Legislative Department Case Digests

1. Commission on Appointments (Secs. 18 and 19)

Daza v. Singson, 180 SCRA 496 (1989)

Facts:

Daza was chosen to be part of the Commission of Appointments and was

listed as representative of the Liberal Party. LDP was reorganized and 24 members

from the Liberal Party transferred to LDP. Because of this, the House of

Representatives revised its representation by withdrawing the seat given to Daza

and giving it to the newly-formed LDP. Singson was chosen to replace Daza, in

accordance to proportional representation.

Issues:

1. Whether the reorganized LDP can be deemed a stable political party

2. Whether it is necessary for the party to be registered to be entitled to

proportional representation in the CA

Held:

Both petitioner and respondent invoke the case of Cunanan v. Tan. In the

said case, 25 Members of the Nacionalista Party reorganized themselves and

formed the Allied Majority. 3 Nacionalista Congressmen, originally chosen, were

deprived of their seats by colleagues who joined the Allied Majority. Carlos

Cunanans ad interim appointment was rejected by the CA. Jorge Tan was designated in his place. Cunanan contended the validity of the rejection. The

Court agreed that Allied Majority was merely a temporary combination; officially,

they were still part of the Nacionalista Party. Thus, the reorganization of the CA at

that time was not based on proportional representation. The Court held that mere

shift of votes should not affect the organization of the CA, or else, it would

forever be at the mercy of the House of Representatives. The petitioner argues

that LDP is not a permanent party and has not yet achieved stability. However,

the LDP has already been in existence for a year. They command the biggest

following. They not only survived but prevailed. Regarding being a duly

registered party, the LDP was granted its registration as a political party by the

COMELEC. Thus, shattering the argument of the petitioner that registration is

required.

Coseteng v. Mitra, Jr. 187 SCRA 377 (1990)

Facts:

When Laban ng Demokratikong Pilipino was organized forming the new majority

in the House of Representatives, the House representation in the COA had to be

reorganized. COA subsequently composed of eleven members from the LDP, one

from the Liberal Party and another from Kilusan ng Bagong Lipunan. Congressman

Coseteng, lone member of the Kababaihan Para sa Inang Bayan (KAIBA) party in

the House, contested the validity of their election to the COA on the theiry that

their election was violative of the constitutional mandate of proportional

representation. She also argues that the members representing the political parties.

She alleges further that she Is qualified to sit in the COA having the support of

nine other house representatives of the minority.

Issue:

Whether or not the election to the COA violative of Article IV, Section 18?

Ruling:

No, election to the COA is not violative of Article IV, Section 18. The court held

that the validity of the election of the newly elected members of the COA eleven members from the LDP and one from the minority is unassailable. There is

no doubt that the apportionment of the House membership in the COA was done

on the basis of proportional representation of the political parties.LDP represented 80 percent of the House, and was entitled to 80 percent of the COA

(or 10 to 12 members). The remaining two seats were given to the next largest

party on the Coalesced Majority and the KBL as the principal opposition party.

Additionally, the court said that Cosetengs contention that the House members in the COA should have been nominated and elective by their respective political

parties. Since, it is provided in the Article IV, Section 18 that they be elected y the

House (not only by their party). And even presuming arguendo that KAIBA be

considered as an opposition pary, being its lone member, she represents less than

one percent of the House membership. She cannot be entitled to a seat in the

COA; having the support of the remaining nine other representatives is

insignificant.

Guingona v. Gonzales, 214 SCRA 789 (1992)

Facts:

In the 1992 elections, the Senate was composed of fifteen members from the Lakas

Demokratikong Pilipino, five from Nationalist Peoples Coalition, three from the Lakas-National Union of Christian Democrats and one from the LP-PDP-LABAN. In

accordance with the rule of proportional representation in electing the embers of

the COA, LDP was entitled to seven point five members, NPC to two point five,

LAKAS-NUCD to one point five members and LP-PDP-LABAN zero point five

members. In the approved composition of the COA, eight were from the LDP and

one from LP-PDP-LABAN. Senator Guigona now files to prohibit Senate President

Gonzales as ex officio Chairman of the COA, from recognizing the membership of

the 8th representative from the LDP and the lone member of the LP-PDP-LABAN

on the ground that it was violative of the rule of proportional representation.

Issue:

Whether or not the constitutional rule on proportional representation in the COA

violated when LDP rounded up its membership by a seat.

Ruling:

Yes, the constitutional rule on proportional representation in the COA is violated

when LDP rounded up its membership by a seat. The court held that in

converting the fractional membership into a whole, one other partys fractional membership is made greater while the other suffers diminution of its rightful

membership. Moreover, the court sad that the provision of Article VI, Section 18

on proportional representation is mandatory in character and does not leave any

discretion to the Senate to disobey or disregard the rule on proportional

representation. No party can claim more than what it entitled to them.

Furthermore, the Constitution does not contemplate that the COA must

necessarily inclu8de 12 senators and 12 members of the House of Representative

to function. Although COA rules by a majority vote of all of its members (Art VI,

Sec 18), evidently in the Article VI, Section 19 all that is required for the COA to

function is that there must be a quorum. Therefore, election of the respondent

senators as members of the COA shall be null and void.

2. Legislative Process

a. Requirements as to bills

1. As to titles of bills

Tio v. Videogram Regulatory Board, 151 SCRA 208

Facts:

A month after promulgation, PD 1994 amended the National Internal Revenue

Code providing, inter alia: "SEC. 134. Video Tapes. There shall be collected on each processed video-tape cassette, ready for playback, regardless of length, an

annual tax of five pesos; Provided, That locally manufactured or imported blank

video tapes shall be subject to sales tax." The petitioner, a videogram operator

claims that the decree is unconstitutional. The petitioner argues that the imposition

of a 30% tax on the gross receipts payable to the government is a rider and not

germane to the subject matter.

Issues:

Is the decree unconstitutional in view of the following attacks by petitioner?

1. WON Section 10 thereof, which imposes a tax of 30% on the gross receipts

payable to the local government is a RIDER and the same is not germane to the

subject matter thereof;

2. WON the tax imposed is harsh, confiscatory, oppressive and/or in unlawful

restraint of trade in violation of the due process clause of the Constitution;

3. WON there is no factual nor legal basis for the exercise by the President of the

vast powers conferred upon him by Amendment No. 6;

4. WON there is undue delegation of power and authority;

5. WON Decree is an ex-post facto law; and

6. WON is over regulation of the video industry as if it were a nuisance, which it

is not."

Ruling:

No.

1. The constitutional requirement that "every bill shall embrace only one subject

which shall be expressed in the title thereof" is sufficiently complied with if the title

be comprehensive enough to include the general purpose which a statute seeks to

achieve. The requirement is satisfied if all the parts of the statute are related. The

rule also is that the constitutional requirement as to the title of a bill should not be

so narrowly construed as to cripple or impede the power of legislation. It should

be given a practical rather than technical construction.

2. The 30% tax imposed is neither harsh nor oppressive. In imposing a tax, the

legislature acts upon its constituents. The tax imposed by the decree is not only a

regulatory but also a revenue measure prompted by the realization that earnings

of videogram establishments of around p600 million per annum have not been

subjected to tax, thereby depriving the government of an additional source of

revenue. It is similar to the 30% amusement tax imposed or borne by the movie

industry which the theater-owners pay to the government. The levy of the 30%

tax is for a public purpose. It was imposed primarily to answer the need for

regulating the video industry.

3. The president may, in order to meet the exigency, issue the necessary decrees,

orders, or letters of instructions, which sharp form part of the law of the land. The

said amendment still ponds resolution in several other cases, and the court

reserves resolution of the question raised at the proper time.

4. The grant in section 11 of the decree of authority to the board to "solicit the

direct assistance of other agencies and units of the government and deputize, for a

fixed and limited period, the heads or personnel of such agencies and units to

perform enforcement functions for the board" is not a delegation of the power to

legislate but merely a conferment of authority or discretion as to its execution,

enforcement, and implementation. Besides, in the very language of the decree, the

authority of the board to solicit such assistance is for a "fixed and limited period"

with the deputized agencies concerned being "subject to the direction and control

of the board."

5. The decree is not violative of the ex post facto principle. That section 156 of

the decree raises a violation of the decree when required proof of registration

cannot be presented is an ex post facto law is untenable. There is no question that

there is a rational connection between the fact proved, which is non-registration,

and the ultimate fact presumed which is violation of the decree, besides the fact

that the prima facie presumption of violation of the decree attaches only after a

forty-five-day period counted from its effectivity and is, therefore, neither

retrospective in character.

