Public Utility and Service in view of the Transpotation Law in The Philippines

(a) What is a public utility?

            A public utility is 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.  Apart from statutes which define the public utilities that are within the purview of such statutes, it would be difficult to construct a definition of a public utility which would fit every conceivable case.  As its name indicates, however, the term public utility implies a public use and service to the public. (Am. Jur. 2d V. 64, p.549.) (Albano vs Reyes)

(b) What is a public service?

            The Public Service Act (CA No. 146 as amended) provides that the term public service "includes 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 whatever may be its classification, freight or carrier service or any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers and freight or both, shipyard, marine repairshop, [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..." [Sec. 13(b)] (Albano vs Reyes)

Albano vs Reyes 175 SCRA 264

Fact:         On 20 April 1987, the Phil. Ports Authority (PPA) adopted a resolution directing mgmt. to prepare the Invitation to Bid and all relevant bidding documents necessary for the public bidding of the development, mgmt., and operation of the Manila Intl. Container Terminal  (MICT) and authorized the Board Chairman Secretary Reyes to oversee and implement the project.

                Secretary Reyes created a 7-man MICT Bidding Committee to evaluate all bids and recommend to the Board the best bid.  The PPA published the Invitation to Bid with the reservation that it had the right to reject any bid and to accept such bid it may deem advantageous to the govt.

                Seven companies submitted bids.  The Committee recommended that the contract be awarded to Intl. Container Terminal Services (ICTSI) on the ground that it offered the best technical and financial proposal.  Secretary Reyes awarded the contract to ICTSI.  Before the contract could be signed, two cases were filed questioning the legality or regularity of the bidding.  The first was a special action for prohibition with prelim injunction filed by Alo, a concerned taxpayer. The second was a civil case for prohibition with prayer for TRO filed by Sharp Co. which actively participated in the bidding.

                The President approved the proposed MICT contract. The PPA and ICTFSI perfected the contract.  Rodolfo Albano, a member of the House of Representatives filed the present case assailing the award of the contract on the ground that since the MICT is a public utility, it needs a legislative franchise before it can legally operate as a public utility.

Issue : Wether or not a legislative franchise is necessary.

Held : NO. Petition dismissed.

            A franchise specially granted by Congress is not necessary for the operation of the MICT by a private entity. A contract entered into by the PPA and such entity is substantial compliance with the law. 1. Executive Order No. 30 authorized the PPA to take over, manage and operate the MICT in accordance with PD 857 (Revised Charter of the PPA).  PD 857 expressly empowers the PPA to provide services within Port Districts "whether on its own, by contract or otherwise."  Therefore, under EO 30 and PD 857, the PPA may contract with ICTSI for the mgmt., operation and devt. of the MICT.

2. Even if the MICT be considered a public utility or a public service on the theory that it is a wharf or a dock as contemplated by the Public Service Act, its operation would not necessarily call for a legislative franchise.  Legislative franchises are not required before each and every public utility may operate.  The law has granted certain administrative agencies the power to grant licenses for or to  authorize the operation of certain public utilities. 

            That the Consti provides that the issuance of a franchise for the operation of a public utility shall be subject to amendment, alteration or repeal by Congress does not necessarily imply that only Congress has the power to grant such authorization.  There are several laws granting specified agencies in the Executive Dept. the power to issue such authorization for certain classes of public utilities. [ 1. LTFRB wrt Certificates of Public Convenience authorizing the operation of public land transportation services provided by motorized vehicles; 2. ERB wrt operation of electric power utilities and services except electric coops]

            Reading EO 30 and PD 857 together, the PPA has been empowered to undertake by itself or to authorize the operation and mgmt. of the MICT by another by contract.  The latter power having been delegated to the PPA, a legislative franchise is no longer necessary.  In this case, the PPA's contracting with ICTSI is wholly within its jurisdiction and powers.

3. The award of the contract to ICTSI is all the authorization that is necessary. The award made by the PPA and the President enjoys the presumption of validity and regularity of official action.  There is no evidence to the contrary.

4. Albano has standing to assail the contract.  While the expenditure of public funds may not be involved under the contract, public interest is definitely involved considering the important role of the MICP in the economic devt. of the country and the magnitude of the amount involved.  He has sufficient standing since a public right (disclosure provision) is sought to be enforced.

5. There in no conflict among the 3 branches of govt.  The Executive Dept. has not contravened an act of Congress.  There is no usurpation of powers of another branch.

6.  The determination of the winning bid should be left to the sound judgment of the PPA. It is in the best position to evaluate the bids.  It has the technical expertise which neither the Court nor Congress has. No abuse of discretion has been shown.

Legal Ethics Case Digest (second part)

Second Case:

Elmer Canoy, complainant  v. Atty. Jose Max Ortiz, respondent

A.C. No. 5485 March 16, 2005

Facts

This is a case wherein complainant Elmer Canoy accused his former counsel, Atty. Jose Max Ortiz of misconduct and malpractice. In 1998, Canoy filed a complaint for illegal dismissal against his former employer, Coca Cola Bottlers Philippines, and was represented in said case by Atty. Ortiz. Canoy, explained Ortiz, was one of his indigent clients, in that it was the latter’s practice since commencing his practice of law to cater to indigent and law-income clients. In the labor case against CCBP filed with the National Labor Relations Commission, the labor arbiter ordered the parties to submit their respective petition papers. Canoy submitted all the necessary documents and records to Atty. Ortiz for the preparation of the position paper. Canoy made several follow-ups with the office of his attorney, said visits were unfruitful until it came to his knowledge on 2000, upon inquiring with the NLRC itself, that his complaint was already dismissed way back in 1998 for failure to prosecute because the parties did not submit their position papers. Atty. Canoy further claimed that Atty. Ortiz never informed him about the status of his case nor of the fact that he failed to submit the position paper.

