STATUTORY CONSTRUCTION CASE DIGEST 1
ENDENCIA VS. DAVID
FACTS:
Saturnino David, the then Collector of Internal Revenue, ordered
the taxing of Justice Pastor Endencias and Justice Fernando
Jugos (and other judges) salary pursuant to Sec. 13 of Republic
Act No. 590 which provides that
No salary wherever received by any public officer of the
Republic of the Philippines shall be considered as exempt from
the income tax, payment of which is hereby declared not to be a
diminution of his compensation fixed by the Constitution or by
law.
The judges however argued that under the case of Perfecto vs
Meer, judges are exempt from taxation this is also in
observance of the doctrine of separation of powers, i.e., the
executive, to which the Internal Revenue reports, is separate
from the judiciary; that under the Constitution, the judiciary is
independent and the salaries of judges may not be diminished
by the other branches of government; that taxing their salaries is
already a diminution of their benefits/salaries (see Section 9, Art.
VIII, Constitution).
The Solicitor General, arguing in behalf of the CIR, states that
the decision in Perfecto vs Meer was rendered ineffective when
Congress enacted Republic Act No. 590.
ISSUE: Whether or not Sec 13 of RA 590 is constitutional.
HELD: No. The said provision is a violation of the separation of
powers. Only courts have the power to interpret laws. Congress
makes laws but courts interpret them. In Sec. 13, R.A. 590,
Congress is already encroaching upon the functions of the
courts when it inserted the phrase: payment of which [tax] is
hereby declared not to be a diminution of his compensation fixed
by the Constitution or by law.
Here, Congress is already saying that imposing taxes upon
judges is not a diminution of their salary. This is a clear example
of interpretation or ascertainment of the meaning of the phrase
which shall not be diminished during their continuance in office,
found in Section 9, Article VIII of the Constitution, referring to the
salaries of judicial officers. This act of interpreting the
Constitution or any part thereof by the Legislature is an invasion
of the well-defined and established province and jurisdiction of
the Judiciary.
The rule is recognized elsewhere that the legislature cannot
pass any declaratory act, or act declaratory of what the law was
before its passage, so as to give it any binding weight with the
courts. A legislative definition of a word as used in a statute is
not conclusive of its meaning as used elsewhere; otherwise, the
legislature would be usurping a judicial function in defining a
term.
The interpretation and application of the Constitution and of
1
statutes is within the exclusive province and jurisdiction of the
judicial department, and that in enacting a law, the Legislature
may not legally provide therein that it be interpreted in such a
way that it may not violate a Constitutional prohibition, thereby
tying the hands of the courts in their task of later interpreting said
statute, especially when the interpretation sought and provided
in said statute runs counter to a previous interpretation already
given in a case by the highest court of the land.
SILVA VS. CABRERA
RJP NOTES
FACTS:
In the Public Service Commission Belen Cabrera filed an
application for a certificate of public convenience to install,
maintain, and operate in the City of Lipa, an ice plant with a 15-
ton daily productive capacity and to sell the produce of said plant
in several municipalities of Batangas province as well as in the
City of Lipa.
Eliseo Silva and Opulencia & Lat, holders of certificates of public
convenience to operate each a 5-ton ice plant, opposed the
application on the ground that their service was adequate for the
needs of the public, and that public convenience did not require
the operation of the ice plant applied for by Cabrera.
Instead of the Commission conducting the corresponding
hearing in order to receive the evidence to be presented by
applicant and oppositors, Commissioner Feliciano Ocampo by
order dated July 14, 1949, commissioned Atty. Antonio H.
Aspillera, Chief of the Legal Division "to take the testimony of
witnesses" in this case pursuant to the provisions of section 32
of Commonwealth Act No. 146 known as the Public Service Act.
Attorney Aspillera conducted hearings, and received extensive
evidence, oral and documentary, the transcript of the
stenographic notes taken consisting of 227 pages.
