valentine tio v. vrb

7/21/2019 Valentine Tio v. VRB

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-75697 June 18, 1987

VALENTIN TIO do n! "u# ne## unde$ %&e n'(e 'nd #%)*e o+ OMI ENTERPRISES, petitioner,vs.VI EOGRAM REGULATOR OAR , MINISTER O/ /INANCE, METRO MANILA COMMISSION,CIT MA OR 'nd CIT TREASURER O/ MANILA, respondents.

Nelson Y. Ng for petitioner.

The City Legal Officer for respondents City Mayor and City Treasurer.

MELENCIO-0ERRERA, J.:

This petition was filed on Septe ber !, !"#$ b% petitioner on his own behalf and purportedl% onbehalf of other video&ra operators adversel% affected. 't assails the constitutionalit% of Presidential(ecree No. !"#) entitled *An Act Creatin& the +ideo&ra Re&ulator% Board* with broad powers tore&ulate and supervise the video&ra industr% hereinafter briefl% referred to as the B-AR( . The(ecree was pro ul&ated on -ctober /, !"#/ and too0 effect on April !1, !"#$, fifteen !/ da%safter co pletion of its publication in the -fficial 2a3ette.

-n Nove ber /, !"#/, a onth after the pro ul&ation of the above entioned decree, Presidential(ecree No. !""4 a ended the National 'nternal Revenue Code providin&, inter alia 5

SEC. !64. Video Tapes . 7 There shall be collected on each processed video8tapecassette, read% for pla%bac0, re&ardless of len&th, an annual ta9 of five pesos:Provided, That locall% anufactured or i ported blan0 video tapes shall be sub;ect tosales ta9.

-n -ctober <6, !"#$, the 2reater Manila Theaters Association, 'nte&rated Movie Producers,' porters and (istributors Association of the Philippines, and Philippine Motion Pictures Producers

Association, hereinafter collectivel% referred to as the 'ntervenors, were per itted b% the Court tointervene in the case, over petitioner=s opposition, upon the alle&ations that intervention wasnecessar% for the co plete protection of their ri&hts and that their *survival and ver% e9istence isthreatened b% the unre&ulated proliferation of fil pirac%.* The 'ntervenors were thereafter allowed tofile their Co ent in 'ntervention.

The rationale behind the enact ent of the (ECREE, is set out in its prea bular clauses as follows5



!. >?EREAS, the proliferation and unre&ulated circulation of video&ra s includin&,a on& others, videotapes, discs, cassettes or an% technical i prove ent or variationthereof, have &reatl% pre;udiced the operations of oviehouses and theaters, andhave caused a sharp decline in theatrical attendance b% at least fort% percent 41@and a tre endous drop in the collection of sales, contractor=s specific, a use ent

and other ta9es, thereb% resultin& in substantial losses esti ated at P4/1 Millionannuall% in &overn ent revenues:

<. >?EREAS, video&ra s establish ents collectivel% earn around P$11 Millionper annu fro rentals, sales and disposition of video&ra s, and such earnin&shave not been sub;ected to ta9, thereb% deprivin& the 2overn ent of appro9i atel%P!#1 Million in ta9es each %ear:

6. >?EREAS, the unre&ulated activities of video&ra establish ents have alsoaffected the viabilit% of the ovie industr%, particularl% the ore than !,<11 oviehouses and theaters throu&hout the countr%, and occasioned industr%8wide

displace ent and une plo% ent due to the shutdown of nu erous oviehousesand theaters:

4. *>?EREAS, in order to ensure national econo ic recover%, it is i perative for the2overn ent to create an environ ent conducive to &rowth and develop ent of allbusiness industries, includin& the ovie industr% which has an accu ulatedinvest ent of about P6 Billion:

/. >?EREAS, proper ta9ation of the activities of video&ra establish ents will notonl% alleviate the dire financial condition of the ovie industr% upon which ore than)/,111 fa ilies and /11,111 wor0ers depend for their livelihood, but also provide an

additional source of revenue for the 2overn ent, and at the sa e ti e rationali3ethe heretofore uncontrolled distribution of video&ra s:

$. >?EREAS, the ra pant and unre&ulated showin& of obscene video&ra featuresconstitutes a clear and present dan&er to the oral and spiritual well8bein& of the%outh, and i pairs the andate of the Constitution for the State to support therearin& of the %outh for civic efficienc% and the develop ent of oral character andpro ote their ph%sical, intellectual, and social well8bein&:

). >?EREAS, civic8 inded citi3ens and &roups have called for re edial easuresto curb these blatant alpractices which have flaunted our censorship and cop%ri&ht

laws:

#. >?EREAS, in the face of these &rave e er&encies corrodin& the oral values ofthe people and betra%in& the national econo ic recover% pro&ra , bold e er&enc%

easures ust be adopted with dispatch: ... Nu berin& of para&raphs supplied .

