[ G. R. No. 16254. February 21, 1922 ] 42 Phil. 818
[ G. R. No. 16254. February 21, 1922 ]
G. A. CUUNJIENG, PLAINTIFF AND APPELLEE, VS. FRED L. PATSTONE, ENGINEER OF THE CITY OF MANILA, DEFENDANT AND APPELLANT. D E C I S I O N
OSTRAND, J.:
This is a petition for a writ of mandamus to compel the city engineer of Manila to issue a building permit. There is no dispute as to the facts. The plaintiff desires to erect a warehouse on Azcarraga Street but is denied a building permit until he shall have made provision for the construction of an arcade over the sidewalk in front of the building and until he shall have further complied with section 1 of Ordinance No. 301 of the city of Manila, which reads as follows:
“Whenever the owner, person in charge, or any other person or entity having a right in any property located on the principal streets and avenues of the city of Manila, such as Legarda, R. Hidalgo, Carriedo, Echague, Moriones, Azcarraga, Rizal, Taft, San Miguel, and others which may, by ordinance, hereafter be designated by the Municipal Board, desires to erect or reconstruct a building or any other construction on said property, the same shall pay, once the plan of the work has been approved by the city engineer, one-half of the assessed value of the city land located within the arcades of said building or construction, as a license fee for the use and occupation of said land: Provided, That the construction of arcades on streets having a width of twenty or more meters, not hereinbefore mentioned in this section, shall not be carried out, until after the plan of the work has been approved by the city engineer, and half of the assessed value of the city land located within said arcades has been paid for by the owner, person in charge or any other person or entity having a right in the building which is to be erected or constructed, as a license fee for the use and occupation of said land.”
The plaintiff refuses to construct the arcade and to comply with the ordinance in question on the grounds that the arcade is unnecessary and unsuitable for his warehouse and that the city has no power to require its construction; and that the ordinance in exacting the payment of a fee of one-half of the assessed value of the city land covered by the arcade is in excess of the legislative powers of the Municipal Board and, therefore, unconstitutional. It seems, however, to be conceded that under the climatic conditions here existing, arcades are both useful and desirable from the standpoint of public convenience and that the Municipal Board, under its general powers to regulate the construction of buildings and their alignment with the streets, and also under the general welfare of the city charter, has power to provide for the construction of arcades on certain streets. In any event, the question has not been raised by assignment of error and the discussion may, therefore, properly be limited to two points: First, whether the question of the constitutionality of statutes or city ordinances may be raised in mandamus proceedings and second, whether under its charter, the city of Manila may, under the guise of a license fee and as a prerequisite for the issuance of a building permit, exact the payment of one-half of the assessed value of the portion of the side-walk covered by the arcade.
Upon the first point the authorities are not entirely in harmony, but in modern practice it has been generally held that the writ will lie where, as in the present case e question of constitutionality is raised by the petitioner.(See State ex rel., Fooshe vs. Burley, 16 L. R. A. [N. S.], 266, with its case note.) The rule is different where the respondent relies on the unconstitutionality of a statute as a defense in mandamus proceedings. In such cases the courts have generally declined to consider questions of constitutionality. ( See State ex rel., New Orleans Canal & Banking Co. vs. Heard, 47 L. R. A., 512, and the case note thereto.) The reason for this is obvious: It might seriously hinder the transaction of public business if ministerial officers were to be permitted in all cases to question the constitutionality of statutes and ordinances imposing duties upon them and which have not judicially been declared unconstitutional. The same reasons do not exist where the validity of the statutes is attacked by the petitioner.
There being no other adequate remedy and there appearing to be no reason in principle why we should not consider the validity of the city ordinance here in question in mandamus proceedings, we are of the opinion, and so hold, that the present action has been properly brought.
The second point above-mentioned merits a more extended consideration. In discussing it we must bear in mind that legislative powers in regard to taxes and licenses are not inherent in municipal corporations but must be granted by statute either expressly or by necessary implication. Like other delegated powers, they are subject to strict construction.
