G.R. No. L-18841 Republic v PLDT

7/17/2019 G.R. No. L-18841 Republic v PLDT

http://slidepdf.com/reader/full/gr-no-l-18841-republic-v-pldt 1/10

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-!!" #anua$% &'( )*)

REPUBL+C O, TE P+L+PP+NES( plainti-appellant(

/s.

P+L+PP+NE LONG 0+STANCE TELEPONE COMPAN1(

2efen2ant-appellant.

O3ce of the Solicito$ Gene$al A$tu$o A. Alaf$i4( Assistant

Solicito$ Gene$al Antonio A. To$$es an2 Solicito$ Ca5ilo 0.

6uiason fo$ plainti-appellant.

Ponce En$ile( Si7uion Re%na( Montecillo an2 Belo fo$

2efen2ant-appellant.

RE1ES( #.B.L.( #.8

0i$ect appeals( upon a 9oint $eco$2 on appeal( b% both the

plainti an2 the 2efen2ant f$o5 the 2is5issal( afte$ hea$in7(

b% the Cou$t of ,i$st +nstance of Manila( in its Ci/il Case No.:;!<;( of thei$ $especti/e co5plaint an2 counte$clai5s( but

5a=in7 pe$5anent a p$eli5ina$% 5an2ato$% in9unction

the$etofo$e issue2 a7ainst the 2efen2ant on the

inte$connection of telephone facilities o>ne2 an2 ope$ate2

b% sai2 pa$ties.

The plainti( Republic of the Philippines( is a political entit%e?e$cisin7 7o/e$n5ental po>e$s th$ou7h its b$anches an2

inst$u5entalities( one of >hich is the Bu$eau of

Teleco55unications. That o3ce >as c$eate2 on #ul% )"'(

un2e$ E?ecuti/e O$2e$ No. )"( >ith the follo>in7 po>e$s an2

2uties( in a22ition to ce$tain po>e$s an2 2uties fo$5e$l%

/este2 in the 0i$ecto$ of Posts8 a>phil.@t

SEC. '). The Bu$eau of Teleco55unications shall e?e$cisethe follo>in7 po>e$s an2 2uties8

a To ope$ate an2 5aintain e?istin7 >i$e-tele7$aph an2

$a2io-tele7$aph o3ces( stations( an2 facilities( an2 those to

be establishe2 to $esto$e the p$e->a$ teleco55unication

se$/ice un2e$ the Bu$eau of Posts( as >ell as such a22itional

o3ces o$ stations as 5a% he$eafte$ be establishe2 to p$o/i2e

teleco55unication se$/ice in places $eDui$in7 such se$/ice

b To in/esti7ate( consoli2ate( ne7otiate fo$( ope$ate an2

5aintain >i$e-telephone o$ $a2io telephone co55unication

se$/ice th$ou7hout the Philippines b% utili4in7 such e?istin7

facilities in cities( to>ns( an2 p$o/inces as 5a% be foun2

feasible an2 un2e$ such te$5s an2 con2itions o$

a$$an7e5ents >ith the p$esent o>ne$s o$ ope$ato$s the$eof

as 5a% be a7$ee2 upon to the satisfaction of all conce$ne2



c To p$esc$ibe( sub9ect to app$o/al b% the 0epa$t5ent ea2(

eDuitable $ates of cha$7es fo$ 5essa7es han2le2 b% the

s%ste5 an2Fo$ fo$ ti5e calls an2 othe$ se$/ices that 5a% be

$en2e$e2 b% sai2 s%ste5

2 To establish an2 5aintain coastal stations to se$/e ships

at sea o$ ai$c$afts an2( >hen public inte$est so $eDui$es( to

en7a7e in the inte$national teleco55unication se$/ice in

a7$ee5ent >ith othe$ count$ies 2esi$in7 to establish such

se$/ice >ith the Republic of the Philippines an2

e To abi2e b% all e?istin7 $ules an2 $e7ulations p$esc$ibe2

b% the +nte$national Teleco55unication Con/ention $elati/e

to the accountin7( 2isposition an2 e?chan7e of 5essa7es

han2le2 in the inte$national se$/ice( an2 those that 5a%

he$eafte$ be p$o5ul7ate2 b% sai2 con/ention an2 a2he$e2 to

b% the Go/e$n5ent of the Republic of the Philippines.

