MANILA INTERNATIONAL AIRPORT AUTHORITY VS COURT OF APPEALS, G.R. No.

155650, JULY 20,

2006

FACTS:
Manila International Airport Authority (MIAA) is the operator of the Ninoy Aquino International
Airport (NAIA) located in Parañaque City. As operator, MIAA administers the land, improvements and
equipment within the NAIA Complex. The MIAA charter transferred to MIAA approximately 600 hectares
of land, including the runways and buildings then under the Bureau of Air Transportation. The MIAA
charter provides that no portion of the land transferred to MIAA shall be disposed of through sale or any
other mode unless specifically approved by the President of the Philippines.

On March 21, 1997, the Office of the Government Corporate Counsel issued Opinion No. 061,
which states that the local government code of 1991 withdraw the exemption from real estate tax
granted to MIAA under Section 21 of the MIAA charter. Thus, MIAA negotiated with the City of
Parañaque to pay real estate tax. MIAA then paid some of the real estate tax already due.

When MIAA failed to settle the entire amount, the City of Parañaque threatened to levy and
subject to auction the land and building of MIAA, which they did. MIAA sought for a Temporary
Restraining Order from the CA but failed to do so within the 60 days reglementary period, thus, the
petition was dismissed. Meanwhile, the City of Parañaque posted notices of the auction sales. MIAA
then sought for the TRO with the Supreme Court a day before the public auction, which was granted but
unfortunately the TRO was received by the City of Parañaque 3 hours after the public auction.

MIAA claims that although the charter provides that the title of the land and building are with
MIAA, the ownership is with the Republic of the Philippines. MIAA also contends that it is an
instrumentality of the government and such is exempted from real estate tax; that the land and
buildings of MIAA are of public dominion therefore cannot be subjected to levy and auction sale. On the
other hand, the City of Parañaque claims that MIAA is a government owned and controlled corporation
therefore not exempted to real estate tax.

ISSUE/S: (1) Whether or not MIAA is an instrumentality of the government and not a government
owned and controlled corporation.
(2) Whether or not the land and buildings of MIAA are part of the public dominion.

HELD:
(1) The Supreme Court held that MIAA is not a government-owned or controlled corporation under
Section 2(13) of the Introductory Provisions of the Administrative Code, for to become one, MIAA should
either be a stock or non-stock corporation. MIAA is not a stock corporation for its capital is not divided
into share; it is not a non-stock corporation since it has no members.

MIAA is an instrumentality of the government vested with corporate powers and government
functions and performing essential public services pursuant to Section 2(10) of the Introductory
Provision of the Administrative Code. As a government instrumentality, MIAA is not subject to any kind
of tax by local governments under Section 133(o) of the Local Government Code because it is not
subject to “[t]axes, fees or charges of any kind” by local governments.

(2) The Supreme Court held that the Airport Lands and Buildings of MIAA are devoted to public use,
for the domestic and international travel and transportation, and thus are properties of public dominion.
Properties of public dominion are owned by the State or the Republic. Article 420 of the Civil Code
provides:
Art. 420. 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 other 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 national wealth.

The term “ports x x x constructed by the state” includes airports and seaports. The Airport Lands
and Buildings of MIAA are intended for public use, and at the very least intended for public service.
Whether intended for public use or public service, the Airport Lands and Buildings are properties of
public dominion. As properties of public dominion, the Airport Lands and Buildings are owned by the
Republic and thus exempt from real estate tax under Section 234(a) of the Local Government Code. The
Supreme Court has also repeatedly ruled that properties of public dominion are not subject to execution
or foreclosure sale.