Talento vs Escalada Jr

7/21/2019 Talento vs Escalada Jr.

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THIRD DIVISION

EMERLINDA S. TALENTO, G.R. No. 180884in her capacity as the ProvincialTreasurer of the Province of Bataan,

Petitioner,

- versus -

HON. REMIGIO M. ESCALADA, JR.,Presiding Judge of the Regional TrialCourt of Bataan, Branch 3, and Promulgated:PETRON CORPORATION,

Respondents. June 27, 2008

x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J .:

The instant petition for certiorari under Rule 65 of the Rules of Court

assails the November 5, 2007 Order of the Regional Trial Court of Bataan,

Branch 3, in Civil Case No. 8801, granting the petition for the issuance of a

writ of preliminary injunction filed by private respondent Petron Corporation

(Petron) thereby enjoining petitioner Emerlinda S. Talento, Provincial

Treasurer of Bataan, and her representatives from proceeding with the

public auction of Petron’s machineries and pieces of equipment during thependency of the latter’s appeal from the revised assessment of its

properties.



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The facts of the case are as follows:

On June 18, 2007, Petron received from the Provincial Assessor’s

Office of Bataan a notice of revised assessment over its machineries and

pieces of equipment in Lamao, Limay, Bataan. Petron was given a period

of 60 days within which to file an appeal with the Local Board of

Assessment Appeals (LBAA). Based on said revised assessment,

petitioner Provincial Treasurer of Bataan issued a notice informing Petron

that as of June 30, 2007, its total liability is P1,731,025,403.06,

representing deficiency real property tax due from 1994 up to the first and

second quarters of 2007.

On August 17, 2007, Petron filed a petition with the LBAA (docketed

as LBAA Case No. 2007-01) contesting the revised assessment on the

grounds that the subject assessment pertained to properties that have

been previously declared; and that the assessment covered periods of

more than 10 years which is not allowed under the Local Government Code

(LGC). According to Petron, the possible valid assessment pursuant to

Section 222 of the LGC could only be for the years 1997 to 2006. Petron

further contended that the fair market value or replacement cost used by

petitioner included items which should be properly excluded; that prompt

payment of discounts were not considered in determining the fair market

value; and that the subject assessment should take effect a year after or on

January 1, 2008. In the same petition, Petron sought the approval of a

surety bond in the amount of P1,286,057,899.54.

On August 22, 2007, Petron received from petitioner a final notice of

delinquent real property tax with a warning that the subject properties



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would be levied and auctioned should Petron fail to settle the revised

assessment due.

Consequently, Petron sent a letter] to petitioner stating that in view of

the pendency of its appeal with the LBAA, any action by the Treasurer’s

Office on the subject properties would be premature. However, petitioner

replied that only Petron’s payment under protest shall bar the collection of

the realty taxes due,] pursuant to Sections 231 and 252 of the LGC.

With the issuance of a Warrant of Levy against its machineries and

pieces of equipment, Petron filed on September 24, 2007, an urgent motionto lift the final notice of delinquent real property tax and warrant of levy with

the LBAA. It argued that the issuance of the notice and warrant is

premature because an appeal has been filed with the LBAA, where it

posted a surety bond in the amount of P1,286,057,899.54.

On October 3, 2007, Petron received a notice of sale of its properties

scheduled on October 17, 2007. Consequently, on October 8, 2007,

Petron withdrew its motion to lift the final notice of delinquent real property

tax and warrant of levy with the LBAA. On even date, Petron filed with

the Regional Trial Court of Bataan the instant case (docketed as Civil

Case No. 8801) for prohibition with prayer for the issuance of a

temporary restraining order (TRO) and preliminary injunction.

On October 15, 2007, the trial court issued a TRO for 20 days

enjoining petitioner from proceeding with the public auction of Petron’s

properties. Petitioner thereafter filed an urgent motion for the immediate



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dissolution of the TRO, followed by a motion to dismiss Petron’s petition for

prohibition.

