THE GOVERNMENT OF THE PHILIPPINE ISLANDS, PLAINTIFF AND APPELLANT, VS. THE HONGKONG & SHANGHAI BANKING CORPORATION, THE NATIONAL CITY BANK OF NEW YORK, THE CHARTERED BANK OF IND…

The
appellees are banking institutions doing business in this country. This
action was brought by the appellant to determine the liability of the
appellees under section 11 of Act No. 4007. All the appellees demurred
to the complaint upon the ground that it did not state facts sufficient
to constitute a cause of action, in that the statutory provision relied
upon by the appellant was unconstitutional. The National City Bank of
New York alleged further, in support of the demurrer filed by it, that
there was a misjoinder of parties defendant, and that section 11 of Act
No. 4007 did not impose any tax upon national banking associations, in
which class it belonged. The court below sustained the demurrers filed
by the appellees, on the sole ground that the complaint did not allege
a cause of action, because the statutory provision involved was
unconstitutional.

The question now presented is the constitutionality of section 11 of Act No. 4007, which reads as follows:

“Sec.
11. The provisions of existing law to the contrary notwithstanding, the
total annual expenses of the Bureau of Banking shall be reimbursed
annually to the Government by assessment levied upon all banking
institutions subject to inspection by the Bank Commissioner. The
proportion of expenses of the Bureau of Banking to be assessed against
each such banking institution shall be the same as the proportion which
its average total assets bear to the average total assets of all such
banking institutions during the year in which the expenses were
incurred.”

1. Appellees contend
   that the subject matter contained in this section is not embraced in
   the title of the Act, in violation of section 3 of the Jones Law which
   provides, among other things: “That no bill which may be enacted into
   law shall embrace more than one subject, and that subject shall be
   expressed in the title of the bill.” This provision is similar to those
   found in the constitutions of most of the Stales of the Union. It has
   been said that the purpose of such a provision is to prevent the evils
   of so-called “omnibus bills” and surreptitious or unconsidered
   legislation. “The mischief sought to be remedied by the requirement of
   a single subject or object of legislation was the practice of bringing
   together in one bill matters having no necessary or proper connection
   with each other but often entirely unrelated and even incongruous. By
   the practice of incorporating in proposed legislation of a meritorious
   character provisions not deserving of general favor but which, standing
   alone and on their own merits, were likely to be rejected, measures
   which could not have been carried without such a device and which were
   sometimes of a pernicious character were often incorporated in the
   laws; for, to secure needed and desirable legislation, members of the
   legislature were, by this means, often induced to sanction and actually
   vote for provisions which, if presented as independent subjects of
   legislation, would not have received their support. It was also the
   practice to include in the same bill wholly unrelated provisions, with
   the view of combining in favor of the bill the supporters of each, and
   thus securing the passage of several measures, no one of which could
   succeed on its own merits. To do away with this hodge podge or ‘log
   rolling’ legislation was one, and perhaps the primary, object of these
   constitutional provisions. Another abuse that developed in legislative
   bodies was the practice of enacting laws under false and misleading
   titles, thereby concealing from the members of the legislature, and
   from the people, the true nature of the laws so enacted. It is to
   prevent surreptitious legislation in this manner that the subject or
   object of a law is required to be stated in the title. While the
   objects of these constitutional provisions are variously stated, the
   authorities are agreed that they were adopted to remedy these and
   similar abuses. The purposes of these constitutional provisions have
   been summarized as follows: (1) to prevent ‘log rolling’ legislation;
   (2) to prevent surprise, or fraud, in the legislature by means of
   provisions in bills of which the titles give no intimation; and (3) to
   apprise the people of the subject of legislation under consideration.”
   (25 R. C. L., pp. 834-836.)

   Constitutional provisions
   relating to the subject matter and titles of statutes should not be so
   narrowly construed as to cripple or impede proper legislation. In
   Detroit vs.
   Detroit Citizens’ Street R. Co. (184 U. S., 368, 392; 46 Law. ed., 592,
   609), the Supreme Court of the United States quoted with approval the
   following language of Judge Cooley: “We must give the constitutional
   provision a reasonable construction and effect. The Constitution
   requires no law to embrace more than one object, which shall be
   expressed in its title. Now, the object may be very comprehensive and
   still be without objection, and the one before us is of that character.
   But it is by no means essential that every end and means necessary or
   convenient for the accomplishment of the general object should be
   either referred to or necessarily indicated by the title. All that can
   reasonably be required is that the title shall not be made to cover
   legislation incongruous in itself, and which by no fair intendment can
   be considered as having a necessary or proper connection.”

   The requirement that the subject of an act shall be expressed in its
   title should receive a reasonable and not a technical construction.
   (Carter County vs.
   Sinton, 120 U. S., 517,522; 30 Law. ed., 701, 702.) It is sufficient if
   the title be comprehensive enough reasonably to include the general
   object which a statute seeks to effect, without expressing each and
   every end and means necessary or convenient for the accomplishing of
   that object. Mere details need not be set forth. (Knights Templars’
   & Masons’ Life Indemnity Co. vs. Jarman, 187 U. S., 197; 47 Law. ed., 139.) The title need not be an abstract or index of the act. In Mahomet vs.
   Quackenbush; (117 U. S., 508; 29 Lew. ed., 982), the General Assembly
   of the State of Illinois passed an Act entitled: “An Act to Amend the
   Articles of Association of the Danville, Urbana, Bloomington and Pekin
   Railroad Company, and to Extend the Powers of and Confer a Charter upon
   the Same.” The body of the Act provided that incorporated towns or
   townships in counties along the railroad route may subscribe to its
   capital stock, and further provided the manner of holding elections in
   regard to the subscription. The Supreme Court of the United States held
   that the title of the act covered the provisions in its body within the
   purpose of section 23 of article 3 of the Illinois Constitution of 1848
   which provided that: “And no private or local law which may he passed
   by the General Assembly shall embrace more than one object, and that
   shall be expressed in the title.” In the course of its decision, the
   court said: “The point now made is that the statute, so far as it
   undertakes to authorize municipalities to subscribe to the capital
   stock of the corporation, is unconstitutional because it embraces two
   distinct subjects, one the incorporation of the railroad company, and
   the other an enlargement of the corporate powers of municipal
   corporations, the first of which alone is expressed in the title. This
   objection, it seems to us, is fully disposed of by the case of
   Supervisors of Schuyler Co. vs. Rock Island, etc. R. R. Co. (25
   111, 182), decided by the Supreme Court of Illinois in 1860. There the
   title was ‘An Act to Incorporate the Rock Island & Alton Railroad
   Company,’ and the Act, besides incorporating the company, authorized
   counties to subscribe to the stock. As to this the court said, speaking
   through Chief Justice Caton: ‘We think the title of this Act sufficient
   to embrace the whole of the law, and that it is a compliance with the
   constitutional requirement. All the provisions of the Act are
   appropriately designed to carry out the object of the corporation. If
   it was proper to authorize subscriptions to the stock, it was certainly
   proper to enable individuals or counties to subscribe and specify the
   terms and conditions on which they might subscribe, and the mode of
   making the subscription.’

   “In States where constitutional
   provisions like that now under consideration have been decided to be
   mandatory, and not directory only, it has generally been held that the
   requirement is satisfied if the law has but one general object, and
   that is clearly expressed in the title. It is enough if the body of the
   Act is germane to the title.”

   The title of Act No. 4007 is: “An Act to reorganize the departments,
   bureaus and offices of the Insular Government, and for other purposes.”
   At the time of the passage of this Act, the Bureau of Banking was
   already in existence as one of the bureaus of the Insular Government.
   (Act No. 3519.) It seems clear therefore that that bureau is embraced
   in that title. On the other hand, the contents of section 11 are
   germane to and connected with the organization and maintenance of said
   bureau.

2. It is now beyond question that the banking business is so affected with
   a public interest as to justify its regulation and control under the
   police power of the state. (Noble State Bank vs. Haskell, 219
   U. S., 104; 55 Law. ed., 112.) “Since banks are indispensable agencies
   through which the industry, trade and commerce of all civilized
   countries and communities are carried on, the business which they
   transact, though for private profit, is of a preeminently public
   nature, and is therefore universally recognized as a proper subject of
   legislative regulation under the police power of the state.” (3 R. C.
   L., 379.) The legislature may establish such reasonable and general
   regulations of banking institutions as may be essential to the public
   safety, and provide for the enforcement of such regulations by a board
   or bureau supported by moderate assessments upon those engaging in the
   banking business. (Oxford vs. Love, 250 U. S., 603; 63 Law. ed., 1165.)

