CASE1
Araneta
The decision appealed from is affirmed, with
costs against appellant. So ordered.
Lutz vs. Araneta [December 22, 1955, (98
Phil 148)]
Post under case digests, Taxation at Friday,
February 24, 2012 Posted by Schizophrenic
Mind
Facts: Commonwealth Act No. 567, otherwise
known as Sugar Adjustment Act was
promulgated in 1940 to stabilize the sugar
industry so as to prepare it for the eventuality
of the loss of its preferential position in the
United States market and the imposition of
export taxes. Plaintiff, Walter Lutz, in his
capacity as Judicial Administrator of the
Intestate Estate of Antonio Jayme Ledesma,
seeks to recover from the Collector of Internal
Revenue the sum of P14,666.40 paid by the
estate as taxes, under Sec.3 of the Act,
alleging that such tax is unconstitutional and
void, being levied for the aid and support of the
sugar industry exclusively, which in plaintiffs
opinion is not a public purpose for which a tax
may be constitutionally levied. The action has
been dismissed by the Court of First Instance.
Issue: Whether or not the tax imposed is
constitutional.
Held: Yes. The act is primarily an exercise of
the police power. It is shown in the Act that the
tax is levied with a regulatory purpose, to
provide means for the rehabilitation and
stabilization of the threatened sugar industry.
It is inherent in the power to tax that a state be
free to select the subjects of taxation, and it
has been repeatedly held that inequalities
which result from a singling out of one
particular class for taxation or exemption
infringe no constitutional limitation.
The funds raised under the Act should be
exclusively spent in aid of the sugar industry,
since it is that very enterprise that is being
protected. It may be that other industries are
also in need of similar protection; but the
legislature is not required by the Constitution
to adhere to a policy of all or none.
Lutz vs.
LUTZ v. ARANETA
GR No. L-7859, December 22, 1955
98 PHIL 148
FACTS: Plaintiff Walter Lutz, in his capacity as
judicial administrator of the intestate estate of
Antionio Ledesma, sought to recover from the
CIR the sum of P14,666.40 paid by the estate
as taxes, under section 3 of the CA 567 or the
Sugar Adjustment Act thereby assailing its
constitutionality, for it provided for an increase
of the existing tax on the manufacture of
sugar, alleging that such enactment is not
being levied for a public purpose but solely and
exclusively for the aid and support of the sugar
industry thus making it void and
unconstitutional. The sugar industry situation
at the time of the enactment was in an
imminent threat of loss and needed to be
stabilized by imposition of emergency
measures.
ISSUE: Is CA 567 constitutional, despite its
being allegedly violative of the equal protection
clause, the purpose of which is not for the
benefit of the general public but for the
rehabilitation only of the sugar industry?
HELD: Yes. The protection and promotion of the
sugar industry is a matter of public concern, it
follows that the Legislature may determine
within reasonable bounds what is necessary for
its protection and expedient for its promotion.
Here, the legislative discretion must be allowed
to fully play, subject only to the test of
reasonableness; and it is not contended that
the means provided in the law bear no relation
to the objective pursued or are oppressive in
character. If objective and methods are alike
constitutionally valid, no reason is seen why
the state may not levy taxes to raise funds for
their prosecution and attainment. Taxation may
be made the implement of the state's police
power.
CASE 2
WHEREFORE, the petition is GRANTED insofar
as it prays for the nullification of the
reimbursement of financing charges, paid
pursuant to E.O. 137, and DISMISSED in all
other respects.
Home
OSMEA VS. ORBOS [220 SCRA 703; G.R.
NO. 99886; 31 MAR 1993]
Saturday, January 31, 2009 Posted by
Coffeeholic Writes
Labels: Case Digests, Political Law
Facts: On October 10, 1984, Pres. Marcos
issued P.D. 1956 creating a Special Account in
the General Fund, designated as the Oil Price
Stabilization Fund (OPSF). The OPSF was
designed to reimburse oil companies for cost
increases in crude oil and imported petroleum
products resulting from exchange rate
adjustments and from increases in the world
market prices of crude oil.
Subsequently, the OPSF was reclassified into a
"trust liability account," in virtue of E.O. 1024,
and ordered released from the National
Treasury to the Ministry of Energy.
Pres. Aquino, amended P.D. 1956. She
promulgated Executive Order No. 137 on
February 27, 1987, expanding the grounds for
reimbursement to oil companies for possible
cost underrecovery incurred as a result of the
reduction of domestic prices of petroleum
products, the amount of the underrecovery
being left for determination by the Ministry of
Finance.
