THE COLLECTOR OF INTERNAL REVENUE, petitioner,

vs.
ANTONIO CAMPOS RUEDA, respondent.
G.R. No. L-13250
Oct. 29, 1971

FACTS:
This is an appeal interposed by petitioner Antonio Campos Rueda, administrator of the estate of the
deceased Doña Maria de la Estrella Soriano Vda. de Cerdeira, from the decision of the respondent
Collector of Internal Revenue, assessing against and demanding from the former the sumP161,874.95 as
deficiency state and inheritance taxes, including interests and penalties, on the transfer of intangible
personal properties situated in the Philippines and belonging to said Maria de la Estrella Soriano Vda. de
Cerdeira. Maria de la Estrella Soriano Vda. de Cerdeira (Maria Cerdeira for short) is a Spanish national,
because of her marriage to a Spanish citizen and was a resident of Tangier, Morocco from 1931 up to her
death on January 2, 1955. At the time of her demise she left, among others, intangible personal properties
in the Philippines.” Then came this portion: “On September 29, 1955, petitioner filed a provisional estate
and inheritance tax return on all the properties of the late Maria Cerdeira. On the same date, respondent,
pending investigation, issued an assessment for estate and inheritance taxes which tax liabilities were paid
by petitioner.
On November 17, 1955, an amended return was filed …where intangible personal properties with were
claimed as exempted from taxes. On November 23, 1955, respondent, pending investigation, issued
another assessment for estate and inheritance taxes. In a letter, dated January 11, 1956, respondent denied
the request for exemption on the ground that the law of Tangier is not reciprocal to Section 122 of the
National Internal Revenue Code. Hence, respondent demanded the payment OF deficiency estate and
inheritance taxes including ad valorem penalties, surcharges, interests and compromise penalties . . . . In a
letter dated February 8, 1956, and received by respondent on the following day, petitioner requested for
the reconsideration of the decision denying the claim for tax exemption of the intangible personal
properties and the imposition of the 25% and 5% ad valorem penalties. However, respondent denied this
request, in his letter dated May 5, 1956 . . . and received by petitioner on May 21, 1956. Respondent
premised the denial because there was no reciprocity [with Tangier, which was moreover] a mere
principality, not a foreign country. Consequently, respondent demanded the payment of deficiency estate
and inheritance taxes including surcharges, interests and compromise penalties

ISSUE:
Is Tangier a foreign country?

HELD:
Yes. It does not admit of doubt that if a foreign country is to be identified with a state, it is required in line
with Pound’s formulation that it be a politically organized sovereign community independent of outside
control bound by ties of nationhood, legally supreme within its territory, acting through a government
functioning under a regime of law. 9 It is thus a sovereign person with the people composing it viewed as
an organized corporate society under a government with the legal competence to exact obedience its
commands. It has been referred to as a body politic organized by common consent for mutual defense and
mutual safety and to promote the general welfare. Correctly has it been described by Esmein as “the
juridical personification of the nation.” This is to view it in the light its historical development. The stress
is on its being a nation, its people occupying a definite territory, politically organized, exercising by
means of its government its sovereign will over the individuals within it and maintaining its separate
international personality. Laski could speak of it then as a territorial society divided into government and
subjects, claiming within its allotted area a supremacy over all other institutions. McIver similarly would
point to the power entrusted to its government to maintain within its territory the conditions of a legal
order and to enter into international relations. With the latter requisites satisfied, international law does
not exact independence as a condition of statehood. So Hyde did opine.
Even on the assumption then that Tangier is bereft of international personality petitioner has not
successfully made out a case. It bears repeating that four days after the filing of this petition on January 6,
1958 in Collector of Internal Revenue v. De Lara, it was specifically held by us: “Considering the State of
California as a foreign country in relation to section 122 of our Tax Code we believe and hold, as did the
Tax Court, that the Ancillary Administrator is entitled to exemption from the inheritance tax on the
intangible personal property found in the Philippines.” There can be no doubt that California as a state in
the American Union was lacking in the alleged requisite of international personality. Nonetheless, it was
held to be a foreign country within the meaning of Section 122 of the National Internal Revenue Code.

[G.R. No. 145951. August 12, 2003]

PEOPLE OF THE PHILIPPINES, petitioner, vs. SANDIGANBAYAN (2ND DIV.), and JOSE S.
RAMISCAL, JR., JULIAN ALZAGA, ATTY. MANUEL SATUITO, ELIZABETH LIANG
and JESUS GARCIA, respondents.

DECISION
YNARES-SANTIAGO, J.:

Respondents Jose S. Ramiscal, Jr., Julian Alzaga, Manuel Satuito, Elizabeth Liang and Jesus Garcia
were all charged with Malversation through Falsification of Public Documents before the Sandiganbayan
in Criminal Case No. 25741. The Information alleged that respondents misappropriated and converted for
their personal use the amount of P250,318,200.00 from the funds of the Armed Forces of the Philippines
Retirement and Separation Benefits System (AFP-RSBS).
On November 12, 1999, respondent Ramiscal filed with the Sandiganbayan an “Urgent Motion to
Declare Nullity of Information and to Defer Issuance of Warrant of Arrest.” He argued, inter alia, that the
Sandiganbayan had no jurisdiction over the case because the AFP-RSBS is a private entity. The said
Urgent Motion was later adopted by respondents Alzaga and Satuito.
The Urgent Motion was denied by the Sandiganbayan in a Resolution promulgated on January 6,
2000. Respondents filed a Motion for Reconsideration. In a Resolution issued on May 12, 2000, the
Sandiganbayan sustained respondents’ contention that the AFP-RSBS is a private entity. Hence, it
reconsidered its earlier Resolution and ordered the dismissal of Criminal Case No. 25741. Upon denial of
its Motion for Reconsideration, the prosecution filed the instant special civil action
for certiorari anchored on the following grounds:
I

RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK

OR IN EXCESS OF JURISDICTION IN ISSUING THE RESOLUTION DATED MAY 9, 2000
INSOFAR AS IT DISMISSED THE CASE FOR LACK OF JURISDICTION.

