Powers and Functions in General 288 (1956)

26. Ollada vs. Secretary of Finance, 109 Phil 1072

(1960)
1. Makati Stock Exchange Inc. vs. SEC, 14 SCRA
27. Fortich vs. Corona, 298 SCRA 685 (1998)
620 (1965)
28. Eastern Shipping Lines Inc. vs. CA, 291 SCRA
2. Radio Communications of the Phil. vs. Board of
485 (1998)
Communications, 80 SCRA 471 (1977)
3. Matienzo vs. Abellera, 162 SCRA 11 (1988)
4. Vda. de Herrera vs. Bernardo, 650 SCRA 87 Adjudicatory Powers
(2011)
Investigatory Powers 29. Philex Mining Co. vs. Zaldivia, 43 SCRA 479
(1972)
5. Ruperto vs. Torres, 100 Phil. 1098 (1957) 30. Antipolo Realty Co. vs NHA, 153 SCRA 399
6. Carmelo vs. Ramos, 6 SCRA 836 (1962) (1987)
7. Evangelista vs. Jarencio, 69 SCRA 99 (1975) 31. Guerzon vs. CA, 164 SCRA 182 (1988)
8. Catura vs. Court of Industrial Relations, 37 SCRA
303 (1971)

Rule-Making Powers

9. Victorias Milling Co. vs. Social Security

Commission, 4 SCRA 627 (1962)
10. Manuel vs. General Auditing Office, 42 SCRA
660 (1976)
11. Olsen and Co. vs. Aldanese, 43 Phil 259(1922)
12. Young vs. Rafferty, 33 Phil. 276 (1916)
13. Sy Man vs. Fabros, 93 Phil. 1093 (1913)
14. Interprovincial Auto Bus Co. vs. Collector of
Internal Revenue, 98 Phil. 290 (1956)
15. Phil. Lawyers' Assoc. vs. Agrava, 105 Phil 173
(1959)
16. Philippines Inter-Island Shipping Association of
the Phil. vs. CA, 266 SCRA 489 (1997)
17. Commissioner of Internal Revenue vs. Fortune
Tobacco Co., 658 SCRA 289 (2011)
18. Lupangco vs. CA, 160 SCRA 848 (1988)
19. Olsen and Co. vs. Herstein and Rafferty, 35 Phil
520 (1915)
20. People vs. Maceren, 79 SCRA 450 (1977)
21. US vs. Panlilio, 28 Phil 608 (1914)
22. US vs. Tupasi Molina, 29 Phil 169 (1014)
23. People vs. Santos, 63 Phil 300 (1936)
24. People vs. Que Po Lay, 94 Phil 640 (1954)
25. Hilado vs. Collector of Internal Revenue, 100 Phil
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Makati Stock Exchange vs SEC
G.R No. L-23004 June 30, 1965
 This is a review of the resolution of the
Securities and Exchange Commission which
would deny the Makati Stock Exchange, Inc.,
permission to operate a stock exchange
unless it agreed not to list for trading on its
board, securities already listed in the Manila
Stock Exchange.
 Objecting to the requirement, Makati Stock
Exchange, Inc. contends that the
Commission has no power to impose it and
that; anyway, it is illegal, discriminatory and
unjust.
Issue: Whether the Commission may "in the public
interest" prohibit (or make impossible) the
establishment of another stock exchange (besides
the Manila Stock Exchange), on the ground that the
operation of two or more exchanges adversely
affects the public interest.
(b) their guaranteed civil liberty to pursue any
lawful employment or trade; and
(c) the investor's right to choose where to buy or to
sell, and his privilege to select the brokers in his
employment. 13
And no extended elucidation is needed to conclude
that for a licensing officer to deny license solely on
the basis of what he believes is best for the
economy of the country may amount to
regimentation or, in this instance, the exercise of
undelegated legislative powers and discretion.
Thus, it has been held that where the licensing
statute does not expressly or impliedly authorize
the officer in charge, he may not refuse to grant a
license simply on the ground that a sufficient
number of licenses to serve the needs of the public
have already been issued. (53 C.J.S. p. 636.)

Ruling:

The Legislature has specified the conditions under

which a stock exchange may legally obtain a permit
(sec. 17, Securities Act); it is not for the Commission
to impose others. If the existence of two competing
exchanges jeopardizes public interest — which is
doubtful — let the Congress speak. 12 Undoubtedly,
the opinion and recommendation of the
Commission will be given weight by the Legislature,
in judging whether or not to restrict individual
enterprise and business opportunities. But until
otherwise directed by law, the operation of
exchanges should not be so regulated as practically
to create a monopoly by preventing the
establishment of other stock exchanges and
thereby contravening:

(a) the organizers' (Makati's) Constitutional right to

equality before the law;

