American Bible Society v. City of Manila
REITERATIONFacts
The Antecedents: The American Bible Society (ABS), a foreign non-stock, non-profit religious corporation, has been distributing and selling bibles and gospel portions in the Philippines since 1898. In 1953, the City of Manila demanded that ABS secure a Mayor's permit and pay license fees for allegedly conducting a general merchandise business without the necessary permits from 1945 to 1953, totaling P5,821.45. ABS protested but paid under protest to avoid closure and penalties, subsequently filing a complaint to declare the relevant city ordinances illegal and unconstitutional, and to recover the paid amount. Procedural History: The City Treasurer demanded payment of permit and license fees under Ordinances Nos. 3000 and 2529, as amended. The trial court dismissed the case for lack of merit. The Court of Appeals certified the case to the Supreme Court as it involved only questions of law. The Petition: The appellant (ABS) contended that the ordinances were unconstitutional and illegal, that the authorizing statute was repealed, that presidential approval was required for such ordinances, and that its activities, being religious, could not be subjected to municipal ordinances under the guise of commercial activity.
Issue(s)
Whether the City of Manila Ordinances Nos. 3000 and 2529 were repealed by the enactment of Republic Act No. 409. Whether the requirement of a Mayor's permit under Ordinance No. 3000 is constitutional as applied to the American Bible Society. Whether the imposition of a municipal license fee based on gross sales under Ordinance No. 2529 is constitutional when applied to the sale of Bibles and religious literature.
Ruling
The Supreme Court reversed the decision of the lower court, ordering the City of Manila to refund the P5,891.45 collected from the American Bible Society. The Court held that Ordinance No. 2529, as amended, was inapplicable to the ABS as its activities were purely religious and not commercial, and imposing such a tax would impair the free exercise of religion. Ordinance No. 3000, while generally valid for business supervision, was also deemed inapplicable because the underlying business it sought to regulate (sale of bibles) was not subject to licensing by the city without infringing constitutional guarantees.
Ratio Decidendi
On Issue 1: The Court held that the ordinances were not repealed. Under the principles of statutory construction, when a legislature repeals a statute and simultaneously re-enacts it, all rights and liabilities accrued under the original statute are preserved. Republic Act No. 409 (the New Charter of Manila) re-enacted the taxing power over retail dealers in general merchandise previously found in the Revised Administrative Code. The Court applied the rule that re-enactment neutralizes the repeal, thus continuing the law in force without interruption. Consequently, the ordinances enacted under the old law remained valid and effective under the new Charter. On Issue 2: The Court ruled that Ordinance No. 3000, which requires a Mayor's permit for various businesses, is not unconstitutional on its face. It is a general regulatory measure intended for the supervision of sanitation, security, and public welfare. However, because the City is powerless to license or tax the religious activity of distributing Bibles (as determined in the subsequent issue), the permit requirement is inapplicable to the Society. Since the underlying activity cannot be taxed, requiring a permit to engage in that activity would be a redundant and improper restraint. Therefore, while the ordinance itself is valid for general commerce, it cannot be enforced against the Society's missionary work. On Issue 3: The Court held that the license fee under Ordinance No. 2529 is unconstitutional as applied to the Society. Relying on the landmark case of Murdock v. Pennsylvania, the Court explained that a license tax is a flat tax imposed on the exercise of a privilege granted by the Bill of Rights. The Court emphasized that 'the power to tax the exercise of a privilege is the power to control or suppress its enjoyment.' While religious groups are not exempt from general taxes like income or property tax, they cannot be required to pay a fee for the privilege of spreading their beliefs. The fact that some Bibles were sold at prices higher than cost does not convert the Society's missionary work into a commercial business, as the primary purpose remains the dissemination of religious information, which occupies a preferred position in the hierarchy of constitutional rights.
Main Doctrine
A municipal ordinance imposing a license tax on the sale of bibles and religious literature, even if sold at a price higher than cost, is invalid if it impairs the free exercise and enjoyment of religious profession and worship, as such activities are not commercial ventures but part of religious dissemination. However, a permit requirement for general business supervision, not directly taxing religious practice, may be valid if not unduly burdensome.