G.R. No. L-28138 August 13, 1986 MATALIN COCONUT CO., INC COUNCIL OF MALA ANG !t "#. vs.

THE MUNICIPAL

FACT$% On 1966, the Municipal Council of Malabang, Lanao del Sur enacted Municipal Ordinance No. 45-46, entitled !N O"#$N!NC% $M&OS$N' ! &OL$C% $NS&%C($ON )%% O) &.*+ &%" S!C, O) C!SS!-! S(!"C. &"O#/C%# !N# S.$&&%# O/( O) (.% M/N$C$&!L$(0 O) M!L!1!N' !N# $M&OS$N' &%N!L($%S )O" -$OL!($ONS (.%"%O). (he ordinance 2ade it unla3ful for an4 per5on, co2pan4 or group of per5on5 to 5hip out of the Municipalit4 of Malabang, ca55a6a 5tarch or flour 3ithout pa4ing to the Municipal (rea5urer or hi5 authori7ed repre5entati6e5 the corre5ponding fee fi8ed b4 9the: ordinance. $t 5hall be paid b4 the 5hipper before the 5a2e i5 tran5ported or 5hipped out5ide the 2unicipalit4. !n4 per5on or co2pan4 or group of indi6idual5 6iolating the ordinance i5 liable to a fine of not le55 than &1++.++, but not 2ore than &1,+++.++, and to pa4 &l.++ for e6er4 5ac; of flour being illegall4 5hipped out5ide the 2unicipalit4, or to 5uffer i2pri5on2ent of <+ da45, or both, in the di5cretion of the court. A &!t't'o( )o* +!,#"*"to*- *!#'!) 3a5 filed b4 Matalin Coconut 3ith the C)$ of Lanao del Sur again5t the Municipalit4, the Municipal Ma4or and the Municipal (rea5urer of Malabang, Lanao del Sur. !lleging a2ong other5 that the ordinance i5 not onl4 ultra vires, being 6iolati6e of "epublic !ct No. <<64, but al5o unrea5onable, oppre55i6e and confi5cator4, the petitioner pra4ed that the ordinance be declared null and 6oid ab initio, and that the Municipal (rea5urer be ordered to refund the a2ount5 paid b4 petitioner under the ordinance. (he petitioner al5o pra4ed that during the pendenc4 of the action, a &*!#'.'("*- '(/u(,t'o( be i55ued en=oining the re5pondent5 fro2 enforcing the ordinance. $t 3a5 denied. 1ecau5e, it 3a5 al5o affected b4 the ta8 i2po5ed, &ura;an &lantation Co2pan4 3a5 granted lea6e to inter6ene in the action. C)$ declared that the ordinance 3a5 null and 6oid and ordered the Municipal (rea5urer to refund to the petitioner the pa42ent5 it 2ade and en=oining and prohibiting the re5pondent5 fro2 collecting the

ta8. (he (C i55ued a 3rit of preli2inar4 2andator4 in=unction, upon 2otion of petitioner, re>uiring the re5pondent Municipal (rea5urer to depo5it 3ith the &N1 $ligan 1ranch, in the na2e of the Municipalit4 of Malabang, 3hate6er a2ount5 the petitioner had alread4 paid or 5hall pa4 pur5uant to the ordinance in >ue5tion up to and until final ter2ination of the ca5e? the depo5it 3a5 not to be 3ithdra3n fro2 the 5aid ban; 3ithout an4 order fro2 the court. On M" b4 re5pondent5, the 3rit 3a5 5ub5e>uentl4 2odified, to re>uire the depo5it onl4 of a2ount5 paid fro2 the effecti6it4 of the 3rit up to and until the final ter2ination of the 5uit..! 2otion to di52i55 appeal filed b4 Matalin, 3a5 denied b4 thi5 court. "e5pondent5 filed a 2otion to di55ol6e the 3rit of preli2inar4 2andator4 in=unction i55ued b4 the (C 3hich 3a5 al5o denied. .ence thi5 petition. I$$UE$% 91: @ON the action for declarator4 relief 3a5 proper in ad=udicating the 2one4 clai2 of the petitioner 9<:@ON the 2unicipal ordinance i5 6alid HEL0% Respondents contention- In an action for declaratory relief, all the court can do is to construe the validity of the ordinance in question and declare the rights of those affected thereby. The court cannot declare the ordinance illegal and at the same time order the refund to petitioner of the amounts paid under the ordinance, without requiring petitioner to file an ordinary action to claim the refund after the declaratory relief judgment has become final. nder Rule !" of the R#, the court may advise the parties to file the proper pleadings and convert the hearing into an ordinary action, which was not done in this case. 1. 1E$. /nder Sec. 6 of "ule 64, the action for declarator4 relief 2a4 be con6erted into an ordinar4 action and the partie5 allo3ed to file 5uch pleading5 a5 2a4 be nece55ar4 or proper, if before the final ter2ination of the ca5e a breach or 6iolation of an...ordinance, 5hould ta;e place. $n the pre5ent ca5e, no breach or 6iolation of the ordinance occurred. (he petitioner

decided to pa4 under prote5t the fee5 i2po5ed b4 the ordinance. Such pa42ent did not affect the ca5e? the +!,#"*"to*- *!#'!) ",t'o( 2"s st'## &*o&!* becau5e the applicabilit4 of the ordinance to future tran5action5 5till re2ained to be re5ol6ed, although the 2atter could al5o be thre5hed out in an ordinar4 5uit for the reco6er4 of ta8e5 paid. $n it5 petition for declarator4 relief, petitioner-appellee alleged that b4 rea5on of the enforce2ent of the 2unicipal ordinance b4 re5pondent5 it 3a5 forced to pa4 under prote5t the fee5 i2po5ed pur5uant to the 5aid ordinance, and accordingl4, one of the relief5 pra4ed for b4 the petitioner 3a5 that the re5pondent5 be ordered to refund all the a2ount5 it paid to re5pondent Municipal (rea5urer during the pendenc4 of the ca5e. (he inclu5ion of 5aid allegation and pra4er in the petition 3a5 not ob=ected to b4 the re5pondent5 in their an53er. #uring the trial, e6idence of the pa42ent5 2ade b4 the petitioner 3a5 introduced. "e5pondent5 3ere thu5 full4 a3are of the petitionerA5 clai2 for refund and of 3hat 3ould happen if the ordinance 3ere to be declared in6alid b4 the court. <. It 's '(v"#'+. (he Court find5 the in5pection fee of &+.*+ per bag, i2po5ed b4 the ordinance in >ue5tion to be !3,!ss'v! "(+ ,o()'s,"to*-. $t ha5 been 5ho3n b4 the petitioner, Matalin Coconut Co2pan4, $nc., that it i5 2erel4 reali7ing a 2arginal a6erage profit of &+.4+, per bag, of ca55a6a flour 5tarch 5hipped out fro2 the Municipalit4 of Malabang becau5e the a6erage production i5 &15.6+ per bag, including tran5portation co5t5, 3hile the pre6ailing 2ar;et price i5 &16.++ per bag. (he further i2po5ition, therefore, of the ta8 of &+.*+ per bag, b4 the ordinance in >ue5tion 3ould force the petitioner to clo5e or 5top it5 ca55a6a flour 5tarch 2illing bu5ine55 con5idering that it i5 2aintaining a big labor force in it5 operation, including a force of 5ecurit4 guard5 to guard it5 propertie5. (he ordinance, therefore, ha5 an ad6er5e effect on the econo2ic gro3th of the Municipalit4 of Malabang, in particular, and of the nation, in general, and i5 contrar4 to the econo2ic polic4 of the go6ern2ent.