HON. RAMON D. BAGATSING; ROMAN G.

GARGANTIEL; THE MARKET

ADMINISTRATOR; and THE MUNICIPAL BOARD OF MANILA vs. HON. PEDRO A.
RAMIREZ and the FEDERATION OF MANILA MARKET VENDORS, INC.
G.R. No. L-41631 ; December 17, 1976
Ponente: MARTIN, J.:
FACTS:
The Municipal Board of Manila enacted Ordinance No. 7522, "AN ORDINANCE
REGULATING THE OPERATION OF PUBLIC MARKETS AND PRESCRIBING FEES FOR
THE RENTALS OF STALLS AND PROVIDING PENALTIES FOR VIOLATION THEREOF
AND FOR OTHER PURPOSES." The petitioner City Mayor, Ramon D. Bagatsing,
approved the said ordinance.
Respondent Federation of Manila Market Vendors, Inc. commenced a Civil Case before
the CFI of Manila presided over by respondent Judge, seeking the declaration of nullity
of Ordinance No. 7522 for the reason that the publication requirement under the
Revised Charter of the City of Manila has not been complied with.
After due hearing on the merits, respondent Judge rendered its decision declaring the
nullity of Ordinance No. 7522 of the City of Manila on the primary ground of non-
compliance with the requirement of publication under the Revised City Charter.
Petitioners moved for reconsideration of the adverse decision, stressing that only a
post-publication is required by the Local Tax Code.
Respondent Judge denied the motion.
ISSUE:
Whether the said ordinance is null for non-compliance with the requirement of
publication under the Revised City Charter.
RULING:
Ordinance No. 7522 is valid.
There is no question that the Revised Charter of the City of Manila is a special
act since it relates only to the City of Manila, whereas the Local Tax Code is a general
law because it applies universally to all local governments.
The rule commonly said is that a prior special law is not ordinarily repealed by a
subsequent general law. The fact that one is special and the other general creates a
presumption that the special is to be considered as remaining an exception of the
general, one as a general law of the land, the other as the law of a particular case. 
However, the rule readily yields to a situation where the special statute refers to a
subject in general, which the general statute treats in particular. The exactly is the
circumstance obtaining in the case at bar. Section 17 of the Revised Charter of the
City of Manila speaks of "ordinance" in general, i.e., irrespective of the nature and
scope thereof, whereas, Section 43 of the Local Tax Code relates to "ordinances levying
or imposing taxes, fees or other charges" in particular.
In regard, therefore, to ordinances in general, the Revised Charter of the City of Manila
is doubtless dominant, but, that dominant force loses its continuity when it
approaches the realm of "ordinances levying or imposing taxes, fees or other charges"
in particular. There, the Local Tax Code controls. Here, as always, a general provision
must give way to a particular provision.  Special provision governs. This is especially
true where the law containing the particular provision was enacted later than the one
containing the general provision. The City Charter of Manila was promulgated on June
18, 1949 as against the Local Tax Code which was decreed on June 1, 1973.
 WENCESLAO PASCUAL v. THE SECRETARY OF PUBLIC WORKS AND
COMMUNICATIONS, ET AL.
G.R. No. L-10405 ; December 29, 1960
Ponente: CONCEPCION, J.:
FACTS:
Wenceslao Pascual, as Provincial Governor of Rizal, instituted this action on the
ground that, at the time of the passage and approval of Republic Act No. 920 (An Act
Appropriating Funds for Public Works) for the construction, reconstruction, repair,
extension and improvement of Pasig feeder road terminals, the projected feeder roads
"do not connect any government property or any important premises to the main
highway".
Respondent Jose C. Zulueta, who, at that time was a member of the Senate of the
Philippines, is the owner of several parcels of residential land which had been reserved
for the projected feeder roads aforementioned. The petition alleges that the
construction of said feeder roads would have the effect of relieving respondent Zulueta
of the burden of constructing its subdivision streets or roads at his own expenses and
would greatly enhance or increase the value of the subdivision" of said respondent.
Petitioner prayed that the contested item of Republic Act No. 920 be declared null and
void. Respondents moved to dismiss the petition upon the ground that petitioner had
"no legal capacity to sue".
The lower court held that under these circumstances, the appropriation in question
was "clearly for a private, not a public purpose." Also, it held that since public interest
is involved in this case, the Provincial Governor of Rizal and the provincial fiscal
thereof who represents him therein, "have the requisite personalities" to question the
constitutionality of the disputed item of Republic Act No. 920.

