G.R. No. L-41631 - Bagatsing vs. Ramirez

Case Summary (G.R. No. L-41631)

Petitioner and Respondent Roles

Petitioners are municipal officials and the Municipal Board who enacted and approved Ordinance No. 7522 regulating public markets and prescribing stall rental and other fees. Respondent Federation of Manila Market Vendors, Inc. challenged the ordinance’s validity before the Court of First Instance; the presiding judge declared the ordinance void for noncompliance with a publication requirement.

Key Dates

Ordinance No. 7522 enacted by the Municipal Board: June 12, 1974.
Mayor’s approval: June 15, 1974.
Suit filed by Federation: February 17, 1975.
Preliminary injunction denial by trial court: March 11, 1975.
Trial court decision declaring ordinance void: August 29, 1975; motion for reconsideration denied September 26, 1975.
Supreme Court decision reversing trial court: December 17, 1976.

Applicable Law

Revised City Charter (R.A. No. 409), Section 17 (publication of each proposed ordinance in two daily newspapers and delay for three days before enactment; post-approval publication and effectivity timing).
Local Tax Code (P.D. No. 231), Sections 31, 43 and 47 (post-approval publication for ordinances levying taxes/fees; authorization for local governments to collect fees such as market rentals and slaughter fees; administrative review by city fiscal and appeal to Secretary of Justice).
Republic Act No. 6039 (market committee role).
Presidential Decree No. 7 (collection of fees on livestock and animal products) and its amendment by P.D. No. 45.
Anti-Graft and Corrupt Practices Act, Section 3(e) (prohibition against giving unwarranted benefits).
Constitutional provision cited in decision: Section 5, Article XI of the New Constitution (local governments’ power to create revenue sources and levy taxes subject to law).
Controlling jurisprudential principles on special vs. general laws, implied repeal/modification, exhaustion of administrative remedies, and intra vires review.

Central Legal Issue

Whether the publication requirement in the Revised City Charter (publication before enactment and after approval in two daily newspapers) or the Local Tax Code (post-approval publication by newspaper or posting for tax/fee ordinances) governs the validity of Ordinance No. 7522, a municipal ordinance levying market stall rentals and related fees.

Relevant Facts

The Municipal Board enacted Ordinance No. 7522 regulating public markets and prescribing stall rentals and fees; the Mayor approved it. The Municipal Board complied with the Local Tax Code’s post-approval publication/posting alternatives but did not comply with the Charter’s requirement of prior publication in two daily newspapers before enactment. The Federation sued to annul the ordinance, asserting among other grounds noncompliance with the Charter’s publication requirement, lack of Market Committee participation per R.A. 6039, violation of Section 3(e) of the Anti-Graft Act, and conflict with P.D. No. 7 regarding fees on livestock products.

Trial Court Ruling

The Court of First Instance declared Ordinance No. 7522 null and void because it was not published in two daily newspapers of general circulation before enactment nor published in the same manner after approval. The court treated the Charter’s publication regimen as mandatory and controlling.

Supreme Court’s Resolution on Conflict Between Charter and Local Tax Code

The Supreme Court reversed. It applied the doctrine that a particular statute covering a specific subject matter controls over a general provision when both conflict. The Revised City Charter’s Section 17 speaks of ordinances generically, whereas the Local Tax Code’s Section 43 specifically governs “ordinances levying or imposing taxes, fees or other charges.” Because the Local Tax Code was a later enactment (P.D. No. 231, June 1, 1973) and addressed the specific subject of tax/fee ordinances, its particular prescription (post-approval publication by newspaper or posting) superseded the general charter requirement insofar as tax ordinances are concerned. The Court relied on established principles that a later statute dealing specifically with a subject may impliedly modify or supersede prior general charter provisions and that a charter must yield to applicable general laws of the state where inconsistent.

Analogous Precedent Applied

The Court invoked City of Manila v. Teotico to illustrate that a general charter provision may yield to a later and more specific general law (here, the Civil Code in Teotico; here, the Local Tax Code for tax ordinances). Thus, the Local Tax Code’s specific regulation of tax/fee ordinance publication controlled over the Charter’s general ordinance publication rule.

