TAX CASES

1. FERRER JR v. BAUTISTA Petitioner, a QC property owner, assails the constitutionality of two QC ordinances, namely Ordinance No. SP-2095, S-
2011 or the Socialized Housing Tax of Quezon City and Ordinance No. SP-2235, S-2013 on garbage collection fees.

Section 3 of SP-2095 provides:

SECTION 3. IMPOSITION. A special assessment equivalent to one-half percent (0.5%) on the assessed value of land in
excess of One Hundred Thousand Pesos (Php100,000.00) shall be collected by the City Treasurer which shall accrue to
the Socialized Housing Programs of the Quezon City Government. The special assessment shall accrue to the General
Fund under a special account to be established for the purpose (i.e., programs and projects for low-cost housing and other
mass dwellings). c

On the other hand, Ordinance No. SP-2235, S-2013 on garbage collection places the rates of the imposable fee
dependent on the land or floor area and whether the payee is an occupant of a lot, condominium, social housing project
or apartment.

WON SP-2095, S-2011 on the Socialized Housing Tax (SHT) is valid.

a. WON the SHT is a tax which is within the QC government to impose.
b. WON the SHT violates the rule on equality.
c. WON the SHT is confiscatory or oppressive.
WON SP-2235, S-2013 on Garbage Fee is valid.
d. WON the Ordinance on Garbage Fee violates the rule on double taxation.
e. WON it violates the rule on equality.

SP-2095, S-2011 on the Socialized Housing Tax (SHT) is VALID.

a. Yes. The SHT charged by the QC Government is a tax which is within its power to impose. Cities are allowed to
exercise such other powers and discharge such other functions and responsibilities as are necessary, appropriate,
or incidental to efficient and effective provision of the basic services and facilities which include, among others,
programs and projects for low-cost housing and other mass dwellings. The collections made accrue to its
socialized housing programs and projects. The tax is not a pure exercise of taxing power or merely to raise
revenue; it is levied with a regulatory purpose. The levy is primarily in the exercise of the police power for the
general welfare of the entire city. It is greatly imbued with public interest. Removing slum areas in Quezon City is
not only beneficial to the underprivileged and homeless constituents but advantageous to the real property owners
as well. The situation will improve the value of their property investments, fully enjoying the same in view of an
orderly, secure, and safe community, and will enhance the quality of life of the poor, making them law-abiding
constituents and better consumers of business products.

b. No, the SHT does NOT violate the rule on equality. For the purpose of undertaking a comprehensive and continuing
urban development and housing program, the disparities between a real property owner and an informal settler as
two distinct classes are too obvious and need not be discussed at length. The differentiation conforms to the
practical dictates of justice and equity and is not discriminatory within the meaning of the Constitution. Notably, the
public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to
favor one over another. It is inherent in the power to tax that a State is free to select the subjects of taxation.
 Inequities which result from a singling out of one particular class for taxation or exemption infringe no constitutional
limitation.

c. No, the SHT is NOT confiscatory nor oppressive. The reasonableness of Ordinance No. SP-2095 cannot be
disputed. It is not confiscatory or oppressive since the tax being imposed therein is below what the UDHA actually
allows. While the law authorizes LGUs to collect SHT on lands with an assessed value of more than P50,000.00,
the questioned ordinance only covers lands with an assessed value exceeding P100,000.00. Even better, on
certain conditions, the ordinance grants a tax credit equivalent to the total amount of the special assessment paid
beginning in the sixth (6th) year of its effectivity. Far from being obnoxious, the provisions of the subject ordinance
are fair and just.

SP-2235, S-2013 on Garbage Fee is INVALID. Although it does not violate the rule on double taxation, it nonetheless
violates the rule on equality.

a. SP-2235 does NOT violate the rule on double taxation.

The fee imposed for garbage collections under Ordinance No. SP-2235 is a charge fixed for the regulation of an
activity. In Progressive Development Corporation v. Quezon City, the Court declared that “if the generating of
revenue is the primary purpose and regulation is merely incidental, the imposition is a tax; but if regulation is the
primary purpose, the fact that incidentally revenue is also obtained does not make the imposition a tax.” In a U.S.
case, the garbage fee was considered as a "service charge" rather than a tax as it was actually a fee for a service
given by the city which had previously been provided at no cost to its citizens.
Hence, not being a tax, the contention that the garbage fee under Ordinance No. SP-2235 violates the rule on
double taxation must necessarily fail.

b. Yes, SP-2235 violates the rule on equality.

For the purpose of garbage collection, there is, in fact, no substantial distinction between an occupant of a lot, on
one hand, and an occupant of a unit in a condominium, socialized housing project or apartment, on the other hand.
Most likely, garbage output produced by these types of occupants is uniform and does not vary to a large degree;
thus, a similar schedule of fee is both just and equitable.

The rates being charged by the ordinance are unjust and inequitable: a resident of a 200 sq. m. unit in a
condominium or socialized housing project has to pay twice the amount than a resident of a lot similar in size;
unlike unit occupants, all occupants of a lot with an area of 200 sq. m. and less have to pay a fixed rate of
Php100.00; and the same amount of garbage fee is imposed regardless of whether the resident is from a
condominium or from a socialized housing project.

Indeed, the classifications under Ordinance No. S-2235 are not germane to its declared purpose of “promoting
shared responsibility with the residents to attack their common mindless attitude in over-consuming the present
resources and in generating waste.” Instead of simplistically categorizing the payee into land or floor occupant of
a lot or unit of a condominium, socialized housing project or apartment, respondent City Council should have
considered factors that could truly measure the amount of wastes generated and the appropriate fee for its
collection. Factors include, among others, household age and size, accessibility to waste collection, population
density of the barangay or district, capacity to pay, and actual occupancy of the property.

Dispositive Portion:
 WHEREFORE, the petition is PARTIALLY GRANTED. The constitutionality and legality of Ordinance No. SP-2095, S-
2011, or the “Socialized Housing Tax of Quezon City,” is SUSTAINED for being consistent with Section 43 of Republic Act
No. 7279. On the other hand, Ordinance No. SP-2235, S-2013, which collects an annual garbage fee on all domestic
households in Quezon City, is hereby declared as UNCONSTITUTIONAL AND ILLEGAL.
2. PHILIPPINE FISHERIES The PFDA was created by then President Marcos and became an attached agency of the Department of Agriculture.
DEVELOPMENT AUTHORITY v. Meanwhile, the then Ministry of Public Works and Highways reclaimed from the sea a 21-hectare parcel of land in Barangay
CA Tanza, Iloilo City, and constructed thereon the Iloilo Fishing Port Complex (IFPC), consisting of breakwater, a landing
quay, a refrigeration building, a market hall, a municipal shed, an administration building, a water and fuel oil supply system
and other port related facilities and machineries.
 Upon its completion, the Ministry of Public Works and Highways turned over IFPC to the Authority, pursuant to
Section 11 of PD 977, which places fishing port complexes and related facilities under the governance and
operation of the PFDA.
 Notwithstanding said turn over, title to the land and buildings of the IFPC remained with the Republic.
 The Authority thereafter leased portions of IFPC to private firms and individuals engaged in fishing related
businesses.
 Sometime in May 1988, the City of Iloilo assessed the entire IFPC for real property taxes.

Whether or not PFDA is liable to pay real property tax to the City of Iloilo

Yes but only insofar as those properties which are leased to private firms and individuals!

