Ichong vs Hernandez

FACTS: The Legislature passed R.A. 1180 (An Act to Regulate the Retail Business). Its purpose was to prevent persons who are not citizens of the Phil. from having a stranglehold upon the peoples economic life.

a prohibition against aliens and against associations, partnerships, or corporations the capital of which are not wholly owned by Filipinos, from engaging directly or indirectly in the retail trade aliens actually engaged in the retail business on May 15, 1954 are allowed to continue their business, unless their licenses are forfeited in accordance with law, until their death or voluntary retirement. In case of juridical persons, ten years after the approval of the Act or until the expiration of term. Citizens and juridical entities of the United States were exempted from this Act. provision for the forfeiture of licenses to engage in the retail business for violation of the laws on nationalization, economic control weights and measures and labor and other laws relating to trade, commerce and industry. provision against the establishment or opening by aliens actually engaged in the retail business of additional stores or branches of retail business Lao Ichong, in his own behalf and behalf of other alien residents, corporations and partnerships affected by the Act, filed an action to declare it unconstitutional for the ff: reasons:

1. it denies to alien residents the equal protection of the laws and deprives them of their liberty and property without due process 2. the subject of the Act is not expressed in the title 3. the Act violates international and treaty obligations 4. the provisions of the Act against the transmission by aliens of their retail business thru hereditary succession ISSUE: WON the Act deprives the aliens of the equal protection of the laws. HELD: The law is a valid exercise of police power and it does not deny the aliens the equal protection of the laws. There are real and actual, positive and fundamental differences between an alien and a citizen, which fully justify the legislative classification adopted. RATIO: The equal protection clause does not demand absolute equality among residents. It merely requires that all persons shall be treated alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced. The classification is actual, real and reasonable, and all persons of one class are treated alike. The difference in status between citizens and aliens constitutes a basis for reasonable classification in the exercise of police power. Official statistics point out to the ever-increasing dominance and control by alien of the retail trade. It is this domination and control that is the legislatures target in the enactment of the Act. The mere fact of alienage is the root cause of the distinction between the alien and the national as a trader. The alien is naturally lacking in that spirit of loyalty and enthusiasm for the Phil. where he temporarily stays and makes his living. The alien owes no allegiance or loyalty to the State, and the State cannot rely on him/her in times of crisis or emergency. While the citizen holds his life, his person and his property subject to the needs of the country, the

alien may become the potential enemy of the State. The alien retailer has shown such utter disregard for his customers and the people on whom he makes his profit. Through the illegitimate use of pernicious designs and practices, the alien now enjoys a monopolistic control on the nations economy endangering the national security in times of crisis and emergency.

Lim vs. Pacquing [G.R. No. 115044. January 27, 1995] 16AUG Ponente: PADILLA, J. FACTS: The Charter of the City of Manila was enacted by Congress on 18 June 1949 (R.A. No. 409). On 1 January 1951, Executive Order No. 392 was issued transferring the authority to regulate jai-alais from local government to the Games and Amusements Board (GAB). On 07 September 1971, however, the Municipal Board of Manila nonetheless passed Ordinance No. 7065 entitled An Ordinance Authorizing the Mayor To Allow And Permit The Associated Development Corporation To Establish, Maintain And Operate A Jai-Alai In The City Of Manila, Under Certain Terms And Conditions And For Other Purposes. On 20 August 1975, Presidential Decree No. 771 was issued by then President Marcos. The decree, entitled Revoking All Powers and Authority of Local Government(s) To Grant Franchise, License or Permit And Regulate Wagers Or Betting By The Public On Horse And Dog Races, Jai-Alai Or Basque Pelota, And Other Forms Of Gambling, in Section 3 thereof, expressly revoked all existing franchises and permits issued by local governments.

