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Supreme Court of the Philippines

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477 Phil. 141

EN BANC
G.R. No. 144104, June 29, 2004
LUNG CENTER OF THE PHILIPPINES, PETITIONER,
VS. QUEZON CITY AND CONSTANTINO P. ROSAS, IN
HIS CAPACITY AS CITY ASSESSOR OF QUEZON CITY,
RESPONDENTS.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court,
as amended, of the Decision[1] dated July 17, 2000 of the Court of Appeals in
CA-G.R. SP No. 57014 which affirmed the decision of the Central Board of
Assessment Appeals holding that the lot owned by the petitioner and its
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hospital building constructed thereon are subject to assessment for purposes of

real property tax.
The Antecedents
The petitioner Lung Center of the Philippines is a non-stock and non-profit
entity established on January 16, 1981 by virtue of Presidential Decree No.
1823.[2] It is the registered owner of a parcel of land, particularly described as
Lot No. RP-3-B-3A-1-B-1, SWO-04-000495, located at Quezon Avenue corner
Elliptical Road, Central District, Quezon City. The lot has an area of 121,463
square meters and is covered by Transfer Certificate of Title (TCT) No. 261320
of the Registry of Deeds of Quezon City. Erected in the middle of the
aforesaid lot is a hospital known as the Lung Center of the Philippines. A big
space at the ground floor is being leased to private parties, for canteen and
small store spaces, and to medical or professional practitioners who use the
same as their private clinics for their patients whom they charge for their
professional services. Almost one-half of the entire area on the left side of the
building along Quezon Avenue is vacant and idle, while a big portion on the
right side, at the corner of Quezon Avenue and Elliptical Road, is being leased
for commercial purposes to a private enterprise known as the Elliptical Orchids
and Garden Center.
The petitioner accepts paying and non-paying patients. It also renders medical
services to out-patients, both paying and non-paying. Aside from its income
from paying patients, the petitioner receives annual subsidies from the
government.
On June 7, 1993, both the land and the hospital building of the petitioner were
assessed for real property taxes in the amount of P4,554,860 by the City
Assessor of Quezon City.[3] Accordingly, Tax Declaration Nos. C-021-01226
(16-2518) and C-021-01231 (15-2518-A) were issued for the land and the
hospital building, respectively.[4] On August 25, 1993, the petitioner filed a
Claim for Exemption[5] from real property taxes with the City Assessor,
predicated on its claim that it is a charitable institution. The petitioners request
was denied, and a petition was, thereafter, filed before the Local Board of
Assessment Appeals of Quezon City (QC-LBAA, for brevity) for the reversal
of the resolution of the City Assessor. The petitioner alleged that under Section
28, paragraph 3 of the 1987 Constitution, the property is exempt from real
property taxes. It averred that a minimum of 60% of its hospital beds are
exclusively used for charity patients and that the major thrust of its hospital
operation is to serve charity patients. The petitioner contends that it is a
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charitable institution and, as such, is exempt from real property taxes. The QCLBAA rendered judgment dismissing the petition and holding the petitioner
liable for real property taxes.[6]
The QC-LBAAs decision was, likewise, affirmed on appeal by the Central
Board of Assessment Appeals of Quezon City (CBAA, for brevity)[7] which
ruled that the petitioner was not a charitable institution and that its real
properties were not actually, directly and exclusively used for charitable
purposes; hence, it was not entitled to real property tax exemption under the
constitution and the law. The petitioner sought relief from the Court of
Appeals, which rendered judgment affirming the decision of the CBAA.[8]
Undaunted, the petitioner filed its petition in this Court contending that:
A. THE COURT A QUO ERRED IN DECLARING
PETITIONER AS NOT ENTITLED TO REALTY TAX
EXEMPTIONS ON THE GROUND THAT ITS LAND,
BUILDING AND IMPROVEMENTS, SUBJECT OF
ASSESSMENT, ARE NOT ACTUALLY, DIRECTLY AND
EXCLUSIVELY
DEVOTED
FOR
CHARITABLE
PURPOSES.
B. WHILE PETITIONER IS NOT DECLARED AS REAL
PROPERTY TAX EXEMPT UNDER ITS CHARTER, PD
1823, SAID EXEMPTION MAY NEVERTHELESS BE
EXTENDED UPON PROPER APPLICATION.
The petitioner avers that it is a charitable institution within the context of
Section 28(3), Article VI of the 1987 Constitution. It asserts that its character as
a charitable institution is not altered by the fact that it admits paying patients
and renders medical services to them, leases portions of the land to private
parties, and rents out portions of the hospital to private medical practitioners
from which it derives income to be used for operational expenses. The
petitioner points out that for the years 1995 to 1999, 100% of its out-patients
were charity patients and of the hospitals 282-bed capacity, 60% thereof, or 170
beds, is allotted to charity patients. It asserts that the fact that it receives
subsidies from the government attests to its character as a charitable institution.
It contends that the exclusivity required in the Constitution does not
necessarily mean solely. Hence, even if a portion of its real estate is leased
out to private individuals from whom it derives income, it does not lose its
character as a charitable institution, and its exemption from the payment of real
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estate taxes on its real property. The petitioner cited our ruling in Herrera v. QCBAA[9] to bolster its pose. The petitioner further contends that even if P.D.
No. 1823 does not exempt it from the payment of real estate taxes, it is not
precluded from seeking tax exemption under the 1987 Constitution.
In their comment on the petition, the respondents aver that the petitioner is not
a charitable entity. The petitioners real property is not exempt from the
payment of real estate taxes under P.D. No. 1823 and even under the 1987
Constitution because it failed to prove that it is a charitable institution and that
the said property is actually, directly and exclusively used for charitable
purposes. The respondents noted that in a newspaper report, it appears that
graft charges were filed with the Sandiganbayan against the director of the
petitioner, its administrative officer, and Zenaida Rivera, the proprietress of the
Elliptical Orchids and Garden Center, for entering into a lease contract over
7,663.13 square meters of the property in 1990 for only P20,000 a month,
when the monthly rental should be P357,000 a month as determined by the
Commission on Audit; and that instead of complying with the directive of the
COA for the cancellation of the contract for being grossly prejudicial to the
government, the petitioner renewed the same on March 13, 1995 for a monthly
rental of only P24,000. They assert that the petitioner uses the subsidies
granted by the government for charity patients and uses the rest of its income
from the property for the benefit of paying patients, among other purposes.
They aver that the petitioner failed to adduce substantial evidence that 100% of
its out-patients and 170 beds in the hospital are reserved for indigent patients.
The respondents further assert, thus:
13. That the claims/allegations of the Petitioner LCP do not speak
well of its record of service. That before a patient is admitted
for treatment in the Center, first impression is that it is paypatient and required to pay a certain amount as deposit. That
even if a patient is living below the poverty line, he is charged
with high hospital bills. And, without these bills being first
settled, the poor patient cannot be allowed to leave the hospital
or be discharged without first paying the hospital bills or issue a
promissory note guaranteed and indorsed by an influential
agency or person known only to the Center; that even the
remains of deceased poor patients suffered the same fate.
Moreover, before a patient is admitted for treatment as free or
charity patient, one must undergo a series of interviews and
must submit all the requirements needed by the Center, usually
accompanied by endorsement by an influential agency or person
known only to the Center. These facts were heard and admitted
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by the Petitioner LCP during the hearings before the Honorable

