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III.

Regulation of Public Utilities


A.

Authority to Operate

Albano vs Reyes
F:

On 20 April 1987, the Phil. Ports Authority (PPA) adopted a resolution


directing mgmt. to prepare the Invitation to Bid and all relevant bidding
documents necessary for the public bidding of the development, mgmt.,
and operation of the Manila Intl. Container Terminal (MICT) and
authorized the Board Chairman Secretary Reyes to oversee and
implement the project.
Secretary Reyes created a 7-man MICT Bidding Committee to evaluate
all bids and recommend to the Board the best bid. The PPA published
the Invitation to Bid with the reservation that it had the right to reject any
bid and to accept such bid it may deem advantageous to the govt.
Seven companies submitted bids. The Committee recommended that
the contract be awarded to Intl. Container Terminal Services (ICTSI) on
the ground that it offered the best technical and financial proposal.
Secretary Reyes awarded the contract to ICTSI. Before the contract
could be signed, two cases were filed questioning the legality or
regularity of the bidding. The first was a special action for prohibition
with prelim injunction filed by Alo, a concerned taxpayer. The second
was a civil case for prohibition with prayer for TRO filed by Sharp Co.
which actively participated in the bidding.
The President approved the proposed MICT contract. The PPA and
ICTFSI perfected the contract.
Rodolfo Albano, a member of the House of Representatives filed the
present case assailing the award of the contract on the ground that
since the MICT is a public utility, it needs a legislative franchise before it
can legally operate as a public utility.

Issue: WON a legislative franchise is necessary.


Held : NO. Petition dismissed.

A franchise specially granted by Congress is not necessary for the


operation of the MICT by a private entity.
A contract entered into by the PPA and such entity is substantial

compliance with the law. 1. Executive Order No. 30 authorized the PPA
to take over, manage and operate the MICT in accordance with PD 857
(Revised Charter of the PPA). PD 857 expressly empowers the PPA to
provide services within Port Districts "whether on its own, by contract or
otherwise."
Therefore, under EO 30 and PD 857, the PPA may contract with ICTSI
for the mgmt., operation and devt. of the MICT.
2. Even if the MICT be considered a public utility or a public service on
the theory that it is a wharf or a dock as contemplated by the Public
Service Act, its operation would not necessarily call for a legislative
franchise. Legislative franchises are not required before each and
every public utility may operate. The law has granted certain
administrative agencies the power to grant licenses for or to authorize
the operation of certain public utilities.
That the Consti provides that the issuance of a franchise for the
operation of a public utility shall be subject to amendment,
alteration or repeal by Congress does not necessarily imply that
only Congress has the power to grant such authorization. There
are several laws granting specified agencies in the Executive Dept. the
power to issue such authorization for certain classes of public utilities.
[ 1. LTFRB wrt Certificates of Public Convenience authorizing the
operation of public land transportation services provided by motorized
vehicles; 2. ERB wrt operation of electric power utilities and services
except electric coops]
Reading EO 30 and PD 857 together, the PPA has been empowered to
undertake by itself or to authorize the operation and mgmt. of the MICT
by another by contract. The latter power having been delegated to the
PPA, a legislative franchise is no longer necessary. In this case, the
PPA's contracting with ICTSI is wholly within its jurisdiction and powers.
3. The award of the contract to ICTSI is all the authorization that is
necessary. The award made by the PPA and the President enjoys the
presumption of validity and regularity of official action. There is no
evidence to the contrary.
4. Albano has standing to assail the contract. While the expenditure of
public funds may not be involved under the contract, public interest is
definitely involved considering the important role of the MICP in the
economic devt. of the country and the magnitude of the amount
involved. He has sufficient standing since a public right (disclosure
provision) is sought to be enforced.
5. There in no conflict among the 3 branches of govt. The Executive
Dept. has not contravened an act of Congress. There is no usurpation

of powers of another branch.


6. The determination of the winning bid should be left to the sound
judgment of the PPA. It is in the best position to evaluate the bids. It has
the technical expertise which neither the Court nor Congress has. No
abuse of discretion has been shown.

Ratio:

PLDT vs. NTC


1990
Facts:

1.

2.
3.

4.

On June 22, 1958, RA No. 2090 was enacted granting ETCI (formerly
FACI) a franchise to establish radio stations for domestic and
transoceanic telecommunications.
On May 13, 1987, ETCI filed an application with NTC to install,
establish, operate, and maintain a Cellular Mobile Telephone System
and an Alpha Numeric Paging System in Metro Manila and Southern
Luzon, with a prayer for provisional authority to operate Phase A of its
proposal within Metro Manila. Denying PLDTs motion to dismiss on the
following grounds:
ETCI is not capacitated or qualified under its legislative franchise to
operate a system-wide telephone or network of telephone service such
as the one proposed in its application;
ETCI lacks the facilities needed and indispensable to the successful
operation of the proposed cellular mobile telephone system;
PLDT has its pending application with NTC Case No 86-86, to install
and operate a Cellular Mobile Telephone System for domestic and
international service not only in Manila but also in the provinces and
that under the prior operator or protection of investment doctrine,
PLDT has the priority preference in the operation of such service; and
The provisional authority, if granted, will result in needless,
uneconomical, and harmful duplication, among others.

NTC denied PLDTs motion for reconsideration and maintained its ruling that
liberally construed, applicants franchise carries with it the privilege to operate
and maintain a cellular mobile telephone service. Subsequently, PLDT alleged
essentially that the interconnection ordered was in violation of due process and
that the grant of provisional authority as jurisdictionally and procedurally infirm.
Issue:

Whether or not PLDTs petition has merit


Held:

No.

The decisive considerations are public need, public interest, and the
common good. Those were the overriding factors which motivated NTC
in granting provisional authority to ETCI. Article II, Section 24 of the
1987 Constitution, recognizes the vital role of communication and
information in nation building.
o
It is likewise a State policy to provide the environment for the
emergence of communications structures suitable to the
balanced flow of information into, out of, and across the
country (Article XVI, Section 10).
o
A modern and dependable communications network rendering
efficient and reasonably priced services is also indispensable
for accelerated economic recovery and development. To
these public and national interests, public utility companies
must bow and yield.
o
Despite the fact that there is a virtual monopoly of the
telephone system in the country at present. Service is sadly
inadequate.
o
There is a unanimous cry to hasten the development of a
modern, efficient, satisfactory and continuous
telecommunications service not only in Metro Manila but
throughout the archipelago

