By Cherrie Anne E. Villahermosa
Variety News Staff

THE Supreme Court has reversed a trial court’s ruling in connection with a lease agreement between Commonwealth Ports Authority and Tinian Shipping Company Inc. and remanded the case to the trial court for determination of damages owed to CPA for unpaid fees from non-revenue passengers.
The Supreme Court justices, Chief Justice Miguel S. Demapan, Associate Justice Alexandro C. Castro and Justice Pro Tem F. Philip Carbullido in a slip opinion order yesterday, ruled that the trial court erred in allowing Tinian Shipping Company Inc. to introduce course of performance evidence of contract modification and in holding that CPA was not entitled to the fees for the disputed time period.
CPA appealed the trial court’s decision regarding the lease agreement between CPA and Tinian Shipping Company Inc. The dispute centers on CPA’s attempt to collect fees from non-revenue passengers from March 1999 through July 2000.
The Supreme Court in reversing the trial court’s decision said that although CPA subsequently entered into a mutual modification of the contract that waived its initial contractual right to collect the fee from employees of Tinian Shipping, this change is limited in scope and does not amount to a course of performance modification regarding the remaining passengers.
The Justices ruled that when a contract’s four corners are explicit, as is the situation in the present case, there is no need to go outside the document itself.
The justices remanded the case to the trial court for calculation of damages due to CPA for unpaid fees during the disputed time period for every passenger embarking from the Saipan Ferry Terminal.
The justices said such calculation shall not include fees for Tinian Shipping staff members since these fees have been waived by CPA.
The order stated that CPA and Tinian entered into lease agreement for dock space at the Tinian and Saipan Seaports.
The lease allowed Tinian Shipping the use of both the Saipan and Tinian Ferry Terminals in exchange for monthly rental payments of $180 for the dockage fee of $20 per square foot for the dock space at Saipan and $.05 per square foot for the dock space at Tinian and a per person fee of $3.75 for every person boarding a Tinian Shipping vessel at the Saipan Ferry Terminal.
Tinian Shipping leased the ferry terminals in order to operate a ferry service between the islands.
In order to calculate the per person lease payments, Tinian Shipping submitted monthly passenger reports to CPA showing the number of passengers boarding at the Saipan Seaport.
The reports identified the passengers as fare paying boarding on Saipan, fare-paying boarding on Tinian, complimentary, infant and staff.
CPA used these reports to determine the monthly passenger fee as required in the lease. Although the lease required a per-person fee for every person, this was not how the parties performed.
Non-revenue passengers boarding at Saipan were never included in the lease payment calculations. CPA contends that it waived the passenger fee for non-revenue passengers who were Tinian Shipping staff members.
Tinian Shipping started to exempt large numbers of non employees by issuing complimentary tickets to regular passengers.
CPA initially did not object. Tinian Shipping continued to send monthly reports showing large numbers of non-revenue passengers.
From 1996 through February 1999 passengers listed as infants, staff, complimentary and fare-paying passengers boarding at Tinian were not included in the lease payments.
CPA beginning July 1, 1999 sought to enforce the literal contract language under the lease and charged a fee for all persons boarding at the Saipa Ferry Terminal. Tinian Shipping refused to accept CPA’s decision to charge fees for all persons boarding.
CPA demanded strict adherence to the terms of the lease and insisted that it was entitled to collect fees for every person boarding at the Saipan Ferry Terminal. Tinian Shipping disputed this claim as a new interpretation of the lease. The parties could not agree and Tinian Shipping brought suit.
A bench trial ensued and the trial court on May 21, 2004, ruled that CPA was not entitled to recover any fees prior to August 2000.
CPA filed an appeal on June 23, 2004.