De Lima vs. City of Manila

 G.R. No. 222886, October 17, 2018

HONORABLE LEILA M. DE LIMA, IN HER CAPACITY AS SECRETARY OF JUSTICE, Petitioner, v. CITY OF MANILA, REPRESENTED BY MAYOR JOSEPH EJERCITO ESTRADA, Respondent.

FACTS:

City Council of Manila passed Ordinance No. 8331, entitled "An Ordinance Enacting the 2013 Omnibus Revenue Code of the City of Manila."

Operators of retail businesses filed an Appeal before Secretary of Justice Leila M. De Lima, petitioner herein. They claimed that Section 104 of Ordinance No. 8331, which imposed percentage tax on gross sales of retailers from 1% to 3%, is unconstitutional for being violative of Section 5, Article X of the Constitution, and illegal for being excessive and contrary to limitations set forth under Sections 130, 186, and 191 of the Local Government Code of 1991 (LGC).

Petitioner issued a Resolution declaring Section 104 of Ordinance No. 8331 void for being contrary to Section 191 of the LGC.

Respondent filed a Motion for Reconsideration of the petitioner's Resolution.

Without awaiting for the petitioner's action on its Motion, the respondent filed a Petition for Review Ad Cautelam before the (RTC) of Manila on May 15, 2014. In its petition, the respondent sought to annul the petitioner's Resolution dated April 7, 2014 for having been issued with grave abuse of discretion and to declare Section 104 of Ordinance No. 8331 as valid and enforceable.

On May 19, 2014, the RTC issued an Order treating the Petition for Review Ad Cautelam as a petition for certiorari under Rule 65 of the Rules of Court.

After the parties filed their respective Comment and Reply, the RTC rendered its Decision on July 25, 2014 dismissing the petition in this wise for lack of jurisdiction. The Motion for Reconsideration was likewise denied.

The respondent elevated the matter to the CA via certiorari on appeal. CA  SET ASIDE the case and REMANDED the same to the RTC Manila to conduct further proceedings. Motion for Reconsideration  were DENIED for lack of merit. 

Hence, the instant petition for review on certiorari.

ISSUE:

Whether petition for certiorari under Rule 65 before the RTC is the proper remedy to question a decision of the Secretary of Justice on the constitutionality of a tax ordinance.

RULING:

No. Petition for certiorari under Rule 65 before the RTC is not the proper remedy to question a decision of the Secretary of Justice on the constitutionality of a tax ordinance.

In the instant controversy, the evaluation of the appeal lodged by the retail business operators involves an exercise of quasi-judicial power by the Secretary of Justice. In deciding the same, the Secretary of Justice must ascertain the existence of factual circumstances specifically, whether Section 104 of Ordinance No. 8331 was passed in accordance with the procedure and the limitations set forth by the LGC. And from there make a conclusion as to the validity and applicability of the same to the retail business operators of Manila. 

Considering that the subject matter of review is an exercise of quasi-judicial power by the Secretary of Justice, the latter's decision on the legality or constitutionality of tax ordinances and revenue measures under Section 187 of the LGC is a proper subject of appeal through a petition for review under Rule 43.

In the same light, while it is true that when decision is tainted with grave abuse of discretion amounting to lack or excess of jurisdiction, the case may be elevated to the courts through a special civil action for certiorari under Rule 65, to correct errors of jurisdiction. The availability of a special civil action for certiorari under Rule 65 as a remedy will only be justified in this case if the proper venue was resorted to. Thus, in the foregoing actions the proper venue is with the CA and not the RTC in accordance with Section 4, Rule 65 of the Rules of Court. 

Simply, the CA is the court vested with exclusive original jurisdiction to entertain a petition for certiorari under Rule 65 of the Rules of Court questioning the acts of quasi-judicial agencies. The RTC was then correct in dismissing the petition for review ad cautelam, which by its nature is a petition for certiorari, for having been filed before the wrong court. The CA, on the other hand, erred in ordering the case to be remanded to the RTC as it has the power to take cognizance of the same.