Supreme Court on Exhaustion of Administrative Remedies

Petitioners argued the Federation failed to exhaust administrative remedies under Section 47 of the Local Tax Code, which provides for submission to the city fiscal and appeal to the Secretary of Justice. The Court found an exception to the exhaustion rule because the controversy raised a pure question of law—whether the Charter or the Local Tax Code governed publication for tax ordinances. The Court reiterated that exhaustion is not absolute: it yields where the issue is purely legal, where the administrative remedy is not plain, speedy and adequate, or where insisting on exhaustion would cause great or irreparable damage.

Classification of the Ordinance as a Tax Ordinance

The Court rejected the Federation’s contention that the ordinance was not a “tax ordinance” but merely a revenue-raising measure. It held that the imposition of rentals, permit fees, tolls and other fees falls within the ambit of taxation and is one of the local government’s authorized sources of revenue. The Court relied on the constitutional provision cited in the decision (Section 5, Article XI of the New Constitution) and on the Local Tax Code’s explicit authorization for local governments to collect market-related fees and to regulate market stalls and privileges.

Interaction with Presidential Decrees on Livestock Fees

The Federation asserted conflict with P.D. No. 7 (prescribing fees on livestock and animal products). The Court found the argument unavailing because P.D. No. 7 expressly preserved certain local fees (excepting specified inspection and delivery/stockyard/slaughter fees as authorized by the Secretary of Agriculture), and the Local Tax Code itself authorized local governments to collect fees for slaughtering animals and the use of corrals (Section 31). Therefore, the ordinance did not conflict with P.D. No. 7 as interpreted.

Market Committee Participation under R.A. 6039

The Court addressed the claim that the Market Committee’s failure to participate, per R.A. 6039, invalidated the ordinance. It concluded the Market Committee’s role is recommendatory—formulating

Case Syllabus (G.R. No. L-41631)

Procedural History

Petition for review on certiorari was brought to the Supreme Court after the Court of First Instance of Manila (presided over by respondent Judge Pedro A. Ramirez) rendered judgment declaring Ordinance No. 7522 of the City of Manila null and void for failure to comply with publication requirements of the Revised City Charter.
The Federation of Manila Market Vendors, Inc. (private respondent) filed Civil Case No. 96787 on February 17, 1975 seeking nullity of Ordinance No. 7522 on multiple grounds (non‑publication, non‑participation of the Market Committee, alleged violation of Anti‑Graft and Corrupt Practices Act Section 3(e), and alleged conflict with P.D. No. 7 concerning fees on livestock and animal products).
On March 11, 1975, the trial judge denied the Federation’s plea for a writ of preliminary injunction for failure to exhaust administrative remedies outlined in the Local Tax Code.
After hearing, the trial court issued its decision on August 29, 1975 declaring Ordinance No. 7522 null and void due to non‑compliance with mandatory publication before and after approval as required by the Revised City Charter; the court noted the ordinance had been posted in the legislative hall and in city public markets and libraries but not published in two daily newspapers before enactment nor after approval.
A motion for reconsideration by petitioners was denied on September 26, 1975.
Petitioners brought the matter to the Supreme Court, which reviewed and reversed the trial court’s decision.

Relevant Facts

On June 12, 1974, the Municipal Board of Manila enacted Ordinance No. 7522: "AN ORDINANCE REGULATING THE OPERATION OF PUBLIC MARKETS AND PRESCRIBING FEES FOR THE RENTALS OF STALLS AND PROVIDING PENALTIES FOR VIOLATION THEREOF AND FOR OTHER PURPOSES."
The Mayor of Manila (petitioner Ramon D. Bagatsing) approved the ordinance on June 15, 1974.
Petitioners complied with the publication method prescribed in the Local Tax Code rather than the Revised City Charter: certified copies published or posted as allowed under P.D. No. 231.
Ordinance No. 7522 was posted in the legislative hall and in all city public markets and city public libraries but was not published in two daily newspapers of general circulation in the City of Manila before enactment nor after approval.
The Federation alleged additional defects: non‑involvement of the Market Committee as envisioned by R.A. 6039; violation of Section 3(e) of the Anti‑Graft and Corrupt Practices Act; and conflict with Presidential Decree No. 7 regarding fees on livestock and animal products.
Private respondent alleged that market stall fees collected under the ordinance were destined for the Asiatic Integrated Corporation under a "Management and Operating Contract," implying improper private benefit.

