You are on page 1of 2

TERESA ELECTRIC AND POWER CO., INC., v.

PUBLIC SERVICE COMMISSION AND


FILIPINAS CEMENT CORPORATION
(G.R. No. L-21804; 25 September 1967)

PETITIONER: Teresa Electric and Power Co., Inc. (“Teresa Electric”)


RESPONDENTS: Public Service Commission (“PSC”), and Filipinas Cement
Corporation (“Filipinas”)
PONENTE: Dizon, J.

TOPIC: Ultra vires acts of a corporation


LAW:
 Act No. 667 of the Philippine Commission
o Any corporation who desires a franchise to construct and maintain an
electric line or power plant and line for business purposes must get a
municipal or legislative franchise.
 Par. 7, Articles of Incorporation of Filipinas
o Provides for the authority of the corporation to secure a government
franchise necessary or at least related to the operation of its cement
factory
FACTS:
1. Teresa Electric,
 is a domestic corporation operating an electric plant in Teresa,
Rizal under a subsisting {Certificate of public convenience and
necessity}
2. Filipinas,
 is a domestic corporation engaged in the manufacture and sale of
cement
 Par.7 of it Articles of incorporation: (see above)
3. Filipinas filed and {Application for a certificate of public convenience
and necessity} with the PSC
 to install, maintain, and operate an electric plant in Kaysapo, barrio
Pamanaan, Teresa, Rizal
 for the purpose of supplying electric power and light to its cement
factory and its employees living within the compound
4. Teresa Electric filed and {Opposition} alleging:
 Teresa Electric is the only duly authorized operator of electric light,
power and heat services
 Filipina lack of authority to install, maintain, and operate an electric
plant by,
o Its Articles of Incorporation; and
o Its lack of municipal or legislative franchise, pursuant to Act No.
667 of the Philippine Commission
5. It was established that Teresa Electric could not supply the power necessary
for Filipinas to operate its cement factory
6. Eventually, the PSC granted the {Application} and issued a {Certificate of
public convenience and necessity} in Filipinas’ favor
7. Teresa files a {Petition for review}

ISSUES: Does Filipinas have authority to install, maintain, and operate an electric
plant?

RULING: Affirmative. Filipinas has the authority to install, maintain, and operate an
electric plant under the circumstances.

First, Act No. 667 of the Philippine Commission does not apply to corporations
such as Filipinas who applied to operate and maintain an electric plant exclusively
for its own use in connection with the operation of its cement factory and for the use
of its employees living within the compound of the factory. It only applies to
corporations desiring a franchise to do so for business purposes as to render services
to the general public.

Second, par. 7 of Filipinas’ Articles of Incorporation provide that the corporation


may generally perform any and all acts connected with the business of manufacturing
cement or arising therefrom or incidental thereto. The operation of an electric plant
is necessarily connected with the business of manufacturing cement. It was also
established that Teresa Electric could not supply the power necessary for Filipinas
to operate its cement factory.