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

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