3. The National City Bank of New York, one of the herein appellees, being
   an agency of the United States, was not subject to taxation by the
   Philippine Government except as permitted by Act of Congress. The form
   of taxation imposed under section 11 of Act No. 4007 was not permitted
   by any act of Congress. (Posadas vs. National City Bank, 296 U. S., 497; 80 Law. ed., 351.)

Our conclusion is that section 11 of Act No. 4007 is constitutional. It
does not, however, apply to the appellee, the National City Bank of New
York.

The judgment appealed from is affirmed with regard to
the appellee, the National City Bank of New York, and reversed as to
the other appellees; and the case is remanded to the court below for
further proceedings in conformity with this opinion. So ordered.

Avanceña, C. J., Villa-Real, and Imperial, JJ., concur.

---

 

CONCURRING AND DISSENTING

LAUREL, J.:

In
so far as the court upholds the power of the Legislature to impose the
tax on banks generally, I agree. The provision here involved was taken
from section 21 of the Federal Reserve Act of the United States.
(December 23, 1913, c. 6, sec. 21, 38 Stat., 271; See also
for other acts sec. 482 of Title 12, U. S. C. A.) The imposition is
within the taxing power of the State. In so far also as the decision of
the majority implies the rejection of the contention that the levy is
in violation of section 29 of the Jones Law, my coincidence likewise
goes. But, I dissent from so much of the majority opinion as holds that
section 11 of Act No. 4007 does not conflict with paragraph 17 of
section 3 of the Jones Law which provides “That no bill which may be
enacted into law shall embrace more than one subject, and that subject
shall be expressed in the title of the bin.” Upon this point, I concur
in the conclusion of Justice Concepcion.

To set aside a law
because of repugnancy to the fundamental law is a serious matter. It is
a power which, in the language of Judge Cooley (Const. Lim., 7th ed.,
chap. VII, 227, 228), a judge “conscious of the fallibility of the
human judgment, will shrink from exercising in any case where he can
conscientiously and with due regard to duty and official oath decline
the responsibility.” I have no hesitancy in saying that, when the
instant case was submitted for deliberation, my immediate reaction was
to take for granted the validity of the challenged statute. In the
first place, there is the almost time-honored presumption In favor of
the validity of legislative acts. It is only proper, and a merited
respect for the judgment of a coordinate department of the government
requires, that we should sustain a legislative act whenever it is
possible to do so. It must be presumed, as courts have always, said,
that the legislators and the Executive have been true to their oath to
support and respect the Constitution and that in enacting and approving
a particular statute they did not intend to violate that fundamental
law. If there is any doubt as to the validity of a law that law should
be sustained. So vital is this principle that the new Constitution of
the Philippines, while recognizing the power of the courts,
particularly this court, to set aside legislative acts in contravention
thereof, provides for two safeguards against hasty invalidation of
statutes. Section 10 of Article VIII reads: “All cases involving the
constitutionality of a treaty or law shall be heard and decided by the
Supreme Court in banc, and no treaty or law may be declared
unconstitutional without the concurrence of two-thirds of all the
members of the court.” In other words, an act of the legislature may be
declared unconstitutional only if (1) after consideration of all the
members of this court (2) two-thirds thereof should agree to take such
action. In the second place, the courts, whenever possible, must give
life to the sovereign will as expressed by the political departments of
the government. As stated in the case of Angara vs. Electoral
Commission [1936], 35 Off. Gaz., 23), “the judiciary in the
determination of actual cases and controversies must reflect the wisdom
and justice of the people as expressed through their representatives in
the executive and legislative departments of the government.” The
responsibility for the preservation of our institutions is not the
exclusive concern of the courts. The legislators, as a great jurist has
once said, are the guardians of the liberties and welfare of the people
in quite as great a degree as the courts. (Holmes, X, in Missouri,
Kansas, & T. R. Co. vs. May [1904], 194 U. S., 267, 270; 48
Law. ed., 971, 973.) I have not overlooked the contemporary historical
fact that in the United States, the imputed failure of the Ugliest
court to react to popular will as expressed by the representatives of
the people in Congress has given rise to criticism and the submission
of various proposals aimed at the “rejuvenation” of that court, or
calculated to alter entirely the system of judicial authority or
organization provided in the Federal Constitution. Respect for the
legislature, however, or a desire to effectuate the legislative will,
cannot be carried to the extent of sanctioning a constitutional breach.
A statute may be wise, its purpose may be good, but if it violates the
fundamental law it is bad. As I proceeded to a more careful examination
of the facts and went deeper into fundamental principles, I came to the
conclusion that section 11 of Act No. 4007 is unconstitutional because
it violates paragraph 17, section 3, of the Jones Law, which was the
organic law then in force. It is true that constitutional provisions
relating to the subject matter and titles of statutes should be
construed liberally to uphold, rather than to cripple or impede proper
legislation, but such provisions should be so construed as to prevent
trickery or evasion and to guard against the evils intended to be
prevented (59 C. J., pp. 794, 795).

Historically, the
requirement that the title of a bill should give intimation of its
contents was known in England and practised there, long before there
were parliamentary bodies in America; but this arose merely from custom
and no bill which Parliament enacted in disregard of the requirement
could be set aside by the courts. Just as the first written
constitution was framed in America, so, too, it was there that for the
first time a requirement as to the particularity of the title was
inserted in a constitution. The Constitution of Georgia of 1789
declared, “nor shall any law or ordinance pass containing any matter
different from what is expressed in the title thereof.” This provision
was copied in other states of the Union. In the course of time, another
principle was embodied in state constitutions, to wit, that the bill
shall treat of only one subject. Sometimes, as in Michigan, New Jersey,
Louisiana, and West Virginia, the word “object” is substituted for
“subject”. In Idaho, Illinois, Indiana, Montana, New Mexico, North
Dakota, Oregon, Iowa, Oklahoma and Wyoming, it is specifically provided
that so much of the act as is not expressed in the title is void. A
typical provision is to be found in Article IV, section 19, of the
Constitution of Indiana of 1851, as follows:

“Every
act shall embrace but one subject and matters properly connected
therewith; which subject shall be expressed in the title. But if any
subject shall be embraced in an act which shall not be expressed in the
title, such act shall be void only as to so much thereof as shall not
be expressed in the title.”

In the Federal
Constitution and in the state constitutions of Arkansas, North Carolina
and most New England states, there are no title requirements. In
Mississippi, the committee of the legislature to which a bill is
referred is required by the constitution to “express in writing its
judgment of the sufficiency of the title.” In some states, including
Missouri and Montana, exception is made of general appropriation bills,
general revenue bills, or bills adopting codes or revisions of
statutes. In New York and Wisconsin, the provisions apply only to local
or private bills. This was the case under the Philippine Bill of July
1, 1902 which provided “That no private or local bill which may be
enacted into law shall embrace more than one subject, and that subject
shall be expressed in the title of the bill.” (Sec. 5, par. 17.) The
scope of the prohibition was broadened in the Jones Law by the omission
of the words “private or local.” The provisions of the Jones Law were
incorporated in the new Constitution of the Philippines almost
verbatim. And, instead of placing the prohibition on the bill of
rights, as was done in the Philippine Bill and the Jones Law, the
framers of the new Constitution placed it under Article VI which treats
of the Legislative Department, the prohibition being essentially a
restriction upon legislative procedure.

The insertion of the
prohibition in constitutions was motivated by a desire to correct
certain evils. These evils are described by the Supreme Court of
Michigan in People vs. Mahaney ([1865], 13 Mich., 481, 494, 495). Said the court:

“The
history and purpose of this constitutional provision are too well
understood to require elucidation at our hands. The practice of
bringing together into one bill subjects diverse in their nature and
having no necessary connection, with a view to combine in their favor
the advocates of all, and thus secure the passage of several measures,
no one of which could succeed upon its own merits, was one both
corruptive of the legislator and dangerous to the state. It was
scarcely more so, however, than another practice, also intended to be
remedied by this provision, by which, through dexterous management,
clauses were inserted in bills of which the titles gave no intimation,
and their passage secured through legislative bodies whose members were
not generally aware of their intention and effect. There was no design
by this clause to embarrass legislation by making laws unnecessarily
restrictive in their scope and operation, and thus multiplying their
number; but the framers of the Constitution meant to put an end to
legislation of the vicious character referred to, which was little less
than a fraud upon the public, and to require that in every case the
proposed measure should stand upon its own merits, and that the
legislature should be fairly notified of its design when required to
pass upon it.” (See also Central Capiz vs. Ramirez [1920], 40 Phil., 883; Agcaoili vs. Suguitan [1926], 48 Phil., 676.)

