TIO vs.

VRB
151 SCRA 208
GR No. L-75697, June 18, 1987
"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 industry over
another."

FACTS: The petitioner assails the validity of PD 1987 entitled an "Act
creating the Videogram Regulatory Board," citing especially Section 10
thereof, which imposes a tax of 30% on the gross receipts payable to the
local government. Petitioner contends that aside from its being a rider and
not germane to the subject matter thereof, and such imposition was being
harsh, confiscatory, oppressive and/or unlawfully restraints trade in
violation of the due process clause of the Constitution.

ISSUE: Is PD 1987 a valid exercise of taxing power of the state?

HELD: Yes. It is beyond serious question that a tax does not cease to be
valid merely because it regulates, discourages, or even definitely deters the
activities taxed. The power to impose taxes is one so unlimited in force and
so searching in extent, that the courts scarcely venture to declare that it is
subject to any restrictions whatever, except such as those rest in the
discretion of the authority which exercises it. In imposing a tax, the
legislature acts upon its constituents. This is, in general, a sufficient
security against erroneous and oppressive taxation.
The levy of the 30% tax is for a public purpose. It was imposed primarily
to answer the need for regulating the video industry, particularly because of
the rampant film piracy, the flagrant violation of intellectual property rights,
and the proliferation of pornographic video tapes. And while it was also an
objective of the DECREE to protect the movie industry, the tax remains a
valid imposition.
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 industry over
another.
FACTS: Tio is a videogram operator who assailed the constitutionality of
PD 1987 entitled An Act Creating the Videogram Regulatory Board with
broad powers to regulate and supervise the videogram industry. The PD
was also reinforced by PD 1994 which amended the National Internal
Revenue Code. The amendment provides that there shall be collected on
each processed video-tape cassette, ready for playback, regardless of
length, an annual tax of five pesos; Provided, that locally manufactured or
imported blank video tapes shall be subject to sales tax. The said law was
brought about by the need to regulate the sale of videograms as it has
adverse effects to the movie industry. The proliferation of videograms has
significantly lessened the revenue being acquired from the movie industry,
and that such loss may be recovered if videograms are to be taxed. Sec 10
of the PD imposes a 30% tax on the gross receipts payable to the LGUs.
Tio countered, among others, that the tax imposition provision is a rider and
is not germane to the subject matter of the PD.













BAGATSING vs. RAMIREZ
74 SCRA 306
GR No. L-41631, December 17, 1976
"The entrusting of the collection of the fees to private entities does not
destroy the public purpose of a tax ordinance."

FACTS: Aside from the issue on publication, private respondent bewails
that the market stall fees imposed in the disputed City Ordinance No. 7522,
which regulates public markets and prescribes fees for rentals of stalls, are
diverted to the exclusive private use of the Asiatic Integrated Corporation
since the collection of said fees had been let by the City of Manila to the
said corporation in a "Management and Operating Contract."

ISSUE: Does the delegation of the collection of taxes to a private entity
invalidates a tax ordinance and defeats its public purpose?

HELD: No. The assumption is of course saddled on erroneous premise.
The fees collected do not go direct to the private coffers of the corporation.
Ordinance No. 7522 was not made for the corporation but for the purpose
of raising revenues for the city. That is the object it serves. The entrusting
of the collection of the fees does not destroy the public purpose of the
ordinance. So long as the purpose is public, it does not matter whether the
agency through which the money is dispensed is public or private. The right
to tax depends upon the ultimate use, purpose and object for which the
fund is raised. It is not dependent on the nature or character of the person
or corporation whose intermediate agency is to be used in applying it. The
people may be taxed for a public purpose, although it be under the
direction of an individual or private corporation.