Thereafter, the Commission en banc rendered a decision
authorizing the applicant to operate a 10-ton ice plant in Lipa
City, and that applicant is a Filipino citizen and is financially
qualified to install and operate a 10-ton ice plant
Eliseo Silva, one of the oppositors filed the present petition for
review assigning two errors:
"ERROR I. That section 3 prohibits a hearing before any
person other than a Commissioner in contested cases;
consequently, the delegation made by the Commission to
Attorney Aspillera is illegal and contrary to law.
"ERROR II. That the decision is not supported by evidence to
warrant the Grant of the certificate to applicant-respondent Belen
Cabrera."
ISSUE: Whether or not the delegation made by the Commission
to Attorney Aspillera to take the testimony of witnesses was
illegal and contrary to the provisions of section 3 of the Public
Service Act.
HELD: After examining the law, particularly the language used in
sections 3 and 32, above-quoted, we agree with the petitioner
that the delegation made to Attorney Aspillera, especially
considering the manner in which he received the evidence, was
contrary to the provisions of the Public Service Act.
The law (sec. 3) is clear that in a contested case like the
present, only the Commission in banc is authorized to conduct
the hearing, although said Commission may delegate the
reception of the evidence to one of the Commissioners who shall
report to the Commission in banc, the evidence so received by
him.
Under Commonwealth Act No. 146 before it was amended by
Republic Act No. 178, the Public Service Commission consisted
only of a Public Service Commissioner and a Deputy
 STATUTORY CONSTRUCTION CASE DIGEST 1
Commissioner. The Deputy Commissioner acted only on matters
delegated to him by the Public Service Commissioner, and in
case of the latters absence, illness or incapacity, he acted in his
stead. The Public Service Commissioner alone heard and
disposed of all cases, contested and non-contested. There could
therefore be no hearing or decision in banc.
The Legislature in promulgating Commonwealth Act 146
evidently believed that one Commissioner, either the Public
Service Commissioner or his deputy if properly commissioned,
was sufficient to hear and decide even contested cases and
cases involving the fixing of rates.
Under said Commonwealth Act 146 before amendment,
particularly section 32 thereof, the Commission besides
authorizing the taking of depositions and the testimonies of
witnesses by clerks of courts of first instance and justice of the
peace in the provinces, also authorized the reception of
evidence by the Commissions attorneys and chiefs of divisions.
Then came Republic Act 178 amending sections 2 and 3 of
Commonwealth Act 146 making the Commission to consist of
one Public Service Commissioner and two Associate Public
Service Commissioners under the second section, and under
section 3, as already seen from the reproduction of said section,
requiring that all contested cases and cases involving the fixing
of rates, be heard and decided by the three Commissioners in
banc although the reception of evidence may be delegated to
one of the Commissioners alone.
The inference is obvious. In contested cases like the present,
the Legislature did not wish to entrust the holding of a hearing
and the reception of evidence to anyone but the three
Commissioners acting in banc or one of them when properly
authorized.
Respondent contended that the order of delegation in favor of
Atty. Aspillera "was a mere authority to take the testimony of
witnesses in the above-entitled case, which in fact is in the form
of a deposition and not a reception of evidence, much less a
hearing, and so does not violate section 3. An examination of
the record does not support this contention.
What Atty. Aspillera did was to represent the Commission, act as
a sort of Commissioner, conduct hearings, receive evidence, oral
and documentary, and pass upon petitions and objections as
they came up in the course of said hearing. He even addressed
questions to the witnesses. He passed upon the competency
and admissibility of exhibits and admitted them. In the transcript
of the stenographic notes, Atty. Aspillera is repeatedly referred to
as the "Commission" and the proceedings had before him on
different dates as "hearings."After the submission of the
evidence Atty. Aspillera declared the "Case submitted."
It is obvious that the evidence received by Atty. Aspillera were
not mere depositions or testimonies, and that his actuation was
not that of a mere official like a justice of the peace receiving a
deposition under the provisions of Rule 18 of the Rules of Court.
