StaCON 3rdmeeint Flashcards
Eugenio v. Drilon, G.R. No. 109404, 22 January 1996
Preamble
Petitioner’s failure to develop the village. Suspended payment of his amortizations, but that petitioner resold one of the two lots to the said spouses Relevo, in whose favor title to the said property was registered. Private respondent further alleged that he suspended his payments because of petitioner’s failure to develop the village.
FACTS:In his Petition before this Court, petitioner avers that the Executive Secretary erred in applying P.D. 957 and in concluding that the non-development of the E & S Delta Village justified private respondent’s non-payment of his amortizations. Petitioner avers that inasmuch as the land purchase agreements were entered into in 1972, prior to the effectivity of P.D. 957 in 1976, said law cannot govern the transaction.
XXXXXX
P.D. 957 did not expressly provide for retroactivity in its entirety, but such can be plainly inferred from the unmistakable intent of the law.
We hold otherwise, and herewith rule that respondent Executive Secretary did not abuse his discretion, and that P.D. 957 is to be given retroactive effect so as to cover even those contracts executed prior to its enactment in 1976.
XXXXXX
The intent of the law, as culled from its preamble and from the situation, circumstances and conditions it sought to remedy, must be enforced. On this point, a leading authority on statutory construction stressed:
The intent of a statute is the law. . . . The intent is the vital part, the essence of the law, and the primary rule of construction is to ascertain and give effect to the intent. The intention of the legislature in enacting a law is the law itself, and must be enforced when ascertained, although it may not be consistent with the strict letter of the statute. Courts will not follow the letter of a statute when it leads away from the true intent and purpose of the legislature and to conclusions inconsistent with the general purpose of the act. . . . In construing statutes the proper course is to start out and follow the trite intent of the legislature and to adopt that sense which harmonizes best with the context and promotes in the fullest manner the apparent policy and objects of the legislature.
It goes without saying that, as an instrument of social justice, the law must favor the weak and the disadvantaged, including, in this instance, small lot buyers and aspiring homeowners. **P.D. 957 was enacted with no other end in view than to provide a protective mantle over helpless citizens who may fall prey to the manipulations and machinations of “unscrupulous subdivision and condominium sellers”, and such intent is nowhere expressed more clearly than in its preamble, pertinent portions of which read as follows:
**
WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent human settlement and to provide them with ample opportunities for improving their quality of life;
WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus endangering the health and safety of home and lot buyers;
WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to the buyers or titles free from liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision lots to different innocent purchasers for value;2 (emphasis supplied.)
From a dedicated reading of the preamble, it is manifest and unarguable that the legislative intent must have been to remedy the alarming situation by having P.D. 957 operate retrospectively even upon contracts already in existence at the time of its enactment. Indeed, a strictly prospective application of the statute will effectively emasculate it, for then the State will not be able to exercise its regulatory functions and curb fraudulent schemes and practices perpetrated under or in connection with those contracts and transactions which happen to have been entered into prior to P.D. 957, despite obvious prejudice to the very subdivision lot buyers sought to be protected by said law. It is hardly conceivable that the legislative authority intended to permit such a loophole to remain and continue to be a source of misery for subdivision lot buyers well into the future.
Adding force to the arguments for the retroactivity of P.D. 957 as a whole are certain of its provisions, viz., Sections 20, 21 and 23 thereof, which by their very terms have retroactive effect and will impact upon even those contracts and transactions entered into prior to P.D. 957’s enactment:
Sec. 20. Time of Completion. — Every owner or developer shall construct and provide the facilities, improvements, infrastructures and other forms of development, including water supply and lighting facilities, which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisement, within one year from the date of the issuance of the license for the subdivision or condominium project or such other period of time as may be fixed by the Authority.
Sec. 21. Sales Prior to Decree. — In cases of subdivision lots or condominium units sold or disposed of prior to the effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or condominium project to complete compliance with his or its obligations as provided in the preceding section within two years from the date of this Decree unless otherwise extended by the Authority or unless an adequate performance bond is filed in accordance with Section 6 hereof.
Failure of the owner or, developer to comply with the obligations under this and the preceding provisions shall constitute a violation punishable under Section 38 and 39 of this Decree.
Sec. 23. Non-Forfeiture of Payments. — No installment payment made by a buyer in a subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer, when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the owner or developer to develop the subdivision or condominium project according to the approved plans and within the time limit for complying with the same. Such buyer may, at his option, be reimbursed the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate. (emphasis supplied)
On the other hand, as argued by the respondent Executive Secretary, the application of P.D. 957 to the contracts in question will be consistent with paragraph 4 of the contracts themselves, which expressly provides:
(4) The party of the First Part hereby binds himself to subdivide, develop and improve the entire area covered by Transfer Certificate of Title No. 168119 of which the parcels of lands subject of this contract is a part in accordance with the provisions of Quezon City Ordinance No. 6561, S-66 and the Party of the First Part further binds himself to comply with and abide by all laws, rules and regulations respecting the subdivision and development of lots for residential purposes as may be presently in force or may hereafter be required by laws passed by the Congress of the Philippines or required by regulations of the Bureau of Lands, the General Registration Office and other government agencies. (emphasis supplied)
Moreover, as P.D. 957 is undeniably applicable to the contracts in question, it follows that Section 23 thereof had been properly invoked by private respondent when he desisted from making further payment to petitioner due to petitioner’s failure to develop the subdivision project according to the approved plans and within the time limit for complying with the same. (Such incomplete development of the subdivision and non-performance of specific contractual and statutory obligations on the part of the subdivision-owner had been established in the findings of the HLURB which in turn were confirmed by the respondent Executive Secretary in his assailed Decision.) Furthermore, respondent Executive Secretary also gave due weight to the following matters: although private respondent started to default on amortization payments beginning May 1975, so that by the end of July 1975 he had already incurred three consecutive arrearages in payments, nevertheless, the petitioner, who had the cancellation option available to him under the contract, did not exercise or utilize the same in timely fashion but delayed until May 1979 when he finally made up his mind to cancel the contracts. But by that time the land purchase agreements had already been overtaken by the provisions of P.D. 957, promulgated on July 12, 1976. (In any event, as pointed out by respondent HLURB and seconded by the Solicitor General, the defaults in amortization payments incurred by private respondent had been effectively condoned by the petitioner, by reason of the latter’s tolerance of the defaults for a long period of time.)
Likewise, there is no merit in petitioner’s contention that respondent Secretary exceeded his jurisdiction in ordering the refund of private respondent’s payments on Lot 12 although (according to petitioner) only Lot 13 was the subject of the complaint. Respondent Secretary duly noted that the supporting documents submitted substantiating the claim of non-development justified such order inasmuch as such claim was also the basis for non-payment of amortizations on said Lot 12.
Finally, since petitioner’s motion for reconsideration of the (Executive Secretary’s) Decision dated March 10, 1992 was filed only on the 21st day from receipt thereof, said decision had become final and executory, pursuant to Section 7 of Administrative Order No. 18 dated February 12, 1987, which provides that “(d)ecisions/ resolutions/orders of the Office of the President shall, except as otherwise provided for by special laws, become final after the lapse of fifteen (15) days from receipt of a copy thereof . . . , unless a motion for reconsideration thereof is filed within such period.”
WHEREFORE, there being no showing of grave abuse of discretion, the petition is DENIED due course and is hereby DISMISSED. No costs.
SO ORDERED.
Courts will not follow the letter of a statute when?
Courts will not follow the letter of a statute when it leads away from the true intent and purpose of the legislature and to conclusions inconsistent with the general purpose of the act.
People vs Echavez, 95 SCRA 663
Preamble
The legal issue in this case is whether Presidential Decree No. 772, which penalizes squatting and similar acts, applies to agricultural lands. The decree (which took effect on August 20, 1975) provides:
FACTS:Five of the informations, wherein Ano Dacullo, Geronimo Oroyan, Mario Aparici, Ruperto Cajes and Modesto Suello were the accused, were raffled to Judge Vicente B. Echaves, Jr. of Branch II (Criminal Cases Nos. 1824, 1828, 1832, 1833 and 1839, respectively).
Before the accused could be arraigned, Judge Echaves motu proprio issued an omnibus order dated December 9, 1977 dismissing the five informations on the grounds (1) that it was alleged that the accused entered the land through “stealth and strategy”, whereas under the decree the entry should be effected “with the use of force, intimidation or threat, or taking advantage of the absence or tolerance of the landowner”, and (2) that under the rule of ejusdem generis the decree does not apply to the cultivation of a grazing land.
Because of that order, the fiscal amended the informations by using in lieu of “stealth and strategy” the expression “with threat, and taking advantage of the absence of the ranchowner and/or tolerance of the said ranchowner”. The fiscal asked that the dismissal order be reconsidered and that the amended informations be admitted.
The lower court denied the motion. It insisted that the phrase “and for other purposes” in the decree does not include agricultural purposes because its preamble does not mention the Secretary of Agriculture and makes reference to the affluent class.
From the order of dismissal, the fiscal appealed to this Court under Republic Act No. 5440. The appeal is devoid of merit.
ISSUE:whether Presidential Decree No. 772, which penalizes squatting and similar acts, applies to agricultural lands.
HELD:We hold that the lower court correctly ruled that the decree does not apply to pasture lands because its preamble shows that it was intended to apply to squatting in urban communities or more particularly to illegal constructions in squatter areas made by well-to-do individuals. The squating complained of involves pasture lands in rural areas.
We hold that the lower court correctly ruled that the decree does not apply to pasture lands because its preamble shows that it was intended to apply to squatting in urban communities or more particularly to illegal constructions in squatter areas made by well-to-do individuals. The squating complained of involves pasture lands in rural areas.
