PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (PNCC), PETITIONER, VS. REPUBLIC OF THE PHILIPPINES, HONORABLE COURT OF APPEALS, FEDERATION OF PARAÑAQUE HOMEOWNERS’ ASSOCIATION, CE…

The center of controversy
in this case is the toll fees at the North and South Luzon Expressways.

In May, 1987, public
respondent Republic of the Philippines filed an action for quo warranto in the Regional Trial Court of Makati with prayer for the issuance of a writ of
preliminary injunction and restraining order docketed as Civil Case No. 16699
against the petitioner Philippine National Construction Corporation
(PNCC).  The public respondent filed the
action in order to exclude from the franchise of PNCC under Presidential Decree
No. 1113 the following portions of the expressways:  (a) Balintawak, Caloocan City to Tabang, Bulacan in the North; and (b) Villamor
Air Base, Pasay City to Alabang,
Rizal in the South, on the ground that PNCC had long
fully recovered its investments and expenses in their construction.

In an order dated May 28,
1987, the trial
court denied the application for the issuance of a writ of preliminary
prohibitory injunction, the dispositive part of which
reads as follows:

“WHEREFORE, the application
for  the issuance of a writ of preliminary
prohibitory injunction is hereby denied, and the restraining order issued on May 8, 1987 and all orders
subsequently issued supplementary thereto or in implementation thereof are
hereby set aside.

However, to assure that the affected toll payers would be
reimbursed in case judgment is subsequently rendered in accordance with the reliefs prayed for in the Petition filed in this case, the
respondent PNCC and its authorized officers are hereby directed to cause all
toll fees collections received from the use of the Villamor
Air Base, Pasay City, to Alabang,
Muntinlupa, in the South, and Balintawak,
Caloocan City to Tabang, Bulacan, in the North, portions of the Expressways, to be
deposited in a trust fund with the Philippine National Bank, effective May 29,
1987 and until further orders, and to submit to the Court a monthly statement
of the collections made and the amounts deposited.”^[1]

A  motion for reconsideration filed by the public respondent of said order
was denied on July 29, 1987.

Not satisfied therewith
the public respondent filed a petition for certiorari, prohibition and
injunction with prayer for preliminary prohibitory injunction and/or temporary
restraining order in the Court of Appeals, seeking to declare null and void the
said orders dated May 28, 1987 and July 29, 1987 in Civil Case No. 16699.

The petitions for the
intervention of the Federation of Paranaque
Homeowners Association, Ceferino P. Padua, Amelito Mutuc, and Fernando A. Gaite were allowed by the appellate court.

In due course a decision
was rendered by the Court of Appeals on August 4, 1989, the dispositive
part of which reads as follows:

“WHEREFORE, the writ is granted.  The Expressways from Balintawak
to Tabang in the North and from Villamor
Air Base to Alabang, in the South shall be excluded
from the franchise of PNCC and the PNCC be permanently enjoined to collect toll
fees.  The Bureau of Public Highways is
hereby ordered to take over the maintenance of the said portion.  The questioned orders of Judge Guerrero dated
May 28, 1987 and July 29, 1987 are hereby declared
annulled.”^[2]

Hence, the herein
petition for certiorari and prohibition with application for the
issuance of a writ of preliminary injunction and/or temporary restraining
order, wherein petitioner raised the following grounds for the allowance of the
petition:

“GROUNDS FOR THE ALLOWANCE OF THE PETITION

(A) RESPONDENT
HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND/OR EXCEEDED ITS
JURISDICTION IN GRANTING A FINAL RELIEF WHEN WHAT WAS PRAYED FOR WAS MERELY A
PROVISIONAL REMEDY;

(B) RESPONDENT
HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND/OR EXCEEDED ITS
JURISDICTION WHEN IT DEPRIVED PETITIONER PNCC OF ITS CONSTITUTIONAL RIGHT TO
DUE PROCESS;

(C)
RESPONDENT HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND/OR
EXCEEDED ITS JURISDICTION WHEN IT AMENDED THE FRANCHISE UNDER P.D. 1113 OF
PETITIONER PNCC BY EXCLUDING FROM SAID FRANCHISE THE EXPRESSWAYS FROM
BALINTAWAK TO TABANG IN THE NORTH AND FROM VILLAMOR AIR BASE TO ALABANG IN THE
SOUTH;