That the city does not possess such an extraordinary power as that of compelling property holders to lease the portions of the public sidewalks which adjoin their lands requires no argument. The charge of one-half of the assessed value imposed on applicants for building permits can, therefore, not be considered as rent, and to be valid must either be a tax or a license fee. The legislative powers of the city in regard to taxes and license fees are enumerated in the following subsections of section 2444 of the Administrative Code, as amended by section 8 of Act No. 2774, and in section 2507 of the Administrative Code:
“SEC. 2444. General powers and duties of the Board.—Except as otherwise provided by law, and subject to the conditions and limitations thereof, the Municipal Board shall have the following legislative powers:
“(a) To provide for the levy and collection of taxes for general and special purposes in accordance with law.
“(b) To fix the tariff of fees and charges for all services rendered by the city or any of its departments, branches, or officials.
“(h) To establish fire limits, determine the kinds of buildings or structures that may be erected within said limits, regulate the manner of constructing and repairing the same, and fix the fees for permits for the construction, repair, or demolition of buildings and structures.
“(j) To regulate the use of lights in stables, shops, and other buildings and places, and to regulate and restrict the issuance of permits for the building of bonfires and the use of firecrackers, fireworks, torpedoes, candles, sky-rockets, and other pyrotechnic displays, and to fix the fees for such permits.
“(l) To regulate and fix the amount of the license fees for the following: Hawkers, peddlers, hucksters, not including hucksters or peddlers who sell only native vegetables, fruits, or foods, personally carried by the hucksters or peddlers; auctioneers, plumbers, barbers, embalmers, collecting agencies, mercantile agencies, shipping and intelligence offices, private detective agencies, advertising agencies, massagists, tattooers, jugglers, acrobats, hotels, clubs, restaurants, cafes, lodging houses, boarding houses, livery garages, livery stables, boarding stables, dealers in large cattle, public billiard tables, laundries, cleaning and dyeing establishments, public warehouses, dance halls, cabarets, circus and other similar parades, public vehicles, race tracks, horse races, bowling alleys, shooting, galleries, slot machines, merry-go-rounds, pawnshops, dealers in second-hand merchandise, junk dealers, brewers, distillers, rectifyers, money changers and brokers, public ferries, theaters, theatrical performances, cinematographs, public exhibitions, circuses and all other performances, and places of amusement, and the keeping, preparation, and sale of meat, poultry, fish, game, butter, cheese, lard, vegetables, bread, and other provisions.
“(m) To tax, fix the license fee for, regulate the business, and fix the location of match factories, blacksmith shops, foundries, steam boilers, lumber yards, ship yards, the storage and sale of gunpowder, tar, pitch, resin, coal, oil, gasoline, benzine, turpentine, hemp, cotton, nitroglycerin, petroleum, or any of the products thereof, and of all other highly combustible or explosive materials, and other establishments likely to endanger the public safety or give rise to conflagrations, or explosions, and, subject to the provisions of ordinances issued by the Philippine Health Service in accordance with law, tanneries, renderies, tallow chandleries, bone factories, and soap factories.
“(n) To tax motor and other vehicles and draft animals not paying the public vehicles license fee or any other Insular tax.
“(o) To regulate the method of using steam engines and boilers, other than marine or belonging to the Federal or Insular Governments; to provide for the inspection thereof, and for a reasonable fee for such inspection, and to regulate and fix the fees for the licenses of the engineers engaged in operating the same.
“(q) To prohibit, or regulate and fix the license fees for, the keeping of dogs, and to authorize their impounding and destruction when running at large contrary to ordinances, and to tax and regulate the keeping or training of fighting cocks.