The preamble of the decree is quoted below:
WHEREAS, it came to my knowledge that despite the issuance of Letter of Instruction No. 19 dated October 2, 1972, directing the Secretaries of National Defense, Public Work. 9 and communications, Social Welfare and the Director of Public Works, the PHHC General Manager, the Presidential Assistant on Housing and Rehabilitation Agency, Governors, City and Municipal Mayors, and City and District Engineers, “to remove an illegal constructions including buildings on and along esteros and river banks, those along railroad tracks and those built without permits on public and private property.” squatting is still a major problem in urban communities all over the country;
WHEREAS, many persons or entities found to have been unlawfully occupying public and private lands belong to the affluent class;
WHEREAS, there is a need to further intensify the government’s drive against this illegal and nefarious practice.
It should be stressed that Letter of Instruction No. 19 refers to illegal constructions on public and private property. It is complemented by Letter of Instruction No. 19-A which provides for the relocation of squatters in the interest of public health, safety and peace and order.
On the other hand, it should be noted that squatting on public agricultural lands, like the grazing lands involved in this case, is punished by Republic Act No. 947 which makes it unlawful for any person, corporation or association to forcibly enter or occupy public agricultural lands. That law provides:
SECTION 1. It shall be unlawful for any person corporation or association to enter or occupy, through force, intimidation, threat, strategy or stealth, any public agriculture land including such public lands as are granted to private individuals under the provision of the Public Land Act or any other laws providing for the of public agriculture lands in the Philippines and are duly covered by the corresponding applications for the notwithstanding standing the fact that title thereto still remains in the Government or for any person, natural or judicial to investigate induce or force another to commit such acts.
Violations of the law are punished by a fine of not exceeding one thousand or imprisonment for not more than one year, or both such fine and imprisonment in the discretion of the court, with subsidiary imprisonment in case of insolvency. (See People vs. Lapasaran 100 Phil. 40.)
The rule of ejusdem generis (of the same kind or species) invoked by the trial court does not apply to this case. Here, the intent of the decree is unmistakable. It is intended to apply only to urban communities, particularly to illegal constructions. The rule of ejusdem generis is merely a tool of statutory construction which is resorted to when the legislative intent is uncertain (Genato Commercial Corp. vs. Court of Tax Appeals, 104 Phil. 615,618; 28 C.J.S. 1049-50).
WHEREFORE, the trial court’s order of dismissal is affirmed. No costs.
SO ORDERED.
People vs Yabut (GR 39085 September 27, 1933)
Enacting Clause
The English translation of article 160 is as follows:
Commission of another crime during service of penalty imposed for another previous offense — Penalty. — Besides the provisions of rule 5 of article 62, any person who shall commit a felony after having been convicted by final judgment, before beginning to serve such sentence, or while serving the same, shall be punished by the maximum period of the penalty prescribed by law for the new felony.
Any convict of the class referred to in this article, who is not a habitual criminal, shall be pardoned at the age of seventy years if he shall have already served out his original sentence, or when he shall complete it after reaching said age, unless by reason of his conduct or other circumstances he shall not be worthy of such clemency.
The appellant places much stress upon the word “another” appearing in the English translation of the headnote of article 160 and would have us accept his deduction from the headnote that article 160 is applicable only when the new crime which is committed by a person already serving sentence is different from the crime for which he is serving sentence.
FACTS:This is an appeal from the judgment of the Court of First Instance of Manila, convicting the appellant of the crime of murder and assessing the death penalty.
The appellant, Yabut, was charged in the Court of First Instance of Manila with the crime of murder upon the following information:
That on or about the 1st day of August, 1932, in the City of Manila, Philippine Islands, the accused Antonio Yabut, then a prisoner serving sentence in the Bilibid Prison, in said city, did then and there, with intent to kill, wilfully, unlawfully, feloniously and treacherously, assault, beat and use personal violence upon one Sabas Aseo, another prisoner also serving sentence in Bilibid, by then and there hitting the said Sabas Aseo suddenly and unexpectedly from behind with a wooden club, without any just cause, thereby fracturing the skull of said Sabas Aseo and inflicting upon him various other physical injuries on different parts of the body which caused the death of the latter about twenty-four (24) hours thereafter.
That at the time of the commission of this offense, the said Antonio Yabut was a recidivist, he having previously been convicted twice of the crime of homicide and once of serious physical injuries, by virtue of final sentences rendered by competent tribunals.
Upon arraignment, the accused plead not guilty. The court below made the following findings of fact which, from an independent examination of the entire testimony, we are convinced, are supported by the evidence beyond reasonable doubt:
ISSUE:the appellant contends the court below erred in applying article 160 in the present case which was a prosecution for murder (involving homicide).
HELD: The language is plain and unambiguous.
The English translation of article 160 is as follows:
Commission of another crime during service of penalty imposed for another previous offense — Penalty. — Besides the provisions of rule 5 of article 62, any person who shall commit a felony after having been convicted by final judgment, before beginning to serve such sentence, or while serving the same, shall be punished by the maximum period of the penalty prescribed by law for the new felony.
Any convict of the class referred to in this article, who is not a habitual criminal, shall be pardoned at the age of seventy years if he shall have already served out his original sentence, or when he shall complete it after reaching said age, unless by reason of his conduct or other circumstances he shall not be worthy of such clemency.
The appellant places much stress upon the word “another” appearing in the English translation of the headnote of article 160 and would have us accept his deduction from the headnote that article 160 is applicable only when the new crime which is committed by a person already serving sentence is different from the crime for which he is serving sentence. Inasmuch as the appellant was serving sentence for the crime of homicide, the appellant contends the court below erred in applying article 160 in the present case which was a prosecution for murder (involving homicide). While we do not concede that the appellant is warranted in drawing the deduction mentioned from the English translation of the caption of article 160, it is clear that no such deduction could be drawn from the caption. Apart from this, however, there is no warrant whatever for such a deduction (and we do not understand the appellant to assert it) from the text itself of article 160. The language is plain and unambiguous. There is not the slightest intimation in the text of article 160 that said article applies only in cases where the new offense is different in character from the former offense for which the defendant is serving the penalty.
**It is familiar law that when the text itself of a statute or a treaty is clear and unambiguous, there is neither necessity nor propriety in resorting to the preamble or headings or epigraphs of a section of interpretation of the text, **especially where such epigraphs or headings of sections are mere catchwords or reference aids indicating the general nature of the text that follows. (Cf. In re Estate of Johnson, 39 Phil., 156, 166.) A mere glance at the titles to the articles of the Revised Penal code will reveal that they were not intended by the Legislature to be used as anything more than catchwords conveniently suggesting in a general way the subject matter of each article. Being nothing more than a convenient index to the contents of the articles of the Code, they cannot, in any event have the effect of modifying or limiting the unambiguous words of the text. Secondary aids may be consulted to remove, not to create doubt.
The remaining assignments of error relate to the evidence. We have come to the conclusion, after a thorough examination of the record, that the findings of the court below are amply sustained by the evidence, except upon the fact of the existence of treachery (alevosia). As some members of the court entertain a reasonable doubt that the existence of treachery (alevosia) was established, it results that the penalty assessed by the court below must be modified. We find the defendant guilty of homicide and, applying article 249 of the Revised Penal Code in connection with article 160 of the same, we sentence the defendant- appellant to the maximum degree of reclusion temporal, that is to say, to twenty years of confinement and to indemnify the heirs of the deceased Sabas Aseo (alias Sabas Asayo), in the sum of P1,000. Costs de oficio.
Avanceña, C.J., Street, Malcolm, Villa-Real, Abad Santos, Hull, Vickers, and Imperial, JJ., concur.
Samson v. Daway, G.R. Nos. 160054-55, 21 July 2004
Repealing Clause
challenging the jurisdiction of the trial court over the offense charged”parts of Acts” and “inconsistent herewith” only means that the repeal pertains only to provisions which are repugnant or not susceptible of harmonization with R.A. No. 8293.6 Section 27 of R.A. No. 166, however, is consistent and in harmony with Section 163 of R.A. No. 8293. Had R.A. No. 8293 intended to vest jurisdiction over violations of intellectual property rights with the Metropolitan Trial Courts, it would have expressly stated so under Section 163 thereof.
FACTS:The undisputed facts show that on March 7, 2002, two informations for unfair competition under Section 168.3 (a), in relation to Section 170, of the Intellectual Property Code (Republic Act No. 8293), similarly worded save for the dates and places of commission, were filed against petitioner Manolo P. Samson, the registered owner of ITTI Shoes. The accusatory portion of said informations read:
That on or about the first week of November 1999 and sometime prior or subsequent thereto, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, above-named accused, owner/proprietor of ITTI Shoes/Mano Shoes Manufactuirng Corporation located at Robinson’s Galleria, EDSA corner Ortigas Avenue, Quezon City, did then and there willfully, unlawfully and feloniously distribute, sell and/or offer for sale CATERPILLAR products such as footwear, garments, clothing, bags, accessories and paraphernalia which are closely identical to and/or colorable imitations of the authentic Caterpillar products and likewise using trademarks, symbols and/or designs as would cause confusion, mistake or deception on the part of the buying public to the damage and prejudice of CATERPILLAR, INC., the prior adopter, user and owner of the following internationally: “CATERPILLAR”, “CAT”, “CATERPILLAR & DESIGN”, “CAT AND DESIGN”, “WALKING MACHINES” and “TRACK-TYPE TRACTOR & DESIGN.”
CONTRARY TO LAW.3
On April 19, 2002, petitioner filed a motion to suspend arraignment and other proceedings in view of the existence of an alleged prejudicial question involved in Civil Case No. Q-00-41446 for unfair competition pending with the same branch; and also in view of the pendency of a petition for review filed with the Secretary of Justice assailing the Chief State Prosecutor’s resolution finding probable cause to charge petitioner with unfair competition. In an Order dated August 9, 2002, the trial court denied the motion to suspend arraignment and other proceedings.
