CITY ASSESSOR OF CEBU vs. BENEVOLA DE CEBU

BENEVOLA DE CEBU is a non-stock non-profit organization and hospital. In 1990 It constructed a Medical Arts building right beside it. In 1998 the CITY ASSESSOR OF CEBU issued a certification classifying the new building as commercial and assessed the building with a market value of roughly P28M, coming up with an assessed value at around close to P10M  at the assessment level of 35% and not 10% which was then currently imposed on private respondent (Benevola de Cebu).  

The City Assessor of Cebu, petitioner in this case claimed that the building is used as commercial clinic/spaces for renting out physicians and thus classified as commercial.

Benevola de Cebu contended that the building is used ACTUALLY, DIRECTLY AND EXCLUSIVELY part of the hospital and should have an assessment level of 10% as it was currently imposed. 

ISSUE:   Whether or not the new building is liable to pay at the 35% assessment level?

RULING:    NO.  It is not commercial. 

We hold that the new building is an integral part of the hospital and should not be assessed as commercial. 

Being a TERTIARY HOSPITAL, it is mandated to be fully departmentalized and be equipped with the service capabilities needed to support certified medical specialists and other licensed physicians.

The fact that they are holding office in a separate building does not take away the essence and nature of their services vis-à-vis the overall operation of the hospital and to patients.

     

Under the Local Government Code, Sec. 26:  “ALL BUILDINGS AND OTHER IMPROVEMENTS THEREON actually, directly, and exclusively used for hospitals, cultural or scientific purposes and those owned and used by local water districts.. shall be classified as SPECIAL  (NOT COMMERCIAL). “

Benevola wins this case.