LILIA APAS, PLAINTIFF-APPELLANT, VS. ROY SALUBRE, IN HIS PERSONAL CAPACITY AND IN HIS CAPACITY AS THE PROVINCIAL TREASURER OF THE PROVINCE OF CEBU; PALMA BATOBALANOS IN HER PERS…
INGLES, G. T., J.:
Assailed in this appeal filed under Rule 41 of the 1997 Rules of Civil Procedure, as amended, are the Resolution[1] dated 12 January 2012 rendered by the Regional Trial Court, 7th Judicial Region, Branch 28 of Mandaue City, and its Order[2] denying reconsideration dated 28 May 2012, in Civil Case MAN-6634. The Resolution dismissed the complaint on ground of lack of jurisdiction for non-payment of “a deposit equivalent to the amount of the sale at public auction plus two percent (2%) interest per month from the date of the sale to the time of the institution of the action” as required in Section 267 of the RA 7160.
THE FACTS
Culled from the records are the following facts:
A Certificate of Sale of Delinquent Real Property to Purchaser[3] dated July 1, 2009 with number COS No. 01-11-2009 was issued by the Office of the Provincial Treasurer of the Cebu Province, the pertinent portion whereof reads, as follows:
“I HERERBY CERTIFY that after having been duly advertised for sale in accordance with Section 260 of Republic Act No. 7160 (The Local Government Code of 1991), the delinquent real property herein below described has today been sold at public auction at CONSOLACION, Cebu to Marilyn Celocia, a Filipino citizen, single, of legal age, a resident of Paso, Cansaga, Consolacion, Cebu, for the sum of THIRTY-EIGHT THOUSAND FIVE HUNDRED PESOS ONLY (P38,500.00) as total price sale, payment of which is hereby acknowledge[d] to have been received from him/her as per Official Receipt Nos. x x x.
x x x x
Description of the Property Sold
x x x x”
By its Memorandum[4] dated 8 September 2010, the Office of the Treasurer in the Province of Cebu ordered Lilia Apas to vacate the subject property within thirty (30) days from receipt thereof.
On 7 March 2011, the Government Security and Insurance Service (GSIS) executed a Deed of Absolute of Sale[5] over the subject lot, in favor of Spouses Lilia S. Apas and Rogelio C. Apas.
Hence, the complaint[6] filed against Roy Salubre, the Provincial Treasurer of the Province of Cebu, Palma Batobalonos of the Provincial Treasurer’s Office of Cebu (Land Tax Division), Marilyn Celocia, purchaser of the subject property at the public auction, and the V & G Better homes Subdivision. In her complaint, Lilia Apas mainly alleged that she purchased the subject lot through a loan obtained from the GSIS, and that on March 7, 2011, the GSIS executed a deed of absolute sale over the subject lot in their favor. She further alleged that, without her knowledge and that is, prior to the execution of this deed of sale, the subject lot was already sold at public auction as can be gleaned from the Memorandum issued by the Provincial Treasurer Roy Salubre with the attached Certificate of Sale of Delinquent Real Property to Purchaser. That, upon receipt of the memorandum, she approached defendants Salubre and Batobalonos to manifest her desire to pay the unpaid taxes but was denied as it has already been sold to the highest bidder, Marilyn Celocia. She added that Amelina Batobalonos, sister-in-law of Palma Batobalonos, likewise, submitted a bid. She continued that V & G Subdivision, the owner and seller of the subject lot, failed and refused to inform her of all the tax liabilities and that, it allowed Roy Salubre and Palma Batobalonos to pursue the public auction in violation of her constitutional rights to due process. She prayed for the issuance of a temporary restraining order (TRO) and/or preliminary prohibitory injunction to restrain or enjoin the defendants from continuing further their illegal acts.
