Romualdez-Marcos vs Comelec Digest
Facts:
Imelda Romualdez-Marcos filed her Certificate of Candidacy (COC) for the position of
Representative of the First District of Leyte, stating that she is 7-months resident in the said
district. Montejo, incumbent Representative and a candidate for the same position, filed a
Petition for Cancellation and Disqualification, alleging that Imelda did not meet the
constitutional one-year residency requirement. Imelda thus amended her COC, changing
“seven” months to “since childhood.” The provincial election supervisor refused to admit the
amended COC for the reason that it was filed out of time. Imelda, thus, filed her amended COC
with Comelec's head office in Manila.
On April 24, 1995, the Comelec Second Division declared Imelda not qualified to run and struck
off the amended as well as original COCs. The Comelec in division found that when Imelda
chose to stay in Ilocos and later on in Manila, coupled with her intention to stay there
by registering as a voter there and expressly declaring that she is a resident of that place, she
is deemed to have abandoned Tacloban City, where she spent her childhood and school days,
as her place of domicile. The Comelec en banc affirmed this ruling.
During the pendency of the disqualification case, Imelda won in the election. But
the Comelec suspended her proclamation. Imelda thus appealed to the Supreme Court.
Imelda invoked Section 78 of B.P. 881 which provides that a petition seeking to deny due
course or to cancel a certificate of candidacy must be decided, after due notice and hearing, not
later than 15 days before the election. Since the Comelec rendered the resolution on on April
24, 1995, fourteen (14) days before the election, Comelec already lose jurisdiction over her
case. She contended that it is the House of Representatives Electoral Tribunal and not
the Comelec which has jurisdiction over the election of members of the House of
Representatives.
Issues:
Was Imelda a resident, for election purposes, of the First District of Leyte for a period of one
year at the time of the May 9, 1995 elections.
Does the Comelec lose jurisdiction to hear and decide a pending disqualification case after the
elections?
Does the House of Representatives Electoral Tribunal assumed exclusive jurisdiction over the
question of Imelda's qualifications after the May 8, 1995 elections?
Held:
1. Imelda was a resident of the First District of Leyte for election purposes, and therefore
possessed the necessary residence qualifications to run in Leyte as a candidate for a seat in the
House of Representatives for the following reasons:
a. Minor follows the domicile of his parents. As domicile, once acquired is retained until a new
one is gained, it follows that in spite of the fact of petitioner's being born in Manila, Tacloban,
Leyte was her domicile of origin by operation of law. This domicile was established when her
father brought his family back to Leyte.
b. Domicile of origin is not easily lost. To successfully effect a change of domicile, one must
demonstrate:
1. An actual removal or an actual change of domicile;
2. A bona fide intention of abandoning the former place of residence and establishing a new
one; and
3. Acts which correspond with the purpose.
In the absence of clear and positive proof based on these criteria, the residence of origin should
be deemed to continue. Only with evidence showing concurrence of all three requirements can
the presumption of continuity or residence be rebutted, for a change of residence requires an
actual and deliberate abandonment, and one cannot have two legal residences at the same
time. Petitioner held various residences for different purposes during the last four decades.
None of these purposes unequivocally point to an intention to abandon her domicile of origin in
Tacloban, Leyte.
c. It cannot be correctly argued that petitioner lost her domicile of origin by operation of law as
a result of her marriage to the late President Ferdinand E. Marcos in 1952. A wife does not
automatically gain the husband’s domicile. What petitioner gained upon marriage was actual
residence. She did not lose her domicile of origin. The term residence may mean one thing in
civil law (or under the Civil Code) and quite another thing in political law. What stands clear is
that insofar as the Civil Code is concerned-affecting the rights and obligations of husband and
wife — the term residence should only be interpreted to mean "actual residence." The
inescapable conclusion derived from this unambiguous civil law delineation therefore, is that
when petitioner married the former President in 1954, she kept her domicile of origin and
merely gained a new home, not a domicilium necessarium.
