Cortez v. Ateneo De Manila

[CA No. 9587-R. August 12, 1953.] ROSA CORTEZ , plaintiff and appellant , vs . ATENEO DE MANILA , defendant and appellant . SYLLABUS 1. TAX SALE; POWER TO SELL LAND FOR UNPAID TAXES PURELY STATUTORY. It is a recognized principle of law that the power to sell land for unpaid taxes is purely statutory and must be expressly conferred (3 Cooley on Taxation, section 1381, p. 2725, 51 Am. Jur., s. 1026, p. 396). And when such power is granted, it must be exercised exclusively under its terms and in the special statutory mode (61 C. J., s. 1517, p. 1115). 2. ID.; ID.; COMPLIANCE OF STATUTORY REQUISITES NOT PRESUMED; PURCHASER'S DUTY TO PROVE THAT NONE OF THE REQUISITES WAS OMITTED. Exact and complete adherence to the law governing tax sales is indispensable; that each and every one of the requirements of the law should be complied with exactly as prescribed (Lucido vs . Isais, 48 Off. Gaz., No. 10, p. 4152; Laico vs . Calupitan, 47 Off. Gaz., No. 11, p. 5726). This doctrine finds support in American treatises and jurisprudence (3 Cooley on Taxation, section 1382, 61 C. J., section 1519, p. 1117; 51 Am. Jur., section 1045, p. 912, section 1060, p. 924; Warden Raterree, 215 Cal., 9 P. 2d. 215, 86 A.L.R., 1204). And the law does not presume that all the statutory requisites were complied with; it is the duty of the purchaser in a tax sale to prove that none of them was omitted. (Valencia vs . Jimenez, 11 Phil., 492.) 3. ID.; ID.; ID.; POSTING OF NOTICE OF SALE MOST IMPORTANT; SALE INVALID WITHOUT SUCH POSTING OF NOTICE Of all the prescribed requisites for a tax sale, the posting of the notice of sale "at the main entrance of the municipal building and in a public and conspicuous place on or adjacent to the real estate," for thirty days, is the most important, for as the Supreme Court of the United States has said: "all provisions regarding notice of sale are mandatory (Martin vs . Barbour, 140 U. S., 634, 35 L. ed., 546). Elaborating on this notice requirement, Cooley said: "a deviation, however small, must be fatal, because a rule of law cannot be made to fluctuate according to the degree and extent of its violation" (3 Cooley on Taxation, p. 2803). And should posting of the notice be not complied with, the sale will be invalid (Pedro vs . Grootemat, 174 Wis., 412, 183 N. W., 153). D E C I S I O N PEA , J p : Paulino Oandasan was the registered owner of two parcels of land covered by certificates of title Nos. 2185 and 2186 (Exhibits 3 and 4) and situated in the City of Baguio. In 1937 the Court of First Instance of Manila issued order of attachment against these properties for the prompt payment to the Ateneo de Manila of certain sums of money. Such attachments were duly noted on the back of said certificates of title and have never been cancelled. On June 10, 1944, Paulino Oandasan executed an absolute deed of conveyance of these two parcels of land in favor of the Ateneo de Manila (Exhibit 2), surrendering certificates of title Nos. 2185 and 2196 which, together with the absolute deed of conveyance, were forwarded by mail to the Register of Deeds of Baguio City (Exhibit 1) for registration. The register of deeds caused a primary entry in his records (Exhibits 6 and 6-A) and issued official receipt No. 1431172 which evidences the payment of the required registration fee (Exhibit 5). cdtech In the meantime, taxes for these two lots for the years 1945, 1946 and 1947 were not paid. Consequently, the City Treasurer of Baguio advertised these lots for sale, along with other delinquent real properties, in the The Baguio Midland Courier , fixing the date of sale at public auction on April 6, 1948. A notice of such sale was likewise sent by registered mail to the Ateneo de Manila, which was received by a certain Miguel Pagsuyin, supposed messenger of said entity, on March 24, 1948. On the date stated in said notice and in the The Baguio Midland Courier , the aforesaid parcels of land were sold at public auction for P820 to Rosa Cortez who was the highest bidder. As the taxes and the costs of publication aggregated only to P90.38, the remaining balance of P729.62 were retained by the City of Treasurer of Baguio who later on remitted the same to the aforenamed Paulino Oandasan upon the latter's request. However, no notice for that sale was posted at the main entrance of the City Hall of Baguio, nor in a public and conspicuous