THE PROVINCE OF ABRA, REPRESENTED BY LADISLAO ANCHETA, PROVINCIAL ASSESSOR, PETITIONER, VS. HONORABLE HAROLD M. HERNANDO, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH I, COURT O…

On the face of this certiorari and mandamus
petition filed by the Province of Abra,^[1]
it clearly appears that the actuation of respondent Judge Harold M. Hernando of
the Court of First Instance of Abra left much to be desired.  First, there was a denial of a motion to
dismiss^[2]
an action for declaratory relief by private respondent Roman Catholic Bishop of Bangued desirous of being exempted from a real
estate tax followed by a summary judgment^[3] granting such exemption, with­out even
hearing the side of petitioner.  In the rather vigorous language of the Acting
Provincial Fiscal, as counsel for petitioner, respondent Judge “virtually
ignored the pertinent provisions of the Rules of Court; * * * wantonly violated
the rights of petitioner to due process, by giving due course to the petition
of private respondent for declara­tory relief, and thereafter without allowing
petitioner to answer and without any hearing, adjudged the case; all in total
disregard of basic laws of procedure and basic provisions of due process in the
constitution, thereby indicating a failure to grasp and understand the law,
which goes into the competence of the Honorable Presiding Judge.”^[4]

It was the submission of
counsel that an action for declaratory relief would be proper only before a
breach or violation of any statute, executive order or regulation.^[5] Moreover, there being a tax assessment made
by the Provincial Assessor on the properties of respondent Roman Catholic
Bishop, petitioner failed to exhaust the administrative remedies available
under Presidential Decree No. 464 before filing such court action.  Further, it was pointed out to respondent
Judge that he failed to abide by the pertinent provision of such Presidential
Decree which provides as follows: 
“No court shall entertain any suit assail­ing the validity of a tax
assessed under this Code until the taxpayer, shall have paid, under protest,
the tax assessed against him nor shall any court declare any tax invalid by
reason of irregularities or informalities in the proceedings of the officers
charged with the assessment or collection of taxes, or of failure to perform
their duties within this time herein specified for their performance unless
such irregularities, informalities or failure shall have impaired the
substantial rights of the taxpayer; nor shall any court declare any portion of
the tax assessed under the provisions of this Code invalid except upon
condition that the taxpayer shall pay the just amount of the tax, as determined
by the court in the pending proceeding.”^[6]

When asked to comment,
respondent Judge began with the allegation that there “is no question that
the real properties sought to be taxed by the Province of Abra are properties
of the respondent Roman Catholic Bishop of Bangued, Inc.”^[7] The very next sentence assumed the very
point it asked when he categorically stated: 
“Likewise, there is no dispute that the properties including their
produce are actually, directly and exclusively used by the Roman Catholic
Bishop of Bangued, Inc. for religious or
charitable purposes.”^[8] For him then:  “The proper remedy of the petitioner is
appeal and not this special civil action.”^[9] A more exhaustive comment was submitted by
private respondent Roman Catholic Bishop of Bangued, Inc.  It was, however, unable to lessen the force
of the objection raised by petitioner Province of Abra, especially the due
process aspect.  It is to be admitted
that his opposition to the petition, pressed with vigor, ostensibly finds a
semblance of support from the authorities cited.  It is thus impressed with a scholarly aspect.  It suffers, however, from the grave infirmity
of stating that only a pure question of law is presented when a claim for
exemption is made.

The petition must be granted.

