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G.R. No.

L-24813 April 28, 1969

DR. HERMENEGILDO SERAFICA, plaintiff-appellant,
HON. ESTE#AN C. CONE$OS, %& M%'or o( Or)o* Ci+' %,- ORMOC CIT!, defendants-
Cleto P. Evangelista for plaintiff-appellant.
The City Fiscal of Ormoc City for defendant-appellees.
Direct appeal from a decision of the Court of First Instance of Leyte dismissing plaintiff's
complaint, without pronouncement as to costs.
Plaintiff, Dr. ermenegildo !erafica, see"s a declaration of nullity of #rdinance $o. %&, !eries of
%'(), of #rmoc City, imposing a *ta+ of five pesos ,P-.../ for every one thousand ,%,.../ 0oard
feet of lum0er sold at #rmoc City 0y any person, partnership, firm, association, corporation, or
entities*, pursuant to which the 1reasurer of said City levied on and collected from said plaintiff,
as owner of the !erafica !awmill, the aggregate sum of P%,2&3.2), as ta+ on &(3,-(2 0oard feet
of lum0er sold, in said City, during the third 4uarter of %'(). 5fter appropriate proceedings, the
lower court rendered 6udgment upholding the validity of said ordinance and denying the relief
prayed for 0y Dr. !erafica. ence, this appeal 0y the latter.
1he contested ordinance reads7
#8DI$5$C9 $#. %&
5$ #8DI$5$C9 I:P#!I$; 5 15< #F FI=9 P9!#! ,P-.../ F#8 9=98> #$9
1#?!5$D @#58D F991 #F L?:@98 !#LD 51 #8:#C CI1> 5$D F#8
#198 P?8P#!9!.
@9 I1 #8D5I$9D, 0y authority of the :unicipal @oard of #rmoc City, Philippines,
pursuant to the provisions of 8epu0lic 5ct %3', as amended 0y 85 )A', otherwise "nown
as the Charter of #rmoc City, 1hat7
!9C1I#$ %. City tax. B 1here shall 0e paid to the City 1reasurer a city ta+ of five pesos
,P-.../ for every one thousand ,%,.../ 0oard feet of lum0er sold at #rmoc City 0y any
person, partnership, firm, association, corporation or entity.
!9C1I#$ A. Time and manner of payment and penalty for delinquency. B 1he city ta+
herein prescri0ed shall 0e paya0le without penalty within twenty ,A./ days after the close
of every 4uarter for which the ta+ is due. Failure to pay the ta+ within the prescri0ed time
shall render the ta+payer su06ect to a surcharge of fifty percentum ,-.C/ for the first
offense and one hundred percentum ,%..C/ for su0se4uent failures to pay within the
prescri0ed period.
!9C1I#$ &. Payment to be rendered by taxpayer. B 1he ta+payer is here0y o0liged to
include the ta+ due in every invoice issued for the sale of lum0er which ta+ shall 0e
su0mitted for payment to the City 1reasurer within twenty ,A./ days after the close of
every 4uarter.
!9C1I#$ ). nspection of taxpayer!s boo"s and records. B For the purpose of enforcing
the provisions of this #rdinance, the City 1reasurer or any of his deputies specifically
authoriDed in writing for the purpose, shall have authority to e+amine the 0oo"s and
records of any person, partnership, firm, association, corporation or entity su06ect to the
ta+ herein imposed, P8#=ID9D, #E9=98, 1hat such e+amination shall 0e made
only during regular 0usiness hours, unless the person, partnership, firm, association,
corporation or entity concerned shall consent otherwise.
!9C. -. Penalty for violation. B 5ny violation of the provisions of the #rdinance shall
0e punisha0le 0y a fine of not more than five hundred ,P-...../ pesos and an
imprisonment of not more than three ,&/ months.
!9C. (. Construction of this Ordinance. B If any part or section of this #rdinance shall
0e declared unconstitutional or ultra vires, such part or section shall not invalidate any
other provision hereof.
!9C. 3. Effectivity. B 1his #rdinance shall ta"e effect immediately upon approval.
9$5C19D, Fune %3, %'().la#phi$.n%t
89!#L=9D, F?8198, to authoriDe the City 1reasurer to copies of this #rdinance for
issuance to all concernedG
89!#L=9D, FI$5LL>, to furnish a copy of this resolution-ordinance each to the City
1reasurer, the City 5uditor, the City Fiscal, the City Fudge, and all concernedG
C588I9D. !i+ affirmative votes registered 0y Councilors 1ugonon, 5lfaro, Hierulf,
50as, @esa0ella, and DuG one a0stention registered 0y Councilor 5viles.
