American Bible Society vs. Manila (GR L-9637, 30 Aril !

9"7#
Facts: In the course of its ministry, the Philippine agency of the American
Bible Society has been distributing and selling bibles and/or gospel portions
thereof throughout the Philippines and translating the same into several
Philippine dialets. he acting !ity reasurer of "anila re#uired the society to
secure the corresponding "ayor$s permit and municipal license fees,
together %ith compromise covering the period from the &th #uarter of '(&)
to the *nd #uarter of '()+. he society paid such under protest, and ,led
suit #uestioning the legality of the ordinances under %hich the fees are being
collected.
Issue: -hether the municipal ordinances violate the freedom of religious
profession and %orship.
.eld: A ta/ on the income of one %ho engages in religious activities is
di0erent from a ta/ on property usedor employed in connection %ith those
activities. It is one thing to impose a ta/ on the income or property of
apreacher, and another to e/act a ta/ for him for the privilege of delivering a
sermon. he po%er to ta/ thee/ercise of a privilege is the po%er to control or
suppress its en1oyment. 2ven if religious groups and the pressare not
altogether free from the burdens of the government, the act of distributing
and selling bibles is purelyreligious and does not fall under Section *3 4e5 of
the a/ !ode 4!A &665. he fact that the price of bibles,etc. are a little higher
than actual cost of the same does not necessarily mean it is already engaged
in businessfor pro,t. 7rdinance *)*( and +888 are not applicable to the
Society.
$ommissioner vs. Lin%ayen G&l' (lectric (GR L-)377!, * A&%&st
!9++#
Facts: 9ingayen :ulf 2lectric Po%er operates an electric po%er plant serving
the municipalities of 9ingayenand Binmaley, Pangaisnan, pursuant to
municipal franchise granted it by the respective municipal councils.he
franchises provided that the grantee shall pay #uarterly to the Provincial
reasury of Pangasinan '; ofthe gross earnings obtained through the
privilege for the ,rst *8 years 4from '(&65, and *; during theremaining ')
years of the life of the franchise. In '(&<, the Philippine President approved
the franchise 4=A+<&+5. In '()), the BI= assessed and demanded against the
company de,ciency franchise ta/es andsurcharges for the years '(&6 to
'()& applying the franchise ta/ rate of ); on gross receipts from '(&<
to'()&. he company as>ed for a reinvestigation, %hich %as denied.
Issue ?'@: -hether the !ourt can in#uire into the %isdom of the Act.
.eld ?'@: he !ourt does not have the authority to in#uire into the %isdom of
the Act. !harters or special la%s granted and enacted by the 9egislature are
in the nature of private contracts. hey do not constitute a partof the
machinery of the general government. hey are usually adopted after careful
consideration of theprivate rights in relation %ith the resultant bene,ts of the
State. In passing a special charter, the attention ofthe 9egislature is directed
to the facts and circumstances %hich the act or charter is intended to meet.
he9egislature considers and ma>es provision for all the circumstance of the
particular case. he !ourt ought notto disturb the ruling of the !ourt of a/
Appeals on the constitutionality of the la% in #uestion.
Issue ?*@: -hether a rate belo% ); on gross income violate the uniformity of
ta/ clause in the !onstitution.
.eld ?*@: A ta/ is uniform %hen it operates %ith the same force and e0ect in
every place %here the sub1ect o,t is found. Aniformity means that all
property belonging to the same class shall be ta/ed ali>e. he legislaturehas
the inherent po%er not only to select the sub1ects of ta/ation but to grant
e/emptions. a/ e/emptionshave never been deemed violative of the e#ual
protection clause. .erein, the ); franchise ta/ rate providedin Section *)(
of the a/ !ode %as never intended to have a universal application. Section
*)( e/presslyallo%s the payment of ta/es at rates lo%er than ); %hen the
charter granting the franchise precludes the imposition of a higher ta/. =A
+<&+ did not only ,/ and specify a franchise ta/ of *; on its gross
receipts,but made it in lieu of any and all ta/es, all la%s to the contrary
not%ithstanding. B
he company, hence, is not liable for de,ciency ta/es.
