Facts:

• Cotabato Light & Power Company, Inc. (petitioner-appellee) and the City of Cotabato, including its Mayor, Board Members, and City Treasurer Augusto Pacis (respondents-appellants), are involved in the case.
• The dispute centers on Ordinance No. 7, enacted by the City of Cotabato on October 3, 1962, which imposed a tax (denominated as a license fee) on entities selling electric light, heat, and power within the city.
• Cotabato Light & Power Company, Inc. was granted a legislative franchise under Commonwealth Act No. 487 on June 18, 1939, to operate an electric plant in Cotabato City for 25 years.
• The franchise included a provision that the company would pay a 2% tax on its gross earnings in lieu of all other taxes.
• The company argued that Ordinance No. 7 was ultra vires and sought declaratory relief from the Court of First Instance of Cotabato.
• The lower court ruled in favor of the company, declaring the ordinance null and void.
• The City of Cotabato appealed this decision to the Supreme Court.

Issue:

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Ruling:

• The Supreme Court modified the decision of the lower court by eliminating the portions declaring Ordinance No. 7 null and void and ultra vires.
• The Supreme Court affirmed the lower court's decision in all other respects, effectively rul...(Unlock)

Ratio:

• The Supreme Court held that the legislative franchise granted to Cotabato Light & Power Company, Inc. under Commonwealth Act No. 487, which required the company to pay a 2% tax on its gross earnings "in lieu of any and all taxes," exempted the company from any additional municipal taxes, including those imposed by Ordinance No. 7.
• The Court reasoned that the Local Autonomy Act (Republic Act No. 2264), which granted municipalities broader taxing powers, did not repeal or amend the specific terms of the company's franchise.
• The Court emphasized that a special law (the franchise) is not repealed by a general law (the Local Au...continue reading