FIRST DIVISION

[G.R. No. 19857. March 2, 1923.]

THE ILOILO ICE AND COLD STORAGE COMPANY , petitioner, vs .

PUBLIC UTILITY BOARD , respondent.

John Bordman for petitioner.

Attorney-General Villa-Real for respondent.

SYLLABUS

1. PUBLIC UTILITIES; ACT No. 2694, SECTION 9, construed; "PUBLIC USE,"

THE ILOILO ICE AND COLD STORAGE COMPANY, WHETHER A PUBLIC UTILITY. — The
term "public UTILITY," in this jurisdiction, includes every individual, copartnership,
association, corporation, or joint stock company that now or hereafter may own,
operate, manage, or control, within the plant, or equipment, for public use.
2. ID.; ID.; ID.; ID. — The criterion by which to judge of the character of the use
is whether the public may enjoy it by right or only by permission.
3. ID.; ID.; ID.; ID. — The essential feature of a public use is that it is not
confined to privileged individuals, but is open to the indefinite public.
4. ID.; ID.; ID.; ID. — The use is public if all persons have the right to the use
under the same circumstances.
5. ID.; ID.; ID.; ID. — If an individual, copartnership, association, corporation, or
joint stock company dies, in truth, sell ice to all persons seeking its services, it is a
public utility, But if, on the other hand, the individual, copartnership, association,
corporation, or joint stock company was organized solely for was devoted by its
owners to public use, it could not be held to be a public utility without violating the due
process of law clause of the Constitution.
6. ID.; ID.; ID.; ID. — Held: That upon the facts shown in the record, the Iloilo
Ice and Cold Storage Company is not a public utility within the meaning of the law.
7. ID.; ID.; ID.; ID. — Sympathetic consideration should always be given by the
court to the facts laid before the Public Utility Commissioner and the Public Utility
Board, with reference to the law under which the Commissioner and the Board are
acting.

