Yamane vs. BA Lepanto Condominium Corporation PDF

4/21/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 474 4/21/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 474
diction of courts belongs to the legislature. While the traditional

notion of appellate jurisdiction connotes judicial review over lower
court decisions, it has to yield to statutory redefinitions that
clearly expand its breadth to encompass even review of decisions
of officers in the executive branches of government.
Taxation; Appeals; Local Governments; The Local Government
258 SUPREME COURT REPORTS ANNOTATED Code, or any other statute for that matter, does not expressly confer
Yamane vs. BA Lepanto Condominium Corporation appellate jurisdiction on the part of regional trial courts from the
denial of a tax protest by a local treasurer.—Yet significantly, the
*
Local Government Code, or any other statute for that matter, does
G.R. No. 154993. October 25, 2005.
not expressly confer appellate jurisdiction on the part of regional
trial courts from the denial of a tax protest by a local treasurer.
LUZ R. YAMANE, in her capacity as the CITY
On the other hand, Section 22 of B.P. 129 expressly delineates the
TREASURER OF MAKATI CITY, petitioner, vs. BA
appellate jurisdiction of the Regional Trial Courts, confining as it
LEPANTO CONDOMINIUM CORPORATION, respondent.
does said appellate jurisdiction to cases decided by Metropolitan,
Municipal, and Municipal Circuit Trial Courts. Unlike in the case
Constitutional Law; Separation of Powers; Congress; of the Court of Appeals, B.P. 129 does not confer appellate
Jurisdictions; Statutes; The basic law of jurisdiction, Batas jurisdiction on Regional Trial Courts over rulings made by non-
Pambansa Blg. 129 (B.P. 129), ineluctably confers appellate judicial entities.
jurisdiction on the Court of Appeals over final rulings of quasi- Same; Same; Same; Statutes; Courts; Court of Tax Appeals;
judicial agencies, instrumentalities, boards or commission, by Republic Act No. 9282 definitively proves in its Section 7(a)(3) that
explicitly using the phrase “appellate jurisdiction.” The power to the Court of Tax Appeals exercises exclusive appellate jurisdiction
create or characterize jurisdiction of courts belongs to the to review on appeal decisions, orders or resolutions of the Regional
legislature.— The stringent concept of original jurisdiction may Trial Courts in local tax cases originally decided or resolved by
seemingly be neutered by Rule 43 of the 1997 Rules of Civil them in the exercise of their original or appellate jurisdiction.—
Procedure, Section 1 of which lists a slew of administrative Republic Act No. 9282 definitively proves in its Section 7(a)(3)
agencies and quasi-judicial tribunals or their officers whose that the CTA exercises exclusive appellate jurisdiction to review
decisions may be reviewed by the Court of Appeals in the exercise on appeal decisions, orders or resolutions of the Regional Trial
of its appellate jurisdiction. However, the basic law of jurisdiction, Courts in local tax cases original decided or resolved by them in
Batas Pambansa Blg. 129 (B.P. 129), ineluctably confers appellate the exercise of their originally or appellate jurisdiction. Moreover,
jurisdiction on the Court of Appeals over final rulings of quasi- the provision also states that the review is triggered “by filing a
judicial agencies, instrumentalities, boards or commission, by petition for review under a procedure analogous to that provided
explicitly using the phrase “appellate jurisdiction.” The power to for under Rule 42 of the 1997 Rules of Civil Procedure.”
create or characterize juris-
Same; Same; Courts; Court of Tax Appeals; There is wider
latitude on the part of the Court of Tax Appeals to refuse
_______________
cognizance over a petition for review under Rule 42 than it would
have over an ordinary appeal under Rule 41.—We recognize that
* SECOND DIVISION.
the Corporation’s error in elevating the RTC decision for review
via Rule 42 actually worked to the benefit of the City Treasurer.
There is wider latitude on the part of the Court of Appeals to
259
refuse cognizance over a petition for review under Rule 42 than it
would have over an ordinary appeal under Rule 41. Under Section
13, Rule 41, the stated grounds for the dismissal of an ordinary
VOL. 474, OCTOBER 25, 2005 259 appeal prior to the
Yamane vs. BA Lepanto Condominium Corporation 260
www.central.com.ph/sfsreader/session/000001719d3f454673ac247f003600fb002c009e/t/?o=False 1/28 www.central.com.ph/sfsreader/session/000001719d3f454673ac247f003600fb002c009e/t/?o=False 2/28