II

RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK

OF EXCESS OF JURISDICTION IN DENYING PROSECUTION’S MOTION FOR
RECONSIDERATION DATED JUNE 1, 2000, SUPPLEMENTAL MOTION FOR
RECONSIDERATION DATED JULY 10, 2000 AND SECOND SUPPLEMENTAL MOTION FOR
RECONSIDERATION DATED MAY 12, 2000.[4]

Considering that the Resolution of the Sandiganbayan which dismissed Criminal Case No. 25741
was a final order which finally disposed of the case, the proper remedy therefrom is a petition for review
under Rule 45 of the 1997 Rules of Civil Procedure.[5] Section 1 of said Rule 45 explicitly provides:

Filing of petition with Supreme Court. – A party desiring to appeal by certiorari from a judgment or final
order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts
whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari.
The petition shall raise only questions of law which must be distinctly set forth.

Moreover, Section 7 of Presidential Decree No. 1606, as amended by Section 3 of Republic Act No.
7975, states:
Form, Finality and Enforcement of Decisions. –

xxx xxx xxx.

Decisions and final orders of the Sandiganbayan shall be appealable to the Supreme Court by petition for
review on certiorari raising pure questions of law in accordance with Rule 45 of the Rules of Court.

Basic is the rule that a special civil action for certiorari under Rule 65 of the Rules may be availed of
only where there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law.
[6]
Certiorari cannot be availed of as a substitute for the lost remedy of an ordinary appeal. [7]
The foregoing rule, however, may be relaxed where the issue raised is one purely of law, where
public interest is involved, and in case of urgency. In such cases, certiorari is allowed notwithstanding the
existence and availability of the remedy of appeal. Certiorari may also be availed of where an appeal
would be slow, inadequate and insufficient.[8] If the strict application of the Rules will tend to frustrate
rather than promote justice, it is always within our power to suspend the rules, or except a particular case
from its operation.[9]
We now come to the substantive issue of whether the AFP-RSBS is a government-owned or
controlled corporation or a private corporation and, corollarily, whether its funds are public or private.
The Sandiganbayan based its ruling that the AFP-RSBS is a private entity on its findings that the
Government does not provide counterpart contribution to the System; that the employees of the AFP-
RSBS do not receive any salary from the Government and are not covered by the salary standardization
law; that their remittances and contributions were made to the Social Security System and not to the
Government Service Insurance System; and that the contribution to the System of the sum of
P200,000,000.00 under Presidential Decree 361 can not be deemed as equity of the government in the
System but rather, a donation or “seed money” which was never increased thereafter. [10]
Generally, factual findings of the Sandiganbayan are conclusive on us. This rule, however, admits of
exceptions, such as where: (1) the conclusion is a finding grounded entirely on speculation, surmise and
conjectures; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the
judgment is based on misapprehension of facts; and (5) the findings of fact of the Sandiganbayan are
premised on a want of evidence and are contradicted by evidence on record. [11]
The AFP-RSBS was created by Presidential Decree No. 361. Its purpose and functions are akin to
those of the GSIS and the SSS, as in fact it is the system that manages the retirement and pension funds of
those in the military service. Members of the Armed Forces of the Philippines and the Philippine National
Police are expressly excluded from the coverage of The GSIS Act of 1997. [12] Therefore, soldiers and
military personnel, who are incidentally employees of the Government, rely on the administration of the
AFP-RSBS for their retirement, pension and separation benefits. For this purpose, the law provides that
the contribution by military officers and enlisted personnel to the System shall be compulsory, thus:

Officers and enlisted personnel in the active service shall contribute to the System an amount equivalent
to four per cent (4%) of their monthly base and longevity pay, which contribution shall be deducted from
their pay from the Armed Forces of the Philippines and paid to the System: Provided, however, That any
officer or enlisted person who is due for compulsory retirement or is optionally retirable and actually
elects to retire within one year from the approval of this Act, shall no longer be required to contribute to
the System: Provided, further, That any officer or enlisted person who is separated through no fault of his
own and is not eligible for either retirement or separation benefits shall upon his separation, be refunded
in one lump sum all his actual contributions to the System plus interest at the rate of four per cent (4%). [13]
 Its enabling law further mandates that the System shall be administered by the Chief of Staff of the
Armed Forces of the Philippines through an agency, group, committee or board, which may be created
and organized by him and subject to such rules and regulations governing the same as he may, subject to
the approval of the Secretary of National Defense, promulgate from time to time. Moreover, the
investment of funds of the System shall be decided by the Chief of Staff of the Armed Forces of the
Philippines with the approval of the Secretary of National Defense.[14]
In connection with the Sandiganbayan’s finding that the funds of the AFP-RSBS, except for the
initial seed money, come entirely from contributions and that no part thereof come from appropriations,
Section 2 of P.D. 361 states:

SECTION 2. The System shall be funded as follows:

(a) Appropriations and contributions;

(b) Donations, gift, legacies, bequest and others to the System;

(c) All earnings of the System which shall not be subject to any tax whatsoever.

Indeed, the clear import of the above-quoted provision is that, while it may be true that there have
been no appropriations for the contribution of funds to the AFP-RSBS, the Government is not precluded
from later on adding to the funds in order to provide additional benefits to the men in uniform.
The above considerations indicate that the character and operations of the AFP-RSBS are imbued
with public interest. As such, we hold that the same is a government entity and its funds are in the nature
of public funds.
WHEREFORE, in view of the foregoing, the instant petition for certiorari is GRANTED. The
assailed Resolution of the Sandiganbayan dated May 12, 2000 is ANNULLED and SET ASIDE. Criminal
Case No. 25741 is ordered REINSTATED, and the Sandiganbayan is DIRECTED to resume proceedings
thereon with dispatch.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Carpio and Azcuna, JJ., concur.

MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner,

vs.
COURT OF APPEALS, CITY OF PARAÑAQUE, CITY MAYOR OF PARAÑAQUE,
SANGGUNIANG PANGLUNGSOD NG PARAÑAQUE, CITY ASSESSOR OF PARAÑAQUE, and
CITY TREASURER OF PARAÑAQUE, respondents.
GR No. 155650
July 20, 2006
FACTS:
Manila International Airport Authority (MIAA) is the operator of the Ninoy International Airport located
at Paranaque City. The Officers of Paranaque City sent notices to MIAA due to real estate tax
delinquency. MIAA then settled some of the amount. When MIAA failed to settle the entire amount, the
officers of Paranaque city threatened to levy and subject to auction the land and buildings of MIAA,
which they did. MIAA sought for a Temporary Restraining Order from the CA but failed to do so within
the 60 days reglementary period, so the petition was dismissed. MIAA then sought for the TRO with the
Supreme Court a day before the public auction, MIAA was granted with the TRO but unfortunately the
TRO was received by the Paranaque City officers 3 hours after the public auction.

MIAA claims that although the charter provides that the title of the land and building are with MIAA still
the ownership is with the Republic of the Philippines. MIAA also contends that it is an instrumentality of
the government and as such exempted from real estate tax. That the land and buildings of MIAA are of
public dominion therefore cannot be subjected to levy and auction sale. On the other hand, the officers of
Paranaque City claim that MIAA is a government owned and controlled corporation therefore not
exempted to real estate tax.

ISSUES:
1. Whether or not MIAA is an instrumentality of the government and not a government owned and
controlled corporation and as such exempted from tax.
2. Whether or not the land and buildings of MIAA are part of the public dominion and thus cannot be the
subject of levy and auction sale.

RULING:
1. MIAA is an instrumentality of the government vested with corporate powers and government
functions. Under the Local government code, government owned and controlled corporations are not
exempted from real estate tax. MIAA is not a government owned and controlled corporation, for to
become one MIAA should either be a stock or non stock corporation. MIAA is not a stock corporation for
its capital is not divided into shares. It is not a non stock corporation since it has no members.

2. The court held that the land and buildings of MIAA are part of the public dominion. Since the airport is
devoted for public use, for the domestic and international travel and transportation. Even if MIAA charge
fees, this is for support of its operation and for regulation and does not change the character of the land
and buildings of MIAA as part of the public dominion. As part of the public dominion the land and
buildings of MIAA are outside the commerce of man. To subject them to levy and public auction is
contrary to public policy. Unless the President issues a proclamation withdrawing the airport land and
buildings from public use, these properties remain to be of public dominion and are inalienable. As long
as the land and buildings are for public use the ownership is with the Republic of the Philippines.

Under the civil code, property may either be under public dominion or private ownership. Those under
public dominion are owned by the State and are utilized for public use, public service and for the
development of national wealth. The ports included in the public dominion pertain either to seaports or
airports. When properties under public dominion cease to be for public use and service, they form part of
the patrimonial property of the State.
 FIRST DIVISION

[G.R. NO. 167330 : June 12, 2008]

PHILIPPINE HEALTH CARE PROVIDERS, INC., Petitioner, v. COMMISSIONER OF

INTERNAL REVENUE, Respondent.

DECISION

CORONA, J.:

Is a health care agreement in the nature of an insurance contract and therefore subject to the documentary
stamp tax (DST) imposed under Section 185 of Republic Act 8424 (Tax Code of 1997)?cralawred
This is an issue of first impression. The Court of Appeals (CA) answered it affirmatively in its August 16,
2004 decision1 in CA-G.R. SP No.70479. Petitioner Philippine Health Care Providers, Inc. believes
otherwise and assails the CA decision in this Petition for Review under Rule 45 of the Rules of Court.

Petitioner is a domestic corporation whose primary purpose is "[t]o establish, maintain, conduct and
operate a prepaid group practice health care delivery system or a health maintenance organization to take
care of the sick and disabled persons enrolled in the health care plan and to provide for the administrative,
legal, and financial responsibilities of the organization." 2 Individuals enrolled in its health care programs
pay an annual membership fee and are entitled to various preventive, diagnostic and curative medical
services provided by its duly licensed physicians, specialists and other professional technical staff
participating in the group practice health delivery system at a hospital or clinic owned, operated or
accredited by it.3

The pertinent part of petitioner's membership or health care agreement 4 provides:

VII BENEFITS

Subject to paragraphs VIII [on pre-existing medical condition] and X [on claims for reimbursement] of
this Agreement, Members shall have the following Benefits under this Agreement:

In-Patient Services. In the event that a Member contract[s] sickness or suffers injury which requires
confinement in a participating Hospital[,] the services or benefits stated below shall be provided to the
Member free of charge, but in no case shall [petitioner] be liable to pay more than P75,000.00 in benefits
with respect to anyone sickness, injury or related causes. If a member has exhausted such maximum
benefits with respect to a particular sickness, injury or related causes, all accounts in excess of P75,000.00
shall be borne by the enrollee. It is[,] however, understood that the payment by [petitioner] of the said
maximum in In-Patient Benefits to any one member shall preclude a subsequent payment of benefits to
such member in respect of an unrelated sickness, injury or related causes happening during the remainder
of his membership term.
(a) Room and Board

(b) Services of physician and/or surgeon or specialist

(c) Use of operating room and recovery room

(d) Standard Nursing Services

(e) Drugs and Medication for use in the hospital except those which are used to dissolve blood clots in the
vascular systems (i.e., trombolytic agents)

(f) Anesthesia and its administration

(g) Dressings, plaster casts and other miscellaneous supplies

(h) Laboratory tests, x-rays and other necessary diagnostic services

(i) Transfusion of blood and other blood elements

Condition for in-Patient Care. The provision of the services or benefits mentioned in the immediately
preceding paragraph shall be subject to the following conditions:
(a) The Hospital Confinement must be approved by [petitioner's] Physician, Participating Physician or
[petitioner's] Medical Coordinator in that Hospital prior to confinement.

(b) The confinement shall be in a Participating Hospital and the accommodation shall be in accordance
with the Member[']s benefit classification.

(c) Professional services shall be provided only by the [petitioner's] Physicians or Participating
Physicians.

(d) If discharge from the Hospital has been authorized by [petitioner's] attending Physician or
Participating Physician and the Member shall fail or refuse to do so, [petitioner] shall not be responsible
for any charges incurred after discharge has been authorized.

