1.

LEGASPI V MINISTRY OF FINANCE

FACTS:
In 1982, after the lifting of Martial Law, Legaspi, then incumbent member of the interim Batasang Pambansa, petitioned to
declare Presidential Decree 1840 granting tax amnesty and filing of statement of assets and liabilities and some other
purposes unconstitutional. He argued that said decree was promulgated despite the fact that under the Constitution
(T)he Legislative power shall be vested in a Batasang Pambansa (Sec. 1, Article VIII) and the President may grant
amnesty only with concurrence of the Batasang Pambansa. In this case, there was no concurrence given by the IBP.
Legaspi averred that since Martial Law is already lifted, the president can no longer arbitrarily enact laws. At the same
time, Legaspi averred that Amendment No. 6, which provides legislative powers to Marcos, is invalid because that is no
longer allowed after the lifting of the ML.

ISSUE: What are the possible options available to the president other than declaring martial law.

HELD: SC ruled PD 1840 to be valid. SC declared it must be emphatically made clear that explicitly the power that
Amendment No. 6 vests upon the President (Prime Minister) are to be exercised only on two specified occasions,
namely, (1) when in (his judgment) a grave emergency exists or there is a threat or imminence thereof and (2)
whenever the interim Batasang Pambansa or the regular National Assembly (now regular Batasang Pambansa) fails or is
unable to act adequately on any matter for any reason that in his judgment requires immediate action. The power is to
issue necessary decrees, orders, or letters of instruction which shall form part of the law of the land. As the tenor of the
amendment readily imparts, such power may be exercised even when the Batasan is in session. Obviously, therefore, it is
a power that is in the nature of the other powers which the Constitution directly confers upon the President or allows to be
delegated to him by the Batasan in times of crises and emergencies.
The SC also noted that Amendment No. 6 is a measure seen by the president to avoid declaring another martial law.
There are also other options that the president can recourse to; they are:
(a) emergency powers expressly delegated by the Batasan;
(b) call of the armed forces, who otherwise are supposed to be in the barracks;
(c) suspension of the privilege of the writ of habeas corpus; and
(d) martial law [being the last]
President must first exercise emergency powers as may be provided by the legislature. When it fails, it cannot be
adequate when lawless violence becomes generalized and public safety is in jeopardy, hence the need to call out the
armed forces. And when such situation still aggravates to the point of requiring the preventive incarceration or detention of
certain leaders or over active elements, it becomes inevitable to suspend the privilege of the writ of habeas corpus.
Should matters really go out of hand even after the putting into effect of the measures aforementioned, under the
constitution, without Amendment No. 6, the only recourse would be to proclaim martial law. But inasmuch as martial law is
an extreme measure that carries with it repressive and restrictive elements unpopular to liberty loving and democratically
minded sectors of the country, it is but natural to think of it only as a very last resort. Again, this is to avoid the necessity of
resorting to the proclamation of martial law that Amendment No. 6 was conceived. Paraphrasing President Marcos
himself, martial law is the law of the gun, that implies coercion and an active and direct role in the government by the
military. Thus, the virtue of Amendment No. 6 is that such undesirable features of martial law do not have to accompany
the exercise of the power thereby conferred on the Executive. To be sure, the calling out of the armed forces and the
suspension of the privilege of the writ of habeas corpus, which are concomitants of martial law, may be left out or need
not be resorted to when the President acts by virtue of such power. It is, therefore, evident that it is grossly erroneous to
say that Amendment No. 6 is in reality no less than disguised martial law.

2. Garcia-Padilla v. Ponce Enrile

FACTS:
In July 1982, Sabino Padilla, together w/ 8 others who were having a conference in a house in Bayombong, NV, were
arrested by members of the PC. The raid of the house was authorized by a search warrant issued by Judge Sayo.
Josefina, mother of Sabino, opposed the arrest averring that no warrant of arrest was issued but rather it was just a
warrant of arrest hence the arrest of her son and the others was w/o just cause. Sabino and companions together with 4
others were later transferred to a facility only the PCs know. Josefina petitioned the court for the issuance of the writ of
habeas corpus.

ISSUE: Whether or not the arrests done against Sabino et al is valid.

HELD: In a complete about face, the SC decision in the Lansang Case was reversed and the ruling in the Barcelon Case
& the Montenegro Case was again reinstated. The questioned power of the president to suspend the privilege of the
WoHC was once again held as discretionary in the president. The SC again reiterated that the suspension of the writ was
a political question to be resolved solely by the president. It was also noted that the suspension of the privilege of the writ
of habeas corpus must, indeed, carry with it the suspension of the right to bail, if the governments campaign to suppress
the rebellion is to be enhanced and rendered effective. If the right to bail may be demanded during the continuance of the
rebellion, and those arrested, captured and detained in the course thereof will be released, they would, without the least
doubt, rejoin their comrades in the field thereby jeopardizing the success of government efforts to bring to an end the
invasion, rebellion or insurrection.

