GR L 39699; (March, 1979) (Digest)
G.R. No. L-39699. March 14, 1979.
SAN MIGUEL CORPORATION, petitioner, vs. HON. CELSO AVELINO, Presiding Judge of the Court of First Instance of Cebu, Branch XIII, and the CITY OF MANDAUE, respondents.
FACTS
The City of Mandaue enacted Ordinance No. 97, its Tax Code, imposing a specific tax on beer production. Petitioner San Miguel Corporation, operating a brewery within the city, was assessed by the City Treasurer. San Miguel contested the tax’s legality, arguing it was imposed beyond the city’s territorial jurisdiction. The City Fiscal upheld the ordinance. San Miguel then appealed to the Secretary of Justice pursuant to the Local Tax Code (Presidential Decree No. 231). The Acting Secretary of Justice rendered an opinion stating the ordinance was “of doubtful validity.”
Subsequently, the City of Mandaue filed a complaint for collection of the tax in the Court of First Instance (CFI) of Cebu. San Miguel moved to dismiss the complaint, arguing the CFI lacked jurisdiction because the Secretary of Justice’s decision was final and the City’s proper remedy was an “appeal” under the Local Tax Code, not a collection suit. Respondent Judge Celso Avelino denied the motion to dismiss, finding no justifiable reason to dismiss at that stage. San Miguel then filed this petition for certiorari and prohibition to annul the CFI order.
ISSUE
Whether the Court of First Instance lacked jurisdiction over the City’s collection suit, thereby rendering the denial of the motion to dismiss a grave abuse of discretion, on the theory that the Secretary of Justice’s opinion was final and the City’s only recourse was a different mode of “appeal” under the Local Tax Code.
RULING
The Supreme Court dismissed the petition, upholding the CFI’s jurisdiction. The legal logic is clear: the constitutional and statutory jurisdiction of the CFI over cases involving the legality of a tax is unequivocal. The Constitution vests the Supreme Court with appellate jurisdiction over cases where a tax’s legality is in question, and the Judiciary Act grants CFIs original jurisdiction over such civil actions. The City’s filing of a collection suit, which squarely put the ordinance’s validity in issue, was precisely the traditional and appropriate judicial proceeding to test the tax’s legality.
The Court rejected San Miguel’s procedural argument that the collection suit was not the “appeal” contemplated under Section 47 of the Local Tax Code. The City, as the aggrieved party by the Secretary’s opinion, did contest that opinion in a court of competent jurisdiction—the CFI—by filing the collection action. This satisfied the statutory purpose. The opinion of the Acting Secretary of Justice, which only declared the ordinance “of doubtful validity,” was not a final, binding adjudication on its legality. The ultimate power to rule on validity rests with the judiciary, as emphasized in Marbury v. Madison. Therefore, the respondent Judge correctly assumed jurisdiction to hear and decide the case, including the central question of the ordinance’s validity. The denial of the motion to dismiss was proper, and the extraordinary writs of certiorari and prohibition could not issue.