Ernesto Francisco, Jr. v. Toll Regulatory Board


2010
Facts:

President Marcos issued PD 1112 authorizing the establishment of toll


facilities on public improvements. It acknowledged the huge financial
requirements and the need to tap the resources of the private sector to
implement the governments infrastructure programs.
PD 1112 allowed the collection of toll fees for the use of certain
public improvements that would allow a reasonable rate of return on
investments. The same decree created the Toll Regulatory Board,
vesting it with the power to enter into contracts for the construction,
maintenance, and operation of tollways, grant authority to operate a toll
facility, issue the necessary Toll Operation Certificate (TOC) and fix
initial toll rates, and adjust it from time to time after due notice and
hearing.
PD 1113 was issued granting the Philippine National Construction
Corporation for a period of 30 years, a franchise to operate toll facilities

in the North Luzon and South Luzon Expressways. Subsequently, PD


1894 was issued further granting the PNCC a franchise over the Metro
Manila Expressway and the expanded delineated NLEX and SLEX.
Then came the 1987 Constitution with its franchise provision. In 1993,
the Government Corporate Counsel held that the PNCC may enter into
a joint venture agreement with private entities without going into public
bidding.
On February 1994, the DPWH together with other private entities
executed a MOU to open the door for entry of private capital in the
Subic and Clark extension projects. PNCC entered into a financial and
technical JVAs with entities for the toll operation of its franchised areas.
Several Supplemental Toll Operation Agreements (STOA) were entered
for the South Metro Manila Skyway, NLEX Expansion, and South Luzon
Expressway Projects.
Petitioners seek to nullify the various STOAs and assail the
constitutionality of Sections 3(a and d) of PD 1112 in relation to Section
8(b) of PD 1894. Insofar as they vested the TRB the power to issue,
modify, and promulgate toll rate changes while given the ability to
collect tolls.

Issue:
Whether or not the TRB may be empowered to grant authority to operate the
toll facility/system.
Ruling:

The TRB was granted sufficient power to grant a qualified person


or entity with authority to operate the toll facility/system. By explicit
provisions of the PDs, the TRB was given power to grant
administrative franchise for toll facility projects.

The limiting thrust of Article 11, Section 11 of the Constitution on


the grant of franchise or other forms of authorization to operate
public utilities may, in context, be stated as follows: (a) the grant
shall be made only in favor of qualified Filipino citizens or
corporations; (b) Congress can impair the obligation of franchises,
as contracts; and (c) no such authorization shall be exclusive or
exceed fifty years.

Under the 1987 Constitution, Congress has an explicit authority to


grant a public utility franchise. However, it may validly delegate
its legislative authority, under the power of subordinate
legislation, to issue franchises of certain public utilities to
some administrative agencies.
Dispositive:
The petitions in G.R. Nos. 166910 173630, and 169917 are hereby DENIED
for lack of merit. The petition in G.R. No. 183599 is GRANTED.
NAPOCOR v. CA

1997
FACTS

Cagayan Electric and power Light Company (CEPALCO) was


enfranchised by Republic Act No. 3247 "to construct, maintain and
operate an electric light, heat and power system for the purpose of
generating and/or distributing electric light, heat and/or power for sale
within the City of Cagayan de Oro and its suburbs" for fifty (50) years.

Presidential Decree No. 243, issued on July 12, 1973, created a "body
corporate and politic" to be known as the Philippine Veterans
Investment Development Corporation (PHIVIDEC) vested with authority
to engage in "commercial, industrial, mining, agricultural and other
enterprises" among other powers and "to allow the full and continued
employment of the productive capabilities of and investment of the
veterans and retirees of the Armed Forces of the Philippines."

On August 13, 1974, Presidential Decree No. 538 was promulgated to


create the PHIVIDEC Industrial Authority (PIA), a subsidiary of
PHIVIDEC, to carry out the government policy "to encourage, promote
and sustain the economic and social growth of the country and that the
establishment of professionalized management of well-planned
industrial areas shall further this objective." Under Sec. 3 of P.D. No.
538, the first area for development shall be located in the municipalities
of Tagoloan and Villanueva. This area forms part of the PHIVIDEC
Industrial Estate Misamis Oriental (PIE-MO).

As manager of PIE-MO, PIA granted the Ferrochrome Philippines, Inc.


(FPI) and Metal Alloys Corporation (MAC) authority to operate in its
area of development.

On July 6, 1979, PIA granted CEPALCO a temporary authority to retail


electric power to the industries operating within the PIE-MO. The
Agreement executed by PIA and CEPALCO authorized CEPALCO "to
operate, administer, construct and distribute electric power within the
PHIVIDEC Industrial Estate, Misamis Oriental, such authority to be coextensive with the territorial jurisdiction of PHIVIDEC Industrial Estate,
as defined in Sec. 3 of P.D. No. 538 and shall be for a period of five (5)
years, renewable for another five (5) years at the option of CEPALCO."
The parties provided further that:

9. At the end of the fifth year, or at the end of the 10th year, should this Agreement be thus renewed,
PIA has the option to take over the operation of the electric service and acquire by purchase
CEPALCO's assets within PIE-MO. This option shall be communicated to CEPALCO in writing at least
24 months before the date of acquisition of assets and takeover of operation by PIA. Should PIA
exercise its option to purchase the assets of CEPALCO in PIE-MO, PIA shall respect the right of
ownership of and maintenance by CEPALCO of those assets inside PIE-MO not covered by such
purchase. . . .

According to PIA, CEPALCO proved no match to the power demands of


the industries in PIE-MO that most of these companies operating
therein closed shop. Impelled by a "desire to provide cheap power
costs to power-intensive industries operating within the Estate," PIA
applied with the National Power Corporation (NPC) for direct power
connection which the latter in due course approved. One of the
companies which entered into an agreement with the NPC for a direct
sale and supply of power was the Ferrochrome Phils., Inc. (FPI).
Contending that the said agreement violated its right as the authorized
operator of an electric light and power system in the area and the
national electrification policy, CEPALCO filed Civil Case No. Q-35945, a
petition for prohibition, mandamus and injunction before the Regional
Trial Court of Quezon City against the NPC. Notwithstanding NPC's
claim that it was authorized by its Charter to sell electric power "in bulk"
to industrial enterprises, the lower court rendered a decision on May 2,
1984, restraining the NPC from supplying power directly to FPI upon
the ground that such direct sale, supply and delivery of electric power
by the NPC to FPI was violative of the rights of CEPALCO under its
legislative franchise. Hence, the lower court ordered the NPC to
"permanently desist" from effecting direct supply of power to the FPI
and "from entering into and/or implementing any agreement or
arrangement for such direct power connection, unless coursed through
the power line" of CEPALCO.

ISSUE
Whether or not the NPC may supply power directly to PIA in the PIE-MO area
where CEPALCO has a directly franchise.
RULING

Petitioner PIA asserts that it may receive power directly from the NPC
because it is a public utility. It avers that P.D. No. 538, as amended,
empowers PIA "as and to be a public utility to operate and serve the
power needs within PIE-MO, i.e., a specific area constituting a small
portion of petitioner's franchise coverage," without, however, specifying
the particular provision which so empower PIA.

A "public utility" is a business or service engaged in regularly


supplying the public with some commodity or service of public
consequence such as electricity, gas, water, transportation,
telephone or telegraph service. The term implies public use and
service.

