Luneta Motor Company, Petitioner, vs. A .D. Santos, Inc. et al., Respondents, G.R. No. L-17716, July 31, 1962

Media

Part of The Lawyers Journal

Title: Luneta Motor Company, Petitioner, vs. A .D. Santos, Inc. et al., Respondents, G.R. No. L-17716, July 31, 1962
Language: English
Source: The Lawyers Journal XXVII (9) September 30, 1962
Year: 1962
Subject: Corporation law -- Philippines; Certificate of Public Convenience
Rights
Abstract: [Appeal from the decision of the Public Service Commission in case No. 123401 dismissing petitioner's application for the approval of the sale in its favor, made by the Sheriff of the City of Manila, of the certificate of public convenience granted before the war to Nicolas Concepcion (Commission Cases Nos. 60604 and 60605, reconstituted after the war in Commission Case Nos. 1470) to operate a taxicab service of 27 units in the City of Manila and therefrom to any point in Luzon. ]
Fulltext: Wherefore, the order appealed from is a ffirmed, without pronounccment as to costs. Beny;:on, C.J., Padilla, [,rtbntdor, Co11cepcio11, J.B.L. Reyes, D1o·rern, Pal'e<les, Di;:on, Rega/a and McU:alinWI, JJ., concurred. v Lwieta Motor Com1xrny, Petitioner, 1•s. A .D. Santos, Inc. ct ul .. R"spoudenls, C.R. No. L-17716, J uly 31, 1!)62, Diwn, J. 1. CORPORATION; AUT HORITY TO P URCH ASE , HOLD OR DEAL I N REAL AND P E RSONAL PROPE RTY.-Under Section 13 (5) of the Corporation Law, a corporation created thereunder may purchase, hold, etc., and otherwise deal in such real and personal IH'Operty as the purpose for which 1he co1porat.ion was formed may permit, and the transaction oJ its lawful business may reasonably and necessarily require. ci CERTIFICATE OF PUBLIC CONVENIENCE ; IT IS LIA BLE TO EXECUTION.- A certificate of public convenience grnnted to a public operator is liable lo cxceution ( Huymundo vs. Lunct::i Motor Co., 58 Phil. 889) and may be acquired by purchase. :3. CORPORATION; COHPORATE P URPOSE S; CE RTIFICATE OF PUBLIC CONVENI E NCE TO OPERATE WAT ER TRANSPORTATION IS NOT AN AUl HORITY TC ENGAGE IN LAND TRANSPORT ATION BUSINESS.-Petitioncr daimed that its corporate purposes arc to carry on a ieneral mercantile and commercial business, etc., and that it is authorized in its articles of incorporation to operate and otherwise deal in and concerning automobiles !!nd automobile accessories' business in all its multifarious ramification and to operate, etc. and otherwise dispose of vessels and boat.s, etc., and to own and operate steamship anc! mailing ships and othCL· floating craft and deal in the same and engage in the Philippine Islands and elsewhere in the transportation of persons, merehandize and chattels by water; all this incidental to the transportation of automobiles. Held : There is nothing in the legal provision and the provisions of petitioner's articles of incorporation relied upon that could j ustify petitioner's contPntion to engage in land trnnsportation business and operate a taxicab servi~. To the contrary, they arc precisely the best evidence that it has no authority at all to engage in such transportation business. T hat it may ope1·atc and otherwise deal in automobiles and automobile :1cccssorics; that it may engage in the trnnspoJ"tation of persons by water does not mea n that it may engage in the business of land transportation - an entirely different line of business. If it could not thus engage in this line of business, it follows that it may not acquire a11y certificate of nublic convenience to opcratr a taxicab sei·vice, such acquisition would be without purpose .and would have no necessary connection with 1 >etitioner's legitimate business. D EC I S I ON Appeal from the dceision of the Public Service Commission in case No. 123401 dismissing petitioner's application for the approval of the sale in its favor, made by the Sheriff of the City of Manila, of the certificate of public co:wcnience granted bCfo!·e the war lo Nicolas Concepcion (Commission Cases Nos. 60GO<:t and 60605, reconstituted after the war in Commission Cas~ N<}. 