d. Even assuming for the sake of argument that petitioner gained a new "domicile" after her
marriage and only acquired a right to choose a new one after her husband died, petitioner's
acts following her return to the country clearly indicate that she not only impliedly but expressly
chose her domicile of origin (assuming this was lost by operation of law) as her domicile. This
"choice" was unequivocally expressed in her letters to the Chairman of the PCGG when
petitioner sought the PCGG's permission to "rehabilitate (our) ancestral house in Tacloban and
Farm in Olot, Leyte ... to make them livable for the Marcos family to have a home in our
homeland." Furthermore, petitioner obtained her residence certificate in 1992 in Tacloban,
Leyte, while living in her brother's house, an act which supports the domiciliary intention clearly
manifested in her letters to the PCGG Chairman.
2. With the enactment of Sections 6 and 7 of R.A. 6646 in relation to Section 78 of B.P. 881, it
is evident that the Comelec does not lose jurisdiction to hear and decide a pending
disqualification case under Section 78 of B.P. 881 even after the elections.
Section 6. Effect of Disqualification Case. - Any candidate who has been declared by final
judgment to be disqualified shall not be voted for, and the votes cast for him shall not be
counted. If for any reason a candidate is not declared by final judgment before an election to
be disqualified and he is voted for and receives the winning number of votes in such election,
the Court or Commission shall continue with the trial and hearing of the action, inquiry, or
protest and, upon motion of the complainant or any intervenor, may during the pendency
thereof order the suspension of the proclamation of such candidate whenever the evidence of
his guilt is strong.
Moreover, it is a settled doctrine that a statute requiring rendition of judgment within a
specified time is generally construed to be merely directory, "so that non-compliance with them
does not invalidate the judgment on the theory that if the statute had intended such result it
would have clearly indicated it.
3. HRET's jurisdiction as the sole judge of all contests relating to the elections, returns and
qualifications of members of Congress begins only after a candidate has become a member of
the House of Representatives. Imelda, not being a member of the House of Representatives, it
is obvious that the HRET at this point has no jurisdiction over the question.(Romualdez-Marcos
vs Comelec, G.R. No. 119976, September 18, 1995)
PANTRANCO vs. Public Service Commission (PSC) G.R. No. 47065 June 26, 1940
Delegation of Powers, Separation of Powers, Certificate of Public Convenience
FACTS:
PANTRANCO, a holder of an existing Certificate of Public Convenience is applying to operate
additional buses with the Public Service Commission (PSC) has been engaged in transporting
passengers in certain provinces by means of public transportation utility. Patranc applied for
authorization to operate 10 additional trucks. The PSC granted the application but added
several conditions for PANTRANCO’s compliance. One is that the service can be acquired by
government upon payment of the cost price less depreciation, and that the certificate shall be
valid only for a definite period of time.
ISSUE:
Whether or not PSC can impose said conditions. If so, wouldn’t this power of the PSC constitute
undue delegation of powers?
RULING:
The Supreme Court held that there was valid delegation of powers.
The theory of the separation of powers is designed by its originators to secure action at the
same time forestall overaction which necessarily results from undue concentration of powers
and thereby obtain efficiency and prevent deposition. But due to the growing complexity of
modern life, the multiplication of subjects of governmental regulation and the increased
difficulty of administering laws, there is a constantly growing tendency toward the delegation of
greater powers by the legislature, giving rise to the adoption, within certain limits, of the
principle of “subordinate legislation.”
All that has been delegated to the Commission is the administrative function, involving the use
of discretion to carry out the will of the National Assembly having in view, in addition, the
promotion of public interests in a proper and suitable manner.
In Re: Rodolfo Manzano Case Digest
Facts:
Judge Manzano was appointed by Ilocos Sur Governor Rodolfo Farinas as the member of Ilocos
Norte provincial Committee on Justice created pursuant to Executive Order No. 856. Before
accepting the appointment, Judge Manzano wrote a letter to the SC requesting that he
be authorized to accept the appointment and to assume and discharge the powers and duties
attached to the said position. He petitioned that his membership in the Committee will not in
any way amount to an abandonment to his position as Executive Judge and as a member of
judiciary.