DECISION

MALCOLM , J : p

This action in certiorari is for the purpose of reviewing a decision of the Public
Utility Commissioner, a rmed by the Public Utility Board, holding that the petitioner,
the Iloilo Ice and Cold Storage Company, is a public utility and, such as, subject to the
control and jurisdiction of the Public Utility Commissioner.
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 The case can be best understood by a consideration of its various phases, under
the following topics: Statement of the issue, statement of the case, statement of the
facts, statement of the law, statement of the authorities, statement of the petitioner's
case, and of the government's case and judgment.
STATEMENT OF THE ISSUE
The issue is whether the Iloilo Ice and Cold Storage Company is a public utility, as
that term is defined by section 9 of Act No. 2694.
STATEMENT OF THE CASE
Francisco Villanueva, jr., secretary of the Public Utility Commission, investigated
the operation of ice plants in Iloilo early in November, 1921. He reported to the Public
Utility Commissioner that the Iloilo Ice and Cold Storage Company should be
considered a public utility, and that, accordingly, the proper order should issue.
Agreeable to the recommendation of Secretary Villanueva, the Public Utility
Commissioner promulgated an order on December 19, 1921, reciting the facts above
mentioned, and directing the Iloilo Ice and cold Storage Company to show cause why it
should not be considered a public utility and as such required to comply with each and
every duty of public utilities provided in Act No. 2307, as amended by Act No. 2694. To
this order, John Bordman, treasurer of the Iloilo Ice and Cold Storage Company,
interposed a special answer, in which it was alleged that the company is, and always
has been, operated as a private enterprise.
Hearing was then had, at which the testimonies of Francisco Villanueva, jr., and of
John Bordman were received. Various exhibits were presented and received in
evidence. Mr. Bordman, as the managing director and treasurer of the company. later
submitted an affidavit.
The Public Utility Commissioner rendered a decision, holding in effect that the
Iloilo Ice and Cold Storage Company was a public utility, and that, accordingly, it should
le in the o ce of the Public Utility Commissioner, a statement of its charges for ice.
This decision was a rmed on appeal to the Public Utility Board. From this last
decision, petitioner has come before this court, asking that the proceedings below be
reviewed, and the decisions set aside.
STATEMENT OF THE FACTS
The petitioner, the Iloilo Ice and Cold Storage Company, Islands in 1908, with a
capital stock of P60,000. Continuously since that date, the company has maintained
and operated a plant for the manufacture and sale of ice in the City of Iloilo. It also does
business to a certain extent in the Provinces of Negros, Capiz, and Antique, and with
boats which stop at the port of Iloilo. At the time its operating in Iloilo. Subsequently,
however, the other plants ceased to operate, so that the petitioner now has no
competitor in the field.
The normal production of ice of the Iloilo Ice and Cold Storage Company is about
3 tons per day. In the month of January, 1922, a total of 83,837 kilos, of ice were sold,
of which 56,400 kilos were on written contracts in the City of Iloilo and adjoining
territory, 14,214 kilos, also on written contract, to steamers calling at the port of Iloilo,
and 13,233 kilos on verbal contracts. Although new machinery has been installed in the
plant, this was merely for replacement purposes, and did not add to its capacity, The
demand for ice has usually been much more than the plant could produce and no effort
has been made to provide sufficient ice to supply all who might apply.
Since 1908, the business of the Iloilo Ice and Cold Storage Company, according
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 to its managing director and treasurer, has been carried or with selected customers
only. Preference, however, is always given to hospitals, the requests of practicing
physicians, and the needs of sick persons. The larger part of the company's business is
perfected by written contracts signed by the parties served, which, in the present form,
includes an agreement that no right to future service is involved.
The coupon books of the company contain on the outside the Following:
"This agreement witnesseth, that The Iloilo Ice and Cold Storage Co. will
furnish the undersigned with ice as indicated herein at the rate of one coupon per
day. These coupons are not transferable. It is further agreed future except by
special agreement.
"Iloilo,______________, 192 _____
(Signed) ______________________
"No. ______"
Cash sales of ice are accomplished on forms reading: "In receiving the ice
represented by this ticket I hereby agree that the Iloilo & Cold Storage Co. is not bound
in future to extend to me further service." A notice posted in the Iloilo store reads: "No
ice is sold to the public by this plant. Purchases can only be made by private contracts."
In August, 1918, all storage facilities were abolished, and resumed in 1920 only with
contracts, a copy of the form at present in use waiting any right to continued service.
On only one point of fact is there any divergence, and this is relatively
unimportant. Secretary Villanueva reported, and the Public Utility Commissioner found,
that the Iloilo Ice and Cold Storage Company sold ice to the public, and advertised its
sale through the papers; while managing director Bordman claims that only once have
the instructions of the board of directors prohibiting public advertising been violated.
STATEMENT OF THE LAW
The original public utility law, Act No. 2307, in its section 14, in speaking of the
jurisdiction of the Board of Public Utility Commissioners, and in de ning the term
"public utility," failed to include ice, refrigeration, and cold storage plants. This
de ciency was, however, remedied by Act No. 2694, enacted in 1917, which amended
section 14 of Act No. 2307, to read as follows:
". . . The term 'public utility' is hereby de ned to include every individual,
copartnership, association, corporation or joint stock company, whether domestic
or foreign, their lessees, trustees or receivers appointed by any court whatsoever,
or any municipality, province or other department of the Government of the
Philippine Islands, that now or hereafter may own, operate, manage or controls
within the Philippine Islands any common carrier, railroad, street railway, traction
railway, steamboat or steamship line, small water craft, such as bancas, virais,
lorchas, and others, engaged in the transportation of passengers and cargo, line
of freight and passenger automobiles, shipyard, marine railway, marine repair
shop, ferry, freight or any other car service, public warehouse, public wharf or dock
not under the jurisdiction of the Insular Collector of Customs, ice, refrigeration,
cold storage, canal, irrigation, express, pipe line, gas, electric light, heat, power,
water, oil, sewer, telephone, wire or wireless telegraph system, plant or equipment,
for public use: Provided, That the Commission or Commissioner shall have no
jurisdiction over ice plants, cold storage plants, or any other kind of public utilities
operated by the Federal Government exclusively for its own and not for public
use." . . .
It will thus be noted that the term "public utility," in this jurisdiction, corporation,
or joint stock company that now or hereafter may own, operate, manage, or control,
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 within the Philippine Islands, any ice, refrigeration, cold storage system, plant, or
equipment, for public use . Particular attention is invited to the last phrase, "for public
use."
STATEMENT OF THE AUTHORITIES
The authorities are abundant, although some of them are not overly instructive.
Selection is made of the pertinent decisions coming from our own Supreme Court, the
Supreme Court of the United States, and the Supreme Court of California.
In the case of United States vs. Tan Piaco ([1920], 40 Phil., 853), the facts were
that the trucks of the defendant furnished service under special agreements to carry
particular persons and property. Following the case of Terminal Taxicab Co. vs. Kutz
([1916], 241 U.S., 252), it was held that since the defendant did not hold himself out to
carry all passengers and freight for all persons who might offer, he was not a public
utility and, therefore, was not criminally liable for his failure to obtain a license from the
Public Utility Commissioner. It was said:

