SOUTHEAST ASIA MANUFACTURING CORPORATION, PETITIONER, VS. THE MUNICIPAL COUNCIL OF TAGBILARAN, BOHOL; VENANCIO P. INTING, MAYOR OF THE MUNICIPALITY OF TAGBILARAN, BOHOL, AND ART…

On pure questions of law, this appeal by respondents is before
us, seeking a reversal of the judgment rendered on December 14, 1963 by the
Court of First Instance of Bohol in
Civil Case No. 1548 for Declaratory Relief, which, sustaining the view of
petitioner corporation, declared null and void and illegal sub-sections (c) and
(d), Section 21, Article 49 of Municipal Ordinance No. 29, Series of 1962,
enacted by the Municipal Council of Tagbilaran, Bohol.

The pertinent portions of
that Ordinance, as amended, are reproduced hereunder:

ORDINANCE NO. 29

Series 1962

AN ORDINANCE AMENDING THE
TAGBILARAN

ORDINANCE CODE OF 1962

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ARTICLE 49 – Business

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Section 21: – Copra, Maguey and abaca:

Permit                License                       Fees

Fees                   Quarterly Yearly

(a) Dealer of ………………………. P20.00                P25.00 P100.00

(b) Exporter of …………………….. P20.00               P100.00 P400.00

(c) Storage of Copra for export ….. P 0.60
per metric ton

(d) Storage for domestic trade ……P 1.00 per
25 cubic meters of warehouse capacity
per month

xxx                xxx                   xxx

xxx                xxx                   xxx

Section 60 – Storage fees on copra for direct export shall be due
and payable to the Municipal Treasurer not later than ten (10) days after the discharge
of the product from the warehouse. All
other fees on copra shall be due and payable within the first ten (10) days of
the succeeding month.

xxx                xxx                   xxx

xxx                xxx                   xxx

For failure to pay as herein provided, there shall be collected a
surcharge of 20% of the amount in addition to the tax due to be compounded at the same rate every calendar
month and imprisonment of from two (2) to ten (10) days shall be imposed in the
discretion of the Court.

The controversy centers principally on sub-sections (c) and (d)
providing for storage fees for copra. Petitioner-appellee maintains that under section 2(i) of Republic Act
No. 2264, or the Local Autonomy Act, respondent Municipality has no power to
collect said taxes, and even if it does, the fees imposed are unduly oppres­sive,
unjust, and excessive and, therefore, the aforestated sub-sections should be
declared illegal. In its Amended
Petition, petitioner further prayed:

“x x x x x

2.   For the issuance of prohibitory injunction to
suspend the further collection of the tax imposed by the said ordinances;

3.   For
the recovery of the amount paid under protest, the amount being paid
only after the filing of the original petition.”^[1]

For their part, respondents-appellants contend that section 2 of
the Local Autonomy Act explicitly vests on municipalities the power “to
levy for public purposes just and uniform taxes, licenses or fees;” that
the prohibition in sub-paragraph (i) of Section 2 of the Local Autonomy Act
refers only to customs dues, regis­tration fees on wharfage owned by the
national govern­ment, tonnage, and all other kinds of customs fees; that the
storage fees mentioned in the Ordinance are merely license fees imposed by the
Municipal Council of Tagbilaran, Bohol,
in the exercise of its regulative authority; that the amended Ordinance has
been approved by the Provincial Board and the Secretary of Finance; and that
the petition states no cause of action for its failure to allege that said
storage fees on copra are being collected for the purpose of raising
revenues. In the petitory portion of
their Answer, respondents prayed for the dismissal of the Petition.^[2]

The case having been submitted on the basis of pleadings and
documentary evidence and no question of fact being involved, the trial Court,
on December 14, 1963, promulgated its Decision “declaring null and void
and illegal sub-sections (c) and (d), section 21, Article 49 of Ordinance No.
29 (Exhibit “X”)”, on the theory that under section 2 of the Local Autonomy Act, municipalities and municipal
districts are not authorized to impose the storage fees sought to be collected
by the aforestated sub-sections as they partake of the nature of
“percentage taxes and taxes on specific articles”.

Hence, this recourse by
respondents-appellants.

It bears emphasizing at this juncture that this action is one for
declaratory relief. The records do not
disclose that petitioner is being held liable for any particular amount. What petitioner seeks in its Amended
Petition, aside from the declaration of the nullity of the challenged
Ordinance, is the recovery of the amount it paid under protest after the filing
of the original Petition. However,
there is no spe­cific allegation of the sum involved nor any evidence of said
amount. Besides, the main action here
is one for declaratory relief and not for recovery of the tax paid, which
matter could be threshed out in an ordinary suit.^[3]

Section 2(i) of the Local Autonomy Act, the prevailing law at the
time of this controversy, provides:

“Sec. 2. Taxation. – Any provision of law
to the contrary notwithstanding, all chartered cities, municipalities and
municipal districts shall have authority to impose municipal license taxes or
fees upon persons engaged in any occupation or business, or exercising
privileges in chartered cities, municipalities or muni­cipal districts by
requiring them to secure licenses at rates fixed by the municipal board or city
council of the city, the municipal council of the muni­cipality, or the
municipal district council of the municipal district; to collect fees and
charges for services rendered by the city, municipality or municipal district;
to regulate and impose reasonable fees for services rendered in connection with
any business, profession or occupation being conducted within the city, municipality
or municipal district and otherwise to levy for public purposes, just and
uniform taxes, licenses or fees: Provided, That municipalities and municipal districts shall, in no case,
impose any percentage tax on sales or other taxes in any form based thereon nor impose taxes on articles subject to
specific tax, except gasoline, under the provisions of the National Internal
Revenue Code; Provided, however, That no city, municipality or
municipal district may levy or impose any of the following:

x x x x x x x x

(i)  Customs duties registration, wharfage on
wharves owned by the national government, tonnage, and all other kinds of
customs fees, charges and dues;

x x x x x”

It is unfortunate that this case has pended before this Court
since 1965 when it was deemed submitted for decision. As it is, “much water has passed under the bridge” with
conditions having undergone drastic change, and laws superseded by other more
recent ones.

The Local Autonomy Act (supra), which was approved on June 19,
1959, and which was the statute governing the case at bar at its incipience,
has been superseded by the Local Tax Code^[4] in so
far as the taxing power of provinces, cities, and municipalities are
concerned. Furthermore, by the express
language of section 64-A of the Local Tax Code^[5]
“all existing tax ordi­nances of provinces, cities, municipalities and
barrios shall be deemed ipso facto nullified on June 30,
1974″. Plainly, the issue elevated
in this appeal has become moot and academic. And where the issues have become moot and academic, there is no
justiciable controversy, so that a declaration on the validity or invalidity of
the Ordinance would be of no practical use or value.^[6] The
case below having been instituted for a declaratory judgment, and even on the
basis of the pleadings them­selves, there is no actual substantial relief to
which petitioner-appellee would be entitled and which would be negated by the
dismissal of this case.

WHEREFORE, the appealed
judgment is hereby set aside, and
the action for declaratory relief hereby dismissed.

SO ORDERED.

Teehankee, (Chairman), Makasiar, Fernandez, Guerrero, and De Castro, JJ., concur.

^[1]
p. 12, Record on Appeal.

^[2]
pp. 17-20, ibid.

^[3]
Shell Company of the Philippines, Ltd. vs. Municipality of Sipocot,
L-12680, March 20, 1959.

^[4]
P.D. No. 231, as amended by P.D. No. 426.

^[5]
Added by section 23 of P.D. No. 426.

^[6]
Sarmiento vs. Capapas, 4 SCRA 816, 822 (1962).