A Collection of Case Digests

Municipality of Cainta v. Spouses Braña – On Real Property Tax and Boundary Dispute between Local Government Units

G.R. No. 199290; 03 February 2020

113

While the TCTs state that the location is in Pasig, the same cannot be relied in this case because the location of the property is precisely in dispute...

 

Facts:

Sps. Braña are the registered owners of six parcels of land located at Phase 9, Pasig Green Park, Cainta Rizal covered by Transfer Certificate of Title (TCT) Nos. 47350, 47351, 47352, 47353, 46600 and 46601 (subject properties). Sps. Braña religiously paid real estate taxes on the subject properties to the Municipality of Cainta from 1994 to 1996. Sometime in 1997, the City of Pasig filed a civil case for the collection of unpaid taxes against Sps. Braña docketed as Civil Case No. 5525. The City of Pasig claimed that the subject properties were all geographically located in Pasig City, as such, Sps. Braña should pay real estate taxes over the said subject properties to the City of Pasig. Sps. Braña, thereafter, deposited two checks representing the real estate taxes for the years 1995 to 1998 with the Metropolitan Trial Court (MTC) of Pasig City, Branch 70, where Civil Case No. 5525 is pending.

However, the Municipality of Cainta continued to demand from Sps. Braña payment of real estate taxes over the same properties. As such, Sps. Braña filed an action for interpleader to compel the Municipality of Cainta and the City of Pasig to litigate with each other; as a pre-emptive measure to another possible tax collection case that the Municipality of Cainta might file against Sps. Braña.

Meanwhile, on January 30, 1994, the Municipality of Cainta filed a petition for the settlement of boundary dispute against the City of Pasig with the Regional Trial Court of Antipolo City, Branch 74 (RTC of Antipolo), docketed as Civil Case No. 94-3006. Among the territories disputed in the aforesaid boundary dispute case are the subject properties.

In its Answer  to the action for interpleader filed by Sps. Braña, the Municipality of Cainta claims that it is entitled to the payment of real estate taxes on the ground that the subject properties are situated in Brgy. San Isidro, Cainta Rizal, which is within the geographical jurisdiction of Cainta under the Progress Map of CAD-688-D or the Cainta-Taytay Cadastral Survey. Further, the subject properties have long been registered for tax purposes in Cainta, before the City of Pasig assessed the same in 1997.

For its part, the City of Pasig claims that the locational entries in the TCTs state that the properties are located in Brgy. Santolan, Municipality of Pasig. The payment of taxes to the Municipality of Cainta is, therefore, erroneous. Further, the Department of Finance (DOF) has consistently ruled that the location of the property as indicated in the certificate of title is controlling as to the venue of payment of real estate taxes.

On June 23, 2008, the RTC of Pasig issued its Decision  in the interpleader case ordering Sps. Braña to pay the real estate taxes from the year 1996 up to the present to the City of Pasig.  The RTC of Pasig ruled that while it is improper for the court to declare any finding as to the actual location of the subject properties, since the same is within the jurisdiction of the RTC of Antipolo City, the court is still bound by the locational entries appearing on the TCTs. Thus, unless corrected by competent authority, the locational entries in the TCTs, that the properties are situated in Brgy. Santolan, Municipality of Pasig, is controlling.

Aggrieved, the Municipality of Cainta directly filed before the Supreme Court a Petition for Review on Certiorari.

Issue:

Whether the real estate taxes due upon the subject properties owned by Sps. Braña should be paid to the City of Pasig as ruled by the RTC of Pasig in the interpleader case.

Ruling:

No.

The local government unit where the property is situated has the right to collect taxes therefrom. Thus, to determine who has the right to collect taxes from Sps. Braña, it is necessary to determine the location of the property. However, this Court cannot make any definitive ruling on the location of the property due to the pending boundary dispute case between the City of Pasig and the Municipality of Cainta.

While it is true that Pasig is the location indicated in the TCTs, the Municipality of Cainta have long assessed the same for tax purposes and Sps. Braña were paying the real estate taxes to the Municipality of Cainta. It was only in 1997 that the City of Pasig assessed the properties for real estate tax purposes. Thus, while the TCTs state that the location is in Pasig, the same cannot be relied in this case because the location of the property is precisely in dispute. The RTC of Antipolo, which has jurisdiction over the boundary dispute case, would be the best forum to determine the precise metes and bounds of the City of Pasig’s and the Municipality of Cainta’s respective territorial jurisdiction, as well as the extent of each local government unit’s authority, such as its power to assess and collect real estate taxes.

Ordering Sps. Braña to pay real estate taxes to the City of Pasig simply because of the locational entries in the TCTs would be counter-productive considering that the RTC of Antipolo has not yet rendered a definitive ruling as to the precise territorial jurisdiction of the City of Pasig and the Municipality of Cainta. Thus, it would be more prudent to avoid any further animosity between the two local government units. Sps. Braña are ordered to deposit the succeeding payment of real estate taxes due on the subject properties in an account with the Land Bank of the Philippines in escrow for the City of Pasig/the Municipality of Cainta. The proceeds of the same will be released to the local government adjudged by virtue of a final judgment on the issue of territorial jurisdiction over the disputed areas.

The City of Pasig and the Municipality of Cainta are both directed to await the final judgment of their boundary dispute case in Civil Case No. 94-3006.