Case Digest (G.R. No. L-19255)
Facts:
The Philippine American Life Insurance Company v. The Auditor General, G.R. No. L-19255, January 18, 1968, the Supreme Court En Banc, Sanchez, J., writing for the Court (Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Castro, and Angeles, JJ., concurring; Fernando, J., concurring separately).Petitioner Philippine American Life Insurance Company (Philamlife) had a reinsurance treaty dated January 1, 1950 with American International Reinsurance Company (Airco); the treaty provided for automatic and facultative cessions and contemplated payment of reinsuring premiums on an annual basis. The dispute concerns margin fees imposed under the Margin Law, Republic Act No. 2609 (approved July 16, 1959), which subjected certain foreign exchange remittances to a Central Bank margin (fixed by the Monetary Board at 25% by Central Bank Circular No. 95). Section 3 of RA 2609 exempts obligations "issued, approved and outstanding" as of the law's effective date.
Philamlife remitted reinsurance premia after July 16, 1959 amounting to $610,998.63; the Central Bank collected P268,747.48 in foreign exchange margin on those remittances. Philamlife sought refund from the Central Bank on the ground that the payments implemented the 1950 treaty and therefore were exempt under Section 3 as pre-existing contractual obligations. The Monetary Board (Resolution 824, June 7, 1960) took the view that reinsurance contracts entered into and approved before July 17, 1959 were exempt even if remittances were made afterward.
Despite the Monetary Board resolution, the Auditor of the Central Bank refused to pass Philamlife's refund claim in audit on April 19, 1961. Philamlife sought reconsideration from the Auditor General on May 17, 1961; the Auditor General denied the reconsideration on October 24, 1961, holding that premia remitted pursuant to reinsurance ef...(Subscriber-Only)
Issues:
- Are the reinsurance premia remitted after July 16, 1959 exempt from the margin fee under Section 3 of Republic Act No. 2609 by virtue of the January 1, 1950 reinsurance treaty?
- Does application of the Margin Law to those remittances unconstitutionally impair the obli...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)