G.R. No. L-28329 August 17, 1975

COMMISSIONER OF CUSTOMS, petitioner, vs.ESSO STANDARD EASTERN, INC., (Formerly: Standard-Vacuum Refining Corp. (Phil.), respondent.

Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Antonio A. Torres and Solicitor Antonio M. Martinez for petitioner.

Carlos J. Valdez & Associates for respondent.

 

ESGUERRA, J.:

Appeal from the decision of the Court of Tax Appeals reversing the Commissioner of Customs' decision holding respondent ESSO Standard Eastern, Inc., (formerly the Standard-Vacuum Refining Corporation (Phil.) and hereinafter referred to as ESSO) liable in the total sum of P775.62 as special import tax on certain articles imported by the latter under Republic Act No. 387, otherwise known as the Petroleum Act of 1949.

Respondent ESSO is the holder of Refining Concession No. 2, issued by the Secretary of Agriculture and Natural Resources on December 9, 1957, and operates a petroleum refining plant in Limay Bataan. Under Article 103 of Republic Act No. 387 which provides: "During the five years following the granting of any concession, the concessionaire may import free of customs duty, all equipment, machinery, material, instruments, supplies and accessories," respondent imported and was assessed the special import tax (which it paid under protest) on the following separate importations:

1) One carton, scientific instruments with C & F value of assessed a special import tax in the amount of P31.98 (Airport Protest No. 10);

2) One carton of recorder parts with C & F value of $221.56; assessed special import tax in the amount of P43.82 (Airport Protest No. 11);

3) One carton of valves with C & F value of $310.58; assessed special import tax in the amount of P60.72 (Airport Protest No. 12);

4) One box of parts for Conversion boilers and Auxiliary Equipment with C & F value of $2,389.69; assessed special import tax in the amount of P467.00 (Airport Protest No. 15);

5) One carton of X-ray films with C & F value of $132.80; assessed special import tax in the amount of P26.00 (Airport Protest No. 16); and

6) One carton of recorder parts with C & F value of $750.39; assessed special import tax in the amount of P147.00 (Airport Protest No. 17). 1

The Collector of Customs on February 16, 1962, held that respondent ESSO was subject to the payment of the special import tax provided in Republic Act No. 1394, as amended by R.A. No. 2352, and dismissed the protest. 2

On March 1, 1962, respondent appealed the ruling of the Collector of Customs to the Commissioner of Customs who, on March 19, 1965, affirmed the decision of said Collector of Customs. 3

On July 2, 1965, respondent ESSO filed a petition with the Court of Tax Appeals for review of the decision of the Commissioner of Customs.

The Court of Tax Appeals, on September 30, 1967, reversed the decision of herein petitioner Commissioner of Customs and ordered refund of the amount of P775.62 to respondent ESSO which the latter had paid under protest. 4

This decision of the Court of Tax Appeals is now before this Court for review.

Petitioner contends that the special import tax under Republic Act No. 1394 is separate and distinct from the customs duty prescribed by the Tariff and Customs Code, and that the exemption enjoyed by respondent ESSO from the payment of customs duties under the Petroleum net of 1949 does not include exemption from the payment of the special import tax provided in R.A. No. 1394. 5

For its stand petitioner puts forward this rationale:

A perusal of the provisions of R.A. No. 1394 will show that the legislature considered the special import tax as a tax distinct from customs duties as witness the fact that Section 2(a) of the said law made separate mention of

customs duties and special import tax when it provided that ... if as a result of the application of the schedule therein, the total revenue derived from the customs duties and from the special import tax on goods, ... imported from the United States is less in any calendar year than the proceeds from the exchange tax imposed under Republic Act Numbered Six Hundred and One, as amended, on such goods, articles or products during the calendar year 1955, the President may, by proclamation, suspend the reduction of the special import tax for the next succeeding calendar year ....

If it were the intention of Congress to exempt the holders of petroleum refinery concessions like the protestant (respondent herein), such exemption should have been clearly stated in the statute. Exemptions are never presumed. They must be expressed in the clearest and most unambiguous language and not left to mere implication. 6

Specifically, petitioner in his brief submitted two assignment of errors allegedly committed by the Court of Tax Appeals in the controverted decision, to wit:

1st assignment of error:

THE COURT OF TAX APPEALS ERRED IN HOLDING THAT THE TERM "CUSTOMS DUTY" IN ARTICLE 103 OF REPUBLIC ACT NO. 387 INCLUDES THE SPECIAL IMPORT TAX IMPOSED BY REPUBLIC ACT NO. 1394;

2nd assignment of error:

THE COURT OF TAX APPEALS ERRED IN HOLDING THAT EXEMPTION FROM PAYMENT OF CUSTOMS DUTIES UNDER REPUBLIC ACT NO. 387 INCLUDES EXEMPTION FROM PAYMENT OF THE SPECIAL IMPORT TAX.

On the other hand, the Court of Tax Appeals rationalized the ground for its ruling thus:

If we are to adhere, as we should, to the plain and obvious meaning of words in consonance with settled rules of interpretation, it seems clear that the special import tax is an impost or a charge on the importation or bringing into the Philippines of all goods, articles or products subject

thereto, for the phrase "import tax on all goods, articles or products imported or brought into the Philippines" in explicit and unambiguous terms simply means customs duties. It is hardly necessary to add that "customs duties" are simply taxes assessed on merchandise imported from, or exported to a foreign country.

And being a charge upon importation, the special import tax is essentially a customs duty, or at least partakes of the character thereof.

Citing numberous American decisions and definitions of terms "customs duties," "duties," "imposts," "levies," "tax," and "tolls," and their distinctions, including some pronouncements of this Court on the subject, the Court of Tax Appeals in its decision, went to great lengths to show that the term "special import tax" as used in R.A. No. 1394 includes customs duties. It sees the special import tax as nothing but an impost or a charge on the importation or bringing into the Philippines of goods, articles or products. 7

To clinch its theory the Court of Tax Appeals cited the similarity in the basis of computation of the customs duty as well as the similarity in the phraseology of Section 3 of Republic Act No. 1394 (which established the special import tax) and Section 9-01 of the Tariff & Customs code (the basic law providing for and regulating the imposition of customs duties and imposts on importations). 8

For its part, private respondent, ESSO, in its answer to the petition, leaned heavily on the same arguments as those given by the Tax Court, the burden of which is that the special import tax law is a customs law. 9

It is clear that the only issue involved in this case is whether or not the exemption enjoyed by herein private respondent ESSO Standard Eastern, Inc. from customs duties granted by Republic Act No. 387, or the Petroleum Act of 1949, should embrace or include the special import tax imposed by R.A. No. 1394, or the Special Import Tax Law.

We have examined the records of this case thoroughly and carefully considered the arguments presented by both parties and We are convinced that the only thing left to this Court to do is to determine the intention of the legislature through interpretation of the two statutes involved, i.e., Republic Act No. 1394 and Republic Act No. 387.

It is a well accepted principle that where a statute is ambiguous, as Republic Act No. 1394 appears to be, courts may examine both the printed pages of the published Act as well as those extrinsic matters that may aid in construing the meaning of the statute, such as the

history of its enactment, the reasons for the passage of the bill and purposes to be accomplished by the measure. 10

Petitioner in the first assignment of error took exception to the finding of the Court of Tax Appeals that "The language of Republic Act No. 1394 seems to leave no room for doubt that the law intends that the phrase 'Special import tax' is taken to include customs duties" and countered with the argument that "An examination of the provisions of Republic Act No. 1394 will indubitably reveal that Congress considered the special import tax as a tax different from customs duties, as may be seen from the fact that Section 2(a) of said law made separate mention of customs duties and special import tax ..." Thus:

... if as a result of the application of the schedule therein the total revenue derived from the customs duties and from the special import tax on goods, ... imported from the United States is less in any calendar year than the proceeds from the exchange tax imposed under Republic Act Numbered Six Hundred and One, as amended, on such goods, articles or products during the calendar year 1955, the President may, by proclamation, suspend the reduction of the special import tax for the next succeeding calendar year ...

