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1 Pantranco V PSC

The PSC ordered two new conditions be added to Pantranco's existing certificates of public convenience: 1) the CPCs would be in effect for 25 years, and 2) the government could acquire Pantranco's vehicles and equipment at cost minus depreciation. Pantranco appealed. The Supreme Court held that the delegation of powers to the PSC was valid as it was an administrative rather than legislative function. The Act also applied to Pantranco's existing CPCs as utilities are subject to regulation under the state's police powers. However, the case was remanded for further proceedings because Pantranco was not afforded a public hearing regarding the 25-year limitation.

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27 views2 pages

1 Pantranco V PSC

The PSC ordered two new conditions be added to Pantranco's existing certificates of public convenience: 1) the CPCs would be in effect for 25 years, and 2) the government could acquire Pantranco's vehicles and equipment at cost minus depreciation. Pantranco appealed. The Supreme Court held that the delegation of powers to the PSC was valid as it was an administrative rather than legislative function. The Act also applied to Pantranco's existing CPCs as utilities are subject to regulation under the state's police powers. However, the case was remanded for further proceedings because Pantranco was not afforded a public hearing regarding the 25-year limitation.

Uploaded by

CJ Millena
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PANTRANCO v.

PSC
June 26, 1940 // J. Laurel

FACTS: Pantranco had been engaged in the transport industry for 20 years, plying the
Pangasinan-Tarlac and Nueva Ecija-Zambales routes. It filed an application for authorization to
operate 10 additional Brockway trucks to comply with the terms and conditions of its existing
certificates of public convenience (CPC) and as a result of the application of the Eight Hour
Labor Law. The Public Service Commission ordered to add two new conditions to the existing
certificates pursuant to Commonwealth Act No. 454, which were:
(a) That the CPCs will be in existence for 25 years upon the promulgation of the PSC’s
decision; and
(b) That the Commonwealth of the Philippines may acquire the vehicles and equipment,
upon payment of cost price minus depreciation costs.

Petitioner appealed the two new conditions via an MR (denied) and subsequently through a
petition for certiorari.

Pantranco’s arguments:
1. The grant of legislative powers to the PSC by CA No. 454 is an abdication of the Legislature
of its power and is violative of the separation of powers;
2. Assuming arguendo that it is a valid delegation of powers, the PSC exceeded its authority
because
a. The Act applies to future certificates and not to valid and subsisting certificates issued
prior to when the Act took effect; and
b. The Act violates constitutional guarantees

ISSUE(S):
Whether or not the grant of legislative powers to the PSC was valid (YES, what was
delegated was not a legislative function but rather an administrative function)
1. The conditions being assailed were not imposed on the whim of the PSC but have
constitutional bases: the first condition is a restatement of Sec. 6 of Article XII while the
second condition is based on Sec. 8 of Article XIII.
2. The determination of a period for which the CPC is supposed to be in effect is also not a
delegation of legislative power as such period is to be guided by public interest, a standard
held to be sufficient by jurisprudence.
3. What has been delegated to the PSC is not a legislative function but rather an administrative
function, involving the use of discretion to carry out the will of the National Assembly, as
stated in C.A. No. 454.
4. The theory of the separation of powers is designed to secure action and to forestall
overaction which necessarily results from undue concentration of powers, and thereby
obtain efficiency and prevent deposition. The "rule of law" was established which narrows
the range of governmental action and makes it subject to control by certain devices. As a
corollary, the rule prohibiting delegation of legislative authority, and from the earliest time
American legal authorities have proceeded on the theory that legislative power must be
exercised by the legislature alone. Apparent in the development of the principle of
separation of powers is that the maxim of delegatus non potest delegari or delegata potestas non
potest delegari has been made to adapt itself to the complexities of modern governments,
giving rise to the adoption, within certain limits, of the principle of "subordinate legislation,"
not only in the United States and England but in practically all modern governments. With
the growing complexity of modern life, the multiplication of the subjects of governmental
regulation, and the increased difficulty of administering the laws, there is a constantly
growing tendency toward the delegation of greater powers by the legislature, and toward
the approval of the practice by the court.

Whether or not the Act applies to petitioner (Yes)


1. Previous laws already in force before the enactment of C.A. No. 454 already subjected the
CPCs to amendments by the legislative
a. Section 74 of the Philippine Bill provided that "no franchise, privilege, or concession
shall be granted to any corporation except under the conditions that it shall be
subject to amendment, alteration, or repeal by the Congress of the United States."
b. The Jones Law, incorporating a similar mandate, provided, in section 28, that "no
franchise or right shall be granted to any individual, firm, or corporation except
under the conditions that it shall be subject to amendment, alteration, or repeal by
the Congress of the United States."
c. The Constitution of the Philippines provided, in section 8 of Article XIII, that "no
franchise or right shall be granted to any individual, firm, or corporation, except
under the condition that it shall be subject to amendment, alteration, or repeal by
the National Assembly when the public interest so requires."
2. Though petitioner was already in existence prior to the establishment of PSC, it is still
subject to the regulation of the Commission in view of the State’s exercise of police power.
As soon as the power is exercised, all phases of operation of established utilities become at
once subject to the police power thus called into operation. The statute is applicable not only
to public utilities coming into existence after its passage, but also to those already
established and in operation.
3. The business of a common carrier holds such a peculiar relation to the public interest that
there is superinduced upon it the right of public regulation. When private property is
"affected with a public interest it ceases to be juris privati only." When one devotes his
property to a use in which the public has an interest, he, in effect, grants to the public an
interest in that use, and must submit to be controlled by the public for the common good, to
the extent of the interest he has thus created. He may withdraw his grant by discounting the
use, but so long as he maintains the use he must submit to control.
4. The right of the state to regulate public utilities is founded upon the police power, and
statutes for the control and regulation of utilities are a legitimate exercise thereof, for the
protection of the public as well as of the utilities themselves. Such statutes are not
unconstitutional, either impairing the obligation of contracts, taking property without due
process, or denying the equal protection of the laws, especially inasmuch as the question
whether or not private property shall be devoted to a public and the consequent burdens
assumed is ordinarily for the owner to decide; and if he voluntarily places his property in
public service he cannot complain that it becomes subject to the regulatory powers of the
state.

HELD: PSC decision reversed, case remanded for further proceedings (case remanded
because of due process considerations; Pantranco was not afforded a public hearing as to the
limitation of its CPCs for only 25 years)

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