal of the ruling of the respondent appellate court in the case at bar. Article 2222 of the Civil Code states that the court may award nominal damages in every obligation arising from any source enumerated in Article 1157, or in every case where any property right has been invaded. Considering the circumstances of the case, the respondent corporation is entitled to the award of nominal damages. ACCORDINGLY, the petition is DENIED and the assailed decision of the respondent appellate court dated May 27, 1991 is AFFIRMED. SO ORDERED.

G.R. No. L-26815 May 26, 19810 ADOLFO L. vs. ABRAHAM SIBUG and COURT OF APPEALS, respondents. SANTOS, petitioner,

MELENCIO-HERRERA, J.:1wph1.t The controversy in this case will be resolved on the basis of the following facts and expositions. Prior to April 26, 1963 (the ACCIDENT DATE), Vicente U. Vidad (VIDAD, for short) was a duly authorized passenger jeepney operator. Also prior to the ACCIDENT DATE, petitioner Adolfo L. Santos (SANTOS, for short) was the owner of a passenger jeep, but he had no certificate of public convenience for the operation of the vehicle as a public passenger jeep. SANTOS then transferred his jeep to the name of VIDAD so that it could be operated under the latter's certificate of public convenience. ln other words, SANTOS became what is known in ordinary parlance as akabit operator. For the protection of SANTOS, VIDAD executed a re-transfer document to the former, which was to be a private document presumably to be registered if and where it was decided that the passenger jeep of SANTOS was to be withdrawn from the kabit arrangement. On the ACCIDENT DATE, private respondent Abraham Sibug (SIBUG for short) was bumped by a passenger jeepney operated by VIDAD and driven by Severe Gragas. As a result thereof, SIBUG filed a complaint for damages against VIDAD and Gragas with the Court of First Instance of Manila, Branch XVII, then presided by Hon. Arsenic Solidum. That Civil Case will hereinafter be referred to as the BRANCH XVII CASE. On December 5, 1963, a judgment was rendered by Branch XVII, sentencing VIDAD and Gragas, jointly and severally, to pay SIBUG the sums of P506.20 as actual damages; P3,000.00 as moral damages; P500.00 as attorney's fees, and costs. 1 On April 10, 1964, the Sheriff of Manila levied on a motor vehicle, with Plate No. PUJ-343-64, registered in the name of VIDAD, and scheduled the public auction sale thereof on May 8,1964. On April 11, 1964, SANTOS presented a third-party claim with the Sheriff alleging actual ownership of the motor vehicle levied upon, and stating that registration thereof in the name of VIDAD was merely to enable SANTOS to make use of VIDAD'S Certificate of Public Convenience. After the third-party complaint was filed, SIBUG submitted to the Sheriff a bond issued by the Philippine Surety Insurance Company (THE BONDING COMPANY, for short), To save the Sheriff from liability if he were to proceed with the sale and if SANTOS' third-party claim should be ultimately upheld. On April 22, 1964, that is, before the scheduled sale of May 8, 1964, SANTOS instituted an action for Damages and injunction with a prayer for Preliminary Mandatory Injunction against SIBUG; VIDAD; and the Sheriff in Civil Case No. 56842 of Branch X, of the same Court of First Instance of Manila (hereinafter referred to as the

