Case Digest: San Pablo Manufacturing Corporation vs. CIR, G.R.No. 147749

San Pablo Manufacturing Corporation vs. CIR, G.R. No. 147749. June 22, 2006

Subject: Statutory Construction

ACTS

San Pablo Manufacturing Corporation (SPMC) is a domestic corporation engaged in the business of milling, manufacturing and exporting of coconut oil and other allied products. It was assessed and ordered to pay by the Commissioner of Internal Revenue miller's tax

and manufacturer's sales tax, among other deficiency taxes, for taxable year 1987 particularly on SPMC's sales of crude oil to United Coconut Chemicals, Inc. (UNICHEM) while the deficiency sales tax was applied on its sales of corn and edible oil as manufactured products.

SPMC opposed the assessments. The Commissioner denied its protest. SPMC appealed the denial of its protest to the Court of Tax Appeals (CTA) by way of a petition for review. docketed as CTA Case No. 5423. It insists on the liberal application of the rules because, on the the merit’s of the petition, SPMC was not liable for the 3% miller's tax. It maintains that the crude oil which it sold to UNICHEM was actually exported by UNICHEM as an ingredient of fatty acid and glycerine, hence, not subject to miller's tax pursuant to Section 168 of the 1987 Tax Code.

Since UNICHEM, the buyer of SPMC's milled products, subsequently exported said products, SPMC should be exempted from the miller's tax.

ISSUE

Whether or not SPMC's sale of crude coconut oil to UNICHEM was subject to the 3% miller's tax.

RULING

Yes, SPMC's sale of crude coconut oil to UNICHEM is subject to the 3% miller's tax.

Based on the rule of the maxim “Expressio unius est exclusio alterius”, anything that is not included in the enumeration is excluded therefrom and a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein. The rule proceeds from the premise that the legislature would not have made specific enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly mentioned.

In this case, the language of the exempting clause of Section 168 of the 1987 Tax Code was clear. The tax exemption applied only to the exportation of rope, coconut oil, palm oil, copra by-products and desiccated coconuts, whether in their original state or as an ingredient or part of any manufactured article or products, by the proprietor or operator of the factory or by the miller himself. The application of “Expressio unius est exclusio alterius” in this case is consistent with the construction of tax exemptions in strictissimi juris against the taxpayer. To allow SPMC’s claim for tax exemption will violate these established principles and unduly derogate sovereign authority.

Case Digest: Republic vs Hon. Migrino, et.al., G.R. No. 89483

Republic vs Hon. Migrino, et.al., G.R. No. 89483. August 30, 1990

Subject: Statutory Construction

FACTS

This case puts in issue the authority of the Presidential Commission on Good Government (PCGG), through the New Armed Forces of the Philippines Anti-Graft Board (hereinafter referred to as the "Board"), to investigate and cause the prosecution of petitioner, a retired military officer, for violation of Republic Acts Nos. 3019 and 1379.

The controversy traces its roots to the order of then PCGG Chairman Jovito R. Salonga, dated May 13, 1986, which created the New Armed Forces of the Philippines Anti-Graft Board. The Board was created to "investigate the unexplained wealth and corrupt practices of AFP personnel, both retired and in active service."

Acting on information received by the Board, private respondent Lt. Col. Troadio Tecson (ret.) was required by the Board to submit his explanation/comment together with his supporting evidence by October 31, 1987. Private respondent requested, and was granted, several postponements, but was unable to produce his supporting evidence because they were allegedly in the custody of his bookkeeper who had gone abroad.

Just the same, the Board proceeded with its investigation and submitted its resolution, dated June 30, 1988, recommending that private respondent be prosecuted and tried for violation of Rep. Act No. 3019, as amended, and Rep. Act No. 1379, as amended.

The case was set for preliminary investigation by the PCGG. Private respondent moved to dismiss the case. In a resolution dated February 8, 1989, the PCGG denied the motion to dismiss for lack of merit. Private respondent moved for reconsideration, but this was denied by the PCGG in a resolution dated March 8, 1989. Private respondent was directed to submit his counter-affidavit and other controverting evidence on March 20, 1989.

