1. Pascual v.

Secretary of Public Works and Communications (L-10405, December 29, 1960)

Facts:

Petitioner Wenceslao Pascual, Provincial Governor of Rizal assails the validity of an item in Republic Act
No. 920, entitled An Act Appropriating Funds for Public Works, worth P85K for the construction,
reconstruction, repair, extension and improvement of feeder road terminals within the Antonio
Subdivision situated at Pasig, Rizal, which projected feeder roads "do not connect any government
property or any important premises to the main highway." The aforesaid subdivision was the private
property of respondent Jose C. Zulueta, who at the time of the passage of the law, was a member of the
Senate. Petitioner thus alleges that the construction of said feeder roads, to be undertaken with the
aforementioned appropriation have the effect of relieving respondent Zulueta of the burden of
constructing its subdivision streets or roads at his own expenses, and would greatly enhance or increase
the value of the subdivision" of said respondent.

Thereafter, respondent Zulueta executed a deed of donation for the four parcels of land constituting said
project feeder roads, in favor of the Government of the Republic of the Philippines subject to the condition
that said parcels of land be used for street purposes only and for no other purposes.

The lower court held that under these circumstances, the appropriation in question was "clearly for a
private, not a public purpose."

Issue:

Whether or not the expropriation was mad for a public purpose

Held:

No, the expropriation was made for the benefit of a few private people and the donation to the
Government, after the approval and effectivity of said Act did not cure its aforementioned basic defect.

It is a general rule that the legislature is without power to appropriate public revenue for anything but a
public purpose. It is the essential character of the direct object of the expenditure which must determine
its validity as justifying a tax, and not the magnitude of the interests to be affected nor the degree to
which the general advantage of the community, and thus the public welfare, may be ultimately benefited
by their promotion.

Furthermore, the validity of a statute depends upon the powers of Congress at the time of its passage or
approval, not upon events occupying, or acts performed, subsequently thereto, unless the latter consist
of an amendment of the organic law, removing, with retrospective operation, the constitutional limitation
infringed by said statute. Inasmuch as the land on which the projected feeder roads were to be
constructed belonged to respondent at the time of the passage of the appropriation bill, the result is that
said appropriation sought a private purpose, and, hence, was null and void.
 2. Punsalan v. Municipal Board of the City of Manila (L-4817, May 26, 1954)

Facts:

Petitioners are professionals practicing in the City of Manila who contested the validity of Ordinance No.
3398 issued pursuant to the authority granted under Section 18 of the Revised Charter of the City of
Manila. Said ordinance imposes a municipal occupation tax on persons exercising various professions in
the city and penalizes non-payment of the tax by a fine of not more than P200 or by imprisonment of not
more than six months, or by both, in the discretion of the court.

Having already paid their occupation tax under Section 201 of the NIRC, plaintiffs paid the same additional
tax under protest contending that the ordinance and the law authorizing it constitute class legislation, are
unjust and oppressive, and authorize what amounts to double taxation.

Issue:

Whether or not there is double taxation in this case

Held:

No, there is no double taxation wherein the professional is taxed by the State and, at the same time, by
the City of Manila. 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. There is nothing inherently obnoxious in the requirement
that license fees or taxes be exacted with respect to the same occupation, calling or activity by both the
state and the political subdivisions thereof.
 3. Lladoc v. Commissioner of Internal Revenue (L-19201, June 16, 1965)

Facts:

The M.B. Estate, Inc. donated P10,000 to Fr. Crispin Ruiz, the previous parish priest of Victorias, Negros
Occidental for the construction of a new Catholic church. It was spent for the same purpose. The donor
filed its gift tax return however, respondent issued an assessment with regard to the return and against
the Catholic Parish of Victorias, of which Fr. Casimiro Lladoc. Petitioner was then the new parish priest.

Petitioner lodged a protest to the assessment and requested the withdrawal thereof but was denied. He
claimed among others others, that at the time of the donation, he was not the parish priest in Victorias;
that there is no legal entity or juridical person known as the "Catholic Parish Priest of Victorias," and
therefore, he should not be liable for the gift tax.

