Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-22619 December 2, 1924
NATIONAL COAL COMPANY, plaintif-appellee,
vs.
TE COLLECTOR O! INTERNAL RE"ENUE, defendant-
appellant.
Attorney-General Villa-Real for appellant.
Perfecto J. Salas Rodriguez for appellee.
#ONSON, J.:
This action was bou!ht in the Cout of "ist #nstance of the Cit$
of Manila on the %&th da$ of 'ul$, %()*, fo the pupose of
ecovein! the su+ of P%),,--../, alle!ed to have been paid
unde potest b$ the plaintif co+pan$ to the defendant, as
speci0c ta1 on )-,,/(.* tons of coal. 2aid co+pan$ is a
copoation ceated b$ Act No. )&,3 of the Philippine 4e!islatue
fo the pupose of developin! the coal indust$ in the Philippine
#slands and is actuall$ en!a!ed in coal +inin! on eseved lands
belon!in! to the 5oven+ent. #t clai+ed e1e+ption fo+ ta1es
unde the povision of sections %- and %3 of Act No. )&%(, and
pa$ed fo a 6ud!+ent odein! the defendant to efund to the
plaintif said su+ of P%),,--../, with le!al inteest fo+ the date
of the pesentation of the co+plaint, and costs a!ainst the
defendant.
The defendant answeed den$in! !eneall$ and speci0call$ all
the +ateial alle!ations of the co+plaint, e1cept the le!al
e1istence and pesonalit$ of the plaintif. As a special defense,
the defendant alle!ed 7a8 that the su+ of P%),,--../ was paid b$
the plaintif without potests, and 7b8 that said su+ was due and
owin! fo+ the plaintif to the 5oven+ent of the Philippine
#slands unde the povisions of section %-(. of the Ad+inistative
Code and pa$ed that the co+plaint be dis+issed, with costs
a!ainst the plaintif.
9pon the issue thus pesented, the case was bou!ht on fo tial.
Afte a consideation of the evidence adduced b$ both paties,
the :onoable Pedo Conception, 6ud!e, held that the wods
;lands owned b$ an$ peson, etc.,; in section %3 of Act No. )&%(
should be undestood to +ean ;lands held in lease o usufuct,;
in ha+on$ with the othe povision of said Act< that the coal
lands possessed b$ the plaintif, belon!in! to the 5oven+ent,
fell within the povisions of section %3 of Act No. )&%(< and that a
ta1 of P,.,- pe ton of %,,%. =ilos on each ton of coal e1tacted
theefo+, as povided in said section, was the onl$ ta1 which
should be collected fo+ the plaintif< and sentenced the
defendant to efund to the plaintif the su+ of P%%,,/%.%% which
is the difeence between the a+ount collected unde section
%-(. of the Ad+inistative Code and the a+ount which should
have been collected unde the povisions of said section %3 of Act
No. )&%(. "o+ that sentence the defendant appealed, and now
+a=es the followin! assi!n+ents of eo>
#. The cout below eed in holdin! that section %3 of Act No. )&%(
does not efe to coal lands owned b$ pesons and copoations.
##. The cout below eed in holdin! that the plaintif was not
sub6ect to the ta1 pescibed in section %-(. of the
Ad+inistative Code.
The ?uestion confontin! us in this appeal is whethe the plaintif
is sub6ect to the ta1es unde section %3 of Act No. )&%(, o to the
speci0c ta1es unde section %-(. of the Ad+inistative Code.
The plaintif copoation was ceated on the %,th da$ of Mach,
%(%&, b$ Act No. )&,3, fo the pupose of developin! the coal
indust$ in the Philippine #sland, in ha+on$ with the !eneal plan
of the 5oven+ent to encoua!e the develop+ent of the natual
esouces of the count$, and to povided facilities theefo. B$
said Act, the co+pan$ was !anted the !eneal powes of a
copoation ;and such othe powes as +a$ be necessa$ to
enable it to posecute the business of developin! coal deposits in
the Philippine #sland and of +inin!, e1tactin!, tanspotin! and
sellin! the coal contained in said deposits.; 72ec. ), Act No.
