Case Digest: Sta. Lucia Realty v. City of Pasig
G.R. No. 166838 : June 15, 2011
STA. LUCIA REALTY & DEVELOPMENT, INC., Petitioner, v. CITY OF PASIG, Respondent,MUNICIPALITY OF CAINTA, PROVINCE OF RIZAL, Intervenor.
LEONARDO-DE CASTRO, J.:
FACTS:
Petitioner is the registered owner of several parcels of land with TCT Nos. 39112, 39110 and 38457, all of which indicated that the lots were located in Barrio Tatlong Kawayan, Municipality of Pasig.
The parcel of land covered by TCT No. 39112 was consolidated with that covered by TCT No. 518403, which was situated in Barrio Tatlong Kawayan, Municipality of Cainta, Province of Rizal.The two combined lots were subsequently partitioned into three, for which TCT Nos. 532250, 598424, and 599131, now all bearing the Cainta address, were issued.
TCT No. 39110 was also divided into two lots, becoming TCT Nos. 92869 and 92870.The lot covered by TCT No. 38457 was not segregated, but a commercial building owned by Sta. Lucia East Commercial Center, Inc., a separate corporation, was built on it.
Upon Pasigs petition to correct the location stated in TCT Nos. 532250, 598424, and 599131, the Land Registration Court ordered the amendment of the TCTs to read that the lots with respect to TCT No. 39112 were located in Barrio Tatlong Kawayan, Pasig City.
On January 31, 1994, Cainta filed a petition for the settlement of its land boundary dispute with Pasig before the Antipolo RTC docketed as Civil Case No. 94-3006, is still pending up to this date.
On November 28, 1995, Pasig filed a Complaint, docketed as Civil Case No. 65420, against Sta. Lucia for the collection of real estate taxes, including penalties and interests, on the lots covered by TCT Nos. 532250, 598424, 599131, 92869, 92870 and 38457, including the improvements thereon.
Sta. Lucia alleged that it had been religiously paying its real estate taxes to Cainta, just like what its predecessors-in-interest did, by virtue of the demands and assessments made and the Tax Declarations issued by Cainta on the claim that the subject properties were within its territorial jurisdiction.Sta. Lucia further argued that since 1913, the real estate taxes for the lots covered by the above TCTs had been paid to Cainta.
Cainta moved to intervene on the ground that its interest would be greatly affected by the outcome of the case.It averred that it had been collecting the real property taxes on the subject properties even before Sta. Lucia acquired them.Cainta further asseverated that the establishment of the boundary monuments would show that the subject properties are within its metes and bounds.
Sta. Lucia and Cainta thereafter moved for the suspension of the proceedings, and claimed that the pending petition in the Antipolo RTC, for the settlement of boundary dispute between Cainta and Pasig, presented a prejudicial question to the resolution of the case. The RTC denied such for lack of merit.Holding that the TCTs were conclusive evidence as to its ownership and location, the RTC, rendered a decision in favor of Pasig.
Judgment is likewise rendered against the intervenor Municipality of Cainta, Rizal, ordering it to refund to Sta. Lucia Realty and Development, Inc. the realty tax payments improperly collected and received by the former from the latter in the aggregate amount ofP358, 403.68.
After Sta. Lucia and Cainta filed their Notices of Appeal, Pasig, on September 11, 1998, filed a Motion for Reconsideration of the RTCs August 10, 1998 Decision.
The RTC granted Pasigs motion and modified its earlier decision to include the realty taxes due on the improvements on the subject lots.
Sta. Lucia assailed the RTCs order granting the execution which was granted by the CA. It added that the boundary dispute case presented a prejudicial question which must be decided before Pasig can collect the realty taxes due over the subject properties.
Meanwhile, the appeal filed by Sta. Lucia and Cainta was decided by the CA affirming RTCs decision declaring that there was no proper legal basis to suspend the proceedings.
Sta. Lucia and Cainta filed separate Motions for Reconsideration which was denied by the CA.
Hence, these petitions.
ISSUES:
Whether the RTC and the CA were correct in deciding Pasigs Complaint without waiting for the resolution of the boundary dispute case between Pasig and Cainta?
Whether Sta. Lucia should continue paying its real property taxes to Cainta, as it alleged to have always done, or to Pasig, as the location stated in Sta. Lucias TCTs?
HELD:
The petition is granted.
POLITICAL LAW: authority of the local government unit to collect real property taxes
The Court agrees with the CA that the resolution of the boundary dispute between Pasig and Cainta would determine which local government unit is entitled to collect realty taxes from Sta. Lucia
Under Sections 5 and 57 of the Real Property Tax Code, the authority to collect real property taxes is vested in the locality where the property is situated. This requisite was reiterated in Sections 201 and 233 of the Local Government Code.