NOTE: This ruling was abrogated by Sec 18, Art 7 of the 1987 Constitution which expressly constitutionalized the
Lansang Doctrine. Note as well that under Art 3 (Sec 13) of the Constitution it is stated that the right to bail shall not be
impaired even if the privilege of the writ of habeas corpus is suspended.

3. Aquino v. Commission on Elections

FACTS:
In January 1975, a petition for prohibition was filed to seek the nullification of some Presidential Decrees issued by then
President Ferdinand Marcos. It was alleged that Marcos does not hold any legal office nor possess any lawful authority
under either the 1935 Constitution or the 1973 Constitution and therefore has no authority to issue the questioned
proclamations, decrees and orders.

ISSUE: Whether or not the Marcos government is a lawful government.

HELD: Yes. First of, this is actually a quo warranto proceedings and Benigno Aquino, Jr. et al, have no legal personality to
sue because they have no claim to the office of the president. Only the Solicitor General or the person who asserts title to
the same office can legally file such a quo warranto petition.
On the issue at bar, the Supreme Court affirmed the validity of Martial Law Proclamation No. 1081 issued on September
22, 1972 by President Marcos because there was no arbitrariness in the issuance of said proclamation pursuant to the
1935 Constitution; that the factual bases (the circumstances of lawlessness then present) had not disappeared but had
even been exacerbated; that the question as to the validity of the Martial Law proclamation has been foreclosed by
Section 3(2) of Article XVII of the 1973 Constitution.
Under the (1973) Constitution, the President, if he so desires; can continue in office beyond 1973. While his term of office
under the 1935 Constitution should have terminated on December 30, 1973, by the general referendum of July 27-28,
1973, the sovereign people expressly authorized him to continue in office even beyond 1973 under the 1973 Constitution
(which was validly ratified on January 17, 1973 by the sovereign people) in order to finish the reforms he initiated under
Martial Law; and as aforestated, as this was the decision of the people, in whom sovereignty resides . . . and all
government authority emanates . . ., it is therefore beyond the scope of judicial inquiry. The logical consequence
therefore is that President Marcos is a de jure President of the Republic of the Philippines.

4. Caltex v Palomar (Post master general)

FACTS:
In the year 1960, Caltex Philippines conceived and laid the ground work for a promotional scheme calculated to
drum up patronage for its oil products. The contest was entitled Caltex Hooded Pump Contest, which calls for
participants to estimate the actual number of liters as hooded gas pump at each Caltex station will dispense during a
specific period.
Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also for
the transmission of communications, representations were made by Caltex with the postal authorities for the contest to be
cleared in advance for mailing. This was formalized in a letter sent by Caltex to the Post master General, dated October
31, 1960, in which Caltex, thru its counsel, enclosed a copy of the contest rules and endeavored to justify its position that
the contest does not violate the The Anti-Lottery Provisions of the Postal Law.
Unfortunately, the Palomar, the acting Postmaster General denied Caltexs request stating that the contest
scheme falls within the purview of the Anti-lottery Provision and ultimately, declined Clatexs request for clearance.
Caltex sought reconsideration, stressing that there being no consideration involved in part of the contestant, the
contest was not commendable as a lottery. However, the Postmaster General maintained his view that the contest
involves consideration, or even it does not involve any consideration it still falls as Gift Enterprise, which was equally
banned by the Postal Law.

ISSUE:
1 Whether the petition states a sufficient cause of action for declaratory relief?
2 Whether or not the scheme proposed by Caltex the appellee is within the coverage of the prohibitive provisions of the
Postal Law?
HELD:
I.
By express mandate of Section 1 of Rule 66 of the old Rules of Court which deals with the applicability to invoke
declaratory relief which states: Declaratory relief is available to person whose rights are affected by a statute, to
determine any question of construction or validity arising under the statute and for a declaration of rights thereunder.
In amplification, conformably established jurisprudence on the matter, laid down certain conditions:
1 There must be a justiciable controversy.
2 The controversy must be between persons whose interests are adverse.
3 The party seeking declaratory relief must have a legal interest in the controversy.
4 The issue involved must be ripe for judicial determination.
With the appellees bent to hold the contest and the appellants threat to issue a fraud order if carried out, the contenders
are confronted by an ominous shadow of imminent and inevitable litigation unless their differences are settled and
stabilized by a declaration. And, contrary to the insinuation of the appellant, the time is long past when it can rightly be
said that merely the appellees desires are thwarted by its own doubts, or by the fears of others which admittedly
does not confer a cause of action. Doubt, if any there was, has ripened into a justiciable controversy when, as in the case
at bar, it was translated into a positive claim of right which is actually contested.
Construction
Is the art or process of discovering and expounding the meaning and intention of the authors of the law with respect
to its application to a given case, where that intention is rendered doubtful, amongst others, by reason of the fact that the
given case is not explicitly provided for in the law.
It is not amiss to point out at this juncture that the conclusion we have herein just reached is not without precedent. In
Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a corporation engaged in promotional advertising
was advised by the county prosecutor that its proposed sales promotion plan had the characteristics of a lottery, and that
if such sales promotion were conducted, the corporation would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against the county prosecutor to determine the legality of its
sales promotion plan.

