GARCIA ET AL.

VS COMELEC
Posted by kaye lee on 10:58 AM
G.R. No. 111511 October 5, 1993 [Initiative and Referendum; Recall proceeding]

FACTS:
Enrique T. Garcia was elected governor of Bataan in the 1992 elections. Some mayors, vice-
mayors and members of the Sangguniang Bayan of the twelve (12) municipalities of the province
constituted themselves into a Preparatory Recall Assembly to initiate the recall election of
petitioner Garcia. They issued Resolution No. 1 as formal initiation of the recall proceedings.
COMELEC scheduled the recall election for the gubernatorial position of Bataan.

Petitioners then filed a petition for certiorari and prohibition with writ of preliminary injunction
to annul the Resolution of the COMELEC because the PRAC failed to comply with the
"substantive and procedural requirement" laid down in Section 70 of R.A. 7160 (Local
Government Code 1991). They pointed out the most fatal defect of the proceeding followed by
the PRAC in passing the Resolution: the deliberate failure to send notices of the meeting to 65
members of the assembly.

ISSUES:
1) Whether or not the people have the sole and exclusive right to initiate recall proceedings.
2) Whether or not the procedure for recall violated the right of elected local public officials
belonging to the political minority to equal protection of the law.

RULING:
1) No. There is nothing in the Constitution that will remotely suggest that the people have the
"sole and exclusive right to decide on whether to initiate a recall proceeding." The Constitution
did not provide for any mode, let alone a single mode, of initiating recall elections.
The mandate given by section 3 of Article X of the Constitution is for Congress to "enact a local
government code which shall provide for a more responsive and accountable local government
structure through a system of decentralization witheffective mechanisms of recall, initiative, and
referendum . . ." By this constitutional mandate, Congress was clearly given the power to choose
the effective mechanisms of recall as its discernment dictates.
What the Constitution simply required is that the mechanisms of recall, whether one or many, to
be chosen by Congress should be effective. Using its constitutionally granted discretion,
Congress deemed it wise to enact an alternative mode of initiating recall elections to supplement
the former mode of initiation by direct action of the people. The legislative records reveal there
were two (2) principal reasons why this alternative mode of initiating the recall process thru an
assembly was adopted, viz: (a) to diminish the difficulty of initiating recall thru the direct action
of the people; and (b) to cut down on its expenses.

2) No. Under the Sec. 70 of the LGC, all mayors, vice-mayors and sangguniang members of the
municipalities and component cities are made members of the preparatory recall assembly at the
provincial level. Its membership is not apportioned to political parties. No significance is given
to the political affiliation of its members. Secondly, the preparatory recall assembly, at the
provincial level includes all the elected officials in the province concerned. Considering their
number, the greater probability is that no one political party can control its majority. Thirdly, sec.
69 of the Code provides that the only ground to recall a locally elected public official is loss of
confidence of the people. The members of the PRAC are in the PRAC not in representation of
their political parties but as representatives of the people. By necessary implication, loss of
confidence cannot be premised on mere differences in political party affiliation. Indeed, our
Constitution encourages multi-party system for the existence of opposition parties is
indispensable to the growth and nurture of democratic system. Clearly then, the law as crafted
cannot be faulted for discriminating against local officials belonging to the minority.
Moreover, the law instituted safeguards to assure that the initiation of the recall process by a
preparatory recall assembly will not be corrupted by extraneous influences. We held that notice
to all the members of the recall assembly is a condition sine qua non to the validity of its
proceedings. The law also requires a qualified majority of all the preparatory recall assembly
members to convene in session and in a public place. Needless to state, compliance with these
requirements is necessary, otherwise, there will be no valid resolution of recall which can be
given due course by the COMELEC.

http://skinnycases.blogspot.com/2013/09/garcia-et-al-vs-comelec.html

Paras v. COMELEC

G.R. No. 123169, November 4, 1996

Ponente: Justice Francisco

Facts:

Petitioner is the incumbent barangay captain of Pula, Cabanatuan City who won during the last
regular barangay election in 1994. A petition for his recall was filed by the registered voters of
the barangay. A recall election was set, against which petitioner filed a petition. Petitioner cites
Section 74 (b) of LGC, which states that no recall shall take place within one (1) year from the
date of the officials assumption to office or one (1) year immediately preceding a regular local
election, petitioner insists that the scheduled January 13, 1996 recall election is now barred as
the Sangguniang Kabataan (SK) election was set by Republic Act No. 7808 on the first Monday
of May 1996, and every three years thereafter. Petitioner maintains that as the SK election is a
regular local election, hence no recall election can be had for barely four months separate the SK
election from the recall election. We do not agree.
Issue:

Whether or not an SK election is a regular election.

Held:

No. A statutes provisions must be considered with the other parts and must be kept subservient
to the general intent of the whole enactment. Paragraph (b) with (a) of LGC74 merely designates
such a period, i.e. 2nd year of term. Considering the SK election as regular will unduly
circumscribe the LGC provision on recall. No recall election can be conducted if that is the case
(May 1996, every three years). It is assumed that legislature intended to enact an effective law,
and interpretation should give effec to the intent, with the whole statute. It is likewise a basic
precept in statutory construction that a statute should be interpreted in harmony with the
Constitution.[7] Thus, the interpretation of Section 74 of the Local Government Code, specifically
paragraph (b) thereof, should not be in conflict with the Constitutional mandate of Section 3 of
Article X of the Constitution to enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of
decentralization with effective mechanisms of recall, initiative, and referendum x x x. An
interpretation too literal that the spirit is denied will fall in former of the latter.

https://www.scribd.com/document/161623559/Paras-v-COMELEC-Case-Digest-2D
Sarmiento vs. COMELEC
212 SCRA 307
August 6, 1992

Facts:

This special civil action for certiorari seek to set aside the Resolutions of Respondent
Commission on Elections (COMELEC) in the following Special Cases:

1) G.R. No. 105628 SPC No. 92-266

2) G.R. No. 105725 SPC No. 92-323
3) G.R. No. 105727 SPC No. 92-288
4) G.R. No. 105730 SPC No. 92-315
5) G.R. No. 105771 SPC No. 92-271
6) G.R. No. 105778 SPC No. 92-039
7) G.R. No. 105797 SPC No. 92-153
8) G.R. No. 105919 SPC No. 92-293
9) G.R. No. 105977 SPC No. 92-087

Issue:

Whether the challenged Resolutions above specified (the SPC) as having been issued with grave
abuse of discretion in that, inter alia, the Commission, sitting en banc, took cognizance of and
decided the appeals without first referring them to any of it Divisions.

