Hagonoy Market Vendor Association vs. Municipality of Hagonoy, Bulacan

The 30-day appeal period prescribed by Section 187 of the 1991 Local Government Code for challenging the constitutionality or legality of tax ordinances before the Secretary of Justice is mandatory and cannot be brushed aside as a mere technicality, notwithstanding that procedural rules may be relaxed in cases of fortuitous events preventing formal compliance with appellate requirements.

The petitioner is an association of market vendors operating in the public markets of the Municipality of Hagonoy, Bulacan. The respondent municipality, through its Sangguniang Bayan, enacted ordinances fixing and collecting public market stall rentals as revenue measures. Under Section 187 of the 1991 Local Government Code, any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice, whose decision must be rendered within sixty (60) days from receipt. Section 188 of the same Code requires that certified true copies of municipal tax ordinances be published in full for three consecutive days in a newspaper of local circulation, or, where no such newspaper exists, posted in at least two conspicuous and publicly accessible places.

On October 1, 1996, the Sangguniang Bayan of Hagonoy, Bulacan, enacted Kautusan Blg. 28, an ordinance increasing the stall rentals of market vendors in the municipality. Article 3 of the ordinance provided that it shall take effect upon approval. The ordinance was signed by Councilor Felix V. Ople as Tagapangulo ng Sanggunian and Dr. Maria Garcia Santos as Pangulo Punong Bayan, and was approved by the Acting Municipal Mayor on October 7, 1996. Copies were given to the Municipal Treasurer on the same day. On November 9, 1996, the Sangguniang Panlalawigan approved the ordinance. Posting was carried out from November 4 to 25, 1996 in three public places: in front of the municipal building, at the bulletin board of the Sta. Ana Parish Church, and on the front door of the Office of the Market Master in the public market. Posting was validly made in lieu of publication, as there was no newspaper of local circulation in the municipality — a fact known to and admitted by the petitioner.

In the last week of November 1997, the petitioner's members were personally given copies of the approved ordinance and were informed that it would be enforced in January 1998. On December 8, 1997, the petitioner's President filed an appeal with the Secretary of Justice assailing the constitutionality of the tax ordinance, claiming unawareness of the posting. The respondent municipality opposed the appeal, contending that the ordinance took effect on October 6, 1996 and that the appeal, made over a year later, was time-barred.

The Secretary of Justice dismissed the appeal on the ground that it was filed beyond thirty (30) days from the effectivity of the ordinance, as prescribed under Section 187 of the 1991 Local Government Code. Citing Tañada vs. Tuvera, the Secretary held that the date of effectivity retroacted to the date of approval in October 1996 after the required posting had been complied with. Petitioner's motion for reconsideration was denied. Petitioner then elevated the matter to the Court of Appeals but did not assail the finding that the appeal was filed beyond the reglementary period; instead, it urged that the Secretary of Justice should have overlooked this technicality and ruled on the merits.

The Court of Appeals dismissed the petition for review for being formally deficient, as it was not accompanied by certified true copies of the assailed Resolutions of the Secretary of Justice as required under Section 6, Rule 43 of the 1997 Rules of Court. Petitioner moved for reconsideration, explaining that its failure to secure certified true copies was due to typhoon "Loleng," which caused government office suspensions and unavailability of personnel at the Department of Justice during the period for filing. The Court of Appeals denied the motion, prompting the present petition.

• Relaxation of Procedural Rules: Petitioner contended that the Court of Appeals erred in its strict, rigid, and technical adherence to Section 6, Rule 43 of the 1997 Rules of Court, which in effect frustrated the valid legal issues raised — that Ordinance No. 28 was not validly enacted, is contrary to law, and is unconstitutional, tantamount to an illegal exaction if enforced retroactively from October 1, 1996.
• Fortuitous Event and Substantial Compliance: Petitioner argued that the Court of Appeals erred in denying the motion for reconsideration notwithstanding the explanation that the failure to secure certified true copies was due to the intervention of an act of God — typhoon "Loleng" — and that the actual copies received may be considered as substantial compliance with the rules.
• Irreparable Damage: Petitioner maintained that it would suffer irreparable damage if Ordinance No. 28 were not declared null and void and allowed to be enforced retroactively from October 1, 1996, contrary to the general rule in Article 4 of the Civil Code that no law shall have retroactive effect.
• Reckoning of Appeal Period: Petitioner contended that the period to appeal should be counted not from the time the ordinance took effect in October 1996, but from the time its members were personally given copies of the approved ordinance in November 1997, asserting unawareness of the approval and effectivity on two grounds: first, no public hearing was conducted prior to passage, and second, the approved ordinance was not posted.

