VICTORIAS MILLING CO., INC., PETITIONER, VS. OFFICE OF THE PRESIDENTIAL ASSISTANT FOR LEGAL AFFAIRS AND PHILIPPINE PORTS AUTHORITY, RESPONDENTS.

Victorias Milling versus Office of the Presidential Assistant for Legal Affairs

The Case

This is a petition for review on certiorari brought by Victorias Milling Company against the Office of the Presidential Assistant for Legal Affairs and the Philippine Ports Authority. Victorias Milling asks the Supreme Court to set aside the decision of the Office of the Presidential Assistant for Legal Affairs, which dismissed its appeal from a ruling of the Philippine Ports Authority on the sole ground that the appeal was filed beyond the reglementary period. The case matters because it settles two things a reviewee must carry into the examination room: that administrative rules issued pursuant to a valid delegation have the force and effect of law, and that the right to appeal is a mere statutory privilege that must be exercised in the manner and within the period fixed by law.

Procedural History

The dispute began when the Iloilo Port Manager of the Philippine Ports Authority demanded that Victorias Milling pay harbor fees and secure a permit for cargo handling. Victorias Milling protested in two letters, and the Authority denied reconsideration. Victorias Milling then filed a petition for review with the Court of Tax Appeals. The Court of Tax Appeals dismissed the action for lack of jurisdiction and recommended that the appeal be addressed to the Office of the President. Victorias Milling next filed a petition for review with the Supreme Court, which was denied. Victorias Milling then filed an appeal with the Office of the President, but that office denied the appeal on the sole ground that it was filed beyond the reglementary period, and it likewise denied the motion for reconsideration. Hence this petition for review on certiorari before the Supreme Court, which gave the petition due course and required the parties to file their respective memoranda.

Facts

On April 28, 1981, the Iloilo Port Manager of the Philippine Ports Authority wrote Victorias Milling, requiring its tugboats and barges to undergo harbor formalities and to pay entrance and clearance fees as well as berthing fees effective May 1, 1981. The Authority also required Victorias Milling to secure a permit for cargo handling operations at its Da-an Banua wharf and to remit ten percent of its gross income from those operations as the government's share.

Victorias Milling sent two letters, both dated June 2, 1981, insisting that it was exempt from paying any fee or charge. It argued that the wharf and all its facilities were built and installed on its own land, that repair and maintenance were paid solely by it, that even the dredging and maintenance of the Malijao River Channel were done by its own equipment and personnel, and that the government had never spent a single centavo for such activities. It added that the wharf was used mainly to handle sugar purchased from district planters under existing milling agreements.

On November 3, 1981, the Authority sent a memorandum justifying its demands, and a further request for reconsideration was denied on January 14, 1982. Victorias Milling then served notice that it was appealing to the Court of Tax Appeals and filed its petition for review there. After that court dismissed the action for lack of jurisdiction, and after the Supreme Court denied its petition, Victorias Milling filed its appeal with the Office of the President, which was dismissed as late.

Issues

• Whether or not the thirty-day period for appeal under Section 131 of Philippine Ports Authority Administrative Order Number 13-77 was tolled by the pendency of the petitions filed first with the Court of Tax Appeals and then with the Supreme Court.
• Whether or not the Philippine Ports Authority may validly impose the questioned fees and charges, including the ten percent share, even though the wharf is privately owned and maintained.

Applicable Provisions

Section 6 of Presidential Decree Number 857 provides:

Sec. 6. Corporate Powers and Duties. a. The corporate duties of the Authority shall be: (III) To prescribe rules and regulations, procedures, and guidelines governing the establishment, construction, maintenance, and operation of all other ports, including private ports in the country.

This is the delegation that authorized the Authority to promulgate Administrative Order Number 13-77, including its rule on appeals.

Section 131 of Philippine Ports Authority Administrative Order Number 13-77 provides:

Sec. 131. Supervisory Authority of General Manager and PPA Board. - If in any case involving assessment of port charges, the Port Manager/OIC renders a decision adverse to the government, such decision shall automatically be elevated to, and reviewed by, the General Manager of the authority; and if the Port Manager's decision would be affirmed by the General Manager, such decision shall be subject to further affirmation by the PPA Board before it shall become effective; Provided, however, that if within thirty (30) days from receipt of the record of the case by the General Manager, no decision is rendered, the decision under review shall become final and executory; Provided further, that any party aggrieved by the decision of the General Manager as affirmed by the PPA Board may appeal said decision to the Office of the President within thirty (30) days from receipt of a copy thereof.

This is the very provision whose thirty-day period the petitioner claims was tolled, and which the Court reads as granting the right of appeal to any party aggrieved, not only to the government.

Section 6b-(ix) of Presidential Decree Number 857 provides:

To levy dues, rates, or charges for the use of the premises, works, appliances, facilities, or for services provided by or belonging to the Authority, or any organization concerned with port operations.

This is the authority for the ten percent share exacted from cargo handling operators.

Ruling

On the first issue, the Court held that the petition is devoid of merit. The pendency of the petitions before the Court of Tax Appeals and then before the Supreme Court did not toll the thirty-day period. While neither Presidential Decree Number 505 nor Presidential Decree Number 857 expressly provides for an appeal to the Office of the President, Presidential Decree Number 857 empowers the Authority to promulgate rules to accomplish its purposes, and pursuant to that power the Authority enacted Administrative Order Number 13-77. The Court ruled that administrative rules and regulations issued in accordance with law have the force and effect of law and are binding on all persons dealing with the body.

The Court also rejected the argument that Section 131 provides for appeal only when the decision is adverse to the government. A cursory reading shows that any party aggrieved by the decision of the General Manager as affirmed by the Board may appeal to the Office of the President within thirty days. On the claim of non-publication, the Court noted that the Order was published in full in a nationwide newspaper on November 9, 1977. The Court further found that the failure to appeal on time stemmed entirely from the petitioner's own negligence, since it had been aware of the rules governing the Authority's procedures. It laid down the governing principle that the right to appeal is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of law.

On the second issue, the Court held that even if the appeal were given due course, the result would be the same, because the petitioner does not present a substantially meritorious case. The fees and charges are collected not for the use of the wharf that the petitioner owns but for the privilege of navigating in public waters, of entering and leaving public harbors, and of berthing on public streams or waters. Berthing charges against a vessel are collectible regardless of the fact that mooring or berthing is made from a private pier or wharf, because the government maintains bodies of water in navigable condition. As to the ten percent share, the Court held that it is in the nature of contractual compensation to which a person desiring to operate arrastre service must agree as a condition to the grant of the permit to operate.

Doctrine

First, administrative rules and regulations issued in accordance with law have the force and effect of law and are binding on all persons dealing with the administrative body. Second, the right to appeal is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of law. Third, the pendency of a petition filed before a court that later declares itself without jurisdiction does not toll the period fixed by the applicable rule for appealing to the proper office. Fourth, port dues and berthing charges are collectible regardless of whether the vessel moors at a private pier or wharf, because they are exacted for the privilege of navigating public waters, which the government maintains in navigable condition.

Disposition

The Supreme Court dismissed the petition, and the dismissal of the appeal by the Office of the Presidential Assistant for Legal Affairs was left standing.

Remember This

Memorize the line that the right to appeal is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of law. Examiners use this case to test the force and effect of administrative regulations and the rule that a mistaken recourse to a court without jurisdiction does not toll the period to appeal to the proper office.