LU VS LU

Summary:
In this case, the Lu Ym father and sons moved to reconsider the decision of the Court in 2008
that the complaint filed by David et al. was incapable of pecuniary estimation. The father and
sons point out that the case filed by David et al. allege the real value of the shares, based on
underlying real estate values worth P1,087,055,105. The Court resolved that it was indeed
capable of pecuniary estimation and that the trial court did not acquire jurisdiction over the
case filed by David et al. since they did not pay the correct docket fees.

Doctrine:
A court acquires jurisdiction over a case only upon the payment of the prescribed fees. Hence,
without payment of the correct docket fees, the trial court did not acquire jurisdiction over the
action filed by David, et al.

Facts:
 On August 14, 2000, David Lu, Rosa Go, Silvano Ludo and CL Corporation filed with
the Regional Trial Court (RTC) of Cebu City a complaint against Paterno Lu Ym, Sr.,
Paterno Lu Ym, Jr., Victor Lu Ym, John Lu Ym, Kelly Lu Ym, and Ludo & Luym
Development Corporation (LLDC) for Declaration of Nullity of Share Issue,
Receivership and Dissolution.
 The plaintiffs, shareholders of LLDC, claimed that the Lu Ym father and sons, as
members of the Board of Directors, caused the issuance to the latter of 600,000 of the
corporation’s unsubscribed and unissued shares for less than their actual value. They
then prayed for the dissolution of the corporation and the appointment of a receiver
during the pendency of the action.
 The defendants moved to dismiss the complaint but were denied and placed LLDC
under receivership.
 Defendants Lu Ym father and sons elevated the matter to the Court of Appeals through
a petition for certiorari but was still denied. They re-filed the petition and was granted.
 The Lu Ym father and sons then filed with the trial court a motion to lift the order of
receivership over LLDC. Before the matter could be heard, David instituted a petition
for certiorari and prohibition before the CA on the issue of the motion to lift order of
receivership.
 On February 27, 2003, the CA granted the petition and ruled that the proceedings on the
receivership could not proceed without the parties amending their pleadings. The Lu
Ym father and sons thus filed a petition for review with this Court.
 On March 31, 2003, the plaintiffs therein filed a Motion to Admit Complaint to
Conform to the Interim Rules Governing IntraCorporate Controversies, which was
admitted by the trial court.
  On January 23, 2004, the Lu Ym father and sons inquired from the Clerk of Court as to
the amount of docket fees paid by David, et al. John Lu Ym further inquired from the
Office of the Court Administrator (OCA) on the correctness of the amount paid by
David, et al. The OCA informed John Lu Ym that a query on the matter of docket fees
should be addressed to the trial court and not to the OCA.
 On March 1, 2004, the RTC decided the case on the merits. It annulled the issuance of
LLDC’s 600,000 shares of stock to the Lu Ym father and sons. It also ordered the
dissolution of LLDC and the liquidation of its assets, and created a management
committee to take over LLDC. The Lu Ym father and sons appealed to the CA.
 In our August 26, 2008 Decision, we declared that the subject matter of the complaint
filed by David, et al., was one incapable of pecuniary estimation. Movants beg us to
reconsider this position, pointing out that the case filed below by David, et al., had for
its objective the nullification of the issuance of 600,000 shares of stock of LLDC. The
complaint itself contained the allegation that the “real value of these shares, based on
underlying real estate values, was One Billion Eighty Seven Million Fifty Five
Thousand One Hundred Five Pesos (P1,087,055,105).”
 Upon deeper reflection, we find that the movants’ claim has merit. The 600,000 shares
of stock were, indeed, properties in litigation. They were the subject matter of the
complaint, and the relief prayed for entailed the nullification of the transfer thereof and
their return to LLDC.
 Thus, to the extent of the damage or injury they allegedly have suffered from this sale
of the shares of stock, the action they filed can be characterized as one capable of
pecuniary estimation. The shares of stock have a definite value, which was declared by
plaintiffs themselves in their complaint. Accordingly, the docket fees should have been
computed based on this amount. This is clear from the following version of Rule 141,
Section 7, which was in effect at the time the complaint was filed.

