Karl Max L.

Labanon
Statutory Construction
I-Viada
January 28, 2015

REPUBLIC OF THE PHILIPPINES VS HON. EUTROPIO MIGRINO

FACTS:
The New Armed Forces Anti-Graft Board under the Presidential Commission on Good Government
recommended that private respondent Lt. Col. Troadio Tecson be prosecuted and tried for violation of
Rep. Act No. 3019, as amended, and Rep. Act No. 1379, as amended. Private respondent moved to
dismiss. The Board opposed. Private respondent filed a petition for prohibition with preliminary
injunction with the Regional Trial Court in Pasig, Metro Manila. According to petitioners, the PCGG has
the power to investigate and cause the prosecution of private respondent because he is a
“subordinate” of former President Marcos. Respondent alleged that he is not one of the subordinates
contemplated in Executive Orders 1, 2, 14 and 14-A as the alleged illegal acts being imputed to him,
that of alleged amassing wealth beyond his legal means while Finance Officer of the Philippine
Constabulary, are acts of his own alone, not connected with his being a crony, business associate, etc.
or subordinate as the petition does not allege so. Hence the PCGG has no jurisdiction to investigate
him.

ISSUE:
Whether or not private respondent acted as a “subordinate” under E.O. No.1 and related executive
orders.

HELD:
NO. Civil Case decision dismissed and nullified. TRO was made permanent.

Applying the rule in statutory construction known as ejusdem generis, that is where general words
follow an enumeration of persons or things, by words of a particular and specific meaning, such
general words are not to be construed in their widest extent, but are to be held as applying only to
persons or things of the same kind or class as those specifically mentioned. The term “subordinate” as
used in E.O. Nos. 1 and 2 would refer to one who enjoys a close association or relation with former
Pres. Marcos and/or his wife, similar to the immediate family member, relative, and close associate in
E.O. No. 1 and the close relative, business associate, dummy, agent, or nominee in E.O. No. 2.

People vs. Hon. Vicente Echavez

FACTS:

Petitioner filed with the lower court separate informations against sixteen persons charging them with
squatting as penalized by Presidential Decree No. 772. Before the accused could be arraigned,
respondent Judge Echaves motu proprio issued an omnibus order dismissing the five informations on
the grounds that it was alleged that the accused entered the land through “stealth and strategy”,
whereas under the decree the entry should be effected “with the use of force, intimidation or threat, or
taking advantage of the absence or tolerance of the landowner”, and that under the rule of ejusdem
generis the decree does not apply to the cultivation of a grazing land. From the order of dismissal, the
fiscal appealed to this Court under Republic Act No. 5440.

ISSUE:

Whether or not P.D. No. 772 which penalizes squatting and similar acts also apply to agricultural lands.

HELD:

No. The decree does not apply to pasture lands because its preamble shows that it was intended to
apply to squatting in urban communities or more particularly to illegal constructions in squatter areas
made by well-to-do individuals. The squatting complained of involves pasture lands in rural areas.The
preamble of the decree is quoted below:
“WHEREAS, it came to my knowledge that despite the issuance of Letter of Instruction No. 19 dated
October 2, 1972, directing the Secretaries of National Defense, Public Work and Communications,
Social Welfare and the Director of Public Works, the PHHC General Manager, the Presidential Assistant
on Housing and Rehabilitation Agency, Governors, City and Municipal Mayors, and City and District
Engineers, "to remove an illegal constructions including buildings on and along esteros and river
banks, those along railroad tracks and those built without permits on public and private property."
squatting is still a major problem in urban communities all over the country; WHEREAS, many persons
or entities found to have been unlawfully occupying public and private lands belong to the affluent
class; WHEREAS, there is a need to further intensify the government's drive against this illegal and
nefarious practice.
”
It should be stressed that Letter of Instruction No. 19 refers to illegal constructions on public and
private property. It is complemented by Letter of Instruction No. 19-A which provides for the relocation
of squatters in the interest of public health, safety and peace and order. The rule of ejusdem generis
(invoked by the trial court does not apply to this case. It is intended to apply only to urban
communities, particularly to illegal constructions. Here, the intent of the decree is unmistakable. The
rule of ejusdem generis is merely a tool of statutory construction which is resorted to when the
legislative intent is uncertain.
Thus, the Supreme Court AFFIRMED the trial court’s order of dismissal

COMMISSIONER OF INTERNAL REVENUE vs. AMERICAN EXPRESS INTERNATIONAL, INC.

Facts:

American Express international is a foreign corporation operating in the Philippines, it is a registered

taxpayer. On April 13, 1999, [respondent] filed with the BIR a letter-request for the refund of its 1997
excess input taxes in the amount of P3,751,067.04, which amount was arrived at after deducting from
its total input VAT paid of P3,763,060.43 its applied output VAT liabilities only for the third and fourth
quarters of 1997 amounting to P5,193.66 and P6,799.43, respectively. The CTA ruled in favor of the
herein respondent holding that its services are subject to zero-rate pursuant to Section 108(b) of the
Tax Reform Act of 1997 and Section 4.102-2 (b)(2) of Revenue Regulations 5-96. The CA affirmed the
decision of the CTA.

Issue:

Whether or not the company is subject to zero-rate tax pursuant to the Tax Reform Act of 1997.

Held:
Services performed by VAT-registered persons in the Philippines (other than the processing,
manufacturing or repacking of goods for persons doing business outside the Philippines), when paid in
acceptable foreign currency and accounted for in accordance with the rules and regulations of the
BSP, are zero-rated. Respondent is a VAT-registered person that facilitates the collection and payment
of receivables belonging to its non-resident foreign client, for which it gets paid in acceptable foreign
currency inwardly remitted and accounted for in conformity with BSP rules and regulations. Certainly,
the service it renders in the Philippines is not in the same category as “processing, manufacturing or
repacking of goods” and should, therefore, be zero-rated. In reply to a query of respondent, the BIR
opined in VAT Ruling No. 080-89 that the income respondent earned from its parent company’s
regional operating centers (ROCs) was automatically zero-rated effective January 1, 1988. Service has
been defined as “the art of doing something useful for a person or company for a fee” or “useful labor
or work rendered or to be rendered by one person to another.” For facilitating in the Philippines the
collection and payment of receivables belonging to its Hong Kong-based foreign client, and getting
paid for it in duly accounted acceptable foreign currency, respondent renders service falling under the
category of zero rating. Pursuant to the Tax Code, a VAT of zero percent should, therefore, be levied
upon the supply of that service.

As a general rule, the VAT system uses the destination principle as a basis for the jurisdictional reach of
the tax. Goods and services are taxed only in the country where they are consumed. Thus, exports are
zero-rated, while imports are taxed. VAT rate for services that are performed in the Philippines, “paid
for in acceptable foreign currency and accounted for in accordance with the rules and regulations of
the BSP.” Thus, for the supply of service to be zero-rated as an exception, the law merely requires that
first, the service be performed in the Philippines; second, the service fall under any of the However, the
law clearly provides for an exception to the destination principle; that is, for a zero percent categories
in Section 102(b) of the Tax Code; and, third, it be paid in acceptable foreign currency accounted for in
accordance with BSP rules and regulations. Indeed, these three requirements for exemption from the
destination principle are met by respondent. Its facilitation service is performed in the Philippines. It
falls under the second category found in Section 102(b) of the Tax Code, because it is a service other
than “processing, manufacturing or repacking of goods” as mentioned in the provision. Undisputed is
the fact that such service meets the statutory condition that it be paid in acceptable foreign currency
duly accounted for in accordance with BSP rules. Thus, it should be zero-rated.