G.R. No.

L-23794

Ormoc Sugar Central v. Ormoc City

February 17, 1968

EN BANC
BENGZON, J.P., J.:
FACTS:
- Ormoc city passed an ordinance which provides: "There shall be paid to the City Treasurer on any
and all productions of centrifugal sugar milled at the Ormoc Sugar Company, Incorporated, in Ormoc
City, a municipal tax equivalent to one per centum (1%) per export sale to the United States of
America and other foreign countries."
- Ormoc Sugar Company filed a complaint against the city of Ormoc, alleging that the afore-stated
ordinance is unconstitutional for violating the equal protection clause (Sec. 1[1], Art. III,
Constitution) and the rule of uniformity of taxation (Sec. 22[1]), Art. VI, Constitution)
ISSUE(s):
1. W/N the ordinance violates the equal protection clause of the Constitution
HELD:
1. Yes. The SC held in favor of Ormoc Sugar. The SC noted that even if Sec 2287 of the RAC had
already been repealed by a latter statute (Sec 2 RA 2264) which effectively authorized LGUs to tax
goods and merchandise carried in and out of their turf, the act of Ormoc City is still violative of
equal protection. The ordinance is discriminatory for it taxes only centrifugal sugar produced and
exported by the Ormoc Sugar Company, Inc. and none other. At the time of the taxing ordinances
enactment, Ormoc Sugar Company, Inc., it is true, was the only sugar central in the city of Ormoc.
Still, the classification, to be reasonable, should be in terms applicable to future conditions as well.
The taxing ordinance should not be singular and exclusive as to exclude any subsequently
established sugar central, of the same class as plaintiff, from the coverage of the tax. As it is now,
even if later a similar company is set up, it cannot be subject to the tax because the ordinance
expressly points only to Ormoc Sugar Company, Inc. as the entity to be levied upon.
DOCTRINE(s)/KEY POINT(s):
- Equal Protection of the Laws
o 1987 Constitution, Article III, Section 1: No person shall be deprived of life, liberty, or property
without due process of law, nor shall any person be denied the equal protection of the laws.
o The equal protection clause applies only to persons or things identically situated and does not bar
a reasonable classification of the subject of legislation, and a classification is reasonable where (1)
it is based on substantial distinctions which make real differences; (2) these are germane to the
purpose of the law; (3) the classification applies not only to present conditions but also to future
conditions which are substantially identical to those of the present; (4) the classification applies
only to those who belong to the same class.

G.R. No. L-23794

o

Ormoc Sugar Central v. Ormoc City

February 17, 1968

It bears reiteration that the equal protection clause does not forbid all legal classification. What
is proscribes is a classification which is arbitrary and unreasonable. That constitutional guarantee
is not violated by a reasonable classification based upon substantial distinctions, where the
classification is germane to the purpose of the law and applies to all those belonging to the same
class. The purpose of the law is to allow the emergence of younger blood in local governments.
The classification in question being pursuant to that purpose, it cannot be considered invalid even
it at times, it may be susceptible to the objection that it is marred by theoretical inconsistencies.