TRANSPORATION LAW REVIEWER
Public Ultility
(b) 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, sub-
way motor vehicle, either for freight or passenger, or both with or without fixed route and
whether may be its classification, freight or carrier service of any class, express service,
steamboat or steamship line, pontines, ferries, and water craft, engaged in the
transportation of passengers or freight or both, shipyard, marine railways, marine repair
shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation
system, gas, electric light, heat and power water supply and power, petroleum,
sewerage system, wire or wireless communications system, wire or wireless
broadcasting stations and other similar public services: Provided, however, That a
person engaged in agriculture, not otherwise a public service, who owns a motor vehicle
and uses it personally and/or enters into a special contract whereby said motor vehicle
is offered for hire or compensation to a third party or third parties engaged in agriculture,
not itself or themselves a public service, for operation by the latter for a limited time and
for a specific purpose directly connected with the cultivation of his or their farm, the
transportation, processing, and marketing of agricultural products of such third party or
third parties shall not be considered as operating a public service for the purposes of
this Act.
THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES –
ARTICLE XII ARTICLE XII NATIONAL ECONOMY AND PATRIMONY
Section 11. No franchise, certificate, or any other form of authorization for the operation
of a public utility shall be granted except to citizens of the Philippines or to corporations
or associations organized under the laws of the Philippines, at least sixty per centum of
whose capital is owned by such citizens; nor shall such franchise, certificate, or
authorization be exclusive in character or for a longer period than fifty years. Neither
shall any such franchise or right be granted except under the condition that it shall be
subject to amendment, alteration, or repeal by the Congress when the common good so
requires. The State shall encourage equity participation in public utilities by the general
public. The participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the executive
and managing officers of such corporation or association must be citizens of the
Philippines.
Elements of Public Utility
The person must own, operate, manage or control in the Philippines public services
which may include distribution of goods or rendering of services to the public;
The ownership, operation, management or control must be for hire or compensation;
and
The ownership, operation, management or control must be done for general business
purposes.
Characteristics of a Public Utility
It is not required that the business is permanent because the operation may be
permanent, occasional or accidental
The business may be with general or limited clientele
Acme Transportation Co. must be granted the authority it applies for. With respect to the
first objection of X Lighterage Services, the Supreme Court has decided in one case
that when ferry service which connects two points on the opposite sides in an arm of the
sea such as bay or the like, and does not involve great distances or too a long time to
navigate, it is considered merely as a continuation or extension of the highway.
In the following case, Acme Transportation Co.‟s intended operation will only cover the
ferrying of its buses from Sorsogon to Samar - a continuous and uninterrupted ride.
Therefore, the ferry‟ services in question may still be considered land transportation
within the scope of Acme Transportation Co.‟s present Certificate of Public
Convenience. Hence there is no need for Acme Transportation Co. to obtain another
certificate of Public Convenience for its planned ferry service.
As for the second objection of X Lighterage Services, the Supreme Court has decided in
one case that the fact that a prior transportation company offers a same provision of
service that another company with a valid certificate of public convenience seeks to
provide is not illegal per se. In this case, while X Lighterage Services, as a prior
operator of services which Acme Transportation Co. allegedly intends to compete
against, the latter‟s petition is only limited to offer services exclusively and therefore will
not compete against X Lighterage Services. The fact that X Lighterage Services will
lose Acme Transportation Co. as a customer is no justification to prevent the latter from
ferrying its own busses to lessen its expenses, as long as it does not offer its services to
others. Considering the foregoing, Acme Transportation Co.‟s application for authority
must be granted and that objections of X Lighterage Services thereto are untenable.
Public Use
The essential feature of the public use is that it is not confined to privileged individuals,
but is open to the indefinite public. It is this indefinite or unrestricted quality that gives
it its public character. In determining whether a use is public, we must look not only to
the character of the business to be done, but also to the proposed mode of doing it. If
the use is merely optional with the owners, or the public benefit is merely incidental, it
is not a public use, authorizing the exercise of the jurisdiction of the public utility
commission. There must be, in general, a right which the law compels the owner to
give to the general public. It is not enough that the general prosperity of the public is
promoted. Public use is not synonymous with public interest. The true criterion by
which to judge of the character of the use is whether the public may enjoy it by right or
only by permission.