Petitioner further argues:

Customs duties are prescribed by the Tariff and Customs Code, while the special import tax is provided for by Republic Act No. 1394. If our legislature had intended to classify the special import tax as customs duty, the said Art would not have expressly exempted from payment of the special Import tax importations of machinery, equipment, accessories, and spare parts for use of industries, without distinguishing whether the industries referred to are the industries exempt from the payment of Customs duties or the non-exempt ones (Sec. 6). It is sufficient that the imported machinery, etc., is for the use of any industry. 11

A study of petitioner's two assignments of errors shows that one is anchored on practically the same ground as the other: both involve the interpretation of R.A. No. 387 (The Petroleum Act of 1949) in relation with R.A. No. 1394 (The Special Import Tax Law).

While the petitioner harps on particular clauses and phrases found in the two cited laws, which in a way was likewise resorted to by the respondent ESSO, it would do Us well to restate the fundamental rule in the construction of a statute.

In order to determine the true intent of the legislature, the particular clauses and phrases of the statute should not be taken as detached and isolated expressions, but the whole and every part thereof must be considered in fixing the meaning of any of its parts. In fact every statute should receive such construction as will make it harmonize with the pre-existing body of laws. Antagonism between the Act to be interpreted and existing or previous laws is to be avoided, unless it was clearly the intention of the legislature that such antagonism should arise and one amends or repeals the other, either expressly or by implication.

Another rule applied by this Court is that the courts may take judicial notice of the origin and history of the statutes which they are called upon to construe and administer, and of facts which affect their derivation, validity and operation. 12

Applying the above stated rules and principles, let us consider the history, the purpose and objectives of Republic Act No. 387 as it relates to Republic Act No. 1394 and other laws passed by the Congress of the Philippines insofar as they relate to each other.

Republic Act No. 387, the Petroleum Act of 1949, has this for its title, to wit:

AN ACT TO PROMOTE THE EXPLORATION, DEVELOPMENT, EXPLOITATION, AND UTILIZATION OF THE PETROLEUM RESOURCES OF THE PHILIPPINES; TO ENCOURAGE THE CONSERVATION OF SUCH PETROLEUM RESOURCES; TO AUTHORIZE THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES TO CREATE AN ADMINISTRATION UNIT AND A TECHNICAL BOARD IN THE BUREAU OF MINES; TO APPROPRIATE FUNDS THEREFORE; AND FOR OTHER PURPOSES.

Art. 103 of said Act reads:

ART. 103. Customs duties. — During the five years following the granting of any concessions, the concessionaire may import free of customs duty, all equipment, machinery, material, instruments, supplies and accessories.

xxx xxx xxx

Art. 102 of the Same law insofar as pertinent, provides:

ART. 102. Work obligations, taxes, royalties not to be charged. — ...; nor shall any other special taxes or levies be applied to such concessions, nor shall concessionaires under this Act be subjected to any provincial, municipal, or other local taxes or levies; nor shall any sales tax be charged on any petroleum produced from the concession or portion thereof, manufactured by the concessionaire and used in the working of his concession. ....

Art. 104, still of the same Act, reads:

ART. 104. No export to be imposed. — No export tax shall be levied upon petroleum produced from concessions granted under this Act.

The title of Republic Act No. 387 and the provisions of its three articles just cited give a clue to the intent of the Philippine legislature, which is to encourage the exploitation and development of the petroleum resources of the country. Through the instrumentality of said law, it declared in no uncertain terms that the intensification of the exploration for petroleum must be carried on unflinchingly even if, for the time being, no taxes, both national and local, may be collected from the industry. This is the unequivocal intention of the Philippine Congress when the language of the Petroleum Act is examined. Until this law or any substantial portion thereof is clearly amended or repealed by subsequent statutes, the intention of the legislature must be upheld.

Against this unambiguous language of R.A. No. 387, there is the subsequent legislation, R.A. No. 1394, the Special Import Tax Law, which, according to the herein petitioner, shows that the legislature considered the special import tax as a tax distinct from customs duties.

Republic Act No. 1394, otherwise known as the Special Import Tax Law, is entitled as follows:

AN ACT TO IMPOSE A SPECIAL IMPORT TAX ON ALL GOODS, ARTICLES OR PRODUCTS IMPORTED OR BROUGHT INTO THE PHILIPPINES, AND TO REPEAL REPUBLIC ACTS NUMBERED SIX HUNDRED AND ONE, EIGHT HUNDRED AND FOURTEEN, EIGHT HUNDRED AND SEVENTY-ONE, ELEVEN HUNDRED AND SEVENTY-FIVE. ELEVEN HUNDRED AND NINETY-SEVEN AND THIRTEEN HUNDRED AND SEVENTY FIVE.

The title indicates unmistakably that it is repealing six prior statutes. As will be seen later, all these laws dealt with the imposition of a special excise tax on foreign exchange or other form of levy on importation of goods into the country.

Section I of Republic Act No. 1394 reads as follows:

SECTION 1. Except as herein otherwise provided, there shall be levied, collected and paid as special import tax on all goods, articles or products imported or brought into the Philippines, irrespective of source, during the period and in accordance with the rates provided for in the following schedule:

xxx xxx xxx

It would appear that by the provision of Section 1 of this Act, the pertinent provision of the Petroleum Law, for which there appears to be no proviso to the contrary has been modified or altered.

Section 6 of Republic Act No. 1394 declares that the tax provided for in its Section I shall not be imposed against importation into the Philippines of machinery and/or raw materials to be used by new and necessary industries as determined in accordance with R A. No. 901 and a long list of other goods, articles, machinery, equipment, accessories and others.

We shall now examine the six statutes repealed by R.A. No. 1394, namely:

R.A. No. 601 is an Act imposing a special excise tax of 17% on foreign exchange sold by the Central Bank or its agents. This is known as the Exchange Tax Law;

R.A. No. 814 amended Sections one, two and five and repealed Sections three and four of R.A. No. 601;

R.A. No. 871 amended Sections one and two of R.A. No. 601, as amended earlier by R.A. No. 814;

R.A. No. 1175 amended further Sections one and two of R.A. No. 601, as amended;

R.A. No. 1197 amended furthermore R.A. No. 601 as amended previously by R.A. No. 1175;

R.A. No. 1375 amended Sections one and two of R.A. No. 601 as amended by R.A. Nos. 1175 and 1197.

As can be seen from the foregoing, in one fell swoop, Republic Act No. 1394 repealed and revoked six earlier statutes which had something to do with the imposition of special levies and/or exemption of certain importations from the burden of the special import taxes or levies. On the other hand, it is apparent that R.A. No. 387, the Petroleum Act, had been spared from the pruning knife of Congress, although this latter law had granted more concessions and tax exemption privileges than any of the statutes that were amended, repealed or revoked by R.A. No. 1394. The answer must be that the Congress of the Philippine saw fit to preserve the privileges granted under the Petroleum Law of 1949 in order to keep the door open to the exploitation and development of the petroleum resources of the country with such incentives as are given under that law.

This ascertained will and intention of the legislature finds a parallelism in a case brought earlier before this Court.

A fishpond owner was slapped with taxes as a "merchant" by the Collector of Internal Revenue. He paid under protest and filed an action to recover the taxes paid, claiming that he was an agriculturist and not a merchant. When this Court was called upon to interpret the provisions of the Internal Revenue Law on whether fish is an agricultural product which falls under the exemption provisions of said law, it inquired into the purpose of the legislature in establishing the exemption for agricultural products. We held:

The first inquiry, therefore, must relate to the purpose the legislature had in mind in establishing the exemption contained in the clause now under consideration. It seems reasonable to assume that it was due to the belief on the part of the law-making body that by exempting agricultural products from this tax the farming industry would be favored and the development of the resources of the country encouraged. .... 13

Having this in mind, particularly the manner in which extrinsic aids the history of the enactment of the statute and purpose of the legislature in employing a clause or provision in the law had been applied in determining the true intent of the lawmaking body, We are

convinced that R.A. No. 387, The Petroleum Act of 1949, was intended to encourage the exploitation, exploration and development of the petroleum resources of the country by giving it the necessary incentive in the form of tax exemptions. This is the raison d etre for the generous grant of tax exemptions to those who would invest their financial resources towards the achievement of this national economic goal.

