Logaris v. Soriano

[CA No. 52901-R. October 17, 1979.] * ANASTACIA LOGARIS, ET AL. , plaintiffs-appellants , vs . FIDELA SORIANO, ET AL. , defendants-appellees . Avelino P . Andres for plaintiffs and appellants. Florencio F . Talens for defendant and appellee. SYLLABUS 1. TAX SALE; PREMATURE AUCTION SALE; SEC. 35, ASSESSMENT LAW. The public auction sale of property in June, 1941, for tax delinquency for the year 1941, violates the Assessment Law (C.A. No. 470), particularly Section 35 thereof, and is null and void ab initio . 2. ID.; ANNULMENT FOR INADEQUACY OF PRICE. The court may annul the sale of property, auction for delinquency in the payment of taxes, for the sum of P46.03 when the assessed value of the same is P2,340.00, the price being highly and grossly inadequate and unconscionable (Paras vs . Court of Appeals, etc., L-4091, May 28, 1952, 91 Phil. 389). D E C I S I O N ALAMPAY , J p : Subject of this appeal is the decision dated September 16, 1972, of the Court of First Instance of Nueva Ecija, in Civil Case No. SD-231, dismissing plaintiffs' complaint and declaring as valid the public auction sale conducted by the Provincial Treasurer of Nueva Ecija. As stated in the decision, the following are the established and undisputed facts: "Plaintiff Anastacia Logaris is the widow of the late Ciriaco Cabonce and the other co-plaintiffs Jovena, Augusto, Jorge, Marcelo, Juanita and Corazon, all surnamed Cabonce, are the heirs of Ciriaco Cabonce. The defendant Fidela Soriano is the successful bidder in the auction sale of the property in question which is situated in Barrio Parista, Lubao, Nueva Ecija, with an area of 8.5016 hectares, more or less, and which property was originally registered in the name of Mariano Ferrer who, pursuant to his homestead patent No. 15825, was issued OCT No. 6521 of the Register of Deeds of Nueva Ecija dated February 21, 1940 (Exh. A). On July 2, 1941, said Mariano Ferrer executed in a public instrument, a deed of absolute sale of the property in question in favor of Ciriaco Cabonce, but which deed of sale was registered with the Register of Deeds of Nueva Ecija on September 6, 1945 (Exh. A-4). By reason of such registration, TCT No. 21388 was issued in the name of Ciriaco Cabonce on September 6, 1945, (Exh. D). In 1951, the late Ciriaco Cabonce registered the said property in his name for taxation purposes and was issued Tax Declaration No. 2470 (Exh. J), but which tax declaration was cancelled by Tax Declaration No. 7087 in the name of defendant Fidela Soriano (Exh. K and/or 5). In turn, said declaration No. 7087 was cancelled by tax declaration No. 9103 also in the name of Fidela Soriano in 1964 (Exh. 5-B and 5-C). It has also been admitted and established by the annotations found in the O.C.T. No. 6521 (Exh. A) that the property described therein was sold at public auction on June 2, 1941, for the sum of P46.07 by the Provincial Treasurer of Nueva Ecija for tax delinquency, to Fidela Soriano (defendant), whose certificate of sale was registered on December 15, 1943 (Exh. A-2 and/or 1-C). For failure of the owner to purchase the property within the prescribed period provided for by law, a final deed of sale was issued in favor of the defendant Fidela Soriano by the Provincial Treasurer of Nueva Ecija, on October 8, 1943, which document was registered on December 15, 1943, (Exhs. C or 1-C, I-E and I-F). "On March 26, 1954, the defendant Fidela Soriano filed with the Court in Cad. Case No. 16, Cadastral Rec. No. 342, a petition for the surrender of title against the herein plaintiffs (Exh. E) and in connection thereto, the Court issued an order dated May 7, 1954, cancelling TCT No. 21388 and ordered the issuance of a new title in the name of Fidela Soriano (Exhs. E, F, 2-E, 2-F, 3-A). Pursuant thereto, TCT No. 15784 was issued to Fidela Soriano cancelling TCT No. 21388 on May 17, 1954 (Exh. 4)." (Decision, Record on Appeal, 35-37). On October 13, 1967, the herein plaintiffs filed the instant case before the Court of First Instance of Nueva Ecija to annul the Certificate of Sale and Final Bill of Sale issued to the defendant Fidela Soriano by the Provincial Treasurer of Nueva Ecija on June 2, 1941, and October 18, 1943, respectively, and to have themselves declared owners of the land in question with damages. Only the defendant Fidela Soriano filed her answer to plaintiffs complaint. For failure to file their answer the Provincial Treasurer and the Register of Deeds of Nueva Ecija were declared in default. On September 16, 1972, the lower court rendered its decision in favor of the