On August 20, 2002, petitioner filed a twin motion to quash the informations and motion for reconsideration of the order denying motion to suspend, this time challenging the jurisdiction of the trial court over the offense charged. He contended that since under Section 170 of R.A. No. 8293, the penalty4 of imprisonment for unfair competition does not exceed six years, the offense is cognizable by the Municipal Trial Courts and not by the Regional Trial Court, per R.A. No. 7691.
PETITIONER’s contention: He contended that since under Section 170 of R.A. No. 8293, the penalty of imprisonment for unfair competition does not exceed six years, the offense is cognizable by the Municipal Trial Courts and not by the Regional Trial Court, per R.A. No. 7691.
ISSUES: (1) Which court has jurisdiction over criminal and civil cases for violation of intellectual property rights?
HELD:
Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety, otherwise, it would not have used the phrases “parts of Acts” and “inconsistent herewith;” and it would have simply stated “Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended are hereby repealed.” It would have removed all doubts that said specific laws had been rendered without force and effect. The use of the phrases “parts of Acts” and “inconsistent herewith” only means that the repeal pertains only to provisions which are repugnant or not susceptible of harmonization with R.A. No. 8293.6 Section 27 of R.A. No. 166, however, is consistent and in harmony with Section 163 of R.A. No. 8293. Had R.A. No. 8293 intended to vest jurisdiction over violations of intellectual property rights with the Metropolitan Trial Courts, it would have expressly stated so under Section 163 thereof.
Moreover, the settled rule in statutory construction is that in case of conflict between a general law and a special law, the latter must prevail. Jurisdiction conferred by a special law to Regional Trial Courts must prevail over that granted by a general law to Municipal Trial Courts.7
Moreover, the settled rule in statutory construction is that in case of conflict between a general law and a special law, the latter must prevail. Jurisdiction conferred by a special law to Regional Trial Courts must prevail over that granted by a general law to Municipal Trial Courts.
In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws conferring jurisdiction over violations of intellectual property rights to the Regional Trial Court. They should therefore prevail over R.A. No. 7691, which is a general law. Hence, jurisdiction over the instant criminal case for unfair competition is properly lodged with the Regional Trial Court even if the penalty therefor is imprisonment of less than 6 years, or from 2 to 5 years and a fine ranging from P50,000.00 to P200,000.00.
In fact, to implement and ensure the speedy disposition of cases involving violations of intellectual property rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC dated February 19, 2002 designating certain Regional Trial Courts as Intellectual Property Courts. On June 17, 2003, the Court further issued a Resolution consolidating jurisdiction to hear and decide Intellectual Property Code and Securities and Exchange Commission cases in specific Regional Trial Courts designated as Special Commercial Courts.
The case of Mirpuri v. Court of Appeals,10 invoked by petitioner finds no application in the present case. Nowhere in Mirpuri did we state that Section 27 of R.A. No. 166 was repealed by R.A. No. 8293. Neither did we make a categorical ruling therein that jurisdiction over cases for violation of intellectual property rights is lodged with the Municipal Trial Courts. The passing remark in Mirpuri on the repeal of R.A. No. 166 by R.A. No. 8293 was merely a backgrounder to the enactment of the present Intellectual Property Code and cannot thus be construed as a jurisdictional pronouncement in cases for violation of intellectual property rights.
Anent the second issue, petitioner failed to substantiate his claim that there was a prejudicial question. In his petition, he prayed for the reversal of the March 26, 2003 order which sustained the denial of his motion to suspend arraignment and other proceedings in Criminal Case Nos. Q-02-108043-44. For unknown reasons, however, he made no discussion in support of said prayer in his petition and reply to comment. Neither did he attach a copy of the complaint in Civil Case No. Q-00-41446 nor quote the pertinent portion thereof to prove the existence of a prejudicial question.
At any rate, there is no prejudicial question if the civil and the criminal action can, according to law, proceed independently of each other.11 Under Rule 111, Section 3 of the Revised Rules on Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence.
In the case at bar, the common element in the acts constituting unfair competition under Section 168 of R.A. No. 8293 is fraud.12 Pursuant to Article 33 of the Civil Code, in cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Hence, Civil Case No. Q-00-41446, which as admitted13 by private respondent also relate to unfair competition, is an independent civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that will justify the suspension of the criminal cases at bar.
Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure provides –
SEC. 11. Suspension of arraignment. – Upon motion by the proper party, the arraignment shall be suspended in the following cases –
x x x x x x x x x
(c) A petition for review of the resolution of the prosecutor is pending at either the Department of Justice, or the Office of the President; Provided, that the period of suspension shall not exceed sixty (60) days counted from the filing of the petition with the reviewing office.
While the pendency of a petition for review is a ground for suspension of the arraignment, the aforecited provision limits the deferment of the arraignment to a period of 60 days reckoned from the filing of the petition with the reviewing office. It follows, therefore, that after the expiration of said period, the trial court is bound to arraign the accused or to deny the motion to defer arraignment.
In the instant case, petitioner failed to establish that respondent Judge abused his discretion in denying his motion to suspend. His pleadings and annexes submitted before the Court do not show the date of filing of the petition for review with the Secretary of Justice.14 Moreover, the Order dated August 9, 2002 denying his motion to suspend was not appended to the petition. He thus failed to discharge the burden of proving that he was entitled to a suspension of his arraignment and that the questioned orders are contrary to Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure. Indeed, the age-old but familiar rule is that he who alleges must prove his allegations.
In sum, the dismissal of the petition is proper considering that petitioner has not established that the trial court committed grave abuse of discretion. So also, his failure to attach documents relevant to his allegations warrants the dismissal of the petition, pursuant to Section 3, Rule 46 of the Rules of Civil Procedure, which states:
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. — The petition shall contain the full names and actual addresses of all the petitioners and respondents, a concise statement of the matters involved, the factual background of the case, and the grounds relied upon for the relief prayed for.
It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the respondent with the original copy intended for the court indicated as such by the petitioner, and shall be accompanied by a clearly legible duplicate original or certified true copy of the judgment, order, resolution, or ruling subject thereof, such material portions of the record as are referred to therein, and other documents relevant or pertinent thereto.
x x x x x x x x x
The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. (Emphasis added)
WHEREFORE, in view of all the foregoing, the petition is dismissed.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., concur.
A civil action is prejudicial
A civil action is prejudicial when it refers to a fact separate and distinct from the offense charged but yet so intimately related thereto as to be determinative off the guilt or innocent of the accused. For example, a civil action for the annulment of the second marriage is, with respect to the criminal charge for bigamy a prejudicial question as to require its adjudication before the criminal prosecution may proceed. However, where the only ground upon which the civil action for annulment is based is that the second marriage was contracted allegedly good faith at a time when the first marriage was still in existence, such civil action does not constitute a prejudicial question for there is no issue therein that may be determinative of petitioner’s innocence in the criminal case. That second marriage was contracted in good faith is immaterial in the civil action. It is material only in the criminal case to show lack of criminal intent.
Roma Drug v RTC of Guagua (2009)
Repealing clause
It may be that Rep. Act No. 9502 (Cheaper medicine bill)did not expressly repeal any provision of the SLCD. However, it is clear that the SLCO’s classification of “unregistered imported drugs” as “counterfeit drugs,” and of corresponding criminal penalties therefore are irreconcilably in the imposition conflict with Rep. Act No. 9502 since the latter indubitably grants private third persons the unqualified right to import or otherwise use such drugs. Where a statute of later date, such as Rep. Act No. 9502, clearly reveals an intention on the part of the legislature to abrogate a prior act on the subject that intention must be given effect.9 When a subsequent enactment covering a field of operation coterminus with a prior statute cannot by any reasonable construction be given effect while the prior law remains in operative existence because of irreconcilable conflict between the two acts, the latest legislative expression prevails and the prior law yields to the extent of the conflict.10 Irreconcilable inconsistency between two laws embracing the same subject may exist when the later law nullifies the reason or purpose of the earlier act, so that the latter loses all meaning and function.11 Legis posteriors priores contrarias abrogant.
‘an unregistered imported drug product.”
“counterfeit” is based solely on the fact that they were imported from abroad and not purchased from the Philippine-registered owner of the patent or trademark of the drugs.
Republic Act No. 9502, also known as the “Universally Accessible Cheaper and Quality Medicines Act of 2008”.6
It may be that Rep. Act No. 9502 did not expressly repeal any provision of the SLCD. However, it is clear that the SLCO’s classification of “unregistered imported drugs” as “counterfeit drugs,” and of corresponding criminal penalties therefore are irreconcilably in the imposition conflict with Rep. Act No. 9502 since the latter indubitably grants private third persons the unqualified right to import or otherwise use such drugs. Where a statute of later date, such as Rep. Act No. 9502, clearly reveals an intention on the part of the legislature to abrogate a prior act on the subject that intention must be given effect.9 When a subsequent enactment covering a field of operation coterminus with a prior statute cannot by any reasonable construction be given effect while the prior law remains in operative existence because of irreconcilable conflict between the two acts, the latest legislative expression prevails and the prior law yields to the extent of the conflict.10 Irreconcilable inconsistency between two laws embracing the same subject may exist when the later law nullifies the reason or purpose of the earlier act, so that the latter loses all meaning and function.11 Legis posteriors priores contrarias abrogant.
