- CASE DIGEST -
Surigao Electric Company vs Municipal
of Surigao
24 SCRA 898
30 August 1968
SUBJECT: LAW ON PUBLIC CORPORATION
Topic: LGU as an agent of the State; Governmental Functions of LGU
FACTS: On June 1960, Congress amended the Public
Service Act, one of the changes introduced doing away with the requirement of a
certificate of public convenience and necessity from the Public Service
Commission for public services owned and operated by government entities or
government-owned or controlled corporations. The petitioners, Surigao Electric
Co. challenged the validity of the said order.
ISSUE: Whether or not a municipality of Surigao can
directly maintain and operate an electric plant without obtaining a specific
franchise for the purpose and without a certificate of public convenience and
necessity duly issued by the Public Service Commission.
RULING: YES. Municipal government actually
functions as extension of national government and, therefore, it is an
instrumentality of the latter. By express provision of Public Service Act (Act
2677), an instrumentality of the government is exempted from the jurisdiction
of the PSC except with respect to fixing the rate.
The court held that a municipality corporation
maintains a dual personality: governmental and corporate. Municipal
corporations may promote public services without the need of a certificate of
public convenience. This exercise of governmental prerogatives comes within the
undefined scope of police power of the State. No franchise or right can
override the proper exercise of police power of the government. The Amendatory
Act provided in the Public Service Act lend encouragement and support for
municipality corporations to undertake activities, and to better enable it to
aid the State.
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