ChanRobles™ Virtual Law Library™ | chanrobles.

com™  

Like 0 Tweet Share

Search

 
  Philippine Supreme Court Jurisprudence > Year 1956 > October 1956 Decisions > [G.R. No. L-9408. October 31, 1956.] EMILIO Y.
HILADO, Petitioner, vs. THE COLLECTOR OF INTERNAL REVENUE and THE COURT OF TAX APPEALS, Respondents.:
 

  Custom Search
Search
ChanRobles On-Line Bar Review
DebtKollect Company, Inc.
ChanRobles Intellectual Property Division
EN BANC
[G.R. No. L-9408.  October 31, 1956.]
EMILIO Y. HILADO, Petitioner, vs. THE COLLECTOR OF INTERNAL REVENUE and THE
COURT OF TAX APPEALS, Respondents.
DECISION
BAUTISTA ANGELO, J.:
On March 31, 1952, Petitioner filed his income tax return for 1951 with the treasurer of
Bacolod City wherein he claimed, among other things, the amount of P12,837.65 as a
deductible item from his gross income pursuant to General Circular No. V-123 issued by
the Collector of Internal Revenue. This circular was issued pursuant to certain rules laid
down by the Secretary of Finance On the basis of said return, an assessment notice
demanding the payment of P9,419 was sent to Petitioner, who paid the tax in monthly
installments, the last payment having been made on January 2, 1953.
Meanwhile, on August 30, 1952, the Secretary of Finance, through the Collector of Internal
Revenue, issued General Circular No. V-139 which not only revoked and declared void his
general Circular No. V- 123 but laid down the rule that losses of property which occurred
during the period of World War II from fires, storms, shipwreck or other casualty, or from
robbery, theft, or embezzlement are deductible in the year of actual loss or destruction of
said property. As a consequence, the amount of P12,837.65 was disallowed as a
deduction from the gross income of Petitioner for 1951 and the Collector of Internal
Revenue demanded from him the payment of the sum of P3,546 as deficiency income tax
for said year. When the petition for reconsideration filed by Petitioner was denied, he filed a
petition for review with the Court of Tax Appeals. In due time, this court rendered decision
affirming the assessment made by Respondent Collector of Internal Revenue. This is an
appeal from said decision.
It appears that Petitioner claimed in his 1951 income tax return the deduction of the sum
of P12,837.65 as a loss consisting in a portion of his war damage claim which had been
duly approved by the Philippine War Damage Commission under the Philippine
Rehabilitation Act of 1946 but which was not paid and never has been paid pursuant to a
notice served upon him by said Commission that said part of his claim will not be paid
until the United States Congress should make further appropriation. He claims that said
amount of P12,837.65 represents a “business asset” within the meaning of said Act which
he is entitled to deduct as a loss in his return for 1951. This claim is untenable.
To begin with, assuming that said a mount represents a portion of the 75% of his war
damage claim which was not paid, the same would not be deductible as a loss in 1951
because, according to Petitioner, the last installment he received from the War Damage
Commission, together with the notice that no further payment would be made on his

 
 
 
 
 
  October-1956 Jurisprudence               they were sustained because the taxpayers had prospects that losses would be
  
