MIAA v. Court of Appeals G.R. No.

155650, July 20, 2006

Facts:

The Manila International Airport Authority (MIAA) operates the Ninoy Aquino International Airport (NAIA) Complex in Paraaque City under Executive Order No. 903 (MIAA Charter), as amended. As such operator, it administers the land, improvements and equipment within the NAIA Complex. In March 1997, the Office of the Government Corporate Counsel (OGCC) issued Opinion No. 061 to the effect that the Local Government Code of 1991 (LGC) withdrew the exemption from real estate tax granted to MIAA under Section 21 of its Charter.

Thus, MIAA paid some of the real estate tax already due. In June 2001, it received Final Notices of Real Estate Tax Delinquency from the City of Paraaque for the taxable years 1992 to 2001. The City Treasurer subsequently issued notices of levy and warrants of levy on the airport lands and buildings.

At the instance of MIAA, the OGCC issued Opinion No. 147 clarifying Opinion No. 061, pointing out that Sec. 206 of the LGC requires persons exempt from real estate tax to show proof of exemption. According to the OGCC, Sec. 21 of the MIAA Charter is the proof that MIAA is exempt from real estate tax. MIAA, thus, filed a petition with the Court of Appeals seeking to restrain the City of Paraaque from imposing real estate tax on, levying against, and auctioning for public sale the airport lands and buildings, but this was dismissed for having been filed out of time.

Hence, MIAA filed this petition for review, pointing out that it is exempt from real estate tax under Sec. 21 of its charter and Sec. 234 of the LGC. It invokes the principle that the government cannot tax itself as a justification for exemption, since the airport lands and buildings, being devoted to public use and public service, are owned by the Republic of the Philippines. On the other hand, the City of Paraaque invokes Sec. 193 of the LGC, which expressly withdrew the tax exemption privileges of government-owned and controlled corporations (GOCC) upon the effectivity of the LGC.

It asserts that an international airport is not among the exceptions mentioned in the said law. Meanwhile, the City of Paraaque posted and published notices announcing the public auction sale of the airport lands and buildings. In the afternoon before the scheduled public auction, MIAA

applied with the Court for the issuance of a TRO to restrain the auction sale. The Court issued a TRO on the day of the auction sale, however, the same was received only by the City of Paraaque three hours after the sale.

Issue:

Whether or not the airport lands and buildings of MIAA are exempt from real estate tax?

Held:

The Petition is GRANTED.

The airport lands and buildings of MIAA are exempt from real estate tax imposed by local governments. Sec. 243(a) of the LGC exempts from real estate tax any real property owned by the Republic of the Philippines. This exemption should be read in relation with Sec. 133(o) of the LGC, which provides that the exercise of the taxing powers of local governments shall not extend to the levy of taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities.

These provisions recognize the basic principle that local governments cannot tax the national government, which historically merely delegated to local governments the power to tax.

The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. This rule applies with greater force when local governments seek to tax national government instrumentalities. Moreover, a tax exemption is construed liberally in favor of national government instrumentalities.

MIAA is not a GOCC, but an instrumentality of the government.

The Republic remains the beneficial owner of the properties. MIAA itself is owned solely by the Republic. At any time, the President can transfer back to the Republic title to the airport lands and

buildings without the Republic paying MIAA any consideration. As long as the airport lands and buildings are reserved for public use, their ownership remains with the State. Unless the President issues a proclamation withdrawing these properties from public use, they remain properties of public dominion. As such, they are inalienable, hence, they are not subject to levy on execution or foreclosure sale, and they are exempt from real estate tax.

However, portions of the airport lands and buildings that MIAA leases to private entities are not exempt from real estate tax. In such a case, MIAA has granted the beneficial use of such portions for a consideration to a taxable person.

