Photo from Pexels | Ja Kubislav
This article is provided for general informational purposes only and does not create, nor shall it be construed as creating, a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. For advice on specific legal concerns, you are encouraged to engage the services of a qualified lawyer. You may also directly consult Alburo Alburo and Associates Law Offices for proper guidance tailored to your situation.
The views and information presented herein are based on the laws, rules, and jurisprudence prevailing at the time of writing. They do not take into account subsequent legal developments and should not be relied upon as a substitute for professional legal advice.
AT A GLANCE:
A local government unit may establish bus, vehicle stops, and terminals or regulate the use of the same by privately-owned vehicles which serve the public; however, it cannot compel PUVs to utilize a public terminal and prevent them from using their private terminal in the absence of a clear showing of a reasonable necessity for it. While local government units have authority under the General Welfare Clause, the police power granted to them must always be exercised with utmost observance of the rights of the people to due process and equal protection of the law.
On August 1, 2008, the Sangguniang Panlungsod of Koronadal City approved and passed Ordinance No. 9, Series of 2018, which created the City of Koronadal Integrated Transport Terminal Complex (CKITTC). The CKITTC was meant to provide efficient transportation facilities so as to reduce traffic congestion and pollution from vehicular emissions in the city’s business center. It was also aimed at raising revenues for the operation of the City of Koronadal in delivering public services, and to promote general welfare.
The Ordinance was published on October 1, 2018 and took effect 15 days later.
Yellow Bus Lines, Inc., a duly franchised common carrier engaged in the land transportation business,, has its own private terminal along the national highway of Koronadal City. When the Ordinance was implemented, checkpoints were set up on the national highway. All buses belonging to Yellow Bus that were traveling along their franchised routes on the national highway were blocked at the checkpoints and rerouted to the CKITTC, where they were required to pay a terminal fee of PHP 70.00 for each entry.
This prompted Yellow Bus to file a complaint for injunction with a preliminary prohibitory injunction and prayer for temporary restraining order against Koronadal City et al., arguing that the implementation of the Ordinance violated its right to use its own private terminal. It further contended that the diversion road conditions were narrow and had limited clearance, causing damage to their buses, additional travel time, and longer interval between the dispatch of the buses.
Koronadal City et al. countered that the enactment of the Ordinance was in the exercise of the local government unit’s power to regulate the use of streets and traffic, as well as to promote the general welfare of its constituents and to raise revenues. As such, the Ordinance applies to all public utility vehicles (PUVs), including Yellow Bus.
The Regional Trial Court declared the implementation of the Ordinance premature and illegal as far as Yellow Bus is concerned, and it ordered the issuance of a writ of injunction directing Koronadal City et al. to cease and desist from further implementing the Ordinance insofar as Yellow Bus is concerned. It also held that the use of the CKITTC is not compulsory or mandatory, but instead, PUVs may only choose to utilize the facilities of the CKITTC, subject to terminal fees.
The Court of Appeals affirmed the RTC’s ruling. It adopted that the Ordinance only governed, regulated, prescribed, and supervised the CKITTC. In this regard, the forcible re-routing of Yellow Bus’s buses was not a legal exercise of Koronadal City’s police power and power to raise revenue.
The issue in this case is whether the City of Koronadal may compel Yellow Bus Lines to use the City of Koronadal Integrated Transport Terminal Complex and prevent it from using its own private terminal under Ordinance No. 9, Series of 2018.
The Supreme Court denied the petition.
For an injunction to prosper, two requisites must concur: (1) there must be a right to be protected and (2) the acts against which the injunction is to be directed are violative of said right.
The Court acknowledged the existence of the Yellow Bus Lines’ constitutionally protected right to own its private terminal, which it has the right to acquire, use, and dispose of.
For an ordinance to be valid, it must be enacted within the local government unit’s corporate powers and passed according to the prescribed procedures under the law. It (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.
In this case, requiring all PUVs to utilize the CKITTC cannot be considered as reasonably necessary to alleviate traffic congestion and ensure safety and order. Furthermore, it was not shown that the CKITTC is the only solution to the problem nor did the petitioners prove that the city had explored other measures to solve the issue.
Moreover, the Court emphasized that the ordinance itself did not require the mandatory use of the CKITTC. Since there was no prohibition against the use of private terminals under the Ordinance, petitioners have no basis to block and order the rerouting of the buses of respondents to the CKITTC.
Consequently, preventing respondents from using its private terminals and charging it for the use of the CKITTC are outright oppressive and confiscatory. It is a violation of respondent’s property rights, which cannot be allowed under the guise of performing the local government unit’s duty to its inhabitants under the general welfare clause.
The Court reiterated that local government units cannot, even in the exercise of police power, compel public utility vehicles to utilize a public terminal and prevent them from using their private terminals absent a clear showing that such measure is reasonably necessary and not unduly oppressive.
Case: City of Koronadal vs. Yellow Bus Lines, Inc. (G.R. No. 265769 | August 12, 2025)
Click here to subscribe to our newsletter
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.
All rights reserved.