In May 1988, Associated Development Corporation (ADC) tried to operate a Jai-Alai. The government through Games and Amusement Board intervened and invoked Presidential Decree No. 771 which expressly revoked all existing franchises and permits to operate all forms of gambling facilities (including Jai-Alai) by local governments. ADC assails the constitutionality of P.D. No. 771. ISSUE: Whether or not P.D. No. 771 is violative of the equal protection and non-impairment clauses of the Constitution. HELD: NO. P.D. No. 771 is valid and constitutional. RATIO: Presumption against unconstitutionality. There is nothing on record to show or even suggest that PD No. 771 has been repealed, altered or amended by any subsequent law or presidential issuance (when the executive still exercised legislative powers). Neither can it be tenably stated that the issue of the continued existence of ADCs franchise by reason of the unconstitutionality of PD No. 771 was settled in G.R. No. 115044, for the decision of the Courts First Division in said case, aside from not being final, cannot have the effect of nullifying PD No. 771 as unconstitutional, since only the Court En Banc has that power under Article VIII, Section 4(2) of the Constitution. And on the question of whether or not the government is estopped from contesting ADCs possession of a valid franchise, the well-settled rule is that the State cannot be put in estoppel by the mistakes or errors, if any, of its officials or agents. (Republic v. Intermediate Appellate Court, 209 SCRA 90)

THURSDAY, OCTOBER 18, 2007

Miners Association of the Philippines v. Factoran, Case Digest

G.R. No. 98332 January 16, 1995

Facts :

Former President Corazon Aquino issued Executive Order Nos 211 and 279 in the exercise of her legislative powers. EO No. 211 prescribes the interim procedures in the processing and approval of applications for the exploration, development and utilization of minerals pursuant to Section 2, Article XII of the 1987 Constitution. EO No. 279 authorizes the DENR Secretary to negotiate and conclude jointventure, co-production, or production- sharing agreements for the exploration, development, and utilization of mineral resources.

The issuance and the impeding implementation by the DENR of Administrative Order Nos. 57 which declares that all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitutionshall be converted into production-sharing agreements within one (1) year from the effectivity of these guidelines. and Administrative Order No. 82 which provides that a failure to submit Letter of Intent and Mineral Production-Sharing Agreement within 2 years from the effectivity of the Department Administrative Order No. 57 shall cause the abandonment of the mining, quarry, and sand and gravel claims, after their respective effectivity dates compelled the Miners Association of the Philippines, Inc., an organization composed of mining prospectors and claim owners and claim holders, to file the instant petition assailing their validity and constitutionality before this Court.

Issue : Are the two Department Administrative Orders valid?

Ruling :

Yes. Petitioner's insistence on the application of Presidential Decree No. 463, as amended, as the governing law on the acceptance and approval of declarations of location and all other kinds of applications for the exploration, development, and utilization of mineral resources pursuant to Executive Order No. 211, is erroneous. Presidential Decree No. 463, as amended, pertains to the old system of exploration, development and utilization of natural resources through "license, concession or lease"

which, however, has been disallowed by Article XII, Section 2 of the 1987 Constitution. By virtue of the said constitutional mandate and its implementing law, Executive Order No. 279 which superseded Executive Order No. 211, the provisions dealing on "license, concession or lease" of mineral resources under Presidential Decree No. 463, as amended, and other existing mining laws are deemed repealed and, therefore, ceased to operate as the governing law. In other words, in all other areas of administration and management of mineral lands, the provisions of Presidential Decree No. 463, as amended, and other existing mining laws, still govern. Section 7 of Executive Order No. 279 provides, thus: Sec. 7. All provisions of Presidential Decree No. 463, as amended, other existing mining laws, and their implementing rules and regulations, or parts thereof, which are not inconsistent with the provisions of this Executive Order, shall continue in force and effect.

