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MIAA vs.

CA 495 SCRA 192 July 20, 2006 FACTS: Petitioner Manila International Airport Authority (MIAA) operates the Ninoy Aquino International Airport (NAIA) Complex in Parañaque City under Executive Order No !"#$ other%ise &no%n as the Revised Charter of the Manila International Airport Authority ('MIAA Charter() Executive Order No !"# %as issued on )* +uly *!,# -y then President .erdinand E Marcos /u-sequently$ Executive Order Nos !"! and )!, amended the MIAA Charter As operator o0 the international airport$ MIAA administers the land$ improvements and equipment %ithin the NAIA Complex 1he MIAA Charter trans0erred to MIAA approximately 2"" hectares o0 land$ includin3 the run%ays and -uildin3s ('Airport 4ands and 5uildin3s() then under the 5ureau o0 Air 1ransportation In )""*$ the Parañaque city 3overnment issued notices o0 levy and %arrants o0 levy on MIAA6s Airport 4ands and 5uildin3s 0or its 0ailure to pay real estate taxes plus penalties amountin3 to Php2)7 8 million 0or the taxa-le years *!!) to )""* 1he city 3overnment then put the su-9ect properties up 0or sale at a pu-lic auction 1hus$ MIAA -rou3ht a case 0or prohi-ition to the Court o0 Appeals a3ainst the City o0 Parañaque 1he CA$ ho%ever$ dismissed the petition$ promptin3 MIAA to 0ile a petition in the /C ISSUE: :hether the Airport 4ands and 5uildin3s o0 MIAA are exempt 0rom real estate tax under existin3 la%s I0 so exempt$ then the real estate tax assessments issued -y the City o0 Parañaque$ and all proceedin3s ta&en pursuant to such assessments$ are void HELD: ;es MIAA6s Airport 4ands and 5uildin3s are exempt 0rom real estate tax imposed -y local 3overnments First$ MIAA is not a 3overnment<o%ned or controlled corporation -ut an i s!"u#$ !%li!y o0 the National =overnment and thus exempt 0rom local taxation Second, the real properties o0 MIAA are &' $( )y !*$ R$+u)li, o0 the Philippines and thus exempt 0rom real estate tax 1. MIAA is -&! % .&v$" #$ !/0' $( &" C& !"&ll$( C&"+&"%!i& 1here is no dispute that a 3overnment<o%ned or controlled corporation is not exempt 0rom real estate tax >o%ever$ MIAA is &! a 3overnment<o%ned or controlled corporation /ection )(*#) o0 the Introductory Provisions o0 the Administrative Code o0 *!,? de0ines a 3overnment<o%ned or controlled corporation as 0ollo%s@

#u i.is$ &5 !*$ !%4i 1 +&'$"s &5 +"&vi .3 (ivi($( i !& s*%"$s MIAA has no stoc&holders or votin3 shares MIAA is also not a non<stoc& corporation -ecause it has no mem-ers /ince MIAA is neither a stoc& nor a non<stoc& corporation$ MIAA does not quali0y as a 3overnment<o%ned or controlled corporation MIAA is a 1&v$" #$ ! i s!"u#$ !%li!y vested %ith corporate po%ers to per0orm e00iciently its 3overnmental 0unctions A 3overnment i s!"u#$ !%li!y li&e MIAA 0alls under /ection *##(o) o0 the 4ocal =overnment Code$ %hich states@ /EC *## Common #imitations on the Ta$in% &o"ers of #ocal Government 'nits. . D&#i i& 1he Airport 4ands and 5uildin3s o0 MIAA are property o0 +u)li. %. U l$ss &!*$"'is$ +"&vi($( *$"$i $ !*$ $4$".%+i!%l s!&.i!i$s./EC ). Ai"+&"! L% (s % ( 6uil(i 1s %"$ &5 7u)li. &5 !*$ 7*ili++i $s 1he Civil Code provides@ AC1IC4E 7*! o%nership Property is either o0 pu-lic dominion or o0 private AC1IC4E 7)" T*$ 5&ll&'i 1 !*i 1s %"$ +"&+$"!y &5 +u)li.i$s % ( i s!"u#$ !%li!i$s and local 3overnment units (Emphasis and underscorin3 supplied) Bxx 2. i!s %1$ . (&#i i& % ( !*$"$5&"$ &' $( )y !*$ S!%!$ &" !*$ R$+u)li. 5$$s &" .3 &" & /s!&. General Terms Defined. % ( )%"% 1%ys s*%ll &! $4!$ ( !& !*$ l$vy &5 !*$ 5&ll&'i 1@ xxxx (o) T%4$s.3 . (&#i i& @ .3 .&v$" #$ !. Ai"+&"! L% (s % ( 6uil(i 1s &5 MIAA %"$ 0' $( )y !*$ R$+u)li.&"+&"%!i& ( MIAA is not or3aniAed as a stoc& or non<stoc& corporation MIAA is not a stoc& corporation -ecause it has & .i+%li!i$s.3 &" & / s!&. xxxx (*#) Government!o"ned or controlled corporation re0ers to any a3ency &"1% i2$( %s % s!&.&"+&"%!i& $ vested %ith 0unctions relatin3 to pu-lic needs %hether 3overnmental or proprietary in nature$ and o%ned -y the =overnment directly or throu3h its instrumentalities either %holly$ or$ %here applica-le as in the case o0 stoc& corporations$ to the extent o0 at least 0i0ty<one (8*) percent o0 its capital stoc&@ x x x (Emphasis supplied) A 3overnment<o%ned or controlled corporation must -e '&"1% i2$( %s % s!&.*%"1$s &5 % y 3i ( & !*$ -%!i& %l .$s.

