Abra Valley College, Inc. vs.

Aquino
G.R. No. L-39086; June 15, 1988

Facts:

Petitioner is an educational corporation and institution of higher learning.

In 1974, the CFI ordered for the seizure and sale of the subject school property for non-payment of real
estate taxes and penalties.

Private respondent contends that the second floor of the building is being used by the director for
residential purposes and that the ground floor used and rented by Northern Marketing Corporation, a
commercial establishment.

Issue:
Whether or not the lot and building are used exclusively for educational purposes.

Held:
Section 22, paragraph 3, Article VI, of the then 1935 Philippine Constitution, expressly grants
exemption from realty taxes for cemeteries, churches and parsonages or convents appurtenant thereto,
and all lands, buildings, and improvements used exclusively for religious, charitable or educational
purposes.

Moreover, the exemption in favor of property used exclusively for charitable or educational
purposes is 'not limited to property actually indispensable' therefor, but extends to facilities
which are incidental to and reasonably necessary for the accomplishment of said purposes.
However, the use of the school building or lot for commercial purposes is neither contemplated by law,
nor by jurisprudence. In the case at bar, the lease of the first floor of the building to the Northern
Marketing Corporation cannot by any stretch of the imagination be considered incidental to the
purpose of education. The test of exemption from taxation is the use of the property for purposes
mentioned in the Constitution.