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Batangas Transportation Co. v.

Orlanes Johns, J (1928) Nature: Review of an order of the Public Service Commission Parties: Batangas Transportation Co., petitioner Cayetano Orlanes, respondent Facts: Orlanes sought to have a Certificate of Public Convenience (CPC) to operate a line of auto trucks with fixed times of departure between Taal and Bantilan, with the right to receive passengers and freight from intermediate points. At the time of his application, Orlanes was an irregular operator between Bantilan and Taal, and that Batangas Transportation Co. (BTC) was a regular operator between Batangas and Rosario. Orlanes sought to have his irregular operation changed into a regular operation, and to set aside and nullify the prohibition against him in his CPC that he shall not have or receive any passengers or freight at any of the points served by the BTC which holds a prior license from the Public Service Commission (PSC). His petition is based on the fact that to comply with the growing demands of the public, the BTC applied for a permit to increase the no. of trip hours at and between the same places and for an order that all irregular operators be prohibited from operating unless they should observe an interval of 2 hours before or one hour after the regular hours of the BTC. PSC granted the petition of Orlanes. Thus, this petition for review. Issue/s: WON a CPC should be issued to a second operator in a field where, and in competition with, a first operator who is already operating a sufficient, adequate and satisfactory service? Ruling/s: NO. Decision of PSC is revoked. The PSC has the power to specify and define the terms and conditions upon which any public utility shall operate and to make reasonable rules and regulations for its operation, and to fix the compensation that it shall receive for its service to the public, and for good cause may suspend or even revoke a license granted It is not the policy of the law for the PSC to issue a CPC to a second operator to cover the same field and in competition with a first operator who is rendering sufficient, adequate and satisfactory service, and who in all things and respects is complying with the rules and regulations of the PSC. The power of the PSC to issue a CPC is founded on the condition precedent that after a full hearing and investigation, it shall find as a fact that the proposed operation is for the convenience of the public. So long as the first operator keeps and performs his terms and conditions of its license and complies with the reasonable demands of the public, it has more or less of a vested and preferential right over another who seeks to acquire a later license to operate over the same route.

To carry out the purpose and intent for which the PSC was created, the law contemplates that the first license will be protected in his investment and will not be subjected to ruinous competition. The primary purpose of the PSC is to secure adequate, sustained service for the public at the least possible cost and to protect and conserve investments which have already been made for that purpose. A CPC for the operation of an auto truck line in occupied territory should not be granted where there is no complaint as to existing rates and the company in the field is rendering adequate service. It is the duty of the PSC to protect rather than to destroy the investment of a public utility. The policy of regulation upon which the present public utility commission plan is based and which tends to do away with competition among public utilities as they are natural monopolies, is at once the reason that the regulation of an existing system of transportation, which is properly serving a given field, or may be required to do so, is to be preferred to competition among several independent systems. While requiring a proper service from a single system for a territory in consideration for protecting it as a monopoly for all the service required and in conserving its resources, no economic waste results and service may be furnished at a minimum cost.