BAGATSING vs. RAMIREZ
Facts:
Municipal Board of Manila enacted Ordinance No. 7522, "AN ORDINANCE
REGULATING THEOPERATION OF PUBLIC MARKETS AND PRESCRIBING FEES
FOR THE RENTALS OF STALLSAND PROVIDING PENALTIES FOR VIOLATION
THEREOF AND FOR OTHER PURPOSES." Thepetitioner City Mayor, Ramon D.
Bagatsing, approved the ordinance.
Respondent Federation of Manila Market Vendors, Inc. commenced a Civil Case before
the CFI byrespondent Judge, seeking the declaration of nullity of Ordinance No. 7522
for the reason that (a)the publication requirement under the Revised Charter of the City
of Manila has not been compliedwith; (b) the Market Committee was not given any
participation in the enactment of the ordinance, asenvisioned by Republic Act 6039; (c)
Section 3 (e) of the Anti-Graft and Corrupt Practices Act hasbeen violated; and (d) the
ordinance would violate Presidential Decree No. 7 of September 30, 1972prescribing
the collection of fees and charges on livestock and animal products.
Private respondent also bewails that the market stall fees imposed in the disputed
ordinance arediverted to the exclusive private use of the Asiatic Integrated Corporation
since the collection of saidfees had been let by the City of Manila to the said corporation
in a "Management and OperatingContract."
Resolving the accompanying prayer for the issuance of a writ of preliminary injunction,
respondentJudge issued an order denying the plea for failure of the respondent
Federation of Manila MarketVendors, Inc. to exhaust the administrative remedies
outlined in the Local Tax Code.
After due hearing on the merits, respondent Judge rendered another decision, declaring
the nullity of Ordinance No. 7522 of the City of Manila on the primary ground of non-
compliance with the requirement of publication under the Revised City Charter.
Petitioners moved for reconsideration of the adverse decision, stressing that (a) only a p
ost-publication is required by the Local Tax Code; and (b) private respondent failed to
exhaust all administrative remedies before instituting an action in court.
Respondent Judge denied the motion. Hence petitioners brought the matter to
the Supreme Courtthrough the a petition for review on certiorari.


Abra Valley College v. Aquino

[GR L-39086, 15 June 1988]

Facts: Petitioner Abra Valley College is an educational corporation and
institution of higher learning duly incorporated with the SEC in 1948. On 6
July 1972, the Municipal and Provincial treasurers (Gaspar Bosque and
Armin Cariaga, respectively) and issued a Notice of Seizure upon the
petitioner for the college lot and building (OCT Q-83) for the satisfaction of
said taxes thereon. The treasurers served upon the petitioner a Notice of
Sale on 8 July 1972, the sale being held on the same day. Dr. Paterno
Millare, then municipal mayor of Bangued, Abra, offered the highest bid of
P 6,000 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 on 10 July 1972 in the court a quo to annul
and declare void the Notice of Seizure and the Notice of Sale of its lot
and building located at Bangued, Abra, for non-payment of real estate
taxes and penalties amounting to P5,140.31. On 12 April 1973, the parties
entered into a stipulation of facts adopted and embodied by the trial court in
its questioned decision. The trial court ruled for the government, holding
that the second floor of the building is being used by the director for
residential purposes and that the ground floor used and rented by Northern
Marketing Corporation, a commercial establishment, and thus the property
is not being used exclusively for educational purposes. Instead of
perfecting an appeal, petitioner availed of the instant petition for review on
certiorari with prayer for preliminary injunction before the Supreme Court,
by filing said petition on 17 August 1974.

The Supreme Court affirmed the decision of the CFI Abra (Branch I)
subject to the modification that half of the assessed tax be returned to the
petitioner. The modification is derived from the fact that the ground floor is
being used for commercial purposes (leased) and the second floor being
used as incidental to education (residence of the director).

Issue: Should there be tax exemption?

Ruling:
Interpretation of the phrase used exclusively for educational
purposes. Section 22, paragraph 3, Article VI, of the then 1935 Philippine
Constitution, expressly grants exemption from realty taxes for Cemeteries,
churches and parsonages or convents appurtenant thereto, and all lands,
buildings, and improvements used exclusively for religious, charitable or
educational purposes. This constitution is relative to Section 54, paragraph
c, Commonwealth Act 470 as amended by RA 409 (Assessment Law). An
institution used exclusively for religious, charitable and educational
purposes, and as such, it is entitled to be exempted from taxation;
notwithstanding that it keeps a lodging and a boarding house and maintains
a restaurant for its members (YMCA case). A lot which is not used for
commercial purposes but serves solely as a sort of lodging place, also
qualifies for exemption because this constitutes incidental use in religious
functions (Bishop of Nueva Segovia case).

