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Tax2 Digested 1 6

Tax2 Digested 1 6

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ATLAS CONSOLIDATED MINING AND DEVELOPMENT CORPORATION, Petitioner, versus, COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS: Under Section 100 of the Tax Code of the Philippines, petitioner is a zero-rated al!e Added Tax " AT# person for $ein% an exporter of copper concentrates. Accordin% to petitioner, on &an!ar' (0, 1))*, it filed its AT ret!rn for the fo!rth +!arter of 1)),, sho-in% a total inp!t tax of P./,,00/,)/,.1* and an excess AT credit of P.*(,,,/,()1./0 and, on &an!ar' (0, 1))/, it applied for a tax ref!nd or a tax credit certificate for the latter a2o!nt -ith respondent Co22issioner of 3nternal Re4en!e "C3R#. 5n the sa2e date, petitioner filed the sa2e clai2 for ref!nd -ith the Co!rt of Tax Appeals "CTA#, clai2in% that the t-o-'ear prescripti4e period pro4ided for !nder Section (,0 of the Tax Code for clai2in% a ref!nd -as a$o!t to expire. The C3R failed to file his ans-er -ith the CTA6 th!s, the for2er declared the latter in defa!lt. CTA rendered its 7ecision8,9 den'in% petitioner:s clai2 for ref!nd d!e to petitioner:s fail!re to co2pl' -ith the doc!2entar' re+!ire2ents prescri$ed !nder Section 1/ of Re4en!e Re%!lations ;o. 0.1, as a2ended $' Re4en!e Re%!lations ;o. ,-.., dated April 1, 1)... The CTA:s 7ecision and Resol!tion -ere +!estioned in the CA. <o-e4er, the CA affir2ed in toto the said 7ecision and Resol!tion. 3SSU=: >hether or not petitioner 2a' clai2 tax ref!nd. <=?7: This Co!rt is, therefore, $o!nd $' the fore%oin% facts, as fo!nd $' the appellate co!rt, for -ell-settled is the %eneral r!le that the @!risdiction of this Co!rt in cases $ro!%ht $efore it fro2 the Co!rt of Appeals, $' -a' of a Petition for Re4ie- on Certiorari !nder R!le *0 of the Re4ised R!les of Co!rt, is li2ited to re4ie-in% or re4isin% errors of la-6 findin%s of fact of the latter are concl!si4e. This Co!rt is not a trier of facts. 3t is not its f!nction to re4ie-, exa2ine and e4al!ate or -ei%h the pro$ati4e 4al!e of the e4idence presented. 3t 2!st $e re2e2$ered that -hen clai2in% tax ref!ndAcredit, the AT-re%istered taxpa'er 2!st $e a$le to esta$lish that it does ha4e ref!nda$le or credita$le inp!t AT, and the sa2e has not $een applied a%ainst its o!tp!t AT lia$ilitiesBinfor2ation -hich are s!pposed to $e reflected in the taxpa'erCs AT ret!rns. Th!s, an application for tax ref!ndAcredit 2!st $e acco2panied $' copies of the taxpa'erCs AT ret!rnAs for the taxa$le +!arterAs concerned. The for2al offer of e4idence of the petitioner failed to incl!de photocop' of its export doc!2ents, as re+!ired. There is no -a' therefore, in deter2inin% the Dind of %oods and act!al a2o!nt of export sales it alle%edl' 2ade d!rin% the +!arter in4ol4ed. This findin% is 4er' cr!cial -hen -e tr' to relate it -ith the re+!ire2ent of the afore2entioned re%!lations that the inp!t tax $ein% clai2ed for ref!nd or tax credit 2!st $e sho-n to $e entirel' attri$!ta$le to the zero-rated transaction, in this case, export sales of %oods. >itho!t the export doc!2ents, the p!rchase in4oiceAreceipts s!$2itted $' the petitioner as proof of its inp!t taxes cannot $e 4erified as $ein% directl' attri$!ta$le to the %oods so exported. Taxation is a destr!cti4e po-er -hich interferes -ith the personal and propert' ri%hts of the people and taDes fro2 the2 a portion of their propert' for the s!pport of the %o4ern2ent. And, since taxes are -hat -e pa' for ci4ilized societ', or are the life$lood of the nation, the la- fro-ns a%ainst exe2ptions fro2 taxation and stat!tes %rantin% tax exe2ptions are th!s constr!ed strictissi2i @!ris a%ainst the taxpa'er and li$erall' in fa4or of the taxin% a!thorit'. A clai2 of ref!nd or exe2ption fro2 tax

