Title
American Bible Society vs. City of Manila
Case
G.R. No. L-9637
Decision Date
Apr 30, 1957
American Bible Society challenged Manila's ordinances imposing fees on its Bible distribution, arguing violation of religious freedom. Supreme Court ruled ordinances unconstitutional as applied, protecting non-profit religious activities.

Case Summary (G.R. No. L-9637)

Key Dates and Procedural Posture

City Treasurer’s demand: May 29, 1953 — notice that the Society had been conducting business without a Mayor’s permit since November 1945 and assessment of permit and license fees plus compromise totaling P5,821.45 (later the amount paid under protest recorded as P5,891.45).
Payment and filing: October 24, 1953 — payment under protest and filing of complaint seeking declaration of ordinances’ illegality and refund of amounts paid.
Procedural history: Trial court dismissed the complaint for lack of merit; the case was prosecuted on appeal, with legal questions certified to the Supreme Court.

Stipulated Facts and Operative Evidence

The parties stipulated to detailed quarterly sales figures for the period 4th quarter 1945 through 2nd quarter 1953 (recorded in the case). The Society presented evidence that (a) it has continuously operated in the Philippines since 1899; (b) its contiguous real properties at Isaac Peral are exempt from real property taxes; (c) it receives remittances and voluntary contributions to cover operating deficits and often sells Bibles at prices below cost; and (d) some Bibles imported from New York bore U.S. prices but were sold locally at marked-up Philippine prices. The City argued that those price differentials demonstrated profitability inconsistent with the Society’s claim of purely religious, non-commercial activity.

Relief Sought and Defenses

Petitioner sought a judicial declaration that Manila Ordinance No. 3000 (as amended) and Ordinances Nos. 2529, 3028 and 3364 were illegal and unconstitutional as applied to the Society, and prayed for refund of the sums paid under protest with interest and costs. The City defended the ordinances as validly enacted under the municipal taxing and licensing powers conferred by section 2444(m-2) of the Revised Administrative Code and continued (or re-enacted) under section 18 of Republic Act No. 409 (the Revised Charter of the City of Manila).

Statutory and Charter Provisions at Issue

Ordinance No. 3000 (Sec. 1): Requires a Mayor’s permit and City Treasurer’s license for businesses, trades or occupations enumerated in Section 3 or otherwise requiring a permit for supervision and enforcement of public welfare and employee health. Ordinance No. 2529 (Sec. 1), as amended: Imposes quarterly license fees based on gross sales or receipts for enumerated businesses, including retail dealers in general merchandise and retail dealers exclusively engaged in the sale of books. Revised Administrative Code, sec. 2444(m-2): Authorized the Municipal Board to tax and fix license fees on retail dealers in new merchandise, including books, with a combined cap of P500 per annum. Republic Act No. 409 (sec. 18(o) and 18(ii)): Reorganized municipal taxing powers, restating authority to tax dealers in general merchandise and to tax/approve percentage taxes based on gross sales or receipts for businesses not otherwise enumerated, subject to presidential approval for the latter category. Commonwealth Act No. 466 (National Internal Revenue Code), Sec. 27(e): Income tax exemption for corporations organized and operated exclusively for religious, charitable or educational purposes, subject to taxation of income from property or from activities conducted for profit.

Repeal, Re-enactment and Continuity of Municipal Authority

The Court confronted the question whether RA 409 repealed the RAC authority under section 2444(m-2) such that existing municipal ordinances based on the old provision became void. The Court observed that RA 409 both repealed and re-enacted (in different language) substantially similar taxing powers in section 18(o). The only material difference noted was the removal of the explicit P500 annual cap found in the RAC provision. Citing authorities on simultaneous repeal and re-enactment, the Court applied the principle that a re-enactment neutralizes the effect of repeal for purposes of preserving accrued rights and liabilities and continues the law in force without interruption. On that basis the Court held that Ordinances Nos. 2529 and 3000, as amended, continued in effect under the authority conferred by the new charter provision.

Presidential Approval Requirement for Percentage Taxes

Petitioner argued that percentage taxes based on gross sales required the President’s approval under RA 409 sec. 18(ii). The Court distinguished the two subsections: sec. 18(o) expressly enumerates dealers in general merchandise (including retail dealers in books), while sec. 18(ii) subjects to presidential approval the taxation of businesses not otherwise enumerated, including percentage taxes. Because retail dealers in general merchandise are specifically enumerated in sec. 18(o), an ordinance taxing that class does not fall under the “not otherwise enumerated” category and therefore does not require presidential approval. The Court therefore concluded that the challenged ordinances did not require presidential approval to impose the licenses or percentage taxes at issue.

Applicability of Municipal Tax Ordinances to Religious Distribution and Sale of Bibles

Although the ordinances were held valid and otherwise in force, the central question remained whether they could constitutionally be applied to the Society’s distribution and sale of Bibles. Ordinance No. 2529, as a schedule imposing license fees based on gross sales for classes that include retail dealers in books, is facially neutral and directed at classes of commercial activity. The Court analyzed whether applying that ordinance to the Society would impermissibly burden the free exercise and dissemination of religion guaranteed by the Constitution.

Constitutional Free Exercise Analysis and Controlling Precedents

Relying on the constitutional guarantee of freedom of religion (the applicable constitutional provisions operative at the time of decision) and on precedents such as Murdock v. Pennsylvania, Marsh v. State of Alabama, Tucker v. Texas, and related authorities, the Court recognized that governmental impositions equivalent to a charge for the exercise of religious rights (a flat license or a tax that is a condition of dissemination) are constitutionally suspect because they may effectively suppress or deter religious proselytizing. The Court emphasized the distinction between general fiscal burdens (e.g., income tax on profits) and measures that operate as a precondition or flat charge on the exercise of religious speech or missionary activity. Applying that test, the Court found that the license fee imposed by Ordinance No. 2529, when applied to the Society’s distribution and sale of Bibles, would operate as a tax on the exercise of a constitutional freedom and would thus impair

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