PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, PETITIONER, VS. HON. ENRIQUE MEDINA, PUBLIC SERVICE COMMISSIONER AND OSCAR L. NOBLEJAS, RESPONDENTS.

Philippine Long Distance Telephone Company versus Medina

The Case

This is a petition brought before the Supreme Court by the Philippine Long Distance Telephone Company, commonly called PLDT, against Public Service Commissioner Enrique Medina and telephone applicant Oscar L. Noblejas. PLDT asks the Court to reverse and set aside three orders of the Public Service Commission: the order of March 25, 1965 directing PLDT to install telephones for two complainants, the order of May 13, 1965 denying PLDT's motion for reconsideration, and the order of June 2, 1965 reiterating the installation order and imposing a daily fine. The case matters because it fixes the rule on priority in the grant of telephone service: priority is measured by the date the application is filed with PLDT, not by the date the Public Service Commission approves it.

Procedural History

The matter began as an administrative complaint before the Public Service Commission, docketed as Case No. 65-16-OC, arising from reports that PLDT was discriminating in its servicing and grant of telephone installations. Commissioner Medina issued an order on March 19, 1965 requiring PLDT to show cause why the applied telephone of Cesar J. Bautista should not be installed, and endorsing to PLDT the application of Oscar L. Noblejas. After hearings, Commissioner Medina issued the order of March 25, 1965 requiring installation of a telephone for Bautista within fifteen days and for Noblejas within twenty days. PLDT moved for reconsideration, which was denied in the order of May 13, 1965. After PLDT formally offered its evidence, Commissioner Medina issued the order of June 2, 1965 reiterating the order for Noblejas and imposing a fine of fifty pesos a day until service was installed. PLDT then appealed to the Supreme Court from the three orders.

Facts

The Public Service Commission received complaints that PLDT was discriminating in its servicing and grant of telephone installations. It was reported that Cesar J. Bautista had filed an application for telephone connection with PLDT, that the application had been coursed through the Commission and approved by it, and that despite such approval PLDT failed to act on it, instead giving priority to other applicants whose applications the Commission had not approved. Acting on these reports, Commissioner Medina issued the order of March 19, 1965 requiring PLDT to appear and show cause, and in the same order endorsed to PLDT the telephone application of Oscar L. Noblejas.

At the hearing on March 25, 1965, Commissioner Medina advised PLDT's counsel that the complaint was for inadequate service. PLDT requested a copy of the complaint, but the Commissioner ruled that it was not necessary to provide one. PLDT informed the Commissioner that Bautista had filed his application with PLDT on June 2, 1964, and that Noblejas had filed no application except the one endorsed by the Commission, which PLDT entered in its file of requests upon receipt of the order. PLDT was allowed to present evidence. Its General Commercial Superintendent testified that Bautista's telephone was not yet installed because PLDT was still enlarging its Makati Central Office and because there were several prior applications. The Commissioner discontinued that testimony, called a Commission official who testified on complaints of preferences based on bribes given to PLDT linemen, and then issued the order of March 25, 1965 requiring the two installations.

PLDT installed Bautista's telephone on March 31, 1965, and that incident was closed. At the hearing on April 21, 1965, the Commissioner again questioned PLDT's superintendent and called another witness over objection, who testified that his telephone was installed only after a long delay because of his refusal to give money. PLDT's counsel was then allowed to examine its witness, who testified that while PLDT could serve Bautista after completing its expansion, it could not immediately serve Noblejas because applications in his area filed ahead of his recorded date of application had to be attended to first. On May 13, 1965, a Commission engineer testified that cable facilities were available for Noblejas, but admitted on cross examination that he did not verify whether there were prior applicants in the area. PLDT submitted a map showing the route of the cable and the prior applicants. That same day, the Commissioner denied PLDT's motion for reconsideration. The order of June 2, 1965 followed.

Issues

• Whether or not the orders of the Public Service Commission are invalid for bearing only the signature of Commissioner Medina instead of the signatures of three Commissioners.
• Whether or not the Public Service Commission may legally order PLDT to grant the application of Oscar L. Noblejas for telephone connection ahead of applicants who had filed prior applications with PLDT.

Applicable Provisions

Section 3 of Public Act 3436, the law granting the telephone franchise to PLDT, is the general rule on priority of applications, as the Court itself states it:

The priority should be determined in accordance with the dates of filing of the application with PLDT, the general rule provided for in Section 3 of Public Act 3436, the law granting telephone franchise to the PLDT.

This provision supplies the governing standard: the date of filing with PLDT, not the date of approval by the Commission, fixes the order in which applications are to be served.

The condition invoked by Commissioner Medina, contained in the Commission's decision of July 31, 1963 in several rate and expansion cases, reads:

In order to avoid complaints of favoritism and/or suspicions of discrimination or that the new telephone connections or transfer are effected for money consideration, all telephone connections and/or transfers after the receipt of this decision shall be undertaken only upon prior approval of the Public Service Commission.

This condition would have made Commission approval the measure of priority, but the Court holds that it was removed and deleted by the amended decision of January 9, 1964.

Ruling

On the first issue, the Court did not resolve it. It said that assuming the present case involves an uncontested proceeding not requiring the vote of three Commissioners, a point it did not decide, the controlling point is that the records clearly and undisputedly show that there were applicants prior to Noblejas who had not yet been served with telephone connections.

On the second issue, the Court ruled for PLDT. The argument that prior applicants cannot claim priority because their applications were not approved by the Commission, and the Commissioner's system of determining priority by the date of approval by the Commission rather than the date of filing with PLDT, both rest on conditions allegedly imposed on PLDT in its rate and expansion cases. The Court held that this point had already been resolved in an earlier PLDT versus Medina case, where it ruled that pursuant to an amended decision of the Public Service Commission dated January 9, 1964, all the conditions imposed in the original decision were removed and deleted. It follows that priority cannot be measured by the dates of approval by the Commission, since no such approval is required. Priority must follow the dates of filing of the application with PLDT, the general rule under Section 3 of Public Act 3436. Following that system, Noblejas is not entitled to installation of his requested telephone until the prior applicants concerned shall have been served, and the Commission should have ordered PLDT to service the prior applicants first instead of Noblejas.

Doctrine

Priority in the grant of telephone service is determined by the date of filing of the application with PLDT, in accordance with the general rule of Section 3 of Public Act 3436, and not by the date of approval of the application by the Public Service Commission, because no such approval is required after the conditions imposing it were removed and deleted by the amended decision of January 9, 1964. A telephone applicant whose application was filed later cannot be served ahead of applicants who filed earlier with PLDT; the Commission acts with grave error when it orders a later applicant served first. The Court also leaves open, without deciding, whether an uncontested proceeding before the Commission requires the vote of three Commissioners.

Disposition

The Court reversed and set aside the appealed orders and dismissed the complaint against PLDT, but enjoined PLDT to service the applications in the priority of their dates of filing with PLDT, without costs.

Remember This

The one line to memorize: priority in telephone service follows the date of filing with PLDT, not the date of approval by the Public Service Commission. Examiners use this case to test the hierarchy of franchise rules and the limits of administrative discretion in imposing conditions that later stand deleted.