Title: National Development Co vs Cebu City and Augusto Pacis G.R. No. 51593 November 5, 1992 Bellosillo, J.

: Facts: National Development Company (NDC) is a GOCC authorized to engage in commercial, industrial, mining, agricultural and other enterprises necessary or contributory to economic development or important to public interest. It also operates subsidiary corporations one of which is National Warehousing Corporation (NWC). On August 10, 1939, the President issued Proclamation No. 430 reserving Block no. 4, Reclamation Area No. 4, of Cebu City for warehousing purposes under the administration of NWC. Subsequently, in 1940, a warehouse with a floor area of 1,940 square meters more or less, was constructed thereon.In 1947, EO 93 dissolved NWC with NDC taking over its assets and functions. In 1948, Cebu City assessed and collected from NDC real estate taxes on the land and the warehouse thereon. By the first quarter of 1970, a total of P100,316.31 was paid by NDC 11 of which only P3,895.06 was under protest. NDC asked for a full refund contending that the land and the warehouse belonged to the Republic and therefore exempt from taxation. The CFI ordered Cebu City to refund to NDC the real estate taxes paid by it.

Issue: 1. Whether or not the land is exempted from tax. 2. Whether or not the warehouse is exempted from tax.

Held: The SC finds that National Development Company (NDC) is exempt from real estate tax on the reserved land but liable for the warehouse erected thereon. The land The Republic, like any individual, may form a corporation with personality and existence distinct from its own. The separate personality allows a GOCC to hold and possess properties in its own name and, thus, permit greater independence and flexibility in its operations. It may, therefore, be stated that tax exemption of property owned by the Republic of the Philippines "refers to properties owned by the Government and by its agencies which do not have separate and distinct personalities (unincorporated entities). To come within the ambit of the exemption provided in Art. 3, par. (a), of the Assessment Law, it is important to establish that the property is owned by the government or its unincorporated agency, and once government ownership is determined, the nature of the use of the property, whether for proprietary or sovereign purposes. The land remains absolute property of the government." The government "does not part with its title by reserving them (lands), but simply gives notice to all the world that it desires them for a certain purpose." As its title remains with the Republic, the reserved land is clearly recovered by the tax exemption provision. The warehouse As regards the warehouse constructed on a public reservation, a different rule should apply because "[t]he exemption of public property from taxation does not extend to improvements on the public lands made by pre-emptioners, homesteaders and other claimants, or occupants, at their own expense, and these are taxable by the state . . ." Consequently, the warehouse constructed on the reserved land by NWC (now under administration by NDC), indeed, should properly be assessed real estate tax as such improvement does not appear to belong to the Republic.