Patalinghug vs. Court of Appeals

A tax declaration is not conclusive of the nature of property for zoning purposes; the local government's classification of an area through a zoning ordinance prevails over a property's tax declaration. Where an area has been reclassified as commercial by municipal ordinance, a building therein used for commercial purposes — even if declared residential for taxation — does not trigger the 50-meter distance requirement for funeral parlors under the zoning ordinance.

Petitioner Alfredo Patalinghug sought to construct and operate a funeral parlor in Davao City under a building permit issued by the Zoning Administrator. Private respondents Ricardo Cribillo, Martin Arapol, Corazon Alcasid, and Primitiva Sedo were residents of Barangay Agdao who opposed the construction. The dispute arose under Ordinance No. 363, series of 1982, the "Expanded Zoning Ordinance of Davao City," enacted by the Sangguniang Panlungsod on November 17, 1982, which classified areas into districts and imposed use regulations, including a 50-meter buffer requirement for funeral parlors from residential structures, churches, and institutional buildings in C-2 commercial districts.

On November 17, 1982, the Sangguniang Panlungsod of Davao City enacted Ordinance No. 363, series of 1982, known as the "Expanded Zoning Ordinance of Davao City." Section 8 of the ordinance regulated uses in C-2 districts, which were designated as dominantly for commercial and compatible industrial uses. Among the permitted uses were funeral parlors and memorial homes, provided they had adequate off-street parking space and were established not less than 50 meters from any residential structures, churches, and other institutional buildings.

Upon prior approval and certification of zoning compliance by the Zoning Administrator, Building Permit No. 870254 was issued on February 10, 1987 in favor of petitioner Alfredo Patalinghug for the construction of a funeral parlor, to be known as Metropolitan Funeral Parlor, at Cabaguio Avenue, Agdao, Davao City. Petitioner thereafter commenced construction. Several residents of Barangay Agdao complained to the Sangguniang Panlungsod that the construction violated Ordinance No. 363, alleging that the funeral parlor was situated within a 50-meter radius from the Iglesia ni Kristo Chapel and several residential structures. The Sangguniang Panlungsod conducted an investigation and found that the nearest residential structure, owned by Wilfred G. Tepoot, was only 8 inches to the south of the funeral parlor. Notwithstanding these findings, petitioner continued construction and completed the funeral parlor on November 3, 1987.

Consequently, private respondents filed on September 6, 1988 a case for the declaration of nullity of the building permit with preliminary prohibitory and mandatory injunction before the trial court. After conducting its own ocular inspection on March 30, 1989, the lower court found that the residential building owned by Cribillo and the Iglesia ni Kristo chapel were 63.25 meters and 55.95 meters away from the funeral parlor, respectively — both beyond the 50-meter prohibition. As for the Tepoot building, although it was adjacent to the funeral parlor and separated only by a concrete fence, the trial court found that it was being rented by a certain Mr. Asiaten who devoted it to a laundry business with machinery thereon, making it commercial rather than residential. The trial court also ruled that the suit was premature for failure to exhaust administrative remedies under the ordinance.

Private respondents appealed to the Court of Appeals, which reversed the trial court. The Appellate Court agreed that the Cribillo and Iglesia ni Kristo buildings were beyond the 50-meter radius but ruled that the Tepoot building was residential as reflected in its tax declaration, notwithstanding its use for a laundry business. The Court of Appeals thus annulled the building permit. The testimony of City Councilor Vergara before the trial court had shown that the Tepoot building was used for a dual purpose — as a dwelling and as a place where a laundry business was conducted — but its use as a residence, apart from the tax declaration, was not fully substantiated.

• Zoning Classification Prevails Over Tax Declaration: Petitioner argued that the Court of Appeals erred in concluding that the Tepoot building was residential simply because it was declared as such for taxation purposes, in complete disregard of Ordinance No. 363, which declared the subject area as dominantly for commercial and compatible industrial uses.

• Tax Declaration vs. Zoning Classification: Whether the Court of Appeals erred in concluding that the Tepoot building adjacent to petitioner's funeral parlor is residential based solely on its tax declaration, notwithstanding the area's classification as a C-2 commercial district under Ordinance No. 363.

• Tax Declaration vs. Zoning Classification: Yes. The Court of Appeals erred. A tax declaration is not conclusive of the nature of property for zoning purposes, and the local government's classification of an area as commercial through ordinance must prevail over a tax declaration's characterization of a property as residential.

• Tax Declaration vs. Zoning Classification: The general rule that factual findings of the Court of Appeals are conclusive on the Supreme Court admits of exceptions, including when the findings of the Court of Appeals and the trial court are contrary to each other. Here, the trial court found the Tepoot building to be commercial while the Court of Appeals found it residential, necessitating a review of the record. The testimony of City Councilor Vergara showed that the Tepoot building was used for a dual purpose — as a dwelling and as a laundry business — but its residential use, apart from the tax declaration, was not fully substantiated. The Court of Appeals' reversal rested on the tax declaration's classification of the property as residential. However, a tax declaration is not conclusive of the nature of property for zoning purposes; a property declared residential for real estate taxation may well be within a commercial zone. Under Section 22 of the Real Property Tax Code (Presidential Decree No. 464), appraisal and assessment are based on actual use, irrespective of any previous assessment or taxpayer's valuation. A piece of land declared by a taxpayer as residential may be assessed by the assessor as commercial because its actual use is commercial. The trial court's determination that the Tepoot building was commercial was further strengthened by the Sangguniang Panlungsod's declaration of the area as C-2 commercial through Ordinance No. 363. Once a local government has reclassified an area as commercial, that determination for zoning purposes must prevail. Private respondents failed to present convincing arguments that Cabaguio Avenue was still a residential zone. The operation of a funeral parlor constitutes a "commercial purpose" under the ordinance, and the declaration of the area as a commercial zone is an exercise of police power to promote the general welfare, adopted as part of comprehensive zoning plans for orderly development.