5. Bolos v Bolos

DOCTRINE:

Declaration of Nullity of Marriage; The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages as contained in A.M. No. 02-11-10-SC, which the Court promulgated on 15 March 2003, extends only
to those marriages entered into during the effectivity of the Family Code which took effect on 3 August 1988.

FACTS:
Petitioner Cynthia Bolos(Cynthia)filed a petition for the declaration of nullity of her marriage to Respondent Danilo Bolos
(Danilo) under Article 36 of the Family Code. After trial on the merits, the RTC granted the petition for annulment. A copy
of said decision was received by respondent Danilo and he thereafter timely filed the Notice of Appeal.
The RTC denied due course to the appeal for Danilos failure to file the required motion for reconsideration or new trial, in
violation of Section 20 of the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable
Marriages. Thereafter, the RTC issued the order declaring its decision declaring the marriage null and void as final and
executory and granting the Motion for Entry of Judgment filed by Cynthia. Not in conformity, Danilo filed with the CA a
petition forcertiorari under Rule 65 seeking to annul the orders of the RTC as they were rendered with grave abuse of
discretion amounting to lack or in excess of jurisdiction. Danilo also prayed that he be declared psychologically
capacitated to render the essential marital obligations to Cynthia, who should be declared guilty of abandoning him, the
family home and their children.
The CA granted the petition and reversed and set aside the assailed orders of the RTC declaring the nullity of marriage as
final and executory. The appellate court stated that the requirement of a motion for reconsideration as a prerequisite to
appeal under A.M. No. 02-11-10-SC did not apply in this case as the marriage between Cynthia and Danilo was
solemnized on February 14, 1980 before the Family Code took effect.
Petitioner argues that A.M. No. 02-11-10-SC is also applicable to marriages solemnized before the effectivity of the Family
Code. According to petitioner, the phrase under the Family Code in A.M. No. 02-11-10-SC refers to the word petitions
rather than to the word marriages. Such that petitions filed after the effectivity of the Family Code are governed by the
A.M. No. even if the marriage was solemnized before the same. Danilo, in his Comment, counters that A.M. No. 02-11-10-
SC is not applicable because his marriage with Cynthia was solemnized on February 14, 1980, years before its effectivity.
ISSUE:
Whether or not A.M. No. 02-11-10-SC entitled Rule on Declaration of Absolute Nullity of Void Marriages and Annulment
of Voidable Marriages, is applicable to the case at bench.
HELD:
No, it does not.
RATIO:
The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages as contained in A.M.
No. 02-11-10-SC which the Court promulgated on March 15, 2003, is explicit in its scope. Section 1 of the Rule, in fact,
reads:
Section 1. Scope.This Rule shall govern petitions for declaration of absolute nullity of void marriages and annulment of
voidable marriages under the Family Code of the Philippines.
The Rules of Court shall apply suppletorily.
The categorical language of A.M. No. 02-11-10-SC leaves no room for doubt. The coverage extends only to those
marriages entered into during the effectivity of the Family Code which took effect on August 3, 1988.7 The rule sets a
demarcation line between marriages covered by the Family Code and those solemnized under the Civil Code.8 The Court
finds Itself unable to subscribe to petitioners interpretation that the phrase under the Family Code in A.M. No. 02-11-10-
SC refers to the word petitions rather than to the word marriages.
In fine, the CA committed no reversible error in setting aside the RTC decision which denied due course to respondents
appeal and denying petitioners motion for extension of time to file a motion for reconsideration.

6. US v Keitel -------

7. Roberts v Portland Water District -----

8. Freedom from Debt Coalition v Energy Regulatory Commission

Facts: Section 34 of RA 9136 (EPIRA), imposes Universal Charge upon end-users of electricity, a charge imposed for the
recovery of stranded cost. ERC issued its Implementing Rules and Regulations defining Universal Charge refers to the
charge, if any, imposed for the recovery of Stranded Debts, Stranded Contract Costs of NPC and Stranded Contract
Costs of Eligible Contracts of Distribution Utilities and other purposes pursuant to Section 34 of the EPIRA. National
Power Corporation-Strategic Power Utilities Group (NPC-SPUG) filed with Energy Regulatory Commission (ERC) a
petition for the availment from the Universal Charge of its share for Missionary Electrification. The ERC decided the NPCs
petition authorizing it to draw up to P70, 000, 000.00 from PSALM for its 2003 Watershed Rehabilitation Budget subject
to the availability of funds for the Environmental Fund component of the Universal Charge. On the basis of the said ERC
decisions, Panay Electric Company, Inc. (PECO) charged Romeo P. Gerochi and all other end-users with the Universal
Charge as reflected in their respective electric bills starting from the month of July 2003. Petitioners submit that the
assailed provision of law and its IRR which sought to implement the same are unconstitutional on the following grounds:
1. The universal charge provided for under Section 34 of the EPIRA and sought to be implemented under Sec. 2, Rule 18
of the IRR of the said law is a tax which is to be collected from all electric end-users and self-generating entities. The
power to tax is strictly a legislative function and as such, the delegation of said power to any executive or administrative
agency like the ERC is unconstitutional, giving the same unlimited authority. The assailed provision clearly provides that
the Universal Charge is to be determined, fixed and approved by the ERC, hence leaving to the latter complete
discretionary legislative authority;2. The ERC is also empowered to approve and determine where the funds collected
should be used; 3. The imposition of the Universal Charge on all end-users is oppressive and confiscatory and amounts to
taxation without representation as the consumers were not given a chance to be heard and represented.

