G.R. No.

L-46558 July 31, 1981 Lessons Applicable: Exceptions to Contracting Parties (Transportation) FACTS:

December 1950, he complained toPAL through its authorized official about the slow reaction and poor judgment of Captain Bustamante. Notwithstanding said complaint, defendant allowed the pilot to continue flying. January 8, 1951: Jesus V. Samson flew as co-pilot on a regular flight from Manila to Legaspi with stops at Daet, Camarines Norte and Camarines Sur, with Captain Bustamante as commanding pilot of a PAL C-47 plane o on attempting to land the plane at Daet airport, Captain Bustamante due to his very slow reaction and poor judgment overshot the airfield and as a result, notwithstanding the diligent efforts of the Samson to avert an accident, the airplane crashlanded beyond the runway; that the jolt caused the head of the plaintiff to hit and break through the thick front windshield of the airplane causing him severe brain concussion, wounds and abrasions on the forehead with intense pain instead of expert and proper medical treatment called for by the nature and severity of his injuries, PAL simply referred him to a company physician, a general medical practitioner, who limited the treatment to the exterior injuries without examining the severe brain concussion several days after the accident, PAL called back the Samson to active duty as co-pilot, and was never given any examination o he had been having periodic dizzy spells and had been suffering from general debility and nervousness December 21, 1953: he was discharged due to his physical disabilityCFI: PAL to pay the Samson o P1988,000.00 as unearned income or damages o P50,000.00 for moral damages o P20,000.00 as attorneys fees o P5,000.00 as expenses of litigation CA: modified entitled to the legal rate of interest n unearned income

ISSUE: W/N PAL was negligent and was liable

HELD: YES. affirmed with slight modification in that the correct amount of compensatory damages is P204,000.00

Even the doctors presented by PAL admit vital facts about the brain injury. Dr. Bernardo and Dr. Reyes admits that due to the incident, the plaintiff continuously complained of his fainting spells, dizziness and headache everytime he flew as a co-pilot and everytime he went to the clinic no less than 25 times We also find the imputation of gross negligence by respondent court to PAL for having allowed Capt. Delfin Bustamante to fly on that fateful day of the accident on January 8, 1951 to be correct o Bustamante was sick. He admittedly had tumor of the nasopharynx (nose) The fact that the complaint was not in writing does not detract anything from the seriousness thereof, considering that a miscalculation would not only cause the death of the crew but also of the passengers. One month prior to the crash-landing, when the pilot was preparing to land in Daet, plaintiff warned him that they were not in the vicinity of Daet but above the town of Ligao. The plane hit outside the airstrip. In another instance, the pilot would hit the Mayon Volcano had not Samson warned him. At least, the law presumes the employer negligent imposing upon it the burden of proving that it exercised the diligence of a good father of a family in the supervision of its employees. PAL would want to tie Samson to the report he signed about the crash-landing. The report was prepared by his pilot and because the latter pleaded that he had a family too and would have nowhere to go if he lost his job, Samsons compassion would not upturn the truth about the crash-landing

Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756. Art. 1755. A common carrier is bound to carry the passenger safely as far as human care and foresight can provide, using the utmost

diligence of very cautious persons, with a due regard for all the circumstances. Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755. Article 2205 of the New Civil Code of the Philippines damages may be recovered for loss or impairment of earning capacity in cases of temporary or permanent personal injury."

Art. 1711. Owners of enterprises and other employers are obliged to pay compensation for the death or injuries to their laborers, workmen, mechanics or other employees, even though the event may have been purely accidental or entirely due to a fortuitous cause, if the death or personal injury arose out of and in the course of the employment. The employer is also liable for compensation if the employee contracts any illness or disease caused by such employment or as the result of the nature of the employment. If the mishap was due to the employees own notorious negligence, or voluntary act, or drunkenness, the employer shall not be liable for compensation. When the employees lack of due care contributed to his death or injury, the compensation shall be equitably reduced. Art. 1712. If the death or injury is due to the negligence of a fellowworker, the latter and the employer shall be solidarily liable for compensation. If a fellow-workers intentional or malicious act is the only cause of the death or injury, the employer shall not be answerable, unless it should be shown that the latter did not exercise due diligence in the selection or supervision of the plaintiffs fellowworker. Articles 1169, 2209 and 2212 of the Civil Code govern when interest shall be computed.