Issues Ratio:
1. WON the trial court acquired jurisdiction over the action filed by David– NO.

We have earlier held that a court acquires jurisdiction over a case only upon the payment
of the prescribed fees. Hence, without payment of the correct docket fees, the trial court
did not acquire jurisdiction over the action filed by David, et al. We also stated in our
Decision that the earlier rule in Manchester Development Corporation v. Court of
Appeals has been relaxed. Subsequent decisions now uniformly hold that when
insufficient filing fees are initially paid by the plaintiffs and there is no intention to
defraud the government, the Manchester rule does not apply.

Dispositive:
The trial court did not acquire jurisdiction over the action filed by David. Consequently, all
interlocutory matters pending before this Court, specifically the incidents subject of these three
consolidated petitions, must be denied for being moot and academic.
Vivas v. Monetary Board (G.R. No. 191424)
Facts:

Petitioner Vivas and his principals acquired the controlling interest in Rural Bank Faire,
a bank whose corporate life has already expired. BSP authorized extending the banks’
corporate life and was later renamed to EuroCredit Community Bank (ECBI). Through a
series of examinations conducted by the BSP, the findings bore that ECBI was illiquid,
insolvent, and was performing transactions which are considered unsafe and unsound
banking practices. Consequently ECBI was placed under receivership. Petitioner
contends that the implementation of the questioned resolution was tainted with
arbitrariness and bad faith, stressing that ECBI was placed under receivership without
due and prior hearing in violation of his and the bank’s right to due process.

Issue:

Whether or not ECBI was entitled to due and prior hearing before its being placed under
receivership.

Ruling: YES.

In the case of Bangko Sentral Ng Pilipinas Monetary Board v. Hon. Antonio-Valenzuela,

the Court reiterated the doctrine of “close now, hear later,” stating that it was justified as
a measure for the protection of the public interest. Thus:

The “close now, hear later” doctrine has already been justified as a measure for the
protection of the public interest. Swift action is called for on the part of the BSP when it
finds that a bank is in dire straits. Unless adequate and determined efforts are taken by
the government against distressed and mismanaged banks, public faith in the banking
system is certain to deteriorate to the prejudice of the national economy itself, not to
mention the losses suffered by the bank depositors, creditors, and stockholders, who all
deserve the protection of the government.

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In Rural Bank of Buhi, Inc. v. Court of Appeals, the Court also wrote that

x x x due process does not necessarily require a prior hearing; a hearing or an

opportunity to be heard may be subsequent to the closure. One can just imagine the
dire consequences of a prior hearing: bank runs would be the order of the day, resulting
in panic and hysteria. In the process, fortunes may be wiped out and disillusionment will
run the gamut of the entire banking community.

The doctrine is founded on practical and legal considerations to obviate unwarranted

dissipation of the bank’s assets and as a valid exercise of police power to protect the
depositors, creditors, stockholders, and the general public. Swift, adequate and
determined actions must be taken against financially distressed and mismanaged banks
by government agencies lest the public faith in the banking system deteriorate to the
prejudice of the national economy.

Social Justice Society Officers v. Lim

G.R. Nos. 187836 & 187916 ,
[November 25, 2014] PONENTE:
PEREZ, J.
DOCTRINE: The Local Government Code of 1991 expressly provides that
the Sangguniang Panlungsod is vested with the power to “reclassify land within the
jurisdiction of the city” subject to the pertinent provisions of the Code. It is also settled
that an ordinance may be modified or repealed by another ordinance.”

When the judiciary mediates, we do not in reality nullify or invalidate an act of the
Manila Sangguniang Panlungsod, but only asserts the solemn and sacred obligation
assigned to the Court by the Constitution to determine conflicting claims of authority
under the Constitution and to establish for the parties in an actual controversy the rights
which that instrument secures and guarantees to them.

