Petitioner:

Abra Valley College Inc represented by Pedro Borgonia

Respondent:

Hon. Juan P. Aquino CFI Abra Judge

Provincial and Municipal Treasurer of Bangued Abra

Heirs of Paterno Millare

FACTS

This case involves a petition for review on certiorari of the decision of the CFI Abra Branch I in a civil case
involving the herein petitioner Abra Valley College Inc. Represented by Pedro Borgonia versus the
Provincial and Municipal Treasurers of Bangued Abra and one Paterno Millare.

Abra Valley College is an educational corporation and institution with government recognized offerings
of primary, high school and college courses.

It filed a complaint to annul and declare void the Notices of Seizure and Sale to its lot and building for
nonpayment of real estate taxes and penalties. Said notices were issued by the Provincial and Municipal
Treasurers for the satisfaction of the said taxes thereon and for the sale at public auction of said school
lot and building.

Dr. Paterno Millare, then municipal Mayor of Bangued, Abra offered the highest bid hence later he was
issued a certificate of sale. He moved to file a motion to dismiss the complaint filed by the school, then
13 days after followed by the Provincial and Municipal Treasurers answer to the said complaint.

After trial the CFI Abra through Judge Juan Aquino ruled on Governments favor. According to the trial
court the subject property is not exempt from taxes due to the residential use of the second floor by the
college director and his family members and the commercial use of the first floor.

The school instead of availing the 10 days to perfect its appeal granted by the trial court, moved to file
the instant petition for review on certiorari before this court with prayer for preliminary injunction.

ISSUE:

Whether or not the subject property in this case is exclusively used for educational purposes hence
should be exempt from taxes.
RULING:

According to the SC the Trail court is correct in arriving at the conclusion that the school building as well
as the lot where it is built, should be taxed.

But not because the second floor of the same building is being used by the director and his family for
residential purposes but because the first floor thereof was being used for commercial purposes.

Since only a portion is used for purposes of commerce, half of the assessed tax should be returned to the
school.

The phrase "exclusively used for educational purposes" has been clarified by the court in a number of
cases.

The primary use of a property for educational purposes determines its exemption from property taxes.
Incidental use, which is reasonably necessary for the accomplishment of the main purpose is also
considered. However, the use of the property for commercial purposes is not contemplated by law or
jurisprudence.

Thus, while the use of the second floor of the main building in the case at bar for residential purposes
of the Director and his family, may find justification under the concept of incidental use, which is
complimentary to the main or primary purpose—educational, the lease of the first floor thereof to the
Northern Marketing Corporation cannot by any stretch of the imagination be considered incidental to
the purpose of education.

PREMISES CONSIDERED, the decision of the Court of First Instance of Abra, Branch I, is hereby
AFFIRMED subject to the modification that half of the assessed tax be returned to the petitioner.

SO ORDERED.