place on or adjacent to the lands in question as required by section 2571 of the Administrative Code. Neither was there any communication sent by the City Treasurer of Baguio to the Ateneo de Manila advising it of the sale made in favor of Rosa Cortez. Similarly, no certificate of such sale was delivered for registration to the Register of Deeds of Baguio City. On April 20, 1949, or one year after the sale of the two parcels of land at public auction, the City Treasurer of Baguio executed in favor of plaintiff Rosa Cortez a final deed of sale over the same properties. Immediately thereafter, Rosa Cortez delivered the instrument for registration to the Register of Deeds who refused to enter it in the registration book, for the reason alleged in his letter of April 21, 1951, addressed to her that he could not register the deed of sale in her favor unless the Court of First Instance of Baguio ordered him to do so. Rosa Cortez then petitioned the Court of First Instance of Baguio in case No. 1, G.L.R.O., Record No. 211, to cancel certificates of title Nos. 2185 and 2186, and to issue new certificates of title in lieu thereof (Exhibit P). As the Ateneo de Manila claimed ownership over said parcels of land, as purchaser from the original owner, Paulino Oandasan, the court dismissed plaintiff's petition and rendered an opinion that inasmuch as both parties claim ownership over the same properties under deeds of sale, the validity of those deeds of sale must be raised or attached in a direct civil action, and not in a collateral proceedings (Exhibit P-1). Thus, on June 18, 1951, Rosa Cortez filed a complaint in the Court of First Instance of Baguio City wherein she prayed 1. That the defendant be compelled to disclose the facts upon which it bases its claim, and that all of said pretensions asserted by the defendant against the plaintiff be passed upon and determined by the judgment of this court; 2. That the said defendant be declared in said judgment to have no title or interest of any kind in said real properties, and that title of the plaintiff thereto is valid and binding against the whole world; 3. That the defendant be perpetually restrained from asserting its supposed rights to said real property; 4. That the defendant be ordered to surrender to the plaintiff or the Register of Deeds of the City of Baguio owner's duplicate certificates of title Nos. 2185 and 2186; 5. That the plaintiff recover her damages against the defendant in the amount of P500; 6. That the defendant be ordered to pay the costs of this action, and that the plaintiff be granted such further and other relief as may be deemed proper. On the other hand, defendant Ateneo de Manila, in its answer containing specific denials, special defenses and counterclaim, prayed that judgment be entered 1. Dismissing the complaint; 2. Ordering the plaintiff to pay to the defendant the sum of P1,000 as damages by way of attorney's fees and other expenses; 3. To pay the costs of this suit; 4. Defendant further prays for such other reliefs as may be deemed just and equitable in the premises. Answering defendant's counterclaim, plaintiff prayed for its dismissal. After due trial the lower court rendered decision, the dispositive portion of which is as follows "In view of the foregoing considerations, the court orders plaintiff Rosa Cortez to permit defendant Ateneo de Manila to repurchase the two lots in question from her, within a period of sixty (60) days from the date this decision shall have become final, for the amount of eight hundred and twenty pesos (P820) with annual interest of fifteen per cent (15%) from April 6, 1948, the date of sale at public auction, until the date the whole amount of P820 with interests is returned to plaintiff. At the same time plaintiff receives the said amount of P820 plus interests above stated, she shall execute a deed of absolute sale in favor of defendant over the parcels of land in question, at the expense of defendant. Failure of defendant Ateneo de Manila to exercise the right of redemption within the time specified above, shall cause the automatic consolidation of ownership of plaintiff Rosa Cortez without the need of execution of any other document, in which event the defendant Ateneo de Manila shall deliver the two certificates of title on these lots in question to plaintiff. Defendant shall also pay the costs. "The City Attorney of Baguio is hereby