Held:

The COMELEC en banc acted without jurisdiction, or with grave abuse of discretion, when it
resolved the appeals of petitioners in the above mentioned Special Cases without first referring
them to any of its Divisions. Section 3, subdivision C, Article IX of the 1987 Constitution
expressly provides:
Sec. 3. The Commission on Elections may sit en banc or in two divisions, and shall promulgate
its rules of procedure in order to expedite disposition of election cases, including pre-
proclamation controversies. All such election cases shall be heard and decided in division,
provided that motions for reconsideration of decisions shall be decided by the Commission en
banc.
Said Resolutions are therefore, null and void and must be set aside. Consequently, the appeals
are deemed pending before the Commission for proper referral to a Division.

A resolution directing the COMELEC to assign said Special Cases to the Divisions pursuant to
Section 8, Rule 3 of its Rules on assignment of cases would, logically, be in order. However,
Section 16 of R.A. No. 7166 6 provides that all pre-proclamation cases pending before it shall be
deemed terminated at the beginning of the term of the office involved. The terms of the offices
involved in the Special Cases subject of these petitions commenced at noon of June 30 1992.
These cases have thus been rendered moot and such a resolution would only be an exercise in
futility.

Therefore, the instant petitions are DISMISSED but without prejudice to the filing by petitioners
of regular elections protests. If the winning candidates for the positions involved in the Special
Cases subject of these petitions have already been proclaimed, the running of the period to file
the protests shall be deemed suspended by the pendency of such cases before the COMELEC
and of these petitions before this Court.

Notes:

1) G.R. No. 105628 SPC No. 92-266 granting the appeal from the ruling of the Municipal
Board of Canvassers of Virac, Catanduanes which ordered the exclusion from the canvass of one
(1) election return;

2) G.R. No. 105725 SPC No. 92-323 reversing the ruling of the City Board of Canvassers of
Iriga City which ordered the exclusion from the canvass of six (6) election returns and in UND
No. 92-243 ordering the said Board of Canvassers to include in the canvass the election returns
involved therein;

3) G.R. No. 105727 SPC No. 92-288 dismissing the appeal of petitioner from the ruling of the
Provincial Board of Canvassers of Catanduanes which ordered the inclusion in the canvass the
certificate of canvass for the municipality of Virac, excluding the returns from 48 precincts;

4) G.R. No. 105730 SPC No. 92-315 affirming the ruling of the Municipal Board of
Canvassers of Jose Panganiban, Camarines Norte which dismissed petitioner's opposition to the
composition of the said Municipal Board of Canvassers;

5) G.R. No. 105771 SPC No. 92-271 affirming the ruling of the Municipal Board of
Canvassers of Cabusao, Camarines Sur which, among others, rejected petitioner's objection to
certain election returns;

6) G.R. No. 105778 SPC No. 92-039 dismissing said case for non-compliance with Section
20 of R.A. No. 7166;

7) G.R. No. 105797 SPC No. 92-153 affirming the rulings of the Provincial Board of
Canvassers of Davao Oriental which rejected petitioner's objections to the canvass of some
certificates of canvass;
8) G.R. No. 105919 SPC No. 92-293 dismissing petitioner's appeal from the ruling of the
Municipal Board of Canvassers of Upi Nuro, Maguindanao;

9) G.R. No. 105977 SPC No. 92-087 denying the amended pre-proclamation petition, which
is an appeal from the rulings of the Municipal Board of Canvassers of Ternate, Cavite, and
denying a subsequent motion to resolve the issues raised in said amended petition.
https://www.scribd.com/doc/289648947/Sarmiento-vs-Comelec-Digest
Lynette Garvida vs Florencio Sales, Jr.

In 1996, Lynette Garvida filed her candidacy to the position of Chairman of the Sangguniang
Kabataan (SK) of a barangay in Bangui, Ilocos Norte. Her candidacy was opposed by her rival
Florencio Sales, Jr. on the ground that she is over 21 years old (21 years old, 9 months at the time
of the filing). Nevertheless, the trial court ordered that she be admitted as a candidate and the SK
elections went on. Sales, in the meantiume, filed a petition to cancel the certificate of candidacy
of Garvida. When the elections results came in, Garvida won with a vote of 78, while Sales got
76. Garvida was eventually proclaimed as winner but had to face the petition filed by Sales.
Garvida, in her defense, averred that Section 424 of the Local Government Code (LGC)
provides that candidates for the SK must be at least 15 years of age and a maximum age of 21
years. Garvida states that the LGC does not specify that the maximum age requirement is exactly
21 years hence said provision must be construed as 21 years and a fraction of a year but still less
than 22 years so long as she does not exceed 22 she is still eligible because she is still,
technically, 21 years of age (although she exceeds it by 9 months).
ISSUE: Whether or not Garvida met the age requirement.
 HELD: No. Section 424 of the Local Government Code provides that candidates for SK must
be:

1. Filipino citizen;

2. an actual resident of the barangay for at least six months;

3. 15 but not more than 21 years of age; and

4. duly registered in the list of the Sangguniang Kabataan or in the official barangay list.

The provision is clear. Must not be more than 21 years of age. The said phrase is not equivalent
to less than 22 years old. The law does not state that the candidate be less than 22 years on
election day. If such was the intention of Congress in framing the LGC, then they should have
expressly provided such.
Sales claims that he obtained the second highest number of vote, hence he should be declared as
the SK Chairman, is this a valid contention?
No. Applying the ruling in Labo vs COMELEC, a defeated candidate, though obtaining the
second highest number of vote, is not deemed to have been elected by reason of the winners
eventual disqualification/ineligibility. He cannot be declared as successor simply because he did
not get the majority or the plurality of votes the electorate did not choose him. It would have
been different if Sales was able to prove that the voters still voted for Garvida despite knowing
her ineligibility, this would have rendered her votes stray.
Under Section 435 of the LGC, the SK Chairman should be succeeded by the SK member who
obtained the highest number of votes, should the SK member obtaining such vote succeed
Garvida?**
(**Not to be confused with Sales situation Sales was a candidate for SK chairmanship not SK
membership.)
The above argument cant be considered in this case because Section 435 only applies when the
SK Chairman refuses to assume office, fails to qualify, is convicted of a felony, voluntarily
resigns, dies, is permanently incapacitated, is removed from office, or has been absent without
leave for more than three (3) consecutive months. Garvidas case is not what Section 435
contemplates. Her removal from office by reason of her age is a question of eligibility. Being
eligible means being legally qualified; capable of being legally chosen. Ineligibility, on the
other hand, refers to the lack of the qualifications prescribed in the Constitution or the statutes
for holding public office. Ineligibility is not one of the grounds enumerated in Section 435 for
succession of the SK Chairman.
http://www.uberdigests.info/2013/01/lynette-garvida-vs-florencio-sales-jr/

TUPAY T. LOONG vs. COMMISSION ON ELECTIONS and ABDUSAKUR TAN

G.R. No. 133676
April 14, 1999

FACTS:

Automated elections systems was used for the May 11, 1998 regular elections held in the
Autonomous Region in Muslim Mindanao (ARMM) which includes the Province of Sulu. Atty.
Jose Tolentino, Jr. headed the COMELEC Task Force to have administrative oversight of the
elections in Sulu.

