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L-5060
In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the
doctrine laid down in Com. vs. Tewksbury (supra) was reviewed
and affirmed, the same eminent jurist who wrote the former
opinion, in distinguishing the exercise of the right of eminent
domain from the exercise of the sovereign POLICE POWERs of
the State, said:
TRENT, J.:
The judgment appealed from in this case perpetually restrains
and prohibits the defendant and his deputies from collecting and
enforcing against the plaintiffs and their property the annual tax
mentioned and described in subsection (b) of section 100 of Act
No. 2339, effective July 1, 1914, and from destroying or removing
any sign, signboard, or billboard, the property of the plaintiffs, for
the sole reason that such sign, signboard, or billboard is, or may
be, offensive to the sight; and decrees the cancellation of the
bond given by the plaintiffs to secure the issuance of the
preliminary injunction granted soon after the commencement of
this action.
This case divides itself into two parts and gives rise to two main
questions; (1) that relating to the power of the court to restrain by
injunction the collection of the tax complained of, and (2) that
relating to the validity of those provisions of subsection (b) of
section 100 of Act No. 2339, conferring power upon the Collector
of Internal Revenue to remove any sign, signboard, or billboard
upon the ground that the same is offensive to the sight or is
otherwise a nuisance.
The first question is one of the jurisdiction and is of vital
importance to the Government. The sections of Act No. 2339,
which bear directly upon the subject, are 139 and 140. The first
expressly forbids the use of an injunction to stay the collection of
any internal revenue tax; the second provides a remedy for any
wrong in connection with such taxes, and this remedy was
intended to be exclusive, thereby precluding the remedy by
injunction, which remedy is claimed to be constitutional. The two
sections, then, involve the right of a dissatisfied taxpayers to use
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protection of the public safety, the public peace and good order of
society, must be held invalid and contrary to constitutional
provisions holding inviolate the rights of private property. Or, in
other words, the POLICE POWER cannot interfere with private
property rights for purely esthetic purposes. The courts, taking
this view, rest their decisions upon the proposition that the
esthetic sense is disassociated entirely from any relation to the
public health, morals, comfort, or general welfare and is,
therefore, beyond the POLICE POWER of the state. But we are
of the opinion, as above indicated, that unsightly advertisements
or signs, signboards, or billboards which are offensive to the sight,
are not disassociated from the general welfare of the public. This
is not establishing a new principle, but carrying a well recognized
principle to further application. (Fruend on POLICE POWER, p.
166.)
For the foregoing reasons the judgment appealed from is hereby
reversed and the action dismissed upon the merits, with costs. So
ordered.
Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.
DECISION ON THE MOTION FOR A REHEARING, JANUARY
24, 1916.
TRENT, J.:
Counsel for the plaintiffs call our attention to the case of Ex
parte Young (209 U.S., 123); and say that they are of the opinion
that this case "is the absolutely determinative of the question of
jurisdiction in injunctions of this kind." We did not refer to this case
in our former opinion because we were satisfied that the
reasoning of the case is not applicable to section 100 (b), 139 and
140 of Act No. 2339. The principles announced in the Young case
are stated as follows: "It may therefore be said that when the
penalties for disobedience are by fines so enormous and
imprisonment so severe as to intimidate the company and its
officers from resorting to the courts to test the validity of the
legislation, the result is the same as if the law in terms prohibited
the company from seeking judicial construction of laws which
deeply affect its rights.
It is urged that there is no principle upon which to base
the claim that a person is entitled to disobey a statute at
least once, for the purpose of testing its validity without
subjecting himself to the penalties for disobedience
provided by the statute in case it is valid. This is not an
accurate statement of the case. Ordinarily a law
creating offenses in the nature of misdemeanors or
felonies relates to a subject over which the jurisdiction
of the legislature is complete in any event. In these
case, however, of the establishment of certain rates
without any hearing, the validity of such rates
necessarily depends upon whether they are high
enough to permit at least some return upon the
investment (how much it is not now necessary to state),
and an inquiry as to that fact is a proper subject of
judicial investigation. If it turns out that the rates are too
low for that purpose, then they are illegal. Now, to
impose upon a party interested the burden of obtaining
a judicial decision of such a question (no prior hearing
having ever been given) only upon the condition that, if
unsuccessful, he must suffer imprisonment and pay
fines as provided in these acts, is, in effect, to close up
all approaches to the courts, and thus prevent any
hearing upon the question whether the rates as
provided by the acts are not too low, and therefore
invalid. The distinction is obvious between a case
where the validity of the acts depends upon the
existence of a fact which can be determined only after
investigation of a very complicated and technical
character, and the ordinary case of a statute upon a
subject requiring no such investigation and over which
the jurisdiction of the legislature is complete in any
event.
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because it destroys the view of the public plaza of Baao, in that "it
hinders the view of travelers from the National Highway to the
said public plaza." From this decision, the accused appealed to
the Court of Appeals, but the latter forwarded the records to us
because the appeal attacks the constitutionality of the ordinance
in question.
We find that the appealed conviction can not stand.
A first objection to the validity of the ordinance in question is that
under it the mayor has absolute discretion to issue or deny a
permit. The ordinance fails to state any policy, or to set up any
standard to guide or limit the mayor's action. No purpose to be
attained by requiring the permit is expressed; no conditions for its
grant or refusal are enumerated. It is not merely a case of
deficient standards; standards are entirely lacking. The ordinance
thus confers upon the mayor arbitrary and unrestricted power to
grant or deny the issuance of building permits, and it is a settled
rule that such an undefined and unlimited delegation of power to
allow or prevent an activity, per se lawful, is invalid (People vs.