(D) RESPONDENT
HONORABLE COURT OF APPEALS HAS NO JURISDICTION OVER THE PETITION INSTITUTED BY
THE SOLICITOR GENERAL ON BEHALF OF THE GOVERNMENT; AND

(E)  RESPONDENT HONORABLE COURT OF APPEALS GRAVELY
ABUSED ITS DISCRETION IN TAKING COGNIZANCE OF THE PETITION WHICH FAILED TO
COMPLY WITH THE REQUIREMENT OF THE RULES OF COURT ON QUO WARRANTO.^[3]

As required by the Court,
the public respondent and private respondents filed their comments on the
petition except private respondent Fernando A. Gaite
who filed a motion to dismiss the petition alleging there are still pending
incidents in the appellate court.

On February
16, 1990 the parties
filed a motion for judgment based on the compromise agreement that reads as follows:

“MOTION FOR JUDGMENT

BASED ON COMPROMISE AGREEMENT

Petitioner Philippine National Construction Corporation (PNCC),
public respondent Republic of the Philippines, private respondent Federation of
Parañaque Homeowners Association, Ceferino
P. Padua and Ex-Ambassador Amelito R. Mutuc, duly assisted by their respective counsel, to this
Honorable Court most respectfully submit the following:

COMPROMISE
AGREEMENT

1.  This compromise agreement is hereby entered
into and executed by the aforementioned parties in settlement of the present
case and the following cases, to wit:

a.  Civil Case No. 16699, Republic of the Philippines.
vs. Philippine National Construction Corporation, et al., Regional Trial Court,
Branch 137, Makati,
Metro Manila;

b.   CA-G.R. SP No. 13235, Republic of the Philippines.
vs. Honorable Jesus F. Guerrero, et. al., Court of Appeals;

c.   TRB Case No. 83-1, now O.P. Case No. 3465 of
the Office of the President.

so that this Honorable
Court no less can terminate all these cases/controversy which have been pending
for more than ten (10) years.

2.  The aforenamed
parties in the above-cited cases have mutually agreed to settle their
differences, terminate the cases between them that are pending in the different
courts, and avoid future litigations by binding themselves to the following
conditions:

a. 
Effective April 11, 1990, PNCC shall operate the questioned segments of
the North Luzon Tollways (Balintawak
to Tabang) and the South Luzon Tollways
(Nichols to Alabang), under the following charges for
Class “1” vehicles, the collections of which PNCC shall devote and
utilize exclusively for the maintenance and upkeep of said segments, to wit:

b. The construction
of additional facilities, operation and maintenance of the questioned portions of
the North and South Expressways by the PNCC shall be under the supervision,
approval and control of the Department of Public Works and Highways through the
Toll Regulatory Board in coordination with the PNCC.

c.   Upon approval of the compromise agreement by
the Court, PNCC shall be allowed to withdraw/encash
and to receive the proceeds of the special time deposit with the Philippine
National Bank, including the earnings and/or interest thereon, as well as all
moneys deposited by PNCC under escrow pursuant to the May 28, 1987 Order of the
Regional Trial Court Metro Manila, provided that said funds shall be used
exclusively for the installation of (i) tollways lights equivalent to daytime lighting at the
interchange and along the center of the Nichols-Alabang
and Balintawak Tabang
expressways, pursuant to internationally accepted expressways lighting standard
and (ii) emergency call boxes every two kilometers throughout the length of the
aforementioned segments at the average of one (1) callbox per two (2) kilometers
and that PNCC shall complete the installations of (i)
and (ii) within a non-extendible period of nine (9) months from approval by
this Honorable Court of this Agreement.

d.   PNCC shall publish in a newspaper of general
circulation a regular quarterly accounting on how the deposited amount has been
expended for purposes set forth in paragraph 2 (c) hereof.

e.   In the implementation of paragraph 2, (b) and
(c) above, PNB Buendia Branch shall release and/or
pay the proceeds of the special time deposit with the Philippine National Bank
to PNCC through its incumbent Treasurer only.