[G.R. No. L-9132. October 11, 1956.] THE PEOPLE OF THE
PHILIPPINES, Plaintiff-Appellant, vs. FELICIANO LAPASARAN, ET
AL., Defendants-Appellees.
[G.R. No. L-9245. October 11, 1956.] THE PEOPLE OF THE
PHILIPPINES, Plaintiff-Appellee, vs. DOMINADOR PANIS, Defendant,
ALLIANCE INSURANCE & SURETY CO., INC., Petitioner-Appellant.
[G.R. No. L-9257. October 17, 1956.] CARCAR ELECTRIC & ICE
PLANT CO., INC., Petitioner, vs. THE COLLECTOR OF INTERNAL
REVENUE, Respondent.
[G.R. No. L-8989. October 18, 1956.] NGO SHIEK, Petitioner-
Appellant, vs. COLLECTOR OF INTERNAL REVENUE, Respondent-
Appellee.
[G.R. No. L-10408. October 18, 1956.] SEVERINA MARABILLES,
ET AL., Plaintiff and Appellants, vs. ALEJANDRO QUITO and AIDA
QUITO, Defendants-Appellees.
[G.R. No. L-8780. October 19, 1956.] In the matter of the petition
of YU KONG ENG alias JOHN D. YOUNG, to be admitted a citizen of
the Philippines. YU KONG ENG alias JOHN D. YOUNG, Petitioner-
Appellee, vs. REPUBLIC OF THE PHILIPPINES, Respondent-
Appellant.
[G.R. No. L-8155. October 23, 1956.] VIOLET MCGUIRE
SUMACAD, ET AL., Plaintiffs-Appellees, vs. THE PROVINCE OF
SAMAR, ET AL., Defendants; THE PHILIPPINE NATIONAL BANK,
Defendant-Appellant.
[G.R. No. L-8297. October 23, 1956.] THE PEOPLE OF THE
PHILIPPINES, Plaintiff-Appellee, vs. JESUS PONCE, BAYANI
CASTILLO, alias NAYO CASTILLO, DOMINGO SAN PEDRO, alias
HAPONG CABLING, accused-Appellants.
[G.R. No. L-8585. October 23, 1956.] THE PEOPLE OF THE
PHILIPPINES, Plaintiff-Appellee, vs. VIRGILIO TRIOMPO Y
BAGANTE, ET AL., Defendants. ANTONIO NAVARRO, Defendant-
Appellant.
[G.R. No. L-8800. October 23, 1956.] TAN TIONG BIO, ET AL.,
Petitioners, vs. BUREAU OF INTERNAL REVENUE, Respondent.
[G.R. No. L-8936. October 23, 1956.] THE PEOPLE OF THE
PHILIPPINES, Plaintiff-Appellee, vs. FEDERICO GERONIMO alias
Cmdr. OSCAR, ET AL., Defendants, FEDERICO GERONIMO alias
Cmdr. OSCAR, Defendant-Appellant.
[G.R. No. L-9072. October 23, 1956.] THE PEOPLE OF THE
PHILIPPINES, Plaintiff-Appellant, vs. CORNELIO FERRER,
Defendant-Appellee.
[G.R. No. L-9276. October 23, 1956.] THE COLLECTOR OF
INTERNAL REVENUE, Petitioner, vs. V. G. SINCO EDUCATIONAL
CORPORATION, Respondent.
[G.R. No. L-8683. October 24, 1956.] In re: Petition to annotate
liens constituted in Acts Nos. 1812 and 1977. MANILA RAILROAD
COMPANY, Petitioner-Appellant, vs. LUZON STEVEDORING
COMPANY, Oppositor-Appellee.
[G.R. No. L-9340. October 24, 1956.] PAULINO NAVARRO,
Petitioner, vs. THE HONORABLE ANTONIO G. LUCERO, Judge of the
Court of First Instance of Manila, MANUEL H. BARREDO, THE
TREASURER OF THE PHILIPPINES, IGNACIO DE GUZMAN and
ALFREDO EDWARD FAWCETT, Respondents.
[G.R. No. L-8578. October 29, 1956.] SOUTHERN MOTORS, INC.,
Plaintiff-Appellant, vs. EFRAIN MAGBANUA, Defendant-Appellee.
[G.R. No. L-8993. October 29, 1956.] ALFREDO HAHN, ET AL.,
Plaintiffs-Appellees, vs. YSMAEL & CO., INC., ET AL., Defendants-
Appellants.
[ b ] d
claim, was in 1950. In the circumstance, said amount would at most be a proper deduction
from his 1950 gross income. In the second place, said amount cannot be considered as a
“business asset” which can be deducted as a loss in contemplation of law because its
collection is not enforceable as a matter of right, but is dependent merely upon the
generosity and magnanimity of the U. S. government. Note that, as of the end of 1945,
there was absolutely no law under which Petitioner could claim compensation for the
destruction of his properties during the battle for the liberation of the Philippines. And
under the Philippine Rehabilitation Act of 1946, the payments of claims by the War
Damage Commission merely depended upon its discretion to be exercised in the manner
it may see fit, but the non-payment of which cannot give rise to any enforceable right, for,
under said Act, “All findings of the Commission concerning the amount of loss or damage
sustained, the cause of such loss or damage, the persons to whom compensation
pursuant to this title is payable, and the value of the property lost or damaged, shall be
conclusive and shall not be reviewable by any court”. (section 113).
It is true that under the authority of section 338 of the National Internal Revenue Code the
Secretary of Finance, in the exercise of his administrative powers, caused the issuance of
General Circular No. V-123 as an implementation or interpretative regulation of section 30
of the same Code, under which the amount of P12,837.65 was allowed to be deducted “in
the year the last installment was received with notice that no further payment would be
made until the United States Congress makes further appropriation therefor”, but such
