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Updated 22nd March 2025
Endencia and Jugo vs. David
The Supreme Court ruled that Section 13 of Republic Act No. 590, which allowed income taxation of judicial salaries, was unconstitutional. The Court held that taxing judges’ salaries constitutes a “diminution” of compensation prohibited by the Constitution and affirmed the judiciary’s exclusive authority to interpret the Constitution.

Primary Holding

Section 13 of Republic Act No. 590 is unconstitutional because taxing judicial salaries violates the constitutional prohibition against diminishing judicial compensation, and Congress cannot legislate to override the judiciary’s constitutional interpretation.

Background

Judges Pastor M. Endencia and Fernando Jugo sued for refunds of income taxes withheld from their salaries. The lower court ruled in their favor, citing Perfecto v. Meer. The Collector of Internal Revenue appealed, arguing Congress’s enactment of RA 590 validated the taxation.

History

  • Consolidated cases were filed in the Manila Court of First Instance (1951), which ordered tax refunds. The Collector appealed directly to the Supreme Court (1953).

Facts

  • 1. Endencia (Court of Appeals Associate Justice) and Jugo (Presiding Justice of the Court of Appeals, later Supreme Court Associate Justice) had income taxes withheld from their salaries in 1950–1951. They argued this violated Article VIII, Section 9 of the Constitution.

Arguments of the Petitioners

  • 1. Taxation of judicial salaries is a prohibited diminution of compensation under the Constitution. Congress cannot reinterpret the Constitution through RA 590 to override Perfecto v. Meer.

Arguments of the Respondents

  • 1. RA 590 explicitly authorizes taxation of all public officers’ salaries. Congress validly declared such taxation is not a diminution, and Perfecto v. Meer should be overturned.

Issues

  • 1. Does Section 13 of RA 590 violate the Constitution by permitting taxation of judicial salaries?
  • 2. Can Congress legislate to reinterpret constitutional provisions after a judicial ruling?

Ruling

  • 1. The Court affirmed the lower court’s decision. Taxing judicial salaries diminishes compensation, violating Article VIII, Section 9. RA 590’s Section 13 unconstitutionally invades the judiciary’s interpretive authority.

Doctrines

  • 1. Separation of Powers: Congress cannot interpret laws or the Constitution.
  • 2. Judicial Independence: Tax exemption preserves judicial independence as a public policy.
  • 3. Constitutional Supremacy: Legislative acts cannot override constitutional limits.

Key Excerpts

  • 1. “This act of interpreting the Constitution... by the Legislature is an invasion of... the Judiciary.”
  • 2. “The exemption... was grounded on public policy... to preserve the independence of the Judiciary.”

Precedents Cited

  • 1. Perfecto v. Meer (85 Phil. 552): Binding precedent exempting judicial salaries from taxation.
  • 2. Evans v. Gore (253 U.S. 245): U.S. Supreme Court case linking tax exemption to judicial independence.
  • 3. O’Malley v. Woodrough (307 U.S. 277): Distinguished as inapplicable to Philippine constitutional text.

Statutory and Constitutional Provisions

  • 1. Philippine Constitution (1935), Article VIII, Section 9: Prohibits diminution of judicial compensation.
  • 2. Republic Act No. 590, Section 13: Invalidated for contradicting constitutional protections.