Petitioner PIA is a subsidiary of the PHIVIDEC with "governmental and


proprietary functions." Sec. 4 of P.D. No. 538 specifically confers upon
it the following powers:

a. To operate, administer and manage the PHIVIDEC Industrial Areas and other areas which shall
hereafter be proclaimed, designated and specified in subsequent Presidential Proclamation; to
construct acquire, own, lease, operate and maintain infrastructure facilities, factory buildings,
warehouses, dams, reservoirs, water distribution, electric light and power systems,
telecommunications and transportation networks, or such other facilities and services necessary or
useful in the conduct of industry and commerce or in the attainment of the purposes and objectives of
this Decree; (Emphasis supplied.)

Clearly then, the PIA is authorized to render indirect service to the


public by its administration of the PHIVIDEC industrial areas like the
PIE-MO and may, therefore, be considered a public utility. As it is
expressly authorized by law to perform the functions of a public utility, a
certificate of public convenience, as suggested by the Court of Appeals,
is not necessary for it to avail of a direct power connection from the
NPC. However, such authority to be a public utility may not be
exercised in such a manner as to prejudice the rights of existing
franchisees. In fact, by its actions, PIA recognized the rights of the
franchisees in the area.

Accordingly, in pursuit of its powers "to grant such franchise for and to
operate and maintain within the Areas electric light, heat or power
systems," etc. under Sec. 4 (i) of P.D. No. 538 and its rule-making
power under Sec. 4 (1) of the same law, on July 20, 1979, the PIA
Board of Directors promulgated the "Rules and Regulations To
Implement the Intent and Provisions of Presidential Decree No. 538." 48
Rule XI thereof on "Utilities and Services" provides as follows:

Sec. 1. Utilities It is the responsibility of the Authority to provide all required utilities and services
inside the Estate:
xxx xxx xxx
a) Contracts for the purchase of public utilities
and/or services shall be subject to the prior
approval of the Authority; Provided, however,

that similar contract(s) existing prior to the


effectivity of this Rules and Regulations shall
continue to be in full force and effect.

Petitioner NPC attempted to abide by these rulings when it conducted a


hearing to determine whether it may supply power directly to PIA. While
it notified CEPALCO of the hearing, the NPC is not the proper authority
referred to by this Court in the aforementioned earlier decisions, not
only because the subject of the hearing is a matter involving the NPC
itself, but also because the law has created the proper administrative
body vested with authority to conduct a hearing.

CEPALCO shares the view of the Court of Appeals that the Energy
Regulatory Board (ERB) is the proper administrative body for such
hearings. However, a recent legislative development has overtaken
said view.

xxx xxx xxx


(Emphasis supplied.)

It should be noted that the Rules and Regulations took effect thirty (30)
days after its publication in the Official Gazette on September 24, 1979
or more than three (3) months after the July 6, 1979 contract between
PIA and CEPALCO was entered into. As such, the Rules and
Regulations itself allowed the continuance of the supply of electric
power to PIE-MO by CEPALCO.

That the contract of July 6, 1979 was not renewed by the parties after
the expiration of the five-year period stipulated therein did not change
the fact that within that five-year period, in violation of both the contract
and its Rules and Regulations, PIA applied with the NPC for direct
power connection. The matter was aggravated by NPC's favorable
action on the application, totally unmindful of the extent of its powers
under the law which, in National Power Corporation v. Court of Appeals,
49
the Court delimits as follows:
. . . . It is immaterial whether the direct connection is merely an improvement or an increase in
existing voltage, as alleged by petitioner, or a totally new and separate electric service as claimed by
private respondent. The law on the matter is clear. PD 40 promulgated on 7 November 1972
expressly provides that the generation of electric power shall be undertaken solely by the NPC.
However Section 3 of the same decree also provides that the distribution of electric power shall be
undertaken by cooperatives, private utilities (such as the CEPALCO), local governments and other
entities duly authorized, subject to state regulation. ( Emphasis supplied.)

The same case ruled that "(i)t is only after a hearing (or an opportunity
for such a hearing) where it is established that the affected private
franchise holder is incapable or unwilling to match the reliability and
rates of NPC that a direct connection with NPC may be granted." As
earlier stated, the Court arrived at the same ruling in the later cases of
G.R. Nos. 72085, 84695 and 87697.

The ERB, which used to be the Board of Energy, by virtue of EO 172, whre the
ERB is basically a price or rate-fixing agency. Apparently recognizing this basic
function, Republic Act No. 7638 (An Act Creating the Department of Energy,
Rationalizing the Organization and Functions of Government Agencies Related to
Energy, and for Other Purposes) was promulgated. The determination of which
of two public utilities has the right to supply electric power to an area which is
within the coverage of both is certainly not a rate-fixing function which should
remain with the ERB. It deals with the regulation of the distribution of energy
resources which, under Executive Order No. 172, was expressly a function of
ERB. However, with the enactment of Republic Act No. 7638, the Department of
Energy took over such function. Hence, it is this Department which shall then
determine whether CEPALCO or PIA should supply power to PIE-MO.

Clearly, petitioner NPC's assertion that its "authority to entertain and hear direct
connection applications is a necessary incident of its express authority to sell
electric power in bulk" is now baseless. Even without the new legislation affecting
its power to conduct hearings, it is certainly irregular, if not downright anomalous
for the NPC itself to determine whether it should supply power directly to the PIA
or the industries within the PIE-MO. It simply cannot arrogate unto itself the
authority to exercise non-rate fixing powers which now devolves upon the
Department of Energy and to hear and eventually grant itself the right to supply
power in bulk.

Public Service Act Sec 16 (a)


General Qualifications
Section 16. Proceedings of the Commission, upon notice and hearing. - The
Commission shall have power, upon proper notice and hearing in accordance
with the rules and provisions of this Act, subject to the limitations and exceptions
mentioned and saving provisions to the contrary :
(a) To issue certificates which shall be known as certificates of
public convenience, authorizing the operation of public service within
the Philippines whenever the Commission finds that the operation of
the public service proposed and the authorization to do business will
promote the public interest in a proper and suitable manner. Provided,
That thereafter, certificates of public convenience and certificates of
public convenience and necessity will be granted only to citizens of the
Philippines or of the United States or to corporations, co-partnerships,
associations or joint-stock companies constituted and organized under
the laws of the Philippines; Provided, That sixty per centum of the stock
or paid-up capital of any such corporations, co-partnership, association
or joint-stock company must belong entirely to citizens of the
Philippines or of the United States: Provided, further, That no such
certificates shall be issued for a period of more than fifty years.

Vda de Lat v. PSC


1988
Facts:

Issue: whether or not the private respondent was validly awarded the questioned
Certificate of Public Convenience to operate an ice plant in Davao City.
Held:

Public Service Act Sec 18


Section 18. It shall be unlawful for any individual, co-partnership, association,
corporation or joint-stock company, their lessees, trustees or receivers appointed
by any court whatsoever, or any municipality, province, or other department of the
Government of the Philippines to engage in any public service business without
having first secured from the Commission a certificate of public convenience or
certificate of public convenience and necessity as provided for in this Act, except
grantees of legislative franchises expressly exempting such grantees from the
requirement of securing a certificate from this Commission as well as concerns at
present existing expressly exempted from the jurisdiction of the Commission,
either totally or in part, by the provisions of section thirteen of this Act.

