BENJAMIN P. GOMEZ, PETITIONER-APPELLEE, VS. ENRICO PALOMAR, IN HIS CAPACITY AS POSTMASTER GENERAL; HON. BRIGIDO R. VALENCIA, IN HIS CAPACITY AS SECRETARY OF PUBLIC WORKS AND COM…

This appeal puts in issue the constitutionality of Republic Act
1635,^[1]
as amended by Republic Act 2631,^[2]
which provides as follows:

“To help raise funds for the Philippine Tuberculosis Society,
the Director of Posts shall or­der for the period from August nineteen to
Septem­ber thirty every year the printing and issue of semi-postal stamps of
different denominations with face value showing the regular postage charge plus
the additional amount of five centavos for the said pur­pose, and during the
said period, no mail matter shall be accepted in the mails unless it bears such
semi-postal stamps:  Provided,
That no such addi­tional charge of five centavos shall be imposed on
newspapers.  The additional proceeds
realized from the sale of the semi-postal stamps shall constitute a special
fund and be deposited with the National Treasury to be expended by the
Philippine Tubercu­losis Society in carrying out its noble work to pre­vent and
eradicate tuberculosis.”

The respondent Postmaster General, in implementation of the law,
thereafter issued four (4) administrative orders numbered 3 (June 20, 1958), 7 (August 9, 1958), 9 (August 28, 1958), and 10 (July 15, 1960).  All these administrative orders were issued
with the approval of the respondent Secretary of Public Works and Com­munications.

The pertinent portions of Adm. Order 3 read as follows:

“Such semi-postal stamps could not be made available during
the period from August 19 to September
30, 1957, for lack of time. 
However, two denominations of such stamps, one at ‘5 + 5′ cen­tavos and
another at ’10 + 5’ centavos, will soon be released for use by the public on
their mails to be posted during the same period starting with the year 1958.

x        x         x

“During the period from August 19 to September 30 each year
starting in 1958, no mail matter of whatever class, and whether domestic or foreign,
posted at any Philippine Post Office and addressed for delivery in this country
or abroad, shall be accepted for mailing unless it bears at least one such semi-postal
stamp showing the additional value of five centavos intended for the Philippine
Tuberculosis Society.

“In the case of second-class mails and mails prepaid by means
of mail permits or impressions of postage meters, each piece of such mail shall
bear at least one such semi-postal stamp if posted during the period above
stated starting with the year 1958, in addition to being charged the usual
postage prescribed by existing regulations. 
In the case of business reply envelopes and cards mailed during said
period, such stamp should be collected from the addressees at the time of
delivery.  Mails entitled to franking
privilege like those from the office of the President, members of Congress, and
other offices to which such privilege has been granted, shall each also bear
one such semi-postal stamp if posted during the said period.

“Mails posted during the said period starting in 1958, which
are found in street or post-office mail boxes without the required semi-postal
stamp, shall be returned to the sender, if known, with a no­tation calling for
the affixing of such stamp.  If the
sender, is unknown, the mail matter shall be treated as nonmailable
and forwarded to the Dead Letter Of­fice for proper disposition.”

Adm. Order 7, amending the fifth paragraph of Adm. Order 3, reads
as follows:

“In the case of the following categories of mail matter and
mails entitled to franking privi­lege which are not exempted from the payment
of the five centavos intended for the Philippine Tuberculosis society, such
extra charge may be collec­ted in cash, for which official receipt (General
Form No. 13, A) shall be issued, instead of affix­ing the semi-postal stamp in
the manner hereinafter indicated:

“‘1.  Second-class mails. – Aside from the
postage at the second-class rate, the extra charge of five centavos for the
Philippine Tuberculosis Society shall be collected on each separately-addressed
piece of second class mail matter, and the total sum thus collected shall be
entered in the same official receipt to be issued for the postage at the
second-class rate.  In making such entry,
the total number of pieces of second-class mail posted shall be stated,
thus:  ‘Total charge for TB Fund on 100
pieces. . P5.00.’ The extra charge shall be entered separate from the postage
in both of the official receipt and the Record of Collec­tions.

“‘2.  First-class and third-class mail per­mits.
– Mails to be posted without postage affixed under permits issued by this
Bureau shall each be charged the usual postage, in addition to the five centavo
extra charge intended for said society. 
The total extra charge thus received shall be entered in the same
official receipt to be issued for the postage collected, as in sub-paragraph 1.

