Yu Cong Eng v. Trinidad

Yu Cong Eng v. Trinidad

7 June 1926 | Taft | Certiorari to the Supreme Court of the Philippine Islands

Facts

Act No. 2972 (An act to provide in what languages account books shall be kept, and to establish penalties for its violation), also known as the “Chinese Bookkeeping Act,” was passed by the Philippine Legislature and approved in 1921. It provides:

• Section 1. It shall be unlawful for any person, company, or partnership or corporation engaged in commerce, industry or any other activity for the purpose of profit in the Philippine Islands, in accordance with existing law, to keep its account books in any language other than English, Spanish, or any local dialect.
• Section 2. Any person violating the provisions of this act shall, upon conviction, be punished by a fine of not more than ten thousand pesos, or by imprisonment for not more than two years, or both.

Yu Cong Eng, a Chinese merchant, keeps the books of account of his lumber business in Chinese, as he cannot read, write nor understand English, Spanish, or any local dialect. He was arrested for violating Act No. 2972, and his books were seized.

Trial was about to proceed when Yu Cong Eng and another petitioner Co Liam (on behalf of all other Chinese merchants in the Philippines) filed a petition against the fiscal, the collector of internal revenue, and the presiding judge.

Arguments

• By the petitioner
• Even if he would employ a bookkeeper who could keep his books in English or Spanish, he would have no means of verifying the correctness of the books. If he would employ a translator or interpreter, he might be at the mercy of his employees if they might cheat and defraud him. According to the Act, he is prohibited from even keeping a duplicate set of accounts in his own language and he will be compelled to remain in total ignorance of the status of his business.
• The enforcement of the Act would drive several Chinese merchants out of business (They do 60% of the business in the country).
• The enforcement of the Act would deprive the Chinese merchants of their liberty and property without due process of law, and deny them the equal protection of the laws.
• Under the treaty in force between US and China, petitioners are entitled to the same rights, privileges, and immunities as the citizens and subjects of Great Britain and Spain.

• By the respondent
• The law is valid and necessary, and it is only the exercise of proper legislative power. Due to the inability of internal revenue officials to check the books of the Chinese merchants, the treasury loses large sums of money corresponding to taxes.

Pronouncements of the Philippine Court

• A literal translation of the Act makes it unlawful for any Chinese merchant to keep his account books in languages other than those listed
• Another interpretation of the Act is that the Chinese merchant may keep his account books in Chinese, but he has to keep another set of books in the prescribed languages
• A third construction is that the law only intended to require the keeping of such books to facilitate governmental inspection of the same for tax purposes. However, the law does not specify what kinds of books shall be kept.
• The Act is not unconstitutional under the Court’s construction of the law. A literal interpretation would render it unconstitutional, so the Court made a reasonable construction to preserve the law.

A writ of certiorari was filed before the U.S. Supreme Court to review the Philippine Supreme Court’s decision denying an original petition for prohibition against the enforcement of criminal prosecution of Act No. 2972, on the ground of its invalidity.


Issues

• WON the PH SC made a valid construction of Act No. 2972. NO
• WON Act No. 2972 is unconstitutional. YES

Issue # 1

WON the PH SC made a valid construction of Act No. 2972. NO

It is the duty of a court in considering the validity of an act to give it such reasonable construction as can be reached to bring it within the fundamental law. However, a court may not exercise legislative functions to save the law from conflict with constitutional limitation.

What the court did was to change a penal prohibitive law to a mandatory law of great indefiniteness to conform to what the court assumes was, or ought to have been, the purpose of the legislature, and which in the change would avoid a conflict with constitutional restriction. Such strained construction, in order to make a law conform to a constitutional limitation, cannot be sustained.

“It would certainly be dangerous if the legislature could set a net large enough to catch all possible offenders, and leave it to the courts to step inside and say who could be rightfully detained and who should be set at large. This would, to some extent, substitute the judicial for the legislative department of the government.” (US v. Reese)

Issue # 2

WON Act No. 2972 is unconstitutional. YES

The law is invalid because it deprives Chinese persons of their liberty and property without due process of law, and denies them the equal protection of the laws.

Guarantees equivalent to the due process and equal protection clauses of the 14^th Amendment were extended to the PH; hence, said guarantees are to be interpreted as meaning what the provisions meant at the time when Congress made them applicable to the PH. (Serra v. Mortiga, citing Kepner v. US)

PH government may make every reasonable requirement of its taxpayers to keep records of their transactions. However, it is NOT within the police power of the legislature to prohibit Chinese merchants from maintaining a set of books in Chinese.

To justify the state in interposing its authority in behalf of the public, 1) the interests of the public require such interference and 2) the means are necessary for the accomplishment of the purpose, and not oppressive upon individuals. The determination as to what is a proper exercise of the legislature’s police power is subject to the courts’ supervision. (Lawton v. Steel)

We are likely thus to trespass on the provision of the Bill of Rights that the accused is entitled to demand the nature and cause of the accusation against him, and to violate the principle that a statute which requires the doing of an act so indefinitely described that men must guess at its meaning violates due process of law.

Act No. 2972 deprives the Chinese merchants of something indispensable to the carrying on of their business, and is obviously intended to affect them (as distinguished from the rest of the community) is a denial of the equal protection of the laws.

JUDGMENT REVERSED. ACT NO. 2972 IS INVALID.