Vera, 65 Phil., 56; Primicias vs. Fugoso, 80 Phil., 71; Schloss
Poster Adv. Co. vs. Rock Hill, 2 SE (2d) 392)
The ordinance in question in no way controls or guides
the discretion vested thereby in the respondents. It
prescribes no uniform rule upon which the special
permission of the city is to be granted. Thus the city is
clothed with the uncontrolled power to capriciously
grant the privilege to some and deny it others; to refuse
the application of one landowner or lessee and to grant
that of another, when for all material purposes, the two
applying for precisely the same privileges under the
same circumstances. The danger of such an ordinance
is that it makes possible arbitrary discriminations and
abuses in its execution, depending upon no conditions
or qualifications whatever, other than the unregulated
arbitrary will of the city authorities as the touchstone by
which its validity is to be tested. Fundamental rights
under our government do not depend for their existence
upon such a slender and uncertain thread. Ordinances
which thus invest a city council with a discretion which
is purely arbitrary, and which may be exercised in the
interest of a favored few, are unreasonable and invalid.
The ordinance should have established a rule by which
its impartial enforcement could be secured. All of the
authorities cited above sustain this conclusion.
As was said in City of Richmond vs. Dudley, 129 Ind.
112,28 N. E. 312, 314 13 L. R. A. 587, 28 Am. St. Rep.
180: "It seems from the foregoing authorities to be well
established that municipal ordinances placing
restrictions upon lawful conduct or the lawful use of
property must, in order to be valid, specify the rules and
conditions to be observed in such conduct or business;
and must admit of the exercise of the privilege of all
citizens alike who will comply with such rules and
conditions; and must not admit of the exercise, or of an
opportunity for the exercise, of any arbitrary
discrimination by the municipal authorities between
citizens who will so comply. (Schloss Poster Adv. Co.,
Inc. vs. City of Rock Hill, et al., 2 SE (2d), pp. 394-395).
It is contended, on the other hand, that the mayor can refuse a
permit solely in case that the proposed building "destroys the view
of the public plaza or occupies any public property" (as stated in
its section 3); and in fact, the refusal of the Mayor of Baao to
issue a building permit to the appellant was predicated on the
ground that the proposed building would "destroy the view of the
public plaza" by preventing its being seen from the public
highway. Even thus interpreted, the ordinance is unreasonable
and oppressive, in that it operates to permanently deprive
appellants of the right to use their own property; hence, it
oversteps the bounds of POLICE POWER, and amounts to a
taking of appellants property without just compensation. We do
not overlook that the modern tendency is to regard the
beautification of neighborhoods as conducive to the comfort and
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FERNANDO, J.:
The validity of a letter of Instruction 1 providing for an early
seaming device for motor vehicles is assailed in this prohibition
proceeding as being violative of the constitutional guarantee of
DUE PROCESS and, insofar as the rules and regulations for its
implementation are concerned, for transgressing the fundamental
principle of non- delegation of legislative power. The Letter of
Instruction is stigmatized by petitioner who is possessed of the
requisite standing, as being arbitrary and oppressive. A temporary
restraining order as issued and respondents Romeo F. Edu, Land
Transportation Commissioner Juan Ponce Enrile, Minister of
National Defense; Alfredo L. Juinio, Minister of Public Works,
Transportation and Communications; and Baltazar Aquino,
Minister of Public Highways; were to answer. That they did in a
pleading submitted by Solicitor General Estelito P.
Mendoza. 2 Impressed with a highly persuasive quality, it makes
devoid clear that the imputation of a constitutional infirmity is
devoid of justification The Letter of Instruction on is a valid
POLICE POWER measure. Nor could the implementing rules and
regulations issued by respondent Edu be considered as
This Court thus considered the petition submitted for decision, the
issues being clearly joined. As noted at the outset, it is far from
meritorious and must be dismissed.
1. The Letter of Instruction in question was issued in the exercise
of the POLICE POWER. That is conceded by petitioner and is the
main reliance of respondents. It is the submission of the former,
however, that while embraced in such a category, it has offended
against the DUE PROCESS and equal protection safeguards of
the Constitution, although the latter point was mentioned only in
passing. The broad and expansive scope of the POLICE POWER
which was originally Identified by Chief Justice Taney of the
American Supreme Court in an 1847 decision as "nothing more or
less than the powers of government inherent in every
sovereignty" 23 was stressed in the aforementioned case of Edu v.
Ericta thus: "Justice Laurel, in the first leading decision after the
Constitution came into force, Calalang v. Williams, Identified
POLICE POWER with state authority to enact legislation that may
interfere with personal liberty or property in order to promote the
general welfare. Persons and property could thus 'be subjected to
all kinds of restraints and burdens in order to we the general
comfort, health and prosperity of the state.' Shortly after
independence in 1948, Primicias v. Fugoso reiterated the
doctrine, such a competence being referred to as 'the power to
prescribe regulations to promote the health, morals, peace,
education, good order or safety, and general welfare of the
people. The concept was set forth in negative terms by Justice
Malcolm in a pre-Commonwealth decision as 'that inherent and
plenary power in the State which enables it to prohibit all things
hurtful to the comfort, safety and welfare of society. In that sense
it could be hardly distinguishable as noted by this Court in Morfe
v. Mutuc with the totality of legislative power. It is in the above
sense the greatest and most powerful at. tribute of government. It
is, to quote Justice Malcolm anew, 'the most essential, insistent,
and at least table powers, I extending as Justice Holmes aptly
pointed out 'to all the great public needs.' Its scope, everexpanding to meet the exigencies of the times, even to anticipate
the future where it could be done, provides enough room for an
efficient and flexible response to conditions and circumstances
thus assuring the greatest benefits. In the language of Justice
Cardozo: 'Needs that were narrow or parochial in the past may be
interwoven in the present with the well-being of the nation. What
is critical or urgent changes with the time.' The POLICE POWER
is thus a dynamic agency, suitably vague and far from precisely
defined, rooted in the conception that men in organizing the state
and imposing upon its government limitations to safeguard
constitutional rights did not intend thereby to enable an individual
citizen or a group of citizens to obstruct unreasonably the
enactment of such salutary measures calculated to communal
peace, safety, good order, and welfare." 24
2. It was thus a heavy burden to be shouldered by petitioner,
compounded by the fact that the particular POLICE POWER
measure challenged was clearly intended to promote public
safety. It would be a rare occurrence indeed for this Court to
invalidate a legislative or executive act of that character. None
has been called to our attention, an indication of its being nonexistent. The latest decision in point, Edu v. Ericta, sustained the
validity of the Reflector Law, 25 an enactment conceived with the
same end in view. Calalang v. Williams found nothing
objectionable in a statute, the purpose of which was: "To promote
safe transit upon, and. avoid obstruction on roads and streets
designated as national roads * * *. 26 As a matter of fact, the first
law sought to be nullified after the effectivity of the 1935
Constitution, the National Defense Act, 27 with petitioner failing in
his quest, was likewise prompted by the imperative demands of
public safety.
