G.R. No. L-12565; October 31, 1960
ANTONIO HERAS, plaintiff-appellee, vs. THE CITY TREASURER OF QUEZON CITY, defendant-appellant.

FACTS

Antonio Heras, owner and operator of JD Transit and Taxi, a public utility licensed by the Public Service Commission, paid under protest the total amount of P2,582.50 to the City Treasurer of Quezon City as mayor’s permit, municipal license fees, and penalties for the period from June 16 to December 31, 1956. The fees included items for transportation by land, motor vehicle depository, storage of gasoline and crude oil, and penalties. Heras, through counsel, objected to the imposition of the license fees for “Transportation by land Class A” (P750.00) and “Motor Vehicle Depository Class A” (P412.50), totaling P1,162.50, on the ground that municipal corporations are not empowered to impose such license fees on the business of transportation. The City Treasurer refused the objection and demanded full payment. Heras paid the full amount under protest and subsequently filed an action for recovery. The parties submitted a stipulation of facts, noting that the storage of gasoline and crude oil was used exclusively for the operation of Heras’s public utility. The trial court ruled in favor of Heras, ordering a refund of the full amount and declaring the relevant sections of Quezon City Ordinance No. 2673 null and void. The City Treasurer appealed.

ISSUE

1. Whether Quezon City Ordinance No. 2673, specifically Section 2, Chapter XVI (imposing a license fee for storage of gasoline and crude oil), and Section 3, Chapter XXII (imposing a license fee for transportation business and motor vehicle depository), is valid under the city’s charter.
2. Whether the license fees imposed on Heras’s transportation business and motor vehicle depository are prohibited by Republic Act No. 587 , which amended the Revised Motor Vehicle Law.

RULING

The Supreme Court modified the trial court’s decision.
1. On the storage license fee (Section 2, Chapter XVI of Ordinance No. 2673): The Court declared this provision null and void. The Revised Charter of Quezon City ( Republic Act No. 537 ) empowers the city council to tax, fix license fees, and regulate the business of “storage and sale” of gasoline and other combustible products. The use of the conjunction “and” indicates that the power refers to storage coupled with sale for business or profit. Since Heras’s storage of gasoline and crude oil was exclusively for his own consumption in operating his public utility and not for sale, the ordinance imposing a license fee on such storage contravenes the charter’s limited grant of power. Municipal taxing powers must be strictly construed and cannot be extended by implication.
2. On the transportation and motor vehicle depository license fees (Section 3, Chapter XXII of Ordinance No. 2673): The Court held that these fees cannot be imposed. Section 17 of Republic Act No. 587 (amending the Revised Motor Vehicle Law) explicitly states that “no other taxes or fees than those prescribed in this Act shall be imposed for the registration or operation, or on the owner of any motor vehicle… by any municipal corporation, the provisions of any city charter to the contrary notwithstanding.” This later law repealed pro tanto Section 12(c) of Republic Act No. 537 (Quezon City Charter) insofar as it authorized taxes or license fees on the operation of motor vehicles. Heras’s transportation business, which includes the operation and depository of motor vehicles, is exclusively covered by the Revised Motor Vehicle Law.
3. On the refund: The Court found that Heras’s protest specifically covered only the two items related to his transportation business: the P750.00 for “Transportation by land” and the P412.50 for “Motor Vehicle Depository,” totaling P1,162.50. The payment of the other items (mayor’s permit, storage fees, and penalties) was deemed voluntary and not recoverable. Therefore, the City Treasurer was ordered to refund only P1,162.50, not the full P2,582.50.
The judgment was affirmed with modification.