Case 1

G.R. No. L-44257             November 22, 1938

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, plaintiff-appellant, 

Office of the Solicitor General Hilado for appellant.

ABAD SANTOS, J.:

The appellees are banking institutions doing business in this country. This action was brought by the appellant to
determine the liability of the appellees demurred into the complaint upon the ground that it did not state facts
sufficient to constitute a cause of action, in that the statutory provision relied upon by the appellant was
unconstitutional. The National City Bank of New York alleged further, in support of the demurrer file by it, that
there was a misjoinder of parties defendant, and that section 11 of Act No. 4007 did not impose any tax upon
national banking associations, in which class it belonged. The court below sustained the demurrers filed by the
appellees, on the sole ground that the complaint did not allege a cause of action, because the statutory provision
involved was unconstitutional.

The question now presented is the constitutionality of section 11 of Act No. 4007, which reads as follows:

SEC. 11. The provisions of existing law to the contrary notwithstanding, the total annual expenses of the
Bureau of Banking shall be reimbursed annually to the Government by assessment levied upon all
banking institutions subject to inspection by the Bank Commissioner. The proportion of expenses of the
Bureau of banking to be assessed against each such banking institution shall be the same as the
proportion which its average total assets bear to the average total assets of all such banking institutions
during the year in which the expenses were incurred.

1. Appellees contend that the subject matter contained in this section is not embraced in the title of the Act, in
violation of section 3 of the Jones Law which provides, among other thing That no bill which may be enacted into
law shall embrace more than one subject, and that subject shall be expressed in the title of the bill. This
provisions is similar to those found in the constitutions of most of the State of the Union. It has been said that the
purpose of such provision is to prevent the evils of so called omnibus bills and surreptitious or unconsidered
legislation. "The mischief sought to be remedied by the requirement of a single subject or object of legislation was
the practice of bringing together in one bill matters having no necessary or proper connection with each other but
often entirely unrelated and even incongruous. By the practice of incorporating in proposed legislation of a
meritorious character provisions not deserving of general favor but which, standing alone and in their own merits,
were likely to be rejected, measures which could not have been carried without such a device and which were
sometimes of a pernicious character were often incorporated in the laws for, to secure needed and desirable
legislation, members of the legislative were, by this means, often induced to sanction and actually vote for
provisions which, if presented as independent subjects of legislation, would not have received their support. It
was also the practice to include in the same bill wholly unrelated provisions, with the view of combining in favor of
the bill the supporters of each, and thus securing the passage of several measures, no one of which could
succeed on its own merits. To do away with this hodge podge or 'log rolling' legislation was one, and perhaps the
primary, object of this constitutional provisions. Another abuse that develop in legislative bodies was the practice
of enacting laws under false and misleading titles, thereby concealing from the members of the legislature, and
from the people, the true nature of the laws so enacted. It is to prevent surreptitious legislation in this manner that
the title. While the objects of these constitutional provisions are variously stated, the authorities are agreed that
they were adopted to remedy these and similar abuses. The purposes of these constitutional provisions have
been summarized as follows 1 to prevent log rolling legislation 2 to prevent surprise, or fraud, in the legislature by
means of provisions in bills of which the titles give no intimation and 3 to apprise the people of the subject of
legislation under consideration." 25 R. C. L., pp. 834-836.

Constitutional provisions relating to the subject matter and titles of statutes should not be so narrowly construed
as to cripple or impede proper legislation. In Detroit vs. Detroit Citizens' Street R. Co. 184 U. S., 368, 392 46 Law.
ed., 592, 609, the Supreme Court of the United States quoted with approval the following language of Judge
Cooley "We must give the constitutional provision a reasonable construction and effect. The Constitution requires
no law to embrace more than one object, which shall be expressed in its title. Now, the object may be very
comprehensive and still be without objection, and the one before us is of that character. But it is by no means
essential that every end and means necessary or convenient for the accomplishment of the general object should
be either referred to or necessarily indicated by the title. All that can treasonably be required is that the title shall
not be made to cover legislation incongruous in itself, and which by no fair intendment can be considered as
having a necessary or proper connection."

