Pepsi-Cola Bottling Co. v.

City of Butuan another x x x or one entrusted with the business of another or to whom is consigned or
shipped x x x cases of hard liquor[s] or soft drinks every month for resale, either retail or
Concepcion G.R. No. L-22814, August 28, 1968 wholesale.”

For classification to be valid, the following must concur: (1) it is based upon substantial
distinctions; (2) these are germane to the purpose of the legislation or ordinance; (3) the
RATIO DECIDENDI The uniformity required under the Constitution is not absolute uniformity. classification applies to present conditions and future ones substantially identical to those of
It only requires that people belonging to the same class be taxed uniformly. For classification the present; and (4) the classification applies equally to those belonging to the same class.
to be valid, the following must concur: (1) it is based upon substantial distinctions; (2) these The ordinance exempts local dealers not acting for or in behalf of outside merchants from
are germane to the purpose of the legislation or ordinance; (3) the classification applies to paying the tax it imposes. It only applies to local dealers acting for or in behalf of outside
present conditions and future ones substantially identical to those of the present; and (4) the merchants. Butuan did not offer any explanation as to why a distinction between the two was
classification applies equally to those belonging to the same class. made. If the purpose of the tax measure was merely to create a new revenue source by
levying tax upon the sale of soft drinks, there is no reason for favoring one over the other.
FACTS:
WHEREFORE, the decision appealed from is hereby reversed, and another one shall be
Pepsi-Cola Bottling Co. of the Philippines (Pepsi-Cola) has a storage facility in the City entered annulling Ordinance No. 110, as amended by Ordinance No. 122, and sentencing
of Butuan for its soft drinks manufactured in Cebu. Products from this facility are sold to the City of Butuan to refund to plaintiff herein the amounts collected from and paid under
consumers in the said city. The City of Butuan (Butuan) enacted Ordinance No. 110, which protest by the latter, with interest thereon at the legal rate from the date of the promulgation
imposed a tax on dealers engaged in selling soft drinks or carbonated drinks. Ordinance No. of this decision, in addition to the costs, and defendants herein are, accordingly, restrained
110 was later amended by Ordinance No. 122. Consequently, the tax was now imposed on and prohibited permanently from enforcing said Ordinance, as amended. It is so ordered.
any agent and/or consignee of any person, association, partnership, company, or corporation
engaged in selling x x x soft drinks or carbonated drinks. According to the Court, this
obviously pertains to a situation wherein an outside dealer taps a local agent and/or
consignee to sell his products in said agent’s and/or consignee’s locality. Since Pepsi-Cola
has a storage facility in the city receiving soft drinks from Cebu, and since said facility sells
the same carbonated beverages to the people of the city, it was assessed the tax imposed by
Ordinance 110, as amended by Ordinance 122 (Ordinance 110, as amended). Pepsi-Cola ASSOCIATION OF CUSTOMS BROKERS, INC and MANLAPIT v. MUNICIPAL BOARD
paid under protest. Pepsi-Cola brought the matter of recovering the amounts paid before the OF MANILA
Topic: local taxation – fundamental principles
lower court. It dismissed the complaint, hence this appeal.
Facts:
ISSUE: - In 1950, the Association of Customs Brokers (composed of all brokers and public
service operators of motor vehicles in Manila) and Manlapit, an operator-member
W/N the tax imposed by Ordinance 110, as amended, violates the uniformity requirement. of said association filed a petition for declaratory relief challenging the validity of
Manila City Ordinance No. 3379:
HELD: o While the ordinance levies a so-called property tax, it is in reality a
license tax beyond the power of the Municipal Board
YES, Ordinance 110, as amended, unfairly singles out agents and/or consignees of outside o The ordinance is offensive against the rule of uniformity of taxation
dealers. o The levy constitutes double taxation
- City Fiscal
The Constitution (what is being referred to here is the 1935 Constitution) provides: “The rule o Ordinance imposes a property tax within the power of the City of Manila
under its Revised Charter (RA 409, se. 18(p))
of taxation shall be uniform and equitable. x x x” (See also par. 1, Sec. 28, Art. VI, 1987
 The municipal board has the power “to tax motor and other
Constitution) Ordinance 110, as amended, defines what it means by “agent” or “consignee,” vehicles operating within the City of Manila, the provisions of
to wit: “any person, association, partnership, company, or corporation who acts in the place of any existing law to the contrary notwithstanding.”
 o No violation of other 2 grounds important if we note that the ordinance intends to burden with the tax only those registered in
- CFI: petition dismissed; ordinance is valid the City of Manila as may be inferred from the word "operating" used therein. The word
"operating" denotes a connotation which is akin to a registration, for under the Motor Vehicle
Issue(s): Law no motor vehicle can be operated without previous payment of the registration fees”.

w/n Ordinance No. 3379 is valid

SC Ratio:
MISAEL P. VERA v. HON. SERAFIN R. CUEVAS, INSTITUTE OF EVAPORATED FILLED
MILK MANUFACTURERS OF THE PHILIPPINES, INC., CONSOLIDATED MILK COMPANY
No, it is invalid for levying an excise tax which is not within the scope of the City’s powers and
(PHIL.) INC., and MILK INDUSTRIES, INC. G.R. No. L-33693-94. May 31, 1979
for violating the rule on uniformity.