Well -settled is the rule, however, that regardless of the reservation clause, mining leases or agreements granted by the State, such as those granted pursuant to Executive Order No. 211 referred to this petition, are subject to alterations through a reasonable exercise of the police power of the State. Accordingly, the State, in the exercise of its police power in this regard, may not be precluded by the constitutional restriction on non-impairment of contract from altering, modifying and amending the mining leases or agreements granted under Presidential Decree No. 463, as amended, pursuant to Executive Order No. 211. Police Power, being co-extensive with the necessities of the case and the demands of public interest; extends to all the vital public needs. The passage of Executive Order No. 279 which superseded Executive Order No. 211 provided legal basis for the DENR Secretary to carry into effect the mandate of Article XII, Section 2 of the 1987 Constitution.

WHEREFORE, the petition is DISMISSED for lack of merit

ECS v San DiegoFACTS:Roberto Rey San Diego, the private respondent is a graduate of the University of the East with a degree of Bachelor of Science in Zoology. The petitioner claims that he took the NMAT three times and flunked itas many times.ISSUE:Petition whether the private respondent who has thrice failed the National Medical Admission Test(NMAT) is entitled to take it again as it is a requirement for admission to any Medical School in thePhilippines. He invoked of his constitutional rights to academic freedom and quality education, squarelychallenging the constitutionality of MECS Order No. 12, Series of 1972.HELD:The private respondent cannot take the NMAT again and pursue his medical profession because of thefollowing grounds:1.For the purpose of gauging at least initially by the admission test and by the three-flunk rule, astudent shall not be allowed to take the NMAT again after three successive failures. 2. The State ensures that medical profession is not permeated by incompetents to whom patientsmay unwarily hand over their lives and health. 3. It is not enough to simply invoke the right to quality education as a guarantee of the Constitution,while one has the right to aspire to be a doctor, he does not have the constitutional right to be adoctor; one must show that he is entitled to it because of his preparation and promise.4.The conflict that the challenged rule violates the equal protection clause is not well-taken.Conformable to Article III, Section 1 of the Constitution, a law does not have to operate withequal force on all person or things.

Rissa M. Mira - Case Digest DECS vs. San Diego G.R. No. 89572 December 21, 1989 Facts: Respondent San Diego has flunked the NMAT (National Medical Admission Test) three times. When he applied to take again, petitioner rejected his application based on the three-flunkrule. He then filed a petition before the RTC on the ground of due process and equal protection and challenging the constitutionality of the order. The petition was granted by the RTC therefore this petition. Issue: Whether or not the NMAT three-flunk-rule order is valid and constitutional. Ruling: Yes. It is the right and responsibility of the State to insure that the medical profession is not infiltrated by incompetents to whom patients may unwarily entrust their lives and health. The method employed by the challenged regulation is not irrelevant to the purpose of the law nor is it arbitrary or oppressive. The right to quality education is not absolute. The Constitution provides that every citizen has the right to choose a profession or course of study, subject to fair, reasonable and equitable admission and academic requirements. It is not enough to simply invoke the right to quality education as a guarantee of the Constitution but one must show that he is entitled to it because of his preparation and promise. Petition was granted and the RTC ruling was reversed.

TELECOMMUNICATIONS AND BROADCAST ATTORNEYS OF THE PHILS. VS. COMELEC [289 SCRA 337; G.R. NO. 132922; 21 APR 1998]
Monday, February 02, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law

Facts:

Petitioner

Telecommunications

and

Broadcast

Attorneys

of

the Philippines, Inc. (TELEBAP) is an organization of lawyers of radio and television broadcasting companies. It was declared to be without legal standing to sue in this case as, among other reasons, it was not able to show that it was to suffer from actual or threatened injury as a result of the subject law. Petitioner GMA Network, on the other hand, had the requisite standing to bring the constitutional challenge. Petitioner operates radio and television broadcast stations in thePhilippines affected by the enforcement of Section 92, B.P. No. 881.

Petitioners challenge the validity of Section 92, B.P. No. 881 which provides: Comelec Time- The Commission shall procure radio and television time to be known as the Comelec Time which shall be allocated equally and impartially among the candidates within the area of coverage of all radio and television stations. For this purpose, the franchise of all radio broadcasting and television stations are hereby amended so as to provide radio or television time, free of charge, during the period of campaign.