The correct amount of compensatory damages upon which legal interest shall accrue from the filing of the complaint is P204,000.00 as herein computed and not P198,000.00

Republic v. Manila Electric Company

391 SCRA 700 (2002)

Regulation of rates to be charged by public utilities is founded upon the police power of the State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and is affected with public interest, it ceases to be juris privati only becomes subject to regulation. Submission to regulation may be withdrawn by the owner by discontinuing use but as long as the use of the property is continued, the same is subject to public regulation. In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State the right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State must be one that yields a fair return omn public utility upon the value of the property performing the service and one that is reasonable to the public for the services rendered. The fixing of just and reasonable rates involves a balancing of the investor and the consumer interests.

Globe Telecom, Inc v. NTC et. al.

Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie! G.R. No. 143964 July 26, 2004 GLOBE TELECOM, INC., petitioner, vs. THE NATIONAL TELECOMMUNICATIONS COMMISSION, COMMISSIONER JOSEPH A. SANTIAGO, DEPUTY COMMISSIONERS AURELIO M. UMALI and NESTOR DACANAY, and SMART COMMUNICATIONS, INC. respondents. Telecommunications services are affected by a high degree of public interest. Telephone companies have historically been regulated as common carriers, and indeed, the 1936 Public Service Act has classified wire or wireless communications systems as a "public service," along with other common carriers. The present petition dramatizes to a degree the clash of philosophies between traditional notions of regulation and the au corant trend to deregulation. Appropriately, it involves the most ubiquitous feature of the mobile phone, Short Messaging Service ("SMS") or "text messaging," which has been transformed from a mere technological fad into a vital means of communication. Facts: Globe and private respondent Smart Communications, Inc. are both grantees of valid and subsisting legislative franchises, authorizing them, among others, to operate a Cellular Mobile Telephone System ("CMTS"), utilizing the Global System for Mobile Communication ("GSM") technology. Among the inherent services supported by the

GSM network is the Short Message Services (SMS),also known colloquially as "texting," which has attained immense popularity in the Philippines as a mode of electronic communication. On 4 June 1999, Smart filed a Complaint with NTC to interconnect Smart's and Globe's GSM networks, particularly their respective SMS or texting services. The Complaint arose from the inability of the two leading CMTS providers to effect interconnection. Smart alleged that Globe, with evident bad faith and malice, refused to grant Smart's request for the interconnection of SMS. But NTC also declared that both Smart and Globe have been providing SMS without authority from it, in violation of Section 420 (f) of MC No. 8-9-95 which requires PTEs intending to provide value-added services (VAS) to secure prior approval from NTC through an administrative process. Globe filed with the Court of Appeals a Petition for Certiorari and Prohibition to nullify and set aside the Order and to prohibit NTC from taking any further action in the case. It reiterated its previous arguments that the complaint should have been dismissed for failure to comply with conditions precedent and the non-forum shopping rule. It also claimed that NTC acted without jurisdiction in declaring that it had no authority to render SMS, pointing out that the matter was not raised as an issue before it at all. Finally, Globe alleged that the Order is a patent nullity as it imposed an administrative penalty for an offense for which neither it nor Smart was sufficiently charged nor heard on in violation of their right to due process. After the Court of Appeals denied the Motion for Partial Reconsideration, Globe elevated the controversy to the Supreme Court. Issues: 1. Whether NTC may legally require Globe to secure NTC approval before it continues providing SMS; 2. Whether SMS is a VAS under the PTA, or special feature under NTC MC No. 14-1197; 3. Whether NTC acted with due process in levying the fine against Globe; and 4. Whether Globe should have first filed a motion for reconsideration before the NTC, but this relatively minor question can be resolved in brief. Held: Necessity of Filing Motion for Reconsideration Globe deliberately did not file a motion for reconsideration with the NTC before elevating the matter to the Court of Appeals via a petition for certiorari. Generally, a motion for reconsideration is a prerequisite for the filing of a petition for certiorari.