BRANCH X CASE). The complaint was later amended to include the BONDING COMPANY as a party defendant although its bond had not become effective. ln the Complaint, SANTOS alleged essentially that he was the actual owner of the motor vehicle subject of levy: that a fictitious Deed of Sale of said motor vehicle was executed by him in VIDAD'S favor for purposes of operating said vehicle as a passenger jeepney under the latter's franchise; that SANTOS did not receive any payment from VIDAD in consideration of said sale; that to protect SANTOS' proprietary interest over the vehicle in question, VIDAD in turn had executed a Deed of Sale in favor of SANTOS on June 27, 1962; that SANTOS was not a party in the BRANCH XVII CASE and was not in any manner liable to the registered owner VIDAD and the driver Gragas; that SANTOS derived a daily income of P30.00 from the operation of said motor vehicle as a passenger jeepney and stood to suffer irreparable damage will possession of said motor vehicle were not restored to him. SANTOS then prayed that 1,) pending trial, a Writ of Preliminary Mandatory injunction be issued ex-parte commanding the Sheriff of Manila to restore the motor vehicle to him and that the Sheriff be enjoined from proceeding with its sale; 2) that, after trial, the Deed of Sale in favor of VIDAD be declared absolutely fictitious and, therefore, null and void, and adjudging SANTOS to be the absolute owner of the vehicle in questioned and 3) that damages be awarded to SANTOS as proven during the trial plus attorney's fees in the amount of P450.00 and costs. 2 No public sale was conducted on May 8, 1964. On May 11, 1964, Branch X issued a Restraining Order enjoining the Sheriff from conducting the public auction sale of the motor vehicle levied upon. 3 The Restraining Order was issued wrongfully. Under the provisions of Section 17, Rule 39, the action taken by the Sheriff cannot be restrained by another Court or by another Branch of the same Court. The Sheriff has the right to continue with the public sale on his own responsibility, or he can desist from conducting the public sale unless the attaching creditor files a bond securing him against the third-party-claim. But the decision to proceed or not with the public sale lies with him. As said in Uy Piaoco vs. Osmea 9 Phil. 299, 307, "the powers of the Sheriff involve both discretional power and personal liability." The mentioned discretional power and personal liability have been further elucidated in Planes and Verdon vs. Madrigal & Co., et al., 94 Phil. 754, where it was held. 1wph1.t The duty of the sheriff in connection with the execution and satisfaction of judgment of the court is governed by Rule 39 of the Rules of Court. Section 15 thereof provides for the procedure to be. followed where the property levied on execution 'is claimed by a by person. lf the third-party claim is sufficient, the sheriff, upon receiving it, is not bound to proceed with the levy of the property, unless he is given by the judgment creditor an indemnity bond against the claim (Mangaoang vs. Provincial Sheriff, 91 Phil., 368). Of course, the sheriff may proceed with the levy even without the Indemnity bond, but in such case he will answer for any damages with his own personal funds (Waits vs. Peterson, et al., S Phil. 419 Alzua et al. vs. Johnson, 21 Phil., 308; Consults No. 341 de los abogados de Smith, Bell & Co., 48 Phil., 565). And the rule also provides that nothing therein contained shall prevent a third person from vindicating his claim to the property by any proper action (Sec. 15 of Rule 39.). It appears from the above that if the attaching creditor should furnish an adequate bond. the Sheriff has to proceed with the public auction. When such bond is not filed, then the Sheriff shall decide whether to proceed. or to desist from proceeding, with the public auction. lf he decides to proceed, he will incur personal liability in favor of the successful third-party claimant. On October 14, 1965, Branch X affirmed SANTOS' ownership of the jeepney in question based on the evidence adduced, and decreed: 1wph1.t WHEREFORE, judgment is hereby rendered, enjoining the defendants from proceeding with the sale of the vehicle in question ordering its return to the plaintiff and furthermore sentencing the defendant Abraham Sibug to pay the plaintiff the sum of P15.00 a day from April 10, 1964 until the vehicle is returned to him, and P500.00 as attorney's fee's as well as the costs. 4 This was subsequently amended on December 5, 1965, upon motion for reconsideration filed by SANTOS, to include the BONDING COMPANY as jointly slid severally liable with SIBUG. 51wph1.t ... provided that the liability of the Philippine Surety & insurance Co., Inc. shall in no case exceed P6,500.00. Abraham Sibug is furthermore condemned to pay the Philippine Surety & Insurance Co., Inc. the same sums it is ordered to pay under this decision.

