FACTS
In 1937, the City of Baguio passed Ordinance No. 137, which sought to impose a special assessment against properties of owners within its territorial jurisdiction.
Pursuant to this ordinance, the Treasurer of Baguio demanded from the Apostolic Prefect the sum of P1,019.37. Although the Apostolic Prefect paid the assessment, it did so under protest, arguing that as a religious institution, it has a constitutionally guaranteed right to be exempted from paying for its properties. The imposition of a charge on all property, real and personal, in a prescribed area, is a tax and not an assessment, although the purpose is to make a local improvement on a street or highway.
RULING
The Court ruled in favor of the Treasurer of the City.
To draw the distinction between taxes and special contributions, the Court quoted Judge Cooley: "While the word 'tax' in its broad meaning, includes both general taxes and special assessments, and in a general sense a tax is an assessment, and an assessment is a tax, yet there is a recognized distinction between them in that assessment is confined to local impositions upon property for the payment of the cost of public improvements in its immediate vicinity and levied with reference to special benefits to the property assessed."
The imposition of a charge on all property, real and personal, in a prescribed area, is a tax and not an assessment, although the purpose is to make a local improvement on a street or highway. In the case at bar, the Apostolic Prefect cannot claim exemption because the assessment is not taxation per se but rather a system for the benefits of the inhabitants of the city.
