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In the case at bench, PRA is not a GOCC because it is neither a stock nor a Manila International Airport Authority vs CA
non-stock corporation. It cannot be considered as a stock corporation GR No. 155650, July 20, 2006, 495 SCRA 591
because although it has a capital stock divided into no par value shares as
provided in Section 74 of P.D. No. 1084, it is not authorized to distribute Facts:
dividends, surplus allotments or profits to stockholders. PRA is a Manila International Airport Authority (MIAA) is the operator of the
government instrumentality vested with corporate powers and performing Ninoy International Airport located at Paranaque City. The Officers of
an essential public service pursuant to Section 2(10) of the Introductory Paranaque City sent notices to MIAA due to real estate tax delinquency.
Provisions of the Administrative Code. Being an incorporated government MIAA then settled some of the amount. When MIAA failed to settle the
instrumentality, it is exempt from payment of real property tax. entire amount, the officers of Paranaque city threatened to levy and subject
Many government instrumentalities are vested with corporate powers but to auction the land and buildings of MIAA, which they did. MIAA sought for
they do not become stock or non-stock corporations, which is a necessary a Temporary Restraining Order from the CA but failed to do so within the 60
condition before an agency or instrumentality is deemed a GOCC. The days reglementary period, so the petition was dismissed. MIAA then sought
fundamental provision above authorizes Congress to create GOCCs through for the TRO with the Supreme Court a day before the public auction, MIAA
was granted with the TRO but unfortunately the TRO was received by the fees, this is for support of its operation and for regulation and does not
Paranaque City officers 3 hours after the public auction. change the character of the land and buildings of MIAA as part of the public
dominion. As part of the public dominion the land and buildings of MIAA are
MIAA claims that although the charter provides that the title of the land and outside the commerce of man. To subject them to levy and public auction is
building are with MIAA still the ownership is with the Republic of the contrary to public policy. Unless the President issues a proclamation
Philippines. MIAA also contends that it is an instrumentality of the withdrawing the airport land and buildings from public use, these properties
government and as such exempted from real estate tax. That the land and remain to be of public dominion and are inalienable. As long as the land and
buildings of MIAA are of public dominion therefore cannot be subjected to buildings are for public use the ownership is with the Republic of the
levy and auction sale. On the other hand, the officers of Paranaque City Philippines.
claim that MIAA is a government owned and controlled corporation
therefore not exempted to real estate tax.
Issues:
Whether or not MIAA is an instrumentality of the government and not a
government owned and controlled corporation and as such exempted from
tax.
Whether or not the land and buildings of MIAA are part of the public
dominion and thus cannot be the subject of levy and auction sale.
Ruling:
Under the Local government code, government owned and
controlled corporations are not exempted from real estate tax. MIAA is not
a government owned and controlled corporation, 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 shares. 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.
Under the civil code, property may either be under public dominion
or private ownership. Those under public dominion are owned by the State
and are utilized for public use, public service and for the development of
national wealth. The ports included in the public dominion pertain either to
seaports or airports. When properties under public dominion cease to be for
public use and service, they form part of the patrimonial property of the
State.
The court held that the land and buildings of MIAA are part of the
public dominion. Since the airport is devoted for public use, for the
domestic and international travel and transportation. Even if MIAA charge