Saldana v.
City of Iloilo (SAMMY) The ordinance penalized violation of the ordinance with a fine of not less
June 26, 1958 | MONTEMAYOR, J. | Taxation
PETITIONER: SERAFIN SALDAÑA
RESPONDENTS: CITY OF ILOILO
SUMMARY: In 1946, the City of Iloilo promulgated Ordinance 28, which
strictly prohibits the transport of food supply and labor animals outside Iloilo
without first obtaining the necessary license permit from the mayor. Under the
ordinance, Serafin Saldana had been paying, under protest, so-called fees on
fish bought in Iloilo and sent to Manila from 16 September to 6 December 1946.
Saldana wanted reimbursement and that the ordinance was illegal, null and void,
having been enacted beyond the powers of the Municipal Board of the City.
City said imposition and collection of the municipal licenses were within the
power and duties of the Municipal Board in the exercise of its police power.
CFI: dismissed complaint
SC: reversed the appealed decision, and ordered the City of Iloilo to reimburse
Saldana the amount of P1,359.80, with legal interest and costs.
DOCTRINE: A municipal corporation like the defendant City has no inherent
power of taxation. To enact a valid ordinance, the City must find in its charter
the power to do so, for said power cannot be presumed. Thus, in the case at bar,
it not appearing in the charter of the defendant City that it is authorized to
regulate and collect fees or taxes for the taking out of the City of the animals
and Articles listed in the aforesaid ordinance, the same is ultra vires, and
consequently null and void.
FACTS:
1. On 25 May 1946, the City of Iloilo promulgated Ordinance 28, series of
1946, due to emergency and possible shortage of food in Iloilo, regulating
the exit of food supply and labor animals and imposing permit fee
therefore. The law strictly prohibits to send outside Iloilo City, without first
obtaining the necessary license permit from the Mayor, Large cattle, pigs,
goats, sheep or the like; Domestic fowls, eggs; Fish, whether fresh, salted or
dried; Milkfish (semilla), bagoon (guinamos, crabs, prawn or the like);
Fruits, such as bananas, melon, papayas or the like.
2. The ordinance also fixes the fee for the issuance of license permit at P10 per
head of large cattle (whether alive or slaughtered); P5 each for pigs, goats,
and sheep (whether alive or slaughtered), P0.50 each for Chicken and other
domestic fowls (whether alive or dressed); P2.00 per hundred or P0.02 each
egg; P0.20 per kilo of Fish (whether fresh, dried or salted), P0.10 per kilo of
Bagoon (guinamos), P0.20 per kilo of crabs, prawn or the like, P2 per pot of
Milkfish (semilla), P2, per hundred bunches or P0.02 per bunch of bananas,
and P0.02 per kilo for other fruits.
3. The ordinance declares it unlawful for any carrier whether land, water or
air, to load any of said animals or articles without the corresponding permit.
than P100 Pesos, or more than P200 Pesos, imprisonment of not less than
10 days but not exceeding 6 months and to suffer subsidiary Imprisonment
in case of insolvency to pay the fine. Ordinance 30, passed on 4 June 1946,
amended Ordinance 28 by reducing the fees for each chicken from P.50 to
P.20, eggs from P2 to P1 per hundred, and for fish from P.20 to P.10 per
kilo, bananas from P2 to P1 per hundred bunches etc.
4. Under said ordinances, Serafin Saldaña had been paying, though under
protest, so-called fees on fish bought in the City of Iloilo and sent by him to
Manila by plane, during the period from 16 September 1946 to 6 December
1946, totalling P1,359.80.
5. On 17 September 1951, Saldana commenced the present proceedings by
complaint for the reimbursement to him of the said amount with interest, on
the ground that the ordinances in question were illegal, null and void,
having been enacted beyond the powers of the Municipal Board of the
City.
6. In its answer, the city contended that the imposition and collection of the
municipal licenses were within the power and duties of the Municipal
Board in the exercise of its police power.
