G.R. No. 3473

Facts
– The plaintiff, Don Joaquin Casanovas, owned several mining concessions in Ambos Camarines that had been granted by the Spanish government under the royal decree of May 14, 1867.
– The concessions were perfected before April 11, 1899, and therefore fell within Sec. 134 of Act No. 1189 (Internal Revenue Act), which imposed an annual tax of ₱100 per 60,000 m² (or proportionate) and a 3 % ad‑valorem tax on the gross output of the mines.
– Acting as Collector of Internal Revenue, the defendant assessed and collected the taxes mandated by Sec. 134. The plaintiff paid ₱9,600 under protest.
– The plaintiff appealed, arguing that Sec. 134 was void for (1) violating the U.S. congressional prohibition on impairment of contracts (Sec. 5, Act of July 1, 1902) and (2) contravening the royal decree of 1867, which allegedly barred any additional tax or cancellation of the concessions except for non‑compliance with the original decree’s conditions.

Issue
Whether Sec. 134 of Act No. 1189, imposing annual and ad‑valorem taxes on mining concessions perfected before April 11, 1899, is a valid exercise of taxation power or is void for impairing contractual rights and for conflicting with the 1867 royal decree governing those concessions.

Ruling
The Supreme Court held Sec. 134 to be valid. The provision does not impair the contractual obligations of the mining concessions because the original royal decree expressly allowed the government to levy taxes and did not forbid later legislative taxation. Moreover, the statute does not contravene the 1867 decree’s terms, which contemplated taxes and allowed the government to modify conditions through subsequent legislation. Consequently, the plaintiff was liable for the assessed taxes. The judgment of the lower court was reversed, and judgment was entered in favor of the plaintiff for the amount paid (₱9,600) with interest, together with the costs of the Court of First Instance.