Case Digest (G.R. No. 64888)
Facts:
Republic of the Philippines (Bureau of Telecommunications) v. Republic Telephone Company, Inc., G.R. No. 64888, November 28, 1996, the Supreme Court First Division, Hermosisima, Jr., J., writing for the Court.Petitioner officials of the Bureau of Telecommunications (BUTELCO) (Director or Acting Director, the Regional Superintendent, the Exchange Manager and Chief Operator at Malolos, Bulacan) sought review of a decision of the then Intermediate Appellate Court (Third Civil Cases Division) affirming a trial court judgment that made perpetual a writ of preliminary injunction restraining BUTELCO from operating a local telephone exchange and soliciting subscribers in Malolos. The injunction suit was originally filed on May 17, 1972 by respondent Republic Telephone Company, Inc. (RETELCO) (later referred to in the records as PLDT), which alleged unfair and ruinous competition because RETELCO held municipal and later legislative franchises for telephone service in Malolos.
RETELCO alleged it obtained a municipal franchise in December 1959 (approved January 1960) and a certificate of public convenience and necessity in March 1960; it later obtained a legislative franchise by Republic Act No. 3662 in 1963 and a corresponding PSC certificate in 1968. RETELCO invested in facilities and by 1969 had hundreds of subscribers (197 in 1963, 368 by May 1969) but claimed subscriber losses after BUTELCO announced and commenced its Malolos project in 1969 (subscribers fell to 255 in September 1969, 131 in October 1970, 125 by March 1972), asserting revenue losses and attributing decline to BUTELCO’s non-PSC-regulated rates.
After respondents’ motion to dismiss was denied, the trial court on June 30, 1972 issued a preliminary injunction (after RETELCO posted a P75,000 bond) restraining BUTELCO from operating and soliciting customers in Malolos. BUTELCO answered, moved to lift the injunction, and the Republic (on behalf of BUTELCO) intervened on December 7, 1972 asserting state property interests; the intervention was allowed. After trial, the Court of First Instance (Branch VI, Bulacan) found that BUTELCO’s operation violated Section 79 of Executive Order No. 94, Series of 1947 (which, the lower courts read as requiring negotiation and barring another entity from operating without arrangements with a present operator) and made the preliminary injunction permanent.
The Intermediate Appellate Court sustained the trial court, enjoining BUTELCO and the intervenor to desist from operating or soliciting in Malolos “UNTIL they comply with the requisites mentioned in Section 79 (B) of Executive Order No. 94 … or UNTIL such time as RETELCO’s telephone franchise in Malolos … shall have lawfully ceased to exist,” and cancelled the bond. BUTELCO urged that Section 79 had been repealed or modified by the 1972 Integrated Reorganization Plan (promulgated under Presidential Decree No. 1) expanding BUTELCO’s functions to provide communications for government offices and to augment private services; the appellate court rejected that contention.
Petitioners brought the present petition for review to the Supreme Court, assailing the appellate court’s rulings principally that the Integrated Reorganization Plan did not repeal or modify...(Subscriber-Only)
Issues:
- Did the Integrated Reorganization Plan (Promulgated under Presidential Decree No. 1) repeal or modify Section 79(b) of Executive Order No. 94 insofar as the functions of the Bureau of Telecommunications are concerned?
- Under Section 79(b) of Executive Order No. 94, does the Bureau of Telecommunications have an absolute prohibition against operating and maintaining a telephone system in an area where a private operator exists unless a prior mutually acceptable arrangement is first executed?
- Did RETELCO’s municipal and legislative franchises confer on it an exclusive right to operate and maintain the telephone system in Malolos, Bula...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)