Exemption in favour of property used exclusively for charitable or
educational purposes is not limited to property actually indispensable
therefor but extends to facilities which are incidental to and reasonably
necessary for the accomplishment of said purposes (Herrera v. Quezon
City Board of Assessment Appeals). While the Court allows a more liberal
and non-restrictive interpretation of the phrase exclusively used for
educational purposes, reasonable emphasis has always been made that
exemption extends to facilities which are incidental to and reasonably
necessary for the accomplishment of the main purposes. The use of the
school building or lot for commercial purposes is neither contemplated by
law, nor by jurisprudence. In the case at bar, the lease of the first floor of
the building to the Northern Marketing Corporation cannot by any stretch of
the imagination be considered incidental to the purpose of education.


FACTS: Petitioner, an educational corporation and institution of higher
learning duly incorporated with the Securities and Exchange Commission in
1948, filed a complaint to annul and declare void the Notice of Seizure
and the Notice of Sale of its lot and building located at Bangued, Abra, for
non-payment of real estate taxes and penalties amounting to P5,140.31.
Said Notice of Seizure by respondents Municipal Treasurer and Provincial
Treasurer, defendants below, was issued for the satisfaction of the said
taxes thereon.

The parties entered into a stipulation of facts adopted and embodied by the
trial court in its questioned decision. The trial court ruled for the
government, holding that the second floor of the building is being used by
the director for residential purposes and that the ground floor used and
rented by Northern Marketing Corporation, a commercial establishment,
and thus the property is not being used exclusively for educational
purposes. Instead of perfecting an appeal, petitioner availed of the instant
petition for review on certiorari with prayer for preliminary injunction before
the Supreme Court, by filing said petition on 17 August 1974.











LUNG CENTER OF THE PHILIPPINES vs. QUEZON CITY and CONSTANTINO P.
ROSAS
G.R. No. 144104 June 29, 2004


FACTS: The petitioner, a non-stock and non-profit entity is the registered owner of a
parcel of land where erected in the middle of the aforesaid lot is a hospital known as the
Lung Center of the Philippines. A big space at the ground floor is being leased to private
parties, for canteen and small store spaces, and to medical or professional practitioners
who use the same as their private clinics for their patients whom they charge for their
professional services. Almost one-half of the entire area on the left side of the building
along Quezon Avenue is vacant and idle, while a big portion on the right side, at the
corner of Quezon Avenue and Elliptical Road, is being leased for commercial purposes
to a private enterprise known as the Elliptical Orchids and Garden Center.

On June 7, 1993, both the land and the hospital building of the petitioner were assessed
for real property taxes in the amount of P4, 554,860 by the City Assessor of Quezon
City but the former filed a Claim for Exemption from real property taxes with the City
Assessor, predicated on its claim that it is a charitable institution.

ISSUE:

Whether or not the petitioners real properties are exempted from realty taxes.

RULING:

Even as we find that the petitioner is a charitable institution, those portions of its real
property that are leased to private entities are not exempt from real property taxes as
these are not actually, directly and exclusively used for charitable purposes. What is
meant by actual, direct and exclusive use of the property for charitable purposes is the
direct and immediate and actual application of the property itself to the purposes for
which the charitable institution is organized.

Hence, a claim for exemption from tax payments must be clearly shown and based on
language in the law too plain to be mistaken. Under Section 2 of Presidential Decree
No. 1823, the petitioner does not enjoy any property tax exemption privileges for its real
properties as well as the building constructed thereon. If the intentions were otherwise,
the same should have been among the enumeration of tax exempt privileges under
Section 2.
LUNG CENTER VS. QUEZON CITY
GR 144104 June29, 2004
En Banc, Callejo J:

Facts:
The lung center is a charitable institution within the context of 1973 and
1987 constitutions. The elements considered in determining a charitable
institution are: the statue creating the enterprise; its corporate purposes;
constitution and by-laws, methods of administration, nature of actual work
performed, character of the services rendered, indefiniteness of the
beneficiaries, and the use occupation of properties. As a gen. principle, a
charitable institution doe not lose its character as such and its exemption
form taxes simply because it derives income from paying patients, or
receives subsidies from government; and no money insures to the private
benefit of the persons managing or operating the institution.

