STATUTORY CONSTRUCTION

Finals – Week 2
Case Digest

COLLECTOR V. MANILA LODGE

No. 761, 105 Phil. 983 (1957)

FACTS:
This is a petition for review for certiorari of a decision of the Court of Tax Appeals. Manila Lodge No.
761(hereinafter referred to as, Manila Elks Club) is a fraternal, civic, non-stock, non-profit organization. It
owns and operates a clubhouse wherein it sells at retail, liquor, fermented liquor, and cigarettes, only to its
members and their guests. Petitioner claims that the Manila Elks Club had not paid for the period in
question the privilege tax for retail liquor dealer, retail dealer in fermented liquor, and retail tobacco dealer
as prescribed in section 193 of the Tax Code.

The organization claims for exemption from the payment of privilege taxes on the grounds that it is not
engaged in the business of selling such products because the sale of these aforementioned specific goods
is made only to members of the club and their guests' on a very limited scale in pursuance only of its
general purpose as a fraternal social club, and merely to provide enough margin to cover operational
expenses.

Petitioner maintains that persons selling articles subject to specific tax, such as cigars, tobacco, liquor, and
selling the like are subject to fixed taxes imposed by Section 193 of the Tax Code, irrespective of whether
or not they made profit, and whether or not they are civic or fraternal clubs selling only to their members
and their guests. On its appeal, CIR argues that emphasis should be placed not on the term “business” but
on the phrases "retail liquor dealers", in “fermented liquors" and "retail tobacco dealers", appearing in
section 194 of the National Internal Revenue Code.

ISSUE:
Whether or not Manila Elks Club is engaged in “business” of selling liquor and tobacco.

RULING:
Manila Elks Cub CANNOT be considered as engaged in the business of selling liquor and tobacco. since
the organization sells on retail on a very limited scale, providing for just enough margin to cover operational
expenses and without intention to obtain profit. The privilege taxes prescribed in section 193 of the Tax
Code are to be imposed or classified therein for "business" purposes.

It is evident that the plain ordinary meaning of "business" is restricted to activities or affairs where profit is
the purpose, or livelihood is the motive. The term "business" being used without any qualification in section
193 of the Tax Code in relation to section 178 of the same, should therefore be construed in its plain and
ordinary meaning.

With the appellants’ contention that emphasis should be placed not on the term “business” but on the
phrases of Section 194 of the National Internal Revenue Code, the Court ruled that definitions must be
given the same weight as the interpretation of Section 193 of the Tax Code, since it alluded in the given
section that it should only include those engaged in “business” not like civic/nonprofit/fraternal
organizations, like the respondent.

IMPORTANT LAWS/STATUTES/PROVISIONS/SECTIONS
Tax Code
Sec. 178. Payment of privilege taxes. — A privilege tax must be paid before any business or occupation
hereinafter specified can be lawfully begun or pursued. The tax on business is payable for every separate
or distinct establishment or place where the business subject to the tax is conducted; and one occupation
or line of business does not become exempt by being conducted with some other occupation or business
for which such tax has been paid.

The occupation tax must be paid by each individual engaged in a calling subject thereto; the tax on a
business by the person, firm, or company conducting the same. (Emphasis supplied.)
STATUTORY CONSTRUCTION
Finals – Week 2
Case Digest

GEOTINA V. CA
G.R. No. 33500
30 August 1971

General words construed generally. Use of generic words include things that arise after enactment of the
law – progressive interpretation

FACTS
Petitioner commissioner of customs filed the instant petition either as an original action for certiorari or as
an appeal via certiorari by way of challenging the validity of the Court of Tax Appeals decision on April 23,
1971 and of its resolution of May 3,1971 granting the respondents petition and ordering petitioner
commissioner to release a 550,000 bond an alleged no dollar shipment of 37,042 cartons of fresh apples
without the Central Bank release certificates.

The collector of customs denied importers request to release the goods on the ground that they were in
violation of Central Bank Circulars Nos. 289, 294 and 295 in relation to Section 2530 of the Tariff and
Customs Code. With this, the collector has two options of either preventing importation of the cargo or
require compliance with all the requirements and with this the office enforces the former.

