DOJ Opinion No. 010, s. 2004

DOJ OPINION NO. 010, s. 2004 January 28, 2004 Mr. Ricardo S. Canlas Chief Privatization Officer Privatization and Management Office (PMO) 104 Gamboa St., Legaspi Village Makati City Sir : This refers to the request for confirmation of the opinion rendered by the PMO-Legal Department which held that PMO is liable to pay the realty tax on the Leyte Park Hotel Inc. (LPHI) property to the City of Tacloban on the basis of the Office of the President (OP) Decisions dated November 10, 2000 and May 21, 2001 notwithstanding the Decision/obiter dictum dated February 15, 2002 of Branch 8, Regional Trial Court (RTC) of Tacloban City which declared that it is not the owners who should pay the real property tax but the beneficial user, Unimaster Conglomerate, Inc. (UCI). ADHCSE It is stated that LPHI, a private corporation engaged in hotel activities and other similar services, has incurred loan obligations from the Development Bank of the Philippines (DBP); that said loan account was among those placed under the provisional management of the Asset Privatization Trust (APT) by virtue of Proclamation No. 50; that the APT instituted foreclosure action against the real and personal properties of LPHI before the Regional Trial Court (RTC) of Tacloban City and was able to secure a Certificate of Sale on the chattels of the latter; that when the Province of Leyte filed a civil case for declaration of nullity of the sale and recovery of ownership and possession, a Decision based on Compromise Agreement was promulgated granting the APT the right to foreclose the subject real property and giving it full power to dispose the real and personal properties of Leyte Park Hotel with the net sales proceeds to be shared by APT (34%), Province of Leyte (26%), Philippine Tourism Authority (PTA) (40%); that pursuant to the Memorandum of Agreement (MOA) subsequently executed by the aforementioned parties which allowed them to lease Leyte Park Hotel properties, a Contract of Lease was negotiated by the same parties with UCI where Section 11.04 thereof provides that "real property taxes shall be for the account of the LESSOR . . ."; that the Tacloban City Treasurer alleged the existence of realty tax delinquency of LPHI from 1985-1998 which the APT and the Province of Leyte refused to pay, leading the matter to be referred to the Department of Finance (DOF); that the DOF has opined that real property tax can be validly assessed against LPHI although it is owned by the said government agencies considering that its beneficial use has been granted for valuable consideration in favor of UCI, which is a taxable entity, premised on the ground that exemption of government property from real property tax ceases once the beneficial use thereof is granted to a taxable person; that the DOF Decision has been elevated to the OP which ruled that the leasing out of the LPHI to UCI granted the beneficial use thereof to a taxable person, hence, removed the exempt status of the property; that the Province of Leyte filed a complaint/petition with the RTC-Tacloban City for prohibition or a writ of injunction with a prayer for a temporary restraining order against the City of Tacloban to forestall the levy and subsequent public auction sale of the LPHI properties; that the Court upheld the imposition of realty tax by the City of Tacloban but commented, in obiter dictum , that the petitioners Province of Leyte, PTA and APT are not the ones who should pay the assessed realty tax but the beneficial user thereof, that is, the UCI; and that PMO-Legal Department has recommended that PMO pay the assessed tax on the LPHI property on the basis of the OP decision and properly account the same in the net shares of the Province of Leyte and PTA. Let it be noted that confirmation of the opinion rendered by the Legal Department of PMO would mean passing upon the Decision of the OP. In line with established precedents, the Secretary of Justice does not render opinion/clarification on questions involving the official acts of the Office of the President over which this Department has no revisory authority, unless requested by said Office itself ( Secretary of Justice Opn . No . 47, s . 1997 ). 2004dojcd Moreover, the issue you have raised relates to a pending civil case (Special Civil Case No. 2001-01-20) before Branch 9, RTC-Tacloban City. By settled policy and practice, the Secretary of Justice does not render opinion or give legal advice on matters which are sub-judice or pending litigation in court ( Secretary of Justice Opns . No . 115, s . 1981 ; No . 152, s . 1983 ; No . 173, s . 1991 and No . 34, s . 1992 ). To rule on your query would be unwarranted intrusion into the exercise of the judicial powers and functions pertaining to the RTC which belongs to a separate and coordinate branch of the government and could subject this Office to criticism for violation of the independence of the judiciary ( Opn . No . 14, s . 1989 ). AIcaDC Finally, the query involves the substantive rights of a private party, LPHI, and since the opinion of the Secretary of Justice is merely advisory in nature, such opinion would not be binding upon said private party who, if adversely affected by such opinion, may take issue therewith and contest it before the courts. As a matter of policy, therefore, the Secretary of Justice has consistently refrained from rendering opinion on questions which are justiciable in nature or those which may be the subject of litigation before the courts ( Opn . No . 92, s . 1971 ; Opn . No . 46, s . 1981 ; Opn . No . 91, s . 1987 ; Opn . No . 99, s . 1999 ; Opn . Nos . 12 and 31, s . 2000 ; and Opn . No . 32, s . 2001 ). Very truly yours, (SGD.) MA. MERCEDITAS N. GUTIERREZ Acting Secretary