Lucido v. Isais

[CA No. 575-R. May 27, 1947.] VIVENCIA LUCIDO and PEDRO J. KATIGBAK , plaintiffs and appellees , vs . JORGE ISAIS, AQUILINA KATUWIRAN, FERNANDO GUEVARA, and VALENTINA ISAIS , defendants and appellants . Teofisto B . Remo for appellants. Vicente Constantino for appellees. SYLLABUS 1. AUCTION SALE; SALE OF LAND DUE TO TAX DELINQUENCY; DUE PROCESS OF LAW IN TAX PROCEEDINGS MUST BE PROVED; BURDEN OF PROOF. The "law does not create a presumption of the regularity of any administrative action which results in depriving a citizen or taxpayer of his property, but, on the contrary , the due process of law to be followed in tax proceedings must be established, by proof , and the general rule is that the purchaser of a tax title is bound to take upon himself the burden of showing the regularity of all proceedings leading up to the sale ." (Valencia vs . Jimenez, 11 Phil., 492, 498-500, quoted with approval in Camo vs . Riosa Boyco, 29, 437.) 2. ID.; ID.; ID.; LAW AUTHORIZING SALE OF PROPERTY FOR TAX DELINQUENCY MUST BE STRICTLY FOLLOWED. The real estate tax authorized in the Assessment Law (Com. Act No. 470, section 5) constitutes a very small part (from 3/8% to 1%) of the assessed value which is often lower than the market value of the property taxed. It is obvious, therefore, that the taxpayer should not be deprived of his property of tax delinquency except in strict conformity with the law authorizing and regulating tax sales. Furthermore, 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. 3. ID.; ID; ID.; ID.; Exact and complete adherence to the laws governing tax sales is indispensable, therefore, not only for the protection of the taxpayer, but, also, to allay possible suspicion of collusion between the buyer and the public servants called upon to enforce such laws. 4. ID.; ID.; VALIDITY; CASE AT BAR In the tax sale under consideration, there is no evidence as to the contents of the notice of sale, or that said notice was made in "English, Spanish and the local dialect commonly used" in the region and posted "in a public and conspicuous place in the barrio wherein the property is situated," and at the main entrance of the provincial building, or as to how long it was posted. Besides, it appears that the sale was not held at the "exact place designated by statute," from which possible bidders may not have seen or noticed the sale made in the office of the municipal treasurer. Each and every one of these requirements are intended for the protection of the taxpayer, with a view to affording him ample opportunity to pay the overdue taxes or before the sale and to secure the highest, possible price thereat. Held : The tax sale is null and void. D E C I S I O N CONCEPCION , J p : This is an action to settle the title to a parcel of land of about 16.1823 hectares situated in the barrio of Masalukot, municipality of Candelaria, Province of Tayabas sold at public auction for nonpayment of real estate taxes, and to obtain possession of said property, as well as to recover damages. The original complaint was filed by the buyer, Vivencia Lucido, with the consent of her husband, Pedro J. Katigbak, against Jorge Isais who, together with his wife, Aquilina Katuwiran, and the spouses Fernando Guevara and Valentina Isais, had, subsequent to the auction sale, purchased part of the property from the delinquent taxpayer, Guillermo Martinez. A defect of parties, both plaintiff and defendants, having been pleaded by said Jorge Isais, the complaint was subsequently amended to include Pedro J. Katigbak, as plaintiff, and the aforementioned co-purchasers of Jorge Isais, as defendants. In their answer to the amended complaint the defendants assailed the validity of the tax sale upon several grounds; alleged that they bought part of the property from Guillermo Martinez without notice of either the tax sale or the tax delinquency; and prayed that the auction sale be annulled, the complaint dismissed, the defendants declared owners of the property bought by them and the plaintiffs sentenced to pay damages. cdtech After due trial the lower court rendered judgment upholding the tax sale, annulling the sale made by Guillermo Martinez in favor of the defendants, without prejudice to their right to recover from the former the amount received by him from them, and sentencing the defendants to vacate the property in question with costs. Defendants have appealed from this judgment. It appears that Guillermo Martinez was delinquent in the payment of the sum of P37.20, the aggregate amount of the real estate tax on the property in question which has an assessed value of P1,260 for the years 1938, 1939, and 1941; that, for this reason, on May 15, 1941, the municipal treasurer of Candelaria acting on behalf of the Provincial Treasurer sold the property at public auction to plaintiff, Vivencia Lucido, for said sum of P37.20 (Exhibit A); that the property was not redeemed within 1 year from said date; that on August 25, 1942, Martinez sold to the defendants a big portion of the property, with an area of about 14 hectares, for the sum of P800 (Exhibit 2-C); that on