On the contention of herein petitioner that the exemptions enjoyed by respondent ESSO under R.A. No. 387 have been abrogated by R.A. No. 1394, We hold that repeal by implication is not favored unless it is manifest that the legislature so intended. As laws are presumed to be passed with deliberation and with full knowledge of all existing ones on the subject, it is logical to conclude that in passing a statute it was not intended to interfere with or abrogate any former law relating to the same matter, unless the repugnancy between the two is not only irreconcilable but also clear and convincing as a result of the language used, or unless the latter act fully embraces the subject matter of the earlier. 14

As observed earlier, Congress lined up for revocation by Republic Act No. 1394 six statutes dealing with the imposition of special imposts or levies or the granting of exemptions from special import taxes. Yet, considering the tremendous amount of revenues it was losing under the Petroleum Law of 1949, it failed to include the latter statute among those it chose to bury by the Special Import Taw Law. The reason for this is very clear: The legislature wanted to continue the incentives for the continuing development of the petroleum industry.

It is not amiss to mention herein passing that contrary to the theory of the herein petitioner, R.A. No. 387 had not been repealed by R.A. No. 2352 which expressly abrogated Section 6 of R.A. No. 1394 but did not repeal any part of R.A. No. 387. Therefore, the exemption granted by Republic Act No. 387 still stands.

WHEREFORE, taking into consideration the weight given by this Court to the findings and conclusions of the Court of Tax Appeals on a matter it is well-equipped to handle, which findings and conclusions We find no reason to overturn, the petition of the Commissioner of Customs to reverse the decision of the Court of Tax Appeals should be, as it is hereby, denied.

No costs.

SO ORDERED.

G.R. No. L-33693-94 May 31, 1979

MISAEL P. VERA, as Commissioner of Internal Revenue, and THE FAIR TRADE BOARD, petitioner, vs.HON. SERAFIN R. CUEVAS, as Judge of the Court of First Instance of Manila, Branch IV, INSTITUTE OF EVAPORATED FILLED MILK MANUFACTURERS OF THE PHILIPPINES, INC., CONSOLIDATED MILK COMPANY (PHIL.) INC., and MILK INDUSTRIES, INC., respondents.

Solicitor General Felix Q. Antonio and Solicitor Bernardo P. Pardo for petitioners.

Sycip, Salazar, Luna, Manalo & Feliciano for private respondents.

 

DE CASTRO, J.:

This is a petition for certiorari with preliminary injunction to review the decision rendered by respondent judge, in Civil Case No. 52276 and in Special Civil Action No. 52383 both of the Court of First Instance of Manila.

Plaintiffs, in Civil Case No. 52276 private respondents herein, are engaged in the manufacture, sale and distribution of filled milk products throughout the Philippines. The products of private respondent, Consolidated Philippines Inc. are marketed and sold under the brand Darigold whereas those of private respondent, General Milk Company (Phil.), Inc., under the brand "Liberty;" and those of private respondent, Milk Industries Inc., under the brand "Dutch Baby." Private respondent, Institute of Evaporated Filled Milk Manufacturers of the Philippines, is a corporation organized for the principal purpose of upholding and maintaining at its highest the standards of local filled milk industry, of which all the other private respondents are members.

Civil Case No. 52276 is an action for declaratory relief with ex-parte petition for preliminary injunction wherein plaintiffs pray for an adjudication of their respective rights and obligations in relation to the enforcement of Section 169 of the Tax Code against their filled milk products.

The controversy arose from the order of defendant, Commissioner of Internal Revenue now petitioner herein, requiring plaintiffs- private respondents to withdraw from the market all of their filled milk products which do not bear the inscription required by Section 169 of the Tax Code within fifteen (15) days from receipt of the order with the explicit warning that failure of plaintiffs' private respondents to comply with said order will result in the institution of the necessary action against any violation of the aforesaid order. Section 169 of the Tax Code reads as follows:

Section 169. Inscription to be placed on skimmed milk. — All condensed skimmed milk and all milk in whatever form, from which the fatty part has been removed totally or in part, sold or put on sale in the Philippines shall be clearly and legibly marked on its immediate containers, and in all the language in which such containers are marked, with the words, "This milk is not suitable for nourishment for infants less than one year of age," or with other equivalent words.

The Court issued a writ of preliminary injunction dated February 16, 1963 restraining the Commissioner of Internal Revenue from requiring plaintiffs' private respondents to print on the labels of their rifled milk products the words, "This milk is not suitable for nourishment for infants less than one year of age or words of similar import, " as directed by the above quoted provision of Law, and from taking any action to enforce the above legal provision against the plaintiffs' private respondents in connection with their rifled milk products, pending the final determination of the case, Civil Case No. 52276, on the merits.

On July 25, 1969, however, the Office of the Solicitor General brought an appeal from the said order by way of certiorari to the Supreme Court. 1 In view thereof, the respondent court in the meantime suspended disposition of these cases but in view of the absence of any injunction or restraining order from the Supreme Court, it resumed action on them until their final disposition therein.

Special Civil Action No. 52383, on the other hand, is an action for prohibition and injunction with a petition for preliminary injunction. Petitioners therein pray that the respondent Fair Trade Board desist from further proceeding with FTB I.S. No. I . entitled "Antonio R. de Joya vs. Institute of Evaporated Milk Manufacturers of the Philippines, etc." pending final determination of Civil Case No. 52276. The facts of this special civil action show that on December 7, 1962, Antonio R. de Joya and Sufronio Carrasco, both in their individual capacities and in their capacities as Public Relations Counsel and President of the Philippine Association of Nutrition, respectively, filed FTB I.S. No. 1 with Fair Trade Board for misleading advertisement, mislabeling and/or misbranding. Among other things, the

complaint filed include the charge of omitting to state in their labels any statement sufficient to Identify their filled milk products as "imitation milk" or as an imitation of genuine cows milk. and omitting to mark the immediate containers of their filled milk products with the words: "This milk is not suitable for nourishment for infants less than one year of age or with other equivalent words as required under Section 169 of the Tax Code. The Board proceeded to hear the complaint until it received the writ of preliminary injunction issued by the Court of First Instance on March 19, 1963.

Upon agreement of the parties, Civil Case No. 52276 and Special Civil Action No. 52383 were heard jointly being intimately related with each other, with common facts and issues being also involved therein. On April 16, 1971, the respondent court issued its decision, the dispositive part of which reads as follows:

Wherefore, judgment is hereby rendered:

In Civil Case No. 52276:

(a) Perpetually restraining the defendant, Commissioner of Internal Revenue, his agents, or employees from requiring plaintiffs to print on the labels of their filled milk products the words: "This milk is not suitable for nourishment for infants less than one year of age" or words with equivalent import and declaring as nun and void and without authority in law, the order of said defendant dated September 28, 1961, Annex A of the complaint, and the Ruling of the Secretary of Finance, dated November 12, 1962, Annex G of the complaint; and

In Special Civil Action No. 52383:

(b) Restraining perpetually the respondent Fair Trade Board, its agents or employees from continuing in the investigation of the complaints against petitioners docketed as FTB I.S. No. 2, or any charges related to the manufacture or sale by the petitioners of their filled milk products and declaring as null the proceedings so far undertaken by the respondent Board on said complaints. (pp. 20- 21, Rollo).

From the above decision of the respondent court, the Commissioner of Internal Revenue and the Fair Trade Board joined together to file the present petition for certiorari with preliminary injunction, assigning the following errors:

I. THE LOWER COURT ERRED IN RULING THAT SEC. TION 169 OF THE TAX CODE HAS BEEN REPEALED BY IMPLICATION.

II. THE LOWER COURT ERRED IN RULING THAT SECTION 169 OF THE TAX CODE HAS LOST ITS TAX PURPOSE, AND THAT COMMISSIONER NECESSARILY LOST HIS AUTHORITY TO ENFORCE THE SAME AND THAT THE PROPER AUTHORITY TO PROMOTE THE HEALTH OF INFANTS IS THE FOOD AND DRUG ADMINISTRATION, THE SECRETARY OF HEALTH AND THE SECRETARY OF JUSTICE, AS PROVIDED FOR IN RA 3720, NOT THE COMMISSIONER OF INTERNAL REVENUE.

