Taxation I

Case Digest Compilation

City of Baguio v. De Leon It would be an undue and unwarranted emasculation

October 31, 1968 of the above power thus granted if De Leon was to
En Banc be sustained in his contention that no such statutory
authority for the enactment of the challenged
ordinance could be discerned from the language used
Facts: Fortunato de Leon assails the validity of an
in the amendatory act. That is about all that needs to
ordinance of the City of Baguio, imposing a license
be said in upholding the lower court, considering that
fee on any person, firm, entity or corporation doing
the City of Baguio was not devoid of authority in
business in the City of Baguio.
enacting this particular ordinance.
De Leon was held liable as a real estate dealer with a
Double taxation is not violative of due process.
property in Baguio worth more than P10,000, but not
As to why double taxation is not violative of due
in excess of P50,000, and therefore obligated to pay
process, Justice Holmes made clear in this language:
under such ordinance the P50 annual fee.
"The 14th Amendment (the due process clause) no
more forbids double taxation than it does doubling
De Leon alleges that the Ordinance is
the amount of a tax, short of confiscation or
unconstitutional since it is ultra vires and it imposed
proceedings unconstitutional on other grounds.
double taxation, which is repugnant to the due
process clause, and that it violated the requirement
With that decision rendered at a time when American
of uniformity.
sovereignty in the Philippines was recognized, it
possesses more than just a persuasive effect. To
Ruling of the Lower Court
some, it delivered the coup de grace to the bogey of
It declared the above ordinance as amended, valid
double taxation as a constitutional bar to the
and subsisting, and held De Leon liable for the fees
exercise of the taxing power. In a 1947 decision,
therein prescribed as a real estate dealer.
however, we quoted with approval this excerpt from
a leading American decision: "Where, as here,
MAIN ISSUE: WON the Ordinance is violative of
Congress has clearly expressed its intention,
the constitutional requirement of uniformity –
the statute must be sustained even though
NO.
double taxation results."
RULING:
At any rate, it has been expressly affirmed by us that
Discussion on R.A. 329
such an argument against double taxation may not
The source of authority for the challenged ordinance
be invoked where one tax is imposed by the state
is supplied by Republic Act No. 329, amending the
and the other is imposed by the city, it being widely
city charter of Baguio, empowering it to fix the
recognized that there is nothing inherently obnoxious
license fee and regulate "businesses, trades and
in the requirement that license fees or taxes be
occupations as may be established or practiced in the
exacted with respect to the same occupation, calling
City."
or activity by both the state and the political
subdivisions thereof.
In Medina v. City of Baguio, the effect of the
amendatory section insofar as it would expand the
Discussion as to Uniformity in Taxation
previous power vested by the city charter was
According to the challenged ordinance, a real estate
clarified in these terms: Appellants apparently have
dealer who leases property worth P50,000 or above
in mind Section 2553, paragraph (c) of the Revised
must pay an annual fee of P100. If the property is
Administrative Code, which empowers the City of
worth P10,000 but not over P50,000, then he pays
Baguio merely to impose a license fee for the
P50 and P24 if the value is less than P10,000.
purpose of rating the business that may be
established in the city. The power as thus conferred
On its face, therefore, the above ordinance
is indeed limited, as it does not include the power to
cannot be assailed as violative of the
levy a tax.
constitutional requirement of uniformity. In
Philippine Trust Company v. Yatco, Justice Laurel,
But in 1948, Republic Act No. 329 was enacted
speaking for the Court, stated: A tax is considered
amending the charter of said city and adding to its
uniform when it operates with the same force and
power to license the power to tax and to regulate.
effect in every place where the subject may be
And it is precisely having in view this amendment
found.
that Ordinance No. 99 was approved in order to
increase the revenues of the city. The city council
In Eastern Theatrical Co. v. Alfonso, it was ruled that
of Baguio, therefore, has now the power to tax,
equality and uniformity in taxation means that
to license and to regulate provided that the
all taxable articles or kinds of property of the same
subjects affected be one of those included in
class shall be taxed at the same rate. The taxing
the charter. In this sense, the ordinance under
power has the authority to make reasonable and
consideration cannot be considered ultra vires
natural classifications for purposes of taxation.
whether its purpose be to levy a tax or impose a
license fee.
1
Based on the syllabus of Atty. Kriska Marna A. Buena
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ballos, Mahusay, Malicay, Nono, Paclibar, Picot, Teng
 Taxation I
Case Digest Compilation
To satisfy this requirement then, all that is
needed as is that the statute or ordinance in
question "applies equally to all persons, firms
and corporations placed in similar situation."
Inequalities which result from a singling out of one
particular class for taxation or exemption infringe no
constitutional limitation.

It is thus apparent from the above that in much the

same way that the plea of double taxation is
unavailing, the allegation that there was a violation
of the principle of uniformity is inherently lacking in
persuasiveness.

2
Based on the syllabus of Atty. Kriska Marna A. Buena
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ballos, Mahusay, Malicay, Nono, Paclibar, Picot, Teng