Victorias Milling Co., Inc. vs. Office of the Presidential Assistant for Legal Affairs

Administrative rules and regulations promulgated pursuant to statutory authority have the force and effect of law and are binding on all persons dealing with the administrative body; the reglementary period for appeal under such rules is not tolled by recourse to tribunals that lack jurisdiction over the subject matter.

Victorias Milling Co., Inc. operates a private wharf at Da-an Banua, primarily used to handle sugar purchased from district planters pursuant to existing milling agreements. The Philippine Ports Authority (PPA), created under Presidential Decree No. 505 and revised under Presidential Decree No. 857, exercises powers transferred from the Bureau of Customs to impose and collect customs duties, fees, and other money charges concerning the use of ports and facilities. PPA Administrative Order No. 13-77 was promulgated pursuant to Section 6 of Presidential Decree No. 857 to govern, among others, appeals from PPA decisions, and was published in full in the newspaper "The Times Journal" on November 9, 1977.

On April 28, 1981, the Iloilo Port Manager of respondent Philippine Ports Authority (PPA) wrote petitioner Victorias Milling Co., Inc., requiring it to have its tugboats and barges undergo harbor formalities and pay entrance/clearance fees as well as berthing fees effective May 1, 1981. PPA likewise required petitioner to secure a permit for cargo handling operations at its Da-an Banua wharf and to remit 10% of its gross income from said operations as the government's share.

Petitioner responded with two letters, both dated June 2, 1981, maintaining that it was exempt from paying PPA any fee or charge. It asserted that the wharf and all its facilities were built and installed on its own land; that repair and maintenance thereof were solely paid by it; that even the dredging and maintenance of the Malijao River Channel from Guimaras Strait up to said private wharf were being done by petitioner's own equipment and personnel; and that at no time had the government ever spent a single centavo for such activities. Petitioner further stated that the wharf was being used mainly to handle sugar purchased from district planters pursuant to existing milling agreements.

In reply, on November 3, 1981, PPA Iloilo sent petitioner a memorandum from PPA Executive Officer Maximo Dumlao justifying the PPA's demands. Petitioner's further request for reconsideration was denied on January 14, 1982. On March 29, 1982, petitioner served notice to PPA that it was appealing the case to the Court of Tax Appeals, and on March 31, 1982, filed a Petition for Review with that court, docketed as CTA Case No. 3466. On January 10, 1984, 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.

On January 23, 1984, petitioner filed a Petition for Review with the Supreme Court, docketed as G.R. No. 66381, but the same was denied in a Resolution dated February 29, 1984. On April 2, 1984, petitioner filed an appeal with the Office of the President. In a Decision dated July 27, 1984, the appeal was denied on the sole ground that it was filed beyond the reglementary period. A Motion for Reconsideration was filed but was denied in an Order dated December 16, 1985. Hence, the instant petition for review on certiorari before the Supreme Court.

• Tolling of Appeal Period: Petitioner argued that the 30-day period for appeal under Section 131 of PPA Administrative Order No. 13-77 was tolled by the pendency of its petitions first with the Court of Tax Appeals and then with the Supreme Court, as it was guided in good faith by the assumption that the procedural rules of appeal then enforced still held true.
• Jurisdiction of the Court of Tax Appeals: Petitioner contended that when Republic Act No. 1125 (creating the Court of Tax Appeals) was passed in 1955, PPA was not yet in existence, and under said law the Court of Tax Appeals had exclusive appellate jurisdiction over appeals from decisions of the Commissioner of Customs regarding customs duties, fees, and other money charges. Since neither Presidential Decree No. 505 nor Presidential Decree No. 857 provides for the remedy of appeal to the Office of the President, it was reasonable to seek recourse with the Court of Tax Appeals.
• PPA's Rule-Making Power: Petitioner maintained that an analysis of Presidential Decree No. 857 shows that PPA is vested merely with corporate powers and duties under Section 6, which do not and cannot include the power to legislate on procedural matters or effectively take away from the Court of Tax Appeals its appellate jurisdiction.
• Validity of PPA Fees: Petitioner submitted that there is no basis for PPA to assess and impose dues and charges since the wharf is private, constructed and maintained at no expense to the government, and exists primarily so that its tugboats and barges may ferry the sugarcane of its Panay planters.
• Publication of Administrative Order No. 13-77: Petitioner alleged that, to its recollection, there had been no prior publication of PPA Administrative Order No. 13-77.
• Scope of Section 131: Petitioner contended that Section 131 of Administrative Order No. 13-77 only provides for appeal when the decision is adverse to the government.

