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Transcript of Administative law Cases
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G.R. No. L-17778 November 30, 1962
IN RE CONTEMPT PROCEEDINGS AGAINST ARMANDO RAMOS, JESUS L. CARMELO,
in his capacity as Chairman of the Probe Committee, Office of the Mayor of
Manila,petitioner-appellant,
vs.
ARMANDO RAMOS, respondent-appellee.
On February 3, 1960, the Mayor of Manila issued an executive order creating a
committee "to investigate the anomalies involving the license inspectors and other
personnel of the License Inspection Division of the Office of the City Treasurer and of
the License and Permits Division of this Office (of the Mayor)." He named Mr. Jesus L.
Carmelo as chairman of said committee.
It appears that the committee issued subpoenas to Armando Ramos, a private citizen
working as a bookkeeper in the Casa de Alba, requiring him to appear before it on
June 3, 8, 9, 15 and 16 and August 4 and 11, 1960, in connection with an
administrative case against Crisanta Estanislao but that Ramos, on whom the
subpoenas were duly served, refused to appear.
Claiming that Ramos' refusal tended "to impede, obstruct, or degrade the
administrative proceedings," petitioner filed in the Court of First Instance of Manila a
petition to declare Armando Ramos in contempt. After hearing, during which
petitioner was required to show aprima faciecase, the trial court dismissed the
petition. The lower court held that there is no law empowering committees created
by municipal mayors to issue subpoenas and demand that witnesses testify under
oath. It also held that to compel Ramos to testify would be to violate his right against
self-incrimination.
It appears that in a statement given to investigators of the Office of the Mayor,Ramos admitted having misappropriated on several occasions, sums of money given
to him by the owner of Casa de Alba for the payment of the latter's taxes for 1956-
1959 and that this fact had not been discovered earlier because Ramos used to
entertain employees in the City Treasurer's office at Casa de Alba where Ramos was
a bookkeeper as stated above. The trial court held that to compel Ramos to confirm
this statement in the administrative case against certain employees in the Office of
the City Treasurer would be to compel him to give testimony that could be used
against him in a criminal case for estafa of which the owner of Casa de Alba was the
offended party. From that decision, petitioner appealed to this Court.
The main issue in this ease is the power, if any, of committee, like the committee of
which petitioner is the chairman, to subpoena witnesses to appear before it and to
ask for their punishment in case of refusal.
The rule is that Rule 64 (Contempt)1of the Rules of Court applies only to inferior and
superior courts and does not comprehend contempt committed against
administrative officials or bodies like the one in this case, unless said contempt is
clearly considered and expressly defined as contempt of court, as is done inparagraph 2 of Section 580 of the Revised Administrative Code. (People v. Mendoza;
People v. Dizon, 49 O. G. No. 2, 541.)
Petitioner invokes Section 580 of the Revised Administrative Code which provides as
follows:
Powers incidental to taking of testimony. When authority to take
testimony or evidence is conferred upon an administrative officer or upon
any nonjudicial person, committee, or other body, such authority shall be
understood to comprehend the right to administer oaths and summons
witnesses and shall include authority to require the production ofdocuments under a subpoena duces tecumor otherwise, subject in all
respects to the same restrictions and qualifications as apply in judicial
proceedings of a similar character.
Saving the provisions of section one hundred and two of this Act, any one
who, without lawful excuse, fails to appear upon summons issued under the
authority of the preceding paragraph or who, appearing before any
individual or body exercising the power therein defined, ref uses to make
oath, give testimony, or produce documents for inspection, when thereunto
lawfully required, shall be subject to discipline as in case of contempt of
court and upon application of the individual or body exercising the power inquestion shall be dealt with by the judge of first instance having jurisdiction
of the case in the manner provided by law.
One who invokes this provision of the law must first show that he has "authority to
take testimony or evidence" before he can apply to the courts for the punishment of
hostile witnesses. (Francia v. Pecson, et al., 87 Phil. 100.)
Now, what authority to take testimony does petitioner's committee have from which
the power to cite witnesses may be implied, pursuant to section 580?
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To be sure, there is nothing said in the executive order of the Mayor creating the
committee about such a grant of power. All that the order gives to this body is the
power to investigate anomalies involving certain city employees.
Petitioner contends that the Mayor of Manila has the implied power to investigate
city officials and employees appointed by him to the end that the power expressly
vested in him to suspend and remove such officials of employees (Sec. 22, Republic
Act No. 409) may be justly and fairly exercised. We agree with this proposition andWe held so in the case of Pagkanlungan v. De la Fuente, 48 O.G. No. 10, p. 4332. But
We do not agree with the petitioner that a delegation of such power to investigation
implies also a delegation of the power to take testimony or evidence of witnesses
whose appearance may be require by the compulsory process of subpoena. Thus, in
denying this power to an investigating body in the Office of the Mayor of Manila, We
said in Francia v. Pecson, et al., supra : "Were do not think the mayor (of Manila) can
delegate or confer the powers to administer oaths, to take testimony, and to issue
subpoenas."
Furthermore, it is doubtful whether the provisions of section 580 of the
Administrative Code are applicable to the City of Manila as these pertain to nationalbureaus or offices of the government.
Citing 50 Am. Jur. 449, petitioner contends that "the power of the investigation
committee to issue compulsory process to secure the attendance of witnesses
undoubtedly exists since only complimentary to the power of the mayor to
investigate, suspend and remove city officers and employees, supra, is the
recognized rule that where the statute grants a right, it also confers by implication
every particular power necessary for the exercise thereof." There is no merit in the
argument. In the first place, the authority cited speaks of statutory, grant of power
to a body. Here, We have seen that whatever power may be claimed by petitioner's
committee may only be traced to the power of the Mayor to investigate as implied
from his power to suspend or remove certain city employees. There is no statutory
grant of power to investigate to petitioner's committee.
In the second place, even granting that the Mayor has the implied power to require
the appearance of witnesses before him, the rule, as noted earlier, is that the Mayor
can not delegate this power to a body like the committee of the petitioner. (Francia
v. Pecson, et al., supra.)
Lastly, 50 Am. Jur. Sec. 428, p. 450 itself admits an exception to the rule invoked by
the petitioner. Thus, it is stated that "where the liberty and property of persons are
sought to be brought within the operation of a power claimed to be impliedly
granted by an act because necessary to its due execution, the case must be clearly
seen to be within those intended to be reached." Here, no less than the liberty of
Armando Ramos is involved in the claim of the committee to the right to cite
witnesses.
We hold, therefore, that petitioner's committee has no power to cite witnesses to
appear before it and to ask for their punishment in case of refusal. This conclusion
makes it unnecessary for Us to pass upon the other error assigned by petitioner as
having been allegedly committed by the trial court.
WHEREFORE, the decision of the Court of First Instance of Manila is hereby affirmed,
without pronouncement as to costs.
Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon
and Makalintal, JJ.,concur.
Bengzon, C.J.,took no part.
G.R. No. L-29274 November 27, 1975
EVANGELISTA VS JARENCIO
This is an original action for certiorariand prohibition with preliminary injunction,
under Rule 65 of the Rules of Court, seeking to annul and set aside the order of
respondent Judge, the Honorable Hilarion J. Jarencio, Presiding Judge of the Court of
First Instance of Manila, dated July 1, 1968, in Civil Case No. 73305, entitled
"Fernando Manalastas vs. Sec. Ramon D. Bagatsing, etc.", which reads as follows:
IT IS ORDERED that, upon the filing of a bond in the amount of P5,000.00, let the writ of
preliminary injunction prayed for by the petitioner [private respondent] be issued restraining
the respondents [petitioners], their agents, representatives, attorneys and/or other persons
acting in their behalf from further issuing subpoenas in connection with thefact-
findinginvestigations to the petitioner [private respondent] and from instituting contempt
proceedings against the petitioner [private respondent] under Section 580 of the Revised
Administrative Code. (Stress supplied).
Pursuant to his special powers and duties under Section 64 of the Revised
Administrative Code,1
the President of the Philippines created the Presidential
Agency on Reforms and Government Operations (PARGO) under Executive Order No.
