Digest Author: Cecille Mangaser

The People of the Philippines v. Jacob Rosenthal and Nicasio Osmea

68 PHIL 628
Petition: Appeal from the judgments of the Court of First Instance of Manila
Plaintiff and Appellee: The People of the Philippines
Defendants and Appellants: Jacob Rosenthal and Nicasio Osmea
Ponente: Laurel, J.
Date: June 12, 1939
Facts:
Nicasio Osemea and Jacob Rosenthal, are two of the ten promoters, organizers, founders, and
incorporators of the O. R. O. Oil Co., Inc., a domestic corporation organized under the laws of
the Philippines and registered in the mercantile registry of the Bureau of Commerce. The capital
of the company, as reflected in the articles of incorporation, consists of 3,000 shares without par
value, 400 shares of which were paid partly by the accused at Php 5.00 per share. The shares
were considered to be speculative securities, because the value was dependent upon the promise
of future promotion and development of the oil business rather than on tangible assets and
conditions.
Without obtaining the corresponding permit or license from the Insular Treasurer, contrary to
what was provided by the law, Osmea sold 163 shares to nine different parties and Rosenthal
sold 21 shares to seven others under Case No. 52365; furthermore, during the same period,
Osmea sold 185 shares to nine different parties and Rosenthal sold 12 shares to seven others
under Case No. 52366.
The Court of First Instance found the defendants guilty. (Case No. 52365) Jacob Rosenthal was
sentenced to pay a fine of Php 500.00* and Nicasio Osmea was sentenced to pay a fine of Php
1,000.00*. (Case No. 52366) Rosenthal was sentenced to pay a fine of Php 500.00* and Osmea
was sentenced to pay a fine of Php 2,000.00*.
The defendants elevated the appeal from the judgments to the Court of Appeals, but the SolicitorGeneral motioned to forward the case to the Supreme Court because the constitutionality of Act
No. 2581 was assailed by the appellants on the following grounds:
1. Undue delegation of legislative authority to the Insular Treasurer
2. Does not afford equal protection before the law
3. Provisions are vague and ambiguous
Issue/s:
1. Whether or not there was an undue delegation of legislative authority to the Insular
Treasurer.
2. Whether or not Act No. 2581 afforded equal protection before the law.
3. Whether or not the provisions of Act No. 2581 were vague and ambiguous.

Digest Author: Cecille Mangaser

*With subsidiary imprisonment in case of insolvency, and to pay one-half of the costs.

Ruling:
1. No. The permit shall be issued when the provisions of Act No. 2581 have been duly
complied with. On the other hand, the authority to cancel a certificate or permit is
conditioned upon a finding that such is in line with public interest. The Act provides a
sufficient standard for the Insular Treasurer to follow in reaching a decision concerning
the issuance or cancellation of a certificate or a permit. The decisions of the Insular
Treasurer may be appealed to the Secretary of Finance, so there is no contention that the
Insular Treasurer can act and decide without restraining influence.
2. No. The court referred to the case of Hall v Geiger-Jones, where the US Supreme Court
held that A state may direct its law against what it deems the evil as it actually exists
without covering the whole field of possible abuses, and it may do so non the less that the
forbidden act does not differ in kind from those that are allowed.
3. No. An act will be declared void and inoperative on the ground of vagueness and
uncertainty only upon showing that the defect is such that the courts are unable to
determine, with any reasonable degree of certainty, what the legislature intended.
Dispositive:
The judgments of the lower courts were affirmed, with the modification that fines are reduced as
to accused Jacob Rosenthal from Php 500.00 to Php 200.00 in each case, and as to accused
Nicasio Osmea, from Php 1,000.00 to Php 500.00 (Case No. 52366) and from Php 2,000.00 to
Php 1,000.00 (Case No. 52365), with subsidiary imprisonment for both in case of insolvency,
and costs.