EN BANC

[G.R. No. L-5101. November 28, 1953]

ANGELES S. SANTOS , petitioner-appellant, vs . PATERIO AQUINO, as

Municipal Mayor of Malabon, THE MUNICIPAL COUNCIL OF
MALABON, A. A. OLIVEROS, as Municipal Treasurer of Malabon,
Province of Rizal , respondents-appellees.

Arsenio Paez for appellant.

Ireneo V. Bernardo for appellee.

SYLLABUS

1.PLEADING AND PRACTICE; DECLARATORY RELIEF. — The action is not for

declaratory relief if the terms of the ordinances assailed are not ambiguous or of
doubtful meaning which require a construction thereof by the Court.
2.ID.; ID.; WHEN SUCH ACTION MAY BE FILED. — Granting that the validity or
legality of an ordinance may be drawn in question in an action for declaratory relief,
such relief must be asked before a violation of the ordinance be committed (section 2,
Rule 66).
3.ID.; ID.; PARTIES; REAL PARTY IN INTEREST. — The rule that actions must be
brought in the name of the real party in interest (section 2, Rule 3) applies to actions
brought under Rule 66 for declaratory relief. As to a theater, its owner, and not its
manager, is the real party in interest.
4.ADMINISTRATIVE LAW; MUNICIPAL COUNCIL, NOT A CONSTITUTIONAL
BODY. — Municipal councils are not constitutional bodies but creatures of the
Congress. The latter may even abolish or replace them with other government
instrumentalities.
5.TAXATION; THEATERS, TAXES ON; MUNICIPAL ORDINANCES; ACTION OF
DEPARTMENT OF FINANCE ON ORDINANCES IMPOSING TAXES. — Commonwealth
Act No. 472 grants to the Department of Finance the authority to disapprove, implied in
the power to approve, an ordinance of a municipal council imposing a tax on theaters
which is more than 50 per centum of the existing tax, or to reduce it, also implied in the
same power. This, of course, is to forestall abuse of power by the municipal councils. If
the Congress has granted to the Department of Finance the power to reduce such tax,
implied in the power to approve or disapprove, there seems to be no cogent reason for
requiring the municipal council concerned to adopt another ordinance xing the rate as
reduced by the Department of Finance. The action of that Department in approving an
ordinance of a municipal council at a reduced rate is not in excess of the powers
granted to the Department by law.