“(u) Subject to the provisions of sections nineteen hundred and four and nineteen hundred and five of this Code, to provide for the laying out, construction, and improvement, and to regulate the use, of streets, avenues, alleys, sidewalks, wharves, piers, parks, cemeteries, and other public places; to provide for lighting, cleaning, and sprinkling of streets and public places; to regulate, fix license fees for, and prohibit the use of the same for processions, signs, signposts, awnings, awning posts, the carrying or displaying of banners, placards, advertisements, or hand bills, or the flying of signs, flags, or banners, whether along, across, over, or from buildings along the same; to prohibit the placing, throwing, depositing, or leaving of obstacles of any kind, offal, garbage, refuse, or other offensive matter or matter liable to cause damage, in the streets and other public places, and to provide for the collection and disposition thereof; to provide for the inspection of, fix the license fees for, and regulate the openings in the same for the laying of gas, water, sewer, and other pipes, the building and repair of tunnels, sewers, and drains, and all structures in and under the same, and the erecting of poles and the stringing of wires therein; to provide for and regulate cross-walks, curbs, and gutters therein; to name streets without a name and provide for and regulate the numbering of houses and lots fronting thereon or in the interior of the blocks; to regulate traffic and sales upon the streets and other public places; to provide for the abatement of nuisances in the same and punish the authors or owners thereof; to provide for the construction and maintenance, and regulate the use, of bridges, viaducts, and culverts; to prohibit and regulate ball playing, kite flying, hoop rolling, and other amusements which may annoy persons using the streets and public places, or frighten horses or other animals; to regulate the speed of horses and other animals, motor and other vehicles, cars, and locomotives within the limits of the city; to regulate the lights used on all such vehicles, cars, and locomotives; to regulate the locating, constructing and laying of the track of horse, electric, and other forms of railroad in the streets or other public places of the city authorized by law; to provide for and change the location, grade, and crossings of railroads, and to compel any such railroad to raise or lower its tracks to conform to such provisions or changes; and to require railroad companies to fence their property, or any part thereof, to provide suitable protection against injury to persons or property, and to construct and repair ditches, drains, sewers, and culverts along and under their tracks, so that the natural drainage of the streets and adjacent property shall not be obstructed.
“(w) To fix the charges to be paid by all water craft landing at or using public wharves, docks, levees, or landing places: Provided, That the provisions of this subsection shall not apply to the public wharves, docks, levees, or landing places constructed within the breakwater, on the banks of the canal connecting the Pasig River with the inner basin, and on both sides of said river below the Jones Bridge.
“(z) Subject to the provisions of ordinances issued by the Philippine Health Service in accordance with law, to provide for the establishment and maintenance and fix the fees for the use of, and regulate public stables, laundries, and baths, and public markets and slaughterhouses, and prohibit the establishment or operation within the city limits of public markets and slaughterhouses by any person, entity, association, or corporation other than the city.
“(aa) To regulate, inspect, and provide measures preventing any discrimination or the exclusion of any race or races in or from any institution, establishment, or service open to the public within the city limits, or in the sale and supply of gas or electricity, or in the telephone and street-railway service; to fix and regulate charges therefor where the same have not been fixed by Act of Congress or of the Philippine Legislature; to regulate and provide for the inspection of all gas, electric, telephone, and street- railway conduits, mains, meters, and other apparatus, and provide for the condemnation, substitution or removal of the same when defective or dangerous.
“(ee) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare of the city and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and duties conferred by this chapter; and to fix penalties for the violation of ordinances which shall not exceed a two hundred peso fine or six months’ imprisonment, or both such fine and imprisonment, for a single offense.”
“SEC. 2507. Power to levy special assessments for certain purposes.—The Municipal Board may, by ordinance duly approved, provide for the levying and collection, by special assessments of the real estate comprised within the district or section of the city especially benefited, of a part not to exceed sixty per centum of the cost of laying out, opening, constructing, straightening, widening, extending, grading, paving, curbing, walling, deepening, or otherwise establishing, repairing, enlarging, or improving public avenues, roads, streets, alleys, sidewalks, parks, plazas, bridges, landing places, wharves, piers, docks, levees, reservoirs, waterworks, water mains, water courses, esteros, canals, drains, and sewers, including the cost of acquiring the necessary land. Within the meaning of this article, all real estate comprised within the district benefited, except lands or buildings owned by the United States of America, the Government of the Philippine Islands, or the city of Manila, shall be subject to the payment of the special assessment, based upon the valuation of such real estate as shown by the books of the city assessor and collector, or its present value as fixed by said officer in the first instance if the property does not appear of record in his books according to the valuation whereof the special tax has to be made, computed, and assessed.”