FACTS: These petitions are a sequel to the case of Social Justice Society v. Mayor
Atienza, Jr. (G.R. No. 156052), where the Court declared that the subject City of Manila
Ordinance No. 8027, enacted during the term of Mayor Atienza, ordering the relocation
and transfer of the Pandacan oil terminals is constitutional.

On 14 May 2009, during the incumbency of former Mayor Lim, who succeeded Mayor
Atienza, the Sangguniang Panlungsod enacted Ordinance No. 8187.

The new Ordinance repealed, amended, rescinded or otherwise modified Ordinance

No. 8027, Section 23 of Ordinance No. 8119, and all other Ordinances or provisions
inconsistent therewith thereby allowing, once again, the operation of petroleum
refineries and oil depots in the Pandacan area.

The petitioners argue that the enactment of the assailed Ordinance is not a valid
exercise of police power because the measures provided therein do not promote the
general welfare of the people. They further argue that Ordinance No. 8187 is violative of
Sections 15 and 16, Article II of the Constitution of the Philippines on the duty of the
State “to protect and promote the right to health of the people” and “protect and
advance the right of the people to a balanced and healthful ecology.” Moreover, they
argue that despite the finality of the Decision in G.R. No. 156052, and notwithstanding
that the conditions and circumstances warranting the validity of Ordinance No. 8027
remain the same, the Manila City Council passed a contrary Ordinance, thereby
refusing to recognize that “judicial decisions applying or interpreting the laws or the
Constitution form part of the legal system of the Philippines.” Petitioners likewise claim
that the Ordinance is in violation of health and environment-related municipal laws, and
international conventions and treaties to which the Philippines is a state party.

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Respondents aver that petitions are based on unfounded fears; that the assailed
ordinance is a valid exercise of police power; that it is consistent with the general
welfare clause and public policy, and is not unreasonable; that it does not run contrary
to the Constitution, municipal laws, and international conventions; and that the
petitioners failed to overcome the presumption of validity of the assailed ordinance.

ISSUE: WON the enactment of the assailed Ordinance No. 8187 allowing the continued
stay of the oil companies in the depots is, indeed, invalid and unconstitutional.

HELD: YES, the Court saw no reason why Ordinance No. 8187 should not be stricken
down insofar as the presence of the oil depots in Pandacan is concerned.

The Local Government Code of 1991 expressly provides that the Sangguniang

Panlungsod is vested with the power to “reclassify land within the jurisdiction of the city”
subject to the pertinent provisions of the Code. It is also settled that an ordinance may
be modified or repealed by another ordinance.” These have been properly applied in
G.R. No. 156052, where the Court upheld the position of the Sangguniang
Panlungsod to reclassify the land subject of the Ordinance, and declared that the mayor
has the duty to enforce Ordinance No. 8027, provided that it has not been repealed by
the Sangguniang Panlungsod or otherwise annulled by the courts. In the same case,
the Court also used the principle that the Sangguniang Panlungsod is in the best
position to determine the needs of its constituents — that the removal of the oil depots
from the Pandacan area is necessary “to protect the residents of Manila from
catastrophic devastation in case of a terrorist attack on the Pandacan Terminals.”
We summarize the position of the Sangguniang Panlungsod on the matter subject of
these petitions. In 2001, the Sanggunian found the relocation of the Pandacan oil
depots necessary. Hence, the enactment of Ordinance No. 8027. In 2009, when the
composition of the Sanggunian had already changed, Ordinance No. 8187 was passed
in favor of the retention of the oil depots. In 2012, again when some of the previous
members were no longer re-elected, but with the Vice-Mayor still holding the same seat,
and pending the resolution of these petitions, Ordinance No. 8283 was enacted to give
the oil depots until the end of January 2016 within which to transfer to another site.
Former Mayor Lim stood his ground and vetoed the last ordinance.