The 2efen2ant( Philippine Lon7 0istance Telephone

Co5pan% PL0T fo$ sho$t( is a public se$/ice co$po$ation

hol2in7 a le7islati/e f$anchise( Act :"&*( as a5en2e2 b%Co55on>ealth Act "<'( to install( ope$ate an2 5aintain a

telephone s%ste5 th$ou7hout the Philippines an2 to ca$$% on

the business of elect$ical t$ans5ission of 5essa7es >ithin

the Philippines an2 bet>een the Philippines an2 the

telephone s%ste5s of othe$ count$ies. & The RCA

Co55unications( +nc.( >hich is not a pa$t% to the p$esent

case but has cont$actual $elations >ith the pa$ties is an

A5e$ican co$po$ation autho$i4e2 to t$ansact business in the

Philippines an2 is the 7$antee( b% assi7n5ent( of a le7islati/ef$anchise to ope$ate a 2o5estic station fo$ the $eception an2

t$ans5ission of lon7 2istance >i$eless 5essa7es Act &'!

an2 to ope$ate b$oa2castin7 an2 $a2io-telephone an2 $a2io-

tele7$aphic co55unications se$/ices Act :!<. :

So5eti5e in )::( the 2efen2ant( PL0T( an2 the RCA

Co55unications( +nc.( ente$e2 into an a7$ee5ent >he$eb%telephone 5essa7es( co5in7 f$o5 the Unite2 States an2

$ecei/e2 b% RCAs 2o5estic station( coul2 auto5aticall% be

t$ansfe$$e2 to the lines of PL0T an2 /ice-/e$sa( fo$ calls

collecte2 b% the PL0T fo$ t$ans5ission f$o5 the Philippines to

the Unite2 States. The cont$actin7 pa$ties a7$ee2 to 2i/i2e

the tolls( as follo>s8 &;H to PL0T an2 ';H to RCA. The

sha$in7 >as a5en2e2 in )" to :<H fo$ PL0T an2 '<H fo$

RCA( an2 a7ain a5en2e2 in )"' to a ;<-;< basis. The

a$$an7e5ent >as late$ e?ten2e2 to $a2io-telephone

5essa7es to an2 f$o5 Eu$opean an2 Asiatic count$ies. Thei$

cont$act containe2 a stipulation that eithe$ pa$t% coul2

te$5inate it on a &"-5onth notice to the othe$. " On &

,eb$ua$% );*( PL0T 7a/e notice to RCA to te$5inate thei$

cont$act on & ,eb$ua$% );!. ;

Soon afte$ its c$eation in )"'( the Bu$eau of

Teleco55unications set up its o>n Go/e$n5ent Telephone

S%ste5 b% utili4in7 its o>n app$op$iation an2 eDuip5ent an2b% $entin7 t$un= lines of the PL0T to enable 7o/e$n5ent

o3ces to call p$i/ate pa$ties. * +ts application fo$ the use of

these t$un= lines >as in the usual fo$5 of applications fo$

telephone se$/ice( containin7 a state5ent( abo/e the

si7natu$e of the applicant( that the latte$ >ill abi2e b% the

$ules an2 $e7ulations of the PL0T >hich a$e on Ile >ith the

Public Se$/ice Co55ission. ' One of the 5an% $ules p$ohibits

the public use of the se$/ice fu$nishe2 the telephone

subsc$ibe$ fo$ his p$i/ate use. ! The Bu$eau has e?ten2e2 itsse$/ices to the 7ene$al public since )"!( ) usin7 the sa5e



t$un= lines o>ne2 b%( an2 $ente2 f$o5( the PL0T( an2

p$esc$ibin7 its the Bu$eaus o>n sche2ule of $ates. <

Th$ou7h these t$un= lines( a Go/e$n5ent Telephone S%ste5

GTS subsc$ibe$ coul2 5a=e a call to a PL0T subsc$ibe$ in

the sa5e >a% that the latte$ coul2 5a=e a call to the fo$5e$.

On ; Ma$ch );!( the plainti( th$ou7h the 0i$ecto$ of

Teleco55unications( ente$e2 into an a7$ee5ent >ith RCA

Co55unications( +nc.( fo$ a 9oint o/e$seas telephone se$/ice

>he$eb% the Bu$eau >oul2 con/e% $a2io-telephone o/e$seas

calls $ecei/e2 b% RCAs station to an2 f$o5 local $esi2ents.

Actuall%( the% inau7u$ate2 this 9oint ope$ation on & ,eb$ua$%

);!( un2e$ a Jp$o/isionalJ a7$ee5ent. &

On ' Ap$il );!( the 2efen2ant Philippine Lon7 0istance

Telephone Co5pan%( co5plaine2 to the Bu$eau of

Teleco55unications that sai2 bu$eau >as /iolatin7 the

con2itions un2e$ >hich thei$ P$i/ate B$anch E?chan7e PBK

is inte$-connecte2 >ith the PL0Ts facilities( $efe$$in7 to the

$ente2 t$un= lines( fo$ the Bu$eau ha2 use2 the t$un= lines

not onl% fo$ the use of 7o/e$n5ent o3ces but e/en to se$/e

p$i/ate pe$sons o$ the 7ene$al public( in co5petition >ith the

business of the PL0T an2 7a/e notice that if sai2 /iolations

>e$e not stoppe2 b% 5i2ni7ht of & Ap$il );!( the PL0T>oul2 se/e$ the telephone connections. : hen the PL0T

$ecei/e2 no $epl%( it 2isconnecte2 the t$un= lines bein7

$ente2 b% the Bu$eau at 5i2ni7ht on & Ap$il );!. " The

$esult >as the isolation of the Philippines( on telephone

se$/ices( f$o5 the $est of the >o$l2( e?cept the Unite2 States.