Issue:
Whether or not the real properties of the lung center are exempt from real
property taxes.
Ruling:
Partly No. Those portions of its real property that are leased to private
entities are not exempt from actually, direct and exclusively used for
charitable purpose. Under PD 1823, the lung center does not enjoy any
property tax exemption privileges for its real properties as well as the
building constructed thereon.
The property tax exemption under Sec. 28(3), Art. Vi of the property taxes
only. This provision was implanted by Sec.243 (b) of RA 7160.which
provides that in order to be entitled to the exemption, the lung center must
be able to prove that: it is a charitable institution and; its real properties are
actually, directly and exclusively used for charitable purpose. Accordingly,
the portions occupied by the hospital used for its patients are exempt from
real property taxes while those leased to private entities are not exempt
from such taxes.
LUNG CENTER OF THE PHILIPPINES vs. QUEZON CITY and CONSTANTINO
P. ROSAS

Facts:
The petitioner Lung Center of the Philippines is a non-stock and non-profit
entity established by virtue of Presidential Decree No. 1823. It is the registered
owner of a parcel of land, located at Quezon Avenue corner Elliptical Road,
Central District, Quezon City. Erected in the middle of the aforesaid lot is a
hospital known as the Lung Center of the Philippines. A big space at the ground
floor is being leased to private parties, for canteen and small store spaces, and to
medical or professional practitioners who use the same as their private clinics for
their patients whom they charge for their professional services. Almost one-half
of the entire area on the left side of the building along Quezon Avenue is vacant
and idle, while a big portion on the right side, at the corner of Quezon Avenue
and Elliptical Road, is being leased for commercial purposes to a private
enterprise known as the Elliptical Orchids and Garden Center.
The petitioner accepts paying and non-paying patients. It also renders
medical services to out-patients, both paying and non-paying. Aside from its
income from paying patients, the petitioner receives annual subsidies from the
government

Petitioner was assess by the local government of Quezon city for real property
tax concerning said lot. Petitioner protested said assessment claiming that it is
exempt. However, petitioner's claim for tax exemption was denied by both the
City assessor and Board of Assessment Appeals. hence this petition.

Issue:
(a) whether the petitioner is a charitable institution within the context of
Presidential Decree No. 1823 and the 1973 and 1987 Constitutions and
Section 234(b) of Republic Act No. 7160; and
(b) whether the real properties of the petitioner are exempt from real
property taxes.

Ruling:
As to the first issue, the Court held that petitioner is a charitable institution
within the context of the 1973 and 1987 Constitutions.

Explained the Court, to determine whether an enterprise is a charitable
institution/entity or not, the elements which should be considered include
thestatute creating the enterprise, its corporate purposes, its constitution and by-
laws, the methods of administration, the nature of the actual work performed,
thecharacter of the services rendered, the indefiniteness of the beneficiaries, and
theuse and occupation of the properties.
The petitioner met the foregoing requirements, hence a charitable entity.
Under P.D. No. 1823, the petitioner is a non-profit and non-stock corporation
which is to be administered by the Office of the President of the Philippines with
the Ministry of Health and the Ministry of Human Settlements. It was organized
for the welfare and benefit of the Filipino people principally to help combat the
high incidence of lung and pulmonary diseases in the Philippines.

Moreover, as to the contention that petitioner is not a charitable institution
since it admits paying patients and receives donations, the Court said: "as a
general principle, a charitable institution does not lose its character as such and
its exemption from taxes simply because it derives income from paying patients,
whether out-patient, or confined in the hospital, or receives subsidies from the
government, so long as the money received is devoted or used altogether to the
charitable object which it is intended to achieve; and no money inures to the
private benefit of the persons managing or operating the institution."

In this case, the petitioner adduced substantial evidence that it spent its
income, including the subsidies from the government for 1991 and 1992 for its
patients and for the operation of the hospital. It even incurred a net loss in 1991
and 1992 from its operations.

As to the second issue, the Court held that those portions of petitioner's real
property that are leased to private entities are not exempt from real property
taxes as these are not actually, directly and exclusively used for charitable
purposes.