1470) to operate a taxicab scn•ice of 27 units in lhc City of Manila and therefrom to any point in L-uzon. It appears that on December 31, 1941, to secure payment of loan evidenced by a promissory r.ote E:xeculcd by Nicolas ConcC>pcion and guaranteed by one Placido E steban in favor of retitioner , Concepcion executed a chattel mortgage covering the above mentioned certificate in favor of petitioner. To sccul'c payment of a subsequent loa n obtained by Concepcion from the Rehabilitation F inance Corporation (now Development Bank of the Philippines) he constituted a !:.ccond mortga\.":e on t he si>-:ne certificate. This second mnrtgage was approved by the res1 fondcnt Commission, subject tc. the mortgagl: lien in favoi· of pet_itioper_ The certificate was later sold to F rnncisco Benitez, J r., who l'Csold it to Rcdi Taxicab Company. Both sales wc1·~ m ade with assumption of the mortgage in favor of the RFC, a nd were also approved provisionally by the Commission, subject tu petitioner's lien. On October 1'0, 1953 petitioner filed an action to foi·eclose the chattel mortgage executed in its favor by Co1 1cepcio11 (Civil Case No. 20853 of the Court of First Instance of Mani\a) in view of thi> failure of the latter and his guarantor, Placido Esteban, to pay their overdue account. While the above case was pe~ding, the RFC also instituted foreclosure proceedings on its second chattel mortgage and, as a result of the decision in its favor therein- l'cndercd, the certificate of public convenience was sold at p ublic auct ion in favor of Amador D. Santos for P24,010.00 on August 31, Hl56. Sant-Os immediately ap1ilicd with the Commission for the a pproval of the sale, and the same was approved on January 26, 1957, subject to the mortgage lien in favor of petitioner. On I.Tune 9, 1958 the Court of First Instance of l\Ianila rendered judgment in Civil Case No. ~0853, amended on August 1, 1958, adjudging Concepcion indebted to petitioner In the sum of 1'15,197.84, with 12'1{ interest thereon from December 2, 1941 until full payment, plus other assessments, and ordered that the certificate of public convenience subject matter of the chattel mortqage be m id at public aucti<Jn in accordance with law. Accordingly, on March 3, 1959 said certificate was sold at public auciion to petitioner, and six days thereafter t-he Sheriff of the City of Manila issued in its favor the correspondng certificate of sale. Thereupon petitioner filed the application mentioned heretofore for the approval of the sale. In the mc.'.lntime and before his death, Amador D. Santos sold and transferred (Commission Case No. 1272231) all his !'ighls and interests in the certificate of public convenience in question in favor of the now respondent A. D. Santos, Inc. who opposed petitioner's a pplication. The iecord discloses that in the course of th~ hearing on :mitl application and after petitioner had rested its ease, the respondent A.D. Santos, Inc., with leave of Court, filed a motion to dismiss based on the following grounds; ' "a) u nder the petitioner's Articles of Incorporat ion, it was not authorized to engage in lhc taxicab business or operate as a common carrier; "b) the decision in Civil Case No. 20853 of the Court of First Instance of Manila did not affect the op1 >0sitor nor its predecessor Amador D. Santos inasmuch as neither ('f them had been implcaded into the case; ·;c) that what was sold to the petition~!' wcrP. only t he 'right<;, interests and participation' of Nicolas Concepcion in the certificate that had been granted to h im which were no longer existing at the time of the sale." On October 18, 1960 the respondent Commission, a fter considering the memoranda submitted bs the parties, rendered the appealed decision sustaining the first g round relied UJlOn in support thereof, namely, that under petitioner's articles of incorporation it had no authority to engage in the taxicab business or operate as a common carrier, and that, as a result, it coulJ not acquire by Jlurchasc the certificate 0 of public convenience refcned to above. Hence the present appeal interposed by petitioner who claims that, in accordance with the Corporation Law ~nd its articles of incorporation, it can acquire by purchase the certificate of public convenience in question, maintaini11g ii1fcrcntially t hat, after acquring said ce1 t ificate, it could make use of it by operating a taxicab business or operate as a common carrier by land. There is no question that a