Out-Patient Services. A Member is entitled free of charge to the following services or benefits which
shall be rendered or administered either in [petitioner's] Clinic or in a Participating Hospital under the
direction or supervision of [petitioner's] Physician, Participating Physician or [petitioner's] Medical
Coordinator.
(a) Gold Plan Standard Annual Physical Examination on the anniversary date of membership, to be done
at [petitioner's] designated hospital/clinic, to wit:
(i) Taking a medical history

(ii) Physical examination

(iii) Chest x-ray

(iv) Stool examination

(v) Complete Blood Count

(vi) Urinalysis
(vii) Fasting Blood Sugar (FBS)

(viii) SGPT

(ix) Creatinine

(x) Uric Acid

(xi) Resting Electrocardiogram

(xii) Pap Smear (Optional for women 40 years and above)

(b) Platinum Family Plan/Gold Family Plan and Silver Annual Physical Examination.

The following tests are to be done as part of the Member[']s Annual check-up program at [petitioner's]
designated clinic, to wit:
1) Routine Physical Examination

2) CBC (Complete Blood Count)

* Hemoglobin * Hematocrit

* Differential * RBC/WBC

3) Chest X-ray

4) Urinalysis

5) Fecalysis

(c) Preventive Health Care, which shall include:

(i) Periodic Monitoring of Health Problems

(ii) Family planning counseling

(iii) Consultation and advices on diet, exercise and other healthy habits

(iv) Immunization but excluding drugs for vaccines used

(d) Out-Patient Care, which shall include:

(i) Consultation, including specialist evaluation
(ii) Treatment of injury or illness

(iii) Necessary x-ray and laboratory examination

(iv) Emergency medicines needed for the immediate

relief of symptoms

(v) Minor surgery not requiring confinement

Emergency Care. Subject to the conditions and limitations in this Agreement and those specified below,
a Member is entitled to receive emergency care [in case of emergency. For this purpose, all hospitals and
all attending physician(s) in the Emergency Room automatically become accredited. In participating
hospitals, the member shall be entitled to the following services free of charge: (a) doctor's fees, (b)
emergency room fees, (c) medicines used for immediate relief and during treatment, (d) oxygen,
intravenous fluids and whole blood and human blood products, (e) dressings, casts and sutures and (f) x-
rays, laboratory and diagnostic examinations and other medical services related to the emergency
treatment of the patient.]5 Provided, however, that in no case shall the total amount payable by [petitioner]
for said Emergency, inclusive of hospital bill and professional fees, exceed P75,000.00.

If the Member received care in a non-participating hospital, [petitioner] shall reimburse [him] 6 80% of the
hospital bill or the amount of P5,000.00[,] whichever is lesser, and 50% of the professional fees of non-
participating physicians based on [petitioner's] schedule of fees provided that the total amount[,] inclusive
of hospital bills and professional fee shall not exceed P5,000.00.

On January 27, 2000, respondent Commissioner of Internal Revenue sent petitioner a formal demand
letter and the corresponding assessment notices demanding the payment of deficiency taxes, including
surcharges and interest, for the taxable years 1996 and 1997 in the total amount of P224,702,641.18. The
assessment represented the following:

Value Added Tax (VAT) DST

1996 P 45,767,596.23 P 55,746,352.19

1997 54,738,434.03 68,450,258.73

P 100,506,030.26 P 124,196,610.92
The deficiency DST assessment was imposed on petitioner's health care agreement with the members of
its health care program pursuant to Section 185 of the 1997 Tax Code which provides:

Section 185. Stamp tax on fidelity bonds and other insurance policies. - On all policies of insurance or
bonds or obligations of the nature of indemnity for loss, damage, or liability made or renewed by any
person, association or company or corporation transacting the business of accident, fidelity,
employer's liability, plate, glass, steam boiler, burglar, elevator, automatic sprinkler, or other branch of
insurance (except life, marine, inland, and fire insurance), and all bonds, undertakings, or
recognizances, conditioned for the performance of the duties of any office or position, for the doing or not
doing of anything therein specified, and on all obligations guaranteeing the validity or legality of any
bond or other obligations issued by any province, city, municipality, or other public body or organization,
and on all obligations guaranteeing the title to any real estate, or guaranteeing any mercantile credits,
which may be made or renewed by any such person, company or corporation, there shall be collected a
documentary stamp tax of fifty centavos (P0.50) on each four pesos (P4.00), or fractional part thereof, of
the premium charged. (emphasis supplied)

Petitioner protested the assessment in a letter dated February 23, 2000. As respondent did not act on the
protest, petitioner filed a Petition for Review in the Court of Tax Appeals (CTA) seeking the cancellation
of the deficiency VAT and DST assessments.

On April 5, 2002, the CTA rendered a decision,7 the dispositive portion of which read:

WHEREFORE, in view of the foregoing, the instant Petition for Review is PARTIALLY GRANTED.
Petitioner is hereby ORDERED to PAY the deficiency VAT amounting to P22,054,831.75 inclusive of
25% surcharge plus 20% interest from January 20, 1997 until fully paid for the 1996 VAT deficiency
and P31,094,163.87 inclusive of 25% surcharge plus 20% interest from January 20, 1998 until fully paid
for the 1997 VAT deficiency. Accordingly, VAT Ruling No. [231]-88 is declared void and without force
and effect. The 1996 and 1997 deficiency DST assessment against petitioner is hereby CANCELLED
AND SET ASIDE. Respondent is ORDERED to DESIST from collecting the said DST deficiency tax.

SO ORDERED.8

Respondent appealed the CTA decision to the CA9 insofar as it cancelled the DST assessment. He
claimed that petitioner's health care agreement was a contract of insurance subject to DST under Section
185 of the 1997 Tax Code.

On August 16, 2004, the CA rendered its decision.10 It held that petitioner's health care agreement was in
the nature of a non-life insurance contract subject to DST:
WHEREFORE, the Petition for Review is GRANTED. The Decision of the Court of Tax Appeals, insofar
as it cancelled and set aside the 1996 and 1997 deficiency documentary stamp tax assessment and ordered
petitioner to desist from collecting the same is REVERSED and SET ASIDE.

Respondent is ordered to pay the amounts of P55,746,352.19 and P68,450,258.73 as deficiency

Documentary Stamp Tax for 1996 and 1997, respectively, plus 25% surcharge for late payment and 20%
interest per annum from January 27, 2000, pursuant to Sections 248 and 249 of the Tax Code, until the
same shall have been fully paid.