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
People vs Santos
Facts:
 The herein accused and appellee Augusto A.
Santos is charged with having ordered his
fishermen to manage and operate the
motor launches Malabon II and Malabon Ill
registered in his name and to fish, loiter and
anchor within three kilometers of the shore
line of the Island of Corregidor over which
jurisdiction is exercised by naval and military
authorities of the United States, without
permission from the Secretary of
Agriculture and Commerce.
Section 28 of Administrative Order No. 2 relative to
fish and game, issued by the Secretary of
Agriculture and Commerce, provides as follows:
28. Prohibited fishing areas. — No boats
licensed in accordance with the provisions
of Act No. 4003 and this order to catch,
collect, gather, take, or remove fish and
other sea products from Philippine waters
shall be allowed to fish, loiter, or anchor
within 3 kilometers of the shore line of
islands and reservations over which
jurisdiction is exercised by naval or military
authorities of the United States, particularly
Corregidor, Pulo Caballo, La Monja, El Fraile,
and Carabao, and all other islands and
detached rocks lying between Mariveles
Reservation on the north side of the
entrance to Manila Bay and Calumpan Point
Reservation on the south side of said
entrance: Provided, That boats not subject
to license under Act No. 4003 and this order
may fish within the areas mentioned above
only upon receiving written permission
therefor, which permission may be granted
by the Secretary of Agriculture and
Commerce upon recommendation of the
military or naval authorities concerned.
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Issue: Whether Augusta Santos Section 28 Order
No. 2 relative to fish and game, issued by the
Secretary of Agriculture is valid.
Ruling:
Act No. 4003 contains no similar provision
prohibiting boats not subject to license from fishing
within three kilometers of the shore line of islands
and reservations over which jurisdiction is exercised
by naval and military authorities of the United
States, without permission from the Secretary of
Agriculture and Commerce upon recommendation
of the military and naval authorities concerned.
Inasmuch as the only authority granted to the
Secretary of Agriculture and Commerce, by section
4 of Act No. 4003, is to issue from time to time such
instructions, orders, rules, and regulations
consistent with said Act, as may be necessary and
proper to carry into effect the provisions thereof
and for the conduct of proceedings arising under
such provisions; and inasmuch as said Act No. 4003,
as stated, contains no provisions similar to those
contained in the above quoted conditional clause of
section 28 of Administrative Order No. 2, the
conditional clause in question supplies a defect of
the law, extending it. This is equivalent to legislating
on the matter, a power which has not been and
cannot be delegated to him, it being exclusively
reserved to the then Philippine Legislature by the
Jones Law, and now to the National Assembly by
the Constitution of the Philippines. Such act
constitutes not only an excess of the regulatory
power conferred upon the Secretary of Agriculture
and Commerce, but also an exercise of a legislative
power which he does not have, and therefore said
conditional clause is null and void and without
effect.
FORTICH VS. CORONA (G.R. No. 131457, April 24, 1998)
Facts:
The Provincial Development Council (PDC) of Bukidnon,
headed by Governor Carlos O. Fortich, passed Resolution No.
6, dated January 7, 1993, designating certain areas along
Bukidnon-Sayre Highway as part of the Bukidnon Agro-
Industrial Zones where the subject property is situated.
Pursuant to Section 20 of R.A. No. 7160, otherwise known as
the Local Government Code, the Sangguniang Bayan of
Sumilao, Bukidnon, on March 4, 1993, enacted Ordinance No.
24 converting or re-classifying 144 hectares of land in Bgy. San
Vicente, said Municipality, from agricultural to
industrial/institutional with a view of providing an
opportunity to attract investors who can inject new economic
vitality, provide more jobs and raise the income of its people.
During the public consultation, the people of the affected
barangay rallied behind their respective officials in endorsing
the project. Notwithstanding the foregoing favorable
recommendation, however, on November 14, 1994, the DAR,
thru Secretary Garilao, invoking its powers to approve
conversion of lands under Section 65 of R.A. No. 6657, issued
an Order denying the instant application for the conversion of
the subject land from agricultural to agro-industrial and,
instead, placed the same under the compulsory coverage of
CARP and directed the distribution thereof to all qualified
beneficiaries.
The DAR Secretary ordered the DAR Regional Director “to
proceed with the compulsory acquisition and distribution of
the property.”Governor Carlos O. Fortich of Bukidnon
appealed the order of denial to the Office of the President and
prayed for the conversion/reclassification of the subject land
as the same would be more beneficial to the people of
Bukidnon.
In resolving the appeal, the Office of the President, through
then Executive Secretary Ruben D. Torres, issued a Decision in
OP Case No. 96-C-6424, dated March 29, 1996, reversing the
DAR Secretary’s decision. OP found that the instant
application for conversion by the Municipality of Sumilao,
Bukidnon is impressed with merit. To be sure, converting the
land in question from agricultural to agro-industrial would
open great opportunities for employment and bring about
real development in the area towards a sustained economic
growth of the municipality. On May 20, 1996, DAR filed a
motion for reconsideration of the OP decision. However, on
June 23, 1997, an Order was issued by then Executive
Secretary Ruben D. Torres denying DAR’s motion for
reconsideration for having been filed beyond the
reglementary period of fifteen (15) days. The said order
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
further declared that the March 29, 1996 OP decision had
already become final and executory.
On October 9, 1997, some alleged farmer-beneficiaries began
their hunger strike in front of the DAR Compound in Quezon
City to protest the OP Decision of March 29, 1996. On
November 7, 1997, the Office of the President resolved the
strikers’ protest by issuing the so-called “Win/Win” Resolution
penned by then Deputy Executive Secretary Renato C. Corona.
The said Resolution modified the approval of the land
conversion to agro-industrial area only to the extent of forty-
four (44) hectares, and ordered the remaining one hundred
(100) hectares to be distributed to qualified farmer-
beneficiaries.
The petitioners cried foul. They filed a case to the Supreme
Court urging it to annul and set aside the “Win-Win”
Resolution and to enjoin respondent Secretary Ernesto D.
Garilao of the Department of Agrarian Reform from
implementing the said Resolution. The petitioners further
alleged that respondent then Deputy Executive Secretary
Renato C. Corona “committed grave abuse of discretion and
acted beyond his jurisdiction when he issued the questioned
Resolution.
Issue:
Whether the final and executory Decision dated March 29,
1996 can still be substantially modified by the “Win-Win”
Resolution.
Held:
NO. The Supreme Court held that:
1. The rules and regulations governing appeals to the
Office of the President of the Philippines are
embodied in Administrative Order No. 18. Section 7
thereof provides:
SEC. 7. Decisions/resolutions/orders of the Office of
the President shall, except as otherwise provided for by
special laws, become final after the lapse of fifteen
(15) days from receipt of a copy thereof by the parties,
unless a motion for reconsideration thereof is filed
within such period.
Only one motion for reconsideration by any one party
shall be allowed and entertained, save in exceptionally
meritorious cases.
 When the Office of the President issued the Order
dated June 23,1997 declaring the Decision of March 29,
1996 final and executory, as no one has seasonably
filed a motion for reconsideration thereto, the said
Office had lost its jurisdiction to re-open the case, more
so modify its Decision. Having lost its jurisdiction, the
Office of the President has no more authority to
entertain the second motion for reconsideration filed
by respondent DAR Secretary, which second motion
became the basis of the assailed “Win-Win” Resolution.
Section 7 of Administrative Order No. 18 and Section 4,
Rule 43 of the Revised Rules of Court mandate that only
one (1) motion for reconsideration is allowed to be
taken from the Decision of March 29, 1996. And even if
a second motion for reconsideration was permitted to
be filed in “exceptionally meritorious cases,” as
provided in the second paragraph of Section 7 of AO 18,
still the said motion should not have been entertained
considering that the first motion for reconsideration
was not seasonably filed, thereby allowing the Decision
of March 29, 1996 to lapse into finality. Thus, the act
of the Office of the President in re-opening the case and
substantially modifying its March 29,1996 Decision
which had already become final and executory, was in
gross disregard of the rules and basic legal precept that
accord finality to administrative determinations."

2. The orderly administration of justice requires that the

judgments/resolutions of a court or quasi-judicial body
must reach a point of finality set by the law, rules and
regulations. The noble purpose is to write finis to
disputes once and for all. This is a fundamental
principle in our justice system, without which there
would be no end to litigations. Utmost respect and
adherence to this principle must always be maintained
by those who wield the power of adjudication. Any act
which violates such principle must immediately be
struck down.