where the provisions on business taxation relevant to this petition

260 SUPREME COURT REPORTS ANNOTATED may be found.
Yamane vs. BA Lepanto Condominium Corporation 261
transmission of the case records are when the appeal was taken
VOL. 474, OCTOBER 25, 2005 261
out of time or when the docket fees were not paid. On the other
hand, Section 6, Rule 42 provides that in order that the Court of Yamane vs. BA Lepanto Condominium Corporation
Appeals may allow due course to the petition for review, it must
first make a prima facie finding that the lower court has
Same; Same; Same; Corporation Law; Condominium Act;
committed an error that would warrant the reversal or
Words and Phrases; Under the law, a condominium is an interest
modification of the decision under review. There is no similar
in real property consisting of a separate interest in a unit in a
requirement of a prima facie determination of error in the case of
residential, industrial or commercial building and an undivided
ordinary appeal, which is perfected upon the filing of the notice of
interest in common, directly or indirectly, in the land on which it
appeal in due time.
is located and in other common areas of the building.—The
Same; Constitutional Law; Local Governments; The power of creation of the condominium corporation is sanctioned by
local government units to impose taxes within its territorial Republic Act No. 4726, otherwise known as the Condominium Act.
jurisdiction derives from the Constitution itself, which recognizes Under the law, a condominium is an interest in real property
the power of these units “to create its own sources of revenue and to consisting of a separate interest in a unit in a residential,
levy taxes, fees, and charges subject to such guidelines and industrial or commercial building and an undivided interest in
limitations as the Congress may provide, consistent with the basic common, directly or indirectly, in the land on which it is located
policy of local autonomy.”—The power of local government units and in other common areas of the building. To enable the orderly
to impose taxes within its territorial jurisdiction derives from the administration over these common areas which are jointly owned
Constitution itself, which recognizes the power of these units “to by the various unit owners, the Condominium Act permits the
create its own sources of revenue and to levy taxes, fees, and creation of a condominium corporation, which is specially formed
charges subject to such guidelines and limitations as the Congress for the purpose of holding title to the common area, in which the
may provide, consistent with the basic policy of local autonomy.” holders of separate interests shall automatically be members or
These guidelines and limitations as provided by Congress are in shareholders, to the exclusion of others, in proportion to the
main contained in the Local Government Code of 1991 (the appurtenant interest of their respective units. The necessity of a
“Code”), which provides for comprehensive instances when and condominium corporation has not gained widespread acceptance,
how local government units may impose taxes. The significant and even is merely permissible under the Condominium Act.
limitations are enumerated primarily in Section 133 of the Code, Nonetheless, the condominium corporation has been resorted to
which include among others, a prohibition on the imposition of by many condominium projects, such as the Corporation in this
income taxes except when levied on banks and other financial case.
institutions. None of the other general limitations under Section
Same; Same; Corporation Law; Condominium Act;
133 find application to the case at bar.
Condominium corporations are generally exempt from local
Same; Local Governments; Statutes; The most well-known business taxation under the Local Government Code, irrespective
mode of local government taxation is perhaps the real property tax, of any local ordinance that seeks to declare otherwise.—Whatever
which is governed by Title II, Book II of the Code, and which bears capacity the Corporation may have pursuant to its power to
no application in this case.—The most well-known mode of local exercise acts of ownership over personal and real property is
government taxation is perhaps the real property tax, which is limited by its stated corporate purposes, which are by themselves
governed by Title II, Book II of the Code, and which bears no further limited by the Condominium Act. A condominium
application in this case. A different set of provisions, found under corporation, while enjoying such powers of ownership, is
Title I of Book II, governs other taxes imposable by local prohibited by law from transacting its properties for the purpose
government units, including business taxes. Under Section 151 of of gainful profit. Accordingly, and with a significant degree of
the Code, cities such as Makati are authorized to levy the same comfort, we hold that condominium corporations are generally
taxes fees and charges as provinces and municipalities. It is in exempt from local business taxation under the Local Government
Article II, Title II, Book II of the Code, governing municipal taxes,
Code, irrespective of any local ordinance that seeks to declare 1 The general authority for local government units to create their own
otherwise. sources of revenue through taxation is established under Section 5, Article
X of the Constitution, as affirmed under Section 129 of Republic Act No.
PETITION for review on certiorari of a decision of the 7160 (Local Government Code).
Court of Appeals. 2 Republic Act No. 4726.
The facts are stated in the opinion of the Court. 263
262
VOL. 474, OCTOBER 25, 2005 263
262 SUPREME COURT REPORTS ANNOTATED Yamane vs. BA Lepanto Condominium Corporation
Yamane vs. BA Lepanto Condominium Corporation

Condominium (the “Condominium”), situated in Paseo de
Roxas, Makati City. Its membership comprises the various
Office of the City Attorney for petitioner.
unit owners of the Condominium. The Corporation is
De Borja, Medialdea, Bello, Guevarra & Gerodias for
authorized, under Article V of its Amended By-Laws, to
respondent.
collect regular assessments from its members for operating
expenses, capital expenditures on the common areas, and
TINGA, J.:
other special assessments as provided for in the Master
Petitioner City Treasurer of Makati, Luz Yamane (City Deed with Declaration of Restrictions of the Condominium.
Treasurer), presents for resolution of this Court two novel On 15 December 1998, the Corporation received a Notice
questions: one procedural, the other substantive, yet both of Assessment dated 14 December 1998 signed by the City
of obvious significance. The first pertains to the proper Treasurer. The Notice of Assessment stated that the
mode of judicial review undertaken from decisions of the Corporation is “liable to pay the correct city business taxes,
regional trial courts resolving the denial of tax protests fees and charges,” computed3
as totaling P1,601,013.77 for
made by local government treasurers, pursuant to the the years 1995 to 1997. The Notice of Assessment was
Local Government Code. The second is whether a local silent as to the statutory basis of the business taxes
government unit can, under the Local Government Code, assessed.
1
impel a condominium corporation to pay business taxes. Through counsel, the Corporation responded with a
While we agree with the City Treasurer’s position on the written tax protest dated 12 February 1999, addressed to
first issue, there ultimately is sufficient justification for the the City Treasurer. It was evident in the protest that the
Court to overlook what is essentially a procedural error. Corporation was perplexed on the statutory basis of the tax
We uphold respondents on the second issue. Indeed, there assessment.
are disturbing aspects in both procedure and substance
“With due respect, we submit that the Assessment has no basis as
that attend the attempts by the City of Makati to flex its
the Corporation is not liable for business taxes and surcharges
taxing muscle. Considering that the tax imposition now in
and interest thereon, under the Makati [Revenue] Code or even
question has utterly no basis in law, judicial relief is
under the [Local Government] Code.
imperative. There are fewer indisputable causes for the
The Makati [Revenue] Code and the [Local Government] Code
exercise of judicial review over the exercise of the taxing
do not contain any provisions on which the Assessment could be
power than when the tax is based on whim, and not on law.
based. One might argue that Sec. 3A.02(m) of the Makati
The facts, as culled from the record, follow.
[Revenue] Code imposes business tax on owners or operators of
Respondent BA-Lepanto Condominium Corporation (the
any business not specified in the said code. We submit, however,
“Corporation”) is a duly organized condominium
that this is not applicable to the Corporation as the Corporation is
corporation constituted in accordance with the
2 not an owner or operator of any business in the contemplation of
Condominium Act, which owns and holds title to the
the Makati [Revenue] Code and even the [Local Government]
common and limited common areas of the BA-Lepanto 4
Code.”
_______________
_______________
3 Broken down as follows: Tax Deficiency from 1995 to 1997— 5 Records, pp. 20-21.
P800,855.66; 25% surcharge—P200,213.91; Interest—P601,944.20. See 6 RTC Rollo, p. 16.
RTC Records, pp. 72-73. 7 Ibid.
4 Id., at p. 74. 8 Docketed as Civil Case No. 99-748.
9 Penned by Judge Reinato G. Quilala.
264
265
264 SUPREME COURT REPORTS ANNOTATED

