Cainta v. Pasig (Case Digest. G.R. No. 176703)


SUMMARY OF RULING: Considering that the TCTs show that the subject properties are located in Pasig, Pasig is deemed the LGU entitled to collect local business taxes and realty taxes, as well as relevant fees and charges until an amendment, if any, to the location stated therein is ordered by the land registration court after proper proceedings.

Petitioner Uniwide does business on parcels of land covered by Transfer Certificate of Title (TCT) Nos. 72983, 74003, and PT-74468 (subject properties). The location of the parcels of land is indicated as being in Pasig.

In 1989, Uniwide applied for and was issued a building permit by Pasig for its building. Uniwide also secured the requisite Mayor's Permit for its business from Pasig and consequently paid thereto its business and realty taxes, fees, and other charges from 1989 to 1996.

However, beginning 1997, Uniwide did not file any application for renewal of its Mayor's Permit in Pasig nor paid the local taxes thereto. Instead, it paid local taxes to Cainta after the latter gave it notice, supported by documentary proof of its claims, that the subject properties were within Cainta's territorial jurisdiction.

Pasig filed a case for collection of local business taxes, fees, and other legal charges due for fiscal year 1997 against Uniwide with the RTC-Pasig. Uniwide, in turn, filed a third-party complaint against Cainta for reimbursement of the taxes, fees, and other charges it had paid to the latter in the event that Uniwide was adjudged liable for payment of taxes to Pasig.

On 6 May 1999, Uniwide sold the subject properties to Robinsons Land Corporation.

Prior to the institution of said tax collection case, Cainta had filed a petition for the settlement of its boundary dispute with Pasig in RTC-Antipolo.

Cainta filed a Motion to Dismiss or Suspend Proceedings on the ground of litis pendentia on 6 November 2001, in view of the pending petition for settlement of the land boundary dispute with Pasig. RTC-Pasig denied the motion. Reconsideration denied.

Thereafter, Cainta filed a petition for certiorari with the CA with prayer for TRO. No TRO was issued. CA dismissed Cainta's petition.RTC-Pasig ruled in favor of Pasig. Indefeasibility of the Torrens title indicating Pasig as location. Cannot collaterally attack Torrens title. Pasig has the right to collect, administer, and appraise business taxes, real estate taxes, and other fees and charges from 1997 up to the present. Ordered Uniwide to pay Pasig local taxes and fees and real estate taxes beginning 1997, as well as attorney's fees at 500K plus costs.
As to Uniwide against Cainta, RTC-Pasig ruled for Uniwide. Directed Cainta to return these amounts to Uniwide pursuant to the principle against unjust enrichment, plus attorney's fees and costs.

  1. For local taxes, whether the location of property should be determined by that indicated in the TCT despite documents showing otherwise;
  2. Whether the action for tax collection can proceed despite the pendency of the boundary dispute case and the petition for certiorari before the CA;
  3. If ever, whether Pasig should recover the taxes due directly from Cainta, not from Uniwide;
  4. Whether Uniwide should pay real propety taxes to Pasig as ordered by the RTC;
  5. Whether Cainta should return the taxes paid by Uniwide; and
  6. Whether the award of attorney's fees was proper.


FIRST ISSUE: For purposes of complying with local tax liabilities, the taxpayer is entitled to rely on the location stated in the certificate of title.

Under the Local Government Code (LGC), local business taxes are payable for every separate or distinct establishment or place where business subject to the tax is conducted, which must be paid by the person conducting the same. Section 150 therein provides the situs of taxation.The tax thereon shall accrue and shall be paid to the municipality where such branch or sales outlet is located.

Since it is clear that local business taxes and realty taxes are to be collected by the local government unit where the business is conducted or the real property is located, the primordial question is: how is location determined for purposes of identifying the LGU entitled to collect taxes.

The location stated in the certificate of title should be followed until amended through proper judicial proceedings.
In Odsique v. Court of Appeals, the Supreme Court held that a certificate of title is conclusive not only of ownership of the land but also its location.

Moreover, the Implementing Rules and Regulations (IRR) of the LGC provides that in case of a boundary dispute, the status of the affected area prior to the dispute shall be maintained and continued for all purposes. Until ordered by a land registration court to be amended, the location stated in the TCTs shall be presumed correct and subsisting for the purpose of determining which LGU has taxing jurisdiction over the subject properties.

SECOND ISSUE: The action for tax collection can proceed despite the pendency of the boundary dispute case before the RTC-Antipolo and the petition for certiorari before the CA.

There was no litis pendentia or forum shopping as would justify the dismissal of the tax collection case. The test to determine the existence of forum shopping is whether the elements of litis pendentia are present, or whether a final judgment in one case amounts to res judicata in the other.

Uniwide is not a party to the boundary dispute case between Cainta and Pasig, and the first action is for settlement of boundary dispute while the second action is for collection of tax.

Judgment in the boundary dispute case will not amount to res judicata in the tax collection case. Moreover, the boundary dispute case DOES NOT present a prejudicial question to suspend of the tax collection case.

