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2 Corona v. United Harbor Pilots, 283 SCRA 31 (1997)
Civil Engineering
Bicol University
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Corona v. United Harbor Pilots , 283 SCRA 31 (1997)
CORONA VS UNITED HARBOUR PILOT GR NO 127980 CASE DIGEST
FACTS: :
IN ISSUING ADMINISTRATIVE ORDER NO. 04-92 (PPA-AO NO-92), LIMITING THE TERM OF APPOINTMENT OF HARBOR PILOTS TO ONE YEAR SUBJECT TO YEARLY RENEWAL OR CANCELLATION ON AUGUST 12, 1992, RESPONDENTS UNITED HARBOUR PILOTS ASSOCIATION AND THE MANILA PILOTS ASSOCIATION, THROUGH CAPT C. COMPAS, QUESTIONED PPA-AO NO. 04-92 ON DECEMBER 23, 1992, THE OP ISSUED AN ORDER DIRECTING THE PPA TO HOLD IN ABEYANCE THE IMPLEMENTATION OF PPA-AO NO. 04-92 ON MARCH 17, 1993, THE OP, THROUGH THEN ASSISTANT EXECUTIVESECRETARY FOR LEGAL AFFAIRS RENATO C. CORONA, DISMISSED THEAPPEAL/PETITION AND LIFTED THE RESTRAINING ORDER ISSUEDEARLIER RESPONDENTS FILED A PETITION FOR CERTIORARI, PROHIBITION ANDINJUNCTION WITH PRAYER FOR THE ISSUANCE OF A TEMPORARYRESTRAINING ORDER AND DAMAGES, BEFORE BRANCH 6 OF THEREGIONAL TRIAL COURT
ISSUE: WON PPA-AO-04-92 IS CONSTITUTIONAL
HELD: THE COURT IS CONVINCED THAT PPA-AO NO. 04-92 WAS ISSUEDIN STARK DISREGARD OF RESPONDENTS' RIGHT AGAINST DEPRIVATIONOF PROPERTY WITHOUT DUE PROCESS OF LAW. THE SUPREME COURTSAID THAT IN ORDER TO FALL WITHIN THE AEGIS OF THIS PROVISION,TWO CONDITIONS MUST CONCUR, NAMELY, THAT THERE IS ADEPRIVATION AND THAT SUCH DEPRIVATION IS DONE WITHOUTPROPER OBSERVANCE OF DUE PROCESS. AS A GENERAL RULE, NOTICEAND HEARING, AS THE FUNDAMENTAL REQUIREMENTS OFPROCEDURAL DUE PROCESS, ARE ESSENTIAL ONLY WHEN ANADMINISTRATIVE BODY EXERCISES ITS QUASI-JUDICIAL FUNCTION. INTHE PERFORMANCE OF ITS EXECUTIVE OR LEGISLATIVE FUNCTIONS,SUCH AS ISSUING RULES AND REGULATIONS, AN ADMINISTRATIVEBODY NEED NOT COMPLY WITH THE REQUIREMENTS OF NOTICE AND HEARING
THERE IS NO DISPUTE THAT PILOTAGE AS A APROFESSION HAS TAKENON THE NATURE OF A PROPERTY RIGHT. IT IS READILY APPARENT THATPPA-AO NO. 04-92 UNDULY RESTRICTS THE RIGHT OF HARBOR PILOT TO ENJOY THEIR PROFESSION BEFORE THEIR COMPULSORYRETIREMEN
Facts:
The PPA was created... on July 11, 1974,... by virtue of Presidential Decree No. 505.
On December 23, 1975, Presidential Decree No. 857 was issued revising the PPA's charter.
Pursuant to its power of control, regulation, and supervision of pilots and the pilotage profession,...
[1] the PPA promulgated PPA-AO-03-85 [2] on March 21, 1985, which embodied the "Rules and
Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine
Ports."
These rules mandate, inter alia, that... aspiring pilots must be holders of pilot licenses [3] and must
train as probationary pilots in outports for three months and in the Port of Manila for four months.
It is only after they have achieved satisfactory performance [4] that... they are given permanent and
regular appointments by the PPA itself [5] to exercise harbor pilotage until they reach the age of 70,
unless sooner removed by reason of mental or physical unfitness by the PPA General Manager.
