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SUPREME COURT DECISIONS
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EN BANC
G.R. Nos. L-24340, L-24341, L-24342, L-24343 and L-24344 July 18, 1967
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, vs. THE HON. ENRIQUE MEDINA, as Commissioner of the Public Service Commission;
TELEPHONE ENGINEERING and SERVICE CO. (TESCO), TELECTRONIC SYSTEMS, INC. and ARANETA UNIVERSITY, Respondents.
Jalandoni and Jamir and Ponce Enrile, Siguion Reyna, Montecillo and Belo for petitioners.
Andres Velarde and Alejandro A. Lichauco for respondent Araneta University.
Arnaldo J. Guzman for respondents Telectronic Systems, Inc., et al.
Generoso O. Almario for respondent Public Service Commission.
SANCHEZ, J.:chanrobles virtual law library
Original action for prohibition started by Philippine Long Distance Telephone Company1 to stop Public Service Commissioner Enrique Medina from reopening and taking further proceedings in PSC Cases 61-5270, 61-5271, 61-5280, 61-2111 and 62-4169. Ground: The decision in said cases - jointly heard - had become final and executory, and the Public Service Commission2 already "lost its jurisdiction thereon."chanrobles virtual law library
The cases below were:
PSC Case 61-5270 - for authority to revise PLDT rates;chanrobles virtual law library
PSC Case 61-5271 - for authority to increase PLDT's authorized capital from P25,000,000.00 to P60,000,000.00;chanrobles virtual law library
PSC Case 61-5280 - for authority to revise PLDT's rules and regulations applicable to the services being provided by PLDT;chanrobles virtual law library
PSC Case 61-2111 - for authority to reissue 52,000 shares of PLDT preferred stock to utilize the proceeds thereof, in financing its expansion and improvement program; andchanrobles virtual law library
PSC Case 62-4169 - for approval of the expansion program of PLDT at an estimated cost of P105,000,000.00.
Notice, issued and published, directed parties interested to appear at the hearing, otherwise, their right to be heard would be deemed waived.chanroblesvirtualawlibrarychanrobles virtual law library
A number of oppositors appeared. Respondent Telectronic System, Inc.3 entered its opposition in PSC Cases 61-5270 and 62-4169.chanroblesvirtualawlibrarychanrobles virtual law library
The other principal respondents did not appear at the trial.chanroblesvirtualawlibrarychanrobles virtual law library
On July 31, 1963, after almost two years of joint public hearings, the PSC, thru Chairman Enrique Medina and two Associate Commissioners, Francisco A. Perfecto and Gregorio C. Panganiban, rendered judgment approving the expansion program subject to conditions, and the increase of rates projected in the application, but not exceeding 47% for business telephones and 40% for residential and other telephones, over and above the then existing schedule of rates, which increase "may" take effect on January 1, 1965, also subject to conditions.chanroblesvirtualawlibrarychanrobles virtual law library
On August 15, 1963, PLDT moved to reconsider. Its prayer -
(1) To set aside the finding that PLDT has no valid franchise and authority to operate local services in Manila and suburbs, and the requirements relative to such finding;chanrobles virtual law library
(2) To set aside the PSC-imposed conditions, and the rate limitations of 47% for business telephones and 40% for residential and other telephones set forth in the judgment; andchanrobles virtual law library
(3) To expressly approve the applications in PSC Cases 61-5271, 61-5280, and 61-2111.