$,&rc,ill vs. $oncecion (GR !!"7), )) Setember !9!6#
Facts: Section '88 of Act *++( 4promulgated '('&5 imposed an annual ta/ of
P& per s#uare meter uponelectric signs, billboards, and spaces used for
posting or displaying temporary signs, and all signs displayedon premises
not occupied by buildings. he section %as amended by Act *&+*, reducing
the ta/ to P* pers#uare meter. he ta/es imposed by Act *&+* %ere rati,ed
by the AS !ongress on & "arch '('). Francis A.!hurchill and Ste%art ait, coC
partners in "ercantile Advertising Agency, o%ed a billboard to %hich
they%ere ta/ed at P'8&. he ta/ %as paid under protest. !hurchill and ait
instituted the action to recover the amount.
Issue: -hether the statute or ta/ is void for lac> of uniformity.
.eld: Aniformity in ta/ation means that all ta/able articles or >inds of
property, of the same class, shall beta/ed at the same rate. It does not mean
that lands, chattels, securities, incomes, occupations, franchises,privileges,
necessities, and lu/uries shall all be assessed at the same rate. Di0erent
articles may be ta/ed atdi0erent amounts provided the rate is uniform on the
same class every%here, %ith all people, at all times..erein, the Act imposes
a ta/ of P* per s#uare meter or a fraction thereof upon every electric sign,
billboard,etc., %herever found in the Philippine Islands. he rule of ta/ation
upon such signs is uniform throughout the islands. he rule does not re#uire
ta/es to be graded according to the value of the sub1ect4s5 upon %hich
theyare imposed, especially those levied as privilege or occupation ta/es.
(astern -,eatrical $o. vs. Al'onso (GR L-!!0*, 3! May !9**#
Facts: he municipal board of "anila enacted 7rdinance *()< 4series of
'(&65 imposing a fee on the price of every admission tic>et sold by
cinematograph theaters, vaudeville companies, theatrical sho%s and bo/ing
e/hibitions, in addition to fees imposed under Sections 6++ and 33< of
7rdinance '688. 2astern heatrical !o., among others, #uestion the validity
of ordinance, on the ground that it is unconstitutional for being contrary to
the provisions on uniformity and e#uality of ta/ation and the e#ual
protection of the la%s in as much as the ordinance does not ta/ other >inds
of amusement, such as race trac>s, coc>pits, cabarets, concert halls,
circuses, and other places of amusement.
Issue: -hether the ordinance violates the rule on uniformity and e#uality of
ta/ation.
.eld: 2#uality and uniformity in ta/ation means that all ta/able articles or
>inds of property of the same classs hall be ta/ed at the same rate. he
ta/ing po%er has the authority to ma>e reasonable and natural
classi,cations for purposes of ta/ationE and the theater companies cannot
point out %hat places of amusement ta/ed by the ordinance do not
constitute a class by themselves and %hich can be confused %ith those not
included in the ordinance. he fact that some places of amusement are not
ta/ed %hile others, li>e the ones herein, are ta/ed is no argument at all
against the e#uality and uniformity of the ta/ imposition.
Reyes vs. Alman.or (GR *9+39-*6, )6 Aril !99!#
Facts: FB9, 2dmundo and "ilagros =eyes are o%ners of parcels of land in
"anila %hich are leased and occupied as d%elling sites by tenants. In '(3',
=A 6+)( %as passed prohibiting an increase of monthly rentals of d%elling
units or of land on %hich another d%elling is located for one year after
e0ectivity for rentals not e/ceeding P+88 but allo%ing an increase of rent
thereafter by not more than '8;. he Act also suspended the operation of
Article '63+ of the !ivil !ode 4e1ectment of lessess5. PD *8 amended =A
6+)( by absolutely prohibiting the increase and inde,nitely suspending
Article '63+. he =eyeses, thus, %ere precluded from raising the rentals and
from e1ecting the tenants. In '(3+, the !ity Assessor of "anila reclassi,ed
and reassessed the value of the properties based on the schedule of mar>et
values duly revie%ed by the Secretary of Finance. As it entailed an increase
of the corresponding ta/ rates, the =eyeses ,led a memorandum of
disagreement %ith the Board of a/ Assessment Appeals and averring therein
that the reassessments %ere e/cessive, un%arranted, une#uitable,
con,scatory and unconstitutional inasmuch as the ta/es imposed e/ceeded
the annual income derived from their propertiesE and that the income
approach should have been used in determining land values instead of the
comparative sales approach %hich the assessor adopted.