o4e2$er 0. versus. petitioner pro4ides 2ana%e2ent and technical ser4ices to PF3 and PHF3.o. on &!l' (.ational 3nternal Re4en!e Code of 1)11. $oth PF3 and PHF3 8a%ree9 to pa' the 8p9etitioner. /)1)1 and its &an!ar' . 3t acts as the in4est2ent 2ana%er of $oth Philippine F!nd. (00. is a do2estic corporation d!l' or%anized and existin% !nder the la-s of the Rep!$lic of the Philippines. 3nc.-as filed -ith the S!pre2e Co!rt on . 10//.. other-ise Dno-n as the F. a Petition for Re4ie. 1). it failed to !tilize the credita$le tax -ithheld representin% the tax -ithheld $' petitionerCs -ithholdin% a%ents. 5n . $!t that in ER .and re4erse the 7ece2$er 1). PF3Cs and PHF3Cs principal distri$!tor -hich taDes char%e of the sales of said co2paniesC shares to prospecti4e in4estors.pa'2ents 2!st $e clearl' sho-n and $e $ased on lan%!a%e in the la.0. (00( 7ecision 8(9 of the Co!rt of Appeals "CA# in CA-ER SP . for2erl' Phila2 F!nd Gana%e2ent. -hich are open-end in4est2ent co2panies8.0.1 is 2eritorio!s.o4e2$er (). are here$' AFFIRMED. all prior a2end2ents and those introd!ced $' P7 1))* -ere codified into the . a -ritten re+!est -as filed -ith the sa2e di4ision for the earl' resol!tion of petitionerCs clai2 for ref!nd.ational 3nternal Re4en!e Code ". PHILAM ASSET MANAGEMENT. as a res!lt of -hich Section . taxation is the r!le. 110.ATUR=: These are t-o consolidated Petitions for Re4ie. on professional fees. dated April 1)./ in P7 1100. $' -a' of co2pensation for the latterCs ser4ices and facilities. Hein% an in4est2ent 2ana%er. =lse-ise stated.. respecti4el'. 3nc. Petitioner filed its ann!al corporate inco2e tax ret!rn for the taxa$le 'ear 1))1 representin% net loss.J 3SSU=: >hether petitioner is entitled to a ref!nd of its credita$le taxes -ithheld for taxa$le 'ears 1))1 and 1)). "PF3# and Phila2 Hond F!nd. . WHEREFORE. 1))). P!rs!ant to the separate 829ana%e2ent and 8d9istri$!tion a%ree2ents $et-een the 8p9etitioner and PF3 and PHF3. this pro4ision -as restated as Section . INC. Conse+!entl'..o. Respondent did not act on petitionerCs clai2 for ref!nd6 hence.9 p!rs!ant to the =xpanded >ithholdin% Tax Re%!lations. a 2onthl' 2ana%e2ent fee fro2 -hich PF3 and PHF3 -ithhold the a2o!nt e+!i4alent to 8a9 fi4e percent "0I# credita$le tax8.. Petitioner is.0. Petitioner filed an ad2inistrati4e clai2 for ref!nd -ith the H3R Appellate 7i4ision for a2o!nt representin% !n!tilized excess tax credits for calendar 'ear 1))1.J 5n A!%!st 1. The pro4ision on the final ad@!st2ent ret!rn "FAR# -as ori%inall' fo!nd in Section /) of Presidential 7ecree "P7# .o./ -as ren!2$ered as Section 1). 3nc.(.. PF3 and PHF3. 1/(00* is not. 1))) to toll the r!nnin% of the t-o-'ear prescripti4e period.o. COMMISSIONER OF INTERNAL REVENUE . (00* 7ecision8. exe2ption therefro2 is the exception.3RC# of 1). The 7ecision and Resol!tion of the Co!rt of Appeals. the Petition is here$' DENIED for lacD of 2erit. 1).9 in the sale of their shares of stocDs and in the in4est2ent of the proceeds of these sales into a di4ersified portfolio of de$t and e+!it' sec!rities. liDe-ise.too plain to $e 2istaDen.9 in CA-ER SP . (001 and A!%!st /.0..819 !nder R!le *0 of the R!les of Co!rt. 10. "PHF3#. FACTS: FPetitioner. Thereafter. seeDin% to re4ie.o. <=?7: The Petition in ER .

