Transpo Digest

ALITALIA, Petitioner, vs.
INTERMEDIATE AUTHOR:
APPELLATE COURT and FELIPA E. PABLO, NOTES: (if applicable)
Respondents
FACTS: (chronological order)
Dr. Felipa Pablo — an associate professor in the University of the Philippines, 1 and a research grantee of the
Philippine Atomic Energy Agency — was invited to take part at a meeting of the Department of Research and
Isotopes of the Joint FAO-IAEA Division of Atomic Energy in Food and Agriculture of the United Nations in Ispra,
Italy
3 The program announced that she would be the second speaker on the first day of the meeting. 4 To fulfill this
engagement, Dr. Pablo BOOKED passage on petitioner airline, ALITALIA.
She arrived in Milan on the day before the meeting in accordance with the itinerary and time table set for her
by ALITALIA. She was however told by the ALITALIA personnel there at Milan that her luggage was "delayed
inasmuch as the same . . . (was) in one of the succeeding flights from Rome to Milan." 5 Her luggage consisted
of two (2) suitcases: one contained her clothing and other personal items; the other, her scientific papers, slides
and other research material. But the other flights arriving from Rome did not have her baggage on board.
By then feeling desperate, she went to Rome to try to locate her bags herself. There, she inquired about her
suitcases in the domestic and international airports, and filled out the forms prescribed by ALITALIA for people
in her predicament. However, her baggage could not be found. Completely distraught and discouraged, she
returned to Manila without attending the meeting in Ispra, Italy. : nad
Once back in Manila she demanded that ALITALIA make reparation for the damages thus suffered by her.
ALITALIA offered her "free airline tickets to compensate her for any alleged damages. . . ." She rejected the offer,
and forthwith commenced the action 6 which has given rise to the present appellate proceedings.
As it turned out, Prof. Pablo's suitcases were in fact located and forwarded to 7 Italy, but only on the day after
her scheduled appearance and participation at the U.N. meeting there. 8 Of course Dr. Pablo was no longer there
to accept delivery; she was already on her way home to Manila. And for some reason or other, the suitcases were
not actually restored to Prof. Pablo by ALITALIA until eleven (11) months later, and four (4) months after
institution of her action.
…… ALITALIA has appealed to this Court on Certiorari. Here, it seeks to make basically the same points it tried
to make before the Trial Court and the Intermediate Appellate Court, i.e.:
1) that the Warsaw Convention should have been applied to limit ALITALIA'S liability; and……
ISSUE(S): Should the Warsaw convention limit ALITALIA’s liability?
HELD: No.
RATIO: The Warsaw Convention however denies to the carrier availment "of the provisions which exclude or
limit his liability, if the damage is caused by his wilful misconduct or by such default on his part as, in
accordance with the law of the court seized of the case, is considered to be equivalent to wilful misconduct," or
"if the damage is (similarly) caused . . by any agent of the carrier acting within the scope of his employment." 22
The Hague Protocol amended the Warsaw Convention by removing the provision that if the airline took all
necessary steps to avoid the damage, it could exculpate itself completely, 23 and declaring the stated limits of
liability not applicable "if it is proved that the damage resulted from an act or omission of the carrier, its servants
or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably
result." The same deletion was effected by the Montreal Agreement of 1966, with the result that a passenger
could recover unlimited damages upon proof of wilful misconduct. 24
The Convention does not thus operate as an exclusive enumeration of the instances of an airline's liability, or
as an absolute limit of the extent of that liability. Such a proposition is not borne out by the language of the
Convention, as this Court has now, and at an earlier time, pointed out. 25 Moreover, slight reflection readily
leads to the conclusion that it should be deemed a limit of liability only in those cases where the cause of the
death or injury to person, or destruction, loss or damage to property or delay in its transport is not attributable
to or attended by any wilful misconduct, bad faith, recklessness, or otherwise improper conduct on the part of
any official or employee for which the carrier is responsible, and there is otherwise no special or extraordinary
form of resulting injury. The Convention's provisions, in short, do not "regulate or exclude liability for other
breaches of contract by the carrier" 26 or misconduct of its officers and employees, or for some particular or
exceptional type of damage. Otherwise, "an air carrier would be exempt from any liability for damages in the
event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd." 27 Nor may
it for a moment be supposed that if a member of the aircraft complement should inflict some physical injury on
a passenger, or maliciously destroy or damage the latter's property, the Convention might successfully be
pleaded as the sole gauge to determine the carrier's liability to the passenger. Neither may the Convention be
invoked to justify the disregard of some extraordinary sort of damage resulting to a passenger and preclude
recovery therefor beyond the limits set by said Convention.
In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of petitioner
airline; and Dr. Pablo's luggage was eventually returned to her, belatedly, it is true, but without appreciable
damage. The fact is, nevertheless, that some special species of injury was caused to Dr. Pablo because petitioner
ALITALIA misplaced her baggage and failed to deliver it to her at the time appointed — a breach of its contract
of carriage, to be sure — with the result that she was unable to read the paper and make the scientific
presentation (consisting of slides, autoradiograms or films, tables and tabulations) that she had painstakingly
labored over, at the prestigious international conference, to attend which she had traveled hundreds of miles, to
her chagrin and embarrassment and the disappointment and annoyance of the organizers. She felt, not
unreasonably, that the invitation for her to participate at the conference, extended by the Joint FAO/IAEA
Division of Atomic Energy in Food and Agriculture of the United Nations, was a singular honor not only to
herself, but to the University of the Philippines and the country as well, an opportunity to make some sort of
impression among her colleagues in that field of scientific activity. The opportunity to claim this honor or
distinction was irretrievably lost to her because of Alitalia's breach of its contract.
Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the circumstances be restricted
to that prescribed by the Warsaw Convention for delay in the transport of baggage.
She is not, of course, entitled to be compensated for loss or damage to her luggage. As already mentioned, her
baggage was ultimately delivered to her in Manila, tardily but safely. She is however entitled to nominal damages
— which, as the law says, is adjudicated in order that a right of the plaintiff, which has been violated or invaded
by the defendant, may be vindicated and recognized, and not for the purpose of indemnifying the plaintiff for
any loss suffered — and this Court agrees that the respondent Court of Appeals correctly set the amount thereof
at P40,000.00
This Court also agrees that respondent Court of Appeals correctly awarded attorney's fees to Dr. Pablo, and the
amount of P5,000.00 set by it is reasonable in the premises. The law authorizes recovery of attorney's fees inter
alia where, as here, "the defendant's act or omission has compelled the plaintiff to litigate with third persons or
to incur expenses to protect his interest," 34 or "where the court deems it just and equitable." 35
WHEREFORE, no error being perceived in the challenged decision of the Court of Appeals, it appearing on the
contrary to be entirely in accord with the facts and the law, said decision is hereby AFFIRMED, with costs against
the petitioner.
SO ORDERED.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):
002 Pan American World Airways v. IAC AUTHOR: Loren Vicedo
G.R. No. 70462 August 11, 1988 NOTES:
TOPIC: Aviation Law; Liability under the Convention
PONENTE: Cortes, J.
FACTS:
Nature: Petition filed by an international air carrier seeking to limit its liability for lost baggage, containing
promotional and advertising materials for films to be exhibited in Guam and the U.S.A., clutch bags, barong tagalogs
and personal belongings, to the amount specified in the airline ticket absent a declaration of a higher valuation and
the payment of additional charges.
1. On April 25, 1978, plaintiff Rene V. Pangan, president and general manager of the plaintiffs Sotang Bastos and
Archer Production while in San Francisco, Califonia and Primo Quesada of Prime Films, San Francisco,
California, entered into an agreement whereby the former, for and in consideration of the amount of US
$2,500.00 per picture, bound himself to supply the latter with three films. 'Ang Mabait, Masungit at ang Pangit,'
'Big Happening with Chikiting and Iking,' and 'Kambal Dragon' for exhibition in the United States. It was also
their agreement that plaintiffs would provide the necessary promotional and advertising materials for said films
on or before May 30, 1978.
2. On his way home to the Philippines, plaintiff Pangan visited Guam where he contacted Leo Slutchnick of the
Hafa Adai Organization. Plaintiff Pangan likewise entered into a verbal agreement with Slutchnick for the
exhibition of two of the films above-mentioned at the Hafa Adai Theater in Guam on May 30, 1978 for the
consideration of P7,000.00 per picture. Plaintiff Pangan undertook to provide the necessary promotional and
advertising materials for said films on or before the exhibition date on May 30,1978.
3. By virtue of the above agreements, plaintiff Pangan caused the preparation of the requisite promotional handbills
and still pictures for which he paid the total sum of P12,900.00. Likewise in preparation for his trip abroad to
comply with his contracts, plaintiff Pangan purchased fourteen clutch bags, four capiz lamps and four barong
tagalog, with a total value of P4,400.00.
4. On May 18, 1978, plaintiff Pangan obtained from defendant Pan Am's Manila Office, through the Your Travel
Guide, an economy class airplane ticket with No. 0269207406324 for passage from Manila to Guam on
defendant's Flight No. 842 of May 27,1978, upon payment by said plaintiff of the regular fare. The Your Travel
Guide is a tour and travel office owned and managed by plaintiffs witness Mila de la Rama.
5. On May 27, 1978, two hours before departure time plaintiff Pangan was at the defendant's ticket counter at the
Manila International Airport and presented his ticket and checked in his two luggages, for which he was given
baggage claim tickets Nos. 963633 and 963649. The two luggages contained the promotional and advertising
materials, the clutch bags, barong tagalog and his personal belongings. Subsequently, Pangan was informed that
his name was not in the manifest and so he could not take Flight No. 842 in the economy class. Since there was
no space in the economy class, plaintiff Pangan took the first class because he wanted to be on time in Guam to
comply with his commitment, paying an additional sum of $112.00.
6. When plaintiff Pangan arrived in Guam on the date of May 27, 1978, his two luggages did not arrive with his
flight, as a consequence of which his agreements with Slutchnick and Quesada for the exhibition of the films in
Guam and in the United States were cancelled. Thereafter, he filed a written claim for his missing luggage.
7. Upon arrival in the Philippines, Pangan contacted his lawyer, who made the necessary representations to protest
as to the treatment which he received from the employees of the defendant and the loss of his two luggages
Defendant Pan Am assured plaintiff Pangan that his grievances would be investigated and given its immediate
consideration. Due to the defendant's failure to communicate with Pangan about the action taken on his
protests, the present complaint was filed by the plaintiff.
8. The CFI found Pan Am liable and (1) ordered Pan Am to pay Pangan, et. al. the sum of P83,000.00, for actual
damages, with interest thereon at the rate of 14% per annum from 6 December 1978, when the complaint was
filed, until the same is fully paid, plus the further sum of P10,000.00 as attorney’s fees; (2) ordered Pan Am to
pay Pangan the sum of P8,123.34, for additional actual damages, with interest thereon at the rate of 14% per
annum from 6 December 1978, until the same is fully paid; (3) dismissed the counterclaim interposed by Pan-
Am; and (4) ordered Pan-Am to pay the costs of suit.
9. On appeal, the then Intermediate Appellate Court affirmed the trial court decision. Hence, the petition for review.
ISSUE(S): WON respondent court erred as a matter of law in affirming the trial court's award of actual damages beyond the
limitation of liability set forth in the Warsaw Convention and the contract of carriage.
HELD: SC granted the Petition, set aside the Decision of the Intermediate Appellate Court, and rendered a new judgment
ordering Pan Am to pay Pangan damages in the amount of US$600.00 or its equivalent in Philippine currency at the time of
actual payment.
RATIO:
1. On the basis of the foregoing stipulations printed at the back of the ticket, petitioner contends that its liability for the lost
baggage of private respondent Pangan is limited to $600.00 ($20.00 x 30 kilos) as the latter did not declare a higher
value for his baggage and pay the corresponding additional charges.
To support this contention, petitioner cites the case of Ong Yiu v. Court of Appeals [G.R. No. L-40597, June 29, 1979, 91
SCRA 223], where the Court sustained the validity of a printed stipulation at the back of an airline ticket limiting the liability
of the carrier for lost baggage to a specified amount and ruled that the carrier's liability was limited to said amount since the
passenger did not declare a higher value, much less pay additional charges. We find the ruling in Ong Yiu squarely applicable
to the instant case.
- Pertinent Condition of Carriage printed at the back of the ticket
The pertinent Condition of Carriage printed at the back of the plane ticket reads: “(8) BAGGAGE
LIABILITY . . . The total liability of the Carrier for lost or damage baggage of the passenger is LIMITED
TO P100.00 for each ticket unless a passenger declares a higher valuation in excess of P100.00, but not in
excess, however, of a total valuation of P1,000.00 and additional charges are paid pursuant to Carrier’s
tariffs.”
- Ong Yiu case applicable
In the case of Ong Yiu v. Court of Appeals [G.R. No. L-40597, June 29, 1979, 91 SCRA 223), the Court
sustained the validity of a printed stipulation at the back of an airline ticket limiting the liability of the carrier
for lost baggage to a specified amount and ruled that the carrier’s liability was limited to said amount since
the passenger did not declare a higher value, much less pay additional charges. The ruling in Ong Yiu squarely
applicable to the instant case. Herein, on the basis of the stipulations printed at the back of the ticket, Pan
Am’s liability for the lost baggage of Pangan is limited to $600.00 ($20.00 x 30 kilos) as the latter did not
declare a higher value for his baggage and pay the corresponding additional charges. Pangan did not declare
any higher value for his luggage, much less did he pay any additional transportation charge.
2. Provisions in plane ticket a contract of adhesion; Contracts of adhesion not entirely prohibited
While it may be true that Pangan had not signed the plane ticket (Article 1750), he is nevertheless bound by the provisions
thereof. Such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger
regardless of the latter’s lack of knowledge or assent to the regulation. It is what is known as a contract of “adhesion,” in
regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the
other, as the plane ticket, are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject
it entirely; if he adheres, he gives his consent. And as held in Randolph v. American Airlines (103 Ohio App. 172, 144 N.E.
2d 878) and Rosenchein v. Trans World Airlines, Inc. (349 S.W. 2d 483), “a contract limiting liability upon an agreed
valuation does not offend against the policy of the law forbidding one from contracting against his own negligence.”
3. Shewaram case not applicable

