G.R. No. 44257 ; November 22, 1938
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, plaintiff-appellant, vs. THE HONGKONG SHANGHAI BANKING CORPORATION, et al., defendants-appellees.

FACTS

The Government of the Philippine Islands filed an action against several banking institutions to determine their liability to reimburse the government for the annual expenses of the Bureau of Banking under Section 11 of Act No. 4007 . The banks demurred, arguing the complaint failed to state a cause of action because Section 11 was unconstitutional. The lower court sustained the demurrers, holding the statutory provision unconstitutional.

ISSUE

Whether Section 11 of Act No. 4007 is constitutional, particularly in relation to the constitutional requirement that no bill shall embrace more than one subject, which subject shall be expressed in its title.

RULING

The Supreme Court declared Section 11 of Act No. 4007 unconstitutional and void. The title of Act No. 4007 was “An Act to reorganize the departments, bureaus and offices in the Insular Government, and for other purposes.” The Court held that the subject matter of Section 11—the levy of an assessment upon banking institutions to reimburse government expenses for the Bureau of Banking—was absolutely foreign to and in no way related to the subject of government reorganization expressed in the title. The addition of the phrase “and for other purposes” in the title did not cure the defect, as such a phrase is insufficient to embrace a distinct and unrelated subject. Consequently, Section 11 violated the constitutional mandate (Section 3 of the Jones Law) that no bill shall embrace more than one subject, which subject shall be expressed in its title. The appealed decision sustaining the demurrers was affirmed.

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