1.  Respondent Judge would
not have erred so grievously had he merely compared the provisions of the
present Constitution with that appearing in the 1935 Charter on the tax
exemption of “lands, buildings, and improvements.” There is a marked
difference.  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.”^[10]
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.^[11]
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.  According to Commissioner of Internal Revenue
v. Guerrero:^[12]
“From 1906, in Catholic Church v. Hastings to 1966, in Esso Standard
Eastern, Inc. v. Acting Commissioner of Customs, it has been the constant and
uniform holding that exemption from taxation is not favored and is never
presumed, so that if granted it must be strictly construed against the
taxpayer.  Affirmatively put, the law
frowns on exemption from taxation,
hence, an exempting provision should be construed strictissimi juris.”^[13] In Manila Electric Company v. Vera,^[14] a 1975 decision, such principle was
reiterated, reference being made to Republic Flour Mills, Inc. v. Commissioner
of Internal Revenue;^[15] Commissioner of Customs v. Philippine
Acetylene Co. & CTA;^[16] and Davao Light and Power Co., Inc. v.
Commissioner of Customs.^[17]

2.  Petitioner Province of
Abra is therefore fully justified in invoking the protection of procedural due
process.  If there is any case where
proof is necessary to demonstrate that there is compliance with the constitutional
provision that allows an exemption, this is it. 
Instead, respondent Judge accepted at its face the allegation of private
respondent.  All that was alleged in the
petition for declaratory relief filed by private respondents, after mentioning
certain parcels of land owned by it, are that they are used “actually,
directly and exclusively” as sources of support of the parish priest and
his helpers and also of private respondent Bishop.^[18]
In the motion to dismiss filed on behalf of petitioner Province of Abra, the
objection was based primarily on the lack of jurisdiction, as the validity of a
tax assessment may be questioned before the Local Board of Assessment Appeals
and not with a court.  There was also
mention of a lack of a cause of action, but only because, in its view,
declaratory relief is not proper, as there had been breach or violation of the
right of of the right of government to assess and collect taxes on such
property.  It clearly appears, therefore,
that in failing to accord a hearing to petitioner Province of Abra and deciding
the case immediately in favor of private respondent, respondent Judge failed to
abide by the consti­tutional command of procedural due process.

WHEREFORE, the petition is granted and the resolution of
June 19, 1978 is set aside.  Respondent
Judge, or who ever is acting on his behalf, is ordered to hear the case on the
merit.  No costs.

Barredo, Concepcion, Jr., and De
Castro, JJ., concur.

Aquino, J., concurs in the
result.

Abad Santos, J., on official
leave.

^[1]
In the suit it was represented by the Provincial
Assessor, Ladislao Ancheta.

^[2]
Petition, par. 7, Annex F.

^[3]
Ibid, par. 10, Annex J.

^[4]
Ibid, par. 13.

^[5]
According to Rule 64, Section 1 of the Rules of Court:  “Any person interested under a deed,
will, contract or other written instrument, or whose rights are affected by a
statute, executive order or regulation, or ordinance, may, before breach or
violation thereof, bring an action to deter­mine any question of construction
or validity arising under the instrument or statute and for a declaration of
his rights or duties thereunder.”

^[6]
Section 64, Presidential Decree No. 464
(1974).

^[7]
Comment, par. 1.  He made mention of the fact that it was
represented by Bishop Odilo Etspueler and Reverend Felipe Flores, private
respondents.

^[8]
Ibid, par. 2. 
(underlining by respondent Judge)

^[9]
Ibid, 3.

^[10]
Article VI, Section 22, par. (3) of the
1935 Constitution.

^[11]
According to Article VIII, Section 17, par. (3) of the present Constitution: 
“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.”

^[12]
L-20812, September 22, 1967, 21 SCRA 180.

^[13]
Ibid. 183.  Catholic Church v. Hastings is reported in 5 Phil. 701
and Esso Standard Eastern, Inc. v.
Acting Com­missioner of Customs, L-21841, October 28, 1966, in 18 SCRA
488.  The footnote mentioned 8 additional
cases.

^[14]
L-29987, October 22, 1975, 67 SCRA 351.

^[15]
L-25602, February 18, 1970, 31 SCRA
520.

^[16]
L-22443, May 29, 1971, 39 SCRA 72.

^[17]
L-28902, March 29, 1972, 44 SCRA 122.

^[18]
Petition, Annex A, par. 7.