Conceivably, there may be other instances where the police power to regulate carries with it impliedly the power to prescribe fees, but they have no relation to the issues here involved.
Examining the provisions quoted, it is clear that the only one which can possibly be applied to the present case is subsection (h) of section 2444 authorizing the fixing of fees for building permits and that if the charge in question possesses any validity whatever it must be as a license fee 7der that subsection.
The allowable amount of a license fee or tax depends so much on the special circumstances of each particular case that it is difficult to harmonize the numerous decisions on the subject and to formulate definite rules; but, generally speaking, the adjudications appear to recognize three classes of licenses, each with its distinct characteristic, which have been taken into consideration in determining the reasonableness of the license fee: First, licenses for the regulation of useful occupations or enterprises; secondly, licenses for the Regulation or restriction of non-useful occupations or enterprises, and thirdly, licenses for revenue only.
(1) The first two of these classes is based on the exercise of the police power and, though there is some conflict of authority on this point, the better rule seems to be that the conferred power to regulate and to issue such licenses carries with it the right to fix a license fee. It is well settled that in the absence of special authority to impose a tax for revenue the fee for this class of licenses may only be of a sufficient amount to include the expense of issuing the license and the cost of the necessary inspection or police surveillance, taking into account not only the expense of direct regulation but also incidental consequences.
Cooley on Constitutional Limitations, 6th ed., at page 242, says:
“A right to license an employment does not imply a right to charge a license fee therefor with a view to revenue, unless such seems to be the manifest purpose of the power; but the authority of the corporation will be limited to such a charge for the license as will cover the necessary expenses of issuing it, and the additional labor of officers and other expenses thereby imposed. (Davis vs. Petrinovich, 112 Ala., 654; 21 So., 344; 36 L. R. A., 615; Ft. Smith vs. Hunt, 72 Ark., 556; 82 S. W., 163; 105 A. S. R., 51; 66 L. R. A., 238; Waters-Pierce Oil Co. vs. Hot Springs, 85 Ark., 509; 109 S. W., 293; 16 L. R. A. [N. S.], 1035; Ex parte Dickey, 144 Cal., 234; 77 Pac, 924; 103 A. S. R., 82; 1 Ann. Cas., 428 and note; 66 L. R. A., 928; Morton vs. Macon, 111 Ga., 162; 36 S. E., 627; 50 L. R. A., 485; State vs. Ashbrook, 154 Mo., 375; 55 S. W., 627; 77 A. S. R., 765; 48 L. R. A., 265; St. Louis vs. Grafeman Dairy Co., 190 Mo., 492; 89 S. W., 617; 1 L. R. A. [N. S.], 936; Johnson vs. Great Falls, 38 Mont, 369; 99 Pac, 1059; 16 Ann. Cas., 974; Rosenbloom vs. State, 64 Neb., 342; 89 N. W., 1053; 57 L. R. A., 922; State vs. Boyd, 63 Neb., 829; 89 N. W., 417; 58 L. R. A., 108; Hughes vs. Snell, 28 Okla., 828; 115 Pac, 1105, Ann. Cas. [1912D] 374; 34 L. R. A. [N. S.], 1133; Ellis vs. Frazier, 38 Ore., 462; 63 Pac., 642; 53 L. R. A. 454; Laurens vs. Anderson, 75 S. C, 62; 55 S. E., 136; 117 A. S. R., 885; 9 Ann. Cas., 1003; Seattle vs. Dencker, 58 Wash., 501; 108 Pac, 1086; 137 A. S. R., 1076; 28 L. R. A. [N. S.], 446.)”