The role played by Atty. Aspillera was rather that of a
2
Commissioner under Rule 34 wherein he acted as a
representative of the Commission that made the delegation to
him, passed upon petitions and objections during the trial, either
overruling or sustaining the same and ordered witnesses to
answer if the objection to the question was overruled, and then
making his findings and report to the body that commissioned
him.
RJP NOTES
In conclusion, we hold that under the provisions of section 3 of
the Public Service Act as amended by Republic Act 178, the
reception of evidence in a contested case may be delegated
only to one of the Commissioners and to no one else, it being
understood that such reception of evidence consists in
conducting hearings, receiving evidence, oral and documentary,
passing upon the relevancy and competency of the same, ruling
upon petitions and objections that come up in the course of the
hearings, and receiving and rejecting evidence in accordance
with said rulings. However, under section 32, of the same Act,
even in contested cases or cases involving the fixing of rates,
any attorney or chief of division of the Commission, a clerk of
court of Courts of First Instance, or a Justice of the Peace, may
be authorized to take depositions or receive the testimonies of
witnesses, provided that the same is done under the provisions
of Rule 18 of the Rules of Court.
We realize that our present ruling will greatly handicap the Public
Service Commission and slow down its tempo in the disposal of
contested cases and cases involving the fixing of rates,
especially where the witnesses reside in the provinces; but
where the law is clear, neither this court nor the commission may
on grounds of convenience, expediency or prompt dispatch of
cases, disregard the law or circumvent the same. The remedy
lies with the Legislature if it could be convinced of the necessity
of amending the law, and persuaded to approve a suitable
amendment.
CEBU PORTLAND CEMENT COMPANY
vs.
MUNICIPALITY OF NAGA, CEBU, ET AL
FACTS:
The Treasurer of the Mun. of Naga, Cebu collected from Cebu P
ortland Cement Company (CPCC) municipal license tax
imposed by the Amended Ordinance No. 21 on cement factories
located in the same municipality.
The demands made by the Treasurer were not entirely
successful and resulted to the
remedies provided under Section 2304 of the Revised Administr
ative Code. The Treasurer gave CPCC 10 days to settle the
account.
The Treasurer also notified the Plant Manager of CPCC that he
was distraining 100,000 bags of Apo cement in satisfaction of
their municipal license tax in the total amount
of Php 204,300.00. At first the Plant Manager did not agree with
the letter but acknowledged the distraint in the afternoon of the
same day he was notified.
The Treasurer signed the receipt of the goods under the
authority of 2304 of the Revised Administrative Code & shall sell
the same at a public auction to the highest bidder. The proceeds
thereof shall be utilized in part of the satisfaction of the municipal
license tax &penalties CPCC owes to the municipality of Naga,
Cebu.
The Notice of Sale was posted by the Treasurer & stated that the
public sale shall be on July 27, 1962. However, no sale was held
on the date specified & in the appealed decision, that there was
a stipulation by the parties where the auction took place on
January 30, 1962.
ISSUE: Whether or not the the distraint was valid and Whether
or not the auction sale was valid.
 STATUTORY CONSTRUCTION CASE DIGEST 1
HELD:
1. On the validity of the distraint:
In the first two errors assigned, plaintiff-appellant submits as
illegal the distraint of 100,000 bags of cement made on July 6,
1961. Its contention is premised on the fact that in the letter of
defendant-appellee dated June 26, 1961, requiring plaintiff-
appellant to settle its account of P204,300.00, it was given a
period of 10 days from receipt within which it could pay, failure to
do so being the occasion for the distraint of its property. It is now
alleged that the 10-day period of grace was not allowed to lapse,
the distraint having taken place on July 6, 1961.
It suffices to answer such a contention by referring to the explicit
language of the law. According to the Revised Administrative
Code: "The remedy by distraint shall proceed as follows: Upon
the failure of the person owing any municipal tax or revenue to
pay the same, at the time required, the municipal treasurer may
seize and distrain any personal property belonging to such
person or any property subject to the tax lien, in sufficient
quantity to satisfy the tax or charge in question, together with
any increment thereto incident to delinquency, and the expenses
of the distraint."
