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Case Readings #2

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U.S. v. Espiritusanto
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
December 11, 1912
G.R. No. 7404
THE UNITED STATES, plaintiff-appellee,
vs.
ISIDORO ESPIRITUSANTO, defendant-appellant.
Allen A. Garner, for appellant.
Attorney-General Villamor, for appellee.
TORRES, J.:
This is an appeal by the defendant from the judgment of conviction rendered in
this case by the Honorable Herbert D. Gale, judge.
In view of certain proceedings in the justice of the peace court of Malabon and
the appeal by the defendant from the judgment therein rendered, whereby he
was sentenced to the payment of a fine of P50, to subsidiary imprisonment and
the costs, the provincial fiscal of Rizal on June 24, 1911, filed an information in
the Court of First Instance, charging Isidoro Espiritusanto with a violation of
municipal ordinance No. 1, series of 1910, enacted by the municipal council of
Malabon, Rizal, inasmuch as the accused, on November 19, 1910, was in that
pueblo found to be engaged, willfully, unlawfully, and criminally, in collecting
wagers for the gambling game known as jueteng, the tickets necessary for
conducting the same having been seized in his possession.
Therefore this cause was instituted, and after due consideration of the evidence
adduced judgment was rendered, on September 25, 1911, sentencing the
defendant, for a violation of said ordinance, to the payment of the fine previously
imposed upon him by the justice of the peace and, in case of insolvency, to the
corresponding subsidiary imprisonment, and the costs. Defendant's counsel
appealed from this judgment on the ground that said ordinance was
unconstitutional.

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The ordinance in question, exhibited on page 9 of the record, was passed by the
municipal council of Malabon on January 5, 1910, and amended at the sessions
of the 27th of march and the 14th of June of the same year. It strictly prohibits the
game of jueteng within the limits of the said pueblo and prescribes the penalties
to be imposed for its violation; and it further provides that any person who shall
collect money for wagers on the said game, or who shall keep, make, or prepare
any list of numbers, or representative signs thereof, for use in such game, shall
be deemed to be a collector of jueteng, and bankers, those who directly conduct
the game, receive from the collectors the tickets or other contrivances, and are
found in possession of the tambiolos or other articles used for the purpose of
conducting the said game; and that, finally, those who keep or
maintain jueteng games shall be deemed to be keepers or maintainers of
gambling houses, in accordance with the provisions of section 6 of Act No. 1757 .
After this judgment had been rendered, defendant's attorney presented a motion
requesting that it be set aside on the grounds that the court lacked jurisdiction to
try the case and sentence the defendant, for the reason that the ordinance under
which he was tried and convicted was unconstitutional and invalid, but the court
held in its judgment that it was no defect in an ordinance or municipal regulation
to fail to express its subject in its title. This motion was overruled.
Assuming the defendant's guilt, since he was engaged in collecting wagers for
the game of jueteng, a game prohibited by law as one of chance, and since the
judgment of conviction, rendered by the justice of the peace of the pueblo of
Malabon, was affirmed by the Court of First Instance, we shall only treat in this
decision of the argument advanced by the defense in maintaining this second
appeal, to wit, that the Court of First Instance lacked jurisdiction over the subject
matter of the suit, for the reason that the aforementioned ordinance passed by
the municipal council of the pueblo of Malabon, under which the appellant was
prosecuted and convicted, is unconstitutional.
Defendant's attorney argues that the ordinance is contrary to the municipal code
because the council exceeded the powers conferred upon it by the code which,
in subsection (u) of section 39, only authorizes it "to provide against the evils of
gambling, gambling houses, and disorderly houses of whatsoever sort, " while
the first paragraph of the said ordinance prescribes that it is strictly prohibitedto
play jueteng within the territorial limits of Malabon, and provides the penalties for
its violation.
From a perusal of the text of the ordinance referred to, it is unquestionable that it
is in accord with the provisions of Act No. 1757, inasmuch as the latter strictly
prohibits the playing of monte, jueteng, or any kind of lottery, banking or
percentage games; and the said Municipal Code, by providing in section 39 that

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the municipal council shall provide against the evils of gambling, granted it the
authority to prohibit gambling games such as those specified in the said
ordinance; therefore, the municipal council concerned acted within the powers
conferred upon it by the Municipal Code and in accordance with the provisions of
the said Act No. 1757, since the game of jueteng, as one of chance absolutely
prohibited by the latter, is not susceptible of regulation, but must be prosecuted
and completely suppressed in order to avoid repetitions of the great and farreaching social and moral evils it has been producing in the towns of these
Islands.
Hence it is undeniable that the said municipal council, in passing the said
ordinance, did not exceed its authority and kept strictly within the powers
conferred upon it by its organic law and the general laws that deal with gambling.
With regard to the allegation that the said ordinance is in conflict with the
provisions of section 5 of the Act of Congress of July 1, 1902, it must be
considered that an ordinance has not the character of and is not a general law,
but is merely a regulation of a local nature, and one perfectly valid and effective,
provided it is in harmony with the general laws in force in the Islands. Therefore,
it is not indispensable that its subject should appear in the title, for the provisions
of the said Act of Congress refer to the general laws that govern in a State and to
those enacted in these Islands which, indeed, must not embrace more than one
subject and that subject must be expressed in the title. This constitutional
provision has no application to municipal ordinances, as these do not partake of
the nature of laws, but are mere rules provided for the fulfillment of the laws. This
principle is laid down in the Encyclopedia of Law and Procedure. (Vol. 28, p. 378,
and vol. 36, p. 1021.)
For the foregoing reasons we deem it proper to affirm and do hereby affirm the
judgment from, with the costs against the appellant.
Arellano, C.J., Mapa and Johnson, JJ., concur.
Carson and Trent, JJ., dissent.

