G.R. No. 190324 - Philippine Ports Authority vs. City of Davao

Case Summary (G.R. No. 190324)

Factual Background

The Philippine Ports Authority administered properties at Sasa Port which the City Assessor of Davao sought to assess for real property tax by letter dated June 17, 2004. The petitioner filed an administrative appeal to the Local Board of Assessment Appeals by registered mail on August 2, 2004, which the Office of the City Treasurer received on August 11, 2004 and which reached the Local Board chairman on September 6, 2004. While the appeal was pending, the City of Davao posted a notice of sale of delinquent real properties that included three parcels at issue: the quay under Tax Declaration No. E-04-09-063842, a parcel under Tax Declaration No. E-04-09-092572, and an administrative building under Tax Declaration No. E-04-09-090803.

Administrative and Judicial Tax Proceedings

The Local Board of Assessment Appeals dismissed the taxpayer’s appeal on January 25, 2005 for being filed out of time and for lack of jurisdiction over the petitioner’s claimed tax exemption. The Central Board of Assessment Appeals likewise denied the petitioner’s appeal in its April 7, 2005 Decision. The petitioner then perfected an appeal to the Court of Tax Appeals, which, en banc, rendered a Decision dated July 30, 2007 setting aside the CBAA decision and declaring the Sasa Port and its buildings exempt from real estate tax and voiding all real estate tax assessments issued by Davao City; the Court of Tax Appeals later issued an Entry of Judgment stating that its decision became final and executory on February 13, 2008.

Petition to the Court of Appeals and Relief Sought

While the administrative and tax appeals were pending, the Philippine Ports Authority petitioned the Court of Appeals for a writ of certiorari, prohibition and injunction to enjoin the City of Davao’s taxation, auction, and sale of its properties, asserting that the City’s acts were without or in excess of jurisdiction and that no other speedy and adequate remedy existed. The petitioner also protested that it did not receive a warrant of levy or notice of auction and that it faced imminent loss of possession of the properties.

Court of Appeals Disposition

The Court of Appeals dismissed the petitioner’s certiorari petition in its December 15, 2008 Decision and reiterated the dismissal in its September 11, 2009 Resolution denying reconsideration. The Court of Appeals held that the Court of Tax Appeals had exclusive jurisdiction to determine the real property tax dispute and that the petitioner ought to have sought injunctive relief from the Court of Tax Appeals; the Court of Appeals further found that the petitioner engaged in forum shopping by filing the petition in the Court of Appeals while an appeal on the same subject was pending before the Court of Tax Appeals.

Petition for Review to the Supreme Court and Parties’ Contentions

The Philippine Ports Authority filed a petition for review under Rule 45, Rules of Court before the Supreme Court seeking reversal of the Court of Appeals’ dismissal. The petitioner argued that the Court of Appeals had jurisdiction by reason of urgency and denied that it had committed forum shopping, contending that the appeals to the two tribunals concerned different rights and remedies. Respondents countered that the elements of litis pendentia and identity of parties and reliefs were present, that the Court of Tax Appeals’ decision controlled the controversy, and that any perceived error in the Court of Tax Appeals’ ruling should be addressed in the proper forum.

Issues Presented

The Supreme Court framed the controversy around two questions: first, whether the Court of Appeals had jurisdiction to issue the injunctive relief sought by the Philippine Ports Authority; and second, whether the petition filed with the Court of Appeals was properly dismissed for forum shopping.

Ruling of the Supreme Court

The Supreme Court denied the petition for review and affirmed the Court of Appeals’ December 15, 2008 Decision and September 11, 2009 Resolution. The Court held that the Court of Tax Appeals possessed exclusive appellate jurisdiction over the case and thus had the exclusive power to issue the injunctive relief sought, and it affirmed the Court of Appeals’ finding that the petitioner had violated the rule against forum shopping.

