PUBLIC SERVICE ACT Flashcards
What are the purposes of the Public Service Act?
1. To secure adequate, sustained service for the public at the least possible cost; 2. To protect the public against unreasonable charges and poor, inefficient service; 3. To protect and secure investments in public services; 4. To prevent ruinous competition.
What is the AUTHORITY TO OPERATE PUBLIC SERVICES?
No public service shall operate
without having been issued a certificate of public
convenience or a certificate of public convenience
and necessity.
EXCEPTIONS:
1. Warehouses;
2. Animal drawn vehicles and bancas moved
by oar or sail;
3. Airships, except for the fixing of maximum
rates for fare and freight;
4. Radio companies, except for rates fixing;
5. Public services owned or operated by the
government, except as to rates fixing;
6. Ice plants; and
7. Public markets.
Define Public Service
A person who owns, operates, manages or
controls 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 or
public utility, ice plants, power and water supplies,
communication and similar public services. (Sec.
13b, CA 146)
What is not a public service?
A casual or incidental service devoid of public
character and interest is not brought within the
category. The question depends on such factors as
the extent of services, whether such person or
company has held himself or itself out as ready to
serve the public or a portion of the public generally.
(Luzon Stevedoring vs. PSC)
UNLAWFUL ACTS OF PUBLIC UTILITY
COMPANIES
- Engagement in public service business without
first securing the proper certificate; - Providing or maintaining unsafe, improper or
inadequate service as determined by the
proper authority; - Committing any act of unreasonable and unjust
preferential treatment to any particular person,
corporation or entity as determined by the
proper authority; - Refusing or neglecting to carry public mail
upon request. (Secs. 18 and 19)
ACTS REQUIRING PRIOR APPROVAL
- Establish and maintain individual or joint rates;
- Establish and operate new units;
- Issue free tickets;
- Issue any stock or stock certificates
representing an increase of capital; - Capitalize any franchise in excess of the
amount actually paid to the Government; - Sell, alienate, mortgage or lease Under Sec. 20(g) of C.A. No. 146, the sale, etc.
may be negotiated and completed before the
approval by the proper authority. Its approval is not
a condition precedent to the validity of the contract.
The approval is necessary only to protect public
interest.
What is the PRIOR OPERATOR/OLD OPERATOR RULE?
The rule allowing an existing franchised operator
to invoke a preferential right within the authorized
territory as long as he renders satisfactory and
economical service.
The policy is not to issue a certificate to a second
operator to cover the same field and in competition
with a first operator who is rendering sufficient,
adequate and satisfactory service. The prior
operator must first be given an opportunity to
improve its service, if inadequate or deficient.
Purpose: To prevent ruinous and wasteful
competition in order that the interests of the public
would be conserved and preserved.
It subordinates the prior applicant rule which
gives the first applicant priority only if things and
circumstances are equal.
Where the operator either fails or neglects to
make the improvement or effect the increase in
services, especially when given the opportunity, new
operators should be given the chance to give the
services needed by the public.
What is the prior applicant rule?
Presupposes a situation when two interested
persons apply for a certificate to operate a public
utility in the same community over which no person
has as yet granted any certificate. If it turns out,
after the hearing, that the circumstances between
the two applicants are more or less equal, then the
applicant who applied ahead of the other, will be
granted the certificate.
What is the Rate-fixing power of Public Services?
The rate to be fixed must be just, founded upon
conditions which are fair and reasonable to both the
owner and the public.
A rate is just and reasonable if it conforms to the
following requirements:
1. One which yields to the carrier a fair
return upon the value of the property
employed in performing the service; and
2. One which is fair
What is the Registered Owner Rule
The registered owner of a certificate of public
convenience is liable to the public for the injuries or
damages suffered by third persons caused by the
operation of said vehicle, even though the same had
been transferred to a third person.
The registered owner is not allowed to escape
responsibility by proving that a third person is the
actual and real owner Reason: It would be easy for
him, by collusion with others or otherwise, to
transfer the responsibility to an indefinite person, or
to one who possesses no property with which to
respond financially for the damage or injury done.
(Erezo, et al. vs. Jepte 102 Phil 103).
What is a Kabit system?
A system whereby a person who has been
granted a certificate of public convenience allows
other persons who own motor vehicles to operate
under such license, for a fee or percentage of such
earnings. It is
What are the effects of a Kabit System?
- The transfer, sale, lease or assignment of the
privilege granted is valid between the
contracting parties but not upon the public or
third persons. (Gelisan vs. Alday, 154 SCRA
388)
In a kabit system, Is a registered owner primary liable for a ll the consequences flowing from the operations of the carrier? Why or why not?
The registered owner is primarily liable for all
the consequences flowing from the operations
of the carrier.
The public has the right to assume that the
registered owner is the actual or lawful owner
thereof. It would be very difficult and often
impossible, as a practical matter, for the public
to enforce their rights of action that they may
have for injuries inflicted by the vehicle if they
should be required to prove who the actual
owner is. (Benedicto vs. IAC, 187 SCRA 547)
The thrust of the law in enjoining the kabit
system is to identify the person upon whom
responsibility may be fixed with the end in view
of protecting the riding public (Lim vs. CA 373
SCRA 394).
In a kabit system, Can a registered owner recover from an actual owner?
The thrust of the law in enjoining the kabit
system is to identify the person upon whom
responsibility may be fixed with the end in view
of protecting the riding public (Lim vs. CA 373
SCRA 394).
In a kabit system, is the registered owner and the actual owner jointly and severally liable?
For the better protection of the public, both the
registered owner and the actual owner are
jointly and severally liable with the driver.
(Zamboanga Transportation Co. vs. CA)