On November 5, 2007, the trial court issued the assailed Order

granting Petron’s petition for issuance of writ of preliminary injunction,

subject to Petron’s posting of a P444,967,503.52 bond in addition to its

previously posted surety bond of P1,286,057,899.54, to complete the total

amount equivalent to the revised assessment of P1,731,025,403.06. The

trial court held that in scheduling the sale of the properties despite the

pendency of Petron’s appeal and posting of the surety bond with the LBAA,

petitioner deprived Petron of the right to appeal. The dispositive portion

thereof, reads:

WHEREFORE, the writ of preliminary injunction prayed for by plaintiff is hereby

GRANTED and ISSUED, enjoining defendant Treasurer, her agents, representatives, or

anybody acting in her behalf from proceeding with the scheduled public auction of plaintiff’s real

properties, or any disposition thereof, pending the determination of the merits of the main

action, to be effective upon posting by plaintiff to the Court of an injunction bond in the amountof Four Hundred Forty Four Million Nine Hundred Sixty Seven Thousand Five Hundred Three

and 52/100 Pesos (P444,967,503.52) and the approval thereof by the Court.

Defendant’s Urgent Motion for the Immediate Dissolution of the

Temporary Restraining Order dated October 23, 2007 is hereby DENIED.

SO ORDERED.

From the said Order of the trial court, petitioner went directly to this

Court via the instant petition for certiorari under Rule 65 of the Rules of

Court.



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The question posed in this petition, i.e., whether the collection of

taxes may be suspended by reason of the filing of an appeal and posting of

a surety bond, is undoubtedly a pure question of law. Section 2(c) of Rule

41 of the Rules of Court provides:

SEC. 2. Modes of Appeal. –

(c) Appeal by certiorari. – In all cases when only questions of law are

raised or involved, the appeal shall be to the Supreme Court by petition for

review on certiorari under Rule 45. (Emphasis supplied)

Thus, petitioner resorted to the erroneous remedy when she

filed a petition for certiorari under Rule 65, when the proper mode

should have been a petition for review on certiorari under Rule 45.

Moreover, under Section 2, Rule 45 of the same Rules, the period to

file a petition for review is 15 days from notice of the order appealed

from. In the instant case, petitioner received the questioned order of

the trial court on November 6, 2007, hence, she had only up to

November 21, 2007 to file the petition. However, the same was filed

only on January 4, 2008, or 43 days late. Consequently, petitioner’s

failure to file an appeal within the reglementary period rendered the

order of the trial court final and executory.

The perfection of an appeal in the manner and within the periodprescribed by law is mandatory. Failure to conform to the rules regarding

appeal will render the judgment final and executory and beyond the power

of the Court’s review. Jurisprudence mandates that when a decision

becomes final and executory, it becomes valid and binding upon the parties



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and their successors in interest. Such decision or order can no longer be

disturbed or reopened no matter how erroneous it may have been.

Petitioner’s resort to a petition under Rule 65 is obviously a play to

make up for the loss of the right to file an appeal via a petition under Rule

45. However, a special civil action under Rule 65 can not cure petitioner’s

failure to timely file a petition for review on certiorari under Rule 45 of the

Rules of Court. Rule 65 is an independent action that cannot be availed of

as a substitute for the lost remedy of an ordinary appeal, including that

under Rule 45, especially if such loss or lapse was occasioned by one’s

own neglect or error in the choice of remedies.

Moreover, even if we assume that a petition under Rule 65 is the

proper remedy, the petition is still dismissible.

We note that no motion for reconsideration of the November 5, 2007

order of the trial court was filed prior to the filing of the instant petition. The

settled rule is that a motion for reconsideration is a sine qua non condition

for the filing of a petition for certiorari . The purpose is to grant the public

respondent an opportunity to correct any actual or perceived error

attributed to it by the re-examination of the legal and factual circumstances

of the case. Petitioner’s failure to file a motion for reconsideration deprived

the trial court of the opportunity to rectify an error unwittingly committed or

to vindicate itself of an act unfairly imputed. Besides, a motion forreconsideration under the present circumstances is the plain, speedy and

adequate remedy to the adverse judgment of the trial court.



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Petitioner also blatantly disregarded the rule on hierarchy of courts.

Although the Supreme Court, Regional Trial Courts, and the Court of

Appeals have concurrent jurisdiction to issue writs of certiorari, prohibition,

mandamus, quo warranto, habeas corpus and injunction, such concurrence

does not give the petitioner unrestricted freedom of choice of court forum.

Recourse should have been made first with the Court of Appeals and not

directly to this Court.

True, litigation is not a game of technicalities. It is equally true,

however, that every case must be presented in accordance with the

prescribed procedure to ensure an orderly and speedy administration of

justice. The failure therefore of petitioner to comply with the settled

procedural rules justifies the dismissal of the present petition.

