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American Bible Society vs. City of Manila

GR No. L-9637 | April 30, 1957

Facts:
1. American Bible Society is a foreign, non-stock, non-profit, religious, missionary corporation
duly registered and doing business in the Philippines through its Philippine agency
established in Manila in November, 1898.

2. City of Manila is a municipal corporation with powers that are to be exercised in conformity
with the provisions of Republic Act No. 409, known as the Revised Charter of the City of
Manila.

3. American Bible Society has been distributing and selling bibles and/or gospel portions
throughout the Philippines and translating the same into several Philippine dialect.

4. City Treasurer of Manila informed American Bible Society that it was violating several
Ordinances for operating without the necessary permit and license, thereby requiring the
corporation to secure the permit and license fees covering the period from 4Q 1945-2Q 1953.

5. To avoid closing of its business, American Bible Society paid the City of Manila its permit
and license fees under protest.

6. American Bible filed a complaint, questioning the constitutionality and legality of the
Ordinances 2529 and 3000, and prayed for a refund of the payment made to the City of
Manila. They contended:
They had been in the Philippines since 1899 and were not required to pay any
license fee or sales tax.
It never made any profit from the sale of its bibles.

7. City of Manila prayed that the complaint be dismissed, reiterating the constitutionality of the
Ordinances in question.

8. Trial Court dismissed the complaint.

9. American Bible Society appealed to the Court of Appeals

Issue: WON American Bible Society liable to pay sales tax for the distribution and sale of bibles

Ruling: NO
Under Sec. 1 of Ordinance 3000, one of the ordinance in question, person or entity engaged
in any of the business, trades or occupation enumerated under Sec. 3 must obtain a Mayors
permit and license from the City Treasurer. American Bible Societys business is not among
those enumerated
However, item 79 of Sec. 3 of the Ordinance provides that all other businesses, trade or
occupation not mentioned, except those upon which the City is not empowered to license or to
tax P5.00
Therefore, the necessity of the permit is made to depend upon the power of the City to license
or tax said business, trade or occupation.
2 provisions of law that may have bearing on this case:
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a. Chapter 60 of the Revised Administrative Code, the Municipal Board of the City of Manila
is empowered to tax and fix the license fees on retail dealers engaged in the sale of books
b. Sec. 18(o) of RA 409: to tax and fix the license fee on dealers in general merchandise,
including importers and indentors, except those dealers who may be expressly subject to the
payment of some other municipal tax. Further, Dealers in general merchandise shall be classified
as (a) wholesale dealers and (b) retail dealers. For purposes of the tax on retail dealers, general
merchandise shall be classified into four main classes: namely (1) luxury articles, (2) semi-
luxury articles, (3) essential commodities, and (4) miscellaneous articles. A separate license shall
be prescribed for each class but where commodities of different classes are sold in the same
establishment, it shall not be compulsory for the owner to secure more than one license if he pays
the higher or highest rate of tax prescribed by ordinance. Wholesale dealers shall pay the license
tax as such, as may be provided by ordinance
The only difference between the 2 provisions is the limitation as to the amount of tax or
license fee that a retail dealer has to pay per annum
As held in Murdock vs. Pennsylvania, The power to impose a license tax on the exercise of
these freedoms provided for in the Bill of Rights, is indeed as potent as the power of censorship
which this Court has repeatedly struck down. It is not a nominal fee imposed as a regulatory
measure to defray the expenses of policing the activities in question. It is in no way apportioned.
It is flat license tax levied and collected as a condition to the pursuit of activities whose
enjoyment is guaranteed by the constitutional liberties of press and religion and inevitably tends
to suppress their exercise. That is almost uniformly recognized as the inherent vice and evil of
this flat license tax.
Further, the case also mentioned that the power to tax the exercise of a privilege is the power
to control or suppress its enjoyment. Those who can tax the exercise of this religious practice can
make its exercise so costly as to deprive it of the resources necessary for its maintenance. Those
who can tax the privilege of engaging in this form of missionary evangelism can close all its
doors to all those who do not have a full purse
Under Sec. 27(e) of Commonwealth Act No. 466 or the National Internal Revenue
Code,Corporations or associations organized and operated exclusively for religious, charitable,
. . . or educational purposes, . . .: Provided, however, That the income of whatever kind and
character from any of its properties, real or personal, or from any activity conducted for profit,
regardless of the disposition made of such income, shall be liable to the tax imposed under this
Code shall not be taxed
The price asked for the bibles and other religious pamphlets was in some instances a little bit
higher than the actual cost of the same but this cannot mean that American Bible Society was
engaged in the business or occupation of selling said "merchandise" for profit
Therefore, the Ordinance cannot be applied for in doing so it would impair American Bible
Societys free exercise and enjoyment of its religious profession and worship as well as its rights
of dissemination of religious beliefs.

Wherefore, and on the strength of the foregoing considerations, We hereby reverse the
decision appealed from, sentencing defendant return to plaintiff the sum of P5,891.45
unduly collected from it

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American Bible Society v. City of Manila

Full Text: http://www.lawphil.net/judjuris/juri1957/apr1957/gr_l-9637_1957.html

Facts:
In the course of its ministry, ABS has been distributing and selling bibles and/or gospels throughout
Philippines and translating the same into several Philippine dialects. On May 1953, the acting City
Treasurer of Manila informed ABS that it was conducting the business of general merchandise since
November 1945 without providing the city with Mayor's permit and municipal license in violation
of Ordinance No. 3000, as amended and Ordinances Nos. 2529, 3028, 3364 and required plaintiff to
secure within three days the permit and license fees, together with compromise covering the period from
fourth quarter of 1945 to second quarter of 1952 in P5, 281.45. ABS protested about the requirement but
paid to the defendant the said permit and license fees in the said amount.

Issue:
Whether or no the Ordinances of Manila Nos. 3000 as amended, and 2529, 3028 and 3364 are
applicable to the case at bar.

Held:
Yes, the city ordinances mentioned are still in force and effect.
When the old statute is repealed in its entirety and by the same enactment re-enacts all or certain
portions of the pre-existing law, the majority view holds that the rights and liabilities whihc have accrued
under the original statute are preserved and may be enforced, since the reenactment neutralizeds the
repeal, therefore continueing the law in force without interruption.
In the case at bar, Ordinances Nos. 2529 and 3000 of the city of Manila were enacted by the Municipal
Board of the City of Manila by virtue of the power granted to it by section 2444, subsection (m-2) of the
Revised Administrative Code, superseded on June 18, 1949, by section 18, subsection (1) of Republic
Act No. 409, known as the Revised Charter of the City of Manila. The only essential difference between
these two provisions is that while subsection (m-2) prescribes that the combined total tax of any dealer or
manufacturer, or both, enumerated under subsections (m-1) and (m-2), whether dealing in one or all of
the articles mentioned therein,shall not be in excess of P500 per annum, the corresponding section 18,
subsection (o) of Republic Act No. 409, does not contain any limitation as to the amount of tax or license
fee that the retail dealer has to pay per annum. Hence, and in accordance with the weight of the
authorities above referred to that maintain that "all rights and liabilities which have accrued under the
original statute are preserved and may be enforced, since the reenactment neutralizes the repeal,
therefore continuing the law in force without interruption", We hold that the questioned ordinances of the
City of Manila are still in force and effect.