The Court rules that the Authority is not a GOCC but an instrumentality of the national government which is generally
exempt from payment of real property tax. However, said exemption does not apply to the portions of the IFPC which the
Authority leased to private entities. With respect to these properties, the Authority is liable to pay real property tax.

The Authority which is tasked with the special public function to carry out the government’s policy "to promote the
development of the country’s fishing industry and improve the efficiency in handling, preserving, marketing, and distribution
of fish and other aquatic products," exercises the governmental powers of eminent domain, and the power to levy fees and
charges. At the same time, the Authority exercises "the general corporate powers conferred by laws upon private and
government-owned or controlled corporations."

In light of the foregoing, the Authority should be classified as an instrumentality of the national government which is
liable to pay taxes only with respect to the portions of the property, the beneficial use of which were vested in private
entities. When local governments invoke the power to tax on national government instrumentalities, such power is
construed strictly against local governments. The rule is that a tax is never presumed and there must be clear language in
the law imposing the tax. Any doubt whether a person, article or activity is taxable is resolved against taxation. This rule
applies with greater force when local governments seek to tax national government instrumentalities.20

Thus, the real property tax assessments issued by the City of Iloilo should be upheld only with respect to the portions
leased to private persons. In case the Authority fails to pay the real property taxes due thereon, said portions cannot be
sold at public auction to satisfy the tax delinquency. In Chavez v. Public Estates Authority it was held that reclaimed
lands are lands of the public domain and cannot, without Congressional fiat, be subject of a sale, public or private

In sum, the Court finds that the Authority is an instrumentality of the national government, hence, it is liable to pay real
property taxes assessed by the City of Iloilo on the IFPC only with respect to those portions which are leased to private
entities. Notwithstanding said tax delinquency on the leased portions of the IFPC, the latter or any part thereof, being a

3. ALLIED BANKING v. QUEZON
CITY GOVERNMENT
4. STA LUCIA v. CITY OF PASIG
property of public domain, cannot be sold at public auction. This means that the City of Iloilo has to satisfy the tax
delinquency through means other than the sale at public auction of the IFPC.
On December 1995, the Quezon City government enacted Ordinance No. 357. The second sentence of Section 3 of the
ordinance for a general revision of real property assessments. It also provided that parcels of land conveyed for
remuneratory consideration after the effectivity of said revision shall be subject to real estate tax based on the actual
amount reflected in the deed of conveyance or the current approved zonal valuation of the BIR prevailing at the time of
conveyance, whichever is higher. On 1998, Allied Bank purchased from Natividad et al. a parcel of land on Quezon City
worth P38,000,000.00. Prior to the sale, Natividad et al. had been paying the annual real property tax based on the
property’s fair market value of P4,500,000.00. Allied Bank was then later required to pay P102,600.00 as quarterly real
estate tax which pegged the market value of the property at P38,000,000.00. It paid the quarterly real estate tax for the
property from the 1st quarter of 1999 up to the 3rd quarter of 2000 with some payments made under protest. It then sent
a demand letter to the Quezon City Treasurer’s Office seeking a refund of the real estate taxes which was denied. Allied
Bank then filed a petition for prohibition and declaratory relief before the RTC for the declaration of nullity of Section 3 of
the ordinance as it is an invalid classification of real properties which are conveyed and those which are not, the latter
remaining to be valued and assessed in accordance with the general revisions of assessments of real properties. Quezon
City later enacted Ordinance No. SP-1032 which repealed the assailed proviso in Section 3 of the 1995 Ordinance as it
violated the uniformity rule of taxation which is guaranteed by the Constitution. Petitioner subsequently moved to declare
respondents in default but respondents moved to dismiss the petition, averring that the passage of the repealing ordinance
had rendered the petition moot and academic. Petitioner opposed the motion claiming its claim for refund and attorney’s
fees had not been mooted, and the trial court still had to determine if Section 3 of the ordinance is null and void ab initio.
The trial court granted respondents’ motion to dismiss saying that there is no need to resolve whether the ordinance is null
and void as the same was already declared violative of the “uniformity rule” on taxation by the Quezon City Council itself
and as for the claim for refund, the RTC did not take cognizance of the case as an administrative remedy was still available.
Allied Bank filed a Motion for Reconsideration which was denied so it went to the Supreme Court on appeal by certiorari
under Rule 45.
Issue: WHETHER OR NOT SECTION 3, QUEZON CITY ORDINANCE NO. 357, SERIES OF 1995, WHICH WAS
ABROGATED FOR BEING UNCONSTITUTIONAL CAN BE THE BASIS OF COLLECTING REAL ESTATE TAXES PRIOR
TO ITS REPEAL
Held: The second sentence of Section 3 of the Ordinance is null and void ab initio for being ultra vires and for contravening
the provisions of the Local Government Code. It acquired no legal effect and conferred no rights from its inception. Under
the Local Government Code, real properties shall be appraised at the current and fair market value prevailing in the locality
where the property is situated and classified for assessment purposes on the basis of its actual use. It further held that the
proviso directing that the real property tax be based on the actual amount reflected in the deed of conveyance or the
prevailing BIR zonal value is invalid not only because it mandates an exclusive rule in determining the fair market value
but more so because it departs from the established procedures stated in the Local Assessment Regulations No. 1-92 and
unduly interferes with the duties statutorily placed upon the local assessor by completely dispensing with his analysis and
discretion which the Code and the regulations require to be exercised. An ordinance that contravenes any statute is ultra
vires and void.
Petitioner is the registered owner of several parcels of land with TCT Nos. 39112, 39110 and 38457, all of which indicated
that the lots were located in Barrio Tatlong Kawayan, Municipality of Pasig.
The parcel of land covered by TCT No. 39112 was consolidated with that covered by TCT No. 518403, which was situated
in Barrio Tatlong Kawayan, Municipality of Cainta, Province of Rizal.The two combined lots were subsequently partitioned
into three, for which TCT Nos. 532250, 598424, and 599131, now all bearing the Cainta address, were issued.
TCT No. 39110 was also divided into two lots, becoming TCT Nos. 92869 and 92870.The lot covered by TCT No. 38457
was not segregated, but a commercial building owned by Sta. Lucia East Commercial Center, Inc., a separate corporation,
was built on it.

Upon Pasig’s petition to correct the location stated in TCT Nos. 532250, 598424, and 599131, the Land Registration Court
ordered the amendment of the TCTs to read that the lots with respect to TCT No. 39112 were located in Barrio Tatlong
Kawayan, Pasig City.

On January 31, 1994, Cainta filed a petition for the settlement of its land boundary dispute with Pasig before the Antipolo
RTC docketed as Civil Case No. 94-3006, is still pending up to this date.

On November 28, 1995, Pasig filed a Complaint, docketed as Civil Case No. 65420, against Sta. Lucia for the collection
of real estate taxes, including penalties and interests, on the lots covered by TCT Nos. 532250, 598424, 599131, 92869,
92870 and 38457, including the improvements thereon.

Sta. Lucia alleged that it had been religiously paying its real estate taxes to Cainta, just like what its predecessors-in-
interest did, by virtue of the demands and assessments made and the Tax Declarations issued by Cainta on the claim that
the subject properties were within its territorial jurisdiction. Sta. Lucia further argued that since 1913, the real estate taxes
for the lots covered by the above TCTs had been paid to Cainta.

