City of Tagbilaran vs. Lim

Only the Public Service Commission, not a city, may issue a certificate of public convenience for motorized-tricycle service absent an express statutory grant or a power necessarily implied therefrom to the city. The City of Tagbilaran's charter power to impose municipal license taxes or fees did not include the distinct power to authorize operation, and factual findings supporting public convenience were binding when supported by evidence.

Severiano G. Lim was a naturalized Filipino businessman and majority stockholder of a bus company operating in the Tagbilaran area. The City of Tagbilaran was a municipal corporation chartered under Republic Act No. 4660. Public-utility operation was governed by Commonwealth Act No. 146, as amended, under which Section 15 authorized the Public Service Commission to issue certificates of public convenience.

Severiano G. Lim, a naturalized Filipino citizen and businessman, sought authority to operate a motorized-tricycle service for passenger transportation within the territorial limits of Tagbilaran City using fifty units. In support of his application, he submitted affidavits and testified that he had sufficient funds, income and property to finance the project, including several parcels of land in Tagbilaran. He further stated that he was majority stockholder of the Provincial Bus Company, grantee of a certificate of public convenience operating forty buses, and that he operated a gasoline station whose backyard he proposed to use as a garage for the tricycles. On the need for the service, he testified that 20,000 to 30,000 students living in the suburbs of Tagbilaran could use the service, as no calesas, taxi-cabs or auto-calesas operated there.

The City of Tagbilaran opposed the application, maintaining that power to grant authority to operate motorized-tricycle service within its jurisdiction was vested in its city board. Evidence was offered on its behalf, including testimony from the Vice Mayor tending to show concern that city revenue would be depleted if deprived of authority to grant permits. The City also contended that granting the application would aggravate difficulty in controlling and supervising already congested motorized tricycles, that the fifty units were actually owned and possessed by several different individuals, and a complaint against the applicant by one Erdulfo G. Boiser was invoked.

After hearing, the Commission found that public convenience would be promoted by the grant. It noted Tagbilaran's conversion into a city through rapid growth and expansion and its need for more transportation for students flocking for higher learning and barrio folk commuting daily to work, sell produce and buy necessities. It found the congestion objection unsubstantiated because Commission records showed no motorized tricycle had been authorized as a public service in the city; the revenue fear unfounded because the city retained the right to impose license fees in regulating the service; the multiple-ownership claim unfounded because two companies had offered new units to the applicant on installment; and the Boiser complaint dismissed, as admitted by the fiscal. Finding the applicant a naturalized Filipino citizen financially capable of operating and maintaining the service in a manner promoting the public interest, the Commission overruled the opposition and ordered issuance of the certificate for fifty units under Section 15, Commonwealth Act No. 146, as amended, subject to specified conditions.

• Authority to Authorize Operation: Petitioner maintained that competence to grant the privilege of operating motorized-tricycle service within city boundaries belonged to its city board and not the Public Service Commission, relying on a provision of its charter, Republic Act No. 4660.
• Factual Objections to Grant: Petitioner assigned five errors factual in character, disputing the Commission's assessment of need, congestion and control, ownership of the proposed units, and related circumstances supporting public convenience.

• Competence to Grant Authority: Whether authority to authorize operation of motorized-tricycle service within Tagbilaran City belongs to the City and its city board rather than the Public Service Commission.
• Public Convenience and Factual Findings: Whether the Commission's findings that public convenience would be promoted and that the applicant was qualified and the opposition without merit should be disturbed.

• Competence to Grant Authority: No. Absent an express or necessarily implied statutory grant, the City possessed no power to issue certificates of public convenience, which remained with the Commission under Section 15, Commonwealth Act No. 146, as amended.
• Public Convenience and Factual Findings: No. Factual determinations on need, qualification and public convenience, being supported by evidence, were binding and not to be reweighed or substituted on review.

• Competence to Grant Authority: Municipal corporations exercise only powers expressly granted and those necessarily implied therefrom, being mere creatures of Congress with only such powers as the legislative department deemed fit to grant. The burden was therefore on the City to demonstrate the asserted competence, which it failed to do because Congress had not vested it with such power. Reliance on Section 28(b)4 of Republic Act No. 4660 was misplaced, since authority to impose municipal license taxes or fees on persons operating motorized tricycles presupposes the business exists for taxation and is entirely different from authority to allow its operation as a public service.
• Public Convenience and Factual Findings: Determination of relevant and controlling facts belonged to the Commission, not the City, and its discretion was not to be interfered with where review disputed merely sufficiency of evidence. Credibility, preponderance of proof, and wisdom of the conclusion were not to be reexamined de novo, the lack of wisdom affecting neither authority to decide nor validity of the decision. Applied here, the findings on rapid urban growth, transportation need of students and commuters, absence of any authorized tricycle service, financial capability of the applicant, installment availability of new units, dismissal of the separate complaint, and retention by the City of license-fee regulation supported overruling the opposition.