September 23, 1942, the Provincial Treasurer executed and delivered to Vivencia Lucido the final bill of sale Exhibit B; and that when the government tried to deliver the property to her, the defendants-appellants refused to yield their possession thereof. The main question for determination in this appeal is the validity of the tax sale in favor of appellee Vivencia Lucido. Appellants contend that it is null and void upon the grounds: (1) that the notices required by law were not given; (2) that copy of the certificate of sale of the forfeited real property (Exhibit A) was not served on Guillermo Martinez; (3) that the sale was held in the office of the municipal treasurer of Candelaria, not "at the main entrance of the municipal government building," as required in section 36 of Commonwealth Act No. 470; (4) that personal property was not sought to be distrained before proceeding with the tax sale; and (5) that the price thereof is unreasonable, inadequate, unconscionable and shocking to the conscience. The pertinent legal provisions are section 35 and 36 of Commonwealth Act No. 470, reading: "SECTION 35. Advertisement 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 costs of sale. Such advertisement shall be made by posting a notice for three consecutive weeks at the main entrances of the provincial building and all municipal buildings in the province, and in a public and conspicuous place in the barrio wherein the property is situated, in English, Spanish, and the local dialect commonly used, and, in the discretion of the provincial treasurer, by publishing it once a week for three consecutive weeks in a newspaper of general circulation published in the province, if there be any. Copy of the notice shall be forthwith sent by registered mail or by messenger to the delinquent taxpayer at his residence if known to said treasurer. The notice shall set forth the amount of the taxes and penalties due and the costs of sale, the date and place of the sale, the name of the taxpayer against whom the taxes were assessed and the approximate area, the lot number and the location, stating the street, number, district, barrio, municipality, and province where the real property to be sold is situated." "SECTION 36. Sale of the real property Conditions . At any time during or before the sale, the taxpayer may stay all proceedings by paying the taxes; and penalties due on the real property and the costs to the provincial treasurer or his deputy conducting the sale. If he does not do so, the sale shall proceed, which shall be held either at the main entrance of the municipal government building or on the site of the real property to be sold, as the provincial treasurer or his deputy may determine. "The provincial treasurer or his deputy shall make report of the sale to the provincial board within five days after the sale and shall make the same appear in his records. The purchaser at this sale shall receive from the provincial treasurer or his deputy a certificate setting forth the proceedings had at the sale, a description of the property sold, the name of the purchaser, the price of sale, and the exact amount of the taxes, and penalties due, and the costs of sale." Testifying for the appellees, Gregorio Mia, land tax clerk for the municipality of Candelaria, from 1925 to the outbreak of war in the Pacific, declared that, in the year 1939, he prepared a notice of delinquency in the payment of the real estate tax, on the property in question, for the years 1938 and 1939; that this notice was posted in public and conspicuous places, as provided by law, such as the "market, cockpit, in parking places . . . and on the bulletin board of the municipal building of Candelaria"; that, through representatives of the municipal treasurer, known as local administrators or sub-administrators, copies of the notice were posted, also, in the barrios, including that of Masalukot, in which said property is situated; that copy of the notice was sent to Guillermo Martinez by regular mail, aside from the personal advise govern to him by the witness; that a month later, he prepared the corresponding notice of the tax sale to be held, which was, likewise, posted in said public places; that copy of this notice of sale was sent to Guillermo Martinez by registered mail, which he received, according to the registry card which was returned to the office of the municipal treasurer; that the date of the sale was postponed several times for lack of bidders; that the notice of sale was accordingly amended, after each postponement; that Martinez was duly notified of the amendment; that the amended notice of sale was posted in the public places already mentioned, as well as sent to all barrios of Candelaria, through the local administrators, whose duties were to collect taxes and post notices in their respective barrios; that before May 12, 1941, witness advised Guillermo Martinez to pay the taxes due from him, in order to avoid the tax sale; that Martinez promised to exert efforts to do so; that witness was present at the sale, which took place in the office of the municipal treasurer