938

SUPREMECOURTREPORTSANNOTATED
CityofBaguiovs.DeLeon

No.L24756.October31,1968.
CITY OF BAGUIO, plaintiffappellee, vs. FORTUNATO DE
LEON,defendantappellant.
StatutoryconstructionOrdinancepassedpursuanttoRepublicAct329
conferringupontheCityofBaguiothepowertotaxisvalid.OnJuly15,
1948,RepublicActNo.329wasenactedamendingthecitycharterofBaguio
andaddingtoitspowertolicensethepowertotaxandregulateallbusiness,
tradesandoccupationstherein.Theordinanceunderconsideration,therefore,
cannotbeconsideredultravires.
CourtsJurisdictionofcitycourtsWhencitycourthasjurisdictionto
decide on the constitutionality of an ordinance.Where the principal issue
is collection for a sum of money and the city court has already acquired
jurisdiction over the suit, the mere fact that the issue of constitutionality is
raised does not suffice to oust the City Court of its jurisdiction. Since the
City Court is possessed of judicial power and it is likewise axiomatic that
thejudicialpowerembracestheascertainmentofthefactsandtheapplication
of the law, the Constitution as the highest law superseding any statute or
ordinance in conflict therewith, it cannot be said that a City Court is bereft
ofcompetencetoproceedonthematter.
Taxation Double taxation When not violative of due process.The
argument against double taxation may not be invoked where one tax is
imposed by the state and the other is imposed by the city, it being widely
recognizedthatthereisnothinginherentlyobnoxiousintherequirementthat
licensefeesortaxesbeexactedwithrespecttothesameoccupation,calling
or activity by both the state and the political subdivisions thereof. Where
Congress has clearly expressed its intention, the statute must be sustained
eventhoughdoubletaxationresults.
Same Rule on equality and uniformity in taxation.Equality and
uniformity in taxation means that all taxable articles or kind or property of
thesameclassshallbetaxedatthesame
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VOL.25,OCTOBER31,1968

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CityofBaguiovs.DeLeon

rate. A tax is considered uniform when it operates with the same force and
effect in every place where the subject may be found. Where the statute or
ordinance in question applies equally to all persons, firms and corporations
placed in similar situation there is no infringement of the rule on equality.
Inequalities which result from a singling out of one particular class for
taxationorexemptioninfringenoconstitutionallimitation.
PublicofficersThe act of the City Treasurer is the act of the mayor
unlessrepudiated.Inmuchthesamewaythatanactofadepartmenthead
of the national government, performed within the limits of his authority, is
presumptively the act of the President unless reprobated or disapproved,
similarly the act of the City Treasurer may be assumed to carry the seal of
approvaloftheCityMayorunlessrepudiatedorsetaside.

APPEALfromadecisionoftheCityCourtofBaguio.
ThefactsarestatedintheopinionoftheCourt.
TheCityAttorneyforplaintiffappellee.
FortunatodeLeon for and in his own behalf as defendant
appellant.
FERNANDO,J.:
In this appeal,
a lower court decision upholding the validity of an
1
ordinance of the City of Baguio imposing a license fee on any
person, firm, entity or corporation doing business in the City of
BaguioisassailedbydefendantappellantFortunatodeLeon.Hewas
heldliableasarealestatedealerwithapropertythereinworthmore
thanP10,000,butnotinexcessofP50,000,andthereforeobligated
to pay under such ordinance the P50 annual f ee. That is the
principalquestion.Inaddition,therehasbeenafirmandunyielding
insistence by defendantappellant of the lack of jurisdiction of the
CityCourtofBaguio,wherethesuitoriginated,acomplainthaving
beenfiledagainsthimbytheCityAttorneyofBaguioforhisfailure
topaytheamountofP300aslicensefeecoveringtheperiodfrom
the first quarter of 1958 to the fourth quarter of 1962, allegedly,
inspiteofrepeateddemands.Norwasdefendantappellantagreeable
to such a suit being instituted by the City Treasurer without the
consentoftheMayor,whichfor
______________
1OrdinanceNo.218.

