Case Digest: Procter and Gamble PMC vs. Municipality of Jagna

PROCTER & GAMBLE PHL. MANUFACTURING CORPORATION vs. THE MUNICIPALITY OF JAGNA, PROVINCE OF BOHOL

G.R. No. L-24265 28 December 1979

FACTS:

The CFI of Manila upheld the validity of Ordinance No. 4, Series of 1957, which imposed “storage fees on all exportable copra deposited in the bodega of the Municipality of Jagna.” Plaintiff-appellant is engaged in the manufacture of soap, edible oil, margarine and other similar products, and for this purpose, maintains a bodega in Jagna where it stores copra purchased in the Municipality. It further claims that Ordinance No. 4 is ultra-vires and void for being beyond the power of the Municipality to enact and that it be allowed to refund to it the amount of Php42,265.13 it paid in protest.  Moreover, it claims that subject Ordinance is inapplicable to it as it is not engaged in the business or trade of storing copra for others for compensation or profit.

ISSUE: Whether the Municipality of Jagna was authorised to impose and collect the storage fee provided for in the challenged Ordinance.

RULING:

YES. The validity of the ordinance must be upheld pursuant to the broad authority conferred upon municipalities by CA No. 472, Section 1. Under the foregoing provision, a municipality is authorised to impose (1) a license for regulation of useful occupation; (2) a license for restriction or regulation of non-useful occupation or enterprises; and (3) license for revenue.

The storage fee imposed under the question Ordinance is actually a municipal license tax or fee on persons, firms and corporations, like plaintiff, exercising the privilege of storing copra in a bodega within the Municipality's territorial jurisdiction. For it has been held that a warehouse used for keeping or storing copra is an establishment likely to endanger the public safety or likely to give rise to conflagration because the oil content of the copra when ignited is difficult to put under control by water and the use of chemicals is necessary to put out the fire, the same is under Section 2238 of the Administrative Code.

Plaintiff's averment that the Ordinance, even if presumed valid, is inapplicable to it because it is not engaged in the business or occupation of buying or selling of copra but is only storing copra in connection with its main business of manufacturing soap and other similar products, and that to be compelled to pay the storage fees would amount to double taxation, does not inspire assent. The question of whether appellant is engaged in that business or not is irrelevant because the storage fee, as previously mentioned, is an imposition on the privilege of storing copra in a bodega within defendant municipality by persons, firms or corporations. Section 1 of the Ordinance in question does not state that said persons, firms or corporations should be engaged in the business or occupation of buying or selling copra. Moreover, by plaintiff's own admission that it is a consolidated corporation with its trading company, it will be hard to segregate the copra it uses for trading from that it utilizes for manufacturing.

Thus, it can be said that plaintiff's payment of storage fees imposed by the Ordinance in question does not amount to double taxation. For double taxation to exist, the same property must be taxed twice, when it should be taxed but once. Double taxation has also been defined as taxing the same person twice by the same jurisdiction for the same thing. Surely, a tax on plaintiff's products is different from a tax on the privilege of storing copra in a bodega situated within the territorial boundary of defendant municipality.