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ORMOC SUGAR COMPANY, INC. v.

THE TREASURER OF ORMOC CITY, THE MUNICIPAL BOARD OF


ORMOC CITY, HON. ESTEBAN C. CONEJOS as Mayor of Ormoc City and ORMOC CITY,
FACTS:
The Municipal Board of Ormoc City passed Ordinance No. 4, imposing "on any and all productions of
centrifugal sugar milled at the Ormoc Sugar Company, Inc., a municipal tax equivalent to one per centum (1%)
per export sale to the United States of America and other foreign countries.
Ormoc Sugar Company, Inc. filed a complaint alleging that the ordinance is unconstitutional for being violative
of the equal protection clause the rule of uniformity of taxation. Further, Section 2287 of the Revised
Administrative Code denies municipal councils the power to impose an export tax.
Defendants asserted that the tax ordinance was within defendant city's power to enact under the Local
Autonomy Act.
The lower court upheld the constitutionality of the ordinance and declared the taxing power of defendant
chartered city broadened by the Local Autonomy Act to include all other forms of taxes, licenses or fees not
excluded in its charter.
ISSUE: Whether or not the Ordinance No. 4 violated the constitutional limits on the power of taxation particularly the
equal protection clause and uniformity of taxation.
RULING:
Yes. The Supreme Court ruled that the Ordinance violated the equal protection clause and the uniformity of
taxation.
We ruled that the equal protection clause applies only to persons or things identically situated and does not bar a
reasonable classification of the subject of legislation, and 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 them, for it taxes only centrifugal sugar produced and exported by the
Ormoc Sugar Company, Inc. and none other. The classification, to be reasonable, should be in terms applicable
to future conditions as well. Even if later a similar company is set up, it cannot be subject to the tax because the
ordinance expressly points only to Ormoc City Sugar Company, Inc. as the entity to be levied upon.
CONRADO L. TIU, JUAN T. MONTELIBANO JR. and ISAGANI M. JUNGCO, petitioners, vs. COURT OF
APPEALS, HON. TEOFISTO T. GUINGONA JR., BASES CONVERSION AND DEVELOPMENT
AUTHORITY, SUBIC BAY METROPOLITAN AUTHORITY, BUREAU OF INTERNAL REVENUE, CITY
TREASURER OF OLONGAPO and MUNICIPAL TREASURER OF SUBIC, ZAMBALES
Facts:
Petitioners challenged the constitutionality of EO 97-A. According to them, the grant and enjoyment of the tax
and duty incentives authorized under Republic Act No. 7227 (RA 7227) were narrowed down and limited by
EO 97-A to the business enterprises and residents within the fenced-in area of the Subic Special Economic Zone
(SSEZ).
It has effectively discriminated against them, without reasonable or valid standards, in contravention of the
equal protection guarantee.
The benefits to which they allege that they were deprived are : (1) a separate customs territory within the zone,
(2) tax-and-duty-free importations, (3) restructured income tax rates on business enterprises within the zone, (4)
no foreign exchange control, (5) liberalized regulations on banking and finance, and (6) the grant of resident
status to certain investors and of working visas to certain foreign executives and workers.
Respondents argued that Section 12 of RA 7227 clearly vests in the President the authority to delineate the
metes and bounds of the SSEZ. He adds that the issuance fully complies with the requirements of a valid
classification.
Issue: Whether or not Executive Order No. 97-A violates the equal protection clause of the Constitution.
Ruling:
No. The Supreme Court upheld the constitutionality of Executive Order No. 97.
The fundamental right of equal protection of the laws is not absolute, but is subject to reasonable classification.
Classification, to be valid, must (1) rest on substantial distinctions, (2) be germane to the purpose of the law, (3)
not be limited to existing conditions only, and (4) apply equally to all members of the same class.
RA 7227 aims primarily to accelerate the conversion of military reservations into productive uses. Its concern is
to is to convert the lands formerly occupied by the US military bases into economic or industrial areas. It was
reasonable for the President to have delimited the application of some incentives to the confines of the former
Subic military base. It is this specific area which the government intends to transform and develop from
its status quo ante as an abandoned naval facility into a self-sustaining industrial and commercial zone,
particularly for big foreign and local investors to use as operational bases for their businesses and industries.
There are substantial differences between the big investors who are being lured to establish and operate their
industries in the so-called secured area and the present business operators outside the area. In the first, the
economic impact will be national; in the second, only local.
At this time the business activities outside the secured area are not likely to have any impact in achieving the
purpose of the law, which is to turn the former military base to productive use for the benefit of the Philippine
economy.
The constitutional right to equal protection of the law is not violated by an executive order, issued pursuant to
law, granting tax and duty incentives only to businesses and residents within the secured area of the Subic
Special Economic Zone and denying them to those who live within the Zone but outside such fenced-in
territory. The Constitution does not require absolute equality among residents. It is enough that all persons under
like circumstances or conditions are given the same privileges and required to follow the same obligations. In
short, a classification based on valid and reasonable standards does not violate the equal protection clause.
JOSE V. HERRERA and ESTER OCHANGCO HERRERA, v. THE QUEZON CITY BOARD OF
ASSESSMENT APPEALS
Facts:
The Director of the Bureau of Hospitals authorized the petitioners to establish and operate the "St.
Catherine's Hospital.
Exemption from payment of real estate tax on the lot, building and other improvements comprising the
hospital was granted for the reason that it was established for charitable and humanitarian purposes and not
for commercial gain.
Subsequently, the Quezon City Assessor notified the petitioners that the aforesaid properties were re-
classified from exempt to "taxable" and thus assessed for real property taxes.
Issue: Whether or not the lot, building and other improvements occupied by the St. Catherine Hospital are exempt
from the real property tax.
Ruling: Yes. The Supreme Court ruled that the lot, building, and other improvement occupied by St. Catherine
Hospital are exempt for RPT.
All lands, building and improvements used exclusively for religious, charitable or educational purposes
shall be exempt from taxation, pursuant to the Constitution, regardless of whether or not material profits are
derived from the operation of the institutions in question.
The St. Catherine's Hospital is, therefore, a charitable institution, and the fact that it admits pay-patients
does not bar it from claiming that it is devoted exclusively to benevolent purposes, it being admitted that the
income derived from pay-patients is devoted to the improvement of the charity wards, which represent
almost two-thirds (2/3) of the bed capacity of the hospital, aside from "out-charity patients" who come only
for consultation.
THE PROVINCE OF ABRA, rep. by LADISLAO ANCHETA, Provincial Assessor,,vs.HONORABLE HAROLD
M. HERNANDO, in his capacity as Presiding Judge of Branch I, CFI Abra; THE ROMAN CATHOLIC
BISHOP OF BANGUED, INC., represented by Bishop Odilo Etspueler and Reverend Felipe Flores, respondents.