7. The CFI Iloilo (Civil Case 2237) dismissed the complaint and upheld the
legality of Ordinance 28, Series of 1946, as amended by Ordinance 30,
same series of Iloilo City
ISSUE/s: WoN the “license fee” was validly imposed.
RULING: The appealed decision is hereby reversed and the City of Iloilo is hereby
ordered to reimburse the plaintiff the amount of P1,359.80, with legal interest and
costs.
RATIO:
1. A license fee represents the permission conceded to do an act is in the main
purpose of police power, and is not supposed to be imposed for revenue. A
property tax, on the other hand, is a tax in the ordinary sense, assessing
according to the value of property. Judging from the amount of fees fixed in
the ordinance, the so-called fees were in reality taxes for city revenue. As
such, they are unauthorized by the law or the City Charter, and are
also in contravention of Sections 2287 and 2629 of the Revised
Administrative Code.
2. The prohibition against taking animals and articles outside Iloilo without
mayor’s permit is in restraint of trade and a curtailment of the rights of the
owners of said animals and articles to freely sell and of prospective
purchasers to buy and dispose of them without the city limits in the ordinary
course of commerce and trade. The ordinance is ultra vires and, thus, is null
and void.
3. License taxes are of two kinds: one for the purpose of revenue, and the
other an exercise of police power.
 So-called license taxes are of two kinds. The one is a tax for the purpose of the Revised Administrative Code, which prohibit municipal
revenue. The other, which is, strictly speaking, not a tax at all but merely an corporations from imposing any tax in any from upon goods and
exercise of the police power, is a fee imposed for the purpose of merchandise carried into or out of the town or City.
regulation. . . . But a charge of a fixed sum which bears no relation to the
cost of and which is payable into the general revenue of the state is a tax
rather than an Exercise of the police power.” (Cooley, Taxation, 4th ed.,
Vol. I, pp. 97-98).
4. Fees were taxes for city revenue
a. Judging from the amount of the fees fixed in the ordinances, the
so-called fees were in reality taxes for city revenue.
b. For instance, the P10.00 fee for every head of large cattle, whether
alive or slaughtered, and the P5.00 fee for ever pig, goat, or sheep,
whether alive or slaughtered, cannot possibly be considered as
mere expense incurred for, or the cost of the inspection of each
animal and the issuance of the corresponding permit.
c. If a pig, goat, or sheep costs, say, P15 or even P20, then the P5.00
fee would constitute quite a considerable slice or portion of said
cost; and if the animals and articles listed in the ordinances were
sent out from the City of Iloilo in large quantities and numbers,
there would be no doubt that the fees collected would amount to a
sizable sum and augment greatly the revenues of the municipal
corporation, way in excess of the cost of inspections and the
issuance of the permits.
5. Ordinance fails to provide regulations or conditions under which
permit can be granted or denied
a. The ordinance fails to provide for any regulations or conditions
under which the permit can be granted or denied. The mayor has
absolute power to refuse to issue any permit, practically making
him absolute dictator over the subject matter.
b. With merely telling the applicant and prospective licensee that said
animals and articles are needed in the City of Iloilo, the mayor
could refuse to grant the permit. To realize the danger of the grant
of said absolute power is not difficult.
6. Ordinance is ultra vires; null and void
a. The ordinance, as amended, is ultra vires, enacted beyond the
general powers of a municipal corporation and not authorized by
the city’s charter, and consequently null and void; that the
prohibition against taking animals and articles out of the City of
Iloilo without permit of the mayor is in restraint of trade and a
curtailment of the rights of the owners of the said animals and
articles to freely sell and of prospective purchasers to buy and
dispose of them without the city limits in the ordinary course of
commerce and trade.
b. The fees imposed in the said ordinances are in fact taxes not only
unauthorized by the law or the charter of City, but also in
contravention of the provisions of Sections 2287 and 2629 of