“‘3.  Metered mails. – For each piece of mail
matter impressed by postage meter under metered mail permit issued by this
Bureau, the extra charge of five centavos for said society shall be collected
in cash, and an official receipt issued for the total sum thus received, in the
manner indicated in subparagraph 1.

“‘4.  Business reply cards and envelopes. –
Upon delivery of business reply cards and enve­lopes to holders of business
reply permits, the five-centavo charge intended for said society shall be
collected in cash on each reply card or enve­lope delivered, in addition to the
required postage which may also be paid in cash.  An official receipt shall be issued for the
total postage and total extra charge received, in the manner shown in
subparagraph 1.

“‘5.  Mails entitled to franking privilege. –
Government agencies, officials, and other persons entitled to the franking
privilege under existing laws may pay in cash such extra charge intended for
said society, insteads of affixing the semi-postal
stamps to their mails, provided that such mails are presented at the
post-office window, where the five-centavo extra charge for said society shall
be collected on each piece of such mail matter. 
In such case, an official receipt shall be issued for the total sum thus
collected, in the manner stated in subparagraph 1.

“‘Mails under permits, metered mails and franked mails not
presented at the post-office win­dow shall be affixed with the necessary
semi-postal stamps.  If found in mail
boxes without such stamps, they shall be treated in the same way as herein
provided for other mails.'”

Adm. Order 9, amending Adm. Order 3, as amended, exempts
“Government and its Agencies and Instrumentalities Per­forming
Governmental Functions.” Adm. Order 10, amending Adm. Order 3, as amended,
exempts “copies of periodical publications received for mailing under any
class of mail matter, in­cluding newspapers and magazines admitted as
second-class mail.”

The FACTS. On September
15, 1963 the petitioner Benjamin P. Gomez mailed a letter at the
post office in San Fernando, Pam­panga.  Because
this letter, addressed to a certain Agustin Aquino of
1014 Dagohoy Street,
Singalong, Manila
did not bear the special anti-TB stamp required by the statute, it was returned
to the petitioner.

In view of this development, the petitioner brought this suit for
declaratory relief in the Court of First Instance of Pampanga,
to test the constitutionality of the statute, as well as the implementing
administrative orders issued, contending that it violates the equal protection
clause of the Constitution as well as the rule of uniformity and equality of
taxation.  The lower court declared the
statute and the orders unconstitutional; hence this appeal by the respondent
pos­tal authorities.

For the reasons set out in this opinion, the judgment appealed
from must be reversed.

I

Before reaching the merits, we deem it necessary to dispose of
the respondents’ contention that declaratory relief is unavail­ing because this
suit was filed after the petitioner had committed a breach of the statute.  While conceding that the mailing by the
petitio­ner of a letter without the additional anti-TB stamp was a violation of
Republic Act 1635, as amended, the trial court nevertheless re­fused to dismiss
the action on the ground that under section 6 of Rule 64 of the Rules of Court,
“If before the final termination of the case a breach or violation of . .
. a statute . . . should take place, the action may thereupon be converted into
an ordinary action.”

The prime specification of an action for declaratory relief is
that it must be brought “before breach or violation” of the statute
has been committed.  Rule 64, section 1
so provides.  Section 6 of the same rule,
which allows the court to treat an action for decla­ratory relief as an
ordinary action, applies only if the breach or violation occurs after the
filing of the action but before the termination thereof.^[3]

Hence, if, as the trial court itself admitted, there had been a
breach of the statute before the filing of this action, then indeed the remedy
of declaratory relief cannot be availed of, much less can the suit be converted
into an ordinary action.

Nor is there merit in the petitioner’s argument that the mailing
of the letter in question did not constitute a breach of the statute because
the statute appears to be addressed only to postal authorities.  The statute, it is true, in terms provides
that “no mail matter shall be accepted in the mails unless it bears such
semi-postal stamps.” it does not follow, however, that only postal
authorities can be guilty of violating it by accepting mails with­out the
payment of the anti-TB stamp.  It is
obvious that they can be guilty of violating the statute only if there are
people who use the mails without paying for the additional anti-TB stamp.  Just as in bribery the mere offer constitutes
a breach of the law, so in the matter of the anti-TB stamp the mere attempt to
use the mails without the stamp constitutes a violation of the statute.  It is not required that the mail be accepted
by postal authorities.  That re­quirement
is relevant only for the purpose of fixing the liability of postal officials.

