Coca-Cola Bottlers Philippines, Inc. vs. City of Manila

An ordinance that has been declared null and void does not legally exist and cannot be the subject of an amendatory ordinance; the passage of an amendatory ordinance does not cure the defects of the invalid original.

Petitioner Coca-Cola Bottlers Philippines, Inc. is a corporation engaged in the manufacture and sale of beverages, maintaining a sales office in the City of Manila. The City of Manila enacted Tax Ordinance No. 7988, the Revised Revenue Code, which increased local business tax rates. Under Section 187 of the Local Government Code of 1991, questions on the constitutionality or legality of tax ordinances may be raised on appeal to the Secretary of Justice.

Petitioner Coca-Cola Bottlers Philippines, Inc. is a corporation engaged in manufacturing and selling beverages, with a sales office in the City of Manila. On February 25, 2000, the City Mayor of Manila approved Tax Ordinance No. 7988, the "Revised Revenue Code of the City of Manila," which increased tax rates for certain establishments, including the petitioner. Aggrieved, petitioner filed a petition with the Department of Justice (DOJ) questioning the legality of Section 21 of the ordinance, arguing that the deletion of an exemption provision imposed an additional business tax beyond the City's taxing power under the Local Government Code.

On August 17, 2000, the DOJ Secretary declared Tax Ordinance No. 7988 null and void for lack of mandatory publication, finding that it was published only once in the May 22, 2000 issue of the Philippine Post, instead of for three consecutive days as required by Section 188 of the Local Government Code. The City of Manila did not appeal this resolution, and it lapsed into finality. Following the DOJ ruling, the Bureau of Local Government Finance (BLGF) ordered the City Treasurer of Manila to cease and desist from enforcing the ordinance. Despite this, respondents continued to assess petitioner business tax for 2001 based on the rates of Tax Ordinance No. 7988, prompting petitioner to file a complaint for injunction with the RTC of Manila, Branch 21.

On November 28, 2001, the RTC rendered a decision in favor of petitioner, permanently enjoining respondents from implementing Tax Ordinance No. 7988. During the pendency of the case, the City Mayor approved Tax Ordinance No. 8011 on February 22, 2001, amending certain sections of Tax Ordinance No. 7988. Petitioner again challenged this before the DOJ, which, on July 5, 2001, declared Tax Ordinance No. 8011 null and void, reasoning that an invalid ordinance cannot be amended and the amendatory ordinance did not cure the defects of the original. The respondents' subsequent appeals to the RTC and the Supreme Court were dismissed, and the DOJ resolution attained finality.

Based on the enactment of Tax Ordinance No. 8011, the City of Manila filed a Motion for Reconsideration with the RTC of Manila, Branch 21, of its November 28, 2001 Decision. The RTC granted the motion in an Order dated May 8, 2002, dismissing the case on the ground that Tax Ordinance No. 7988 had already been amended by Tax Ordinance No. 8011. Petitioner's Motion for Reconsideration was denied on December 5, 2002, leading to the instant Petition for Review on Certiorari.

• Legality of the RTC Dismissal: Petitioner argued that the RTC erred in dismissing the injunction case based on the enactment of Tax Ordinance No. 8011, since both Tax Ordinance No. 7988 and its amendatory ordinance, Tax Ordinance No. 8011, had been declared null and void by the DOJ, and such declarations had attained finality.
• Validity of the Tax Ordinance: Petitioner maintained that Tax Ordinance No. 7988 was null and void for failure to comply with the mandatory three-day publication requirement under Section 188 of the Local Government Code of 1991, and that the deletion of the exemption provision in Section 21 exceeded the City's taxing power.

• Procedural Compliance: Respondents argued that the Petition raised questions of fact proscribed under Rule 45 and that the Petition was not properly verified and certified because the verifying officer, Nelson Empalmado, was not duly authorized to file the Petition.
• Publication of the Ordinance: Respondents alleged that the RTC failed to take into account their evidence purportedly proving that Tax Ordinance No. 7988 was published four times in a newspaper of general circulation.

• Procedural Issue - Question of Fact: Whether the Petition for Review on Certiorari raises questions of fact prohibited under Rule 45.
• Procedural Issue - Verification: Whether the Petition was properly verified and certified by an authorized officer of the petitioner corporation.
• Validity of the Dismissal: Whether the RTC erred in dismissing the injunction case on the ground that Tax Ordinance No. 7988 had been amended by Tax Ordinance No. 8011.

• Procedural Issue - Question of Fact: No. The Petition raises only questions of law, as it does not call for a determination of the truth or falsity of facts, but rather whether the RTC erred in dismissing the case in light of the enactment of an amendatory ordinance.
• Procedural Issue - Verification: Yes. The Petition was properly verified because the authority of the verifying officer emanated from a Special Power of Attorney executed by an authorized representative of the corporation.
• Validity of the Dismissal: Yes. The RTC erred in dismissing the case because the amendatory ordinance, Tax Ordinance No. 8011, had been declared null and void and legally inexistent, and an invalid ordinance cannot be amended.

