University of the Philippines College of Law

Block F2021

Topic Equal Protection

Case No. G.R. No. L-23794 / 17 February 1968
Case Name ORMOC SUGAR COMPANY v. TREASURER OF ORMOC CITY
Ponente Bengzon, JP, J.
Digest Assigned to Joker & Mikhail

Right Claimed Equal protection of laws

Claimant Ormoc Sugar Company
State Actor Municipal Board of Ormoc City; City Treasurer
State Action Enactment of ordinance imposing export tax on the claimant; Collection of export tax

RELEVANT FACTS

 In January 1964, the Municipal Board of Ormoc City passed an ordinance imposing "on any and all
productions of centrifugal sugar milled at the Ormoc Sugar Company, Inc., in Ormoc City a municipal tax
equivalent to one per centum (1%) per export sale to the United States of America and other foreign
countries."

 The Ormoc Sugar Company paid the taxes under protest on two occasions in 1964.

 The Court of First Instance upheld the constitutionality of the ordinance, and declared that the taxing
power of the city was broadened by the Local Autonomy Act enacted in 1959. (The Administrative Code
then in force forbade municipal councils to impose any import or export tax. This was deemed repealed
by the Local Autonomy Act by giving chartered cities, municipalities and municipal districts authority to
levy for public purposes just and uniform taxes, licenses or fees.)

ISSUES

 W/N the ordinance in question violates the equal protection clause

 W/N the company may refund the tax paid with interest

RATIO DECIDENDI

Issue
W/N the ordinance in
question violates the equal
protection clause
Ratio
YES.
The ordinance taxes only centrifugal sugar produced and exported by the
Ormoc Sugar Company. It was the only sugar central in the city at the time.
However, in order for classification to be reasonable and not barred by the
equal protection clause, the classification must apply not only to present
conditions but also to future conditions which are substantially identical to
those of the present.

The equal protection clause applies only to persons or things identically

situated and does not bar a reasonable classification of the subject of
legislation, and a classification is reasonable where (1) it is based on
substantial distinctions which make real differences; (2) these are germane to
 University of the Philippines College of Law
Block F2021

W/N the company may
refund the tax paid with
interest
the purpose of the law; (3) the classification applies not only to present
conditions but also to future conditions which are substantially identical to
those of the present; (4) the classification applies only to those who belong
to the same class.
YES, but without interest.
At the time of collection, the ordinance provided a sufficient basis to preclude
arbitrariness, the same being then presumed constitutional until declared
otherwise.

RULING

WHEREFORE, the decision appealed from is hereby reversed, the challenged ordinance is declared
unconstitutional and the defendants- appellees are hereby ordered to refund the P12,087.50 plaintiff- appellant
paid under protest. No. costs. So ordered.

NO SEPARATE OPINION