circular was found later to be wrong and was revoked. Thus, when doubts arose as to the
soundness or validity of such circular, the Secretary of Finance sought the advice of the
Secretary of Justice who, accordingly, gave his opinion the pertinent portion of which
reads as follows: chanroblesvirtuallawlibrary
“Yet it might be argued that war losses were not included as deductions for the year when
compensated for by the United States Government; that since only uncompensated chan roblesvirtualawlibrary
losses are deductible, they had to wait until after the determination by the Philippine War
Damage Commission as to the compensability in part or in whole of their war losses so
that they could exclude from the deductions those compensated for by the said
Commission; and that, of necessity, such determination could be complete only much
chan roblesvirtualawlibrary
later than in the year when the loss was sustained. This contention falls to the ground
when it is considered that the Philippine Rehabilitation Act which authorized the payment
by the United States Government of war losses suffered by property owners in the
Philippines was passed only on August 30, 1946, long after the losses were sustained. It
cannot be said therefore, that the property owners had any conclusive assurance during
the years said losses were sustained, that the compensation was to be paid therefor.
Whatever assurance they could have had, could have been based only on some
information less reliable and less conclusive than the passage of the Act itself. Hence, as
diligent property owners, they should adopt the safest alternative by considering such
losses deductible during the year when they were sustained.”
In line with this opinion, the Secretary of Finance, through the Collector of Internal
Revenue, issued General Circular No. V-139 which not only revoked and declared void his
previous Circular No. V — 123 but laid down the rule that losses of property which
occurred during the period of World War II from fires, storms, shipwreck or other casualty,
or from robbery, theft, or embezzlement are deductible for income tax purposes in the year
of actual destruction of said property. We can hardly argue against this opinion. Since we
have already stated that the amount claimed does not represent a “business asset” that
may be deducted as a loss in 1951, it is clear that the loss of the corresponding asset or
property could only be deducted in the year it was actually sustained. This is in line with
section 30 (d) of the National Internal Revenue Code which prescribes that losses
sustained are allowable as deduction only within the corresponding taxable year.
Petitioner’s contention that during the last war and as a consequence of enemy
occupation in the Philippines “there was no taxable year” within the meaning of our
internal revenue laws because during that period they were unenforceable, is without
merit. It is well known that our internal revenue laws are not political in nature and as such
were continued in force during the period of enemy occupation and in effect were actually
enforced by the occupation government. As a matter of fact, income tax returns were filed
during that period and income tax payment were effected and considered valid and legal.
Such tax laws are deemed to be the laws of the occupied territory and not of the
occupying enemy.
“Furthermore, it is a legal maxim, that excepting that of a political nature, ‘Law once
established continues until changed by some competent legislative power. It is not
changed merely by change of sovereignty.’ (Joseph H. Beale, Cases on Conflict of Laws, III,
Summary section 9, citing Commonwealth vs. Chapman, 13 Met., 68.) As the same author
says, in his Treatise on the Conflict of Laws (Cambridge, 1916, section 131): ‘There can chanroblesvirtuallawlibrary
be no break or interregnun in law. From the time the law comes into existence with the
first-felt corporateness of a primitive people it must last until the final disappearance of
human society. Once created, it persists until a change takes place, and when changed it
continues in such changed condition until the next change and so forever. Conquest or
colonization is impotent to bring law to an end; inspite of change of constitution, the law
chan roblesvirtualawlibrary
 [G.R. No. L-9085. October 29, 1956.] DONATA R. DE CO and
ELISA CO, Petitioners, vs. HON. ANTONIO G. LUCERO, Judge
continues unchanged until the new sovereign by legislative act creates a change.’“ (Co Kim
Presiding Branch XI of the Court of First Instance of Manila, and B. Chan vs. Valdes Tan Keh and Dizon, 75 Phil., 113, 142-143.)
MORALES Co., LTD., Respondents.

