Case Summary (G.R. No. 97787)
Facts of the Case
Uniwide operated its business on parcels of land with titles indicating location in Pasig. It obtained building and mayor’s permits from Pasig and paid all business and real estate taxes there from 1989 to 1996. Beginning in 1997, Uniwide stopped paying taxes to Pasig and instead paid Cainta following Cainta’s claim that the subject properties were within its jurisdiction, supported by documentary evidence. Pasig filed a tax collection case against Uniwide in 1997. Uniwide filed a third-party complaint against Cainta for reimbursement of taxes paid, should it be found liable to Pasig. Separately, Cainta and Pasig had initiated a boundary dispute case over the same parcels before the Regional Trial Court (RTC) in Antipolo City, which was still pending. Cainta moved to dismiss or suspend the tax collection case on grounds of litis pendentia and prejudicial question, but the RTC-Pasig denied these motions.
RTC-Pasig Decision
The RTC upheld Pasig’s claim, ruling the Torrens title’s locational entry as conclusive for taxing jurisdiction. It held that the location stated in the TCTs is conclusive and any contrary evidence would amount to an impermissible collateral attack on the registered title. Consequently, Uniwide was ordered to pay local business and real estate taxes to Pasig for the years starting 1997, along with attorney’s fees and costs. Regarding Uniwide’s third-party complaint against Cainta, the court ruled in favor of Uniwide based on unjust enrichment principles, ordering Cainta to reimburse the taxes paid by Uniwide during the disputed period, plus attorney’s fees and costs. Motions for reconsideration filed by Uniwide and Cainta were denied.
Court of Appeals (CA) Ruling
The CA affirmed the RTC-Pasig decision with a modification reducing attorney’s fees awarded to Pasig and Uniwide to P100,000.00 each. Motions for reconsideration by both Uniwide and Cainta were denied by the CA.
Issues Presented
- Whether the RTC-Pasig and CA correctly upheld Pasig’s taxing jurisdiction over the subject properties based on the conclusive location in the TCTs despite the pendency of the boundary dispute case.
- Whether the procedures settling tax obligations and reimbursements were proper.
- Whether the award of attorney’s fees was proper.
Applicable Legal Principles on Taxation and Location of Property
Under the Local Government Code, business taxes are due to the city or municipality where the business establishment is located (Section 150, LGC). For real property taxes, PD 464 (Real Property Tax Code) and the LGC vest collection authority in the locality where the property is situated. Accordingly, taxing jurisdiction depends primarily on the physical location of business establishments or real properties.
Indefeasibility of the Torrens Title and its Evidentiary Effect
PD 1529 (Property Registration Decree) provides that a decree of registration is conclusive and binds all persons, including the government, regarding ownership and location of land (Section 31). The land registration court thoroughly investigates and determines the description and location of property, reflected conclusively in the certificate of title. The Supreme Court has held that a certificate of title is conclusive not only of ownership but also of property location (Odsique v. Court of Appeals). The location indicated therein should be presumed correct and relied upon for purposes such as taxation until properly amended via judicial proceedings.
Boundary Dispute Case and its Effect on Tax Collection Proceedings
The separate boundary dispute case between Pasig and Cainta, pending before RTC-Antipolo, does not affect the tax collection case filed by Pasig against Uniwide. The location in the TCTs remains conclusive and binding pending final resolution of the boundary dispute and any consequent amendment to titles. The evidence presented by Cainta to claim jurisdiction (such as cadastral surveys and DENR certifications) is appropriate for consideration in the boundary dispute case but insufficient to override the conclusive effect of the TCTs. In practical and administrative terms, taxing authorities and taxpayers must rely on the title’s location to avoid uncertainty and disruption in tax administration. The royalty of administrative feasibility is recognized as a sound tax principle.
On the Doctrine Against Litis Pendentia, Forum Shopping, and Prejudicial Question
The elements of forum shopping require identity of parties, identical rights asserted, and reliefs sought with potential for res judicata application. These elements are absent here: the tax case involves Pasig and Uniwide, whereas the boundary dispute involves Cainta and Pasig. Moreover, the reliefs differ—tax collection versus territorial boundary determination. Hence, dismissal or suspension of the tax collection case on these grounds was improper. Similarly, the pendency of the boundary dispute does not constitute a prejudicial question warranting suspension because the cases involve different issues and parties, and no injunction was issued to halt the tax case.
On Uniwide’s Liability and Reimbursement Claims
Uniwide must pay the local business taxes to Pasig as it is the party conducting the business, and the place of operations as per the TCT is Pasig. The argument that Pasig should recover taxes directly from Cainta is untenable under Section 146 of the LGC, which places the tax obligation directly on the business operator.
The award for real estate taxes against Uniwide is problematic. Pasig did not expressly demand real estate taxes in its complaint; realty taxes are customarily paid by the registered owner, identified here as Uniwide Sales Realty and Resources Corporation, a legally distinct en
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Background and Procedural History
- Two consolidated petitions for review on certiorari challenge the Court of Appeals (CA) decisions which affirmed with modification the Regional Trial Court (RTC) of Pasig City’s ruling concerning a tax collection case.
- The case arose from Pasig's tax collection suit against Uniwide Sales Warehouse Club, Inc. (Uniwide) for unpaid local business taxes starting in 1997.
- Municipality of Cainta (Cainta), holding a conflicting territorial claim over the properties, filed its petition contesting the taxing authority.
- Cainta’s boundary dispute case with Pasig was pending before the RTC in Antipolo City.
- The RTC ruled in favor of Pasig, affirming the indefeasibility of the Torrens title indicating Pasig as the location of the subject properties.
- The CA affirmed the RTC decision but reduced the attorney’s fees awarded.
- Both Uniwide and Cainta separately filed petitions before the Supreme Court seeking reversals or modifications of the CA decision.
Facts of the Case
- Uniwide operated business establishments on parcels of land covered by Transfer Certificates of Title Nos. 72983, 74003, and PT-74468, which showed location within Pasig.
- Uniwide initially obtained building and Mayor’s permits from Pasig starting 1989 and paid taxes there from 1989 to 1996.
- From 1997, Uniwide stopped renewing Mayor’s permits in Pasig and began paying local taxes to Cainta after receiving a notice asserting jurisdiction.
- Pasig filed suit against Uniwide in RTC-Pasig for unpaid taxes; Uniwide filed a third-party complaint against Cainta for reimbursement of taxes paid.
- Cainta concurrently filed a boundary dispute case against Pasig in RTC-Antipolo involving the same properties.
- Motions to dismiss or suspend tax collection proceedings based on litis pendentia and prejudicial questions were denied by the RTC-Pasig and CA.
- Uniwide sold the subject properties to Robinsons Land Corporation in 1999.
Issues Presented
- Whether the RTC and CA were correct in upholding Pasig’s right to collect taxes based on the location stated in the Torrens titles despite the pending boundary dispute.
- Whether the rulings with respect to the payment and reimbursement of taxes were proper.
- Whether the attorney’s fees awarded by the lower courts were justified and legal.
Applicable Law and Legal Principles
- Local Government Code (LGC): Local business taxes are due to the municipality where the business is conducted. Section 150 of the LGC specifies the situs of taxation must correspond to the branch or place where business transactions occur.
- Presidential Decree No. 464 (Real Property Tax Code): Real property taxes are collectible by the locality where the property is situated.
- Sections 201 and 247 of LGC: Confirm the locality-based appraisal and collection system for real property taxes.
- Property Registration Decree (PD 1529): A decree of registration is conclusive as to ownership and location of land stated in the certificate of title, binding upon all persons including the government.
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