3. The futility of petitioner's effort to nullify both the Letter of
Instruction and the implementing rules and regulations becomes
even more apparent considering his failure to lay the necessary
factual foundation to rebut the presumption of validity. So it was
held in Ermita-Malate Hotel and Motel Operators Association, Inc.
v. City Mayor of Manila. 28 The rationale was clearly set forth in an
excerpt from a decision of Justice Branders of the American
Supreme Court, quoted in the opinion: "The statute here
questioned deals with a subject clearly within the scope of the
DECISION
PURISIMA, J.:
PUNO, J.:
The petition at bar is a commendable effort on the part of Senator
Blas F. Ople to prevent the shrinking of the right to privacy, which
the revered Mr. Justice Brandeis considered as "the most
comprehensive of rights and the right most valued by civilized
men." 1 Petitioner Ople prays that we invalidate Administrative
Order No. 308 entitled "Adoption of a National Computerized
Identification Reference System" on two important constitutional
grounds, viz: one, it is a usurpation of the power of Congress to
legislate, and two, it impermissibly intrudes on our citizenry's
protected zone of privacy. We grant the petition for the rights
sought to be vindicated by the petitioner need stronger barriers
against further erosion.
A.O. No. 308 was issued by President Fidel V. Ramos On
December 12, 1996 and reads as follows:
ADOPTION OF A NATIONAL
COMPUTERIZED
IDENTIFICATION REFERENCE SYSTEM
WHEREAS, there is a need to provide
Filipino citizens and foreign residents with the
facility to conveniently transact business with
basic service and social security providers
and other government instrumentalities;
WHEREAS, this will require a computerized
system to properly and efficiently identify
persons seeking basic services on social
security and reduce, if not totally eradicate
fraudulent transactions and
misrepresentations;
WHEREAS, a concerted and collaborative
effort among the various basic services and
social security providing agencies and other
government intrumentalities is required to
achieve such a system;
NOW, THEREFORE, I, FIDEL V. RAMOS,
President of the Republic of the Philippines,
by virtue of the powers vested in me by law,
do hereby direct the following:
Sec. 1. Establishment of a National
Compoterized Identification Reference
System. A decentralized Identification
Reference System among the key basic
services and social security providers is
hereby established.
Sec. 2. Inter-Agency Coordinating
Committee. An Inter-Agency Coordinating
redefines the parameters of some basic rights of our citizenry visa-vis the State as well as the line that separates the
administrative power of the President to make rules and the
legislative power of Congress, it ought to be evident that it deals
with a subject that should be covered by law.
Nor is it correct to argue as the dissenters do that A.D. No. 308 is
not a law because it confers no right, imposes no duty, affords no
proctection, and creates no office. Under A.O. No. 308, a citizen
cannot transact business with government agencies delivering
basic services to the people without the contemplated
identification card. No citizen will refuse to get this identification
card for no one can avoid dealing with government. It is thus clear
as daylight that without the ID, a citizen will have difficulty
exercising his rights and enjoying his privileges. Given this reality,
the contention that A.O. No. 308 gives no right and imposes no
duty cannot stand.
Again, with due respect, the dissenting opinions unduly expand
the limits of administrative legislation and consequently erodes
the plenary power of Congress to make laws. This is contrary to
the established approach defining the traditional limits of
administrative legislation. As well stated by Fisher: ". . . Many
regulations however, bear directly on the public. It is here that
administrative legislation must he restricted in its scope and
application. Regulations are not supposed to be a substitute for
the general policy-making that Congress enacts in the form of a
public law. Although administrative regulations are entitled to
respect, the authority to prescribe rules and regulations is not an
independent source of power to make laws." 28
III
Assuming, arguendo, that A.O. No. 308 need not be the subject of
a law, still it cannot pass constitutional muster as an
administrative legislation because facially it violates the right to
privacy. The essence of privacy is the "right to be let alone." 29 In
the 1965 case of Griswold v. Connecticut, 30 the United States
Supreme Court gave more substance to the right of privacy when
it ruled that the right has a constitutional foundation. It held that
there is a right of privacy which can be found within the
penumbras of the First, Third, Fourth, Fifth and Ninth
Amendments, 31 viz:
Specific guarantees in the Bill of Rights have
penumbras formed by emanations from these
guarantees that help give them life and
substance . . . various guarantees create
zones of privacy. The right of association
contained in the penumbra of the First
Amendment is one, as we have seen. The
Third Amendment in its prohibition against
the quartering of soldiers "in any house" in
time of peace without the consent of the
owner is another facet of that privacy. The
Fourth Amendment explicitly affirms the ''right
of the people to be secure in their persons,
houses and effects, against unreasonable
searches and seizures." The Fifth
Amendment in its Self-Incrimination Clause
enables the citizen to create a zone of
privacy which government may not force him
to surrender to his detriment. The Ninth
Amendment provides: "The enumeration in
the Constitution, of certain rights, shall not be
construed to deny or disparage others
retained by the people."
