GR 33318; (December, 1930) (Digest)
G.R. No. 33318 , December 20, 1930
SMITH, BELL & CO., LTD. vs. THE MUNICIPALITY OF ZAMBOANGA and CARLOS DOMINGUEZ, Municipal Treasurer of Zamboanga
FACTS
Smith, Bell & Co., Ltd., a domestic corporation with a branch in Zamboanga, challenged the validity of Municipal Ordinance No. 226, series of 1928, enacted by the Municipality of Zamboanga. The ordinance imposed a license tax of ₱100 annually on each motor engine for baling hemp. The plaintiff, engaged in the hemp business, owned such a machine and paid the tax under protest for the first two quarters of 1929 to avoid criminal prosecution, then sued for a refund, arguing the ordinance was null and void. The defendants contended the tax was authorized under Section 2625(d) of the Administrative Code of 1917. The lower court ruled in favor of the plaintiff, declaring the ordinance invalid. The defendants appealed.
ISSUE
Whether the Municipality of Zamboanga had the legal authority to impose a license tax on a motor engine used for baling hemp under the applicable laws.
RULING
NO. The Supreme Court affirmed the lower court’s decision, holding the ordinance invalid. The Court ruled that the municipal council’s power to tax under Section 2625 of the Administrative Code of 1917 was limited to the specific items enumerated therein. Subsection (c) authorized only the regulation of steam engines and boilers, not the imposition of a license tax. Subsection (d), which allowed license taxes on various businesses and occupations, did not include machinery for baling hemp. Since the legislature did not grant the power to tax such machinery, the municipality acted beyond its authority. The Court also noted that the ordinance could not be justified under Act No. 3422 , as it was not shown to apply to municipalities in the Department of Mindanao and Sulu, and even if it did, the required approvals from the Secretary of the Interior and Secretary of Finance were not obtained. Thus, the ordinance was declared null and void, and the plaintiff was entitled to a refund of the ₱50 paid under protest.
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