VOL. 474, OCTOBER 25, 2005 265
Proceeding from the premise that its tax liability arose
from Section 3A.02(m) of the Makati Revenue Code, the “Herein appellant, to defray the improvements and beautification
Corporation proceeded to argue that under both the Makati of the common areas, collect [sic] assessments from its members.
Code and the Local Government Code, “business” is defined Its end view is to get appreciate living rules for the unit owners
as “trade or commercial activity regularly engaged in as a [sic], to give an impression to outsides [sic] of the quality of
means of livelihood or with a view to profit.” It was service the condominium offers, so as to allow
10
present owners to
submitted that the Corporation, as a condominium command better prices in the event of sale.”
corporation, was organized not for profit, but to hold title
over the common areas of the Condominium, to manage the With this, the RTC concluded that the activities of the
Condominium for the unit owners, and to hold title to the Corporation fell squarely under the definition of “business”
parcels of land on which the Condominium was located. under Section 13(b) of the Local Government
11
Code, and
Neither was the Corporation authorized, under its articles thus subject to local business taxation.
of incorporation or bylaws to engage in profit-making From this Decision of the RTC, the Corporation filed a
activities. The assessments it did collect from the unit Petition for Review under Rule 42 of the Rules of Civil
owners were for capital expenditures and operating Procedure with the Court 12
of Appeals. Initially, the petition
expenses.
5
was dismissed outright on the ground that only decisions
The protest was rejected by the City Treasurer in a of the RTC brought on appeal from a first level court could
letter dated 4 March 1999. She insisted that the collection be elevated for 13
review under the mode of review prescribed
of dues from the unit owners was effected primarily “to under Rule 42. However, the Corporation pointed out in
sustain and maintain the expenses of the common areas, its Motion for Reconsideration that under Section 195 of
with the end in view [sic] of getting full appreciative living the Local Government Code, the remedy of the taxpayer on
values [sic] for the individual condominium occupants and the denial of the protest filed with the local treasurer is to 14
to command better marketable [sic] prices for those appeal the denial with the court of competent jurisdiction.
occupants” who would in the future sell their respective Persuaded by this contention,
15
the Court of Appeals
6
units. Thus, she concluded since the “chances of getting reinstated the petition.
higher prices for well-managed common areas of any On 7 June 2002, the Court of16 Appeals Special Sixteenth
condominium are better and more effective that Division rendered the Decision now assailed before this
condominiums with poor [sic] managed common areas,” the Court. The appellate court reversed the RTC and declared
corporation activity “is a profit venture making [sic].”
7
that the Corporation17was not liable to pay business taxes to
From the denial of the protest, the Corporation filed8 an the City of Makati. In doing so, the Court of Appeals
Appeal with the Regional Trial Court (RTC) of Makati. On delved into jurisprudential definitions of
1 March9 2000, the Makati RTC Branch 57 rendered a
Decision dismissing the appeal for lack of merit. Accepting _______________
the premise laid by the City Treasurer, the RTC
10 Rollo, p. 106.
acknowledged, in sadly risible language:
11 Ibid.
12 In a Resolution dated 18 May 2000.
_______________ 13 Id., at p. 64.

14 Id., at p. 144. _______________

15 In a Resolution dated 25 July 2000.
18 Citing among others, Madrigal v. Rafferty, 38 Phil. 414; and Lynch v.
16 Penned by Justice H. Aquino, concurred in by Justices E. De los
Turrish, 264 US 221.
Santos and R. Maambong.
17 Id., at p. 22.
19 Id., at p. 21.
20 Ibid.
266 21 In a Resolution dated 28 August 2002.
22 Rollo, p. 33.
266 SUPREME COURT REPORTS ANNOTATED 267

18
VOL. 474, OCTOBER 25, 2005 267
profit, and concluded that the Corporation was not
engaged in profit. For one, it was held that the very
statutory concept of a condominium corporation showed
that it was not a juridical entity intended to make profit, as of original jurisdiction, it being the first court which took
its sole purpose was to hold title to the common areas in cognizance of the case. Accordingly, with the Corporation
the condominium and to maintain the condominium.
19
having pursued an erroneous mode of appeal, the RTC
The Court of Appeals likewise cited provisions from the Decision is deemed to have become final and executory.
Corporation’s Amended Articles of Incorporation and First, we dispose of the procedural issue, which
Amended By-Laws that, to its estimation, established that essentially boils down to whether the RTC, in deciding an
the Corporation was not engaged in business and the appeal taken from a denial of a protest by a local treasurer
assessment collected from unit owners limited to those under Section 195 of the Local Government Code, exercises
necessary to defray the expenses in the maintenance of the “original jurisdiction” or “appellate jurisdiction.” The
common areas and management the condominium.
20
question assumes a measure of importance to this petition,
21
Upon denial of her Motion for Reconsideration, the City for the adoption of the position of the City Treasurer that
Treasurer elevated the present Petition for Review under the mode of review of the decision taken by the RTC is
Rule 45. It is argued that the Corporation is engaged in governed by Rule 41 of the Rules of Civil Procedure means
business, for the dues collected from the different unit that the decision of the RTC would have long become final
owners is utilized towards the beautification and and executory by reason 23
of the failure of the Corporation to
maintenance of the Condominium, resulting in “full file a notice of appeal.
appreciative living values” for the condominium units There are discernible conflicting views on the issue. The
which would command better market prices should they be first, as expressed by the Court of Appeals, holds that the
sold in the future. The City Treasurer likewise avers that RTC, in reviewing denials of protests by local treasurers,
the rationale for business taxes is not on the income exercises appellate jurisdiction. This position is anchored
received or profit earned by the business, but the privilege on the language of Section 195 of the Local Government
to engage in business. The fact that the Corporation is Code which states that the remedy of the taxpayer whose
empowered “to acquire, own, hold, enjoy, lease, operate and protest is denied by the local treasurer24
is “to appeal with
maintain, and to convey sell, transfer or otherwise dispose the court of competent jurisdiction.” Apparently though,
of real or personal property” allegedly qualifies “as incident the Local Government Code does not elaborate on how such
to the fact of [the Corporation’s] act of engaging in “appeal” should be undertaken.
22
business.
The City Treasurer also claims that the Corporation had _______________
filed the wrong mode of appeal before the Court of Appeals
23 “This Court has invariably ruled that perfection of an appeal in the
when the latter filed its Petition for Review under Rule 42.
manner and within the period laid down by law is not only mandatory but
It is reasoned that the decision of the Makati RTC was
also jurisdictional. The failure to perfect an appeal as required by the
rendered in the exercise
rules has the effect of defeating the right to appeal of a party and
precluding the appellate court from acquiring jurisdiction over the case.

28
The right to appeal is not a natural right nor a part of due process; it is the phrase “appellate jurisdiction.” The power to create or
merely a statutory privilege, and may be exercised only in the manner and characterize jurisdiction
in accordance with the provisions of the law. The party who seeks to avail
of the same must comply with the requirement of the rules. Failing to do _______________
so, the right to appeal is lost.” See Balgami v. Court of Appeals, G.R. No.
131287, 9 December 2004, 445 SCRA 591. 25 G.R. Nos. 88158 & 97108-09, 4 March 1992, 206 SCRA 779.
24 See Section 195, Rep. Act No. 7160 (1991). 26 Ibid.
27 Otherwise known as the Judiciary Reorganization Act of 1980 and
268 since amended several times.
28 See Section 9, B.P. 129.

