POWER GENERATION EMPLOYEES ASSOCIATION-NPC v.

NATIONAL POWER
CORPORATION, GR No. 187420, 2017-08-09
Facts:
This is a Petition for Injunction with prayer for the issuance of a temporary restraining order
and/or writ of preliminary injunction [2] under Section 78 of EPIRA. This is filed by the
Power Generation Employees Association-National Power Corporation (PGEA-NPC), Alvin
O. Borja, Robert S. Mamauag, Romeo B. de Mesa, Jr., Kenneth M. Susarno, Manuel R.
Cabello, Nestor A. Panaligan, Arnel A. Casimiro, and Jaime C. Garganera (petitioners)
against the National Power Corporation (NAPOCOR), the Power Sector Assets and
Liabilities Management (PSALM), and their respective Boards of Directors. Petitioners ask
this Court to permanently enjoin the implementation of the Operation and Maintenance
Agreement jointly executed by NAPOCOR and PSALM, and to declare this Agreement void
for being contrary to EPIRA
On June 8, 2001, Republic Act No. 9136 or EPIRA was signed into law. Among its reforms
was the privatization of NAPOCOR assets.[4] Pursuant to this objective, PSALM was
created "to manage the orderly sale, disposition, and privatization of [NAPOCOR]'s
generation assets, real estate and other disposable assets, and [Independent Power
Producer] contracts with the objective of liquidating all [NAPOCOR] financial obligations and
stranded contract costs in an optimal manner."[5]Sometime in 2008, PSALM drafted the
Operation and Maintenance Agreement [6] for NAPOCOR's acceptance.[7] The contract
provided that NAPOCOR would perform "all functions and services necessary to
successfully and efficiently operate, maintain, and manage"[8] power plants, generation
assets, or facilities until its transfer or turnover to PSALM. It further provided that
NAPOCOR must submit its proposed budget to PSALM for review and approval.[9] All
revenues related to the maintenance and operation of power plants, generation assets, or
facilities would be considered as PSALM's properties.[10]
Petitioners argue that while EPIRA authorizes PSALM to take ownership of NAPOCOR's
generation assets, liabilities, Independent Power Producer (IPP) contracts, real estate, and
disposable assets, its ownership should be based on its mandate to privatize NAPOCOR's
assets and to liquidate its liabilities. They submit that EPIRA did not authorize PSALM to
enter into the Operation and Maintenance Agreement with NAPOCOR.[32]
Petitioners argue that the Operation and Maintenance Agreement "is a clear display of [the]
arrogance of PSALM."[33] They maintain that PSALM merely holds NAPOCOR's assets as
its "naked owner for the purposes of disposing [these assets] and use the proceeds thereof
to liquidate [NAPOCOR's] liabilities."[34] They assert that since EPIRA did not give PSALM
the authority to generate and sell electricity, it should not have entered into the Operation
and Maintenance Agreement over the sale of the "undisposed generation assets."[35]
Petitioners further hold that the remittance of NAPOCOR's revenues to PSALM violates
EPIRA since Section 55 of EPIRA and Section ll(a)(i) of its Implementing Rules and
Regulations mandate that only the net profits shall be owned by PSALM.[36]
PSALM.Petitioners likewise assert that EPIRA did not grant PSALM the power to control
and supervise the internal operations of NAPOCOR. Thus, they argue that the provision in
the Operation and Maintenance Agreement requiring NAPOCOR to submit its proposed
budget to PSALM violates EPIRA since NAPOCOR's Charter grants the NAPOCOR Board
of Directors the authority to adopt a budget without prior approval from PSALM.[38]
Issues:
I. Whether petitioners may file a Petition for Injunction under Section 78 of EPIRA to
question the validity of the Operation and Maintenance Agreement between respondents
PSALM and NAPOCOR;
II. Whether petitioners may question the validity of the Operation and Maintenance
Agreement despite not being one (1) of the contracting parties; and
III. Whether the Operation and Maintenance Agreement violated the provisions of EPIRA
when it mandated the remittance of NAPOCOR's revenues to PSALM and when it required
NAPOCOR to submit its proposed budget to PSALM for approval.
Ruling:
I
This Court explained in NPC Drivers and Mechanics Association v. National Power
Corporation:[54]The provision vests upon the Supreme Court the jurisdiction to restrain or
enjoin the implementation of the provisions of the EPIRA. In other words, the Court
exercises jurisdiction on all questions involving the enforcement of the provisions of the
EPIRA.[55]
The Operation and Maintenance Agreement is a contract that preserves the implementation
of EPIRA. Thus, it is covered by Section 78. Under this provision, no restraint or injunction
whether permanent or temporary, could be issued by any court except by this Court.
The injunction contemplated in EPIRA is not a mere interlocutory action by a court but a
permanent remedy. Thus, Section 78 of EPIRA can still apply to this case.
II
Petitioners, not being privy to the Operation and Maintenance Agreement, have no cause of
action against respondents. They are not the real parties in interest to question its validity.
To issue an injunctive writ, the applicant must establish his or her right sought to be
protected. Petitioners allege that while they were not privy to the Operation and
Maintenance Agreement, they will be affected by its implementation as NAPOCOR
employees since they are "the ones engaged in the operations and maintenance of the
unsold generation plants."[62]The Petition, however, fails to show how NAPOCOR
employees will be affected by the Operation and Maintenance Agreement's implementation.
III
The assailed provisions of the Operation and Maintenance Agreement do not contravene
the provisions of EPIRA.
As a corporation operating a necessary public utility, NAPOCOR continues to function in the
course of its privatization. Under EPIRA, PSALM was given ownership over the generating
assets but was not granted functions to operate these assets. Thus, it entered into the
Operation and Maintenance Agreement with NAPOCOR to ensure NAPOCOR's continued
operations.
Citing Section 55(e) of EPIRA, petitioners argue that PSALM was only given ownership of
NAPOCOR's net profits,[69] and not of its revenues. Petitioners further cite Rule 21, Section
11(a)(i) of EPIRA's Implementing Rules and Regulations to reinforce their argument that
only net profits were transferred to PSALM.
This Court has previously stated that: EPIRA must not be read in separate parts [but] must
be read in its entirety, because a statute is passed as a whole, and is animated by one
general purpose and intent. Its meaning cannot to be extracted from any single part thereof
but from a general consideration of the statute as a whole.
The enumeration of assets must be read together with the extent of PSALM's ownership
over them. Section 49 of EPIRA provides that PSALM "shall take ownership of all existing
NPC generation assets, liabilities, IPP contracts, real estate and all other disposable
assets." This implies that PSALM exercises all the rights of an owner, albeit for a limited
purpose: the conservation and liquidation of these assets.
Among the attributes of ownership are that of the right to possess or enjoy (jus utendi), the
right to the fruits (jus fruendi), the right to abuse or consume (jus abutendi), the right to
dispose or alienate (jus disponendi), and the right to recover (jus vindicandi).[74]
Under the law, respondent PSALM exercises all attributes of ownership over respondent
NAPOCOR's generation assets, including the right to operate these assets if the operation
prevents its dissipation. PSALM was given a lifespan of 25 years, during which it would
have ownership over all of NAPOCOR's generation assets. PSALM, thus, has right over all
the fruits produced by the assets including its revenues.
Petitioners quote a letter written by one (1) of EPIRA's authors arguing that the law did not
intend for respondent PSALM to exercise full ownership rights over respondent
NAPOCOR's generation assets.
Petitioners are reminded that this statement is a mere expression of an opinion by a
representative of Congress. It does not reflect the intent of both the House of
Representatives and the Senate, the chambers that actually passed the bill into law.
In the interpretation of laws, courts must ascertain the legislative intent and give it effect.[78]
Legislative intent is determined from the law itself, where each and every provision is
considered in light of the purpose to which it was enacted.[79] The interpretation of laws is
inherently a judicial function, such that this Court's application and interpretation of laws
becomes part of the law of the land.[80] Thus, a legislator's opinion, be it stated in a letter or
expressed during the deliberations of a bill, is not binding on courts.[81]