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CASCO V. GIMENEZ
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17931

February 28, 1963

CASCO PHILIPPINE CHEMICAL CO., INC., petitioner,

vs.
HON. PEDRO GIMENEZ, in his capacity as Auditor General of the Philippines,
and HON. ISMAEL MATHAY, in his capacity as Auditor of the Central Bank, respondents.
Jalandoni & Jamir for petitioner.
Officer of the Solicitor General for respondents.
CONCEPCION, J.:
This is a petition for review of a decision of the Auditor General denying a claim for refund of
petitioner Casco Philippine Chemical Co., Inc.
The main facts are not disputed. Pursuant to the provisions of Republic Act No. 2609, otherwise
known as the Foreign Exchange Margin Fee Law, the Central Bank of the Philippines issued on July
1, 1959, its Circular No. 95. fixing a uniform margin fee of 25% on foreign exchange transactions. To
supplement the circular, the Bank later promulgated a memorandum establishing the procedure for
applications for exemption from the payment of said fee, as provided in said Republic Act No. 2609.
Several times in November and December 1959, petitioner Casco Philippine Chemical Co., Inc.
which is engaged in the manufacture of synthetic resin glues, used in bonding lumber and veneer by
plywood and hardwood producers bought foreign exchange for the importation of urea and
formaldehyde which are the main raw materials in the production of said glues and paid
therefor the aforementioned margin fee aggregating P33,765.42. In May, 1960, petitioner made
another purchase of foreign exchange and paid the sum of P6,345.72 as margin fee therefor.
Prior thereto, petitioner had sought the refund of the first sum of P33,765.42, relying upon Resolution
No. 1529 of the Monetary Board of said Bank, dated November 3, 1959, declaring that the separate
importation of urea and formaldehyde is exempt from said fee. Soon after the last importation of
these products, petitioner made a similar request for refund of the sum of P6,345.72 paid as margin
fee therefor. Although the Central Bank issued the corresponding margin fee vouchers for the refund
of said amounts, the Auditor of the Bank refused to pass in audit and approve said vouchers, upon
the ground that the exemption granted by the Monetary Board for petitioner's separate importations
of urea and formaldehyde is not in accord with the provisions of section 2, paragraph XVIII of
Republic Act No. 2609. On appeal taken by petitioner, the Auditor General subsequently affirmed
said action of the Auditor of the Bank. Hence, this petition for review.

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The only question for determination in this case is whether or not "urea" and "formaldehyde" are
exempt by law from the payment of the aforesaid margin fee. The pertinent portion of Section 2 of
Republic Act No. 2609 reads:
The margin established by the Monetary Board pursuant to the provision of section
one hereof shall not be imposed upon the sale of foreign exchange for the
importation of the following:.
xxx

xxx

xxx

XVIII. Urea formaldehyde for the manufacture of plywood and hardboard when
imported by and for the exclusive use of end-users.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be
admitted and approved by this Honorable Court, without prejudice to the parties
adducing other evidence to prove their case not covered by this stipulation of facts.

1wph1.t

Petitioner maintains that the term "urea formaldehyde" appearing in this provision should be
construed as "urea and formaldehyde" (emphasis supplied) and that respondents herein, the Auditor
General and the Auditor of the Central Bank, have erred in holding otherwise. In this connection, it
should be noted that, whereas "urea" and "formaldehyde" are the principal raw materials in the
manufacture of synthetic resin glues, the National Institute of Science and Technology has
expressed, through its Commissioner, the view that:
Urea formaldehyde is not a chemical solution. It is the synthetic resin formed as a
condensation product from definite proportions of urea and formaldehyde under
certain conditions relating to temperature, acidity, and time of reaction. This produce
when applied in water solution and extended with inexpensive fillers constitutes a
fairly low cost adhesive for use in the manufacture of plywood.
Hence, "urea formaldehyde" is clearly a finished product, which is patently distinct and different from
urea" and "formaldehyde", as separate articles used in the manufacture of the synthetic resin known
as "urea formaldehyde". Petitioner contends, however, that the bill approved in Congress contained
the copulative conjunction "and" between the terms "urea" and "formaldehyde", and that the
members of Congress intended to exempt "urea" and "formaldehyde" separately as essential
elements in the manufacture of the synthetic resin glue called "urea" formaldehyde", not the latter as
a finished product, citing in support of this view the statements made on the floor of the Senate,
during the consideration of the bill before said House, by members thereof. But, said individual
statements do not necessarily reflect the view of the Senate. Much less do they indicate the intent of
the House of Representatives (see Song Kiat Chocolate Factory vs. Central Bank, 54 Off. Gaz., 615;
Mayon Motors Inc. vs. Acting Commissioner of Internal Revenue, L-15000 [March 29, 1961]; Manila
Jockey Club, Inc. vs. Games & Amusement Board, L-12727 [February 29, 1960]). Furthermore, it is
well settled that the enrolled bill which uses the term "urea formaldehyde" instead of "urea and
formaldehyde" is conclusive upon the courts as regards the tenor of the measure passed by
Congress and approved by the President (Primicias vs. Paredes, 61 Phil. 118, 120; Mabanag vs.
Lopez Vito, 78 Phil. 1; Macias vs. Comm. on Elections, L-18684, September 14, 1961). If there has
been any mistake in the printing ofthe bill before it was certified by the officers of Congress and
approved by the Executive on which we cannot speculate, without jeopardizing the principle of
separation of powers and undermining one of the cornerstones of our democratic system the
remedy is by amendment or curative legislation, not by judicial decree.

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WHEREFORE, the decision appealed from is hereby affirmed, with costs against the petitioner. It is
so ordered.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala
and Makalintal, JJ., concur.