)&,3.8 B$ the sa+e law 7Act No. )&,38 the 5oven+ent of the
Philippine #slands is +ade the +a6oit$ stoc=holde, evidentl$ in
ode to insue pope !oven+ent supevision and contol, and
thus to place the 5oven+ent in a position to ende all possible
encoua!e+ent, assistance and help in the posecution and
futheance of the co+pan$@s business.
An Ma$ %-, %(%&, two +onths afte the passa!e of Act No. )&,3,
ceatin! the National Coal Co+pan$, the Philippine 4e!islatue
passed Act No. )&%( ;to povide fo the leasing and
development of coal lands in the Philippine #slands.; An Actobe
%/, %(%&, upon petition of the National Coal Co+pan$, the
5oveno-5eneal, b$ Pocla+ation No. *(, withdew ;fo+
settle+ent, ent$, sale o othe disposition, all coal-beain! public
lands within the Povince of Ba+boan!a, Cepat+ent of
Mindanao and 2ulu, and the #sland of Polillo, Povince of
Ta$abas.; Al+ost i++ediatel$ afte the issuance of said
pocla+ation the National Coal Co+pan$ too= possession of the
coal lands within the said esevation, with an aea of about -,,
hectaes, without an$ futhe fo+alit$, contact o lease. Af the
*,,,,, shaes of stoc= issued b$ the co+pan$, the 5oven+ent
of the Philippine #slands is the owne of )(,/,( shaes, that is, of
(( %D* pe centu+ of the whole capital stoc=.
#f we undestand the theo$ of the plaintif-appellee, it is, that it
clai+s to be the owne of the land fo+ which it has +ined the
coal in ?uestion and is theefoe sub6ect to the povisions of
section %3 of Act No. )&%( and not to the povisions of the
section %-(. of the Ad+inistative Code. That contention of the
plaintif leads us to an e1a+ination of the evidence upon the
?uestion of the owneship of the land fo+ which the coal in
?uestion was +ined. Eas the plaintif the owne of the land fo+
which the coal in ?uestion was +inedF #f the evidence shows the
aG+ative, then the 6ud!+ent should be aG+ed. #f the
evidence shows that the land does not belon! to the plaintif,
then the 6ud!+ent should be evesed, unless the plaintif@s
i!hts fall unde section * of said Act.
The onl$ witness pesented b$ the plaintif upon the ?uestion of
the owneship of the land in ?uestion was M. Cal+acio Costas,
who stated that he was a +e+be of the boad of diectos of the
plaintif copoation< that the plaintif copoation too= possession
of the land in ?uestion b$ vitue of the pocla+ation of the
5oveno-5eneal, =nown as Pocla+ation No. *( of the $ea
%(%&< that no docu+ent had been issued in favo of the plaintif
copoation< that said copoation had eceived no pe+ission
fo+ the 2eceta$ of A!icultue and Natual Resouces< that it
too= possession of said lands covein! an aea of about -,,
hectaes, fo+ which the coal in ?uestion was +ined, solel$, b$
vitue of said pocla+ation 7E1hibit B, No. *(8.
2aid pocla+ation 7E1hibit B8 was issued b$ "ancis Buton
:aison, then 5oveno-5eneal, on the %/th da$ of Actobe,
%(%&, and povided> ;Pusuant to the povision of section &% of
Act No. ()., # heeb$ withdaw fo+ settle+ent, ent$, sale, o
othe disposition, all coal-beain! public lands within the Povince
of Ba+boan!a, Cepat+ent of Mindanao and 2ulu, and the #sland
of Polillo, Povince of Ta$abas.; #t will be noted that said
pocla+ation onl$ povided that all coal-beain! public lands
within said povince and island should be withdawn fo+
settle+ent, ent$, sale, o othe disposition. Thee is nothin! in
said pocla+ation which authoiHes the plaintif o an$ othe
peson to ente upon said evesations and to +ine coal, and no
povision of law has been called to ou attention, b$ vitue of
which the plaintif was entitled to ente upon an$ of the lands so
eseved b$ said pocla+ation without 0st obtainin! pe+ission
theefo.
The plaintif is a pivate copoation. The +ee fact that the
5oven+ent happens to the +a6oit$ stoc=holde does not +a=e
it a public copoation. Act No. )&,3, as a+ended b$ Act No.
