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SPOUSES
EDUARDO and LETICIA MONTAÑO, Petitioners, - versus - ROSALINA
FRANCISCO, THE CITY GOVERNMENT OF ILOILO, ROMEO V. MANIKAN, City Treasurer of
Iloilo City, and ERLINDA C. ZARANDIN, Head of the Treasurer’s Enforcement
Group, Respondents. |
G.R. No. 160380 Present: YNARES-SANTIAGO, J., Chairperson, CHICO-NAZARIO, VELASCO, JR., NACHURA,
and PERALTA, JJ. Promulgated: July 30, 2009 |
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D E C I S I O N
PERALTA, J.:
This
is a petition for review on certiorari
of the Decision[1]
dated
The facts[3] are as follows:
Petitioners spouses Eduardo and Leticia Montaño
established that on April 13, 1977, they executed a Deed of Conditional Sale[4] with the Government
Service Insurance System (GSIS) covering
a parcel of land situated at Block 2, Lot 6, Maharlika Homes, Jaro, Iloilo
City, together with the house and improvements thereon. The lot was covered by TCT No. T-41681. The Montaños started paying the amortization
in January 1979, and occupied the house and lot in 1980. However, in the summer of 1994, one Atty. Salvador Paja I went to their house and
claimed that the lot was already owned by respondent Rosalina Francisco.
Leticia Montaño made inquiries regarding
the alleged sale of the lot. She went to the Register of Deeds and discovered
an annotation at the back of TCT No.
T-41681,[5] under Entry No. 170334 dated July 17, 1991,
stating that a Certificate of Sale of Delinquent Real Property dated June 28,
1991 was executed by the City Treasurer's Office in favor of Rosalina Francisco
covering the parcel of land for the sum of P2,225.19 representing taxes,
penalties and cost of sale pursuant to the provision of Section 76 of
Presidential Decree (P.D.) No. 464.[6] It also appeared at the back of the same
title, under Entry No. 201610 dated July 16, 1993, that Judge Quirico Defensor of the RTC of Iloilo City,
Branch 36 issued an Order[7] dated April 29, 1993, directing the Register
of Deeds of Iloilo City to issue a new owner's duplicate copy of the said
certificate of title in the name of GSIS
and declaring the lost copy as null and void.
On
Leticia Montaño
also went to the Office of the City Treasurer where she learned that respondent
Francisco purchased the subject property in a public auction sale of delinquent real property conducted by public
respondents on
On July
11, 1994, the Montaños filed before the RTC of Iloilo City, Branch 23,
an action for declaration of nullity of sale and damages against Rosalina Francisco,
the City Government of Iloilo, the City
Treasurer and the Head of the Treasurer’s Enforcement Group. They caused a Notice of Lis
Pendens[8]
to be recorded, and paid the tax due by consignation,[9] pursuant to Section 267 of the Local
Government Code of 1991.[10]
Benson Chin of the
City Treasurer's Office, in compliance with the subpoena and subpoena duces tecum issued by the trial court,
brought the record folder of the subject property in the name of Baldomero Dagdag. The property's
records presented before the trial court consisted of the Notice of Sale of Delinquent
Real Property;[11]
the Certificate of Posting;[12] the Certification on the
conduct of auction sale by crier held on June 10, 1991 at the terminal market,
on June 11, 1991 at the La Paz Public Market and on June 14, 1991 at the
Central Market;[13]
proof of service;[14] the Certificate of Sale of
Delinquent Property to the City;[15] the Report of Sale of
Delinquent Property[16] dated July 2, 1991; the
Notice of Right to Redeem[17] addressed to GSIS c/o Baldomero
Dagdag dated July 12, 1991; and the Final Deed of Sale[18] dated July 17, 1992.
The evidence for
private respondent Rosalina Francisco showed that Atty. Salvador Paja I, in whose favor respondent Francisco executed a Special Power
of Attorney,[20]
bought at a public auction sale held on June 27, 1991, a parcel of land known as Lot 6, Block 2, Phase
2144-B, located in Barangay Balabago, Jaro, Iloilo City, registered in the name of the GSIS, and covered by TCT No. T-41681.[21] The Certificate of Sale of
Delinquent Real Property executed by the City Treasurer’s Office in favor of
respondent Francisco was annotated at the back of TCT No. T-41681 under Entry
No. 170334.[22]
Since no redemption had been made within
the one year period, a Final Deed of
Sale was executed.
On
The main issue sought to be resolved was whether or not
the tax delinquency proceedings made on the subject lot was regular and legal.
