STA. LUCIA REALTY & DEVELOPMENT, INC.

, PETITIONER
V.

CITY OF PASIG. RESPONDENT

GR NO 166838 June 15, 2011
Leonarde-De Castro, J.
SV: Pasig filed a complaint against STa. Lucia for the collection of Real estate Taxes. The subject
properties are alleged to be within the boundaries of Cainta and STa. lucia has been paying the taxes to
Cainta like its predecessors-in-interest did although the TCTs of the subject properties indicate that the
properties where in the locality of Pasig. Cainta has already filed a petition for the settlement of land
boundary dispute with Pasig before an RTC in Antipolo when the complaint by Pasig was filed. Said
boundary dispute case is still pending before the Antipolo RTC. the RTC which handled the tax case
ruled in favor of Pasig and ordered STa. Lucia to pay Pasig real estate taxes on the properties and its
improvements. It held that the titles were conclusive as to where the properties were located and that the
pending case in antipolo does not pose a prejudicial question to the case at bar since both are civil cases.
SC: The Municipality, before it can exercise its powers in a certain area, must show first that the area is
within its geographical boundaries. A certificate of title is conclusive as to its ownership and location, this
does not preclude the filing of an action for the very purpose of attacking the statements therein. Antipolo
RTC would be able to best determine once and for all the precise metes and bounds of both Pasigs and
Caintas respective territorial jurisdiction. And this would then ascertain as to which municipality can
exercise its powers over the subject properties. Although the general rule is that for there to be a
prejudicial question, one must be acriminal case while the other is a civil case, the SC has relaxed the
application of the rule and at one time allowed one civil case to be held in abeyance while another civil
case was pending that was interrelated to it. For the meantime Sta. Lucia is asked to deposit the taxes due
in an escrow account with Land Bank.

1. STa. lucia realty is the registered owner of several parcels of land with TCT nos. 39112, 29110
and 28457 all of which indicated that the lots were located in Barrio Tatlong Kawayan,
Municipality of Pasig
a. 39112 was consolidated with TCT 518403 (another lot) which was situated in Barrio
Tatlong Kawayan, Municipality of Cainta, province of Rizal. The lot was later partitioned
into 3 which now bear the cainta address
b. 39110 was divided into 2 lots
c. 38457 was not segregated but a commercial building was built on it
2. The land registration court, upon Pasigs petition, ordered the amendment of the TCTs with
respect to TCT no. 39112 to read that they were located in Pasig.
3. Cainta filed a petition for the settlement of land boundary dispute with Pasig before the RTC Br
74 of Antipolo. Case is still pending
4. Pasig filed a complaint against STa. Lucia for the collection of Real estate taxes including
penalties and interests on the lots covered by the subject properties

a. STA. Lucia: it had been religiously paying to cainta just like what its predecessors-ininterest did by virtue of the demands and assessments made by Cainta.
b. Cainta was allowed to file its own Answer-in-intervention when it moved to intervene on
the ground that its interest would be greatly affected by the outcome of the case. That it
had been collecting taxes on the properties even before Sta. Lucia acquired them.
c. STa. lucia and Cainta moved for the suspension of the proceedings claiming tha the
pending petition before the Antipolo RTC (fact #3) presented a prejudicial question to the
resolution of the case
d. RTC denied this. TCTs were conclusive evidence as to the ownership and location. It
ordered Sta lucia to pay P273349.17 representing unpaid real estate taxes and penalties
among others
i. Judgment was also rendered against Cainta and was ordered to refund to Sta.
Lucia the improperly collected and received tax payments amounting to
P358,403.68
e. STa lucia and Cainta filed their notices of Appeal. Pasig on the other hand filed an MR
i. RTC granted the MR and modified its decision to include the realty taxes due on
the improvements of the subject lots. Sta Lucia now ordered to pay
P5,627,757.07 representing unpaid taxes and penalties on the improvements
f.