VOL. 474, OCTOBER 25, 2005 269
The other view, as maintained by the City Treasurer, is
that the jurisdiction exercised by the RTC is original in Yamane vs. BA Lepanto Condominium Corporation
character. This is the first time that the position has been
presented to the court for adjudication. Still, this argument of courts belongs to the legislature. While the traditional
does find jurisprudential mooring in our ruling in Garcia v. notion of appellate jurisdiction connotes judicial review
25
De Jesus, where the Court proffered the following over lower court decisions, it has to yield to statutory
distinction between original jurisdiction and appellate redefinitions that clearly expand its breadth to encompass
jurisdiction: “Original jurisdiction is the power of the Court even review of decisions of officers in the executive
to take judicial cognizance of a case instituted for judicial branches of government.
action for the first time under conditions provided by law. Yet significantly, the Local Government Code, or any
Appellate jurisdiction is the authority of a Court higher in other statute for that matter, does not expressly confer
rank to re-examine the final order or judgment of a lower appellate jurisdiction on the part of regional trial courts
Court which tried the case now elevated for judicial from the denial of a tax protest by a local treasurer. On the
26
review.” other hand, Section 22 of B.P. 129 expressly delineates the
The quoted definitions were taken from the appellate jurisdiction of the Regional Trial Courts,
commentaries of the esteemed Justice Florenz Regalado. confining as it does said appellate jurisdiction to cases
With the definitions as beacon, the review taken by the decided by Metropolitan, Municipal, and Municipal Circuit
RTC over the denial of the protest by the local treasurer Trial Courts. Unlike in the case of the Court of Appeals,
would fall within that court’s original jurisdiction. In short, B.P. 129 does not confer appellate jurisdiction on Regional
the review is the initial judicial cognizance of the matter. Trial Courts over rulings made by non-judicial entities.
Moreover, labeling the said review as an exercise of From these premises, it is evident that the stance of the
appellate jurisdiction is inappropriate, since the denial of City Treasurer is correct as a matter of law, and that the
the protest is not the judgment or order of a lower court, proper remedy of the Corporation from the RTC judgment
but of a local government official. is an ordinary appeal under Rule 41 to the Court of
The stringent concept of original jurisdiction may Appeals. However, we make this pronouncement subject to
seemingly be neutered by Rule 43 of the 1997 Rules of Civil two important qualifications. First, in this particular case
Procedure, Section 1 of which lists a slew of administrative there are nonetheless significant reasons for the Court to
agencies and quasi-judicial tribunals or their officers whose overlook the procedural error and ultimately uphold the
decisions may be reviewed by the Court of Appeals in the adjudication of the jurisdiction exercised by the Court of
exercise of its appellate jurisdiction. However, the basic law Appeals in this case. Second, the doctrinal weight of the
27
of jurisdiction, Batas Pambansa Blg. 129 (B.P. 129), pronouncement is confined to cases and controversies that
ineluctably confers appellate jurisdiction on the Court of emerged prior to the enactment of Republic Act No. 9282,
Appeals over final rulings of quasi-judicial agencies, the law which expanded the jurisdiction of the Court of Tax
instrumentalities, boards or commission, by explicitly using Appeals (CTA).
28
Republic Act No. 9282 definitively proves in its Section action on certiorari. [A] petition which should have been brought under
7(a)(3) that the CTA exercises exclusive appellate Rule 65 and not under Rule 45 of the Rules of Court, is not an inflexible
jurisdiction to review on appeal decisions, orders or rule. The strict application of procedural technicalities should not hinder
resolutions of the Regional Trial Courts in local tax cases the speedy disposition of the case on the merits.” Ramiscal v.
original decided or resolved by them in the exercise of their Sandiganbayan, G.R. Nos. 140576-99, 13 December 2004, 446 SCRA 166.
originally or appellate jurisdiction. Moreover, the provision See also e.g., Abcede v. Workmen’s Compensation Commission, G.R. No. L-
also states that the review is triggered “by filing a petition 42400, August 7, 1985, 138 SCRA 53; Lagua v. Cusi, G.R. No. L-44649,
April 15, 1988, 160 SCRA 260; Longos Rural Waterworks v. Desierto, G.R.
270
No. 135496, July 30, 2002, 385

