G.R. NO.

L-23794

ORMOC SUGAR COMPANY

VS

ORMOC CITY
February 17, 1968
 PLAINTIFF- DEFENDANTS-
APPELLANT APPELLEES.
ORMOC SUGAR COMPANY, INC. THE TREASURER OF ORMOC CITY, THE
MUNICIPAL BOARD OF ORMOC CITY,
HON. ESTEBAN C. CONEJOS as Mayor
of Ormoc City and ORMOC CITY
Doctrine
Sec. 1[1], Art. III
The Constitution in the Bill of Rights provides: “x x x nor shall any person be denied of
the equal protection of the laws.”

NO PERSON SHALL BE DEPRIVED OF LIFE, LIBERTY, OR PROPERTY

WITHOUT DUE PROCESS OF LAW, NOR SHALL ANY PERSON BE
DENIED THE EQUAL PROTECTION OF THE LAWS.
 FACTS

On June 1, 1964, Ormoc Sugar Company, Inc. filed before the

Court of First Instance of Leyte, with service of a copy upon the
Solicitor General, a complaint 3 against the City of Ormoc as
well as its Treasurer, Municipal Board and Mayor, alleging that
the afore-stated ordinance is unconstitutional for being
violative of the equal protection clause (Sec. 1 [ 1 ], Art. III,
Constitution) and the rule of uniformity of taxation (Sec. 22[1]),
Art. VI, Constitution), aside from being an export tax forbidden
under Section 2287 of the Revised Administrative Code.
The Municipal Board of Ormoc City passed Ordinance No. 4, imposing a
municipal tax of 1% on all productions of centrifugal sugar made by
Ormoc Sugar Company, Inc, for export sale to United States and other
foreign countries. The relevant provision states:

Section 1. “There shall be paid to the City Treasurer on any and all
productions of centrifugal sugar milled at the Ormoc Sugar Company,
Incorporated, in Ormoc City, 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. made payments under protest on March 20,
1964 (for P7,087.50) and on April 20, 1964 (for P5,000) for a total of
P12,087.50. It then filed a complaint against the Cit of Ormoc, its Treasurer,
Municipal Board, and Mayor

On August 6, 1964, the Court of First Instance rendered a decision that

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.
PLAINTIFF'S ARGUMENTS
The ordinance is unconstitutional due to the following:
It violates the Equal Protection Clause of the Constitution (Sec. 1[1], Art. III,
Constitution).
It violates the rule of uniformity on taxation (Sec. 22[1], Art. VI, Constitution).
It is a forbidden export tax (Sec. 2287, Revised Administrative Code).
Ormoc City is not allowed to impose such a tax, because this tax is not a
production nor a license tax. (Section 2, RA 2264 or the Local Autonomy Act).
The tax amounts to a customs duty, fee or charge on the sale and export of
sugar, which is violating (Sec. 2, RA 2264)
DEFENDANT'S ARGUMENTS
The tax ordinance is within the city's power to enact under RA 2264 or the
Local Autonomy Act and does not violate any constitutional limitation.
 ISSUE:
WHETHER OR NOT ORDINANCE NO. 4, SERIES OF 1964 IS

UNCONSTITUTIONAL FOR BEING VIOLATIVE OF THE EQUAL PROTECTION

CLAUSE.
 Whether or not Ordinance No. 4, series of 1964 is unconstitutional

for being violative of the equal protection clause.

RULINGS:

Yes.
The Ordinance violates the Equal Protection Clause. The Ordinance taxes
only Ormoc Sugar Company, Inc., and not the other sugar companies also
exporting to foreign countries. At the time the law was enacted, it was
constitutional, for at that time, Ormoc Sugar Company, Inc. was the only
sugar central in the City of Ormoc.
However, the classification should be applicable in terms of future
application as well. The taxing Ordinance should not be in such a way that
it only applies to Ormoc Sugar Company, Inc., and must not be established
as to exclude from taxing any other sugar company which may exist in the
future. The Ordinance expressly points at Ormoc Sugar Company, Inc. as
the only company to be taxed.
The Constitution in the Bill of Rights provides:
“x x x nor shall any person be denied of the equal protection of the laws.” (Sec. 1[1], Art. III)

The equal protection clause applies only to persons or things identically situated
and does not bar a reasonable classification of the subject of legislation. A
classification is reasonable where:

1. it is based on substantial distinctions which make real differences;

2. these are germane to the purpose of 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 in the same class.
In short: if the Ordinance makes a classification by making the tax
imposed on sugar central companies, the Ordinance violates Equal
Protection Clause by differentiating this particular sugar company, Ormoc
Sugar Company, Inc., from the other sugar companies identical to it by
that classification, by levying a tax only on it.
WHEREFORE, the decision appealed from is hereby
reversed, the challenged ordinance is declared
unconstitutional and the defendants-appellees are hereby
ordered to refund the P12,087.50 plaintiff-appellant paid
under protest. No costs.

So ordered.
BY: KHRIZZIA FATE M. TOLEDANA