On January 9, 1964, the Commission [Commissioners Alex F. de Guzman, Josias K. Guinto, Gregorio C. Panganiban and Jose A. Fornier taking part] rendered an amended decision: (a) approving the expansion program and authorizing increase of rates by 47% for business services and 40% for residential services - both without recital of the conditions imposed in the original decision; (b) approving the applications in PSC Cases 61-5271, 61-2111 and 62-4169;4 and (c) granting a provisional certificate of public convenience and necessity upon the terms therein specified.chanroblesvirtualawlibrarychanrobles virtual law library
Telectronics did not appeal.chanroblesvirtualawlibrarychanrobles virtual law library
The decision of January 9, 1964 became final.chanroblesvirtualawlibrarychanrobles virtual law library
On December 28, 1964, respondents Telectronics and Telephone Engineering & Service Co.5 filed in Case 61-5270 and the other related cases, a petition "to suspend the effectivity of increased rates." Their theory: The conditions in the original decision of July 31, 1963 were not eliminated, expressly or impliedly, by the amending January 9, 1964 decision. Alleging that PLDT has failed to remove all faulty installations and to connect 5,000 telephones within the required period or that at least PSC records do not show compliance thereof by PLDT, Telectronics and Tesco prayed that the effectivity of the increased rates be suspended until PLDT complies.chanroblesvirtualawlibrarychanrobles virtual law library
On January 11, 1965, PLDT registered its opposition to the petition just mentioned upon the grounds that: (1) the conditions in the original decision are no longer contained in the amended January 9, 1964 decision; (2) at the time PLDT's motion to reconsider the decision was resolved (January 9, 1964), it was impossible to comply with the condition of installing telephones because the deadline therefor [December 31, 1963] had long expired; and (3) PLDT, nonetheless, did install more than 5,000 telephones and continues to do so.chanroblesvirtualawlibrarychanrobles virtual law library
On January 26, 1965, Araneta University,6 Telectronics and Tesco filed in said cases, a joint petition "for a re-examination of the amount of the increase in rates" to be charged by PLDT. Appearing as telephone subscribers, they alleged that subsequent to the July 31, 1963 original decision "certain facts and circumstances were brought out disclosing or tending to disclose, that PLDT has acquired and/or is about to acquire, telephone equipment and material from its sister or associated companies abroad at excessive or exorbitant prices, although the same, or compatible equipment, may acquired from other sources, including domestic sources, at much less cost and under more favorable terms"; and that because of this, PLDT can carry out its improvement and expansion program at a lesser burden to its subscribers. They reiterated the prayer for suspension, and asked that, after hearing, the increased rates originally authorized be lowered "to a more equitable, reasonable and justifiable level."chanrobles virtual law library
On February 5, 1965, PLDT opposed the petition just described, because: (1) the petition seeks to revive a case which is already final and executory, and the decision thereunder has already gone into effect since January 1, 1965; (2) the petition is upon the same grounds urged by the same parties in PLDT's application [PSC Case 64-5437]7 for the approval of its financing agreement with Export Credits Insurance Corporation [ECIC] and are matters still pending resolution by PSC; and (3) the petition is premature, patently unmeritorious and groundless.chanroblesvirtualawlibrarychanrobles virtual law library
On February 16, 1965, PLDT moved to dismiss the petition of December 28, 1964, for the suspension of the effectivity of rates, filed by Telectronics and Tesco. Reasons: (a) that actually, from July 1, 1963 to December 31, 1963, PLDT has installed 9,482 telephones, and from January 1 to December 31, 1964, a total of 16,776 telephones; and (b) that a similar petition filed by one Ramon G. Umali was dismissed on January 18, 1965, not merely because Umali moved to dismiss it, but also f or the reason that, as PSC said. "the rate increases were authorized in a final decision on the merits on January 9, 1964, effective from January 1, 1965.chanroblesvirtualawlibrarychanrobles virtual law library
On February 22, 1965, PSC issued an order denying the motion to dismiss just recited, because it raises points evidentiary in character. PSC, however, stated that the denial is without prejudice to raising the same question at the proper time.chanroblesvirtualawlibrarychanrobles virtual law library
