Republic of the Philippines

SUPREME COURT
Manila

IN BANC

GR No. L-47252 April 18, 1941

THE APOSTOLIC PREFECT OF THE MOUNTAIN PROVINCE, plaintiff-appellant,

vs.
THE TREASURER OF THE CITY OF BAGUIO, defendant-appealed.

Messrs. Cavanna, Jasmines and Tianco in representation of the appellant.

The Attorney General representing the appellee.

IMPERIAL, J .:

The plaintiff exercised this action to recover from the defendant the sum of P1,019.37
that he paid under protest as a special contribution on his properties in the City of
Baguio, corresponding to the year 1937. Appeal of the judgment of the Court of First
Instance of said city that he dismissed your demand, without costs.

The parties submitted the matter by means of the following partial stipulation of facts:

1. The plaintiff is a one-person corporation of a religious nature, organized in

accordance with the laws of the Philippines, with residence in the city of Baguio;

2. The defendant is a public servant of the city of Baguio and acts as treasurer
and collector of said city;

3. That the defendant demanded and collected from the plaintiff on June 25,
1937, the sum of one thousand nineteen pesos and thirty-seven cents
(P1,019.37), Philippine currency, pursuant to the provisions of Ordinance No.
137, as amended and amended by Ordinances No. 263, 277, 283, 297, 311, 325,
348, 367, 387, 419, 471, 45, 455, 466, 512, 552, 591, 592, and Resolution of the
Council of the City of Baguio No. 10 dated January 22, 1918. All the
aforementioned ordinances, as well as Resolution No. 10, series of 1918,
become integral parts of this agreement.

4. That the payment made by the plaintiff of p1,019.37 corresponds to the year
1937 and was made under protest formulated in a letter dated June 25, 1937 in
which the reasons for the portestation were presented and the favorable
resolution of the protest and the return of the amount paid;

5. That the defendant denied the protest;

6. The lands affected by the payment of P1,019.37 are land owned by the
plaintiff's property dedicated to worship and education during the year 1937 and
in previous years;

7. That the City of Baguio built in accordance with the ordinances cited above in
paragraph 2 of this stipulation a sewer and drainage system;

8. That the applicant was paying in previous years to 1937, without protest, the
sums that the city demanded in accordance with the ordinances and referred
 to; and for the first time I protest the year 1937, protest that is the object of this
litigation;

9. That a list of properties valued in the city of Baguio was included in Ordinance
No. 137 and that relationship became part of Ordinance No. 137 and was called
and converted into "SPECIAL ASSESSMENT LIST, CITY OF BAGUIO" , for the
purposes of the aforementioned ordinance and that the properties affected in the
protest payment of the applicant were and are included in said list and have not
been excluded so far by virtue of any ordinance subsequent to No. 137;

10. That the construction of the drainage and sewerage system has benefited
and is benefiting directly and especially to all the owners whose lots and lands
are included in the "SPECIAL ASSESSMENT LIST, CITY OF BAGUIO" including
the lands of the applicant here affected in said list and in the payment under
protest and that this system of drainage and sewerage has promoted the
cleaning and sanitary condition of the lands of the aforementioned list.

11. That the parties reserve the right to practice additional tests.

The appellant maintains in its error statements the following propositions: (1) that its real
estate and its mojoras in the City of Baguio for being exempt from payment of all taxes
by the Constitution and by the laws in force must be equally exempt from the
payment of the special contribution that the appellee has charged him and he has
paid under protest; (2) that Ordinance No. 137 and its amendments, under which the
special contribution has been collected, exclude from its provisions its properties exempt
from the payment of all taxes; (3) that in the event that the aforementioned ordinances do
not exclude their properties from the payment of the special contribution, they are null
and ineffective; and (4) in the event that the aforementioned ordinances were legal the
appellee, as Treasurer of the City of Baguio,

The first proposition involves the question of whether the properties on which the
special contribution is charged are effectively exempt from said payment. The
special contribution was collected by the appellee under the provisions of articles 2 and 5
of Ordinance No. 137 that provide:

It having heretofore been ascertained that said work will benefit each and every
owner or property subject to taxation, lying and being within the corporate limits
of the City, it is hereby stated that benefit will accrue from said work to each and
all said persons, and said persons shall pay a compensation for said benefit.

