Heras v. City Treasurer of Quezon City
REITERATIONFacts
The Antecedents: Plaintiff, Antonio Heras, owner and operator of JD Transit and Taxi, a public utility, paid P2,582.50 in license fees and penalties to the City Treasurer of Quezon City for the period June 16, 1956, to December 31, 1956. These fees included mayor's permit for transportation with gasoline storage, municipal license fees for transportation by land, motor vehicle depository, storage of gasoline, and storage of crude oil, plus a penalty for late payment. Procedural History: Plaintiff paid the fees under protest, arguing that certain municipal license fees (specifically for transportation by land and motor vehicle depository) should not be imposed as the law does not empower municipal corporations to impose business taxes on such operations. The City Treasurer reiterated the demand for the full amount. Plaintiff demanded a refund of the total amount paid, which was refused. The Court of First Instance of Rizal ruled in favor of the plaintiff, ordering a refund and declaring certain sections of Quezon City Ordinance No. 2673 null and void. The defendant City Treasurer appealed. The Petition: The defendant-appellant contends that Section 12, Subsections (c) and (d) of the Revised Chapter of Quezon City (Republic Act No. 537) empowers the city council to enact ordinances for taxing, fixing license fees, and regulating businesses, including transportation companies and the storage and sale of gasoline. The plaintiff-appellee argues that these fees are not authorized and that later laws have superseded the City Charter.
Issue(s)
Whether Section 2, Chapter XVI, of Ordinance No. 2673 of Quezon City, imposing license fees for the storage of gasoline and crude oil, is valid. Whether Section 3, Chapter XXII, of Ordinance No. 2673 of Quezon City, imposing license fees on the transportation business, is valid in light of Republic Act No. 587. Whether the payment made by the plaintiff was entirely under protest.
Ruling
The judgment appealed from is affirmed, with modification. The defendant is ordered to refund to the plaintiff the sum of P1,162.50, instead of the P2,582.50 originally sought. The Court declared Section 2, Chapter XVI, and Section 3, Chapter XXII, of Ordinance No. 2673 of Quezon City null and void, but only with respect to the specific impositions contested by the plaintiff.
Ratio Decidendi
On the validity of license fees for storage of gasoline and crude oil (Section 2, Chapter XVI, Ordinance No. 2673): The Court held that the City Council's power under Section 12(c) of Republic Act No. 537 to regulate the storage and sale of gasoline and other combustible materials refers to the business of storing and selling such products, not to the mere storage for exclusive use and consumption by the business itself. The plaintiff's storage of gasoline and crude oil was exclusively for the operation of his public utility concern. Therefore, Section 2, Chapter XVI, of Ordinance No. 2673, which imposes a license fee on the business of storage, contravened the authority granted by the City Charter. The Court reiterated the principle that subordinate entities like municipal councils can exercise the power of taxation only to the extent specified by law and this power cannot be extended by strained implications. Legislative powers regarding taxes and licenses are not inherent in municipal corporations but are delegated and subject to strict construction. On the validity of license fees on the transportation business (Section 3, Chapter XXII, Ordinance No. 2673): The Court found merit in the plaintiff's contention that Section 17 of Republic Act No. 587 repealed Section 12(c) of Republic Act No. 537 (Revised Charter of Quezon City) insofar as it imposed license fees on the operation of motor vehicles. Section 17 of Republic Act No. 587 explicitly states that 'no other taxes or fees than those prescribed in this Act shall be imposed for the registration or operation, or on the owner of any motor vehicle, or for the exercise of the profession of chauffeur, by any municipal corporation, the provisions of any city charter to the contrary notwithstanding.' As Republic Act No. 587 is a later enactment, it must be deemed to have repealed pro tanto the provisions of the Quezon City Charter that allowed for such impositions. The business of transportation, comprising the operation of motor vehicles, is exclusively covered by the Revised Motor Vehicles Law, and municipal corporations are inhibited from imposing additional license fees on such operations. On whether the payment was entirely under protest: The Court clarified that based on the plaintiff's letter and the specific ground invoked for the protest, the payment under protest referred only to the two items of P750.00 (Transportation by land) and P412.50 (Motor Vehicle Depository), totaling P1,162.50. The plaintiff's communication explicitly stated that he was contesting the legality of the imposition on the ground that municipal corporations are inhibited from imposing license fees for the operation of motor vehicles for hire and compensation. This ground directly applied to the transportation business and the motor vehicle depository. Therefore, the other items covered by the remittance were considered voluntarily paid and not recoverable.
Main Doctrine
Municipal corporations can exercise the power of taxation only to the extent specified by law, and this power cannot be extended by strained implications. Furthermore, later enactments that conflict with earlier provisions of a city charter, even if the charter is a republic act, shall be deemed to have repealed the earlier provisions pro tanto.