• Municipal powers strictly construed — Municipal corporations possess only such powers as are expressly delegated and such other powers as are necessarily implied from express powers. Applied here, the City of Tagbilaran could not exercise certificating power over motorized tricycles without showing an express or necessarily implied grant in Republic Act No. 4660, which it failed to establish.
• Finality of Public Service Commission factual findings — Findings and conclusions of fact by the Public Service Commission, when supported by evidence, are binding and will not be disturbed on review. Applied here, the Commission's findings on need for service, applicant's citizenship and financial capability, and lack of merit in the opposition were sustained against the City's five factual assignments of error.
• License-tax power distinguished from certificating power — Power to impose municipal license taxes or fees on an activity is distinct from power to authorize its operation as a public utility. Applied here, Section 28(b)4 of Republic Act No. 4660, authorizing license taxation of motorized-tricycle operators, did not confer authority to grant certificates of public convenience, while leaving the City its regulatory license-fee right.

• "Municipal corporations have only such power as are expressly delegated to them and such other powers as are necessarily implied from such express powers." — States the controlling limitation on municipal authority, drawn from United States vs. Ten Yu, under which the City's claim to certificating power was rejected for lack of statutory grant.
• "On the whole, we find no reason to deviate from the rule heretofore consistently applied that findings and conclusions of fact made by the Public Service Commission, when supported by evidence, are binding upon this Court." — States the deference rule, drawn from Intestate Estate of Tiongson vs. Public Service Commission, under which the five factual assignments of error were refused reexamination.
• "Where the petition for review disputes merely the sufficiency of the evidence, the finding cannot be disturbed. It is not for this Court to determine credibility and preponderance of proof nor to examine the proof de novo and determine for itself whether or not the preponderance of evidence really justifies the decision. It is not to substitute its discretion for that of the Public Service Commission on questions of fact." — Defines the limited scope of review over Commission fact-finding, drawn from Philippines Rabbit Bus Lines, Inc. vs. Gabatin, foreclosing substitution of judgment on public convenience.

• Switzer vs. Municipality of Cebu, 20 Phil. 111 — Earliest authority cited for requiring a showing of specific and definite power before a municipal corporation may exercise the competence claimed.
• United States vs. Ten Yu, 24 Phil. 1 (1912) — Source of the formulation limiting municipal corporations to expressly delegated powers and necessarily implied powers, applied to reject the City's claim.
• People vs. Lardizabal, 61 Phil. 360 (1935) — Restatement that municipal corporations may exercise expressly granted powers and necessarily implied powers, reinforcing the strict-construction rule.
• Philippines Rabbit Bus Lines, Inc. vs. Gabatin, L-24472, July 31, 1968, 24 SCRA 411 — Controlling precedent that sufficiency-of-evidence disputes over Commission findings cannot be disturbed and discretion on facts may not be substituted.
• Ledesma vs. Public Service Commission, L-26900, February 27, 1970, 31 SCRA 805 — Later approval of the Gabatin deference rule to Commission factual findings.
• Intestate Estate of Tiongson vs. Public Service Commission, L-24701, December 16, 1970, 36 SCRA 241 — Most recent reiteration cited that Commission findings and conclusions of fact supported by evidence bind the reviewing court.

• Section 15, Commonwealth Act No. 146, as amended — Basis for Commission authority to issue certificates of public convenience; applied to sustain issuance of the certificate for fifty motorized-tricycle units within Tagbilaran City.
• Section 28(b)4, Republic Act No. 4660 (1966) — Charter provision authorizing the City to impose municipal license taxes or fees on persons operating motorized tricycles; construed as a taxing power only, not conferring authority to grant operating authority or certificates.

Makalintal, Actg. C.J., Zaldivar, Teehankee, Makasiar, Antonio and Esguerra, JJ., concur. Castro, J., concurring, concurring in the majority opinion as modified by the concurring opinion of Barredo, J. Barredo, J., concurring, agreeing in exclusive Commission jurisdiction to grant certificates while clarifying the City's remaining reasonable regulatory power over tricycle operation subject to reconciliation with the certificate.