G.R. No. L-26521. December 28, 1968
EUSEBIO VILLANUEVA, ET AL., PLAINTIFFS-APPELIEES, VS. CITY OF ILOILO, DEFENDANT-APPELLANT.
CASTRO, J.:
Appeal by the defendant City of Iloilo from the decision of the
Court of First Instance of Iloilo, declaring illegal Ordinance 11, series of
1960, entitled, “An Ordinance Imposing Municipal License Tax On Persons
Engaged In The Business Of Operating Tenement Houses,” and ordering the
City to refund to the plaintiffs-appellees the sums
of money collected from them under the said ordinance.
On September 30, 1946 the municipal board of Iloilo City enacted
Ordinance 86, imposing license tax fees as follows: (1) tenement house (casa de vecindad), P25.00 annually; (2) tenement house, partly or
wholly engaged in or dedicated to business in the streets of J.M. Basa, Isnart and Aldeguer, P24.00 per apartment; (3) tenement house, partly
or wholly engaged in business in any other streets, P12.00 per apartment. The validity and constitutionality of this
ordinance were challenged by the spouses Eusebio
Villanueva and Remedios Sian
Villanueva, owners of four tenement houses containing 34 apartments. This Court, in City of Iloilo vs. Remedios Sian Villanueva and Eusebio
Villanueva, L-12695, March 23,
1959, declared the ordinance ultra vires,
“it not appearing that the power to tax owners of tenement houses is one
among those clearly and expressly granted to the City of Iloilo
by its Charter.”
On January 15, 1960 the municipal board of Iloilo City,
believing, obviously, that with the passage of Republic Act 2264, otherwise
known as the Local Autonomy Act, it had acquired the authority or power to
enact an ordinance similar to that previously declared by this Court as ultra
vires, enacted Ordinance 11 (eleven), series
of 1960, hereunder quoted in full:
“AN ORDINANCE IMPOSING MUNICIPAL LICENSE TAX ON PERSONS
ENGAGED IN THE BUSINESS OF OPERATING TENEMENT HOUSES
“Be it ordained by the Municipal Board of the City of Iloilo,
pursuant to the provisions of Republic Act No. 2264, otherwise known as the
Autonomy Law of Local Government, that:
“Section 1. –
A municipal license tax is hereby imposed on tenement houses in accordance with
the schedule of payment herein provided.
“Section 2. –
Tenement house as contemplated in this ordinance shall mean any building or
dwelling for renting space divided into separate apartments or accessorias.
“Section 3. – The municipal license tax provided in Section 1
hereof shall be as follows:
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I. Tenement houses: |
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(a) strong materials . . . . . . . . . . . |
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“Section 4. – All
ordinances or parts there of inconsistent herewith are hereby amended.
“Section 5. – Any person found violating this ordinance shall
be punished with a fine not exceeding Two Hundred Pesos (P200.00) or an
imprisonment of not more than six (6) months or both at the discretion of the
Court.
“Section 6. – This ordinance shall take effect upon approval.
“ENACTED, January 15,
1960.”
In Iloilo City,
the appellees Eusebio
Villanueva and Remedios S. Villanueva are owners of
five tenement houses, aggregately containing 43 apartments, while the other appellees and the same Remedios
S. Villanueva are owners of ten apartments.
Each of the appellees‘ apartments has a door
leading to a street and is rented by either a Filipino or Chinese
merchant. The first floor is utilized as
a store, while the second floor is used as a dwelling of the owner of the
store. Eusebio
Villanueva owns, likewise, apartment buildings for rent in Bacolod, Dumaguete City,
Baguio City
and Quezon City,
which cities, according to him, do not impose tenement or apartment taxes.
By virtue of the ordinance in question, the appellant City
collected from spouses Eusebio Villanueva and Remedios S. Villanueva, for the years 1960-1964, the sum of
P5,824.30, and from the appellees Pio
Sian Melliza, Teresita S. Topacio, and Remedios S. Villanueva, for the years 1960-1964, the sum
of P1,317.00. Eusebio
Villanueva has likewise been paying real estate taxes on his property.
On July 11, 1962 and April 24, 1964, the plaintiffs-appellees filed a complaint, and an amended complaint,
respectively, against the City of Iloilo, in the aforementioned court, praying
that Ordinance 11, series of 1960, be declared “invalid for being beyond
the powers of the Municipal Council of the City of Iloilo to enact, and
unconstitutional for being violative of the rule as
to uniformity of taxation and for depriving said plaintiffs of the equal
protection clause of the Constitution,” and that the City be ordered to
refund the amounts collected from them under the said ordinance.
On March 30, 1966,[1]
the lower court rendered judgment declaring the ordinance illegal on the
grounds that (a) “Republic Act 2264 does not empower cities to impose
apartment taxes,” (b) the same is “oppressive and unreasonable,”
for the reason that it penalizes owners of tenement houses who fail to pay the
tax, (c) it constitutes “not only double taxation, but treble at
that,” and (d) it violates the rule of uniformity of taxation.
The issues posed in this appeal are:
1.
Is Ordinance 11, series of 1960,
of the City of Iloilo,
illegal because it imposes double taxation?
2.
Is the City of Iloilo
empowered by the Local Autonomy Act to impose tenement taxes?
