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122, JUNE 24, 1983 945
Boiser vs. Court of Appeals
*
No. L-61438. June 24, 1983.
ERDULFO C. BOISER, doing business under the name and style PREMIERE AUTOMATIC
TELEPHONE NETWORK, petitioner, vs. COURT OF APPEALS, PHILIPPINE LONG
DISTANCE TELEPHONE CO., CONRADO HERNANDEZ, ROMAN JUEZAN and WILSON
MORRELL, respondents.
Contracts; Jurisdiction; Whether or not the notice requirements specified in the contract was followed
requires presentation of evidence before the proper tribunal.—It may be noted that the above provision
mentions a default or violation continuing for thirty days after written notice and the termination of the
agreement by another written notice. There is nothing in the provision about the period when such
written notice should be given by the party wishing to terminate. Such period can be found in paragraph
13 of the Interconnecting Agreement quoted earlier. Therefore, even granting that there was default on
the part of the petitioner, the 30-day requisite notice should have been followed. Whether or not the
_________________
* FIRST DIVISION.
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ANNOTATED
Boiser vs. Court of Appeals
requirement was followed calls for the presentation of evidence before the proper tribunal.
Jurisdiction; Administrative Law; Damages; Communications; The National Telecommunications
Commission has no authority to decide breach of contract cases and to award moral and exemplary
damages.—PLDT has cited in full the authority and powers given by Presidential Decree No. 1 to the
Board of Communications, now National Telecommunications Commission. There is nothing in the
Commission’s powers which authorizes it to adjudicate breach of contract cases, much less to award
moral and exemplary damages. The two authorities cited by the private respondents in the bid to
dissolve the CFI restraining order do not appear adequate to disregard the thirty (30) day prior notice
provided by the Interconnecting Agreement. But even if they were, this question is one which should be
clarified in the civil case for breach of contract.
Same; Certiorari; Injunction, Failure of a party to press urgently for lifting of a restraining order
militate against a finding of grave abuse sufficient to justify a writ of certiorari.—The Court of First
Instance of Cebu issued its restraining order on March 2, 1979. The motion to lift the order was filed five
months later on August 2, 1979. The motion was properly filed with the trial court, but the lack of
urgency in its filing and the failure of the private respondents to immediately and vigorously press for
the lifting of the restraining order militate against a finding of grave abuse sufficient to justify a writ of
certiorari. The petitioners point out that from the filing of the motion to lift restraining order on August
2, 1979 up to the filing of the petition for certiorari with the Court of Appeals on July 20, 1982, almost
three years lapsed and in all that time, there was no request, motion, nor hint for the trial court to
resolve the pending motion to lift the restraining order.
Same; Same; Same; Same.—Quite the contrary, the private respondents submitted to a trial on the
merits and formally agreed that, in addition to the merits, the motion to dissolve or lift temporary
restraining order and the propriety of the writ of preliminary injunction would be considered and
resolved in the trial of the case. The private respondents agreed that evidence submitted during trial
would include evidence on the pending motion. In fact, the petitioner was already in the process of
winding up its evidence before the Court of First Instance when the private respondents filed their
petition with the Court of Appeals. Private respondents’
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Boiser vs. Court of Appeals
handling of their case dispels any suspicion of unreasonable delay on the part of the Court of First
Instance to resolve such motion.
Same; Same; Same; Respondent PLDT has not shown any special circumstance to warrant
intervention by a higher tribunal on the preliminary injunction issued by the trial court. Cutting off one
connecting station will not affect PLDT’s national expansion program.—Special circumstances may
indeed warrant immediate intervention of a higher court even while the lower court is deliberating on
the action to take on a pending matter. (Matute v. Court of Appeals, 26 SCRA 768; De Gala-Sison v.
