Professional Documents
Culture Documents
CITY OF PARAAQUE
TOPIC: Exemption of government entities,
18 July 2012 Mendoza, J. G.R. No. 191109
agencies, and instrumentalities
SUMMARY : PRA reclaimed lands along Manila Bay, some of which were in Paraaque. The City, treating
PRA as a GOCC (not a government instrumentality) assessed the reclaimed lands for real estate taxes,
declared them delinquent, and auctioned them. The Court held that the PRA is a government entity,
not a GOCC, and it is exempt from paying real estate taxes.
NATURE: Petition for review on certiorari under Rule 45 (pure questions of law)
FACTS:
The Philippine Reclamation Authority (PRA, formerly the PEA) reclaimed several portions of the
foreshore and offshore areas of Manila Bay, some of which were in Paraaque City.
Paraaque City Treasurer Carabeo issued Warrants of Levy on PRAs reclaimed properties (Central
Business Park and Barangay San Dionisio) based on the assessment for delinquent real property
taxes made by the City Assessor Cue for tax years 2001 and 2002.
PRA filed a petition for prohibition with prayer for TRO and/or writ of preliminary injunction (WPI)
against Carabeo before the RTC. TRO was denied.
PRA sent a letter to Carabeo requesting the latter not to proceed with the public auction of the
reclaimed properties. In response, Carabeo replied saying that the public auction could not be
deferred because the RTC had already denied PRAs TRO application.
RTC denied PRAs prayer for the issuance of a WPI for being moot and academic considering that
the auction sale had already been consummated.
PRA filed a Motion for Leave to File and Admit Attached Supplemental Petition which sought to
declare as null and void the assessment for real property taxes, the levy based on the said
assessment, the public auction sale, and the Certificates of Sale.
o RTC dismissed the petition and ruled that the PRA is a GOCC, a taxable entity, and was
therefore not exempt form payment of real property taxes.
PRA ARGUES:
1. PRA is not a GOCC. It is a government instrumentality vested with corporate powers and
performing an essential public service pursuant to the Administrative Code.
2. Reclaimed lands are part of the public domain, owned by the State, thus, exempt from the
payment of real estate taxes. Reclaimed lands retain their inherent potential as areas for public use
or public service.
W/N the subject reclaimed lands are still part of the public domain, hence exempt from the payment
of real estate taxes YES.
Section 2, Article XII of the 1987 Constitution
o All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and
other natural resources are owned by the State
Art. 420 of the Civil Code: The following things are property of public dominion:
1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
2) Those which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth.
Here, the subject lands are reclaimed lands, specifically portions of the foreshore and offshore
areas of Manila Bay. As such, these lands remain public lands and form part of the public domain.
o In Chavez v. PEA, the Court held that foreshore and submerged areas irrefutably belonged
to the public domain and were inalienable unless reclaimed, classified as alienable lands
open to disposition, and further declared no longer needed for public service. The Court
also held that reclaimed lands retained their inherent potential as areas for public use or
public service.
Section 14(1), Chapter 4, Title I, Book III of the Administrative Code of 1987
o The President shall have the power to reserve for settlement or public use, and for specific
public purposes, any of the lands of the public domain, the use of which is not otherwise
directed by law. The reserved land shall thereafter remain subject to the specific public
purpose indicated until otherwise provided by law or proclamation.
o Reclaimed lands such as the subject lands in issue are reserved lands for public use. The y
are properties of public dominion. The ownership of such lands remains with the State
unless they are withdrawn by law or presidential proclamation from public use.
Properties of public dominion are not subject to execution or foreclosure sale. Thus, the
assessment, levy and foreclosure made on the reclaimed lands, as well as the issuances of
certificates of title in favor of the City, are without basis.
RTC decision REVERSED and SET ASIDE. The reclaimed properties are declared EXEMPT from real
estate taxes. The assessments, notices of delinquencies, auction sale, and Certificates of Sale are
all declared VOID.