GR No.

L-47252 April 18, 1941

THE APOSTOLIC PREFECT OF THE MOUNTAIN PROVINCE, plaintiff-appellant,

v.
THE TREASURER OF THE CITY OF BAGUIO, defendant-appealed.

Messrs. Cavanna, Jasmines and Tianco representing the appellant.

The Attorney General on behalf of the appellee.

IMPERIAL, J .:

The plaintiff exercised this action to recover from the defendant the sum of P1,019.37 that he paid
under protest as a special tax on his properties in the City of Baguio, corresponding to the year
1937. Appeal of the judgment of the Court of First Instance of said city that dismissed your claim,
without costs.

The parties submitted the matter through the following partial stipulation of facts:

1.º The plaintiff is a sole proprietorship of a religious character, organized in accordance

with the laws of the Philippines, with residence in the city of Baguio;

2. The defendant is a public official of the city of Baguio and acts as treasurer and
collector of said city;

3. That the defendant demanded and collected from the plaintiff on June 25, 1937 the
sum of one thousand nineteen pesos and thirty-seven cents (P1,019.37), Philippine
currency, by virtue of the provisions of Ordinance No. 137, as amended and amended by
Ordinances No. 263, 277, 283, 297, 311, 325, 348, 367, 387, 419, 471, 45, 455, 466, 512,
552, 591, 592, and Resolution of the Council of the City of Baguio No. 10 dated January
22, 1918. All the aforementioned ordinances, as well as resolution No. 10, series of 1918,
become integral parts of this agreement.

4. That the payment made by the plaintiff of p1,019.37 corresponds to the year 1937 and
was made under protest formulated in a letter dated June 25, 1937 in which the reasons
for the portesta were explained and a favorable resolution was requested from the protest
and the return of the amount paid;

5. That the defendant denied the protest;

6.º The lands affected with the payment of P1,019.37 are lands owned by the plaintiff,
dedicated to worship and teaching during the year 1937 and in previous years;

7. That the City of Baguio built in accordance with the ordinances cited above in
paragraph 2. of this stipulation a drainage and sewerage system;

8. That the plaintiff came paying in years prior to 1937, without protest, the sums that the
city demanded in accordance with the ordinances and referred to; and for the first time I
protest in 1937, a protest that is the subject of this litigation;

9.º That a list of the appraised properties in the city of Baguio was included in Ordinance
No. 137 and that relation became part of Ordinance No. 137 and was called and
converted into "SPECIAL ASSESSMENT LIST, CITY OF BAGUIO" , for the purposes of
said ordinance and that the properties affected in the plaintiff's protest payment were and
are included in said list and have not been excluded to date by virtue of any ordinance
subsequent to No. 137;
 10. That the construction of the drainage and sewerage system has benefited and is
benefiting directly and especially all the owners whose lots and lands are included in the
"SPECIAL ASSESSMENT LIST, CITY OF BAGUIO" including the lands of the applicant
here affected in said list and in the payment under protest and that this drainage and
sewerage system has promoted the cleanliness and sanitary condition of the land on the
referred list.

11. That the parties reserve the right to take additional tests.

The appellant supports the following propositions in his allegations of error: (1) that his real estate
properties and his improvements in the City of Baguio, because they are exempt from payment of
all taxes by the Constitution and by current laws, must be equally exempt from the payment of the
special contribution that the appellee has charged him and he has paid under protest; (2) that
Ordinance No. 137 and its amendments, under which the special tax has been collected, exclude
from its provisions its properties exempt from the payment of all taxes; (3) that in the assumption
that the aforementioned ordinances do not exclude their properties from the payment of the
special tax, they are null and void; and (4) that in the event that the aforementioned ordinances
were legal, the appellee, as Treasurer of the City of Baguio,

The first proposition involves the question of whether the properties on which the special
contribution was collected are effectively exempt from such payment. The special tax was
collected by the appellee under the provisions of articles 2 and 5 of Ordinance No. 137 that
provide:

It having heretofore been ascertained that said work will benefit each and all owners or
possessors or property subject to taxation situated, lying and being within the corporate
limits of the City, it is hereby declared that benefit will accrue from said work to each and
all said persons, and said persons shall pay a compensation for said benefit.

