Republic of the Philippines SUPREME COURT Manila THIRD DIVISION EMERLINDA S. TALENTO, in her capacity as the Provincial Treasurer of the Province of Bataan, Petitioner, ~ versus - GR. No. 180884 HON. REMIGIO M. ESCALADA, JR, Presiding Judge of the Regional Trial Court of Bataan, Branch 3, PETRON CORPORATION, Respondents. MOTION FOR LEAVE TO ADMIT ATTACHED REPLY TO COMMENT PETITIONER PROVINCIAL TREASURER OF THE PROVINCE OF BATAAN, EMERLINDA S. TALENTO, through the undersigned Provincial Legal Officer, respectfully moves for leave of this Honorable Court to admit the attached petitioner's Reply to the Comment of Respondent Petron Corporation (“Petron”) dated 06 March 2008 in the instant case and further avers that:‘Motion for Leave to Admit Attached Page 2 of 4 Reply to Comment Talento, etc. vs. Hon. Escalada, etc,, et al. G.R. No. 180884 Third Division, Supreme Court 1. On 13 March 2008, herein petitioner received a copy of Respondent Petron’s Comment dated 06 March 2008. In the said Comment, Petron raised some arguments that need to be addressed by herein petitioner; 2. Petitioner thus, respectfully moves for leave of this Honorable Court to admit the attached Reply to Comment considering that she has not yet received any resolution from this Honorable Court pertaining to the said Comment of Petron; Petitioner is filing this Motion for Leave to Admit the Attached Reply to Comment to facilitate the resolution of this petition and not to delay its proceedings. WHEREFORE, in view of the foregoing, it is respectfully prayed that Petitioner Provincial Treasurer of Bataan, be given leave of Court to file her Reply to Petron’s Comment and that the attached Reply to Comment be admitted and noted by this Honorable Court.Motion for Leave to Admit Attached Page 3 of 4 Reply to Comment Talento, etc. vs. Hon. Escalada, etc,, et al. G.R. No, 180884 Third Division, Supreme Court Other relief and remedies just and equitable under the premises are likewise prayed for. 28 May 2008, Balanga City for Manila. Z AURELIO C. ANGELES, JR. Provincial Legal Officer Capitol Compound, Balanga City 2100 Bataan PTR No. 6145051K; 1/3/08, Balanga IBP Life Member No. 00142, 1/3/96 Roll No. 38928 COPY FURNISHED, NOTICE OF HEARING AND EXPLANATION Atty. GENER E. ASUNCION BELO GOZON ELMA PAREL ASUNCION é LUCILA Counsel for Petron 15t* Floor, Sagittarius Condominium H.V. Dela Costa St,, Salcedo Village Makati City Hon. REMIGIO M. ESCALADA, JR. Presiding Judge The Regional Trial Court Branch 3 (RTC Civil Case No. 8801) Balanga City, BataanMotion for Leave to Admit Attached Page 4 of 4 Reply to Comment Talento, etc. vs. Hon. Escalada, etc, etal. G.R. No, 180884 Third Division, Supreme Court x ‘THE CLERK OF COURT Third Division, Supreme Court Padre Faura St., Ermita Manila Ieee ees eeaaeee eee Kindly submit the foregoing Motion for Leave to Admit Attached Reply to Comment for the consideration of the Honorable Court immediately upon receipt hereof. In compliance with Rule 13 of the 1997 Rules of Civil Proceduié; counsel respectfully manifests that the filing and service of the foregoing Motion for Leave to Admit Attached Reply to Comment are being done by registered mail, personal. service not being practicable due to distance, time and personnel constraints. AURELIO C, ANGELES, JR.Republic of the Philippines ) Balanga City, Bataan )ss. AFFIDAVIT OF SERVICE 1, EFREN P. BAUTISTA, of legal age, an employee of the Provincial Legal Office, Provincial Government of Bataan, with office address at Provincial Capitol Compound, Balanga City, Bataan, after having been duly sworn to in accordance with law hereby depose and say that: ‘This day, 29 May 2008, I delivered thru registered mail copies of the Motion for Leave to Admit Attached Reply to Comment in the case of EMERLINDA S. TALENTO, in her capacity as the Provincial Treasurer of the Province of Bataan vs. HON. REMIGIO M. ESCALADA, JR., Presiding Judge of the Regional Trial Court of Bataan, Branch 3, PETRON CORPORATION, G. R. No. 180884 with instructions to the postmaster to return the mail within ten (10) days if undelivered to the following with the corresponding registry receipts: Atty. GENER E. ASUNCION Reg. Receipt # 607 25 BELO GOZON ELMA PAREL May 29, 2008 ASUNCION & LUCILA Abpasila P.O. Counsel for Petron 15% Floor, Saguittarius Condominium HL. Dela Costa St., Salcedo Village Makati City HON. REMEGIO M. ESCALADA, JR. Reg. Receipt # LO BIBL Presiding Judge May 29, 2008 The Regional Trial Court Monica FO Branch 3 (RTC Civil Case No. 8801) Balanga City, Bataan AFFIANT FURTHER SAYETH NAUGHT. SUBSCRIBED AND SWORN to before me this 24 day of May 2008 at BALANGA