670 SUPREME COURT REPORTS ANNOTATED

Lechoco vs. Civil Aeronautics Board

Nos. L-32979-81. February 29, 1972.

NAPOLEON LECHOCO, petitioner, vs. CIVIL A

ERONAUTICS BOARD,PHILIPPINE AIR LINES,INC.,
FILIPINAS ORIENT AIRWAYS,INC., AND AIR
MANILA,INC., respondents.

Statutes; Statutory construction; Implied repeal.—Nothing in

Republic Act 2677 expressly repeals Republic Act 775. While
Section 3 of Republic Act 2677 provides that “All Acts or parts of
Acts inconsistent with the provisions of this Act are hereby
repealed,” the fact is that the derogation was thereby made
dependent upon actual inconsistency with previous laws. This is
the very foundation of the rule of implied repeal.
Same; Same; Implied repeal not favored.—The well-
established principle is that implied repeals are not favored and
consequently statutes must be so construed as to harmonize all
apparent conflicts and give effect to all the provisions whenever
possible.
Public utilities; Authority of Civil Aeronautics Board to fix
carrier’s rates provided rates do not exceed the maximum fixed by
the Public Service Commission.—The rule that implied repeals
are not favored makes it imperative to reconcile both Section 14 of
the Public Service Act as amended by Republic Act 2677, and
section 10 (c) (2) of Republic Act 776, by recognizing the power of
the Civil Aeronautics Board to “fix and determine reasonable
individual, joint or special rates, charges or fares” for air car-

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VOL. 43, FEBRUARY 29, 1972 671

Lechoco vs. Civil Aeronautics Board

riers (under Republic Act 776) but subject to the “maximum rates
on freight and passengers “t hat may be set by the Public Service
Commission (as per Republic Act 2677); so that the rates, charges
or fares allowed or fixed by CAB may in no case exceed the
maxima prescribed now or to be prescribed in the future by the
PSC.

ORIGINAL PETITION in the Supreme Court. Certiorari

with preliminary injunction.

The facts are stated in the opinion of the Court.

          Crispin T. Reyes, Manuel Imbong and Napoleon
Lechoco for petitioner.
          Solicitor General Felix Q. Antonio for respondent
Civil Aeronautics Board.
          Tañada, Sanchez, Tañada & Tañada and Felipe L.
Goson & C.S. Cervantes, Jr. for respondent Philippine Air
Lines, Inc.
          Conrado M. Valera for respondent Filipinas Orient
Airways, Inc.
     Vivencio B. Alcasid for respondent Air Manila, Inc.

REYES, J.B.L., J.:

Original petition for certiorari with preliminary injunction

to annul and set aside Civil Aeronautics Board resolutions
Nos. 165 (70), 321 (70) and 330 (70), fixing temporary and
permanent rate or fare adjustments of three domestic air
carriers, Philippine Air Lines (PAL), Filipinas Orient
Airways (FOA) and Air Manila, and dismissing petitioner’s
objections thereto, based on alleged lack of jurisdiction.
The issue submitted for Our decision is whether
authority to fix air carrier’s rates is vested in the Civil
Aeronautics Board (CAB) or in the Public Service
Commission (PSC).
Petitioner Lechoco contends that by the enactment of
Republic Act No. 2677 (on 18 June 1960) amending sections
13 (a) and 14 of Commonwealth Act No. 146 (the original
PSC Act), jurisdiction to control rates of airships

672

672 SUPREME COURT REPORTS ANNOTATED

Lechoco vs. Civil Aeronautics Board

was taken away from the Civil Aeronautics Board and

revested in the PSC, since Republic Act 2677 impliedly
repealed section 10(c) (2) of Republic Act No. 776, passed on
20 June 1952, conferring control over air rates and fares on
the CAB.
Respondents aver, on the other hand, that, at the very
least, jurisdiction over air fares and rates was, under both
statutes, exercisable concurrently by the CAB and the PSC,
and that following the rule on concurrent jurisdictions of
judicial bodies, the first to exercise or take jurisdiction
(CAB in this case) should retain it to the exclusion of the
other body.
In resolving the issue posed, it is apposite to review the
various laws enacted on the matter.
In 1932, the Philippine (pre Commonwealth) Legislature
provided by Public Law No. 3996, in its section 15, that any
—

“Person or persons engaged in air commerce shall submit for

approval to the Public Service Commission or its authorized
representative uniform charges applied to merchandise and
passengers per kilometer or over specified distances. . . . . .”

In consonance with said law, the legislative franchise

granted in November of 1935 to the Philippine Aerial Taxi
Company, Inc. (Act No. 4271) specified that (section 3)—

“The grantee shall fix just, reasonable and uniform rates for the
transportation of passengers and freight, subject to the
supervision and approval of the Public Service Commission. . . . . .
.”