The petition avers that the creation of the trust
fund violates 29(3), Article VI of the
Constitution, reading as follows:
(3) All money collected on any tax levied for a
special purpose shall be treated as a special
fund and paid out for such purposes only. If the
purpose for which a special fund was created
has been fulfilled or abandoned, the balance, if
any, shall be transferred to the general funds
of the Government.
The petitioner argues that "the monies
collected pursuant to . . P.D. 1956, as
amended, must be treated as a 'SPECIAL
FUND,' not as a 'trust account' or a 'trust fund,'
and that "if a special tax is collected for a
specific purpose, the revenue generated
therefrom shall 'be treated as a special fund' to
be used only for the purpose indicated, and not
channeled to another government objective."
Petitioner further points out that since "a
'special fund' consists of monies collected
through the taxing power of a State, such
amounts belong to the State, although the use
thereof is limited to the special
purpose/objective for which it was created."
He also contends that the "delegation of
legislative authority" to the ERB violates 28 (2).
Article VI of the Constitution, viz.:
(2) The Congress may, by law, authorize the
President to fix, within specified limits, and
subject to such limitations and restrictions as it
may impose, tariff rates, import and export
quotas, tonnage and wharfage dues, and other
duties or imposts within the framework of the
national development program of the
Government;
and, inasmuch as the delegation relates to the
exercise of the power of taxation, "the limits,
limitations and restrictions must be
quantitative, that is, the law must not only
specify how to tax, who (shall) be taxed (and)
what the tax is for, but also impose a specific
limit on how much to tax."
Issues:
(1) Whether or Not the invalidity of the "TRUST
ACCOUNT" in the books of account of the
Ministry of Energy (now, the Office of Energy
Affairs), created pursuant to 8, paragraph 1,
of P.D. No. 1956, as amended, "said creation of
a trust fund being contrary to Section 29 (3),
Article VI of the Constitution.
(2) Whether or Not the unconstitutionality of 8,
paragraph 1 (c) of P.D. No. 1956, as amended
by Executive Order No. 137, for "being an
undue and invalid delegation of legislative
power to the Energy Regulatory Board.
Held: The OPSF is a "Trust Account" which was
established "for the purpose of minimizing the
frequent price changes brought about by
exchange rate adjustment and/or changes in
world market prices of crude oil and imported
petroleum products." Under P.D. No. 1956, as
amended by Executive Order No. 137 dated 27
February 1987, this Trust Account may be
funded from any of the following sources:
a) Any increase in the tax collection from ad
valorem tax or customs duty imposed on
petroleum products subject to tax under this
Decree arising from exchange rate adjustment,
as may be determined by the Minister of
Finance in consultation with the Board of
Energy;
b) Any increase in the tax collection as a result
of the lifting of tax exemptions of government
corporations, as may be determined by the
Minister of Finance in consultation with the
Board of Energy;
c) Any additional amount to be imposed on
petroleum products to augment the resources
of the Fund through an appropriate Order that
may be issued by the Board of Energy requiring
payment of persons or companies engaged in
the business of importing, manufacturing
and/or marketing petroleum products;
d) Any resulting peso cost differentials in case
the actual peso costs paid by oil companies in
the importation of crude oil and petroleum
products is less than the peso costs computed
using the reference foreign exchange rate as
fixed by the Board of Energy.
Hence, it seems clear that while the funds
collected may be referred to as taxes, they are
exacted in the exercise of the police power of
the State. Moreover, that the OPSF is a special
fund is plain from the special treatment given it
by E.O. 137. It is segregated from the general
fund; and while it is placed in what the law
refers to as a "trust liability account," the fund
nonetheless remains subject to the scrutiny
and review of the COA. The Court is satisfied
that these measures comply with the
constitutional description of a "special fund."
Indeed, the practice is not without precedent.
With regard to the alleged undue delegation of
legislative power, the Court finds that the
provision conferring the authority upon the ERB
to impose additional amounts on petroleum
products provides a sufficient standard by
which the authority must be exercised. In
addition to the general policy of the law to
protect the local consumer by stabilizing and
subsidizing domestic pump rates, 8(c) of P.D.
1956 expressly authorizes the ERB to impose
additional amounts to augment the resources
of the Fund.