FACTS: On 14 August 2000, a team composed of the National Bureau of Investigation (NBI) operatives and inspectors of the Bureau of Food and Drugs (BFAD) conducted a raid on petitioner Roma Drug, a duly registered sole proprietorship of petitioner Romeo Rodriguez (Rodriguez) operating a drug store located at San Matias, Guagua, Pampanga. The raid was conducted pursuant to a search warrant issued by the Regional Trial Court (RTC), Branch 57, Angeles City. The raiding team seized several imported medicines, including Augmentin (375mg.) tablets, Orbenin (500mg.) capsules, Amoxil (250mg.) capsules and Ampiclox (500mg.). It appears that Roma Drug is one of six drug stores which were raided on or around the same time upon the request of SmithKline Beecham Research Limited (SmithKline), a duly registered corporation which is the local distributor of pharmaceutical products manufactured by its parent London-based corporation. The local SmithKline has since merged with Glaxo Wellcome Phil. Inc to form Glaxo SmithKline, private respondent in this case. The seized medicines, which were manufactured by SmithKline, were imported directly from abroad and not purchased through the local SmithKline, the authorized Philippine distributor of these products.
The NBI subsequently filed a complaint against Rodriguez for violation of Section 4 (in relation to Sections 3 and 5) of Republic Act No. 8203, also known as the Special Law on Counterfeit Drugs (SLCD), with the Office of the Provincial Prosecutor in San Fernando, Pampanga. The section prohibits the sale of counterfeit drugs, which under Section 3(b)(3), includes “an unregistered imported drug product.” The term “unregistered” signifies the lack of registration with the Bureau of Patent, Trademark and Technology Transfer of a trademark, tradename or other identification mark of a drug in the name of a natural or juridical person, the process of which is governed under Part III of the Intellectual Property Code.
In this case, there is no doubt that the subject seized drugs are identical in content with their Philippine-registered counterparts. There is no claim that they were adulterated in any way or mislabeled at least. Their classification as “counterfeit” is based solely on the fact that they were imported from abroad and not purchased from the Philippine-registered owner of the patent or trademark of the drugs.
Through its Resolution dated 15 October 2001, the Court issued a temporary restraining order enjoining the RTC from proceeding with the trial against Rodriguez, and the BFAD, the NBI and Glaxo Smithkline from prosecuting the petitioners.
The Office of the Solicitor General casts the question as one of policy wisdom of the law that is, beyond the interference of the judiciary. Again, the presumption of constitutionality of statutes is invoked, and the assertion is made that there is no clear and unequivocal breach of the Constitution presented by the SLCD.
The constitutional aspect of this petition raises obviously interesting questions. However, such questions have in fact been mooted with the passage in 2008 of Republic Act No. 9502, also known as the “Universally Accessible Cheaper and Quality Medicines Act of 2008”.
XXXXXX
It may be that Rep. Act No. 9502 did not expressly repeal any provision of the SLCD. However, it is clear that the SLCO’s classification of “unregistered imported drugs” as “counterfeit drugs,” and of corresponding criminal penalties therefore are irreconcilably in the imposition conflict with Rep. Act No. 9502 since the latter indubitably grants private third persons the unqualified right to import or otherwise use such drugs. Where a statute of later date, such as Rep. Act No. 9502, clearly reveals an intention on the part of the legislature to abrogate a prior act on the subject that intention must be given effect. When a subsequent enactment covering a field of operation coterminus with a prior statute cannot by any reasonable construction be given effect while the prior law remains in operative existence because of irreconcilable conflict between the two acts, the latest legislative expression prevails and the prior law yields to the extent of the conflict. Irreconcilable inconsistency between two laws embracing the same subject may exist when the later law nullifies the reason or purpose of the earlier act, so that the latter loses all meaning and function. Legis posteriors priores contrarias abrogant.
For the reasons above-stated, the prosecution of petitioner is no longer warranted and the quested writ of prohibition should accordingly be issued.
Antonio vs Miranda, GR 135869, September 22, 1999
Separability clause
Is the period to appeal a decision of a municipal trial court to the Commission on Elections (“COMELEC”) in an election protest involving a barangay position five (5) days per COMELEC Rules of Procedure or ten (10) days as provided for in Republic Act 6679[1] and the Omnibus Election Code? This is the sole issue posed in the instant petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure seeking to annul the order dated August 3, 1998 of the Second Division of the COMELEC,[2] dismissing the appeal of petitioner Rustico Antonio for having been filed out of time pursuant to COMELEC Rules of Procedure, and the order promulgated on October 14, 1998 of the COMELEC en banc, denying petitioner’s motion for reconsideration.
FACTS:The antecedents as found by the COMELEC in the order dated October 14, 1998 are:
“The parties in this case were rival candidates for the Punong Barangay of Barangay Ilaya, Las Piñas City, Metro Manila. After the board of canvassers proclaimed protestee-appellant Rustico Antonio, protestant-appellee Vicente T. Miranda, Jr. filed an election protest docketed as Election Protest Case No. 97-0017 against Antonio before the Metropolitan Trial Court of Las Piñas City (Branch LXXIX). The trial court rendered a Decision dated 9 March 1998, the dispositive portion of which states:
WHEREFORE, the Court declares the protestant Vicente Miranda as the duly elected Barangay Chairman of Barangay Ilaya, Las Piñas City, Metro Manila.
Antonio admitted receipt of the above-quoted decision on 18 March 1998. Subsequently, Antonio filed a Notice of Appeal with the trial court on 27 March 1998 or nine (9) days after receipt thereof. Meanwhile, Miranda moved to execute the trial court’s decision. Rustico, in his Opposition to the Motion for Execution or Execution Pending Appeal, argued against Miranda’s motion for execution. After the trial court denied the motion for execution, the records of this case was forwarded to the Commission (Second Division).
On 10 August 1998, protestee-appellant Rustico Antonio received from this Commission (Second Division) an Order dated 3 August 1998 stating as follows:
In the light of the aforequoted rules, protestee RUSTICO ANTONIO, failed to perfect his appeal within the five (5) days period prescribed for perfecting his appeal, as he filed his Notice of Appeal only on March 27, 1998 or nine (9) days after receipt of the decision sought to be appealed.
The Period aforestated is jurisdictional and failure of the protestee to perfect his appeal within the said period deprives the Commission of its appellate jurisdiction.
ACCORDINGLY, the instant appeal is hereby DISMISSED for lack of jurisdiction.”
Hence, this motion for reconsideration.
The instant Motion for Reconsideration is DENIED and We AFFIRM the Order dated 3 August 1998 of this Commission (Second Division).”[3]
Aptly, the rules on statutory construction prescribe:
“The general rule is that where part of a statute is void as repugnant to the Constitution, while another part is valid, the valid portion, if separable from the invalid, may stand and be enforced. The presence of a separability clause in a statute creates the presumption that the legislature intended separability, rather than complete nullity, of the statute. To justify this result, the valid portion must be so far independent of the invalid portion that it is fair to presume that the legislature would have enacted it by itself if it had supposed that it could not constitutionally enact the other. Enough must remain to make a complete, intelligible, and valid statute, which carries out the legislative intent. The void provisions must be eliminated without causing results affecting the main purpose of the act in a manner contrary to the intention of the legislature. The language used in the invalid part of the statute can have no legal effect or efficacy for any purpose whatsoever, and what remains must express the legislative will independently of the void part, since the court has no power to legislate.
Section 9 of Republic Act 6679 reads:
“SEC. 9. A sworn petition contesting the election of a barangay official may be filed with the proper municipal or metropolitan trial court by any candidate who has duly filed a certificate of candidacy and has been voted for a barangay office within ten (10) days after the proclamation of the results of the election. The trial court shall decide the election protest within thirty (30) days after the filing thereof. The decision of the municipal or metropolitan trial court may be appealed within ten (10) days from receipt of a copy thereof by the aggrieved party to the regional trial court which shall decide the issue within thirty (30) days from receipt of the appeal and whose decision on questions of fact shall be final and non-appealable. For purposes of the barangay elections, no pre-proclamation cases shall be allowed.”
Similarly, Section 252 of the Omnibus Election Code provides:
“SEC. 252. Election contest for barangay offices. – A sworn petition contesting the election of a barangay officer shall be filed with the proper municipal or metropolitan trial court by any candidate who has duly filed a certificate of candidacy and has been voted for the same office within ten days after the proclamation of the results of the election. The trial court shall decide the election protest within fifteen days after the filing thereof. The decision of the municipal or metropolitan trial court may be appealed within ten days from receipt of a copy thereof by the aggrieved party to the regional trial court which shall decide the case within thirty days from its submission, and whose decisions shall be final.”
No less than the 1987 Constitution (Article IX-A, Section 6 and Article IX-C, Section 3) grants and authorizes this Commission to promulgate its own rules of procedure as long as such rules concerning pleadings and practice do not diminish, increase or modify substantive rights. Hence, the COMELEC Rules of Procedure promulgated in 1993 as amended in 1994 is no ordinary interpretative or administrative ruling. It is promulgated by this Commission pursuant to a constitutionally mandated authority which no legislative enactment can amend, revise or repeal.
The COMELEC Rules of Procedure (Rule 37 Section 21) provides that from the decision rendered by the court, the aggrieved party may appeal to the Commission on Elections within five (5) days after the promulgation of the decision. Rule 22 Section 9 (d) of Our Rules of Procedure further provides that an appeal from decisions of courts in election protest cases may be dismissed at the instance of the Commission for failure to file the required notice of appeal within the prescribed period.
HELD:It is beyond cavil that legislative enactments prevail over rules of procedure promulgated by administrative or quasi-judicial bodies and that rules of procedure should be consistent with standing legislative enactments. In relation to the above-quoted Section 9 of Republic Act 6679 and Section 252 of the Omnibus Election Code, petitioner points out that in Flores vs. Commission on Elections[6], this Court had declared that decisions of the Metropolitan or Municipal Court in election protest cases involving barangay officials are no longer appealable to the Regional Trial Court but to the COMELEC pursuant to Section 2(2) of Article IX-C of the 1987 Constitution.
