1. MUNICIPAL CORPORATIONS; PROHIBITION AGAINST TAKING ANIMALS AND ARTICLES OUT OF TOWN OR CITY WITHOUT PERMIT; NATURE OF LICENSE IMPOSED. — The defendant City passed an ordinance regulating the exit of food supply and labor animals out of the city and imposing and collecting license fees therefor. Plaintiff contested the validity of said ordinance on the ground that it was enacted beyond the powers of the Municipal Board of the City. In answer, defendant City contended that the imposition and collection of the municipal license provided in the ordinance were within the power and duties of the Municipal Board in the exercise of its police power. Query: Whether the license fees imposed were in reality taxes. Held: Judging from the amount of the fees fixed in the ordinance in question, the so-called fees were in reality taxes for city revenue. For instance, the P10 fee for every head of large cattle, whether alive or slaughtered, and the P5 fee for every pig, goat, or sheep, whether alive or slaughtered, cannot possibly be considered as mere expense incurred for, or the cost of the inspection of each animal and the issuance of the corresponding permit. If a pig, goat, or sheep costs, say, P15 or even P20, then the P5 fee would constitute quite a considerable slice or portion of said cost; and if the animals and articles listed in the ordinance were sent out from the defendant City in large quantities and numbers, there would be no doubt that the fees collected would amount to a sizable sum and augment greatly the revenues of the municipal corporation, way in excess of the cost of inspections and the issuance of the permits.

2. ID.; ID.; RESTRAINT OF TRADE. — The prohibition against taking animals and articles out of the City without permit of the mayor is in restraint of trade and a curtailment of the rights of the owners of the said animals and articles to freely sell and of prospective purchasers to buy and dispose of them without the city limits in the ordinary course of commerce and trade.

3. ID.; ID.; ID.; POWER OF TAXATION NOT INHERENT; WHEN ORDINANCE IMPOSING TAX CONSIDERED VALID. — A municipal corporation like the defendant City has no inherent power of taxation. To enact a valid ordinance, the City must find in its charter the power to do so, for said power cannot be presumed. Thus, in the case at bar, it not appearing in the charter of the defendant City that it is authorized to regulate and collect fees or taxes for the taking out of the City of the animals and Articles listed in the aforesaid ordinance, the same is ultra vires, and consequently null and void.

4. ID.; ID.; ID.; EXPRESS PROHIBITION AGAINST IMPOSITION OF TAX ON GOODS CARRIED INTO OR OUT OF TOWN OR CITY. — Aside from this lack of inherent power of taxation by a municipal corporation, the fees imposed in the ordinance in question are in contravention of the provisions of Sections 2287 and 2629 of the Revised Administrative Code, which prohibit municipal corporations from imposing any tax in any form upon goods and merchandise into or out of the town or City.

Serafin Saldaña is appealing the decision of the Court of First Instance of Iloilo in Civil Case No. 2236, dismissing his complaint against the City of Iloilo, for the refund of taxes paid by him under protest, and upholding the legality of Ordinance No. 28, Series of 1946, as amended by Ordinance No. 30, same series of the defendant City.

On May 25, 1946, the defendant City of Iloilo promulgated Ordinance No. 28, series of 1946, which for purposes of reference we reproduce below:jgc:chanrobles.com.ph

"ORDINANCE No. 28

"AN ORDINANCE REGULATING THE EXIT OF FOOD SUPPLY AND LABOR ANIMALS AND IMPOSING PERMIT FEE THEREFOR.

"Be it ordained by the Municipal Board of the City of Iloilo, that.

"ARTICLE 1. — For the purpose of regulating, during this state of emergency, the exit of food supply and labor animals in order to avert shortage of the same in the City of Iloilo, it is strictly prohibited to send outside of the City of Iloilo, without first obtaining the necessary license permit from the Mayor, the following:chanrob1es virtual 1aw library

Large cattle, pigs, goats, sheep or the like;

Domestic fowls, eggs;

Fish, whether fresh, salted or dried;

Milkfish (semilla), bagoon (guinamos, crabs, prawn or the like);

Fruits, such as bananas, melon, papayas or the like.

