View full case

PALMA DEVELOPMENT CORPORATION v. MUNICIPALITY OF MALANGAS

FACTS:

Petitioner Palma Development Corporation is engaged in milling and selling rice and corn to wholesalers in Zamboanga City. It uses the municipal port of Malangas, Zamboanga del Sur as a transshipment point for its goods. The port, as well as the surrounding roads leading to it, belong to and are maintained by the Municipality of Malangas. On January 16, 1994, the municipality passed Municipal Revenue Code No. 09, Series of 1993, which imposed service fees on the use of municipal roads and streets leading to the wharf and for police surveillance on goods and equipment harbored in the premises of the wharf. Petitioner paid the service fees under protest and filed an action for declaratory relief assailing the validity of the municipal ordinance before the RTC. The RTC declared the entire Municipal Revenue Code No. 09 as null and void. The CA, however, held that the local government units already had the power to impose revenue-raising fees under the Local Government Code of 1991 and that Section 5G.01 of the ordinance, which imposed service fees, was valid. However, the CA remanded the case to the trial court as petitioner still needed to adduce evidence to substantiate its allegations that the fees imposed were in the guise of toll fees for the use of municipal roads and service fees for police surveillance. Petitioner raises issues on the remand of the case and the validity of the municipal ordinance under the Local Government Code.

ISSUES:

  1. Whether the provision of the ordinance imposing a service fee for police surveillance on goods is contrary to Section 133(e) of RA No. 7160.

  2. Whether the remand of the case to the trial court for further reception of evidence is necessary.

  3. Whether the service fee for police surveillance on goods harbored on the wharf is a valid imposition under the Local Government Code.

  4. Whether the prohibition on the imposition of taxes, fees, or charges on goods passing through the territorial jurisdiction of local government units applies to the service fee for police surveillance.

  5. Whether Revenue Code No. 09, series of 1993 is valid.

  6. Whether Revenue Code No. 09, series of 1993 violates Republic Act No. 7160.

RULING:

  1. Yes. The imposition of fees on goods carried into and out of, or passing through, the territorial jurisdictions of local government units is prohibited by Section 133(e) of RA No. 7160. Regardless of whether the fees are for police surveillance on goods, any form of imposition on goods passing through the municipality's jurisdiction is clearly prohibited.

  2. No. The remand of the case to the trial court is unnecessary because the facts are already established by the admissions of both parties. The reception of additional evidence is irrelevant to the settlement of the case.

  3. The case should be remanded to the trial court to resolve the factual dispute regarding whether the service fee for police surveillance on goods harbored on the wharf is in the guise of a wharfage. The Court of Appeals noted that municipalities now have the power to impose fees for the use of municipal roads under Section 155 of the Local Government Code.

  4. The service fee for police surveillance, even if it is not considered a wharfage, is still invalid due to the prohibition on the imposition of taxes, fees, or charges on goods passing through the territorial jurisdiction of local government units under Section 133(e) of the Local Government Code. The reception of further evidence to establish this fact would not legalize the imposition of such fee in any way.

  5. Revenue Code No. 09, series of 1993 is declared NULL AND VOID for being violative of Republic Act No. 7160.

PRINCIPLES:

  • Local government units may impose reasonable fees and charges for services rendered under Sections 153 and 155 of RA No. 7160.

  • Imposition of fees on goods passing through the territorial jurisdiction of local government units is prohibited under Section 133(e) of RA No. 7160.

  • Unjust enrichment requires unjust benefit derived at another's expense or damage, and there must be a causal relation between one's enrichment and the other's impoverishment.

  • Remand of a case to the trial court is unnecessary if the facts are already clearly established and additional evidence is irrelevant to the settlement of the case.

  • The rules on unjust enrichment apply to the government, and there is no unjust enrichment when the benefits received resulted from a legal right or entitlement.

  • Local government units may impose reasonable fees and charges for services rendered under Section 153 of the Local Government Code.

  • The Sanggunian may prescribe toll fees or charges for the use of public roads, piers, wharves, waterways, bridges, ferries, or telecommunication systems under Section 155 of the Local Government Code, provided that certain exemptions are observed.

  • Prohibited impositions, such as wharfage, are not allowed under Section 133(e) of the Local Government Code.

  • Judicial admissions made by parties in the pleadings, trial, or other proceedings in the same case are conclusive and require no further proof. They cannot be contradicted unless it is shown that they have been made through palpable mistake or have not been made at all. (Section 4, Rule 129 of the Rules of Court)

  • The court has the power to declare a law or ordinance null and void if it is found to be in violation of the Constitution or any other statute.

  • Laws or ordinances that are inconsistent or in conflict with a higher law, such as the Constitution or other statutes, are considered null and void.