On
WHEREFORE,
in the light of the facts obtaining and the jurisprudence aforecited, judgment
is hereby rendered in favor of the plaintiffs and against all the defendants,
hereby:
1) Declaring the tax delinquency proceedings (the
auction sale) on the lot subject of this case as illegal and without force and
effect;
2) No costs.
SO ORDERED.[25]
Respondent Francisco appealed the trial court’s Decision to the
Court of Appeals. In a Decision dated
WHEREFORE, premises considered, the Decision dated
Accordingly, the tax delinquency proceedings
involving the parcel of land (Lot No. 6) covered by TCT No. 41681 is declared
legal and with force and effect.
Defendant-appellant’s claim for damages is denied
for lack of merit.
SO ORDERED.[26]
The Court of Appeals held that the GSIS, as the registered owner of the
property, is the taxpayer entitled to the notice of tax delinquency. It found that GSIS was not deprived of its property
without due process and that notice was regularly served. Under a contract to sell, the vendor retains
the ownership of the property until after the same is fully paid by the vendee. Hence, when public respondents caused the
service of the notice of sale to Baldomero Dagdag of the GSIS, the interest of
the taxpayer was deemed to have been protected and the notice requirement was
complied with.
As regards the alleged defect in publication, the Court of Appeals noted
that per affidavit of the Editor-in-Chief of the Visayan Tribune, the notice
was published thrice, as required by law.
Citing Talusan v. Tayag,[27] the appellate court held that granting arguendo that the notice was
published only twice instead of thrice, as required by law, the same is no
longer material to the case since the
interest of the taxpayer was protected by the service of personal notice to the registered owner of
the property.
Further, the Court of
Appeals pointed out that in GSIS v. City
Assessor of Iloilo City,[28] it had already upheld the
validity of the assessment of the real property taxes upon GSIS and the auction sale proceedings, as it
sustained the finding of the
lower courts that notices were sent
to the GSIS and the beneficial owners of the
properties in question, which includes the subject lot.
Petitioners’ motion for reconsideration was denied by the Court of Appeals
in a Resolution[29]
dated
Hence, this petition.
The main issue raised is whether or not the tax delinquency proceedings conducted on the subject parcel of land
situated at Block 2,
Petitioners contend that the Court
of Appeals erred in holding that the tax delinquency proceedings was legal and
with force and effect, since the requirements regarding the publication and
notice of an auction sale under Section 73 of P.D. No. 464 were not complied
with.
The petition is without merit.
The pertinent provision of law in this case is
Section 73 of P.D. No. 464, thus:
SEC. 73. Advertisement of sale of real
property at public auction. -After the expiration of the year for which the
tax is due, the provincial or city treasurer shall advertise the sale at public
auction of the entire delinquent real property, except real property mentioned
in subsection (a) of Section forty hereof, to satisfy all the taxes and
penalties due and the costs of sale. Such advertisement shall be made by posting
a notice for three consecutive weeks at the main entrance of the provincial
building and of all municipal buildings in the province, or at the main
entrance of the city or municipal hall in the case of cities, and in a public
and conspicuous place in the barrio or district wherein the property is
situated, in English, Spanish and the local dialect commonly used, and by
announcement at least three market days at the market by crier, and, in the
discretion of the provincial or city treasurer, by publication once a week for
three consecutive weeks in a newspaper of general circulation published in the
province or city.
The notice, publication, and announcement by crier shall state the amount
of the taxes, penalties and costs of sale; the date, hour, and place of sale;
the name of the taxpayer against whom the tax was assessed; and the kind or
nature of property and, if land, its approximate areas, lot number, and
location stating the street
and block number; district or barrio, municipality and the province or city
where the property to be sold is situated.
Copy of the notice shall
forthwith be sent either by registered mail or by messenger, or through the
barrio captain, to the delinquent
taxpayer, at his address as shown in the tax rolls or property tax records
cards of the municipality or city where the property is located, or at his
residence, if known to said treasurer or barrio captain: Provided, however,
that a return of the proof of service under oath shall be filed by the person
making the service with the provincial or city treasurer concerned.