Maddela, 67 SCRA 478). The private respondents, however, have failed to make a showing of such
special or exceptional circumstances. We fail to see how closing one relay station serving the province of
Bohol would hasten PLDT’s program of national expansion. There are various other legal remedies,
administrative and judicial, available to handle the alleged non-payment by Premiere of PLDT’s share in
long distance and overseas calls. The case before the Court of Appeals is not the proper remedy for
enforcing collections from Premiere under the circumstances of this case. And more important, matters
dependent on the presentation of evidence are best handled at the trial court level.
Same; Same; Communication; Public Utilities; The telephone and communication industry is affected
by a high degree of public interest which should not suffer from a dispute between two telephone
companies.—The private respondents overlook the fact that telephone and telecommunications services
are affected by a high degree of public interest. It is not Premiere alone which will suffer from the
appellate injunction but the people of Bohol. And as far as we can gather from the records, the
consumers have been paying for the services given them. They are not at fault in this controversy
between Premiere and PLDT.
Same; Same; Same; Same; Same.—In the petition now before us, we do not grapple with such issues
as legalization of illegal services or compelling unwilling parties to enter into interconnection of services.
We simply rule that pending final determination of the case before the trial court, the appellate court
should refrain from acting on the petition now before it and from issuing orders that would punish the
people of Bohol because Premiere and PLDT cannot see eye to eye.
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Boiser vs. Court of Appeals
PETITION for certiorari and prohibition with preliminary injunction to review the order of the
Court of Appeals.
The facts are stated in the opinion of the Court.
GUTIERREZ, JR., J.:
This is a petition for certiorari and prohibition, with a prayer for preliminary injunction or
restraining order, to set aside the July 26, 1982 resolution of the respondent Court of Appeals
which enjoined the enforcement of a March 2, 1979 restraining order of the Court of First
Instance of Cebu. The resolution of the Court of Appeals, in effect, allows the disconnection of
telephone communications between Tagbilaran, Bohol and Mandaue, Cebu thus cutting
telephone communications with the rest of the country and the world, for the duration of the
restraining order.
The petitioner has been operating a telephone system in Tagbilaran City and other
municipalities in the province of Bohol since April 15, 1965, doing business under the name
and style of Premiere Automatic Telephone Network. Sometime in August, 1965, the
petitioner and private respondent Philippine Long Distance Telephone Company (PLDT)
entered into a contract denominated as “Interconnecting Agreement” whereby PLDT bound
itself to provide Premiere with long distance and overseas facilities through the use of the
PLDT relay station in Mandaue City, Province of Cebu. The arrangement enabled subscribers
of Premiere in Bohol to make or receive long distance and overseas calls to and from any part
of the Philippines and other countries of the world. Petitioner on the other hand had the
obligation to preserve and maintain the facilities provided by respondent PLDT, provide relay
switching services and qualified radio operators, and otherwise maintain the required
standards in the operation of facilities under the agreement.
On February 27, 1979, without any prior notice to the petitioner, respondent PLDT issued a
“circuit authorization order” to its co-respondents, PLDT employees Roman Juezan and
Wilson Morrell to terminate the connection of PLDT’s relay station with the facilities of the
petitioner’s telephone
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system in the province of Bohol. Petitioner avers that this order was in gross violation of the
aforecited “Interconnecting Agreement.” To avert serious consequences to the public and
private sectors resulting from any disruption of the petitioners telephone network and, of
course, to the long distance and overseas aspects of its business, the petitioner was compelled
to seek judicial relief. It instituted Civil Case No. 17867 with the then Court of First Instance
of Cebu now a Regional Trial Court, for injunction and damages.
On March 2, 1979, the Court of First Instance of Cebu issued a temporary restraining order
against respondent PLDT and directed the preservation of the status quo between the parties.
On August 2, 1979, or five (5) months after the issuance of the temporary restraining order,
the private respondents filed a motion to dissolve or lift the restraining order. Thereafter, the
petitioner and the private respondents submitted the merits of the main case to a hearing and
agreed to consider jointly in said trial on the merits the motion to dissolve or lift temporary
restraining order including the propriety of the issuance of the writ of preliminary injunction.
