American Bible Society vs.

City of Manila

American Bible Society vs. City of Manila
GR No. L-9637 | April 30, 1957

Facts:
American Bible Society is a foreign, non-stock, non-profit, religious, missionary corporation duly
registered and doing business in the Philippines through its Philippine agency established in Manila in
November, 1898
City of Manila is a municipal corporation with powers that are to be exercised in conformity with the
provisions of Republic Act No. 409, known as the Revised Charter of the City of Manila
American Bible Society has been distributing and selling bibles and/or gospel portions throughout the
Philippines and translating the same into several Philippine dialect
City Treasurer of Manila informed American Bible Society that it was violating several Ordinances for
operating without the necessary permit and license, thereby requiring the corporation to secure the
permit and license fees covering the period from 4Q 1945-2Q 1953
To avoid closing of its business, American Bible Society paid the City of Manila its permit and license
fees under protest
American Bible filed a complaint, questioning the constitutionality and legality of the Ordinances 2529
and 3000, and prayed for a refund of the payment made to the City of Manila. They contended:
a. They had been in the Philippines since 1899 and were not required to pay any license fee or sales tax
b. it never made any profit from the sale of its bibles
City of Manila prayed that the complaint be dismissed, reiterating the constitutionality of the
Ordinances in question
Trial Court dismissed the complaint
American Bible Society appealed to the Court of Appeals

Issue: WON American Bible Society liable to pay sales tax for the distribution and sale of bibles

Ruling: NO
Under Sec. 1 of Ordinance 3000, one of the ordinance in question, person or entity engaged in any of
the business, trades or occupation enumerated under Sec. 3 must obtain a Mayors permit and license
from the City Treasurer. American Bible Societys business is not among those enumerated
However, item 79 of Sec. 3 of the Ordinance provides that all other businesses, trade or occupation
not mentioned, except those upon which the City is not empowered to license or to tax P5.00
Therefore, the necessity of the permit is made to depend upon the power of the City to license or tax
said business, trade or occupation.
2 provisions of law that may have bearing on this case:
a. Chapter 60 of the Revised Administrative Code, the Municipal Board of the City of Manila is
empowered to tax and fix the license fees on retail dealers engaged in the sale of books
b. Sec. 18(o) of RA 409: to tax and fix the license fee on dealers in general merchandise, including
importers and indentors, except those dealers who may be expressly subject to the payment of some
other municipal tax. Further, Dealers in general merchandise shall be classified as (a) wholesale
dealers and (b) retail dealers. For purposes of the tax on retail dealers, general merchandise shall be
classified into four main classes: namely (1) luxury articles, (2) semi-luxury articles, (3)
essential commodities, and (4) miscellaneous articles. A separate license shall be prescribed for each
class but where commodities of different classes are sold in the same establishment, it shall not be
compulsory for the owner to secure more than one license if he pays the higher or highest rate of tax
prescribed by ordinance. Wholesale dealers shall pay the license tax as such, as may be provided by
ordinance
The only difference between the 2 provisions is the limitation as to the amount of tax or license fee
that a retail dealer has to pay per annum
As held in Murdock vs. Pennsylvania, The power to impose a license tax on the exercise of these
freedoms provided for in the Bill of Rights, is indeed as potent as the power of censorship which this
Court has repeatedly struck down. It is not a nominal fee imposed as a regulatory measure to defray
the expenses of policing the activities in question. It is in no way apportioned. It is flat license tax
levied and collected as a condition to the pursuit of activities whose enjoyment is guaranteed by the
constitutional liberties of press and religion and inevitably tends to suppress their exercise. That is
almost uniformly recognized as the inherent vice and evil of this flat license tax.
Further, the case also mentioned that the power to tax the exercise of a privilege is the power to
control or suppress its enjoyment. Those who can tax the exercise of this religious practice can make
its exercise so costly as to deprive it of the resources necessary for its maintenance. Those who can tax
the privilege of engaging in this form of missionary evangelism can close all its doors to all those who
do not have a full purse
Under Sec. 27(e) of Commonwealth Act No. 466 or the National Internal Revenue
Code,Corporations or associations organized and operated exclusively for religious, charitable, . . . or
educational purposes, . . .: Provided, however, That the income of whatever kind and character from
any of its properties, real or personal, or from any activity conducted for profit, regardless of the
disposition made of such income, shall be liable to the tax imposed under this Code shall not be taxed
The price asked for the bibles and other religious pamphlets was in some instances a little bit higher
than the actual cost of the same but this cannot mean that American Bible Society was engaged in the
business or occupation of selling said "merchandise" for profit
Therefore, the Ordinance cannot be applied for in doing so it would impair American Bible Societys
free exercise and enjoyment of its religious profession and worship as well as its rights of dissemination
of religious beliefs.

Wherefore, and on the strength of the foregoing considerations, We hereby reverse the decision
appealed from, sentencing defendant return to plaintiff the sum of P5,891.45 unduly collected
from it



Tolentino vs. Secretary of Finance
By: Dennis D. San Diego
G.R. No. 115455
235 SCRA 630 (1994)
FACTS
RA 7716, otherwise known as the Expanded Value-Added Tax Law, is an act that seeks
to widen the tax base of the existing VAT system and enhance its administration by amending the
National Internal Revenue Code. There are various suits questioning and challenging the
constitutionality of RA 7716 on various grounds.
Tolentino contends that RA 7716 did not originate exclusively from the House of
Representatives but is a mere consolidation of HB. No. 11197 and SB. No. 1630 and it did not
pass three readings on separate days on the Senate thus violating Article VI, Sections 24 and 26(2)
of the Constitution, respectively.
Art. VI, Section 24: All appropriation, revenue or tariff bills, bills authorizing increase of the public
debt, bills of local application, and private bills shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with amendments.
Art. VI, Section 26(2): No bill passed by either House shall become a law unless it has passed
three readings on separate days, and printed copies thereof in its final form have been distributed
to its Members three days before its passage, except when the President certifies to the necessity of
its immediate enactment to meet a public calamity or emergency. Upon the last reading of a bill, no
amendment thereto shall be allowed, and the vote thereon shall be taken immediately thereafter,
and the yeas and nays entered in the Journal.
ISSUE
Whether or not RA 7716 violated Art. VI, Section 24 and Art. VI, Section 26(2) of the Constitution.
HELD
No. The phrase originate exclusively refers to the revenue bill and not to the revenue law. It is
sufficient that the House of Representatives initiated the passage of the bill which may undergo
extensive changes in the Senate.
SB. No. 1630, having been certified as urgent by the President need not meet the requirement not
only of printing but also of reading the bill on separate days.