Corporate Strategies Development Corp. v. Norman A. Agojo
There could be no presumption of the regularity of any administrative action which resulted in depriving a taxpayer of his property through a tax sale.
G.R. No. 208740, 19 November 2014
Respondent Norman A. Agojo initiated a petition for the issuance of a new certificate of title for the property it bought through tax sale by an LGU. Petitioner Corporate Strategies Development Corp. (CSDC), which was the previous property owner, filed an opposition challenging the validity of the sale. They alleged: “that they did not receive a notice of tax delinquency or the warrant subjecting the property; that the pertinent notice and warrant were apparently sent to CSDC’s old office address at 6/F Tuscan Building, Herrera St., Legaspi Village, Makati City, despite its transfer to another location years ago; and that the sale violated the procedural requirements prescribed under the LGC. Specifically, they questioned the following: (a) the failure of the City Treasurer to exert further steps to send the warrant at the address where the property itself was located; (b) the failure to serve the warrant on the occupant of the property as mandated by Section 258 of the LGC; (c) the failure to serve the copies of the warrant of levy upon the Register of Deeds and the City Assessor of Makati prior to the auction sale following the said provision in relation to Section 260 of the LGC; (d) the failure to annotate the notice of levy on the title of the property prior to the conduct of the auction sale on May 24, 2006; and (e) the gross inadequacy of the bid price for the property considering that it only represented five (5) percent of the value of the property in the total amount of 35,000,000.00 based on the zonal valuation. Because of these alleged defects, petitioner assailed the auction sale for being defective pursuant to the provisions of the LGC.” To these, respondent invoked the rule on presumption of regularity.
HELD: The sale was not valid. “Under Section 75 of Presidential Decree (P.D.) No. 1529, otherwise known as the Property Registration Decree, the registered owner is given the right to pursue legal and equitable remedies to impeach or annul the proceedings for the issuance of new certificates of title upon the expiration of the redemption period. In this case, petitioners opposed the issuance of a new certificate of title in favor of the respondent on the ground that the auction sale was null and void…”
Citing jurisprudence, it was held that “there could be no presumption of the regularity of any administrative action which resulted in depriving a taxpayer of his property through a tax sale. This is an exception to the rule that administrative proceedings are presumed to be regular.” On the contrary, “the due process of law to be followed in tax proceedings must be established by proof and the general rule was that the purchaser of a tax title was bound to take upon himself the burden of showing the regularity of all proceedings leading up to the sale.”
Further, as previously held, it is incumbent upon a buyer “to prove the regularity of all proceedings leading to the sale for the buyer could not rely on the presumption of regularity accorded to ordinary administrative proceedings.”
Clearly, the jurisprudence on the matter clearly demonstrates that “the burden to prove compliance with the validity of the proceedings leading up to the tax delinquency sale is incumbent upon the buyer or the winning bidder, which, in this case, is the respondent. This is premised on the rule that a sale of land for tax delinquency is in derogation of property and due process rights of the registered owner. In order to be valid, the steps required by law must be strictly followed. The burden to show that such steps were taken lies on the person claiming its validity, for the Court cannot allow mere presumption of regularity to take precedence over the right of a property owner to due process accorded no less than by the Constitution.”
Respondent failed to establish that the following requirements were followed. “Under Section 254 of the LGC, it is required that the notice of delinquency must be posted at the main hall and in a publicly accessible and conspicuous place in each barangay of the local government unit concerned. It shall also be published once a week for two (2) consecutive weeks, in a newspaper of general circulation in the province, city, or municipality.”
Moreover, “Section 258 of the LGC further requires that should the treasurer issue a warrant of levy, the same shall be mailed to or served upon the delinquent owner of the real property or person having legal interest therein, or in case he is out of the country or cannot be located, the administrator or occupant of the property. At the same time, the written notice of the levy with the attached warrant shall be mailed to or served upon the assessor and the Registrar of Deeds of the province, city or municipality within the Metropolitan Manila Area where the property is located, who shall annotate the levy on the tax declaration and certificate of title of the property, respectively.”
In addition, “Section 260 of the LGC also mandates that within thirty (30) days after service of the warrant of levy, the local treasurer shall proceed to publicly advertise for sale or auction the property or a usable portion thereof as may be necessary to satisfy the tax delinquency and expenses of sale. Such advertisement shall be effected by posting a notice at the main entrance of the provincial, city or municipal building, and in a publicly accessible and conspicuous place in the barangay where the real property is located, and by publication once a week for two (2) weeks in a newspaper of general circulation in the province, city or municipality where the property is located.”
The requirements for a tax delinquency sale under the LGC are mandatory. “Strict adherence to the statutes governing tax sales is imperative not only for the protection of the taxpayers, but also to allay any possible suspicion of collusion between the buyer and the public officials called upon to enforce the laws. Particularly, the notice of sale to the delinquent land owners and to the public in general is an essential and indispensable requirement of law, the non-fulfilment of which vitiates the sale. Thus, the holding of a tax sale despite the absence of the requisite notice, as in this case, is tantamount to a violation of the delinquent taxpayer’s substantial right to due process.”