0 ho-e4er. Section /) reappeared in the . 7ifferentl' n!2$ered in 1)11 $!t si2ilarl' -orded (0 'ears later "1))1#.-hether to re+!est a tax refund or clai2 a tax credit -. $eca!se the latter "1# had not indicated in its 3TR for that 'ear -hether it -as optin% for a credit or a ref!nd6 and "(# had not s!$2itted as e4idence its 1)). in Philippine Bank of Communications v. Th!s.3RC "or Tax Code# of 1))1 as Section 1/. An' tax on inco2e that is paid in excess of the a2o!nt d!e the %o4ern2ent 2a' $e ref!nded./. Commissioner of Internal Revenue . These options are "1# filin% for a tax refund or "(# a4ailin% of a tax credit.3RC of 1). neither did it perfor2 an' act indicatin% that it chose a tax credit. re2ained !nchan%ed.3RC of 1)11 -as ren!2$ered as Section . Section 1/ offers t-o options to a taxa$le corporation -hose total +!arterl' inco2e tax pa'2ents in a %i4en taxa$le 'ear exceeds its total inco2e tax d!e. partic!larl' the self-assess2ent and collection aspects. These t-o options !nder Section 1/ are alternati4e in nat!re./ of the . Section (* of =xec!ti4e 5rder "=5# .$' 2arDin% the correspondin% option $ox pro4ided in the FAR. The second option -orDs $' appl'in% the ref!nda$le a2o!nt. it filed on Septe2$er 11. -hich -as also rearran%ed to fall !nder Chapter 10 of Title 33 of the . respondent denied the clai2 of petitioner for a ref!nd of excess taxes -ithheld in 1))1. 3ndeed. -hich co!ld ha4e $een the $asis for deter2inin% -hether its clai2ed 1))1 tax credit had not $een applied a%ainst its 1)). >hile a taxpa'er is re+!ired to 2arD its choice in the for2 pro4ided $' the H3R.5n &!l' .1. ren!2$ered Section . Section 1). -hich had earlier $een ren!2$ered $' P7 1))*. The first option is relati4el' si2ple. 156637 This section applies to the first case $efore the Co!rt. 3n the present case. Con4ersel'.1. altho!%h petitioner did not 2arD the ref!nd $ox in its 1))1 FAR. tax lia$ilities. 3TR. The reason for re+!irin% that a choice $e 2ade in the FAR !pon its filin% is to ease tax ad2inistration. 1)). A tax credit sho!ld $e constr!ed 2erel' as an alternati4e re2ed' to a tax ref!nd !nder Section 1/.3RC as Section 1/. sho!ld one still choose this option later on. after $ein% ren!2$ered and red!ced to the chaff of a %rain. The choice of one precl!des the other.3RC of 1)11 to Ftaxa$le inco2e. 3n the present case.o.. Section /) -as repealed $' =5 . 1).1. a taxpa'er that 2aDes no choice expresses !ncertaint' or lacD of preference and hence sho-s si2ple ne%li%ence or plain o4ersi%ht. . Section /) of the . =5 (1./ !nder P7 11006 later. the Co!rt r!led that a corporation 2!st si%nif' its intention -. Finall'.1 chan%ed all Fnet inco2eJ phrases appearin% in Title 33 of the . 1). an . S!$se+!entl'. s!$@ect to prior 4erification and appro4al $' respondent. as Section 1) !nder P7 1))*6 then..3RC. -as not a2ended.J Section 1) of the . this re+!ire2ent is onl' for the p!rpose of facilitatin% tax collection. a%ainst the esti2ated +!arterl' inco2e tax lia$ilities of the s!cceedin% taxa$le 'ear. Fail!re to si%nif' oneCs intention in the FAR does not 2ean o!tri%ht $arrin% of a 4alid re+!est for a ref!nd. 5n &!l' (0. 5ne cannot %et a tax refund and a tax credit at the sa2e ti2e for the sa2e excess inco2e taxes paid. A taxpa'er that 2aDes a choice expresses certaint' or preference and th!s de2onstrates clear dili%ence. GR No. 5n the contrar'. as sho-n on the FAR of a %i4en taxa$le 'ear. pro4ided that a taxpa'er properl' applies for the ref!nd. as Section 1/ !nder =5 (1.