Cainta moved to intervene on the ground that its interest would be greatly affected by the outcome of the case. It averred
that it had been collecting the real property taxes on the subject properties even before Sta. Lucia acquired them. Cainta
further asseverated that the establishment of the boundary monuments would show that the subject properties are within
its metes and bounds.

Sta. Lucia and Cainta thereafter moved for the suspension of the proceedings, and claimed that the pending petition in the
Antipolo RTC, for the settlement of boundary dispute between Cainta and Pasig, presented a prejudicial question to the
resolution of the case. The RTC denied such for lack of merit. Holding that the TCTs were conclusive evidence as to its
ownership and location, the RTC, rendered a decision in favor of Pasig.

Judgment is likewise rendered against the intervenor Municipality of Cainta, Rizal, ordering it to refund to Sta. Lucia Realty
and Development, Inc. the realty tax payments improperly collected and received by the former from the latter in the
aggregate amount ofP358, 403.68.

After Sta. Lucia and Cainta filed their Notices of Appeal, Pasig, on September 11, 1998, filed a Motion for Reconsideration
of the RTCs August 10, 1998 Decision.
The RTC granted Pasigs motion and modified its earlier decision to include the realty taxes due on the improvements on
the subject lots.

Sta. Lucia assailed the RTCs order granting the execution which was granted by the CA. It added that the boundary dispute
case presented a prejudicial question which must be decided before Pasig can collect the realty taxes due over the subject
properties.
Meanwhile, the appeal filed by Sta. Lucia and Cainta was decided by the CA affirming RTCs decision declaring that there
was no proper legal basis to suspend the proceedings.

Sta. Lucia and Cainta filed separate Motions for Reconsideration which was denied by the CA.
Hence, these petitions.

ISSUES:
Whether Sta. Lucia should continue paying its real property taxes to Cainta, as it alleged to have always done, or to Pasig,
as the location stated in Sta. Lucia’s TCTs?

The petition is granted.

POLITICAL LAW: authority of the local government unit to collect real property taxes

The Court agrees with the CA that the resolution of the boundary dispute between Pasig and Cainta would determine
which local government unit is entitled to collect realty taxes from Sta. Lucia

Under Sections 5 and 57 of the Real Property Tax Code, the authority to collect real property taxes is vested in the locality
where the property is situated. This requisite was reiterated in Sections 201 and 233 of the Local Government Code.

The only import of these provisions is that, while a local government unit is authorized under several laws to collect real
estate tax on properties falling under its territorial jurisdiction, it is imperative to first show that these properties are
unquestionably within its geographical boundaries.

The importance of drawing with precise strokes the territorial boundaries of a local unit of government cannot be
overemphasized. The boundaries must be clear for they define the limits of the territorial jurisdiction of a local government
unit. It can legitimately exercise powers of government only within the limits of its territorial jurisdiction. Beyond these limits,
its acts are ultra vires.

Needless to state, any uncertainty in the boundaries of local government units will sow costly conflicts in the exercise of
governmental powers which ultimately will prejudice the people's welfare. This is the evil sought to be avoided by the Local
Government Code in requiring that the land area of a local government unit must be spelled out in metes and bounds, with
technical descriptions.
Clearly therefore, the local government unit entitled to collect real property taxes from Sta. Lucia must undoubtedly show
that the subject properties are situated within its territorial jurisdiction; otherwise, it would be acting beyond the powers
vested to it by law.

Although it is true that Pasig is the locality stated in the TCTs of the subject properties, both Sta. Lucia and Cainta aver
that the metes and bounds of the subject properties, as they are described in the TCTs, reveal that they are within Caintas
boundaries. This only means that there may be a conflict between the location as stated and the location as technically
described in the TCTs. Mere reliance therefore on the face of the TCTs will not suffice as they can only be conclusive
evidence of the subject properties locations if both the stated and described locations point to the same area.

The Antipolo RTC, wherein the boundary dispute case between Pasig and Cainta is pending, would be able to best
determine once and for all the precise metes and bounds of both Pasigs and Caintas respective territorial jurisdictions.
The resolution of this dispute would necessarily ascertain the extent and reach of each local governments authority, a
prerequisite in the proper exercise of their powers, one of which is the power of taxation.
 In light of the foregoing, 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 Pasigs and
Caintas rights. 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.

The decision and resolution of the Court of Appeals are set aside.

5. LRT v. CBAA Light Rail Transit Authority (LRTA) is a government-owned and controlled corporation created and organized under E.O.
No. 603. It provides that LRTA is responsible for the construction, operation, maintenance and/or lease of light rail transit
system in the Philippines. It fulfilment of its purpose it acquired real properties and eventually constructed structural
improvements including buildings, carriageways, passenger terminal stations, and installed various kinds of machinery
and equipment and facilities in order to operate.
In 1984, the City Assessor of Manila assessed the real properties of LRTA including the improvements it constructed and
installed, as provided in the Real Property Tax Code, commencing with the year 1985. LRTA paid almost all the real
property taxes except the taxes for the carriageways and passenger terminal stations. It reasoned that those properties
are not real properties under the Real Property Tax Code being for public use or purpose, but the City Assessor denied
the claim.

LRTA appealed with the Local Board of Assessment Appeals of Manila (LBAA-Manila) but was also denied by the latter.
LBAA-Manila held that the carriageways and passenger terminal stations are improvements; thus they are real property
under the Real Property Tax Code. The Court of Appeals (CA) also denied the appeal of LRTA. CA added to the ruling of
the LBAA-Manila that the properties in question were not owned by the government; thus no exemption should be given.
The CA also held that LRTA is a taxable entity and it uses the LRT system for its benefit. Lastly the CA explained that
LRTA is a profit-oriented enterprise who only serves those paying the fare.

ISSUE: Whether LRTA’s carriageways and passenger terminal stations are subject to real property taxes.

HELD:
Both carriageways and passenger terminal stations are subject to real property taxes. The Supreme Court raised three
points in its ruling:
First, the improvements in question are real property due to its characteristics. For tax purposes the concept of industrial
accession as pointed out by LRTA is not important, rather it should be determined based on the real property’s incidents
and from its natural and legal effects. As illustrated in the case, the carriageways and passenger terminal stations despite
its attachment to public roads still shows its physical separability being elevated structures and inaccessible to the public.
The Court further pointed out that the accessibility of public roads are different from the improvements since the latter are
accessible to the train and its passengers.

Second, the basis of assessment or its actual use of the properties are for those who can afford the fare. The LRT is
different with public roads as to its actual use. Public roads are freely utilized by all types of vehicles and people, but the
improvements made by are only accessible to trains and those who can afford the fare imposed.
Third, LRTA failed to show proof that it can claim exemption from real property tax. An important law pointed out by the
Court was E.O. No. 603 which created and organized LRTA, but it did not state that it can claim exemption from real
property taxes. Article 4 of E.O. No. 603 only provides exemption as to direct and indirect taxes, duties or fees in connection
with the importation of equipment not locally available. The Court also held at this point that pretending that the national
government owns the improvements, LRTA cannot be granted exemption because it operates like a private corporation
 engaged in mass transport industry; wherein it is clothed with corporate status and power in fulfilment of its proprietary
purpose. Thus LRTA is a taxable entity.

Given all the points raised by Supreme Court, it only goes to shows that the City Assessor of Manila was correct in including
the carriageways and passenger terminal stations in the assessment for real property taxes.