• Tax Declaration Not Conclusive for Zoning Purposes — A tax declaration is not conclusive of the nature of property for zoning purposes. A property declared by its owner as residential for real estate taxation may fall within a commercial zone. A discrepancy may exist between the determination of a property's nature for real estate taxation purposes and its determination for zoning purposes. Under Section 22 of the Real Property Tax Code (P.D. No. 464), appraisal and assessment are based on actual use, irrespective of any previous assessment or taxpayer's valuation. The Court applied this doctrine by holding that the Tepoot building's tax declaration as residential could not override the Sangguniang Panlungsod's classification of the area as C-2 commercial under Ordinance No. 363.
• Zoning Ordinance as Exercise of Police Power — The declaration of an area as a commercial zone through a municipal ordinance is an exercise of police power to promote the good order and general welfare of the people in the locality. The State may interfere with personal liberty, property, and business to secure the general welfare, and to this fundamental aim, individual rights may be subordinated. The Court applied this principle by recognizing that Ordinance No. 363, regulating the location of funeral homes, was adopted as part of comprehensive zoning plans for orderly development.
• Exception to Conclusiveness of CA Factual Findings — While the general rule is that factual findings of the Court of Appeals are conclusive on the Supreme Court, an exception exists when the findings or conclusions of the Court of Appeals and the trial court are contrary to each other. In such cases, the Supreme Court may examine the pleadings and transcripts submitted before the trial court. The Court applied this exception because the trial court found the Tepoot building commercial while the Court of Appeals found it residential.

• "It is our considered view, however, that a tax declaration is not conclusive of the nature of the property for zoning purposes. A property may have been declared by its owner as residential for real estate taxation purposes but it may well be within a commercial zone." — This passage articulates the ratio decidendi of the case, establishing the principle that tax declarations cannot control zoning determinations.
• "even if Tepoot's building was declared for taxation purposes as residential, once a local government has reclassified an area as commercial, that determination for zoning purposes must prevail." — This passage defines the hierarchy between zoning classifications and tax declarations, confirming that the local government's zoning ordinance prevails.
• "The declaration of the said area as a commercial zone thru a municipal ordinance is an exercise of police power to promote the good order and general welfare of the people in the locality." — This passage situates zoning ordinances within the framework of police power, a foundational basis for the validity of the regulatory measure.

• FNCB Finance vs. Estavillo, G.R. No. 93394, December 20, 1990, 192 SCRA 514 — Cited for the doctrine that the resolution of factual issues is the function of lower courts and their findings are binding on the Supreme Court, except in accepted exceptions.
• Guita vs. Court of Appeals, G.R. No. 60409, November 11, 1985, 139 SCRA 576 — Cited for the general rule that factual findings of the Court of Appeals are conclusive on the Supreme Court.
• Quality Tobacco Corp. vs. Intermediate Appellate Court, G.R. No. 65005, July 5, 1990, 187 SCRA 210 — Cited as authority for the exception to the conclusiveness rule when the findings of the Court of Appeals and the trial court are contrary to each other.
• Valenzuela vs. Court of Appeals, G.R. No. 83122, October 19, 1990, 191 SCRA 1 — Cited alongside Quality Tobacco Corp. for the same exception to the conclusiveness of CA factual findings.
• Sangalang vs. Intermediate Court, G.R. Nos. 71169, 76394, 74376 and 82281, December 22, 1988, 168 SCRA 634 — Cited for the principle that the State, in promoting the general welfare, may interfere with personal liberty, property, and business through the exercise of police power.
• Ortigas & Co. Ltd. Partnership vs. Feati Bank and Trust Co., No. L-24670, December 14, 1989, 94 SCRA 533 — Cited alongside Sangalang for the police power doctrine underlying zoning regulations.

• Section 8, Ordinance No. 363, series of 1982 (Expanded Zoning Ordinance of Davao City) — Regulates use in C-2 districts, permitting funeral parlors and memorial homes provided they have adequate off-street parking and are established not less than 50 meters from any residential structures, churches, and other institutional buildings. The Court found that this provision was not violated because the Tepoot building was commercial in nature and the area was classified as C-2 commercial.
• Section 22, Presidential Decree No. 464 (Real Property Tax Code) — Provides that appraisal and assessment of real property are based on actual use, irrespective of any previous assessment or taxpayer's valuation. The Court relied on this provision to support the principle that a tax declaration based on a taxpayer's self-declaration does not conclusively determine a property's actual use or its zoning classification.

Feliciano, Bidin, Melo, and Vitug, JJ., concurred.