)/)), +a=es it sub6ect to all of the povisions of the Copoation
4aw, in so fa as the$ ae not inconsistent with said Act 7No.
)&,38. No povisions of Act No. )&,3 ae found to be inconsistent
with the povisions of the Copoation 4aw. As a pivate
copoation, it has no !eate i!hts, powes o pivile!es than
an$ othe copoation which +i!ht be o!aniHed fo the sa+e
pupose unde the Copoation 4aw, and cetainl$ it was not the
intention of the 4e!islatue to !ive it a pefeence o i!ht o
pivile!e ove othe le!iti+ate pivate copoations in the +inin!
of coal. Ehile it is tue that said pocla+ation No. *( withdew
;fo+ settle+ent, ent$, sale, o othe disposition of coal-beain!
public lands within the Povince of Ba+boan!a . . . and the #sland
of Polillo,; it +ade no povision fo the occupation and opeation
b$ the plaintif, to the e1clusion of othe pesons o copoations
who +i!ht, unde pope pe+ission, ente upon the opeate coal
+ines.
An the %-th da$ of Ma$, %(%&, and befoe the issuance of said
pocla+ation, the 4e!islatue of the Philippine #sland in ;an Act
fo the leasin! and develop+ent of coal lands in the Philippine
#slands; 7Act No. )&%(8, +ade libeal povision. 2ection % of said
Act povides> ;Coal-beain! lands of the public do+ain in the
Philippine #sland shall not be disposed of in an$ +anne e1cept as
povided in this Act,; theeb$ !ivin! a clea indication that no
;coal-beain! lands of the public do+ain; had been disposed of
b$ vitue of said pocla+ation.
Neithe is thee an$ povision in Act No. )&,3 ceatin! the
National Coal Co+pan$, no in the a+end+ents theeof found in
Act No. )/)), which authoiHes the National Coal Co+pan$ to
ente upon an$ of the eseved coal lands without 0st havin!
obtained pe+ission fo+ the 2eceta$ of A!icultue and
Natual Resouces.lawphi.net
The followin! popositions ae full$ sustained b$ the facts and the
law>
7%8 The National Coal Co+pan$ is an odina$ pivate copoation
o!aniHed unde Act No. )&,3, and has no !eate powes no
pivile!es than the odina$ pivate copoation, e1cept those
+entioned, pehaps, in section %, of Act No. )&%(, and the$ do
not chan!e the situation hee.
7)8 #t +ined on public lands between the +onth of 'ul$, %(),, and
the +onths of Mach, %()), )-,,/(.* tons of coal.
7*8 9pon de+and of the Collecto of #ntenal Revenue it paid a
ta1 of P,.3, a ton, as ta1es unde the povisions of aticle %(-.
of the Ad+inistative Code on the %3th da$ of Cece+be, %()).
7-8 #t is ad+itted that it is neithe the owne no the lessee of the
lands upon which said coal was +ined.
738 The pocla+ation of "ancis Buton :aison, 5oveno-
5eneal, of the %/th da$ of Actobe, %(%&, b$ authoit$ of section
% of Act No. ()., withdawin! fo+ settle+ent, ent$, sale, o
othe dispositon all coal-beain! public lands within the Povince
of Ba+boan!a and the #sland of Polillo, was not a esevation fo
the bene0t of the National Coal Co+pan$, but fo an$ peson o
copoation of the Philippine #slands o of the 9nited 2tates.
7.8 That the National Coal Co+pan$ enteed upon said land and
+ined said coal, so fa as the ecod shows, without an$ lease o
othe authoit$ fo+ eithe the 2eceta$ of A!icultue and
Natual Resouces o an$ peson havin! the powe to !ant a
leave o authoit$.
"o+ all of the foe!oin! facts we 0nd that the issue is well
de0ned between the plaintif and the defendant. The plaintif
contends that it was liable onl$ to pa$ the intenal evenue and
othe fees and ta1es povided fo unde section %3 of Act No.
)&%(< while the defendant contends, unde the facts of ecod,
the plaintif is obli!ed to pa$ the intenal evenue dut$ povided
fo in section %-(. of the Ad+inistative Code. That bein! the
issue, an e1a+ination of the povisions of Act No. )&%( beco+es
necessa$.
