Vicencio v. F. A. Quintos

[CA-No. 44697-R. January 23, 1975.] * ARCADIO VICENCIO, ET AL. , plaintiffs-appellees , vs . F. A. QUINTOS, as Treasurer of Quezon City, ET AL., defendants; ERLINDA ORDILLAS, ET AL. , defendants and appellants . Josefino O . Corpus for defendants and appellants. Arcadio Vicencio for this behalf and that of his co-appellees. SYLLABUS TAX SALE; SALE WITHOUT ACTUAL NOTICE IS NULL AND VOID. Administrative proceedings established for the sale of private lands for non-payment of taxes being " in personam " (Pantaleon vs. Santos, L-10289, July 31, 1957), it is essential that there be actual notice to the delinquent, otherwise the sale is null and void although preceded by proper advertisement or publication. D E C I S I O N DE CASTRO , J p : This is an action to annul a tax sale of a piece of land located in Quezon City with an area of 3,250 square meters with an assessed value of P13,000.00 and with an alleged market value of P81,250.00, at P25.00 per square meter for only P1,000.00, for the purpose of collecting the delinquent tax which, including penalties and the expense of the auction sale, amounted to only P697.62. prcd The plaintiffs-appellees who brought this action are the owners of the land claim never to have been notified of the fact of delinquency before the auction sale was held, nor of the actual sale, the date whereof would toll the period of redemption of one year, by reason of which they failed to pay the amount of the delinquent tax, and thereafter, to redeem the property after it was sold. The defendants-appellants are the buyers in the auction sale, the other defendants, the City Treasurer and Register of Deeds of Quezon City, having chosen not to appeal. The only question raised in this appeal is whether under the facts presently to be recited, the tax sales was valid and legal as contended by the appellants, or null and void as held by the lower court, sustaining the position of the plaintiffs-appellees, in a decision the dispositive portion of which reads: "IN VIEW OF THE FOREGOING, the Court hereby renders judgment in favor of the plaintiffs and against the defendants, as follows: "1) The proceedings covering the sale of the property in question in n public auction conducted on December 3, 1964, are hereby declared null and void; "2) The Certificate of Sale dated December 4, 1964 (Exh. B) and the Deed of Sale dated December 21, 1965 (Exh. C), both executed by the defendant Treasurer of Quezon City, in favor of defendants-spouses Erlinda Ordillas and Meliton U. Ordillas, Jr. are hereby declared null and void; cdll "3) The defendant Register of Deeds of Quezon City is hereby ordered to cancel from the title of the plaintiffs, Transfer Certificate of Title No. 27304 (4029), the annotation of the Certificate of Sale (Exh. E) executed by the Treasurer of Quezon City in favor of defendant Erlinda Ordillas, and the Deed of Sale (Exh. C), likewise executed by the Treasurer of Quezon City in favor of defendants-spouses Erlinda Ordillas and Meliton U. Ordillas, Jr.; "4) Defendant-Spouses Erlinda Ordillas and Meliton U. Ordillas, Jr. are hereby authorized to withdraw from this Court, or from the Clerk of Court the sum of P1,350.00 deposited by the plaintiffs upon the institution of the instant case, which represents the P1,000.00 the said defendants-spouses have paid for the property in question in the public auction and its interests at the rate of fifteen per centum per annum from December 3, 1964 up to the time the plaintiffs filed this complaint; and, "5) No pronouncement as to costs. "The counterclaim of the defendant Register of Deeds for Quezon City is hereby dismissed." As found by the lower court, the material facts which appear undisputed are as follows: "Plaintiffs Arcadio, Marcial and Josefina, all surnamed Vicencio are brothers and sister; that their parents bought and caused to be titled in their names on May 12, 1947, a parcel of land and covered and described in Transfer Certificate of Title No. 27304 issued by the Register of Deeds of Quezon City, and at that time, Josefina Vicencio was already married to plaintiff Vicente T. Garaygay, while plaintiffs Arcadio Vicencio and Marcial Vicencio were still unmarried; that the said property contained an area of 3,250 square meters, more or less, located at Barrio Culiat now a part of Quezon City, more particularly described as follows: LibLex 'A parcel of land (Lot No. 819-A of the subdivision plan Fls-1536-D, being a portion of Lot No. 819, plan Fls-134-D, Piedad Estate GLRO Record No. 5975), situated in the Barrio of Culiat, Municipality of Caloocan, Rizal, (now a part of Quezon City). . . ., containing an area of three thousand two hundred fifty (3,250) square meters more or less. . . . registered . . . in the name of ARCADIO VICENCIO, single; and JOSEFINA VICENCIO, married to Vicente T. Garaygay, all of legal ages, and Filipino citizen.' "that the address appearing in the aforesaid title No. 27304 (4029) marked as Exhibit 'A' is No. 4 Cordillera Street, Quezon City; that plaintiff-spouses Josefina Vicencio and Vicente T. Garaygay were living in said address at the time of the acquisition of the property, however, in 1949 said spouses started to live in Cebu City, together with the members of their family; that said plaintiff-spouses Josefina Vicencio and Vicente