+ + + + + + + + +
Plaintiff assails this ordinance as null and void upon the grounds that7 ,%/ the Charter of #rmoc
City ,8epu0lic 5cts $os. %3' and )A'/ authoriDes the same to *regulate*, 0ut not to *ta+* lum0er
yardsG ,A/ the ordinance in 4uestion imposes, in effect, dou0le ta+ation, 0ecause the 0usiness of
lum0eryard is already regulated under said Charter and the sale of lum0er is *a mere incident to
the 0usiness of lum0er yard*G ,&/ the ta+ imposed is *unfair, un6ust, ar0itrary, unreasona0le,
oppressive and contrary to the principles of ta+ation*G and ,)/ *the pu0lic was not heard and
given a chance to air its views* thereon.
Eith respect to the first ground, Ee have held in Ormoc &ugar Co. v. 'unicipal (oard of Ormoc
that the ta+ing power of the City of #rmoc, under section
of the Local 5utonomy 5ct A is
*0road* and *sufficiently plenary to cover everything, e+cepting those mentioned therein*.
should 0e noted that in said case of #rmoc !ugar Co., Ee upheld the validity of a sales ta+.
5s regards the second ground, suffice it to say that regulation and ta+ation are two different
things, the first 0eing an e+ercise of police power, whereas the latter is not, apart from the fact
that dou0le ta+ation is not prohi0ited in the Philippines.
1he third o06ection is premised upon the fact that the ta+ in 4uestion is imposed regardless of the
class of lum0er sold, although there are several categories thereof, commanding different prices.
Plaintiff has not proven, however, or even alleged the prices corresponding to each category, so
that, li"e the lower court, Ee have no means to ascertain the accuracy of the conclusion drawn
0y him, and must, accordingly, rely upon the presumption that the City Council had merely
complied with its duty and that the ordinance is valid, unless and until the contrary has 0een duly
1he last o06ection is 0ased upon Provincial Circular $o. A) of the Department of Finance, dated
:arch &%, %'(., suggesting that, *in the enactment of ta+ ordinances .. under the Local
5utonomy 5ct ... #here practicable, pu0lic hearings 0e held wherein the views of the pu0lic ...
may 0e heard.* 1his is, however, a mere suggestion, compliance with which is not o0ligatory, so
that failure to act in accordance therewith can not and does not affect the validity of the ta+
Indeed, since local governments are su06ect, not to the control, 0ut merely to the general
supervision of the President, it is to say the least, dou0tful that the latter could have made
compliance with said circular o0ligatory.
Ee have not overloo"ed the fact that, pursuant to !ec. A of 8epu0lic 5ct $o. AA() as amended
*no city, municipality or municipal district may levy or impose ...
+ + + + + + + + +
,e/ 1a+es on forest products or forest concessions.*
5lthough lum0er is a forest product, this imitation has no application to the case at 0ar, the ta+ in
4uestion 0eing imposed, not upon lum0er, 0ut upon its sale. !aid ta+ is not levied upon the
lum0er in plaintiff's sawmill and does not 0ecome due until after the lum0er has 0een sold.
ence, the case at 0ar is distinguisha0le from )olden *ibbon +umber Co., nc. v. City of (utuan
in that the ordinance involved therein provided that *every person, association or corporation
operating a lum0er mill andIor lum0er yard within the territory of the City of @utuan shall pay to
the City a ta+ of two-fifths ,P...)/ centavo for every board foot of lumber sa#n, manufactured
and-or produced.* In short, the ta+ in that case was imposed upon the *lum0er* B a forest
product, not su06ect to local ta+ation B whether sold or not. !imilarly, &antos +umber Co. v.
City of Cebu
and .ose &. .ohnston / &ons v. *amon *egondola
cited 0y the plaintiff, refer to
situations arising before the enactment of 8epu0lic 5ct $o. AA(),
and, hence, are inapplica0le
to the present case.
$either have Ee overloo"ed the proviso in !ec. A of said 5ct prohi0iting the imposition of *any
percentage ta+ on sales or other ta+es in any form 0ased thereon,* for this in6unction is directed
e+clusively to *municipalities and municipal districts,* and does not apply to cities.
E989F#89, the decision appealed from should 0e, as it is here0y affirmed, with costs against
plaintiff herein. It is so ordered.