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G.R. No.

L-28329 August 17, 1975

ESSO STANDARD EASTERN, INC., Fo!"#!$%& St'()'!)-*'+uu" R#,-(-(g Co!..
/0-$.1, respondent.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Antonio A.
Torres and Solicitor Antonio M. Martinez for petitioner.
Carlos J. Valdez & Associates for respondent.

Appeal from the decision of the Court of Tax Appeals reversing the Commissioner of
Customs' decision holding respondent ESSO Standard Eastern, Inc., (formerl the Standard!
"acuum #efining Corporation ($hil.% and hereinafter referred to as ESSO% lia&le in the total
sum of $''(.)* as special import tax on certain articles imported & the latter under #epu&lic
Act +o. ,-', other.ise /no.n as the $etroleum Act of 0121.
#espondent ESSO is the holder of #efining Concession +o. *, issued & the Secretar of
Agriculture and +atural #esources on 3ecem&er 1, 01(', and operates a petroleum refining
plant in 4ima 5ataan. 6nder Article 07, of #epu&lic Act +o. ,-' .hich provides8 93uring
the five ears the granting of an concession, the concessionaire ma import free of
customs dut, all e:uipment, machiner, material, instruments, supplies and accessories,9
respondent imported and .as assessed the special import tax (.hich it paid under protest% on
the separate importations8
0% One carton, scientific instruments .ith C ; < value of assessed a special
import tax in the amount of $,0.1- (Airport $rotest +o. 07%=
*% One carton of recorder parts .ith C ; < value of >**0.()= assessed
special import tax in the amount of $2,.-* (Airport $rotest +o. 00%=
,% One carton of valves .ith C ; < value of >,07.(-= assessed special
import tax in the amount of $)7.'* (Airport $rotest +o. 0*%=
2% One &ox of parts for Conversion &oilers and Auxiliar E:uipment .ith C
; < value of >*,,-1.)1= assessed special import tax in the amount of
$2)'.77 (Airport $rotest +o. 0(%=
(% One carton of ?!ra films .ith C ; < value of >0,*.-7= assessed special
import tax in the amount of $*).77 (Airport $rotest +o. 0)%= and
)% One carton of recorder parts .ith C ; < value of >'(7.,1= assessed
special import tax in the amount of $02'.77 (Airport $rotest +o. 0'%.
The Collector of Customs on <e&ruar 0), 01)*, held that respondent ESSO .as su&@ect to
the pament of the special import tax provided in #epu&lic Act +o. 0,12, as amended &
#.A. +o. *,(*, and dismissed the protest.
On Aarch 0, 01)*, respondent appealed the ruling of the Collector of Customs to the
Commissioner of Customs .ho, on Aarch 01, 01)(, affirmed the decision of said Collector of
On Bul *, 01)(, respondent ESSO filed a petition .ith the Court of Tax Appeals for revie.
of the decision of the Commissioner of Customs.
The Court of Tax Appeals, on Septem&er ,7, 01)', reversed the decision of herein petitioner
Commissioner of Customs and ordered refund of the amount of $''(.)* to respondent ESSO
.hich the latter had paid under protest.
This decision of the Court of Tax Appeals is no. &efore this Court for revie..
$etitioner contends that the special import tax under #epu&lic Act +o. 0,12 is separate and
distinct from the customs dut prescri&ed & the Tariff and Customs Code, and that the
exemption en@oed & respondent ESSO from the pament of customs duties under the
$etroleum net of 0121 does not include exemption from the pament of the special import tax
provided in #.A. +o. 0,12.
<or its stand petitioner puts for.ard this rationale8
A perusal of the provisions of #.A. +o. 0,12 .ill sho. that the legislature
considered the special import tax as a tax distinct from customs duties as
.itness the fact that Section *(a% of the said la. made separate mention of
customs duties and special import tax .hen it provided that ... if as a result
of the application of the schedule therein, the total revenue derived from the
customs duties and from the special import tax on goods, ... imported from
the 6nited States is less in an calendar ear than the proceeds from the
exchange tax imposed under #epu&lic Act +um&ered Six Cundred and
One, as amended, on such goods, articles or products during the calendar
ear 01((, the $resident ma, & proclamation, suspend the reduction of the
special import tax for the next succeeding calendar ear ....
If it .ere the intention of Congress to exempt the holders of petroleum
refiner concessions li/e the protestant (respondent herein%, such exemption
should have &een clearl stated in the statute. Exemptions are never
presumed. The must &e expressed in the clearest and most unam&iguous
language and not left to mere implication.
Specificall, petitioner in his &rief su&mitted t.o assignment of errors allegedl committed &
the Court of Tax Appeals in the controverted decision, to .it8
1st assin!ent of error"
TE#A 9C6STOAS 36TE9 I+ A#TIC4E 07, O< #E$654IC ACT +O.
#E$654IC ACT +O. 0,12=
#nd assin!ent of error"
#E$654IC ACT +O. ,-' I+C463ES E?EA$TIO+ <#OA $AEAE+T
On the other hand, the Court of Tax Appeals rationaliFed the ground for its ruling thus8
If .e are to adhere, as .e should, to the plain and o&vious meaning of
.ords in consonance .ith settled rules of interpretation, it seems clear that
the special import tax is an impost or a charge on the importation or
&ringing into the $hilippines of all goods, articles or products su&@ect
thereto, for the phrase 9import tax on all goods, articles or products
imported or &rought into the $hilippines9 in explicit and unam&iguous terms
simpl means customs duties. It is hardl necessar to add that 9customs
duties9 are simpl taxes assessed on merchandise imported from, or
exported to a foreign countr.
And &eing a charge upon importation, the special import tax is essentiall a
customs dut, or at least parta/es of the character thereof.
Citing num&erous American decisions and definitions of terms 9customs duties,9 9duties,9
9imposts,9 9levies,9 9tax,9 and 9tolls,9 and their distinctions, including some pronouncements
of this Court on the su&@ect, the Court of Tax Appeals in its decision, .ent to great lengths to
sho. that the term 9special import tax9 as used in #.A. +o. 0,12 includes customs duties. It
sees the special import tax as nothing &ut an impost or a charge on the importation or &ringing
into the $hilippines of goods, articles or products.
To clinch its theor the Court of Tax Appeals cited the similarit in the &asis of computation
of the customs dut as .ell as the similarit in the phraseolog of Section , of #epu&lic Act
+o. 0,12 (.hich esta&lished the special import tax% and Section 1!70 of the Tariff ; Customs
code (the &asic la. providing for and regulating the imposition of customs duties and imposts
on importations%.
<or its part, private respondent, ESSO, in its to the petition, leaned heavil on the
same arguments as those given & the Tax Court, the &urden of .hich is that the special
import tax la. is a customs la.. 9
It is clear that the onl issue involved in this case is .hether or not the exemption en@oed &
herein private respondent ESSO Standard Eastern, Inc. from customs duties granted &
#epu&lic Act +o. ,-', or the $etroleum Act of 0121, should em&race or include the special
import tax imposed & #.A. +o. 0,12, or the Special Import Tax 4a..
Ge have examined the records of this case thoroughl and carefull considered the arguments
presented & &oth parties and Ge are convinced that the onl thing left to this Court to do is
to determine the intention of the legislature through interpretation of the t.o statutes
involved, i.e., #epu&lic Act +o. 0,12 and #epu&lic Act +o. ,-'.
It is a .ell accepted principle that .here a statute is am&iguous, as #epu&lic Act +o. 0,12
appears to &e, courts ma examine &oth the printed pages of the pu&lished Act as .ell as
those extrinsic matters that ma aid in construing the meaning of the statute, such as the
histor of its enactment, the reasons for the passage of the &ill and purposes to &e
accomplished & the measure.
$etitioner in the first assignment of error too/ exception to the finding of the Court of Tax
Appeals that 9The language of #epu&lic Act +o. 0,12 seems to leave no room for dou&t that
the la. intends that the phrase 'Special import tax' is ta/en to include customs duties9 and
countered .ith the argument that 9An examination of the provisions of #epu&lic Act +o.
0,12 .ill indu&ita&l reveal that Congress considered the special import tax as a tax different
from customs duties, as ma &e seen from the fact that Section *(a% of said la. made separate
mention of customs duties and special import tax ...9 Thus8
... if as a result of the application of the schedule therein the total revenue
derived from the customs duties and from the special import tax on
goods, ... imported from the 6nited States is less in an calendar ear than
the proceeds from the exchange tax imposed under #epu&lic Act +um&ered
Six Cundred and One, as amended, on such goods, articles or products
during the calendar ear 01((, the $resident ma, & proclamation, suspend
the reduction of the special import tax for the next succeeding calendar ear
$etitioner further argues8
Customs duties are prescri&ed & the Tariff and Customs Code, .hile the
special import tax is provided for & #epu&lic Act +o. 0,12. If our
legislature had intended to classif the special import tax as customs dut,
the said Art .ould not have expressl exempted from pament of the
special Import tax importations of machiner, e:uipment, accessories, and
spare parts for use of industries, .ithout distinguishing .hether the
industries referred to are the industries exempt from the pament of
Customs duties or the non!exempt ones (Sec. )%. It is sufficient that the
imported machiner, etc., is for the use of an industr.
A stud of petitioner's t.o assignments of errors sho.s that one is anchored on practicall the
same ground as the other8 &oth involve the interpretation of #.A. +o. ,-' (The $etroleum Act
of 0121% in relation .ith #.A. +o. 0,12 (The Special Import Tax 4a.%.
Ghile the petitioner harps on particular clauses and phrases found in the t.o cited la.s,
.hich in a .a .as li/e.ise resorted to & the respondent ESSO, it .ould do 6s .ell to
restate the fundamental rule in the construction of a statute.
In order to determine the true intent of the legislature, the particular clauses and phrases of the
statute should not &e ta/en as detached and isolated expressions, &ut the .hole and ever part
thereof must &e considered in fixing the meaning of an of its parts. In fact ever statute
should receive such construction as .ill ma/e it harmoniFe .ith the pre!existing &od of
la.s. Antagonism &et.een the Act to &e interpreted and existing or previous la.s is to &e
avoided, unless it .as clearl the intention of the legislature that such antagonism should arise
and one amends or repeals the other, either expressl or & implication.
