Title
Municipality of Cainta, Rizal vs. Spouses Ernesto E. Braaa and Edna C. Braaa
Case
G.R. No. 199290
Decision Date
Feb 3, 2020
Spouses BraAa, owners of disputed properties, paid taxes to Cainta but faced claims from Pasig. Courts ruled taxes be held in escrow pending resolution of boundary dispute between Cainta and Pasig.
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Case Digest (G.R. No. 199290)

Facts:

Ownership and Tax Payment

  • Spouses Ernesto E. BraAa and Edna C. BraAa (Sps. BraAa) 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.
  • From 1994 to 1996, Sps. BraAa paid real estate taxes on these properties to the Municipality of Cainta.

Tax Dispute

  • In 1997, the City of Pasig filed a civil case (Civil Case No. 5525) against Sps. BraAa for unpaid taxes, claiming the properties were geographically located in Pasig City and thus subject to Pasig's jurisdiction for tax collection.
  • Sps. BraAa deposited checks representing real estate taxes for 1995 to 1998 with the Metropolitan Trial Court (MTC) of Pasig City, where Civil Case No. 5525 was pending.
  • Despite this, the Municipality of Cainta continued to demand payment of real estate taxes from Sps. BraAa.

Boundary Dispute

  • On January 30, 1994, the Municipality of Cainta filed a petition for settlement of boundary dispute against the City of Pasig (Civil Case No. 94-3006) with the Regional Trial Court (RTC) of Antipolo City. The disputed areas included the subject properties.
  • On December 16, 2002, the RTC of Antipolo issued an Injunction Order restraining the City of Pasig from collecting taxes, auctioning the properties, or making jurisdictional claims over the disputed areas.

Interpleader Case

  • Sps. BraAa filed an action for interpleader (SCA No. 1624) against the Municipality of Cainta and the City of Pasig to compel them to litigate their claims over the real estate taxes.
  • The RTC of Pasig ruled on June 23, 2008, that Sps. BraAa should pay real estate taxes to the City of Pasig based on the locational entries in the TCTs, which indicated the properties were in Barangay Santolan, Pasig.

Issue:

  1. Whether the RTC of Pasig erred in asserting jurisdiction over the territorial and jurisdictional rights of the Municipality of Cainta and the City of Pasig, given the pending boundary dispute case in the RTC of Antipolo.
  2. Whether the RTC of Pasig erred in ordering Sps. BraAa to pay real estate taxes to the City of Pasig despite the Injunction Order issued by the RTC of Antipolo.

Ruling:

The Supreme Court partially granted the petition, reversing the RTC of Pasig's decision. The Court ruled that:

  1. The RTC of Pasig should not have adjudicated the territorial jurisdiction issue, as it was within the jurisdiction of the RTC of Antipolo in the boundary dispute case.
  2. Sps. BraAa are ordered to deposit future real estate taxes in an escrow account with the Land Bank of the Philippines, to be released to the local government unit adjudged to have territorial jurisdiction over the disputed areas upon final resolution of the boundary dispute case.

Ratio:

  1. Jurisdiction Over Boundary Disputes: The RTC of Antipolo has exclusive jurisdiction to resolve the boundary dispute between the Municipality of Cainta and the City of Pasig. The RTC of Pasig's decision interfered with this jurisdiction.
  2. Tax Collection During Disputes: While the TCTs indicate the properties are in Pasig, the boundary dispute renders this inconclusive. Payment of real estate taxes must continue, but the funds should be held in escrow until the boundary dispute is resolved.
  3. Avoiding Further Conflict: The escrow arrangement prevents further animosity between the two local governments and ensures that the rightful taxing authority receives the taxes once the boundary dispute is settled.


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