G.R. No. 83558, 27 February 1989

FACTS:

A complaint for prohibition and mandamus with damages was filed by private respondent against NPC and Philippine Ports Authority (PPA), wherein private respondent alleged that NPC had acted in bad faith and with grave abuse of discretion in not renewing its Contract for Stevedoring Services for Coal-Handling Operations at NPC’s plant, and in taking over its stevedoring services.

After the filing of private respondent’s complaint, respondent judge issued a restraining order against NPC enjoining the latter from undertaking stevedoring services at its pier.

Respondent judge issued the assailed Order denying NPC’s motion and issuing a writ of preliminary injunction, after finding that NPC was not empowered by its Charter, Republic Act No. 6395, as amended, to engage in stevedoring and arrastre services.

ISSUE:

Whether NPC is empowered by its Charter to undertake stevedoring services.

RULING:

Yes. NPC is empowered by its Charter to undertake stevedoring services.

To carry out the national policy of total electrification of the country, specifically the development of hydroelectric generation of power and the production of electricity from nuclear, geothermal and other sources to meet the needs of industrial development and dispersal and the needs of rural electrification [Secs. 1 and 2, Rep. Act No. 6395, as amended], the NPC was created and empowered not only to construct, operate and maintain power plants, reservoirs, transmission lines, and other works, but also:

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… To exercise such powers and do such things as may be reasonably necessary to carry out the business and purposes for which it was organized, or which, from time to time, may be declared by the Board to be necessary, useful, incidental or auxiliary to accomplish said purpose, . . . [Sec. 3 (1) of Rep. Act No. 6395, as amended.]

In determining whether or not an NPC act falls within the purview of the above provision, the Court must decide whether or not a logical and necessary relation exists between the act questioned and the corporate purpose expressed in the NPC charter. For if that act is one which is lawful in itself and not otherwise prohibited, and is done for the purpose of serving corporate ends, and reasonably contributes to the promotion of those ends in a substantial and not in a remote and fanciful sense, it may be fairly considered within the corporation’s charter powers [Montelibano v. Bacolod-Murcia Milling Co., Inc., G.R. No. L-15092, May 18, 1962, 5 SCRA 36.]

In the instant case, it is an undisputed fact that the pier located at Calaca, Batangas, which is owned by NPC, receives the various shipments of coal which is used exclusively to fuel the Batangas Coal-Fired Thermal Power Plant of the NPC for the generation of electric power. The stevedoring services which involve the unloading of the coal shipments into the NPC pier for its eventual conveyance to the power plant are incidental and indispensable to the operation of the plant The Court holds that NPC is empowered under its Charter to undertake such services, it being reasonably necessary to the operation and maintenance of the power plant.

*Case Digest by Paul C. Gandola, Refresher, Andres Bonifacio Law School, SY 2019-2020