Herrera v Quezon City Board of Assessment

GR No L-15270, September 30, 1961

FACTS:
In 1952, the Director of the Bureau of Hospitals authorized Jose V. Herrera and
Ester Ochangco Herrera to establish and operate the St. Catherine’s Hospital. In
1953, the Herreras sent a letter to the Quezon City Assessor requesting exemption
from payment of real estate tax on the hospital, stating that the same was
established for charitable and humanitarian purposes and not for commercial gain.
The exemption was granted effective years 1953 to 1955. In 1955, however, the
Assessor reclassified the properties from “exempt” to “taxable” effective 1956, as
it was ascertained that out of the 32 beds in the hospital, 12 of which are for
pay-patients. A school of midwifery is also operated within premises of the
hospital.

ISSUE:
Whether St. Catherine’s is exempt from realty tax

RULING:
Yes. The admission of pay-patients does not detract from the charitable character
of a hospital, if all its funds are devoted exclusively to the maintenance of the
institution as a public charity.
The exemption extends to facilities which are incidental to and reasonably
necessary for the accomplishment of said
purpose – a school for training nurses, a nurses’ home, etc.