T. Garaygay established their residence in said City of Cebu and continuously live therein up to the present time, but before they live in Cebu City, they and their co-plaintiffs had an understanding with their brother Ramon Vicencio, who was and still is living at No. 44 Espaa Extension, Quezon City that said Ramon Vicencio will pay for them real property tax for the lot in question; that plaintiffs Arcadio Vicencio, after getting married, started to live also in Cebu City in 1951, together with the members of his family and remained to live therein up to the present time; that plaintiff Marcial Vicencio, likewise, after getting married started to live in Cebu, City in 1953 together with the members of his family and they are still living there up to the present time; that the taxes on the real property in question have been paid up to 1955, however, the taxes due from 1956 to 1963 have not been paid; that due the said non-payment of the taxes for 1956 up to 1963, the Treasurer of Quezon City sent to the plaintiffs at No. 4 Cordillera St., Quezon City, letters of delinquency notice by ordinary mail respectively dated October 1 and 8 1963 (Exhibits 1 & 2); that the plaintiffs did not receive these letters as they were living in Cebu City; that the defendant Treasurer of Quezon City sent another letter of delinquency notice (Exhibit 3) to the plaintiffs at No. 4 Cordillera Street, Quezon City which is dated August 27, 1964, by Special Delivery mail; that the said letter (Exh. 3), original of which was marked as Exhibit '4-A', was returned to the Office of the Treasurer of Quezon City for having been unclaimed, with markings of 'Second Notice' and 'Last Notice' (Exh. 4); that in order to collect the aforesaid unpaid taxes on the property in question the defendant Treasurer of Quezon City published in the Daily Mirror for three (3) consecutive weeks on October 20, 27 and November 3, 1964 the sale of the property in a public auction to be conducted on December 3, 1964 (Exh. 6, 6-A to 6-D); that the same defendant Official sent also a letter of notice to the plaintiffs at No. 4 Cordillera St., Quezon City dated November 12, 1964 (Exh. 5) by ordinary mail, notifying plaintiffs that the lot in question will be sold in a public auction on any working day between December 3 to 11, 1964; that the real property in question was sold in a public auction on December 3, 1964, and the highest bidder was Erlinda Ordillas, one of the defendant's in this case; that the corresponding Certificate of Sale (Exh. B) was executed by the defendant Treasurer of Quezon City on December 4, 1964 in favor of the above-mentioned buyer, whose bid of P1,000.00 was considered as the highest; that after the sale, the defendant Treasurer of Quezon City sent a letter of advice of said sale to the plaintiffs, again at No. 4 Cordillera Street, Quezon City under date of December 10, 1964 (Exh. 7) by Special Delivery-registered mail, which letter was returned to the Office of the Treasurer of Quezon City for being unclaimed (Exh. 7-B); that the defendant Treasurer of Quezon City sent a letter of notice to redeem the property in question under date of October 20, 1965, to the plaintiffs at No. 4 Cordillera St., Quezon City; that apparently the said letter of October 20, 1965 not having been received by the plaintiffs as they were in Cebu City, the Office of the Treasurer of Quezon City sent out one of its employees named Santiago Rosales to deliver to the plaintiffs at No. 4 Cordillera St. Quezon City, the letter of notice dated October 20, 1965 (Exh. 8); that Mr. Santiago Rosales went to No. 4 Cordillera St., Quezon City but did not find any of the plaintiffs thereat and when he inquired from the occupant of the house at No. 4 Cordillera St., Quezon City were Marcial Vicencio he was told that plaintiff Marcial Vicencio has not been residing in that place for a long time and that he is living in Cebu; that Mr. Santiago Rosales further testified that he went to the Oriental Bakery located at Cordillera St., Quezon City and inquired for Marcial Vicencio; that Mr. Rosales met in said bakery a person who introduced himself as C. C. Ocampo who also informed him that Marcial Vicencio has been residing in Cebu; that Mr. Rosales left a copy of the letter of notice dated October 20, 1965 to Mr. C. C. Ocampo and on the file copy for the Treasurer's Office of Quezon City he wrote "Oriental Bakery, Cordillera St." (Exh. 8-A) that the plaintiff claimed that the letter of notice dated October 20, 1965 (Exh. 8) has never been received by them and a refute the statements of Mr. Santiago Rosales, presented as rebuttal witness, Mr. Ramon Vicencio, the owner of the Oriental Bakery and brother of the plaintiffs, who stated that Oriental Bakery is not located at Cordillera Street but the same is located at No. 13 Bayani Street, Quezon City, and that he never had any employee in the Oriental Bakery by the name of C. C. Ocampo; that the defendant Treasurer of Quezon City, under date of October 8, 1964 the July 14, 1965, sent notices to the different banking institutions located in Manila and suburbs regarding the scheduled sale of delinquent properties (Exhs. 9, 9-A to 9-) and delinquent properties sold at public auction from December 3 to 11, 1964 (Exhs. 10, 10-A to 10-JJ), including the property in question; that the one-year