Act No. 4007 is entitled, “An Act to reorganize the departments,
bureaus and offices of the Insular Government, and for other purposes.”
The purpose, then, of the Act is to reorganize the various departments,
bureaus and offices of the Philippine Government. The constitutional
requirement regarding the subject and title of bills is mandatory. A
disregard thereof is fatal. It is only in this way that the purposes of
the constitutional requirement may be accomplished. Thus, if the
subject of an act is more than one, or if the subject though one is not
expressed in the title, the act is void in its entirety or in such
parts thereof as violate the Organic Act. Only such portions of the Act
as come reasonably within its title are valid. As we have seen, in
Indiana and at least nine other states, there are constitutional
provisions to this effect. But the absence in other constitutions of
similar provisions have not prevented courts from arriving at the same
conclusion. As the authorities uniformly hold, “nothing can validly be
included in the body of a statute which is not expressed in or covered
by the title, and all parts of an act which are not within its title
are unconstitutional and void, even though such provisions might
properly have been included in the act under a broader title.” (59 C.
J., pp. 811, 812.)

“Since these provisions
are mandatory, a statute which does not comply with them must be void
either in whole or in part. So much of the subject of a statute as is
not expressed in the title, or is not germane to the subject expressed
in the title, is invalid. In other words, where an act is broader than
its title it can only be operative as to that part of it which is
indicated by its title; for the title of an act defines its scope and
it can contain no valid provision beyond the range of the subject or
object there stated.” (25 R. C. L., p. 840.)

Do the provisions of section 11 come reasonably within the title of Act
No. 4007? The majority hold that they do. I disagree. Said section 11
provides as follows;

“The provisions of
existing law to the contrary notwithstanding, the total annual expenses
of the Bureau of Banking shall be reimbursed annually to the Government
by assessment levied upon all banking institutions subject to
inspection by the Bank Commissioner. The proportion of expenses of the
Bureau of Banking to be assessed against each such banking institution
shall be the same as the proportion which its average total assets bear
to the average total assets of all such banking institutions during the
year in which the expenses were incurred.”

The foregoing section does not deal with reorganization. It treats of
taxation or assessment for the purpose of taxation. It, therefore, is
not covered by the title of the Act. It is, of course, sufficient if a
general subject is stated in the title. All matters having a natural
connection therewith and not foreign thereto are deemed embraced within
it. (25 R. C. L., p. 856.) To require otherwise, to narrowly construe
the constitutional provisions to make the title a complete index of the
contents of an act, would make legislation difficult if not impossible.
It would hamper legislation and place statutes under the constant
danger of invalidation. It should be observed, however, that section 11
does not cover a matter germane to the general subject stated in the
title of the Act. One who reads the title will not expect to find that
section in the body of the Act. He would not be put on inquiry as to
the contents of the Act. The Act, therefore, is misleading. It refers
to one subject in the title but treats of another in the body.

“* * * while technical accuracy is not essential, and the subject need
not be stated in express terms where it is clearly inferable from the
details set forth, a title which is so uncertain that the average
person reading it would not be informed of the purpose of the enactment
or put on inquiry as to its contents, or which is misleading, either in
referring to or indicating one subject where another or different one
is really embraced in the act, or in omitting any expression or
indication of the real subject or scope of the act, is bad. (59 C J.,
pp. 804, 805.)

The words “and for other
purposes,” which close the title, are not sufficient to put any one on
inquiry as to the contents of the Act. Those words do not justify the
insertion of section 11. They cannot be used as a cloak to hide within
them all possible legislation. They are meaningless surplusage.
“Nothing which the act could not embrace without them can be brought in
by their aid.” (Cooley on Constitutional Limitations, 8th ed., vol. I.,
p. 302 and cases cited.)

Act No. 4007 is a reorganization
act and should have limited itself to reorganization, like the similar
acts which preceded it. An examination of all the reorganization acts
prior to Act No. 4007 reveals that no provision is made for the support
of maintenance of any bureau or office in the Insular Government,
directly from the proceeds of taxes collected from private firms or
individuals.

One of the early acts of the Philippine
Commission was Act No. 222 entitled, “An Act providing for the
organization of the Departments of the Interior, of Commerce and
Police, of Finance and Justice, and of Public Instruction.” It was
approved by the Commission on September 6, 1901 and took effect on that
same date. The various bureaus and offices were distributed among the
four departments which, by order of the President of the United States
of September 1, 1901, were headed by the four members of the Philippine
Commission. A Bureau of Banks, Banking, Coinage, and Currency was to be
placed under the executive control of the Department of Finance and
Justice. There was no provision as to how that bureau or any other
bureau or office was to be supported or maintained.

On
October 26, 1905, the Philippine Commission enacted “The Reorganization
Act” which was “An Act abolishing certain Bureaus of the Insular
Government, reducing the number of Bureaus by consolidating certain
Bureaus with others, prescribing the duties of the various Bureaus and
certain officials thereof, fixing the salaries of Chiefs and Assistant
Chiefs of Bureaus and certain other officials thereof, reorganizing the
Departments of the Interior, Commerce and Police, Finance and Justice,
and Public Instruction, assigning certain Bureaus to the immediate and
direct executive control of the Governor-General, and for other
purposes.” The Act took effect on November 1, 1905. The list of Bureaus
of the Insular Government did not include a Bureau of Banks, Banking,
Coinage and Currency but the Department of Finance and Justice was
given “general supervision of banks, banking, coinage, and currency.”
The Act provided for the salaries of the various heads of bureaus but
did not contain the slightest intimation that any bureau was to be
supported other than by Insular funds duly appropriated. The supplies
furnished or services rendered to any branch of the Insular Government
or any provincial or municipal government by the Bureau of Science, the
Bureau of Supply or the Bureau of Posts were to be paid by the Bureau
or local government concerned. But this does not indicate that the
bureau furnishing the supplies or rendering the service shall be
supported directly out of the income they were to receive. Besides, the
income is not derived directly from private individuals. And where
income is so derived, as in the case of sales made and services
rendered by the Bureau of Science to the public, the income derived
together with the incomes from branches or local political subdivisions
of the Government were to be “deposited with the Insular Treasurer * *
* and * * * considered as repayments to the appropriation for the
Bureau of Science and * * * so credited on the books of the Auditor.”
In any event, what is notable is that the income is derived not from
taxation but from sales made or services rendered, in some cases, to
the public and, in most cases, to the various units and
instrumentalities of the Government itself.

The action of
the President of the United States and the Philippine Commission in
establishing the four executive departments was ratified and confirmed
by the Philippine Bill of July 1, 1902. Acts No. 222 and 1407 were
responsible for the establishment of the executive departments and the
different bureaus and offices thereunder, up to 1916 when the Jones Act
of August 29, 1916 went into effect. Section 22 of this Autonomy Act
authorized the Philippine Legislature to provide for the reorganization
of the executive departments of the Philippine Government. Pursuant to
this authority, the Philippine Legislature enacted Act No. 2666 which
went into effect upon its approval on November 18, 1916. The Act was
entitled simply, “An Act to reorganize the Executive Departments of the
Government of the Philippine Islands.” Six executive departments were
created, to wit, the Department of the Interior, the Department of
Public Instruction, the Department of Finance, the Department of
Justice, the Department of Agriculture and Natural Resources, and the
Department of Commerce and Communications. The former Department of
Finance and Justice, as we see, was split into two. To the separate
Department of Finance was placed, among other things, “the general
supervision over banks, banking transactions, coinage, currency, and
funds the investment of which may be authorized by law.” No provision
whatsoever, in this short significant act, authorized the imposition of
a tax for the support of any department, bureau or office of the
Insular Government.

Act No. 2666 was followed by Act No.
2803 entitled, “An Act to amend certain provisions of the
Administrative Code, regulating certain details of the functions and
authority of the Executive Departments, and for other purposes.” The
organization of the various executive departments and bureaus was not
altered except by providing that, “For administrative purposes the
Governor-General shall be considered the Department Head of the Bureau
of Audits, the Bureau of Civil Service, and of all other offices and
branches of the service not assigned by law to any Department.” The
powers of the Department Heads were amplified and specifically
outlined, but there was no provision as to the way by which a bureau or
office shall be supported.

