26) Ann Brigitt Leonardo v.

CA
G.R. No. 125329 September 10, 2003
FACTS:
Ann Brigitt Leonardo was born in Manila to common-law spouses Eddie B. Hernandez and Gloria C. Leonardo. In her
birth certificate, her given surname is that of her mother, Leonardo.
Wanting to carry the surname of her father, petitioners parents executed an affidavit and sent a letter to the Local Civil
Registrar of Manila. However, the Local Civil Registrar of Manila denied the request of petitioners parents on the ground that
petitioner, being illegitimate, should carry her mothers surname as provided under Article 176 of the Family Code and also cited
Article 412 of the New Civil Code which provides that no entry in the civil register shall be changed or corrected without a judicial
order.
ISSUE: Whether or not an illegitimate child born after the effectivity of the Family Code has the right to use her fathers surname.
HELD: No. The Family Code has repealed NCC 366 which allows natural children to use the surname of the father of the child is
recognized by BOTH parents. Article 176 of the Family Code of the Philippines provides that illegitimate children shall use the
surname and shall be under the parental authority of their mother, and shall be entitled to support in conformity with this
Code. This is the rule regardless of whether or not the father admits paternity. Since petitioner was born an illegitimate child after
the Family Code took effect, she has no right to use her fathers surname. Ubi jus, ibi remedium. When there is a right, there is a
remedy. Conversely, if there is no right, there is no remedy as every remedial right is based on a substantive right.
27) BPI Leasing Corp. v. CA
G.R. No. 127624 November 18, 2003
FACTS:
BLC is a corporation engaged in the business of leasing properties. For the calendar year 1986, BLC paid the
Commissioner of Internal Revenue (CIR) a total of P1,139,041.49 representing 4% "contractors percentage tax" then imposed
by Section 205 of the National Internal Revenue Code (NIRC), based on its gross rentals from equipment leasing for the said
year amounting to P27,783,725.42.
On November 10, 1986, the CIR issued Revenue Regulation 19-86. Section 6.2 thereof provided that finance and
leasing companies registered under Republic Act 5980 shall be subject to gross receipt tax of 5%-3%-1% on actual income
earned. This means that companies registered under Republic Act 5980, such as BLC, are not liable for "contractors percentage
tax" under Section 205 but are, instead, subject to "gross receipts tax" under Section 260 (now Section 122) of the NIRC. Since
BLC had earlier paid the aforementioned "contractors percentage tax," it re-computed its tax liabilities under the "gross receipts
tax" and arrived at the amount of P361,924.44. BLC filed a claim for a refund with the CIR for the amount of P777,117.05,
representing the difference between the P1,139,041.49 it had paid as "contractors percentage tax" and P361,924.44 it should
have paid for "gross receipts tax."
The CTA dismissed the petition and denied BLCs claim of refund and held that Revenue Regulation 19-86, as
amended, may only be applied prospectively such that it only covers all leases written on or after January 1, 1987. The CTA ruled
that, since BLCs rental income was all received prior to 1986, it follows that this was derived from lease transactions prior to
January 1, 1987, and hence, not covered by the revenue regulation.
A motion for reconsideration of the CTAs decision was filed, but was denied. BLC then appealed the case to the Court
of Appeals. BLC submits that the Court of Appeals and the CTA erred in not ruling that Revenue Regulation 19-86 may be
applied retroactively so as to allow BLCs claim for a refund of P777,117.05.
Respondents, on the other hand, maintain that the provision on the date of effectivity of Revenue Regulation 19-86 is
clear and unequivocal, leaving no room for interpretation on its prospective application.
ISSUES:

1) Whether or not Revenue Regulation 19-86 is legislative or interpretative in nature.

2) Whether or not Revenue Regulation 19-86 is prospective or retroactive in nature.
3) Whether or not BPI failed to meet the quantum of evidence required in refund cases.
RULE:
1) BLC attempts to convince the Court that Revenue Regulation 19-86 is legislative rather than interpretative in character and
hence, should retroact to the date of effectivity of the law it seeks to interpret. Administrative issuances may be distinguished
according to their nature and substance: legislative and interpretative. A legislative rule is in the matter of subordinate legislation,
designed to implement a primary legislation by providing the details thereof. An interpretative rule, on the other hand, is designed
to provide guidelines to the law which the administrative agency is in charge of enforcing. The Court finds the questioned
revenue regulation to be legislative in nature. Section 1 of Revenue Regulation 19-86 plainly states that it was promulgated
pursuant to Section 277 of the NIRC. Section 277 (now Section 244) is an express grant of authority to the Secretary of Finance
to promulgate all needful rules and regulations for the effective enforcement of the provisions of the NIRC. Verily, it cannot be
disputed that Revenue Regulation 19-86 was issued pursuant to the rule-making power of the Secretary of Finance, thus making
it legislative, and not interpretative as alleged by BLC.
BLC further posits that, assuming the revenue regulation is legislative in nature, it is invalid for want of due process as no prior
notice, publication and public hearing attended the issuance thereof. To support its view, BLC cited CIR v. Fortune Tobacco, et
al., wherein the Court nullified a revenue memorandum circular which reclassified certain cigarettes and subjected them to a
higher tax rate, holding it invalid for lack of notice, publication and public hearing. In this case, Revenue Regulation 19-86 would
be beneficial to the taxpayers as they are subjected to lesser taxes. Petitioner, in fact, is invoking Revenue Regulation 19-86 as
the very basis of its claim for refund. If it were invalid, then petitioner all the more has no right to a refund.
2) Statutes, including administrative rules and regulations, operate prospectively only, unless the legislative intent to the contrary
is manifest by express terms or by necessary implication. In the present case, there is no indication that the revenue regulation
may operate retroactively. Furthermore, there is an express provision stating that it "shall take effect on January 1, 1987," and
that it "shall be applicable to all leases written on or after the said date." Being clear on its prospective application, it must be
given its literal meaning and applied without further interpretation. Thus, BLC is not in a position to invoke the provisions of
Revenue Regulation 19-86 for lease rentals it received prior to January 1, 1987.
3) Tax refunds are in the nature of tax exemptions. As such, these are regarded as in derogation of sovereign authority and are
to be strictly construed against the person or entity claiming the exemption. The burden of proof is upon him who claims the
exemption and he must be able to justify his claim by the clearest grant under Constitutional or statutory law, and he cannot be
permitted to rely upon vague implications. Nothing that BLC has raised justifies a tax refund.