Benitez v.

Santos
Topic: Other rules on franchise and certificates

FACTS:
Nicolas Concepcion was granted a CPC to establish, operate and maintain 80 units of taxicab.
However, he failed to register all 80 units despite many extensions, prompting the Public
Service Commission to lower the units he can operate to 59.

Afterwards, Nicolas sold his CPC to Francisco Benitez Jr. The sale included the right to operate
the 59 units. The Public Service Commission, however, approved the sale for only 27 units,
because this is the only number Nicolas was able to register (he was not able to register 32 of
the 59 units authorized in his certificate).

Since the Public Service Commission has already found and declared the approved number of
units are necessary for operation in the City of Manila and suburbs, the unregistered number of
units must be filled. Three parties, namely Paz Benitez, Mabait Lopez and Amador Santos,
separately sought authority to operate the 32 taxicabs units.

The Commission awarded the CPC to operate the 32 taxicab units to Amador Santos because
in its opinion he is the best qualified, considering that:
1. Santos is presently a taxicab operator of 87 units of the Mercedez-Benz Bantam type,
2. he has the experience and know-how in the operation of the taxicab business, and
3. he has available trained mechanics, drivers, personnel, tools, shop and equipment that would
insure regular, continuous and dependable service.

ISSUE:
Whether the grounds enumerated by the Commission were valid grounds to award the CPC to
Santos.

RULING:
No. Priority in the filing of the application for a CPC is, other conditions being equal, an
important factor in determining the rights of the public service companies (Batangas v. Orlanes).

While it may be true that respondent Santos already has experience in operating a taxicab
business and owns a repair and maintenance shop, these considerations alone do not shift the
preference in his favor. Experience and availability of garage facilities, although important, are
not decisive in the instant case. Evidently, these two factors cannot be expected of new
applicants to this business enterprise. The latter will acquire them when they are actually given
an opportunity to do so. Moreover, the other two applicants are not entirely without substantial
experience in this particular kind of business. Petitioner Paz Benitez used to be a director and
part owner of a taxicab company and petitioner Lopez gained her experience while employed in
her father's taxicab business prior to the war. The fact that prominently stands out is that all of
the applicants have proven their financial capacity to operate the 32 taxicab units. And since
petitioner Paz Benitez was the first applicant, the Court believe and so hold, that she should be
awarded the CPC to operate them.

The further fact that respondent Santos already owns 87 taxicab units which he presently
operates militates against his application, because giving the award to would likely create a
monopoly in his particular line of business. A monopolistic trend with its concomitant evils can
only serve to prejudice public interest, stifling as it does enthusiasm and initiative on the part of
those eager to learn. Prior experience, while itself useful, cannot create a vested right which
would endanger the national economy. Indeed, the unjustified and irregular grant of preference
to an applicant who filed a petition one and a half years later than another, would obviously
breed in the public's mind, a suspicion that favoritism, with all its sinister complications, play an
important role in the award of public utility benefits. To put a premium on tardiness would be to
encourage opportunities for underhand transactions that can only result in a miscarriage of
justice. Wherefore, the decision appealed from is hereby reversed. The Public Service
Commission is hereby ordered to award the grant of public utility operation in the instant case to
first applicant, Paz M. Benitez. So ordered without pronouncement as to costs.

Ponente: Paras, CJ

Dissenting: Montemayor, J

The court must not substitute its judgment or opinion for that of the commission on a question of
fact, supported by evidence.

LRTA v. Navidad
Topic: When can there be contract of carriage

FACTS:
On 14 October 1993, around 7:30 PM, Nicanor Navidad, then drunk, entered the EDSA LRT
station after purchasing a "token" (representing payment of the fare). While Navidad was
standing on the platform near the LRT tracks, Junelito Escartin, the security guard assigned to
the area approached Navidad. An altercation between the two apparently ensued that led to a
fist fight. No evidence, however, was adduced to indicate how the fight started or who, between
the two, delivered the first blow or how Navidad later fell on the LRT tracks. At the exact
moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in.
Navidad was struck by the moving train, and he was killed instantaneously.

On 08 December 1994, the widow of Nicanor, Marjorie Navidad, filed a complaint for damages
against Junelito Escartin (the security guard), Rodolfo Roman (operator), the LRTA, the Metro
Transit, and Prudent (security agency) for the death of her husband. LRTA and Roman filed a
counterclaim against Navidad and a cross-claim against Escartin and Prudent. Prudent, in its
answer, denied liability and averred that it had exercised due diligence in the selection and
supervision of its security guards. The LRTA and Roman presented their evidence while Prudent
and Escartin, instead of presenting evidence, filed a demurrer contending that Navidad had
failed to prove that Escartin was negligent in his assigned task.

