FERNANDO LACSON AND SIMPLICIO A. PALANCA, PLAINTIFFS AND APPELLANTS, VS. BACOLOD CITY, TEOFISTO M. CORDOVA AS CITY MAYOR AND ALFREDO TAMBASEN AS CITY TREASURER OF THE CITY OF BA…

This is a suit instituted in Negros Occidental by theater owners of Bacolod
City to annul its ordinance imposing license fees and/or taxes on theaters, to
wit: (a) Ordinance No. 48, series of 1949 imposing an annual fee of P1,500.00;
and (b) Ordinance No. 185 as amended by Ordinance No. 191, series of 1957
imposing a tax of five centavos and ten centavos on each theater ticket.

Plaintiffs asserted both ordinances were ultra vires and void.

Cesar Fegarido and nineteen others, filed a complaint in intervention
alleging they were theater-goers who had paid the tax on admission tickets,
challenging the legality thereof, and asking for themselves and in behalf of
other theater-goers for the return of the amounts so collected.

The defendants, the city with its mayor and treasurer sustained the validity
of such ordinances; and the issues having been tried and heard, the court
rendered judgment,

(a) upholding Ordinance No. 48, series of 1949; (b) declaring Ordinances Nos.
185 and 191, series of 1957, ultra vires and invalid, and (c) dismissing
the complaint in intervention.

The plaintiffs appealed. The intervenors also appealed; but their appeal was
dismissed in this Tribunal for failure to submit their brief on time. The
defendants also appealed.

Plaintiffb-appellants claim that Ordinance No. 48, series of 1949 is invalid.
On the other hand, the defendantsappellants insist in the validity of Ordinances
Nos. 185 and 191, series of 1957.

I.—It appears that under Sec. 1 of Ordinance No. 48, an annual fee of P30.00
is collected for every permit issued by the Mayor to every theater or
cinematograph. However, under section 6 o.f the same Ordinance, theaters and
cinematographs are required to pay a fixed annual fee of P1,500.00 “for the
exercise, conduct, establishment and operation of the business of a theater,
cinematograph,” etc. The second fee is a duplication and is unauthorized, argue
the theater-owners. At this point, we may quote from the appealed decision,
which correctly states the issues and the solution thereof:

“Admitting that the annual permit fee of P30.00 imposed in article 4 of
section 1 of Ordinance No. 48, series of 1949, is already for regulation and/or
police surveillance and therefore, valid, the plaintiffs maintain that the fixed
annual fee of P1,500.00 required by article 1 of section 6 of said Ordinance can
no longer be considered regulatory but is in fact for revenue purposes and
accordingly ultra vires, illegal and void. The Court cannot agree. As
correctly explained by the defendants, the fee of P30.00 is charged for the
issuance of a permit for the opening of theaters or cinemas; and before such
permit is granted by the Mayor pursuant to subsection (k) of section 10 of
Commonwealth Act No. 326, as amended, his office has to investigate and be
satisfied with the conditions of the theater or cinema concerned. Upon the other
hand, as well pointed out by the defendants, the fixed annual fee of P1,500.00
is for supervision of the cinema or theatrical business operated for as many
days as there are in a year. There is consequently no repugnance between the
annual permit fee of P30.00 (for opening) and the fixed annual fee of P1,500.00
(for continuous regulation and police surveillance).

For one thing, even if the two fees refer to the same objective and hence a
duplication, why do the plaintiffs not assail the legality of the annual permit
fee of P30.00 and choose to pay the fixed annual fee of P1,500.00? Bona-fide
existence of distinct purposes may be gathered from the circumstance that the
Ordinance in question did not impose a single permit or fixed annual fee of
P1,530.00 which could easily and validly have been done by the City Council if
its design was merely to increase collection.

The plaintiffs proceed tp argue that the fixed annual fee of P1,500.00 is in
any event excessive, unreasonable and arbitrary, because it is imposed
regardless of classification, * * *. In answer it would suffice to remark that
the matter of classification and of the amount reasonably needed for regulatory
purposes, is addressed to the judgment and discretion of a particular City
Council which cannot and should not be bound by the opinion of another City
Council. And then it must be remembered that the efforts which the authorities
are called upon to exert should be about equal or uniform for all classes of
theaters or cinemas. What is more, in the City of Iloilo cited by the
plaintiffs, an annual fee as high as P3,000.00 is provided
for.”

Nothing in appellant’s brief can impair the soundness of the above
considerations. With the trial judge, and for the same reasons, we uphold the
legality of the ordinance.

II.—In connection with the ordinance imposing a tax on each theater admission
ticket (P0.05 and P0.10), the trial court applied and followed two decisions of
this Court^[1] to the effect that such
exactions are in reality taxes that cannot be collected in the guise of
license fees, especially where other substantial license fees are already
imposed on theaters. It noted that the statute under which the exactions were
collected in our Rojas and Arong decisions were similar in nature to those under
which the City of Bacolod acted in imposing these taxes on theater tickets.

To evade the controlling effect of the two above named decisions, the City of
Bacolod urges here that the tax could be upheld as one adopted under the general
welfare clause, arguing that the tax was designed to cope with the problem of
insufficiency of school buildings, and school funds, the intention of the
council being to use the money so collected to further the education of the
youth in the city of Bacolod. This same contention was presented in the court
below, and the Hon. Jose de la Cruz, aptly overruled it in the following words
and phrases:

“There can be no divergence of thought as to the wisdom and desirability of
any and all solicitude for education; literacy of the people is indeed one of
the primary concern of the Government; but the General Welfare Clause cannot be
resorted to as a source of the power to tax. Besides, it is provided that the
tax shall go exclusively to the General Fund (section 2, Ordinance No. 185).

The defendants intimate that going to the movies partakes of the nature of a
non-useful occupation subject to regulation, and that the amounts of P0.05 and
P0.10 collected under Ordinances Nos. 185 and 191 are regulatory fees imposed by
the defendant City under the General Welfare Clause of its Charter. This is
obviously wanting in plausibility. In the first place, the Ordinances expressly
call the payments of P0.05 and P0.10 as a “tax” on every admission ticket. In
the second place, while going to the movie may be looked upon as a luxurious (or
indispensable) form of recreation, it may hardly be considered as occupation, a
term implying business or profession.In the third place, the tax is levied
against every admission ticket, not strictly upon the cinema patron, although it
may be added by owners or operators of theaters to the admission price and!
charged to and paid by the movie goers.”

III.—The appealed judgment is affirmed. No costs.

Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L.,
Paredes, and Dizon, JJ., concur.

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[1] Zosimo Rojas & Bros. vs. City of Cavite,
L-10730, May 26, 1958; Arong et. al. vs. Raffiñan, 98 Phil., 422. See Icard vs.
City Council of Baguio, 83 Phil. 870.