In the 1968 case of Morfe v. Mutuc, 32 we adopted the
Griswold ruling that there is a constitutional right to
privacy. Speaking thru Mr. Justice, later Chief Justice,
Enrique Fernando, we held:
xxx xxx xxx
holding the card or entering the PIN is the legitimate owner of the
card or PIN. 48
A most common form of biological encoding is finger-scanning
where technology scans a fingertip and turns the unique pattern
therein into an individual number which is called a biocrypt. The
biocrypt is stored in computer data banks 49 and becomes a
means of identifying an individual using a service. This technology
requires one's fingertip to be scanned every time service or
access is provided. 50 Another method is the retinal scan. Retinal
scan technology employs optical technology to map the capillary
pattern of the retina of the eye. This technology produces a
unique print similar to a finger print. 51 Another biometric method
is known as the "artificial nose." This device chemically analyzes
the unique combination of substances excreted from the skin of
people. 52 The latest on the list of biometric achievements is the
thermogram. Scientists have found that by taking pictures of a
face using infra-red cameras, a unique heat distribution pattern is
seen. The different densities of bone, skin, fat and blood vessels
all contribute to the individual's personal "heat signature." 53
In the last few decades, technology has progressed at a galloping
rate. Some science fictions are now science facts. Today,
biometrics is no longer limited to the use of fingerprint to identify
an individual. It is a new science that uses various technologies in
encoding any and all biological characteristics of an individual for
identification. It is noteworthy that A.O. No. 308 does not state
what specific biological characteristics and what particular
biometrics technology shall be used to identify people who will
seek its coverage. Considering the banquest of options available
to the implementors of A.O. No. 308, the fear that it threatens the
right to privacy of our people is not groundless.
A.O. No. 308 should also raise our antennas for a further look will
show that it does not state whether encoding of data is limited to
biological information alone for identification purposes. In fact, the
Solicitor General claims that the adoption of the Identification
Reference System will contribute to the "generation of population
data for development planning." 54 This is an admission that the
PRN will not be used solely for identification but the generation of
other data with remote relation to the avowed purposes of A.O.
No. 308. Clearly, the indefiniteness of A.O. No. 308 can give the
government the roving authority to store and retrieve information
for a purpose other than the identification of the individual through
his PRN.
The potential for misuse of the data to be gathered under A.O.
No. 308 cannot be undarplayed as the dissenters do. Pursuant to
said administrative order, an individual must present his PRN
everytime he deals with a government agency to avail of basic
services and security. His transactions with the government
agency will necessarily be recorded whether it be in the
computer or in the documentary file of the agency. The
individual's file may include his transactions for loan availments,
income tax returns, statement of assets and liabilities,
reimbursements for medication, hospitalization, etc. The more
frequent the use of the PRN, the better the chance of building a
huge formidable informatin base through the electronic linkage of
the files. 55 The data may be gathered for gainful and useful
government purposes; but the existence of this vast reservoir of
personal information constitutes a covert invitation to misuse, a
temptation that may be too great for some of our authorities to
resist. 56
We can even grant, arguendo, that the computer data file will be
limited to the name, address and other basic personal infomation
about the individual. 57 Even that hospitable assumption will not
save A.O. No. 308 from constitutional infirmity for again said order
does not tell us in clear and categorical terms how these
information gathered shall he handled. It does not provide who
shall control and access the data, under what circumstances and
for what purpose. These factors are essential to safeguard the
privacy and guaranty the integrity of the information. 58 Well to
note, the computer linkage gives other government agencies
access to the information. Yet, there are no controls to guard
against leakage of information. When the access code of the
to minimize the misuse of dangerous drugs. The patientidentification requirement was a product of an orderly and rational
legislative decision made upon recommmendation by a specially
appointed commission which held extensive hearings on the
matter. Moreover, the statute was narrowly drawn and contained
numerous safeguards against indiscriminate disclosure. The
statute laid down the procedure and requirements for the
gathering, storage and retrieval of the informatin. It ebumerated
who were authorized to access the data. It also prohibited public
disclosure of the data by imposing penalties for its violation. In
view of these safeguards, the infringement of the patients' right to
privacy was justified by a valid exercise of POLICE POWER. As
we discussed above, A.O. No. 308 lacks these vital safeguards.
Even while we strike down A.O. No. 308, we spell out in neon that
the Court is not per se agains the use of computers to
accumulate, store, process, retvieve and transmit data to improve
our bureaucracy. Computers work wonders to achieve the
efficiency which both government and private industry seek. Many
information system in different countries make use of the
computer to facilitate important social objective, such as better
law enforcement, faster delivery of public services, more efficient
management of credit and insurance programs, improvement of
telecommunications and streamlining of financial
activities. 81 Used wisely, data stored in the computer could help
good administration by making accurate and comprehensive
information for those who have to frame policy and make key
decisions. 82 The benefits of the computer has revolutionized
information technology. It developed the internet, 83 introduced the
concept of cyberspace 84 and the information superhighway where
the individual, armed only with his personal computer, may surf
and search all kinds and classes of information from libraries and
databases connected to the net.
In no uncertain terms, we also underscore that the right to privacy
does not bar all incursions into individual privacy. The right is not
intended to stifle scientific and technological advancements that
enhance public service and the common good. It merely requires
that the law be narrowly focused 85 and a compelling interest
justify such intrusions. 86 Intrusions into the right must be
accompanied by proper safeguards and well-defined standards to
prevent unconstitutional invasions. We reiterate that any law or
order that invades individual privacy will be subjected by this
Court to strict scrutiny. The reason for this stance was laid down
in Morfe v. Mutuc, to wit:
The concept of limited government has
always included the idea that governmental
powers stop short of certain intrusions into
the personal life of the citizen. This is indeed
one of the basic disctinctions between
absolute and limited government. Ultimate
and pervasive control of the individual, in all
aspects of his life, is the hallmark of the
absolute state. In contrast, a system of
limited government safeguards a private
sector, which belongs to the individual, firmly
distinguishing it from the public sector, which
the state can control. Protection of this
private sector protection, in other words, of
the dignity and integrity of the individual
has become increasingly important as
modern society has developed. All the forces
of a technological age industrialization,
urbanization, and organization operate to
narrow the area of privacy and facilitate
intrusion into it. In modern terms, the capacity
to maintain and support this enclave of
private life marks the difference between a
democratic and a totalitarian society. 87
IV
The right to privacy is one of the most threatened rights of man
living in a mass society. The threats emanate from various
sources governments, journalists, employers, social scientists,
On the same date, April 13, 2005, the Senate agreed to the
request of the House of Representatives for a committee conference on
the disagreeing provisions of the proposed bills.