defendants and against the plaintiffs, the dispositive portion of which reads as follows: IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the defendants and against the plaintiffs declaring the auction sale conducted by the Provincial Treasurer of Nueva Ecija valid and dismissing the complaint. No pronouncement as to costs. (Decision, Rec. on Appeal, 30-40) On November 2, 1972, plaintiffs filed a motion for reconsideration of the decision but the same was denied by the lower court in its order dated November 28, 1972. Hence, this appeal reached this Court. On appeal plaintiffs-appellants had cited the following errors as having been committed by the court below. I The lower court erred in declaring that the presumption of regularity is applicable to the tax sale in question. II The trial court erred in not resolving the other issues properly raised by the plaintiffs-appellants concerning the patent nullity of the tax sale. III The lower court erred in not resolving the issue of no-registerability of the certificate of (tax) sale and the final bill of sale. IV The lower court erred in dismissing the complaint of plaintiffs-appellants despite overwhelming evidence in support of their claim. (Appellants brief, 1-2). Appellants claim that the auction sale of the property in question by the Provincial Treasurer of Nueva Ecija is null and void reasoning out that the requirements of the law on the matter of service and notice have not been complied with. The lower court in disregarding this claim of the appellants and in sustaining the validity of the auction sale ruled that "other than the bare words of the plaintiffs, no satisfactory evidence was introduced to support their claim and we find their testimonies insufficient to overcome the legal presumption that official duty has been regularly performed." (Decision, Record on Appeal, 38). We find this ruling of the lower court erroneous. There is no legal presumption of the regularity of any administrative proceeding which results in depriving a citizen of taxpayer of this property. Due process of law must be shown and the burden of proving the regularity of all proceedings leading up to a tax sale is upon the purchaser at the sale (Valencia v. Jimenez, et al., 11 Phil. 492). The law does not create a presumption of the regularity of any administrative proceeding but on the contrary, the due process of law to be followed in tax proceeding must be established by proof and the general rule in that the purchaser in an auction sale is bound to take upon herself the burden of showing the regularity of a tax sale Valencia v. Jimenez, supra ). In the case at bar, the burden of showing that there has been proper advertisement, notice to taxpayer and consideration for the sale rests not upon the plaintiffs-appellants but upon the defendant Fidela Soriano, she being the purchaser at said auction sale, all of which she failed to prove during the trial. Significantly, the office of the defendant Provincial Treasurer of Nueva Ecija who was involved in the auction sale proceedings did not even file any answer and was declared in default. This circumstance is reflective and persuasive of the correctness of appellants' allegations regarding the non-compliance with the mandatory requirements of law with respect to the auction sale of the property in question. There is also merit in the other contention of the appellants that the land in question should not be the subject of a tax sale for real estate tax delinquency for the year 1941. Section 35 of the Assessment Law (Comm. Act 470) provides: SECTION 35. A dvertisement of Sale of Real Property at Public Auction . After the expiration of the year for which the tax is due , the Provincial Treasurer shall advertise the sale at public auction of the delinquent real property or so much thereof as may be necessary to satisfy all taxes and penalties due and the cost of the sale . . . . It however appears that in the Certificate of Sale (Exh. B) and in the Final Bill of Sale (Exh. C), the property in question was prematurely subjected to a public auction sale on June 2, 1941, when the taxes for the year 1941 was not yet due. To subject the property to a tax delinquency for the year 1941 clearly violates the abovecited explicit provision of the assessment Law. Apart from this consideration, said property was sold for a meager sum of P46.07 when the assessed value of the same was then P2,340.00. The amount of P46.07 for which the property was sold manifestly appears highly and grossly inadequate and an unconscionable price. In the case of