Issue: -hether the reassessment is une#uitable.
.eld: a/ation is e#uitable %hen its burden falls on those better able to pay.
a/ation is progressive %hen itsrate goes up depending on the resources of
the person a0ected. a/es are uniform %hen all ta/able articles or
>inds of property of the same class are ta/ed at the same rate. he ta/ing
po%er has the authority to ma>e reasonable and natural classi,cation for
purposes of ta/ation. 9a%s should operate e#ually and uniformly, ho%ever,
on all persons under similar circumstances or that all persons must be
treated in the same manner, the conditions not being di0erent both in the
privileges conferred and liabilities imposed. Finally, under the =eal Property
a/ !ode 4PD &6&5, property must be appraised at its current and fair mar>et
value. he mar>et value of the properties covered by PD *8, thus cannot be
e#uated %ith the mar>et value of properties not so covered. Such property
covered by PD *8 has naturally a much lesser mar>et value in vie% of the
rental restrictions. Although ta/es are the lifeblood of the government and
should be collected %ithout unnecessary hindrance, such collection should
be made in accordance %ith la% as any arbitrariness %ill negate the very
reason for government itself. As the =eyeses are burdened by the =ent
FreeGe 9a%s 4=A 6+)( and PD *85, they should not be penaliGed by the same
government by the imposition of e/cessive ta/es they cancan ill a0ord and
%ould eventually result in the forfeiture of their properties, under the
principle of social 1ustice.
$a%ayan (lectric /o0er 1 Li%,t $o. vs. $ommissioner (GR L-60!)6,
)" Setember !9+"#
Facts: !agayan 2lectric is a holder of a legislative franchise under =epublic
Act +*&3 %here payment of +;ta/ on gross earnings is in lieu of all ta/es
and assessments upon privileges, etc. In '(6<, =A )&+' amendedthe
franchise by ma>ing all corporate ta/payers liable for income ta/ e/cept
those indicated in paragraph 4c54'5 of Section *& of the a/ !ode. In '(6(,
through =A 68*8, its franchise %as e/tended to t%o other to%nsand the ta/
e/emption %as reenacted. In '(3+, the !ommissioner re#uired the company
to pay de,ciencyincome ta/es for '(6< to '(3'.
Issue: -hether the %ithdra%al of the franchise$s ta/ e/emption violates the
nonCimpairment clause of the !onstitution.
.eld: !ongress could impair the company$s legislative franchise by ma>ing it
liable for income ta/. he !onstitution provides that a franchise is sub1ect to
amendment, alteration or repeal by the !ongress %hen the public interest so
re#uires. =A +*&3 itself provides that the franchise is sub1ect to amendment,
etc. by !ongress. he enactment of =A )&+' had the e0ect of %ithdra%ing
the company$s e/emption from income ta/. he e/emption %as restored by
the enactment of =A 68*8. he company is liable only for the income ta/ for
the period of ' Fanuary to + August '(6(.
$asanovas vs. 2or3 (GR L-3*73, )) Marc, !907#
Facts: In '<(3, the Spanish :overnment, in accordance %ith the provisions of
the royal decree of '& may'<63, granted F. !asanovas certain mines in the
province of Ambos !amarines, of %hich mines the latter is no% the o%ner.
hat these %ere validly perfected mining concessions granted to prior to ''
April '<(( is conceded. hey %ere so considered by the !ollector of Internal
=evenue and %ere by him said to fall %ithin the provisions of Section '+& of
Act ''<( 4Internal =evenue Act5. he !ommissioner, FH7 S. .ord, imposed
upon these properties the ta/ mentioned in Section '+&, %hich !asanovas
paid under protest.
Issue: -hether Section '+& of Act ''<( is valid.