SO ORDERED.11

Petitioner moved for reconsideration but the CA denied it. Hence, this petition.

Petitioner essentially argues that its health care agreement is not a contract of insurance but a contract for
the provision on a prepaid basis of medical services, including medical check-up, that are not based on
loss or damage. Petitioner also insists that it is not engaged in the insurance business. It is a health
maintenance organization regulated by the Department of Health, not an insurance company under the
jurisdiction of the Insurance Commission. For these reasons, petitioner asserts that the health care
agreement is not subject to DST.

We do not agree.

The DST is levied on the exercise by persons of certain privileges conferred by law for the creation,
revision, or termination of specific legal relationships through the execution of specific instruments. 12 It is
an excise upon the privilege, opportunity, or facility offered at exchanges for the transaction of the
business.13 In particular, the DST under Section 185 of the 1997 Tax Code is imposed on the privilege
of making or renewing any policy of insurance (except life, marine, inland and fire insurance), bond
or obligation in the nature of indemnity for loss, damage, or liability.

Under the law, a contract of insurance is an agreement whereby one undertakes for a consideration to
indemnify another against loss, damage or liability arising from an unknown or contingent event. 14 The
event insured against must be designated in the contract and must either be unknown or contingent. 15

Petitioner's health care agreement is primarily a contract of indemnity. And in the recent case of Blue
Cross Healthcare, Inc. v. Olivares,16 this Court ruled that a health care agreement is in the nature of a
non-life insurance policy.

Contrary to petitioner's claim, its health care agreement is not a contract for the provision of medical
services. Petitioner does not actually provide medical or hospital services but merely arranges for the
same17 and pays for them up to the stipulated maximum amount of coverage. It is also incorrect to say that
the health care agreement is not based on loss or damage because, under the said agreement, petitioner
assumes the liability and indemnifies its member for hospital, medical and related expenses (such as
professional fees of physicians). The term "loss or damage" is broad enough to cover the monetary
expense or liability a member will incur in case of illness or injury.

Under the health care agreement, the rendition of hospital, medical and professional services to the
member in case of sickness, injury or emergency or his availment of so-called "out-patient services"
(including physical examination, x-ray and laboratory tests, medical consultations, vaccine administration
and family planning counseling) is the contingent event which gives rise to liability on the part of the
member. In case of exposure of the member to liability, he would be entitled to indemnification by
petitioner.

Furthermore, the fact that petitioner must relieve its member from liability by paying for expenses arising
from the stipulated contingencies belies its claim that its services are prepaid. The expenses to be incurred
by each member cannot be predicted beforehand, if they can be predicted at all. Petitioner assumes the
risk of paying for the costs of the services even if they are significantly and substantially more than what
the member has "prepaid." Petitioner does not bear the costs alone but distributes or spreads them out
among a large group of persons bearing a similar risk, that is, among all the other members of the health
care program. This is insurance.

Petitioner's health care agreement is substantially similar to that involved in Philamcare Health Systems,
Inc. v. CA.18 The health care agreement in that case entitled the subscriber to avail of the hospitalization
benefits, whether ordinary or emergency, listed therein. It also provided for "out-patient benefits" such as
annual physical examinations, preventive health care and other out-patient services. This Court ruled
in Philamcare Health Systems, Inc.:

[T]he insurable interest of [the subscriber] in obtaining the health care agreement was his own health. The
health care agreement was in the nature of non-life insurance, which is primarily a contract of
indemnity. Once the member incurs hospital, medical or any other expense arising from sickness, injury
or other stipulated contingency, the health care provider must pay for the same to the extent agreed upon
under the contract.19 (emphasis supplied)

Similarly, the insurable interest of every member of petitioner's health care program in obtaining the
health care agreement is his own health. Under the agreement, petitioner is bound to indemnify any
member who incurs hospital, medical or any other expense arising from sickness, injury or other
stipulated contingency to the extent agreed upon under the contract.

Petitioner's contention that it is a health maintenance organization and not an insurance company is
irrelevant. Contracts between companies like petitioner and the beneficiaries under their plans are treated
as insurance contracts.20

Moreover, DST is not a tax on the business transacted but an excise on the privilege, opportunity, or
facility offered at exchanges for the transaction of the business. 21 It is an excise on the facilities used in
the transaction of the business, separate and apart from the business itself.22

WHEREFORE, the petition is hereby DENIED.The August 16, 2004 decision of the Court of Appeals
in CA-G.R. SP No.70479is AFFIRMED.

Petitioner is ordered to pay the amounts of P55,746,352.19 and P68,450,258.73 as deficiency

documentary stamp tax for 1996 and 1997, respectively, plus 25% surcharge for late payment and 20%
interest per annum from January 27, 2000 until full payment thereof.

Costs against petitioner.

SO ORDERED.
Puno, C.J., Chairperson, Carpio, Azcuna, Leonardo-de Castro, JJ., concur.

