CASE NO.

22
PEÑAFRANCIA SHIPPING CORPORATION AND SANTA CLARA
SHIPPING CORPORATION, Petitioners, v. 168 SHIPPING LINES, INC.,
Respondent.

G.R. No. 188952, September 21, 2016

Facts
On September 28, 2007, respondent 168 Shipping Lines, Inc. (respondent) filed with the
MARINA Regional Office V (MARINA RO V), Legaspi City an application1 for the issuance of a
Certificate of Public Convenience (CPC) to operate M/V Star Ferry I, a roll-on-roll-off vessel, in
the route Matnog, Sorsogon to Allen, Northern Samar, and vice versa. The schedule of trips as
reflected in the application has 90 departures from the port of Matnog, Sorsogon and 86
departures from the port of Allen, Northern Samar.

Peñafrancia Shipping Corporation and Santa Clara Shipping Corporation (petitioners), existing
operators who own and operate ferry boats serving the ports of Allen, Northern Samar and
Matnog, Sorsogon, intervened in the proceeding and opposed the application on the following
grounds:

1) Respondent failed to submit a Certificate of Berthing (memorandum for certificates of

Public convenience or provisional authority or renewals of substitutional or
replacement of vessels under a valid certificate of public convenience and for
complaint cases and petitions for rate invrease) as required under MARINA
Memorandum Circular No. 74-B.

2) The proposed schedule of trips in the original application is physically impossible to

perform by the applicant's lone vessel, the M/V Star Ferry I.

3) There exists an over tonnage in the route applied for by the respondent, thus
warranting the intervention of MARINA. Respondent countered that under Republic Act (R.A.)
No. 9295 and its Implementing Rules and Regulations (IRR):

i. An application for CPC is not adversarial in character and thus, a motion to

intervene and opposition are not allowed.

ii. There is no requirement for the CPC applicant to secure a Certificate of

Berthing from the Philippine Ports Authority.

On December 13, 2007, the MARINA RO V required respondent to file an amended CPC
application with workable sailing frequencies/schedule of trips. However, instead of complying
with the directive, respondent merely submitted a pleading denominated as RE: ADOPTION OF
AMENDED SCHEDULE OF TRIPS. The MARINA RO V, in its Decision dated February 1, 2008,
denied due course to respondent's application. Respondent filed its Motion for Reconsideration
but this was denied. Respondent filed a Notice of Appeal on March 26, 2008 before the Office of
the MARINA Administrator. On August 8, 2008, MARINA Administrator Vicente T. Suazo, Jr.,
joined by Deputy Administrator for Operations Primo V. Rivera, all acting by authority of the
Board, reversed the Decision of the MARINA RO V and granted respondent's application for
issuance of a CPC.

Petitioners appealed to the CA via Rule 43 of the Rules of Court. However, the CA dismissed
the petition for failure of the petitioners to exhaust administrative remedies, hence, for lack of
cause of action.

The CA dismissed the petition through its Resolution dated March 24, 2009, holding that.
Contrary to petitioners' stance that the Maritime Industry Authority (MARINA) is an independent
agency and that it has the final say in the outcome of its adjudication in any contested matter,
this Court finds and holds that MARINA is an entity within the Executive Department. It will be
noted that Presidential Decree No. 474 (Maritime Industry' Decree of 1974) organized MARINA
under the Office of the President. This was modified on July 23, 1979 by Executive Order No.
546 wherein MARINA was made an attached agency of the then Ministry of Transportation and
Communications (MOTC) for policy and program coordination. This was confirmed by the
Administrative Code of 1987, which explicitly provides that MARINA is an agency attached to
the Department of Transportation and Communication (DOTC).

Petitioners filed a motion for reconsideration but this was denied.

Petitioners, relying on the IRR of R.A. No. 9295, argue that:
1) A petition for review under Rule 43 of the Rules of Court is the immediate and direct
remedy from the adverse rulings of the MARINA.
2) The proper forum for review of the decision rendered by a quasi-judicial agency is the
CA.
3) The decision and resolution subject of the Rule 43 petition were acts of the MARINA
Board, and not merely by the Administrator.
4) Assuming an appeal to the DOTC Secretary and the Office of the President is
necessary, this case is an exception because an appeal would be a superfluity.
5) The doctrine of qualified political agency applies because the DOTC. Secretary, who
is the chairman of the MARINA Board, is the alter ego of the President.
6) It would be impractical to file an appeal with the OP because an individual from the
OP is also a member of the MARINA Board.
Respondent counters:
1) The IRR provision on appeal is void and cannot supplant Section 19, Chapter IV,
Book VII of the Administrative Code of 1987 which provides that an appeal from a final decision
of the agency may be taken to the Department Head unless provided by law.
2) The IRR is inapplicable since it did not provide for the mode of appeal of the decisions
of the MARINA Board, rather, it provided for appeals from an order, ruling, decision or resolution
of the MARINA Administrator.
 3) The DOTC is an attached agency under the control of the executive department and
the decisions or rulings rendered by the MARINA Board in the exercise of its quasi-judicial
functions are subject to the review of the DOTC Secretary and the OP.
(4) The MARINA was never taken out of the framework of the executive department.
(5) Even assuming that the decisions by the MARINA are not reviewable by the DOTC,
the Constitution and the Administrative Code of 1987 provide that the President shall have
control of all the executive departments, bureaus and offices.
(6) The case is not an exception to the doctrine of exhaustion of administrative
remedies.