.eld: he deed constituted a contract bet%een the Spanish :overnment and
!asanovas. he obligation in thecontract %as impaired by the enactment of
Section '+& of the Internal =evenue 9a, thereby infringing the provisions of
Section ) of the Act of !ongress of ' Fuly '(8*. Furthermore, the section
conIicts %ith Section 68 of the Act of !ongress of ' Fuly '(8*, %hich indicate
that concessions can be cancelled only by reason of illegality in the
procedure by %hich they %ere obtained, or for failure to comply %ith the
conditions prescribed as re#uisites for their retention in the la%s under %hich
they %ere granted. he grounds %ere not sho%n or claimed in the case. As to
the allegation that the section violates uniformity of ta/ation, the !ourt
found it unnecessary to consider the claim in vie% of the result at %hich the
!ourt has arrived.
Lla3oc vs. $ommissioner (GR L-!9)0!, !6 4&ne !96"#
Facts: In '()3, the "B 2state Inc. of Bacolod !ity donated P'8,888 in cash to
the parish priest of Jictorias, Hegros 7ccidentalE the amount spent for the
construction of a ne% !atholic !hurch in the locality, as intended. In'()<, "B
2state ,led the donor$s gift ta/ return. In '(68, the !ommissioner issued an
assessment for donee$s gift ta/ against the parish. he priest lodged a
protest to the assessment and re#uested the %ithdra%al thereof.
Issue: -hether the !atholic Parish is ta/ e/empt.
.eld: he phrase Be/empt from ta/ationK should not be interpreted to mean
e/emption from all >inds ofta/es. he e/emption is only from the payment of
ta/es assessed on such properties as property ta/es ascontradistinguished
from e/cise ta/es. A donee$s gift ta/ is not a property ta/ but an e/cise ta/
imposed on thetransfer of property by %ay of gift inter vivos. It does not rest
upon general o%nership, but an e/cise upon the use made of the properties,
upon the e/ercise of the privilege of receiving the properties. he imposition
of such e/cise ta/ on property used for religious purpose do not constitute an
impairment of the !onstitution. he ta/ e/emption of the parish, thus, does
not e/tend to e/cise ta/es.
Abra 5alley $olle%e vs. A6&ino (GR L-390+6, !" 4&ne !9++#
Facts: Abra Jalley !ollege rents out the ground Ioor of its college building to
Horthern "ar>eting!orporation %hile the second Ioor thereof is used by the
Director of the !ollege for residential purposes. he municipal and provincial
treasurers served upon the !ollege a Bnotice of seiGureK and later a Bnotice
of saleK due to the alleged failure of the !ollege to pay real estate ta/es and
penalties thereon. he school ,led suit to annul said notices, claiming that it
is ta/Ce/empt.
Issue: -hether the !ollege is e/empt from ta/es.
.eld: -hile the !ourt allo%s a more liberal and nonCrestrictive interpretation
of the phrase Be/clusively used for educational purposes,K reasonable
emphasis has al%ays been made that e/emption e/tends to facilities %hich
are incidental to and reasonably necessary for the accomplishment of the
main purposes. -hile the second Ioor$s use, as residence of the director, is
incidental to educationE the lease of the ,rst Ioor cannot by any stretch of
imagination be considered incidental to the purposes of education. he test
of e/emption from ta/ation is the use of the property for purposes mentioned
in the !onstititution.
2errera vs. 7&e.on $ity Boar3 o' Assessment Aeals (GR L-!")70,
30 Setember !96!#
Facts: In '()*, the Director of the Bureau of .ospitals authoriGed Fose J.
.errera and 2ster 7changco .errera to establish and operate the St.
!atherine$s .ospital. In '()+, the .erreras sent a letter to the LueGon !ity
Assessor re#uesting e/emption from payment of real estate ta/ on the
hospital, stating that the same %as established for charitable and
humanitarian purposes and not for commercial gain. he e/emption %as
granted e0ective years '()+ to '()). In '()), ho%ever, the Assessor
reclassi,ed the properties from Be/emptK to Bta/ableK e0ective '()6, as it
%as ascertained that out +* beds in the hospital, '* of %hich are for payC
patients. A school of mid%ifery is also operated %ithin the premises of the
hospital.