Petitioner submits that the dispositive portion in the Flores case only declared unconstitutional that portion of Section 9 of Republic Act 6679 providing for appeal to the Regional Trial Court but not the ten (10) day period of appeal. The dispositive portion of the Flores case reads:
“1. Declaring Section 9 of Rep. Act No. 6679 UNCONSTITUTIONAL insofar as it provides that barangay election contests decided by the municipal or metropolitan trial court shall be appealable to the regional trial court:”
Petitioner admits that the provisions in Republic Act No. 6679 and for that matter the Omnibus Election Code providing for appellate jurisdiction to the Regional Trial Court had been declared unconstitutional in the aforecited Flores case. A verbatim comparison of both provisions reveals that they provide the same remedy, that is, appeal from a decision of the municipal or metropolitan trial court in barangay election cases to the regional trial court. Both provisions provide that (1) results of a barangay election may be contested by filing a sworn petition with the municipal trial court within ten days from proclamation; (2) the MTC shall decide within thirty days per Republic Act No. 6679 or fifteen days per Omnibus Election Code; and (3) the decision of the municipal trial court may be appealed to the regional trial court within ten days from receipt by the aggrieved party, which decision is final and non-appealable. There is no appreciable basis to make a distinction between the two provisions, except for their different numbers, to advance that they provide for two different remedies. It would be superfluous to insist on a categorical declaration of the unconstitutionality of the appeal provided for in Sec. 252 of the Omnibus Election Code, as the same appeal in Sec. 9, Republic Act No. 6679 had already been categorically declared unconstitutional. Further, Sec. 252 of the Omnibus Election Code[8] as amended by the new law, Republic Act No. 6679[9], has in effect, been superseded by the latter. While the appellate procedure has been retained by the amendatory act, Republic Act No. 6679 nonetheless supersedes the verbatim provision in the Omnibus Election Code. Hence, it was not necessary for Flores to mention Sec. 252 of the Omnibus Election Code, considering that as aforestated, Section 9 of Republic Act No. 6679 was a mere reenactment of the former law.
XXXXXX
Petitioner is of the opinion, though, that the unconstitutionality extended only as to which court has appellate jurisdiction without affecting the period within which to appeal. According to petitioner, only the portion providing for the appellate jurisdiction of the Regional Trial Court in said cases should be deemed unconstitutional. The rest of the provisions, particularly on the period to appeal, free from the taint of unconstitutionality, should remain in force and effect in view of the separability clauses contained in Republic Act 6779[10] and the Omnibus Election Code.[11]
XXXXXX
We do not agree.
First, petitioner’s argument raises the presumption that the period to appeal can be severed from the remedy or the appeal itself which is provided in Section 9, Republic Act 6679 and survive on its own. The presumption cannot be sustained because the period to appeal is an essential characteristic and wholly dependent on the remedy.
Aptly, the rules on statutory construction prescribe:
“The general rule is that where part of a statute is void as repugnant to the Constitution, while another part is valid, the valid portion, if separable from the invalid, may stand and be enforced. The presence of a separability clause in a statute creates the presumption that the legislature intended separability, rather than complete nullity, of the statute. **To justify this result, the valid portion must be so far independent of the invalid portion that it is fair to presume that the legislature would have enacted it by itself if it had supposed that it could not constitutionally enact the other. **Enough must remain to make a complete, intelligible, and valid statute, which carries out the legislative intent. The **void provisions must be eliminated without causing results affecting the main purpose of the act in a manner contrary to the intention of the legislature. **The language used in the invalid part of the statute can have no legal effect or efficacy for any purpose whatsoever, and what remains must express the legislative will independently of the void part, since the court has no power to legislate.
The exception to the general rule is that when the parts of a statute are so mutually dependent and connected, as conditions, considerations, inducements, or compensations for each other, as to warrant a belief that the legislature intended them as a whole the nullity of one part will vitiate the rest. In making the parts of the statute dependent, conditional, or connected with one another, the legislature intended the statute to be carried out as a whole and would not have enacted it if one part is void, in which case if some parts are unconstitutional, all the other provisions thus dependent, conditional, or connected must fall with them.[12]
XXXXXX
In the instant petition, the exception applies. Section 9 of Republic Act No. 6679 and Section 252 of the Omnibus Election Code, without the constitutionally infirm portion on the appellate jurisdiction of Regional Trial Courts in barangay election protest cases, does not remain complete in itself, sensible, capable of being executed and wholly independent of the portion which was rejected. In other words, with the elimination of the forum, the period cannot stand on its own. Moreover, when this Court stated that “Section 9 of Rep. Act No. 6679 is declared unconstitutional insofar as it provides that barangay election contests decided by the municipal or metropolitan trial court shall be appealable to the regional trial court”, it meant to preserve the first two sentences on the original jurisdiction of municipal and metropolitan trial courts to try barangay election protests cases but not, as advanced by the petitioner, the ten-day period to appeal to the Regional Trial Court. This is the logical and sound interpretation of subject portion of the Flores case.
Second, what was invalidated by the Flores case was the whole appeal itself and not just the question of which court to file the petition. If the remedy itself is declared unconstitutional how could the period to appeal possibly survive? How could the time limit exist if there is nothing to be done within such time?
Third, we cannot indulge in the assumption that Congress still intended, by the said laws, to maintain the ten (10) day period to appeal despite the declaration of unconstitutionality of the appellate jurisdiction of the regional trial court, Republic Act No. 7166[13] amending the Omnibus Election Code, evinces the intent of our lawmakers to expedite the remedial aspect of election controversies. The law was approved on November 26, 1991, after the Flores case which was promulgated on April 20,1990, and presumably, the legislature in enacting the same was cognizant of the ruling in Flores. Said law provides the same five (5) day period to appeal decisions of the trial court in election contests for municipal officers to the COMELEC. Section 22 thereof reads:
“Sec. 22. Election Contests for Municipal Officers. – All election contests involving municipal offices filed with the Regional Trial Court shall be decided expeditiously. The decision may be appealed to the Commission within five (5) days from promulgation or receipt of a copy thereof by the aggrieved party. The Commission shall decide the appeal within sixty (60) days after it is submitted for decision, but not later than six (6) months after the filing of the appeal, which decision shall be final, unappealable and executory.”
There would be no logic nor reason in ruling that a longer period to appeal to the COMELEC should apply to election contests for barangay officials.
Fourth, since the whole remedy was invalidated, a void was created. Thus, the COMELEC had to come in and provide for a new appeal in accordance with the mandate of the Constitution. As correctly pointed out by the COMELEC, Section 6, Article IX-A[14] of the 1987 Constitution grants and authorizes the COMELEC to promulgate its own rules of procedure. The 1993 COMELEC Rules of Procedure have provided a uniform five (5) day period for taking an appeal[15] consistent with the expeditious resolution of election-related cases. It would be absurd and therefore not clearly intended, to maintain the 10-day period for barangay election contests. Hence, Section 3, Rule 22 of the COMELEC Rules of Procedure is not in conflict with any existing law. To adopt a contrary view would defeat the laudable objective of providing a uniform period of appeal and defy the COMELEC’s constitutional mandate to enact rules of procedure to expedite disposition of election cases.
In view of the Flores case, jurisprudence has consistently recognized that the COMELEC Rules of Procedure are controlling in election protests heard by a regional trial court.[16] The Court en banc has held in Rodillas vs. COMELEC[17] that “the procedure for perfecting an appeal from the decision of the Municipal Trial Court in a barangay election protest case is set forth in the COMELEC Rules of Procedure.” More recently, in Calucag vs. Commission on Elections[18], the Court en banc had occasion to state that:
“It follows that after the promulgation of Flores, the same arguments propounded therein by the petitioner may no longer be employed. Article 8 of the Civil Code states that “(j)udicial decisions applying or interpreting the laws or the constitution shall form part of the legal system of the Philippines.” Said pronouncement of the Court, having formed part of the law of the land, ignorance thereof can no longer be countenanced.
**Therefore, the COMELEC is the proper appellate court clothed with jurisdiction to hear the appeal, which appeal must be filed within five days after the promulgation of the MTC’s decision. **The erroneous filing of the appeal with the RTC did not toll the running of the prescriptive period. xxx. The five-day period having expired without the aggrieved party filing the appropriate appeal before the COMELEC, the statutory privilege of petitioner to appeal is deemed waived and the appealed decisions has become final and executory.”
Significantly, Section 5(5), Article VIII of the Constitution provides in part that “[r]ules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.”
Equally devoid of merit is the contention that petitioner was fast tracked because the COMELEC did not require the parties to file their appeal briefs; that the dismissal was issued motu proprio without prior notice and hearing; and that dismissal of the appeal defeats the people’s will on procedural points. Suffice it to state that the period for filing an appeal is by no means a mere technicality of law or procedure. It is an essential requirement without which the decision appealed from would become final and executory as if no appeal was filed at all. The right of appeal is merely a statutory privilege and may be exercised only in the manner prescribed by, and in accordance with, the provisions of the law.[19] Further, by virtue of Section 9 (d), Rule 22 of the COMELEC Rules of Procedure which provides that “an appeal may be dismissed upon motion of either party or at the instance of the Commission for failure to file a notice of appeal within the prescribed period”, the COMELEC is precisely given the discretion, in a case where the appeal is not filed on time to dismiss the action or proceeding.
The COMELEC, therefore, did not commit an abuse of discretion in dismissing the appeal.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED for lack of merit. The assailed orders of the Commission on Elections dated August 3, 1998 and October 14, 1998 are hereby AFFIRMED.
SO ORDERED.