On May 12, 1998, some election inspectors and watchers informed Atty. Tolentino, Jr. of
discrepancies between the election returns and the votes cast for the mayoralty candidates in the
municipality of Pata. To avoid a situation where proceeding with automation will result in an
erroneous count, he suspended the automated counting of ballots in Pata and immediately
communicated the problem to the technical experts of COMELEC and the suppliers of the
automated machine. After the consultations, the experts told him that the problem was caused by
misalignment of the ovals opposite the names of candidates in the local ballots. They found
nothing wrong with the automated machines. The error was in the printing of the local ballots, as
a consequence of which, the automated machines failed to read them correctly. Atty. Tolentino,
Jr. called for an emergency meeting of the local candidates and the military-police officials
overseeing the Sulu elections. Among those who attended were petitioner Tupay Loong and
private respondent Abdusakar Tan and intervenor Yusop Jikiri (candidates for governor.) The
meeting discussed how the ballots in Pata should be counted in light of the misaligned ovals.
There was lack of agreement. Some recommended a shift to manual count (Tan et al) while the
others insisted on automated counting (Loong AND Jikiri).
Reports that the automated counting of ballots in other municipalities in Sulu was not working
well were received by the COMELEC Task Force. Local ballots in five (5) municipalities were
rejected by the automated machines. These municipalities were Talipao, Siasi, Tudanan, Tapul
and Jolo. The ballots were rejected because they had the wrong sequence code.

Before midnight of May 12, 1998, Atty. Tolentino, Jr. was able to send to the COMELEC en
banc his report and recommendation, urging the use of the manual count in the entire Province of
Sulu. 6 On the same day, COMELEC issued Minute Resolution No. 98-1747 ordering a manual
count but only in the municipality of Pata.. The next day, May 13, 1998, COMELEC issued
Resolution No. 98-1750 approving, Atty. Tolentino, Jr.'s recommendation and the manner of its
implementation. On May 15, 1998, the COMELEC en banc issued Minute Resolution No. 98-
1796 laying down the rules for the manual count. Minute Resolution 98-1798 laid down the
procedure for the counting of votes for Sulu at the PICC.

COMELEC started the manual count on May 18, 1998.

ISSUE:

1. Whether or not a petition for certiorari and prohibition under Rule 65 of the Rules of Court is
the appropriate remedy to invalidate the disputed COMELEC resolutions.
2. Assuming the appropriateness of the remedy, whether or not COMELEC committed grave
abuse of discretion amounting to lack of jurisdiction in ordering a manual count. (The main issue
in the case at bar)
2.a. Is there a legal basis for the manual count?
2.b. Are its factual bases reasonable?
2.c. Were the petitioner and the intervenor denied due process by the COMELEC when it ordered
a manual count?
3. Assuming the manual count is illegal and that its result is unreliable, whether or not it is proper
to call for a special election for the position of governor of Sulu.

HELD:

the petition of Tupay Loong and the petition in intervention of Yusop Jikiri are dismissed, there
being no showing that public respondent gravely abused its discretion in issuing Minute
Resolution Nos. 98-1748, 98-1750, 98-1796 and 98-1798. Our status quo order of June 23, 1998
is lifted.

(1.) Certiorari is the proper remedy of the petitioner. The issue is not only legal but one of first
impression and undoubtedly suffered with significance to the entire nation. It is adjudicatory of
the right of the petitioner, the private respondents and the intervenor to the position of governor
of Sulu. These are enough considerations to call for an exercise of the certiorari jurisdiction of
this Court.

(2a). A resolution of the issue will involve an interpretation of R.A. No. 8436 on automated
election in relation to the broad power of the COMELEC under Section 2(1), Article IX(C) of the
Constitution "to enforce and administer all laws and regulations relative to the conduct of an
election , plebiscite, initiative, referendum and recall." Undoubtedly, the text and intent of this
provision is to give COMELEC all the necessary and incidental powers for it to achieve the
objective of holding free, orderly, honest, peaceful, and credible elections.

The order for a manual count cannot be characterized as arbitrary, capricious or whimsical. It is
well established that the automated machines failed to read correctly the ballots in the
municipality of Pata The technical experts of COMELEC and the supplier of the automated
machines found nothing wrong the automated machines. They traced the problem to the printing
of local ballots by the National Printing Office. It is plain that to continue with the automated
count would result in a grossly erroneous count. An automated count of the local votes in Sulu
would have resulted in a wrong count, a travesty of the sovereignty of the electorate

In enacting R.A. No. 8436, Congress obviously failed to provide a remedy where the error in
counting is not machine-related for human foresight is not all-seeing. We hold, however, that the
vacuum in the law cannot prevent the COMELEC from levitating above the problem. . We
cannot kick away the will of the people by giving a literal interpretation to R.A. 8436. R.A. 8436
did not prohibit manual counting when machine count does not work. Counting is part and parcel
of the conduct of an election which is under the control and supervision of the COMELEC. It
ought to be self-evident that the Constitution did not envision a COMELEC that cannot count the
result of an election.

It is also important to consider that the failures of automated counting created post election
tension in Sulu, a province with a history of violent elections. COMELEC had to act desively in
view of the fast deteriorating peace and order situation caused by the delay in the counting of
votes
(2c) Petitioner Loong and intervenor Jikiri were not denied process. The Tolentino memorandum
clearly shows that they were given every opportunity to oppose the manual count of the local
ballots in Sulu. They were orally heard. They later submitted written position papers. Their
representatives escorted the transfer of the ballots and the automated machines from Sulu to
Manila. Their watchers observed the manual count from beginning to end.
3. The plea for this Court to call a special election for the governorship of Sulu is completely off-
line. The plea can only be grounded on failure of election. Section 6 of the Omnibus Election
Code tells us when there is a failure of election, viz:

Sec. 6. Failure of election. If, on account of force majeure, terrorism, fraud, or other
analogous causes, the election in any polling place has not been held on the date fixed, or had
been suspended before the hour fixed by law for the closing of the voting, or after the voting and
during the preparation and the transmission of the election returns or in the custody or canvass
thereof, such election results in a failure to elect, and in any of such cases the failure or
suspension of election would affect the result of the election, the Commission shall on the basis
of a verified petition by any interested party and after due notice and hearing, call for the holding
or continuation of the election, not held, suspended or which resulted in a failure to elect but not
later than thirty days after the cessation of the cause of such postponement or suspension of the
election or failure to elect.
There is another reason why a special election cannot be ordered by this Court. To hold a special
election only for the position of Governor will be discriminatory and will violate the right of
private respondent to equal protection of the law. The records show that all elected officials in
Sulu have been proclaimed and are now discharging their powers and duties. These officials
were proclaimed on the basis of the same manually counted votes of Sulu. If manual counting is
illegal, their assumption of office cannot also be countenanced. Private respondent's election
cannot be singled out as invalid for alikes cannot be treated unalikes.
The plea for a special election must be addressed to the COMELEC and not to this Court.
http://vbdiaz.blogspot.com/2010/01/tupay-t-loong-vs-commission-on.html

LOONG vs. COMELEC

216 SCRA 760, 1992

Facts: On 15 January 1990, petitioner filed with respondent Commission his certificate of
candidacy for the position of Vice-Governor of the Mindanao Autonomous Region in the election
held on 17 February 1990. On 5 March 1990 (or 16 days after the election), respondent Ututalum
filed before the respondent Commission a petition seeking to disqualify petitioner for the office
of Regional Vice-Governor, on the ground that the latter made a false representation in his
certificate of candidacy as to his age.