Therefore, the assailed “Win-Win” Resolution which

substantially modified the Decision of March 29, 1996 after it
has attained finality, is utterly void

Notes: Act No. 4003

"Fisheries Act" Approved December 5, 1932 .
AN ACT TO AMEND AND COMPILE THE LAWS RELATING TO
FISH AND OTHER AQUATIC RESOURCES OF THE PHILIPPINE
ISLANDS, AND FOR OTHER PURPOSES.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
US vs. Panlilio (G.R. No. L-9876 December 8, 1914)
Facts:
Act No. 1760 provides that the following acts of any
person, firm or corporation are unlawful:
1. to ship or otherwise bring into the Philippine
Islands any animal suffering from, infected with,
or dead of any dangerous communicable
disease, or any of the effects pertaining to such
animal which are liable to introduce such
disease into the Philippine Islands;
2. to expose such animal either alive or dead on
any public road or highway where it may come
in contact with other domestic animals; and
3. to transport in any form without a certificate
issued by authority of the Director of Agriculture
whenever the Secretary of the Interior shall
declare that a dangerous communicable animal
disease prevails in any island, province,
municipality, township, or settlement and that
there is danger of spreading such disease
Pursuant to the said Act, the Director of Agriculture
issued an order that all of his carabaos in the barrio of
Masamat, municipality of Mexico, Pampanga Province,
had been exposed to the disease commonly known as
rinderpest, and that said carabaos were accordingly
declared under quarantine, and were ordered kept in a
corral designated by an agent of the Bureau of
Agriculture and were to remain there until released by
further order of the Director of Agriculture. However, it
was alleged that Adriano Panlilio, illegally and
voluntarily and without being authorized to do so, and
while the quarantine against said carabaos was still in
force, permitted and ordered said carabaos to be taken
from the corral in which they were then quarantined and
that by virtue of said orders of the accused, his servants
and agents took the said carabaos from the said corral
and drove them from one place to another for the
purpose of working them.
Nowhere in the Act is the violation of the order of
Bureau of Agriculture prohibited or made unlawful, nor
is there provided any punishment for a violation of such
order.
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Issue:
Whether the accused may be convicted for violation of
the quarantine order issued by the Director of
Agriculture, assuming there was a violation.
Held:
No. The court held that:
Section 6 of the Act simply authorizes the Director of
Agriculture to do certain things, among them, paragraph
(c) "to require that animals which are suffering from
dangerous communicable diseases or have been
exposed thereto be placed in quarantine at such place
and for such time as may be deemed by him necessary
to prevent the spread of the disease." Nowhere in the
law, however, is the violation of the orders of the Bureau
of Agriculture prohibited or made unlawful, nor is there
provided any punishment for a violation of such orders.
Section 8 provides that "any person violating any of the
provisions of this Act shall, upon conviction, be punished
by a fine of not more than one thousand pesos, or by
imprisonment for not more than six months, or by both
such fine and imprisonment, in the discretion of the
court, for each offense." A violation of the orders of the
Bureau of Agriculture, as authorized by paragraph (c),
is not a violation of the provision of the Act. The orders
of the Bureau of Agriculture, while they may possibly
be said to have the force of law, are statutes and
particularly not penal statutes, and a violation of such
orders is not a penal offense unless the statute itself
somewhere makes a violation thereof unlawful and
penalizes it. Nowhere in Act No. 1760 is a violation of
the orders of the Bureau of Agriculture made a penal
offense, nor is such violation punished in any way
therein.”
K.S. YOUNG, ET AL., plaintiffs-appellees, vs. JAMES J.
RAFFERTY, Collector of Internal Revenue G.R. No. L-
10951

FACTS:

Section 6(j) of the Internal Revenue Act (Act No.

2239) authorizes the Collector of Internal Revenue
to specify the manner in which the proper books of
accounts shall be kept. Pursuant thereto, the
Collector of Internal Revenue issued a circular letter
requiring every merchant and manufacturer, to keep
a record of his daily sales either in English or in the
Spanish language, and providing that any violation
or failure to comply with the provisions of the circular
will subject the offender to prosecution under the
provisions of Section 185 of Act No. 2339.

ISSUE:

Is the consular letter in question within the scope

and purview of the authority delegated by Act No.
2339?

HELD:

No. (1) Keeping of books in any particular language

not required by law. ~ The Collector is authorized to
determine that persons subject to the percentage
tax shall keep their sales record in a bound book of
numbered pages, and that this record shall be
spread upon the books, in the tabulated form
specified in the circular. But the law does not
provide nor require that the books be kept in any
particular language.

(2) keeping of books in any language allowed by

law. ~ No one will deny that sales could be recorded
in a bound volume as is specified using the
tabulated form prescribed by the Collector in any
modern language.

