Case Summary (G.R. No. 28863)

Municipal Ordinance on Garages; Void Due to Violation of Law

• The law governing municipal taxation must be strictly interpreted.
• Municipal councils are authorized to impose taxes on businesses engaged in the garage business where motor vehicles are kept for hire.
• However, this authority does not extend to common carriers who maintain private garages for their vehicles.
• The ordinance in question was enacted beyond the authority granted to municipal councils, rendering it null and unlawful.

Authority of Municipal Councils to Impose Taxes

• Section 1, subsection (e) of Act No. 3422 explicitly states that municipal councils lack the power to impose taxes on transportation contractors and common carriers.
• This provision reinforces the limitation of municipal authority concerning taxation in the transportation sector.

Facts of the Case

• The Batangas Transportation Company, a corporate entity, operates as a common carrier and maintains a garage for its vehicles.
• The municipal council of Batangas enacted Ordinance No. 7, series of 1924, imposing a tax on garages.
• The plaintiff paid the garage tax under protest and subsequently sought a refund, arguing the ordinance was illegal.

Stipulation of Facts

• The parties submitted a stipulation detailing the nature of the plaintiff's business and the municipal ordinance.
• The plaintiff's garage is used for housing, caring for, and repairing its vehicles, which are not available for hire from the garage.
• The defendants, as municipal officers, collected taxes based on the ordinance, which the plaintiff contested.

Trial Court's Judgment

• The trial court ruled that the municipal ordinance was null and void due to lack of authority.
• The court ordered the return of the tax amount collected from the plaintiff and prohibited the enforcement of the illegal ordinance.

Appeal by Defendants

• The provincial fiscal of Batangas appealed the trial court's decision, arguing that the ordinance was valid and within the council's authority.
• The municipal council cited section 2307 of the Administrative Code as the basis for imposing the tax on garages.

Definition of "Garage" Under the Law

• The term "garage" is defined in the Automobile Law, encompassing places where vehicles are stored for payment.
• The ordinance's definition of "garage" differs from the plaintiff's use of the term, as the plaintiff's garage is not a commercial garage for hire.

Distinction Between Garage Types

• The plaintiff's garage serves a different purpose than a commercial garage; it is used for maintenance and storage of vehicles used in public transportation.
• The plaintiff does not operate a garage business but is engaged in the transportation business as a common carrier.

Conclusion on Tax Authority

• The court concluded that the municipal council's authority to tax does not extend to the plaintiff's private garage.
• The ordinance was deemed enacted beyond the counc...continue reading

Case Syllabus (G.R. No. 28863)

Case Overview

• This case involves a dispute between the Batangas Transportation Company ("plaintiff") and the Provincial Treasurer of Batangas, the Municipal Council of Batangas, and the Municipal Treasurer of Batangas ("defendants") regarding the legality of municipal ordinance No. 7, series of 1924, which imposed taxes on garages.
• The plaintiff paid a garage tax of P405 under protest and subsequently filed for the return of this amount, claiming the ordinance was null and illegal.

Background Facts

• On June 20, 1924, the Municipal Council of Batangas enacted ordinance No. 7, which imposed taxes on garages.
• The Batangas Transportation Company, operating as a common carrier, engaged in the transportation of passengers and freight in Batangas, maintained a garage for its vehicles.
• The plaintiff was classified as owning a second-class garage, leading to the imposition of a tax, which it paid under protest.

Stipulation of Facts

• The parties submitted a stipulation detailing the nature of the plaintiff's business and the circumstances surrounding the ordinance:
  • The Batangas Transportation Company is a corporate entity engaged in operating auto-truck services.
  • The garage in question is used to house, care for, and...continue reading