on May 12, 1941; that there was no bid for part of the property in question; that the only bid for the whole of it was made by appellee Vivencia Lucido; that she offered to pay therefor the sum of P37.20 the total amount of taxes due for the years 1938, 1939 and 1941 for which the property was sold to her and the certificate of sale (Exhibit A) executed; that copy of this certificate was sent to Guillermo Martinez by registered mail, which he received, as shown by the corresponding registry return card; that subsequently the witness saw Martinez whom he personally informed of the sale; that in reply Martinez stated that "he would find means with which to redeem his property in one year"; that Martinez failed, however, to do so; and that the records of the municipal treasurer of Candelaria, including the registry return cards above referred to, were destroyed by fire because the municipal building was burned on December 27, 1941. Gregorio Mia affirmed, furthermore, that he went to the house of Guillermo Martinez before the aforesaid sale, to ascertain whether he had personal property subject to distraint for the satisfaction of the taxes due from him, and that Martinez turned out to have personal property worth less than P100, besides a horse and a cow, all of which he considered exempt from distraint. The local administrator for the barrio of Malabanban, Natalio Escalona, another witness for the appellee, asserted that he notified Guillermo Martinez of the forfeiture of his property for tax delinquency; that, after the tax sale, he advised Martinez to redeem the property; that Martinez then said that he would sell it in order to pay the taxes due; and that notices of tax delinquency, in which the name of Martinez was included, were posted by him within his jurisdiction. Guillermo Martinez denied the receipt of notice of delinquency or sale, or having had any knowledge of the latter, and declared that otherwise he would have redeemed the property; that he had a horse, a calesa, a carabao, 2 pigs and a store which could have been distrained, if necessary, to pay the taxes already referred to; and that on August 25, 1942, before selling the property to the defendants, he tendered payment of the taxes due from him, but the office of the municipal treasurer merely collected from him the tax for the year 1942 (Exhibit 1). On cross-examination he admitted that he knew of his delinquency in the payment of taxes for the years 1938, 1939, and 1941. LLjur Jorge Isais testified that he did not know of the tax delinquency or tax sale at the time of the conveyance made to him and his co-defendants by Guillermo Martinez. Alejandro de Castro, Esteban Karandang, David Marasigan and Julito de Ramos stated that, although they, except the last, resided in Masalukot, none of them had seen any notice of sale of said property. These witnesses admitted, however, that they paid no attention to bulletin boards, where notices are usually posted. The first three asserted, moreover, that had they seen the notice of sale of said property, they would have offered to pay thereof from P80 to P100 per hectare. At the outset, it should be noted that the lower court did not order the inclusion of Guillermo Martinez as defendant, despite a motion filed by him to this effect, and that the sale made by him to the herein appellants was annulled by said court notwithstanding the fact that he is not a party to the proceedings. Owing to the necessity of giving him an opportunity to be heard, before the validity of his aforesaid act could be passed upon, this case would have to be remanded to the lower court, for amendment of the complaint, his inclusion as defendant and rehearing (Garcia vs . Reyes, 17 Phil., 127), were it not for the fact that this step is rendered unnecessary by the conclusion which we have reached in connection with the main issue in this appeal the legality of the tax sale in favor of plaintiff-appellee, Vivencia Lucido. A careful scrutiny of the record discloses the following flaws in the evidence in support of the validity of this sale, namely: 1. It has not been shown that the notice of sale was posted at the main entrance of the provincial building, for three consecutive weeks or for any length of time whatever. 2. Nothing in the record permits us to ascertain the contents of the notice of sale, more particularly, whether or not it "set forth the amount of the taxes and penalties due and the costs of sale, the date and place of the sale, . . . the approximate area; the lot number and the location, stating the street, number district, barrio, municipality and province where the real property to be sold is situated." The importance of these details is illustrated by the fact that the tax sale in Valencia vs . Jimenez (11 Phil., 492, 498-500) was annulled because the notice of sale therein given contained a defective description of the property to be sold. 3. There is no proof that the notice of sale was made "in English, Spanish and the local dialect commonly used," as provided in section 35 of Commonwealth Act No. 470. No effort has been exerted to establish compliance with this requirement. 