[CASE DIGEST] ORMOC SUGAR, CO. v.

TREASURER OF ORMOC
CITY (G.R. No. L-23794, 22 SCRA 603)
February 17, 1968

Bengzon, J.P., J.

FACTS

The Municipal Board of Ormoc City passed Ordinance No. 4, which imposed municipal tax of one
percent per export sale to USA and other foreign countries of any and all productions of centrifugal
sugar milled at the Ormoc Sugar Company (OSC). 

The latter paid under protest but challenged the ordinance’s constitutionality on the grounds that it is
violative of equal protection clause and uniformity in taxation. The CFI upheld the constitutionality of
said ordinance, saying the taxing power of Ormoc City was broadened by the Local Autonomy Act to
include all other forms of taxes, licenses, or fees not excluded in its charter.

RULING: For the OSC.

Ordinance No. 4 infringed the equal protection clause because the requirements of a valid
classification were not upheld as it taxes only centrifugal sugar produced and exported by OSC and
none other. 

Although it is true that OSC was the only sugar central at the time the ordinance was passed, the
ordinance still, to be reasonable, should be applicable to future conditions as well because even if
later a similar company is set up, it cannot be subject to the tax because the ordinance expressly
points only to OSC as the entity to be levied upon. 

A classification is reasonable where (1) it is based on substantial distinctions which make real
differences; (2) these are germane to 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; and (4) the classification applies only to those who belong to the same class.