Surigao Electric Company vs Municipal of Surigao 24 SCRA 898

Facts

Congress amended the Public Service Act changing the requirements of a certificate of public convenience and necessity from the Public Service Commission for public services owned and controlled by the government but at the same time affirming its power of regulation. The petitioners Surigao Electric Co. and Arturo Lumanlan to whom the rights and privileges of the former including its plants and facilities were transferred challenged the validity of such order of the Public Service Act holding that it had no alternative but to approve the tentative schedules of rate submitted by the Municipality of Surigao.




Issue 

Whether or not the Municipality of Surigao has the power to directly maintain and operate an electric plant without obtaining a specific franchise for the purpose and without obtaining specific franchise from the Public Service Commission.

Held 

The court held that a municipality corporation maintains a dual personality: governmental and corporate. No franchise or right can override the proper exercise of police power of the government. Municipal corporations may promote public services without the need of a certificate of public convenience. The Amendatory Act provided in the Public Service Act lend encouragement and support for municipality corporaions to undertake activities and the result of which is competing firms would be adversely affected.