6. MACTAN AIRPORT v. CITY OF Petitioner, Mactan-Cebu International Airport Authority (MCIAA) was created by Congress under Republic Act No.
LAPU LAPU 6958. Upon its creation, petitioner enjoyed exemption from realty taxes imposed by the National Government or any of its
political subdivision. However, upon the effectivity of the LGC the Supreme Court rendered a decision that the petitioner
is no longer exempt from realty estate taxes.

Respondent City issued to petitioner a Statement of Real Estate Tax assessing the lots comprising
the Mactan International Airport which included the airfield, runway, taxi way and the lots on which these are
built. Petitioner contends that these lots, and the lots to which they are built, are utilized solely and exclusively for public
purposes and are exempt from real property tax. Petitioner based its claim for exemption on DOJ Opinion No. 50.

Respondent issued notices of levy on 18 sets of real properties of petitioners. Petitioner filed a petition for Prohibition,
TRO, and a writ of preliminary injunction with RTC Lapu lapu which sought to enjoin respondent City from issuing the
warrant of levy against petitioner’s properties from selling them at public auction for delinquency in realty tax obligations.

Petitioner claimed before the RTC that it had discovered that respondent City did not pass any ordinance authorizing the
collection of real property tax, a tax for the special education fund (SEF), and a penalty interest for its nonpayment.
Petitioner argued that without the corresponding tax ordinances, respondent City could not impose and collect real property
tax, an additional tax for the SEF, and penalty interest from petitioner.

RTC granted the writ of preliminary which was later on lifted upon motion by the respondents.

(fait accompli)

RULING OF THE CA: Court of Appeals held that petitioner’s airport terminal building, airfield, runway, taxiway, and the
lots on which they are situated are not exempt from real estate tax reasoning as follows: Under the Local Government
Code (LGC for brevity), enacted pursuant to the constitutional mandate of local autonomy, all natural and juridical persons,
including government-owned or controlled corporations (GOCCs), instrumentalities and agencies, are no longer exempt
from local taxes even if previously granted an exemption. The only exemptions from local taxes are those specifically
provided under the Code itself, or those enacted through subsequent legislation.

WHEREFORE, in view of the foregoing, judgment is hereby rendered by us as follows:

a. We DECLARE the airport terminal building, the airfield, runway, taxiway and the lots on which they are
situated NOT EXEMPT from the real estate tax imposed by the respondent City of Lapu-Lapu;
b. We DECLARE the imposition and collection of the real estate tax, the additional levy for the Special Education
Fund and the penalty interest as VALID and LEGAL. However, pursuant to Section 255 of the Local Government
Code, respondent city can only collect an interest of 2% per month on the unpaid tax which total interest shall, in
no case, exceed thirty-six (36) months;
We DECLARE the sale in public auction of the aforesaid properties and the eventual forfeiture and purchase of the subject
property by the respondent City of Lapu-Lapu as NULL and VOID. However, petitioner MCIAA’s property is encumbered
only by a limited lien possessed by the respondent City of Lapu-Lapu in accord with Section 257 of the Local Government
 Code.

RULING OF THE SUPREME COURT:

MIAA is not a government-owned or controlled corporation under Section 2(13) of the Introductory Provisions of the
Administrative Code because it is not organized as a stock or non-stock corporation. Neither is MIAA a government-owned
or controlled corporation under Section 16, Article XII of the 1987 Constitution because MIAA is not required to meet the
test of economic viability. MIAA is a government instrumentality vested with corporate powers and performing essential
public services pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. As a government
instrumentality, MIAA is not subject to any kind of tax by local governments under Section 133(o) of the Local Government
Code. The exception to the exemption in Section 234(a) does not apply to MIAA because MIAA is not a taxable entity
under the Local Government Code. Such exception applies only if the beneficial use of real property owned by the Republic
is given to a taxable entity.

Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus are properties of public
dominion. Properties of public dominion are owned by the State or the Republic.
As properties of public dominion owned by the Republic, there is no doubt whatsoever that the Airport Lands and Buildings
are expressly exempt from real estate tax under Section 234(a) of the Local Government Code. This Court has also
repeatedly ruled that properties of public dominion are not subject to execution or foreclosure sale.

1. Petitioner’s properties that are actually, solely and exclusively used for public purpose, consisting of the airport
terminal building, airfield, runway, taxiway and the lots on which they are situated, EXEMPT from real property tax
imposed by the City of Lapu-Lapu.
2. VOID all the real property tax assessments, including the additional tax for the special education fund and the
penalty interest, as well as the final notices of real property tax delinquencies, issued by the City of Lapu-Lapu on
petitioner’s properties, except the assessment covering the portions that petitioner has leased to private parties.
3. NULL and VOID the sale in public auction of 27 of petitioner’s properties and the eventual forfeiture and purchase
of the said properties by respondent City of Lapu-Lapu. We likewise declare VOID the corresponding Certificates
of Sale of Delinquent Property issued to respondent City of Lapu-Lapu.

7. LUNG CENTER v. CITY OF The petitioner Lung Center is a non-stock and non-profit entity.
QUEZON CITY It is the registered owner of a parcel of land. Erected in the middle lot is a hospital known as the Lung Center of the
Philippines. A big space at the ground floor is being leased to private parties, for canteen and small store spaces, and to
medical or professional practitioners who use the same as their private clinics for their patients whom they charge for their
professional services.

Almost one-half of the entire area on the left side of the building along Quezon Avenue is vacant and idle, while a big
portion on the right side, at the corner, is being leased for commercial purposes to a private enterprise known as the
Elliptical Orchids and Garden Center.

The petitioner accepts paying and non-paying patients. It also renders medical services to out-patients, both paying and
non-paying. Aside from its income from paying patients, the petitioner receives annual subsidies from the government.

Both the land and the hospital building of the petitioner were assessed for real property taxes in the amount of P4,554,860
by the City Assessor of Quezon City.
The petitioner filed a Claim for Exemption from real property taxes with the City Assessor, predicated on its claim that it is
a charitable institution. The petitioner’s request was denied,

Issues
1. Whether the petitioner is a charitable institution
2. Whether the real properties of the petitioner are exempt from real property taxes

Ruling

First issue: petitioner is a charitable institution within the context of the 1973 and 1987 Constitutions.

To determine whether an enterprise is a charitable institution/entity or not, the elements which should be considered include
the
Statute creating the enterprise,
Its corporate purposes,
Its constitution and by-laws,
The methods of administration,
The nature of the actual work performed,
The character of the services rendered,
The indefiniteness of the beneficiaries, and
The use and occupation of the properties.

In the legal sense, a charity may be fully defined as a gift, to be applied consistently with existing laws, for the benefit of
an indefinite number of persons, either by bringing their minds and hearts under the influence of education or religion, by
assisting them to establish themselves in life or otherwise lessening the burden of government.

The word “charitable” is not restricted to relief of the poor or sick. The test of a charity and a charitable organization are
in law the same. The test whether an enterprise is charitable or not is whether it exists to carry out a purpose reorganized
in law as charitable or whether it is maintained for gain, profit, or private advantage.

Under P.D. No. 1823, the petitioner was organized for the welfare and benefit of the Filipino people principally to help
combat the high incidence of lung and pulmonary diseases in the Philippines.

Hence, the medical services of the petitioner are to be rendered to the public in general in any and all walks of life including
those who are poor and the needy without discrimination. After all, any person, the rich as well as the poor, may fall sick
or be injured or wounded and become a subject of charity.

