Professional Documents
Culture Documents
2.
Progressive Development Corporation vs. Quezon City
Facts:
The City Council of QC passed an ordinance known as the Market Code of QC, which
imposed a 5% supervision fee on gross receipts on rentals or lease of privatelyowned market spaces in QC.
In case of failure of the owners of the market spaces to pay the tax for three
consecutive months, the City shall revoke the permit of the privately-owned market
to operate.
Progressive Development Corp, owner and operator of Farmers Market, filed a
petition for prohibition against QC on the ground that the tax imposed by the Market
Code was in reality a tax on income, which the municipal corporation was prohibited
by law to impose.
Issue:
Whether or not the supervision fee is an income tax or a license fee.
Held:
It is a license fee. A LICENSE FEE is imposed in the exercise of the police power
primarily for purposes of regulation, while TAX is imposed under the taxing power
primarily for purposes of raising revenues.
If the generating of revenue is the primary purpose and regulation is merely
incidental, the imposition is a tax; but if regulation is the primary purpose, the fact
that incidentally, revenue is also obtained does not make the imposition a tax.
To be considered a license fee, the imposition must relate to an occupation or
activity that so engages the public interest in health, morals, safety, and
development as to require regulation for the protection and promotion of such
public interest; the imposition must also bear a reasonable relation to the probable
expenses of regulation, taking into account not only the costs of direct regulation
but also its incidental consequences.
In this case, the Farmers Market is a privately-owned market established for the
rendition of service to the general public. It warrants close supervision and control
by the City for the protection of the health of the public by insuring the
maintenance of sanitary conditions, prevention of fraud upon the buying public, etc.
Since the purpose of the ordinance is primarily regulation and not revenue
generation, the tax is a license fee. The use of the gross amount of stall rentals as
basis for determining the collectible amount of license tax does not, by itself,
convert the license tax into a prohibited tax on income.
Such basis actually has a reasonable relationship to the probable costs of regulation
and supervision of Progressives kind of business, since ordinarily, the higher the
amount of rentals, the higher the volume of items sold.
The higher the volume of goods sold, the greater the extent and frequency of
supervision and inspection may be required in the interest of the buying public.
3.
Commissioner of Internal Revenue vs. Algue Inc.
GR No. L-28896 | Feb. 17, 1988
Facts:
On Jan. 14, 1965, the corp received a letter from the CIR regarding its
delinquency income taxes from 1958-1959, amtg to P83,183.85
On March 12, a warrant of distraint and levy was presented to Algue Inc. thru
its counsel, Atty. Guevara, who refused to receive it on the ground of the pending
protest
Since the protest was not found on the records, a file copy from the corp was
produced and given to BIR Agent Reyes, who deferred service of the warrant
On April 7, Atty. Guevara was informed that the BIR was not taking any action
on the protest and it was only then that he accepted the warrant of distraint and
levy earlier sought to be served
On April 23, Algue filed a petition for review of the decision of the CIR with the
Court of Tax Appeals
CIR contentions:
CTA: 75K had been legitimately paid by Algue Inc. for actual services
rendered in the form of promotional fees. These were collected by the Payees for
their work in the creation of the Vegetable Oil Investment Corporation of the
Philippines and its subsequent purchase of the properties of the Philippine Sugar
Estate Development Company.
Issue:
W/N the Collector of Internal Revenue correctly disallowed the P75,000.00 deduction
claimed by Algue as legitimate business expenses in its income tax returns
Ruling:
Taxes are the lifeblood of the government and so should be collected without
unnecessary hindrance, made in accordance with law.
RA 1125: the appeal may be made within thirty days after receipt of the
decision or ruling challenged
During the intervening period, the warrant was premature and could therefore
not be served.