6. All videogram establishments in the Philippines are hereby given a period of

forty-five (45) days after the effectivity of this decree within which to register with

and secure a permit from the board to engage in the videogram business and to

register with the board all their inventories of videograms, including videotapes,

discs, cassettes or other technical improvements or variations thereof, before they

could be sold, leased, or otherwise disposed of. Thereafter any videogram found

in the possession of any person engaged in the videogram business without the

required proof of registration by the board, shall be prima facie evidence of

violation of the decree, whether the possession of such videogram be for private

showing and/or public exhibition."

6. The video industry is not being over-regulated and being eased out of existence

as if it were a nuisance. Being a relatively new industry, the need for its regulation

was apparent. Public welfare is at bottom of its enactment, considering "the unfair

competition posed by rampant film piracy and losses in government revenues due

to the drop in theatrical attendance, not to mention the fact that the activities of

video establishments are virtually untaxed since mere payment of mayor's permit

and municipal license fees are required to engage in business."

What petitioner basically questions is the necessity, wisdom and expediency of the

decree. These are primarily and exclusively a matter of legislative concern. "Only

congressional power or competence, not the wisdom of the action taken, may be

the basis for declaring a statute invalid. This is as it ought to be. The principle of

separation of powers has in the main wisely allocated the respective authority of

each department and confined its jurisdiction to such a sphere. There would then

be intrusion not allowable under the constitution if on a matter left to the

discretion of a corporate branch, the judiciary would substitute its own. If there be

adherence to the rule of law, as there ought to be, the last offender should be

courts of justice, to which rightly litigants submit their controversy precisely to

maintain unimpaired the supremacy of legal norms and prescriptions. The attack

on the validity of the challenged provision likewise insofar as there may be

objections, even if valid and cogent, on its wisdom can't be sustained."

Lidasan v. Comelec, 21 SCRA 479 (1967)

Facts:

The RA 4790, entitled "An Act Creating the Municipality of Dianaton in the

Province of Lanao del Sur, took effect on June 18, 1966, creating the municipality of Dianaton in the province of Lanao del Sur, included as part of the new

municipality a total of 12 barrios from the neighboring province of Cotabato.

Petitioner, a resident of one of the barrios taken from Cotabato, filed an action to

declare the act unconstitutional because its Title is misleading and invoked the

provision of the Constitution that the title of a bill is to be couched in a language

sufficient to notify the legislators and the public and those concerned of the

import of the single subject thereof.

Issues:

(1) WON the title is misleading.

(2) WON even the title is deemed unconstitutional the parts of the statute are

still valid.

Ruling:

1. The title of RA 4790 is misleading as it does not say that part of the territory of

the province of Cotabato is being transferred to Lanao del Sur. The subject of a

bill should be expressed in the title.

2. When part of a statute is held unconstitutional and the remainder valid, the

parts will be separated and the constitutional portion upheld. But when the parts

are mutually dependent & not separable, the entire statute must be void.

Cruz v. Paras, 123 SCRA 106 (1994)

Facts:

On November 5, 1975, two cases for prohibition with preliminary injuction were

filed with the Bulacan CFI. Petitioners were previously issued licenses by the

Municipal Mayor of BocaueTorres III since 1958, De la Cruz since 1960, Alipio since 1961, Corpuz since 1972. They invested large sums of money. Their night

clubs are well-lighted and without partitions. They do not allow the hospitality

girls to engage in immoral acts or go out with customers. These girls have their

periodic medical check-ups and none suffers from venereal diseases. Girls who fail

to submit their check-up results or those who contracted such diseases are not

allowed to work. Crime rate there is better than in other parts of Bocaue or in

other towns of Bulacan.

Their allegations: 1) Ord No. 84 is null and void as a municipality has no authority

to prohibit a lawful business, occupation or calling; 2) Ordinance is violative of

the petitioners right to die process and the equal protection of the law, as the license previously given to petitioners was in effect withdrawn without judicial

hearing; 3) That under PD 189, as amended, by PD 259, the power to license and

regulate tourist-oriented businesses including night clubs, has been transferred to

the Department of Tourism.

Answers to allegations: 1) The Municipal Council is authorized by law not only to

regulate but to prohibit the establishment, maintenance and operation of night

clubs invoking Section 2243 of the RAC, CA 601, RA Nos. 938, 978 and 1224; 2)

Ord No 84 is not violative of petitioners right to due process and the equal protection of the law, since property rights are subordinate to public interests. On

January 15, 1976 Ordinance No 84 was declared by RTC as constitutional and

valid.

RTC believes that through the implementation of this ordinance Those who lust cannot last, obedience to the mandates of good government, and cognizant of the

categorical imperatives of the current legal and social revolution, hereby upholds

in the name of police power the validity and constitutionality of Ord No. 84.

Issue:

WON a municipal corporation, Bocaue, Bulacan can prohibit the exercise of a

lawful trade, the operation of night clubs, and the pursuit of a lawful occupation,

such clubs employing hostesses.

Ruling:

No. Writ of Certiorari is granted and the decision of the lower court dated

January 15, 1976 reversed, set aside, and nullified Ord No 84, Series of 1975of the

Municipality of Bocaue is declared void and unconstitutional. The TRO issued by

this Court is hereby made permanent. No costs.

Police power is insufficient to justify the enactment of the ordinance. Through

police power, municipal corporations can enact ordinances for regulation that will

provide for the health and safety, promote the prosperity, and improve the

morals, peace, good order, comfort, and convenience of the municipality and the

inhabitants thereof, and for the protection of property therein. Laws enacted are

valid unless they go against the Constitution. If night clubs were merely then

regulated and not prohibited, the ordinance would be valid. The objective of

fostering public morals, a worthy and desirable end can be attained by a measure

that does not encompass too wide a field. The ordinance on its face is

characterized by over breadth. The purpose sought to be achieved could have

been attained by reasonable restrictions rather than by an absolute prohibition. In

the guise of police regulation, there was a clear invasion of personal or property

rights: personal, in the case of those individuals desirous of patronizing those night

clubs, and property in terms of the investments made and salaries to be earned by

those employed.

There was a reference to RA 938 enacted on June 20, 1953 entitled: An Act Granting Municipal or City Boards and Councils the Power to Regulate the

Establishment, Maintenance and Operation of Certain Places of Amusement

within Their Respective Territorial Jurisdictions. Its first section says: The municipal or city board or council shall have the power to regulate by ordinance the establishment. On May 21, 1954, the first section was amended to

include not merely the power to regulate, but likewise prohibit The title, however, remained the same, exactly worded as RA 938. The power granted

remains that of regulation, not prohibition. To construe RA 938 as allowing the

prohibition of the operation of night clubs would give rise to a constitutional

question. Article VIII, Section 19 par. 1 of the Constitution mandates: Every bill shall embrace only one subject which shall be expressed in the title thereof. It is a

well-settled principle of constitutional construction that between two possible

interpretations by one of which it will be free from constitutional infirmity and by

the other tainted by such grave defect, the former is to be preferred.

The general welfare clause, a reiteration of the Administrative Code provision, is

set forth in the first paragraph of Section 149 defining the powers and duties of

the sangguniang bayan: Enact such ordinances and issue such regulations as may be necessary to carry out and discharge the responsibilities conferred upon it by

law, and such as shall be necessary and proper to provide for the health, safetyIt shall Regulate cafes, restaurants; Regulate public dancing schools, public dance halls; Regulate the establishment and operation of billard pools. It is clear that the municipal corporations cannot prohibit the operation of night clubs. They

may be regulated, but not prevented from carrying on their business. A refusal to

grant licenses, because no such business could legally open, would be subject to

judicial correction. That is to comply with the legislative will to allow the

operation and continued existence of night clubs subject to appropriate

regulations.

This decision should not be interpreted as a retreat from its resolute stand

sustaining police power legislation to promote public morals. Distinct from Ermita-

Malate Hotel and Motel Operators Assn, Inc. v City Mayor of Manila where the

statute merely regulated the mode in which it may conduct business in order to

put an end to practices encouraging vice and morality, what is involved here is a

measure not embraced within the regulatory power but an exercise of an assumed

power to prohibit, which is unconstitutional.

