[ G. R. No. 19829. November 28, 1922 ] 44 Phil. 111
[ G. R. No. 19829. November 28, 1922 ]
MADRIGAL Y COMPANIA ET AL., PLAINTIFFS, VS. THE HONORABLE MARIANO CUI, AS PUBLIC UTILITY COMMISSIONER, AND THE BOARD CONSTITUTED UNDER SECTION 30 OF ACT NO. 2307, AS AMENDED, DEFENDANTS. D E C I S I O N
STATEMENT
The plaintiffs are shipowners engaged in the transportation of freight and passengers in the coastwise trade of the Philippine Islands. The defendant is the duly appointed, qualified and acting Public Utility Commissioner of the Philippine Islands.
March 16, 1922, the plaintiffs entered into an agreement with the Attorney-General of the Philippine Islands as to the rates which the plaintiffs should charge and receive for freight and passengers to and including October 31, 1922, and it was filed as a part of the record in case No. 268Q then pending before the Board of Public Utility Commissioner, and is as follows;
“It is hereby agreed between the shipowners, the petitioners herein, and the Attorney-General, in representation of the Government, no other opponent having appeared, that from the 16th day of March, 1922 to the 31st day of October, 1922, the freight rates for first class boats, according to the classification adopted by the Shipowners’ Association, shall be those prescribed by Order No, 16 of the then Board of Rate Regulations, as amended, plus an increase of 75 per cent; that the freight rates for second class boats shall be those prescribed in said Order No, 16, as amended, plus an increase of 100 per cent; that the freight rates for third class boats shall be those prescribed in the aforesaid Order No. 16, as amended, plus an increase of 125 per cent; Provided that first class boats shall be those which have a capacity of 401 tons, net, or more; those of second class, those which have a capacity of more than 150 tons, net, and less than 401 tons, net, and those of third class, those which have a capacity of 50 tons, net, up to 150 tons, net. It is to be understood that the Attorney-General and the shipowners have entered into this agreement with a view to try the proposed decrease, and to this end the shipowners bind themselves to present on or before the 15th of October following the operating accounts corresponding -to the six months covering the period above fixed which they shall finish on the 30th day of September, 1922, in order to show the result of these new rates. And that this agreement shall be applicable to all the petitions pending in this Commission, relative to the continuation of the increases previously authorized, in which are interested shipowners who are members of the Shipowners’ Association of the Philippines.”
Pursuant to which, and with the approval of the Commissioner, the agreed schedule of rates has at all times since been in force and effect, except as hereinafter stated.
October 18, 1922, all of the plaintiffs, except one, filed with the Commissioner a written notice that it was their intention to continue such rates in force and effect “until such time as the modification thereof may be shown to be necessary in accordance with the law.” Prior to the filing of the notice, each of the plaintiffs filed sworn statements of the operating expense of their respective vessels between April 1st and September 30, 1922, a summary of which was submitted to the Commissioner, with the notice of the intention of plaintiffs “to continue in force their existing rates,” a copy of the notice marked Exhibit A, and a copy of the operating expenses, marked Exhibit B, are attached to, and made a part of, the petition. Upon the filing of such papers with the Public Utility Commissioner, they were numbered and treated as case No. 2995, and an order was made citing any and all interested persons to appear before the Commissioner at his office on October 27, 1922, at 3 p. m., and then and there file objections and submit any pertinent evidence, and due publication of the notice was ordered.
October 24, 1922, the plaintiff, Irineo Facundo, filed a separate statement of the operating expenses of his steamer Tamaraw, which is marked Exhibit C. October 26, 1922, the Attorney-General appeared and objected to the granting and continuance of the order as prayed for by the plaintiff, and at the hearing on the 28th of October, 1922, on behalf of the Government, requested the Commissioner to make an order directing that on or after November 1, 1922, the plaintiffs “be required and commanded to desist and refrain from collecting or receiving for the transportation of freight and passengers rates in excess of those established in the year 1912 by Order No. 16 of the former Board of Rate Regulations.” Plaintiffs opposed the motion upon the ground that “no authority is vested by existing law in the Public Utility Commissioner to reduce any existing rate until after a hearing has been had and evidence adduced upon which the Commissioner may base his findings of fact as to the necessity of such reduction or diminution of the existing rate and further contended that in the absence of such hearing the respondent Commissioner was without jurisdiction to make the order prayed for by the Attorney- General.”