Finally, we find that the trial court correctly granted respondent’s

petition for issuance of a writ of preliminary injunction. Section 3, Rule 58,

of the Rules of Court, provides:

SEC. 3. Grounds for issuance of preliminary injunction. – A preliminary injunction may

be granted by the court when it is established:

(a) That the applicant is entitled to the relief demanded, and the

whole or part of such relief consists in restraining the commission or continuance

of the acts complained of, or in the performance of an act or acts, either for a

limited period or perpetually;

(b) That the commission, continuance or non-performance of the actor acts complained of during the litigation would probably work injustice to the

applicant; or

(c) That a party, court, or agency or a person is doing, threatening, or

attempting to do, or is procuring or suffering to be done, some act or acts

probably in violation of the rights of the applicant respecting the subject of the

action or proceeding, and tending to render the judgment ineffectual.



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The requisites for the issuance of a writ of preliminary injunction are:

(1) the existence of a clear and unmistakable right that must be protected;

and (2) an urgent and paramount necessity for the writ to prevent serious

damage.

The urgency and paramount necessity for the issuance of a writ of

injunction becomes relevant in the instant case considering that what is

being enjoined is the sale by public auction of the properties of Petron

amounting to at least P1.7 billion and which properties are vital to its

business operations. If at all, the repercussions and far-reaching

implications of the sale of these properties on the operations of Petron

merit the issuance of a writ of preliminary injunction in its favor.

We are not unaware of the doctrine that taxes are the lifeblood

of the government, without which it can not properly perform its

functions; and that appeal shall not suspend the collection of realty

taxes. However, there is an exception to the foregoing rule, i.e.,

where the taxpayer has shown a clear and unmistakable right to

refuse or to hold in abeyance the payment of taxes. In the instant

case, we note that respondent contested the revised assessment on

the following grounds: that the subject assessment pertained to

properties that have been previously declared; that the assessment

covered periods of more than 10 years which is not allowed under the

LGC; that the fair market value or replacement cost used by petitioner

included items which should be properly excluded; that prompt

payment of discounts were not considered in determining the fair

market value; and that the subject assessment should take effect a

year after or on January 1, 2008. To our mind, the resolution of these



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issues would have a direct bearing on the assessment made by

petitioner. Hence, it is necessary that the issues must first be passed

upon before the properties of respondent is sold in public auction.

In addition to the fact that the issues raised by the respondent would

have a direct impact on the validity of the assessment made by the

petitioner, we also note that respondent has posted a surety bond

equivalent to the amount of the assessment due. The Rules of Procedure

of the LBAA, particularly Section 7, Rule V thereof, provides:

Section 7. Effect of Appeal on Collection of Taxes. – An appeal shall not suspend the

collection of the corresponding realty taxes on the real property subject of the appeal as

assessed by the Provincial, City or Municipal Assessor, without prejudice to the subsequent

adjustment depending upon the outcome of the appeal. An appeal may be entertained but the

hearing thereof shall be deferred until the corresponding taxes due on the real property subject

of the appeal shall have been paid under protest or the petitioner shall have given a surety

bond, subject to the following conditions:

(1) the amount of the bond must not be less than the total realty taxes

and penalties due as assessed by the assessor nor more than double said

amount;

(2) the bond must be accompanied by a certification from the

Insurance Commissioner (a) that the surety is duly authorized to issue such

bond; (a) that the surety bond is approved by and registered with said

Commission; and (c) that the amount covered by the surety bond is within the

writing capacity of the surety company; and

(3) the amount of the bond in excess of the surety company’s writing

capacity, if any, must be covered by Reinsurance Binder, in which case, a

certification to this effect must likewise accompany the surety bond.



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Corollarily, Section 11 of Republic Act No. 9282, which amended

Republic Act No. 1125 (The Law Creating the Court of Tax Appeals)

provides:

Section 11. Who may Appeal; Mode of Appeal; Effect of Appeal; -

x x x x

No appeal taken to the Court of Appeals from the Collector of Internal

Revenue x x x shall suspend the payment, levy, distraint, and/or sale of any

property for the satisfaction of his tax liability as provided by existing law.

Provided, however, That when in the opinion of the Court the collection bythe aforementioned government agencies may jeopardize the interest of the

Government and/or the taxpayer the Court at any stage of the processing may

suspend the collection and require the taxpayer either to deposit the amount

claimed or to file a surety bond for not more than double the amount with the

Court.

WHEREFORE, in view of all the foregoing, the instant petition is

DISMISSED.



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EXECUTIVE SUMMARY1

“Emerlinda S. Talento, in her capacity as the Provincial Treasurer of the Provinceof Bataan vs. Hon. Remigio M. Escalada, Jr., Presiding Judge of the Regional TrialCourt of Bataan, Branch 3 and Petron Corporation”, Supreme Court, Third

Division, G. R. No. 180884.

