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Reyes vs. Almanzor: Equitability and Progressability

This case involved landowners whose properties were reassessed, resulting in higher taxes. They argued the reassessments were excessive and unconstitutional given that rental income laws prevented them from raising rents. The court ruled the reassessments violated principles of equity and progressivity by penalizing the landowners after burdening them through rental laws. It ordered a new assessment using the income approach to ensure a fair basis for taxes.

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Gabriel Hernandez
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1K views2 pages

Reyes vs. Almanzor: Equitability and Progressability

This case involved landowners whose properties were reassessed, resulting in higher taxes. They argued the reassessments were excessive and unconstitutional given that rental income laws prevented them from raising rents. The court ruled the reassessments violated principles of equity and progressivity by penalizing the landowners after burdening them through rental laws. It ordered a new assessment using the income approach to ensure a fair basis for taxes.

Uploaded by

Gabriel Hernandez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Reyes vs.

Almanzor
   Equitability and Progressability
G.R. No. Ponente  Date 
L-49839-46 PARAS, J. 17 February 1998
Petitioners Respondents
JOSE B.L. REYES PEDRO ALMANZOR, VICENTE ABAD SANTOS, JOSE ROÑO, in
& EDMUNDO their capacities as appointed and Acting Members of the
REYES CENTRAL BOARD OF ASSESSMENT APPEALS; TERESITA H.
NOBLEJAS, ROMULO M. DEL ROSARIO, RAUL C. FLORES, in
their capacities as appointed and Acting Members of the BOARD
OF ASSESSMENT APPEALS of Manila; and NICOLAS CATIIL in his
capacity as City Assessor of Manila, respondents.

DOCTRINE: Under Art. VIII, Sec. 17 (1) of the 1973 Constitution, then enforced, the rule of
taxation must not only be uniform, but must also be equitable and progressive. Taxation is said to
be equitable when its burden falls on those better able to pay. Taxation is progressive when its rate
goes up depending on the resources of the person affected

I. Facts of the case 

 J.B.L. Reyes, Edmundo and Milagros Reyes are owners of parcels of land situated in Manila,
which are leased & entirely occupied by tenants, as dwelling sites who paid monthly rentals
not exceeding Php 300 on July 1971.
 On July 14, 1971, RA No. 6359 was enacted, it prohibited a year from its effectivity, an
increase in monthly rentals of dwelling units/of lands on which another's dwelling is located,
where such rentals do not exceed P300.00 a month but allowing an increase in rent by not
more than 10% thereafter.
 The Act also suspended paragraph (1) of Article 1673 (ejectment of lessees) of the Civil
Code for two years from its effectivity. On October 12, 1972, PD No. 20 amended R.A. No.
6359, the latter effectively suspended the operation of Art. 1673 of the NCC indefinitely.
Thus the Reyeses, were precluded from raising the rentals and from ejecting the tenants.
 In 1973, the City Assessor of Manila re-classified and reassessed the value of the subject
properties based on the schedule of market values duly reviewed by the Finance Secretary.
The revision, entailed an increase in the corresponding tax rates prompting the petitioners to
file a Memorandum of Disagreement with the Board of Tax Assessment Appeals.
 They averred that the reassessments made were "excessive, unwarranted, inequitable,
confiscatory and unconstitutional" considering that the taxes imposed upon them greatly
exceeded the annual income derived from their properties. They argued that the income
approach should have been used in determining the land values instead of the comparable
sales approach which the City Assessor used.
 The Board of Tax Assessment Appeals, however, considered the assessments valid. Thus
the Reyeses appealed to the Central Board of Assessment Appeals. Who upheld the
decision of the former with modification. The Reyeses filed a Motion for Reconsideration, but
it was denied, hence the present recourse to the Court.

II. Issue/s

Whether or not the values assigned to their properties of the petitioners as revised and
increased are arbitrarily excessive, unwarranted, inequitable, confiscatory and
unconstitutional?

III. Ratio/Legal Basis

● YES, the values assigned to their properties of the petitioners as revised and increased are
arbitrarily excessive, unwarranted, inequitable, confiscatory and unconstitutional.
● Taxing power is the authority to make a reasonable and natural classification for purposes of
taxation but the government's act must not be prompted by a spirit of hostility, or at the very
least discrimination that finds no support in reason. It suffices then that the laws operate
equally and uniformly on all persons under similar circumstances or that all persons must be
treated in the same manner, the conditions not being different both in the privileges
conferred and the liabilities imposed 

● UAnder the Real Property Tax Code (P.D. 464 as amended), it is declared that the first
Fundamental Principle to guide the appraisal and assessment of real property for taxation
purposes is that the property must be "appraised at its current and fair market value."
● Petitioners who are burdened by the government by its Rental Freezing Laws (then R.A. No.
6359 and P.D. 20) under the principle of social justice should not now be penalized by the
same government by the imposition of excessive taxes petitioners can ill afford and
eventually result in the forfeiture of their properties.

IV. Disposition 

PREMISES CONSIDERED, (a) the petition is GRANTED; (b) the assailed decisions of
public respondents are REVERSED and SET ASIDE; and (e) the respondent Board of
Assessment Appeals of Manila and the City Assessor of Manila are ordered to make a
new assessment by the income approach method to guarantee a fairer and more
realistic basis of computation

V. Notes

 Collection of taxes should be made in accordance with law as any arbitrariness


will negate the very reason for government itself.—Verily, taxes are the lifeblood
of the government and so should be collected without unnecessary hindrance.
However, such collection should be made in accordance with law as any
arbitrariness will negate the very reason for government itself. It is therefore
necessary to reconcile the apparently conflicting interests of the authorities and
the taxpayers so that the real purpose of taxations, which is the promotion of the
common good, may be achieved (Commissioner of Internal Revenue v. Algue,
Inc., et al., 158 SCRA 9 [1988]). Consequently, it stands to reason that
petitioners who are burdened by the government by its Rental Freezing Laws
(then R.A. No. 6359 and P.D. 20) under the principle of social justice should not
now be penalized by the same government by the imposition of excessive taxes
petitioners can ill afford and eventually result in the forfeiture of their properties
 The power to tax is the strongest of all the powers of the government .—The
power to tax “is an attribute of sovereignty”. In fact, it is the strongest of all the
powers of government. But for all its plenitude, the power to tax is not unconfined
as there are restrictions. Adversely effecting as it does property rights, both the
due process and equal protection clauses of the Constitution may properly be
invoked to invalidate in appropriate cases a revenue measure. If it were
otherwise, there would be truth to the 1903 dictum of Chief Justice Marshall that
“the power to tax involves the power to destroy.” The web or unreality spun from
Marshall’s famous dictum was brushed away by one stroke of Mr. Justice
Holmes’ pen, thus: “The power to tax is not the power to destroy while this Court
sits.” “So it is in the Philippines.” (Sison, Jr. v. Ancheta, 130 SCRA 655 [1984];
Obillos, Jr. v. Commissioner of Internal Revenue, 139 SCRA 439 [1985]).

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