Republic v PLDT

Facts:
PLDT and RCA Communications Inc (which is not a party to this case but has contractual relations with e parties) entered into an agreement where 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 Bureau of Telecommunications set up its own Government Telephone System (GTS) by renting the trunk lines of PLDT to enable government offices to call private parties. One of the many rules prohibits the use of the service for his private use.

Republic of the Philippines entered into an agreement with RCA for a joint overseas telephone service where the Bureau would convey radio-telephone overseas calls received by the RCA's station to and from local residents.

PLDT complained that the Bureau was violating the conditions for using the trunk lines not only for the use of government offices but even to serve private persons or the general public. PLDT gave a notice that if violations were not stopped, PLDT would sever the connections -which PLDT did.

Republic sued PLDT commanding PLDT to execute a contract, through the Bureau, for the use of the facilities of defendant's telephone system throughout the Philippines under such terms and conditions as the court finds it reasonable.

Issue:
Whether or not Republic can command PLDT to execute the contract.

Held:
No. The Bureau was created in pursuance of a state policy reorganizing the government offices to meet the exigencies attendant upon the establishment of a free Gov't of the Phil.

When the Bureau subscribed to the trunk lines, defendant knew or should have known that their use by the subscriber was more or less public and all embracing in nature.

The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff had extended the use of the trunk lines to commercial purposes, implies assent by the defendant to such extended use. Since this relationship has been maintained for a long time and the public has patronized both telephone systems, and their interconnection is to the public convenience, it is too late for the defendant to claim misuse of its facilities, and it is not now at liberty to unilaterally sever the physical connection of the trunk lines.

To uphold PLDT's contention is to subordinate the needs of the general public.