Tobias v. Abalos, 239 SCRA 106 (1994)

Facts:

As taxpayers and residents of Mandaluyong, petitioners assail the constitutionality

of RA No. 7675 otherwise known as An Act Converting the Municipality of Mandaluyong into a Highly Urbanized City to be known as City of Mandaluyong.

Prior to the enactment of the statute, Mandaluyong and San Juan belonged to

one legislative district. Hon Congressional representative Hon. Ronaldo Zamora

sponsored the bill and signed by President Fidel Ramos becoming RA No. 7675. A

plebiscite was held on April 10, 1994. The turnout of the plebiscite was only

14.41% of the voting population: 18, 621 voted yes while 7,911 voted no. Thus, RA 7675 was deemed ratified and in effect.

Issues:

1) WON RA No 7675 specifically Art VIII Sec 49 thereof is unconstitutional for

being violative of three specific provisions of the Constitution. First objection is

that it contravenes the one-subject-one bill rule as enunciated in Art VI section 26(1) of the Constitution (every bill passed by the Congress shall embrace only

one subject which shall be expressed in the title thereof.) this section embraces

two principal subjects 1) the conversion of Mandaluyong into a HUC and 2) the

division of the congressional district of San Juan/Mandaluyong into two separate

districts.

2) WON second and third objection involve Art VI, Sec 5 (1) and (4) of the

Constitution. Petitioners argue that division of San Juan and Mandaluyong into

separate congressional districts had resulted in increase in the composition of the

House of representatives and that it preempts the right of Congress to reapportion

legislatives districts pursuant to Sec 5(4).

Ruling:

Contentions are devoid of merit. The petition is dismissed for lack of merit.

Ratio:

1) The creation of separate congressional district for Mandaluyong is not a subject

separate and distinct from the subject of conversion into a Highly Urbanized City

but is a natural and logical consequence of its conversion into a Highly Urbanized

City. A liberal construction of the one title-one subject rule, it should be given a practical rather than a technical construction. It should be sufficient compliance

with such requirement is the title expresses the general subject and all the

provisions germane to that general subject.

2) Statutory conversion of Mandaluyong into Highly Urbanized City with a

population of not less than 250 thousand indubitably ordains compliance with the

one city, one representative proviso in the constitutionthe said Act enjoys the

presumption of having passed through the regular congressional processes

including due consideration by the members of Congress of the minimum

requirements for the establishment of separate legislative districts. The present

limit of 250 members is not absolute. The phrase unless otherwise provided by law indicates that composition of Congress may be increased if Congress itself so mandates through a legislative enactmenttherefore increase is not unconstitutional. Congress drafted and deliberated upon and enacted the assailed

law- Congress cannot possibly preempt itself on a right which pertains to itself

(reapportioning of legislative districts. The principal subject involved in the

plebiscite was the conversion of Mandaluyong into a highly urbanized citythe inhabitants of san juan were properly excluded from the said plebiscite as they

had nothing to do with the change of status of Mandaluyong. On the issue of

GERRYMANDERING: (practice of creating legislative districts to favor a particular

candidate or party)rep Ronald Zamora, author of the law is the incumbent representative of the former San Juan/andaluyong district-by dividing the district

his constituency has in fact been diminished and not favorable to him

2. Requirements as to certain laws

a. Appropriation laws (Secs. 24, 25 and 29 [1] & [2])

Demetria v. Alba, 148 SCRA 208 (1987)

Facts:

Petitioners, in this petition for prohibition with prayer for a writ of preliminary

injunction assailed the constitutionality of the first paragraph of Section 44 of

Presidential Decree No. 1177, otherwise known as the Budget Reform Decree of 1977 on the ff. grounds:

o it infringes upon the fundamental law by authorizing the illegal transfer of

public moneys

o it is repugnant to the constitution as it fails to specify the objectives and

purposes for which the proposed transfer of funds are to be made

o it allows the President to override the safeguards, form and procedure

prescribed by the Constitution in approving appropriations

o it amounts to undue delegation of legislative powers

o the transfer of funds by the President and the implementation thereof by the

Budget Minister and the Treasurer are without or in excess of their authority and

jurisdiction

Solicitor General, for the public respondents, questioned the legal standing of

petitioners. He further contended that:

o The provision under consideration was enacted pursuant to Section 16(5),

Art.VIII of the 1973 Constitution. Prohibition will not lie form one branch of the

government to a coordinate branch to enjoin the performance of duties within

the latters sphere of responsibility. On February 27, the Court required petitioners to file a Reply to the Comment. Petitioners stated that as a result of the

change in the administration, there is a need to hold the resolution of the present

case in abeyance

The Solicitor General filed a rejoinder with a motion to dismiss setting forth as

ground therefore, abrogation of Section 16(5), Art.VIII of the 1973 Constitution by

the Freedom Constitution, rendering the petition moot and academic

Issues:

1. WON the case is justiciable

2. WON the Paragraph 1 of Section 44 of Presidential Decree No. 1177 is

unconstitutional

Ruling:

1.) Yes. The court cited Ecelio Javier v. COMELEC where it said that: This Court will not disregard and in effect condone wrong on the simplistic and tolerant

pretext that the case has become moot and academic. As regards taxpayers suit,

this Court enjoys that open discretion to entertain the same or not. Where the

legislature or the executive branch acts beyond the scope of its constitutional

powers, it becomes the duty of the judiciary to declare what the other branches of

the government had assumed to do, as void. This is the essence of judicial power

conferred by the Constitution in one Supreme Court and in such lower courts as may be established by law.

2.) Yes. Paragraph 1of Section 44 of Presidential Decree No. 1177, being repugnant

to Section 16(5) Article VIII of the 1973 Constitution, is null and void. Paragraph 1

of Section 44 provides: The President shall have the authority to transfer any fund, appropriated for the different departments, bureaus, offices and agencies of

the Executive Department, which are included in the General Appropriations Act,

to any program, project or activity of any department, bureau, or office included

in the General Appropriations Act or approved after its enactment. Section 16(5)

Article VIII reads as follows: No law shall be passed authorizing any transfer of appropriations, however, the President, the Prime Minister, the Speaker, the Chief

Justice of the Supreme Court, and the heads of constitutional commissions may by

law be authorized to augment any item in the general appropriations law for their

respective offices from savings in other items of their respective appropriations.

Prohibition to transfer was explicit and categorical.

For flexibility, the Constitution provided a leeway. The purpose and condition for

which funds may be transferred were specified. Paragraph 1 of Section 44 unduly

over-extends the privilege granted under Section 16(5), and empowers the

President to indiscriminately transfer funds from one department, bureau, office or

agency of the Executive Department, which are included in the General

Appropriations Act, to any program, project or activity of any department,

bureau, or office included in the General Appropriations Act or approved after its

enactment, without regard to whether or not the funds to be transferred are

savings, or whether or not the transfer is for the purpose of augmenting the item

to which the transfer is to be made. It completely disregards the standards set in

the fundamental law, amounting to an undue delegation of legislative power.

Guingona v. Caraque, 196 SCRA 221 (1991)

Facts:

The petition seeks the declaration of the unconstitutionality of P.D. No. 81,

Section 31 of P.D. No. 1177, and P.D. No. 1967 of the automatic appropriation

for debt service in the 1990 budget. The petition also seeks to restrain the

disbursement for debt service under the 1990 budget pursuant to said decrees. The

1990 budget consists of P98.4 Billion in automatic appropriation (with P86.8

Billion for debt service) and P155.3 Billion appropriated under Republic Act No.

6831, otherwise known as the General Appropriations Act, or a total of P233.5

Billion, 1 while the appropriations for the Department of Education, Culture and

Sports amount to P27,017,8l3,000.00.

The said automatic appropriation for debt service is authorized by P.D. No. 81,

entitled "Amending Certain Provisions of Republic Act Numbered Four Thousand

Eight Hundred Sixty, as Amended (Re: Foreign Borrowing Act), "by P.D. No. 1177,

entitled "Revising the Budget Process in Order to Institutionalize the Budgetary

Innovations of the New Society," and by P.D. No. 1967, entitled "An Act

Strengthening the Guarantee and Payment Positions of the Republic of the

Philippines on Its Contingent Liabilities Arising out of Relent and Guaranteed

Loans by Appropriating Funds For The Purpose."

Respondents contend that the petition involves a pure political question which is

the repeal or amendment of said laws addressed to the judgment, wisdom and

patriotism of the legislative body and not this Court.

Issue:

Are the questioned decrees violative of section 29(1), article VI of the constitution?