Petitioner contends that while Section 90 of the same law requires COMELEC to procure print space in newspapers and magazines with payment, Section 92 provides that air time shall be procured by COMELEC free of charge. Thus it contends that Section 92 singles out radio and television stations to provide free air time. Petitioner claims that it suffered losses running to several million pesos in providing COMELEC Time in connection with the 1992 presidential election and 1995 senatorial election and that it stands to suffer even more should it be required

to do so again this year. Petitioners claim that the primary source of revenue of the radio and television stations is the sale of air time to advertisers and to require these stations to provide free air time is to authorize unjust taking ofprivate property. According to petitioners, in 1992 it lost P22,498,560.00 in providing free air time for one hour each day and, in this years elections, it stands to lost P58,980,850.00 in view of COMELECs requirement that it provide at least 30 minutes of prime time daily for such.

Issues:
(1) Whether of not Section 92 of B.P. No. 881 denies radio and television broadcast companies the equal protection of the laws.

(2) Whether or not Section 92 of B.P. No. 881 constitutes taking of property without due process of law and without just compensation.

Held: Petitioners

argument is without merit. All broadcasting, whether radio or

by television stations, is licensed by the government.Airwave frequencies have to be allocated as there are more individuals who want to broadcast that there are frequencies to assign. Radio and television broadcasting companies, which are given franchises, do not own the airwaves and frequencies through which they transmit broadcast signals and images. They are merely given the temporary privilege to use them. Thus, such exercise of the privilege may reasonably be burdened with the performance by the grantee of some form of public service. In granting the privilege to operate broadcast stations and supervising radio and television stations, the state spends considerable public funds in licensing and supervising them.

The argument that the subject law singles out radio and television stations to provide free air time as against newspapers and magazines which require payment of just compensation for the print space they may provide is likewise without merit.

Regulation of the broadcast industry requires spending of public funds which it does not do in the case of print media. To require the broadcast industry to provide free air time for COMELEC is a fair exchange for what the industry gets.

As radio and television broadcast stations do not own the airwaves, noprivate property is taken by the requirement that they provide air time to the COMELEC.

PHILIPPINE PRESS INSTITUTE, INC., for and in behalf of 139 members, represented by itsPresident, Amado P. Macasaet and its Executive Director Ermin F. Garcia, Jr., petitioner vs.COMMISSION ON ELECTIONS, respondent G.R. No. L-119694 May 22, 1995 Facts: Respondent Comelec promulgated Resolution No. 2772 directing newspapers to provide free Comelecspace of not less than one-half page for the common use of political parties and candidates. The Comelecspace shall be allocated by the Commission, free of charge, among all candidates to enable them to makeknown their qualifications, their stand on public Issue and their platforms of government. The Comelecspace shall also be used by the Commission for dissemination of vital election information.Petitioner Philippine Press Institute, Inc. (PPI), a non-profit organization of newspaper and magazine publishers, asks the Supreme Court to declare Comelec Resolution No. 2772 unconstitutional and void onthe ground that it violates the prohibition imposed by the Constitution upon the government against thetaking of private property for public use without just compensation. On behalf of the respondent Comelec,the Solicitor General claimed that the Resolution is a permissible exercise of the power of supervision(police power) of the Comelec over the information operations of print media enterprises during theelection period to safeguard and ensure a fair, impartial and credible election. Issue: Whether or not Comelec Resolution No. 2772 is unconstitutional. Held: The Supreme Court declared the Resolution as unconstitutional. It held that to compel print mediacompanies to donate Comelec space amounts to taking of private personal property without paymentof the just compensation required in expropriation cases. Moreover, the element of necessity for thetaking has not been established by respondent Comelec, considering that the newspapers were notunwilling to sell advertising space. The taking of private property for public use is authorized by theconstitution, but not without payment of just compensation. Also Resolution No. 2772 does not constitutea valid exercise of the police power of the state. In the case at bench, there is no showing of existence of anational emergency to take private property of newspaper or magazine publishers

