G.R. No.

L-26521 December 28, 1968

EUSEBIO VILLANUEVA, ET AL., plaintiff-appellee,

Municipal corporation; Iloilo City; Local Autonomy Act; Section 2 of Rep. Act No. 2264,
construed, applied, and scope defined; Municipal license tax imposed on tenement houses held
valid and constitutional; "Tenement house" and "municipal license tax" defined; Case at bar.—
In City of Iloilo v. Villanueva, et al., L-12695, March 23, 1959, the Supreme Court adopted the definition of
a "tenement house" as "any house or building, or portion thereof, which is rented, leased, or hired out to
be occupied, or is occupied, as the home or residence of three families or more living independently of each
other and doing their cooking in the premises, or by more than two families upon any floor, so living and
cooking, but having a common right in the halls, stairways, yards, water-closets, or privies, or some of
them." Tenement houses, being necessarily offered for rent or lease by their very nature and essence,
therefore constitute a distinct form of business or calling, similar to the hotel or motel business, or the
operation of lodging houses or boarding houses. Tenement houses constitute a distinct class of property.
A "municipal license tax" means an imposition or exaction on the right to use or dispose of property,
to pursue a business, occupation, or calling, or to exercise a privilege (51 Am. Jur. 59-60; 33 Am. Jur.
325-326).
It is now settled that the provisions of Section 2 of Republic Act No. 2264 confer on local
governments broad taxing authority which extends to almost "everything, excepting those which are
mentioned therein," provided that the tax so levied is "for public purposes, just and uniform," and does
not transgress any constitutional provision or is not repugnant to a controlling, statute (Nin Bay Mining
Co. v. Mun. of Roxas, Prov. of Palawan, L-20125, July 20, 1965). Thus when a tax, levied under the
authority of a city or municipal ordinance, is not within the exceptions and limitations aforementioned,
the same comes within the ambit of the general rule, pursuant to the rules of expressio unius est exclusio
alterius, and exceptio firmat regulum in casibus non excepti.
Under the same provisions of Section 2 of the Local Autonomy Act, local governments may now tax
any taxable subject matter or object not included in the -enumeration of matters removed from the taxing
power of local governments. Prior to the enactment of the Local Autonomy Act the taxes that could be
legally levied by local governments were only those specif ically authorized by law, and their power to tax
was construed in strictissimi juris (Medina v. City of Baguio, L-4060, Aug. 29, 1952; Wa Wa Yu v. City of
Lipa, L-9167, Sept. 27, 1956; Saldaña v. City of Iloilo, 104 Phil. 28; and the cases cited therein).
In the case at bar, Ordinance No. 11, series of 1960, of the City of Iloilo, which imposed a municipal
license tax on tenement houses, is valid and constitutional. The tax in question is not a real estate tax.
The tax imposed by the ordinance in question does not possess the attributes of a real estate tax. It is not
a tax on the land on which the tenement houses are erected, although both land and tenement houses
may belong to the same owner. The tax is not a fixed proportion of the assessed value of the tenement
houses, and does not require the intervention of assessors or appraisers. It is not payable at a designated
time or date, and is not enforceable against the tenement houses either by sale or distraint. Clearly, theref
ore, the tax in question is not a real estate tax.
While it is true that the plaintiff s-appellees are taxable under the provisions of the National Internal
Revenue Code as real estate dealers, and still taxable under the ordinance in question, the argument
against double taxation may not be invoked. The same tax may be imposed by the National Government
as well as by the local government. There is nothing inherently obnoxious in the exaction of license fees or
taxes with respect to the same occupation, calling or activity by both the State and a political subdivision
thereof (Punsalan, et al. v. Mun. Board of the City of Manila, et al., L-4817, May 26, 1954, 95 Phil. 46).
The contention that the plaintiffs-appellees are double taxed because they are paying the real estate
taxes and the tenement tax imposed by the ordinance in question, is also devoid of merit. It is a well-
settled rule that a license tax may be levied upon a business or occupation although the land or property
used in connection therewith is subject to property tax. The State may collect an ad valorem tax on
property used in a calling, and at the same time impose a license tax on that calling, the imposition of the
latter kind of tax being in no sense a double tax (People v.Mendaros, et al., L-6975, May 27, 1955).
The tax in question is not oppressive. The charter of Iloilo City (C. A. No. 158) empowers its
municipal board to "fix penalties for violations of ordinances, which shall not exceed a f ine of two
hundred pesos or six months' imprisonment, or both such fine and imprisonment for each
offense" (Cf. Punsalan, et al. v. Mun. Board of Manila, supra). The f act that the owners of other classes of
buildings in the City of Iloilo do not pay the taxes imposed by the ordinance in question is no argument at
all against uniformity and equality of the tax imposition. Neither is the rule of -equality and uniformity
violated by the fact that tenement taxes are not imposed in other cities, for the same rule does not require
that taxes for the same purpose should be imposed in different territorial subdivisions at the same time
(51 Am. Jur. 203). So long as the burden of the tax falls equally and impartially on all owners or
operations of tenement houses similarly classified or situated, equality and uniformity of taxation is
accomplished (84 C.J.S. 77). The plaintiffs-appellees, as owners of tenement houses in the City of Iloilo,
have not shown that the tax burden is not equally or uniformly distributed among them, to overthrow the
presumption that tax statutes are intended to operate uniformly and equally (84 C.J.S. 81).