Petitioner=s attac0 on the constitutionalit% of the (ECREE rests on the followin& &rounds5



!. Section !1 thereof, which i poses a ta9 of 61@ on the &ross receipts pa%able tothe local &overn ent is a R'(ER and the sa e is not &er ane to the sub;ect atterthereof:

<. The ta9 i posed is harsh, confiscator%, oppressive and or in unlawful restraint of

trade in violation of the due process clause of the Constitution:

6. There is no factual nor le&al basis for the e9ercise b% the President of the vastpowers conferred upon hi b% A end ent No. $:

4. There is undue dele&ation of power and authorit%:

/. The (ecree is an ex-post facto law: and

$. There is over re&ulation of the video industr% as if it were a nuisance, which it isnot.

>e shall consider the fore&oin& ob;ections in seriatim .

!. The Constitutional re uire ent that *ever% bill shall e brace onl% one sub;ect which shall bee9pressed in the title thereof* 1 is sufficientl% co plied with if the title be co prehensive enou&h to include the &eneral purposewhich a statute see0s to achieve. 't is not necessar% that the title e9press each and ever% end that the statute wishes to acco plish. There uire ent is satisfied if all the parts of the statute are related, and are &er ane to the sub;ect atter e9pressed in the title, or as lon& as

the% are not inconsistent with or forei&n to the &eneral sub;ect and title. An act havin& a sin&le &eneral sub;ect, indicated inthe title, a% contain an% nu ber of provisions, no atter how diverse the% a% be, so lon& as the% arenot inconsistent with or forei&n to the &eneral sub;ect, and a% be considered in furtherance of suchsub;ect b% providin& for the ethod and eans of carr%in& out the &eneral ob;ect.* 2 The rule also is thatthe constitutional re uire ent as to the title of a bill should not be so narrowl% construed as to cripple or

i pede the power of le&islation.3

't should be &iven practical rather than technical construction.5

Tested b% the fore&oin& criteria, petitioner=s contention that the ta9 provision of the (ECREE is arider is without erit. That section reads, inter alia 5

Section !1. Tax on Sale Lease or !isposition of Videograms . 7 Notwithstandin& an%provision of law to the contrar%, the province shall collect a ta9 of thirt% percent 61@of the purchase price or rental rate, as the case a% be, for ever% sale, lease ordisposition of a video&ra containin& a reproduction of an% otion picture oraudiovisual pro&ra . ift% percent /1@ of the proceeds of the ta9 collected shallaccrue to the province, and the other fift% percent /1@ shall acrrue to the

unicipalit% where the ta9 is collected: PR-+'(E(, That in Metropolitan Manila, theta9 shall be shared e uall% b% the Cit% Municipalit% and the Metropolitan ManilaCo ission.

999 999 999

The fore&oin& provision is allied and &er ane to, and is reasonabl% necessar% for theacco plish ent of, the &eneral ob;ect of the (ECREE, which is the re&ulation of the video industr%



throu&h the +ideo&ra Re&ulator% Board as e9pressed in its title. The ta9 provision is notinconsistent with, nor forei&n to that &eneral sub;ect and title. As a tool for re&ulation 6 it is si pl% oneof the re&ulator% and control echanis s scattered throu&hout the (ECREE. The e9press purpose of the(ECREE to include ta9ation of the video industr% in order to re&ulate and rationali3e the heretoforeuncontrolled distribution of video&ra s is evident fro Prea bles < and /, supra . Those prea blese9plain the otives of the law a0er in presentin& the easure. The title of the (ECREE, which is thecreation of the +ideo&ra Re&ulator% Board, is co prehensive enou&h to include the purposese9pressed in its Prea ble and reasonabl% covers all its provisions. 't is unnecessar% to e9press all thoseob;ectives in the title or that the latter be an inde9 to the bod% of the (ECREE. 7

<. Petitioner also sub its that the thirt% percent 61@ ta9 i posed is harsh and oppressive,confiscator%, and in restraint of trade. ?owever, it is be%ond serious uestion that a ta9 does notcease to be valid erel% because it re&ulates, discoura&es, or even definitel% deters the activitiesta9ed. 8 The power to i pose ta9es is one so unli ited in force and so searchin& in e9tent, that the courtsscarcel% venture to declare that it is sub;ect to an% restrictions whatever, e9cept such as rest in thediscretion of the authorit% which e9ercises it. 9 'n i posin& a ta9, the le&islature acts upon its constituents.This is, in &eneral, a sufficient securit% a&ainst erroneous and oppressive ta9ation. 14

