Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
CITY OF LAPU-LAPU
FACTS:
Congress under Republic Act No. 6958 to undertake the economical, efficient and effective control,
management and supervision of the Mactan International Airport. Upon its creation, petitioner
enjoyed exemption from realty taxes imposed by the National Government or any of its political
subdivision. However, upon the effectivity of the Local Government Code, the Supreme Court
rendered a decision that the petitioner is no longer exempt from realty estate taxes.
Respondent City issued to petitioner a Statement of Real Estate Tax assessing the lots
comprising the Mactan International Airport which included the airfield, runway, taxi way and the lots
on which these are built. Petitioner contends that these lots, and the lots to which they are built, are
utilized solely and exclusively for public purposes and are exempt from real property
Petitioner filed a petition for Prohibition, TRO, and a writ of preliminary injunction with RTC
Lapu-Lapu which sought to enjoin respondent City from issuing the warrant of levy against
petitioners properties from selling them at public auction for delinquency in realty tax obligations.
Petitioner claimed before the RTC that it had discovered that respondent City did not pass any
ordinance authorizing the collection of real property tax, a tax for the special education fund, and a
penalty interest for its non payment. Petitioner argued that without the corresponding tax ordinances,
respondent City could not impose and collect real property tax, an additional tax for the SEF, and
RTC granted the writ of preliminary which was later on lifted upon motion by the
respondents. The Court of Appeals held that petitioners airport terminal building, airfield, runway,
taxiway, and the lots on which they are situated are not exempt from real estate tax since under the
Local Government Code, enacted pursuant to the constitutional mandate of local autonomy, all
instrumentalities and agencies, are no longer exempt from local taxes even if previously granted an
exemption. The only exemptions from local taxes are those specifically provided under the Code
HELD: NO.
Introductory Provisions of the Administrative Code because it is not organized as a stock or non-
stock corporation. Neither is MIAA a government-owned or controlled corporation under Section 16,
Article XII of the 1987 Constitution because MIAA is not required to meet the test of economic
viability. MIAA is a government instrumentality vested with corporate powers and performing
essential public services pursuant to Section 2(10) of the Introductory Provisions 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. The exception to the exemption
in Section 234(a) does not apply to MIAA because MIAA is not a taxable entity under the Local
Government Code. Such exception applies only if the beneficial use of real property owned by the
Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus
are properties of public dominion. Properties of public dominion are owned by the State or the
Republic. As properties of public dominion owned by the Republic, there is no doubt whatsoever that
the Airport Lands and Buildings are expressly exempt from real estate tax under Section 234(a) of
the Local Government Code. This Court has also repeatedly ruled that properties of public dominion
Therefore, Petitioners properties that are actually, solely and exclusively used for public
purpose, consisting of the airport terminal building, airfield, runway, taxiway and the lots on which
they are situated, are exemp from real property tax imposed by the City of Lapu-Lapu, all the real
property tax assessments, including the additional tax for the special education fund and the penalty
interest are void and the sale in public auction of 27 of petitioners properties and the eventual
forfeiture and purchase of the said properties by respondent City of Lapu-Lapu are likewise null and
void.
BOY SCOUTS OF THE PHILIPPINES VS. COMMISSION ON AUDIT
FACTS:
The Commission on Audit issued COA Resolution No. 99-011 in which the said resolution
state that the BSP was created as a public corporation created under Commonwealth Act No. 111
dated October 31, 1936, and whose functions relate to the fostering of public virtues of citizenship
and patriotism and the general improvement of the moral spirit and fiber of the youth. On August 19,
1999, COA issued Resolution No. 99-011 "Defining the Commission's policy with respect to the audit
of the Boy Scouts of the Philippines" which provides for the conduction of an annual financial audit of
the Boy Scouts of the Philippines and the expression of an opinion on the fairness of their financial
statements. The BSP shall also be classified among the government corporations belonging to the
The BSP sought reconsideration of the COA Resolution in a letter signed by the BSP
National President Jejomar Binay stating that the BSP is not subject to the Commission's jurisdiction
because it is not a unit of the government. Moreover, RA 7278 virtually eliminated the "substantial
government participation" in the National Executive Board and that the BSP is not as a government
instrumentality under the 1987 Administrative Code which provides that instrumentality refers to "any
agency of the National Government, not integrated within the department framework, vested with
special functions or jurisdiction by law. The BSP further claimed that the 1987 Administrative Code
itself, of which the BSP s. NLRC relied on for some terms, defines government-owned and controlled
corporations as agencies organized as stock or non-stock corporations which the BSP, under its
present charter, is not. And finally, they claim that the Government, like in other GOCCs, does not
have funds invested in the BSP. The BSP is not an entity administering special funds. The BSP is
not a unit of the Government, a department which refers to an executive department as created by
law or a bureau which refers to any principal subdivision or unit of any department.