Before long, the Conference Committee on the Disagreeing
Provisions of House Bill No. 3555, House Bill No. 3705, and Senate Bill
No. 1950, after having met and discussed in full free and conference,
recommended the approval of its report, which the Senate did on May
10, 2005, and with the House of Representatives agreeing thereto the
next day, May 11, 2005.
uniformly isnt
it?
ATTY. BANIQUED
J. PANGANIBAN
It is not?
ATTY. BANIQUED
J. PANGANIBAN
ATTY. BANIQUED
J. PANGANIBAN
. . . and therefore
that was meant
to temper the
impact . . .
interrupted
:
. . . mitigating
measures . . .
ATTY. BANIQUED
J. PANGANIBAN
As a matter of fact
a part of the
mitigating
measures would
be
the
elimination of
the Excise Tax
and the import
duties. That is
why, it is not
correct to say
that the VAT as
to
petroleum
dealers
increased prices
by 10%.
ATTY. BANIQUED
J. PANGANIBAN
ATTY. BANIQUED
J. PANGANIBAN
these mitigating
measures
and
the location and
situation of each
product, of each
service, of each
company, isnt
it?
ATTY. BANIQUED
J. PANGANIBAN
Alright. So thats
one reason why
we had to issue
a TRO pending
the clarification
of all these and
we wish the
government will
take time to
clarify all these
by means of a
more
detailed
implementing
rules, in case the
law is upheld by
this Court. . . .[6]
ATTY. BANIQUED
J. PANGANIBAN
unfair and additional tax burden on the people, in that: (1) the 12%
increase is ambiguous because it does not state if the rate would be
returned to the original 10% if the conditions are no longer satisfied; (2)
the rate is unfair and unreasonable, as the people are unsure of the
applicable VAT rate from year to year; and (3) the increase in the VAT
rate, which is supposed to be an incentive to the President to raise the
VAT collection to at least 2 4/5 of the GDP of the previous year, should
only be based on fiscal adequacy.
1)
2)
3)
3)
Committee
in deleting
present in
House Bill
SUBSTANTIVE ISSUES
1.
Whether Sections 4, 5 and 6 of R.A. No.
9337, amending Sections 106, 107 and 108 of the
NIRC, violate the following provisions of the
Constitution:
a.
b.
2.
Whether Section 8 of R.A. No. 9337,
amending Sections 110(A)(2) and 110(B) of the
NIRC; and Section 12 of R.A. No. 9337,
amending Section 114(C) of the NIRC, violate the
following provisions of the Constitution:
a.
b.
1)
Inserting the stand-by authority in favor of
the President in Sections 4, 5, and 6 of R.A. No.
9337;
2)
Deleting
entirely
the no
passon provisions found in both the House and Senate
bills;
3)
Inserting the provision imposing a 70%
limit on the amount of input tax to be credited
against the output tax; and
4)
Including the amendments introduced
only by Senate Bill No. 1950 regarding other
kinds of taxes in addition to the value-added tax.
Petitioners now beseech the Court to define the powers of the
Bicameral Conference Committee.
It should be borne in mind that the power of internal
regulation and discipline are intrinsic in any legislative body for, as
unerringly elucidated by Justice Story, [i]f the power did not exist, it
would be utterly impracticable to transact the business of the
nation, either at all, or at least with decency, deliberation, and
order.[19] Thus, Article VI, Section 16 (3) of the Constitution provides
that each House may determine the rules of its proceedings. Pursuant
to this inherent constitutional power to promulgate and implement its
own rules of procedure, the respective rules of each house of Congress
provided for the creation of a Bicameral Conference Committee.
Thus, Rule XIV, Sections 88 and 89 of the Rules of House of
Representatives provides as follows:
Sec. 88. Conference Committee. In
the event that the House does not agree with the
Senate on the amendment to any bill or joint
resolution, the differences may be settled by the
conference committees of both chambers.
In resolving the differences with the
Senate, the House panel shall, as much as
possible, adhere to and support the House Bill. If
the differences with the Senate are so substantial
that they materially impair the House Bill, the
panel shall report such fact to the House for the
latters appropriate action.
Sec.
89. Conference
Committee
Reports. . . . Each report shall contain a detailed,
sufficiently explicit statement of the changes in or
amendments to the subject measure.
...
House Bill
No.3705
Provides for a
single rate of 10%
VAT on sale of
goods or properties
(amending Sec. 106
of NIRC), 10%
VAT on sale of
12% VAT on
importation of
goods
(amending Sec.
107 of NIRC);
and 12% VAT
on
sale
of
services
and
use or lease of
properties
(amending Sec.
108 of NIRC)
manufactured
goods
and
petroleum
products and raw
materials to be
used
in
the
manufacture
thereof (amending
Sec.
106
of
NIRC); 12% VAT
on importation of
goods and reduced
rates for certain
imported products
including
petroleum
products
(amending
Sec.
107 of NIRC); and
12% VAT on sale
of services and use
or
lease
of
properties and a
reduced rate for
certain
services
including power
generation
(amending
Sec.
108 of NIRC)
services including
sale of electricity
by
generation
companies,
transmission and
distribution
companies, and use
or
lease
of
properties
(amending Sec. 108
of NIRC)
Provides that
the input tax
credit
for
capital goods
on which a VAT
has been paid
shall be equally
distributed over
5 years or the
depreciable life
of such capital
goods; the input
tax credit for
goods
and
services other
than
capital
goods shall not
exceed 5% of
the
total
amount of such
goods
and
services;
and
for
persons
No
provision
similar
engaged
in
retail trading of
goods,
the
allowable input
tax credit shall
not exceed 11%
of the total
amount
of
goods
purchased.
No
provision
similar
Provided
for
amendments
to
several
NIRC
provisions
regarding corporate
income,
percentage,
franchise
and
excise taxes
B.