f.   All the aforenamed
parties to the instant case agree to the dismissal with prejudice of the
present case and the cases enumerated in paragraph 1 of this compromise
agreement.

g.   All aforenamed
parties hereby waive and abandon any and all claims and counterclaims which
they may have against each other.

h.   This agreement shall be binding not only on
the aforenamed parties but also on their respective
assigns and successors-in-interest, including the aforenamed
intervenors private respondents.

i.    Should PNCC
fail to comply with any of its commitments under this Compromise Agreement set
forth in paragraph 2 (c) hereof, the Court of Appeals Decision dated August 4,
1989 in CA-G.R. SP No. 13235, entitled “Republic of the Philippines versus
Hon. Jesus Guerrero, RTC Br. 148, Makati, Metro
Manila, and Philippine National Construction Corporation (PNCC) formerly CDCP;
Federation of Parañaque Homeowners Associations and Ceferino P. Padua, Intervenors; Amelito Mutuc, Intervenor; Fernando A. Gaite, Intervenor” shall become immediately final and executory.  This
sanction becomes without force and effect upon PNCC’s
compliance with such commitments except its other commitments under this Agreement
and the maintenance of the questioned portions of the expressways which PNCC
shall continue pursuant to paragraph 2 (b) hereof.

j.    The parties hereby undertake to discharge
their commitments hereunder in utmost good faith and diligence, and shall not
do any act that would render nugatory the terms and conditions of this
agreement.

k.   This compromise Agreement shall take effect
upon approval thereof by this Honorable Court.

WHEREFORE, it is respectfully
prayed of this Honorable Court that this Compromise Agreement be approved and a
decision rendered based thereon.

Makati,
Metro Manila, February 15, 1990.

REPUBLIC OF THE PHILIPPINES                                                                          PHILIPPINE
NATIONAL

Respondent
                                                                                            CONSTRUCTION
CORPORATION

                                                                                                                                   Petitioner

By:                                                                                                                            By:

(sgd.) FRANCISCO I. CHAVEZ                                                                                (sgd.) RAMONCITO Z. ABAD

Solicitor General                                                                                                         President

IBP # 289417 – 2-6-90

Attested by:

(sgd) MARIANO M. MARTINEZ                                                                                (sgd) ARIEL F. AGUIRRE

Assistant
Solicitor General                                                                                        Government
Corporate

IBP
# 200230 – 6-30-86                                                                                                        Counsel

IBP # 251278 – 8-5-88

(sgd) ENRIQUE M. REYES                                                                                     (sgd) VIRGILIO C. ABEJO

Solicitor                                                                                                  Deputy
Government Corporate

IBP # 267128 3-2-89                                                                                                          Counsel

134
Amorsolo St. Legaspi                                                                                            IBP
# 249710 – 3-22-88

Village, Makati M.M.                                                                                               Office
of the Government

Corporate Counsel

Government
Corporate Counsel

Centre

1203 A. Mabini Cor. Arquiza

Street, Ermita, Manila

FEDERATION OF
PARAÑAQUE

HOMEOWNERS
ASSOCIATION

Respondent

By:

(sgd)
CEFERINO P. PADUA

Counsel

(sgd)
AMELITO MUTUC

Respondent &
Counsel in

his behalf

TOLL REGULATORY BOARD

By:

(sgd)
JOSE VALDECAÑAS

Chairman”^[4]