ordered to make a thorough investigation of the criminal responsibility of Paulino Oandasan in demanding and receiving the amount of P720.62 from the City Treasurer of Baguio when the lots for which the said amount was paid was no longer his. Should said city attorney find Oandasan criminally responsible, he is hereby ordered to institute criminal proceedings against Oandasan immediately. Let copy of this decision be furnished the City Attorney of Baguio. "Damages asked by the parties in their respective pleadings are denied and dismissed for lack of evidence." Not agreeable with the statement of the trial court fixing the amount of repurchase at "Eight hundred twenty pesos (P820) with annual interest of fifteen per cent (15%) from April 6, 1948, the date of the sale at public auction, until the date the whole amount of P820 with interest is returned to the plaintiff". defendant Ateneo de Manila filed on January 16, 1952, a motion for reconsideration and new trial. Claiming that the aforesaid decision of the court a quo is contrary to law and that it is not supported by evidence adduced at the trial, plaintiff filed also a motion for reconsideration and new trial to which the defendant filed its opposition on February 8, 1952. On February 14, 1952, the trial court denied both motions for reconsideration and new trial of plaintiff and defendant. Consequently, both parties appealed from the decision of the lower court. In her brief, plaintiff maintains that the court a quo erred 1. In not holding that the validity of the tax sale cannot be assailed for lack of jurisdiction, and consequently, the trial court erred in finding that it is defective; 2. In not holding that the plaintiff has superior rights over the lots in question; 3. In holding that the final deed of sale in favor of plaintiff has not become final; 4. In ordering the plaintiff to permit the defendant to repurchase the two lots in question; 5. In not including in the amount of repurchase the taxes paid by the plaintiff subsequent to the tax sale; and 6. In refusing to grant the motion for new trial. Defendant-appellant submits that 1. The trial court erred in not ruling that the title, if any, acquired by the plaintiff-purchaser at the alleged tax sale is null and void. 2. The trial court erred in holding that the defendant-appellant must repurchase the two parcels of land in question at the amount of eight hundred twenty pesos (P820) with interest thereon at fifteen per cent (15%) per annum, until date of full payment. It is a recognized principle of law that the power to sell land for unpaid taxes is purely statutory and must be expressly conferred (3 Cooly on Taxation, section 1381, p. 2725, 51 Am. Jur., s. 1026, p. 396). And when such power is granted, it must be exercised exclusively under its terms and in the special statutory mode (61 C. J., s. 1517, p. 1115). It is not disputed, and no one would dispute it, that pursuant to sections 2570 and 2571 of the Revised Administrative Code, the City Treasurer of Baguio can dispose lands for the satisfaction of unpaid taxes under certain prescribed requisites which are as follows: 1. There must be a certified copy of the City Treasurer's record of delinquents, which shall be his warrant for his proceedings. 2. There must be an advertisement of the sale with the contents prescribed by law, which must be (1) by posting a notice for a period of thirty days and (2) by publication for three weeks. The posting must be both (1) at the main entrance of the municipal building, and (2) in a public and conspicuous place on or adjacent to the real estate. The publication must be in a newspaper of general circulation, once a week for three weeks. 3. If the taxpayer does not pay before the sale, the sale shall proceed which shall be made either at the main entrance of the municipal building, or (2) on the premises to be sold. 4. Within five days after the sale, the city treasurer shall make a return of the proceedings and spread it on his records. 