FIRST DIVISION

Upon Pasig's petition to correct the location stated in TCT Nos. 532250,
G.R. No. 166838, June 15, 2011 598424, and 599131, the Land Registration Court, on June 9, 1995, ordered
the amendment of the TCTs to read that the lots with respect to TCT No.
STA. LUCIA REALTY & DEVELOPMENT, INC., PETITIONER, VS. CITY OF 39112 were located in Barrio Tatlong Kawayan, Pasig City. [7]
PASIG, RESPONDENT, MUNICIPALITY OF CAINTA, PROVINCE OF RIZAL,
INTERVENOR. On January 31, 1994, Cainta filed a petition [8] for the settlement of its land
boundary dispute with Pasig before the RTC, Branch 74 of Antipolo City
DECISION (Antipolo RTC). This case, docketed as Civil Case No. 94-3006, is still
pending up to this date.
LEONARDO-DE CASTRO, J.:
On November 28, 1995, Pasig filed a Complaint, [9] docketed as Civil Case
No. 65420, against Sta. Lucia for the collection of real estate taxes,
For review is the June 30, 2004 Decision [1] and the January 27, 2005
including penalties and interests, on the lots covered by TCT Nos. 532250,
Resolution [2] of the Court of Appeals in CA-G.R. CV No. 69603, which
598424, 599131, 92869, 92870 and 38457, including the improvements
affirmed with modification the August 10, 1998 Decision [3] and October 9,
thereon (the subject properties).
1998 Order [4] of the Regional Trial Court (RTC) of Pasig City, Branch 157, in
Civil Case No. 65420.
Sta. Lucia, in its Answer, alleged that it had been religiously paying its real
estate taxes to Cainta, just like what its predecessors-in-interest did, by
Petitioner Sta. Lucia Realty & Development, Inc. (Sta. Lucia) is the
virtue of the demands and assessments made and the Tax Declarations
registered owner of several parcels of land with Transfer Certificates of
issued by Cainta on the claim that the subject properties were within its
Title (TCT) Nos. 39112, 39110 and 38457, all of which indicated that the
territorial jurisdiction. Sta. Lucia further argued that since 1913, the real
lots were located in Barrio Tatlong Kawayan, Municipality of
estate taxes for the lots covered by the above TCTs had been paid to
Pasig [5] (Pasig).
Cainta. [10]
The parcel of land covered by TCT No. 39112 was consolidated with that
Cainta was allowed to file its own Answer-in-Intervention when it moved
covered by TCT No. 518403, which was situated in Barrio Tatlong
to intervene on the ground that its interest would be greatly affected by
Kawayan, Municipality of Cainta, Province of Rizal (Cainta). The two
the outcome of the case. It averred that it had been collecting the real
combined lots were subsequently partitioned into three, for which TCT
property taxes on the subject properties even before Sta. Lucia acquired
Nos. 532250, 598424, and 599131, now all bearing the Cainta address,
them. Cainta further asseverated that the establishment of the boundary
were issued.
monuments would show that the subject properties are within its metes
and bounds. [11]
TCT No. 39110 was also divided into two lots, becoming TCT Nos. 92869
and 92870.
Sta. Lucia and Cainta thereafter moved for the suspension of the
proceedings, and claimed that the pending petition in the Antipolo RTC, for
The lot covered by TCT No. 38457 was not segregated, but a commercial
the settlement of boundary dispute between Cainta and Pasig, presented a
building owned by Sta. Lucia East Commercial Center, Inc., a separate
"prejudicial question" to the resolution of the case. [12]
corporation, was built on it. [6]
The RTC denied this in an Order dated December 4, 1996 for lack of RTC's October 9, 1998 Order in its protest.
merit. Holding that the TCTs were conclusive evidence as to its ownership
and location, [13] the RTC, on August 10, 1998, rendered a Decision in favor On October 16, 1998, Pasig filed a Motion for Execution Pending Appeal, to
of Pasig: which both Sta. Lucia and Cainta filed several oppositions, on the assertion
that there were no good reasons to warrant the execution pending
WHEREFORE, in view of the foregoing, judgment is hereby rendered in appeal. [17]
favor of [Pasig], ordering Sta. Lucia Realty and Development, Inc. to pay
[Pasig]: On April 15, 1999, the RTC ordered the issuance of a Writ of Execution
against Sta. Lucia.
1) P273,349.14 representing unpaid real estate taxes and penalties as of
1996, plus interest of 2% per month until fully paid; On May 21, 1999, Sta. Lucia filed a Petition for Certiorari under Rule 65 of
the Rules of Court with the Court of Appeals to assail the RTC's order
2) P50,000.00 as and by way of attorney's fees; and granting the execution. Docketed as CA-G.R. SP No. 52874, the petition
was raffled to the First Division of the Court of Appeals, which on
3) The costs of suit. September 22, 2000, ruled in favor of Sta. Lucia, to wit:

Judgment is likewise rendered against the intervenor Municipality of WHEREFORE, in view of the foregoing, the instant petition is hereby GIVEN
Cainta, Rizal, ordering it to refund to Sta. Lucia Realty and Development, DUE COURSE and GRANTED by this Court. The assailed Order dated April
Inc. the realty tax payments improperly collected and received by the 15, 1999 in Civil Case No. 65420 granting the motion for execution pending
former from the latter in the aggregate amount of P358, 403.68. [14] appeal and ordering the issuance of a writ of execution pending appeal is
hereby SET ASIDE and declared NULL and VOID.[18]
After Sta. Lucia and Cainta filed their Notices of Appeal, Pasig, on
September 11, 1998, filed a Motion for Reconsideration of the RTC's The Court of Appeals added that the boundary dispute case presented a
August 10, 1998 Decision. "prejudicial question which must be decided before x x x Pasig can collect
the realty taxes due over the subject properties." [19]
The RTC, on October 9, 1998, granted Pasig's motion in an Order [15] and
modified its earlier decision to include the realty taxes due on the Pasig sought to have this decision reversed in a Petition for Certiorari filed
improvements on the subject lots: before this Court on November 29, 2000, but this was denied on June 25,
2001 for being filed out of time. [20]
WHEREFORE, premises considered, the plaintiff's motion for
reconsideration is hereby granted. Accordingly, the Decision, dated August Meanwhile, the appeal filed by Sta. Lucia and Cainta was raffled to the
10, 1998 is hereby modified in that the defendant is hereby ordered to pay (former) Seventh Division of the Court of Appeals and docketed as CA-G.R.
plaintiff the amount of P5,627,757.07 representing the unpaid taxes and CV No. 69603. On June 30, 2004, the Court of Appeals rendered its
penalties on the improvements on the subject parcels of land whereon real Decision, wherein it agreed with the RTC's judgment:
estate taxes are adjudged as due for the year 1996. [16]

Accordingly, Sta. Lucia filed an Amended Notice of Appeal to include the

WHEREFORE, the appealed Decision is hereby AFFIRMED with
the MODIFICATION that the award of P50,000.00 attorney's fees THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
is DELETED. [21] PAYMENT OF REALTY TAXES THROUGH THE MUNICIPALITY OF CAINTA
WAS VALID PAYMENT OF REALTY TAXES
In affirming the RTC, the Court of Appeals declared that there was no
proper legal basis to suspend the proceedings. [22] Elucidating on the legal IV.
meaning of a "prejudicial question," it held that "there can be no
prejudicial question when the cases involved are both civil." [23] The Court THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT IN
of Appeals further held that the elements of litis pendentia and forum THE MEANTIME THAT THE BOUNDARY DISPUTE CASE IN ANTIPOLO CITY
shopping, as alleged by Cainta to be present, were not met. REGIONAL TRIAL COURT IS BEING FINALLY RESOLVED, THE PETITIONER
STA. LUCIA SHOULD BE PAYING THE REALTY TAXES ON THE SUBJECT
Sta. Lucia and Cainta filed separate Motions for Reconsideration, which the PROPERTIES THROUGH THE INTERVENOR CAINTA TO PRESERVE THE
Court of Appeals denied in a Resolution dated January 27, 2005. STATUS QUO.[25]