ISSUE: Whether or not the Boy Scouts of the Philippines is a public corporation and is subject to
HELD: Yes.
The Court found that the BSP is a public corporation and its funds are subject to the COAs
audit jurisdiction. The BSP is a public corporation whose functions relate to the fostering of public
virtues of citizenship and patriotism and the general improvement of the moral spirit and fiber of the
youth. Any attempt to classify the BSP as a private corporation would be incomprehensible since no
less than the law which created it had designated it as a public corporation and its statutory mandate
embraces performance of sovereign functions. The manner of creation and the purpose for which
Moreover, there are three classes of juridical persons under Article 44 of the Civil Code
which are (1)The State and its political subdivisions; (2)Other corporations, institutions and entities
for public interest or purpose created by law; their personality begins as soon as they have been
constituted according to law and (3)Corporations, partnerships and associations for private interest
or purpose to which the law grants a juridical personality, separate and distinct from that of each
shareholder, partner or member. The BSP, as presently constituted under Republic Act No. 7278,
falls under the second classification. The purpose of the BSP as stated in its amended charter
shows that it was created in order to implement a State policy declared in Article II, Section 13 of the
Constitution.
Evidently, the BSP, which was created by a special law to serve a public purpose in pursuit
of a constitutional mandate, comes within the class of "public corporations". Since BSP, under its
concludes that it is subject to the exercise by the COA of its audit jurisdiction in the manner
According to Carpio, the public purpose of the BSP is not determinative of status. The BSP
performs functions which may be classified as public in character, in the sense that it promotes
"virtues of citizenship and patriotism and the general improvement of the moral spirit and fiber of our
youth." However, this fact alone does not automatically make the BSP a GOCC. The fact that a
certain juridical entity is impressed with public interest does not, by that circumstance alone, make
the entity a public corporation, incorporated solely for the public good. Authorities are of the view that
the purpose alone of the corporation cannot be taken as a safe guide, for the fact is that almost all
corporations are nowadays created to promote the interest, good, or convenience of the public. The
true criterion to determine whether a corporation is public or private is found in the totality of the
relation of the corporation to the State. If the corporation is created by the State as the latter's own
agency or instrumentality to help it in carrying out its governmental functions, then that corporation is
FACTS:
The petitioner was incorporated as a juridical entity by virtue of Act No. 1285, enacted on
January 19, 1905, by the Philippine Commission. The objects of the petitioner, as stated in Section 2
of its charter, shall be to enforce laws relating to cruelty inflicted upon animals or the protection of
animals in the Philippine Islands, and generally, to do and perform all things which may tend in any
way to alleviate the suffering of animals and promote their welfare. At the time of the enactment of
Act No. 1285, the original Corporation Law, Act No. 1459, was not yet in existence. Act No. 1285
antedated both the Corporation Law and the constitution of the SEC.
For the purpose of enhancing its powers in promoting animal welfare and enforcing laws for
the protection of animals, the petitioner was initially imbued under its charter with the power to
apprehend violators of animal welfare laws. In addition, the petitioner was to share 1/2 of the fines
imposed and collected through its efforts for violations of the laws related thereto. Subsequently, the
power to make arrests as well as the privilege to retain a portion of the fines collected for violation of
animal-related laws were recalled by virtue of C.A. No. 148. The cruel treatment of animals is now
an offense against the State, penalized under our statutes, which the Government is duty bound to
enforce.