On February 26, 1990,
Atty. P. M. Castillo filed a petition for intervention alleging that his real,
actual, bona fide and unpaid contingent claim for attorney’s fees is equivalent
to 35% of the judgment rendered on May 7, 1986 in Civil Case No. 43049 entitled
“PCIB vs. TFC, et al;” that the said judgment was unilaterally
settled out of court by his clients without his knowledge, intervention and
consent and without any provision for attorney’s fees; that he is the
joint account nominee appointed by the Honorable Judge Jesus F. Guerrero in his
order dated August 14, 1987 over the daily collections from the contested
portion of the North and South Expressways which were directly involved in
Civil Case No. 16699 entitled “Republic of the Philippines vs. PNCC”,
and which were enjoined to be deposited in the trust fund to be kept and
maintained by the PNB, Paseo de Roxas
Branch subject to certain terms and conditions specified in said order of the
court; that the daily collections under deposit with said bank is in the amount
of P60,355,290.06 as of June 21, 1989, while the unaccounted collections of the
contested portions of the North and South Expressways which are not reflected
in the trust funds is estimated to be P300 Million more or less; that the said
missing funds were allegedly spent by PNCC officials for bloated salaries,
bonuses, car plans, travel abroad and other questionable expenditures for
construction and improvements of the expressway; that the officials of the PNCC
and PNB-Paseo de Roxas
Branch fraudulently pegged the interest rate of the trust funds at the rate of
an ordinary savings bank deposit which precipitated the intervenors
to file a case for Anti-Graft and Corrupt Practices with the Ombudsman- OMB
Case No. 0-89-0733 entitled “Atty. P.M. Castillo vs. Edgardo Espiritu,
et al.;” that the said officials of the PNCC and PNB avoided the accounting and the turn over of the amount of P300M
which they fraudulently misused and maliciously misappropriated by not depositing
the same with the trust funds with the PNB; that he exercised his right to a
retaining lien over the aforesaid funds of the PNCC with the PNB Paseo de Roxas Branch by issuing
said notice in accordance with Section 37 of Rule 138 of the Rules of Court;
that his intervention to take his unpaid contingent claim is sanctioned by the
doctrine in the Quasha Asperilla
Ancheta Valmonte Peña & Marcos vs. Juan case;^[5]
that the compromise agreement may frustrate criminal prosecution of certain
officials of the PNCC and PNB, defeat the lawful processes and orders of the
court and the unpaid contingent claim of attorneys fees of intervenor.  While intervenor-claimant
has no objection to the approval of the compromise agreement, he asked that it
should not he incompatible and derogatory to his notice of retaining lien.

On March 1, 1990, an opposition to the motion for judgment based
on the compromise agreement was filed by respondent Gaite
alleging that the said compromise agreement is illegal and unconstitutional;
and that the subject matter of the compromise agreement are existing roads
(highways) and trust funds; that the parties in the compromise agreement acted
in bad faith in deliberately excluding him.

An opposition to the petition for intervention was filed by the
petitioner on March 19, 1990 to which a reply was filed by intervenor-claimant.  A rejoinder was likewise filed by the
petitioner to the reply of the intervenor-claimant.

On March 5, 1990, the Court required the parties to comment on
the petition for intervention and the opposition to the motion for judgment
based on the compromise agreement.

Private respondents filed a consolidated comment on the
intervention asking that the latter be denied, as well as a reply to the
opposition to the motion for judgment based on the compromise agreement.

On March 4, 1990, petitioner also filed its consolidated comment
while respondent Republic of the Philippines likewise filed its consolidated
comment on June 15, 1990.

In turn intervenor-claimant filed his
consolidated reply on June 27, 1990.

After a careful examination of the records of the case, the Court
finds and so holds that the petition for intervention filed by Atty. P. M.
Castillo should be as it is hereby denied.

Section 2 (a), Rule 12 of the Rules of Court provides as follows:

 “SEC.2.  Intervention.- A person, may before or
during a trial be permitted by the court, in its discretion, to intervene in an
action, if he has legal interest in the matter in litigation, or in the success
of either of the parties, or an interest against both, or when he is so
situated as to be adversely affected by a distribution or other disposition of
property in the custody of the court or of an officer thereof.

(a) Motion for intervention.- A person desiring to intervene shall
file a motion for leave of court with notice upon all the parties to the
action.”

From the foregoing, it is clear that before a person may
intervene in any proceeding, he should first file a motion for leave of court
with notice upon all the parties to the action.  In this case intervenor-claimant
without so much as asking for the leave of court, immediately filed the
petition for intervention.  He did not
even pray for leave of court to file said petition.

No doubt as the intervention was unauthorized and without leave of court, the same should be stricken
from the records.

