Asto. Adm. No. 743 - Aguirre vs. Ramos

Corporate Strategies Development Corporation (CSDC) is the registered owner of a parcel of land in Makati City, identified as Lot 18, Block 29 of Pcs-1310 under TCT No. 125211, with corresponding Tax Declarations Nos. F00401455 and F00401456.
Rafael R. Prieto, acting in capacity associated with CSDC, is among the petitioners; Norman A. Agojo is the respondent.
The dispute centers on the validity of an auction sale of the land conducted by the City Treasurer of Makati.

Between 1994 and 2006, real property taxes amounting to P1,458,199.85 remained unpaid.
On April 7, 2006, a warrant was issued under Section 258 of the Local Government Code (LGC) due to the delinquency, which subjected the property to levy.
A public auction sale was held on May 24, 2006, wherein respondent (Agojo) became the highest bidder with a bid amount of P2,000,000.00.
The certificate of sale was issued on the date of the auction and subsequently registered with the Registry of Deeds.
After the expiration of the one-year redemption period and issuance of the Final Deed of Conveyance on July 3, 2007, respondent filed a petition for the issuance of a new certificate of title with the RTC (LRC Case No. M-5050).

The RTC docketed the case on February 13, 2008, setting it for a hearing and serving the notice to interested parties including the petitioners, the Land Registration Authority, and the Register of Deeds.
Opposition was filed by CSDC on August 22, 2008, and by Prieto on October 20, 2008.
Petitioners contended that:

They did not receive any notice of tax delinquency or warrant of levy because such notices were sent to an old office address.
The City Treasurer failed to send the warrant to the address where the property was located.
There was non-service of the warrant to the property’s occupant.
The Register of Deeds and City Assessor were not properly notified prior to the auction.
The notice of levy was not annotated on the title before the sale.
The bid price was grossly inadequate (only five percent of the zonal valuation of P35,000,000.00).

CSDC also moved to deposit P3,080,000.00 as a guarantee for respondent in case the sale was declared void, a motion granted by the RTC.

On January 15, 2010, the RTC nullified the auction sale on the ground that there was failure to present sufficient and competent evidence regarding compliance with legal requirements.
The respondent appealed to the Court of Appeals (CA), which initially affirmed the RTC decision on January 26, 2012, emphasizing non-compliance with the statutory requirements for notice and publication under the LGC.
On February 29, 2012, respondent moved for reconsideration.
On March 18, 2013, the CA reversed its earlier decision by relying on the presumption of regularity of the City Treasurer’s actions, thereby declaring the auction sale valid and directing issuance of a new certificate of title in favor of respondent.
In a subsequent resolution dated August 15, 2013, the CA denied petitioners’ motion for reconsideration.

Error in applying the presumption of regularity to a tax delinquency sale.
Error in disregarding the mandatory legal requirements for a valid tax delinquency sale.
Erroneously shifting the burden of proof to petitioners regarding the sale’s validity.
Failure to consider the gross inadequacy of the bid price.

Petitioners argued that administrative actions resulting in the deprivation of property through a tax sale should not enjoy the presumption of regularity.
They asserted that the burden to prove the compliance with statutory requirements (notice of delinquency, levy, publication, and annotation) lies with the respondent.
Additional issues involved technical allegations regarding the MCLE certificate compliance of petitioners’ counsels, which were later rectified.

Whether the presumption of regularity of an official act applies to tax delinquency sales that result in the deprivation of a property owner’s rights.

Whether the City Treasurer and other officials complied with the LGC requirements concerning:

Whether the burden to prove compliance with the mandatory statutory procedures for a tax delinquency sale rests on the respondent or should be borne by the petitioners challenging the sale.

Whether the gross inadequacy of the bid price—representing only five percent of the property’s zonal valuation—renders the auction sale invalid.