In his Comment, Atty. Ortiz admitted to not being able to submit the position paper because the period within which to file it lapsed already, with arbiter already dismissing the case, but reasoned out that his election as a Councilor of Bacolod City made him very preoccupied with his functions. His duties as a public servant and a lawyer are “beyond physical limitation”, said Atty. Ortiz, so he had to withdraw from his other cases. He also claimed of not being able to remember whether he immediately informed Canoy of the dismissal of the case, but recalled of Canoy conveying that he already has a lawyer to handle the case. Hence, his office did not insist on refiling the case. Atty Ortiz also pointed out that the dismissal of Canoy’s complaint was without prejudice.

Issue

Whether or not Atty. Ortiz is guilty of misconduct and malpractice

Ruling

Upon investigation of the case, the Integrated Bar of the Philippines concluded that clearly “Atty. Ortiz failed to exercise the degree of competence and diligence required of him in prosecuting his client” and recommended that Atty. Ortiz be reprimanded. The Supreme Court, however, finds the recommended penalty of the IBP too lenent and instead suspended Atty. Ortize from the practice of law for one month, in lieu of the admonition or reprimand. According to the Court, Atty Ortiz several canons and rules in the Code of Professional Responsibility. Specifically, Atty. Ortiz was guilty of violating Rule 18.03 of the Code, which states, “A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable,” on account of his failure to file the position paper on time, tantamount to neglecting a legal mater entrusted to him. That the case was dismissed without prejudice does not mitigate his liability. Further, Ortiz also violated Rule 22.02, which states,“A laywer shall withdraw his services only for good cause and upon notice appropriate in the circumstances.” Therefore, even if Atty. Ortiz was justified in terminating his services due to his elective position, he should have coordinated with the new council of Canoy and turned over to the latter all papers and property which the Client is entitled and should have cooperated with his successor in the orderly transfer of the matter, as per Rule 22.02.

Legal Ethics Case Digest (first part)

"Legal Ethics is the branch of moral science which treats of the duties which an attorney owes to the court, to his client, to his colleagues in the professin and to the public.

Legal Ethics will guard agaisnt the abuses and ills of the profession such as dishonesty, deceit, immorality, negligence, slothness, lack of diligence and the many forms of malpractice of the members of the bar.

On the positive side, it will raise the standard of the legal profession, encourage and enhance the respect for the law, assure an effective and efficient administration of justice, assist in the keeping and maintenance of law and order in coordination with the other departments of government.

It also provides the basis for weeding out the unfit and misfits in the legal profession for the protection of the public".

Let me now share to you some of my case digest.

First Case:

Marcial Abiero, complainant v. Atty. Bernardo G. Juanino, respondent

A.C. No. 5302, February 18, 2005

Facts

Complainant Marcial Abrero engaged the services of respondent as counsel de parte in NLRC NCR OCW case. The Labor Arbiter ruled in favor of the complainant but the National Labor Relations Commission reversed the arbiter’s decision on appeal, dismissing the case for lack of merit. The respondent filed with the Court of Appeals a motion for extension of time to file a petition for review and paid the docket fee, but it was soon discovered by the complainant that the Petition for Review was never filed by the respondent and that the NLRC decision became final and executory. This prompted herein complainant to file this administrative case against respondent, charging the latter with negligence in connection with a legal matter entrusted to him.

In his Comment, Atty. Juanino explained, among others, that there was indeed error on his (respondent’s) oart when instead of filing a Petition for Cetiorari as originally intended, he chose to pursue another course of action which is the filing of a Motion for Execution to enforce the Labor Arbiter’s decision against the other respondents who did not appeal said decision. He, however, pleads good faith and that he tried his best to win the complainant’s labor. Still, herein complainant asserted that the respondent made several promises regarding the status of the Petition for Review but nothing came out of said promises.

The Commission on Bar Discipline of the Integrated Bar of the Philippines held that the respondent, due to his failure to file the petition for review, breached Canons 17 and 18 of the Code of Professional Responsibility, and recommended that respondent be suspended from the practice of law for a period of six months. It was held that there was no sufficient justification for respondent’s failure to file the petition for review with the Court of Appeals and the fact that se was seeking another legal remedy did not justify his failure to file the petition within the prescribed period. His failure to comply with his legal duty as counsel caused damage and prejudice to his client.

Issue

Whether or not respondent violated Canons 17 and 18 of the Code of Professional Responsibility

Ruling

The Supreme Court agreed with the findings of the IBP Investigating Commissioner, explaining that the failure to appeal to the Court of Appeals despite instructions by the client to do so constitutes negligence on the part of the counsel. The respondent did not serve his client with diligence and competence in that he neglected a legal matter entrusted to him by his client, and for such inexcusable negligence, he is liable for violations of Canons 17 and 18 of the Code of Professional Responsibility. Moreover, his failure to maintain an open line of communication with his client was also in direct contravention with Rule 18.04 of the Code, which requires a lawyer to keep his client informed of the status of his case and respond within reasonable time to the client’s request for information.