;

At that ti5e( the Bu$eau >as 5aintainin7 ;(<<< telephones

an2 ha2 ;(<<< pen2in7 applications fo$ telephone

connection. * The PL0T >as also 5aintainin7 *<(<<<

telephones an2 ha2 also &<(<<< pen2in7 applications. '

Th$ou7h the %ea$s( neithe$ of the5 has been able to Ill up

the 2e5an2 fo$ telephone se$/ice.

The Bu$eau of Teleco55unications ha2 p$opose2 to the

PL0T on ! #anua$% );! that both ente$ into an

inte$connectin7 a7$ee5ent( >ith the 7o/e$n5ent pa%in7 on

a call basis fo$ all calls passin7 th$ou7h the inte$connectin7

facilities f$o5 the Go/e$n5ent Telephone S%ste5 to the

PL0T. ! The PL0T $eplie2 that it >as >illin7 to ente$ into an

a7$ee5ent on o/e$seas telephone se$/ice to Eu$ope an2

Asian count$ies p$o/i2e2 that the Bu$eau >oul2 sub5it to the

9u$is2iction an2 $e7ulations of the Public Se$/ice Co55ission

an2 in consi2e$ation of :' F&H of the 7$oss $e/enues. ) +n

its 5e5o$an2u5 in lieu of o$al a$7u5ent in this Cou$t 2ate2

) ,eb$ua$% )*"( on pa7e !( the 2efen2ant $e2uce2 its oe$

to :: F: H F: as its sha$e in the o/e$seas telephone

se$/ice. The p$oposals >e$e not accepte2 b% eithe$ pa$t%.

On & Ap$il );!( plainti Republic co55ence2 suit a7ainst

the 2efen2ant( Philippine Lon7 0istance Telephone Co5pan%(in the Cou$t of ,i$st +nstance of Manila Ci/il Case No. :;!<;(

p$a%in7 in its co5plaint fo$ 9u275ent co55an2in7 the PL0T

to e?ecute a cont$act >ith plainti( th$ou7h the Bu$eau( fo$

the use of the facilities of 2efen2ants telephone s%ste5

th$ou7hout the Philippines un2e$ such te$5s an2 con2itions

as the cou$t 5i7ht consi2e$ $easonable( an2 fo$ a >$it of

p$eli5ina$% in9unction a7ainst the 2efen2ant co5pan% to

$est$ain the se/e$ance of the e?istin7 telephone connections

an2Fo$ $esto$e those se/e$e2.



Actin7 on the application of the plainti( an2 on the 7$oun2

that the se/e$ance of telephone connections b% the

2efen2ant co5pan% >oul2 isolate the Philippines f$o5 othe$

count$ies( the cou$t a Duo( on " Ap$il );!( issue2 an o$2e$

fo$ the 2efen2ant8

to fo$th>ith $econnect an2 $esto$e the se/ent%-ei7ht '!

t$un= lines that it has 2isconnecte2 bet>een the facilities of

the Go/e$n5ent Telephone S%ste5( inclu2in7 its o/e$seas

telephone se$/ices( an2 the facilities of 2efen2ant & to

$ef$ain f$o5 ca$$%in7 into eect its th$eat to se/e$ the

e?istin7 telephone co55unication bet>een the Bu$eau of

Teleco55unications an2 2efen2ant( an2 not to 5a=e

connection o/e$ its telephone s%ste5 of telephone callsco5in7 to the Philippines f$o5 fo$ei7n count$ies th$ou7h the

sai2 Bu$eaus telephone facilities an2 the $a2io facilities of

RCA Co55unications( +nc. an2 : to accept an2 connect

th$ou7h its telephone s%ste5 all such telephone calls co5in7

to the Philippines f$o5 fo$ei7n count$ies until fu$the$ o$2e$

of this Cou$t.

On &! Ap$il );!( the 2efen2ant co5pan% Ile2 its ans>e$(>ith counte$clai5s.

