DOJ Opinion No. 018, s. 1999

DOJ OPINION NO. 018 , s. 1999 February 24, 1999 The Chief Executive Trustee Asset Privatization Trust North Davao Mining Corp. Bldg. 104 Gamboa St., Legaspi Village Makati City Sir : Reference is made to a request of that office for opinion on whether or not the City of Tacloban may validly assess real property tax against Leyte Park Hotel, Inc., (LPHI) a property owned in common by the Asset Privatization trust (APT), the Philippine Tourism Authority (PTA) and the Province of Leyte. A similar request was also sent to this Department by the City Treasurer of Tacloban under a letter dated January 19, 1999. It appears from the records that LPHI is a private corporation duly organized and existing under the laws of the Republic of the Philippines. Its main purpose is to engage in hotel activities and other similar services. During its corporate existence, LPHI incurred loan obligations from the Development Bank of the Philippines (DBP) in the amount of One Hundred Eighty Seven Million Sixty Three Thousand One Hundred Sixty One Pesos (P187,063,161.00) as of December 31, 1989. When Proclamation No. 50 was passed creating the APT, the loan account of LPHI from DBP was among those transferred to APT. prcd On January 19, 1990, APT instituted a foreclosure action against the real and personal properties of LPHI. On March 8, 1990 the properties foreclosed were sold at public auction to APT, being the highest and the only bidder which offered the amount of Three Million Two Hundred Ninety Eight Thousand Seven Hundred Eighty Six Pesos (P3,298,786.00). On September 25, 1990, the Province of Leyte filed a civil case for "Declaration of Nullity of Deed of Conveyance, Recovery of Ownership and Possession, Injunction and Preliminary Injunction with Temporary Restraining Order or Damages" against LPHI, PTA, DBP, APT, Benjamin 'Kokoy' Romualdez, Cesario Sudario, Jr. and the Provincial Sheriff, docketed as Civil Case No. 90-09-162. On May 5, 1994, a Decision based on a Compromise Agreement was promulgated by the Regional Trial Court of Tacloban, which, inter alia , disposed that the net sales proceeds of the assets foreclosed by APT shall be shared by APT, Province of Leyte and Philippine Tourism Authority as follows: APT34% Province of Leyte26% Philippine Tourism Authority40% On September 15, 1994, APT, for and on behalf of the parties, leased Leyte Park Hotel to the Unimaster Conglomeration Incorporated under a Contract of Lease dated September 15, 1994. In a letter dated November 20, 1997, City Treasurer Erlinda Reyes informed APT of the real property taxes delinquency of LPHI. Pertinent portions of the said letter state: "While we are aware of the approval of the Department of Finance of the proposed deferment of realty taxes due on non-performing assets in its letter dated April 23, 1987 to the APT, we strongly believe that at present LPH does not belong to this category of assets because it is very much a performing asset. We are well aware that from 1994 up to the present, the LPH is being run and operated by Mr. Wilson Chan and is paying the sum of P300,000.00 per month. While it is the policy of our office not to accept payment of current year without paying the previous year's taxes, we feel that to be fair to your administration we are willing to compromise, that is, we will accept taxes from the time LPH started its operation in October 1994 to the present, and defer the 1985 to 3rd QTR. 1994 taxes on the basis of the Department of Finance approval of deferment of realty taxes due on non-performing assets. . ." Except for the PTA, the APT and the Province of Leyte refused to pay the aforementioned assessment. Hence, this request for opinion. With regret, this Department cannot with propriety render the desired opinion because the matter would inevitably involve a review of the ruling of the City Treasurer, a local government official, over whose actuation this Department possesses no revisory authority. As a matter of propriety and official courtesy, the Secretary of Justice does not pass upon matters falling within the official cognizance of another office or agency, more particularly a local government agency which is not subject to the revisory authority of the Department of Justice. ( Secretary of Justice Ops. No. 53, s. 1996 , No. 97, s. 1987 and No. 28, s. 1981 ). dctai Moreover, one of the parties involved herein is the Province of Leyte. By settled policy and practice, the Secretary of Justice does not render opinion for local governments or their officials who have their own legal officers to consult on any legal matter affecting them. In the case of provinces and cities in particular, the appointment of a legal officer is mandatory, and one of the specific duties of said legal officer is to "render opinion his opinion in writing on any question of law when requested to do so by the governor, mayor or sanggunian" (Sec. 481[a] and [b] [3] [iii], Local Government Code of 1991). Very truly yours, (SGD.) JUSTICE SERAFIN R. CUEVAS Secretary