G.R. No.

152904
CITY ASSESSOR OF CEBU CITY, Petitioner,
- versus -
ASSOCIATION OF BENEVOLA DE CEBU, INC., Respondent.
June 8, 2007

The Facts

Association of Benevola de Cebu, Inc. is a non-stock, non-profit organization

organized under the laws of the Republic of the Philippines and is the owner
of Chong Hua Hospital (CHH) in Cebu City. In the late 1990s, respondent
constructed the CHH Medical Arts Center (CHHMAC) a five-storey building
situated about 100 meters away from CHH used as clinic/room spaces
rented out to physicians accredited by CHH.

On April 17, 1998 Certificate of Occupancy was issued to the center with a
classification of Commercial Clinic. The City Assessor of Cebu City assessed
the CHHMAC building as commercial with a market value of PhP
28,060,520 and an assessed value of PhP 9,821,180 at the assessment level
of 35% for commercial buildings, and not at the 10% special assessment
currently imposed for CHH and its other separate buildingsthe CHHs
Dietary and Records Departments.

The Issue

Whether or not the CHHMAC, for assessment purposes be classified as

commercial or special class real property.

The Ruling

The CHHMAC, with operations being devoted for the benefit of the CHHs
patients, should be accorded the 10% special assessment.

Secs. 215, 216 and 217 of the Local Government Code provide:

SEC. 215. Classes of Real Property for Assessment Purposes.For

purposes of assessment, real property shall be classified as residential,
agricultural, commercial, industrial, mineral, timberland or special.

SEC. 216. Special Classes of Real Property.All lands, buildings, and

other improvements thereon actually, directly and exclusively used for
hospitals, cultural or scientific purposes, and those owned and used by local
water districts, and government-owned or controlled corporations rendering
essential public services in the supply and distribution of water and/or
generation and transmission of electric power shall be classified as special.
 SEC. 217. Actual use of Real Property as basis of Assessment.Real
Property shall be classified, valued and assessed on the basis of its actual
use regardless of where located, whoever owns it, and whoever uses it.

Chong Hua Hospital Medical Arts Center ( CHHMAC) is an integral part of

Chong Hua Hospital.

The doctors and medical specialists holding clinics in CHHMAC are those duly
accredited by CHH, that is, they are consultants of the hospital and the ones
who can treat CHHs patients confined in it. This fact alone takes away
CHHMAC from being categorized as commercial since a tertiary hospital
like CHH is required by law to have a pool of physicians who comprises the
required medical departments in various medical fields as provided under
the Dept. of Health (DOH) Adm. Order No. 68-A and the 1989 Revised Rules
and Regulations governing the registration, licensure and operation of
hospitals in the Philippines. Likewise, fact that they are holding office in a
separate building, does not take away the essence and nature of their
services vis--vis the over-all operation of the hospital and the benefits to the
hospitals patients. Given what the law requires, it is clear that CHHMAC is
an integral part of CHH.

Conversely, it would have been different if CHHMAC was also open for non-
accredited physicians, that is, any medical practitioner, for then respondent
would be running a commercial building for lease only to doctors which
would indeed subject the CHHMAC to the commercial level of 35%
assessment.
 G.R. No. 170577
Anthony Dee, petitioner
- versus -
COMELEC and Matino Boking Morales, respondents
May 9, 2007

The Facts
Morales was elected Mayor Mabalacat
July 1, 1995 June 30, 1998; July 1, 2001 June 30, 2004; July 1, 1998 June
30, 2001, but he served this term as a de facto officer, due to EPC No. 98-
131, that declared his proclamation as mayor void and was executed on
August 6, 2001.
He was also suspended by the Ombudsman regarding an anti-graft case on
January 16, 1999 July15,1999.

On May 6, 2004, COMELEC second division disqualified respondent Morales

and cancelled his certificate of candidacy. March 14, 2005, COMELEC en banc
granted Morales; motion for reconsideration and held that Morales service for
three consecutive terms has been severed due to decision in EPC No, 98-131.

The Issue
Whether or not Morales is qualified for the Mayoralty candidate for the May
2004 elections because his 2nd term was declared void by RTC Branch 57 of
Angeles City of Pampanga.

The Ruling

A proclamation by municipal board of canvassers as the duly elected mayor

coupled by assumption of office and continuous exercise of the functions
thereof from the beginning and end of term, should legally be taken as
service for a full term in contemplation of the three-term rule limit. Whether
as care taker or de facto officer, he exercises the power and enjoys the
pre-requisite of the office which enables him to stay on indefinitely.

A disposition, having been promulgated after the term of the contested office
has expired, is of without practical and legal use and value. Morales
certificate of candidacy should be cancelled, the effect of the cancellation
disqualifies Morales as a candidate in May 2004 election.
Not being a candidate, the votes cast for him should not be counted and
must be considered stray votes.