ISSUE/HELD
1. WON the tax court acted beyond its authority to release under bond the shipment of fresh apples
without the Central Bank release certificates - YES
2. WON the fresh apples are “articles of prohibited importation” – NO

RATIO
1. The tax court acted without authority of law in ordering the commissioner to release the apples to
the importer under bond, for under the very section 2301 of the customs code invoked by it, "articles
the importation of which is prohibited by law shall not be released under bond." The tax court
rejected the importer's contention and ruled that while the apples "are not articles of prohibited
importation, they may be held liable for forfeiture for failure of petitioner to secure a release
certificate from the Central Bank, which liability may be determined in an appropriate seizure
proceeding", ordering in the meantime the release of the fruits to the importer under bond in view of
their "perishable nature."

2. The fresh apples in question are not absolutely prohibited to be imported into the Philippines under
the Circulars of the Central Bank in relation to Section 102 of the Tariff and Customs Code.
However, they may be forfeited because of failure to get a release certificate from the Central bank

IMPORTANT STATUTES
" 'SEC. 1207. Jurisdiction of Collector Over Articles of Prohibited Importation. — Where articles are of
prohibited importation or subject to importation only upon conditions prescribed by law, it shall be the duty
of the Collector to exercise such jurisdiction in respect thereto as will prevent importation or otherwise
secure compliance with all legal requirements.

"SEC. 102. Prohibited Importations. — The importation into the Philippines of the following articles is
prohibited: xxx xxx xxx "All other articles the importation of which is prohibited by law
""SEC. 2301. Warrant for Detention of Property — Bond. — Upon making any seizure, the Collector shall
issue a warrant for the detention of the property; and if the
SEC. 2530. Property Subject to Forfeiture Under Tariff and Customs Laws. — Any vessel or aircraft, cargo,
articles and other objects shall, under the following conditions, be subject to forfeiture: "xxx xxx xxx "
STATUTORY CONSTRUCTION
Finals – Week 2
Case Digest

GATCHALIAN V. COMELEC
G.R. No. 32560
22 October 1970

BACKGROUND
Petitioner Esmeraldo Gatchalian is an alleged candidate for delegate to the Constitutional Convention for
the first district of Rizal questioned the validity of COMELEC Resolutions Nos. RR-707 and 731 as violative
of Sec. 56 of the Revised Election Code.

FACTS
 Pursuant to the request of the advertising firms and associations of the Philippines, the COMELEC
promulgated on August 13, 1970 COMELEC Resolution No. RR-707 holding that "donations of
billboards to the Commission by foreigners or companies or corporations owned and controlled
partially or wholly by foreigners are not covered by the provision of Sec. 56 of the Revised Election
Code."
 Sec. 56 of the Revised Election Code, as amended, provides that.
No foreigner shall aid any candidate, directly or indirectly, or to take part in or to influence in
any manner any elections.
The prohibited active intervention of foreigners thereunder may consist of:
(1) aiding any candidate, directly or indirectly, in any election;
(2) Taking part in any election; and
(3) Influencing in any manner any election.
 Subsequently, on September 17, 1970, upon to the request of the Advertising Council of the
Philippines, the COMELEC promulgated Resolution No. RR-731 to the effect that the ban in Sec. 46
of the Revised Election Code, as amended, does not cover the projected campaign for funds and
other contributions by the Advertising Council of the Philippines and others similarly situated, during
the 120 days immediately preceding a regular or special election; and "that in line with the ruling in
its resolution numbered RR-707, donations and contributions for the above campaign may be
received from foreigners, companies or corporation owned and/or controlled wholly or partially by
foreigners.
 Under the circumstances above indicated, on September 21, 1970, the petitioner filed a petition to
the COMELEC impugning the validity of the two resolutions.
 The respondent however denied the petition on the ground "that contributions by foreigners to the
COMELEC Billboards Committee for the purpose of financing costs of COMELEC billboards are not
made in aid or support of any particular candidate in a particular district and that the allocation of
space for its candidate is allowed by lottery, nor would it in any way influence the result of the
election.
 Petitioner then filed a notice of appeal to the Supreme Court and for a review for the COMELEC
ruling contending that the said order is null and void as contrary to law or having been issued in
excess of the powers of the Commission on Elections or in grave abuse of its discretion.
 Petitioner also prayed for a writ of preliminary as well as permanent injunction but none were issued
by reason of the fact that the COMELEC itself refrained from enforcing the questioned Resolutions
Nos. RR-707 and 731 and had given the corresponding advice to the advertising firms and
associations concerned, including the Advertising Council of the Philippines.

