Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS 7th Floor, EDPC Building, BSP Complex Roxas Boulevard, Manila

PETRON CORPORATION,

Petitioner-Appellant,

– versus –

THE LOCAL BOARD OF ASSESSMENT APPEALS OF THE PROVINCE OF BATAAN,
Appellee,

– and – CBAA CASE NO. L-71

THE MUNICIPALITY OF LIMAY, BATAAN, ENGR. RICARDO C. HERRERA, in his capacity as OIC Provincial Assessor, JOCELYN B. LINAO, in her capacity as Municipal Assessor, NELSON C. DAVIC, in his Capacity as Municipal Mayor,
Respondents-Appellees.

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

R E S O L U T I O N

Appealed before this Board is the Order of disapproval of the Surety

Bond in lieu of cash to guarantee the payment of realty taxes on the revised

assessment of the properties of Petron Corporation, Petitioner-Appellant, by

the Local Board of Assessment Appeals (LBAA) of the Province of Bataan,

Appellee, to wit:

“ORDER

This resolved Petitioner’s Motion for Reconsideration of the Order dated February 15, 2006, requiring the submission of proof of payment of real property tax.

In its said motion, Petitioner contended that Section 231 of the Local Government Code has no application to this case because the said provision speaks of assessment made by the provincial or city assessor when the subject of the instant petition is an assessment of the municipal assessor.

The contention lacks merit because under the law the real estate tax is a provincial imposition and under the set up, the municipal assessor cannot make any assessment independently of the provincial assessor.

It is on this score that Petron should have impleaded the Provincial Assessor as an indispensable party in this petition.

Petitioner also prayed that it be allowed to file a surety bond in lieu of cash citing in support thereof the cases where the filing of surety bond was

Reference: Book XIII, pp. 1-9

allowed by the Central Board of Assessment Appeals. Even without waiting for the Board’s ruling, petitioner subsequently submitted its manifestation that it was filing a bond in favor of the Municipality of Limay and the Province of Bataan in the amount of PESOS: NINETY MILLION SIX HUNDRED SEVENTEEN THOUSAND AND ONE HUNDRED TWELVE & 96/100 (P90,617,112.96), attaching thereto the Surety Bond issued by Petrogen Insurance Corporation.

The foregoing notwithstanding the Board hereby states its position that it is within its prerogative whether or not to allow the posting of surety bonds.

The very obvious intent of Section 231 of the Local Government Code is to ensure that the collection of the realty taxes as assessed by the provincial assessor shall not be suspended by an appeal filed under the said Code. Such intent springs from the basic principle that taxes are the lifeblood of government and as such, should be collected without unnecessary hindrance.

While a surety bond may serve to guarantee the payment of the taxes, allowing it to be posted in lieu of the payment would effectively deprive the government of the beneficial use of the taxes during the entire period of time that the case remains pending.

WHEREFORE, the Board hereby resolves to deny the petitioner’s motion for reconsideration and to disapprove the surety bond that petitioner submitted.

Petitioner is hereby given a period of fifteen (15) days counted from receipt of this Order within which to pay the taxes imposed on the basis of the questioned assessment and to show proof of such payment.

Petitioner is likewise directed to join the Provincial Assessor of Bataan as a party respondent who should be furnished a copy of the petition.

The hearing of the petition is, in the meantime, deferred. Stern warning is hereby issued that failure to comply with this Order shall mean the dismissal of the petition.

SO ORDERED.”

Petitioner-Appellants’ ground for Appeal is as follows:

“THE DISAPPROVAL BY THE APPELLEE OF THE SURETY BOND POSTED BY THE APPELLANT AMOUNTS TO GRAVE ABUSE OF DISCRETION AND IS CONTRARY TO THE RULES EXISTING JURISPRUDENCE.”

Petitioner-Appellant cites Section 8 (RULE V) of the RULES OF

PROCEDURE BEFORE THE LOCAL BOARD OF ASSESSMENT APPEALS

on surety bond posting, adding thereto the long line of cases wherein surety

bonds were posted in lieu of payment.