Notwithstanding such objection, the Commissioner made an order dated October 30, 1922, a copy of which is attached to the petition. Plaintiffs at once appealed from the order to the Board of Review, which denied the appeal and confirmed the order. Alleging all of such material facts, the plaintiffs filed the petition herein which they allege that it appears from plaintiffs’ Exhibits B and C that the order is confiscatory, and that the present revenues are not sufficient to meet operating expenses; that they have no plain, speedy and adequate remedy, and that, through compliance with the order, they will suffer irreparable injury; that the rates established in the order are unfairly low, “and if proper rates are thereafter established, plaintiffs will have no means whatever of collecting from the persons transported or from the owners of merchandise transported as cargo the difference between such proper rate and the confiscatory rate established by the said order of 30th day of October, 1922.”
Wherefore, they pray for an order of this court enjoining and restraining the Commissioner and all parties in interest from enforcing or attempting to enforce the order of October 30, 1922, and from the making of any reduction in plaintiffs’ established rates until a full and complete hearing has been had and the evidence submitted, and that the order be declared null and void, and that it was made in excess of jurisdiction.
Based upon the plaintiffs’ verified petition for a writ of certiorari and a preliminary injunction, and pending a hearing, it was ordered that the defendants and their agents and employees “are hereby restrained and enjoined from enforcing and attempting to enforce the order of October 30, 1922, in case No. 2995 of the Public Utility Commissioner.” The defendants appeared and filed a motion to dissolve the injunction, which was overruled, and by an order of this court of November 8, 1922, they were required to appear within five days and show cause why the order of October 30, 1922, should not be declared null and void without prejudice to the hearing pending before the Public Utility Commissioner. The defendants did not file a demurrer to the petition. Neither did they file a formal answer. It is labeled “return to the order to show cause,” is not verified, is not in form a pleading, and is more in the nature of an argument against the writ.
In such cases, the proper practice is to file a statutory demurrer or a verified answer to which may be attached the argument supporting the demurrer or answer.
To this “return to the order to show cause,” the plaintiffs filed a demurrer “upon the ground that the same does not state facts sufficient to constitute a defense,” and for such reasons, we will treat this “return to the order to show cause” as an answer to plaintiffs’ petition.
JOHNS, J.:
There is no dispute about any of the material facts. Both parties admit the execution of the agreement above quoted, and that as to the specified dates, it has at all times been in force and effect.
The order of the Commissioner, of which the petitioners complain, among other things, recites:
“On this incidental question the Commission believes that the provision of subsection (h) of section 16 of Act No. 2307, as amended by Act No. 2694, is applicable, under which provision the proceeding on the petition for publication of the shipowners, the petitioners herein, was made as in substance the contention of the shipowners, the herein petitioners, involves increases in the standard rates contained in the aforesaid Order No. 16, although these increases which were published are the same ones which will cease after the 31st of this month. And it being necessary to examine and verify the aforesaid statements, this Commission believes it reasonable to make use of its discretionary power conferred upon it by said subsection (h) of section 16. Wherefore, the effect of the announcement as to putting again in force the increases which shall cease to have any force on the 31st of this month, must be and is hereby suspended, after the 31st of this month, pending hearing and decision of the principal case, such suspension not to last more than three months from the first of November, 1922.
“So ordered. This order shall take effect on the 1st of November, 1922.”
The question involved is the authority of the Commissioner to make the order.
Subsection (h) of section 16, of Act No. 2307, is as follows:
“When any public utility as herein denned shall increase any existing individual rates, joint rates, tolls, charges, or schedules thereof, as well as commutation, mileage, and other special rates, or change or alter any existing classification, the Board shall have power either upon written complaint or upon its own initiative to hear and determine whether the said increase, change, or alteration is just and reasonable. The burden of proof to show that the said increase, change, or alteration is just and reasonable shall be upon the public utility making the same. The Board shall have power pending such hearing and determination to order the suspension of the said increase, change, or alteration until the said Board shall have approved said increase, change, or alteration, not exceeding three months. It shall be the duty of the said Board to approve any such increase, change, or alteration upon being satisfied that the same is just and reasonable.”