ISSUES:
1. Whether the contested item of RA 920 is null and void.
2. Whether petitioner had the legal capacity to sue.

RULING:
1. Yes.

It is a general rule that the legislature is without power to appropriate public

revenue for anything but a public purpose. It is the essential character of the
direct object of the expenditure which must determine its validity as justifying a
tax, and not the magnitude of the interests to be affected nor the degree to
which the general advantage of the community, and thus the public welfare,
may be ultimately benefited by their promotion. Incidental advantage to the
 public or to the state, which results from the promotion of private interests and
the prosperity of private enterprises or business, does not justify their aid by
the use of public money."

The rule is set forth in Corpus Juris Secundum in the following language:

"In accordance with the rule that the taxing power must be exercised for public
purposes only, discussed supra sec. 14, money raised by taxation can be
expanded only for public purposes and not for the advantage of private
individuals."

2. Yes.
It is well settled that the validity of a statute may be contested only by one who
will sustain a direct injury in consequence of its enforcement. Yet, there are
many decisions nullifying, at the instance of taxpayers, laws providing for the
disbursement of public funds, upon the theory that "the expenditure of public
funds by an officer of the State for the purpose of administering an
unconstitutional act constitutes a misapplication of such funds," which may be
enjoined at the request of a taxpayer. Although there are some decisions to the
contrary, the prevailing view in the United States is stated in the American
Jurisprudence as follows:

"In the determination of the degree of interest essential to give the requisite
standing to attack the constitutionality of a statute the general rule is that only
persons individually affected, but also taxpayers, have sufficient interest in
preventing the illegal expenditure of moneys raised by taxation and may
therefore question the constitutionality of statutes requiring expenditure of
public moneys." (11 Am. Jur. 761; Italics supplied.)
 LIGHT RAIL TRANSIT AUTHORITY vs. CENTRAL BOARD OF ASSESSMENT
APPEALS, BOARD OF ASSESSMENT APPEALS OF MANILA and the CITY
ASSESSOR OF MANILA
G.R. No. 127316 ; October 12, 2000
Ponente: PANGANIBAN, J.:
FACTS:
The LRTA is a GOCC created and organized under EO No. 603 primarily responsible
for the construction, operation, maintenance and/or lease of light rail transit system
in the Philippines, giving due regard to the reasonable requirements of the public
transportation of the country.
By reason of EO 603, LRTA acquired real properties, constructed structural
improvements, such as buildings, carriageways, passenger terminal stations, and
installed various kinds of machinery and equipment and facilities for the purpose of
its operations.
Respondent-Appellee City Assessor of Manila assessed the real properties of LRTA,
consisting of lands, buildings, carriageways and passenger terminal stations,
machinery and equipment which he considered real property under the Real Property
Tax Code.
That LRTA paid its real property taxes on all its real property holdings, except the
carriageways and passenger terminal stations including the land where it is
constructed on the ground that the same are not real properties under the Real
Property Tax Code, and if the same are real propert[y], these are for public
use/purpose, therefore, exempt from realty taxation, which claim was denied by the
Respondent-Appellee City Assessor of Manila.
The CA held that petitioner's carriageways and passenger terminal stations
constituted real property or improvements thereon and, as such, were taxable under
the Real Property Tax Code.
ISSUE:
Whether petitioner's carriageways and passenger terminal stations are subject to real
property taxes.
RULING:
Yes.
Under the Real Property Tax Code, real property "owned by the Republic of the
Philippines or any of its political subdivisions and any government-owned or
controlled corporation so exempt by its charter, provided, however, that this
exemption shall not apply to real property of the abovenamed entities the beneficial
use of which has been granted, for consideration or otherwise, to a taxable person."
Executive Order No. 603, the charter of petitioner, does not provide for any real estate
tax exemption in its favor. Its exemption is limited to direct and indirect taxes, duties
or fees in connection with the importation of equipment not locally available.
Even granting that the national government indeed owns the carriageways and
terminal stations, the exemption would not apply because their beneficial use has
been granted to petitioner, a taxable entity.
Taxation is the rule and exemption is the exception. Any claim for tax exemption is
strictly construed against the claimant. LRTA has not shown its eligibility for
exemption; hence, it is subject to the tax.
REPUBLIC OF THE PHILIPPINES, represented by the PHILIPPINE RECLAMATION
AUTHORITY (PRA) vs. CITY OF PARANAQUE
G.R. No. 191109 ; July 18, 2012
Ponente: MENDOZA, J.:
FACTS:
The Public Estates Authority (PEA) is a government corporation created by virtue of PD
No. 1084 (Creating the Public Estates Authority, Defining its Powers and Functions,
Providing Funds Therefor and For Other Purposes) which took effect on February 4,
1977 to provide a coordinated, economical and efficient reclamation of lands, and the
administration and operation of lands belonging to, managed and/or operated by, the
government with the object of maximizing their utilization and hastening their
development consistent with public interest.
On February 14, 1979, by virtue of EO No. 525 issued by then President Marcos, PEA
was designated as the agency primarily responsible for integrating, directing and
coordinating all reclamation projects for and on behalf of the National Government.
On October 26, 2004, then President Gloria Macapagal-Arroyo issued E.O. No. 380
transforming PEA into PRA, which shall perform all the powers and functions of the
PEA relating to reclamation activities.
By virtue of its mandate, PRA reclaimed several portions of the foreshore and offshore
areas of Manila Bay, including those located in Parañaque City.
On February 19, 2003, then Parañaque City Treasurer Carabeo issued Warrants of
Levy on PRA’s reclaimed properties located in Parañaque City based on the
assessment for delinquent real property taxes.
Thus, PRA insists that, as an incorporated instrumentality of the National
Government, it is exempt from payment of real property tax except when the beneficial
use of the real property is granted to a taxable person. PRA claims that based on
Section 133(o) of the LGC, local governments cannot tax the national government
which delegate to local governments the power to tax.
It explains that reclaimed lands are part of the public domain, owned by the State,
thus, exempt from the payment of real estate taxes. Reclaimed lands retain their
inherent potential as areas for public use or public service. While the subject
reclaimed lands are still in its hands, these lands remain public lands and form part of
the public domain.
On the other hand, the City of Parañaque argues that PRA’s very own charter declared
it to be a GOCC and that it has entered into several thousands of contracts where it
represented itself to be a GOCC.
ISSUE:
Whether PRA is a GOCC which is not exempt from the payment of real property tax.
RULING:
No.
A GOCC must be "organized as a stock or non-stock corporation" while an
instrumentality is vested by law with corporate powers. When the law makes a
government instrumentality operationally autonomous, the instrumentality remains
part of the National Government machinery although not integrated with the
department framework.
When the law vests in a government instrumentality corporate powers, the
instrumentality does not necessarily become a corporation. Unless the government
instrumentality is organized as a stock or non-stock corporation, it remains a
government instrumentality exercising not only governmental but also corporate
powers.
Two requisites must concur before one may be classified as a stock corporation,
namely: (1) that it has capital stock divided into shares; and (2) that it is authorized to
distribute dividends and allotments of surplus and profits to its stockholders. If only
one requisite is present, it cannot be properly classified as a stock corporation. As for
non-stock corporations, they must have members and must not distribute any part of
their income to said members.
In the case at bench, PRA is not a GOCC because it is neither a stock nor a non-stock
corporation. It cannot be considered as a stock corporation because although it has a
capital stock divided into no par value shares as provided in Section 7 of P.D. No.
1084, it is not authorized to distribute dividends, surplus allotments or profits to