Issues:
Should the petition be granted?
Held:
No. An examination of Executive Order No. 856, as amended, reveals that Provincial/City
Committees on Justice are created to insure the speedy disposition of cases of detainees,
particularly those involving the poor and indigent ones, thus alleviating jail congestion and
improving local jail conditions. Among the functions of the Committee are—
3.3 Receive complaints against any apprehending officer, jail warden, final or judge who may
be found to have committedabuses in the discharge of his duties and refer the same to proper
authority for appropriate action;
3.5 Recommend revision of any law or regulation which is believed prejudicial to the proper
administration of criminal justice.
It is evident that such Provincial/City Committees on Justice perform administrative functions.
Administrative functions are those which involve the regulation and control over the conduct
and affairs of individuals for their own welfare and the promulgation of rules and regulations to
better carry out the policy of the legislature or such as are devolved upon the administrative
agency by the organic law of its existence.
Furthermore, under Executive Order No. 326 amending Executive Order No. 856, it is provided
that the Provincial/City Committees on Justice shall be under the supervision of the Secretary of
justice and quarterly accomplishment reports shall be submitted to the Office of the Secretary
of Justice.
Under the Constitution, the members of the Supreme Court and other courts established by law
shall not be designated to any agency performing quasi-judicial or
administrative functions (Section 12, Art. VIII, Constitution) (In Re: Rodolfo Manzano, A.M. No.
88-7-1861-RTC, October 5, 1988)
EASTERN SHIPPING LINES, INC., petitioner, vs. COURT OF APPEALS and DAVAO
PILOTSASSOCIATION, respondents. G.R. No. 116356 June 29, 1998
Facts:
On September 25, 1989, private respondent elevated a complaint against petitioner for sum
of money and attorney's fees alleging that private respondent had rendered pilotage services to
petitioner between with total unpaid fees of P703,290.18. Despite repeated demands, petitioner
failed to pay and prays that the latter be directed to pay P703,290.18 with legal rate of interest
from the filing of the complaint.
On November 18, 1989 petitioner disputed the claims of private respondent assailing theconstit
utionality of EO 1088 upon which it bases its claims; that the subject of the complaint falls
within the scope and authority of the Philippine Ports Authority by virtue of PD No. 857 ; that
Executive Order No. 1088 is an unwarranted repeal or modification of the Philippine Ports
Authority Charter, among others. Petitioner argues that EO 1088 is not constitutional, because
its interpretation and application are left to private respondent, a private person, and it
constitutes an undue delegation of power. Petitioner insists that it should pay pilotage fees in
accordance with and on the basis of the memorandum circulars issued by the PPA, the
administrative body vested under PD 857 with the power to regulate and prescribe pilotage
fees. It on paying pilotage fees prescribed under PPA circulars because EO 1088 sets a higher
rate.
Issues:
Whether Executive Order 1088 is unconstitutional. Whether there is undue delegation of
legislative power on private respondent.
Held:
Petition DENIED. Reiterating the pronouncement of the Court in Philippine Interisland Shipping
Association of the Philippines vs. Court of Appeals, the Court held that EO 1088 is valid. E.O.
NO. 1088 provides for adjusted pilotage service rates without withdrawing the power of the PPA
to impose, prescribe, increase or decrease rates, charges or fees. The reason is because E.O.