The clear and explicit language of the law leaves no room for
doubt. The municipal treasurer "may seize and distrain any
personal property" of the individual or entity subject to the tax
upon failure "to pay the same, at the time required ..." There was
such a failure on the part of plaintiff-appellant to pay the
municipal tax at the time required. The power of the municipal
treasurer in accordance with the above provision therefore came
into play.
Whatever might have been set forth in the letter of the municipal
treasurer could not change or amend the law it has to be
enforced as written. That was what the lower court did. What
was done then cannot be rightfully looked upon as a failure to
abide by what the statutory provision requires. Time and time
again, it has been repeatedly declared by this Court that where
the law speaks in clear and categorical language, there is no
room for interpretation. There is only room for application. That
was what occurred in this case.
2. On the validity of the auction sale:
The validity of the auction sale held on January 30, 1962 is
challenged in the next two errors assigned as allegedly
committed by the lower court. Plaintiff-appellant's argument is
predicated on the fact that it was not until January 16, 1962 that
it was notified that the public auction sale was to take place on
January 29, 1962. It is its view that under the Revised
Administrative Code8 the sale of the distrained property cannot
take place "less than twenty days after notice to the owner or
possessor of the property [distrained] ... and the publication or
posting of such notice."
3 accord.
Why such a contention could not prosper is explained clearly by
the lower court in the appealed decision. Thus: "With respect to
the claim that the auction sale held on January 30, 1962
pursuant to the distraint was null and void for being contrary to
law because not more than twenty days have elapsed from the
date of notice, it is believed that the defendant Municipality of
Naga and Municipal Treasurer of Naga have substantially
complied with the requirements provided for by Section 2305 of
RJP NOTES
the Revised Administrative Code. From the time that the plaintiff
was first notified of the distraint on July 6, 1961 up to the date of
the sale on January 30, 1962, certainly, more than twenty days
have elapsed. If the sale did not take place, as advertised, on
July 27, 1961, but only on January 30, 1962, it was due to the
requests for deferment made by the plaintiff which unduly
delayed the proceedings for collection of the tax, and the said
taxpayer should not be allowed now to complain that the
required period has not yet elapsed when the intention of the tax
collector was already well-publicized for many months."9 The
reasonableness of the above observation of the lower court
cannot be disputed. Under the circumstances, the allegation that
there was no observance of the twenty-day period hardly carries
conviction.
The point is further made that the auction sale took place not on
January 29, 1962, as stated in the notice of sale, but on the next
day, January 30, 1962. According to plaintiff-appellant: "On this
score alone, the sale ..., was illegal as it was not made on the
time stated in the notice."
There is no basis to sustain such a plea as the finding of the
lower court is otherwise. Thus: "On January 16, 1962, the
defendant Treasurer informed Garaygay that he would cause the
readvertisement for sale at public auction of the 100,000 bags of
Apo cement which were under constructive distraint ... On
January 19, 1962, the said defendant issued the corresponding
notice of sale, which fixed January 30, 1962, at 10:00 A.M., as
the date of sale, posting the said notice in public places and
delivering copies thereof to the interested parties in the previous
notice, ... Ultimately, the bidding was conducted on that day,
January 30, 1962, with the representatives of the Provincial
Auditor and Provincial Treasurer present. Only two bidders
submitted sealed bids. After the bidding, the defendant-treasurer
informed the plaintiff that an award was given to the winning
bidder, ..."
This being a direct appeal to us, plaintiff-appellant must be
deemed to have accepted as conclusive what the lower court
found as established by the evidence, only questions of law
being brought to us for review. It is the established rule that
when a party appeals directly to this Court, he is deemed to
have waived the right to dispute any finding of fact made by the
court below.
UNITED CHRISTIAN MISSIONARY SOCIETY vs.