"Under the provisions of said section, two things are necessary: (a) The
individual, copartnership, etc., etc., must be a public utility; and (b) the business in
which such individual, copartnership, etc., etc., is engaged must be for public use.
So long as the individual or copartnership, etc., etc., is engaged in a purely private
enterprise, without attempting to render service to all who may apply, he can in no
sense be considered a public utility, for public use.
" 'Public use' means the same as 'use by the public.' The essential feature
of the public use is that it is not con ned to privileged individuals, but is open to
the inde nite public. It is this inde nite or unrestricted quality that gives it its
public character. In determining whether a use is public, we must look not only to
the character of the business to be done, but also to the proposed mode of doing
it. If the use is merely optional with the owners, or the public bene t is merely
incidental, it is not a public use, authorizing the exercise of the jurisdiction of the
public utility commission. There must be, in general, a right which the law
compels the owner to give to the general public. It is not enough that the general
prosperity of the public is promoted. Public use is not synonymous with public
interest. the true criterion by which to judge of the character of the use is whether
the public may enjoy it by right or only by right or only by permission."
In the decision of the Supreme Court of the United States in Terminal Taxicab vs.
Kutz, supra, it was held: "A taxicab company is a common carrier within the meaning of
the Act of March 4, 1913 (37 Stat. at L., 938, chap. 150), sec. 8, and hence subject to
the jurisdiction of the Public Utilities Commission of the District of Columbia as a
'public utility' in respect of its exercise of its exclusive right under lease from the
Washington Terminal Company, the owner of the Washington Union Railway Station, to
solicit livery and taxicab business from persons passing to or from trains, and of its
business which consists in furnishing automobiles from its central garage on individual
orders, generally by telephone, cannot be regarded as a public utility, and the rates
charged for such service are therefore not open to inquiry by the Commission." Mr.
Justice Holmes, delivering the opinion of the court, in part said:
"The rest of the plaintiff's business, amounting to four tenths, consists
mainly in furnishing automobiles from its central garage on orders, generally by
telephone. It asserts the right to refuse the service, and no doubt would do so if
the pay was uncertain, but it advertises extensively solvent customer. Still, the
bargains are individual, and however much they may tend towards uniformity in
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 price, probably have not quite the mechanical xity of charges that attends the
use of taxicabs from the station and hotels. There is no contract with a third
person to serve the public generally. The question whether, as to this part of its
business, it is an agency for public use within the meaning of the statute, is more
di cult . . . the court is of opinion that this part of the business is not to be
regarded as a public utility. It is true that all business, and, for the matter of that,
every life in all its details, has a public aspect, some bearing upon the welfare of
the community in which it is passed. But, however it may have been in earlier
days as to the common callings, it is assumed in our time that an invitation to the
public to buy does not necessarily entail an obligation to sell. It is assumed that
an ordinary shopkeeper may refuse his wares arbitrarily to a customer whom he
dislikes, and although that consideration is not conclusive (233 U.S., 407), it is
assumed that such a calling is not public as the word is used. In the absence of
clear language to the contrary it would be assumed that an ordinary livery stable
stood on the same footing as a common shop, and there stood on the same
footing as a common shop, and there seems to be no difference between the
plaintiff's service from its garage and that of a livery stable. It follows that the
plaintiff is not bound to give information as to its garages rates."
The Supreme Court of California in the case of Thayer and Thayer vs. California
Development Company ([1912], 164 Cal., 117), announced, among other things, that the
essential feature of a public use is that "it is not con ned to privileged individual, but is
open to the inde nite public. It is this inde niteness or unrestricted quality that gives it
its public character." Continuing, reference was made to the decision of the United
States Supreme Court in Fallbrook Irrigation District vs. Bradley ([1896], 164 U.S., 161),
where the United State Supreme Court considered the question of whether or not the
water belonging to an irrigation district organized under the California statute of 1887,
and acquired for and applied to its authorized used and purpose, was water dedicated
to a public use. Upon this question, the Supreme Court on appeal said:
"The fact that the use of the water is limited to the landowner is not
therefore a fatal objection to this legislation. It is not essential that the entire
community, or even any considerable portion thereof, should directly enjoy or
participate in an improvement in order to constitute a public use. All landowners
in the district have the right to a proportionate share of the water, and no one
landowner is favored above his fellow in his right to the use of the water. It is not
