G.R. No. L-4510 May 31, 1954
MARC DONNELLY AND ASSOCIATES, INC., petitioner, vs. MANUEL AGREGADO, Auditor General; CORNELIO BALMACEDA, Secretary of Commerce and Industry; and RAMON L. PAGUIA, Chief of the Sugar Quota Office, respondents.

FACTS

Petitioner Marc Donnelly and Associates, Inc. exported scrap metals from December 1947 to September 1948. This exportation was governed by Commonwealth Act No. 728, which prohibited the export of certain materials without a presidential permit and authorized the President to regulate, control, or prohibit such exports. Pursuant to this law, the President issued Executive Order No. 3, allowing the export of scrap metals upon obtaining a license. Subsequently, the Cabinet approved a resolution, upon recommendation of the National Development Company, fixing a schedule of royalty rates for metal exports. Under this authority, the Sugar Quota Office collected from the petitioner royalty fees totaling P54,862.84. The petitioner, seeking a refund, filed a claim with the Auditor General, arguing that the Cabinet resolution imposing the fees was an unconstitutional delegation of legislative power, as it effectively created an ad valorem tax. The Auditor General denied the claim, prompting this petition for review.

ISSUE

Whether the Cabinet resolution fixing and authorizing the collection of royalty fees on the export of scrap metals constitutes an undue delegation of legislative power and is therefore unconstitutional.

RULING

The Supreme Court dismissed the petition, upholding the validity of the Cabinet resolution and the collection of fees. The Court ruled that the delegation of authority was constitutional. Article VI, Section 22(2) of the Constitution expressly allows Congress to authorize the President, subject to limitations, to fix tariff rates, import or export quotas, and tonnage and wharfage dues. Commonwealth Act No. 728, enacted by Congress, conferred upon the President the broad authority to regulate, curtail, control, and prohibit exports, including the power to issue necessary rules and regulations. The Cabinet resolution implementing this law was a valid exercise of this delegated authority. The Court held that the act of the Cabinet is presumptively the act of the President, as the secretaries are assistants to the Chief Executive. Furthermore, the fees were not an illegal exaction but a valid condition for granting the privilege to export materials whose export could be entirely prohibited. Since the petitioner voluntarily availed itself of the export privilege with knowledge of the condition, it was estopped from challenging the payment.