G.R. No. 180200; November 25, 2013
Digital Telecommunications Philippines, Inc. vs. Jessie E. Cantos

FACTS

Petitioner Digital Telecommunications Philippines, Inc. (Digitel) was granted a legislative franchise. In 1998, the Municipality of Balayan, Batangas issued a cease and desist order against Digitel for non-payment of real property taxes. Digitel successfully challenged this order before the Regional Trial Court (RTC) in Civil Case No. 3514. The RTC declared the order null and void, ruling that under its franchise, Digitel’s real properties used in its telecommunications operations were exempt from real property tax, while properties not so used were taxable. This decision became final.
Subsequently, in 2002, respondent Jessie E. Cantos, as Provincial Treasurer of Batangas, issued Warrants of Levy against several Digitel properties across the province for alleged delinquency in real property taxes, scheduling them for public auction. Digitel demanded the lifting of the warrants, invoking the final RTC decision in Civil Case No. 3514. As the warrants were not lifted, Digitel filed a Petition for Indirect Contempt and Prohibition against respondent, arguing his actions defied the final judgment.

ISSUE

Whether the respondent Provincial Treasurer can be held liable for indirect contempt for issuing Warrants of Levy against Digitel’s properties despite a final judgment declaring such properties used in its franchise operations as tax-exempt.

RULING

The Supreme Court denied the petition and upheld the dismissal of the contempt charge. The Court explained that the final judgment in Civil Case No. 3514 was an action in personam, binding only the parties thereto—the Mayor and the Permit and License Division Chief of Balayan—and their successors-in-interest. The respondent Provincial Treasurer was not a party to that case, nor was he a successor-in-interest to the local officials sued therein. His office and duties are distinct; he acts under the Local Government Code to collect taxes for the province, not the municipality. Therefore, the principle of res judicata did not apply to him.
The Court further clarified that the proper remedy for Digitel was not a contempt proceeding but to avail of the administrative and judicial remedies under the Local Government Code, such as paying under protest and appealing the assessment. The respondent was merely performing his official duty to collect taxes, and any challenge to the tax assessment itself should follow the statutory procedures. Issuing the warrants, absent a direct injunction against him, did not constitute contumacious disregard of a court order.