The hearing on the merits progressed and petitioner was already in the process of winding
up its evidence in Civil Case No. 17867 before the Court of First Instance, Cebu when on July
20, 1982, or nearly three (3) years after the filing of their motion to dissolve or lift temporary
restraining order, the private respondents elevated the case to the respondent Court of
Appeals by filing the petitioner for certiorari. CA-G.R. No. 14554-SP.
The petition filed with the Court of Appeals had for its object the setting aside of the CFI
restraining order which enjoined PLDT and the other respondents from disconnecting the
Mandaue-Tagbilaran telephone connections. The ground alleged in the petition was:
“RESPONDENT JUDGE HAS NO AUTHORITY TO ISSUE THE RESTRAINING ORDER, DATED
MARCH 2, 1979, CONSIDERING THAT THE ISSUE OR SUBJECT-MATTER OF THE COMPLAINT
FOR WHICH THE SAID ORDER WAS
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Boiser vs. Court of Appeals
ISSUED PROPERLY DEVOLVES WITHIN THE JURISDICTION OF THE NATIONAL
TELECOMMUNICATIONS COMMISSION AND NOT WITH THE REGULAR COURTS.” THE
REGULAR COURTS.”
As earlier mentioned, the respondent Court of Appeals issued its July 26, 1982 resolution
which reads:
Without necessarily giving the course to the petition, respondents are directed to file their Comments
(not a motion to dismiss), sufficient in form and substance to constitute an answer, within ten (10) days
from notice of this resolution.
Meanwhile, the respondents are restrained from enforcing the Order of March 2, 1979, until further
orders from Us.
The hearing of the application for the issuance of a writ of preliminary injunction is hereby set on
August 10, 1982, x x x.
Subsequently, the hearing was re-set by the respondent Court of Appeals for September 6,
1982. The petitioner countered by filing this petition.
The petitioner states that the Court of Appeals, now Intermediate Appellate Court, should
dismiss CA-G.R. No. 14554-SP on the following grounds:
That the respondent Court of Appeals has no jurisdiction or has committed a grave abuse of discretion
amounting to lack or in excess of jurisdiction in taking cognizance of CA-G.R. No. 14554-SP; and
That the petition CA-G.R. No. 14554-SP, before respondent Court of Appeals (now Intermediate
Appellate Court) is premature and has no legal and factual basis.
The jurisdictional issue raised by Premiere in this petition is tied up to the jurisdictional issue
raised by PLDT in its petition filed with the Court of Appeals.
According to PLDT, the principal issue in dispute is the propriety or validity of the “Circuit
Authorization Order” it issued to its own employees co-respondents Ramon Juezan and Wilson
Morrell regarding the use of its own relay station by petitioner Boiser. PLDT emphasizes, and
this is the main thrust of its case both here and below, that the order which cut
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Boiser vs. Court of Appeals
off the Tagbilaran-Mandaue phone connections is an internal transaction and business of
PLDT, and that it relates to a purely technical matter pertaining basically to the operation of
the communications network of a public utility corporation. According to PLDT, the CFI of
Cebu has arrogated upon itself the authority of supervising or overseeing the operations of
PLDT at its Cebu relay station.
Respondent PLDT maintains that the National Telecommunications Commission is the
body with jurisdiction to hear and decide controversies arising from the operation of telephone
systems or the interconnection of communications facilities, not the Court of First Instance.
Petitioner Boiser or Premiere, in turn, contends in the petition before this Court that the
CFI of Cebu acted within its jurisdiction and there being no grave abuse of discretion, the
challenge to its interlocutory order should not have been entertained by the Court of Appeals.
In seeking the dissolution or lifting of the March 2, 1979 CFI restraining order, PLDT
stated that the disconnection it effected was authorized by:
(1) The interconnecting agreement between PLDT and Premiere Automatic Telephone
Network, and
(2) The decision of the Board of Communications dated July 29, 1977 in BOC Case No. 76-
53.
