Planters Products, Inc. vs. Fertiphil Corp.

G.R. No. 166006 March 14, 2008

FACTS:
Petitioner/Appelant Planters Products Inc. and respondent Fertiphil Corp. are private corporations
engaged in the importation and distribution of fertilizers, pesticides and agricultural chemicals.
President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 which imposed a
capital recovery component (CRC) of P10/bag of Fertilizer sold in the Philippines.
The CRC was to be collected by the Fertilizer & Pesticide Authority (FPA) and remitted to Far East Bank
and Trust Company account of Planters Products Inc. (PPI)
After the Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. Upon return of
democracy, Fertiphil demanded a refund but PPI refused. Fertiphil filed a complaint at the RTC for collection
and damages against FPA and PPI with the RTC on the ground that LOI No. 1465 is unjust, unreasonable
oppressive, invalid and unlawful resulting to denial of due process of law.
FPA answered that it is a valid exercise of the police power of the state in ensuring the stability of the
fertilizing industry in the country and that Fertiphil did NOT sustain damages since the burden imposed fell on
the ultimate consumers. And that, the collections was also for the benefit of Planters Foundation, Inc (PFI), a
foundation created by law to hold in trust for farmers, the stock ownership of PPI.
RTC and CA favored Fertiphil holding that it is an exercise of the State’s inherent power of taxation and
invalidated the levy for violating the basic principle that taxes can only be levied for public purpose.
ISSUE:
Whether or Not Fertiphil has locus standi to question the constitutionality of LOI No. 1465.
Whether or Not LOI No. 1465 is constitutional and is the lis mota of the case.

RULING:
The Supreme Court affirmed the decision of the RTC and CA in rendering judgment in favor of Fertiphil and
against the PPI, ordering the latter to pay/refund the sum of P6,698,144.00 with 12% interest from the time of
judicial demand.
Locus standi requires a litigant to be a "real party in interest" or party who stands to be benefited or injured by
the judgment in the suit. Fertiphil has locus standi because it suffered direct injury.
The Supreme Court held that LOI No. 1465 is unconstitutional even if enacted under the police power; it did
not promote public interest. The court found that the CRC was not a tax, but rather a form of subsidy to PPI.
The court held that the government cannot subsidize a private corporation, as this would violate the principle
of separation of power. The constitutionality of LOI No. 1465 is the lis mota of the case.
locus standi - the right or capacity to bring an action or to appear in a court
lis mota - the cause or motivation of a legal action or lawsuit.