What petitioner would wish is the fixing of
some definite, quantitative restriction, or "a
specific limit on how much to tax." The Court is
cited to this requirement by the petitioner on
the premise that what is involved here is the
power of taxation; but as already discussed,
this is not the case. What is here involved is
not so much the power of taxation as police
power. Although the provision authorizing the
ERB to impose additional amounts could be
construed to refer to the power of taxation, it
cannot be overlooked that the overriding
consideration is to enable the delegate to act
with expediency in carrying out the objectives
of the law which are embraced by the police
power of the State.
The interplay and constant fluctuation of the
various factors involved in the determination of
the price of oil and petroleum products, and
the frequently shifting need to either augment
or exhaust the Fund, do not conveniently
permit the setting of fixed or rigid parameters
in the law as proposed by the petitioner. To do
so would render the ERB unable to respond
effectively so as to mitigate or avoid the
undesirable consequences of such fluidity. As
such, the standard as it is expressed suffices to
guide the delegate in the exercise of the
delegated power, taking account of the
circumstances under which it is to be
exercised.
CASE 3
DISMISSED
Taxi Cab Operators v. The Board of
Transportation [GR L-59234, 30
September 1982]
En Banc, Melencio-Herrera (p): 12 concur, 2
concur in the result
Facts:
On 10 October 1977, the Board of
Transportation (BT) issued Memorandum
Circular 77-42 which phases out old and
dilapidated taxis; refusing registration to taxi
units within the National Capitol Region having
year models over 6 years old. Pursuant to the
above BOT circular, the Director of the Bureau
of Land Transportation (BLT) issued
Implementing Circular 52, dated 15 August
1980, instructing the Regional Director, the MV
Registrars and other personnel of BLT, all within
the National Capital Region (NCR), to
implement said Circular, and formulating a
schedule of phase-out of vehicles to be allowed
and accepted for
registration as public conveyances. In
accordance therewith, cabs of model 1971
were phase-out in registration year 1978; those
of model 1972, in 1979; those of model 1973,
in 1980; and those of model 1974, in 1981. On
27 January 1981, Taxicab Operators of Metro
Manila, Inc. (TOMMI), including its members
Ace Transportation Corporation and Felicisimo
Cabigao, filed a petition with the BT (Case 80-
7553), seeking to nullify MC 77-42 or to stop its
implementation; to allow the registration and
operation in 1981 and subsequent years of
taxicabs of model 1974, as well as those of
earlier models which were phased-out,
provided that, at the time of registration, they
are roadworthy and fit for operation. On 16
February 1981, TOMMI, et. al. filed before the
BT a "Manifestation and Urgent Motion",
praying for an early hearing of their petition.
The case was heard on 20 February 1981. On
28 November 1981, TOMMI, et. al. filed before
the same Board a "Manifestation and Urgent
Motion to Resolve or Decide Main Petition"
praying that the case be resolved or decided
not later than 10 December 1981 to enable
them, in case of denial, to avail of whatever
remedy they may have under the law for the
protection of their interests before their 1975
model cabs are phased-out on 1 January 1982.
TOMMI, et. al., through its President, allegedly
made personal follow-ups of the case, but was
later informed that the records of the case
could not be located. On 29 December 1981,
TOMMI, et. al., instituted a petition for
certiorari, prohibition and mandamus with
preliminary injunction and temporary
restraining order with the Supreme Court.
Issue:
Whether Memorandum Circular 77-42, phasing
out 6-year old taxicabs and older, is a valid
administrative issuance.
Held:
Presidential Decree 101 grants to the Board of
Transportation the power to fix just and
reasonable standards, classification,
regulations, practices,measurements, or
service to be furnished, imposed, observed,
and followed by operators of public utility
motor vehicles. The overriding consideration in
the issuance of Memorandum Circular 77-42 is
the safety and comfort of the riding public from
the dangers posed by old and dilapidated taxis.
The State, in the exercise of its police power,
can prescribe regulations to promote the
health, morals, peace, good order, safety and
general welfare of the people. It can prohibit all
things hurtful to comfort, safety and welfare of
society. It may also regulate property rights.
