Republic V PLDT

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Republic v.

PLDT (1969) PROVISION:


Art. 1306. The contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not
Petitioners: Republic of the Philippines contrary to law, morals, good customs, public order, or public policy
Respondents: PLDT
RULING + RATIO: NO, but Republic may compel an interconnection
DOCTRINE: contract with PLD through power of eminent domain.
Freedom to stipulate such terms and conditions is of the essence of our 1. Parties cannot be coerced to enter into a contract where no agreement is
contractual system, and by express provision of the statute, a contract may had between them as to the principal terms and conditions of the
be annulled if tainted by violence, intimidation, or undue influence contract.
2. Freedom to stipulate such terms and conditions is of the essence of our
FACTS: contractual system, and by express provision of the statute, a contract
1. Sometime in 1933,PLDT entered into an agreement with RCA may be annulled if tainted by violence, intimidation, or undue influence
Communications Inc., an American corporation, whereby telephone
messages coming from the US and received by RCAs domestic station, 3. While the Republic may not compel the PLDT to celebrate a contract with
could automatically be transferred to the lines of PLDT, and vice versa. it, the Republic may, in the exercise of the sovereign power of eminent
domain, require the telephone company to permit interconnection of the
2. RP, through the Bureau of Telecommunications, after having set up its government telephone system and that of the PLDT, as the needs of the
own Government Telephone System, by utilizing its own appropriation government service may require, subject to the payment of just
and equipment and by renting trunk lines of the PLDT, entered into an compensation to be determined by the court.
agreement with RCA for a joint overseas telephone service.

3. Alleging that the government is in competition with them, PLDT notified


the former and receiving no reply, disconnected the trunk lines being DISPOSITION: WHEREFORE, the decision of the Court of First Instance,
rented by the same. now under appeal, is affirmed, except in so far as it dismisses the petition of
the Republic of the Philippines to compel the Philippine Long Distance
4. This prompted the government to file a case before the CFI praying for Telephone Company to continue servicing the Government telephone system
judgment commanding PLDT to execute a contract with the Bureau for upon such terms, and for a compensation, that the trial court may determine
the use of the facilities of PLDTs telephone system, and for a writ of to be just, including the period elapsed from the filing of the original complaint
preliminary injunction against the defendant to restrain the severance of or petition. And for this purpose, the records are ordered returned to the court
the existing trunk lines and restore those severed. of origin for further hearings and other proceedings not inconsistent with this
opinion. No costs.
ISSUE: WON PLDT can be compelled to enter into a contract with the
government

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