Issues

1. Whether petitioners committed forum shopping when they filed the moratorium petition
2. Whether the decision of the MARINA Board in the exercise of its quasi-judicial function
should be appealed first to the DOTC Secretary, and subsequently to the OP, before
appeal to the CA.

Ruling

“We deny the petition due to the following:”

I. “No forum shopping”.

There is, no forum shopping. There is forum shopping "when a party repetitively avails of
several judicial remedies in different courts, simultaneously or successively, all substantially
founded on the same transactions and the same essential facts and circumstances, and all
raising substantially the same issues either pending in or already resolved adversely by some
other court”. The test to determine the existence of forum shopping is whether the elements of
litis pendentia are present, or whether a final judgment in one case amounts to res judicata in
the other.

Thus, there is forum shopping when the following elements are present, namely:

a) Identity of parties, or at least such parties representing the same interests in both
actions.

b) Identity of rights asserted and reliefs prayed for, the relief being founded on the same
facts.

c) The identity of the two preceding particulars, such that any judgment rendered in the
other action will, regardless of which party is successful, amounts to res judicata in the action
under consideration.

The moratorium petition prays for a relief different from that sought in the main case, from which
the present petition arose. In the moratorium petition, the petitioners did not pray for the
cancellation, or revocation of the CPC issued to the respondent. What petitioners prayed for
was a "moratorium or stoppage in the grant of Certificates of Public Convenience for carriage of
passengers and cargoes involving the routes MATNOG, SORSOGON - ALLEN, NORTHERN
SAMAR or MATNOG, SORSOGON - DAPDAP, ALLEN, NORTHERN; SAMAR, or MATNOG,
SORSOGON - SAN ISIDRO, NORTHERN SAMAR AND VICE VERSA”. Thus, any decision of
the MARINA on the moratorium petition will not affect the CPC already issued in favor of the
respondent and appealed before the CA, the subject matter of the present case.

II. “The CA properly dismissed the appeal”.

Petitioners justify their direct resort to the CA by “invoking the IRR of R.A. No. 9295”, which
provides for a procedure for appeal of decisions involving CPCs to wit:

RULE XV
APPEALS

Sec. 1. Appeal on Decisions Involving the CPC — Any order, ruling, decision or resolution of the
CO/MRO Director/OIC relating to the application for issuance of Entity/Company CPC shall
become final and executory fifteen (15) days unless a Motion for Reconsideration is filed within
the same period with the CO/MRO Director/OIC concerned after the receipt of a copy thereof by
the party affected. The decision of the CO/MRO Director/OIC shall be final and executory unless
within the same period an appeal to the MARINA Administrator has been perfected.

The “order, ruling decision or resolution of the MARINA Administrator shall be final .and
executory within fifteen (15) days unless an administrative appeal is filed with the MARINA
Board or petition for judicial review is filed with the Court of Appeals or Supreme Court in
accordance with the provisions of the Revised Rules of Court”.
Petitioners claim that this provision of the IRR shows that “the appropriate remedy against the
adverse ruling of; the MARINA Board is a petition for review to the Honorable Court of Appeals
under Rule 43 of the Rules of Court”. However, as correctly pointed out by the respondent,
paragraph 2, Section 1, Rule XV of the IRR applies only to an appeal of the order, ruling,
decision or resolution of the MARINA Administrator. There is no procedure for appeal of the
decisions of the MARINA Board. Hence, the IRR cannot be the basis for petitioners' appeal.
Moreover, no procedure for appeal before the courts is provided by R.A. No. 9295. Rules and
regulations issued to implement a law cannot go beyond its terms and provisions.

Rule 43 governs all appeals from awards, judgments, final orders or resolutions of or authorized
by any quasi-judicial1 agency in the exercise of quasi-judicial functions. Resort to the CA is
authorized by Section 9 of Batas Pambansa Blg. 129 which provides that the CA shall have
jurisdiction over the decisions or final orders of quasi-judicial agencies. The MARINA is a quasi-
judicial agency, and though it is not among the enumerated agencies in Rule 43, the list is not
meant to be exclusive.

