Powers and Functions in General 288 (1956)

26. Ollada vs. Secretary of Finance, 109 Phil 1072

(1960)
1. Makati Stock Exchange Inc. vs. SEC, 14 SCRA
27. Fortich vs. Corona, 298 SCRA 685 (1998)
620 (1965)
28. Eastern Shipping Lines Inc. vs. CA, 291 SCRA
2. Radio Communications of the Phil. vs. Board of
485 (1998)
Communications, 80 SCRA 471 (1977)
3. Matienzo vs. Abellera, 162 SCRA 11 (1988)
4. Vda. de Herrera vs. Bernardo, 650 SCRA 87 Adjudicatory Powers
(2011)
Investigatory Powers 29. Philex Mining Co. vs. Zaldivia, 43 SCRA 479
(1972)
5. Ruperto vs. Torres, 100 Phil. 1098 (1957) 30. Antipolo Realty Co. vs NHA, 153 SCRA 399
6. Carmelo vs. Ramos, 6 SCRA 836 (1962) (1987)
7. Evangelista vs. Jarencio, 69 SCRA 99 (1975) 31. Guerzon vs. CA, 164 SCRA 182 (1988)
8. Catura vs. Court of Industrial Relations, 37 SCRA
303 (1971)

Rule-Making Powers

9. Victorias Milling Co. vs. Social Security

Commission, 4 SCRA 627 (1962)
10. Manuel vs. General Auditing Office, 42 SCRA
660 (1976)
11. Olsen and Co. vs. Aldanese, 43 Phil 259(1922)
12. Young vs. Rafferty, 33 Phil. 276 (1916)
13. Sy Man vs. Fabros, 93 Phil. 1093 (1913)
14. Interprovincial Auto Bus Co. vs. Collector of
Internal Revenue, 98 Phil. 290 (1956)
15. Phil. Lawyers' Assoc. vs. Agrava, 105 Phil 173
(1959)
16. Philippines Inter-Island Shipping Association of
the Phil. vs. CA, 266 SCRA 489 (1997)
17. Commissioner of Internal Revenue vs. Fortune
Tobacco Co., 658 SCRA 289 (2011)
18. Lupangco vs. CA, 160 SCRA 848 (1988)
19. Olsen and Co. vs. Herstein and Rafferty, 35 Phil
520 (1915)
20. People vs. Maceren, 79 SCRA 450 (1977)
21. US vs. Panlilio, 28 Phil 608 (1914)
22. US vs. Tupasi Molina, 29 Phil 169 (1014)
23. People vs. Santos, 63 Phil 300 (1936)
24. People vs. Que Po Lay, 94 Phil 640 (1954)
25. Hilado vs. Collector of Internal Revenue, 100 Phil
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Makati Stock Exchange vs SEC (b) their guaranteed civil liberty to pursue any
lawful employment or trade; and
G.R No. L-23004 June 30, 1965
(c) the investor's right to choose where to buy or to
 This is a review of the resolution of the sell, and his privilege to select the brokers in his
Securities and Exchange Commission which employment. 13
would deny the Makati Stock Exchange, Inc.,
permission to operate a stock exchange And no extended elucidation is needed to conclude
unless it agreed not to list for trading on its that for a licensing officer to deny license solely on
board, securities already listed in the Manila the basis of what he believes is best for the
Stock Exchange. economy of the country may amount to
 Objecting to the requirement, Makati Stock regimentation or, in this instance, the exercise of
Exchange, Inc. contends that the undelegated legislative powers and discretion.
Commission has no power to impose it and
that; anyway, it is illegal, discriminatory and Thus, it has been held that where the licensing
unjust. statute does not expressly or impliedly authorize
the officer in charge, he may not refuse to grant a
Issue: Whether the Commission may "in the public license simply on the ground that a sufficient
interest" prohibit (or make impossible) the number of licenses to serve the needs of the public
establishment of another stock exchange (besides have already been issued. (53 C.J.S. p. 636.)
the Manila Stock Exchange), on the ground that the
operation of two or more exchanges adversely
affects the public interest.

Ruling:

The Legislature has specified the conditions under

which a stock exchange may legally obtain a permit
(sec. 17, Securities Act); it is not for the Commission
to impose others. If the existence of two competing
exchanges jeopardizes public interest — which is
doubtful — let the Congress speak. 12 Undoubtedly,
the opinion and recommendation of the
Commission will be given weight by the Legislature,
in judging whether or not to restrict individual
enterprise and business opportunities. But until
otherwise directed by law, the operation of
exchanges should not be so regulated as practically
to create a monopoly by preventing the
establishment of other stock exchanges and
thereby contravening:

(a) the organizers' (Makati's) Constitutional right to

equality before the law;