Petitioner's argument that it property is exempt from real property tax per its
charter does not hold water. Section 2 of its charter provides that- "being a non-
profit, non-stock corporation organized primarily to help combat the high
incidence of lung and pulmonary diseases in the Philippines, all donations,
contributions, endowments and equipment and supplies to be imported by
authorized entities or persons and by the Board of Trustees of the Lung Center of
the Philippines, Inc., for the actual use and benefit of the Lung Center, shall be
exempt from income and gift taxes, the same further deductible in full for the
purpose of determining the maximum deductible amount under Section 30,
paragraph (h), of the National Internal Revenue Code, as amended. The Lung
Center of the Philippines shall be exempt from the payment of taxes, charges
and fees imposed by the Government or any political subdivision or
instrumentality thereof with respect to equipment purchases made by, or for the
Lung Center.

It is plain as day that under the decree, the petitioner does not enjoy any
property tax exemption privileges for its real properties as well as the building
constructed thereon. If the intentions were otherwise, the same should have
been among the enumeration of tax exempt privileges under Section 2.

Corollarily, petitioner's claim that it is exempt from real property tax per Section
28, Art. XIV of the Philippine Constitution is not correct.

Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 [LGC] in order
to be entitled to the exemption, the petitioner is burdened to prove, by clear and
unequivocal proof, that (a) it is a charitable institution; and (b) its real properties
areACTUALLY, DIRECTLY and EXCLUSIVELY used for charitable purposes.

Exclusive is defined as possessed and enjoyed to the exclusion of others;
debarred from participation or enjoyment; and exclusively is defined, in a
manner to exclude; as enjoying a privilege exclusively. If real property is used
for one or more commercial purposes, it is not exclusively used for the exempted
purposes but is subject to taxation. The words dominant use or principal use
cannot be substituted for the words used exclusively without doing violence to
the Constitutions and the law. Solely is synonymous with exclusively.

Therefore, What is meant by actual, direct and exclusive use of the property
for charitable purposes is the direct and immediate and actual application of the
property itself to the purposes for which the charitable institution is organized. It
is not the use of the income from the real property that is determinative of
whether the property is used for tax-exempt purposes.

In this case the petitioner failed to discharge its burden to prove that the
entirety of its real property is actually, directly and exclusively used for charitable
purposes. While portions of the hospital are used for the treatment of patients
and the dispensation of medical services to them, whether paying or non-paying,
other portions thereof are being leased to private individuals for their clinics and a
canteen. Further, a portion of the land is being leased to a private individual for
her business enterprise.

Accordingly, held the Court, the portions of the land leased to private entities
as well as those parts of the hospital leased to private individuals are not exempt
from such taxes. On the other hand, the portions of the land occupied by the
hospital and portions of the hospital used for its patients, whether paying or non-
paying, are exempt from real property taxes.



