Testate Estate of Corcordia T. Lim v. City of Manila (1990)

TESTATE ESTATE OF CONCORDIA T. LIM VS. CITY OF MANILA, JESUS I. CALLEJA, IN HIS CAPACITY AS CITY TREASURER OF MANILA, NICOLAS CATIIL, IN HIS CAPACITY AS CITY ASSESSOR OF MANILA, AND/OR GOVERNMENT SERVICE INSURANCE SYSTEM

G.R. NO. 90639, FEBRUARY 21, 1990

FACTS:

The late Concordia Lim obtained a real estate loan from GSIS, secured by a mortgage constituted on 2 parcels of land. For failure to pay the loan, the GSIS being the highest bidder in a foreclosure sale obtained the properties. This led to the consolidation of Titles in favor of GSIS in 1977. 

However, the Board of trustees issued Resolution no. 188, wherein the estate of Lim was allowed to repurchase the properties. The City Treasurer of Manila required the petitioner to pay the real estate taxes due on 1977, 1978, and on the first quarter of 1979, before the titles could be transferred. The petitioner paid but under protest. A demand for refund was sent against the GSIS. GSIS refused to pay. A demand for refund was also sent to the City Treasurer, which was also denied. A case was thereafter filed before the RTC but dismissed the cases for lack of jurisdiction. It ruled that the case involves a protested action of the City Assessor which should have been filed before the Local Board of Assessment.

ISSUE:

Whether or not the plaintiff was entitled to a refund.

RULING:

The Court rules that the plaintiff-appellant correctly filed the action for refund/reimbursement with the lower court as it is the courts which have jurisdiction to try cases involving the right to recover sums of money.

The records show that the subject properties were leased to other persons during the time when GSIS held their titles, as was the case during the ownership of the late Concordia Lim. 

However, the real estate taxes later assessed on the said properties for the years 1977, 1978 and the first quarter of 1979 were charged against the plaintiff-appellant even if the latter was not the beneficial user of the parcels of land. 

In real estate taxation, the unpaid tax attaches to the property and is chargeable against the taxable person who had actual or beneficial use and possession of it regardless of whether or not he is the owner. (Sections 3(a) and 19 of P.D. No. 464; Province of Nueva Ecija v. Imperial Mining Co., Inc., 118 SCRA 632 [1982]). Raising doubts on the validity of the imposition and collection of the real property tax for the designated periods before the title to the properties may be transferred, the plaintiff-appellant paid under protest. 

To impose the real property tax on the estate which was neither the owner nor the beneficial user of the property during the designated periods would not only be contrary to law but also unjust. If plaintiff-appellant intended to assume the liability for realty taxes for the prior periods, the contract should have specifically stated "real estate taxes" due for the years 1977,1978 and first quarter of 1979. The payments made by the plaintiff-appellant cannot be construed to be an admission of a tax liability since they were paid under protest and were done only in compliance with one of the requirements for the consummation of the sale as directed by the City Treasurer of Manila. 

Hence, the tax assessed and collected from the plaintiff-appellants is not valid and a refund by the City government is in order.