Nevertheless, we are of the view that the petitioner’s choice of
remedy is correct because this suit was filed not only with res­pect to the
letter which he mailed on September 15, 1963, but also with regard to any other
mail that he might send in the future. 
Thus, in his complaint, the petitioner prayed that due course be given
to “other mails without the semi-postal stamps which he may deliver for
mailing . . . if any, during the period covered by Republic Act 1635, as
amended, as well as other mails hereafter to be sent by or to other mailers
which bear the required postage, without collection of additional charge of
five centavos prescribed by the said Republic Act.” As one whose mail was
returned, the petitioner is certainly interested in a ruling on the validity of
the statute requir­ing the use of additional stamps.

II.

We now consider the constitutional objections raised against the
statute and the implementing orders.

1.     
It is said that the statute is violative of the equal protec­tion clause of the
Constitution.  More specifically the
claim is made that it constitutes mail users into a class for the purpose of
the tax while leaving untaxed the rest of the population and that even among
postal patrons the statute discriminatorily grants exemption to newspapers
while Administrative Order 9 of the respondent Postmaster General grants a
similar exemption to offices performing governmental functions.

The five centavo charge levied by Republic Act 1635, as amended,
is in the nature of an excise tax, laid upon the exercise of a privilege,
namely, the privilege of using the mails. 
As such the objections levelled against it
must be viewed in the light of ap­plicable principles of taxation.

To begin with, it is settled that the legislature has the in­herent
power to select the subjects of taxation and to grant exemptions.^[4]
This power has aptly been described as “of wide range and
flexibility.”^[5]
Indeed, it is said that in the field of taxation, more than in other areas, the
legislature possesses the greatest freedom in classification.^[6]
The reason for this is that traditionally, classi­fication has been a device
for fitting tax programs to local needs and usages in order to achieve an
equitable distribution of the tax burden.^[7]

That legislative classifications must be reasonable is of course undenied.  But what
the petitioner asserts is that statutory classification of mail users must bear
some reasonable relation­ship to the end sought to be attained, and that absent
such relation­ship the selection of mail users is constitutionally
impermissible.  This is altogether a
different proposition.  As explained in Commonwealth
v. Life Assurance Co.,^[8]

“While the principle that there must
be a reason­able relationship between classification made by the legislation
and its purpose is undoubtedly true in some contexts, it has no application to
a mea­sure whose sole purpose is to raise revenue. . .  So long as the classification imposed is
based upon some standard capable of reasonable comprehension, be that standard
passed upon ability to produce revenue or some other legitimate distribution,
equal protection of the law has been afforded. 
See Allied Stores of Ohio, Inc. v. Bowers, supra 338 U.S.
at 527, 79 S. Ct. at 441; Brown-Forman Co. v. Commonwealth
of Kentucky, 217 U.S.
563, 573, 60 S. Ct. 573, 588 (1910).”

We are not wont to invalidate legislation on equal protec­tion
grounds except by the clearest demonstration that it sanctions invidious
discrimination, which is all that the Constitution forbids.  The remedy for unwise legislation must be
sought in the legisla­ture.  Now, the
classification of mail users is not without any rea­son.  It is based on ability to pay, let alone the
enjoyment of a pri­vilege, and on administrative convenience.  In the allocation of the tax burden, Congress
must have concluded that the contribu­tion to the anti-TB fund can best be
assured by those who can af­ford the use of the mails.

The classification is likewise based on considerations of
administrative convenience.  For it is
now a settled principle of law that “considerations of practical
administrative convenience and cost in the administration of tax laws afford
adequate grounds for imposing a tax on a well recognized and defined
class.”^[9]
In the case of the anti-TB stamp, undoubtedly, the single most im­portant and
influential, consideration that led the legislature to se­lect mail users as
subjects of the tax is the relative ease and con­venience of collecting the tax
through the post offices.  The small
amount of five centavos does not justify the great expense and in­convenience
of collecting through the regular means of collection.  On the other hand, by placing the duty of
collection on postal autho­rities the tax was made almost self-enforcing, with
as little cost and as little inconvenience as possible.

