Aboitiz Shipping Corporation vs. City of Cebu

The right to collect wharfage dues is based on ownership of the wharf, and a municipal corporation's charter authority to fix charges for use of "public wharves" extends only to wharves constructed and owned by the city, not to those owned by the National Government.

Fourteen shipping corporations operating vessels that docked at piers in Cebu City brought suit against the City of Cebu, its City Treasurer Felipe Pareja, and Mayor Sergio Osmeña, Jr. The piers at issue were public wharves owned and maintained by the National Government, under the exclusive control, direction, and management of the Bureau of Customs pursuant to Section 1142 of the Revised Administrative Code. The shipping companies had been paying wharfage fees to the National Government under Republic Act No. 1371 (later embodied in the Tariff and Customs Code). The dispute arose when the City of Cebu, acting through its Municipal Board, enacted Ordinance No. 207 purporting to impose additional wharfage charges on the same vessels, effectively requiring shipowners to pay twice for the same use.

Fourteen shipping corporations — including Aboitiz Shipping Corporation, Carlos A. Go Thong & Company, Cebu Navigation Company, Inc., and others — operated vessels that docked at piers located in Cebu City. These piers were public wharves owned by the National Government and maintained under the exclusive control, direction, and management of the Bureau of Customs pursuant to Section 1142 of the Revised Administrative Code. The shipping companies had accordingly been paying wharfage fees to the National Government under Republic Act No. 1371, which took effect on July 1, 1955, and was later embodied in the new Tariff and Customs Code.

On August 14, 1956, the Municipal Board of Cebu City purportedly enacted Ordinance No. 207, which was approved by the City Mayor on August 27, 1956. The ordinance provided for the collection of wharfage charges from all watercraft landing at or using public wharves, docks, levees, or landing places within the city. The appellees justified the ordinance under Section 17(w) of the City of Cebu's charter, Commonwealth Act No. 58, which authorized the Municipal Board to fix the charges to be paid by all watercrafts landing at or using public wharves, docks, levees, or landing places.

Beginning September 1, 1956, the plaintiffs paid the wharfage charges imposed under the ordinance under protest. On May 8, 1957, they filed an action in the Court of First Instance of Manila to have Ordinance No. 207 declared void, to enjoin its enforcement insofar as wharves, docks, and other landing places belonging to the National Government were concerned, and to obtain a refund of all amounts collected. The plaintiffs also raised factual questions regarding whether the ordinance was actually enacted on August 14, 1956 as alleged, pointing to certain events and circumstances casting doubt on that date. The Supreme Court declined to resolve these factual issues, however, as the case could be decided solely on the legal question presented.

The Court of First Instance of Manila dismissed the complaint after trial, ruling that the term "public wharves" in Section 17(w) of the city charter made no distinction between wharves owned by the National Government and those owned by the City of Cebu, and that both therefore fell within the scope of the power granted. The lower court further ruled that Section 17(w) was "plainly evincive of the power to tax for revenue purposes," and that the wharfage charges were proper even if the amounts collected exceeded what might be justified as license fees under the police power of regulation granted under Section 17(l) of the same charter. The plaintiffs appealed to the Supreme Court.

• Meaning of "Public Wharf": Petitioners argued that the generally accepted meaning of "public wharf" refers to the nature of its use — availability to the public — rather than to its ownership by the National Government or by a municipality, and that consequently the city charter's use of the term did not authorize the city to collect wharfage from wharves it did not own.
• Statutory Construction of the Charter: Petitioners maintained that Section 17(w) of the city charter must be read in context with the immediately preceding subsection (v) and with Section 30, which together indicated that the term "public wharves" referred only to those constructed and owned by the City of Cebu, not those belonging to the National Government.
• Double Taxation: Petitioners contended that it was unreasonable to conclude that the legislature intended to burden shipowners with the obligation of paying wharfage twice — once to the National Government and again to the City of Cebu — for the same use of the same wharves.
• Validity of Ordinance Enactment: Petitioners raised factual questions pointing to certain events and circumstances to show that Ordinance No. 207 was not and could not have been enacted on August 14, 1956 as alleged by appellees.

• No Ownership Distinction in the Charter: Respondents argued that in using the terms "public wharves, docks, levees, or landing places" in Section 17(w), the legislature made no distinction between those owned by the National Government and those owned by the City of Cebu, and that consequently both fell within the scope of the power granted to the Municipal Board.
• Power to Tax for Revenue: Respondents contended that Section 17(w) was "plainly evincive of the power to tax for revenue purposes," and that the wharfage charges imposed by the ordinance were proper even if the amounts collected exceeded what might be justified as license fees under the police power of regulation granted under Section 17(l) of the charter.

