Cuunjieng v Patstone (1922)

Cuunjieng v Patstone
GR No. L-16254, February 21, 1922

FACTS:
Cuunjieng desired to erect a warehouse in Azcarraga street but was denied a building permit until he shall have made
provision for the construction of an arcade over the sidewalk in front of the building and until he shall have further complied with Section 1 of Ordinance 301 of the City of Manila, i.e. payment of 1⁄2 of the assessed value of the city land. Cuunjieng filed a petition for a writ of mandamus to compel the city engineer to issue the permit.

ISSUE:
Whether under the charter, the City of Manila may, under the guise of a license fee and as a prerequisite for the issuance of a building permit, exact the payment of 1⁄2 of the assessed value of the portion of the sidewalk covered by the arcade 

RULING:
No. The allowable amount of license fee or tax depends so much on the special circumstance of each particular case.
Adjudications, however, appear to recognize 3 classes of licenses:

1. (1)  licenses for regulation of useful occupations or enterprises;
   
2. (2)  licenses for the regulation of non-useful occupations or enterprises;
   
3. (3)  licenses for revenue only.
   

This should be taken into consideration in determining the reasonableness of the license fee. Herein, imposing a fee equal to 1⁄2 of the assessed value of the portion of the sidewalk covered by the arcade, the municipal board exceeded its powers. The construction of buildings is a useful enterprise and the amount of the license fee should therefore be limited to the cost of licensing, regulating, and surveillance. As it does not appear such cost would materially increase through the construction of the arcade, the excess fee is clearly imposed for the purpose of revenue. There is nothing in the charter of the city indicating legislative intent to confer to the municipal board to impose a license tax for revenue on the construction of buildings.
Thus, the license fee prescribed is illegal.