On March 13, 1989, private respondent filed a petition for prohibition with preliminary injunction with the Regional Trial Court in Pasig, Metro Manila. Petitioner filed a motion to dismiss and opposed the application for the issuance of a writ of preliminary injunction on the principal ground that the Regional Trial Court had no jurisdiction over the Board. Private respondent opposed the motion to dismiss. Petitioner replied to the opposition.

On June 23, 1989, respondent judge denied petitioner’s motion to dismiss. On June 26, 1989, respondent judge granted the application for the issuance of a writ of preliminary injunction, enjoining petitioners from investigating or prosecuting private respondent under Rep. Acts Nos. 3019 and 1379 upon the filing of a bond in the amount of Twenty Thousand Pesos (P20,000.00). Hence, the instant petition.

One of the contentions of private respondent Tecson is that he is not one of the subordinates contemplated in E.O. Nos. 1, 2, 14, and 14-A as the alleged illegal acts being imputed to him, that of alleged amassing wealth beyond his legal means while Finance Officer of the Philippine Constabulary, are acts of his own alone, not connected with his being a crony, business associate, etc. or subordinate as the petition does not allege so; hence, the PCGG has no jurisdiction to investigate him; that if indeed private respondent amassed wealth beyond his legal means, the procedure laid down by Rep. Act 1379 as already pointed out before, be applied; and since, he has been separated from the government more than four years ago, the action against him under Republic Act 1379 has already prescribed.

According to petitioners, the PCGG has the power to investigate and cause the prosecution of private respondent because he is a "subordinate" of former President Marcos.

ISSUE/S:

Whether or not private respondent acted as a "subordinate" of Pres. Marcos within the contemplation of E.O. No. 1, the law creating the PCGG, when he allegedly unlawfully acquired the properties.

RULING

No.

Applying the rule in statutory construction known as ejusdem generis, that is—where general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned.

The term "subordinate" as used in E.O. Nos. 1 and 2 would refer to one who enjoys a close association or relation with former Pres. Marcos and/or his wife, similar to the immediate family member, relative, and close associate in E.O. No. 1 and the close relative, business associate, dummy, agent, or nominee in E.O. No. 2. It does not suffice, as in this case, that the respondent is or was a government official or employee during the administration of former Pres. Marcos. There must be prima facie showing that the respondent unlawfully accumulated wealth by virtue of his close association or relation with former Pres. Marcos and/or his wife.

The alleged unlawful accumulation of wealth is not that contemplated in E.O. Nos. 1, 2, 14 and 14-A. It would appear that private respondent accumulated his wealth for his own account. Therefore, this case is beyond the jurisdiction of PCGG.

Case Digest: Colgate-Palmolive Philippines vs Hon. Gimenez, G.R. No. L-14787

Colgate-Palmolive Philippines vs Hon. Gimenez, G.R. No. L-14787, January 28, 1961

Subject: Statutory Construction

FACTS

The petitioner Colgate-Palmolive Philippines, Inc. is a corporation duly organized and existing under Philippine laws engaged in the manufacture of toilet preparations and household remedies. On several occasions, it imported from abroad various materials such as irish moss extract, sodium benzoate, sodium saccharinate precipitated calcium carbonate and dicalcium phosphate, for use as stabilizers and flavoring of the dental cream it manufactures. For every importation made of these materials, the petitioner paid to the Central Bank of the Philippines the 17% special excise tax on the foreign exchange used for the payment of the cost, transportation and other charges incident thereto, pursuant to Republic Act No. 601, as amended, commonly known as the Exchange Tax Law.

On March 14, 1956, the petitioner filed with the Central Bank three applications for refund of the 17% special excise tax it had paid in the aggregate sum of P113,343.99. The claim for refund was based on section 2 of Republic Act 601. After the applications were processed by the officer-in-charge of the Exchange Tax Administration of the Central Bank, that official advised, the petitioner that of the total sum of P113,343.99 claimed by it for refund, the amount of P23,958.13 representing the 17% special excise tax on the foreign exchange used to import irish moss extract, sodium benzoate and precipitated calcium carbonate had been approved. The auditor of the Central Bank, however, refused to pass in audit its claims for refund even for the reduced amount fixed by the Officer-in-Charge of the Exchange Tax Administration, on the theory that toothpaste stabilizers and flavors are not exempt under section 2 of the Exchange Tax Law.