Appellee Local Board and Respondent-Appellee, OIC Provincial

Assessor RICARDO C. HERRERA were one in their Answer that subject Order

is interlocutory, as it does not finally dispose of the case, hence not appealable;

“the very obvious intent of Section 231 (R.A. 7160) is to ensure the collection of

Reference: Book XIII, pp. 1-9

the assessed realty tax notwithstanding the Appeal “and that” such intent

springs from the basic principle that taxes are the lifeblood of government and

as such, should be collected without necessary hindrance.”

In Reply, Petitioner-Appellant reiterates that it “has paid the amount of

P108,165,516.18 in realty taxes as of September 15, 2006 corresponding to

the undisputed real property taxes assessed for 2006. Hence, it is not entirely

correct for the respondents-appellees to allege or claim that the filing of the

surety bond by the appellant deprived the Provincial Government of Bataan

and the Municipality of Limay, Bataan of the beneficial use of the realty taxes.”

The record shoes that Petitioner-Appellant filed under Section 226 of the

Local Government Code of 1991 (R.A. 7160), a Petition before the Local Board

of Assessment Appeals (LBAA) of the Province of Bataan on the revised

assessment issued by the Municipal Assessor of Limay, Bataan, Ms Jocelyn B.

Linao, covering the Isomerization and Hydrotreater facilities which, Petitioner-

Appellant maintains as enjoying, among others, a five-year real property tax

exemption.

Before proceeding with the Appeal on the Revised Assessment, the

following Order was issued, solely signed by the Chairman of the Local Board

of Assessment Appeals of Bataan, Emmanuel M. Aquino as follows:

“Petitioner is hereby order (sic) to submit proof of payment of real property tax for 2006 in accordance with Sec. 252 of the Local Government Code of 1991, for the Local Board of Assessment Appeals to have jurisdiction on your petition.”

Pursuant to said Order, Petitioner-Appellant filed a Motion for Reconsideration

Praying among others that it “be allowed to post a surety bond to guarantee

payment of real property tax for 2006”. Petitioner-Appellant cited cases wherein

the Central Board of Assessment Appeals allowed the filing of surety bond in

lieu of cash to guarantee the payment of realty taxes.

Whether the Order of the LBAA of Bataan disapproving the surety bond

submitted by Petitioner-Appellant is interlocutory or not is well settled in the

case of Bairan vs. Tan Siu Lay (18 SCRA 1239) as follows:

Reference: Book XIII, pp. 1-9

“The principal orders involved in this appeal are that of January 4, 1961 – which requires petitioner to file a surety bond in the sum of P100,000.00 – and the order of January 17 of the same year – which requires him to surrender and deliver to the executor the possession of all the properties of the estate found in his hands. Petitioner attempted to appeal from both the respondent judge refused to give due course to his appeals upon the ground that said orders were merely of an interlocutory character.

We disagree with the view adopted by the respondent judge.

It is settled that a court is final in character if it puts an end to the particular matter resolved, leaving thereafter no substantial proceeding to be had in connection therewith except its execution; and contrary wise, that a given court order is merely of an interlocutory character if it is provisional and leaves substantial proceeding to be had in connection with its subject in the court by whom it was issued.

It will be noted that in connection with the order of January 4, 1961, the court decided, over petitioner’s objection, that the latter must file a surety bond as prayed by his adversary. Thus, upon the question of whether or not petitioner should file a bond, there was nothing left to be done except to have the order aforesaid carried out, it is clear, therefore, that said (sic) is final in character and, as such, is appealable within the period of appeal provided by law. (Underscoring Supplied)

The above-Bairan vs. Tan Siu Lay case provided for what is interlocutory

or not. By the Supreme Court therefore, we adherently hold that “a court order

is final in character if it puts an end to the particular matter resolved, leaving

thereafter no substantial proceeding to be had in connection therewith except

its execution”. In view thereof, “upon the question of whether or not petitioner

should file a bond, there is nothing left to be done except to have the order

aforesaid carried out. It is clear therefore, that said (sic) is final in character

and, as such is appealable”.

Pursuantly, while it is true, as declared in said Order, that “the municipal

assessor cannot make any assessment independent of the provincial assessor,

it is not true that it is within the Local Board’s “prerogative whether or not to

allow the posting of surety bonds”. Sec. 231 of the Local Government Code of

1991, as cited by Appellee Local Board, provides no prerogative to Local

Boards, whether expressed or implied, on whether or not to allow the posting of

surety bonds. Such authority or powers cannot merely be supposed or inferred:

it should be provided for.

