REPUBLIC VS. PLDT
Facts:
The plaintiff Republic of the Philippines is a political entity exercising
government powers through one of its branches, the
Bureau of Telecommunication. Herein defendant, PLDT is a public service corporation
holding a franchise to install operates and maintains a telephone system.
After its creation, the BOT set up its own government telephone system by
utilizing its own appropriations and other equipment and by renting trunk lines of the PLDT
to enable the govt offices to call privately. BOT entered into an
agreement with the RCA communications for joint overseas telephone service
whereby BOT would convey overseas calls received by RCA to local residents. PLDT complained
to the BOT that it was a violation of the condition of their agreement since the BOT had used
trunk lines only for the use of government offices but even to serve private persons or the
general public in competition with the business of PLDT. Subsequently, the plaintiff commenced suit
against PLDT asking the court judgment be rendered ordering the PLDT to execute a contract with
the plaintiff, through the BOT for the use of the facilities of PLDT's telephone system
throughout the country under such conditions as the court may consider reasonable. The CFI
rendered judgment stating that it could not compel PLDT to enter into such agreement. Hence this petition.
Issue: Whether or Not PLDT may be compelled to enter into
such agreement.
Held:
Yes, the state may, in the interest of national welfare, transfer
utilities to public ownership upon payment of just compensation, there is no
reason why the state ma not require a public utility to render services in the
general interest provided just compensation is paid.