• Publication of Administrative Order No. 13-77: Respondent, through the Solicitor General, pointed out that PPA Administrative Order No. 13-77 was duly published in full in the nationwide newspaper "The Times Journal" on November 9, 1977.
• Scope of Section 131: Respondent observed that petitioner misleads the Court, as Section 131 expressly provides 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," thus applying to any aggrieved party and not only when the decision is adverse to the government.
• Petitioner's Negligence: Respondent correctly observed that petitioner's failure to appeal to the Office of the President on time stems entirely from its own negligence and not from a purported ignorance of the proper procedural steps, as petitioner had been aware of the rules governing PPA procedures and had even assailed the PPA's rule-making powers at the hearing before the Court of Tax Appeals.
• Basis of PPA Fees: Respondent stated that the fees and charges PPA collects are not for the use of the wharf that petitioner owns but for the privilege of navigating in public waters, of entering and leaving public harbors, and berthing on public streams or waters.

• Tolling of Appeal Period: Whether or not the 30-day period for appeal under Section 131 of PPA Administrative Order No. 13-77 was tolled by the pendency of the petitions filed first with the Court of Tax Appeals, and then with the Supreme Court.
• Validity of PPA Fees: Whether PPA may validly assess and impose entrance/clearance fees, berthing fees, and a 10% government share of cargo handling earnings against the operator of a private wharf.

• Tolling of Appeal Period: No. The 30-day period was not tolled. PPA Administrative Order No. 13-77, promulgated pursuant to Section 6 of Presidential Decree No. 857, has the force and effect of law, and the right to appeal is a statutory privilege that may be exercised only in the manner prescribed by law.
• Validity of PPA Fees: Yes. Berthing charges are collectible regardless of whether mooring or berthing is made from a private pier or wharf, because the government maintains bodies of water in navigable condition. The 10% government share is contractual compensation for the privilege of operating arrastre services.

• Tolling of Appeal Period: While neither Presidential Decree No. 505 nor Presidential Decree No. 857 expressly provides for the remedy of appeal to the Office of the President, Section 6 of Presidential Decree No. 857 empowers the PPA "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." Pursuant to this authority, PPA enacted Administrative Order No. 13-77 to govern, among others, appeals from PPA decisions. It is settled 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 that body. Petitioner's contention that Section 131 only provides for appeal when the decision is adverse to the government was found baseless, as the provision expressly allows "any party aggrieved" to appeal to the Office of the President within thirty (30) days. 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. Petitioner's failure to appeal on time stemmed entirely from its own negligence, as it had been aware of the rules governing PPA procedures and had even assailed the PPA's rule-making powers at the hearing before the Court of Tax Appeals. Its recourse to the Court of Tax Appeals and then to the Supreme Court, both of which lacked jurisdiction over the matter, did not toll the reglementary period.
• Validity of PPA Fees: The fees and charges PPA collects are not for the use of the wharf that petitioner owns but for the privilege of navigating in public waters, entering and leaving public harbors, and berthing on public streams or waters. In Compañia General de Tabacos de Filipinas vs. Actg. Commissioner of Customs, the Court laid down the rule that 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 and dues and charges are imposed to support its operations in this regard regardless of the ownership of the pier or wharf. As to the 10% government share of earnings, Section 6B-(ix) of Presidential Decree No. 857 authorized the PPA "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 10% share 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.