The ruling in Shewaram v. Philippine Air Lines, Inc. [G.R. No. L-20099, July 2, 1966, 17 SCRA 606], where the Court held
that the stipulation limiting the carrier’s liability to a specified amount was invalid, finds no application in the instant case,
as the ruling in said case was premised on the finding that the conditions printed at the back of the ticket were so small and
hard to read that they would not warrant the presumption that the passenger was aware of the conditions and that he had
freely and fairly agreed thereto. Herein, similar facts that would make the case fall under the exception have not been alleged,
much less shown to exist.
4. Clarification of the Northwest Airlines case which was relied upon by the Court of Appeals
The Court of Appeal’s reliance on a quotation from Northwest Airlines, Inc. v. Cuenca [G.R. No. L-22425, August 31, 1965,
14 SCRA 1063] to sustain the view that “to apply the Warsaw Convention which limits a carrier’s liability to US$9.07 per
pound or US$20.00 per kilo in cases of contractual breach of carriage is against public policy” is utterly misplaced. The
Court never intended to, and in fact never did, rule against the validity of provisions of the Warsaw Convention.
Consequently, by no stretch of the imagination may said quotation from Northwest be considered as supportive of the
appellate court’s statement that the provisions of the Warsaw Convention limited a carrier’s liability are against public policy.
5. Pan Am not liable for lost profits when film showing contracts were cancelled; Mendoza vs. PAL
The Court finds itself unable to agree with the decision of the trial court, and affirmed by the Court of Appeals, awarding
Pangan damages as and for lost profits when their contracts to show the films in Guam and San Francisco, California were
cancelled. The rule laid down in Mendoza v. Philippine Air Lines, Inc. [90 Phil. 836 (1952)] cannot be any clearer: “Under
Art. 1107 of the Civil Code, a debtor in good faith may be held liable only for damages that were foreseen or might have
been foreseen at the time the contract of transportation was entered into.” Herein, in the absence of a showing that Pan Am’s
attention was called to the special circumstances requiring prompt delivery of Pangan’s luggages, Pan Am cannot be held
liable for the cancellation of Pangan’s contracts as it could not have foreseen such an eventuality when it accepted the
luggage for transit.
6. Requisite for liability for special damages; Chapman vs. Fargo, L.R.A. (1918 F, p. 1049)
Before defendant could be held to special damages such as the present alleged loss of profits on account of delay or failure
of delivery it must have appeared that he had notice at the time of delivery to him of the particular circumstances attending
the shipment and which probably would lead to such special loss if he defaulted. Or, as the rule has been stated in another
form in order to impose on the defaulting party further liability than for damages naturally and directly i.e., in the ordinary
course of things arising from a breach of contract such unusual or extraordinary damages must have been brought within the
contemplation of the parties as the probable result of breach at the time of or prior to contracting. Generally notice then of
any special circumstances which will show that the damages to be anticipated from a breach would be enhanced has been
held sufficient far this effect. The attention of the common carrier must be called to the nature of the articles shipped, the
purpose of shipment, and the desire to rush the shipment.
7. Proximate cause of the cancellation of the contracts

The evidence reveals that the proximate cause of the cancellation of the contracts was Pangan’s failure to deliver the
promotional and advertising materials on the dates agreed upon. For this, Pan Am cannot be held liable. Pangan had not
declared the value of the two luggages he had checked in and paid additional charges. Neither was Pan Am privy to Pangan’s
contracts nor was its attention called to the condition therein requiring delivery of the promotional and advertising materials
on or before a certain date.
8. Award of attorney’s fees lost support

With the Court’s holding that Pan Am’s liability is limited to the amount stated in the ticket, the award of attorney’s fees,
which is grounded on the alleged unjustified refusal of petitioner to satisfy Pangan’s just and valid claim, loses support and
must be set aside.
WHEREFORE, the Petition is hereby GRANTED and the Decision of the Intermediate Appellate Court is SET ASIDE and
a new judgment is rendered ordering petitioner to pay private respondents damages in the amount of US $600.00 or its
equivalent in Philippine currency at the time of actual payment.
CASE LAW/ DOCTRINE: (As provided in the footnote of the case)

a. Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely
agreed upon.
b. The Warsaw Convention actually provides that "[i]n the transportation of checked baggage and of goods, the liability
of the carrier shall be limited to a sum of 250 francs per kilogram, unless the consignor has made, at the time when
the package was handed over to the carrier, a special declaration of the value of delivery and has paid a
supplementary sum if the case so requires. In that case, the carrier will be liable to pay a sum not exceeding the
declared sum, unless he proves that the sum is greater than the actual value to the consignor at delivery.... The sums
mentioned above shall be deemed to refer to the French franc consisting of 65-1/2 milligrams of gold at the standard
of fineness of nine hundred thousandths. These sums may be converted into any national currency in round figures.
[51 O.G. 5084, 5091.]
003 China Airlines vs Daniel Chiok AUTHOR: J.E.Z
G.R. No. 152122. July 30, 2003 NOTES: (if applicable)
TOPIC: Liability under the convention
PONENTE: PANGANIBAN, J.
Daniel Chiok purchased from China Airlines, Ltd. an airline passenger ticket for air transportation covering Manila-Taipei-
Hong Kong-Manila. Said ticket was exclusively endorsable to Philippine Airlines, Ltd. Before he left for said trip, the trips
covered by the ticket were pre-scheduled and confirmed by Chiok. When Chiok reached Hong Kong, he went to the PAL
office and sought to reconfirm his flight back to Manila. The PAL office confirmed his return trip on board Flight No. PR
311 and attached its own sticker.
On the next day, Chiok proceeded to Hong Kong International Airport for his return trip to Manila. However, upon reaching
the PAL counter, Chiok saw a poster stating that PAL Flight No. PR 311 was cancelled because of a typhoon in Manila. He
was then informed that all the confirmed ticket holders of PAL Flight No. PR 311 was automatically booked for its next
flight, which was to leave the next day. He then informed PAL personnel that, being the founding director of the Philippine
Polystyrene Paper Corporation, he had to reach Manila the following day because of a business option which he had to
execute on said date.
The following day Chiok went to the airport. Cathay Pacific stewardess Lok Chan took and received Choik’s plane ticket
and luggage. However, Carmen Chan, PAL’s terminal supervisor, informed Chiok that his name did not appear in PAL’s
computer list of passengers and therefore could not be permitted to board PAL Flight No. PR 307. Thereafter, Chiok
proceeded to PAL’s Hong Kong office and confronted PAL’s reservation officer, Carie Chao (hereafter referred to as Chao),
who previously confirmed his flight back to Manila. Chao told Chiok that his name was on the list and pointed to the latter
his computer number listed on the PAL confirmation sticker attached to his plane ticket, which number was ‘R/MN62’.
Chiok was not able to return to Manila on time.
Consequently, Chiok as plaintiff filed a Complaint on November 9, 1982 for damages, against PAL and CAL, as defendants
with the Regional Trial Court Manila. He alleged therein that despite several confirmations of his flight, defendant PAL
refused to accommodate him in Flight No. 307, for which reason he lost the business option aforementioned. He also alleged
that PAL’s personnel, specifically Carmen, ridiculed and humiliated him in the presence of so many people. Further, he
alleged that defendants are solidarily liable for the damages he suffered, since one is the agent of the other. The Regional
Trial Court (RTC) of Manila held CAL and PAL jointly and severally liable. Ultimately, it was only the Appeal of CAL that
reached the Supreme Court. It alleged among others that since it was only the ticket issuer, it should not be held liable unlike
PAL.
ISSUE(S): Whether CAL, merely being the ticket issuer, may be held jointly and severally liable for the acts of PAL’s
employees.
HELD: Yes, CAL is liable
RATIO:
It is significant to note that the contract of air transportation was between petitioner and respondent, with the former
endorsing to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always been treated in
this jurisdiction as a single operation. This jurisprudential rule is supported by the Warsaw Convention, to which the
Philippines is a party, and by the existing practices of the International Air Transport Association (IATA).
In American Airlines v. Court of Appeals, the court has noted that under a general pool partnership agreement, the ticket-
issuing airline is the principal in a contract of carriage, while the endorsee-airline is the agent.
“x x x Members of the IATA are under a general pool partnership agreement wherein they act as agent of each other in the
issuance of tickets to contracted passengers to boost ticket sales worldwide and at the same time provide passengers easy
access to airlines which are otherwise inaccessible in some parts of the world. Booking and reservation among airline
members are allowed even by telephone and it has become an accepted practice among them. A member airline which enters
into a contract of carriage consisting of a series of trips to be performed by different carriers is authorized to receive the fare
for the whole trip and through the required process of interline settlement of accounts by way of the IATA clearing house an
airline is duly compensated for the segment of the trip serviced.
Thus, when the petitioner accepted the unused portion of the conjunction tickets, entered it in the IATA clearing house and
undertook to transport the private respondent over the route covered by the unused portion of the conjunction tickets, i.e.,
Geneva to New York, the petitioner tacitly recognized its commitment under the IATA pool arrangement to act as agent of
the principal contracting airline, Singapore Airlines, as to the segment of the trip the petitioner agreed to undertake. As such,
the petitioner thereby assumed the obligation to take the place of the carrier originally designated in the original conjunction
ticket. The petitioner’s argument that it is not a designated carrier in the original conjunction tickets and that it issued its own
ticket is not decisive of its liability. The new ticket was simply a replacement for the unused portion of the conjunction ticket,
both tickets being for the same amount of US$ 2,760 and having the same points of departure and destination.
By constituting itself as an agent of the principal carrier the petitioner’s undertaking should be taken as part of a single
operation under the contract of carriage executed by the private respondent and Singapore Airlines in Manila.”
CASE LAW/ DOCTRINE:
004 UNITED AIRLINES v. WILLIE UY AUTHOR: Gin

