Philippine Scrappers v. Auditor General
REITERATIONFacts
The Antecedents: Petitioners Philippine Scrappers, Inc., Ong Chi & Co., and Philip Monfort sought a refund of royalty fees and license fees totaling P248,634.85 paid to the Sugar Quota Office for the exportation of scrap metals. These fees were collected under Executive Order No. 3, as amended by Executive Order No. 23, which were issued pursuant to Commonwealth Act No. 728. The Chief of the Executive Office, by authority of the President, authorized the exportation of scrap metals upon payment of a fee of P10 per ton, and the Cabinet approved a resolution fixing royalty rates on metal exports. Procedural History: Petitioners filed claims for refund with the Auditor General on November 17, 1949, and September 26, 1950, arguing that Commonwealth Act No. 728 did not authorize the collection, the Cabinet resolution was void, and Commonwealth Act No. 728 was inoperative for not being approved by the President of the United States as required for export laws under the Ordinance appended to the Constitution. The Auditor General denied these claims on May 21, 1952. The Petition: Petitioners filed a petition for review of the Auditor General's decision.
Issue(s)
Whether the collection of license and royalty fees for the exportation of scrap metals was valid. Whether Commonwealth Act No. 728 is inoperative for not being approved by the President of the United States. Whether petitioners are estopped from questioning the constitutionality of Commonwealth Act No. 728.
Ruling
The petition is dismissed. The collection of the fees was valid, and the petitioners are estopped from questioning the constitutionality of Commonwealth Act No. 728.
Ratio Decidendi
On the validity of the collection of fees and the applicability of Commonwealth Act No. 728: The Court reiterated its ruling in Marc Donnelly & Associates, Inc. vs. Manuel Agregado, et al., holding that the collection of license and royalty fees for the exportation of scrap metals was valid and legal. The Executive Orders implementing Commonwealth Act No. 728 were issued after the proclamation of the Philippine Republic, and it is presumed that the President acted with knowledge of compliance with the law. The authority to regulate exports was vested in the President by Commonwealth Act No. 278, and subsequently delegated through executive orders. On the alleged inoperativeness of Commonwealth Act No. 728 due to lack of US Presidential approval: The Court noted that while petitioners claimed Commonwealth Act No. 728 was inoperative for not being submitted to the President of the United States, there was no competent evidence presented to support this claim. The Act was approved on July 2, 1946, and the implementing executive orders were issued after the Philippine Republic was proclaimed. The Court presumed that the President acted with knowledge of compliance with the law. Even if the claim were true, the petitioners would be estopped from raising this issue. On the issue of estoppel: The Court held that petitioners are estopped from questioning the constitutionality of Commonwealth Act No. 728. By voluntarily applying for and obtaining export licenses under the Act and paying the required fees and royalties, they invoked the benefits derived from the law. It is a well-established principle that a person who obtains a license under a law and enjoys its benefits cannot later question the constitutionality of that act, especially when the license is sought to be revoked or the fees are sought to be refunded. This principle applies even to taxing statutes, where parties who have availed themselves of the benefits of a tax bill are precluded from attacking its constitutionality.
Main Doctrine
A party who voluntarily applies for and accepts benefits under a law, such as obtaining an export license and paying fees, is estopped from later questioning the constitutionality of that law.