Title
Philippine Global Communications, Inc. vs. Relova
Case
G.R. No. L-60548
Decision Date
Nov 10, 1986
Petitioner authorized under franchise to establish branch stations for international communications, reversing lower court's ruling.
authority
establish
maintain

Case Summary (G.R. No. L-60548)

Factual Background

On May 10, 1976, Philippine Global Communications, Inc. applied to the Board of Communications for authority to establish a branch station in Cebu City to render international telecommunication services from Cebu City to points outside the Philippines. Private respondents opposed the application. While the application remained pending, the BOC issued Memorandum Circular No. 77-13 on March 24, 1977, designating Metropolitan Manila as the sole international gateway and defining domestic record operations. The BOC granted petitioner provisional authority on January 16, 1979, and final authority on May 24, 1979, to establish a branch/station in Cebu City and, subject to prior approval, elsewhere in the Philippines.

Procedural History in the Lower Courts

Private respondents filed with the Court of First Instance a petition for declaratory judgment on August 27, 1979, challenging the proper construction of petitioner’s franchise, R.A. No. 4617. Petitioner moved to dismiss; the lower court denied the motion. Petitioner sought relief from this Court, which on October 2, 1980 in G.R. No. L-52819, 100 SCRA 254, sustained the lower court’s jurisdiction and held that the action for declaratory relief was within the Judiciary’s competence and did not require prior administrative action under the doctrine of primary jurisdiction. The parties agreed at pre-trial to submit the case for decision on the pleadings and memoranda. The trial court rendered judgment on April 27, 1982 declaring that petitioner was without authority to establish or operate any branch or station in the Philippines apart from its principal station in Makati.

Issues Presented to the Supreme Court

The Supreme Court framed the legal issues as: (1) whether R.A. No. 4617 authorized petitioner to establish stations or substations outside Metropolitan Manila; and (2) whether the establishment of such stations or substations constituted domestic service within the terms of petitioner’s franchise.

Parties’ Contentions

Petitioner contended that its legislative franchise authorized the construction, maintenance, and operation of stations in such places in the Philippines as the grantee might select, subject to executive approval, and that any interpretation to the contrary improperly restricted its statutory rights. Respondents argued that, read in context with provisions reserving to the government domestic wireless communications, any additional stations apart from the principal station in Makati would constitute prohibited domestic communication service in violation of Section 17 of the franchise and regulatory policy designating Metropolitan Manila as the sole gateway.

Trial Court Ruling

The trial court construed the word “any” in Section 1 of R.A. No. 4617 to permit a single point within the Philippines chosen by the grantee, subject to agency approval, and concluded that establishment of stations anywhere in the Philippines apart from the principal station in Makati constituted domestic communication service proscribed by Section 17. The court thus declared petitioner without authority to maintain or operate other branches or stations.

The Supreme Court’s Review of Pleadings and Facts

Although petitioner later argued that genuine issues of fact required trial, the Supreme Court noted the parties’ express agreement to submit the case on the pleadings and memoranda and therefore held that the lower court could not be faulted for deciding on that basis. The Court proceeded to examine the statutory language, legislative intent, and the contemporaneous administrative construction of the franchise.

Statutory Construction and Legislative Intent

The Court reiterated the controlling principle that courts first apply the plain meaning of the statute and construe the statute as a whole to give harmonious effect to its provisions, citing authorities including Lizarraga Hermanos vs. Yap Tico and Aisporna vs. Court of Appeals. The Court examined Section 1 alongside other provisions of R.A. No. 4617, notably Section 3 permitting establishment of stations in places selected by the grantee with the Secretary’s approval, Section 4(a) granting the Secretary authority over frequencies and licensing, Section 6 reserving special wartime rights to the Government, and Section 9 requiring the grantee to hold government entities harmless for accidents arising out of station construction or operation. The Court concluded that the statutory scheme authorized petitioner to establish additional stations or branches within the Philippines to carry out its international communications operations.

Contemporaneous Construction by Executive Authorities

The Court gave substantial weight to the contemporaneous construction of the franchise by the executing agency and executive legal officers. It cited the BOC’s May 24, 1979 decision granting petitioner final authority for a Cebu branch, which explicitly recognized that, although the BOC had earlier maintained that international record carriers could not establish stations outside Metropolitan Manila, a review of the franchise language and legal opinions convinced the Board that authorizing a branch in Cebu for international record operations did not violate Memorandum Circular No. 77-13. The Court also relied on a 1954 opinion of Secretary of Justice Pedro Tuason (Opinion No. 146), later reaffirmed by the Undersecretary of Justice on November 28, 1973, which construed similar franchise language as referring to the destination of messages rather than forbidding relay receptions within the Philippines, subject to the proviso that no extra tolls be charged for relay transmissions so as to avoid creating a domestic service competitive with local carriers.

Administrative Guidelines and Later Regulatory Policy

The Court noted that the National Telecommunications Commission, with the approval of the Ministry of Transportation and Communications, issued Memorandum Circular No. 08-8-83 on October 25, 1983, which adopted guidelines implementing the policy of designating Metropolitan Manila as the international gateway. The Circular recognized that International Record Carriers may own, construct, and expand stations, branches, and terminals within the Metro Manila Area but shall not maintain public offices outside the gateway, while permitting customer terminals with marketing and technical support outside Metro Manila and allowing existing public offices to continue until domestic record carriers can provide necessary facilities or until approved interconnect agreements exist. The Court held that those provisions confirm that existing public offices of International Record

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