Petitioner Loong sought the dismissal of the petition on the ground that the respondent
COMELEC has no jurisdiction. The motion to dismiss was denied by the COMELEC in a
resolution which is the subject of this petition.

Petitioner Loong contends that SPA No. 90-006 (a petition to cancel the certificate of candidacy
of petitioner Loong) was filed out of time because it was filed beyond the 25-day period
prescribed by Section 78 of the Omnibus Election Code.

Issue: Whether or not SPA No. 90-006 was filed within the period prescribed by law.
Held: No. The petition filed by private respondent Ututalum with the respondent COMELEC to
disqualify petitioner Loong on the ground that the latter made a false representation in his
certificate of candidacy as to his age, clearly does not fall under the grounds of disqualification
as provided for in Rule 25 but is expressly covered by Rule 23 of the Comelec Rules of
Procedure governing petitions to cancel certificate of candidacy. Moreover, Section 3, Rule 25
which allows the filing of the petition at any time after the last day for the filing of certificates of
candidacy but not later than the date of proclamation, is merely a procedural rule issued by
respondent Commission which, although a constitutional body, has no legislative powers. Thus,
it can not supersede Section 78 of the Omnibus Election Code which is a legislative enactment.

https://www.scribd.com/document/207802264/LOONG-vs-Comelec

Faelnar vs People
GR Nos. 140850-51 May 4, 2000

Facts:
Faelnar filed a certificate for candidacy for the position of Barangay Chairman of
Barangay Guadalupe, Cebu in the 1997 barangay elections. The day after he filed his
certificate, a basketball tournament, the 2nd Jing-Jing Faelnars Cup, opened opened at
the Guadalupe Sports Complex.
Due to the basketball tournament, Antonio Luy filed a complaint for electioneering
against Faelnar and Cecilio Gillamac. It alleged that: 1) during the game, a streamer with
Faelnars name was placed on the facade of the complex, 2) his name was repeatedly
mentioned over the microphone, 3) the tournament was widely published in the local
newspaper, and 4) a raffle sponsored by Gillamac was held (home appliances were given
away). Faelnar calimed that it was purely a sporting event for the benefit of the youth.
Atty. Cadungog, election officer of Cebu, investigated the complaint and recommended
the dismissal of the charges. The law department of COMELEC recommended the filing
of the case.
 The COMELEC en banc resolved to dismiss the case (in a Resolution). Antonio Luy filed
an MR, and COMELEC ordered the filing of the necessary informations. Faelnar and
Gillamac were formally charged in the RTC (criminal cases). Petitioner moved to quash
the information, or a reinvestigation, due to the fact that the decision of the COMELEC is
final and executory and could no longer be reconsidered.

Issue:
Whether the first resolution of COMELEC was final executory and could not be reconsidered?

Held:
1. The first resolution of COMELEC (dismissing the case against Faelnar) was not final and may
be subject to a Motion for Reconsideration.
Rule 13, Section 1(d) of the 1988 COMELEC Rules of Procedure provide for an
exception in what pleadings are not allowed:
o motion for reconsideration of an en banc ruling, resolution, order or decision,
except in election offense cases
An MR of a ruling, resolution or decision of the COMELEC en banc is allowed in cases
involving election offenses. There is no question that what is involved in this case is a
resolution in an election offense. Therefore, an MR is allowed under the Rules.
Faelnar, likewise, invokes Rule 34, Section 10 of the same Rules. However, this section
does not apply to investigations conducted by COMELEC, but to the resolutions of the
State Prosecutor, or Provincial or City Fiscal, who has the delegated power to conduct
preliminary investigation of election offense cases. But if COMELEC conducts the
investigation through its own investigating officer, the section does not apply.
2. However, even if it was final, Faelnars motion to quash was not the proper remedy as it was
an attempt to circumvent a final resolution of the COMELEC. The proper remedy would have
been a petition for certiorari under Rule 64, which must be filed within 30 days from notice of
judgment. In this case, Faelnar filed his motion to quash more than a year after.

https://www.scribd.com/document/208108388/Faelnar-vs-People
CASE DIGEST : Restituto Ynot Vs IAC
G.R. No. 74457 March 20, 1987 RESTITUTO YNOT, petitioner, vs. INTERMEDIATE
APPELLATE COURT, THE STATION COMMANDER, INTEGRATED NATIONAL POLICE,
BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU OF ANIMAL
INDUSTRY, REGION IV, ILOILO CITY, respondents.

On January 13, 1984, the petitioner transported six carabaos in a pump boat from Masbate to
Iloilo when the same was confiscated by the police station commander of Barotac Nuevo, Iloilo
for the violation of E.O. 626-A. A case was filed by the petitioner questioning the
constitutionality of executive order and the recovery of the carabaos. After considering the merits
of the case, the confiscation was sustained and the court declined to rule on the constitutionality
issue. The petitioner appealed the decision to the Intermediate Appellate Court but it also upheld
the ruling of RTC.

Issue:

Is E.O. 626-A unconstitutional?