As a general principle, a charitable institution does not lose its character as such and its exemption from taxes simply
because it derives income from paying patients, whether out-patient, or confined in the hospital, or receives subsidies from
the government, so long as the money received is devoted or used altogether to the charitable object which it is intended
to achieve; and no money inures to the private benefit of the persons managing or operating the institution.

In this case, the petitioner adduced substantial evidence that it spent its income, including the subsidies from the
government for its patients and for the operation of the hospital. It even incurred a net loss in 1991 and 1992 from its
operations.
Second Issue: those portions of its real property that are leased to private entities are not exempt from real property taxes
as these are not actually, directly and exclusively used for charitable purposes.

The settled rule in this jurisdiction is that laws granting exemption from tax are construed strictissimi juris against the
taxpayer and liberally in favor of the taxing power. Taxation is the rule and exemption is the exception. The effect of
an exemption is equivalent to an appropriation. Hence, a claim for exemption from tax payments must be clearly shown
and based on language in the law too plain to be mistaken.

Section 2 of Presidential Decree No. 1823, relied upon by the petitioner, specifically provides that the petitioner shall enjoy
the tax exemptions and privileges: The Lung Center of the Philippines shall be exempt from the payment of taxes, charges
and fees imposed by the Government or any political subdivision or instrumentality thereof with respect to equipment
purchases made by, or for the Lung Center.

It is plain as day that under the decree, the petitioner does not enjoy any property tax exemption privileges for its real
properties as well as the building constructed thereon. If the intentions were otherwise, the same should have been among
the enumeration of tax exempt privileges under Section 2.

Section 28(3), Article VI of the 1987 Philippine Constitution provides, thus: Charitable institutions, churches and
parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings, and improvements,
actually, directly and exclusively used for religious, charitable or educational purposes shall be exempt from taxation.

The tax exemption under this constitutional provision covers property taxes only. What is exempted is not the institution
itself . . .; those exempted from real estate taxes are lands, buildings and improvements actually, directly and exclusively
used for religious, charitable or educational purposes.”

In light of the changes in the Constitution, the petitioner cannot rely on our ruling in Herrera v. Quezon City Board of
Assessment Appeals which was promulgated on September 30, 1961 before the 1973 and 1987 Constitutions took effect.

Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 in order to be entitled to the exemption, the petitioner is
burdened to prove, by clear and unequivocal proof, that (a) it is a charitable institution; and (b) its real properties are
ACTUALLY, DIRECTLY and EXCLUSIVELY used for charitable purposes.

“Exclusive” is defined as possessed and enjoyed to the exclusion of others; debarred from participation or enjoyment; and
“exclusively” is defined, “in a manner to exclude; as enjoying a privilege exclusively.” If real property is used for one or
more commercial purposes, it is not exclusively used for the exempted purposes but is subject to taxation.

The words “dominant use” or “principal use” cannot be substituted for the words “used exclusively” without doing violence
to the Constitutions and the law. Solely is synonymous with exclusively.

What is meant by actual, direct and exclusive use of the property for charitable purposes is the direct and immediate and
actual application of the property itself to the purposes for which the charitable institution is organized. It is not the use of
the income from the real property that is determinative of whether the property is used for tax-exempt purposes.

Accordingly, the portions of the land leased to private entities as well as those parts of the hospital leased to private
individuals are not exempt from such taxes. On the other hand, the portions of the land occupied by the hospital and
portions of the hospital used for its patients, whether paying or non-paying, are exempt from real property taxes.
8. FELS ENERGY v. CITY Two consolidated cases were filed by FELS Energy, Inc. (FELS) and National Power Corporation (NPC), respectively.
ASSESSOR

NPC entered into a lease contract with Polar Energy, Inc. over diesel engine power barges moored at Batangas. The
contract, denominated as an Energy Conversion Agreement, was for a period of five years wherein, NPC shall be
responsible for the payment of:
(a) all taxes, import duties, fees, charges and other levies imposed by the National Government
(b) all real estate taxes and assessments, rates and other charges in respect of the Power Barges

Subsequently, Polar Energy, Inc. assigned its rights under the Agreement to FELS. Thereafter, FELS received an
assessment of real property taxes on the power barges. The assessed tax, which likewise covered those due for 1994,
amounted to P56,184,088.40 per annum. FELS referred the matter to NPC, reminding it of its obligation under the
Agreement to pay all real estate taxes. It then gave NPC the full power and authority to represent it in any conference
regarding the real property assessment of the Provincial Assessor.

NPC sought reconsideration of the Provincial Assessor’s decision to assess real property taxes on the power barges.
However, the motion was denied. The Local Board of Assessment Appeals (LBAA) ruled that the power plant facilities,
while they may be classified as movable or personal property, are nevertheless considered real property for taxation
purposes because they are installed at a specific location with a character of permanency.

FELS appealed the LBAA’s ruling to the Central Board of Assessment Appeals (CBAA). The CBAA rendered a
Decision finding the power barges exempt from real property tax.

It was later reversed by the cbaa upon reconsideration and affirmed by the CA

ISSUE
Whether power barges, which are floating and movable, are personal properties and therefore, not subject to real property
tax.

RULING
No. Article 415 (9) of the New Civil Code provides that "[d]ocks and structures which, though floating, are intended by their
nature and object to remain at a fixed place on a river, lake, or coast" are considered immovable property. Thus, power
barges are categorized as immovable property by destination, being in the nature of machinery and other implements
intended by the owner for an industry or work which may be carried on in a building or on a piece of land and which tend
directly to meet the needs of said industry or work.
The findings of the LBAA and CBAA that the owner of the taxable properties is petitioner FELS is the entity being taxed by
the local government. As stipulated under the Agreement:
OWNERSHIP OF POWER BARGES. POLAR shall own the Power Barges and all the fixtures, fittings, machinery and
equipment on the Site used in connection with the Power Barges which have been supplied by it at its own cost. POLAR
shall operate, manage and maintain the Power Barges for the purpose of converting Fuel of NAPOCOR into electricity.
It follows then that FELS cannot escape liability from the payment of realty taxes by invoking its exemption in Section 234
(c) of R.A. No. 7160,
…the law states that the machinery must be actually, directly and exclusively used by the government owned or
controlled corporation;
 The agreement POLAR undertakes that until the end of the Lease Period, it will operate the Power Barges to convert such
Fuel into electricity. Therefore, FELS shall be liable for the realty taxes and not the NPC who is not actually, directly and
exclusively using the same. It is a basic rule that obligations arising from a contract have the force of law between the
parties

CONCLUSION
Petitions are DENIED.