G.R. No. 127768. November 19, 1999
TOPIC: The Warsaw Convention – Liability under the Convention
PONENTE: Bellosillo, J.
FACTS:
1. On 13 October 1989, respondent Willie J. Uy, a revenue passenger on United Airlines Flight No. 819 for the San Francisco - Manila route, checked in together
with his luggage one piece of which was found to be overweight at the airline counter. To his utter humiliation, an employee of petitioner rebuked him saying
that he should have known the maximum weight allowance to be 70 kgs. per bag and that he should have packed his things accordingly. Then, in a loud voice in
front of the milling crowd, she told respondent to repack his things and transfer some of them from the overweight luggage to the lighter ones. Not wishing to
create further scene, respondent acceded only to find his luggage still overweight. The airline then billed him overweight charges which he offered to pay with
a miscellaneous charge order (MCO) or an airline pre-paid credit. However, the airline’s employee, and later its airport supervisor, adamantly refused to honor
the MCO pointing out that there were conflicting figures listed on it. Despite the explanation from respondent that the last figure written on the MCO represented
his balance, petitioner’s employees did not accommodate him. Faced with the prospect of leaving without his luggage, respondent paid the overweight charges
with his American Express credit card.
2. Upon arrival in Manila, he discovered that one of his bags had been slashed and its contents stolen. He particularized his losses to be around US $5,310.00. In
a letter dated 16 October 1989 respondent bewailed the insult, embarrassment and humiliating treatment he suffered in the hands of United Airlines employees,
notified petitioner of his loss and requested reimbursement thereof. Petitioner United Airlines, through Central Baggage Specialist Joan Kroll, did not refute any
of respondent’s allegations and mailed a check representing the payment of his loss based on the maximum liability of US $9.70 per pound. Respondent, thinking
the amount to be grossly inadequate to compensate him for his losses, as well as for the indignities he was subjected to, sent two (2) more letters to petitioner
airline, one dated 4 January 1990 through a certain Atty. Pesigan, and another dated 28 October 1991 through Atty. Ramon U. Ampil demanding an out-of-court
settlement ofP1,000,000.00. Petitioner United Airlines did not accede to his demands.
3. on 9 June 1992 respondent filed a complaint for damages against United Airlines alleging that he was a person of good station, sitting in the board of directors
of several top 500 corporations and holding senior executive positions for such similar firms; that petitioner airline accorded him ill and shabby treatment to his
extreme embarrassment and humiliation; and, as such he should be paid moral damages, exemplary damages, plus attorney's fees. Similarly, he alleged that
the damage to his luggage and its stolen contents amounted to around $5,310.00, and requested reimbursement therefor.
4. United Airlines moved to dismiss the complaint on the ground that respondent’s cause of action had prescribed, invoking Art. 29 of the Warsaw Convention
which provides - Art. 29 (1) The right to damages shall be extinguished if an action is not brought within two (2) years, reckoned from the date of arrival at the
destination, or from the date on which the aircraft ought to have arrived, or from the date on which the transportation stopped. (2) The method of calculating
the period of limitation shall be determined by the law of the court to which the case is submitted.
5. Respondent countered that par. (1) of Art. 29 of the Warsaw Convention must be reconciled with par. (2) thereof which states that "the method of calculating
the period of limitation shall be determined by the law of the court to which the case is submitted." Interpreting thus, respondent noted that according to
Philippine laws the prescription of actions is interrupted "when they are filed before the court, when there is a written extrajudicial demand by the creditors,
and when there is any written acknowledgment of the debt by the debtor." Since he made several demands upon United Airlines: first, through his personal
letter dated 16 October 1989; second, through a letter dated 4 January 1990 from Atty. Pesigan; and, finally, through a letter dated 28 October 1991 written for
him by Atty. Ampil, the two (2)-year period of limitation had not yet been exhausted.
6. RTC: Ordered the dismissal of the action holding that the language of Art. 29 is clear that the action must be brought within two (2) years from the date of
arrival at the destination. It held that although the second paragraph of Art. 29 speaks of deference to the law of the local court in "calculating the period of
limitation," the same does not refer to the local forum’s rules in interrupting the prescriptive period but only to the rules of determining the time in which the
action may be deemed commenced, and within our jurisdiction the action shall be deemed "brought" or commenced by the filing of a complaint. Hence, the
trial court concluded that Art. 29 excludes the application of our interruption rules.
7. CA: On the applicability of the Warsaw Convention, the appellate court ruled that the Warsaw Convention did not preclude the operation of the Civil Code
and other pertinent laws. Respondent’s failure to file his complaint within the two (2)-year limitation provided in the Warsaw Convention did not bar his action
since he could still hold petitioner liable for breach of other provisions of the Civil Code which prescribe a different period or procedure for instituting an
action. Further, under Philippine laws, prescription of actions is interrupted where, among others, there is a written extrajudicial demand by the creditors, and
since respondent Uy sent several demand letters to petitioner United Airlines, the running of the two (2)-year prescriptive period was in effect
suspended. Hence, the appellate court ruled that respondent’s cause of action had not yet prescribed and ordered the records remanded to the Quezon City
trial court for further proceedings.
8. In the instant cae, Petitioner contends that the appellate court erred in ruling that respondent's cause of action has not prescribed since delegates to the
Warsaw Convention clearly intended the two (2)-year limitation incorporated in Art. 29 as an absolute bar to suit and not to be made subject to the various
tolling provisions of the laws of the forum. Petitioner argues that in construing the second paragraph of Art. 29 private respondent cannot read into it Philippine
rules on interruption of prescriptive periods and state that his extrajudicial demand has interrupted the period of prescription. American jurisprudence has
declared that "Art. 29 (2) was not intended to permit forums to consider local limitation tolling provisions but only to let local law determine whether an action
had been commenced within the two-year period, since the method of commencing a suit varies from country to country."
ISSUE(S):
Whether or not the respondent is already barred from bringing an action against the petitioner
HELD:
No. There are two causes of action sued on by the respondent against the petitioner that will be thoroughly discussed in the Ratio. In both causes of action, the
Supreme Court held that the respondent is not yet barred from bringing an action.
RATIO:
Within our jurisdiction we have held that the Warsaw Convention can be applied, or ignored, depending on the peculiar facts presented by each case. Thus, we
have ruled that the Convention's provisions do not regulate or exclude liability for other breaches of contract by the carrier or misconduct of its officers and
employees, or for some particular or exceptional type of damage. Neither may the Convention be invoked to justify the disregard of some extraordinary sort of
damage resulting to a passenger and preclude recovery therefor beyond the limits set by said Convention. Likewise, we have held that the Convention does not
preclude the operation of the Civil Code and other pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for violating the
rights of its passengers under the contract of carriage, especially if willful misconduct on the part of the carrier's employees is found or established.
Respondent's complaint reveals that he is suing on two (2) causes of action: (a) the shabby and humiliating treatment he received from petitioner's employees
at the San Francisco Airport which caused him extreme embarrassment and social humiliation; and, (b) the slashing of his luggage and the loss of his personal
effects amounting to US $5,310.00.
While his second cause of action - an action for damages arising from theft or damage to property or goods - is well within the bounds of the Warsaw Convention,
his first cause of action -an action for damages arising from the misconduct of the airline employees and the violation of respondent's rights as passenger - clearly
is not.
Consequently, insofar as the first cause of action is concerned, respondent's failure to file his complaint within the two (2)-year limitation of the Warsaw Convention
does not bar his action since petitioner airline may still be held liable for breach of other provisions of the Civil Code which prescribe a different period or procedure
for instituting the action, specifically, Art. 1146 thereof which prescribes four (4) years for filing an action based on torts.
As for respondent's second cause of action, indeed the travaux preparatories of the Warsaw Convention reveal that the delegates thereto intended the two (2)-
year limitation incorporated in Art. 29 as an absolute bar to suit and not to be made subject to the various tolling provisions of the laws of the forum. This
therefore forecloses the application of our own rules on interruption of prescriptive periods. Article 29, par. (2), was intended only to let local laws determine
whether an action had been commenced within the two (2)-year period, and within our jurisdiction an action shall be deemed commenced upon the filing of a
complaint. Since it is indisputable that respondent filed the present action beyond the two (2)-year time frame his second cause of action must be
barred. Nonetheless, it cannot be doubted that respondent exerted efforts to immediately convey his loss to petitioner, even employed the services of two (2)
lawyers to follow up his claims, and that the filing of the action itself was delayed because of petitioner's evasion.
In this regard, Philippine Airlines, Inc. v. Court of Appeals is instructive. In this case of PAL, private respondent filed an action for damages against petitioner
airline for the breakage of the front glass of the microwave oven which she shipped under PAL Air Waybill No. 0-79-1013008-3. Petitioner averred that, the
action having been filed seven (7) months after her arrival at her port of destination, she failed to comply with par. 12, subpar. (a) (1), of the Air Waybill which
expressly provided that the person entitled to delivery must make a complaint to the carrier in writing in case of visible damage to the goods, immediately after
discovery of the damage and at the latest within 14 days from receipt of the goods. Despite non-compliance therewith the Court held that by private
respondent's immediate submission of a formal claim to petitioner, which however was not immediately entertained as it was referred from one employee to
another, she was deemed to have substantially complied with the requirement. The Court noted that with private respondent's own zealous efforts in pursuing
her claim it was clearly not her fault that the letter of demand for damages could only be filed, after months of exasperating follow-up of the claim, on 13 August
1990, and that if there was any failure at all to file the formal claim within the prescriptive period contemplated in the Air Waybill, this was largely because of
the carrier's own doing, the consequences of which could not in all fairness be attributed to private respondent.
In the same vein must we rule upon the circumstances brought before us. Verily, respondent filed his complaint more than two (2) years later, beyond the
period of limitation prescribed by the Warsaw Convention for filing a claim for damages. However, it is obvious that respondent was forestalled from immediately
filing an action because petitioner airline gave him the runaround, answering his letters but not giving in to his demands. True, respondent should have already
filed an action at the first instance when his claims were denied by petitioner but the same could only be due to his desire to make an out-of-court settlement for
which he cannot be faulted. Hence, despite the express mandate of Art. 29 of the Warsaw Convention that an action for damages should be filed within two (2)
years from the arrival at the place of destination, such rule shall not be applied in the instant case because of the delaying tactics employed by petitioner airline
itself. Thus, private respondent's second cause of action cannot be considered as time-barred under Art. 29 of the Warsaw Convention.
[SUB-ISSUE AS TO THE LATE FILING OF NOTICE OF APPEAL]
In the instant case, respondent filed his notice of appeal two (2) days later than the prescribed period. Although his counsel failed to give the reason for the
delay, we are inclined to give due course to his appeal due to the unique and peculiar facts of the case and the serious question of law it poses. In the now
almost trite but still good principle, technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves
scant consideration.[
CASE LAW/ DOCTRINE:
005 RADIO COMMUNICATIONS OF THE AUTHOR: JANNA | crunch time = read words in
PHILIPPINES, INC v. NTC and KAYUMANGGI bold/underlined |The mere fact that the RCPI possesses a
RADIO NETWORK INCORPORATED franchise to put up and operate a radio communications
[G.R. No. L-68729 May 29, 1987 ] system in certain areas is not an insuperable obstacle to the
TOPIC: Public Utility and Public Service NTC’s issuing the proper certificate to an applicant desiring to
PONENTE: extend the same services to those areas.
SHORT VERSION: In 1957, RCPI was granted a legislative franchise to establish radio stations for domestic communications through RA
2036. In 1980, KAYUMANGGI was authorized by NTC to operate radio comm.. systems in the same areas. KAYUMANGGI filed against RCPI in
NTC, because RCPI was operating in the same area as KAYUMANGGI, and RCPI did not have a certificate of public convenience. NTC ruled
against RCPI, stating that pursuant to E.O. No. 546, it is mandatory for RCPI to have a certificate of public convenience in order to operate. MR by
RCPI was denied. SC upheld the decision of NTC. Public Service Commission was abolished in 1972, and its functions regarding
telecommunications was transferred to Board of Communications. When E.O. 546 was enacted, implementing PD No. 1, Board of Communications
and Telecommunications Control Bureu were abolished and functions transferred to NTC. Functions of NTC, among others, involve issuance of
certificate/s of public convenience (for radio communications systems). RCPI has not overcome the presumption that NTC’s act was pursuant to
public good. E.O. No. 546is applicable to the RCPI who must be bound by its provisions. RCPI cannot install and operate radio telephone
services on the basis of its legislative franchise alone.
FACTS:
1. Radio Communications of the Philippines Inc. (RCPI) has been operating as a communications system since 1957
under its legislative franchise, granted by R.A. 2036 (“An act granting the RCPI a franchise to establish radio stations for
domestic telecommunications”), enacted on June 23, 1957.
2. RCPI established the ff.:
 Radio telegraph service: (a) Sorsogon, Sorsogon (1968); (b) San Jose Mindoro (1971); (c) Catarman, Samar (1976).
 Radio telephone services: (a) San Jose Mindoro (1971); (b) Sorsogon, Sorsogon (1983); (c) Catarman, Samar (1983).
3. June 24, 1980: Kayumanggi Radio Network Incorporated (KAYUMANGGI) was authorized by NTC to operate radio
communications systems in Catarman, Samar and in San Jose, Mindoro, based on its decision in NTC Case No. 80-08.
4. December 14, 1983: KAYUMANGGI filed a complaint with NTCNational Telecommunications Commission (NTC)
that RCPI was operating in Catarman, Samar and San Jose, Mindoro w/o a certificate of public convenience and necessity.
5. RCPI counter-alleged that its telephone services in the places subject of the complaint are covered by the legislative
franchise recognized by both the NTC and its predecessor, the Public Service Commission.
6. Additionally through its supplemental reply, RCPI stated that it has been in operation in the questioned places long
before KAYUMANGGI filed its application to operate in the same places.
7. August 22, 1984: NTC decided in favor of KAYUMANGGI, after conduct of a hearing, and ordered RCPI to
immediately cease or desist from the operation of its radio telephone services in Catarman Northern Samar; San Jose,
Occidental Mindoro; and Sorsogon, Sorsogon.
8. NTC’s reasoning: Under Executive Order No. 546, a certificate of public convenience and necessity is mandatory for
the operation of communication utilities and services including radio communications.
9. September 4, 1984: RCPI filed an MR, but it was denied (9/12/84); October 1, 1984: RCPI filed present petition.
10. RCPI’s main argument: The abolition of the Public Service Commission (PSC) under PD No. 1 and the creation of
the National Telecommunications Commission (NTC) under E.O. No. 546 to replace the defunct PSC, did not affect
sections 14 and 15 of the Public Service Law (CA. No. 146, as amended).
ISSUE(S): Whether RCPI, a grantee of a legislative franchise to operate a radio company, is required to secure a
certificate of public convenience and necessity before it can validly operate its radio stations, including radio telephone
services, in Catarman, Northern Samar; San Jose, Occidental Mindoro; and Sorsogon, Sorsogon.
HELD: YES. We find no merit in the petitioner's contention. WHEREFORE, the challenged order of the public respondent
dated August 22, 1984 is hereby AFFIRMED. The petition is dismissed for lack of merit. RCPI’s claim that its franchise
cannot be affected by Executive Order No. 546 on the ground that it has long been in operation since 1957 cannot be
sustained.
RATIO:
1. The provisions of the Public Service Law pertinent to the petitioner's allegation are as follows:
Section 13. (a) the Commission shall have jurisdiction, supervision, and control over all public services and their franchises, equipment and
other properties, and in the exercise of its authority, it shall have the necessary powers and the aid of public force: ...
Section 14. The following are exempted from the provisions of the preceding section:
xxx xxx xxx
(d) Radio companies except with respect to the fixing of rates;
xxx xxx xxx
Section 15. With the exception of those enumerated in the preceding section, no public service shall operate in the Philippines without
possessing a valid and subsisting certificate from the Public Service Commission, known as "certificate of public convenience," or
"certificate of convenience and public necessity," as the case may be, to the effect that the operation of said service and the authorization to
do business will promote the public interests in a proper and suitable manner. ...
2. Pursuant to PD No. 1 dated September 23,1972, reorganizing the executive branch of the National Government, the
PSC was abolished and its functions were transferred to three specialized regulatory boards, as follows: (1) the
Board of Transportation; (2) the Board of Communications; (3) and the Board of Power and Waterworks
3. The functions so transferred were still subject to the limitations provided in sections 14 and 15 of the Public Service
Law, as amended. With the enactment of Executive Order No. 546 on July 23, 1979 implementing P.D. No.1, the
Board of Communications and the Telecommunications Control Bureau were abolished and their functions were
transferred to the National Telecommunications Commission (Sec. 19(d), Executive Order No. 546). Section 15 of said
Executive Order spells out the functions of the National Telecommunications Commission as follows:
Sec. 15. Functions of the Commission.-The Commission shall exercise the following functions:
a. Issue Certificate of Public Convenience for the operation of communications utilities and services, radio communications
petitions systems, wire or wireless telephone or telegraph system, radio and television broadcasting system and other similar
public utilities;
b. Establish, prescribe and regulate areas of operation of particular operators of public service communications; and determine
and prescribe charges or rates pertinent to the operation of such public utility facilities and services except in cases where charges
or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies
recognized by the Philippine Government as the proper arbiter of such charges or rates;
c. Grant permits for the use of radio frequencies for wireless telephone and telegraph systems and radio communication
systems including amateur radio stations and radio and television broadcasting systems;
d. Sub-allocate series of frequencies of bands allocated by the International Telecommunications Union to the specific services;
e. Establish and prescribe rules, regulations, standards, specifications in all cases related to the issued Certificate of Public
Convenience and administer and enforce the same;
f. Coordinate and cooperate with government agencies and other entities concerned with any aspect involving communications
with a view to continuously improve the communications service in the country;
g. Promulgate such rules and regulations, as public safety and interest may require, to encourage a larger and more effective
use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities in
these activities whenever the Commission finds it reasonably feasible;
h. Supervise and inspect the operation of radio stations and telecommunications facilities;
i. Undertake the examination and licensing of radio operators;
j. Undertake, whenever necessary, the registration of radio transmitters and transceivers; and
k. Perform such other functions as may be prescribed by law.
4. It is clear from the aforequoted provision that the exemption enjoyed by radio companies from the jurisdiction of
the Public Service Commission and the Board of Communications no longer exists because of the changes
effected by the Reorganization Law and implementing executive orders.
5. A franchise started out as a "royal privilege or (a) branch of the King's prerogative, subsisting in the hands of a
subject." This definition was given by Finch, adopted by Blackstone, and accepted by every authority since (State v.
Twin Village Water Co., 98 Me 214, 56 A 763 (1903)). Today, a franchise, being merely a privilege emanating
from the sovereign power of the state and owing its existence to a grant, is subject to regulation by the state itself
by virtue of its police power through its administrative agencies. We ruled in Pangasinan transportation Co., Inc.
v. Public Service Commission (70 Phil. 221) that:
... statutes enacted for the regulation of public utilities, being a proper exercise by the State of its police power, are applicable not
only to those public utilities coming into existence after its passage, but likewise to those already established and in operation ...
6. E.O. No. 546, being an implementing measure of P.D. No. I insofar as it amends the Public Service Law (CA No. 146,
as amended) is applicable to the RCPI who must be bound by its provisions. RCPI cannot install and operate
radio telephone services on the basis of its legislative franchise alone.
7. The position of RCPI that by the mere grant of its franchise under RA No. 2036 it can operate a radio
communications system anywhere within the Philippines is erroneous. Section 1 of said statute reads:
Section 1. Subject to the provisions of the Constitution, and to the provisions, not inconsistent herewith, of Act Numbered Three
thousand eight hundred and forty-six, entitled.' An Act providing for the regulation of radio stations and radio communications in
the Philippine Islands, and for other purposes;' Commonwealth Act Numbered One hundred forty-six, known as the Public Service
Act, and their amendments, and other applicable laws, there is hereby granted to the Radio Communications of the Philippines, its
successors or assigns, the right and privilege of constructing, installing, establishing and operating in the Philippines, at such
places as the said corporation may select and the Secretary of Public Works and Communications may approve, radio stations for
the reception and transmission of wireless messages on radiotelegraphy and/or radiotelephone, including both coastal and marine
telecommunications, each station to consist of two radio apparatus comprising of a receiving and sending radio apparatus.
(Emphasis supplied).
Section 4(a) of the same Act further provides that:

Sec. 4(a). This franchise shall not take effect nor shall any powers thereunder be exercised by the grantee
until the Secretary of Public works and Communications shall have allotted to the grantee the frequencies
and wave lengths to be used, and issued to the grantee a license for such case. (Emphasis supplied)
8. Thus, in the words of R.A. No. 2036 itself, approval of the then Secretary of Public Works and Communications
was a precondition before the petitioner could put up radio stations in areas where it desires to operate. It has
been repeated time and again that where the statutory norm speaks unequivocally, there is nothing for the courts
to do except to apply it. The law, leaving no doubt as to the scope of its operation, must be obeyed. (Gonzaga v.
Court of Appeals, 51 SCRA 381).
9. The records of the case do not show any grant of authority from the then Secretary of Public Works and
Communications before the RCPI installed the questioned radio telephone services in San Jose, Mindoro in 1971.
The same is true as regards the radio telephone services opened in Sorsogon, Sorsogon and Catarman, Samar in 1983.
10. No certificate of public convenience and necessity appears to have been secured by the RCPI from the NTC
when such certificate,was required by the applicable public utility regulations.
11. It was well within the powers of NTC to authorize the installation by KAYUMANGGI network of radio
communications systems in Catarman, Samar and San Jose, Mindoro.
12. Under the circumstances of this case, the mere fact that the RCPI possesses a franchise to put up and operate a
radio communications system in certain areas is not an insuperable obstacle to the NTC’s issuing the proper
certificate to an applicant desiring to extend the same services to those areas.
13. The Constitution mandates that a franchise cannot be exclusive in nature nor can a franchise be granted except
that it must be subject to amendment, alteration, or even repeal by the legislature when the common good so
requires. (Art. XII, sec. 11 of the 1986 Constitution).
14. There is an express provision in the petitioner's franchise which provides compliance with the above mandate R.A.
2036, sec. 15).
15. We find no reason to disturb the public respondent's findings of fact, and conclusions of law insofar as the
KAYUMANGGI was authorized to operate in Catarman, Samar and San Jose, Mindoro.
16. As a rule, the Commission's findings of fact, if supported by substantial evidence, are conclusive upon this Court. We
may modify or ignore them only when it clearly appears that there is no evidence to support reasonably such a
conclusion. (Halili v. Daplas, 14 SCRA 14). The RCPI has not shown why KAYUMANGGI should be denied the
authority to operate its services in Samar and Mindoro.
17. RCPI has not overcome the presumption that when the NTC disturbed RCPI’s monopoly in certain areas, it was
doing so pursuant to public interest and the common good.
18. CASE LAW/ DOCTRINE:

 A franchise, being merely a privilege emanating from the sovereign power of the state and owing its existence
to a grant, is subject to regulation by the state itself by virtue of its police power through its administrative
agencies.
 Pangasinan transportation Co., Inc. v. Public Service Commission (70 Phil. 221):... statutes enacted for the
regulation of public utilities, being a proper exercise by the State of its police power, are applicable not only to
those public utilities coming into existence after its passage, but likewise to those already established and in
operation ...
006 RODOLFO B. ALBANO, petitioner, AUTHOR: Krystelle

vs. HON. RAINERIO O. REYES, PHILIPPINE PORTS NOTES: (if applicable)
AUTHORITY, INTERNATIONAL CONTAINER
TERMINAL SERVICES, INC., E. RAZON, INC.,
ANSCOR CONTAINER CORPORATION, and
SEALAND SERVICES. LTD., respondents.
G.R. No. 83551; July 11, 1989
TOPIC: Public Utility and Public Service
PONENTE: Paras, J.
1. On April 20, 1987, the PPA Board adopted its Resolution No. 850 directing PPA management to prepare the Invitation to
Bid and all relevant bidding documents and technical requirements necessary for the public bidding of the development,
management and operation of the MICT at the Port of Manila, and authorizing the Board Chairman, Secretary Rainerio
O. Reyes, to oversee the preparation of the technical and the documentation requirements for the MICT leasing as well as
to implement this project.
2. Accordingly, respondent Secretary Reyes, by DOTC Special Order 87-346, created a seven (7) man "Special MICT
Bidding Committee" charged with evaluating all bid proposals, recommending to the Board the best bid, and preparing
the corresponding contract between the PPA and the winning bidder or contractor. The Bidding Committee consisted of
three (3) PPA representatives, two (2) Department of Transportation and Communications (DOTC) representatives, one
(1) Department of Trade and Industry (DTI) representative and one (1) private sector representative. The PPA
management prepared the terms of reference, bid documents and draft contract which materials were approved by the
PPA Board.
3. The PPA published the Invitation to Bid several times in a newspaper of general circulation which publication included
the reservation by the PPA of "the right to reject any or all bids and to waive any informality in the bids or to accept such
bids which may be considered most advantageous to the government."
4. Seven (7) consortia of companies actually submitted bids, which bids were opened on July 17, 1987 at the PPA Head
Office. After evaluation of the several bids, the Bidding Committee recommended the award of the contract to develop,
manage and operate the MICT to respondent International Container Terminal Services, Inc. (ICTSI) as having offered
the best Technical and Financial Proposal. Accordingly, respondent Secretary declared the ICTSI consortium as the
winning bidder.
5. Before the corresponding MICT contract could be signed, two successive cases were filed against the respondents which
assailed the legality or regularity of the MICT bidding.
6. On May 18, 1988, the President of the Philippines approved the proposed MICT Contract, with directives that "the
responsibility for planning, detailed engineering, construction, expansion, rehabilitation and capital dredging of the port,
as well as the determination of how the revenues of the port system shall be allocated for future port works, shall remain
with the PPA; and the contractor shall not collect taxes and duties except that in the case of wharfage or tonnage dues and
harbor and berthing fees, payment to the Government may be made through the contractor who shall issue provisional
receipts and turn over the payments to the Government which will issue the official receipts."
7. The next day, the PPA and the ICTSI perfected the MICT Contract incorporating therein by "clarificatory guidelines" the
aforementioned presidential directives.
8. Meanwhile, the petitioner, Rodolfo A. Albano filed the present petition as citizen and taxpayer and as a member of the
House of Representatives, assailing the award of the MICT contract to the ICTSI by the PPA. The petitioner claims that
since the MICT is a public utility, it needs a legislative franchise before it can legally operate as a public utility, pursuant
to Article 12, Section 11 of the 1987 Constitution.
ISSUE(S): WON petitioner MICT as a public utility, needs a legislative franchise before it can legally operate as a public utility,
pursuant to Article 12, Section 11 of the 1987 Constitution.
HELD: No. Franchises issued by Congress are not required before each and every public utility may operate. The law has granted
certain administrative agencies the power to grant licenses for or to authorize the operation of certain public utilities.
RATIO:
A review of the applicable provisions of law indicates that a franchise specially granted by Congress is not necessary for the
operation of the Manila International Container Port (MICP) by a private entity, a contract entered into by the PPA and such entity
constituting substantial compliance with the law.
1. Executive Order No. 30, dated July 16, 1986, provides:

