NPC entered into a lease contract with Polar Energy, Inc. over 3×30 MW diesel engine power barges. The contract, denominated as an Energy Conversion Agreement which NAPOCOR shall be responsible for the payment of (a) all taxes, import duties, fees, charges and other levies imposed by the National Government of the Republic of the Philippines or any agency or instrumentality thereof to which POLAR may be or become subject to or in relation to the performance of their obligations under this agreement (other than (i) taxes imposed or calculated on the basis of the net income of POLAR and Personal Income Taxes of its employees and (ii) construction permit fees, environmental permit fees and other similar fees and charges) and (b) all real estate taxes and assessments, rates and other charges in respect of the Power Barges.
Subsequently, Polar Energy, Inc. assigned its rights under the Agreement to FELS. FELS received an assessment of real property taxes on the power barges from Provincial Assessor. FELS referred the matter to NPC, reminding it of its obligation under the Agreement to pay all real estate taxes. It then gave NPC the full power and authority to represent it in any conference regarding the real property assessment of the Provincial Assessor.
NPC sought reconsideration of the Provincial Assessor’s decision to assess real property taxes on the power barges. However, the motion was denied and the Provincial Assessor advised NPC to pay the assessment. This prompted NPC to file a petition with the Local Board of Assessment Appeals (LBAA) for the setting aside of the assessment and the declaration of the barges as non-taxable items; it also prayed that should LBAA find the barges to be taxable, the Provincial Assessor be directed to make the necessary corrections.
The LBAA rendered a Resolution denying the petition. FELS is hereby ordered to pay the real estate tax. The LBAA also pointed out that the owner of the barges–FELS, a private corporation–is the one being taxed, not NPC. A mere agreement making NPC responsible for the payment of all real estate taxes and assessments will not justify the exemption of FELS; such a privilege can only be granted to NPC and cannot be extended to FELS. Finally, the LBAA also ruled that the petition was filed out of time.
Aggrieved, FELS appealed the LBAA’s ruling to the Central Board of Assessment Appeals (CBAA).
The CBAA rendered a Decision finding the power barges exempt from real property tax. however in a complete volte face, the CBAA issued a Resolution reversing its earlier decision. FELS and NPC filed separate motions for reconsideration, which were timely opposed by the Provincial Assessor. The CBAA denied the said motions in a Resolution.
Dissatisfied, FELS filed a petition for review before the CA, NPC filed a Manifestation/Motion for Consolidation praying for the consolidation of its petitions. In a Resolution the appellate court directed NPC to re-file its motion for consolidation with since it is the ponente of the latter petition who should resolve the request for reconsideration.
NPC failed to comply with the aforesaid resolution. The Twelfth Division of the appellate court rendered judgment in denying the petition on the ground of prescription.
FELS timely filed a motion for reconsideration seeking the reversal of the appellate court’s decision.
Thereafter, NPC filed a petition for review assailing the appellate court’s decision. The petition was, however, denied, for NPC’s failure to sufficiently show that the CA committed any reversible error in the challenged decision. NPC filed a motion for reconsideration, which the Court denied with finality.
Meantime, the appellate court dismissed the petition in of FELS. It held that the right to question the assessment of the Provincial Assessor had already prescribed upon the failure of FELS to appeal the disputed assessment to the LBAA within the period prescribed by law. Since FELS had lost the right to question the assessment, the right of the Provincial Government to collect the tax was already absolute.
NPC filed a motion for reconsideration, seeking reconsideration. The motion was denied.
The motion for reconsideration filed by FELS had been earlier denied for lack of merit.
FELS filed the petition before the SC, hence this case.
Whether the issue raised by the Petitioner to the SC is barred due to res judicata
Yes, Res judicata pervades every organized system of jurisprudence and is founded upon two grounds embodied in various maxims of common law, namely: (1) public policy and necessity, which makes it to the interest of the State that there should be an end to litigation – republicae ut sit litium; and (2) the hardship on the individual of being vexed twice for the same cause – nemo debet bis vexari et eadem causa. A conflicting doctrine would subject the public peace and quiet to the will and dereliction of individuals and prefer the regalement of the litigious disposition on the part of suitors to the preservation of the public tranquility and happiness.
Courts will simply refuse to reopen what has been decided. They will not allow the same parties or their privies to litigate anew a question once it has been considered and decided with finality. Litigations must end and terminate sometime and somewhere. The effective and efficient administration of justice requires that once a judgment has become final, the prevailing party should not be deprived of the fruits of the verdict by subsequent suits on the same issues filed by the same parties.
To recall, FELS gave NPC the full power and authority to represent it in any proceeding regarding real property assessment. Therefore, when petitioner NPC filed its petition for review docketed as G.R. No. 165113, it did so not only on its behalf but also on behalf of FELS. Moreover, the assailed decision in the earlier petition for review filed in this Court was the decision of the appellate court in CA-G.R. SP No. 67490, in which FELS was the petitioner. Thus, the decision in G.R. No. 165116 is binding on petitioner FELS under the principle of privity of interest. In fine, FELS and NPC are substantially “identical parties” as to warrant the application of res judicata. FELS’s argument that it is not bound by the erroneous petition filed by NPC is thus unavailing.