* %s roads$ canals$ rivers$ torrents$ +&"!s and -rid3es . "iv$"s.(*) T*&s$ i !$ ($( 5&" +u)li. &5 !*$ 7*ili++i $s or any o0 its political su-divisions $4. !& % !%4%)l$ +$"s& : x x x (Emphasis supplied) 1his exemption should -e read in relation %ith /ection *##(o) o0 the same Code$ %hich prohi-its local 3overnments 0rom imposin3 'GtHaxes$ 0ees or char3es o0 any &ind on the National =overnment$ its a3encies and i s!"u#$ !%li!i$s x x x ( 1he real properties o%ned -y the Cepu-lic are titled either in the name o0 the Cepu-lic itsel0 or in the name o0 a3encies or instrumentalities o0 the National =overnment 1he Administrative Code allo%s real property o%ned -y the Cepu-lic to -e titled in the name o0 a3encies or instrumentalities o0 the national 3overnment /uch real properties remain o%ned -y the Cepu-lic and continue to -e exempt 0rom real estate tax . -an&s$ shores$ roadsteads$ and others o0 similar characterD ()) 1hose %hich -elon3 to the /tate$ %ithout -ein3 0or pu-lic use$ and are intended 0or some pu-lic service or 0or the development o0 the national %ealth (Emphasis supplied) No one can dispute that properties o0 pu-lic dominion mentioned in Article 7)" o0 the Civil Code$ li&e '"&%(s. !"%v$l % ( !"% s+&"!%!i& $. 5&" i !$" %!i& %l % ( (&#$s!i.lu($s s$%+&"!s % ( %i"+&"!s.& s!"u. R$%l 7"&+$"!y 0' $( )y !*$ R$+u)li. 5&" . +&"!s % ( )"i(1$s .!$( )y !*$ S!%!$$( are o%ned -y the /tate T*$ !$"# 8+&"!s9 i . us$.% %ls.& si($"%!i& &" &!*$"'is$.i%l us$ !*$"$&5 *%s )$$ 1"% !$(.$+! '*$ !*$ )$ $5i. su. 1he MIAA Airport 4ands and 5uildin3s constitute a '+&"!( constructed -y the /tate Ender Article 7)" o0 the Civil Code$ the MIAA Airport 4ands and 5uildin3s are properties o0 pu-lic dominion and thus o%ned -y the /tate or the Cepu-lic o0 the Philippines 1he Airport 4ands and 5uildin3s are devoted to pu-lic use -ecause they are us$( )y !*$ +u)li.& s!"u. !&""$ !s.!$( )y !*$ S!%!$. . ($emptions from Real &roperty Ta$ F T*$ 5&ll&'i 1 %"$ $4$#+!$( 5"&# +%y#$ ! &5 !*$ "$%l +"&+$"!y !%4@ (a) R$%l +"&+$"!y &' $( )y !*$ R$+u)li. is -&! T%4%)l$ /ection )#7(a) o0 the 4ocal =overnment Code exempts 0rom real estate tax any 'real property o%ned -y the Cepu-lic o0 the Philippines ( /ection )#7(a) provides@ /EC )#7.