MATIENZO vs. ABELLERA

MATIENZO vs. ABELLERA

G.R. No. L-45839 - June 1, 1988

FACTS:

The petitioners and private respondents are all authorized taxicab operators in Metro Manila. The respondents, however, admittedly operate “colorum” or “kabit” taxicab units. On or about the second week of February, 1977, private respondents filed their petitions with the respondent Board of Transportation (BOT) for the legalization of their unauthorized “excess” taxicab units citing PD 101, promulgated on January 17, 1973, “to eradicate the harmful and unlawful trade of clandestine operators, by replacing or allowing them to become legitimate and responsible operators.” Within a matter of days, the respondent Board promulgated its orders setting the application for hearing and granting applicants provisional authority to operate their “excess taxicab units” for which legalization was sought.

Opposing the applications and seeking to restrain the grant of provisional permits or authority, as well as the annulment of permits already granted under PD 101, the petitioners allege that the BOT acted without jurisdiction in taking cognizance of the petitions for legalization and awarding special permits to the private respondents. Citing Section 4 of PD 101, the petitioners argue that neither the BOT chairman nor any member thereof had the power, at the time the petitions were filed (i.e. in 1977), to legitimize the clandestine operations under PD 101 as such power had been limited to a period of six (6) months from and after the promulgation of the Decree on January 17, 1973. They state that, thereafter, the power lapses and becomes functus officio.

ISSUE:

Whether or not BOT can still legalize clandestine and unlawful taxicab operations under Section 1 of PD 101 despite the lapse of six (6) months after the promulgation of the Decree.

RULING:

Yes.

A reading of Section 1, PD 101, shows a grant of powers to the respondent Board to issue provisional permits as a step towards the legalization of colorum taxicab operations without the alleged time limitation. There is nothing in Section 4, cited by the petitioners, to suggest the expiration of such powers six (6) months after promulgation of the Decree. Rather, it merely provides for the withdrawal of the State’s waiver of its right to punish said colorum operators for their illegal acts. In other words, the cited section declares when the period of moratorium suspending the relentless drive to eliminate illegal operators shall end. Clearly, there is no impediment to the Board’s exercise of jurisdiction under its broad powers under the Public Service Act to issue certificates of public convenience to achieve the avowed purpose of PD 101 (Sec. 16a, Public Service Act, Nov. 7, 1936).

It is a settled principle of law that in determining whether a board or commission has a certain power, the authority given should be liberally construed in the light of the purposes for which it was created, and that which is incidentally necessary to a full implementation of the legislative intent should be upheld as germane to the law. Necessarily, too, where the end is required, the appropriate means are deemed given.

JAWORSKI vs. PAGCOR

JAWORSKI vs. PAGCOR

G.R. No. 144463 - January 14, 2004

FACTS:

The Philippine Amusement and Gaming Corporation (PAGCOR) is a government owned and controlled corporation existing under PD No. 1869 issued on July 11, 1983 by then President Ferdinand Marcos.

On March 31, 1998, PAGCOR’s board of directors approved an instrument denominated as “Grant of Authority and Agreement for the Operation of Sports Betting and Internet Gaming,” which granted Sports and Games and Entertainment Corporation (SAGE) the authority to operate and maintain Sports Betting station in PAGCOR’s casino locations, and Internet Gaming facilities to service local and international bettors, provided that to the satisfaction of PAGCOR, appropriate safeguards and procedures are established to ensure the integrity and fairness of the games. On September 1, 1998, PAGCOR, represented by its Chairperson, Alicia LI. Reyes, and SAGE, represented by its Chairman of the Board, Henry Sy, Jr., and its President, Antonio D. Lacdao, executed the above-named document. Pursuant to the authority granted by PAGCOR, SAGE commended its operations by conducting gambling on the Internet on a trial-run basis, making pre-paid cards and redemption of winnings available at various Bingo Bonanza outlets.

