Facts:

The case involves the Film Development Council of the Philippines (petitioner) and SM Prime Holdings, Inc. (respondent). The events leading to the case began when SM Prime Holdings, Inc., the owner and operator of cinema houses at SM Cebu in Cebu City, was subject to amusement tax under Republic Act (R.A.) No. 7160, also known as the Local Government Code of 1991. This law allows local government units to levy an amusement tax of up to 30% on gross receipts from admission fees. On June 21, 1993, the Sangguniang Panglunsod of Cebu City approved City Tax Ordinance No. LXIX, which established a similar amusement tax structure.

In 2002, R.A. No. 9167 was enacted, creating the Film Development Council of the Philippines, which was tasked with implementing an incentive system for film producers based on merit. This law included provisions for amusement tax rewards for films graded favorably by the Cinema Evaluation Board (CEB). The law mandated that amusement tax collected on gra...

Facts:

1. Parties Involved:

   • Petitioner: Film Development Council of the Philippines (FDCP).
   • Respondent: SM Prime Holdings, Inc. (SM), owner and operator of cinema houses in Cebu City.

2. Legal Framework:

   • Local Government Code (R.A. No. 7160): Allows provinces to levy amusement taxes on cinema operators, with a maximum rate of 30% of gross receipts from admission fees.
   • Cebu City Tax Ordinance No. LXIX: Enacted in 1993, it imposes a 30% amusement tax on cinema operators, requiring them to remit taxes to the City Treasurer.
   • R.A. No. 9167 (Film Development Council Act): Created the FDCP, which provides incentives to producers of graded films (e.g., "A" or "B" graded films). Section 14 mandates cinema operators to remit amusement taxes on graded films to the FDCP instead of local governments.

3. Dispute:

   • SM had been remitting amusement taxes to the City of Cebu under City Tax Ordinance No. LXIX.
   • FDCP demanded payment from SM for amusement tax rewards due to producers of 89 graded films shown at SM cinemas from 2003 to 2008, amounting to P76,836,807.08.
   • The City of Cebu filed a petition for declaratory relief (Civil Case No. CEB-35529) challenging the constitutionality of Section 14 of R.A. No. 9167, arguing it violates local autonomy and deprives LGUs of revenue.
   • FDCP filed a collection suit (Civil Case No. 72238) against SM in Pasig City RTC for unpaid amusement tax rewards.

4. Procedural History:

   • The Cebu City RTC issued a TRO preventing FDCP from collecting amusement tax rewards from SM.
   • SM filed a motion to dismiss the Pasig City RTC case, arguing litis pendentia (pending case in Cebu City RTC) and prior payment of taxes to the City of Cebu.
   • The Pasig City RTC granted the motion to dismiss, citing litis pendentia.

Issue:

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Ruling:

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Ratio:

1. Litis Pendentia: The principle prevents multiple suits on the same cause of action to avoid conflicting judgments and unnecessary burden on the courts. The requisites for litis pendentia are:
   • Identity of parties.
   • Identity of rights asserted and relief prayed for.
   • Identity of causes of action.
2. Appropriate Vehicle for Litigation: The Cebu City RTC case is the proper forum to resolve the constitutional and legal issues, as it involves the City of Cebu, which has a direct interest in the matter.
3. Judicial Efficiency: Resolving the issues in a single proceeding promotes judicial efficiency and avoids unnecessary litigation costs.