The Petition is not only procedurally infirm; it also failed to substantiate how the
implementation of the assailed Operation and Maintenance Agreement between
respondents contravenes respondent PSALM's mandate under EPIRA.WHEREFORE, the
Petition is DISMISSED for lack of merit.
COMMISSIONER OF CUSTOMS v. ESSO STANDARD EASTERN, GR No. L-28329,
1975-08-07
Facts:
Appeal from the decision of the Court of Tax Appeals reversing the Commissioner of
Customs' decision holding respondent ESSO Standard Eastern, Inc.,... liable in the... total
sum of P775.62 as special import tax on certain articles imported by the latter under
Republic Act No. 387, otherwise known as the Petroleum Act of 1949.
Respondent ESSO is the holder of Refining Concession No. 2... and operates a petroleum
refining plant in Limay, Bataan.  Under Article 103 of Republic Act No. 387 which provides: 
"During... the five years following the granting of any concession, the concessionaire may
import free of customs duty, all equipment, machinery, material, instruments, supplies and
accessories," respondent imported and was assessed the special import tax (which it paid
under protest)
The Collector of Customs on February 16, 1962, held that respondent ESSO was subject to
the payment of the special import tax provided in Republic Act No. 1394, as amended by
R.A. No. 2352, and dismissed the protests.
On March 1, 1962, respondent appealed the ruling of the Collector of Customs to the
Commissioner of Customs who, on March 19, 1965, affirmed the decision of said Collector
of Customs.
On July 2, 1965, respondent ESSO filed a petition with the Court of Tax Appeals for review
of the decision of the Commissioner of Customs.
The Court of Tax Appeals, on September 30, 1967, reversed the decision of herein
petitioner Commissioner of Customs and ordered refund of the amount of P775.62 to
respondent ESSO which the later had paid under protest.[4]
Petitioner contends that the special import tax under Republic Act No. 1394 is separate and
distinct from the customs duty prescribed by the Tariff and Customs Code, and that the
exemption enjoyed by respondent ESSO from the payment of customs duties under the
Petroleum Act of 1949 does include exemption from the payment of the special import tax
provided in R.A. No. 1394.
Issues:
Whether or not the exemption enjoyed by herein private respondent Standard Eastern, Inc.
from customs duties granted by Republic Act No. 387, or the Petroleum Act of 1949, should
embrace or include the special import tax... imposed by R.A. No. 1394, or the Special
Import Tax Law.
Ruling:
It is a well-accepted principle that where a statute is ambiguous, as Republic Act No. 1394
appears to be, courts may examine both the printed pages of the published Act as well as
those extrinsic matters that may aid in construing the meaning of the statute, such as the
history... of its enactment, the reasons for the passage of the bill and purposes to be
accomplished by the measure.
The title of Republic Act No. 387 and the provisions of its three articles just cited give a clue
to the intent of the Philippine legislature, which is to encourage the exploitation and
development of the petroleum resources of the country.  Through the instrumentality of...
said law, it declared in no uncertain terms that the intensification of the exploration for
petroleum must be carried on unflinchingly even if, for the time being, no taxes, both
national and local, may be collected from the industry.  This is the unequivocal intention of...
the Philippine Congress when the language of the Petroleum Act is examined.  Until this law
or any substantial portion thereof is clearly amended or repealed by subsequent statutes,
the intention of the legislature must be upheld.
Against this unambiguous language of R.A. No. 387, there is the subsequent legislation,
R.A. No. 1394, the Special Import Tax Law, which, according to the herein petitioner, shows
that the legislature considered the special import tax as a tax distinct from customs duties.
Republic Act No. 1394 repealed and revoked six earlier statutes which had something to do
with the imposition of special levies and/or exemption of certain importations from the
burden of the special import taxes or... levies.  On the other hand, it is apparent that R.A.
No. 387, the Petroleum Act, had been spared from the pruning knife of Congress, although
this latter law had granted more concessions and tax-exemption privileges than any of the
statutes that were amended, repealed or... revoked by R.A. No. 1394.  The answer must be
that the Congress of the Philippines saw fit to preserve the privileges granted under the
Petroleum Law of 1949 in order to keep the door open to the exploitation and development
of the petroleum resources of the country with... such incentives as are given under that
law.
Having this in mind, particularly the manner in which extrinsic aids, the history of the
enactment of the statute and purpose of the legislature in employing a clause or provision in
the law had been applied in determining the true intent of the lawmaking body, We are
convinced... that R.A. No. 387, The Petroleum Act of 1949, was intended to encourage the
exploitation, exploration and development of the petroleum resources of the country by
giving it the necessary incentive in the form of tax exemptions.  This is the raison d'etre for
the... generous grant of tax exemptions to those who would invest their financial resources
towards the achievement of this national economic goal.
On the contention of herein petitioner that the exemptions enjoyed by respondent ESSO
under R.A. No. 387 have been abrogated by R.A. No. 1394, We hold that repeal by
implication is not favored unless it is manifest that the legislature so intended.  As laws are
presumed to... be passed with deliberation and with full knowledge of all existing ones on
the subject, it is logical to conclude that in passing a statute it was not intended to interfere
with or abrogate any former law relating to the same matter, unless the repugnancy
between the two is not... only irreconcilable but also clear and convincing as a result of the
language used, or unless the latter act fully embraces the subject matter of the earlier.
As observed earlier, Congress lined up for revocation by Republic Act No. 1394 six statutes
dealing with the imposition of special imposts or levies or the granting of exemptions from
special import taxes.  Yet, considering the tremendous amount of revenues it was losing...
under the Petroleum Law of 1949, it failed to include the latter statute among those it chose
to bury by the Special Import Tax Law.  The reason for this is very clear:  The legislature
wanted to continue the incentives for the continuing development of the petroleum...
industry.
It is not amiss to mention here in passing that contrary to the theory of the herein petitioner,
R.A. No. 387 had not been repealed by R.A. No. 2352 which expressly abrogated Section 6
of R.A. No. 1394 but did not repeal any part of R.A. No. 387.  Therefore, the exemption...
granted by Republic Act No. 387 still stands.
WHEREFORE, taking into consideration the weight given by this Court to the findings and
conclusions of the Court of Tax Appeals on a matter it is well-equipped to handle, which
findings and conclusions We find no reason to overturn, the petition of the Commissioner of
Customs to... reverse the decision of the Court of Tax Appeals should be, as it is hereby,
denied.
Principles:
In order to determine the true intent of the legislature, the particular clauses and phrases of
the statute should not be taken as detached and isolated expressions, but the whole and
every part thereof must be considered in fixing the meaning of any of its parts.   In fact...
every statute should receive such construction as will make it harmonize with the pre-
existing body of laws.  Antagonism between the Act to be interpreted and existing or
previous laws is to be avoided, unless it was clearly the intention of the legislature that
such... antagonism should arise and one amends or repeals the other, either expressly or
by implication.
Another rule applied by this Court is that the courts may take judicial notice of the origin and
history of the statutes which they are called upon to construe and administer, and of facts
which affect their derivation, validity and operation.