28(A)
(1)
28(B)
(1)
34(B)
(1)
117
119
121
148
151
236
237
288
The Court reiterates here that the no-amendment rule
refers only to the procedure to be followed by each house of
Congress with regard to bills initiated in each of said respective
houses, before said bill is transmitted to the other house for its
concurrence or amendment. Verily, to construe said provision in a
way as to proscribe any further changes to a bill after one house has
voted on it would lead to absurdity as this would mean that the other
house of Congress would be deprived of its constitutional power to
amend or introduce changes to said bill. Thus, Art. VI, Sec. 26 (2) of the
Constitution cannot be taken to mean that the introduction by the
Bicameral Conference Committee of amendments and modifications to
disagreeing provisions in bills that have been acted upon by both houses
of Congress is prohibited.
C.
Income Tax
on Domestic
Corporation
Tax
on
Resident
Foreign
Corporation
Intercorporate
Dividends
Intercorporate
Dividends
Tax
on
Persons
Exempt from
VAT
Percentage
Tax
on
domestic
carriers and
keepers of
Garage
Tax
on
franchises
Tax on banks
and
NonBank
Financial
Intermediari
es
Excise Tax
on
manufacture
d oils and
other fuels
Excise Tax
on mineral
products
Registration
requirements
Issuance of
receipts or
sales
or
commercial
invoices
Disposition
of
Incremental
Revenue
Rates
of
transmittal of said House bills to the Senate, the Senate came out with
Senate Bill No. 1950 proposing amendments not only to NIRC
provisions on the value-added tax but also amendments to NIRC
provisions on other kinds of taxes. Is the introduction by the Senate of
provisions not dealing directly with the value- added tax, which is the
only kind of tax being amended in the House bills, still within the
purview of the constitutional provision authorizing the Senate to propose
or concur with amendments to a revenue bill that originated from the
House?
The foregoing question had been squarely answered in
the Tolentinocase, wherein the Court held, thus:
. . . To begin with, it is not the law
but the revenue bill which is required by the
Constitution to originate exclusively in the
House of Representatives. It is important to
emphasize this, because a bill originating in the
House may undergo such extensive changes in the
Senate that the result may be a rewriting of the
whole. . . . At this point, what is important to note
is that, as a result of the Senate action, a distinct
bill may be produced. To insist that a revenue
statute and not only the bill which initiated
the legislative process culminating in the
enactment of the law must substantially be
the same as the House bill would be to deny the
Senates power not only to concur with
amendments
but
also
to
propose
amendments. It would be to violate the
coequality of legislative power of the two houses
of Congress and in fact make the House superior
to the Senate.
Legi
slati
ve
Pow
er
Petitioners ABAKADA GURO Party List, et al., Pimentel,
Jr., et al., and Escudero, et al. contend in common that Sections 4, 5 and
6 of R.A. No. 9337, amending Sections 106, 107 and 108, respectively,
of the NIRC giving the President the stand-by authority to raise the VAT
rate from 10% to 12% when a certain condition is met, constitutes undue
delegation of the legislative power to tax.
[35]
(A)
Rate and Base of
Tax. There shall be
levied,
assessed
and
collected on every sale,
barter or exchange of goods
or properties, a value-added
tax equivalent to ten
percent (10%) of the gross
selling price or gross value
in money of the goods or
properties sold, bartered or
exchanged, such tax to be
paid by the seller or
transferor:provided,
that the President, upon
the recommendation of
the Secretary of Finance,
shall, effective January 1,
2006, raise the rate of
value-added tax to twelve
percent (12%), after any
of
the
following
conditions
has
been
satisfied.
...
(i)
value-added
tax collection
as a percentage
of
Gross
Domestic
Product (GDP)
of the previous
year
exceeds
two and fourfifth percent (2
4/5%) or
(ii)
national
government
deficit as a
percentage of
GDP of the
previous year
exceeds
one
and
one-half
percent (1
%).
No Undue
Dele
gatio
n of
on
(ii)
value-added tax
collection as a
percentage of
Gross Domestic
Product (GDP)
of the previous
year
exceeds
two and fourfifth percent (2
4/5%) or
national
government
deficit as a
percentage of
GDP of the
previous year
exceeds
one
and
one-half
percent (1
%).
conditions
satisfied.
(i)
(ii)
has
been
value-added tax
collection as a
percentage of
Gross Domestic
Product (GDP)
of the previous
year
exceeds
two and fourfifth percent (2
4/5%) or
national
government
deficit as a
percentage of
GDP of the
previous year
exceeds
one
and
one-half
percent (1
%). (Emphasis
supplied)
(A)
Rate and Base of
Tax. There shall be
levied,
assessed
and
collected, a value-added tax
equivalent to ten percent
(10%) of gross receipts
derived from the sale or
exchange
of
services: provided,
that
the President, upon the
recommendation of the
Secretary of Finance,
shall, effective January 1,
2006, raise the rate of
value-added tax to twelve
percent (12%), after any
of
the
following
the
of
the
of
by the President. Inasmuch as the law specifically uses the word shall,
the exercise of discretion by the President does not come into play. It is
a clear directive to impose the 12% VAT rate when the specified
conditions are present. The time of taking into effect of the 12% VAT
rate is based on the happening of a certain specified contingency, or
upon the ascertainment of certain facts or conditions by a person or body
other than the legislature itself.
The Court finds no merit to the contention of
petitioners ABAKADA GURO Party List, et al. that the law effectively
nullified the Presidents power of control over the Secretary of Finance
by mandating the fixing of the tax rate by the President upon the
recommendation of the Secretary of Finance. The Court cannot also
subscribe to the position of petitioners
Pimentel, et al. that the word shall should be interpreted to mean may in
view of the phrase upon the recommendation of the Secretary of
Finance. Neither does the Court find persuasive the submission of
petitioners Escudero, et al. that any recommendation by the Secretary of
Finance can easily be brushed aside by the President since the former is
a mere alter ego of the latter.