Under section 70(b) of the Motor Vehicles Law (Act No. 3392):

“No further fees than those fixed in this Act shall be exacted or demanded by any
public highway, bridge or ferry, or for the exercise of the profession of chauffeur, or FACTS: 
for the operation of any motor vehicle by the owner thereof: Provided, however,
That nothing in this Act shall be construed to exempt any motor vehicle from the
payment of any lawful and equitable insular, local or municipal property tax Private respondents (the companies) are engaged in the manufacture, sale and distribution
imposed thereupon. . .”
of filled milk products throughout the Philippines. Private respondent, Institute of Evaporated
This provision should be construed as limiting the broad grant of power conferred upon the
City of Manila by its Charter to impose taxes, such that only property taxes may be imposed Filled Milk Manufacturers of the Philippines, is a corporation organized for the principal
on motor vehicles operating within its territorial jurisdiction. purpose of upholding and maintaining at its highest the standards of local filled milk industry,

Sec. 1 of Ordinance No. 3379 denominates the tax imposed as ad valorem (meaning tax of which all the other private respondents are members.
proportional to value of the property) and while as a rule an ad valorem tax is a property tax,
such rule is not absolute. Rather, the character of the tax (property v. excise) must be
determined by its incidents, and from the natural and legal effect of the language employed in Civil Case No. 52276 is an action for declaratory relief with ex-parte petition for preliminary
the act or ordinance, and not by the name by which it is described, or by the mode adopted in
fixing its amount. Excise taxes are those imposed upon the performance of an act, enjoyment injunction wherein plaintiffs pray for an adjudication of their respective rights and obligations
of a privilege, or the engaging in an occupation.
in relation to the enforcement of Section 169 of the Tax Code against their filled milk
The purpose of the ordinance is to raise funds for the repair, maintenance and improvement products.
of the streets and bridges in said city, something which the Motor Vehicles Law already
addresses. The prohibition under sec. 70(b) is meant to prevent municipal corporations from
duplicating the levy since under sec. 73 of the same act, they already participate in the
distribution of the proceeds collected under the Motor Vehicles Law. “It is for this reason that The controversy arose when the Commissioner of Internal Revenue required the companies
we believe that the ordinance in question merely imposes a license fee although under the
to withdraw from the market all of their filled milk products which do not bear the inscription
cloak of an ad valorem tax to circumvent the prohibition above adverted to.”
required by Section 169 of the Tax Code within fifteen (15) days from receipt of the order with
a warning of action if they failed.
Moreover, the ordinance violates the rule of uniformity since “[i]t does not distinguish between
a motor vehicle hire and one which is purely for private use. Neither does it distinguish
between a motor vehicle registered in the City of Manila and one registered in another place Section of the Tax Code is as follows:
but occasionally comes to Manila and uses its streets and public highways. The distinction is
Section 169.        Inscription to be placed on skimmed milk. — All condensed skimmed milk Section 169 of the Tax code has been repealed by implication. It was enacted together with
and all milk in whatever form, from which the fatty part has been removed totally or in part, Sections 141 and 177, which were already repealed. Through it, Section 169 became a
sold or put on sale in the Philippines shall be clearly and legibly marked on its immediate merely declaratory provision, without a tax purpose, or a penal sanction.
containers, and in all the language in which such containers are marked, with the words,
"This milk is not suitable for nourishment for infants less than one year of age," or with other It was also apparent that Section 169 does not apply to filled milk. Following ejusdem
equivalent words. generis, the provision specifically stated skimmed milk which implies a restriction in scope of
the classes of milk.
The Court issued a writ of preliminary injunction which restrained the CIR from requiring
private respondents to print on the labels of their rifled milk products the words.

ORMOC SUGAR COMPANY, INC., plaintiff-appellant, vs. THE TREASURER OF ORMOC

Special Civil Action No. 52383, on the other hand, is an action for prohibition and injunction CITY, THE MUNICIPAL BOARD OF ORMOC CITY, HON. ESTEBAN C. CONEJOS as
Mayor of Ormoc City and ORMOC CITY, defendants-appellees. G.R. No. L-23794.
with a petition for preliminary injunction. Respondent-companied therein pray that the February 17, 1968. 20 SCRA 739.
respondent Fair Trade Board desist from further proceeding from the action filed by the
FACTS:
Philippine Association of Nutrition  for misleading advertisement, mislabeling and/or
misbranding. That petitoners' milk was not labeled as an imitation of cow's milk The Municipal Board of Ormoc City passed Ordinance No. 4, imposing "on any and all
productions of sugar milled at petitioner's, municipal tax of 1% per export sale. Petitioner paid
but were under protest.
Both cases was heard jointly. Petitioner filed before the CFI contending that the ordinance is unconstitutional for being in
violation of the equal protection clause and the rule of uniformity of taxation, aside from being
an export tax forbidden under Section 2287 of the Revised Administrative Code. It further
Respondent court held to perpetually restrain the CIR and the Fair Trade Board from alleged that the tax is neither a production nor a license tax which Ormoc City its charter and
under Section 2 of Republic Act 2264, or the Local Autonomy Act, is authorized to impose;
requiring respondent-companies to print on the labels on the filled milk products. that it also violates RA 2264 because the tax is on both the sale and export of sugar.

ISSUE: Whether the ordinance is valid.

ISSUE: Whether respondent court was correct.
RULING:

NO. The SC held that it violates the equal protection clause for it taxes only sugar produced
RULING: and exported by petitioner and none other. Even though petitioner, at the time of the
enactment of the ordinance, was the only sugar central in Ormoc, the classification should
have been in terms applicable to future conditions as well. The taxing ordinance should not
Yes. be singular and exclusive as to exclude any subsequently established sugar central, of the
same class as petitioner, for the coverage of the tax.

Though, petitioner can be refunded, they are not entitled to interest because the taxes were
not arbitrarily collected as the ordinance provided a sufficient basis to preclude arbitrariness,
the same being then presumed constitutional until declared otherwise.