FORTUNATO R. BARON v. EPE TRANSPORT, GR No. 202645, 2015-08-05

Facts:
Respondent EPE Transport Corporation, Inc. (EPE) is a domestic corporation engaged in
the operation of taxi units. Petitioners were employed[7] as EPE's taxi drivers and were paid
on boundary system. They were members of the EPE Transport, Inc. Drivers' Union-
Filipinong Samahang Manggagawa (FSM), the exclusive bargaining agent of the taxi drivers
in EPE.[8]
Sometime in August 2008, Bersabal sought inquiry from the company regarding the
boundary rates imposed, claiming that the same were not in accordance with the Collective
Bargaining Agreement (CBA).[9] Instead of clarifying the matter, Bersabal was... purportedly
told that he was free to go if he did not want to follow company policy, and that anyway, he
has no more use to the company.[10] As a result, Bersabal, together with the other EPE's
taxi drivers, filed on August 8, 2008, a complaint[11] for violation of the CBA, unfair labor
practice, refund of overcharged boundary, and money claims against EPE, and its
President, Ernesto P. Enriquez (respondents), docketed as NLRC Case No. NCR-08-
11284-08 (CBA violation case).[12]
Later in September 2008, Baron and Melendres equally questioned the company about the
overcharging of boundary, for which they supposedly got the same response. Thus, they
filed a complaint [13] for unfair labor practice, refund of overcharged boundary, and...
attorney's fees against respondents, docketed as NLRC Case No. NCR-09-13285-08
(unfair labor practice case)[14] Three (3) days after, or on September 26, 2008, Baron
claimed that he was no longer allowed to use his taxi unit and prevented from... entering
EPE's premises. Melendres and Bersabal allegedly suffered a similar fate on September
28, 2008 and October 1, 2008, respectively.[15] Consequently, petitioners filed on October
6, 2008, another complaint,[16] this time for... illegal dismissal, unfair labor practice,
separation pay, and attorney's fees, against respondents, docketed as NLRC Case No.
NCR-10-13893-08 (illegal dismissal case).
The LA Ruling
In a Decision[22] dated March 20, 2009, the LA dismissed petitioners' illegal dismissal case
for lack of jurisdiction over the subject matter and lack of cause of action. The LA gave more
credence to respondents' claim that it was petitioners who failed to... return to work after
they filed their respective complaints, noting that the latter had even invoked the use of the
CBA's grievance machinery for the resolution of their dispute, hence, could not have been
dismissed... petitioners appealed[25] to the NLRC, docketed as NLRC LAC Case No. 05-
001320-09.
The NLRC Ruling
In a Decision[26] dated March 9, 2010, the NLRC reversed and set aside the LA's Decision
and found petitioners to have been illegally dismissed.
The NLRC rejected respondents' defense that petitioners went on AWOL or had abandoned
their work, holding that no evidence was presented to show that the latter were directed to
report back for work.[28] It added that the intent to abandon... work was negated by the
filing of petitioners' previous complaints[29] to correct what they perceived were errors in
the administration of the CBA, rationalizing that an employee who takes steps to protest his
lay off cannot be said to have abandoned his... work.
Respondents' motion for reconsideration[33] was denied in a Resolution[34] dated June 21,
2010; thus, they elevated the matter to the CA on certiorari
The CA Ruling
In a Decision[36] dated March 30, 2012, the CA set aside the NLRC's March 9, 2010
Decision and reinstated the LA's March 20, 2009 Decision.
The CA concurred with the LA that petitioners' complaint in the illegal dismissal case failed
to sufficiently establish the fact of their dismissal
Dissatisfied, petitioners' moved for reconsideration[40] which was, however, denied in a
Resolution[41] dated July 11, 2012; hence, this petition.
Issues:
Whether or not the CA erred in ruling that the NLRC gravely abused its discretion in finding
petitioners to have been illegally dismissed.
Ruling:
The Court finds that the CA committed reversible error in granting respondents' certiorari
petition since the NLRC did not gravely abuse its discretion in finding petitioners to have
been illegally dismissed. The NLRC's ruling cannot... be equated to a capricious and
whimsical exercise of judgment since its pronouncement of illegal dismissal squares with
existing legal principles.
All told, since petitioners' abandonment was not proven by respondents in this case, the
NLRC correctly ruled that the former were illegally dismissed. Consequently, the CA
committed reversible error when it held otherwise and granted respondents' certiorari
petition.
In a catena of cases, the Court has held that the onus of proving that an employee was not
dismissed or, if dismissed, his dismissal was not illegal fully rests on the employer; the
failure to discharge such onus would mean that the dismissal was not... justified and,
therefore, illegal
Article 277 (b) of the Labor Code puts the burden of proving that the dismissal of an
employee was for a valid or authorized cause on the employer. It should be noted that the
said provision of law does not distinguish whether the employer admits or does... not admit
the dismissal.
It is a well-known maxim in statutory construction that where the law does not distinguish,
the court should not distinguish
Art. 4. Construction in favor of labor. - All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and regulations, shall be
resolved in favor of labor.
Thus, following Article 293[64] of the Labor Code, as amended, petitioners are entitled to
reinstatement and backwages. However, since reinstatement is no longer feasible in view of
the enmity between the parties, the award of separation pay in lieu of... reinstatement is in
order.[65]
WHEREFORE, the petition is GRANTED. The Decision dated March 30, 2012 and the
Resolution dated July 11, 2012 of the Court of Appeals in CA-G.R. SP No. 115626 are
hereby REVERSED and SET ASIDE. Accordingly, the Decision dated March 9, 2010 and
the
Resolution dated June 21, 2010 of the National Labor Relations Commission in NLRC LAC
Case No. 05-001320-09 are REINSTATED.