Diaz filed an application with the respondent Public Service


Commission for a Certificate of Public Convenience and Necessity
(CPCN) to operate and maintain an ice plant service in Davao City
alleging among others that he is financially capable to operate and
maintain the proposed service, and that public necessity and
convenience will be promoted in a proper and suitable manner with the
approval of his application
Respondent Commission handed down a Decision approving the
Application of the private respondent and granting him a Certificate of
Public Convenience to operate a 2-ton ice plant in Davao City.

The court is convinced that the private respondent deserves to be


awarded the Certificate of Public Convenience.
He was able to fully satisfy the requisites before such a certificate may
be granted, namely: (1) the applicant must be a citizen of the
Philippines, or a corporation or co-partnership, association or joint stock
company constituted and organized under the laws of the Philippines,
60 per centum at least of the stock or paid-up capital of which belong
entirely to citizens of the Philippines; (2) the applicant must be
financially capable of undertaking the proposed service and meeting
the responsibilities incident to its operations; and (3) the applicant must
prove that the operation of the public service proposed and the
authorization to do business wig promote the public interest in a proper
and suitable manner.
He is a Filipino citizen and has the financial capacity to operate an
iceplant.
Before We end, it is apt to stress the principle that nobody has the
exclusive right to secure a franchise or a Certificate of Public
Convenience. The paramount consideration should always be the
public interest and public convenience.

Revocation and Cancellation

Divinagracia v. CBS
2009
Doctrine: Although there is no doubt that the President may exercise the
authority granted to him under Section 5 of R.A. No. 7477 (charter of PBS) which
provides that the President of the Philippines may temporarily take over and
operate the stations of the grantee, temporarily suspend the operation of any
stations in the interest of public safety, security and public welfare, or authorize
the temporary use and operation thereof by any agency of the Government, such
authority can be exercised only under limited and rather drastic circumstances.
They still do not vest in the NTC the broad authority to cancel licenses and
permits.
Facts:

Santiago Divinagracia alleged that Consolidated Broadcasting System,


Inc. (CBS) and Peoples Broadcasting Service, Inc. (PBS), two of three
radio networks that comprise Bombo Radyo Philippines, violated the
terms of their congressional franchises when they failed to offer at least
30 percent of their common stocks to the public as required by law and
their legislative franchises.
Divinagracia claimed that because of the misuse and violation of their
franchises, the provisional authorities granted by the NTC to PBS and
CBS to install, operate and maintain various AM and FM broadcast
stations had to be cancelled.
The NTC however dismissed the complaints, claiming that while it had
full jurisdiction to revoke or cancel a PA or CPC for violations or
infractions of the terms and conditions embodied therein, the
complaints actually constituted collateral attacks on the legislative
franchises of the two networks which are more properly the subject of a
quo warranto action to be commenced by the Solicitor General in the
name of the Republic of the Philippines.
Divinagracia went to the Court of Appeals which upheld the NTCs
denial. He then elevated the matter to the Supreme Court.

Issue: Whether or not the NTC has the power to cancel the CPCs it has issued
to legislative franchisees
Held/Ratio:

No, the NTC does not have the power to cancel CPCs.

The Radio Control Act of 1931 requires broadcast stations to obtain a


legislative franchise and such requirement was not repealed by E.O.

546 which established the NTC, the administrative agency which has
regulatory jurisdiction over broadcast stations.
When Congress grants a legislative franchise, it is the legal obligation
of the NTC to facilitate the operation by the franchisee of its broadcast
station and since public administration of the airwaves is a highly
technical function, the Congress has delegated to the NTC the task of
administration.
The licensing power of the NTC arises from the necessary delegation
by Congress of legislative power geared towards the orderly exercise
by franchisees of the rights granted them by Congress.
But even as the NTC is vested with the power to issue CPCs to
broadcast stations, it is not expressly vested with the power to cancel
such CPCs, or otherwise prevent broadcast stations with duly issued
franchises and CPCs from operating radio and television stations.
There is no such expression in the law, and by presuming such right the
Court will be acting contrary to the stated State interest as expressed in
respondents legislative franchises.
Although there is no doubt that the President may exercise the authority
granted to him under Section 5 of R.A. No. 7477 (charter of PBS) which
provides that the President of the Philippines may temporarily take over
and operate the stations of the grantee, temporarily suspend the
operation of any stations in the interest of public safety, security and
public welfare, or authorize the temporary use and operation thereof by
any agency of the Government, such authority can be exercised only
under limited and rather drastic circumstances.
They still do not vest in the NTC the broad authority to cancel licenses
and permits.

Public Service Act Sec 16


(m) To amend, modify or revoke at any time certificate issued under the
provisions of this Act, whenever the facts and circumstances on the strength of
which said certificate was issued have been misrepresented or materially
changed.

The Certificate of Public Convenience (CPC) and Certificate of Public


Convenience and Necessity (CPCN)
Public Service Act Section 15. With the exception of those enumerated in the
preceding section, no public service shall operate in the Philippines without
possessing a valid and subsisting certificate from the Public Service Commission
known as "certificate of public convenience," or "certificate of public convenience
and necessity," as the case may be, to the effect that the operation of said

service and the authorization to do business will promote the public interests in a
proper and suitable manner.
The Commission may prescribe as a condition for the issuance of the certificate
provided in the preceding paragraph that the service can be acquired by the
Republic of the Philippines or any instrumentality thereof upon payment of the
cost price of its useful equipment, less reasonable depreciation; and likewise,
that the certificate shall be valid only for a definite period of time; and that the
violation of any of these conditions shall produce the immediate cancellation of
the certificate without the necessity of any express action on the part of the
Commission.
In estimating the depreciation, the effect of the use of the equipment, its actual
condition, the age of the model, or other circumstances affecting its value in the
market shall be taken into consideration.
The foregoing is likewise applicable to any extension or amendment of
certificates actually in force and to those which may hereafter be issued, to
permit to modify itineraries and time schedules of public services, and to
authorizations to renew and increase equipment and properties.
Difference between CPC and CPCN :

A CPCN is issued by the PSC to a public service to which any political


subdivision has granted a franchise under Act 667 after the PSC has
approved the same under Section 16(b).
A CPC is any authorization to operate a public service issued by the
PSC. A CPC is an authorization issued by the Commission for the
operation of public services for which no franchise, either municipal or
legislative, is required by law (e.g. auto-trucks and motor vehicles). A
CPCN is an authorization issued by the PSC for the operation of public
services for which a franchise is required by law (e.g. electric,
telephone services).