HEBRON vs PALAD 495 SCRA 591 July 2006 FACTS: Gonzalo Palad was a co-owner of a parcel of agricultural land located in Poblacion, Bagac, Bataan, otherwise known as Lot 421, with an area of 32,944 square meters and covered by Transfer Certificate of Title No. 4408 of the Register of Deeds of Bataan. The extent of his co-ownership in Lot 421 is and 1/14. The other co-owners of Lot 421 and their respective shares were: Jacinto Palad, and 1/14; Spouses Juan Banzon and Elena Gutierrez, 1/14; Francisco Palad, 1/14; Lorenzo Palad, 1/14; Ramon Nojadera, 1/28; Ana Nojadera, 1/28; Modesta Nojadera (Modesta), 1/28; and, Concordia Nojadera , 1/28.3 Gonzalo's share in Lot 421 was conjugal property, having been acquired during his marriage with one Alejandra Nava. Adelaida, Benjamin, and Ignacio, respondents' father, were their children. Sometime during the Japanese Occupation, Alejandra died. Later on, Gonzalo contracted a second marriage with Remedios Torres Remedios, a widow, had three children from her previous marriage, herein petitioners. The union of Gonzalo and Remedios bore no children. On November 16, 1983, Gonzalo died. Ten years later Remedios died. Thereafter, petitioners took possession of a portion of Lot 421 and despite respondents' demands to vacate and turn over possession of the property, petitioners refused to do so. Respondents presented oral evidence to show that Gonzalo expressed his intentions regarding the disposition of his properties, which included his share in Lot 421 and a 173-square meter lot in Pag-asa, Bagac, Bataan; that Gonzalo intended that the Pag-asa property would be given to Remedios and the same would be left to her granddaughter, Merlita Herbon Espiritu, eldest daughter of petitioner Gabino Herbon; that Gonzalo's share in Lot 421 should be left to Ignacio; that the Pag-asa property has already been transferred to Merlita in accordance with the wishes of Gonzalo; that it was the Palad tradition that land inherited by members of the clan shall be disposed only to the clan and to no other person. On the other hand, petitioners presented a Deed of Absolute Sale dated December 9, 1957 executed by Jacinto selling his shares in Lot 421 to Gonzalo, Adelaida and Ignacio, as well as a Deed of Absolute Sale dated December 16, 1957 executed by sisters Modesta and Concordia selling their separate shares in Lot 421 in favor of Gonzalo, Adelaida and Ignacio. They submit that since the shares were acquired during the marriage of Gonzalo and Remedios, said shares form part of the conjugal property and Remedios was entitled to a part thereof as her conjugal share. Moreover, as surviving heir of Gonzalo, Remedios inherited Gonzalo's shares in Lot 421. As rebuttal witnesses, Bayani M. Palad and Maria A. Gallego testified that Benjamin, Gonzalo's son, paid for Jacinto's shares in the Deed of Absolute Sale dated December 9, 1957. Concordia Jornal, also a rebuttal witness, testified that she is the Concordia Nojedera mentioned in the TCT but disowned the Deed of Absolute Sale dated December 16, 1957 and her purported signature therein.

ISSUE: 1. Is there implied trust? 2. Can implied trust be proven by oral evidence? RULING
Art. 1448. There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.

The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase money resulting trust, the elements of which are: (a) an actual payment of money, property or services, or an equivalent, constituting valuable consideration; and (b) such consideration must be furnished by the alleged beneficiary of a resulting trust. As a rule, the burden of proving the existence of a trust is on the party asserting its existence, and such proof. While implied trusts may be proved by oral evidence, the evidence must be trustworthy and received by the courts with extreme caution, and should not be made to rest on loose, equivocal or indefinite declarations. Trustworthy evidence is required because oral evidence can easily be fabricated. Thus, in order to establish an implied trust in real property by parol evidence, the proof should be as fully convincing as if the acts giving rise to the trust obligation are proven by an authentic document. An implied trust, in fine, cannot be established upon vague and inconclusive proof. In the present case, the parol evidence offered to prove the existence of an implied trust is lean, frail and far from convincing. The testimonies of Bayani and Maria that Benjamin, instead of Gonzalo, paid for Jacinto's shares in Lot 421 are vague and contain no specificities. Their testimonies do not show that the payment was intended to establish a trust relationship. Said witnesses are complete strangers in so far as the intent of the parties to the contract is concerned. In this case, the Deed of Absolute Sale dated December 9, 1957 executed by Jacinto is clear and unequivocal as to who are the vendees, namely: Gonzalo, Adelaida and Ignacio. No amount of extrinsic aids are required and no further extraneous sources are necessary in order to ascertain the parties' intent, determinable as it is, from the document itself. The Court is thus convinced that the deed expresses truly the parties' intent as against the oral testimony that Benjamin paid the consideration of the sale. Without any doubt, oral testimony as to a certain fact, depending as it does exclusively on human memory, is not as reliable as written or documentary evidence. As Judge Limpkin of Georgia once said, "I would sooner trust the smallest slip of paper for truth than the strongest and most retentive memory ever bestowed on mortal man." Indeed, spoken words could be notoriously unreliable as against a written document that speaks a uniform language