Darang vs. Belizar

A sale, alienation, or lease of property of a public service may be negotiated or completed without prior approval of the Public Service Commission; such approval is not a condition precedent to the validity of the contract but is required only for the protection of public interest. Where a complaint contains a general prayer for relief, exemplary damages may be awarded even if not specifically pleaded, but moral damages require specific allegation and proof of mental suffering.

Rosario Darang held a certificate of public convenience to operate a bus transportation line on the MacArthur–Balangiga and MacArthur–Guiuan routes in Samar. Pedro Ty Belizar operated trucks on other lines but not on those routes. Andres Salamida secured a Public Service Commission decision dated May 20, 1957, authorizing him to operate on the same lines covered by Darang’s certificate. Darang and another operator, Fortunato Macabasag, immediately challenged that decision before the Supreme Court (G.R. No. L-12442) on procedural grounds. While that challenge was pending, Darang also filed a complaint with the PSC against Belizar for encroachment without authority. Shortly thereafter, Belizar executed documents purporting to transfer three trucks to Salamida, who began operating them on Darang’s line. Darang then sought injunctive relief in the regular courts to stop the operation and block the registration of the vehicles.

• Nature of the Action: Darang sought to enjoin Belizar and Salamida from operating three trucks on the MacArthur–Balangiga line and to restrain the Motor Vehicles Registrar from registering those trucks in Salamida’s name. She alleged that the sale was simulated, that the vehicles had been withdrawn from service, and that the operation violated her certificate of public convenience.
• Darang’s Certificate: She held a valid certificate of public convenience for bus transportation on the MacArthur–Balangiga and MacArthur–Guiuan lines.
• Belizar’s Operation: Belizar was authorized to operate trucks on other lines in Samar but not on Darang’s routes. Darang had filed a PSC complaint against him for encroachment without authority under Sections 16(n) and 17(a) of the Public Service Act.
• Salamida’s Certificate and Its Challenge: On May 20, 1957, the PSC granted Salamida a certificate to operate on the same MacArthur–Balangiga and Guiuan lines. Darang and Macabasag challenged that decision before the Supreme Court (G.R. No. L-12442), alleging denial of the right to present surrebuttal evidence. The Supreme Court later reversed the PSC decision and remanded the case.
• Alleged Sale and Operation: Beginning June 7, 1957, Belizar, allegedly in connivance with Salamida, caused three trucks—a Chevrolet (TPU No. 24122), another Chevrolet (TPU No. 24036), and an International (TPU No. 24087)—to be transferred to Salamida through a simulated deed of transfer. The trucks had been registered in Belizar’s name for 1957 and had been withdrawn from public service. Salamida operated them on Darang’s line using Belizar’s business name “Samar Express Transit.”
• CFI Findings: The trial court found that the certificates of registration were not properly accomplished and were void; the deeds of sale were fictitious because the trucks remained registered in the PSC records under Belizar’s name; Salamida failed to register the trucks in his name within 30 days from receipt of the PSC decision; and Salamida operated without tickets or stubs, violating the seventh condition of his certificate. The CFI further held the sale null and void for lack of prior PSC approval.

• Jurisdiction of the CFI: Appellants argued that the Court of First Instance lacked jurisdiction because other cases involving substantially the same parties and subject matter were pending before the Public Service Commission and the Supreme Court (G.R. No. L-12442).
• Validity of the Sale Under Section 20(g): Appellants contended that the trial court misapplied Section 20(g) of Commonwealth Act No. 146. They maintained that this provision superseded the old law (Act No. 3108, §16(h)) and explicitly allowed a sale of public service property to be negotiated or completed before PSC approval, so the lack of prior approval did not render the sale void.
• Moral Damages: Appellants asserted that the award of moral damages was erroneous because the complaint contained no specific allegation of moral suffering nor a prayer for moral damages, contrary to the requirement of Article 2217 of the Civil Code.

• Jurisdiction: Darang maintained that the CFI had jurisdiction because her suit primarily attacked the simulated sale and sought to enjoin unauthorized operation on her certified line, issues distinct from the administrative encroachment complaint before the PSC and the petition for review before the Supreme Court. The parties and the rights asserted were not identical.
• Validity of the Sale: She argued that the sale was void on other grounds—fictitious character, lack of proper vehicle registration, and violation of the conditions of Salamida’s certificate—and that those independent grounds were not contested on appeal.
• Damages: Darang contended that the general prayer for “other remedies which may be just and equitable in the premises” justified the grant of exemplary damages, which were appropriate given the defendants’ conduct.

• Jurisdiction of the CFI: Whether the Court of First Instance had jurisdiction over the injunction suit despite the pendency of related cases before the Public Service Commission and the Supreme Court.
• Validity of the Sale under Section 20(g), Commonwealth Act No. 146: Whether the sale of the three trucks from Belizar to Salamida was void for lack of prior Public Service Commission approval, considering Section 20(g) of the Public Service Act.
• Damages: Whether moral damages could be awarded absent a specific allegation and prayer therefor in the complaint.