VOL. 474, OCTOBER 25, 2005 271
for review under a procedure analogous to that provided
29
for Yamane vs. BA Lepanto Condominium Corporation
under Rule 42 of the 1997 Rules of Civil Procedure.”
Republic Act No. 9282, however, would not apply to this could very well have treated the Corporation’s petition for
case simply because it arose prior to the effectivity of that review as an ordinary appeal.
law. To declare otherwise would be to institute a Moreover, we recognize that the Corporation’s error in
jurisdictional rule derived not from express statutory elevating the RTC decision for review via Rule 42 actually
grant, but from implication. The jurisdiction of a court to worked to the benefit of the City Treasurer. There is wider
take cognizance of a case should be clearly conferred 30
and latitude on the part of the Court of Appeals to refuse
should not be deemed to exist on mere implications, and cognizance over a petition for review under Rule 42 than it
this settled rule would be needlessly emasculated should would have over an ordinary appeal under Rule 41. Under
we declare that the Corporation’s position is correct in law. Section 13, Rule 41, the stated grounds for the dismissal of
Be that as it may, characteristic of all procedural rules an ordinary appeal prior to the transmission of the case
is adherence to the precept that they should not be records are when the appeal was taken out of time or when
enforced blindly, especially if mechanical application would
33
the docket fees were not paid. On the other hand, Section
defeat the higher ends that animates our civil procedure— 6, Rule 42 provides that in order that the Court of Appeals
the just, speedy 31and inexpensive disposition of every action may allow due course to the petition for review, it must
and proceeding. Indeed, we have repeatedly upheld—and first make a prima facie finding that the lower court has
utilized ourselves—the discretion of courts to nonetheless committed an error that would warrant the reversal or
take cognizance of petitions raised on an erroneous mode of
34
modification of the decision under review. There is no
appeal and instead treat these petitions in 32the manner as similar requirement of a prima facie determination of error
they should have appropriately been filed. The Court of in the case of ordinary appeal, which is 35perfected upon the
Appeals filing of the notice of appeal in due time.
Evidently, by employing the Rule 42 mode of review, the
_______________ Corporation faced a greater risk of having its petition
rejected by the Court of Appeals as compared to having
29 See Section 9, Rep. Act No. 9282.
filed an ordinary appeal under Rule 41. This was not an
30 Philippine Ports Authority v. Fuentes, G.R. No. 91259, 16 April 1991,
error that worked to the prejudice of the City Treasurer.
195 SCRA 790, 796, citing Victorias Milling Co. v. Court of Tax Appeals, We now proceed to the substantive issue, on whether the
G.R. No. 66381, Feburary 29, 1984. City of Makati may collect business taxes on condominium
31 See Section 6, Rule 1, 1997 Rules of Civil Procedure. corporations.
32 “The rules of procedure ought not to be applied in a very rigid We begin with an overview of the power of a local
technical sense, as they are used only to help secure, not override government unit to impose business taxes.
substantial justice. If a technical and rigid enforcement of the rules is The power of local government units to impose taxes
made, their aim would be defeated. Consequently, in the interest of within its territorial jurisdiction derives from the
justice, the instant petition for review may be treated as a special civil
Constitution itself, which recognizes the power of these commerce. Moreover, the local sanggunian is also
units “to create its own sources of authorized to impose
_______________ _______________
SCRA 392; Rubenito v. Lagata, G.R. No. 140959, December 21, 2004, 36 See Section 5, Article X, Constitution.
447 SCRA 417. 37 See Section 133(a), Local Government Code.
33 See Section 13, Rule 41, 1997 Rules of Civil Procedure. 38 Article I, Book II, Title II, concerning provincial taxes, authorize the
34 See Section 6, Rule 42, 1997 Rules of Civil Procedure. imposition of taxes on the business of printing and publication, on
35 See Section 9, Rule 41, 1997 Rules of Civil Procedure. businesses enjoying a franchise, and on persons exercising a profession
requiring government examination. While these are admittedly taxes
272 imposed on businesses, they find no relevance to the present case.
273
VOL. 474, OCTOBER 25, 2005 273
revenue and to levy taxes, fees, and charges subject to such Yamane vs. BA Lepanto Condominium Corporation
guidelines and limitations as the Congress may provide,
36
consistent with the basic policy of local autonomy.” These taxes on any other businesses not otherwise specified
guidelines and limitations as provided by Congress are in under Section 143 which the sanggunian concerned may
main contained in the Local Government Code of 1991 (the deem proper to tax.
“Code”), which provides for comprehensive instances when The coverage of business taxation particular to the City
and how local government units may impose taxes. The of Makati is provided by the Makati Revenue Code
significant limitations are enumerated primarily in Section (“Revenue Code”), enacted through Municipal Ordinance
133 of the Code, which include among others, a prohibition No. 92-072. The Revenue Code remains in effect as of this
on the imposition of income taxes except when levied on writing. Article A, Chapter III of the Revenue Code governs
37
banks and other financial institutions. None of the other business taxes in Makati, and it is quite specific as to the
general limitations under Section 133 find application to particular businesses which are covered by business taxes.
the case at bar. To give a sample of the specified businesses under the
The most well-known mode of local government taxation Revenue Code which are not enumerated under the Local
is perhaps the real property tax, which is governed by Title Government Code, we cite Section 3A.02(f) of the Code,
II, Book II of the Code, and which bears no application in which levies a gross receipt tax:
this case. A different set of provisions, found under Title I
(f) On contractors and other independent contractors defined in
of Book II, governs other taxes imposable by local
Sec. 3A.01(q) of Chapter III of this Code, and on owners or
government units, including business taxes. Under Section
operators of business establishments rendering or offering
151 of the Code, cities such as Makati are authorized to
services such as: advertising agencies; animal hospitals; assaying
levy the same taxes fees and charges as provinces and
laboratories; belt and buckle shops; blacksmith shops;
municipalities. It is in Article II, Title II, Book II of the
bookbinders; booking officers for film exchange; booking offices for
Code, governing municipal taxes, where the provisions 38on
transportation on commission basis; breeding of game cocks and
business taxation relevant to this petition may be found.
other sporting animals belonging to others; business management
Section 143 of the Code specifically enumerates several
services; collecting agencies; escort services; feasibility studies;
types of business on which municipalities and cities may
consultancy services; garages; garbage disposal contractors; gold
impose taxes. These include manufacturers, wholesalers,
and silversmith shops; inspection services for incoming and
distributors, dealers of any article of commerce of whatever
outgoing cargoes; interior decorating services; janitorial services;
nature; those engaged in the export or commerce of
job placement or recruitment agencies; landscaping contractors;
essential commodities; contractors and other independent
lathe machine shops; management consultants not subject to
contractors; banks and financial institutions; and peddlers
professional tax; medical and dental laboratories; mercantile
engaged in the sale of any merchandise or article of
agencies; messengerial services; operators of shoe shine stands; submitted by the City Treasurer in all the antecedent
painting shops; perma press establishments; rent-a-plant judicial proceedings, as well as in this present petition, and
services; polo players; school for and/or horse-back riding also the communications by the City Treasurer to the
academy; real estate appraisers; real estate brokerages; Corporation which form part of the record. Nowhere
photostatic, white/blue printing, Xerox, typing, and therein is there any citation made by the City Treasurer of
mimeographing services; rental of bicycles and/or tricycles, any provision of the Revenue Code which would serve as
furniture, shoes, watches, household appliances, boats, the legal authority for the collection of business taxes from
typewriters, etc.; roasting of pigs, fowls, etc.; shipping agencies; condominiums in Makati.
shipyard for repairing ships for others; shops for shearing
animals; silkscreen or T-shirt printing shops; stables; travel _______________
agencies; vaciador shops; veterinary clinics; video rentals and/or
coverage services; dancing schools/speed reading/EDP; 39 See Section 3A.02(f), Makati Revenue Code.
40 See Section 3A.02(h), Makati Revenue Code.
274 41 See Section 3A.02(k), Makati Revenue Code.
42 Section 3A.02(m), Makati Revenue Code.
275
nursery, vocational and other schools not regulated by the VOL. 474, OCTOBER 25, 2005 275
Department39 of Education, Culture and Sports, (DECS), day care Yamane vs. BA Lepanto Condominium Corporation
centers; etc.
Other provisions of the Revenue Code likewise subject Ostensibly, the notice of assessment, which stands as the
hotel and restaurant owners and operators,
40
real estate first instance the taxpayer is officially made aware of the
41
dealers, and lessors of real estate to business taxes. pending tax liability, should be sufficiently informative to
Should the comprehensive listing not prove apprise the taxpayer the legal basis of the tax. Section 195
encompassing enough, there is also a catch-all provision of the Local Government Code does not go as far as to
similar to that under the Local Government Code. This is expressly require that the notice of assessment specifically
found in Section 3A.02(m) of the Revenue Code, which cite the provision of the ordinance involved but it does
provides: require that it state the nature of the tax, fee or charge, the
amount of deficiency, surcharges, interests and penalties.
(m) On owners or operators of any business not specified above In this case, the notice of assessment sent to the
shall pay the tax at the rate of two percent (2%) for 1993, two and Corporation did state that the assessment was for business
one-half percent (2 ½%) for 1994 and 1995, and three percent (3%) taxes, as well as the amount of the assessment. There may
for 1996 and the42
years thereafter of the gross receipts during the have been prima facie compliance with the requirement
preceding year. under Section 195. However in this case, the Revenue Code
provides multiple provisions on business taxes, and at
The initial inquiry is what provision of the Makati Revenue varying rates. Hence, we could appreciate the Corporation’s
Code does the City Treasurer rely on to make the confusion, as expressed in its protest, as to the exact legal
43
Corporation liable for business taxes. Even at this point, basis for the tax. Reference to the local tax ordinance is
there already stands a problem with the City Treasurer’s vital, for the power of local government units to impose
cause of action. local taxes is exercised through the appropriate ordinance
Our careful examination of the record reveals a highly enacted by the sanggunian, and not by the Local
44
disconcerting fact. At no point has the City Treasurer been Government Code alone. What determines tax liability is
candid enough to inform the Corporation, the RTC, the the tax ordinance, the Local Government Code being the
Court of Appeals, or this Court for that matter, as to what enabling law for the local legislative body.
exactly is the precise statutory basis under the Makati Moreover, a careful examination of the Revenue Code
Revenue Code for the levying of the business tax on shows that while Section 3A.02(m) seems designed as a
petitioner. We have examined all of the pleadings catch-all provision, Section 3A.02(f), which provides for a
different tax rate from that of the former provision, may be We do not know why the Corporation chose not to put
construed to be of similar import. While Section 3A.02(f) is this issue into litigation, though we can ultimately
quite exhaustive in enumerating the class of businesses presume that no injury was sustained because the City
taxed under the provision, the listing, while Treasurer failed to cite the specific statutory basis of the
tax. What is essential though is that the local treasurer be
_______________ required to explain to the taxpayer with sufficient
particularity the basis of the tax, so as to leave no doubt in
43 Supra note 4. the mind of the taxpayer as to the specific tax involved.
44 See Section 132, Local Government Code. Indeed, even as the Local In this case, the Corporation seems confident enough in
Government Code enumerates specific examples of local taxes, the litigating despite the failure of the City Treasurer to admit
provisions therein clarify that “the [local government unit] may impose a on what exact provision of the Revenue Code the tax
tax,” thus characterizing local taxes as optional on the part of local liability ensued. This is perhaps because the Corporation
government unit, and not mandatory according to the Code. Certainly, a has anchored its central argument on the position that the
local government unit may choose not to impose the local tax at all, even if Local Government Code itself does not sanction the
it is authorized to do so under the Local Government Code. imposition of business taxes against it. This posi-
276 277
276 SUPREME COURT REPORTS ANNOTATED VOL. 474, OCTOBER 25, 2005 277
Yamane vs. BA Lepanto Condominium Corporation Yamane vs. BA Lepanto Condominium Corporation
it does not include condominium-related enterprises, ends tion was sustained by the Court of Appeals, and now merits
with the abbreviation “etc.,” or “et cetera.” our analysis.
We do note our discomfort with the unlimited breadth As stated earlier, local tax on businesses is authorized
and the dangerous uncertainty which are the twin under Section 143 of the Local Government Code. The word
hallmarks of the words “et cetera.” Certainly, we cannot be “business” itself is defined under Section 131(d) of the Code
disposed to uphold any tax imposition that derives its as “trade or commercial activity regularly engaged 45in as a
authority from enigmatic and uncertain words such as “et means of livelihood or with a view to profit.” This
cetera.” Yet we cannot even say with definiteness whether definition of “business” takes on importance, since Section
the tax imposed on the Corporation in this case is based on 143 allows local government units to impose local taxes on
“et cetera,” or on Section 3A.02(m), or on any other businesses other than those specified under the provision.
provision of the Revenue Code. Assuming that the Moreover, even those business activities specifically named
assessment made on the Corporation is on a provision in Section 143 are themselves susceptible to broad
other than Section 3A.02(m), the main legal issue takes on interpretation. For example, Section 143(b) authorizes the
a different complexion. For example, if it is based on “et imposition of business taxes on wholesalers, distributors, or
cetera” under Section 3A.02(f), we would have to examine dealers in any article of commerce of whatever kind or
whether the Corporation faces analogous comparison with nature.
the other businesses listed under that provision. It is thus imperative that in order that the Corporation
Certainly, the City Treasurer has not been helpful in may be subjected to business taxes, its activities must fall
that regard, as she has been silent all through out as to the within the definition of business as provided in the Local
exact basis for the tax imposition which she wishes that Government Code. And to hold that they do is to ignore the
this Court uphold. Indeed, there is only one thing that very statutory nature of a condominium corporation.
prevents this Court from ruling that there has been a due The creation of the condominium corporation is
process violation on account of the City Treasurer’s failure sanctioned by Republic Act No. 4726, otherwise known as
to disclose on paper the statutory basis of the tax—that the the Condominium Act. Under the law, a condominium is an
Corporation itself does not allege injury arising from such interest in real property consisting of a separate interest in
failure on the part of the City Treasurer. a unit in a residential, industrial or commercial building
and an undivided interest in common, directly or indirectly,
in the land on which it is46located and in other common provisions which are contrary to the provisions of the
areas of the building. To enable the orderly Condominium Act, the enabling or master deed, or 52
the
administration over these common areas which are jointly declaration of restrictions of the condominium project.
owned by the various unit owners, the Condominium Act
permits the creation of a condominium corporation, which _______________
is specially formed for the purpose of holding title to the
common area, in which the holders of separate interests 47 Ibid.
shall automatically be members or shareholders, to the 48 “The suggestion has been cautiously advanced that the unit owners
exclusion of others, in proportion to the appurtenant might form a corporation to operate the condominium and in this way
interest of probably avoid unlimited personal liability.” See §12, Alberto Ferrer and
Karl Stecher, I Law of Condominium (1967 ed.).
_______________
49 See Section 2, Rep. Act No. 4726.
50 See Section 9(d), Rep. Act No. 4726.
45 See Section 131(e), Local Government Code. 51 See Section 10, Rep. Act No. 4726.
46 See Section 2, Rep. Act No. 4726. 52 Ibid.
278 279
47
their respective units. The necessity of a condominium 48 We can elicit from the Condominium Act that a
corporation has not gained widespread acceptance, and 49 condominium corporation is precluded by statute from
even is merely permissible under the Condominium Act. engaging in corporate activities other than the holding of
Nonetheless, the condominium corporation has been the common areas, the administration of the condominium
resorted to by many condominium projects, such as the project, and other acts necessary, incidental or convenient
Corporation in this case. to the accomplishment of such purposes. Neither the
In line with the authority of the condominium maintenance of livelihood, nor the procurement of profit,
corporation to manage the condominium project, it may be fall within the scope of permissible corporate purposes of a
authorized, in the deed of restrictions, “to make reasonable condominium corporation under the Condominium Act.
assessments to meet authorized expenditures, each The Court has examined the particular Articles of
condominium unit to be assessed separately for its share of Incorporation and By-Laws of the Corporation, and these
such expenses in proportion (unless otherwise provided)50
to documents unmistakably hew to the limitations contained
its owner’s fractional interest in any common areas.” It is in the Condominium Act. Per the Articles of Incorporation,
the collection of these assessments from unit owners that the Corporation’s corporate purposes are limited to: (a)
form the basis of the City Treasurer’s claim that the owning and holding title to the common and limited
Corporation is doing business. common areas in the Condominium Project; (b) adopting
The Condominium Act imposes several limitations on such necessary measures for the protection and safeguard
the condominium corporation that prove crucial to the of the unit owners and their property, including the power
disposition of this case. Under Section 10 of the law, the to contract for security services and for insurance coverage
corporate purposes of a condominium corporation are on the entire project; (c) making and adopting needful rules
limited to the holding of the common areas, either in and regulations concerning the use, enjoyment and
ownership or any other interest in real property recognized occupancy of the units and common areas, including the
by law; to the management of the project; and to such other power to fix penalties and assessments for violation of such
purposes as may be necessary, incidental51
or convenient to rules; (d) to provide for the maintenance, repair, sanitation,
the accomplishment of such purpose. Further, the same and cleanliness of the common and limited common areas;
provision prohibits the articles of incorporation or by-laws (e) to provide and contract for public utilities and other
of the condominium corporation from containing any services to the common areas; (f) to contract for the services
of persons or firms to assist in the management and may be considered as being engaged in business, since the
operation of the Condominium Project; (g) to discharge any repairs or improvements on the car may be deemed
lien or encumbrances upon the Condominium Project; (h) to oriented towards appreciating the value of the car upon
enforce the terms contained in the Master Deed with resale. There is an evident distinction between persons who
Declaration of Restrictions of the Project; (i) to levy and spend on repairs and improvements on their personal and
collect those assessments as provided in the Master Deed, real property for the purpose of increasing its resale
in order to defray the costs, expenses and losses of the
condominium; (j) to acquire, own, hold, enjoy, lease operate _______________
and maintain, and to convey, sell transfer, mortgage or
otherwise dispose of real or personal property in connection 53 See RTC Records, pp. 44-46.
with the purposes and activities of the corporation; and (k) 54 Id., at pp. 35-36.
to exercise and perform such other powers rea- 55 Rollo, p. 20.
280 281
sonably necessary, incidental