Costs a%ainst petitioner. 5n &!ne (0. did it appl' the excess credita$le taxes. credita$le -ithholdin% taxes. it $eco2es irrevocable. (001 SPP filed a second clai2 in tax credit or ref!nd for (000. 5nce chosen. (00( 7ecision REVERSED and SET ASIDE."H#". $earin% a difference. Under these circ!2stances. Section 1/ also applies. (001. 3n none of its +!arterl' ret!rns for 1)).10/. The Petition in ER . 5nce the carr'-o4er option is taDen. $efore the lapse of the t-o-'ear prescripti4e period for s!ch actions. Accordin% to petitioner. SOUTHERN PHILIPPINES POWER CORPORATION.co4erin% its clai2s for ref!nd or tax credit. a po-er co2pan' that %enerates and sells electricit' to the . A2ended $' Rep!$lic Act "RA# . applied -ith the H!rea! of 3nternal Re4en!e "H3R# for zero-ratin% of its transactions !nder Section 10.o. other-ise Dno-n as the FTax Refor2 Act of 1))1. (00* 7ecision AFFIRMED.o prono!nce2ent as to costs.onetheless. The H3R appro4ed the application for taxa$le 'ears 1))) and (000. and no application for a tax refundor iss!ance of a tax credit certificate shall then $e allo-ed.0. Th!s. SPP filed -ith the Co!rt of Tax Appeals "CTA# Second 7i4ision a petition for re4ie. excess tax credit. 3n other -ords.J The carr'-o4er option !nder Section 1/ is per2issi4e. the a2o!nt -ill not $e forfeited in the %o4ern2entCs fa4or. DENIED and the assailed &an!ar' . . 162004 As to the second case. (00/.ad2inistrati4e clai2 for the ref!nd of its excess taxes -ithheld in 1))1.o. .ational Po-er Corporation ".PC#.ational 3nternal Re4en!e Code ". it neither chose nor 2arDed the carr'-o4er option $ox in its 1)). 3n a 7ecision dated April (/.. petitioner ar%!es that it is still entitled to a ref!nd of its 1)). As this option -as not chosen. Petitioner has chosen that option for its 1)). the carr'-o4er option shall $e considered irre4oca$le for that taxa$le period. 5n &!l' 1. >hether the F3F5 principle is applied or not.3RC#. The petition clai2ed onl' the a%%re%ate a2o!nt -hich co4ered the last t-o +!arters of 1))) and the fo!r +!arters in (000. versus INTERNAL REVENUE FACTS: . -hich corresponds to its 1)). it see2s that there is nothin% that can $e considered irre4oca$le.PC. the Petition in ER . COMMISSION OF Petitioner So!thern Philippines Po-er Corporation "SPP#. (000 SPP filed a clai2 -ith respondent Co22issioner of 3nternal Re4en!e "C3R# for a tax credit or ref!nd for 1))). holdin% that its zerorated official receipts did not correspond to the +!arterl' AT ret!rns. $eca!se it 2a' $e clai2ed $' petitioner as tax credits in the s!cceedin% taxa$le 'ears. ho-e4er. .1 is GRANTED and the assailed 7ece2$er 1).*(*.# of the . The a2o!nts represented !n!tilized inp!t AT attri$!ta$le to SPPCs zero-rated sale of electricit' to . petitioner is entitled to a tax refund of its 1))1 excess tax credits. A corporation that is entitled to a tax refund or a tax credit for excess pa'2ent of +!arterl' inco2e taxes 2a' carr' o4er and credit the excess inco2e taxes paid in a %i4en taxa$le 'ear a%ainst the esti2ated inco2e tax lia$ilities of the s!cceedin% +!arters. This ar%!2ent does not hold -ater.01. 3SSU=: . 10//. act!all' or constr!cti4el'. the Second 7i4ision denied SPPCs clai2s. The s!$se+!ent acts of petitioner re4eal that it has effectively chosen the carr'-o4er option.o. ><=R=F5R=. it is no lon%er entitled to a tax refund of P*0). FAR. Section 1/ re2ains clear and !ne+!i4ocal. 5n Septe2$er (). 1/(00* is. excess inco2e tax pa'2ents. GR No.