Nature of certificate : It constitutes neither a franchise nor a contract, confers no


property rights and is a mere license or privilege, and such privilege is forfeited
when the grantee fails to comply with his commitments behind which lies the
paramount interest of the public, for public necessity cannot be made to wait, nor
sacrificed for private convenience.

However, certificates represent property rights to the extent that if the rights
which any public utility is exercising pursuant to lawful orders of the PSC has
been invaded by another public utility, in appropriate cases actions may be
maintained by the complainant public utility. Owners of public utilities have the
right to maintain appropriate actions against other public utilities not authorized to
operate in competition with the complainant.
Certificates are considered as property as used in Civil Procedure as they have
material value and are material assets. They are subject to attachment and
seizure by legal process, and may be acquired by purchase.
Determination of WON an issuance of a certificate is for public convenience - (1)
financial responsibility of the applicant, (2) reliability of the applicant, (3) priority of
filing the application for a certificate, and (4) priority of operation

Philippine Airlines, Inc. vs. Civil Aeronautics Board


(270 SCRA 538)
Facts:

Grand Air applied for a Certificate of Public Convenience and Necessity


with the Civil Aeronautics Board (CAB).
The Chief Hearing Officer issued a notice of hearing directing Grand Air
to serve a copy of the application and notice to all scheduled Philippine
Domestic operators.
Grand Air filed its compliance and requested for a Temporary Operating
Permit (TOP).
PAL filed an opposition to the application on the ground that the CAB
had no jurisdiction to hear the application until Grand Air first obtains a
franchise to operate from Congress.
The Chief Hearing Officer denied the opposition and the CAB approved
the issuance of the TOP for a period of 3 months. The opposition for the
TOP was likewise denied.
The CAB justified its assumption of jurisdiction over Grand Airs
application on the basis of Republic Act 776 which gives it the specific
power to issue any TOP or Certificate of Public Convenience and
Necessity.

Issue: Whether or not the CAB can issue a Certificate of Public Convenience
and Necessity or TOP even though the prospective operator does not have a
legislative franchise?

Held: Yes, as mentioned by the CAB, it is duly authorized to do so under


Republic Act 776 and a legislative franchise is not necessary before it may do so,
since Congress has delegated the authority to authorize the operation of
domestic air transport services to the CAB, an administrative agency.

The delegation of such authority is not without limits since Congress


had set specific standard and limitations on how such authority should
be exercised.

Public convenience and necessity exists when the proposed facility will
meet a reasonable want of the public and supply a need which the
existing facilities do not adequately afford.

Thus, the Board should be allowed to continue hearing the application,


since it has jurisdiction over it provided that the applicant meets all the
requirements of the law.
B. Rate-Fixing
Section 16. Proceedings of the Commission, upon notice and hearing. - The
Commission shall have power, upon proper notice and hearing in accordance
with the rules and provisions of this Act, subject to the limitations and exceptions
mentioned and saving provisions to the contrary :
(c) To fix and determine individual or joint rates, tolls, charges, classifications, or
schedules thereof, as well as commutation, mileage, kilometrage, and other
special rates which shall be imposed observed and followed thereafter by any
public service: Provided, That the Commission may, in its discretion, approve
rates proposed by public services provisionally and without necessity of any
hearing; but it shall call a hearing thereon within thirty days, thereafter, upon
publication and notice to the concerns operating in the territory affected:
Provided, further, That in case the public service equipment of an operator is
used principally or secondarily for the promotion of a private business, the net
profits of said private business shall be considered in relation with the public
service of such operator for the purpose of fixing the rates.

(a) To adopt, establish, fix, impose, maintain, collect or carry into effect
any individual or joint rates, commutation, mileage or other special rate,
toll, fare, charge, classification or itinerary. The Commission shall
approve only those that are just and reasonable and not any that are
unjustly discriminatory or unduly preferential, only upon reasonable
notice to the public services and other parties concerned, giving them a
reasonable opportunity to be heard and the burden of the proof to show
that the proposed rates or regulations are just and reasonable shall be
upon the public service proposing the same.

PHILCOMSAT VS. ALCUAZ


1989
PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION, petitioner, vs.
JOSE LUIS A. ALCUAZ, as NTC Commissioner, and NATIONAL
TELECOMMUNICATIONS COMMISSION, respondents.
Facts:

The petition before us seeks to annul and set aside an Order 1 issued
by respondent Commissioner Jose Luis Alcuaz of the National
Telecommunications Commission
Herein petitioner is engaged in providing for services involving
telecommunications. Charging rates for certain specified lines that were
reduced by order of herein respondent Jose Alcuaz Commissioner of
the National Telecommunications Commission. The rates were ordered
to be reduced by fifteen percent (15%) due to Executive Order No. 546
which granted the NTC the power to fix rates. Said order was issued
without prior notice and hearing.
Under Section 5 of Republic Act No. 5514, petitioner was exempt from
the jurisdiction of the then Public Service Commission, now respondent
NTC. However, pursuant to Executive Order No. 196 issued on June
17, 1987, petitioner was placed under the jurisdiction, control and
regulation of respondent NTC

Section 20. Acts requiring the approval of the Commission. - Subject to


established limitations and exceptions and saving provisions to the contrary, it
shall be unlawful for any public service or for the owner, lessee or operator
thereof, without the approval and authorization of the Commission previously had
-

Issue: Whether or Not E.O. 546 is unconstitutional.

Held:

In Vigan Electric Light Co., Inc. vs. Public Service Commission the
Supreme Court said that although the rule-making power and even the
power to fix rates- when such rules and/or rates are meant to apply to
all enterprises of a given kind throughout the Philippines-may partake of
a legislative character.

Respondent Alcuaz no doubt contains all the attributes of a quasijudicial adjudication. Foremost is the fact that said order pertains
exclusively to petitioner and to no other

The respondent admits that the questioned order was issued pursuant
to its quasi-judicial functions. It, however, insists that notice and hearing
are not necessary since the assailed order is merely incidental to the
entire proceedings and, therefore, temporary in nature but the supreme
court said that While respondents may fix a temporary rate pending
final determination of the application of petitioner, such rate-fixing order,
temporary though it may be, is not exempt from the statutory procedural
requirements of notice and hearing

On March 16, 1994, petitioner KMU filed a petition before the LTFRB
opposing the upward adjustment of bus fares, which the LTFRB
dismissed for lack of merit.
ISSUE:
Whether or not the authority given by respondent LTFRB to provincial
bus operators to set a fare range of plus or minus fifteen (15%) percent,
later increased to plus twenty (20%) and minus twenty-five (-25%)
percent, over and above the existing authorized fare without having to
file a petition for the purpose, is unconstitutional, invalid and illegal.