Originally, CIR claimed that the 75K promotional fees to be personal holding
company income, but later on conformed to the decision of CTA
There is no dispute that the payees duly reported their respective shares of
the fees in their income tax returns and paid the corresponding taxes thereon. CTA
also found, after examining the evidence, that no distribution of dividends was
involved
Algue Inc. was a family corporation where strict business procedures were not
applied and immediate issuance of receipts was not required. at the end of the year,
when the books were to be closed, each payee made an accounting of all of the
fees received by him or her, to make up the total of P75,000.00. This arrangement
was understandable in view of the close relationship among the persons in the
family corporation
The amount of the promotional fees was not excessive. The total commission
paid by the Philippine Sugar Estate Development Co. to Algue Inc. was P125K. After
deducting the said fees, Algue still had a balance of P50,000.00 as clear profit from
the transaction. The amount of P75,000.00 was 60% of the total commission. This
was a reasonable proportion, considering that it was the payees who did practically
everything, from the formation of the Vegetable Oil Investment Corporation to the
actual purchase by it of the Sugar Estate properties.
Sec. 30 of the Tax Code: allowed deductions in the net income Expenses All the ordinary and necessary expenses paid or incurred during the taxable year in
carrying on any trade or business, including a reasonable allowance for salaries or
other compensation for personal services actually rendered xxx
the burden is on the taxpayer to prove the validity of the claimed deduction
In this case, Algue Inc. has proved that the payment of the fees was
necessary and reasonable in the light of the efforts exerted by the payees in
inducing investors and prominent businessmen to venture in an experimental
enterprise and involve themselves in a new business requiring millions of pesos.
Taxes are what we pay for civilization society. Without taxes, the government
would be paralyzed for lack of the motive power to activate and operate it. Hence,
despite the natural reluctance to surrender part of one's hard earned income to the
taxing authorities, every person who is able to must contribute his share in the
running of the government. The government for its part, is expected to respond in
the form of tangible and intangible benefits intended to improve the lives of the
people and enhance their moral and material values
Algue Inc.s appeal from the decision of the CIR was filed on time with the CTA in
accordance with Rep. Act No. 1125. And we also find that the claimed deduction by
Algue Inc. was permitted under the Internal Revenue Code and should therefore not
have been disallowed by the CIR
4.
GOMEZ v. PALOMAR
GR No. L-23645, October 29, 1968
25 SCRA 827
FACTS:
Petitioner Benjamin Gomez mailed a letter at the post office in San Fernando,
Pampanga. It did not bear
the special anti-TB stamp required by the RA 1635. It was returned to the petitioner.
Petitioner now assails the
constitutionality of the statute claiming that RA 1635 otherwise known as the AntiTB Stamp law is violative of
the equal protection clause because it constitutes mail users into a class for the
purpose of the tax while leaving
untaxed the rest of the population and that even among postal patrons the statute
discriminatorily grants
exemptions. The law in question requires an additional 5 centavo stamp for every
mail being posted, and no mail
shall be delivered unless bearing the said stamp.
ISSUE:
Is the Anti-TB Stamp Law unconstitutional, for being allegedly violative of the equal
protection clause?
HELD:
No. It is settled that the legislature has the inherent power to select the subjects of
taxation and to grant
exemptions. This power has aptly been described as "of wide range and flexibility."
Indeed, it is said that in the
field of taxation, more than in other areas, the legislature possesses the greatest
freedom in classification. The
reason for this is that traditionally, classification has been a device for fitting tax
programs to local needs and
usages in order to achieve an equitable distribution of the tax burden.
The classification of mail users is based on the ability to pay, the enjoyment of a
privilege and on administrative
convenience. Tax exemptions have never been thought of as raising revenues under
the equal protection clause.
5.
Chavez vs. Ongpin
Facts:
Chavez, owner of some number of parcels of land challenges the constitutionality of
EO 73, which increased the assessment for real property taxes. Intervenor Realty
Owners Association of the Phil (ROAP) also challenged the constitutionality of EO 73
and EO 464, the latter order having been the basis for the enactment of EO 73.
Issue:
Whether EO 73 imposes unreasonable increase in real property taxes, thus, should
be declared unconstitutional.
Held:
Negative.
The attack on Executive Order No. 73 has no legal basis as the general revision of
assessments is a continuing process mandated by Section 21 of Presidential Decree
No. 464. If at all, it is Presidential Decree No. 464 which should be challenged as
constitutionally infirm. However, Chavez failed to raise any objection against said
decree. It was ROAP, the intervenor, which questioned the constitutionality thereof.