Paragraph 13 of the Interconnecting and Operating Agreement between PLDT and Premiere
provides:
Violation of any of the conditions or terms of this Agreement or of the Interconnecting and Traffic
Agreement attached hereto shall constitute sufficient cause for the cancellation of this Agreement and
the severance of connection on thirty (30) days advance notice given in writing by either party unless
such violation creates manifest hazard to life, property or to facilities of transmission and reception in
which event severance may be made without notice.
Section 2 of the Intercollecting and Traffic Agreement mentioned in the above Paragraph 13,
in turn, provides:
Sec. 2. If either company defaults in the payment of any amounts hereunder or violates any other
provision of this
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Boiser vs. Court of Appeals
Agreement, and if such default or violation continues for thirty (30) days after written notice thereof, the
other company may terminate this Agreement forthwith by written notice.
It may be noted that the above provision mentions a default or violation continuing for thirty
days after written notice and the termination of the agreement by another written notice.
There is nothing in the provision about the period when such written notice should be given
by the party wishing to terminate. Such period can be found in paragraph 13 of the
Interconnecting Agreement quoted earlier. Therefore, even granting that there was default on
the part of the petitioner, the 30-day requisite notice should have been followed. Whether or
not the requirement was followed calls for the presentation of evidence before the proper
tribunal.
The second authority for disconnection cited by the private respondents is the decision in
BOC Case No. 76-53. The decision deals with members of PAPTELCO, of which petitioner is
one who have outstanding accounts with PLDT. The BOC decision refers to outstanding
accounts of PAPTELCO members representing PLDT’s unremitted shares for domestic long
distance and overseas calls. The pertinent provision of the decision is Sec. 3(f) which states
that:
“In addition to the penalty clause imposed under the preceding paragraph, if any PAPTELCO member
neglects or fails to comply with obligations under this Agreement, its service may be disconnected by
PLDT after sixty (60) days written notice to said PAPTELCO member, unless its delinquency shall have
been fully paid or made current.”
It appears clear from the aforecited provision that 60 days prior notice must be given before
disconnection may be effected.
There is, therefore, more than ample basis for the Cebu CFI, now Cebu Regional Trial
Court, to assume jurisdiction and to continue trying Civil Case No. 17867.
The case before the trial court is for injunction arising from breach of contract. Premiere
asks for compliance with the
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Boiser vs. Court of Appeals
terms of the contract and for the payment of P100,000.00 exemplary and moral damages in
addition to attorney’s fees.
PLDT has cited in full the authority and powers given by Presidential Decree No. 1 to the
Board of Communications, now National Telecommunications Commission. There is nothing
in the Commission’s powers which authorizes it to adjudicate breach of contract cases, much
less to award moral and exemplary damages. The two authorities cited by the private
respondents in the bid to dissolve the CFI restraining order do not appear adequate to
disregard the thirty (30) day prior notice provided by the Interconnecting Agreement. But
even if they were, this question is one which should be clarified in the civil case for breach of
contract.
Clearly, therefore, what the petitioner is questioning is an order which does not merely
involve “a purely internal transaction of a telecommunications company” but one which would
necessarily affect rights guaranteed it by the contract allegedly violated.
We ruled in RCPI v. Board of Communications (80 SCRA 471):
“We agree with petitioner RCPI. In one case We have ruled that the Public Service Commission and its
successor in interest, the Board of Communications, ‘being a creature of the legislature and not a court,
can exercise only such jurisdiction and powers as are expressly or by necessary implication, conferred
upon it by statute’. (Filipino Bus Co. vs. Phil. Railway Co., 57 Phil. 860.) The functions of the Public
Service Commission are limited and administrative in nature and it has only jurisdiction and power as
are expressly or by necessary implication conferred upon it by Statute. (Batangas Laguna Tayabas Bus
Co. vs. Public Service Commission, L-25994 and L-26004-26046, August 31, 1966, 17 SCRA 1111.) As
successor in interest of the Public Service Commission, the Board of Communications exercises the same
powers, jurisdiction and functions as that provided for in the Public Service Act for the Public Service
Commission. x x x”
The Board of Communications has been renamed National Telecommunications Commission.