Issue: Whether or not there is undue delegation of legislative power to tax on the part of the ERC.

Held: No, there is no undue delegation of powers to the ERC. The EPIRA is complete in all its essential terms and
conditions, and it contains sufficient standards. Although Sec. 34 of the EPIRA merely provides that within one (1) year
from the effectivity thereof, a Universal Charge to be determined, fixed and approved by the ERC, shall be imposed on all
electricity end-users, and therefore, does not state the specific amount to be paid as Universal Charge, the amount
nevertheless is made certain by the legislative parameters provided by the law itself when it provided for the promulgation
and enforcement of a National Grid Code, and a Distribution Code. 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.
The Secretary 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 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 and to
substitute the judgment of the former for that of the latter. Congress simply granted the Secretary the authority to
ascertain the existence of a fact. If it is exists, the Secretary, by legislative mandate, must submit such information to the
President who must impose the 12% VAT rate. There is no undue delegation of legislation power but only of the discretion
as to the execution of a law.

9. Neal v United States

FACTS:
A federal District Court sentenced Meirl Gilbert Neal on two plea-bargained convictions involving possession of LSD with
intent to distribute. The amount of LSD was determined, under both the federal statute directing minimum sentences and
the U. S. Sentencing Commission's Guidelines Manual, by the whole weight of the blotter paper, or carrier medium,
containing the drug. The combined weight of the blotter paper and LSD actually sold by Neal was 109.51 grams. Thus,
the court ruled that Neal was subject to 21 U.S.C. 841(b) (1)(A)(v), which imposes a 10-year mandatory minimum
sentence on anyone convicted of trafficking in more than 10 grams of "a mixture or substance containing a detectable
amount" of LSD. After the Commission revised the Guidelines' calculation method by instructing courts to give each dose
of LSD on a carrier medium a constructive or presumed weight, Neal filed a motion to modify his sentence, contending
that the weight of the LSD attributable to him under the amended Guidelines was only 4.58 grams, well short of
841(b)(1)(A)(v)'s 10-gram requirement, and that the Guidelines' presumptive-weight method controlled the mandatory
minimum calculation. The District Court held that the actual weight of the blotter paper, with its absorbed LSD, was
determinative of whether Neal crossed the 10-gram threshold and that the 10-year mandatory minimum sentence still
applied to him notwithstanding the Guidelines. In affirming, an en banc Court of Appeals agreed with the District Court that
a dual system now prevails in calculating LSD weights.

ISSUE:
Does U.S. Sentencing Commission's Guidelines Manual's revised system for determining LSD amounts take precedence
over 21 U.S.C. 841 in determining sentencing?

HELD:
No. In a unanimous decision, authored by Justice Anthony Kennedy, the Court held that Section 841(b)(1) directs a
sentencing court to take into account the actual weight of the blotter paper with its absorbed LSD, even though the U. S.
Sentencing Commission's Guidelines Manual requires a different method of calculating the weight of an LSD mixture or
substance.

10. Illinois Brick Co. v, Illinois

Facts
Illinois Brick Company (Illinois Brick) (defendant) was a manufacturer of concrete bricks operating in the Chicago area.
Illinois Brick sold bricks to masonry contractors, who then submitted bids to general contractors for specific portions of
larger construction projects. The State of Illinois (plaintiff) awarded construction projects to general contractors who
accepted bids from masonry contractors using bricks purchased from Illinois Brick. As a result, Illinois was an indirect
purchaser of Illinois Bricks products. Illinois believed that an unlawful price-fixing conspiracy by Illinois Brick had caused
Illinois to be overcharged on construction projects by a significant amount. Illinois brought a lawsuit, seeking treble
damages under 4 of the Clayton Act. Illinois Brick moved for summary judgment on the theory that indirect purchasers
were not eligible to sue under 4 for overcharges. The court of appeals rejected the motion, and Illinois Brick appealed.

