Facts: The Spanish Govt. by virtue of a royal decree granted the plaintiff certain mines. The plaintiff is now the owner of those mines. The Collector of Internal Revenue imposed tax on the properties, contending that they were valid perfected mine concessions and it falls within the provisions of sec.134 of Act No. 1189 known as Internal Revenue Act. The plaintiff paid under protest. He brought an action against the defendant Collector of Internal Revenue to recover the sum of Php. 9, 600 paid by him as taxes. Judgment was rendered in favor of the defendant, so the plaintiff appealed.
Issue: Whether or Not Sec. 164 is void or valid.
Held: The deed constituted a contract between the Spanish Government and the plaintiff. The obligation of which contract was impaired by the enactment of sec. 134 of the Internal Revenue Law infringing sec. 5 of the Act of Congress which provides that “no law impairing the obligation of contracts shall be enacted”. Sec. 134 of the Internal Revenue Law of 1904 is void because it impairs the obligation of contracts contained in the concessions of mine made by the Spanish Government. Judgment reversed.
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