CITY BATAAN assiant exhibiting to me his CTC No. 20082226 issued on January 04, 2008 at Balanga City, Bataan. NOTARY PUBLIC Doc. No. 293 Page No. _7@ Book No, _X¥ Series of 2008.Republic of the Philippines SUPREME COURT Manila THIRD DIVISION EMERLINDA S. TALENTO, in her capacity as the Provincial Treasurer of the Province of Bataan, Petitioner, - versus - GR. No. 180884 HON. REMIGIO M. ESCALADA, JR., Presiding Judge of the Regional ‘Trial Court of Bataan, Branch 3, PETRON CORPORATION, Respondents. REPLY TO COMMENT PETITIONER PROVINCIAL TREASURER OF THE PROVINCE OF BATAAN, EMERLINDA S. TALENTO, through the undersigned Provincial Legal Officer, begging leave of this Court, respectfully submits this Reply to the Comment of Respondent Petron Corporation (“Petron”) dated 06 March 2008 in the above- captioned case as follows:Reply to comment @ @ Page 2 of 16 Talento, etc. vs. Hon. Escalada, etc,, et al. G.R. No. 180884 Third Division, Supreme Court The instant __ Petition Certiorari, Prohibition and Mandamus under Rule 65_is_the proper remedy against the Order of the Respondent Judge granting the ___Writ___of ___ Preliminary Injunction. 1. Respondent Petron, in its Comment dated 06 March 2008, alleged that the instant Petition for Certiorari, Prohibition and Mandamus is an erroneous mode of appeal, because the proper mode is Rule 45 for the filing of a petition for review.' It should be noted that the subject of the instant petition is the Order of the Respondent Judge in Civil Case No. 8801 dated 05 November 2007? which granted the issuance of a Writ of Preliminary Injunction. 1.01. It is so disturbing that Respondent Petron missed an elementary rule on procedure and failed to distinguish between a final order subject to a petition for review on certiorari under Rule 45 and an interlocutory order subject to a special civil action for certiorari under Rule 65. In fact, the principle is so basic, that it is almost P. 8, Petron’s Comment dated 06 March 2008. 2 Annex “A” of the Petition for Certiorari, Prohibition and Mandamus dated 03 January 2008.Reply to Comment e e Page 3 of 16 Talento, etc. vs. Hon. Escalada, etc, et al. G.R. No. 180884 Third Division, Supreme Court eee embarrassing to discuss this issue before this Honorable Court. Nevertheless, for the education of respondent's counsel, the pronouncement of this Honorable Court in the case of Land Bank of the Philippines vs. Listana, Sr. is enlightening, thus: “As regards the first issue, petitioner submits that the special civil action for certiorari filed by respondent before the Court of Appeals to nullify the injunction issued by the trial court was improper, considering that the preliminary injunction issued by the trial court was a final order which is appealable to the Court of Appeals via a notice of appeal. Petitioner's submission is untenable. Generally, injunction is a preservative remedy for the protection of one’s substantive right or interest. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. Thus, it has been held that an order granting a writ of preliminary injunction is an interlocutory order. As distinguished from a final order which disposes of the subject matter in its entirety or terminates a particular proceeding or action, leaving nothing else to be done but to enforce by execution what has been determined by the court, an interlocutory order does not dispose of a case completely, but leaves something more to be adjudicated upon. 3G.R. No, 152611, 05 August 2003.Reply to Comment e e Page 4 of 16 Talento, etc. vs. Hon. Escalada, etc., et al. GR. No, 180884 Third Division, Supreme Court 4 Tbid. Clearly, the grant of a writ of preliminary injunction is in the nature of an interlocutory order, hence, unappealable. Therefore, respondent's special civil action for certiorari before the Court of Appeals was the correct remedy under the circumstances. Certiorari is available where there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. The order granting a writ of preliminary injunction is an interlocutory order; as such, it cannot by itself be subject of an appeal or a petition for review on certiorari. The proper remedy of a party aggrieved by such an order is to bring an ordinary appeal from an adverse judgment in the main case, citing therein the grounds for assailing the interlocutory order. However, the party concerned may file a petition for certiorari where the assailed order is patently erroneous and appeal would not afford adequate and expeditious relief.” 