53
or convenient to accomplish value, and those who defray such expenses for the purpose
the foregoing purposes. of preserving the property. The vast majority of persons fall
Obviously, none of these stated corporate purposes are under the second category, and it would be highly specious
geared towards maintaining a livelihood or the obtention of to subject these persons to local business taxes. The profit
profit. Even though the Corporation is empowered to levy motive in such cases is hardly the driving factor behind
assessments or dues from the unit owners, these amounts such improvements, if it were contemplated at all. Any
collected are not intended for the incurrence of profit by the profit that would be derived under such circumstances
Corporation or its members, but to shoulder the multitude would merely be incidental, if not accidental.
of necessary expenses that arise from the maintenance of Besides, we shudder at the thought of upholding tax
the Condominium Project. Just as much is confirmed by liability on the basis of the standard of “full appreciative
Section 1, Article V of the Amended By-Laws, which living values,” a phrase that defies statutory explication,
enumerate the particular expenses to be defrayed by the commonsensical meaning, the English language, or even
regular assessments collected from the unit owners. These definition from Google. The exercise of the power of
would include the salaries of the employees of the taxation constitutes
56
a deprivation of property under the
Corporation, and the cost of 54
maintenance and ordinary due process clause, and the taxpayer’s right to due process
repairs of the common areas. is violated when arbitrary or oppressive
57
methods are used
The City Treasurer nonetheless contends that the in assessing and collecting taxes. The fact that the
collection of these assessments and dues are “with the end Corporation did not fall within the enumerated classes of
view of getting full appreciative living values” for the taxable businesses under either the Local Government
condominium units, and as a result, profit is obtained once Code or the Makati Revenue Code already forewarns that a
these units are sold at higher prices. The Court cites with clear demonstration is essential on the part of the City
approval the two counterpoints raised by the Court of Treasurer on why the Corporation should be taxed anyway.
Appeals in rejecting this contention. First, if any profit is “Full appreciative living values” is nothing but blather in
obtained by the sale of the units, it accrues not to the search of meaning, and to impose a tax hinged on that
corporation but to the unit owner. Second, if the unit owner standard is both arbitrary and oppressive.
does obtain profit from the sale of the corporation, the The City Treasurer also contends that the fact that the
owner is already required to pay capital gains
55
tax on the Corporation is engaged in business is evinced by the
appreciated value of the condominium unit. Articles of Incorporation, which specifically empowers the
Moreover, the logic on this point of the City Treasurer is Corporation “to acquire, own,
baffling. By this rationale, every Makati City car owner
_______________ would band together to engage in activities for