9. MAYOR OF QC v. RCBC  Spouses Roberto and Monette Naval obtained a loan from respondent Rizal Commercial Banking Corporation,
secured by a real estate mortgage of properties covered by 3 TCTs.
 In 1998, the real estate mortgage was later foreclosed and the properties were sold at public auction with respondent
as the highest bidder. Certificates of Sale were issued in favor of respondent on August 4, 1998. However, the
certificates of sale were allegedly registered only on February 10, 2004.
 Meanwhile, on May 30, 2003, an auction sale of tax delinquent properties was conducted by the City Treasurer of QC
which included the properties 3 TCTs.
o Alvin Emerson S. Yu was adjudged as the highest bidder, and upon payment of the tax delinquencies, he was
issued Certificate of Sale of Delinquent Property.
 On June 10, 2004, respondent tendered payment for all of the assessed tax delinquencies, interest, and other costs
of the subject properties with the Office of the City Treasurer, Quezon City. They refused to accept said tender of
payment.
 Respondent filed before the Office of the City Treasurer a Petition for the acceptance of its tender of payment and for
the subsequent issuance of the certificate of redemption in its favor. Denied also.
 Therefore, respondent filed a Petition for Mandamus with Prayer for Issuance TRO and writ of PI before the
RTC. Petitioners contended:
o It had until February 10, 2005, or one (1) year from the date of registration of the certificate of sale on February
10, 2004, within which to redeem the subject properties, pursuant to Section 78 of Presidential Decree (P.D.)
No. 464 or the Real Property Tax Code.
 RTC denied the Petition. It held that respondents reliance on Section 78 of P.D. No. 464 as basis of the reckoning
period in counting the one (1) year period within which to redeem the subject properties was misplaced, since P.D.
No. 464 has been expressly repealed by Republic Act (R.A.) No. 7160, or the Local Government Code.
 Respondent filed a MR. It was granted. RTC ratiocinated that the counting of the one (1) year redemption period of
tax delinquent properties sold at public auction should start from the date of registration of the certificate of sale or the
final deed of sale in favor of the purchaser, so that the delinquent registered owner or third parties interested in the
redemption may be notified that the delinquent property had been sold, and that they have one (1) year from said
constructive notice of the sale within which to redeem the property. The RTC was also of the opinion that Section 261,
R.A. No. 7160 did not amend Section 78 of P.D. No. 464.

ISSUE: WON RTC erred in granting the petition of RCBC. NO.

HELD:
 Section 78 of P.D. No. 4641 provides for a one-year redemption period for properties foreclosed due to tax delinquency.
o the owner or any person holding a lien or claim over a tax delinquent property sold at public auction has one
(1) year from the date of registration of sale to redeem the property.
  However, since the passing of R.A. No. 7160, such is no longer controlling. Jurisdiction thrives to the effect that
R.A. No. 7160 repealed P.D. No. 464. From January 1, 1992 onwards, the proper basis for the computation of the real
property tax payable, including penalties or interests, if applicable, must be R. A. No. 7160. The crafter of the Local
Government Code clearly worded the above-cited Section to repeal P.D. No. 464, it is a clear showing of their
legislative intent that R.A. No. 7160 was to supersede P.D. No. 464. (It was included in the repealing clause)

 As such, it is apparent that in case of sale of tax delinquent properties, R.A. No. 7160 is the general law
applicable. Consequently, as regards redemption of tax delinquent properties sold at public auction, the pertinent
provision is Section 261 of R.A. No. 7160. 2

 the owner of the delinquent real property or person having legal interest therein, or his representative, has the right to
redeem the property within one (1) year from the date of sale upon payment of the delinquent tax and other fees.
 The period of redemption of tax delinquent properties should be counted not from the date of registration of the
certificate of sale, as previously provided by Section 78 of P.D. No. 464, but rather on the date of sale of the tax
delinquent property, as explicitly provided by Section 261 of R.A. No. 7160.

 Nonetheless, the government of Quezon City, pursuant to the taxing power vested on local government
unit, enacted City Ordinance No. SP-91, S-93, otherwise known as the Quezon City Revenue Code of 1993,
providing, among other things, the procedure in the collection of delinquent taxes on real properties within the territorial
jurisdiction of Quezon City. Section 14 (a), Paragraph 7.3

o the ordinance is explicit that the one-year redemption period should be counted from the date of the
annotation of the sale of the property at the proper registry. At first glance, this provision runs counter to that
of Section 261 of R.A. No. 7160 which provides that the one year redemption period shall be counted from the
date of sale of the tax delinquent property.
 4There is, therefore, a need to reconcile these seemingly conflicting provisions of a general law and a special
law.
 A general statute is one which embraces a class of subjects or places and does not omit any subject or place naturally
belonging to such class. A special statute, as the term is generally understood, is one which relates to particular
persons or things of a class or to a particular portion or section of the state only.
 In the present case, R.A. No. 7160 is to be construed as a general law, while City Ordinance No. SP-91, S-93 is a
special law, having emanated only from R.A. No. 7160 and with limited territorial application in Quezon City only.
 A general law and a special law on the same subject should be accordingly read together and harmonized, if possible,
with a view to giving effect to both. Where there are two acts, one of which is special and particular and the other
general which, if standing alone, would include the same matter and thus conflict with the special act, the special must
prevail, since it evinces the legislative intent more clearly than that of the general statute and must be taken as intended
to constitute an exception to the rule. More so, when the validity of the law is not in question.
 In giving effect to these laws, it is also worthy to note that in cases involving redemption, the law protects the original
owner. It is the policy of the law to aid rather than to defeat the owners right. Therefore, redemption should be looked

4
 upon with favor and where no injury will follow, a liberal construction will be given to our redemption laws, specifically
on the exercise of the right to redeem.
 To harmonize the provisions of the two laws and to maintain the policy of the law to aid rather than to defeat
the owners right to redeem his property, Section 14 (a), Paragraph 7 of City Ordinance No. SP-91, S-93 should
be construed as to define the phrase one (1) year from the date of sale as appearing in Section 261 of R.A. No.
7160, to mean one (1) year from the date of the annotation of the sale of the property at the proper registry.
o Consequently, the counting of the one (1) year redemption period of property sold at public auction for its tax
delinquency should be counted from the date of annotation of the certificate of sale in the proper Register of
Deeds.
o In this case, from the date of registration of the Certificate of Sale of Delinquent Property on February 10,
2004, respondent had until February 10, 2005 to redeem the subject properties.
o Hence, its tender of payment of the subject properties tax delinquencies and other fees on June 10, 2004, was
well within the redemption period, and it was manifest error on the part of petitioners to have refused such
tender of payment.
10. NAPOCOR v. QUEZON NPC is a GOCC that entered into an Energy Conversion Agreement (ECA) under a build-operate-transfer (BOT)
PROVINCE arrangement with Mirant Pagbilao Corp. Under the agreement, Mirant will build and finance a thermal power plant in
Quezon, and operate and maintain the same for 25 years, after which, Mirant will transfer the power plant to the
Respondent without compensation. NPC also undertook to pay all taxes that the government may impose on Mirant.
Quezon then assessed Mirant real property taxes on the power plant and its machineries.

ISSUES:
(1) Can Petitioner file the protest against the real property tax assessment?
(2) Can Petitioner claim exemption from the RPT given the BOT arrangement with Mirant?
(3) Is payment under protest required before an appeal to the LBAA is made?

HELD:
(1) NO. The two entities vested with personality to contest an assessment are (a) the owner or (b) the person with legal
interest in the property. NPC is neither the owner nor the possessor/user of the subject machineries even if it will acquire
ownership of the plant at the end of 25 years. The Court said that legal interest should be an interest that is actual and
material, direct and immediate, not simply contingent or expectant. While the Petitioner does indeed assume responsibility
for the taxes due on the power plant and its machineries, the tax liability referred to is the liability arising from law that the
local government unit can rightfully and successfully enforce, not the contractual liability that is enforceable between the
parties to a contract. The local government units can neither be compelled to recognize the protest of a tax assessment
from the Petitioner, an entity against whom it cannot enforce the tax liability.

