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

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.”

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
?54,862.84. 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:

“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 quotas, and tonnage and
wharfage dues.”

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 vs. 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
Tanada 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. vs. 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.

---

CONCURRENTE

PABLO, M.,:

La recurrente pide la devolution 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.°; pero permitia la exportacion de otras mercancias
como los desperdicios de metal con la condition de que se obtuviera
antes licencia de la Philippine Sugar Administration. En 24 de octubre
de 1947 el Gabinete, por recomendacion del Administrador de la National
Development Company, aprobo una resolucion establecierido un “schedule
of royalty rates on metal exports.”

La recurrente contiende que la cantidad que pago de acuerdo con
dicha tarifa (schedule) y que hoy reclama fue un impuesto sobre las
cantidades de desperdicios de hierro, laton, bronce y aluminio que habia
exportado desde diciembre de 1947 hasta septiembre de 1948.

En 2 de diciembre de 1947 la recurrente, acogiendose a las
disposiciones de la ley del Commonwealth No. 327, presento su
reclamacion al Auditor General, alegando que el impuesto era
anticonstitucional, porque el Gabinete no tenia autoridad para adoptar
dicho impuesto y que solamente el Congreso es el que esta autorizado
para aprobar ley sobre impuestos. En su decision de 8 de noviembre de
1950 el Auditor denego el reembolso, y contra ella la recurrente apelo
en 25 de enero de 1951.

Los articulos 1 y 2 de la Ley del Commonwealth No. 327, en que se
funda su reclamacion, dicen asi:

“SECTION 1. In all cases involving the settlement of accounts or
claims, other than those of accountable officers, the Auditor General
shall act and decide the same within sixty days, exclusive of Sundays
and holidays, after their presentation. If said accounts or claims need
reference to other persons, office or offices, or to a party interested,
the period aforesaid shall be counted from the time the last comment
necessary to a proper decision is received by him. With respect to the
accounts of accountable officers, the Auditor General shall act on the
same within one hundred days after their submission, Sundays and
holidays excepted.

“In case of accounts or claims already submitted to but still
pending decision by the Auditor General on or before the,approval of
this Act, the periods provided in this section shall commence from the
date of such approval.

“SEC. 2. The party aggrieved by the final decision of the Auditor
General in the settlement of an account or claim may, within thirty days
from receipt of the decision, take an appeal in writing:

“(a) To the President of the United States, pending the
final and complete withdrawal of her sovereignty over the Philippines,
or

“(b) To the President of the Philippines, or

“(c) To the Supreme Court of the Philippines if the
appellant is a private person or entity.

“If there are more than one appellant, all appeals shall be taken
to the same authority resorted to by the first appellant.

“From a decision adversely affecting the interests of the
Government, the appeal may be taken by the proper head of the department
or in case of local governments by the head of the office or branch of
the Government immediately concerned.

“The appeal shall specifically set forth the particular action of
the Auditor General to which exception is taken with the reasons and
authorities relied on for reversing such decision.”

Toda reclamation, al parecer, esta incluida en la palabra “claims”
porque su significado es amplio; pero no esta incluida la reclamation
que pide el reembolso de una contribution indebidamente cobrada, porque
el Codigo Administrativo de 1916, el Codigo Administrative Revisado de
1917, la Ley No. 3685 y el Codigo Nacional de Rentas Internas disponen
especificamente ante que autoridad deben presentarse reclamaciones de
reembolso de impuestos ilegalmente cobrados.

Si el Auditor General tiene facultad o jurisdiction para resolver
asuntos como el presente, entonces una reclamation presentada antes de
la proclamation de la independencia seria apelable al Presidente de los
Estados Unidos. No creemos que la Legislatura haya intentado, ni en
suenos, que el Presidente de Estados Unidos y el de Filipinas se
entretuviesen en asuntos de tal naturaleza. Si se tratase, por ejemplo,
de recobrar un impuesto ilegalmente cobrado por poseer licencia de armas
de fuego, ¿apelaria el interesado al Presidente de Estados Unidos si no
estuviese satisfecho de la decision del Auditor? La palabra “claims” de
que habla el articulo 1.° de la Ley del Commonwealth No. 327 que se
aprobo en 18 de junio de 1938 no debe referirse a reclamaciones de
reintegro de impuestos indebidamente cobrados, porque la resolucion de
las mismas ya estaba encomendada expresamente al Administrador de Rentas
Internas y a los tribunales de justicia por el Codigo Administrativo
Revisado de 1917, tal como fue enmendado por la Ley No. 3685.