Another rule applied & this Court is that the courts ma ta/e @udicial notice of the origin and
histor of the statutes .hich the are called upon to construe and administer, and of facts
.hich affect their derivation, validit and operation.
Appling the a&ove stated rules and principles, let us consider the histor, the purpose and
o&@ectives of #epu&lic Act +o. ,-' as it relates to #epu&lic Act +o. 0,12 and other la.s
passed & the Congress of the $hilippines insofar as the relate to each other.
#epu&lic Act +o. ,-', the $etroleum Act of 0121, has this for its title, to .it8
A$$#O$#IATE <6+3S TCE#E<O#E= A+3 <O# OTCE# $6#$OSES.
Art. 07, of said Act reads8
A#T. 07,. C$sto!s d$ties. I 3uring the five ears the granting
of an concessions, the concessionaire ma import free of customs dut, all
e:uipment, machiner, material, instruments, supplies and accessories.
xxx xxx xxx
Art. 07* of the Same la. insofar as pertinent, provides8
A#T. 07*. %or& o'liations, ta(es, ro)alties not to 'e chared. I ...= nor
shall an other special taxes or levies &e applied to such concessions, nor
shall concessionaires under this Act &e su&@ected to an provincial,
municipal, or other local taxes or levies= nor shall an sales tax &e charged
on an petroleum produced from the concession or portion thereof,
manufactured & the concessionaire and used in the .or/ing of his
concession. ....
Art. 072, still of the same Act, reads8
A#T. 072. *o e(port to 'e i!posed. I +o export tax shall &e levied upon
petroleum produced from concessions granted under this Act.
The title of #epu&lic Act +o. ,-' and the provisions of its three articles @ust cited give a clue
to the intent of the $hilippine legislature, .hich is to encourage the exploitation and
development of the petroleum resources of the countr. Through the instrumentalit of said
la., it declared in no uncertain terms that the intensification of the exploration for petroleum
must &e carried on unflinchingl even if, for the time &eing, no taxes, &oth national and local,
ma &e collected from the industr. This is the une:uivocal intention of the $hilippine
Congress .hen the language of the $etroleum Act is examined. 6ntil this la. or an
su&stantial portion thereof is clearl amended or repealed & su&se:uent statutes, the intention
of the legislature must &e upheld.
Against this unam&iguous language of #.A. +o. ,-', there is the su&se:uent legislation, #.A.
+o. 0,12, the Special Import Tax 4a., .hich, according to the herein petitioner, sho.s that
the legislature considered the special import tax as a tax distinct from customs duties.
#epu&lic Act +o. 0,12, other.ise /no.n as the Special Import Tax 4a., is entitled as
$CI4I$$I+ES, A+3 TO #E$EA4 #E$654IC ACTS +6A5E#E3 SI?
C6+3#E3 A+3 O+E, EIDCT C6+3#E3 A+3 <O6#TEE+, EIDCT
C6+3#E3 A+3 SE"E+TE!O+E, E4E"E+ C6+3#E3 A+3
SE"E+TE!<I"E. E4E"E+ C6+3#E3 A+3 +I+ETE!SE"E+ A+3
TCI#TEE+ C6+3#E3 A+3 SE"E+TE <I"E.
The title indicates unmista/a&l that it is repealing six prior statutes. As .ill &e seen later, all
these la.s dealt .ith the imposition of a special excise tax on foreign exchange or other form
of lev on importation of goods into the countr.
Section I of #epu&lic Act +o. 0,12 reads as follo.s8
SECTIO+ 0. Except as herein other.ise provided, there shall &e levied,
collected and paid as special import tax on all goods, articles or products
imported or &rought into the $hilippines, irrespective of source, during the
period and in accordance .ith the rates provided for in the
xxx xxx xxx
It .ould appear that & the provision of Section 0 of this Act, the pertinent provision of the
$etroleum 4a., for .hich there appears to &e no proviso to the contrar has &een modified or
Section ) of #epu&lic Act +o. 0,12 declares that the tax provided for in its Section I shall not
&e imposed against importation into the $hilippines of machiner andJor ra. materials to &e
used & ne. and necessar industries as determined in accordance .ith # A. +o. 170 and a
long list of other goods, articles, machiner, e:uipment, accessories and others.
Ge shall no. examine the six statutes repealed & #.A. +o. 0,12, namel8
+.A. *o. ,-1 is an Act imposing a special excise tax of 0'K on foreign
exchange sold & the Central 5an/ or its agents. This is /no.n as the
Exchange Tax 4a.=
+.A. *o. .1/ amended Sections one, t.o and five and repealed Sections
three and four of #.A. +o. )70=
+.A. *o. .01 amended Sections one and t.o of #.A. +o. )70, as amended
earlier & #.A. +o. -02=
+.A. *o. 1101 amended further Sections one and t.o of #.A. +o. )70, as
+.A. *o. 1120 amended furthermore #.A. +o. )70 as amended previousl
& #.A. +o. 00'(=
+.A. *o. 1301 amended Sections one and t.o of #.A. +o. )70 as amended
& #.A. +os. 00'( and 001'.
As can &e seen from the foregoing, in one fell s.oop, #epu&lic Act +o.
0,12 repealed and revo/ed six earlier statutes .hich had something to do
.ith the imposition of special levies andJor exemption of certain
importations from the &urden of the special import taxes or levies. On the
other hand, it is apparent that #.A. +o. ,-', the $etroleum Act, had &een
spared from the pruning /nife of Congress, although this latter la. had
granted more concessions and tax exemption privileges than an of the
statutes that .ere amended, repealed or revo/ed & #.A. +o. 0,12. The must &e that the Congress of the $hilippine sa. fit to preserve the
privileges granted under the $etroleum 4a. of 0121 in order to /eep the
door open to the exploitation and development of the petroleum resources
of the countr .ith such incentives as are given under that la..
This ascertained .ill and intention of the legislature finds a parallelism in a
case &rought earlier &efore this Court.
A fishpond o.ner .as slapped .ith taxes as a 9merchant9 & the Collector of Internal
#evenue. Ce paid under protest and filed an action to recover the taxes paid, claiming that he
.as an agriculturist and not a merchant. Ghen this Court .as called upon to interpret the
provisions of the Internal #evenue 4a. on .hether fish is an agricultural product .hich falls
under the exemption provisions of said la., it in:uired into the purpose of the legislature in
esta&lishing the exemption for agricultural products. Ge held8
The first in:uir, therefore, must relate to the purpose the legislature had in
mind in esta&lishing the exemption contained in the clause no. under
consideration. It seems reasona&le to assume that it .as due to the &elief on
the part of the la.!ma/ing &od that & exempting agricultural products
from this tax the farming industr .ould &e favored and the development of
the resources of the countr encouraged. ....
Caving this in mind, particularl the manner in .hich extrinsic aids the histor of the
enactment of the statute and purpose of the legislature in emploing a clause or provision in
the la. had &een applied in determining the true intent of the &od, Ge are
convinced that #.A. +o. ,-', The $etroleum Act of 0121, .as intended to encourage the
exploitation, exploration and development of the petroleum resources of the countr & giving
it the necessar incentive in the form of tax exemptions. This is the raison d etre for the
generous grant of tax exemptions to those .ho .ould invest their financial resources to.ards
the achievement of this national economic goal.
On the contention of herein petitioner that the exemptions en@oed & respondent ESSO under
#.A. +o. ,-' have &een a&rogated & #.A. +o. 0,12, Ge hold that repeal & implication is
not favored unless it is manifest that the legislature so intended. As la.s are presumed to &e
passed .ith deli&eration and .ith full /no.ledge of all existing ones on the su&@ect, it is
logical to conclude that in passing a statute it .as not intended to interfere .ith or a&rogate
an former la. relating to the same matter, unless the repugnanc &et.een the t.o is not onl
irreconcila&le &ut also clear and convincing as a result of the language used, or unless the
latter act full em&races the su&@ect matter of the earlier.
As o&served earlier, Congress lined up for revocation & #epu&lic Act +o. 0,12 six statutes
dealing .ith the imposition of special imposts or levies or the granting of exemptions from
special import taxes. Eet, considering the tremendous amount of revenues it .as losing under
the $etroleum 4a. of 0121, it failed to include the latter statute among those it chose to &ur
& the Special Import Ta. 4a.. The reason for this is ver clear8 The legislature .anted to
continue the incentives for the continuing development of the petroleum industr.
It is not amiss to mention herein passing that contrar to the theor of the herein petitioner,
#.A. +o. ,-' had not &een repealed & #.A. +o. *,(* .hich expressl a&rogated Section ) of
#.A. +o. 0,12 &ut did not repeal an part of #.A. +o. ,-'. Therefore, the exemption granted
& #epu&lic Act +o. ,-' still stands.
GCE#E<O#E, ta/ing into consideration the .eight given & this Court to the findings and
conclusions of the Court of Tax Appeals on a matter it is .ell!e:uipped to handle, .hich
findings and conclusions Ge find no reason to overturn, the petition of the Commissioner of
Customs to reverse the decision of the Court of Tax Appeals should &e, as it is here&, denied.
+o costs.
SO O#3E#E3.
G.R. No. L-33393-92 M'% 31, 1979
MISAEL /. *ERA, 's Co""-ss-o(#! o, I(t#!('$ R#5#(u#, '() T6E FAIR TRADE
7OARD, petitioner,
6ON. SERAFIN R. CUE*AS, 's 8u)g# o, t0# Cou!t o, F-!st I(st'(+# o, M'(-$', 7!'(+0
INDUSTRIES, INC., respondents.
Solicitor General 4eli( 5. Antonio and Solicitor Bernardo P. Pardo for petitioners.
S)cip, Salazar, 6$na, Manalo & 4eliciano for pri7ate respondents.

This is a petition for certiorari .ith preliminar in@unction to revie. the decision rendered &
respondent @udge, in Civil Case +o. (**') and in Special Civil Action +o. (*,-, &oth of the
Court of <irst Instance of Aanila.