CIR v. PHILIPPINE AIRLINES, GR No. 180043, 2009-07-14

Facts:
Petitioner Commissioner of Internal Revenue assails the Decision[1] of the Court of Tax
Appeals (CTA) En Banc dated 9 August 2007 in CTA EB No. 221, affirming the Decision[2]
dated 14 June 2006 of the CTA First Division in CTA Case No. 6735, which granted the
claim of respondent Philippine Airlines, Inc. (PAL) for the refund of its Overseas
Communications Tax (OCT) for the period April... to December 2001.
On 8 April 2003, respondent filed with the BIR an administrative claim for refund of the
P202,471.18 OCT it alleged to have erroneously paid in 2001. In a letter[6] dated 4 April
2003, addressed to petitioner, Ma. Stella L. Diaz (Diaz), the Assistant Vice-President for
Financial Planning & Analysis of respondent, explained that the claim for refund of
respondent was based on its franchise, Section 13 of Presidential Decree No. 1590, which
granted it (1) the option to pay either the basic corporate income tax on its... annual net
taxable income or the two percent franchise tax on its gross revenues, whichever was
lower; and (2) the exemption from all other taxes, duties, royalties, registration, license and
other fees and charges imposed by any municipal, city, provincial or national authority... or
government agency, now or in the future, except only real property tax.
Also invoking BIR Ruling No. 97-94[7] dated 13 April 1994, Diaz maintained that, other than
being liable for basic corporate income tax or the franchise tax, whichever was lower,...
respondent was clearly exempted from all other taxes, including OCT, by virtue of the "in
lieu of all taxes" clause in Section 13 of Presidential Decree No. 1590.
Respondent alleged in its Petition that per its computation, reflected in its annual income tax
return, it incurred a net loss in 2001 resulting in zero basic corporate income tax liability,
which was necessarily lower than the franchise tax due on its gross revenues.
Respondent... argued that in opting for the basic corporate income tax, regardless of
whether or not it actually paid any amount as tax, it was already entitled to the exemption
from all other taxes granted to it by Section 13 of Presidential Decree No. 1590.
After a hearing on the merits, the CTA First Division rendered a Decision ordering the
respondent to refund to the petitioner the substantiated amount of P126,243.80
representing the erroneously collected 10% Overseas Communications Tax for the period
April to December 2001.
The CTA First Division reasoned that under Section 13 of Presidential Decree No. 1590,
respondent had the option to choose between two alternatives: the basic corporate income
tax and the franchise tax, whichever would result in a lower amount of tax, and this would
be in lieu... of all other taxes, with the exception only of tax on real property. In the event
that respondent incurred a net loss for the taxable year resulting in zero basic corporate
income tax liability, respondent could not be required to pay the franchise tax before it could
avail... itself of the exemption from all other taxes under Section 13 of Presidential Decree
No. 1590. The possibility that respondent would incur a net loss for a given taxable period
and, thus, have zero liability for basic corporate income tax, was already anticipated by
Section 13... of Presidential Decree No. 1590, the very same section granting respondent
tax exemption, since it authorized respondent to carry over its excess net loss as a
deduction for the next five taxable years.
Petitioner filed a Motion for Reconsideration, which was denied by the CTA First Division in
a Resolution dated 17 October 2006.
The CTA En Banc found that Presidential Decree No. 1590 does not provide that... only the
actual payment of basic corporate income tax or franchise tax by respondent would entitle it
to the tax exemption provided under Section 13 of the latter's franchise. The CTA En Banc
denied petitioner's Motion for Reconsideration in a Resolution dated 11 October 2007.
Issues:
Whether or not THE COURT OF TAX APPEALS EN BANC ERRED IN HOLDING THAT
THE PHRASE "IN LIEU OF ALL OTHER TAXES" IN SECTIONS 13 AND 14 OF
PRESIDENTIAL DECREE NO. 1590 DOES NOT CONTEMPLATE THE FULFILLMENT OF
A CONDITION BEFORE THE EXEMPTION FROM ALL OTHER TAXES MAY BE APPLIED
Whether or not TAX REFUNDS ARE IN THE NATURE OF TAX EXEMPTIONS. AS SUCH,
THEY SHOULD BE CONSTRUED STRICTISSIMI JURIS AGAINST THE PERSON OR
ENTITY CLAIMING THE EXEMPTION.
Ruling:
The language used in Section 13 of Presidential Decree No. 1590, granting respondent tax
exemption, is clearly all-inclusive. The basic corporate income tax or franchise tax paid by
respondent shall be "in lieu of all other taxes, duties, royalties, registration, license, and...
other fees and charges of any kind, nature, or description imposed, levied, established,
assessed or collected by any municipal, city, provincial, or national authority or government
agency, now or in the future x x x," except only real property tax. Even a meticulous...
examination of Presidential Decree No. 1590 will not reveal any provision therein limiting
the tax exemption of respondent to final withholding tax on interest income or excluding
from said exemption the OCT.
In insisting that respondent needs to actually pay a certain amount as basic corporate
income tax or franchise tax, before it can enjoy the tax exemption granted to it, petitioner
places too much reliance on the use of the word "pay" in the first line of Section 13 of
Presidential Decree No. 1590.
It must do well for petitioner to remember that a statute's clauses and phrases should not be