period of redemption expired without any of the plaintiffs, or anybody allowed by law redeeming the property involved herein, thus the defendant Treasurer of Quezon City executed on December 21, 1965, the Deed of Sale (Exh. C, over the lot in question in favor of the defendant-spouses Erlinda Ordillas and Meliton U. Ordillas, who immediately thereafter registered the said final Deed of Sale with the Registry of Deeds of Quezon City; that the plaintiffs learned of the sale at public auction of their property thru the wire sent by their brother, Ramon Vicencio, who in turn only learned of the same thru a friend sometime in January 1966; that upon learning of such sale, plaintiff Arcadio Vicencio hurried to Quezon City and tried to pay the unpaid taxes of the Treasurer of said city on January 10, 1966, but was refused on the ground that it was too late for him to pay the taxes; and, that on the filing of this present action, plaintiff's deposited with the Court the sum of P1,350.00, which represents the amount for which the lot in question has been sold, plus interest at the rate of fifteen (15%) per centum on the selling price of P1,000.00 from December 3, 1964 to the filing of this complaint on January 19, 1966." The sale of delinquent property such as a piece of land, in the payment of taxes in order to collect the taxes due but unpaid, together with penalties and surcharges, is an administrative remedy as distinguished from the judicial remedy which necessitates the filing of the proper action in court. But like the judicial action, due process must be observed with as much concern and fidelity. One of the most indispensable requirements of due process is notice and hearing. Hence, in a judicial proceeding, notice to the defendant by summons as provided for by law is essential, without which the judgment rendered therein would be void and of no legal effect. Execution of such void judgment would accordingly be of no effect. Similarly, in administrative proceedings, notice is also of the essence in the observance of due process. From the facts as recited above, it becomes at once obvious that the plaintiffs-appellees have not been given due notice before they were declared in a state of delinquency with respect to their real estate tax, which would justify the sale of their delinquent property in a public auction to collect the delinquent taxes on the property. Their status as delinquent tax payers not having been duly established for lack of proper notice, the necessary legal basis for the submission of the delinquent property to a tax sale is wanting. All proceedings taken in pushing through the tax sale must of necessity be void. From the lack of proper notice as already shown to validly establish the status of delinquency, just like failure to summon the defendant in a judicial action, the proper proceedings that would pave the way for the sale of the delinquent property may not be said to have duly taken place. Accordingly, the sale itself, although preceded with proper advertisement as prescribed by the law (Sec. 57, Rep. Act No. 537, as amended) by the publication thereof in the "Daily Mirror", is void for being illegal. The publication herein mentioned is not the notice that is required by the due process clause of the Constitution to be sent to the party sought to be charged or whose property would be sold for tax delinquency. This is more intended to notify the public, so that given widest publicity possible, with as many bidders as may be interested drawn to take part in the auction sale, the sale would yield, at least a fair price. It is thus apparent that proper notice to the taxpayer to apprise him of the drastic action in contemplation by the tax officials which is in plain derogation of his property right, is indispensable as an element of due process. The lower court was keenly aware of this fact, as could be gleaned from its express finding that "none of the plaintiffs has even received any written notice that the lot in question suffered delinquency in the payment of real estate tax; that the same lot was to be sold in a public auction on December 3, 1964, to collect unpaid taxes due thereon; and that the said lot could be redeemed within a period of one year from December 3, 1964." Strict adherence to legal requirements in the conduct of tax sales is so imperative, that no presumption or regularity of the administrative proceedings leading to the sale is even indulged in. As held in the case of Belmonte, et al. vs. De Santos, 5 CAR 2ds. 104: "In sales of private property for tax delinquency, there is no presumption in favor of the regularity of the administrative proceedings leading towards the sale of the delinquent property; and as a general rule, the burden is upon the purchaser of a tax title to show the regularity of all the proceedings leading up to the sale (Valencia vs. Jimenez, 11 Phil. 492, 498-500; Camo vs. Boyco 29 Phil. 437; Lucido, et al. vs. Jorge Isais, et al., 43 O.G. No. 10, pp. 4159-4161; Adriano Soncuya vs. Martin Montefrio, et al., CA-G.R. No. 5572-R., October 23, 1951; Cortez vs. Ateneo de Manila, CA-G. R. No. 9587-R August 12, 1953; Fabian et al., vs. Capistrano et al., CA-G.R. No. 11005-R, March 30, 1954). Deviations from any of the requirements render the tax sale proceedings and tax title null and void." To the same