An audit team from respondent COA visited the office of the petitioner to conduct an audit
survey but the petitioner objected on the ground that it was a private entity which is not under the
jurisdiction of COA.
HELD: Yes.
The Court agrees with the petitioner that the charter test cannot be applied. The charter
test had been introduced by the 1935 Constitution and not earlier, it follows that the test cannot
apply to the petitioner, which was incorporated by virtue of Act No. 1285, enacted on January 19,
1905. Settled is the rule that laws in general have no retroactive effect, unless the contrary is
provided. Moreover, Petitioners charter shows that it is not subject to control or supervision by any
representative sits on the board of trustees of the petitioner. Like all private corporations, the
successors of its members are determined voluntarily and solely by the petitioner in accordance with
its by-laws, and may exercise those powers generally accorded to private corporations, and it may
adopt by-laws for its internal operations and the petitioner shall be managed or operated by its
Furthermore, the employees of the petitioner are registered and covered by the SSS at the
latters initiative, and not through the GSIS, which should be the case if the employees are
entity. In addition, the respondents contend that the petitioner is a body politic because its primary
purpose is to secure the protection and welfare of animals which, in turn, redounds to the public
good. This argument is not tenable. The fact that a certain juridical entity is impressed with public
interest does not, by that circumstance alone, make the entity a public corporation, inasmuch as a
corporation may be private although its charter contains provisions of a public character,
incorporated solely for the public good. Authorities are of the view that the purpose alone of the
corporation cannot be taken as a safe guide, for the fact is that almost all corporations are nowadays
The true criterion, therefore, to determine whether a corporation is public or private is found
in the totality of the relation of the corporation to the State. If the corporation is created by the State
as the latters own agency or instrumentality to help it in carrying out its governmental functions, then
that corporation is considered public, otherwise, it is private. Applying the above test, provinces,
chartered cities, and barangays can best exemplify public corporations. They are created by the
State as its own device and agency for the accomplishment of parts of its own public works.
Therefore, the Court declared petitioner as a private domestic corporation subject to the
jurisdiction of the Securities and Exchange Commission. The respondents are enjoined from
investigating, examining and auditing the petitioner's fiscal and financial affairs.
NATIONAL POWER CORPORATION VS. CITY OF CABANATUAN
FACTS:
power and the production of electricity from nuclear, geothermal, and other sources, as well as, the
transmission of electric power on a nationwide basis.For many years now, NAPOCOR sells electric
power to the resident Cabanatuan City. The respondent assessed the petitioner a franchise tax.
Petitioner, whose capital stock was subscribed and wholly paid by the Philippine Government,
refused to pay the tax assessment. It argued that the respondent has no authority to impose tax on
government entities that are engaged in trade or occupation for profit, and that the NAPOCOR
Charter, being a valid exercise of police power, should prevail over the LGC.
Petitioner also contend that as a non-profit organization, it is exempted from the payment of all forms
The respondent filed a collection suit in the RTC of Cabanatuan City, demanding that
petitioner pay the assessed tax, plus surcharge. Respondent alleged that petitioners exemption
from local taxes has been repealed by Sec. 193 of RA 7160 (Local Government Code). The trial
court issued an order dismissing the case and ruled that the tax exemption privileges granted to
petitioner subsist despite the passage of Rep. Act No. 7160.On appeal, the Court of Appeals
reversed the decision of the RTC on the ground that section 193, in relation to sections 137 and 151
of the LGC, expressly withdrew the exemptions granted to the petitioner and ordered the petitioner
ISSUES:
(1) Whether or not the NAPOCOR is excluded from the coverage of the franchise tax because its
stocks are wholly owned by the National Government and its charter is characterized as a non-profit
organization.