taken as detached and isolated expressions, but the whole and every part thereof must be
considered in fixing the meaning of any of its parts.[19] A strict... interpretation of the word
"pay" in Section 13 of Presidential Decree No. 1590 would effectively render nugatory the
other rights categorically conferred upon the respondent by its franchise.
Section 13 of Presidential Decree No. 1590 clearly gives respondent the option to "pay"
either basic corporate income tax on its net taxable income or franchise tax on its gross
revenues, whichever would result in lower tax.
In the event that respondent incurs a net loss, it shall have zero liability for basic corporate
income tax, the lowest possible tax liability. There being no qualification to the exercise of
its options under Section 13 of Presidential Decree No. 1590, then respondent is free... to
choose basic corporate income tax, even if it would have zero liability for the same in light of
its net loss position for the taxable year. Additionally, a ruling by this Court compelling
respondent to pay a franchise tax when it incurs a net loss and is, thus, not liable... for any
basic corporate income tax would be contrary to the evident intent of the law to give
respondent options and to make the latter liable for the least amount of tax.
petitioner contends that according to well-established doctrine, a tax refund, which is in the
nature of a tax exemption, should be construed strictissimi juris against the taxpayer.[21]
However, when the claim for refund has clear legal... basis and is sufficiently supported by
evidence, as in the present case, then the Court shall not hesitate to grant the same.
In its previous discussion, the Court has already established that by merely exercising its
option to pay for basic corporate income tax - even if it had zero liability for the same due to
its net loss position in 2001 - respondent was already exempted from all other taxes,...
including the OCT. Therefore, respondent is entitled to recover the amount of OCT
erroneously collected from it in 2001.
WHEREFORE, the instant Petition for Review is DENIED. The Decision of the Court of Tax
Appeals En Banc dated 9 August 2007 in CTA EB No. 221, affirming the Decision dated 14
June 2006 of the CTA First Division in CTA Case No. 6735, which granted the claim of
Philippine Airlines, Inc. for a refund of Overseas Communications Tax erroneously collected
from it for the period April to December 2001, in the amount of P126,243.80, is AFFIRMED.

LUCIO R. ILDEFONSO v. ERNESTO Y. SIBAL, GR No. L-12181, 1959-09-30

Facts:
This is a direct appeal to this Court  taken by  plaintiff from a decision of the Court of  First
Instance of Manila, dismissing his complaint and ordering him to pay defendant the sum  of
P500.00 as attorney's fee, plus costs.
The facts are undisputed.   On October 15,  1953 in Civil Case No. 15371 of the Court of 
First Instance of Manila, herein  appellant Lucio R. Ildefonso  and appellee  Ernesto Y. 
Sibal, plaintiff  and  defendant  therein,... respectively, reached a compromise agreement
and  thereafter filed a joint motion to dismiss the  case.  Acting upon  the motion the court
granted it and dismissed  the  case.
Pursuant to the agreement, defendant, during the two-year period stipulated, commissioned
plaintiff to sell some of  his  real  properties  situated in  Sta. Mesa Heights, Quezon  City. 
The properties, however, were not sold by plaintiff but... by defendant  himself sometime
after the lapse of the two-year period and at a price much higher than that quoted to
plaintiff.  On the other hand, plaintiff, during the period agreed upon in line with  defendant's
expressed intention  to purchase real estate... worth around P400,000.00 within the
commercial district of Manila for the future expansion of his business of selling books and
school supplies-looked for real properties for sale in Manila. Apparently successful in his
search, he offered to sell to defendant at  various... times during the stipulated period the
Great Eastern Hotel for P1,300,000.00, the Borja Building for P1,500,000.00  and a lot 
along  Rizal Avenue with an area of 157 square  meters for P190,000.00.  Defendant,
however, told plaintiff that he  could... not buy any of the properties, the Great Eastern Hotel
and the Borja Building being not only beyond his means to buy but also inappropriate or
inadequate to his business, while the lot in Rizal Avenue was too small to meet the
requirements of his plans for expansion.
Claiming that  defendant Sibal has failed and neglected to make  the purchase of real estate
as promised in the compromise agreement above-quoted within the two-year period
stipulated therein,  plaintiff Ildefonso,  on April 20, 1956, instituted the present... action for
the recovery of the penalty provided  for  in paragraph 2  (6)  thereof in the amount of
P2,000.00, with  legal interests thereon  from October  16, 1955,  plus attorney's fee  and
costs.
Answering  the complaint,  defendant admitted the  execution of the compromise agreement
but denied liability, alleging  that  under the said agreement his  liability may arise only in the
event that he buys  or sells real estate without... coursing the same through the plaintiff and
that his failure to  buy or sell real  estate in accordance with the agreement was entirely 
due to plaintiff's inability  to sell  the   lands he (defendant)  offered for  sale  and to... obtain
real properties which would be profitable for him to purchase and  suitable to  his  business.
Issues:
Whether or not defendant has, upon the undisputed facts above narrated, violated the
obligation imposed on him by the compromise agreement.