The necessities imposed by public welfare may
justify the exercise of governmental authority
to regulate even if thereby certain groups may
plausibly assert that their interests are
disregarded. Dispensing with a public hearing
prior to the issuance of the Circulars is not
violative of procedural due process. Previous
notice and hearing is not essential to the
validity of general rules or regulations
promulgated to govern future conduct of a
class or persons or enterprises, unless the law
provides otherwise. It is impractical to subject
every taxicab to constant and recurring
evaluation to determine its road-worthiness,
not to speak of the fact that it can open the
door to the adoption of multiple standards,
possible collusion, and even graft and
corruption. A reasonable standard must be
adopted to apply to all vehicles affected
uniformly, fairly, and justly. The span of six
years supplies that reasonable standard. The
product of experience shows that by that time
taxis have fully depreciated, their cost
recovered, and a fair return on investment
obtained. They are also generally dilapidated
and no longer fit for safe and comfortable
service to the public specially considering that
they are in continuous operation practically 24
hours everyday in three shifts of eight hours
per shift. With that standard of reasonableness
and absence of arbitrariness, the requirement
of due process has been met.
CASE 4
ACCORDINGLY, the Petition for Review is
given DUE COURSE and the Decision of
the Court of Appeals dated 7 February
1990 and its Resolution dated 10 May
1990 in A.C.-G.R. No. SP 18821 are
hereby SET ASIDE. The Order of petitioner
Board dated 22 September 1988 and the
Writ of Execution, as well as the decision
of the trial court dated 21 July 1989, are
hereby REINSTATED, without prejudice to
the right of Solar to contest the
correctness of the basis of the Board's
Order and Writ of Execution at a public
hearing before the Board.
Pollution Adjudication Board vs. CA et al.
G.R. No. 93891, 11 March 1991
Third Division, Feliciano (J), 4 concur
FACTS: Respondent, Solar Textile Finishing
Corporation was involved in bleaching, rinsing
and dyeing textiles with wastewater being
directly discharged into a canal leading to the
adjacent Tullahan- Tinerejos River. Petitioner
Board, an agency of the Government charged
with the task of determining whether the
effluents of a particular industrial
establishment comply with or violate applicable
anti-pollution statutory and regulatory
provisions, have been remarkably forbearing in
its efforts to enforce the applicable standards
vis-a-vis Solar. Solar, on the other hand,
seemed very casual about its continued
discharge of untreated, pollutive effluents into
the river. Petitioner Board issued an ex parte
Order directing Solar immediately to cease and
desist from utilizing its wastewater pollution
source installations. Solar, however, with
preliminary injunction against the Board, went
to the Regional Trial Court on petition for
certiorari, but it was dismissed upon two (2)
grounds, i.e., that appeal and not certiorari
from the questioned Order of the Board as well
as the Writ of Execution was the proper
remedy, and that the Board's subsequent
Order allowing Solar to operate temporarily
had rendered Solar's petition moot and
academic. Dissatisfied, Solar went on appeal to
the Court of Appeals, which reversed the Order
of dismissal of the trial court and remanded the
case to that court for further proceedings. In
addition, the Court of Appeals declared the Writ
of Execution null and void. At the same time,
the CA said that certiorari was a proper remedy
since the Orders of petitioner Board may result
in great and irreparable injury to Solar; and
that while the case might be moot and
academic, "larger issues" demanded that the
question of due process be settled. Petitioner
Board moved for reconsideration, without
success.
Arguing that that the ex parte Order and the
Writ of Execution were issued in accordance
with law and were not violative of the
requirements of due process; and the ex parte
Order and the Writ of Execution are not the
proper subjects of a petition for certiorari,
Oscar A. Pascua and Charemon Clio L. Borre for
petitioner asked the Supreme Court to review
the Decision and Resolution promulgated by
the Court of Appeals entitled "Solar Textile
Finishing Corporation v. Pollution Adjudication
Board," which reversed an order of the
Regional Trial Court. In addition, petitioner
Board claims that under P.D. No. 984, Section
7(a), it has legal authority to issue ex parte
orders to suspend the operations of an
establishment when there is prima facie
evidence that such establishment is
discharging effluents or wastewater, the
pollution level of which exceeds the maximum
permissible standards set by the NPCC (now,
the Board). Petitioner Board contends that the
reports before it concerning the effluent
discharges of Solar into the River provided
prima facie evidence of violation by Solar of
Section 5 of the 1982 Effluent Code. Solar, on
the other hand, contends that under the
Board's own rules and regulations, an ex parte
order may issue only if the effluents discharged
pose an "immediate threat to life, public
health, safety or welfare, or to animal and plant
life." In the instant case, according to Solar, the
inspection reports before the Board made no
finding that Solar's wastewater discharged
posed such a threat.
ISSUE: Whether or not the Court of Appeals
erred in reversing the trial court on the ground
that Solar had been denied due process by the
Board.