The jugdment in the BRANCH X CASE appears to be quite legally unpalatable For instance, since the undertaking furnished to the Sheriff by the BONDING COMPANY did not become effective for the reason that the jeep was not sold, the public sale thereof having been restrained, there was no reason for promulgating judgment against the BONDING COMPANY. lt has also been noted that the Complaint against VIDAD was dismissed. Most important of all, the judgment against SIBUG was inequitable. ln asserting his rights of ownership to the vehicle in question, SANTOS candidly admitted his participation in the illegal and pernicious practice in the transportation business known as the kabit system. Sec.. 20 (g) of the Public Service Act, then the applicable law, specifically provided: 1wph1.t ... it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the approval and authorization of the Commission previously had ... (g) to sell, alienate, mortgage, encumber or lease its property, franchise, certificates, privileges, or rights, or any part thereof. In this case, SANTOS had fictitiously sold the jeepney to VIDAD, who had become the registered owner and operator of record at the time of the accident. lt is true that VIDAD had executed a re-sale to SANTOS, but the document was not registered. Although SANTOS, as the kabit was the true owner as against VIDAD, the latter, as the registered owner/operator and grantee of the franchise, is directly and primarily responsible and liable for the damages caused to SIBUG, the injured party, as a consequence of the negligent or careless operation of the vehicle. 6 This ruling is based on the principle that the operator of record is considered the operator of the vehicle in contemplation of law as regards the public and third persons 7 even if the vehicle involved in the accident had been sold to another where such sale had not been approved by the then Public Service Commission. 8 For the same basic reason, as the vehicle here in question was registered in VIDAD'S name, the levy on execution against said vehicle should be enforced so that the judgment in the BRANCH XVII CASE may be satisfied, notwithstanding the fact that the secret ownership of the vehicle belonged to another. SANTOS, as the kabit should not be allowed to defeat the levy on his vehicle and to avoid his responsibilities as a kabit owner for he had led the public to believe that the vehicle belonged to VIDAD. This is one way of curbing the pernicious kabit system that facilitates the commission of fraud against the travelling public. As indicated in the Erezo case, supra, SANTOS' remedy. as the real owner of the vehicle, is to go against VIDAD, the actual operator who was responsible for the accident, for the recovery of whatever damages SANTOS may suffer by reason of the execution. In fact, if SANTOS, as the kabit had been impleaded as a party defendant in the BRANCH XVII CASE, he should be held jointly and severally liable with VIDAD and the driver for damages suffered by SIBUG, 9 as well as for exemplary damages. 10 From the judgment in the BRANCH X CASE SIBUG appealed. Meanwhile, SANTOS moved for immidiately execution. SIBUG opposed it on the ground that Branch X had no jurisdiction over the BRANCH XVII CASE, and that Branch X had no power to interfere by injunction with the judgment of Branch XVII a Court of concurrent or coordinate jurisdiction. 11 On November 13, 1965, Branch X released an order authorizing immediate execution on the theory that the BRANCH X CASE is "principally an action for the issuance of a writ of prohibition to forbid the Sheriff from selling at public auction property not belonging to the judgment creditor (sic) and there being no attempt in this case to interfere with the Judgment or decree of another court of concurrent jurisdiction." 12 Without waiting for the resolution of his Motion for Reconsideration, SIBUG sought relief from respondent Appellate Court in a Petition for certiorari with Preliminary injunction. On November 18, 1965, respondent Court of Appeals enjoined the enforcement of the Branch X Decision and the Order of execution issued by said Branch. 13 On September 28, 1966, respondent Count of Appeals rendered the herein challenged Decision nullifying the judgment renderred in the Branch X Case and permanently restraining V from taking cognizance of the BRANCH X CASE SANTOS. It ruled that: 1wph1.t ... the respondent Court Branch X, indeed, encroached and interfered with the judgment of Branch XVII when it issued a restraining order and finally a decision permanently enjoining the other court from excuting the decision rendered in Civil Case No. 54335. This to our mind constitutes an interference with the powers and authority of the other court having co-equal and coordinate jurisdiction. To rule otherwise, would indubitably lead to confusion which might hamper or hinder the proper administration of justice. ... 14

Respondent Court further held that SANTOS may not be permitted to prove his ownership over a particular vehicle being levied upon but registered in another's name in a separated action, observing that: 1wph1.t As the vehicle in question was registered in the name of Vicente U. Vidad, the government or any person affected by the representation that said vehicle is registered under the name of a particular person had the right to rely on his declaration of ownership and registration: and the registered owner or any other person for that matter cannot be permitted to repudiate said declaration with the objective of proving that said registered vehicle is owned by another person and not by the registered owner (sec. 68, (a), Rule 123, and art. 1431, New Civil Code) xxx xxx xxx Were we to allow a third person to prove that he is the real owner of a particular vehicle and not the registered owner it would in effect be tantamount to sanctioning the attempt of the registered owner of the particular vehicle in evading responsibility for it cannot be dispelled that the door would be opened to collusion between a person and a registered owner for the latter to escape said responsibility to the public or to any person. ... SANTOS now seeks a review of respondent Court's Decision contending that: 1wph1.t 1) The respondent Court of Appeals erred in holding that Branch X of the Court of First Instance of Manila has no jurisdiction to restrain by Writ of Injunction the auction sale of petitioner's motor vehicle to satisfy the judgment indebtedness of another person: 2) The respondent Court of Appeals erred in holding that petitioner as owner of a motor vehicle that was levied upon pursuant to a Writ of Execution issued by Branch XVII of the Court of i stance of Manila in Civil Case No. 54335 cannot be allowed to prove in a separate suit filed in Branch X of the same court (Civil Case No. 56842) that he is the true owner of the said motor vehicle and not its registered owner; 3) The respondent Court of Appeals erred in declaring null and void the decision of the Court of First Instance of Manila (Branch X ) in Civil Case No. 56482. We gave due course to the Petition for Review on certiorari on December 14, 1966 and considered the case submitted for decision on July 20, 1967. One of the issues ventilated for resolution is the general question of jurisdiction of a Court of First Instance to issue, at the instance of a third-party claimant, an Injunction restraining the execution sale of a passenger jeepney levied upon by a judgment creditor in another Court of First Instance. The corollary issue is whether or not the third-party claimant has a right to vindicate his claim to the vehicle levied upon through a separate action. Since this case was submitted for decision in July, 1967, this Court, in Arabay, lnc. vs. Hon. Serafin Salvador, 15speaking through Mr. Justice Ramon Aquino, succinctly held: 1wph1.t It is noteworthy that, generally, the rule, that no court has authority to interfere by injunction with the judgments or decrees of a concurrent or coordinate jurisdiction having equal power to grant the injunctive relief, is applied in cases, where no third-party claimant is involved, in order to prevent one court from nullifying the judgment or process of another court of the same rank or category, a power which devolves upon the proper appellate court. xxx xxx xxx When the sheriff, acting beyond the bounds of his authority, seizes a stranger's property, the writ of injunction, which is issued to stop the auction sale of that property, is not an interference with the writ of execution issued by another court because the writ of execution was improperly implemented by the sheriff. Under that writ, he could attach the property of the judgment debtor. He is not authorized to levy upon the property of the third-party claimant (Polaris Marketing

