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    3) Republic v. Philippine Rabbit Bus Lines, Inc.

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    Happy Dreams Philippines
    The Court ruled that the acceptance of negotiable certificates of indebtedness by the defendant bus firm to pay registration fees was invalid. A registration fee imposed under a Motor Vehicle Act is not a tax but a fee under the police power. As such, the defendant could not use backpay certificates intended for tax payments to meet its registration fee obligation. The Court further noted a subsequent law explicitly imposing a tax on vehicles, distinguishing it from the registration fee in the Motor Vehicle Act. Therefore, there was no ambiguity that the Motor Vehicle Act required payment of a registration fee rather than a tax.

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    3) Republic v. Philippine Rabbit Bus Lines, Inc.

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    Happy Dreams Philippines
    182 views2 pages
    The Court ruled that the acceptance of negotiable certificates of indebtedness by the defendant bus firm to pay registration fees was invalid. A registration fee imposed under a Motor Vehicle Act is not a tax but a fee under the police power. As such, the defendant could not use backpay certificates intended for tax payments to meet its registration fee obligation. The Court further noted a subsequent law explicitly imposing a tax on vehicles, distinguishing it from the registration fee in the Motor Vehicle Act. Therefore, there was no ambiguity that the Motor Vehicle Act required payment of a registration fee rather than a tax.

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    3) Republic v. Philippine Rabbit Bus Lines, Inc.

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    The Court ruled that the acceptance of negotiable certificates of indebtedness by the defendant bus firm to pay registration fees was invalid. A registration fee imposed under a Motor Vehicle Act is not a tax but a fee under the police power. As such, the defendant could not use backpay certificates intended for tax payments to meet its registration fee obligation. The Court further noted a subsequent law explicitly imposing a tax on vehicles, distinguishing it from the registration fee in the Motor Vehicle Act. Therefore, there was no ambiguity that the Motor Vehicle Act required payment of a registration fee rather than a tax.

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    © All Rights Reserved
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    182 views2 pages

    3) Republic v. Philippine Rabbit Bus Lines, Inc.

    Uploaded by

    Happy Dreams Philippines
    The Court ruled that the acceptance of negotiable certificates of indebtedness by the defendant bus firm to pay registration fees was invalid. A registration fee imposed under a Motor Vehicle Act is not a tax but a fee under the police power. As such, the defendant could not use backpay certificates intended for tax payments to meet its registration fee obligation. The Court further noted a subsequent law explicitly imposing a tax on vehicles, distinguishing it from the registration fee in the Motor Vehicle Act. Therefore, there was no ambiguity that the Motor Vehicle Act required payment of a registration fee rather than a tax.

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    © All Rights Reserved
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    of 2

    Definition of Taxes:

    3) Republic v. Philippine Rabbit Bus Lines, Inc


    FACTS:
    The complaint of plaintiff-appellant Republic of the Philippines alleging that defendant
    appellee, as the registered owner of two hundred thirty eight (238) motor vehicles, paid
    to the Motor Vehicles in Baguio the amount of P78,636.17, corresponding to the second
    installment of registration fees for 1959, not in cash but in the form of negotiable
    certificate of indebtedness, the defendant being merely an assignee and not the
    backpay holder itself. The complaint sought the payment of such amount with
    surcharges plus the legal rate of interest from the filing thereof and a declaration of the
    nullity of the use of such negotiable certificate of indebtedness to satisfy its obligation.
    The answer by defendant-appellee, alleged that what it did was in accordance with law,
    both the Treasurer of the Philippines and the General Auditing Office having signed
    their conformity to such a mode of payment. It sought the dismissal of the complaint.

    In the decision now on appeal, the lower court, after referring to a documentary
    evidence introduced by plaintiff-appellant continued: "From the evidence adduced by
    defendant bus firm, it appears that as early as August 28, 1958, the National Treasurer
    upon whom devolves the function of administering the Back Pay Law in his letter to the
    Chief of the Motor Vehicles Office who in turn quoted and circularized same in his
    Circular No. 5 to draw the attention thereto of all Motor Vehicle Supervisors, Registrars
    and employees . . ., had approved the acceptance of negotiable certificates of
    indebtedness in payment of registration fees of motor vehicles with the view that such
    certificates 'should be accorded with the same confidence by other governmental
    instrumentalities as other evidences of public debt, such as bonds and treasury
    certificates'. Significantly, the Auditor General concurred in the said view of the National
    Treasurer.

    The argument of plaintiff-appellant that only the holders of the backpay certificates
    themselves could apply the same to the payment of motor vehicle registration fees did
    not find favor with the lower court. Thus, "[Plaintiff] Republic urges that defendant bus
    firm being merely an assignee of the negotiable certificates of indebtedness in question,
    it could not use the same in payment of taxes.

    ISSUE/S:

    - Whether or not the acceptance of the negotiable certificates of indebtedness


    tendered by defendant bus firms to and accepted by the Motor Vehicles Office of
    Baguio City and the corresponding issuance of official receipts therefor
    acknowledging such payment by said office is valid and binding on plaintiff
    Republic.
    RULING:

    No. A tax refers to a financial obligation imposed by a state on persons, whether natural
    or juridical, within its jurisdiction, for property owned, income earned, business or
    profession engaged in, or any such activity analogous in character for raising the
    necessary revenues to take care of the responsibilities of government. An often-quoted
    definition is that of Cooley: "Taxes are the enforced proportional contributions from
    persons and property levied by the state by virtue of its sovereignty for the support of
    government and for all public needs."

    As distinguished from other pecuniary burdens, the differentiating factor is that the
    purpose to be subserved is the raising of revenue. A tax then is neither a penalty that
    must be satisfied or a liability arising from contract. Much less can it be confused or
    identified with a license or a fee as a manifestation of an exercise of the police
    power.
    The registration fee which defendant-appellee had to pay was Imposed by Section 8 of
    the Revised Motor Vehicle Law. Its heading speaks of "registration fees." The term is
    repeated four times in the body thereof. Equally so, mention is made of the "fee for
    registration." A subsection starts with a categorical statement "No fees shall be
    charged." The conclusion is difficult to resist therefore that the Motor Vehicle Act
    requires the payment not of a tax but of a registration fee under the police power.
    Hence the inapplicability of the section relied upon by defendant-appellee under the
    Back Pay Law. It is not held liable for a tax but for a registration fee. It therefore
    cannot make use of a backpay certificate to meet such an obligation.

    Any vestige of any doubt as to the correctness of the above conclusion should be
    dissipated by Republic Act No. 5448. A special science fund was thereby created and
    its title expressly sets forth that a tax on privately-owned passenger automobiles,
    motorcycles and scooters was imposed. The rates thereof were provided for in its
    Section 8 which clearly specifies that "additional tax" was to be paid as distinguished
    from the registration fee under the Motor Vehicle Act. There cannot be any clearer
    expression therefore of the legislative will, even on the assumption that the earlier
    legislation could be stretching the point be susceptible of the interpretation that a tax
    rather than a fee was levied. What is thus most apparent is that where the legislative
    body relies on its authority to tax it expressly so states, and where it is enacting a
    regulatory measure, it is equally explicit.

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