Manila Ports VS Ppa Case Digest

[ G.R. No. 196199.
December 07, 2021 ]
MANILA INTERNATIONAL PORTS TERMINAL,

INC., PETITIONER, VS. PHILIPPINE PORTS AUTHORITY,
1
RESPONDENT.
[G.R. No. 196252]
PHILIPPINE PORTS AUTHORITY, PETITIONER, VS. MANILA

INTERNATIONAL PORTS TERMINAL, INC., RESPONDENT.
FACTS:
On 06 January 1975, former President Ferdinand E. Marcos

issued Presidential Decree No. 634 - granting MIPTI a franchise
to construct, operate and maintain modern container terminals,
bonded warehouses, storage depots, cold and refrigerated
storage, cargo and transit sheds, conveyor piers, docks, landing
and berthing facilities, access roads, bridges, seawalls, bulkheads
and filling at North Harbor.
On 16 January 1978, Presidential Decree No. 1284 - amended

Presidential Decree No. 634 authorizing MIPTI to operate and
manage all facilities, container terminals, gantry cranes,
warehouses, storage, depots, transit sheds, conveyor installations,
and other structures and to render cargo-handling services in the
MIPTC at North Harbor for a period of twenty-five (25) years,
unless sooner modified, suspended or terminated.
On 01 July 1979, MIPTI commenced operation at the MIPTC

under an interim procedure promulgated by PPA.
On 01 April 1980, MIPTI and PPA executed a Memorandum of

Agreement (MOA) - providing for the rules in the operation and
management of the MIPTC at North Harbor as well as detailing the
rights and obligations of the parties under the franchise.
On 13 April 1981, PPA issued Administrative Order (AO) No. 10-

81 - providing for the rules and regulations in the management
and operation of cargo-handling services in port terminals
throughout the country.
On 02 April 1986, MIPTI was sequestered by the Presidential
Commission on Good Government (PCGG). The PCGG monitored
MIPTI's operations but it never interfered with its management.
On 18 July 1986, Primitivo S. Solis, Jr., PPA's General Manager,

served a letter to MIPTI notifying it about the strike being staged by
various trucking and brokerage firms at North Harbor caused by its
alleged poor performance and illegal practices. Solis required
MIPTI to answer not later than 9:00 A.M. the next day
On 19 July 1986, in compliance with the PPA directive, Gregorio

Oca – then MIPTI's President – submitted a reply denying all the
allegations imputed against MIPTI and enumerating the acts
showing its faithful compliance with its obligations under the
franchise and the MOA.
On same date, then President Corazon C. Aquino issued

Executive Order (EO) No. 30 revoking MIPTI's franchise due to
substantial violations of the MOA, which resulted in the
deterioration of port services, and authorizing PPA to undertake,
on its own, the cargo-handling operation at North Harbor.
Consequently, PPA sent a letter to MIPTI informing it of its plan to
take over its business and properties.
On 20 July 1986, PPA issued a permit to Metrostar Port and Allied

Services, Inc. (Metrostar), a private domestic corporation engaged
in the business of providing cargo-handling services and operation
of port complex in the country, to render cargo-handling and other
port-related services at North Harbor for a period of one (1) year.
On 21 July 1986, PPA actually took over MIPTI's operations at the

MIPTC and seized its equipment. PPA thereafter placed Metrostar
in control of the port operations at North Harbor and in possession
of the seized properties. MIPTI subsequently made an inventory of
all the seized properties in the presence of representatives from
PPA, Metrostar and PCGG.
the undisputed sequence of events that preceded the takeover of
MIPTI's operations and property:
1. On July 18, 1986, a Friday, at around 5:30 pm, PPA served