+t 2enie2 an% obli7ation on its pa$t to e?ecute a cont$a$% of

se$/ices >ith the Bu$eau of Teleco55unications conteste2

the 9u$is2iction of the Cou$t of ,i$st +nstance to co5pel it to

ente$ into inte$connectin7 a7$ee5ents( an2 a/e$$e2 that it

>as 9ustiIe2 to 2isconnect the t$un= lines he$etofo$e lease2

to the Bu$eau of Teleco55unications un2e$ the e?istin7a7$ee5ent because its facilities >e$e bein7 use2 in f$au2 of

its $i7hts. PL0T fu$the$ clai5e2 that the Bu$eau >as en7a7in7

in co55e$cial telephone ope$ations in e?cess of autho$it%( in

co5petition >ith( an2 to the p$e9u2ice of( the PL0T( usin7

2efen2ants o>n telephone poles( >ithout p$ope$ accountin7

of $e/enues.

Afte$ t$ial( the lo>e$ cou$t $en2e$e2 9u275ent that it coul2

not co5pel the PL0T to ente$ into an a7$ee5ent >ith the

Bu$eau because the pa$ties >e$e not in a7$ee5ent that

un2e$ E?ecuti/e O$2e$ )"( establishin7 the Bu$eau of

Teleco55unications( sai2 Bu$eau >as not li5ite2 to se$/icin7

7o/e$n5ent o3ces alone( no$ >as the$e an% in the cont$act

of lease of the t$un= lines( since the PL0T =ne>( o$ ou7ht to

ha/e =no>n( at the ti5e that thei$ use b% the Bu$eau >as to

be public th$ou7hout the +slan2s( hence the Bu$eau >as

neithe$ 7uilt% of f$au2( abuse( o$ 5isuse of the poles of the

PL0T an2( in /ie> of se$ious public p$e9u2ice that >oul2

$esult f$o5 the 2isconnection of the t$un= lines( 2ecla$e2 the

p$eli5ina$% in9unction pe$5anent( althou7h it 2is5isse2 both

the co5plaint an2 the counte$clai5s.

Both pa$ties appeale2.

Ta=in7 up I$st the appeal of the Republic( the latte$

co5plains of the action of the t$ial cou$t in 2is5issin7 the

pa$t of its co5plaint see=in7 to co5pel the 2efen2ant to

ente$ into an inte$connectin7 cont$act >ith it( because the

pa$ties coul2 not a7$ee on the te$5s an2 con2itions of the

inte$connection( an2 of its $efusal to I? the te$5s an2

con2itions the$efo$.



e a7$ee >ith the cou$t belo> that pa$ties can not be

coe$ce2 to ente$ into a cont$act >he$e no a7$ee5ent is ha2

bet>een the5 as to the p$incipal te$5s an2 con2itions of the

cont$act. ,$ee2o5 to stipulate such te$5s an2 con2itions is of

the essence of ou$ cont$actual s%ste5( an2 b% e?p$ess

p$o/ision of the statute( a cont$act 5a% be annulle2 if tainte2

b% /iolence( inti5i2ation( o$ un2ue inuence A$ticles :<*(

::*( ::'( Ci/il Co2e of the Philippines. But the cou$t a Duo

has appa$entl% o/e$loo=e2 that >hile the Republic 5a% not

co5pel the PL0T to celeb$ate a cont$act >ith it( the Republic

5a%( in the e?e$cise of the so/e$ei7n po>e$ of e5inent

2o5ain( $eDui$e the telephone co5pan% to pe$5it

inte$connection of the 7o/e$n5ent telephone s%ste5 an2

that of the PL0T( as the nee2s of the 7o/e$n5ent se$/ice

5a% $eDui$e( sub9ect to the pa%5ent of 9ust co5pensation to

be 2ete$5ine2 b% the cou$t. No5inall%( of cou$se( the po>e$

of e5inent 2o5ain $esults in the ta=in7 o$ app$op$iation oftitle to( an2 possession of( the e?p$op$iate2 p$ope$t% but no

co7ent $eason appea$s >h% the sai2 po>e$ 5a% not be

a/aile2 of to i5pose onl% a bu$2en upon the o>ne$ of

con2e5ne2 p$ope$t%( >ithout loss of title an2 possession. +t

is unDuestionable that $eal p$ope$t% 5a%( th$ou7h

e?p$op$iation( be sub9ecte2 to an ease5ent of $i7ht of >a%.

The use of the PL0Ts lines an2 se$/ices to allo> inte$-se$/ice

connection bet>een both telephone s%ste5s is not 5uch

2ie$ent. +n eithe$ case p$i/ate p$ope$t% is sub9ecte2 to a

bu$2en fo$ public use an2 beneIt. +f( un2e$ section *( A$ticle

K+++( of the Constitution( the State 5a%( in the inte$est of

national >elfa$e( t$ansfe$ utilities to public o>ne$ship upon

pa%5ent of 9ust co5pensation( the$e is no $eason >h% the

State 5a% not $eDui$e a public utilit% to $en2e$ se$/ices in the

7ene$al inte$est( p$o/i2e2 9ust co5pensation is pai2 the$efo$.