certificate of public convenience granted to a public operator is liable to execution (Raymundo vs. Luneta Motm· Co., 58 Phil. 889) and may be acquired by purchase. The question involved in the present appeal, however, is not only whether, under t he Corporation Law and petitioner's articles of incorporation', it may acquire by purchase a cel'tificatc of public convenience, such as the one in question, but also whether, after !ts acquisition, petitioner may hold the ccrt'.ificate a11d thereunder September 20, 1962 LA WYERS JO URNAL Page 273 operate as a common carrier by land. It is not denied that under Section 13 (5) of the Corporation Law, a corporation created thereunder may purchase, hold, etc., and otherwise deal in such real and personal property as the purpose for which the corporation was formed may permit, and the transaction of its lawful business may reasonably and necessarily 1·equire. The issue here is precisely whether the purpose for which petitioner was organized and the trnnsaction of its lawful business reasonably and necessarily require the purchase and. holding by it of a certificate of public convenience like the on•: in question and thus give it additional authority to opernte thereunder as a common carrier by land. Petitioner claims in this regard that its corporate pmposer are to cany on a general mercantile and ccmmercial busin(!SS, ck., and that it is authorized in its a1·ticles of incorporati0n to 01>ernte und otherwise deal in and concerning automobiles and automobile accessories' business in all its multifarious ramification (petition· er's brief. p. 7\ and to operate, etc. and otherwise dispose of vessels and boal!'l, etc., and lo own and operate steamship and· mailing ships and other floating critft and deal in the same and engage in the Philippine Islands and elsewhere in the transportation of persons, merchandise and chattels by water; all this incidental to the transportation of automobiles (id. pp. 7-S a nd Exhibit B). We find nothing in the legal provision and the prOvisions of petitioner's articles of incorporation relied upon that could justify petitioner's contention in this case. To the contrary, the).· an• precisely the best evidence that it has no authority at all to engage in the business of land transportation and open\te a taxicab service. That it may operate and otherwise deal in automobiles and automobile accessories; thut it may engage i11 the transportation of persons by water does not mean that it may engage in the in the business of land transportation - an entirely different line of business. If it could not thus engage in this line of business, it follows that it may not acquire any cer tificate of public convenience to operate a taxicab service, such as the one in question, because such acquisition would be without purpose nn<l. would have no necessary connection with petitioner';; legitim~tc business. In view of the conclusion we have arrived at on the decisive issue involved in this appeal, we deem it unnecessary to resolve the other incidental questions raised by petitioner. WHEREFORE, the appealed decision in affirmed, with costs. Beng:zon, C.J., Padilla, Concepcion, Barrera, Paredes, and Makalintal, JJ., concun·ed. R-:gala, J., did not take part. VI Ricardo M. Gutiene::, Plaintiff-Avpellant, 1'8. l..ucia Milagros Barretto-Datu, E xecutrix of the Testate Estate of lhe deceased Maria Gerardo Vda. de Ba'r'retto, Defendant-Apvellee, G.R .. Vo. L17175, July 31, 1962, Maka/intal, J. 1. ESTATE OF A DECEASED PERSON; CLAIMS; AS USED I N STATUTE REQUIRING PRESENTATION OF CLAIMS AGAINST A DECEDENT'S ESTATE : CONSTRUED.-The word "claims" as used in statutes requiring the presentation of claims against a decedent's estate is generally constl'ucd to mean debts or demands of a pecuniary nature which have been enforced against the deeeased in his lifetime znd could have been reduced to simple money judgnrnnts; and among these are those founded upon contract. 21 Am. Jur. 579. 2. ID.; CLAIM BASED ON BREACH OF CONTRACT.- The claim in the case at bar is based on contract - specifically, on a breach thereof. It falls squarely under Section 5 of Ruic 87, Rules of Court. 3. ID.; ID.; CONTRACTS BY DECEDENT BROKEN DURING HIS LIFETIME; PERSONAL REPRESENTATIVE LIABILITY FOR BREACH OUT OF THE ASSETS.