The Supreme Court Said that it is clear that with regard to rate-fixing,
respondent has no authority to make such order without first
giving petitioner a hearing, whether the order be temporary or
permanent. In the Case at bar the NTC didnt scheduled hearing nor it
did give any notice to the petitioner
Under Delegation

Kilusang Mayo Uno vs. Garcia


KILUSANG MAYO UNO LABOR CENTER vs.HON. JESUS B. GARCIA, JR., the
LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD, and
the PROVINCIAL BUS OPERATORS ASSOCIATION OF THE PHILS, 1994

FACTS :

Then Secretary of DOTC, Oscar M. Orbos, issued Memorandum


Circular No. 90-395 to then LTFRB Chairman, Remedios A.S. Fernando
allowing provincial bus operators to charge passengers rates within a
range of 15% above and 15% below the LTFRB official rate for a period
of one (1) year.

This range was later increased by LTFRB thru a Memorandum Circular


No. 92-009 providing, among others, that "The existing authorized fare
range system of plus or minus 15 per cent for provincial buses and
jeepneys shall be widened to 20% and -25% limit in 1994 with the
authorized fare to be replaced by an indicative or reference rate as the
basis for the expanded fare range."
Sometime in March, 1994, private respondent PBOAP, availing itself of
the deregulation policy of the DOTC allowing provincial bus operators
to collect plus 20% and minus 25% of the prescribed fare without first
having filed a petition for the purpose and without the benefit of a public
hearing, announced a fare increase of twenty (20%) percent of the
existing fares.

HELD:
Yes.
Under section 16(c) of the Public Service Act, the Legislature delegated
to the defunct Public Service Commission the power of fixing the rates
of public services. Respondent LTFRB, the existing regulatory body
today, is likewise vested with the same under Executive Order No. 202
dated June 19, 1987. x x x
However, nowhere under the aforesaid provisions of law are the
regulatory bodies, the PSC and LTFRB alike, authorized to delegate
that power to a common carrier, a transport operator, or other public
service.
Provisional Rates

Padua v. Ranada [2002]


FACTS

Toll Regulatory Board (TRB) issued Resolution No. 2001-89 authorizing


provisional toll rate adjustments on Metro Manila Skyway.

It was thereafter published in newspapers of general circulation for


three (3) consecutive weeks. However, there was no hearing conducted
for the matter. Deliberations were not even attended by Board Members
except TRB Executive Director Jaime Dumlao, Jr. Petitioners assail the
validity of the resolution.

the power lodged in an administrative body and a court, the


unmistakable trend is to refer it to the former.

ISSUES
Whether or not Resolution No. 2001-89 is invalid on the ground that:
(a) it was in violation of due process;
(b) the provisional toll rate adjustments are exorbitant, oppressive, onerous and
unconscionable; and,
(c) TRB Executive Director Jaime Dumlao, Jr. alone authorized the provisional
increase.
RULING

(a) No. TRB clearly complied with the publication requirements. Also,
the TRB may grant and issue ex-parte to any petitioner, without need of
notice, publication or hearing, provisional authority to collect, pending
hearing and decision on the merits of the petition, the increase in rates
prayed for or such lesser amount as the TRB may in its discretion
provisionally grant.
(b) No. This is obviously a question of fact requiring knowledge of the
formula used and the factors considered in determining the assailed
rates. Definitely, this task is within the province of the TRB. The SC
takes cognizance of the wealth of jurisprudence on the doctrine of
primary administrative jurisdiction and exhaustion of administrative
remedies. In this era of clogged court dockets, the need for specialized
administrative boards or commissions with the special knowledge,
experience and capability to hear and determine promptly disputes on
technical matters or intricate questions of facts, subject to judicial
review in case of grave abuse of discretion, is indispensable. Between

(c) No. It is not true that it was TRB Executive Director Dumlao, Jr.
alone who issued Resolution No. 2001-89. The Resolution itself
contains the signature of the four TRB Directors. Petitioner Padua
would argue that while these Directors signed the Resolution, none of
them personally attended the hearing. This argument is
misplaced. Under our jurisprudence, an administrative agency may
employ other persons, such as a hearing officer, examiner or
investigator, to receive evidence, conduct hearing and make reports, on
the basis of which the agency shall render its decision. Such a
procedure is a practical necessity. Corollarily, in a catena of cases, the
Supreme Court laid down the cardinal requirements of due process in
administrative proceedings, one of which is that the tribunal or body or
any of its judges must act on its or his own independent consideration
of the law and facts of the controversy, and not simply accept the views
of a subordinate. Thus, it is logical to say that this mandate was
rendered precisely to ensure that in cases where the hearing or
reception of evidence is assigned to a subordinate, the body or agency
shall not merely rely on his recommendation but instead shall
personally weigh and assess the evidence which the said subordinate
has gathered.

FREEDOM FROM DEBT COALITION vs. ERC


2005
Facts:

Section 34 of RA 9136 (EPIRA), imposes Universal Charge upon endusers of electricity, a charge imposed for the recovery of stranded cost.
ERC issued its Implementing Rules and Regulations defining Universal
Charge refers to the charge, if any, imposed for the recovery of
Stranded Debts, Stranded Contract Costs of NPC and Stranded
Contract Costs of Eligible Contracts of Distribution Utilities and other
purposes pursuant to Section 34 of the EPIRA.
National Power Corporation-Strategic Power Utilities Group (NPCSPUG) filed with Energy Regulatory Commission (ERC) a petition for
the availment from the Universal Charge of its share for Missionary
Electrification.

The ERC decided the NPCs petition authorizing it to draw up to P70,


000, 000.00 from PSALM for its 2003 Watershed Rehabilitation Budget
subject to the availability of funds for the Environmental Fund
component of the Universal Charge. On the basis of the said ERC
decisions, Panay Electric Company, Inc. (PECO) charged Romeo P.
Gerochi and all other end-users with the Universal Charge as reflected
in their respective electric bills starting from the month of July 2003.
Petitioners submit that the assailed provision of law and its IRR which
sought to implement the same are unconstitutional on the following
grounds: 1. The universal charge provided for under Section 34 of the
EPIRA and sought to be implemented under Sec. 2, Rule 18 of the IRR
of the said law is a tax which is to be collected from all electric endusers and self-generating entities.
The power to tax is strictly a legislative function and as such, the
delegation of said power to any executive or administrative agency like
the ERC is unconstitutional, giving the same unlimited authority.
The assailed provision clearly provides that the Universal Charge is to
be determined, fixed and approved by the ERC, hence leaving to the
latter complete discretionary legislative authority;
2. The ERC is also empowered to approve and determine where the
funds collected should be used;
3. The imposition of the Universal Charge on all end-users is
oppressive and confiscatory and amounts to taxation without
representation as the consumers were not given a chance to be heard
and represented.

Issue: Whether or not there is undue delegation of legislative power to tax


on the part of the ERC.
Held:

No, there is no undue delegation of powers to the ERC. The


EPIRA is complete in all its essential terms and conditions, and it
contains sufficient standards.
Although Sec. 34 of the EPIRA merely provides that within one (1)
year from the effectivity thereof, a Universal Charge to be
determined, fixed and approved by the ERC, shall be imposed on
all electricity end-users, and therefore, does not state the specific
amount to be paid as Universal Charge, the amount nevertheless
is made certain by the legislative parameters provided by the law
itself when it provided for the promulgation and enforcement of a
National Grid Code, and a Distribution Code.