Petitioner Senator Robert Jaworski, in his capacity as member of the Senate and Chairman of the Senate Committee on Games, Amusement and Sports, filed the instant petition, praying that the grant of authority by PAGCOR in favor of SAGE be nullified. He maintains that PAGCOR committed grave abuse of discretion amounting to lack or excess of jurisdiction when it authorized SAGE to operate gambling on the internet. He contends that PAGCOR is not authorized under its legislative franchise, PD No. 1869, to operate gambling on the internet for the simple reason that the said decree could not have possibly contemplated internet gambling since at the time of its enactment on July 11, 1983 the internet was yet inexistent and gambling activities were confined exclusively to real-space. Further, he argues that the internet, being an international network of computers, necessarily transcends the territorial jurisdiction of the Philippines, and the grant to SAGE of authority to operate internet gambling contravenes the limitation of PAGCOR’s franchise, under Section 14 of PD No. 1869 which provides: “Place. – The Corporation [i.e., PAGCOR] shall conduct gambling activities or games of chance on land or water within the territorial jurisdiction of the Republic of the Philippines. x x x.”

Moreover, according to petitioner, internet gambling does not fall under any of the categories of the authorized gambling activities enumerated under Section 10 of PD No. 1869 which grants PAGCOR the “right, privilege and authority to operate and maintain gambling casinos, clubs, and other recreation or amusement places, sports gaming pools, within the territorial jurisdiction of the Republic of the Philippines.” He contends that internet gambling could not have been included within the commonly accepted definition of “gambling casinos,” “clubs” or “other recreation or amusement places” as these terms refer to a physical  structure in real-space where people who intend to bet or gamble go and play games of chance authorized by law.

ISSUE:

Whether or not PAGCOR is allowed to contract any of its franchise to another entity such as SAGE.

RULING:

No.

A legislative franchise is a special privilege granted by the state to corporations. It is a privilege of public concern which cannot be exercised at will and pleasure, but should be reserved for public control and administration, either by the government directly, or by public agents, under such conditions and regulations as the government may impose on them in the interest of the public. It is Congress that prescribes the conditions on which the grant of the franchise may be made. Thus the manner of granting the franchise, to whom it may be granted, the mode of conducting the business, the charter and the quality of the service to be rendered and the duty of the grantee to the public in exercising the franchise are almost always defined in clear and unequivocal language.

While PAGCOR is allowed under its charter to enter into operator’s and/or management contracts, it is not allowed under the same charter to relinquish or share its franchise, much less grant a veritable franchise to another entity such as SAGE. PAGCOR cannot delegate its power in view of the legal principle of delegata potestas delegare non potest, inasmuch as there is nothing in the charter to show that it has been expressly authorized to do so. In Lim v. Pacquing, the Court clarified that “since ADC has no franchise from Congress to operate the jai-alai, it may not so operate even if it has a license or permit from the City Mayor to operate the jai-alai in the City of Manila.” By the same token, SAGE has to obtain a separate legislative franchise and not “ride on” PAGCOR’s franchise if it were to legally operate on-line Internet gambling.

DELSAN TRANSPORT LINES, INC. vs. COURT OF APPEALS

DELSAN TRANSPORT LINES, INC. vs. COURT OF APPEALS

G.R. No. 127897 - November 15, 2001

FACTS:

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport Lines, Inc., for a period of one year whereby the said common carrier agreed to transport Caltex’s industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took on board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the Caltex Oil Terminal in Zamboanga City. The shipment was insured with the private respondent, American Home Assurance Corporation.

On August 14, 1986, MT Maysun set sail from Batangas for Zamboanga City. Unfortunately, the vessel sank in the early morning of August 16, 1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel oil.

Subsequently, private respondent paid Caltex the sum of Five Million Ninety-Six Thousand Six Hundred Thirty-Five Pesos and Fifty-Seven Centavos (P5,096,635.57) representing the insured value of the lost cargo. Exercising its right of subrogation under Article 2207 of the New Civil Code, private respondent demanded of the petitioner the same amount it paid to Caltex. Due to its failure to collect from the petitioner despite prior demand, private respondent filed a complaint with the Regional Trial Court of Makati, Branch 137, for collection of a sum of money. After trial, the trial court rendered a decision on November 29, 1990 dismissing the complaint. The trial court found that the vessel, MT Maysun, was seaworthy and that the incident was caused by unexpected inclement weather condition or force majeure, thus, exempting the common carrier from liability for the loss of its cargo.

