Case Digest (G.R. No. L-47369)
Facts:
In Metropolitan Waterworks and Sewerage System vs. Local Government of Quezon City (G.R. No. 194388, November 7, 2018), petitioner Metropolitan Waterworks and Sewerage System (MWSS) challenged the assessment of real property taxes by the Local Government of Quezon City (LGQC), represented by its City Treasurer, City Assessor, Sangguniang Panlungsod, and City Mayor. MWSS was created by Republic Act No. 6234 (1971) to supply water and operate sewerage systems in Metro Manila, later amended by Presidential Decree No. 425 (1974) to vest it with corporate powers and a P1,000,000,000 capital stock subscribed solely by the government. In July 2007, LGQC issued final notices of real property tax delinquency totaling ₱237,108,043.83 and, upon nonpayment, warrants of levy and a notice of auction sale. MWSS filed a Petition for Certiorari and Prohibition with Prayer for Temporary Restraining Order (TRO) in the Court of Appeals (CA) on September 26, 2007, arguing its properties were devotedCase Digest (G.R. No. L-47369)
Facts:
- Creation and Charter of the Metropolitan Waterworks and Sewerage System (MWSS)
- Republic Act No. 6234 (June 19, 1971) created MWSS as a government corporation without capital stock, mandated “to insure an uninterrupted and adequate supply and distribution of potable water for domestic and other purposes and the proper operation and maintenance of sewerage systems” within Metro Manila, Rizal, and part of Cavite.
- Presidential Decree No. 425 (March 29, 1974) amended MWSS’s charter, authorizing a capital stock of ₱1,000,000,000 (10 million shares at ₱100 par value), all subscribed by the government; shares were non-transferable and non-encumberable.
- Real Property Tax Assessment and Proceedings
- July–September 2007 – The Quezon City local government issued final notices of real property tax delinquency totaling ₱237,108,043.83, then warrants of levy and a Notice of Sale (public auction set for September 27, 2007) on MWSS properties in Quezon City.
- September 26, 2007 – MWSS filed a petition for certiorari and prohibition with prayer for injunctive relief directly before the Court of Appeals (CA), alleging its properties were exclusively devoted to public use and thus tax-exempt.
- September 27, 2007 to December 19, 2007 – CA issued a Temporary Restraining Order (TRO) and later a writ of preliminary injunction enjoining the auction.
- October 19, 2010 – CA Decision (Special Seventeenth Division) denied MWSS’s petition for lack of merit, lifted the injunction, and held MWSS could not invoke exemption under Section 133(o) of the Local Government Code (LGC) because it was not a municipal corporation and performed proprietary functions.
- November 2010 to September 2011 – MWSS filed a petition for certiorari with the Supreme Court (SC) and ancillary motions; SC issued TROs (January 26 and September 7, 2011) enjoining further auctions pending resolution of the petition.
Issues:
- Did MWSS’s direct filing of its petition with the Court of Appeals violate the judicial “hierarchy of courts” doctrine requiring initial recital in the Regional Trial Court?
- Is MWSS—a government instrumentality vested with corporate powers—exempt from local real property tax under the Local Government Code and relevant precedents, or is it taxable as a government-owned and controlled corporation (GOCC)?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)