In opting not to file the motion for reconsideration, Globe asserted before the Court of Appeals that the case fell within the exceptions to the general rule. The appellate court in the questioned Decision cited the purported procedural defect, yet chose anyway to rule on the merits as well. Globe's election to elevate the case directly to the Court of Appeals, skipping the standard motion for reconsideration, is not a mortal mistake. According to Globe, the Order is a patent nullity, it being violative of due process; the motion for reconsideration was a useless or idle ceremony; and, the issue raised purely one of law. Indeed, the circumstances adverted to are among the recognized exceptions to the general rule. The Merits Globe hinges its claim of exemption from obtaining prior approval from the NTC on NTC Memorandum Circular No. 14-11-97 ("MC No. 14-11-97"). Globe notes that in a 7 October 1998 ruling on the application of Islacom for the operation of SMS, NTC declared that the applicable circular for SMS is MC No. 14-11-97. Under this ruling, it is alleged, NTC effectively denominated SMS as a "special feature" which under MC No. 14-11-97 is a deregulated service that needs no prior authorization from NTC. Globe further contends that NTC's requiring it to secure prior authorization violates the due process and equal protection clauses, since earlier it had exempted the similarly situated Islacom from securing NTC approval prior to its operation of SMS. The statutory basis for the NTC's determination must be thoroughly examined. Our first level of inquiry should be into the PTA. It is the authority behind MC No. 8-9-95. It is also the law that governs all public telecommunications entities ("PTEs") in the Philippines. Public Telecommunications Act The PTA has not strictly adopted laissez-faire as its underlying philosophy to promote the telecommunications industry. In fact, the law imposes strictures that restrain within reason how PTEs conduct their business. For example, it requires that any access charge/revenue sharing arrangements between all interconnecting carriers that are entered into have to be submitted for approval to NTC. At the same time, the general thrust of the PTA is towards modernizing the legal framework for the telecommunications services sector. The transmutation has become necessary due to the rapid changes as well within the telecommunications industry. One of the novel introductions of the PTA is the concept of a "value-added service" ("VAS"). Section 11 of the PTA governs the operations of a "value-added service provider," which the law defines as "an entity which relying on the transmission, switching and local distribution facilities of the local exchange and inter-exchange operators, and overseas carriers, offers enhanced services beyond those ordinarily provided for by such carriers." Section 11 recognizes that VAS providers need not secure

a franchise, provided that they do not put up their own network. However, a different rule is laid down for telecommunications entities such as Globe and PLDT. The Pertinent NTC Memorandum Circulars The NTC relied on Section 420(f) of the Implementing Rules of the PTA ("Implementing Rules") as basis for its claim that prior approval must be secured from it before Globe can operate SMS. Section 420 of the Implementing Rules, contained in MC No. 8-9-95. In short, the legal basis invoked by NTC in claiming that SMS is VAS has not been duly established. The fault falls squarely on NTC. With the dual classification of SMS as a special feature and a VAS and the varying rules pertinent to each classification, NTC has unnecessarily complicated the regulatory framework to the detriment of the industry and the consumers. But does that translate to a finding that the NTC Order subjecting Globe to prior approval is void? There is a fine line between professional mediocrity and illegality. NTC's byzantine approach to SMS regulation is certainly inefficient. Unfortunately for NTC, its actions have also transgressed due process in many ways, as shown in the ensuing elucidation.