4 of January 7, 1966.2
Purposedly, he charged the Agency with the following
functions and responsibilities:3
b. To investigate all activities involving or affecting immoral practices, graft and
corruptions, smuggling (physical or technical), lawlessness, subversion, and all other
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activities which are prejudicial to the government and the public interests, and to
submit proper recommendations to the President of the Philippines.
c. To investigate cases of graft and corruption and violations of Republic Acts Nos.
1379 and 3019, and gather necessary evidence to establish prima facie, acts of graft
and acquisition of unlawfully amassed wealth ... .
h. To receive and evaluate, and to conduct fact-finding investigations of sworncomplaints against the acts, conduct or behavior of any public official or employee
and to file and prosecute the proper charges with the appropriate agency.
For a realistic performance of these functions, the President vested in the Agency all
the powers of an investigating committee under Sections 71 and 580 of the Revised
Administrative Code, including the power to summon witnesses by subpoena or
subpoena duces tecum, administer oaths, take testimony or evidence relevant to the
investigation.4
Whereupon, on June 7, 1968, petitioner Quirico Evangelista, as Undersecretary of
the Agency, issued to respondent Fernando Manalastas, then Acting City PublicService Officer of Manila, a subpoena ad testificandum commanding him "to be and
appear as witness at the Office of the PRESIDENTIAL AGENCY ON REFORMS AND
GOVERNMENT OPERATIONS ... then and there to declare and testify in a certain
investigation pending therein."
Instead of obeying the subpoena, respondent Fernando Manalastas filed on June 25,
1968 with the Court of First Instance of Manila an Amended Petition for
prohibition, certiorariand/or injunction with preliminary injunction and/or
restraining order docketed as Civil Case No. 73305 and assailed its legality.
On July 1, 1968, respondent Judge issued the aforementioned Order:
IT IS ORDERED that, upon the filing of a bond in the amount of P5,000.00, let the writ
of preliminary injunction prayed for by the petitioner [private respondent] be issued
restraining the respondents [petitioners], their agents, representatives, attorneys
and/or other persons acting in their behalf from further issuing subpoenas in
connection with thefact-findinginvestigations to the petitioner [private respondent]
and from instituting contempt proceedings against the petitioner [private
respondent] under Section 530 of the Revised Administrative Code. (Stress supplied).
Because of this, petitioners 5 elevated the matter direct to Us without a motion for
reconsideration first filed on the fundamental submission that the Order is a patent
nullity.6
As unfurled, the dominant issue in this case is whether the Agency, acting thru its
officials, enjoys the authority to issue subpoenas in its conduct of fact-finding
investigations.
It has been essayed that the life blood of the administrative process is the flow of
fact, the gathering, the organization and the analysis of evidence.7
Investigations are
useful for all administrative functions, not only for rule making, adjudication, and
licensing, but also for prosecuting, for supervising and directing, for determining
general policy, for recommending, legislation, and for purposes no more specific
than illuminating obscure areas to find out what if anything should be done.8
An
administrative agency may be authorized to make investigations, not only in
proceedings of a legislative or judicial nature, but also in proceedings whose sole
purpose is to obtain information upon which future action of a legislative or judicial
nature may be taken9and may require the attendance of witnesses in proceedings
of a purely investigatory nature. It may conduct general inquiries into evils calling forcorrection, and to report findings to appropriate bodies and make recommendations
for actions.10
We recognize that in the case before Us, petitioner Agency draws its subpoena
power from Executive Order No. 4, para. 5 which, in an effectuating mood,
empowered it to "summon witness, administer oaths, and take testimony relevant to
the investigation"11
with the authority "to require the production of documents
under a subpoena duces tecumor otherwise, subject in all respects to the same
restrictions and qualifications as apply in judicial proceedings of a similar
character."12
Such subpoena power operates in extensoto all the functions of the
Agency as laid out in the aforequoted sub-paragraphs (b),(e), and (h). It is not
bordered by nor is it merely exercisable, as respondents would have it, in quasi-
judicial or adjudicatory function under sub-paragraph (b). The functions enumerated
in all these sub-paragraphs (b), (e), and (h) interlink or intertwine with one another
with the principal aim of meeting the very purpose of the creation of the Agency,
which is to forestall and erode nefarious activities and anomalies in the civil service.
To hold that the subpoena power of the Agency is confined to mere quasi-judicial or
adjudicatory functions would therefore imperil or inactiviate the Agency in its
investigatory functions under
sub-paragraphs (e) and (h). More than that, the enabling authority itself (Executive
Order No. 4, para. 5) fixes no distinction when and in what function should the
subpoena power be exercised. Similarly, We see no reason to depart from the
established rule that forbids differentiation when the law itself makes none.
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Nor could We impress upon this subpoena power the alleged strictures of a
subpoena issued under the Rules of Court13
to abridge its application. The seeming
proviso in Section 580 of the Revised Administrative Code that the right to summon
witnesses and the authority to require the production of documents under a
subpoena duces tecumor otherwise shall be "subject in all respects to the same
restrictions and qualifications as apply in judicial proceedings of a similar character"
cannot be validly seized upon to require, in respondents' formulation, that, as in a
subpoena under the Rules, a specific case must be pending before a court for hearingor trial and that the hearing or trial must be in connection with the exercise of the
court's judicial or adjudicatory functions14
before a non-judicial subpoena can be
issued by an administrative agency like petitioner Agency. It must be emphasized,
however, that an administrative subpoena differs in essencefrom a judicial
subpoena. Clearly, what the Rules speaks of i s a judicial subpoena, one procurable
from and issuable by a competent court, and not an administrative subpoena. To an
extent, therefore, the "restrictions and qualifications" referred to in Section 580 of
the Revised Administrative Code could mean the restraints against infringement of
constitutional rights or when the subpoena is unreasonable or oppressive and when
the relevancy of the books, documents or things does not appear.15
Rightly, administrative agencies may enforce subpoenas issued in the course of
investigations, whether or not adjudication is involved, and whether or not probable
cause is shown16
and even before the issuance of a complaint.17
It is not necessary,
as in the case of a warrant, that a specific charge or complaint of violation of law be
pending or that the order be made pursuant to one. It is enough that the
investigation be for a lawfully authorized purpose.18
The purpose of the subpoena is
to discover evidence, not to prove a pending charge, but upon which to make one if
the discovered evidence so justifies.19
Its obligation cannot rest on a trial of the
value of testimony sought; it is enough that the proposed investigation be for a
lawfully authorized purpose, and that the proposed witness be claimed to have
information that might shed some helpful light.20
Because judicial power is reluctant
if not unable to summon evidence until it is shown to be relevant to issues onlitigations it does not follow that an administrative agency charged with seeing that
the laws are enforced may not have and exercise powers of original inquiry. The
administrative agency has the power of inquisition which is not dependent upon a
case or controversy in order to get evidence, but can investigate merely on suspicion
that the law is being violated or even just because it wants assurance that it is not.
When investigative and accusatory duties are delegated by statute to an
administrative body, it, too may take steps to inform itself as to whether there is
probable violation of the law.21
In sum, it may be stated that a subpoena meets the
requirements for enforcement if the inquiry is (1) within the authority of the agency;
(2) the demand is not too indefinite; and (3) the information is reasonably
relevant.
22
There is no doubt that the fact-finding investigations being conducted by the Agency
upon sworn statements implicating certain public officials of the City Government of
Manila in anomalous transactions23
fall within the Agency's sphere of authority and
that the information sought to be elicited from respondent Fernando Manalastas, of
which he is claimed to be in possession,24
is reasonably relevant to the
investigations.
We are mindful that the privilege against self-incrimination extends in administrativeinvestigations, generally, in scope similar to adversary proceedings.
25In Cabal v.
Kapunan, Jr.,26
the Court ruled that since the administrative charge of unexplained
wealth against the respondent therein may result in the forfeiture of the property
under the Anti-Graft and Corrupt Practices Act, a proceeding criminal or penal in
nature, the complainant cannot call the respondent to the witness stand without
encroaching upon his constitutional privilege against self -incrimination. Later,
in Pascual, Jr. v. Board of Medical Examiners ,27
the same approach was followed in
the administrative proceedings against a medical practitioner that could possibly
result in the loss of his privilege to practice the medical profession. Nevertheless, in
the present case, We find that respondent Fernando Manalastas is not facing any
administrative charge.28
He is merely cited as a witness in connection with the fact-
finding investigation of anomalies and irregularities in the City Government of Manila
with the object of submitting the assembled facts to the President of the Philippines
or to file the corresponding charges.29
Since the only purpose of investigation is to
discover facts as a basis of future action, any unnecessary extension of the privilege
would thus be unwise.30
Anyway, by all means, respondent Fernando Manalastas
may contest any attempt in the investigation that tends to disregard his privilege
against self-incrimination.