In other words, all the information could be recorded

in the designated book in the required form in
Chinese or in local dialect or in some other
languages as accurately as it could be recorded in
English or Spanish.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
CELIA S. VDA. DE HERRERA vs. EMELITA
BERNARDO, EVELYN BERNARDO as Guardian of
Erlyn, Crislyn and Crisanto Bernardo (G.R. No.
170251)
FACTS:
Respondents heirs of Crisanto S. Bernardo filed a
complaint before the Commission for the Settlement of
Land Problems (COSLAP) against petitioner for
interference and trespassing over a portion of a parcel of
land. Petitioner alleged that he inherited his property from
his father who bought from a certain Domingo Villaran.
The COSLAP ruled that respondents have a rightful claim
over the subject property. The Court of Appeals affirmed
the ruling. Hence, petitioner elevated the case to the
Supreme Court.
ISSUE:
Whether or not the COSLAP has jurisdiction to decide the
question of ownership between the parties.
HELD:
No. Administrative agencies, like the COSLAP, are
tribunals of limited jurisdiction that can only wield
powers which are specifically granted to it by its
enabling statute.1 Under Section 3 of E.O. No. 561, the
COSLAP has two options in acting on a land dispute or
problem lodged before it, to wit:
(a) refer the matter to the agency having appropriate
jurisdiction for settlement/resolution; or (b) assume
jurisdiction if the matter is one of those enumerated in
paragraph 2 (a) to (e) of the law, if such case is critical
and explosive in nature, taking into account the large
number of parties involved, the presence or emergence
of social unrest, or other similar critical situations
requiring immediate action. In resolving whether to
assume jurisdiction over a case or to refer the same to
the particular agency concerned, the COSLAP has to
consider the nature or classification of the land involved,
the parties to the case, the nature of the questions raised,
and the need for immediate and urgent action thereon to
prevent injuries to persons and damage or destruction to
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
property. The law does not vest jurisdiction on the
COSLAP over any land dispute or problem.
In the instant case, the COSLAP has no jurisdiction
over the subject matter of respondents' complaint. The
present case does not fall under any of the cases
enumerated under Section 3, paragraph 2 (a) to (e) of
E.O. No. 561. The dispute between the parties is not
critical and explosive in nature, nor does it involve a
large number of parties, nor is there a presence or
emergence of social tension or unrest. It can also
hardly be characterized as involving a critical
situation that requires immediate action.
~
It is axiomatic that the jurisdiction of a tribunal, including
a quasi-judicial officer or government agency, over the
nature and subject matter of a petition or complaint is
determined by the material allegations therein and the
character of the relief prayed for, irrespective of
whether the petitioner or complainant is entitled to any or
all such reliefs.
Since the COSLAP has no jurisdiction over the action, all
the proceedings therein, including the decision
rendered, are null and void.2 A judgment issued by a
quasi-judicial body without jurisdiction is void. It
cannot be the source of any right or create any
obligation.3 All acts performed pursuant to it and all
claims emanating from it have no legal effect.4 Having
no legal effect, the situation is the same as it would be as
if there was no judgment at all. It leaves the parties in the
position they were before the proceedings.
CATURA vs CIR
G.R. No. L-27392 January 30, 1971
FACTS: Celestino Tabaniag as well as other employees
constituting more than ten percent of the entire membership of
such labor organization filed a complaint against Pablo Catura
and Luz Salvador, the President and Treasurer, respectively, of
the Philippine Virginia Tobacco Administration Employees
Association, a legitimate labor organization duly registered.
That during their tenure, they were responsible for unauthorized
disbursement of union funds with complainants on various
occasions and that when demanded from them a full and
detailed report of all financial transaction of the records of the
financial activities of the union open to inspection by the
members, they refused.
The executive board of the said labor organization called for a
general membership meeting so that Pablo Catura and Luz
Salvador could be confronted about the status of the union
funds. Pablo Catura, as President cancelled the meeting. The
same was reiterated but there was no response. The members
then referred the matter to the Department of Labor which
issued subpoenas for the presentation of book accounts but
without success. After setting forth that complainants had
exhausted all remedies provided in the union's constitution and
by-laws, which were all unavailing, the complaint sought, after
due hearing and judgement, to declare present petitioners, as
respondents, guilty of unfair labor practice under the above
provision of the Industrial Peace Act, for them to cease and
desist from further committing such unfair labor practice
complained of, and to render a full and detailed report of all
financial transactions of the union as well as to make the book
of accounts and other records of these financial activities open
to inspection by the members.2
Thereafter, respondent Celestino Tabaniag and the other
members sought an injunction to prevent Pablo Catura from
taking his oath of office after being re-elected in view of his
alleged persistence in the abuse of his authority in the
disbursement of union funds as well as his refusal to make a full
and detailed report of all financial transactions of the union.
Instead of granting the injunction sought, the order issued by
Associate Judge Joaquin M. Salvador limited itself to requiring
and directing "personally the respondents Pablo Catura and
Luz Salvador, president and treasurer, respectively, of the
Philippine Virginia Tobacco Administration Employees'
Association, to deliver and deposit to this Court all the said
Association's book of accounts, bank accounts, pass books,
union funds, receipts, vouchers and other documents related to
the finances of the said labor union. There was a motion for
reconsideration on January 2, 1967 by now petitioners Pablo
Catura and Luz Salvador on the ground that they were not
heard before such order was issued, which moreover in their
opinion was beyond the power of respondent Court. With
Associate Judge Ansberto P. Paredes dissenting, the order was
sustained in a resolution by the Court en banc on February 28,
1967. Hence the present petition filed.
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
ISSUE: Whether or not the Court acted beyond its power, when it
ordered delivery and deposit of Association's book of accounts, bank
accounts, pass books, union funds, receipts, vouchers and other
documents related to the finances
HELD:
No, the Court did not act beyond its power when it called
for the exercise of the statutory power of investigation by
requiring the petitioners to deliver and deposit with the
Court all of its book of accounts, bank accounts, pass
books, union funds, receipts, vouchers and other
documents related to its finances at the hearing of the
petition before it on January 3, 1967.
The complaint against petitioners as President and
Treasurer of the union, specifically recited an
unauthorized disbursement of union funds as well as the
failure to make a full and detailed report of financial
transactions of the union and to make the book of
accounts and other records of its financial activities open
to inspection by the member. The matter was deemed
serious enough by the prosecutor of respondent
Court to call for the exercise of the statutory power
of investigation to substantiate the alleged violation
so as to assure that the rights and conditions of
membership in a labor organization as specifically
set forth in Section 17 be respected.
It cannot be said that such a requirement is beyond the
statutory power conferred. If it were otherwise, the
specific provisions of law allegedly violated may not be
effectively complied with. The authority to investigate
might be rendered futile if respondent Court could be held
as having acted contrary to law. To paraphrase Justice
Laurel, the power to investigate, to be conscientious and
rational at the very least, requires an inquiry into existing
facts and conditions. The documents required to be
produced constitutes evidence of the most solid
character as to whether or not there was a failure to
comply with the mandates of the law. It is not for this
Court to whittle down the authority conferred on
administrative agencies to assure the effective
administration of a statute, in this case intended to
protect the rights of union members against its
officers. The matter was properly within its cognizance
and the means necessary to give it force and
effectiveness should be deemed implied unless the
power sought to be exercised is so arbitrary as to trench
upon private rights of petitioners entitled to priority. No
such showing has been made; no such showing can be
made. To repeat, there should be no question about the
correctness of the order herein challenged
G.R. Nos. 167274-75 July 21, 2008
COMMISSIONER OF INTERNAL REVENUE, Petitioner,
vs.
FORTUNE TOBACCO CORPORATION, Respondent.
Facts: Fortune Tobacco Corporation, herein respondent,
is a manufacturer/producer of several cigarette brands.
On the other hand, herein Petitioner, Commissioner of
Internal Revenue is a domestic corporation duly
organized and existing under and by virtue of the laws of
the Republic of the Philippines. Fortune Tobacco was
granted a tax refund or tax credit representing specific
taxes erroneously collected from its tobacco products.
The tax refund is being re-claimed by the Commissioner
of Internal Revenue in this petition.
general rule of requiring adherence to the letter in
construing statutes applies with peculiar strictness to tax
laws and the provisions of a taxing act are not to be
extended by implication.
The Government is not exempt from the
application of solutio indebiti. Indeed, the taxpayer
expects fair dealing from the Government, and the latter
has the duty to refund without any unreasonable delay
what it has erroneously collected. If the State expects its
taxpayers to observe fairness and honesty in paying
their taxes, it must hold itself against the same standard
in refunding excess (or erroneous) payments of such
taxes. It should not unjustly enrich itself at the expense
of taxpayers. And so, given its essence, a claim for tax
refund necessitates only preponderance of evidence for
its approbation like in any other ordinary civil case.

