Manila Electric Company v. Public Service Commission
REITERATIONFacts
The Antecedents: Pedro J. Velasco filed a complaint with the Public Service Commission (PSC) against Manila Electric Company (Meralco) for alleged violation of Meralco's franchise and the Public Service Act. The specific charge was the construction of an electric sub-station at the corner of South 6 and South D Streets in Quezon City without prior approval from the PSC. Procedural History: The PSC found Meralco guilty of the violation and imposed a fine of P200.00. Velasco appealed to the Supreme Court (G.R. No. L-14035), arguing the fine was insufficient. Meralco also appealed (G.R. No. L-13992), contending there was no violation and that, if any, it had prescribed. Initially, the Supreme Court decided Velasco's appeal without Meralco's brief, stating Meralco did not appeal. However, upon notice of Meralco's pending appeal, the Court suspended its earlier decision and agreed to decide both appeals together. The Appeal: Meralco appealed the PSC's decision, arguing that Republic Act No. 150, enacted on June 14, 1947, authorized it to construct electric substations without needing prior PSC approval. Meralco also contended that the structure in question was merely an assemblage of transformers, not a substation requiring permission. Finally, Meralco raised the defense of prescription.
Issue(s)
Whether the construction of an electric sub-station by Meralco without prior approval from the Public Service Commission constituted a violation of its franchise and the Public Service Act. Whether Republic Act No. 150 exempted Meralco from the requirement of obtaining prior PSC approval for the construction of electric substations. Whether the structure in question could be classified as a substation requiring PSC approval. Whether the alleged violation had prescribed.
Ruling
The Supreme Court affirmed the Public Service Commission's finding that Manila Electric Company was guilty of violating the Public Service Act. The Court modified the penalty imposed, increasing the fine to P1,000.00. The earlier decision of May 31, 1960, was superseded, and the suspension by resolution of June 22, 1960, was lifted.
Ratio Decidendi
On the issue of violation and the necessity of PSC approval: The Court affirmed the PSC's finding that Meralco violated Section 20(b) of the Public Service Act (Commonwealth Act No. 146, as amended) by constructing an electric sub-station without prior approval. The PSC correctly held that Republic Act No. 150 did not repeal Section 20(b) of the Public Service Act, which requires such approval for new installations. Republic Act No. 150 grants authority to construct, but this must be exercised in accordance with existing regulatory laws. The PSC's function is to ensure that additions to a utility's system are necessary and do not lead to unreasonable rates for consumers. The Court found no sufficient data to overrule the PSC's factual and technical determination that the structure was indeed a substation. On the applicability of Republic Act No. 150: The Court agreed with the PSC that Republic Act No. 150 did not grant Meralco indiscriminate authority to construct additions to its system without PSC approval. The PSC's interpretation that the authority granted by Republic Act No. 150 was subject to the existing requirements of Commonwealth Act No. 146 was upheld. Furthermore, the Court noted that even if Republic Act No. 150 provided a five-year period for such construction, the construction in question occurred after the expiration of this period, rendering the argument moot. On the classification of the structure as a substation: The Court deferred to the PSC's determination that the structure, described as a 10,000/12,500 KVA unit incorporating buses and circuit breakers, was a substation. The PSC's reasoning, based on the size, complexity, and investment involved, which could affect rates and safety, was found to be sound. The Court also pointed out that Meralco itself had referred to similar structures as "new sub-stations" in a prior petition, undermining its current contention. On the defense of prescription: The Court ruled that the construction of the sub-station, if it constituted an offense, was a continuing offense. Therefore, the defense of prescription, which requires a specific period to lapse from the commission of the offense, could not be invoked. As long as the sub-station remained standing, the offense continued.
Main Doctrine
The Court affirmed that public utilities, like Manila Electric Company (Meralco), are required to obtain prior approval from the Public Service Commission (PSC) before making new installations or additions to their service, as mandated by Section 20(b) of the Public Service Act (Commonwealth Act No. 146, as amended). This requirement is not repealed by subsequent statutes, such as Republic Act No. 150, which grants general authority for construction, unless such repeal is explicit. The Court also held that the construction of a substation without the necessary permit constitutes a continuing offense, meaning the defense of prescription does not apply.