Petitioner appealed to the Auditor General, but the latter or, December 4, 1958 affirmed the ruling of the auditor of the Central Bank, maintaining that the term "stabilizer and flavors" mentioned in section 2 of the Exchange Tax Law refers only to those used in the preparation or manufacture of food or food products. Not satisfied, the petitioner brought the case to this Court thru the present petition for review.

ISSUE

Whether or not the foreign exchange used by petitioner for the importation of dental cream stabilizers and flavors is exempt from the 17% special excise tax imposed by the Exchange Tax Law, (Republic Act No. 601) so as to entitle it to refund under section 2 thereof.

RULING

No, it is inclusive.

The ruling of the Auditor General that the term "stabilizer and flavors" as used in the law refers only to those materials actually used in the preparation or manufacture of food and food products is based, apparently, on the principle of statutory construction that "general terms may be restricted by specific words, with the result that the general language will be limited by the specific language which indicates the statute's object and purpose." The rule, however, is, applicable only to cases where, except for one general term, all the items in an enumeration belong to or fall under one specific class.

In this case, on the basis of the grouping of the articles alone, it cannot validly be maintained that the term "stabilizer and flavors" as used in the above-quoted provision of the Exchange Tax Law refers only to those used in the manufacture of food and food products. This view is supported by the principle "Ubi lex non distinguish nec nos distinguire debemos", or "where the law does not distinguish, neither do we distinguish". Since the law does not distinguish between "stabilizer and flavors" used in the preparation of food and those used in the manufacture of toothpaste or dental cream, we are not authorized to make any distinction and must construe the words in their general sense. The rule of construction that general and unlimited terms are restrained and limited by particular recitals when used in connection with them, does not require the rejection of general terms entirely. It is intended merely as an aid in ascertaining the intention of the legislature and is to be taken in connection with other rules of construction.

Case Digest: De Villa vs CA et.al., G.R. No. 87416

De Villa vs CA et.al., G.R. No. 87416, April 8, 1991

Subject: Statutory Construction

FACTS

This petition for review on certiorari seeks to reverse and set aside the decision* of the Court of Appeals promulgated on February 1, 1989, in CA-G.R. SP No. 16071 entitled "Cecilio S. de Villa vs. Judge Job B. Madayag, etc. and Roberto Z. Lorayes," dismissing the petition for certiorari filed therein.

On October 5, 1987, petitioner Cecilio S. de Villa was charged before the Regional Trial Court of the National Capital Judicial Region (Makati, Branch 145) with violation of Batas Pambansa Bilang 22.

After arraignment and after private respondent had testified on direct examination, petitioner moved to dismiss the Information on the following grounds: (a) Respondent court has no jurisdiction over the offense charged; and (b) That no offense was committed since the check involved was payable in dollars, hence, the obligation created is null and void pursuant to Republic Act No. 529 (An Act to Assure Uniform Value of Philippine Coin and Currency).

Petitioner argues that the check in question was drawn against the dollar account of petitioner with a foreign bank, and is therefore, not covered by the Bouncing Checks Law (B.P. Blg. 22).

On July 19, 1988, respondent court issued its first questioned orders stating accused's motion to dismiss dated July 5, 1988, is denied for lack of merit. Petitioner moved for reconsideration, but his motion was subsequently denied by respondent court.

Petitioner then filed for certiorari seeking to declare the nullity of the aforequoted orders dated July 19, 1988, and September 6, 1988, in the CA. On February 1, 1989, CA dismissed the petition for review. A motion for reconsideration of the said decision was filed by the petitioner on February 7, 1989, but the same was denied by the Court of Appeals in its resolution dated March 3, 1989. Hence this petition.

ISSUE

Whether or not the Regional Trial Court of Makati has jurisdiction over the case in question.

RULING

Yes, the trial court's jurisdiction over the case, subject of this review, cannot be questioned.

Under a cardinal principle in statutory construction that where the law does not distinguish courts should not distinguish. Parenthetically, the rule is that where the law does not make any exception, courts may not except something unless compelling reasons exist to justify it.

