Case Digest (G.R. No. 248033) Core Legal Reasoning Model
Facts:
The case involves a petition for review on certiorari filed by the Provincial Government of Cavite and the Provincial Treasurer of Cavite (petitioner) against CQM Management, Inc. (respondent) in G.R. No. 248033, decided by the Supreme Court on July 15, 2020. The dispute arose due to the proposed tax delinquency sale of certain real properties owned by CQM Management, Inc., against which the Provincial Government of Cavite had sought to impose real property taxes for the years 1997-2013.
CQM Management, Inc. had acquired two non-performing loans from Philippine Investment One (SPV-AMC) Inc. (PI One)—one belonging to Maxon Systems Philippines, Inc. (Maxon) and another to Ultimate Electronic Components, Inc. (Ultimate)—which were secured by real estate mortgages. Upon foreclosure, the properties—located in the Philippine Economic Zone Authority (PEZA) in Cavite—were sold to PI One. CQM Management became the owner of these properties after a deed of assignment from PI One in 2011
Case Digest (G.R. No. 248033) Expanded Legal Reasoning Model
Facts:
- Background of the Case
- CQM Management, Inc. (respondent) filed a petition for injunction against the Provincial Government of Cavite and the Provincial Treasurer of Cavite (petitioners) to stop a tax delinquency sale of properties previously owned by Maxon Systems Philippines, Inc. (Maxon) and Ultimate Electronic Components, Inc. (Ultimate).
- The properties were located in the Philippine Economic Zone Authority (PEZA) in Rosario, Cavite.
- Acquisition of Properties
- On December 1, 2004, Philippine Investment One (SPV-AMC) Inc. (PI One) acquired non-performing loans from Rizal Commercial Banking Corporation (RCBC), secured by real estate mortgages over the Maxon and Ultimate properties.
- Maxon's property had an outstanding obligation of P30,000,000.00, while Ultimate's property had an outstanding obligation of P10,500,000.00.
- PI One foreclosed on the properties, and the Maxon property was sold to PI One, while the Ultimate property was sold to CQM Management, Inc.
- PI One later assigned its rights over the Maxon property to CQM Management, Inc., making the respondent the owner of both properties.
- Tax Delinquency Issue
- Maxon and Ultimate had unpaid real property taxes:
- Maxon: P15,888,089.09 (2000-2013).
- Ultimate: P6,238,407.76 (1997-2013).
- The Provincial Treasurer of Cavite issued a tax assessment and warrant of levy, scheduling a public auction for December 10, 2014.
- The auction was halted by a preliminary writ of injunction issued by the Regional Trial Court (RTC).
- RTC Ruling
- The RTC ruled in favor of CQM Management, Inc., stating that the properties were exempt from real property taxes under Section 24 of RA 7916 (Special Economic Zone Act).
- The RTC also cited equity considerations, including laches and estoppel, and made the injunction permanent.
- CA Ruling
- The Court of Appeals (CA) affirmed the RTC's decision, ruling that CQM Management, Inc. was not liable for the unpaid taxes as it was not the owner or beneficial user of the properties during the tax accrual periods.
- The CA also held that the properties were exempt under RA 7916 and that some of the taxes had already prescribed under Section 270 of the Local Government Code (RA 7160).
Issues:
- Whether CQM Management, Inc. is liable for the unpaid real property taxes of Maxon and Ultimate.
- Whether the properties are exempt from real property taxes under Section 24 of RA 7916.
- Whether the collection of some of the unpaid taxes had already prescribed.
- Whether the petitioners are barred by laches and estoppel from collecting the taxes.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)