HELD:
NO. To determine whether the petitioner is covered by the franchise tax in question, the
following requisites should concur: (1) that petitioner has a "franchise" in the sense of a secondary or
special franchise; and (2) that it is exercising its rights or privileges under this franchise within the
territory of the respondent city government. Petitioner fulfills the first requisite. Commonwealth Act
No. 120, as amended by Rep. Act No. 7395, constitutes petitioner's primary and secondary
franchises. It serves as the petitioner's charter, defining its composition, capitalization, the
appointment and the specific duties of its corporate officers, and its corporate life span. Petitioner
also fulfills the second requisite. It is operating within the respondent city government's territorial
jurisdiction pursuant to the powers granted to it by Commonwealth Act No. 120, as amended.
Fulfilling both requisites, petitioner is, and ought to be, subject of the franchise tax in question.
To stress, a franchise tax is imposed based not on the ownership but on the exercise by the
corporation of a privilege to do business. The taxable entity is the corporation which exercises the
franchise, and not the individual stockholders. By virtue of its charter, petitioner was created as a
separate and distinct entity from the National Government. It can sue and be sued under its own
name, and can exercise all the powers of a corporation under the Corporation Code. To be sure, the
ownership by the National Government of its entire capital stock does not necessarily imply that
authority, which does not belong to citizens of the country generally as a matter of common right. It
may be construed in two senses namely, the right vested in the individuals composing the
corporation and the right and privileges conferred upon the corporation. A franchise tax is
understood in the second sense. It is not levied on the corporation simply for existing as a
corporation but on its exercise of the rights or privileges granted to it by the government. NAPOCOR
is covered by the franchise tax because it exercises a franchise in the second sense and it is
exercising its rights or privileges under this franchise within the territory of the City.
generation of power and the production of electricity from nuclear, geothermal and other sources, as
well as the transmission of electric power on a nationwide basis. Pursuant to this mandate, petitioner
generates power and sells electricity in bulk. Certainly, these activities do not partake of the
sovereign functions of the government. They are purely private and commercial undertakings, albeit
imbued with public interest. The public interest involved in its activities, however, does not distract
from the true nature of the petitioner as a commercial enterprise which is declared by this Court as
ministrant or proprietary functions of government aimed at advancing the general interest of society.
It is worth mentioning that section 192 of the LGC empowers the LGUs, through ordinances
duly approved, to grant tax exemptions, initiatives or reliefs. But in enacting section 37 of Ordinance
No. 165-92 which imposes an annual franchise tax notwithstanding any exemption granted by law or
other special law, the respondent city government clearly did not intend to exempt the petitioner from
FACTS:
The Social Security Commission (SSC) in behalf of SSS and the Concerned Employees for
Better SSS (ACCESS) executed a collective negotiation agreement (CAN) that provides P5,000.00
as contract signing bonus. Department of Budget and Management (DBM) declared the CAN as
illegal. The SSS Corporate Auditor disallowed fund releases for the signing bonus since it was an
allowance in the form of additional compensation prohibited by the Constitution. Two years later,
ACCESS appealed the disallowance but COA affirmed the disallowance and ruled that the grant of
the signing bonus was improper because it has no legal basis since Sec. 16 of RA 7658 (1989) had
repealed the authority of the SSC to fix the compensation of its personnel.
Hence, the instant petition was filed in the name of the Social Security System and not by
ACCESS through its legal staff. Petitioner SSS argues that a signing bonus may be granted upon
the conclusion of negotiations leading to the execution of a CNA under Sec. 3, par. (c), of RA 1161
as, which allows the SSC to fix the compensation of its personnel. On the other hand, respondent
COA asserts that the authority of the SSC to fix the compensation of its personnel has been
ISSUES:
1. Whether or not ACESS has a power to file a case in the name of SSS?
2. Whether or not PITC is covered by laws prescribing a compensation and position classification
3. Whether or not the charter of SSS authorizes SSC to fix the compensation of its employees and
officers.