Subsequently, then PPA General Manager Rogelio A. Dayan issued PPA-AO No. 04-92... whose
avowed policy was to "instill effective discipline and thereby afford better protection to the port users
through the improvement of pilotage... services."... and that "all appointments to harbor pilot
positions in all... pilotage districts shall, henceforth, be only for a term of one (1) year from date of
effectivity subject to yearly renewal or cancellation by the Authority after conduct of a rigid
evaluation of performance."
On August 12, 1992, respondents United Harbor Pilots Association and the Manila Pilots
Association, through Capt. Alberto C. Compas, questioned PPA-AO No. 04-92 before the
Department of Transportation and Communication... n March 17, 1993, the OP, through then
Assistant Executive Secretary for Legal Affairs Renato C. Corona, dismissed the appeal/petition and
lifted the restraining order issued earlier.
On the alleged unconstitutionality and illegality of PPA-AO No. 04-92 and its implementing
memoranda and circulars, Secretary Corona opined that:
"The exercise of one's profession falls within the constitutional guarantee against wrongful
deprivation of, or interference with, property rights without due process. In the limited context of this
case, PPA-AO 04-92 does not constitute a wrongful interference with,... let alone a wrongful
deprivation of, the property rights of those affected thereby. As may be noted, the issuance aims no
more than to improve pilotage services by limiting the appointment to harbor pilot positions to one
year, subject to renewal or cancellation after a rigid... evaluation of the appointee's performance.
Issues:
Respondents (herein petitioners) have acted in excess of jurisdiction and with grave abuse of
discretion and in a capricious, whimsical and arbitrary manner in promulgating PPA Administrative
Order 04-92 including all its implementing Memoranda, Circulars and Orders;
Ruling:
The court a quo pointed out that the Bureau of Customs, the precursor of the PPA, recognized
pilotage as a profession and, therefore, a property right under Callanta v. Carnation Philippines, Inc.
Consequently, any "withdrawal or alteration" of such property right must be strictly made in
accordance with the constitutional mandate of due process of law.
This was apparently not... followed by the PPA when it did not conduct public hearings prior to the
issuance of PPA-AO No. 04-92; respondents allegedly learned about it only after its publication in
the newspapers.
The PPA was created on July 11, 1974, by virtue of Presidential Decree No. 505. On December 23, 1975, Presidential Decree No. 857 was issued revising the PPA's charter. Pursuant to its power of control, regulation, and supervision of pilots and the pilotage profession, 1 the PPA promulgated PPA-AO-03-85 2 on March 21, 1985, which embodied the "Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports." These rules mandate, inter alia , that aspiring pilots must be holders of pilot licenses 3 and must train as probationary pilots in outports for three months and in the Port of Manila for four months. It is only after they have achieved satisfactory performance 4 that they are given permanent and regular appointments by the PPA itself 5 to exercise harbor pilotage until they reach the age of 70 , unless sooner removed by reason of mental or physical unfitness by the PPA General Manager. 6 Harbor pilots in every harbor district are further required to organize themselves into pilot associations which would make available such equipment as may be required by the PPA for effective pilotage services. In view of this mandate, pilot associations invested in floating, communications, and office equipment. In fact, every new pilot appointed by the PPA automatically becomes a member of a pilot association and is required to pay a proportionate equivalent equity or capital before being allowed to assume his duties, as reimbursement to the association concerned of the amount it paid to his predecessor.
Subsequently, then PPA General Manager Rogelio A. Dayan issued PPA-AO No. 04-92 7 on July 15, 1992, whose avowed policy was to "instill effective discipline and thereby afford better protection to the port users through the improvement of pilotage services." This was implemented by providing therein that " all existing regular appointments which have been previously issued either by the Bureau of Customs or the PPA shall remain valid up to 31 December 1992 only " and that " all appointments to harbor pilot positions in all pilotage districts shall, henceforth, be only for a term of one (1) year from date of effectivity subject to yearly renewal or cancellation by the Authority after conduct of a rigid evaluation of performance ."
On August 12, 1992, respondents United Harbor Pilots Association and the Manila Pilots Association, through Capt. Alberto C. Compas, questioned PPA-AO No. 04-92 before the Department of Transportation and Communication, but they were informed by then DOTC Secretary Jesus B. Garcia that "the matter of reviewing, recalling or annulling PPA's administrative issuances lies exclusively with its Board of Directors as its governing body."