representin% the respondents6 and =n%r. 5n that sa2e da'. 4s. "G5?7=M# opposed the applications on the %ro!nd that it is the re%istered o-ner of a parcel of land desi%nated and that the 2etes and $o!nds of ?ot .01 and ?ot . the respondents s!$2itted $l!eprint plans of ?ot .0. &!lio U2ali.3RC. &acinto. therefore. real propert' tax certifications. The Co!rt is not a trier of facts and the co2petence needed for exa2inin% the rele4ant acco!ntin% $ooDs or records is !ndo!$tedl' -ith the CTA. 7e2etrio Harrientos. and contin!o!s possession of the s!$@ect land !nder clai2 of title excl!si4e of an' other ri%hts and ad4erse to all other clai2ants $' the2sel4es and thro!%h their predecessors-in-interest since ti2e i22e2orial. MARCELINO MENDO&A. JUANITO MANIMTIM.called the ?and Gana%e2ent H!rea! of the 7epart2ent of =n4iron2ent and .. Goldex Realt'. and Francisca Gani2ti2 (respondents filed -ith the RTC t-o applications for re%istration and confir2ation of their title o4er t-o "(# parcels of land located in Haran%a' S!n%a'.0. DEMETRIO BARRIENTOS. ?GS. and =rnesto. pra'ed that the o4erlappin% portion $e excl!ded fro2 the applications. i4encio ?. Respondents. SETS ASIDE the Co!rt of Tax Appeals En Banc decision dated &!l' . Ta%a'ta' Cit'. Florita C!adra.at!ral Reso!rces "7=. and deeds of a$sol!te sale. Ro2eo 7!rante. for 4erification and correction. %n! FRANCISCA MANIMTIM. <=?7: The CTA denied SPPCs clai2 o!tri%ht for fail!re to esta$lish the existence of zero-rated sales. alerio. &ENAIDA MALABANAN.R#. Spo!ses =dil$erto HaKanola and Sofia HaKanola. &!lio U2ali died -hile the case -as pendin% and he -as s!$stit!ted $' his heirs na2el': E!iller2o. REPUBLIC OF THE PHILIPPINES. no. Ge'nardo. FLORITA CUADRA.. That co!rt did not del4e into the +!estion of SPPCs co2pliance -ith the other re+!isites pro4ided !nder Section 11( of the . The ?and Re%istration A!thorit' "?RA# trans2itted to the RTC a report dated April (). open. Eerardo. The respondents and G5?7=M filed a @oint 2otion re+!estin% the RTC to appoint a tea2 of co22issioners co2posed of a %o4ern2ent representati4e fro2 the S!r4e' 7i4ision. 1))( statin% that there -ere discrepancies in Plans and referred the 2atter to the ?and Gana%e2ent Sector "?GS#. o4erlapped its lot $' a$o!t 1*. certifications in lie! of lost %eodetic en%ineerCs certificates.R6 =n%r.>hether or not the CTA En Banc correctl' r!led that SPP -as not entitled to a tax ref!nd or credit. the case has to $e re2anded to the CTA for deter2ination of -hether or not SPP has co2plied -ith the other re+!isites 2entioned. represen e! "# AURORA U..01 and ?ot . technical descriptions. p!$lic. and REMANDS the case to the Co!rt of Tax Appeals Second 7i4ision for f!rther hearin% as stated a$o4e. representin% G5?7=M. and A!rora U2ali-&!2aran%. Garcelino Gendoza. the Co!rt GRANTS the petition. 7=. The respondents alle%ed that the' are the o-ners pro indiviso and in fee si2ple of the s!$@ect parcels of land6 that the' ha4e ac+!ired the s!$@ect parcels of land $' p!rchase or assi%n2ent of ri%hts6 and that the' ha4e $een in act!al. S!ch 2atter in4ol4es +!estions of fact and entails the need to exa2ine the records. FACTS: &!anito Gani2ti2.. all s!rna2ed U2ali. to cond!ct an act!al %ro!nd 4erification and relocation s!r4e' to assist the RTC in resol4in% the contro4ers' on the location and position of the s!$@ect lots. (001..1. G5?7=M. (001 and resol!tion dated Septe2$er 1).. &ose. official receipts of pa'2ent of taxes.0. Petitioner. 3n s!pport of their applications. SPOUSES EDILBERTO BA$ANOLA %n! SOFIA BA$ANOLA. e4en as the Co!rt holds that SPPCs sales in4oices and receipts -o!ld $e s!fficient to pro4e its zero-rated transactions. disre%ardin% SPPCs sales in4oices and receipts -hich e4idence the2. s+!are 2eters. the RTC %ranted the @oint 2otion and directed the tea2 of co22issioners to s!$2it its findin%s -ithin 10 da's after the . Lenaida Gala$anan. WHEREFORE. Conse+!entl'. declarations of real propert' tax. JUMARANG. 3nc. JULIO UMALI.