HELD:
No. There is no directive from the SSC that authorized the suit and only the officer-in-charge
in behalf of petitioner executed the purported directive. Clearly, this is irregular since under Sec. 4,
par. 10, in relation to par. 7 RA 1161 as amended by RA 8282, it is the SSC as a collegiate body
which has the power to approve, confirm, pass upon or review the action of the SSS to sue in court.
Moreover, the appearance of the internal legal staff of the SSS as counsel in the present
proceedings is similarly questionable because only DOJ can act as counsel of SSS under both RA
1161 and RA 8282. It is well settled that the legality of the representation of an unauthorized counsel
may be raised at any stage of the proceedings and that such illicit representation produces no legal
effect.
In the case at bar, there is no approval or ratification of the SSC has been undertaken in the
manner prescribed by law and DOJ has not delegated the authority to act as counsel, then this case
must fail. These procedural deficiencies are serious matters that cannot be ignored since the SSS is
in reality confessing judgment to charge expenditure against the trust fund under its custodianship.
As to the second issue, according to the COA in its Decision No. 98-048 dated January 27,
1998, the exemption granted to the PITC has been repealed and revoked by the repealing
provisions of RA 6758. The repeal by Section 16 of RA 6758 of all corporate charters that exempt
agencies from the coverage of the System was clear and expressed necessarily to achieve the
purposes for which the law was enacted, that is, the standardization of salaries of all employees in
government owned and / or controlled corporations to achieve equal pay for substantially equal
work. Henceforth, PITC should now be considered as covered by laws prescribing a compensation
And lastly, RA 6758 modified, if not repealed, Sec. 3, par. (c), of RA 1161 as amended, at
least insofar as it concerned the authority of SSC to fix the compensation of SSS employees and
officers. RA 6758 intended to do away with multiple allowances and other incentive packages and
the resulting differences in compensation among government personnel, the statute clearly did not
revoke existing benefits being enjoyed by incumbents of government positions at the time of the
passage of RA 6758 by virtue of Sections 12 and 17 thereof. This means that whatever salaries and
other financial and non-financial inducements that the SSC was minded to fix for them, the
compensation must comply with the terms of RA 6758. Unfortunately, the signing bonus in question
did not qualify under Sections 12 and 17 of RA 6758. It was non-existent as of 1 July 1989 as it
accrued only in 1996 when the CNA was entered into by and between SSC and ACCESS. The
signing bonus therefore could not have been included in the salutary provisions of the statute nor
would it be legal to disburse to the intended recipients. The signing bonus is not truly reasonable
relations have no place in the bureaucracy and that only a peaceful collective negotiation which is
concluded within a reasonable time must be the standard for interaction in the public sector. This
desired conduct among civil servants should not come, we must stress, with a price tag which is
Facts:
PD 198 authorizes the formation, lays down the powers and functions, and governs the
operation of water districts throughout the country, it is the source of authorization and power to form
and maintain a water district. Marilao Water District was formed by Resolution of the Sangguniang
Bayan of the Municipality of Marilao pursuant to PD 198 which resolution was thereafter forwarded
to the LWUA duly filed by it after ascertaining that it conformed to the requirements of the law. Under
PD 198, water districts may be created by the different local legislative bodies by the passage of a
The primary function of these water districts is to sell water to residents within their territory,
under such schedules of rates and charges as may be determined by their boards.The juridical
entities thus created and organized under PD 198 are considered quasi-public corporations,
A claim was thereafter made that the creation of the Marilao Water District in the manner
stated was defective and illegal. The claim was made by a non-stock, non-profit corporation known
as the Marilao Water Consumers Association. The petition prayed for the dissolution of the water
district on the basis on the reason that there had been no real, but only a "farcical" public hearing
prior to the creation of the Water District, that not only was the waterworks system turned over to the
Water District without compensation but a subsidy was illegally authorized for it, that the Water
District was being run with "negligence, apathy, indifference and mismanagement," and was not
providing adequate and efficient service to the community, but this notwithstanding, the consumers
were being billed in full and threatened with disconnection for failure to pay bills on time, in fact, one
of the consumers who complained had his water service cut off, and lastly, that the consumers were
consequently "forced to organize themselves into a corporation for the purpose of demanding
adequate and sufficient supply of water and efficient management of the waterworks in Marilao,
Bulacan.