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
People vs Santos

Facts: Issue: Whether Augusta Santos Section 28 Order

No. 2 relative to fish and game, issued by the
 The herein accused and appellee Augusto A. Secretary of Agriculture is valid.
Santos is charged with having ordered his
fishermen to manage and operate the Ruling:
motor launches Malabon II and Malabon Ill
registered in his name and to fish, loiter and Act No. 4003 contains no similar provision
anchor within three kilometers of the shore prohibiting boats not subject to license from fishing
line of the Island of Corregidor over which within three kilometers of the shore line of islands
jurisdiction is exercised by naval and military and reservations over which jurisdiction is exercised
authorities of the United States, without by naval and military authorities of the United
permission from the Secretary of States, without permission from the Secretary of
Agriculture and Commerce. Agriculture and Commerce upon recommendation
of the military and naval authorities concerned.
Section 28 of Administrative Order No. 2 relative to Inasmuch as the only authority granted to the
fish and game, issued by the Secretary of Secretary of Agriculture and Commerce, by section
Agriculture and Commerce, provides as follows: 4 of Act No. 4003, is to issue from time to time such
instructions, orders, rules, and regulations
28. Prohibited fishing areas. — No boats consistent with said Act, as may be necessary and
licensed in accordance with the provisions proper to carry into effect the provisions thereof
of Act No. 4003 and this order to catch, and for the conduct of proceedings arising under
collect, gather, take, or remove fish and such provisions; and inasmuch as said Act No. 4003,
other sea products from Philippine waters as stated, contains no provisions similar to those
shall be allowed to fish, loiter, or anchor contained in the above quoted conditional clause of
within 3 kilometers of the shore line of section 28 of Administrative Order No. 2, the
islands and reservations over which conditional clause in question supplies a defect of
jurisdiction is exercised by naval or military the law, extending it. This is equivalent to legislating
authorities of the United States, particularly on the matter, a power which has not been and
Corregidor, Pulo Caballo, La Monja, El Fraile, cannot be delegated to him, it being exclusively
and Carabao, and all other islands and reserved to the then Philippine Legislature by the
detached rocks lying between Mariveles Jones Law, and now to the National Assembly by
Reservation on the north side of the the Constitution of the Philippines. Such act
entrance to Manila Bay and Calumpan Point constitutes not only an excess of the regulatory
Reservation on the south side of said power conferred upon the Secretary of Agriculture
entrance: Provided, That boats not subject and Commerce, but also an exercise of a legislative
to license under Act No. 4003 and this order power which he does not have, and therefore said
may fish within the areas mentioned above conditional clause is null and void and without
only upon receiving written permission effect.
therefor, which permission may be granted
by the Secretary of Agriculture and
Commerce upon recommendation of the
military or naval authorities concerned.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
FORTICH VS. CORONA (G.R. No. 131457, April 24, 1998) further declared that the March 29, 1996 OP decision had
already become final and executory.
Facts:
On October 9, 1997, some alleged farmer-beneficiaries began
The Provincial Development Council (PDC) of Bukidnon, their hunger strike in front of the DAR Compound in Quezon
headed by Governor Carlos O. Fortich, passed Resolution No. City to protest the OP Decision of March 29, 1996. On
6, dated January 7, 1993, designating certain areas along November 7, 1997, the Office of the President resolved the
Bukidnon-Sayre Highway as part of the Bukidnon Agro- strikers’ protest by issuing the so-called “Win/Win” Resolution
Industrial Zones where the subject property is situated. penned by then Deputy Executive Secretary Renato C. Corona.
Pursuant to Section 20 of R.A. No. 7160, otherwise known as The said Resolution modified the approval of the land
the Local Government Code, the Sangguniang Bayan of conversion to agro-industrial area only to the extent of forty-
Sumilao, Bukidnon, on March 4, 1993, enacted Ordinance No. four (44) hectares, and ordered the remaining one hundred
24 converting or re-classifying 144 hectares of land in Bgy. San (100) hectares to be distributed to qualified farmer-
Vicente, said Municipality, from agricultural to beneficiaries.
industrial/institutional with a view of providing an
opportunity to attract investors who can inject new economic The petitioners cried foul. They filed a case to the Supreme
vitality, provide more jobs and raise the income of its people. Court urging it to annul and set aside the “Win-Win”
Resolution and to enjoin respondent Secretary Ernesto D.
During the public consultation, the people of the affected Garilao of the Department of Agrarian Reform from
barangay rallied behind their respective officials in endorsing implementing the said Resolution. The petitioners further
the project. Notwithstanding the foregoing favorable alleged that respondent then Deputy Executive Secretary
recommendation, however, on November 14, 1994, the DAR, Renato C. Corona “committed grave abuse of discretion and
thru Secretary Garilao, invoking its powers to approve acted beyond his jurisdiction when he issued the questioned
conversion of lands under Section 65 of R.A. No. 6657, issued Resolution.
an Order denying the instant application for the conversion of
the subject land from agricultural to agro-industrial and, Issue:
instead, placed the same under the compulsory coverage of
CARP and directed the distribution thereof to all qualified Whether the final and executory Decision dated March 29,
beneficiaries. 1996 can still be substantially modified by the “Win-Win”
Resolution.
The DAR Secretary ordered the DAR Regional Director “to
proceed with the compulsory acquisition and distribution of Held:
the property.”Governor Carlos O. Fortich of Bukidnon
appealed the order of denial to the Office of the President and NO. The Supreme Court held that:
prayed for the conversion/reclassification of the subject land
as the same would be more beneficial to the people of
1. The rules and regulations governing appeals to the
Bukidnon.
Office of the President of the Philippines are
embodied in Administrative Order No. 18. Section 7
In resolving the appeal, the Office of the President, through thereof provides:
then Executive Secretary Ruben D. Torres, issued a Decision in
OP Case No. 96-C-6424, dated March 29, 1996, reversing the
SEC. 7. Decisions/resolutions/orders of the Office of
DAR Secretary’s decision. OP found that the instant
the President shall, except as otherwise provided for by
application for conversion by the Municipality of Sumilao,
special laws, become final after the lapse of fifteen
Bukidnon is impressed with merit. To be sure, converting the
(15) days from receipt of a copy thereof by the parties,
land in question from agricultural to agro-industrial would
unless a motion for reconsideration thereof is filed
open great opportunities for employment and bring about
within such period.
real development in the area towards a sustained economic
growth of the municipality. On May 20, 1996, DAR filed a
Only one motion for reconsideration by any one party
motion for reconsideration of the OP decision. However, on
shall be allowed and entertained, save in exceptionally
June 23, 1997, an Order was issued by then Executive
meritorious cases.
Secretary Ruben D. Torres denying DAR’s motion for
reconsideration for having been filed beyond the
reglementary period of fifteen (15) days. The said order
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
 When the Office of the President issued the Order
dated June 23,1997 declaring the Decision of March 29,
1996 final and executory, as no one has seasonably
filed a motion for reconsideration thereto, the said
Office had lost its jurisdiction to re-open the case, more
so modify its Decision. Having lost its jurisdiction, the
Office of the President has no more authority to
entertain the second motion for reconsideration filed
by respondent DAR Secretary, which second motion
became the basis of the assailed “Win-Win” Resolution.
Section 7 of Administrative Order No. 18 and Section 4,
Rule 43 of the Revised Rules of Court mandate that only
one (1) motion for reconsideration is allowed to be
taken from the Decision of March 29, 1996. And even if
a second motion for reconsideration was permitted to
be filed in “exceptionally meritorious cases,” as
provided in the second paragraph of Section 7 of AO 18,
still the said motion should not have been entertained
considering that the first motion for reconsideration
was not seasonably filed, thereby allowing the Decision
of March 29, 1996 to lapse into finality. Thus, the act
of the Office of the President in re-opening the case and
substantially modifying its March 29,1996 Decision
which had already become final and executory, was in
gross disregard of the rules and basic legal precept that
accord finality to administrative determinations."

