Ormoc Sugar Co. v.

Treasurer of Ormoc City Bengzon,

JP, J.
Petitioner: Ormoc Sugar Co.
Respondent: Treasurer, Municipal Board, and Mayor of
Ormoc City
Concept: Constitutional Limitations: Equal Process Clause
Brief Facts: An ordinance was passed in Ormoc City,
imposing on any and all productions of centrifugal sugar
milled at the Ormoc Sugar Co. a municipal tax equivalent
to 1% per export sale to the US. Ormoc Sugar paid the
taxes under protest, and assailed the constitutionality of
the ordinance, for being violative of the equal protection
clause.
Doctrine: Classification, to be reasonable, should be in
terms applicable to future conditions as well. The taxing
ordinance should not be singular and exclusive as to
exclude any subsequently established sugar central, of
the class of the plaintiff, for the coverage of the tax.
FACTS:
1. In 1964, the Ormoc City Municipal Board passed
a municipal tax ordinance (Ordinance No. 4, s.
1964) imposing on any and all productions of
centrifugal sugar milled at the Ormoc Sugar Co.
1% per export sale to the US and other foreign
countries.
2. Though referred to as a production tax, the
imposition actually amounts to a tax on the
export of centrifugal sugar produced at Ormoc
Sugar Co.
3. For production of sugar alone is not taxable; the
only time the tax applies is when the sugar
produced is exported.
4. Ormoc Sugar paid under protest Php 7, 087.50.
5. The company then filed before CFI Leyte.

The ordinance shouldnt be singular and

exclusive as to exclude any subsequently
established sugar central, of the same class as
plaintiff, for coverage of the tax.
o Although Ormoc Sugar Co. is the only sugar
central in Ormoc City at the time, the
classification, to be reasonable, should be in
terms applicable to future conditions as well.
o In the case at bar, even if later a similar
company is set up, it cannot be subject to
the tax because the ordinance expressly
points only to Ormoc Sugar Co. as the entity
to be levied upon.
A classification is reasonable where:
(1) It is based on substantial distinctions which
make real differences;
(2) These are germane to the purpose of the
law;
(3) The classification applies not only to
present conditions but also to future
conditions which are substantially identical to
those of the present;
(4) The classification applies only to those
who belong to the same class.
The questioned ordinance does not meet the
requisites.
DISPOSITIVE: Decision appealed is REVERSED. Challenged
Ordinance is UNCONSTITUTIONAL.
NOTES:
Digested by: Andr

Ormoc Sugar: The ordinance is violative of the equal

protection clause and the rule of uniformity of taxation,
among other things.
o It singled out Ormoc Sugar Co. as being
liable.
o Ormoc Sugar Co. was the only sugar central
in Ormoc City at the time.
The CFI upheld the Ormoc City Ordinance.
CFI Leyte: Ordinance No. 4, s. 1964 is constitutional.
o The taxing power of Ormoc City is
broadened by the Local Autonomy Act to
include all other forms of taxes, licenses or
fees not excluded in its charter.
Hence this appeal at the SC.
ISSUES:
1. WON the Ordinance violates the Equal Protection
Clause and the Uniformity of Taxation. (YES)
RATIO:
1. YES. The ordinance is discriminatory for it taxes only
centrifugal sugar milled at the Ormoc Sugar Company,
Inc. and no other.
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