Title
City Government of Antipolo vs. Transmix Builders and Construction, Inc.
Case
G.R. No. 235484
Decision Date
Aug 9, 2023
Clarisa Santos sold properties to Transmix Builders, which failed to update tax declarations. Antipolo City levied and auctioned the properties for unpaid taxes, sending notices to Santos, not Transmix. The Supreme Court ruled the forfeiture void due to lack of due process, ordering reconveyance to Transmix, which had paid under tax amnesty.
levy
sale
forfeiture

Case Summary (G.R. No. 235484)

Factual Background

Clarisa San Juan Santos originally owned three parcels of land in Antipolo City which were transferred in January 1997 to Transmix Builders & Construction, Inc., and new Transfer Certificates of Title were issued in the name of respondent. Respondent did not immediately transfer the tax declarations into its name. In October and November 2005 the City Treasurer published notices of delinquency and issued warrants of levy; the warrants and auction notices were mailed to Santos at the address reflected in the tax declarations. A public auction was held on December 28, 2005; for want of bidders the properties were forfeited in favor of the City Government of Antipolo and declarations of forfeiture were issued that same date. Respondent later sought to settle and paid delinquent real property taxes and availed of a city amnesty ordinance in November 2010, but the City Treasurer placed respondent’s payments in trust pending resolution; the City Government eventually caused titles to be registered in its name on March 28, 2011.

Trial Court Proceedings

Respondent filed a Complaint on December 18, 2014, seeking declaration of nullity of the public auction, certificate of sale, titles, and reconveyance. The Regional Trial Court declared in its November 18, 2016 Decision that petitioner’s forfeiture proceedings were void because the tax delinquency had effectively been condoned under the City Ordinance and respondent had settled the taxes; the RTC ordered reconveyance of the properties to respondent. By Order dated October 2, 2017 the RTC amended its decision to nullify the forfeiture proceedings of December 28, 2005, direct cancellation of titles in the City Government’s name, reinstate respondent’s TCTs, and return to respondent the deposit of Php7,787,459.36.

Issues Presented

The Supreme Court framed the issues as: (1) whether the levy, sale, and forfeiture of the subject properties were valid; (2) whether petitioners are estopped from asserting forfeiture because they accepted respondent’s tax payments; and (3) whether the deposit consigned by respondent should be returned.

Parties’ Contentions

Petitioners contended that condonation could not be extended to respondent because statutory condonation under the LGC requires a specifically enacted ordinance tied to calamity or similar grounds and must operate prospectively under Sec. 276; that the City Ordinance did not apply to properties already disposed at public auction; that the treasurer properly sent notices to the address shown in the tax declarations pursuant to P.D. No. 464, Sec. 73; and that the State cannot be estopped by the acts of its officers. Respondent argued that, under the Torrens system, the City Treasurer had constructive notice of respondent’s status as registered owner and thus should have mailed or served the warrant of levy to respondent as shown on the TCTs; respondent further maintained that the presumption of regularity does not apply where taxpayers are deprived of property and that acceptance of payment could not validate a void sale.

Procedural Threshold for Review

The Court first addressed procedural propriety of a direct appeal from the RTC to the Supreme Court and held that the appeal complied with Rule 45 because the RTC acted in its original jurisdiction and the petition raised only pure questions of law regarding the legal effect of notice and estoppel, making a Rule 45 review proper.

Ruling of the Supreme Court

The Supreme Court denied the petition and affirmed the November 18, 2016 Decision and the October 2, 2017 Order of the RTC. The Court held that the levy, sale, and forfeiture were void for lack of due process because the City Treasurer failed to mail or serve the warrant of levy to the delinquent owner as defined by Sec. 258 of the LGC, namely the person registered as owner under the Torrens system.

Legal Basis and Reasoning on Notice

The Court analyzed the legislative history and the change in phraseology from “taxpayer” in P.D. No. 464, Sec. 73, to “delinquent owner” in Sec. 258 of the LGC, and found the change intentional and determinative. The Court explained that tax sale proceedings are in personam, that publication and posting are insufficient for due process, and that personal notice to the registered owner is essential. The Court held that, consistent with the principle of indefeasibility of Torrens title expressed in P.D. No. 1529, Sec. 51, the treasurer must regard the certificate of title as constructive notice and therefore mail or serve the warrant to the registered owner shown on the TCT. The Court cited prior decisions, including Valencia v. Jimenez, Talusan v. Tayag, Estate of Jacob, Sarmiento, and Cruz v. City of Makati, to reiterate that failure to notify the registered owner vitiates the sale and that the taxing authority bears the burden of proving strict compliance with procedural requirements.

Application of Precedent and Rejection of Petitioners’ Theories

The Court rejected petitioners’ reliance on cases decided under P.D. No. 464 where the treasurer’s reliance on tax rolls could suffice, observing that the LGC expressly changed the duty to notify. The Court found the facts analogous to Estate of Jacob, where the treasurer’s reliance on tax declarations rather than the Register of Deeds led to annulment of the sale. The Court held that respondent’s failure to declare the property for taxation did not absolve the treasurer of the duty to ascertain the registered owner from the certificate of title or to have the assessor declare the property under Sec. 204 of the LGC when owners fail to declare.

City Ordinance Amnesty and the Deposit

The Court determined that respondent properly availed of the amnesty under the City Ordinance because the forfeiture proceedings were void and the properties therefore remained subject to the amnesty’s terms; the Court construed the City Ordinance’s exclusion for properties “disposed of at public auction” as inapplicable when the auction was void for lack of due process. Because respondent had paid the delinquent RPT for the periods in question under the amnesty, the Court affirmed the RTC’s order returning the Php7,787,459.36 deposit, reasoning that Sec. 267 of the LGC authorizes return when the action succeeds and that to withhold the deposit would unjus

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