Issue

Held

11. Abad v Auditor General -----

12. PNOC v Court of Appeals -----

13. Union Pac R. Co. v US ----

 14. Collector of Internal Revenue v Manila Lodge
This is an appeal taken by the Collector of
Internal Revenue from a decision of the Court of Tax
Appeals holding that the Manila Lodge No. 761 of the
Benevolent & Protective Order of Elks "is not liable for
privilege taxes on its sale by retail of liquor and tobacco
exclusively to its members and their guests," and
reversing and setting aside a decision of said appellant
to the contrary, dated November 19, 1953, without
special pronouncement as to costs. The uncontested
facts are set forth in the decision of said Court,
from which we quote:
"This is an appeal from two decisions of the respondent
Collector of Internal Revenue assessing and demanding
from the petitioner herein the sums of P1,203.50 and
P332.00, respectively representing fixed taxes as
retail dealer in liquor, fermented liquor, and tobacco,
allegedly due from petitioner for the period from the
4th quarter of 1946 to 1953 and the period from 1954-
1955pursuant to subsections (i), (k) and (n) of section
193 of" the Tax Code, in relation to 178 of the same
Code.
"The petitioner, Manila Lodge No. 761 is admittedly a
fraternal, civic, non-stock, non-profit organization
duly incorporated under Philippine laws. It owns and
operates a clubhouse located at Dewey Boulevard,
Manila, wherein it sells at retail, liquor, fermented liquor,
cigar and cigarettes only to its members and their
guests. B.I.R. agents discovered that the Manila Elks
Club had not paid for the period in question the
privilege tax for retail liquor dealer (B-4), retail dealer in
fermented liquor (B-7), and retail tobacco dealer (B-9-a)
prescribed in section 193 of the Tax Code.
"On November 19, 1953, the Collector of Internal
Revenue assessed against and demanded from the
petitioner the payment of the sum of P1,203.50
representing fixed taxes, as retail dealer, for the period
from its 4th quarter of 1946 to 1953, exclusive of the
suggested compromise penalty of P80.00. The
petitioner, claiming that it was exempted from the
payment of the privilege taxes in question, requested
that the said assessment be reviewed by the Conference
Staff of the Bureau of Internal Revenue. The
Conference Staff, after due hearing, upheld and
reiterated the assessment made by the respondent
Collector of Internal Revenue. Forthwith, the petitioner
appealed to this Court on June 1, 1955.
"During the pendency of the original petition for review
in the above-entitled case, respondent issued another
assessment covering fixed taxes for the years 1954 to
1955 in the amount of P332.00, exclusive of
the suggested compromise penalty
of P50.00. Consequently, petitioner with leave of Court
filed a supplemental petition for review which included
the latter assessment.
"Petitioner bases its claim for exemption from
the payment of the privilege taxes' in question
on the grounds that it is not engaged ,in the business
of selling at retail liquor, fermented liquor, and tobacco
because the sale of these aforementioned
specific goods is made only to members of the club and
their guests' on a very limited scale in pursuance only of
its general purpose as a fraternal social club, to provide
comfort, recreation, and convenience to such members,
and merely to provide enough margin to cover
operational expenses.' (Petitioner's Memo p. 3).
"Respondent, on the other hand, maintains that persons
selling articles subject to specific tax, such as
cigars, tobacco liquor and the like, are subject to the
fixed taxes imposed by section 193 of the Tax Code,
irrespective of whether or not they made profit, and
whether or not they are civic or fraternal dubs selling
only to their members and their guests. This contention
is based on a ruling promulgated by the Bureau of
Internal Revenue made in 1921."
Petitioner herein maintains that:
"1. The respondent Court of Tax Appeals erred in
reversing the decision of the petitioner-appellant
which held the respondent club liable for fixed taxes.
"2. The respondent Court of Tax Appeals erred
in holding that before respondent club's liability for the
privilege taxes imposed by section 193 of the
Tax Code attaches it is necessary that it be engaged
in the 'business' of selling liquor and tobacco.
"3. The respondent Court of Tax Appeals erred
in holding that a fraternal, civic, non-stock, non-profit
organization like the respondent club selling at retail
liquor and tobacco only to its members and
their guests with just enough margin to cover
operational expenses should not be held liable for the
fixed taxes incident to the business of selling at retail,
liquor and tobacco.
"4. The respondent Court of Tax Appeals erred in
holding that the administrative construction of the
Bureau of Internal Revenue on the matter in
question is outside the ambit of, and is inconsistent with,
the Revised Administrative Code and Tax Code."
This appeal is untenable. In the language of the Court
of Tax Appeals:
"The bone of contention between the two parties herein *
* *, lies in the proper interpretation and application
of the pertinent provisions of the Tax Code,
namely, subsections (i), (k) and (n) of section 193 in
relation to section 178 of the Tax Code, which we quote
hereunder:
'SEC. 178. Payment of privilege taxes. A privilege tax
must be paid before any business or occupation
hereinafter specified can be lawfully begun or
pursued. The tax on business is payable for every
separate or distinct establishment or place where the
business subject to the tax is conducted; and one
occupation or line of business does not become exempt
by being conducted with some other occupation
or business for which such tax has been paid.
'The occupation tax must be paid by each individual
engaged in a calling subject thereto; the tax on a
business by the person, firm, or company conducting
the same.' (Italics supplied.)
SEC. 193. Amount of tax on business. Fixed taxes on
business shall be collected as follows, the amount stated
being for the whole year when not otherwise specified:
(i) Retail liquor dealers, one hundred pesos.
(k) Retail dealers in fermented liquors, fifty pesos.
* * * * * *
(n) Wholesale tobacco dealers, sixty pesos; retail
tobacco dealers, sixteen pesos/
"The aforequoted provisions of the Tax Code are clear
and precise. The privilege taxes prescribed in section
193 of the Tax Code in relation to section 178 of the
same, are to be imposed only on persons or entities
who engage in the activities mentioned or classified
therein for 'business' purposes. This evident intention
of the law becomes more palpable when we
take into consideration the fact that the drafters