• Time-Barred Appeal: Respondent contended that the ordinance took effect on October 6, 1996 and that the ordinance, as approved, was posted as required by law, rendering petitioner's appeal — made over a year later — already time-barred.

• Procedural Rules — Formal Deficiency: Whether the Court of Appeals erred in dismissing the petition for review for failure to attach certified true copies of the assailed resolutions of the Secretary of Justice.
• Procedural Rules — Fortuitous Event: Whether the Court of Appeals erred in denying the motion for reconsideration despite petitioner's explanation that the failure to secure certified true copies was due to typhoon "Loleng" and that the actual copies constituted substantial compliance.
• Timeliness of Appeal: Whether the appeal to the Secretary of Justice was filed within the reglementary period prescribed under Section 187 of the Local Government Code.
• Reckoning of Appeal Period: Whether the 30-day appeal period should be reckoned from the date of personal receipt of copies of the ordinance in November 1997 rather than from the ordinance's effectivity in October 1996.
• Public Hearings: Whether public hearings were validly conducted prior to the enactment of the ordinance.
• Posting/Publication: Whether the ordinance was validly posted in lieu of publication as required by Section 188 of the Local Government Code.
• Substantive Validity: Whether the ordinance is valid on its substantive merits, including the uniformity of rates and the classification of public markets covered.

• Procedural Rules — Formal Deficiency: Yes, the Court of Appeals erred. The dismissal on purely formal grounds was improper given the fortuitous event that prevented compliance, as litigation is not a game of technicalities.
• Procedural Rules — Fortuitous Event: Yes, the Court of Appeals erred. Petitioner exerted due diligence to obtain certified true copies but failed on account of typhoon "Loleng," warranting relaxation of procedural rules.
• Timeliness of Appeal: No. The appeal was time-barred. The 30-day period under Section 187 of the Local Government Code is mandatory, and the ordinance took effect in October 1996 while the appeal was filed only in December 1997.
• Reckoning of Appeal Period: No. The appeal period is reckoned from the effectivity of the ordinance, not from personal receipt. Petitioner's claims of lack of public hearing and lack of posting were belied by the evidence.
• Public Hearings: No merit. Public hearings were conducted, as shown by the minutes and reports of the Sangguniang Bayan's Committee on Appropriations and Market on February 6, July 15, and August 19, 1996, and by petitioner's own communications enumerating objections raised in those meetings.
• Posting/Publication: Posting was validly made. The ordinance was posted from November 4 to 25, 1996 in three conspicuous public places, validly substituting for publication since no newspaper of local circulation existed in the municipality.
• Substantive Validity: The ordinance is valid. The limitations on percentage increases apply to tax rates, not rentals; the rates were uniformly imposed; and the exclusion of the makeshift Palengkeng Bagong Munisipyo from the increase was reasonably justified.

• Procedural Rules — Formal Deficiency: While courts generally frown upon uncompromising application of procedural rules so as not to subvert substantial justice, the Court found that the circumstances here warranted relaxation. Petitioner had satisfactorily explained in its motion for reconsideration before the Court of Appeals that during preparation of the petition on October 21, 1998, typhoon "Loleng" caused heavy rains; the person in charge at the Department of Justice was no longer available to certify the resolutions; the following day was declared a non-working holiday; and on October 23, 1998, government offices were suspended in the afternoon. To avoid being time-barred, the petition was filed "as is." The Court concluded that petitioner exerted due diligence but failed on account of the typhoon, a fortuitous event, and that the Court of Appeals should have tempered its strict application of procedural rules.

• Procedural Rules — Fortuitous Event: The rationale is the same as above. The Court emphasized that "litigation is not a game of technicalities," citing Government Service Insurance System vs. Court of Appeals. The fortuitous event of typhoon "Loleng" sufficiently explained the failure to attach certified true copies, and the appellate court should have accepted the explanation and considered the actual copies as substantial compliance.