(2) NO. To successfully claim exemption under Section 234 (c) of the LGC, the claimant must prove two elements: a) the
machineries and equipment are actually, directly, and exclusively used by local water districts and government-owned or
controlled corporations; and b) the local water districts and government-owned and controlled corporations claiming
exemption must be engaged in the supply and distribution of water and/or the generation and transmission of electric
power. Since neither the Petitioner nor Mirant satisfies both requirements, the claim for exemption must fall.

(3) YES. If a taxpayer disputes the reasonableness of an increase in a real property tax assessment, he is required to "first
pay the tax" under protest. The case of Ty does not apply as it involved a situation where the taxpayer was questioning
the very authority and power of the assessor, acting solely and independently, to impose the assessment and of the
treasurer to collect the tax. A claim for tax exemption, whether full or partial, does not question the authority of local
assessors to assess real property tax.
11. NAPOCOR v. CBAA In a letter dated 21 March 2002, respondent City Assessor of Baguio City notified petitioner Camp John Hay
Development Corporation about the issuance against it of thirty-six (36) Owner's Copy of Assessment of Real Property
(ARP), covering various buildings of petitioner and two (2) parcels of land owned by the Bases Conversion Development
Authority (BCDA) in the John Hay Special Economic Zone (JHSEZ), Baguio City, which were leased out to petitioner.

Petitioner questioned the assessments for lack of legal basis due to the City Assessor's failure to identify the specific
properties and its corresponding assessed values. The City Assessor replied that the subject ARPs (with an additional
ARP on another building bringing the total number of ARPs to thirty-seven [37]) against the buildings of petitioner located
within the JHSEZ were issued on the basis of the approved building permits obtained from the City Engineer's Office of
Baguio City and pursuant to Sections 201 to 206 of RA No. 7160 or the LGC of 1991.

Petitioner filed with the Board of Tax Assessment Appeals (BTAA) of Baguio City an appeal under Section 226 2 of
the LGC of 1991 challenging the validity and propriety of the issuances of the City Assessor. Petitioner claimed that there
was no legal basis for the issuance of the assessments because it was allegedly exempted from paying taxes, national
and local, including real property taxes, pursuant to RA No. 7227, otherwise known as the Bases Conversion and
Development Act of 1992.

ISSUE(S) & RATIO

WON Petitioner is tax exempt, including real property taxes, pursuant to RA 7227 and Presidential Proclamation No. 420?

NO
With the above-enumerated reasons, it is obvious that in order for a complete determination of petitioner's alleged
exemption from payment of real property tax under RA No. 7160 or the LGC of 1991, there are factual issues needed to
be confirmed. Hence, being a question of fact, petitioner cannot do without first resorting to the proper administrative
remedies, or as previously discussed, by paying under protest the tax assessed in compliance with Section 252
thereof.

Accordingly, the CBAA and the CTA En Banc correctly ruled that real property taxes should first be paid before any
protest thereon may be considered. It is without a doubt that such requirement of "payment under protest" is a condition
sine qua non before an appeal may be entertained. Thus, remanding the case to the LBAA for further proceedings subject
to a full and up-to-date payment, either in cash or surety, of realty tax on the subject properties was proper.

To reiterate, the restriction upon the power of courts to impeach tax assessment without a prior payment, under protest, of
the taxes assessed is consistent with the doctrine that taxes are the lifeblood of the nation and as such their collection
cannot be curtailed by injunction or any like action; otherwise, the state or, in this case, the local government unit, shall
be crippled in dispensing the needed services to the people, and its machinery gravely disabled.

The right of local government units to collect taxes due must always be upheld to avoid severe erosion. This consideration
is consistent with the State policy to guarantee the autonomy of local governments and the objective of RA No.
7160 or the LGC of 1991 that they enjoy genuine and meaningful local autonomy to empower them to achieve their
fullest development as self-reliant communities and make them effective partners in the attainment of national
goals.

12. CITY OF DAVAO v. ESTATE OF
DALISAY
All told, We go back to what was at the outset stated, that is, that a claim for tax exemption, whether full or partial, does
not question the authority of local assessor to assess real property tax, but merely raises a question of the reasonableness
or correctness of such assessment, which requires compliance with Section 252 of the LGC of 1991. Such argument
which may involve a question of fact should be resolved at the first instance by the LBAA.
The CTA En Banc was correct in dismissing the petition in C.T.A. EB No. 48, and affirming the CBAA's position that it
cannot delve on the issue of petitioner's alleged non-taxability on the ground of exemption since the LBAA has not decided
the case on the merits. This is in compliance with the procedural steps prescribed in the law.
FALLO
WHEREFORE, the petition is DENIED for lack of merit. The Decision of the Court of Tax Appeals En Banc in C.T.A. EB
No. 48 is AFFIRMED. The case is remanded to the Local Board of Assessment Appeals of Baguio City for further
proceedings.
The Estate of Amado Dalisay owned several properties in Davao City
(1) Lot 1, Pcs11001298, covered by Transfer Certificate of Title (TCT) No. T202211 with Tax Declaration No. E13410484;
(2) Lot 6, Pcs11001298, covered by TCT No. T202215 with Tax Declaration No. E13410488; (3) Lot 7, Pcs11001298,
covered by TCT No. T- 202216 with Tax Declaration No. E13410489; (4) Lot 2, Pcs11001298, covered by TCT No.
T202212 with Tax Declaration No. E13410492; and (5) Building erected in Lot No. 26B and covered by Tax Declaration
No. E13410480.
These properties were advertised for sale at a public auction for non-payment of real estate taxes. No bidders appeared
on the date of the public auction, thus the properties were acquired by the City Government of Davao pursuant to Section
263 of the Local Government Code
Section 263. Purchase of Property By the Local Government Units for Want of Bidder. In case there is no bidder for the
real property advertised for sale as provided herein, the real property tax and the related interest and costs of sale, the
local treasurer conducting the sale shall purchase the property in behalf of the local government unit... Within one (1) year
from the date of such forfeiture, the taxpayer or any of his representative, may redeem the property by paying to the
local treasurer the full amount of the real property tax and the related interest and the costs of sale. If the property is not
redeemed as provided herein, the ownership thereof shall be vested on the local government unit concerned.
The Declaration of Forfeiture was issued by the City Treasurer when the delinquent taxpayer did not use the one year
period to redeem the property. The City caused the annotation of the 5 Declarations of Forfeiture on the TCTs of the
properties. Subsequently the respondent estate inquired to the City Treasurer the amount of the redemption price and it
showed an aggregate total of 4,996,534.67 PHP
The Estate delivered a written tender of payment of the redemption price. However the petition refused to accept it which
prompted the Estate to consign the amount to the RTC. An action for redemption was then initiated by the respondent
against petitioner.
RTC—ruled in favor of respondent
CA—affirmed decision of the RTC. The City has been remiss in its duty to immediately
issue the Declaration of Forefieture within 2 days from purchase of the property as mandated by Section 263 of the LGC.
ISSUE:
W/N the 1 year redemption period of forfeited tax delinquent properties purchased by the local government for want of a
bidder is reckoned from the date of the auction or sale or from the date of issuance of the declaration of forfeiture
HELD:
A valid redemption of property must be based on law which is the very source of this righr. It is necessary that compliance
with the rules set forth by law and jurisprudence should be shown in order to render validity to the exercise of this right.
The right acquired by the purchaser at an execution sale is inchoate and does not become absolute until after the expiration
of the redemption period without the right of redemption having been exercised.
Section 263 of the LGC lacks the definiteness as to the reckoning point for the redemption of tax delinquent properties. It
merely employees the phrase “within 1 year from the date of such forfeiture”. The City avers that the period commences
from the date of forfeiture—date of auction. The Estate insists that the redemption period begins from the date when the
declarations of forfeiture were issued.