The only import of these provisions is that, while a local government unit is authorized under several laws to collect real estate tax on properties falling under its territorial jurisdiction,it is imperative to first show that these properties are unquestionably within its geographical boundaries.
The importance of drawing with precise strokes the territorial boundaries of a local unit of government cannot be overemphasized. The boundariesmust be clear for they define the limits of the territorial jurisdiction of a local government unit.It can legitimately exercise powers of government only within the limits of its territorial jurisdiction.Beyond these limits,its acts areultra vires.
Needless to state, any uncertainty in the boundaries of local government units will sow costly conflicts in the exercise of governmental powers which ultimately will prejudice the people's welfare. This is the evil sought to be avoided by the Local Government Code in requiring that the land area of a local government unit must be spelled out in metes and bounds, with technical descriptions.
Clearly therefore, the local government unit entitled to collect real property taxes from Sta. Lucia must undoubtedly show that the subject properties are situated within its territorial jurisdiction; otherwise, it would be acting beyond the powers vested to it by law.
Although it is true that Pasig is the locality stated in the TCTs of the subject properties, both Sta. Lucia and Cainta aver that the metes and bounds of the subject properties, as they are described in the TCTs, reveal that they are within Caintas boundaries. This only means that there may be a conflict between the location as stated and the location as technically described in the TCTs.Mere reliance therefore on the face of the TCTs will not suffice as they can only be conclusive evidence of the subject properties locations if both the stated and described locations point to the same area.
The Antipolo RTC, wherein the boundary dispute case between Pasig and Cainta is pending, would be able to best determine once and for all the precise metes and bounds of both Pasigs and Caintas respective territorial jurisdictions.The resolution of this dispute would necessarily ascertain the extent and reach of each local governments authority, a prerequisite in the proper exercise of their powers, one of which is the power of taxation.
In light of the foregoing, the Pasig RTC should have held in abeyance the proceedings in Civil Case No. 65420, in view of the fact that the outcome of the boundary dispute case before the Antipolo RTC will undeniably affect both Pasigs and Caintas rights. In the meantime, to avoid further animosity, Sta. Lucia is directed to deposit thesucceedingreal property taxes due on the subject properties, in an escrow account with the Land Bank of the Philippines.
The decision and resolution of the Court of Appeals are set aside.
STA. LUCIA REALTY & DEVELOPMENT, INC., Petitioner, v. CITY OF PASIG, Respondent,MUNICIPALITY OF CAINTA, PROVINCE OF RIZAL, Intervenor.
LEONARDO-DE CASTRO, J.:
FACTS:
Petitioner is the registered owner of several parcels of land with TCT Nos. 39112, 39110 and 38457, all of which indicated that the lots were located in Barrio Tatlong Kawayan, Municipality of Pasig.
The parcel of land covered by TCT No. 39112 was consolidated with that covered by TCT No. 518403, which was situated in Barrio Tatlong Kawayan, Municipality of Cainta, Province of Rizal.The two combined lots were subsequently partitioned into three, for which TCT Nos. 532250, 598424, and 599131, now all bearing the Cainta address, were issued.
TCT No. 39110 was also divided into two lots, becoming TCT Nos. 92869 and 92870.The lot covered by TCT No. 38457 was not segregated, but a commercial building owned by Sta. Lucia East Commercial Center, Inc., a separate corporation, was built on it.
Upon Pasigs petition to correct the location stated in TCT Nos. 532250, 598424, and 599131, the Land Registration Court ordered the amendment of the TCTs to read that the lots with respect to TCT No. 39112 were located in Barrio Tatlong Kawayan, Pasig City.
On January 31, 1994, Cainta filed a petition for the settlement of its land boundary dispute with Pasig before the Antipolo RTC docketed as Civil Case No. 94-3006, is still pending up to this date.
On November 28, 1995, Pasig filed a Complaint, docketed as Civil Case No. 65420, against Sta. Lucia for the collection of real estate taxes, including penalties and interests, on the lots covered by TCT Nos. 532250, 598424, 599131, 92869, 92870 and 38457, including the improvements thereon.
Sta. Lucia alleged that it had been religiously paying its real estate taxes to Cainta, just like what its predecessors-in-interest did, by virtue of the demands and assessments made and the Tax Declarations issued by Cainta on the claim that the subject properties were within its territorial jurisdiction.Sta. Lucia further argued that since 1913, the real estate taxes for the lots covered by the above TCTs had been paid to Cainta.