A question of constitutional dimension is raised by respondents on the inherent
power of the President of the Philippines to issue subpoena.31
More tersely stated,
respondents would now challenge, in a collateral way, the validity of the basic
authority, Executive Order No. 4, as amended in part by Executive Order No. 88.Unfortunately, for reasons of public policy, the constitutionality of executive orders,
which are commonly said to have the force and effect of statutes32
cannot be
collaterally impeached.33
Much more when the issue was not duly pleaded in the
court below as to be acceptable for adjudication now.34
The settled rule is that the
Court will not anticipate a question of constitutional law in advance of the necessity
of deciding it.35
Nothing then appears conclusive than that the disputed subpoena issued by
petitioner Quirico Evangelista to respondent Fernando Manalastas is well within the
legal competence of the Agency to issue.
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(f) Compensation All remuneration for employment include the cash
value of any remuneration paid in any medium other than cash except that
part of the remuneration in excess of P500.00 received during the month.
It will thus be seen that whereas prior to the amendment, bonuses, allowances, and
overtime pay given in addition to the regular or base pay were expressly excluded, or
exempted from the definition of the term "compensation", such exemption or
exclusion was deleted by the amendatory law. It thus became necessary for theSocial Security Commission to interpret the effect of such deletion or elimination.
Circular No. 22 was, therefore, issued to apprise those concerned of the
interpretation or understanding of the Commission, of the law as amended, which it
was its duty to enforce. It did not add any duty or detail that was not already in the
law as amended. It merely stated and circularized the opinion of the Commission as
to how the law should be construed. 1wph1.t
The case of People v. Jolliffe(G.R. No. L-9553, promulgated on May 30, 1959) cited
by appellant, does not support its contention that the circular in question is a rule or
regulation. What was there said was merely that a regulation may be incorporated in
the form of a circular. Such statement simply meant that the substance and not theform of a regulation is decisive in determining its nature. It does not lay down a
general proposition of law that any circular, regardless of its substance and even if it
is only interpretative, constitutes a rule or regulation which must be published in the
Official Gazette before it could take effect.
The case of People v. Que Po Lay(50 O.G. 2850) also cited by appellant is not
applicable to the present case, because the penalty that may be incurred by
employers and employees if they refuse to pay the corresponding premiums on
bonus, overtime pay, etc. which the employer pays to his employees, is not by
reason of non-compliance with Circular No. 22, but for violation of the specific legal
provisions contained in Section 27(c) and (f) of Republic Act No. 1161.
We find, therefore, that Circular No. 22 purports merely to advise employers-
members of the System of what, in the light of the amendment of the law, they
should include in determining the monthly compensation of their employees upon
which the social security contributions should be based, and that such circular did
not require presidential approval and publication in the Official Gazette for its
effectivity.
It hardly need be said that the Commission's interpretation of the amendment
embodied in its Circular No. 22, is correct. The express elimination among the
exemptions excluded in the old law, of all bonuses, allowances and overtime pay in
the determination of the "compensation" paid to employees makes it imperative
that such bonuses and overtime pay must now be included in the employee's
remuneration in pursuance of the amendatory law. It is true that in previous cases,
this Court has held that bonus is not demandable because it is not part of the wage,
salary, or compensation of the employee. But the question in the instant case is not
whether bonus is demandable or not as part of compensation, but whether, after
the employer does, in fact, give or pay bonus to his employees, such bonuses shall be
considered compensation under the Social Security Act after they have been
received by the employees. While it is true that terms or words are to be interpretedin accordance with their well-accepted meaning in law, nevertheless, when such
term or word is specifically defined in a particular law, such interpretation must be
adopted in enforcing that particular law, for it can not be gainsaid that a particular
phrase or term may have one meaning for one purpose and another meaning for
some other purpose. Such is the case that is now before us. Republic Act 1161
specifically defined what "compensation" should mean "For the purposes of this Act".
Republic Act 1792 amended such definition by deleting same exemptions authorized
in the original Act. By virtue of this express substantial change in the phraseology of
the law, whatever prior executive or judicial construction may have been given to
the phrase in question should give way to the clear mandate of the new law.
IN VIEW OF THE FOREGOING, the Resolution appealed from is hereby affirmed, with
costs against appellant. So ordered.
[G.R. No. L-28952. December 29, 1971.]
BENITO C. MANUEL v. GENERAL AUDITING OFFICE,
This Court is faced with a question raised for the first time in this petition for the
review of a ruling of an order of respondent General Auditing Office. It is whether or
not an elective official may be entitled in the event that he voluntarily retires or be
separated from the service without fault on his part to the commutation of his
vacation and sick leave. The answer of respondent was in the negative, relying
primarily on a civil service rule purportedly in accordance with the applicable
Administrative Code provision. In thus denying the claim of petitioner, there was a
neglect or disregard of the controlling section of such Code 1 as well as of the equally
controlling statutory language in another enactment, which specifically speaks of
both an elective or appointive official as being entitled, to such benefits under such
circumstances. 2 A reversal is thus indicated.
The facts are undisputed. Petitioner Benito C. Manuel applied for retirement,
effective December 31, 1967, according to law, 3 after having to his credit more than
twenty (20) years of service in the government, included in which were four
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successive terms as Mayor of Lingayen, Pangasinan from January 1, 1952 to
December 31, 1967. Such application was approved on December 5, 1967. He had
likewise sought the commutation of his vacation and sick leave, filing with the
Municipal Treasurer of Lingayen, Pangasinan on December 22, 1967 a
communication to that effect. In his memorandum filed with respondent General
Auditing Office to which the matter was referred, he stressed that he was entitled to
unused vacation and sick leave earned from May 31, 1957 (date of effectivity of
Republic Act No. 1616) to December 31, 1967, or a period of 10 years and 7 months,and since his highest salary was P600.00 a month, the total amount which should
accrue to him is P6,000.00 (one month for every year). Respondent Office in turn
asked for the view of the Commissioner of Civil Service in an indorsement dated
January 25, 1968. The reply, coming on February 22, 1968 was that such a claim for
the commutation of the money value of his leave from January 1, 1952 to December
31, 1967 could not be favorably considered. Such a conclusion was based on his
reading of Section 2187 of the Revised Administrative Code, 4 which for him implied
that such a leave must be enjoyed during the year in which earned and that it could
not be cumulative. There was likewise reliance on Section 9 of Civil Service Rule XVI
which speaks categorically to that effect. 5 Respondent General Auditing Office on
March 1, 1968 ruled that his application for commutation of his leave earned as
Mayor during the period from January 1, 1952 to December 31, 1967 could not thus
he allowed in audit. Hence this appeal to this Court.
The appeal is meritorious. As was clearly pointed out in the able brief of counsel for
petitioner, the Bengzon, Villegas & Zarraga Law Firm, the controlling statutory
provisions call for a reversal of the ruling of Respondent.
1. It is expressly provided under Section 286 of the Revised Administrative Code that
vacation and sick leave shall be cumulative, any part thereof not taken within the
calendar year earned being carried over the succeeding years with the employee
voluntarily retiring or being separated from the service without fault on his part,
being entitled to the commutation of all such accumulated vacation or sick leave tohis credit provided that it shall in no case exceed ten (10) months. 6 The statute 7
providing for voluntary retirement is even more explicit. Thus: "Retirement is
likewise allowed to any official or employee, appointive or elective, regardless of age
and employment status, who has rendered a total of at least twenty years of service,
the last three years of which are continuous." 8 Further: "Officials and employees
retired under this Act shall be entitled to the commutation of the unused vacation
and sick leave, based on the highest rate received, which they have to their credit at
the time of retirement." 9
There cannot be the least doubt therefore that the petitioner, was a municipal
mayor and as such an elective official for sixteen (16) years, having to his credit four
(4) successive terms as Mayor of Lingayen, Pangasinan, could not be denied his plea
for the commutation for a vacation and sick leave. The law speaks categorically
including him within its terms. It must, as insisted by counsel for petitioner, be
obeyed. Whatever rights are granted petitioner must be respected. There is here no
room for interpretation, simply the application of legal norms free from any
ambiguity. 10
2. Why then did respondent decide otherwise? It must have been due to amisreading of Section 2187 of the Revised Administrative Code. What must have
misled respondent was a failure to take due note that this section deals solely with a
situation when a municipal mayor is absent from his office because of illness. It does
not cover therefore the specific case here presented of the right of the elective
official to a commutation of his vacation and sick leave upon his retirement or
separation from the service through no fault of his own. Moreover it must have felt
justified in view of the endorsement of the Commissioner of the Civil Service, who
applied Section 9 of Civil Service Rule XVI, included in which is the express injunction
that the leave is not cumulative. Further reflection ought to have cautioned it that
certainly this rule is far from being applicable as on its face it is based on the
aforesaid Section 2187, which as noted is not in point.