However the argument of Petitioner City point toward a more just a fair resolution of the vagueness of the law.
(1) Forfeiture: refers to the date when the tax delinquent properties were sold at public auction. Section 263 of the LGC
takes into effect when there is an absence of a bidder in a public auction for tax delinquent properties. The absence of
public impels the City Treasurer to purchase such property in behalf of the city. Reason would dictate that this purchase
by the city is the forfeiture mandated by law. The forfeiture is the situation where the local government ipso facto forfeits
the property for want of a bidder. This happens on the date of the sale and not upon the issuance of the declaration of
forfeiture. If the court were to rule otherwise then the right of the local government to purchase would be from the time of
declaration of forfeiture—which is absurd.

(2) In the case of City Mayor v. RCBC, even though it involved Section 261 of the LGC, it passed upon the reckoning
period of the redemption period for auction tax delinquent properties. The court ruled pursuant to the amendments made
by RA 7160 to PD No. 464, the owner of the delinquent real property or person having legal interest or his
representative has right to redeem the property within 1 year from the date of sale upon payment of the delinquent tax and
other fees. The period of redemption of tax delinquent properties should be counted not from the date of registration BUT
the DATE OF SALE OF THE TAX DELINQUENT PROPERTY as provided by Section 261 of RA 7160.
Considering the fact that neither parties invokes the externes of an ordinance of similar import, the general law would
apply. The usage of the term sale and forfeiture in RA 7160 is connoted as the point in time when the owner is divested of
certain attributes of ownership over the property albeit only until the redemption of the property. This translates to no other
event but to the date of the public auction.

(3) Regarding the belated issuance of the Declarations of Forfeiture, the general rule is that the State cannot be put in
estoppel by the mistakes or errors of its officials or agents. However, it may only apply in special cases where the interest
of justice clearly require it. The delay on the part of the Estate to at least inquire into the outcome of the auction and its
misplaced reliance on a curious document heightens the belief of the Court that the City may not be deprived of a right
that has long been vested in its favor. This hinders the Court from applying the exceptions to the rule on estoppel, when
doing this would result in more impropriety. It is the City that would suffer an injustice if it were to be bound by its officer’s
suspect actions. The policy of enabling local governments to fully utilize the income potentialities of the real property tax
would be put at a losing end if tax delinquent properties could be recovered by the sheer expediency of a document
erroneously or, perhaps fraudulently, issued by its officers

The failure of the Estate to validly exercise its right of redemption within the statutory period had already resulted in the
consolidation of ownership over the properties by the City.
13. CE CASECNAN v. PROV OF On June 26, 1995, petitioner and the National Irrigation Administration (NIA) entered into a build-operate-transfer (BOT)
NUEVA ECIJA contract known as the "Amended and Restated Casecnan Project Agreement" (Casecnan Contract) relative to the
construction and development of the Casecnan Multi-Purpose Irrigation and Power Project (Casecnan Project) in
Pantabangan, Nueva Ecija and Alfonso Castaneda, Nueva Vizcaya. The Casecnan Project is a combined irrigation and
hydroelectric power generation facility using the Pantabangan Dam in Nueva Ecija. On September 29, 2003, petitioner
and NIA executed a Supplemental Agreement amending Article II of the Casecnan Contract which pertains to payment of
taxes. Article 2.2 thereof states that NIA must reimburse petitioner for real property taxes (RPT) provided the same was
paid upon NIA’s directive and with the concurrence of the Department of Finance.

On September 6, 2005, petitioner received from the Office of the Provincial Assessor a Notice of Assessment of Real
Property dated August 2, 2005, which indicates that for the years 2002 to 2005, its RPT due was 248,676,349.60. Petitioner
assailed the assessment with the Nueva Ecija Local Board of Assessment Appeals (Nueva Ecija LBAA) which dismissed
it on January 26, 2006. Undeterred, petitioner filed a Notice of Appeal with the Nueva Ecija Central Board of Assessment
Appeals (Nueva Ecija CBAA). During the pendency thereof, respondents collected from petitioner the RPT due under the
said assessment as well as those pertaining to the years 2006 up to the second quarter of 2008, totalling ₱363,703,606.88.
Petitioner paid the assessed RPT under protest; it also initiated proceedings questioning the validity of the collection with
respect to the years 2006 up to the second quarter of 2008. Thereafter, petitioner received a letter dated July 9, 2008 from
the Office of the Provincial Treasurer stating that it has RPT in arrears for the years 2002 up to the second quarter of 2008
amounting to ₱1,277,474,342.10. Petitioner received another letter dated August 29, 2008 from the same office clarifying
that its arrearages in RPT actually amounted to ₱1,279,997,722.70 (2008 RPT Reassessment). Again, petitioner
questioned this assessment through an appeal before the Nueva Ecija LBAA. While the same was pending, petitioner
received from respondents a letter dated September 10, 2008 demanding payment for its alleged RPT arrearages.

Hence, on September 23, 2008, petitioner filed with the RTC of San Jose City, Nueva Ecija a Complaint for injunction and
damages with application for temporary restraining order (TRO) and preliminary injunction praying to restrain the collection
of the 2008 RPT Reassessment. Petitioner emphasized, among others, that it was not the one which should pay the taxes
but NIA.

ISSUE:
Whether or not the CTA has the power to rule on a Petition for Certiorari assailing an interlocutory order of the
RTC relating to a local tax case.

RULING:
YES. Jurisdiction over the subject matter is required for a court to act on any controversy. It is conferred by law
and not by the consent or waiver upon a court. As such, if a court lacks jurisdiction over an action, it cannot decide the
case on the merits and must dismiss it.
With respect to the CTA, its jurisdiction was expanded and its rank elevated to that of a collegiate court with special
jurisdiction by virtue of Republic Act No. 9282. This expanded jurisdiction of the CTA includes its exclusive appellate
jurisdiction to review by appeal the decisions, orders or resolutions of the RTC in local tax cases originally decided or
resolved by the RTC in the exercise of its original or appellate jurisdiction.
Anent petitioner’s contention that it is the CA which has jurisdiction over a certiorari petition assailing an
interlocutory order issued by the RTC in a local tax case, the Court had this to say: If this Court were to sustain petitioners’
contention that jurisdiction over their certiorari petition lies with the CA, this Court would be confirming the exercise by two
judicial bodies, the CA and the CTA, of jurisdiction over basically the same subject matter – precisely the split-jurisdiction
situation which is anathema to the orderly administration of justice. The Court cannot accept that such was the legislative
motive, especially considering that the law expressly confers on the CTA, the tribunal with the specialized competence
over tax and tariff matters, the role of judicial review over local tax cases without mention of any other court that may
exercise such power. Thus, the Court agrees with the ruling of the CA that since appellate jurisdiction over private
respondents’ complaint for tax refund is vested in the CTA, it follows that a petition for certiorari seeking nullification of an
interlocutory order issued in the said case should, likewise, be filed with the same court. To rule otherwise would lead to
an absurd situation where one court decides an appeal in the main case while another court rules on an incident in the
very same case. Petition denied.