In 2010, the Department of Interior and Local Government and the Department of Finance (DOF) issued Joint Memorandum Circular No. 2010-01,[4] directing all local government units to implement Section 219[5] of the LGC, which requires assessors to revise the real property assessments in their respective jurisdictions every three (3) years. In the said Memorandum, the assessors were also ordered to: (a) require all owners or administrators of real properties, prior to the preparation of the revised schedule of Fair Market Values (FMV), to file sworn statements declaring the true value of their properties and the improvements thereon; and (b) comply with the DOF issuances relating to the appraisal and assessment of real properties, particularly, DOF Local Assessment Regulation No. 1-92, DOF Department Order No. 37-09 (Philippine Valuation Standards), and DOF Department Order No. 2010-10 (Mass Appraisal Guidebook).[6] Hence, given that the last reevaluation of real property assessment values in QC was made way back in 1995 under Ordinance No. SP-357, Series of 1995 (1995 Ordinance), which thus rendered the values therein outdated,[7] the QC Assessor prepared a revised schedule of FMVs and submitted it to the Sangguniang Panlungsod of QC for approval pursuant to Section 212 of the LGC.[8]
On December 5, 2016, the Sangguniang Panlungsod of QC enacted the assailed 2016 Ordinance, which: (a)approved the revised schedule of FMVs of all lands and Basic Unit Construction Cost for buildings and other structures, whether for residential, commercial, and industrial uses;[9] and (b) set the new assessment levels at five percent (5%) for residential and fourteen percent (14%) for commercial and industrial classifications.[10] The revised schedule increased the FMVs indicated in the 1995 Ordinance to supposedly reflect the prevailing market price of real properties in QC.[11] The 2016 Ordinance was approved on December 14, 2016, and pursuant to Section 6 thereof, the General Revision of Real Property Assessment for lands shall become demandable beginning January 1, 2017, while that for Buildings and other Structures shall take effect beginning 2018.[12]
On April 7, 2017, petitioner Alliance of Quezon City Homeowners' Association, Inc. (Alliance), allegedly a non-stock, non-profit corporation,[13] filed the present petition, praying that: (a) a TRO be issued to restrain the implementation of the 2016 Ordinance; (b) the said Ordinance be declared unconstitutional for violating substantive due process, and invalid for violating Section 130 of the LGC; and (c) the tax payments made by the QC residents or individuals based on the 2016 Ordinance's revised schedule of FMVs be refunded.[14]
In the petition, Alliance argued that the 2016 Ordinance should be declared unconstitutional for violating substantive due process, considering that the increase in FMVs, which resulted in an increase in the taxpayer's base, and ultimately, the taxes to be paid, was unjust, excessive, oppressive, arbitrary, and confiscatory as proscribed under Section 130 of the LGC.[15]
Moreover, it averred that the hike in the FMVs up to 500% of the previous values was arbitrary and has no factual basis because the 2016 Ordinance contains no standard or explanation on how the QC Assessor arrived at the new amounts in the Schedule of FMVs.[16]
Alliance further pointed out that there was no real consultation prior to the enactment of the 2016 Ordinance as required by law, noting that only a brief one (1)-day consultation hearing was held in November 2016 before the approval of the 2016 Ordinance on December 14, 2016. The short timeframe from the consultation to the approval reveals that the proceedings were fast-tracked.[17]
It likewise argued that the abrupt effectivity of the 2016 Ordinance merely a month after its enactment, i.e., from December 2016 to January 2017, is unreasonable as it compelled the QC residents to pay exorbitant real property taxes for the year 2017 without giving them sufficient time to prepare for the payment of the increased taxes.[18]Thus, the 2016 Ordinance is confiscatory because their inability to pay the real property taxes will result in their property being declared as delinquent, and thereafter, auctioned to the public.[19] This scenario also amounts to restraint of trade as applied to those properties used in businesses.[20]
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The Rules of Court mandates that only natural or juridical persons, or entities authorized by law may be parties in a civil action. Non-compliance with this requirement renders a case dismissible on the ground of lack of legal capacity to sue,which refers to "a plaintiff's general disability to sue, such as on account of minority, insanity, incompetence, lack of juridical personality or any other general disqualifications of a party."[66]
Jurisprudence provides that an unregistered association, having no separate juridical personality, lacks the capacity to sue in its own name.[67] In this case, Alliance admitted that it has no juridical personality, considering the revocation of its SEC Certificate of Registration and its failure to register with the HLURB as a homeowner's association. Nevertheless, Alliance insists that the petition should not be dismissed because it was filed by the members of the Board of Trustees in their own personal capacities, as evidenced by a letter[68] dated March 10, 2017 (Authorization Letter) authorizing its ostensible Treasurer, Danilo Liwanag (Liwanag), to file the petition in their behalf.
The Court disagrees. A perusal of the petition readily shows that it was filed by Alliance, and not by the individual members of its Board of Trustees in their personal capacities. As it is evident from the title and "Parties"[69] section of the petition, the same was filed solely in the name of "Alliance of Quezon City Homeowners' Association, Inc.," as petitioner. Moreover, the Authorization Letter above-adverted to clearly indicates that the signatories therein signed merely in their official capacities as Alliance's trustees.[70] In fact, even assuming that the trustees intended to file the case in their own behalf, Section 3, Rule 3 of the Rules of Court[71] requires that their names as beneficiaries must be included in the title of the case, which was, however, not done here. Thus, Alliance's claim that the petition was filed by the trustees in their personal capacities is bereft of merit.
For another, Alliance argued that the status of its authorized representative, Liwanag, as a taxpayer and resident of QC, is sufficient to correct the procedural lapse.
This contention is erroneous. In Association of Flood Victims (AFV) v. Commission on Elections,[72] the Court dismissed the petition for certiorari and/or mandamus because the petitioner therein – being an unincorporated association – had no capacity to sue in its own name and accordingly, its representative who filed the petition in its behalf, had no personality to bring an action in court.[73] Moreover, in Dueñas v. Santos Subdivision Homeowners Association,[74] the Court held that the complaint filed by an unregistered association cannot be treated as a suit by the persons who signed it.[75]
On these scores, the fact that Liwanag, a natural person, signed and verified the petition did not cure Alliance's lack of legal capacity to file this case. By the same logic, the signatures of the supposed trustees in the Authorization Letter did not confer Alliance with a separate juridical personality required to pursue this case.
In the final analysis, there is no proper petitioner to the present suit. Should this case proceed despite Alliance's legal non-existence, the Court will certainly remain in continuous quandary as to who should the reliefs be granted to, since no other proper party filed the case. It is noteworthy to mention that in the case of Samahan ng mga Progresibong Kabataan (SPARK) v. Quezon City,[76] the Court decided to give due course to the petition despite the lack of legal capacity to sue of petitioner SPARK (also an unincorporated association like Alliance) because individuals or natural persons joined as co-petitioners in the suit, unlike in the present case.
All told, while this case falls under the exceptions to the doctrines of exhaustion of administrative remedies and hierarchy of courts, the Court is still constrained to dismiss the petition due to Alliance's lack of legal capacity to sue. Thus, the resolution of the issues anent the validity and constitutionality of Quezon City Ordinance No. SP-2556, Series of 2016, while indeed of great public interest and of transcendental importance, must nonetheless await the filing of the proper case by the proper party. Accordingly, the Court no longer deems it necessary to resolve the other issues raised in this case.
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