In its Comment, the 7th Council (2007-2010) alleged that the assailed Ordinance was
enacted to alleviate the economic condition of its constituents. Expressing the same
position, former Mayor Lim even went to the extent of detailing the steps he took prior to
the signing of the Ordinance, if only to show his honest intention to make the right
decision.

The fact remains, however, that notwithstanding that the conditions with respect to the
operations of the oil depots existing prior to the enactment of Ordinance No. 8027 do
not substantially differ to this day, as would later be discussed, the position of
the Sangguniang Panlungsod on the matter has thrice changed, largely depending on
the new composition of the council and/or political affiliations. The foregoing, thus,
shows that its determination of the “general welfare” of the city does not after all gear
towards the protection of the people in its true sense and meaning, but is, one way or
another, dependent on the personal preference of the members who sit in the council as
to which particular sector among its constituents it wishes to favor.

Now that the City of Manila, through the mayor and the city councilors, has changed its
view on the matter, favoring the city’s economic-related benefits, through the continued
stay of the oil terminals, over the protection of the very lives and safety of its
constituents, it is imperative for this Court to make a final determination on the basis of
the facts on the table as to which specific right of the inhabitants of Manila should
prevail. For, in this present controversy, history reveals that there is truly no such thing
as “the will of Manila” insofar as the general welfare of the people is concerned.

If in sacrilege, in free translation of Angara by Justice Laurel, we say when the judiciary
mediates we do not in reality nullify or invalidate an act of the Manila Sangguniang
Panlungsod, but only asserts the solemn and sacred obligation assigned to the Court
by the Constitution to determine conflicting claims of authority under the Constitution
and to establish for the parties in an actual controversy the rights which that instrument
secures and guarantees to them.

The issue of whether or not the Pandacan Terminal is not a likely target of terrorist
attacks has already been passed upon in G.R. No. 156052. Based on the assessment
of the Committee on Housing, Resettlement and Urban Development of the City of
Manila and the then position of the Sangguniang Panlungsod, the Court was convinced
that the threat of terrorism is imminent. It remains so convinced.

It is the removal of the danger to life not the mere subdual of risk of catastrophe, that we
saw in and made us favor Ordinance No. 8027. That reason, unaffected by Ordinance
No. 8187, compels the affirmance of our Decision in G.R. No. 156052.

In striking down the contrary provisions of the assailed Ordinance relative to the
continued stay of the oil depots, we follow the same line of reasoning used in G.R. No.
156052. The same best interest of the public guides the present decision. The
Pandacan oil depot remains a terrorist target even if the contents have been lessened.
In the absence of any convincing reason to persuade this Court that the life, security
and safety of the inhabitants of Manila are no longer put at risk by the presence of the
oil depots, we hold that Ordinance No. 8187 in relation to the Pandacan Terminals is
invalid and unconstitutional.

BANCO DE ORO, ET AL VS Republic of the Philippines, et al G.R.

No. 198756, August 16, 2016

FACTS
The Bureau of Treasury (BTr) in a notice announced the auction of 10-
year Zero-Coupon Bonds denominated as the Poverty Eradication and
Alleviation Certificates or the PEACE Bonds on October 16, 2001, which
the BTr states shall not be subject to 20% final withholding tax since
the issue is limited to 19 buyers/lenders.

At the auction, Rizal Commercial Banking Corporation (RCBC)

participated on behalf of Caucus of Development NGO Networks
(CODE-NGO) and won the bid.

Thus, bonds were issued to RCBC, who, as appointed issue manager

and lead underwriter of CODE-NGO, then sold and distributed said
government bonds to petitioner-banks.
On October 7, 2011, barely 11 days before maturity of the PEACe
Bonds, the BIR issued the following:

BIR Ruling No. 370- 201119 declaring that the PEACe Bonds, being
deposit substitutes, were subject to 20% final withholding tax . Under
this, DOF directed BTr to withhold 20% final tax from the face value of
the PEACe Bonds. BIR Ruling No. DA 378-201157 clarified that the final
withholding tax should be imposed and withheld not only on
RCBC/CODE NGO but also on all subsequent holders of the Bonds.