QC-BAA and Honorable CBAA. These are the reasons of
indigent patients, instead of seeking treatment with the Center,
they prefer to be treated at the Quezon Institute. Can such
practice by the Center be called charitable?[10]
The Issues
The issues for resolution are the following: (a) whether the petitioner is a
charitable institution within the context of Presidential Decree No. 1823 and
the 1973 and 1987 Constitutions and Section 234(b) of Republic Act No. 7160;
and (b) whether the real properties of the petitioner are exempt from real
property taxes.
The Courts Ruling
The petition is partially granted.
On the first issue, we hold that the petitioner is a charitable institution within
the context of the 1973 and 1987 Constitutions. To determine whether an
enterprise is a charitable institution/entity or not, the elements which should be
considered include the statute creating the enterprise, its corporate purposes, its
constitution and by-laws, the methods of administration, the nature of the
actual work performed, the character of the services rendered, the
indefiniteness of the beneficiaries, and the use and occupation of the
properties.[11]
In the legal sense, a charity may be fully defined as a gift, to be applied
consistently with existing laws, for the benefit of an indefinite number of
persons, either by bringing their minds and hearts under the influence of
education or religion, by assisting them to establish themselves in life or
otherwise lessening the burden of government.[12] It may be applied to almost
anything that tend to promote the well-doing and well-being of social man. It
embraces the improvement and promotion of the happiness of man.[13] The
word charitable is not restricted to relief of the poor or sick.[14] The test of a
charity and a charitable organization are in law the same. The test whether an
enterprise is charitable or not is whether it exists to carry out a purpose
reorganized in law as charitable or whether it is maintained for gain, profit, or
private advantage.
Under P.D. No. 1823, the petitioner is a non-profit and non-stock corporation
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which, subject to the provisions of the decree, is to be administered by the