Corporation vs. Plan, L-40666, January 22, 1976, 69 SCRA 93, 97; Manila Herald Publishing Co., Inc. vs. Ramos, 88 Phil. 94, 102). An earlier case, Abiera vs. Hon. Court of Appeals, et al.,
16

explained the doctrine more extensively: 1wph1.t

Courts; Jurisdiction Courts without power to interfere by injunction with judgments or decrees of a court of concurrent jurisdiction. No court has power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction having equal power to grant the relief sought by injunction. Same, Same; Same; When applicable. For this doctrine to apply, the injunction issued by one court must interfere with the judgment or decree issued by another court of equal or coordinate jurisdiction and the relief sought by such injunction must be one which could be granted by the court which rendered the judgment or issued the decree. Same, Same Same; Exception Judgment rendered by another court in favor of a third person who claims property levied upon on execution. Under section 17 of Rule 39 a third person who claims property levied upon on execution may vindicate such claim by action. A judgment rendered in his favor - declaring him to be the owner of the property - would not constitute interference with the powers or processes of the court which rendered the judgment to enforce which the execution was levied. lf that be so - and it is so because the property, being that of a stranger, is not subject to levy - then an interlocutory order, such as injunction, upon a claim and prima facie showing of ownership by the claimant, cannot be considered as such interference either. Execution; Where property levied on claimed by third person; "Action" in section l7, Rule 39 of the Rules of Court, interpreted The right of a person who claims to be the owner of property levied upon on execution to file a third-party claim with the sheriff is not exclusive, and he may file an action to vindicate his claim even if the judgment creditor files an indemnity bond in favor of the sheriff to answer for any damages that may be suffered by the third party claimant. By "action", as stated in the Rule, what is meant is a separate and independent action. Applied to the case at bar, it mill have to be held that, contrary to the rationale in the Decision of respondent Court, it was appropriate, as a matter of procedure, for SANTOS, as an ordinary third-party claimant, to vindicate his claim of ownership in a separate action under Section 17 of Rule 39. And the judgment rendered in his favor by Branch X, declaring him to be the owner of the property, did not as a basic proposition, constitute interference with the powers or processes of Branch XVII which rendered the judgment, to enforce which the was levied upon. And this is so because property belonging to a stranger is not ordinarily subject to levy. While it is true that the vehicle in question was in custodia legis, and should not be interfered with without the permission of the proper Court, the property must be one in which the defendant has proprietary interest. Where the Sheriff seizes a stranger's property, the rule does not apply and interference with his custody is not interference with another Court's Order of attachment. 17 However, as a matter of substance and on the merits, the ultimate conclusion of respondent Court nullifying the Decision of Branch X permanently enjoining the auction sale, should be upheld. Legally speaking, it was not a "stranger's property" that was levied upon by the Sheriff pursuant to the judgment rendered by Branch XVII. The vehicle was, in fact, registered in the name of VIDAD, one of the judgment debtors. And what is more, the aspect of public service, with its effects on the riding public, is involved. Whatever legal technicalities may be invoked, we find the judgment of respondent Court of Appeals to be in consonance with justice. WHEREFORE, as prayed for by private respondent Abraham Sibug, the petition for review on certiorari filed by Adolfo L. Santos is dismissed with costs against the petitioner. SO ORDERED.