Home of ChanRobles Virtual Law Library

PHILIPPINE SUPREME COURT DECISIONS

EN BANC

[G.R. No. L-4510. May 31, 1954. ]

MARC DONNELLY & ASSOCIATES, INC., Petitioner, v. MANUEL AGREGADO, Auditor General; CORNELIO BALMACEDA, Secretary of Commerce and Industry; and RAMON L. PAGUIA, Chief of the Sugar Quota Office, Respondents.

Arturo Agustines for Petitioner.

Solicitor General Pompeyo Diaz, Assistant Solicitor General Francisco Carreon, and Solicitor Augusto M. Luciano for Respondents.


SYLLABUS


1. CONSTITUTIONAL LAW; DELEGATION OF LEGISLATIVE POWERS; POWERS MAY BE DELEGATED IF AUTHORIZED BY THE CONSTITUTION; ACT OF CABINET IS ACT OF PRESIDENT. — On July 10, 1946, the president, acting upon the authority vested in him by Commonwealth Act No. 728, making it unlawful to export agricultural or industrial products without a permit from the President, prohibited the exportation of certain materials but allowed the exportation of other merchandise, like scrap metals, provided an export license is first obtained from the Philippine Sugar Administration. The Cabinet, upon recommendation of the National Development Company, approved a resolution fixing the schedule of royalty rates to be charged on metal exports and authorized their collection. Petitioner exported large amounts of scrap metals for which it paid by way of royalty fees the total amount of P54,862.84. Petitioner now seeks the refund of said royalty fees, contending that the aforesaid resolution constitutes an undue delegation of legislative powers because, in substance, it creates and imposes an ad valorem tax. Held: the resolution approved by the Cabinet is perfectly legal because it was done by authority of Commonwealth Act No. 728 and in pursuance of an express provision of the Constitution that Congress may by law authorize the President, subject to certain limitations, to fix, within specified limits, tariff rates, import or export quotas, and tonnage and wharfage dues. The fact that the resolution was approved by the Cabinet and the collection of the royalty fees was not decreed by virtue of an order issued by the President himself does not invalidate said resolution because it cannot be disputed that the Act of the Cabinet is deemed to be, and essentially is, the act of the President.

2. ID.; ID.; RULE FORBIDDING DELEGATION OF LEGISLATIVE POWERS, NOT ABSOLUTE EXCEPTIONS. — The rule which forbids delegation of legislative power is not absolute. It admits of exceptions as when the Constitutions itself authorizes such delegation.

3. ID.; PROPERTY RIGHTS; EXPORTATION OF SCRAP METALS, NOT A PRIVILEGE; AUTHORITY TO IMPOSE CONDITIONS AND LIMITATIONS FOR THE EXERCISE OF PRIVILEGE. — Commonwealth Act No. 728 expressly authorizes the President not merely to regulate but to prohibit altogether the exportation of scrap metals. Hence, there is no absolute right on the part of any person or entity to export such materials. If, however, the President chooses to grant the privilege, he can impose conditions and limitations he may deem proper, one of them being the payment of royalties for permissive or lawful use of property right.

4. ROYALTY RATES, MAY TAKE THE FORM OF TARIFF; IMPOSITION THEREOF CAN BE DELEGATED TO THE PRESIDENT. — Royalty rates may take the form of tariff rates, the imposition of which can be delegated to the President by Congress in pursuance of an express provision of the Constitution.

5. ID.; ROYALTY NOT IMPOSITION; PAYMENT OF ROYALTY IS THE CONSIDERATION FOR THE EXERCISE OF THE PRIVILEGE; EXPORTER WHO PAY, GUILTY OF ESTOPPEL. — The payment of royalty rates cannot be considered as an imposition or one exacted under duress, for the exporter who wants to avail of this privilege is free to act on the matter as his interest might dictate. The payment of royalty can be considered as the consideration for the exercise of the privilege and one who avails of that privilege and pays the consideration is guilty of estoppel.


D E C I S I O N


BAUTISTA ANGELO, J.:


This is a petition for review of a decision of the Auditor General denying the claim of petitioner of the refund of the export fees paid by it to the Sugar Quota Office in the amount of P54,862.84.

On July 2, 1946, Congress enacted Commonwealth Act No. 728, making it unlawful for any person, association or corporation to export agricultural or industrial products, merchandise, articles, materials, and supplies without a permit from the President of the Philippines. This Act confers upon the President authority to "regulate, curtail, control, and prohibit the exportation of materials abroad and to issue such rules and regulations as may be necessary to carry out the provisions of this Act, through such department or office as he may designate."cralaw virtua1aw library

On July 10, 1946, the President acting upon the authority vested in him by Commonwealth Act No. 728, promulgated Executive Order No. 3, prohibiting the exportation of certain materials therein enumerated allowing the exportation of other merchandise, like scrap metals, provided an export license is first obtained from the Philippine Sugar Administration.

On April 24, 1947, the Chief of the Executive Office, by authority of the President, sent a communication to the Philippine Sugar Administration authorizing the exportation of scrap metals upon payment by the applicants of a fee of P10 per ton of the metals to be exported. Subsequently, the Cabinet, upon recommendation of the National Development Company, approved a resolution fixing the schedule of royalty rates to be charged on metal exports.

Petitioner herein exported large amounts of scrap iron, brass, copper, and aluminum during the period from December, 1947 to September 1948, for which it paid by way of royalty fees the total amount of P54,862.84. This amount was collected by the Sugar Quota Office under the authority granted by the Chief of the Executive Office and the resolution of the Cabinet above mentioned. The case is now before us by way of appeal from the decision of the Auditor General who denied the request for refund of said royalty fees.