City Government of QC vs Judge Ericta & Himlayang Pilipino

on November 23, 2010
about this ad

Police Power Not Validly Exercised

Quezon City enacted an ordinance entitled ORDINANCE REGULATING THE ESTABLISHMENT,

MAINTENANCE AND OPERATION OF PRIVATE MEMORIAL TYPE CEMETERY OR BURIAL GROUND WITHIN THE JURISDICTION OF QUEZON CITY AND PROVIDING PENALTIES FOR THE VIOLATION THEREOF. The law basically provides that at least six (6) percent of the total area of the memorial park cemetery shall be set aside for charity burial of deceased persons who are paupers and have been residents of Quezon City for at least 5 years prior to their death, to be determined by competent City Authorities. QC justified the law by invoking police power. ISSUE: Whether or not the ordinance is valid. HELD: The SC held the law as an invalid exercise of police power. There is no reasonable relation between the setting aside of at least six (6) percent of the total area of all private cemeteries for charity burial grounds of deceased paupers and the promotion of health, morals, good order, safety, or the general welfare of the people. The ordinance is actually a taking without compensation of a certain area from a private cemetery to benefit paupers who are charges of the municipal corporation. Instead of building or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries.

NATIONAL POWER CORP. VS. GUTIERREZ [193 SCRA 1; G.R. No. 60077; 18 Jan 1991]
Saturday, January 31, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law

Facts: Petitioner

filed an action to acquire a right of way over the land of

Respondents for the construction of transmission lines. Petitioner was adjudged to pay the full market value of land traversed by the transmission lines. Petitioner argued that it was only asking for a right of way.

Issue: Whether
and such

or Not the acquisition of the right of way constitutes "taking" case will be entitled just compensation.

the

Held: The

acquisition of the right of way constitutes taking. It perpetually

deprives Respondents of their proprietary rights. No planthigher than three meters is allowed below the transmission lines. Because of high tension current conveyed through the transmission lines, danger to life and limbs cannot be discounted. The owner of the property is entitled to just compensation.

American Bible Society vs. City of Manila

American Bible Society vs. City of Manila GR No. L-9637 | April 30, 1957

Facts: American Bible Society is a foreign, non-stock, non-profit, religious, missionary corporation duly registered and doing business in the Philippines through its Philippine agency established in Manila in November, 1898 City of Manila is a municipal corporation with powers that are to be exercised in conformity with the provisions of Republic Act No. 409, known as the Revised Charter of the City of Manila American Bible Society has been distributing and selling bibles and/or gospel portions throughout the Philippines and translating the same into several Philippine dialect City Treasurer of Manila informed American Bible Society that it was violating several Ordinances for operating without the necessary permit and license, thereby requiring the corporation to secure the permit and license fees covering the period from 4Q 1945-2Q 1953 To avoid closing of its business, American Bible Society paid the City of Manila its permit and license fees under protest American Bible filed a complaint, questioning the constitutionality and legality of the Ordinances 2529 and 3000, and prayed for a refund of the payment made to the City of Manila. They contended: They had been in the Philippines since 1899 and were not required to pay any license fee or sales tax it never made any profit from the sale of its bibles City of Manila prayed that the complaint be dismissed, reiterating the constitutionality of the Ordinances in question Trial Court dismissed the complaint American Bible Society appealed to the Court of Appeals

a. b.

Issue: WON American Bible Society liable to pay sales tax for the distribution and sale of bibles