of our Tax Code had grouped the aforequoted
provisions of law under one general division of the Tax
Code headed as 'Title V, Privilege Taxes on Business
and occupation.'
"It is not therefore entirely correct to maintain as
respondent does, that all persons selling articles
subject to specific taxes, like liquor and tobacco, should
likewise be subject to the fixed taxes imposed by section
193 of the Tax Code. We believe, that in order that
these persons should be subjected to the privilege
taxes imposed by the aforementioned section of the Tax
Code, it is necessary that they be engaged in the
'business' of selling liquor and tobacco, otherwise the
privilege taxes as a dealer of liquor and tobacco can not
attach.
"At this juncture a definition of the word 'business' is in
order and we have the following:
'The word 'business' in its ordinary and common use is
employed to designate human efforts which have for
their and living or reward; it is not commonly used as
descriptive of charitable, religious, educational or social
agencies.' (Ballantine's Law Dictionary, 1948 Ed. P.
179)
'Business 'that which busies or engages time, attention
or labor as a principal serious concern or interest; any
particular occupation or employment habitually engaged
in specially for livelihood or gain/ (Vol. 1, 1949 Merriam-
Webster's New International Dictionary, 2nd Ed. p.
362.).
"Other definitions of the term 'business' as given by
judicial pronouncement are found in Volume
V, Words and Phrases, page 999 as follows:
'Business is a word of large signification, and denotes
the employment or occupation in which a person is
engaged to procure a living'. (Citing: Goddard v. Chaffee,
84 Mass (Allen) 395; 79 Am Dec. 796). 'Business in
common speech means habitual or regular occupation
that a party is engaged in with a view to winning
a livelihood or some gain,' (Citing: In re Lemont, 41 p.
2D, 497, 502)
'An enterprise not; conducted as a means of livelihood
or for profit does not come within the ordinary meaning
of the terms, 'business, trade or industry.' (Citing City
of Rochester vs. Rochester Girl's Home, 194 N.Y.S.
236, 237).
'The term 'business' as used in law imposing a
license tax on business, trades, etc. ordinarily means
business in the trade or commercial sense only, carried
on with a view to profit or livelihood.' (Citing: Cuzner vs.
California Club 100 p. 868, 867, 155, Cal. 303, 20
L.R.A. N.S. 1095).
"From the foregoing definitions, it is evident that
the plain, ordinary meaning of 'business' is
restricted to activities or affairs where profit is
the purpose, or livelihood is the motive. The term
'business' being used without any qualification in section
193 of the Tax Code in relation to section 178 of the
same, should therefore be construed in its plain and
ordinary meaning, restricted to activities for profit or
livelihood.
"With these considerations in mind, we now come to the
question of whether or not the Manila Elks Club is
engaged in the 'business' of selling liquor and tobacco.
''Respondent, in paragraph 1 of his answer, admits that
the petitioner herein, Manila Elks Club is a fraternal,
civic, non-stock, non-profit organization, fit has
been established without contradiction that the Manila
Elks Club, in pursuance of its purpose as a fraternal
social club, sells on retail at its clubhouse on
Dewey Boulevard, liquor, cigars and cigarettes, on a
very limited scale, only to its members and their guests,
providing just enough margin to cover operational
expenses without intention to obtain profit. Such being
the case then, the Manila Elks Club cannot be
considered as engaged in the 'business' of selling
liquor and tobacco.
'Where the corporation handled no money except such
as was necessary to cover operational
expenses, conducted no business for itself, and
engaged in no transactions that contemplated a profit for
itself such a corporation is considered not organized
for profit under the General Corporation Law.' (Read
v. Tidewater Goal Exch. 116 A 898, 904, cited in Vol.
34, Words & Phrases, p. 220, defining 'profits';
underscoring provided.)
"The petitioner herein, Manila Elks Club, not being
engaged in the business of selling at retail liquor and
tobacco, cannot therefore be held liable for the privilege
taxes required by section 193, subsections (1), (k) and
(n). The weight of American authorities enhances the
strength of our findings that a fraternal, civic, non-stock,
nonprofit organization, like the Elks Club, selling at retail
liquor and tobacco only to its members and their guests
in pursuance with its general purpose as a
fraternal social dub with just enough margin
to cover operational expenses, should not be held
liable for the fixed taxes incident to the business of
selling at retail, liquor and tobacco.
'A bonafide social club, which disposes of liquors at its
clubhouse to members and their guests at
a fixed charge as incident to the general purposes of
the organizational is not required to take out a license by
Rev. Laws No. 3777-3785, approved March 15, 1905,
which provides for a license upon the business of
disposing intoxicating liquors; the term business in such
statute meaning business in the trade or commercial
sense. (State v. University Club, 130 p. 468, 470; 35
Nev. 475; 44 L.R.A., N. S. 1026).
A social club, not organized for the purpose of evading
the liquor laws, but which furnishes its members with
liquors and refreshments without profit to itself, is
not a retail liquor dealer, within the statute imposing a
license tax on all persons dealing in, selling or disposing
of intoxicating liquors by retail.' (Barden v. Montan Club,
25 P. 1042, 10 Mont. 330, II L.R.A. 693).
'Acts 1881, C. 149, authorizing taxation of
liquors dealers, does not include a
social club maintaining a library, giving musical
entertainments, and furnishing meals for its
members, which keeps a small stock of liquor; the
members paying for its drink as it is taken, but no profit
being made on such sales.' (Tennessee Club of
Memphis v. Dwyer, 79 Tenn. (11 Lea) 452, 461, 47 Am.
Rep. 298.) 'A social club
composed of members who have no proprietary
interest in the assets which provides a reading room,
restaurant, bar room, library, billiard rooms and
sitting rooms for its members, the expenses of
which are defrayed by annual dues from each member,
and by payments made by the members for food and
drinks, is not engaged in the business of a retail liquor
dealer, within section 11 of the Louisiana License Tax
Laws.' (La Ann. 585, 20 L.R.A. 185).
Respondent, however, insists that the petitioner should
pay the privilege tax on the sale at retail of liquor and
tobacco because this has been allegedly the practice
consistently followed by the Bureau of Internal