III. THE LOWER COURT ERRED IN RULING THAT THE POWER TO INVESTIGATE AND TO PROSECUTE VIOLATIONS OF FOOD LAWS IS ENTRUSTED TO THE FOOD AND DRUG INSPECTION, THE FOOD AND DRUG ADMINISTRATION, THE SECRETARY OF HEALTH AND THE SECRETARY OF JUSTICE, AND THAT THE FAIR TRADE BOARD IS WITHOUT JURISDICTION TO INVESTIGATE AND PROSECUTE ALLEGED MISBRANDING, MISLABELLING AND/OR MISLEADING ADVERTISEMENT OF FILLED MILK PRODUCTS. (pp, 4-5, Rollo).

The lower court did not err in ruling that Section 169 of the Tax Code has been repealed by implication. Section 169 was enacted in 1939, together with Section 141 (which imposed a Specific tax on skimmed milk) and Section 177 (which penalized the sale of skimmed milk without payment of the specific tax and without the legend required by Section 169). However, Section 141 was expressly repealed by Section 1 of Republic Act No. 344, and Section 177, by Section 1 of Republic Act No. 463. By the express repeal of Sections 141 and 177, Section 169 became a merely declaratory provision, without a tax purpose, or a penal sanction.

Moreover, it seems apparent that Section 169 of the Tax Code does not apply to filled milk. The use of the specific and qualifying terms "skimmed milk" in the headnote and "condensed skimmed milk" in the text of the cited section, would restrict the scope of the general clause "all milk, in whatever form, from which the fatty pat has been removed totally or in part." In other words, the general clause is restricted by the specific term "skimmed milk" under the familiar rule of ejusdem generis that general and unlimited terms are restrained and limited by the particular terms they follow in the statute.

Skimmed milk is different from filled milk. According to the "Definitions, Standards of Purity, Rules and Regulations of the Board of Food Inspection," skimmed milk is milk in whatever form from which the fatty part has been removed. Filled milk, on the other hand, is any milk, whether or not condensed, evaporated concentrated, powdered, dried, dessicated, to which has been added or which has been blended or compounded with any fat or oil other than milk fat so that the resulting product is an imitation or semblance of milk cream or skim milk." The difference, therefore, between skimmed milk and filled milk is that in the former, the fatty part has been removed while in the latter, the fatty part is likewise removed but is substituted with refined coconut oil or corn oil or both. It cannot then be readily or safely assumed that Section 169 applies both to skimmed milk and filled milk.

The Board of Food Inspection way back in 1961 rendered an opinion that filled milk does not come within the purview of Section 169, it being a product distinct from those specified in the said Section since the removed fat portion of the milk has been replaced with coconut oil and Vitamins A and D as fortifying substances (p. 58, Rollo). This opinion bolsters the Court's stand as to its interpretation of the scope of Section 169. Opinions and rulings of officials of the government called upon to execute or implement administrative laws command much respect and weight. (Asturias Sugar Central Inc. vs. Commissioner of Customs, G. R. No. L-19337, September 30, 1969, 29 SCRA 617; Tan, et. al. vs. The Municipality of Pagbilao et. al., L-14264, April 30, 1963, 7 SCRA 887; Grapilon vs. Municipal Council of Carigara L-12347, May 30, 1961, 2 SCRA 103).

This Court is, likewise, induced to the belief that filled milk is suitable for nourishment for infants of all ages. The Petitioners themselves admitted that: "the filled milk products of the petitioners (now private respondents) are safe, nutritious, wholesome and suitable for feeding infants of all ages" (p. 44, Rollo) and that "up to the present, Filipino infants fed since birth with filled milk have not suffered any defects, illness or disease attributable to their having been fed with filled milk." (p. 45, Rollo).

There would seem, therefore, to be no dispute that filled milk is suitable for feeding infants of all ages. Being so, the declaration required by Section 169 of the Tax Code that filled milk is not suitable for nourishment for infants less than one year of age would, in effect, constitute a deprivation of property without due. process of law.

Section 169 is being enforced only against respondent manufacturers of filled milk product and not as against manufacturers, distributors or sellers of condensed skimmed milk such as SIMILAC, SMA, BREMIL, ENFAMIL, OLAC, in which, as admitted by the petitioner, the fatty part has been removed and substituted with vegetable or corn oil. The enforcement of Section 169 against the private respondents only but not against other persons similarly

situated as the private respondents amounts to an unconstitutional denial of the equal pro petition of the laws, for the law, equally enforced, would similarly offend against the Constitution. Yick Wo vs. Hopkins, 118 U.S. 356,30 L. ed. 220).

As stated in the early part of this decision, with the repeal of Sections 141 and 177 of the Tax Code, Section 169 has lost its tax purpose. Since Section 169 is devoid of any tax purpose, petitioner Commissioner necessarily lost his authority to enforce the same. This was so held by his predecessor immediately after Sections 141 and 177 were repealed in General Circular No. V-85 as stated in paragraph IX of the Partial Stipulation of facts entered into by the parties, to wit:

... As the act of sewing skimmed milk without first paying the specific tax thereon is no longer unlawful and the enforcement of the requirement in regard to the placing of the proper legend on its immediate containers is a subject which does not come within the jurisdiction of the Bureau of Internal Revenue, the penal provisions of Section 177 of the said Code having been repealed by Republic Act No. 463. (p. 102, Rollo).

Petitioner's contention that he still has jurisdiction to enforce Section 169 by virtue of Section 3 of the Tax Code which provides that the Bureau of Internal Revenue shall also "give effect to and administer the supervisory and police power conferred to it by this Code or other laws" is untenable. The Bureau of Internal Revenue may claim police power only when necessary in the enforcement of its principal powers and duties consisting of the "collection of all national internal revenue taxes, fees and charges, and the enforcement of all forfeitures, penalties and fines connected therewith." The enforcement of Section 169 entails the promotion of the health of the nation and is thus unconnected with any tax purpose. This is the exclusive function of the Food and Drug Administration of the Department of Health as provided for in Republic Act No. 3720. In particular, Republic Act No. 3720 provides:

Section 9. ... It shall be the duty of the Board (Food and Drug Inspection), conformably with the rules and regulations, to hold hearings and conduct investigations relative to matters touching the Administration of this Act, to investigate processes of food, drug and cosmetic manufacture and to subject reports to the Food and Drug Administrator, recommending food and drug standards for adoption. Said Board shall also perform such additional functions, properly within the scope of the administration thereof, as maybe assigned to it by the Food and Drug Administrator. The decisions of the Board shall be advisory to the Food and Drug Administrator.

Section 26. ...

xxx xxx xxx

(c) Hearing authorized or required by this Act shall be conducted by the Board of Food and Drug Inspection which shall submit recommendation to the Food and Drug Administrator.

(d) When it appears to the Food and Drug Administrator from the reports of the Food and Drug Laboratory that any article of food or any drug or cosmetic secured pursuant to Section 28 of this Act is adulterated or branded he shall cause notice thereof to be given to the person or persons concerned and such person or persons shall be given an opportunity to subject evidence impeaching the correctness of the finding or charge in question.

(e) When a violation of any provisions of this Act comes to the knowledge of the Food and Drug Administrator of such character that a criminal prosecution ought to be instituted against the offender, he shall certify the facts to the Secretary of Justice through the Secretary of Health, together with the chemists' report, the findings of the Board of Food and Drug Inspection, or other documentary evidence on which the charge is based.

(f) Nothing in this Act shall be construed as requiring the Food and Drug Administrator to certify for prosecution pursuant to subparagraph (e) hereof, minor violations of this Act whenever he believes that public interest will be adequately served by a suitable written notice or warning.

The aforequoted provisions of law clearly show that petitioners, Commissioner of Internal Revenue and the Fair Trade Board, are without jurisdiction to investigate and to prosecute alleged misbranding, mislabeling and/or misleading advertisements of filled milk. The jurisdiction on the matters cited is vested upon the Board of Food and Drug inspection and the Food and Drug Administrator, with the Secretary of Health and the Secretary of Justice, also intervening in case criminal prosecution has to be instituted. To hold that the petitioners have also jurisdiction as would be the result were their instant petition granted, would only cause overlapping of powers and functions likely to produce confusion and conflict of official action which is neither practical nor desirable.

WHEREFORE, the decision appealed from is hereby affirmed en toto. No costs.

