MANILA INTERNATIONAL AIRPORT AUTHORITY VS.

COURT OF APPEALS, CITY OF

PARAÑAQUE, et al

[G.R. NO. 155650. July 20, 2006]

Facts:
Petitioner Manila International Airport Authority (MIAA) operates the Ninoy Aquino
International Airport (NAIA) Complex in Parañaque City under Executive Order No. 903, known as
the Revised Charter of the Manila International Airport Authority. As operator of the international
airport, it administers the land, improvements and equipment within the NAIA Complex. The MIAA
Charter transferred to MIAA approximately 600 hectares of land, including the runways and buildings
("Airport Lands and Buildings").
In 1997 the Office of the Government Corporate Counsel (OGCC) issued an opinion which
opined that the Local Government Code of 1991 withdraws the exemption granted to MIAA from real
estate tax under Section 21 of its charter. MIAA in 2001, received Final Notices of Real Estate Tax
Delinquency from the City of Parañaque for the taxable years 1992 to 2001. The City thereafter, issued
notices of levy and warrants of levy on the Airport Lands and Buildings. MIAA then filed with the CA
an original petition for prohibition and injunction, with prayer for preliminary injunction or temporary
restraining order. This sought to restrain the City of Parañaque from imposing real estate tax on, levying
against, and auctioning for public sale the Airport Lands and Buildings.
MIAA points out that the real owner of the Airport Lands and Buildings is the Republic of the
Philippines for these are devoted for the benefit of the general public. The Airport Lands and Buildings
are thus inalienable and are not subject to real estate tax by local governments.
Issue:
Whether or not the Airport Lands and Buildings are inalienable thus not subject to real estate tax.
Ruling:

Yes. MIAA is an instrumentality of the National Government and real properties of MIAA
are owned by the Republic of the Philippines and thus exempt from real estate tax. The Airport Lands
and Buildings of MIAA are property of public dominion and therefore owned by the State or the
Republic of the Philippines. The Civil Code provides:

ARTICLE 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;

Properties of public dominion mentioned in Article 420 of the Civil Code, like "roads, canals,
rivers, torrents, ports and bridges constructed by the State," are owned by the State. The term
"ports" includes seaports and airports. The MIAA Airport Lands and Buildings constitute a "port"
constructed by the State. Under this provision, MIAA Airport Lands and Buildings are properties of
public dominion and thus owned by the State or the Republic of the Philippines. The Airport Lands and
Buildings are devoted to public use because they are used by the public for international and
domestic travel and transportation.

Article 420 of the Civil Code defines property of public dominion as one "intended for public
use." Even if the government collects toll fees, the road is still "intended for public use" if anyone can
use the road under the same terms and conditions as the rest of the public. The Airport Lands and
Buildings of MIAA, which its Charter calls the "principal airport of the Philippines for both international
and domestic air traffic,” are properties of public dominion because they are intended for public use. As
properties of public dominion, they indisputably belong to the State or the Republic of the
Philippines.

The Court also ruled that property of public dominion, being outside the commerce of man,
cannot be the subject of an auction sale. Being for public use, they are not subject to levy, encumbrance
or disposition through public or private sale. Any encumbrance, levy on execution or auction sale of any
property of public dominion is void for being contrary to public policy. Essential public services will
stop if properties of public dominion are subject to encumbrances, foreclosures and auction sale.

Before MIAA can encumber the Airport Lands and Buildings, the President must first withdraw
from public use the Airport Lands and Buildings. Thus, unless the President issues a proclamation
withdrawing the Airport Lands and Buildings from public use, these properties remain properties of
public dominion and are inalienable. Since the Airport Lands and Buildings are inalienable in their
present status as properties of public dominion, they are not subject to levy on execution or foreclosure
sale.