G.R. No.

L-24756 October 31, 1968 It would be an undue and unwarranted emasculation of the above power thus granted if defendant-
appellant were to be sustained in his contention that no such statutory authority for the enactment
of the challenged ordinance could be discerned from the language used in the amendatory act.
CITY OF BAGUIO, plaintiff-appellee,
That is about all that needs to be said in upholding the lower court, considering that the City of
vs.
Baguio was not devoid of authority in enacting this particular ordinance. As mentioned at the
FORTUNATO DE LEON, defendant-appellant.
outset, however, defendant-appellant likewise alleged procedural missteps and asserted that the
challenged ordinance suffered from certain constitutional infirmities. To such points raised by him,
FERNANDO, J.: we shall now turn.

In this appeal, a lower court decision upholding the validity of an ordinance1 of the City of Baguio 1. Defendant-appellant makes much of the alleged lack of jurisdiction of the City Court of Baguio
imposing a license fee on any person, firm, entity or corporation doing business in the City of in the suit for the collection of the real estate dealer's fee from him in the amount of P300. He
Baguio is assailed by defendant-appellant Fortunato de Leon. He was held liable as a real estate contended before the lower court, and it is his contention now, that while the amount of P300
dealer with a property therein worth more than P10,000, but not in excess of P50,000, and sought was within the jurisdiction of the City Court of Baguio where this action originated, since
therefore obligated to pay under such ordinance the P50 annual fee. That is the principal question. the principal issue was the legality and constitutionality of the challenged ordinance, it is not such
In addition, there has been a firm and unyielding insistence by defendant-appellant of the lack of City Court but the Court of First Instance that has original jurisdiction.
jurisdiction of the City Court of Baguio, where the suit originated, a complaint having been filed
against him by the City Attorney of Baguio for his failure to pay the amount of P300 as license fee
There is here a misapprehension of the Judiciary Act. The City Court has jurisdiction. Only
covering the period from the first quarter of 1958 to the fourth quarter of 1962, allegedly, inspite
recently, on September 7, 1968 to be exact, we rejected a contention similar in character in
of repeated demands. Nor was defendant-appellant agreeable to such a suit being instituted by
Nemenzo v. Sabillano.4 The plaintiff in that case filed a claim for the payment of his salary before
the City Treasurer without the consent of the Mayor, which for him was indispensable. The lower
the Justice of the Peace Court of Pagadian, Zamboanga del Sur. The question of jurisdiction was
court was of a different mind.
raised; the defendant Mayor asserted that what was in issue was the enforcement of the decision
of the Commission of Civil Service; the Justice of the Peace Court was thus without jurisdiction to
In its decision of December 19, 1964, it declared the above ordinance as amended, valid and try the case. The above plea was curtly dismissed by Us, as what was involved was "an ordinary
subsisting, and held defendant-appellant liable for the fees therein prescribed as a real estate money claim" and therefore "within the original jurisdiction of the Justice of the Peace Court where
dealer. Hence, this appeal. Assume the validity of such ordinance, and there would be no question it was filed, considering the amount involved." Such is likewise the situation here.
about the liability of defendant-appellant for the above license fee, it being shown in the partial
stipulation of facts, that he was "engaged in the rental of his property in Baguio" deriving income
Moreover, in City of Manila v. Bugsuk Lumber Co.,5 a suit to collect from a defendant this license
therefrom during the period covered by the first quarter of 1958 to the fourth quarter of 1962.
fee corresponding to the years 1951 and 1952 was filed with the Municipal Court of Manila, in view
of the amount involved. The thought that the municipal court lacked jurisdiction apparently was
The source of authority for the challenged ordinance is supplied by Republic Act No. 329, not even in the minds of the parties and did not receive any consideration by this Court.
amending the city charter of Baguio2 empowering it to fix the license fee and regulate "businesses,
trades and occupations as may be established or practiced in the City."
Evidently, the fear is entertained by defendant-appellant that whenever a constitutional question
is raised, it is the Court of First Instance that should have original jurisdiction on the matter. It does
Unless it can be shown then that such a grant of authority is not broad enough to justify the not admit of doubt, however, that what confers jurisdiction is the amount set forth in the complaint.
enactment of the ordinance now assailed, the decision appealed from must be affirmed. The task Here, the sum sought to be recovered was clearly within the jurisdiction of the City Court of Baguio.
confronting defendant-appellant, therefore, was far from easy. Why he failed is understandable,
considering that even a cursory reading of the above amendment readily discloses that the
Nor could it be plausibly maintained that the validity of such ordinance being open to question as
enactment of the ordinance in question finds support in the power thus conferred.
a defense against its enforcement from one adversely affected, the matter should be elevated to
the Court of First Instance. For the City Court could rely on the presumption of the validity of such
