EN BANC

[G.R. No. 28863. October 11, 1928.]

BATANGAS TRANSPORTATION CO. , plaintiff-appellee, vs . PROVINCIAL

TREASURER OF BATANGAS, MUNICIPAL COUNCIL OF BATANGAS,
BATANGAS, and MUNICIPAL TREASURER OF BATANGAS , defendants-
appellants.

Provincial Fiscal De la Costa for appellants.

L. D. Lockwood for appellee.

SYLLABUS

1. MUNICIPAL ORDINANCE ON GARAGES; VOID, BEING IN VIOLATION OF LAW.

— Taking into consideration the well-known rule that laws authorizing municipalities to
impose taxes are to be strictly construed, Held: That the law authorizes municipal
councils to impose a tax on persons engaged in the garage business, where motor
vehicles are kept for hire, but does not authorize them to impose a tax on persons
engaged in the business of a common carrier, who own private garages wherein to
keep their motor vehicles. Therefore the ordinance in question having been enacted in
excess of the authority conferred upon municipal councils, is null and unlawful.
2. ID.; ID. — Furthermore, section 1, subsection (e), of Act No. 3422, provides that
a municipal council has no power to impose taxes, charges and fees on the business of
transportation contractors and persons engaged in the transportation of passengers
or freight by hire and common carriers by land or water.

DECISION

VILLAMOR , J : p

The municipal council of Batangas, in the regular session of June 20, 1924,
passed municipal ordinance No. 7, series of 1924, a complete copy of which is
attached to the complaint, imposing taxes on garages. When said ordinance went into
effect, the plaintiff Batangas Transportation Co. was required to pay, and did pay under
protest, the sum of P405 as garage tax. Later, the plaintiff led his action claiming the
return of the sum paid on the ground that the said municipal ordinance is null and
illegal.
After the case was set for hearing upon its merits, the parties submitted to the
court the following stipulation.
"STIPULATION
"Come now the parties in the above entitled case through their respective
attorneys, and to the honorable court hereby submit the following stipulation of
facts:
"1. That the plaintiff, Batangas Transportation Company, is a corporate
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 entity duly organized and existing under and by virtue of the laws of the
Philippine Islands, with its main o ce in the municipality of Batangas, Province
of Batangas, P. I., and is at present engaged in the operation, as a common
carrier, of an auto- truck service for the transportation of passengers and freight in
Batangas by virtue of the certi cate of public convenience duly issued by the
Public Service Commission of the Philippine Islands. That the plaintiff has a
garage in the municipality of Batangas for its trucks and automobiles, which it
uses on the public highways of the province, for the purpose of the business in
which it is engaged, in which garage are housed, cared for, and repaired, said
trucks and automobiles when not in use.
"2. That the defendants are o cers and employees duly appointed as
specified in the complaint.
"3. That on or about June 20, 1924, the defendant municipal council
approved and promulgated an ordinance known as Ordinance No. 7, series of
1924, of the municipality of Batangas, of which Exhibit A of the plaintiff is a
correct copy.
"4. That in pursuance of said ordinance, of which Exhibit A is an exact
copy, the defendants classi ed the plaintiff's garage in Batangas, as above
stated, as a second class garage, and therefore levied upon said garage the tax
corresponding to second class garages imposed on July 1, 1924, and later
collected the sum of P393.75 from the plaintiff, corresponding to the tax for the
period from July 1, 1924 to January 21, 1926, inclusive, plus a penalty of P11.25
imposed in the same manner, which sums the plaintiff paid under protest.
"5. That when the plaintiff's motor vehicles are being used and in operation
in conformity with the routes approved by the Public Service Commission (Public
Utility Commission), they cannot be hired in the plaintiff's garage, but must
continue operating on the routes to receive passengers and freight as speci ed by
the Commission, returning to the plaintiff's garage to be housed, inspected,
cleaned, repaired and made t and ready to be used again upon their respective
routes. The plaintiff owns 23 T. P. U. motor trucks and 2 P. U. cars. Of the 23
trucks, 17 are in operation and 6 are in reserve. Of the T. P. U. trucks one in use
and 6 in reserve are kept at night in the municipality of Batangas; of those that
are in use one is kept at night in Nasugbu, 2 in Palico, one in Balayan, 3 in Lemery,
3 in Taal, one in Cuenca, 3 in Bolbok, one in Lipa, and one in Santo Tomas.
"6. That the two aforementioned P. U. automobiles are Dodge cars, kept in
the plaintiff's garage to be hired by the hour in conformity with the tariff xed by
the Public Service Commission, and form a part of the plaintiff's equipment
authorized by the Public Service Commission.
"7. That in addition to operating these motor vehicles as a common carrier
as above-mentioned, the plaintiff authorizes special trips to be taken by such
trucks or motor vehicles by persons or groups of persons, at their request, but in
no case does the plaintiff authorize more than 10 vehicles to be so utilized. Such
trips are along the routes authorized by the Commission, for which the regular
fare is charged.
"8. That the defendants or any of them have not reimbursed the plaintiff in
the sum of P405 nor any part thereof.
"Batangas, Batangas, P. I., August 18, 1927.
"Respectfully submitted,

(Sgd.) "L. D. LOCKWOOD

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 "Attorney for the plaintiff
(Sgd.) "SIXTO DE LA COSTA
"Provincial Fiscal
"Counsel for the defendants"