Petitioner contends that the resolution of the Cabinet of October 24, 1947, fixing the schedule of royalty rates on metal exports and providing for their collection constitutes an undue delegation of legislative powers because, in substance, it creates and imposes an ad valorem tax.

Article VI, section 22(2), of the Constitution provides:jgc:chanrobles.com.ph

"The Congress may by law authorize the President, subject to such limitations and restrictions, as it may impose, to fix, within specified limits, tariffs rates, import or export quotes, and tonnage and wharfage dues."cralaw virtua1aw library

It is clear from the above that Congress may by law authorize the President, subject to certain limitations, to fix, within specified limits, tariff rates, import or export quotas, and tonnage and wharfage dues. And pursuant to this constitutional provision, Congress approved Commonwealth Act No. 728 conferring upon the President authority to regulate, curtail, control, and prohibit the exports of scrap metals and to issue such rules and regulations as may be necessary to carry out its provisions. And implementing this broad authority, the Cabinet approved the resolution now in question authorizing the levy and collection of certain royalty fees as a condition for the exportation of scrap metals and other merchandise.

In our opinion, this resolution is perfectly legal because it was done by authority of Commonwealth Act No. 728 and in pursuance of an express provision of our Constitution. The fact that the resolution was approved by the Cabinet and the collection of the royalty fees was not decreed by virtue of an order issued by the President himself does not, in our opinion, invalidate said resolution because it cannot be disputed that the act of the Cabinet is deemed to be, and essentially is, the act of the President. And this is so because, as this Court has aptly said, the secretaries of departments are mere assistants of the Chief Executive and "the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the secretaries of such departments, performed and promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive, presumptively the acts of the Chief Executive." (Villlena v. The Secretary of Interior, 67 Phil., 451.) To hold otherwise would be to entertain technicality over substance. And with regard to the acts of the Cabinet, this conclusion acquires added force because, unless shown otherwise, the Cabinet is deemed to be presided over always by the President himself.

It is contended that the royalty rates prescribed in the Cabinet resolution are not fees but in effect partake of the nature of an ad valorem tax the imposition of which cannot be delegated to the President by Congress. The rule which forbids delegation of legislative power is not absolute. It admits of exceptions as when the Constitution itself authorizes such delegation (Constitution of the Philippines by Tañada and Fernando, p. 449). In the present case, our Constitution expressly authorizes such delegation. (Article VI, section 22 [2].) This is so because the royalty rates may take the form of tariff rates. At any rate, Commonwealth Act No. 728 confers upon the President authority to regulate, curtail, control, and prohibit the exportation of scrap metals, and in this authority is deemed included the power to exact royalties for permissive or lawful use of property right. (Raytheon Mfg. Co. v. Radio Corporation of America, 190, N. E. 1, 5, 286 Mass. 84, cited in Words and Phrases, Vol. 37, p. 810.)

One point that should be considered is the distinction between the business of exporting scrap metals, on one hand, and other merchandise on the other. As a rule, common trades or industries, or the exportation of merchandise in general, cannot be prohibited, but may only be regulated in the exercise of the police power of the State; not so with regard to scrap metals whose exportation may be completely banned. This is the core of Commonwealth Act No. 728. It authorizes the President not merely to regulate but to prohibit altogether the exportation of certain articles, among them scrap metals. Hence, there is no absolute right on the part of any person or entity to export such materials. But the President, acting under the authority granted by said Act, did not, in promulgating Executive Order No. 3, choose to place a complete ban on the exportation of scrap metals, but permitted such exportation upon payment of certain royalty. If the President can prohibit altogether such exportation, a fortiori he can, as he did, impose conditions and limitations he may deem proper in granting the privilege, one of them being the payment of royalties similar to the ones subject of the present litigation.

The payment of these royalties cannot be considered as contended by petitioner, as an imposition or one exacted under duress, for the exporter who wants to avail of this privilege is free to act on the matter as his interest might dictate. Compliance with the resolution was optional. It was left entirely to his discretion. If with full knowledge of the condition imposed by the resolution the exporter of the prohibited article deems it convenient to traffic on it because of the profit he expects to derive from the transaction, he cannot later be heard to complain of what the Government has exacted because of the presumption that, in spite of that charge, the transaction would still bring him a substantial profit. The payment of the royalty can be considered as the consideration for the exercise of the privilege and one who avails of that privilege and pays the consideration is guilty of estoppel. This is the predicament of petitioner.

Wherefore, petition is dismissed, without pronouncement as to costs.

Labrador, J., concurs.

Paras, C.J., Montemayor and Jugo, JJ., concur in the result.

Separate Opinions


PABLO, M., concurrente:chanrob1es virtual 1aw library

La recurrente pide la devolucion de la cantidad de P54,968.41 que habia pagado a la Sugar Quota Office por el permiso que obtuvo para exportar desperdicios de metal, "scrap metals." Cuando la recurrente pidio permiso estaba enterada de que le Ley del Commonwealth No. 728 declaraba ilegal, sin permiso del Presidente de Filipinas, la exportacion de productos, mercancias, articulos, materiales y efectos agricolas o industriales. En su articulo 2, dicha ley autoriza al Presidente para regular, restringir, controlar y prohibir dicha exportacion y dictar los reglamentos necesarios para llevar a efecto las disposiciones de dicha ley. En 10 de julio de 1946, ejerciendo los poderes que le conferia dicha ley, el Presidente promulgo la orden ejecutiva No. 3 que prohibia la exportacion de los materiales enumerados en el articulo 1.
Top of Page