Lung Center of the Philippines

vs

Quezon City

FACTS:

Petitioner, Lung Center of the Philippines, is a non-stock and non-profit entity

established by virtue of PD 1823. The petitioner, seeks exemption from real property
taxes when the City Assessor issued Tax Declarations for the land and hospital
building. Petitioner predicated on its claim that its a charitable institution. The
request was denied, and a petition hereafter filed before the Local Board of
Assessment Appeals of Quezon City (QC-LBAA) for the reversal of the resolution of
the City Assessor.

Petitioner alleged that as a charitable institution, is exempted from real

property taxes under Sec. 28 (3) of Art. 6 of the Constitution. QC-LBAA dismissed
the petition and the decision was affirmed on appeal by the Central Board of
Assessment Appeals of QC. The Court of Appeals affirmed the judgment of CBAA.

ISSUE:

W/N Lung Center of the PH is a charitable institution within the context of

our Constitution, and therefore, exempt from real property tax

RULING:

No. Lung Center is not exempted from tax. While Lung Center is a charitable
institution, however, under the Constitution, in order to be entitled to exemption
from tax, there must be clear and unequivocal proof that (1) It is a charitable
institution AND (2) its real properties are ACTUALLY, DIRECTLY, and EXCLUSIVELY
used for charitable purposes.

While portions of the hospitals are used for treatment of patients and
dispensation of medical services to them, whether paying or non-paying, other
portions thereof are being leased to private individuals and enterprises.

If real property is used for one or more commercial purposes, it is not

exclusively used for the exempted purposes but is subject to taxation.