Mariano M. Paras v. Court of Appeals, Lazaro Leodones and Demetrio Leodones, L-4091, May 28, 1952, 91 Phil. 389, the Supreme Court ruled that the Court may annul the sale where the price paid at the public auction sale for the homestead was grossly inadequate and shocking to conscience. In accord with the foregoing ruling, and in equity, We find added reason to annul the said auction sale conducted by the Provincial Treasurer of Nueva Ecija. Appellants further claim that the Register of Deeds of Nueva Ecija should have denied the registration of the Certificate of Sale and Final Bill of Sale as the description of the property in question as found in the Certificate of Sale and in the Final Bill of Sale is in variance with the description as appearing in the O.C.T. No. 6521 and TCT No. 21388. This contention of the appellants is tenable. It appears that while the boundaries listed in the certificate of Title are SE, SW, W and N, the bounderies as described in the Certificate of Sale and Final Bill of Sale are North, East, South and West, apart from the difference in area which in the Certificate of Sale and Final Bill of Sale appears to be 9.9400 hectares while in the O.C.T. No. 6521 and TCT No. 21388 it appears to be 8.5016 hectares. In the case of Velayo v. Fernando Ordovesa, et al, 91 Phil. 395, the Supreme Court held that "the owner of property registered under the Torrens system is justified in relying upon the description given in his Certificate of title as the one officially identifying said property. The sale for non-payment of tax of the property with a description distinct a separate from that which appears in its certificate of title faith and credence which the title is meant to command and, hence affects the essence of the Torrens System." Appellees' other contention that appellants have no personality to file this case because the plaintiffs are not parties to the deed of sale (Exh. B), sought to be annulled, cannot be sustained. The governing jurisprudence is that a "person who is not a party obliged principally or subsidiarily in contract may exercise an action for nullity of the contract if he is prejudiced in his rights with respect to one of the contracting parties, and can show the detriment which would positively result to him from the contract in which he had no interventions." (Yturralde v. Vagilidad, 28 SCRA 393, 398, citing Teves v. PHHC (1968), 28 SCRA 1141, 1147, 1148, citing Ibaez v. Hongkong and Shanghai Bank, 22 Phil. 584-585). In the case at bar, the herein plaintiffs have an interest in the subject of the action being the heirs of Ciriaco Cabonce, the registered owner of the property in question before the same was sold at public auction. Any decision that the court may render in this case as to the question of the nullity from the very beginning of the auction sale proceedings and the deed of sale issued as a consequence thereof, would definitely affect and involve the interests of the herein appellants. The defense of prescription and laches do not apply in the case at bar. The auction sale was made in violation of the mandatory requirements of the Assessment Law, more particularly Sec. 35 thereof and therefore said sale is null and void ab initio . The defect is permanent and the land could not be acquired ever by acquisitive prescription, considering also that plaintiffs are acknowledged to have remained in constant possession of the property up to the present. Furthermore laches will not attach to the plaintiffs herein as the testimonial evidence which has not been rebutted, disclose that appellants relied on the promises of defendant Fidela Soriano that the latter will execute the necessary deed of reconveyance upon the restitution of the purchase price and costs but which she declined to do despite plaintiffs' demands and tender of payment (tsn, 7-8, Testimony of Cornelio de la Cruz, Nov. 24, 1969). IN VIEW OF ALL THE FOREGOING, the decision appealed from is hereby reversed and the tax sale of said lot No. 1391 under the corresponding deeds of sale Exhibits B and executed by the Provincial Treasurer of Nueva Ecija are hereby declared null and void. By virtue of this judgment, the Register of Deeds of Nueva Ecija is hereby ordered to cancel TCT No. NT-15784 issued to appellee Fidela Soriano and to reinstate and revive anew in its records TCT No. 21398 which was registered in the name of Ciriaco Gabonce, the plaintiffs' predecessor-in-interest. No pronouncement is here made as to costs. SO ORDERED. Coquia and Grio Aquino, JJ . , concur. Footnotes * Vol. 24 C.A.R. (2s), p.____