CASE DIGEST : SUBIC BAY METROPOLITAN AUTHORITY VS. SUBIC BAY MARINE EXPLORATORIUM, INC. G.R. No. 237591 GAERLAN

 FACTS : SBMA, established under R.A. 7227 to develop the Subic Bay Freeport Zone as a self-sustaining economic center without government subsidy, provides essential municipal services such as security, fire protection, street cleaning, and lighting costing around ₱388 million annually. To recover these expenses, it imposed the Common User Service Area (CUSA) Fee on locators after conducting public hearings, publishing notices, and issuing Board Resolutions to implement the fee, supported later by Administrative Order No. 31 from the Office of the President. Subic Bay Marine Exploratorium, Inc. (SBMEI), a locator, challenged the CUSA fee’s legality, leading the RTC to annul the resolutions and permanently enjoin SBMA from collecting the fee. When SBMA attempted to appeal, its Notice of Appeal was filed one day late due to internal handling delays, and both the RTC and CA denied the appeal for being out of time, strictly applying procedural rules. SBMA argued excusable negligence and insisted on its authority to impose the fee based on law, lease terms, and due process compliance, eventually elevating the matter to the Supreme Court through a petition for review on certiorari.

ISSUE : WON the SBMA's appeal may be given due course

HELD : SBMA admitted that its notice of appeal was filed one day late due to honest mistake and excusable negligence involving a newly hired clerk and the handling lawyer’s good faith belief on the date of receipt. It emphasized that it had no participatory negligence and urged that its right to appeal should not be prejudiced by its counsel’s error. SBMA argued that strict procedural rules must yield to substantial justice, especially since the case involves significant public interest and large financial implications for SBMA, the national government, and local government units. It also highlighted inconsistent court rulings, as other locators like Philip Morris and Subic Techno Park were ordered to pay the CUSA fee, making it unfair if SBMEI alone were exempt. In contrast, SBMEI insisted that the appeal was correctly denied for being filed beyond the reglementary period, stressing that negligence does not excuse non-compliance, and that the RTC decision had become final and immutable. The Supreme Court ruled in favor of SBMA, holding that while appeal is a statutory privilege requiring compliance with rules, procedural rules must sometimes yield to substantial justice, equity, and the merits of the case. The Court noted that the one-day delay was due to excusable negligence, and denying the appeal would cause grave injustice by depriving SBMA and the government of substantial funds needed for municipal services, especially since SBMEI continued to benefit from those services without paying. It also cited prior jurisprudence allowing late appeals based on compelling reasons and emphasized that preventing SBMA from pursuing its appeal would result in unfair advantage to SBMEI. Recognizing the public interest and financial implications, the Court granted the petition, reversed the lower courts’ rulings, and directed the RTC to give due course to SBMA’s appeal and elevate the records for review on the merits.