Undaunted, Sta. Lucia and Cainta filed separate Petitions for Certiorari with Pasig, countering each error, claims that the lower courts correctly decided
this Court. Cainta's petition, docketed as G.R. No. 166856 was denied on the case considering that the TCTs are clear on their faces that the subject
April 13, 2005 for Cainta's failure to show any reversible error. Sta. Lucia's properties are situated in its territorial jurisdiction. Pasig contends that the
own petition is the one subject of this decision. [24] principles of litis pendentia, forum shopping, and res judicata are all
inapplicable, due to the absence of their requisite elements. Pasig
In praying for the reversal of the June 30, 2004 judgment of the Court of maintains that the boundary dispute case before the Antipolo RTC is
Appeals, Sta. Lucia assigned the following errors: independent of the complaint for collection of realty taxes which was filed
before the Pasig RTC. It avers that the doctrine of "prejudicial question,"
ASSIGNMENT OF ERRORS which has a definite meaning in law, cannot be invoked where the two
cases involved are both civil. Thus, Pasig argues, since there is no legal
I ground to preclude the simultaneous hearing of both cases, the suspension
of the proceedings in the Pasig RTC is baseless.
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING [WITH
MODIFICATION] THE DECISION OF THE REGIONAL TRIAL COURT IN PASIG Cainta also filed its own comment reiterating its legal authority over the
CITY subject properties, which fall within its territorial jurisdiction. Cainta
claims that while it has been collecting the realty taxes over the subject
II. properties since way back 1913, Pasig only covered the same for real
property tax purposes in 1990, 1992, and 1993. Cainta also insists that
THE HONORABLE COURT OF APPEALS ERRED IN NOT SUSPENDING THE there is a discrepancy between the locational entries and the technical
CASE IN VIEW OF THE PENDENCY OF THE BOUNDARY DISPUTE WHICH WILL descriptions in the TCTs, which further supports the need to await the
FINALLY DETERMINE THE SITUS OF THE SUBJECT PROPERTIES settlement of the boundary dispute case it initiated.

III.
The errors presented before this Court can be narrowed down into two
basic issues: xxxx

1) Whether the RTC and the CA were correct in deciding Pasig's Complaint Sec. 57. Collection of tax to be the responsibility of treasurers. -- The
without waiting for the resolution of the boundary dispute case between collection of the real property tax and all penalties accruing thereto, and
Pasig and Cainta; and the enforcement of the remedies provided for in this Code or any
applicable laws, shall be the responsibility of the treasurer of the province,
2) Whether Sta. Lucia should continue paying its real property taxes to city or municipality where the property is situated. (Emphases ours.)
Cainta, as it alleged to have always done, or to Pasig, as the location stated
in Sta. Lucia's TCTs. This requisite was reiterated in Republic Act No. 7160, also known as the
1991 the Local Government Code, to wit:
We agree with the First Division of the Court of Appeals in CA-G.R. SP No.
52874 that the resolution of the boundary dispute between Pasig and Section 201. Appraisal of Real Property. - All real property, whether
Cainta would determine which local government unit is entitled to collect taxable or exempt, shall be appraised at the current and fair market value
realty taxes from Sta. Lucia. [26] prevailing in the locality where the property is situated. The Department
of Finance shall promulgate the necessary rules and regulations for the
The Local Government Unit entitled classification, appraisal, and assessment of real property pursuant to the
To Collect Real Property Taxes provisions of this Code.