WHEREFORE, I, CORAZON C. AQUINO, President of the Republic of the Philippines, by virtue of the powers vested in me by
the Constitution and the law, do hereby order the immediate recall of the franchise granted to the Manila International Port
Terminals, Inc. (MIPTI) and authorize the Philippine Ports Authority (PPA) to take over, manage and operate the Manila
International Port Complex at North Harbor, Manila and undertake the provision of cargo handling and port related services thereat,
in accordance with P.D. 857 and other applicable laws and regulations.
Section 6 of Presidential Decree No. 857 (the Revised Charter of the Philippine Ports Authority) states:
a) The corporate duties of the Authority shall be:
xxx xxx xxx
(ii) To supervise, control, regulate, construct, maintain, operate, and provide such facilities or services as are necessary
in the ports vested in, or belonging to the Authority.
xxx xxx xxx
(v) To provide services (whether on its own, by contract, or otherwise) within the Port Districts and the approaches
thereof, including but not limited to —
— berthing, towing, mooring, moving, slipping, or docking of any vessel;
— loading or discharging any vessel;
— sorting, weighing, measuring, storing, warehousing, or otherwise handling goods.
xxx xxx xxx
b) The corporate powers of the Authority shall be as follows:
xxx xxx xxx
(vi) To make or enter into contracts of any kind or nature to enable it to discharge its functions under this Decree.
xxx xxx xxx
Thus, while the PPA has been tasked, under E.O. No. 30, with the management and operation of the Manila International Port
Complex and to undertake the providing of cargo handling and port related services thereat, the law provides that such shall be "in
accordance with P.D. 857 and other applicable laws and regulations." On the other hand, P.D. No. 857 expressly empowers the
PPA to provide services within Port Districts "whether on its own, by contract, or otherwise" [See. 6(a) (v)]. Therefore, under the
terms of E.O. No. 30 and P.D. No. 857, the PPA may contract with the International Container Terminal Services, Inc. (ICTSI)
for the management, operation and development of the MICP.
Even if the MICP be considered a public utility, or a public service on the theory that it is a "wharf' or a "dock" as contemplated
under the Public Service Act, its operation would not necessarily call for a franchise from the Legislative Branch. Franchises issued
by Congress are not required before each and every public utility may operate. Thus, the law has granted certain administrative
agencies the power to grant licenses for or to authorize the operation of certain public utilities. (See E.O. Nos. 172 and 202)
That the Constitution provides in Art. XII, Sec. 11 that the issuance of a franchise, certificate or other form of authorization for
the operation of a public utility shall be subject to amendment, alteration or repeal by Congress does not necessarily, imply, as
petitioner posits that only Congress has the power to grant such authorization. Our statute books are replete with laws granting
specified agencies in the Executive Branch the power to issue such authorization for certain classes of public utilities.
As stated earlier, E.O. No. 30 has tasked the PPA with the operation and management of the MICP, in accordance with P.D. 857
and other applicable laws and regulations. However, P.D. 857 itself authorizes the PPA to perform the service by itself, by
contracting it out, or through other means. Reading E.O. No. 30 and P.D. No. 857 together, the inescapable conclusion is that the
lawmaker has empowered the PPA to undertake by itself the operation and management of the MICP or to authorize its operation
and management by another by contract or other means, at its option. The latter power having been delegated to the PPA, a
franchise from Congress to authorize an entity other than the PPA to operate and manage the MICP becomes unnecessary.
In the instant case, the PPA, in the exercise of the option granted it by P.D. No. 857, chose to contract out the operation and
management of the MICP to a private corporation. This is clearly within its power to do. Thus, PPA's acts of privatizing the MICT
and awarding the MICT contract to ICTSI are wholly within the jurisdiction of the PPA under its Charter which empowers the
PPA to "supervise, control, regulate, construct, maintain, operate and provide such facilities or services as are necessary in the
ports vested in, or belonging to the PPA." (Section 6(a) ii, P.D. 857)
The contract between the PPA and ICTSI, coupled with the President's written approval, constitute the necessary authorization for
ICTSI's operation and management of the MICP. The award of the MICT contract approved by no less than the President of the
Philippines herself enjoys the legal presumption of validity and regularity of official action. In the case at bar, there is no evidence
which clearly shows the constitutional infirmity of the questioned act of government.
For these reasons the contention that the contract between the PPA and ICTSI is illegal in the absence of a franchise from Congress
appears bereft of any legal basis.
CASE LAW/ DOCTRINE:

GUTIERREZ, JR., J., concurring:
I concur in the Court's decision that the determination of whether or not the winning bidder is qualified to undertake the
contracted service should be left to the sound judgment of the Philippine Ports Authority (PPA). I agree that the PPA is
the agency which can best evaluate the comparative qualifications of the various bidding contractors and that in making
such evaluation it has the technical expertise which neither this Court nor Congress possesses.
However, I would feel more comfortable in the thought that the above rulings are not only grounded on firm legal foundations but
are also factually accurate if the PPA shows greater consistency in its submissions to this Court.
I recall that in E. Razon, Inc. v. Philippine Ports Authority (151 SCRA 233 [1977]), this Court decided the case in favor of the
PPA because, among others, of its submissions that: (1) the petitioner therein committed violations as to outside stevedoring
services, inadequate equipment, delayed submission of reports, and non-compliance with certain port regulations; (2) respondent
Marina Port Services and not the petitioner was better qualified to handle arrastre services; (3) the petitioner being controlled by
Alfredo Romualdez could not enter into a management contract with PPA and any such contract would be null and void; and (4)
even if the petitioner may not have shared in the illegal intention behind the transfer of majority shares, it shared in the benefits of
the violation of law.
I was surprised during the oral arguments of the present petition to hear the counsel for PPA submit diametrically different
statements regarding the capabilities and worth of E. Razon, Inc., as an arrastre operator. It now turns out that the Manila
International Container Terminal will depend a great deal on the expertise, reliability and competence of E. Razon, Inc., for its
successful operations. The time difference between the two petitions is insubstantial. After going over the pleadings of the present
petition, I am now convinced that it is the submissions of PPA in this case and not its contentions in G.R. No. 75197 which are
accurate and meritorious. There is the distinct possibility that we may have been unfair in the earlier petition because of assertions
made therein which are contradictory to the submissions in the instant petition. No such doubts would exist if the Government is
more consistent in its pleadings on such important factual matters as those raised in these two petitions.
007 NPC VS CA AUTHOR: CARAG, J.R.

