G.R. No. L-26521 December 28, 1968
On September 30, 1946 the municipal board of Iloilo City enacted Ordinance 86, imposing license tax fees as follows: (1) tenement house (casa de vecindad), P25.00 annually; (2) tenement house, partly or wholly engaged in or dedicated to business in the streets of J.M. Basa, Iznart and Aldeguer, P24.00 per apartment; (3) tenement house, partly or wholly engaged in business in any other streets, P12.00 per apartment. The validity and constitutionality of this ordinance were challenged by the spouses Eusebio Villanueva and Remedies Sian Villanueva, owners of four tenement houses containing 34 apartments. On January 15, 1960 the municipal board of Iloilo City, believing, obviously, that with the passage of Republic Act 2264, otherwise known as the Local Autonomy Act, it had acquired the authority or power to enact an ordinance similar to that previously declared by this Court as ultra vires, thus enacted an “Ordinance Imposing Municipal License Tax on Persons Engaged in the Business of Operating Tenement-Houses”.
Whether or not the tax imposed by the ordinance falls within any of the exception provided in Section 2 of the Local Autonomy Act, thus imposing a double taxation
It is necessary to determine the true nature of the tax. The appellees strongly maintain that it is a “property tax” or “real estate tax,” and not a “tax on persons engaged in any occupation or business or exercising privileges,” or a license tax, or a privilege tax, or an excise tax. The tax in question is not a real estate tax. A real estate tax is a direct tax on the ownership of lands and buildings or other improvements thereon and is payable regardless of whether the property is used or not. The tax is usually single or indivisible, although the land and building or improvements erected thereon are assessed separately, except when the land and building or improvements belong to separate owners. It is a fixed proportion of the assessed value of the property taxed, and requires, therefore, the intervention of assessors. It is collected or payable at appointed times, and it constitutes a superior lien on and is enforceable against the property subject to such taxation, and not by imprisonment of the owner. The tax imposed by the ordinance in question does not possess the aforestated attributes. Clearly, therefore, the tax in question is not a real estate tax. “The spirit, rather than the letter, or an ordinance determines the construction thereof, and the court looks less to its words and more to the context, subject-matter, consequence, and effect. Accordingly, what is within the spirit is within the ordinance although it is not within the letter thereof, while that which is in the letter, although not within the spirit, is not within the ordinance.” It is within neither the letter nor the spirit of the ordinance that an additional real estate tax is being imposed, otherwise, the subject-matter would have been not merely tenement houses. It is plain from the context of the ordinance that the intention is to impose a license tax on the operation of tenement houses, which is a form of business or calling. Thus, there is no double taxation.