National Development Company v. Province Of Nueva Ecija

RELOVA, J.:

On October 16, 1972, the Province of Nueva Ecija a filed with the then Court of First Instance of Nueva Ecija complaint against the National Development Company (NDC, for short) for the collection of real estate taxes. On April 17, 1975, the trial court rendered judgment in favor of the plaintiff and against the defendant ordering the latter "to pay the sum of P32,402.94, representing the unpaid real estate taxes and penalties from the fourth quarter of 1970 up to the year 1972, and to continue paying up to the present, and to pay the costs. "

(p. 35, Record on Appeal) The NDC, not satisfied with the aforementioned judgment, appealed on the following assignment of errors: têñ.£îhqw⣠1. The trial court erred in holding that the defendant-appellant National Development Company is liable for real estate taxes on the land subject of the case.

2. The trial court erred in not ruling that plaintiff-appellee, Province of Nueva Ecija should refund to defendant-appellant National Development Company the amount paid as real estate taxes for the land subject matter of this case from 1962 to 1970. Defendant-appellant NDC submits that it is a government-owned and controlled corporation duly organized and existing by virtue of Commonwealth Act No. 182, as amended, and Executive Order No. 399, otherwise known as the Uniform Charter for Government Corporations; that under Section 2 of said Act, fifty-one per centum of the capital stock shall be subscribed by the government of the Commonwealth of the Philippines and the remainder thereof may be offered to the provincial, municipal and city governments; and, that the NDC being owned by the Republic of the Philippines, it follows that its real properties, particularly those situated at Gabaldon, Nueva Ecija, are exempt from payment of real estate taxes.

In support of this contention, defendant-appellant cited the case of Board of Assessment Appeals of Laguna vs. Court of Tax Appeals and NAWASA, 8 SCRA 225, where the Court ruled that "Section 3(a) of Commonwealth Act No. 470 makes no distinction between property held in a sovereign, government or political capacity and those possessed in a private, proprietary or patrimonial character. ... Section 1 of Republic Act No. 104 only refers to the payment by corporations, agencies, or instrumentalities owned or controlled by the government, of duties, taxes, fees and other charges upon "transactions, business industry, sale, or income,"

but does not include taxes on property like real estate taxes. We find no merit in the appeal. 1.

Commonwealth Act No. 182 which created the NDC contains no provision exempting it from the payment of real estate tax on properties it may acquire. Subject properties are situated in the town of Gabaldon, Nueva Ecija, and are more particularly described as follows: têñ.£îhqw⣠Lot No. Survey AREA KIND LOCATION Psu-3607 9181.6113 riceland Sabani Estate pasture Sabani Estate residential Sabani Estate commercial Sabani Estate school site Sabani Estate etc. Sabani Estate Psu-36074 9271.6113 riceland Sabani Estate pasture Sabani Estate residential Sabani Estate commercial Sabani Estate school site Sabani Estate etc.

Sabani Estate Psu-33074 9269.1580 riceland Sabani Estate pasture Sabani Estate residential Sabani Estate commercial Sabani Estate school site Sabani Estate etc. Sabani Estate (p. 33, Record on Appeal) These properties are not devoted to public use but were acquired for resale to qualified persons.

They were developed for the purpose of reselling the same for consideration to qualified tenants, Thus, defendant-appellant is not exempt from payment of real estate tax over said properties. There is justification in the contention of plaintiff-appellee that - têñ.£îhqwâ£