2. The orderly administration of justice requires that the

judgments/resolutions of a court or quasi-judicial body
must reach a point of finality set by the law, rules and
regulations. The noble purpose is to write finis to
disputes once and for all. This is a fundamental
principle in our justice system, without which there
would be no end to litigations. Utmost respect and
adherence to this principle must always be maintained
by those who wield the power of adjudication. Any act
which violates such principle must immediately be
struck down.

Therefore, the assailed “Win-Win” Resolution which

substantially modified the Decision of March 29, 1996 after it
has attained finality, is utterly void

Notes: Act No. 4003

"Fisheries Act" Approved December 5, 1932 .
AN ACT TO AMEND AND COMPILE THE LAWS RELATING TO
FISH AND OTHER AQUATIC RESOURCES OF THE PHILIPPINE
ISLANDS, AND FOR OTHER PURPOSES.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
US vs. Panlilio (G.R. No. L-9876 December 8, 1914) Issue:

Facts: Whether the accused may be convicted for violation of

the quarantine order issued by the Director of
Act No. 1760 provides that the following acts of any Agriculture, assuming there was a violation.
person, firm or corporation are unlawful:
Held:
1. to ship or otherwise bring into the Philippine
Islands any animal suffering from, infected with, No. The court held that:
or dead of any dangerous communicable
disease, or any of the effects pertaining to such Section 6 of the Act simply authorizes the Director of
animal which are liable to introduce such Agriculture to do certain things, among them, paragraph
disease into the Philippine Islands; (c) "to require that animals which are suffering from
2. to expose such animal either alive or dead on dangerous communicable diseases or have been
any public road or highway where it may come exposed thereto be placed in quarantine at such place
in contact with other domestic animals; and and for such time as may be deemed by him necessary
3. to transport in any form without a certificate to prevent the spread of the disease." Nowhere in the
issued by authority of the Director of Agriculture law, however, is the violation of the orders of the Bureau
whenever the Secretary of the Interior shall of Agriculture prohibited or made unlawful, nor is there
declare that a dangerous communicable animal provided any punishment for a violation of such orders.
disease prevails in any island, province, Section 8 provides that "any person violating any of the
municipality, township, or settlement and that provisions of this Act shall, upon conviction, be punished
there is danger of spreading such disease by a fine of not more than one thousand pesos, or by
imprisonment for not more than six months, or by both
Pursuant to the said Act, the Director of Agriculture such fine and imprisonment, in the discretion of the
issued an order that all of his carabaos in the barrio of court, for each offense." A violation of the orders of the
Masamat, municipality of Mexico, Pampanga Province, Bureau of Agriculture, as authorized by paragraph (c),
had been exposed to the disease commonly known as is not a violation of the provision of the Act. The orders
rinderpest, and that said carabaos were accordingly of the Bureau of Agriculture, while they may possibly
declared under quarantine, and were ordered kept in a be said to have the force of law, are statutes and
corral designated by an agent of the Bureau of particularly not penal statutes, and a violation of such
Agriculture and were to remain there until released by orders is not a penal offense unless the statute itself
further order of the Director of Agriculture. However, it somewhere makes a violation thereof unlawful and
was alleged that Adriano Panlilio, illegally and penalizes it. Nowhere in Act No. 1760 is a violation of
voluntarily and without being authorized to do so, and the orders of the Bureau of Agriculture made a penal
while the quarantine against said carabaos was still in offense, nor is such violation punished in any way
force, permitted and ordered said carabaos to be taken therein.”
from the corral in which they were then quarantined and
that by virtue of said orders of the accused, his servants
and agents took the said carabaos from the said corral
and drove them from one place to another for the
purpose of working them.

Nowhere in the Act is the violation of the order of

Bureau of Agriculture prohibited or made unlawful, nor
is there provided any punishment for a violation of such
order.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
K.S. YOUNG, ET AL., plaintiffs-appellees, vs. JAMES J.
RAFFERTY, Collector of Internal Revenue G.R. No. L-
10951

FACTS:

Section 6(j) of the Internal Revenue Act (Act No.

2239) authorizes the Collector of Internal Revenue
to specify the manner in which the proper books of
accounts shall be kept. Pursuant thereto, the
Collector of Internal Revenue issued a circular letter
requiring every merchant and manufacturer, to keep
a record of his daily sales either in English or in the
Spanish language, and providing that any violation
or failure to comply with the provisions of the circular
will subject the offender to prosecution under the
provisions of Section 185 of Act No. 2339.

ISSUE:

Is the consular letter in question within the scope

and purview of the authority delegated by Act No.
2339?

HELD:

No. (1) Keeping of books in any particular language

not required by law. ~ 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 books, in the tabulated form
specified in the circular. But the law does not
provide nor require that the books be kept in any
particular language.

(2) keeping of books in any language allowed by

law. ~ No one will deny that sales could be recorded
in a bound volume as is specified using the
tabulated form prescribed by the Collector in any
modern language.