Introduction

1. In the Decision dated 27 June 2008, as reiterated in the Resolution dated 8September 2008 dismissing the 1st Motion for Reconsideration (“MR”) in the above-captioned, the SC set forth the ruling that taxpayers can defer payments of real estatetax by simply filing 1) an appeal with the Local Board of Assessment Appeals and 2) aPetition for Prohibition with the Regional Trial Court and by posting a surety bond.

2. This ruling has extremely serious implications, not only to the LGUs of Bataan, but all

over the country. It practically amended, through judicial legislation, the expressedprovisions of the Local Government Code (“LGC”) of 1991 that a taxpayer cannot deferand must first pay to the LGU the real estate tax due before any appeal can beentertained.

3. Thus, LGUs will no longer receive cash payments from real estate tax collections asthey fall due but merely surety bonds, which have no immediate use to LGUs. One-halfof the proceeds of RPT accrues to the general funds of provinces, cities, municipalitiesand barangays, while the other half accrues to the Special Education Fund of their LocalSchool Boards. With such erroneous ruling, LGUs and ultimately the people are boundto suffer, particularly the children from poor families who go to public schools.

Summary of the Relevant Facts:

(1) On 18 June 2007, Petron received from the Provincial Assessor’s Office ofBataan a notice of revised assessment for deficiency real property tax for Petron’smachineries and equipment in Lamao, Limay, Bataan in the amount ofPhP1,731,025,403.06 due from 1994 up to the 2

nd quarter of 2007.

(2) On 17 August 2007, Petron filed a petition with the Local Board of Assessment Appeals (LBAA) contesting the revised assessment.

(3)

On 22 August 2007, Petron received from Petitioner (the Provincial Treasurer ofBataan) a final notice of delinquent real property tax with warning that the subjectproperties would be levied and auctioned should Petron fail to settle the revisedassessment.

(4) Petron wrote a letter to Petitioner stating that in view of the pendency of theappeal with the LBAA, any action on the subject properties would be premature.



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Petitioner replied that only payment by Petron under protest shall bar the collection ofthe taxes due, pursuant to Sections 231 and 252 of the Local Government Code.

(5) Subsequently a Warrant of Levy was issued against machinery and equipment ofPetron.

(6) Petron filed with the LBAA on 24 September 2007 an urgent motion to lift finalnotice of delinquent real property tax and Warrant of Levy.

(7) On 3 October 2007, Petron received a notice of sale of its properties scheduledon 17 October 2007.

(8) Petron subsequently merely withdrew its motion to lift final notice of delinquencyand Warrant of Levy with the LBAA on 8 October 2007. On the same date, Petron filedwith the Regional Trial Court of Bataan the present case (Civil Case No. 8801) againstPetitioner for prohibition with prayer for issuance of temporary restraining order and

preliminary injunction. (NOTE: To avoid questions of forum shopping, what Petronshould have done was to first withdraw its appeal entirely from the LBAA and then filethe Petition for Prohibition with the RTC.)

(9) Civil Case No. 8801 was filed by Petron with the RTC while its petition with theLBAA was still pending. Subsequently, the LBAA dismissed Petron’s petition on theground of forum shopping.

(10) On 15 October 2007, the RTC issued a TRO for 20 days enjoining Petitioner fromproceeding with the public auction of Petron’s properties.

(11) Petitioner filed an urgent motion for the immediate dissolution of the TRO as wellas motion to dismiss Petron’s petition for prohibition.

(12) On 5 November 2007, the RTC issued the Order granting Petron’s petition for theissuance of the writ of preliminary injunction subject to Petron’s posting of a PhP444,967,503.52 bond in addition to its previously posted surety bond ofPhP1,286,057,899.54.

(13) In view of the urgent nature of the case and the patently illegal order of the RTC,which was Order was tainted with grave abuse of discretion, Petitioner no longer filed aMotion for Reconsideration of the Order dated 5 November 2007.

(14) On 4 January 2008, Petitioner filed the present Petition for Certiorari, Prohibitionand Mandamus (G.R. No. 180884) with the Supreme Court, as an exception to the ruleon hierarchy of courts, to annul and set aside the Order of the RTC dated 5 November2007 to permanently enjoin the RTC from further proceeding with Civil Case No. 8801.

(15) All of the foregoing actions of the Petitioner were consistent with law, particularlywith the Local Government Code, contrary to Petron’s allegations.



