MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner, vs.

COURT OF APPEALS, CITY OF PARAAQUE, CITY MAYOR OF PARAAQUE, SANGGUNIANG PANGLUNGSOD NG PARAAQUE, CITY ASSESSOR OF PARAAQUE, and CITY TREASURER OF PARAAQUE, respondents G.R. No. 155650, !"# $0, $006 Facts: MIAA received Final Notices of Real Estate Tax Delinquency from t e !ity of "ara#aque for t e taxa$le years %&&' to '((%. MIAA)s real estate tax delinquency *as estimated at "+', million. T e !ity of "ara#aque, t rou- its !ity Treasurer, issued notices of levy and *arrants of levy on t e Airport .ands and /uildin-s. T e Mayor of t e !ity of "ara#aque t reatened to sell at pu$lic auction t e Airport .ands and /uildin-s s ould MIAA fail to pay t e real estate tax delinquency. MIAA filed *it t e !ourt of Appeals an ori-inal petition for pro i$ition and in0unction, *it prayer for preliminary in0unction or temporary restrainin- order. T e petition sou- t to restrain t e !ity of "ara#aque from imposin- real estate tax on, levyin- a-ainst, and auctionin- for pu$lic sale t e Airport .ands and /uildin-s. "aranaque)s !ontention1 2ection %&3 of t e .ocal 4overnment !ode expressly *it dre* t e tax exemption privile-es of 5-overnment6o*ned and6controlled corporations7 upon t e effectivity of t e .ocal 4overnment !ode. Respondents also ar-ue t at a $asic rule of statutory construction is t at t e express mention of one person, t in-, or act excludes all ot ers. An international airport is not amon- t e exceptions mentioned in 2ection %&3 of t e .ocal 4overnment !ode. T us, respondents assert t at MIAA cannot claim t at t e Airport .ands and /uildin-s are exempt from real estate tax. MIAA)s contention1 Airport .ands and /uildin-s are o*ned $y t e Repu$lic. T e -overnment cannot tax itself. T e reason for tax exemption of pu$lic property is t at its taxation *ould not inure to any pu$lic advanta-e, since in suc a case t e tax de$tor is also t e tax creditor. Issue: 89N Airport .ands and /uildin-s of MIAA are exempt from real estate tax under existin- la*s: ;es. Er-o, t e real estate tax assessments issued $y t e !ity of "ara#aque, and all proceedin-s ta<en pursuant to suc assessments, are void. Ruling: MIAA is Not a 4overnment69*ned or !ontrolled !orporation MIAA is not a -overnment6o*ned or controlled corporation $ut an instrumentality of t e National 4overnment and t us exempt from local taxation. MIAA is not a stoc< corporation $ecause it as no capital stoc< divided into s ares. MIAA as no stoc< olders or votin- s ares. MIAA is also not a non6stoc< corporation $ecause it as no mem$ers. A non6stoc< corporation must ave mem$ers. MIAA is a -overnment instrumentality vested *it corporate po*ers to perform efficiently its -overnmental functions. MIAA is li<e any ot er -overnment instrumentality, t e only difference is t at MIAA is vested *it corporate po*ers. 8 en t e la* vests in a -overnment instrumentality corporate po*ers, t e instrumentality does not $ecome a corporation. =nless t e -overnment instrumentality is or-ani>ed as a stoc< or non6 stoc< corporation, it remains a -overnment instrumentality exercisin- not only -overnmental $ut also corporate po*ers. T us, MIAA exercises t e -overnmental po*ers of eminent domain, police aut ority and t e levyin- of fees and c ar-es. At t e same time, MIAA exercises 5all t e po*ers of a corporation under t e !orporation .a*, insofar as t ese po*ers are not inconsistent *it t e provisions of t is Executive 9rder.7 Airport .ands and /uildin-s of MIAA are 9*ned $y t e Repu$lic a. Airport .ands and /uildin-s are of "u$lic Dominion