necessary, in order that the use should be public, that every resident in the district
should have the right to the use of the water. The water is not used for general,
domestic, or for drinking purposes, and it is plain from the scheme of the act that
the water is intended for the use of those who will have occasion to use it on their
lands . . . We think it clearly appears that all who by reason of their ownership of
or connection with any portion of the lands would have occasion to use the water,
would in truth have the opportunity to use it upon the same terms as all others
similarly situated, is public because all persons have the rights to use the water
under the same circumstances. This is sufficient."
The latest pronouncement of the United States Supreme Court here available is
found in the case of producers Transportation Company vs. Railroad Commission of
the State of California ([1920], 251 U.S., 228). Mr. Justice Van Devanter, delivering the
opinion of the court, in part said:
"It is, of course, true that if the pipe line was constructed solely to carry oil
for particular producers under strictly private contracts and never was devoted by
its owner to public use, that is, to carrying for the public, the State could not by
mere legislative at or by any regulating order of a commission convert it into a
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 public utility or make its owner a common carrier; for that would be taking private
property for public use without just compensation, which no State can do
consistently with the due process of law clause of the Fourteenth Amendment . . .
On the other hand, if in the beginning or during its subsequent operation the pipe
line was devoted by its owner to public use, and if the right thus extended to the
public has not been withdrawn, there can be no doubt that the pipe line is a public
utility and its owner a common carrier whose rates and practices are subject to
public regulation. Munn vs. Illinois, supra.
"The state court, upon examining the evidence, concluded that the
company voluntarily had devoted the pipe line to the use of the public in
transporting oil, and it rested this conclusion upon the grounds . . . that, looking
through the maze of contracts, agency agreements and the like, under which the
transportation was effected, subordinating form to substance, and having due
regard to the agency's ready admission of new members and its exclusion of
none, it was apparent that the company did in truth carry oil for all producers
seeking its service, in other words, for the public. (See Pipe Line Cases, 234 U.S.,
548.)"
Lastly, we take note of the case of Allen vs. Railroad Commission of the State of
California ([1918], 179 Cal., 68; 8 A. L. R., 249). It was here held that a water company
does not, by undertaking to furnish a water supply to a municipality which will require
only a small percentage of its product, become a public utility as to the remainder,
which it sells under private contracts. The court observed that its decisions fully
recognize that a private water company may be organized to sell water for purposes of
private gain, and that in so doing, it does not become a public utility. "To hold that
property has been dedicated to a public use," reads the opinion, "is not a trivial thing,
and such dedication is never presumed without evidence of unequivocal intention."
Continuing, the court discusses what is a public utility in the following language:
"What is a public utility, over which the state may exercise its regulatory
control without regard to the private interests which may be affected thereby? In
its broadest sense everything upon which man bestows labor for purposes other
than those for the bene t of his immediate family is impressed with a public use.
No occupation escapes it, no merchant can avoid it, no professional man can
deny it. As an illustrative type one may instance the butcher. He deals with the
public; he invites and is urgent that the public should deal with him. The character
of his business is such that, under the police power of the state, it may well be
subject to regulation, and in many places and instances is so regulated. The
preservation of cleanliness, the inspection of meats to see that they are
wholesome, all such matters are within the due and reasonable regulatory powers
of the state or nation. But these regulatory powers are not called into exercise
because the butcher has devoted his property to public service so as to make it a
public utility. He still has the unquestioned right to x his prices; he still has the
unquestioned right to say that he will or will not contract with any member of the
public. What differentiates all such activities from a true public utility is this, and
this only: That the devotion to public use must be of such character that the
public generally, or that part of it which has been served and which has accepted
the service, has the right to demand that service shall be conducted, so long as it
is continued, with reasonable e ciency under reasonable charges. Public use,
then, means the use by the public and by every individual member of it, as a legal
right."
STATEMENT OF THE PETITIONER'S CASE AND OF THE GOVERNMENT'S CASE
Petitioner contends on the facts, that the evidence shows that the petitioner is
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 operating a small ice plant in Iloilo; that no attempt has been made to supply the needs
of all who may apply for accommodation or to expand the plant to meet all demands;