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Issue raised in the Petition for Certiorari, Prohibition and Mandamus:

Whether or not the RTC acted without or in excess of its jurisdiction and with graveabuse of discretion in causing the issuance of the writ of preliminary injunction thateffectively renders nugatory the express provisions of Sections 252 and 231 of the

Local Government Code.

Summary of The Supreme Court’s Decision dated 27 June 2008:

1. In the Decision of the Supreme Court dated 27 June 2008, penned by JusticeConsuelo Ynares-Santiago, regarding the above-stated Petition for Certiorari(G.R. No. 180884), it was held that the question posed in the Petition, i.e.,whether the collection of taxes may be suspended by reason of filing of anappeal and posting of a surety bond, is a question of law.

2. The Decision stated that Petitioner resorted to an erroneous remedy when shefiled a Petition for Certiorari under Rule 65, when the proper mode should havebeen a Petition for Review under Rule 45.

3. Under Rule 45, the period to file a Petition for Review is 15 days from receipt ofthe Order appealed from. The Decision stated that the present Petition was filedbeyond the said 15 day period as it was filed 43 days late.

4. The Decision further stated that, even on the assumption that a petition underRule 65 is the proper remedy, the present petition is still dismissable. It wasnoted that Petitioner did not file a Motion for Reconsideration with the RTC priorto the filing of the present Petition with the Supreme Court.

5. The Decision likewise stated that Petitioner disregarded the hierarchy of courts,and that the present Petition should have been filed with the Court of Appealsinstead of directly filing the same to the Supreme Court.

6. The Decision went on to state that the RTC correctly granted Petron’s petition forissuance of a writ of preliminary injunction based on Section 3, Rule 58 of theRules of Court.

7. It was stated that there was urgency and paramount necessity for the issuance ofthe writ of injunction considering that what is being enjoined is the sale by publicauction of 1.7 Billion Pesos worth of Petron’s properties which are vital to

Petron’s operations.

8. The Decision also stated in essence that Petron had a clear and unmistakableright to refuse or to withhold in abeyance the payment of the taxes. Citing thegrounds used by Petron in contesting the revised assessment, the Decisionstated that the resolution of the said issues would have a direct bearing on theassessment made by Petitioner, and that it is necessary that the issues must befirst passed upon before the properties of respondent is sold at public auction.



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Courses of Action Taken by Petitioner in light of the said Decision Supreme Court dated27 June 2008:

1. Petitioner filed with the Supreme Court a Motion for Reconsideration of theDecision dated 27 June 2008. This Motion for Reconsideration was denied by the

Supreme Court in a minute resolution dated 8 September 2008.

2. Petitioner filed a Motion to Refer the Case to the Court en Banc. This is due tothe fact that the Decision dated 27 June 2008 has in effect abandonedestablished jurisprudence that Rule 65 is the remedy for interlocutory orders suchas the issuance of a writ of preliminary injunction, and the ruling in Manila ElectricCompany vs. Barlis (G.R. No. 114231, 18 May 2001) that the trial court has no

jurisdiction to entertain a Petition for Prohibition absent petitioner’s payment,under protest, of the tax assessed. This motion was likewise denied in the saidresolution dated 8 September 2008.

Comments on the Decision of the Supreme Court dated 27 June 2008.

Re: On the finding in the Decision dated 27 June 2008 that Petitioner resorted to anerroneous remedy when she filed a Petition for Certiorari under Rule 65, when theproper mode should have been a Petition for Review under Rule 45.

COMMENT:

1. The Order of the RTC granting the writ of preliminary injunction prayed for byPetron was an interlocutory order. Hence, Petitioner may validly file a Petition forCertiorari under Rule 65 to question the legality of such order of the RTC.

2. In the 7 August 2007 Supreme Court Decision entitled “United Overseas Bank(formerly Westmont Bank) vs. Hon. Judge Reynaldo Rios, Presiding Judgeof the Regional Trial Court of Manila, Branch 33, and Rosemoor Mining andDevelopment Corporation”, G.R. No. 171532, it was confirmed that a petitionfor certiorari under Rule 65, and not Rule 45, is the proper remedy forinterlocutory orders.

3. In the Supreme Court Decision dated 5 August 2003 which was penned byJustice Consuelo Ynares-Santiago herself, entitled “Land Bank of thePhilippines vs. Severino Listana, Jr.”, G. R. 152611, the Supreme Courtspecifically provided that “an order granting a writ of preliminary injunction is

an interlocutory order ”. Being an interlocutory order, a special civil action forcertiorari under Rule 65 is a proper remedy.

