(14) FRANCISCO I. CHAVEZ v JAIME B. ONGPIN, in his capacity as Minister of Realty Owners Association of the Philippines, Inc.

nes, Inc. (ROAP), which is the national

Finance and FIDELINA CRUZ, in her capacity as Acting Municipal Treasurer of association of owners-lessors, joined Chavez in his petition, but added that:
the Municipality of Las Pias, REALTY OWNERS ASSOCIATION OF THE - PD464 is unconstitutional insofar as it imposes an additional 1% tax on all
PHILIPPINES, INC. June 6, 1990 property owners to raise funds for education, as real property tax is admittedly
Principles of a Sound Tax System a local tax for local governments.
MEDIALDEA, J.:
A petition seeks to declare unconstitutional Executive Order No. 73 The OSG argued against the petition.
FACTS -------------------------------------
EO 73 was signed on Nov 25, 1986. The EO provided for the collection of real WON EO 73 is unconstitutional?
property taxes based on the 1984 real property values. Reasons given for the Held: No
Order were: a) EO 73 merely directs, in S1 thereof, that:
- the latest general revision of real property assessments has already been SECTION 1. Real property values as of December 31, 1984 as determined by the local
completed in 1984 and has thus rendered the 1978 revised values obsolete; assessors during the latest general revision of assessments shall take effect beginning
- the collection of real property taxes based on the 1984 real property values was January 1, 1987 for purposes of real property tax collection. (emphasis supplied)
deferred to take effect on January 1, 1988 instead of January 1, 1985, thus
depriving the local government units of an additional source of revenue; The general revision of assessments completed in 1984 is based on S21 of PD464
which provides, as follows:
On Mar 31, 1987, Memorandum Order No. 77 was issued suspending the SEC. 21. General Revision of Assessments. Beginning with the assessor shall make a
implementation of EO. 73 until June 30, 1987. calendar year 1978, the provincial or city general revision of real property assessments in
the province or city to take effect January 1, 1979, and once every five years thereafter:
Chavez, as taxpayer and an owner of three parcels of land, filed a petition to Provided; however, That if property values in a province or city, or in any municipality,
declare EO 73. Allegations: have greatly changed since the last general revision, the provincial or city assesor may,
- EO 73 accelerated the application of the general revision of assessments to with the approval of the Secretary of Finance or upon bis direction, undertake a general
January 1, 1987 thereby mandating an excessive increase in real property taxes revision of assessments in the province or city, or in any municipality before the fifth
by 100% to 400% on improvements, and up to 100% on land; year from the effectivity of the last general revision.
- any increase in the value of real property brought about by the revision of real
property values and assessments would necessarily lead to a proportionate Thus, the attack on EO 73 has no legal basis as the general revision of
increase in real property taxes; assessments is a continuing process mandated by S21 of PD464. If at all, it is
- the unreasonable increase in real property taxes brought about by EO 73 PD464 which should be challenged as constitutionally infirm. However, Chavez
amounts to a confiscation of property repugnant to the constitutional guarantee failed to raise any objection against said decree. It was ROAP which questioned
of due process (Ermita-Malate Hotel, et al. v. Mayor of Manila; Sison v. Ancheta, the constitutionality thereof.
et al.).
- that sheer oppression is the result of increasing real property taxes at a period b) The reliance on Ermit-Malate and Sison is misplaced because the due process
of time when harsh economic conditions prevail; and that the increase in the requirement called for therein applies to the "power to tax." EO 73 does not
market values of real property as reflected in the schedule of values was brought impose new taxes nor increase taxes.
about only by inflation and economic recession.
Indeed, the government recognized the financial burden to the taxpayers that
will result from an increase in real property taxes. Hence, Executive Order No.
1019 was issued on April 18, 1985, deferring the implementation of the increase
in real property taxes resulting from the revised real property assessments,
from January 1, 1985 to January 1, 1988.

SC noted:
- that without EO73, the basis for collection of real property taxes will still be the
1978 revision of property values. Certainly, to continue collecting real
property taxes based on valuations arrived at several years ago, in
disregard of the increases in the value of real properties that have
occurred since then, is not in consonance with a sound tax system. Fiscal
adequacy, which is one of the characteristics of a sound tax system,
requires that sources of revenues must be adequate to meet government
expenditures and their variations.

Others:
The other allegation of ROAP that PD464 is unconstitutional, is not proper to be
resolved in the present petition. As stated at the outset, the issue here is limited
to the constitutionality of EO. 73. Intervention is not an independent
proceeding, but an ancillary and supplemental one which, in the nature of
things, unless otherwise provided for by legislation (or Rules of Court), must be
in subordination to the main proceeding, and it may be laid down as a general
rule that an intervention is limited to the field of litigation open to the original
parties.

ACCORDINGLY, the petition and the petition-in-intervention are hereby

DISMISSED.