LAGUNA TAYABAS BUS COMPANY, PLAINTIFF AND APPELLANT, VS. PROVINCE OF LAGUNA AND THE PROVINCIAL TREASURER OF LAGUNA, DEFENDANTS AND APPELLEES.

Plaintiff seeks to recover from the province of Laguna the sum of P53,657.75
as toll fees claimed to have been illegally collected for the use of the Lumban
bridge from February 26, 1948 to July 31, 1949, or, as an alternative prayer,
the refund of 50% of the toll fees paid during the same period in the amount of
P26,828.87.

The action was filed before the Court of First Instance of Laguna where,
after due trial, judgment was rendered upholding the validity of the collection
of the toll fees by the province and dismissing the complaint. The case is now
before us on appeal in view of the amount involved and the nature of the issues
raised by the parties.

Sometime in 1930 the province of Laguna constructed the Lumban brigde with
funds raised through bonds floated under its liability. The bridge was
constructed on a portion of the Calamba-Sta. Cruz-Famy junction road which was
declared a national road by the Chief Executive (Executive Order No. 71, series
of 1936, as amended by Executive Order No. 311, series of 1940). During the war
the bridge was destroyed and only the two concrete abutments, one on each side
of the river, and two concrete middle piers, were left standing. In view of such
destruction and the necessity of constructing another one to replace it,
Congressman Estanislaa Fernandez made representation to the Secretary of Public
Works and Communications requesting that such aid be extended inasmuch as at
that time the provincial government of Laguna was not in a position to build a
new bridge or reconstruct the old one. His efforts were rewarded when the
national government agreed to put up a bailey bridge using the concrete
abutments and piers of the old bridge.

Soon after the construction of the bailey bridge, the Provincial Board of
Laguna approved on October 1, 1947 Resolution No. 750 fixing the toll fees to be
paid for the use of said bridge, and, on November 25, 1947, the Secretary of
Public Works and Communications approved said resolution under the authority
granted him by section 2131 of the Revised Administrative Code.

Before the approval of said Resolution No. 750 by the Secretary of Public
Works and Communications, plaintiff requested the Provincial Treasurer of Laguna
to revive a pre-war arrangement whereby the company used to make and advance
deposit to cover the estimated amount of the toll fees for the ensuing month and
the defendant, in consideration of such deposit, used to give the company a
discount of 40 per cent. Acting on this request, the Provincial Board of Laguna
approved Resolution No. 820 on November 5, 1947 granting the company a reduction
of 25 per cent effective November 16, 1947.

The proposed reduction was, however, found unacceptable by the Department of
Public Works and Communications on the ground that it would only benefit one
operator and would be discriminatory against the others, and so, said
Department, in an indorsement to the Director of Public Works on November 25,
1947, suggested the advisability of making a general reduction of the toll fees
to be charged for the use of the bridge. Accordingly, on February 20, 1948, the
Director of Public Works recommended a reduction of 50 per cent of the toll
fees, and this recommendation was approved by the Secretary of Public Works and
Communications on April 21, 1948. The correspondence on the matter was
transmitted, through the District Engineer, to the Provincial Treasurer of
Laguna by the Director of Public Works in an indorsement dated February 24,
1948, with the request that, upon receipt thereof, the reduction of the toll
fees be made effective.

Inasmuch as the proposed toll reduction would seriously impair the finances
of the province of Laguna which at that time was still hamstrung by its,
obligation under the bond issue and believing that the belated claim of
ownership of the brige by the national government would deprive the province of
its property without due process of law, unless it carries with it an assurance
that it would be relieved of its indebtedness under the bond, the Provincial
Board of Laguna, in a resolution approved on March 6, 1948, declined to accept
the proposed reduction of the toll fees. So that until July 31, 1949, the
province of Laguna continued collecting the toll fees prescribed in its original
resolution instead of the reduced rates as recommended by the Director of Public
Works.

The Secretary of Public Works and Communications, in an indorsement dated
March 17, 1949 to the Secretary of Interior, informed the latter of the history
of the bridge as well as the claim of ownership by the province of Laguna, and
its refusal to adopt the reduced rates, requesting at the same time that it make
use of its good offices to have the province agree to the reduced rates approved
by the Department of Public Works adn Communications. The Secretary of Interior
acceded to the request and, accordingly, suggested to the Provincial Board of
Laguna that it “adopt the reduced toll rates as recommended by the Department of
Public Works and Communications, without prejudice to future revision should
circumstances warrant increasing the toll rates again.”

After a round of correspondence exchanged between the Secretary of Public
Works and Communications, the Provincial Board of Laguna, the Secretary of
Interior, and the Office of the President, the Provincial Board of Laguna
approved Resolution No. 556 on August 3, 1949, in which, after quoting the
opinion of the Executive Secretary that the bridge in question belongs to the
national government and should be administered by the Department of Public Works
and Communications, it resolved to turn over the bridge to said Department on
August 1, 1949 and to make effective the reduced toll fees as of said date.