$laintiffs, in Civil Case +o. (**') private respondents herein, are engaged in the
manufacture, sale and distri&ution of filled mil/ products throughout the $hilippines. The
products of private respondent, Consolidated $hilippines Inc. are mar/eted and sold under the
&rand 3arigold .hereas those of private respondent, Deneral Ail/ Compan ($hil.%, Inc.,
under the &rand 94i&ert=9 and those of private respondent, Ail/ Industries Inc., under the
&rand 93utch 5a&.9 $rivate respondent, Institute of Evaporated <illed Ail/ Aanufacturers of
the $hilippines, is a corporation organiFed for the principal purpose of upholding and
maintaining at its highest the standards of local filled mil/ industr, of .hich all the other
private respondents are mem&ers.
Civil Case +o. (**') is an action for declarator relief .ith ex!parte petition for preliminar
in@unction .herein plaintiffs pra for an ad@udication of their respective rights and o&ligations
in relation to the enforcement of Section 0)1 of the Tax Code against their filled mil/
The controvers arose from the order of defendant, Commissioner of Internal #evenue no.
petitioner herein, re:uiring plaintiffs! private respondents to .ithdra. from the mar/et all of
their filled mil/ products .hich do not &ear the inscription re:uired & Section 0)1 of the Tax
Code .ithin fifteen (0(% das from receipt of the order .ith the explicit .arning that failure
of plaintiffs' private respondents to compl .ith said order .ill result in the institution of the
necessar action against an violation of the aforesaid order. Section 0)1 of the Tax Code
reads as follo.s8
Section 0)1. 8nscription to 'e placed on s&i!!ed !il&. 9 All condensed
s/immed mil/ and all mil/ in .hatever form, from .hich the fatt part has
&een removed totall or in part, sold or put on sale in the $hilippines shall
&e clearl and legi&l mar/ed on its immediate containers, and in all the
language in .hich such containers are mar/ed, .ith the .ords, 9This mil/
is not suita&le for nourishment for infants less than one ear of age,9 or .ith
other e:uivalent .ords.
The Court issued a .rit of preliminar in@unction dated <e&ruar 0), 01), restraining the
Commissioner of Internal #evenue from re:uiring plaintiffs' private respondents to print on
the la&els of their rifled mil/ products the .ords, 9This mil/ is not suita&le for nourishment
for infants less than one ear of age or .ords of similar import, 9 as directed & the a&ove
:uoted provision of 4a., and from ta/ing an action to enforce the a&ove legal provision
against the plaintiffs' private respondents in connection .ith their rifled mil/ products,
pending the final determination of the case, Civil Case +o. (**'), on the merits.
On Bul *(, 01)1, ho.ever, the Office of the Solicitor Deneral &rought an appeal from the
said order & .a of certiorari to the Supreme Court.
In vie. thereof, the respondent court
in the meantime suspended disposition of these cases &ut in vie. of the a&sence of an
in@unction or restraining order from the Supreme Court, it resumed action on them until their
final disposition therein.
Special Civil Action +o. (*,-,, on the other hand, is an action for prohi&ition and in@unction
.ith a petition for preliminar in@unction. $etitioners therein pra that the respondent <air
Trade 5oard desist from further proceeding .ith <T5 I.S. +o. I . entitled 9Antonio #. de Boa
vs. Institute of Evaporated Ail/ Aanufacturers of the $hilippines, etc.9 pending final
determination of Civil Case +o. (**'). The facts of this special civil action sho. that on
3ecem&er ', 01)*, Antonio #. de Boa and Sufronio Carrasco, &oth in their individual
capacities and in their capacities as $u&lic #elations Counsel and $resident of the $hilippine
Association of +utrition, respectivel, filed <T5 I.S. +o. 0 .ith <air Trade 5oard for
misleading advertisement, misla&eling andJor mis&randing. Among other things, the
complaint filed include the charge of omitting to state in their la&els an statement sufficient
to Identif their filled mil/ products as 9imitation mil/9 or as an imitation of genuine co.s
mil/. and omitting to mar/ the immediate containers of their filled mil/ products .ith the
.ords8 9This mil/ is not suita&le for nourishment for infants less than one ear of age or .ith
other e:uivalent .ords as re:uired under Section 0)1 of the Tax Code. The 5oard proceeded
to hear the complaint until it received the .rit of preliminar in@unction issued & the Court of
<irst Instance on Aarch 01, 01),.
6pon agreement of the parties, Civil Case +o. (**') and Special Civil Action +o. (*,-,
.ere heard @ointl &eing intimatel related .ith each other, .ith common facts and issues
&eing also involved therein. On April 0), 01'0, the respondent court issued its decision, the
dispositive part of .hich reads as follo.s8
Gherefore, @udgment is here& rendered8
8n Ci7il Case *o. 1##0,"
(a% $erpetuall restraining the defendant, Commissioner of Internal
#evenue, his agents, or emploees from re:uiring plaintiffs to print on the
la&els of their filled mil/ products the .ords8 9This mil/ is not suita&le for
nourishment for infants less than one ear of age9 or .ords .ith e:uivalent
import and declaring as nun and void and .ithout authorit in la., the order
of said defendant dated Septem&er *-, 01)0, Annex A of the complaint, and
the #uling of the Secretar of <inance, dated +ovem&er 0*, 01)*, Annex D
of the complaint= and
8n Special Ci7il Action *o. 1#3.3"
(&% #estraining perpetuall the respondent <air Trade 5oard, its agents or
emploees from continuing in the investigation of the complaints against
petitioners doc/eted as <T5 I.S. +o. *, or an charges related to the
manufacture or sale & the petitioners of their filled mil/ products and
declaring as null the proceedings so far underta/en & the respondent 5oard
on said complaints. (pp. *7! *0, #ollo%.
<rom the a&ove decision of the respondent court, the Commissioner of Internal #evenue and
the <air Trade 5oard @oined together to file the present petition for certiorari .ith preliminar
in@unction, assigning the errors8
I. TCE 4OGE# CO6#T E##E3 I+ #64I+D TCAT SEC. TIO+ 0)1 O<
II. TCE 4OGE# CO6#T E##E3 I+ #64I+D TCAT SECTIO+ 0)1 O<
SEC#ETA#E O< B6STICE, AS $#O"I3E3 <O# I+ #A ,'*7, +OT
<I44E3 AI4L $#O36CTS. (pp, 2!(, #ollo%.
The court did not err in ruling that Section 0)1 of the Tax Code has &een repealed &
implication. Section 0)1 .as enacted in 01,1, together .ith Section 020 (.hich imposed a
Specific tax on s/immed mil/% and Section 0'' (.hich penaliFed the sale of s/immed mil/
.ithout pament of the specific tax and .ithout the legend re:uired & Section 0)1%.
Co.ever, Section 020 .as expressl repealed & Section 0 of #epu&lic Act +o. ,22, and
Section 0'', & Section 0 of #epu&lic Act +o. 2),. 5 the express repeal of Sections 020 and
0'', Section 0)1 &ecame a merel declarator provision, .ithout a tax purpose, or a penal
Aoreover, it seems apparent that Section 0)1 of the Tax Code does not appl to filled mil/.
The use of the specific and :ualifing terms 9s/immed mil/9 in the headnote and 9condensed
s/immed mil/9 in the text of the cited section, .ould restrict the scope of the general clause
9all mil/, in .hatever form, from .hich the fatt pat has &een removed totall or in part.9 In
other .ords, the general clause is restricted & the specific term 9s/immed mil/9 under the
familiar rule of e:$sde! eneris that general and unlimited terms are restrained and limited &
the particular terms the follo. in the statute.
S/immed mil/ is different from filled mil/. According to the 93efinitions, Standards of
$urit, #ules and #egulations of the 5oard of <ood Inspection,9 s/immed mil/ is mil/ in
.hatever form from .hich the fatt part has &een removed. <illed mil/, on the other hand, is
an mil/, .hether or not condensed, evaporated concentrated, po.dered, dried, dessicated, to
.hich has &een added or .hich has &een &lended or compounded .ith an fat or oil other
than mil/ fat so that the resulting product is an imitation or sem&lance of mil/ cream or s/im
mil/.9 The difference, therefore, &et.een s/immed mil/ and filled mil/ is that in the former,
the fatt part has &een removed .hile in the latter, the fatt part is li/e.ise removed &ut is
su&stituted .ith refined coconut oil or corn oil or &oth. It cannot then &e readil or safel
assumed that Section 0)1 applies &oth to s/immed mil/ and filled mil/.
The 5oard of <ood Inspection .a &ac/ in 01)0 rendered an opinion that filled mil/ does not
come .ithin the purvie. of Section 0)1, it &eing a product distinct from those specified in the
said Section since the removed fat portion of the mil/ has &een replaced .ith coconut oil and
"itamins A and 3 as fortifing su&stances (p. (-, #ollo%. This opinion &olsters the Court's
stand as to its interpretation of the scope of Section 0)1. Opinions and rulings of officials of
the government called upon to execute or implement administrative la.s command much
respect and .eight. (Asturias Sugar Central Inc. vs. Commissioner of Customs, D. #. +o. 4!
01,,', Septem&er ,7, 01)1, *1 SC#A )0'= Tan, et. al. vs. The Aunicipalit of $ag&ilao et.
al., 4!02*)2, April ,7, 01),, ' SC#A --'= Drapilon vs. Aunicipal Council of Carigara 4!
0*,2', Aa ,7, 01)0, * SC#A 07,%.
This Court is, li/e.ise, induced to the &elief that filled mil/ is suita&le for nourishment for
infants of all ages. The $etitioners themselves admitted that8 9the filled mil/ products of the
petitioners (no. private respondents% are safe, nutritious, .holesome and suita&le for feeding
infants of all ages9 (p. 22, #ollo% and that 9up to the present, <ilipino infants fed since &irth
.ith filled mil/ have not suffered an defects, illness or disease attri&uta&le to their having
&een fed .ith filled mil/.9 (p. 2(, #ollo%.
There .ould seem, therefore, to &e no dispute that filled mil/ is suita&le for feeding infants of
all ages. 5eing so, the declaration re:uired & Section 0)1 of the Tax Code that filled mil/ is
not suita&le for nourishment for infants less than one ear of age .ould, in effect, constitute a
deprivation of propert .ithout due. process of la..