El articulo 1721 del Codigo Administrativo de 1916, el articulo 1579
del Codigo Administrativo Revisado de 1917 y el articulo 1579 del
ultimo codigo, tal como fue enmendado por la Ley No. 3685, dicen
textualmente: “When the validity of any tax is questioned, or
its amount disputed, or other question raised as to liability therefor,
the person against whom or against whose property the same is sought to
be enforced shall pay the tax under instant protest, or upon protest
within thirty days, (10 dias en el Cod. Adm. de 1916 y Cod. Adm. de
1917) and shall thereupon request the decision of the Collector of
Internal Revenue. If the decision of the Collector of Internal Revenue
is adverse, or if no decision is made by him within six months from the
date when his decision was requested, the taxpayer may proceed, at any
time within two years after the payment of the tax to bring an action
against the Collector of Internal Revenue for the recovery * * *” (Art.
1579 Cod. Adm. Rev., tal como fue enmendado por la Ley No. 3685.)

En las palabras “any tax” empleadas en los tres codigos estan
incluidas todas las reclamaciones sobre cualquier impuesto indebidamente
cobrado: no se refieren a impuestos de rentas internas solamente.

La disposicion especifica del Codigo Administrativo Revisado, tal
como fue enmendado, debe prevalecar sobre la disposicion de caracter
general de la ley del Commonwealth No. 327: asi lo exige la hermaneutica
legal.

El asunto citado por la mayoria de la Manila Electric Company contra
el Auditor General y Comision de Servicios Publicos, 73 Phil., 128, no
puede servir de precedente; no se percataron el Auditor y este Tribunal
del articulo 1579 del Codigo Administrativo Revisado, tal como fue
enmendado, .de que el asunto era de la incumbencia del Administrador de
Rentas Internas y del Juzgado de Primera Instancia.

El articulo 584 del Codigo Administrativo Revisado dice asi: “The
authority and powers of the Bureau of Audits extend to and comprehend
all matters relating to accounting procedure, including the keeping of
the accounts of the Government, the preservation of vouchers, the
methods of accounting, the examination and inspection of the books,
records, and papers relating to such accounts, and to the audit and
settlement of the accounts of all persons respecting funds or property
received or held by them in an accountable capacity, as well as to the
examination and audit of all debts and claims of any sort due from or
owing to the Government of the Philippine Islands in any of its
branches. * * *” Esta disposicion no incluye la reclamacion de impuestos
indebidamente cobrados. Darle al Auditor facultad para resolver
semejante reclamacion es concederle funcion judicial.

El Codigo Nacional de Rentas Internas (en sustitucion del Codigo
Administrativo Revisado y otras leyes enmendatorias) en vigor cuando la
recurrente presento su reclamacion dispone lo siguiente:

“Sec. 306. Recovery of tax erroneously or illegally collected.— No
suit or proceeding shall be maintained in any court for the recovery of
any national internal-revenue tax hereafter alleged to have been
erroneously or illegally assessed or collected, or of any penalty
claimed to have been collected without authority, or of any sum alleged
to have been excessive or in any manner wrongfully collected, until for
refund or credit has been duly filed with the Collector of Internal
Revenue; but such suit or proceeding may be maintained, whether or not
such tax, penalty, or sum has been paid tinder protest or duress. In any
case, no such suit or proceeding shall be begun after the expiration of
two years from the date of payment of the tax or penalty.’

La cantidad que reclama la recurrente esta incluida en las
siguientes palabras: “of any sum alleged to have been excessive or in
any manner wrongfully collected”, que equivalen a any tax empleadas por
los codigos anteriores.