• Procedural Issue - Question of Fact: The Court found that the Petition does not present an issue requiring a ruling on the truth or falsity of any fact. The resolution of whether the RTC erred in dismissing the case due to the enactment of Tax Ordinance No. 8011 does not necessitate an incursion into the facts. Ironically, it was the respondents who raised a question of fact by alleging that the RTC failed to consider their evidence on the publication of Tax Ordinance No. 7988, which would require a calibration of the probative value of evidence—a task the Supreme Court, not being a trier of facts, will decline to undertake.
• Procedural Issue - Verification: The Secretary's Certificate did not explicitly name Nelson Empalmado as authorized to file the Petition. However, the persons authorized to represent the corporation were also empowered to designate an attorney-in-fact. Ramon V. Lapez, Jr., one of the authorized representatives, executed a Special Power of Attorney authorizing Empalmado to file the Petition. Thus, the Petition was properly verified in accordance with the 1997 Rules of Civil Procedure.
• Validity of the Dismissal: It was undisputed that Tax Ordinance No. 7988 was declared null and void by the DOJ for failure to publish it for three consecutive days, and this resolution attained finality. Tax Ordinance No. 8011, which purported to amend Tax Ordinance No. 7988, was likewise declared null and void by the DOJ, a ruling that also attained finality after the Supreme Court dismissed the respondents' appeal. Because an invalid ordinance does not legally exist, there is no occasion or need to amend it. The passage of the amendatory ordinance did not cure the defects of the original. Therefore, the RTC had no basis in law to dismiss the injunction case on the ground that Tax Ordinance No. 7988 had been amended.

• Doctrine of Legal Inexistence of Void Laws — An invalid or unconstitutional law or ordinance does not, in legal contemplation, exist. If an order or law sought to be amended is invalid, it does not legally exist, and there is no occasion or need to amend it. The passage of an amendatory ordinance does not cure the defects of the invalid original ordinance. The local government should instead enact a new tax measure that strictly complies with the requirements of law.
• Mandatory Publication of Tax Ordinances — Under Section 188 of the Local Government Code of 1991, the publication of tax ordinances for three consecutive days in a newspaper of local circulation is mandatory. The use of the word "shall" is imperative and leaves no choice. Strict observance of this requirement is the safeguard against unjust exercise of taxing powers, ensuring taxpayers are notified and can voice objections.

• "if an order or law sought to be amended is invalid, then it does not legally exist, there should be no occasion or need to amend it." — This passage articulates the ratio decidendi for reversing the RTC, establishing that a void ordinance cannot be amended and an amendatory ordinance cannot cure the defects of a legally inexistent measure.
• "The enforcement of any tax ordinance or revenue measures after due notice of the disapproval or suspension thereof shall be sufficient ground to administrative disciplinary action against the local officials and employees responsible therefore." — Quoted from Section 190 of the Local Government Code by the BLGF, emphasizing the administrative consequences of enforcing a void tax ordinance.

• People vs. Lim, 108 Phil. 1091 (1960) — Cited as controlling precedent for the doctrine that if a law or order sought to be amended is invalid, it does not legally exist and cannot be amended.
• Manila Motors Co., Inc. vs. Flores, 99 Phil. 738 — Cited by the DOJ to support the proposition that an invalid law or ordinance does not, in legal contemplation, exist.
• Morales vs. The Board of Regents of the University of the Philippines, G.R. No. 161172 — Cited to distinguish between questions of law and questions of fact in Rule 45 petitions.

• Section 187, Republic Act No. 7160 (Local Government Code of 1991) — Provides the procedure for approval and effectivity of tax ordinances, including mandatory public hearings and the right to appeal questions of constitutionality or legality to the Secretary of Justice within thirty days from effectivity.
• Section 188, Republic Act No. 7160 (Local Government Code of 1991) — Mandates that tax ordinances be published in full for three consecutive days in a newspaper of local circulation within ten days after their approval. The failure to comply with this requirement renders the ordinance null and void.
• Section 190, Republic Act No. 7160 (Local Government Code of 1991) — States that enforcing a void or suspended tax ordinance after due notice is sufficient ground for administrative disciplinary action against responsible local officials.
• Rule 45, 1997 Rules of Civil Procedure — Governs appeals by certiorari to the Supreme Court, limiting the Court's review to questions of law.

Artemio V. Panganiban (Chief Justice, Chairperson), Consuelo Ynares-Santiago, Ma. Alicia Austria-Martinez, Romeo J. Callejo, Sr.