Villanueva vs.

City of Iloilo
G.R. No. L-26521, December 28, 1968

Facts: On September 30, 1946 the municipal board of Iloilo City enacted Ordinance 86. The Supreme
Court, however, declared the ordinance ultra vires. On January 15, 1960 the municipal board of Iloilo
City, believing that with the passage of Republic Act 2264, otherwise known as the Local Autonomy Act,
it had acquired the authority or power to enact an ordinance similar to that previously declared by the
Supreme Court as ultra vires, enacted Ordinance 11 (eleven), series of 1960, imposing municipal license
tax on persons engaged in the business of operating tenement houses.

On July 11, 1962 and April 24, 1964, the plaintiffs-appellees who are apartment owners in the City of
Iloilo, filed a complaint, and an amended complaint, respectively, against the City, praying that
Ordinance 11, series of 1960, be declared "invalid for being beyond the powers of the Municipal Council
of the City of Iloilo to enact, and unconstitutional for being violative of the rule as to uniformity of
taxation and for depriving said plaintiffs of the equal protection clause of the Constitution," and that the
City be ordered to refund the amounts collected from them under the said ordinance. The lower court
rendered judgment declaring the ordinance illegal.

Issues:

What is a real estate tax? Is a tax on the business of operating tenement houses a real estate tax?

Held:
A real estate tax is a direct tax on the ownership of lands and buildings or other improvements thereon,
not specially exempted, and is payable regardless of whether the property is used or not, although the
value may vary in accordance with such factor. The tax is usually single or indivisible, although the land
and building or improvements erected thereon are assessed separately, except when the land and
building or improvements belong to separate owners. It is a fixed proportion of the assessed value of
the property taxed, and requires, therefore, the intervention of assessors. It is collected or payable at
appointed times, and it constitutes a superior lien on and is enforceable against the property subject to
such taxation, and not by imprisonment of the owner.
The tax imposed by the ordinance in question does not possess the aforestated attributes. It is not a tax
on the land on which the tenement houses are erected, although both land and tenement houses may
belong to the same owner. The tax is not a fixed proportion of the assessed value of the tenement
houses, and does not require the intervention of assessors or appraisers. It is not payable at a
designated time or date, and is not enforceable against the tenement houses either by sale or distraint.
Clearly, therefore, the tax in question is not a real estate tax.




Mactan Cebu (MCIAA) vs. Marcos
GR 120082 September 11, 1996 261 SCRA 667

FACTS:

Mactan Cebu International Airport Authority (MCIAA) was created to principally undertake to
economical, efficient and effective control, management and supervision of the Mactan International
Airport and such other airports as may be established in the province of Cebu Section 14 of its
charter excempts the Authority from payment of realty taxes but in 1994, the City Treasurer demanded
payment for realty taxes on several parcels of land belonging to the other. MCIAA filed a petition in RTC
contending that, by nature of its powers and functions, it has the same footing of an agency or
instrumentality of the national government. The RTC dismissed the petition based on Section 193 & 234
of the local Government Code or R.A. 7160. Thus this petition.

ISSUE:

Whether or not the MCIAA is exempted from realty taxes?

HELD:

With the repealing clause of RA 7160 the tax exemption provided. All general and special in the charter
of the MCIAA has been expressly repeated. It state laws, acts, City Charters, decrees, executive orders,
proclamations and administrative regulations, or part of parts thereof which are inconsistent with any of
the provisions of the Code are hereby repeated or modified accordingly. Therefore the SC affirmed the
decision and order of the RTC and herein petitioner has to pay the assessed realty tax of its properties
effective January 1, 1992 up to the present.
















Mindanao Bus Co. v. City Assessor Digest

G.R. No. L-17870 29 September 1962

Facts

Petitioner is a public utility company engaged in the transport of passengers and cargo by motor
vehicles in Mindanao with main offices in Cagayan de Oro (CDO). Petitioner likewise owned a land
where it maintains a garage, a repair shop and blacksmith or carpentry shops. The machineries are
placed thereon in wooden and cement platforms. The City Assessor of CDO then assessed a P4,400
realty tax on said machineries and repair equipment. Petitioner appealed to the Board of Tax Appeals
but it sustained the City Assessor's decision, while the Court of Tax Appeals (CTA) sustained the same.
Note: This is merely a case digest to aid in remembering the important points of a case. It is still
advisable for any student of law to read the full text of assigned cases.

Issue:
Whether the machineries and equipment are considered immobilized and thus subject to a realty tax

Held:

The Supreme Court decided otherwise and held that said machineries and equipment are not subject to
the assessment of real estate tax.

Said equipment are not considered immobilized as they are merely incidental, not essential and
principal to the business of the petitioner. The transportation business could be carried on without
repair or service shops of its rolling equipment as they can be repaired or services in another shop
belonging to another.















Caltex vs Central Board of Assessment Appeals & City Assessor of Pasay
GR No. L-50466, May 31, 1982


FACTS:

Caltex loaned machines and equipment to gas station operators under an appropriate lease agreement
or receipt. The lease contract stipulated that upon demand, the operators shall return to Caltex the
machines and equipment in good condition as when received, ordinary wear and tear excepted. The
lessor of the land, where the gas station is located, does not become the owner of the machines and
equipment installed therein. Caltex retains the ownership thereof during the term of the lease.


ISSUE
Whether the gas station equipment and machinery permanently affixed by Caltex to its gas station and
pavement should be subject to realty tax.

HELD

The subject machines and equipment are taxable improvement and machinery within the meaning of
the Assessment Law and the Real Property Tax Code, because the same are necessary to the operation
of the gas station and have been attached/affixed/embedded permanently to the gas station site.

Improvements on land are commonly taxed as realty even though they might be considered personalty.
It is a familiar phenomenon to see things classified as real property for purposes of taxation which on
general principle might be considered personal property (Standard Oil Co., vs Jaramillo, 44 PHIL 630).