Decision of the trial court:

Decision of the CA:

Contention of LRTA:
That Escartin’s assault upon Navidad, which caused the latter to fall on the tracks, was an act of
a stranger that could not have been foreseen or prevented.

ISSUE:
Whether LRTA is liable for the death of Nicanor.

RULING:
YES. The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify
the victim arises from the breach of that contract by reason of its failure to exercise the high
diligence required of the common carrier. while the deceased might not have then as yet
boarded the train, a contract of carriage theretofore had already existed when the victim entered
the place where passengers were supposed to be after paying the fare and getting the
corresponding token therefor.

In the discharge of its commitment to ensure the safety of passengers, a carrier may choose to
hire its own employees or avail itself of the services of an outsider or an independent firm to
undertake the task. In either case, the common carrier is not relieved of its responsibilities under
the contract of carriage.

Note:
The award of nominal damages in addition to actual damages is untenable. Nominal damages
are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff
for any loss suffered by him.18 It is an established rule that nominal damages cannot co-exist
with compensatory damages.

Air France v. Carrascoso

FACTS:
On March 28, 1958, Air France, through its authorized agent, Philippine Airlines, issued to
plaintiff a "first class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok,
plaintiff traveled in "first class", but at Bangkok, the Manager of the defendant airline forced
plaintiff to vacate the "first class" seat that he was occupying because, in the words of the
witness Ernesto Cuento, there was a "white man", who, the Manager alleged, had a "better
right" to the seat. When asked to vacate his "first class" seat, the plaintiff, as was to be
expected, refused, and told defendant's Manager that his seat would be taken over his dead
body; a commotion ensued, and, according to said Ernesto Cuento, "many of the Filipino
passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was
having a hot discussion with the white man [manager], they came all across to Mr. Carrascoso
and pacified Mr. Carrascoso to give his seat to the “white man"; and plaintiff reluctantly gave his
"first class" seat in the plane.

The contract of air carriage, therefore, generates a relation attended with a public duty.

Pedro de Guzman v. CA
Topic: Relevant factors in determining the status of a common carrier

FACTS:
In November 1970, Pedro de Guzman a merchant and authorized dealer of General Milk
Company in Urdaneta, Pangasinan, contracted with Ernesto Cendana for the hauling of 750
cartons of Liberty filled milk from a warehouse of General Milk in Makati, Rizal, to the former’s
establishment in Urdaneta on or before 4 December 1970.

Accordingly, on 1 December 1970, respondent loaded in Makati the merchandise onto his
trucks:
● 150 cartons were loaded on a truck driven by Cendana himself,
● while 600 cartons were placed on board the 2nd truck which was driven by Manuel
Estrada, Cendana’s driver and employee.

The 2nd truck was hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac, by
armed men who took with them the truck, its driver, his helper and the cargo. Thus, the other
600 boxes of Liberty filled milk never reached de Guzman, only 150 boxes were delivered to
him.

On 6 January 1971, de Guzman commenced action against Cendana in the CFI of Pangasinan,
demanding payment of P22,150.00, the claimed value of the lost merchandise, plus damages
and attorney's fees. Petitioner argued that Cendana, being a common carrier, and having failed
to exercise the extraordinary diligence required of him by the law, should be held liable for the
value of the undelivered goods.

In his Answer, Cendana denied that he was a common carrier and argued that he could not be
held responsible for the value of the lost goods, such loss having been due to force majeure.

Trial court: The respondent is a common carrier and ordered him to pay the value of the
undelivered goods plus damages.
CA decision: The respondent had been engaged in transporting return loads of freight "as a
casual occupation — a sideline to his scrap iron business" and not as a common carrier.

ISSUE:
1. Whether Cendana was a common carrier
2. If a common carrier, is he liable?

RULING:
1. Yes, Cendana was a common carrier. The Civil Code makes no distinction between one
whose principal business activity is the carrying of persons or goods or both, and one
who does such carrying only as an ancillary activity.

A certificate of public convenience is not a requisite for the incurring of liability under the
Civil Code provisions governing common carriers. That liability arises the moment a
person or firm acts as a common carrier, without regard to whether or not such carrier
has also complied with the requirements of the applicable regulatory statute and
implementing regulations and has been granted a certificate of public convenience or
other franchise.

2. No. The Court held that the occurrence of the loss must reasonably be regarded as quite
beyond the control of the common carrier and properly regarded as a fortuitous event. It
is necessary to recall that even common carriers are not made absolute insurers against
all risks of travel and of transport of goods, and are not held liable for acts or events
which cannot be foreseen or are inevitable, provided that they shall have complied with
the rigorous standard of extraordinary diligence.