Republic of the Philippines


CBAA CASE NO. M-20 -versus-



x- – – – – – – – – – – – – – – – – – – – – – – – – – – x


This Board rendered a decision in the above-entitled case on April 7,

2005 denying the appeal of Petitioner-Appellant, and affirming the decision of

the Local Board of Assessment Appeals of the City of Davao. As a

consequence, Petitioner-Appellant filed a manifestation and motion for

reconsideration on September 21, 2005 by registered mail and received by this

Board on September 30, 2005, alleging among others that they received a copy

of the decision on September 6, 2005.

Petitioner-Appellant is seeking for reconsideration of the following

assignment of errors, to wit:

1. The findings of this Board that the appeal on assessment filed at the Local Board of Assessment Appeals was filed out of time as well as its findings that the appeal is not considered to have been filed is not in accordance with the facts/evidence and law presented by the Petitioner-Appellant.

2. The findings of this Board that the real properties of Petitioner-Appellant subject of this case and located in Davao City are liable for the real property tax is not in accordance with the facts/evidence and the law presented by the Petitioner-Appellant.

3. The findings of this Board in not considering the issues raised by the Petitioner-Appellant in its third assignment of error in its memorandum of

appeal is against the facts/evidence and the law presented by the Petitioner-Appellant.

Anent the first assignment of error, this Board finds the conclusion of

facts of the Board below with great respect if not with finality. These are

evidentiary matters which could be appropriately determined at the trial stage.

But did not this Board take cognizance of the other issues other than Petitioner-

Appellant’s filing of their appeal with the Local Board of Assessment Appeals of

Davao City out of time?

On the second assignment of error, Petitioner-Appellant admits that it is a

government-owned and controlled corporation. Petitioner-Appellant argues that

under Section 6 (b) vii of its charter, Petitioner-Appellant is empowered to

administer properties of any kind under its jurisdiction (Par. 2, Statement of

Facts of Memorandum of Appeal). On the contrary, however, we quote the

same section of the charter for ready reference, to wit:

“(b) The corporate powers of the Authority shall be as follows:

x x x x x x x x x

(vii) To acquire, purchase, own, lease, mortgage, sell or otherwise dispose of any land, port facility, wharf, quay, or property of any kind, whether movable or immovable.”

Clearly, the above-quoted provision of the charter (P.D. No. 857) of Petitioner-

Appellant, give them the power to exercise the rights of ownership over the

properties in question. It also negates the claims of Petitioner-Appellant that

they are only the administrator of all government ports and not the owner


Petitioner-Appellant further argues that the ‘title’ of Presidential Decree

No. 857 “suggests that they hold all government ports only as administrator and

not the owner thereof, not even the beneficial use of them as they are only an

agent, the principal being the State.” We disagree. “Resort may be had to the

title of a statute as an aid in its interpretation. If expressive, it may resolve

doubts as to its proper construction by extending its purview or by restraining it

or by correcting an obvious error (Wages vs. State, 141 So. 707). The title may

limit the scope of the act but it may not add to or extend the operation of the

statute. It is not controlling and may not be resorted to create an ambiguity, for

where the body of a statute is free from ambiguity, resort should not be had to

the title” (82 C.J.S., pp. 733-737) cited by Ruperto G. Martin, Statutory

Construction, 6th edition, 1979, p. 100)

Petitioner-Appellant also quoted the underlined portion of the decision in

the Philippines Ports Authority vs. City of Iloilo (First Division), G.R. No.

109791, July 14, 2003, to wit:

“x x x x x x x x x

“In any case, granting that petitioner’s present theory is allowed at this stage, we nevertheless find it untenable. Concededly, “ports constructed by the State” are properties of the public dominion, as Article 420 of the Civil Code enumerates these as properties “intended for public use.” It must be stressed however that what is being taxes in the present case is petitioner’s warehouse, which, although located within the port, is distinct from the port itself. In Light Rail Transit Authority v. Central Board of Assessment Appeals et. al. (342 SCRA 692), petitioner therein similarly sought an exemption from real estate taxes on its passenger terminals, arguing that said properties are considered as part of the “public roads,” which are classified as property of public dominion in the Civil Code. We ruled therein that:

“The properties of petitioner are not exclusively considered as public roads being improvements placed upon the public road, and this (separable) nature of the structure in itself physically distinguishes it from a public road. Considering further that carriageways or passenger terminals are elevated structures which are not freely accessible to the public, vis-à-vis roads which are public improvements openly utilized by the public, the former are entirely different from the latter.”

