NAGA TELCO v.
CA
Naga Telephone Co., Inc. (NATELCO) is a telephone company rendering local as well as
long distance telephone service in Naga City while private respondent Camarines Sur II
Electric Cooperative, Inc. (CASURECO II) is a private corporation established for the
purpose of operating an electric power service in the same city.
The parties entered into a contract for the use by petitioners in the operation of its telephone
service the electric light posts of private respondent in Naga City. In consideration therefor,
petitioners agreed to install, free of charge, ten (10) telephone connections for the use by
private
Said contract also provided:
(a) That the term or period of this contract shall be as long as the party of the first
part has need for the electric light posts of the party of the second part it being
understood that this contract shall terminate when for any reason whatsoever,
the party of the second part is forced to stop, abandon its operation as a public
service and it becomes necessary to remove the electric lightpost; (sic) 4
After the contract had been enforced for over ten (10) years, private respondent filed on
January 2, 1989 with the Regional Trial Court of Naga against petitioners for reformation of
the contract with damages, on the ground that it is too one-sided in favor of petitioners; that
after eleven (11) years of petitioners' use of the posts, the telephone cables strung by them
thereon have become much heavier with the increase in the volume of their subscribers,
worsened by the fact that their linemen bore holes through the posts at which points those
posts were broken during typhoons; that a post now costs as much as P2,630.00;
As second cause of action, private respondent alleged that starting with the year 1981,
petitioners have used 319 posts in the towns of Pili, Canaman, Magarao and Milaor,
Camarines Sur, all outside Naga City, without any contract with it.
And as third cause of action, private respondent complained about the poor servicing by
petitioners of the ten (10) telephone units which had caused it great inconvenience and
damages to the tune of not less than P100,000.00
Ruling:
Article 1267 speaks of "service" which has become so difficult. Taking into consideration the
rationale behind this provision, the term "service" should be understood as referring to the
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"performance" of the obligation. In the present case, the obligation of private respondent
consists in allowing petitioners to use its posts in Naga City, which is the service
contemplated in said article.
Regarding the last issue, petitioners allege that there is nothing purely potestative about the
prestations of either party because petitioner's permission for free use of telephones is not
made to depend purely on their will, neither is private respondent's permission for free use of
its posts dependent purely on its will.
Petitioners' allegations must be upheld in this regard. A potestative condition is a condition,
the fulfillment of which depends upon the sole will of the debtor, in which case, the
conditional obligation is void. Based on this definition, respondent court's finding that the
provision in the contract, to wit:
(a) That the term or period of this contract shall be as long as the party of the first part
(petitioner) has need for the electric light posts of the party of the second part (private
respondent) . . ..is a potestative condition, is correct.
However, it must have overlooked the other conditions in the same provision, to wit:
. . . it being understood that this contract shall terminate when for any reason whatsoever,
the party of the second part (private respondent) is forced to stop, abandoned (sic) its
operation as a public service and it becomes necessary to remove the electric light post…
which are casual conditions since they depend on chance, hazard, or the will of a third
person. 20 In sum, the contract is subject to mixed conditions, that is, they depend partly on
the will of the debtor and partly on chance, hazard or the will of a third person, which do not
invalidate the aforementioned provision.