Ruling:

No. There is no provision in our Constitution that provides or prescribes any

particular form of words or religious recitals in which an authorization or

appropriation by Congress shall be made, except that it be 'made by law,' such as

precisely the authorization or appropriation under the questioned presidential

decrees. In other words, in terms of time horizons, an appropriation may be made

impliedly (as by past but subsisting legislations) as well as expressly for the current

fiscal year (as by enactment of laws by the present Congress), just as said

appropriation may be made in general as well as in specific terms. The Court finds

that R.A. No. 4860, as amended by P.D. No. 81, Section 31 of P.D. 1177 and P.D.

No. 1967 constitute lawful authorizations or appropriations, unless they are

repealed or otherwise amended by Congress. The Executive was thus merely

complying with the duty to implement the same.

There can be no question as to the patriotism and good motive of petitioners in

filing this petition. Unfortunately, the petition must fail on the constitutional and

legal issues raised. As to whether or not the country should honor its international

debt, more especially the enormous amount that had been incurred by the past

administration, which appears to be the ultimate objective of the petition, is not

an issue that is presented or proposed to be addressed by the Court. Indeed, it is

more of a political decision for Congress and the Executive to determine in the

exercise of their wisdom and sound discretion.

Philconsa v. Enriquez, G.R. No. 113105, August 19, 1994

Facts:

The General Appropriations Bill (GAB) of 1994 was passed by Congress on

December 17, 1993 and was later signed into GAA of 1994 by the President with

certain conditions manifest in his Presidential Veto Message. No step was taken by

the Congress to override such vetoes. But here were 4 cases at bench, the

petitioners all seeking judicial intervention to rule on conflicting claims of

authority between the Legislative and Executive over control of the national

budget if 1994. The constitutionality of following provisions of said GAA were

assailed:

a. the Countrywide Development Fund

b. the special provision on the realignment of allocation of Operational

Expenses

Among others, the constitutionality of the following presidential vetoes were

assailed:

a. special provision in the appropriation for debt service

b. special provisions for the AFP and DPWH

Issues:

(1) Did the Congress exceed their authority in the enactment of GAA of 1994?

(2) Did the President commit a grave abuse of discretion in the exercise of his

veto power?

Ruling:

(1) No. To the argument that the Congress encroached on Executive power

when it proposed and identified projects and activities to be funded by the

Countrywide Development Fund, the Court held that under the Constitution, the

power of the purse belongs to Congress, and such power carries with it the power to specify the project or activity to be funded under the power to law.

However, these proposals and identifications are merely recommendatory for it is

the president who shall implement them. Congress did not exceed authority here.

(2)No. To the argument that the Congress allowed a Member to transfer

appropriations when it provided fir realignment if his allocation for operational

expenses to any other expense category thereby violating Sec 25(5), Art VI of the

Constitution, the Court held that the special provision only allow the Members to

determine the necessity of realignment of the savings. It is still the Senate Pres.

And the Speaker of the House who shall see to it the constitutional provision on

transferring appropriations are observed. Additionally, to the argument that the

President cannot veto the Special Provision on the appropriation for debt service

without vetoing the entire amount appropriated for said purpose,which he did,

the Court held that such restrictive interpretation of Sec 27(2), Art VI of the

Constitution overlooks the constitutional mandate Sec 25(2) of Art VI, the any

provision in the GAB shall relate specifically to some particular appropriation

therein Inappropriate provisions have no place in an appropriations bill and can thus be vetoed separately from an item. The vetoed provision in question is

clearly an attempt to repeal the Foreign Borrowing Act and EO 292, and should

thus be done in a separate law, not in the appropriations law. The veto is valid.

The argument regarding presidential veto of the conditions set by the Congress

that only 30% of the total appropriation for the road maintenance should be

contracted out is affirmed, the Court held that the special provision is not

inappropriate. The veto is invalid. In relation to the presidential veto of the

provision on purchase of medicines by the AFP, the court held that such provision

is appropriate. Being directly related to and inseparable from the appropriation

item on purchases of medicine by the AFP, the special provision cannot be vetoed

by the president without vetoing the said item. The veto is invalid.

The presidential veto of the provision on prior approval of Congress for purchase

of military equipment, the Court held that any provisions blocking an

administrative action in implementing a law or requiring legislative approval of

executive acts must be incorporated in a separate bill. Deemed inappropriate, the

veto is valid.Presidential veto of the provision authorizing the Chief of Staff to use

appropriated savings to augment AFP pensions funds the Court held that it is in

violation of Art VI, Sec 29(1) and Sec 25(5) of the Constitution. The veto is valid.

Belgica v. Ochoa, G.R. No. 208560, November 11, 2013

Facts:

The so-called pork barrel system has been around in the Philippines since about

1922. Pork Barrel is commonly known as the lump-sum, discretionary funds of the

members of the Congress. It underwent several legal designations from

Congressional Pork Barrel to the latest Priority Development Assistance Fund or PDAF. The allocation for the pork barrel is integrated in the annual General

Appropriations Act (GAA).

Since 2011, the allocation of the PDAF has been done in the following manner:

a. P70 million: for each member of the lower house; broken down to P40 million for hard projects (infrastructure projects like roads, buildings, schools, etc.), and P30 million for soft projects (scholarship grants, medical assistance, livelihood programs, IT development, etc.);

b. P200 million: for each senator; broken down to P100 million for hard projects, P100 million for soft projects;

c. P200 million: for the Vice-President; broken down to P100 million for hard projects, P100 million for soft projects.

The PDAF articles in the GAA do provide for realignment of funds whereby

certain cabinet members may request for the realignment of funds into their

department provided that the request for realignment is approved or concurred

by the legislator concerned.

The president does have his own source of fund albeit not included in the GAA.

The so-called presidential pork barrel comes from two sources: (a) the

Malampaya Funds, from the Malampaya Gas Project this has been around since 1976, and (b) the Presidential Social Fund which is derived from the earnings of

PAGCOR this has been around since about 1983.

Motivated by the foregoing, Greco Belgica and several others, filed various

petitions before the Supreme Court questioning the constitutionality of the pork

barrel system.

ISSUES:

I. Whether or not the congressional pork barrel system is constitutional.

II. Whether or not presidential pork barrel system is constitutional.

Ruling:

I. No, the congressional pork barrel system is unconstitutional. It is

unconstitutional because it violates the following principles:

a. Separation of Powers

As a rule, the budgeting power lies in Congress. It regulates the release of funds

(power of the purse). The executive, on the other hand, implements the laws this includes the GAA to which the PDAF is a part of. Only the executive may

implement the law but under the pork barrel system, whats happening was that, after the GAA, itself a law, was enacted, the legislators themselves dictate as to

which projects their PDAF funds should be allocated to a clear act of implementing the law they enacted a violation of the principle of separation of powers. (Note in the older case of PHILCONSA vs Enriquez, it was ruled that pork

barrel, then called as CDF or the Countrywide Development Fund, was

constitutional insofar as the legislators only recommend where their pork barrel

funds go).

This is also highlighted by the fact that in realigning the PDAF, the executive will

still have to get the concurrence of the legislator concerned.

b. Non-delegability of Legislative Power

As a rule, the Constitution vests legislative power in Congress alone. (The

Constitution does grant the people legislative power but only insofar as the

processes of referendum and initiative are concerned). That being, legislative

power cannot be delegated by Congress for it cannot delegate further that which

was delegated to it by the Constitution.

c. Principle of Checks and Balances

One feature in the principle of checks and balances is the power of the president

to veto items in the GAA which he may deem to be inappropriate. But this power

is already being undermined because of the fact that once the GAA is approved,

the legislator can now identify the project to which he will appropriate his PDAF.

Under such system, how can the president veto the appropriation made by the

legislator if the appropriation is made after the approval of the GAA again, Congress cannot choose a mode of budgeting which effectively renders the constitutionally-given power of the President useless.

d. Local Autonomy

As a rule, the local governments have the power to manage their local affairs.

Through their Local Development Councils (LDCs), the LGUs can develop their

own programs and policies concerning their localities. But with the PDAF,

particularly on the part of the members of the house of representatives, whats happening is that a congressman can either bypass or duplicate a project by the

LDC and later on claim it as his own. This is an instance where the national

government (note, a congressman is a national officer) meddles with the affairs of

the local government and this is contrary to the State policy embodied in the Constitution on local autonomy. Its good if thats all that is happening under the pork barrel system but worse, the PDAF becomes more of a personal fund on the

part of legislators.