To continue collecting real property taxes based on valuations arrived at several
years ago, in disregard of the increases in the value of real properties that have
occurred since then, is not in consonance with a sound tax system. Fiscal adequacy,
which is one of the characteristics of a sound tax system, requires that sources of
revenues must be adequate to meet government expenditures and their variations.
6.
CIR vs. John Gotamco and Sons, et.al.[G.R. No. No. L-31092 February 27,
1987]
Facts:
The World Health Organization (WHO for short) is an international organization
which has a regional office in Manila. An agreement was entered into between the
Republic of the Philippines and the said Organization on July 22, 1951. Section 11 of
that Agreement provides, inter alia, that "the Organization, its assets, income and
other properties shall be: (a) exempt from all direct and indirect taxes. The WHO
decided to construct a building to house its own offices, as well as the other United
Nations offices stationed in Manila. A bidding was held for the building construction.
The WHO informed the bidders that the building to be constructed belonged to an
international organization exempted from the payment of all fees, licenses, and
taxes, and that therefore their bids "must take this into account and should not
include items for such taxes, licenses and other payments to Government
agencies." Thereafter, the construction contract was awarded to John Gotamco &
Sons, Inc. (Gotamco for short). Subsequently, the Commissioner of Internal Revenue
sent a letter of demand to Gotamco demanding payment of for the 3% contractor's
tax plus surcharges on the gross receipts it received from the WHO in the
construction of the latter's building. WHO. The WHO issued a certification that the
bid of John Gotamco & Sons, should be exempted from any taxes in connection with
the construction of the World Health Organization office building because such can
be considered as an indirect tax to WHO. However, The Commissioner of Internal
Revenue contends that the 3% contractor's tax is not a direct nor an indirect tax on
the WHO, but a tax that is primarily due from the contractor, and thus not covered
by the tax exemption agreement
Issue:
Whether or not the said 3% contractors tax imposed upon petitioner is covered by
the direct and indirect tax exemption granted to WHO by the government.
Held:
Yes. The 3% contractors tax imposed upon petitioner is covered by the direct and
indirect tax exemption granted to WHO. Hence, petitioner cannot be held liable for
such contractors tax. The Supreme Court explained that direct taxes are those that
are demanded from the very person who, it is intended or desired, should pay them;
while indirect taxes are those that are demanded in the first instance from one
person in the expectation and intention that he can shift the burden to someone
else. While it is true that the contractor's tax is payable by the contractor, However
in the last analysis it is the owner of the building that shoulders the burden of the
tax because the same is shifted by the contractor to the owner as a matter of selfpreservation. Thus, it is an indirect tax against the WHO because, although it is
payable by the petitioner, the latter can shift its burden on the WHO.
7.
Iloilo Bottlers v City of Iloilo 164 SCRA 607
Topic: Situs of Taxation and Double Taxation
FACTS:
Iloilo Bottlers Inc., a company in the business of bottling and selling soft drinks, was
demanded by the City of Iloilo to pay an amount of 59,505 in the form of an license
tax the city claims were due to it under an ordinance which was enacted on January
11, 1960 known as Ordinance No. 5, Series of 1960; which provides that
manufacturers, bottlers, and distributers of soft drinks in Iloilo are subject to a
municipal license tax of 10 centavos per case of 24 bottles. Iloilo Bottling Inc
asserted however that since their plant base has moved to municipality of Pavia
shortly after the aforementioned ordinance was enacted, they are not liable for any
taxes. The city however, still demanded taxes and also demanded back taxes under
the claim that Iloilo Bottlers is still distributing in the city of Iloilo since its transfer.
Iloilo Bottlers paid the demanded license tax and back taxes under protest. After
bringing the case to court, the courts ruled in favor of Iloilo Bottlers and declared
that Iloilo Bottlers is free from liability. The city of Iloilo then appealed this ruling,
hence this case.
ISSUE:
Whether or not the courts were correct in their initial ruling that Iloilo Bottlers Inc. Is
free from liability and directing the city of Iloilo to refund the tax money.
