HEIRS OF MARCIANA G. AVILA, PETITIONERS, VS. HON. COURT OF APPEALS, AND ALADINO CH. BACARRISAS, RESPONDENTS.

Heirs of Avila versus Court of Appeals

The Case

This is a petition for review on certiorari brought by the heirs of Marciana G. Avila against the Court of Appeals and Aladino Ch. Bacarrisas. The heirs ask the Supreme Court to reverse a Court of Appeals decision that set aside a writ of execution placing them in possession of a parcel of land. The case matters because it forces the Court to untangle two ideas that litigants often confuse: the adjudication of land in a cadastral case and the registration of title under the Torrens System. It also shows what happens when the original purchase of the land was itself void from the beginning, because a public school teacher bought it at a tax sale in violation of the law.

Procedural History

The story begins in the Court of First Instance of Misamis Oriental, sitting as a cadastral court. That court adjudicated the lots to Paz Chavez, but later, on a petition for review of the decree, it set aside its own earlier decision, annulled the decrees and certificates of title issued to Chavez, and adjudicated Lot 594 to the heirs of Marciana G. Avila and Lot 828 to Leonardo Avila, Senior.

Paz Chavez appealed to the Court of Appeals. The Court of Appeals modified the cadastral court's decision: it disallowed the registration of Lot 594 in the name of Marciana G. Avila, but affirmed the decision in all other respects.

When the records returned to the court below, the Avilas moved for execution, and a writ of possession was issued. Aladino Ch. Bacarrisas, who succeeded Chavez and claimed actual possession of Lot 594, opposed the writ. After his motion for correction of the writ was denied, he filed a petition for certiorari and mandamus with preliminary injunction before the Court of Appeals. That court granted certiorari, set aside the writ of execution, and ruled that the writ had been improvidently issued. The Avilas moved for reconsideration, which was denied. Hence this petition for review on certiorari before the Supreme Court, which gave due course to the petition and eventually decided it.

Facts

In 1939, the Court of First Instance of Misamis Oriental, as a cadastral court, adjudicated Lots 594 and 828 of the Cadastral Survey of Cagayan to Paz Chavez. Because Chavez failed to pay the property taxes on Lot 594, the government offered the lot for sale at public auction. Marciana G. Avila, a public school teacher, participated in and won the bidding. The law prohibited public school teachers from buying delinquent properties, yet nobody, not even the government, questioned her participation. After the redemption period expired, the Provincial Treasurer executed a final bill of sale in her favor in February 1940.

Sometime in 1947, original certificates of title covering the two lots were issued in favor of Paz Chavez. The Avilas opposed this and filed a petition for review of the decrees. After hearing on the merits, the cadastral court set aside its earlier decision, declared the decrees and certificates of title null and void, and adjudicated Lot 594 to the heirs of Marciana G. Avila and Lot 828 to Leonardo Avila, Senior.

Chavez appealed. The Court of Appeals modified the decision by disallowing the registration of Lot 594 in the name of Marciana G. Avila, but affirmed the decision in all other respects. When the Avilas sought execution and a writ of possession was issued, Bacarrisas, who had succeeded Chavez and had been in actual possession of Lot 594 since 1946, challenged the writ. The Court of Appeals set the writ aside, holding that the Avilas had neither a decree nor a judgment of confirmation of title over Lot 594, and so were not entitled to a writ of possession.

Issues

• Whether or not the Court of Appeals, in setting aside the writ of execution, effectively modified its earlier final decision by disallowing not only the registration but also the adjudication of Lot 594 in favor of the petitioners.
• Whether or not the petitioners are entitled to possession of Lot 594 on the ground that their title was recognized in the earlier decision of the Court of Appeals.
• Whether or not the denial of possession to the petitioners, who won in the cadastral case, makes the losers in that case the predecessors-in-interest of the private respondent.
• Whether or not the private respondent correctly chose the remedy of certiorari.

Applicable Provisions

Section 579 of the Revised Administrative Code, as amended, provides:

Section 579. Inhibition against purchase of property at tax sale. Officials and employees of the Government of the Republic of the Philippines are prohibited from purchasing, directly or indirectly, from the Government, any property sold by the Government for the nonpayment of any public tax. Any such purchase by a public official or employee shall be void.

