Case Summary (G.R. No. 22619)
Factual Background
• National Coal Company, a private corporation with Government as majority stockholder, mined 24,089.3 tons of coal from lands reserved by Proclamation No. 39 (Oct. 18, 1917).
• Between July 1920 and March 1922, the company paid P12,044.68 under protest, calculated under Admin. Code § 1496 (P0.50/ton).
• The company claimed it qualified instead for the preferential tax (P0.04/ton) under sections 14–15 of Act No. 2719, which apply to “coal lands owned by any person ….”
Procedural History
• Trial Court (CFI Manila) held that “lands owned by any person” in Act No. 2719 § 15 should be read to include lands held in usufruct or lease, thus applying the lower rate to the respondent and ordering refund of P11,081.11.
• Collector appealed, challenging (1) the interpretation of § 15, and (2) the conclusion that the respondent was not subject to Admin. Code § 1496.
Issue
Whether National Coal Company is liable under the preferential duty in Act No. 2719 § 15 (for owners of coal lands) or under the specific internal‐revenue tax of Admin. Code § 1496 (for coal produced in the Islands).
Ownership and Right to Mine
• The company produced coal under reservation by Proclamation No. 39 but possessed no title, lease, or formal grant from the Secretary of Agriculture and Natural Resources.
• It admitted on record it was neither owner nor lessee of the coal lands; its corporate charter and Government shareholding did not confer public‐law privileges.
Interpretation of Act No. 2719 § 15
• Act No. 2719 separates two categories: (a) lessees of unreserved lands (subject to duties in § 3) and (b) persons, firms, or corporations who are owners of coal lands (subject to duties in § 15).
• Section 15’s requirement of “owned” coal lands plainly refers to pre‐existing private ownership, not mere reservation or mining under proclamation.
Application of Administrative Code § 1496
• Admin. Code § 1496 imposes P0.50 per metric ton on all coal produced in the Philippines for
Case Syllabus (G.R. No. 22619)
Facts
- The National Coal Company (“plaintiff”) was incorporated on March 10, 1917 under Act No. 2705 to develop coal deposits in the Philippine Islands, with the Government as majority stockholder.
- On May 14, 1917, Act No. 2719 was enacted to regulate leasing and development of coal lands.
- On October 18, 1917, Governor-General Harrison issued Proclamation No. 39 withdrawing about 400 hectares of coal-bearing public lands in Zamboanga and Polillo from settlement, sale, or other disposition.
- The National Coal Company entered and mined coal on these reserved lands from July 1920 to March 1922, extracting 24,089.3 metric tons.
- On December 15, 1922, the Company paid ₱0.50 per ton (total ₱12,044.68) under protest as the specific tax on coal prescribed by Section 1496 of the Administrative Code.
Procedural History
- July 17, 1923: Plaintiff filed suit in the Court of First Instance of Manila to recover ₱12,044.68 allegedly paid in excess, claiming exemption under Sections 14 and 15 of Act No. 2719.
- Defendant answered, denying protest and asserting that the tax was rightly imposed under Section 1496 of the Administrative Code.
- Trial Court (Judge Pedro Concepcion) ruled that plaintiff’s coal lands fell within Section 15 of Act No. 2719, limiting the tax to ₱0.04 per ton, and ordered refund of ₱11,081.11.
- Defendant appealed to the Supreme Court.
Issue
- Whether the National Coal Company is liable to pay the specific tax under Section 15 of Act No. 2719 (applicable to owners of coal lands) or under Section 1496 of the Administrative Code (specific internal revenue tax on all coal and coke).
Relevant Statutory Provisions
- Act No. 2705 (March 10, 1917): Creates National Coal Company, grants general corporate powers to mine and develop coal.
- Act No. 2719 (May