Moreover, the question of allowing
an intervention is addressed to the sound discretion of the court by
considering whether or not the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties and whether or not the intervenor’s rights may
be fully protected in a separate proceeding.^[6]

A compromise agreement had been duly executed by all the parties
in this case.  Intervenor-claimant
now proposes to unduly delay or prejudice the adjudication of the rights of the
original parties to this case by his intervention.

He claims to be entitled to attorney’s fees out of the trust fund of the PNCC on
deposit with the PNB Paseo de Roxas
Branch and head office.  What the records
show is that he is not seeking to collect attorney’s fees in this
instance.  What he is claiming are his
fees as joint account nominee appointed by Judge Guerrero in an order dated
August 14, 1987 over the daily collections from the contested portions of the
North and South Expressways which were involved in Civil Case No. 16699
entitled “Republic of the Philippines vs. PNCC”, and which
collections were deposited as trust funds in the PNB-Paseo
de Roxas branch. 
Thus he cannot justify his claim
for attorney’s lien under Section 37, Rule 138 of the Rules of Court
with provides:

“SEC. 37.  Attorneys’ liens. -An attorney shall have a lien upon the funds, documents and papers of his client
which have lawfully come into his possession and may retain the same until his lawful fees and
disbursements have been paid, and may apply such funds to the
satisfaction thereof.  He shall also have
a lien to the same extent upon all judgments for the payment
of money, and executions issued
in pursuance of such judgments, which he secured in a litigation of his client, from and after the time when he shall
have caused a statement of his claim of such lien to be entered upon the
records of the court rendering such judgment,
or issuing such execution, and shall
have caused written notice
thereof to be delivered to his client and to the adverse party; and he shall
have the same right and power over such judgments and executions as his client would
have to enforce his lien and secure the payment of his just fees and
disbursements.”

He
is not the counsel for any of
the parties in this case.  None of the
toll collections came into his possession by virtue of an attorney-client
relationship.

Indeed, Atty. Castillo
has no legal interest in this litigation or in the success of
either of the parties or an interest against or both and he is not so situated
as to be adversely affected by the compromise agreement.^[7] Whatever award for at attorney’s fees he may
have obtained under Civil Case
No. 43049 entitled “PCIB vs.
TFC, et al.” before Branch 160 of the
Regional Trial Court in Pasig has no bearing on this
case which originated from Civil Case No. 16699 of the Regional Trial Court in Makati.

Furthermore, the alleged
claim for attorney’s fees of intervenor-claimant
is still pending resolution in Civil Case No.
43049.  And even before a decision on the
matter can be had, intervenor-claimant filed another
case entitled “P. M. Castillo vs. Mabanta, et
al.” docketed as Civil Case No. 56637 raffled to Branch 165, of the
Regional Trial Court in Pasig, for the same
purpose.  He also filed a complaint for
alleged violation of the Anti-Graft and Corrupt Practices Act before the Office
of the Ombudsman against high officials of the PNCC and the PNB.  He served on the PNB a notice of retaining
lien.

Clearly, the rights of intervenor-claimant,
if any, are adequately protected in the aforestated
proceedings.  His intervention in this
case should, therefore, be denied.

Now to the opposition of respondent Gaite.  Contrary to his claim that the said
compromise agreement amends, alters or
modifies the franchise of the Construction and Development Corporation of the
Philippines (now PNCC) under Presidential Decree No. 1113 and that only Congress
has the power to do so, the Court finds that the said compromise agreement
merely limits the use of the maintenance fees to be collected from motorists
using the contested portions of the expressways and the trust funds deposited
in the PNB pursuant to the order of Judge Guerrero dated May 28, 1987 in Civil
Case No. 16699.

Section 1, P.D. 1113,
provides:

Section 1.  Any
provision of law to the contrary notwithstanding, there is hereby granted to
the Construction and Development Corporation of the Philippines (CDCP), a
corporation duly organized and registered under the laws of the Philppines, hereinafter called the GRANTEE, for a period of
thirty (30) years from May 1, 1977 the right, privilege and authority to
construct, operate and maintain toll facilities covering the expressways from Balintawak (Station 9 + 583) to Carmen, Rosales, Pangasinan and from Nichols, Pasay
City (Station 10 + 540) to Lucena, Quezon, hereinafter
referred to collectively as North Luzon Expressway and South Luzon Expressway,
respectively.