The City Assessor having heretofore compiled from the City Assessment and Valuation
aforesaid and certified to the City Treasurer a list containing and setting forth the total
amount of property within the corporate limits of the City subject to assessment and levy
for the purposes in this Ordinance recited, the total amount of properties individually
owned and possessed, and the name of each individual owner and possessor, the rate
per centum, to wit: ONE PER CENTUM ad valorem of said total value which is necessary
for the purposes set forth in Section III hereof, is hereby made the amount to be paid
individually by each owner or possessor as his share, and the above-mentioned list is
hereby made part hereof and named "SPECIAL ASSESSMENT LIST," and said list is
hereby declared to be,and made the City official list and basis for assessing, levying and
collecting the rate of compensation aforesaid from the above-referred owners and
possessors, and each owner or possessor is required to, and shall pay the amount in said
list stated as his individual share to the City Treasurer on or after the first of March and
not later than June 30th, 1914.

The appellant maintains that his properties are exempt from the payment of the special tax both
as provided in Article 2 of Ordinance No. 137 and as provided in Article 14, (3), Title VI, of the
Philippine Constitution it reads as follows:

(3) Cemeteries, churches, parishes and convents attached to them, and all land, buildings
and improvements used exclusively for religious, charitable or educational purposes, will
be exempt from taxation.

It is alleged that according to Article 2 of Ordinance No. 137, only properties that are not exempt
from paying a tax must pay the special tax and that according to the aforementioned
constitutional provision, the appellant's properties are exempted from paying the tax. special
contribution for being dedicated to religious purposes. This claim requires that it be resolved, in
the first place, if the special contribution imposed by Ordinance No. 13 is a tax in its legal
meaning. It is a well-established tax rule that the special contributions that are created and
collected to amortize extraordinary expenses caused by works, such as the drainage and
sewerage system, which benefit the inhabitants in a special way, is not a tax in its sense
legal. According to the ordinance, the special contribution that was charged to the properties
located in the City of Baguio, was created to amortize the extraordinary expenses caused by the
drainage and sewerage system that was built, a work that benefited in a special way all the
owners. city. Judge Cooley, in drawing the distinction between taxes and special contributions in
his treatise on taxes, expresses himself in these terms:

While the word "tax" in its broad meaning, includes both general taxes and special
assessments, and in a general sense a tax is an assessment, and an assessment is a
tax, yet there is a recognized distinction between them in that assessment is confined to
local impositions upon property for the payment of the cost of public improvements in its
immediate vicinity and levied with reference to special benefits to the property
assessed. The differences between a special assessment and a tax are that (1) a special
assessment can be levied only on land; (2) a special assessment cannot (at least in most
states) be made a personal liability of the person assessed; (3) a special assessment is
based wholly on benefits; and (4) a special assessment is exceptional both as to time and
locality. The imposition of a charge on all property, real and personal, in a prescribed
area, is a tax and not an assessment, although the purpose is to make a local
improvement on a street or highway. A charge imposed only on property owners
benefited is a special assessment rather than a tax notwithstanding the statute calls it a
tax.

If the special contribution charged to the appellant is not, strictly speaking, a tax from which
payment he is exempt, it is evident that neither under the ordinance nor the Constitution the
referred appellant is exempt from paying the special contribution.

Furthermore, according to the stipulation of facts, the appellant cannot successfully invoke the
exemption established by the Constitution because it has not been admitted or proven that his
properties that paid for the special contribution were used exclusively for religious purposes. It is
true that it was stipulated that the properties were dedicated to religious purposes, but it was not
agreed or proven that such use was exclusive, and therefore it may happen that the properties
other than being dedicated to religious purposes were also destined and used for other purposes.
not religious.

Regarding the validity of Ordinance No. 137 and its amendments, it is undeniable that the City of
Baguio is authorized by article 8 (1) of Law No. 1963, today article 2553 (1) of the Revised
Administrative Code, to create the special contribution discussed in order to amortize the costs
caused by the drainage and sewerage system that was built for the benefit of all the inhabitants of
the mentioned city.

The ultimate claim of the appellant is that assuming that Ordinance No. 137 and its amendments
are valid, he is no longer obliged to pay a special tax in view of the fact that in years prior to 1937
he already paid the aliquot part that corresponded to him of said special contribution. The claim is
equally unfounded, because it appears from Exhibit 1 that the cost of the drainage and sewerage
system amounts to P502,750.75 and the city only charged for special contributions until 1937 the
sum of P291,290.08; resulting in that the cost of the system, in 1937, was not yet fully satisfied.

The contested judgment being in accordance with the law, it is confirmed in all its parts, with the
costs of this instance to the appellant. So ordered.