Appellee Local Board claims that allowing the surety bond “to be posted

in lieu of the payment would effectively deprive the government of the beneficial

Reference: Book XIII, pp. 1-9

use of the taxes during the entire period of time that the case remains pending”.

Appellee Local Board should be aware and mindful that such payment cannot

be used during such pendency. “The tax or a portion thereof paid under protest

shall be held in trust by the treasurer concerned” (Par. (b) Sec. 252, R.A. 7160).

Parenthetically, the Order dated February 15, 2006, for Petitioner-

Appellant to submit proof of payment of real property tax for 2006, purportedly

by the Local Board of Assessment Appeals of the Province of Bataan, is

conformably deficient: it is signed solely by its Chairman when it should have

been signed, at least by a majority of its concurring members. The Order dated

August 30, 2006, now on appeal before this Board, is already signed by the

entire membership of said Local Board, hence formally valid.

The fourth paragraph of Sec. 230 of the Local Government Code of

1991, from where this Board derives its authority, provides:

“The Central Board of Assessment Appeals, in the performance of its powers and duties, may x x x adopt its own rules and regulations.”

By virtue thereof, this Board promulgated the RULES OF PROCEDURE

BEFORE THE CENTRAL BOARD OF ASSESSMENT APPEALS and the

RULES OF PROCEDURE BEFORE THE LOCAL BOARD OF ASSESSMENT

APPEALS. Section 7 RULE V of the RULES OF PROCEDURE BEFORE THE

LOCAL BOARD OF ASSESSMENT APPEALS reads:

“Section 7. Effect of Appeal on Collection of Taxes. – An Appeal shall not suspend the collection of the corresponding realty taxes on the real property subject of the appeal as assessed by the provincial, city or municipal assessor, without prejudice to subsequent adjustment depending upon the outcome of the appeal. An appeal may be entertained but the hearing thereof shall be deferred until the corresponding taxes due on the real property subject of the appeal shall have been paid under protest or the petitioner shall have given a surety bond, subject to the following conditions:

(1) the amount of the bond must not be less than the total realty taxes and penalties due as assessed by the assessor nor more than double said amount;

(2) the bond must be accompanied by a certification from the Insurance Commission (a) that the surety is duly authorized to issue such bond; (b) that the surety bond is approved by and registered with said Commission; and (c) that the amount covered by the surety bond is within the writing capacity of the surety company; and

(3) the amount of the bond in excess of the surety company’s writing capacity, if any, must be covered by Reinsurer Binder, in which case, a certification to this effect must likewise accompany the surety bond.”

Reference: Book XIII, pp. 1-9

The posting of a surety bond has already been cleared by the Supreme

Court in the case of Collector vs. Avelino (100 Phil 334) in 1956 – reiterated in

Collector vs. Reyes (100 Phil 828) in 1957, wherein the taxpayer is, “either to

deposit the amount claimed or to file a surety bond for not more than double

the amount with the Court.”

Accordingly therefore, having been initiated and proceeded in its long line

of Decisions, the granting of surety bonds in lieu of cash deposits on realty

taxes under litigation should no longer be questioned before this Board. Rather

it should just be accorded with due and common conformance. Maybe a

Judicial Notice?

This Board cannot simply ignore such Decisions it previously rendered

on self-same issue and identical situation and disregard the principle of stare

decisis. This Board just abide and adhere to decided cases, especially more so,

when such Decisions emanate from the Board itself.

WHEREFORE, the Order appealed from is hereby Set Aside Reversed.

The Local Board of Assessment Appeals of the Province of Bataan is hereby

Ordered to approve and allow Petitioner-Appellant, Petron Corporation, to post

a surety bond in lieu of a deposit in cash on subject realty tax and proceed with

the main case: The February 2, 2006 Appeal on the Revised Assessment of

Real Properties of Petron Corporation.

SO ORDERED

Manila, Philippines, March 5, 2007.

(Signed) CESAR S. GUTIERREZ
Chairman

(Signed)
ANGEL P. PALOMARES Member

(Signed) RAFAEL O. CORTES
Member

Reference: Book XIII, pp. 1-9