Banco de Oro, et al. thus filed a petition for Certiorari, Prohibition and
Mandamus under Rule 65 to the Supreme Court contending the
assailed 2011 BIR Ruling, with urgent application of TRO and/or writ of
Preliminary Injuction.

SC then issued a TRO enjoining the implementation of the BIR ruling,

subject to the condition that 20% FWT be delivered to the banks to be
placed in escrow. SC Decision promulgated January 13, 2015, SC
granted petition and ruled that the number of lenders/ investors at
every transaction determines whether a debt instrument is a deposit
substitute subject to 20% FWT. When at any transaction, funds are
simultaneously obtained from 20 or more lenders/investors, there is
deemed to be public borrowing and bonds are deemed deposit
substitutes. Hence, seller is required to withhold 20% FWT on the
imputed interest income from the bonds.

The two BIR Rulings is void for disregarding the 20-lender rule
provided in Section 22 (Y) of the Tax Code. BTr reprimanded for its
continued retention of the amount corresponding to 20% FWT.
Separate Motions for Reconsideration and clarification were filed both
by BDO, et al and the Republic, et al.
 ISSUES

1. Does CTA have jurisdiction to determine the constitutionality or

validity of tax laws, rules and regulations, and other administrative
issuances of CIR?
2. May the 20-lender rule apply to PEACe Bonds?
3. Assuming the PEACe Bonds are considered “deposit substitutes,”
whether government or the Bureau of Internal Revenue is estopped
from imposing and/or collecting the 20% final withholding tax from
the face value of these Bonds?
4. Whether BTr is liable to pay 6% legal interest rate?

HELD
#1
YES. CTA has jurisdiction and may take cognizance of cases directly
challenging constitutionality or validity of a tax law, regulation or
administrative issuance such as revenue order, revenue memorandum
circular, and ruling.

RA 9282: appeals from the decisions of quasi-judicial agencies on tax-

related problems must be brought exclusively to the CTA

#2
YES. The 20-lender rule may apply to PEACe Bonds, depending on the
number of lenders “at any one time”

The definition of deposit substitutes in Section 22(Y) specifically

defined “public” to mean “twenty (20) or more individual or corporate
lenders at any one time.” Hence, if there are 20 or more lenders, the
debt instrument is considered a deposit substitute which is subject to
the 20% FWT.
“The reckoning of the phrase “20 or more lenders” should be at the
time when the petitioner-intervenor RCBC Capital sold the PEACe
bonds to investors. Should the number of investor to whom
petitioner-intervenor RCBC Capital distributes the PEACe bonds,
therefore, be found to be 20 or more, the PEACe Bonds are considered
deposit substitutes subject to 20% final withholding tax. Petitioner-
intervenors RCBC/CODE-NGO and RCBC Capital, as well as the final
bondholders who have recourse to government upon maturity are
liable to pay the 20% final withholding tax.”

#3
YES. The Bureau of Internal Revenue is estopped from imposing
and/or collecting the 20% final withholding tax from the face value of
these Bonds

The Supreme Court interpretation in its January 2015 decision of the

phrase “at any one time” to determine the phrase “20 or more lenders”
to include both the primary and secondary market cannot be applied
to the PEACe Bonds and should be applied prospectively.

RCBC and the rest of the investors relied in good faith on the BIR
Rulings which provide that PEACe Bonds are not treated as deposit
substitutes and are subject to the 20% final withholding tax.

HELD
#4
YES. BTr may be held liable.

The BTr made no effort to release the amount corresponding to the

20% FWT which is an utter disregard and defiance of the order of the
Court
BTr is ordered to immediately release and pay the bondholders the
amount of P4,966,207,796.41, representing the 20% final withholding
tax on the PEACe Bonds, with legal interest of 6% per annum from
October 19, 2011 until full payment.

MAZA v. HON. TURLA

Liza L. Maza, et al. Vs. Hon. Evelyn A. Turla, et al.