Legal Basis and Reasoning

The Court relied on the plain language of Section 7, paragraph (a)(5) of Republic Act No. 1125, as amended by Republic Act No. 9282, which vested the Court of Tax Appeals with exclusive appellate jurisdiction to review decisions of the Central Board of Assessment Appeals in real property tax cases. The Court explained that when the law confers appellate jurisdiction on a court it necessarily implies the power to issue auxiliary writs and remedies indispensable to the effective exercise of that jurisdiction, including the authority to determine grave abuse of discretion and to issue extraordinary writs in aid of its appellate function. The Court invoked precedent, notably City of Manila v. Grecia-Cuerdo, to emphasize that the CTA’s jurisdiction to adjudicate tax appeals carries with it the power to issue writs of certiorari and injunctive relief necessary to preserve the subject matter and give effect to its final determination. The Court rejected the petitioner’s plea that urgency conferred jurisdiction on the Court of Appeals, holding that exigency does not remove a case from the CTA’s exclusive appellate jurisdiction and that the petitioner should have sought the injunctive relief before the CTA. The Court further observed that once the CTA acquired jurisdiction, other courts we

Case Syllabus (G.R. No. 190324)

Parties and Procedural Posture

PHILIPPINE PORTS AUTHORITY filed a Petition for Review on Certiorari under Rule 45 assailing the Court of Appeals Decision dated December 15, 2008 and Resolution dated September 11, 2009.
The City of Davao, Sangguniang Panglungsod ng Davao City, City Mayor of Davao City, City Treasurer of Davao City, City Assessor of Davao City, and Central Board of Assessment Appeals (CBAA) appeared as respondents.
The Court of Appeals dismissed the petition for prohibition and for forum shopping and was affirmed by the Supreme Court.
The petition concerned the propriety of local real property taxation, auction, and sale of properties administered by PHILIPPINE PORTS AUTHORITY located at Sasa Port.

Key Factual Allegations

PHILIPPINE PORTS AUTHORITY received a letter from the City Assessor of Davao on June 17, 2004 for assessment and collection of real property taxes on its Sasa Port properties.
PHILIPPINE PORTS AUTHORITY filed an appeal via registered mail to the Local Board of Assessment Appeals on August 2, 2004, which was received by the Office of the City Treasurer on August 11, 2004 and by the Chairman of the Local Board on September 6, 2004.
The City of Davao posted a notice of sale of delinquent real properties, including three parcels subject of this case, and those properties were subsequently sold to the City.
PHILIPPINE PORTS AUTHORITY claimed it received no warrant of levy or prior notice of auction and was informed of a one-year redemption period with interest at two percent per month on the purchase price.

Procedural History

The Local Board of Assessment Appeals dismissed PHILIPPINE PORTS AUTHORITY's appeal on January 25, 2005 for tardiness and lack of jurisdiction over tax exemption claims.
The CBAA denied the appeal in its April 7, 2005 Decision, docketed as CBAA Case No. M-20.
PHILIPPINE PORTS AUTHORITY appealed to the Court of Tax Appeals, which rendered an En Banc Decision dated July 30, 2007 declaring Sasa Port and its buildings exempt and voiding the real estate tax assessments.
The Court of Tax Appeals issued an Entry of Judgment stating its July 30, 2007 Decision became final and executory on February 13, 2008.
While the CTA appeal was pending or after its disposition, PHILIPPINE PORTS AUTHORITY filed a petition for certiorari with the Court of Appeals seeking injunctive relief against the City’s tax and auction measures.
The Court of Appeals dismissed the petition on December 15, 2008 and denied reconsideration on September 11, 2009, prompting the present Rule 45 petition to the Supreme Court.

Issues Presented

Whether the Court of Appeals had jurisdiction to grant the injunctive relief prayed for by PHILIPPINE PORTS AUTHORITY.
Whether the petition before the Court of Appeals was properly dismissed on the ground of forum shopping.

Contentions of the Parties

PHILIPPINE PORTS AUTHORITY contended that it did not commit forum shopping and that the Court of Appeals had jurisdiction based on the urgency of the need for injunctive relief.
PHILIPPINE PORTS AUTHORITY further maintained that as a government instrumentality its properties were immune from local real property taxation.
Re