In other words, all the information could be recorded

in the designated book in the required form in
Chinese or in local dialect or in some other
languages as accurately as it could be recorded in
English or Spanish.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
CELIA S. VDA. DE HERRERA vs. EMELITA property. The law does not vest jurisdiction on the
BERNARDO, EVELYN BERNARDO as Guardian of COSLAP over any land dispute or problem.
Erlyn, Crislyn and Crisanto Bernardo (G.R. No.
170251) In the instant case, the COSLAP has no jurisdiction
over the subject matter of respondents' complaint. The
FACTS: present case does not fall under any of the cases
enumerated under Section 3, paragraph 2 (a) to (e) of
Respondents heirs of Crisanto S. Bernardo filed a E.O. No. 561. The dispute between the parties is not
complaint before the Commission for the Settlement of critical and explosive in nature, nor does it involve a
Land Problems (COSLAP) against petitioner for large number of parties, nor is there a presence or
interference and trespassing over a portion of a parcel of emergence of social tension or unrest. It can also
land. Petitioner alleged that he inherited his property from hardly be characterized as involving a critical
his father who bought from a certain Domingo Villaran. situation that requires immediate action.
The COSLAP ruled that respondents have a rightful claim
over the subject property. The Court of Appeals affirmed ~
the ruling. Hence, petitioner elevated the case to the
Supreme Court.
It is axiomatic that the jurisdiction of a tribunal, including
a quasi-judicial officer or government agency, over the
ISSUE:
nature and subject matter of a petition or complaint is
determined by the material allegations therein and the
Whether or not the COSLAP has jurisdiction to decide the character of the relief prayed for, irrespective of
question of ownership between the parties. whether the petitioner or complainant is entitled to any or
all such reliefs.
HELD:
Since the COSLAP has no jurisdiction over the action, all
No. Administrative agencies, like the COSLAP, are the proceedings therein, including the decision
tribunals of limited jurisdiction that can only wield rendered, are null and void.2 A judgment issued by a
powers which are specifically granted to it by its quasi-judicial body without jurisdiction is void. It
enabling statute.1 Under Section 3 of E.O. No. 561, the cannot be the source of any right or create any
COSLAP has two options in acting on a land dispute or obligation.3 All acts performed pursuant to it and all
problem lodged before it, to wit: claims emanating from it have no legal effect.4 Having
no legal effect, the situation is the same as it would be as
(a) refer the matter to the agency having appropriate if there was no judgment at all. It leaves the parties in the
jurisdiction for settlement/resolution; or (b) assume position they were before the proceedings.
jurisdiction if the matter is one of those enumerated in
paragraph 2 (a) to (e) of the law, if such case is critical
and explosive in nature, taking into account the large
number of parties involved, the presence or emergence
of social unrest, or other similar critical situations
requiring immediate action. In resolving whether to
assume jurisdiction over a case or to refer the same to
the particular agency concerned, the COSLAP has to
consider the nature or classification of the land involved,
the parties to the case, the nature of the questions raised,
and the need for immediate and urgent action thereon to
prevent injuries to persons and damage or destruction to

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
CATURA vs CIR ISSUE: Whether or not the Court acted beyond its power, when it
ordered delivery and deposit of Association's book of accounts, bank
G.R. No. L-27392 January 30, 1971 accounts, pass books, union funds, receipts, vouchers and other
documents related to the finances

FACTS: Celestino Tabaniag as well as other employees HELD:

constituting more than ten percent of the entire membership of
such labor organization filed a complaint against Pablo Catura
and Luz Salvador, the President and Treasurer, respectively, of No, the Court did not act beyond its power when it called
the Philippine Virginia Tobacco Administration Employees for the exercise of the statutory power of investigation by
Association, a legitimate labor organization duly registered. requiring the petitioners to deliver and deposit with the
That during their tenure, they were responsible for unauthorized Court all of its book of accounts, bank accounts, pass
disbursement of union funds with complainants on various books, union funds, receipts, vouchers and other
occasions and that when demanded from them a full and documents related to its finances at the hearing of the
detailed report of all financial transaction of the records of the
petition before it on January 3, 1967.
financial activities of the union open to inspection by the
members, they refused.
The complaint against petitioners as President and
The executive board of the said labor organization called for a Treasurer of the union, specifically recited an
general membership meeting so that Pablo Catura and Luz unauthorized disbursement of union funds as well as the
Salvador could be confronted about the status of the union failure to make a full and detailed report of financial
funds. Pablo Catura, as President cancelled the meeting. The transactions of the union and to make the book of
same was reiterated but there was no response. The members accounts and other records of its financial activities open
then referred the matter to the Department of Labor which to inspection by the member. The matter was deemed
issued subpoenas for the presentation of book accounts but serious enough by the prosecutor of respondent
without success. After setting forth that complainants had Court to call for the exercise of the statutory power
exhausted all remedies provided in the union's constitution and
by-laws, which were all unavailing, the complaint sought, after
of investigation to substantiate the alleged violation
due hearing and judgement, to declare present petitioners, as so as to assure that the rights and conditions of
respondents, guilty of unfair labor practice under the above membership in a labor organization as specifically
provision of the Industrial Peace Act, for them to cease and set forth in Section 17 be respected.
desist from further committing such unfair labor practice
complained of, and to render a full and detailed report of all It cannot be said that such a requirement is beyond the
financial transactions of the union as well as to make the book
statutory power conferred. If it were otherwise, the
of accounts and other records of these financial activities open
to inspection by the members.2 specific provisions of law allegedly violated may not be
effectively complied with. The authority to investigate
might be rendered futile if respondent Court could be held
Thereafter, respondent Celestino Tabaniag and the other
members sought an injunction to prevent Pablo Catura from
as having acted contrary to law. To paraphrase Justice
taking his oath of office after being re-elected in view of his Laurel, the power to investigate, to be conscientious and
alleged persistence in the abuse of his authority in the rational at the very least, requires an inquiry into existing
disbursement of union funds as well as his refusal to make a full facts and conditions. The documents required to be
and detailed report of all financial transactions of the union. produced constitutes evidence of the most solid
character as to whether or not there was a failure to
Instead of granting the injunction sought, the order issued by comply with the mandates of the law. It is not for this
Associate Judge Joaquin M. Salvador limited itself to requiring Court to whittle down the authority conferred on
and directing "personally the respondents Pablo Catura and administrative agencies to assure the effective
Luz Salvador, president and treasurer, respectively, of the administration of a statute, in this case intended to
Philippine Virginia Tobacco Administration Employees' protect the rights of union members against its
Association, to deliver and deposit to this Court all the said officers. The matter was properly within its cognizance
Association's book of accounts, bank accounts, pass books,
union funds, receipts, vouchers and other documents related to
and the means necessary to give it force and
the finances of the said labor union. There was a motion for effectiveness should be deemed implied unless the
reconsideration on January 2, 1967 by now petitioners Pablo power sought to be exercised is so arbitrary as to trench
Catura and Luz Salvador on the ground that they were not upon private rights of petitioners entitled to priority. No
heard before such order was issued, which moreover in their such showing has been made; no such showing can be
opinion was beyond the power of respondent Court. With made. To repeat, there should be no question about the
Associate Judge Ansberto P. Paredes dissenting, the order was correctness of the order herein challenged
sustained in a resolution by the Court en banc on February 28,
1967. Hence the present petition filed.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
G.R. Nos. 167274-75 July 21, 2008 general rule of requiring adherence to the letter in
construing statutes applies with peculiar strictness to tax
COMMISSIONER OF INTERNAL REVENUE, Petitioner, laws and the provisions of a taxing act are not to be
extended by implication.
vs.
The Government is not exempt from the
FORTUNE TOBACCO CORPORATION, Respondent. application of solutio indebiti. Indeed, the taxpayer
expects fair dealing from the Government, and the latter
has the duty to refund without any unreasonable delay
what it has erroneously collected. If the State expects its
Facts: Fortune Tobacco Corporation, herein respondent, taxpayers to observe fairness and honesty in paying
is a manufacturer/producer of several cigarette brands. their taxes, it must hold itself against the same standard
On the other hand, herein Petitioner, Commissioner of in refunding excess (or erroneous) payments of such
Internal Revenue is a domestic corporation duly taxes. It should not unjustly enrich itself at the expense
organized and existing under and by virtue of the laws of of taxpayers. And so, given its essence, a claim for tax
the Republic of the Philippines. Fortune Tobacco was refund necessitates only preponderance of evidence for
granted a tax refund or tax credit representing specific its approbation like in any other ordinary civil case.
taxes erroneously collected from its tobacco products.
The tax refund is being re-claimed by the Commissioner
of Internal Revenue in this petition.