Meanwhile, on August 31, 1992, the PPA issued Memorandum Order No. 08-92 8 which laid down the criteria or factors to be considered in the reappointment of harbor pilot, viz .: (1) Qualifying Factors: 9 safety record and physical/mental medical exam report and (2) Criteria for Evaluation: 10 promptness in servicing vessels, compliance with PPA Pilotage Guidelines, number of years as a harbor pilot, average GRT of vessels serviced as pilot, awards/commendations as harbor pilot, and age.
Respondents reiterated their request for the suspension of the implementation of PPA-AO No. 04-92, but Secretary Garcia insisted on his position that the matter was within the jurisdiction of the Board of Directors of the PPA. Compas appealed this ruling to the Office of the President (OP), reiterating his arguments before the DOTC.
On December 23, 1992, the OP issued an order directing the PPA to hold in abeyance the implementation of PPA-AO No. 04-92. In its answer, the PPA countered that said administrative order was issued in the exercise of its administrative control and supervision over harbor pilots under Section 6-a (viii), Article IV of P. No. 857, as amended, and it, along with its implementing guidelines, was intended to restore order in the ports and to improve the quality of port services.
On March 17, 1993, the OP, through then Assistant Executive Secretary for Legal Affairs Renato C. Corona, dismissed the appeal/petition and lifted the restraining order issued earlier. 11 He concluded that PPA-AO No. 04-92 applied to all harbor pilots and, for all intents and purposes, was not the act of Dayan, but of the PPA, which was merely implementing Section 6 of P. No. 857, mandating it "to control, regulate and supervise pilotage and conduct of pilots in any port district."
On the alleged unconstitutionality and illegality of PPA-AO No. 04-92 and its implementing memoranda and circulars, Secretary Corona opined that:
The exercise of one's profession falls within the constitutional guarantee against wrongful deprivation of, or interference with, property rights without due process. In the limited context of this case. PPA- AO 04-92 does not constitute a wrongful interference with, let alone a wrongful deprivation of, the property rights of those affected thereby. As may be noted, the issuance aims no more than to improve pilotage services by limiting the appointment to harbor pilot positions to one year, subject to renewal or cancellation after a rigid evaluation of the appointee's performance.
PPA-AO 04-92 does not forbid, but merely regulates, the exercise by harbor pilots of their profession in PPA's jurisdictional area. (Emphasis supplied)
Finally, as regards the alleged "absence of ample prior consultation" before the issuance of the administrative order, Secretary Corona cited Section 26 of P. No. 857, which merely requires the PPA to consult with "relevant Government agencies." Since the PPA Board of Directors is composed of the Secretaries of the DOTC, the Department of Public Works and Highways, the Department of Finance, and the Department of Environment and Natural Resources, as well as the Director-General of the National Economic Development Agency, the Administrator of the Maritime Industry Authority (MARINA), and the private sector representative who, due to his knowledge and expertise, was appointed by the President to the Board, he concluded that the law has been sufficiently complied with by the PPA in issuing the assailed administrative order.
Consequently, respondents filed a petition for certiorari , prohibition and injunction with prayer for the issuance of a temporary restraining order and damages, before Branch 6 of the Regional Trial Court of Manila, which was docketed as Civil Case No. 93-65673. On September 6, 1993, the trial court rendered the following judgment: 12
WHEREFORE, for all the foregoing, this Court hereby rules that:
Respondents (herein petitioners) have acted excess jurisdiction and with grave abuse of discretion and in a capricious, whimsical and arbitrary manner in promulgating PPA Administrative Order 04- including all its implementing Memoranda, Circulars and Orders;
PPA Administrative Order 04-92 and its implementing Circulars and Orders are declared null and void;
The respondents are permanently enjoined from implementing PPA Administrative Order 04-92 and its implementing Memoranda, Circulars and Orders.
No costs.
SO ORDERED.
The court a quo pointed out that the Bureau of Customs, the precursor of the PPA, recognized pilotage as a profession and, therefore, a property right under Callanta v. Carnation Philippines, Inc. 13 Thus, abbreviating the term within which that privilege may be exercised would be an interference with the property rights of the harbor pilots. Consequently, any "withdrawal or alteration" of such property right must be strictly made in accordance with the constitutional mandate of due process of law. This was apparently not followed by the PPA when it did not conduct public hearings prior to the issuance of PPA-AO No. 04-92; respondents allegedly
those affected thereby, and that "PPA-AO 04-95 does not forbid, but merely regulates, the exercise by harbor pilots of their profession." As will be presently demonstrated, such supposition is gravely erroneous and tends to perpetuate an administrative order which is not only unreasonable but also superfluous.