Section 0)1 is &eing enforced onl against respondent manufacturers of filled mil/ product
and not as against manufacturers, distri&utors or sellers of condensed s/immed mil/ such as
SIAI4AC, SAA, 5#EAI4, E+<AAI4, O4AC, in .hich, as admitted & the petitioner, the
fatt part has &een removed and su&stituted .ith vegeta&le or corn oil. The enforcement of
Section 0)1 against the private respondents onl &ut not against other persons similarl
situated as the private respondents amounts to an unconstitutional denial of the e:ual pro
petition of the la.s, for the la., e:uall enforced, .ould similarl offend against the
Constitution. Eic/ Go vs. Cop/ins, 00- 6.S. ,(),,7 4. ed. **7%.
As stated in the earl part of this decision, .ith the repeal of Sections 020 and 0'' of the Tax
Code, Section 0)1 has lost its tax purpose. Since Section 0)1 is devoid of an tax purpose,
petitioner Commissioner necessaril lost his authorit to enforce the same. This .as so held
& his predecessor immediatel after Sections 020 and 0'' .ere repealed in Deneral Circular
+o. "!-( as stated in paragraph I? of the $artial Stipulation of facts entered into & the
parties, to .it8
... As the act of s/immed mil/ .ithout first paing the specific tax
thereon is no longer unla.ful and the enforcement of the re:uirement in
regard to the placing of the proper legend on its immediate containers is a
su&@ect .hich does not come .ithin the @urisdiction of the 5ureau of
Internal #evenue, the penal provisions of Section 0'' of the said Code
having &een repealed & #epu&lic Act +o. 2),. (p. 07*, #ollo%.
$etitioner's contention that he still has @urisdiction to enforce Section 0)1 & virtue of Section
, of the Tax Code .hich provides that the 5ureau of Internal #evenue shall also 9give effect
to and administer the supervisor and police conferred to it & this Code or other la.s9
is untena&le. The 5ureau of Internal #evenue ma claim police onl .hen necessar in
the enforcement of its principal po.ers and duties consisting of the 9collection of all national
internal revenue taxes, fees and charges, and the enforcement of all forfeitures, penalties and
fines connected there.ith.9 The enforcement of Section 0)1 entails the promotion of the
health of the nation and is thus unconnected .ith an tax purpose. This is the exclusive
function of the <ood and 3rug Administration of the 3epartment of Cealth as provided for in
#epu&lic Act +o. ,'*7. In particular, #epu&lic Act +o. ,'*7 provides8
Section 1. ... It shall &e the dut of the 5oard (<ood and 3rug Inspection%,
conforma&l .ith the rules and regulations, to hold hearings and conduct
investigations relative to matters touching the Administration of this Act, to
investigate processes of food, drug and cosmetic manufacture and to su&@ect
reports to the <ood and 3rug Administrator, recommending food and drug
standards for adoption. Said 5oard shall also perform such additional
functions, properl .ithin the scope of the administration thereof, as ma&e
assigned to it & the <ood and 3rug Administrator. The decisions of the
5oard shall &e advisor to the <ood and 3rug Administrator.
Section *). ...
xxx xxx xxx
(c% Cearing authoriFed or re:uired & this Act shall &e conducted & the
5oard of <ood and 3rug Inspection .hich shall su&mit recommendation to
the <ood and 3rug Administrator.
(d% Ghen it appears to the <ood and 3rug Administrator from the reports of
the <ood and 3rug 4a&orator that an article of food or an drug or
cosmetic secured pursuant to Section *- of this Act is adulterated or
&randed he shall cause notice thereof to &e given to the person or persons
concerned and such person or persons shall &e given an opportunit to
su&@ect evidence impeaching the correctness of the finding or charge in
(e% Ghen a violation of an provisions of this Act comes to the /no.ledge
of the <ood and 3rug Administrator of such character that a criminal
prosecution ought to &e instituted against the offender, he shall certif the
facts to the Secretar of Bustice through the Secretar of Cealth, together
.ith the chemists' report, the findings of the 5oard of <ood and 3rug
Inspection, or other documentar evidence on .hich the charge is &ased.
(f% +othing in this Act shall &e construed as re:uiring the <ood and 3rug
Administrator to certif for prosecution pursuant to su&paragraph (e%
hereof, minor violations of this Act .henever he &elieves that pu&lic
interest .ill &e ade:uatel served & a suita&le .ritten notice or .arning.
The afore:uoted provisions of la. clearl sho. that petitioners, Commissioner of Internal
#evenue and the <air Trade 5oard, are .ithout @urisdiction to investigate and to prosecute
alleged mis&randing, misla&eling andJor misleading advertisements of filled mil/. The
@urisdiction on the matters cited is vested upon the 5oard of <ood and 3rug inspection and the
<ood and 3rug Administrator, .ith the Secretar of Cealth and the Secretar of Bustice, also
intervening in case criminal prosecution has to &e instituted. To hold that the petitioners have
also @urisdiction as .ould &e the result .ere their instant petition granted, .ould onl cause
overlapping of po.ers and functions li/el to produce confusion and conflict of official action
.hich is neither practical nor desira&le.
GCE#E<O#E, the decision appealed from is here& affirmed en toto. +o costs.
SO O#3E#E3.
G.R. No. L-23734 August 21, 1973
7LOOMING MILLS CO., INC., respondents.
G$e7ara, Pineda, G$e7ara & Castillon for petitioner.
Olalia ;i!apilis & Associates for respondent <nion =*A46<>
Assistant Solicitor General +e)nato S. P$no and Solicitor Jes$s V. ;iaz for respondent
B$rea$ of 6a'or +elations, etc., et al.

FERNANDO, Acting C.J.:
A certification & respondent 3irector of 4a&or #elations, Carmelo C. +oriel, that respondent
+ational <ederation of <ree 4a&or 6nions (+A<46% as the exclusive &argaining agent of all
the emploees in the $hilippine 5looming Aills, Compan, Inc. disregarding the o&@ection
raised & petitioner, the $hilippine Association of <ree 4a&or 6nions ($A<46%, is assailed in
this certiorari proceeding. Admittedl, in the certification election held on <e&ruar *', 01'),
respondent 6nion o&tained 2*1 votes as against 202 of petitioner 6nion. Again, admittedl,
under the #ules and #egulations implementing the present 4a&or Code, a ma@orit of the valid
votes cast suffices for certification of the victorious la&or union as the sole and exclusive
&argaining agent.
There .ere four votes cast & emploees .ho did not .ant an union.
2 On its face therefore, respondent 6nion ought to have &een certified in accordance .ith the
a&ove applica&le rule. $etitioner, undeterred, .ould seiFe upon the doctrine announced in the
case of Allied %or&ers Association of the Philippines 7. Co$rt of 8nd$strial +elations
spoiled &allots should &e counted in determining the valid votes cast. Considering there .ere
seventeen spoiled &allots, it is the su&mission that there .as a grave a&use of discretion on the
part of respondent 3irector. Implicit in the comment of respondent 3irector of 4a&or
#elations, 2 considered as an, is the controlling .eight to &e accorded the
implementing rule a&ove!cited, no inconsistenc &eing sho.n &et.een such rule and the
present 4a&or Code. 6nder such a vie., the ruling in the Allied Gor/ers Association case
that arose during the period .hen it .as the Industrial $eace Act
, that .as in effect and not
the present la., no longer possesses relevance. It cannot and should not &e applied. It is not
controlling. There .as no a&use of discretion then, much less a grave one.
This Court is in agreement. The la. is on the side of respondent 3irector, not to mention the
decisive fact appearing in the $etition itself that at most, onl ten of the spoiled &allots 9.ere
intended for the petitioner 6nion,9
thus rendering clear that it .ould on its o.n
o&tain onl 2*2 votes as against 2*1 for respondent 6nion. certiorari does not lie.
0. Ghat is of the essence of the certification process, as noted in 6a&as * Manaa?an
Pilipino 7. Ben$et Consolidated, 8nc.
9is that ever la&or organiFation &e given the
opportunit in a free and honest election to ma/e good its claim that it should &e the exclusive
collective &argaining representative.9
$etitioner cannot complain. It .as given that
opportunit. It lost in a fair election. It came out second &est. The implementing rule favors,
as it should, respondent 6nion, It o&tained a ma@orit of the valid votes cast. So our la.
$rescri&es. It is e:uall the case in the 6nited States as this excerpt from the .or/ of Cox and
5o/ ma/es clear8 9It is a .ell!settled rule that a representative .ill he certified even though
less than a ma@orit of all the emploees in the unit cast &allots in favor of the union. It is
enough that the union &e designated & a ma@orit of the valid &allots, and this is so even
though onl a small proportion of the eligi&le voters participates. < the analog of
political elections, the courts have approved this practice of the 5oard.9
*. There is this polic consideration. The countr is at present em&ar/ed on a .ide!scale
industrialiFation pro@ect. As a matter of fact, respondent firm is engaged in such activit.
IndustrialiFation, as noted & $rofessor Smith, Aerrifield and #othschild, 9can thrive onl as
there is developed a. sta&le structure of la. and order in the productive sector.9
o&@ective is &est attained in a collective &argaining regime, .hich is a manifestation of
industrial democrac at .or/, if there &e no undue o&stacles placed in the .a of the choice
of a &argaining representative. To insist on the a&solute ma@orit .here there are various
unions and .here the possi&ilit of invalid &allots ma not &e ruled out, .ould &e to frustrate
that goal. <or the pro&a&ilit of a long dra.n!out, protracted process is not eas to dismiss.
That is not unli/el given the intensit of rivalr among unions capa&le of enlisting the
allegiance of a group of .or/ers. It is to avoid such a contingenc that there is this explicit
pronouncement in the implementing rule. It spea/s categoricall. It must &e o&eed. That .as
.hat respondent 3irector did.
,. +or can fault of a grave and serious character &e imputed to respondent 3irector
presuma&l &ecause of failure to a&ide & the doctrine or pronouncement of this Court in the
aforesaid Allied Gor/ers Association case. The reliance is on this excerpt from the opinion8
9Co.ever, spoiled &allots, i.e., those .hich are defaced, torn or mar/ed (#ules for
Certification Elections, #ule II, sec. *M@N% should &e counted in determining the ma@orit since
the are nevertheless votes cast & those .ho are :ualified to do so.9 00 +othing can &e
clearer than that its &asis is a paragraph in a section of the then applica&le rules for
certification elections.
The .ere promulgated under the authorit of the then prevailing
Industrial $eace Act.
