G.R. No. L-14210. June 30, 1961.
LUNETA MOTOR COMPANY, plaintiff-appellee, vs. RUBEN A. VILLALUZ, ETC., defendant-appellant.

FACTS

Maximino Salvador, the registered owner of a REO truck, renewed its registration for the year 1956 before the last working day of February. Pursuant to the law then allowing payment in installments, he paid only the first half of the annual registration fee. On May 10, 1956, the truck was sold at a public auction, and Luneta Motor Company (appellee) became the purchaser. Upon discovering that only half of the 1956 fee had been paid, Luneta paid the second half on August 30, 1957.
The Chief of the Motor Vehicles Office (appellant) demanded and collected from Luneta an additional sum of P240.00 as a penalty for delinquent registration for 1956. Luneta paid under protest and subsequently filed an action for recovery, arguing that the penalty, if applicable, should be computed only on the unpaid half of the annual fee (P240.00), not on the full annual fee. The lower court ruled in favor of Luneta, ordering a refund of P128.00, having computed the 50% penalty on the delinquent half.

ISSUE

Whether the 50% penalty for delinquent registration under the Revised Motor Vehicle Law should be based on the total annual registration fee or only on the unpaid installment.

RULING

The Supreme Court reversed the lower court’s decision and dismissed Luneta’s complaint. The legal logic is anchored on the nature of motor vehicle registration and the interpretation of the penalty provision. The Court clarified that registration under Act No. 3992 is an annual obligation. The statutory privilege to pay the fee in two semestral installments is merely a convenience for the taxpayer; it does not convert the registration into a semestral one. The vehicle is registered for the entire calendar year.
Consequently, when the second installment for 1956 was not paid by the statutory deadline (the last working day of August 1956), the registration for the entire year became delinquent under Section 5(b) of the Act. Neither the original owner nor Luneta returned the vehicle plates by the end of December 1956, which would have been the only way to avoid delinquency. Therefore, the penalty under Section 67(a)—an additional 50% of the fees “corresponding to the portion of the year for which the vehicle is registered for use”—must be applied to the fee for the full year. Since the truck was registered and intended for use throughout 1956, the penalty base is the total annual fee, not merely the unpaid half. The ambiguity in the phrase “portion of the year” was rendered irrelevant because the registration covered the whole year. Thus, the appellant correctly computed the penalty on the full annual amount.