Case Digest (G.R. No. 141309)
Facts:
In Liwayway Vinzons-Chato v. Fortune Tobacco Corporation (G.R. No. 141309, December 23, 2008), the petitioner, Commissioner of Internal Revenue Liwayway Vinzons-Chato, issued Revenue Memorandum Circular No. 37-93 on July 1, 1993, reclassifying the cigarette brands “Champion,” “Hope,” and “More” as locally manufactured cigarettes bearing a foreign brand and subjecting them to a 55% ad valorem tax under Republic Act No. 7654. Fortune Tobacco received a faxed copy on July 2, 1993 and a certified xerox by ordinary mail on July 15, 1993. After its motion for reconsideration was denied on July 30, 1993, Fortune Tobacco was assessed P9,598,334.00 in tax deficiency. The company secured an injunction from the Court of Tax Appeals (CTA) and, in its August 10, 1994 decision, the CTA declared RMC 37-93 invalid for lack of notice, hearing, and publication. Both the Court of Appeals and this Court in Commissioner of Internal Revenue v. Court of Appeals (261 SCRA 236) affirmed that ruling. OnCase Digest (G.R. No. 141309)
Facts:
- Legislative Background and Issuance of RMC 37-93
- Republic Act No. 7654 was enacted on June 10, 1993 (effectivity July 3, 1993), revising ad valorem tax rates on locally manufactured cigarettes from 20–45% to a uniform 55% with a minimum of ₱5.00 per pack.
- On July 1, 1993, Commissioner Liwayway Vinzons-Chato issued Revenue Memorandum Circular No. 37-93 (RMC 37-93) reclassifying Champion, Hope, and More cigarettes as locally manufactured but bearing foreign brand, thereby subjecting them to the new 55% ad valorem tax under the soon-to-take-effect RA 7654.
- Fortune Tobacco’s Administrative and Judicial Objections
- RMC 37-93 was transmitted by fax on July 2, 1993 (addressed to no particular person) and received by ordinary mail on July 15, 1993.
- Fortune Tobacco filed a motion for reconsideration on July 20, 1993; it was denied on July 30, 1993, concurrently issuing a P9,598,334 deficiency tax assessment and demanding payment within ten days.
- On August 3, 1993, respondent petitioned the Court of Tax Appeals (CTA), which on September 30, 1993 granted an injunction and on August 10, 1994 declared RMC 37-93 defective, invalid, and unenforceable. This decision was affirmed by the Court of Appeals and by the Supreme Court in Commissioner of Internal Revenue v. Court of Appeals (G.R. No. 119761, August 29, 1996).
- Civil Suit for Damages and Procedural History
- On April 10, 1997, Fortune Tobacco filed a complaint for damages against Commissioner Vinzons-Chato in her private capacity (RTC, Marikina City, Civil Case No. 97-341-MK), invoking Article 32 of the Civil Code for deprivation of property without due process and violation of equal protection.
- The Commissioner moved to dismiss, arguing lack of cause of action (public duty, scope of authority, no bad faith) and defective forum-shopping certification; RTC denied the motion on September 29, 1997.
- The Court of Appeals dismissed the petition for certiorari, holding malice or bad faith not required under Article 32 and that the defect in forum-shopping certification was cured.
- On June 19, 2007, the Supreme Court affirmed the CA, directing the trial court to proceed. Subsequent motions for reconsideration and an En Banc referral followed, leading to the present resolution.
Issues:
- Whether a private party may hold a public officer personally liable in damages for breach of a duty owed to the public at large without alleging a special and peculiar injury.
- Whether Fortune Tobacco’s complaint alleged a valid cause of action under Article 32 of the Civil Code by specifying a particular injury, as opposed to general business or financial difficulties.
- Whether the issuance and implementation of RMC 37-93 violated the respondent’s constitutional rights to due process and equal protection, thereby sustaining a civil action for damages.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)