CONSTITUTIONAL*LAW*II*DIGESTS*(2012*–*2013)* * * *********ATTY.

*SEDFREY*CANDELARIA*
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PhilComSat+Corp.+v.+Alcuaz+[G.R.+No.+84818,+DECEMBER+18,+1989]# took! place! afterwards! though,! directing! petitioner! to! lower! its!
! rates!by!15%.!NTC!based!its!decision!on!the!ground!that!after!an!
Case:!Petition!to!annul!and!set!aside!order!issued!by!NTC!to!lower!rates! initial! evaluation! by! the! Rates! Regulation! Division! of! the!
of! PHILCOMSAT! since! it! violates! the! constitutional! prohibition! against! Common! Carriers! Authorization! Department! of! the! financial!
undue! delegation! of! legislative! power! and! substantive! due! process! of! statements!of!applicant,!there!is!merit!in!a!reduction!in!some!of!
law.! applicant’s! rates,! subject! to! further! reductions,! should! the!
! commission! find! in! its! further! evaluation! that! more! reduction!
Summary:+The!writ!prayed!for!is!granted!and!the!order!of!respondents! should! be! effected! either! on! the! basis! of! a! provisional!
set! aside.! TRO! issued! on! September! 13,! 1988,! as! specifically! directed! authorization!or!in!the!final!consideration!of!the!case.!!
against!the!order!is!hereby!made!permanent.! • PHILCOMSAT!assails!the!order!on!the!following!reasons:!
! o EO! 546! of! NTC! empowering! it! to! fix! rates! for! public!
Facts:++ service!communications!does!not!provide!the!necessary!
• Petitioner! Philippine! Communications! Satellite! Corporation! standards! constitutionally! required,! hence! there! is! an!
(PHILCOMSAT),! which! is! the! only! public! utility! rendering! such! undue! delegation! of! legislative! power,! particularly,!
service! in! the! country,! seeks! to! annul! and! set! aside! an! Order! adjudicatory!powers!of!NTC.!
issued! by! respondent! Commissioner! Jose! Luis! Alcuaz! of! the! o Assuming! arguendo! that! the! rate! fixing! power! was!
National! Telecommunications! Commission! (NTC),! dated! properly! delegated,! the! same! was! exercised! in! an!
September! 2,! 1988! which! directs! the! provisional! reduction! of! unconstitutional! manner! in! that! it! violates! procedural!
the!rates!which!may!be!charged!by!petitioner!by!15%.!!! due!process!for!having!been!issued!without!prior!notice!
• By! virtue! of! RA! 5514,! PHILCOMSAT! was! granted! a! franchise! to! and!hearing!and!the!rate!reduction!it!imposes!is!unjust,!
establish,! construct,! maintain! and! operate! in! the! Philippines,! unreasonable!and!confiscatory.!
station! or! stations! and! associated! equipment! and! facilities! for! !!
international!satellite!communications.! Issues:++
• In!1967,!it!established!its!first!earth!station!in!Pinugay,!Rizal.! (1) W/N!there!was!an!undue!delegation!of!legislative!power?!
• By! 1989,! it! completed! the! installation! of! a! third! standard! “A”! (2) W/N!there!was!a!violation!of!procedural!due!process?!
earth! station! (known! as! Pinugay! IV)! to! take! over! the! links! in! (3) W/N!there!was!a!violation!of!substantive!due!process?!
Pinugay!I.!! !
• Under! Sec.! 5! of! RA! 5514,! petitioner! was! exempt! from! the! Held:+
jurisdiction! of! the! then! Public! Service! Commission,! now! NTC.! ISSUE!1!–!No,!there!was!no!undue!delegation!of!legislative!power!
However,! pursuant! to! EO! 196! issued! on! June! 17,! 1987,! Ratio!
petitioner! was! placed! under! the! jurisdiction,! control! and! I. In!case!of!a!delegation!of!ratedfixing!power,!the!only!standard,!
regulation!of!NTC,!including!all!its!facilities!and!services!and!the! which!the!legislature!is!required!to!prescribe!for!the!guidance!of!
fixing! of! rates.! Prior! to! September! 16,! 1988,! NTC! had! allowed! the!administrative!authority!is!that!the!rate!be!reasonable!and!
petitioner!to!operate!under!normal!conditions!while!awaiting!a! just.!However,!it!has!been!held!that!even!in!the!absence!of!an!
final!verdict!on!its!renewed!license.!The!controversial!NTC!order!