If, however, to be considered as having pertinence and relevance, it cannot as an
administrative order supplant the plain and explicit statutory command. Why such
should be the case is explained in a recent decision, Teoxon v. Member of the Board
of Administrators. 11 Thus: "The recognition of the power of administrative officials
to promulgate rules in the implementation of the statute, necessarily limited to what
is provided for in the legislative enactment, may be found in the early case of United
States v. Barlias decided in 1908. Then came, in a 1914 decision, United States v.
Tupasi Molina, a delineation of the scope of such competence. Thus: Of course the
regulations adopted under legislative authority by a particular department must be
in harmony with the provisions of the law, and for the sole purpose of carrying into
effect its general provisions. By such regulations, of course, the law itself can not beextended. So long, however, as the regulations relate solely to carrying into effect
the provisions of the law, they are valid. In 1936, in People v. Santos, this Court
expressed its disapproval of an administrative order that would amount to an excess
of the regulatory power vested in an administrative official. We reaffirmed such a
doctrine in a 1951 decision, where we again made clear that where an administrative
order betrays inconsistency or repugnancy to the provisions of the Act, the mandate
of the Act must prevail and must be followed. Justice Barrera, speaking for the Court
in Victorias Milling Company, Inc. v. Social Security Commission, citing Parker as well
as Davis did tensely sum up the matter thus: A rule is binding, on the courts so long
as the procedure fixed for its promulgation is followed and its scope is within the
statutory granted by the legislature, even if the courts are not in agreement with the
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policy stated therein or its innate wisdom . . . On the other hand, administrative
interpretation of the law is at best merely advisory, for it is the courts that finally
determine what the law means." 12 The succeeding paragraph in such a decision is
likewise in point. Thus: "It cannot be otherwise as the Constitution limits the
authority of the President, in whom all executive power resides, to take care that the
laws be faithfully executed. No lessee administrative executive office or agency then
can, contrary to the express language of the Constitution, assert for itself a more
extensive prerogative. Necessarily, it is bound to observe the constitutionalmandate. There must be strict compliance with the legislative enactment. Its terms
must be followed. The statute requires adherence to, not departure from, its
provisions. No deviation is allowable. In the terms language of the present Chief
Justice, an administrative agency cannot amend an act of Congress.
3. Nothing can be clearer therefore than that the claim of petitioner to a
commutation of his vacation and sick leave not exceeding ten (10) months must be
upheld, inasmuch as the facts show that the total amount sought to be paid to him
was precisely in accordance with the controlling legal provisions. The ruling now on
review must be reversed and petitioners plea granted.
WHEREFORE, the ruling of March 1, 1968 of respondent office refusing to allow in
audit the claim of petitioner Benito C. Manuel for commutation of his leave earned
as Mayor for the period January 1, 1952 to December 31, 1967 is reversed and the
application of petitioner for such commutation granted. Without pronouncement as
to costs.
G.R. No. L-18740 April 28, 1922
WALTER E. OLSEN & CO., INC. vs. VICENTE ALDANESE
On March 29, 1922, respondents' demurrer to the petition was overruled; on April 3,
an answer was duly filed; and on April 21, the petitioner filed a motion for judgment
on the pleadings.
The facts are fully stated in the former opinion.1
Paragraph 4 of the petition contains certain subdivisions of section 6 of Act No. 2613
of the Philippine Legislature, passed February 4, 1916, entitled "an act to improve
the methods of production and the quality of tobacco in the Philippine and to
develop the export trade therein." They empower the Collector of Internal Revenue
to establish certain general and local rules respecting the classification, marking and
parking of tobacco for domestic sale or for exportation to the United States, and,
among other things, provide:
No leaf tobacco or manufactured tobacco shall be exported from the
Philippine Islands to the United States until it shall have been inspected by
the Collector of Internal Revenue or his duly authorized representative and
found to be standard for export ...
In order to facilitate the free entry of tobacco products from the Philippine
Islands into the United States, the Collector of Internal Revenue is
authorized to act as stamp agent for the Untied States Commissioner ofInternal Revenue, and to certify to the Insular Collector of Customs that the
standard tobacco exported is the growth and product of the Philippine
Islands. The Insular Collector of Customs upon certificate from the Collector
of Internal Revenue as aforesaid, shall issue such certificate of origin as may
be necessary to insure the speedy admission of the standard tobacco into
the United States free of customs duties.
Paragraph 5 of the petition alleges that under clause B of section 6 of the Act, the
Collector of Internal Revenue promulgated Administrative Order No. 35, known as
"Tobacco Inspection Regulations," in which it is said:
To be classed as standard, cigars must be manufactured under sanitary
conditions from good, clean, selected tobacco, properly cured and
seasoned, of a crop which has been harvested at least six months,
exclusively the product of the provinces of Cagayan, Isabela, or Nueva
Vizcaya. The cigars must be well made, with suitable spiral wrapper and
with long filler, etc.
Paragraph 6 pleads the provisions of section 1 of article 1 of the Constitution of the
United States, and paragraph 7 pleads section 10 of the "Jones Law."
The answer admits paragraphs 4, 5, 6, and 7 of the petition.
Paragraph 6 of the answer says:
They admit the facts alleged in Paragraph XI of the petition in so far as they refer to
the Insular Collector of Customs, but they deny that the acts performed by the said
officer are wrongful or illegal; and they also deny the others facts alleged in the same
paragraph except as they may hereinafter be impliedly admitted, that is, that on or
about February 6, 1922, the petitioner applied to the Collector of Internal Revenue
for a certificate of origin covering a consignment of 10,000 machine-made cigars to
San Francisco, and as the petitioner himself stated on making such application that
the cigars sought to be exported must have been manufactured from short-filler
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tobacco which was not the product of the provinces of Cagayan, Isabela, and Nueva
Vizcaya, the Collector of Internal Revenue did not deem it necessary to make an
actual examination and inspection of said cigars and stated to the petitioner that he
did not see his ways clear to the granting of petitioner's request, in view of the fact
that the cigars which the petitioner's request, in view of the fact that the cigars
which the petitioner was seeking to export were not made with long-filler nor were
they made from tobacco exclusively the product of any of the three mentioned
provinces, and the said cigars were neither inspected nor examined by the Collectorof Internal Revenue.
As a special defense, the respondents allege that under section 11 of Act No. 2613
and section 5 of the Administrative Code of 1917, the Collector of Internal Revenue
has discretionary power to decide whether the manufactured tobacco that the
petitioner seeks to export to the United States fulfills the requisites prescribed by
Administrative Order No. 35. That it is not within the jurisdiction of this court to
order the Collector of Internal Revenue to issue a certificate to the petitioner to the
effect that the manufactured tobacco that the petitioner seeks to export is a product
of the Philippine Islands, but it is for the Collector of Internal Revenue to exercise the
power of issuing said certificate if after an inspection of said tobacco, he should find
that "it conforms to the conditions required by Administrative order No. 35 with the
exclusion of those conditions which, according to the said decision of the Supreme
Courts, the Collector of Internal Revenue is not authorized to required under Act No.
2613."
That the cigars which petitioner seeks to export to the United States have
not as yet been examined or inspected by the Collector of Internal Revenue.
Wherefore, the defendants pray that the petition be dismissed, with costs.
The question presented is whether under the facts admitted, the answer is a good
defense to the petition.
