REYES V.

ALMANZOR REYES
TOPIC: Constitutional Limitations on Taxation
DOCTRINE: Power to tax is not unconfined as there are
restrictions. Both due process and equal protection
clauses of the constitution may be invoked to invalidate in
appropriate cases a revenue measure. Power to tax is not
the power to destroy while the Court sits
FACTS:
1. Reyess [petitioners] are owners of parcels of land
situated in Tondo and Sta. Cruz Manila, which were
leased and entirely occupied.
2. Tenants were paying monthly rentals not exceeding
P300. On July 14, 1971, RA 6359 was enacted.
a. prohibits an increase in monthly rentals of
dwelling units or of lands, where rentals do
not exceed P300.00 a month, one year from
its enactment, but allowing not more than
10% increase thereafter.
b. Suspended par. 1 of Art. 1673 of the Civil
Code for 2 years from its effectivity.
Disallowing ejectment of lessees upon
expiration of the usual legal period of lease.
3. PD No. 20 amended RA 6359, making absolute the
prohibition to increase monthly rentals below 300
and indefinitely suspending the provision of the civil
code, except leases with a definite period.
4. Petitioners were precluded from raising rentals and
ejecting the tenants.
5. Assessor of Manila re-classified and re-assessed the
value of the subject properties based on the
schedule of market values. The revision led to an
increase in the tax rates; hence, petitioners filed a
memorandum of disagreement with the board of
tax assessment appeals.

a. Petitioners argue that the reassessments

made
were
excessive,
unwarranted,
inequitable,
confiscatory,
and
unconstitutional. Considering that taxes
imposed upon them greatly exceeded the
annual income derived from their properties.
b. Income approach should have been used in
determining the land values.
6. Board of Tax Assessment Appeals- declared
assessment valid.
7. CBA- affirmed BTA.
ISSUE: WON Comparable sales approach shall be the
method used in fixing assessed value of the Appellants
properties. NO.
RATIO:
1. Both Comparable sales approach and income
approach are generally acceptable methods of
appraisal for taxation purposes. However, the
propriety of one as against the other would depend
on several factors.
2. Art. VIII Sec. 17 [1] of 1973 Constitution- the rule of
taxation must not only be uniform, but must also be
progressive.
3. UNIFORMITY- principle by which all taxable articles
or kinds of property of the same class shall be
taxed the same rate. EQUITABLE- burden falls on
those better able to pay. PROGRESSIVE- rate goes
up depending on the resources of the person
affected.
4. Due process clause in the constitution may be
invoked where a statute is so arbitrary that it finds
no support in the Constitution.
a. Where it can shorn to amount to confiscation
of property.

5. Under the Real Property Tax Code [PD 464], it is

declared that the first Fundamental Principle to
guide the appraisal and assessment of real
property for taxation purposes is that the property
must be appraised at its current and fair market
value.

6. Collection of taxes should be made in accordance

with law as any arbitrariness will negate the very
reason for government itself.
DISPOSITIVE: Petition Granted.