• Jurisdiction of the CFI: The CFI validly exercised jurisdiction. The three proceedings involved different parties, different causes of action, and different issues. The PSC case concerned Belizar’s lack of authority to enter Darang’s line; the Supreme Court case questioned the procedural correctness of the PSC’s grant of a certificate to Salamida; the CFI case centered on the validity of the sale of trucks and Salamida’s violations of his certificate. Because the question of the sale’s validity was not proper for the PSC, and the identity of parties and issues required for litis pendentia was lacking, the CFI had authority to hear and decide the case.
• Validity of the Sale under Section 20(g): The lower court misconstrued the provision. Section 16(h) of Act No. 3108 had declared sales without PSC approval null and void. Section 20(g) of Commonwealth Act No. 146 altered the language to provide that nothing shall prevent the transaction from being negotiated or completed before approval. The change in wording was substantive: prior PSC approval is no longer a condition precedent to the validity of the sale; approval is required only to protect public interest. The declaration of nullity was nevertheless affirmed because the sale had been found void on other grounds—fictitious character, improper registration, and violation of certificate conditions—that were not contested on appeal.
• Damages: The award of moral damages was improper because the complaint did not allege mental anguish or moral suffering, nor did it specifically pray for moral damages as required by Article 2217 of the Civil Code. However, the complaint’s general prayer for “other remedies which may be just and equitable” justified an award of exemplary damages. The P3,000 granted by the CFI was treated as exemplary damages, an amount deemed fair under the circumstances.

• Validity of Sale of Public Service Property under Section 20(g), Commonwealth Act No. 146 — Unlike the old law (Act No. 3108, §16(h)), Section 20(g) of the Public Service Act does not require prior approval of the Public Service Commission as a condition precedent for the validity of a sale, alienation, or lease of public service property. The transaction may be negotiated or completed before approval; the approval serves solely to protect public interest. The change in statutory language indicates a deliberate legislative policy shift that must be given effect.
• Litis Pendentia and Jurisdiction Over Distinct Issues — Jurisdiction over an action is not defeated by the pendency of another case merely because some parties overlap, if the causes of action, issues, and reliefs sought are different. Where an injunction suit raises questions—such as the validity of a simulated sale and violations of a certificate of public convenience—that are not within the competence of the PSC and are not identical to those in pending administrative or appellate proceedings, the regular courts retain jurisdiction.
• Pleading Requirements for Moral and Exemplary Damages — Under Article 2217 of the Civil Code, moral damages cannot be granted unless the complaint includes specific allegations and a prayer for such damages, and evidence of mental suffering is presented. A general prayer for “other just and equitable remedies” may support an award of exemplary damages when the circumstances warrant.

• “The change then in the wording of the law affected not only the form but the very substance of the provision. While in the old law the sale without the approval of the Public Utility Commission was declared null and void, under Commonwealth Act 146, the new law, the sale may not only be negotiated but completed before said approval. In other words, the approval by the Commission is not a condition precedent to the validity of the contract. The approval is only necessary to protect public interest.”
• “It is really elementary that in order that moral damages may be awarded there must be pleading and proof of moral suffering, mental anguish, fright and the like (See Civil Code, Art. 2217). We feel though that the general prayer in the complaint for ‘other remedies which may be just and equitable in the premises’ warrants the award of P3,000 in favor of the plaintiff-appellee, in the form of exemplary damages which, We think, is fair under the circumstances.”

• Seva vs. Alfredo Berwin & Co. and Medel, 48 Phil. 580 — Distinguished. This case applied Section 16(h) of Act No. 3108, which rendered sales without PSC approval null and void; the ruling was superseded by the different language of Section 20(g) of Commonwealth Act No. 146.
• Montoya vs. Ignacio, 94 Phil. 182; Fores vs. Miranda, G.R. No. L-12163, March 4, 1959 — Cited as authority that, under the current Public Service Act, prior PSC approval is not essential to the validity of the transaction but is required only to protect public interest.
• Crawford, Statutory Construction (Interpretation of Laws), p. 618 — Cited for the presumption that the legislature does not change the wording of a statute without intending to change its meaning, supporting the Court’s conclusion that the new proviso deliberately departed from the prior rule of absolute nullity.

• Section 20(g), Commonwealth Act No. 146 (Public Service Act) — Interpreted to allow the negotiation or completion of a sale, alienation, or lease of public service property without prior PSC approval, and to render such approval not a condition precedent to validity but a measure for the protection of public interest.
• Section 16(h), Act No. 3108 (Old Public Utility Law) — The former provision that expressly declared any sale, alienation, mortgage, encumbrance, or lease without approval null and void; contrasted to highlight the legislative change now embodied in Section 20(g).
• Article 2217, Civil Code — Governs the award of moral damages; applied to delete the moral damages award due to lack of specific allegation and proof.
• Section 8(k), Revised Motor Vehicle Law (Act No. 3992) — Mentioned by plaintiff in support of the claim that vehicles withdrawn from service cannot be registered anew, but not decisive of the issues on appeal.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, and Castro, JJ., concurred.