G.R. No. L-4817. May 26, 1954

This suit was commenced in the Court of First Instance of Manila by
two lawyers, a medical practitioner, a public accountant, a dental
surgeon and a pharmacist, purportedly “in their own behalf and in
behalf of other professionals practicing in the City of Manila who may
desire to join it.” Object of the suit is the annulment of Ordinance
No. 3398 of the City of Manila together with the provision of the
Manila charter authorizing it and the refund of taxes collected under
the ordinance but paid under protest.

The ordinance in question, which was approved by the municipal board
of the City of Manila on July 25, 1950, imposes a municipal occupation
tax on persons exercising various professions in the city and penalizes
non-payment of the tax “by a fine of not more than two hundred pesos or
by imprisonment of not more than six months, or by both such fine and
imprisonment in the discretion of the court.” Among the professions
taxed were those to which plaintiffs belong. The ordinance was enacted
pursuant to paragraph (1) of section 18 of the Revised Charter of the
City of Manila (as amended by Republic Act No. 409), which empowers the
Municipal Board of said city to impose a municipal occupation tax, not
to exceed P50 per annum, on persons engaged in the various professions above referred to.

Having already paid their occupation tax under section 201 of the
National Internal Revenue Code, plaintiffs, upon being required to pay
the additional tax prescribed in the ordinance, paid the same under
protest and then brought the present suit for the purpose already
stated. The lower court upheld the validity of the provision of law
authorizing the enactment of the ordinance but declared the ordinance
itself illegal and void on the ground that the penalty therein provided
for non-payment of the tax was not legally authorized. From this
decision both parties appealed to this Court, and the only question
they have presented for our determination is whether this ruling is
correct or not, for though the decision is silent on the refund of
taxes paid plaintiffs make no assignment of error on this point.

To begin with defendants’ appeal, we find that the lower court was
in error in saying that the imposition of the penalty provided for in
the ordinance was without the authority of law. The last paragraph (kk)
of the very section that authorizes the enactment of this tax ordinance
(section 18 of the Manila Charter) in express terms also empowers the
Municipal Board “to fix penalties for the violation of ordinances
which shall not exceed to (sic) two hundred pesos fine or six months’
imprisonment, or both such fine and imprisonment, for a single offense”
Hence, the pronouncement below that the ordinance in question is
illegal and void because it imposes a penalty not authorized by law is
clearly without basis.

As to plaintiffs’ appeal, the contention in substance is that this
ordinance and the law authorizing it constitute class legislation, are
unjust and oppressive, and authorize what amounts to double taxation.

In raising the hue and cry of “class legislation”, the burden of
plaintiffs’ complaint is not that the professions to which they
respectively belong have been singled out for the imposition of this
municipal occupation tax; and in any event, the Legislature may, in its
discretion, select what occupations shall be taxed, and in the exercise
of that discretion it may tax all, or it may select for taxation
certain classes and leave the others untaxed. (Cooley on Taxation, Vol.
4, 4th ed., pp. 3393-3395.) Plaintiffs’ complaint is that while the law
has authorized the City of Manila to impose the said tax, it has
withheld that authority from other chartered cities, not to mention
municipalities. We do not think it is for the courts to judge what
particular cities or municipalities should be empowered to impose
occupation taxes in addition to those imposed by the National
Government. That matter is peculiarly within the domain of the
political departments and the courts would do well not to encroach upon
it. Moreover, as the seat of the National Government and with a
population and volume of trade many times that of any other Philippine
city or municipality, Manila, no doubt, offers a more lucrative field
for the practice of the professions, so that it is but fair that the
professionals in Manila be made to pay a higher occupation tax than
their brethren in the provinces.

Plaintiffs brand the ordinance unjust and oppressive because they
say that it creates discrimination within a class in that while
professionals with offices in Manila have to pay the tax, outsiders who
have no offices in the city but practice their profession therein are
not subject to the tax. Plaintiffs make a distinction that is not found
in the ordinance. The ordinance imposes the tax upon every person
“exercising” or “pursuing”—in the City of Manila naturally—any one of
the occupations named, but does not say that such person must have his
office in Manila. What constitutes exercise or pursuit of a profession
in the city is a matter of judicial determination.

The argument against double taxation may not be invoked where one
tax is imposed by the state and the other is imposed by the city (1
Cooley on Taxation, 4th ed., p. 492), it being widely recognized that
there is nothing inherently obnoxious in the requirement that license
fees or taxes be exacted with respect to the same occupation, calling
or activity by both the state and the political subdivisions thereof.
(51 Am. Jur., 341.)

In view of the foregoing, the judgment appealed from is reversed in
so far as it declares Ordinance No. 3398 of the City of Manila illegal
and void and affirmed in so far as it holds the validity of the
provision of the Manila charter authorizing it. With costs against
plaintiffs-appellants.

Pablo, Bengzon, Montemayor, Jugo, Bautista Angelo, Labrador, and Concepcion, JJ., concur.

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DISSENTING

PARAS, C. J.:

I am constrained to dissent from the decision of the majority upon
the ground that the Municipal Board of Manila cannot outlaw what
Congress of the Philippines has already authorized. The
plaintiffs-appellants—two lawyers, a physician, an accountant, a
dentist and a pharmacist—had already paid the occupation tax under
section 201 of the National Internal Revenue Code and are there- by
duly licensed to practice their respective professions throughout the
Philippines; and yet they had been required to pay another occupation
tax under Ordinance No. 3398 for practising in the City ,of Manila.
This is a glaring example of contradiction—the license granted by the
National Government is in effect withdrawn by the City in case of
non-payment of the tax under the ordinance. If it be argued that the
national occupation tax is collected to allow the professional residing
in Manila to pursue his calling in other places in the Philippines, it
should then be exacted only from professionals practising
simultaneously in and outside of Manila. At any rate, we are confronted
with the following situation: Whereas the professionals elsewhere pay
only one occupation tax, in the City of Manila they have to pay two,
although all are on equal footing insofar as opportunities for earning
money out of their pursuits are concerned. The statement that practice
in Manila is more lucrative than in the provinces, may be true perhaps
with reference only to a limited few, but certainly not to the general
mass of practitioners in any field. Again, provincial residents who
have occasional or isolated practice in Manila may have to pay the city
tax. This obvious discrimination or lack of uniformity cannot be
brushed aside or justified by any trite pronouncement that double
taxation is legitimate or that legislation may validly affect certain
classes.

My position is that a professional who has paid the occupation tax
under the National Internal Revenue Code should be allowed to practice
in Manila even without paying the similar tax imposed by Ordinance No.
3398. The City cannot give what said professional already has. I would
not say that this Ordinance, enacted by the Municipal Board pursuant to
paragraph 1 of section 18 of the Revised Charter of Manila, as amended
by Republic Act No. 409, empowering the Board to impose a municipal
occupation tax not to exceed P50 per annum, is invalid; but that only
one tax, either under the Internal Revenue Code or under Ordinance No.
3398, should be imposed upon a practitioner in Manila.