[G.R. No. L-7470. October 31, 1956.] COMMISSIONER OF
CUSTOMS, Petitioner, vs. ROMEO H. VALENCIA, Respondent.
[G.R. No. L-7807. October 31, 1956.] ANA GERARDO, Plaintiff-
Appellant, vs. PLARIDEL SURETY AND INSURANCE CO., INC.,
Defendants-Appellees.
[G.R. No. L-7817. October 31, 1956.] ALFREDO M. VELAYO, in his
capacity as Assignee of the insolvent COMMERCIAL AIR LINES, INC.
(CALI), Plaintiff-Appellant, vs. SHELL COMPANY OF THE
PHILIPPINE ISLANDS, LTD., Defendant-Appellee, YEK HUA TRADING
CORPORATION, PAUL SYCIP and MABASA & CO., intervenors.
[G.R. No. L-8072. October 31, 1956.] LIM HOA, Petitioner, vs.
DIRECTOR OF PATENTS, Respondent.
[G.R. No. L-8688. October 31, 1956.] ANSELMA LAMPA,
DOMINGO LAMPA, BONIFACIO LAMPA and CATALINA LAMPA,
Petitioners, vs. RODRIGO RAMIREZ and DONATO GUILA,
Respondents.
[G.R. No. L-8773. October 31, 1956.] JAIME ABOGADO, Plaintiff-
Appellee, vs. IGMIDIO AQUINO, JUAN AQUINO, JULIANA PASION,
CAMILO MATEO and CONSOLACION VELUAN, Defendants-
It is likewise contended that the power to pass upon the validity of General Circular No. V-
123 is vested exclusively in our courts in view of the principle of separation of powers and,
therefore, the Secretary of Finance acted without valid authority in revoking it and
approving in lieu thereof General Circular No. V-139. It cannot be denied, however, that the
Secretary of Finance is vested with authority to revoke, repeal or abrogate the acts or
previous rulings of his predecessor in office because the construction of a statute by
those administering it is not binding on their successors if thereafter the latter become
satisfied that a different construction should be given. [Association of Clerical Employees
vs. Brotherhood of Railways & Steamship Clerks, 85 F. (2d) 152, 109 A.L.R., 345.]
“When the Commissioner determined in 1937 that the Petitioner was not exempt and
never had been, it was his duty to determine, assess and collect the tax due for all years
not barred by the statutes of limitation. The conclusion reached and announced by his
predecessor in 1924 was not binding upon him. It did not exempt the Petitioner from tax,
This same point was decided in this way in Stanford University Bookstore, 29 B. T. A.,
1280; affd., 83 Fed. (2d) 710.” (Southern Maryland Agricultural Fair Association vs.
chan roblesvirtualawlibrary