Ruling:

The Respondent contends that it is a valid exercise of police power to justify EO 626-A
amending EO 626 in asic rule prohibiting the slaughter of carabaos except under certain
conditions. The supreme court said that The reasonable connection between the means employed
and the purpose sought to be achieved by the questioned measure is missing the Supreme Court
do not see how the prohibition of the inter-provincial transport of carabaos can prevent their
indiscriminate slaughter, considering that they can be killed anywhere, with no less difficulty in
one province than in another. Obviously, retaining the carabaos in one province will not prevent
their slaughter there, any more than moving them to another province will make it easier to kill
them there

The Supreme Court found E.O. 626-A unconstitutional. The executive act defined the
prohibition, convicted the petitioner and immediately imposed punishment, which was carried
out forthright. Due process was not properly observed. In the instant case, the carabaos were
arbitrarily confiscated by the police station commander, were returned to the petitioner only after
he had filed a complaint for recovery and given a supersedeas bond of P12,000.00. The measure
struck at once and pounced upon the petitioner without giving him a chance to be heard, thus
denying due process.
http://tobicasdigest2.blogspot.com/2013/11/restituto-ynot-vs-iac-gr-no-74457-march.html
G.R. No. 177807/G.R. No. 177933 Case Digest
G.R. No. 177807/G.R. No. 177933, October 11, 2011
Emilio Gancayco
vs City Government of Quezon City and MMDA
Ponente: Sereno

Facts:

In 1950s, retired justice Emilio Gancayco bought a parcel of land located in EDSA. Then on
March 1956, Quezon City Council issued Ordinance No. 2904 requiring the construction of
arcades for commercial buildings to be constructed. At the outset, it bears emphasis that at the
time Ordinance No. 2904 was passed by the city council, there was yet no building code passed
by the national legislature. Thus, the regulation of the construction of buildings was left to the
discretion of local government units. Under this particular ordinance, the city council required
that the arcade is to be created by constructing the wall of the ground floor facing the sidewalk a
few meters away from the property line. Thus, the building owner is not allowed to construct his
wall up to the edge of the property line, thereby creating a space or shelter under the first floor.
In effect, property owners relinquish the use of the space for use as an arcade for pedestrians,
instead of using it for their own purposes.

The ordinance covered the property of Justice Gancayco. Subsequently, sometime in 1965,
Justice Gancayco sought the exemption of a two-storey building being constructed on his
property from the application of Ordinance No. 2904 that he be exempted from constructing an
arcade on his property.
On 2 February 1966, the City Council acted favorably on Justice Gancaycos request and issued
Resolution No. 7161, S-66, subject to the condition that upon notice by the City Engineer, the
owner shall, within reasonable time, demolish the enclosure of said arcade at his own expense
when public interest so demands.

Decades after, in March 2003, MMDA conducted operations to clear obstructions along EDSA,
in consequence, they sent a notice of demolition to Justice Gancayco alleging that a portion of
his building violated the National Building Code.
Gancayco did not comply with the notice and filed a petition for TRO with the RTC Quezon City
to prohibit the MMDA from demolishing his property. The RTC rendered its Decision on 30
September 2003 in favor of Justice Gancayco. It held that the questioned ordinance was
unconstitutional, ruling that it allowed the taking of private property for public use without just
compensation. The RTC said that because 67.5 square meters out of Justice Gancaycos 375
square meters of property were being taken without compensation for the publics benefit, the
ordinance was confiscatory and oppressive. It likewise held that the ordinance violated owners
right to equal protection of laws.

MMDA appealed with the CA. CA held that the MMDA went beyond its powers when it
demolished the subject property. It further found that Resolution No. 02-28 only refers to
sidewalks, streets, avenues, alleys, bridges, parks and other public places in Metro Manila, thus
excluding Justice Gancaycos private property. Lastly, the CA stated that the MMDA is not
clothed with the authority to declare, prevent or abate nuisances.

Issues: (1) WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM

ASSAILING THE VALIDITY OF ORDINANCE NO. 2904. (2) WHETHER OR NOT
ORDINANCE NO. 2904 IS CONSTITUTIONAL.(3) WHETHER OR NOT THE WING WALL
OF JUSTICE GANCAYCOS BUILDING IS A PUBLIC NUISANCE. (4) WHETHER OR
NOT THE MMDA LEGALLY DEMOLISHED THE PROPERTY OF JUSTICE GANCAYCO.

Ruling:

(1) We find that petitioner was not guilty of estoppel. When it made the undertaking to comply
with all issuances of the BIR, which at that time it considered as valid, petitioner did not commit
any false misrepresentation or misleading act.
(2) Justice Gancayco may not question the ordinance on the ground of equal protection when he
also benefited from the exemption. It bears emphasis that Justice Gancayco himself requested for
an exemption from the application of the ordinance in 1965 and was eventually granted one.
Moreover, he was still enjoying the exemption at the time of the demolition as there was yet no
valid notice from the city engineer. Thus, while the ordinance may be attacked with regard to its
different treatment of properties that appears to be similarly situated, Justice Gancayco is not the
proper person to do so.
(3) The fact that in 1966 the City Council gave Justice Gancayco an exemption from constructing
an arcade is an indication that the wing walls of the building are not nuisances per se. The wing
walls do not per se immediately and adversely affect the safety of persons and property. The fact
that an ordinance may declare a structure illegal does not necessarily make that structure a
nuisance. Clearly, when Justice Gancayco was given a permit to construct the building, the city
council or the city engineer did not consider the building, or its demolished portion, to be a threat
to the safety of persons and property. This fact alone should have warned the MMDA against
summarily demolishing the structure.

Sangguniang Bayan cannot declare a particular thing as a nuisance per se and order its
condemnation. It does not have the power to find, as a fact, that a particular thing is a nuisance
when such thing is not a nuisance per se; nor can it authorize the extrajudicial condemnation and
destruction of that as a nuisance which in its nature, situation or use is not such. Those things
must be determined and resolved in the ordinary courts of law.

MMDA illegally demolished Gancayco's property.

http://jeanneguian.blogspot.com/2014/10/gr-no-177807gr-no-177933-case-digest.html
Lutz v Araneta (1955)

Lutz v Araneta
GR No L-7859 December 22, 1955

FACTS:
Walter Lutz, as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma, sought
to recover the sum of
P14,666.40 paid by the estate as taxes from the Commissioner under Section e of
Commonwealth Act 567 or the Sugar Adjustment Act, alleging that such tax is unconstitutional
as it levied for the aid and support of the sugar industry exclusively, which is in his opinion not a
public purpose.

ISSUE:
Is the tax valid?

HELD:
Yes. The tax is levied with a regulatory purpose, i.e. to provide means for the rehabilitation and
stabilization of the threatened sugar industry. The act is primarily an exercise of police power
and is not a pure exercise of taxing power.
As sugar production is one of the great industries of the Philippines and its promotion, protection
and advancement redounds greatly to the general welfare, the legislature found that the general
welfare demanded that the industry should be stabilized, and provided that the distribution of
benefits had to sustain.
Further, it cannot be said that the devotion of tax money to experimental stations to seek increase
of efficiency in sugar production, utilization of by-products, etc., as well as to the improvement
of living and working conditions in sugar mills and plantations without any part of such money
being channeled directly to private persons, constitute expenditure of tax money for private
purposes.
Hence, the tax is valid.
http://victormorvis.blogspot.com/2015/06/lutz-v-araneta-1955.html
THE CITY OF MANILA, plaintiff-appellant,
vs.
CHINESE COMMUNITY OF MANILA, ET AL., defendants-appellees.

G.R. No. L-14355, October 31, 1919

FACTS

The important question presented by this appeal is: In expropriation proceedings by the
city of Manila, may the courts inquire into, and hear proof upon, the necessity of the
expropriation?

