Apostolic Prefect Of Mountain Province V City Treasurer Of Baguio City.docx

Apostolic Prefect of Mountain Province v City Treasurer of Baguio City (1941)

Apostolic Prefect of Mountain Province v City Treasurer of Baguio City GR No 47252, April 18, 1941 FACTS: The Apostolic Prefect is a corporation sole, of religious character, organized under the Philippine laws, and with residence in Baguio. The City imposed a special assessment against properties within its territorial jurisdiction, including those of the Apostolic Prefect, which benefits from its drainage and sewerage system. The Apostolic Prefect contends that its properties should be free from tax. ISSUE: Is the Apostolic Prefect exempt from paying? RULING: No, it is liable. In its broad meaning, tax includes both general taxes and special assessment. Yet actually, there is a recognized distinction between them in that assessment is confined to local impositions upon property for the payment of the cost of public improvements in its immediate vicinity and levied with reference to special benefits to the property assessed. A special assessment is not, strictly speaking, a tax; and neither the decree nor the Constitution exempt the Apostolic Prefect from payment of said special assessment. Furthermore, arguendo that exemption may encompass such assessment, the Apostolic Prefect cannot claim exemption as it has not proven the property in question is used exclusively for religious purposes; but that it appears that the same is being used to other non-religious purposes. Thus, the Apostolic Prefect is required to pay the special assessment.

In 1937, an ordinance (Ordinance No. 137: Special Assessment List, City of Baguio) was passed in the City of Baguio. The said ordinance sought to assess properties of property owners within the defined city limits. The Apostolic Prefect of Mt. Province (APMP), on the other hand, is a religious corporation duly established under Philippine laws. Pursuant to the ordinance, it paid a total amount of P1,019.37 in protest. APMP later averred that it should be exempt from the said special contribution since as a religious institution, it has a constitutionally guaranteed right not to be taxed including its properties. ISSUE: Whether or not APMP is exempt from taxes. HELD: No. In the first place, the ordinance was in the nature of an assessment and not a taxation. The test of exemption from taxation is the use of the property for purposes mentioned in the Constitution. Based on Justice Cooley’s words: While the word ‘tax’ in its broad meaning, includes both general taxes and special assessments, and in a general sense a tax is an assessment, and an assessment is a tax, yet there is a recognized distinction between them in that assessment is confined to local impositions upon property for the payment of the cost of public improvements in its immediate vicinity and levied with reference to special benefits to the property assessed. The differences between a special assessment and a tax are that (1) a special assessment can be levied only on land; (2) a special assessment cannot (at least in most states) be made a personal liability of the person assessed; (3) a special assessment is based wholly on benefits; and (4) a special assessment is exceptional both as to time and locality. The imposition of a charge on all property, real and personal, in a prescribed area, is a tax and not an assessment, although the purpose is to make a local improvement on a street or highway. A charge imposed only on property owners benefited is a special assessment rather than a tax notwithstanding the statute calls it a tax. In the case at bar, the Prefect cannot claim exemption because the assessment is not taxation per se but rather a system for the benefits of the inhabitants of the city.