HELD:
No, the courts were not correct. The ruling was reversed in favor of the City of Iloilo
and Iloilo Bottlers is deemed liable for the aforementioned taxes. RATIO: Situs of
taxation (place of taxation) depends on various factors including the nature of the
tax and subject matter thereof both of which must be scrutinized to reach a fair
decision. The tax ordinance enacted by the City of Iloilo imposes a tax on persons,
firms, and corporations engaged in the business of distribution of soft-drinks,
manufacture of soft-drinks, and bottling of soft drinks within the territorial
jurisdiction of the City of Iloilo. There is no question that Iloilo Bottlers has moved
out of Iloilo Citys jurisdiction and into the municipality of Pavia where its plant now
stands therefore, the latter two conditions for taxation are no longer applicable. The
ruling now depends upon whether or not Iloilo Bottlers can be considered as
distributing its products within Iloilo city. Iloilo Bottlers disclaims liability, saying that
it does not independently distribute but rather actively sells directly to its
consumers. Distribution is therefore only incidental to its business. However, the
courts find that Iloilo Bottlers is indeed considered as distributing since while the
manufacturing and bottling occurs outside of Iloilo city, the drinks are sold in Iloilo
city to consumers in a moving store fashion. The transactions are considered to
occur within the city. The tax imposed under Ordinance No. 5 is an excise tax. By its
nature, the power to levy an excise tax depends upon the place where the business
is done ,or the occupation is engaged in, or where the transaction took place. In this
case, it is a tax on the privilege of distributing, manufacturing or bottling soft drinks.
Even though the base of operations is at Pavia, the areas of transactions where it
conducts its business are within Iloilo city limits. The Situs for excise tax is the area
of transaction, not necessarily base of operation.
10.
Republic of the Philippines vs. Cocofed
[GRs 147062-64, 14 December 2001]
Facts:
Immediately after the 1986 EDSA Revolution, then President Corazon C. Aquino
issued Executive Orders 1, 5 2 6 and 14. On the explicit premise that vast resources
of the government have been amassed by former President Ferdinand E. Marcos, his
immediate family, relatives, and close associates both here and abroad, the
Presidential Commission on Good Government (PCGG) was created by Executive
Order 1 to assist the President in the recovery of the ill-gotten wealth thus
accumulated whether located in the Philippines or abroad. Executive Order 2 stated
that the ill-gotten assets and properties are in the form of bank accounts, deposits,
trust accounts, shares of stocks, buildings, shopping centers, condominiums,
mansions, residences, estates, and other kinds of real and personal properties in the
Philippines and in various countries of the world. Executive Order 14, on the other
hand, empowered the PCGG, with the assistance of the Office of the Solicitor
General and other government agencies, inter alia, to file and prosecute all cases
investigated by it under EOs 1 and 2. Pursuant to these laws, the PCGG issued and
implemented numerous sequestrations, freeze orders and provisional takeovers of
allegedly ill-gotten companies, assets and properties, real or personal.