The general reorganization laws
above referred to were followed by Act No. 4007 which is involved in
the present case. It is fitting to again observe that in those prior
reorganization acts no provision whatsoever existed to the effect that
a bureau shall be supported out of funds derived from taxation. Those
acts properly limited themselves to the accomplishment of the purpose
for which they were enacted, namely, the reorganization of the various
departments and the several bureaus and offices under them. That
practice was never departed from. It was only in Act No. 4007 that a
deviation occurred. This Act did not limit itself to the accomplishment
of the object stated in its title. It went further and provided in
section 11 thereof for something which is not germane to the object of
reorganization, namely, the reimbursement annually to the government by
assessment, levied upon all banking institutions subject to inspection
by the Bank Commissioner, of the total annual expenses of the Bureau of
Banking. In so doing, the Act ran aground. I do not deny the authority
of the Legislature to adopt such a provision. I concede the power of
the Legislature in that regard. What I do not hold permissible, upon
the facts of the present case, is the inclusion in a reorganization Act
of a provision on the subject of taxation. In the majority opinion
reference is made to Mahomet vs. Quakenbush (117 U. S., 508; 29
Law. ed., 982) as the principal authority relied upon in support of the
view taken. There is, however, no analogy between that case and the
case at bar. It is clear, under the doctrine of Mahomet case, that a
company may be incorporated and at the same time the municipalities
authorized to subscribe to its capital stock. These matters are one or
at least wholly germane to each other. It is not the situation in our
case. I have always been under the impression that to reorganize is not
to tax and that to tax is not to organize and that reorganization and
taxation are two different things. In no way can they be regarded as
akin, so far and as far as I can see. Taxation is closer to police
power and eminent domain than it is to reorganization.

The
Legislature may reorganize bureaus and offices and do this as many
times as it may desire but this power is subject to the the
constitutional limitation that the act of reorganization shall not
contain matter foreign to the purpose. I am willing to admit that the
Legislature, in creating bureaus and offices, may provide for the
manner by which they are to be supported. Where a general purpose is
stated in the title of an act, the means for the accomplishment of that
general purpose may be provided for in that act. But from this premise
to the conclusion reached by this court, there is, it seems to me, a
wide gap. The provisions of section 11 are not necessary to render
effectual the principal object of the statute which is to reorganize
the different departments, bureaus and offices of the government.
Besides, at the time of the passage of Act No. 4007, there was a
separate law on the contribution of banks. That was Act No. 3519, which
was one of a series of laws affecting banking institutions enacted by
the Philippine Legislature during the special sessions of 1929. The Act
accomplished the desire early expressed in Act No. 222 of creating an
independent Bureau of Banking. A whole chapter (Chapter 41-A) was
inserted in the Administrative Code. One of the sections covered by the
chapter is section 1637 which provides:

“Examinations into condition of institutions.—It
shall be the duty of the Bank Commissioner, personally or by deputy, at
least once in every twelve months, and at such other times as he may
deem expedient, to make an examination of the books of every
institution within the purview of this chapter in order to ascertain
its cash and available assets in the Philippine Islands, and its
general condition and method of doing business, and to make report of
the same to the Secretary of Finance, who will transmit a copy of said
report to the Governor-General.

” ‘Every such institution
shall afford to the Bank Commissioner, and to his authorized deputy,
full opportunity to examine its books, its cash, its available assets,
and general condition, at any time when requested so to do by the
Commissioner: Provided, however, That none of the reports and
other papers relative to the examination of banking institutions shall
be open to inspection by the public insofar as such publicity shall be
incidental to the proceedings hereinafter authorized or necessary for
the prosecution of violations in connection with the business of the
bank.

” ‘The total annual expenses of the Bureau of Banking
shall be reimbursed annually to the Government to the extent of
one-half by assessment levied upon all institutions subject to
inspection by the Bank Commissioner. The proportion of expenses of the
Bureau of Banking to be assessed against each such banking institutions
shall be the same as the proportion which its average total assets bear
to the average total assets of all such banking institutions during the
year in which the expenses were incurred, but the one-half of the total
expenses of the Bureau of Banking assessed against all banking
institutions in any one year shall not exceed sixty thousand pesos. The
Bank Commissioner shall by regulation prescribe the form, manner, and
time for the levying and payment of the assessment.” ‘

There are many other provisions and the means for their enforcement are
also stated. The enactment of Act No. 3519, independently of any
previous reorganization act, is a tangible proof that the members of
the Legislature regarded the matters covered by it are foreign to
reorganization.

It should also be observed that Act No. 4007 does not merely incorporate the Banking Law or a portion thereof, but amends a portion of that law. If a defect in Act No. 3519 was found by the members of the Legislature, the Act itself should have been amended.

In this connection, it will be advisable to examine the history of the
bill which finally was enacted as Act No. 4007. It is a settled rule
that in construing an Act, the proceedings of the legislature in
reference to it may be inquired into and taken into consideration. If
in determining the intention of the lawmaker, we are permitted to look
to prior laws on the subject and to investigate the antecedents or the
legislative history of the statute involved (Director of Lands vs. Abaja [1936], 35 Off. Gaz., 991; Loewenstein vs. Page [1910], 16 Phil., 84; 921 U. S. vs. De Guzman [1915], 30 Phil., 416, 419; Tamayo vs. Gsell [1916], 35 Phil., 953, 963; Mitsui Bussan Kaisha vs. Hongkong and Shanghai Banking Corporation [1917], 36 Phil., 27, 36; Go Chioco vs. Martinez [1923], 45 Phil., 256, 270, 276; Portillo vs. Salvani [1930], 54 Phil., 543, 546. See also Kepner vs. United States [1904], 195 U. S., 100; 24 Sup. Ct., 797; 49 Law. ed., 114; 11 Phil., 669, 692; Serra vs. Mortiga [1907], 204 U. S., 470; 27 Sup. Ct., 343; 51 Law. ed., 571; 11 Phil., 762, 766; Alzua and Arnalot vs. Johnson [1912], 21 Phil., 308, 331; aff’d. in 231 U. S., 106; 34 Sup. Ct. 27; 58 Law. ed., 142; United States vs.
Katz [1925], 271 U. S., 354; 46 Sup. Ct., 513; 72 Law. ed., 986), we
may also avail ourselves of the actual proceedings of the legislative
body to assist in determining the construction of a statute of doubtful
import (U. S. vs. Pong, 34 Phil., 729; Palanca vs. City of Manila and Trinidad, 41 Phil., 125. See also,
59 C. J., pp. 1077-1019; 25 R. C. L., pp. 271, 272; 11 Lewis’
Sutherland, Statutory Construction, sec. 471, pp. 879-883). More than
this “official acts of the Legislature” are matters judicially
recognized (sec. 275, Code of Civil Procedure).

An
examination of the proceedings which led to the enactment of Act No.
4007 shows that section 11 of that Act was not included in the body of
the Act when it passed both the House of Representatives and the Senate
of the Philippine Legislature. Act No. 4007 was originally House Bill
No. 1934. It was drafted and introduced in the lower house of the
Legislature by the Committee on Appropriations. The original draft did
not contain the provisions now found in section 11. I have searched the
whole records of the discussion of said bill by the lower house but
said provisions were neither touched upon nor introduced by way of
amendment. After passing the House on October 14, 1932, the bill was
sent to the Senate, where, with slight amendments, it was approved on
November 4, 1932. The provisions of section 11 do not appear in the
bill as approved by the Senate and which now appears in the Diario de Sesiones (Vol. VII, pp. 784-787). After such approval by the Senate, the records disclose the following proceedings to have transpired:

“NOVENA LEGISLATURA FILIPINA

“Segundo Periodo de Sesiones

“INFORME DE CONFERENCIA

“Habiendose
reunido el comite de conferencia sobre los votos en discordia de las
dos Camaras acerca de las enmiendas del Senado al proyecto de ley de la
Camara de Representantes No. 1934 titulado;

”
‘An Act to reorganize the Executive and Judicial Departments of the
Philippine Government, by amending certain provisions of the Revised
Administrative Code, as amended and for other purposes,’

y despues de una detenida y completa consideracion, ha acordado
recomendar a sus respective camaras lo siguiente que sea aprobado en la
forma siguiente:

(Sgd)		“J. Clarin
		“Manuel Briones
		“Juan Nolasco
			“Conferenciantes por parte del Senado
				(Sgd.)		“Leonardo Festin
						“J. Alcazaren
						“Eugenio Perez
						“Juan Luna
						“Felipe Buencamino
						“P. Pecson
						“E. Rodriguez
							“Conferenciantes por
								parte de la Camara
									de Representantes”

To the foregoing report is attached the Act containing all the provisions now to be found in Act No. 4007, including its eleventh section.