Revenue since 1921, and because section 1464 of the
Revised Administrative Code under which said ruling
was then based had been reenacted by the
legislature as section 193 of the National Internal
Revenue Code. Thus, respondent contends, that the
policy of the Bureau of Internal Revenue has
therefore gained 'approval by legislative reenactments.'
"The alleged administrative practice is founded upon
the following ruling rendered in 1921.
'Clubs selling exclusively to members thereof liquors
and other products on which the specific tax is imposed
should pay the privilege tax corresponding to the
business engaged in. The fact that such products are
sold at cost to the members of the club does not affect
the club's liability to tax.' (Ruling, Oct. 13,1921, B.I.R.
105.02; Exh. 3, pp. 66-69. BIR records.)
"We do not agree with the contention of
the respondent. While there is admittedly a ruling on
this point in 1921, there is no showing that such has
been a long-continued practice. Be that as it may, any
such administrative construction must be within the
ambit of, and must be consistent with, the Revised
Administrative Code and the Tax Code. It is likewise
the rule that where the statute is unambiguous, an
administrative construction is unwarranted (U. S. vs.
Missouri P. R. Co. 278 U. S. 269, 73 L. Ed. 322) and no
construction may be made to restrict or enlarge
the meaning of an Act. (Blatt vs. U. S., 305 U. S.
267, 83 L. Ed. 167).
"An examination of section 1464
of the Revised Administrative Code taken in
connection with section 1453 of the same, discloses the
fact that aside from the change in rates of taxes to be
paid and the arrangement of the classification of
businesses enumerated therein, section 193 of the
present Tax Code is a verbatim copy of the
aforementioned provisions of the Revised Administrati
ve Code. The policy or principle followed by the said
code regarding privileges taxes, i.e. that the privilege
taxes are payable only by those persons or entities
engaged in the business enumerated in section 1464 of
the said Code, has not suffered any change, and the
same still obtains under our present Tax Code. In the
absence of a showing that the legislative body
had been apprised of the aforesaid ruling, what has
gained legislative approval thru reenactment is, we
believe, the policy behind the above-mentioned provision
of the Revised Administrative Code of taxing persons
engaged in business and not the alleged practice
following the administrative ruling of 1921. We believe
that no amount of trenchant adherence
to an established practice may justify its continued
application where it is clear and manifest that the same
is not in consonance with the policy of the legislature as
defined by law."
It is urged by appellant that emphasis should be placed
not on the term "business", but on the phrases "retail
liquor dealers", "retail dealers in fermented liquors" and
"retail tobacco dealers", appearing in section 193
of the National Internal Revenue Code, which are
defined in section 194 thereof as follows:
"Sec. 194. Words and phrase defined. In applying the
provisions of the preceding section, words and
phrases shall be taken in the sense and extension precedents, insofar as the issue herein is
indicated below concerned. Indeed, the police power is, in general
broader and subject to less restrictions than the power to
"(i) 'Retail liquor dealer' includes every person, except tax. It is not difficult to conceive the advisability, if not,
a retail vino dealer, who for himself or on commission necessity, of requiring a license for some activities
sells or offers for sale wine or distilled spirits (other than under- taken by so-called "clubs", owing to the
denatured alcohol) in quantities of five liters or less at possibility, if not probability, of use of said name,
any one time and not for resale. appellation or denomination, in order to avoid or evade
some laws or to camouflage certain ventures, pursuits
"(k) 'Retail dealer in fermented liquors' includes every or enterprises which otherwise would clearly be
person, except retail dealers in tuba, basi, and tapuy, illegal, immoral or contrary to public policy. Upon the
who for himself or on commission sells or offers for sale other hand, a tax is a burden and, as such, it will not be
fermented liquors and quantities of five liters or less at deemed imposed upon fraternal, civic, non-profit, non-
any one time and not for resale. stock organizations, unless the intent to the contrary is
manifest and patent.
"(o) 'Tobacco dealer' comprehends every person who
for himself or on commission sells or offers for sale Wherefore, the appealed decision of the Court of Tax
cigars, cigarettes, or manufactured tobacco." Appeals is hereby affirmed, without special
Undoubtedly, these definitions must be given all the pronouncement as to costs. It is so ordered.
weight due thereto, in the interpretation of section 193 of
the Tax Code. As used therein, the phrases above
referred to are, however, part and parcel of the
provisions contained, not only in said section 193, but,
also, in section 178 and other parts of the 'Tax Code, all
of which must be given effect in their entirety as a
harmonious, coordinated and integrated unit, not as a
mass of heterogeneous and unrelated if
not incongruous terms, clauses and sentences. In
other words, the phrases in question should be
construed in the light of the context of the whole Tax
Code, of which they are integral parts. And when this is
done when we consider that section 193 requires "retail
liquor dealers", "retail dealers in fermented liquors" and
"retail tobacco Collector of Internal Revenue vs. Manila
Lodge No. 761 of the Benevolent & Protective Order of
Elks and the CTA dealers" to pay the taxes on business"
therein specified; that said section 193 is entitled
"Amount of tax on business"; that said section 193
merely implements the general provision in section 178,
to the effect that "a privilege tax must be paid before any
business or occupation hereinafter specified can be
lawfully begun and pursued"; that the term "business" is
used in said section 178 six (6) times; and that the
aforementioned sections 178% 193 and 194 are part of
Title V of the Tax Code, entitled "Privilege taxes on
business and occupation" it becomes crystal clear that
the "retail liquor dealers", "retail dealers in fermented
liquors" and "retail tobacco dealers" alluded to in said
section 193 are those engaged in "business", not
fraternal, civic, non-stock, non-profit organizations, like
herein respondent, which sells wines, distilled spirits,
fermented liquors and tobacco, exclusively to its
members and their guests, at such prices as are
merely sufficient to cover operational expenses.