Ulti5atel%( the beneIcia$% of the inte$connectin7 se$/ice

>oul2 be the use$s of both telephone s%ste5s( so that the

con2e5nation >oul2 be fo$ public use.

The Bu$eau of Teleco55unications( un2e$ section '! b of

E?ecuti/e O$2e$ No. )"( 5a% ope$ate an2 5aintain >i$e

telephone o$ $a2io telephone co55unications th$ou7hout the

Philippines b% utili4in7 e?istin7 facilities in cities( to>ns( an2

p$o/inces un2e$ such te$5s an2 con2itions o$ a$$an7e5ent

>ith p$esent o>ne$s o$ ope$ato$s as 5a% be a7$ee2 upon to

the satisfaction of all conce$ne2 but the$e is nothin7 in this

section that >oul2 e?clu2e $eso$t to con2e5nation

p$ocee2in7s >he$e un$easonable o$ un9ust te$5s an2

con2itions a$e e?acte2( to the e?tent of c$ipplin7 o$ se$iousl%

ha5pe$in7 the ope$ations of sai2 Bu$eau.

A pe$usal of the co5plaint sho>s that the Republics cause

of action is p$e2icate2 upon the $a2io telephonic isolation of

the Bu$eaus facilities f$o5 the outsi2e >o$l2 if the se/e$ance

of inte$connection >e$e to be ca$$ie2 out b% the PL0T(

the$eb% p$e/entin7 the Bu$eau of Teleco55unications f$o5

p$ope$l% 2ischa$7in7 its functions( to the p$e9u2ice of the

7ene$al public. Sa/e fo$ the p$a%e$ to co5pel the PL0T to

ente$ into a cont$act an2 the p$a%e$ is no essential pa$t of

the plea2in7( the a/e$5ents 5a=e out a case fo$ co5pulso$%

$en2e$in7 of inte$-connectin7 se$/ices b% the telephone

co5pan% upon such te$5s an2 con2itions as the cou$t 5a%

2ete$5ine to be 9ust. An2 since the lo>e$ cou$t foun2 that

both pa$ties Ja$e p$acticall% at one that 2efen2ant PL0T isentitle2 to $easonable co5pensation f$o5 plainti fo$ the

$easonable use of the fo$5e$s telephone facilitiesJ 0ecision(

Reco$2 on Appeal( pa7e &&"( the lo>e$ cou$t shoul2 ha/e

p$ocee2e2 to t$eat the case as one of con2e5nation of such

se$/ices in2epen2entl% of cont$act an2 p$ocee2e2 to

2ete$5ine the 9ust an2 $easonable co5pensation fo$ the

sa5e( instea2 of 2is5issin7 the petition.



This /ie> >e ha/e ta=en of the t$ue natu$e of the Republics

petition necessa$il% $esults in o/e$$ulin7 the plea of

2efen2ant-appellant PL0T that the cou$t of I$st instance ha2

no 9u$is2iction to ente$tain the petition an2 that the p$ope$

fo$u5 fo$ the action >as the Public Se$/ice Co55ission. That

bo2%( un2e$ the la>( has no autho$it% to pass upon actions

fo$ the ta=in7 of p$i/ate p$ope$t% un2e$ the so/e$ei7n $i7ht of

e5inent 2o5ain. ,u$the$5o$e( >hile the 2efen2ant telephone

co5pan% is a public utilit% co$po$ation >hose f$anchise(

eDuip5ent an2 othe$ p$ope$ties a$e un2e$ the 9u$is2iction(

supe$/ision an2 cont$ol of the Public Se$/ice Co55ission

Sec. :( Public Se$/ice Act( %et the plaintis

teleco55unications net>o$= is a public se$/ice o>ne2 b% the

Republic an2 ope$ate2 b% an inst$u5entalit% of the National

Go/e$n5ent( hence e?e5pt( un2e$ Section " of the Public

Se$/ice Act( f$o5 such 9u$is2iction( supe$/ision an2 cont$ol.

The Bu$eau of Teleco55unications >as c$eate2 in pu$suanceof a state polic% $eo$7ani4in7 the 7o/e$n5ent o3ces

to 5eet the e?i7encies atten2ant upon the establish5ent of

the f$ee an2 in2epen2ent Go/e$n5ent of the Republic of the

Philippines( an2 fo$ the pu$pose of p$o5otin7 si5plicit%(

econo5% an2 e3cienc% in its ope$ation Section ( Republic

Act No. ;

an2 the 2ete$5ination of state polic% is not /este2 in the

Co55ission Utilities Co5. /s. Ba$ton/ille Bus Line( &)< +ll.

;'" &" N.E. :':.