3.
Is Ordinance 11, series of 1960,
oppressive and unreasonable because it carries a penal clause?
4.
Does Ordinance 11, series of 1960,
violate the rule of uniformity of taxation?
1. The pertinent provisions
of the Local Autonomy Act are hereunder quoted:
“Sec. 2. – 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:
“(a) Residence tax;
“(b) Documentary stamp tax;
“(c) Taxes on the business of persons engaged in the printing
and publication of any newspaper, magazine, review or bulletin appearing at
regular intervals and having fixed prices for subscription and sale, and which
is not published primarily for the purpose of publishing advertisements;
“(d) Taxes on persons operating waterworks, irrigation and
other public utilities except electric light, heat and power;
“(e) Taxes on forest products and forest concessions;
“(f) Taxes on
estates, inheritance, gifts, legacies, and other acquisitions mortis causa;
“(g) Taxes on
income of any kind whatsoever;
“(h) Taxes or fees for the registration of motor vehicles and
for the issuance of all kinds of licenses or permits for the driving thereof;
“(i) Customs duties registration, wharfage dues on wharves owned by the national government,
tonnage, and all other kinds of customs fees, charges and duties;
“(j) Taxes of any kind on banks, insurance companies, and
persons paying franchise tax; and
“(k) Taxes on premiums paid by owners of property who obtain
insurance directly with foreign insurance companies.
“A tax ordinance shall go into effect on the fifteenth day
after its passage, unless the ordinance shall provide otherwise: Provided, however, That the
Secretary of Finance shall have authority to suspend the effectivity
of any ordinance within one hundred and twenty days after its passage, if, in
his opinion, the tax or fee therein levied or imposed is unjust, excessive,
oppressive, or confiscatory, and when the said Secretary exercises this
authority the effectivity of such ordinance shall be
suspended.
“In such event, the municipal board or city council in the
case of cities and the municipal council or municipal district council in the
case of municipalities or municipal districts may appeal the decision of the
Secretary of Finance to the court during the pendency
of which case the tax levied shall be considered as paid under protest.”
It is now settled that the aforequoted
provisions of Republic Act 2264 confer on local governments broad taxing
authority which extends to almost “everything, excepting those which are
mentioned therein,” provided that the tax so levied is “for public
purposes, just and uniform,” and does not transgress any constitutional
provision or is not repugnant to a controlling statute.[2]
Thus, when a tax levied under the authority of a city or municipal ordinance,
is not within the exceptions and limitations aforementioned, the same comes
within the ambit of the general rule, pursuant to the rules of expressio unius est exclusio alterius, and exceptio
firmat regulum
in casibus non excepti.
Does the tax imposed by the ordinance in question fall within any
of the exceptions provided for in section 2 of the Local Autonomy Act? For this purpose, it is necessary to
determine the true nature of the tax.
The appellees strongly maintain that it is a
“property tax” or “real estate tax,”[3]
and not a “tax on persons engaged in any occupation or business or
privileges,” or a license tax, or a privilege tax, or an excise tax.[4]
Indeed, the title of the ordinance designates it as a “municipal license
tax on persons engaged in the business of operating tenement
houses,” while section 1 thereof states that a “municipal license
tax is hereby imposed on tenement houses.” It is the
phraseology of section 1 on which the appellees base
their contention that the tax involved is a real estate tax which, according to
them, makes the ordinance ultra vires
as it imposes a levy “in
excess of the one percentum real estate tax allowable
under Sec. 38 of the Iloilo City Charter, Com. Act 158.”[5]
It is our view, contrary to the appellees‘
contention, that the tax in question is not a real estate tax. Obviously, the appellees
confuse the tax with the real estate tax within the meaning of the Assessment
Law,[6]
which, although not applicable to the City of Iloilo,
has counterpart provisions in the Iloilo City Charter.[7] A
real estate tax is a direct tax on the ownership of lands and buildings or
other improvements thereon, not specially exempted,[8]
and is payable regardless of whether the property is used or not, although the
value may vary in accordance with such factor.[9]
The tax is usually single or indivisible, although the land and building or
improvements erected thereon are assessed separately, except when the land and
building or improvements belong to separate owners.[10]
It is a fixed proportion[11]
of the assessed value of the property taxed, and requires, therefore, the
intervention of assessors.[12]
It is collected or payable at appointed times,[13]
and it constitutes a superior lien on and is enforceable against the property[14]
subject to such taxation, and not by imprisonment of the owner.
The tax imposed by the ordinance in question does not possess the
aforestated attributes. It is not a tax on the land on which the
tenement houses are erected, although both land and tenement houses may belong
to the same owner. The tax is not a
fixed proportion of the assessed value of the tenement houses, and does not
require the intervention of assessors or appraisers. It is not payable at a designated time or
date, and is not enforceable against the tenement houses either by sale or distraint. Clearly,
therefore, the tax in question is not a real estate tax.
“The spirit, rather than the letter, of an ordinance determines
the construction thereof, and the court looks less to its words and more to the
context, subject-matter, consequence and effect. Accordingly, what is within the spirit is
within the ordinance although it is not within the letter thereof, while that
which is in the letter, although not within the spirit, is not within the
ordinance.”[15]
It is within neither the letter nor the spirit of the ordinance that an
additional real estate tax is being imposed, otherwise the subject-matter would
have been not merely tenement houses.