Issue: Whether or not petitioner is entitled to a refund

as alleged overpaid excise tax for the month of January
2000?

Held:

Yes. Fortune Tobacco is entitled to a refund.

Fortune Tobaccos claim for refund is premised on its
erroneous payment of the tax, or better still the
government’s exaction in the absence of a law.

Tax refunds (or tax credits), on the other hand,

are not founded principally on legislative grace but on
the legal principle which underlies all quasi-contracts
abhorring a person’s unjust enrichment at the expense
of another. The dynamic of erroneous payment of tax
fits to a tee the prototypic quasi-contract, solutio
indebiti, which covers not only mistake in fact but also
mistake in law.

In the case at bar, the rule in the interpretation

of tax laws is that a statute will not be construed as
imposing a tax unless it does so clearly, expressly, and
unambiguously. A tax cannot be imposed without clear
and express words for that purpose. Accordingly, the

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
G.R. No. L-6791 March 29, 1954
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
QUE PO LAY, defendant-appellant.

Facts:

This is an appeal raised by Que Po Lay based on

the claim that Circular #20 was not published in the
Official Gazette prior to the act or omission imputed by
the appellant. Under C.A. 638 and Act 2930 both
require that such circular be published in the Oficial
Gazette, but Solicitor General contends that the two
acts merely enumerate and make a list of what should
be published in the Official Gazette for guidance of the
different branches of the government.

Issue:

Whether or not such circular should be

published?

Held:

Yes. The question of non publication is

fundamental and decisive if as a matter of fact circular
#20 had not been published as required by law before
its violation then in the eyes of the law there was no such
circular to be violated consequently appellant
committed no violation on the circular nor committed
any offense.

Under the provisions of the old and new civil

code both requires publication on the Official Gazette to
be binding, although such circular of the central bank is
not a statute or law but it has a penal sanction for its
violation thus having the force and effect of the law
which should be published before becoming effective.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Phil. Lawyer’s Association vs AGRAVA application of other laws and legal principles, as
well as the existence of facts to be established
FACTS: in accordance with the law of evidence and
procedure.
 Respondent Director issued a circular
 The above provisions of Section 78 certainly and
announcing that he had scheduled for an
by far, are different from the provisions of the
examination for the purpose of determining
United States Patent Law as regards authority to
who are qualified to practice as patent attorneys
hold examinations to determine the
before the Philippines Patent Office. The
qualifications of those allowed to practice
petitioner contests that one who passed the bar
before the Patent Office.
examinations and licensed by the Supreme
 In conclusion, we hold that under the present
Court are duly qualified to practice before the
law, members of the Philippine Bar authorized
Philippine Patent Office.
by this Tribunal to practice law, and in good
 Respondent answered that the prosecution of
standing, may practice their profession before
patent cases does not involve entirely and
the Patent Office, for the reason that much of
purely the practice of law but includes the
the business in said office involves the
application of scientific and technical knowledge
interpretation and determination of the scope
and training.
and application of the Patent Law and other
 Respondent also stated Sec. 78 of the Patent
laws applicable, as well as the presentation of
Law of the Philippines which stated that the
evidence to establish facts involved; that part of
“Director, subject to the approval of the Sec. of
the functions of the Patent director are judicial
Justice, shall promulgate the necessary rules
or quasi-judicial, so much so that appeals from
and regulations, not inconsistent with law, for
his orders and decisions are, under the law,
the conduct of all business in the Patent Office.”
taken to the Supreme Court.

ISSUE:  For the foregoing reasons, the petition for

prohibition is granted and the respondent
 WON the Director of Patents is allowed to hold Director is hereby prohibited from requiring
an examination even if they are already member members of the Philippine Bar to submit to an
of the Bar? examination or tests and pass the same before
being permitted to appear and practice before
HELD: the Patent Office. No costs.

 Although the transaction of business in the

Patent Office involves the use and application of
technical and scientific knowledge and training,
still, all such business has to be rendered in
accordance with the Patent Law, as well as other
laws, including the Rules and Regulations
promulgated by the Patent Office in accordance
with law.
 Not only this, but practice before the Patent
Office involves the interpretation and

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
MANUEL VS GENERAL AUDITING OFFICE administrative order supplant the plain and
explicit statutory command.
FACTS:  A rule is binding on the courts as the procedure
fixed for its promulgation is followed and its
 Benito Manuel who was Mayor of Lingayen,
scope is within the statutory power granted by
Pangasinan applied for retirement.
the legislature, even if the courts are not in
 He sought for the commutation of his vacation
agreement with the policy stated therein or its
and sick leave wherein he filed a memorandum
innate wisdom.
to the General Auditing Office stating that he is
entitled to unused vacation and sick leave  Nothing can be clearer therefore than that the
earned for a period of 10 years and 7 months. claim of petitioner to a commutation of his
 The General Auditing Office ruled that the vacation and sick leave not exceeding ten (10)
application of the petitioner could not be months must be upheld, inasmuch as the facts
show that the total amount sought to be paid
allowed in audit.
to him was precisely in accordance with the
controlled legal provisions. The ruling now on
ISSUE: review must be versed and petitioner's plea
granted.
 WON petitioner is entitled to the commutation
of his vacation and sick leaves.