4. In light of the established jurisprudence on the matter, it is extremely surprisingwhy the subject Decision dated 27 June 2008 ruled that Petitioner availed of thewrong remedy under Rule 65. The said Decision runs counter to and in effectabandons prevailing jurisprudence that interlocutory orders, such as an order



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granting a writ of preliminary injunction, may be questioned in a higher court byway of Certiorari under Rule 65.

Re: On the finding that the Petition is fatally defective due to Petitioner’s failure to file aMotion for Reconsideration of the RTC’s Order dated 5 November 2007.

COMMENT:

1. While it may be true that the general rule is that a motion for reconsideration is acondition sine qua non for the filing of a petition for certiorari, such rulenevertheless is subject to recognized exceptions. The Petition for Certiorari,Prohibition and Mandamus filed by Petitioner specifically alleged that it fallswithin such recognized exceptions to the general rule. As such, it was pointed outin the said Petition that resort to the Supreme Court without filing of a motion forreconsideration was dictated by considerations of urgency, and that the issuesraised are purely legal in nature.

2. In the case of Indiana Aerospace University vs. Commission on HigherEducation, G.R. No. 139371, cited in Petitioner’s Motion for Reconsideration,the recognized exceptions to the general rule are: (a) the issues raised are purelylegal in nature; (b) public interest is involved; (c) extreme urgency is obvious; (d)special circumstances that warrant immediate or more direct action. The caseinvolves the collection of taxes due the local government unit in the amount of1.7 Billion Pesos and the writ of preliminary injunction has deprived the localgovernment unit the right to immediately collect such real property taxes to thedetriment of its constituents. Not only was there urgency involved, but publicinterest was likewise a principal consideration.

3. In view of the foregoing reasons, the Decision should have allowed the Petition tofall under the exception to the general rule on the requirement of a motion forreconsideration.

Re: On the finding that Petitioner disregarded the rule on hierarchy of courts.

COMMENT:

1. The Decision dated 27 June 2008 likewise faulted Petitioner for filing the Petitiondirectly to the Supreme Court instead of having the same filed with the Court of

Appeals. Again, such rule on hierarchy of courts is subject to certain exceptions.

The present Petition is one such exception.

2. There are compelling reasons to file the Petition directly to the Supreme Court.The case has far reaching implications on the right of local government units tocollect real property taxes that it can use for public services and to finance thecost of public education. The resolution of the issue of whether or not a trial courtcan prohibit a local government unit to collect real property taxes, despiteprovisions in the Local Government Code favoring such power of the local



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government units, will affect not only the Province of Bataan, but all localgovernment units in the country as well. It will have significant importance on thefinances and economic viability of all local government units.

Re: On the finding that the RTC correctly granted Petron’s petition for issuance of a writ

of preliminary injunction.

COMMENT:

1. The Decision declared that there was urgent and paramount necessity for theissuance of the writ of injunction considering that what is being enjoined is thesale by public auction of the properties of Petron amounting to 1.7 Billion Pesos,which properties are vital to Petron’s operation.

2. However, there is no urgent and paramount necessity on the part of Petron. Evenassuming that the properties are sold by the Province of Bataan by publicauction, under Section 261 of the Local Government Code, Petron has the rightto redeem the properties within one (1) year from the date of the sale. Duringsuch one (1) year period, Petron shall have possession of the subject propertiesand Petron shall be entitled to the income and other fruits thereof. In light of this,Petron’s operations will not be immediately affected. As such, there is no urgentand paramount necessity for the issuance of the writ of preliminary injunction.

3. The Decision in essence also declared that Petron has a clear and unmistakableright to refuse or hold in abeyance the payment of the taxes. In support of this,the Decision cited the grounds relied upon by Petron in contesting the revisedassessment. The Decision then stated that the resolution of the grounds raisedby Petron would have a direct bearing on the assessment made by Petitioner

and that it is necessary that the issues must first be passed upon before theproperties of respondent is sold at public auction.

