Hydro Resources Contractors Corp. v. Provincial Government of Isabela
REITERATIONFacts
The Antecedents: Petitioner Hydro Resources Contractors Corporation (Hydro) entered into a contract with the National Irrigation Administration (NIA) for the construction of the Magat River Multi-Purpose Project. Subsequently, the Provincial Government of Isabela and the Municipality of Ramon, Isabela, filed a civil case against Hydro for the collection of realty taxes over properties Hydro acquired, possessed, and used in connection with the project. Procedural History: The Regional Trial Court (RTC) of Echague, Isabela, in an Order dated August 6, 1983, ruled that Hydro was liable for realty taxes but that the amount was to be determined in further proceedings. The case was transferred to the RTC of Santiago, Isabela. Hydro filed a motion for leave to file a third-party complaint against NIA and a motion to admit an amended answer. The RTC of Santiago admitted the third-party complaint but deferred resolution on the amended answer. Later, the RTC of Santiago, in an Order dated May 20, 1985, declared the August 6, 1983 Order as final and executory, set aside subsequent orders, and dismissed Hydro's third-party complaint against NIA. Hydro's motion for reconsideration was denied. Hydro filed a petition with the Supreme Court, which was referred to the Court of Appeals (CA). The Petition: The Court of Appeals, in a Decision dated October 30, 1987, denied Hydro's petition, ordering the RTC to receive evidence solely for determining the amount of realty taxes Hydro was liable to pay. Hydro's motion for reconsideration was denied, leading to the present petition for review before the Supreme Court.
Issue(s)
Whether the appellate court acted without or in excess of jurisdiction or with grave abuse of discretion in not finding that the order issued by the court a quo on August 6, 1983, is merely interlocutory and/or provisional in character and could not be considered as a final determination of the merits of Civil Case No. 0093. Whether the appellate court acted without or in excess of jurisdiction or with grave abuse of discretion in not finding that the said order of August 6, 1983, was abandoned or set aside through the issuance of the order of November 4, 1983, which admitted herein petitioner's third-party complaint against respondent NIA. Whether the appellate court acted without or in excess of jurisdiction or with grave abuse of discretion in not finding that the court a quo, in issuing the order of May 20, 1985, went beyond the issues presented by the parties, which act is legally impermissible, irregular and invalid.
Ruling
The petition is GRANTED. The decision of the Court of Appeals is SET ASIDE, and a new one is entered ordering the dismissal of the complaint in Civil Case No. 0093 before the Regional Trial Court of Santiago, Isabela, Branch XXI, without prejudice. No pronouncement as to costs.
Ratio Decidendi
On the nature of the August 6, 1983 Order: The Supreme Court held that the Order dated August 6, 1983, issued by the RTC of Echague, Isabela, was interlocutory and not final. This is because the dispositive portion explicitly stated that "further proceedings shall be held to determine the amount of real property taxes to be paid by the defendant corporation." Moreover, the same order acknowledged that "these are matters or questions of facts which necessitate presentation of evidence to prove or disprove them. At this stage of the proceedings, the Court can not resolve them one way or the other." An order is final if it puts an end to the matter, leaving nothing further except execution, whereas an interlocutory order is provisional and leaves substantial proceedings to be had. The August 6, 1983 Order clearly did not resolve the amount of taxes or all factual issues, thus it remained interlocutory. On the alleged abandonment of the August 6, 1983 Order: The Court found that the RTC's subsequent actions, particularly the order admitting the third-party complaint, did not necessarily abandon the August 6, 1983 Order. However, the Court emphasized that the RTC's subsequent order of May 20, 1985, which declared the August 6, 1983 Order as final and executory and dismissed the third-party complaint, was erroneous. The Court noted that the issue of whether the plaintiffs should amend their complaint to include the amount of taxes was pending, and the RTC prematurely declared the earlier order final without resolving this. On the RTC's Order of May 20, 1985: The Supreme Court ruled that the RTC, in issuing the Order of May 20, 1985, went beyond the issues presented by the parties. The primary issue was the collection of realty taxes, but the complaint failed to state the amount of taxes sought to be collected. This failure constitutes a violation of Section 3, Rule 6 of the Rules of Court, as it does not state the ultimate facts constituting the plaintiff's cause of action. The RTC should have addressed this fundamental defect, potentially dismissing the complaint motu proprio, rather than declaring the August 6, 1983 Order final and executory and dismissing the third-party complaint, which was a procedural step taken by the defendant.
Main Doctrine
A complaint for collection of realty taxes is fatally defective if it fails to state the amount of taxes sought to be collected, as this constitutes a failure to state ultimate facts constituting the plaintiff's cause of action. Consequently, any order derived from such a defective complaint is without effect. Furthermore, an order that leaves substantial proceedings to be had, such as determining the amount of taxes to be paid and resolving factual issues, is interlocutory and not final.