As an aftermath of the letter of the Executive Secretary declaring the bridge
to be the property of the national government and requiring the province of
Laguna to agree to the toll feea reduced by the Secretary of Public Works and
Communications, the plaintiff demanded from the province the refund of one-half
of the toll fees it paid from February 26, 1948 to July 31, 1949 which, as was
later increased, amount to P53,657.75. And when this demand was refused,
plaintiff instituted the present action.

It should be stated, in passing, that acting on an indorsement of the
Secretary of Public Works and Communications dated September 3, 1949, the
President of the Philippines issued Executive Order No. 552 on August 7, 1952
declaring the disputed bridge to be national and directing that the toll fees as
reduced by said Department be collected effective as of August 1, 1949.

The present appeal poses the following issues: (1) Since the bailey bridge
was declared to be a national bridge, is the collection of toll fees for its use
in pursuance of Resolution No. 750 of the Provincial Board of Laguna approved on
October 1, 1947 valid and legal?; and (2) Is the plaintiff entitled to the
refund of the toll fees paid by it to the province during the period from
February 26,1948 to July 31,1949 amounting to P53,567.75, or at least to the
refund of one-half thereof in line with the reduced rates proposed by the
Director of Public Works?

With regard to the first issue, it is true that the Lumban bailey bridge was
declared to be one belonging to the national government by the Office of the
President on July 13, 1949, following the controvery between the province of
Laguna and the Department of Public Works and Communications over the ownership
of said bridge, and that this view was later ratified by the Chief Executive
when he issued Executive Order No. 552 on August 7, 1952. But it should be noted
that that official declaration only came on August 7, 1952 and was made
effective only as of August 1, 1949, it being apparently the intention to leave
in its status quo the situation of the bridge concerning the collection
of toll fees prior to said date of August 1, 1949.

A factor that should be considered in the determination of this question is
the fact that the Lumban bridge was originally constructed by the province in
1930 with funds raised through a bond issue under its liability, and that when
said bridge was destroyed it was replaced by the present bailey bridge through
the accommodation extended by the national government. This gave the province
the impression that the newly reconstructed bridge merely took the place of the
original and as such it continued to be subject to the same in lien as regards
the collection of toll fees in order to enable the province to discharge its
obligation under the bond. And in keeping with this view, the Provincial Board
of Laguna approved on October 1, 1947 its Resolution No. 750 and assumed, with
the approval, of the national government, the administration and operating of
said bridge by collecting toll fees, appointing the necessary personnel and
fixing their salaries. This impression was further bolstered up when Resolution
No. 750 was approved by the Secretary of Public Works and Communications thereby
considering the bridge as provincial under section 2131 of the Revised
Administrative Code. In fact, the national government allowed the province of
Laguna to collect said fees mainly to help it pay its bonded indebtedness, as
can be gleaned from the following portion of the letter of the Director of
Public Works: “If the present Lumban Bailey Bridge was declared a toll bridge
under Section 2131 of the Revised Administrative Code, as amended, this office
was prompted by no other purpose than to (give accommodation to the province so
that she may be able to pay back her bonded indebtedness.” (Exhibit E-3)

It can, therefore, be said that, while the Liimban bailey bridge was declared
a national bridge by the Chief Executive in an executive order issued on August
7, 1952, the collection of the toll fees prior to August 1, 1949 was always
considered valid, the same having been made under section 2131 of the Revised
Administrative Code.

The second issue is but a corollary to the first. If we hold, as we now do
that the province of Laguna was allowed by the national government to operate
the present Lumban bridge mainly “for purposes of collection of toll fees” and
that it was only on August 7, 1952 that it was officially declared a national
bridge in view of the controversy that developed between the province of Laguna
and the Department of Public Works and Communications regarding its ownership,
it follows as a necessary consequence that the collection made by the province
of the toll fees during the period from February 26, 1948 to July 31, 1949 is
valid and legal, it having been made in pursuance of a resolution duly approved
by the Secretary of Public Works and Communications. This is a substantial
compliance with Section 2131 of the Revised Administrative Code. And under this
theory, plaintiff cannot even recover the one-half reduction of what it had paid
in view of Executive Order No. 552 which makes such reduction effective only as
of August 1, 1949.

It is true that the Executive Secretary, in his letter to the Provincial
Board of Laguna, intimated his desire that the toll rates as reduced by the
Secretary of Public Works and Communications be followed, but he did not
indicate therein that the collection should be given retroactive effect. That
his intention was not to give to the reduction a retroactive effect may be seen
from Executive Order No. 552 which specifically directs that the reduced toll
fees be collected only as of August 1, 1949. If the intention were otherwise,
the President would have followed to the letter the recommendation of the
Director of Public Works. But, as it appears, he followed instead the
recommendation of the Provincial Board of Laguna in its Resolution No. 556 that
the reduced toll fees bte made effective as of August 1, 1959.

We find, therefore, no other alternative than to hold that the toll fees
collected by the province of Laguna before August 1, 1949 were collected in
accordance with law.

Wherefore, the decision appealed from is affirmed, with costs against
appellant.

Padilla, Montemayor, Reyes, A., Jugo, Labrador, Concepcion and
Reyes, J.B.L., JJ., concur.

Judgment affirmed.