ISSUE
 [For purposes of discussion, the issue relevant here is] whether the term "foreigner as employed in
the law includes both natural and juridical persons or associations or organized groups, with or
without legal personality.

RULING
 Under Sec. 39 of Art. III of the Revised Election Code, which refers to contributions from or
expenditures by any person for the purpose of influencing or attempting to influence the election of
candidates, "the term "person" includes an individual, partnership, committee, association,
corporation and any other organization or group of persons" thus, to limit the term "foreigner" to
natural persons would be unrealistic and would remove much of the bite in the prohibition.
STATUTORY CONSTRUCTION
Finals – Week 2
Case Digest

 There is nothing in the Revised Election Code, much less in Sec. 56 itself, indicating that the term
"foreigner" is limited only to natural persons. Neither is there any provision in the same Revised
Election Code expressly or impliedly suggesting that the circumstances of an artificial person in law
are not identical to those of natural persons covered by the prohibition in the Revised Election
Code. On the contrary, there is greater reason to believe that the law-maker feared more the
assistance and influence of artificial persons in the elections than the aid of natural persons. Hence,
the law utilizes the more generic term "foreigner."
 It is a cardinal rule of statutory construction that a law is understood to contain, by implication, if not
by its expressed terms, all such provisions as may be necessary to effectuate its object and
purpose. And that the whole and every part of the statute must be considered in fixing the meaning
of its part.
STATUTORY CONSTRUCTION
Finals – Week 2
Case Digest

CLAUDIO V. COMELEC

FACTS
Jovito Claudio was the duly elected mayor of Pasay City in the May 11, 1998 elections. He assumed office
on July 1, 1998.Sometime during the second week of May 1999, the chairs of several barangays in Pasay
City gathered to discuss the possibility of filing a petition for recall against Mayor Claudio for loss of
confidence. On May 29, 1999, 1,073 members of the PRA composed of barangay chairs, kagawads, and
sangguniang kabataan chairs of Pasay City, adopted Resolution No. 01, S-1999, entitled RESOLUTION
TO INITIATE THE RECALL OF JOVITO O.CLAUDIO AS MAYOR OF PASAY CITY FOR LOSS OF
CONFIDENCE.He became the subject of a petition for recall filed by the Preparatory Recall Assembly of
Pasay City (PRA) on July 2, 1999. The petition was opposed on grounds that it violated theone-year
prohibitory period from assumption of office and the pendency of an election case seeking the annulment of
the proclamation of the incumbent mayor, a prejudicial question.The petition was, nevertheless, granted by
the COMELEC, ruling that recall starts with the filing of the petition. Aggrieved, petitioners filed separate
petition.

ISSUE
Whether or Not the word “recall” in paragraph (b) of Section 74 of the Local Government ode includes the
convening of the preparatory recall assembly and the filing by it of a recall resolution.

HELD
NO. Recall is a process which begins with the convening of the preparatory recall assembly or the
gathering of the signatures at least 25% of the registered voters of a local government unit, and then
proceeds to the filing of a recall resolution or petition with the COMELEC, the verification of such resolution
or petition, the fixing of the date of the recall election, and the holding of the election on the scheduled date.

