Cogeo-Cubao Operators and Drivers Association vs. Court of Appeals

A certificate of public convenience is a property right that, while subject to state regulation and not conferring an exclusive franchise over public highways as against the government, is shielded against unauthorized interference by third persons; its invasion entitles the holder to nominal damages under Article 2222 of the Civil Code even absent proof of actual loss.

Respondent Lungsod Silangan Transport Services Corp., Inc. was granted a certificate of public convenience in January 1983 to operate a jeepney service on the Cogeo-Cubao route; no authorized operators then existed on that line. Petitioner COGEO-CUBAO Operators and Drivers Association was registered with the Securities and Exchange Commission in October 1985 as a non-stock, non-profit organization of jeepney owners and drivers, formed in part to address grievances about an alleged practice of requiring owners to execute deeds of sale in favor of the corporation and to protect members from extortion by traffic officers. Tensions heightened after respondent adopted a “Bandera” system that charged drivers a fee to queue for passengers. On November 11, 1985, the association, led by Romeo Oliva, set up a human barricade and assumed the dispatching of jeepneys on the route, provoking the suit for damages.

• The Certificate: Respondent Lungsod Silangan Transport Services Corp., Inc. was granted a certificate of public convenience on January 24, 1983, in BOT Case No. 82-565, to operate a public utility jeepney service on the Cogeo-Cubao route.
• Petitioner Association: Petitioner COGEO-CUBAO Operators and Drivers Association was registered with the Securities and Exchange Commission on October 30, 1985, as a non-stock, non-profit organization. Its stated purpose was to represent members in contracts and agreements concerning vehicle ownership and related interests; it admitted it had no authority to transport passengers.
• The Bandera System and Grievance: Respondent cooperative adopted Board Resolution No. 9 implementing a “Bandera” system, where a member was allowed to queue for passengers upon purchase of a twenty-peso ticket, the proceeds being earmarked for Christmas programs and driver benefits. Association members also protested an alleged practice of requiring jeepney owners to execute deeds of sale in favor of the corporation to document ownership under its certificate.
• The Takeover: On November 11, 1985, acting through its president Romeo Oliva and other members, petitioner formed a human barricade at St. Mary’s Street, took over the dispatching of passenger jeepneys, and assumed the role of a common carrier on the Cogeo-Cubao route. This unauthorized operation lasted about ten days and paralyzed respondent’s usual dispatch activities and earnings.
• Defense: Petitioner’s answer denied any intent to compete with respondent and asserted that the association was formed primarily to protect drivers from extortion by traffic officers and to contest the deed-of-sale requirement. The trial court nonetheless found that petitioner did in fact usurp the transport operations without authority from the Public Service Commission.

• No Invasion of a Property Right: Petitioner contended that a certificate of public convenience does not confer any proprietary right in the route or over public highways, citing Luque v. Villegas, and therefore its action could not constitute an invasion of a property right that would support an award of damages.
• Legitimate Exercise of Constitutional Rights: Petitioner argued that the association was formed to protect members from abusive traffic officers and to redress grievances arising from the deed-of-sale requirement; the members’ concerted action was a valid exercise of their constitutional freedoms of association and petition.
• Absence of Competition: Petitioner maintained that the organization was never intended to compete with respondent as a common carrier; the barricade and dispatching were done solely to advance members’ collective interests, not to seize the route.

• Certificate as Protected Property: Respondent invoked the rule that a certificate of public convenience constitutes property in the broad sense and, as against third persons, its holder enjoys a right to operate that cannot be interfered with without due process of law; the association’s forcible assumption of dispatching directly invaded that right.
• Unlawful Usurpation: Respondent pointed out that petitioner association had no franchise or certificate of public convenience, yet it unilaterally took over the dispatching of jeepneys on the route, effectively halting respondent’s operations for ten days.
• Entitlement to Nominal Damages: Respondent argued that even if exact pecuniary loss could not be proven, the invasion of its property right warranted at least nominal damages under Article 2222 of the Civil Code, because the acts were contrary to law, public policy, and morals under Article 21.