The Former Seventh Division of the Court of Appeals held that the Section 233. Rates of Levy. - A province or city or a municipality within the
resolution of the complaint lodged before the Pasig RTC did not Metropolitan Manila Area shall fix a uniform rate of basic real property tax
necessitate the assessment of the parties' evidence on the metes and applicable to their respective localities as follows: x x x. (Emphases ours.0)
bounds of their respective territories. It cited our ruling in Odsigue v. Court
of Appeals [27] wherein we said that a certificate of title is conclusive The only import of these provisions is that, while a local government unit is
evidence of both its ownership and location. [28] The Court of Appeals even
authorized under several laws to collect real estate tax on properties
referred to specific provisions of the 1991 Local Government Code and Act.
falling under its territorial jurisdiction, it is imperative to first show that
No. 496 to support its ruling that Pasig had the right to collect the realty these properties are unquestionably within its geographical boundaries.
taxes on the subject properties as the titles of the subject properties show
on their faces that they are situated in Pasig. [29]
Accentuating on the importance of delineating territorial boundaries, this
Court, in Mariano, Jr. v. Commission on Elections [30] said:
Under Presidential Decree No. 464 or the "Real Property Tax Code," the
authority to collect real property taxes is vested in the locality where the
property is situated: The importance of drawing with precise strokes the territorial boundaries
of a local unit of government cannot be overemphasized. The
boundaries must be clear for they define the limits of the territorial
Sec. 5. Appraisal of Real Property. -- All real property, whether taxable or
jurisdiction of a local government unit. It can legitimately exercise
exempt, shall be appraised at the current and fair market value prevailing powers of government only within the limits of its territorial
in the locality where the property is situated.
jurisdiction. Beyond these limits, its acts are ultra vires. Needless to
state, any uncertainty in the boundaries of local government units will sow be acting beyond the powers vested to it by law.
costly conflicts in the exercise of governmental powers which ultimately
will prejudice the people's welfare. This is the evil sought to be avoided by Certificates of Title as
the Local Government Code in requiring that the land area of a local Conclusive Evidence of Location
government unit must be spelled out in metes and bounds, with technical
descriptions. [31] (Emphasis ours.) While we fully agree that a certificate of title is conclusive as to its
ownership and location, this does not preclude the filing of an action for
the very purpose of attacking the statements therein. In De Pedro v.
The significance of accurately defining a local government unit's
boundaries was stressed in City of Pasig v. Commission on Romasan Development Corporation, [34] we proclaimed that:
Elections, [32] which involved the consolidated petitions filed by the parties
herein, Pasig and Cainta, against two decisions of the Commission on We agree with the petitioners that, generally, a certificate of title shall be
Elections (COMELEC) with respect to the plebiscites scheduled by Pasig for conclusive as to all matters contained therein and conclusive evidence of
the ratification of its creation of two new Barangays. Ruling on the the ownership of the land referred to therein. However, it bears stressing
contradictory reliefs sought by Pasig and Cainta, this Court affirmed the that while certificates of title are indefeasible, unassailable and binding
COMELEC decision to hold in abeyance the plebiscite to ratify the creation against the whole world, including the government itself, they do not
of Barangay Karangalan; but set aside the COMELEC's other decision, and create or vest title. They merely confirm or record title already existing and
nullified the plebiscite that ratified the creation of Barangay Napico in vested. They cannot be used to protect a usurper from the true owner, nor
Pasig, until the boundary dispute before the Antipolo RTC had been can they be used as a shield for the commission of fraud; neither do they
resolved. The aforementioned case held as follows: permit one to enrich himself at the expense of other. [35]