By comparing Act No. 4007 as it is with Bill No. 1934 as finally
approved by the Philippine Senate on November 4, 1932, we shall be able
to notice that section 11 of the Act is one of the few portions of the
Act which is not included in the bill as passed by the Senate. It,
apparently, also, is the only provision in the Reorganization Act
mentioned which treats of taxation. It is the only section which does
not deal with reorganization.

The enacting clause of Bill No. 1934 passed by the Senate and that of Act No. 4007 are similar with slight variations.

Sections 1 to 3 inclusive of the Bill passed by the Senate are the same
in all respects as sections 1 to 3 inclusive of Act No. 4007.

Section 4 of the Bill passed by the Senate and the same section of Act
No. 4007 are similar because both deal with the bureaus and offices
under the Department of Finance. Section 4 of the Senate Bill, however,
differs from section 4 of Act No. 4007 in that the former includes the
Board of Accountancy, Board of Examiners for Marine Officers, and
Engineers. On the other hand, section 4 of Act No. 4007 includes the
Division of Purchase and Supply.

Section 5 of the Bill and
the equivalent section of Act No. 4007 are similar because both deal
with bureaus and offices under the Department of Public Instruction.
They differ, however, in that the Bill passed by the Senate includes
the Board of Private Education, Boards of Medical, Pharmaceutical,
Optical, Dental and Nurses Examiners.

Section 6 of the Bill
and the same section of Act No. 4007 are similar because both refer to
bureaus and offices under the Department of Justice with variations,
however, in their provisions.

Section 7 of the Bill and the
same section of the Act are similar. Both refer to bureaus and offices
under the Department of Agriculture and Commerce, with slight
variations.

Section 8 of the Bill and the same section of
the Act are also similar. Both deal with the bureaus and offices under
the Department of Public Works and Communications, with slight
variations.

Section 9 of the Bill is the same as section 9
of the Act. Both refer to bureaus and offices under the Department of
the Interior and Labor.

Section 10 of the Bill is similar to
section 10 of the Act because both refer to the creation of the Bureau
of Civil Service, with extensive variations.

Section 11 of the Bill which refers to Manila Harbor Board corresponds to the provisions of section 13 of Act No. 4007.

Section 11 of Act No. 4007 deals with the reimbursement of the total
annual expenses of the Bureau of Banking to the Government. This section does not have any equivalent in or similarity to any of the provisions of the Bill passed by the Senate.

Section 12 of the Bill deals with the Philippine Health Service. This is similar to section 14 of the Act, with variations.

Section 12 of Act No. 4007 deals with the abolition of the Bureau of Supply.

Section 13 of the Bill deals with the repeal of certain sections of the
Administrative Code. This section is similar to section 16 of Act No.
4007, with slight variations.

Section 13 of the Act deals
with the Manila Harbor Board. This section is the same as section 11 of
the Bill passed by the Senate.

Section 14 of the Bill deals
with the abolition of the position of Commissioner of Private
Education. This section is similar to section 17 of Act No. 4007, with
variations.

Section 14 of the Act deals with the Philippine Health Service. This is similar to section 12 of the Bill, with variations.

Section 15 of the Bill deals with the repeal of certain sections of the
Administrative Code. This section is the same as section 18 of the Act.

Section 15 of Act No. 4007 deals with the Commissioner of Health and
Welfare, with the rank and salary of under-secretary, in the office of
the Secretary of Public Instruction. This section is similar to section
12 of the Bill passed by the Senate, with variations.

Section 16 of the Bill passed by the Senate refers to Judicial
Districts for Courts of First Instance. This section is the same as
section 20 of Act No. 4007.

Section 16 of the Act deals with
the repeals of certain sections of the Administrative Code. This
section is the same as section 13 of the Bill passed by the Senate.

Section 17 of the Bill refers to Judges of First Instance for Judicial
Districts. This section is the same as section 21 of the Act.

Section 17 of the Act refers to the abolition of the Office of
Commissioner of Private Education whose powers and duties are to be
exercised by the Undersecretary of Public Instruction. This section is
similar to section 14 of the Bill.

Section 18 of the Bill refers to Judges-at-Large. This section is similar to section 24 of the Act.

Section 18 of the Act deals with the repeal of certain sections of the
Administrative Code. This section is the same as section 15 of the Bill.

Section 19 of the Bill refers to the repeal of certain sections of the
Administrative Code. This section is the same as section 25 of the Act.

Section 19 of the Act deals with the Chief of the Bureau of Justice to be known as Solicitor-General.

Section 20 of the Bill passed by the Senate treats of the abolition of the General Land Registration Office as a Bureau.

Section 20 of the Act deals with the Judicial Districts for Courts of
First Instance. This section is the same as section 16 of the Bill.

Section 21 of the Bill treats of the Bureau of Commerce. This section is similar to section 29 of the Act.

Section 21 of the Act treats of Judges of First Instance. This section is the same as section 17 of the Bill.

Section 22 of the Bill refers to the abolition of the National Museum
as a separate Bureau. This section is similar to section 30 of the Act.

Section 22 of the Act refers to section 155 of the Administrative Code
regarding detail of judges to another district or province.

Section 23 of the Bill treats of section 1771-G of the Administrative
Code relating to the Fiber Standardization Board—Transaction of
Business. (See section 31 of the Act abolishing said Board.)

Section 23 of the Act deals with the permanent station of judges.

Section 24 of the Bill refers to the powers of the Bureau of Purchase and Supply. (See section 12 of the Act abolishing said Bureau.)

Section 24 of the Act refers to Judges-at-Large. This section is similar to section 18 of the Bill.

Section 25 of the Bill refers to the abolition of the Executive Bureau. This section is the same as section 33 of the Act.

Section 25 of the Act deals with the repeal of certain sections of the
Revised Administrative Code. This section is the same as section 19 of
the Bill.

Section 26 of the Bill refers to the creation of
the Office of Commissioner of Labor. This section is the same as
section 34 of the Act, with slight modifications.

Section 26 of the Act deals with the “Places and times of holding court.”

Section 27 of the Bill treats of the transfer of the National Library
from the Department of Justice to the Philippine Legislature. This
section is similar to section 35 of the Act, with slight variations.

Section 27 of the Act deals with the qualifications for the Office of Justice of the Peace.

Section 28 of the Bill refers to the transfer of duties and functions
of certain departments to the respective Departments as provided for
said Bill. This section is similar to section 36 of the Act.

Section 28 of the Act deals with the office of register of deeds.

Section 29 of the Bill deals with the power, authority, duty, function
or activity entrusted to a chief of Bureau, Office or Division and the
power of review given to the proper Department Head. This section is
the same as section 37 of the Act.

Section 29 of the Act deals with the Bureau of Commerce. This section Is similar to section 21 (a) of the Bill.

Section 30 of the Bill refers to the power of the Governor-General or
proper Head of Department to transfer an activity from one division to
another and to consolidate offices. This section is similar to section
38 of the Act, with variations.

Section 30 of the Act refers
to the abolition of the National Museum as a separate Bureau. This
section is similar to section 22 of the Bill.

Section 31 of
the Bill deals with the unexpended balances of funds or appropriations
pertaining to bureaus, etc., abolished or terminated and the manner of
their disposition. This section is the same as section 39 of the Act.

Section 31 of the Act refers to the Fiber Standardization Board. (See section 23 of the Bill.)

Section 32 of the Bill deals with the merger and transfer of the
unexpended balances of funds or appropriations, equipment, etc., with
the funds of the Department, bureau or office concerned. This section
is the same as section 40 of the Act.

Section 32 of the Act
refers to the powers and duties of the Bureau of Commerce and Industry
with regard to the Marine Railway and Repair Shops, to be exercised by
the Secretary of Public Works and Communications.

Section 33
of the Bill refers to the vacation of positions by specified officers.
This section is similar to section 41 of the Act.

Section 33
of the Act refers to the obolition of the Executive Bureau as a
separate Bureau. This section is the same as section 25 of the Bill.

Section 34 of the Bill deals with the gratuities to be awarded to
officials and employees whose positions are abolished or separated as a
consequence of the Reorganization Act. This section is the same as
section 42 of the Act.

Section 34 of the Act deals with the
creation of the Office of a Commissioner of Labor in the Office of the
Secretary of the Interior. This section is similar to section 26 of the
Bill.

Section 35 of the Bill contains its repealing clause. This section is the same as section 44 of the Act.

Section 35 of the Act deals with the transfer of the National Library
from the Department of Justice to the Philippine Legislature. It
corresponds to section 27 of the Bill.