effect is our ruling in the cases of Fabian vs. Capistrano, CA-G.R. No. 11005-R, March 30, 1954, and Lucido v. Isais, 43 O.G. 4152, where it was ruled: "It has been held with great propriety, that sales of property for tax delinquency being in derogation of property rights and due process the prescribed steps must be followed punctiliously and that exact and complete adherence to the statutes governing tax sale is imperatively necessary (Cooley, the Law on Taxation, 4th ed. Vol. 3, pp. 2725-2726)." More pointedly did the Supreme Court stress on the imperative necessity of apprising the taxpayer of his obligation and the sanctions to be taken should he fail in the fulfillment thereof, particularly as they constitute plain derogation of his property rights. Thus "Reason is not wanting for the legal precepts just recited. (re scrupulous adherence to the law on notice) Taxes on property usually are a very small fraction of the assessed value. The assessed value in turn, is often much lower than the market value. One year of delinquency may bring about forfeiture of the property to the government. Purchasers at tax sales, as a rule, bid for an amount very much below the market value. Without a competition, such purchasers not infrequently bid for just the amount of the taxes due. A taxpayer, accordingly, must be afforded all reasonable legal guarantee against deprivation of property without due process of law. Every effort should be strained to the end that if private property were to be taken for a tax sale, it must be only when the owner thereof had been fully appraised of his obligation to pay the taxes due and of the steps taken to escheat the same to the government and, thereafter, of the proceeding on the auction thereof. Furthermore, as was pointed out in Lucido vs. Isais, supra, at p. 4160, "there is a great temptation to connive with tax officers and their subordinates, or otherwise resort to dubious means, in order to acquire, at a nominal price, real property delinquent in the payment of taxes." (Emphasis supplied) prLL Again as the lower court aptly observed: "The plaintiffs could have been substantially served with notice had the Office of the Treasurer of Quezon City sent someone to No. 4 Cordillera St., Quezon City, before the sale in a public auction of the property in question on December 3, 1964, so that if none of the plaintiffs could be found thereat, a copy of the letter could have been left to the occupant of the house in said place, that said office could have learned of the whereabout of the plaintiff." We are not cited by appellant to any case in which the lack of actual notice did not infect a tax sale with nullity. The very nature of tax sales as a drastic administrative proceeding where no presumption of regularity is indulged in, should rule out the possibility of such a case being found in our jurisprudence. For the proceedings established for the sale of land for non-payment of taxes is one "in personam", as held in Pantaleon vs. Santos, L-10289, July 31, 1957. Personal notice cannot thus be dispensed with. It could not be argued, as appellant does, that as there was an occupant in the house found in the lot in question, in the person of one Norbert Lupisan who was allegedly charged as administrator of the property by appellee Josefina Vicencio when the latter left for Cebu in 1949, the lower court would have found it the duty of the said administrator to forward the letter sent by the Quezon City Treasurer to Cebu instead of making it the latter's extra-legal additional duty to look for and ascertain the "whereabouts of the plaintiffs." It is grave misconception to look at the duty of the tax official, in this case the City Treasurer, as less important than the concern of the taxpayer in looking after his own affairs, when it comes to pursuing the administrative remedy by which a piece of land would be sold for tax delinquency. A drastic state action is being taken against a taxpayer. Certain safeguards are thrown around the taxpayer whose property is being levied upon for auction sale, properly provided in obedience to the constitutional right of due process. What is thus involved here is the obligation and duty of the State to respect such a right, not the duty of the individual to pay his tax. What is to be sought is a guarantee that no person is deprived of his property without due notice to him, to afford him all opportunity to keep and hold on to his property as he deserves, in law and in equity. Equity cannot thus be ignored in the just disposition of this case. To sustain the position of the appellants is palpably to brush aside the precept of ancient respectability against one enriching himself at the expense of another. A golden rule of universal application, this principle should exert a decisive influence in giving direction to the proper, just and reasonable determination of this appeal. This consideration of equity is manifestly behind the ruling that the sale of property for insignificant price vitiates the tax sale (Fabian vs. Liddel & Co., 51 O.G. 5233). WHEREFORE, finding the judgment appealed from, free from any error as those assigned, its affirmance, in toto , is hereby declared with costs against defendants-appellants. SO ORDERED. Reyes L. B. and Gaviola, Jr . , JJ . , concur. Footnotes * Vol. 20 C.A.R. (2s), p.