T e Airport .ands and /uildin-s of MIAA are property of pu$lic dominion and t erefore o*ned $y t e 2tate or t e Repu$lic of t e " ilippines. No one can dispute t at properties of pu$lic dominion mentioned in Article ,'( of t e !ivil !ode, li<e 5roads, canals, rivers, torrents, ports and $rid-es constructed $y t e 2tate,7 are o*ned $y t e 2tate. T e term 5ports7 includes seaports and airports. T e MIAA Airport .ands and /uildin-s constitute a 5port7 constructed $y t e 2tate. =nder Article ,'( of t e !ivil !ode, t e MIAA Airport .ands and /uildin-s are properties of pu$lic dominion and t us o*ned $y t e 2tate or t e Repu$lic of t e " ilippines. T e Airport .ands and /uildin-s are devoted to pu$lic use $ecause t ey are used $y t e pu$lic for international and domestic travel and transportation. T e fact t at t e MIAA collects terminal fees and ot er c ar-es from t e pu$lic does not remove t e c aracter of t e Airport .ands and /uildin-s as properties for pu$lic use. T e c ar-in- of fees to t e pu$lic does not determine t e c aracter of t e property * et er it is of pu$lic dominion or not. Article ,'( of t e !ivil !ode defines property of pu$lic dominion as one 5intended for pu$lic use.7 T e terminal fees MIAA c ar-es to passen-ers, as *ell as t e landinfees MIAA c ar-es to airlines, constitute t e $ul< of t e income t at maintains t e operations of MIAA. T e collection of suc fees does not c an-e t e c aracter of MIAA as an airport for pu$lic use. 2uc fees are often termed user)s tax. T is means taxin- t ose amon- t e pu$lic * o actually use a pu$lic facility instead of taxin- all t e pu$lic includin- t ose * o never use t e particular pu$lic facility. $. Airport .ands and /uildin-s are 9utside t e !ommerce of Man

T e !ourt as also ruled t at property of pu$lic dominion, $ein- outside t e commerce of man, cannot $e t e su$0ect of an auction sale. "roperties of pu$lic dominion, $ein- for pu$lic use, are not su$0ect to levy, encum$rance or disposition t rou- pu$lic or private sale. Any encum$rance, levy on execution or auction sale of any property of pu$lic dominion is void for $ein- contrary to pu$lic policy. Essential pu$lic services *ill stop if properties of pu$lic dominion are su$0ect to encum$rances, foreclosures and auction sale. T is *ill appen if t e !ity of "ara#aque can foreclose and compel t e auction sale of t e +((6 ectare run*ay of t e MIAA for non6payment of real estate tax. c. MIAA is a Mere Trustee of t e Repu$lic

MIAA is merely oldin- title to t e Airport .ands and /uildin-s in trust for t e Repu$lic. 2ection ,?, ! apter %', /oo< I of t e Administrative !ode allo*s instrumentalities li<e MIAA to old title to real properties o*ned $y t e Repu$lic. n MIAA)s case, its status as a mere trustee of t e Airport .ands and /uildin-s is clearer $ecause even its executive ead cannot si-n t e deed of conveyance on $e alf of t e Repu$lic. 9nly t e "resident of t e Repu$lic can si-n suc deed of conveyance. d. Transfer to MIAA *as Meant to Implement a Reor-ani>ation

T e transfer of t e Airport .ands and /uildin-s from t e /ureau of Air Transportation to MIAA *as not meant to transfer $eneficial o*ners ip of t ese assets from t e Repu$lic to MIAA. T e purpose *as merely toreor-ani>e a division in t e /ureau of Air Transportation into a separate and autonomous $ody. T e Repu$lic remains t e $eneficial o*ner of t e Airport .ands and /uildin-s. MIAA itself is o*ned solely $y t e Repu$lic. No party claims any o*ners ip ri- ts over MIAA)s assets adverse to t e Repu$lic. e. Real "roperty 9*ned $y t e Repu$lic is Not Taxa$le

2ec '3, of t e .4! provides t at real property o*ned $y t e Repu$lic of t e " ilippines or any of its political su$divisions except * en t e $eneficial use t ereof as $een -ranted, for consideration or ot er*ise, to a taxa$le person follo*in- are exempted from payment of t e real property tax. @o*ever, portions of t e Airport .ands and /uildin-s t at MIAA leases to private entities are not exempt from real estate tax. For example, t e land area occupied $y an-ars t at MIAA leases to private corporations is su$0ect to real estate tax.