In making his recommendation to the President on the existence of


either of the two conditions, the Secretary of Finance is not acting
as the alter ego of the President or even her subordinate.
In such instance, he is not subject to the power of control and
direction of the President. He is acting as the agent of the
legislative department, to determine and declare the event upon
which its expressed will is to take effect.
The Secretary becomes the means or tool by which legislative
policy is determined and implemented, considering that he
possesses all the facilities to gather data and information and has
a much broader perspective to properly evaluate them.
His personality in such instance is in reality but a projection of that
of Congress. Thus, being the agent of Congress and not of the
President, the President cannot alter or modify or nullify, or set
aside the findings of the Secretary and to substitute the judgment
of the former for that of the latter. Congress simply granted the
Secretary the authority to ascertain the existence of a fact. If it is
exists, the Secretary, by legislative mandate, must submit such
information to the President who must impose the 12% VAT rate.
There is no undue delegation of legislation power but only of the
discretion as to the execution of a law.
Approval of Sale and Mortgages of Public Utility Assets or Equity

Section 20. Acts requiring the approval of the Commission. - Subject to


established limitations and exceptions and saving provisions to the contrary, it
shall be unlawful for any public service or for the owner, lessee or operator
thereof, without the approval and authorization of the Commission previously had
(g) To sell, alienate, mortgage, encumber or lease its property, franchises,
certificates, privileges, or rights or any part thereof; or merge or consolidate its
property, franchises privileges or rights, or any part thereof, with those of any
other public service. The approval herein required shall be given, after notice to
the public and hearing the persons interested at a public hearing, if it be shown
that there are just and reasonable grounds for making the mortgaged or
encumbrance, for liabilities of more than one year maturity, or the sale, alienation,
lease, merger, or consolidation to be approved, and that the same are not
detrimental to the public interest, and in case of a sale, the date on which the
same is to be consummated shall be fixed in the order of approval: Provided,
however, that nothing herein contained shall be construed to prevent the
transaction from being negotiated or completed before its approval or to prevent

the sale, alienation, or lease by any public service of any of its property in the
ordinary course of its business.
(h) To sell or register in its books the transfer or sale of shares of its capital stock,
if the result of that sale in itself or in connection with another previous sale, shall
be to vest in the transferee more than forty per centum of the subscribed capital
of said public service. Any transfer made in violation of this provision shall be
void and of no effect and shall not be registered in the books of the public service
corporation. Nothing herein contained shall be construed to prevent the holding
of shares lawfully acquired. (As amended by Com. Act No. 454.)
(i) To sell, alienate or in any manner transfer shares of its capital stock to any
alien if the result of that sale, alienation, or transfer in itself or in connection with
another previous sale shall be the reduction to less than sixty per centum of the
capital stock belonging to Philippine citizens. Such sale, alienation or transfer
shall be void and of no effect and shall be sufficient cause for ordering the
cancellation of the certificate.

MERALCO was
P11,834,570.91.

On May 20, 2003, without any notice whatsoever, MERALCO


disconnected the electric supply to (BF and PWCCs) 16 water pumps
located in BF homes, in Paranaque, Caloocan, and Quezon City.
MERALCO demanded the payment of the electric bills amounting to
P4, 717,768.15.

The petitioners requested that such amount be offset by the P11,


834,570.91 that were to be refunded. MERALCO denied the request
stating that they have not yet come up with the schedule for the refund
of large amounts.

Again, without any notice, MERALCO cut of the power supply to 5


water pumps located in BF Homes Paranaque and BF Resort Village,
in Las Pinas.

Consequently, BF Homes and PWCC goes to the RTC stating that what
the respondent has done was oppressive and prayed for exemplary
damages. They have also prayed for the issuance of a writ of
preliminary injunction and restraining order stating that unless
restrained, MERALCO will cut off electric power connections to all of
the water pumps.

The RTC GRANTED the preliminary injunction and restrained


MERALCO to cut-off power connection to BFs and PWCCs water
pumps

Rate Refund

BF Homes v. Meralco
DOCTRINE:

mandated

to

refund

to

BF

the

amount

of

ISSUE:
In determining which body has jurisdiction over a case, the better policy
is to consider not only the status or relationship of the parties but also the
nature of the action that is the subject of their controversy.
FACTS:

WoN jurisdiction over this case lies within the RTC or the Energy Regulatory
Commission.
HELD:

BF and PWCC asked the RTC for the right to refund. They claimed to
have based such right on the SC ruling in Republic v. Manila Electric
Company:
o

Further, in accordance with the decision of the ERB dated


February 16, 1998, the excess average amount of P0.167 per
kilowatt hour starting with the applicants billing cycles
beginning February 1998 is ordered to be refunded to
MERALCOs customers or correspondingly credited in their
favor for future consumption.

Petition is DENIED.

RTC has NO jurisdiction because the power to reside over such case
exclusively belongs to the ERC by virtue of Sec. 43 (u) of the EPIRA.
The powers of the ERC were underlined when the courts traced the
legislative history of the agency in Manila Electric Compoany v. Energy
Regulatory Board

monetary obligations willfully contracted and money judgments arising


from torts.

Montoya V. Ignacio
1953
Facts:

The court rendered a decision sentencing Marcelino Ignacio to pay Php


31,000 to Sancho Montoya as damages for the death of a passenger in
a vehicle operated as a public service in the name of Ignacio.
A property registered to Ignacio and his wife, Estelita Poniente, was
levied by the sheriff and was advertised to be sold. But, Ignacio issued
a petition claiming that the property consisting of a Lot and a residential
house registered under his name and his spouse was a family home
and, thus, exempted from execution.
The petition was denied and also his subsequent motion for
reconsideration which alleged further that as the judgment debtor,
according to the judgment creditors themselves, had personal
properties (consisting of 14 passengers jeepneys) sufficient to satisfy
the judgment.

Issue: W/N the property in question should be declared exempt from execution
as a family home extrajudicially constituted.
Held:

Family Homes Not Exempt From Execution For Debts Incurred Before
Its Establishment 1. According to Article 243, subdivision 2 of the new
Civil Code: The family home extrajudicially formed shall be exempt from
execution, forced sale or attachment except: (2) For debts incurred
before the declaration was recorded in the Registry of Property.

2. The family home involved in the present case having been judicially
constituted, it comes under Article 243 of the new Civil Code, and, in
accordance with subdivision (2) thereof, is not exempt from execution
for debts incurred before it was recorded in the Registry of Property.
Money Judgment Is Debt

3. A money judgment is just as much a debt as a monetary obligation


voluntarily assumed, and no special reason exists for putting it below
the category of the latter for the purposes of Article 243 of the New Civil
Code. Therefore the family home of Ignacio is not exempted from
execution.

