MERALCO v. PASAY TRANSPORTATION CO | 1932 | J.

Malcolm

Petitioner: Manila Electric company

Respondents: Pasay Transportation Company Inc., et. al.

Summary: This case relates to the validity of section 11 of Act No. 1446 and to the legal right of the
members of the Supreme Court, sitting as a board of arbitrators, to act on the petition of MERALCO which
asks the Court to act as a board of arbitrators. Court held that sitting as a BOA is not a function granted to
it by the Organic Act, and thus declines to conduct further proceedings on the matter.

FACTS

 Act No. 1446 is an an act granting a franchise to Charles M. Swift to construct, maintain, and
operate an electric railway, electric light, heat, and power system from a Manila to the town of
Pasig, in the Province of Rizal.
 Sec 11 of the Act provides:
"Whenever any franchise or right of way is granted to any other person or corporation,
now or hereafter in existence, over portions of the lines and tracks of the grantee herein, the
terms on which said other person or corporation shall use such right of way, and the
compensation to be paid to the grantee herein by such other person or corporation for said
use, shall be fixed by the members of the Supreme Court sitting as a board of arbitrators,
the decision of a majority of whom shall be final.”
- In other words: Whenever a franchise is granted to any corporation, the terms and
compensation shall be fixed by the Supreme Court sitting as a board of arbitrators.
 Pursuant to this Act, MERALCO filed a petition before the Court requesting its members to sit
as a board of arbitrators to fix the terms and the compensation upon which certain
transportation companies shall be permitted to use the Pasig bridge which they constructed.
 Copies of the petition were submitted to the affected transportation companies (including Pasay
Transco) and to the Attorney General.
o The Attorney General disclaimed any interest in the proceedings
o A number of affected public utility operators then filed an opposition
 Examining the statutory provision of Act 1146:
o Power is attempted to be granted to the members of the Supreme Court sitting as a
board of arbitrators.
o The decision of a majority of the members of the Supreme Court is made to be final.
o The franchise which was granted to MERALCO by the government, although it's only a
contract between these parties, is now made to effect the rights of persons not
signatories to the covenant (the affected transportation companies).

ISSUE

WON members of the SC can sit as a board of arbitrators and fix terms and compensation as is asked
of them by MERALCO – NO
  Petitioner MERALCO relies principally on the decision of Tallasee Falls MFG Co. v. Commissioners
Court which held that acts authorizing the Commissioners’ Court to regulate and fix a toll is not a
delegation of legislative powers to the court and hence, not unconstitutional.
o Court: This is not the question presented. Issue is not whether or not there has been a
delegation of legislative powers to the court but rather, the issue concerns the legal
right of the members of the SC sitting as a board of arbitrators.
 Sitting as a board of arbitrators will give SC a dilemma because it will either exercise judicial
functions or administrative/quasi judicial functions
a) As judicial function: If matter is brought up to SC, then SC would then review a decision
of its own SC members sitting as arbitrators which would lead do to an anomaly of an SC
decision
b) As administrative/quasi judicial function: This would result in the performance of
duties which the members of the Supreme Court could not lawfully take it upon
themselves to perform.
 The Supreme Court exercises judicial power and judicial power alone. The power conferred on
the SC is exclusively judicial, and it cannot be required or authorized to exercise any other
power
- Thus, an Act cannot be used against the Court to require or authorize it to exercise any
other jurisdiction or power or perform any other duty besides what Organic Act confers
on them
 A board of arbitrators is not a court in any proper sense. It possesses none of the jurisdiction
which the Organic Act contemplates should be exercised by the SC.
 Court holds that section 11 of Act No. 1446 contravenes the maxims which guide the operation
of a democratic government constitutionally established, and that it would be improper and
illegal for the members of the Supreme Court, sitting as a board of arbitrators, to act on the
petition of MERALCO.

DISPOSITION

Court declined to proceed further.