• Timeliness of Appeal: Notwithstanding the error by the Court of Appeals on the procedural point, the petition was dismissed on the merits of the timeliness issue. Section 187 of the 1991 Local Government Code requires that any appeal questioning the constitutionality or legality of tax ordinances be filed within thirty (30) days from the effectivity thereof to the Secretary of Justice. The periods fixed by Section 187 are mandatory, not mere technicalities. The ordinance took effect in October 1996; petitioner filed its appeal only in December 1997, more than a year later. The Secretary of Justice correctly dismissed it as time-barred. The Court underscored that revenue collection is the lifeblood of government, and the validity of revenue measures must not be left uncertain for a considerable length of time, citing Commissioner of Internal Revenue vs. Algue, Inc.

• Reckoning of Appeal Period: Petitioner's assertion that the appeal period should be counted from personal receipt in November 1997 was rejected. Petitioner claimed unawareness of the ordinance's approval and effectivity on two grounds: absence of public hearing and absence of posting. Both claims were disproved. Petitioner's own communications with the Secretary of Justice enumerated objections raised by its members in several meetings called by the Sanggunian, demonstrating awareness of and participation in the public hearings. The respondent also submitted minutes and reports of public hearings conducted on February 6, July 15, and August 19, 1996. Petitioner's complaint that its objections were not adopted was untenable, as public hearings allow parties to ventilate views but do not bind the legislative body to adopt them.

• Public Hearings: The Court found that public hearings were indeed conducted, as evidenced by the minutes and reports of the Sangguniang Bayan's Committee on Appropriations and Market on three dates in 1996. Petitioner's own evidence — its communications with the Secretary of Justice — enumerated the various objections raised by its members before passage of the ordinance in several meetings, showing beyond doubt that petitioner was aware of the proposed increase and participated in the hearings. The Court explained that public hearings are conducted to allow interested parties to ventilate their views, but these views are not binding on the legislative body, which is mandated to use its discretion and best judgment in serving the people.

• Posting/Publication: Section 188 of the Local Government Code provides that where there are no newspapers of local circulation, tax ordinances may be posted in at least two conspicuous and publicly accessible places. The records contained positive evidence that the ordinance was posted from November 4 to 25, 1996 in three public places: in front of the municipal building, at the bulletin board of the Sta. Ana Parish Church, and on the front door of the Office of the Market Master. This was supported by the certification of the Sanggunian Secretary and affidavits of municipal employees. Petitioner's negative allegation that posting could not have been made in November 1996 was sufficiently disproved by the respondent's positive evidence. Petitioner admitted that no newspaper of local circulation existed in the municipality, validating posting in lieu of publication.

• Substantive Validity: On the substantive points, Section 6c.04 of the 1993 Municipal Revenue Code and Section 191 of the Local Government Code, which limit the percentage of increase, apply to tax rates, not rentals. The rates were uniformly imposed, and the public markets covered by the ordinance were reasonably classified. The ordinance covered three concrete public markets — the two-storey Bagong Palengke, the burnt but reconstructed Lumang Palengke, and the more recent Lumang Palengke with wet market — while excluding the Palengkeng Bagong Munisipyo or Gabaldon, which was only a makeshift, dilapidated place with no doors or protection for security, intended for transient peddlers.

• Mandatory Nature of Statutory Appeal Periods Under Section 187, Local Government Code — The 30-day period for appealing the constitutionality or legality of tax ordinances to the Secretary of Justice is mandatory and jurisdictional. It is not a "mere technicality" that can be easily brushed aside. The Court applied this by holding that petitioner's appeal, filed more than a year after the ordinance's effectivity, was correctly dismissed by the Secretary of Justice as time-barred.

• Relaxation of Procedural Rules in Cases of Fortuitous Events — While procedural rules exist for the orderly administration of justice and courts may apply them rigidly, relaxation is warranted where a party's non-compliance is attributable to a fortuitous event and the party has exerted due diligence. The Court applied this by finding that the Court of Appeals erred in dismissing the petition for review where the failure to attach certified true copies was caused by typhoon "Loleng," despite petitioner's diligent efforts to comply.

