GR L 26762; (August, 1970) (Digest)
G.R. No. L-26762, L-26765, L-26779, L-26799. August 31, 1970.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, v. THE PUBLIC SERVICE COMMISSION, Respondent. MANILA ELECTRIC COMPANY, ET AL., petitioners v. PUBLIC SERVICE COMMISSION, Respondent. PHILIPPINE STEAM NAVIGATION COMPANY, Petitioner-Appellant, v. THE PUBLIC SERVICE COMMISSION, Respondent-Appellee. GENERAL SHIPPING COMPANY INC., Petitioner, v. PUBLIC SERVICE COMMISSION, Respondent.
FACTS
On various dates in September 1964, the Public Service Commission assessed several public utility corporations (Philippine Long Distance Telephone Company, Manila Electric Company, Bolinao Broadcasting Corporation, Philippine Steam Navigation Company, and General Shipping Company) supervision and regulation fees for that year based on the value of their respective properties or equipment, pursuant to Section 40(e) of the Public Service Act as amended by Republic Act 3792. The petitioners paid the assessed amounts under protest and sought reconsideration, arguing that under the amended law, the assessment should be based on the subscribed and paid-up capital stocks of the corporations, not on property value. The Public Service Commission denied the petitions, ruling that under the amended provision, the fee shall be based on capital stock (for stock corporations) or capital invested (for non-stock corporations) or the property or equipment, whichever is higher. The Commission’s decision was declared applicable to all similarly situated operators. The petitioners separately appealed to the Supreme Court, raising the same question regarding the proper assessment base.
ISSUE
Whether the Public Service Commission correctly interpreted Section 40(e) of the Public Service Act, as amended by Republic Act 3792, in imposing supervision and regulation fees based on the value of property or equipment as an alternative base applicable to both stock and non-stock corporations, and whether such fees should be computed on the original cost or the present depreciated value of the property and equipment.
RULING
The Supreme Court modified the appealed resolution of the Public Service Commission. It affirmed the Commission’s interpretation that the clause “or of the property or equipment, whichever is higher” in the amended Section 40(e) applies as an alternative base for both stock corporations (based on capital stock) and non-stock corporations (based on capital invested). The Court rejected the petitioners’ argument that this alternative base applied only to non-stock corporations, noting the legislative intent to avoid discrimination and the punctuation in the law supported the Commission’s reading. The Court also held that the fees were revenue-raising measures, not merely reimbursement for actual supervisory expenses, as indicated by the law’s text.
However, the Court ruled that the Commission erred in computing the fees based on the original cost of property and equipment without allowance for depreciation. Justice and equity demand that the fees be calculated on the present values of the operator’s property and equipment at the time the fees become payable, not on the original cost. The Court found no legislative intent to base fees on a theoretical original cost that becomes increasingly distant from reality over time. The necessity for the Commission to determine depreciation rates under the Public Service Act did not justify ignoring depreciation for fee computation. Thus, the resolution was affirmed but modified to require computation based on present values.