(*. The fact that the disp!ted propert' 2a' ha4e $een declared for taxation p!rposes in the na2es of the applicants for re%istration or of their predecessors-in-interest does not necessaril' pro4e o-nership. and notorio!s possession and occ!pation of the s!$@ect land. excl!si4e.that the respondents $' the2sel4es or thro!%h their predecessors-ininterest ha4e $een in open. Apparentl'. ?iDe &!anito. The a$sence of opposition fro2 %o4ern2ent a%encies is of no controllin% si%nificance $eca!se the State cannot $e estopped $' the o2ission. 3t is a r!le that %eneral state2ents that are 2ere concl!sions of laand not fact!al proof of possession are !na4ailin% and cannot s!ffice. These declarations and doc!2ents. respecti4el'. i4encio alerio and tax declarations to pro4e possession and occ!pation o4er the s!$@ect lots. 7=. and =n%r. ho-e4er. ?GS. &acinto U2ali. . >ell settled is the r!le that tax declarations and receipts are not concl!si4e e4idence of o-nership or of the ri%ht to possess land -hen not s!pported $' an' other e4idence. <e failed to %i4e specific details on the act!al occ!panc' $' his predecessors-in-interest of the s!$@ect lots or 2ode of ac+!isition of o-nership for the period of possession re+!ired $' la-. Pan%'arihan.0. An applicant in a land re%istration case cannot @!st harp on 2ere concl!sions of la. the Chief of S!r4e' 7i4ision. and 3sa$elo U2ali -ere all !ns!$stantiated %eneral state2ents. 1)1. 1)*0 or earlier. As for &acinto U2ali and =liseo Ean!elas. !nder a $ona fide clai2 of o-nership since &!ne 1(. Alexander ?. =dil$erto failed to present a d!plicate ori%inal cop' of the deed of sale dated Fe$r!ar' /. s+!are 2eter portion thereof -hich -as fo!nd to $elon% to G5?7=M. the respondentsC $est e4idence to pro4e possession and o-nership o4er the s!$@ect propert' -ere the tax declarations iss!ed in their na2es. <=?7: The records failed to sho. Unfort!natel'. these tax declarations to%ether -ith their !ns!$stantiated %eneral state2ents and 2ere xerox copies of deeds of sale are not eno!%h to pro4e their ri%htf!l clai2.R.01 $!t deferred the appro4al of re%istration of ?ot . &acinto U2ali. the' liDe-ise failed to a!thenticate their clai2 of ac+!isition thro!%h inheritance and ac+!isition thro!%h p!rchase. -hich fo!nd an encroach2ent or o4erlappin%. &!anito failed to s!$stantiate his %eneral state2ent that his %reat %randparents -ere in possession of the s!$@ect lots for a period of o4er *0 'ears. &aco$#. contin!o!s. &aco$ "=n%r. excl!si4e. 3SSU=: >hether or not tax declarations and tax receipts are s!fficient e4idence to deter2ine o-nership of the propert' in +!estion.ter2ination of the %ro!nd 4erification and relocation s!r4e'. $ased on the 4erification and relocation s!r4e' he cond!cted in the presence of the respondents and G5?7=M. and 4alidate his clai2 that he hi2self and his predecessors-in-interest ha4e $een in open. do not s!ffice to pro4e their +!alifications and co2pliance -ith the re+!ire2ents.. =liseo Ean!elas.. Ro$ert C. 1)*0 or earlier. pendin% the se%re%ation of *. contin!o!s. 3sa$elo U2ali. !nder a $ona fide clai2 of o-nership since &!ne 1(. Thereafter. ho-e4er. the fact that the p!$lic prosec!tor of Ta%a'ta' Cit' did not contest the respondentsC possession of the s!$@ect propert' is of no 2o2ent. RTC handed do-n its &!d%2ent %rantin% the respondentsC application for re%istration of ?ot . 2istaDe or error of its officials or a%ents. The respondents presented the testi2onies of &!anito Gani2ti2 (!uanito . 3n an' e4ent. and notorio!s possession and occ!pation of the s!$@ect lands. =dil$erto HaKanola. ?iDe &!anito. the testi2onies of =dil$erto HaKanola. Finall'.to e2$ellish the application $!t 2!st i2press thereto the facts and circ!2stances e4idencin% the alle%ed o-nership and possession of the land. The' are 2erel' indicia of a clai2 of o-nership. trans2itted to the RTC the report of =n%r. =liseo Ean!elas.