SALVADOR YAPYUCO Y ENRIQUEZ v. SANDIGANBAYAN, GR Nos. 120744-46, 2012-06-25

Facts:
These are petitions for review on certiorari... assailing the
Decision of the Sandiganbayan in Criminal Case Nos. 16612, 16613 and 16614 cases for murder,
frustrated murder and multiple counts of... attempted murder
The cases are predicated on a shooting incident on April 5, 1988 in Barangay Quebiawan, San
Fernando, Pampanga which caused the death of Leodevince Licup (Licup) and injured Noel
Villanueva (Villanueva). Accused were... members of the Integrated National Police (INP)...
stationed at the Sindalan Substation in San Fernando, Pampanga; Jose Pamintuan (Pamintuan) and
Mario Reyes, who were... barangay captains of Quebiawan and Del Carmen, respectively; Ernesto
Puno, Andres Reyes and Virgilio Manguerra (Manguerra), Carlos David, Ruben Lugtu, Moises Lacson
(Lacson), Renato Yu, Jaime Pabalan (Pabalan) and Carlos David (David), who were either member of
the Civil Home
Defense Force (CHDF) or civilian volunteer officers in Barangays Quebiawan, Del Carmen and
Telebastagan. They were all charged with murder, multiple attempted murder and frustrated
murder in three Informations... after having voluntarily surrendered to the authorities... the
accused except Pabalan who died earlier... and Yapyuco who was then allegedly indisposed...
entered individual pleas of not guilty.
A month later, Yapyuco voluntarily surrendered to the authorities, and at his arraignment likewise
entered a negative plea.
The prosecution established
Villanueva, Flores, Calma, De Vera, Panlican and Licup were at the residence of Salangsang as guests
at the barrio fiesta celebrations between 5:00 and 7:30 p.m. The company decided to leave at
around 7:30 p.m., shortly after the religious procession had passed. As they were all inebriated,
Salangsang reminded Villanueva, who was on the wheel, to drive carefully and watch out for
potholes and open canals on the road. With Licup in the passenger seat and the rest of his
companions at the... back of his Tamaraw jeepney, Villanueva allegedly proceeded at 5-10 kph with
headlights dimmed. Suddenly, as they were approaching a curve on the road, they met a burst of
gunfire and instantly, Villanueva and Licup were both wounded and bleeding profusely.
Of all the accused, only Yapyuco took the stand for the defense. He identified himself as the
commander of the Sindalan Police Substation in San Fernando, Pampanga and the superior officer
of petitioners Cunanan and Puno
He narrated tha... he and his men were investigating a physical injuries case when Yu suddenly
received a summon for police assistance from David, who supposedly was instructed by Pamintuan,
concerning a... reported presence of armed NPA members in Quebiawan. Yapyuco allegedly called
on their main station in San Fernando for reinforcement but at the time no additional men could be
dispatched. Hence, he decided to respond and instructed his men to put on their uniforms and
bring... their M-16 rifles with them.
Yapyuco continued that at the place appointed, he and his group met with Pamintuan who told him
that he had earlier spotted four (4) men carrying long firearms.
Moments later, Pamintuan announced the approach of his suspects, hence Yapyuco, Cunanan and
Puno took post in the middle of the road at the... curve where the Tamaraw jeepney conveying the
victims would make an inevitable turn. As the jeepney came much closer, Pamintuan announced
that it was the target vehicle, so he, with Cunanan and Puno behind him, allegedly flagged it down
and signaled for it to stop. He claimed... that instead of stopping, the jeepney accelerated and
swerved to its left. This allegedly inspired him, and his fellow police officers... to fire warning shots
but the jeepney continued pacing forward, hence they were impelled to fire at... the tires thereof
and instantaneously, gunshots allegedly came bursting from the direction of Naron's house directly
at the subject jeepney.
Yapyuco explained that the peace and order situation in Barangay Quebiawan at the time was in
bad shape, as in fact there were several law enforcement officers in the area who had been
ambushed supposedly by rebel elements, and that he frequently... patrolled the barangay on
account of reported sightings of unidentified armed men therein.
He said that the shots which directly hit the passenger door of the jeepney did not come from him
or from his fellow police officers but rather from Cafgu members assembled in the residence... of
Naron, inasmuch as said shots were fired only when the jeepney had gone past the spot on the road
where they were assembled.
, it found Yapyuco, Cunanan, Puno, Manguera and Mario and
Andres Reyes guilty as co-principals in the separate offense of homicide for the eventual death of
Licup (instead of murder as charged in Criminal Case No. 16612) and of attempted homicide for the
injury sustained by Villanueva (instead of frustrated murder as charged in
Criminal Case No. 16614), and acquitted the rest in those cases. It acquitted all of them of
attempted murder charged in Criminal Case No. 16613 in respect of Flores, Panlican, De Vera and
Calma.
Sandiganbayan declared that the shootout which caused injuries to Villanueva and which brought
the eventual death of Licup has been committed by petitioners herein willfully under the guise of
maintaining peace and order;... that the theory of mistaken belief could not likewise benefit
petitioners because there was supposedly no showing that they had sufficient... basis or probable
cause to rely fully on Pamintuan's report that the victims were armed NPA members, and they have
not been able by evidence to preclude ulterior motives or gross inexcusable negligence when they
acted as they did
; that there was... insufficient or total absence of factual basis to assume that the occupants of the
jeepney were members of the NPA or criminals for that matter; and that the shooting incident
could not have been the product of a well-planned and well-coordinated police operation but was
the... result of either a hidden agenda concocted by Barangay Captains Mario Reyes and Pamintuan,
or a hasty and amateurish attempt to gain commendation.
Issues:
whether the accused had acted in the regular and lawful performance of their duties in the
maintenance of peace and order either as barangay officials and as members of the police and the
CHDF, and hence, could take shelter in the... justifying circumstance provided in Article 11 (5) of the
Revised Penal Code; or whether they had deliberately ambushed the victims with the intent of
killing them.
Ruling:
Law enforcers thrust their lives in unimaginable zones of peril. Yet resort to wanton violence is
never justified when their duty could be performed otherwise. A "shoot first, think later" disposition
