PASCUAL VS. SEC. OF PUBLIC WORKS [110 PHIL 331; G.R. NO.

L-10405; 29 DEC 1960]

Facts: Petitioner, the governor of the Province of Rizal, filed an action for declaratory relief with injunction on the
ground that RA 920, Act appropriating funds for public works, providing P85,000 for the construction, reconstruction,
repair, extension and improvement of Pasig feeder road terminals, were nothing but projected and planned subdivision
roads within Antonio Subdivision. Antonio Subdivision is owned by the respondent, Jose Zulueta, a member of the
Senate of the Philippines. Respondent offered to donate the said feeder roads to the municipality of Pasig and the offer
was accepted by the council, subject to a condition that the donor would submit plan of the roads and an agreement to
change the names of two of the street. However, the donation was not executed, which prompted Zuleta to write a
letter to the district engineer calling attention the approval of RA 920. The district engineer, on the other hand, did not
endorse the letter that inasmuch the feeder roads in question were private property at the time of passage and approval
of RA 920, the appropriation for the construction was illegal and therefore, void ab initio. Petitioner, prayed for RA 920
be declared null and void and the alleged deed of donation be declared unconstitutional. Lower court dismissed the case
and dissolved the writ of preliminary injunction.
Issue: Whether or Not the deed of donation and the appropriation of funds stipulated in RA 920 are constitutional.
Held: The ruling case law rules that the legislature is without power to appropriate public revenue for anything but
public purpose. The taxing power must be exercised for public purposes only and the money raised by taxation can be
expended only for public purposes and not for the advantage of private individuals.
In the case at bar, the legality of the appropriation of the feeder roads depend upon whether the said roads were public
or private property when the bill was passed by congress or when it became effective. The land which was owned by
Zulueta, the appropriation sought a private purpose and hence, null and void. The donation did not cure the nullity of
the appropriation; therefore a judicial nullification of a said donation need not precede the declaration of
unconstitutionality of the said appropriation.
The decision appealed from is reversed.

PUNSALAN VS. MUNICIPAL BOARD OF MANILA [95 PHIL 46; NO.L-4817; 26 MAY 1954]
Facts: Petitioners, who are professionals in the city, assail Ordinance No. 3398 together with the law authorizing it
(Section 18 of the Revised Charter of the City of Manila). The ordinance imposes a municipal occupation tax on persons
exercising various professions in the city and penalizes non-payment of the same. The law authorizing said ordinance
empowers the Municipal Board of the city to impose a municipal occupation tax on persons engaged in various
professions. Petitioners, having already paid their occupation tax under section 201 of the National Internal Revenue
Code, paid the tax under protest as imposed by Ordinance No. 3398. The lower court declared the ordinance invalid and
affirmed the validity of the law authorizing it.
Issue: Whether or Not the ordinance and law authorizing it constitute class legislation, and authorize what amounts to
double taxation.
Held: The Legislature may, in its discretion, select what occupations shall be taxed, and in its discretion may tax all, or
select classes of occupation for taxation, and leave others untaxed. It is not for the courts to judge which cities or
municipalities should be empowered to impose occupation taxes aside from that imposed by the National Government.
That matter is within the domain of political departments. The argument against double taxation may not be invoked if
one tax is imposed by the state and the other is imposed by the city. It is widely recognized that there is nothing
inherently terrible in the requirement that taxes be exacted with respect to the same occupation by both the state and
the political subdivisions thereof. Judgment of the lower court is reversed with regards to the ordinance and affirmed as
to the law authorizing it.

