EASTERN SHIPPING LINES V CA

FACTS:
Davao Pilots Association (DPA) filed a complaint 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 PPAs memorandum circulars. The PPA is the administrative body vested
with the power to regulate & prescribe pilotage fees.
ISSUES:
1. Whether EO 1088 is unconstitutional.
2. Whether the PPA circulars are valid.
HELD:
1.
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.
2.
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 clearlyconflicting 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.