In this case, citing a decided case where SC ruled "that jurisdiction or venue is determined by the allegations in the information." The information under consideration specifically alleged that the offense was committed in Makati, Metro Manila and therefore, the same is controlling and sufficient to vest jurisdiction upon the Regional Trial Court of Makati. The Court acquires jurisdiction over the case and over the person of the accused upon the filing of a complaint or information in court which initiates a criminal action. it is undisputed that the check in question was executed and delivered by the petitioner to herein private respondent at Makati, Metro Manila. The currency is immaterial under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are either drawn or issued in the Philippines though payable outside thereof are within the coverage of said law.

Case Digest: Pilar vs COMELEC, G.R. No. 115245

Pilar vs COMELEC, G.R. No. 115245, July 11, 1995

Subject: Statutory Construction

FACTS

This is a petition for certiorari under Rule 65 of the Revised Rules of Court assailing the Resolution dated April 28, 1994, of the Commission on Elections (COMELEC) in UND No. 94-040.

On March 22, 1992, petitioner Juanito C. Pilar filed his certificate of candidacy for the position of member of the Sangguniang Panlalawigan of the Province of Isabela.

On March 25, 1992, petitioner withdrew his certificate of candidacy.

In M.R. Nos. 93-2654 and 94-0065 dated November 3, 1993, and February 13, 1994 respectively, the COMELEC imposed upon petitioner the fine of Ten Thousand Pesos (P10,000.00) for failure to file his statement of contributions and expenditures.

In M.R. No. 94-0594 dated February 24, 1994, the COMELEC denied the motion for reconsideration of petitioner and deemed final M.R. Nos. 93-2654 and 94-0065.

Petitioner went to the COMELEC En Banc (UND No. 94-040), which denied the petition in a Resolution dated April 28, 1994 (Rollo, pp. 10-13).

Petitioner argues that he cannot be held liable for failure to file a statement of contributions and expenditures because he was a "non-candidate," having withdrawn his certificates of candidacy three days after its filing. Petitioner posits that "it is . . . clear from the law that candidate must have entered the political contest, and should have either won or lost".

Hence, this petition for certiorari.

ISSUE

Whether or not the petitioner be held liable.

RULING

Yes, he is liable.

Under the rule that where the law does not distinguish, courts should not distinguish, Ubi lex non distinguit nec nos distinguere debemos. No distinction is to be made in the application of a law where none is indicated.

In this case, SC dismissed the petition. Section 14 of R.A. No. 7166 states that "every candidate" has the obligation to file his statement of contributions and expenditures. As the law makes no distinction or qualification as to whether the candidate pursued his candidacy or withdrew the same, the term "every candidate" must be deemed to refer not only to a candidate who pursued his campaign, but also to one who withdrew his candidacy. Furthermore, Section 14 of the law uses the word "shall." As a general rule, the use of the word "shall" in a statute implies that the statute is mandatory, and imposes a duty which may be enforced, particularly if public policy is in favor of this meaning or where public interest is involved.

 

Case Digest: Philippine British Assurance Co., Inc. vs IAC et.al., G.R. No. 72005

Philippine British Assurance Co., Inc. vs IAC et.al., G.R. No. 72005, May 29, 1987

Subject: Statutory Construction

FACTS

This is a Petition for Review on certiorari of the Resolution dated September 12, 1985, of the Intermediate Appellate Court in AC-G.R. No. CR-05409 granting private respondent's motion for execution pending appeal and ordering the issuance of the corresponding writ of execution on the counterbond to lift attachment filed by petitioner.

The records disclose that private respondent Sycwin Coating & Wires, Inc., filed a complaint for collection of a sum of money against Varian Industrial Corporation before the Regional Trial Court of Quezon City. During the pendency of the suit, private respondent succeeded in attaching some of the properties of Varian Industrial Corporation upon the posting of a supersedeas bond. The latter in turn posted a counterbond in the sum of P1,400, 000.00 thru petitioner Philippine British Assurance Co., Inc., so the attached properties were released.

