Case Digest (G.R. No. 135639)
Facts:
Terminal Facilities and Services Corporation v. Philippine Ports Authority and Port Manager, and Port District Officer of Davao City, G.R. Nos. 135639 and 135826, February 27, 2002, the Supreme Court Second Division, De Leon, Jr., J., writing for the Court.The dispute arose from TEFASCO’s proposal (circa 1975) to build and operate a specialized private terminal in Davao City to relieve congestion at government ports. The project was accepted by the PPA Board in Resolution No. 7 (April 21, 1976). PPA’s May 7, 1976 letter to TEFASCO and an attached “Terms and Conditions” specified the facilities TEFASCO would build and certain obligations; TEFASCO thereafter obtained foreign financing and expended substantial sums to construct the terminal and its specialized equipment.
After construction began and operations commenced, PPA issued subsequent instruments that imposed additional conditions not found in the original acceptance. These included an October 1, 1976 Resolution requiring a formal Permit to Construct and a June 10, 1978 Special Permit (No. CO/CO-1-067802) that for the first time manifested provisions for a government share (initially 10%) of arrastre/stevedoring income and for PPA to collect 100% of wharfage and berthing charges on cargoes and vessels using TEFASCO’s private wharf. Later administrative issuances (Admin. Order 09-81; Memo. Circ. 36-82) reinforced similar exactions.
TEFASCO protested repeatedly, received a PPA “cease and desist” communication in 1983, and ultimately executed a pressured Memorandum of Agreement (MOA) on February 10, 1984 recognizing arrears and reducing the government share to 6% but exposing TEFASCO to withdrawal of permits upon default. Under protest, TEFASCO paid sums required by PPA.
On August 30, 1988 TEFASCO sued PPA and PPA officials in the RTC (Civil Case No. 19216-88) seeking refund of unlawfully collected “government share,” nullification of the MOA and PPA issuances, and damages for the illegal imposition of 100% wharfage and berthing fees. The RTC, Branch 17, Davao City, in a July 15, 1992 decision ruled largely for TEFASCO: it nullified the MOA and PPA issuances modifying Resolution No. 7 and awarded reimbursement of government share, awards for lost wharfage and berthing fees, dredging/blasting expenses, moral damages, attorneys’ fees, and 12% interest.
PPA appealed to the Court of Appeals, which initially reversed in toto (CA Decision July 31, 1997) but upon TEFASCO’s motion for reconsideration issued an Amended Decision (Special Second Division, Sept. 30, 1998) that declared the 100% wharfage and berthing fees unenforceable under P.D. No. 857 unless presidentially approved, found them discriminatory, and ordered PPA to pay TEFASCO (1) P15,810,032.07 representing fifty percent (50%) wharfage dues and P3,961,964.06 representing thirty percent (30%) berthing fees for 1977–1991 (what TEFASCO could have earned), and (2) P500,000.00 attorneys’ fees. No costs pronouncement was made.
Both parties filed petitions for review in the Supreme Court: TEFASCO (G.R. ...(Pro-only)
Issues:
- Does TEFASCO have standing to recover overpayments and fees collected by PPA from TEFASCO’s clientele?
- Did the authorization embodied in the PPA documents (Inter-Agency Report, PPA Resolution No. 7, May 7, 1976 letter and enclosure) constitute a binding contract or merely a revocable regulatory privilege?
- Were PPA’s impositions of one hundred percent (100%) wharfage dues and berthing charges valid under the Tariff and Customs Code and P.D. No. 857?
- Were the awards of fifty percent (50%) of wharfage dues and thirty percent (30%) of berthing charges as actual damages to TEFASCO for 1977–1991 properly awarded and supported by evidence?
- Was the imposition and collection of a government share (initially 10%, later 6%) on TEFASCO’s arrastre and stevedoring gross income lawful, and was the February 10, 1984 MOA valid? ...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)