SHIPSIDE, INC VS. COURT OF APPEALS (GR.

143377, FEBRUARY 20, 2001)

 Association of Philippine Coconut Dessicators vs. Philippine Coconut Authority (G.R. No. 110526,
February 10, 1998)

FACTS: The Philippine Coconut Authority (PCA) was created by Presidential Decree No. 232 as an independent public
corporation to promote the rapid integrated development and growth of the coconut and other palm oil industry in all
its aspects and to ensure that coconut farmers become direct participants in, and beneficiaries of, such development
and growth through a regulatory scheme set up by law. On November 5, 1992, a number of desiccated coconut processing
companies, all members of the Association of Philippine Coconut Desiccators (APCD), filed a petition to prohibit Philippine
Coconut Authority (PCA) from further issuance of permits to applicants in areas considered “congested” under PCA'S prior
administrative order. The trial court consequently, issued a temporary restraining order and a writ of preliminary
injunction against PCA. Thereafter, on March 24, 1993, Philippine Coconut Authority (PCA), issued Resolution No. 018-
93. The resolution provided for the withdrawal of PCA from all regulation of the coconut product processing industry. It
limited the registration process to the monitoring of their volumes of production and administration of quality standards.
The PCA then proceeded the issuance of “certificates of registration”, enabling several new coconut mills to operate.
The resolution was grounded on free enterprise in favor of the growth and development of the coconut and palm industry
in all aspects. Petitioner claims that PCA Board resolution no. 018-93 is an undue exercise of legislative power by an
administrative body. Also, it passed the resolution without due process requirement of consultation. However, PCA
argued that petitioner’s claims are a manifestation of forum shopping, and should first exhaust all administrative
remedies before seeking judicial review.

ISSUE/S: 1.Whether or not the rule of exhaustion of administrative remedies should apply2.Whether or not PCA violated
the principle of non-delegation of powers3.Whether or not resolution no. 018-93 is valid

HELD:1.The rule of exhaustion of administrative remedies before seeking judicial review does not apply. That rule is
only a bar to an action which is not yet complete; clearly, the promulgation of the resolution is already operative.
Contrary to petitioner’s claim of undue process, there is no provision under presidential decrees that functions of PCA
requires the approval of the President before it can takeeffect.2.YES, because the power given to PCA “to formulate and
adopt a general program of development for the coconut and other palm oils industry” is not a roving commission to
adopt any program deemed necessary. This power must be exercised in the context of this regulatory structure. By
limiting the purpose of registration to the mere monitoring of volumes of production and the administration of quality
standards, PCA in a sense, abdicates its power and leaves it to the market forces. Not to exercise

Philippine Virginia Tobacco Adm. vs. CIR (G.R. No. L-32052, July 25, 1975)
Facts:

-On December 20, 1966, claimants, now private respondents, filed with respondent Court a petition wherein they alleged
their employment relationship, the overtime services in excess of the regular eight hours a day rendered by them, and
the failure to pay them overtime compensation in accordance with Commonwealth Act No. 444. Their prayer was for the
differential between the amount actually paid to them and the amount allegedly due them. There was an answer filed
by petitioner Philippine Virginia Tobacco Administration denying the allegations and raising the special defences of lack
of a cause of action and lack of jurisdiction. 7 The issues were thereafter joined, and the case set for trial, with both
parties presenting their evidence. 8 After the parties submitted the case for decision, the then Presiding Judge Arsenio
T. Martinez of respondent Court issued an order sustaining the claims of private respondents for overtime services from
December 23, 1963 up to the date the decision was rendered on March 21, 1970, and directing petitioner to pay the
same, minus what it had already paid. 9 There was a motion for reconsideration, but respondent Court en banc denied
the same. 10 Hence this petition for certiorari.

Petitioner Philippine Virginia Tobacco Administration, as had been noted, would predicate its plea for the reversal of the
order complained of on the basic proposition that it is beyond the jurisdiction of respondent Court as it is exercising
governmental functions and that it is exempt from the operation of Commonwealth Act No. 444.

Issue:

Whether or not petitioner, the Philippine Virginia Tobacco Administration, discharges governmental and not proprietary
functions.
Held:

Yes, the Petitioner discharges governmental and not proprietory funtions.