On the contrary, it is plain from the context of the ordinance that the
intention is to impose a license tax on the operation of tenement houses, which
is a form of business or calling. The
ordinance, in both its title and body, particularly sections 1 and 3 thereof, designates
the tax imposed as a “municipal license tax” which, by itself, means
an “imposition or exaction on the right to use or dispose of property, to
pursue a business, occupation, or calling, or to exercise a privilege.”[16]
“The character of a tax is not to be fixed by any isolated
words that may be employed in the statute creating it, but such words must be
taken in the connection in which they are used, and the true character is to be
deduced from the nature and essence of the subject.”[17]
The subject-matter of the ordinance is tenement houses whose nature and essence
are expressly set forth in section 2 which defines a tenement house as
“any building or dwelling for renting space divided into separate
apartments or accessorias.” The Supreme Court,
in City of Iloilo vs. Remedios Sian
Villanueva, et al., L-12695, March 23, 1959, adopted the definition of a
tenement house[18]
as “any house or building, or portion thereof, which is rented, leased,
or hired out to be occupied, or is occupied, as the home
or residence of three families or more living independently of each other and
doing their cooking in the premises, or by more than two families upon any
floor, so living and cooking, but having a common right in the halls,
stairways, yards, water-closets, or privies, or some of them.” Tenement
houses, being necessarily offered for rent or lease by their very nature and
essence, therefore constitute a distinct form of business or calling,
similar to the hotel or motel business, or the operation of lodging houses or boarding
houses. This is precisely one of the
reasons why this Court, in the said case of City of Iloilo vs. Remedios Sian Villanueva, et al.,
supra, declared Ordinance 86 ultra vires,
because, although the municipal board of Iloilo City is empowered, under sec.
21, par. j, of its Charter, “to tax, fix the license fee for, and regulate
hotels, restaurants, refreshment parlors, cafes, lodging houses, boarding
houses, livery garages, public warehouses, pawnshops, theaters,
cinematographs,” tenement houses, which constitute a different
business enterprise,[19]
are not mentioned in the aforestated section of the
City Charter of Iloilo. Thus, in the
aforesaid case, this Court explicitly said:
“And it not appearing that the power to tax owner’s of
tenement houses is one among those clearly and expressly granted to the
City of Iloilo by its Charter, the
exercise of such power cannot be assumed and hence the ordinance in question is
ultra vires insofar as it taxes a tenement
house such as those belonging to defendants.”
The lower court has interchangeably denominated the tax in
question as a tenement tax or an apartment tax.
Called by either name, it is not among the exceptions listed in section
2 of the Local Autonomy Act. On the
other hand, the imposition by the ordinance of a license tax on persons
engaged in the business of operating tenement houses finds authority in
section 2 of the Local Autonomy Act which provides that chartered cities have
the authority to impose municipal license taxes or fees upon persons engaged
in any occupation or business, or exercising privileges within their respective
territories, and “otherwise to levy for public purposes, just and uniform
taxes, licenses, or fees.”
2. The trial court condemned the ordinance as constituting “not
only double taxation but treble at that,” because “buildings pay real
estate taxes and also income taxes as provided for in Sec. 182(A)(3)(s) of the
National Internal Revenue Code, besides the tenement tax under the said
ordinance.” Obviously, what the trial court refers to as “income
taxes” are the fixed taxes on business and occupation provided for in
section 182, Title V, of the National Internal Revenue Code, by virtue of
which persons engaged in “leasing or renting property, whether on their
account as principals or as owners of rental property or properties,” are
considered “real estate dealers” and are taxed according to the
amount of their annual income.”[20]
While it is true that the plaintiffs-appellees
are taxable under the aforesaid provisions of the National Internal Revenue
Code as real estate dealers, and still taxable under the ordinance in question,
the argument against double taxation may not be invoked. The same tax may be imposed by the national
government as well as by the local government.
There is nothing inherently obnoxious in the exaction of license fees or
taxes with respect to the same occupation, calling or activity by both the
State and a political subdivision thereof.[21]
The contention that the plaintiffs-appellees
are doubly taxed because they are paying the real estate taxes and the tenement
tax imposed by the ordinance in question, is also devoid of merit. It is a well-settled rule that a license tax
may be levied upon a business or occupation although the land or property used
in connection therewith is subject to property tax. The State may collect an ad valorem tax on property used in a calling, and at
the same time impose a license tax on that calling, the imposition of the
latter kind of tax being in no sense a double tax.[22]
“In order to constitute double taxation in the objectionable
or prohibited sense the same property must be taxed twice when it should be
taxed but once; both taxes must be imposed on the same property or
subject-matter, for the same purpose, by the same State, Government, or taxing
authority, within the same jurisdiction or taxing district, during the same
taxing period, and they must be the same kind or character of tax.”[23]
It has been shown that a real estate tax and the tenement tax imposed by the
ordinance, although imposed by the same taxing authority, are not of the same
kind or character.