0efen2ant PL0T( as appellant( conten2s that the cou$t

belo> >as in e$$o$ in not hol2in7 that the Bu$eau of

Teleco55unications >as not e5po>e$e2 to en7a7e in

co55e$cial telephone business( an2 in $ulin7 that sai2

2efen2ant >as not 9ustiIe2 in 2isconnectin7 the telephone

t$un= lines it ha2 p$e/iousl% lease2 to the Bu$eau. e In2

that the cou$t a Duo $ule2 co$$ectl% in $e9ectin7 both

asse$tions.

E?ecuti/e O$2e$ No. )"( Se$ies of )"'( $eo$7ani4in7 the

Bu$eau of Teleco55unications( e?p$essl% e5po>e$e2 the

latte$ in its Section ')( subsection b( to Jne7otiate fo$(

ope$ate an2 5aintain >i$e telephone o$ $a2io telephone

co55unication se$/ice th$ou7hout the PhilippinesJ( an2( in

subsection c( Jto p$esc$ibe( sub9ect to app$o/al b% the

0epa$t5ent ea2( eDuitable $ates of cha$7es fo$ 5essa7es

han2le2 b% the s%ste5 an2Fo$ fo$ ti5e calls an2 othe$

se$/ices that 5a% be $en2e$e2 b% the s%ste5J. Nothin7 in

these p$o/isions li5its the Bu$eau to non-co55e$cialacti/ities o$ p$e/ents it f$o5 se$/in7 the 7ene$al public. +t

5a% be that in its o$i7inal p$ospectuses the Bu$eau o3cials

ha2 state2 that the se$/ice >oul2 be li5ite2 to 7o/e$n5ent

o3ces8 but such li5itations coul2 not bloc= futu$e e?pansion

of the s%ste5( as autho$i4e2 b% the te$5s of the E?ecuti/e

O$2e$( no$ coul2 the o3cials of the Bu$eau bin2 the

Go/e$n5ent not to en7a7e in se$/ices that a$e autho$i4e2 b%

la>. +t is a >ell-=no>n $ule that e$$oneous application an2

enfo$ce5ent of the la> b% public o3ce$s 2o not bloc=subseDuent co$$ect application of the statute PL0T /s.

Collecto$ of +nte$nal Re/enue( )< Phil. *'*( an2 that the

Go/e$n5ent is ne/e$ estoppe2 b% 5ista=e o$ e$$o$ on the

pa$t of its a7ents Pine2a /s. Cou$t of ,i$st +nstance of

Ta%abas( ;& Phil. !<:( !<' Ben7uet Consoli2ate2 Minin7 Co.

/s. Pine2a( )! Phil. '( '&".

The theses that the Bu$eaus co55e$cial se$/icesconstitute2 unfai$ co5petition( an2 that the Bu$eau >as



7uilt% of f$au2 an2 abuse un2e$ its cont$act( a$e( li=e>ise(

untenable.

,i$st( the co5petition is 5e$el% h%pothetical( the 2e5an2

fo$ telephone se$/ice bein7 /e$% 5uch 5o$e than the

suppose2 co5petito$s can suppl%. As p$e/iousl% note2( thePL0T ha2 &<(<<< pen2in7 applications at the ti5e( an2 the

Bu$eau ha2 anothe$ ;(<<<. The telephone co5pan%s inabilit%

to 5eet the 2e5an2s fo$ se$/ice a$e noto$ious e/en no>.

Secon2( the cha$te$ of the 2efen2ant e?p$essl% p$o/i2es8

SEC. ". The $i7hts he$ein 7$ante2 shall not be e?clusi/e(

an2 the $i7hts an2 po>e$ to 7$ant to an% co$po$ation(

association o$ pe$son othe$ than the 7$antee f$anchise fo$ thetelephone o$ elect$ical t$ans5ission of 5essa7e o$ si7nals

shall not be i5pai$e2 o$ aecte2 b% the 7$antin7 of this

f$anchise8 Act :":*

An2 thi$2( as the t$ial cou$t co$$ectl% state2( J>hen the

Bu$eau of Teleco55unications subsc$ibe2 to the t$un= lines(

2efen2ant =ne> o$ shoul2 ha/e =no>n that thei$ use b% the

subsc$ibe$ >as 5o$e o$ less public an2 all e5b$acin7 in

natu$e( that is( th$ou7hout the Philippines( if not ab$oa2J

0ecision( Reco$2 on Appeal( pa7e &*.

The acceptance b% the 2efen2ant of the pa%5ent of $entals(

2espite its =no>le27e that the plainti ha2 e?ten2e2 the use

of the t$un= lines to co55e$cial pu$poses( continuousl% since

)"!( i5plies assent b% the 2efen2ant to such e?ten2e2 use.

Since this $elationship has been 5aintaine2 fo$ a lon7 ti5e

an2 the public has pat$oni4e2 both telephone s%ste5s( an2

thei$ inte$connection is to the public con/enience( it is too

late fo$ the 2efen2ant to clai5 5isuse of its facilities( an2 it is

not no> at libe$t% to unilate$all% se/e$ the ph%sical

connection of the t$un= lines.