SO ORDERED.

G.R. No. L-43760 August 21, 1976

PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), petitioner vs.BUREAU OF LABOR RELATIONS, HONORABLE CARMELO C. NORIEL, NATIONAL FEDERATION OF FREE LABOR UNIONS (NAFLU), and PHILIPPINE BLOOMING MILLS CO., INC., respondents.

Guevara, Pineda, Guevara & Castillon for petitioner.

Olalia Dimapilis & Associates for respondent Union (NAFLU)

Assistant Solicitor General Reynato S. Puno and Solicitor Jesus V. Diaz for respondent Bureau of Labor Relations, etc., et al.

 

FERNANDO, Acting C.J.:

A certification by respondent Director of Labor Relations, Carmelo C. Noriel, that respondent National Federation of Free Labor Unions (NAFLU) as the exclusive bargaining agent of all the employees in the Philippine Blooming Mills, Company, Inc. disregarding the objection raised by petitioner, the Philippine Association of Free Labor Unions (PAFLU), is assailed in this certiorari proceeding. Admittedly, in the certification election held on February 27, 1976, respondent Union obtained 429 votes as against 414 of petitioner Union. Again, admittedly, under the Rules and Regulations implementing the present Labor Code, a majority of the valid votes cast suffices for certification of the victorious labor union as the sole and exclusive bargaining agent. 1 There were four votes cast by employees who did not want any union. 2 On its face therefore, respondent Union ought to have been certified in accordance with the above applicable rule. Petitioner, undeterred, would seize upon the doctrine announced in the case of Allied Workers Association of the Philippines v. Court of Industrial Relations  3 that spoiled ballots should be counted in determining the valid votes cast. Considering there were seventeen spoiled ballots, it is the submission that there was a grave abuse of discretion on the part of respondent Director. Implicit in the comment of respondent Director of Labor Relations, 4 considered as an answer, is the controlling weight to be accorded the implementing rule above-cited, no inconsistency being shown between such rule and the present Labor Code. Under such a view, the ruling in the Allied Workers Association case that arose during the period when it was the Industrial Peace Act 5, that was in effect and not

the present law, no longer possesses relevance. It cannot and should not be applied. It is not controlling. There was no abuse of discretion then, much less a grave one.

This Court is in agreement. The law is on the side of respondent Director, not to mention the decisive fact appearing in the Petition itself that at most, only ten of the spoiled ballots "were intended for the petitioner Union,"6 thus rendering clear that it would on its own showing obtain only 424 votes as against 429 for respondent Union. certiorari does not lie.

1. What is of the essence of the certification process, as noted in Lakas Ng Manggagawang Pilipino v. Benguet Consolidated, Inc. 7 "is that every labor organization be given the opportunity in a free and honest election to make good its claim that it should be the exclusive collective bargaining representative." 8 Petitioner cannot complain. It was given that opportunity. It lost in a fair election. It came out second best. The implementing rule favors, as it should, respondent Union, It obtained a majority of the valid votes cast. So our law Prescribes. It is equally the case in the United States as this excerpt from the work of Cox and Bok makes clear: "It is a well-settled rule that a representative will he certified even though less than a majority of all the employees in the unit cast ballots in favor of the union. It is enough that the union be designated by a majority of the valid ballots, and this is so even though only a small proportion of the eligible voters participates. Following the analogy of political elections, the courts have approved this practice of the Board." 9

2. There is this policy consideration. The country is at present embarked on a wide-scale industrialization project. As a matter of fact, respondent firm is engaged in such activity. Industrialization, as noted by Professor Smith, Merrifield and Rothschild, "can thrive only as there is developed a. stable structure of law and order in the productive sector."  10 That objective is best attained in a collective bargaining regime, which is a manifestation of industrial democracy at work, if there be no undue obstacles placed in the way of the choice of a bargaining representative. To insist on the absolute majority where there are various unions and where the possibility of invalid ballots may not be ruled out, would be to frustrate that goal. For the probability of a long drawn-out, protracted process is not easy to dismiss. That is not unlikely given the intensity of rivalry among unions capable of enlisting the allegiance of a group of workers. It is to avoid such a contingency that there is this explicit pronouncement in the implementing rule. It speaks categorically. It must be obeyed. That was what respondent Director did.

3. Nor can fault of a grave and serious character be imputed to respondent Director presumably because of failure to abide by the doctrine or pronouncement of this Court in the aforesaid Allied Workers Association case. The reliance is on this excerpt from the opinion: "However, spoiled ballots, i.e., those which are defaced, torn or marked (Rules for

Certification Elections, Rule II, sec. 2[j]) should be counted in determining the majority since they are nevertheless votes cast by those who are qualified to do so." 11 Nothing can be clearer than that its basis is a paragraph in a section of the then applicable rules for certification elections. 12 They were promulgated under the authority of the then prevailing Industrial Peace Act. 13 That Legislation is no longer in force, having been superseded by the present Labor Code which took effect on November 1, 1974. This certification election is governed therefore, as was made clear, by the present Labor Code and the Rules issued thereunder. Absent a showing that such rules and regulations -are violative of the Code, this Court cannot ignore their existence. When, as should be the case, a public official acts in accordance with a norm therein contained, no infraction of the law is committed. Respondent Director did, as he ought to, comply with its terms. He took into consideration only the "valid votes" as was required by the Rules. He had no choice as long as they remain in force. In a proper showing, the judiciary can nullify any rule it found in conflict with the governing statute. 14 That was not even attempted here. All that petitioner did was to set forth in two separate paragraphs the applicable rule followed by respondent Director 15 and the governing article. 16 It did not even bother to discuss why such rule was in conflict with the present Labor Code. It failed to point out any repugnancy. Such being the case, respondent Director must be upheld.

4. The conclusion reached by us derives further support from the deservedly high repute attached to the construction placed by the executive officials entrusted with the responsibility of applying a statute. The Rules and Regulations implementing the present Labor Code were issued by Secretary Blas Ople of the Department of Labor and took effect on February 3, 1975, the present Labor Code having been made known to the public as far back as May 1, 1974, although its date of effectivity was postponed to November 1, 1974, although its date of effectivity was postponed to November 1, 1974. It would appear then that there was more than enough time for a really serious and careful study of such suppletory rules and regulations to avoid any inconsistency with the Code. This Court certainly cannot ignore the interpretation thereafter embodied in the Rules. As far back as In re Allen," 17 a 1903 decision, Justice McDonough, as ponente, cited this excerpt from the leading American case of Pennoyer v. McConnaughy, decided in 1891: "The principle that the contemporaneous construction of a statute by the executive officers of the government, whose duty it is to execute it, is entitled to great respect, and should ordinarily control the construction of the statute by the courts, is so firmly embedded in our jurisprudence that no authorities need be cited to support it." 18 There was a paraphrase by Justice Malcolm of such a pronouncement in Molina v. Rafferty," 19 a 1918 decision: "Courts will and should respect the contemporaneous construction placed upon a statute by the executive officers whose duty it is to enforce it, and unless such interpretation is clearly erroneous will ordinarily be controlled thereby." 20 Since then, such a doctrine has been reiterated in numerous decisions . 21 As was

emphasized by Chief Justice Castro, "the construction placed by the office charged with implementing and enforcing the provisions of a Code should he given controlling weight. " 22

WHEREFORE, the petition for certiorari is dismissed. Costs against petitioner Philippine Association of Free Labor Unions (PAFLU).

G.R. No. 87416 April 8, 1991

CECILIO S. DE VILLA, petitioner, vs.THE HONORABLE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES, HONORABLE JOB B. MADAYAG, and ROBERTO Z. LORAYES, respondents.

San Jose Enriquez, Lacas Santos & Borje for petitioner.

Eduardo R. Robles for private respondent.