The petitioner's plea that it performs governmental and not proprietary functions. As originally established by Republic
Act No. 2265, 12 its purposes and objectives were set forth thus: "(a) To promote the effective merchandising of Virginia
tobacco in the domestic and foreign markets so that those engaged in the industry will be placed on a basis of economic
security; (b) To establish and maintain balanced production and consumption of Virginia tobacco and its manufactured
products, and such marketing conditions as will insure and stabilize the price of a level sufficient to cover the cost of
production plus reasonable profit both in the local as well as in the foreign market; (c) To create, establish, maintain,
and operate processing, warehousing and marketing facilities in suitable centers and supervise the selling and buying of
Virginia tobacco so that the farmers will enjoy reasonable prices that secure a fair return of their investments; (d) To
prescribe rules and regulations governing the grading, classifying, and inspecting of Virginia tobacco; and (e) To improve
the living and economic conditions of the people engaged in the tobacco industry. The amendatory statute, Republic Act
No. 4155, 14 renders even more evident its nature as a governmental agency. Its first section on the declaration of policy
reads: "It is declared to be the national policy, with respect to the local Virginia tobacco industry, to encourage the
production of local Virginia tobacco of the qualities needed and in quantities marketable in both domestic and foreign
markets, to establish this industry on an efficient and economic basis, and, to create a climate conducive to local
cigarette manufacture of the qualities desired by the consuming public, blending imported and native Virginia leaf
tobacco to improve the quality of locally manufactured cigarettes." 15 The objectives are set forth thus: "To attain this
national policy the following objectives are hereby adopted: 1. Financing; 2. Marketing; 3. The disposal of stocks of the
Agricultural Credit Administration (ACA) and the Philippine Virginia Tobacco Administration (PVTA) at the best obtainable
prices and conditions in order that a reinvigorated Virginia tobacco industry may be established on a sound basis; and 4.
Improving the quality of locally manufactured cigarettes through blending of imported and native Virginia leaf tobacco;
such importation with corresponding exportation at a ratio of one kilo of imported to four kilos of exported Virginia
tobacco, purchased by the importer-exporter from the Philippine Virginia Tobacco Administration

Ruling:

It is an inherent state function which makes government required to support its people and promote their general
welfare. This case explains and portrays the expanded role of government necessitated by the increased responsibility
to provide for the general welfare.

The Court held that the distinction and between constituent and ministrant functions, which the Chief Justice points
out, is already irrelevant considering the needs of the present time. He says that "The growing complexities of modern
society have rendered this traditional classification of the functions of government obsolete." The distinction between
constituent and ministrant functions is now considered obsolete.

The Court affirms that the Petition as well as the subsequent Motion for Reconsideration be DENIED.

Reagan vs. Commissioner of Internal Revenue (30 SCRA 968)

Facts:
The petitioner is a citizen of the United State and an employee of Bendix Radio, Divison of Bendix Aviation
Corporation, which provided technical assistance to the United States Air Force was assigned at the Clark Air Base
Pampanga, honor about July 7, 19. Nine months, before his tour duty expires, petitioner imported a tax free 1960 Cadillac
car which valued at $6443.83. More than two months after the car was imported, petitioner requested the Clark Air Base
Commander for a permit to sell the car. The request was granted with the condition that he would sell it to a member
of the United States Armed Forces or an employee of the U.S. Military Bases.
On July 11, 1960, petitioner sold the car to Willie Johnson for $6600, a private in US Marine Corps, Sangby
Point, Cavite as shown by a bill of sale executed at Clark Air Base. On the same date William Johnson Jr. sold the car to
Fred Meneses for P32,000 as evidence by a deed of sale executed in Manila.
The respondent after deducting the landed cost of the car and the personal exemption which the petitioner
was entitled, fixed as his net income arising from such transaction the amount of P17912.34 rendering him liable for
income tax of P2979.00. After paying the sum, he sought refund from the respondent claiming that he is exempted. He
filed a case within the Court of Tax Appeals seeking recovery of the sum P2979.00 plus legal rate of interest.

Issue:
Whether or not the said income tax of P2979.00 was legally collected by respondent from petitioner.

Ruling:
The Philippine is an independent and sovereign country or state. Its authority may be exercised over its entire
domain. Its laws govern therein and everyone to whom it applies must submit to its term. It does not prelude from
allowing another power to participate in the exercise of jurisdictional rights over certain portions of its territory. Such
areas sustain their status as native soil and still subject to its authority. Its jurisdiction may be diminished but it does
not disappear.
The Clark Air Base is one of the bases under lease to the American armed forces by virtue of the Military Bases
Agreement which states that a “national of the US serving or employed in the Philippines in connection with the
construction, maintenance, operation, or defense of the bases and residing in the Philippines only by reason such
unemployment is not to be taxed on his income unless derived in the bases which one clearly derived the Phil.
Therefore the Supreme Court sustained the decision of the Court of Tax Appeals rendering the petitioner liable
of the income tax arising from the sale of his automobile that have taken place in Clark Air Field which is within our
territory to tax.

