G.R. No. L-33052 August 31, 1981
ANGEL R. QUIMPO, petitioner, vs. LEONCIO MENDOZA, as Treasurer for the City of Cagayan de Oro, and in his personal capacity, and JUDGE BERNARDO TEVES, as Presiding Judge of Branch IV of the Court of First Instance of Misamis Oriental, respondents.

FACTS

Petitioner Angel Quimpo owned a building in Cagayan de Oro City with an annual realty tax of P400.00 for 1969, payable in four equal installments under R.A. 5447. He paid the first three installments on time but failed to pay the last P100.00 installment due on December 31, 1969. On August 27, 1970, he tendered P124.00 to the City Treasurer, covering the P100.00 installment and a P24.00 penalty based on his own computation.
The City Treasurer, Leoncio Mendoza, refused the tender, demanding P196.00 instead. This amount was computed by imposing a 2% monthly penalty on the full annual tax of P400.00 for the delinquency period, not just on the unpaid last installment. The Treasurer based his computation on Section 42 of the City Charter (R.A. 521) and a Finance Secretary circular. Quimpo subsequently consigned the P124.00 with the court and filed a mandamus suit to compel acceptance of his payment and to claim damages.

ISSUE

The core issue is whether the penalty for late payment of a real property tax installment should be computed based on the full annual tax due or solely on the delinquent installment.

RULING

The Supreme Court modified the lower court’s decision, ruling in favor of Quimpo’s interpretation. The Court held that the penalty should be computed only on the delinquent installment, not on the entire annual tax. The legal logic rests on the clear language of the governing law, Section 4 of R.A. 5447, which states that the basic and additional real property taxes “shall be payable in four equal installments” on four specified quarterly dates. The Court distinguished this from the Padilla case, which involved a different city charter provision where the entire annual tax was due on a single date, with installment payments merely a privilege. Under R.A. 5447, each installment has its own specific due date, creating four distinct payment obligations. Therefore, delinquency attaches only to the specific installment not paid on its due date. Consequently, the penalty of 2% per month should be levied only on the unpaid P100.00 installment for the period of its delinquency (January to August 1970), amounting to P16.00, not on the full P400.00. The Court ordered Quimpo to pay the corrected total of P116.00. Regarding damages, the Court found no bad faith in the Treasurer’s erroneous interpretation, thus denying the claim.