• Authority to Impose Wharfage on National Government-Owned Wharves: Whether the City of Cebu, under Section 17(w) of its charter (Commonwealth Act No. 58), may impose wharfage charges on shipping concerns whose vessels dock at public wharves owned by the National Government.
• Statutory Construction of "Public Wharves": Whether the term "public wharves" in Section 17(w) of the city charter refers to the nature of use or to ownership, and whether it encompasses wharves owned by the National Government.
• Basis of the Right to Collect Wharfage: Whether the right to impose wharfage dues is based on ownership of the wharf or on the regulatory power of the municipal corporation.

• Authority to Impose Wharfage on National Government-Owned Wharves: No. The City of Cebu had no authority under its charter to impose wharfage charges on vessels docking at wharves owned by the National Government, as the right to collect wharfage is based on ownership and the charter's grant of power was limited to wharves constructed and owned by the city.
• Statutory Construction of "Public Wharves": The term "public" refers to the nature of the wharf's use — availability to the public — not to its ownership. Read in context with subsection (v) and Section 30 of the charter, "public wharves" in Section 17(w) refers only to those constructed and owned by the City of Cebu.
• Basis of the Right to Collect Wharfage: The right to collect wharfage rests on ownership. Wharfage is a charge against the vessel as compensation for use of the wharf and its artificial facilities, and the right to impose it belongs to the owner of the wharf.

• Authority to Impose Wharfage on National Government-Owned Wharves: The Court applied the cardinal rule of statutory construction that legislative intent must be ascertained from a consideration of the statute as a whole, not from an isolated provision. Section 17(w) authorized the Municipal Board to fix charges for use of "public wharves, docks, levees, or landing places," making no express distinction between National Government-owned and city-owned wharves. However, the immediately preceding subsection (v) empowered the Board "to provide for the construction and maintenance, and regulate the use, of public landing places, wharves, piers, docks and levees" — referring to those constructed and therefore owned by the city. Section 30 similarly granted the City Engineer care and custody of "public docks, wharves, piers, levees, and landing places, when erected," referring to those constructed and owned by the city. Wharves belonging to the National Government remained under the exclusive control, direction, and management of the Bureau of Customs under Section 1142 of the Revised Administrative Code. The National Government did not surrender its ownership to the city, and there was no justifiable ground to read into the statute an intention to burden shipowners with double payment for the same purpose.

• Statutory Construction of "Public Wharves": The Court clarified that the word "public," as employed to describe a wharf, does not refer to ownership by the National Government or by a province or municipality, but rather denotes the nature of its use. Public wharves are those used generally by the public, free of charge or for compensation, while a private wharf is one whose owner or lessee has exclusive enjoyment or use thereof. A wharf may thus be public whether it belongs to the National Government, to a municipal corporation, or to a private individual. The Court relied on American jurisprudence (Hamilton vs. Portland State Pier Site District; Dutton vs. Strong) and Philippine precedent (Phil. Sugar Centrals Agency vs. Insular Collector of Customs) to establish this distinction. The term "public" in the charter therefore did not, by itself, expand the city's authority to wharves it did not own.

• Basis of the Right to Collect Wharfage: The Court held that the right to impose wharfage dues rests on ownership. Wharfage is a charge against the vessel by way of rent or compensation for being allowed to lie alongside a wharf for loading or unloading freight, and for the use of the artificial facilities offered for that purpose. The Court cited Province of Mindoro vs. Cruz, where it had been recognized that the right to collect wharfage is tied to ownership: the classification of a port as a national port did not divest the province of its part ownership of the wharf and its corresponding right to collect wharfage. Under this test, the right to collect the wharfage in question belonged to the National Government, which had in fact always collected it from the appellants. Even if the wharfage dues were considered taxes for revenue rather than regulatory fees, the authority remained limited to wharves belonging to the City of Cebu. The power to tax is not inherent in a municipal corporation and requires clear delegation; any doubt must be resolved negatively against the municipality.

• Wharfage Dues Based on Ownership — The right to collect wharfage is based on ownership of the wharf. Wharfage is a charge against the vessel as rent or compensation for lying alongside a wharf for loading or unloading freight and for use of the artificial facilities provided. The owner of the wharf — whether the National Government, a municipal corporation, or a private party — has the right to impose wharfage dues. The Court applied this doctrine to hold that the City of Cebu could not collect wharfage from vessels using National Government-owned wharves, as ownership — not the public character of the wharf — determined the right to charge.

• Statutory Construction — Whole-Statute Rule — Legislative intent must be ascertained from a consideration of the statute as a whole and not of an isolated part or a particular provision alone. An apparently general provision may have a limited application when viewed together with other provisions. The Court applied this rule by reading Section 17(w) of the Cebu City charter in conjunction with subsection (v) and Section 30, concluding that "public wharves" in subsection (w) referred only to those constructed and owned by the city.

