While a local government unit is authorized 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.
STA. LUCIA REALTY & DEVELOPMENT, Inc. v. CITY OF PASIG [G.R. No. G.R. No. 166838]
Petitioner Sta. Lucia Realty & Development, Inc. (Sta. Lucia) is the registered owner of several parcels of land with Transfer Certificates of Title (TCT) Nos. 39112, 39110 and 38457, all of which indicated that the lots were located in Barrio Tatlong Kawayan, Municipality of Pasig (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 (Cainta). 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.
Upon Pasig’s petition to correct the location stated in TCT Nos. 532250, 598424, and 599131, the Land Registration Court, on June 9, 1995, 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 RTC, Branch 74 of Antipolo City (Antipolo RTC).
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 (the subject properties).
Sta. Lucia, in its Answer, 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 was allowed to file its own Answer-in-Intervention when it 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.
Holding that the TCTs were conclusive evidence as to its ownership and location, the RTC, on August 10, 1998, rendered a Decision in favor of Pasig.
On June 30, 2004, the Court of Appeals rendered its Decision, wherein it agreed with the RTC’s judgment.
Sta. Lucia and Cainta filed separate Motions for Reconsideration, which the Court of Appeals denied in a Resolution dated January 27, 2005.
Whether the RTC and the CA were correct that Sta. Lucia should continue paying its real property taxes to Pasig, as the location stated in Sta. Lucia’s TCTs.
The Local Government Unit entitled To Collect Real Property Taxes
Under Presidential Decree No. 464 or 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 Republic Act No. 7160, also known as the Local Government Code of 1991.
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.
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.
Certificates of Title as Conclusive Evidence of Location
While we fully agree that a certificate of title is conclusive as to its ownership and location, this does not preclude the filing of an action for the very purpose of attacking the statements therein.
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 Cainta’s 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 Pasig’s and Cainta’s respective territorial jurisdictions. The resolution of this dispute would necessarily ascertain the extent and reach of each local government’s authority, a prerequisite in the proper exercise of their powers, one of which is the power of taxation.
In the meantime, to avoid further animosity, Sta. Lucia is directed to deposit the succeeding real property taxes due on the subject properties, in an escrow account with the Land Bank of the Philippines.