4. The defendants argument that the subdivision (2) of Article 243 of


the new Civil Code refers to monetary obligations willfully contracted,
has no merit. It should be define in its generic sense that will include

Zamboanga Transportation Co. vs. CA


1969
FACTS:

In the evening of 13 August 1955, the spouses Ramon and Josefina


Dagamanuel boarded a bus at Manicahan, Zamboanga City, to attend a
benefit dance at the Bunguiao Elementary School, also in Zamboanga
City, where Josefina was a public school teacher.

After the dance, the couple boarded the same bus to return to
Manicahan. At around 1 a.m. of 14 August 1955, the bus (1955 TPU1137), and driven by Valeriano Marcos, fell off the road and pinned to
death the said spouses and several other passengers.
Jose Mario Dagamanuel, the only child of the deceased spouses, through his
maternal grandmother as guardian ad-litem, Pascuala Julian de Punzalan,
instituted an action against Zamboanga Transportation Co., Inc. (Zamtanco) and
the Zamboanga Rapids Co., Inc. (Zambraco) for breach of contract of carriage,
alleging that the accident was due to the fault and negligence of the driver in
operating the bus and due to the negligence of the companies in their
supervision of their driver. the trial court rendered judgment sentencing the three,
jointly and severally, to indemnify the private respondents. The CA affirmed the
decision of the court a quo.
ISSUE: Whether or not Zamtranco and Zambraco are jointly and severally liable.
HELD: Yes.

While it is true that according to previous decisions of the Supreme


Court, transfer of a certificate of public convenience to operate a
transportation service is not effective and binding insofar as the
responsibility of the grantee under the franchise in its relation to the
public is concerned, without the approval of the transfer by the Public
Service Commission required by the Public Service Act, and that in
contemplation of law, the transferor of such certificate continues to be
the operator of the service as long as the transfer is not yet approved,
and as such operator, he is the one responsible jointly and severally

with his driver for damages incurred by passengers or third persons in


consequence of injuries or deaths resulting from the operation of such
service, the Court does not find any need for applying these rulings to
the present case for the simple reason that in their respective thirdparty complaints, the companies both admitted separately that they are
the owners of the bus involved in the incident in question and that
Valeriano Marcos, the driver of said bus at the time of said incident, was
in their employ.
There is no application of the ruling in the previous cases to the present
case. There, the registered owners invariably sought to pass on liability
to the actual operators on the pretext that they had already sold or
transferred their units to the latter, whereas in the present case, the
registered owner, the Zambraco, admits whatever liability it has and
vigorously objects to any finding that the actual operator, the
Zamtranco, is also liable with it, claiming that as registered owner, it
alone should be adjudged liable.
We would not inquire into the motive of the Zambraco why instead of
sharing whatever liability it has with the Zamtranco, it prefers to
shoulder it alone.
But the fact stands out in bold relief that although still the registered
owner at the time of the accident, it had already sold the vehicle to
Zamtranco and the latter was actually operating it.
For the better protection of the public that both the owner of record and
the actual operator, as held by the Court in the past, should be
adjudged jointly and severally liable with the driver Bautista.

Other Means of Regulation

elsewhere. Pursuant to this, the Director of the Bureau of Land Transportation


issued Circ 52 which is the IRR of the law in the NCR. TOMMI assailed the
constitutionality of the law. It avers, among other things, that the Circular in
question violates their right to equal protection of the law because the same is
being enforced in Metro Manila only and is directed solely towards the taxi
industry. At the outset it should be pointed out that implementation outside Metro
Manila is also envisioned in Memorandum Circular No. 77-42.
ISSUE: Whether or not there is a violation of the equal protection clause by the
implementation of the said circular.
HELD: The SC held that Circ 77-42 is valid. BOTs reason for enforcing the
Circular initially in Metro Manila is that taxicabs in this city, compared to those of
other places, are subjected to heavier traffic pressure and more constant use.
Thus is of common knowledge. Considering that traffic conditions are not the
same in every city, a substantial distinction exists so that infringement of the
equal protection clause can hardly be successfully claimed.
In so far as the non-application of the assailed Circulars to other transportation
services is concerned, it need only be recalled that the equal protection clause
does not imply that the same treatment be accorded all and sundry. It applies to
things or persons identically or similarly situated. It permits of classification of the
object or subject of the law provided classification is reasonable or based on
substantial distinction, which make for real differences, and that it must apply
equally to each member of the class. What is required under the equal protection
clause is the uniform operation by legal means so that all persons under identical
or similar circumstance would be accorded the same treatment both in privilege
conferred and the liabilities imposed. The challenged Circulars satisfy the
foregoing criteria.

Taxicab Operators of Metro Manila Inc vs The Board of Transportation

Equal Protection Phasing Out of Old Taxis in MM but not Elsewhere


On 10 Oct 1977, BOT issued Circ 77-42 which has for its purpose the phasing
out of old and dilapidated taxis which are 6 years older. The law is set to be
immediately implemented in Metro Manila first before it would be implemented

Due Process Requirements

Pantranco vs PSC
F:

Pantranco has been engaged for the past 20 years in the business of
transporting passengers by means of motor vehicles in accordance with

the CPCN issued to it.


It filed with the PSC an application for authorization to operate 10 addtl.
new trucks.
The application was granted with two conditions : (1) that the CPCN
would be valid for only 25 years and (2) that the service can be
acquired by the govt. upon payment of cost price of its useful eqpt. less
reasonable depreciation. Pantranco challenged the constitutionality of
Art. 15, CA 146 as an undue delegation of legislative powers.

Issue : WON the PSC may prescribe the 2 conditions as a prerequisite to the
issuance of the CPCN.
Held : Yes. CA 146 provides a sufficient standard, which is public interest, by
which the PSC is guided in imposing such conditions.

The business of a common carrier holds such a peculiar relation


to the public interest that there is superinduced upon it the right of
public regulation.
When private property is affected with a public interest, it ceases to be
juris privati only. When, therefore, one devotes his property to a use in
which the public has an interest, he, in effect, grants to the public an
interest in that use, and must submit to be controlled by the public for
the common good, to the extent of the interest he had thus created.
He may withdraw his grant by discontinuing the use, but so long as he
maintains the use, he must submit to control.

Indeed this right is so far beyond question that it is settled that the
power of the state to exercise legislative control over public utilities may
be exercised through the board of commissioners. This right of the state
to regulate public utilities is founded upon the police power, and
statutes for the control and regulation of utilities are a legitimate
exercise thereof, for the protection of the public as well as the utilities
themselves.
Such statutes are not unconstitutional, either as impairing the obligation
of contracts, taking property without due process, or denying the equal
protection of the laws, especially inasmuch as the question WON
private property shall be devoted to a public use and the consequent
burdens assumed is ordinarily for the owner to decide; and if he
voluntarily places his property in public service he cannot complain that
it becomes subject to the regulatory powers of the state.
This is more so in the light of authorities which hold that a CPC
constitutes neither a franchise nor a contract, confers no property rights
and is a mere license or privilege.