And then of course it is not accurate to say that the statute
constituted mail users into a class. 
Mail users were already a class by themselves even before the enactment
of the statute and all that the legislature did was merely to select their
class.  Le­gislation is essentially
empiric and Republic Act 1635, as amended, no more than reflects a distinction
that exists in fact.  As Mr. Justice
Frankfurter said, “to recognize differences that exist in fact is living
law; to disregard [them] and concentrate on some abstract identities is
lifeless logic.”^[10]

Granted the power to select the subject of taxation, the State’s
power to grant exemption must likewise be conceded as a necessary
corollary.  Tax exemptions are too common
in the law; they have never been thought of as raising issues under the equal
protection clause.

It is thus erroneous for the trial court to hold that because
certain mail users are exempted from the levy the law and admi­nistrative
officials have sanctioned an invidious discrimination of­fensive to the
Constitution.  The application of the
lower court’s theory would require all mail users to be taxed, a conclusion
that is hardly tenable in the light of differences in status of mail
users.  The Constitution does not require
this kind of equality.

As the United States Supreme Court has said, the legislature may
withhold the burden of the tax in order to foster what it conceives to be a
beneficent enterprise.^[11]
This is the case of newspapers which, under the amendment introduced by
Republic Act 2631, are exempt from the payment of the additional stamp.

As for the Government and its instrumentalities, their exemption
rests on the State’s sovereign immunity from taxation.  The State cannot be taxed without its consent
and such consent, being in derogation as its sovereignty, is to be strictly
construed.^[12]
Administrative Order 9 of the respondent Postmaster General, which lists the
various offices and instrumentalities of the Govern­ment exempt from the
payment of the anti-TB stamp, is but a restatement of this well-known principle
of constitutional law.

The trial court likewise held the law invalid on the ground that
it singles out tuberculosis to the exclusion of other diseases, which, it is
said, are equally a menace to public health. 
But it is never a requirement of equal protection that all evils of the
same genus be eradicated or none at all.^[13]
As this Court has had occasion to say, “if the law presumably hits the
evil where it is most felt, it is not to be overthrown because there are other
instances to which it might have been applied.”^[14]

2.  The petitioner further
argues that the tax in question is invalid, first, because it is not levied for
a public purpose as no special benefits accrue to mail users as taxpayers, and
second, because it violates the rule of uniformity in taxation.

The eradication of a dreaded disease is a public purpose, but if
by public purpose the petitioner means benefit to a taxpayer as a return for
what he pays, then it is sufficient answer to say that the only benefit to
which the taxpayer is constitutionally enti­tled is that derived from his
enjoyment of the privileges of living in an organized society, established and
safeguarded by the devotion of taxes to public purposes.  Any other view would preclude the levying of
taxes except as they are used to compensate for the burden on those who pay
them and would involve the abandonment of the most fundamental principle of
government – that it exists primarily to provide for the common good.^[15]

Nor is the rule of uniformity and equality of taxation in­fringed
by the imposition of a flat rate rather than a grated tax.  A tax need not be measured by the weight of
the mail or the extent of the service rendered. 
We have said that considerations of administrative convenience and cost
afford an adequate ground for classification. 
The same considerations may induce the legisla­ture to impose a flat tax
which in effect is a charge for the tran­saction, operating equally on all
persons with the class regardless of the amount involved.^[16]
As Mr. Justice Holmes said in sustain­ing the validity of a stamp act which
imposed a flat rate of two cents on every $100 face value of stock transferred,

“One of the stocks was worth $30.75 a
share of the face value of $100, the other $172.  The inequality of the tax, so far as actual
values are concerned, is manifest.  But,
here again equality in this sense has to yield to practical considerations and
usage.  There must be a fixed and
indisputable mode of ascertaining a stamp tax. 
In another sense, more­over, there is equality.  When the taxes on two sales are equal, the
same number of shares is sold in each case; that is to say, the same privi­lege
is used to the same extent.  Valuation is
not the only thing to be considered.  As
was pointed out by the court of appeals, the familiar stamp tax of 2 cents on
checks, irrespective of income or earning capacity, and many others, illustrate
the necessity and practice of sometimes substituting count for weight. . .
.”^[17]

According to the trial court, the money raised from the sales of
the anti-TB stamps is spent for the benefit of the Philippine Tuberculosis
Society, a private organization, without appro­priation by law.  But as the Solicitor General points out, the
Society is not really the beneficiary but only the agency through which the
State acts in carrying out what is essentially a public function.  The money is treated as a special fund and as
such need not be appropriated by law.^[18]

3.  Finally, the claim is made that the statute is
so broadly drawn that to execute it the respondents had to issue administrative
orders far beyond their powers.  Indeed,
this is one of the grounds on which the lower court invalidated Republic Act
1631, as amended, namely, that it constitutes an undue delegation of legislative
power.

