A young good looking man, came to our law office for help about the condominium unit that he co-owns, which the Muntinlupa City sold at public auction. Intelligent and truthful like his father, he admitted his failure to pay the real property taxes as he was busy helping people and attending to his business, yet he believed that there is violation of due process as he was not personally notified. He received a demand letter from a law firm that its client bought the property in a tax auction sale and for him to surrender the possession. By that time, his one year right to redeem has expired. In 2019, the property is worth P3 Million, but was sold for non-payment of real property taxes of P44,000.00. In search for truth, we discovered the city published in the newspaper the auction sale, served a personal notice to the administrator of the condominium and mailed one to his address in Manila. But, both did not reach him because the notice sent to the condominium bears a wrong unit number while the one sent to Manila bears no street name and number, but only the name of the building. Having handled similar cases, we told him about the case of Sps. Tan v. Bantegui, GR 154027 dated 24 October 2005. The facts are as follows:
In 1984, the Quezon City Treasurer sold the property at public auction for failure of Bantegui to pay P3,034.99 realty taxes. Sps. Capistrano won for ± 10,000.00 bid. In 1987, the title was transferred to Capistrano as the one-year redemption period expired. In 1988, the land was sold to Sps. Pereyra for ± 60,000.00 and the title transferred to them. They mortgaged the land to a bank. The landowner-lessor who was in USA and the lessee have no knowledge of all the transactions. A fire razed all land titles in QC Register of Deeds, Bantegui filed an administrative reconstitution and a new title was issued. In 1990, Bantegui tried to pay the real property taxes, but the QC Treasurer refused to accept her payment because the property was sold by Sps. Pereyras to Sps. Tan for ± 350,000.00. Just like the previous buyers, Sps. Tan neither possess nor inform the previous owner and the lessee of their title to the land. Sps. Tan filed an ejectment case at the Municipal Trial Court while Bantegui filed a case for annulment of sale at the Regional Trial Court. Sps. Tan won the MTC ejectment case but lost the RTC case. Sps. Tan appealed, but the Court of Appeals ruled in favor of Bantegui. On the issue of whether the tax auction sale was valid, the Supreme Court ruled that the tax sale did not conform to the law because there was no notice of delinquency or sale was given to the delinquent owner. The auction sale of real property for the collection of delinquent taxes is in personam [directly affects the person], not in rem [directly affects the real property]. The publication of the auction sale in a newspaper of general circulation is a notice to the public and effectively binds the property [rem], yet it is not binding to the property owner, who needs to be notified personally [in personam]. Considering that the procedure in tax sales is in personam, it is still incumbent upon the city treasurer to send the notice directly to the taxpayer – the registered owner of the property. Although preceded by proper advertisement and publication, an auction sale is void absent an actual notice to a delinquent taxpayer. The sale of real property for tax delinquency is in derogation of property rights and due process and the prescribed steps must be followed strictly. In this case, notices of delinquency or of sale were not given to the delinquent taxpayer. Those notices are mandatory, and failure to issue them invalidates a sale. Because it was in contravention of the law and jurisprudence, the subsequent sale of the real property did not make its purchaser the new owner. As there is failure to abide by the mandatory requirements of a proceeding in personam, the transferees [Capistrano, Pereyra and Tan who bought the land] cannot have a better title than that of the original owner, even if the titles were transferred to them. The subsequent titles issued to the prejudice of the rightful owner will produce no legal effects whatsoever. Being nullity, it produces no effect. They were not in good faith because they did not investigate before buying the property. A buyer of real estate at the tax sale obtains only such title as that held by the taxpayer, the principle of caveat emptor [buyer beware] still applies. If buyer did not investigate or take precaution despite certain facts, they cannot be considered in good faith. From a vendor who does not have any title to begin with, no right is passed to a transferee.
The case is just like our client Roberto S. Espiritu II beating all the odds, ran as independent and won as City Councilor of Manila.