Sta. Lucia filed an amended notice of appeal to include the modified ruling

5. Pasig filed a motion for execution pending appeal. STa lucia and Cainta opposed this but RTC
still ordered the issuance of A writ of Execution against Sta. Lucia
6. Sta. Lucia filed a petition for Certiorari with the CA. this was raffled to the first division which
granted the petition and set aside and declared null and void the order granting the motion for
execution. That the boundary dispute presented a prejudicial question which must be decided
before Pasig can collect realty taxes over the subject properties
a. Pasig filed a petition for Certiorari before the SC but this was denied for being filed out
of time
7. Meanwhile the appeal filed by STa. lucia and Cainta was raffled to the Seventh division of CA
which ruled that the appealed decision is affirmed with the modification of deleting the attorneys
fees (P50,000)
a. There was no proper legal basis to suspend the proceedings. There can be no prejudicial
question since both are civil cases. That the elements of litis pendentia and forum
shopping were not met.
b. MRs were denied
c. STa .Lucia and Cainta filed separate petitions for Certiorar ibut in this case STa. lucia is
the subject of the decision.
ISSUES

1. Whether RTC and the CA were correct in deciding Pasigs complaint without waiting for the
resolution of the boundary dispute case between Pasig and Cainta.
2. Whether Sta. Lucia should continue paying its real property taxes to Cainta (or should it now
pay its taxes to Pasig)

1. the resolution of the boundary dispute would determine which local government unit is entitled to
collect realty taxes from Sta. Lucia

Sec. 5 and Sec. 57 of PD 464 or the Real Property Tax Code and Sectons 201 and 233 of the RA
7160 or the 1991 Local Government Code (see annex) tells us 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

Mariano Jr. v. COMELEC: 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.

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.

While the SC agrees that a certificate of title is conclusive as to its ownership and location, this
does not preclude the filing of an action for the very purpose of attacking the statements therein

While certificates are indefeasible, unassailable and binding against the whole world, they do not
create or vest title. They merely confirm or record title already existing and vested and cannot be
used to protect a usurper from the true owner, nor can they be used as a shield for the commission
of fraud; neither do they permit one to enrich himself at the expense of other.

Although the TCTs state Pasig as the locality of the subject properties, both Sta. lucia and Cainta
aver that the metes and bounds as described in the TCTs are actually within Caintas boundaries.

The Antipolo RTC would be able to best determine once and for all the precise metes and bounds
of both Pasigs and Caintas respective territorial jurisdiction. This would then ascertain the
extent and reach of each local governments authority, a prerequisite in the proper exercise of
their powers including the power of taxation.

Although the general rule is that there is no prejudicial question when both cases are civil, the
court held in Vidad v. RTC of Negros oriental Br. 42 that in interest of good order, the SC can
very well suspend the action on one case pending the final outcome of another closely interrelated
or linked to the first.

In any case, under the Rules of Court, a trial court may control its own proceedings according to
its sound discretion (Rule 135 Sec. 5(g))

The power to stay proceedings is incidental to the power inherent in every court to control the
disposition of the cases on its dockets, considering its time and effort, that of counsel and the
litigants. But if proceedings must be stayed, it must be done in order to avoid multiplicity of suits
and prevent vexatious litigations, conflicting judgments, confusion between litigants and courts.
It bears stressing that whether or not the RTC would suspend the proceedings in the SECOND
CASE is submitted to its sound discretion.

Pasig RTC should have held in abeyance the proceedings in the civil case before it in view of the
fact that the outcome of the boundary dispute case before the Antipolo RTC will undeniable
affect both Pasigs and Caintas rights. Had the territorial boundaries of the contending local
government units herein been delineated with accuracy, then there would be no controversy at all.

2. in the meantime, 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
Petition GRANTED. CA resolution SET ASIDE. Pasig and Cainta are both directed to await the
judgment before the ANtipolo RTC to determine which LGU is entitled to collect the real property taxes.
Justin Benedict A. Moreto

ANNEX
Presidential Decree No. 464 or the Real Property Tax Code,
Sec. 5. Appraisal of Real Property. All real property, whether taxable or exempt, shall be appraised at
the current and fair market value prevailing in the locality where the property is situated.
Sec. 57. Collection of tax to be the responsibility of treasurers. The collection of the real property tax
and all penalties accruing thereto, and the enforcement of the remedies provided for in this Code or any
applicable laws, shall be the responsibility of the treasurer of the province, city or municipality where the
property is situated.
Republic Act No. 7160, also known as the 1991 the Local Government Code
Section 201. Appraisal of Real Property. All real property, whether taxable or exempt, shall be
appraised at the current and fair market value prevailing in the locality where the property is situated.
The Department of Finance shall promulgate the necessary rules and regulations for the classification,
appraisal, and assessment of real property pursuant to the provisions of this Code.
Section 233. Rates of Levy. A province or city or a municipality within the Metropolitan Manila Area
shall fix a uniform rate of basic real property tax applicable to their respective localities as follows: x x x.

Rule 135
SEC. 5. Inherent powers of courts. Every court shall have power:
xxxx
(g) To amend and control its process and orders so as to make them comformable to law and justice.