Transpo Flashcards
Munn v. Illinois
Property becomes clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. He must submit to be controlled by the public for the common good, to the extent of the interest he has thus created.
Public service (CA 146)
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, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whether may be its classification, freight or carrier service of any class, express service, steamboat or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine railways, marine repair shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services
Luzon Stevedoring v. PSC
Still a public service if conducted for hire or compensation even if the operator deals only with a portion of the public or limited clientele.
Rationale for regulation
Social justice; meant to balance private and public interests; common good
How to determine just and reasonable rates (Republic v. Meralco)
Consider:
1) Rate of return;
2) Rate base; and
3) The return itself or the computed revenue to be earned by the public utility based on the rate of return and rate base.
Basis for the power to regulate rates (Republic v. Meralco)
Police power & statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof.
Balancing of interests (Republic v. Meralco)
In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. Thus, the fixing of just and reasonable rates involves a balancing of the investor and the consumer interests.
Fair return = Reasonable to the public
Public utility (Sec. 13(d), CA 146 amended by RA 11659)
A public service that operates, manages or controls for public use any of the ff:
1) Distribution of Electricity
2) Transmission of Electricity
3) Petrol and Petrol Products Pipeline Transmission Systems
4) Water Pipeline Distribution Systems and Wastewater Pipeline Systems, inc sewerage pipeline systems
5) Seaports
6) PUVs
Public use (Iloilo Ice Company)
Not confined to privileged individuals; open to the indefinite public
Test: Can the public enjoy it by right or only by permission?
Elements of a public service
1) Person owns, operates, manages, or controls in the PH public services that may include distribution of goods or rendering of services to the public
2) Ownership must be for hire/compensation
3) Ownership must be for general business purposes
4) With general/limited clientele
5) May be permanent, occasional or accidental
When are common carriers considered public service?
1) If they transport freight or passenger/both
2) If their service is with/out fixed route
3) If their classification may be freight/carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water craft
Why is it justified to regulate public utilities?
Because whenever private property is used for a public purpose and is affected with public interest, it ceases to be juris private only and becomes subject to regulation.
Albano v. Reyes
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.
Potestas delegata non delegari potest.
What has been delegated cannot be further delegated
LTFRB delegated power (EO 202)
“to determine, prescribe, approve and periodically review and adjust, reasonable fares, rates and other related charges, relative to the operation of public land transportation services provided by motorized vehicles.”
NTC’s power (EO 436)
Regulation and supervision of the cable television industry in the Philippines
Batangas CATV v. CA
Pursuant to E.O. 436, “only persons, associations, partnerships, corporations or cooperatives granted a Provisional Authority or Certificate of Authority by the NTC may install, operate and maintain a cable television system or render cable television service within a service area.” It is clear that in the absence of constitutional or legislative authorization, municipalities have no power to grant franchises. But local governments may prescribe regulations as may be needed for the health, morals, peace, education, good order, safety or general welfare of their constituents.
Utak-1 v. COMELEC
The COMELEC’s Resolution prohibiting the display of election materials in PUVs and transport terminals is NOT within the constitutionally delegated power of the COMELEC under Section 4, Article IX-C, Const.
Sec. 4, Art. IX-C
The Commission may, during the election period, supervise or regulate the enjoyment or utilization of all franchises or permits for the operation of transportation and other public utilities
What do you call public services that are not public utilities?
Businesses affected with public interest (RA 11659)
Enterprises not considered “public service” under CA 146 (Sec. 14, CA 146)
1) Warehouses
2) Animal-drawn vehicles, or oar/sale-moved bancas, tugboats and lighter
3) Airships within the PH (except for the matter of rate-fixing)
4) Radio companies “…”
5) Public services owned/operated by any Gov’t/GOCC “…”
“Affected with public interest”
Can mean no more than that an industry, for adequate reason, is subject to control for the public good.
Public utility (Nebbia v. NY)
A business so affected is one in which property is devoted to an enterprise of a sort which the public itself might appropriately undertake, or one whose owner relies on a public grant or franchise for the right to conduct the business, or in which he is bound to serve all who apply
Tatad v. Garcia
The facilities used to operate a public utility are not a public utility per se
What to look for in determining if there is public use? (Iloilo Ice Company)
Consider:
1) Character of the business
2) Mode of operation
Public utility (JG Summit)
A business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service.