At all events, there is no constitutional prohibition against
double taxation in the Philippines.[24]
It is something not favored, but is permissible, provided some other
constitutional requirement is not thereby violated, such as the requirement
that taxes must be uniform.[25]
3. The appellant City takes exception to the conclusion of the
lower court that the ordinance is not only oppressive because it “carries
a penal clause of a fine of P200.00 or imprisonment of 6 months or both, if the
owner or owners of the tenement buildings divided into apartments do not pay
the tenement or apartment tax fixed in said ordinance,” but also
unconstitutional as it subjects the owners of tenement houses to criminal
prosecution for “non-payment of an obligation which is purely sum of
money.” The lower court apparently had in mind, when it made the above
ruling, the provision of the Constitution that “no person shall be
imprisoned for a debt or non-payment of a poll tax.”[26]
It is elementary, however, that “a tax is not a debt in the sense of an
obligation incurred by contract, express or implied, and therefore is not
within the meaning of constitutional or statutory provisions abolishing or prohibiting
imprisonment for debt, and a statute or ordinance which punishes the non-payment
thereof by fine or imprisonment is not in conflict with that prohibition.”[27]
Nor is the tax in question a poll tax, for the latter is a tax of a fixed
amount upon all persons, or upon all persons of a certain class, resident
within a specified territory, without regard to their property or the
occupations in which they may be engaged.[28]
Therefore, the tax in question is not oppressive in the manner the lower court
puts it. On the other hand, the charter
of Iloilo City[29]
empowers its municipal board to “fix penalties for violations of
ordinances, which shall not exceed a fine of two hundred pesos or six months’
imprisonment, or both such fine and imprisonment for each offense.” In Punsalan, et al. vs. Mun.
Board of Manila, supra, this Court overruled the pronouncement of
the lower court declaring illegal and void an ordinance imposing an occupation
tax on persons exercising various professions in the City of Manila
because it imposed a penalty of fine and imprisonment for its violation.[30]
4. The trial court brands the ordinance as violative
of the rule of uniformity of taxation.
“. . . . because while the owners of the other buildings only
pay real estate tax and income taxes the ordinance imposes aside from these
two taxes an apartment or tenement tax.
It should be noted that in the assessment of real estate tax all parts
of the building or buildings are included so that the corresponding real estate
tax could be properly imposed. If aside
from the real estate tax the owner or owners of the tenement buildings should
pay apartment taxes as required in the ordinance then it will violate the rule
of uniformity of taxation.”
Complementing the above ruling of the
lower court, the appellees argue that there is
“lack of uniformity” and “relative inequality,”
because “only the taxpayers of the City of Iloilo are singled out to pay
taxes on their tenement houses, while citizens of other cities, where their
councils do not enact a similar tax ordinance, are permitted to escape such
imposition.”
It is our view that both assertions are undeserving of extended
attention. This Court has already ruled
that tenement houses constitute a distinct class of property. It has likewise ruled that “taxes are
uniform and equal when imposed upon all property of the same class or character
within the taxing authority.”[31]
The fact, therefore, that the owners of other classes of buildings in the City
of Iloilo do not pay the taxes
imposed by the ordinance in question is no argument at all against uniformity
and equality of the tax imposition.
Neither is the rule of equality and uniformity violated by the fact
that tenement taxes are not imposed in other cities, for the same rule does not
require that taxes for the same purpose should be imposed in different
territorial subdivisions at the same time.[32]
So long as the burden of the tax falls equally and impartially on all owners
or operators of tenement houses similarly classified or situated, equality and
uniformity of taxation is accomplished.[33]
The plaintiffs-appellees, as owners of tenement
houses in the City of Iloilo, have
not shown that the tax burden is not equally or uniformly distributed among
them, to overthrow the presumption that tax statutes are intended to operate
uniformly and equally.[34]
5. The last important issue posed by the appellees
is that since the ordinance in the case at bar is a mere reproduction of
Ordinance 86 of the City of Iloilo which was declared by this Court in L-12695,
supra, as ultra vires, the
decision in that case should be accorded the effect of res
judicata in the present case or should
constitute estoppel by judgment. To dispose of this contention, it suffices
to say that there is no identity of subject-matter in that case and this case
because the subject-matter in L-12695 was an ordinance which dealt not only
with tenement houses but also warehouses, and the said ordinance was enacted
pursuant to the provisions of the City charter, while the ordinance in the case
at bar was enacted pursuant to the provisions of the Local Autonomy Act. There is likewise no identity of cause of
action in the two cases because the main issue in L-12695 was whether the City
of Iloilo had the power under its charter to impose the tax levied by Ordinance
86, while one of the issues in the present case is whether the City is
empowered to impose the tax levied by Ordinance 11, series of 1960, under the
Local Autonomy Act which took effect on June 19, 1959, and therefore was not
available for consideration in the decision in L-12695 which was promulgated
on March 23, 1959. Moreover, under the
provisions of section 2 of the Local Autonomy Act, local governments may now
tax any taxable subject-matter or object not included in the enumeration of
matters removed from the taxing power of local governments. Prior to the enactment of the Local Autonomy
Act the taxes that could be legally levied by local governments were only those
specifically authorized by law, and their power to tax was construed in
strictissimi juris.[35]
ACCORDINGLY, the judgment a quo is reversed,
and, the ordinance in question being valid, the complaint is hereby dismissed. No pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando, and
Capistrano, JJ., concur.
