Case Summary (G.R. No. 248033)
Background of the Case
On November 25, 2014, the respondent filed a petition for an injunction with a request for a temporary restraining order and preliminary injunction. This was against the Provincial Government of Cavite and the Provincial Treasurer in relation to their intent to auction the properties of Maxon and Ultimate for unpaid taxes. The properties in question were acquired as a result of foreclosure proceedings initiated by the prior lender, Rizal Commercial Banking Corporation, after the original owners defaulted on their loans.
Foreclosure Proceedings and Ownership Transfer
The foreclosure led to the auction sale of the properties, resulting in the acquisition of the Maxon property and the Ultimate property by the respondent. The Maxon property, located in the Philippine Economic Zone Authority (PEZA) with an area of 17,466 square meters, had an outstanding obligation of P30 million. The Ultimate property, covering 3,000 square meters, had a P10.5 million obligation. The respondent subsequently acquired ownership through a deed of assignment dated March 31, 2011.
Tax Liability Claims
Following the acquisition, the Provincial Treasurer issued assessments against both Maxon and Ultimate for unpaid real property taxes and announced a public auction. It was indicated that Maxon owed approximately P15.9 million in taxes from 2000 to 2013, while Ultimate owed about P6.2 million from 1997 to 2013. The auction did not occur due to the RTC's issuance of a preliminary injunction.
RTC Ruling
On February 19, 2016, the RTC ruled in favor of the respondent, determining it was exempt from real property taxes under Section 24 of Republic Act (RA) 7916—specifically as the properties were located within an ecozone. The court stated that exempt status applied to such properties, which only required payment of a 5% gross income tax.
Court of Appeals Decision
The Court of Appeals (CA) upheld the RTC's decision on May 23, 2018, affirming that the respondent did not bear tax liability for the periods concerning the properties since ownership and possession had not yet transferred by the time the debts accrued. The appellate court reinforced that the respondent became the owner only when the redemption periods expired and further noted that lack of timely action by the petitioners barred them under the principles of laches and estoppel from collecting the taxes.
Supreme Court Ruling
The Supreme Court upheld the CA's decision, stating that the liability for property taxes generally lies with the owner during the period the tax accrues. Since the respondent was neither the owner nor had beneficial possession during the periods in question, it was unjust to impose tax liabilities. The Court reaffirmed the
...continue readingCase Syllabus (G.R. No. 248033)
Case Overview
- This case involves a Petition for Review on Certiorari filed under Rule 45 of the Rules of Court.
- The petition is directed against the Decision dated May 23, 2018, and the Resolution dated June 20, 2019, of the Court of Appeals (CA) in CAA-G.R. CV No. 107654.
- The CA affirmed decisions made by the Regional Trial Court (RTC) of Makati City that prevented the Provincial Government of Cavite and its Provincial Treasurer from conducting a tax delinquency sale on the properties owned by CQM Management, Inc.
Parties Involved
- Petitioners: Provincial Government of Cavite and Provincial Treasurer of Cavite.
- Respondent: CQM Management, Inc., as the successor-in-interest of Philippine Investment One (SPV-AMC), Inc.
Factual Background
- On November 25, 2014, CQM Management, Inc. filed a petition for injunction against the Provincial Government of Cavite and its Provincial Treasurer concerning unpaid real property taxes owed by Maxon Systems Philippines, Inc. and Ultimate Electronic Components, Inc.
- Philippine Investment One (SPV-AMC) Inc. acquired non-performing loans (Maxon loan and Ultimate loan) from Rizal Commercial Banking Corporation (RCBC) via a Deed of Assignment.
- The properties associated with these loans had significant outstanding obligations and unpaid real property taxes spanning several years.
- The Provincial Treasurer issued a tax assessment and a warrant of levy against the properties due to unpaid taxes, setting a p