Manila Race Horse Trainers Assoc & Juan Sordan vs Manuel Dela Fuente

January 11, 1951

Amparo, J.
Digest by: KY Bautista

Topic: Rule of taxation shall be uniform and equitable
Provision: Art VI. Sec 28. (1) The rule of taxation shall be uniform and equitable. The Congress shall evolve
a progressive system of taxation.
DOCTRINE: There is equality and uniformity in taxation when: all articles or kinds of property of the same
class are taxed at the same rate. Equity in taxation is conceived in terms of ABILITY TO PAY in relation to
BENEFITS RECEIVED by the taxpayer & the public from the business taxed. Race horses are devoted to
GAMBLING if legalized, and their owners derive fat incomes but the public hardly profits from race horsing.
This business also demands heavy police supervision.

FACTS:
- On July 1947, the Manila Mayor approved Ordinance 3065
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- Manila Race Horse Trainers Association (MRHTA), a non-stock corporation duly organized under
Phil laws, allege that theyre owners of boarding stables for race horses and that their rights as
such are affected by such ordinance. They instituted this action for declaratory relief and made the
Manila Mayor defendant, praying that said ordinance be declared invalid for being
unconstitutional.
- CFI declared the ordinance constitutional & enacted in accordance with the powers of Municipal
Board granted by the Manila Charter.
- On appeal, MRHTA make 2 main arguments:
o ARGUMENT 1: Ordinance is a tax on race horses as distinct from boarding stables. In Sec
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of the ordinance, the basis of license fees is the number of race horses kept in the
stables to be paid by the maintainers at the rate of P10 a year xxx fee increases
correspondingly for each race horse xxx. Thus, if you have an empty stable, you pay no
license fee.
o ARGUMENT 2: The ordinance is discriminatory and savors of class legislation.
o ARGUMENT 3 (not so relevant): Contended for the first time in the SC that the
Municipal Board of Manila is without power to enact ordinance taxing private stables for
race horses. (Note: Ignored by the court.)
ISSUES/HELD:
1. Is the tax discriminatory? NO
2. Is it a tax on race horses or stables? Tax on STABLES. (to be precise, on owners of stables)
DISPOSITIVE: CFI affirmed w/ costs against plaintiffs.

RATIO:

Petitioners: Ordinance is discriminatory and amounts to class legislation (because in effect, stable owners
for horses that are NOT used for racing will be taxed less or not all)
SC: NO.
- There is equality and uniformity in taxation when: all articles or kinds of property of the same
class are taxed at the same rate.
- From the viewpoint of economics and public policy, the taxing of boarding stables for race horses
to the exclusion of boarding stables for horses dedicated to other purposes is not indefensible.
WHY?
o Owners of boarding stables + owners of race horses are a CLASS BY THEMSELVES
o Equity in taxation is conceived in terms of ABILITY TO PAY in relation to BENEFITS
RECEIVED by the taxpayer & the public from the business taxed.
o Race horses are devoted to GAMBLING if legalized, and their owners derive fat incomes.
But the public hardly profits from race horsing. This business also demands heavy police
supervision.
o Taking all into account, the differentiation against which MRHTA complains of actually
conforms to justice and equity.

Petitioners: Ordinance is a tax on race horses distinct from boarding stables.

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An ordinance providing for license fees on persons maintaining or conducting any boarding stable for horse races and/or race horse stables, or places
where horse are kept, fed, or boarded for others, for compensation or hire, and/or for private, and for other purposes

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SEC. 2. Fees. For every license granted under the provisions of this ordinance, there shall be paid an annual license fee, which may be paid either
annually, semestrally or quarterly at the option of the taxpayer, to wit:
Boarding stable for race horses:
Class A For each race horse, kept, maintained, fed or boarded in boarding stables - P10.00
Class B For each race horse, kept, maintained, or fed in private race horse stables - P5.00

SC: No. Its a tax assessed on owners of stables.
- Spirit of the ordinance determines construction, thus court looks at the context, subject matter
consequence and effect.
- Thus, from the context of the ordinance, the intent to tax or license STABLES and NOT HORSES is
clearly manifest. The tax assessed is not on the owners of the horses but on the owners of the
stables. (Of course, theres also nothing stopping stable owners from shifting the tax to the horse
owners in the form of increased rents or fees, which is generally the case)
- The number of horses used in the assessment is purely a method of fixing an equitable & practical
distribution of the burden imposed by the measure. This method is FAIR AND JUST. Why? Because
its fair that for a stable where only one horse is maintained, less amount should be taken than for
a stable with many horses.