Office of the President of the Philippines with the Ministry of Health and the
Ministry of Human Settlements. It was organized for the welfare and benefit of
the Filipino people principally to help combat the high incidence of lung and
pulmonary diseases in the Philippines. The raison detre for the creation of the
petitioner is stated in the decree, viz:
Whereas, for decades, respiratory diseases have been a priority
concern, having been the leading cause of illness and death in the
Philippines, comprising more than 45% of the total annual deaths
from all causes, thus, exacting a tremendous toll on human resources,
which ailments are likely to increase and degenerate into serious lung
diseases on account of unabated pollution, industrialization and
unchecked cigarette smoking in the country;
Whereas, the more common lung diseases are, to a great extent,
preventable, and curable with early and adequate medical care,
immunization and through prompt and intensive prevention and
health education programs;
Whereas, there is an urgent need to consolidate and reinforce existing
programs, strategies and efforts at preventing, treating and
rehabilitating people affected by lung diseases, and to undertake
research and training on the cure and prevention of lung diseases,
through a Lung Center which will house and nurture the above and
related activities and provide tertiary-level care for more difficult and
problematical cases;
Whereas, to achieve this purpose, the Government intends to provide
material and financial support towards the establishment and
maintenance of a Lung Center for the welfare and benefit of the
Filipino people.[15]
The purposes for which the petitioner was created are spelled out in its Articles
of Incorporation, thus:
SECOND: That the purposes for which such corporation is formed
are as follows:
1. To construct, establish, equip, maintain, administer and conduct
an integrated medical institution which shall specialize in the
treatment, care, rehabilitation and/or relief of lung and allied
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diseases in line with the concern of the government to assist

and provide material and financial support in the establishment
and maintenance of a lung center primarily to benefit the people
of the Philippines and in pursuance of the policy of the State to
secure the well-being of the people by providing them
specialized health and medical services and by minimizing the
incidence of lung diseases in the country and elsewhere.
2. To promote the noble undertaking of scientific research related
to the prevention of lung or pulmonary ailments and the care
of lung patients, including the holding of a series of relevant
congresses, conventions, seminars and conferences;
3. To stimulate and, whenever possible, underwrite scientific
researches on the biological, demographic, social, economic,
eugenic and physiological aspects of lung or pulmonary diseases
and their control; and to collect and publish the findings of
such research for public consumption;
4. To facilitate the dissemination of ideas and public acceptance of
information on lung consciousness or awareness, and the
development of fact-finding, information and reporting
facilities for and in aid of the general purposes or objects
aforesaid, especially in human lung requirements, general health
and physical fitness, and other relevant or related fields;
5. To encourage the training of physicians, nurses, health officers,
social workers and medical and technical personnel in the
practical and scientific implementation of services to lung
patients;
6. To assist universities and research institutions in their studies
about lung diseases, to encourage advanced training in matters
of the lung and related fields and to support educational
programs of value to general health;
7. To encourage the formation of other organizations on the
national, provincial and/or city and local levels; and to
coordinate their various efforts and activities for the purpose of
achieving a more effective programmatic approach on the
common problems relative to the objectives enumerated herein;