5. The purchaser at the sale shall receive a certificate from the city treasurer which must be duly registered, showing: (a) the proceedings of the sale, (b) description of the property sold, (c) the name of the purchaser, (d) exact amount of all public taxes, penalties, and costs. Exact and complete adherence to the law governing tax sales is indispensable; that each and every one of the requirements of the law should be complied with exactly as prescribed (Lucido vs . Isais, 43 Off. Gaz., No. 10, p. 4152; Laico vs . Calupitan, 47 Off. Gaz., No. 11, p. 5726). This doctrine finds support in American treatises and jurisprudence (3 Cooley on Taxation, section 1382, 61 C. J., section 1519, p. 1117; 51 Am. Jur., section 1045, p. 912, section 1060, p. 924; Harden Raterree, 215 Cal., 9 p. 26, 215, 86 A.L.R., 1204). And the law does not presume that all the statutory requisites were complied with; it is the duty of the purchaser in a tax sale to prove that none of them was omitted. Thus, the supreme court said "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, 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.) After a thorough review of the record of this case, we failed to observe that all the prescribed requisites for a tax sale were complied with. Of all these requisites, to the mind of the Court, the posting of the notice of sale "at the main entrance of the municipal building and in a public and conspicuous place on or adjacent to the real estate," for thirty days, is the most important, for as the Supreme Court of the United States has said: "all provisions regarding notice of sale are mandatory" (Martin vs . Barbour, 140 U.S., 634, 35 L. ed., 546). Elaborating on this notice requirement, Cooley said: "a deviation, however small, must be fatal, because a rule of law cannot be made to fluctuate according to the degree and extent of its violation (3 Cooley on Taxation, p. 2803). And should posting of the notice be not complied with, the sale will be invalid (Pedro vs . Greotemat, 174 Wis., 412; 183 N. W., 153), because "If it was contemplated by section 1130 that a publication in a newspaper would comply with all of the requirements of the statute, it would have been superfluous to say anything at all with respect to the posting of the statement and notice. The publication and posting are treated as totally separate and distinct matters by the statute. They are separate and distinct means of giving notice to the public of delinquent and unpaid taxes; the object and purpose being to give the widest possible publication by both methods set forth in section 1130 of the statutes. xxx xxx xxx "Further, the word 'post' as used in section 1130 has a meaning distinct from what is implied by the term 'publication'. It means to 'attach to a post, a wall, or other place of affixing notices'." In view of the foregoing, and there being no clear showing that all the statutory requisites for a tax sale were complied with, we do not deem it necessary to discuss at length the importance of the other requirements of the law governing such sale, for non-compliance therewith, as in the instant case, adds to the nullity of the sale. For the lots in dispute, plaintiff Maria Cortez paid P820. The unpaid taxes for the years 1945, 1946, and 1947, including costs of publication, amounted only to P90.38. The balance of P729.62 in the form of check No. 661505 J, dated May, 1949, was paid by the City Treasurer of Baguio to Paulino Oandasan upon the latter's request. It is then plain that the excess amount of P729.62 was never turned over to the Ateneo de Manila, the owner of the two lots. It further appears that the land taxes for these two lots corresponding for the years 1948, 1949, 1950, and 1951 in the total sum of P199.98 were paid by Rosa Cortez, and the Ateneo de Manila having been benefitted thereby should reimburse this amount to her. With respect to the aforesaid amount of P729.62, the Ateneo de Manila cannot be held liable for the same, for the simple reason that it was not benefitted in this sum. For the recovery of this amount of P729.62, Rosa Cortez should direct her action against Paulino Oandasan who received the same and, perhaps, against the person that remitted that amount to Oandasan instead of to the Ateneo de Manila. In view of the foregoing, we declare that plaintiff's tax title is null and void and did not affect the rights of the Ateneo de Manila over the two lots in question. The latter, however, is sentenced to pay to Rosa Cortez the amount of P90.38 at 15 per cent interest annually from 1945 until paid, and the further sum of P199.98 without any interest. Wherefore, as thus modified, the judgment appealed from is hereby affirmed, without special pronouncement as to costs. LLphil It is so ordered. Felix and Gutierrez, JJ . , concur.