Tatad vs DOE, GR 124360, December 3, 1997
Separability clause
the general rule is that where part of a statute is void as repugnant to the Constitution, while another part is valid, the valid portion, if separable from the invalid, may stand and be enforced. The presence of a separability clause in a statute creates the presumption that the legislature intended separability, rather than complete nullity of the statute. To justify this result, the valid portion must be so far independent of the invalid portion that it is fair to presume that the legislature would have enacted it by itself if it had supposed that it could not constitutionally enact the other. Enough must remain to make a complete, intelligible and valid statute, which carries out the legislative intent. x x x
The exception to the general rule is that when the parts of a statute are so mutually dependent and connected, as conditions, considerations, inducements, or compensations for each other, as to warrant a belief that the legislature intended them as a whole, the nullity of one part will vitiate the rest. In making the parts of the statute dependent, conditional, or connected with one another, the legislature intended the statute to be carried out as a whole and would not have enacted it if one part is void, in which case if some parts are unconstitutional, all the other provisions thus dependent, conditional, or connected must fall with them.”
R.A. No. 8180 contains a separability clause. Section 23 provides that “if for any reason, any section or provision of this Act is declared unconstitutional or invalid, such parts not affected thereby shall remain in full force and effect.” This separability clause notwithstanding, we hold that the offending provisions of R.A. No. 8180 so permeate its essence that the entire law has to be struck down. The provisions on tariff differential, inventory and predatory pricing are among the principal props of R.A. No. 8180. Congress could not have deregulated the downstream oil industry without these provisions. Unfortunately, contrary to their intent, these provisions on tariff differential, inventory and predatory pricing inhibit fair competition, encourage monopolistic power and interfere with the free interaction of market forces. R.A. No. 8180 needs provisions to vouchsafe free and fair competition. The need for these vouchsafing provisions cannot be overstated. Before deregulation, PETRON, SHELL and CALTEX had no real competitors but did not have a free run of the market because government controls both the pricing and non-pricing aspects of the oil industry. After deregulation, PETRON, SHELL and CALTEX remain unthreatened by real competition yet are no longer subject to control by government with respect to their pricing and non-pricing decisions. The aftermath of R.A. No. 8180 is a deregulated market where competition can be corrupted and where market forces can be manipulated by oligopolies.
The fall out effects of the defects of R.A. No. 8180 on our people have not escaped Congress. A lot of our leading legislators have come out openly with bills seeking the repeal of these odious and offensive provisions in R.A. No. 8180. In the Senate, Senator Freddie Webb has filed S.B. No. 2133 which is the result of the hearings conducted by the Senate Committee on Energy. The hearings revealed that (1) there was a need to level the playing field for the new entrants in the downstream oil industry, and (2) there was no law punishing a person for selling petroleum products at unreasonable prices. Senator Alberto G. Romulo also filed S.B. No. 2209 abolishing the tariff differential beginning January 1, 1998. He declared that the amendment “x x x would mean that instead of just three (3) big oil companies there will be other major oil companies to provide more competitive prices for the market and the consuming public.” Senator Heherson T. Alvarez, one of the principal proponents of R.A. No. 8180, also filed S.B. No. 2290 increasing the penalty for violation of its section 9. It is his opinion as expressed in the explanatory note of the bill that the present oil companies are engaged in cartelization despite R.A. No. 8180, viz,:
” x x x
“Since the downstream oil industry was fully deregulated in February 1997, there have been eight (8) fuel price adjustments made by the three oil majors, namely: Caltex Philippines, Inc.; Petron Corporation; and Pilipinas Shell Petroleum Corporation. Very noticeable in the price adjustments made, however, is the uniformity in the pump prices of practically all petroleum products of the three oil companies. This, despite the fact, that their selling rates should be determined by a combination of any of the following factors: the prevailing peso-dollar exchange rate at the time payment is made for crude purchases, sources of crude, and inventory levels of both crude and refined petroleum products. The abovestated factors should have resulted in different, rather than identical prices.
The fact that the three (3) oil companies’ petroleum products are uniformly priced suggests collusion, amounting to cartelization, among Caltex Philippines, Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation to fix the prices of petroleum products in violation of paragraph (a), Section 9 of R.A. No. 8180.
To deter this pernicious practice and to assure that present and prospective players in the downstream oil industry conduct their business with conscience and propriety, cartel-like activities ought to be severely penalized.”
Senator Francisco S. Tatad also filed S.B. No. 2307 providing for a uniform tariff rate on imported crude oil and refined petroleum products. In the explanatory note of the bill, he declared in no uncertain terms that “x x x the present set-up has raised serious public concern over the way the three oil companies have uniformly adjusted the prices of oil in the country, an indication of a possible existence of a cartel or a cartel-like situation within the downstream oil industry. This situation is mostly attributed to the foregoing provision on tariff differential, which has effectively discouraged the entry of new players in the downstream oil industry.”
In the House of Representatives, the moves to rehabilitate R.A. No. 8180 are equally feverish. Representative Leopoldo E. San Buenaventura has filed H.B. No. 9826 removing the tariff differential for imported crude oil and imported refined petroleum products. In the explanatory note of the bill, Rep. Buenaventura explained:
“x x x
As we now experience, this difference in tariff rates between imported crude oil and imported refined petroleum products, unwittingly provided a built-in-advantage for the three existing oil refineries in the country and eliminating competition which is a must in a free enterprise economy. Moreover, it created a disincentive for other players to engage even initially in the importation and distribution of refined petroleum products and ultimately in the putting up of refineries. This tariff differential virtually created a monopoly of the downstream oil industry by the existing three oil companies as shown by their uniform and capricious pricing of their products since this law took effect, to the great disadvantage of the consuming public.
Thus, instead of achieving the desired effects of deregulation, that of free enterprise and a level playing field in the downstream oil industry, R.A. 8180 has created an environment conducive to cartelization, unfavorable, increased, unrealistic prices of petroleum products in the country by the three existing refineries.”
Representative Marcial C. Punzalan, Jr., filed H.B. No. 9981 to prevent collusion among the present oil companies by strengthening the oversight function of the government, particularly its ability to subject to a review any adjustment in the prices of gasoline and other petroleum products. In the explanatory note of the bill, Rep. Punzalan, Jr., said:
“x x x
To avoid this, the proposed bill seeks to strengthen the oversight function of government, particularly its ability to review the prices set for gasoline and other petroleum products. It grants the Energy Regulatory Board (ERB) the authority to review prices of oil and other petroleum products, as may be petitioned by a person, group or any entity, and to subsequently compel any entity in the industry to submit any and all documents relevant to the imposition of new prices. In cases where the Board determines that there exist collusion, economic conspiracy, unfair trade practice, profiteering and/or overpricing, it may take any step necessary to protect the public, including the readjustment of the prices of petroleum products. Further, the Board may also impose the fine and penalty of imprisonment, as prescribed in Section 9 of R.A. 8180, on any person or entity from the oil industry who is found guilty of such prohibited acts.
By doing all of the above, the measure will effectively provide Filipino consumers with a venue where their grievances can be heard and immediately acted upon by government.
Thus, this bill stands to benefit the Filipino consumer by making the price-setting process more transparent and making it easier to prosecute those who perpetrate such prohibited acts as collusion, overpricing, economic conspiracy and unfair trade.”
Representative Sergio A.F. Apostol filed H.B. No. 10039 to remedy an omission in R.A. No. 8180 where there is no agency in government that determines what is “reasonable” increase in the prices of oil products. Representative Dante O. Tinga, one of the principal sponsors of R.A. No. 8180, filed H.B. No. 10057 to strengthen its anti-trust provisions. He elucidated in its explanatory note:
“x x x
The definition of predatory pricing, however, needs to be tightened up particularly with respect to the definitive benchmark price and the specific anti-competitive intent. The definition in the bill at hand which was taken from the Areeda-Turnerÿ test in the United States on predatory pricing resolves the questions. The definition reads, `Predatory pricing means selling or offering to sell any oil product at a price below the average variable cost for the purpose of destroying competition, eliminating a competitor or discouraging a competitor from entering the market.’
The appropriate actions which may be resorted to under the Rules of Court in conjunction with the oil deregulation law are adequate. But to stress their availability and dynamism, it is a good move to incorporate all the remedies in the law itself. Thus, the present bill formalizes the concept of government intervention and private suits to address the problem of antitrust violations. Specifically, the government may file an action to prevent or restrain any act of cartelization or predatory pricing, and if it has suffered any loss or damage by reason of the antitrust violation it may recover damages. Likewise, a private person or entity may sue to prevent or restrain any such violation which will result in damage to his business or property, and if he has already suffered damage he shall recover treble damages. A class suit may also be allowed.
To make the DOE Secretary more effective in the enforcement of the law, he shall be given additional powers to gather information and to require reports.”
Representative Erasmo B. Damasing filed H.B. No. 7885 and has a more unforgiving view of R.A. No. 8180. He wants it completely repealed. He explained:
“x x x
Contrary to the projections at the time the bill on the Downstream Oil Industry Deregulation was discussed and debated upon in the plenary session prior to its approval into law, there aren’t any new players or investors in the oil industry. Thus, resulting in practically a cartel or monopoly in the oil industry by the three (3) big oil companies, Caltex, Shell and Petron. So much so, that with the deregulation now being partially implemented, the said oil companies have succeeded in increasing the prices of most of their petroleum products with little or no interference at all from the government. In the month of August, there was an increase of Fifty centavos (50›) per liter by subsidizing the same with the OPSF, this is only temporary as in March 1997, or a few months from now, there will be full deregulation (Phase II) whereby the increase in the prices of petroleum products will be fully absorbed by the consumers since OPSF will already be abolished by then. Certainly, this would make the lives of our people, especially the unemployed ones, doubly difficult and unbearable.
