Bagatsing Case

CASE # 58
KEY LESSON: Mandatory and directory provisions of tax laws

_____________________________________________________________________________________
December 17, 1976
HON. RAMON D. BAGATSING, as Mayor of the City of Manila; ROMAN G. GARGANTIEL, as Secretary
to the Mayor; THE MARKET ADMINISTRATOR; and THE MUNICIPAL BOARD OF MANILA, petitioners,
vs.
HON. PEDRO A. RAMIREZ, in his capacity as Presiding Judge of the Court of First Instance of Manila,
Branch XXX and the FEDERATION OF MANILA MARKET VENDORS, INC., respondents.
Santiago F. Alidio and Restituto R. Villanueva for petitioners.
Antonio H. Abad, Jr. for private respondent.
Federico A. Blay for petitioner for intervention.
1) Who are the petitioners?

a) HON. RAMON D. BAGATSING
b) ROMAN G. GARGANTIEL
c) THE MARKET ADMINISTRATOR and THE MUNICIPAL BOARD OF MANILA
2) Who are the respondents?
a) HON. PEDRO A. RAMIREZ
b) FEDERATION OF MANILA MARKET VENDORS, INC.
3) What is the original complaint/issue?
a) What law should govern the publication of a tax ordinance, the Revised City Charter, which
requires publication of the ordinance before its enactment and after its approval, or the Local Tax
Code, which only demands publication after approval?
b) Is the ordinance valid?
4) What facts led to this petition?
a) Municipal Board of Manila enacted Ordinance 7522, regulating the operation of public markets
and prescribing fees for the rentals of stalls and providing penalties for violation thereof.
i) The Federation of Manila Market Vendors Inc. assailed the validity of the ordinance, alleging
among others the noncompliance to the publication requirement under the Revised Charter
of the City of Manila.
ii) CFI-Manila, then, declared the ordinance void
b) Reasons of Federation of Manila Market Vendors Inc.:
i) The publication requirement under the Revised Charter of the City of Manila has not been
complied with
ii) The Market Committee was not given any participation in the enactment of the ordinance, as
envisioned by Republic Act 6039
iii) Section 3 (e) of the Anti-Graft and Corrupt Practices Act has been violated
iv) The ordinance would violate Presidential Decree No. 7 of September 30, 1972 prescribing
the collection of fees and charges on livestock and animal products.
c) Petitioners moved for reconsideration of the decision to null the ordinance stressing:
i) Only a post-publication is required by the Local Tax Code
ii) Private respondent failed to exhaust all administrative remedies before instituting an action
in court.
d) Revised Charter of the City of Manila requires publication BEFORE the enactment of the
ordinance and AFTER the approval thereof while the Local Tax Code only prescribes for
publication AFTER the approval of "ordinances levying or imposing taxes, fees or other
charges"
i) Revised Charter of the City of Manila : SPECIAL ACT since it relates only to City of Manila
(1) Is therefore considered as remaining an exception to the general
ii) Local Tax Code: GENERAL LAW because it applies universally to all local governments.
e) The petition below shows that the controversy between the parties is deeply rooted in a pure
question of law: whether it is the Revised Charter of the City of Manila or the Local Tax Code
that should govern the publication of the tax ordinance.
i) Sharply focused on applicability of Revised City Charter or Local Tax Code and not on legality
of the imposition of tax
ii) Exhaustion of administrative remedies before resorting to judicial bodies is not an
absolute rule. It admits of exceptions. Where the question litigated upon is purely a legal
one, the rule does not apply.
f) The ordinance is not a “tax ordinance” because rental, permit fees and etc. are not strictly a
taxing power, but a revenue raising function.
i) No application to Local Tax Code
g) The non-participation of the Market Committee in the enactment of Ordinance No. 7522
supposedly in accordance with Republic Act No. 6039 DOES NOT make the ordinance invalid
i) The function of the committee is purely recommendatory
h) Private respondent bewails that the market stall fees imposed in the disputed ordinance are
diverted to the exclusive private use of the Asiatic Integrated Corporation since the collection of
said fees had been let by the City of Manila to the said corporation in a "Management and
Operating Contract.
i) It does not matter whether the agency through which the money is dispensed is public or
private. The right to tax depends upon the ultimate use, purpose and object for which the
fund is raised.
i) Does not violate Section 3(e) of the Anti-Graft and Corrupt Practices Act
i) The increased rates of market stall fees as levied by the ordinance will necessarily inure to
the unwarranted benefit and advantage of the corporation.
5) What was the court’s decision? Who won the case?
a) The Local Tax Code prevails and the Ordinance is valid
b) Bagatsing WON
6) What is the court’s reasoning for the decision?
a) There is no question that the Revised Charter of the City of Manila is a special act since it relates
only to the City of Manila whereas the Local Tax Code is a general law because it applies
universally to all local governments
b) The Revised Charter of the City prescribes a rule for the publication of “ordinance” in general,
while the Local Tax Code establishes a rule for the publication of “ordinance levying or imposing
taxes fees or other charges” in particular.

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CASE # 58

KEY LESSON: Mandatory and directory provisions of tax laws

Antonio H. Abad, Jr. for private respondent.

Federico A. Blay for petitioner for intervention.

1) Who are the petitioners?

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