JG Summit Holdings
Shipyards are not a public utility
Other things NOT a public utility
1) Electricity generation
2) Electricity supply to the contestable market
3) Foreign vessels engaged in carriage
Elements of a public utility
1) Public interest or consequence
2) Private property devoted to public use
3) Offers to the public indiscriminately
4) For hire/compensation
Consequences of being a public utility (Republic v. Meralco)
1) Ceases to be juris privati
2) Grants to the public an interest in its use/utility
30 Can be regulated
Gamboa v. Teves
GEN: Count those that are entitled to vote.
In Gamboa, Capital = “total amount of common shares” AKA those entitled to vote.
Citizenship requirement (Sec. 11, Art. 12)
No franchise, cert, or other form of authorization for the operation of a public utility shall be granted EXCEPT to PH citizens or domestically organized corporations/associations, at least 60% of whose capital is owned by such citizens
SEC (Sec. 14, Corpo Code)
SEC has the regulatory function to reject or disapprove the Articles of Incorporation of any corporation where “the required percentage of ownership of the capital stock to be owned by citizens of the Philippines has not been complied with as required by existing laws or the Constitution.”
2-step conversion from debt to equity (In the Matter of: Bayantel)
1) Identify into which class of shares the debt will be converted (if common, preferred, or non-voting preferred)
2) Determine the number of shares with voting rights will be held by foreign entities prior to conversion. If after conversion, the shares exceeds 40%, that exceeds the limit. Otherwise, respect the limitation.
Beneficial owner (Roy v. Herbosa)
Any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power (which includes the power to vote or direct the voting of such security) and/or investment returns or power (which includes the power to dispose of, or direct the disposition of such security)
New requirement (Roy v. Herbosa) (Sec. 2, SEC MC 8-2013)
Consider now: (a) the total number of outstanding shares of stock entitled to vote in the election of directors; AND (b) the total number of outstanding shares of stock, whether or not entitled to vote in the election of directors
Exclusivity (Sec. 11, Art. 12)
No franchise shall be exclusive in character
Exclusivity (Sec. 11, Art. 12)
No franchise shall be exclusive in character
Metro Cebu Water v. Adala
A provision in PD 198 was declared unconstitutional for subjecting the franchise to the approval of the board of directors of the district.
Subject to Amendment
No franchise shall be granted except under the condition that it shall be subject to amendment, alteration or repeal by the Congress when the common good so requires
Franchise (Radio Comms v. NTC)
A privilege emanating from the sovereign power
of the state. A legislative grant of special privilege. It is subject to regulation by the state by virtue of its police power exercised through administrative agencies.
Radio Comms v. NTC
Radio companies are required to have a certificate from the NTC.
Francisco v. Toll Regulatory Board
GEN: A legislative franchise cannot be modified/amended by an administrative body with general delegated powers, to grant authorities or franchises.
EXC: If the administrative agency is granted the power to impose conditions in an appropriate contract “when public interest so requires”, then said body may, subject to certain qualifications, alter the conditions of such authorization.
Francisco v. Toll Regulatory Board
GEN: A legislative franchise cannot be modified/amended by an administrative body with general delegated powers, to grant authorities or franchises.
EXC: If the administrative agency is granted the power to impose conditions in an appropriate contract “when public interest so requires”, then said body may, subject to certain qualifications, alter the conditions of such authorization.
