G.R. No. L-1974, March 15, 1906
THE ROMAN CATHOLIC APOSTOLIC CHURCH IN THE PHILIPPINES, plaintiff-appellee, vs. A.W. HASTINGS, Assessor and Collector of the City of Manila, and THE CITY OF MANILA, defendants-appellants.

FACTS:
The City of Manila’s Assessor and Collector imposed a tax on the residence of the Roman Catholic Archbishop of Manila for the year 1901. The residence is located 80 to 100 meters from the Manila Cathedral, separated by an intervening building, and connected by a public street. The Roman Catholic Church protested the assessment, claiming the property is exempt under Section 48 of Act No. 183, which exempts “churches and their adjacent parsonages and conventos” from taxation. The City refused the exemption, leading to this action for the return of taxes paid under protest.

ISSUE:
Whether the Archbishop’s residence qualifies as an “adjacent parsonage” to the Manila Cathedral under Section 48 of Act No. 183, and is therefore exempt from taxation.

RULING:
YES. The Supreme Court ruled in favor of the Roman Catholic Church and ordered the return of the taxes.
1. On the term “Parsonage”: The Court rejected the narrow interpretation that “parsonage” (translated as “casa parroquial” in Spanish) applies only to strictly territorial parish houses. The term must be construed in its broad, American usage to mean a ministerial residence used in connection with any place of worship of any denomination. The Archbishop, as the head pastor of the diocese for whom the cathedral is his special church, resides in a house that functions as his parsonage. His elevated ecclesiastical rank does not deprive the residence of its character as a parsonage.
2. On the term “Adjacent”: The Court held that “adjacent” does not mean “contiguous.” It means “close” or “near by.” Considering the suitability of the site, its long-standing use, and the physical surroundings (with a direct street connecting the two structures), the Archbishop’s residence is reasonably near and therefore “adjacent” to the cathedral. The Court rejected the stricter interpretation that would require the properties to be on the same integral lot, as this would exclude many legitimate cases and create a harsh and unnatural reading of the law.
3. On the Claim of Exhausted Privilege: The Court also rejected the argument that the exemption was already exhausted by the separate parsonage of the adjoining chapel “Del Sagrario.” The statute exempts parsonages adjacent to their respective churches. The evidence established that the cathedral and the chapel, though under one roof, are distinct churches. Therefore, each may have its own adjacent parsonage eligible for exemption.

DOCTRINE:
Statutory exemptions from taxation, while strictly construed against the property owner, should not be interpreted unnaturally or with strained construction. The terms of an exemption law should be given a fair and reasonable interpretation in light of the statute’s purpose and the common conditions it was designed to address. The word “adjacent” in a tax exemption statute means “near by” and not necessarily “contiguous.”