The City of Manila presented a petition in the Court of First Instance of said city, praying
that certain lands, therein particularly described, be expropriated for the purpose of constructing
a public improvement. The petitioner alleged that for the purpose of constructing an extension of
Rizal Avenue, Manila, it is necessary for the plaintiff to acquire ownership of certain parcels of
land situated in the district of Binondo. The defendants the Chinese Community of Manila,
Ildefonso Tambunting, and Feliza Concepcion de Delgado alleged in their Answer (a) that no
necessity existed for said expropriation and (b) that the land in question was a cemetery, which
had been used as such for many years, and was covered with sepulchres and monuments, and
that the same should not be converted into a street for public purposes. One of the defendants,
Ildefonso Tampbunting, offered to grant a right of way for the said extension over other land,
without cost to the plaintiff, in order that the sepulchers, chapels and graves of his ancestors may
not be disturbed.

The Honorable Simplicio del Rosario, decided that there was no necessity for the
expropriation of the particular strip of land in question, and absolved each and all of the
defendants from all liability under the complaint, without any finding as to costs. On appeal, the
plaintiff contended that the city of Manila has authority to expropriate private lands for public
purposes. Section 2429 of Act No. 2711 (Charter of the city of Manila) provides that "the city
(Manila) . . . may condemn private property for public use."

ISSUE

Whether or not the City of Manila can condemn private property for public use

HELD

No. It is true that Section 2429 of Act No. 2711, or the Charter of the City of Manila
states that "the city (Manila) . . . may condemn private property for public use." But when the
statute does not designate the property to be taken nor how it may be taken, the necessity of
taking particular property is a question for the courts. When the application to condemn or
appropriate property is made directly to the court, the question of necessity should be raised
(Wheeling, etc. R. R. Co. vs. Toledo, Ry, etc., Co. [72 Ohio St., 368]). The necessity for
conferring the authority upon a municipal corporation to exercise the right of eminent domain is
admittedly within the power of the legislature. But whether or not the municipal corporation or
entity is exercising the right in a particular case under the conditions imposed by the general
authority, is a question which the courts have the right to inquire into.

The impossibility of measuring the damage and inadequacy of a remedy at law is too
apparent to admit of argument. To disturb the mortal remains of those endeared to us in life
sometimes becomes the sad duty of the living; but, except in cases of necessity, or for laudable
purposes, the sanctity of the grave, the last resting place of our friends, should be maintained,
and the preventative aid of the courts should be invoked for that object. (Railroad Company vs.
Cemetery Co., 116 Tenn., 400; Evergreen Cemetery Association vs. The City of New Haven, 43
Conn., 234; Anderson vs. Acheson, 132 Iowa, 744; Beatty vs. Kurtz, 2 Peters, 566.)

Whether or not the cemetery is public or private property, its appropriation for the uses of
a public street, especially during the lifetime of those specially interested in its maintenance as a
cemetery, should be a question of great concern, and its appropriation should not be made for
such purposes until it is fully established that the greatest necessity exists therefor. In the present
case, even granting that a necessity exists for the opening of the street in question, the record
contains no proof of the necessity of opening the same through the cemetery. The record shows
that adjoining and adjacent lands have been offered by Tambunting to the city free of charge,
which will answer every purpose of the plaintiff.

The judgment of the lower court was affirmed.

RATIO/DOCTRINE

[1] The taking of private property for any use, which is not required by the necessities or
convenience of the inhabitants of the state, is an unreasonable exercise of the right of eminent
domain, and beyond the power of the legislature to delegate. (Bennett vs. Marion, 106 Iowa, 628,
633; Wilson vs. Pittsburg, etc. Co., 222 Pa. St., 541, 545; Greasy, etc. Co. vs. Ely, etc. Co., 132
Ky., 692, 697.) To justify the exercise of this extreme power (eminent domain) where the
legislature has left it to depend upon the necessity that may be found to exist, in order to
accomplish the purpose of the incorporation, the party claiming the right to the exercise of the
power should be required to show at least a reasonable degree of necessity for its exercise (New
Central Coal Co. vs. George's etc. Co. [37 Md., 537, 564]).

[2] The general power to exercise the right of eminent domain must not be confused with
the right to exercise it in a particular case. The power of the legislature to confer, upon
municipal corporations and other entities within the State, general authority to exercise the right
of eminent domain cannot be questioned by the courts, but that general authority of
municipalities or entities must not be confused with the right to exercise it in particular instances.
The moment the municipal corporation or entity attempts to exercise the authority conferred, it
must comply with the conditions accompanying the authority.
 [3] The right of expropriation is not an inherent power in a municipal corporation, and
before it can exercise the right some law must exist conferring the power upon it. When the
courts come to determine the question, they must only find (a) that a law or authority exists for
the exercise of the right of eminent domain, but (b) also that the right or authority is being
exercised in accordance with the law. In the present case there are two conditions imposed upon
the authority conceded to the City of Manila: First, the land must be private; and, second, the
purpose must be public. If the court, upon trial, finds that neither of these conditions exists or
that either one of them fails, certainly it cannot be contended that the right is being exercised in
accordance with law.

[4] The exercise of the right of eminent domain, whether directly by the State, or by its
authorized agents, is necessarily in derogation of private rights, and the rule in that case is that
the authority must be strictly construed. No species of property is held by individuals with
greater tenacity, and none is guarded by the constitution and laws more sedulously, than the right
to the freehold of inhabitants. When the legislature interferes with that right, and, for greater
public purposes, appropriates the land of an individual without his consent, the plain meaning of
the law should not be enlarged by doubtly interpretation. (Bensely vs. Mountainlake Water Co.,
13 Cal., 306 and cases cited [73 Am. Dec., 576].)

https://www.scribd.com/doc/44072393/City-of-Manila-vs-the-Chinese-Community-Digested
REPUBLIC OF THE PHILIPPINES VS. PLDT, digested
Posted by Pius Morados on November 8, 2011

26 SCRA 620 (1969) (Constitutional Law Eminent Domain, Expropriation, Just

Compensation)

FACTS: Public petitioner commenced a suit against private respondent praying for the right of
the Bureau of Telecommunications to demand interconnection between the Government
Telephone System and that of PLDT, so that the Government Telephone System could make use
of the lines and facilities of the PLDT. Private respondent contends that it cannot be compelled to
enter into a contract where no agreement is had between them.

ISSUE: Whether or not interconnection between PLDT and the Government Telephone System
can be a valid object for expropriation.