940

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SUPREMECOURTREPORTSANNOTATED
CityofBaguiovs.DeLeon

himwasindispensable.Thelowercourtwasofadifferentmind.
In its decision of December 19, 1964, it declared the above
ordinance as amended, valid and subsisting, and held def endant
appellantliableforthefeesthereinprescribedasarealestatedealer.
Hence,thisappeal.Assumethevalidityofsuchordinance,andthere
would be no question about the liability of defendantappellant for
the above license fee, it being shown in the partial stipulation of
facts,thathewas"engagedintherentalofhispropertyinBaguio"
deriving income therefrom during the period covered by the first
quarterof1958tothefourthquarterof1962.
Thesourceofauthorityforthechallengedordinanceissupplied2
by Republic Act No. 329, amending the city charter of Baguio
empoweringittofixthelicensefeeandregulate"businesses,trades
andoccupationsasmaybeestablishedorpracticedintheCity."
Unlessitcanbeshownthenthatsuchagrantofauthorityisnot
broadenoughtojustifytheenactmentoftheordinancenowassailed,
thedecisionappealedfrommustbeaffirmed.Thetaskconfronting
defendantappellant,therefore,wasfarfromeasy.Whyhefailedis
understandable,consideringthatevenacursoryreadingoftheabove
amendmentreadilydisclosesthattheenactmentoftheordinancein
questionfindssupportinthepowerthusconferred.
Noristhequestionraisedbyhimastothevaliditythereofnovel
3
in character. In Medina v. City of Baguio, the effect of the
amendatory section insofar as it would expand the previous power
vested by the city charter was clarified in these terms: "Appellants
apparentlyhaveinmindsection2553,paragraph(c)oftheRevised
AdministrativeCode,whichempowerstheCityofBaguiomerelyto
imposealicensefeeforthepurposeofregulatingthebusinessthat
maybeestablishedinthecity.Thepowerasthusconferredisindeed
limited,asitdoesnotincludethepowertolevyatax.ButonJuly
15, 1948, Republic Act No.329 was enactedamending thecharter
ofsaidcityandaddingtoitspowertolicensethepowertotaxandto
regulate.Anditispreciselyhavinginviewthisamend
________________
2Section2553,paragraph(c),RevisedAdministrativeCode.
391Phil.854,856857(1952).

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VOL.25,OCTOBER31,1968

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CityofBaguiovs.DeLeon

ment that Ordinance No. 99 was approved in order to increase the

revenuesofthecity.Inouropinion,theamendmentaboveadverted
to empowers the city council not only to impose a license fee but
also to levy a tax for purposes of revenue, more so when in
amendingsection2553(b),thephrase'asprovidedbylaw'hasbeen
removedbysection2ofRepublicActNo.329.Thecitycouncilof
Baguio, therefore, has now the power to tax, to license and to
regulateprovidedthatthesubjectsaffectedbeoneofthoseincluded
in the charter. In this sense, the ordinance under consideration
cannotbeconsideredultravireswhetheritspurposebetolevyatax
or impose a license fee. The terminology used is of no
consequence,"
Itwouldbeanundueandunwarrantedemasculationoftheabove
powerthusgrantedifdefendantappellantweretobesustainedinhis
contentionthatnosuchstatutoryauthorityfortheenactmentofthe
challengedordinancecouldbediscernedfromthelanguageusedin
the amendatory act. That is about all that needs to be said in
upholdingthelowercourt,consideringthattheCityofBaguiowas
not devoid of authority in enacting this particular ordinance. As
mentioned at the outset, however, defendant appellant likewise
alleged procedural missteps and asserted that the challenged
ordinance suffered from certain constitutional infirmities. To such
pointsraisedbyhim,weshallnowturn.
1. Defendantappellant makes much of the alleged lack of
jurisdiction of the City Court of Baguio in the suit for the
collection of the real estate dealer's fee from him in the
amountofP300.Hecontendedbeforethelowercourt,and
it is his contention now, that while the amount of P300
sought was within the jurisdiction of the City Court of
Baguio where this action originated, since the principal
issuewasthelegalityandconstitutionalityofthechallenged
ordinance, it is not such City Court but the Court of First
Instancethathasoriginaljurisdiction.
There is here a misapprehension of the Judiciary Act. The City
Court has jurisdiction. Only recently, on September 7, 1968 to be
exact, we4rejected a contention similar in character in Nemenzo v.
Sabillano. Theplaintiffin
_______________
4L20977.

942

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SUPREMECOURTREPORTSANNOTATED
CityofBaguiovs.DeLeon