(2) Licenses for non-useful occupations are also incidental to the police power and the right to exact a fee may be implied from the power to license and regulate, but in fixing the amount of the license fees the municipal corporations are allowed a much wider discretion in this class of cases than in the former, and aside from applying the well-known legal principle that municipal ordinances must not be unreasonable, oppressive, or tyrannical, courts have, as a general rule, declined to interfere with such discretion. The desirability of imposing restraint upon the number of persons who might otherwise engage in non-useful enterprises is, of course, generally an important factor in the determination of the amount of this kind of license fee. Hence license fees clearly in the nature of privilege taxes for revenue have frequently been upheld, especially in cases of licenses for the sale of liquors. In fact, in the latter cases the fees have rarely been declared unreasonable. (Swarth vs. People, 109 111., 621; Dennehy vs. City of Chicago, 120 111., 627; 12 N. E., 227; United States Distilling Co. vs. City of Chicago, 112 111., 19; Drew County vs. Bennett, 43 Ark., 364; Merced County vs. Fleming, 111 Cal., 46; 43 Pac, 392; Williams vs. City Council of West Point, 68 Ga., 816; Cheny vs. Shellbyville, 19 Ind., 84; Wiley vs. Owens, 39 Ind., 429; Sweet vs. City of Wabash, 41 Ind., 7; Jones vs. Grady, 25 La. Ann., 586; Goldsmith vs. City of New Orleans, 31 La. Ann., 646; People ex rel., Cramer vs. Medberry, 39 N. Y. S., 207; 17 Misc. Rep., 8; McGuigan vs. Town of Belmont, 89 Wis., 637; 62 N. W., 421; Ex parte Burnett, 30 Ala., 461; Craig vs. Burnett, 32 Ala., 728, and Muhlenbrinck vs. Long Branch Commissioners, 42 N. J. L., 364;36 Am, Rep., 518.)
(3) The fee in the third class of cases, those for revenue purposes, is, perhaps, not a license fee properly speaking but is generally so termed. It rests upon the taxing power as distinguished from the police power, and the power of the municipality to exact such fees must be expressly granted by charter or statute and is not to be implied from the conferred power to license and regulate merely. Judge Cooley, citing numerous authorities, says:
“A license is issued under the police power; but the exaction of a license fee with a view to revenue would be an exercise of the power of taxation; and the charter must plainly show an intent to confer that power, or the municipal corporation cannot assume it.” (Cooley, Constitutional Limitations, 6th ed., pp. 242-243. See also Mayor vs. Beasly, 34 Am. Dec, 646, and Kip vs. City of Paterson, 26 N. J. L., 298.)
License taxes for revenue on useful occupations fall within this class.
When the power to license for revenue has been clearly granted, the rule as to the amount of the tax or fee laid down in Fire Department vs. Stanton (159 N. Y., 225), is applicable the municipality as much as to the state:
“The legislature of the state is not without power to impose a tax on a business in the form of a license fee, when it deems such to be warranted by considerations of public interest and for the general welfare, and the only limitation upon its exercise of power, in that respect, is that there shall be no discrimination or oppression, and that the burden shall be equally charged upon all persons in similar circumstances.”
Applying the legal principles above stated to the case at bar, we are constrained to hold that in imposing a fee equal to one-half of the assessed value of the portion of the sidewalk covered by the arcade in question, the Municipal Board of the city of Manila exceeded its powers. The construction of buildings is a useful enterprise and the amount of the license fee should therefore be limited to the cost of licensing, regulating, and surveillance. It appears that without the arcade the normal fee for the building permit would have been about P31, with the arcade the fee exacted is P525.60. It does not appear that the cost of licensing, regulating, and surveillance would be materially increased through the construction of the arcade, and it is therefore clear that the excess fee is imposed for the purpose of revenue.
There is nothing in the charter of the city of Manila indicating an intention on the part of the Legislature to confer power on the Municipal Board to impose a license tax for revenue on the construction of buildings. The power conferred in relation to such construction is considered merely as police power from which, as we have seen, taxing power is not inferred. Under the circumstances, to hold the fee in this case valid would amount to judicial legislation, particularly undesirable in the present instance where the Legislature, upon its attention being called to the matter, would no doubt willingly grant as much power as could wisely be placed in the hands of the municipality.
The judgment of the Court of First Instance holding that the city of Manila has the power to require the construction of arcades in certain circumstances but that the license fee prescribed by city Ordinance No. 301 is illegal, is therefore hereby affirmed. No costs will be allowed. So ordered.
Street, Avanceña, Johns, and Romualdez, JJ., concur.
Araullo, C. J., did not take part.