JOHNS,J.:
The defendants are public officers of the Philippine Islands, and the acts of which the
petitioner complains are their official acts.
In paragraph 11 of the petition, among other things, it is alleged:
That on the 6th day of February the said respondent Collector of Internal
Revenue wrongfully and unlawfully refused and neglected and still
unlawfully refuses and neglects to issue such certificate of origin on the
ground that said cigars were not manufactured of long-filler tobacco
produced exlusively in the provisions of Cagayan, Isabela, or Nueva Vizcaya.
Paragraph 6 of the answer says:
"The petitioner applied to the Collector of Internal Revenue for a certificate of origin
covering a consignment of 10,000 machine-made cigars to San Francisco," andrepresented that the cigars were made from short-filler tobacco which was not the
product of Cagayan, Isabela, and Nueva Vizcaya. The Collector of Internal Revenue
did not deem it necessary to make an actual examination and inspection of said
cigars, and stated to the petitioner that he did not see his way clear to the granting
of petitioner's request, in view of the fact that the cigars which the petitioner was
seeking to export were not made with long-filler nor were they made from tobacco
exclusively the product of any of the three provinces, and the said cigars were
neither inspected nor examined by the Collector of Internal Revenue.
In its final analysis, this is an admission by the defendants the cigars in question were
rejected by the Collector of Internal Revenue, for the specified reason that they werenot long-filler cigars manufactured from tobacco grown in one of the three
provinces. That the Collector accepted and treated the statement to the petitioner
as true, and, relying thereon, refused to use the certificate of origin, for the sole
reason that the cigars in question were not long-filler cigars, and were not
manufactured from tobacco grown in one of the three provinces.
If, when the cigars were presented, the Collector of Internal Revenue had simply
refused to issue the certificate of origin and had not specified any grounds for such
refusal he would then have a legal right to plead and rely upon any and all grounds of
refusal. But where, as in the instant case, it is alleged in the petition, and, in legal
effects, admitted in the answer, that the cigars were rejected because they were not
long-filler and were not manufactured from tobacco grown in one of the three
provinces, then, under the authorities and rule of construction, the defendants are
confined and limited to the specified grounds of refusal, and cannot be heard to say
that the cigars were rejected upon any other or different grounds than those
specified in the refusal.
Again, it appears from the whole purport and tenor of the answer that, in their
refusal, the defendant were acting under, and relying upon, those portions of
Administrative Order No. 35, known as "Tobacco Inspection Regulations," which this
court held to be null and void in its former opinion.
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Although in this class of cases, as a general rule, a demand and refusal is prerequisite
to the granting of a writ, it is not necessary where it appears from the record that
the demand, if made, would have been refused.
Merrill on Mandamus, section 225, says:
The law never demands a vain thing, and when the conduct and action of
the officer is equivalent to a refusal to perform the duty desired, it is notnecessary to go through the useless formality of demanding its
performance. Anything showing that the defendant does not intend to
perform the duty is sufficient to warrant the issue of a mandamus.
Cyc., vol. 26, p. 182, says:
Where it appears that a demand would be unavailing it need not be made,
as where the course and conduct of officers is such as to show a settled
purpose not to perform the imposed duty.
In the case of Chicago, K. & W. R. Co. vs.Harris (30 Pac., 456), on page 459, the courtsays:
The action of the officers before and since the commencement of this
action clearly shows that a formal demand would have been unavailing. The
commencement of this proceeding was at least a sufficient demand; and
the defendants, instead of indicating a willingness to execute the bonds,
expressly denied the right of the plaintiff to the bonds, and denied the
existence of any obligation or duty to issue and deliver them. Having
distinctly manifested their purpose not to perform this duty, the question of
a formal demand is no longer important. It appears that it would have been
useless and foolish, and the law rarely requires the doing of a useless act.(Citing a number of authorities.)
In United States vs.Auditors of Town of Brooklyn (8 Fe. Rep., 473), the court says:
But while it is generally true that a court will not issue a mandamusto
compel the performance of an act which it is merely anticipated the
defendant will not perform, still if the defendant has shown by his conduct
that he does not intend to perform the act, and that fact is apparent to the
court, it would be a work of supererogation to require that a demand
should be made for its performance.
The facts in this case are peculiar.
Under the provisions of Act No. 2613, the Collector of Internal Revenue of the
Philippine Islands promulgated Administrative Order No. 35, known as "Tobacco
Inspections Regulations." Such rules and regulations, having been promulgated by
that officer, we have a right to assume that he was acting under such rules and
regulations when he refused to issue the certificate of origin.
It appears from the record that the cigars in question were not long-filler cigars, and
that they were not manufactured from tobacco grown in one of the three provinces.
By the express terms and provisions of such rules and regulations promulgated by
the Collector of Internal Revenue, it was his duty to refuse petitioner's request, and
decline the certificate or origin, because the cigars tendered were not of the
specified kind, and we have a right to assume that he performed his official duty as
the understood it. After such refusal and upon such grounds, it would indeed, have
been a vain and useless thing for the Collector of Internal Revenue to his examined
or inspected the cigars.
Having refused to issue the certificate of origin for the reason above assigned, it is
very apparent that a request thereafter made examine or inspect the cigars would
also have been refused.
The motion for judgment on the pleadings is sustained, and the writ will issue, as
prayed for in the petition, without costs. So ordered.
[G.R. No. 10951. February 14, 1916. ]
K.S. YOUNG ET AL. v. JAMES J. RAFFERTY
On December 29, 1914, the lower court issued a preliminary injunction against the
defendant, his agents, etc., "ordering them and every one of them absolutely to
desist and refrain from in any manner whatsoever enforcing or attempting to
enforce the provisions of the regulation contained in Internal Revenue Circular Letter
No. 467, in so far as it refers to the language in which any day book shall be kept, and
from arresting, procuring the arrest or prosecuting criminally ar administratively any
person who fails to make the entries required by said circular." After the termination
of the trial of the case upon its merits, the preliminary injunction was made
permanent. The defendant has appealed.
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The circular letter above mentioned requires, among other things, every merchant
and manufacturer, with certain specified exceptions, subject to the tax imposed by
section 40 of Act No. 2339, to keep a record of their daily sales either in the English
or the Spanish language, and provides that any violation of or failure to comply with
the provisions of the circular will subject the guilty person to prosecution under the
provisions of section 185 of Act No. 2339. Whether the regulation is authorized by
the Internal Revenue Law (Act No. 2339) and whether this is a proper case forinjunction, are the questions submitted to us for determination. These questions will
be considered in their order.
1. Under section 40 of Act No. 2339, "merchants" are subject to a percentage tax on
the gross proceeds of sales, Section 5 of the Act provides:jgc:chanrobles.com.ph
"The Collector of Internal Revenue shall have power, and it shall be his duty, to make
regulations, not inconsistent with law, necessary to carry this Act into full effect and
to secure an harmonious and efficient administration of his branch of the service.
Such regulations may be either general or local in application and shall become
effective as law when approved by the department head and published."
Section 6
"The Regulations of the Bureau of Internal Revenue shall, among other things,
contain provisions specifying, prescribing, or defining:chanrob1es virtual 1aw library
"(j) The manner in which revenue shall be collected and paid, the instrument,
document, or object to which revenue stamps shall be affixed, the mode of
cancellation of the same, the manner in which the proper books, records, invoices,
and other papers shall be kept and entries therein made by the person subject to the
tax, as well as the manner in which licenses and stamps shall be gathered up and
returned after serving their purpose."cralaw virtua1aw library
Under these provisions of law we do not doubt the authority of the Collector to
require the keeping of a daily record of sales. No one could say with any certainty
what the amount of the tax would be without such data. Moreover, section 6 (j),
above quoted recognizes the necessity that persons subject to the taxes imposed by
the Act keep "books, records, invoices, and other papers." This section is general in
its character and cannot be said to apply to any particular tax more than to another.
It does not prescribe the kind of records that must be kept in each instance. I t merely
requires the proper records to be kept; and, of course, what is proper must be left, in
the first place, to the discretion of the Internal Revenue authorities. It need hardly be
said that the record which merchants are required to keep of their daily sales under
the provisions of the circular letter of the Collector set out in the complaint is
simplicity itself, and that it will, if honestly and faithfully kept, enable the
Government to collect the percentage tax exactly due it. The requirement that the
record must be kept in the form of a book of numbered pages certified to by the
revenue agents is, of course, only an additional security against uncertainty and
possible loss or disorder of parts of the record which might result if the record were
kept on loose sheets of paper. Thus far, therefore, it is clear that the circular letter in
question is in furtherance of section 6 (j) of the Act, wherein persons subject to the
taxes imposed are required to keep proper books, etc.