In their Answer,[7] Roy Salubre and Palma Batobalonos countered that it is not true that Lilia Apas did not know about the notice of delinquent payment of taxes before the public auction sale. In fact, A Notice of Warrant of Levy[8] and Warrant of Levy[9] were sent and received by Lilia Apas as shown in the photocopies thereof. Then, a Notice of Auction Sale was posted at the bulletin board of Barangay Nangka where the subject lot is located as can be gleaned from Certification[10] issued by the Office of the Barangay Captain of Barangay Nangka. Another copy of the Notice of Auction Sale[11] was posted at the bulletin board at the Office of the Municipal Treasurer of Consolacion as evidenced by the Certification issued by the said office. Too, the Notice of Auction Sale was published for three (3) times in the Sun Star Daily on June 5, 6, and 7, 2009. Without any doubt, Lilia Apas should have already learned about the delinquent payment of her property. In fact, she failed to present any documents to prove that she paid the real property taxes due on the subject property which are necessary expenses for the maintenance thereof. Hence, there is no one to blame but herself. Anent the allegation that Amelina Batobalonos was one of the bidders at the auction sale of the subject property, such an allegation has no basis as the said person was not present thereat neither did she have any participation in the said transaction as can be seen in the Attendance Sheet[12] dated June 26, 2009. The plea for issuance of a TRO and/or injunction would serve no purpose as the auction sale was done in accordance to law and legal procedure.
In her Reply to the Answer with Compulsory Counterclaim[13] filed by Roy Salubre and Palma Batobalonos, Lilia Apas insisted not receiving the Notice of Warrant of Levy and the Warrant of Levy. The signature appearing in the received stamp is not hers. The allegation that the redemption period commenced on the date of the public auction is incorrect and has no basis in law. Section 28, Rule 39 of the Rules of Court provides that the period of redemption shall be within one (1) year from the date of the registration of the certificate of sale and not from the time of the public auction sale. To add, the sale was not yet registered hence she can still redeem the subject property. Whether or not the purchaser at the auction sale does not want to re-sell the subject property to her is of no moment as the law is clear that she can still exercise the right to redeem the same.
In her Answer with Counterclaim,[14] Marilyn Celocia averred that she learned about the auction sale from the newspaper where the notice of auction sale was published. There would have been no auction sale if only Lilia Apas had been religious in the payment of taxes. Her failure to pay the realty taxes due on the subject property resulted to its forfeiture in favor of the government. And that, the proceedings that transpired before and during the auction sale conducted by the Province of Cebu, which proceedings are being questioned by Lilia Apas, deserve the presumption of regularity. By special and affirmative defenses, Marilyn Celocia asseverated that the right of Lilia Apas to redeem has already prescribed pursuant to the law applicable in this instance, which is RA 7160 or the Local Government Code of 1991, specifically Section 261 thereof. This law does not mention that the period of redemption shall be reckoned from the date of issuance of the certificate of sale. On this ground alone, the complaint should be dismissed. Another reason to justify the instant complaint’s dismissal is Section 267 of RA 7160 which provides for the deposit with the court of the amount of the purchase price plus two percent (2%) interest per month from the date of sale to the time of the filing of the instant complaint. Failing which, is fatal to the cause of Lilia Apas.
In her Reply with Answer to Compulsory Counterclaim,[15] Lilia Apas denied paragraph 7 of Marilyn Celocia’s Answer. Lilia Apas alleged that there would be lack of due process if the redemption period would be counted from the date of the issuance of the certificate of sale. She added that the redemption period provided by law is precisely for the benefit of the owner of the property. On this consideration, the redemption period has not yet expired hence, she is still entitled to redeem the subject property. In not allowing her to redeem would easily deprive her of this right. As to the deposit contemplated in RA 7160, she is very much willing to deposit the same as she manifested in the previous hearing.
On 12 January 2012, the RTC issued the assailed Resolution, the fallo of which reads as follows:
“WHEREFORE, due to the foregoing premises, this case is hereby DISMISSED for the Court has not acquired jurisdiction over the petitioner’s complaint.
Notify parties through their respective counsel, of this Order.
IT IS SO ORDERED.”[16]
Lilia Apas filed a motion for reconsideration[17] of the Resolution dismissing her complaint. Therein, she averred that prior to receipt of the said resolution, she, for several times, talked to a court staff to inquire when she should make the required deposit. That, the first time she called the court, she was told to call back after a week because the person in charge was on leave. The next time she called the court, she was told to just wait for the RTC’s order to direct her to make the deposit. That is why, she was surprised to learn after her last call to the court that her case was already dismissed. She maintained that she is very much willing and ready to give the required deposit. She, thus, prayed that she be allowed to make the deposit and, that, the instant case be reinstated.
The RTC, however, denied the motion for reconsideration, viz –
“WHEREFORE, above premises considered, petitioner’s Motion for Reconsideration is hereby DENIED for lack merit.
IT IS SO ORDERED.”