The Vice-Mayor elect of Mabalacat shall serve the remaining duration of the
term July 1, 2004 until June 30, 2007, as provided in Section 44 of the Local
Government Code. Respondent Morales should be promptly ousted from the
position of Mayor of Mabalacat.

G.R. No. 150301

Philippine Fisheries Development Authority, petitioner
Versus
The Hon, CA, The Hon. RTC, Branch 169, Malabon Metro Manila, The
Municipality of Navotas, Metro Manila, Hon. Florante Barredo, in his
capacity as Municipal Treasurer of Navotas, Metro Manila and Hon.
Norberto Azarcon, in his capacity as Chairman of the Public Auction
Sale Committee of Navotas, Metro Manila, respondents.

October 2, 2007

THE FACTS:
Respondent municipality assessed the real estate taxes allegedly due from
petitioner Philippine Fisheries Development Authority (PFDA) for the period
1981-1990 on properties under its jurisdiction, management and operation
inside the Navotas Fishing Port Complex (NFPC). The assessed tax had
remained unpaid despite the demands made by the municipality which
prompted it, through Municipal Treasurer Barredo, to give notice to petitioner
on October 29, 1990 that the NFPC will be sold at public auction on
November 30, 1990.

PFDA claimed that the NFPC is owned by the Republic of the Philippines
pursuant to P.D. No. 977, PFDA is not a taxable entity. Because of the refusal
to pay of the assessed tax, it was referred to Department of Finance on July
14, 1990 stating that, PFDA has leased its properties to beneficial users. The
municipality should conduct ocular inspection in order to identify the
properties actually leased and the taxable persons enjoying the beneficial
use. DOF instructed the municipality to proceed in publishing the notice of
sale of the NFPC in November 2, 1990 issue of Balita, a local newspaper. On
November 19, 1990, PFDA instituted Civil Case in the RTC of Malabon, Metro
Manila. Asking the RTC to enjoin the auction of the NFPC on the ground that
properties comprising the NFPC are owned by the RP and are exempt from
taxation. Only a small portion of NFPC which had been leased to private
parties may be subject to real property tax which should be paid by the
latter.

The RTC dismissed the case because plaintiff failed to present convincing
evidence to support its claim of realty tax exemption and ownership of the
property by the RP as mandated by Sec. 9 of P.D. No. 464.

On August 11, 1976, the Philippine Fish Marketing Authority (PFMA) was
created as a body corporate by P.D. No. 977. The PFMA was furthermore
extended exemption from the payment of income tax in this tenor:
The authority shall be exempted from the payment of income tax.

On February 8, 1982, P.D. No. 977 was amended by E.O. No. 772. Insofar as
material to the case at bar, the salient features of amendments introduced
by the E.O. are:
a. The creation of the PFDA... to replace the PFMA.

b. The capitalization of the PFDA has included the NFPC.

c. The NFPC has been transferred to the exclusive jurisdiction, control,

administration and supervision of the PFDA.

The fact that the PFDA has up to now no certificate of title to the NFPC nor
has the PFDA declared it for tax purposes is of no consequence. Certificate is
merely an evidence of ownership and not the title itself, while a tax
declaration does not prove nor disprove ownership. What is significant is that
the PFDA has openly declared and represented that it owns, maintains and
operates the NFPC when it leased a portion thereof to the Frabelle Fishing
Corporation on March 13, 1989. The PFDA being the owner of the NFPC
beginning February 8, 1982 is liable for the realty taxes due thereon, its tax
exemption being only from the payment of income tax.

THE ISSUE:
Whether petitioner is liable to pay real property tax.

THE RULING:
Local Government units, pursuant to the fiscal autonomy granted by the
provisions of the Local Government Code, can impose realty taxes on
juridical persons subject to limitations enumerated in Sec 133 of the Code:

Section 133. Common Limitations on the Taxing Power of the Local

Government Units. Unless otherwise provided herein, the exercise of the
taxing powers of provinces, cities, municipalities and barangays shall not
extend to the levy of the following:
 (o) taxes, fees, charges of any kind on the National Government,
its agencies and instrumentalities, and local government units.

Nonetheless, the above exemption does not apply when beneficial use of the
government property has been granted to taxable person. Sec 234(a) of the
Code states that real property owned by the RP or any of its political
subdivisions is exempted from payment of the real property tax except
when the beneficial use thereof has been granted, for consideration or
otherwise, to a taxable person. As a rule, PFDA, being an instrumentality of
the national government, is exempt from real property tax but the exemption
does not extend to the portions of the NFPC that were leased to taxable or
private persons and entities for their beneficial use.

On the basis of the parameters set in the MIA vs CA case, the Autjority
should be classified as an instrumentality of the national government. As
such, it is generally exempt from payment of real property tax, except those
portions which have been leased to private entities. In case the Authority
fails to pay the real property taxes due thereon, said portions cannot be sold
at public auction to satisfy the tax delinquency.