G.R. No. L-22027. July 31, 1973.
DEMETRIO CARPENA, petitioner, vs. MELQUIADES SALISI, LEONCIO OPULENCIA, and LEONOR LAT, respondents.

FACTS

Petitioner Demetrio Carpena applied with the Public Service Commission (PSC) for a certificate of public convenience to install and operate a 20-ton ice plant in Cabuyao, Laguna, to service several surrounding municipalities. Existing operators, respondents Melquiades Salisi (Calamba) and Leoncio Opulencia and Leonor Lat (Tanauan), opposed, claiming their services were adequate and that a new plant would cause ruinous competition. While Carpena’s application was pending, opponent Salisi himself filed applications to increase his own plant’s capacity and to install an ice storage facility in Cabuyao, citing public necessity. The PSC granted Salisi’s applications but denied Carpena’s motions for a joint hearing on the common issue of public need.
The PSC’s First Division, after hearing, rendered a decision on January 25, 1963, granting Carpena a certificate for a 15-ton ice plant. It found an existing shortage and public necessity based on evidence, including the admitted needs cited in Salisi’s own successful applications. However, upon a motion for reconsideration filed by the opponents, the PSC En Banc, by a 4-2 vote, issued an order on August 15, 1963, reversing the First Division and denying Carpena’s application. This En Banc order did not dispute or set aside the factual findings of public necessity made in the original decision.

ISSUE

Whether the Public Service Commission En Banc acted with grave abuse of discretion or arbitrarily in reversing the First Division’s decision granting Carpena’s application without questioning its factual basis of public necessity and without citing any contrary evidence to justify the denial.

RULING

Yes. The Supreme Court set aside the PSC En Banc’s order and reinstated the First Division’s decision granting Carpena’s application. The Court ruled that the original decision was firmly grounded on factual findings which established public need and necessity for the additional ice plant service. These findings were supported by the record, including the very evidence presented by opponent Salisi in his own successful applications, where he had asserted an urgent public demand and insufficient ice supply in the same municipalities.
The En Banc’s split-majority order, which reversed the grant without questioning the underlying factual conclusions of public necessity or reciting any contrary facts or circumstances, was arbitrary and constituted a grave abuse of discretion. A reviewing body cannot capriciously disregard the factual findings of the division that heard the evidence, especially when those findings are supported by substantial evidence. The legal logic hinges on the principle that administrative decisions must be based on evidence on record. Since the En Banc order provided no factual or legal basis to overturn the established finding of public necessity, its reversal was invalid. The Court affirmed the grant of the certificate of public convenience to Carpena.