Hannah Marie R.

Lomtong JD 1-5

Abra Valley College, Inc. vs. Aquino

GR No. L-39086 June 15, 1988

FACTS:
Petitioner, Abra Valley College, Inc., is an educational corporation duly incorporated
with the Securities and Exchange Commission in 1948.
The lot and building was auctioned up for sale on July 8, 1972 after being issued and
served the said Notices of Seizure and Sale for non-payment of real estate taxes amounting to
₱5,140.31.
Municipal Mayor, Dr. Millare, offered the highest bid of ₱6,000, to which he won the
bidding and was thus issued the Certi cate of Sale. He led a Motion to Dismiss the
complaint but respondent Judge, Hon. Aquino, ordered the delivery of the proceeds of the
sale. Millare complied with the Order, depositing the proceeds to the trial court.
The trial court found, aside from the Stipulation of Facts, that the Director of the
school, along with his family, uses the room in the second oor as their primary residence.
Provincial Fiscal Hon. Solomon led a Memorandum stating that “based on evidence… the school
building and lot used for educational purposes of Abra Valley College, Inc., are exempted from payment of
taxes.” The trial court ruled for the government due to the residential use of the second oor.
Thus, this instant petition for review on certiorari with preliminary injunction before
this Court.
Petitioner contends that the primary use of the building, and not the incidental use,
determines the exemption from property taxes under the Art VI, Sec 22(3) of the 1935
Constitution, as well as the Sec 54, Par. C, of the Assessment Law.
But the private respondents maintain that the college, aside from being used for
educational purposes, is being used as the Director and his family’s permanent residence, as
well as the rst oor being used for commercial purposes by Northern Marketing
Corporation.

ISSUE:
Whether or not the lot and building in question are used exclusively for educational
purposes.

RULING:
While this Court allows a more liberal and non-restrictive interpretation of the phrase
“exclusively used for educational purposes” as provided for in Article VI, Sec 22(3) of the 1935
Constitution (now Art VI, Sec 28(3) of the 1987 Constitution), emphasis has always been
made that exemption extends to facilities which are incidental to and necessary for the
accomplishment of the main purposes. Thus, while the use of the second oor of the main
building for residential purposes of the Director and his family, may nd justi cation under
the concept of incidental use, the lease of the rst oor thereof to the Northern Marketing
Corporation cannot be considered incidental to the purpose of education.
Under the 1935 Constitution, the trial court correctly arrived at the conclusion that
the school building as well as the lot where it is built, should be taxed, not because the second
oor of the same is being used for residential purposes, but because the rst oor is being
used for commercial purposes. However, since only a portion is used for purposes of
commerce, it is only fair that half of the assessed tax be returned to the school involved.
The decision of the Court of First Instance of Abra, Branch I, is hereby AFFIRMED
subject to the modi cation that half of the assessed tax be returned to the petitioner.

CONSTITUTIONAL LAW ATTY. CHARLES PUNO

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