The NTC has no jurisdiction, and the PLDT has made no showing of any, not
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even by necessary implication, to decide an issue involving breach of contract. And as we
stated in RCPI v. Board of Communications, “if in the two cases before us, complainants Diego
Morales and Pacifico Inocencio allegedly suffered injury due to petitioner’s breach of
contractual obligation, x x x the proper forum for them to ventilate their grievances for
possible recovery of damages against petitioner should be in the courts and not in the
respondent Board of Communications.” Jurisdiction is conferred only by the Constitution or
the law. (Pimentel v. Comelec, 101 SCRA 769). It cannot be conferred by the will of the parties.
(Salandanan v. Tizon, 62 SCRA 388). The jurisdiction of the court is determined by the
allegations in the complaint. (Lat. v. PLDT, 67 SCRA 425.)
The petitioner alleges in its second ground for this petition that the case before the Court of
Appeals is premature and has no legal or factual basis.
The private respondents explain that they elevated the case to the Court of Appeals
because the Cebu CFI had taken an unreasonably long time to resolve the motion to lift its
restraining order. PLDT argues that further delays would be prejudicial and, therefore, the
restraining order issued by the Court of Appeals is proper.
The Court of First Instance of Cebu issued its restraining order on March 2, 1979. The
motion to lift the order was filed five months later on August 2, 1979. The motion was properly
filed with the trial court, but the lack of urgency in its filing and the failure of the private
respondents to immediately and vigorously press for the lifting of the restraining order
militate against a finding of grave abuse sufficient to justify a writ of certiorari. The
petitioners point out that from the filing of the motion to lift restraining order on August 2,
1979 up to che filing of the petition for certiorari with the Court of Appeals on July 20, 1982,
almost three years lapsed and in all that time, there was no request, motion, nor hint for the
trial court to resolve the pending motion to lift the restraining order.
As stated in Butuan Bay Wood Export Corporation v. Court of Appeals (97 SCRA 297, 305):
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Boiser vs. Court of Appeals
“Indeed, before a petition for certiorari can be brought against an order of a lower court, all available
remedies must be exhausted. (Plaza v. Mencias, No. L-18253, October 31, 1962, 6 SCRA 563.) likewise, in
a host of case (Aquino v. Estenzo, L-20791, May 19, 1965, citing Herrera v. Barreto, 25 Phil. 345; Uy Chu
v. Imperial, 44 Phil. 27; Amante v. Sison, 60 Phil. 949; Manzanares v. Court of First Instance, 61 Phil.
850; Vicencio v. Sison, 62 Phil. 300, 306; Manila Post Publishing Co. v. Sanchez, 81 Phil. 614; Alvarez v.
Ibañez, 83 Phil. 104; Nicolas v. Castillo, 97 Phil. 336; Collector of Internal Revenue v. Reyes, 100 Phil.
822; Ricafort v. Fernan, 101 Phil. 575; Cueto v. Ortiz, L-11555, May 31, 1960; Pagkakaisa Samahang
Manggagawa sa San Miguel Brewery v. Enriquez, L-12999, July 26, 1960; Santos v. Cardenola, L-18412,
July 31, 1962; Sy It v. Tiangco, L-18376, Feb. 27, 1962; Plaza v. Mencias, L-18253, Oct. 31, 1962), We
ruled that before a petition for certiorari in a higher court, the attention of the lower court should first be
called to its supposed error and its correction should be sought. If this is not done, the petition for
certiorari should be denied. The reason for this rule is that issues which Courts of First Instance are
bound to decide should not summarily be taken from them and submitted to an appellate court without
first giving such lower courts the opportunity to dispose of the same with due deliberation.”