1.02. Perhaps it will also help counsel for Respondent Petron to distinguish between an interlocutory order and a final order and thus determine the proper remedy therefor, to be reminded that in the proceedings below, herein Respondent Judge Escalada, on 18 January 2008 issued an Order suspending the proceedings in Civil Case No. 8801 “in deference to theReply to Comment. Talento, etc. vs. Hon. Escalada, etc, et al. G.R. No. 180884 Third Division, Supreme Court Page 5 of 16 Supreme Court where the Orders of October 15 and November 5, 2007 had been questioned on certiorari.” A copy of said Order is hereto attached as Annex “A-Reply” and made an integral part hereof. A surety bond does not operate to stay collection of real estate tax deficiencies. 2. The focus of Petron’s theory of the case is that the approvals by the Central Board of Assessment Appeals (“CBAA”) of its surety bond in the amount of P1,286,057,899.54 and by Respondent Judge Escalada of another surety bond for the issuance of the subject preliminary injunction in the amount of P444,967,503.32 operate as an automatic stay of the auction sale and collection of ‘its real estate tax deficiencies. In support thereof, Petron argues that “the posting of a surety bond in lieu of payment under protest in cases of appeal from assessments has been long established” in both the CBAA and Local Board of Assessment Appeals Rules of Procedure. Petron went on to invoke Sec. 7, Rule V of the Rules of Procedure of the LBAA. Thus: 5 34 paragraph, p. 17, Petron’s Comment dated 06 March 2008.Reply to Comment Page 6 of 16 Talento, etc. vs. Hon. Escalada, etc,, et al. G.R. No, 180884 Third Division, Supreme Court “As above-stated, the posting of the surety bond in lieu of payment under protest in cases of appeal from assessments has been long established by the Central Board of Assessment Appeals in its Rules of Procedure and in the Local Board of Assessment Appeals Rules of Procedure which were promulgated by the Central Board of Assessment Appeals pursuant to Sec. 230 of the Local Government Code: ‘The Central Board of Assessment Appeals, in the performance of its power and duties, may x x x adopt its own rules and regulations.’ Sec. 7, Rule V of the Rules of __ Procedure of the Local Board of Assessment Appeals provides: ‘Section 7. Effect of Appeal of 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 the 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 been paid under protest or the petitioner shall have given a surety bond, subject to the following conditions:Reply to Comment e e Page 7 of 16 Talento, etc. vs. Hon. Escalada, etc., et al G.R. No, 180884 Third Division, Si 3. Significantly, Sec. 7 starts with the general proposition that an “appeal shall not suspend the collection of taxes’, “without prejudice to the subsequent adjustment depending on the outcome of the appeal.” 3.01. However, a hearing on the appeal will not follow as a matter of course since Sec. 7 states that for a hearing on the appeal to proceed, the taxpayer has two options: First, pay the deficiency assessment under protest; or Second, post a surety bond. For emphasis, we reproduce again the pertinent portion of Sec. 7: “x x x. 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 been paid under protest or the petitioner shall have givena surety bond, x x x.”Reply to comment e Page 8 of 16 Talento, etc. vs. Hon. Escalada, etc., et al. G.R. No. 180884 Third Division, Supreme Court ae 3.02. Clearly, nowhere in the above-mentioned provision, relied upon by Petron, does it state that the posting and approval by the CBAA of a surety bond has the effect of staying the collection of deficiency taxes and, as a necessary consequence, the auction sale of the levied properties, If it were so - i.e, that the rules of procedure adopted by the CBAA provide that the posting and approval of a surety bond has the effect of staying the collection of deficiency taxes - then said provision of the rules of procedure would be an ultra vires act of CBAA for being contrary to the Local Government Code which explicitly provides in Sections 231 and 2527 that taxes should be paid, albeit under protest, prior to any appeal or protest thereon by the taxpayer. 7 “SEC. 231. Effect of Appeal on the Payment of Real Property Tax. ~ Appeal on assessments of real property made under the provisions of this Code shall, in no case, suspend the collection of the corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without prejudice to subsequent adjustment depending upon the final outcome of the appeal.” “SEC. 252. Payment Under Protest. - (a) No protest shall be entertained unless the taxpayer first pays the tax. There shall be annotated on the tax receipts the words ‘paid under protest’. x x x“Reply to Comment e e@ Page 9 of 16 Talento, etc. vs, Hon. Escalada, etc, et al. G.R. No. 180884 Third Division, Supreme Court 4. Petron invokes Sec. 254 of the Local Government Code. According to Petron, under this provision, once a notice of assessment or special levy is contested administratively or judicially, the delinquent real property cannot be sold at public auction.