Issue: Whether or not petitioner is entitled to a refund

as alleged overpaid excise tax for the month of January
2000?

Held:

Yes. Fortune Tobacco is entitled to a refund.

Fortune Tobaccos claim for refund is premised on its
erroneous payment of the tax, or better still the
government’s exaction in the absence of a law.

Tax refunds (or tax credits), on the other hand,

are not founded principally on legislative grace but on
the legal principle which underlies all quasi-contracts
abhorring a person’s unjust enrichment at the expense
of another. The dynamic of erroneous payment of tax
fits to a tee the prototypic quasi-contract, solutio
indebiti, which covers not only mistake in fact but also
mistake in law.

In the case at bar, the rule in the interpretation

of tax laws is that a statute will not be construed as
imposing a tax unless it does so clearly, expressly, and
unambiguously. A tax cannot be imposed without clear
and express words for that purpose. Accordingly, the

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
G.R. No. L-6791 March 29, 1954
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
QUE PO LAY, defendant-appellant.

Facts:

This is an appeal raised by Que Po Lay based on

the claim that Circular #20 was not published in the
Official Gazette prior to the act or omission imputed by
the appellant. Under C.A. 638 and Act 2930 both
require that such circular be published in the Oficial
Gazette, but Solicitor General contends that the two
acts merely enumerate and make a list of what should
be published in the Official Gazette for guidance of the
different branches of the government.

Issue:

Whether or not such circular should be

published?

Held:

Yes. The question of non publication is

fundamental and decisive if as a matter of fact circular
#20 had not been published as required by law before
its violation then in the eyes of the law there was no such
circular to be violated consequently appellant
committed no violation on the circular nor committed
any offense.

Under the provisions of the old and new civil

code both requires publication on the Official Gazette to
be binding, although such circular of the central bank is
not a statute or law but it has a penal sanction for its
violation thus having the force and effect of the law
which should be published before becoming effective.

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Phil. Lawyer’s Association vs AGRAVA application of other laws and legal principles, as
well as the existence of facts to be established
FACTS: in accordance with the law of evidence and
procedure.
 Respondent Director issued a circular
 The above provisions of Section 78 certainly and
announcing that he had scheduled for an
by far, are different from the provisions of the
examination for the purpose of determining
United States Patent Law as regards authority to
who are qualified to practice as patent attorneys
hold examinations to determine the
before the Philippines Patent Office. The
qualifications of those allowed to practice
petitioner contests that one who passed the bar
before the Patent Office.
examinations and licensed by the Supreme
 In conclusion, we hold that under the present
Court are duly qualified to practice before the
law, members of the Philippine Bar authorized
Philippine Patent Office.
by this Tribunal to practice law, and in good
 Respondent answered that the prosecution of
standing, may practice their profession before
patent cases does not involve entirely and
the Patent Office, for the reason that much of
purely the practice of law but includes the
the business in said office involves the
application of scientific and technical knowledge
interpretation and determination of the scope
and training.
and application of the Patent Law and other
 Respondent also stated Sec. 78 of the Patent
laws applicable, as well as the presentation of
Law of the Philippines which stated that the
evidence to establish facts involved; that part of
“Director, subject to the approval of the Sec. of
the functions of the Patent director are judicial
Justice, shall promulgate the necessary rules
or quasi-judicial, so much so that appeals from
and regulations, not inconsistent with law, for
his orders and decisions are, under the law,
the conduct of all business in the Patent Office.”
taken to the Supreme Court.

ISSUE:  For the foregoing reasons, the petition for

prohibition is granted and the respondent
 WON the Director of Patents is allowed to hold Director is hereby prohibited from requiring
an examination even if they are already member members of the Philippine Bar to submit to an
of the Bar? examination or tests and pass the same before
being permitted to appear and practice before
HELD: the Patent Office. No costs.

 Although the transaction of business in the

Patent Office involves the use and application of
technical and scientific knowledge and training,
still, all such business has to be rendered in
accordance with the Patent Law, as well as other
laws, including the Rules and Regulations
promulgated by the Patent Office in accordance
with law.
 Not only this, but practice before the Patent
Office involves the interpretation and

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
MANUEL VS GENERAL AUDITING OFFICE
FACTS:
 Benito Manuel who was Mayor of Lingayen,
Pangasinan applied for retirement.
 He sought for the commutation of his vacation
and sick leave wherein he filed a memorandum
to the General Auditing Office stating that he is
entitled to unused vacation and sick leave
earned for a period of 10 years and 7 months.
 The General Auditing Office ruled that the
application of the petitioner could not be
allowed in audit.
ISSUE:
 WON petitioner is entitled to the commutation
of his vacation and sick leaves.
administrative order supplant the plain and
explicit statutory command.
 A rule is binding on the courts as the procedure
fixed for its promulgation is followed and its
scope is within the statutory power granted by
the legislature, even if the courts are not in
agreement with the policy stated therein or its
innate wisdom.
 Nothing can be clearer therefore than that the
claim of petitioner to a commutation of his
vacation and sick leave not exceeding ten (10)
months must be upheld, inasmuch as the facts
show that the total amount sought to be paid
to him was precisely in accordance with the
controlled legal provisions. The ruling now on
review must be versed and petitioner's plea
granted.