4. There is no positive evidence that the notice of sale was posted "in a public and conspicuous place in the barrio wherein the property is situated "(section 35, Com. Act No. 470). Gregorio Mia's testimony to the effect that the notice was posted "in public places like the market, cockpit, vehicle's parking places, in the bulletin board of the municipal building and including Masalukot," is insufficient to establish either that the notice was posted in a "public and conspicuous place" in Masalukot or that there had been any posting at all therein, for this task was supposed to be undertaken, not by the witness but by the local administrator or sub-administrator. Hence, or cross-examination, Mia admitted that he did not know whether the notice was "actually posted or not" in the barrios. It is noteworthy that the testimony of Elpidio Morales, the local administrator for Masalukot, was not introduced by the appellees who have not tried to explain their failure to put him on the witness stand. 5. The tax sale was held in the office of the municipal treasurer, instead of "at the main entrance of the municipal government building or on the site of the real property to be sold, as the provincial treasurer or his deputy may decide" (sec. 36, Com. Act No. 470). There is no direct evidence that the office of the municipal treasurer was in the municipal building. This is merely intimated in Mia's assertion that the records of said office were destroyed when the aforementioned building was consumed by fire. In any event, there is not proof on whether this building consisted of several stories or not, or what part thereof housed said office, and how far it was from the main entrance to the building, and whether the place where the sale was made could be seen from that entrance. Assuming that the municipal building housed the office of the municipal treasurer, and that the sale took place, therefore, inside the building, was it valid or not? The cases of Scary vs . Lewis (30 N. E. 411, 133 Ind. 96), Hypes v. Nelson (144 N. E. 459, 63 Ind. App. 304), and Trumbull v. Jefferson Country (114 P. 186, 62 Wash. 503), are cited in Corpus Juris as supporting the affirmative answer (61 C. J. 1190). In the first case, it appeared from the evidence that the sale was held " at the place where the statute required the sale to be made ," although the certificate of sale did not show it clearly. The sales involved in the last two cases were held near the doors of the building named in the statute, in a hallway or open space visible from said doors . The place of the sale, in the third case, was such " that any person near such doors or upon the street in front thereof could see and hear what was being done ." (114 p. 187-188.) In the case at bar it does not appear whether or not the tax sale in question was made under these conditions. Moreover, the weight of authority is to the effect that "The tax sale must be held at the exact place designated by statute or named in the advertisement, otherwise it will be void , and this rule has been applied with such strictness that several cases hold that, where the statute directs the sale to be held before the courthouse door of the county, a sale made inside the courthouse is void and passes no title ." (61 C. J. 1189-1190, citing Lee Wilson & Co. v. Driver, 135 S. W. 915, 98 Ark. 337; Beacher v. Bray, 1 Root 459; Dixon v. Thompson, 98 N. W. 738, 52 Ind. App. 560; Richards v. Cole, 1 P. 647, 31 Kan. 205; Whitney v. Bailer, 92 N. W. 974, 88 Minn. 247; Thayer v. Hartman, 29 So. 396, 78 Miss. 590; Vasser v. George, 47 Miss. 713; Hill v. Turnverein Germania of Oklahoma City, 187 P. 920, 77 Okl. 242; Devenoport v.Wolf, 158 P. 382, 59 Okl. 92; Dauderdale v. Pierce, 131 N. W. 514, 27 S. D. 460; Keenan v. Slaughter, 108 S. W. 703, 49 Tex, Civ. App. 180; Scott v. Imperial Loan Co., 11 Man. 190; City of Tulsa v Edwards, 239 P. 572, 111 Okl. 251; Smith v. Cox, 22 So. 78, 115 Ala. 503; McNair v. Jenson, 33 Mo. 312; Rubey v. Huntsman, 32 Mo. 501; 82 Am D. 143; Keene v. Barnes, 29 Mo. 377; Semmers v. Ward, 23 S. E. 520, 41 W. Va. 76; Emphasis supplied). "Unless the collector acts as the law directs, he acts without authority and the sale in invalid, even if the requirement which he failed to comply with was not imposed for the protection of the owner of the land assessed ." Thus, tax sales, to be valid, must be made at the place, time, and in the manner required by law." (51 Am. Jur. 913.) This is a mere corollary of the principle that "Sales of land for delinquent taxes being in derogation of private rights of property, the power has been said to be strictissimi juris and statutes authorizing such sales must be strictly construed in favor of the owner of such land, or in so far as they are intended for the benefit, or the protection, of the citizen, and the scope of such statutes is never enlarged beyond their actual terms." "Proceedings for the sale of land for delinquent taxes must conform to the statutory requirements. As the rule is ordinarily stated, the provisions of the statute must be strictly