 

PARAS, J.:p

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

The factual backdrop of this case, as found by the Court of Appeals, is as follows:

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

That on or about the 3rd day of April 1987, in the municipality of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did, then and there willfully, unlawfully and feloniously make or draw and issue to ROBERTO Z. LORAYEZ, to apply on account or for value a Depositors Trust Company Check No. 3371 antedated March 31, 1987, payable to herein complainant in the total amount of U.S. $2,500.00 equivalent to P50,000.00, said accused well knowing that at the time of issue he had no sufficient funds in or credit with drawee bank for payment of such

check in full upon its presentment which check when presented to the drawee bank within ninety (90) days from the date thereof was subsequently dishonored for the reason "INSUFFICIENT FUNDS" and despite receipt of notice of such dishonor said accused failed to pay said ROBERTO Z. LORAYEZ the amount of P50,000.00 of said check or to make arrangement for full payment of the same within five (5) banking days after receiving said notice.

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

On July 19, 1988, respondent court issued its first questioned orders stating:

Accused's motion to dismiss dated July 5, 1988, is denied for lack of merit.

Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are either drawn and issued in the Philippines though payable outside thereof, or made payable and dishonored in the Philippines though drawn and issued outside thereof, are within the coverage of said law. The law likewise applied to checks drawn against current accounts in foreign currency.

Petitioner moved for reconsideration but his motion was subsequently denied by respondent court in its order dated September 6, 1988, and which reads:

Accused's motion for reconsideration, dated August 9, 1988, which was opposed by the prosecution, is denied for lack of merit.

The Bouncing Checks Law is applicable to checks drawn against current accounts in foreign currency (Proceedings of the Batasang Pambansa, February 7, 1979, p. 1376, cited in Makati RTC Judge (now Manila City Fiscal) Jesus F. Guerrero's The Ramifications of the Law on Bouncing Checks, p. 5). (Rollo, Annex "A", Decision, pp. 20-22).

A petition for certiorari seeking to declare the nullity of the aforequoted orders dated July 19, 1988 and September 6, 1988 was filed by the petitioner in the Court of Appeals wherein he contended:

(a) That since the questioned check was drawn against the dollar account of petitioner with a foreign bank, respondent court has no jurisdiction over the same or with accounts outside the territorial jurisdiction of the Philippines and that Batas Pambansa Bilang 22 could have not contemplated extending its coverage over dollar accounts;

(b) That assuming that the subject check was issued in connection with a private transaction between petitioner and private respondent, the payment could not be legally paid in dollars as it would violate Republic Act No. 529; and

(c) That the obligation arising from the issuance of the questioned check is null and void and is not enforceable with the Philippines either in a civil or criminal suit. Upon such premises, petitioner concludes that the dishonor of the questioned check cannot be said to have violated the provisions of Batas Pambansa Bilang 22. (Rollo, Annex "A", Decision, p. 22).

On February 1, 1989, the Court of Appeals rendered a decision, the decretal portion of which reads:

WHEREFORE, the petition is hereby dismissed. Costs against petitioner.

SO ORDERED. (Rollo, Annex "A", Decision, p. 5)

A motion for reconsideration of the said decision was filed by the petitioner on February 7, 1989 (Rollo, Petition, p. 6) but the same was denied by the Court of Appeals in its resolution dated March 3, 1989 (Rollo, Annex "B", p. 26).

Hence, this petition.

In its resolution dated November 13, 1989, the Second Division of this Court gave due course to the petition and required the parties to submit simultaneously their respective memoranda (Rollo, Resolution, p. 81).

The sole issue in this case is whether or not the Regional Trial Court of Makati has jurisdiction over the case in question.

The petition is without merit.

Jurisdiction is the power with which courts are invested for administering justice, that is, for hearing and deciding cases (Velunta vs. Philippine Constabulary, 157 SCRA 147 [1988]).

Jurisdiction in general, is either over the nature of the action, over the subject matter, over the person of the defendant, or over the issues framed in the pleadings (Balais vs. Balais, 159 SCRA 37 [1988]).

Jurisdiction over the subject matter is determined by the statute in force at the time of commencement of the action (De la Cruz vs. Moya, 160 SCRA 538 [1988]).

The trial court's jurisdiction over the case, subject of this review, can not be questioned.

Sections 10 and 15(a), Rule 110 of the Rules of Court specifically provide that:

Sec. 10. Place of the commission of the offense. The complaint or information is sufficient if it can be understood therefrom that the offense was committed or some of the essential ingredients thereof occured at some place within the jurisdiction of the court, unless the particular place wherein it was committed constitutes an essential element of the offense or is necessary for identifying the offense charged.

Sec. 15. Place where action is to be instituted. (a) Subject to existing laws, in all criminal prosecutions the action shall be instituted and tried in the

court of the municipality or territory where the offense was committed or any of the essential ingredients thereof took place.

In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987] cited in the case of Lim vs. Rodrigo, 167 SCRA 487 [1988]), the Supreme Court ruled "that jurisdiction or venue is determined by the allegations in the information."

The information under consideration specifically alleged that the offense was committed in Makati, Metro Manila and therefore, the same is controlling and sufficient to vest jurisdiction upon the Regional Trial Court of Makati. The Court acquires jurisdiction over the case and over the person of the accused upon the filing of a complaint or information in court which initiates a criminal action (Republic vs. Sunga, 162 SCRA 191 [1988]).

Moreover, it has been held in the case of Que v. People of the Philippines (154 SCRA 160 [1987] cited in the case of People vs. Grospe, 157 SCRA 154 [1988]) that "the determinative factor (in determining venue) is the place of the issuance of the check."

On the matter of venue for violation of Batas Pambansa Bilang 22, the Ministry of Justice, citing the case of People vs. Yabut (76 SCRA 624 [1977], laid down the following guidelines in Memorandum Circular No. 4 dated December 15, 1981, the pertinent portion of which reads:

(1) Venue of the offense lies at the place where the check was executed and delivered; (2) the place where the check was written, signed or dated does not necessarily fix the place where it was executed, as what is of decisive importance is the delivery thereof which is the final act essential to its consummation as an obligation; . . . (Res. No. 377, s. 1980, Filtex Mfg. Corp. vs. Manuel Chua, October 28, 1980)." (See The Law on Bouncing Checks Analyzed by Judge Jesus F. Guerrero, Philippine Law Gazette, Vol. 7. Nos. 11 & 12, October-December, 1983, p. 14).

It is undisputed that the check in question was executed and delivered by the petitioner to herein private respondent at Makati, Metro Manila.

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

But it will be noted that the law does not distinguish the currency involved in the case. As the trial court correctly ruled in its order dated July 5, 1988:

Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are either drawn and issued in the Philippines though payable outside thereof . . . are within the coverage of said law.

It is a cardinal principle in statutory construction that where the law does not distinguish courts should not distinguish. Parenthetically, the rule is that where the law does not make any exception, courts may not except something unless compelling reasons exist to justify it (Phil. British Assurance Co., Inc. vs. IAC, 150 SCRA 520 [1987]).

More importantly, it is well established that courts may avail themselves of the actual proceedings of the legislative body to assist in determining the construction of a statute of doubtful meaning (Palanca vs. City of Manila, 41 Phil. 125 [1920]). Thus, where there is doubts as to what a provision of a statute means, the meaning put to the provision during the legislative deliberation or discussion on the bill may be adopted (Arenas vs. City of San Carlos, 82 SCRA 318 [1978]).

The records of the Batasan, Vol. III, unmistakably show that the intention of the lawmakers is to apply the law to whatever currency may be the subject thereof. The discussion on the floor of the then Batasang Pambansa fully sustains this view, as follows:

xxx xxx xxx

THE SPEAKER. The Gentleman from Basilan is recognized.

MR. TUPAY. Parliamentary inquiry, Mr. Speaker.

THE SPEAKER. The Gentleman may proceed.

MR. TUPAY. Mr. Speaker, it has been mentioned by one of the Gentlemen who interpellated that any check may be involved, like U.S. dollar checks, etc. We are talking about checks in our country. There are U.S. dollar checks, checks, in our currency, and many others.

THE SPEAKER. The Sponsor may answer that inquiry.

MR. MENDOZA. The bill refers to any check, Mr. Speaker, and this check may be a check in whatever currency. This would not even be limited to U.S. dollar checks. The check may be in French francs or Japanese yen or deutschunorhs. (sic.) If drawn, then this bill will apply.

MR TUPAY. So it include U.S. dollar checks.

MR. MENDOZA. Yes, Mr. Speaker.

xxx xxx xxx

(p. 1376, Records of the Batasan, Volume III; Emphasis supplied).