Ruling: NO

Under Sec. 1 of Ordinance 3000, one of the ordinance in question, person or entity engaged in any of the business, trades or occupation enumerated under Sec. 3 must obtain a Mayors permit and license from the City Treasurer. American Bible Societys business is not among those enumerated However, item 79 of Sec. 3 of the Ordinance provides that all other businesses, trade or occupation not mentioned, except those upon which the City is not empowered to license or to tax P5.00 Therefore, the necessity of the permit is made to depend upon the power of the City to license or tax said business, trade or occupation. 2 provisions of law that may have bearing on this case: Chapter 60 of the Revised Administrative Code, the Municipal Board of the City of Manila is empowered to tax and fix the license fees on retail dealers engaged in the sale of books Sec. 18(o) of RA 409: to tax and fix the license fee on dealers in general merchandise, including importers and indentors, except those dealers who may be expressly subject to the payment of some other municipal tax. Further, Dealers in general merchandise shall be classified as ( a) wholesale dealers and (b) retail dealers. For purposes of the tax on retail dealers, general merchandise shall be classified into four main classes: namely (1) luxury articles, (2) semi-luxury articles, (3) essential commodities, and (4) miscellaneous articles. A separate license shall be prescribed for each class but where commodities of different classes are sold in the same establishment, it shall not be compulsory for the owner to secure more than one license if he pays the higher or highest rate of tax prescribed by ordinance. Wholesale dealers shall pay the license tax as such, as may be provided by ordinance The only difference between the 2 provisions is the limitation as to the amount of tax or license fee that a retail dealer has to pay per annum As held in Murdock vs. Pennsylvania, The power to impose a license tax on the exercise of these freedoms provided for in the Bill of Rights, is indeed as potent as the power of censorship which this Court has repeatedly struck down. It is not a nominal fee imposed as a regulatory measure to defray the expenses of policing the activities in question. It is in no way apportioned. It is flat license tax levied and collected as a condition to the pursuit of activities whose enjoyment is guaranteed by the constitutional liberties of press and religion and inevitably tends to suppress their exercise. That is almost uniformly recognized as the inherent vice and evil of this flat license tax. Further, the case also mentioned that the power to tax the exercise of a privilege is the power to control or suppress its enjoyment. Those who can tax the exercise of this religious practice can make its exercise so costly as to deprive it of the resources necessary for its maintenance. Those who can tax the privilege of engaging in this form of missionary evangelism can close all its doors to all those who do not have a full purse Under Sec. 27(e) of Commonwealth Act No. 466 or the National Internal Revenue Code,Corporations or associations organized and operated exclusively for religious, charitable, . . . or educational purposes, . . .: Provided, however, That the income of whatever kind and character from any of its properties, real or personal, or from any activity conducted for profit, regardless of the disposition made of such income, shall be liable to the tax imposed under this Code shall not be taxed

a.

b.

The price asked for the bibles and other religious pamphlets was in some instances a little bit higher than the actual cost of the same but this cannot mean that American Bible Society was engaged in the business or occupation of selling said "merchandise" for profit Therefore, the Ordinance cannot be applied for in doing so it would impair American Bible Societys free exercise and enjoyment of its religious profession and worship as well as its rights of dissemination of religious beliefs.

Wherefore, and on the strength of the foregoing considerations, We hereby reverse the decision appealed from, sentencing defendant return to plaintiff the sum of P5,891.45 unduly collected from it

American Bible Society Vs. City Of Manila Case Digest

American Bible Society Vs. City Of Manila 101Phil 386 G.R. No. 9637 April 30, 1957

Facts: New Yorks Education Law requires local public school authorities to lend textbooks free of charge to all students in grade 7 to 12, including those in private schools. The Board of Education contended that said statute was invalid and violative of the State and Federal Constitutions. An order barring the Commissioner of Education (Allen) from removing appellants members from office for failure to comply with the requirement and an order preventing the use of state funds for the purchase of textbooks to be lent to parochial schools were sought for. The trial court held the statute unconstitutional. The Appellate Division reversed the decision and dismissed the complaint since the appellant have no standing. The New York Court of Appeals, ruled that the appellants have standing but the law is not unconstitutional.

Issue: Whether or Not the said ordinances are constitutional and valid (contention: it restrains the free exercise and enjoyment of the religious profession and worship of appellant).

Held: Section 1, subsection (7) of Article III of the Constitution, provides that: (7) No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof, and the free exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever be allowed. No religion test shall be required for the exercise of civil or political rights.