[1]
The record discloses that the delay caused in the lower court was due to the
loss of the original record while the same was in the possession of the late
Judge Perfecto Querubin. The record was later reconstituted under
Judge Ramon Blanco.
[2] Nin Bay Mining Co. vs. Mun.
of Roxas, Prov. of Palawan, L-20125, July
20, 1965, per Concepcion, J.:
“Neither
the plaintiff nor the lower court maintains that the subject matter of the
ordinance in question comes under any of the foregoing exceptions. Hence, under the rule – ‘expressio
unius est exclusio alterius‘, the ordinance
should be deemed to come within the purview of the general rule. Indeed, the sponsor of the bill, which upon
its passage became Republic Act No. 2264, explicitly informed the House of
Representatives when he urged the same to approve it, that, under its
provisions, local governments would be ‘able to do everything, excepting those
things which are mentioned therein.’ x x x.”
C.N. Hodges vs. The Mun.
Board of the City of Iloilo, et
al., L-18276, Jan. 12, 1967,
per Castro, J.:
“x x x, Heretofore, we have
announced the doctrine that the grant of the power to tax to chartered cities
under section 2 of the Local Autonomy Act is sufficiently plenary to cover
‘everything, excepting those which are mentioned therein,’ subject only to the
limitation that the tax so levied is for ‘public purposes, just and uniform’ (Nin Bay Mining Co. vs. Mun.
of Roxas, Prov. of Palawan, G.R. No. L-20125, July 20, 1965). There is no showing, and we do not believe it
is possible to show, that the tax levied, called by any name – percentage tax
or sales tax – comes under any of the specific exceptions listed in Section 2
of the Local Autonomy Act. Not being
excepted, it must be regarded as coming within the purview of the general
rule. As the maxim goes, ‘Exceptio firmat regulum in casibus
non excepti.’ Since its public purpose,
justness and uniformity of application are not disputed, the tax so levied must
be sustained as valid.” [Re:
ordinance imposing a tax on sale of real estate property situated in the
City of Iloilo, of ½% of 1% of the
contract price or consideration.] Ormoc Sugar Co.,
inc. vs. Mun. Board of Ormoc City,
et al., L-24322, July 21, 1967,
per Fernando, J.:
“In a
number of decisions starting from City of Bacolod vs. Gruet, L-18290, Jan.
31, 1963, to Hodges vs. Mun.
Board, L-18276, Jan. 12, 1967,
such broad taxing authority has been implemented and vitalized by this Court.
“x x x. The question before this Court is one of
power. From and after June 19, 1959, when the Local
Autonomy Act was enacted, the sphere of autonomy of a chartered city in the
enactment of taxing measures has been considerably enlarged.
“x x x. In the absence of a clear and specific showing
that there was a transgression of a constitutional provision or repugnancy to
a controlling statute, an objection of such a generalized character deserves
but scant sympathy from this Court.
Considering the indubitable policy expressly set forth in the Local
Autonomy Act, the invocation of such a talismanic formula as ‘restraint of
trade’ without more no longer suffices, assuming it ever did, to nullify a
taxing ordinance, otherwise valid.” [Re:
Ordinance imposing tax on all productions of centrifugal sugar (B-sugar)
locally sold or sold within the Phil., at P.20 per picul,
etc.]
[3]
“Taxes on property are taxes assessed on all property or on all property of
a certain class located within a certain territory on a specified date in
proportion to its value, or in accordance with some other reasonable method of
apportionment, the obligation to pay which is absolute and unavoidable and it
is not based upon any voluntary action of the person assessed. A property tax is ordinarily measured by the
amount of property owned by the taxpayer on a given day, and not on the total
amount owned by him during the year. It
is ordinarily assessed at stated periods determined in advance, and collected
at appointed times, and its payment is usually enforced by sale of the
property taxed, and, occasionally, by imprisonment of the person
assessed.” (51 Am. Jur. 57)
“A ‘real
estate tax’ is a tax in rem against
realty without personal liability therefore on part of owner thereof, and a
judgment recovered in proceedings for enforcement of real estate tax is one in
rem against the realty without personal
liability against the owner.” (36 Words and Phrases, 286, citing Land O’Lakes Dairy Co. vs. Wadena
County, 39 N.W. 2d. 164, 171, 229
Minn. 263)
[4]
“The term ‘license tax’ or ‘license fee’ implies an imposition or exaction
on the right to use or dispose of a property, to pursue a business, occupation,
or calling, or to exercise a privilege.” (33 Am. Jur.
325-326)
“The term
‘excise tax’ is synonymous with ‘privilege tax’, and the two are often used
interchangeably, and whether a tax is characterized in the statute imposing it
as a privilege tax or an excise tax is merely a choice of synonymous words, for
an excise tax is a privilege tax.” (51 Am. Jur.
62, citing Bank of Commerce & T. Co. vs. Senter,
149 Tenn. 569, 260 SW 144)
“Thus, it is
said that an excise tax is a charge imposed upon the performance of an act, the
enjoyment of a privilege, or the engaging in an occupation.” (51 Am. Jur. 61)
[5]
“Sec. 38. Annual tax and penalties. – Extension and remission of the tax.