HELD:

 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 to his
credit provided that it shall in no case exceed
ten (10) months.
 There cannot be the least doubt therefore that
the petitioner, who 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
vacation and sick leave.
 If, however, to be considered as having
pertinence and relevance, it cannot as an

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Evangelista vs Jarencio, 68 SCRA 99 (1975) directing, for determining general policy, for
recommending legislation, and for the purpose
Importance of administrative investigations no more specific than illuminating obscure ares
to find out what if anything should be done. An
Facts: adminstrative agency may be authorized to
make investigations, not only in proceedings of
• The President of the Philippines created the a legislative or judicial nature, but alos in
Presidential Agency on Reforms and proceeding whose sole purpose is to obtain
Government Operations (PARGO). information upon which future action of a
legislative or judicial nature may be taken and
• The President vested in the Agency all the
may require the attendance of witnesses in
powers of an investigating committee including
proceedings of a purely investigatory nature. It
the power to summon witnesses by subpoena
may conduct general inquiries into evils calling
dues tecum, administer oaths, testimony or
for correction, and to report findings to
evidence relevant to the investigation.
appropriate bodies and make
• Petitioner Evangelista as Undersecretary of the recommendations for actions.
Agecy issued to respondent Manalasta the
• administrative agencies may enforce
Acting City Public Service Officer of Manila, a
subpoenas issued in the course of
subpoena ad testificandum commanding him
investigations, whether or not adjudication is
to appear as witness a th office of PARGO to
involved, and whether or not probable cause is
declare and testify on a pending investigations.
shown and even before the issuance of a
• Instead of obeying the subpoena respondent complaint. The purpose of the subpoena is to
filed with CFI of Manila a petition for discover evidence, not to prove a pending
prohibition, certiorari on the case and assailed charge, but upon which to make one if the
its legality discovered evidence so justifies.

Issue: • Subpoena meets the requirements for

enforcement if the inquiry is a.) within the
Whether the Agency, acting thru its officials, enjoys th authority of the agency ,b.) the demand is not
authority to issue subpoena in its conduct of fact- too definite , c.) the information is reasonably
finding investigations? relevant.

• There is no doubt that the fact-finding

Held:
investigations being conducted by the Agency
Yes. upon sworn statements implicating certain
officials of the City Government of Manila in
• The life blood of the administrative process is anomalous transactions fall within the Agency's
the flow of fact. the gathering, the organization sphere of authority and that the information
and the analysis of evidence. Investigations are sought to be elicited from respondent
useful for all administrative function, not only Manalastas, of which he is claimed to be in
for rule-making, adjudication, and licensing, but possession is reasonably relevant to the
also for prosecuting, for supervising and investigations.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Radio Communications of the Philippines vs BOC necessary implication conferred upon it by
statues.
Facts:
• One of these powers provided by law is the
• Two complaints were filed by complainants power to issue certificate of public convenience
Deigo Morales and Pacifica Innocencia against and which does not carry with it the power of
RCPI for its failure to transmit to them supervision and control over matters not related
telegrams informing them of the deaths of thereto or performance therewith in the matter
close relatives which accordings to them suitable to promote public interest.
caused personal injury and inconvenience and
• It is clear that petitioner has not been charge of
prays for damages.
any violations or failure to comply with the
• After hearing, the respondents BOC in both terms and conditions of its certificate of public
cases held that the services renedered by convenience or of any order, decision,
petitioners was inadequate and unsatisfactory regulation of respondent Board.
and imposed upon petitioners in each case a
• The proper forum for complainants to ventilate
disciplinary fine of P200.
their grievances for the proper recovery of
damages against petitioner should be in the
Issue:
Courts and not in the respondent BOC.
Whether respondent Board has no jurisdiction to
entertain and take congizance of complaints for injury
caused by breach of contractual obligatios arising from
negligence? and quasi-delict which should be ventilated
in proper courts?

Held:

No. BOC has no jurisdiction.

• The court stated that:

"There can be no jurisdiction then for the BOC

imposing fines in there two petitions. The law cannot be
any clearer. The only power if possessed over radio
companies as noted was to fix rates. It could not take to
task a radio company for any negligence or misfeasance.
It was not vested with such authority. That it did then in
these two petitions lacked the impress of validity."

• The functions of BOC are limited and

administrative in nature and it has only
jurisdiction and power as are expressly or by

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Ollada vs Sec of Finance respect from the Courts. No one is better qualified
109 Phil. 1072 to interpret the intent behind the revenue regulations
than the authority that issued them.
The Secretary of Finance expressly authorized the Granting that the subsequent permission to use old
non-retroactivity of regulation which amended a bookkeeping forms was incompatible with the new
previous one. regulation, such incompatibility would not render the
permission illegal and void since the Secretary may,
FACTS at any time, amend or revoke any of the regulations
Under Sec.334 (now Sec.232) of the National he issued so long as it is in consonance with the
Internal Revenue Code, all corporations, statute. The Secretary may change or repeal any of
companies, partnerships or persons required by law the regulations he issued as he may see fit.
to pay internal revenue taxes whose gross quarterly
sales, earnings, etc. do not exceed P5000 are
required to keep & use a simplified set of
Bookkeeping Records duly authorized by the Sec.
of Finance. Pursuant to such authority, the Sec. of
Finance promulgated Revenue Regulations No. V-
13 authorizing the use by the taxpayers whose
gross quarterly sales do not exceed P5000 a
simplified set of bookkeeping records.
The Secretary amended Revenue Regulations No.
V-13 by promulgating Revenue Regulations No. V-
43, which requires that simplified set of bookkeeping
records should be especially designed for each
class/kind of trade and prepared by a CPA. The new
regulation was not intended to have a retroactive
effect and, therefore, could not adversely affect
those who had already acquired an accrued right
under the old regulation.
A CPA prepared & devised his own simplified sets
of bookkeeping records under the new regulation.
He then instituted proceedings praying that
respondent financial officials be enjoined from
further accepting, authorizing, and tolerating the
public’s use of simplified sets of bookkeeping
records not prepared in accordance with the new
regulation.

ISSUE
Whether the Secretary of Finance acted within his
authority in not giving retroactive effect to Revenue
Regulations No. V-43.