II. Yes, the presidential pork barrel is valid.

The main issue raised by Belgica et al against the presidential pork barrel is that it

is unconstitutional because it violates Section 29 (1), Article VI of the Constitution

which provides:

No money shall be paid out of the Treasury except in pursuance of an

appropriation made by law.

Belgica et al emphasized that the presidential pork comes from the earnings of the

Malampaya and PAGCOR and not from any appropriation from a particular

legislation.

The Supreme Court disagrees as it ruled that PD 910, which created the

Malampaya Fund, as well as PD 1869 (as amended by PD 1993), which amended

PAGCORs charter, provided for the appropriation, to wit:

(i) PD 910: Section 8 thereof provides that all fees, among others, collected from

certain energy-related ventures shall form part of a special fund (the Malampaya

Fund) which shall be used to further finance energy resource development and for

other purposes which the President may direct;

(ii) PD 1869, as amended: Section 12 thereof provides that a part of PAGCORs earnings shall be allocated to a General Fund (the Presidential Social Fund) which

shall be used in government infrastructure projects.

These are sufficient laws which met the requirement of Section 29, Article VI of

the Constitution. The appropriation contemplated therein does not have to be a

particular appropriation as it can be a general appropriation as in the case of PD

910 and PD 1869.

Araullo v. Aquino, G. R. No. 209287, July 1, 2014

Facts:

When President Benigno Aquino III took office, his administration noticed the

sluggish growth of the economy. The World Bank advised that the economy

needed a stimulus plan. Budget Secretary Florencio Butch Abad then came up with a program called the Disbursement Acceleration Program (DAP).

The DAP was seen as a remedy to speed up the funding of government projects.

DAP enables the Executive to realign funds from slow moving projects to priority

projects instead of waiting for next years appropriation. So what happens under the DAP was that if a certain government project is being undertaken slowly by a

certain executive agency, the funds allotted therefor will be withdrawn by the

Executive. Once withdrawn, these funds are declared as savings by the Executive and said funds will then be reallotted to other priority projects. The DAP

program did work to stimulate the economy as economic growth was in fact

reported and portion of such growth was attributed to the DAP (as noted by the

Supreme Court).

Other sources of the DAP include the unprogrammed funds from the General

Appropriations Act (GAA). Unprogrammed funds are standby appropriations

made by Congress in the GAA.

Meanwhile, in September 2013, Senator Jinggoy Estrada made an expos claiming

that he, and other Senators, received Php50M from the President as an incentive

for voting in favor of the impeachment of then Chief Justice Renato Corona.

Secretary Abad claimed that the money was taken from the DAP but was

disbursed upon the request of the Senators.

This apparently opened a can of worms as it turns out that the DAP does not only

realign funds within the Executive. It turns out that some non-Executive projects

were also funded; to name a few: Php1.5B for the CPLA (Cordillera Peoples Liberation Army), Php1.8B for the MNLF (Moro National Liberation Front),

P700M for the Quezon Province, P50-P100M for certain Senators each, P10B for

Relocation Projects, etc.

This prompted Maria Carolina Araullo, Chairperson of the Bagong Alyansang

Makabayan, and several other concerned citizens to file various petitions with the

Supreme Court questioning the validity of the DAP. Among their contentions was:

DAP is unconstitutional because it violates the constitutional rule which provides

that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law.

Secretary Abad argued that the DAP is based on certain laws particularly the GAA

(savings and augmentation provisions thereof), Sec. 25(5), Art. VI of the

Constitution (power of the President to augment), Secs. 38 and 49 of Executive

Order 292 (power of the President to suspend expenditures and authority to use

savings, respectively).

Issues:

I. Whether or not the DAP violates the principle no money shall be paid out of the Treasury except in pursuance of an appropriation made by law (Sec. 29(1), Art. VI, Constitution).

II. Whether or not the DAP realignments can be considered as impoundments by

the executive.

III. Whether or not the DAP realignments/transfers are constitutional.

IV. Whether or not the sourcing of unprogrammed funds to the DAP is

constitutional.

V. Whether or not the Doctrine of Operative Fact is applicable.

Ruling:

I. No, the DAP did not violate Section 29(1), Art. VI of the Constitution. DAP was

merely a program by the Executive and is not a fund nor is it an appropriation. It

is a program for prioritizing government spending. As such, it did not violate the

Constitutional provision cited in Section 29(1), Art. VI of the Constitution. In DAP

no additional funds were withdrawn from the Treasury otherwise, an

appropriation made by law would have been required. Funds, which were

already appropriated for by the GAA, were merely being realigned via the DAP.

II. No, there is no executive impoundment in the DAP. Impoundment of funds

refers to the Presidents power to refuse to spend appropriations or to retain or deduct appropriations for whatever reason. Impoundment is actually prohibited

by the GAA unless there will be an unmanageable national government budget

deficit (which did not happen). Nevertheless, theres no impoundment in the case at bar because whats involved in the DAP was the transfer of funds.

III. No, the transfers made through the DAP were unconstitutional. It is true that

the President (and even the heads of the other branches of the government) are

allowed by the Constitution to make realignment of funds, however, such transfer

or realignment should only be made within their respective offices. Thus, no cross-border transfers/augmentations may be allowed. But under the DAP, this

was violated because funds appropriated by the GAA for the Executive were being

transferred to the Legislative and other non-Executive agencies.

Further, transfers within their respective offices also contemplate realignment of funds to an existing project in the GAA. Under the DAP, even though some

projects were within the Executive, these projects are non-existent insofar as the

GAA is concerned because no funds were appropriated to them in the GAA.

Although some of these projects may be legitimate, they are still non-existent

under the GAA because they were not provided for by the GAA. As such, transfer

to such projects is unconstitutional and is without legal basis.

On the issue of what are savings

These DAP transfers are not savings contrary to what was being declared by the Executive. Under the definition of savings in the GAA, savings only occur, among other instances, when there is an excess in the funding of a certain project

once it is completed, finally discontinued, or finally abandoned. The GAA does

not refer to savings as funds withdrawn from a slow moving project. Thus, since the statutory definition of savings was not complied with under the DAP, there is

no basis at all for the transfers. Further, savings should only be declared at the

end of the fiscal year. But under the DAP, funds are already being withdrawn

from certain projects in the middle of the year and then being declared as

savings by the Executive particularly by the DBM.

IV. No. Unprogrammed funds from the GAA cannot be used as money source for

the DAP because under the law, such funds may only be used if there is a

certification from the National Treasurer to the effect that the revenue collections

have exceeded the revenue targets. In this case, no such certification was secured

before unprogrammed funds were used.

V. Yes. The Doctrine of Operative Fact, which recognizes the legal effects of an act

prior to it being declared as unconstitutional by the Supreme Court, is applicable.

The DAP has definitely helped stimulate the economy. It has funded numerous

projects. If the Executive is ordered to reverse all actions under the DAP, then it

may cause more harm than good. The DAP effects can no longer be undone. The

beneficiaries of the DAP cannot be asked to return what they received especially

so that they relied on the validity of the DAP. However, the Doctrine of

Operative Fact may not be applicable to the authors, implementers, and

proponents of the DAP if it is so found in the appropriate tribunals (civil, criminal,

or administrative) that they have not acted in good faith.

b. Tax laws (Secs. 24, 28, and 29[3])

Tolentino v. Secretary of Finance, G.R. No. 115445, August 25, 1994

Facts:

A law was passed, i.e. Republic Act No. 7716, or E-VAT, which seeks to widen the

tax base of the existing Value Added Tax (VAT) system and enhance its

administration by amending the National Internal Revenue Code. Such VAT is

levied on the sale, barter, or exchange of goods and properties as well as on the

sale or exchange of service.

Prior to its enactment, the law underwent series of amendments from both houses

of Congress and from the Conference Committee. In the House, it was docketed

as H. No. 11197 while Senate docketed the same as S. No. 1630.

Issue/s:

1. Does the law violate Art. III secs. 1, 4, 5 and 10 of the Constitution?

2. Does the law violate Art. VI, sec. 28, pars. 1 and 3 of the Constitution?

Ruling:

1. Same manner of revocation of exemption is being questioned by the Philippine

Press Institute (PPI) and the Philippine Bible Society (PBS). The latter invokes Art.