– An annual tax of one per centum on the assessed value of all real estate in
the city subject to taxation shall be levied by the city treasurer. x x x“
[6]
Commonwealth Act No. 470 – Sec. 1. Title of this Act. This Act shall be known as the Assessment
Law.
“Sec. 2.
Incidence of real property tax. – Except in chartered cities, there
shall be levied, assessed, and collected an annual ad valorem
tax on real property, including land, buildings, machinery and other
improvements not hereinafter specially exempted.”
[7]
Com. Act 158, sections 28 to 53.
[8]
Com. Act 158, sec. 29.
[9]
51 Am. Jur. 53:
“An ad valorem property tax is invariably
based upon ownership of property, and is payable regardless of whether
the property is used or not, although of course the value may vary in
accordance with such factor.”
[10]
“Real estate, for purposes of taxation, includes all land within the
district by which the tax is levied, and all rights and interests in such land,
and all buildings and other structures affixed to the land, even though as
between the landlord and the tenant they are the property of the tenant and may
be removed by him at the termination of the lease.” (51 Am. Jur. 438) Sec. 31 of Com. Act 158 provides: “When it shall appear that there are
separate owners of the land and the improvements thereon, a separate assessment
of the property of each shall be made.”
[11]
Sec. 38 of Com. Act 158 provides:
“An annual tax of one per centum on the assessed value of all real
estate in the city subject to taxation shall be levied by the city
treasurer.”
[12] Secs. 28 to 34, Com. Act 158.
[13]
Sec. 38 of Com. Act 158 provides:
“All taxes on real estate for any year shall be due and payable on
the first day of January and from this date such taxes together with all
penalties accruing thereto shall constitute a lien on the property subject to
such taxation.”
[14]
Sec. 38 of Com. Act 158 provides:
“Such lien shall be superior to all other liens, mortgages or incumbrances of any kind whatsoever, and shall be
enforceable against the property whether in the possession of the delinquent or
any subsequent owner, and can only be removed by the payment of the tax and
penalty.”
[15]
62 C.J.S. 845; Manila Race Horse Trainers Assn. vs. De la Puente,
L-2947, Jan. 11, 1951, 88 Phil. 60.
[16]
51 Am. Jur. 59-60; 33 Am. Jur.
325-326.
[17]
51 Am. Jur. 56, citing Eyre v. Jacob, 14 Gratt (Va.)
422; 73 Am. Dec. 367.
[18]
Webster’s New International Dictionary, 2nd Ed., p. 2601.
[19]
City of Iloilo vs. Remedios Sian Villanueva, et al.,
L-12695, March 23, 1959: “As may be seen from the definition of
each establishment hereunder quoted, a tenement house is different from hotel,
lodging house, or boarding house. These
are different business enterprises. They
have been established for different purposes.”
[20]
National Internal Revenue Code:
“Sec.
182. Fixed taxes. – (A) On business x x x (3) Other fixed taxes. – The following fixed taxes shall
be collected as follows, the amount stated being for the whole year, when not
otherwise specified:
x x x
“(s)
Stockbrokers, dealers in securities, real estate brokers, real estate dealers,
commercial brokers, customs brokers, and immigration brokers, one hundred and
fifty pesos: Provided, however, That in
the case of real estate dealers, the annual fixed tax to be collected shall be
as follows:
“One
hundred and fifty pesos, if the annual income from buying, selling, exchanging,
leasing, or renting property (whether on their own account as
principals or as owners of rental property or properties) is four thousand
pesos or more but not exceeding ten thousand pesos;
“Three
hundred pesos, if such annual income exceeds ten thousand pesos but does not
exceed thirty thousand pesos; and
“Five
hundred pesos, if such annual income exceeds thirty thousand pesos.”
[21] Punsalan, et al. vs. Mun.
Board of the City of Manila, et al., L-4817, May 26, 1954, 95 Phil. 46, per
Reyes, J.: In this case, the Supreme
Court upheld the validity of Ordinance 3398 of the City of Manila, approved on
July 25, 1950, imposing a municipal occupation tax on persons exercising
various professions (lawyers, medical practitioners, public accountants,
dental surgeons, pharmacists, etc.), in the city and penalizes non-payment of
the tax by a fine of not more than P200.00 or by imprisonment of not more than
6 months, or by both such fine and imprisonment in the discretion of the court,
although section 201 [now sec. 182 (B)] of the National Internal Revenue Code
requires the payment of taxes on occupation or professional taxes. Said Justice Reyes: “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 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 subdivision thereof. (51 Am. Jur.
341.)”
A month after
the promulgation of the above decision, Congress passed Rep. Act 1166,
approved on June 18, 1954, providing as follows: “Any provisions of existing laws, city
charters and ordinances, executive orders and regulations, or parts
thereof, to the contrary notwithstanding, every professionals legally
authorized to practice his profession, who has paid the corresponding annual
privilege tax on profession s required by Sec. 182 of the NLRC, Com. Act No.
466, shall be entitled to practice the profession for which he has been duly
qualified under the law, in all parts of the Philippines without being subject
to any other tax, charge, license or fee for the practice of such
profession: Provided, however,
That they have paid to the office concerned the registration fees required in
their respective professions.”