It will be noted that it says “when any public utility as herein defined shall increase any existing individual rates, etc.” “The Board shall have power pending such hearing and determination to order the suspension of the said increase, change, or alteration, etc.”
That law was enacted in 1913. In 1917 and by Act No. 2694, subsection (h)t of section 16, of that Act, was amended to read as follows:
“When any public utility as herein defined proposes to increase or reduce any existing individual rates, joint rates, tolls, charges, or schedules thereof, as well as commutation, mileage, and other special rates, or change or alter any existing classification, it shall send written notice thereof to the Public Utility Commission thirty days prior to the date on which the proposed increase, reduction, change or alteration is to take effect, unless the Commission, by means of an order, consent to a shorter notice, and upon receipt of said notice, the Commission shall be authorized, either upon complaint in writing or by virtue of its office, to see and determine whether said increase, reduction, change or alteration is just and reasonable. The burden of proof to show that the said increase, reduction, change or alteration is just and reasonable shall be upon the public utility making the same. The Commission shall have power pending such hearing and determination to order the suspension of the said increase, reduction, change or alteration until the said Commission shall have approved said increase, reduction, change or alteration, not exceeding three months,”
It will be noted that the amended Act reads:
“When any public utility as herein defined proposes to increase or reduce any existing individual rates, etc. “The Commission shall have power pending such hearing and determination to order the suspension of the said increase, reduction, change or alteration until the said Commission shall have approved said increase, reduction, change Or alteration, not exceeding three months.”
Those changes are material and important. Act No. 2307 only applied to a petition for an increase of rates, and the power of the Board to make the order pending the hearing was limited to a petition for an increase, change or alteration. Under Act No. 2694, the petition may be for either an increase or reduction, and pending which the Commission has power to make an order for “the suspension of said increase, reduction, change, or alteration.”
It is very apparent from a reading of the original and amended subsections that the purpose of the amendment was to broaden the power of the Commission.
The petitioners contend that their notice was for a continuation of the rates under the agreement, as distinguished from an increase or reduction, and, hence, that the Commission has no power to make the order pending the hearing. This contention gives a narrow construction to the amendment made of the original subsection (h) by Act No. 2694. The purpose of that amendment was to vest the Commission with plenary, discretionary power pending the hearing to make the temporary order of which the petitioners complain.
Although the actual facts are not before the court, it is very apparent that the agreement in question was entered into as a result of a hearing which was then pending before the Commissioner for either an increase or reduction of rates. In legal effect, you have here a continuation of the original hearing which was pending before the Commission when the agreement was executed, and we have a legal right from the agreement to assume that the original hearing was either for an increase or reduction of rates.
The legal effect of the agreement was to suspend the hearing which was pending before the Commission at the time it was executed. Although the parties made that agreement and are bound by it, they are not and cannot be bound beyond the time specified without their mutual consent. The record here shows that the petitioners want the agreement to continue in force and effect after it has expired, and that the Attorney-General, now representing the Government, is opposed to any continuation of the agreement.
The original hearing having been pending and the agreement having expired by its terms, the conditions existing at the time it was made are again restored and become of the same force and effect as they were at the time the agreement was made. Hence, in truth and in fact, the Commission now has pending before it the original petition for either an increase or reduction of rates which brings it squarely within the provisions of the amended statute. Again, it is very apparent that no final order establishing rater was made in the original petition, and that the rates under the agreement were temporary only. If any final order had ever been made, there would be no necessity for a petition to continue in force the rates established by the final order. If the rates were established by a final order, they would ipso facto remain in force and effect until they were changed without an order.
The question before this court is not whether the Commissioner should or should not have made the order of which the petitioners complain. The question before the court is whether the Commissioner had the power and authority to make the order, and under the facts the amended statute gives him that discretionary power.
For such reasons, and following the stipulation, the preliminary order granting the injunction is hereby dissolved, and the petition is dismissed, with costs in favor of the defendants. So ordered.
Araullo, C, J., Johnson, Malcolm, Avanceña, Villamor, Ostrand, and Romualdez, JJ., concur.