Administrative Order 3, as amended by Administrative Orders 7 and
10, provides that for certain classes of mail mat­ters (such as mail permits,
metered mails, business reply cards, etc.), the five-centavo charge may be paid
in cash instead of the purchase of the anti-TB stamp.  It further states that mails deposited during
the period August 19 to September 30 of each year in mail boxes without the
stamp should be returned to the sender, if known, otherwise they should be
treated as nonmailable.

It is true that the law does not expressly authorize the collection
of five centavos except through the sale of anti-TB stamps, but such authority
may be implied in so far as it may be necessary to prevent a failure of the
undertaking.  The authority given to the
Postmaster General to raise funds through the mails must be liberally
construed, consistent with the principle that where the end is required the
appropriate means are given.^[19]

The anti-TB stamp is a distinctive stamp which shows on its face
not only the amount of the additional charge but also that of the regular
postage.  In the case of business reply
cards, for instance, it is obvious that to require mailers to affix the anti-TB
stamp on their cards would be to make then pay much more be­cause the cards
likewise bear the amount of the regular postage.

It is likewise true that the statute does not provide for the
disposition of mails which do not bear the anti-TB stamp, but a declaration
therein that “no mail matter shall be accepted in the mails unless it
bears such semi-postal stamp” is a declaration that such mail matter is nonmailable within the meaning of section 1952 of the
Administrative Code.  Administrative
Order 7 of the Postmaster General is but a restatement of the law for the
guidance of postal officials and employees. 
As for Administra­tive Order 9, we have already said that in listing the
offices and entities of the Government exempt from the payment of the stamp,
the respondent Postmaster General merely observed an esta­blished principle,
namely, that the Government is exempt from taxation.

ACCORDINGLY, the judgment a quo is reversed,
and the complaint is dismissed, without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Sanchez,
Angeles, and Capistrano, JJ., concur.

Fernando, J., concurs in a separate
opinion.

Zaldivar, J., on leave.

^[1]
Approved on June 30, 1957.

^[2]
Approved on June 18, 1960.

^[3] See
3 M. Moran, Comments on the Rules of Court 138 (6th ed., 1963).

^[4]
Carmichael v. Southern Coal & Coke Co., 301 U.S.
495 (1937); Lutz v. Araneta, 98 Phil. 148
(1955).

^[5]
Louisville Gas & B. Co v. Coleman, 277 U.S.
32 (1928).

^[6]
Madden v. Kentucky, 309
U.S 83 (1940); Citizens’ Teleph. Co.
v. Fuller, 229 U.S.
322 (1913).

^[7]
Madden v. Kentucky, supra,
note 6.

^[8] 419
Pa. 370, 214 A.2d 209, 214-15 (1965), appeal dismissed, Life Assur. Co. v. Pennsylvania,
348 U.S. 268
(1966).

^[9]
Fernandez. v. Wiener, 327 U.S.
340, 360 (1945); accord, Carmichael v.
Southern Coal & Coke Co., supra, note 4; Weber v. City
of New York, 195 N.Y.S. 2d 269
(1959).

^[10]
Morey v. Doud, 354 U.S.
457, 472 (1957) (dissent).

^[11] Carmichael
v. Southern Coal & Coke Co., supra, note 4, at 512.

^[12] Cf.
Town of Indian
Lake v. State Brd. of E. & A., 45 Misc, 2d
463, 257 N.Y.S. 2d 301 (1965).

^[13]
Railway Express Agency v. New York,
336 U.S. 106
(1949).

^[14]
Lutz v. Araneta, 98 Phil. 148, 153 (1955); accord,
McLaunlin v. Florida,
379 U.S. 184 (1964).

^[15] Carmichael
v. Southern Coal & Coke Co., supra, note 4 at 522-523.

^[16] See
Weber v. City of New York, supra,
note 9; North Aim. Co. v. Green, 120 So. 2d 603
(1960).

^[17] New
York ex rel.
Hatch v. Reardon, 204 U.S.
152, 159-160 (1907).

^[18]
Const, art. VI, sec. 23(1).

^[19] See
Lo Cham v. Ocampo,
77 Phil. 635 (1946); Rev. Adm. Code, Code, sec. 551.

Clean
Clean

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