• Force and Effect of Administrative Rules — 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. The Court applied this doctrine to uphold PPA Administrative Order No. 13-77, promulgated pursuant to Section 6 of Presidential Decree No. 857, as having the force and effect of law, including its provision on the 30-day period for appeal to the Office of the President.
• Right to Appeal as Statutory Privilege — 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. The Court relied on this principle to hold that petitioner's failure to comply with the prescribed 30-day appeal period under Section 131 of PPA Administrative Order No. 13-77 was fatal to its appeal, regardless of its good-faith recourse to other tribunals.
• Berthing Charges on Private Wharves — Berthing charges against a vessel are collectible regardless of whether mooring or berthing is made from a private pier or wharf, because the government maintains bodies of water in navigable condition and imposes dues and charges for the use of piers and wharves regardless of their ownership. The Court applied this rule to sustain PPA's imposition of berthing fees on petitioner despite the private character of its wharf.

• "It is now finally settled that administrative rules and regulations issued in accordance with law, like PPA Administrative Order No. 13-77, have the force and effect of law, and are binding on all persons dealing with that body." — This passage articulates the controlling doctrine on the binding effect of administrative rules validly promulgated pursuant to statutory authority, which is the ratio decidendi for upholding the 30-day appeal period.
• "It is axiomatic that the right to appeal is merely a statutory privilege and may be exercised only in the manner and in accordance with the provision of law." — This formulation of the right to appeal as a statutory privilege is frequently cited in Philippine jurisprudence and underpins the Court's refusal to excuse petitioner's failure to timely appeal.
• "berthing charges against a vessel are collectible regardless of the fact that mooring or berthing is made from a private pier or wharf. This is because the government maintains bodies of water in navigable condition and it is to support its operations in this regard that dues and charges are imposed for the use of piers and wharves regardless of their ownership." — This passage, drawn from Compañia General de Tabacos de Filipinas vs. Actg. Commissioner of Customs, states the rule sustaining PPA's authority to impose berthing fees on operators of private wharves.

• Valerio vs. Secretary of Agriculture and Natural Resources, 7 SCRA 719 — Cited as authority for the doctrine that administrative rules and regulations issued in accordance with law have the force and effect of law.
• Antique Sawmills, Inc. vs. Zayco, et al., 17 SCRA 316 — Cited alongside Valerio for the same doctrine on the binding effect of administrative rules.
• Macailing vs. Andrada, 31 SCRA 126 — Cited as further authority for the force and effect of administrative rules promulgated pursuant to law.
• United CMC Textile Workers Union vs. Clave, 137 SCRA 346 — Cited for the principle that the right to appeal is merely a statutory privilege, itself citing Bello vs. Fernando, Aguila vs. Navarro, and Santiago vs. Valenzuela.
• Compañia General de Tabacos de Filipinas vs. Actg. Commissioner of Customs, 23 SCRA 600 — Cited as controlling authority for the rule that berthing charges are collectible regardless of the private ownership of the pier or wharf, because the government maintains navigable waters.

• Section 6, Presidential Decree No. 857 — Empowers the PPA "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." The Court relied on this provision as the statutory basis for PPA's promulgation of Administrative Order No. 13-77, including its appeal provisions.
• Section 131, PPA Administrative Order No. 13-77 — Provides 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." The Court applied this provision to hold that petitioner's appeal was filed beyond the reglementary period and that the provision applies to any aggrieved party, not only when the decision is adverse to the government.
• Section 6B-(ix), Presidential Decree No. 857 — Authorizes the PPA "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." The Court applied this provision to sustain the 10% government share of earnings from cargo handling operations as contractual compensation for the privilege of operating arrastre services.
• Republic Act No. 1125 — Created the Court of Tax Appeals and vested it with exclusive appellate jurisdiction over appeals from decisions of the Commissioner of Customs regarding customs duties, fees, and other money charges. Petitioner invoked this law to justify its recourse to the CTA, but the Court found the recourse unavailing because PPA's charter and administrative rules provide the proper appellate remedy.

Teehankee, C.J., Narvasa and Gancayco, JJ., concurred. Cruz, J., concurred in the result.