Collector of Internal Revenue vs Antonio Campos Rueda

42 SCRA 23 Political Law Definition of State

In January 1955, Maria Cerdeira died in Tangier, Morocco (an international zone [foreign
country] in North Africa). At the time of her death, she was a Spanish citizen and was a
resident of Tangier. She however left some personal properties (shares of stocks and other
intangibles) in the Philippines. The designated administrator of her estate here is Antonio
Campos Rueda.

In the same year, the Collector of Internal Revenue (CIR) assessed the estate for
deficiency tax amounting to about P161k. Campos Rueda refused to pay the assessed
tax as he claimed that the estate is exempt from the payment of said taxes pursuant to
section 122 of the Tax Code which provides:

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

Campos Rueda was able to prove that there is reciprocity between Tangier and the
Philippines.

However, the CIR still denied any tax exemption in favor of the estate as it averred that
Tangier is not a state as contemplated by Section 22 of the Tax Code and that the
Philippines does not recognize Tangier as a foreign country.

ISSUE: Whether or not Tangier is a state.

HELD: Yes. For purposes of the Tax Code, Tangier is a foreign country.

A foreign country to be identified as a state must be a politically organized sovereign

community independent of outside control bound by penalties of nationhood, legally
supreme within its territory, acting through a government functioning under a regime of
law. The stress is on its being a nation, its people occupying a definite territory, politically
organized, exercising by means of its government its sovereign will over the individuals
within it and maintaining its separate international personality.

Further, the Supreme Court noted that there is already an existing jurisprudence
(Collector vs De Lara) which provides that even a tiny principality that of
Liechtenstein, hardly an international personality in the sense, did fall under the exempt
category provided for in Section 22 of the Tax Code. Thus, recognition is not necessary.
Hence, since it was proven that Tangier provides such exemption to personal properties
of Filipinos found therein so must the Philippines honor the exemption as provided for by
our tax law with respect to the doctrine of reciprocity.

Free Telephone Workers Union vs Minister of Labor

108 SCRA 757 Political Law Delegation of Power Completeness Test
In 1981, there was an ongoing labor dispute between the Free Telephone Workers
Union (the Union) and the Philippine Long Distance Company. Eventually, the Minister
of Labor (Blas Ople) assumed jurisdiction over the issue pursuant to Article 264 of the
Labor Code. The Union assailed the provisions of Article 264 as it averred that it is an
undue delegation of power by Congress to the Minister of Labor. They averred that
by granting discretion to the Minister of Labor to whether or not refer a labor dispute
for compulsory arbitration to the National Labor Relations Commission, it also
effectively granted the Minister to make or unmake the law on free collective
bargaining.
ISSUE: Whether or not such provision is an undue delegation of power.
HELD: No. In the first place, this issue is not yet ripe for adjudication as the Minister of
Labor was yet to take on the entirety of the case. There is still no ground to rule that
there is an unconstitutional application of the law.
The Union failed to make out a case of undue delegation of legislative power. There
could be, however, an unconstitutional application. For while the Constitution allows
compulsory arbitration, it must be stressed that the exercise of such competence
cannot ignore the basic fundamental principle and state policy that the state should
afford protection to labor. But as to whether or not there is an unconstitutional
application of the law that is yet to be determined since the Minister of Labor has not
yet made a factual determination of the labor dispute in issue.
There is no undue delegation in this case. The law in issue is complete and it set a
sufficient standard. The law cannot be any clearer, the coverage being limited to
strikes or lockouts adversely affecting the national interest.

Legaspi vs Secretary of Finance

Political Law Forms of Government

Legaspi, then incumbent member of the interim Batasang Pambansa, petitioned to

declare Presidential Decree 1840 granting tax amnesty and filing of statement of
assets and liabilities and some other purposes unconstitutional. He argued that said
decree was promulgated despite the fact that under the Constitution The Legislative
power shall be vested in a Batasang Pambansa (Sec. 1, Article VIII) and the President
may grant amnesty only with concurrence of the Batasang Pambansa.
ISSUE: Whether or not the President (PM) can issue such decrees.
HELD: It is to be observed that the original text mentions President (Prime Minister). This
is so because . . . The incumbent President of the Philippines shall be the Prime
Minister and he shall continue to exercise all his powers even after the interim
Batasang Pambansa is organized and ready to discharge its functions, and likewise
he shall continue to exercise his powers and prerogatives under the 1935 Constitution
and the powers vested in the President and the Prime Minister under this Constitution.
Parenthetically, the term Incumbent President employed in the transitory provisions
could only refer to President Ferdinand E. Marcos (Aquino vs. Commission on
Elections, 62 SCRA 275). After the April 7 amendments there exists no longer a
President (Prime Minister) but A President and A Prime Minister. They are now two
different offices which cannot be held by a single person not a transitory one but a
regular one provided for and governed by the main provisions of the newly amended
Constitution. Subsequent events accept the reality that we are no longer governed
by the transitory provisions of the Constitution. This form of government is essentially
parliamentary with presidential features.