HELD
Yes.
The Secretary if Finance’s Resolution that Revenue
Regulations No. V-43 was not intended to have
retroactive effect was fully within his powers and
authority and becomes part of the regulation itself.
The Resolution is not clearly unreasonable and
arbitrary, and is, thus, entitled to recognition &
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
IN RE CONTEMPT PROCEEDINGS AGAINST evidence" before he can apply to the courts for the
ARMANDO RAMOS, JESUS L. CARMELO, in his punishment of hostile witnesses. Such provisions are
capacity as Chairman of the Probe Committee, Office applicable to the City of Manila as these pertain to
of the Mayor of Manila, petitioner-appellant, vs. national bureaus or offices of the government.
ARMANDO RAMOS, respondent-appellee.
Petitioner contends that the Mayor of Manila has
FACTS: The Mayor of Manila issued an executive order the implied power to investigate city officials and
creating a committee "to investigate the anomalies involving the employees appointed by him to the end that the power
license inspectors and other personnel of the License expressly vested in him to suspend and remove such
Inspection Division of the Office of the City Treasurer and of the officials of employees may be justly and fairly exercised.
License and Permits Division of this Office (of the Mayor)." He
named Mr. Jesus L. Carmelo as chairman of said committee.
We agree with this proposition. But We do not agree with
the petitioner that a delegation of such power to
investigation implies also a delegation of the power to
In a statement given to investigators of the Office of
take testimony or evidence of witnesses whose
the Mayor, Armando Ramos, a private citizen working as a
bookkeeper in the Casa de Alba, admitted having appearance may be require by the compulsory process
misappropriated sums of money given to him by the owner of of subpoena.
Casa de Alba for the payment of the latter's taxes and that he
is used to entertain employees in the City Treasurer's office. Citing 50 Am. Jur. 449, petitioner contends that
With the information, the committee issued subpoenas to "the power of the investigation committee to issue
Ramos, in connection with an administrative case against compulsory process to secure the attendance of
Crisanta Estanislao but Ramos, refused to appear.
witnesses undoubtedly exists since only complimentary
to the power of the mayor to investigate, suspend and
Claiming that Ramos' refusal tended "to impede, remove city officers and employees, supra, is the
obstruct, or degrade the administrative proceedings," petitioner
recognized rule that where the statute grants a right, it
filed in the Court of First Instance of Manila a petition to declare
Armando Ramos in contempt. 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
The lower court held that there is no law empowering
committees created by municipal mayors to issue subpoenas of statutory, grant of power to a body. Here, We have
and demand that witnesses testify under oath. And to compel seen that whatever power may be claimed by petitioner's
Ramos to confirm this statement in the administrative case committee may only be traced to the power of the Mayor
against certain employees in the Office of the City Treasurer to investigate as implied from his power to suspend or
would be to compel him to give testimony that could be used remove certain city employees. There is no statutory
against him in a criminal case for estafa of which the owner of grant of power to investigate to petitioner's committee.
Casa de Alba was the offended party. From that decision,
petitioner appealed to this Court.
50 Am. Jur. Sec. 428, p. 450 itself admits an exception to
the rule invoked by the petitioner. Thus, it is stated that
Petitioner invokes Section 580 of the Revised
"where the liberty and property of persons are sought to
Administrative Code which provides for Powers incidental to
taking of testimony of administrative authorities. 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
ISSUE: Whether the power to investigate of the
those intended to be reached." Here, no less than the
committee includes the power to take testimony or liberty of Armando Ramos is involved in the claim of the
evidence of witnesses?
committee to the right to cite witnesses.

HELD: There is nothing said in the executive order of the

The rule is that Rule 64 (Contempt) 1 of the Rules
Mayor creating the committee about such a grant of
of Court applies only to inferior and superior courts and
power. All that the order gives to this body is the power does not comprehend contempt committed against
to investigate anomalies involving certain city employees.
administrative officials or bodies
Even granting that the Mayor has the implied power to
require the appearance of witnesses before him, the rule,
is that the Mayor cannot delegate this power to a body We hold, therefore, that petitioner's committee
like the committee of the petitioner. has no power to cite witnesses to appear before it and to
ask for their punishment in case of refusal.
One who invokes this provision of the law
(Section 580 of the Revised Administrative Code) must WHEREFORE, the decision of the Court of First Instance
first show that he has "authority to take testimony or of Manila is hereby affirmed, without pronouncement as
to costs.
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
WALTER E. OLSEN & CO., INC., petitioner, vs. Hence, petitioner filed a motion for judgment on
VICENTE ALDANESE, as Insular Collector of the pleadings.
Customs of the Philippine Islands, and W. TRINIDAD,
as Collector of Internal Revenue, respondents. ISSUE: Whether clause B of section 6 of Administrative
Order No. 35, known as "Tobacco Inspection
FACTS: Act No. 2613 entitled "an act to improve the Regulations," is valid?
methods of production and the quality of tobacco in the
Philippine and to develop the export trade therein." HELD: No. The court held clause B of section 6 of the Act
Empowers the Collector of Internal Revenue to establish to be null and void.
certain general and local rules respecting the
classification, marking and parking of tobacco for By the express terms and provisions of such
domestic sale or for exportation to the United States, and, rules and regulations promulgated by the Collector of
among other things, provide: Internal Revenue, it was his duty to refuse petitioner's
request, and decline the certificate or origin, because the
No leaf tobacco or cigars tendered were not of the specified kind, and we
manufactured tobacco shall be have a right to assume that he performed his official duty
exported from the Philippine Islands to as he understood it. After such refusal and upon such
the United States until it shall have grounds, it would indeed, have been a vain and useless
been inspected by the Collector of thing for the Collector of Internal Revenue to his
Internal Revenue or his duly authorized examined or inspected the cigars.
representative and found to be
standard for export ... Having refused to issue the certificate of origin
for the reason above assigned, it is very apparent that a
The Collector of Internal Revenue then request thereafter made examine or inspect the cigars
promulgated Administrative Order No. 35, known as would also have been refused.
"Tobacco Inspection Regulations," in which clause B of
section 6 provides: The motion for judgment on the pleadings is
sustained, and the writ will issue, as prayed for in the
To be classed as standard, petition, without costs. So ordered.
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 Note: Guys..nothing in the full text yung hinahanap ni
the product of the provinces of Cagayan, Atty. Guerrero na “may dating” na decision ng court. Mas
Isabela, or Nueva Vizcaya. The cigars inexplain pa ng court yung naging actions ng CIR based
must be well made, with suitable spiral sa clause B of section 6 of ng A.O. No. 35 na void nman.
wrapper and with long filler, etc. I’ll quote na lang De Leon p. 111 of Admin Law Book:
“The purpose and intent of the Legislature was that a
proper standard of the quality of tobacco should be fixed
and defined, and that all of those who produce tobacco
at the same standard should have equal rights and
The petitioner applied to the Collector of Internal opportunities. It was never intended that a standard
Revenue for a certificate of origin covering a consignment should be fixed which would limit the manufacture of
of 10,000 machine-made cigars to San Francisco, and as cigars for export to certain provinces of the Islands, or
the petitioner himself stated on making such application that the tobacco produced in one province should be
that the cigars sought to be exported must have been measured by another and different standard than the
manufactured from short-filler tobacco which was not the tobacco produced in any other province. That would
product of the provinces of Cagayan, Isabela, and Nueva amount to discrimination and class legislation, which
Vizcaya, said cigars were neither inspected nor even the Legislature, would not have the power to enact.”
examined by the Collector of Internal Revenue and were
rejected because they were not long-filler and were not
manufactured from tobacco grown in one of the three
provinces.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Philippines Interisland Shipping Association of the determination of the parties, the PPA jettisoned this
Phlippines vs CA 266 SCRA 489 policy and changed it to laissez-faire, something which
only the legislature, or whoever is vested with law-making
Facts: authority could do.