Same; Double taxation; When permissible and when prohibited; Equality and uniformity of
taxation.—In order to constitute double taxation in the objectionable or prohibited sense the same
property must be taxed twice when it should be taxed but once; both taxes must be imposed on the same
property or subject-matter, for the same purpose, by the same State, Government, or taxing authority,
within the same jurisdiction or taxing district, during the same taxing period, and they must be the same
kind or character of tax (84 C.J.S. 131-132). It has been shown that a real estate tax and the tenement
tax imposed by the ordinance, although imposed by the same taxing authority, are not of the same kind
or character.
At all events, there is no constitutional prohibition against double taxation in the Philippines
(Manufacturers' Life Ins. Co. v.Meer, L-2910, June 29, 1951; City of Manila v. Interisland Gas Service, L-
8799, Aug. 31, 1956; Commissioner of Internal Revenue v. Hawaiian-Philippine Co., L-16315, May 30,
1964; Pepsi-Cola Bottling Co. of the Philippines v. City of Butuan, et al., L-22814, Aug. 28, 1968).
Taxes are uniform and equal when imposed upon all property of the same class or character within
the taxing authority (51 Am. Jur. 203). The fact that the owners of other classes of buildings in the City
do not pay the taxes imposed by the ordinance in question is no argument at all against uniformity and
equality of the tax imposition.

FACTS:

The municipal board of Iloilo City enacted Ordinance 86, imposing license tax fees to various
tenement houses in Iloilo City with corresponding amount. The validity and constitutionality of this
ordinance was challenged by the herein petitioner spouses Eusebio Villanueva and Remedios S.
Villanueva, owners of four tenement houses containing 34 apartments. However, in their previous case,
the court declared the ordinance ultra vires (one w/c was done w/o authority), "it not appearing that the
power to tax owners of tenement houses is one among those clearly and expressly granted to the City of
Iloilo by its Charter."

Thereafter, the municipal board of Iloilo City, believing, that with the passage of RA 2264 (Local
Autonomy Act), it had acquired the authority or power to enact an ordinance similar to that previously
declared by this Court as ultra vires , enacted Ordinance 11, series of 1960, “AN ORDINANCE IMPOSING
MUNICIPAL LICENSE TAX ON PERSONS ENGAGED IN THE BUSINESS OF OPERATING TENEMENT
HOUSES”. By virtue of the ordinance questioned in this case, the City collected from Sps. Villanueva, an
amount for the municipal license tax for the operation of their tenement houses. The Sps. Villanueva has
likewise been paying real estate taxes on their property.

The petitioners filed a complaint, against the City of Iloilo, in the CFI, praying that Ordinance 11,
series of 1960, be declared "invalid for being beyond the powers of the Municipal Council of the City of
Iloilo to enact, and unconstitutional for being violative of the rule as to uniformity of taxation and for
depriving said plaintiffs of the equal protection clause of the Constitution," and that the City be ordered to
refund the amounts collected from them under the said ordinance.

The lower court rendered judgment declaring the ordinance illegal on the grounds that (a)
"Republic Act 2264 does not empower cities to impose apartment taxes," (b) the same is "oppressive and
unreasonable," for the reason that it penalizes owners of tenement houses who fail to pay the tax, (c) it
constitutes not only double taxation, but treble at that and (d) it violates the rule of uniformity of
taxation.

That RA 2264 confer on local governments broad taxing authority which extends to almost
"everything, excepting those which are mentioned under section 2 of the said act." Petitioners strongly
maintains that the nature of the tax imposed by the said ordinance in lieu of the phraseology of section 1
involved a real estate tax which makes the ordinance ultra vires as it imposes a levy "in excess of the one
per centum real estate tax allowable under Sec. 38 of the Iloilo City Charter, Com. Act 158.". That it is one
of those exceptions that cities/municipalities do not have authority.

Hence, this petition.

ISSUE:

WON the nature of the tax imposed upon by questioned Ordinance 11 was a Real Estate Tax, of
which the defendant has no authority to collect.

RULING:

NO.
A real estate tax is a direct tax on the ownership of lands and buildings or other improvements
thereon, not specially exempted,8 and is payable regardless of whether the property is used or not,
although the value may vary in accordance with such factor.9 The tax is usually single or indivisible,
although the land and building or improvements erected thereon are assessed separately, except when
the land and building or improvements belong to separate owners. 10 It is a fixed proportion11 of the
assessed value of the property taxed, and requires, therefore, the intervention of assessors. 12 It is
collected or payable at appointed times,13 and it constitutes a superior lien on and is enforceable against
the property14 subject to such taxation, and not by imprisonment of the owner.

The tax imposed by the ordinance in question does not possess the aforestated attributes. It is
not a tax on the land on which the tenement houses are erected, although both land and tenement
houses may belong to the same owner. The tax is not a fixed proportion of the assessed value of the
tenement houses, and does not require the intervention of assessors or appraisers. It is not payable at a
designated time or date, and is not enforceable against the tenement houses either by sale or distraint.
Clearly, therefore, the tax in question is not a real estate tax.

Furthermore, the imposition by the ordinance of a license tax on persons engaged in the business
of operating tenement houses finds authority in section 2 of the Local Autonomy Act which provides that
chartered cities have the authority to impose municipal license taxes or fees upon persons engaged in any
occupation or business, or exercising privileges within their respective territories, and "otherwise to levy
for public purposes, just and uniform taxes, licenses, or fees."

DISPOSITIVE PORTION:

ACCORDINGLY, the judgment a quo is reversed, and, the ordinance in question being valid, the
complaint is hereby dismissed. No pronouncement as to costs.