HELD:

 It is expressly provided under Section 286 of

the Revised Administrative Code that vacation
and sick leave shall be cumulative, any part
thereof not taken within the calendar year
earned being carried over the succeeding years
with the employee voluntarily retiring or being
separated from the service without fault on his
part, being entitled to the commutation of all
such accumulated vacation or sick leave to his
credit provided that it shall in no case exceed
ten (10) months.
 There cannot be the least doubt therefore that
the petitioner, who was a municipal mayor and
as such an elective official for sixteen (16)
years, having to his credit four (4) successive
terms as Mayor of Lingayen, Pangasinan could
not be denied his plea for the commutation for
vacation and sick leave.
 If, however, to be considered as having
pertinence and relevance, it cannot as an

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Evangelista vs Jarencio, 68 SCRA 99 (1975)
Importance of administrative investigations
Facts:
• The President of the Philippines created the
Presidential Agency on Reforms and
Government Operations (PARGO).
• The President vested in the Agency all the
powers of an investigating committee including
the power to summon witnesses by subpoena
dues tecum, administer oaths, testimony or
evidence relevant to the investigation.
• Petitioner Evangelista as Undersecretary of the
Agecy issued to respondent Manalasta the
Acting City Public Service Officer of Manila, a
subpoena ad testificandum commanding him
to appear as witness a th office of PARGO to
declare and testify on a pending investigations.
• Instead of obeying the subpoena respondent
filed with CFI of Manila a petition for
prohibition, certiorari on the case and assailed
its legality
Issue:
Whether the Agency, acting thru its officials, enjoys th
authority to issue subpoena in its conduct of fact-
finding investigations?
Held:
Yes.
• The life blood of the administrative process is
the flow of fact. the gathering, the organization
and the analysis of evidence. Investigations are
useful for all administrative function, not only
for rule-making, adjudication, and licensing, but
also for prosecuting, for supervising and
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
directing, for determining general policy, for
recommending legislation, and for the purpose
no more specific than illuminating obscure ares
to find out what if anything should be done. An
adminstrative agency may be authorized to
make investigations, not only in proceedings of
a legislative or judicial nature, but alos in
proceeding whose sole purpose is to obtain
information upon which future action of a
legislative or judicial nature may be taken and
may require the attendance of witnesses in
proceedings of a purely investigatory nature. It
may conduct general inquiries into evils calling
for correction, and to report findings to
appropriate bodies and make
recommendations for actions.
• administrative agencies may enforce
subpoenas issued in the course of
investigations, whether or not adjudication is
involved, and whether or not probable cause is
shown and even before the issuance of a
complaint. The purpose of the subpoena is to
discover evidence, not to prove a pending
charge, but upon which to make one if the
discovered evidence so justifies.
• Subpoena meets the requirements for
enforcement if the inquiry is a.) within the
authority of the agency ,b.) the demand is not
too definite , c.) the information is reasonably
relevant.
• There is no doubt that the fact-finding
investigations being conducted by the Agency
upon sworn statements implicating certain
officials of the City Government of Manila in
anomalous transactions fall within the Agency's
sphere of authority and that the information
sought to be elicited from respondent
Manalastas, of which he is claimed to be in
possession is reasonably relevant to the
investigations.
Radio Communications of the Philippines vs BOC necessary implication conferred upon it by
statues.
Facts:
• One of these powers provided by law is the
• Two complaints were filed by complainants power to issue certificate of public convenience
Deigo Morales and Pacifica Innocencia against and which does not carry with it the power of
RCPI for its failure to transmit to them supervision and control over matters not related
telegrams informing them of the deaths of thereto or performance therewith in the matter
close relatives which accordings to them suitable to promote public interest.
caused personal injury and inconvenience and
• It is clear that petitioner has not been charge of
prays for damages.
any violations or failure to comply with the
• After hearing, the respondents BOC in both terms and conditions of its certificate of public
cases held that the services renedered by convenience or of any order, decision,
petitioners was inadequate and unsatisfactory regulation of respondent Board.
and imposed upon petitioners in each case a
• The proper forum for complainants to ventilate
disciplinary fine of P200.
their grievances for the proper recovery of
damages against petitioner should be in the
Issue:
Courts and not in the respondent BOC.
Whether respondent Board has no jurisdiction to
entertain and take congizance of complaints for injury
caused by breach of contractual obligatios arising from
negligence? and quasi-delict which should be ventilated
in proper courts?

Held:

No. BOC has no jurisdiction.

• The court stated that:

"There can be no jurisdiction then for the BOC

imposing fines in there two petitions. The law cannot be
any clearer. The only power if possessed over radio
companies as noted was to fix rates. It could not take to
task a radio company for any negligence or misfeasance.
It was not vested with such authority. That it did then in
these two petitions lacked the impress of validity."

• The functions of BOC are limited and

administrative in nature and it has only
jurisdiction and power as are expressly or by

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Ollada vs Sec of Finance respect from the Courts. No one is better qualified
109 Phil. 1072 to interpret the intent behind the revenue regulations
than the authority that issued them.
The Secretary of Finance expressly authorized the Granting that the subsequent permission to use old
non-retroactivity of regulation which amended a bookkeeping forms was incompatible with the new
previous one. regulation, such incompatibility would not render the
permission illegal and void since the Secretary may,
FACTS at any time, amend or revoke any of the regulations
Under Sec.334 (now Sec.232) of the National he issued so long as it is in consonance with the
Internal Revenue Code, all corporations, statute. The Secretary may change or repeal any of
companies, partnerships or persons required by law the regulations he issued as he may see fit.
to pay internal revenue taxes whose gross quarterly
sales, earnings, etc. do not exceed P5000 are
required to keep & use a simplified set of
Bookkeeping Records duly authorized by the Sec.
of Finance. Pursuant to such authority, the Sec. of
Finance promulgated Revenue Regulations No. V-
13 authorizing the use by the taxpayers whose
gross quarterly sales do not exceed P5000 a
simplified set of bookkeeping records.
The Secretary amended Revenue Regulations No.
V-13 by promulgating Revenue Regulations No. V-
43, which requires that simplified set of bookkeeping
records should be especially designed for each
class/kind of trade and prepared by a CPA. The new
regulation was not intended to have a retroactive
effect and, therefore, could not adversely affect
those who had already acquired an accrued right
under the old regulation.
A CPA prepared & devised his own simplified sets
of bookkeeping records under the new regulation.
He then instituted proceedings praying that
respondent financial officials be enjoined from
further accepting, authorizing, and tolerating the
public’s use of simplified sets of bookkeeping
records not prepared in accordance with the new
regulation.

ISSUE
Whether the Secretary of Finance acted within his
authority in not giving retroactive effect to Revenue
Regulations No. V-43.