stockholders. There is no provision whatsoever in P.D. No. 1084 or in any of the
subsequent executive issuances pertaining to PRA, that authorizes PRA to distribute
dividends, surplus allotments or profits to its stockholders.
PRA cannot be considered a non-stock corporation either because it does not have
members. A non-stock corporation must have members. Moreover, it was not
organized for any of the purposes mentioned in Section 88 of the Corporation Code.
Specifically, it was created to manage all government reclamation projects.
However, government-owned or controlled corporations with special charters,
organized essentially for economic or commercial objectives, must meet the test of
economic viability. These are the government-owned or controlled corporations that
are usually organized under their special charters as stock corporations, like the Land
Bank of the Philippines and the Development Bank of the Philippines. These are the
government-owned or controlled corporations, along with government-owned or
controlled corporations organized under the Corporation Code, that fall under the
definition of "government-owned or controlled corporations" in Section 2(10) of the
Administrative Code.
This Court is convinced that PRA is not a GOCC either under Section 2(3) of the
Introductory Provisions of the Administrative Code or under Section 16, Article XII of
the 1987 Constitution. The facts, the evidence on record and jurisprudence on the
issue support the position that PRA was not organized either as a stock or a non-stock
corporation. Neither was it created by Congress to operate commercially and compete
in the private market. Instead, PRA is a government instrumentality vested with
corporate powers and performing an essential public service pursuant to Section 2(10)
of the Introductory Provisions of the Administrative Code. Being an incorporated
government instrumentality, it is exempt from payment of real property tax.
Clearly, respondent has no valid or legal basis in taxing the subject reclaimed lands
managed by PRA. On the other hand, Section 234(a) of the LGC, in relation to its
Section 133(o), exempts PRA from paying realty taxes and protects it from the taxing
powers of local government units.
Section 234 provides that real property owned by the Republic of the Philippines is
exempt from real property tax unless the beneficial use thereof has been granted to a
taxable person. In this case, there is no proof that PRA granted the beneficial use of
the subject reclaimed lands to a taxable entity. There is no showing on record either
that PRA leased the subject reclaimed properties to a private taxable entity.
This exemption should be read in relation to Section 133(o) of the same Code, which
prohibits local governments from imposing "taxes, fees or charges of any kind on the
National Government, its agencies and instrumentalities x x x." The Administrative
Code allows real property owned by the Republic to be titled in the name of agencies or
instrumentalities of the national government. Such real properties remain owned by
the Republic and continue to be exempt from real estate tax.
Indeed, the Republic grants the beneficial use of its real property to an agency or
instrumentality of the national government. This happens when the title of the real
property is transferred to an agency or instrumentality even as the Republic remains
the owner of the real property. Such arrangement does not result in the loss of the tax
exemption, unless "the beneficial use thereof has been granted, for consideration or
otherwise, to a taxable person."
Similarly, Article 420 of the Civil Code enumerates properties belonging to the State:
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth. [Emphases
supplied]
Here, the subject lands are reclaimed lands, specifically portions of the foreshore and
offshore areas of Manila Bay. As such, these lands remain public lands and form part
of the public domain. The fact that alienable lands of the public domain were
transferred to the PEA (now PRA) and issued land patents or certificates of title in
PEA’s name did not automatically make such lands private. This Court also held
therein that reclaimed lands retained their inherent potential as areas for public use
or public service.
 COMMISSIONER OF INTERNAL REVENUE vs. BRITISH OVERSEAS AIRWAYS
CORPORATION and COURT OF TAX APPEALS
G.R. No. L-65773-74 ; April 30, 1987
Ponente: MELENCIO-HERRERA, J.:
FACTS:
BOAC is a 100% British Government-owned corporation organized and existing under
the laws of the United Kingdom. It is engaged in the international airline business and
is a member-signatory of the Interline Air Transport Association (IATA). As such it
operates air transportation service and sells transportation tickets over the routes of
the other airline members. During the periods covered by the disputed assessments, it
is admitted that BOAC had no landing rights for traffic purposes in the Philippines,
and was not granted a Certificate of public convenience and necessity to operate in the
Philippines by the Civil Aeronautics Board (CAB), except for a nine-month period,
partly in 1961 and partly in 1962, when it was granted a temporary landing permit by
the CAB. Consequently, it did not carry passengers and/or cargo to or from the
Philippines, although during the period covered by the assessments, it maintained a
general sales agent in the Philippines — Wamer Barnes and Company, Ltd., and later
Qantas Airways — which was responsible for selling BOAC tickets covering passengers
and cargoes.
The Tax Court held that the proceeds of sales of BOAC passage tickets in the
Philippines by Warner Barnes and Company, Ltd., and later by Qantas Airways,
during the period in question, do not constitute BOAC income from Philippine sources
"since no service of carriage of passengers or freight was performed by BOAC within
the Philippines" and, therefore, said income is not subject to Philippine income tax.
The CTA position was that income from transportation is income from services so that
the place where services are rendered determines the source.
ISSUE:
Whether the revenue derived by BOAC from sales of tickets in the Philippines for air
transportation, while having no landing rights here, constitute income of BOAC from
Philippine sources, and, accordingly, taxable.
RULING:
Yes.
The source of an income is the property, activity or service that produced the
income. For the source of income to be considered as coming from the Philippines, it is
sufficient that the income is derived from activity within the Philippines. In BOAC's
case, the sale of tickets in the Philippines is the activity that produces the income. The
tickets exchanged hands here and payments for fares were also made here in
Philippine currency. The site of the source of payments is the Philippines. The flow of
wealth proceeded from, and occurred within, Philippine territory, enjoying the
protection accorded by the Philippine government. In consideration of such protection,
the flow of wealth should share the burden of supporting the government.
LAND TRANSPORTATION OFFICE [LTO] v. CITY OF BUTUAN
G.R. No. 131512 ; January 20, 2000
PONENTE: VITUG, J.:

FACTS:
City of Butuan asserts that one of the salient provisions introduced by the Local
Government Code is in the area of local taxation which allows LGUs to collect
registration fees or charges along with, in its view, the corresponding issuance of all
kinds of licenses or permits for the driving of tricycles.

The Sangguniang Panlungsod ("SP") of Butuan, passed an Ordinance entitled "An

Ordinance Regulating the Operation of Tricycles-for-Hire, providing mechanism for the
issuance of Franchise, Registration and Permit, and Imposing Penalties for Violations
thereof and for other Purposes." The ordinance provided for, among other things, the
payment of franchise fees for the grant of the franchise of tricycles-for-hire, fees for the
registration of the vehicle, and fees for the issuance of a permit for the driving thereof.

LTO explains that one of the functions of the national government that, indeed, has
been transferred to local government units is the franchising authority over tricycles-
for-hire of the Land Transportation Franchising and Regulatory Board ("LTFRB") but
not, it asseverates, the authority of LTO to register all motor vehicles and to issue to
qualified persons of licenses to drive such vehicles.

ISSUE:
Whether under the present set up the power of the LTO to register, tricycles in
particular, as well as to issue licenses for the driving thereof, has likewise devolved to
local government units.

RULING:
No.
Registration and licensing functions are vested in the LTO while franchising and
regulatory responsibilities had been vested in the LTFRB.

Under Article 458 (a)[3-VI] of the Local Government Code, the power of LGUs to
regulate the operation of tricycles and to grant franchises for the operation thereof is
still subject to the guidelines prescribed by the DOTC. In compliance therewith, the
DOTC issued "Guidelines to Implement the Devolution of LTFRBs Franchising
Authority over Tricycles-For-Hire to Local Government units pursuant to the Local
Government Code”. Pertinent provisions of the guidelines state:

In lieu of the LTFRB in the DOTC, the Sangguniang Bayan/Sangguniang Panlungsod

(SB/SP) shall perform the following:
"(a) Issue, amend, revise, renew, suspend, or cancel MTOP and prescribe the
appropriate terms and conditions therefor;

Such as can be gleaned from the explicit language of the statute, as well as the
corresponding guidelines issued by DOTC, the newly delegated powers pertain to the
franchising and regulatory powers theretofore exercised by the LTFRB and not to the
functions of the LTO relative to the registration of motor vehicles and issuance of
licenses for the driving thereof . Clearly unaffected by the Local Government Code are
the powers of LTO under R.A. No.4136 requiring the registration of all kinds of motor
vehicles "used or operated on or upon any public highway" in the country.

The Commissioner of Land Transportation and his deputies are empowered at anytime
to examine and inspect such motor vehicles to determine whether said vehicles are
registered, or are unsightly, unsafe, improperly marked or equipped, or otherwise unfit
to be operated on because of possible excessive damage to highways, bridges and
other infrastructures. The LTO is additionally charged with being the central
repository and custodian of all records of all motor vehicles.

The operation of tricycles within a municipality may be regulated by the Sangguniang

Bayan. In this connection, the Sangguniang concerned would do well to consider
prohibiting the operation of tricycles along or across highways invite collisions with
faster and bigger vehicles and impede the flow of traffic.

The need for ensuring public safety and convenience to commuters and pedestrians
alike is paramount. It might be well, indeed, for public officials concerned to pay heed
to a number of provisions in our laws that can warrant in appropriate cases an
incurrence of criminal and civil liabilities.