8/31/2016 G.R.No.

72477

TodayisWednesday,August31,2016

RepublicofthePhilippines
SUPREMECOURT
Manila

THIRDDIVISION

G.R.No.72477October16,1990

NATIONALPOWERCORPORATION,petitioner,
vs.
HON.PRESIDINGJUDGE,REGIONALTRIALCOURT,10THJUDICIALREGIONBRANCHXXV,CAGAYANDE
OROCITY,PROVINCEOFMISAMISORIENTAL,MUNICIPALITYOFJASAAN,MISAMISORIENTALAND
BARANGAYAPLAYA,JASAAN,MISAMISORIENTAL,respondents.

PantaleonZ.SalcedoforrespondentBarangayAplaya.

TheProvincialAttorneyforrespondentMisamisOrientalandMunicipalityofJasaan.

FERNAN,C.J.:

InthisSpecialCivilActionforCertiorari,petitionerNationalPowerCorporation(NAPOCORforbrevity)questions
thejurisdictionoftheRegionalTrialCourtofCagayandeOroCity,BranchXXVtohearCivilCaseNo.9901filed
byrespondentsProvinceofMisamisOrientalandMunicipalityofJasaanforthecollectionofrealpropertytaxand
specialeducationfundtaxfrompetitionercoveringtheyears1978to1984.Theantecedentfactsareasfollows:

OnOctober10,1984,theProvinceofMisamisOrientalfiledacomplaint1withtheRegionalTrialCourtofCagayande
Oro City, Branch XXV against NAPOCOR for the collection of real property tax and special education fund tax in the
amountsofP11,105,008.10andP11,104,658.10,respectively,coveringtheperiod1978to1984.PetitionerNAPOCORthen
defendanttherein,filedamotiontodismiss 2datedJanuary12,1985onthegroundsthatthecourthasnojurisdictionover
the action or suit and that it is not the proper forum for the adjudication of the case. In support of this motion NAPOCOR
cited Presidential Decree No. 242 dated July 9, 1973 which provides that disputes between agencies of the government
including govemmentowned or controlled corporations shall be administratively settled or adjudicated by the Secretary of
Justice.

ThecourtthroughJudgePablitoC.Pielagoissuedanorder 3datedJanuary28,1985denyingthemotiontodismiss.
NAPOCORfiledasupplementalmotiontodismiss 4onFebruary22,1985citingaresolutionoftheFiscalIncentiveReview
Board,No.1085effectiveJanuary11,1984,restoringthetaxanddutyexemptionprivilegesofpetitioner.

On March 27, 1985, NAPOCOR filed its answer to the complaint with counterclaim. Treating the same as a
secondmotiontodismissandfindingtheaffirmativedefensesthereinstatedtobeunmeritorious,thecourtaquo
issued an order on June 27, 1985, denying the second motion to dismiss and requiring both parties to appear
beforethecourtforthepurposeofsubmittingastipulationoffacts.

On July 23, 1985, Barangay Aplaya, Municipality of Jasaan, Misamis Oriental filed a complaint in intervention 5
contending that nonpayment by NAPOCOR of real property taxes would adversely affect its interest since under the law,
tenpercent(10%)oftherealpropertytaxcollectedonpropertieswithinitsjurisdictionshallaccruetothegeneralfundofthe
barangay.Thereafter,thecasewassetfortrialpursuanttothecourt'sorderdatedAugust20,1985.6

OnOctober30,1985,petitionerNAPOCORfiledbeforethisCourtthepresentspecialcivilactionforcertiorari 7
settingforththefollowingissues,towit:

1) Respondent Court acted without or in excess of jurisdiction and with grave abuse of discretion
when it issued the orders dated January 28, 1985, June 27, 1985 and August 20, 1985, denying
petitioner's motions to have Civil Case No. 9901 dismissed on the grounds of lack of jurisdiction
and/orimpropervenue.

2)Petitionerisexemptfrompaymentofrealpropertytaxes.

Relied upon by NAPOCOR in assailing the jurisdiction of the lower court and/or the venue of the action are
Sections 2 and 3 of Presidential Decree No. 242, entitled "PRESCRIBING THE PROCEDURE FOR
ADMINISTRATIVE SETTLEMENT OR ADJUDICATION OF DISPUTES, CLAIMS AND CONTROVERSIES
BETWEEN OR AMONG GOVERNMENT OFFICES, AGENCIES AND INSTRUMENTALITIES, INCLUDING
GOVERNMENTOWNEDORCONTROLLEDCORPORATIONS,ANDFOROTHERPURPOSES"datedonJuly9,
1973.Sections2and3ofthisDecreeprovide:

Section2.Inallcasesinvolvingonlyquestionsoflaw,thesameshallbesubmittedtoandsettledor
adjudicated by the Secretary of Justice, as Attorney General and ex officio legal adviser of all
governmentowned or controlled corporations and entities, in consonance with section 83 of the
Revised Administrative Code. His ruling or determination of the question in each case shall be
conclusiveandbindinguponallthepartiesconcerned.