1. The Petition of the City of Pasig in G.R. No. 125646 is In Pioneer Insurance and Surety Corporation v. Heirs of Vicente
DISMISSED for lack of merit; while Coronado, [36] we set aside the lower courts' ruling that the property
subject of the case was not situated in the location stated and described in
2. The Petition of the Municipality of Cainta in G.R. No. the TCT, for lack of adequate basis. Our decision was in line with the
128663 is GRANTED. The COMELEC Order in UND No. 97- doctrine that the TCT is conclusive evidence of ownership and
002, dated March 21, 1997, is SET ASIDE and the location. However, we refused to simply uphold the veracity of the
plebiscite held on March 15, 1997 to ratify the creation disputed TCT, and instead, we remanded the case back to the trial court
of Barangay Napico in the City of Pasig is declared null for the determination of the exact location of the property seeing that it
and void. Plebiscite on the same is ordered held in was the issue in the complaint filed before it. [37]
abeyance until after the courts settle with finality the
boundary dispute between the City of Pasig and the In City Government of Tagaytay v. Guerrero, [38] this Court reprimanded the
Municipality of Cainta, in Civil Case No. 94-3006. [33] City of Tagaytay for levying taxes on a property that was outside its
territorial jurisdiction, viz:

Clearly therefore, the local government unit entitled to collect real In this case, it is basic that before the City of Tagaytay may levy a certain
property taxes from Sta. Lucia must undoubtedly show that the subject property for sale due to tax delinquency, the subject property should be
properties are situated within its territorial jurisdiction; otherwise, it would under its territorial jurisdiction. The city officials are expected to know
such basic principle of law. The failure of the city officials of Tagaytay to boundary dispute case presented a prejudicial question and explained our
verify if the property is within its jurisdiction before levying taxes on the statement in this wise:
same constitutes gross negligence. [39] (Emphasis ours.)
To begin with, we agree with the position of the COMELEC that Civil Case
Although it is true that "Pasig" is the locality stated in the TCTs of the No. 94-3006 involving the boundary dispute between the Municipality of
subject properties, both Sta. Lucia and Cainta aver that the metes and Cainta and the City of Pasig presents a prejudicial question which must
bounds of the subject properties, as they are described in the TCTs, reveal first be decided before plebiscites for the creation of the
that they are within Cainta's boundaries. [40] This only means that there proposed barangaysmay be held.
may be a conflict between the location as stated and the location as
technically described in the TCTs. Mere reliance therefore on the face of The City of Pasig argues that there is no prejudicial question since the same
the TCTs will not suffice as they can only be conclusive evidence of the contemplates a civil and criminal action and does not come into play
subject properties' locations if both the stated and described locations where both cases are civil, as in the instant case. While this may be the
point to the same area. general rule, this Court has held in Vidad v. RTC of Negros
Oriental, Br. 42, that, in the interest of good order, we can very well
The Antipolo RTC, wherein the boundary dispute case between Pasig and suspend action on one case pending the final outcome of another case
Cainta is pending, would be able to best determine once and for all the closely interrelated or linked to the first.
precise metes and bounds of both Pasig's and Cainta's respective territorial
jurisdictions. The resolution of this dispute would necessarily ascertain the In the case at bar, while the City of Pasig vigorously claims that the areas
extent and reach of each local government's authority, a prerequisite in covered by the proposed Barangays Karangalan and Napico are within its
the proper exercise of their powers, one of which is the power of territory, it cannot deny that portions of the same area are included in the
taxation. This was the conclusion reached by this Court in City of Pasig v. boundary dispute case pending before the Regional Trial Court of
Commission on Elections, [41] and by the First Division of the Court of Antipolo. Surely, whether the areas in controversy shall be decided as
Appeals in CA-G.R. SP No. 52874. We do not see any reason why we within the territorial jurisdiction of the Municipality of Cainta or the City of
cannot adhere to the same logic and reasoning in this case. Pasig has material bearing to the creation of the proposed Barangays
Karangalan and Napico. Indeed, a requisite for the creation of
The "Prejudicial Question" Debate a barangay is for its territorial jurisdiction to be properly identified by
metes and bounds or by more or less permanent natural
It would be unfair to hold Sta. Lucia liable again for real property taxes it boundaries. Precisely because territorial jurisdiction is an issue raised in
already paid simply because Pasig cannot wait for its boundary dispute the pending civil case, until and unless such issue is resolved with finality,
with Cainta to be decided. Pasig has consistently argued that the boundary to define the territorial jurisdiction of the proposed barangays would only
dispute case is not a prejudicial question that would entail the suspension be an exercise in futility. Not only that, we would be paving the way for
of its collection case against Sta. Lucia. This was also its argument in City of potentially ultra vires acts of such barangays. x x x. [43](Emphases ours.)
Pasig v. Commission on Elections, [42] when it sought to nullify the
COMELEC's ruling to hold in abeyance (until the settlement of the It is obvious from the foregoing, that the term "prejudicial question," as
boundary dispute case), the plebiscite that will ratify its creation appearing in the cases involving the parties herein, had been used
of Barangay Karangalan. We agreed with the COMELEC therein that the loosely. Its usage had been more in reference to its ordinary meaning,
than to its strict legal meaning under the Rules of Court. [44] Nevertheless,
even without the impact of the connotation derived from the term, our abeyance the proceedings in Civil Case No. 65420, in view of the fact that
own Rules of Court state that a trial court may control its own proceedings the outcome of the boundary dispute case before the Antipolo RTC will
according to its sound discretion: undeniably affect both Pasig's and Cainta's rights. In fact, the only reason
Pasig had to file a tax collection case against Sta. Lucia was not that Sta.
POWERS AND DUTIES OF COURTS AND JUDICIAL OFFICERS Lucia refused to pay, but that Sta. Lucia had already paid, albeit to another
Rule 135 local government unit. Evidently, had the territorial boundaries of the
contending local government units herein been delineated with accuracy,
SEC. 5. Inherent powers of courts. - Every court shall have power: then there would be no controversy at all.