61
profit under
the shelter of the condominium corporation. Such activity
56 “This is not to say though that the constitutional injunction against
would be prohibited un-
deprivation of property without due process of law may be passed over
under the guise of the taxing power, except when the taking of the
_______________
property is in the lawful exercise of the taxing power, as when (1) the tax
is for a public purpose; (2) the rule on uniformity of taxation is observed; 58 Rollo, p. 33.
(3) either the person or property taxed is within the jurisdiction of the 59 Batas Pambansa Blg. 68.
government levying the tax; and (4) in the assessment and collection of 60 See Section 36(7), Corporation Code.
certain kinds of taxes notice and opportunity for hearing are provided.” 61 Indeed, at least one commentator on American condominium law has
Pepsi-Cola Bottling Company v. Municipality of Tanauan, 161 Phil. 591; offered the following explanation on how this may be accomplished:
69 SCRA 460 (1976).
57 Ibid. Under certain conditions it is possible for the owners of a condominium project to
engage in a business, the income of which would be subject to the Federal income
282 tax. . . . To meet these conditions, however, the owners of the condominium, acting
through their asso

VOL. 474, OCTOBER 25, 2005 283
hold, enjoy, lease, operate and maintain, and to convey,
sell, transfer mortgage
58
or otherwise dispose of real or
personal property.” What the City Treasurer fails to add is
that 59every corporation organized under the Corporation der the Condominium Act, but if the fact is established, we
Code is so specifically empowered. Section 36(7) of the see no
Corporation Code states that every corporation
incorporated under the Code has the power and capacity _______________
“to purchase, receive, take or grant, hold, convey, sell,
lease, pledge, mortgage and otherwise deal with such real ciation of owners, must generally fall into one of two general
and personal property . . . as the transaction of the lawful classifications insofar as the Internal Revenue Code is concerned, either
business of the corporation may reasonably and necessarily as a partnership or as a corporation.