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8. To seek and obtain assistance in any form from both

international and local foundations and organizations; and to
administer grants and funds that may be given to the
organization;
9. To extend, whenever possible and expedient, medical services to
the public and, in general, to promote and protect the health of
the masses of our people, which has long been recognized as an
economic asset and a social blessing;
10. To help prevent, relieve and alleviate the lung or pulmonary
afflictions and maladies of the people in any and all walks of
life, including those who are poor and needy, all without regard
to or discrimination, because of race, creed, color or political
belief of the persons helped; and to enable them to obtain
treatment when such disorders occur;
11. To participate, as circumstances may warrant, in any activity
designed and carried on to promote the general health of the
community;
12. To acquire and/or borrow funds and to own all funds or
equipment, educational materials and supplies by purchase,
donation, or otherwise and to dispose of and distribute the
same in such manner, and, on such basis as the Center shall,
from time to time, deem proper and best, under the particular
circumstances, to serve its general and non-profit purposes and
objectives;
13. To buy, purchase, acquire, own, lease, hold, sell, exchange,
transfer and dispose of properties, whether real or personal, for
purposes herein mentioned; and
14. To do everything necessary, proper, advisable or convenient for
the accomplishment of any of the powers herein set forth and
to do every other act and thing incidental thereto or connected
therewith.[16]
Hence, the medical services of the petitioner are to be rendered to the public in
general in any and all walks of life including those who are poor and the needy
without discrimination. After all, any person, the rich as well as the poor, may
fall sick or be injured or wounded and become a subject of charity.[17]
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As a general principle, a charitable institution does not lose its character as such
and its exemption from taxes simply because it derives income from paying
patients, whether out-patient, or confined in the hospital, or receives subsidies
from the government, so long as the money received is devoted or used
altogether to the charitable object which it is intended to achieve; and no money
inures to the private benefit of the persons managing or operating the
institution.[18] In Congregational Sunday School, etc. v. Board of Review,[19] the State
Supreme Court of Illinois held, thus:
[A]n institution does not lose its charitable character, and
consequent exemption from taxation, by reason of the fact that those
recipients of its benefits who are able to pay are required to do so,
where no profit is made by the institution and the amounts so
received are applied in furthering its charitable purposes, and those
benefits are refused to none on account of inability to pay therefor.
The fundamental ground upon which all exemptions in favor of
charitable institutions are based is the benefit conferred upon the
public by them, and a consequent relief, to some extent, of the
burden upon the state to care for and advance the interests of its
citizens.[20]
As aptly stated by the State Supreme Court of South Dakota in Lutheran Hospital
Association of South Dakota v. Baker:[21]
[T]he fact that paying patients are taken, the profits derived from
attendance upon these patients being exclusively devoted to the
maintenance of the charity, seems rather to enhance the usefulness
of the institution to the poor; for it is a matter of common
observation amongst those who have gone about at all amongst the
suffering classes, that the deserving poor can with difficulty be
persuaded to enter an asylum of any kind confined to the reception
of objects of charity; and that their honest pride is much less
wounded by being placed in an institution in which paying patients
are also received. The fact of receiving money from some of the
patients does not, we think, at all impair the character of the charity,
so long as the money thus received is devoted altogether to the
charitable object which the institution is intended to further.[22]
The money received by the petitioner becomes a part of the trust fund and
must be devoted to public trust purposes and cannot be diverted to private
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profit or benefit.[23]
Under P.D. No. 1823, the petitioner is entitled to receive donations. The
petitioner does not lose its character as a charitable institution simply because
the gift or donation is in the form of subsidies granted by the government. As
held by the State Supreme Court of Utah in Yorgason v. County Board of
Equalization of Salt Lake County:[24]
Second, the government subsidy payments are provided to the
project. Thus, those payments are like a gift or donation of any other
kind except they come from the government. In both Intermountain
Health Care and the present case, the crux is the presence or absence
of material reciprocity. It is entirely irrelevant to this analysis that the
government, rather than a private benefactor, chose to make up the
deficit resulting from the exchange between St. Marks Tower and the
tenants by making a contribution to the landlord, just as it would
have been irrelevant in Intermountain Health Care if the patients
income supplements had come from private individuals rather than
the government.
Therefore, the fact that subsidization of part of the cost of
furnishing such housing is by the government rather than private
charitable contributions does not dictate the denial of a charitable
exemption if the facts otherwise support such an exemption, as they
do here.[25]
In this case, the petitioner adduced substantial evidence that it spent its income,
including the subsidies from the government for 1991 and 1992 for its patients
and for the operation of the hospital. It even incurred a net loss in 1991 and
1992 from its operations.
Even as we find that the petitioner is a charitable institution, we hold, anent the
second issue, that those portions of its real property that are leased to private
entities are not exempt from real property taxes as these are not actually, directly
and exclusively used for charitable purposes.
The settled rule in this jurisdiction is that laws granting exemption from tax are
construed strictissimi juris against the taxpayer and liberally in favor of the
taxing power. Taxation is the rule and exemption is the exception. The effect of
an exemption is equivalent to an appropriation. Hence, a claim for exemption
from tax payments must be clearly shown and based on language in the law too
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plain to be mistaken.[26] As held in Salvation Army v. Hoehn:[27]

