Planters Products v. Fertiphil Corporation

1. Planters Products Inc.
vs.
Fertiphil Corporation
The Parties
Facts of the
CaseLower Court
Decisions
Issues and
Court Ruling
Petitioners Fertiphil and Planters
Products Inc. are both private
corporations incorporated under
the Philippine laws, both
engaged in the importation and
distribution of fertilizers,
pesticides and agricultural
chemicals.
President Marcos issued
LOI 1465 which provided:
(1) imposition of capital
recovery component on
the domestic sale of all
grades of fertilizers in the
PH
MARCOS
ADMINISTRATION
Which is to be raised
once the capital is
raised to make Planters
Products viable.
Fertiphil paid P10.00
for every bag of
fertilizer.
Fertilizer and Peciticide
Authority then remit
these payments to its
bank depository—Far
East Bank.
After the 1986 EDSA
Revolution, FPA stopped
the imposition of P10
levy.
1986 EDSA
REVOLUTION
Fertiphil filed a
complaint for
collection and
damages
Questioning the
constitutionality of LOI 1465
for being unjust, oppressive,
invalid and unlawful
imposition that amounted to
denial of due process of law.
OSG countered that it
was a valid exercise of
police power which
insures the stability of
fertilizers in the country.
RTC
Court of
Appeals
In favor of Fertiphil—
ruling that levies can
only be used for public
purpose.
Ruled in favor of
Fertiphil—affirmed
RTC s decision—for
the same reason that
levies must be imposed
for public purpose only.
Is LOI a valid
classification
of police
power? Police power s purpose is to regulate
conduct, while taxation is for revenue
generation.
In this case, it cannot be called police
power because it is not exacted based
on upholding of public purpose/ order.
Hence, the P10 levy is unconstitutional
because it was not for public purpose (
inherent limitation of tax)
GENERAL RULE: An unconstitutional
law is void. It produces no rights,
imposes no duties, affords no protection,
has no legal effect.
The doctrine of operative fact is
applicable only if an undue burden will
be imposed on those who have relied on
an invalid law.
Considering that
the LOI is void,
does doctrine of
operative facts
apply?
Therefore, Fertiphil is
entitled to the capital
recovery refund of all its
sales re: implementation of
LOI