Ruling:
The contention cannot be sustained.  There is nothing in the disputed paragraph of the
compromise agreement that can be construed to... mean  that appellee  bound  himself to
purchase real property and to pay the penalty of P2,000.00 in case he failed to do so.  The
paragraph of the agreement in question simply provides "that the defendant (herein
appellee) promises that within... two (2) years from the date hereof, he  shall course through
the plaintiff (herein appellant) as Realtor the former's real estate purchase or transaction",
and should appellee fail to fulfill that obligation he becomes liable to pay appellant the sum
of P2,000.00 in accordance with the penal clause.  It is evident, therefore, that appellee's
principal undertaking was to "course" or make his real estate purchases  and sales through
appellant for a period of two years from the date of the execution of the compromise...
agreement.
There being no dispute that appellee has, in fact, during the two-year period provided in the 
compromise agreement, coursed through appellant his real estate transactions and that,
due to  no fault attributable to him, he was not able to purchase or sell any real... property
through appellant (or anybody else, for that matter)  which  that period, we cannot say that
the trial court has committed any error in  dismissing the complaint.
There is,  to be sure, ambiguity in the provision of the compromise agreement  in  question
as a result of the explanatory clause ("that is, to make such real estate  purchase and to
course the  same to the plaintiff as  Realtor") inserted after the... phrase  "should  he fail
thereof" which follows the statement of  appellee's  obligation.  But following the rule that 
ambiguities  or obscure  clauses in contracts cannot  favor the one who  has  caused them
(article 1377,... new Civil Code), and it  appearing that the compromise agreement was
drawn by appellant through his counsel,  with the paragraph in dispute creating an
obligation in his favor, the ambiguity found therein  must be construed in favor of herein
appellee.  

ARSENIO R. REYES v. MARCIAL DE LA CRUZ, GR No. L-12729, 1959-03-30

Facts:
This is an  appeal by  Atty. Arsenio R. Reyes, plaintiff from the decision of the  Court of First
Instance of Manila, Judge Bonifacio Ysip presiding,  in Civil Case No.  20670, ordering 
among  other  things that ... defendants-appellees pay to plaintiff-appellant an amount 
equivalent to 5  per cent of the  amount adjudicated to each of them, from the estate to
which they were  some of the heirs, based  not on  the market value  but on the ...
assessed  value of  the property  appearing  on the project of partition  and  distribution, with
legal interest from the date of the  filing of the complaint, and  the  payment of their 
proportionate shares of the costs.
The main purpose of hiring Atty. Reyes and the... services to be rendered by him was to
expedite the said partition. He helped in the preparation of the  project of partition. After said
project had been approved and the terms thereof had been carried out; the properties 
adjudicated to each of the  said five... heirs individually, were given to  them; and the
properties which were to be held in common  was determined, the plaintiff filed this action
to  recover  his fees,  namely,  5  per  cent of the market value of all  said properties;... and
P10,000 as  moral damages,  P10,000 as consequential damages, and P10,000 as
attorney's fees.
The lower court denied  the prayer for  damages  and attorney's fees.  It held that the 5 per
cent  mentioned in the contract for services  referred to the assessed value, not the market
value,  because the  latter was  too ... speculative.
Issues:
Whether the contract for services referred to the assessed  value or to the market value of
the properties adjudicated to the four heirs.
Ruling:
On the basis of the assessed  value  of the properties adjudicated to the ... four  remaining
heirs, in the present case, which  is P149,685.69, 5  per  cent of the  same would be  almost
P8,000.  If  we add this sum plus its legal interest from the filing of the  complaint  as
ordered  by the ... court, to the P5,000 plaintiff had received  from the estate of Marcial de la
Cruz, he would have a total of  around P14,000 which  in our opinion is sufficient, even
more sufficient and adequate payment for his legal services in this case.
 In view of the foregoing,  the appealed decision is hereby affirmed, with costs.
We agree with  the trial court that the  5 per cent could refer only to the... assessed value,
for that was the only value then known to the parties to the contract, said value appearing in
the inventory of the estate of the decedent. The market value of a property is, as correctly
said by the lower court, too speculative.
Bearing this in mind, the parties  to the  contract... could not have had in mind the market
value of the properties  to be adjudicated to  the five  heirs, which market value was  then
unknown and whose determination would be attended with difficulties and disagreements.  
But there was one  value... which they all knew, and that was the assessed value appearing
in the inventory and  on  the  basis  of which  the partition was to be made.  That must have
been the value and the only value which they agreed upon.
Moreover,  if following the  theory of the plaintiff, the contract  referred to the market value,
at what time was said market value to be ascertained,  considering that real estate values
fluctuate  from time to time. Was this time of the determination of the market value,... the
date  when  the contract  was  entered  into,  or the date  when the partition  was actually
made, or the day when the plaintiff made  a demand  for  the  payment of his legal 
services?
Another aspect  of  the  case  bears  consideration.   It was the plaintiff-appellant who
prepared the contract for services.   Being  a lawyer, he  knew the meaning and value of
every word or  phrase used in ... said  contract.  If the parties,  including  himself,  really
had  in mind not the assessed value but the market value, it would have been so easy for  
him to have used and inserted  said phrase, "market value", in order to remove and... avoid
all ambiguity and uncertainty.
We  reproduce  with  favor what  the lower court  said on this point:
"It has been  proven that the plaintiff himself  was the very-person who prepared  the
document, Exhibit A.  Therefore, if there is any  ambiguity or  obscurity in the  interpretation
and meaning of said contract, the same "shall... not favor the party who cause the
obscurity"
The  lower court considered the  claim of plaintiff  for legal services  as exhorbitant and
unconscionable.