The important question is whether the act justifies the requirement of the c ircular
letter that this book be kept in either the English or the Spanish language. Section 6
(j) authorizes the revenue authorities to specify the manner in which the proper
books, shall be kept. We have seen that the Collector is authorized to determine that
persons subject to the percentage tax shall keep their sales record in a bound book
of numbered pages., and that this record shall be spread upon the book in the
tabulated form specified in the circular. But is it necessary that any particular
language shall be used in order that these requisites may be observed? We
apprehend that no one will deny that sales could be recorded in a bound volume
such as is specified, using tabulated form desired by the Collector, in any modern
language. In other words, all the information could be recorded in the designatedbook in the required form in Chinese or in a local dialect or in some other language
as accurately as it could be recorded in English or Spanish.
The Collector of Internal Revenue has prepared a statement which has been
accepted by the plaintiff showing by nationalities the total number of wholesale and
retail merchants and their total sales, and the amount of capital, etc., employed in
manufacturing industries, all of whom are taxed under the Internal Revenue Law on
a percentage basis, and who are, therefore, affected by the regulation complained
of. It appears from this statement that there are altogether about 85,000 merchants
in the Philippine Islands. Of this number about 71,000 are Filipinos. There is no
common vernacular in the Philippine Islands, but it is a matter of commonknowledge that a goodly portion of Filipino business men have a practical command
of either English or Spanish. Of the remainder of the 85,000, about 1,500 are of
either American or Spanish or British nationality, and hence, the regulation does not
impose any burden upon them all. Of the remaining 12,500, nearly 12,000 are
Chinese. The aggregate sales of this latter number about to more than sixty per cent
of the total business done by merchants in the Philippine Islands. A witness for the
defendant testified that about two-thirds of the Chinese business men can comply
with the regulation. This, of course, is nothing but an estimate and how near it is to
accuracy we cannot determine. But however this may be, the figures discussed show
that the regulation does affect a large and important class of business men, not only
Chinese but Filipinos as well, although it may be that the burden falls most heavily
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upon the Chinese. To require this number of business men to engage someone
familiar with English or Spanish to keep a record for them which will comply with the
regulation would in many instances impose a greater burden upon them than the
entire amount of taxes which they have to pay.
The difficulties which beset any attempt to hasten the adoption of a common
language is well illustrated by the history of section 12 of the Code of Civil Procedure,
which prescribes the official language of the courts. The original section, enacted in1901, provided that the official language of the courts should be Spanish until
January 1, 1906, after which date it should be English. Even then it was recognized
that some concessions should be made to the use of Spanish after that date, as is
evident by the provisos to the original section. In April, 1904, section 12 was
amended making further concessions in favor of the use of Spanish. (Act No. 1123,
sec. 1.) In December, 1905, section 12 was again amended, postponing the
substitution of English for Spanish as the official language of the courts until January
1, 1911. (Act No. 1427, sec. 1.) In May, 1909, the time for the change was set
forward to January 1, 1913. (Act No. 1946, sec. 1.) Finally in February, 1913, section
12 was again amended so that both English and Spanish are recognized as official
languages of the courts until January 1, 1920. (Act No. 2239, sec. 1.) Thus it appears
that the desired substitution of English for Spanish in one important branch ofgovernmental activity has been deferred from time to time and that the substitution
is one which involves very serious questions of public policy. Ever since the
organization of the courts, they have been doing business in both English and
Spanish, as well as furnishing interpreters of the Philippine dialects and Chinese.
Counsel for the appellant argues that the Collector of Internal Revenue is as much
entitled to prescribe English or Spanish as the language in which the records of the
daily sales must be kept as are the customs authorities of the United States to
require that manifests of ships coming from foreign ports shall either be in English
or, if in a foreign language, that an English translation thereof be furnished. We are
of the opinion, however, that the analogy fails in important particulars. Such arequirement in a customs regulation affects but few of the business men of that
English speaking, and then only when they are transacting business with that
department of the government, while that [art of the regulation in question in the
case under consideration reaches a great number of business men in this country,
where we have no common language, and directly affects every one of them in his
common language, and directly affects every one of them in his private transactions.
It is also urged that the regulation is designed to protect the Government against
evasion of the percentage tax. If it be necessary to impose such a burden upon so
large a number of the business community in order that the Government may
protect itself from such losses, we apprehend that it was never intended that the
initiative should be taken by the Collector of Internal Revenue. The condition
complained of by the Collector has confronted the Government ever since the
present system of internal revenue taxes was inaugurated in 1904. It is not for the
administrative head of a Government bureau to say that such an obstacle to the
collection of taxes shall be removed by imposing burdens not specifically authorized
in the law itself.
In view of the fact that a particular language is not essential to the recording of theinformation desired by the Collector and the enforcement of the objectionable
provisions of his circular would be a very important step in the solution of the
language problem in this country , amounting, we believe, to a question of public
policy which should not be dictated by any administrative authority, we must
conclude that the Collector has exceeded his authority in this particular. In reaching
this conclusion, we have carefully avoided using any language which would indicate
our views upon the plaintiffs second proposition to the effect that if the regulation
were an Act of the Legislative itself, it would be invalid as being in conflict with the
paramount law of the land and treaties regulating certain relations with foreigners.
2. As to whether this is a proper case for injunction, the attorney-General, on behalf
of the defendant, says: "As authority for the contention of the defendant that theallegations made by the plaintiffs that they are in danger of being prosecuted under
the penal provisions of the Internal Revenue Law (Act No. 2339) do not entitle them
to the relief of the injunction, the attention of the court is invited to the following,
appearing on pages 1030 and 1031 of volume 6 of Encyclopedia of United States
Supreme Court Reports and to the cases cited thereunder:
"A court of equity as no general power to enjoin or stay criminal proceedings, unless
they are instituted by a party to a suit already pending before it, and to try the same
right that is in issue there, or to prohibit the invasion of the rights of property by the
enforcement of an unconstitutional law.
The validity of section 185 of the Internal revenue Law is not raised by the pleadings
and evidence in this case; nor in accordance with the above cited authorities can it
be raised in injunction proceedings except in connection with a criminal proceeding
actually pending in the courts."
From the foregoing it will be seen that it is not contended that section 139 of Act No.
2339, wherein it is provided that "No court shall have authority to grant an
injunction to restrain the collection of any internal revenue tax," is applicable to the
case under consideration. Forbidding the enforcement of that part of the ci rcular
letter complained of is not the restraining of the collection of a tax. Consequently,
the principle laid down in the case of Churchill and Tait v. Rafferty (32 Phil. Rep.,
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upon the ground that the judgment appealed from avoids a multiplicity of suits and
gives a remedy more certain and efficacious than could be given in prosecutions
against the various merchants affected by the circular. The noncompliance with the
regulation for a single day would swamp the criminal courts of Manila; for those
(law) courts could only deal with each case separately. Only a court sitting i equity is
competent to meet such an emergency and to determine once and for all questions
such as the one under consideration. For the foregoing reasons the judgment
appealed from is affirmed, with costs. So ordered.
G.R. No. L-5612 October 31, 1953
SY MAN vs. ALFREDO JACINTO
This is an appeal by respondents Alfredo Jacinto, Commissioner of Customs and
Melecio Fabros, Collector of Customs for the Port of Manila (hereafter to be referred
to as Commissioner and Collector, respectively), from a decision of the Court of First
Instance of Manila, granting a petition for a writ of certiorari, prohibition and
mandamus against them. The appeal involves only questions of law. The facts of the
case are contained in a portion of the decision appealed from, which we quote:
On January 2, 1951, the Collector of Customs for the Port of Manila ordered the
seizure of two shipments of textile and a number of sewing machines, consigned to
this petitioner.
