Should the proceedings in an action for collection of real property tax be suspended during the pendency of a boundary dispute case between two local government units?
In the case of STA. LUCIA REALTY & DEVELOPMENT, Inc. v. CITY OF PASIG [G.R. No. 166838], the Supreme Court affirmatively ruled.
Sta. Lucia v. City of Pasig; G.R. No. 166838
In Sta. Lucia v. City of Pasig, the Supreme Court declared:
It would be unfair to hold Sta. Lucia liable again for real property taxes it already paid simply because Pasig cannot wait for its boundary dispute with Cainta to be decided. Pasig has consistently argued that the boundary dispute case is not a prejudicial question that would entail the suspension of its collection case against Sta. Lucia. This was also its argument in City of Pasig v. Commission on Elections when it sought to nullify the COMELEC’s ruling to hold in abeyance (until the settlement of the boundary dispute case), the plebiscite that will ratify its creation of Barangay Karangalan. We agreed with the COMELEC therein that the boundary dispute case presented a prejudicial question x x x x x.
X x x x x
It is obvious from the foregoing, that the term “prejudicial question,” as appearing in the cases involving the parties herein, had been used loosely. Its usage had been more in reference to its ordinary meaning, than to its strict legal meaning under the Rules of Court. Nevertheless, even without the impact of the connotation derived from the term, our own Rules of Court state that a trial court may control its own proceedings according to its sound discretion.
Furthermore, we have acknowledged and affirmed this inherent power in our own decisions.
X x x x x
In light of the foregoing, ,we hold that the Pasig RTC should have held in abeyance the proceedings in Civil Case No. 65420, in view of the fact that the outcome of the boundary dispute case before the Antipolo RTC will undeniably affect both Pasig’s and Cainta’s rights. X x x x x.
In the meantime, to avoid further animosity, Sta. Lucia is directed to deposit the succeeding real property taxes due on the subject properties, in an escrow account with the Land Bank of the Philippines.
Municipality of Cainta v. City of Pasig; G.R. No. 176703
In Municipality of Cainta v. City of Pasig, the Supreme Court held that the location stated in the certificate of title should be followed until amended through proper judicial proceedings. Consequently, the real property tax must be paid to the local government unit where the property is located as indicated in the certificate of title . Thus, there is no ground to suspend the proceedings in the collection case filed by one of the local government units involved in the boundary dispute case.
The pertinent portions of the Decision of the Supreme Court are quoted below.
There is no merit to Cainta’s contention that the RTC-Pasig should have dismissed or suspended the proceedings for tax collection on the ground of litis pendentia/forum shopping or the existence of a prejudicial question, respectively, in view of the pending boundary dispute case before the RTC-Antipolo.
There was no litis pendentia or forum shopping as would justify the dismissal of the tax collection case. The test to determine the existence of forum shopping is whether the elements of litis pendentia are present, or whether a final judgment in one case amounts to res judicata in the other.
As correctly found by the RTC-Pasig and affirmed by the CA, the first and second requisites are wanting. Uniwide is not a party to the boundary dispute case between Cainta and Pasig, and the first action is for settlement of boundary dispute while the second action is for collection of tax.
Moreover, the third requisite is also wanting, because regardless of which party is successful, a judgment in the boundary dispute case will not amount to res judicata in the tax collection case. As discussed above, the basis for determining which LGU has the apparent right to collect local taxes is the location as appearing on the certificate of title, unless an amendment thereto is duly made. It must be noted that during the subject years, the TCTs show that the subject properties are situated in Pasig, giving the latter the apparent right to collect taxes thereon, which is precisely the subject of the action under consideration. For this same reason, the Court cannot sustain Cainta’s contention that the boundary dispute case presented a prejudicial question warranting the suspension of the tax collection case.