That 4egislation is no longer in force, having &een superseded & the
present 4a&or Code .hich too/ effect on +ovem&er 0, 01'2. This certification election is
governed therefore, as .as made clear, & the present 4a&or Code and the #ules issued
thereunder. A&sent a that such rules and regulations !are violative of the Code, this
Court cannot ignore their existence. Ghen, as should &e the case, a pu&lic official acts in
accordance .ith a norm therein contained, no infraction of the la. is committed. #espondent
3irector did, as he ought to, compl .ith its terms. Ce too/ into consideration onl the 9valid
votes9 as .as re:uired & the #ules. Ce had no choice as long as the remain in force. In a
proper, the @udiciar can nullif an rule it found in conflict .ith the governing
That .as not even attempted here. All that petitioner did .as to set forth in t.o
separate paragraphs the applica&le rule follo.ed & respondent 3irector
and the governing
It did not even &other to discuss .h such rule .as in conflict .ith the present
4a&or Code. It failed to point out an repugnanc. Such &eing the case, respondent 3irector
must &e upheld.
2. The conclusion reached & us derives further support from the deservedl high repute
attached to the construction placed & the executive officials entrusted .ith the responsi&ilit
of appling a statute. The #ules and #egulations implementing the present 4a&or Code .ere
issued & Secretar 5las Ople of the 3epartment of 4a&or and too/ effect on <e&ruar ,,
01'(, the present 4a&or Code having &een made /no.n to the pu&lic as far &ac/ as Aa 0,
01'2, although its date of effectivit .as postponed to +ovem&er 0, 01'2, although its date of
effectivit .as postponed to +ovem&er 0, 01'2. It .ould appear then that there .as more
than enough time for a reall serious and careful stud of such suppletor rules and
regulations to avoid an inconsistenc .ith the Code. This Court certainl cannot ignore the
interpretation thereafter em&odied in the #ules. As far &ac/ as In re Allen,9
a 017, decision,
Bustice Ac3onough, as ponente, cited this excerpt from the leading American case
of Penno)er 7. McConna$h), decided in 0-108 9The principle that the contemporaneous
construction of a statute & the executive officers of the government, .hose dut it is to
execute it, is entitled to great respect, and should ordinaril control the construction of the
statute & the courts, is so firml em&edded in our @urisprudence that no authorities need &e
cited to support it.9
There .as a paraphrase & Bustice Aalcolm of such a pronouncement
in Molina 7. +affert),9
a 010- decision8 9Courts .ill and should respect the
contemporaneous construction placed upon a statute & the executive officers .hose dut it is
to enforce it, and unless such interpretation is clearl erroneous .ill ordinaril &e controlled
Since then, such a doctrine has &een reiterated in numerous decisions .
As .as
emphasiFed & Chief Bustice Castro, 9the construction placed & the office charged .ith
implementing and enforcing the provisions of a Code should he given controlling .eight. 9
GCE#E<O#E, the petition for certiorari is dismissed. Costs against petitioner $hilippine
Association of <ree 4a&or 6nions ($A<46%.
G.R. No. 87213 A.!-$ 8, 1991
CECILIO S. DE *ILLA, petitioner,
6ONORA7LE 8O7 7. MADA:AG, '() RO7ERTO ;. LORA:ES, respondents.
San Jose @nriA$ez, 6acas Santos & Bor:e for petitioner.
@d$ardo +. +o'les for pri7ate respondent.

/ARAS, J.:p
This petition for revie. on certiorari see/s to reverse and set aside the decision < of the Court
of Appeals promulgated on <e&ruar 0, 01-1 in CA!D.#. S$ +o. 0)7'0 entitled 9Cecilio S. de
"illa vs. Budge Bo& 5. Aadaag, etc. and #o&erto H. 4oraes,9 dismissing the petition
for certiorari filed therein.
The factual &ac/drop of this case, as found & the Court of Appeals, is as follo.s8
On Octo&er (, 01-', petitioner Cecilio S. de "illa .as charged &efore the
#egional Trial Court of the +ational Capital Budicial #egion (Aa/ati,
5ranch 02(% .ith violation of 5atas $am&ansa 5ilang **, allegedl
committed as follo.s8
That on or a&out the ,rd da of April 01-', in the
municipalit of Aa/ati, Aetro Aanila, $hilippines and
.ithin the @urisdiction of this Conora&le Court, the a&ove!
named accused, did, then and there .illfull, unla.full
and feloniousl ma/e or dra. and issue to #O5E#TO H.
4O#AEEH, to appl on account or for value a 3epositors
Trust Compan Chec/ +o. ,,'0 antedated Aarch ,0,
01-', paa&le to herein complainant in the total amount
of 6.S. >*,(77.77 e:uivalent to $(7,777.77, said accused
.ell / that at the time of issue he had no sufficient
funds in or credit .ith &an/ for pament of such
chec/ in full upon its presentment .hich chec/ .hen
presented to the &an/ .ithin ninet (17% das
from the date thereof .as su&se:uentl dishonored for the
reason 9I+S6<<ICIE+T <6+3S9 and despite receipt of
notice of such dishonor said accused failed to pa said
#O5E#TO H. 4O#AEEH the amount of $(7,777.77 of
said chec/ or to ma/e arrangement for full pament of the
same .ithin five ((% &an/ing das after receiving said
After arraignment and after private respondent had testified on direct
examination, petitioner moved to dismiss the Information on the
grounds8 (a% #espondent court has no @urisdiction over the offense charged=
and (&% That no offense .as committed since the chec/ involved .as
paa&le in dollars, hence, the o&ligation created is null and void pursuant to
#epu&lic Act +o. (*1 (An Act to Assure 6niform "alue of $hilippine Coin
and Currenc%.
On Bul 01, 01--, respondent court issued its first :uestioned orders stating8
Accused's motion to dismiss dated Bul (, 01--, is denied
for lac/ of merit.
6nder the 5ouncing Chec/s 4a. (5.$. 5lg. **%, foreign
chec/s, provided the are either dra.n and issued in the
$hilippines though paa&le outside thereof, or made
paa&le and dishonored in the $hilippines though dra.n
and issued outside thereof, are .ithin the coverage of said
la.. The la. li/e.ise applied to chec/s dra.n against
current accounts in foreign currenc.
$etitioner moved for reconsideration &ut his motion .as su&se:uentl
denied & respondent court in its order dated Septem&er ), 01--, and .hich
Accused's motion for reconsideration, dated August 1,
01--, .hich .as opposed & the prosecution, is denied
for lac/ of merit.
The 5ouncing Chec/s 4a. is applica&le to chec/s dra.n
against current accounts in foreign currenc ($roceedings
of the 5atasang $am&ansa, <e&ruar ', 01'1, p. 0,'),
cited in Aa/ati #TC Budge (no. Aanila Cit <iscal%
Besus <. Duerrero's The #amifications of the 4a. on
5ouncing Chec/s, p. (%. (+ollo, Annex 9A9, 3ecision, pp.
A petition for certiorari see/ing to declare the nullit of the afore:uoted orders dated Bul 01,
01-- and Septem&er ), 01-- .as filed & the petitioner in the Court of Appeals .herein he
(a% That since the :uestioned chec/ .as dra.n against the dollar account of
petitioner .ith a foreign &an/, respondent court has no @urisdiction over the
same or .ith accounts outside the territorial @urisdiction of the $hilippines
and that 5atas $am&ansa 5ilang ** could have not contemplated extending
its coverage over dollar accounts=
(&% That assuming that the su&@ect chec/ .as issued in connection .ith a
private transaction &et.een petitioner and private respondent, the pament
could not &e legall paid in dollars as it .ould violate #epu&lic Act +o.
(*1= and
(c% That the o&ligation arising from the issuance of the :uestioned chec/ is
null and void and is not enforcea&le .ith the $hilippines either in a civil or
criminal suit. 6pon such premises, petitioner concludes that the dishonor of
the :uestioned chec/ cannot &e said to have violated the provisions of 5atas
$am&ansa 5ilang **. (+ollo, Annex 9A9, 3ecision, p. **%.
On <e&ruar 0, 01-1, the Court of Appeals rendered a decision, the decretal portion of .hich
GCE#E<O#E, the petition is here& dismissed. Costs against petitioner.
SO O#3E#E3. (+ollo, Annex 9A9, 3ecision, p. (%
A motion for reconsideration of the said decision .as filed & the petitioner on <e&ruar ',
01-1 (+ollo, $etition, p. )% &ut the same .as denied & the Court of Appeals in its resolution
dated Aarch ,, 01-1 (+ollo, Annex 959, p. *)%.
Cence, this petition.
In its resolution dated +ovem&er 0,, 01-1, the Second 3ivision of this Court gave due course
to the petition and re:uired the parties to su&mit simultaneousl their respective memoranda
(+ollo, #esolution, p. -0%.
The sole issue in this case is .hether or not the #egional Trial Court of Aa/ati has
@urisdiction over the case in :uestion.
The petition is .ithout merit.
Burisdiction is the .ith .hich courts are invested for administering @ustice, that is, for
hearing and deciding cases ("elunta vs. $hilippine Consta&ular, 0(' SC#A 02' M01--N%.
Burisdiction in general, is either over the nature of the action, over the su&@ect matter, over the
person of the defendant, or over the issues framed in the pleadings (5alais vs. 5alais, 0(1
SC#A ,' M01--N%.
Burisdiction over the su&@ect matter is determined & the statute in force at the time of
commencement of the action (3e la CruF vs. Aoa, 0)7 SC#A (,- M01--N%.
The trial court's @urisdiction over the case, su&@ect of this revie., can not &e :uestioned.
Sections 07 and 0((a%, #ule 007 of the #ules of Court specificall provide that8
Sec. 07. Place of the co!!ission of the offense. The complaint or
information is sufficient if it can &e understood therefrom that the offense
.as committed or some of the essential ingredients thereof occured at some
place .ithin the @urisdiction of the court, unless the particular place .herein
it .as committed constitutes an essential element of the offense or is
necessar for identifing the offense charged.
Sec. 0(. Place ?here action is to 'e instit$ted. (a% Su&@ect to existing la.s,
in all criminal prosecutions the action shall &e instituted and tried in the
court of the municipalit or territor .here the offense .as committed or
an of the essential ingredients thereof too/ place.
