G.R. No. L-14806; July 30, 1960
ZAMBOANGA COPRA PROCUREMENT CORPORATION, plaintiff-appellee, vs. CITY OF ZAMBOANGA, defendant-appellant.

FACTS

The Zamboanga Copra Procurement Corporation paid under protest the sum of P22,033.44 to the City of Zamboanga pursuant to Ordinance No. 340, Series of 1950, which imposed a tax of eight centavos per one hundred kilos of copra exported abroad. The Corporation filed a complaint in the Zamboanga Court of First Instance, contending that the City had no power to impose such a tax. The trial court annulled the ordinance, ordered the City to refund the amount with legal interest and costs, and additionally required the City to pay P5,000 as attorney’s fees and P500 as litigation expenses. The City appealed, asserting its authority under Section 14(m) of Commonwealth Act No. 39 (its charter), which authorizes it to tax, among others, “oil … or any of the products thereof, and all other highly combustible or explosive materials.” The City cited the case of Uy Matia vs. City of Cebu, where this Court upheld a similar ordinance imposing a license fee on persons engaged in buying, selling, and storing copra in a warehouse.

ISSUE

Whether the City of Zamboanga had the legal authority to impose a tax on copra exported from the city under Ordinance No. 340, Series of 1950.

RULING

No. The Supreme Court declared Ordinance No. 340 invalid. The Court distinguished the present case from Uy Matia vs. City of Cebu, noting that the Cebu ordinance imposed a tax on copra stored within the municipality, whereas the Zamboanga ordinance imposed a tax on copra exported from the city. The Court held that the issue is controlled by Saldaña vs. City of Iloilo and Panaligan vs. City of Tacloban. In Saldaña, the Court annulled an Iloilo City ordinance imposing fees on goods taken out of the city, ruling it was not authorized by the city charter and was expressly prohibited by Section 2287 of the Revised Administrative Code, which forbids municipal councils from imposing any tax in any form upon goods carried into or out of the municipality. Similarly, in Panaligan, the Court annulled a Tacloban City ordinance levying inspection fees on animals exported from the city. Following these precedents, the Court held the Zamboanga ordinance to be an ultra vires export tax. The Court affirmed the trial court’s order for the City to refund the amount collected, but modified the attorney’s fees award from P5,000 to P2,500, noting that the appellee could not recover more than the P22,033.44 adjudged by the trial court since it did not appeal the decision. The appealed decision was affirmed with this modification.