The following year the PSC was reorganized by

Commonwealth Act No. 146, enacted 7 November 1936.
Section 13 thereof granted PSC “general supervision and
regulation of, jurisdiction and control over, all public
services. . . . . .” except as otherwise provided. The same
section, however, contained the following reservation:

“. . . . . . Provided further, That the Commission shall not exercise

any control or supervision over aircraft in the Philippines, except
with regard to the fixing of maximum passenger and freight rates
. . . . . .”

In the aftermath of World War II the Legislature of the

independent Republic of th e Philippines passed Republic

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Lechoco vs. Civil Aeronautics Board

Act No. 51, on 4 October 1946, authorizing the Chief

Executive to reorganize within one year the different
executive departments, bureaus, offices, agencies and other
instrumentalities of the government, including
corporations owned or controlled by it. In the exercise of
the broad powers thus conferred, the President of the
Philippines, by Executive Order No. 94, of 4 October 1947,
in its section 149, abolished the Civil Aeronautics
Commission and transferred its functions and duties to the
Civil Aeronautics Board created by said Order No. 94, with
the following provision:

“The . . . . . . functions provided in section 13 of Commonwealth

Act No. 146, pertaining to the power of the Public Service
Commission to fix the maximum passenger and freight rates that
may be charged by airlines . . . . . . are hereby transferred to and
consolidated in the Civil Aeronautics Administration and/or Civil
Aeronautics Board.”

The foregoing transfer of functions was virtually ratified by

Republic Act No. 776, effective on 20 June 1952, entitled
“An Act to Reorganize the Civil Aeronautics Board and the
Civil Aeronautics Administration, to provide for the
regulation of civil aeronautics in the Philippines . . . . .”
that delimited the powers of th e Board. Section 10 of Act
776 prescribed, inter alia, the following:

“SEC. 10. Powers and duties of the Board.—(A) Except as

otherwise provided herein, the Board shall have the power to
regulate the economic aspect of air transportation, and shall have
the general supervision and regulation of, and jurisdiction and
control over, air carriers as well as their property, property rights,
equipment, facilities, and franchise, in so far as may be necessary
for the purpose of carrying out the provisions of this Act.
‘xxxxx      xxxxx      xxxxx
‘(C) The Board shall have the following specific powers and
duties:
‘(2) To fix and determine reasonable individual, joint, or special
rates, charges or fares which an air carrier may demand, collect
or receive for any service in connection with air commerce. The
Board may adopt any original, amended, or new individual, joint
or special rates, charges or fares proposed by an air carrier if the
proposed individual, joint, or special rates, charges or fares are
not unduly preferential or unduly discri-

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674 SUPREME COURT REPORTS ANNOTATED

Lechoco vs. Civil Aeronautics Board

minatory or unreasonable. The burden of proof to show that the

proposed individual, joint, or special rates, charges or fares are
just and reasonable shall be upon the air carrier proposing the
same.’ ”

Latest enactment of the series was Republic Act No. 2677,

in effect on 18 June 1960, that amended various sections of
Commonwealth Act No. 146, the basic Public Service Act.
Among those amended was section 14, which was made to
read:

“SEC. 14.—The following

1
are exempted from the provisions of the
preceding section:
xxxxx      xxxxx      xxxxx
“(c) Airships within the Philippines except as regards the fixing
of their maximum rates on freight and passengers .” (Italics
supplied)

Contrary to the views of petitioner Lechoco, there is

nothing in Republic Act 2677 that expressly repeals
Republic Act No. 776. While section 3 of Republic Act 2677
provides that “All Acts or parts of Acts inconsistent with
the provisions of this Act are hereby repealed”, the fact is
that the derogation was thereby made dependent upon
actual inconsistency with previous laws. This is the very
foundation of the rule of implied repeal. However, there is
nothing in Act 2677 that evidences an intent on the part of
the Legislature to set aside the carefully detailed
regulation of civil air transport as set forth in Act 776. Said
Act in itself constitutes a recognition of the need of
entrusting regulation, supervision and control of civil
aviation to a specialized body.
We find no irreconcilable inconsistency between section
14 of the Public Service Act, as amended by Republic Act
2677, and section 10(c) (2) of the prior Republic Act 776,
above quoted, except for the fact that power over rates to be
charged by air carriers on passengers and freight are
vested in different entities, the CAB and the PSC. Even
that will result in no more than a concurrent jurisdiction in
both

_______________

1 Section 13 that defined the jurisdiction and control, supervision and

regulation of the PSC over public services.