III, sec. 4 of the Constitution which states that No law shall be passed abridging the freedom of speech, of expression, or the press, or the right of the people

peaceably to assemble and petition the government for redress of grievances. On the other hand, the former invokes Art. III, sec. 5 of the Constitution which states

that No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof. The free exercise and enjoyment of religious profession

and worship, without discrimination or preference, shall forever be allowed. No

religious test shall be required for the exercise of civil or political rights. The revocation is, according to them, a violation of their rights as provided.

In PPIs case, if the press is now required to pay a value-added tax on its transactions, it is not because it is being singled out, much less targeted, for special

treatment but only because of the removal of the exemption previously granted

to it by law. The law would perhaps be open to the charge of discriminatory

treatment if the only privilege withdrawn had been that granted to the press. The

press is taxed on its transactions involving printing and publication, which are

different from the transactions of broadcast media which is the subject on the cases cited by PPI.

In the case of PBS, aside from the revocation, a fee is being required by Republic

Act No. 7716. However, such fee is not imposed for the exercise of a privilege but

only for the purpose of defraying part of the cost of registration. The registration

fee is thus a mere administrative fee, one not imposed on the exercise of a

privilege, much less a constitutional right.

For these, this Court holds that the law does not abridge freedom of speech,

expression or the press, nor interferes with the free exercise of religion, nor denies

to any of the parties the right to an education.

II. 2. There is no justification that Republic Act No. 7716 violates and denies

petitioners right to due process and equal protection of the laws. The absence of threat of immediate harm makes the need for judicial intervention less evident

and underscores the essential nature of petitioners attack on the law on the grounds of regressivity, denial of due process and equal protection and

impairment of contracts as a mere academic discussion. For the fact is that there

have been no notices of assessments issued to petitioners and no determination at

the administrative levels of their claims so as to illuminate the actual operation of

the law and enable this Court to reach sound judgment regarding so fundamental

questions as those raised in these suits. Moreover, this Court sees the contentions

in the following aspects: (1) the data given by the petitioners are purely academic

in nature which is, at its best, not justiciable. It is at par with academic exercise

which is not a violation to any constitutional provisions as claimed by the

petitioners; (2) It is actually a policy argument. The legislature is not required to

adhere to a policy of all or none in choosing the subject of taxation; (3) The contention that VAT will reduce the mark up of the members of Chamber of Real

Estate and Builders Association (CREBA) by as much as 85% to 90% is a mere

allegation without establishment of facts by evidence so necessary for adjudicating

the question whether the tax is oppressive and confiscatory; further debate on the

desirability and wisdom of the law should have shifted to Congress; and such

issues raised have not met the requirements of the Constitution. Finally, this Court

does not have power to render advisory opinions or even jurisdiction over

petitions for declaratory judgment.

To sum up, this Court holds that, in view of the absence of a factual foundation of

record, claims that the law is regressive, oppressive and confiscatory and that it

violates vested rights protected under the Contract Clause are prematurely raised

and do not justify the grant of prospective relief by writ of prohibition.

Petition dismissed.

Lung Center v. Q.C., G.R.No. 144104, June 29, 2004

Facts:

CA affirmed the decision of the Central Board of Assessment Appeals holding that

the lot owned by the petitioner and its hospital building constructed thereon are

subject to assessment for purposes of real property tax. Petitioner Lung Center of

the Philippines, a Non-stock and non-profit entity established by virtue of

Presidential Decree No. 1823, the registered owner of a parcel of land. Erected in

the middle of the lot is the Lung Center of the Philippines. A big space at the

ground floor is being leased to private parties, for canteen and small store spaces,

and to medical or professional practitioners who use the same as their private

clinics for their patients whom they charge for their professional services. Almost

one-half of the entire area on the left side of the building along Quezon Avenue is

vacant and idle, while a big portion on the right side, at the corner of Quezon

Avenue and Elliptical Road, is being leased for commercial purposes to a private

enterprise known as the Elliptical Orchids and Garden Center. It accepts paying

and non-paying patients. It also renders medical services to out-patients, both

paying and non-paying. Aside from its income from paying patients, the petitioner

receives annual subsidies from the government. Both the land and the hospital

building of the petitioner were assessed for real property taxes by the City

Assessor of Quezon City. Tax Declarations were issued for the land and the

hospital building. Petitioner filed a Claim for Exemption from real property taxes

with the City Assessor, on its claim that it is a charitable institution. Request was

denied, and a petition was filed before the Local Board of Assessment Appeals of

Quezon City (QC-LBAA). QC-LBAA rendered dismissed the petition and held the

petitioner liable for real property taxes.

QC-LBAAs decision was affirmed on appeal by the Central Board of Assessment Appeals of Quezon City (CBAA) which ruled that the petitioner was not a

charitable institution and that its real properties were not actually, directly and

exclusively used for charitable purposes; hence, it was not entitled to real property

tax exemption under the constitution and the law. CA rendered judgment

affirming the decision of the CBAA.

Petitioner avers that it is a charitable institution within the context of Section

28(3), Article VI of the 1987 Constitution.

Its character as a charitable institution is not altered by the fact that it admits

paying patients and renders medical services to them, leases portions of the land

to private parties, and rents out portions of the hospital to private medical

practitioners from which it derives income to be used for operational expenses.

From 1995-1999, 100% of its out-patients were charity patients and of the 282-

bed capacity, 60% is allotted to charity patients. The fact that it receives subsidies

from the government attests to its character as a charitable institution. The

exclusivity required in the Constitution does not necessarily mean solely. Even if a

portion of its real estate is leased out to private individuals from whom it derives

income, it does not lose its character as a charitable institution. Even if P.D. No.

1823 does not exempt it from the payment of real estate taxes, it is not precluded

from seeking tax exemption under the 1987 Constitution. Respondents aver that

the petitioner is not a charitable entity. Failed to prove that it is a charitable

institution and that the said property is actually, directly and exclusively used for

charitable purposes. Petitioner uses the subsidies granted by the government for

charity patients and uses the rest of its income from the property for the benefit of

paying patients, among other purposes. Petitioner failed to adduce substantial

evidence that 100% of its out-patients and 170 beds in the hospital are reserved

for indigent patients.

Issues:

1. WON the petitioner is a charitable institution within the context of PD 1823

and the 1973/1987 Constitutions and Section 234(b) of RA 7160. YES.

2. WON the real properties of the petitioner are exempt from real property taxes.

Ruling:

Petition is partially granted. QC Assessor is directed to determine the precise

portions of the land and the area which are leased to private persons, and to

compute the real property taxes due.

1. Petitioner is a charitable institution. In the legal sense, a charity may be fully

defined as a gift, to be applied consistently with existing laws, for the benefit of an

indefinite number of persons, either by bringing their minds and hearts under the

influence of education or religion, by assisting them to establish themselves in life

or otherwise lessening the burden of government. It may be applied to almost

anything that tend to promote the well-doing and well-being of social man. The

word charitable is not restricted to relief of the poor or sick. The test whether an enterprise is charitable or not is whether it exists to carry out a purpose

reorganized in law as charitable or whether it is maintained for gain, profit, or

private advantage. Under P.D. No. 1823, the petitioner was organized for the

welfare and benefit of the Filipino people principally to help combat the high

incidence of lung and pulmonary diseases in the Philippines. The medical services

of the petitioner are to be rendered to the public in general in any and all walks

of life including those who are poor and the needy without discrimination. As a

general principle, a charitable institution does not lose its character as such and its

exemption from taxes simply because it derives income from paying patients, or

receives subsidies from the government, so long as the money received is devoted

or used altogether to the charitable object which it is intended to achieve; and no

money inures to the private benefit of the persons managing or operating the

institution. The money received by the petitioner becomes a part of the trust fund

and must be devoted to public trust purposes and cannot be diverted to private

profit or benefit. Under P.D. No. 1823, the petitioner is entitled to receive

donations. The petitioner does not lose its character as a charitable institution

simply because the gift or donation is in the form of subsidies granted by the

government. There is substantial evidence that it spent its income, including the

subsidies from the government for 1991 and 1992 for its patients and for the

operation of the hospital. It even incurred a net loss.

2. Those portions of its real property that are leased to private entities are not

exempt from real property taxes as these are not actually, directly and exclusively

used for charitable purposes. The settled rule in this jurisdiction is that laws

granting exemption from tax are construed strictissimi juris against the taxpayer

and liberally in favor of the taxing power. Taxation is the rule and exemption is

the exception. The effect of an exemption is equivalent to an appropriation.