On June 4, 1951, the Collector of Customs for the Port of Manila, after due hearing,
rendered a decision, the dispositive part of which reads as follows:
Wherefore, for all the foregoing, it is ordered and decreed that the articles covered
by Seizure Identification No. 1006 be, as they are hereby delivered to the importer
after payment of the necessary customs duty, sales tax and other charges due
thereon, in addition to a fine of One hundred fifty-five pesos(P155) representing five
(5) times the difference in duty of the printed paper in sheets, except the sewing
machines which are hereby declared forfeited to the Government of the Republic of
the Philippines to be sold at public auction in conformity with law if found saleable,
otherwise, to be destroyed.
The Surveyor of the Port shall return the original of this decision showing action
taken.
On June 27, 1951, the herein petitioner (appellee) received a copy of the aforesaid
decision of the Collector of Customs for the Port of Manila.
On July 12, 1951, counsel for the petitioner (appellee) sent a letter to the
Collector of Customs for the Port of Manila, asking for the execution of the
decision, in view of the fact that it had become final and could no longer be
reviewed by the Commissioner of Customs after the lapse of fifteen days
from the date of notification thereof was given to the herein petitioner who
did not appeal from said decision to the Commissioner of Customs within
the aforesaid period of time.
On August 21, 1951, counsel for the petitioner sent another letter to the
Collector of Customs, reiterating the request contained in his letter of July
12, 1951, and urging that the goods which were found not to have been
imported in violation of law, be released to the petitioner under the terms
and conditions of the aforementioned decision of June 4, 1951.
On August 24, 1951, the Collector of Customs for the Port of Manila sent a
letter to petitioner's attorneys, informing them that their letter of July 12,
1951, was endorsed to the Commissioner of Customs on July 13, 1951,
"requesting information whether the merchandise covered by Seizure
Identification No. 1006 may now be delivered to the owner upon showing
that the decision has become final and executory after fifteen (15) days
from the receipt of a copy of the same by the claimant," to which no reply
had been received from the Commissioner of Customs. (pp. 64-66, rec.)
The petition of Sy Man above mentioned sought (1) to declare null and void that
portion of the Memorandum Order promulgated by the Insular Collector of Customs
dated August 18, 1947, which provides that as in protected cases, decisions of the
Collector of Customs in seizure cases, whether appealed or not, are subject to review
by the Insular Collector (now commissioner); that such decisions and their
supporting papers be submitted to his office, and that pending action by him on such
decisions, final disposal of the goods involved shall not be made; and (2) to order the
Collector to deliver to the petitioner the shipment of textiles covered by SeizureIdentification No. 1006 pursuant to its decision of June 4, 1951, claimed to be final
and executory.
As already said, the trial court granted the petition and ordered the Commissioner
and the Collector to execute the decision of the latter dated June 4, 1951, on the
ground that said decision had already become final.
For the purposes of clarification, it should be stated that before the year 1947, the
Bureau of Customs had one chief and one assistant chief, known respectively as
Insular Collector of Customs and Insular Deputy Collector of Customs (section 1138,
Revised Administrative Code).The Insular Collector and the Insular Deputy Collector
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acted as the Collector of Customs and Deputy Collector of Customs for the Port of
Manila (section 1152, Revised Administrative Code). Pursuant to Republic Act No. 51,
authorizing the Chief Executive to reorganize the different executive departments,
bureaus and offices, the President issued Executive Order No. 94 signed on October
4, 1947.
Under sections 51 and 52 of said order, the designation of Insular Collector of
Customs, and the position of Deputy Collector of Customs was changed to that ofCollector of Customs for the Port of Manila.
It is the contention of the applicants that the Commissioner as head of the Bureau of
Customs and the chief executive and administrative officer thereof under section
550, Revised Administrative Code, and also by virtue of section 1152 of the same
Code has supervision and control over the Collector, and that by reason of said
supervision and control, he may motu propio review and revise decisions of the
Collector in seizure cases even when not appealed by the importer. Under that
theory, the Commissioner of Customs promulgated his Memorandum Order of
August 18, 1947. For reference, we reproduce said order.
The petitioner-appellee, however, equally claims that when a decision of the
Collector in a seizure case is not appealed by the importer to the Commissioner
within 15 days as provided for in Section 1380, Revised Administrative Code, then
said decision becomes final not only as to said importer but as to the Government as
well, so that thereafter nothing remains to be done except the execution of the
decision of the Collector, that is to say, the release of the goods seized, if not
forfeited to the Government and the payment of the amounts mentioned and
ordered in the decision.
We are given the impression and we realize that this is the first time that the Courts
have been called upon to interpret the law on this point and to determine whether
or not this supposed power of revision by the Commissioner of unappealed decisions
of the Collector in seizure cases, is supported by law, and for this reason we have
exerted and exercised extra effort and care in examining the law on the subject.
As we understand it, when merchandise or goods are imported through any of the
ports of the Philippines, under normal circumstances, said goods are assessed for
purposes of payment of custom duties, fees and other money charges. If the
importer is satisfied with the assessment he pays the amount assessed and
withdraws the goods. Failure to protest renders the action of the Collector
conclusive against the importer. (See sections 1370 and 1371, Revised Administrative
Code). If dissatisfied he pays the amount of the assessment anyhow and then files a
protest under section 1372, Revised Administrative Code, and the Collector re-
examines the matter thus presented. (Section 1379, Revised Administrative Code.)
However, when property imported is subject to for feiture under the customs laws
(section 1363, Revised Administrative Code), the goods are seized, a warrant for
their detention is issued, the owner or his agent is notified in writing and after giving
a hearing with reference to the offense or delinquency which gave rise to the
seizure, the Collector in writing makes a declaration of forfeiture or fixes the amountof the fine to be imposed or takes such other appropriate steps he may deem
proper. (Sections 1374, 1375, 1379 [paragraph 2], Revised Administrative Code.)
Both under protest and seizure cases the person aggrieved by the decision of the
Collector may appeal to the Commissioner within 15 days. (Section 1380, Revised
Administrative Code.) Because of its importance to this case, and for purposes of
reference, we are reproducing said section.
SEC. 1380. Review by Commissioner. The person aggrieved by the decision of the
collector of customs in any matter presented upon protest or by his action in any
case of seizure may, within fifteen days after notification in writing by the collectorof his action or decision, give written notice to the collector signifying his desire to
have the matter reviewed by the Commissioner.
Thereupon, the collector of customs shall forthwith transmit all the papers
in the cause to the Commissioner, who shall approve, modify, or reverse the
action of his subordinate and shall take such steps and make such order or
orders as may be necessary to give effect to his decision.
If the person aggrieved by the decision of the Collector in a seizure case does not
make such appeal, the decision evidently becomes final, at least as to him. That was
the reason why petitioner-appellee, in the belief that because he failed or did not
choose to appeal from the decision of June 4, 1951, the same had become final,
asked the court that the same be executed, that is to say, that he be allowed to pay
the amounts fixed in the decision and that the merchandise be released, with the
exception of the sewing machines which were declared subject to forfeiture. The
Commissioner, however, as already stated, believes that the decision of the Collector
in a seizure case the unappealed does not become final as against the Government
as long as it has not been reviewed and acted upon by him. He does not state the
period if any within which he may or has to make such revision. In other words, the
appellants' claim seems to be that he (the Commissioner) may hold without action
an appealed seizure case, the decision of which is already final as to the importer,
indefinitely, for months if not for years, as for instance, when there are too may such
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cases to study and decide, or there are other matters that have preference to this
attention and action, a period of time without limit.
From the standpoint of the importer, such a rule or theory is decidedly
unsatisfactory and even unjust, if not oppressive. He is willing to abide by the
decision of the Collector; he wants to pay the amounts fixed and stated in the
decision, including the fines, and desires to get the goods released so as to be able to
dispose of them. The Commissioner, however, relying exclusively on his power ofsupervision and control, as head of the Bureau of Customs, over Collectors of
Customs as his subordinates in that bureau, and presumably on his Memorandum
Order of August 18, 1947, contends that the seizure case involving goods seized way
back on January 2, 1951, and decided by the Collector on June 4,1 951, tho
unappealed by the importer and thereby binding on him, is still unfinished business
as far as the Government is concerned, because he(the Commissioner) has not yet
gotten around to act upon it. For that matter, we understand that up to the present,
the latter part of 1953, the Commissioner has not yet taken any action, approving,
reversing or modifying the decision of the Collector of Customs. As we have already
had occasion to pay, said rule or procedure claimed for the Government would
appear to be unsatisfactory, intolerable if not oppressive to importers.