HELD: Yes, in the exercise of the sovereign power of eminent domain, the Republic may require
the telephone company to permit interconnection as the needs of the government service may
require, subject to the payment of just compensation. The use of lines and services to allow inter-
service connection between the both telephone systems, through expropriation can be a subject to
an easement of right of way.

https://piusmorados.wordpress.com/2011/11/08/republic-of-the-philippines-vs-pldt-digested/
REPUBLIC VS. VDA. DE CASTELLVI, digested

Posted by Pius Morados on November 7, 2011

GR # L-20620 August 15, 1974 (Constitutional Law Eminent Domain, Elements of Taking)

FACTS: After the owner of a parcel of land that has been rented and occupied by the
government in 1947 refused to extend the lease, the latter commenced expropriation proceedings
in 1959. During the assessment of just compensation, the government argued that it had taken the
property when the contract of lease commenced and not when the proceedings begun. The owner
maintains that the disputed land was not taken when the government commenced to occupy the
said land as lessee because the essential elements of the taking of property under the power of
eminent domain, namely (1) entrance and occupation by condemnor upon the private property
for more than a momentary period, and (2) devoting it to a public use in such a way as to oust the
owner and deprive him of all beneficial enjoyment of the property, are not present.

ISSUE: Whether or not the taking of property has taken place when the condemnor has entered
and occupied the property as lesse.
HELD: No, the property was deemed taken only when the expropriation proceedings
commenced in 1959.

The essential elements of the taking are: (1) Expropriator must enter a private property, (2) for
more than a momentary period, (3) and under warrant of legal authority, (4) devoting it to public
use, or otherwise informally appropriating or injuriously affecting it in such a way as (5)
substantially to oust the owner and deprive him of all beneficial enjoyment thereof.

In the case at bar, these elements were not present when the government entered and occupied
the property under a contract of lease.
https://piusmorados.wordpress.com/2011/11/07/republic-vs-vda-de-castellvi-digested/
G.R. No. 168770 February 9, 2011
ANUNCIACION VDA. DE OUANO, MARIO P. OUANO, LETICIA OUANO ARNAIZ,
and CIELO OUANO MARTINEZ, Petitioners,
vs.
THE REPUBLIC OF THE PHILIPPINES, THE MACTAN-CEBU INTERNATIONAL
AIRPORT AUTHORITY, and THE REGISTER OF DEEDS FOR THE CITY OF
CEBU, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 168812
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), Petitioner,
vs.
RICARDO L. INOCIAN, in his personal capacity and as Attorney-in-Fact of OLYMPIA E.
ESTEVES, EMILIA E. BACALLA, RESTITUTA E. MONTANA, and RAUL L.
INOCIAN; and ALETHA SUICO MAGAT, in her personal capacity and as Attorney-in-
Fact of PHILIP M. SUICO, DORIS S. DELA CRUZ, JAMES M. SUICO, EDWARD M.
SUICO, ROSELYN SUICO-LAWSIN, REX M. SUICO, KHARLA SUICO-GUTIERREZ,
ALBERT CHIONGBIAN, and JOHNNY CHAN, Respondents.

FACTS:

At the center of these two (2) Petitions for Review on Certiorari under Rule 45 is the
issue of the right of the former owners of lots acquired for the expansion of the Lahug Airport in
Cebu City to repurchase or secure reconveyance of their respective properties.

At the outset, three (3) fairly established factual premises ought to be emphasized:

First, the MCIAA and/or its predecessor agency had not actually used the lots subject of the final
decree of expropriation in Civil Case No. R-1881 for the purpose they were originally taken by
the government, i.e., for the expansion and development of Lahug Airport.

Second, the Lahug Airport had been closed and abandoned. A significant portion of it had, in
fact, been purchased by a private corporation for development as a commercial complex.

Third, it has been preponderantly established by evidence that the NAC, through its team of
negotiators, had given assurance to the affected landowners that they would be entitled to
repurchase their respective lots in the event they are no longer used for airport purposes. "No less
than Asterio Uy," the Court noted in Heirs of Moreno, "one of the members of the CAA Mactan
Legal Team, which interceded for the acquisition of the lots for the Lahug Airports expansion,
affirmed that persistent assurances were given to the landowners to the effect that as soon as the
Lahug Airport is abandoned or transferred to Mactan, the lot owners would be able to reacquire
their properties." In Civil Case No. CEB-20743, Exhibit "G," the transcript of the deposition of
Anunciacion vda. de Ouano covering the assurance made had been formally offered in evidence
and duly considered in the initial decision of the RTC Cebu City. In Civil Case No. CEB-18370,
the trial court, on the basis of testimonial evidence, and later the CA, recognized the reversionary
rights of the suing former lot owners or their successors in interest and resolved the case
accordingly. In point with respect to the representation and promise of the government to return
the lots taken should the planned airport expansion do not materialize is what the Court said
in Heirs of Moreno, thus:
This is a difficult case calling for a difficult but just solution. To begin with there exists
an undeniable historical narrative that the predecessors of respondent MCIAA had suggested to
the landowners of the properties covered by the Lahug Airport expansion scheme that they could
repurchase their properties at the termination of the airports venue. Some acted on this assurance
and sold their properties; other landowners held out and waited for the exercise of eminent
domain to take its course until finally coming to terms with respondents predecessors that they
would not appeal nor block further judgment of condemnation if the right of repurchase was
extended to them. A handful failed to prove that they acted on such assurance when they parted
with ownership of their land.

ISSUES:
Whether abandonment of the public use for which the subject properties were
expropriated entitles petitioners Ouanos, et al. and respondents Inocian, et al. to reacquire them.

HELD:
YES.

Providing added support to the Ouanos and the Inocians right to repurchase is what
in Heirs of Moreno was referred to as constructive trust, one that is akin to the implied trust
expressed in Art. 1454 of the Civil Code, the purpose of which is to prevent unjust
enrichment. In the case at bench, the Ouanos and the Inocians parted with their respective lots in
favor of the MCIAA, the latter obliging itself to use the realties for the expansion of Lahug
Airport; failing to keep its end of the bargain, MCIAA can be compelled by the former
landowners to reconvey the parcels of land to them, otherwise, they would be denied the use of
their properties upon a state of affairs that was not conceived nor contemplated when the
expropriation was authorized. In effect, the government merely held the properties condemned in
trust until the proposed public use or purpose for which the lots were condemned was actually
consummated by the government. Since the government failed to perform the obligation that is
the basis of the transfer of the property, then the lot owners Ouanos and Inocians can demand the
reconveyance of their old properties after the payment of the condemnation price.

In esse, expropriation is forced private property taking, the landowner being really
without a ghost of a chance to defeat the case of the expropriating agency. In other words, in
expropriation, the private owner is deprived of property against his will. Withal, the mandatory
requirement of due process ought to be strictly followed, such that the state must show, at the
minimum, a genuine need, an exacting public purpose to take private property, the purpose to be
specifically alleged or least reasonably deducible from the complaint.

