(Article published in
TODAY, Business Section)
law professors, from their ivory towers, did not scoff.
The legal practitioners, with their feet on the ground, did not
sneer. Neither did the
government lawyers, in their cubby holes, snicker.
Instead, the academicians cheered, the private practioners clapped
and pañeros in government
celebrated when his appointment to the Supreme Court was announced nearly
fifteen years ago. He was of
their own and his own rejoiced when he was fittingly raised up.
And as it was then, so too it is now, as Associate Justice Jose C.
Vitug today (14 July 2004) takes his mandatory farewell bow at the Court
he served so well.
Vitug joined the Supreme Court alive with an academic grounding respected
by his teaching peers, a sense of reality imbued by pounding the dusty
streets of private practice, and the just right dash of patience and
resignation borne out of a short stint in the government service.
life as a student was consistently outstanding. Always a scholar and honor
graduate in his grade school, high school, and college years, he was
graduated Bachelor of Laws cum laude by the Manuel L. Quezon University and, after passing the
Bar in the same year, was conferred his Master of Laws in 1962 followed by
his Master of National Security Administration in 1975.
shone as vibrantly from the other side of the classroom.
The list of schools where he was at one time or another a professor
of law and bar reviewer in such challenging subjects as Taxation, Civil
Law, and Commercial Law, is a virtual directory of the Philippine
Association of Law Schools. He
was, in addition, dean of Arellano Law Foundation and held the Chung Chi
the academician’s world of “publish or perish”, he was a lively
author, in contrast to the boring treatises of his peers, of significant
tomes on tax law and jurisprudence, commercial law and jurisprudence,
annotation of the Family Code and a host of other scholarly works in
various periodicals, journals and law reviews.
Needless to say, he was a much sought after, and well-attended,
speaker, educational as well as entertaining, in various seminars,
workshops and lecture sessions, such as the Supreme Court Centennial
Series, Judiciary Reorganization Implementation Seminar and National
Prosecution Seminar of the Department of Justice and similar significant
events organized by the Philippine Judiciary Academy, National Defense
College of the Philippines, the University of the Philippines and other
places of learning in the country.
too lived amongst those who were not strangers to the hard knocks of
private practice. He was in
legal partnership with various giants of the profession whose names up to
today are emblazoned in the skyline.
the government, he learned the ropes of judicial life from Justice Jose
B.L. Reyes, serving the renowned member of the Court during what many
consider its golden years as technical assistant from 1957 to 1961,
acquiring the acumen and the demeanor for the robes he would similarly
wear thirty years later.
elements coming together, no doubt purpose-driven as his fellow lay
ministers at the St. Jude Shrine in San Miguel, Manila would profess,
produced an alchemy typically Joe Vitug that manifests itself in ponencia
after ponencia. For reasons of space, only two I could mention issued in the
field of my reasonable familiarity.
1994, in his earlier years with the Supreme Court, Justice Vitug was
tasked to write the decision in Bank of America N.T. v. Court of Appeals, 234 SCRA 302.
The question to be resolved was simply the base of the 15% profits
remittance tax what was imposed by the then Section 24(b)(2)(ii) of the
National Internal Revenue Code. Was the tax to be imposed on the amount of
profits sent abroad, inclusive or exclusive of the tax?
It would have been sufficient to point out, as he did, that the law
talks of “profit remitted abroad” and, hence, the language of
the law clearly identified the amount actually remitted as the correct
no, Justice Vitug, with the blood of a teacher running in his veins, went
further to explain the genesis of the branch profits remittance tax and
showed how it was intended to equalize the tax treatment of foreign
corporations doing business in the Philippines through a subsidiary and
those doing business through a branch.
Then, he brings out the crucial difference that prevented the
uncritical adoption of the withholding rule on dividends to branch
profits: In a mother company- subsidiary situation, there are two
taxpayers; hence, the income tax withheld is constitutive of the base.
In a branch-head office scenario, there is but one taxpayer using
its domestic funds to pay the tax. “To
say that there is constructive remittance even of such funds [the 15% tax
paid to the government] would be stretching far too much that imaginary
rule. “Sound logic,” said
the good Justice, “does not defy but must concede to facts.”
There is a realistic academician, if you have not seen one before.
years later, in Meralco v. Province of Laguna, 306 SCRA 750, the Court had to
resolve the issue of whether the province of Laguna, under the
Constitution and the Local Government Code of 1991, had the power to
collect the franchise tax from MERALCO which claimed that, pursuant to P.D.
551, the 2% franchise tax it was paying to the National Government already
included the franchise tax that Laguna was seeking to collect.
P.D. 551 assured franchisees that such 2% tax was “in lieu of all
taxes and assessments of whatever nature imposed by any national or local
authority…” It would have
been sufficient for the Court to point out that the provincial franchise
tax was levied pursuant to a law, R.A. No. 7160, promulgated subsequent to
P.D. No. 551, that stated that the provincial power to impose the
franchise tax was “notwithstanding any exemption granted by any law or
Justice Vitug’s need to go deeper would not be denied.
His ponencia examined the power of local taxation from the 1935
Constitution to the present and noted the paradigm shift in favor of local
taxing authority, analyzed the impact of the Local Government Code on the
Local Tax Code, and reviewed the accompanying jurisprudence on the
subject. In addition, he gave
the scholarly-bent a bonus by dealing with the question not only of
whether Congress intended a repeal of the Local Tax Code by the Local
Government Code, but delved into whether the concessions by the first
could even be, under the Constitution, at all withdrawn by the second.
To the best of my knowledge, subsequent cases on the same subject
simply became footnotes to Meralco
v. Province of Laguna.
Undoubtedly, today marks a new, and more uplifting, stage in the life of Justice Jose C. Vitug. Many a lectern await his words of wisdom; many a professorial chair pines wait for his warm presence. The waiting arms of wife Amelia, of his six children, and eleven grandchildren will surely be competing for his attention. And we, who continue to struggle with the fortunes and vagaries of our legal profession, wait with bated breath to see how his rare legacy of scholarship cum realty would be embedded in his colleagues’ decision for the guidance of both bar and bench.