As regards the Memorandum Order of August 18, 1947, by the Insular Collector of
Customs to Collectors of Customs, we are afraid that appellants cannot find support
and comfort therein. We are given to understand by the parties or at least appellants
do not deny appellee's assertion that said memorandum order was never approved
by the department head and was never published in the Official Gazette. Section 551
of the Revised Administrative Code provides that every chief of bureau shall
prescribe forms and make regulations or general orders not inconsistent with law to
carry into full effect the laws relating to matters within the bureau's jurisdiction. But
to become effective said forms and regulations must be approved by the
Department head and published in the Official Gazetteor otherwise publicly
promulgated. Because of this failure of approval by the department head and ofpublication, the memorandum order of August 18, 1947 has therefore no legal
effect. Moreover, a form or regulation promulgated by a Bureau Chief must not be
inconsistent with law. Therefore, if the law does not give the Commissioner the
power to review and revise unappealed decisions of the Collector of Customs in
seizure cases, then the memorandum order even if duly approved and published in
the Official Gazette, would equally have no effect for being inconsistent with law.
Let us now see if there is any law giving authority to the Commissioner of Customs to
review and revise unappealed decisions in seizure cases. In cases involving
assessment of duties, even when the importer fails to protest the decision of the
Collector of Customs, the Commissioner may order a reliquidation if he believes that
the decision of the Collector was erroneous and unfavorable to the Government; and
the Department Head in his turn if he believes that the decision of the Commissioner
in any unprotested case of assessment of duties is erroneous and unfavorable to the
Government, may require the Commissioner to order a reliquidation or he may
direct the Commissioner to certify the case to the Court of First Instance of Manila.
We are reproducing said section 1393..
SEC. 1393. Supervisory authority of Commissioner and of Department Head in certaincases. If in any case involving the assessment of duties the importer shall fail to
protest the decision of the collector of customs and the Commissioner shall be of the
opinion that the decision was erroneous and unfavorable to the Government, the
latter may order a reliquidation; and if the decision of the Commissioner in any
unprotested case should, in the opinion of the Department Head, be erroneous and
unfavorable to the Government, the Department Head may require the
Commissioner to order a reliquidation or he may, if in his opinion the public interest
requires, direct the Commissioner to certify the cause to the Court of First Instance
of Manila, in the manner provided in section one thousand three hundred and
eighty-six hereof, there to be reviewed by the court as other customs cases removed
thereto.
Except as in the preceding paragraph provided, the supervisory authority of
the Department Head over the Bureau of Customs shall not extend to the
administrative revisal of the decisions of the Commissioner in matters
removable into court.
It will be noticed that the section is entitled "supervisory authority of the
Commissioner and of the Department Head in certain cases." We find no similar legal
provision in seizure cases. The logical inference is that the lawmakers did not deem it
necessary or advisable to provide for this supervisory authority or power of revision
by the Commissioner and the Department Head on unappealed seizure cases; and it
is highly possible that up to and until 1947, when the memorandum order of August18th of that year was issued, it was not the practice of the Bureau of Customs to
have unappealed seizure cases sent up by Collectors to the Commissioner's office for
review and revision. This we may gather from the memorandum order itself, where
the Commissioner observes that in seizure cases some collectors of customs merely
submit to him their reports of their seizure and the subsequent final disposition
thereof without transmitting the records of their proceedings, and he therein asserts
the right of the Commissioner of Customs to review decisions of Collector of
Customs in seizure cases though unappealed. If that right and that practice had
existed from the beginning, it is not likely that Collectors would disregard and ignore
it, to the extent that it was necessary to remind them of it by means of a
memorandum order.
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Moreover, under section 1380 of the Revised Administrative Code above
reproduced, it would seem that in a seizure case, the Collector transmits all the
papers in the cause to the Commissioner only when and after the importer notifies
him in writing signifying his desire to have the matter reviewed by the
Commissioner. The section does not say that without the notice of appeal, the
Collector is called upon to submit the papers of the case to the Commissioner. If this
be true, then legally, a case of seizure unappealed ends right in the office of the
Collector, with-out prejudice of course to the Collector subsequently making a reportof his action to the Commissioner. Furthermore, section 1388 of the Revised
Administrative Code provides thus:
SEC. 1388. Settlement of cause by payment of fine or redemption of
forfeited property. If, in any seizure case, the owner or agent shall, while
the cause is yet before the collector of the district of seizure, pay to such
collector the fine imposed by him or, in case of forfeiture, shall pay the
appraised value of the property, or if, after removal of the cause, he shall
pay to the Commissioner the amount of the fine as finally determined by
him, or, in case of forfeiture, shall pay the appraised value of the property,
such property shall be forthwith surrendered, and all liability which may or
might attach to the property by virtue of the offense which was the
occasion of the seizure and all liability which might have been incurred
under any bond given by the owner or agent in respect to such property
shall thereupon be deemed to be discharged.
Redemption of forfeited property shall not be allowed in any case where
the importation is absolutely prohibited or where the surrender of the
property to the person offering to redeem the same would be contrary to
law.
If under the above provisions, in a seizure case the owner or agent may, while the
cause is yet before the collector, pay the fine imposed, or in case of forfeiture, paythe appraised value of the property, and thereafter such properties shall be
surrendered and all liability which may attach to said property by virtue of the
offense causing the seizure is to be deemed discharged, the conclusion to be drawn
is that it is within the power and right of an importer, owner or agent to end the case
in the office of the Collector, thereby precluding any intervention by the
Commissioner in the way of reviewing and revising the decision of the Collector.
Again, under section 1389 immediately following which reads
SEC. 1389. Right of protest in such cases. Where payment is made or
redemption effected as allowed under the preceding section, the party
making payment or effecting the redemption may, if he desires to test the
validity of the proceedings, make formal protest at the time of making such
payment or affecting such redemption, or within fifteen days thereafter,
and make claim for the repayment of the whole or any part of the sum so
paid by him, whereupon the proceedings shall take the same course as in
ordinary cases of protest against customs duties and charges generally.
the importer or owner of goods seized, after payment is made or redemption
effected, is allowed if he desires to test the validity or correctness of the decision ofthe Collector, to appeal the same to the Commissioner of Customs presumably, to
decrease the amount of his liability or annul the seizure altogether and have all the
amounts paid by him refunded. The inference follows that by making payment and
redeeming the property seized under the decision of the Collector of Customs, the
owner may terminate the case right there, altho notwithstanding his payment he still
has the right to have the case elevated to the Office of the Commissioner of
Customs. It would seem that the elevation of the case and the transmittal of the
papers thereof to the Commissioner lies within the owner's exclusive power and
discretion. This argues against the pre-tended power of the Commissioner of
automatic review and revision of decisions of Collectors in unappealed seizure cases.
It is argued that if this power of review and revision by the Commissioner of
unappealed seizure cases is not conceded, then in cases where the Collector in his
decision commits a blunder prejudicial to the interests of the Government, or
renders a decision through fraud or in collusion with the importer, the Government
cannot protect itself. The argument is not without merit; but we must bear in mind
that the law is promulgated to operate on ordinary, common, routine cases. The rule
is and the law presumes that in seizure cases Collector of Customs act honestly and
correctly and as Government officials, always with an eye to the protection of the
interests of the Government employing them. If mistakes are committed at all more
often than not they are in favor of the Government and not against it, and that is the
reason why when the importer feels aggrieved by their decision, he is given every
chance and facility to protest the decision and appeal to the Commissioner. Cases oferroneous decisions against the interest of the Government of decisions rendered in
collusion and connivance with importers are the exception. To protect the
Government in such exceptional cases, we find that in every seizure case, section
1378 of the Revised Administrative Code requires the Collector to immediately notify
the Commissioner and the Auditor General. It maybe that this requirement has for
its main purpose the recording of and accounting for the articles seized so that in
case of confiscation the Commissioner and the Auditor General will know what
articles have become government property. But the notice will also inform the
Commissioner and the Auditor General of the seizure. I f the seizure is important or
unusual, the Commissioner may, if he so desires, order the Collector as his
subordinate to withhold action on the seizure, or hold in abeyance, within a
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reasonable time, the promulg