Hence, this appeal, where Lilia Apas, now plaintiff-appellant, assigns this sole error:
“The trial court gravely erred in its Order dated January 12, 2012 as it is not in accord with the decided cases of the Supreme Court in National Housing Authority vs. Iloilo City, Et. Al., G. R. No. 172267, August 20, 2008 and GSIS vs. City Treasurer and City Assessor of the City of Manila, G.R. No. 186242, December 23, 2009.”
THE ARGUMENTS
The plaintiff-appellant’s
Plaintiff-appellant stresses that the subject property was still owned and registered under the name of GSIS when it was sold at public auction sale conducted by the Province of Cebu on June 26, 2009 to satisfy her real property tax delinquency. In fact, the Supreme Court in GSIS v. The City Treasurer and the City Assessor of the City of Manila, declared that the GSIS enjoys under its charter full tax exemption and as an instrumentality of the national government is not liable to pay real estate taxes. The Supreme Court added in the same case that even assuming that the property is taxable under the beneficial use rule, still the property cannot be subject to a public auction sale notwithstanding its realty tax delinquency. In view of the foregoing, the Province of Cebu has absolutely no legal basis to sell the subject property belonging to the GSIS at a public auction sale to satisfy tax delinquency. Consequently, the auction sale conducted by the Province of Cebu is null and void. And since, the properties of the GSIS cannot be auctioned then Section 267 of RA 7160 (the Local Government Code) will not apply. The same doctrine was enunciated in the case of NHA v. Iloilo City (G.R. No. G.R. No. 172267, August 20, 2008).
Defendant-appellee Marilyn Celocia’s
For one, the appeal is dismissible on grounds of lack of proper verification and certification against forum shopping.
For another, the assigned error was not raised as an issue during the trial at the lower court. As elucidated in a catena of cases and more specifically in Mendoza v. CA (274 SCRA 527 [1997]), the Supreme Court held that: “Points of law, theories, issues and arguments not adequately brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court as they cannot be raised for the first time on appeal. Basic considerations of due process impel this rule.”
The cases cited by the plaintiff-appellant, to wit: NHA v. Iloilo City and GSIS v. City Treasurer, et. al., are not applicable in the case at bar because the properties subject therein are all directly used by the GSIS and NHA, for its own benefit and welfare. This being so, both instrumentalities are exempted from payment of real property tax.
This case is, however, different from the afore-cited cases. Here, the subject property is being used by the plaintiff-appellant and has been in her possession for a long time now. That, the subject property was purchased from V & G Better Homes Subd. through loan obtained from the GSIS. Truly, the GSIS is not the beneficial user of the subject property. Although the said property was registered in the name of the GSIS, title thereto was transferred/ceded for a consideration to the plaintiff-appellant, who is a taxable person. The only concern of the GSIS is for the loan or encumbrance to be re-paid. True, the GSIS is not taxable but the Supreme Court in GSIS v. City of Treasurer declared that “the unpaid tax attaches to the property and is chargeable against the taxable person who had actual or beneficial use and possession of it regardless of whether or not he is the owner.”
The defendant-appellees Roy Salubre,
represented and substituted by
Emmanuel G. Guial, and Palma Batobalonos
That, Section 4, Rule 7 of the 1997 Rules of Civil Procedure, as amended, explicitly provides that a pleading must contain the required verification and certification on forum shopping.
That, the instant complaint alleged, among others, that the subject property is owned by V & G Better Homes Subdivision, Inc. and not by the GSIS. The change of stand by the plaintiff-appellant is merely to suit their allegations in her appeal. Moreover, the issue of ownership of the subject property by the GSIS was not taken up during the proceedings before the trial court, understandably, not considered by the trial court when it issued the assailed Resolution and Order. As explained in PNB v. Sps. Angelito and Jocelyn Perez (G.R. No. 187640, June 15, 2011) and Sps. Angelito and Jocelyn Perez v. PNB, (G.R. No. 187687, June 15, 2011), “matters not raised in the trial court or lower courts cannot be raised for the first time on appeal. They must be raised seasonably in the proceedings before the lower courts. Questions raised on appeal must be within the issues framed by the parties; consequently, issues not raised before the trial court cannot be raised for the first time on appeal.”
That, the proper object of this appeal should be the issue of jurisdiction concerning violation of Section 267 of RA 7160.
THE ISSUE
At the core of the controversy is the issue of whether the plaintiff-appellant is exempt from payment of the deposit required in Section 267 of the Local Government Code.