[G.R. NUMBER 96410; JULY 3, 1992] NOTES: (if applicable)
TOPIC: PUBLIC UTILITY AND PUBLIC SERVICE
PONENTE: NOCON, J.
1. In the early morning hours of October 27, 1978, at the height of typhoon "Kading", a massive flood covered the
towns near Angat Dam, particularly the town of Norzagaray, causing several deaths and the loss and destruction of
houses, farms, plants, working animals and other properties of the people residing near the Angat River.
2. Private respondents recalled that on the said day, they were awakened by the sound of rampaging water all around
them. The water came swiftly and strongly that before they could do anything to save their belongings, their houses
had submerged, some even swept away by the strong current. A number of people were able to save their lives only
by climbing trees.
3. Private respondents blamed the sudden rush of water to the reckless and imprudent opening of all the three (3)
floodgates of the Angat Dam spillway, without prior warning to the people living near or within the vicinity of the
dam
4. Petitioners denied private respondents' allegations and, by way of defense, contended that they have maintained the
water in the Angat Dam at a safe level and that the opening of the spillways was done gradually and after all
precautionary measures had been taken
5. Petitioners further contended that there was no direct causal relationship between the alleged damages suffered by
the respondents and the acts and omissions attributed to the former. That it was the respondents who assumed the
risk of residing near the Angat River, and even assuming that respondents suffered damages, the cause was due to a
fortuitous event and such damages are of the nature and character of damnum absque injuria, hence, respondents
have no cause of action against them.
6. The RTC held in favor of private respondents, which was affirmed by the CA
ISSUE(S):
HELD: (YES/NO, and a short explanation)
RATIO:
1. The obligor cannot escape liability, if upon the happening of a fortuitous event or an act of God, a corresponding
fraud, negligence, delay or violation or contravention in any manner of the tenor of the obligation as provided in
Article 1170 of the Civil Code which results in loss or damage. In the case at bar, although the typhoon "Kading"
was an act of God, petitioners cannot escape liability because their negligence was the proximate cause of the loss
and damage
2. The principle embodied in the act of God doctrine strictly requires that the act must be occasioned solely by the
violence of nature. Human intervention is to be excluded from creating or entering into the cause of the mischief.
When the effect is found to be in part the result of the participation of man, whether due to his active intervention or
neglect or failure to act, the whole occurrence is then humanized and removed from the rules applicable to the acts
of God
3. Private respondents contention that there was no privity of contract between herein petitioners and private
respondents. They further alleged that they owed no specific duty to private respondents in the same way that the
architect of a building owed a specific duty to its owner. Petitioners, however, failed to consider that even if there
was no contractual relation between themselves and private respondents, they are still liable under the law on quasi-
delict. Article 2176 of the Civil Code explicitly provides "whoever by act or omission causes damage to another
there being fault or negligence is obliged to pay for the damage done."
4. Thus, We cannot give credence to petitioners' third assignment of error that the damage caused by the opening of
the dam was in the nature of damnum absque injuria, which presupposes that although there was physical damage,
there was no legal injury in view of the fortuitous events. There is no question that petitioners have the right, duty
and obligation to operate, maintain and preserve the facilities of Angat Dam, but their negligence cannot be
countenanced, however noble their intention may be. The end does not justify the means, particularly because they
could have done otherwise than simultaneously opening the spillways to such extent.
CASE LAW/ DOCTRINE:
008 National Dev’t Company v. CA AUTHOR: De Guzman, Bien
G.R. No. L-49407 August 19, 1988 NOTES:
TOPIC: Public Service Act
PONENTE: PARAS, J.
FACTS:
Defendants NDC and MCP entered into a memorandum agreement on September 13, 1962, defendant NDC as the first
preferred mortgagee of three ocean going vessels including one with the name 'Dona Nati' appointed defendant MCP as its
agent to manage and operate said vessel for and in its behalf and account.
Thus, on February 28, 1964 the E. Philipp Corporation of New York loaded on board the vessel "Dona Nati" at San Francisco,
California, a total of 1,200 bales of American raw cotton consigned to the order of Manila Banking Corporation, Manila and
the People's Bank and Trust Company acting for and in behalf of the Pan Asiatic Commercial Company, Inc., who represents
Riverside Mills Corporation. Also loaded on the same vessel at Tokyo, Japan, were the cargo of Kyokuto Boekui, Kaisa,
Ltd., consigned to the order of Manila Banking Corporation consisting of 200 cartons of sodium lauryl sulfate and 10 cases
of aluminum foil.
En route to Manila the vessel Dofia Nati figured in a collision at 6:04 a.m. on April 15, 1964 at Ise Bay, Japan with a Japanese
vessel 'SS Yasushima Maru' as a result of which 550 bales of aforesaid cargo of American raw cotton were lost and/or
destroyed, of which 535 bales as damaged were landed and sold on the authority of the General Average Surveyor for Yen
6,045,-500 and 15 bales were not landed and deemed lost. The damaged and lost cargoes was worth P344,977.86 which
amount, the plaintiff as insurer, paid to the Riverside Mills Corporation as holder of the negotiable bills of lading duly
endorsed. Also considered totally lost were the aforesaid shipment of Kyokuto, Boekui Kaisa Ltd., consigned to the order of
Manila Banking Corporation, Manila, acting for Guilcon, Manila, The total loss was P19,938.00 which the plaintiff as insurer
paid to Guilcon as holder of the duly endorsed bill of lading. Thus, the plaintiff had paid as insurer the total amount of
P364,915.86 to the consignees or their successors-in-interest, for the said lost or damaged cargoes. Hence, plaintiff filed this
complaint to recover said amount from the defendants-NDC and MCP as owner and ship agent respectively, of the said
'Dofia Nati' vessel.
On April 22, 1965, the Development Insurance and Surety Corporation (DISC) filed before the then Court of First Instance
of Manila an action for the recovery of the sum of P364,915.86 plus attorney's fees of P10,000.00 against NDC and MCP.
Interposing the defense that the complaint states no cause of action and even if it does, the action has prescribed, MCP filed
on May 12, 1965 a motion to dismiss. DISC filed an Opposition on May 21, 1965 to which MCP filed a reply on May 27,
1965. On June 29, 1965, the trial court deferred the resolution of the motion to dismiss till after the trial on the merits. On
June 8, 1965, MCP filed its answer with counterclaim and cross-claim against NDC. NDC, for its part, filed its answer to
DISC's complaint on May 27, 1965. It also filed an answer to MCP's cross-claim on July 16, 1965.
On November 12, 1969, after DISC and MCP presented their respective evidence, the trial court rendered a decision ordering
the defendants MCP and NDC to pay jointly and solidarity to DISC.
MCP interposed its appeal on December 20, 1969, while NDC filed its appeal on February 17, 1970 after its motion to set
aside the decision was denied by the trial court in its order dated February 13,1970. On November 17,1978, the Court of
Appeals promulgated its decision affirming in toto the decision of the trial court. Hence these appeals by certiorari.
The main thrust of NDC's argument is to the effect that the Carriage of Goods by Sea Act should apply to the case at bar and
not the Civil Code or the Code of Commerce. Under Section 4 (2) of said Act, the carrier is not responsible for the loss or
damage resulting from the "act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation
or in the management of the ship." Thus, NDC insists that based on the findings of the trial court which were adopted by the
Court of Appeals, both pilots of the colliding vessels were at fault and negligent, NDC would have been relieved of liability
under the Carriage of Goods by Sea Act. Instead, Article 287 of the Code of Commerce was applied and both NDC and MCP
were ordered to reimburse the insurance company for the amount the latter paid to the consignee as earlier stated.
ISSUE(S): RESPONDENT COURT OF APPEALS ERRED IN HOLDING THE PETITIONERS NATIONAL
DEVELOPMENT COMPANY AND COMPANY OF THE PHILIPPINES TO PAY JOINTLY AND SEVERALLY.
HELD: No, owner and agent of the offending vessel are liable for the damage done where both are impleaded; that in case
of collision, both the owner and the agent are civilly responsible for the acts of the captain
RATIO:
RE: Code of Commerce should apply
This issue has already been laid to rest by this Court of Eastern Shipping Lines Inc. v. IAC (1 50 SCRA 469-470 [1987])
where it was held under similar circumstance "that the law of the country to which the goods are to be transported governs
the liability of the common carrier in case of their loss, destruction or deterioration" (Article 1753, Civil Code). Thus, the
rule was specifically laid down that for cargoes transported from Japan to the Philippines, the liability of the carrier is
governed primarily by the Civil Code and in all matters not regulated by said Code, the rights and obligations of common
carrier shall be governed by the Code of commerce and by laws (Article 1766, Civil Code). Hence, the Carriage of Goods
by Sea Act, a special law, is merely suppletory to the provision of the Civil Code.
In the case at bar, it has been established that the goods in question are transported from San Francisco, California and Tokyo,
Japan to the Philippines and that they were lost or due to a collision which was found to have been caused by the negligence
or fault of both captains of the colliding vessels. Under the above ruling, it is evident that the laws of the Philippines will
apply, and it is immaterial that the collision actually occurred in foreign waters, such as Ise Bay, Japan.
Under Article 1733 of the Civil Code, common carriers from the nature of their business and for reasons of public policy are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them according to all circumstances of each case. Accordingly, under Article 1735 of the same Code, in all other than those
mentioned is Article 1734 thereof, the common carrier shall be presumed to have been at fault or to have acted negigently,
unless it proves that it has observed the extraordinary diligence required by law.
It appears, however, that collision falls among matters not specifically regulated by the Civil Code, so that no reversible
error can be found in respondent courses application to the case at bar of Articles 826 to 839, Book Three of the Code
of Commerce, which deal exclusively with collision of vessels.
More specifically, Article 826 of the Code of Commerce provides that where collision is imputable to the personnel of a
vessel, the owner of the vessel at fault, shall indemnify the losses and damages incurred after an expert appraisal. But more
in point to the instant case is Article 827 of the same Code, which provides that if the collision is imputable to both vessels,
each one shall suffer its own damages and both shall be solidarily responsible for the losses and damages suffered by their
cargoes.
Significantly, under the provisions of the Code of Commerce, particularly Articles 826 to 839, the shipowner or carrier, is
not exempt from liability for damages arising from collision due to the fault or negligence of the captain. Primary liability is
imposed on the shipowner or carrier in recognition of the universally accepted doctrine that the shipmaster or captain is
merely the representative of the owner who has the actual or constructive control over the conduct of the voyage.
There is, therefore, no room for NDC's interpretation that the Code of Commerce should apply only to domestic trade and
not to foreign trade. Aside from the fact that the Carriage of Goods by Sea Act (Com. Act No. 65) does not specifically
provide for the subject of collision, said Act in no uncertain terms, restricts its application "to all contracts for the carriage
of goods by sea to and from Philippine ports in foreign trade." Under Section I thereof, it is explicitly provided that "nothing
in this Act shall be construed as repealing any existing provision of the Code of Commerce which is now in force, or as
limiting its application." By such incorporation, it is obvious that said law not only recognizes the existence of the Code of
Commerce, but more importantly does not repeal nor limit its application.
RE: No Cause of Action

On the other hand, Maritime Company of the Philippines claims that Development Insurance and Surety Corporation, has
no cause of action against it because the latter did not prove that its alleged subrogers have either the ownership or special
property right or beneficial interest in the cargo in question; neither was it proved that the bills of lading were transferred or
assigned to the alleged subrogers; thus, they could not possibly have transferred any right of action to said plaintiff- appellee
in this case. (Brief for the Maritime Company of the Philippines, p. 16).
The records show that the Riverside Mills Corporation and Guilcon, Manila are the holders of the duly endorsed bills of
lading covering the shipments in question and an examination of the invoices in particular, shows that the actual consignees
of the said goods are the aforementioned companies. Moreover, no less than MCP itself issued a certification attesting to this
fact. Accordingly, as it is undisputed that the insurer, plaintiff appellee paid the total amount of P364,915.86 to said
consignees for the loss or damage of the insured cargo, it is evident that said plaintiff-appellee has a cause of action to recover
(what it has paid) from defendant-appellant MCP.
RE: Liability of the owner of a vessel
MCP next contends that it can not be liable solidarity with NDC because it is merely the manager and operator of the vessel
Dona Nati not a ship agent. As the general managing agent, according to MCP, it can only be liable if it acted in excess of
its authority.
As found by the trial court and by the Court of Appeals, the Memorandum Agreement of September 13, 1962 (Exhibit 6,
Maritime) shows that NDC appointed MCP as Agent, a term broad enough to include the concept of Ship-agent in Maritime
Law. In fact, MCP was even conferred all the powers of the owner of the vessel, including the power to contract in the name
of the NDC (Decision, CA G.R. No. 46513, p. 12; Rollo, p. 40). Consequently, under the circumstances, MCP cannot escape
liability.
It is well settled that both the owner and agent of the offending vessel are liable for the damage done where both are
impleaded; that in case of collision, both the owner and the agent are civilly responsible for the acts of the captain;
that while it is true that the liability of the naviero in the sense of charterer or agent, is not expressly provided in
Article 826 of the Code of Commerce, it is clearly deducible from the general doctrine of jurisprudence under the
Civil Code but more specially as regards contractual obligations in Article 586 of the Code of Commerce. Moreover,
the Court held that both the owner and agent (Naviero) should be declared jointly and severally liable, since the
obligation which is the subject of the action had its origin in a tortious act and did not arise from contract.
Consequently, the agent, even though he may not be the owner of the vessel, is liable to the shippers and owners of
the cargo transported by it, for losses and damages occasioned to such cargo, without prejudice, however, to his rights
against the owner of the ship, to the extent of the value of the vessel, its equipment, and the freight.
RE: Extent of Liability

As to the extent of their liability, MCP insists that their liability should be limited to P200.00 per package or per bale of raw
cotton as stated in paragraph 17 of the bills of lading. Also the MCP argues that the law on averages should be applied in
determining their liability.
MCP's contention is devoid of merit. The declared value of the goods was stated in the bills of lading and corroborated no
less by invoices offered as evidence ' during the trial. Besides, common carriers, in the language of the court in Juan Ysmael
& Co., Inc. v. Barrette et al., (51 Phil. 90 [1927]) "cannot limit its liability for injury to a loss of goods where such injury or
loss was caused by its own negligence." Negligence of the captains of the colliding vessel being the cause of the collision,
and the cargoes not being jettisoned to save some of the cargoes and the vessel, the trial court and the Court of Appeals acted
correctly in not applying the law on averages (Articles 806 to 818, Code of Commerce).
MCP's claim that the fault or negligence can only be attributed to the pilot of the vessel SS Yasushima Maru and not to the
Japanese Coast pilot navigating the vessel Dona Nati need not be discussed lengthily as said claim is not only at variance
with NDC's posture, but also contrary to the factual findings of the trial court affirmed no less by the Court of Appeals, that
both pilots were at fault for not changing their excessive speed despite the thick fog obstructing their visibility.
Finally on the issue of prescription, the trial court correctly found that the bills of lading issued allow trans-shipment of the
cargo, which simply means that the date of arrival of the ship Dona Nati on April 18,1964 was merely tentative to give
allowances for such contingencies that said vessel might not arrive on schedule at Manila and therefore, would necessitate
the trans-shipment of cargo, resulting in consequent delay of their arrival. In fact, because of the collision, the cargo which
was supposed to arrive in Manila on April 18, 1964 arrived only on June 12, 13, 18, 20 and July 10, 13 and 15, 1964. Hence,
had the cargoes in question been saved, they could have arrived in Manila on the above-mentioned dates. Accordingly, the
complaint in the instant case was filed on April 22, 1965, that is, long before the lapse of one (1) year from the date the lost
or damaged cargo "should have been delivered" in the light of Section 3, sub-paragraph (6) of the Carriage of Goods by Sea
Act.
010 Republic v. MERALCO AUTHOR: Jade