[22]
People vs. Santiago Mendaros, et al., L-6975, May 27, 1955, 97 Phil. 958-959, per
Bautista Angelo, J. Appeal from the decision of the CFI of Zambales.
Defendants-appellees were convicted by the JP
Court of Palauig, Zambales,
and sentenced to pay a fine of P5.00, for failure to pay the occupation tax
imposed by a municipal ordinance on owners of fishponds on lands of private
ownership. The Supreme Court, in
sustaining the validity of the ordinance, held:
“The
ground on which the trial court declared the municipal ordinance invalid would
seem to be that, since the land on which the fishpond is situated is already
subject to land tax, it would be unfair and discriminatory to levy another tax
on the owner of the fishpond because that would amount to double taxation. This view is erroneous because it is a
well-settled rule that a license tax may be levied upon a business or
occupation although the land or property used therein is subject to property
tax. It was also held that ‘the state
may collect an ad valorem tax on
property used in a calling, and at the same time impose a license tax on the
pursuit of that calling.’ The imposition of this kind of tax is in no sense
called a double tax.”
Veronica Sanchez vs. The Collector of Internal
Revenue, L?7521, Oct. 18, 1955,
97 Phil. 687, per Reyes, J.B.L. J.
“Considering
that appellant constructed her four-door ‘accessoria‘
purposely for rent or profit; that she has been continuously leasing the same
to third persons since its construction in 1947; that she manages her property
herself; and that said leased holding appears to be her main source of
livelihood, she is engaged in the leasing of real estate, and is a real estate
dealer as defined in section 194(s) [now, Sec. 182(A)(3)(s)] of the Internal
Revenue Code, as amended by Rep. Act No. 42.
“Appellant
argues that she is already paying real estate taxes on her property, as
well as income tax on the income derived therefrom,
so that to further subject its rentals to the ‘real estate dealers’ tax’
amounts to double taxation. This
argument has already been rejected by this Court in the case of People vs.
Mendaros, et al., L-6975, promulgated May 27, 1955,
wherein we held that it is a well-settled rule that license tax may be levied
upon a business or occupation although the land or property used therein is
subject to property tax, and that ‘the state may collect an ad valorem tax on property used in a calling, and at
the same time impose a license tax on the pursuit of that calling’, the
imposition of the latter kind of tax being in no sense a double tax.'”
[23]
84 C.J.S. 131-132.
[24]
Manufacturers’ Life Insurance Co. vs. Meer,
L-2910, June 29, 1951; City of Manila vs. Interisland
Gas Service, L-8799, Aug. 31, 1956; Commissioner of Internal Revenue vs.
Hawaiian-Philippine Co., L-16315, May 30, 1964; Pepsi-Cola Bottling Co. of the
Philippines vs. City of Butuan, et al.,
L-22814, Aug. 28, 1969.
Pepsi-Cola Bottling Co. vs.
City of Butuan,
supra:
“The
second and last objections are manifestly devoid of merit. Indeed – independently of whether or not the
tax in question, when considered in relation to the sales tax prescribed by
Acts of Congress, amounts to double taxation, on which we need not and do not
express any opinion – double taxation, in general, is not
forbidden by our fundamental law. We
have not adopted, as part thereof, the injunction against double
taxation found in the Constitution of the United
States and some States of the Union. Then, again, the general principle against
delegation of legislative powers, in consequence of the theory of separation of
powers is subject to one well-established exception, namely: legislative powers may be delegated to local
governments – to which said theory does not apply – in respect of matters of
local concern.”
[25]
84 C.J.S. 133-134: “Double
taxation, although not favored, is permissible in the absence of express or
implied constitutional prohibition.
“Double
taxation should not be permitted unless the legislature has authority to impose
it. However, since the taxing power is
exclusively a legislative function, and since, except as it is limited or
restrained by constitutional provisions, it is absolute and unlimited, it is
generally held that there is nothing, in the absence of any express or
implied constitutional prohibition against double taxation, to prevent the
imposition of more than one tax on property within the jurisdiction, as the
power to tax twice is as ample as the power to tax once. In such case whether or not there should be
double taxation is a matter within the discretion of the legislature.
“In some
states where double taxation is not expressly prohibited, it is held that
double taxation is permissible, or not invalid or unconstitutional, or
necessarily unlawful, provided some other constitutional requirement is not
thereby violated, as a requirement that taxes must be equal and uniform.”
The
Constitution of the Philippines,
Art. VI, sec. 22(1) provides: “The
rule of taxation shall be uniform.”
[26]
Art. III, sec. 1, par. 12, Constitution.
[27]
51 Am. Jur. 860-861, citing Cousins v. State,
50 Ala. 113, 20 Am. Rep. 290; Rosenbloom v.
State, 64 Neb. 342, 89 NW 1053, 57 LRA 922; Voelkel v.
Cincinnati, 112 Ohio St. 374, 147 NE 754, 40 ALR 73 (holding the provisions of
an ordinance making the nonpayment of an excise tax levied in pursuance of such
ordinance a misdemeanor punishable by fine not in violation of the
constitutional prohibition against the imprisoned of any person for “debt
in a civil action, or mesne or final process”);
Ex parte Mann, 39 Tex. Crim.