that case filed a claim for the payment of his salary before the
Justice of the Peace Court of Pagadian, Zamboanga del Sur. The
question of jurisdiction was 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
thuswithoutjurisdictiontotrythecase.Theabovepleawascurtly
dismissed by us, as what was involved was "an ordinary money
claim" and therefore "within the original jurisdiction of the Justice
of the Peace Court where it was filed, considering the amount
involved."Suchislikewisethesituationhere.
5
Moreover, in City of Manila v. Bugsuk Lumber Co., a suit to
collectfromadefendantthislicensefeecorrespondingtotheyears
1951 and 1952 was filed with the Municipal Court of Manila, in
viewoftheamountinvolved.Thethoughtthatthemunicipalcourt
lacked jurisdiction apparently was not even in the minds of the
partiesanddidnotreceiveanyconsiderationbythisCourt.
Evidently, the fear is entertained by defendantappellant that
wheneveraconstitutionalquestionisraised,itistheCourtofFirst
Instancethatshouldhaveoriginaljurisdictiononthematter.Itdoes
not admit of doubt, however, that what confers jurisdiction is the
amount set forth in the complaint. Here, the sum sought to be
recovered was clearly within the jurisdiction of the City Court of
Baguio.
Nor could it be plausibly maintained that the validity of such
ordinance being open to question as a def ense against its
enforcement from one adversely affected, the matter should be
elevatedtotheCourtofFirstInstance.FortheCityCourtcouldrely
6
onthepresumptionofthevalidityofsuchordinance, andthemere
fact,however,thatintheanswertosuchacomplaintaconstitutional
question was raised did not suffice to oust the City Court of its
jurisdiction.Thesuitremainsoneforcollection,thelackofvalidity
beingonlyadefensetosuchanattemptatrecovery.SincetheCity
Courtispossessedofjudicialpoweranditislikewiseaxiomaticthat
thejudicialpowerem
_______________
5101Phil.859(1957).
6U.S. v. Salaveria, 39 Phil. 102 (1918) and ErmitaMalate Hotel Association v.

MayorofManila,L24693,July31,1967.

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CityofBaguiovs.DeLeon

bracestheascertainmentoffactsandtheapplicationofthelaw,the
Constitutionasthehighestlawsupersedinganystatuteorordinance
inconflicttherewith,itcannotbesaidthataCityCourtisbereftof
competencetoproceedonthematter.Intheexerciseofsuchdelicate
power, however, the admonition of Cooley on inferior tribunals is
wellworthremembering.Thus:"Itmustbeevidenttoanyonethat
the power to declare a legislative enactment void is one which the
judge,consciousofthefallibilityofthehumanjudgment,willshrink
fromexercisinginanycasewherehecanconscientiouslyandwith7
due regard to duty and official oath decline the responsibility."
Whileitremainsundoubtedthatsuchapowertopassonthevalidity
ofanordinanceallegedtoinfringecertainconstitutionalrightsofa
litigant exists, still it should be exercised with due care and
circumspection,consideringnotonlythepresumptionofvaliditybut
also the relatively modest rank of a city court in the judicial
hierarchy.
2. To repeat the challenged ordinance cannot be considered
ultra vires as there is more than ample statutory authority
for the enactment thereof. Nonetheless, its validity on
constitutional grounds is challenged because of the
allegation that it imposed double taxation, which is
repugnanttothedueprocessclause,andthatitviolatedthe
requirementofuniformity.Wedonotviewthematterthus.
As 'to why double taxation is not violative of due process, Justice
Holmesmadeclearinthislanguage:"Theobjectiontothetaxation
asdoublemaybelaiddownononeside.xxxThe14thAmendment
[thedueprocessclause]nomoreforbidsdoubletaxationthanitdoes
doubling the amount of a tax, short of confiscation or proceedings
unconstitutionalonothergrounds."8Withthatdecisionrenderedata
timewhenAmericansovereigntyinthePhilippineswasrecognized,
itpossessesmorethanjustapersuasiveeffect.Tosome,itdelivered
thecoupdegracetothebogeyofdoubletaxationasaconstitutional
bartothe
________________
7CooleyonConstitutionalLimitations,Vol.I,8thed.332(1927)27).
8FortSmithLumberCo.v.Arkansas,251US523,5338F(1920)

944

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SUPREMECOURTREPORTSANNOTATED
CityofBaguiovs.DeLeon

exercise of the taxing power. It would seem though that in the

United States, as with us, its ghost, as noted by an eminent critic,
9
still stalks the juridical stage. In a 1947 decision, however, we
quoted with
approval this excerpt from a leading American
10
decision: "Where, as here, Congress has clearly expressed its
Intention,thestatutemustbesustainedeventhoughdoubletaxation
results."
At any rate, it has been expressly affirmed by us that such an
"argument against double taxation may not be invoked where one
taxisimposedbythestateandtheotherisimposedbythecityxxx,
itbeingwidelyrecognizedthatthereisnothinginherentlyobnoxious
intherequirementthatlicensefeesortaxesbeexactedwithrespect
tothesameoccupation,callingoractivitybyboththestateandthe
11
politicalsubdivisionsthereof."
The above would clearly indicate how lacking in merit is this
argumentbasedondoubletaxation.
Now, as to the claim that there was a violation of the rule of
uniformity established by the constitution. According to the
challengedordinance,arealestatedealerwholeasespropertyworth
P50000orabovemustpayanannualfeeofP100.Ifthepropertyis
worthP10,000butnotoverP50,000,thenhepaysP50andP24ifthe
value is less than P10,000. On its face, therefore, the above
ordinance cannot be assailed as violative of the constitutional
requirementofuniformityInPhilippineTrustCompanyv.Yatco,12
JusticeLaurel, speaking for the Court, stated: "A tax is considered
uniform when it operates with the same force and effect in every
placewherethesubjectmaybefound."
Therewasnooccasioninthatcasetoconsiderthepossibleeffect
onsuchaconstitutionalrequirementwherethereisaclassification.
13
TheopportunitycameinEasternTheatricalCo.v.Alfonso. Thus:
"Equalityanduniformityintaxationmeansthatalltaxablearticles
orkinds
_______________
9Wise&Co.v.Meer,78Phil.655.
10Helmichv.Hellman,276US233(1928).
11Punsalanv.MunicipalBoardofManila,95Phil.46,43(1954).
1269Phil.420(1940).
1383Phil.862,862(1949).