occupies no decent place in a civilized society. Never... has homicide or murder been a function of
law enforcement. The public peace is never predicated on the cost of human life.
the invocation of the concept of mistake of fact faces certain failure
In the context of criminal law, a "mistake of fact" is a misapprehension of a fact which, if true,
would have justified the act or omission which is the subject of the... prosecution.
Generally, a reasonable mistake of fact is a defense to a charge of crime where it negates the intent
component of the crime.
It may be a defense even if the offense charged requires proof of only general... intent.
The inquiry is into the mistaken belief of the defendant, and it does not look at all to the belief or
state of mind of any other person.
A proper invocation of this defense requires (a)... that the mistake be honest and reasonable;[123]
(b) that it be a matter of fact;[124] and (c) that it negate the culpability required to commit the
crime [125] or the existence of the mental state which the statute... prescribes with respect to an
element of the offense.
The leading authority in mistake of fact as ground for non-liability is found in United States v. Ah
Chong
The firearms used by petitioners were either M16 rifle, .30 caliber garand rifle and .30 caliber
carbine.[145] While the use of these weapons does not always amount to unnecessary force, they
are nevertheless inherently lethal in nature. At the level the... bullets were fired and hit the
jeepney, it is not difficult to imagine the possibility of the passengers thereof being hit and even
killed. It must be stressed that the subject jeepney was fired upon while it was pacing the road and
at that moment, it is not as much too... difficult to aim and target the tires thereof as it is to imagine
the peril to which its passengers would be exposed even assuming that the gunfire was aimed at
the tires especially considering that petitioners do not appear to be mere rookie law enforcers or
unskilled neophytes... in encounters with lawless elements in the streets.
Thus, judging by the location of the bullet holes on the subject jeepney and the firearms employed,
the likelihood of the passenger next to the driver and in fact even the driver himself of being hit and
injured or even killed is great to say the least, certain to be precise.
This, we find to be consistent with the uniform claim of petitioners that the impulse to fire directly
at the jeepney came when it occurred to them that it was proceeding to evade their authority. And
in instances like this, their natural and logical impulse was to debilitate... the vehicle by firing upon
the tires thereof, or to debilitate the driver and hence put the vehicle to a halt. The evidence we
found on the jeepney suggests that petitioners' actuations leaned towards the latter.
This demonstrates the clear intent of petitioners to bring forth death on Licup who was seated on
the passenger side and to Villanueva who was occupying the wheel, together with all the
consequences arising from their deed. The circumstances of the shooting breed no other...
inference than that the firing was deliberate and not attributable to sheer accident or mere lack of
skill.
ROWENO POMOY v. PEOPLE, GR No. 150647, 2004-09-29
Facts:
Tomas Balboa was a master teacher of the Concepcion College of Science and Fisheries in
Concepcion, Iloilo.
to arrest Balboa, allegedly in connection with a robbery which took place in the municipality in
December 1989
Balboa was taken to the Headquarters of the already defunct 321st Philippine Constabulary
Company at Camp Jalandoni, Sara, Iloilo. He was detained in the jail thereat, along with Edgar
Samudio, another suspect in the robbery case
Balboa was detained and directed the latter to come out, purportedly for tactical interrogation at
the investigation room, as he told
Balboa: 'Let's go to the investigation room.' The investigation room is at the main building of the
compound where the jail is located. The jail guard on duty, Nicostrado Estepar, opened the jail
door and walked towards the investigation room.
At that time, petitioner had a gun, a .45 caliber pistol, tucked in a holster which was hanging by the
side of his belt. The gun was fully embedded in its holster, with only the handle of the gun
protruding from the holster.
petitioner was seen still holding a .45 caliber pistol, facing Balboa, who was lying in a pool of blood,
about two (2) feet away. When the Commanding Officer of the Headquarters arrived, he disarmed
petitioner and directed that Balboa be brought to the hospital.
he was one of the investigators of their outfit; about 2 o'clock or past that time of January 4, 1990
he got Tomas Balboa... from their stockade for tactical interrogation; as he was already holding the
door knob of their investigation room and about to open and enter it, all of a sudden he saw Tomas
Balboa approach him and take hold or grab the handle of his gun; Tomas Balboa was a suspect in
a... robbery case who was apprehended by the police of Concepcion and then turned over to them
(PC) and placed in their stockade; he asked the sergeant of the guard to let Balboa out of the
stockade for interrogation; from the stockade with Balboa walking with him, he had his .45... caliber
pistol placed in his holster attached to his belt on his waist; then as he was holding the doorknob
with his right hand to open the door, the victim, who was two meters away from him, suddenly
approached him and grabbed his gun, but all of a sudden he held the handle of... his gun with his
left hand... his gun was already loaded in its chamber and cocked when he left his house, and it was
locked when it fired; during the grappling he used his left hand to prevent Balboa from holding his
gun, while the victim used his right hand in trying to reach the... gun; after the gun fired, they were
separated from each other and Balboa fell; he is taller than Balboa though the latter was bigger in
build; he cannot say nor determine who of them was stronger;
CA's ruling... laim of petitioner that the death of Balboa resulted from an accident. Citing People v.
Reyes,[10] the CA maintained that "a revolver is not prone to accidental firing if it... were simply
handed over to the deceased as appellant claims because of the nature of its mechanism, unless it
was already first cocked and pressure was exerted on the trigger in the process of allegedly handing
it over. If it were uncocked, then considerable pressure had to be... applied on the trigger to fire the
revolver. Either way, the shooting of the deceased must have been intentional because pressure on
the trigger was necessary to make the gun fire."[11]
OSG's position