Section 3. Cases involving mixed questions of law and of fact or only factual issues shall be
submittedtoandsettledoradjudicatedby:

(a)TheSolicitorGeneral,withrespecttodisputesorclaimsorcontroversiesbetweenoramongthe
departments,bureaus,officesandotheragenciesoftheNationalGovernment

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(b)TheGovermnentCorporateCounsel,withrespecttodisputesorclaimsorcontroversiesbetween
oramongthegovernmentownedorcontrolledcorporationsorentitiesbeingservedbytheofficeof
theGovernmentCorporateCounseland

(c)TheSecretaryofJustice,withrespecttoallotherdisputesorclaimsorcontroversieswhichdonot
fallunderthecategoriesmentionedinparagraphs(a)and(b).(Emphasissupplied)

In upholding the lower court's jurisdiction, respondent municipal corporations, on the other hand, rely on
Presidential Decree No. 464, entitled "THE REAL PROPERTY TAX CODE" enacted on July 1, 1974, specifically
Section82thereofwhichprovides:

Section 82. Collection of real property tax through the courts. The delinquent real property tax
shallconstitutealawfulindebtednessofthetaxpayertotheprovinceorcityandcollectionofthetax
maybeenforcedbycivilactioninanycourtofcompetentjurisdiction.Thecivilactionshallbefiledby
theProvincialorCityFiscalwithinfifteendaysafterreceiptofthestatementofdelinquencycertified
tobytheprovincialorcitytreasurer.Thisremedyshallbeinadditiontoallotherremediesprovided
bylaw.

ItisindeeddesirableandbeneficialtotheJudiciary'songoingprogramofdecongestingcourtdocketsthatintra
governmental disputes such as this be settled administratively. Unfortunately, our consideration of the legal
provisions involved leads us to a different conclusion. In reconciling these two conflicting provisions of P.D. 242
andP.D.464onthematterofjurisdiction,weareguidedbythebasicrulesonstatutoryconstruction.

An examination of these two decrees shows that P.D. 242 is a general law which deals with administrative
settlementoradjudicationofdisputes,claimsandcontroversiesbetweenoramonggovernmentoffices,agencies
and instrumentalities, including governmentowned or controlled corporations. The coverage is broad and
sweeping,encompassingalldisputes,claimsandcontroversies.

P.D.464ontheotherhand,governstheappraisalandassessmentofrealpropertyforpurposesoftaxationby
provinces, cities and municipalities, as wen as the levy, collection and administration of real property tax. It is a
speciallawwhichdealsspecificallywithrealpropertytaxes.

Itisabasictenetinstatutoryconstructionthatbetweenagenerallawandaspeciallaw,thespeciallawprevails.
GENERALIASPECIALIBUSNONDEROGANT.8

Wherealaterspeciallawonaparticularsubjectisrepugnantto,orinconsistentwith,apriorgenerallawonthe
samesubject,apartialrepealofthelatterwinbeimpliedtotheextentoftherepugnancyoranexceptiongrafted
uponthegenerallaw.

A special law must be intended to constitute an exception to the general law in the absence of special
circumstancesforcingacontraryconclusion.9

The conflict in the provisions on jurisdiction between P.D. 242 and P.D. 464 should be resolved in favor of the
latterlaw,sinceitisaspeciallawandoflaterenactment.P.D.242mustyieldtoP.D.464onthematterofwhoor
which tribunal or agency has jurisdiction over the enforcement and collection of real property taxes. Therefore,
respondentcourthasjurisdictiontohearanddecideCivilCaseNo.9901.

OnthequestionofwhetherornotNAPOCORisliabletopayrealpropertytaxesandspecialeducationfundtaxes
fortheyears1978to1984,weruleintheaffirmative.

PresidentialDecreeNo.1177,entitled"REVISINGTHEBUDGETPROCESSINORDERTOINSTITUTIONALIZE
THE BUDGETARY INNOVATIONS OF THE NEW SOCIETY" was passed on July 30, 1977. Section 23 thereof
provides:

Section 23. Tax and Duty Exemptions. All units of govemment, including governmentowned or
controlled corporations, shall pay income taxes, customs duties and other taxes and fees as are
imposed under revenue laws provided, that organizations otherwise exempted by law from the
paymentofsuchtaxes/dutiesmayaskforasubsidyfromtheGeneralFundintheexactamountof
taxes/dutiesdueprovided,further,thataprocedureshagbeestablishedbytheSecretaryofFinance
andtheCommissioneroftheBudget,wherebysuchsubsidiesshallautomaticallybeconsideredas
bothrevenueandexpenditureoftheGeneralFund.(Emphasissupplied)

Petitionerallegesthatwhathasbeenwithdrawnisitsexemptionfromtaxes,duties,andfeeswhicharepayableto
the national government while its exemption from taxes, duties and fees payable to government branches,
agenciesandinstrumentalitiesremainsunaffected.Consideringthatrealpropertytaxesarepayabletothelocal
government,NAPOCORmaintainsthatitisexempttherefrom.

We find the above argument untenable. It reads into the law a distinction that is not there. It is contrary to the
clear intent of the law to withdraw from all units of government, including governmentowned or controlled
corporationstheirexemptionsfromallkindsoftaxes.Haditbeenotherwise,thenthelawwouldhavesaidso.Not
havingdistinguishedastothekindsoftaxexemptionswithdrawn,theplainmeaningisthatalltaxexemptionsare
covered.Therethelawdoesnotdistinguish,neithermustwe.

Moreover, Presidential Decree No. 1931 entitled "DIRECTING THE RATIONALIZATION OF DUTY AND TAX
EXEMPTION PRIVILEGES GRANTED TO GOVERNMENTOWNED OR CONTROLLED CORPORATIONS AND
ALLOTHERUNITSOFGOVERNMENT"whichwaspassedonJune11,1984,categoricallystates:

WHEREAS,PresidentialDecreeNo.1177hasalreadyexpresslyrepealedthegruntoftaxprivileges
to any governmentowned or controlled corporation and all other units of government. (Emphasis
supplied)

Thus, any dubiety on NAPOCOR'S liability to pay taxes, duties and fees should be considered unequivocably
resolvedbytheaboveprovision.

InthecaseofNationalPowerCorporationvs.TheProvinceofAlbay,et.al., 10 herein petitioner was held liable for

realpropertytaxestotheprovincialgovernmentofAlbayfortheperiodJune11,1984toMarch10,1987,whenitclaimsto
have been enjoying tax exemptions under Resolutions Nos. 1085, 186 and 1787 of the Fiscal Incentives Review Board

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(FIRB). It must be noted that Resolution 1085 was the same resolution cited by petitioner in its supplemental motion to
dismiss11inCivilCaseNo.9901.Iftheattempt(foundineffectiveforlackofauthorityintheabovecitedcaseofNPCvs.
TheProvinceofAlbay)torestorepetitioner'staxexemptionsbeganonlyin1985withtheissuanceofFIRBResolutionNo.
1085,itstandstoreasonthatpriorthereto,i.e.,from1977whenP.D.1177waspromulgatedupto1984,petitionerdidnot
enjoyanytaxprivilegeaswouldexemptitfromthepaymentofthetaxesunderconsideration.

InthesamecaseofNPCvs.TheProvinceofAlbay,12thisCourthadoccasiontostate:

Actually,theStatehasnoreasontodecrythetaxationofNAPOCOR'sproperties,asandbywayof
realpropertytaxes.Realpropertytaxes,afterall,formpartandparcelofthefinancingapparatusof
theGovernmentindevelopmentandnationbuilding,particularlyinthelocalgovernmentlevel.

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Toallintentsandpurposes,realpropertytaxesarefundstakenbytheStatewithonehandandgiven
totheother.InnomeasurecantheGovernmentbesaidtohavelostanything.

The proceeds of the real property tax are divided among the province, city or municipality where the property
subject to the tax is situated and shall be applied by the respective local government unit for its own use and
benefit. Even the barrio where the property is situated shares in the real property tax collections. Likewise, the
entire proceeds of the additional one per cent (1%) real property tax levied for the Special Education Fund
createdunderR.A.5447,aredividedamongtheprovince,cityandmunicipalitieswherethepropertyissituated.

WHEREFORE,thepetitionisDISMISSED.PetitionerhavingbeenfoundliableforthetaxesbeingcollectedinCivil
CaseNo.9901,therespondentcourtisherebydirectedtoproceedwithdeliberatedispatchinhearingthecase
forthepurposeofdeterminingtheexactliabilityofpetitioner.NoCosts.

SOORDERED.

Gutierrez,Jr.,BidinandCortes,JJ.,concur.

Feliciano,J.,isonleave.

Footnotes

1Rollo,pp.1821.

2Rollo,pp.2224.

3Rollo,pp.25262830.

4Rollo,pp.3133.

5Rollo,pp.6566.

6Rollo,pp.7273.

7Rollo,pp.216.

8Lagmanvs.CityofManila,G.R.No.23305,June30,1966,17SCRA579.

9Bagavs.PNB,99Phil.889,citedinButuanSawmill,Inc.vs.CityofButuan,etal.,No.
L21516,April29,1966,16SCRA755.

10G.R.No.87479,June4,1990.

11Rollo,pp.3133.

12Ibid.

TheLawphilProjectArellanoLawFoundation

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