Pubcorp Sec 17-24 LGC.docx
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G.R. No. L-4060 August 29, 1952 DR. ESTEBAN MEDINA, DR. JOSE DE LA ROSA, MR. ENRIQE SANTA MARIA, !"# BENGET DE$ELO%MENT &O., IN&., plaintiffs-appellants, vs. &IT' O( BAGIO, defendant-appellee. Francisco A. Reyes for appellants. Acting City Atty. Santiago C. Gregorio for appellee. BATISTA ANGELO, J.) Plaintiffs brought this action in the Court of First Instance of Baguio seeking to nullify Ordinances Nos. !, "" and #$$ of the Cit y Council of Baguio on the ground that they %ere enacted %ithout authority or po%er, and are oppressive, un&ust and unreasonable, and to recover the ta'es and fees they had paid as i te(i)ed in the co(plaint. *steban +edina is the o%ner and operator of Pines heater, a duly licensed (ovie houses in the City of Baguio. ose . de la /osa is the o%ner and operator of P la)a heater, another duly licensed (ovie house in the city. *nri0ue 1anta(aria is the o%ner and operator under a contract of lease of 1ession heater, also a duly licensed (ovie houses in said city, %hile Benguet 2evelop(ent Co., Inc., is an operator of a gasoline station engaged in selling gasoline, petroleu( and i(ported oil products %ithin the city. 3nder Ordinance No. "", *steban +edina paid under protest a (unicipal license for #"4" for t%o 0uarters in the a(ount of P#,!$$, and ose . de la /osa paid under protest a (unicipal license for the sa(e year in the a(ount of P#,5$$ for three 0uarters. 3nder Ordinance No. !, *steban +edina paid an additional ta' of P4,5".$ during the (onths of ul y, 6 ugust, 1epte(ber and Nove(ber, #"4". *nri0ue 1anta(aria also paid an additional ta' of P#,577.$7 during the (onths of ul y and 6ugust of the sa(e year. he Benguet 2evelop(ent Co., Inc., on the other hand, paid under Ordinance No. #$$ the a(ount of P8,774.44 as specific ta' for gasoline and oil sold fro( 1epte(ber !$, #"45, to Nove(ber #9, #"4". 6fter trial, the court rendered decision declaring Ordinances Nos. "" and #$$ valid and legal but rendering Ordinance No. ! null and void %hile denying the clai( of the plaintiffs for rei(burse(ent of the different a(ounts paid by the( under protest to the City of Baguio, %ithout special pronounce(ent as to costs. Fro( this decision only the plaintiffs appealed assigning fro( errors as co((itted by the lo%er court. he first 0uestion to be deter(ined refers to the validity of Ordinance No. "" %hich fi'es the license fees to be paid by persons, entities or corporations %hich (ay engage in business %ithin the city of Baguio. his ordinance fi'es a license fee of P#!$ a year for every gasoline station installed in the city, and a fee of P!,4$$ for theaters %hich co(e under class :6:, P#,5$$ for those co(ing under class :B:, and P#,!$$ for those co(ing under class :C:. Plaintiffs paid the fees re0uired by this Ordinance, but no% dispute the po%er of the city to enact it, contending that it only has the po%er to i(pose a license fee but not to levy a ta' upon theaters and gasoline stations %hich are operated %ithin its li(its. hey contend that, %hile this ordinance e'pressly recites that its purpose is to fi' ore i(pose a license fee on the business or trade therein specified, in fact its purpose is to levy a ta' for purposes of revenue under the guise of a license fee. his, they contend, defendants cannot do. his contention has no (erit. 6ppellants apparently have in (ind section !778, paragraph ;c< of the revised 6d(inistrative Code, %hich e(po%ers the city of Baguio (erely to i(pose a license fee for purpose of regulating the business that (ay be established in the city. he po%er as thus conferred is indeed li(ited, as it does not include the po%er to levy a ta'. But on uly #7, #"45, /epublic 6ct No. 8!" %as enacted a(ending the charter of said city and adding to its po%er to license the po%er to ta' and to r egulate. 