Republic of the Philippines SUPREME COURT Manila

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Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. Nos. L-19824, L-19825 and 19826 July 9, 1966

REPUBLIC OF THE PHILIPPINES, plaintiff-appellee,

vs.

BACOLOD-MURCIA MILLING CO., INC., MA-AO SUGAR CENTRAL CO., INC., and TALISAY-SILAY

MILLING COMPANY, defendants-appellants.

Meer, Meer and Meer, Enrique M. Fernando and Emma Quisumbing-Fernando for defendants-appellants.

Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Antonio Torres and Solicitor Ceferino

Padua, for plaintiff-appellee.

REGALA, J.:

This is a joint appeal by three sugar centrals, Bacolod Murcia Milling Co., Inc., Ma-ao Sugar Central Co., Inc., and Talisay-

Silay Milling Co., sister companies under one controlling ownership and management, from a decision of the Court of First

Instance of Manila finding them liable for special assessments under Section 15 of Republic Act No. 632.

Republic Act No. 632 is the charter of the Philippine Sugar Institute, Philsugin for short, a semi-public corporation created

for the following purposes and objectives:

(a) To conduct research work for the sugar industry in all its phases, either agricultural or industrial, for the

purpose of introducing into the sugar industry such practices or processes that will reduce the cost of

production, increase and improve the industrialization of the by-products of sugar cane, and achieve greater

efficiency in the industry;

(b) To improve existing methods of raising sugar cane and of sugar manufacturing;

consumption and exportation;

(d) To establish and maintain such balanced relation between production and consumption of sugar and its

by-products, and such marketing conditions therefor, as well insure stabilized prices at a level sufficient to

cover the cost of production plus a reasonable profit;

(e) To promote the effective merchandising of sugar and its by-products in the domestic and foreign markets

so that those engaged in the sugar industry will be placed on a basis of economic security; and

(f) To improve the living and economic conditions of laborers engaged in the sugar industry by the gradual

and effective correction of the inequalities existing in the industry. (Section 2, Rep. Act 632)

To realize and achieve these ends, Sections 15 and 16 of the aforementioned law provide:

Sec. 15. Capitalization. — To raise the necessary funds to carry out the provisions of this Act and the

purposes of the corporation, there shall be levied on the annual sugar production a tax of TEN CENTAVOS

[P0.10] per picul of sugar to be collected for a period of five (5) years beginning the crop year 1951-1952.

The amount shall be borne by the sugar cane planters and the sugar centrals in the proportion of their

corresponding milling share, and said levy shall constitute a lien on their sugar quedans and/or warehouse

receipts.

Sec. 16. Special Fund. — The proceeds of the foregoing levy shall be set aside to constitute a special fund to

be known as the "Sugar Research and Stabilization Fund," which shall be available exclusively for the use of

the corporation. All the income and receipts derived from the special fund herein created shall accrue to, and

form part of the said fund to be available solely for the use of the corporation.

The specific and general powers of the Philsugin are set forth in Section 8 of the same law, to wit:

Sec. 3. Specific and General Powers. — For carrying out the purposes mentioned in the preceding section,

the PHILSUGIN shall have the following powers:

(a) To establish, keep, maintain and operate, or help establish, keep, maintain, and operate one central

experiment station and such number of regional experiment stations in any part of the Philippines as may be

necessary to undertake extensive research in sugar cane culture and manufacture, including studies as to the

feasibility of merchandising sugar cane farms, the control and eradication of pests, the selected and

propagation of high-yielding varieties of sugar cane suited to Philippine climatic conditions, and such other

pertinent studies as will be useful in adjusting the sugar industry to a position independent of existing trade

preference in the American market;

(b) To purchase such machinery, materials, equipment and supplies as may be necessary to prosecute

successfully such researches and experimental work;

benefits to consumers and producers, and to promote and maintain a sufficient general production of sugar

and its by-products by an efficient coordination of the component elements of the sugar industry of the

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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. Nos. L-19824, L-19825 and 19826 July 9, 1966 REPUBLIC OF THE PHILIPPINES, plaintiff-appellee, vs. BACOLOD-MURCIA MILLING CO., INC., MA-AO SUGAR CENTRAL CO., INC., and TALISAY-SILAY MILLING COMPANY, defendants-appellants. Meer, Meer and Meer, Enrique M. Fernando and Emma Quisumbing-Fernando for defendants-appellants. Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Antonio Torres and Solicitor Ceferino Padua, for plaintiff-appellee. REGALA, J.: This is a joint appeal by three sugar centrals, Bacolod Murcia Milling Co., Inc., Ma-ao Sugar Central Co., Inc., and Talisay-Silay Milling Co., sister companies under one controlling ownership and management, from a decision of the Court of First Instance of Manila finding them liable for special assessments under Section 15 of Republic Act No. 632. Republic Act No. 632 is the charter of the Philippine Sugar Institute, Philsugin for short, a semi-public corporation created for the following purposes and objectives: (a) To conduct research work for the sugar industry in all its phases, either agricultural or industrial, for the purpose of introducing into the sugar industry such practices or processes that will reduce the cost of production, increase and improve the industrialization of the by-products of sugar cane, and achieve greater efficiency in the industry; (b) To improve existing methods of raising sugar can ...
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