BAGATSING vs. RAMIREZ
The chief question to be decided in this case is what law shall govern the
publication of a tax ordinance enacted by the Municipal Board of Manila,
the Revised City Charter (R.A. 409, as amended), which requires
publication of the ordinance before its enactment and after its approval, or
the Local Tax Code (P.D. No. 231), which only demands publication after
approval.
On June 12, 1974, the Municipal Board of Manila enacted Ordinance No.
7522, "AN ORDINANCE REGULATING THE OPERATION OF PUBLIC
MARKETS AND PRESCRIBING FEES FOR THE RENTALS OF STALLS
AND PROVIDING PENALTIES FOR VIOLATION THEREOF AND FOR
OTHER PURPOSES." The petitioner City Mayor, Ramon D. Bagatsing,
approved the ordinance on June 15, 1974.
On February 17, 1975, respondent Federation of Manila Market Vendors,
Inc. commenced Civil Case 96787 before the Court of First Instance of
Manila presided over by respondent Judge, seeking the declaration of
nullity of Ordinance No. 7522 for the reason that (a) the publication
requirement under the Revised Charter of the City of Manila has not been
complied with; (b) the Market Committee was not given any participation in
the enactment of the ordinance, as envisioned by Republic Act 6039; (c)
Section 3 (e) of the Anti-Graft and Corrupt Practices Act has been violated;
and (d) the ordinance would violate Presidential Decree No. 7 of
September 30, 1972 prescribing the collection of fees and charges on
livestock and animal products.
Resolving the accompanying prayer for the issuance of a writ of preliminary
injunction, respondent Judge issued an order on March 11, 1975, denying
the plea for failure of the respondent Federation of Manila Market Vendors,
Inc. to exhaust the administrative remedies outlined in the Local Tax Code.
After due hearing on the merits, respondent Judge rendered its decision on
August 29, 1975, declaring the nullity of Ordinance No. 7522 of the City of
Manila on the primary ground of non-compliance with the requirement of
publication under the Revised City Charter. Respondent Judge ruled:
There is, therefore, no question that the ordinance in question
was not published at all in two daily newspapers of general
circulation in the City of Manila before its enactment. Neither
was it published in the same manner after approval, although it
was posted in the legislative hall and in all city public markets
and city public libraries. There being no compliance with the
mandatory requirement of publication before and after approval,
the ordinance in question is invalid and, therefore, null and void.
Petitioners moved for reconsideration of the adverse decision, stressing
that (a) only a post-publication is required by the Local Tax Code; and (b)
private respondent failed to exhaust all administrative remedies before
instituting an action in court.
On September 26, 1975, respondent Judge denied the motion.
Forthwith, petitioners brought the matter to Us through the present petition
for review on certiorari.
We find the petition impressed with merits.
1. The nexus of the present controversy is the apparent conflict between
the Revised Charter of the City of Manila and the Local Tax Code on the
manner of publishing a tax ordinance enacted by the Municipal Board of
Manila. For, while Section 17 of the Revised Charter provides:
Each proposed ordinance shall be published in two daily
newspapers of general circulation in the city, and shall not be
discussed or enacted by the Board until after the third day
following such publication. * * * Each approved ordinance * * *
shall be published in two daily newspapers of general
circulation in the city, within ten days after its approval; and
shall take effect and be in force on and after the twentieth day
following its publication, if no date is fixed in the ordinance.
Section 43 of the Local Tax Code directs:
Within ten days after their approval, certified true copies of all
provincial, city, municipal and barrioordinances levying or
imposing taxes, fees or other charges shall be published for
three consecutive days in a newspaper or publication widely
circulated within the jurisdiction of the local government, or
posted in the local legislative hall or premises and in two other
conspicuous places within the territorial jurisdiction of the local
government. In either case, copies of all provincial, city,
municipal and barrio ordinances shall be furnished the
treasurers of the respective component and mother units of a
local government for dissemination.
In other words, while the Revised Charter of the City of Manila requires
publication before the enactment of the ordinance and after the approval
thereof in two daily newspapers of general circulation in the city, the Local
Tax Code only prescribes for publication after the approval of "ordinances
levying or imposing taxes, fees or other charges" either in a newspaper or
publication widely circulated within the jurisdiction of the local government
or by posting the ordinance in the local legislative hall or premises and in
two other conspicuous places within the territorial jurisdiction of the local
government. Petitioners' compliance with the Local Tax Code rather than
with the Revised Charter of the City spawned this litigation.
There is no question that the Revised Charter of the City of Manila is
a special act since it relates only to the City of Manila, whereas the Local
Tax Code is a general law because it applies universally to all local
governments. Blackstone defines general law as a universal rule affecting
the entire community and special law as one relating to particular persons
or things of a class.
1
And the rule commonly said is that a prior special law
is not ordinarily repealed by a subsequent general law. The fact that one is
special and the other general creates a presumption that the special is to
be considered as remaining an exception of the general, one as a general
law of the land, the other as the law of a particular case.
2
However, the
rule readily yields to a situation where the special statute refers to a subject
in general, which the general statute treats in particular. The exactly is the
circumstance obtaining in the case at bar. Section 17 of the Revised
Charter of the City of Manila speaks of "ordinance" in general, i.e.,
irrespective of the nature and scope thereof,whereas, Section 43 of the
Local Tax Code relates to "ordinances levying or imposing taxes, fees or
other charges" in particular. In regard, therefore, to ordinances in general,
the Revised Charter of the City of Manila is doubtless dominant, but, that
dominant force loses its continuity when it approaches the realm of
"ordinances levying or imposing taxes, fees or other charges" in particular.
There, the Local Tax Code controls. Here, as always, a general provision
must give way to a particular provision.
3
Special provision governs.
4
This
is especially true where the law containing the particular provision was
enacted later than the one containing the general provision. The City
Charter of Manila was promulgated on June 18, 1949 as against the Local
Tax Code which was decreed on June 1, 1973. The law-making power
cannot be said to have intended the establishment of conflicting and hostile
systems upon the same subject, or to leave in force provisions of a prior
law by which the new will of the legislating power may be thwarted and
overthrown. Such a result would render legislation a useless and Idle
ceremony, and subject the law to the reproach of uncertainty and
unintelligibility.
5