PREMISES CONSIDERED, the petition is DISMISSED for lack of merit.

G.R. No. 106724 February 9, 1994

THE NATIONAL POLICE COMMISSION, represented by its Acting Chairman, Cesar Sarino, Teodolo C. Natividad, Vice-Chairman and Executive Officer, Brig. Gen. Virgilio H. David, Edgar Dula Torre, Guillermo P. Enriquez, Commissioners, and Chief Supt. Levy D. Macasiano Director for Personnel,petitioners, vs.Honorable Judge Salvador de Guzman, Jr., Chief Supt. Norberto M. Lina, Chief Supt. Ricardo Trinidad, Jr., Sr. Supt. Manuel Suarez, Supt. Justito B. Tagum, Sr. Supt. Tranquilino Aspiras, Sr., Supt. Ramon I. Navarro, Sr. Supt. Ramon I. Navarro, Sr. Supt. Jose P. Suria, Sr. Supt. Agaton Abiera, Chief Insp. Bienvenido Torres, and the National (ROTC) Alumni Association Inc. (NARRA), represented by its President Col. Benjamin Gundran, and Director Hermogenes Peralta, Jr., respondents.

The Solicitor General for petitioners.

Renecio R. Espiritu for private respondents.

Diosdado P. Peralta for respondent-intervenor.

 

BIDIN, J.:

The case at bar had its origin in the implementation of the compulsory retirement of PNP officers as mandated in Sec. 39, RA 6975, otherwise known as "An Act Establishing the Philippine National Police Under a Reorganized Department of the Interior and Local Government", which took effect on January 2, 1991. Among others, RA 6975 provides for a uniform retirement system for PNP members. Section 39 thereof reads:

Sec. 39. Compulsory Retirement. — Compulsory retirement, for officer and non-officer, shall be upon the attainment of age fifty-six (56); Provided, That, in case of any officer with the rank of chief superintendent, director or deputy director general, the Commission may allow his retention in the service for an unextendible period of one (1) year.

Based on the above provision, petitioners sent notices of retirement to private respondents who are all members of the defunct Philippine Constabulary and have reached the age of fifty-six (56).

In response, private respondents filed a complaint on December 19, 1991 for declaratory relief with prayer for the issuance of an ex parte restraining order and/or injunction (docketed as Civil Case No. 91-3498) before the Regional Trial Court of Makati, Branch 142. In their complaint, respondents aver that the age of retirement set at fifty-six (56) by Section 39 of RA 6975 cannot be applied to them since they are also covered by Sec. 89 thereof which provides:

Any provision hereof to the contrary notwithstanding, and within the transition period of four (4) years following the effectivity of this Act, the following members of the INP shall be considered compulsorily retired:

a) Those who shall attain the age of sixty (60) on the first year of the effectivity of this Act.

b) Those who shall attain the age of fifty-nine (59) on the second year of the effectivity of this Act.

c) Those who shall attain the age of fifty-eight (58) on the third year of the effectivity of this Act.

d) Those who shall attain the age of fifty-seven (57) on the fourth year of the effectivity of this Act.

It is the submission of respondents that the term "INP" includes both the former members of the Philippine Constabulary and the local police force who were earlier constituted as the Integrated National Police (INP) by virtue of PD 765 in 1975.

On the other hand, it is the belief of petitioners that the 4-year transition period provided in Section 89 applies only to the local police forces who previously retire, compulsorily, at age sixty (60) for those in the ranks of Police/Fire Lieutenant or higher (Sec. 33, PD 1184); while the retirement age for the PC had already been set at fifty-six (56) under the AFP law.

On December 23, 1991, respondent judge issued a restraining order followed by a writ of injunction on January 8, 1992 upon posting of a P100,000.00 bond by private respondents.

After the parties have submitted their respective pleadings, the case was submitted for resolution and on August 14, 1992, the respondent judge rendered the assailed decision, the decretal portion of which reads:

WHEREFORE, the court hereby declares that the term "INP" in Section 89 of the PNP Law includes all members of the present Philippine National Police, irrespective of the original status of the present members of the Philippine National Police before its creation and establishment, and that Section 39 thereof shall become operative after the lapse of the four-year transition period.

The preliminary injunction issued is made permanent.

SO ORDERED. (Rollo, pp. 29-30)

Petitioners filed the instant petition on October 8, 1992 seeking the reversal of the above judgment. On January 12, 1993, the Court resolved to treat the respondents' Comment as Answer and gave due course to the petition.

In ruling in favor of private respondents, respondent judge observed, among others, that:

It may have been the intention of Congress to refer to the local police forces as the "INP" but the PNP Law failed to define who or what constituted the INP. The natural recourse of the court is to trace the source of the "INP" as courts are permitted to look to prior laws on the same subject and to investigate the antecedents involved. There is nothing extant in the statute books except that which was created and established under PD 765 pursuant to the mandate of Article XV of the 1973 Constitution providing that the "State shall establish and maintain an integrated national police force whose organization, administration and operation shall be provided by law." Heretofore, INP was unknown. And the said law categorically declared the PC "as the principal component of the Integrated National Police" (Sec. 5, PD 765).

The court was supplied by respondents (petitioners herein) with excerpts taken from the discussion amongst the members of Congress concerning the particular provision of Section 89. The court is not persuaded by said discussion; it was a simple matter for the members of the legislature to state precisely in clear and unequivocal terms their meaning, such as "integrated

police" as used in PD 765. Instead, they employed "INP", a generic term that includes the PC as the principal component of the INP, supra. In failing to categorically restrict the application of Section 89 as the members of legislature are said to have intended, it gave rise to the presumption that it has not limited nor intended to limit the meaning of the word when the bill was finally passed into law. It is not difficult for the court to also presume that in drafting the wording of the PNP Law, the legislators were aware of the historical legislative origin of the "INP".

xxx xxx xxx

The court takes particular note of the fact that Section 89 is found in the Transitory Provisions of the law which do not provide for any distinction between the former PC officers and those belonging to the civilian police forces. These provision are specifically enacted to regulate the period covering the dissolution of the PC and the creation of the PNP, a period that necessarily would be attended by imbalances and or confusion occasioned by the wholesale and mass integration. In fact, the retirement payment scheme of the INP is still to be formulated, leaving the impression that nothing is really settled until after the transition of four years has lapsed. Section 89 therefore prevails over Section 39 up to the year 1995 when the retirement age for the members of the PNP shall then be age 56; after the year 1995, Section 39 shall then be the applicable law on retirement of PNP members. (Rollo, pp. 27-28; emphasis supplied)

Petitioners disagree and claim that the use of the term INP in Sec. 89 does not imply the same meaning contemplated under PD 765 wherein it is provided:

Sec. 1. Constitution of the Integrated National Police. — There is hereby established and constituted the Integrated National Police (INP) which shall be composed of the Philippine Constabulary as the nucleus, and the integrated police forces as established by Presidential Decrees Nos. 421, 482, 531, 585 and 641, as components, under the Department of National Defense.

On the other hand, private respondents assert that being the nucleus of the Integrated National Police (INP) under PD 765, former members of the Philippine Constabulary (PC) should not be discriminated against from the coverage of the term "INP" in Sec. 89, RA 6975. Clearly, it

is argued, the term "INP" found in Section 89 of RA 6975 refers to the INP in PD 765. Thus, where the law does not distinguish, the courts should not distinguish.

Does the law, RA 6975, distinguish INP from the PC? Petitioners submit that it does and cite Sections 23 and 85 to stress the point, viz.:

Sec. 23. Composition. — Subject to the limitations provided for in this Act, the Philippine National Police, hereinafter referred to as the PNP, is hereby established, initially consisting of the members of the police forces who were integrated into the Integrated National Police (INP) pursuant to Presidential Decree No. 765, and the officers and enlisted personnel of the Philippine Constabulary (PC). . .

xxx xxx xxx

The permanent civilian employees of the present PC, INP, Narcotics Command, CIS and the technical command of the AFP assigned with the PC, including NAPOLCOM hearing officers holding regular items as such, shall be absorbed by the Department as employees thereof, subject to existing laws and regulations.

xxx xxx xxx

Sec. 85. Phase of Implementation. — The implementation of this Act shall be undertaken in three (3) phases, to wit:

Phase I — Exercise of option by the uniformed members of the Philippine Constabulary, the PC elements assigned with the Narcotics Command, CIS, and the personnel of the technical services of the AFP assigned with the PC to include the regular CIS investigating agents and the operatives and agents of the NAPOLCOM Inspection, Investigation and Intelligence Branch, and the personnel of the absorbed National Action Committee on Anti-Hijacking (NACAH) of the Department of National Defense, to be completed within six (6) months from the date of the effectivity of this Act. At the end of this phase, all personnel from the INP, PC, technical Services, NACAH, and NAPOLCOM Inspection, Investigation and Intelligence Branch shall have been covered by official orders assigning them to the PNP . . .

xxx xxx xxx

. . . Any PC-INP officer or enlisted personnel may, within the twelve-month period from the effectivity of this Act, retire . . .

