Case Summary (G.R. No. L-6355-56)
Constitutional Provision on Judicial Compensation
Article VIII, Section 9 of the 1935 Constitution guarantees that Supreme Court members and all inferior court judges hold office during good behavior and “receive such compensation as may be fixed by law, which shall not be diminished during their continuance in office.” Until otherwise provided by Congress, the Chief Justice’s salary was set at ₱16,000 and each Associate Justice’s at ₱15,000.
Binding Precedent: Perfecto vs. Meer
In Perfecto vs. Meer, this Court held that income tax on judicial remuneration constitutes a prohibited diminution of compensation under Article VIII, Section 9. Although U.S. cases (e.g., O’Malley vs. Woodrough) took a different view, the Philippine Supreme Court adopted a stricter constitutional protection for judicial salaries to secure judicial independence.
Legislative Response: R.A. 590, Section 13
Shortly after Perfecto, Congress enacted R.A. 590, Section 13, declaring that no public officer’s salary is exempt from income tax and that payment thereof “is not a diminution of his compensation fixed by the Constitution or by law.” The Solicitor General argued this legislation reflected Congress’s intent to override the Perfecto interpretation.
Separation of Powers Analysis
Under the constitutional framework, interpretation of the Constitution and statutes is exclusively a judicial function. The Legislature may enact laws but may not redefine constitutional terms or override judicial interpretations by legislative fiat. Declaring in R.A. 590 that taxing judicial salaries “is not a diminution” directly conflicts with the Supreme Court’s established interpretation of Article VIII, Section 9, usurping the Judiciary’s interpretive authority.
Diminution of Compensation Through Withholding
The Court examined the mechanics of tax withholding at source. For Endencia, ₱72.685 was deducted semi-monthly from his ₱500 payday, reducing his effective salary to ₱427.31 per payroll and lowering his annual compensation from ₱12,000 to ₱10,255.55. This systematic reduction incontrovertibly diminishes the constitutional salary guarantee.
Public Policy and Judicial Independence
The constitutional exemption of judicial salaries reflects a public-interest policy to attract and preserve an independent judici
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Facts
- Justice Pastor M. Endencia and Justice Fernando Jugo paid income taxes on their salaries as members of the Court of Appeals and the Supreme Court during portions of 1950 and 1951.
- Endencia’s refund claim amounted to P1,744.45 for income tax withheld on his 1951 salary as Associate Justice of the Court of Appeals.
- Jugo’s refund claim totaled P2,345.46 for taxes withheld from January 1 to December 31, 1950, covering his service as Presiding Justice of the Court of Appeals and later as Associate Justice of the Supreme Court.
Procedural History
- Both cases were consolidated in the Court of First Instance of Manila due to similarity of legal questions.
- The trial court (Presiding Judge Higinio B. Macadaeg) declared Section 13 of Republic Act No. 590 unconstitutional, ordering David, Collector of Internal Revenue, to refund the withheld taxes to Endencia and Jugo without special pronouncement as to costs.
- The defendant appealed to the Supreme Court, raising the constitutionality of Section 13, R.A. 590.
Issue
- Can Section 13 of Republic Act No. 590 lawfully authorize the collection of income tax on the salaries of judicial officers, contrary to the Supreme Court’s prior interpretation of Section 9, Article VIII of the Constitution in Perfecto vs. Meer?
- Does a legislative declaration that such taxation “is not a diminution” of compensation violate the separation of powers by encroaching on the judicial function of constitutional interpretation?
Constitutional Provision
- Section 9, Article VIII, 1935 Constitution:
• Judges hold office during good behavior until age seventy or incapacity.
• They shall receive compensation fixed by law, which shall not be diminished during their continuance in office.
• Until changed by Congress, the Chief Justice’s annual salary is ₱16,000 and each Associate Justice’s is ₱15,000.
Controlling Precedent
- Perfecto vs. Meer (85 Phil. 552)
• Held that taxing judicial salaries is a diminution prohibited by the Constitution.
• Rejected U.S