LTFRB v. Hon. Carlos Valenzuela, G.R. No. 242860, March 11, 2019

The
Land Transportation Franchising and Regulatory Board (LTFRB) and the

Department of Transportation (DOTr) Vs. Hon. Carlos A. Valenzuela, in his capacity as
Presiding Judge of the Regional Trial Court of Mandaluyong City, Branch 213 and
DBDOYC, Inc.
(G.R. No. 242860, March 11, 2019)
Perlas-Bernabe, J.

Facts:
DO 07-1097 set the standard of classifications for public transport conveyances to be used as
basis for issuance of Certificate of Public Convenience (CPC) for public utility vehicles (PUV).

On May 8, 2015, Department of Transportation and Communications (DOTC) issued
Department Order (DO) 2015-11, amending DO 07-1097, by adding 2 new classifications of
mode of public transportation, (1) Transportation Network Companies (TNC); and (2)
Transportation Network Vehicle Services (TNVS). The following are their definitions based on
DOTC DOs:
TNC – an organization whether a corporation, partnership, sole proprietor, or

other form, that provides pre-arranged transportation services for compensation
using an online-enabled application or platform technology to connect
passengers with drivers using their personal vehicles.
TNVS – a PUV accredited with a TNC, which is granted authority or franchise

by LTFRB to run a public transport service. (DO 2017-11)
DO 2017-11 also provided that motorcycles are not allowed as public transport conveyance.
Consequently, LTFRB issued memorandum circulars governing the issuance of necessary CPC
for a TNVS and accreditation for a TNC.
On May 26, 2016, DBDOYC registered its business with SEC and launched Angkas, an online
and on-demand motorcycle-hailing mobile application that pairs drivers of motorcycles
with potential passengers without, however, obtaining the mandatory certificate of TNC
accreditation from LTFRB.
Thus, LTFRB issued a press statement that DBDOYC, a TNC, cannot legally operate. DBDOYC
ignored such and continued operations.
DBDOYC filed for Petition for Declaratory Relief with Application for TRO/Writ of Preliminary
Injunction against LTFRB before RTC.
DBDOYC arguments:
1. Angkas is not a public transpo provider; only a tool that connects passengers to
motorcycle drivers
2. Angkas and its drivers does not provide in public service
3. If it is providing public service which would require securing a CPC or certificate of
accreditation, then DO 2017-11 must be declared invalid because it violates the Land
and Transportation Traffic Code which does not prohibit motorcycles from being PUVs
4. Neither LTFRB nor DOTr (new DOTC) has jurisdiction to regulate motorcyles for hire.
RTC Decision
RTC granted TOR finding the DBDOYC’s business is not subject to any regulation nor
prohibited by any existing law. Since it is not contrary to law, morals, good customs, public
order, or public policy, DBDOYC has a clear and unmistakable right. This clear and
unmistakable right pertains to its right to conduct business based on its constitutional right to
liberty, which includes right to earn livelihood by lawful calling; and pursue any vocation and
essentially do and perform anything that is not prohibited by law. Therefore, prohibiting the
operations of Angkas would cause irreparable injury to DBDOYC.
RTC issued the Assailed Order which was a writ to enjoin LTFRB from (1) interfering with
DBDOYC’s operations; (2) apprehending Angkas bikers who are in lawful pursuit of their trade
or occupation; and (3) performing any acts that will impede or defeat DBDOYC’s pursuit of its
lawful business or trade as owner and operator of Angkas.
Without MR, LTFRB elevated the case to SC.
Issue:
Did RTC commit grave abuse of discretion amounting to lack or excess of jurisdiction in issuing
a writ of preliminary injunction in favor of DBDOYC against LTFRB?
Ruling:Yes.
The first requisite in issuing a writ of preliminary injunction is the existence of a clear legal right
because the said writ is intended to prevent having irremediable injuries while a claim is being
fully heard by a court (DPWH vs. City Advertising Venturers Corp.). Right must be clear and
unmistakable not doubtful/disputed (Sps. Nisce vs. Equitable PCI Bank).
DBDOYC argues that it has clear and unmistakable right to conduct business based on
constitutional right to liberty. However, the State has an inherent Police Power to regulate this
right for public welfare, provided that the State’s interference is not arbitrary.
LTFRB now argues that DBDOYC is a transportation provider (based on the new classifications
of transpo providers under DO 2015-11 and 2017-11) and its accredited drivers are common
carriers engaged in rendering public service which is subject to LTFRB regulation.
The definition of public service includes “any common carrier” based on Public Service Act
(PSA). Section 15 of the same law requires that no public service shall operate in PH without
possessing CPC. Common carriers under Civil Code is defined as persons or corporations, firms,
or associations engaged in the business of carrying or transporting passengers…by land…for
compensation, offering their services to the public.
DBDOYC argues that it cannot compel Angkas driver to pick up a passenger even if the Angkas
driver confirms the booking, thus, there is purely private contractual arrangement between the
Angkas biker and the passenger. Moreover, Angkas does not offer its services to the indefinite
public, only to those with the Angkas app.
SC answers that Article 1732 of Civil Code (1) does not distinguish between a carrier who offers
services to the general public from a person or enterprise who offers services or solicits business
only from a narrow segment of general population; and (2) does not distinguish between a person
or enterprise offering transpo service ona regular basis and one offering the same on an
occasional, episodic, or unscheduled basis.
Hence,
1. Even if Angkas does not offer its services to the indefinite public and only to those with
the Angkas app, it is still considered as a common carrier because of the non-distinction
between carriers who offer services to general public, and carriers who offer services to
narrow segment of general population.
2. Even if, drivers may refuse demand for transpo service by not going online, still, when
they do so, they make their services available to the public. Therefore, they are common
carriers, because the Code does not distinguish between carriers who offer their services
on a regular/scheduled basis and those who offer it on an occasional, episodic, or
unscheduled basis.
3. Lastly, there is no purely private arrangement between biker and passenger because both
cannot freely accept, reject, or modify their terms of engagement based solely on their
discretion. There is therefore absence of true choice vitiating the postulation that there is
purely private contract between them.
Nevertheless, even if Angkas bikers are not common carriers, therefore DBDOYC would not fall
under the public service definition, their business will still contradict RA 4136 which states that
private motorcycles cannot be used for hire or to solicit, accept, or be used to transport
passengers or freight for pay.
Thus, there is no clear and unmistakable right on the part of DBDOYC. RTC therefore gravely
abused discretion in issuing the assailed injunctive writ.

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The

Land Transportation Franchising and Regulatory Board (LTFRB) and the

TNC – an organization whether a corporation, partnership, sole proprietor, or

TNVS – a PUV accredited with a TNC, which is granted authority or franchise

Without MR, LTFRB elevated the case to SC.

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