East Shipping Lines (ESL)vs Court of Appeals

95 SCAD 349
291 SCRA 485

Constitutionality of E.O. No. 1088 providing for uniform & adjusted rates for foreign and coasteise vessels in all Philippine Ports is assailed.

Davao Pilots Association (DPA) filed a compliant against ESL for non-payment of pilotage services. ESL assailed the constitutionality of EO 1088, upon which DPA bases its claim,because (1) its interpretation & application are left private respondent, and (2) it constitutes an undue delegation of powers. It insists that it should pay pilotage fees in accordance with and on the basis of the PPA’s memorandum circulars. The PPA is the administrative body vested with the power to regulate & prescribe pilotage fees.

1. Whether EO 1088 is unconstitutional.
2. Whether the PPA circulars are valid.

EO 1088 was upheld as valid & constitutional in Philippine Inter-island Shipping Association vs CA (78 SCAD 197, 266 SCRA 489 [1997]). It was held that “what determines whether an act is a law or an administrative issuance is not its form but its natureThe power to fix the rates of charges for serviceshas always been regarded as legislative in character.”
EO 1088 is not meant simply to fix new pilotage rates. Its legislative purpose is the ‘rationalization of pilotage service charges through the imposition if uniform and adjusted rates for foreign & coastwise vessels in all Philippine ports’.
The PPA is duty-bound to comply with EO 1088. PPA may increase the rates but it may not decrease them below those mandated by EO 1088.

Since the PPA circulars are inconsistent with EO 1088, they are void and ineffective. ‘Administrative/Executive acts, orders and regulations are only valid when they are not contrary to the laws or the Constitution’.
As stated in LBP vs CA (64 SCAD 905, 249 SCRA 149 [1995]), ‘the conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed/set aside by the judicial department if there is an Error of Law, a Grave Abuse of Power or Lack or Jurisdiction, or Grave Abuse of Discretion clearly conflicting with either the letter or spirit of the law.’
An administrative agency has no discretion whether to implement a law or not. If there is any conflict between the PPA circular and a law, the latter prevails.


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