This provision is the heart of the case, because it makes the sale of Lot 594 to Marciana G. Avila, a public school teacher, void from the start.

Article 1409 of the Civil Code, which the Court invokes, provides:

Article 1409. The following contracts are inexistent and void from the beginning: (1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy; (2) Those which are absolutely simulated or fictitious; (3) Those whose cause or object did not exist at the time of the transaction; (4) Those whose object is outside the commerce of men; (5) Those which contemplate an impossible service; (6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained; (7) Those expressly prohibited or declared void by law. These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived.

This article means that the void sale can never be ratified, and the defense of its illegality can never be waived.

Article 1412 of the Civil Code, also invoked by the Court, provides:

Article 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed: (1) When the fault is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the other's undertaking; (2) When only one of the contracting parties is at fault, he cannot recover what he has given by reason of the contract, or ask for the fulfillment of what has been promised him. The other, who is not at fault, may demand the return of what he has given without any obligation to comply with his promise.

Because Marciana Avila was a party to an illegal transaction, she cannot recover what she gave by reason of the contract, nor ask for its fulfillment.

Ruling

On the first issue, the Court holds that the petitioners' distinction between registration and adjudication is without merit. The Court of Appeals did not modify its earlier final decision; it merely enforced what that decision already said. The earlier decision disallowed registration, and registration is what carries possession. The Court explains that in a registration case, the judgment confirming the title of the applicant and ordering its registration in his name necessarily carries with it the delivery of possession, which is an inherent element of the right of ownership. A writ of possession may be issued not only against the person defeated in a registration case but also against anyone unlawfully and adversely occupying the land during the proceedings up to the issuance of the final decree.

On the second issue, the Court holds that the petitioners cannot claim possession. Their predecessor-in-interest purchased the property at a public auction, paid the price, and received a final bill of sale, but that purchase was prohibited under Section 579 of the Revised Administrative Code. The Court quotes the provision and concludes that the sale to her was void. Under Article 1409 of the Civil Code, a void contract is inexistent from the beginning, cannot be ratified, and the right to set up the defense of its illegality cannot be waived. Moreover, under Article 1412, Marciana Avila, being a party to an illegal transaction, cannot recover what she gave nor ask for the fulfillment of what was promised her. Since she was not the successful claimant in the registration proceedings, she was not entitled to a writ of possession.

On the third issue, the Court holds that possession cannot be claimed by the private respondents either, because the land was the subject of a tax sale with a final bill of sale. The government never filed any claim for possession and was never impleaded. Its only interest in the land appears to be the collection of taxes. The result is a failure of ownership because of the violation of Section 579. The property apparently has no owner. Under the principle that the State is the ultimate proprietor of land within its jurisdiction, the land may be escheated in favor of the government upon the filing of the appropriate action for reversion or escheat under Section 5, Rule 91 of the Rules of Court, relative to properties alienated in violation of any statute.

On the fourth issue, the Court holds that certiorari was the proper remedy, because the trial court had already issued a writ of execution of the questioned judgment, and the issuance of that writ is a question of law.

Doctrine

A purchase by a public official or employee of government property sold for nonpayment of taxes is void under Section 579 of the Revised Administrative Code. Being void, the sale is inexistent from the beginning under Article 1409 of the Civil Code; it cannot be ratified, and the defense of illegality cannot be waived. The buyer who is at fault cannot recover what he gave nor demand performance under Article 1412. In a registration case, the judgment confirming title and ordering registration carries with it the delivery of possession, which is an inherent element of ownership; a writ of possession may issue against anyone unlawfully occupying the land. Where land is alienated in violation of a statute, ownership fails, and the land may be escheated in favor of the State under Section 5, Rule 91 of the Rules of Court.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals, denying the petitioners possession of Lot 594 and leaving the land open to escheat in favor of the government.

Remember This

The single line worth memorizing is that a void tax sale to a public school teacher produces a failure of ownership, so neither the buyer nor the party in possession may claim the land, and it may be escheated to the State. Examiners like to use this case to test the distinction between adjudication and registration, and the consequences of a void contract under Articles 1409 and 1412 of the Civil Code.