G.R. No. 44257 - Government of the Philippine Islands vs. Hongkong and Shanghai Banking Corp.

The Government of the Philippine Islands (plaintiff/appellant) filed a suit against several banking institutions, including The Hongkong & Shanghai Banking Corporation, The National City Bank of New York, and others (defendants/appellees).
The suit sought to determine the liability of the appellees under Section 11 of Act No. 4007, which imposed assessments on banking institutions to reimburse the Bureau of Banking’s annual expenses.
All appellees filed demurrers to the complaint, arguing that it failed to state a cause of action because the provision relied upon (Section 11, Act No. 4007) was unconstitutional. The National City Bank of New York further alleged misjoinder of parties and exemption from the tax as a national banking association.
The trial court sustained the demurrers solely on the ground that the Act was unconstitutional. The Government appealed.

Section 11 provides that total annual expenses of the Bureau of Banking shall be reimbursed to the Government by assessment levied on all banking institutions subject to inspection.
The proportion for each bank is based on its average total assets relative to the total assets of all such institutions during the year expenses were incurred.
The section overrides any contrary existing law provisions.

Appellees contended that Section 11 violated the “one subject” and title requirement under Section 3 of the Jones Law, which mandates that no bill enacted into law shall embrace more than one subject, and that subject shall be expressed in the title.
That Section 11’s subject matter (taxation/assessment) was not expressed in the Act’s title, which was: “An Act to reorganize the departments, bureaus and offices of the Insular Government, and for other purposes.”

The Senate Bill No. 1934, predecessor to Act No. 4007, did not contain Section 11’s provisions related to assessment.
Section 11 was inserted during the bicameral conference committee stage after Senate approval, and did not appear in the bills passed by either House or Senate.

The Bureau of Banking was established under Act No. 3519, which included provisions for assessment of up to half of Bureau expenses on banks, capped at 60,000 pesos.
Prior reorganization acts did not impose support or maintenance of bureaus directly from taxation of private firms or individuals.

One appellee, National City Bank of New York, is a U.S. national banking association not subject to local taxation except as permitted by U.S. Congressional law.
Section 11’s tax was not authorized by any act of Congress and thus did not apply to it.

Is Section 11 of Act No. 4007, imposing assessments on all banks inspected by the Bank Commissioner for reimbursement of Bureau of Banking expenses, constitutional?

Does Section 11 violate the “one subject” rule and the requirement that the subject be expressed in the title of the Act under Section 3 of the Jones Law and the Philippine Constitution?

Does Section 11 apply to the National City Bank of New York, a U.S. national banking association?

Is the amendment of banking assessment provisions proper within a general reorganization act such as Act No. 4007?