VIGAN ELECTRIC LIGHT COMPANY INC vs.

THE PUBLIC SERVICE COMMISSION

GR No. L-19850

FACTS:

Petitioner, Vigan Light Electric Company Inc., was granted a franchise to construct, maintain and operate a
power plant for the purpose of generating and distributing light, heat and power, for sale within the limits of several
municipalities in the province of Ilocos Sur. Subsequently, the petitioner was able to secure from the respondent, a
certificate of public convenience to render electric light, heat or power services to said municipalities subject to the
rates to be charged to the consumers.

After five years from the acquisition of the petitioner thereof, respondent issued a letter ordering the reduction
of rates of the petitioner as the latter is making a net profit in excess to the allowable return of 12% on its invested
capital and that it is in public interest and in consonance with Section 3, RA No. 3043 that reduction of rates to the
extent of its excessive revenue be put into effect immediately. Petitioner instituted an action for certiorari to annul
said order, it being unconstitutional because it was issued without notice and hearing, thus the issuance is without
due process of law. In its defense, the respondent alleged that the disputed order was issued under its delegated
legislative authority, the exercise of which does not require previous notice and hearing.

ISSUE:

Whether or not the Congress validly delegated legislative powers to the respondent (Public Service
Commission).

HELD:

No, the Congress has not delegated and cannot delegate legislative powers to the Public Service
Commission. According to the principle of separation of powers, legislative powers may not be delegated except to
local governments and only as to the matters of purely local in concern. However, the Congress may delegate to
administrative agencies the power to supply the details in the execution of a policy laid down by law which is
complete in itself (determinable without requiring other legislation). Otherwise, there would be no reasonable
means to ascertain whether or not said body has acted within the scope of its authority and in consequence, the
power of legislation would eventually be exercised by a branch of Government other than those authorize by the
Constitution, in violation of not only the allocation of powers therein made, but also of the principle of separation of
powers.

Moreover, although the rule making power and even the power to fix rates may partake of a legislative
character, such is not the nature of the order complained of. Indeed, the same applies exclusively to the petitioner
herein. In a finding of facts made by the respondent based upon the report submitted by the General Auditing Office,
it was stated that the petitioner is making a profit more than 12% of its invested capital but it was denied by the latter.
With these, the petitioner should be entitled to cross examine the maker of the reports, introduce evidence to
disprove or complement the contents thereof and to refute the conclusions drawn therefrom by the respondent. In
other words, in making said finding of facts, the respondent performed a function partaking of a quasi-judicial
character, the valid exercise of which demands previous notice and hearing. Failure to issue previous demand and
hearing by the respondent before the issuance of such order renders it null and void for being violative of due
process clause.

Wherefore, the writ prayed for is granted.