People vs. Gozo (G.R. No. L-36409, October 26, 1973)

FACTS:
The accused bought a house and lot located inside the United States Naval Reservation within the territorial
jurisdiction of Olongapo City. She demolished the house and built another one in its place, without a building permit
from the City Mayor of Olongapo City, because she was told by one Ernesto Evalle, an assistant in the City Mayor's office,
as well as by her neighbors in the area, that such building permit was not necessary for the construction of the house.
On December 29, 1966, Juan Malones, a building and lot inspector of the City Engineer's Office, Olongapo City, together
with Patrolman Ramon Macahilas of the Olongapo City police force apprehended four carpenters working on the house
of the accused and they brought the carpenters to the Olongapo City police headquarters for interrogation.
After due investigation, Loreta Gozo was charged with violation of Municipal Ordinance No. 14, S. of 1964 with the City
Fiscal's Office."
The City Court of Olongapo City found her guilty of violating Municipal Ordinance No. 14, Series of 1964 and sentenced
her to an imprisonment of one month as well as to pay the costs.
The Court of Instance of Zambales, on appeal, found her guilty on the above facts of violating such municipal ordinance
but would sentence her merely to pay a fine of P200.00 and to demolish the house thus erected.
Accused’s Contention (CA): She questions the validity of such an ordinance on constitutional ground, relying on the
decision of the SC in People vs. Fajardo, or at the very least its applicability to her in view of the location of her dwelling
within the naval base.
The Court of Appeals, noting the constitutional question raised, certified the case to the SC.

ISSUE/S: 1. WON local government units have authority to require building permits

2. WON land found within US Naval Bases is beyond the Philippine government’s power of governance.

RULING:

1. YES.

The Accused relies heavily on the case of Fajardo vs. People. In the said case the SC struck down the application of an
ordinance requiring a building permit, for being oppressive. Therein, Fajardo had repeatedly applied for the permit and
was repeatedly denied the issuance of the same, thereby forcing him to build his him without a permit, because their
previous home was destroyed by a typhoon, and they badly needed a place of residence. Clearly then, the application of
such an ordinance to Fajardo was oppressive.
In this case, on the contrary, appellant never bothered to comply with the ordinance. Perhaps aware of such a crucial
distinction, she would assert in her brief: "The evidence showed that even if the accused were to secure a permit from
the Mayor, the same would not have been granted. To require the accused to obtain a permit before constructing her
house would be an exercise in futility.” It would be from her own version, at the very least then, premature to anticipate
such an adverse result, and thus to condemn an ordinance which certainly lends itself to an interpretation that is neither
oppressive, unfair, or unreasonable. That kind of interpretation suffices to remove any possible question of its validity.
Appellant cannot therefore take comfort from any broad statement in the Fajardo opinion, which incidentally is taken
out of context, considering the admitted oppressive application of the challenged measure in that litigation. So much
then for the contention that she could not have been validly convicted for a violation of such ordinance. Nor should it be
forgotten that she did suffer the same fate twice, once from the City Court and thereafter from the Court of First
Instance. The reason is obvious. Such ordinance applies to her.

2. NO. The non-application of ordinances based on the alleged absence of the rather novel concept of administrative
jurisdiction on the part of Olongapo City, cannot be countenanced and is offensive to the juristic concept of jurisdiction.

In People vs. Acierto the SC held that: "By the Agreement, it should be noted, the Philippine Government merely consents
that the United States exercise jurisdiction in certain cases. The consent was given purely as a matter of comity, courtesy,
or expediency. The Philippine Government has not abdicated its sovereignty over the bases as part of the Philippine
territory or divested itself completely of jurisdiction over offenses committed therein. Under the terms of the treaty,
the United States Government has prior ghts not granted, but also all such ceded rights as the United States Military
authorities for reasons of their own decline to make use of.”

In Reagan vs. CIR the SC held that:"Nothing is better settled than that the Philippines being independent and sovereign,
its authority may be exercised over its entire domain. There is no portion thereof that is beyond its power. Within its
limits, its decrees are supreme, its commands paramount. Its laws govern therein, and everyone to whom it applies must
submit to its terms. That is the extent of its jurisdiction, both territorial and personal. Necessarily, likewise, it has to be
exclusive. If it were not thus, there is a diminution of sovereignty."