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Chan=Gonzaga*Evardone*Gutierrez*Lopez*Miclat*Nadal*Radoc*Superio*Tan*Tong*Valdez*Varela*
CONSTITUTIONAL*LAW*II*DIGESTS*(2012*–*2013)*
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express!requirement!as!to!reasonableness,!this!standard!may!be!
implied.!!
II. Pursuant! to! EO! 546! and! 196,! NTC! is! empowered! to! determine!
and!prescribe!rates!pertinent!to!the!operation!of!public!service!
communications,! which! necessarily! include! the! power! to!
promulgate!rules!and!regulations!in!connection!therewith.!And!
under! Sec.! 15(g)! of! EO! 546,! NTC! should! be! guided! by! the!
requirements! of! public! safety,! public! interest! and! reasonable!
feasibility! of! maintaining! effective! competition! of! private!
entities!in!communications!and!broadcasting!facilities.!Likewise,!
Sec.! 6(d),! provides! for! the! creation! of! the! Ministry! of!
Transportation! and! Communications! with! control! and!
supervision!over!NTC.!It!is!specifically!provided!that!the!national!
economic! viability! of! the! entire! network! or! components! of! the!
communications! systems! contemplated! therein! should! be!
maintained! at! reasonable! rates.! We! can! safely! conclude! that!
NTC,! in! the! exercise! of! its! ratedfixing! power! is! limited! by! the!
requirements! of! public! safety,! public! interest,! reasonable!
feasibility!and!reasonable!rates,!which!satisfy!the!requirements!
of! a! valid! delegation! of! legislative! power! as! it! looks! to! the!
common!good.!!
ISSUE!2!–!Yes!there!was!a!violation!of!procedural!due!process!
I. Petitioner!asserts!that!NTC!exercised!quasidjudicial!powers,!not!
quasidlegislative! powers.! As! such,! and! since! petitioner! was! the!
only!subject!in!the!Order,!NTC!failed!to!first!have!a!trial!before!
coming! to! a! decision! of! a! fair! rate.! Even! NTC! admits! that! it!
exercised!quasidjudicial!powers!but!denies!that!a!trial!is!needed!
since!it!claims!that!the!assailed!order!is!merely!interlocutory,!it!
being! an! incident! in! the! ongoing! proceedings! on! petitioner’s!
application!for!a!certificate!of!public!convenience.!
• Vigan! Electric! Light! Co.,! Inc! v.! Public! Service! Commission! ;!
The!courts!made!a!categorical!classification!as!to!when!the!
ratedfixing! power! of! administrative! bodies! is! quasidjudicial!
and! when! it! is! legislative:! When! such! rules! or! rates! are!
meant!to!apply!to!all!enterprises!of!a!given!kind!throughout!
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Chan=Gonzaga*Evardone*Gutierrez*Lopez*Miclat*Nadal*Radoc*Superio*Tan*Tong*Valdez*Varela*
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the! Philippines,! it! may! partake! of! a! legislative! character.!
Such! is! not! the! case! here.! What! is! more,! the! rule! is!
predicated!upon!a!report!submitted!by!the!General!Auditing!
Office!that!petitioner!is!making!a!profit!of!more!than!12%!of!
its!invested!capital,!which!is!denied!by!petitioner.!Obviously,!
the! latter! is! entitled! to! crossdexamine! the! maker! of! said!
report,!and!to!introduce!evidence!to!disprove!the!contents!
thereof!and!explain!or!complement!the!same,!as!well!as!to!
refute! the! conclusion! drawn! therefrom! by! the! respondent.!
In! other! words,! in! making! said! finding! of! fact,! respondent!
performed!a!function!partaking!of!a!quasidjudicial!character,!
the! valid! exercise! of! which! demands! previous! notice! and!
hearing.!!
II. While! respondents! may! fix! a! temporary! rate! pending! final!
determination! of! the! application! of! petitioner,! such! ratedfixing!
order,! temporary! though! it! may! be,! is! not! exempt! from! the!
statutory! procedural! requirements! of! notice! and! hearing,! as!
well!as!the!requirement!of!reasonableness.!Assuming!that!such!
power! is! vested! in! NTC,! it! may! not! exercise! the! same! in! an!
arbitrary!and!confiscatory!manner.!Just!because!it!is!temporary,!
does! not! mean! it! is! exempt! from! the! same! rules,! unless!
otherwise!provided!by!the!applicable!law.!!