...( but the$e is hi7h autho$it% fo$ the position that( >hensuch ph%sical connection has been /olunta$il% 5a2e( un2e$ a

fai$ an2 >o$=able a$$an7e5ent an2 7ua$antee2 b% cont$act

an2 the continuous line has co5e to be pat$oni4e2 an2

establishe2 as a 7$eat public con/enience( such connection

shall not in b$each of the a7$ee5ent be se/e$e2 b% one of

the pa$ties. +n that case( the public is hel2 to ha/e such an

inte$est in the a$$an7e5ent that its $i7hts 5ust $ecei/e 2ue

consi2e$ation. This position In2s app$o/al in State e? $el. /s.

Ca2>alle$( '& +n2. *)( *:*( !' N.E. *;<( an2 is state2 in

the elabo$ate an2 lea$ne2 opinion of Chief #ustice M%e$s asfollo>s8 JSuch ph%sical connection cannot be $eDui$e2 as of

$i7ht( but if such connection is /olunta$il% 5a2e b% cont$act(

as is he$e alle7e2 to be the case( so that the public acDui$es

an inte$est in its continuance( the act of the pa$ties in 5a=in7

such connection is eDui/alent to a 2ecla$ation of a pu$pose to

>ai/e the p$i5a$% $i7ht of in2epen2ence( an2 it i5poses

upon the p$ope$t% such a public status that it 5a% not be

2is$e7a$2e2J citin7 Mahan /. Mich. Tel. Co.( :& Mich. &"&(

): N.. *&)( an2 the $easons upon >hich it is in pa$t 5a2e to$est a$e $efe$$e2 to in the sa5e opinion( as follo>s8 Jhe$e

p$i/ate p$ope$t% is b% the consent of the o>ne$ in/este2 >ith

a public inte$est o$ p$i/ile7e fo$ the beneIt of the public( the

o>ne$ can no lon7e$ 2eal >ith it as p$i/ate p$ope$t% onl%( but

5ust hol2 it sub9ect to the $i7ht of the public in the e?e$cise

of that public inte$est o$ p$i/ile7e confe$$e2 fo$ thei$ beneIt.J

Allnut /. +n7lis !< & East( ;&'. The 2oct$ine of this ea$l%

case is the ac=no>le27e2 la>. Clinton-0unn Tel. Co. /.

Ca$olina Tel. Tel. Co.( '" S.E. *:*( *:!.



+t is clea$ that the 5ain $eason fo$ the ob9ection of the PL0T

lies in the fact that sai2 appellant 2i2 not e?pect that the

Bu$eaus telephone s%ste5 >oul2 e?pan2 >ith such $api2it%

as it has 2one but this e?pansion is no 7$oun2 fo$ the

2iscontinuance of the se$/ice a7$ee2 upon.

The last issue u$7e2 b% the PL0T as appellant is its $i7ht to

co5pensation fo$ the use of its poles fo$ bea$in7 telephone

>i$es of the Bu$eau of Teleco55unications. A25ittin7 that

section ) of the PL0T cha$te$ $ese$/es to the Go/e$n5ent

the p$i/ile7e >ithout co5pensation of usin7 the poles of the

7$antee to attach one ten-pin c$oss-a$5( an2 to install(

5aintain an2 ope$ate >i$es of its tele7$aph s%ste5 the$eon

P$o/i2e2( ho>e/e$( That the Bu$eau of Posts shall ha/e the

$i7ht to place a22itional c$oss-a$5s an2 >i$es on the poles of

the 7$antee b% pa%in7 a co5pensation( the $ate of >hich is to

be a7$ee2 upon b% the 0i$ecto$ of Posts an2 the 7$antee

the 2efen2ant counte$clai5e2 fo$ P!(''&.<< fo$ the use of

its poles b% the plainti( conten2in7 that >hat >as allo>e2f$ee use( un2e$ the afo$eDuote2 p$o/ision( >as one ten-pin

c$oss-a$5 attach5ent an2 onl% fo$ plaintis tele7$aph

s%ste5( not fo$ its telephone s%ste5 that sai2 section coul2

not $efe$ to the plaintis telephone s%ste5( because it 2i2

not ha/e such telephone s%ste5 >hen 2efen2ant acDui$e2 its

f$anchise. The i5plication of the a$7u5ent is that plainti has

to pa% fo$ the use of 2efen2ants poles if such use is fo$

plaintis telephone s%ste5 an2 has to pa% also if it attaches

5o$e than one ten-pin c$oss-a$5 fo$ tele7$aphicpu$poses.