"[Petitioner's] theory of accident would have been easier to believe had the victim been shot only
once. In this case, however, [petitioner] shot the victim not only once but twice, thereby
establishing [petitioner's] determined effort to kill the... victim. By any stretch of the imagination,
even assuming without admitting that the first shot was accidental, then it should not have been
followed by another shot on another vital part of the body. The fact that [petitioner] shot the
victim two (2) times and... was hit on two different and distant parts of the body, inflicted from two
different locations or angles, means that there was an intent to cause the victim's death, contrary to
[petitioner's] pretensions of the alleged accidental firing. It is an oft-repeated... principle that the
location, number and gravity of the wounds inflicted on the victim have a more revealing tale of
what actually happened during the incident.
Ruling on aggravating circumstance of abuse of authority

"x x x [F]or public position to be appreciated as an aggravating circumstance, the public official must
use his influence, prestige and ascendancy which his office gives him in realizing his purpose. If the
accused could have perpetrated the crime without... occupying his position, then there is no abuse
of public position.' (People vs. Joyno, 304 SCRA 655, 670). In the instant case, there is no showing
that the [petitioner] had a premeditated plan to kill the victim when the former fetched the latter
from the stockade, thus, it... cannot be concluded that the public position of the [petitioner]
facilitated the commission of the crime. Therefore, the trial court's finding that the said aggravating
circumstance that [petitioner] took advantage of his public position to commit the crime cannot
be... sustained. Hence, there being no aggravating and no mitigating circumstance proved, the
maximum of the penalty shall be taken from the medium period of reclusion temporal, a penalty
imposable for the crime of homicide. x x x."[13]
Exemption from criminal liability proceeds from a finding that the harm to the victim was not due to
the fault or negligence of the accused, but to circumstances that could not have been foreseen or
controlled.[17] Thus, in determining whether an "accident"... attended the incident, courts must
take into account the dual standards of lack of intent to kill and absence of fault or negligence. This
determination inevitably brings to the fore the main question in the present case: was petitioner in
control of the .45 caliber... pistol at the very moment the shots were fired?
Issues:
Exemption from criminal liability proceeds from a finding that the harm to the
Exemption from criminal liability proceeds from a finding that the harm to the victim was not due to
the fault or negligence of the accused, but to circumstances that could not have been foreseen or
controlled.[17] Thus, in determining whether an "accident"... attended the incident, courts must
take into account the dual standards of lack of intent to kill and absence of fault or negligence. This
determination inevitably brings to the fore the main question in the present case: was petitioner in
control of the .45 caliber... pistol at the very moment the shots were fired?
Ruling:
The foregoing account demonstrates that petitioner did not have control of the gun during the
scuffle. The deceased persistently attempted to wrest the weapon from him, while he resolutely
tried to thwart those attempts. That the hands of both petitioner and the... victim were all over the
weapon was categorically asserted by the eyewitness. In the course of grappling for the gun, both
hands of petitioner were fully engaged -- his right hand was trying to maintain possession of the
weapon, while his left was warding off the... victim. It would be difficult to imagine how, under
such circumstances, petitioner would coolly and effectively be able to release the safety lock of the
gun and deliberately aim and fire it at the victim.
It is undisputed that both petitioner and the victim grappled for possession of the gun. This frenzied
grappling for the weapon -- though brief, having been finished in a matter of seconds -- was fierce
and vicious. The eyewitness account amply illustrated the logical... conclusion that could not be
dismissed: that in the course of the scuffle, the safety lock could have been accidentally released
and the shots accidentally fired.
Petitioner also testified on cross-examination that a caliber .45 semi-automatic pistol, when fired,
immediately slides backward throwing away the empty shell and returns immediately carrying again
a live bullet in its chamber. Thus, the gun can, as it... did, fire in succession. Verily, the location of,
and distance between the wounds and the trajectories of the bullets jibe perfectly with the claim of
the petitioner: the trajectory of the first shot going downward from left to right thus pushing
Balboa's upper body, tilting it to the left while Balboa was still clutching petitioner's hand over the
gun; the second shot hitting him in the stomach with the bullet going upward of Balboa's body as he
was falling down and releasing his hold on petitioner's hand
Thus, the appellate court's reliance on People v. Reyes [21] was misplaced. In that case, the Court
disbelieved the accused who described how his gun had exploded while he was simply handing it
over to the victim. Here, no similar... claim is being made; petitioner has consistently maintained
that the gun accidentally fired in the course of his struggle with the victim. More significantly, the
present case involves a semi-automatic pistol, the mechanism of which is very different from that of
a... revolver, the gun used in Reyes.[22] Unlike a revolver, a semi-automatic pistol, as sufficiently
described by petitioner, is prone to accidental firing when possession thereof becomes the object of
a struggle.
The elements of accident are as follows: 1) the accused was at the time performing a lawful act with
due care; 2) the resulting injury was caused by mere accident; and 3) on the part of the accused,
there was no fault or no intent to cause the injury.[27]
From the facts, it is clear that all these elements were present. At the time of the incident,
petitioner was a member -- specifically, one of the investigators -- of the Philippine National Police
(PNP) stationed at the Iloilo Provincial Mobile Force Company.
Thus, it was in the lawful performance of his duties as investigating officer that, under the
instructions of his superior, he fetched the victim from the latter's cell for a routine interrogation.
Again, it was in the lawful performance of his duty as a law enforcer that petitioner tried to defend
his possession of the weapon when the victim suddenly tried to remove it from his holster. As an
enforcer of the law, petitioner was duty-bound to prevent the snatching of... his service weapon by
anyone, especially by a detained person in his custody. Such weapon was likely to be used to
facilitate escape and to kill or maim persons in the vicinity, including petitioner himself.
Alleged Grappling Not Negated... by Frontal Location of Wounds
Petitioner cannot be faulted for negligence. He exercised all the necessary precautions to prevent
his service weapon from causing accidental harm to others. As he so assiduously maintained, he
had kept his service gun locked when he left his house; he kept it inside its... holster at all times,
especially within the premises of his working area.
At no instance during his testimony did the accused admit to any intent to cause injury to the
deceased, much less kill him. Furthermore, Nicostrato Estepar, the guard in charge of the detention
of Balboa, did not testify to any behavior on the part of petitioner that... would indicate the intent
to harm the victim while being fetched from the detention cell.
The participation of petitioner, if any, in the victim's death was limited only to acts committed in the
course of the lawful performance of his duties as an enforcer of the law. The removal of the gun
from its holster, the release of the safety lock, and the firing of the... two successive shots -- all of
which led to the death of the victim -- were sufficiently demonstrated to have been consequences
of circumstances beyond the control of petitioner. At the very least, these factual circumstances
create serious doubt on the latter's... culpability.
Petitioner advanced self-defense as an alternative. Granting arguendo that he intentionally shot
Balboa, he claims he did so to protect his life and limb from real and immediate danger.
Self-defense is inconsistent with the exempting circumstance of accident, in which there is no intent
to kill. On the other hand, self-defense necessarily contemplates a premeditated intent to kill in
order to defend oneself from imminent danger.[28]
Apparently, the fatal shots in the instant case did not occur out of any conscious or premeditated
effort to overpower, maim or kill the victim for the purpose of self-defense against any aggression;
rather, they appeared to be the spontaneous and accidental result of both... parties' attempts to
possess the firearm.
Principles:
Well-established is the principle that the factual findings of the trial court, when affirmed by the
Court of Appeals, are binding on the highest court of the land. However, when facts are
misinterpreted and the innocence of the accused depends on a... proper appreciation of the factual
conclusions, the Supreme Court may conduct a review thereof.
facts are misinterpreted and the innocence of the accused depends on a... proper appreciation of
the factual conclusions, the Supreme Court may conduct a review thereof. In the present case, a
careful reexamination convinces this Court that an "accident" caused the victim's death. At the very
least, the testimonies of the credible... witnesses create a reasonable doubt on appellant's guilt.
Hence, the Court must uphold the constitutional presumption of innocence.