The case of City of Manila v. Teotico
6
is opposite. In that case, Teotico
sued the City of Manila for damages arising from the injuries he suffered
when he fell inside an uncovered and unlighted catchbasin or manhole on
P. Burgos Avenue. The City of Manila denied liability on the basis of the
City Charter (R.A. 409) exempting the City of Manila from any liability for
damages or injury to persons or property arising from the failure of the city
officers to enforce the provisions of the charter or any other law or
ordinance, or from negligence of the City Mayor, Municipal Board, or other
officers while enforcing or attempting to enforce the provisions of the
charter or of any other law or ordinance. Upon the other hand, Article 2189
of the Civil Code makes cities liable for damages for the death of, or injury
suffered by any persons by reason of the defective condition of roads,
streets, bridges, public buildings, and other public works under their control
or supervision. On review, the Court held the Civil Code controlling. It is
true that, insofar as its territorial application is concerned, the Revised City
Charter is a special law and the subject matter of the two laws, the Revised
City Charter establishes a general rule of liability arising from negligence in
general, regardless of the object thereof, whereas the Civil Code
constitutes a particular prescription for liability due to defective streets in
particular. In the same manner, the Revised Charter of the City prescribes
a rule for the publication of "ordinance" in general, while the Local Tax
Code establishes a rule for the publication of "ordinance levying or
imposing taxes fees or other charges in particular.
In fact, there is no rule which prohibits the repeal even by implication of a
special or specific act by a general or broad one.
7
A charter provision may
be impliedly modified or superseded by a later statute, and where a statute
is controlling, it must be read into the charter notwithstanding any particular
charter provision.
8
A subsequent general law similarly applicable to all
cities prevails over any conflicting charter provision, for the reason that a
charter must not be inconsistent with the general laws and public policy of
the state.
9
A chartered city is not an independent sovereignty. The state
remains supreme in all matters not purely local. Otherwise stated, a charter
must yield to the constitution and general laws of the state, it is to have
read into it that general law which governs the municipal corporation and
which the corporation cannot set aside but to which it must yield. When a
city adopts a charter, it in effect adopts as part of its charter general law of
such character.
10

2. The principle of exhaustion of administrative remedies is strongly
asserted by petitioners as having been violated by private respondent in
bringing a direct suit in court. This is because Section 47 of the Local Tax
Code provides that any question or issue raised against the legality of any
tax ordinance, or portion thereof, shall be referred for opinion to the city
fiscal in the case of tax ordinance of a city. The opinion of the city fiscal is
appealable to the Secretary of Justice, whose decision shall be final and
executory unless contested before a competent court within thirty (30)
days. But, the petition below plainly shows that the controversy between
the parties is deeply rooted in a pure question of law: whether it is the
Revised Charter of the City of Manila or the Local Tax Code that should
govern the publication of the tax ordinance. In other words, the dispute is
sharply focused on the applicability of the Revised City Charter or the Local
Tax Code on the point at issue, and not on the legality of the imposition of
the tax. Exhaustion of administrative remedies before resort to judicial
bodies is not an absolute rule. It admits of exceptions. Where the question
litigated upon is purely a legal one, the rule does not apply.
11
The principle
may also be disregarded when it does not provide a plain, speedy and
adequate remedy. It may and should be relaxed when its application may
cause great and irreparable damage.
12