HEIRS OF DR. 1. -as appointed as special ad2inistrator of the estate of the deceased spo!ses. HEIRS OF DOMINGO V.1 RE*NALDO BAGUIO. $!t Ere%orio had a son na2ed ir%ilio .WHEREFORE. (000 7ecision of the Co!rt of Appeals in CA-E. /n 5/s 6%p%6/ # %s Pr7v/n6/%( A0r%r/%n Re87r' O88/6er -PARO. Dno-n as the FLonin% Re%!lation of 3li%an Cit'. docDeted as Ci4il Case .1. <ilaria and ir%ilio ad2inistered the s!$@ect propert'. Respondents. THE SECRETAR* OF THE DEPARTMENT OF AGRARIAN REFORM1 THE REGIONAL DIRECTOR OF REGION + 2 CAGA*AN DE ORO CIT*. C . 7eleste. as the ad2inistrator of the intestate estate of the deceased spo!ses.ana2an. JOSE DELESTE. LAND VALUATION OFFICE OF LBP COTABATO CIT*1 THE REGIONAL DIRECTOR 2 REGION 34 OF COTABATO CIT*. 1). &!an . PABLO RICO. RICO.ana2an "Ere%orio# and <ilaria Ta$!clin "<ilaria# -ere the o-ners of a parcel of a%ric!lt!ral land located in Ta2$o. the Cit' of 3li%an filed a co2plaint -ith the Re%ional Trial Co!rt "RTC#. represen e! "# MCMILLAN LUCMAN. as the s!$@ect propert' had not . 3n 1)10./-hectare portion of a lot. =dil$erto . =4ent!all'. -here >e rendered a 7ecision on &an!ar' 11. 1))0. =speranza and Caridad. ir%ilio had $een raised $' the co!ple since he -as t-o 'ears old. the Septe2$er 0. 7AR iss!ed Certificates of ?and Transfer "C?Ts# in fa4or of pri4ate respondents -ho -ere tenants and act!al c!lti4ators of the s!$@ect propert'. affir2in% the r!lin% of the CA that the s!$@ect propert' -as the con@!%al propert' of the late spo!ses Ere%orio and <ilaria and that the latter co!ld onl' sell her one-half "1A(# share of the s!$@ect propert' to 7eleste. Gean-hile. Accordin%l'.tax declaration -as iss!ed in the na2e of 7eleste.*/. /n 5/s 6%p%6/ # %s 5e Re0/s er 78 Dee!s 78 I(/0%n C/ # %s n7'/n%( p%r #1 5e e'%n6/p% /7n p% en 57(!ers) FELIPE D. MANREAL. 1)0*. The deed of sale -as notarized on Fe$r!ar' 11. 1))). 5n Fe$r!ar' 1/. he paid the taxes on the propert'. the petition is GRANTED.. the Cit' of 3li%an passed Cit' 5rdinance . As a res!lt. each -ith a one-half "1A(# interest in it. HEIRS OF ANGELA VELORIA. VELORIA. 1*1(0 is here$' REVERSED and SET ASIDE and another @!d%2ent entered den'in% the application for land re%istration of the s!$@ect properties. <ilaria and ir%ilio sold the s!$@ect propert' to 7r. ALICIA B. on . $' still another -o2an.o. HEIRS OF ABDON T. FACTS: The spo!ses Ere%orio . -here the RTC iss!ed a 7ecision %rantin% the expropriation. HEIRS OF TRAN9UILIANA MANREAL. The arrears in the pa'2ent of taxes fro2 1)0( had $een !pdated $' 7eleste and fro2 then on. n%'e(#) JOSEFA DELESTE. OF THE PHILIPPINES -LBP. the tax declaration in the na2e of ir%ilio -as canceled and a ne. Ere%orio also had t-o da!%hters. 1)0* and re%istered on Garch (. filed $efore the Co!rt of First 3nstance an action a%ainst 7eleste for the re4ersion of title o4er the s!$@ect propert'.oel ". /). RICO. Conse+!entl'. HEIRS OF MANTILLANO OBISO.o4e2$er ((. C#. Considerin% that the real o-ner of the expropriated portion co!ld not $e deter2ined. Said spo!ses -ere childless.o. &ose 7eleste "7eleste# for PhP 1/. MANREAL. >hen Ere%orio died in 1)*0. MANREAL. Said case -ent !p to this Co!rt in "oel v. <ilaria died. RAUL HECTOR DELESTE. 78 DAR L%n%7 !e( N7r e1 LI&A BALBERONA.R.oel. . HEIRS OF CLEMENTE RICO. MACARIO M. Also. %n! RUBEN ALE+ DELESTE. on Fe$r!ar' 1(. 3li%an Cit'. 1)0*. SALVACION MANREAL. JOSE RA* DELESTE. HEIRS OF NECIFURO CABALUNA.ana2an " ir%ilio# $' another -o2an. %n! TITO BALER. 4ers!s LAND BAN.oel# -as appointed as the re%!lar ad2inistrator of the @oint estate.J reclassif'in% the s!$@ect propert' as co22ercialAresidential. Petitioners. %s represen e! "# / s M%n%0er. Hranch * in 3li%an Cit' for the expropriation of a 0. /n 5er 6%p%6/ # %s DAR Mun/6/p%( A0r%r/%n Re87r' O88/6er -MARO.000. Ere%orioCs $rother. S!$se+!entl'. #. and the intestate estate of Ere%orio -ere held to $e the co-o-ners of the s!$@ect propert'. HEIRS OF HERCULANO BALORIO. CUSTUDIO M.. -ho died in 1))(.o.*..