60
require . . . .” Without this power, corporations, as The Federal income tax regulations define a partnership as including a
juridical persons, would be deprived of the capacity to syndicate, group, pool, joint venture or other unincorporated organization
engage in most meaningful legal relations. through or by means of which any business, financial operation or venture
Again, whatever capacity the Corporation may have is carried on and which is not a corporation, trust or estate within the
pursuant to its power to exercise acts of ownership over meaning of the Internal Revenue Code.
personal and real property is limited by its stated corporate A corporation includes association, which are taxable as corporation,
purposes, which are by themselves further limited by the and joint-stock companies. . . . The individual apartment owners are
Condominium Act. A condominium corporation, while generally tenants in common of the common areas and joint owners of the
enjoying such powers of ownership, is prohibited by law personal property of the organization. Almost invariably they are not
from transacting its properties for the purpose of gainful partners and the mere fact that they agree to share expenses does not
profit. make the arrangement a partnership. The Federal regulations specifically
Accordingly, and with a significant degree of comfort, we prescribe that a joint undertaking merely to share expenses is not a
hold that condominium corporations are generally exempt partnership.
from local business taxation under the Local Government Mere co-ownership or property which is maintained, kept in repair, and
Code, irrespective of any local ordinance that seeks to rented or leased does not constitute a partnership. . . . Tenants in common
declare otherwise. may, however, be partners if they actively carry on a trade, business,
Still, we can note a possible exception to the rule. It is financial operation or venture and divide the profits thereof.
not unthinkable that the unit owners of a condominium

Consequently a partnership may be created if the co-owners of an Petition denied.

apartment building lease space and provide services to the occupants. The
principal question is whether the owners are engaged in a business for Notes.—A business permit is issued primarily to
profit. . . . Accordingly where portions of a condominium project are leased regulate the conduct of business and the City Mayor
or rented as barber shops, drug stores, beauty shops, or other comer cannot, through the issu-
enterprises, the income therefrom will be subject to taxation.
If the condominium owners are conducting a business for profit, it must _______________
also be determined whether the business is a partnership or a corporation.
If it meets the tests prescribed for a corporate entity by the Revenue
62 “The term ultra vires refers to an act outside or beyond corporate
Service its income will be subject to taxation as a corporation, otherwise it powers, including those that may ostensibly be within such powers but
will be considered as some other form of taxable entity. are, by general or special laws, prohibited or declared illegal.” Twin
See Ferrer and Stecher, supra note 48, at §454. Under Philippine law Towers Condominium Corp. v. Court of Appeals, 446 Phil. 280; 398 SCRA
though, a condominium corporation may not adopt purposes other than 205 (2003).
those provided under the Condominium Act. Infra.
285
284
VOL. 474, OCTOBER 25, 2005 285

284 SUPREME COURT REPORTS ANNOTATED Aguilar vs. Citytrust Finance Corporation
ance of such permit, regulate the practice of a profession,
reason why the condominium corporation may be made like that of optometry. (Acebedo Optical Company, Inc. vs.
liable by the local government unit for business taxes. Even Court of Appeals, 329 SCRA 314 [2000])
though such activities would be considered as ultra vires, A buyer of a condominium unit seeking to enforce the
since they are engaged in62beyond the legal capacity of the performance of an obligation arising from such transaction,
condominium corporation, the principle of estoppel would or claiming damages therefrom, may bring an action with
preclude the corporation or its officers and members from the Housing and Land Use Regulatory Board (HLURB).
invoking the void nature of its undertakings for profit as a (AMA Computer College, Inc. vs. Factora, 378 SCRA 121
means of acquitting itself of tax liability. [2002])
Still, the City Treasurer has not posited the claim that As an elementary principle of law, license taxation must
the Corporation is engaged in business activities beyond not be “so onerous to show a purpose to prohibit a business
the statutory purposes of a condominium corporation. The which is not itself injurious to public health or morals.”
assessment appears to be based solely on the Corporation’s (Terminal Facilities and Services Corporation vs.
collection of assessments from unit owners, such Philippine Ports Authority, 378 SCRA 82 [2002])
assessments being utilized to defray the necessary
——o0o——
expenses for the Condominium Project and the common
areas. There is no contemplation of business, no orientation
towards profit in this case. Hence, the assailed tax
assessment has no basis under the Local Government Code
or the Makati Revenue Code, and the insistence of the city
in its collection of the void tax constitutes an attempt at
deprivation of property without due process of law. © Copyright 2020 Central Book Supply, Inc. All rights reserved.
WHEREFORE, the petition is DENIED. No costs.
SO ORDERED.
Puno (Chairman), Austria-Martinez and Callejo,

Sr., JJ.,concur.
Chico-Nazario, J.,On Leave.

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4/21/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 474 4/21/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 474

diction of courts belongs to the legislature. While the traditional

Yamane vs. BA Lepanto Condominium Corporation 260

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where the provisions on business taxation relevant to this petition

Yamane vs. BA Lepanto Condominium Corporation 261

The facts are stated in the opinion of the Court. 263

Yamane vs. BA Lepanto Condominium Corporation

264 SUPREME COURT REPORTS ANNOTATED

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14 Id., at p. 144. _______________

266 SUPREME COURT REPORTS ANNOTATED 267

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268 SUPREME COURT REPORTS ANNOTATED 269

270 SUPREME COURT REPORTS ANNOTATED 271

Yamane vs. BA Lepanto Condominium Corporation

sonably necessary, incidental

_______________ would band together to engage in activities for

282 SUPREME COURT REPORTS ANNOTATED 283

business of the corporation may reasonably and necessarily as a partnership or as a corporation.

profit. make the arrangement a partnership. The Federal regulations specifically

hold that condominium corporations are generally exempt partnership.

not unthinkable that the unit owners of a condominium

Consequently a partnership may be created if the co-owners of an Petition denied.

VOL. 474, OCTOBER 25, 2005 285

Puno (Chairman), Austria-Martinez and Callejo,

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