Issue:

Whether or not the imposition of gift tax on the donation in favor of the Church is valid

Held:

Yes, the imposition of the gift tax was valid. However, it is the head of the Diocese and not the parish
priest is the real party in interest in the imposition of the gift tax on the property donated to the Church
for religious purposes. Under Section 22(3) Article VI of the Constitution, tax exemption is provided to the
payment of taxes assessed on properties such as property taxes. This is as distinguished from excise taxes
wherein the gift tax belongs. The imposition of the gift tax on the property used for religious purpose is
not a violation of the Constitution.
 4. Abra Valley College, Inc. v. Aquino (L-39086, June 15, 1988)

Facts:

The Abra Valley College is an educational corporation and institution of higher learning. The municipal
and provincial treasurers issued a Notice of Seizure upon it on the college lot and building for non-payment
of real estate taxes. A Notice of Sale was also issued upon the petitioner. The municipal mayor of Bangued,
Abra, offered the highest bid of on public auction involving the sale of the college lot and building. The
certificate of sale was correspondingly issued to him.

The petitioner filed a complaint to annul and declare void both notices and their effects upon the lot and
building for non-payment of real estate taxes and the corresponding penalties. The provincial fiscal filed
a memorandum that the school lot is used for educational purposes and thus exempt from the payment
of real property taxes. However, the trial court ruled that the property is not being used exclusively for
educational purposes, holding that the second floor of the building is being used by the director as his
residence and that the ground floor is leased to a commercial establishment.

Issue:

Whether or not the lot and building are exempt from real property tax

Held:

No, the properties in question is not exempt from real property tax.

While the law allows a more liberal and non-restrictive interpretation of the phrase “exclusively used for
educational purposes”, the exemption extends to facilities which are incidental to and reasonably
necessary for the accomplishment of the main purposes. While the use of the second floor is incidental
to education, the lease of the first floor cannot by any stretch of imagination be considered incidental to
the purposes of education.

Under the 1935 Constitution, the trial court correctly concluded that the school building as well as the lot
where it is built, should be taxed, not because the second floor of the same is being used by the director
and his family for residential purposes, but because the first floor thereof is being used for commercial
purposes. However, since only a portion is used for purposes of commerce, it is only fair that half of the
assessed tax be returned to the school involved.
 5. Ferrer, Jr. v. Bautista (210551, June 30, 2015)

Facts:

The Quezon City council enacted two ordinances. Ordinance No. SP-2095 features the Socialized Housing
Tax of Quezon City which provides the collection of a special assessment equivalent to 0.5% on the
assessed value of land in excess of P100,000 for different projects under its purpose. On the other hand,
Ordinance No. SP-2235 provides for the collection of garbage fees on residential properties and in case of
refusal to pay, a penalty of 25% of the fee plus an interest of 2% per month shall be charged.

Petitioner questions the validity of said ordinances and claims that the annual property tax is an ad
valorem tax, a percentage of the assess value of the property, which is subject to revision every three
years to reflect changes in market values of properties. He argues that the fees collected actually increases
the property tax which are not based on the assessed value of the property or its triannual reassessment.

Issue:

Whether or not the collections of fees provided in the Ordinances are valid exercise of taxation

Held:

1. No, the socialized housing tax is valid but Ordinance No. SP-2095 features the exercise of police
power, not taxation. Taxation may be made the implement of the State’s police power. The
socialized housing tax is not a pure exercise of taxing power or merely to raise revenue; it is levied
with a regulatory purpose. The levy is primarily in the exercise of the police power for the general
welfare of the entire city. It is greatly imbued with public interest. Notably, the public purpose of
a tax may legally exist even if the motive which impelled the legislature to impose the tax was to
favor one over another.

2. No, Ordinance No. SP-2235 is an invalid exercise of the power of taxation and is also
unconstitutional. Pursuant to the Local Government Code, the Sangguniang Panlungsod of
Quezon City is empowered to enact ordinances, approve resolutions, and appropriate funds for
the general welfare of the city and its inhabitants. Necessarily, LGUs are statutorily sanctioned to
impose fees and charges for services rendered. The fee imposed for garbage collections under
Ordinance No. SP-2235 is a charge fixed for the regulation of an activity. The garbage fee is not a
tax, hence the garbage fee under the Ordinance violates the rule on double taxation must
necessarily fail.