In Talusan v. Tayag,[31] the Court held that for purposes of the
collection of real property taxes, the registered owner of the property is
considered the taxpayer. Hence, only the
registered owner is entitled to a notice of tax delinquency and other
proceedings relative to the tax sale.[32]
In this case, the Court of Appeals correctly held that the GSIS,
as the registered owner of the subject property, was the taxpayer that was
entitled to the notice of tax delinquency
and that of the auction sale, as well as other related notices. It found that the GSIS was not deprived of its property without due process and that
notice was regularly served. It pointed
out that it had already upheld the validity of the assessment of the real
property taxes upon GSIS and the auction sale proceedings in GSIS v. City
Assessor of Iloilo City.[33]
It is important to note that both the
GSIS, as the registered owner of the subject property, and herein petitioners Spouses
Montaño separately questioned the validity of the auction sale of the subject property
covered by TCT No. T-41681.
The
Court of Appeals mentioned in its Decision that there are two cases involving
the same issue, namely, this action for declaration of nullity of sale and
damages filed by the Spouses Montaño, and the petition for annulment of
judgment filed by the GSIS, docketed as CA-G.R. SP No. 51149, entitled GSIS
v. City Assessor of Iloilo City, the Register of Deeds of Iloilo City
and Rosalina Francisco (GSIS v. City Assessor of Iloilo City).
In GSIS v. City Assessor of Iloilo City,
the GSIS assailed the Order
dated April 29, 1993 of the RTC of Iloilo City, Branch 36 and the Order dated
November 8, 1994 of the RTC of Iloilo,
Branch 31 in regard to the petition of
herein respondent Rosalina Francisco for the entry of new transfer certificates of title in her
name, which included TCT No. T-41681 covering the subject parcel of land in
this case. The GSIS claimed that the
assessment of real property taxes on the parcels of land was void because it
was exempt from all forms of taxes under its charter, Republic Act No. 8291. The
GSIS also claimed that it had no notice of the proceedings in the assessment
and levy of the taxes, as well as the sale of the properties at public auction;
hence, its right to due process was violated.
In GSIS v. City Assessor of Iloilo City, the Court of
Appeals upheld the findings of the lower courts
that notices were sent
to GSIS and the
beneficial owners of
the properties in question. It gave no credence to the arguments of GSIS and
denied its petition.
GSIS appealed the decision of the Court of Appeals before this Court via a petition for review on certiorari. In a Decision
dated
WHEREFORE,
the petition is DENIED.
The Decision dated
No
costs.
SO ORDERED.
DIOSDADO M. PERALTA
Associate
Justice
WE
CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA
V. CHICO-NAZARIO PRESBITERIO J.
VELASCO, JR.
Associate
Justice Associate Justice
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
ATTESTATION
I attest that the conclusions in
the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate Justice
Third Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article
VIII of the Constitution and the Division Chairperson’s Attestation, I certify
that the conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
[1] Penned
by Associate Justice Remedios Salazar-Fernando, with Associate Justices Delilah
Vidallon-Magtolis and Edgardo F. Sundiam, concurring; rollo, pp. 20-27.
[2] Penned
by Judge Tito G. Gustilo; id. at
40-50.
[3] As culled from the Decisions of
the trial court and the Court of Appeals, and the records of the case.
[4] Exhibit “A,” records, p. 226.
[5] Exhibit “2,” id. at 70.
[6] The
Real Property Tax Code.
[7] Exhibit
“3,” records, p. 71.
[8] Exhibit "B," id. at 236.
[9] Exhibit "C," id. at 236-A.
[10] Sec. 267. Action Assailing Validity of Tax
Neither shall any court declare
a sale at public auction invalid by reason of
irregularities or informalities in the proceedings unless the
substantive rights of the delinquent owner of the real property or the person
having legal interest therein have been impaired.
[11] Exhibit "E," Records, p. 238.
[12] Exhibits "F,"
"F-I," "F-2," "F-3," "F-4," "F-5,"
"F-6," id. at 239-245.
[13] Exhibit "J,"
id. at 249.
[14] Exhibit "K,"
id. at 250.
[15] Exhibit "L,"
id. at 251.
[16] Exhibit
“M,” id. at 252
[17] Exhibit
“N,” id. at 253.
[18] Exhibit
“O,” id, at 254.
[19] Records, p. 25.
[20] Exhibit "1,"
id.
at 68.
[21] Exhibit "2,"
id. at 70.
[22] Exhibit
"2-A," id.
[23] Exhibit "3,"
id. at 71.
[24] Exhibit "2-B,"
id.at 70.
[25] Rollo,
pp. 49-50.
[26]
[27] 408 Phil. 373 (2001).
[28] Docketed
as CA-G.R. SP No. 51149, dated
[29] Rollo, p. 32.
[30] Identified
as Block 2,
[31] Supra
note 27.
[32]
[33] Supra
note 28.
[34] GSIS v. City Assessor of