When one speaks of the Secretary of Finance as the alter ego
of the President, it simply means that as head of the Department of
Finance he is the assistant and agent of the Chief Executive. The
multifarious executive and administrative functions of the Chief
Executive are performed by and through the executive departments, and
the acts of the secretaries of such departments, such as the Department
of Finance, performed and promulgated in the regular course of
business, are, unless disapproved or reprobated by the Chief Executive,
presumptively the acts of the Chief Executive. The Secretary of Finance,
as such, occupies a political position and holds office in an advisory
capacity, and, in the language of Thomas Jefferson, "should be of the
President's bosom confidence" and, in the language of Attorney-General
Cushing, is subject to the direction of the President." [55]
In the present case, in making his recommendation to the
President on the existence of either of the two conditions, the Secretary
of Finance is not acting as the alter ego of the President or even her
subordinate. In such instance, he is not subject to the power of control
and direction of the President. He is acting as the agent of the legislative
department, to determine and declare the event upon which its expressed
will is to take effect.[56] The Secretary of Finance becomes the means or
tool by which legislative policy is determined and implemented,
considering that he possesses all the facilities to gather data and
information and has a much broader perspective to properly evaluate
them. His function is to gather and collate statistical data and other
pertinent information and verify if any of the two conditions laid out by
Congress is present. His personality in such instance is in reality but a
projection of that of Congress. Thus, being the agent of Congress and
not of the President, the President cannot alter or modify or nullify, or
set aside the findings of the Secretary of Finance and to substitute the
judgment of the former for that of the latter.
Congress simply granted the Secretary of Finance the
authority to ascertain the existence of a fact, namely, whether by
December 31, 2005, the value-added tax collection as a percentage of
Gross Domestic Product (GDP) of the previous year exceeds two and
four-fifth percent (24/5%) or the national government deficit as a
percentage of GDP of the previous year exceeds one and one-half
percent (1%). If either of these two instances has occurred, the
Secretary of Finance, by legislative mandate, must submit such
information to the President. Then the 12% VAT rate must be imposed
by the President effective January 1, 2006. There is no undue
delegation of legislative power but only of the discretion as to the
execution of a law. This is constitutionally permissible.[57] Congress
does not abdicate its functions or unduly delegate power when it
describes what job must be done, who must do it, and what is the scope
of his authority; in our complex economy that is frequently the only way
in which the legislative process can go forward.[58]
As to the argument of petitioners ABAKADA GURO Party
List, et al.that delegating to the President the legislative power to tax is
contrary to the principle of republicanism, the same deserves scant
consideration. Congress did not delegate the power to tax but the mere
implementation of the law. The intent and will to increase the VAT rate
to 12% came from Congress and the task of the President is to simply
execute the legislative policy. That Congress chose to do so in such a
manner is not within the province of the Court to inquire into, its task
being to interpret the law.[59]
The insinuation by petitioners Pimentel, et al. that the President
has ample powers to cause, influence or create the conditions to bring
about either or both the conditions precedent does not deserve any merit
as this argument is highly speculative. The Court does not rule on
allegations which are manifestly conjectural, as these may not exist at
all. The Court deals with facts, not fancies; on realities, not
appearances. When the Court acts on appearances instead of realities,
justice and law will be short-lived.
B.
IV.
explained
the
philosophy
behind
these
also justified its move by saying that the provision was designed to raise
an annual revenue of 22.6 billion. [77] The legislature also dispelled the
fear that the provision will fend off foreign investments, saying that
foreign investors have other tax incentives provided by law, and citing
the case of China, where despite a 17.5% non-creditable VAT, foreign
investments were not deterred.[78] Again, for whatever is the purpose of
the 60-month amortization, this involves executive economic policy and
legislative wisdom in which the Court cannot intervene.
With regard to the 5% creditable withholding tax imposed on
payments made by the government for taxable transactions, Section 12
of R.A. No. 9337, which amended Section 114 of the NIRC, reads:
The
Government or any of its political subdivisions,
instrumentalities
or
agencies,
including
government-owned or controlled corporations
(GOCCs) shall, before making payment on
account of each purchase of goods from sellers
and services rendered by contractors which are
subject to the value-added tax imposed in
Sections 106 and 108 of this Code, deduct and
withhold the value-added tax due at the rate of
three percent (3%) of the gross payment for the
purchase of goods and six percent (6%) on gross
receipts for services rendered by contractors on
every sale or installment payment which shall
be creditable against the value-added tax
liability of the seller or contractor: Provided,
however, That in the case of government public
works contractors, the withholding rate shall be
eight and one-half percent (8.5%): Provided,
further, That the payment for lease or use of
properties or property rights to nonresident
owners shall be subject to ten percent (10%)
withholding tax at the time of payment. For this
purpose, the payor or person in control of the
payment shall be considered as the withholding
agent.
The valued-added tax withheld
under this Section shall be remitted within ten
(10) days following the end of the month the
withholding was made. (Emphasis supplied)
As amended, the use of the word final and the deletion of the
wordcreditable exhibits Congresss intention to treat transactions with
the government differently. Since it has not been shown that the class
subject to the 5% final withholding tax has been unreasonably narrowed,
there is no reason to invalidate the provision. Petitioners, as petroleum
dealers, are not the only ones subjected to the 5% final withholding tax.
It applies to all those who deal with the government.
Moreover, the actual input tax is not totally lost or
uncreditable, as petitioners believe. Revenue Regulations No. 14-2005
or the Consolidated Value-Added Tax Regulations 2005 issued by the
BIR, provides that should the actual input tax exceed 5% of gross
payments, the excess may form part of the cost. Equally, should the
actual input tax be less than 5%, the difference is treated as income. [81]
Progressivity of Taxation
[7]
The Case
This is a petition for review oncertiorari of the
Decision[1] dated 13 December 2000 of the Court of Appeals in
CA-G.R. CV No. 48784. The Court of Appeals affirmed the
Decision[2] of the Regional Trial Court, Branch 21, Cebu City (trial
court), which held that Milagros Orbiso Montesclaros is entitled
to survivorship pension.
