GR 26447; (January, 1970) (Digest)
G.R. No. L-26447 January 30, 1970
NORTHERN PHILIPPINES TOBACCO CORPORATION, petitioner-appellant, vs. THE MUNICIPALITY OF AGOO, PROVINCE OF LA UNION, ET AL., respondents-appellees.
FACTS
On June 2, 1964, the Municipal Council of Agoo, La Union, enacted Ordinance No. 11, series of 1964, amending a prior ordinance. This ordinance imposed a municipal license tax on all redrying plants operating within the municipality, with a graduated rate based on the quantity of Virginia leaf tobacco redried annually. The Northern Philippines Tobacco Corporation, which owned one of the two redrying plants in Agoo, filed a petition in the Court of First Instance of Manila seeking to declare the ordinance null and void. The corporation argued the ordinance was unauthorized, unjust, excessive, oppressive, confiscatory, and discriminatory, constituting a denial of equal protection. The lower court upheld the ordinance’s validity, prompting this appeal.
ISSUE
The issues are: (1) Whether the Municipal Council of Agoo acted ultra vires in enacting the ordinance; (2) Whether the 300% increase in the license tax rate is unjust, excessive, oppressive, and confiscatory; and (3) Whether the ordinance, as applied, is discriminatory and denies equal protection.
RULING
The Supreme Court affirmed the lower court’s decision, upholding the validity of Ordinance No. 11. On the first issue, the Court ruled the ordinance was a valid exercise of the municipality’s authority under the Local Autonomy Act ( Republic Act No. 2264 ) to impose municipal license taxes on persons engaged in any occupation or business. The tax was levied on the privilege of operating the tobacco redrying business, not on the rendering of services, sales, or income. The graduated rate based on volume was merely a classification based on business size, not a percentage or sales tax. On the second issue, the Court found no evidence to support the claim that the increased rate was excessive, unjust, or confiscatory, noting municipal corporations have wide discretion in setting rates, and the appellant failed to present proof of relevant conditions. On the third issue, the Court held that any alleged discriminatory enforcement by local officials against the appellant, while being lenient to its competitor, does not affect the ordinance’s validity; the appellant’s recourse for such enforcement lies in a separate action.