Among the properties sequestered by the Commission were shares of stock in the
United Coconut Planters Bank (UCPB) registered in the names of the alleged one
million coconut farmers, the so-called Coconut Industry Investment Fund
companies (CIIF companies) and Eduardo Cojuangco Jr. In connection with the
sequestration of the said UCPB shares, the PCGG, on 31 July 1987, instituted an
action for reconveyance, reversion, accounting, restitution and damages (Case
0033) in the Sandiganbayan. On 15 November 1990, upon Motion of COCOFED, the
Sandiganbayan issued a Resolution lifting the sequestration of the subject UCPB
shares on the ground that COCOFED and the so-called CIIF companies had not been
impleaded by the PCGG as parties-defendants in its 31 July 1987 Complaint for
reconveyance, reversion, accounting, restitution and damages. The Sandiganbayan
ruled that the Writ of Sequestration issued by the Commission was automatically
lifted for PCGGs failure to commence the corresponding judicial action within the
six-month period ending on 2 August 1987 provided under Section 26, Article XVIII
of the 1987 Constitution. The anti-graft court noted that though these entities were
listed in an annex appended to the Complaint, they had not been named as partiesrespondents. The Sandiganbayan Resolution was challenged by the PCGG in a
Petition for Certiorari (GR 96073) in the Supreme Court. Meanwhile, upon motion of
Cojuangco, the anti-graft court ordered the holding of elections for the Board of
Directors of UCPB. However, the PCGG applied for and was granted by this Court a
Restraining Order enjoining the holding of the election. Subsequently, the Court
lifted the Restraining Order and ordered the UCPB to proceed with the election of its
board of directors. Furthermore, it allowed the sequestered shares to be voted by
their registered owners. The victory of the registered shareholders was fleeting
because
the
Court,
acting
on
the
solicitor
generals
Motion
for
Clarification/Manifestation, issued a Resolution on 16 February 1993, declaring that
the right of COCOFED, et. al. to vote stock in their names at the meetings of the
UCPB cannot be conceded at this time. That right still has to be established by them
before the Sandiganbayan. Until that is done, they cannot be deemed legitimate
owners of UCPB stock and cannot be accorded the right to vote them. On 23
January 1995, the Court rendered its final Decision in GR 96073, nullifying and
setting aside the 15 November 1990 Resolution of the Sandiganbayan which lifted
the sequestration of the subject UCPB shares.
later, on 13 February 2001, the Board of Directors of UCPB received from the ACCRA
Law Office a letter written on behalf of the COCOFED and the alleged nameless one
million coconut farmers, demanding the holding of a stockholders meeting for the
purpose of, among others, electing the board of directors. In response, the board
approved a Resolution calling for a stockholders meeting on 6 March 2001 at 3 p.m.
On 23 February 2001, COCOFED, et al. and Ballares, et al. filed the Class Action
Omnibus Motion in Sandiganbayan Civil Cases 0033-A, 0033-B and 0033-F, asking
the Sandiganbayan to enjoin the PCGG from voting the UCPB shares of stock
registered in the respective names of the more than one million coconut farmers;
and to enjoin the PCGG from voting the SMC shares registered in the names of the
14 CIIF holding companies including those registered in the name of the PCGG. On
28 February 2001, the Sandiganbayan, after hearing the parties on oral argument,
issued the Order, authorizing COCOFED, et. al. and Ballares, et. al. as well as
Cojuangco, as are all other registered stockholders of the United Coconut Planters
Bank, until further orders from the Court, to exercise their rights to vote their shares
of stock and themselves to be voted upon in the United Coconut Planters Bank
(UCPB) at the scheduled Stockholders Meeting on 6 March 2001 or on any
subsequent continuation or resetting thereof, and to perform such acts as will
normally follow in the exercise of these rights as registered stockholders. The
Republic of the Philippines represented by the PCGG filed the petition for certiorari.
Issue:
Whether the PCGG can vote the sequestered UCPB shares.
Held:
The registered owner of the shares of a corporation exercises the right and the
privilege of voting. This principle applies even to shares that are sequestered by the
government, over which the PCGG as a mere conservator cannot, as a general rule,
exercise acts of dominion. On the other hand, it is authorized to vote these
sequestered shares registered in the names of private persons and acquired with
allegedly ill-gotten wealth, if it is able to satisfy the two-tiered test devised by the
Court in Cojuangco v. Calpo and PCGG v. Cojuangco Jr. Two clear public character
exceptions under which the government is granted the authority to vote the shares
exist (1) Where government shares are taken over by private persons or entities
who/which registered them in their own names, and (2) Where the capitalization or
shares that were acquired with public funds somehow landed in private hands. The
exceptions are based on the common-sense principle that legal fiction must yield to
truth; that public property registered in the names of non-owners is affected with
trust relations; and that the prima facie beneficial owner should be given the
privilege of enjoying the rights flowing from the prima facie fact of ownership. In
short, when sequestered shares registered in the names of private individuals or
entities are alleged to have been acquired with ill-gotten wealth, then the two-tiered
test is applied. However, when the sequestered shares in the name of private
individuals or entities are shown, prima facie, to have been (1) originally
government shares, or (2) purchased with public funds or those affected with public
interest, then the two-tiered test does not apply. Rather, the public character
exceptions in Baseco v. PCGG and Cojuangco Jr. v. Roxas prevail; that is, the
government shall vote the shares. Herein, the money used to purchase the
sequestered UCPB shares came from the Coconut Consumer Stabilization Fund
(CCSF), otherwise known as the coconut levy funds. The sequestered UCPB shares
are confirmed to have been acquired with coco levies, not with alleged ill-gotten
wealth. As the coconut levy funds are not only affected with public interest, but are
in fact prima facie public funds, the Court believes that the government should be
allowed to vote the questioned shares, because they belong to it as the prima facie
beneficial and true owner. The Sandiganbayan committed grave abuse of discretion
in grossly contradicting and effectively reversing existing jurisprudence, and in
depriving the government of its right to vote the sequestered UCPB shares which
are prima facie public in character.