DECISION

PADILLA , J : p

CD Technologies Asia, Inc. © 2016 cdasiaonline.com

 This action purports to obtain a declaratory relief but the prayer of the petition
seeks to have Ordinance No. 61, series of 1946, and Ordinance No. 10, series of 1947,
of the Municipality of Malabon, Province of Rizal, declared null and void; to prevent the
collection of surcharges and penalties for failure to pay the taxes imposed by the
ordinances referred to, except for such failure from and after the taxpayer shall have
been served with the notice of the effectivity of the ordinances; and to enjoin the
respondents, their agents and all other persons acting for and in their behalf from
enforcing the ordinances referred to and from making any collection thereunder.
Further, petitioner prays for such other remedy and relief as may be deemed just and
equitable and asks that costs be taxed against the respondents.
The petitioner is the manager of a theater known as "Cine Concepción," located
and operated in the Municipality of Malabon, Province of Rizal, and the respondents are
the Municipal Mayor, the Municipal Council and the Municipal Treasurer, of Malabon.
The petitioner avers that Ordinance No. 61, series of 1946, adopted by the Municipal
Council of Malabon on 8 December 1946, imposes a license tax of P1,000 per annum
on the said theater in addition to a license tax on all tickets sold in theaters and
cinemas in Malabon, pursuant to Ordinance No. 58, series of 1946, adopted on the
same date as Ordinance No. 61, the same series; that prior to 8 December 1946 the
municipal license tax paid by the petitioner on "Cine Concepción" was P180, pursuant to
Ordinance No. 9, series of 1945; that on 6 December 1947, the Municipal Council of
Malabon adopted Ordinance No. 10, series of 1947, imposing a graduated municipal
license tax on theaters and cinematographs from P200 to P9,000 per annum; that the
ordinance was submitted for approval to the Department of Finance, which reduced the
rate of taxes provided therein, and the ordinance with the reduced rate of taxes was
approved on 3 November 1948; that notice of reduction of the tax rate and approval by
the Department of Finance of said graduated municipal license tax provided for in said
Ordinance No. 10, as reduced, was served on the petitioner on 12 February 1949 when
the respondent Municipal Treasurer presented a bill for collection thereof; that
Ordinance No. 61, series of 1946, is ultra vires and repugnant to the provisions of the
Constitution on taxation; that its approval was not in accordance with law; that
Ordinance No. 10, series of 1947, is also null and void, because the Department of
Finance that approved it acted in excess and against the powers granted it by law, and
is unjust, oppressive and con scatory; and that the adoption of both ordinances was
the result of persecution of the petitioner by the respondents because from 20 July
1946 to 8 December 1947, or within a period of less than one and a half years, the
Municipal Council of Malabon adopted four ordinances increasing the taxes on
cinematographs and theaters and imposing a penalty of 20 per cent surcharge for late
payment.
A motion to dismiss was led by the Assistant Provincial Fiscal of Rizal, but upon
suggestion of the Court at the hearing thereof, the respondents were prevailed upon to
file their answer.
In their answer the respondents allege that both ordinances adopted by the
Municipal Council of Malabon are not ultra vires, the same not being under any of the
exceptions provided for in section 3 of Commonwealth Act No. 472; that the
ordinances were adopted pursuant to the policy enunciated by the Secretary of the
Interior in a circular issued on 20 June 1946 which in substance suggested and urged
the municipal councils to increase their revenues and not to rely on the National
Government which was not in a position to render any help and to make such increase
dependent upon the taxpayer's ability to pay; that both ordinances assailed by the
petitioner had been submitted to, and approved by, the Department of Finance, as
CD Technologies Asia, Inc. © 2016 cdasiaonline.com
 required by section 4 of Commonwealth Act No. 472, and took effect on 1 January
1947 and 1 January 1948, respectively; that the petitioner had led a protest with the
Secretary of Finance against such increase of taxes, as xed by the municipal
ordinances in question but the Department of Finance although reducing the amount of
taxes imposed in Ordinance No. 10, series of 1947, and changing the date of effectivity
of both ordinances, upheld the legality thereof; and that the petitioner brought this
action for declaratory relief with the evident purpose of evading payment of the unpaid
balance of taxes due from the "Cine Concepción." By way of special defense the
respondents allege that the petition does not state facts suf cient to constitute a
cause of action; that the Court has no jurisdiction over the subject matter of the petition
for declaratory relief; that the petitioner should have paid under protest the taxes
imposed by the ordinances in question on "Cine Concepción" and after payment thereof
should bring an action under section 1579 of the Revised Administrative Code; that this
being an action for declaratory relief, the Provincial Fiscal of Rizal should have been
noti ed thereof but the petitioner failed to do so; that the petition does not join all the
necessary parties and, therefore, a judgment rendered in the case will not terminate the
uncertainty or the controversy that is sought to be settled and determined.
After hearing the Court rendered judgment holding that the ordinances in
question are valid and constitutional and dismissing the petition with costs against the
petitioner. The latter has appealed. This is not an action for declaratory relief, because
the terms of the ordinances assailed are not ambiguous or of doubtful meaning which
require a construction thereof by the Court. And granting that the validity or legality of
an ordinance may be drawn in question in an action for declaratory relief, such relief
must be asked before a violation of the ordinance be committed. 1 When this action
was brought on 12 May 1949, payment of the municipal license taxes imposed by both
ordinances, the tax rate of the last having been reduced by the Department of Finance,
was already due, and the prayer of the petition shows that the petitioner had not paid
them. In those circumstances the petitioner cannot bring an action for declaratory
relief.
Angeles S. Santos, the petitioner, does not aver nor does he testify that he is the
owner or part-owner of "Cine Concepción." He alleges that he is only the manager
thereof. For that reason he is not an interested party. He has no interest in the theater
known as "Cine Concepción" which may be affected by the municipal ordinances in
question and for that reason he is not entitled to bring this action either for declaratory
relief or for prohibition, which apparently is the purpose of the action as may be
gleaned from the prayer of the petition. The rule that actions must be brought in the
name of the real party in interest 2 applies to actions brought under Rule 66 for
declaratory relief. 3 The fact that he is the manager of the theater does not make him a
real party in interest. 4 Nevertheless, laying aside these procedural defects, we are of
the opinion and so hold that under Commonwealth Act No. 472 the Municipal Council of
Malabon is authorized and empowered to adopt the ordinances in question, and there
being no showing, as the evidence does not show, that the rate of the municipal taxes
therein provided is excessive, unjust, oppressive and con scatory, their validity and
legality must be upheld. The rate of the taxes in both ordinances, to wit: P1,000 a year
for "Class A Cinematographs having orchestra, balcony and loge seats" in Ordinance
No. 61, series of 1946, 5 and P2,000 for each theater or cinematograph with gross
annual receipts amounting to P130,000 or more in Ordinance No. 10, series of 1947, 6
under which the "Cine Concepción" falls, is not excessive but fair and just. It is far from
being oppressive and con scatory. Pursuant to said Commonwealth Act if the increase
CD Technologies Asia, Inc. © 2016 cdasiaonline.com
 of the municipal taxes is more than 50 per cent over the previous ones already in
existence, the Municipal Council adopting such increase must submit it for approval to
the Department of Finance which, although it cannot increase it, may reduce it and may
approve it as reduced, or may disapprove it. It is contended that as only municipal
councils are authorized by law to adopt ordinances, after the reduction by the
Department of Finance of the tax rate imposed in Ordinance No. 10, series of 1947, duly
adopted by the Municipal Council of Malabon, the latter should adopt another
ordinance accepting or xing the rate tax as reduced by the Department of Finance. The
contention is without merit, because the rate of taxes imposed on theaters or
cinematographs in Ordinance No. 10, series of 1947, was the only one reduced by the
Department of Finance and the reduction was for the bene t of the taxpayer as it was
very much lower than the rate xed by the Municipal Council. The authority and
discretion to x the amount of the tax was exercised by the Municipal Council of
Malabon when it xed the same at P9,000 a year. Certainly, the Municipal Council of
Malabon that xed the tax at P9,000 a year also approved the tax at P2,000 a year, this
being very much less than that xed in the ordinance. The power and discretion
exercised by the Municipal Council of Malabon when it xed the tax at P9,000 a year
must be deemed to have been exercised also by it when the Department of Finance
reduced it to P2,000 a year, for the greater includes the lesser. The adoption of another
ordinance xing the tax at P2,000 a year would be an idle ceremony and waste of time.
Moreover, it must be borne in mind that municipal councils are not constitutional
bodies but creatures of the Congress. The latter may even abolish or replace them with
other government instrumentalities. Commonwealth Act No. 472 grants to the
Department of Finance the authority to disapprove, implied in the power to approve, an
ordinance imposing a tax which is more than 50 per cent of the existing tax, or to
reduce it, also implied in the same power. This, of course, is to forestall abuse of power
by the municipal councils. If the Congress has granted to the Department of Finance the
power to reduce such tax, implied in the power to approve or disapprove, there seems
to be no cogent reason for requiring the municipal council concerned to adopt another
ordinance xing the tax as reduced by the Department of Finance. Therefore, the action
of the Department of Finance in approving Ordinance No. 10, series of 1947, at a
reduced rate, is not in excess of the powers granted it by law. The evidence does not
show that the adoption of the ordinances in question by the Municipal Council of
Malabon was the result of persecution of the petitioner.