HELD
Yes.
The Secretary if Finance’s Resolution that Revenue
Regulations No. V-43 was not intended to have
retroactive effect was fully within his powers and
authority and becomes part of the regulation itself.
The Resolution is not clearly unreasonable and
arbitrary, and is, thus, entitled to recognition &
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
IN RE CONTEMPT PROCEEDINGS AGAINST
ARMANDO RAMOS, JESUS L. CARMELO, in his
capacity as Chairman of the Probe Committee, Office
of the Mayor of Manila, petitioner-appellant, vs.
ARMANDO RAMOS, respondent-appellee.
FACTS: The Mayor of Manila issued an executive order
creating a committee "to investigate the anomalies involving the
license inspectors and other personnel of the License
Inspection Division of the Office of the City Treasurer and of the
License and Permits Division of this Office (of the Mayor)." He
named Mr. Jesus L. Carmelo as chairman of said committee.
In a statement given to investigators of the Office of
the Mayor, Armando Ramos, a private citizen working as a
bookkeeper in the Casa de Alba, admitted having
misappropriated sums of money given to him by the owner of
Casa de Alba for the payment of the latter's taxes and that he
is used to entertain employees in the City Treasurer's office.
With the information, the committee issued subpoenas to
Ramos, in connection with an administrative case against
Crisanta Estanislao but Ramos, refused to appear.
Claiming that Ramos' refusal tended "to impede,
obstruct, or degrade the administrative proceedings," petitioner
filed in the Court of First Instance of Manila a petition to declare
Armando Ramos in contempt.
The lower court held that there is no law empowering
committees created by municipal mayors to issue subpoenas
and demand that witnesses testify under oath. And to compel
Ramos to confirm this statement in the administrative case
against certain employees in the Office of the City Treasurer
would be to compel him to give testimony that could be used
against him in a criminal case for estafa of which the owner of
Casa de Alba was the offended party. From that decision,
petitioner appealed to this Court.
Petitioner invokes Section 580 of the Revised
Administrative Code which provides for Powers incidental to
taking of testimony of administrative authorities.
ISSUE: Whether the power to investigate of the
committee includes the power to take testimony or
evidence of witnesses?
HELD: There is nothing said in the executive order of the
Mayor creating the committee about such a grant of
power. All that the order gives to this body is the power
to investigate anomalies involving certain city employees.
Even granting that the Mayor has the implied power to
require the appearance of witnesses before him, the rule,
is that the Mayor cannot delegate this power to a body
like the committee of the petitioner.
One who invokes this provision of the law
(Section 580 of the Revised Administrative Code) must
first show that he has "authority to take testimony or
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
evidence" before he can apply to the courts for the
punishment of hostile witnesses. Such provisions are
applicable to the City of Manila as these pertain to
national bureaus or offices of the government.
Petitioner contends that the Mayor of Manila has
the implied power to investigate city officials and
employees appointed by him to the end that the power
expressly vested in him to suspend and remove such
officials of employees may be justly and fairly exercised.
We agree with this proposition. But We do not agree with
the petitioner that a delegation of such power to
investigation implies also a delegation of the power to
take testimony or evidence of witnesses whose
appearance may be require by the compulsory process
of subpoena.
Citing 50 Am. Jur. 449, petitioner contends that
"the power of the investigation committee to issue
compulsory process to secure the attendance of
witnesses undoubtedly exists since only complimentary
to the power of the mayor to investigate, suspend and
remove city officers and employees, supra, is the
recognized rule that where the statute grants a right, it
also confers by implication every particular power
necessary for the exercise thereof." There is no merit in
the argument. In the first place, the authority cited speaks
of statutory, grant of power to a body. Here, We have
seen that whatever power may be claimed by petitioner's
committee may only be traced to the power of the Mayor
to investigate as implied from his power to suspend or
remove certain city employees. There is no statutory
grant of power to investigate to petitioner's committee.
50 Am. Jur. Sec. 428, p. 450 itself admits an exception to
the rule invoked by the petitioner. Thus, it is stated that
"where the liberty and property of persons are sought to
be brought within the operation of a power claimed to be
impliedly granted by an act because necessary to its due
execution, the case must be clearly seen to be within
those intended to be reached." Here, no less than the
liberty of Armando Ramos is involved in the claim of the
committee to the right to cite witnesses.
The rule is that Rule 64 (Contempt) 1 of the Rules
of Court applies only to inferior and superior courts and
does not comprehend contempt committed against
administrative officials or bodies
We hold, therefore, that petitioner's committee
has no power to cite witnesses to appear before it and to
ask for their punishment in case of refusal.
WHEREFORE, the decision of the Court of First Instance
of Manila is hereby affirmed, without pronouncement as
to costs.
WALTER E. OLSEN & CO., INC., petitioner, vs.
VICENTE ALDANESE, as Insular Collector of
Customs of the Philippine Islands, and W. TRINIDAD,
as Collector of Internal Revenue, respondents.
FACTS: Act No. 2613 entitled "an act to improve the
methods of production and the quality of tobacco in the
Philippine and to develop the export trade therein."
Empowers the Collector of Internal Revenue to establish
certain general and local rules respecting the
classification, marking and parking of tobacco for
domestic sale or for exportation to the United States, and,
among other things, provide:
No leaf tobacco or
manufactured tobacco shall be
exported from the Philippine Islands to
the United States until it shall have
been inspected by the Collector of
Internal Revenue or his duly authorized
representative and found to be
standard for export ...
The Collector of Internal Revenue then
promulgated Administrative Order No. 35, known as
"Tobacco Inspection Regulations," in which clause B of
section 6 provides:
To be classed as standard,
cigars must be manufactured under
sanitary conditions from good, clean,
selected tobacco, properly cured and
seasoned, of a crop which has been
harvested at least six months, exclusively
the product of the provinces of Cagayan,
Isabela, or Nueva Vizcaya. The cigars
must be well made, with suitable spiral
wrapper and with long filler, etc.
The petitioner applied to the Collector of Internal
Revenue for a certificate of origin covering a consignment
of 10,000 machine-made cigars to San Francisco, and as
the petitioner himself stated on making such application
that the cigars sought to be exported must have been
manufactured from short-filler tobacco which was not the
product of the provinces of Cagayan, Isabela, and Nueva
Vizcaya, said cigars were neither inspected nor
examined by the Collector of Internal Revenue and were
rejected because they were not long-filler and were not
manufactured from tobacco grown in one of the three
provinces.
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Hence, petitioner filed a motion for judgment on
the pleadings.
ISSUE: Whether clause B of section 6 of Administrative
Order No. 35, known as "Tobacco Inspection
Regulations," is valid?
HELD: No. The court held clause B of section 6 of the Act
to be null and void.
By the express terms and provisions of such
rules and regulations promulgated by the Collector of
Internal Revenue, it was his duty to refuse petitioner's
request, and decline the certificate or origin, because the
cigars tendered were not of the specified kind, and we
have a right to assume that he performed his official duty
as he understood it. After such refusal and upon such
grounds, it would indeed, have been a vain and useless
thing for the Collector of Internal Revenue to his
examined or inspected the cigars.
Having refused to issue the certificate of origin
for the reason above assigned, it is very apparent that a
request thereafter made examine or inspect the cigars
would also have been refused.
The motion for judgment on the pleadings is
sustained, and the writ will issue, as prayed for in the
petition, without costs. So ordered.
Note: Guys..nothing in the full text yung hinahanap ni
Atty. Guerrero na “may dating” na decision ng court. Mas
inexplain pa ng court yung naging actions ng CIR based
sa clause B of section 6 of ng A.O. No. 35 na void nman.
I’ll quote na lang De Leon p. 111 of Admin Law Book:
“The purpose and intent of the Legislature was that a
proper standard of the quality of tobacco should be fixed
and defined, and that all of those who produce tobacco
at the same standard should have equal rights and
opportunities. It was never intended that a standard
should be fixed which would limit the manufacture of
cigars for export to certain provinces of the Islands, or
that the tobacco produced in one province should be
measured by another and different standard than the
tobacco produced in any other province. That would
amount to discrimination and class legislation, which
even the Legislature, would not have the power to enact.”
Philippines Interisland Shipping Association of the determination of the parties, the PPA jettisoned this
Phlippines vs CA 266 SCRA 489 policy and changed it to laissez-faire, something which
only the legislature, or whoever is vested with law-making
Facts: authority could do.