G.R. No. 141314 April 9, 2003 NOTES: (if applicable)
Lawyers Against Monopoly and Poverty v MERALCO Resolution – Motion for Reconsideration
G.R. No. 141369 April 9, 2003
 A public utility is engaged in public services – providing basic
TOPIC: Public Utility and Public Service commodities and services indispensable to the interest of the
PONENTE: Puno, J. general public.
 The business and operations of a public utility are imbued
with public interest.
 A public utility submits to the regulation of government
authorities and surrenders certain business prerogatives,
including the rates that it may charge.
 The State has an imperative duty to interpose its protective
power whenever too much profits become the priority of
public utilities.
FACTS:
 MERALCO filed this Motion for Reconsideration from the Decision of the Court dated 15 November reducing
MERALCO’s rate adjustment in the amount of P0.017 per kilowatthour (kwh) for its billing cycles beginning 1994 and
further directing MERALCO to credit the excess average amount of P0.167 per kwh to customers starting with billing
cycles beginning February 1994.
 23 December 1993 – MERALCO filed with the Energy Regulatory Board (ERB) an application for revised rates with an
average increase of P0.21 per kwh in its distribution charge.
 28 January 1994 – ERB granted a provisional increase of P0.184 per kwh subject to the condition that in the even that
ERB determines that MERALCO is entitled to a lesser increase in rates, all excess amounts collected shall be refunded
to customers or credited in their favor.
 The Commission on Audit (COA) conducted an examination of the books of accounts and records of MERALCO and
recommended that:
o Income taxes paid by MERALCO should not be included as part of MERALCO’s operating expenses
o The net average investment method or the number of months use method should be applied in determining
the proportionate value of the properties used by MERALCO during the test year.
 16 February 1998 – ERB adopted the recommendations of COA and authorized MERALCO to adopt a P0.017 per kwh
rate adjustment for its billing cycles beginning 1994 and to credit the excess average amount of P0.167 per kwh to
customers stating billing cycles beginning February 1994.
 The ERB decision was affirmed by the Court in its 15 November 2002 Decision.
 MERALCO filed a Motion for Reconsideration contending that:
o the deduction of income tax from revenues allowed for rate determination of public utilities is part of its
constitutional right to property;
o it correctly used the "average investment method" or the "simple average" in computing the value of its
properties entitled to a return instead of the "net average investment method" or the "number of months use
method"; and
o the decision of the ERB ordering the refund of P0.167 per kwh to its customers should not be given retroactive
effect.
 The Republic of the Philippines, through the ERB, represented by the Office of the Solicitor General commented that –
o Income tax payments by a public utility should not be recovered as costs from the consuming public.
o Executive Order # 72 does not grant electric utilities the privilege of treating income tax as operating expense.
o Allowing MERALCO to treat income tax as operating expense would set a dangerous precedent.
o Assuming that the disallowance of income tax as operating expense would discourage foreign investors and
lenders, the government can enact laws and institute measures to lure them back.
o The findings and conclusions of the ERB have great weight and binding on the courts in the absence of grave
abuse of discretion.
o The net average investment method is a reasonable method for property valuation.
o The ERB decision may be applied retroactively and the use of a test period to determine the rate base and
allowable rates to be collected by a public utility is an accepted practice.
ISSUE(S):
1. Whether or not income taxes are lawful charges to operating expenses
2. Whether or not the COA and ERB committed an error in using the net average investment method
3. Whether or not the ERB erred in issuing an order for retroactive application of rage adjustment
HELD
MERALCO’s for motion for reconsideration is denied with finality. (See Ratio part for every issue)
RATIO:
Income taxes and operating expenses
 MERALCO based its contentions from American decisions/jurisprudence BUT it must be noted that our laws must be
construed in accordance with the intention of our own lawmakers and must be construed to serve our own public
interest.
 Rate regulation calls for careful consideration of the totality of facts and circumstances. Rate regulators should strain
to strike a balance between the clashing interests of the public utility and the consuming public. The balance must
assure a reasonable rate of return to public utilities without being unreasonable to the consuming public.
 MERALCO’s insistence that the non-inclusion of income tax payments as a legitimate operating expense will deny public
utilities a fair return of their investment IS rejected.
 From the COA report, MERALCO derived excess revenue during the test year in the amount of
P2,448,378.00  that after the rates where increased by P0.184, MERALCO earned 8.15% more than
the amount it ought to charge its customers to obtain the prescribed 12% rate of return on rate base.
 Thus, ERB lowered the provisional increase by P0.167 per kwh and ordered MERALCO that rate
increase should be P0.017 per kwh only.
 Even if MERALCO’s income tax liability would be included as an operating expense, MERALCO would
still enjoy excess revenue of P312,738.00 or 1.04% above the authorized rate of return of 12%  even
if income tax liability would be included as operating expense, the amount of excess revenue earned
by MERALCO during the test year would be more than sufficient to cover the additional income tax
expense.
 Public utilities cannot be allowed to overcharge at the expense of the public and worse, they cannot complain that they
are not overcharging enough.
 MERALCO even contended that the successor of the ERB, the ERC created under the Electric Power Industry Reform
Act of 2001 (EPIRA) adheres to the principle that income tax is part of operating expense BUT
o The NPC and every distribution facility covered by the law is mandated to unbundle, segregate or itemize its
rates accoding to the various sectors of the electric power industry identified in the law, namely, generation,
transmission, distribution and supply. (Sec 36, EPIRA)
o ERC is directed to regulate and facilitate the unbundling of rates prescribed by Sec. 36.
o The ERC issued guidelines prescribing the uniform rate filing (UFR) requirements to be followed by distribution
facilities for unbundling rates. The UFR specifies a uniform accounting system to be complied with by a
distribution facility for revised rates under the EPIRA. The UFR requirements are intended to promote
consistency and completeness in the rate filings required by EPIRA.
o The UFR prescribes the set of raw data or figures to be disclosed by a distribution facility that the ERC will need
to determine the authorized rates that a distribution facility may charge.
The use of net average investment method

 MERALCO based its use of the average investment method or simple average (obtaining the average value of the utility
plants, using its values at the beginning and at the end of the test year) in the case of MERALCO v. PSC, where its use
of that method was upheld by the Court. However, in that case, the Court only opted not to disturb the findings for
being supported by substantial evidence. Concluding that the use of the average investment method is the only method
to be applied in all instances is a strained reading (and understanding) of the Decision.
 It should be noted that in the case of Republic v. Medina, the Court ruled that… property valuation is not be solved by
formula but depends upon the particular circumstances and relevant facts affecting each utility as to what constitutes
a just rate base and what would be a fair return both to the utility and the public.
 The rate regulating authorities are not hidebound to use any single formula or combination of formulas for property
valuation purposes because the rate-making process involves the balancing of investor and consumer interests which
takes into account various factors that may be unique or peculiar to a particular rate revision application.
 Findings of administrative or regulatory agencies on matters which are within their technical area of expertise are
generally accorded not only respect but at times even finality if such findings and conclusions are supported by
substantial evidence.
Retroactive application of rate adjustment

 ERB, after authorizing MERALCO to adopt a P0.017 rate adjustment per kwh, directed MERALCO to refund or credit
to consumers the excess average amount of P0.167 per kwh from billing cycles beginning February 1994 to billing
cycles beginning February 1998. The Court, in its appealed Decision, also ordered the same.
 MERALCO contends that the figures determined by the ERB only applies to the test year period/COA Audit Period
(February 1, 1994 to January 31, 1995) and that the amounts to determine proper rates to be charged would vary
from year to year.
 Court: The purpose of the audit procedures conducted in a rate application proceeding is to determine whether the
rate applied for will generate a reasonable return for the public utility, which, in accordance with settled laws and
jurisprudence, is 12% on rate base of the present value of the assets used in the operations of a public utility. For
audit purposes, there is a need to obtain a sample set of data to determine the amount of returns obtained by a
public utility during such period.
 In this case, COA conducted the audit for the mentioned test year – 12 months immediately after ERB granted the
provisional increase of P0.184. The ultimate issue resolved by COA when it conducted the audit was whether the
provisional increase generated an amount of return well within the rates authorized by law.
 Based on the findings of the ERB, with the P0.184 increase, MERALCO obtained a rate of return which was 8.15%
more than the authorized 12% rate of return, thus a need to refund P0.167 per kwh.
 The use of a test year does not mean that the information and conclusions so derived would only be correct for that
year and would be incorrect on the succeeding years. The use of a "test year" assumes that within a reasonable
period after such test year, figures used to determine the amount of return would only vary slightly from the figures
culled during the test year such that the impact on the utility's rate of return would not be very significant. Thus, in
the event that there is a substantial change in circumstances significantly affecting the variable amounts that would
determine the reasonableness of a return, an event which would normally occur after a certain period of time has
elapsed, the public utility may subsequently apply for a rate revision.
CASE LAW/ DOCTRINE:
Separate Opinions
PANGANIBAN, J.:
There are still lingering questions that need to be answered or clarified before the Motion for Reconsideration should be
resolved. Some of the more important questions are the following:
1. The ERB, not known as the ERC first appealed this case to the Court when it appealed the Decision of the Court of
Appeals which upheld MERALCO, but the OSG now informs that the ERC reversed its position and now believes
that income taxes are reasonable costs that may be recovered from the consuming public. Is ERC abandoning its
appeal before this Court and is the OSG authorized to argue against its own clients’ position?
2. According to the OSG, the EPIRA, which was enacted on 16 June 2002, allegedly authorizes ERC to determine rates
that will allow the recovery of a just and reasonable return of rate base to enable the entity to operate viably. Does
this mean that effective 16 June 2002, the ERC may allow the deduction of income taxes from operating expenses,
rendering the Court Decision obsolete?
3. The OSG opined that MERALCO would still earn 13% return of rate base if income taxes are not treated as operating
expenses, and 20% if they are deducted as operating expenses. Why is MERALCO still complaining that the ERB
decision bars it from earning the maximum allowable profit of 12%? How accurate are the OSG and COA
computations? Or MERALCO is just misleading the Court?
4. The OSG argues that other public utilities are not allowed to deduct income taxes as operating expenses. Why then
should MERALCO be given this privilege?
The foregoing are the more important questions when it was asked to have this case referred to the Court En Banc and to
conduct oral arguments on the Motion of MERALCO. These questions are not fully taken up by the pleadings of the parties,
thus it would be pretentious to render an opinion on them. A decision that does not take up these questions would be
incomplete.
This case will affect not only MERALCO and its customers but all electric utilities and all their customers all over the
Philippines, which means this case will affect all the people in this country.
WHEREFORE, I regret I cannot cast my vote in favor of (or even against) the ponencia until and unless an Oral Argument is
first called, preferably by the full Court, to clarify the above questions.
G.R. No. 112399 July 14, 1995 AUTHOR:

NOTES: (if applicable)
REPRESENTATIVE AMADO S. BAGATSING VSCOMMITTEE
ON PRIVATIZATION
PETRON was originally registered with the Securities and Exchange Commission (SEC) in 1966 under the
corporate name "Esso Philippines, Inc.". ESSO became a wholly-owned company of the government under the
corporate name PETRON and as a subsidiary of PNOC.PETRON owns the largest, most modern complex refinery
in the Philippines.
It is listed as the No. 1corporation in terms of assets and income in the Philippines in 1993.President Corazon
C. Aquino promulgated Proclamation No. 50 in the exercise of her legislative power under the Freedom
Constitution. Implicit in the Proclamation is the need to raise revenue for the Government and the ideal of leaving
business to the private sector by creating the committee on privatization. The Government can then concentrate
on the delivery of basic services and the performance e of vital public functions. The Presidential Cabinet of
President Ramos approved the privatization of PETRON as part of the Energy Sector Action Plan.
PNOC Board of Directors passed a resolution authorizing the company to negotiate and conclude a contract with
the consortium of Salomon
Brothers of Hongkong Limited and PCI CapitalCorporation for financial advisory services to be rendered to
PETRON. The Petron Privatization WorkingCommittee (PWC) was thus formed. It finalized aprivatization strategy
with 40% of the shares to be sold to a strategic partner and 20% to the general
public The President approved the 40% — 40% — 20%privatization strategy of PETRON.
The invitation to bid was published in severalnewspapers of general circulation, both local andforeign. The PNOC
Board of Directors then passed Resolution No. 866, S. 1993, declaring ARAMCO the winning bidder. PNOC and
ARAMCO signed the Stock Purchase Agreement, the two companies signed the Shareholders' Agreement.
The petition for prohibition in G.R. No. 112399 sought:(1) to nullify the bidding conducted for the sale of a block of
shares constituting 40% of the capital stock(40% block) of Petron Corporation (PETRON) and the
award made to Aramco Overseas Company, B. V.(ARAMCO) as the highest bidder and (2) to stop the sale of said
block of shares to ARAMCO. The petition for prohibition and certiorari in G.R. No. 115994 sought to annul the
sale of the same block of Petron shares subject of the petition in G.R. No. 112399.ARAMCO entered a limited
appearance to question the jurisdiction over its person, alleging that it is a foreign company organized under the
laws of the Netherlands, that it is not doing nor licensed to do business in the Philippines, and that it does not
maintain an office or a business address in and has not appointed a resident agent for the Philippines
.Petitioners however, countered that they filed the action in their capacity as members of Congress.
ISSUE(S): WON Petitioners have a locus standi? How many seats is ARMCO entitled to? Is PETRON a Public Utility?
HELD: Petition is dismissed.
RATIO:
LOCUS STANDI
In Philippine Constitution Association v .Hon. Salvador Enriquez , G.R 113105, August 19, 1994, we held that the
members of Congress have the legal standing to question the validity of acts of the Executive which
injures them in their person or the institution of Congress to which they belong.
In the latter case, the acts cause derivative but nonetheless substantial
injury which can be questioned by members of Congress (Kennedy v. James, 412 F. Supp. 353 [1976]).In the
absence of a claim that the contract in question violated the rights of petitioners or impermissibly intruded into
the domain of the Legislature, petitioners have no legal standing to institute the instant action in their capacity as
members of Congress. However, petitioners can bring the action in their capacity
as taxpayers under the doctrine laid down in Kilosbayan, Inc v . Guingona, 232 SCRA 110
(1994).Under said ruling, taxpayers may question contractsentered into by the national government orgovernment-
owned or controlled corporations alleged to be in contravention of the law. As long as the ruling in Kilosbayan on
locus standi is not reversed, we have no choice but to follow it and uphold the legal standing
of petitioners as taxpayers to institute the present action.
PRIVATIZATION - The only requirement under R.A. No. 7181 in order to