hence. 1*01.ote that 7r. their cancellation is -arranted.0*11. -as finall' decided $' the S!pre2e Co!rt di4idin% the . .o. 3t -as onl' in 1))0 that Ci4il Case .JThere -as. no reason for 7AR to fei%n i%norance of the transfer of o-nership o4er the s!$@ect propert'. WHEREFORE. partic!larl' ?ot . the @!st co2pensation for the expropriated portion of the s!$@ect propert' -as deposited -ith the 7e4elop2ent HanD of the Philippines in 3li%an Cit'. the s!$@ect propert' is o!tside the co4era%e of the a%rarian refor2 pro%ra2. for -hich reason. aside fro2 the 4iolation of petitionersC ri%ht to d!e process of la-. iss!ed in fa4or of pri4ate respondents are here$' declared NULL and VOID. >ith the fore%oin% dis+!isition. H!t it -as inc!2$ent !pon the 7AR to notif' 7eleste. the Co!rt GRANTS the petition and REVERSES and SETS ASIDE the CACs 5cto$er (.J The sa2e holds tr!e -ith respect to the =Ps and certificates of title iss!ed $' 4irt!e of the 4oid C?Ts.o. The 7AR is ordered to CANCEL the afore2entioned =2ancipation Patents and 5ri%inal Certificates of Title erroneo!sl' iss!ed in fa4or of pri4ate respondents.. 7eleste as of 5cto$er (1.Ci4il Code#. There $ein% no +!estion that the C?Ts in the instant case -ere Fi2properl' iss!ed. This sho!ld ha4e alar2ed the2 2ore so -hen pri4ate respondents are in act!al possession and c!lti4ation of the s!$@ect propert'.o prono!nce2ent as to costs. The fa!lt lies -ith petitioners -ho did not present the tax declaration in the na2e of 7r.o.R. 3t sho!ld $e noted that the deed of sale exec!ted $' <ilaria in fa4or of 7eleste -as re%istered on Garch (. this -as follo-ed $' P7 (1. $ein% the lando-ner of the s!$@ect propert'. therefore.ana2ans -ere identified as the o-ners. Cancellation of the =Ps and 5CTs are clearl' -arranted in the instant case since. =4en then.ana2ans. . ( -as iss!ed $' President Garcos proclai2in% the -hole co!ntr' as a land refor2 area. and s!ch re%istration ser4es as a constr!cti4e notice to the -hole -orld that the s!$@ect propert' -as alread' o-ned $' 7eleste $' 4irt!e of the said deed of sale. . this leads to no other concl!sion than that 5!r r!lin% in $eirs of %ofia "anaman &onoy concernin% the indefeasi$ilit' and incontro4erti$ilit' of the =Ps and 5CTs iss!ed in (001 does not $ar Us fro2 2aDin% a findin% in the instant case that the =Ps and 5CTs iss!ed to pri4ate respondents are. . 111. /). 1)0*. as there can $e no 4alid transfer of title sho!ld the C?Ts on -hich the' -ere %ro!nded are 4oid. 1)1(. the Co!rt 2!st i22ediatel' taDe action and declare the iss!ance as n!ll and 4oid. the s!$@ect land or his N share -as considered in his na2e onl' "see Art.'et $een partitioned and distri$!ted to an' of the heirs of Ere%orio and 7eleste.. (000 Resol!tions inCA-E. SP . 4oid.*. in tr!st for the RTC in 3li%an Cit'. PARA7 r!led that the petitioners -ere denied the ri%ht to $e %i4en the notice since onl' the . <=?7: 3t sho!ld $e noted that the principal p!rpose of re%istration. it 2!st $e $orne in 2ind that on Septe2$er (/. . if the ille%alit' in the iss!ance of the C?Ts is patent. is Fto notif' other persons not parties to a contract that a transaction in4ol4in% the propert' has $een entered into. it $eco2es !nnecessar' to d-ell on the other iss!es raised $' the parties.1 hectares $et-een the 7elestes and the . 7eleste died in 1))( after P7 (1 -as pro2!l%ated. The =2ancipation Patents and 5ri%inal Certificates of Title co4erin% the s!$@ect propert'.e. P7 .o. 3ne4ita$l'. 1)1(. 3SSU=: >hether or not the ina$ilit' to pa' tax declarations is a %ro!nd not to notif' the petitioners of the re%istration. (00* and Septe2$er 1. in the Co!rtCs precedent @!rispr!dence. 3n the sa2e 4ein. indeed.

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