Definitions: Republic v. Bacolod-Murcia Milling Co., Inc.

, et Special assessments: a levy on property where the property against which it is al. levied derives special benefits from how the Date: 9 July 1966 money was used (in normal people Ponente: Justice Regala speak: whatever this tax is spent on will benefit those who paid the tax)

Parties: Bacolod-Murcia Milling Co., Inc., Maao Sugar Central Co., Inc., Talisay-Silay RA 632: Philippine Sugar Institute charter; where Philsugin is a semi-public Milling Co., petitioners, v The Republic of the Philippines, respondent corporation meant to advance the Philippine sugar industry (research, marketing, Action: Joint Appeal from Court of First Instance of Manila etc.) Summary: oSection 15 of RA 632: to raise funds for Philsugin, annual sugar production

The three sugar centrals are sister companies under single ownership and will be levied 10c per picul of sugar collected for 5 crop years, (c.y. 1951-52 management. to 1956). The amount will be borne by sugar They were required to pay 10 centavos per centrals and sugar cane picul (around 5-6 kilos) of sugar planters collected for 5 crop years under Sec. 15 of RA 632. Facts: The sugar tax was levied to create Philsugin CFI case: (Philippine Sugar Institute), to conduct oAppellants and another sugar central, Central research and development for sugar and sugar Azucarera del Danao, had by-products. unpaid balance: Philsugin acquired the Insular Sugar Refinery and lost a lot of money -Bacolod-Murcia: P216,070.50 Appellants stopped paying the levy because -Ma-ao: P235,800.20 they said that the purchase was -Talisay-Silay: P208,193.74 unauthorized by RA 632. They had unpaid -Danao: P48,059.77 balances o3 Sept 1951: Philsugin acquired the Insular The Court of First Instance said that they had Sugar Refinery through the to pay the balance, and the Supreme sugar tax imposed by RA632 Court affirmed its decision o1954-57: Philsugin lots a LOT of money, and

at that time, 70% of Philsugins

-Appellants refusal to pay is like a taxpayer refusing to pay taxes; its

time and effort had gone into the operation of Insular Sugar Refinery dangerous to allow their motion because they were essentially taking oAppellants contend that the purchase of the Insular Sugar Refinery, using the law into their own hands money from the Philsugin fun, was not In the PRESENT, the appellants say that: authorized by RA632 and refused to oUnder Section 3 of RA632, Philsugin had no contribute to it authority to acquire the refinery. -10c/picul is a special assessment, not a tax, Philsugin is empowered to purchase a central and property owners who experiment station or at pay the assessment dont have to be forced to most a sugar central, not a sugar refinery. pay if the proceeds -Cited Collector v Ledesma: definition; sugar have been misapplied to their prejudice central=sugar mill that oLower courts Decision: Apellants are liable manufacture sugar for a number of plantations for special assessments and oRefusal to pay an assessment is different from have to pay the balance refusal to pay a tax, since a -Appellants are liable under RA632 tax is different from an assessmentoThe imposition of a special assessment on property Section 3 authorizes Philsugin to buy things owners who wont for sugar and its benefit from it is a denial of due process by-products, including sugar refineries Issue: Did the CFI make the right call in ruling -Decision to purchase was made the board of that the defendants are liable for the directors, and the special assessments under RA 632? appellants were duly represented by the Philippine Sugar Association, Ruling: of which the appellants are members Supreme Court finds for the appellee; CFI decision is AFFIRMED, with costs

-All of Philsugins transactions pass through the General Auditor, the Cited Lutz v Araneta: Section 6 of CA 567 (sugar adjustment act) levies a Office of the President, and other pertinent authorities and tax to accrue to the Sugar Adjustment and Stabilization Fund safeguards in order to ensure that purchases (including that of the oSC said that the assailed tax was levied to help rehabilitate and refinery) had been legal and proper stabilize the threatened sugar industry (history

lesson: before, the Philippines was a sugar cartel with the US as its top customer, but the Act that enabled it to supply the US with sugar was expiring) oThe sugar industry was a leading exporter and employer and a prime source of foreign exchange and state wealth such that its welfare redounds to general welfare oThe assailed act is therefore an exercise of POLICE POWER because

of its importance to general welfare Like in the Lutz v Araneta case, Section 5 of RA632 is an exercise of police power Under Section 2 of RA632, Philsugin is authorized to do research for the sugar industry in all its phases, which justifies its acquisition of the Insular Sugar Refinery The experience is technically NOT a loss to the industry: through Philsugins purchase, there is now a better appreciation for the management problems faced by sugar centrals