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VOL.25,OCTOBER31,1968

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CityofBaguiovs.DeLeon

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 x x x." About two years
later,JusticeTuason,speakingforthisCourtinManilaRaceHorses
14
Trainers Assn. v. De la Fuente incorporated the above excerpt in
his opinion and continued: "Taking everything into account, the
differentiationagainstwhichtheplaintiffscomplainconformstothe
practical dictates of justice and equity and is not discriminatory
withinthemeaningoftheConstitution."
To satisfy this requirement then,
all that is needed as held in
15
anothercasedecidedtwoyearslater, isthatthestatuteorordinance
in question "applies equally to all persons, firms and corporations
placedinsimilarsituation."ThisCourtisonrecordasacceptingthe
16
view in a leading American case that "inequalities which result
fromasinglingoutofoneparticularclassfortaxationorexemption
17
infringenoconstitutionallimitation."
Itisthusapparentfromtheabovethatinmuchthesamewaythat
the plea of double taxation is unavailing, the allegation that there
wasaviolationoftheprincipleofuniformityisinherentlylackingin
persuasiveness.Thereisnoneedtopassupontheotherallegations
toassailthevalidityoftheaboveordinance,itbeingmaintainedthat
the license fees therein imposed "is excessive, unreasonable and
oppressive" and that there is a failure to observe the mandate of
equal protection. A reading of the ordinance will readily disclose
theirinherentlackofplausibility.
3. That would dispose of all the errors assigned, except the
last two, which would predicate a grievance on the
complainthavingbeenstartedbytheCityTreasurerrather
thantheCityMayorofBaguio.Theseallegederrors,aswas
thecasewiththeothersassigned,lackmerit.
In much the same way that an act of a department head of the
nationalgovernment,performedwithinthelimits
_______________
1488Phil.60,65(1951).
15UyMatiasv.CityofCebu,93Phil.300(1953).
16Carmichaelv.SouthernCoalandCokeCo.,301US495(1937).

17Lutzv.Araneta,98Phil.148,153(1955).

946

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SUPREMECOURTREPORTSANNOTATED
CityofBaguiovs.DeLeon

of his authority, is presumptively

the act of the President unless
18
reprobatedordisapproved, similarlytheactoftheCityTreasurer,
whose position is roughly analogous, may be assumed to carry the
seal of approval of the City Mayor unless repudiated or set aside.
Thisshouldbethecaseconsideringthatsuchcityofficialiscalled
upon to see to it that revenues due the City are collected. When
administrative steps are futile and unavailing, given the
stubbornness and obduracy of a taxpayer, convinced in good faith
that no tax was due, judicial remedy may be resorted to by him, It
wouldbeareflectiononthestateofthelawifsuchfidelitytoduty
wouldbemetbycondemnationratherthancommendation.
So much for the analytical approach. The conclusion thus
reachedhasareinforcementthatcomestoitfromthefunctionaland
pragmatictest.Ifacitytreasurerhastoawaitthenodfromthecity
mayor before a municipal ordinance is enforced, then opportunity
exists for favoritism and undue discrimination to come into play.
Whatever valid reason may exist as to why one taxpayer is to be
accorded a treatment denied another, the suspicion is unavoidable
thatsuchamanifestationofofficialfavorcouldhavebeeninduced
byunnamedbutnotunknownconsideration.Itwouldnotbegoing
too far to assert that even defendantappellant would find no
satisfaction in such a sad state of affairs. The more desirable legal
doctrinetherefore,ontheassumptionthatachoiceexists,isonethat
would do away with such temptation on the part of both taxpayer
andpublicofficialalike.
WHEREFORE,thelowercourtdecisionofDecember19,1964,
isherebyaffirmed.Costsagainstdefendantappellant.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal,
Sanchez,Castro,AngelesandCapistrano,JJ.,concur.
Zaldivar,J.,isonofficialleave.
Decisionaffirmed.
o0o
______________
18Villenav.Sec,oftheInterior,67Phil.451(1939).

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