However, as used in paragraph (b) of § 74, "recall" refers to the election itself by means of which voters
decide whether they should retain their local official or elect his replacement. The term "recall" in paragraph
(b) refers to the recall election and not to the preliminary proceedings to initiate recall
—
Because §74 speaks of limitations on "recall" which, according to §69, is a power which shall be exercised
by the registered voters of a local government unit. Since the voters do not exercise such right except in an
election, it is clear that the initiation of recall proceedings is not prohibited within the one-year period
provided in paragraph(b);2.Because the purpose of the first limitation in paragraph (b) is to provide voters
sufficient basis for judging an elective local official, and final judging is not done until the day of the election;
and3.Because to construe the limitation in paragraph (b) as including the initiation of recall proceedings
would unduly curtail freedom of speech and of assembly guaranteed in the Constitution
STATUTORY CONSTRUCTION
Finals – Week 2
Case Digest

PILAR V. COMMISSION ON ELECTIONS

Case No. 242
G. R. No. 115245 (July 11, 1995)

FACTS:
On March 22, 1992, Petitioner filed his certificate of candidacy for the position of member of the
Sanggunian Panlalawigan of the Province of Isabela. Three days later, he withdrew his certificate of
candidacy. As a result, Respondent Commission imposed a fine of P10,000 pesos for failure to file his
statement of contributions and expenditures. Petitioner contends that it is clear from the law that the
candidate must have entered the political contest, and should have either won or lost.

ISSUE:
W/N Petitioner can be held liable for failure to file a statement of contributions and expenditures since he
was a “non-candidate”, having withdrawn his certificate of candidacy three days after its filing.

HELD:
Yes. Sec. 14 of RA 7166 states that “every candidate” has the obligation to file his statement of
contributions and expenditures. As the law makes no distinction or qualification as to whether the candidate
pursued his candidacy or withdrew the same, the term “every candidate” must be deemed to refer not only
to a candidate who pursued his campaign, but also to one who withdrew his candidacy. Sec. 13 of
Resolution No. 2348 categorically refers to “all candidates who filed their certificate of candidacy”.
STATUTORY CONSTRUCTION
Finals – Week 2
Case Digest

MANILA HERALD PUBLISHING CO V. RAMOS

Case No. 163
G. R. No. L-4268 (January 18, 1951)

FACTS:
Respondent filed a libel suit, docketed as Civil Case No. 11531, against Aproniano G. Borres, Pedro Padilla
and Loreto Pastor, editor, managing editor and reporter, respectively, of the Daily Record, a daily
Newspaper, asking damages aggregating P90,000. With the filing of this suit, the Plaintiff secured a writ of
preliminary attachment upon putting up a P50,000 bond. The Sheriff of the City of Manila levied an
attachment upon certain office and printing equipment found in the premises of the Daily Record. Manila
Herald Publishing Co., Inc. and Printers, Inc. commenced a joint suit against the sheriff, Respondent
Quirino and Respondent Corporation, in which the former sought (1) to enjoin the defendants from
proceeding with the attachment of the properties above mentioned and (2) P45,000 damages. This suit was
docketed as Civil Case No. 12263. Respondent Judge declared that the suit, in case No. 12263, was
"unnecessary, superfluous and illegal" and so dismissed the same. He held that what Manila Herald
Publishing Co., Inc., and Printers, Inc., should do was intervene in Case No. 11531.

ISSUE:
W/N Respondent Judge has authority to dismiss Case No. 12263 at the stage when it was thrown out of
court.

HELD:
Yes, the right to intervene, unlike the right to bring a new action, is not absolute but left to the sound
discretion of the court to allow.
STATUTORY CONSTRUCTION
Finals – Week 2
Case Digest

BUENASEDA V. SECRETARY FLAVIER

Case No. 40
G.R. No. 106719 (September 21, 1993)

FACTS:
The Private Respondents filed an administrative complaint with the Ombudsman against the Petitioner for
the violation of the Anti-graft and Corrupt Practices Act. In response, the Ombudsman filed an order
directing the preventive suspension of the Petitioners, who were employees of the national center for
mental health. The Respondent argue that the preventive suspension laid by the Ombudsman under Sec.
24 of RA 6770 is contemplated in by Sec. 13(8) of Art. 9 of the 1987 Constitution, while the Petitioner
contends that the Ombudsman can only recommend to the Heads of Departments and other agencies the
preventive suspension of officials and employees facing administrative investigation conducted by his
office.