Cainta moved to intervene on the ground that its interest would be greatly affected by the outcome of the case.It averred that it had been collecting the real property taxes on the subject properties even before Sta. Lucia acquired them.Cainta further asseverated that the establishment of the boundary monuments would show that the subject properties are within its metes and bounds.
Sta. Lucia and Cainta thereafter moved for the suspension of the proceedings, and claimed that the pending petition in the Antipolo RTC, for the settlement of boundary dispute between Cainta and Pasig, presented a prejudicial question to the resolution of the case. The RTC denied such for lack of merit.Holding that the TCTs were conclusive evidence as to its ownership and location, the RTC, rendered a decision in favor of Pasig.
Judgment is likewise rendered against the intervenor Municipality of Cainta, Rizal, ordering it to refund to Sta. Lucia Realty and Development, Inc. the realty tax payments improperly collected and received by the former from the latter in the aggregate amount ofP358, 403.68.
After Sta. Lucia and Cainta filed their Notices of Appeal, Pasig, on September 11, 1998, filed a Motion for Reconsideration of the RTCs August 10, 1998 Decision.
The RTC granted Pasigs motion and modified its earlier decision to include the realty taxes due on the improvements on the subject lots.
Sta. Lucia assailed the RTCs order granting the execution which was granted by the CA. It added that the boundary dispute case presented a prejudicial question which must be decided before Pasig can collect the realty taxes due over the subject properties.
Meanwhile, the appeal filed by Sta. Lucia and Cainta was decided by the CA affirming RTCs decision declaring that there was no proper legal basis to suspend the proceedings.
Sta. Lucia and Cainta filed separate Motions for Reconsideration which was denied by the CA.
Hence, these petitions.
ISSUES:
Whether the RTC and the CA were correct in deciding Pasigs Complaint without waiting for the resolution of the boundary dispute case between Pasig and Cainta?
Whether Sta. Lucia should continue paying its real property taxes to Cainta, as it alleged to have always done, or to Pasig, as the location stated in Sta. Lucias TCTs?
HELD:
The petition is granted.
POLITICAL LAW: authority of the local government unit to collect real property taxes
The Court agrees with the CA that the resolution of the boundary dispute between Pasig and Cainta would determine which local government unit is entitled to collect realty taxes from Sta. Lucia
Under Sections 5 and 57 of the Real Property Tax Code, the authority to collect real property taxes is vested in the locality where the property is situated. This requisite was reiterated in Sections 201 and 233 of the Local Government Code.
The only import of these provisions is that, while a local government unit is authorized under several laws to collect real estate tax on properties falling under its territorial jurisdiction,it is imperative to first show that these properties are unquestionably within its geographical boundaries.
The importance of drawing with precise strokes the territorial boundaries of a local unit of government cannot be overemphasized. The boundariesmust be clear for they define the limits of the territorial jurisdiction of a local government unit.It can legitimately exercise powers of government only within the limits of its territorial jurisdiction.Beyond these limits,its acts areultra vires.
Needless to state, any uncertainty in the boundaries of local government units will sow costly conflicts in the exercise of governmental powers which ultimately will prejudice the people's welfare. This is the evil sought to be avoided by the Local Government Code in requiring that the land area of a local government unit must be spelled out in metes and bounds, with technical descriptions.
Clearly therefore, the local government unit entitled to collect real property taxes from Sta. Lucia must undoubtedly show that the subject properties are situated within its territorial jurisdiction; otherwise, it would be acting beyond the powers vested to it by law.
Although it is true that Pasig is the locality stated in the TCTs of the subject properties, both Sta. Lucia and Cainta aver that the metes and bounds of the subject properties, as they are described in the TCTs, reveal that they are within Caintas boundaries. This only means that there may be a conflict between the location as stated and the location as technically described in the TCTs.Mere reliance therefore on the face of the TCTs will not suffice as they can only be conclusive evidence of the subject properties locations if both the stated and described locations point to the same area.
The Antipolo RTC, wherein the boundary dispute case between Pasig and Cainta is pending, would be able to best determine once and for all the precise metes and bounds of both Pasigs and Caintas respective territorial jurisdictions.The resolution of this dispute would necessarily ascertain the extent and reach of each local governments authority, a prerequisite in the proper exercise of their powers, one of which is the power of taxation.
In light of the foregoing, the Pasig RTC should have held in abeyance the proceedings in Civil Case No. 65420, in view of the fact that the outcome of the boundary dispute case before the Antipolo RTC will undeniably affect both Pasigs and Caintas rights. In the meantime, to avoid further animosity, Sta. Lucia is directed to deposit thesucceedingreal property taxes due on the subject properties, in an escrow account with the Land Bank of the Philippines.
The decision and resolution of the Court of Appeals are set aside.