The SC further espoused the principle of auto-limitation: "It is to be admitted any state may, by its consent, express or
implied, submit to a restriction of its sovereign rights. There may thus be a curtailment of what otherwise is a power
plenary in character. That is the concept of sovereignty as auto-limitation, which, in the succinct language of Jellinek,
"is the property of a state-force due to which it has the exclusive capacity of legal self-determination and self-restriction."
A state then, if it chooses to, may refrain from the exercise of what otherwise is illimitable competence." The opinion
was at pains to point out though that even then, there is at the most diminution of jurisdictional rights, not its
disappearance. The words employed follow: "Its laws may as to some persons found within its territory no longer control.
Nor does the matter end there. It is not precluded from allowing another power to participate in the exercise of
jurisdictional right over certain portions of its territory. If it does so, it by no means follows that such areas become
impressed with an alien character. They retain their status as native soil. They are still subject to its authority. Its
jurisdiction may be diminished, but it does not disappear. So it is with the bases under lease to the American armed
forces by virtue of the military bases agreement of 1947. They are not and cannot be foreign territory."

CASE TITLE: The Collector of Internal Revenue vs Antonio Campos Rueda

GR NO: L – 132052 (October 29, 1971)

FACTS: Antonio Campos Rueda is the administrator of the estate of the deceased, Doña Maria de la Estrella Soriano Vda.
de Cerdeira (Maria Cerdeira for short). Maria Cerdeira is a Spanish national, by reason of her marriage to a Spanish citizen
and was a resident of Tangier, Morocco from 1931 up to her death on January 2, 1955.

At the time of her death she left, among others, intangible personal properties in the Philippines. On September 29,
1955, Campos Rueda filed a provisional estate and inheritance tax return on all the properties of the deceased. On the
same year, the CIR issued an assessment for estate and inheritance taxes claiming a total of 369, 383.96 of tax liability.
Campos Rueda filed an amended tax return claiming 396,308.90 worth of intangible personal properties. CIR denied the
exception on January 11, 1956 and demanded payment of the sums of 239,439.49 representing deficiency estate and
inheritance taxes including ad valorem penalties, surcharges, interests and compromised penalties.

Denial by the CIR is on the ground that the law of Tangier has no reciprocity as to Section 122 of the National Internal
Revenue Code (NIRC). Campos Rueda was able to prove, in the Court of Tax Appeals, that Tangier manifest the element
of reciprocity of the said section.
The controlling legal provision as noted is a proviso in Section 122 of the National Internal Revenue Code. It reads thus:

"That no tax shall be collected under this Title in respect of intangible personal property (a) if the decedent at
the time of his death was a resident of a foreign country which at the time of his death did not impose a transfer
tax or death tax of any character in respect of intangible person property of the Philippines not residing in that
foreign country, or (b) if the laws of the foreign country of which the decedent was a resident at the time of
his death allow a similar exemption from transfer taxes or death taxes of every character in respect of intangible
personal property owned by citizens of the Philippines not residing in that foreign country."

However, the CIR still denied any tax exemption in favor of the estate as it claimed that Tangier is not a “state” as
contemplated by Section 22 of the NIRC does not recognize Tangier as a foreign country.

ISSUE: Whether or not Tangier, Morocco satisfies the requisites of statehood and satisfies the definition of “foreign
country” referred in Section 122 of the National Internal Revenue Code (NIRC).

RULING: Yes. For the purposes of the NIRC, Tangier, Morocco is a foreign country.

If a foreign country is to be identified with a state, it is required in line with Pound's formulation that it be a politically
organized sovereign community independent of outside control bound by penalties of nationhood, legally supreme within
its territory, acting through a government functioning under a regime of law. It is thus a sovereign person with the people
composing it viewed as an organized corporate society under a government with the legal competence to exact obedience
to its commands. The stress is on its being a nation, its people occupying a definite territory, politically organized,
exercising by means of its government its sovereign will over the individuals within it and maintaining its separate
international personality.

Also, the court noted two (2) decided cases as follows:

Collector of Internal Revenue v. De Lara:

"Considering the State of California as a foreign country in relation to section 122 of our Tax Code we believe
and hold, as did the Tax Court, that the Ancilliary Administrator is entitled the exemption from the inheritance
tax on the intangible personal property found in the Philippines."

What is undeniable is that even prior to the De Lara ruling, the Supreme Court did commit itself to the doctrine that
even a tiny principality, that of Liechtenstein, hardly an international personality in the sense, did fall under this exempt
category.

