LUNETA MOTOR

COMPANY V. A.D.
SANTOS, INC.
GR No. L-17716
July 31, 1962

The Facts

Luneta Motor Co.

Nicolas Concepcion

Certificate of Public
Convenience
To operate 27 taxicabs in
Manila and to any point
in Luzon

A.D Santos, Inc.

 Luneta Motor Company then filed an application for the

approval of sale in its favor of the CPC before the Public

Service Commission.
AD Santos Inc. opposed the application of Luneta Motor,
primarily arguing that Luneta Motor Co. is not
authorized to engage in the taxicab business or
operate as a common carrier.

Ruling of the Commission

DENIED Luneta Motors application.
Under its Articles of Incorporation, it had no authority to

engage in the taxicab business or operate as a common

carrier.
As a result, it could not acquire by purchase the certificate
of public convenience.

Issues
a) Whether Luneta Motor Co. may acquire by purchase a

certificate of public convenience

b) Whether, after its acquisition, Luneta Motor Co. may
hold the certificate and thereunder operate as a
common carrier.

Supreme Court
No.
While it is not denied that under the Corporation

Law, a corporation may purchase, hold, and

otherwise deal in such real and personal property,
this is qualified by for the purpose for which the
corporation was formed may permit and the
transaction of its lawful business may reasonably
and necessarily require.

 There is thus a need to determine whether the

purpose for which Luneta Motor was organized

and the transaction of its lawful business
reasonably and necessarily require the purchase
and holding by it of a Certificate of Public
Convenience and thus, give it additional authority
to operate as a common carrier.

Purpose of Luneta Motor

Its corporate purposes are to carry on a general mercantile
and commercial business
Operate and deal in and concerning automobile and
automobile accessories business in all its multifarious
ramifications
To operate and otherwise dispose of vessels and
boats
To own and operate steamships and sailing ships and
other floating craft and deal in the same
Engage in the Philippines and elsewhere in the
transportation of persons, merchandise and chattels
by WATER.

 The fact that Luneta Motor may engage in the

transportation of persons by water does not mean

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 a certificate of public
convenience to operate a taxicab service because
such acquisition would be without purpose and would
have no necessary connection with Luneta Motors
legitimate business.