An intention on the part of the legislature to grant an exemption
from the taxing power of the state will never be implied from
language which will admit of any other reasonable construction. Such
an intention must be expressed in clear and unmistakable terms, or
must appear by necessary implication from the language used, for it is
a well settled principle that, when a special privilege or exemption is
claimed under a statute, charter or act of incorporation, it is to be
construed strictly against the property owner and in favor of the
public. This principle applies with peculiar force to a claim of
exemption from taxation . [28]
Section 2 of Presidential Decree No. 1823, relied upon by the petitioner,
specifically provides that the petitioner shall enjoy the tax exemptions and
privileges:
SEC. 2. TAX EXEMPTIONS AND PRIVILEGES. Being a nonprofit, non-stock corporation organized primarily to help combat the
high incidence of lung and pulmonary diseases in the Philippines, all
donations, contributions, endowments and equipment and supplies to
be imported by authorized entities or persons and by the Board of
Trustees of the Lung Center of the Philippines, Inc., for the actual
use and benefit of the Lung Center, shall be exempt from income
and gift taxes, the same further deductible in full for the purpose of
determining the maximum deductible amount under Section 30,
paragraph (h), of the National Internal Revenue Code, as amended.
The Lung Center of the Philippines shall be exempt from the
payment of taxes, charges and fees imposed by the Government or
any political subdivision or instrumentality thereof with respect to
equipment purchases made by, or for the Lung Center.[29]
It is plain as day that under the decree, the petitioner does not enjoy any
property tax exemption privileges for its real properties as well as the building
constructed thereon. If the intentions were otherwise, the same should have
been among the enumeration of tax exempt privileges under Section 2:
It is a settled rule of statutory construction that the express mention
of one person, thing, or consequence implies the exclusion of all
others. The rule is expressed in the familiar maxim, expressio unius est
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exclusio alterius.
The rule of expressio unius est exclusio alterius is formulated in a
number of ways. One variation of the rule is principle that what is
expressed puts an end to that which is implied. Expressium facit cessare
tacitum. Thus, where a statute, by its terms, is expressly limited to
certain matters, it may not, by interpretation or construction, be
extended to other matters.
...
The rule of expressio unius est exclusio alterius and its variations are
canons of restrictive interpretation. They are based on the rules of
logic and the natural workings of the human mind. They are
predicated upon ones own voluntary act and not upon that of
others. They proceed from the premise that the legislature would not
have made specified enumeration in a statute had the intention been
not to restrict its meaning and confine its terms to those expressly
mentioned.[30]
The exemption must not be so enlarged by construction since the reasonable
presumption is that the State has granted in express terms all it intended to
grant at all, and that unless the privilege is limited to the very terms of the
statute the favor would be intended beyond what was meant.[31]
Section 28(3), Article VI of the 1987 Philippine Constitution provides, thus:
(3) Charitable institutions, churches and parsonages or convents
appurtenant thereto, mosques, non-profit cemeteries, and all lands,
buildings, and improvements, actually, directly and exclusively used
for religious, charitable or educational purposes shall be exempt from
taxation.[32]
The tax exemption under this constitutional provision covers property taxes only.
[33] As Chief Justice Hilario G. Davide, Jr., then a member of the 1986
Constitutional Commission, explained: . . . what is exempted is not the
institution itself . . .; those exempted from real estate taxes are lands, buildings
and improvements actually, directly and exclusively used for religious, charitable
or educational purposes.[34]
Consequently, the constitutional provision is implemented by Section 234(b) of
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Republic Act No. 7160 (otherwise known as the Local Government Code of
1991) as follows:
SECTION 234. Exemptions from Real Property Tax. The following are
exempted from payment of the real property tax:
...
(b) Charitable institutions, churches, parsonages or convents
appurtenant thereto, mosques, non-profit or religious cemeteries and
all lands, buildings, and improvements actually, directly, and
exclusively used for religious, charitable or educational purposes.[35]
We note that under the 1935 Constitution, ... all lands, buildings, and
improvements used exclusively for charitable purposes shall be exempt
from taxation.[36] However, under the 1973 and the present Constitutions, for
lands, buildings, and improvements of the charitable institution to be
considered exempt, the same should not only be exclusively used for
charitable purposes; it is required that such property be used actually and
directly for such purposes.[37]
In light of the foregoing substantial changes in the Constitution, the petitioner
cannot rely on our ruling in Herrera v. Quezon City Board of Assessment Appeals
which was promulgated on September 30, 1961 before the 1973 and 1987
Constitutions took effect.[38] As this Court held in Province of Abra v. Hernando:
[39]

