#31 YMCA v.

CIR - MERCADO
TOPIC: Constitutional limitations (Prohibition against
taxation of religious, charitable entities and
educational entities and tax exemption granted nonstock, non-profit educational institutions)
FACTS:
1. The City of Manila, contending that the property of
YMCA is taxable, assessed it and levied a tax
thereon.
2. It was paid under protest and this action begun to
recover it on the ground that the property was
exempt from taxation under the charter of the city
of Manila.
3. YMCA came to the Philippines with the army of
occupation.
4. When the large body of troops in Manila was
removed to permanent quarters at Fort William
McKinley, an independent association for Manila
was organized under the direction of the Army and
Navy departments.
5. After the organization of the association, the
directors made a formal request to the international
committee of the YMCA in NY for assistance and
cooperation of its foreign department.
6. Mr. Mott, general secretary of the foreign
department, visited Manila.
7. After a conference with the directors and interested
friends, it was decided to conduct a campaign to
secure funds for an adequate and permanent
association.
8. Mr. Mott guaranteed P170,000 for construction of a
building on condition that friends in the Philippines
secure the site and adequately furnish the building.
9. The purposes of the association, as set forth in the
charter and constitution shall be exclusively

religious, charitable and education, in developing

the Christian character and usefulness of its
members and in improving the spiritual, mental,
social and physical condition of young men.
10.The association claims exemption from taxation on
the ground that it is a religious, charitable and
educational institution combined.
11.It is claimed, however, that the institution is run as
a business in that it keeps a lodging and boarding
house.
12.The real purpose of the association is not primarily,
to obtain the money which comes from the lodgers
and boarders, but to keep the membership
continually within the sphere of influence of the
institution.
ISSUE: WON YMCA is taxable YES.
HELD:
1. We regard the feature of the institution not as a
business or means of making money, but as a very
efficient means of maintaining the influence of the
institution over its membership.
2. In relation to the description of the building, no part
is occupied for any institutional purposes.
3. From end to end, the building grounds are devoted
exclusively to the purposes stated in the
constitution of the association.
4. We are aware that there are many decisions holding
that institutions of this character are not exempt
from taxation, but, on investigation, we find that
the majority of them are bases on statutes much
narrower than the one under consideration and that
in all probability the decision would have been
otherwise if the court had been passing on a statute
similar to ours.

5. There is no doubt about the correctness of the

contention that an institution must devote itself
exclusively to one or the other of the purposes
mentioned in the statute before it can be exempt
from taxation; but the statute does not say that it
must be devoted exclusively to any one of the
purposes therein mentioned.
6. It may be a combination of two or three or more of
those purposes and still be entitled to exemption.
7. We believe that YMCA is an institution used
exclusively for all three purposes, and as such, it is
entitled to be exempted from taxation.
DISSENTING OPINION
1. lt is the theory of the Government that all property
within the State held by individuals or corporations
should contribute equally, in proportion to its value,

to the support of the Government, in return for the

protection which such property receives at the
hands of the Government.
2. This being the policy of the Government, a law
which relieves any property from this burden should
be strictly construed, to the end that no individual
or corporation shall be relieved from bearing his or
its full share of the burdens of taxation unless the
law expressly so provides. This exemption should
not be allowed by any strained or unnatural
interpretation of the. law.
3. I am wholly unable to agree, that the lands or
buildings occupied by it are 'used exclusively for
religious, charitable, scientific or educational
purposes, and not for profit,' the only ground upon
which the exemption from taxation in question in
these proceedings can be sustained.