On Feb 3, 1986, President Ferdinand Marcos

(hereinafter PM) issued Executive Order 10885 which
increased the rates of the exisiting pilotage fees
previously fixed by the Philippine Ports Authority6 (PPA
hereinafter). PPA refused to enforce the said EO and,
instead, issued Memorandum Order No 43-867 (MO
hereinafter). PPA and Intervenors maintained that EO
1088 was merely an administrative issuance and could
be superseded by the MO by PPA. Moreover, to consider
EO 1088 as a statute would deprive PPA of its power to
fix pilotage rates as mandated under its charter.

Issue: W/N EO is constitutional

Decision:

NO. EO is in the nature of a law. PPA’s orders were in

the nature of subordinate legislation, promulgated in the
exercise of delegated power. As such, the orders can be
amended or revised by law, as the president did by
issuing the said EO. PM was authorizd under the 1973
Constitution to exercise legislative power. With the same
power conferred to him, he created PPA 8 and as PM can
delegate the rate fixing power to PPA, he could also
exercise the same in specific instances without
withdrawing the delegated power to PPA. EO 1088’s
legislative purpose is the rationalization of pilotage
service charges, through the imposition of uniform and
adjusted rates for foreign and coastwise veseels in all
Philippine Ports.

SC conclude that EO 1088 is a valid statute and PPA is

duty bound to comply with its provisions. PPA may
increase the rates but it may not drecease them below
those mandated by EO 1088. PPA cannot refuse to
implement EO 1088 or alter it as it did in issuing MC 43-
86.

Therefore, the policy was one of governmental regulation

of the pilotage business. By leaving the matter to the

5 7
Providing for uniform and modified rates for pilotage Fixing pilotage fees at rates lower than those provided in
services rendered to foreign and coastwise vessels in all EO 1088.
8
private and public ports. By Issuing PD 857.

6 Government entity specially charged with the financing,

management and operations of public ports throughout the
archipelago. – www.ppa.com.ph

Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
Interprovincial Auto Bus Co (IAB) vs CIR the various counties who have to do with the assessment
of property for taxation will knowingly violate the duties
Facts: imposed upon them by law.”

IAB9 was assessed, on the 194,406 stubs of the “As a logical outgrowth of the presumption in favor of the
receipts which did not state the value of the goods validity of assessments, when such assessments are
transported, by the Tax Agent with an assessed amount assailed, the burden of proof is upon the complaining
of Php 7,776.24. The assessed amount was computed party. It is incumbent upon the property owner clearly to
by assuming that the value of the goods covered by each show that the assessment was erroneous, in order to
of the reciprts amounted to more than Php 5.00, and relieve himself from it.”
assessed a Documentary Stamp Tax on each of the
194,406 stubs. Plaintiff demanded the refund of the
amount, and upon refusal, plaintiff filed the action
anchoring on the validity of the Regulation No. 2610 by
the Department of Finance, promulgated under the
Authority11 of Admin Code.

Issue: Is the Regulation No. 26 unconstitutional when it

created a presumption of liability to tax if the receipt fails
to state such value?

Held: NO. The regulation falls within the scope of the

administrative power of the Secretary of Finance, as
authorized in the Revised Administrative Code, because
it is essential to the strict enforcement and proper
execution of the law which it seeks to implement. Said
regulations have the force and effect of law. The
regulation impliedly required the statement of the value
of the goods in the receipts so that the collection of the
tax can be enforced. IAB failed to do and now claims the
unreasonableness of the provision as a basis for his
exemption.

“All presumptions are in favor of the correctness of tax

assessments. The good faith of tax assessors and the
validity of their actions are presumed. They will be
presumed to have taken into consideration all the f acts
to which their attention was called. No presumption can
be indulged that all of the public officials of the state in

9 transportation of merchandise or goods for the collection of fees therefor are

A common carrier engaged in transporting passengers and
freight receipts.
10
“SEC. 121. Basis of the tax and affixture of stamps.—Bills of lading are
exempt from the documentary stamp tax imposed by paragraphs (q) and (r)
of section 1449 of the Administrative Code when the value of the goods
shipped is P5 or less. Unless the bill of lading states that the goods are worth
P5 or less, it must be held that the tax is due, and internal revenue officers
will see to it that the tax is paid in all cases where the bill of lading does not
state that the shipment is worth P5 or less.”
“SEC. 127. ‘Chits,’ memorandum slips, and other papers not in the usual
commercial form of bills of lading, when used by common carriers in the
Admin Law | Case Bank Week 3 | Powers and Functions of Admin Agencies
considered as bills of lading, and the orginal thereof issued or used should
bear the documentary stamp as provided by paragraphs (q) and (r) of section
1449 of the Administrative Code.”
11
The Department Head shall have power to promulgate, whenever he may
see fit to do so, all rules, regulations, orders, circulars, memorandums, and
other instructions, not contrary to law, necessary to regulate the proper
working and harmonious and efficient administration of each and all of the
offices and dependencies of his Department, and for the strict enforcement
and proper execution of the laws relative to matters under the jurisdiction
of said Department; but none of said rules or orders shall prescribe penalties
for the violation thereof, except as expressly authorized by law. * * *."