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Manila Electric Co. Vs Pasay Transportation Co.

Facts
TheManilaElectriccompanyfiledapetitionbeforethecourtrequestingthe
membersoftheSCsittingasboardofarbitratorstofixthetermsuponwhich
certaintransportationcompaniesshallbepermittedtousethePasigbridgeofthe
MERALCO.
MERALCOsubmitsthepetitionbeforethecourtbyvirtueofActNo.1446,
section11whichstates:Wheneveranyfranchiseorrightofwayisgrantedto
anyotherpersonorcorporation,noworhereafterinexistence,overportionsof
thelinesandtracksofthegranteeherein,thetermsonwhichsaidotherpersonor
corporationshallusesuchrightofway,andthecompensationtobepaidtothe
granteehereinbysuchotherpersonorcorporationforsaiduse,shallbefixedby
themembersoftheSCsittingasaboardofarbitrators,thedecisionofamajority
ofwhomshallbefinal.
Foreveryfranchisegranted,termsastotheusageandcompensationtobepaidto
thegranteeshallbefixedbythemembersoftheSCsittingasboardofarbitrators,
amajorityvoteisrequiredandthisisfinal.
Copiesweresenttotheaffectedtransportationcompanyonceofwhichisthe
PasayTransportationandtoAtty.Genwhichdisclaimedanyinterest.
Frameworksofthestatute:SCsittingasboardofarbitratorsandasanentity;
Decisionisfinal;FranchisegrantedtoMeralcoalthoughonlyacontractbetween
partiestoitisnowaffectingrightsofpersonsnotsignatoriestoit.
Thepartiestoarbitrationmaynotoustthecourtsofjurisdictionofthematters
submittedtoanarbitration.Ithasbeenheldthataclauseinacontract,providing
thatallmattersindisputebetweenthepartiesshallbereferredtoarbitratorsandto
themalone,iscontrarytopublicpolicyandcannotoustthecourtsofjurisdiction.

ISSUE:WhetherornotthemembersoftheSCcansitasarbitratorsandfixthe
termsandcompensationasisaskedoftheminthiscase.
HELD:
MeralcoisbankingonthecaseofTallasseeFallsMfgCovsCommissioners
Courtwhereitwasheldthatastatelegislatureauthorizingthecommissioners
courtofacertaincountrytoregulateandfixtherateoftolltobechargedbythe
ownersofabridgeisnotunconstitutionalasdelegatinglegislativepowertothe
courts.Butthatisnotthequestionbeforeus.Herethequestionisnotonewhether
ornottherehasbeenadelegationoflegislativeauthoritytoacourt.More
precisely,theissueconcernsthelegalrightofthemembersoftheSC,sittingasa
boardofarbitratorsthedecisionofamajorityofwhomshallbefinal,toactinthat
capacity.
Dilemmaofthecourt:
1.SCsittingasaboardofarbitratorexercisingjudicialfunctions
CaseIwouldnotfallwithinthejurisdictiongrantedtotheSC=ifitdoes,it
wouldmeanthatthecourtswouldbeoustedofjurisdictionandrendertheawarda
nullity.Iftheproperconstruction,wewouldthenhavetheanomalyofadecision
bythemembersoftheSC,sittingasboardofarbitrators,takentherefromtothe
courtsandeventuallycomingbeforetheSC,wheretheSCwouldreviewthe
decisionofitsmembersactingasarbitrators.
2.MembersoftheSCsittingasarbitrators,exercisingadministrativeorquasi
judicialfunctions.

Case2wouldmeanthatthemembersoftheSC,sittingasaboardofarbitrators,
beconsideredasadministrativeorquasijudicialinnature,thatwouldresultinthe
performanceofdutieswhichthemembersoftheSCcouldnotlawfullytakeit
uponthemselvestoperform.

ItisjudicialpoweronlywhichisexercisedbytheSC.JustastheSCasthe
guardianonconstitutionalrightsshouldnotsanctionusurpationbyanyother
departmentsofthegovernment.Itspowershouldbeconfinedstrictlywithinthe
grantedbytheOrganicAct.

ExerciseofjurisdictionbytheSCcannotmeanexerciseofjurisdictionbythe
membersoftheSCsittingasboardofarbitrators.