The franchise herein granted shall include the right to collect
toll fees at such rates as may be fixed and/or authorized by the Toll
Regulatory Board hereinafter referred to as the Board created under
Presidential Decree No. 1112 for the use of the expressways
above-mentioned”.

From the foregoing, PNCC
is granted the following:

a) For a period of
thirty (30) years
from May 1, 1977, the right, privilege and authority to construct,
operate and maintain toll facilities covering the expressways from Balintawak to Carmen, Rosales, Pangasinan
and from Nichols, Pasay City to Lucena,
Quezon; and

b) The right to collect toll fees for the use of the expressways
aforementioned.

A careful examination of
the aforesaid compromise agreement shows that it does not in any way alter,
modify or amend, much less repeal the franchise of PNCC under P.D. No.
1113.  Its terms and conditions implement
the rights of PNCC under the said decree.

Moreover, any doubts
raised by private respondent Gaite have been settled under
Section 3 of the said decree, viz:

“Section 3.  This franchise is granted subject to such
conditions as may be imposed by the Board in an appropriate contract to be
executed for this purpose, and with understanding and upon the
condition that it shall be subject to amendment, alteration or repeal when
public interest so requires.” (Emphasis supplied)

The further stipulation
in the compromise agreement vesting in the DPWH the supervision, approval and
control of the construction of additional facilities, operation and maintenance
of the questioned segments of the expressways, which stipulation bears the
approval of the Toll Regulatory Board through Chairman Jose Valdecañas,
is in full accord with P.D. No. 1113.

The claim of private
respondent Gaite that the compromise agreement
condones the PNCC although it violated its franchise is belied by its terms and
conditions.  As a matter of fact, the
compromise agreement imposed restrictions upon the PNCC.   Thus, it is stipulated?

“a. Effective April 1, 1990, PNCC
shall operate the questioned segments of the North Luzon Tollways
(Balintawak to Tabang) and
the South Luzon Tollways (Nichols to Alabang), under the following charges for Class
“1” vehicles, the collections of which PNCC shall devote and utilize exclusively for the maintenance and
unkeep of said segments, to wit:

b.  The construction of additional facilities,
operation and maintenance of the questioned portions of the North and South
Expressways by the NPCC shall be under the supervision, approval and control of the Department of Public
Works and Highways through the Toll Regulatory Board in coordination with the PNCC.

c.  Upon approval of the compromise agreement by
the court, PNCC shall be allowed to withdraw/encash
and to receive the proceeds of the special time deposit with the Philippine
National Bank, including the earnings and/or interest thereon, as well as all
moneys deposited by PNCC under escrow pursuant to the May 28, 1987 Order of the
Regional Trial Court Metro Manila, provided, that said funds shall be used exclusively for the
installation of (i) tollways
lights equivalent to daytime lighting at the interchange and along the
center of the Nichols-Alabang and Balintawak
Tabang expressways, pursuant to internationally
accepted expressway lighting standard and

(ii) emergency call boxes every two kilometers throughout
the length of the aforementioned segments at the average of one (1) callbox per
two (2) kilometers and that PNCC shall complete the installations of (i) and (ii) within a non-extendible period of nine (9)
months from approval by this Honorable
Court of this agreement.

x         x         x        
x         x         x

i.
Should PNCC fail to comply with any of its commitments under this Compromise
Agreement set forth in paragraph 2 (c) hereof, the Court of Appeals Decision dated August 4, 1989 in
CA-G.R. SP No.13235, entitled “Republic of the Philippines versus Hon. Jesus Guerrero, RTC Br.
148, Makati, Metro Manila, and Philippine National Construction Corporation (PNCC) formerly CDCP; Federation of Parañaque Homeowners’ Association and-Ceferino
P. Padua, Intervenors; Amelito
Mutuc, Intervenor, Fernando
A. Gaite, Intervenor”
shall become immediately final and executory.  This sanction becomes without force and
effect upon PNCC’s compliance with such commitments
except its other commitments under this Agreement and the maintenance of the
questioned portions of the expressways which PNCC shall continue pursuant to
paragraph 2 (b) hereof.

x        x         x         x        
x

j. The parties hereby undertake to
discharge their commitments hereunder in utmost good faith and
diligence, and shall not do any act that would render nugatory the terms and
conditions of this agreement.” (Emphasis supplied).