G.R. No. 187094

February 15, 2017

Facts:

Police Senior Inspector Arnold M. Palomo Deputy Provincial Chief of the Nueva Ecija Criminal
Investigation and Detection Team, referred to the Provincial Prosecutor of Cabanatuan City, Nueva Ecija,
three (3) cases of murder against petitioners and 15 other persons. Inspector Palomo named 19
individuals, including Petitioners, who were allegedly responsible for the death of Carlito Bayudang,
Jimmy Peralta, and Danilo Felipe. That the named individuals conspired, planned, and implemented the
killing of the supporters of AKBAYAN Party List. Carlito Bayudang and Danilo Felipe were AKBAYAN
community organizers, whereas Jimmy Peralta was mistaken for a certain Ricardo Peralta, an AKBAYAN
supporter. On July 18, 2008, Presiding Judge Evelyn A. Atienza-Turla issued an Order37 on the Palayan
cases. Judge Turla held that the proper procedure in the conduct of the preliminary investigation was not
followed in the Palayan cases and remanded the case back to the prosecutor’s office for another
preliminary investigation. 

Issue: 

Whether or not the trial court judge erred in returning the case to the prosecutor in order to conduct a
complete preliminary investigation. 

Held: 

Yes, the trial court judge erred in returning the case to the prosecutor. 

SEC. 5. When warrant of arrest may issue. – (a) By the Regional Trial Court. -Within ten (10) days from
the filing of the complaint or information, the judge shall personally evaluate the resolution of the
prosecutor and its supporting evidence. He may immediately dismiss the case if the evidence on record
clearly fails to establish probable cause. If he finds probable cause, he shall issue a warrant of arrest, or a
commitment order when the complaint or information was filed pursuant to section 6 of this Rule. In case
of doubt on the existence of probable cause, the judge may order the prosecutor to present additional
evidence within five (5) days from notice and the issue must be resolved by the court within thirty (30)
days from the filing of the complaint or information.

A plain reading of the provision shows that upon filing of the information, the trial court judge has the
following options: (1) dismiss the case if the evidence on record clearly fails to establish probable cause;
(2) issue a warrant of arrest or a commitment order if findings show probable cause; or (3) order the
prosecutor to present additional evidence if there is doubt on the existence of probable cause. Upon filing
of an information in court, trial court judges must determine the existence or non-existence of probable
cause based on their personal evaluation of the prosecutor's report and its supporting documents. They
may dismiss the case, issue an arrest warrant, or require the submission of additional evidence. However,
they cannot remand the case for another conduct of preliminary investigation on the ground that the
earlier preliminary investigation was improperly conducted. Hence, the trial court judge erred in
remanding the case back to the prosecutor’s office for another preliminary investigation.

of Non-Profit Clubs, Inc. v. Bureau of Internal Revenue

G.R. No. 228539, June 26, 2019
Second Division
Perlas-Bernabe, J.:

Lessons Applicable: doctrine of hierarchy of courts, rule-making authority of BIR

Laws Applicable: RMC No. 35-2012

FACTS:

 August 3, 2012: Bureau of Internal Revenue (BIR) issued issued Revenue Memorandum
Circular (RMC) No. 35-2012 entitled “"Clarifying the Taxability of Clubs Organized and Operated
Exclusively for Pleasure, Recreation, and Other Non-Profit Purposes” which was addressed to
all revenue officials, employees, and others concerned for their guidance regarding the income
tax and Valued Added Tax (VAT) liability of the said recreational clubs.
 RMC No. 35-2012 states that "clubs which are organized and operated exclusively for pleasure,
recreation, and other non-profit purposes are subject to income tax under the National Internal
Revenue Code of 1997, as amended (1997 NIRC)."  In justifying the interpration, the BIR raised
the doctrine of casus omissus pro omisso habendus est, a person, object, or thing omitted from
an enumeration must be held to have been omitted intentionally. The provision in the 1977 Tax
Code which granted income tax exemption to such recreational clubs was omitted in the 1997
NIRC, as amended and  Section 105, Chapter I, Title IV of the 1997 NIRC, which states that
even a nonstock, nonprofit private organization or government entity is liable to pay VAT on the
sale of goods or services.
 October 25, 2012: During the meeting of ANPC and other club member representatives with
Atty. Elenita Quimosing (Atty. Quimosing), Chief of Staff and Operations Group of the BIR, Atty.
Quimosing suggested the attendees to submit a position paper to the BIR regarding their
concerts about the Circular.   
 September Since the BIR has not action upon NPC’s request on its position paper for the non-
application of RMC No. 35-2012, ANPC, filed before the RTC a petition for declaratory relief to
declare RMC no. 35-2012 invalid, unjust, oppressive, confiscatory, and in violation of the due
process clause of the Constitution for it is beyond the BIR’s rule-making authority.
 RTC: Denied the petition for declaratory relief and upheld RMC No. 35-2012
 ANPC filed a petition for review on certiorari raising pure questions of law
ISSUES:
1.    W/N the doctrine of hierarchy of courts should apply and the matter should be first elevated the
matter to the Secretary of Finance for review pursuant to Section 4, Title I of the 1997 NIRC.
2.    W/N RMC No. 35-2012 is constitutional.

HELD: Partly meritorious.

1.    NO.  The petition for review on certiorari, filed pursuant to Section 2 (c), Rule 41 in relation to
Rule 45 of the Rules of Court, is the sole remedy to appeal a decision of the RTC in cases involving
pure questions of law

 The doctrine of hierarchy of courts is violated only when relief may be had through multiple fora
having concurrent jurisdiction over the case, such as in petitions for certiorari, mandamus, and
prohibition which are concurrently cognizable either by the Regional Trial Courts, the Court of
Appeals, or the Supreme Court.
 Uy v. Contreras: This Court, the Court of Appeals, and the Regional Trial Courts have
concurrent original jurisdiction to issue writs of certiorari, prohibition, mandamus, quo
warranto, and habeas corpus, such concurrence does not accord litigants unrestrained freedom
of choice of the court to which application therefor may be directed. There is a hierarchy of
courts determinative of the venue of appeals which should also serve as a general determinant
of the proper forum for the application for the extraordinary writs.
 
2.    Yes.

 RMC No. 35-2012 erroneously foisted a sweeping interpretation that membership fees and
assessment dues are sources of income of recreational clubs from which income tax liability
may accrue.  As correctly argued by ANPC, membership fees, assessment dues, and other fees
of similar nature only constitute contributions to and/or replenishment of the funds for the
maintenance and operations of the facilities offered by recreational clubs to their exclusive
members.  They represent funds "held in trust" by these clubs to defray their operating and
general costs and hence, only constitute infusion of capital.
 Well-enshrined principle in our jurisdiction that the State cannot impose a tax on capital as it
constitutes an unconstitutional confiscation of property.  An income tax is arbitrary and
confiscatory if it taxes capital because capital is not income.
 Misamis Oriental Association of Coco Traders, Inc. v. Department of Finance Secretary (G.R.
No. 108524, November 10, 1994): Court held that "as a matter of power, a court, when
confronted with an interpretative rule, [such as RMC No. 35-2012] is free to (i) give the force of
law to the rule; (ii) go to the opposite extreme and substitute its judgment; or (iii) give some
intermediate degree of authoritative weight to the interpretative rule."  By sweepingly including in
RMC No. 35-2012 all membership fees and assessment dues in its classification of "income of
recreational clubs from whatever source'' that are "subject to income tax,"the BIR exceeded its
rule-making authority.
 In the same way, the Court declares as invalid the BIR's interpretation in RMC No. 35-2012 that
membership fees, assessment dues, and the like are part of "the gross receipts of recreational
clubs" that are "subject to VAT.  Basic principle that before a transaction is imposed VAT, a sale,
barter or exchange of goods or properties, or sale of a service is required.  This is true even if
such sale is on a cost-reimbursement basis.