• Property Right and Nominal Damages: Whether petitioner association’s unauthorized takeover of jeepney dispatching on the Cogeo-Cubao route constituted an invasion of respondent’s property right under its certificate of public convenience, thereby entitling respondent to nominal damages under Articles 2221 and 2222 of the Civil Code despite the absence of proven actual loss.

• Property Right and Nominal Damages: The takeover amounted to an invasion of respondent’s property right, justifying nominal damages. A certificate of public convenience is a species of property with considerable material value, recognized as such under the Public Service Law and jurisprudence (Raymundo v. Luneta Motor Co.). While it is impressed with public interest and subject to government control, and does not vest the holder with proprietary right in the route as against the State (Luque v. Villegas), it remains a protected right as against other persons and unauthorized operators. The holder may maintain an action against those who invade the authority it confers (A.L. Ammen Transportation Co. v. Golingco). The trial court’s factual findings, affirmed by the Court of Appeals, established that petitioner forcibly took over the operations for ten days without any authorization, thereby willfully causing injury in a manner contrary to morals, good customs, or public policy within the contemplation of Article 21. Because a property right was invaded, nominal damages were properly awarded under Article 2222, which allows such damages in every case where a property right has been violated, independently of proof of actual pecuniary loss.

• Certificate of Public Convenience as Property — Under the Public Service Law, a certificate of public convenience is an authorization possessing material value and is considered property capable of being sold (Raymundo v. Luneta Motor Co.). It is, however, impressed with public interest and must submit to government control for the common good (Pangasinan Transportation Co. v. PSC). As against the State, it does not confer a proprietary right or franchise in the route or on the public highways (Luque v. Villegas). In contrast, as against other persons and public utilities, it is a property right that cannot be taken or interfered with without due process; its holder may maintain actions against those who invade the right or operate in unauthorized competition (A.L. Ammen Transportation Co. v. Golingco).
• Nominal Damages for Invasion of Property Right — Article 2222 of the Civil Code mandates that nominal damages may be awarded in every obligation arising from any source listed in Article 1157, or in every case where any property right has been invaded. No proof of actual loss is required; the award vindicates the violation of the right. The doctrine was applied to the forcible takeover of dispatch operations, as the invasion of the certificate holder’s property right entitled it to nominal damages even though actual damages were not sufficiently proved.

• “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.”
• “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.”
• “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.”
• “While there is no question that petitioner can exercise their constitutional right to redress their grievances with respondent Lungsod Corp., the manner by which this constitutional right is to be exercised should not undermine public peace and order nor should it violate the legal rights of other persons.”

• Raymundo v. Luneta Motor Co., 58 Phil. 889 — Followed for the principle that a certificate of public convenience has material value, is property, and may be sold.
• Pangasinan Transportation Co. v. Public Service Commission, 70 Phil. 221 — Followed for the rule that a certificate of public convenience, though private property, is affected with public interest and subject to State control.
• Luque v. Villegas, L-22545, November 28, 1969, 30 SCRA 409 — Distinguished; the Court clarified that while the certificate does not grant proprietary right in the route or public highways as against the State, it is nonetheless protected against interference by third persons.
• A.L. Ammen Transportation Co. v. Golingco, 43 Phil. 280 — Relied on as authority that a holder of a certificate of public convenience may maintain actions against those who invade the rights conferred by the certificate, including unauthorized operators.

• Public Service Law (Commonwealth Act No. 146) — Defined a certificate of public convenience as the authorization for public service operations not requiring a franchise; the Court drew on this framework in classifying the certificate as property of substantial value.
• Article 21, New Civil Code — Applied as the basis of liability for willfully causing loss or injury in a manner contrary to morals, good customs, or public policy; the forcible takeover fell within its scope.
• Article 2221, New Civil Code — Defined nominal damages as those awarded in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, not for the purpose of indemnifying any loss.
• Article 2222, New Civil Code — Provided the direct statutory ground for the award; the Court held that the invasion of respondent’s property right triggered the authority to grant nominal damages.
• Article 1157, New Civil Code — Referenced in Article 2222 as the enumeration of sources of obligations, underscoring that nominal damages may arise from any obligation source.

Narvasa, C.J., Cruz, and Griño-Aquino, JJ., concurred. Justice Bellosillo took no part.