The much ballyhooed coming in of new players in the oil industry is quite remote considering that these prospective investors cannot fight the existing and well established oil companies in the country today, namely, Caltex, Shell and Petron. Even if these new players will come in, they will still have no chance to compete with the said three (3) existing big oil companies considering that there is an imposition of oil tariff differential of 4% between importation of crude oil by the said oil refineries paying only 3% tariff rate for the said importation and 7% tariff rate to be paid by businessmen who have no oil refineries in the Philippines but will import finished petroleum/oil products which is being taxed with 7% tariff rates.
So, if only to help the many who are poor from further suffering as a result of unmitigated increase in oil products due to deregulation, it is a must that the Downstream Oil Industry Deregulation Act of 1996, or R.A. 8180 be repealed completely.”
Various resolutions have also been filed in the Senate calling for an immediate and comprehensive review of R.A. No. 8180 to prevent the downpour of its ill effects on the people. Thus, S. Res. No. 574 was filed by Senator Gloria M. Macapagal entitled Resolution “Directing the Committee on Energy to Inquire Into The Proper Implementation of the Deregulation of the Downstream Oil Industry and Oil Tax Restructuring As Mandated Under R.A. Nos. 8180 and 8184, In Order to Make The Necessary Corrections In the Apparent Misinterpretation Of The Intent And Provision Of The Laws And Curb The Rising Tide Of Disenchantment Among The Filipino Consumers And Bring About The Real Intentions And Benefits Of The Said Law.” Senator Blas P. Ople filed S. Res. No. 664 entitled resolution “Directing the Committee on Energy To Conduct An Inquiry In Aid Of Legislation To Review The Government’s Oil Deregulation Policy In Light Of The Successive Increases In Transportation, Electricity And Power Rates, As well As Of Food And Other Prime Commodities And Recommend Appropriate Amendments To Protect The Consuming Public.” Senator Ople observed:
“x x x
WHEREAS, since the passage of R.A. No. 8180, the Energy Regulatory Board (ERB) has imposed successive increases in oil prices which has triggered increases in electricity and power rates, transportation fares, as well as in prices of food and other prime commodities to the detriment of our people, particularly the poor;
WHEREAS, the new players that were expected to compete with the oil cartel-Shell, Caltex and Petron-have not come in;
WHEREAS, it is imperative that a review of the oil deregulation policy be made to consider appropriate amendments to the existing law such as an extension of the transition phase before full deregulation in order to give the competitive market enough time to develop;
WHEREAS, the review can include the advisability of providing some incentives in order to attract the entry of new oil companies to effect a dynamic competitive market;
WHEREAS, it may also be necessary to defer the setting up of the institutional framework for full deregulation of the oil industry as mandated under Executive Order No. 377 issued by President Ramos last October 31, 1996 x x x. “
Senator Alberto G. Romulo filed S. Res. No. 769 entitled resolution “Directing the Committees on Energy and Public Services In Aid Of Legislation To Assess The Immediate Medium And Long Term Impact of Oil Deregulation On Oil Prices And The Economy.” Among the reasons for the resolution is the finding that “the requirement of a 40-day stock inventory effectively limits the entry of other oil firms in the market with the consequence that instead of going down oil prices will rise.”
Parallel resolutions have been filed in the House of Representatives. Representative Dante O. Tinga filed H. Res. No. 1311 “Directing The Committee on Energy To Conduct An Inquiry, In Aid of Legislation, Into The Pricing Policies And Decisions Of The Oil Companies Since The Implementation of Full Deregulation Under the Oil Deregulation Act (R.A. No. 8180) For the Purpose of Determining In the Context Of The Oversight Functions Of Congress Whether The Conduct Of The Oil Companies, Whether Singly Or Collectively, Constitutes Cartelization Which Is A Prohibited Act Under R.A. No. 8180, And What Measures Should Be Taken To Help Ensure The Successful Implementation Of The Law In Accordance With Its Letter And Spirit, Including Recommending Criminal Prosecution Of the Officers Concerned Of the Oil Companies If Warranted By The Evidence, And For Other Purposes.” Representatives Marcial C. Punzalan, Jr. Dante O. Tinga and Antonio E. Bengzon III filed H.R. No. 894 directing the House Committee on Energy to inquire into the proper implementation of the deregulation of the downstream oil industry. House Resolution No. 1013 was also filed by Representatives Edcel C. Lagman, Enrique T. Garcia, Jr. and Joker P. Arroyo urging the President to immediately suspend the implementation of E.O. No. 392.
In recent memory there is no law enacted by the legislature afflicted with so much constitutional deformities as R.A. No. 8180. Yet, R.A. No. 8180 deals with oil, a commodity whose supply and price affect the ebb and flow of the lifeblood of the nation. Its shortage of supply or a slight, upward spiral in its price shakes our economic foundation. Studies show that the areas most impacted by the movement of oil are food manufacture, land transport, trade, electricity and water.[38] At a time when our economy is in a dangerous downspin, the perpetuation of R.A. No. 8180 threatens to multiply the number of our people with bent backs and begging bowls. R.A. No. 8180 with its anti-competition provisions cannot be allowed by this Court to stand even while Congress is working to remedy its defects.
The Court, however, takes note of the plea of PETRON, SHELL and CALTEX to lift our restraining order to enable them to adjust upward the price of petroleum and petroleum products in view of the plummeting value of the peso. Their plea, however, will now have to be addressed to the Energy Regulatory Board as the effect of the declaration of unconstitutionality of R.A. No. 8180 is to revive the former laws it repealed.[39] The length of our return to the regime of regulation depends on Congress which can fasttrack the writing of a new law on oil deregulation in accord with the Constitution.
With this Decision, some circles will chide the Court for interfering with an economic decision of Congress. Such criticism is charmless for the Court is annulling R.A. No. 8180 not because it disagrees with deregulation as an economic policy but because as cobbled by Congress in its present form, the law violates the Constitution. The right call therefor should be for Congress to write a new oil deregulation law that conforms with the Constitution and not for this Court to shirk its duty of striking down a law that offends the Constitution. Striking down R.A. No. 8180 may cost losses in quantifiable terms to the oil oligopolists. But the loss in tolerating the tampering of our Constitution is not quantifiable in pesos and centavos. More worthy of protection than the supra-normal profits of private corporations is the sanctity of the fundamental principles of the Constitution. Indeed when confronted by a law violating the Constitution, the Court has no option but to strike it down dead. Lest it is missed, the Constitution is a covenant that grants and guarantees both the political and economic rights of the people. The Constitution mandates this Court to be the guardian not only of the people’s political rights but their economic rights as well. The protection of the economic rights of the poor and the powerless is of greater importance to them for they are concerned more with the exoterics of living and less with the esoterics of liberty. Hence, for as long as the Constitution reigns supreme so long will this Court be vigilant in upholding the economic rights of our people especially from the onslaught of the powerful. Our defense of the people’s economic rights may appear heartless because it cannot be half-hearted.
IN VIEW WHEREOF, the petitions are granted. R.A. No. 8180 is declared unconstitutional and E.O. No. 372 void.
SO ORDERED.
Tañada v. Tuvera, G.R. No. 63915, 24 April 1985
Effectivity Clause
FACTS: Due process was invoked by the petitioners in demanding the disclosure of a number of presidential decrees which they claimed had not been published as required by law. The government argued that while publication was necessary as a rule, it was not so when it was “otherwise provided,” as when the decrees themselves declared that they were to become effective immediately upon their approval.
Respondents further contend that publication in the Official Gazette is not a sine qua non requirement for the effectivity of laws where the laws themselves provide for their own effectivity dates. It is thus submitted that since the presidential issuances in question contain special provisions as to the date they are to take effect, publication in the Official Gazette is not indispensable for their effectivity. The point stressed is anchored on Article 2 of the Civil Code:
Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided, …
It is needless to add that the publication of presidential issuances “of a public nature” or “of general applicability” is a requirement of due process. It is a rule of law that before a person may be bound by law, he must first be officially and specifically informed of its contents.
HELD: the Court affirmed the necessity for the publication of some of these decrees, declaring in the dispositive portion as follows:
WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished presidential issuances which are of general application, and unless so published, they shall have no binding force and effect.
Tañada v. Tuvera, G.R. No. L-63915, 29 December 1986
Effectivity Clause
FACTS: The petitioners are now before us again, this time to move for reconsideration/clarification of that decision. 1 Specifically, they ask the following questions:
- What is meant by “law of public nature” or “general applicability”?
- Must a distinction be made between laws of general applicability and laws which are not?
- What is meant by “publication”?
- Where is the publication to be made?
- When is the publication to be made?
Resolving their own doubts, the petitioners suggest that there should be no distinction between laws of general applicability and those which are not; that publication means complete publication; and that the publication must be made forthwith in the Official Gazette. 2
In the Comment 3 required of the then Solicitor General, he claimed first that the motion was a request for an advisory opinion and should therefore be dismissed, and, on the merits, that the clause “unless it is otherwise provided” in Article 2 of the Civil Code meant that the publication required therein was not always imperative; that publication, when necessary, did not have to be made in the Official Gazette; and that in any case the subject decision was concurred in only by three justices and consequently not binding. This elicited a Reply 4 refuting these arguments. Came next the February Revolution and the Court required the new Solicitor General to file a Rejoinder in view of the supervening events, under Rule 3, Section 18, of the Rules of Court. Responding, he submitted that issuances intended only for the internal administration of a government agency or for particular persons did not have to be ‘Published; that publication when necessary must be in full and in the Official Gazette; and that, however, the decision under reconsideration was not binding because it was not supported by eight members of this Court. 5
The subject of contention is Article 2 of the Civil Code providing as follows:
ART. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after such publication.