ISSUE:
W/N the Ombudsman has the power to preventively suspend government officials working in other offices
other than that of the Ombudsman pending the investigation of administrative complaints.

HELD:
Yes. The Ombudsman has the power to suspend the employees of the said institution may it be in punitive
or preventive suspension. Sec. 13(3) of the Constitution refers to “suspension” in its punitive sense, as the
same speaks of penalties in administrative cases, while Sec. 24 of RA 6770 grants the Ombudsman the
power to preventively suspend public officials and employees facing administrative charges. This statute is
procedural and may arise in order to facilitate a speedy and efficient investigation on cases filed against the
officers. A preventive measure is not in itself a punishment but a preliminary step in an administrative
investigation.
STATUTORY CONSTRUCTION
Finals – Week 2
Case Digest

MUTUC V. COMELEC
G.R. No. L-32717, November 26, 1970
Ponente: Justice Fernando

FACTS:
Invocation of free speech right by petitioner candidate for ConCon delegate, in this action for prohibition of
COMELEC ruling enjoining use of taped jingle for campaign purposes. On October 29, 1970, petitioner
resident of Arayat, Pampanga, alleged COMELEC prohibited him from using jingles in his mobile units
equipped with sound systems. Justification was that ConCon Act made it unlawful for candidates to
“purchase, produce, request, or distribute sample ballots, or electoral propaganda gadgets such as pens,
lighters, fans (of whatever nature), flashlights, athletic goods or materials, wallets, bandanas, shirts, hats,
matches, cigarettes, and the like, whether of domestic or foreign origin.” The recorded voice of a singer was
argued tangible, subject to confiscation.

ISSUE:
Whether or not the prohibition applies to election jingles.

HELD:
No. No such authority was granted in ConCon Act. The prohibition against distribution of electoral
propaganda gadgets, mention being made of pens, lighters, fans, flashlights, athletic goods or materials,
wallets, bandanas, shirts, hats, matches, and cigarettes, and concluding with the words "and the like,"
cannot justify jingle prohibition, for general words following any enumeration is applicable only to things of
the same kind or class as those specifically referred to. What was contemplated in the Act was the
distribution of gadgets of the kind referred to as a means of inducement to obtain a favorable vote for the
candidate responsible for its distribution. What COMELEC did was impose censorship on petitioner.
Precisely, the constitutional guarantee is not to be emasculated by confining it to a speaker having his say,
but not perpetuating what is uttered by him through tape or other mechanical contrivances. Constitution
overrides any governmental measure that fails to live up to its mandates. Power of COMELEC decision is
limited to purely 'administrative questions.'"11 COMELEC cannot exercise any authority in conflict with or
outside of the law, and there is no higher law than the Constitution.12 COMELEC decision cannot have the
effect of nullifying so vital a constitutional right as free speech.
STATUTORY CONSTRUCTION
Finals – Week 2
Case Digest

CAGAYAN VALLEY ENTERPRISES, INC. VS. COURT OF APPEALS

G.R. No. 123248 (October 16, 1997)

FACTS:
La Tondeña registered with the Philippine Patent Office, pursuant to RA 6231, the 350 c.c. white flint
bottles it has been using for its gin popularly known as “Ginebra San Miguel”. Thereafter, a case was
initiated against Petitioner for using the 350 c.c., white flint bottles with the mark “La Tondeña, Inc.” and
“Ginebra San Miguel” stamped or blown-in therein by filling the same with Petitioner’s liquor product
bearing the label “Sonny Boy” for commercial sale and distribution, without La Tondeña’s written consent,
and in violation of Sec. 2 of RA 623 as amended by RA 5700.

ISSUE:
W/N La Tondeña was part of the protected beverages of RA 623 amended by RA 5700.

HELD:
The words “other lawful beverages” is used in its general sense, referring to all beverages not prohibited by
law. Beverage is defined as a liquor or liquid for drinking. Hard liquor, although regulated, is not prohibited
by law; hence, it is within the purview and coverage of RA 623, as amended. To limit the coverage of the
law only to those enumerated or of the same kind or class as those specifically mentioned will defeat the
very purpose of the law.