Hence, a claim for exemption from tax payments must be clearly shown and

based on language in the law too plain to be mistaken. Section 2 of Presidential

Decree No. 1823, relied upon by the petitioner, and specifically provides that the

petitioner shall enjoy the tax exemptions and privileges:

Sec. 2. Tax exemptions and privileges - Being a non-profit, non-stock corporation

organized primarily to help combat the high incidence of lung and pulmonary

diseases in the Philippines, all donations, contributions, endowments and

equipment and supplies to be imported by authorized entities or persons and by

the Board of Trustees of the Lung Center of the Philippines, Inc., for the actual use

and benefit of the Lung Center, shall be exempt from income and gift taxes, the

same further deductible in full for the purpose of determining the maximum

deductible amount under Section 30, paragraph (h), of the National Internal

Revenue Code, as amended. The Lung Center of the Philippines shall be exempt

from the payment of taxes, charges mand fees imposed by the Government or

any political subdivision or instrumentality thereof with respect to equipment

purchases made by, or for the Lung Center. The petitioner does not enjoy any

property tax exemption privileges for its real properties as well as the building

constructed thereon. If the intentions were otherwise, the same should have been

among the enumeration of tax exempt privileges under Section 2.

expressio unius est exclusio alterius, settled rule of statutory construction that the express mention of one person, thing, or consequence implies the exclusion of

all others. Premise that the legislature would not have made specified

enumeration in a statute had the intention been not to restrict its meaning and

confine its terms to those expressly mentioned. Under the Section 28(3), Article VI

of the 1987 Philippine Constitution it provides that Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit

cemeteries, and all lands, buildings, and improvements, actually, directly and

exclusively used for religious, charitable or educational purposes shall be exempt

from taxation. The tax exemption under this constitutional provision covers property taxes only.

o Chief Justice Hilario G. Davide, Jr.: what is exempted is not the institution itself;

those exempted from real estate taxes are lands, buildings and improvements

actually, directly and exclusively used for religious, charitable or educational

purposes.

Under the 1935 Constitution, ... all lands, buildings, and improvements used exclusivelyfor charitable purposes shall be exempt from taxation. However, under the 1973 and the present Constitutions, for lands, buildings, and improvements of the charitable institution to be considered exempt, the same should not only be exclusively used for charitable purposes; it is required that such property be used actually and directly for such purposes. There are substantial changes in the Constitution. Under the 1973 and 1987 Constitutions

and Rep. Act No. 7160 in order to be entitled to the exemption, the petitioner is

burdened to prove, by clear and unequivocal proof, that (a) it is a charitable

institution; and (b) its real properties are actually, directly and exclusively used for

charitable purposes for which it is organized. Exclusive is defined as possessed and

enjoyed to the exclusion of others; debarred from participation or enjoyment;

and exclusively is defined, in a manner to exclude; as enjoying a privilege exclusively. If real property is used for one or more commercial purposes, it is not exclusively used for the exempted purposes but is subject to taxation. It is not

the use of the income from the real property that is determinative of whether the

property is used for tax-exempt purposes. Petitioner failed to discharge its burden

to prove that the entirety of its real property is actually, directly and exclusively

used for charitable purposes. Portions of the hospital are used for the treatment of

patients and the dispensation of medical services to them, whether paying or non-

paying which is charitable. Other portions thereof are being leased to private

individuals for their clinics and a canteen which is not charitable. A portion of the

land is being leased to a private individual for her business enterprise under the

business name Elliptical Orchids and Garden Center which is not charitable.

In sum, portions of the land leased to private entities as well as those parts of the

hospital leased to private individuals are not exempt from such taxes. On the

other hand, the portions of the land occupied by the hospital and portions of the

hospital used for its patients, whether paying or non-paying, are exempt from real

property taxes.

Tan v. Del Rosario 237 SCRA 324 (2000)

Facts:

There are two consolidated special civil action for prohibition in this case: G.R

109289: challenged the constitutionality of RA No. 7496, commonly known as

the Simplified Net Income Taxation Scheme (SNIT). G.R 109446: challenged the

validity of Sec. 6, Revenue Regulations No. 2-93. In the first petition, the

petitioner were asserting that RA No. 7496 violates Sec, 26 (1) and Sec 28 (1) of

Art VI and Sec 1 of Art III. For their first contention, they were saying that the bills title does not express its content. The bill is entitled, An Act Adopting the Simplified Net Income Taxation Scheme For the Self-Employed and Professionals

Engaged In the Practice of Their Profession, Amending Sections 21 and 29 of the

National Internal Revenue Code, as Amended. The petitioner was saying that the

taxation contemplated on the statute is now based on gross income and not net

income since the allowance for deductible items have been reduced by the

questioned statute. Also in the first petition, the petitioner was arguing that the

tax law would not be uniform and equitable since it imposes tax on single

proprietorship and professionals differently.

In the second petition, the petitioner was saying that the respondents have

exceeded their authority in promulgating Sec 6, Revenue Regulations No. 2-93, to

carry out RA No. 7496 because it applies SNIT to partners in general professional partnerships, which in their position should have been taxed like other normal

partnerships

Issue:

1. WON the RA 7496 contemplates gross income as basis for net income so its title

stating net income as basis does not express its subject and content thus in

contravention to Sec 26 (1) of Art VI

2. WON the taxation scheme adopted by RA 7946 is not equitable and uniform,

thus contravening Sec 28(1) of Art VI

3. WON SNIT rightly applies to general professional partnership as stated in Sec 6,

Revenue Regulations No. 2-93

Ruling:

1. The court held that RA 7496 still reflects net income as basis for its taxation

scheme and thus its title correctly expresses its subject and content. Limiting or

reducing allowable deductions from gross income is not opposed to the net

income tax concept:

a. Various deductions still continue to be well provided under the new law

b. Sec 26 of Art VI is aimed to (a) prevent log-rolling legislation intended to unite

the members of the legislature who favor any one of unrelated subjects in support

of the whole act, (b) to avoid surprises or even fraud upon the legislature, and (c)

to fairly apprise the people through such publications of its proceedings as are

usually made, of the subjects of legislation. These objectives are sufficiently met by

the questioned statute.

2. The court held that the statute does not violate Sec 28 of Art VI. That taxation

shall be uniform and equitable in Sec 28(1) of Art VI shall mean that all subjects or objects of taxation similarly situated are to be treated alike both in privileges

and liabilities.

a. The system adopted in income taxation has long been a prevailing rule even

prior to Republic Act No. 7496

b. Uniformity does not mean classification as long as (1) the standards that are

used therefore are substantial and not arbitrary, (2) the categorization is germane

to achieve the legislative purpose, (3) the law applies, all things being equal, to

both present and future conditions, and (4) the classification applies equally well

to all those belonging to the same class

3. The court held that General Professional Partnership should be taxed as a

person who practices his profession alone.

Garcia v. Executive Secretary, 211 SCRA 219 (1992)

Facts:

Nov 27, 1990, President issued EO 438 which imposed, additional 5% taxes and

charges for imports including crude oil and other oil products. Subsequently

increased to 9% by EO 443 on Jan 3, 1991. On July 24 1991, Dept of Finance

requested Tariff Commission (TC) to initiate the process required by the Tariff and

Customs Code for the imposition of a levy for crude oil and other petroleum

products covered by Sec 104 of Tariff and Customs Code as amended. TC

scheduled a public hearing to give interested parties an opportunity to be heard

and to present evidence in support of their respective positions. Meantime, EO

475 was issued on Aug 15, 1991 reducing taxes to 5% except for the crude oil and

other products which remained at 9%. After the hearing, the President issued EO

478 on Aug 23, 1991 which levied a special duty of P.95/liter or P151.05 per

barrel of imported crude oil and P1.00 per liter of imptd oil products.

Petitioner assails the validity of EO 475, 478 and argues that they are violative of

Sec 24, Article VI of 1987 Constitution which states that all appropriation, revenue

or tariff bills, bills for the increase of public debt, bills of local application and

private bills shall originate exclusively in the House of Representatives, but the

Senate may propose or concur with amendments. (Not the president). Vilative

also of Sec. 401 which authorizes the president for such act only to protect local

industries but not the purpose of raising addtl revenue for the govt.

Issues:

1) WON EO 475 and 478 are constitutional 2) WON of EO 475 and 478 is

legal.

Ruling:

Prohibition and /mandamus is DISMISSED for lack of merit. Costs against the

petitioner.

1) it does not follow that EO 475 and 478 are prohibited to the President.