Section 36 of the
Bill deals with the time when said act shall take effect. This section
is equivalent to section 45 of the Act.

Section 36 of the
Act refers to the transfer of duties and functions of certain
Departments to the respective Departments as provided for by the Act.
This is similar to section 28 of the Bill.

Section 37 of the
Act refers to the power, authority, duty, function, or activity
entrusted to a chief of Bureau, Office or Division and the power of
review of the proper Department Head. This section is equivalent to
section 29 of the Bill.

Section 38 of the Act refers to the
power of the head of the Department to transfer an activity from one
Division to another or to suppress or reduce any activity under his
Department. This section is similar to section 30 of the Bill.

Section 39 of the Act refers to the unexpended balances of funds or
appropriation pertaining to bureaus, etc., abolished or terminated and
the manner of deposing them. This section is similar to section 31 of
the Bill.

Section 40 of the Act deals with the merger and
transfer of the unexpended balances of funds or appropriation,
equipment, etc. with the funds of Department, Bureau or Office
concerned. This section is similar to section 32 of the Senate Bill.

Section 41 of the Act refers to the vacation of positions by specified officers. It is similar to section 33 of the Bill.

Section 42 of the Act treats of the gratuities to be awarded to
officials and employees whose positions are abolished or separated as a
consequence of the Reorganization Act. It is the same as section 34 of
the Bill.

Section 43 of the Act refers to the power of the
Department Head to require the Assistant Director or Assistant Chief of
a Bureau or Office under him to act as chief of any Division. This
section has no equivalent in the Bill passed by the Senate.

Section 44 of Act No. 4007 refers to its repealing clause. This is the same as section 35 of the Bill.

Section 45 of Act No. 4007 refers to the date of effectivity of the
Act. It is similar to the provisions of section 36 of the Bill passed
by the Senate.

I deny the propriety not only of inserting a
tax provision in a general reorganization act but also of amending a
portion of an existing law on taxation in such an act. The majority, in
effect, does not only hold that the Legislature may provide for the
means by which a given bureau is to be supported but also that it may
determine the rate of the tax to be imposed for that purpose. Carried
to its logical conclusion, the Legislature may determine the tax itself
because the power to determine the rate implies the power to determine
the tax—as well as the sources and, ultimately, the numerous incidents
thereof. Under the theory of the majority, in a reorganization act, the
Legislature may, for instance, provide that the Bureau of Internal
Revenue shall be supported out of the income tax and, for this purpose,
amend the schedule of percentages now; contained in the Income Tax Law;
or that the Department of the Interior shall be supported out of the
real property tax and, at the same time, increase that tax say from 7/8
of 1 per cent to 1 per cent. The instances may be multiplied. I am
reluctant to believe that the majority would yield to this result and
yet this is what the decision would lead to. It is not necessary to
point out the disastrous results that will follow. The consideration
and approval of omnibus bills would ensue. The detection of fraud and
dexterity in legislation would be rendered difficult; the
constitutional mandate turned into a dead letter, and the life and
vigor of the entire Constitution seriously impaired.

This
court has always been eager to give effect to the mandates of the
fundamental law. During its entire period of existence, it has been
able to set aside fourteen legislative acts. Of these, three were
premised on the violation of the provisions of the Organic Law
regarding the subject and title of bills. I wish to refer to these
cases in support of the view I have taken in the case at bar.

In Central Capiz vs.
Ramirez ([1920], 40 Phil., 883), the issue presented was whether Act
No. 2874 is limited in its application to public agricultural lands, or
whether its provisions also extend to agricultural lands privately
owned, as certain provisions of the Act seemed to indicate. An
examination of the entire Act revealed that the intention of the
Legislature was to limit the application of the Act to public lands.
Besides, the title of the Act was, “An act to amend and compile the
laws relative to lands of the public domain, and for other purposes.”
According to this court, “Under the Act as entitled, any
attempt by the Legislature to insert provisions in the body thereof
relating to lands of private ownership would be in violation of the
provisions of the Jones Law and, therefore, null and void.” (At p.
889.) This statement applies with equal force to the case now before us.

In Agcaoili vs.
Suguitan ([1926], 48 Phil., 676), this court, by a close vote, held
void section 203 of Act No. 3107 which provided “* * * that justices
and auxiliary justices of the peace shall be appointed to serve until
they have reached the age of sixty-five years”, because the title of
the Act gave no intimation thereof, in violation of the Jones Law. Act
No. 3107 was entitled, “An Act to amend and repeal certain provisions
of the Administrative Code relative to the judiciary in order to
reorganize the latter; increasing the number of judges for certain
judicial districts; increasing the salaries of judges of Courts of
First Instance; vesting the Secretary of Justice with authority to
detail a district judge temporarily to a district or province other
than his own; regulating the salaries of justices of the peace;
abolishing the municipal court and justice of the peace court of the
City of Manila and creating in lieu thereof a municipal court with
three branches; regulating the salaries of clerks of court and other
subordinate employees of Courts of First Instance, and for other
purposes.” This court held:

“Considering
that the great weight of authority is to the effect that the provision
like the one above quoted from the Jones Law is mandatory; and
considering that there is nothing in the title of Act No. 3107 which
indicates in the slightest degree that said Act contains a provision
‘that justices and auxiliary justices of the peace shall be appointed
to serve until they have reached the age of sixty-five years,’ we are
forced to the conclusion that, that provision is illegal, void and
contrary to the mandatory provision of the Jones Law, * * *.”

I think that in the case at bar the violation of the Jones Law is
clearer than in the Agcaoili case. As the dissenting justices in the
latter case observed, “although the provisions of Act No. 3107 are
various, they have this in common, that they deal with different parts
of the judiciary establishment and are intended to effect changes in
this system alone.” According to them, the words, “An Act to amend and
repeal certain provisions of the Administrative Code relative to the
judiciary * * *”, are general and broad enough to include section 203
relating to the appointment of justices of the peace. Upon the other
hand, in the case at bar, there is absolutely nothing in the title, as
far as I can see, from which the insertion of section 11 in Act No.
4007 can be justified.

A still stronger case in support of my position is, perhaps, that of Government of the Philippine Islands vs.
El Hogar Filipino ([1927], 50 Phil., 399). In that case, the validity
of section 3 of Act No. 2792 was challenged on the ground that the
subject matter contained in that section was not expressed in the title
of the Act. The title of the Act was as follows:

“An
Act to amend certain sections of the Corporation Law, Act Numbered
Fourteen hundred and fifty-nine, providing for the publication of the
assets and liabilities of corporations registering in the Bureau of
Commerce and Industry determining the liability of the officers of
corporations with regard to the issuance of stock or bonds,
establishing penalties for certain things, and for other purposes.”

The first two sections of the Act are amendatory to the Corporation Law
(Act No. 1459), and the third section involved in that controversy is a
new section added to the Corporation Law as section 190 (a), and provides as follows:

“Sec. 190. (A) Penalties.—The
violation of any of the provisions of this Act and its amendments not
otherwise penalized therein, shall be punished by a fine of not more
than one thousand pesos, or by imprisonment for not more than five
years, or both, in the discretion of the court. If the violation is
committed by a corporation, the same shall, upon such violation being
proved, be dissolved by quo warranto proceedings instituted by the Attorney-General or by any provincial fiscal, by order of said Attorney-General: Provided,
That nothing in this section provided shall be construed to repeal the
other causes for the dissolution of corporations prescribed by existing
law, and the remedy provided for in this section shall be considered as
additional to the remedies already existing.”

This court, in passing upon the constitutional question presented, held
that the title of the Act was defective for failure to express the
subject matter of section 3 thereof and declared said section invalid
for repugnance to the constitutional requirement. This court, speaking
through Justice Street, said:

“But section
3 of Act No. 2792 is challenged by the respondent on the ground that
the subject matter of this section is not expressed in the title of the
Act, with the result that the section is invalid. This criticism is in
our opinion well founded. Section 3 of our Organic Law (Jones Bill)
declares, among other things, that ‘No bill which may be enacted into
law shall embrace more than one subject, and that subject shall be
expressed in the title of the bill.’ Any law or part of a law passed by
the Philippine Legislature since this provision went into effect and
offending against its requirement is necessarily void.