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VOL. 43, FEBRUARY 29, 1972 675

Lechoco vs. Civil Aeronautics Board

supervisory entities, and not in the divesting of the power

of one in favor of the other.
The absence of intent to repeal Republic Act No. 776 by
the enactment of Act 2677 is also evidenced by the
explanatory note to House Bill 4030 (that later became Act
2677). It expressly stated the desire to broaden the
jurisdiction of the PSC “by vesting it with the power to
supervise and control maritime transportation . . . except
air transportion and warehouses which are now subject to
regulation and supervision by the Civil Aeronautics
2
Board
and the Bureau of Commerce respectively.”
The same legislative intent to maintain the jurisdiction
and powers of the CAB appears from a consideration of the
legislation subsequent to the enactment of Republic Act
2677. Thus, Republic Act No. 4147, enacted 20 June 1964
(granting an air transportation franchise to Filipinas
Orient Airways), and Republic Act No. 4501, passed in 19
June 1965 (granting a similar franchise to Air Manila,
Inc.), both uniformly require (in their section 3) that the
franchise grantee—

“shall fix just and reasonable and uniform rates for the
transportation of passengers and freight, subject to the regulations
and approval of the Civil Aeronautics Board or such other
regulatory agencies as the Government may designate for this
purpose.” (Italics supplied)

Such references to the Civil Aeronautics Board after the

enactment of Republic Act No. 2677 would be difficult to
explain if said law had already repealed the power of the
CAB over fares or rates, as contended by petitioner
Lechoco.
Be that as it may, the well-establish ed principle is that
implied repeals are not favored and consequently statutes
must be so construed as to harmonize all apparent conflicts3
and give effect to all the provisions whenever possible.
This rule makes it imperative to reconcile both section 14

_______________

2 Cong. Record, House of Representatives, 4th Congress, Vol. III, page

2368.
3 Esperat vs. Avila, L-25922, 30 June 1967, 20 SCRA 596; People vs.
Palmon, 86 Phil. 350; People vs. Peñas, 86 Phil. 596; Villanueva vs. Ortiz,
58 Off. Gaz., 1318.

676

676 SUPREME COURT REPORTS ANNOTATED

Lechoco vs. Civil Aeronautics Board

of the Public Service Act as amended by Republic Act No.

2677, and section 10(c) (2) of Republic Act No. 776, by
recognizing the power of the Civil Aeronautics Board to “fix
and determine reasonable individual, joint or special rates,
charges or fares” for air carriers (under Republic Act 776)
but subject to the “maximu m rates on freights and
passengers” that may be set by the Public Service
Commission (as per Republic Act 2677); so that the rates,
charges or fares allowed or fixed by CAB may in no case
exceed the maxima prescribed now or to be prescribed in
the future by the PSC.
The respondents have suggested that the retention in
Republic Act 2677 of the power of the PSC to fix maximu m
rates on air freight and passengers was the result of
legislative inadvertence, considering that in House Bill No.
4030 the phrase conferring such power on the PSC
appeared in brackets, indicating that said passage was to
be eliminated. But however plausible th e suggestion
should be, this Court is powerless to ignore the express
grant of the authority in question in the wording of
Republic Act 2677 as finally approved. The elimination of
the words “except as regards the fixing of their maximu m
rates on freight and passengers” from section 14(c) of the
Public Service Act, as amended by Republic Act 2677, in
order to avoid conflict with Republic Act 776, and to unify
jurisdiction and control over civil aviation in the
Philippines, can only be obtained from the Legislature
itself.
PREMISES CONSIDERED, the questioned order of the
Civil Aeronautics Board, asserting its jurisdiction to fix the
reasonable fares that air carriers may demand, are in
accord with law, there being no showing that the Public
Service Commission has fixed any maximum rates therefor.
WHEREFORE, the writ of certiorari with preliminary
injunction applied for is hereby denied. Costs against
petitioner Napoleon Lechoco.

          Concepcion, C.J., Makalintal, Zaldivar, Castro,

Fernando, Teehankee, Barredo, Villamor and Makasiar,
JJ., concur.

Writ denied.
677

VOL. 43, FEBRUARY 29, 1972 677

Tan vs. Macapagal

Notes.—Test of implied repeal.—It is necessary before a

repeal by implication is deemed to exist that it be shown
that the statutes or statutory provisions deal with the same
subject matter and th at the latter be inconsistent with the
former. There must be a showing of repugnancy clear and
convincing in character. The language used in the latter
statute must be such as to render it irreconcilable with
what had been formerly enacted. An inconsistency that
 falls short of that standard does not suffice. What is needed
is a manifest indication of legislative purpose. (Villegas vs.
Subido, et al., 41 SCRA 190).

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