Varian Industrial Corporation appealed the decision to the respondent Court. Sycwin then filed a petition for execution pending appeal against the properties of Varian in respondent Court. Varian was required to file its comment, but none was filed. In the Resolution of July 5, 1985, respondent Court ordered the execution pending appeal as prayed for. However, the writ of execution was returned unsatisfied as Varian failed to deliver the previously attached personal properties upon demand. In a Petition dated August 13, 1985, filed with respondent Court Sycwin prayed that the surety (herein petitioner) be ordered to pay the value of its bond. In compliance with the Resolution of August 23, 1985, of the respondent Court herein petitioner filed its comment. In the Resolution of September 12, 1985, the respondent Court granted the petition. Hence this action.

ISSUE

Whether or not an order of execution pending appeal of a judgment maybe enforced on the said bond.

RULING

No, an order of execution pending appeal of a judgment cannot be enforced on the said bond.

It is well recognized rule that where the law does not distinguish, courts should not distinguish. Ubi lex non distinguish nec nos distinguere debemos." The rule, founded on logic, is a corollary of the principle that general words and phrases in a statute should ordinarily be accorded their natural and general significance. The rule requires that a general term or phrase should not be reduced into parts and one part distinguished from the other so as to justify its exclusion from the operation of the law. In other words, there should be no distinction in the application of a statute where none is indicated. For courts are not authorized to distinguish where the law makes no distinction. They should instead administer the law not as they think it ought to be but as they find it and without regard to consequences.

In this case, the counterbond was issued in accordance with the provisions of Section 5, Rule 57 of the Rules of Court as provided in the second paragraph a forecited which is deemed reproduced as part of the counterbond. In the third paragraph it is also stipulated that the counterbond is to be "applied for the payment of the judgment." Neither the rules nor the provisions of the counterbond limited its application to a final and executory judgment. Indeed, it is specified that it applies to the payment of any judgment that maybe recovered by plaintiff. Thus, the only logical conclusion is that an execution of any judgment including one pending appeal if returned unsatisfied maybe charged against such a counterbond. The rule, therefore, is that the counterbond to lift attachment that is issued in accordance with the provisions of Section 5, Rule 57, of the Rules of Court, shall be charged with the payment of any judgment that is returned unsatisfied. It covers not only a final and executory judgement but also the execution of a judgment pending appeal.

Case Digest: Rillaroza, et. al vs Eastern Telecom, G.R. No. 104600

Rillaroza, et. al vs Eastern Telecom, GR No. 104600, July 2, 1999

Subject: Basic Legal Ethics

FACTS

A group of lawyers, led by Atty. Francisco D. Rilloraza, who were hired by Eastern Telecommunications Philippines, Inc. (ETPI) to represent it in a case against Philippine Long Distance Telephone Company (PLDT). The lawyers filed a complaint with the Regional Trial Court of Makati City, seeking P26,350,779.91 in attorney's fees.

ETPI argued that the lawyers were not entitled to any attorney's fees because there was no written agreement between the parties. The company also argued that the amount of attorney's fees was excessive.

The trial court ruled in favor of the lawyers, awarding them P10,000,000 in attorney's fees. ETPI appealed the decision to the Court of Appeals, which affirmed the decision of the trial court.

ETPI then appealed the decision to the Supreme Court.

ISSUE

Whether or not lawyers are entitled to compensation even in the absence of written agreements between and among the parties.

RULING

Yes.

Under Rule 20.01v of the Canons of Professional Responsibility which provides that, a lawyer shall be guided by the following factors in determining his fees: (a) the time spent and the extent of the service rendered or required; (b) the novelty and difficulty of the questions involved; (c) The importance of the subject matter; (d) The skill demanded; (e) The probability of losing other employment as a result of acceptance of the proffered case; (f) The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs; (g) The amount involved in the controversy and the benefits resulting to the client from the service; (h) The contingency or certainty of compensation; (i) The character of the employment, whether occasional or established; and (j) The professional standing of the lawyer.

In this case, the Court held that lawyers are entitled to reasonable compensation for their services, even if there is no written agreement between the lawyer and the client. The Court also held that the amount of attorney's fees awarded by the trial court was reasonable.

Hence, that lawyers are entitled to reasonable compensation for their services, even if there is no written agreement between the lawyer and the client.