MIPTI a letter informing it of its alleged violations and requiring it to
reply no later than 9:00 in the morning of the following day; 44
2. On July 19, 1986, a Saturday, MIPTI submitted its reply,

repudiating the allegations against it. PPA then served [it] with
45
another letter stating that the former would be taking over

immediately the management, operations, properties, and
equipment of MIPTI. It was on this day that EO 30 was issued;
46 47
3. On July 20, 1986, a Sunday, PPA issued a permit to Metrostar

to undertake cargo handling services in MIPTC; and 48
4. On July 21, 1986, the following Monday, PPA actually took over
the operations of MIPTC and seized MIPTI's properties.
ISSUE:
WHETHER OR NOT A FRANCHISE IS PROTECTED BY THE

DUE PROCESS CALUSE OF THE CONSTITUTION?
HELD:
In our jurisdiction, a franchise is broadly defined as a special

privilege that is not demandable as a matter of right, and when
granted, is subject to amendment, alteration, or repeal by
Congress: 57
Broadly speaking, "a franchise is defined to be a
special privilege to do certain things conferred by
government on an individual or corporation, and which
does not belong to citizens generally of common
right." Insofar as the great powers of government are
concerned, "[a] franchise is basically a legislative
grant of a special privilege to a person." In Associated
Communications & Wireless Services v. NTC
(Associated Communications), the Court defined a
"franchise [as] the privilege granted by the State
through its legislative body x x x subject to
regulation by the State itself by virtue of its police
power through its administrative agencies." On this
score, Section 11, Article XII of the 1987 Constitution
further states that "for the operation of a public utility,"
no "such franchise or right [shall] be granted except
under the condition that it shall be subject to
amendment, alteration, or repeal by the Congress
when the common good so requires." (Emphasis and
58
citations omitted; underscoring supplied)
There are two components of due process. The first, procedural

due process, pertains to the procedures that the government
must follow before it deprives a person of life, liberty, or
property; the second, substantive due process, to the
78
justification for the denial or restriction on life, liberty, or

property.
79
While due process has no exact definition, the standard in

80
determining whether a person was accorded due process is

whether the restriction on the person's life, liberty, or property
is consistent with fairness, reason, and justice, and free from
caprice and arbitrariness. This standard applies both to
81
procedural and substantive due process. As applied to procedural

82
due process, the question to be asked is whether the person was

given sufficient notice and opportunity to be heard. On the 83
other hand, as applied to substantive due process, the question is

whether such deprivation or restriction is necessary and fair
to the affected parties.
84

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[ G.R. No. 196199.

December 07, 2021 ]

MANILA INTERNATIONAL PORTS TERMINAL,

[G.R. No. 196252]

PHILIPPINE PORTS AUTHORITY, PETITIONER, VS. MANILA

On 06 January 1975, former President Ferdinand E. Marcos

On 16 January 1978, Presidential Decree No. 1284 - amended

On 01 July 1979, MIPTI commenced operation at the MIPTC

On 01 April 1980, MIPTI and PPA executed a Memorandum of

On 13 April 1981, PPA issued Administrative Order (AO) No. 10-

On 18 July 1986, Primitivo S. Solis, Jr., PPA's General Manager,

On 19 July 1986, in compliance with the PPA directive, Gregorio

On same date, then President Corazon C. Aquino issued

On 20 July 1986, PPA issued a permit to Metrostar Port and Allied

On 21 July 1986, PPA actually took over MIPTI's operations at the

1. On July 18, 1986, a Friday, at around 5:30 pm, PPA served

2. On July 19, 1986, a Saturday, MIPTI submitted its reply,

another letter stating that the former would be taking over

3. On July 20, 1986, a Sunday, PPA issued a permit to Metrostar

WHETHER OR NOT A FRANCHISE IS PROTECTED BY THE

In our jurisdiction, a franchise is broadly defined as a special

citations omitted; underscoring supplied)

There are two components of due process. The first, procedural

justification for the denial or restriction on life, liberty, or

While due process has no exact definition, the standard in

determining whether a person was accorded due process is

procedural and substantive due process. As applied to procedural

due process, the question to be asked is whether the person was

other hand, as applied to substantive due process, the question is

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