On Feb 3, 1986, President Ferdinand Marcos

(hereinafter PM) issued Executive Order 10885 which
increased the rates of the exisiting pilotage fees
previously fixed by the Philippine Ports Authority6 (PPA
hereinafter). PPA refused to enforce the said EO and,
instead, issued Memorandum Order No 43-867 (MO
hereinafter). PPA and Intervenors maintained that EO
1088 was merely an administrative issuance and could
be superseded by the MO by PPA. Moreover, to consider
EO 1088 as a statute would deprive PPA of its power to
fix pilotage rates as mandated under its charter.

Issue: W/N EO is constitutional

Decision:

NO. EO is in the nature of a law. PPA’s orders were in

the nature of subordinate legislation, promulgated in the
exercise of delegated power. As such, the orders can be
amended or revised by law, as the president did by
issuing the said EO. PM was authorizd under the 1973
Constitution to exercise legislative power. With the same
power conferred to him, he created PPA 8 and as PM can
delegate the rate fixing power to PPA, he could also
exercise the same in specific instances without
withdrawing the delegated power to PPA. EO 1088’s
legislative purpose is the rationalization of pilotage
service charges, through the imposition of uniform and
adjusted rates for foreign and coastwise veseels in all
Philippine Ports.

SC conclude that EO 1088 is a valid statute and PPA is

duty bound to comply with its provisions. PPA may
increase the rates but it may not drecease them below
those mandated by EO 1088. PPA cannot refuse to
implement EO 1088 or alter it as it did in issuing MC 43-
86.

Therefore, the policy was one of governmental regulation

of the pilotage business. By leaving the matter to the

5 7
Providing for uniform and modified rates for pilotage Fixing pilotage fees at rates lower than those provided in
services rendered to foreign and coastwise vessels in all EO 1088.
8
private and public ports. By Issuing PD 857.

6 Government entity specially charged with the financing,

management and operations of public ports throughout the
archipelago. – www.ppa.com.ph

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Interprovincial Auto Bus Co (IAB) vs CIR the various counties who have to do with the assessment
of property for taxation will knowingly violate the duties
Facts: imposed upon them by law.”

IAB9 was assessed, on the 194,406 stubs of the “As a logical outgrowth of the presumption in favor of the
receipts which did not state the value of the goods validity of assessments, when such assessments are
transported, by the Tax Agent with an assessed amount assailed, the burden of proof is upon the complaining
of Php 7,776.24. The assessed amount was computed party. It is incumbent upon the property owner clearly to
by assuming that the value of the goods covered by each show that the assessment was erroneous, in order to
of the reciprts amounted to more than Php 5.00, and relieve himself from it.”
assessed a Documentary Stamp Tax on each of the
194,406 stubs. Plaintiff demanded the refund of the
amount, and upon refusal, plaintiff filed the action
anchoring on the validity of the Regulation No. 2610 by
the Department of Finance, promulgated under the
Authority11 of Admin Code.

Issue: Is the Regulation No. 26 unconstitutional when it

created a presumption of liability to tax if the receipt fails
to state such value?

Held: NO. The regulation falls within the scope of the

administrative power of the Secretary of Finance, as
authorized in the Revised Administrative Code, because
it is essential to the strict enforcement and proper
execution of the law which it seeks to implement. Said
regulations have the force and effect of law. The
regulation impliedly required the statement of the value
of the goods in the receipts so that the collection of the
tax can be enforced. IAB failed to do and now claims the
unreasonableness of the provision as a basis for his
exemption.

“All presumptions are in favor of the correctness of tax

assessments. The good faith of tax assessors and the
validity of their actions are presumed. They will be
presumed to have taken into consideration all the f acts
to which their attention was called. No presumption can
be indulged that all of the public officials of the state in

9 transportation of merchandise or goods for the collection of fees therefor are

A common carrier engaged in transporting passengers and
considered as bills of lading, and the orginal thereof issued or used should
freight receipts.
bear the documentary stamp as provided by paragraphs (q) and (r) of section
1449 of the Administrative Code.”
10
“SEC. 121. Basis of the tax and affixture of stamps.—Bills of lading are
exempt from the documentary stamp tax imposed by paragraphs (q) and (r) 11
The Department Head shall have power to promulgate, whenever he may
of section 1449 of the Administrative Code when the value of the goods see fit to do so, all rules, regulations, orders, circulars, memorandums, and
shipped is P5 or less. Unless the bill of lading states that the goods are worth other instructions, not contrary to law, necessary to regulate the proper
P5 or less, it must be held that the tax is due, and internal revenue officers working and harmonious and efficient administration of each and all of the
will see to it that the tax is paid in all cases where the bill of lading does not offices and dependencies of his Department, and for the strict enforcement
state that the shipment is worth P5 or less.” and proper execution of the laws relative to matters under the jurisdiction
of said Department; but none of said rules or orders shall prescribe penalties
“SEC. 127. ‘Chits,’ memorandum slips, and other papers not in the usual for the violation thereof, except as expressly authorized by law. * * *."
commercial form of bills of lading, when used by common carriers in the
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies