SECOND DIVISION
GOVERNMENT SERVICE G.R. No. 147192
INSURANCE SYSTEM,
Petitioner,
Present:
PUNO,
J., Chairperson,
-
v e r s u s - SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA and
GARCIA,
JJ.
THE CITY ASSESSOR OF
ILOILO
CITY, THE REGISTER
OF DEEDS OF ILOILO CITY and ROSALINA
FRANCISCO, represented by her attorney-
in-fact,
SALVADOR PAJA I,*
Respondents.
Promulgated:
June
27, 2006
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D E C I S I O N
CORONA, J.:
Assailed in this present petition for
review under Rule 45 of the Rules of Court are the decision[1]
and resolution[2]
of the Court of Appeals (CA) dismissing a petition for annulment of judgment[3]
filed by petitioner, the Government Service Insurance System (GSIS), in
Cadastral Case No. 84 and another unnumbered cadastral case decided by the
Regional Trial Court (RTC), Branches 36 and 31, of Iloilo City, respectively.
In
the two cadastral cases, private respondent Rosalina Francisco petitioned for
the issuance of new transfer certificates of title (TCTs)
in her name over two parcels of land, to wit:
TCT No. 41681
A parcel of land known as Lot No. 6, Block 2, of the
Subdivision Plan (LRC) Psd-184005 being a portion of Lot 2214-B, Jaro Cadastre, LRC (GLRO) Record No. 8 situated in the
District of Jaro, Iloilo City, Island of Panay, registered in the name of GSIS c/o Baldomero Dagdag, of legal age,
Filipino citizen and resident of Jaro, Iloilo City,
Philippines on June 28, 1991.
TCT No. 48580
A parcel of land known as Lot No. 22, Block 2, of the
Subdivision Record No. 8 situated in the District of Jaro,
Iloilo City, Island of Panay, registered in the name
of GSIS c/o Rodolfo Ceres, of legal age, Filipino Citizen and a resident of
Iloilo City, Philippines, with an area of Two Hundred Ninety Four (294) square
meters, more or less.
Private respondent Francisco
purchased the subject properties in the auction sales held for the satisfaction
of delinquent real property taxes. After
the lapse of the one-year redemption period and the failure of the registered
owner or any interested person to redeem the properties, the Iloilo City
Treasurer issued the corresponding final bill of sale to private respondent.
The sales were later on duly annotated on the certificates of title on file
with the Register of Deeds. However, the
final bill of sale could not be registered because the owner’s duplicate
certificate of title was unavailable at that time.
To effect
registration in her name, private respondent instituted separate petitions for
the entry of title in her name over the two lots with the RTCs
of Iloilo City. Both petitions were unopposed.
Finding
merit in her petitions, the RTCs, in separate orders
issued on separate dates, directed the issuance of new duplicate TCTs. The dispositive portion of
the April 29, 1993 order of RTC Branch 36 in Cadastral Case No. 84 read:
WHEREFORE,
premises considered, the Register of Deeds of the City of Iloilo is hereby
ordered to issue new owner’s duplicate copy of Transfer Certificate of Title
No. T-41681 in the name of GSIS c/o Baldomero
Dagdag, upon payment of the required legal fees.
Accordingly, the lost copy of the subject title is hereby declared as NULL and
VOID.[4]
On the other hand, RTC Branch 31 also
issued an order, dated November 8, 1994, in the other (unnumbered) cadastral
case, the dispositive portion of which read:
WHEREFORE, as prayed for, the Register of Deeds, City
of Iloilo is hereby directed to issue a new owner’s duplicate certificate of
Title No. T-48580 in the name of the G.S.I.S. C/O RODOLFO CERES, the registered
owner, basing the same on the Original Certificate of Title found intact and
existing in the Office of the Register of Deeds and the latter to cancel
Transfer Certificate of Title No. T-48580 together with the encumbrances
therein and to issue a new Transfer Certificate of Title in the name of
ROSALINA FRANCISCO of legal age, single, Filipino Citizen and resident of Brgy. Tacas, Jaro, Iloilo City, Philippines.
The owner’s duplicate certificate of title No. T-48580 which was not
surrendered is hereby declared null and void.[5]
No appeal was made from both orders
of the courts a quo, hence, they became
final and executory.
In
a petition to annul the judgment of the trial court, petitioner, as the alleged
previous owner of the parcels of land sold at public auction, assailed the
orders of the RTCs of Iloilo City before the CA. It
claimed that the assessment of real property taxes on it (GSIS) was void since,
under its charter (RA 8291), it was exempt from all forms of taxes (including
real property taxes on the properties held by it) that were due to the local
governments where such properties were located. Furthermore, it claimed that
the proceedings in the assessment and levy of said taxes, as well as the sale
of the properties at public auction, were held without notice to it, hence, its
right to due process was violated.
The appellate court gave no credence
to the arguments of petitioner and dismissed its petition. According to the CA,
the exemption of GSIS under its charter was not applicable pursuant to Section
234(a) of RA 7160, otherwise known as The Local Government Code of 1991 (LGC).
Under that law, the tax-exempt status of GSIS cannot be invoked where the
actual use or beneficial ownership of the properties under its title has been
conveyed to another person.[6]
The CA added that there was also no basis for GSIS’s
claim that it was denied due process.[7]
Petitioner
filed a motion for reconsideration but this was denied by the CA, hence, it
brought this case to us via a petition for review on certiorari under
Rule 45 of the Rules of Court.
In
this petition, petitioner essentially faults the CA for ruling that its
properties were not exempt from all forms of taxes under its charter (RA 8291)
and that the proceedings on the assessment and levy of its properties were
legal.
In
support of its position, petitioner points to Section 39 of RA 8291 which
reads:
Section 39. Exemption from Tax, Legal Process
and Lien. – It is hereby
declared that the actuarial solvency of the funds of the GSIS shall be
preserved and maintained at all times and that the contribution rates are
necessary to sustain the benefits under this Act shall be kept low as possible
in order not to burden the member of the GSIS and their employers. Taxes
imposed on the GSIS tend to impair the actuarial solvency of its funds and
increase the contribution rate necessary to sustain the benefits of this Act. Accordingly,
notwithstanding any laws to the contrary, the GSIS, its assets, revenues,
including all accruals thereto, and benefits paid shall be exempt from all
taxes, assessment fees, charges or duties of all kinds. These exemptions
shall continue unless expressly and specifically revoked and any assessment against the GSIS as of the approval of this Act are
hereby considered paid. Consequently, all laws, ordinances, regulations,
issuances, opinions, or jurisprudence contrary to or in derogation of this
provision are hereby deemed repealed, superseded and rendered ineffective and
without legal force and effect.
xxx xxx
xxx
The funds and/or properties referred to herein as
well as the benefits, sums or monies corresponding to the benefits under this
Act shall be exempt from attachment, garnishment, execution, levy or other processes
issued by the courts, quasi-judicial agencies or administrative bodies
including the Commission on Audit (COA) disallowances and from all financial
obligations of the members, including his pecuniary accountability arising from
or caused or occasioned by his exercise or performance of his official
functions or duties, or incurred relative to or in connection with his position
or otherwise, is in favor of GSIS.[8]
(italics supplied)
We
find no reversible error in the decision and resolution of the CA.
Even if
the charter of the GSIS generally exempts it from tax liabilities, the
prescription is not so encompassing as to make the tax exemption applicable to
the properties in dispute here.
In the early case of City of Baguio v. Busuego,[9]
we held that the tax-exempt status of the GSIS could not prevent the accrual of
the real estate tax liability on properties transferred by it to a private
buyer through a contract to sell. In the present case, GSIS had already
conveyed the properties to private persons thus making them subject to
assessment and payment of real property taxes.[10]
The alienation of the properties sold by GSIS was the proximate cause and
necessary consequence of the delinquent taxes due.
The doctrine laid down in City of Baguio is reflected in Section 234 (a) of the LGC,[11]
which states:
Section 234. Exemptions from Real Property
Tax. — The following are exempted from payment of the real
property tax:
(a) Real property owned by the
Republic of the Philippines or any of its political subdivisions except when
the beneficial use thereof has been granted, for consideration or otherwise, to
a taxable person. (emphasis supplied)
Petitioner, however, claims that RA 8291, which took
effect in 1997, abrogated Section 234 (a) of the LGC of 1991.
We disagree.
The
abrogation or repeal of a law cannot be assumed; the intention to revoke must
be clear and manifest.[12]
RA 8291 made no express repeal or abrogation of the provisions of RA 7160, particularly
Section 234 (a) thereof.
Repeal
by implication in this case is not at all convincing either. To bring about an
implied repeal, the two laws must be absolutely incompatible. They must be
clearly repugnant in a way that the later law (RA 8291) cannot exist without
nullifying the prior law (RA 7160).[13]
Indeed,
there is nothing in RA 8291 which abrogates, expressly or impliedly, that
particular provision of the LGC. The two statutes are not inconsistent on that
specific point, let alone so irreconcilable as to compel us to uphold one and
strike down the other.
The
rule is that every statute must be interpreted and brought into accord with
other laws in a way that will form a uniform system of jurisprudence.[14]
The legislature is presumed to have known existing laws on the subject and not
to have enacted conflicting laws.[15]
Thus, the legislature cannot be presumed to have intended Section 234 (a) to
run counter to Section 39 of RA 8291.
This
conclusion is buttressed by the Court’s 2003 decision in National Power
Corporation v. City of Cabanatuan[16]
where we declared that the tax provisions of the LGC were the most significant
provisions therein insofar as they removed the blanket exclusion of
instrumentalities and agencies of the national government (like petitioner)
from the coverage of local taxation. In that case, petitioner National Power
Corporation (NPC) claimed that it was an instrumentality of the government
exempt under its charter from paying franchise tax. The Court overruled NPC and
upheld the right of respondent city government to impose the franchise tax on
its privilege to transact business in its area.
Again,
in the 2004 case of Rubia v. Government
Service Insurance System,[17]
the Court declared that any interpretation that gave Section 39 an expansive
construction to exempt all GSIS assets and properties from legal processes was
unwarranted. These processes included the levy and garnishment of its assets
for taxes or claims enforced against it. The Court there ruled that the
exemption under Section 39 of the GSIS Charter should be read consistently with
its avowed purpose – the maintenance of its actuarial solvency to finance the
retirement, disability and life insurance benefits of its members. The Court
meant that the tax-exempt properties and assets of GSIS referred to those that
remained at its disposal and use, either for investment or for
income-generating purposes. Properties whose actual and
beneficial use had been transferred to private taxable persons, for
consideration or otherwise, were excluded and were thus taxable.
In Mactan Cebu
International Airport Authority v. Marcos,[18]
the Court ruled that the exemption of a government-owned or controlled
corporation from taxes and other charges was not absolute and could be
withdrawn, as in fact certain provisions of the LGC, including Section 234 (a),
were deemed to have expressly
withdrawn the tax-exempt privilege of petitioner as a government-owned
corporation.
Lastly,
even if we were to construe that RA 8291 abrogated Section 234(a) of the LGC,
still it cannot be made to apply retroactively without impairing the vested
rights of private respondent. The appellate court thus correctly stated:
xxx it has been the courts’ consistent ruling that a
repealing statute must not interfere with vested rights or impair the
obligation of contracts; that if any other construction is possible, the act
should not be construed so as to affect rights which have vested under the old
law. Private respondent[s], we reiterate, have become the private owner[s] of
the properties in question in the regular course of proceedings established by
law, and after the decisions granting such rights have become final and executory. The enactment of the new GSIS Charter cannot be
applied in a retroactive manner as to divest the private respondent[s] of
[their] ownership.[19]
(citations omitted)
WHEREFORE, the petition is hereby DENIED.
No costs.
SO ORDERED.
Associate Justice
WE CONCUR:
Associate
Justice
Chairperson
Associate Justice
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
Associate
Justice
Chairperson, Second
Division
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
Chief Justice
* The Presiding Judges of the Regional Trial Court, Branches 36 and 31, both of Iloilo City, were impleaded as public respondents. Under Rule 45 of the Rules of Court, the appeal therein may be filed without impleading the lower courts or the judges thereof, either as petitioners or respondents.
[1] Penned by Justice Rodrigo V. Cosico and concurred in by Associate Justices Godardo A. Jacinto and Remedios Salazar-Fernando of the 11th Division of the Court of Appeals; rollo, pp. 31-35.
[2] Penned by Justice Rodrigo V. Cosico, and concurred in by Associate Justices Godardo A. Jacinto and Remedios Salazar-Fernando of the Former 11th Division of the Court of Appeals; rollo, pp. 37-38.
[3] CA-G.R. SP No. 51149.
[4] Decided by Judge Quiaico G. Defensor.
[5] Decided by Judge Nicolas Sian Monteblanco.
[6] Rollo, pp. 31-35.
[7] Id.
[8] Rollo, pp. 10-11.
[9] No. L-29772, 18 September 1980, 100 SCRA 116.
[10] The property with TCT 41681 was previously conveyed to Baldomero Dagdag, while the property with TCT No. 48580 was conveyed to Rodolfo Ceres. Supra at p. 2.
[11] Section 40 of the Real Property Tax Code, which took effect in 1974, also carries the same provision. The case of City of Baguio quoted:
“Sec. 40 – Exemptions from Real Property Tax. ― The exemption shall be as follows: (a) Real property owned by the Republic of the Philippines or any of its political subdivisions and government-owned or controlled corporations so exempt by its charter; Provided, however, that this tax 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.”
[12] Statutory Construction, Agpalo, Fifth Edition (2003) (REX Printing Company, Inc., Quezon City, Philippines); citing City of Manila v. Reyes, 99 Phil. 986 (1957).
[13] Id., pp. 399, 404-405.
[14] Hagad v. Gozodadole, 321 Phil. 604 (1995).
[15] Id.
[16] 449 Phil. 233 (2003).
[17] G.R. No. 151439, 21 June 2004, 432 SCRA 529.
[18] 330 Phil. 392 (1996).
[19] Rollo, p. 38.