The judgment appealed from is affirmed, with costs against the appellant.
Pablo, Tuason, Montemayor, Jugo, Bautista Angelo and Labrador, JJ., concur.

Separate Opinions
REYES, J., dissenting:
I dissent insofar as the majority opinion holds that Ordinance No. 10, series of
1947, of the municipality of Malabon, Rizal, as modi ed by the Secretary of Finance, is
valid and enforceable.
Under the Revised Administrative Code, the legislative power of a municipality is
lodged in the municipal council. It is true that the exercise of that power by the council
is subject to a certain degree of supervisory control on the part of certain of cers of
the National Government. And as an instance of this supervisory control, it is provided
CD Technologies Asia, Inc. © 2016 cdasiaonline.com
 in section 4 of Commonwealth Act No. 472 that if a municipal ordinance increases the
rate of a license tax on business, occupation or privilege in certain cases by more than
50 per cent, "the approval of the Secretary of Finance shall be secured." But having in
mind the principle of separation of powers which pervades the system of government
ordained by our Constitution, I take it that the veto power thus conferred upon the
Secretary of Finance only authorizes that of cer to approve or disapprove an ordinance
that is submitted to him in accordance with the above-quoted provision of the
Commonwealth Act, and that it does not empower him to change, alter or modify the
terms of the ordinance, for that would be investing an executive of cer with legislative
functions. Where a municipal ordinance, therefore, increases or decreases in certain
cases the rate of a license tax on business, occupation or privilege by more than 50 per
cent and the Secretary of Finance increases or decreases the new rate prescribed in the
ordinance, the action of the Secretary of Finance can only be taken as a
recommendation, so that the modi ed ordinance will have no effect until it is repassed
by the municipal council, in the same way that a tax bill already approved by the
Legislative but returned to that body by the President with a recommendation for an
increase or decrease in the rate of tax does not become a law unless repassed by the
Legislature with the changes proposed by the Chief Executive.
It is, therefore, my opinion that Ordinance No. 10, series of 1947, of the
municipality of Malabon which has been modi ed by the Secretary of Finance, cannot
be enforced unless repassed by the municipal council as so modi ed. The judgment
below should accordingly be modified.
Paras, C. J., concurs.

Footnotes

1.Section 2, Rule 66, Rules of Court.

2.Section 2, Rule 3, Rules of Court.
3.1 C. J. S. 1047-1049.

4.Dr. Pedro Cruz is the owner of "Cine Concepción."

5.Approved by the Department of Finance on 11 June 1947. So the tax for 1947 to be
collected was P180 plus 50 per centum of the original tax, or P90, or a total of P270.
6.Approved by the Department of Finance at a reduced rate on 3 November 1948. So the tax
for 1948 was that imposed by Ordinance No. 61, series of 1946, approved on 11 June
1947; and for 1949 was that imposed by Ordinance No. 10, series of 1047, as reduced
and approved by the Department of Finance on 3 November 1948.

CD Technologies Asia, Inc. © 2016 cdasiaonline.com