Appellants.
[G.R. No. L-8804. October 31, 1956.] RUBEN F. SANTOS, ETC.,
Petitioner, vs. THE HONORABLE BIENVENIDO A. TAN, ETC., ET AL.,
Respondents.
[G.R. No. L-8881. October 31, 1956.] REYNALDO T SANTOS,
Plaintiff-Appellee, vs. EMILIANO ACUÑA, ET AL., Defendants-
Appellants.
[G.R. No. L-8996. October 31, 1956.] Testate Estate of the
Commissioner of Internal Revenue, 40 B. T. A., 549, 554).
With regard to the contention that General Circular No. V-139 cannot be given retroactive
effect because that would affect and obliterate the vested right acquired by Petitioner
under the previous circular, suffice it to say that General Circular No. V-123, having been
issued on a wrong construction of the law, cannot give rise to a vested right that can be
invoked by a taxpayer. The reason is obvious: a vested right cannot spring from a wrong
chanroblesvirtuallawlibrary

deceased MARCELO DE CASTRO, ANGELITA DE CASTRO, ISABEL DE

CASTRO, and FELISA DE CASTRO, Petitioner-Appellants, vs. EMILIO
interpretation. This is too clear to require elaboration.
DE CASTRO, and ALVARO DE CASTRO, Oppositors-Appellees.
“It seems too clear for serious argument that an administrative officer cannot change a
[G.R. No. L-9014. October 31, 1956.] SIMEONA BARCELONA,
QUIRICO SAN GABRIEL, and TEODORA SAN GABRIEL, Petitioners,
law enacted by Congress. A regulation that is merely an interpretation of the statute when
vs. HILARION BARCELONA and THE HONORABLE COURT OF once determined to have been erroneous becomes nullity. An erroneous construction of
APPEALS, Respondents.
the law by the Treasury Department or the collector of internal revenue does not preclude
[G.R. No. L-9107. October 31, 1956.] In the matter of the petition or estop the government from collecting a tax which is legally due.” (Ben Stocker, et al., 12
of ESTEBAN LUI (KIONG) to be admitted citizen of the Philippines.
ESTEBAN LUI (KIONG), Petitioner-Appellee, vs. REPUBLIC OF THE B. T. A., 1351.)
PHILIPPINES, Oppositor-Appellant.
“Art. 2254. — No vested or acquired right can arise from acts or omissions which are
[G.R. No. L-9218. October 31, 1956.] MAXIMA ALCALA, ET AL.,
Petitioners, vs. HON. COURT OF APPEALS, ET AL., Respondents. against the law or which infringe upon the rights of others.” (Article 2254, New Civil Code.)
[G.R. No. L-9248. October 31, 1956.] COLLECTOR OF INTERNAL Wherefore, the decision appealed from is affirmed Without pronouncement as to costs.
REVENUE, Petitioner, vs. MARCELO STEEL CORPORATION and
COURT OF TAX APPEALS, Respondents.
Paras, C.J., Padilla, Montemayor, Labrador, Concepcion, Reyes, J. B. L., Endencia and
[G.R. No. L-9316. October 31, 1956.] TRINIDAD L. AURELIO, Felix, JJ., concur.
Plaintiff-Appellee, vs. MAXIMO BAQUIRAN, Defendant-Appellant.

[G.R. No. L-9335. October 31, 1956.] CONCORDIA MEJIA DE

LUCAS, Plaintiff-Appellee, vs. ANDRES GAMPONIA, Defendant-
Appellant.

[G.R. No. L-9380. October 31, 1956.] RIZAL L. NAPIZA, VICENTE Back to Home | Back to Main
RIVERA and JULIO HAMOS, Petitioners, vs. BERNARDINO MILICIO
and THE COURT OF INDUSTRIAL RELATIONS, Respondents.  
[G.R. No. L-9408. October 31, 1956.] EMILIO Y. HILADO, QUICK SEARCH
Petitioner, vs. THE COLLECTOR OF INTERNAL REVENUE and THE
COURT OF TAX APPEALS, Respondents.

[G.R. No. L-9484. October 31, 1956.] APOLINARIA MALOPING,

Plaintiff-Appellant, vs. TEOFILO COBA, Defendant-Appellee. 1901 1902 1903 1904 1905 1906 1907 1908
1909 1910 1911 1912 1913 1914 1915 1916
1917 1918 1919 1920 1921 1922 1923 1924
  1925 1926 1927 1928 1929 1930 1931 1932
1933 1934 1935 1936 1937 1938 1939 1940
1941 1942 1943 1944 1945 1946 1947 1948
  1949 1950 1951 1952 1953 1954 1955 1956
1957 1958 1959 1960 1961 1962 1963 1964
1965 1966 1967 1968 1969 1970 1971 1972
1973 1974 1975 1976 1977 1978 1979 1980
1981 1982 1983 1984 1985 1986 1987 1988
1989 1990 1991 1992 1993 1994 1995 1996
1997 1998 1999 2000 2001 2002 2003 2004
2005 2006 2007 2008 2009 2010 2011 2012
2013 2014 2015 2016        

Main Indices of the Library ---> Go!

 
  Copyright © 1998 - 2018 ChanRobles Publishing Company | Disclaimer | E-mail Restrictions ChanRobles™ Virtual Law Library™ | chanrobles.com™  RED