No. 1088 is not meant simply to fix new pilot age rates. Its
legislative purpose is the "rationalization of pilotage service charges, through theimposition of
uniform and adjusted rates for foreign and coastwise vessels in all Philippine ports.” Petitioner
cannot insist on paying pilotage fees based on the PPA circulars because the PPA circulars are
inconsistent with EO 1088, they are void and ineffective. "Administrative or executive acts,
orders and regulations shall be valid only when they are not contrary to the laws or the
Constitution." As stated by the Court in Land Bank of the Philippines vs. Court of Appeals, "the
conclusive effect of administrative construction is not absolute. Action of an administrative
agency may be disturbed or set aside by the judicial department if there is an error of law, a
grave abuse of power or lack of jurisdiction, or grave abuse of discretion clearly conflicting with
either the letter or spirit of the law." It is axiomatic that an administrative agency, like the PPA,
has no discretion whether to implement the law or not. Its duty is to enforce it. Therefore, if
there is any conflict between the PPA circular and a law, such as EO 1088, the latter prevails. In
conclusion, the Court made it clear that E.O. No. 1088 is a valid statute and that the PPA is duty
bound to comply with its provisions. The PPA may increase the rates but it may not decrease
them below those mandated by E.O. No. 1088.
Philam v Arnaldo G.R. No. 76452 July 26, 1994
J. Quiason
Facts:
One Ramon Paterno complained about the unfair practices committed by the company against
its agents, employees and consumers. The Commissioner called for a hearing where Paterno
was required to specify which acts were illegal. Paterno then specified that the fees and charges
stated in the Contract of Agency between Philam and its agents be declared void. Philam, on
the other hand, averred that there Paterno must submit a verified formal complaint and that his
letter didn’t contain information Philam was seeking from him. Philam then questioned the
Insurance Commission’s jurisdiction over the matter and submitted a motion to quash. The
commissioner denied this. Hence this petition.
Issue: Whether or not the resolution of the legality of the Contract of Agency falls within the
jurisdiction of the Insurance Commissioner.
Held: No. Petition granted.
Ratio:
According to the Insurance code, the Insurance Commissioner was authorized to suspend,
directors, officers, and agents of insurance companies. In general, he was tasked to regulate
the insurance business, which includes:
(2) The term "doing an insurance business" or "transacting an insurance business," within
the meaning of this Code, shall include
(a) making or proposing to make, as insurer, any insurance contract;
(b) making, or proposing to make, as surety, any contract of suretyship as a vocation and not
as merely incidental to any other legitimate business or activity of the surety; (c) doing any
kind of business, including a reinsurance business, specifically recognized as constituting the
doing of an insurance business within the meaning of this Code; (d) doing or proposing to do
any business in substance equivalent to any of the foregoing in a manner designed to evade the
provisions of this Code. (Insurance Code, Sec. 2[2])
The contract of agency between Philamlife and its agents wasn’t included with the
Commissoner’s power to regulate the business. Hence, the Insurance commissioner wasn’t
vested with jurisidiction under the rule “expresio unius est exclusion alterius”.
The respondent contended that the commissioner had the quasi-judicial power to adjudicate
under Section 416 of the Code. It stated:
The Commissioner shall have the power to adjudicate claims and complaints involving any loss,
damage or liability for which an insurer may be answerable under any kind of policy
or contract of insurance, or for which such insurer may be liable under a contract of suretyship,
or for which a reinsurer may be used under any contract or reinsurance it may have entered
into, or for which a mutual benefit association may be held liable under
the membership certificates it has issued to its members, where the amount of any such loss,
damage or liability, excluding interest, costs and attorney's fees, being claimed or sued
upon any kind of insurance, bond, reinsurance contract, or membership certificate does not
exceed in any single claim one hundred thousand pesos.
This was, however, regarding complaints filed by the insured against the Insurance company.
Also, the insurance code only discusses the licensing requirements for agents and brokers.
The Insurance Code does not have provisions governing the relations between insurance
companies and their agents.
Investment Planning Corporation of the Philippines v. Social Security Commission- “that an
insurance company may have two classes of agents who sell its insurance policies: (1) salaried
employees who keep definite hours and work under the control and supervision of the
company; and (2) registered representatives, who work on commission basis.”
The agents under the 2nd sentence are governed by the Civil Code laws on agency. This means
that the regular courts have jurisdiction over this category.