3. It is maintained by private respondent that the subject ordinance is not a
"tax ordinance," because the imposition of rentals, permit fees, tolls and
other fees is not strictly a taxing power but a revenue-raising function, so
that the procedure for publication under the Local Tax Code finds no
application. The pretense bears its own marks of fallacy. Precisely, the
raising of revenues is the principal object of taxation. Under Section 5,
Article XI of the New Constitution, "Each local government unit shall have
the power to create its own sources of revenue and to levy taxes, subject to
such provisions as may be provided by law."
13
And one of those sources of
revenue is what the Local Tax Code points to in particular: "Local
governments may collect fees or rentals for the occupancy or use of public
markets and premises * * *."
14
They can provide for and regulate market
stands, stalls and privileges, and, also, the sale, lease or occupancy
thereof. They can license, or permit the use of, lease, sell or otherwise
dispose of stands, stalls or marketing privileges.
15

It is a feeble attempt to argue that the ordinance violates Presidential
Decree No. 7, dated September 30, 1972, insofar as it affects livestock and
animal products, because the said decree prescribes the collection of other
fees and charges thereon "with the exception of ante-mortem and post-
mortem inspection fees, as well as the delivery, stockyard and slaughter
fees as may be authorized by the Secretary of Agriculture and Natural
Resources."
16
Clearly, even the exception clause of the decree itself
permits the collection of the proper fees for livestock. And the Local Tax
Code (P.D. 231, July 1, 1973) authorizes in its Section 31: "Local
governments may collect fees for the slaughter of animals and the use of
corrals * * * "
4. The non-participation of the Market Committee in the enactment of
Ordinance No. 7522 supposedly in accordance with Republic Act No. 6039,
an amendment to the City Charter of Manila, providing that "the market
committee shall formulate, recommend and adopt, subject to the ratification
of the municipal board, and approval of the mayor, policies and rules or
regulation repealing or maneding existing provisions of the market code"
does not infect the ordinance with any germ of invalidity.
17
The function of
the committee is purely recommendatory as the underscored phrase
suggests, its recommendation is without binding effect on the Municipal
Board and the City Mayor. Its prior acquiescence of an intended or
proposed city ordinance is not a condition sine qua non before the
Municipal Board could enact such ordinance. The native power of the
Municipal Board to legislate remains undisturbed even in the slightest
degree. It can move in its own initiative and the Market Committee cannot
demur. At most, the Market Committee may serve as a legislative aide of
the Municipal Board in the enactment of city ordinances affecting the city
markets or, in plain words, in the gathering of the necessary data, studies
and the collection of consensus for the proposal of ordinances regarding
city markets. Much less could it be said that Republic Act 6039 intended to
delegate to the Market Committee the adoption of regulatory measures for
the operation and administration of the city markets. Potestas delegata non
delegare potest.
5. Private respondent bewails that the market stall fees imposed in the
disputed ordinance are diverted to the exclusive private use of the Asiatic
Integrated Corporation since the collection of said fees had been let by the
City of Manila to the said corporation in a "Management and Operating
Contract." The assumption is of course saddled on erroneous premise. The
fees collected do not go direct to the private coffers of the corporation.
Ordinance No. 7522 was not made for the corporation but for the purpose
of raising revenues for the city. That is the object it serves. The entrusting
of the collection of the fees does not destroy the public purpose of the
ordinance. So long as the purpose is public, it does not matter whether the
agency through which the money is dispensed is public or private. The right
to tax depends upon the ultimate use, purpose and object for which the
fund is raised. It is not dependent on the nature or character of the person
or corporation whose intermediate agency is to be used in applying it. The
people may be taxed for a public purpose, although it be under the
direction of an individual or private corporation.
18

Nor can the ordinance be stricken down as violative of Section 3(e) of the
Anti-Graft and Corrupt Practices Act because the increased rates of market
stall fees as levied by the ordinance will necessarily inure to the
unwarranted benefit and advantage of the corporation.
19
We are
concerned only with the issue whether the ordinance in question is intra
vires. Once determined in the affirmative, the measure may not be
invalidated because of consequences that may arise from its
enforcement.
20

ACCORDINGLY, the decision of the court below is hereby reversed and
set aside. Ordinance No. 7522 of the City of Manila, dated June 15, 1975,
is hereby held to have been validly enacted. No. costs.
SO ORDERED.