As the$e is no p$oof that the telephone >i$es st$ain the

poles of the PL0T 5o$e than the tele7$aph >i$es( no$ that

the% cause 5o$e 2a5a7e than the >i$es of the tele7$aph

s%ste5( o$ that the Go/e$n5ent has attache2 to the poles

5o$e than one ten-pin c$oss-a$5 as pe$5itte2 b% the PL0T

cha$te$( >e see no point in this assi7n5ent of e$$o$. So lon7as the bu$2en to be bo$ne b% the PL0T poles is not inc$ease2(

>e see no $eason >h% the $ese$/ation in fa/o$ of the

tele7$aph >i$es of the 7o/e$n5ent shoul2 not be e?ten2e2 to

its telephone lines( an% ti5e that the 7o/e$n5ent 2eci2e2 to

en7a7e also in this =in2 of co55unication.

+n the ulti5ate anal%sis( the t$ue ob9ection of the PL0T to

continue the lin= bet>een its net>o$= an2 that of theGo/e$n5ent is that the latte$ co5petes Jpa$asiticall%J sic

>ith its o>n telephone se$/ices. Consi2e$in7( ho>e/e$( that

the PL0T f$anchise is non-e?clusi/e that it is >ell-=no>n that

2efen2ant PL0T is unable to a2eDuatel% cope >ith the

cu$$ent 2e5an2s fo$ telephone se$/ice( as sho>n b% the

nu5be$ of pen2in7 applications the$efo$ an2 that the PL0Ts

$i7ht to 9ust co5pensation fo$ the se$/ices $en2e$e2 to the

Go/e$n5ent telephone s%ste5 an2 its use$s is he$ein

$eco7ni4e2 an2 p$ese$/e2( the ob9ections of 2efen2ant-

appellant a$e >ithout 5e$it. To uphol2 the PL0Ts contention

is to subo$2inate the nee2s of the 7ene$al public to the $i7ht

of the PL0T to 2e$i/e p$oIt f$o5 the futu$e e?pansion of its

se$/ices un2e$ its non-e?clusi/e f$anchise.

ERE,ORE( the 2ecision of the Cou$t of ,i$st +nstance( no>

un2e$ appeal( is a3$5e2( e?cept in so fa$ as it 2is5isses the

petition of the Republic of the Philippines to co5pel the

Philippine Lon7 0istance Telephone Co5pan% to continue



se$/icin7 the Go/e$n5ent telephone s%ste5 upon such

te$5s( an2 fo$ a co5pensation( that the t$ial cou$t 5a%

2ete$5ine to be 9ust( inclu2in7 the pe$io2 elapse2 f$o5 the

Ilin7 of the o$i7inal co5plaint o$ petition. An2 fo$ this

pu$pose( the $eco$2s a$e o$2e$e2 $etu$ne2 to the cou$t of

o$i7in fo$ fu$the$ hea$in7s an2 othe$ p$ocee2in7s not

inconsistent >ith this opinion. No costs.

Concepcion( C.#.( 0i4on( Ma=alintal( al2i/a$( Sanche4( Cast$o(

,e$nan2o( Capist$ano( Teehan=ee an2 Ba$$e2o( ##.( concu$.

,ootnotes

Stipulate2 b% pa$ties Reco$2 on Appeal( pa7es '<-'&.

&+bi2.

:+bi2.

"E?hibit J6J( fol2e$ of e?hibits( pa7es -&( ( **-*'( *)( '&-

':( !&-!:( !!.

;T.s.n.( &* #anua$% );)( pa7e .

*E?hibit J&-AJ.

'Pa$tial Stipulation of ,acts an2 its Anne? J0J( $eco$2 on

appeal( pa7es '&( :"-:;.

!E?hibit J*J( pa7e ").

)T.s.n.( ) Ma$ch )*<( pa7e ).

<T.s.n.( ) Ma$ch )*<( pa7e ;'.

Anne? JMJ to Pa$tial Stipulation of ,acts( $eco$2 on appeal(

pa7e *"-''.

&T.s.n.( ) Ma$ch )*<( pa7es :<-:.

:Anne? JPJ( $eco$2 on appeal( pa7es !"-!*.

"Pa$tial Stipulation of ,acts( $eco$2 on appeal pa7e '!.

;0ecision( $eco$2 on appeal( pa7es &&-&&&.



*0ecision( $eco$2 on appeal( pa7e & E?hibit J:J( $eco$2 of

e?hibits( pa7e <: T.s.n.( ) Ma$ch )*<( pa7es ;* an2 ;).

'+bi2.

!Pa$tial Stipulation of ,acts( $eco$2 on appeal( pa7e '&.

)Pa$tial Stipulation of ,acts( $eco$2 on appeal( pa7e ''.

G.R. No. L-18841 Republic v PLDT

Documents

Transcript of G.R. No. L-18841 Republic v PLDT