PSC set the two petitions - December 28, 1964, by Telectronics and Tesco; and January 26, 1965, by Araneta, Telectronics and Tesco - for hearing on March 10, 1965.chanroblesvirtualawlibrarychanrobles virtual law library
On March 3, 1965, PLDT filed a motion to reconsider the February 22, 1965 order and "for immediate resolution of grounds to dismiss" Telectronics and Tesco's petition dated December 28, 1964 and the other petition of January 26, 1965, filed by Araneta, Telectronics and Tesco. PLDT claims that its motion to dismiss of February 16, 1965 is planted not only on factual averments, but also on purely legal grounds, namely, the finality of the January 9, 1964 decision, the dismissal by PSC of a similar petition (Umali's), and the elimination in said January 9, 1964 decision of the conditions imposed in the original decision of July 31, 1963.chanroblesvirtualawlibrarychanrobles virtual law library
The PSC order [signed by respondent Medina] of March 5, 1965, denying the motion for reconsideration, stated:
The fact that the decision rendered by this Commission on July 31, 1963 as amended by the majority opinion of January 9, 1964, is final with respect to the merits of the case, does not deprive the undersigned of his supervisory powers to determine whether any of the conditions imposed in said decision had been violated or ignored by the public utility concerned or whether said public utility is or is not rendering adequate, sufficient and satisfactory service.chanroblesvirtualawlibrarychanrobles virtual law library
Furthermore, Section 16 (m) of the Public Service Law gives the Commission ample powers to amend, modify or even to revoke any order or certificate of public convenience granted, whenever the circumstances have materially changed.
This order was received by the PLDT on March 12, 1965.chanroblesvirtualawlibrarychanrobles virtual law library
Hence, the present petition for prohibition filed on March 25, 1965.chanroblesvirtualawlibrarychanrobles virtual law library
Upon respondents' separate returns to the petition, and after oral arguments and memoranda, the case for prohibition was submitted to this Court for decision.chanroblesvirtualawlibrarychanrobles virtual law library
Since then, supervening incidents occurred.chanroblesvirtualawlibrarychanrobles virtual law library
On November 7, 1966, Telectronics and Tesco moved in the PSC to dismiss their petition of December 28, 1964 to suspend the effectivity of increased rates. They state that PLDT has substantially complied with the conditions prescribed in the July 31, 1963 decision, and that because PLDT has shown good faith in rendering adequate service, "the rates as authorized in the decision of July 31, 1963 as amended by that of January 9, 1964, can no longer be suspended or reexamined under the same proceedings."chanrobles virtual law library
Thereafter [by petition which bears date of October 27, 1966], Telectronics and Tesco registered in PSC a motion to dismiss their petition of January 26, 1965 for rate reexamination, insofar as they are concerned. They there aver that the compromise agreement filed in the case of Lozano vs. PSC, et al. (L-25979) already included "provisions regarding purchases by PLDT" of its equipment and supplies (which agreement was referred by this Court to PSC, approved by the latter on July 22, 1965, and was the basis of the dismissal by this Court of the Lozano case). They allege that the compromise agreement "prescribed the factors to be considered and the methods to be adopted by the PLDT in making purchases of equipment and supplies, including provisions for competitive bidding therein specified." Movants then believed that the rate reexamination proceedings have become moot, and felt satisfied that public interest has been served.chanroblesvirtualawlibrarychanrobles virtual law library
On November 18,1966, PSC issued an order, which reads: "Upon motion of counsel for the petitioners, without objection on the part of the respondent, the petition filed in this case is considered withdrawn and the case dismissed without prejudice.8chanrobles virtual law library
With the foregoing backdrop, we grapple with the problems posited by the prohibition case now before us.chanroblesvirtualawlibrarychanrobles virtual law library
1. Forefront amongst these is Araneta's insistence that PSC suspend the effectivity of PLDT rates. The theory relied upon is that the conditions in the July 31, 1963 decision have not yet been met.chanroblesvirtualawlibrarychanrobles virtual law library
Tersely stated, the key question is this: Are the conditions in the July 31, 1963 original decision taken away by the January 9, 1964 amended decision?chanrobles virtual law library