that sales have been made to selected customers only, and that the right has been
freely exercised to refuse sales not only to whole districts, but constantly to individuals
as well; that the greater portion of the business is conducted through signed contracts
with selected individuals, and on occasions, when there is a surplus, the same is sold
for cash to selected applicants; that no sales are made except to persons who have
waived all claim of right to similar accommodation in the future; and that no offer,
agreement, or tender of service to the public has ever been made. Petitioner contends,
as to the law, that the decisions heretofore referred to are controlling.
The Government has no quarrel with the petitioner as to the facts. But the
Attorney-General attempts to differentiate the authorities from the instant situation.
The Attorney-General also argues that to sanction special contracts would "open a
means of escape from the application of the law."
The result is, therefore, that we have substantial agreement between the
petitioner and the government as to the issue, as to the facts, as to the law, and as to
the applicable authorities. The question, however, remains as puzzling as before.
Planting ourselves on the authorities, which discuss the subject of public use, the
criterion by which to judge of the character of the use is whether the public may enjoy it
by right or only by permission. (U.S. vs. Tan Piaco, supra.) The essential feature of a
public use is that it is not con ned to privileged individuals, but is open to the inde nite
public. (Thayer and Thayer vs. California Development Company, supra.) The use is
public if all persons have the right to the use under the same circumstances. (Fall brook
Irrigation District vs. Bradley, supra.) If the company did in truth sell ice to all persons
seeking its service, it would be a public utility. But if on the other hand, it was organized
solely for particular persons under strictly private contracts, and never was devoted by
its owners to public use, it could not be held to be a public utility without violating the
due process of law clause of the Constitution. (Producers Transportation Co. vs.
Railroad Commission, supra.) And the apparent and continued purpose of the Iloilo Ice
and Cold Storage Company has been, and is, to remain a private enterprise and to avoid
submitting to the Public Utility law.
The argument for the Government, nevertheless, merits serious consideration.
The attempt of the Public Utility Commissioner to intervene in corporate affairs, to
protect the public, is commendable. Sympathetic thought should always be given to the
facts laid before the Commissioner, with reference to the law under which he is acting.
Aware of the foregoing situation, the members of the Court are of the opinion
that the present case is governed by the authorities mentioned in this decision, which
means, of course, that, upon the facts shown in the record, the Iloilo Ice and Cold
Storage Company is not a public utility within the meaning of the law. Like Mr. Justice
Holmes, in his opinion in Terminal Taxicab Company vs. Kutz, supra, when, in speaking
for himself personally, he admitted that he had not been able to free his mind from
doubt, so has the writer not been able to free his mind from doubt, but is nally led to
accept the authorities as controlling.
JUDGMENT
It is declared that the business of the Iloilo Ice and Cold Storage Company is not
a Public Utility Commissioner, and that, accordingly, the decisions of the Public Utility
Commissioner and of the Public Utility Board must be revoked, without special nding
as to costs. So ordered.
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 Araullo, C.J., Street, Avanceña, Johns and Romualdez, JJ., concur.

Separate Opinions
OSTRAND , J., concurring :

I concur in the result on the ground that an ice plant is not a public utility by
common law, but is only made so by statute; that in the present case the plant existed
in approximately its present form and as, in a then legal sense, a private enterprise,
before the statute making such plants public utilities was enacted; and that under these
circumstances to deprive the owner of a part of the control over his property amounts
to a taking of property without compensation and without due process of law, and
cannot be regarded as being within the police power of the State.
I nd it di cult to agree to the proposition that an ice plant, the product of which
is not intended primarily for the use of the owners thereof but for general consumption,
is for private use, merely, and not for "public use" within the meaning of Act No. 2307,
the Public Utilities Act. The fact that sales of ice are made under special contracts and
that some individuals have been denied the privilege of purchasing cannot alter the fact
that the plant is designed to supply the trade and to serve the public as far s the
quantity of ice produced permits and the purchasers are acceptable. To hold that a
utility of a public character can escape regulatory control by the simple expedient of
arbitrarily excluding a limited number of persons from the enjoyment of its bene ts and
by posting notices to the effect that it does not deal with the public, will seriously
impair the e cacy of the Public Utilities Act. I think a tendency may be discerned in
later decisions to give the expression "public use" a broader signi cance than that given
it by the earlier authorities.

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