November 29, 1933
Manila-Pililla routes.
DOMINADOR RAYMUNDO, petitioner-appellant,
vs.
LUNETA MOTOR CO., et. al., respondents-appellees.
Malcolm, J.
NATURE: Appeal from a decision of the Public Service Commission
SUMMARY: De Guzman bought trucks on credit from Luneta Motor.
The sale was backed by a chattel mortgage on the trucks and 3
CPCs. Upon default, Luneta Motor had the CPCs attached and were
able to buy them on execution sale; but De Guzman had already
sold the CPCs to Raymundo. The two “buyers” of the CPCs now
sought to have their sales approved by the PSC. The PSC and the
SC sided with Luneta Motor, holding that CPCs may be attached and
sold on execution.
DOCTRINE: Certificates of public convenience (CPC), being a form
of limited franchise, are considered as property which may be sold
even on execution. CPCs have become valuable as they are
essential to the operation of transportation businesses and have
come to be sold, mortgaged and levied upon on execution. The
Court sanctions these practices as they are not prohibited under
pertinent laws.
FACTS
 Nicanor DE GUZMAN, as proprietor of GUZCO Transit,
bought trucks from LUNETA Motor Company.
o The purchase was made with promissory notes
backed by a chattel mortgage on the trucks.
 De Guzman failed to pay, hence Luneta sued him before the
Manila CFI.
 The Manila CFI issued a writ of attachment against the
properties of Guzco, including its rights in 3 certificates of
public convenience (CPC) covering the Manila-Cardona and
 Nine days after the attachment, or on July 16, 1932, De
Guzman sold the 3 attached CPCs plus another CPC and
several trucks to Dominador Raymundo.
 The attached CPCs were sold on auction, with Luneta
emerging the highest bidder.
 Raymundo and Luneta applied for approval of the respective
sales to them of the CPCs before the Public Service
Commission (PSC). The two cases were consolidated, and
the PSC upheld the sale in favor of Luneta. Raymundo was
allowed to file a new petition for the fourth unattached CPC
he bought from Guzco.
 Raymundo now appeals the PSC decision. The SC now had
to choose which sale to uphold – the execution sale in favor
of Luneta or the voluntary “fire sale” in favor of Raymundo
which was made after the property had been levied upon.
ISSUE (HELD)
W/N a Certificate of Public Convenience may be attached and sold
on execution (YES)
RATIO
 The Court decided the case on this sole issue and brushed
the other matters aside, especially considering that the CFI
decision with respect to the attachment had become final.
 The SC also brushed aside Raymundo’s contention that
CPCs may not be sold separately from motor vehicles,
giving respect to the policy decision of the PSC allowing
sales of CPCs without motor vehicles.
Pertinent laws and decisions do not prohibit the sale of CPCs. This
may be held to extend to involuntary sales.
 Act 3108, as amended (the Public Service Law) is the legal
basis for the issuance of CPCs. A CPC granted to an
operator of public utility vehicles grants a right in the nature
of a limited franchise (Public Utilities Commission v.
Garviloch).
 CPCs are not included in the Code of Civil Procedure
exceptions to what properties may be attached. Moreover,
 under the Code, property as defined includes every species
of legal title, inchoate, complete, or even equitable.
 Reyes v. Gray – “The test by which to determine whether or
not property can be attached and sold upon execution is
whether the judgment debtor has such a beneficial interest
therein that he can sell or otherwise dispose of it for value.”
 While the Public Service Law and the Code of Civil
Procedure do not explicitly provide for the attachability of
CPCs, Act 667, Sec. 10 and Sec. 56 of the Corporation Law
expressly allow for the sale on execution of franchises.
 The language of the Code of Civil Procedure is broad
enough to include CPCs and franchises as attachable
property which may be sold on execution.
 Sec. 16 of the Public Service Law allows the PSC to approve
the “sale, alienation, mortgaging, encumbering, or leasing of
property, franchises, privileges, or rights or any part thereof”.
If a CPC may be sold voluntarily, then there is no reason to
hold that it may be sold involuntarily through a court process.
CPCs have acquired considerable material value.
 In many cases, CPCs have become the cornerstone for the
business of bus transportation.
 The US SC has held that franchises are property within the
protection of the 14th Amendment of the US Constitution. If
the holder of a franchise is guaranteed constitutional rights
of property, there should be no reason for such holder to
assume the corresponding responsibilities or duties of
holding such property.
 In practice, the PSC has approved foreclosure sales of
CPCs to 3rd parties. The Philippine Supreme Court has
approved attachment of CPCs due to chattel mortgage or
court writs.
