CASE DIGEST: Laborte vs. Pagsanjan Tourism

G.R. No. 183860 : JANUARY 15, 2014

RODOLFO LABORTE and PHILIPPINE TOURISM AUTHORITY, Petitioners, v. PAGSANJAN TOURISM CONSUMERS COOPERATIVE and LELIZA S. FABRICIO, WILLIAM BASCO, FELICIANO BASCO, FREDIE BASCO, ROGER MORAL, NIDA ABARQUEZ, FLORANTE MUNAR, MARY JAVIER, MARIANO PELAGIO, ALEX EQUIZ, ALEX PELAGIO, ARNOLD OBIEN, EDELMIRO ABAQUIN, ARCEDO MUNAR, LIBRADO MALIWANAG, OSCAR LIWAG, OSCAR ABARQUEZ, JOEL BALAGUER, LIZARDO MUNAR, ARMANDO PANCHACOLA, MANUEL SAYCO, EDWIN MATIBAG, ARNEL VILLAGRACIA, RODOLFO LERON, ALFONSO ABANILLA, SONNY LAVA, AND DENNIES BASCO, Respondents.

REYES, J.:

FACTS:

Petitioner Philippine Tourism Authority (PTA) is a government-owned and controlled corporation that administers tourism zones. It used to operate the Philippine Gorge Tourist Zone Administration Complex, a declared tourist zone in Pagsanjan, Laguna.

Respondent Pagsanjan Tourism Consumers Cooperative (PTCC) is a cooperative organized since 1988 under the Cooperative Code of the Philippines. The other individual respondents are PTCC employees, consisting of restaurant staff and boatmen at the PTA Complex.

In 1989, PTA allowed PTTC to operate a restaurant business located at the main building of the PTA Complex and the boat ride services to ferry guest and tourists to and from the Pagsanjan Falls, paying a certain percentage of its earning to the PTA.

In 1993, the PTA implemented a reorganization and reshuffling in its top level management. Petitioner Rodolfo Laborte (Laborte) was designated as Area Manager with direct supervision over the PTA Complex and other entities at the Southern Luzon. Laborte served a written notice upon respondents to cease the operation of the latters restaurant business and boat ride services in view of the rehabilitation, facelifting and upgrading project of the PTA Complex.

PTCC filed with the RTC a Compaint for Prohibition, Injunction and Damages with Temporary Restraining Order (TRO) and Preliminary Injunction against Laborte. RTC then issued the TRO prayed for, prohibiting Laborte from causing PTCC to cease operations, closing the operation of the PTCCs restaurant and other activities, evicting PTCC and demolishing the building. On December 7, 1993, PTCC filed the RTC a Petition for Contempt with Motion for Early Resolution. It alleged that Laborte and his lawyers defied the TRO.

RTC rendered a decision in favor of the respondents. Dissatisfied, Laborte and PTA appealed to the CA. The CA promulgated its decision, affirming the RTC decision. The petitioners filed a Motion for Reconsideration, but the said motion was also denied for lack of merit.

ISSUE: Whether or not the closure of PTCCs restaurant and boat ride business was not a valid and lawful exercise of PTAs management prerogative?

HELD: There was a valid and lawful exercise of management prerogative.

Political law : government agency exercising its function


The PTA is a government owned and controlled corporation which was mandated to administer tourism zones. Based on this mandate, it was the PTAs obligation to adopt a comprehensive program and project to rehabilitate and upgrade the facilities of the PTA Complex. The Court finds that there was indeed a renovation of the Pagsanjan Administration Complex which was sanctioned by the PTA main office; and such renovation was done in good faith in performance of its mandated duties as tourism administrator. In the exercise ofits management prerogative to determine what is best for the said agency, the PTA had the right to terminate t any moment the PTCCs operations of the restaurant and the boat ride services since the PTCC has no contract, concession or franchise from the PTA to operate the above-mentioned businesses. As shown by the records, the operation of the restaurant and the boat ride services was merely tolerated, in order to extendfinancial assistance to its PTA employee-members who are members of the then fledging PTCC.

Except for receipts for rents paid by the PTCC to the PTA, the respondents failed to show any contract, concession agreement or franchise to operate the restaurant and boat ride services. In fact, the PTCC initially did not implead the PTA in its Complaint since it was well aware that there was no contract executed betweenthe PTCC and the PTA. While the PTCC has been operating the restaurant and boat ride services for almost ten (10) years until its closure, the same was by mere tolerance of the PTA.

In the consolidated case of Phil. Ports Authority v. Pier 8 Arrastre & Stevedoring Services, Inc., the Court upheld the authority of government agencies to terminate at any time hold-over permits. Thus, considering that the PTCCs operation of the restaurant and the boat ride services was by mere tolerance, the PTA can, at any time, terminate such operation.

Political law : liability of an public official

With respect to Laborte's liability in his official and personal capacity, the Court finds that Laborte was simply implementing the lawful order of the PTA Management. As a general rule "the officer cannot be held personally liable with the corporation, whether civilly or otherwise, for the consequences of his acts, if acted for and in behalf of the corporation, within the scope of his authority and in good faith." Furthermore, the Court also notes that the charges against petitioners Laborte and the PTA for grave coercion and for the violation of R.A. 6713 have all been dismissed. Thus, the Court finds no basis to hold petitioner Laborte liable.

GRANTED.