* 4.01. First and foremost, Sec. 254 provides that the Notice of Delinquency in the Payment of Real Property should mention that delinquent real property cannot be sold at public auction once the notice of assessment or special levy is contested administratively or judicially because such an administrative or judicial contestalready necessitates the payment under protest of the taxes due as provided in the Sections 231 and 252. Such payment under protest necessarily precludes the public auction of the real property involved. There is absolutely no provision in the Local Government Code that provides that a surety bond can be posted in lieu of payment under protest and thereby precludes the public auction of the delinquent properties. To declare so, will be a big blow in 8 Par, 1, p. 16, Petron’s Comment dated 06 March 2008.Reply to Comment Talento, etc. vs. Hon. Escalada, etc, et al. G.R. No. 180884 Third Division, Supreme Court Page 10 of 16 the revenue collection efforts of all local government units. Thus: “xxx taxes are the lifeblood of the nation and as such their collection cannot be curtailed by injunction or any like action, otherwise, the state, or, in this case, the local government unit, shall be crippled in dispensing the needed services to the people, and its machinery gravely disabled.” 4.02. Moreover, Petron, apparently, misread Sec. 254, Looking at the subject-matter of Sec. 254 alone, to wit: “Notice of Delinquency in the Payment’ of Real Property Tax”, it can readily be seen that this provision merely addresses the following issues, to wit: First, when can a notice of real property tax delinquency be issued, posted and/or published? Second, who is mandated to issue such notice? Third, where should such notice be posted and published? And, fourth, what should the aforementioned notice contain? Thus: “Section 254. Notice of Delinquency in the Payment of Real Property Tax. (a) When ° Manila Electric Company vs. Nelia A. Barlis, etc, G.R. No. 114231, 18 May 2001.Reply to Comment Page 11 of 16 Talento, etc. vs. Hon, Escalada, etc, et al. G.R. No, 180884 Third Division, Supreme Court the real property tax or any other tax imposed under this Title becomes delinquent, the provincial, city or municipal treasurer shall immediately cause a notice of the delinquency to be posted at the main entrance of the provincial capitol, or city or municipal hall and in a publicly accessible and conspicuous place in each barangay of the local government unit concerned. The notice of publication shall also be published once a week for two (2) consecutive weeks, in a newspaper of general circulation in the province, city or municipality. (b) The notice shall specify the date upon which the tax became delinquent and shall state that personal property may be distrained to effect payment. x x x”. 4.03. Sec. 254, therefore, even conceding that it is a later provision (in relation to Sec. 231 and 252 of the Local Government Code) has no bearing on the issue of whether Petron’s appeal can suspend the collection of deficiency real estate taxes. On the contrary, Sec. 256 [quoted verbatim in the Comment - page 16] states that the local government concerned may avail of the administrative remedy of levy of real property of the delinquent taxpayer to enforce collection. Thus -Reply to comment e Page 12 of 16 Talento, etc. vs. Hon. Escalada, etc, et al G.R. No, 180884 Third Division, Supreme Court “SEC. 256. Remedies for the Collection of Real Property Tax. - For the collection of the basic real property tax and other tax levied under this Title, the local government unit concerned may avail of the remedies by administrative action thru levy on real property or by judicial action”. 5. Next, citing Collector vs. Avelino,!