Using the same reasoning, the warehouse in the case

at bar may considering

not be held as part of its separable nature

the port, as an

improvement upon the port, and the fact that it is not open for use by everyone and freely accessible to the public. In the same way that we

ruled in one case that the exemption of public property from taxation does not extend to improvements made thereon by homesteaders or occupants at their own expense, (National Development Co. v. Cebu City, 215 SCRA 382) we likewise uphold the taxability of the warehouse in the instant case, it being a mere improvement built on an alleged property of public dominion, assuming petitioner’s port to be so. Moreover, petitioner may not invoke the definition of “port” in its charter to expand the meaning of “ports constructed by the State” in the “Civil code to include improvements built thereon. It must be noted that the charter itself limited the use of said definition only for interpretation of Presidential Decree (P.D.) No. 857, its by-laws, regulations and rules (Sec. 3, P.D. 857), and not of other statutes such as the Civil Code. Given these parameters, therefore, petitioner’s move to present its new theory, even if allowed, would nonetheless prove to be futile.”

The Supreme Court decision speaks for itself. Following the principle of

stare decisis, the doctrine that, when the court has once laid down a principle of

law as applicable to a certain state of facts, it will adhere to that principle and

apply it to all future cases where the facts are substantially the same

(Government v. Jalandoni, 44 OG 1840, cited in the Philippine Law Dictionary,

Federico B. Moreno, 1988, p. 902).

Even if Petitioner-Appellant is only the administrator of the properties of

the State, Section 202 of R.A. 7160 requires the administrator, of real property,

including the improvements therein to file with the provincial, city or municipal

assessor a sworn statement declaring the true value of their property. Section

217 of R.A. 7160, reads:

“Section 217. Actual Use of Real Property as Basis for 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. (underlining ours)

Presidential Decree No. 464 (1974) though, changed the basis of real

property taxation. “It adopted the policy of taxing real property on the basis of

“actual use”, even if the user is not the owner. The Supreme Court in the Case

of Nueva Ecija vs. Imperial Mining Co., Inc., L-59463, Nov. 19, 1982, ruled that

P.D. 464, “x x x, changed the basis of real property taxation. It adopted the

policy of taxing real property on the basis of actual use even if the user is not

the owner.” (underlining ours) (LRTA v. Board of Assessment Appeals of Manila

and City Assessor of Manila, CBAA Case No. L-06, July 6, 1995).

Section 199 (b) of R.A. 7160 defines ‘actual use’ as that referring “to the

purpose for which the property is principally or predominantly utilized by the

person in possession thereof.” The term “use” as define in Corpus Juris

Secundum, Vol. 91, p. 511, 516, American Law Book Co., Brooklyn, New York,

1955, is “the employment” of a thing for the accomplishment of a particular

purpose; to operate; to profit; In this sense a “use” is where a man has anything

to use to another, upon confidence that the other shall take the profits; he who

has the profits has the “use” (CBAA Case No. L-32, January 29, 2004, National

Power Corporation vs. LBAA of La Union and Municipal Assessor of Bauang,

The Provincial Assessor of La Union). Did not petitioner-appellant profit from

their administration of ‘ports’ and ‘terminal facilities’ (Annex “B” of manifestation

and motion for reconsideration) in Davao City? Did not petitioner-appellant

admit declaring and remitting dividends to the National Government (Annex “C”

and “C-1” of the manifestation and motion for reconsideration)?