Nor is the question raised by him as to the validity thereof novel in character. In Medina v. City of ordinance,6 and the mere fact, however, that in the answer to such a complaint a constitutional
Baguio,3 the effect of the amendatory section insofar as it would expand the previous power vested question was raised did not suffice to oust the City Court of its jurisdiction. The suit remains one
by the city charter was clarified in these terms: "Appellants apparently have in mind section 2553, for collection, the lack of validity being only a defense to such an attempt at recovery. Since the
paragraph (c) of the Revised Administrative Code, which empowers the City of Baguio merely to City Court is possessed of judicial power and it is likewise axiomatic that the judicial power
impose a license fee for the purpose of rating the business that may be established in the city. embraces the ascertainment of facts and the application of the law, the Constitution as the highest
The power as thus conferred is indeed limited, as it does not include the power to levy a tax. But law superseding any statute or ordinance in conflict therewith, it cannot be said that a City Court
on July 15, 1948, Republic Act No. 329 was enacted amending the charter of said city and adding is bereft of competence to proceed on the matter. In the exercise of such delicate power, however,
to its power to license the power to tax and to regulate. And it is precisely having in view this the admonition of Cooley on inferior tribunals is well worth remembering. Thus: "It must be evident
amendment that Ordinance No. 99 was approved in order to increase the revenues of the city. In to any one that the power to declare a legislative enactment void is one which the judge, conscious
our opinion, the amendment above adverted to empowers the city council not only to impose a of the fallibility of the human judgment, will shrink from exercising in any case where he can
license fee but also to levy a tax for purposes of revenue, more so when in amending section 2553 conscientiously and with due regard to duty and official oath decline the responsibility." 7 While it
(b), the phrase 'as provided by law' has been removed by section 2 of Republic Act No. 329. The remains undoubted that such a power to pass on the validity of an ordinance alleged to infringe
city council of Baguio, therefore, has now the power to tax, to license and to regulate provided that certain constitutional rights of a litigant exists, still it should be exercised with due care and
the subjects affected be one of those included in the charter. In this sense, the ordinance under circumspection, considering not only the presumption of validity but also the relatively modest rank
consideration cannot be considered ultra vires whether its purpose be to levy a tax or impose a of a city court in the judicial hierarchy.
license fee. The terminology used is of no consequence."
2. To repeat the challenged ordinance cannot be considered ultra vires as there is more than unreasonable and oppressive" and that there is a failure to observe the mandate of equal
ample statutory authority for the enactment thereof. Nonetheless, its validity on constitutional protection. A reading of the ordinance will readily disclose their inherent lack of plausibility.
grounds is challenged because of the allegation that it imposed double taxation, which is
repugnant to the due process clause, and that it violated the requirement of uniformity. We do not
3. That would dispose of all the errors assigned, except the last two, which would predicate a
view the matter thus.
grievance on the complaint having been started by the City Treasurer rather than the City Mayor
of Baguio. These alleged errors, as was the case with the others assigned, lack merit.
As to why double taxation is not violative of due process, Justice Holmes made clear in this
language: "The objection to the taxation as double may be laid down on one side. ... The 14th
In much the same way that an act of a department head of the national government, performed
Amendment [the due process clause] no more forbids double taxation than it does doubling the
within the limits of his authority, is presumptively the act of the President unless reprobated or
amount of a tax, short of confiscation or proceedings unconstitutional on other grounds."8With that
disapproved,18 similarly the act of the City Treasurer, whose position is roughly analogous, may
decision rendered at a time when American sovereignty in the Philippines was recognized, it
be assumed to carry the seal of approval of the City Mayor unless repudiated or set aside. This
possesses more than just a persuasive effect. To some, it delivered the coup de grace to the
should be the case considering that such city official is called upon to see to it that revenues due
bogey of double taxation as a constitutional bar to the exercise of the taxing power. It would seem
the City are collected. When administrative steps are futile and unavailing, given the stubbornness
though that in the United States, as with us, its ghost as noted by an eminent critic, still stalks the
and obduracy of a taxpayer, convinced in good faith that no tax was due, judicial remedy may be
juridical state. In a 1947 decision, however,9 we quoted with approval this excerpt from a leading
resorted to by him. It would be a reflection on the state of the law if such fidelity to duty would be
American decision:10 "Where, as here, Congress has clearly expressed its intention, the statute
met by condemnation rather than commendation.
must be sustained even though double taxation results."