Quite the contrary, the private respondents submitted to a trial on the merits and formally
agreed that, in addition to the merits, the motion to dissolve or lift temporary restraining
order and the propriety of the writ of preliminary injunction would be considered and resolved
in the trial of the case. The private respondents agreed that evidence submitted during trial
would include evidence on the pending motion. In fact, the petitioner was already in the
process of winding up its evidence before the Court of First Instance when the private
respondents filed their petition with the Court of Appeals.
Private respondents’ handling of their case dispels any suspicion of unreasonable delay on
the part of the Court of First Instance to resolve such motion.
The private respondents aver that there are special circumstances which warrant
immediate and direct action of an appellate court. The alleged circumstances include the
failure of respondent PLDT to make full use of its own relay station and the alleged refusal of
the petitioner to pay for its
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use thereby grievously affecting the expansion and modernization program of the respondent
PLDT.
Special circumstances may indeed warrant immediate intervention of a higher court even
while the lower court is deliberating on the action to take on a pending matter. (Matute v.
Court of Appeals, 26 SCRA 768; De Gala-Sison v. Maddela, 67 SCRA 478). The private
respondents, however, have failed to make a showing of such special or exceptional
circumstances. We fail to see how closing one relay station serving the province of Bohol would
hasten PLDT’s program of national expansion. There are various other legal remedies,
administrative and judicial, available to handle the alleged non-payment by Premiere of
PLDT’s share in long distance and overseas calls. The case before the Court of Appeals is not
the proper remedy for enforcing collections from Premiere under the circumstances of this
case. And more important, matters dependent on the presentation of evidence are best
handled at the trial court level.
The private respondents overlook the fact that telephone and telecommunications services
are affected by a high degree of public interest. It is not Premiere alone which will suffer from
the appellate injunction but the people of Bohol. And as far as we can gather from the records,
the consumers have been paying for the services given them. They are not at fault in this
controversy between Premiere and PLDT.
In Republic Telephone Co. v. Philippine Long Distance Telephone Co. (25 SCRA 80), we
sustained the “legalization” of unauthorized services maintained by PLDT for fifteen (15)
years instead of ordering the discontinuance of the telephone system found operating illegally.
The reason—public interest would thus be better served.
In Republic v. Philippine Long Distance Telephone Co. (26 SCRA 620) we restated the rule
that the Republic, acting for and in behalf of the Government Telephone System, and the
PLDT cannot be coerced to enter into an interconnecting contract, where the two could not
agree on terms. We ruled, however, that while the Republic may not compel PLDT to celebrate
a contract with it, the Republic may, in the exercise of the sovereign power of eminent domain,
require PLDT to
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Boiser vs. Court of Appeals
permit interconnection with the Government Telephone System, as the needs of the
government service may require, subject to payment of just compensation. The justification
was, again, the general interest or public interest.
In Cababa v. Remigio (8 SCRA 50), we sustained the acts of the Public Service Commission
under the principle that while an already established public utility operator must be protected
in his investments, the first consideration is still the protection of public interests and
convenience. The question which ultimately determines issues raised by or against public
utilities is—What action is for the best interests of the public?
In the petition now before us, we do not grapple with such issues as legalization of illegal
services or compelling unwilling parties to enter into interconnection of services. We simply
rule that pending final determination of the case before the trial court, the appellate court
should refrain from acting on the petition now before it and from issuing orders that would
punish the people of Bohol because Premiere and PLDT cannot see eye to eye.
The basic policies for the telephone industry embodied in Presidential Decree No. 217 are
premised on the principle that telephone service is a crucial element in the conduct of business
activity, efficient telephone services contribute directly to national development, and
telephone services must be made available at reasonable cost to as many subscribers as
possible. Both law and policy considerations call for the issuance of the prayer for writs.
WHEREFORE, the petition for writs of certiorari and prohibition is GRANTED. The
questioned resolution of the Court of Appeals is SET ASIDE and our restraining order issued
on August 25, 1982 is made PERMANENT. The Intermediate Appellate Court is directed to
dismiss the petition in CA-G.R. No. 14554.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Vasquez and Relova, JJ., concur.
Petition granted.
