G.R. No. L-47252. April 18, 1941.
THE APOSTOLIC PREFECT OF THE MOUNTAIN PROVINCE, plaintiff-appellant, vs. THE TREASURER OF THE CITY OF BAGUIO, defendant-appellee.

FACTS

The plaintiff, a religious corporation, filed an action to recover from the defendant City Treasurer of Baguio the sum of P1,019.37, which it paid under protest as a special assessment on its properties in Baguio for the year 1937. The Court of First Instance dismissed the complaint. The parties submitted a partial stipulation of facts, which established that: (1) the plaintiff is a religious corporation; (2) the defendant is the City Treasurer; (3) the defendant demanded and collected the amount under Ordinance No. 137, as amended by several subsequent ordinances and a 1918 Council Resolution; (4) the payment for 1937 was made under protest, which was denied by the defendant; (5) the properties subject to the payment were used for worship and teaching during 1937 and prior years; (6) the City of Baguio constructed a sewer and drainage system under the cited ordinances; (7) the plaintiff had paid the special assessments in years prior to 1937 without protest; (8) the properties were included in the “Special Assessment List, City of Baguio” under Ordinance No. 137 and had not been excluded; and (9) the sewer and drainage system directly and specially benefited all property owners listed, including the plaintiff, by promoting cleanliness and sanitary conditions.

ISSUE

Whether the plaintiff’s properties, used for religious purposes, are exempt from the special assessment levied by the City of Baguio under Ordinance No. 137, as amended.

RULING

The Supreme Court affirmed the lower court’s decision, holding that the plaintiff was not exempt from paying the special assessment. The Court ruled that: (1) The special assessment imposed by Ordinance No. 137 is not a tax in the legal sense but a levy to amortize the extraordinary costs of a local improvement (the sewer and drainage system) that specially benefits the properties assessed. Distinguished from a general tax, a special assessment is confined to local impositions based on special benefits to the property, levied only on land, and exceptional in time and locality. (2) Since the special assessment is not a tax, the constitutional exemption under Article VI, Section 14(3) of the Philippine Constitution (exempting properties used exclusively for religious, charitable, or educational purposes from taxation) does not apply. (3) Even assuming the constitutional exemption could apply, the stipulation of facts only stated that the properties were “dedicated to” religious purposes, not that they were used “exclusively” for such purposes, as required by the Constitution. (4) The City of Baguio was authorized under Section 8(1) of Act No. 1963 (now Section 2553[1] of the Revised Administrative Code) to impose the special assessment to defray the costs of the sewer and drainage system. (5) The plaintiff’s claim that it had already fully paid its share of the assessment was unfounded, as the total cost of the system (P502,750.75) had not been fully satisfied by the total collections (P291,290.08) up to 1937. The appeal was dismissed, with costs against the appellant.