Central Legal Questions Presented

Which statutory provision governs the publication requirements for a tax ordinance enacted by the Municipal Board of Manila: Section 17 of the Revised City Charter (R.A. 409, as amended) which requires publication before enactment and after approval in two daily newspapers of general circulation in the city, or Section 43 of the Local Tax Code (P.D. No. 231) which prescribes publication after approval either by newspaper or by posting in the legislative hall and two other conspicuous places?
Whether the Federation was required to exhaust administrative remedies under the Local Tax Code (Section 47) before filing a court action to challenge the ordinance.
Whether an ordinance regulating market operations and prescribing stall rentals constitutes a "tax ordinance" within the meaning of the Local Tax Code or is merely a revenue‑raising administrative measure outside that Code’s publication procedure.
Whether the non‑participation of the Market Committee (per R.A. 6039) or alleged diversion of fees to a private corporation renders the ordinance invalid.
Whether the ordinance conflicted with Presidential Decree No. 7 as to fees on livestock and animal products.
Whether the ordinance violated Section 3(e) of the Anti‑Graft and Corrupt Practices Act by conferring unwarranted private benefit.

Statutory and Constitutional Provisions at Issue

Revised City Charter (R.A. 409, as amended), Section 17:
- Requires each proposed ordinance to be published in two daily newspapers of general circulation in the city and prohibits discussion or enactment until after the third day following such publication.
- Requires each approved ordinance to be published in two daily newspapers of general circulation in the city within ten days after approval and provides that it shall take effect on and after the twentieth day following its publication if no date is fixed in the ordinance.
Local Tax Code (P.D. No. 231), Section 43:
- Requires certified true copies of ordinances levying or imposing taxes, fees or other charges to be published for three consecutive days within ten days after approval in a newspaper widely circulated in the jurisdiction, or alternatively to be posted in the local legislative hall or premises and in two other conspicuous places within the territorial jurisdiction; copies are to be furnished treasurers of respective component and mother units for dissemination.
Local Tax Code, Section 47:
- Provides that questions on the legality of any tax ordinance shall be referred to the city fiscal for opinion; the fiscal’s opinion is appealable to the Secretary of Justice, whose decision is final and executory unless contested in court within thirty days.
Section 5, Article XI of the New Constitution (as cited):
- Declares that each local government unit shall have the power to create its own sources of revenue and to levy taxes subject to law.
Local Tax Code, Section 31 (as cited):
- Authorizes local governments to collect fees for the slaughter of animals and the use of corrals.
Presidential Decree No. 7 (and amendment P.D. 45):
- Prescribes collection of fees and charges on livestock and animal products with exceptions for certain inspection and slaughter fees; PD 7 was amended by P.D. 45 to allow local governments to charge ordinary fees for issuance of certain livestock certificates and transfers.
Republic Act No. 6039 (amendment to City Charter of Manila):
- Provides that the Market Committee shall formulate, recommend and adopt, subject to ratification of the municipal board and approval of the mayor, policies and rules or regulations repealing or amending existing market code provisions (the Market Committee’s function framed as recommendatory).

Trial Court Ruling and Rationale

The trial court held Ordinance No. 7522 invalid because it was not published in two daily newspapers of general circulation in the City of Manila before enactment and was not so published after approval, despite posting in legislative hall and public markets and libraries.
The trial court denied preliminary injunction on March 11, 1975, citing failure to exhaust administrative remedies under the Local Tax Code.

Supreme Court’s Conflict‑of‑Laws Analysis (Revised Charter vs. Local Tax Code)

The Supreme Court identified an apparent conflict between the special law (Revised City Charter, applicable only to Manila) and the general law (Local Tax Code, applicable to all local governments) concerning publication requirements.
General principle cited: when a special law and a general law conflict, the special law ordinarily remains an exception to the general; however, where the special law speaks in general terms