No es de la incumbencia del Auditor General decidir la reclamacion
sobre la devolucion de impuestos ilegalmente cobrados o declarar que una
ley, orden o resolution que dispone el cobro de un impuesto, sea o no
anticonetitucional. Son dos cuestiones que deben resolver los tribunales
de justicia, porque son asuntos escucialmente judiciales y no
administrativos. La recurrente, por tanto, debio de haber planteado la
devolucion del impuesto anticonstitucionalmente cobrado ante el
Administrador de Rentas Internas primero o la Philippine Sugar
Administration, y si se denegara o no se resolviera su reclamacion,
presentar demanda ante el Juzgado de Primera Instancia dentro de dos
anos despues de pagados los impuestos. (Art. 306, Cod. Nac. de Rentas
Internas.)

Podria argiiir la recurrente que el impuesto hoy discutido no es de
rentas internas sino de exportation y, por lo tanto, no debiera
plantearse ante el Administrador de Rentas Internas ni en el Juzgado de
Primera Instancia. Tal contention seria insostenible, porque en Visayan
Electric, S. A. contra Saturnino David, etc., 92 Phil., 969; Philippine
Railway Co. vs. Collector of Internal Revenue, 91 Phil., 35 y
Manila Railroad Co. contra Rafferty, 40 Jur. Fil., 237, se trataba de un
indebido aumento de impuesto sobre franquicia, y la cuestion se planted
ante el Administrador de Rentas Internas y luego ante el Juzgado de
Primera Instancia.

El Auditor General no tiene jurisdiction para resolver la
reclamacion fundada en la anticonstitucionalidad del impuesto cobrado;
tampoco este Tribunal adquiere jurisdiccion apelada.

Por estas razones, concurro con el sobreseimiento de la causa.

Diokno, J., concurs.

---

CONCEPCION, J.:

Creo, con el Magistrado Pablo, que el Auditor General carece de
autoridad para determinar la validez de Ios derechos o “royalties”
envueltos en la presente causa.

---

DISSENTING

BENGZON, J.:

With due deference to the majority opinion, my vote is for the
petitioner.

On several occasions, between December 1947 and September 1948, the
dometsic corporation Marc Donnelly and Associates, Inc. exported
considerable quantities of scrap iron, brass, copper and aluminium, for
which it paid under protest to the Sugar Quota Office “royalties” the
total amount of P54,862.84. Such royalties were admittedly demanded
“under the authority granted to it (Sugar Quota Office) by the
resolution of the Cabinet of October 24, 1947,” which reads as follows:

“Upon the recommendation of the General Manager of the National
Development Company, the Cabinet approved the following schedule of
royalty rates on metal exports:

Scrap copper	P50.00 per metric ton
Scrap brass	50.00 per metric ton
Scrap aluminum	20.00 per metric ton
Scrap lead	40.00 per metric ton
Scrap cast iron	5.00 per metric ton
Scrap steel	2.00 per metric ton
Burnt scrap wire other than burnt copper wire	5.00 per metric ton”

Contending that the Cabinet’s resolution was invalid, and that the
payments were involuntary, Marc Donnelly and Associates Inc. submitted
to the Auditor General, in September 1950, a formal claim for refund,
which was denied with the explanation:

“The collection of the royalties in question is based on the
resolution of the Cabinet, dated October 24, 1947, which is assailed by
you as unconstitutional. Inasmuch as this Office has no power to pass
upon the constitutionality or validity of said resolutidn and the fact
that the resolution is presumed to be constitutional unless declared by a
competent court to be otherwise, the request for refund of royalties
collected by virtue of said resolution is hereby denied.”

Reversal of the Auditor’s decision is now requested under the
provisions of Comm. Act No. 327 and Rule 45 of the Rules of Court. In
Manila Electric vs. Auditor General, 73 Phil., 128, we
entertained a similar petition. It is urged that the exactions are
illegal, the Cabinet having no lawful power to require the collection of
“royalty” fees on metal exports.

As the Auditor General disapproved the refund solely upon the ground
that the Cabinet’s resolution “should be presumed to be constitutional
unless declared by a competent court to be otherwise,” the question is
the Cabinet’s authority to direct the collection of the aforesaid
royalties.

No statute has been quoted authorizing the Cabinet to levy the
assessment. Observe that “the taxing power of the State is exclusively a
legislative function, and taxes can be imposed only in pursuance of
legislative authority” (61 C. J. p. 81).

However, seeking to justify the collection, the respondents have
formulated these propositions:

1. Commonwealth Act No. 728, (July 1946) made it unlawful to export
   agricultural or industrial products, materials or supplies, without a
   permit from the President. It authorized the President to regulate,
   control or prohibit exportation of materials and to issue rules and
   regulations in connection therewith.