As to the petition in the CA, a special civil action for certiorari under Rule 65 is an original or independent action. An independent action does not interrupt the course of the case unless there be a writ of injunction stopping it.

THIRD ISSUE: There is also no merit to Uniwide's contention that Pasig should directly recover from Cainta the tax payments under consideration, as a matter of expediting and inexpensively settling the tax liabilities.

It is undisputed that Uniwide is the person conducting the business under consideration. Thus, it is the person against whom Pasig may properly pursue for payment of local business taxes.

FOURTH ISSUE: It is wrong to direct Uniwide to also pay real estate taxes to Pasig for the applicable years. In its complaint, Pasig did not allege that Uniwide is also liable for payment of real estate taxes.

In fact, as alleged by Pasig and admitted by Uniwide in its answer, the realty taxes for the subject properties are paid by their registered owner. The subject TCTs are registered under the name of Uniwide Sales Realty and Resources Corporation ("USRRC"), an affiliate of Uniwide, and a corporation with separate and distinct personality from the latter which is not a party to the case at bar, further considering that the subject properties had already been conveyed to Robinsons Land Corporation on 6 May 1999.

In fine, for lack of sufficient proof to hold Uniwide liable for real estate taxes, it must only be liable to pay local business taxes to Pasig for the applicable years.

FIFTH ISSUE: Cainta is obligated to return the taxes erroneously paid to it by Uniwide pursuant to the principle against unjust enrichment. The principle of unjust enrichment has two conditions. First, a person must have been benefited without a real or valid basis or justification. Second, the benefit was derived at another person's expense or damage.

As previously discussed, prior to final adjudication by the RTC-Antipolo on the boundary dispute case and necessary amendment to the TCTs, Cainta has no apparent right to collect the taxes on the subject properties. Thus, when Uniwide paid taxes to it, Cainta was benefited without real or valid basis, which benefit was derived at the expense of both Uniwide and Pasig.

SIXTH ISSUE: The award of attorney's fees is not proper.

The award of attorney's fees is improper because the RTC-Pasig automatically awarded the same in the dispositive portion of its decision without stating the factual or legal basis therefor in the body of the decision.

The award of attorney's fees is the exception rather than the general rule. As such, it is necessary for the trial court to make findings of fact and law that would bring the case within the exception and justify the grant of such award. The matter of attorney's fees cannot be mentioned only in the dispositive portion of the decision. They must be clearly explained and justified by the trial court in the body of its decision.


[1] Section 31. Decree of registration. Every decree of registration issued by the Commissioner shall bear the date, hour and minute of its entry, and shall be signed by him. It shall state whether the owner is married or unmarried, and if married, the name of the husband or wife: Provided, however, that if the land adjudicated by the court is conjugal property, the decree shall be issued in the name of both spouses. If the owner is under disability, it shall state the nature of disability, and if a minor, his age. It shall contain a description of the land as finally determined by the court, and shall set forth the estate of the owner, and also, in such manner as to show their relative priorities, all particular estates, mortgages, easements, liens, attachments, and other encumbrances, including rights of tenant-farmers, if any, to which the land or owner's estate is subject, as well as any other matters properly to be determined in pursuance of this Decree.

The decree of registration shall bind the land and quiet title thereto, subject only to such exceptions or liens as may be provided by law. It shall be conclusive upon and against all persons, including the National Government and ail branches thereof, whether mentioned by name in the application or notice, the same being included in the general description "To all whom it may concern.

[2] Property Registration Decree (PD 1529), Section 15.
[3] Property Registration Decree (PD 1529), Section 17.
[4] Property Registration Decree (PD 1529), Section 31.
[5] Section 29. Judgment confirming title. All conflicting claims of ownership and interest in the land subject of the application shall be determined by the court. If the court, after considering the evidence and the reports of the Commissioner of Land Registration and the Director of Lands, finds that the applicant or the oppositor has sufficient title proper for registration, judgment shall be rendered confirming the title of the applicant, or the oppositor, to the land or portions thereof.
[6] 305 Phil. 25, 30 (1994).
[7] Diaz, et al. v. The Secretary of Finance, et al., 669 Phil. 371, 393 (2011).
[8] Implementing Rules and Regulations of the LGC, Art. 18.
[9] Heirs of Marcelo Sotto v. Palicte, 726 Phil. 651, 654 (2014).
[10] Province of Leyte v. Energy Development Corporation, G.R. No. 203 124, 22 June 2015, 760 SCRA 149, 153; Republic of the Philippines v. Bayao, 710 Phil. 279, 286 (2013).
[26] Mortel v. Judge Leido, Jr., 297 Phil. 198, 204 (1993), citing Palomares, et al. v. Jimenez, 90 Phil. 773, 776 (1952).
[11] CIVIL CODE, Art. 2154-2155.
[12] Loria v. Munoz, Jr., 745 Phil. 506, 517 (2014).
[13] S.C. Megaworld Construction and Development Corporation v. Parada, 717 Phil. 752, 774-775 (2013).
[14] Frias v. San Diego-Sison, 549 Phil. 49, 64 (2007).

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