Phase III — . . . To accomplish the tasks of Phase III, the Commission shall create a Board of Officers composed of the following: NAPOLCOM Commissioner as Chairman and one (1) representative each from the PC, INP, Civil Service Commission and the Department of Budget and Management.

Section 86 of the same law further provides:

Sec. 86. Assumption by the PNP of Police Functions. — The PNP shall absorb the functions of the PC, the INP and the Narcotics Command upon the effectivity of this Act.

From a careful perusal of the above provisions, it appears therefore that the use of the term INP is not synonymous with the PC. Had it been otherwise, the statute could have just made a uniform reference to the members of the whole Philippine National Police (PNP) for retirement purposes and not just the INP. The law itself distinguishes INP from the PC and it cannot be construed that "INP" as used in Sec. 89 includes the members of the PC.

And contrary to the pronouncement of respondent judge that the law failed to define who constitutes the INP, Sec. 90 of RA 6975 has in fact defined the same. Thus,

Sec. 90. Status of Present NAPOLCOM, PC-INP. — Upon the effectivity of this Act, the present National Police Commission and the Philippine Constabulary-Integrated National Police shall cease to exist. The Philippine Constabulary, which is the nucleus of the Philippine Constabulary-Integrated National Police shall cease to be a major service of the Armed Forces of the Philippines. The Integrated National Police, which is the civilian component of the Philippine Constabulary-Integrated National Police, shall cease to be the national police force and lieu thereof, a new police force shall be established and constituted pursuant to this Act. (emphasis supplied)

It is not altogether correct to state, therefore, that the legislature failed to define who the members of the INP are. In this regard, it is of no moment that the legislature failed to categorically restrict the application of the transition period in Sec. 89 specifically in favor of the local police forces for it would be a mere superfluity as the PC component of the INP was already retirable at age fifty-six (56).

Having defined the meaning of INP, the trial court need not have belabored on the supposed dubious meaning of the term. Nonetheless, if confronted with such a situation, courts are not without recourse in determining the construction of the statute with doubtful meaning for they may avail themselves of the actual proceedings of the legislative body. In case of doubt as to what a provision of a statute means, the meaning put to the provision during the legislative deliberations may be adopted (De Villa v. Court of Appeals, 195 SCRA 722 [1991] citing Palanca v. City of Manila, 41 Phil. 125 [1920]; Arenas v. City of San Carlos, 82 SCRA 318 [1978]).

Courts should not give a literal interpretation to the letter of the law if it runs counter to the legislative intent (Yellow Taxi and Pasay Transportation Workers' Association v. Manila Yellow Taxi Cab. Co., 80 Phil. 83 [1948]).

Examining the records of the Bicameral Conference Committee, we find that the legislature did intent to exclude the members of the PC from the coverage of Sec. 89 insofar as the retirement age is concerned, thus:

THE CHAIRMAN. (SEN. MACEDA). Well, it seems what people really want is one common rule, so if it is fifty-six, fifty-six; of course, the PC wants sixty for everybody. Of course, it is not acceptable to us in the sense that we tied this up really to the question of: If you are lax in allowing their (the PC) entry into the PNP, then tighten up the retirement. If we will be strict in, like requiring examinations and other conditions for their original entry, then since we have sifted out a certain amount of undesirables, then we can allow a longer retirement age. That was the rationale, that was the tie-up. Since we are relaxing the entry, we should speed up . . .

THE CHAIRMAN. (REP. GUTANG). Exit.

THE CHAIRMAN. (SEN. MACEDA) . . . the retirement, the exit.

THE CHAIRMAN. (REP. GUTANG). So let me get it very clear, Mr. Chairman. Fifty-six, let's say, that will not make any adjustment in the PC because there (they) are (retirable at age) fifty-six.

THE CHAIRMAN. (SEN. MACEDA). Kaya nga, wala na silang masasabi.

THE CHAIRMAN. (REP. GUTANG). In the case of the Police, since they are retireable now at sixty, for the officers, it will be applicable to them on a one-year every year basis for a total period of four years transition. (Bicameral Conference Committee on National Defense, March 12, 1990)

REP. GUTANG. On the first year of effectivity, the police will retire at 60 years.

THE CHAIRMAN. (SEN. MACEDA). Sixty.

REP. GUTANG. On the second year, 59.

THE CHAIRMAN. (SEN. MACEDA). Oo.

REP. GUTANG. On the third year, 58.

THE CHAIRMAN. (SEN. MACEDA). Fifty-eight. So 'yung 55, on the third year, 58, doon siya re-retire.

REP. GUTANG. Oo.

SEN. SAGUISAG. So kung 55, when the law becomes effective . . .

THE CHAIRMAN. (SEN. MACEDA). He will retire at 58, doon siya aabot.

REP. UNICO. Pwede.

SEN. SAGUISAG. Dahil 'yon, may time to . . .

THE CHAIRMAN. (SEN. MACEDA). Walang problema dito sa transition ng pulis, acceptable ito, eh.

THE CHAIRMAN. (REP. COJUANGCO). Sa PC?

THE CHAIRMAN. (SEN. MACEDA). PC, walang mawawala sa kanila, 56 ang retirement age nilang talaga, eh. Kaya ayaw ko ngang dagdagan 'yung 56 nila at 'yon din ang sa Armed Forces, 56. (Ibid., May 22, 1990)

In applying the provisions of Sec. 89 in favor of the local police force as established in PD 765, the Court does not, in any manner, give any undue preferential treatment in favor of the other group. On the contrary, the Court is merely giving life to the real intent of the legislators based on the deliberations of the Bicameral Conference Committee that preceded the enactment of RA 6975.

The legislative intent to classify the INP in such manner that Section 89 of RA 6975 is applicable only to the local police force is clear. The question now is whether the classification is valid. The test for this is reasonableness such that it must conform to the following requirements: (1) It must be based upon substantial distinctions; (2) It must be germane to the purpose of the law; (3) It must not be limited to existing conditions only; (4) It must apply equally to all members of the same class (People vs. Cayat, 68 Phil. 12 [1939]).

The classification is based upon substantial distinctions. The PC, before the effectivity of the law (RA 6975), were already retirable at age 56 while the local police force were retirable at 60, and governed by different laws (P.D. 1184, Sec. 33 and Sec. 50). The distinction is relevant for the purpose of the statute, which is to enable the local police force to plan for their retirement which would be earlier than usual because of the new law. Section 89 is merely transitory, remedial in nature, and loses its force and effect once the four-year transitory period has elapsed. Finally, it applies not only to some but to all local police officers.

It may be appropriate to state at this point that it seems absurd that a law will grant an extension to PC officers' retirable age from 56 to 60 and then gradually lower it back to 56 without any cogent reason at all. Why should the retirement age of PC officers be increased during the transitory period to the exclusion of other PC officers who would retire at age 56 after such period? Such absurdity was never contemplated by the law and would defeat its purpose of providing a uniform retirement age for PNP members.

WHEREFORE, the petition is GRANTED. The writ of injunction issued on January 8, 1992 is hereby LIFTED and the assailed decision of respondent judge is REVERSED and SET ASIDE.

SO ORDERED.

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.

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:.

x x x           x x x           x x x

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. 1äwphï1.ñët

Petitioner maintains that the term "urea formaldehyde" appearing in this provision should be construed as "ureaand 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.

WHEREFORE, the decision appealed from is hereby affirmed, with costs against the petitioner. It is so ordered.