OUR RULING
The appeal lacks merit.
Plaintiff-appellant cannot claim
Plaintiff-appellant relies heavily on GSIS v. City Treasurer,[18] wherein the Supreme Court ruled that properties belonging to any instrumentality of the national government such as the GSIS are exempt from all kinds of taxes, including realty taxes. As a consequence of such exemption, GSIS properties are exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative agencies. The Supreme Court in that case declared void the real property tax assessments issued by the City of Manila to the GSIS.
More on this point, the plaintiff-appellant cites the case of NHA v. Iloilo City.[19] Therein, the Supreme Court held, that,
Clearly, the deposit precondition is an ingenious legal device to guarantee the satisfaction of the tax delinquency, with the local government unit keeping the payment on the bid price no matter the final outcome of the suit to nullify the tax sale. Thus, the requirement is not applicable if the plaintiff is the government or any of its agencies as it is presumed to be solvent, and more so where the tax exempt status of such plaintiff as basis of the suit is acknowledged. In this case, NHA is indisputably a tax-exempt entity whose exemption covers real property taxes and so its property should not even be subjected to any delinquency sale. Perforce, the bond mandated in Section 267, whose purpose it is to ensure the collection of the tax delinquency should not be required of NHA before it can bring suit assailing the validity of the auction sale.
Note should be taken that NHA had consistently insisted on the nullity of the proceedings undertaken by respondent Iloilo City which eventually led to the public auction sale of its property. Since, as had been resolved, NHA is liable neither for real property taxes nor for the bond requirement in Section 267, it necessarily follows that any public auction sale involving property owned by NHA would be null and void and any suit filed by the latter questioning such sale should not be dismissed for failure to pay the bond.
NHA cannot be declared delinquent in the payment of real property tax obligations which, by reason of its tax-exempt status, cannot even accrue in the first place. Nonetheless, because respondent Iloilo City filed a motion to dismiss NHA’s Complaint dated 5 June 2002 based on Section 267 and not an answer, it is both proper and prudent to remand the case to the trial court in order to afford respondent Iloilo City full opportunity to be heard on the matters raised in the complaint.
In both cases, the parties claiming exemption are GSIS and NHA. But this is not so in the case at bar. Here, the party claiming exemption for GSIS is the plaintiff-appellant. To re-iterate, the subject property was still GSIS property at the time it was sold at public auction. That is why, it is GSIS that should have claimed exemption from payment of the realty tax and of the deposit required in Section 267 of the Local Government Code and not the plaintiff-appellant.
Therefore, the plaintiff-appellant not being exempt from the payment of the deposit required in Section 267 of the Local Government Code, the RTC correctly dismissed the instant complaint for lack of jurisdiction. Thus, the RTC ratiocinated,
“As provided in Sec. 267 of the RA 7160, otherwise known as the Local Government Code as follows:
‘Sec. 267. Action Assailing Validity of Tax Sale. – No court shall entertain any action assailing the validity of any sale at public auction of real property or rights therein under this Title until the taxpayer shall have deposited with the court the amount for which the real property was sold, together with interest of two percent (2%) per month from the date of sale to the time of the institution of the action. The amount so deposited shall be paid to the purchaser at the auction sale if the deed is declared invalid but it shall be returned to the depositor if the action fails.’
As is apparent from a reading of the foregoing provision, a deposit equivalent to the amount of the sale at public auction plus two percent (2%) interest per month from the date of the sale to the time the court action is instituted is a condition – a ‘prerequisite’ – which must be satisfied before the court can entertain any action assailing the validity of the public auction sale. The law, in plain and unequivocal language, prevents the court from entertaining a suit unless a deposit is made. This is evident from the use of the work ‘shall’ in the first sentence of Section 267. Otherwise stated, the deposit is a jurisdictional requirement the non-payment of which warrants the failure of the action. Mere intention to pay the deposit does not satisfy the requirement of the law.
The essence of the deposit requirement, to be sure, is not a tax measure. As expressed in Section 267 itself, the amount deposited shall be paid to the purchaser at the auction sale if the deed is declared invalid; otherwise, it shall be returned to the depositor. The deposit, equivalent to the value for which the real property was sold plus interest, is essentially meant to reimburse the purchaser of the amount he had paid at the auction sale should the court declare the sale invalid.
