Case Summary (G.R. No. L-41518)
Statutory Provision Challenged
The central issue pertains to Section 11 of Act No. 1446, which mandated that when any franchise or right of way is granted over the trackage lines of the grantee (Manila Electric Company), the terms of use and compensation to be paid shall be fixed by the members of the Supreme Court, sitting as a board of arbitrators. The decision of a majority of the Court members in this board was declared final and binding.
Procedural History
Manila Electric Company petitioned the Supreme Court, sitting as the board of arbitrators, to determine the terms and compensation regarding the use of the Pasig bridge by various transportation companies. Following the petition, copies were served to the Attorney General and affected transportation companies. The Attorney General disclaimed interest, but public utility operators filed opposition. After hearings and submission of memoranda, the case was ripe for resolution.
Legal Question: Authority of Supreme Court Members as Arbitrators
The Court examined whether the members of the Supreme Court, acting as a board of arbitrators, had the legal authority to fix terms and compensation as mandated by statute. It noted that the power was granted not to the Supreme Court as an institution but to its individual members sitting in a different capacity, and the decision was made final without recourse to judicial review.
Arbitration and Jurisdictional Principles
The Court underscored fundamental arbitration law principles: Arbitration is a contractual method for resolving disputes, and courts maintain jurisdiction despite arbitration agreements. Arbitration agreements cannot oust courts of jurisdiction nor deprive a party of judicial remedies, as enshrined in Articles 1820 and 1821 of the Civil Code. Philippine jurisprudence similarly prohibits arbitration clauses that close court doors outright on parties to disputes.
Conflict Between Finality and Judicial Recourse
The finality clause in Section 11 would leave public utility companies not party to the original franchise contract without access to judicial oversight. The Court recognized the inherent conflict in vesting final decision-making power in individual Justices acting as arbitrators, thereby precluding judicial remedy and potentially rendering the arbitration decision a nullity.
Delegation of Judicial Powers and Constitutional Limitations
The Court distinguished the issue from mere delegation of legislative authority; here, the key question was whether members of the Supreme Court could exercise functions outside their judicial mandate. If they acted judicially, the function might fall outside their jurisdiction (judicial power could not be fragmented), especially with no appeal possible to the Supreme Court itself, creating procedural anomalies. If the function was administrative or quasi-judicial, such powers were not lawfully undertaken by Supreme Court members under the Organic Act.
Doctrine on Powers of the Supreme Court
The Court emphasized that the Supreme Court personifies judicial power alone, as one of the three sovereign government branches. The Organic Act and constitutional principles limit the Supreme Court’s jurisdiction strictly to judicial functions expressly or implicitly granted. The Court cited Chief Justice Taney’s dictum affirming that courts should only exercise judicial powers defined by organic laws and abstain from non-judicial functions.
Anomaly of Supreme Court Justices Acting Outside Judicial Capacity
The Court observed the paradox of Supreme Court members being asked to act as arbitrators—a function distinct from a court’s judicial role—calling
...continue readingCase Syllabus (G.R. No. L-41518)
Facts and Procedural History
- The Manila Electric Company (Meralco) petitioned the Supreme Court acting as a board of arbitrators to determine the terms and compensation for the use of its Pasig bridge by certain transportation companies.
- The petition invoked Section 11 of Act No. 1446, which granted Meralco’s franchise and included a provision empowering the Supreme Court members, sitting as arbitrators, to fix terms and compensation for such use.
- After the petition was filed, copies were served on the Attorney-General and affected transportation companies.
- The Attorney-General disclaimed interest, but opposition was filed by several public utility operators.
- The case was submitted after oral hearings and the filing of memoranda for resolution.
Statutory Provision Involved: Section 11 of Act No. 1446
- Act No. 1446 granted Charles M. Swift a franchise to operate an electric railway and related systems from Manila to Pasig.
- Section 11 specifically provided that whenever a franchise or right of way over the grantee’s lines is granted to others, the terms and compensation for using the right of way shall be fixed by the Supreme Court members, sitting as a board of arbitrators.
- The decision by a majority of such members is expressly made final by the statute.
- The provision attempts to authorize arbitration by Supreme Court justices, imposing binding terms on third parties not originally party to the franchise contract.
Issues Presented
- The primary issues include the validity of Section 11 of Act No. 1446.
- Whether members of the Supreme Court may legally act as a board of arbitrators with binding and final decision-making powers under said statute.
- The scope of judicial power vested in the Supreme Court and its members, particularly regarding exercising non-judicial or quasi-judicial functions.
- Whether the statute’s finality clause effectively ousts judicial review and denies affected parties’ recourse to courts.
Analysis of Arbitrary Powers and Judicial Functions
- Arbitration is a consensual mechanism requiring parties’ agreement; submissions to arbitration are contractual.
- Philippine jurisprudence and Civil Code Articles 1820 and 1821 stress that courts cannot be ousted by arbitration clauses—courts retain jurisdiction if matters are disputed.
- Refer