WALTER LUTZ v. J.

ANTONIO ARANETA, 98 Phil 148

CASE NO.: L-7859

DATE: December 22, 1955
PONENTE: REYES, J.B.L.

DOCTRINE:
In the exercise of the Police Power of the State, laws imposing taxes may be enacted for
the stabilization of the sugar industry, being one of the great industries of the nation that directly
or indirectly affects the general welfare.

FACTS:
Plaintiff Walter Lutz, in his capacity as Judicial Administrator of the Intestate Estate of
certain Antonio Jayme Ledesma, filed a case before the Court of First Instance of Negros
Occidental for the recovery of money paid by the estate as taxes to the Collector of Internal
Revenue. Such assessment was made in accordance with Commonwealth Act No. 567, which was
enacted for the protection and promotion of the sugar industry. Lutz claimed that such tax is
unconstitutional and void since it is not intended for a public purpose, but merely for the aid and
support of the sugar industry. On trial, the lower court dismissed the case. Hence, it was directly
appealed before the Supreme Court.

ISSUE/S:
Whether or not Commonwealth Act No. 567 is unconstitutional.

RULING:
No. Section 6 of Commonwealth Act No. 567 shows that the tax is levied with a regulatory
purpose, to provide means for the rehabilitation and stabilization of the threatened sugar industry,
such act is an exercise of the police power of the State. Moreover, the fact that sugar production is
one of the great industries of our nation that provides for employment and a great income for the
state directly or indirectly affects the welfare of a great portion of the population of the State.
Therefore, its promotion, protection, and advancement are a matter of public concern. Considering
such, the Legislature may determine within reasonable bounds what is necessary for the protection
and expedient promotion of the sugar industry.

FALLO:
In view of the foregoing, the appellant was denied his appeal with a cost against him.