complied with. And the requirement of strict compliance is particularly applicable to those provisions which tend to the security of the landowner or those intended for his benefit." (61 C. J. 1117-1118.) Hence, "In the absence of statutory provisions to the contrary, the burden of showing compliance with the statute is on him who claims under such sale, such as the purchaser, who must not only show that everything prescribed by the statute was complied with, but that everything required to be done was done exactly as prescribed ." (61 C. J. 1119; Emphasis supplied.) The foregoing view has long been adopted in this jurisdiction. In the language of our Supreme Court, the "law does not create a presumption of the regularity of any administrative action which results in depriving a citizen or taxpayer of his property, but, on the contrary , the due process of law to be followed in tax proceedings must be established by proof , and the general rule is that the purchaser of a tax title is bound to take upon himself the burden of showing the regularity of all proceedings leading up to the sale ." (Valencia vs . Jimenez, supra , quoted with approval in Gamo vs . Riosa Boyco, 29 Phil., 437.) Indeed, any other policy would be dangerous. The real estate tax authorized in the Assessment Law (Com. Act No. 470, section 5) constitutes a very small part (from 3/8% to 1%) of the assessed value which is often lower than the market value of the property taxed. It is obvious, therefore, that the taxpayer should not be deprived of his property for tax delinquency except in strict conformity with the law authorizing and regulating tax sales. Furthermore, 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. In the case at bar, for instance, a land of over 16 hectares, partly improved with coconut trees and with an assessed value of P1,260, was sold for the aggregate amount of taxes overdue, the paltry sum of P37.20. It is difficult to believe in the absence of satisfactory proof to this effect that the taxpayer preferred to forfeit the property than pay the tax, specially considering that more than 20 times the amount thereof could be obtained with part only of said property, as the sale for P800, made by Guillermo Martinez to the defendants, shows. It should be noted, also, that three other properties appear to have been sold to plaintiff-appellee, Pedro J. Katigbak who bid for the property in question, on behalf of his wife, plaintiff-appellee Vivencia Lucido in the same tax sale (see Exhibit D). Exact and complete adherence to the laws governing tax sales is indispensable, therefore, not only for the protection of the taxpayer, but, also to allay possible suspicion of collusion between the buyer and the public servants called upon to enforce such laws. In the tax sale under consideration, there is no evidence as to the contents of the notice of sale, or that said notice was made in "English, Spanish and the local dialect commonly used" in the region and posted "in a public and conspicuous place in the barrio wherein the property is situated," and at the main entrance of the provincial building, or as to how long it was posted. Besides, it appears that the sale was not held at the "exact place designated by statute," from which possible bidders may not have seen or noticed the sale made in the office of the municipal treasurer. Each and every one of these requirements are intended for the protection of the taxpayer, with a view to affording him ample opportunity to pay the overdue taxes on or before the sale and to secure the highest possible price thereat. In view of the foregoing, and considering that the only evidence on the service of notice of sale and of copy of the certificate of sale, but registered mail, on Guillermo Martinez, is the testimony of Gregorio Mia due to the alleged destruction by fire of the corresponding registry return cards it would clearly be injudicious to find that the law had, in the main, been observed and that the substantial rights of the taxpayer had not been jeopardized. Hence, the Court is not prepared to uphold the validity of the tax sale made in favor of plaintiff-appellee, Vivencia Lucido, and inasmuch, as both as plaintiff and as buyer at the tax sale, she has the burned of proving compliance with the law, and has not discharged this task satisfactorily is constrained to declare said sale null and void, for which reason the sum of P37.20 paid by her should be refunded by defendants-appellants, Jorge Isais, Aquilina Katuwiran, Fernando Guevara and Valentina Isais, said payment having inured to their benefit. Subject to this obligation to reimburse the sum of P37.20 to plaintiffs-appellees, Vivencia Lucido and Pedro J. Katigbak, with interest thereon at the rate of six per centum per annum from May 12, 1941, and without prejudice to the right, if any, of the defendants-appellants to demand reimbursement from Guillermo Martinez, the decision appealed from is, therefore, hereby reversed and amended complaint dismissed, without special pronouncement as to costs. It is so ordered. Montemayor, Pres. and Labrador JJ . , concur.