Issue: -hether St. !atherine$s .ospital is e/empt from reallty ta/.
.eld: he admission of payCpatients does not detract from the charitable
character of a hospital, if all its funds are devoted e/clusively to the
maintenance of the institution as a public charity. he e/emption in favor of
property used e/clusively for charitable or educational purpose is not limited
to property actually indispensable therefore, but e/tends to facilities %hich
are incidental to and reasonably necessary for the accomplishment of said
purpose, such as in the case of hospitals CC a school for training nursesE a
nurses$ homeE property used to provide housing facilities for interns, resident
doctors, superintendents and other members of the hospital sta0E and
recreational facilities for student nurses, interns and residents. -ithin the
purvie% of the !onstitution, St. !atherine$s .ospital is a charitable institution
e/empt from ta/ation.
Bis,o o' 8&eva Se%ovia vs. /rovincial Boar3 o' 9locos 8orte (GR
)7"++, 3! :ecember !9)7#
Facts: he =oman !atholic Apostolic !hurch is the o%ner of a parcel of land
in San Hicolas, Ilocos Horte.7n the south side is a part of the !hurch yard,
the convent and an ad1acent lots used for a vegetable garden in%hich there
is a stable and a %ell for the use of the convent. In the center is the
remainder of the churchyard and the !hurch. 7n the north side is an old
cemetery %ith its t%o %alls still standing, and a portion %here formerly stood
a to%er. he provincial board assessed land ta/ on lots comprising the north
and south side, %hich the church paid under protest. It ,led suit to recover
the amount.
Issue: -hether the lots are covered by the !hurch$s ta/ e/emption.
.eld: he e/emption in favor of the convent in the payment of land ta/ refers
to the home of the priest %ho presides over the church and %ho has to ta>e
care of himself in order to discharge his duties. he e/emption includes not
only the land actually occupied by the !hurch but also the ad1acent ground
destined to the ordinary incidental uses of man. A vegetable garden, thus,
%hich belongs to a convent, %here its use is limited to the necessity of the
priest, comes under the e/emption. Further, land used as a lodging house by
the people %ho participate in religious festivities, %hich constitutes an
incidental use in religious functions, li>e%ise comes %ithin the e/emption. It
cannot be ta/ed according to its former use, i.e. a cemetery.
$ommisioner vs. Bis,o o' Missionery :istrict o' t,e /,iliine
9slan3s (GR L-!9**", 3! A&%&st !96"#
Facts: he "issioner y District of the Philippine Islands, of the Protestant
2piscopal !hurch in the AnitedStates, o%ns and operates the St. 9u>e$s
.ospital in LueGon !ity, the Brent .ospital in Mamboanga !ity, and the St.
Stephen$s .igh School in "anila. In '()3 to '()(, the "issionary District
received various shipments of materials, supplies, e#uipment and other
articles intended for use in the construction and operation of the ne% St.
9u>e$s .ospital. 7n these shipments, the !ommissioner collected
compensation ta/. he "issionary District ,led claims for refund, but %hich
%as denied by the !ommissioner on the ground that St. 9u>e$s .ospital %as
not a charitable institution and therefore %as not e/empt from ta/es.
Issue: -hether the shipments for St. 9u>e$s .ospital are ta/Ce/empt.
.eld: Ander =A '('6, %hich covers ta/es on donations in any form and all
articles imported into the Philippines, re#uires that the imported articles ush
have been donated, the donee must be a duly incorporated or established
international civic organiGation, religious or charitable society or institution
for civic, religious or charitable purposesE and the articles must have been
donated for the use of the organiGation, society or institutionE or for free
distribution and not for sale, barter or hire. As the la% does not distinguish or
#ualify the en1oyment or the e/emption 4as the Secretary of Finance did in
Departent 7rder '<, series of '()<5, the admission of pay patients does not
detract from the charitable character of a hospital, if its funds are devoted
e/clusively to the maintenance of the institution. hus, the shipments are ta/
e/empt.