"ART. 2 — The City Treasurer shall, for issuance of license permit required in article one hereof, collect a fee as follows:chanrob1es virtual 1aw library

Large cattle, whether alive or slaughtered, P10 per head.

Pigs, goats, and sheep, whether alive or slaughtered, P5 each.

Chicken and other domestic fowls, whether alive or dressed —

P0.50 each.

Eggs, P2.00 per hundred or P0.02 each.

Fish, whether fresh, dried or salted, P0.20 per kilo.

Bagoon (guinamos) P0.10 per kilo.

Crabs, prawn or the like, P0.20 per kilo.

Milkfish (semilla), P2 per pot.

Banana, P2, per hundred bunches or P0.02 per bunch.

Other fruits not mentioned herein — P0.02 per kilo.

"ART. 3. — It shall be unlawful for any carrier whether land, water, or air, to load any of the articles mentioned herein which is not provided with the corresponding Permit as required by this ordinance.

"ART. 4. — Violation of this ordinance shall be punished with a fine of not less than One Hundred (P100) Pesos, or more than Two Hundred (P200) Pesos, imprisonment of not less than ten (10) days but not exceeding six (6) months and to suffer subsidiary Imprisonment in case of insolvency to pay the fine."cralaw virtua1aw library

Ordinance No. 30, passed on June 4, 1946, amended Ordinance No. 28 by reducing the fees for each chicken from P.50 to P.20, eggs from P2 to P1 per hundred, and for fish from P.20 to P.10 per kilo, bananas from P2 to P1 per hundred bunches etc. Under said ordinances, Saldaña had been paying, though under protest, so-called fees on fish bought in the City of Iloilo and sent by him to Manila by plane, during the period from September 16, 1946 to December 6, 1946, totalling P1,359.80.

On September 17, 1951, plaintiff commenced the present proceedings by complaint for the reimbursement to him of the said amount with interest, on the ground that the ordinances in question were illegal, null and void, having been enacted beyond the powers of the Municipal Board of the City. In its answer, the defendant contended that the imposition and collection of the municipal licenses were within the power and duties of the Municipal Board in the exercise of its police power. The parties submitted an agreed statement of facts to the effect that during the period above- mentioned, Saldaña had sent fish out of Iloilo City to Manila, for the sending of which, the City collected P1,359.80 under the two ordinances in question, and that the payment of said amount was made under protest. On the basis of the agreed statement of facts, the lower court rendered the decision now appealed to us, holding that Ordinance No. 28 as amended was valid; that the purpose of the said ordinances was to regulate the exit of food supply and labor animals from the city of Iloilo and their sale beyond city limits, and falls squarely within the provisions of paragraph (aa), Section 21 of the Charter of the City, namely, Commonwealth Act No. 158; that the ordinance does not restrict trade but only regulates the business of purchase of foodstuffs for the purpose of taking them outside, with the purpose of averting the scarcity of foodstuffs; that the imposition and collection of the license fees provided in the said ordinance was included within the police power and that said fees were reasonable amounts, necessary to cover the expenses in the issuance of the licenses and the cost of the necessary inspection or police surveillance.

One question involved in the appeal is whether the license fees imposed and collected were in reality taxes. The following authorities are illuminating:jgc:chanrobles.com.ph

". . . The differences between the license and the property tax are well established. The license represents the permission conceded to do an act, is not supposed to be imposed for revenue, and is in the main for police purposes. A property tax, on the other hand, is a tax in the ordinary sense, assessed according to the value of property." (City of Manila v. Tanquintic 58 Phil. 297 300).

". . . Estos dos terminos ’derechos’ e ’impuesto no entrañan el mismo concepto, porque Impuestos o Taxes son, seg