Rep. 491, 46 SW 828, 73 Am. St. Rep. 961.
26 R.C.L. 25-26: “It is generally considered that a tax
is not a debt, and that the municipality to which the tax is payable is not a
creditor of the person assessed. A debt
is a sum of money due by certain and express agreement. It originates in, and is founded upon,
contract express or implied. Taxes, on
the other hand, do not rest upon contract, express or implied. They are obligations imposed upon citizens to
pay the expenses of government. They are
forced contributions, and in no way dependent upon the will or contract,
express or implied, of the persons taxed.”
[28]
51 Am. Jur. 66-67:
“Capitation or poll taxes are taxes of a fixed amount upon all
persons, or upon all the persons of a certain class, resident within a
specified territory, without regard to their property or the occupations in
which they may be engaged. Taxes of a
specified amount upon each person performing a certain act or engaging
in a certain business or profession are not, however, poll
taxes.”
[29]
Com. Act No. 158 (An Act Establishing a Form of Government for the City of
Iloilo), section 21: “Except as
otherwise provided by law, and subject to the conditions and limitations
thereof, the Municipal Board shall have the following legislative powers:
“(aa) x x x
and to fix penalties for the violation of ordinances, which shall not exceed a
fine of two hundred pesos or six months’ imprisonment, or both such fine and
imprisonment, for each offense.”
[30]
“To begin with the 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 the ordinance (section 18 of the Manila
Charter) in express terms also empowers the Municipal Board to ‘fix penalties
for the violation of ordinances which 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 legal basis.”
[31]
51 Am. Jur. 203, citing Re Page, 60 Kan.
842, 58 P 478, 47 LRA 68: “Taxes
are uniform and equal when imposed upon all property of the same character
within the taxing authority.” Manila Race Horse Trainers Assn., Inc. vs.
De la Fuente, L-2947, Jan. 11, 1951, 88 Phil.
60: “In the case of Eastern
Theatrical Co., Inc. vs. Alfonso, [L-1104, May 31, 1949], 46 O.G. Supp.
to No. 11, p. 303, it was said that there is equality and uniformity in
taxation if all articles or kinds of property of the same class are taxed at
the same rate. Thus, it was held in that
case, that ‘the fact that some places of amusement are not taxed while others,
such as cinematographs, theaters, vaudeville companies, theatrical shows, and
boxing exhibitions and other kinds of amusements or places of amusement are
taxed, is no argument at all against equality and uniformity of the tax
imposition.’ Applying this criterion to the present case, there would be
discrimination if some boarding stables of the same class used for the same
number of horses were not taxed or were made to pay less or more than
others.” Tan Kim Kee vs. Court of Tax
Appeals, et al., L-18080, April 22,
1963, per Reyes, J.B.L., J.:
“The rule of uniform taxation does not deprive Congress of the
power to classify subjects of taxation, and only demands uniformity within the
particular class.”
[32]
51 Am. Jur. 203:
“153. Uniformity of Operation Throughout Tax Unit. – One
requirement with respect to taxation imposed by provisions relating to equality
and uniformity, which has been introduced into some state constitutions in
express language, is that taxation must be uniform throughout the political
unit by or with respect to which the tax is levied. This means, for example, that a tax for a
state purpose must be uniform and equal throughout the state, a tax for a
county purpose must be uniform and equal throughout the county, and a tax for a
city, village, or township purpose must be uniform and equal throughout the
city, village, or township. It does not
mean, however, that the taxes levied by or with respect to the various political
subdivisions or taxing districts of the state must be at the same rate, or, as
one court has graphically pat it, that a man in one county shall pay the same
rate of taxation for all purposes that is paid by a man in an adjoining
county. Nor does the rule require that taxes for the same purposes shall be
imposed in different territorial subdivisions at the same time. It has also been said in this connection
that the omission to tax any particular individual who may be liable does not
render the whole tax illegal or void.”
[33]
84 C.J.S. 77: “Equality in taxation
is accomplished when the burden of the tax falls equally and impartially on all
the persons and property subject to it [State ex rel. Haggard v. Nichols, 265 N.W. 859, 66
N.D. 355], so that no higher rate or greater levy in proportion to value is
imposed on one person or species of property that on others similarly or of
like character.”
84 C.J.S. 79: “The rule of uniformity in taxation
applies to property of the life kind and character and similarly situated, and
a tax, in order to be uniform, must operate alike on all persons, things, or
property, similarly situated. So the
requirement is complied with when the tax is levied equally and uniformly on
all subjects of the same class and kind and is violated if particular kinds,
species, or items of property are selected to bear the whole burden of the
tax, while others, which should be equally subjected to it, are left untaxed.”
[34]
84 C.J.S. 81: “There is a
presumption that tax statutes are intended to operate uniformly and equally
[Alaska Consol. Canneries v. Territory
of Alaska, C.C.A. Alaska, 16 F. 2d.
256], and a liberal construction will be indulged in order to accomplish fair
and equal taxation of all property within the state.”
[35] Medina
vs. City of Baguio,
L-4060, Aug. 29, 1952; Wa Wa Yu vs. City of Lipa, L-9167, Sept. 27, 1956; Saldaña vs. City of Iloilo,
55 O.G. 10267; and the cases cited therein.