CASE DIGEST: Republic vs. PLDT

(1969) 

FACTS: 

Sometime in 1933, the defendant PLDT entered into an agreement with RCA Communications Inc., an American corporation, whereby telephone messages coming from the US and received by RCA’s domestic station, could automatically be transferred to the lines of PLDT, and vice versa. 

The plaintiff through the Bureau of Telecommunications, after having set up its own Government Telephone System, by utilizing its own appropriation and equipment and by renting trunk lines of the PLDT, entered into an agreement with RCA for a joint overseas telephone service. 

Alleging that plaintiff is in competition with them, PLDT notified the former and receiving no reply, disconnected the trunk lines being rented by the same; thus, prompting the plaintiff to file a case before the CFI praying for judgment commanding PLDT to execute a contract with the Bureau for the use of the facilities of PLDT’s telephone system, and for a writ of preliminary injunction against the defendant to restrain the severance of the existing trunk lines and restore those severed. 

ISSUE: 

Whether or not the defendant PLDT can be compelled to enter into a contract with the plaintiff. 

HELD: 

“ x x x while the Republic may not compel the PLDT to celebrate a contract with it, the Republic may, in the exercise of the sovereign power of eminent domain, require the telephone company to permit interconnection of the government telephone system and that of the PLDT, as the needs of the government service may require, subject to the payment of just compensation to be determined by the court.”