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Philcomsat vs.

Alcuaz
180 SCRA 218; G.R. No.84818; 18 Dec. 1989
Facts:
By virtue of Republic Act No. 5514, PHILCOMSAT was granted "a franchise to establish,
construct, maintain and operate in the Philippines, at such places as the grantee may select,
station or stations and associated equipment and facilities for international satellite
communications." Under this franchise, it was likewise granted the authority to "construct and
operate such ground facilities as needed to deliver telecommunications services from the
communications satellite system and ground terminal or terminals."
PHILCOMSAT filed with respondent NTC an application for authority to continue operating its
existing facilities, to render the services it was then offering, and to charge the rates it was then
charging. Such application was granted but it directed the petitioner to charge modified reduced
rates through a reduction of fifteen percent (15%) on the present authorized rates.
PHILCOMSAT filed a petition seeking to annul and set aside the order which reducedthe rate for
being violative of the constitutional prohibition against undue delegation of legislative power and
a denial of procedural, as well as substantive, due process of law. He assert that but had
petitioner been given an opportunity to present its side before the order in question was issued,
the confiscatory nature of the rate reduction and the consequent deterioration of the public
service could have been shown and demonstrated to respondents. Petitioner argues that the
function involved in the rate fixing-power of NTC is adjudicatory and hence quasi-judicial, not
quasi- legislative; thus, notice and hearing are necessary and the absence thereof results in a
violation of due process
Issue:
Whether or not the questioned order violates procedural due process for having been issued
without prior notice and hearing

Whether or not the rate reduction it imposes is unjust, unreasonable and confiscatory, thus
constitutive of a violation of substantive due process.
Ruling:
Where the function of the administrative agency is legislative, notice and hearing are not
required by due process of law, but where an order applies to a named person, as in the instant
case, the function involved is adjudicatory. Petitioner is entitled to cross-examine the maker of
report, and to introduce evidence to disprove the contents thereof and/or explain or complement
the same, as well as to refute the conclusion drawn therefrom by the respondent. In other

words, in making said finding of fact, respondent performed a function partaking of a quasijudicial character, the valid exercise of which demands previous notice and hearing.
Any regulation which operates as an effective confiscation of private property or constitutes an
arbitrary or unreasonable infringement of property rights is void, because it is repugnant to the
constitutional guaranties of due process and equal protection of the laws. The court found the
order unreasonable and improvident. Respondent failed to adduce evidence how it arrived at
the prescribe rates.