2. In the exercise of such authority, the President promulgated
   Executive Order No. 3 prohibiting the exportation of scrap metal unless
   an export license was first obtained from the Philippine Sugar
   Administration. Subsequently the Cabinet at its 132nd meeting of October
   24, 1947 approved the resolution in question.

3. And the President authorized the collection by the indorsement
   of the Chief of the Executive Office dated April 24, 1947 which reads as
   follows:

“Respectfully referred to the Philippine Sugar Administration,
Manila, hereby authorizing the exportation of scrap brass and scrap
metals representing only the balance of the export permits issued before
November 1, 1946 upon payment by the applicants concerned of a fee of
P10 per ton of scrap brass and scrap metals to be exported.”

4. The President was validly authorized by Congress (delegation of
   legislative power) (Art. VI Sec. 22(2) Constitution) to regulate,
   control and prohibit the exportation of metals.

5. “When the Cabinet, which is considered the highest advisory body
   to the President approved the resolution in question and the President
   himself authorized the Sugar Quota Office to levy and collect royalties
   as fixed in said resolution, this was done by authority of Com. Act No.
   728.”

6. The authority to regulate included the authority to exact
   royalties or export dues.

To repeat, the respondents’ defense is founded on the above
propositions which for convenience, have been numbered in six separate
paragraphs to facilitate examination or analysis.

The first two paragraphs are undeniable. The third is incorrect
insofar as it asserts that these royalties were demanded pursuant to the
indorsement of April 24, 1947. The Auditor General expressly found they
were demanded by virtue of the resolution of the Cabinet—not by the
indorsement—and this involves a question of fact, the indorsement
referring specifically to exports “representing only the balance etc.”
which did not evidently cover herein petitioner’s consignments abroad.

The fourth proposition is correct.

Inasmuch as the indorsement of the Executive Office is inapplicable,
the fifth proposition poses the crucial question whether the Cabinet
approved the resolution by authority of Com. Act No. 728. The authority
to regulate—and to require payment of fees on—exports was entrusted to
the President. That power was not expressly delegated by the President
to the Cabinet. (It is doubtful whether lie could validly do so.) And
the Cabinet is not the President. True, the President presides Cabinet
meetings, but his voice is only one, convincing though it may be.
Furthermore, the Cabinet may meet without the presence of the President.
The conclusions of the Cabinet and its resolutions are not necessarily
the President’s. We may not, therefore, hold that, in the eyes of the
law, the Cabinet’s resolution of October 24, 1947 was the act of the
President. It was the act of the Cabinet, that had no statutory
authority to require payment of royalties or export fees. Our
ruling in the Villena cas^[1]
followed by the majority, applies only to executive powers of
the President —not to legislative powers delegated to him, Delegata
potestas delegari nonpotest.

Not even Congress could constitutionally delegate to the Cabinet its
power to tax.

As a suppletory proposition, the respondents claim the entire
transaction “might be regarded as a contract between the government, the
latter conceded to the exporters the privilege of exporting certain
goods the export of which could otherwise have been prohibited. The
government, therefore, collected the royalty, not by virtue of its
taxing power, but in the exercise of a contractual right.”

But the comparison is unacceptable, because the exporter was not on
equal footing with the Government; it was virtually under duress.
The officers said, “pay, otherwise your metals will not be exported.”
And the exporter had to disgorge, under protest; otherwise his goods
would rust and rot. And then, accepting the comparison for the sake of
argument, I think “the Government”^[2]
means the appropriate governmental agency, which in this instance
should be the Legislature or the President (at most).

Surely not the Cabinet.

Supposing however that the resolution of the cabinet might be
regarded as a Presidential directive, the question remains whether the
President himself had power to exact the “royalty.” In my opinion he had
not. Under Com. Act 728 he could, at most, require a license fee; but a
“royalty” is not a fee. It connotes some kind of ownership,^[3] far different from that power of
regulation justifying the exaction of license fees. Yet even supposing
the royalty had been labeled “export fees,” it would undoubtedly be also
unauthorized, because, virtually, it was a tax, for it tended to
produce revenue—ad valorem charges. It was not collected merely
as compensation for services rendered, in the interest of necessary
regulations. This difference between fees and taxes is well-known in
this jurisdiction,^[4] the one
implying the exercise of police power, and the other the taxing power.
And authority to collect fees, does not ordinarily embrace the power to
impose taxes.^[5]

In this regard it is noteworthy that, doubting the validity of these
exactions, the House approved in 1950 a bill (H. Bill No. 511)
validating the Cabinet action re royalties on metal exports. Such bill,
however, failed to pass the Senate, because there were objections to its
retroactive operation.