This requires but a comparison of the two decisions. So comparing, it will not be difficult to arrive at the conclusion that the conditions previously imposed are no longer tacked to the amended decision.chanroblesvirtualawlibrarychanrobles virtual law library
To fully project the marked difference between the two PSC decisions, we set them out in parallel columns:
Original Judgment of July 31, 1963 | Amended Judgment of January 9, 1964 | |
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"FOR ALL THE FOREGOING CONSIDERATIONS, the Commission:chanrobles virtual law library (1) HEREBY APPROVES AND AUTHORIZES the expansion program proposed by applicant PLDT as projected in Exhibits F, F-1, F-2, F-3, to F-3-S and other pertinent exhibits, subject to the express condition (a) that a legislative or municipal franchise be obtained, within the period of one (1) year from the date of this decision, permitting and authorizing the PLDT to construct, maintain and operate a local telephone system; and (b) that within the same period of one (1) year, a certificate of public convenience and necessity be obtained from the Public Service Commission for said purpose;chanrobles virtual law library (2) HEREBY APPROVES AND AUTHORIZES the increase of rates projected in the application but must not exceed forty-seven percent (47%) for business telephones including PBX and PABX services and forty percent (40%) for residential and other services, over and above the schedule of rates authorized by the PSC in its decision of September 1, 1950 in Case No. 16533; the new rates herein authorized may take effect from January 1, 1965, subject to the following conditions:chanrobles virtual law library (a) PLDT must first obtain a valid and subsisting legislative or municipal franchise and / or a valid and subsisting certificate of public convenience and necessity from the Public Service Commission before enforcing said schedule of rates.chanrobles virtual law library (b) PLDT must show its good faith and its willingness to render an efficient, adequate and satisfactory service by removing all faulty installations, improving its present inadequate and unsatisfactory service and making good its promise to connect not less then five thousand (5,000) new telephones from July 1, 1963 to the end of the year, and ten thousand (10,000) new telephones from January 1 to December 31, 1965 and be able to meet in full all applications for new installations and/or transfers after 1965. As 1964 will be a year of work due to PLDT's expansion and reconstruction program, the number of new telephones to be installed during said year will depend on the work and circumstances of each individual application.chanrobles virtual law library (c) In order to avoid complaints of favoritism and / or suspicions of discrimination or that the new telephone connections or transfers are effected for money consideration, all telephone connections and / or transfers after the receipt of this decision shall be undertaken only upon prior approval of the Public Service Commission.9 x x   x" |
"FOR ALL THE FOREGOING CONSIDERATIONS, we hereby maintain with minor modifications the decision dated July 31, 1963 as penned by the Hon. Enrique Medina, and the Commission:chanrobles virtual law library (1) HEREBY APPROVES AND AUTHORIZES the expansion and improvement program proposed by the application PLDT as projected in Exhibits F, F-1, F-2, F-3 to F-3-S and other pertinent exhibits;chanrobles virtual law library (2) HEREBY APPROVES AND AUTHORIZES the increase of rates by forty seven percent (47%) for business services, including PBX and PABX services and forty percent (40%) for residential services, over and above the schedule of rates authorized by the Commission in its decision of September 1, 1950 in Case No. 16533; the new rates to take effect from January 1, 1965;chanrobles virtual law library (3) HEREBY APPROVES PLDT's applications docketed as PSC Cases Nos. 61-5271, 61-2111, and 62-4169;chanrobles virtual law library (4) HEREBY GRANTS a Provisional Certificate of Public Convenience and Necessity to the applicant, to operate and maintain its present telephone plant and facilities in the City of Manila and Suburbs and to add thereto the facilities and equipment specified in Exhs. F, F-1, F-2, F-3, F-3-S and other pertinent exhibits; said provisional certificate is valid until December 31, 1964 pending formal application by the PLDT for a certificate in accordance with and subject to the applicable terms and conditions specified in Act 3436, as amended by Commonwealth Act 407; andchanrobles virtual law library (5) HEREBY MODIFIES AND AMENDS the decision of the Commission dated July 31, 1963 accordingly." |
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