Under the 1935 Constitution: Cemeteries, churches, and

parsonages or convents appurtenant thereto, and all lands, buildings,
and improvements used exclusively for religious, charitable, or
educational purposes shall be exempt from taxation. The present
Constitution added charitable institutions, mosques, and non-profit
cemeteries and required that for the exemption of lands, buildings,
and improvements, they should not only be exclusively but also
actually and directly used for religious or charitable purposes.
The Constitution is worded differently. The change should not be
ignored. It must be duly taken into consideration. Reliance on past
decisions would have sufficed were the words actually as well as
directly not added. There must be proof therefore of the actual
and direct use of the lands, buildings, and improvements for religious
or charitable purposes to be exempt from taxation.
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Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 in order to be
entitled to the exemption, the petitioner is burdened to prove, by clear and
unequivocal proof, that (a) it is a charitable institution; and (b) its real properties
are ACTUALLY, DIRECTLY and EXCLUSIVELY used for charitable
purposes. Exclusive is defined as possessed and enjoyed to the exclusion of
others; debarred from participation or enjoyment; and exclusively is defined,
in a manner to exclude; as enjoying a privilege exclusively.[40] If real property
is used for one or more commercial purposes, it is not exclusively used for the
exempted purposes but is subject to taxation.[41] The words dominant use or
principal use cannot be substituted for the words used exclusively without
doing violence to the Constitutions and the law.[42] Solely is synonymous with
exclusively.[43]
What is meant by actual, direct and exclusive use of the property for charitable
purposes is the direct and immediate and actual application of the property
itself to the purposes for which the charitable institution is organized. It is not
the use of the income from the real property that is determinative of whether
the property is used for tax-exempt purposes.[44]
The petitioner failed to discharge its burden to prove that the entirety of its real
property is actually, directly and exclusively used for charitable purposes. While
portions of the hospital are used for the treatment of patients and the
dispensation of medical services to them, whether paying or non-paying, other
portions thereof are being leased to private individuals for their clinics and a
canteen. Further, a portion of the land is being leased to a private individual for
her business enterprise under the business name Elliptical Orchids and
Garden Center. Indeed, the petitioners evidence shows that it collected
P1,136,483.45 as rentals in 1991 and P1,679,999.28 for 1992 from the said
lessees.
Accordingly, we hold that the portions of the land leased to private entities as
well as those parts of the hospital leased to private individuals are not exempt
from such taxes.[45] On the other hand, the portions of the land occupied by
the hospital and portions of the hospital used for its patients, whether paying or
non-paying, are exempt from real property taxes.
IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY
GRANTED. The respondent Quezon City Assessor is hereby DIRECTED
to determine, after due hearing, the precise portions of the land and the area
thereof which are leased to private persons, and to compute the real property
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taxes due thereon as provided for by law.

SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Sandoval-Gutierrez, Carpio, Corona,
Carpio-Morales, Azcuna, and Tinga, JJ., concur.
Vitug, J., on official leave.
Ynares-Santiago, and Austria-Martinez, JJ., on leave.