Barrameda v. Moir G.R. No. 7927. August 8, 1913

FACTS:
Petitioner relates that the he was defendant in a suit brought before a justice of the peace to
try title to a parcel of land; that the case was decided adversely to him; that he appealed to
the Court of First Instance; and that the judge of that court, on motion of the appellee,
dismissed the appeal with directions to the justice of the peace to proceed with the
enforcement of the judgment. At the request of the petitioner, a preliminary injunction was
issued by this court to stay the execution of the judgment, and he now prays that the
respondent judge be ordered to proceed with the case on appeal. The said judge has
demurred to the complaint on the ground that it does not state facts sufficient to constitute a
cause of action. The basis of the demurrer is that Acts Nos. 2041 and 2131, conferring
original jurisdiction upon justices of the peace to try title to real state, are inconsistent with
and repugnant to the Philippine Bill of July 1, 1902. By Act No. 2041, section 3, it was
provided:
Justices of the peace shall have exclusive jurisdiction to adjudicate question of title to real
estate or any interest therein when the value of the property in litigation does not exceed
two hundred pesos, and where such value exceeds two hundred pesos but is less than six
hundred pesos the justice of the peace shall have jurisdiction concurrent with the Court of
First Instance.
ISSUE:
Whether or not Acts. Nos. 2041 and 2131 are unconstitutional.

HELD:
Yes. In the case of Weigall vs. Shuster, it was held that the jurisdiction of the Supreme
Court and Courts of First Instance, as fixed by section 9 of the Philippine Bill, may be added
but to not diminished by the Philippine Legislature. Therefore, there will be sufficient reason
for declaring the disputed provisions of Acts. Nos. 2041 and 2131 repugnant to the
Philippine Bill and, consequently void if they attempt to curtail the jurisdiction of Courts of
First Instance where the title to realty is involved. The original jurisdiction of those courts
extends to "all civil actions which involve the title to or possession of real property, or of any
interest therein".

The concurrent jurisdiction in cases where the amount involved is more than P200 but less
than P600, was meant only as supplemental and ancillary to the exclusive jurisdiction over
cases not exceeding P200. This concurrent jurisdiction must therefore be considered as
inseparable from and absolutely dependent upon the exercise of that exclusive jurisdiction
which has already been declared void. The concurrent jurisdiction must therefore be
declared void also. Other additional jurisdiction granted to justices of the peace by Acts
Nos. 2041 and 2131 is not before the court. Such other additional jurisdiction bears no
relation whatever to those void provisions of the statutes which provide for jurisdiction in
real-estate actions; and applying the same rules to the rest of the Act which the court has
applied to the clause conferring concurrent jurisdictional in real-estate actions between the
amounts of P200 and P600, said is clearly of the opinion that the validity of the remainder of
the Act is not in any case dependent upon the said void provisions.

In conclusion, it seems advisable to state that the able brief of counsel for the respondent
judge is based upon the a priori assumption that original jurisdiction of Court of First
Instance in real-estate actions is, by the Organic Law, made exclusive. The judgment of the
justice of the peace which it is desired to have the respondent judge on this action review is
an absolutely nullity. The respondent judge acquired jurisdiction of the cause only for the
purpose of dismissing the appeal, and in further directing the justice of the peace to proceed
with the execution of the void judgment, the respondent judge was in error.

PEOPLE v. MIGUEL G. CONCEPCION, GR No. 19192, 1923-02-28

Facts:
This appeal has been brought to reverse a judgment of the Court of First Instance of the
Province of Cagayan, finding the appellant, Miguel G. Concepcion, guilty of the offense of
estafa by means of falsification of mercantile documents, and sentencing him to undergo
imprisonment for five years, four months and twenty days, prision correccional, with the
accessories prescribed by law; to pay a fine of P1,500; to indemnify the branch of the
Philippine National Bank in Aparri in the sum of P55,000, with subsidiary imprisonment (not
to exceed one year) in case of insolvency; and to pay the one-fourth part of the costs of
prosecution.
In concluding our sketch of the facts connected with the making of these two loans, we may
state that at the time the quedans referred to were signed and delivered to the bank neither
Crisologo nor Concepcion possessed the tobacco which was purported to be on deposit
with
Abelardo Crisologo; and, although the evidence on this point is purely circumstantial, we
feel certain that Angeles knew that the tobacco was non-existent. In favor of Crisologo is the
circumstance that Angeles assured him that Concepcion had the tobacco and that the
signing of... the documents by Crisologo was a matter of pure form.
The sequel to the transactions above narrated may be told in a few words. The notes, as
might have been anticipated, have not been paid by Abelardo Crisologo; the tobacco has
been found to be non-existent, as Angeles and Concepcion all along knew; Concepcion
denies all... responsibility for the transaction, as if he were a total stranger thereto; and
since December 23, 1921, Angeles occupies the grave of a suicide.
Issues:
Whether or not the trial judge erred in sentencing appellant to imprisonment for a period
within the limits of maximum degree of prision correccional
Ruling:
In order that the point may not be supposed to have passed unperceived we will say that
the information charges an estafa founded upon deceit, it being alleged that the money of
which the bank was defrauded was obtained by means of the false representation on the
part of the accused Abelardo Crisologo that he was the owner of the tobacco covered by
the quedans to which reference has been made, a form of estafa defined in subsection 1 of
article 535 of the Penal Code.
However, in view of the fact that the responsible manager of the bank, who let the money
out, knew that the tobacco was non-existent, the estafa committed cannot be considered to
have been of the precise form alleged; and the offense is more properly to be considered as
falling under subsection 5 of the same article, that is, as consisting of fraudulent
misapplication of the funds of the bank by its manager.
Moreover, we note that the facts set forth in the information are sufficient to sustain the
charge in this aspect; and we have no hesitancy in holding, in conformity with the analogy of
numerous precedents, that where the facts are sufficiently set forth in the information, a
conviction can be had under subsection 5 of article 535, although the information expressly
charges only an infraction of subsection 1.
In the light of the foregoing discussion it becomes necessary to modify the period of
imprisonment imposed by the trial judge by adding one day thereto, thus placing the penalty
within the maximum of the maximum degree of prision correccional; and it being understood
that the appealed decision is thus modified, the judgment is affirmed, with costs.
De Jesus v. City of Manila G.R. No. L-9337 (December 24, 1914)