In view of the foregoing stipulation of facts, the trial court adjudged: (a) That
municipal ordinance No. 7, series of 1924, approved on June 20, 1924 by the municipal
council of Batangas is null and void, and was passed without authority; (b) ordering the
defendants or such of them as may have under his control or in his possession the sum
of four hundred ve pesos (P405), collected from the plaintiff as tax under the
ordinance here held to be illegal, to return said sum to the plaintiff company; and (c)
further ordering the defendants or their agents or representatives to refrain from
enforcing or carrying into effect the ordinance here held to be illegal, or from collecting
the taxes provided therein. Without special pronouncement as to costs.
In behalf of the defendants, the provincial scal of Batangas appealed from the
judgment of the trial court, alleging that the latter erred in holding that municipal
ordinance No. 7, series of 1924, of the municipal council of Batangas, is null and
unlawful, said council being without authority to enact the same, and in ordering the
defendants to return the sum of P405, collected as tax thereunder to the plaintiff
company.
The authority invoked by the municipal council of Batangas to pass the municipal
ordinance in question is that contained in section 2307, subsection (e), of the
Administrative Code, which says:
"A municipal council shall have authority to impose taxes upon persons engaged
in business or exercising privileges in the municipality as hereinbelow speci ed, by
requiring them to procure licenses at rates fixed by ordinance of, the council:
xxx xxx xxx
"Garages where motor vehicles are kept for hire."
The word "garage" has been de ned by the Philippine Legislature in the
Automobile Law, No. 3045, as follows:
". . . (i) 'Garage' includes every place where motor vehicles belonging to
persons other than the owner of such garage are housed, stored, kept or repaired
for payment, and every place where motor vehicles are housed, stored or kept to
let or for hire to the public, with the exception of street stands or other public
places designated by proper municipal authority as parking space for motor
vehicles for hire, while waiting or soliciting passengers or business."
Let us see if the ordinance in question comes within the authority granted
to the municipal council by said section 2307 of the Administrative Code. Articles
1 and 2 of said ordinance are as follows:
"ARTICLE 1. Within the meaning of this ordinance, all buildings, structures,
lots, enclosures or parts thereof, where motor vehicles for hire are kept shall be
considered as garages.
"ART. 2. Within the meaning of this ordinance, all motor vehicles used for
hire, or for the transportation of passengers and freight for a stipulated price, shall
be considered as motor vehicles for hire."
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 It appears that the "garage" on which the municipal council seeks to impose a tax
is different from the "garage" on which the municipal council has power to impose a tax
under section 2307 of the Administrative Code. The attorney for the appellee
endeavors to show in his brief that there is a difference between a "garage" where
motor vehicles are kept for hire, and one where motor vehicles for hire are kept. This
seems to be a play upon words, but in reality, the phrases thus used have different
meanings. From paragraph 5 of the stipulation of facts, it appears that the plaintiff has
no motor vehicles for hire. Plaintiff is engaged in the business of transportation as a
common carrier. It operates its autobusses or trucks along certain routes speci ed in
its public utility certi cate issued by the Public Service Commission of the Philippine
Islands, and receives passengers and freight along the roads and highways on which it
operates. It also charges fares xed by the Public Service Commission. On the other
hand, the garage business consists in having a building where automobiles are kept for
hire. There are several of these in Manila, such as the N & B Garage, the 1-2-3 Garage,
etc. This is the garage business on which the law authorizes municipal councils to
impose a tax. The plaintiff, Batangas Transportation Co., is not and has not been
engaged in the garage business. It has been engaged in an entirely different kind of
business namely, that of a common carrier. Incident to its business, it has a building
where its trucks and automobiles are kept when not in use, to protect them from the
weather, where it inspects, cleans, and repairs them. For the purposes of this
discussion, plaintiff's garage is its own private garage, similar to that which almost
every automobile owner has to keep his car in when not in use. And in this sense, the
garage of the Batangas Transportation Co. ought not to be subject to the imposition of
any tax just as the private garages of car owners. The motor vehicles of plaintiff cannot
be hired in the garage, but operate along the routes transporting passengers and
freight under the passenger and freight rates xed by the Public Service Commission,
as common carriers; there are kept said motor vehicles in order to be housed,
inspected, cleaned and put in condition to go out on their respective routes again. Thus
it is seen that although the plaintiff's motor vehicles are used for hire upon the
authorized routes speci ed by the Public Service Commission, yet they are not put in
the plaintiff's garage in order to be hired out, but only in order to be inspected, cleaned
and repaired, and put in condition so that they can be used again on their respective
routes.
Bearing in mind the well-known rule that laws authorizing municipalities to
impose taxes are to be strictly construed, we are of the opinion and so hold, that the
law authorizes municipal councils to impose a tax on persons engaged in the garage
business, where motor vehicles are kept for hire, but does not authorize them to
impose a tax on persons engaged in the business of a common carrier, who own
private garages wherein to keep their motor vehicles. Therefore, municipal ordinance
No. 7, series of 1924, in question, having been enacted in excess of the authority
conferred by the law on municipal councils, is null and unlawful.
With respect to the two Dodge cars, which are motor vehicles for hire, they are
public utility vehicles and subject to the regulations of the Public Service Commission,
and are a part of the plaintiff's equipment authorized by the Public Service Commission,
and under section 53 of Act No. 3045, such automobiles are exempt from additional
taxes other than those specified in the law, with the exceptions made in said section.
In addition, section 1, paragraph (e), of Act No. 3422 provides that a municipal
council has no power to impose taxes, charges and fees on the business of
transportation contractors and persons engaged in the transportation of passengers
or freight by hire and common carriers by land or water.
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 In view of the foregoing, the appealed judgment should be, as it is hereby,
affirmed, without special pronouncement as to costs. So ordered.
Avanceña, C.J., Johnson, Street, Malcolm, Ostrand and Romualdez, JJ., concur.

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