In this regard, National Housing Authority v. Iloilo City holds that the deposit required under Section 267 of the Local Government Code is a jurisdictional requirement, the non-payment of which warrants the dismissal of the action. Because petitioners in this case did not make such deposit, the herein court never acquired jurisdiction over the complaint.”[20] (Underscoring ours)
Verily, Section 267 of the Local Government Code is couched in clear and unequivocal terms on the matter of payment of the deposit alluded therein, that is, “no court shall entertain any action assailing the validity of any sale at public auction of real property or rights therein under this Title until the taxpayer shall have deposited” the required amount. Elsewise stated, for the court to acquire jurisdiction over an action questioning the validity of the auction sale conducted by a local government unit, the party questioning the such sale must deposit the money required in Section 267 of the Local Government Code. For emphasis, the Supreme Court in Wong v. City of Iloilo[21] ruled that,
In this regard, National Housing Authority v. Iloilo City holds that the deposit required under Section 267 of the Local Government Code is a jurisdictional requirement, the nonpayment of which warrants the dismissal of the action. Because petitioners in this case did not make such deposit, the RTC never acquired jurisdiction over the complaint.
This is exactly what happened in this instance. Here, the plaintiff-appellant did not endeavor to make the required deposit even after the RTC dismissed her complaint on ground of lack of jurisdiction for non-payment thereof. She claimed that she waited for the court personnel in-charge, who was on-leave, so she can make the deposit. But why the wait? She already learned the reason for the dismissal of her complaint yet she did not do anything. It may be well to stress that she was assisted by counsel when she filed a motion[22] to reconsider the RTC’s dismissal of her complaint yet no payment of the required deposit was made upon the filing of such motion. In fact, the RTC in denying plaintiff-appellant’s motion for reconsideration reasoned that,
“Considering that defendant has already raised the issue, plaintiff should have deposited first the amount of which the real property was sold together with the interest of 2% per month in the Office of the Clerk of Court (OCC) and not in this court in order to remove the jurisdictional impediment not awaiting further order from the court in directing her to make the deposit, the jurisdictional requirement would have been satisfied.
Thus, after a thorough examination of the allegations and arguments raised by petitioner, the court finds no compelling and cogent ground that would call for the reversal or modification of the assailed Resolution.”[23]
Definitely, the RTC had every reason to dismiss the complaint being cognizant of the well-established doctrine that where jurisdiction is absent the court cannot pass upon the merits of a case. It is elementary that a court must acquire jurisdiction over a case before it can validly act therein.
IN LIGHT OF THE FOREGOING, the appeal is DISMISSED, the assailed Resolution dated 12 January 2012 issued by the Regional Trial Court, Branch 28, Mandaue City in Civil Case No. MAN-6634 and its Order dated 28 May 2012 denying reconsideration are hereby AFFIRMED in toto.
SO ORDERED.
Abella Maxino, P.A., and Francisco, R.C., JJ., concur.
[1] Original Records, pp. 92-94.
[2] Original Records, pp. 101-102.
[3] Original Records, p. 10
[4] Original Records, p. 9.
[5] Original Records, p.7-8.
[6] Original Records, pp. 1-6.
[7] Original Records, pp. 25-30.
[8] Original Records, p. 39.
[9] Original Records, p. 40.
[10] Original Records, p. 41.
[11] Original Records, p. 42.
[12] Original Records, p. 31.
[13] Original Records, pp. 52-55.
[14] Original Records, 56-62.
[15] Original Records, pp. 69-71.
[16] Original Records, p. 94.
[17] Original Records, pp.96-98.
[18] Government Service Insurance System v. City Treasurer and City Assessor of the City of Manila, G.R. No. 186242, December 23, 2009.
[19] National Housing Authority v. Iloilo City, as represented by its Mayor, Hon. Jerry Treñas, iloilo City Treasurer, Catherine Tingson, and Rosalina Francisco, G.R. No. 172267, August 20, 2008.
[20] Assailed Resolution, Original Records, pp. 93-94.
[21] Spouses Francisco and Betty Wong and Spouses Joaquin and Lolita Wong v. City of Iloilo, Romeo Manikan as City Treasurer of Iloilo, Melanie Uy and the Estate of Felipe Uy, G.R. No. 161748, July 3, 2009.
[22] Motion for Reconsideration, Original Records, pp. 96-98.
[23] Assailed Order, Original Records, pp. 101-102.