Manila Railroad Co. v. Rafferty
REITERATIONFacts
The Antecedents: The Manila Railroad Company (plaintiff) commenced an action to recover P83,159.63 paid as internal-revenue tax under protest to James J. Rafferty, Collector of Internal Revenue (defendant). The plaintiff alleged that its charter (Act No. 1510), specifically subsection 12 of section 1, exempted it from all taxes of every name and nature upon its capital stock, franchise, right of way, earnings, or other property, except those mentioned in the charter. The tax in question was collected on oil and coal imported by the plaintiff for its use. Procedural History: The Court of First Instance of Manila, holding that subsection 12 of section 1 of Act No. 1510 remained in full force and effect despite the invoked Act of Congress, rendered judgment in favor of the plaintiff. The defendant appealed. The Petition: The defendant-appellant alleged that the lower court erred in not holding that section 4, subdivision C, of the Act of Congress of October 3, 1913, applied to the coal and oil imported by the plaintiff, thereby subjecting them to internal-revenue tax.
Issue(s)
Whether the Acts of Congress of August 5, 1909, and October 3, 1913, can be regarded as an amendment, alteration, or repeal of subsection 12, section 1, of Act No. 1510 (the plaintiff's charter). Whether a special law or charter can be amended, altered, or repealed by a general law by implication.
Ruling
The Supreme Court affirmed the judgment of the lower court, ruling that the amount collected was illegally collected and ordering the defendant to return the sum of P83,159.63 to the plaintiff.
Ratio Decidendi
On whether the Acts of Congress amended, altered, or repealed Act No. 1510: The Court held that the Acts of Congress did not amend, alter, or repeal subsection 12, section 1, of Act No. 1510. Act No. 1510 is a private charter, considered a contract, while the Acts of Congress are general laws. A careful reading of the Acts of Congress revealed no reference or attempt to amend, alter, or repeal the specific charter. Furthermore, the charter itself was subject to amendment, alteration, or repeal only by an Act of the Congress of the United States, and no such express intent was found in the general laws. The Court emphasized that repeals by implication are not favored and require clear repugnance or manifest intent, which were absent here. The Acts of Congress also expressly provided that they shall not affect any accrued right, and the plaintiff had enjoyed the rights granted under Act No. 1510 for years, which constituted accrued rights. On whether a special law can be amended by a general law by implication: The Court definitively answered this in the negative, citing numerous authorities. It is a well-settled canon of statutory construction that a subsequent general statute does not repeal a prior special statute unless the intent to repeal is manifest. A special and local statute providing for a particular case is not repealed by a subsequent general statute, even if the general act's terms are broad enough to include the cases in the special law. The existence of a special law and a later general law, where the general law's terms could cover the special law's subject, creates a presumption that the special law remains an exception to the general law. The Court reiterated that the Legislature, when passing a special charter, directs its attention to specific facts and circumstances, and it would not be presumed that it intended to amend or modify the charter by adopting a general law without express mention.
Main Doctrine
A special law or charter, such as the franchise granted to the Manila Railroad Company, cannot be amended, altered, or repealed by a general law by implication, especially when the general law does not expressly refer to the special law and the charter contains provisions protecting accrued rights.