Petitioner assails the applicability of the decisions relied

upon by the Court of Tax Appeals, upon the ground that
said decisions refer to the authority to license, and,
hence, to the exercise of the police power, not that
of taxation which is involved in the case at
bar. However, the distinction made enhances instead of
detracting from the weight of said decisions as
 15. Salaysay v Castro

FACTS: ISSUE:
The petitioner files a petition to the Supreme Whether or not elected municipal official was considered
Court for prohibition with preliminary injunction. resigned when he filed his certificate of candidacy for an
Nicanor G. Salaysay was the duly elected Vice office other than the one he was elected or actually
holding?
Mayor of San Juan del Monte, Rizal. In Sept.
1955 the elected Mayor of the said town, namely DECISION:
Engracio E. Santos, was suspended from his The petition for prohibition was denied, with cost. The
office due to administrative charges filed against writ of preliminary injunction heretofore issued was
such mayor. The Vice Mayor filled the vacancy hereby dissolved.
by order of succession. As stated under section Reason for the decision:
To ascertain the purpose and intention of the law, it must
2195 of the Revised Administrative Code:
be construed in the light of the reason for the
amendment in order to give breathe the purpose,
that in case of temporary disability of the Mayor such
meaning, and intention of the statute as intended by the
as absence, et., his duties shall be discharged by the
legislature. Not to defeat its purpose and intention but to
Vice Mayor..
enforce and to effectuate it. Thus, going back to its
In Sept. 8, 1955, while acting as Mayor,
history and background of the statute, when it was
Salaysay filed his certificate of candidacy for the enacted into law by the legislator. The intention of the
same office of Mayor. Interpreting said action of amendment by the President Roxas was to give and
Salaysay in running for the office of Mayor as an extend privilege to the appointees and elected official for
automatic resignation from his office of Vice continuity in their office. This was not applicable for the
Mayor, consequently, forfeiting the office he was official who assumed the office by succession because
of incapacitated of his predecessor.
holding as acting Mayor. He was advised to
resign, by the Provincial Governor, to turn over
the office of Mayor to Braulio Sto. Domingo,
being designated by the Office of the President
of the Philippines on Sept. 12, 1955, as Vice
Mayor. If not he will be prosecuted for violation
of Article 237 of the revised penal code for
prolonging performance of duties. Salaysay
refused to turn over the office of Mayor and
brought this action of prohibition with preliminary
injunction against Executive Secretary Castro,
Governor Pascual and Sto. Domingo to declare
invalid. For Salayasay contended that he was
actually holding the office of Mayor in his
capacity as acting Mayor.
The argument and contention on both parties
was in the provision of section 2, Commonwealth
Act No. 666 provides:

Any elective provincial, municipal or city official running

for an office than the one for which he has been lastly
elected, shall be considered resigned from his office form
the moment of the filing of his certificate of candidacy.
And the amendment found in section 27
of the Revised Election Code.
sec. 27. Candidate holding office- Any elective
provincial, municipal or city official, running for an office,
other than the one which he is actually holding, shall be
considered resigned from his office form the moment of
filing of his certificate of candidacy.