11.
Republic vs. Mambulao Lumber GR L-17725 28 February 1962
FACTS:
Mambulao Lumber Company paid the Government a total of P9,127.50 as
reforestation charges. Having found liable for an aggregate amount of P4,802.37 for
forest charges, it contended that since the Republic (Government) has not made
use of the reforestation charges for reforesting the denuded area of the land
covered by the companys license, the Republic should refund said amount or, if it
cannot be refunded, at least the company should be compensated with what it
owed the Republic for reforestation charges.
ISSUE:
Whether taxes may be subject of set-off or compensation.
HELD:
Internal revenue taxes, such as forest charges, cannot be the subject of set-off or
compensation. A claim for taxes is not such a debt, demand, contract or judgment
as is allowed to be set-off under the statutes of set-off, which are construed
uniformly, in the light of public policy, to exclude the remedy in an action or any
indebtedness of the State or municipality to one who is liable to the State or
municipality for taxes. Neither are they subject of recoupment since they do not
arise out of the contract or transaction sued on.
Taxes are not in the nature of contracts between the parties but grow out of a duty
to, and are the positive acts of the government, to the making and enforcing of
which, the personal consent of individual taxpayers is not required.
12.
Pepsi Cola Bottling Company vs Municipality of Tanauan
There is no double taxation. The argument of the Municipality is well taken. Further,
Pepsi Colas assertion that the delegation of taxing power in itself constitutes
double taxation cannot be merited. It must be observed that the delegating
authority specifies the limitations and enumerates the taxes over which local
taxation may not be exercised. The reason is that the State has exclusively reserved
the same for its own prerogative. Moreover, double taxation, in general, is not
forbidden by our fundamental law unlike in other jurisdictions. Double taxation
becomes obnoxious only where the taxpayer is taxed twice for the benefit of the
same governmental entity or by the same jurisdiction for the same purpose, but not
in a case where one tax is imposed by the State and the other by the city or
municipality.
13.
LTO vs. City of Butuan; Power of LGU G. R. No. 131512.
2000
January 20,
Facts:
Relying on the fiscal autonomy granted to LGU's by the Constittuion and the
provisons of the Local Government Code, the Sangguniang Panglunsod of the City of
Butuan enacted an ordinance "Regulating the Operation of Tricycles-for-Hire,
providing mechanism for the issuance of Franchise, Registration and Permit, and
Imposing Penalties for Violations thereof and for other Purposes." The ordinance
provided for, among other things, the payment of franchise fees for the grant of the
franchise of tricycles-for-hire, fees for the registration of the vehicle, and fees for
the issuance of a permit for the driving thereof.
Petitioner LTO explains that one of the functions of the national government that,
indeed, has been transferred to local government units is the franchising authority
over tricycles-for-hire of the Land Transportation Franchising and Regulatory Board
("LTFRB") but not, it asseverates, the authority of LTO to register all motor vehicles
and to issue to qualified persons of licenses to drive such vehicles.
The RTC and CA ruled that the power to give registration and license for driving
tricycles has been devolved to LGU's.
Issue:
Whether or not, the registration of tricycles was given to LGU's, hence the
ordinance is a valid exercise of police power.