JOHN H. OSMEA vs. OSCAR ORBOS et al G.R. No. 99886 March 31, 1993
FACTS: October 10, 1984, President Ferdinand Marcos issued P.D. 1956 creating a Special Account in the General Fund,
designated as the Oil Price Stabilization Fund (OPSF). The OPSF was designed to reimburse oil companies for cost
increases in crude oil and imported petroleum products resulting from exchange rate adjustments and from increases in
the world market prices of crude oil. Subsequently, the OPSF was reclassified into a "trust liability account,". President
Corazon C. Aquino promulgated E. O. 137 expanding the grounds for reimbursement to oil companies for possible cost
under recovery incurred as a result of the reduction of domestic prices of petroleum products.
The petitioner argues inter alia that "the monies collected pursuant to . . P.D. 1956, as amended, must be treated as a
'SPECIAL FUND,' not as a 'trust account' or a 'trust fund,' and that "if a special tax is collected for a specific purpose, the
revenue generated therefrom shall 'be treated as a special fund' to be used only for the purpose indicated, and not
channeled to another government objective." Petitioner further points out that since "a 'special fund' consists of monies
collected through the taxing power of a State, such amounts belong to the State, although the use thereof is limited to
the special purpose/objective for which it was created."
ISSUE: Whether or not the funds collected under PD 1956 is an exercise of the power of taxation
RULING: The levy is primarily in the exercise of the police power of the State. While the funds collected may be referred
to as taxes, they are exacted in the exercise of the police power of the State.
What petitioner would wish is the fixing of some definite, quantitative restriction, or "a specific limit on how much to
tax." The Court is cited to this requirement by the petitioner on the premise that what is involved here is the power of
taxation; but as already discussed, this is not the case. What is here involved is not so much the power of taxation as
police power. Although the provision authorizing the ERB to impose additional amounts could be construed to refer to
the power of taxation, it cannot be overlooked that the overriding consideration is to enable the delegate to act with
expediency in carrying out the objectives of the law which are embraced by the police power of the State.
It would seem that from the above-quoted ruling, the petition for prohibition should fail.

LLADOC VS. COMMISSIONER OF INTERNAL REVENUE [14 SCRA 292; NO.L-19201; 16 JUN 1965]
Facts: Sometime in 1957, M.B. Estate Inc., of Bacolod City, donated 10,000.00 pesos in cash to Fr. Crispin Ruiz, the parish
priest of Victorias, Negros Occidental, and predecessor of Fr. Lladoc, for the construction of a new Catholic church in the
locality. The donated amount was spent for such purpose.
On March 3, 1958, the donor M.B. Estate filed the donor's gift tax return. Under date of April 29, 1960. Commissioner of
Internal Revenue issued an assessment for the donee's gift tax against the Catholic Parish of Victorias of which petitioner
was the parish priest.
Issue: Whether or not the imposition of gift tax despite the fact the Fr. Lladoc was not the Parish priest at the time of
donation, Catholic Parish priest of Victorias did not have juridical personality as the constitutional exemption for
religious purpose is valid.
Held: Yes, imposition of the gift tax was valid, under Section 22(3) Article VI of the Constitution contemplates exemption
only from payment of taxes assessed on such properties as Property taxes contra distinguished from Excise taxes The
imposition of the gift tax on the property used for religious purpose is not a violation of the Constitution. A gift tax is not
a property by way of gift inter vivos.
The head of the Diocese and not the parish priest is the real party in interest in the imposition of the donee's tax on the
property donated to the church for religious purpose.

CASSANOVAS VS. HORD [8 Phil 125; No. 3473; 22 Mar 1907]

Facts: The Spanish Govt. by virtue of a royal decree granted the plaintiff certain mines. The plaintiff is now the owner of
those mines. The Collector of Internal Revenue imposed tax on the properties, contending that they were valid
perfected mine concessions and it falls within the provisions of sec.134 of Act No. 1189 known as Internal Revenue Act.
The plaintiff paid under protest. He brought an action against the defendant Collector of Internal Revenue to recover the
sum of Php. 9, 600 paid by him as taxes. Judgment was rendered in favor of the defendant, so the plaintiff appealed.
Issue: Whether or Not Sec. 164 is void or valid.
Held: The deed constituted a contract between the Spanish Government and the plaintiff. The obligation of which
contract was impaired by the enactment of sec. 134 of the Internal Revenue Law infringing sec. 5 of the Act of Congress
which provides that no law impairing the obligation of contracts shall be enacted. Sec. 134 of the Internal Revenue
Law of 1904 is void because it impairs the obligation of contracts contained in the concessions of mine made by the
Spanish Government. Judgment reversed.