So, much for the analytical approach. The conclusion thus reached has a reinforcement that
At any rate, it has been expressly affirmed by us that such an "argument against double taxation
comes to it from the functional and pragmatic test. If a city treasurer has to await the nod from the
may not be invoked where one tax is imposed by the state and the other is imposed by the city ...,
city mayor before a municipal ordinance is enforced, then opportunity exists for favoritism and
it being widely recognized that there is nothing inherently obnoxious in the requirement that license
undue discrimination to come into play. Whatever valid reason may exist as to why one taxpayer
fees or taxes be exacted with respect to the same occupation, calling or activity by both the state
is to be accorded a treatment denied another, the suspicion is unavoidable that such a
and the political subdivisions thereof."11
manifestation of official favor could have been induced by unnamed but not unknown
consideration. It would not be going too far to assert that even defendant-appellant would find no
The above would clearly indicate how lacking in merit is this argument based on double taxation. satisfaction in such a sad state of affairs. The more desirable legal doctrine therefore, on the
assumption that a choice exists, is one that would do away with such temptation on the part of
both taxpayer and public official alike.
Now, as to the claim that there was a violation of the rule of uniformity established by the
constitution. According to the challenged ordinance, a real estate dealer who leases property
worth P50,000 or above must pay an annual fee of P100. If the property is worth P10,000 but not WHEREFORE, the lower court decision of December 19, 1964, is hereby affirmed. Costs against
over P50,000, then he pays P50 and P24 if the value is less than P10,000. On its face, therefore, defendant-appellant.
the above ordinance cannot be assailed as violative of the constitutional requirement of uniformity.
In Philippine Trust Company v. Yatco,12 Justice Laurel, speaking for the Court, stated: "A tax is
considered uniform when it operates with the same force and effect in every place where the
subject may be found."

There was no occasion in that case to consider the possible effect on such a constitutional
requirement where there is a classification. The opportunity came in Eastern Theatrical Co. v.
Alfonso.13 Thus: "Equality and uniformity in taxation means that all taxable articles or kinds of
property of the same class shall be taxed at the same rate. The taxing power has the authority to
make reasonable and natural classifications for purposes of taxation; ..." About two years later,
Justice Tuason, speaking for this Court in Manila Race Horses Trainers Assn. v. De la Fuente14
incorporated the above excerpt in his opinion and continued: "Taking everything into account, the
differentiation against which the plaintiffs complain conforms to the practical dictates of justice and
equity and is not discriminatory within the meaning of the Constitution."

To satisfy this requirement then, all that is needed as held in another case decided two years later,
15
is that the statute or ordinance in question "applies equally to all persons, firms and corporations
placed in similar situation." This Court is on record as accepting the view in a leading American
case16 that "inequalities which result from a singling out of one particular class for taxation or
exemption infringe no constitutional limitation."17

It is thus apparent from the above that in much the same way that the plea of double taxation is
unavailing, the allegation that there was a violation of the principle of uniformity is inherently
lacking in persuasiveness. There is no need to pass upon the other allegations to assail the validity
of the above ordinance, it being maintained that the license fees therein imposed "is excessive,