III. The! temporary! rates! become! a! final! legislative! act! as! to! the!
period!during!which!it!has!to!remain!in!force!pending!the!final!
determination! of! the! case.! An! order! prescribing! reduced! rates,!
even! during! that! temporary! period,! could! be! unjust,!
unreasonable! or! even! confiscatory,! especially! if! the! rates! are!
unreasonably! low,! since! the! utility! permanently! loses! its! just!
revenue!during!the!prescribed!period.!Upon!showing,!therefore,!
that! the! order! requiring! a! reduced! rate! is! confiscatory! and! will!
unduly! deprive! petitioner! of! a! reasonable! return! upon! its!
property,!a!declaration!of!its!nullity!becomes!indubitable.!!!
ISSUE!3!–!Yes!there!was!a!violation!of!substantive!due!process!
I. The!power!of!the!State!to!regulate!the!conduct!and!business!of!
public! utilities! is! limited! by! the! consideration! that! it! is! not! the!
CONSTITUTIONAL*LAW*II*DIGESTS*(2012*–*2013)* * * *********ATTY.*SEDFREY*CANDELARIA*
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owner!of!the!property!of!the!utility,!or!clothed!with!the!general! Gutierrez,+Jr.,+J.,+Concurring:+
power!of!management!incident!to!ownership,!since!the!private! ! “Quasidlegislative! acts! should! also! be! subject! to! hearings.!
right! of! ownership! to! such! property! remains! and! is! not! the! Congress!never!passes!truly!important!legislation!without!holding!public!
power! to! destroy! useful! and! harmless! enterprise! but! is! the! hearings.!Yet,!administrative!officials!who!are!not!elected!by!the!people!
power! to! protect,! foster,! promote,! preserve! and! control! with! and! who! are! not! directly! attuned! to! the! public! pulse! see! no! need! for!
due! regard! for! the! interest,! first! and! foremost,! of! the! public,! hearings.!They!issue!rules!and!circulars!with!far!reaching!effects!on!the!
then!of!the!utility!and!of!its!patrons.!Any!regulation,!therefore,! assumption!that!the!head!of!an!agency!knows!best!what!is!good!for!the!
which! operates! as! an! effective! confiscation! of! private! property! people.! I! believe! that! in! the! exercise! of! quasidlegislative! powers,!
or! constitutes! an! arbitrary! or! unreasonable! infringement! of! administrative!agencies,!much,!much!more!than!Congress,!should!hold!
property! is! void,! because! it! is! repugnant! to! the! constitutional! hearings!and!should!be!given!guidelines!as!to!when!notices!and!hearings!
guaranties!of!due!process!and!equal!protection!of!the!laws.! are! essential! even! in! quasidlegislation.! Furthermore,! administrative!
II. The! NTC! may! be! lacking! in! information! and! experience! to! officials! are! often! appointed! not! on! the! basis! of! competence! and!
compute! a! reasonable! rate! compared! to! the! petitioner! who! is! qualifications!but!out!of!political!and!personal!considerations.!Thus,!the!
directly! engaged! in! the! business! and! has! access! to! various! expertise! and! experience! needed! for! the! issuance! of! sound! rules! and!
information! on! the! trade,! not! only! domestically! but! also! regulations!would!sorely!be!lacking.”!!
internationally.!Their!information!as!evidence!is!very!important!
in!ascertaining!a!fair!rate!then.!
III. What!is!a!just!and!reasonable!rate!is!not!a!question!of!formula!
but!of!sound!business!judgment!based!upon!the!evidence;!it!is!a!
question! of! formula! but! of! sound! business! judgment! based!
upon!the!evidence;!it!is!a!question!of!fact!calling!for!the!exercise!
of! discretion,! good! sense,! and! a! fair,! enlightened! and!
independent! judgment.! In! determining! whether! a! rate! is!
confiscatory,! it! is! also! essential! to! consider! the! given! situation,!
requirements! and! opportunities! of! the! utility.! A! method! often!
employed!in!determining!reasonableness!is!the!fair!return!upon!
the! value! of! the! property! to! the! public! utility.! Competition! is!
also! a! very! important! factor! in! determining! reasonableness! of!
rates! since! a! carrier! is! allowed! to! make! such! rates! as! are!
necessary!to!meet!competition.!
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SEPARATE+OPINIONS+
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Chan=Gonzaga*Evardone*Gutierrez*Lopez*Miclat*Nadal*Radoc*Superio*Tan*Tong*Valdez*Varela*