In the case of People 7s. Bon. Manzanilla (0() SC#A *'1 M01-'N cited in the case of 4im vs.
#odrigo, 0)' SC#A 2-' M01--N%, the Supreme Court ruled 9that @urisdiction or venue is
determined & the allegations in the information.9
The information under consideration specificall alleged that the offense .as committed in
Aa/ati, Aetro Aanila and therefore, the same is controlling and sufficient to vest @urisdiction
upon the #egional Trial Court of Aa/ati. The Court ac:uires @urisdiction over the case and
over the person of the accused upon the filing of a complaint or information in court .hich
initiates a criminal action (#epu&lic vs. Sunga, 0)* SC#A 010 M01--N%.
Aoreover, it has &een held in the case of Oue v. $eople of the $hilippines (0(2 SC#A 0)7
M01-'N cited in the case of $eople vs. Drospe, 0(' SC#A 0(2 M01--N% that 9the determinative
factor (in determining venue% is the place of the issuance of the chec/.9
On the matter of venue for violation of 5atas $am&ansa 5ilang **, the Ainistr of
Bustice, citin the case of $eople vs. Ea&ut (') SC#A )*2 M01''N, laid do.n the
guidelines in Aemorandum Circular +o. 2 dated 3ecem&er 0(, 01-0, the pertinent portion of
.hich reads8
(0% "enue of the offense lies at the place .here the chec/ .as executed and
delivered= (*% the place .here the chec/ .as .ritten, signed or dated does
not necessaril fix the place .here it .as executed, as .hat is of decisive
importance is the deliver thereof .hich is the final act essential to its
consummation as an o&ligation= . . . (#es. +o. ,'', s. 01-7, <iltex Afg.
Corp. vs. Aanuel Chua, Octo&er *-, 01-7%.9 (See The 4a. on 5ouncing
Chec/s AnalFed & Budge Besus <. Duerrero, $hilippine 4a. DaFette, "ol.
'. +os. 00 ; 0*, Octo&er!3ecem&er, 01-,, p. 02%.
It is undisputed that the chec/ in :uestion .as executed and delivered & the petitioner to
herein private respondent at Aa/ati, Aetro Aanila.
Co.ever, petitioner argues that the chec/ in :uestion .as dra.n against the dollar account of
petitioner .ith a foreign &an/, and is therefore, not covered & the 5ouncing Chec/s 4a.
(5.$. 5lg. **%.
5ut it .ill &e noted that the la. does not distinguish the currenc involved in the case. As the
trial court correctl ruled in its order dated Bul (, 01--8
6nder the 5ouncing Chec/s 4a. (5.$. 5lg. **%, foreign chec/s, provided
the are either dra.n and issued in the $hilippines though paa&le outside
thereof . . . are .ithin the coverage of said la..
It is a cardinal principle in statutor construction that .here the la. does not distinguish
courts should not distinguish. $arentheticall, the rule is that .here the la. does not ma/e
an exception, courts ma not except something unless compelling reasons exist to @ustif it
($hil. 5ritish Assurance Co., Inc. vs. IAC, 0(7 SC#A (*7 M01-'N%.
Aore importantl, it is .ell esta&lished that courts ma avail themselves of the actual
proceedings of the legislative &od to assist in determining the construction of a statute of
dou&tful meaning ($alanca vs. Cit of Aanila, 20 $hil. 0*( M01*7N%. Thus, .here there is
dou&ts as to .hat a provision of a statute means, the meaning put to the provision during the
legislative deli&eration or discussion on the &ill ma &e adopted (Arenas vs. Cit of San
Carlos, -* SC#A ,0- M01'-N%.
The records of the 5atasan, "ol. III, unmista/a&l sho. that the intention of the is
to appl the la. to .hatever currenc ma &e the su&@ect thereof. The discussion on the floor
of the then 5atasang $am&ansa full sustains this vie., as follo.s8
xxx xxx xxx
TCE S$EALE#. The Dentleman from 5asilan is
A#. T6$AE. $arliamentar in:uir, Ar. Spea/er.
TCE S$EALE#. The Dentleman ma proceed.
A#. T6$AE. Ar. Spea/er, it has &een mentioned & one
of the Dentlemen .ho interpellated that an chec/ ma &e
involved, li/e 6.S. dollar chec/s, etc. Ge are tal/ing
a&out chec/s in our countr. There are 6.S. dollar chec/s,
chec/s, in our currenc, and man others.
TCE S$EALE#. The Sponsor ma that in:uir.
A#. AE+3OHA. The 'ill refers to an) chec&,
Mr. Spea&er, and this chec& !a) 'e a chec& in ?hate7er
c$rrenc). This ?o$ld not e7en 'e li!ited to <.S. dollar
chec&s. The chec& !a) 'e in 4rench francs or Japanese
)en or de$tsch$norhs. =sic.> 8f dra?n, then this 'ill ?ill
A# T6$AE. So it incl$de <.S. dollar chec&s.
A#. AE+3OHA. Ces, Mr. Spea&er.
xxx xxx xxx
(p. 0,'), #ecords of the 5atasan, "olume III= Emphasis supplied%.
$#EAISES CO+SI3E#E3, the petition is 3ISAISSE3 for lac/ of merit.
G.R. No. 143722 F#=!u'!% 9, 1992
T6E NATIONAL /OLICE COMMISSION, !#.!#s#(t#) =% -ts A+t-(g C0'-!"'(, C#s'!
S'!-(o, T#o)o$o C. N't-5-)'), *-+#-C0'-!"'( '() E>#+ut-5# O,,-+#!, 7!-g. G#(. *-!g-$-o
6. D'5-), E)g'! Du$' To!!#, Gu-$$#!"o /. E(!-?u#@, Co""-ss-o(#!s, '() C0-#, Su.t.
L#5% D. M'+'s-'(o D-!#+to! ,o! /#!so((#$,petitioners,
6o(o!'=$# 8u)g# S'$5')o! )# Gu@"'(, 8!., C0-#, Su.t. No!=#!to M. L-(', C0-#, Su.t.
R-+'!)o T!-(-)'), 8!., S!. Su.t. M'(u#$ Su'!#@, Su.t. 8ust-to 7. T'gu", S!. Su.t.
T!'(?u-$-(o As.-!'s, S!., Su.t. R'"o( I. N'5'!!o,
S!. Su.t. R'"o( I. N'5'!!o, S!. Su.t. 8os# /. Su!-', S!. Su.t. Ag'to( A=-#!', C0-#,
I(s.. 7-#(5#(-)o To!!#s, '() t0# N't-o('$ ROTC1 A$u"(- Asso+-'t-o( I(+. NARRA1,
!#.!#s#(t#) =% -ts /!#s-)#(t Co$. 7#(A'"-( Gu()!'(, '() D-!#+to! 6#!"og#(#s /#!'$t',
8!., respondents.
The Solicitor General for petitioners.
+enecio +. @spirit$ for pri7ate respondents.
;iosdado P. Peralta for respondentDinter7enor.

7IDIN, J.:
The case at &ar had its origin in the implementation of the compulsor retirement of $+$
officers as mandated in Sec. ,1, #A )1'(, other.ise /no.n as 9An Act Esta&lishing the
$hilippine +ational $olice 6nder a #eorganiFed 3epartment of the Interior and 4ocal
Dovernment9, .hich too/ effect on
Banuar *, 0110. Among others, #A )1'( provides for a uniform retirement sstem for $+$
mem&ers. Section ,1 thereof reads8
Sec. ,1. Co!p$lsor) +etire!ent. I Compulsor retirement, for officer and
non!officer, shall &e upon the attainment of age fift!six (()%= Pro7ided,
That, in case of an officer .ith the ran/ of chief superintendent, director or
deput director general, the Commission ma allo. his retention in the
service for an unextendi&le period of one (0% ear.
5ased on the a&ove provision, petitioners sent notices of retirement to private respondents
.ho are all mem&ers of the defunct $hilippine Consta&ular and have reached the age of
fift!six (()%.
In response, private respondents filed a complaint on 3ecem&er 01, 0110 for declarator relief
.ith praer for the issuance of an e( parte restraining order andJor in@unction (doc/eted as
Civil Case +o. 10!,21-% &efore the #egional Trial Court of Aa/ati, 5ranch 02*. In their
complaint, respondents aver that the age of retirement set at fift!six (()% & Section ,1 of #A
)1'( cannot &e applied to them since the are also covered & Sec. -1 thereof .hich
An provision hereof to the contrar not.ithstanding, and .ithin the
transition period of four (2% ears the effectivit of this Act, the mem&ers of the I+$ shall &e considered compulsoril retired8
a% Those .ho shall attain the age of sixt ()7% on the first ear of the
effectivit of this Act.
&% Those .ho shall attain the age of fift!nine ((1% on the second ear of the
effectivit of this Act.
c% Those .ho shall attain the age of fift!eight ((-% on the third ear of the
effectivit of this Act.
d% Those .ho shall attain the age of fift!seven (('% on the fourth ear of
the effectivit of this Act.
It is the su&mission of respondents that the term 9I+$9 includes &oth the former mem&ers of
the $hilippine Consta&ular and the local police force .ho .ere earlier constituted as the
Integrated +ational $olice (I+$% & virtue of
$3 ')( in 01'(.
On the other hand, it is the &elief of petitioners that the 2!ear transition period provided in
Section -1 applies onl to the local police forces .ho previousl retire, compulsoril, at age
sixt ()7% for those in the ran/s of $oliceJ<ire 4ieutenant or higher (Sec. ,,, $3 00-2%= .hile
the retirement age for the $C had alread &een set at fift!six (()% under the A<$ la..
On 3ecem&er *,, 0110, respondent @udge issued a restraining order follo.ed & a .rit of
in@unction on Banuar -, 011* upon posting of a $077,777.77 &ond & private respondents.
After the parties have su&mitted their respective pleadings, the case .as su&mitted for
resolution and on August 02, 011*, the respondent @udge rendered the assailed decision, the
decretal portion of .hich reads8
GCE#E<O#E, the court here& declares that the term 9I+$9 in Section -1
of the $+$ 4a. includes all mem&ers of the present $hilippine +ational
$olice, irrespective of the original status of the present mem&ers of the
$hilippine +ational $olice &efore its creation and esta&lishment, and that
Section ,1 thereof shall &ecome operative after the lapse of the
four!ear transition period.