MARCOS VS MANGLAPUS
Posted by kaye lee on 1:16 PM
G.R. No. 88211 September 15 1989
FACTS:
Former President Marcos, after his and his family spent three year exile in Hawaii, USA, sought
to return to the Philippines. The call is about to request of Marcos family to order the
respondents to issue travel order to them and to enjoin the petition of the President's decision
to bar their return to the Philippines.
ISSUE:
Whether or not, in the exercise of the powers granted by the Constitution, the President may
prohibit the Marcoses from returning to the Philippines.
RULING:
Yes
According to Section 1, Article VII of the 1987 Constitution: "The executive power shall be
vested in the President of the Philippines." The phrase, however, does not define what is meant
by executive power although the same article tackles on exercises of certain powers by the
President such as appointing power during recess of the Congress (S.16), control of all the
executive departments, bureaus, and offices (Section 17), power to grant reprieves,
commutations, and pardons, and remit fines and forfeitures, after conviction by final
judgment (Section 19), treaty making power (Section 21), borrowing power (Section
20), budgetary power (Section 22), informing power (Section 23).
The Constitution may have grant powers to the President, it cannot be said to be limited only to
the specific powers enumerated in the Constitution. Whatever power inherent in the
government that is neither legislative nor judicial has to be executive.
Pelaez vs Auditor General
G.R. No. L-23825 December 24, 1965
Facts:
From September 4, 1964 to October 29, 1964 the President of the Philippines issued executive
orders to create thirty-three municipalities pursuant to Section 69 of the Revised Administrative
Code. Public funds thereby stood to be disbursed in the implementation of said executive
orders.
Issue: Whether the executive orders are null and void, upon the ground that the President does
not have the authority to create municipalities as this power has been vested in the legislative
department.
Held:
Section 10(1) of Article VII of the fundamental law ordains:
“The President shall have control of all the executive departments, bureaus or offices, exercise
general supervision over all local governments as may be provided by law, and take care that
the laws be faithfully executed.”
The power of control under this provision implies the right of the President to interfere in the
exercise of such discretion as may be vested by law in the officers of the executive
departments, bureaus, or offices of the national government, as well as to act in lieu of such
officers. This power is denied by the Constitution to the Executive, insofar as local governments
are concerned. Such control does not include the authority to either abolish an executive
department or bureau, or to create a new one. Section 68 of the Revised Administrative Code
does not merely fail to comply with the constitutional mandate above quoted, it also gives the
President more power than what was vested in him by the Constitution.
The Executive Orders in question are hereby declared null and void ab initio and the respondent
permanently restrained from passing in audit any expenditure of public funds in implementation
of said Executive Orders or any disbursement by the municipalities referred to.
TATAD VS DEPARTMENT OF ENERGY
G.R. No. 124360 and 127867. November 5, 1997
FRANCISCO S. TATAD, petitioner,
vs.
THE SECRETARY OF THE DEPARTMENT OF ENERGY AND THE SECRETARY OF THE
DEPARTMENT OF FINANCE, respondents.
Facts:
The petitioner question the constitutionality of RA No. 8180 “An Act Deregulating the
Downstream Oil Industry and For Other Purposes.” The deregulation process has two phases:
(a) the transition phase and the (b) full deregulation phase through EO No. 372.
The petitioner claims that Sec. 15 of RA No. 8180 constitutes an undue delegation of legislative
power to the President and the Sec. of Energy because it does not provide a determinate or
determinable standard to guide the Executive Branch in determining when to implement the full
deregulation of the downstream oil industry, and the law does not provide any specific standard
to determine when the prices of crude oil in the world market are considered to be declining nor
when the exchange rate of the peso to the US dollar is considered stable.
Issues:
Whether or not Sec 5(b) of R.A. 8180 violates the one title one subject requirement of the
Constitution.
Whether or not Sec 15 of R.A. 8180 violates the constitutional prohibition on undue delegation
of power.