Public use, as an eminent domain concept, has now acquired an expansive meaning to
include any use that is of "usefulness, utility, or advantage, or what is productive of general
benefit [of the public]." If the genuine public necessitythe very reason or condition as it were
allowing, at the first instance, the expropriation of a private land ceases or disappears, then
there is no more cogent point for the governments retention of the expropriated land. The same
legal situation should hold if the government devotes the property to another public use very
much different from the original or deviates from the declared purpose to benefit another private
person. It has been said that the direct use by the state of its power to oblige landowners to
renounce their productive possession to another citizen, who will use it predominantly for that
citizens own private gain, is offensive to our laws.

A condemnor should commit to use the property pursuant to the purpose stated in the
petition for expropriation, failing which it should file another petition for the new purpose. If not,
then it behooves the condemnor to return the said property to its private owner, if the latter so
desires. The government cannot plausibly keep the property it expropriated in any manner it
pleases and, in the process, dishonor the judgment of expropriation. This is not in keeping with
the idea of fair play,
The notion, therefore, that the government, via expropriation proceedings, acquires unrestricted
ownership over or a fee simple title to the covered land, is no longer tenable.

Expropriated lands should be differentiated from a piece of land, ownership of which was
absolutely transferred by way of an unconditional purchase and sale contract freely entered by
two parties, one without obligation to buy and the other without the duty to sell. In that case, the
fee simple concept really comes into play. There is really no occasion to apply the "fee simple
concept" if the transfer is conditional. The taking of a private land in expropriation proceedings
is always conditioned on its continued devotion to its public purpose. As a necessary corollary,
once the purpose is terminated or peremptorily abandoned, then the former owner, if he so
desires, may seek its reversion, subject of course to the return, at the very least, of the just
compensation received.

To be compelled to renounce dominion over a piece of land is, in itself, an already bitter
pill to swallow for the owner. But to be asked to sacrifice for the common good and yield
ownership to the government which reneges on its assurance that the private property shall be for
a public purpose may be too much. But it would be worse if the power of eminent domain were
deliberately used as a subterfuge to benefit another with influence and power in the political
process, including development firms. The mischief thus depicted is not at all far-fetched with
the continued application of Fery. Even as the Court deliberates on these consolidated cases,
there is an uncontroverted allegation that the MCIAA is poised to sell, if it has not yet sold, the
areas in question to Cebu Property Ventures, Inc. This provides an added dimension to abandon
Fery.

https://www.scribd.com/document/167242163/Vda-de-Ouano-vs-Republic
 CIR vs. Algue Inc.

Commissioner of Internal Revenue vs. Algue Inc.

GR No. L-28896 | Feb. 17, 1988

Facts:
Algue Inc. is a domestic corp engaged in engineering, construction and other allied activities
On Jan. 14, 1965, the corp received a letter from the CIR regarding its delinquency income
taxes from 1958-1959, amtg to P83,183.85
A letter of protest or reconsideration was filed by Algue Inc on Jan 18
On March 12, a warrant of distraint and levy was presented to Algue Inc. thru its counsel,
Atty. Guevara, who refused to receive it on the ground of the pending protest
Since the protest was not found on the records, a file copy from the corp was produced and
given to BIR Agent Reyes, who deferred service of the warrant
On April 7, Atty. Guevara was informed that the BIR was not taking any action on the
protest and it was only then that he accepted the warrant of distraint and levy earlier sought to be
served
On April 23, Algue filed a petition for review of the decision of the CIR with the Court of
Tax Appeals
CIR contentions:
- the claimed deduction of P75,000.00 was properly disallowed because it was not an ordinary
reasonable or necessary business expense
- payments are fictitious because most of the payees are members of the same family in control
of Algue and that there is not enough substantiation of such payments
CTA: 75K had been legitimately paid by Algue Inc. for actual services rendered in the form
of promotional fees. These were collected by the Payees for their work in the creation of the
Vegetable Oil Investment Corporation of the Philippines and its subsequent purchase of the
properties of the Philippine Sugar Estate Development Company.

Issue: W/N the Collector of Internal Revenue correctly disallowed the P75,000.00 deduction
claimed by Algue as legitimate business expenses in its income tax returns

Ruling:
Taxes are the lifeblood of the government and so should be collected without unnecessary
hindrance, made in accordance with law.
 RA 1125: the appeal may be made within thirty days after receipt of the decision or ruling
challenged
During the intervening period, the warrant was premature and could therefore not be served.
Originally, CIR claimed that the 75K promotional fees to be personal holding company
income, but later on conformed to the decision of CTA
There is no dispute that the payees duly reported their respective shares of the fees in their
income tax returns and paid the corresponding taxes thereon. CTA also found, after examining
the evidence, that no distribution of dividends was involved
CIR suggests a tax dodge, an attempt to evade a legitimate assessment by involving an
imaginary deduction
Algue Inc. was a family corporation where strict business procedures were not applied and
immediate issuance of receipts was not required. at the end of the year, when the books were to
be closed, each payee made an accounting of all of the fees received by him or her, to make up
the total of P75,000.00. This arrangement was understandable in view of the close relationship
among the persons in the family corporation
The amount of the promotional fees was not excessive. The total commission paid by the
Philippine Sugar Estate Development Co. to Algue Inc. was P125K. After deducting the said
fees, Algue still had a balance of P50,000.00 as clear profit from the transaction. The amount of
P75,000.00 was 60% of the total commission. This was a reasonable proportion, considering that
it was the payees who did practically everything, from the formation of the Vegetable Oil
Investment Corporation to the actual purchase by it of the Sugar Estate properties.
Sec. 30 of the Tax Code: allowed deductions in the net income Expenses - All the ordinary
and necessary expenses paid or incurred during the taxable year in carrying on any trade or
business, including a reasonable allowance for salaries or other compensation for personal
services actually rendered xxx
the burden is on the taxpayer to prove the validity of the claimed deduction
In this case, Algue Inc. has proved that the payment of the fees was necessary and
reasonable in the light of the efforts exerted by the payees in inducing investors and prominent
businessmen to venture in an experimental enterprise and involve themselves in a new business
requiring millions of pesos.
Taxes are what we pay for civilization society. Without taxes, the government would be
paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural
reluctance to surrender part of one's hard earned income to the taxing authorities, every person
who is able to must contribute his share in the running of the government. The government for its
part, is expected to respond in the form of tangible and intangible benefits intended to improve
the lives of the people and enhance their moral and material values
Taxation must be exercised reasonably and in accordance with the prescribed procedure. If it
is not, then the taxpayer has a right to complain and the courts will then come to his succor
Algue Inc.s appeal from the decision of the CIR was filed on time with the CTA in accordance
with Rep. Act No. 1125. And we also find that the claimed deduction by Algue Inc. was
permitted under the Internal Revenue Code and should therefore not have been disallowed by the
CIR
http://die-gests.blogspot.com/2013/03/cir-vs-algue-inc.html