The Marilao Water District filed its Answer denying the material allegations of the petition and
asserting as affirmative defenses (a) the Court's lack of jurisdiction of the subject matter, and (b) the
failure of the petition to state a cause of action. The answer alleged that the matter of the water
district's dissolution fell under the original and exclusive jurisdiction of the Securities & Exchange
Commission (SEC), and the matter of the propriety of water rates, within the primary administrative
jurisdiction of the LWUA and the quasi-judicial jurisdiction of the National Water Resources Council.
The petitioner, the Marilao Consumers Association filed a reply, and an answer to the counterclaim.
It averred that since the Marilao Water District had not been organized under the Corporation Code,
the SEC had no jurisdiction over a proceeding for its dissolution and that under Section 45 of PD
198, the proceeding to determine if the dissolution of the water district is for the best interest of the
people, is within the competence of a regular court of justice, and neither the LWUA nor the National
Water Resources Council is competent to take cognizance of the matter of dissolution of the water
district and recovery of its waterworks system, or the exorbitant rates imposed by it.
The Trial Court found for the respondents. It dismissed the Consumers Association's suit.
The Appellate Court, in its Decision ruled that its cause could not prosper.
Issue: Whether or not the matter of the water district's dissolution fell under the original and
HELD: No.
The court held that the juridical entities known as water districts created by PD 198, although
considered as quasi-public corporations and authorized to exercise the powers, rights and privileges
given to private corporations under existing laws are entirely distinct from corporations organized
under the Corporation Code. The Corporation Code has nothing to do with their formation and
organization, all the terms and conditions for their organization and operation being particularly
spelled out in PD 198. The resolutions creating them, their charters, in other words, are filed not with
the Securities and Exchange Commission but with the LWUA. It is these resolutions and charters,
and not articles of incorporation drawn up under the Corporation Code, which set forth the name of
the water districts, the number of their directors, the manner of their selection and replacement, and
their powers. The SEC which is charged with enforcement of the Corporation Code as regards
corporations, partnerships and associations formed or operating under its provisions, has no power
of supervision or control over the activities of water districts. The function of supervision or control
Moreover, the Provincial Water Utilities Act of 1973 has a specific provision governing
dissolution of water districts. Under this provision, it is the LWUA which is the administrative body
involved in the voluntary dissolution of a water district, it is with it that the resolution of dissolution is
filed, not the Securities and Exchange Commission. And this provision is evidently quite distinct and
different from those on dissolution of corporations formed or organized under the provisions of the
Corporation Code set out in Sections 117 to 121, inclusive, of said Code, under which dissolution
may be voluntary, generally effected by the filing of the corresponding resolution with the Securities
and Exchange Commission, or involuntary, commenced by the filing of a verified complaint also with
the SEC.
All these argue against conceding jurisdiction in the Securities and Exchange Commission
over proceedings for the dissolution of water districts. For although described as quasi public
corporations, and granted the same powers as private corporations, water districts are not really
corporations. They have no incorporators, stockholders or members, who have the right to vote for
directors, or amend the articles of incorporation or by-laws, or pass resolutions, or otherwise perform
such other acts as are authorized to stockholders or members of corporations by the Corporation
Code. In a word, there can be no such thing as a relation of corporation and stockholders or
members in a water district for the simple reason that in the latter there are no stockholders or
members. Between the water district and those who are recipients of its water services there exists
not the relationship of corporation-and-stockholder, but that of a service agency and users or
customers. There can therefore be no such thing in a water district as "intra-corporate or partnership
relations, between and among stockholders, members or associates (or) between any or all of them
and the corporation, partnership or association of which they are stockholders, members or
bring controversies involving them within the competence and cognizance of the SEC.
The decision of the Intermediate Appellate Court affirming that of the Regional Trial Court is
reversed and set aside, and the case was remanded to the Regional Trial Court for further