Whether or not R.A. No. 8180 violates the constitutional prohibition against monopolies,
combinations in restraint of trade and unfair competition
Discussions:
The Court consistently ruled that the title need not mirror, fully index or catalogue all contents
and minute details of a law. A law having a single general subject indicated in the title may
contain any number of provisions, no matter how diverse they may be, so long as they are not
inconsistent with or foreign to the general subject, and may be considered in furtherance of
such subject by providing for the method and means of carrying out the general subject.
Adopting the ruling from Eastern Shipping Lines, Inc. vs. POEA, the Court states that:
“There are two accepted tests to determine whether or not there is a valid delegation of
legislative power, viz: the completeness test and the sufficient standard test. Under the first
test, the law must be complete in all its terms and conditions when it leaves the legislative such
that when it reaches the delegate the only thing he will have to do is to enforce it. Under the
sufficient standard test, there must be adequate guidelines or limitations in the law to map out
the boundaries of the delegate’s authority and prevent the delegation from running riot. Both
tests are intended to prevent a total transference of legislative authority to the delegate, who is
not allowed to step into the shoes of the legislature and exercise a power essentially legislative.
A monopoly is a privilege or peculiar advantage vested in one or more persons or companies,
consisting in the exclusive right or power to carry on a particular business or trade,
manufacture a particular article, or control the sale or the whole supply of a particular
commodity. It is a form of market structure in which one or only a few firms dominate the total
sales of a product or service. On the other hand, a combination in restraint of trade is an
agreement or understanding between two or more persons, in the form of a contract, trust,
pool, holding company, or other form of association, for the purpose of unduly restricting
competition, monopolizing trade and commerce in a certain commodity, controlling its
production, distribution and price, or otherwise interfering with freedom of trade without
statutory authority. Combination in restraint of trade refers to the means while monopoly refers
to the end.
Rulings:
The Court does not concur with this contention. The Court has adopted a liberal construction of
the one title – one subject rule. The Court hold that section 5(b) providing for tariff differential
is germane to the subject of R.A. No. 8180 which is the deregulation of the downstream oil
industry. The section is supposed to sway prospective investors to put up refineries in our
country and make them rely less on imported petroleum.[i][20] We shall, however, return to
the validity of this provision when we examine its blocking effect on new entrants to the oil
market.
Sec 15 of R.A. 8180 can hurdle both the completeness test and the sufficient standard test. It
will be noted that Congress expressly provided in R.A. No. 8180 that full deregulation will start
at the end of March 1997, regardless of the occurrence of any event. Full deregulation at the
end of March 1997 is mandatory and the Executive has no discretion to postpone it for any
purported reason. Thus, the law is complete on the question of the final date of full
deregulation. The discretion given to the President is to advance the date of full deregulation
before the end of March 1997. Section 15 lays down the standard to guide the judgment of the
President. He is to time it as far as practicable when the prices of crude oil and petroleum
products in the world market are declining and when the exchange rate of the peso in relation
to the US dollar is stable.
Section 19 of Article XII of the Constitution allegedly violated by the aforestated provisions of
R.A. No. 8180 mandates: “The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair competition shall be
allowed.”
CASE DIGEST : Lupangco VS CA
G.R. No. 77372 April 29, 1988 LUPO L. LUPANGCO, RAYMOND S. MANGKAL,
NORMAN A. MESINA, ALEXANDER R. REGUYAL, JOCELYN P. CATAPANG, ENRICO V.
REGALADO, JEROME O. ARCEGA, ERNESTOC. BLAS, JR., ELPEDIO M. ALMAZAN, KARL
CAESAR R. RIMANDO, petitioner, vs. COURT OF APPEALS and PROFESSIONAL
REGULATION COMMISSION, respondent.