The preliminar in@unction issued is made permanent.
SO O#3E#E3. (+ollo, pp. *1!,7%
$etitioners filed the instant petition on Octo&er -, 011* see/ing the reversal of the a&ove
@udgment. On Banuar 0*, 011,, the Court resolved to treat the respondents' Comment as and gave due course to the petition.
In ruling in favor of private respondents, respondent @udge o&served, among others, that8
8t !a) ha7e 'een the intention of Conress to refer to the local police forces
as the 98*P9 '$t the P*P 6a? failed to define ?ho or ?hat constit$ted the
8*P. The natural recourse of the court is to trace the source of the 9I+$9 as
courts are permitted to loo/ to prior la.s on the same su&@ect and to
investigate the antecedents involved. There is nothing extant in the statute
&oo/s except that .hich .as created and esta&lished under
$3 ')( pursuant to the mandate of Article ?" of the 01', Constitution
providing that the 9State shall esta&lish and maintain an integrated national
police force .hose organiFation, administration and operation shall &e
provided & la..9 Ceretofore, I+$ .as un/no.n. And the said la.
categoricall declared the $C 9as the principal component of the Integrated
+ational $olice9 (Sec. (, $3 ')(%.
The co$rt ?as s$pplied ') respondents =petitioners herein> ?ith e(cerpts
ta&en fro! the disc$ssion a!onst the !e!'ers of Conress concernin the
partic$lar pro7ision of Section .2. The co$rt is not pers$aded ') said
disc$ssion= it .as a simple matter for the mem&ers of the legislature to state
precisel in clear and une:uivocal terms their meaning, such as 9integrated
police9 as used in $3 ')(. Instead, the emploed 9I+$9, a generic term
that includes the $C as the principal component of the I+$, s$pra. 8n failin
to cateoricall) restrict the application of Section .2 as the !e!'ers of
leislat$re are said to ha7e intended, it a7e rise to the pres$!ption that it
has not li!ited nor intended to li!it the !eanin of the ?ord ?hen the 'ill
?as finall) passed into la?. It is not difficult for the court to also presume
that in drafting the .ording of the $+$ 4a., the legislators .ere a.are of
the historical legislative origin of the 9I+$9.
xxx xxx xxx
The court ta/es particular note of the fact that Section -1 is found in the
Transitor $rovisions of the la. .hich do not provide for an distinction
&et.een the former $C officers and those &elonging to the civilian police
forces. These provision are specificall enacted to regulate the period
covering the dissolution of the $C and the creation of the $+$, a period that
necessaril .ould &e attended & im&alances and or confusion occasioned
& the .holesale and mass integration. In fact, the retirement pament
scheme of the I+$ is still to &e formulated, leaving the impression that
nothing is reall settled until after the transition of four ears has lapsed.
Section -1 therefore prevails over Section ,1 up to the ear 011( .hen the
retirement age for the mem&ers of the $+$ shall then &e age ()= after the
ear 011(, Section ,1 shall then &e the applica&le la. on retirement of $+$
mem&ers. (+ollo, pp. *'!*-= emphasis supplied%
$etitioners disagree and claim that the use of the term I+$ in Sec. -1 does not impl the same
meaning contemplated under $3 ')( .herein it is provided8
Sec. 0. Constit$tion of the 8nterated *ational Police. I There is here&
esta&lished and constituted the Integrated +ational $olice (I+$% .hich shall
&e composed of the $hilippine Consta&ular as the nucleus, and the
integrated police forces as esta&lished & $residential 3ecrees
+os. 2*0, 2-*, (,0, (-( and )20, as components, under the 3epartment of
+ational 3efense.
On the other hand, private respondents assert that &eing the nucleus of the Integrated +ational
$olice (I+$% under $3 ')(, former mem&ers of the $hilippine Consta&ular ($C% should not
&e discriminated against from the coverage of the term 9I+$9 in Sec. -1, #A )1'(. Clearl, it
is argued, the term 9I+$9 found in Section -1 of #A )1'( refers to the I+$ in $3 ')(. Thus,
.here the la. does not distinguish, the courts should not distinguish.
3oes the la., #A )1'(, distinguish I+$ from the $CP $etitioners su&mit that it does and cite
Sections *, and -( to stress the point, 7iz.8
Sec. *,. Co!position. I Su&@ect to the limitations provided for in this Act,
the $hilippine +ational $olice, hereinafter referred to as the $+$, is here&
esta&lished, initiall consisting of the mem&ers of the police forces .ho
.ere integrated into the Integrated +ational $olice (I+$% pursuant to
$residential 3ecree +o. ')(, and the officers and enlisted personnel of the
$hilippine Consta&ular ($C%. . .
xxx xxx xxx
The permanent civilian emploees of the present $C, I+$, +arcotics
Command, CIS and the technical command of the A<$ assigned .ith the
$C, including +A$O4COA hearing officers holding regular items as such,
shall &e a&sor&ed & the 3epartment as emploees thereof, su&@ect to
existing la.s and regulations.
xxx xxx xxx
Sec. -(. Phase of 8!ple!entation. I The implementation of this Act shall
&e underta/en in three (,% phases, to .it8
$hase I I Exercise of option & the uniformed mem&ers of the $hilippine
Consta&ular, the $C elements assigned .ith the +arcotics Command, CIS,
and the personnel of the technical services of the A<$ assigned .ith the $C
to include the regular CIS investigating agents and the operatives and agents
of the +A$O4COA Inspection, Investigation and Intelligence 5ranch, and
the personnel of the a&sor&ed +ational Action Committee on Anti!
Ci@ac/ing (+ACAC% of the 3epartment of +ational 3efense, to &e
completed .ithin six ()% months from the date of the effectivit of this Act.
At the end of this phase, all personnel from the I+$, $C, technical Services,
+ACAC, and +A$O4COA Inspection, Investigation and Intelligence
5ranch shall have &een covered & official orders assigning them to the
$+$ . . .
xxx xxx xxx
. . . An $C!I+$ officer or enlisted personnel ma, .ithin the t.elve!month
period from the effectivit of this Act, retire . . .
$hase III I . . . To accomplish the tas/s of $hase III, the Commission shall
create a 5oard of Officers composed of the follo.ing8 +A$O4COA
Commissioner as Chairman and one (0% representative each from the $C,
I+$, Civil Service Commission and the 3epartment of 5udget and
Section -) of the same la. further provides8
Sec. -). Ass$!ption ') the P*P of Police 4$nctions. I The $+$ shall
a&sor& the functions of the $C, the I+$ and the +arcotics Command upon
the effectivit of this Act.
<rom a careful perusal of the a&ove provisions, it appears therefore that the use of the term
I+$ is not snonmous .ith the $C. Cad it &een other.ise, the statute could have @ust made a
uniform reference to the mem&ers of the .hole $hilippine +ational $olice ($+$% for
retirement purposes and not @ust the I+$. The la. itself distinguishes I+$ from the $C and it
cannot &e construed that 9I+$9 as used in Sec. -1 includes the mem&ers of the $C.
And contrar to the pronouncement of respondent @udge that the la. failed to define .ho
constitutes the I+$, Sec. 17 of #A )1'( has in fact defined the same. Thus,
Sec. 17. Stat$s of Present *APO6COM, PCD8*P. I 6pon the effectivit of
this Act, the present +ational $olice Commission and the $hilippine
Consta&ular!Integrated +ational $olice shall cease to exist. The $hilippine
Consta&ular, .hich is the nucleus of the $hilippine Consta&ular!
Integrated +ational $olice shall cease to &e a ma@or service of the Armed
<orces of the $hilippines. The 8nterated *ational Police, ?hich is the
ci7ilian co!ponent of the Philippine Consta'$lar)D8nterated *ational
Police, shall cease to &e the national police force and lieu thereof, a ne.
police force shall &e esta&lished and constituted pursuant to this Act.
(emphasis supplied%
It is not altogether correct to state, therefore, that the legislature failed to define .ho the
mem&ers of the I+$ are. In this regard, it is of no moment that the legislature failed to
categoricall restrict the application of the transition period in Sec. -1 specificall in favor of
the local police forces for it .ould &e a mere superfluit as the $C component of the I+$ .as
alread retira&le at age fift!six (()%.
Caving defined the meaning of I+$, the trial court need not have &ela&ored on the supposed
du&ious meaning of the term. +onetheless, if confronted .ith such a situation, courts are not
.ithout recourse in determining the construction of the statute .ith dou&tful meaning for the
ma avail themselves of the actual proceedings of the legislative &od. In case of dou&t as to
.hat a provision of a statute means, the meaning put to the provision during the legislative
deli&erations ma &e adopted (3e "illa v. Court of Appeals,
01( SC#A '** M0110N citing $alanca v. Cit of Aanila, 20 $hil. 0*( M01*7N= Arenas v. Cit of
San Carlos, -* SC#A ,0- M01'-N%.
Courts should not give a literal interpretation to the letter of the la. if it runs counter to the
legislative intent (Eello. Taxi and $asa Transportation Gor/ers' Association v. Aanila
Eello. Taxi Ca&. Co., -7 $hil. -, M012-N%.
Examining the records of the 5icameral Conference Committee, .e find that the legislature
did intent to exclude the mem&ers of the $C from the coverage of Sec. -1 insofar as the
retirement age is concerned, thus8
TCE CCAI#AA+. (SE+. AACE3A%. Gell, it seems .hat people reall
.ant is one common rule, so if it is fift!six, fift!six= of course, the $C
.ants sixt for ever&od. Of course, it is not accepta&le to us in the sense
that .e tied this up reall to the :uestion of8 If ou are lax in their
(the $C% entr into the $+$, then tighten up the retirement. If .e .ill &e
strict in, li/e re:uiring examinations and other conditions for their original
entr, then since .e have sifted out a certain amount of undesira&les, then
.e can allo. a longer retirement age. That .as the rationale, that .as the
tie!up. Since .e are relaxing the entr, .e should speed up . . .
TCE CCAI#AA+. (#E$. D6TA+D%. Exit.
TCE CCAI#AA+. (SE+. AACE3A% . . . the retirement, the exit.
TCE CCAI#AA+. (#E$. D6TA+D%. So let me get it ver clear, Ar.
