WENCESLAO PASCUAL vs.

THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS

Facts: Petitioner Wenceslao Pascual, as Provincial Governor of Rizal, instituted an action for
declaratory relief, with injunction, upon the ground that RA 920, entitled "An Act Appropriating
Funds for Public Works contained, in section 1-C (a) thereof, an item of P85,000.00 "for the
construction, reconstruction, repair, extension and improvement" of Pasig feeder road terminals.
He alleged that at the time of the passage and approval of said Act, the aforementioned feeder
roads were "nothing but projected and planned subdivision roads, not yet constructed and do not
connect any government property or any important premises to the main highway. Moreover, he
claimed that the roads was connected to the subdivision owned by respondent Jose C. Zulueta,
who, at the time of the passage and approval of said Act, was a member of the Senate of the
Philippines. Zulueta addressed a letter to the Municipal Council of Pasig, Rizal offering to
donate said projected feeder roads to the municipality but no deed of donation in favor of the
municipality of Pasig was executed. Pascual alleged that the construction of the projected feeder
roads in question with public funds would greatly enhance or increase the value of the
aforementioned subdivision of respondent Zulueta, aside from relieving him from the burden of
constructing his subdivision streets or roads at his own expense.
Issue: Whether or not the contested provision of RA 920 should be declared null and void.
Held: Yes. It is a general rule that the legislature is without power to appropriate public revenue
for anything but a public purpose. It is the essential character of the direct object ofthe
expenditure which must determine its validity as justifying a tax, and not the magnitude of the
interest to be affected nor the degree to which the general advantage of the community, and thus
the public welfare, may be ultimately benefited by their promotion. Incidental to the public or to
the state, which results from the promotion of private interest and the prosperity of private
enterprises or business, does not justify their aid by the use public money.

Inasmuch as the land on which the projected feeder roads were to be constructed belonged then
to respondent Zulueta, the result is that said appropriation sought a private purpose, and hence,
was null and void. The donation to the Government, over five (5) months after the approval and
effectivity of said Act, did not cure its aforementioned basic defect.

BOARD OF ASSESSMENT APPEALS, PROVINCE OF LAGUNA, vs. COURT OF TAX APPEALS and THE
NATIONAL WATERWORKS AND SEWERAGE AUTHORITY (NAWASA)

Facts: Petitioner National Waterworks and Sewerage Authority (NWSA) is a public corporation
owned by the Government of the Philippines as well as all property comprising waterworks and
sewerage systems placed under it. At the time that the Cabuyao-Sta. Rosa-Bian Waterworks
System was taken over by petitioner NWSA in 1956, the former was self-supporting and
revenue-producing, but that all its surplus income are not declared as profits as this surplus are or
may be invested for the expansion thereof. It was also in the same year when the Provincial
Assessor of Laguna assessed, for purposes of real estate taxes, the property comprising the
Cabuyao-Sta. Rosa-Bian Waterworks System. NWSA protested, claiming that the property
described are exempted from the payment of real estate taxes in view of the nature and kind of
said property and functions and activities of petitioner. The petitioner claimed that although said
properties belong to the Republic of the Philippines, the same holds it, not in its governmental,
political or sovereign capacity, but in a private, proprietary or patrimonial character, which,
allegedly, is not covered by the exemption.

Issue: Whether or not the water pipes, reservoir, intake and buildings used by NAWASA in the
operation of its waterworks system in the municipalities of Cabuyao, Sta. Rosa and Bian,
province of Laguna, are subject to real estate tax.

Held: No. In exempting from taxation property owned by the Republic of the Philippines, any
province, city, municipality or municipal district, said section 3(a) of Republic Act No. 470
makes no distinction between property held in a sovereign, governmental or political capacity
and those possessed in a private, proprietary or patrimonial character. And where the law does
not distinguish neither shall the Court do, unless there are facts and circumstances clearly
showing that the lawmaker intended the contrary. Taxes are financial burdens imposed for the
purpose of raising revenues with which to defray the cost of the operation of the Government,
and a tax on property of the Government, whether national or local, would merely have the effect
of taking money from one pocket to put it in another pocket.