The ta9 i posed b% the (ECREE is not onl% a re&ulator% but also a revenue easure pro pted b%the reali3ation that earnin&s of video&ra establish ents of around P$11 illion per annu havenot been sub;ected to ta9, thereb% deprivin& the 2overn ent of an additional source of revenue. 't isan end8user ta9, i posed on retailers for ever% video&ra the% a0e available for public viewin&. 'tis si ilar to the 61@ a use ent ta9 i posed or borne b% the ovie industr% which the theater8owners pa% to the &overn ent, but which is passed on to the entire cost of the ad ission tic0et, thusshiftin& the ta9 burden on the bu%in& or the viewin& public. 't is a ta9 that is i posed unifor l% on allvideo&ra operators.

The lev% of the 61@ ta9 is for a public purpose. 't was i posed pri aril% to answer the need forre&ulatin& the video industr%, particularl% because of the ra pant fil pirac%, the fla&rant violation ofintellectual propert% ri&hts, and the proliferation of porno&raphic video tapes. And while it was alsoan ob;ective of the (ECREE to protect the ovie industr%, the ta9 re ains a valid i position.

The public purpose of a ta9 a% le&all% e9ist even if the otive which i pelled thele&islature to i pose the ta9 was to favor one industr% over another. 11

't is inherent in the power to ta9 that a state be free to select the sub;ects of ta9ation,and it has been repeatedl% held that *ine uities which result fro a sin&lin& out ofone particular class for ta9ation or e9e ption infrin&e no constitutionalli itation*. 1 Ta9ation has been ade the i ple ent of the state=s police power. 12

At botto , the rate of ta9 is a atter better addressed to the ta9in& le&islature.

6. Petitioner ar&ues that there was no le&al nor factual basis for the pro ul&ation of the (ECREE b%the for er President under A end ent No. $ of the !")6 Constitution providin& that *whenever inthe ;ud& ent of the President ... , there e9ists a &rave e er&enc% or a threat or i inence thereof,or whenever the interi Batasan& Pa bansa or the re&ular National Asse bl% fails or is unable toact ade uatel% on an% atter for an% reason that in his ;ud& ent re uires i ediate action, he a%,



in order to eet the e9i&enc%, issue the necessar% decrees, orders, or letters of instructions, whichshall for part of the law of the land.*

'n refutation, the 'ntervenors and the Solicitor 2eneral=s -ffice aver that the #th *whereas* clausesufficientl% su ari3es the ;ustification in that &rave e er&encies corrodin& the oral values of the

people and betra%in& the national econo ic recover% pro&ra necessitated bold e er&enc%easures to be adopted with dispatch. >hatever the reasons *in the ;ud& ent* of the thenPresident, considerin& that the issue of the validit% of the e9ercise of le&islative power under the said

A end ent still pends resolution in several other cases, we reserve resolution of the uestionraised at the proper ti e.

4. Neither can it be successfull% ar&ued that the (ECREE contains an undue dele&ation ofle&islative power. The &rant in Section !! of the (ECREE of authorit% to the B-AR( to *solicit thedirect assistance of other a&encies and units of the &overn ent and deputi3e, for a fi9ed and li itedperiod, the heads or personnel of such a&encies and units to perfor enforce ent functions for theBoard* is not a dele&ation of the power to le&islate but erel% a confer ent of authorit% or discretion

as to its e9ecution, enforce ent, and i ple entation. *The true distinction is between the dele&ationof power to a0e the law, which necessaril% involves a discretion as to what it shall be, andconferrin& authorit% or discretion as to its e9ecution to be e9ercised under and in pursuance of thelaw. The first cannot be done: to the latter, no valid ob;ection can be ade.* 13 Besides, in the ver% lan&ua&eof the decree, the authorit% of the B-AR( to solicit such assistance is for a *fi9ed and li ited period* wi th the deputi3ed a&encies concernedbein& *sub;ect to the direction and control of the B-AR(.* That the &rant of such authorit% i&ht be the source of &raft and corruption wouldnot sti& ati3e the (ECREE as unconstitutional. Should the eventualit% occur, the a&&rieved parties will not be without ade uate re ed% inlaw.