[1] Penned by Associate Justice Remedios A. Salazar-Fernando, with Associate

Justices Fermin A. Martin, Jr. and Salvador J. Valdez, Jr. concurring.

[2] SECTION 1. CREATION OF THE LUNG CENTER OF THE

PHILIPPINES. There is hereby created a trust, under the name and style of
Lung Center of the Philippines, which, subject to the provisions of this Decree,
shall be administered, according to the Articles of Incorporation, By-Laws and
Objectives of the Lung Center of the Philippines, Inc., duly registered (reg. No.
85886) with the Securities and Exchange Commission of the Republic of the
Philippines, by the Office of the President, in coordination with the Ministry of
Human Settlements and the Ministry of Health.
[3] Annex C, Rollo, p. 49.
[4] Annexes 2 & 2-A, id. at 93-94.
[5] Annex D, id. at 50-52.
[6] Annex E, id. at 53-55.
[7] Annexes 4 & 5, id. at 100-109.
[8] Annex A, id. at 33-41.
[9] 3 SCRA 187 (1961).
[10] Rollo, pp. 83-84.

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[11] See Workmens Circle Educational Center of Springfield v. Board of Assessors of City

of Springfield, 51 N.E.2d 313 (1943).

[12] Congregational Sunday School & Publishing Society v. Board of Review, 125 N.E. 7

(1919), citing Jackson v. Philipps, 14 Allen (Mass.) 539.

[13] Bader Realty & Investment Co. v. St. Louis Housing Authority, 217 S.W.2d 489

(1949).

[14] Board of Assessors of Boston v. Garland School of Homemaking, 6 N.E.2d 379.

[15] Rollo, pp. 119-120.
[16] Id. at 123-125.
[17] Scripps Memorial Hospital v. California Employment Commission, 24 Cal.2d 669,

151 P.2d 109 (1944).

[18] Sisters of Third Order of St. Frances v. Board of Review of Peoria County, 83 N.E.

272.

[19] See note 12.

[20] Id. at 10.
[21] 167 N.W. 148 (1918), citing State v. Powers, 10 Mo. App. 263, 74 Mo. 476.
[22] Id. at 149.
[23] See Obrien v. Physicians Hospital Association, 116 N.E. 975 (1917).
[24] 714 P.2d 653 (1986).
[25] Id. at 660-661.
[26] Commissioner of Internal Revenue v. Court of Appeals, 298 SCRA 83 (1998).

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[27] 188 S.W.2d. 826 (1945).

[28] Id. at 829.
[29] Rollo, p. 120. (Underscoring supplied.)
[30] Malinias v. COMELEC, 390 SCRA 480 (2002).
[31] St. Louis Young Mens Christian Association v. Gehner, 47 S.W.2d 776 (1932).
[32] Underscoring supplied.
[33] Commissioner of Internal Revenue v. Court of Appeals, supra.
[34] Ibid. Citing II RECORDS OF THE CONSTITUTIONAL COMMISSION

90.

[35] Underscoring supplied.

[36] Article VI, Section 22, par. (3) of the 1935 Constitution provides that,

Cemeteries, churches and parsonages or convents appurtenant thereto, and all

lands, buildings, and improvements used exclusively for religious, charitable, or
educational purposes shall be exempt from taxation.
[37] Article VIII, Section 17, par. (3) of the 1973 Constitution provides that,

Charitable institutions, churches, parsonages or convents appurtenant thereto,

mosques, and non-profit cemeteries, and all lands, buildings, and improvements
actually, directly, and exclusively used for religious or charitable purposes shall
be exempt from taxation.
[38] 3 SCRA 186 (1961).
[39] 107 SCRA 105 (1981).
[40] Young Mens Christian Association of Omaha v. Douglas County, 83 N.W. 924

(1900).

[41] St. Louis Young Mens Christian Association v. Gehner, supra.

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[42] See State ex rel Koeln v. St. Louis Y.M.C.A., 168 S.W. 589 (1914).
[43] Lodge v. Nashville, 154 S.W. 141.
[44] Christian Business College v. Kalamanzoo, 131 N.W. 553.
[45] See Young Mens Christian Association of Omaha v. Douglas County, supra; Martin

v. City of New Orleans, 58 Am. 194 (1886).

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