J.A.B. Bulao & Associates

CASE 2017-0023-REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH) VS. SPOUSES SENANDO F. SALVADOR AND JOSEFINA R. SALVADOR (G.R. NO. 205428, 07 JUNE 2017, DEL CASTILLO, J.) (SUBJECT/S: WHO SHOULDER CAPITAL GAINS IN EXPROPRIATION PROCEEDINGS; WHEN CAN ONE CLAIM CONSEQUENTIAL DAMAGES IN EXPROPRIATION PROCEEDINGS) (BRIEF TITLE: REPUBLIC VS. SPOUSES SALVADOR)

DISPOSITIVE:

“WHEREFORE, we GRANT the Petition for Review on Certiorari. The Decision dated August 23, 2012 and the Order dated January 10, 2013 of the Regional Trial Court, Branch 270, Valenzuela City, in Civil Case No. 175-V-11, are hereby MODIFIED, in that the award of consequential damages is DELETED. fa addition, spouses Senando F. Salvador and Josefina R. Salvador are hereby ORDERED to pay for the capital gains tax due on the transfer of the expropriated property.

SO ORDERED.”

SUBJECTS/DOCTRINES/DIGEST:

IN EXPROPRIATION PROCEEDINGS, WHO SHOULDERS THE CAPITAL GAINS TAX?

IT IS THE SELLER. CAPITAL GAINS TAX IS A TAX ON PASSIVE INCOME. THUS THE SELLER IS LIABLE TO SHOULDER THE TAX.

“This is clearly an error. It is settled that the transfer of property through expropriation proceedings is a sale or· exchange within the meaning of Sections 24(D) and 56(A)(3) of the National Internal Revenue Code, and profit from the transaction constitutes capital gain.32 Since capital gains tax is a tax on passive income, it is the seller, or respondents in this case, who are liable to shoulder the tax.33’

In fact, the Bureau of Internal Revenue (BIR), in BIR Ruling No. 476-2013 dated December 18, 2013, has constituted the DPWH as a withholding agent tasked to withhold the 6’% final withholding tax in the expropriation of real prope1ty for infrastructure projects. 11ms, as far as the government is concerned, the capital gains tax in expropriation proceedings remains a liability of the seller, as it is a tax on the seller’s gain from the sale of real property.34

WHEN IS CONSEQUENTIAL DAMAGES AWARDED IN EXPROPRIATIATION PROCEEDINGS?

ONLY IF AS A RESULT OF THE EXPROPRIATION, THE REMAINING PROPERTY OF THE OWNER SUFFERS FROM IMPAIRMENT OR DECREASE IN VALUE.

“Besides, as previously explained, consequential damages are only awarded if as a result of the expropriation, the remaining property of the owner suffers from an impairment or decrease in value.15 In this case, no evidence was submitted to prove any impairment or decrease in value of the subject property as a result of the expropriation. More significantly, given that the payment of capital gains tax on the transfer· of the subject property has no effoct on the increase or decrease in value of the remaining property, it can hardly be considered as consequential damages that may be awarded to respondents.”

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SCD-2017-0023-Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH) Vs. Spouses Senando F. Salvador and Josefina R. Salvador

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CASE 2017-0022-REP. EDCEL C. LAGMAN, ET AL. VS. EXECUTIVE SECRETARY SALVADOR C. MEDIALDEA, ET AL./EUFEMIA C. CULLAMAT, ET AL. VS. PRESIDENT RODRIGO DUTERTER, ET AL. / NORKAYA S. MOHAMAD, ET AL. VS. EXECUTIVE SECRETARY SALVADOR C. MEDIALDEA, ET AL.

DISPOSITIVE:

“WHEREFORE, the Court FINDS sufficient factual bases for the issuance of Proclamation No. 216 and DECLARES it as CONSTITUTIONAL. Accordingly, the consolidated Petitions are hereby  DISMISSED.

SO ORDERED.”

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SCD-2017-0022-REP. EDCEL C. LAGMAN, ET AL. VS. EXECUTIVE SECRETARY SALVADOR C. MEDIALDEA, ET AL.

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CASE 2017-0019- WILLIAM ANGIDAN SIY, VS. ALVIN TOMLIN, (G.R. No. 205998 24 APRIL 2017, DEL CASTILLO, J.🙂 (SUBJECT/S: REPLEVIN) (BRIEF TITLE: SIY VS. TOMLIN)

DISPOSITIVE:

“WHEREFORE, the Petition is DENIED. The October 9, 2012 Decision and February 19, 2013 Resolution of the Court of Appeals in CA-G.R. SP No.124967 are AFFIRMED WITH MODIFICATION, in that the subject Land Rover Range Rover, with Plate Number ZMG 272 and particularly described in and made subject of these proceedings, is ORDERED RETURNED to respondent Alvin Tomlin as its registered owner.

SO ORDERED.”

SUBJECTS/DOCTRINES/DIGEST:

“Considering that he was no longer the owner or rightful possessor of the subject vehicle at the time he filed Civil Case No. Q-11-69644 in July, 2011, petitioner may not seek a return of the same through replevin. Quite the contrary, respondent, who obtained the vehicle from Chua and registered the transfer with the Land Transportation Office, is the rightful owner thereof, and as such, he is entitled to its possession. For this reason, the CA was correct in decreeing the dismissal of Civil Case No. Q-11-69644, although it e1red in ordering the return of the vehicle to the PNP-HPG, which had no further right to hold the vehicle in its custody. As the registered and rightful owner of the subject vehicle, the trial court must return the same to respondent.

Petitioner cannot be allowed to cut his losses by ostensibly securing the recovery of the subject vehicle in lieu of its price, which Ong failed and continues to fail to remit. On the other hand, Ong’s declarations contained in his Affidavit,36 to the effect that petitioner remains the owner of the vehicle, and that Chua came into illegal possession and ownership of the same by unlawfully appropriating the same for himself without paying for it, are unavailing. Faced with a possible criminal charge for estafa initiated by petitioner for failing or refusing to remit the price for the subject vehicle, Ong’ s declarations are considered self-serving, that is, calculated to free himself from the criminal charge. The premise is that by helping petitioner to actually recover his vehicle by insisting that the same was unlawfully taken from him, instead of remitting its price to petitioner, Ong expects that he and petitioner may redeem themselves from their bad judgment; for the petitioner, the mistake of bestowing his full faith and confidence upon Ong, and blindly surrendering the vehicle, its documents of title, and a deed of sale executed and signed in blank, to the latter; and for Ong, his failure to remit the proceeds of the sale to petitioner; and petitioner might then opt to desist from pursuing the estafa and other criminal charges against him.”  

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SCD-2017-0019-William Anghian Siy Vs. Alvin Tomlin

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