Kiene v. Collector of Internal Revenue:

"The Board found from the documents submitted to it — proof of the laws of Liechtenstein — that said country
does not impose estate, inheritance and gift taxes on intangible property of Filipino citizens not residing in that
country. Wherefore, the Board declared that pursuant to the exemption above established, no estate or
inheritance taxes were collectible, Ludwig Kiene being a resident of Liechtestein when he passed away."

Bacani vs. NACOCO (G.R. No. L-9657, November 29, 1956)

Facts:
 Plaintiffs Leopoldo Bacani and Mateo Matoto are both court stenographers assigned in Branch VI of the
Court of First Instance of Manila. During the pendency of Civil Case No.2293 of the said court, entitled
Francisco Sycip vs. National Coconut Corporation, Federico Alikpala, the counsel for the defendant,
requested said stenographers for copies of the transcript of the stenographic notes taken by them during
the hearing. Plaintiffs complied with the request and delivered the needed transcript containing 714
pages and thereafter submitted to Counsel Alikpala their bills for the payment of their fees. The
National Coconut Corporation paid the amount of P564 to Bacani, and P150 to Matoto for the said
transcript at the rate of P1 per page.

Upon inspecting the books of the corporation by the Auditor General, the payment of the said fees was
disallowed and recovery of the amounts paid was sought. On the 19th of January 1953, the Auditor
General required the plaintiffs to reimburse said amounts on the strength of a circular of the
Department of Justice, wherein it was expressed that NACOCO, being a government entity, was exempt
from the payment of the fees in question.

Bacani et al counter the deduction of the said fees from their salaries and that NACOCO is not a
government entity within the purview of section 16, Rule 130 of the Rules of Court. The defendants set
up as a defense that the NACOCO i9s a government entity within the purview of section 2 of the Revised
Administrative Code of 1917, and therefore, exempting NACOCO from paying the stenographers’ fees
under Rule 130 of the Rules of Court.

Issue:
Whether or not the National Coconut Corporation (NACOCO) may be considered as a government entity.

Held:
No. The Supreme Court held that the National Coconut Corporation does not acquire the status of being part
of the “Government” because they do not come under the classification of municipal or public corporation.
Although the said corporation was organized with the purpose of promoting the coconut industry, it was
given a corporate power separate and distinct from that of our government, for it was made subject to the
provisions of our Corporation Law in so far as its corporate existence and the powers that it may exercise
are concerned. It may sue and be sued in the same manner as any other private corporations, and in this
sense it is an entity different from our government

Laurel vs. Misa (G.R. No. L-409, January 30, 1947)

FACTS- Anastacio Laurel filed a petition for habeas corpus. He was then charged and held for the crime of treason during
the Japanese occupation. He anchors his petition based on the theory that a Filipino citizen who adhered to the enemy
giving the latter aid and comfort during the Japanese occupation cannot be prosecuted for the crime of treason defined
and penalized by article 114 of the Revised Penal Code, for the reason (1) that the sovereignty of the legitimate
government in the Philippines and, consequently, the correlative allegiance of Filipino citizens thereto was then
suspended; and (2) that there was a change of sovereignty over these Islands upon the proclamation of the Philippine
Republic.

Issues. (1) Is the sovereignty of the legitimate govt in the Phils suspended during the Japanese occupation?

(2) Does the law on treason still apply even during the Japanese occupation?

Held. (1) No. The absolute and permanent allegiance of the inhabitants of a territory occupied by the enemy to their
legitimate govt or sovereign is not abrogated or severed by the enemy occupation, because the sovereignty of the govt
or sovereign de jure is not transferred thereby to the occupier. (2) Yes. Since the preservation of allegiance of the
obligation of fidelity and obedience of a citizen or subject to his government or sovereign does not demand from him a
positive action but only passive attitude or forbearance from adhering to the enemy by giving the latter aid and comfort,
the occupant has no power to repeal or suspend the operation of the law of treason, essential for the preservation of
the allegiance owed by the inhabitants to their legitimate government, or compel them to adhere and give aid and
comfort to him; because it is evident that such action is not demanded by the exigencies of the military services or not
necessary for the control of the inhabitants and the safety and protection of his army, and because it is tantamount to
practically transferring temporarily to the occupant their allegiance to the titular government or sovereignty.

Macariola vs. Asuncion (114 SCRA 77)

er its incorporation realizing that their interest contravenes the Canon 25 of the Canons of Judicial Ethics.