 The decision of Judge (later Justice) Anacleto Diaz
upholding the attachment of the 3 CPCs has become final,
no appeal having been taken. While the sale had to be
approved by the PSC, it nevertheless respected the CFI
decision as well.
 SC, quoting Judge Diaz: "It remains to be determined
whether, under the law, certificates of public convenience
are liable to attachment and seizure by legal process. The
law is silent as to this matter. It can not be denied that such
franchises are valuable. They are subject to being sold for a
consideration as much as any other property. They are even
more valuable than ordinary properties, taking into
consideration that they are not granted to every one who
applies for them but only to those who undertake to furnish
satisfactory and convenient service to the public. It may also
be said that dealers in motor vehicles even extend credit to
owners of such certificates or franchises. The law permits
the seizure by means of a writ of attachment not only of
chattels but also of shares and credits. While these
franchises may be said to be of intangible character, they
are however of value and are considered properties which
can be seized through legal process.”
The result therefore, is that CPCs may be sold on execution sale,
and the PSC is authorized to approve the transfer of the CPC to the
execution creditor.
DISPOSITION: Decision affirmed.
COGEO-CUBAO OPERATORS AND DRIVERS ASSOCIATION
vs. THE COURT OF APPEALS, LUNGSOD SILANGAN
TRANSPORT SERVICES, CORP., INC.
G.R. No. 100727 March 18, 1992
FACTS:
It appears that a certificate of public convenience to operate a
jeepney service was ordered to be issued in favor of Lungsod
Silangan to ply the Cogeo-Cubao route sometime in 1983 on
the justification that public necessity and convenience will
best be served, and in the absence of existing authorized
operators on the lined apply for . . . On the other hand,
defendant-Association was registered as a non-stock, non-
profit organization with the Securities and Exchange
Commission on October 30, 1985 . . . with the main purpose
of representing plaintiff-appellee for whatever contract and/or
agreement it will have regarding the ownership of units, and
the like, of the members of the Association . . .
Perturbed by plaintiffs' Board Resolution No. 9 . . . adopting a
Bandera' System under which a member of the cooperative is
permitted to queue for passenger at the disputed pathway in
exchange for the ticket worth twenty pesos, the proceeds of
which shall be utilized for Christmas programs of the drivers
and other benefits, and on the strength of defendants'
registration as a collective body with the Securities and
Exchange Commission, defendants-appellants, led by Romeo
Oliva decided to form a human barricade on November 11,
1985 and assumed the dispatching of passenger jeepneys . . .
This development as initiated by defendants-appellants gave
rise to the suit for damages.
Defendant-Association's Answer contained vehement denials
to the insinuation of take over and at the same time raised as
a defense the circumstance that the organization was formed
not to compete with plaintiff-cooperative. It, however,
admitted that it is not authorized to transport passengers . . .
ISSUE :
Whether or not the petitioner usurped the property right of
the respondent.
HELD:
Yes.
xxx
Under the Public Service Law, a certificate of public
convenience is an authorization issued by the Public Service
Commission for the operation of public services for which no
franchise is required by law. In the instant case, a certificate
of public convenience was issued to respondent corporation
on January 24, 1983 to operate a public utility jeepney
service on the Cogeo-Cubao route. x x x
A certification of public convenience is included in the term
"property" in the broad sense of the term. Under the Public
Service Law, a certificate of public convenience can be sold by
the holder thereof because it has considerable material value
and is considered as valuable asset (Raymundo v. Luneta
Motor Co., et al., 58 Phil. 889). Although there is no doubt
that it is private property, it is affected with a public interest
and must be submitted to the control of the government for
the common good (Pangasinan Transportation Co. v. PSC, 70
Phil 221). Hence, insofar as the interest of the State is
involved, a certificate of public convenience does not confer
upon the holder any proprietary right or interest or franchise
in the route covered thereby and in the public highways
(Lugue v. Villegas, L-22545, Nov . 28, 1969, 30 SCRA 409).
However, with respect to other persons and other public
utilities, a certificate of public convenience as property, which
represents the right and authority to operate its facilities for
public service, cannot be taken or interfered with without due
process of law. Appropriate actions may be maintained in
courts by the holder of the certificate against those who have
not been authorized to operate in competition with the former
and those who invade the rights which the former has
pursuant to the authority granted by the Public Service
Commission (A.L. Ammen Transportation Co. v. Golingco. 43
Phil. 280).
In the case at bar, the trial court found that petitioner
association forcibly took over the operation of the jeepney
service in the Cogeo-Cubao route without any authorization
from the Public Service Commission and in violation of the
right of respondent corporation to operate its services in the
said route under its certificate of public convenience.