The requirement that the subject of an act shall be expressed in its title should receive a reasonable and not a
technical construction. Carter Country vs. Sinton, 120 U. S., 517, 522 30 Law. ed., 701, 702. It is sufficient if the
title be comprehensive enough reasonably to include the general object which a statute seeks to effect, without
expressing each and every end and means necessary or convenient for the accomplishing of that object. Mere
details need not be set forth. Knights Templars Masons Life Indemnity Co. vs. Jarman, 187 U. S., 197 47 Law.
ed., 139. The title need not be an abstract or index of the act. In Mahomet vs. Quackenbush 117 U. S., 508 29
Law. ed., 982 , the General Assembly of the State of Illinois passed an Act entitled: "An Act to Amend the Articles
of Association of the Danville, Urbana, Bloomington and Perkin Railroad Company, and to Extend the Powers of
and Confer a Charter upon the Same" The body of the Act provided that incorporated towns or township in
counties along the railroad route may subscribe to its capital stock, and further provided the manner of holding
elections in regard to the subscription. The Supreme Court of the United States held that the title of the act
covered the provisions in its body within the purpose of section 23 of article 3 of the Illinois Constitution of 1848
which provided that And no private or local law which may be passed by the General Assembly shall embrace
more than one object, and that shall be expressed in the title. In the course of its decision, the court said: "The
point now made is that the statute, so far as it undertakes to authorize municipalities to subscribe to the capital
stock of the corporation, is unconstitutional because it embraces two distinct subjects, one the incorporation of
the railroad company, and the other an enlargement of the corporate powers of municipal corporations, the first of
which alone is expressed in the title. This objection, it seems to us, is fully disposed of by the case of Supervisors
of Schuyler Co. vs. Rock Island, etc. R. R. Co. 25 Ill., 182 , decide by the Supreme Court of Illinois in 1860. There
the title was 'An Act to Incorporate the Rock Island Alton Railroad Company,' and the Act, besides incorporating
the company, authorized countries to subscribe to the stock. As to this the court said, speaking through Chief
Justice Caton: 'We think the title of this Act sufficient to embrace the whole of the law, and that it is a compliance
with the constitutional requirement. All the provisions of the Act are appropriately designed to carry out the object
of the corporation. If it was proper to authorize subscriptions to the stock, it was certainly proper to enable
individuals or counties to subscribe and specify the terms and conditions on which they might subscribed, and the
mode of making the subscription.'

In States where constitutional provisions like that now under consideration have been decided to be
mandatory, and not directory only, it has generally been held that the requirement is satisfied if the law
has but one general object, and that is clearly expressed in the title. It is enough if the body of the Act is
germane to the title.

The title of Act No. 4007 is: "An Act to reorganize the departments, bureaus and offices of the Insular
Government, and for other purposes." At the time of the passage of this Act, the Bureau of banking was already
in existence as one of the bureaus of the Insular Government. Act No. 3519. It seems clear therefore that that
bureau is embraced in that title. On the other hand, the contents of section 11 are germane to and connected
with the organization and maintenance of said bureau.

2. It is now beyond question that the banking business is so affected with a public interest as to justify its
regulation and control under the police power of the state. Noblew State bank vs. Haskell, 219 U.S., 104 55 Law.
ed., 112. Since bank are indispensable agencies through which the industry, trade and commerce of all civilized
countries and communities are carried on, the business which they transact, though for private profit, is of a
preminently public nature, and is therefore universally recognized as a proper subject of legislative regulation
under the police power of the state. 3 R. C. L., 379. The legislature may establish such reasonable and general
regulations of banking institutions as may be essential to the public safety, and provide for the enforcement of
such regulations by a board or bureau supported by moderate assessments upon those engaging in the banking
business. Oxford vs. Love, 250 U. S., 603 63 Law. ed., 1165.

3. The National City Bank of New York, one of the herein appellees, being an agency of the United States, was
not subject to taxation by the Philippine Government except as permitted by Act of Congress. The form of
taxation imposed under section 11 of Act No. 4007 was not permitted by any act of Congress.
Posadas vs. National City Bank, 296 U. S., 497 80 Law. ed., 351.

Our conclusion is that section 11 of Act No. 4007 is constitutional. It does not, however, apply to the appellee, the
National City Bank of the New York.

The judgment appealed from is affirmed with regard to the appellee, the National City Bank of New York, an
reversed as to the other appellees; and the case is remanded to the court below for further proceedings in
conformity with this opinion. So ordered.

Avanceña, C.J., Villa-Real and Imperial, JJ., concur.