- Upon all contracts by the d(!ccdent broken during his lifetime, even though they were personal to the decedent in liability. the representative is answerable for the breach out of the assets. 3 Schouler on Wills, Exeeutors and Administrntors, 6th Ed., 2395. 4. ID.; ID.; PRESENTATION OF CLAIM FOR BREACH OF A COVENANT I N A DEED or~ DECEDENT.- A claim for breach of a covenant in a deed of the decedent must be presented under a statute requiring such presentment of all claims grounded on contract. 5. EXECUTOR OR ADMINISTRATOR; ACTIONS T HAT MAY BE I NSTITUTED AGAINST E ITHER.- The only actions that may be instituted against the executor or administrator are t hose to recover real or personal prope1·ty from the estate, or to enforce a lien thereon, and actions to recover damages for an injury lo person or property, real or personal. Rule 88, section I. The instant suit is not one of them. DE CISION Ricardo !\"I. Gutierrez appeals from the orders of the Court of First Instance of Rizal (l) dismissing his complaint against Lucia i\Iilagrns Barretto-Datu, as executrix of the estate of the deceased Maria Gerardo Vda. de Barretto, and (2) denying his motion for reconsideration of the dismissal. The l'elcvant facts alleged by appellant are as follows: In 1940 Maria Gerardo vda. de Barretto, owner of 371 hectares of fishpond lamls in Pampanga, lease(\ the same to appellant Gutierrez for a term to expi1·e· on May 1, Hl47. On Novcmbc?· l , 1941, pursuant to a decision of the Department of Public Works rendered after investigation, the dikes of the fishfonds were opened at several poin~s. resulting in their destruction and in the loss o( great quantities of fish inside, to the damage and prejudice of the lessee. In 195G, the lessot· having died in 1948 and the corresponding testate prnceeding to settle her estate havi11g been opened (Sp. Proc. No. 5002, C.F. I., Manila), Gutierrez filed a claim for two items: first, for the sum of 1'32,000.00 representing adva?1ce i en ta ls he had paid to the decedent (the possession of the leased JlrOpc1ty, it is alleged, having been returned to her after the opening of the dikes ordered by the government); and second, for the sum of PG0,000.00 as damages in the concept of unearned profits, that is, profits which the claima11t failed to realize bec::rnse of the breach of the lease contract allegedly committed by the lessor. On J une 7, 1957 appellant commenced the instant ordin~l'y civil action in the Court of F irst Instance Rizal (Quezon C!t:1 branch) against the executrix of the testate estate for th€: recovery of thr same amount of PG0,000.00 referred to as tl1e second item claimed in the administration preceding. The complaint specifically charges the decedent Maria Gerardo Vda. de Barretto, as lessor, with having violated a warranty in the lease contract against any damages the lessee might suffer by reason of the government that several rivers and creeks of t he public domain were included in the fishponds. In \July 1957 appellant amended his claim in the testate proceeding by withdrawing therefrom the item of PG0,000.00, lcavini;· only the one for refund of advam:e rentals in the sum of P32,000.00. After the issues were joined in the present case with the filing of the defendant's answer, together with a counterclaim, and after two postponements of the tiial were granted, the second of which was in January 1958, the court dismissed the action for aban· donmcnt by both parties in an order dated July 31, 1959. Appellant moved to reconsider; a ppellee opposed the motion ; and after considerable written argument the court , on March 7, 1960, denied the motion for reconsideration on the ground that the claim should have been prosecuted in the testate proceeding and not by ordinary civil action. Appellant submits his case on this Jone legal question: whether or not his claim for damages based on Un!·ealized profits is a money claim against the cstste of the deceased Maria Gerardo vda. de Barretto within the purview of Rule 87, Section 5. This section states: "SEC. 5. Claims which must be fi)ed under the 11otice~ If not filed, barred; cxccption.-All claims for money ag.'.linst Page 274 LA WYERS JOURNAL Scptembel' 30, HlG2
pages: 273-274