Francisco v. TRB (Fixed-term/Maximum-term)
While the TRB is vested by law with the power to extend the administrative franchise or authority that it granted, nevertheless, it cannot do so for an accumulated period exceeding 50 years. Otherwise, it would violate the proscription under Article XII, Section 11 of the 1987 Constitution
Permanent Take-over Power (Sec. 18, Art. 12) exercised by President
State may, in the interest of national welfare/defense, (1) establish and operate vital industries and (2) upon just compensation, transfer to public ownership utilities and other private enterprises to Gov’t operation
Temporary Take-over Power (Sec. 17, Art. 12) delegated by Congress
In national emergency, when public interest so requires, the State may, under reasonable terms prescribed by it, temporarily take over/direct the operation of any privately owned public utility/business affected with public interest
National emergency (Davide v. GMA)
Existence of conditions suddenly intensifying the degree of existing danger to life or well-being beyond that which is accepted as normal
Types of emergencies (David v. GMA)
1) Economic
2) Natural disaster
3) National security
Conditions for granting Sec. 23, Art. VI emergency powers
1) War or other emergency
2) Delegation is for a limited period only
3) Subject to restrictions as prescribed by Congress
4) Must be exercised to carry out a national policy declared by Congress
Police power
State authority to enact legislation that may interfere with personal liberty/property in the interest of general welfare
Privatization of state-operated public utilities (Kuwait Airways v. PAL)
Under the post-privatization era, the authority of the Philippine Government can only come in its capacity as regulator. As with all regulatory subjects of the government, infringement of property rights can only avail with due process of law.
Regulations
Means of controlling method of operation
Ways to regulate
1) Authority to operate
2) Rate-fixing
3) Area of operation
4) Approval of sale, mortgage, lease of public utility assets/equities
5) Power to set fees and other charges
6) Other means of regulation
Rule regarding authority to operate
GEN: No public service will operate without being issued a certificate of public convenience (CPC) or a certificate of public convenience and necessity (CPCN)
EXC: Those under Sec. 14 and legislative franchises
Who has the power to authorize?
Congress.
PLDT v. NTC
The provisional authority was issued after due hearing, reception of evidence and evaluation thereof, with the hearings attended by various oppositors, including PLDT. It was granted only after a prima facie showing that ETCI has the necessary legal, financial and technical capabilities and that public interest, convenience and necessity so demanded.
Authority to operate as per Francisco v. TRB
Congress has an explicit authority to grant a public utility franchise. However, it may validly delegate its legislative authority, under the power of subordinate legislation, to issue franchises of certain public utilities to some administrative agencies. Thus, a special franchise directly emanating from Congress is not necessary if the law already specifically authorizes an administrative body to grant a franchise or to award a contract
NAPOCOR v. CA
Such authority to be a public utility may not be exercised in such a manner as to prejudice the rights of existing franchisees. The determination of which of two public utilities has the right to supply electric power to an area which is, with the enactment of Republic Act No. 7638, under the Department of Energy
CPC v. Franchise (Metru Cebu Water v. Adala)
CPC: A formal written authority issued by quasi-judicial bodies for the operation and maintenance
of a public utility for which a franchise is not required by law
Franchise: A privilege or authority to operate appropriate private property for public use vested by Congress through legislation.
How to issue certificates (Sec. 16)
PSC has power upon notice and hearing to issue certificates authorizing operation of public service… so long as it will promote public interest in a proper and suitable manner… issued to corps., partnerships, associations or joint stock companies
Consequence of failure to get certificate (Sec. 18)
Will be unlawful to engage in public service without certificate
General qualifications for a grant of CPC (Vda. de Lat v. PSC)
1) Applicant is a citizen of the PH or a corp., co-partnership, association or joint-stock company organized in the PH with at least 60% of its stock/paid-up capital belonging to PH citizens
2) Applicant is financially capable of undertaking the service and meetings its incidental responsibilities
3) Applicant proved that the operation will promote the public interest
When do public convenience and necessity exist? (KMU v. Garcia)
When the proposed facility/services (1) meets a reasonable want of the public and (2) supplies a need which existing facilities don’t adequately supply.
The applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner.
How to attack a public utility?
Quo warranto proceedings instituted by the State
When may a CPC be cancelled?
1) Misrepresentation
2) Refusal of the petitioner to comply with the
directives rules and regulations of the PSC. (Willful and contumacious violation of the law and rules.
Divinagracia v. Consolidated
Allowing [an administrative agency] to revoke a franchisee’s franchise gives rise to an administrative agency’s veto power, which is contrary to the separation of powers
PAL v. CAB (1968)
CAB’s authority under RA No. 776 to grant a temporary permit upon its own initiative suggests the power to exercise said authority even before the presentation of evidence has begun.
