Province of Misamis Oriental VS CEPALCO

Facts:
Cagayan Electric Power and light Co, Inc. (CEPALCO) was granted a franchise in 1961 under RA 3247 to
install, operate and maintain an electric light, heat and power system in Cagayan de Oro and its
suburbs. These 3 RA provided that in consideration of the franchise granted, the grantee shall pay a
franchise tax equal to 3% of the gross earnings for electric current sold under the franchise (2% goes to
the national treasury and the 1% goes to the treasury of the Municipalities of Tagoloan, Opol, Villanueva
and Jasaan, and CDO) provided that the 3% shall be in lieu of all taxes and assessments of whatever
authority upon privileges and earnings, income, franchise and poles, wires, transformers, and insulators
of the grantee from which taxes and assessments the grantee is hereby expressly exempted.
In 1973, the Local Tax Code (PD 231) was promulgated, where Section 9 thereof providing for a franchise
tax. Pursuant to the PD, the Province of Misamis Oriental enacted provincial revenue ordinance no. 19
imposing a franchise tax of % on businesses enjoying franchise. The provincial Treasurer demanded
payment from CEPALCO, at first the latter refused but in view of the opinion of the provincial fiscal,
CEPALCO paid under protest. The ruling of the Provincial Fiscal was appealed to the Sec of Justice who
reversed it and ruled in favor of CEPALCO. The Provincial Treasurer demanded payment of the provincial
franchise tax from CEPALCO. CEPALCO paid under protest.

Issue: Whether a corporation whose franchise expressly provides that the payment of the franchise tax
of 3% of the gross earnings shall be in lieu of all taxes and assessments of whatever authority upon
privileges, earnings, income, franchise, and poles, wires, transformers, and insulators of the grantee is
exempt from paying a provincial franchise tax.
*Whether the Local Tax Code amended CEPALCOs franchise.

Held:
No. There is no provision in PD231 expressly or impliedly amending or repealing RA 6020. The repugnancy
must be clear before the court could decide if there was any amendment made since there is no express
provision found in PD231 to that effect.
A special and local statute applicable to a particular case is not appealed by a later statute which is
general in terms, unless there is manifest intent to repeal or alter the special law. Presumption: special
statutes are exceptions to the general law because they pertain to a special charter granted to meet a
particular set of conditions and circumstances. The franchise expressly exempts it from payment of all
taxes of whatever authority except the 3%.
The phrase shall be in lieu of all taxes... were used in previous franchises and in these cases it was held
that the franchises were indeed exempt from other taxes imposed on it except for what was stated in the
franchise.