Chairman. <ift!six, let's sa, that .ill not ma/e an ad@ustment in the $C
&ecause there (the% are (retira&le at age% fift!six.
TCE CCAI#AA+. (SE+. AACE3A%. Laa nga, .ala na silang masasa&i.
TCE CCAI#AA+. (#E$. D6TA+D%. In the case of the $olice, since the
are retirea&le no. at sixt, for the officers, it .ill &e
applica&le to them on a one!ear ever ear &asis for a total period of four
ears transition. (5icameral Conference Committee on +ational 3efense,
Aarch 0*, 0117%
#E$. D6TA+D. On the first ear of effectivit, the police .ill retire at )7
TCE CCAI#AA+. (SE+. AACE3A%. Sixt.
#E$. D6TA+D. On the second ear, (1.
#E$. D6TA+D. On the third ear, (-.
TCE CCAI#AA+. (SE+. AACE3A%. <ift!eight. So 'ung ((, on the
third ear, (-, doon sia re!retire.
#E$. D6TA+D. Oo.
SE+. SAD6ISAD. So /ung ((, .hen the la. &ecomes effective . . .
TCE CCAI#AA+. (SE+. AACE3A%. Ce .ill retire at (-, doon sia
#E$. 6+ICO. $.ede.
SE+. SAD6ISAD. 3ahil 'on, ma time to . . .
TCE CCAI#AA+. (SE+. AACE3A%. Galang pro&lema dito sa transition
ng pulis, accepta&le ito, eh.
TCE CCAI#AA+. (SE+. AACE3A%. $C, .alang ma.a.ala sa /anila, ()
ang retirement age nilang talaga, eh. Laa aa. /o
ngang dagdagan 'ung () nila at 'on din ang sa Armed <orces, (). (8'id.,
Aa **, 0117%
In appling the provisions of Sec. -1 in favor of the local police force as esta&lished in $3
')(, the Court does not, in an manner, give an
undue preferential treatment in favor of the other group. On the contrar, the Court is merel
giving life to the real intent of the legislators &ased on the deli&erations of the 5icameral
Conference Committee that preceded the enactment of #A )1'(.
The legislative intent to classif the I+$ in such manner that Section -1 of #A )1'( is
applica&le onl to the local police force is clear. The :uestion no. is .hether the
classification is valid. The test for this is reasona&leness such that it must conform to the re:uirements8 (0% It must &e &ased upon su&stantial distinctions= (*% It must &e
germane to the purpose of the la.= (,% It must not &e limited to existing conditions onl= (2% It
must appl e:uall to all mem&ers of the same class ($eople vs. Caat, )- $hil. 0* M01,1N%.
The classification is &ased upon su&stantial distinctions. The $C, &efore the effectivit of the
la. (#A )1'(%, .ere alread retira&le at age () .hile the local police force .ere retira&le at
)7, and governed & different la.s
($.3. 00-2, Sec. ,, and Sec. (7%. The distinction is relevant for the purpose of the statute,
.hich is to ena&le the local police force to plan for their retirement .hich .ould &e earlier
than usual &ecause of the ne. la.. Section -1 is merel transitor, remedial in nature, and
loses its force and effect once the four!ear transitor period has elapsed. <inall, it applies
not onl to some &ut to all local police officers.
It ma &e appropriate to state at this point that it seems a&surd that a la. .ill grant an
extension to $C officers' retira&le age from () to )7 and then graduall it &ac/ to ()
.ithout an cogent reason at all. Gh should the retirement age of $C officers &e increased
during the transitor period to the exclusion of other $C officers .ho .ould retire at age ()
after such periodP Such a&surdit .as never contemplated & the la. and .ould defeat its
purpose of providing a uniform retirement age for $+$ mem&ers.
GCE#E<O#E, the petition is D#A+TE3. The .rit of in@unction issued on Banuar -, 011*
is here& 4I<TE3 and the assailed decision of respondent @udge is #E"E#SE3 and SET
SO O#3E#E3.
G.R. No. L-17931 F#=!u'!% 28, 1933
CASCO /6ILI//INE C6EMICAL CO., INC., petitioner,
6ON. /EDRO GIMENE;, -( 0-s +'.'+-t% 's Au)-to! G#(#!'$ o, t0# /0-$-..-(#s,
'() 6ON. ISMAEL MAT6A:, -( 0-s +'.'+-t% 's Au)-to! o, t0# C#(t!'$
7'(B, respondents.
Jalandoni & Ja!ir for petitioner.
Officer of the Solicitor General for respondents.
This is a petition for revie. of a decision of the Auditor Deneral dening a claim for refund of
petitioner Casco $hilippine Chemical Co., Inc.
The main facts are not disputed. $ursuant to the provisions of #epu&lic Act +o. *)71,
other.ise /no.n as the <oreign Exchange Aargin <ee 4a., the Central 5an/ of the
$hilippines issued on Bul 0, 01(1, its Circular +o. 1(. fixing a uniform margin fee of *(K on
foreign exchange transactions. To supplement the circular, the 5an/ later promulgated a
memorandum esta&lishing the procedure for applications for exemption from the pament of
said fee, as provided in said #epu&lic Act +o. *)71. Several times in +ovem&er and
3ecem&er 01(1, petitioner Casco $hilippine Chemical Co., Inc. I .hich is engaged in the
manufacture of snthetic resin glues, used in &onding lum&er and veneer & pl.ood and
hard.ood producers I &ought foreign exchange for the importation of urea and
formaldehde I .hich are the main ra. materials in the production of said glues I and paid
therefor the aforementioned margin fee aggregating $,,,')(.2*. In Aa, 01)7, petitioner
made another purchase of foreign exchange and paid the sum of $),,2(.'* as margin fee
$rior thereto, petitioner had sought the refund of the first sum of $,,,')(.2*, reling upon
#esolution +o. 0(*1 of the Aonetar 5oard of said 5an/, dated +ovem&er ,, 01(1, declaring
that the separate importation of urea and formaldehde is exempt from said fee. Soon after the
last importation of these products, petitioner made a similar re:uest for refund of the sum of
$),,2(.'* paid as margin fee therefor. Although the Central 5an/ issued the corresponding
margin fee vouchers for the refund of said amounts, the Auditor of the 5an/ refused to pass in
audit and approve said vouchers, upon the ground that the exemption granted & the Aonetar
5oard for petitioner's separate importations of urea and formaldehde is not in accord .ith the
provisions of section *, paragraph ?"III of #epu&lic Act +o. *)71. On appeal ta/en &
petitioner, the Auditor Deneral su&se:uentl affirmed said action of the Auditor of the 5an/.
Cence, this petition for revie..
The onl :uestion for determination in this case is .hether or not 9urea9 and 9formaldehde9
are exempt & la. from the pament of the aforesaid margin fee. The pertinent portion of
Section * of #epu&lic Act +o. *)71 reads8
The margin esta&lished & the Aonetar 5oard pursuant to the provision of section
one hereof shall not &e imposed upon the sale of foreign exchange for the
importation of the follo.ing8.
x x x x x x x x x
?"III. 6rea formaldehde for the manufacture of pl.ood and hard&oard .hen
imported & and for the exclusive use of end!users.
Gherefore, the parties respectfull pra that the foregoing stipulation of facts &e
admitted and approved & this Conora&le Court, .ithout pre@udice to the parties
adducing other evidence to prove their case not covered & this stipulation of
facts. 1E?phF1.GHt
$etitioner maintains that the term 9urea formaldehde9 appearing in this provision should &e
construed as 9ureaand formaldehde9 (emphasis supplied% and that respondents herein, the
Auditor Deneral and the Auditor of the Central 5an/, have erred in holding other.ise. In this
connection, it should &e noted that, .hereas 9urea9 and 9formaldehde9 are the principal ra.
materials in the manufacture of snthetic resin glues, the +ational Institute of Science and
Technolog has expressed, through its Commissioner, the vie. that8
6rea formaldehde is not a chemical solution. It is the snthetic resin formed as a
condensation product from definite proportions of urea and formaldehde under
certain conditions relating to temperature, acidit, and time of reaction. This produce
.hen applied in .ater solution and extended .ith inexpensive fillers constitutes a
fairl lo. cost adhesive for use in the manufacture of pl.ood.
Cence, 9urea formaldehde9 is clearl a finished product, .hich is patentl distinct and
different from urea9 and 9formaldehde9, as separate articles used in the manufacture of the
snthetic resin /no.n as 9urea formaldehde9. $etitioner contends, ho.ever, that the &ill
approved in Congress contained the copulative con@unction 9and9 &et.een the terms 9urea9
and 9formaldehde9, and that the mem&ers of Congress intended to exempt 9urea9 and
9formaldehde9 separatel as essential elements in the manufacture of the snthetic resin glue
called 9urea9 formaldehde9, not the latter as a finished product, citing in support of this vie.
the statements made on the floor of the Senate, during the consideration of the &ill &efore said
Couse, & mem&ers thereof. 5ut, said individual statements do not necessaril reflect the
vie. of the Senate. Auch less do the indicate the intent of the Couse of #epresentatives (see
Song Liat Chocolate <actor vs. Central 5an/, (2 Off. DaF., )0(= Aaon Aotors Inc. vs.
Acting Commissioner of Internal #evenue, 4!0(777 MAarch *1, 01)0N= Aanila Boc/e Clu&,
Inc. vs. Dames ; Amusement 5oard, 4!0*'*' M<e&ruar *1, 01)7N%. <urthermore, it is .ell
settled that the enrolled &ill I .hich uses the term 9urea formaldehde9 instead of 9urea and
formaldehde9 I is conclusive upon the courts as regards the tenor of the measure passed &
Congress and approved & the $resident ($rimicias vs. $aredes, )0 $hil. 00-, 0*7= Aa&anag
vs. 4opeF "ito, '- $hil. 0= Aacias vs. Comm. on Elections, 4!0-)-2, Septem&er 02, 01)0%. If
there has &een an mista/e in the printing ofthe &ill &efore it .as certified & the officers of
Congress and approved & the Executive I on .hich .e cannot speculate, .ithout
@eopardiFing the principle of separation of po.ers and undermining one of the cornerstones of
our democratic sstem I the remed is & amendment or curative legislation, not & @udicial
GCE#E<O#E, the decision appealed from is here& affirmed, .ith costs against the
petitioner. It is so ordered.