An e1a+ination of said Act 7No. )&%(8 discloses the followin!
facts i+potant fo consideation hee>
"ist. All ;coal-beain! lands of the public do+ain in the Philippine
#slands shall not be disposed of in an$ +anne e1cept as
povided in this Act.; 2econd. Povisions fo leasin! b$ the
2eceta$ of A!icultue and Natual Resouces of ;uneseved,
unappopiated coal-beain! public lands,; and the obli!ation to
the 5oven+ent which shall be i+posed b$ said 2eceta$ upon
the lessee.lawphi.net
Thid. The intenal evenue dut$ and ta1 which +ust be paid
upon coal-beain! lands owned b$ an$ peson, 0+, association
o copoation.
To epeat, it will be noted, 0st, that Act No. )&%( povides an
intenal evenue dut$ and ta1 upon uneseved, unappopiated
coal-beain! public lands which +a$ be leased b$ the 2eceta$
of A!icultue and Natual Resouces< and, second, that said Act
7No. )&%(8 povides an intenal evenue dut$ and ta1 i+posed
upon an$ peson, 0+, association o copoation, who +a$ be
the owne of ;coal-beain! lands.; A eadin! of said Act cleal$
shows that the ta1 i+posed theeb$ is i+posed upon two classes
of pesons onl$ I lessees and ownes.
The lowe cout had so+e touble in dete+inin! what was the
coect intepetation of section %3 of said Act, b$ eason of what
he believed to be so+e difeence in the intepetation of the
lan!ua!e used in 2panish and En!lish. Ehile thee is so+e
!ound fo confusion in the use of the lan!ua!e in 2panish and
En!lish, we ae pesuaded, considein! all the povisions of said
Act, that said section %3 has efeence onl$ to pesons, 0+s,
associations o copoations which had alead$, pio to the
e1istence of said Act, beco+e the ownes of coal lands. 2ection
%3 cannot cetaint$ efe to ;holdes o lessees of coal lands@ fo
the eason that pacticall$ all of the othe povisions of said Act
has efeence to lessees o holdes. #f section %3 +eans that the
pesons, 0+s, associations, o copoation +entioned theein
ae holdes o lessees of coal lands onl$, it is diGcult to
undestand wh$ the intenal evenue dut$ and ta1 in said section
was +ade difeent fo+ the obli!ations +entioned in section *
of said Act, i+posed upon lessees o holdes.
"o+ all of the foe!oin!, it see+s to be +ade plain that the
plaintif is neithe a lessee no an owne of coal-beain! lands,
and is, theefoe, not sub6ect to an$ othe povisions of Act No.
)&%(. But, is the plaintif sub6ect to the povisions of section %-(.
of the Ad+inistative CodeF
2ection %-(. of the Ad+inistative Code povides that ;on all coal
and co=e thee shall be collected, pe +etic ton, 0ft$ centavos.;
2aid section 7%-(.8 is a pat of aticle, . which povides fo
speci0c ta1es. 2aid aticle povides fo a speci0c intenal evenue
ta1 upon all thin!s +anufactued o poduced in the Philippine
#slands fo do+estic sale o consu+ption, and upon thin!s
i+poted fo+ the 9nited 2tates o foei!n counties. #t havin!
been de+onstated that the plaintif has poduced coal in the
Philippine #slands and is not a lessee o owne of the land fo+
which the coal was poduced, we ae cleal$ of the opinion, and
so hold, that it is sub6ect to pa$ the intenal evenue ta1 unde
the povisions of section %-(. of the Ad+inistative Code, and is
not sub6ect to the pa$+ent of the intenal evenue ta1 unde
section %3 of Act No. )&%(, no to an$ othe povisions of said
Act.
Theefoe, the 6ud!+ent appealed fo+ is heeb$ evo=ed, and
the defendant is heeb$ elieved fo+ all esponsibilit$ unde the
co+plaint. And, without an$ 0ndin! as to costs, it is so odeed.
Street! "alcolm! Avance#a! Villamor! $strand and Romualdez! JJ.!
concur.