SOCIAL SECURITY COMMISSION and SOCIAL SECURITY
SYSTEM
FACTS:
The five petitioners originally filed on November 20, 1964
separate petitions with respondent Commission, contesting the
social security coverage of American missionaries who perform
religious missionary work in the Philippines under specific
employment contracts with petitioners. After several hearings,
however, petitioners commendably desisted from further
contesting said coverage, manifesting that they had adopted a
policy of cooperation with the Philippine authorities in its
program of social amelioration, with which they are in complete
They instead filed their consolidated amended petition dated
May 7, 1966, praying for condonation of assessed penalties
against them for delayed social security premium remittances in
the aggregate amount of P69,446.42 for the period from
September, 1958 to September, 1963.
 STATUTORY CONSTRUCTION CASE DIGEST 1
In support of their request for condonation, petitioners alleged
that they had labored under the impression that as international
organizations, they were not subject to coverage under the
Philippine Social Security System, but upon advice by certain
Social Security System officials, they paid to the System in
October, 1963, the total amount of P81,341.80, representing
their back premiums for the period from September, 1958 to
September, 1963.
They further claimed that the penalties assessed against them
appear to be inequitable, citing several resolutions of respondent
Commission which in the past allegedly permitted condonation
of such penalties.
On May 25, 1966, respondent System filed a Motion to Dismiss
on the ground that "the Social Security Commission has no
power or authority to condone penalties for late premium
remittance, to which petitioners filed their opposition of June 15,
1966, and in turn, respondent filed its reply thereto of June 22,
1966.
Respondent Commission set the Motion to Dismiss for hearing
and oral argument on July 20, 1966. At the hearing, petitioners'
counsel made no appearance but submitted their Memorandum
in lieu of oral argument. Upon petition of the System's Counsel,
the Commission gave the parties a further period of fifteen days
to submit their Memorandum consolidating their arguments, after
which the motion would be deemed submitted for decision.
Petitioners stood on their original memorandum, and respondent
System filed its memorandum on August 4, 1966.
On September 22, 1966, respondent Commission issued its
Order dismissing the petition and petitioners are directed to pay
the respondent System, within thirty (30) days from receipt of
this Order, the amount of P69,446.42 representing the penalties
payable by them.
ISSUE: whether or not respondent Commission erred in ruling
that it has no authority under the Social Security Act to condone
the penalty prescribed by law for late premium remittances.
HELD:
We find no error in the Commission's action.
1. The plain text and intent of the pertinent provisions of the
Social Security Act clearly rule out petitioners' posture
that the respondent Commission should assume, as
against the mandatory imposition of the 3% penalty per
month for late payment of premium remittances, the
discretionary authority of condoning, waiving or
relinquishing such penalty.
The pertinent portion of Section 22 (a) of the Social Security Act
peremptorily provides that:
SEC 22. Remittance of premiums. (a) The contributions imposed in
the preceding sections shall be remitted to the System within the first
4
seven days of each calendar month following the month for which they
are applicable or within such time as the Commission may prescribe.
"Every employer required to deduct and to remit such contribution shall
be liable for their payment and if any contribution is not paid to the
system, as herein prescribed, he shall pay besides the contribution a
penalty thereon of three per centum per month from the date the
contribution falls due until paid . . .
No discretion or alternative is granted respondent Commission in
the enforcement of the law's mandate that the employer who
RJP NOTES
fails to comply with his legal obligation to remit the premiums to
the System within the prescribed period shall pay a penalty of
three 3% per month. The prescribed penalty is evidently of a
punitive character, provided by the legislature to assure that
employers do not take lightly the State's exercise of the police
power in the implementation of the Republic's declared policy "to
develop, establish gradually and perfect a social security system
which shall be suitable to the needs of the people throughout the
Philippines and (to) provide protection to employers against the
hazards of disability, sickness, old age and death."
In this concept, good faith or bad faith is rendered irrelevant,
since the law makes no distinction between an employer who
professes good reasons for delaying the remittance of premiums
and another who deliberately disregards the legal duty imposed
upon him to make such remittance. From the moment the
remittance of premiums due is delayed, the penalty immediately
attaches to the delayed premium payments by force of law.