xxxx In the meantime, to avoid further animosity, Sta. Lucia is directed to

deposit the succeeding real property taxes due on the subject properties,
(g) To amend and control its process and orders so as to make them in an escrow account with the Land Bank of the Philippines.
comformable to law and justice.
WHEREFORE, the instant petition is GRANTED. The June 30, 2004 Decision
and the January 27, 2005 Resolution of the Court of Appeals in CA-G.R. CV
Furthermore, we have acknowledged and affirmed this inherent power in No. 69603 are SET ASIDE. The City of Pasig and the Municipality of Cainta
our own decisions, to wit: are both directed to await the judgment in their boundary dispute case
(Civil Case No. 94-3006), pending before Branch 74 of the Regional Trial
The court in which an action is pending may, in the exercise of a sound Court in Antipolo City, to determine which local government unit is
discretion, upon proper application for a stay of that action, hold the entitled to exercise its powers, including the collection of real property
action in abeyance to abide the outcome of another pending in another taxes, on the properties subject of the dispute. In the meantime, Sta. Lucia
court, especially where the parties and the issues are the same, for there is Realty and Development, Inc. is directed to deposit the succeeding real
power inherent in every court to control the disposition of causes (sic) on property taxes due on the lots and improvements covered by TCT Nos.
its dockets with economy of time and effort for itself, for counsel, and for 532250, 598424, 599131, 92869, 92870 and 38457 in an escrow account
litigants. Where the rights of parties to the second action cannot be with the Land Bank of the Philippines.
properly determined until the questions raised in the first action are
settled the second action should be stayed. SO ORDERED.

The power to stay proceedings is incidental to the power inherent in every

court to control the disposition of the cases on its dockets, considering its Velasco, Jr.,* (Acting Chairperson), Bersamin,** Del Castillo, and Perez, JJ.,
time and effort, that of counsel and the litigants. But if proceedings must concur.
be stayed, it must be done in order to avoid multiplicity of suits and
prevent vexatious litigations, conflicting judgments, confusion between
litigants and courts. It bears stressing that whether or not the RTC would
suspend the proceedings in the SECOND CASE is submitted to its sound
discretion. [45]

In light of the foregoing, we hold that the Pasig RTC should have held in