Leopoldo Bacani vs National Coconut Corporation

100 Phil. 468 Political Law Two-fold Function of the Government Constituent vs
Ministrant Functions

Leopoldo Bacani and Mateo Matoto were court stenographers assigned in a court
in Manila. During the pendency of a particular case in said court, counsel for one of
the parties, National Coconut Corporation or NACOCO, requested said
stenographers for copies of the transcript of the stenographic notes taken by them
during the hearing. Bacani et al complied with the request and sent 714 pages and
thereafter submitted to said counsel their bills for the payment of their fees. The
National Coconut Corporation paid the amount of P564 to Bacani and P150 to
Matoto for said transcripts at the rate of P1 per page.
However, in January 1953, the Auditor General required Bacani et al to reimburse
said amounts on the strength of a circular of the Department of Justice. It was
expressed that NACOCO, being a government entity, was exempt from the payment
of the fees in question. Bacani et al counter that NACOCO is not a government entity
within the purview of section 16, Rule 130 of the Rules of Court. NACOCO set up as a
defense that the NACOCO is a government entity within the purview of section 2 of
the Revised Administrative Code of 1917 and, hence, it is exempt from paying the
stenographers fees under Rule 130 of the Rules of Court.
ISSUE: Whether or not NACOCO is a government entity.
HELD: No. Government owned and controlled corporations (GOCCs) do not acquire
the status of being part of the government because they do not come under the
classification of municipal or public corporation. Take for instance the NACOCO.
While it was organized with the purpose of adjusting the coconut industry to a
position independent of trade preferences in the United States and of providing
Facilities for the better curing of copra products and the proper utilization of
coconut by-products, a function which our government has chosen to exercise to
promote the coconut industry, it was, however, given a corporate power separate
and distinct from our government, for it was made subject to the provisions of our
Corporation Law in so far as its corporate existence and the powers that it may
exercise are concerned (sections 2 and 4, Commonwealth Act No. 518 the law
creating NACOCO). It may sue and be sued in the same manner as any other private
corporations, and in this sense it is an entity different from our government.
The Supreme Court also noted the constituent functions of the government.
Constituent functions are those which constitute the very bonds of society and are
compulsory in nature. According to U.S. President Woodrow Wilson, they are as
follows:
1. The keeping of order and providing for the protection of persons and property from
violence and robbery.
2. The fixing of the legal relations between man and wife and between parents and
children.
3. The regulation of the holding, transmission, and interchange of property, and the
determination of its liabilities for debt or for crime.
4. The determination of contract rights between individuals.
5. The definition and punishment of crime.
6. The administration of justice in civil cases.
7. The determination of the political duties, privileges, and relations of citizens.
8. Dealings of the state with foreign powers: the preservation of the state from
external danger or encroachment and the advancement of its international interests.
On the other hand, ministrant functions are those that are undertaken only by way of
advancing the general interests of society, and are merely optional. The most
important of the ministrant functions are: public works, public education, public
charity, health and safety regulations, and regulations of trade and industry. The
principles to consider whether or not a government shall exercise certain of these
optional functions are: (1) that a government should do for the public welfare those
things which private capital would not naturally undertake and (2) that a
government should do these things which by its very nature it is better equipped to
administer for the public welfare than is any private individual or group of individuals.

Agricultural Credit and Cooperative Financing Administration

vs Confederation of Unions in Government Corporations and
Offices
30 SCRA 649 Political Law Two-fold Function of the Government Free Enterprise
Ministrant vs Constituent Functions
In September 1961 a Collective Bargaining Agreement (CBA) was agreed upon by
labor unions (ASA and AWA) and ACCFA (Agricultural Credit and Cooperative
Financing Administration). The said CBA was supposed to be effective on July 1, 1962.
Due to non-implementation of the CBA the unions held a strike on October 25, 1962.
And 5 days later CUGCO (Confederation of Unions in Government Corporations and
Offices), the mother union of ASA and AWA filed a complaint against ACCFA due to
unfair labor practices, among others, which CUGCO was able to win in court.
In April 1963, ACCFA appealed the decision and while the appeal was pending,
Republic Act No. 3844 was passed which effectively turned ACCFA to ACA
(Agricultural Credit Administration). In March 1964, ASA and AWA then petitioned
that they may have sole bargaining rights with ACA. While this petition was not yet
decided upon, in the same month of March 1964, Executive Order No. 75 was also
passed which placed ACA under the Land Reform Project Administration (LRPA).
Notwithstanding the latest legislation passed, the trial court and the appellate court
ruled in favor of ASA and AWA and ruled that they have bargaining rights with ACA.
ISSUE: Whether or not ASA and AWA can be given sole bargaining rights with ACA.
HELD: No. The Unions have no bargaining rights with ACA. EO 75 placed ACA under
the LRPA and by virtue of RA 3844 the implementation of the Land Reform Program
of the government is a governmental function NOT a proprietary function. Being
such, ACA can no longer step down to deal privately with said unions as it may have
been doing when it was still ACCFA.
The Supreme Court also made a pronouncement which recognized the growing
complexities of modern society which have rendered the classification of the
governmental functions (ministrant and constituent) as unrealistic, if not obsolete.
Ministerial and governmental functions continue to lose their well-defined boundaries
and are absorbed within the activities that the government must undertake in its
sovereign capacity if it to meet the increasing social challenges of the times and
move towards a greater socialization of economic forces. Hence, gone are the days
where constituent functions are exclusively performed by the government and not
delegated to private institutions. In this case, a constituent function is left to be
performed by a private entity like ACA (formerly ACCFA).