“Upon
examining the entire Act (No. 2792), we find that it is directed to
three ends which are successively dealt with in the first three
sections of the Act. But it will be noted that these three matters all
relate to the Corporation Law; and it is at once apparent that they
might properly have been embodied in a single Act if a title of
sufficient unity and generality had been prefixed thereto. Furthermore,
it is obvious, even upon casual inspection, that the subject matter of
each of the first two sections is expressed and defined with sufficient
precision in the title. With respect to the subject matter of section 3
the only words in the title which can be taken to refer to the subject
matter of said section are these, ‘An Act * * * establishing penalties
for certain things, and for other purposes.’ These words undoubtedly
have sufficient generality to cover the subject matter of section 3 of
the Act. But this is not enough. The Jones Law requires that the
subject matter of the bill ‘shall be expressed in the title of the
bill.’

“When reference is had to the expression
‘establishing penalties for certain things,’ it is obvious that these
words express nothing; The constitutional provision was undoubtedly
adopted in order that the public might be informed as to what the
Legislature is about while bills are in process of passage. The
expression ‘establishing penalties for certain things’ would give no
definite information to anybody as to the project of legislation
intended under this expression. An examination of the decided cases
shows that courts have always been indulgent of the practices of the
Legislature with respect to the form and generality of title, for if
extreme refinements were indulged by the courts, the work of
legislation would be unnecessarily hampered. But, as has been observed
by the California court, there must be some reasonable limit to the
generality of titles that will be allowed. The measure of legality is
whether the title is sufficient to give notice of the general subject
of the proposed legislation to the persons and interests likely to be
affected.

“In Lewis vs. Dunne (134 Cal., 291), the
court had before it a statute entitled ‘An Act to revise the Code of
Civil Procedure of the State of California, by amending certain
sections, repealing others, and adding certain new sections.’ This
title was held to embrace more than one subject, which were not
sufficiently expressed in the title. In discussing the question the
court said:

” ‘* * * It is apparent
that the language of the title of the act in question, in and of
itself, expresses no subject whatever. No one could tell from the title
alone what subject of legislation was dealt with in the body of the
act; such subject, so far as the title of the act informs us, might
have been entirely different from anything to be found in the act
itself. * * *

” ‘We cannot agree with the contention of
some of respondent’s counsel—apparently to some extent countenanced by
a few authorities—that the provision of the constitution in question
can be entirely avoided by the simple device of putting into the title
of an act words which denote a subject “broad” enough to cover
everything. Under that view, the title, “An act concerning the laws of
the state,” would be good, and the convention and people who framed and
adopted the constitution would be convicted of the folly of elaborately
constructing a grave constitutional limitation of legislative power
upon a most important subject, which the legislature could at once
circumvent by a mere verbal trick. The word “subject” is used in the
constitution in its ordinary sense; and when it says that an act shall
embrace but “one subject”, it necessarily implies—what everybody
knows—that there are numerous subjects of legislation, and declares
that only one of these subjects shall be embraced in any one act. All
subjects cannot be conjured into one subject by the mere magic of a
word in a title. * * *’

“In Rader vs. Township of Union (39 N. J. L., 509, 515), the Supreme Court of New Jersey made the following observation:

”
‘* * * It is true, that it may be difficult to indicate, by a formula,
how specialized the title of a statute must be; but it is not difficult
to conclude that it must mean something in the way of being a notice of
what is doing. Unless it does this, it can answer no useful end. It is
not enough that it embraces the legislative purpose—it must express it;
and where the language is too general, it will accomplish the former,
but not the latter. Thus, a law entitled “An act for a certain
purpose,” would embrace any subject, but would express none, and,
consequently, it would not stand the constitutional test.’

“The
doctrine properly applicable in matters of this kind is, we think,
fairly summed up in a current repository of jurisprudence in the
following language:

” ‘* * * While it
may be difficult to formulate a rule by which to determine the extent
to which the title of a bill must specialize its object, it may be
safely assumed that the title must not only embrace the subject of
proposed legislation, but also express it clearly and fully enough to
give notice of the legislative purpose.’ (25 R. C. L., p. 853.)

“In
dealing with the problem now before us the words ‘and for other
purposes’ found at the end of the caption of Act No. 2792, must be laid
completely out of consideration. They express nothing, and amount to
nothing as a compliance with the constitutional requirement to which
attention has been directed. This expression (‘for other purposes’) is
frequently found in the title of acts adopted by the Philippine
Legislature; and its presence in our laws is due to the adoption by our
Legislature of the style used in Congressional legislation. But it must
be remembered that the legislation of Congress is subvert to no
constitutional restriction with respect to the title of bills.
Consequently, In Congressional legislation the words ‘and for other
purposes’ at least serve the purpose of admonishing the public that the
bill whose heading contains these words contains legislation upon other
subjects than that expressed in the title. Now, so long as the
Philippine Legislature was subject to no restriction with respect to
the title of bills intended for enactment into general laws, the
expression ‘for other purposes’ could be appropriately used in titles,
not precisely for the purpose of conveying information as to the matter
legislated upon, but for the purpose of admonishing the public that any
bill containing such words in the title might contain other subjects
than that expressed in the definitive part of the title. But, when
Congress adopted the Jones Law, the restriction with which we are now
dealing became effective here and the words ‘for other purposes’ could
no longer be appropriately used in the title of legislative bills.
Nevertheless, the custom of using these words has still been followed,
although they can no longer serve to cover matter not germane to the
bill in the title of which they are used. But the futility of adding
these words to the style of any act is now obvious. (Cooley, Const.
Lim., 8th ed., p. 302.)

“In the brief for the plaintiff it
is intimated that the constitutional restriction which we have been
discussing is more or less of a dead letter in this jurisdiction; and
it seems to be taken for granted that no court would ever presume to
hold a legislative act or part of a legislative act invalid for
non-compliance with the requirement. This is a mistake; and no
utterance of this court can be cited as giving currency to any such
notion. On the contrary the discussion contained in Central Capiz vs.
Ramirez (40 Phil., 883), shows that when a case arises where a
violation of the restriction is apparent, the court has no alternative
but to declare the legislation affected thereby to be invalid.”

It should be observed that in the case the following expression appears
on the title of the bill: “establishing penalties for certain things.”
It should further be observed that in that case there is an express
admission that the three matters contained in Act No. 2792 “all relate
to the Corporation Law” and “might properly have been embodied in a
single Act if a title of sufficient unity and generality had been
prefixed thereto.” All the matters contained in the law, therefore,
were found to be germane to each other, and yet the court concluded
that the expression “establishing penalties for certain things” did not
express the subject matter contained in section 3 of Act No. 2792, and
in the language of the court, although “These words undoubtedly have
sufficient generality to cover the subject matter of section 3 of the
Act. But this is not enough”, because “The Jones Law requires that the
subject matter of the bill ‘shall be expressed in the title of the
bill.’ ” There is, to be sure, more unity of the subject matter with
reference to the three sections contained in Act No. 2792 than in
section 11 of Act No. 4007, with reference to the rest of the sections
of that Act. Section S of Act No. 2792 provides penalties for violation
of the Corporation Law, as amended, whereas section 11 of Act No. 4007
deals with the contribution of banks, and increases the contribution
originally provided in section 1639 of the Administrative Code. In the
Hogar case, also, the title refers to penalties and the heading of
section 190 (a) which is the additional section introduced
bears the title “Penalties.” Nevertheless, this court declared section
3 of Act No. 2792, containing said section 190 (a), as void, and observed, after referring to the case of Central Capiz vs. Ramirez, supra,
that “when a case arises where a violation of the restriction is
apparent, the court has no alternative but to declare the legislation
affected thereby to be invalid.” This court in the Hogar case found the
violation of the constitutional inhibition apparent “Upon the facts and
under the circumstances just mentioned,” and I say that in the case at
bar the constitutional infraction is more apparent than in the Hogar
case.

The majority of this court clearly depart from the
principle laid down in previous cases, particularly the Hogar case.
From the citations and references made, It Is on the plea of liberal
interpretation that they do so. I express the opinion, however, that
there is neither occasion nor reason for any departure and that the
doctrine laid down in the Hogar case is as good today as it was when
promulgated by this court ten years ago. If conditions have changed
since then, the change rather points to the necessity of adhering to
the doctrine than in departing therefrom. Our Constitution has
substantially incorporated the provision contained in the Jones Law
regarding the subject and title of bills. This means that this
provision is a necessary requirement, to prevent the evils which
otherwise would exist in legislation, and which evils I have already
pointed out. In addition, our Constitution, to further surround
legislative practice and procedure with the necessary guarantees
against hasty, ill-considered legislation, requires the printing of
bills at least three days prior to its consideration. The insertion of
amendments is also expressly prohibited after the third reading of a
bill. (Art. VI, sec. 12, par. 2.) The framers of our Constitution,
therefore, not only considered the retention of the provision with
reference to the requirement that bills should contain one subject
matter and the matter expressed in the title thereof, but regarded that
requirement insufficient, and, as a further guaranty, provided for the
printing of bills three days before their consideration and, in
addition, barred the insertion of amendments after the last reading of
a bill. It may also be pointed out that our Constitution establishes a
unicameral legislature. A one-chambered legislature is devoid of a
second-chamber check. More strict adherence to constitutional mandate
is thus required, particularly in times when the executive and
legislative departments no longer cheek one another. If, then, a change
has come to pass, it is one which points to the necessity and
advisability of adhering to the principle announced in the Hogar and
previous cases.