Ruling:
No, based on the-"Guidelines to Implement the Devolution of LTFRBs Franchising
Authority over Tricycles-For-Hire to Local Government units pursuant to the Local
Government Code"- the newly delegated powers to LGU's pertain to the franchising
and regulatory powers exercised by the LTFRB and not to the functions of the LTO
relative to the registration of motor vehicles and issuance of licenses for the driving
thereof. Corollarily, the exercised of a police power must be through a valid
delegation. In this case the police power of registering tricycles was not delegated
to the LGUs, but remained in the LTO.
Clearly unaffected by the Local Government Code are the powers of LTO under
R.A. No.4136 requiring the registration of all kinds of motor vehicles "used or
operated on or upon any public highway" in the country.
be construed in isolation but must be taken in harmony with the extant body of
laws.
LGUs indubitably now have the power to regulate the operation of tricycles-forhire and to grant franchises for the operation thereof, and not to issue registration.
Ergo, the ordinance being repugnant to a statute is void and ultra vires.
15.
De la LLana v Alba GR No. L-57883 March 12, 1982
FACTS:
(1) Petitioners sought to bolster their claim by imputing lack of good faith in its
enactment and characterizing as an undue delegation of legislative power to the
President his authority to fix the compensation and allowances of the Justices and
judges thereafter appointed and the determination of the date when the
reorganization shall be deemed completed
ISSUE:
Whether or not BP 129 entitled "An act reorganizing the Judiciary, Appropriating
Funds Therefor and for Other Purposes" is constitutional
HELD:
WHEREFORE, the unconstitutionality of Batas Pambansa Blg 129 not having been
shown, this petition is dismissed. No costs.
RATIO:
(1) Petitioners have convincingly shown that in their capacity as tax payers, their
standing to sue has been amply demonstrated.
(2) Confronted with what appears to be a crisis situation that calls for a remedy, the
Batasang Pambansa had no choice. It had to act, before the ailment became even
worse. Time was of the essence, and yet it did not hesitate to be duly mindful, as it
ought to be, of the extent of its coverage before enacting Batas Pambansa Blg. 129.
(3) There is no denying, therefore, the need for "institutional reforms," characterized
in the Report as "both pressing and urgent."
(4) Cabinet Bill No. 42, which later became the basis of Batas Pambansa Blg. 129,
was introduced. Stress was laid by the sponsor that the enactment of such Cabinet
Bill would, firstly, result in the attainment of more efficiency in the disposal of cases.
Secondly, the improvement in the quality of justice dispensed by the courts is
expected as a necessary consequence of the easing of the court's dockets. Thirdly,
the structural changes introduced in the bill, together with the reallocation of
jurisdiction and the revision of the rules of procedure, are designated to suit the
court system to the exigencies of the present day Philippine society, and hopefully,
of the foreseeable future."
(5) Nothing is bettersettled in our law than that the abolition of an office within the
competence of a legitimate body if done in good faith suffers from no infirmity. This
conclusion flows from the fundamental proposition that the legislature may abolish
courts inferior to the Supreme Court and therefore may reorganiz e them
territorially or otherwise thereby necessitating new appointments and commissions.
Section 11. The Members of the Supreme Court and judges of lower courts shall
hold office
during good behavior until they reach the age of seventy years or become
incapacitated to
discharge the duties of their office. The Supreme Courten banc shall have the power
to
discipline judges of lower courts, or order their dismissal by a vote of a majority of
the
Members who actually took part in the deliberations on the issues in the case and
voted
thereon.
(6) The challenged statute creates an intermediate appellate court, regional trial
courts, metropolitan trial courts of the national capital region, and other
metropolitan trial courts, municipal trial courts in cities, as well as in municipalities,
and municipal circuit trial courts. There is even less reason then to doubt the fact
that ex isting inferior courts were abolished. For the Batasang Pambansa, the
establishment of such new inferior courts was the appropriate response to the grave
and urgent problems that pressed for solution. Certainly, there could be differences
of opinion as to the appropriate remedy.
(7) I t is likewise undeniable that the Batasang Pambansa retains its full authority to
enact whatever legislation may be necessary to carryout national policy as usually