Facts On or about October 6, 1986, herein respondent Professional Regulation Commission
(PRC) issued Resolution No. 105 as parts of its "Additional Instructions to Examiness," to all
those applying for admission to take the licensure examinations in accountancy
No examinee shall attend any review class, briefing, conference or the like conducted by, or
shall receive any hand-out, review material, or any tip from any school, college or university, or
any review center or the like or any reviewer, lecturer, instructor official or employee of any of
the aforementioned or similars institutions during the three days immediately proceeding every
examination day including examination day.
Any examinee violating this instruction shall be subject to the sanctions prescribed by Sec. 8,
Art. III of the Rules and Regulations of the Commission
On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure
examinations in accountancy schedule on October 25 and November 2 of the same year, filed
on their own behalf of all others similarly situated like them, with the Regional Trial Court of
Manila a complaint for injuction with a prayer with the issuance of a writ of a preliminary
injunction against respondent PRC to restrain the latter from enforcing the above-mentioned
resolution and to declare the same unconstitution.
Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the lower
court had no jurisdiction to review and to enjoin the enforcement of its resolution
In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try the case
and enjoined the respondent commission from enforcing and giving effect to Resolution No. 105
which it found to be unconstitutional
Not satisfied therewith, respondent PRC, on November 10, 1986, filed with the Court of Appeals
Issue: Whether or not Resolution No. 105 is constitutional.
Held: It is not Constitutional.
the questioned resolution was adopted for a commendable purpose which is "to preserve the
integrity and purity of the licensure examinations." However, its good aim cannot be a cloak to
conceal its constitutional infirmities
The unreasonableness is more obvious in that one who is caught committing the prohibited acts
even without any ill motives will be barred from taking future examinations conducted by the
respondent PRC
Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees'
right to liberty guaranteed by the Constitution. Respondent PRC has no authority to dictate on
the reviewees as to how they should prepare themselves for the licensure examinations. They
cannot be restrained from taking all the lawful steps needed to assure the fulfillment of their
ambition to become public accountants. They have every right to make use of their faculties in
attaining success in their endeavors. They should be allowed to enjoy their freedom to acquire
useful knowledge that will promote their personal growth
ABS-CBN vs. CTA G.R. No. L-52307
Retroactive Effect of Tax Statues
Republic of the Philippines
Supreme Court Ruling
G.R. No. L-52307 October 12, 1981
ABS-CBN Broadcasting Corporation, Petitioner
vs.
Court of Tax Appeals and the Commissioner of Internal revenue, Respondent
FACTS:
The ABS-CBN Broadcasting Corporation (herein shall be called the “Company”) was engaged in
the business of telecasting local as well as foreign films acquired from foreign corporations not
engaged in trade or business with the Philippines. Under Section 24 (b) of the National Revenue
Code, a withholding tax of 30% (RA 2343). It was implemented through Circular No. V-334.
Pursuant to the foregoing, ABS-CBN dutifully withheld and turned over to the BIR the amount of
30% of one-half of the film rentals paid by it to foreign corporations not engaged in trade or
business within the Philippines. The last year that ABS-CBN withheld taxes pursuant to the
foregoing Circular was in 1968.
RA 5431 amended Section 24 (b) of the Tax Code increasing the tax rate from 30 % to 35 %
and revising the tax basis from “such amount” referring to rents, etc. to “gross income.” The
following was implemented by Circular No. 4-71.
Petitioner requested for a reconsideration and withdrawal of the assessment.
ISSUE/S:
Whether or not respondent can apply General Circular No. 4-71 retroactively and issue a
deficiency assessment against petitioner.
HELD/DECISION:
Any rulings or circulars promulgated by the CIR have no retroactive application when it would
be prejudicial to taxpayers. The retroactive application of Memorandum Circular No. 4-71
prejudices ABS-CBN since:
1. The assessment and demand on petitioner to pay deficiency withholding income tax was also
made three years after 1968 for a period of time commencing in 1965.
2. ABS-CBN was no longer in a position to withhold taxes due from foreign corporations
because it had already remitted all film rentals and no longer had any control over them when
the new Circular was issued.