• Purpose and Effect of Public Hearings on Proposed Ordinances — Public hearings are conducted by legislative bodies to allow interested parties to ventilate their views on a proposed law or ordinance. These views, however, are not binding on the legislative body, which is not compelled by law to adopt them. Sanggunian members are elected to make laws promoting the general interest and are mandated to use their discretion and best judgment. The Court applied this by rejecting petitioner's grievance that its objections were not considered by the Sangguniang Bayan.

• Posting in Lieu of Publication for Municipal Tax Ordinances — Under Section 188 of the Local Government Code, where no newspaper of local circulation exists in a province, city, or municipality, posting of tax ordinances in at least two conspicuous and publicly accessible places validly substitutes for publication. The Court applied this by upholding the posting of Ordinance No. 28 in three public places as sufficient compliance.

• "The timeframe fixed by law for parties to avail of their legal remedies before competent courts is not a 'mere technicality' that can be easily brushed aside. The periods stated in Section 187 of the Local Government Code are mandatory." — This passage articulates the ratio decidendi on the mandatory and jurisdictional character of the appeal period for tax ordinances, distinguishing it from ordinary procedural rules that may be relaxed.

• "Under the circumstances, respondent appellate court should have tempered its strict application of procedural rules in view of the fortuitous event considering that litigation is not a game of technicalities." — This defines the Court's doctrine on when procedural rules may be relaxed — specifically, where non-compliance is caused by a fortuitous event despite due diligence — and is the formulation frequently cited in subsequent jurisprudence on equitable relaxation.

• "Public hearings are conducted by legislative bodies to allow interested parties to ventilate their views on a proposed law or ordinance. These views, however, are not binding on the legislative body and it is not compelled by law to adopt the same." — This passage defines the legal nature and effect of public hearings in the enactment of local ordinances, clarifying that participation does not entitle a party to have its position adopted.

• Tañada vs. Tuvera, 146 SCRA 448 (1986) — Cited by the Secretary of Justice for the proposition that the date of effectivity of an ordinance retroacts to the date of its approval after the required publication or posting has been complied with. The Court did not disturb this application.

• Government Service Insurance System vs. Court of Appeals, 266 SCRA 187 (1997) — Cited in support of the principle that litigation is not a game of technicalities and that procedural rules may be relaxed in appropriate circumstances.

• Reyes, et al. vs. Court of Appeals, et al., 320 SCRA 486 (1999) — Cited for the proposition that the periods stated in Section 187 of the Local Government Code are mandatory, referencing Agpalo, Statutory Construction.

• Commissioner of Internal Revenue vs. Algue, Inc., 158 SCRA 9 (1998) — Cited for the principle that collection of revenues is the lifeblood of government and that the validity of revenue measures must not be left uncertain for a considerable length of time.

• Section 187, Republic Act No. 7160 (1991 Local Government Code) — Governs the procedure for approval and effectivity of tax ordinances and revenue measures, including mandatory public hearings. Provides that any question on the constitutionality or legality of tax ordinances may be raised on appeal within thirty (30) days from effectivity to the Secretary of Justice, who shall render a decision within sixty (60) days. The appeal does not suspend the effectivity of the ordinance. Applied as the controlling provision establishing the mandatory 30-day appeal period within which petitioner failed to file.

• Section 188, Republic Act No. 7160 (1991 Local Government Code) — Requires publication of tax ordinances in full for three consecutive days in a newspaper of local circulation within ten days after approval; where no newspaper of local circulation exists, posting in at least two conspicuous and publicly accessible places is allowed. Applied to uphold the validity of posting Ordinance No. 28 in three public places in lieu of publication, given the absence of a newspaper of local circulation in Hagonoy.

• Section 6, Rule 43, 1997 Rules of Court — Requires that a petition for review before the Court of Appeals be accompanied by certified true copies of the assailed judgments or resolutions. Applied by the Court of Appeals as the basis for dismissing the petition for formal deficiency; the Supreme Court held that strict application was erroneous under the circumstances but ultimately sustained dismissal on other grounds.

• Article 4, Civil Code — Provides that laws shall have no retroactive effect unless the contrary is provided. Invoked by petitioner to argue against retroactive enforcement of the ordinance; the Court did not rule on this point directly, having disposed of the petition on timeliness and validity grounds.

Davide, Jr., C.J. (Chairman), Kapunan, Pardo, and Ynares-Santiago, JJ., concurred.