/. The (ECREE is not violative of the ex post facto principle. An ex post facto law is, a on& othercate&ories, one which *alters the le&al rules of evidence, and authori3es conviction upon less ordifferent testi on% than the law re uired at the ti e of the co ission of the offense.* 't ispetitioner=s position that Section !/ of the (ECREE in providin& that5

All video&ra establish ents in the Philippines are hereb% &iven a period of fort%8five4/ da%s after the effectivit% of this (ecree within which to re&ister with and secure a

per it fro the B-AR( to en&a&e in the video&ra business and to re&ister with theB-AR( all their inventories of video&ra s, includin& videotapes, discs, cassettes orother technical i prove ents or variations thereof, before the% could be sold, leased,or otherwise disposed of. Thereafter an% video&ra found in the possession of an%person en&a&ed in the video&ra business without the re uired proof of re&istrationb% the B-AR(, shall be pri a facie evidence of violation of the (ecree, whether thepossession of such video&ra be for private showin& and or public e9hibition.

raises i ediatel% a prima facie evidence of violation of the (ECREE when the re uired proof ofre&istration of an% video&ra cannot be presented and thus parta0es of the nature of an ex postfacto law.

The ar&u ent is untenable. As this Court held in the recent case of Vallarta "s. Court of #ppeals etal . 15



... it is now well settled that *there is no constitutional ob;ection to the passa&e of alaw providin& that the presu ption of innocence a% be overco e b% a contrar%presu ption founded upon the e9perience of hu an conduct, and enactin& whatevidence shall be sufficient to overco e such presu ption of innocence* People vs.Min&oa "< Phil. #/$ D!"/6 at #/#8/", citin& ! C--FEG, A TREAT'SE -N T?E

C-NST'THT'-NAF F'M'TAT'-NS, $6"8$4! . And the *le&islature a% enact thatwhen certain facts have been proved that the% shall be pri a facie evidence of thee9istence of the &uilt of the accused and shift the burden of proof provided there be arational connection between the facts proved and the ulti ate facts presu ed so thatthe inference of the one fro proof of the others is not unreasonable and arbitrar%because of lac0 of connection between the two in co on e9perience*. 16

Applied to the challen&ed provision, there is no uestion that there is a rational connection betweenthe fact proved, which is non8re&istration, and the ulti ate fact presu ed which is violation of the(ECREE, besides the fact that the prima facie presu ption of violation of the (ECREE attachesonl% after a fort%8five8da% period counted fro its effectivit% and is, therefore, neither retrospective in

character.

$. >e do not share petitioner=s fears that the video industr% is bein& over8re&ulated and bein& easedout of e9istence as if it were a nuisance. Bein& a relativel% new industr%, the need for its re&ulationwas apparent. >hile the underl%in& ob;ective of the (ECREE is to protect the oribund ovieindustr%, there is no uestion that public welfare is at botto of its enact ent, considerin& *the unfair co petition posed b% ra pant fil pirac%: the erosion of the oral fiber of the viewin& public brou&htabout b% the availabilit% of unclassified and unreviewed video tapes containin& porno&raphic fil sand fil s with brutall% violent se uences: and losses in &overn ent revenues due to the drop intheatrical attendance, not to ention the fact that the activities of video establish ents are virtuall%unta9ed since ere pa% ent of Ma%or=s per it and unicipal license fees are re uired to en&a&e in

business. 17

The enact ent of the (ecree since April !1, !"#$ has not brou&ht about the *de ise* of the videoindustr%. -n the contrar%, video establish ents are seen to have proliferated in an% placesnotwithstandin& the 61@ ta9 i posed.

'n the last anal%sis, what petitioner basicall% uestions is the necessit%, wisdo and e9pedienc% ofthe (ECREE. These considerations, however, are pri aril% and e9clusivel% a atter of le&islativeconcern.

-nl% con&ressional power or co petence, not the wisdo of the action ta0en, a%

be the basis for declarin& a statute invalid. This is as it ou&ht to be. The principle ofseparation of powers has in the ain wisel% allocated the respective authorit% ofeach depart ent and confined its ;urisdiction to such a sphere. There would then beintrusion not allowable under the Constitution if on a atter left to the discretion of acoordinate branch, the ;udiciar% would substitute its own. 'f there be adherence to therule of law, as there ou&ht to be, the last offender should be courts of ;ustice, towhich ri&htl% liti&ants sub it their controvers% precisel% to aintain uni paired thesupre ac% of le&al nor s and prescriptions. The attac0 on the validit% of the



challen&ed provision li0ewise insofar as there a% be ob;ections, even if valid andco&ent on its wisdo cannot be sustained. 18

'n fine, petitioner has not overco e the presu ption of validit% which attaches to a challen&edstatute. >e find no clear violation of the Constitution which would ;ustif% us in pronouncin&

Presidential (ecree No. !"#) as unconstitutional and void.

>?ERE -RE, the instant Petition is hereb% dis issed.

No costs.

S- -R(ERE(.

valentine tio v. vrb

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