In the very language of this court in McGirr vs.
Hamilton and Abreu (30 Phil., 563, 571, 572), it may not be out of
place to close this dissent with the words of one of New York’s
greatest judges as found in the case of Oakley vs. Aspinwall (3 Comstock [N. Y.], 547, 568):

“It
is highly probable that inconveniences will result from following the
constitution as it is written. But that consideration can have no
weight with me. It is not for us, but for those who made the instrument
to supply its defects. If the legislature or the courts may take that
office upon themselves; or if under color of construction, or upon any
other specious ground, they may depart from that which is plainly
declared, the people may well despair of ever being able to set a
boundary to the powers of the government. Written constitutions will be
worse than useless.

“Believing, as I do, that the success
of free institutions depends on a rigid adherence to the fundamental
law, I have never yielded to considerations of expediency in expounding
it. There is always some plausible reason for the latudinarian
constructions which are resorted to for the purpose of acquiring
power-some evil to be avoided, or some good to be attained, by pushing
the powers of the government beyond their legitimate boundary. It is by
yielding to such influences that constitutions are gradually undermined
and finally overthrown. My rule has ever been to follow the fundamental
law as it is written, regardless of consequences. If the law does not
work well, the people can amend it; and inconveniences can be borne
long enough to await that process. But, if the legislature or the
courts undertake to cure defects by force and unnatural constructions,
they inflict a wound upon the constitution which nothing can heal. One
step taken by the legislature or the judiciary in enlarging the powers
of the government opens the door for another, which will be sure to
follow; and so the process goes on, until all respect for the
fundamental law is lost, and the powers of the government are just what
those in authority please to call them.”

My
conclusion is that the government is entitled to collect the precentage
fixed in the original act but not that determined in section 11 of Act
No. 4007 because that section is unconstitutional. I adopt the partial
unconstitutionality rule stated in Barrameda vs. Moir ([1913], 25 Phil., 44), and other cases and hold that section 11 of Act No. 4007 is unconstitutional.

Diaz, J.; I concur in the dissenting opinion of Justice Laurel.

---

 

DISSENTING

CONCEPCION, J.:

I dissent from the majority opinion.

The Solicitor-General, in the name of the Government, filed a complaint
against the Hongkong & Shanghai Banking Corporation and eight other
banking institutions, for the recovery of certain sums by way of
assessments, in conformity with the provisions of section 11 of Act No.
4007.

All the defendants demurred to the complaint The
Hongkong & Shanghai Banking Corporation and the other defendants’,
with the exception of the National City Bank of New York, founded their
demurrers on the ground that the law relied upon in the complaint is
unconstitutional. The demurrer of the National City Bank of New York
invoked the same ground and further alleged that there is a misjoinder
of parties and that Act No. 4007, section 11, is not applicable to it
because it is a national banking association.

The demurrers
being sustained by the court, and the plaintiff failing to amend the
complaint, judgment was rendered dismissing the same, to which
exception was taken by the Solicitor-General who thereafter filed the
bill of exceptions which was duly approved.

Every law must
have the essential feature that it shall embrace only one subject and
that subject shall be expressed in the title thereof. Such is the
provision of section 8 of the Jones Law.

The same provision is contained in section 12 (1) of Article VI of our Constitution.

In the case of Central Capiz vs. Ramirez (40 Phil., 883, 889-891), in inquiring into the meaning and scope of the aforesaid Organic Law, this court said:

“The
purpose of this legislative restriction, and the evils sought to be
remedied thereby, are clearly stated by Sutherland in his valuable work
on Statutory Construction. In section 111 he says that:

”
‘In the construction and application of this constitutional restriction
the courts have kept steadily in view the correction of the mischief
against which it was aimed. The object is to prevent the practice,
which was common in all legislative bodies where no such restrictions
existed, of embracing in the same bill incongruous matters having no
relation to each other or to the subject specified in the title, by
which measures were often adopted without attracting attention. Such
distinct subjects represented diverse interests, and were combined in
order to unite the members of the legislature who favor either in
support of all. These combinations were corruptive of the legislature
and dangerous to the State. Such omnibus bills sometimes included more
than a hundred sections on as many different subjects, with a title
appropriate to the first section, “and for other purposes.”

”
‘The failure to indicate in the title of the bill the object intended
to be accomplished by the legislation often resulted in members voting
ignorantly for measures which they would not knowingly have approved;
and not only were legislators thus misled, but the public also; so that
legislative provisions were steadily pushed through in the closing
hours of a session, which, having no merit to commend them, would have
been made odious by popular discussion and remonstrance if their
pendency had been seasonably announced. The constitutional clause under
discussion is intended to correct these evils; to prevent such
corrupting aggregations of incongruous measures, by confining each act
to one subject or object; to prevent surprise and inadvertence by
requiring that subject or object to be expressed in the title.’

* * * * * * *

”
‘The object sought to be accomplished and the mischief proposed to be
remedied by this provision are well known. Legislative assemblies, for
the dispatch of business, often pass bills by their titles only without
requiring them to be read. A specious title sometimes covers
legislation which, if its real character had been disclosed, would not
have commanded assent. To prevent surprise and fraud on the legislature
is one of the purposes this provision was intended to accomplish.
Before the adoption of this provision the title of a statute was often
no indication of its subject or contents’.”

Sutherland,—this court continues,—in his work on Statutory Construction, section 122, says:

”
‘The phrase “and for other purposes” expresses no specific purpose and
imports indefinitely something different from that which precedes it in
the title. It is, therefore, universally rejected as having no force or effect wherever, this constitutional restriction operates’.” (Citing numerous cases.) (Page 895.)

See also Agcaoili vs.
Suguitan (48 Phil., 676). Therefore, the first question requiring
solution is whether the subject matter of section 11 of Act No. 4007 is
embraced in the title thereof, as required by the Jones Law.

The title of the aforesaid Act No. 4007 is worded as follows: “An Act
to reorganize the departments, bureaus and offices of the Insular
Government, and for other purposes.” Section 11 of the Act provides as
follows:

“The provisions of existing law to
the contrary notwithstanding, the total annual expenses of the Bureau
of Banking shall be reimbursed annually to the Government by assessment
levied upon all banking institutions subject to inspection by the Bank
Commissioner. The proportion of expenses of the Bureau of Banking to be
assessed against each of such banking institution shall be the same as
the proportion which its average total assets bear to the average total
assets of all such banking institutions during the year in which the
expenses were incurred.”

It is evident from
what has been quoted that the provisions of section 11 of the said Act
are absolutely foreign to the reorganization of the departments and
offices of the Government, inasmuch as they refer exclusively to the
levy of an assessment upon the banks. Section 11 is therefore null and
without any effect, for being unconstitutional, in view of the fact
that its subject matter is distinct from and in no way related to that
of the law in question, which is the reorganization of the departments,
bureaus and offices of the Government.

We have here not only
variety of subjects, but failure to express the subject of section 11
in the title of Act No. 4007; and the deficiency is not supplied by the
addition to the title of the Act of the phrase “and for other
purposes”, since, as we have seen, it has been repeatedly decided by
the courts that said phrase does not signify anything.

But
the majority contends that at the time of the passage of Act No. 4007
the Bureau of Banking was already in existence as one of the bureaus of
the Government, and that, therefore, it is clear that said bureau is
embraced in said title. To this I am agreeable. On the other hand,—the
majority continues,—the contents of section 11 are germane to and
connected with the organization and maintenance of said bureau. From
this I dissent, because the reorganization of the Government is a
subject clearly distinct from the revision of an assessment, of which
section 11 treats, thereby amending, without previous notice, section
1637 of the Administrative Code.

The Solicitor-General
argues that the court could have rendered judgment, if not under
section 11 of Act No. 4007, under section 1637 of the Administrative
Code, as amended by Act No. 3519. I believe that such change, which
relates to the basis of the complaint, cannot be made except by an
amendment of the complaint.

I therefore vote for the confirmation of the appealed decision.