privatize a strategic industry like PETRON is the approval of the President. In the case of PETRON's privatization,
the President gave his approval not only once but twice. PETRON's privatization is also in line with and is part
of the Philippine Energy Program under R.A. No. 7638.Section 5(b) of the law provides that the Philippine Energy
Program shall include a policy direction towards the privatization of government agencies related to energy.
BIDDING
On the claim that there was a failed bidding, petitioners contend that there were only three bidders. One of them,
PETRONAS, submitted a bid lower than the floor price while a second, failed to pre-qualify.
Issue on PUBLIC UTILIY and ARMCO’s SEATS - D. Finally, petitioners contend that PETRON is a public utility,
in which foreign ownership of its equity shall not exceed 40% thereof and the foreign participation in the governing
body shall be limited to their proportionate share in its capital. According to petitioners, ARAMCO is entitled only
to a maximum of four seats in the ten-man board but was given five seats (G.R. No. 112389, Rollo, pp. 30-64; G.R.
No. 115994, Rollo, pp. 30-31, 202-212).
This issue hinges on whether the business of oil refining is a "public utility" within the purview of Section 11,
Article XII of the 1987 Constitution (adopted from Sec. 5, Art. XIV of the 1973 Constitution), which provides:
No franchise, certificate, or any other form of authorization for the operation of a public utility shall
be granted except to citizens of the Philippines or to corporations or associations organized under the
laws of the Philippines at least sixty per centum of whose capital is owned by such citizens………
Implementing Section 8 of Article XIV of the 1935 Constitution, the progenitor of Section 5 of Article XIV of the
1973 Constitution, is Section 13(b) of the Public Service Act, which provides:
The term "public service" includes every person that now or hereafter may own, operate, manage, or
control in the Philippines, for hire or compensation, with general or limited clientele, whether
permanent, occasional, or accidental and done for general business purposes, any common carrier,
railroad, street railway, . . . and other similar public services: . . . .
More pertinent is Section 7 of R.A. No. 387, the Petroleum Act of 1949, which provides:
Petroleum operation a public utility. — Everything relating to the exploration for and exploitation of
petroleum which may consist naturally or below the surface of the earth, and everything relating to
the manufacture, refining, storage, or transportation by special methods of petroleum, as provided
for in this Act, is hereby declared to be of public utility (Rollo, p. 519; Emphasis supplied).
A "public utility" under the Constitution and the Public Service Law is one organized "for hire or compensation" to
serve the public, which is given the right to demand its service. PETRON is not engaged in oil refining for hire and
compensation to process the oil of other parties.
Likewise, the activities considered as "public utility" under Section 7 of R.A. No. 387 refer only to
petroleum which is indigenous to the Philippines. Hence, the refining of petroleum products sourced from
abroad as is done by Petron, is not within the contemplation of the law.
We agree with the opinion of the Secretary of Justice that the refining of imported crude oil is not regulated by, nor
is it within the scope and purview of the Petroleum Act of 1949. He said:
Examination of our statute BOOKS fails to reveal any law or legal provision which, in explicit
terms, either permits or prohibits the establishment and operation of oil refineries that would refine
only imported crude oil (Opinion, No. 267, S. 1955).
WHEREFORE, the petitions are DISMISSED.
CASE LAW/ DOCTRINE:
012 ASSOCIATED COMMUNICATIONS & WIRELESS SERVICES AUTHOR: Gin

– UNITED BROADCASTING NETWORKS v. NATIONAL
TELECOMMUNICATIONS COMMISSION
G.R. No. 144109 February 17, 2003
TOPIC: Public Utility and Public Service
PONENTE: Puno, J.
FACTS:
1. In 1931, Act No. 3846, entitled “An Act Providing for the Regulation of Radio Stations and Radio Communications in the Philippines and for Other Purposes,”
was enacted. It requires a congressional franchise before a radio station can operate.
2. In 1969, a congressional franchise for a radio station to operate under R.A. 4551 was transferred to petitioner Associated Communications & Wireless Services
– United Broadcasting Network, Inc. (ACWS) through Congress’ Concurrent Resolution No. 58. Petitioner ACWS then engaged in the installation and operation
of several radio stations around the country.
3. In 1974, PD 576 was issued which requires radio and TV stations to obtain a permit from Board of Communications and the Secretary of Public Works and
Communication.
4. In 1979, E.O. No. 546 was issued. It integrated the Board of Communications and the Telecommunications Control Bureau under the Integrated Reorganization
Plan of 1972 into the National Telecommunications Commission.
5. Upon termination of petitioner’s franchise on December 31, 1981 pursuant to P.D. No. 576-A, it continued operating its radio stations under permits granted
by the NTC.
6. As these presidential issuances relating to the radio and television broadcasting industry brought about confusion as to whether the NTC could issue permits
to radio and television broadcast stations without legislative franchise, the NTC sought the opinion of the Department of Justice (DOJ) on the matter. DOJ opined,
among others, that: (a) P.D. 576-A did not do away with the requirement of obtaining a legislative franchise (see Sec. 1, Act 3846); (b) Act 3846 has three
requirements for those desiring to construct, install, or operate a radio broadcasting station: (i) legislative franchise, (ii) permit to construct or install from the
Secretary of Commerce and Industry, and (iii) permit to operate from the same; (c) By virtue of Sec. 6 of P.D. 576-A, the power to issue the above-mentioned
permits were transferred to the BOC and the Secretary of Public Works and Communications; (d) By virtue of E.O. 546, the BOC and TCB were integrated, giving
birth to the NTC, which, according to Sec. 15(a) and (c) of the same E.O., has the power to issue CPC’s (for the operation of a radio broadcasting system) and
permits (for the use of radio frequencies for such systems); and (e) The NTC may issue a permit to radio and television broadcasting stations without a franchise
in light of the Supreme Court’s (SC) decision in Albano v. Reyes, where it was held that “franchises issued by Congress are not required before each and every
public utility may operate. [Administrative agencies may be empowered by law] to grant licenses for or to authorize the operation of certain public utilities.”
7. In 1994, Congress’ Committee on Legislative Franchises, the NTC, and the Kapisanan ng mga Brodkaster sa Pilipinas (of which ACWS is a member) signed a
Memorandum of Agreement, whereby a franchise is required for the operation of a radio or television station. Broadcasting stations operating under temporary
permits were given until December 31, 1994 to apply for a franchise.
8. ACWS applied for one prior to the deadline. Pending its approval, it was granted a temporary permit, allowing it to operate from June 1995 to June 1997.
During this time, it was allowed to increase the power output of its television station, Channel 25, and was authorized to purchase additional equipment for it.
ACWS applied for the renewal of its temporary permit in May 1997.
9. Congress was not able to decide ACWS’ application for a franchise because of the latter’s failure to submit the necessary paperwork. NTC found out about this
when it inquired on the matter. ACWS did not refile its application for a franchise.
10. Through a letter from the NTC, ACWS was warned that without a franchise, it will no longer be allowed to operate its stations, and that its application for a
temporary permit will be held in abeyance until it submits a new application for a legislative franchise. As mentioned, ACWS did not refile its application for a
franchise.
11. Despite the absence of a franchise however, the NTC informed ACWS in January 1998 that its May 17 application for a temporary permit was approved, and
that it will be released upon payment of a prescribed fee. Instead of releasing the permit though when ACWS paid the said amount, the NTC commenced an
administrative case against it, threatening to recall the frequency that was assigned to it.
12. NTC issued Memorandum Circular No. 14-10-98. Broadcasting stations without a franchise were given until December 31, 1999 to obtain one. It was also
mandated that the franchise bill should already be before Congress not later than November 30, 1998. The franchise bill of ACWS was filed before the deadline.
13. Meanwhile, as regards the administrative case against ACWS, the NTC decided to recall the frequency assigned to its Channel 25. The matter was brought
before the Courtof Appeals (CA). CA affirmed the NTC. Hence, this petition for review on certiorari.
14. ACWS argues that Sec. 1 of Act 3846 only applies to radio, not television stations. Moreover, it adds that P.D. 576-A dispenses with the legislative franchise
requirement. It also contends that the DOJ Opinion is binding because it was the NTC itself that asked for it from the government’s legal adviser, the DOJ. It must
be noted that the DOJ opined that by virtue of E.O. 546 and Albano v.Reyes, the NTC may issue permits to broadcasting stations without a franchise.
ISSUE(S):
Whether or not a legislative franchise is required for radio and television stations to operate
HELD:
Yes.
RATIO:
 ACWS argues that Act 3846 only applies to radio stations. Act 3846 should be read in conjunction with P.D. 576-A. Even if the former only refers to
radio stations, since the latter is a directly related law which covers both radio and television stations ( see the bullet point below), it can be said that
the requirement under Act 3846 also applies to television stations.
 P.D. 576-A did not do away with the legislative franchise requirement. As a matter of fact, its Sec. 1 reads: “No radio or television channel may obtain
a franchise unless x x x” Sec. 6 of the same also reveals that there is no intention to repeal Sec. 1 of Act 3846. Although the first sentence seems to
point to a repeal, the second one reveals that the requirement was not scrapped, to wit: “x x x Thereafter, irrespective of any franchise x x x granted
by any office, agency, or person, no radio or television station shall be authorized to operate without the authority of the Board of Communications
and the Secretary of Public Works and Communications or their successors x x x” Based on the second sentence, instead of a repeal, what we are
given is another requirement aside from a franchise: permission from the BOC and the Secretary of Public Works and Communications.
 Dispensing with the requirement is not in line with the declared purposes of P.D. 576-A, which is to prevent monopolies and to regulate the allocation
of limited frequencies. Doing away with the requirement defeats public interest, the determination of which is a function of the legislature.
 The DOJ Opinion is not binding; it is merely persuasive. Its conclusion that the NTC may issue permits to stations without a franchise is erroneous.
First, there is a difference between a franchise and a CPC/permit. A “franchise” involves the exercise of the legislature of an exclusive regulatory power
resulting in a grant under authority of government, conferring a special right to do an act or series of acts of public concern; on the other hand, a
“CPC/permit” involves a specialized agency’s exercise of its administrative regulatory powers, which deals with procedures and technicalities.
 Next, under E.O. 546, the NTC only has the power to issue CPC’s or permits, not franchises.
 Lastly, ACWS’ reliance on Albano v. Reyes is misplaced. In that case, there was no law requiring that a legislative franchise be obtained first. Here, we
have Act 3846, as amended by P.D. 576-A and E.O. 546. When there is a law requiring a franchise, an administrative agency cannot allow a public
utility to operate without it.
 What exactly is the reason or rationale for imposing a prior congressional franchise? There seems to be no valid reason for it except to impose added
burden and expenses on the part of the applicant. The justification appears to be simply because this was required in the past so it is now. We are
reminded of the forceful denunciation of Justice Holmes of a stubborn adherence to an anachronistic rule of law. It is revolting to have no better
reason for a rule of law that so it was laid down in the time of Henry IV. It is still more revolting if the grounds upon which it was laid down have
vanished long since, and the rule simply persists from blind imitation of the past. The call to dispense with the requisite legislative franchise must,
however, be addressed to Congress as the lawmaker of the land for the Court’s function is to interpret and not to rewrite the law. As long as the law
remains unchanged, the requirement of a franchise to operate a television station must be upheld.
CASE LAW/ DOCTRINE:

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ALITALIA, Petitioner, vs.

FACTS: (chronological order)

ISSUE(S): Should the Warsaw convention limit ALITALIA’s liability?

CASE LAW/ DOCTRINE:

3. Shewaram case not applicable

7. Proximate cause of the cancellation of the contracts

8. Award of attorney’s fees lost support

CASE LAW/ DOCTRINE: (As provided in the footnote of the case)

004 UNITED AIRLINES v. WILLIE UY AUTHOR: Gin

[SUB-ISSUE AS TO THE LATE FILING OF NOTICE OF APPEAL]

CASE LAW/ DOCTRINE:

Section 4(a) of the same Act further provides that:

18. CASE LAW/ DOCTRINE:

006 RODOLFO B. ALBANO, petitioner, AUTHOR: Krystelle

1. Executive Order No. 30, dated July 16, 1986, provides:

CASE LAW/ DOCTRINE:

007 NPC VS CA AUTHOR: CARAG, J.R.

RE: No Cause of Action

RE: Extent of Liability

010 Republic v. MERALCO AUTHOR: Jade

The use of net average investment method

Retroactive application of rate adjustment

G.R. No. 112399 July 14, 1995 AUTHOR:

FACTS: (chronological order)

PRIVATIZATION - The only requirement under R.A. No. 7181 in order to

WHEREFORE, the petitions are DISMISSED.

CASE LAW/ DOCTRINE:

012 ASSOCIATED COMMUNICATIONS & WIRELESS SERVICES AUTHOR: Gin

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