° Petron argues that “(w)hat is prohibited is the suspension of the collection of the corresponding realty taxes but not the manner in which the collection is being carried out.”" 5.01, To reiterate, an injunction against the enforcement of distraint and levy in Avelino was upheld because the assessment was made beyond the period of prescription. Hence, the subsequent distraint and levy, made on the basis of assessment that had prescribed, was null and void. 5.02. In the case of Petron, however, it sought to enjoin the auction sale - not because the distraint and 19 100 Phil. 327, ™ P. 17, Petron’s Comment dated 06 March 2008.Reply to commen e Page 13 of 16 Talento, etc. vs. Hon. Escalada, etc,, et al. G.R. No. 180884 ‘Third Division, Supreme Court levy over its properties was illegal or has prescribed - but on account of the erroneous legal premise that its appeal, supported by a surety bond approved by the CBAA, operates to automatically stay the collection deficiency taxes through an auction sale. Of course, such is not the case. 6. Additionally, Respondent Petron, up to this point, has never accounted for the huge discrepancies between the higher acquisition costs contained in the data it has recently submitted to the Provincial Government of Bataan and the previous sworn declarations it submitted which became the basis for the real property tax payments it made. Otherwise stated, Petron could not point out any specific errors in the said tax assessments and the computation of deficiency realty taxes, except for general allegations before the LBAA, the CBAA and the RTC that the said assessments were erroneous and excessive. To emphasize, at the risk of redundancy, the acquisition costs that were used for the assessment of deficiencies in real property tax payments subject of the instantReply to commer e Page 14 of 16 Talento, etc. vs. Hon. Escalada, etc, et al. GR. No, 180884 Third Division, Supreme Court petition came from no other than Respondent Petron itself, and the latter has never disavowed the same. 6.01, Clearly, Petron is just using all legal, albeit dilatory, tactics available to further delay the payment, and continue to deprive the Provincial Government of Bataan, other local government units as well as the school boards concerned, of the rightful taxes due them since 1994. It should be mentioned that the issue here not only involves the immediate payment of the rightful taxes due from Petron since 1994, but the far-reaching consequences in the revenue collection of all local government units in the country. Needless to say, the explicit provision of the Local Government Code for the collection of local taxes pending appeal is not without rhyme or reason. WHEREFORE, premises considered, it is respectfully prayed of this Honorable Court that the instant Petition for Certiorari, Prohibition and Mandamus be given due course and thereafter render judgment:Reply to commen e Page 15 of 16 Talento, etc. vs. Hon. Escalada, etc., et al G.R. No. 180884 Third Division, 1. ANNULLING AND SETTING ASIDE the Order dated 05 November 2007 of the Regional Trial Court of Bataan, Branch 3, through its Presiding Judge, the Hon. Remigio M. Escalada Jr., in Civil Case No. 8801, for having been issued without or in excess of jurisdiction and with grave abuse of discretion amounting to lack or excess of jurisdiction; 2. Permanently enjoining the public respondent from further proceeding with Civil Case No. 8801; and 3. Directing the public respondent to dismiss Civil Case No. 8801 immediately. 28 May 2008, Balanga City for Manila. oe QO | AURELIO C. ANGELES, JR. Provincial Legal Officer Capitol Compound, Balanga City 2100 Bataan PTR No. 6145051K; 1/3/08, Balanga IBP Life Member No. 00142, 1/3/96 Roll No. 38928Talento, etc. vs. Hon. Escalada, etc., et al. G.R. No. 180884 Third Division, Supreme Court = Reply to on) e Page 16 of 16 Copy furnished: Atty. GENER E. ASUNCION BELO GOZON ELMA PAREL ASUNCION & LUCILA Counsel for Petron 15t* Floor, Sagittarius Condominium HL. Dela Costa St, Salcedo Village Makati City Hon. REMIGIO M. ESCALADA, JR. Presiding Judge The Regional Trial Court Branch 3 (RTC Civil Case No. 8801) Balanga City, Bataan EXPLANATION In compliance with Rule 13 of the 1997 Rules of Civil Procedure, counsel respectfully manifests that the filing and service of the foregoing Reply to Comment are being done by registered mail, personal service not being practicable due to distance, time and personnel constraints. EZ AD? 7 AURELIO C. ANGELES, JR.Republic of the Philippines Suprene Court REGIONAL TRIAL COURT OF BATAAN Third Judiciel Region Branch Balanga City, Batean ANNEX i-2ny’ PSTRON CORPORATION, Plaintize, versus CIVIL CAS* NO, S801 ‘EMERLINDA FALENTO, in her _ as Provinelal Treasurer the Prevince of Bataan, endant. ete oe eleetsie te ol), In deferente to the Supreme Court where the Orders of Cctober 15 ani November 5, 2007 had been questioned on certiorari, the proceedings in this ease are suspended, S80 ORDERED. an in opén court this 18th day of January 2008 at Seelange City, Bataan, REMEGIO’N, FSCALAMA, IR. Judge sARM, PROVINCIAL LEGAL OFFICE PROVINCE OF BATAAN