The decision of the trial court, however, was reversed, on appeal, by the Court of Appeals. The appellate court ruled that petitioner is liable on its obligation as common carrier to herein private respondent insurance company as subrogee of Caltex. The subsequent motion for reconsideration was denied by the appellate court. Hence, petitioner filed the instant petition before the Supreme Court.

ISSUE:

Whether or not the payment made by private respondent to Caltex amounted to an automatic admission of the vessel’s seaworthiness.

RULING:

No.

The payment made by the private respondent for the insured value of the lost cargo operates as waiver of its (private respondent) right to enforce the term of the implied warranty against Caltex under the marine insurance policy. However, the same cannot be validly interpreted as an automatic admission of the vessel’s seaworthiness by the private respondent as to foreclose recourse against the petitioner for any liability under its contractual obligation as a common carrier. The fact of payment grants the private respondent subrogatory right which enables it to exercise legal remedies that would otherwise be available to Caltex as owner of the lost cargo against the petitioner common carrier.

ONG LIM SING, JR. vs. FEB LEASING AND FINANCE CORPORATION

ONG LIM SING, JR. vs. FEB LEASING AND FINANCE CORPORATION

G.R. No. 168115 - June 8, 2007

FACTS:

On March 9, 1995, FEB Leasing and Finance Corporation entered into a lease of equipment and motor vehicles with JVL Food Products. On the same date, Vicente Ong Lim Sing, Jr. executed an Individual Guaranty Agreement with FEB to guarantee the prompt and faithful performance of the terms and conditions of the aforesaid lease agreement. Corresponding Lease Schedules with Delivery and Acceptance Certificates over the equipment and motor vehicles formed part of the agreement. Under the contract, JVL was obliged to pay FEB an aggregate gross monthly rental of One Hundred Seventy Thousand Four Hundred Ninety-Four Pesos (P170,494.00).

JVL defaulted in the payment of the monthly rentals. As of July 31, 2000, the amount in arrears, including the penalty charges and insurance premiums, amounted to Three Million Four Hundred Fourteen Thousand Four Hundred Sixty-Eight and 75/100 Pesos (P3,414,468.75). On August 23, 2000, FEB sent a letter to JVL demanding payment of the said amount. However, JVL failed to pay.

On December 6, 2000, FEB filed a Complaint with the Regional Trial Court of Manila for sum of money, damages, and replevin against JVL, Lim, and John Doe.

In an Amended Answer, JVL and Lim admitted the existence of the lease agreement but asserted that it is in reality a sale of equipment on instalment basis, with FEB acting as the financier. On November 22, 2002, the trial court ruled in favor of JVL and Lim and stressed the contradictory terms found in the lease agreement. The trial court stated, among others, that if JVL and Lim (then defendants) were to be regarded as only a lessee, logically the lessor who asserts ownership will be the one directly benefited or injured and therefore the lessee is not supposed to be the assured as he has no insurable interest.

On December 27, 2002, FEB filed its Notice of Appeal. Accordingly, on January 17, 2003, the court issued an Order elevating the entire records of the case to the Court of Appeals. On March 15, 2005, the Court of Appeals issued its Decision declaring the transaction between the parties as a financial lease agreement. The said decision reversed and set aside the trial court’s decision dated November 22, 2002. Hence, Lim filed the present Petition for Review on Certiorari.

ISSUE:

Whether or not petitioner has an insurable interest in the equipment and motor vehicles leased.

RULING:

Yes.

The stipulation in Section 14 of the leased contract, that the equipment shall be insured at the cost and expense of the lessee against loss, damage, or destruction from fire, theft, accident, or other insurable risk for the full term of the lease, is a binding and valid stipulation. Petitioner, as a lessee, has an insurable interest in the equipment and motor vehicles leased. Section 17 of the Insurance Code provides that the measure of an insurable interest in property is the extent to which the insured might be damnified by loss or injury thereof. It cannot be denied that JVL will be directly damnified in case of loss, damage, or destruction of any of the properties leased.