Pilotage, just like other professions, may be practiced only by duly licensed individuals. Licensure is "the granting of license especially to practice a profession." It is also "the system of granting licenses (as for professional practice) in accordance with establishment standards." 21 A license is a right or permission granted by some competent authority to carry on a business or do an act which, without such license, would be illegal. 22
Before harbor pilots can earn a license to practice their profession, they literally have to pass through the proverbial eye of a needle by taking, not one but five examinations, each followed by actual training and practice. Thus, the court a quo observed:
Petitioners (herein respondents) contend, and the respondents (herein petitioners) do not deny, the here ( sic ) in this jurisdiction, before a person can be a harbor pilot, he must pass five (5) government professional examinations, namely, (1) For Third Mate and after which he must work, train and practice on board a vessel for at least a year; (2) For Second Mate and after which he must work, train and practice for at least a year; (3) For Chief Mate and after which he must work, train and practice for at least a year; (4) For a Master Mariner and after which he must work as Captain of vessel for at least two (2) years to qualify for an examination to be a pilot; and finally, of course, that given for pilots.
Their license is granted in the form of an appointment which allows them to engage in pilotage until they retire at the age 70 years. This is a vested right. Under the terms of PPA-AO No. 04-92, "(a)ll existing regular appointments which have been previously issued by the Bureau of Customs or the PPA shall remain valid up to 31 December 1992 only," and "(a)ll appointments to harbor pilot positions in all pilotage districts shall, henceforth, be only for a term of one (1) year from date of effectivity subject to renewal or cancellation by the Authority after conduct of a rigid evaluation of performance."
It is readily apparent that PPA-AO No. 04-92 unduly restricts the right of harbor pilots to enjoy their profession before their compulsory retirement. In the past, they enjoyed a measure of security knowing that after passing five examinations and undergoing years of on-the-job training, they would have a license which they could use until their retirement, unless sooner revoked by the PPA for mental or physical unfitness. Under the new issuance, they have to contend with an annual cancellation of their license which can be temporary or permanent depending on the outcome of their performance evaluation. Veteran pilots and neophytes alike are suddenly confronted with one-year terms which ipso facto expire at the end of that period. Renewal of their license is now dependent on a "rigid evaluation of performance" which is conducted only after the license has already been cancelled. Hence, the use of the term "renewal." It is this pre-evaluation cancellation which primarily makes PPA-AO No. 04-92 unreasonable and constitutionally infirm. In a real sense, it is a deprivation of property without due process of law.
The Court notes that PPA-AO No. 04-92 and PPA-MO No. 08-92 are already covered by PPA-AO No. 03-85, which is still operational. Respondents are correct in pointing out that PPA-AO No. 04-92 is a "surplusage" 23 and, therefore, an unnecessary enactment. PPA-AO 03-85 is a comprehensive order setting forth the "Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports." It provides, inter alia , for the qualification, appointment, performance evaluation, disciplining and removal of harbor pilots — matters which are duplicated in PPA-AO No. 04-92 and its implementing memorandum order. Since it adds nothing new or substantial, PPA-AO No. 04-92 must be struck down.
Finally, respondents' insinuation that then PPA General Manager Dayan was responsible for the issuance of the questioned administrative order may have some factual basis; after all, power and authority were vested in his office to propose rules and regulations. The trial court's finding of animosity between him and private respondents might likewise have a grain of truth. Yet the number of cases filed in court between private
respondents and Dayan, including cases which have reached this Court, cannot certainly be considered the primordial reason for the issuance of PPA-AO No. 04-92. In the absence of proof to the contrary, Dayan should be presumed to have acted in accordance with law and the best of professional motives. In any event, his actions are certainly always subject to scrutiny by higher administrative authorities.
WHEREFORE, the instant petition is hereby DISMISSED and the assailed decision of the court a quo dated September 6, 1993, in Civil Case No. 93-65673 is AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Narvasa, C., Regalado, Davide, Jr., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco and Panganiban, JJ., concur.
Martinez, J., took no part.
2 Corona v. United Harbor Pilots, 283 SCRA 31 (1997)
Course: Civil Engineering
University: Bicol University
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