GR L 5101; (November, 1953) (Digest)
G.R. No. L-5101 November 28, 1953
ANGELES S. SANTOS, petitioner-appellant, vs. PATERIO AQUINO, as Municipal Mayor of Malabon, THE MUNICIPAL COUNCIL OF MALABON, A.A. OLIVEROS, as Municipal Treasurer of Malabon, Province of Rizal, respondents-appellees.
FACTS
The petitioner, Angeles S. Santos, is the manager of “Cine Concepcion” theater in Malabon, Rizal. He filed a petition seeking to declare Municipal Ordinance No. 61 (series of 1946) and Ordinance No. 10 (series of 1947) null and void. Ordinance No. 61 imposed an annual license tax of P1,000 on the theater, a significant increase from the previous P180 under an earlier ordinance. Ordinance No. 10 later imposed a graduated municipal license tax on theaters ranging from P200 to P9,000 per annum. The Department of Finance reduced the tax rates in Ordinance No. 10 before approving it on November 3, 1948, and notice of this reduced tax was served on the petitioner on February 12, 1949. The petitioner contended the ordinances were ultra vires, repugnant to the Constitution, unjust, oppressive, confiscatory, and a result of persecution. The respondents asserted the ordinances were validly enacted under Commonwealth Act No. 472, submitted to and approved by the Department of Finance as required, and were necessary for municipal revenue. The trial court upheld the ordinances as valid and constitutional and dismissed the petition.
ISSUE
The primary issue is whether Municipal Ordinance No. 61 (series of 1946) and Ordinance No. 10 (series of 1947), as modified and approved by the Department of Finance, are valid and constitutional exercises of the municipal taxing power under Commonwealth Act No. 472.
RULING
The Supreme Court affirmed the trial court’s judgment, upholding the validity of the ordinances. The Court ruled that:
1. The Municipal Council of Malabon was authorized under Commonwealth Act No. 472 to enact the ordinances. The requirement for Department of Finance approval for tax increases over 50% was complied with.
2. The tax rates (P1,000 per annum under Ordinance No. 61 and P2,000 per annum for theaters with gross annual receipts of P130,000 or more under the reduced rate of Ordinance No. 10) were not shown to be excessive, unjust, oppressive, or confiscatory.
3. The Department of Finance acted within its authority in reducing the tax rate in Ordinance No. 10. The Court held that the power to approve or disapprove includes the implied power to reduce. The municipal council’s initial act of fixing the tax at P9,000 included the authority to accept the lesser amount of P2,000, making a separate ordinance for the reduced rate unnecessary.
4. Procedurally, the Court noted the action was not a proper action for declaratory relief as the ordinances were not ambiguous and were already violated by non-payment. Furthermore, the petitioner, as mere manager and not the owner of the theater, was not the real party in interest. However, the Court decided to address the substantive issues despite these procedural defects.
A separate dissenting opinion argued that the Secretary of Finance’s power was limited to approval or disapproval and did not include the authority to modify the ordinance’s terms; thus, the modified ordinance should have been repassed by the municipal council to be effective.