G.R. No. 166838; June 15, 2011
Sta. Lucia Realty & Development, Inc., Petitioner, vs. City of Pasig, Respondent, Municipality of Cainta, Province of Rizal, Intervenor.

FACTS

Petitioner Sta. Lucia Realty & Development, Inc. (Sta. Lucia) is the registered owner of several parcels of land originally covered by Transfer Certificates of Title (TCT) Nos. 39112, 39110, and 38457, all indicating the lots were located in Barrio Tatlong Kawayan, Municipality (now City) of Pasig. The land under TCT No. 39112 was consolidated with another lot from Cainta and subsequently partitioned into three new titles (TCT Nos. 532250, 598424, and 599131), all bearing a Cainta address. TCT No. 39110 was divided into two lots (TCT Nos. 92869 and 92870). TCT No. 38457 remained undivided. On June 9, 1995, upon Pasig’s petition, the Land Registration Court ordered the amendment of TCT Nos. 532250, 598424, and 599131 to state the location as Barrio Tatlong Kawayan, Pasig City.
On January 31, 1994, the Municipality of Cainta filed a petition for settlement of its land boundary dispute with Pasig before the RTC of Antipolo City (Civil Case No. 94-3006), which remained pending. On November 28, 1995, Pasig filed a complaint (Civil Case No. 65420) against Sta. Lucia before the RTC of Pasig City for collection of real estate taxes, including penalties and interests, on the subject properties covered by the aforementioned TCTs and improvements thereon. Sta. Lucia, in its Answer, alleged it had been paying real estate taxes to Cainta based on Cainta’s assessments and tax declarations, and that such payments had been made since 1913. Cainta intervened, asserting it had been collecting the taxes and that the properties were within its territorial jurisdiction based on boundary monuments.
Sta. Lucia and Cainta moved to suspend the proceedings, arguing that the pending boundary dispute case in Antipolo RTC presented a prejudicial question. The Pasig RTC denied the motion. On August 10, 1998, the RTC ruled in favor of Pasig, ordering Sta. Lucia to pay unpaid real estate taxes and penalties, plus attorney’s fees and costs, and ordering Cainta to refund the taxes it collected from Sta. Lucia. Upon Pasig’s motion for reconsideration, the RTC modified its decision on October 9, 1998, to include taxes due on improvements. Sta. Lucia and Cainta appealed.
During the appeal, the RTC granted Pasig’s motion for execution pending appeal. Sta. Lucia challenged this via a petition for certiorari (CA-G.R. SP No. 52874). The Court of Appeals granted Sta. Lucia’s petition on September 22, 2000, setting aside the execution order and stating that the boundary dispute presented a prejudicial question that must be decided before Pasig could collect taxes. Pasig’s attempt to have this decision reversed was denied by the Supreme Court for being filed out of time.
Meanwhile, the main appeal (CA-G.R. CV No. 69603) proceeded. On June 30, 2004, the Court of Appeals affirmed with modification the RTC’s decision, deleting the award of attorney’s fees. It held there was no legal basis to suspend proceedings, as a prejudicial question requires one criminal and one civil case, and the elements of litis pendentia and forum shopping were absent. Motions for reconsideration were denied on January 27, 2005. Cainta’s separate petition (G.R. No. 166856) was denied by the Supreme Court on April 13, 2005. Sta. Lucia filed the present petition.

ISSUE

Whether the Court of Appeals erred in not suspending the proceedings in the tax collection case (Civil Case No. 65420) in view of the pending boundary dispute case (Civil Case No. 94-3006) between Pasig and Cainta, which would determine the situs of the subject properties for tax purposes.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals.
The Court held that the pendency of the boundary dispute case did not constitute a prejudicial question that warranted the suspension of the tax collection case. A prejudicial question, as defined under Rule 111 of the Revised Rules of Court, arises when the resolution of an issue in a civil case is logically antecedent to a issue in a criminal case, and the jurisdiction of the court trying the criminal case is dependent upon or would be affected by the civil case’s resolution. The concept applies only when one case is civil and the other is criminal. Since both the tax collection case and the boundary dispute case are civil in nature, the doctrine of prejudicial question is inapplicable.
Furthermore, the Court found that the elements of litis pendentia were not present, as there was no identity of parties, rights asserted, and reliefs prayed for between the two cases. The boundary dispute case involved a controversy between two local government units regarding territorial jurisdiction, while the tax collection case involved an action by Pasig against a taxpayer for collection of sums based on its claim of territorial authority. The reliefs sought and the issues involved were distinct.
The Court also ruled that the Transfer Certificates of Title (TCTs) are conclusive evidence with respect to the location of the properties. The TCTs indicated the properties were situated in Pasig. Sta. Lucia’s payment of taxes to Cainta, based on Cainta’s claim of jurisdiction, did not bind Pasig, nor did it constitute a valid payment of taxes due to Pasig. The obligation to pay real property taxes is fixed by law upon the owner, and the liability attaches to the property itself. The situs of taxation is determined by the location of the property as appearing in the TCTs. Until a final judicial determination in the boundary dispute case alters the territorial jurisdiction, the entries in the TCTs prevail. Therefore, the Court of Appeals correctly affirmed the RTC’s decision ordering Sta. Lucia to pay real estate taxes to Pasig.