The provision aforequoted is a constitutional guaranty of the free exercise and enjoyment of religious profession and worship, which carries with it the right to disseminate religious information.

It may be true that in the case at bar the price asked for the bibles and other religious pamphlets was in some instances a little bit higher than the actual cost of the same but this cannot mean that appellant was engaged in the business or occupation of selling said "merchandise" for profit. For this reason. The Court believe that the provisions of City of Manila Ordinance No. 2529, as amended, cannot be applied to appellant, for in doing so it would impair its free exercise and enjoyment of its religious profession and worship as well as its rights of dissemination of religious beliefs.

With respect to Ordinance No. 3000, as amended, the Court do not find that it imposes any charge upon the enjoyment of a right granted by the Constitution, nor tax the exercise of religious practices.

It seems clear, therefore, that Ordinance No. 3000 cannot be considered unconstitutional, however inapplicable to said business, trade or occupation of the plaintiff. As to Ordinance No. 2529 of the City of Manila, as amended, is also not applicable, so defendant is powerless to license or tax the business of plaintiff Society.

WHEREFORE, defendant shall return to plaintiff the sum of P5,891.45 unduly collected from it

Gregorio Aglipay vs Juan Ruiz

on November 16, 2011
about this ad

Political Law Appropriation Religious Sect

The 33rd International Eucharistic Congress organized by the Roman Catholic Church took place sometime in 1936. In commemoration of it, Ruiz, Director of Posts initiated the production of stamps which would have in their center a chalice, with grape and stalks of wheat as border design. Eventually, the stamps were produced and some were sold pursuant to Act No. 4052, which provides for appropriation. Aglipay then appealed for the prohibition of the sale of such stamps. Aglipay contends that the selling of stamps commemorative to a particular religious event is in violation of Sec 13, Art 6 of the Philippine Constitution which prohibits the appropriation or usage of public money for the use or benefit of any church or denomination among others. ISSUE: Is the sale of the stamps in support of a particular sect hence unconstitutional? HELD: The sale of stamps is not in violation of the Constitution. In fact, what was emphasized on the stamps was not the religious event itself but rather the City of Manila as being the seat of such event. Act No. 4052 on the other hand did not appropriate any public money to a religious event. It merely said that the director of posts may use such fund in a manner as often as may be deemed advantageous to the government. Act 4052 appropriated the sum of P60,000.00 for the cost of plates and printing of postage stamps with new designs and other expenses incident thereto, and authorizes the Director of Posts, with the approval of the Secretary of Public Works and Communications, to dispose of the amount appropriated in the manner indicated and as often as may be deemed advantageous to the Government. The fact that the fund is being used for such is only incidental to the function of Director of Posts and under his discretion

Commissioner vs. Algue, Inc.

COMMISSIONER GR No. L-28896, February 17, 1988 158 SCRA 9 v. ALGUE, INC.

FACTS: Private respondent corporation Algue Inc. filed its income tax returns for 1958 and 1959showing deductions, for promotional fees paid, from their gross income, thus lowering their taxable income. The BIR assessed Algue based on such deductions contending that the claimed deduction is disallowed because it was not an ordinary, reasonable and necessary expense.

ISSUE: Should an uncommon business expense be disallowed as a proper deduction in computation of income taxes, corollary to the doctrine that taxes are the lifeblood of the government?

HELD: No. Private respondent 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 xperimental enterprise and involve themselves in a new business requiring millions of pesos. This was no mean feat and should be, as it was, sufficiently recompensed. It is well-settled that taxes are the lifeblood of the government and so should be collected without unnecessary hindrance On the other hand, such collection should be made in accordance with law as any arbitrariness will negate the very reason for government itself. It is therefore necessary to reconcile the apparently conflicting interests of the authorities and the taxpayers so that the real purpose of taxation, which is the promotion of the common good, may be achieved. But even as we concede the inevitability and indispensability of taxation, it is a requirement in all democratic regimes that it 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. For all the awesome power of the tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate, as it has here, that the law has not been observed.

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