FACTS:
In 1907, Petitioner bought from an original owner a piece of land in Manila which was under
theTorrens system. Apparently, the original owner incorrectly declared the size of the land.
So, from 1901 – 1907, the original owner was paying lesser taxes than he should have and
same for Petitioner from 1907 – 1910. Upon finding out that he was not paying the correct
amount of taxes, Petitioner paid the taxes, fees, and interest of P2, 096.49 for the unpaid
balance of the years 1901-1910.

Soon after, he protested and filed an action to recover the same amount. Petitioner was
awarded P1, 649.82. Petitioner contends that the supposed taxes from before 1910 were
not actually taxes because they had not yet been assessed. Taxes may not be due and
payable until they are assessed.

ISSUE:
W/N Petitioner should still pay the taxes which were not assessed before.

HELD:
Petitioner should only pay the taxes when he was the owner of the property. The plaintiff is
liable for all taxes and assessments which were levied or assessed, or which might have
been levied or assessed, during his ownership of the lands. It appears that he realized that
he was so liable and has paid the taxes for the years 1907 to 1910. He claims only the right
to recover for the taxes paid for the years previous to the date of his purchase; and those
taxes not having been either due or payable and not having even been assessed or levied
prior to the time when he purchased the land, his contention is well founded.

Legaspi v. Executive Secretary and Agrarian Reforms

G.R. No. L-36153 (November 28, 1975)

FACTS:
Petitioner, an employee of the Department of Agrarian Reforms, sent a letter to the
Respondent Secretary of the Department, Conrado Estrella. Petitioner expressed his desire
to be laid-off under the provisions of RA 3844, as amended by RA 6389, on the condition
that he would also be paid the gratuity benefits to which he might be entitled under C.A. No.
186, as amended by RA 1616. GSIS approved his retirement gratuity under C.A. No. 186,
as amended by RA 1616 but denied his claim for gratuity under RA 3844, as amended by
RA 6389.

ISSUE:
W/N Petitioner is entitled to both gratuity benefits under C.A. No. 186, as amended by RA
1616, and RA 3844, as amended by RA 6389.

HELD:
No. There is nothing in RA 3844, as amended by RA 6389, that would suggest that an
employee who is laid-off or prefers to be laid-off can receive two pension benefits, one
under its provisions and another pursuant to C.A. No. 186.
This interpretation is more in line with the policy of the law embodied in C.A. No. 186
prohibiting an employer from paying double retirement benefits to an employee. Being the
law governing the retirement of government employees, all other laws extending retirement
benefits to government employees should, in case of ambiguity, be construed in relation to
C.A. No. 186 and in the light of its provisions. It is a rule of statutory construction that when
the legislature enacts a provision, it is understood that it is aware of previous statutes
relating to the same subject matter, and that in the absence of an express repeal or
amendment therein, the new provision should be deemed enacted pursuant to the
legislative policy embodied in prior statutes which should all be construed together.

Manila Lodge No. 176 v. Court of Appeals

G.R. No.L-41001 and G.R. No.L-41012 (September 30, 1976)

FACTS:
The Philippine Commission enacted Act No. 1306 which authorized the City of Manila to
reclaim a portion of Manila Bay. The reclaimed area was to form part of the Luneta
extension. The act provided that the reclaimed area shall be the property of the City of
Manila, and the city is authorized to set aside a tract of the reclaimed land for a hotel site
and to lease or to sell the same. Later, the City of Manila conveyed a portion of the
reclaimed area to Petitioner. Then Petitioner sold the land, together with all the
improvements, to the Tarlac Development Corporation (TDC).

ISSUE:
W/N the subject property was patrimonial property of the City of Manila.

HELD:
The petitions were denied for lack of merit. The court found it necessary to analyze all the
provisions of Act No. 1360, as amended, in order to unravel the legislative intent. The grant
made by Act No. 1360 of the reclaimed land to the City of Manila is a grant of a “public”
nature. Such grants have always been strictly construed against the grantee because it is a
gratuitous donation of public money or resources, which resulted in an unfair advantage to
the grantee. In the case at bar, the area reclaimed would be filled at the expense of the
Insular Government and without cost to the City of Manila. Hence, the letter of the statute
should be narrowed to exclude matters which, if included, would defeat the policy of
legislation.

Sy Kiong v. Sarmiento
G.R. No. L-2934 (November 29, 1951)

FACTS:
Petitioner is the owner of a duly licensed grocery store located in the City of Manila and an
importer of flour who sells either to bakeries or to retail dealers for purposes of retail.
Sometime in September 1948, the Treasurer of the City of Manila assessed against him the
sum of 566.50php which represents the alleged deficiency municipal license tax due from
him on his gross sales of flour to bakeries after deducting the sales made to retail dealers
for purposes of resale.

ISSUE:
W/N the sales of flour made by the Petitioner to bakeries to be manufactured into bread are
retail or wholesale.

HELD:
The sale of flour to bakeries to be manufactured into bread and to be resold to the public, in
the absence of any express provision of law on the matter, should be treated as a sale at
retail and should subject the vendor to the retail tax law.