After a careful study of this provision and of the arguments of the parties, both on the original petition and on the instant motion, we have come to the conclusion and so hold, that the clause “unless it is otherwise provided” refers to the date of effectivity and not to the requirement of publication itself, which cannot in any event be omitted. This clause does not mean that the legislature may make the law effective immediately upon approval, or on any other date, without its previous publication.
HELD:Laws must come out in the open in the clear light of the sun instead of skulking in the shadows with their dark, deep secrets. Mysterious pronouncements and rumored rules cannot be recognized as binding unless their existence and contents are confirmed by a valid publication intended to make full disclosure and give proper notice to the people. The furtive law is like a scabbarded saber that cannot feint parry or cut unless the naked blade is drawn.
WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon their approval, or as soon thereafter as possible, be published in full in the Official Gazette, to become effective only after fifteen days from their publication, or on another date specified by the legislature, in accordance with Article 2 of the Civil Code.
Centeno vs. Hon. Pornillos, G.R. No. 113092. September 1, 1994
Construction of: Penal Laws
It is indeed unfortunate that a group of elderly men, who were moved by their desire to devote their remaining years to the service of their Creator by forming their own civic organization for that purpose, should find themselves enmeshed in a criminal case for making a solicitation from a community member allegedly without the required permit from the Department of Social Welfare and Development.
CIR vs Phil. American Accident Insurance Co., 493 Phil 785 (2005)
Tax Laws
The rule that tax exemptions should be construed strictly against the taxpayer presupposes that the taxpayer is clearly subject to the tax being levied against him. Unless a statute imposes a tax clearly, expressly and unambiguously, what applies is the equally well-settled rule that the imposition of a tax cannot be presumed.17 Where there is doubt, tax laws must be construed strictly against the government and in favor of the taxpayer.18 This is because taxes are burdens on the taxpayer, and should not be unduly imposed or presumed beyond what the statutes expressly and clearly import.19
The Case
Before the Court is a petition for review1 assailing the Decision2 of 7 January 2000 of the Court of Appeals in CA-G.R. SP No. 36816. The Court of Appeals affirmed the Decision3 of 5 January 1995 of the Court of Tax Appeals (“CTA”) in CTA Cases Nos. 2514, 2515 and 2516. The CTA ordered the Commissioner of Internal Revenue (“petitioner”) to refund a total of P29,575.02 to respondent companies (“respondents”).
FACTS: Respondents are domestic corporations licensed to transact insurance business in the country. From August 1971 to September 1972, respondents paid the Bureau of Internal Revenue under protest the 3% tax imposed on lending investors by Section 195-A4 of Commonwealth Act No. 466 (“CA 466”), as amended by Republic Act No. 6110 (“RA 6110”) and other laws. CA 466 was the National Internal Revenue Code (“NIRC”) applicable at the time.
Respondents paid the following amounts: P7,985.25 from Philippine American (“PHILAM”) Accident Insurance Company; P7,047.80 from PHILAM Assurance Company; and P14,541.97 from PHILAM General Insurance Company. These amounts represented 3% of each company’s interest income from mortgage and other loans. Respondents also paid the taxes required of insurance companies under CA 466.
On 31 January 1973, respondents sent a letter-claim to petitioner seeking a refund of the taxes paid under protest. When respondents did not receive a response, each respondent filed on 26 April 1973 a petition for review with the CTA. These three petitions, which were later consolidated,** argued that respondents were not lending investors and as such were not subject to the 3% lending investors’ tax under Section 195-A.**
The CTA archived respondents’ case for several years while another case with a similar issue was pending before the higher courts. When respondents’ case was reinstated, the CTA ruled that respondents were entitled to their refund.
The Ruling of the Court of Tax Appeals
The CTA held that respondents are not taxable as lending investors because the term “lending investors” does not embrace insurance companies. The CTA traced the history of the tax on lending investors, as follows:
Originally, a person who was engaged in lending money at interest was taxed as a money lender. [Sec. 1464(x), Rev. Adm. Code] The term money lenders was defined as including “all persons who make a practice of lending money for themselves or others at interest.” [Sec. 1465(v), id.] Under this law, an insurance company was not considered a money lender and was not taxable as such. To quote from an old BIR Ruling:
**“The lending of money at interest by insurance companies constitutes a necessary incident of their regular business. For this reason, insurance companies are not liable to tax as money lenders or real estate brokers for making or negotiating loans secured by real property. (Ruling, February 28, 1920; BIR 135.2)” (The Internal Revenue Law, Annotated, 2nd ed., 1929, by B.L. Meer, page 143)
**
The same rule has been applied to banks.
“For making investments on salary loans, banks will not be required to pay the money lender’s tax imposed by this subsection, for the reason that money lending is considered a mere incident of the banking business. [See Ruling No. 43, (October 8, 1926) 25 Off. Gaz. 1326)” (The Internal Revenue Law, Annotated, id.)
The term “money lenders” was later changed to “lending investors” but the definition of the term remains the same. [Sec. 1464(x), Rev. Adm. Code, as finally amended by Com. Act No. 215, and Sec. 1465(v) of the same Code, as finally amended by Act No. 3963] The same law is embodied in the present National Internal Revenue Code (Com. Act No. 466) without change, except in the amount of the tax. [See Secs. 182(A) (3) (dd) and 194(u), National Internal Revenue Code.]
It is a well-settled rule that an administrative interpretation of a law which has been followed and applied for a long time, and thereafter the law is re-enacted without substantial change, such administrative interpretation is deemed to have received legislative approval. In short, the administrative interpretation becomes part of the law as it is presumed to carry out the legislative purpose.5
The CTA held that the practice of lending money at interest is part of the insurance business. CA 466 already taxes the insurance business. The CTA pointed out that the law recognizes and even regulates this practice of lending money by insurance companies.
The CTA observed that CA 466 also treated differently insurance companies from lending investors in regard to fixed taxes. Under Section 182(A)(3)(gg), insurance companies were subject to the same fixed tax as banks and finance companies. The CTA reasoned that insurance companies were grouped with banks and finance companies because the latter’s lending activities were also integral to their business. In contrast, lending investors were taxed at a different fixed tax under Section 182(A)(3)(dd) of CA 466. The CTA stated that “insurance companies xxx had never been required by respondent [CIR] to pay the fixed tax imposed on lending investors xxx.”6
The dispositive portion of the Decision of 5 January 1995 of the Court of Tax Appeals (“CTA Decision”) reads:
WHEREFORE, premises considered, petitioners Philippine American Accident Insurance Co., Philippine American Assurance Co., and Philippine American General Insurance Co., Inc. are not taxable on their lending transactions independently of their insurance business. Accordingly, respondent is hereby ordered to refund to petitioner[s] the sum of P7,985.25, P7,047.80 and P14,541.97 in CTA Cases No. 2514, 2515 and 2516, respectively representing the fixed and percentage taxes when (sic) paid by petitioners as lending investor from August 1971 to September 1972.
No pronouncement as to cost.
SO ORDERED.7
Dissatisfied, petitioner elevated the matter to the Court of Appeals.8
The Ruling of the Court of Appeals
The Court of Appeals ruled that respondents are not taxable as lending investors. In its Decision of 7 January 2000 (“CA Decision”), the Court of Appeals affirmed the ruling of the CTA, thus:
WHEREFORE, premises considered, the petition is DISMISSED, hereby AFFIRMING the decision, dated January 5, 1995, of the Court of Tax Appeals in CTA Cases Nos. 2514, 2515 and 2516.
SO ORDERED.9
Petitioner appealed the CA Decision to this Court.
ISSUE:WHETHER RESPONDENT INSURANCE COMPANIES ARE SUBJECT TO THE 3% PERCENTAGE TAX AS LENDING INVESTORS UNDER SECTIONS 182(A)(3)(DD) AND 195-A, RESPECTIVELY IN RELATION TO SECTION 194(U), ALL OF THE NIRC.
whether respondents are subject to the fixed tax under Section 182(A)(3)(dd).
HELD:Section 182(A)(3)(dd) of CA 466 also provides:
Sec. 182. Fixed taxes. – (A) On business xxx
xxx
(3) Other fixed taxes. – The following fixed taxes shall be collected as follows, the amount stated being for the whole year, when not otherwise specified;
xxx
(dd) Lending investors –
- In chartered cities and first class municipalities, five hundred pesos;
- In second and third class municipalities, two hundred and fifty pesos;
- In fourth and fifth class municipalities and municipal districts, one hundred and twenty-five pesos; Provided, That lending investors who do business as such in more than one province shall pay a tax of five hundred pesos.
Section 195-A of CA 466 provides:
Sec. 195-A. Percentage tax on dealers in securities; lending investors. – Dealers in securities and lending investors shall pay a tax equivalent to three per centum on their gross income.
Neither Section 182(A)(3)(dd) nor Section 195-A mentions insurance companies. Section 182(A)(3)(dd) provides for the taxation of lending investors in different localities. Section 195-A refers to dealers in securities and lending investors. The burden is thus on petitioner to show that insurance companies are lending investors for purposes of taxation.
In this case, petitioner does not dispute that respondents are in the insurance business. Petitioner merely alleges that the definition of lending investors under CA 466 is broad enough to encompass insurance companies. Petitioner insists that because of Section 194(u), the two principal activities of the insurance business, namely, underwriting and investment, are separately taxable.20
Section 194(u) of CA 466 states:
(u) “Lending investor” includes all persons who make a practice of lending money for themselves or others at interest.
xxx
As can be seen, Section 194(u) does not tax the practice of lending per se. It merely defines what lending investors are. The question is whether the lending activities of insurance companies make them lending investors for purposes of taxation.
We agree with the CTA and Court of Appeals that it does not. Insurance companies cannot be considered lending investors under CA 466, as amended.