The PNCC is authorized to
collect the maintenance fees in reduced amount. 
It shall no longer exercise supervision and control of the construction of additional facilities, as well as the operation of subject portion
of the expressways which is transferred to the DPWH through the Toll Regulatory
Board, in coordination with the PNCC.

The maintenance fees to
be collected from the motorists using the questioned portions of the expressway
does not require public hearings before the Toll Regulatory Board pursuant to
Section 3(d) of Presidential Decree No. 1112 creating the Toll Regulatory
Board, to wit:

Sec. 3. 
Powers and Duties of the Board. 
The Board shall have in addition to its general powers of administration
the following powers and duties:

x_      x          x          x

d. Issue, modify and
promulgate from time to time the rates of toll that will be charged the direct
users of toll facilities and upon notice and hearing, to approve or disapprove
petitions for the increase thereof. 
Decisions of the Board on petitions for the increase of toll rate shall
be appealable to the Office of the President within
ten (10) days from the promulgation thereof. 
Such appeal shall not suspend the imposition of the new rates, provided
however, that pending the resolution of the appeal, the petition for increased
rates in such case shall deposit in a trust fund such amounts as may be
necessary to reimburse toll payers affected in case of a reversal of the decision.  (Underscoring for emphasis)”

A public hearing is
mandatory only in cases of petitions for increases in toll rates the purpose of
which is to give users of the expressway who will be adversely affected an
opportunity to contest the validity of such an increase.  Indeed, no affected toll payer shall be
prejudiced where the collectible rates were reduced as in this case.

As to the contention that
the North and South Luzon expressways cannot be the subject of the compromise
agreement because they are properties of public dominion, suffice it to say
that the agreement does not cover the expressways but refers only to the
collection of maintenance fees thereon and the supervision, approval and
control by the DPWH of the constructed additional facilities on, and operation
and maintenance of, the questioned portions of the expressways.

The funds deposited in the PNB are held in escrow.  It is impossible to identify the affected
toll payers to whom reimbursement should be made.  Thus, under the compromise agreement, it will
be used for – (a) tollways lights equivalent to
daylight lighting at the interchange and along the center of the Nichols-Alabang and Balintawak-Tabang
segments of the expressways, pursuant to internationally accepted expressways light standards; (b)
emergency call boxes every two (2) kilometers throughout the length of the
aforementioned segments at the average of one (1) callbox per two (2)
kilometers.  Clearly then, the money in
escrow will be disposed of for the benefit of the users of the affected
portions of the expressways.

Finally, the claim of respondent Gaite
that the parties to the compromise agreement acted in bad faith in its
execution inasmuch as he had no notice thereof is without basis.  He attended one of the numerous meetings scheduled
by the parties and in one meeting he manifested that he was against the
compromise agreement.  Henceforth, he did
not attend the scheduled meetings.

Indeed, in the meeting he attended, some of his suggestions were accepted
by the lawyers of the parties.  He was
given due notice and an opportunity to be heard.  He has not shown that the compromise
agreement was prejudicial to his rights.

WHEREFORE, in as much as the compromise agreement of the
parties dated February 15, 1990 is not contrary to law, morals, public order,
good customs or public policy, the same is hereby APPROVED and the parties are
hereby enjoined to faithfully comply with the terms and conditions of the same.

SO ORDERED.

Narvasa, (Chairman), Cruz, Griño-Aquino, and Medialdea, JJ., concur.

---

^[1]
Page 48, Rollo.

^[2]
Justice Floreliana C. Bartolome
was the ponente, concurred in by Justices
Ricardo L. Pronove, Jr. and Bonifacio
A. Cacdac, Jr.

^[3]
Pages 8 to 9, Rollo.

^[4]
Pages 176 to 182, Rollo.

^[5]
118 SCRA 505 (1982).

^[6]
Section 2 (b), Rule 12, Rules of Court.

^[7]
Section 2, Rule 12, Rules of Court.