HELD: The Court found that the Order and Writ
of Execution were entirely within the lawful
authority of petitioner Board. Ex parte cease
and desist orders are permitted by law and
regulations in situations like here. The relevant
pollution control statute and implementing
regulations were enacted and promulgated in
the exercise of that pervasive, sovereign power
to protect the safety, health, and general
welfare and comfort of the public, as well as
the protection of plant and animal life,
commonly designated as the police power. It is
a constitutional commonplace that the ordinary
requirements of procedural due process yield
to the necessities of protecting vital public
interests like those here involved, through the
exercise of police power. Hence, the trial court
did not err when it dismissed Solar's petition
for certiorari. It follows that the proper remedy
was an appeal from the trial court to the Court
of Appeals, as Solar did in fact appeal. The
Court gave due course on the Petition for
Review and the Decision of the Court of
Appeals and its Resolution were set aside. The
Order of petitioner Board and the Writ of
Execution, as well as the decision of the trial
court were reinstated, without prejudice to the
right of Solar to contest the correctness of the
basis of the Board's Order and Writ of
Execution at a public hearing before the Board.
CASE 5
WHEREFORE, the Petition for certiorari is
DISMISSED and the Order of the respondent
trial court denying the petition for a writ of
preliminary injunction is AFFIRMED. Costs
against petitioners

Tablarin v. Gutierrez (J) [GR 78164, 31 July
1987]
En Banc, Feliciano (J): 13 concur
Facts:
Teresita Tablarin, Ma. Luz Ciriaco, Ma. Nimfa B.
Rovira, and Evangelina S. Labao sought
admission into colleges or schools of medicine
for the school year 1987-1988. However, they
either did not take or did not successfully take
the National Medical Admission Test (NMAT)
required by the Board of Medical
Education and administered by the Center for
Educational Measurement (CEM). On 5 March
1987, Tablarin,et. al., in behalf of applicants for
admission into the Medical Colleges who have
not taken up or successfully hurdled the NMAT,
filed with the Regional Trial Court (RTC),
National Capital Judicial Region, a Petition for
Declaratory Judgment and Prohibition with a
prayer for Temporary Restraining Order (TRO)
and Preliminary Injunction, to enjoin the
Secretary of Education, Culture and Sports, the
Board of Medical Education and the
Center for Educational Measurement from
enforcing Section 5 (a) and (f) of Republic Act
2382, as amended, and MECS Order 52 (series
of 1985), dated 23 August 1985 [which
established a uniform admission test (NMAT) as
an additional requirement for issuance of a
certificate of eligibility for admission into
medical schools of the Philippines, beginning
with the school year 1986-1987] and from
requiring the taking and passing of the NMAT
as a condition for securing certificates of
eligibility for admission, from proceeding with
accepting applications for taking the NMAT and
from administering the NMAT as scheduled on
26 April 1987 and in the future. After hearing
on the petition for issuance of preliminary
injunction, the trial court denied said petition
on 20 April 1987. The NMAT was conducted and
administered as previously scheduled. Tablarin,
et. al. accordingly filed a Special Civil Action for
Certiorari with the Supreme Court to set aside
the Order of the RTC judge denying the petition
for issuance of a writ of preliminary injunction.
Issue:
Whether NMAT requirement for admission to
medical colleges contravenes the
Constitutional guarantee for the accessibility of
education to all, and whether such regulation is
invalid and/or unconstitutional.
Held:
No. Republic Act 2382, as amended by Republic
Acts 4224 and 5946, known as the "Medical Act
of 1959" defines its basic objectives to govern
(a) the standardization and regulation of
medical education; (b)
the examination for registration of physicians;
and (c) the supervision, control and regulation
of the practice of medicine in the Philippines.
The Statute created a Board of Medical
Education and prescribed certain minimum
requirements for applicants to medical schools.
The State is not really enjoined to take
appropriate
steps to make quality education "accessible to
all who might for any number of reasons wish
to enroll in a professional school but rather
merely to make such education accessible to
all who qualify under "fair,reasonable and
equitable admission and academic
requirements." The regulation of the practice of
medicine in all its branches has long been
recognized as a reasonable method of
protecting the health and safety of the public.
The power to regulate and control the practice
of medicine includes the power to regulate
admission to
the ranks of those authorized to practice
medicine. Legislation and administrative
regulations requiring those who wish to
practice medicine first to take and pass
medical board examinations have long ago
been recognized as valid exercises of
governmental power. Similarly, the
establishment of minimum medical educational
requirements for admission to the medical
profession, has also been sustained as a
legitimate exercise of the regulatory authority
of the state.