EUSEBIO VILLANUEVA, ET AL., plaintiff-appellee vs.
CITY OF ILOILO, defendants-
appellants
G.R. No. L-26521, December 28, 1968
CASTRO, J.
FACTS:
On 1946, the municipal board of City of Iloilo enacted Ordinance 86, imposing municipal
license tax fees on tenement houses. The validity and constitutionality of this ordinance were
challenged by the spouses Villanueva, owners of four tenement houses. This Court, in City of
Iloilo vs. Remedios Sian Villanueva and Eusebio Villanueva, L-12695, March 23, 1959, declared
the ordinance ultra vires, “it not appearing that the power to tax owners of tenement houses is
on among those clearly and expressly granted to the City of Iloilo by its Charter.”
On 1960, the City of Iloilo, believing that, with the passage of Republic Act 2264,
otherwise known as the Local Autonomy Act, it had acquired the authority or power to enact an
ordinance, enacted Ordinance 11, series 1960, “An Ordinance Imposing Municipal License Tax
on Persons Engaged in the Business of Operating Tenement Houses”. The City of Iloilo, by
virtue of the ordinance in question, collected from spouses Villanueva, for the years 1960-1964.
On 1962, the spouses Villanueva, paying real property tax, income tax and the license
tax, filed a complaint against the City of Iloilo, praying that the ordinance, 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 rules 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) “R.A. 2264 does not empower cities to impose apartment taxes,”
(b) the ordinance 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.
ISSUE: Whether or not Ordinance 11 is illegal because it imposes double taxation
HELD:
No.
While it is true that the plaintiffs are taxable under the aforesaid provisions of the NIRC
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.
The contention that the plaintiffs are doubly 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 imposed a license
tax on the calling, the imposition of the latter kind of tax being in no sense a double tax.
“In order to constitute double taxation in the objectionable or prohibited sense:
The same property must be taxed twice when it should be taxes 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 of
taxing district, during the same taxing period,
and they must be the same kind or character of tax. 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. It is something not favoured, but is permissible, provided some other constitutional
requirement is not thereby violated, such as the requirement must be uniform.