2. Petitioners contend that in the exercise of the respondent
Commission's power of direction and control over the
system, as provided in Section 3 of the Act, it does
have the authority to condone the penalty for late
payment under Section 4 (1), whereby it is empowered
to "perform such other acts as it may deem appropriate
for the proper enforcement of this Act."
The law does not bear out this contention. Section 4 of the
Social Security Act precisely enumerates the powers of the
Commission. Nowhere from said powers of the Commission may
it be shown that the Commission is granted expressly or by
implication the authority to condone penalties imposed by the
Act.
3. Moreover, the funds contributed to the System by
compulsion of law have already been held by us to be
"funds belonging to the members which are merely held
in trust by the Government."
Being a mere trustee of the funds of the System which actually
belong to the members, respondent Commission cannot legally
perform any acts affecting the same, including condonation of
penalties, that would diminish the property rights of the owners
and beneficiaries of such funds without an express or specific
authority therefor.
4. Where the language of the law is clear and the intent of
the legislature is equally plain, there is no room for
interpretation and construction of the statute. The Court
is therefore bound to uphold respondent Commission's
refusal to arrogate unto itself the authority to condone
penalties for late payment of social security premiums,
for otherwise we would be sanctioning the
Commission's reading into the law discretionary powers
that are not actually provided therein, and hindering
and defeating the plain purpose and intent of the
legislature.
PEOPLE VS. MAPA
FACTS:
The accused was convicted in violation of Sec. 878 in
connection to Sec. 2692 of the Revised Administrative Code as
amended by Commonwealth Act No. 56 and further amended by
R.A. 4. On August 13, 1962, the accused was discovered to
have in its possession and control a home-made revolver cal. 22
 STATUTORY CONSTRUCTION CASE DIGEST 1
with no license permit. In the court proceeding, the accused
admitted that he owns the gun and affirmed that it has no
license. The accused further stated that he is a secret agent
appointed by Gov. Leviste of Batangas and showed evidences of
appointment. In his defense, the accused presented the case of
People vs. Macarandang, stating that he must acquitted
because he is a secret agent and which may qualify into peace
officers equivalent to municipal police which is covered by Art.
879.
ISSUE: Whether or not holding a position of secret agent of the
Governor is a proper defense to illegal possession of firearms.
HELD: The Supreme Court in its decision affirmed the lower
courts decision. It stated that the law is explicit that except as
thereafter specifically allowed, "it shall be unlawful for any
person to . . . possess any firearm, detached parts of firearms or
ammunition therefor, or any instrument or implement used or
intended to be used in the manufacture of firearms, parts of
firearms, or ammunition." The next section provides that
"firearms and ammunition regularly and lawfully issued to
officers, soldiers, sailors, or marines [of the Armed Forces of the
Philippines], the Philippine Constabulary, guards in the
employment of the Bureau of Prisons, municipal police,
provincial governors, lieutenant governors, provincial treasurers,
municipal treasurers, municipal mayors, and guards of provincial
prisoners and jails," are not covered "when such firearms are in
possession of such officials and public servants for use in the
performance of their official duties.
The Court construed that there is no provision for the secret
agent; including it in the list therefore the accused is not
exempted.
QUIJANO vs. DBP
FACTS:
A petition for mandamus with prayer for a writ of preliminary inju
nction was filed by petitioners-appellants (Gedeon G. Quijano an
d Eugenia T. Quijano) to compel respondent-appellee (Develop
ment Bank of the Philippines) to accept said petitioners-
appellants back pay certificate payment for their loan from the s
aid appellee Bank.
It further compelled the respondent-appellee to restrain the ex-
officio sheriff of the province of Misamis Occidental from proceed
ing with the scheduled foreclosure sale of the real properties mor
tgaged by appellant spouses to appellee Bank.
That the petitioners filed an application for an urban estate loan
with the Rehabilitation Finance Corporation (RFC), predecessor-
in-interest of the herein respondent-bank, in the amount of P19,5
00
That the petitioners urban real estate loan was approved per RF
C Board Resolution No. 2533 on April 30,1953
That the mortgage contract was executedby the petitioners in fav
or
5 of the respondent-bank on March 23, 1954.