However, while Rule 43 provides for the appeal procedure from quasi-judicial agencies to the
CA, the aggrieved party must still exhaust administrative remedies prior to recourse to the CA.
Thus, Executive Order No. 292 otherwise known as the Administrative Code of 1987 provides
for the framework of administrative appeal prior to judicial review”
 BOOK VII - ADMINISTRATIVE PROCEDURE

ADMINISTRATIVE APPEAL IN CONTESTED CASES

Sec. 19. Appeal - Unless otherwise provided by law or executive order, an appeal from a final
decision of the agency may be taken to the Department head.

Sec. 20. Perfection of Administrative Appeals

Sec. 21. Effect of Appeal- The appeal shall stay the decision appealed from unless otherwise
provided by law, or the appellate agency directs execution pending appeal, as it may deem just,
considering the nature and circumstances of the case.

Sec. 22. Action on Appeal -The appellate agency shall review the records of the proceedings
and may, on its own initiative or upon motion, receive additional evidence.

Sec. 23. Finality of Decision of Appellate Agency- In any contested case, the decision of the
appellate agency shall become final and executory fifteen (15) days after the receipt by the
parties of a copy thereof.

MARINA

The MARINA was created under Presidential Decree No. 474 as an agency under the Office of
the President. Under Executive Order No. 546, the MARINA was designated as an attached
agency of the Ministry of Transportation and Communications. Under Executive Order No.
1011, the MARINA was granted the quasi-judicial functions formerly exercised by the Board of
Transportation pertaining to water transportation. The Administrative Code of 1987 reiterated
that the MARINA is an attached agency of the DOTC:

BOOK IV - THE EXECUTIVE BRANCH

TITLE XV - TRANSPORTATION AND COMMUNICATIONS
CHAPTER 6 - ATTACHED AGENCIES

Sec. 23. Attached Agencies and Corporations- The following agencies and corporations are
attached to the Department: The Philippine National Railways, the Maritime Industry Authority,
the Philippine National Lines, the Philippine Aerospace Development Corporation, the Metro
Manila Transit Corporation, the Office of Transport Cooperatives, the Philippine Ports Authority,
the Philippine Merchant Marine Academy, the Toll Regulatory Board, the Light Rail Transit
Authority, the Transport Training Center, the Civil Aeronautics Board, the National
Telecommunications Commission and the Manila International Airport Authority.
R.A. No. 9295, which was enacted on May 3, 2004, provides the jurisdiction, power and duties
of the MARINA including the power to:
Section 10. Jurisdiction; Powers; and Duties of MARINA Authority, the Philippine Merchant
Marine Academy, the Toll Regulatory Board, the Light Rail Transit Authority, the Transport
Training Center, the Civil Aeronautics Board, the National Telecommunications Commission
and the Manila International Airport Authority.
R.A. No. 9295, which was enacted on May 3, 2004, provides the jurisdiction, power and duties
of the MARINA including the power to:
Section 10. Jurisdiction; Powers; and Duties of MARINA- The MARINA shall have the power
and authority to:
10.1. Register vessels
10.2. Issue certificates of public convenience, or any extensions or amendments thereto,
authorizing the operation of all kinds, classes and types of vessels in domestic shipping;
provided, that no such certificate shall be valid for a period of more than twenty-five (25)
years
10.3. Modify, suspend or revoke at any time, upon notice and hearing, any certificate,
license or accreditation it may have issued to any domestic ship owner/operator
10.15. Investigate any complaint made in writing against any domestic ship
owner/operator, or any shipper, or any group of shippers regarding any matters involving
violations of the provisions of the Act and this R-IRR.
The status of the MARINA as an attached agency of the DOTC is crucial to the determination of
whether the DOTC has the power to review the decisions of the MARINA Board. Under Section
38, Chapter VII, Book IV of the Administrative Code of 1987, there are three kinds of
administrative relationship:
(1) Supervision and control
(2) Administrative supervision
(3) Attachment.

Among the three, the relationship of supervision and control between a department and a
subordinate agency is the most stringent since the department has the power to review the
decisions of the subordinate agency. This power is not available in administrative supervision as
Section 38 expressly states that the department shall have no power to review the decisions of
regulatory agencies in the exercise of their regulatory or quasi-judicial functions.
As to the relationship of attachment, while the law is silent on the presence or absence of such
power to review by the department, Section 38(3) would indicate that the Legislature did not
intend that the decisions of an attached agency be subject to review by the department prior to
appealing before the proper court. Section 38(3) indicates the most lenient kind of administrative
relationship since the lateral relationship is limited to policy and program coordination. Thus, in
Beja v. Court of Appeals, we distinguished an attached agency from one which is under
departmental supervision and control or administrative supervision.

Names Oral Presentation (30) Written (30)

Ling-o, Jdee

Malidom, Ave