6nd it is precisely having in vie% this a(end(ent that Ordinance No. "" %as approved in order to increase the revenues of the city. In our opinion, the a(end(ent above adverted to e(po%ers the city council not only to i(pose a license fee but also to levy a ta' for purposes of revenue, (ore on %hen in a(ending section !778;b<, the phrase :as provided by la%: has been re(oved by section ! of /epublic 6ct No. 8!". he city council of Baguio therefore, has no% the po%er to ta', to license and to regulate provided that the sub&ects affected be one of those included in the charter, In this sense, the ordinance under consideration cannot be considered ultra vires %hether its purpose to be levy a ta' or i(pose a li cense fee. he ter(inology used as if no conse0uence. Co(ing no% to Ordinance No. #$$, %e find that its validity is assailed not only because of lack of po%er to enact i t but also because of lack of po%er to enact it but also because i t i(pose a specific ta' on so(e articles %hich, it is clai(ed, is not conte(plated by la%. =e have already stated that under its charter, as a(ended, the city of Baguio has no% the po%er not only to levy it also a specific ta' on ite(s or articles covered by the business of the ta'payer> 6fter an e'a(ination of section !778 of the revised 6d(inistrative Code, as a(ended by /epublic 6ct No. 8!", %e are inclined to uphold the negative vie%. It is settled that a (unicipal corporation, unlike a s overeign state, is clothed %ith no inherent po%er of ta'ation. he charter or statue (ust plainly sho% an intent to confer that po%er or the (unicipality cannot assu(e it. 6nd the po%er %hen granted i s to be construed strictissimi juris. 6ny doubt or a(biguity arising out of the ter( used in granting that po%er (ust be resolved against the (unicipality. Inferences, i(plications, deductions ? all these ? have no place in the interpretation of the ta'ing po%er of a (unicipal corporation ;oseph Icard vs. City Council of Baguio and the City of Baguio, 58 Phil., 59$<. 6n e'a(ination of section !778 ;c<, of the revised 6d(inistrative Code, as a(ended, %ill reveal that the po%er given to the city of Baguio to ta', to license and to regulate only refers to the business of the ta'payer and not to the articles used in said business. his is clearly inferred fro( a reading of said section and fro( the concluding sentence appearing therein, to %it, :and such other businesses, trade and occupations as (ay be established or practised in the city:. One reason for this undoubtedly is the fact that under section #4! of the Internal /evenue Code ;Co((on%ealth 6ct No. 4, as a(ended by /epublic 6ct No. 8"<, (ost of the products (entioned in the charter, particularly gasoline and oil, are already specifically ta'ed, and under section 8# of said code, the city of Baguio gets a share of !$ per c ent of the a(ount of specific ta' collected. 6t any rate, the charter of the city of Baguio does not sho% plainly an intent to confer that po%er upon the city of Baguio and, follo%ing the rule already adverted to, this doubt or a(biguity (ust be resolved against the city. 6n indication of the legislative intent on this (atter i s Co((on%ealth 6ct No. 49! %hich confers general authority upon (unicipal councils to levy ta'es, sub&ects to certain li(itations, %herein it %as specificall y provided that the general authority so conferred shall not include :percentage ta'es and ta'es on specified articles:. In other %ords, the po%er to levy a percentage ta' or a specific ta' has been e'pressly %ithheld. It is, therefore, our considered opinion that Ordinance No. #$$ is ultra vires and has no force and effect. =ith respect to Ordinance No. !, the lo%er court declared it null and void and fro( this part of the decision no appeal has been taken. hat finding should be l eft undisturbed. 6s to %hether appellants can collect the additional a(ounts they charged the public under the ordinance, the lo%er court said@ :he a(ount collected fro( the theater goers as additional price of ad(ission tickets is not the property of plaintiffs or any of the(. It is paid by the public. If anybody has the right to clai( it, it is those %ho paid it. Only o%ners of property has the right to clai( s aid property. he cine o%ners acted as (ere against agent of the city in c ollecting the additional price charged in the sale of ad(ission ticke ts.: Conse0uently, the court denied the clai( of appellants for rei(burse(ent. =e find no error in this respect. =herefore, the decision appealed fro( is hereby affir(ed, %ith the only (odification as to Ordinance No. #$$, %hich is hereby declared null and void. 2efendant is hereby ordered to return to the Benguet 1
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