That the first release of P4,200 was made on April 29, 1954, and
the other releases were made subsequent thereafter
That on July 27, 1965, petitioner (as holder of Acknowledgment
No. 10181) wrote the respondent-bank in Manila offering to pay i
n the amount of P14,000 for his outstanding obligation with the r
espondent-bank
RJP NOTES
That the respondent-bank, thru its Ozamis Branch advised the p
etitioners of the non-acceptance of his offer on the ground that th
e loan was not incurred before or subsisting on June 20, 1953 w
hen Republic Act 897 was approved
ISSUE:
Whether or not the obligation of the petitioners was subsisting at
the time of the approval of Republic Act No. 897
HELD:
The Court ruled that the obligation was subsisting at the time of t
he approval of Republic Act No. 897 since it was availed only wh
en they executed the mortgage contract in March 23, 1954 and r
eceived the installments thereafter.
RATIONALE:
The Court cited the pertinent portions of the controlling provision
s of the aforementioned Back Pay Law, as amended by Republic
Act No. 897 on June 20, 1953 as follows:
Sec 2. The Treasurer of the Philippines shall, upon application of
all persons specified in section one hereof and within one year fr
om the approval of this Amendatory Act(1) obligations subsisti
ng at the time of the approval of this Amendatory Act for which th
e applicant may directly be liable to the government or to any of i
ts branches or instrumentalities, or the corporations owned or co
ntrolled by the Government, or to any citizen of the Philippines, o
r to any association or corporation organized under the laws of t
he Philippines, who may be willing to accept the same for such s
ettlement,
It is clearly stated here that the provisions expressly require the
obligations for which certificates of indebtedness may be acce
pted as payments of must be subsisting at the time of the appr
oval of R.A. 897. Should back pay certificates be offered in paym
ent to a government-owned corporation of an obligation which w
as not subsisting at the time of the enactment of said amendator
y Act on June 20, 1953, the corporation may not legally be comp
elled to accept such certificates.
Although the appellants application for an urban real estate loan
was approved by appellee bank on April 30, 1953, the appellants
only availed it when they executed the mortgage contract only o
n March 23, 1954.
Furthermore, the Court cited the case of Rodriquez vs DBP wher
ein Rodriguez obtained a loan from DBP which he received the s
um of P5000 on May 27, 1953 as first release, and the subseque
nt releases covering P9000 were all availed of and received later
than June 1953. When a balance of about P10000 remained un
paid, Rodriguez offered to pay the said outstanding balance of th
e loan with his back pay certificate. The Bank then accepted only
the amount of P5000 representing the portion of loan released b
efore the passage of Republic Act No. 897. So, Rodriguez institu
ed an action of mandamus to compel the Bank to accept his bac
k pay certificate as payment for his whole outstanding obligation.
The Court then ruled in favor of the Bank since the amounts r
eleased in July 15, 1953 and thereafter cannot be considered as
obligations subsisting in June 1953.
In the appellants case, the approved loan was availed only abou
t nine (9) months after the enactment of Republic Act 897 and th
e corresponding releases were received only after the execution
of the mortgage contract dated March 23, 1954. Therefore, only
after the corresponding amounts were released to appellants aft
er March 23, 1954 did such obligation attach thereby affirming th
 STATUTORY CONSTRUCTION CASE DIGEST 1
at the said loan was not subsisting at the time of the approval of We find, to repeat, such contention unpersuasive and affirm the
Republic Act 897 on June 20, 1953. decision of respondent Court of Tax Appeals.