Thus, this Board is of the opinion that Petitioner-Appellant is the actual

user of ‘ports’ and ‘terminal facilities’ of Davao City the subject matter of this


As a side issue, this Board noted that Petitioner-Appellant partly quoted a

paragraph of this Board’s Decision, thus, compelling us to restate the whole

paragraph to show the part omitted, unwittingly or otherwise, as follows:

“In Mactan Cebu International Airport Authority vs. Marcos, 261 SCRA 691, 692 (September 11, 1996), the Supreme Court held that these sections involve “transfer” of the “lands,” among other things, to the petitioner and not just the transfer of the beneficial use thereof, with the ownership being retained by the Republic of the Philippines. “This “transfer” is actually an absolute conveyance of the ownership thereof because the petitioner’s authorized capital stock consists of, inter alia, “the value of such real estate

owned and/or administered by the airports.” (underlined portion excluded)

In the case of Commission on Elections vs. Hon. Tomas B. Noynay,

(En Banc) G.R. No. 132365, July 9, 1998, 292 SCRA 264, the Supreme Court


“x x x, in both the motion for reconsideration and the petition, Atty. Balbuena deliberately made it appear that the quoted portions were our findings or rulings, or, put a little differently, our own words. The truth is, the quoted portion is just a part of the memorandum of the Court Administrator quoted in the decision.

Rule 10.02, of Canon 10 of the Code of Professional Responsibility,

mandates that a lawyer shall not knowingly misquote or misinterpret the text of

a decision or authority.

On the third assignment of error, this Board is, similarly, of the opinion

that the Republic of the Philippines is not an indispensable party to the suit

because her “interest in the controversy or subject matter is separable from the

interest of the other parties, so that it will not necessarily or injuriously be

affected by a decree which does complete justice between them.” (Arcelona v.

Court of Appeals, G.R. No. 102900, Oct. 2, 1997, 280 SCRA 40) “The

responsibility of impleading all the indispensable parties rests on the plaintiff.”

(ibid, p. 42, also cited by Oscar M. Herrera, Remedial Law, Vol. I, 2000, p. 377)

Borrowing the arguments in Philippine Ports Authority vs. City of Iloilo

(First Division), G.R. No. 109791, July 14, 2003, the Supreme Court “reiterate

that in taxing government-owned or controlled corporations, the State ultimately

suffers no loss. In National Power Corp. v. Presiding Judge, RTC, Br. XXV (190

SCRA 477), they elucidated:

“Actually, the State has no reason to decry the taxation of NAPOCOR’s properties, as and by way of real property taxes. Real property taxes, after all, form part and parcel of the financing apparatus of the Government in development and nation-building, particularly in the local government level.

x x x x x x x x x

“To all intents and purposes, real property taxes are funds taken by the State with one hand and given to the other. In no measure can the government be said to have lost anything.”

In the same Iloilo case, the Supreme Court further said in this wise:

“Nothing can prevent Congress from decreeing that even instrumentalities or

agencies of the Government performing governmental functions maybe subject

to tax. Where it is done precisely to fulfil a constitutional mandate and national

policy, no one can doubt its wisdom,” citing the case of MCIAA v. Marcos, 261,

SCRA 692.

Moreover, Petitioner-Appellant insists that the properties in questions ar

owned by the Republic. Since, Petitioner-Appellant is wholly owned by the

government, it follows that what Petitioner-Appellant owns is also owned by the

government. However, the ownership by the Republic over the properties in

question is indirect in nature, the direct owner thereof being the government-

owned corporation itself.

In the same CBAA Case No. M-15, “Petitioner-Appellant insists that the

entire port complex is a property of public domain in accordance with Article

420 of the New Civil Code, which provides that those intended for public use,

such as roads, canals, rivers, torrents, ports and bridges constructed by the

State, banks, shores, roadsteds, and others of similar character, are property of

public dominion. Even those properties of the State which are not for public use

but are intended for some public service or for the development of the national

wealth are also property of public dominion.”

The last paragraph of Section 234, R.A. 7160, does not, however,

distinguish real property in the hands of government-owned and controlled

corporation as to whether or not they are of public dominion or patrimonial in

nature. Public dominion or patrimonial in nature, all real property in the hands of

said government-owned and controlled corporations are subject to the payment

of real property tax upon the effectivity of R.A. 7160.

Since the provisions of Section 234 of R.A. 7160 are sufficiently clear, we

find no justification to resort to the Civil Code. Thus, this Board finds no cogent

reason that would warrant a revision of the decision sought to be reconsidered.

WHEREFORE, the instant Motion for Reconsideration is hereby DENIED

for lack of merit.


Manila, Philippines, November 8, 2005.