4. It should be noted however that the RTC, in its Order dated 5 November 2007, in justifying the issuance of the writ of preliminary injunction, used as basis theprovisions of Section 267 of the Local Government Code. Section 267 providesthat:

“SEC. 267. Action Assailing Validity of TaxSale. - No court shall entertain any actionassailing the validity of any sale at public

auction of real property or rights thereinunder this Title unt i l the taxpayer shal l

have deposi ted with the court the

amoun t for which the real property was

sold , together with interest of two percent(2%) per month from the date of sale to thetime of the institution of the action. Theamount so deposited shall be paid to the



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purchaser at the auction sale if the deed isdeclared invalid but it shall be returned tothe depositor if the action fails. Neither shallany court declare a sale at public auctioninvalid by reason of irregularities or

informalities in the proceedings unless thesubstantive rights of the delinquent owner ofthe real property or the person having legalinterest therein have been impaired.

5.6. The above-quoted Section 267 specifically applies to a case where the property

has already been sold at public auction due to delinquency for real property tax.It does not apply in the present case where the property has not yet been sold. Itwas patently erroneous for the RTC to use Section 267 as legal basis forgranting the writ of preliminary injunction in favor of Petron. Such act of the RTC

amounts to excess of jurisdiction as the RTC overstepped its lawful authority.There was likewise grave abuse of discretion as such patently erroneous use bythe RTC of Section 267 as basis is capricious, whimsical, arbitrary or despotic inmanner, and is in effect equivalent to lack of jurisdiction.

7. The patently erroneous reliance by the RTC on Section 267 of the LocalGovernment Code is one indication that there was no clear and unmistakableright in favor of Petron. Despite this, the Decision dated 27 June 2008 stillvalidated the writ of preliminary injunction granted by the RTC to Petron.

8. On the other hand, Sections 252 and 231 of the Local Government Code gives

the clear and unmistakable right to Petitioner to collect the real property taxesdue. Under Section 252, no protest shall be entertained unless the taxpayer firstpays the tax. Under Section 231, appeal on assessments of real property shall inno case suspend the collection of the corresponding realty taxes on property.

9. In Manila Electric Company vs. Barlis, G.R. No. 114231, 18 May 2001, theSupreme Court, interpreting a provision in the previous Real Property Tax Codewhich similar to Section 252 of the Local Govt. Code, held that the “trial court hasno jurisdiction to entertain a Petition for Prohibition absent petitioner’s payment,under protest of the tax assessed as required by Section 64 of the RPTC. It isour view that this ruling is still valid despite the passage of the Local GovernmentCode as the reason behind the law remains the same. In view of this ruling, theRTC had no authority to grant the writ of preliminary injunction in favor of Petron.This is another basis for stating that Petron had no clear and unmistakable right.

10. Even assuming that there is doubt in the interpretation of Sections 252 and 231of the Local Government Code, such doubt should have been resolved in favor ofthe LGU. Section 5 (a), Chapter 1, Title 1 of the Local Government Codeprovides that in the interpretation of the provisions of the same, any provision ona power of a local government unit shall be liberally interpreted in its favor, and in



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case of doubt, any question thereon shall be resolved in favor of devolution ofpowers and of the local government unit. If further provides that any fair andreasonable doubt as to the existence of the power shall be interpreted in favor ofthe local government unit concerned. This was no longer taken into considerationin the Decision.

11. The amount of deficiency real estate tax due Petron was in fact arrived atfollowing data supplied by Petron itself. Such data consisting of annualacquisition costs of machineries can be seen from the printed copies of theelectronic email of one Arvin Frank C. Daquiog of the Government Reports andCompliance Controllers Department of Petron and the attached computation/datasend on 20 March 2007 to the Bataan Provincial Assessor. (Annexes “A -MR” and“B-MR” of Petitioner’s Motion for Reconsideration) The said data from Petronitself show that the Sworn Statement of the True Value of the Real Propertiespreviously submitted by Petron was grossly understated. In light of this, it is anerror to rule that Petron had a clear and unmistakable right to hold in abeyancethe payment of real property tax.

Re: On the issue of forum shopping committed by Petron, which was not discussed andwas not ruled upon in the Decision of the Supreme Court.

COMMENT:

1. The Petition of Petron with the RTC (Case No. 8801) was filed while Petron’sPetition with the LBAA is pending. The case with the RTC and the LBAA filed byPetron involved an identity of parties, identity of rights asserted and reliefsprayed for, and a decision on one case will amount to res adjudicata. Petron wastherefore guilty of forum shopping.

2. The issue of forum shopping was squarely raised by Petitioner in the Petition forCertiorari, Prohibition and Mandamus. On account of such forum shopping, theRTC should have dismissed the complaint of Petron entirely. Instead, the RTCeven issued the subject writ of preliminary injuction.

3. The LBAA has in fact dismissed the Petition of Petron on account of such forumshopping committed by Petron.

4. However, the Decision dated 27 June 2008 never mentioned anything about thisissue of forum shopping.

5. Per the ruling of the Supreme Court in City Government of Quezon City vs.Bayan Telecommunications, Inc., G.R. No. 162015, 6 March 2006, the properprocedure is to first withdraw the appeal from the LBAA and then file the Petitionfor Prohibition with the RTC. However, Petron did not comply with this andinstead maintained the LBAA case while it filed the RTC case in violation of therule against forum shopping and multiplicity of suits based on a single cause ofaction.



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TALENTO vs. ESCALDA JR.,

G.R. No. 180884, June 27, 2008

Facts:

This is a petition for certiorari under Rule 65 of the Rules of Court assails theNovember 5, 2007 Order of the RTC of Bataan granting the petition for the issuance ofa writ of preliminary injunction filed by Petron enjoining petitioner Emerlinda S. Talento,Provincial Treasurer of Bataan, from proceeding with the public auction of Petron’smachineries and pieces of equipment during the pendency of the latter’s appeal fromthe revised assessment of its properties.

Petron received from the Provincial Assessor’s Office of Bataan a notice ofrevised assessment over its machineries and pieces of equipment giving them a periodof 60 days within which to file an appeal with the Local Board of Assessment Appeals(LBAA). Based on said revised assessment, Petron has as of June 30, 2007, its total

liability is P1,731,025,403.06, representing deficiency real property tax due from 1994up to the first and second quarters of 2007.

Petron contested with the LBAA the revised assessment on the grounds:

a. That the subject assessment pertained to properties that have beenpreviously declared;

b. That the assessment covered periods of more than 10 years which is notallowed under the Local Government Code (LGC).

c. That the fair market value or replacement cost used by petitioner includeditems which should be properly excluded; that prompt payment of

discounts were not considered in determining the fair market value;d. and that the subject assessment should take effect a year after or on

January 1, 2008.

Petitioner issued a Warrant of Levy against its machineries and pieces ofequipment.

Petron argued that view of the pendency of its appeal with the LBAA, any actionby the petitioner would be premature.

Petitioner replied that only Petron’s payment under protest shall bar the collection

of the realty taxes due, pursuant to Sections 231 and 252 of the LGC.

Petron filed with the RTC of Bataan for prohibition with prayer for theissuance of a temporary restraining order (TRO) and preliminary injunction . theRTC issued a TRO enjoining petitioner from proceeding with the public auction ofPetron’s properties. The trial court held that in scheduling the sale of the propertiesdespite the pendency of Petron’s appeal and posting of the surety bond with the LBAA,petitioner deprived Petron of the right to appeal.



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ISSUE:

WON the collection of taxes may be suspended by reason of the filing of anappeal and posting of a surety bond, is undoubtedly a pure question of law?

HELD:

YES.

We are not unaware of the doctrine that taxes are the lifeblood of thegovernment, without which it can not properly perform its functions; and that appealshall not suspend the collection of realty taxes. However, there is an exception to theforegoing rule, i.e., where the taxpayer has shown a clear and unmistakable right torefuse or to hold in abeyance the payment of taxes.

Section 11 of Republic Act No. 9282, which amended Republic Act No. 1125

(The Law Creating the Court of Tax Appeals) provides:

Section 11. Who may Appeal; Mode of Appeal; Effect of Appeal; -

x x x x

No appeal taken to the Court of Appeals from the Collector of

Internal Revenue x x x shall suspend the payment, levy, distraint, and/or

sale of any property for the satisfaction of his tax liability as provided by

existing law. Provided, however, That when in the opinion of the

Court the collection by the aforementioned government agencies may

jeopardize the interest of the Government and/or the taxpayer the Court at

any stage of the processing may suspend the collection and require the

taxpayer either to deposit the amount claimed or to file a surety bond for

not more than double the amount with the Court.

In the instant case, we note that respondent contested the revised assessmenton the following grounds: that the subject assessment pertained to properties that havebeen previously declared; that the assessment covered periods of more than 10 yearswhich is not allowed under the LGC; that the fair market value or replacement cost usedby petitioner included items which should be properly excluded; that prompt payment of

discounts were not considered in determining the fair market value; and that the subjectassessment should take effect a year after or on January 1, 2008. To our mind, theresolution of these issues would have a direct bearing on the assessment made bypetitioner. Hence, it is necessary that the issues must first be passed upon before theproperties of respondent is sold in public auction.

Documents

Talento vs Escalada Jr