Case Summary (G.R. No. 155650)
Petitioner
Manila International Airport Authority (MIAA), an instrumentality of the national government vested with corporate powers by its charter, charged with operating and administering NAIA’s lands, buildings, runways, equipment and related facilities.
Respondents
- Court of Appeals
- City of Parañaque
- City Mayor of Parañaque
- Sangguniang Panglungsod ng Parañaque
- City Assessor of Parañaque
- City Treasurer of Parañaque
Key Dates
• July 21, 1983 – Issuance of E.O. 903 establishing MIAA and transferring approximately 600 hectares to its ownership.
• March 21, 1997 – OGCC Opinion No. 061 interprets Local Government Code as withdrawing MIAA’s tax exemption.
• June 28, 2001 – City issues final notices of real estate tax delinquency for 1992–2001.
• October 1, 2001 – MIAA files prohibition and injunction petition before CA.
• October 5, 2001 & September 27, 2002 – CA dismisses petition and denies reconsideration.
• December 5, 2002 – MIAA files petition for review with Supreme Court.
• January 2003 – City posts and publishes auction notices.
• February 6–7, 2003 – MIAA secures SC temporary restraining order three hours after auction.
• March 29, 2005 – Oral arguments before SC.
Applicable Law
• 1987 Constitution (Art. X, Sec. 5; Art. VI, Sec. 28; Art. II, Sec. 25)
• E.O. 903 (MIAA Charter), as amended by E.O. 909 and E.O. 298
• Republic Act No. 7160 (Local Government Code of 1991), especially Sections 133(o), 193, 232, 234(a)
• Administrative Code of 1987, Sections 2(10), 2(13)
• Civil Code, Articles 419–422 (public dominion)
• Corporation Code, Sections 3, 87, 88 (stock vs. non-stock definitions)
• Public Land Law (C.A. 141), Sections 83, 88
Antecedents and Charter Provisions
E.O. 903 created MIAA as a separate, autonomous body corporate attached to the Department of Transportation and Communications. Its charter transferred airport lands, runways and improvements to MIAA’s name but prohibited their sale or other disposition without the President’s express approval. MIAA is empowered to exercise corporate powers—including eminent domain, contracting, borrowing subject to presidential consent—and is mandated to remit 20% of quarterly gross operating income to the National Treasury.
Real Estate Tax Assessment and City Action
In 1997 OGCC Opinion 061 held that the Local Government Code withdrew MIAA’s exemption from real estate tax under Section 21 of its charter. MIAA negotiated payment of assessed taxes but was later declared delinquent for 1992–2001 with a grand total of ₱624.5 million (tax and penalties). On June 17, 2001, the City issued notices and warrants of levy and threatened auction of airport properties.
Litigations in the Court of Appeals and Supreme Court
MIAA filed a petition for prohibition and injunction (CA-G.R. SP No. 66878) on October 1, 2001, but CA dismissed it for tardiness and denied reconsideration. The City posted auction notices in January 2003; MIAA secured an ex parte TRO from the Supreme Court on February 7, 2003, but after auction. The TRO was confirmed nunc pro tunc. After oral argument on March 29, 2005, parties submitted memoranda.
Issue
Whether MIAA’s airport lands and buildings are exempt from real estate tax under existing laws (1987 Constitution and Local Government Code), and, if exempt, whether all tax assessments and proceedings—including auction sale—are void.
Ruling
The Supreme Court, by majority, granted the petition. It declared MIAA exempt from local real estate tax and voided the City’s assessments, notices of delinquency, and the auction sale, except for portions of property leased to private taxable lessees.
Legal Rationale
- Instrumentality, Not GOCC: Under the Administrative Code, MIAA is an instrumentality of the national government vested with corporate powers, not a government-owned or controlled corporation (which must be organized as a stock or non-stock corporation under the Corporate Code). As an instrumentality, MIAA shares the Republic’s immunity from local taxation under LGC Section 133(o).
- Public Dominion: Airport lands are devoted to public use and are “ports … constructed by the State,” hence properties of public dominion (Civil Code Art. 420) and owned by the Republic, making them outside the commerce of man and inalienable without presidential proclamation withdrawing public use (Public Land Law Secs. 83, 88; Administrative Code Sec. 14).
- Beneficial Ownership: MIAA holds title in trust for the Republic (Administrative Code Sec. 48). Only the President may authorize sale or disposition
Case Syllabus (G.R. No. 155650)
Antecedents
- The Manila International Airport Authority (MIAA) operates the Ninoy Aquino International Airport Complex in Parañaque under Executive Order No. 903 (Revised Charter), issued 21 July 1983 and amended by E.O. Nos. 909 and 298.
- Approximately 600 hectares of airport land, improvements and equipment were transferred from the Bureau of Air Transportation to MIAA; no portion may be sold or otherwise disposed without Presidential approval.
- Section 11 of the Charter requires MIAA to remit 20% of its gross operating income (excluding utilities and terminal fees) quarterly to the National Treasury for other airport maintenance.
Real Estate Tax Assessment and Delinquency
- On 21 March 1997, the Office of the Government Corporate Counsel (OGCC) Opinion No. 061 held that the Local Government Code of 1991 withdrew MIAA’s exemption from local real estate tax.
- MIAA negotiated payment with Parañaque City and paid taxes for 1992–1997 (totaling ₱32,931,623.75), but did not settle 1998–2001.
- Final Notices of Delinquency dated 28 June 2001 assessed MIAA’s tax arrears for 1992–2001: ₱392,435,861.95 in taxes plus ₱232,070,863.47 in penalties (grand total ₱624,506,725.42).
Proceedings in the Court of Appeals
- MIAA filed an original petition for prohibition and injunction (CA-G.R. SP No. 66878) on 1 October 2001 to restrain tax imposition, levy and auction; sought preliminary injunction or TRO.
- On 5 October 2001, the Court of Appeals dismissed the petition as untimely (filed beyond the 60-day reglementary period); motions for reconsideration denied on 27 September 2002.
- MIAA filed a petition for review on certiorari to the Supreme Court on 5 December 2002.
Supreme Court TRO Proceedings
- Parañaque City posted and published auction notices for MIAA lands and buildings on 3 and 10 January 2003, scheduling sale for 7 February 2003.
- On 6 February 2003, MIAA filed an urgent ex parte motion for a TRO in the Supreme Court to stop the auction.
- This Court issued a TRO on 7 February 2003 (effective immediately), but it reached respondents only at 1:25 p.m. after the auction had concluded.
- On 10 February 2003, the Supreme Court confirmed the TRO nunc pro tunc.
Parties’ Contentions
- MIAA’s position:
• The Republic remains owner of airport land; MIAA holds title in trust.
• Airport lands and buildings are devoted to public use/service and t