According to, Sec28, (2) of Article VI of the Constitution, the Congress may by

law authorize the President to fix within special limits, and subject to such

limitations and restrictions as it may impose, tariff rates, import and export

quotas, tonnage and wharf age dues and other duties or imposts within the

framework of the national development program of the Government.

The Tariff and Customs Code of the Philippines and Sec 104 and 401 are the

provisions which the President invoked in promulgating EO 475 and 478

Sec 104- imported articles have to pay the rates of duty indicated in this Section

Sec 401- For the interest of national economy, general welfare/ national security

and subject to the limitations, the president, upon the recommendation of NEDA

is empowered to a) increase not lower than the basic of 10% nor higher than

100% or remove rates b) to establish quota 30 to impose addtl duty

B. public hearing by the Commission before recommendation

C. the power of the President to increase or decrease rates

There is nothing in Sec 104 or of 401 that suggests an absolute authority. A custom

duty in the name given to taxes on the importation and exportation of

commodities and the levying of custom duties protects local industries and

simultaneously produces government revenues. Increased tariffs in the case at bar

must have protected the local crude oil industry as well. Protection of consumers

is an important dimension of the national economy, general welfare and national

security and so customs duties may be reduced or removed for the purpose of

protecting consumers from the high prices that may be otherwise impose upon the

community.

John Hay PAC v. Lim, G.R. No. 119775, Oct. 24, 2003

Facts:

Petition for prohibition, mandamus and declaratory relief with prayer for

temporary restraining order (TRO) and/or writ of injunction assailing the

constitutionality of Presidential Proclamation No. 420, Series of 1994, entitled

Creating and Designating a Portion of the Area Covered by the Former Camp John Hay as the John Hay Special Economic Zone pursuant to Republic Act No. 7227. The RA 7227: An Act Accelerating the Conversion of Military Reservations

into other Productive Uses, Creating the Bases Conversion and Development

Authority for this Purpose, Providing Funds therefor and for Other Purposes

otherwise known as Bases Conversion and Development Act of 1992. It aims to

set out policy to accelerate sound and balanced conversion into alternative

productive uses of former military bases under the 1947 Philippine-United States

of America Military Bases Agreement, namely Clark and Subic military reservations

including extension Camp John Hay Station in Baguio. It created Bases Conversion

and Development Authority (BCDA), Subic Special Economic (and free port) Zone

(Sebuc SEZ). Likewise, this act granted Subic SEZ incentives such tax and duty-free

importations, exemption of businesses from local and national taxes which also

gave authority to the President to create through executive proclamation, subject

to the concurrence of the local government units directly affected, other Special

Economic Zones (SEZ) in Clark (Pampanga), Wallace Air Station (La Union), and

Camp John Hay (Baguio). On Aug 16, 1993 the BCDA entered MoA and Escrow

Agreement with TUNTEX and ASIAWORLD, private corporations under laws of

British Virgin Islands, in preparing for a joint venture for development of Poro

Point in La Union and Camp John Hay as a premier tourist destinations and

recreation centers. Subsequently, on Dec 16, 1993 BCDA, TUNTEX and ASIAWORLD executed a Joint Venture Agreement (JVA) binding themselves to

put up a joint venture company called Baguio International Development and

Management Corporation leasing areas within Camp John Hay and Poro Point

for tourism and recreation.

The Sangguaniang Panglungsod of Baguio City passed resolutions regarding BCDA

which aims to:

to exclude all the barangays partly and totally located within Camp John Hay from the reach and coverage of any plan or program for development

- obtaining abdication, waiver or quitclaim of its ownership over home lots being

occupied by residents of 9 barangays surrounding CJH

- have 15-point concept of the development of CJH which includes protection of

the environment, making of a family-oriented tourist destination, priority in

employment of Baguio residents, free access to base area, guaranteed participation

of the city government in the management and operation of the camp, exclusion

of the previously mentioned 9 barangays, liability for local taxes of businesses.

Respondents issued Proclamation No. 420 which established a SEZ on a portion of

Camp John Hay. 2nd sentence of Section 3 of said Proclamation provided for

national and local tax exemption within and graned other economic incentives to

the John Hay Special Economic Zone. It provides that Section 3: Investment Climate in John Hay Special Economic Zone. Pursuant to Section 5(m) and Section

15 of RA No. 7227, the John Hay Poro Point Development Corporation shall

implement all necessary policies, rules, and regulations governing the zone,

including investment incentives, in consultation with pertinent government

departments. Among others, the zone shall have all the applicable incentives of

the Special Economic Zone under Section 12 of Republic Act No. 7227 and those

applicable incentives granted in the Export Processing Zones, the Omnibus

Investment Code of 1987, the Foreign Investment Act of 1991, and new

investment laws that may hereinafter be enacted.

Petitioners Allege that Proc. No. 420 grants tax exemptions is invalid and illegal as it is an unconstitutional exercise by the President of a power granted only to

the Legislature, limits the powers and interferes with the autonomy of the City of

Baguio is invalid, illegal and unconstitutional and it is unconstitutional that it

violates the rule that all taxes should be uniform and equitable. MoA having been

entered into only by direct negotiation is illegal, the terms and conditions of the

MoA is illegal and the conceptual development plan of respondents not having

undergone

Issue:

(1) W/N Proclamation No. 420 is constitutional by providing for national and

local tax exemption within and granting other economic incentives to the John

Hay Special Economic Zone. NO, 2nd sentence, Section 3 of said proclamation is

unconstitutional.

(2) W/N Proclamation No. 420 is constitutional for limiting or interfering with the

local

autonomy of Baguio City.

Ruling:

(1) The court held that the 2nd Sentence of SECTION 3 of Proclamation No. 420

is hereby declared NULL and VOID and is accordingly declared of no legal force

and effect. Public respondents are hereby enjoined from implementing the

aforesaid void provision. Proclamation No. 420, without the invalidated portion,

remains valid and effective. Under Section 12 of RA No. 7227 it is clear that

ONLY THE SUBIC SEZ which was granted by Congress with tax exemption,

investment incentives and the like. THERE IS NO EXPRESS EXTENSION OF THE

SAID PROVISION IN PRESIDENTIAL PROCLAMATION No. 420. (Section 12 kept

mentioning Subic Special Economic Zone, specifically) Also found in the deliberations of the Senate, a confirmation of the exclusivity of the tax and

investment privileges to Subic SEZ. Senator Angara: The Gentleman is absolutely correct. Mr. President. SO WE MUST CONFINE THESE POLICIES ONLY TO

SUBIC.

(2) It is the legislature, unless limited by a provision of the state constitution that

has full power to exempt any person, corporation or class of property from

taxation, its power to exempt being as broad as its power to tax. Other than the

Congress, the Constitution may itself provide for specific tax exemptions, or local

governments may pass ordinances on exemption only from local taxes. The

challenged grant of tax exemption must have concurrence of a majority of all

members of Congress. In same vein, the other kinds of privileges extended to the

John Hay SEZ are by tradition and usage for Congress to legislate upon. Tax

exemption cannot be implied as it must be categorically and un mistakably

expressed if it were the intent of the legislature to grant to the John Hay SEZ the same tax exemption and incentives given to Subic SEZ, it would have so expressly

provided in RA 7227. BCDA, under R.A 7227, is expressly entrusted with broad

rights of ownership and administration over Camp John Hay, as the governing

agency of the John Hay SEZ.

c. Appellate Jurisdiction of the Supreme Court (Sec. 30)

Fabian v. Desierto, G.R. No. 129742, September 16, 1998

Facts:

Petitioner Teresita Fabian was the major stockholder and President of PROMAT

Construction Development Corporation which was engaged in the construction

business. Private respondent Nestor Agustin was the District Engineer of the First

Metro Manila Engineering District. PROMAT participated in the bidding for

government construction projects, and private respondent, reportedly taking

advantage of his official position, inveigled petitioner into an amorous

relationship. Their affair lasted for some time, in the course of which, private

respondent gifted PROMAT with public works contracts and interceded for it in

problems concerning the same in his office. When petitioner tried to terminate

their relationship, private respondent refused and resisted her attempts to do so to

the extent of employing acts of harassment, intimidation and threats. Petitioner

filed an administrative complaint against private respondent. Ombudsman found

private respondent guilty of misconduct and meted out the penalty of suspension

without pay for 1year. After private respondent moved for reconsideration, the

Ombudsman discovered that the private respondents new counsel had been his

class