The Facts
Sangguniang Bayan member Nicolas Montesclaros
(Nicolas) married Milagros Orbiso (Milagros) on 10 July 1983.
[3]
Nicolas was a 72- year old widower when he married Milagros
who was then 43 years old.
On 4 January 1985, Nicolas filed with the Government
Service Insurance System (GSIS) an application for retirement
benefits effective 18 February 1985 under Presidential Decree
No. 1146 or the Revised Government Service Insurance Act of
1977 (PD 1146). In his retirement application, Nicolas
designated his wife Milagros as his sole beneficiary.[4] Nicolas last
day of actual service was on 17 February 1985.[5] On 31 January
1986, GSIS approved Nicolas application for retirement
effective 17 February 1984, granting a lump sum payment of
annuity for the first five years and a monthly annuity thereafter.
[6]
Nicolas died on 22 April 1992. Milagros filed with GSIS a claim
for survivorship pension under PD 1146. On 8 June 1992, GSIS
denied the claim because under Section 18 of PD 1146, the
surviving spouse has no right to survivorship pension if the
surviving spouse contracted the marriage with the pensioner
within three years before the pensioner qualified for the pension.
The Court of Appeals agreed with the trial court that the
retirement benefits are onerous and conjugal because the
pension came from the deceased pensioners salary
deductions. The Court of Appeals held that the pension is not
gratuitous since it is a deferred compensation for services
rendered.
The Issues
GSIS raises the following issues:
1. Whether Section 16 of PD 1146 entitles Milagros to
survivorship pension;
2. Whether retirement benefits form part of conjugal
property;
3. Whether Articles 254 and 256 of the Family Code
repealed Section 18 of PD 1146.[12]
The Courts Ruling
The pertinent provisions of PD 1146 on survivorship
benefits read:
SEC. 16. Survivorship Benefits. When a member or pensioner dies, the
beneficiary shall be entitled to survivorship benefits provided for in
sections seventeen and eighteen hereunder. The survivorship pension
shall consist of:
June 8, 2006
The Issues
xxxx
xxxx
(h) Drive any bicycle, tricycle, pedicab, motorcycle or any
vehicle (not motorized);
x x x x12 (Emphasis supplied)
On 5 April 1993, Acting Secretary Edmundo V. Mir of
the Department of Public Works and Highways issued DO 74:
SUBJECT: Declaration of the North Luzon Expressway from
Balintawak to Tabang and the South Luzon Expressway from
Nichols to Alabang as Limited Access Facilities
Pursuant to Section 2 of Republic Act No. 2000, a limited access
facility is defined as "a highway or street especially designed for
through traffic, and over, from, or to which owners or occupants of
abutting land or other persons have no right or easement or only
a limited right or easement of access, light, air or view by reason
of the fact that their proper[t]y abuts upon such limited access
facility or for any other reason. Such highways or streets may be
parkways, from which trucks, buses, and other commerical [sic]
vehicles shall be excluded; or they may be free ways open to use
by all customary forms of street and highway traffic."
Section 3 of the same Act authorizes the Department of Public
Works and Communications (now Department of Public Works
and Highways) "to plan, designate, establish, regulate, vacate,
alter, improve, maintain, and provide limited access facilities for
public use wherever it is of the opinion that traffic conditions,
present or future, will justify such special facilities."
Therefore, by virtue of the authority granted above, the
Department of Public Works and Highways hereby designates
and declares the Balintawak to Tabang Sections of the North
Luzon Expressway, and the Nichols to Alabang Sections of the
South Luzon Expressways, to be LIMITED ACCESS
HIGHWAYS/FACILITIES subject to such rules and regulations
that may be imposed by the DPWH thru the Toll Regulatory Board
(TRB).
In view thereof, the National Capital Region (NCR) of this
Department is hereby ordered, after consultation with the TRB
and in coordination with the Philippine National Police (PNP), to
close all illegal openings along the said Limited Access
Highways/Facilities. In this connection, the NCR is instructed to
organize its own enforcement and security group for the purpose
of assuring the continued closure of the right-of-way fences and
the implementation of the rules and regulations that may be
imposed by the DPWH thru the TRB.
This Order shall take effect immediately.13
1.
2.
B.
Q:
A:
Q:
A:
A:
Q:
Q:
A:
February 7, 2007
[25]
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the 28 June 1999 Decision2 and
the 16 November 1999 Resolution3 of the Court of Appeals in CAG.R. SP No. 46624. The Court of Appeals held that Municipal
Ordinance No. 97-08 is a valid exercise of POLICE POWER by
the Municipality of Paraaque.4
Article XIII.
The Facts
xxxx
No pronouncement as to costs.
BARANGAY BF HOMES
SO ORDERED.
Citing the General Welfare Clause11 of Republic Act No. 7160 (RA
7160), the Court of Appeals held that the enactment of Municipal
Ordinance No. 97-08 which, among others, reclassified El Grande
and Aguirre Avenues in BF Homes Paraaque as commercial
zones, was a valid exercise of POLICE POWER by the
Municipality of Paraaque.
The Court of Appeals took judicial notice of the fact that El
Grande and Aguirre Avenues are main streets of BF Homes
Paraaque which have long been commercialized, thus:
The declaration of El Grande and Aguirre Avenues as commercial
zones through Municipal Ordinance No. 97-08 is an exercise of
POLICE POWER.
Obviously, because of the rapid and tremendous increase in
population, the needs of the homeowners in the BF Paraaque
Subdivision grew. The commercial zones in the area proved
inadequate to service the needs of its residents. There was
therefore a need to open more commercial districts. In fact,
records show that several homeowners along El Grande and
Aguirre Avenues converted their residences into business
establishments. El Actos members are among them.
Aside from the increasing number of commercial establishments
therein, judicial notice may be taken of the fact that El Grande
and Aguirre Avenues are main thoroughfares of BF Homes
Paraaque which have long been commercialized. The local
government therefore responded to these changes in the
community by enacting Ordinance No. 97-08 x x x.12
The Issues
Petitioners raise the following issues: