131.

CITY OF BAGUIO, plaintiff-appellee,

vs.
FERNANDO S. BUSUEGO, defendant-appellant.

G.R. No. L-29772 September 18, 1980

Ponente: TEEHANKEE, J.

FACTS: This tax collection suit instituted by the City of Baguio, against appellant Fernando S. Busuego,
originated in the City Court and was subsequently elevated to the Court of First Instance.

Under Commonwealth Act No. 186, the GSIS as well as its property are exempt from payment of all types and
kinds of taxes.

On August 11, 1959, defendant Busuego and the Government Service Insurance System (GSIS) executed a
"Contract to Sell" over the subject property. Although the agreed purchase price of the property has not been
fully paid, Busuego was already using the said property. The City of Baguio has consistently assessed the
subject property. The unpaid taxes on record on the property for 1962 to 1966 amounted to P1,656.00. Despite
demands made to Busuego for payment of said taxes, he refused and failed to pay the same.

The city court rendered judgment in favor of plaintiff, sentencing defendant to pay the sum of P1,656.00.00 with
legal interest from the filing of complaint until the same is fully paid. Upon appeal, the court of first instance,
likewise held that defendant as owner was liable for the realty taxes on the property.

ISSUE: Whether the subject property is still exempt from tax, considering that the defendant has beneficial use
over the same?

HELD: NO. Section 40(a) of Presidential Decree No. 464 entitled “The Real Property Tax Code” provides:

Sec. 40. Exemptions from Real Property Tax. — The exemptions shall be as follows:

(a) Real property owned by the Republic of the Philippines or any of its political subdivisions
and any government-owned corporation so exempt by its charter; Provided, however, That
this exemption shall not apply to real property of the above-named entitles the beneficial use
of which has been granted, for consideration or otherwise, to a taxable person.

Thus under this provision, while the GSIS may be exempt from real estate tax the exemption does not cover
property belonging to it "where the beneficial use thereof has been granted for consideration or otherwise
to a taxable person." There can be no doubt that under the provisions of the contract in question, the
purchaser to whose possession the property had been transferred was granted beneficial use thereof. It
follows on the strength of the provision sec. 40(a) of PD 464 that the said property is not exempt from the
real property tax.

The end result is but in consonance with the established rule in taxation that “exemptions are held strictly
against the taxpayer and liberally in favor of the taxing authority”.

The judgment of the CFI was affirmed by the Court.

132. JOSE B. L. REYES and EDMUNDO A. REYES, petitioners,
vs.
PEDRO ALMANZOR, VICENTE ABAD SANTOS, JOSE ROÑO, in their capacities as appointed and
Acting Members of the CENTRAL BOARD OF ASSESSMENT APPEALS; TERESITA H. NOBLEJAS,
ROMULO M. DEL ROSARIO, RAUL C. FLORES, in their capacities as appointed and Acting Members of
the BOARD OF ASSESSMENT APPEALS of Manila; and NICOLAS CATIIL in his capacity as City
Assessor of Manila, respondents.

G.R. Nos. L-49839-46 April 26, 1991

Ponente: PARAS, J.

FACTS:

Petitioners J.B.L. Reyes, Edmundo and Milagros Reyes are owners of parcels of land situated in Tondo and
Sta. Cruz Districts, City of Manila, which are leased and entirely occupied as dwelling sites by tenants. Said
tenants were paying monthly rentals not exceeding three hundred pesos (P300.00) in July, 1971.

Republic Act No. 6359 was enacted, prohibiting for one year from its effectivity, an increase in monthly rentals
of dwelling units or of lands on which another's dwelling is located, where such rentals do not exceed three
hundred pesos (P300.00) a month but allowing an increase in rent by not more than 10% thereafter.
Presidential Decree No. 20 amended R.A. No. 6359 by making absolute the prohibition to increase monthly
rentals below P300.00.

Consequently, the Reyeses were precluded from raising the rentals and from ejecting the tenants. In 1973,
respondent City Assessor of Manila re-classified and reassessed the value of the subject properties based on
the schedule of market values duly reviewed by the Secretary of Finance. The revision entailed an increase in
the corresponding tax rates prompting petitioners to file a Memorandum of Disagreement with the Board of Tax
Assessment Appeals. They averred that the reassessments made were "excessive, unwarranted, inequitable,
confiscatory and unconstitutional" considering that the taxes imposed upon them greatly exceeded the annual
income derived from their properties. They argued that the income approach should have been used in
determining the land values instead of the comparable sales approach which the City Assessor adopted.
However, the Board of Tax Assessment Appeals considered the assessments valid. The Reyeses appealed to
the Central Board of Assessment Appeals, which affirmed the assailed valuation and assessment.

ISSUE: Whether the assessments were excessive, unwarranted, inequitable, confiscatory and
unconstitutional?

HELD: YES. Under Art. VIII, Sec. 17 (1) of the 1973 Constitution, then enforced, the rule of taxation must not
only be uniform, but must also be equitable and progressive. Uniformity has been defined as that principle by
which all taxable articles or kinds of property of the same class shall be taxed at the same rate. Taxation is said
to be equitable when its burden falls on those better able to pay. Taxation is progressive when its rate goes up
depending on the resources of the person affected.

Ironically, in the case at bar, not even the factors determinant of the assessed value of subject properties under
the "comparable sales approach" were presented by the public respondents, namely: (1) that the sale must
represent a bonafide arm's length transaction between a willing seller and a willing buyer and (2) the property
must be comparable property (Rollo, p. 27). Nothing can justify or support their view as it is of judicial notice
that for properties covered by P.D. 20 especially during the time in question, there were hardly any willing
buyers. As a general rule, there were no takers so that there can be no reasonable basis for the conclusion that
these properties were comparable with other residential properties not burdened by P.D. 20. Neither can the
given circumstances be nonchalantly dismissed by public respondents as imposed under distressed conditions
clearly implying that the same were merely temporary in character. At this point in time, the falsity of such
premises cannot be more convincingly demonstrated by the fact that the law has existed for around twenty (20)
years with no end to it in sight.
Consequently, it stands to reason that petitioners who are burdened by the government by its Rental Freezing
Laws (then R.A. No. 6359 and P.D. 20) under the principle of social justice should not now be penalized by the
same government by the imposition of excessive taxes petitioners can ill afford and eventually result in the
forfeiture of their properties.

The respondent Board of Assessment Appeals of Manila and the City Assessor of Manila were ordered to
make a new assessment by the income approach method to guarantee a fairer and more realistic basis of
computation.
133. PEDRO P. PECSON, petitioner,
vs.
THE HON. COURT OF APPEALS, ERLINDA TAN, JUAN NUGUID, MAMERTO G. NEPOMUCENO,
ANSELMO O. REGIS and REGISTER OF DEEDS OF QUEZON CITY, respondents.

G.R. No. 105360 May 25, 1993

Ponente: QUIASON, J.

This is an appeal by certiorari under Rule 45 of the Revised Rules of Court from the decision of the Court of
Appeals (8th Division) in CA-G.R. CV No. 23910, entitled "Pedro Pecson v. Erlinda Tan, et al." The said
decision affirmed in toto the decision of the Regional Trial Court, Quezon City, dismissing the complaint in Civil
Case No. Q-41471.

In Civil Case No. Q-41471, petitioner filed a complaint to annul the sale at a public auction conducted by
respondent, Anselmo O. Regis, (City Treasurer of Quezon City) of petitioner's property for non-payment of real
estate taxes, alleging that the sale was made without prior notice to him. The complaint further alleged that
petitioner was not notified of his right to redeem the property, that the title to the property was transferred by
respondent Register of Deeds of Quezon City to respondent Mamerto G. Nepomuceno (the buyer at the public
auction) and that the latter sold the property to respondents Erlinda Tan and Juan Nuguid.

The major issue before the trial court was whether the sale of the property by respondent Regis was valid,
which in turn depended on whether petitioner was duly notified of the public auction. In its decision, the trial
court upheld the validity of the public auction, saying that the notices of the auction sale published in a
newspaper of general circulation were notices in rem; that the fact that the notices to the petitioner were sent to
"No. 79 Paquita Street, Sampaloc, Manila" instead of "No. 1009 Paquita St., Sampaloc, Manila," which
petitioner claimed to be the proper address to send the notices to him, was inconsequential; and that petitioner
failed to pay the real estate taxes on the property.

In an Order dated February 8, 1989, the trial court amended its decision by adding the statement:

The 4-door edifice of the plaintiff on the subject lot is, however, another thing which is not a
subject of the instant litigation.

On a motion for reconsideration by respondents Tan and Nuguid, the trial court in its order dated June 16,
1989, reiterated its previous ruling that the 4-door building constructed by petitioner on the lot in controversy
was not covered by the tax sale but awarded said respondents the amount of P10,000.00 as attorney's fees.

Failing to get any relief from the Court of Appeals, petitioner went to this Court wherein he reiterates the issue
of the validity of the public auction of his property for non-payment of taxes on the ground that the notices to
him were sent to the wrong postal address.

The records show that petitioner was the registered owner of a parcel of land in Quezon City consisting of 256
sq. meters and covered by TCT No. 79912 of the Registry of Deeds of Quezon City.

For non-payment of realty taxes, petitioner's property was sold at public auction on November 12, 1980 by
respondent Regis.

Notices of sale were sent to petitioner at "No. 79 Paquita Street, Sampaloc, Manila," and were published in the
Times Journal on October 6, 13, and 30, 1980.

A final notice to exercise the right of redemption dated September 14, 1981 was sent to petitioner at "No. 79
Paquita Street, Sampaloc, Manila."
There being no redemption made after one-year from the date of the auction sale, a Final Bill of Sale was
executed on April 19, 1982 by respondent Regis in favor of respondent Nepomuceno.

In an order dated July 12, 1982, the Regional Trial Court, Quezon City, consolidated title in favor of respondent
Nepomuceno and directed the Register of Deeds of Quezon City to cancel TCT No. 79912 and issue a new
one in lieu thereof, in the name of respondent Nepomuceno.

On February 3, 1983, respondent Register of Deeds canceled TCT No. 79912 in the name of petitioner and
issued TCT No. 302292 in the name of respondent Nepomuceno.

On October 25, 1983, respondent Nepomuceno executed a Deed of Absolute Sale on the subject property in
favor of respondents Tan and Nuguid for P103,000.00.

On December 8, 1983, the Register of Deeds of Quezon City cancelled Nepomuceno's title to the property and
issued TCT No. 308506 in the names of respondents Tan and Nuguid.

In a Rule 45 appeal, as in this case, this Court can only pass upon questions of law. The issues raised by the
petition involve only questions of fact. These are:

(1) Were the notices required under Section 73 of the Real Property Tax Code properly sent to the delinquent
taxpayer? (Petition, pp. 4-12; Rollo, pp. 5-13)

(2) Were respondents Erlinda Tan and Juan Nuguid buyers in good faith? (Petition, pp. 13-14; Rollo, pp. 14-15)

(3) Were the requirements of posting and announcement of the sale under the Real Property Tax Code
complied with? (Petition, pp. 12-13; Rollo, pp. 13-14)

Petitioner argues that respondent Regis sent the notices to him at "No. 79 Paquita St., Sampaloc, Manila"
which was not his address. He claims that his correct Manila address is "No. 1009 Paquita St., Sampaloc" and
his correct Quezon City address is "No. 79, Kamias Road, Quezon City." He admits that on the dates the
notices were mailed, he was no longer residing in Manila but in Quezon City.

The governing law in this case is P.D. No. 464, known as the Real Property Tax Code. Section 73 thereof, with
the epigraph "Advertisement of sale of real property at public auction," in pertinent part, provides:

xxx xxx xxx

Copy of notices shall forthwith be sent either by registered mail or by messenger, or through
the barrio captain, to the delinquent taxpayer, at the address as shown in the tax rolls or
property tax record cards of the municipality or city where the property is located, or at his
residence, if known to said treasurer or barrio captain. Provided, however, that a return of the
proof of service under oath shall be filed by the person making the service with the provincial
or city treasurer concerned.

Under the said provisions of the law, notices of the sale of the public auction may be sent to the delinquent
taxpayer, either (i) at the address as shown in the tax rolls or property tax record cards of the municipality or
city where the property is located or (ii) at his residence, if known to such treasurer or barrio captain.

Petitioner does not claim that the notices issued from 1980 to 1983 should have been sent to him at his
residence in "No. 79 Kamias Road, Quezon City," his residence since 1965 and where the property in litigation
is located. What he claims is that the notices should have been sent to him at his address at "No. 1009 Paquita
St., Sampaloc" even if he was no longer residing there because letters sent to him at the said address were
forwarded to him by the occupants of his former house. As found by the Court of Appeals, what appeared in the
records of the Office of the City Treasurer of Quezon City as the address of petitioner was "1009 Paquita,
Manila," and below the number 1009 was the number "79". From this entry, one can deduce that the taxpayer
had transferred his residence to "No. 79 Paquita, Sampaloc, Manila" from "No. 1009 Paquita, Sampaloc,
Manila". In the register for the tax years starting from 1982 (Exh. S; also Exh. 3), the address of petitioner was
recorded as "79 Paquita, Mla." The Court of Appeals advanced the theory that the number "79" was furnished
by petitioner himself, basing its conclusion on the address given by petitioner in his complaint, which was "No.
79 Kamias Road, Quezon City."

The Court of Appeals concluded that the employees in charge of sending notices in the Treasurer's Office were
not blameworthy in relying on the available tax records.

Petitioner's contention that he would have received the notices had they been sent to "No. 1009 Paquita,
Sampaloc, Manila," because the occupants thereof forwarded the letters addressed to him to his Quezon City
residence, loses force when one considers that the Court of First Instance of Quezon City sent him a notice, in
connection with the proceedings for the consolidation of title, at "No. 1009 Paquita St., Sampaloc, Manila,"
which remained "unclaimed".

For this misfortune that befell petitioner, he has nobody to blame but himself. As a property owner and a school
teacher at that, he should know that if an owner fails to pay the real estate taxes on property, the said property
shall be sold at public auction to recover the delinquent taxes. When petitioner's property was sold at a public
auction in December 1980, the tax delinquency must have accumulated for several years. It was only on July
12, 1982 that the order for consolidation of title in the name of respondent Nepomuceno was issued and it was
only on December 8, 1983 that the title over the property was transferred to respondents Tan and Nuguid. All
throughout these years, petitioner never displayed an interest in paying the real estate taxes on the property.
Worse, he introduced improvements thereon without reporting the same for tax purposes. Had he reported the
improvements he had introduced on the property, the Office of the Treasurer of Quezon City could have been
informed of petitioner's new address in Quezon City.

Petitioner also questions the evidence presented by respondent Regis regarding his compliance with the
requirements of the Real Property Tax Code on the posting and announcement of notices of the sale. (Petition,
pp. 9-13; Rollo, pp. 10-14) In this regard, said respondent presented the certificates-affidavits of eight
employees under the supervision of the Market Superintendent and two employees of the City Treasurer's
Office. Like the issue of whether respondents Tan and Nuguid were buyers in good faith, the issue on the
compliance with the posting of the notices and announcement of the sale, is a question of fact which this Court
will not inquire into and review the evidence relied upon by the lower courts to support their findings (Banaag v.
Bartolome, 204 SCRA 924 [1991]; Ching Sui Yong v. Intermediate Appellate Court, 191 SCRA 187 [1990]).

WHEREFORE, the petition is DENIED and the decision of the Court of Appeals appealed from is AFFIRMED.

SO ORDERED. Cruz, Griño-Aquino and Bellosillo, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 97618 December 16, 1993

134. ISMAEL MATHAY, JR., petitioner,

vs.
VICTOR C. MACALINCAG, Undersecretary of Finance, THE CITY ASSESSOR OF QUEZON CITY, AND THE
CITY TREASURER OF QUEZON CITY, respondents.

G.R. No. 97760 December 16, 1993

RUFINO S. JAVIER, petitioner,

vs.

VICTOR C. MACALINCAG (Undersecretary of Finance), THE MUNICIPAL ASSESSOR AND THE MUNICIPAL
TREASURER OF PASIG, METRO MANILA, respondents.

G.R. No. 102319 December 16, 1993

CONSUELO PUYAT-REYES, petitioner,

vs.

THE SECRETARY OF FINANCE, Acting through the then Undersecretary Victor C. Macalincag, THE
MUNICIPAL ASSESSOR AND THE MUNICIPAL TREASURER OF MAKATI, respondents.

M.M. Lazaro & Associates for petitioner in G.R. 97618.

Briccio C. Ygana for petitioner in G.R. 97760

Eliseo B. Alampay for intervenor.

Ferry, Toledo, Victorino & Associates for petitioner in G.R. 102319.

Ledesma, Saludo & Associates for respondents City Assessor and City Treasurer of Quezon City.

RESOLUTION

NARVASA, C.J.:

On March 21, 1991, Ismael A. Mathay, Jr., describing himself as "a member of Congress, and
registered owner of lands in Quezon City and resident of Metro Manila," instituted in this Court a
special civil action of prohibition against Victor Macalincag, then the Undersecretary of Finance, the
City Assessor and the City Treasurer of Quezon City. The action was docketed as G.R. No. 97618.

His petition sought the perpetual enjoinment, as unconstitutional and void, of "(a) the schedule of
market values prepared by respondent City Assessor for all classes of real property situated in Quezon
City ("to take effect not earlier than January 1, 1991," and "implemented gradually over a three-year
period on a 1/3 2/3 2/3 scheme"), (b) the approval of said schedule by respondent Victor Macalincag,
(c) the revised and/or increased assessments of the properties prepared by the City Assessor based
on the illegal schedule of market values, and (d) the oppressive and excessive real estate tax
increases being implemented by respondents City Assessor and City Treasurer pursuant to the illegal
schedule of market values and unlawful approval, all in violation of the Constitution and laws. The
essential foundation of the petitioner's thesis of the nullity of the schedule of market values is that it
was prepared by the respondent City Assessor alone, independently of the other City Assessors within
the Metropolitan Manila Area, this being in patent violation of the explicit requirement of Section 9 of
Presidential decree No. 921, viz:

Sec. 9. Preparation of Schedule of Values for Real Property within the Metropolitan
Area. — The Schedule of Values that will serve as the basis for the appraisal and
assessment for taxation purposes of real properties located within the Metropolitan
 Area shall be prepared jointly by the City Assessors of the Districts created under
Section one hereof, with the City Assessor of Manila acting as Chairman, in
accordance with the pertinent provisions of Presidential Decree No. 464, as
amended, otherwise known as the Real Property Tax Code, and the implementing
rules and regulations thereby issued by the Secretary of Finance.

The "City Assessors of the Districts created under Section one" above referred to — apart from the
City Assessor of the First District, Manila, who as aforestated, shall act "as Chairman" — are the City
Assessors of the second District: Quezon City, Pasig, Marikina, Mandaluyong, and San Juan; of the
Third District: Caloocan City, Malabon, Navotas, and Valenzuela; of the Fourth District: Pasay City,
Makati, Parañaque, Muntinlupa, Las Piñas, Pateros, Taguig.

The statutory requirement of joint or collective action is echoed in the regulations promulgated by the
Department of Finance (No. 7-77) on July 25, 1977, Section 1.02 of which provides that "Schedule of
Market Values for real property situated within the Metropolitan Manila area be prepared jointly by the
City Assessors of the Districts created under Section 1 of Presidential Decree No. 921, with the City
Assessor of Manila, acting as Chairman."

On the same day, March 21, 1991, this Court issued "a TEMPORARY RESTRAINING ORDER
effective immediately and continuing until further orders . . . ordering the respondents to CEASE and
DESIST from implementing the new increased assessments of real properties in Quezon City" it being
made clear, however, that "taxpayers are required to pay under the old assessments." The Court also
set the case for hearing on Tuesday, April 23, 1991.

Six (6) days later, a similar action was initiated in this Court by Rufino S. Javier — describing himself
as "the Congressman of the Lone District of Pasig, Metro Manila . . . (and) a real property estate owner
in Pasig . . ." — this time against Victor C. Macalincag, as Undersecretary of Finance, and the
Municipal Assessor and the Municipal Treasurer of Pasig, Metro Manila. The action was docketed as
G.R. No. 97760. On the same legal theory as that espoused by petitioner Mathay in the first action,
Javier's petition sought the permanent proscription of the enforcement of "the unreasonably
burdensome, unjust and confiscatory increase" in the assessment of real estate in Pasig.

On April 23, 1991, several persons filed a motion to intervene as petitioners in the action, identifying
themselves as: "Legal Management Council of the Philippines, Eliseo B. Alampay, Custodio G.
Parlade, Vicente A. Macatangay, Jr., Casiano O. Flores, Primo L. Agsaoay, Pepito Abrajano, Leonila
P. Reyes, . . . residents of Quezon City . . . (suing) in their behalf and in behalf of ALL OTHER
RESIDENTS OF QUEZON CITY AND SIMILARLY SITUATED," and alleging that they "have direct,
legal and material interest in the success of the main petition at bar," and the "subject matter of the
present controversy is one of common or general interest to all owners of real estate properties in
Quezon City" in whose behalf the intervention is essayed.

At the hearing of April 23, 1991, the Court heard the petitioners and respondents (who had in the
meantime filed their comments on the petitions) in the two (2) actions: G.R. No. 97618 and G.R. No.
97760. It thereafter issued a Resolution inter alia admitting the petition in intervention and resetting the
hearing of both cases to Thursday, May 16, 1991.

After the Court had again heard the parties on May 16, 1991, it issued a Resolution containing the
following disposition, to wit:

It being the petitioners' and intervenors' principal complaint that they were not
accorded adequate opportunity to ventilate their objections to the procedure followed
in the establishment of the new assessment levels and to adduce evidence relative to
the correctness and reasonableness thereof, and there being agreement on all sides
that in view of the suspension of the "enforcement of the new real property tax
without prejudice to its enforcement when factual factors and considerations later
warrant," a re-examination of the specific rates thereof may be undertaken at this
time in light of said petitioners' and intervenors' objections as well as such evidence
 as they may wish to submit, the Court, in the exercise of its extraordinary or certiorari
jurisdiction, Resolved to REFER both these cases, G.R. No. 97618 and G.R. No.
97760, to the Central Board of Assessment Appeals for hearing and determination
upon the issues therein raised and such evidence as the parties may present, and to
DIRECT said Board to SUBMIT to the Court a copy of its final judgment forthwith
upon its rendition . . . .

On the same day, May 16, 1991, as in the first action (G.R. No. 97618), a temporary restraining order
was issued in this second one, "ordering the respondents to CEASE and DESIST from implementing
the new increased assessments of real properties in Pasig, Metro Manila," it also being made clear,
however, that "taxpayers are required to pay under the old assessments."

On November 5, 1991, the Court issued a Resolution clarifying its earlier one of May 16, 1991. It
pointed out that the authority of the Central Board of Assessment Appeals "to take cognizance of the
factual issues raised in these two cases by virtue of referral by this Court in the exercise of its
extraordinary or certiorari jurisdiction should not be confused with its appellate jurisdiction over
appealed assessment cases under Section 36 of P.D. 464 otherwise known as the Real Property Tax
Code. The Board is not acting in its appellate jurisdiction in the instant cases, but rather, it is acting as
a Court-appointed fact-finding commission to assist the Court in resolving the factual issues raised in
G.R. Nos. 97618 and 97760."

A third special civil action of prohibition impugning the increase of real property assessment levels, this
time in respect of land located in Makati, was instituted on November 4, 1991 by Consuelo Puyat-
Reyes, describing herself as "a registered owner of real estate property in the Municipality of Makati
and
. . . the incumbent Congresswoman of the District in Makati, Metro Manila
. . . ." Impleaded as respondents were the Secretary of Finance (acting through the then
Undersecretary Victor C. Macalincag), the Municipal Assessor and the Municipal Treasurer of Makati.
Acting thereon, the Court, by Resolution dated November 12, 1991, referred the case to the Central
Board of Assessment Appeals "pursuant to the resolution dated May 16, 1991 in G.R. No. 97618
(Mathay vs. Undersecretary of Finance, et al.) and G.R. No. 97760 (Javier vs. Undersecretary of
Finance, et al.) and clarified in the resolution of November 5, 1991," and issued a "TEMPORARY
RESTRAINING ORDER . . . . ordering the respondents to CEASE and DESIST from enforcing the
revised real property assessments and from collecting the increased rates of real estate taxes based
thereon in Makati."

The Central Board of Assessment Appeals thereupon proceeded to act on the cases. It opted to hear
G.R. No. 97618 (CBAA Case No. 261) separately from G.R. No. 97760 "in order . . . to independently
determine the merits of the said two cases, the issues therein raised and such evidences presented by
the parties."

In rendered a Decision in G.R. No. 97618 (CBAA Case No. 261) on February 24, 1993, 1 which it
transmitted in due course to this Court on March 11, 1993 together with the "records of the case
consisting of 426 pages." It found for one petitioner, Ismael A. Mathay, Jr., and sustained his theory by
the following ratiocination:

Section 9 of P.D. 921 is specific and mandatory. The undisputed fact that the City
Assessor of Quezon City solely prepared the Schedule of Market Values in question,
without the participation of the other City Assessors of Metropolitan Manila, with the
City Assessor of Manila acting as Chairman (SEE Exhibit "K", Letter to Mr. Carlos C.
Antonio to Petitioner, dated March 18, 1991), indicates that the said Schedule of
Market Values was prepared contrary to and unauthorized under Section 9 of P.D.
921 and its implementing rule on Section 1.02 of AR No. 7-77. The conclusion is,
therefore, inevitable that the said Schedule of Market Values, having been prepared
by the respondent City Assessor contrary to the express provision of and without
authority under Section 9 is illegal and therefore void.
This Board is of the considered view that the E.O. No. 392 has not repealed P.D. No.
921.

Laws are repealed only by subsequent ones (Art. 7, New Civil Code). An executive
order (like E.O. No. 392) cannot repeal a legislative act (like P.D. 921) (Largado vs.
Masaganda, L-17624, June 30, 1962). A legislative Act, therefore, can only be
repealed by another subsequent legislative Act (Hilado vs. Collector, L-9408, October
31, 1956). Well-recognized by all civilized nations is that a decree issued by the
commander-in-chief of the armed forces who is the head of state and exercising law-
making powers under martial law is in the nature of a legislative act (Ex-parte
Milligan, 4 Wall 2).

Granting for the sake of argument, that E.O. No. 392 was a valid repealing act that
abolished the Metropolitan Manila Commission, yet the said Executive Order did not
in any manner affect the life of P.D. 921 nor the assessment districts and committee
created therein under Section 9 thereof nor its provision regarding the preparation of
schedule of market values for real properties within the Metropolitan Manila Area.

So that, whether it is named Metro Manila Commission or Metro Manila Authority,

P.D. 921 remains effective until validly repealed by subsequent legislation through
Congress (Hilado vs. Collector, supra). Furthermore, implied repeals are never
favored in our jurisdiction (U.S. vs. Palacio, 33 Phil. 208). Expressed otherwise, the
Local Treasury and Assessment Districts created by P.D. 921 has a life independent
of the Metropolitan Manila Authority, and the abolition of the Metro Manila
Commission does not follow the abolition also of P.D. 921 or the Treasury and
Assessment Districts under Metropolitan Manila. Moreover, a perusal of E.O. 392
shows that it provides no repealing clause and it does not contain a specific provision
relative to preparation of schedule of values. It is then clear that Section 9 of P.D. 921
still subsists and is the controlling provision with respect to the manner of preparation
of schedule of values for Metropolitan Manila.

This Board considers untenable the allegation in this Comment submitted to the
Supreme Court for Respondent Hon. Undersecretary Victor C. Macalincag, that the
Respondent City Assessor has authority to prepare alone the questioned Schedule of
Market Values for the reason that Section 9 of P.D. 921 refers to a general revision
and has no application to selective revaluation or assessment of properties in a
certain local government unit. There is nothing in the provision of Section 9 where we
should distinguish between a general revision or revaluation or reassessment in the
preparation of the Schedule of Market Values for Metropolitan Manila, as basis for the
appraisal and assessment of taxation purposes of real properties located in the area.
"Where the law does not distinguish we should not distinguish."

As this Board has ruled that the questioned Schedule of Market Values is illegal and,
therefore, void, the review and findings of the created Technical Review Panel, that
the said Schedule of Market Values was prepared in compliance with the
"instructions" embodied in the Assessment Regulation No. 7-77, will not render valid
the void Schedule of Market Values.

Petitioner further assailed the legality of the Schedule of Market Values in question
on the ground that it was not approved by the Secretary of Finance, but by
Respondent Undersecretary Victor Macalincag contrary to Section 15 of P.D. 464.

We believe that it is at this point immaterial to determine whether or not the

questioned Schedule of Market Values should be approved by the secretary of
Finance himself. The fact being that the said Schedule of Market Values as approved
by Respondent Undersecretary Macalincag is void from its preparation.
 As repeatedly emphasized by our Supreme Court in a line of jurisprudence, "an illegal
act confers no rights, creates no duties, and in the eyes of the law, it is as if the same
had never existed. It can be slain at sight." Such is the case of the questioned
Schedule of Market Values, which is hereby declared void and without force and
effect. Therefore, the realty tax rates based on the Schedule of Market Values are
likewise void and unenforceable.

Further, consisting that this Board in its findings ruled on the illegality of the Schedule
of Market Values as prepared by the Respondent City Assessor, the question of
notice of assessment is rendered moot and academic.

WHEREFORE, judgment is hereby rendered, declaring, as this Board hereby

declares, null and void, and, therefore, unenforceable the subject Schedule of Market
Values for all classes of lands in Quezon City, as prepared solely by Respondent City
Assessor being contrary to and in violation of Section 9 of P.D. No. 921. Respondent
City Assessor and Treasurer of Quezon City are hereby ordered to act accordingly.

This Board hereby declares null and void, and, therefore, unenforceable, the subject
Schedule of Market Values for all classes of lands in Quezon City, as prepared solely
by Respondent City Assessor, being contrary to and in violation of Section 9 of P.D.
No. 921.

The Board also rejected the respondents' argument that "the subsequent issuance of Executive Order
No. 392, constituting the Metropolitan Manila Authority on January 9, 1989, has in effect abolished the
Metro Manila Commission, and therefore has ceased to function." It ruled that Executive Order No.
392 could not repeal a legislative act like P.D. No. 921, and that even assuming that Executive Order
did abolish the Commission, the former "did not in any manner affect the life of P.D. 921 nor the
assessment districts and committee created therein under Section 9 thereof nor its provision regarding
the preparation of schedule of market values for real properties within the Metropolitan Manila Area."

The Central Board of Assessment Appeals rendered its decision in the second case, G.R. No. 97760
(CBAA Case No. 262) (Javier vs. Macalincag), on May 7, 1993, which it transmitted to this Court by
letter of its Chairman dated May 17, 1993. It pronounced null and void by its Municipal Assessor. Said
the Board:

The argument of Respondents about the meetings of the League of City and
Municipal Assessors to consider the proposed schedule for Quezon City or Pasig, for
that matter, is untenable. The League has no authority to prepare the Schedule
Market of Values, for not having been constituted in accordance with Section 9 of
P.D. 921 and 2nd par. of Section 1.02 of DOF AR No. 7-77 which pertained only to
the Districts created under Section 1 of P.D. 921. But even granting that the League
has authority, the League did not extend any hand in the preparation of said
schedule. Consideration or discussion thereof, is not preparation.

In this Board's Decision on CBAA Case No. 261 G.R. No. 97618, ISMAEL A.
MATHAY, JR., Petitioner, vs. THE HON. VICTOR C. MACALINCAG (Undersecretary
of Finance), et al., the dispositive portion thereof reads as follows:

The Board hereby declares null and void, and, therefore,

unenforceable, the subject Schedule of Market Values for all classes
of lands in Quezon City, as prepared solely by Respondent City
Assessor, being contrary to and in violation of Section 9 of P.D. No.
921.

As in the Mathay case, the same issues were substantially raised in the Javier case.
It would be utter folly for this Board to apply the same law differently to the latter
 case. What is good for the goose should be good for the gander. The principle of
Stare Decisis impels this Board to abide by its Decision to stand as precedents for
future judgments.

WHEREFORE, judgment is hereby rendered, declaring null and void the instant
Schedule of Market Values, prepared solely by the Municipal Assessor of Pasig, for
lands in Pasig, Metro Manila, in violation of Section 9 of P.D. 921. Respondents
Municipal Assessor and Municipal Treasurer of Pasig, Metro Manila, are hereby
ordered to act accordingly.

The Board pronounced judgment in the third case, G.R. No. 102319 (CBAA Case No. 263) (Consuelo
Puyat-Reyes v. Secretary of Finance, et al.) on October 5, 1993. This is also sent to this Court,
together with the records, on October 18, 1993.

The decision states that in March, 1993, the Board allowed two (2) firms to make common cause with
petitioner Puyat-Reyes as petitioners-in-intervention, namely: Ayala Land, Inc. (ALI) and Makati
Commercial Estate Association, Inc. (MACEA), "owners/lessees of real properties located within the
Municipality of Makati;" and that compromise agreements were arrived at and submitted by Puyat-
Reyes and the respondents, as well as by the latter and the intervenors.

The Board declared the compromise agreements to have no legal basis and hence unacceptable
under Article 1306 of the Civil Code. And it disposed of the merits of the controversy as follows:

Still fresh from its memory, this Board cannot simply set aside its decision on CBAA
Cases Nos. 261 (Ismael A. Mathay, Jr. vs. the Hon. Victor C. Macalincag,
Undersecretary of Finance, et al.), and 262 (Rufino S. Javier vs. the Hon. Victor C.
Macalincag, Undersecretary of Finance, et al.) and disregard the principle of stare
decisis. This Board must abide or adhere to decided cases, especially and more so
when such decisions emanate from the Board itself.

WHEREFORE, judgment is hereby rendered, declaring null and void the instant
Schedule of Market Values, prepared solely by the Municipal Assessor of Makati, for
lands in Makati, Metro Manila, in violation of Section 9, P.D. 921 and the Compromise
Agreements, entered into by and between the Petitioner and Respondents and
among and between the Intervenors and Respondents, inexistent and void and
without force and effect. Respondents Municipal Assessor and Municipal Treasurer of
Makati, Metro Manila, are hereby ordered to act accordingly.

The Court has reviewed the records of all these three (3) cases and finds that the Central Board of
Assessment Appeals has proceeded correctly as regards their hearing and determination. It also
agrees with the Board's conclusion that the Schedules of Market Values for real properties located in
Quezon City, the Municipality of Pasig and the Municipality of Makati, respectively prepared solely by
the City Assessor of Quezon City, and the Municipal Assessors of Pasig and Makati, failed to comply
with the explicit requirements of Presidential Decree No. 921 in relation to the corresponding
Administrative Regulations promulgated by the Department of Finance (No. 7-77) on July 25, 1977,
and are on that account illegal and void. The Court therefore hereby approves and adopts as its own
the following dispositions made by the Central Board of Assessment Appeals in all said case, to wit:

1) RE G.R. No. 97618 (CBAA Case No. 261)

This Board hereby declares null and void, and, therefore, unenforceable, the subject
Schedule of Market Values for all classes of lands in Quezon City, as prepared solely
by Respondent City Assessor, being contrary to and in violation of Section 9 of P.D.
No. 921.

2) RE G.R. No. 97760 (CBAA Case No. 262)

 WHEREFORE, judgment is hereby rendered, declaring null and void the instant
Schedule of Market Values, prepared solely by the Municipal Assessor of Pasig, for
lands in Pasig, Metro Manila, in violation of Section 9 of P.D. 921. Respondents
Municipal Assessor and Municipal Treasurer of Pasig, Metro Manila, are hereby
ordered to act accordingly.

3) RE G.R. No. 102319 (CBAA Case No. 263)

WHEREFORE, judgment is hereby rendered, declaring null and void the instant
Schedule of Market Values, prepared solely by the Municipal Assessor of Makati, for
lands in Makati, in violation of Section 9, P.D. 921 and the Compromise Agreements,
entered into and between the Petitioner and Respondents and among and between
the Intervenors and Respondents, inexistent and void and without force and effect.
Respondents Municipal Assessor and Municipal Treasurer of Makati, Metro Manila,
are hereby ordered to act accordingly.

IT IS SO ORDERED.

Cruz, Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Nocon, Bellosillo, Melo, Quiason Puno
and Vitug, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 104786 January 27, 1994

135. ALFREDO PATALINGHUG, petitioner,

vs.
HON. COURT OF APPEALS, RICARDO CRIBILLO, MARTIN ARAPOL, CORAZON ALCASID, PRIMITIVA
SEDO, respondents.

Gonzales, Batiller, Bilog & Associates for petitioner.

Garcilaso F. Vega for private respondents.

ROMERO, J.:

In the case before us, we are called upon to decide whether or not petitioner's operation of a funeral home
constitutes permissible use within a particular district or zone in Davao City.

On November 17, 1982, the Sangguniang Panlungsod of Davao City enacted Ordinance No. 363, series of
1982 otherwise known as the "Expanded Zoning Ordinance of Davao City," Section 8 of which states:

Sec. 8. USE REGULATIONS IN C-2 DISTRICTS (Shaded light red in the Expanded Zoning
Map) — AC-2 District shall be dominantly for commercial and compatible industrial uses as
provided hereunder:

xxx xxx xxx

xxx xxx xxx

3.1 Funeral Parlors/Memorial Homes with adequate off street parking space (see parking
standards of P.D. 1096) and provided that they shall be established not less than 50 meters
from any residential structures, churches and other institutional buildings. (Emphasis
provided)

Upon prior approval and certification of zoning compliance by Zoning Administrator issued on February 10,
1987 Building Permit No. 870254 in favor of petitioner for the construction of a funeral parlor in the name and
style of Metropolitan Funeral Parlor at Cabaguio Avenue, Agdao, Davao City.

Thereafter, petitioner commenced the construction of his funeral parlor.

Acting on the complaint of several residents of Barangay Agdao, Davao City that the construction of petitioner's
funeral parlor violated Ordinance No. 363, since it was allegedly situated within a 50-meter radius from the
Iglesia ni Kristo Chapel and several residential structures, the Sangguniang Panlungsod conducted an
investigation and found that "the nearest residential structure, owned by Wilfred G. Tepoot is only 8 inches to
the south. . . . ." 1

Notwithstanding the findings of the Sangguniang Panlungsod, petitioner continued to construct his funeral
parlor which was finished on November 3, 1987.

Consequently, private respondents filed on September 6, 1988 a case for the declaration of nullity of a building
permit with preliminary prohibitory and mandatory injunction and/or restraining order with the trial court. 2

After conducting its own ocular inspection on March 30, 1989, the lower court, in its order dated July 6, 1989,
dismissed the complaint based on the following findings: 3

1. that the residential building owned by Cribillo and Iglesia ni Kristo chapel are 63.25 meters
and 55.95 meters away, respectively from the funeral parlor.

2. Although the residential building owned by certain Mr. Tepoot is adjacent to the funeral
parlor, and is only separated therefrom by a concrete fence, said residential building is being
rented by a certain Mr. Asiaten who actually devotes it to his laundry business with machinery
thereon.

3. Private respondent's suit is premature as they failed to exhaust the administrative remedies
provided by Ordinance No. 363.

Hence, private respondents appealed to the Court of Appeals. (CA G.R. No. 23243).
In its decision dated November 29, 1991, the Court of Appeals reversed the lower court by annulling building
permit No. 870254 issued in favor of petitioner. 4 It ruled that although the buildings owned by Cribillo and
Iglesia ni Kristo were beyond the 50-meter residential radius prohibited by Ordinance 363, the
construction of the funeral parlor was within the 50-meter radius measured from the Tepoot's building.
The Appellate Court disagreed with the lower court's determination that Tepoot's building was commercial
and ruled that although it was used by Mr. Tepoot's lessee for laundry business, it was a residential lot as
reflected in the tax declaration, thus paving the way for the application of Ordinance No. 363.

Hence, this appeal based on the following grounds:

The Respondent Court of Appeals erred in concluding that the Tepoot building adjacent to
petitioner's funeral parlor is residential simply because it was allegedly declared as such for
taxation purposes, in complete disregard of Ordinance No. 363 (The Expanded Zoning
Ordinance of Davao City) declaring the subject area as dominantly for commercial and
compatible industrial uses.

We reverse the Appellate Court and reinstate the ruling of the lower court that petitioner did not violate Section
8 of Davao City Ordinance No. 363. It must be emphasized that the question of whether Mr. Tepoot's building
is residential or not is a factual determination which we should not disturb. As we have repeatedly enunciated,
the resolution of factual issues is the function of the lower courts where findings on these matters are received
with respect and are in fact binding on this court, except only where the case is shown as coming under the
accepted exceptions. 5

Although the general rule is that factual findings of the Court of Appeals are conclusive on us, 6 this admits of
exceptions as when the findings or conclusions of the Court of Appeals and the trial court are contrary to
each other. 7 While the trial court ruled that Tepoot's building was commercial, the Appellate Court ruled
otherwise. Thus we see the necessity of reading and examining the pleadings and transcripts submitted
before the trial court.

In the case at bar, the testimony of City Councilor Vergara shows that Mr. Tepoot's building was used for a dual
purpose both as a dwelling and as a place where a laundry business was conducted. 8 But while its
commercial aspect has been established by the presence of machineries and laundry paraphernalia, its
use as a residence, other than being declared for taxation purposes as such, was not fully substantiated.

The reversal by the Court of Appeals of the trial court's decision was based on Tepoot's building being declared
for taxation purposes as residential. It is our considered view, however, that a tax declaration is not conclusive
of the nature of the property for zoning purposes. A property may have been declared by its owner as
residential for real estate taxation purposes but it may well be within a commercial zone. A discrepancy may
thus exist in the determination of the nature of property for real estate taxation purposes vis-a-vis the
determination of a property for zoning purposes.

Needless to say, even if we are to examine the evidentiary value of a tax declaration under the Real Property
Tax Code, a tax declaration only enables the assessor to identify the same for assessment levels. In fact, a tax
declaration does not bind a provincial/city assessor, for under Sec. 22 of the Real Estate Tax Code, 9 appraisal
and assessment are based on the actual use irrespective of "any previous assessment or taxpayer's
valuation thereon," which is based on a taxpayer's declaration. In fact, a piece of land declared by a
taxpayer as residential may be assessed by the provincial or city assessor as commercial because its
actual use is commercial.

The trial court's determination that Mr. Tepoot's building is commercial and, therefore, Sec. 8 is inapplicable, is
strengthened by the fact that the Sangguniang Panlungsod has declared the questioned area as commercial or
C-2. Consequently, even if Tepoot's building was declared for taxation purposes as residential, once a local
government has reclassified an area as commercial, that determination for zoning purposes must prevail. While
the commercial character of the questioned vicinity has been declared thru the ordinance, private respondents
have failed to present convincing arguments to substantiate their claim that Cabaguio Avenue, where the
funeral parlor was constructed, was still a residential zone. Unquestionably, the operation of a funeral parlor
constitutes a "commercial purpose," as gleaned from Ordinance No. 363.

The declaration of the said area as a commercial zone thru a municipal ordinance is an exercise of police
power to promote the good order and general welfare of the people in the locality. Corollary thereto, the state,
in order to promote the general welfare, may interfere with personal liberty, with property, and with business
and occupations. 10 Thus, persons may be subjected to certain kinds of restraints and burdens in order to
secure the general welfare of the state and to this fundamental aim of government, the rights of the
individual may be subordinated. The ordinance which regulates the location of funeral homes has been
adopted as part of comprehensive zoning plans for the orderly development of the area covered
thereunder.

WHEREFORE, the decision of the Court of Appeals dated November 29, 1991 is hereby REVERSED and the
order dated July 6, 1989 of the Regional Trial Court of Davao City is REINSTATED.

SO ORDERED.

Feliciano, Bidin, Melo and Vitug, JJ., concur.