The City Assessor having heretofore compiled from the City Assessment and
Valuation aforesaid and certified to the City Treasurer a list containing and setting
forth the total amount of property within the corporate limits of the City subject to
assessment and levy for the purposes in this Ordinance recited, The total amount
of the properties individually owned and possessed, and the name of each
individual owner and possessor, the rate per cent, to wit: ONE PER CENTUM ad
valorem of said total value which is necessary for the purposes set forth in
Section III hereof, is hereby made the amount to be paid individually by each
owner or possessor as his share, and the above-mentioned list is hereby made
part hereof and named "SPECIAL ASSESSMENT LIST," and said list is hereby
declared to be,and made the City official list and basis for assessing, levying and
collecting the rate of compensation aforesaid from the above-mentioned owners
and possessors, and each owner or possessor is required to, and shall pay the
amount in said list stated as his individual share to the City Treasurer on or after
the first of March and not later than June 30th, 1914.
The appellant maintains that his property is exempt from the payment of the special
contribution both by what is provided in Article 2 of Ordinance No. 137 and by what is
stated in Article 14, (3), Title VI, of the Constitution of the Philippines. it reads as follows:

(3) Cementary, churches, parishes and convents attached to these, and all land,
buildings and improvements used exclusively for religious, charitable or
educational purposes, shall be exempt from taxation.

It is alleged that, according to Article 2 of Ordinance No. 137, only those properties that
are not subject to the payment of a tax must pay the special contribution and, in
accordance with the aforementioned constitutional provision, the properties of the
appellant are exempt from the payment of the tax. Special contribution for being
dedicated to religious purposes. This claim requires that it be resolved, in the first place,
if the special tax imposed by Ordinance No. 13 is a tax in its legal meaning. It is a well-
established rule on tax that the special contributions that are created and charged to
amortize extraodinary expenses that cause works, such as the drainage and sewerage
system, that benefit the inhabitants in a special way is not a tax in its sense
legal. According to the ordinance, the special contribution charged to the properties
located in the City of Baguio, was created to amortize the extraordinary expenses caused
by the drainage and sewage system that was built, a work that benefits all owners in a
special way. city. Judge Cooley, in drawing the distinction between taxes and special
contributions in his tax treaty, expresses himself in these terms:

While the word "tax" in its broad meaning, includes both general taxes and
special assessments, and in general sense a tax is an assessment, and an
assessment is a tax, yet there is a recognized distinction between them in that
assessment is confined to local impositions upon property for the payment of the
cost of public improvements in its immediate vicinity and levied with reference to
special benefits to the assessed property. The differences between a special
assessment and a tax are that (1) a special assessment can be levied only on
land; (2) a special assessment can not (at least in most states) be a personal
liability of the person assessed; (3) a special assessment is based wholly on
benefits; and (4) a special assessment is exceptional both as to time and
locality. The imposition of a charge on all property, Real and personal, in a
prescribed area, is a tax assessment, although the purpose is to make a local
improvement on a street or highway. A charge imposed only on property owners
benefited is a special assessment rather than a tax notwithstanding the statute
calls it a tax.

If the special contribution charged to the appellant is not strictly speaking a tax
whose payment is exempt from it, it is evident that neither under the ordinance nor the
Constitution the aforementioned appellant is exempt from the payment of the special
contribution.

In addition, according to the stipulation of facts, the appellant can not successfully invoke
the exemption established by the Constitution because it has not been admitted or
proven that its properties that paid the special contribution were used exclusively for
religious purposes. It is true that it was stipulated that the properties were dedicated to
religious purposes, but it was not agreed or proved that such use was exclusive, and it
may therefore occur that the properties, besides being dedicated to religious purposes,
were also destined and used for other purposes. not religious.

Regarding the validity of Ordinance No. 137 and its amendments, it is undeniable that the
City of Baguio is authorized by Article 8 (1) of Law No. 1963, today Article 2553 (1) of the
Revised Administrative Code, for create the special contribution discussed in order to
amortize the cats caused by the sewage and drainage system that was built for the
benefit of all the inhabitants of the aforementioned city.

The ultimate pretension of the appellant is that assuming valid Ordinance No. 137 and its
amendments he is not already obliged to pay special contribution in view of that already
satisfied in years prior to 1937 the aliquot part that corresponded to said special
contribution. The claim is equally unfounded, because it results from Exhibit 1 that the
cost of the drainage and sewer system amounts to P502,750.75 and the city only
charged by special contribution until 1937 the sum of P291,290.08; resulting in the cost
of the system, in 1937, was not yet fully satisfied.

If the sentence appealed is adjusted to the law, it is confirmed in all its parts, with the
costs of this instance to the appellant. This is how it is ordered.

Avanceña, Pres., Diaz, Laurel, and Horrilleno, MM., Are satisfied.