It is said that, because the President had the power to regulate and
prohibit exportation of metals, he could permit exportation thereof
upon payment of taxes. This is tantamount to saying that, as the
Secretary of Education has power to regulate the establishment and
operation of schools, he may, instead of regulating, just require the
schools to pay taxes—without supervision, inspection etc. And because
the city of Baguio has authority to control or prohibit the
establishment of gambling houses, and houses of ill-fame (Sec. 2553 (u)
Rev. Adm. Code), it may permit their operation upon payment of taxes.
Extreme examples indeed: but they illustrate the idea that the police
power to prohibit, or regulate, does not include the power to permit
upon payment of taxes.

The power of regulation and prohibition in the case of schools or
gambling houses is founded upon the same principles as the power to
prohibit exportation of metals: pro bmm publico. Police power. Such
regulation or prohibition cannot be bartered away in exchange for
thousands of pesos.

It is also said that the matter was not within the jurisdiction of
the Auditor General’s Office. It was a “claim * * * due from * * * the
Government of the Philippine Islands” within the meaning of Art. 584 of
the Revised Administrative Code. It was also a claim within the scope of
C. A. No. 327. The fact that appeal to the President of the U. S. is no
longer feasible, does not have, in my opinion, the effect of annulling
the whole law. (C. A. No. 327) Granted that the Auditor General had no
authority to annul the Cabinet’s resolution, still it does not follow
that the Auditor had no power to take cognizance of the monetary claim
against the Government. Before him were two questions: Was the tax
collected in accordance with the Cabinet’s resolution? Was this
resolution valid or constitutional? He answered the first in the
affirmative. As to the second he said he must hold it valid because he
had no power to annul it. He thought prudently; but he acted on the
claim. And we now have appellate jurisdiction. Had he decided
both questions in the negative, appeal could still be made to this
Court.

Let us remember that this being a government of laws, its officers
may only exercise those powers expressly or impliedly granted by the
Constitution or the statutes. Acts performed by them without authority
are void, confer no rights, afford no protection. Royalties or taxes
demanded without lawful authority and paid under protest, should be
returned^[6] no matter the
consequent loss of revenue. The citizen will thus be imbued with the
fullest respect, the utmost loyalty to constituted authority and
republican government.

Reyes, A. J., concurs.

---

^[1] Villena vs. Secretary of
the Interior, 67 Phil., 461.

^[2] The question is not
whether the Government may tax metal exports.

^[3] Apparently such was the
Cabinet’s view. It approved the resolution induced by a memorandum of
the General Manager, National Development Co. saying: “However, it is an
indisputable fact that the scrap iron, scrap metals, scrap brass, etc.
that were lying in any public places and waters, especially sunken ships
and barges, belong to our government and we would, therefore, recommend
that the parties who were issued licenses be required to pay our
government a royalty of a minimum $5.00 or P10.00 per ton of scrap iron,
scrap metals, scrap brass etc. that may be exported. But this
“ownership” was not pressed here. Obviously, collection in this case was
a mistaken application of the Cabinet’s resolution, as the metals
exported were not shown to be “lying in public places and waters
specially sunken ships and barges.”

^[4] Manila Electric Co. vs.
Auditor General, 73 Phil. 128; Cu Unjieng vs. Palstone, 42
Phil. 818; Phil. Transit vs. Treasurer, 83 Phil. 722.

^[5] Cooley on Taxation (1924)
Vol. 4 pp. 3531-3534; Kiowa County vs. Dunn, 21 Colo. 185, 40
Pac. 357; Jackson vs. Newman, 59 Miss. 385; Western U. Tel. Co.
vs. City Council, 56 Fed. 419.

^[6] Zaragosa vs. Alfonso, 46
Phil., 159.