• Municipal Corporation's Taxing Power — Strict Construction — The power to tax is an attribute of sovereignty and is not inherent in a municipal corporation; it requires a clear delegation by charter grant or general enabling statute. Any doubt as to whether the taxing power has been delegated to a municipal corporation must be resolved negatively. The Court applied this principle to reject the lower court's broad reading of Section 17(w) as a revenue-raising provision extending to National Government-owned wharves.

• Meaning of "Public Wharf" — The term "public" as applied to a wharf refers to the nature of its use — availability to the general public — rather than to its ownership. A public wharf is one used generally by the public, free of charge or for compensation, while a private wharf is one whose owner or lessee has exclusive enjoyment or use thereof. A wharf may be public whether it belongs to the National Government, a municipal corporation, or a private individual.

• "The word 'public', as employed to describe a wharf, does not refer to its ownership either by the National Government or by a province or municipality. It denotes rather the nature of its use." — This passage defines the controlling distinction between the public character of a wharf (based on use) and the right to collect wharfage (based on ownership), which is the ratio decidendi of the case.

• "Assuming the public character of a wharf by reason of its availability for public use, the right to impose wharfage dues rests on a different basis — that of ownership." — This sentence articulates the core doctrinal principle that ownership, not public use, determines the right to collect wharfage, directly resolving the central issue.

• "It is unreasonable to conclude that the legislature, simply because it employed the term 'public wharves' in section 17 (w) of the charter of the City of Cebu, thereby authorized the latter to collect wharfage irrespective of the ownership of the wharves involved." — This passage applies the whole-statute rule and the principle against double taxation to reject the city's broad construction of its charter authority.

• "The power to tax is an attribute of sovereignty and for it to be exercised by a municipal corporation requires a clear delegation of the power by means of charter grant or by a general enabling statute." — This is the canonical formulation of the strict construction rule for municipal taxing powers, frequently cited in subsequent local government law jurisprudence.

• Phil. Sugar Centrals Agency vs. Insular Collector of Customs, 51 Phil. 131 — Cited for the definition of wharfage as a charge against the vessel by way of rent or compensation for lying alongside a wharf for loading or unloading freight, and for the principle that the right to charge wharfage is based on ownership.

• Province of Mindoro vs. Cruz, 74 Phil. 108 — Cited as impliedly recognizing that the right to collect wharfage is tied to ownership. The Court quoted the passage holding that classification of a port as a national port did not divest the province of its part ownership of the wharf and its corresponding right to collect wharfage.

• Saldaña vs. City of Iloilo, 55 O.G. 10267 — Cited for the principle that the power to tax is not inherent in a municipal corporation and requires clear delegation.

• We Wa Yu vs. City of Lipa, 54 O.G. 4055 — Cited for the rule that any doubt as to whether the taxing power has been delegated to a municipal corporation must be resolved negatively.

• Hamilton vs. Portland State Pier Site District, 112 A. 836 — Cited as American authority for the distinction between public wharves (used generally by the public) and private wharves (whose owner or lessee has exclusive enjoyment or use).

• Dutton vs. Strong, 17 Law Ed. 29, 1 Black 35, 66 U.S. 339 — Cited for the proposition that piers or landing places may be public in nature even if owned by a private individual, where the latter is under obligation to concede to others the privilege of landing goods or mooring vessels upon payment of reasonable compensation.

• Section 17(w), Commonwealth Act No. 58 (City of Cebu Charter) — Authorized the Municipal Board to "fix the charges to be paid by all watercrafts landing at or using public wharves, docks, levees, or landing places." The Court construed this provision, read in context with subsection (v) and Section 30, as limited to wharves constructed and owned by the City of Cebu, not those owned by the National Government.

• Section 17(v), Commonwealth Act No. 58 — Empowered the Municipal Board "to provide for the construction and maintenance, and regulate the use, of public landing places, wharves, piers, docks and levees." The Court used this provision to establish that "public wharves" in subsection (w) referred to those constructed and owned by the city.

• Section 30, Commonwealth Act No. 58 — Granted the City Engineer "the care and custody of all public docks, wharves, piers, levees, and landing places, when erected." The Court interpreted this as referring to structures constructed and owned by the city, reinforcing the limitation on the city's authority.

• Section 1142, Revised Administrative Code — Placed National Government-owned wharves under the exclusive control, direction, and management of the Bureau of Customs, establishing that the city had no jurisdiction over them.

• Republic Act No. 1371 — Took effect on July 1, 1955, and authorized the National Government to collect wharfage fees for use of its wharves; later embodied in the new Tariff and Customs Code. This statute confirmed that the National Government, as owner, had been lawfully collecting wharfage from the shipping companies.

Bengzon, C.J., Bautista Angelo, Concepcion, Barrera, Paredes, Dizon, Regala, Bengzon, J.P., and Zaldivar, JJ., concurred.