Despite the appeal by the appellants that a more liberal construc 1. The language of Section 2802 appears to be quite
tion of the law would enable many crippled or disabled veterans explicit: "There shall be levied, collected and paid on all
, or their wives and orphans, or those who had in one way or ano articles imported or brought into the Philippines, and on
ther unselfishly sacrificed or contributed to the cause of war whi products of the Philippines ... exported from the Philippines, a
ch was the purpose of the said law, the Court ruled that there is charge of two pesos per gross metric ton as a fee for
wharfage ...."
no room for interpretation or construction in the clear and unamb
iguous language of the above-quoted provision of law. The Court
One category refers to what is imported. The other mentions
s first and fundamental duty is the application of law according t
products of the Philippines that are exported. Even without
o its express terms, interpretation being called for only when suc
undue scrutiny, it does appear quite obvious that as long as the
h literal application is impossible. It must see to it that its mandat
goods are produced in the country, they fall within the terms of
e is obeyed. Therefore, even before the amendment of the Back
the above section. Petitioner appeared to have entertained such
Pay Law, the said law still limited the applicability of the back pay
a nation.
certificates to obligations subsisting at the time of the approval o
f this Act and therefore obligations contracted after its enactmen
In its petition for review before respondent Court, it categorically
t on June 18,1948 cannot be considered.
asserted: "Petitioner is primarily engaged in the manufacture of
REPUBLIC FLOUR MILL v COMMISSIONER OF CUSTOM
flour from wheat grain. In the process of milling the wheat grain
into flour, petitioner also produces 'bran' and 'pollard' which it
FACTS:
exports abroad."
Petitioner, Republic Flour Mills, Inc., is a domestic corporation,
It does take a certain amount of hair-splitting to exclude from its
primarily engaged in the manufacture of wheat flour, and
operation what petitioner calls "waste" resulting from the
produces pollard (darak) and bran (ipa) in the process of milling.
production of flour processed from the wheat grain in petitioner's
flour mills in the Philippines.
During the period from December, 1963 to July, 1964, inclusive,
petitioner exported Pollard and/or bran which was loaded from
It is always timely to remember that, as stressed by Justice
lighters alongside vessels engaged in foreign trade while
Moreland: "The first and fundamental duty of courts, in our
anchored near the breakwater.
judgment, is to apply the law. Construction and interpretation
come only after it has been demonstrated that application is
The respondent assessed the petitioner by way of wharfage
impossible or inadequate without them." Petitioner ought to
dues on the said exportations in the sum of P7,948.00, which
have been aware that deference to such a doctrine precludes an
assessment was paid by petitioner under protest."
affirmative response to its contention. The law is clear; it must be
obeyed. It is as simple, as that.
ISSUE: whether or not such collection of wharfage dues was in
accordance with law.
Then, again, there is the fundamental postulate in statutory
construction requiring fidelity to the legislative purpose. What
HELD: The main contention before respondent Court of
Congress intended is not to be frustrated. Its objective must be
petitioner was "that inasmuch as no government or private
carried out. Even if there be doubt as to the meaning of the
wharves or government facilities [were] utilized in exporting the
language employed, the interpretation should not be at war with
pollard and/or bran, the collection of wharfage dues is contrary
the end sought to be attained.
to law."
No undue reflection is needed to show that if through an
On the other hand, the stand of respondent Commissioner of
ingenious argument, the scope of a statute may be contracted,
Customs was that petitioner was liable for wharfage dues "upon
the probability that other exceptions may be thought of is not
receipt or discharge of the exported goods by a vessel engaged
remote. If petitioner were to prevail, subsequent pleas motivated
in foreign trade regardless of the non-use of government-owned
by the same desire to be excluded from the operation of the
or private wharves."
Tariff and Customs Code would likewise be entitled to
sympathetic consideration.
Hence, this petition for review. The sole error assigned by
petitioner is that it should not, under its construction of the Act,
It is desirable then that the gates to such efforts at undue
be liable for wharfage dues on its exportation of bran and pollard
restriction of the coverage of the Act be kept closed. Otherwise,
as they are not "products of the Philippines", coming as they did
the end result would be not respect for, but defiance of, a clear
from wheat grain which were imported from abroad, and being
legislative mandate. That kind of approach in statutory
"merely parts of the wheat grain milled by Petitioner to produce
construction has never recommended itself. It does not now.
flour which had become waste."
6

RJP NOTES