LEON REQUIRON, PETITIONER, VS. PATRICIA, ERNESTO AND ROSALINA, ALL SURNAMED SINABAN; CONRADO, GERTRUDES, ELARIA, FEDELINA, FLORDELIZA AND EMETERIO, ALL SURNAMED JAVELLO; ALFREDO…

Leon Requiron versus Patricia Sinaban

The Case

This is a petition for review on certiorari brought by Leon Requiron against the Sinaban and Javello heirs, the original parties in a long-running action to recover ownership and possession of a parcel of land in Sagay, Negros Occidental. The petitioner intervened in that case, claiming that he had bought the land at a public auction sale of a tax-delinquent property. The case matters because it fixes the burden of proof in tax-delinquent auction sales: the buyer must prove the regularity of every step leading to the sale, and he cannot hide behind the presumption of regularity where the proceedings strip a citizen of his property.

Procedural History

The heirs of the Javello co-owners sued to recover ownership and possession of the land before the then Court of First Instance of San Carlos City. The petitioner filed a complaint in intervention, claiming to be the purchaser at the public auction. The trial court, in a decision rendered in September 1986, sustained the intervention, dismissed the complaint of the plaintiffs, declared the petitioner the lawful owner, and ordered the defendants to vacate and deliver possession. The defendants appealed to the Court of Appeals. In April 1998, the Court of Appeals reversed the trial court, declared the auction sale null and void, declared the defendants the lawful owners, ordered the cancellation of the petitioner's transfer certificate of title, and ordered the defendants to reimburse the petitioner the taxes he paid, with six percent legal interest. The plaintiffs did not appeal. The petitioner then came to the Supreme Court by petition for review on certiorari, raising as the lone issue the validity of the public auction sale.

Facts

Lot Number 915, measuring fifty-six thousand six hundred seventy-two square meters, was originally co-owned by six Javello siblings. By intestate succession, the shares of the two who died without issue passed to their surviving brothers and sisters, and by the time of the dispute all the original co-owners had died, leaving the respondent heirs. Since 1950 the defendants and their predecessors had possessed the land, mortgaged it, leased it, and paid the land taxes. In 1972 the plaintiffs sued to recover the property, claiming that a verbal lease to the defendants' predecessor had expired, while the defendants relied on deeds of sale in favor of Teofilo Asuelo and on a later confirmation of sale whose authenticity the plaintiffs attacked as forged.

During the pendency of the case, neither side paid the delinquent real property taxes. The municipal treasurer of Sagay scheduled a public auction for December 14, 1973, from ten o'clock in the morning to twelve o'clock noon. Learning of the sale, Cecilia Asuelo Ferraro offered partial payment to the municipal treasurer, who told her to pay the provincial treasurer. She tendered three hundred fifty-nine pesos and eighty-two centavos, and the provincial treasurer sent a radio message suspending the auction. The municipal treasurer denied receiving that message. On December 12, 1973, the petitioner tendered one thousand five hundred thirty-one pesos and seventeen centavos covering the taxes and costs, and the municipal treasurer accepted the payment but refused to issue a receipt until the auction date.

On the scheduled date, no one bid. In April 1974 the petitioner bought the property from the plaintiffs. In March 1975 the municipal treasurer issued a Certificate of Repurchase After Sale in the petitioner's favor, in behalf of Catalino Javello. In 1976 the petitioner intervened, claiming superior ownership because no one had redeemed within the reglementary period. Meanwhile, in 1983, the land was registered in the plaintiffs' names, and on an unverified ex parte motion the trial court confirmed the sale in the petitioner's favor, and a transfer certificate of title was issued to him. He then mortgaged the property to the Philippine National Bank.

Issues

• Whether or not a valid public auction sale of Lot Number 915 was conducted on December 14, 1973.
• Whether or not the petitioner's payment on December 12, 1973 constituted a valid bid in that auction.
• Whether or not the petitioner validly acquired ownership of the property through the auction sale.

Applicable Provisions

Section 36 of Commonwealth Act Number 470, the Assessment Law, governs the suspension of a scheduled auction by payment of the delinquency:

Section 36. When the owner of any real property shall, before the date of the sale fixed in the notice, pay the taxes and penalties due, the sale shall be suspended and no further proceedings shall be had under such notice.

This provision is decisive because the partial payment accepted by the provincial treasurer, made before the auction date, operated to suspend the sale.

Section 38 of the same law governs redemption and the Certificate of Repurchase After Sale:

Section 38. Within one year from the date of the sale, the delinquent taxpayer or his assign may repurchase the property sold by paying to the provincial treasurer or his deputy the total amount of taxes, penalties and interests.

This provision bears on the case because the Certificate of Repurchase After Sale issued to the petitioner presupposes that the province, not the petitioner, purchased the property at the auction.

Ruling

On the first issue, the Court held that no valid public auction took place. It is the payment of the tax delinquency before the date of sale that suspends the auction, and the defendants made a partial payment that the provincial treasurer accepted and made known to the municipal treasurer. Whether the municipal treasurer received the radio message is beside the point; the partial payment was substantial compliance with the law.

On the second issue, the Court held that the petitioner's payment on December 12, 1973 was not a valid bid. A bid must be made within the period fixed for the auction. Before that period, the property is not yet for sale, because the owner still has the option to pay the taxes and stay the sale. The municipal treasurer could not validly accept payment for a property he could not validly sell.

On the third issue, the Court held that the petitioner failed to prove the regularity of the sale. He presented no Report of Sale, no Certificate of Sale, and no Final Bill of Sale. His own Certificate of Repurchase After Sale contradicted his theory, for it showed that the province purchased the property at the auction and that the petitioner merely repurchased it in behalf of Catalino Javello. His purchase of the same property from the plaintiffs in April 1974 was illogical if he had already bought it at auction. The Court stressed that the presumption of regularity does not apply to administrative proceedings resulting in the deprivation of a citizen or taxpayer of his property.

Doctrine

The buyer at a tax-delinquent auction sale bears the burden of proving the regularity of all proceedings leading to the sale, and he cannot rely on the presumption of regularity, which does not extend to administrative proceedings that deprive a person of property. A bid must be made within the period fixed for the auction; payment tendered before the scheduled date is not a valid bid, because the property is not yet for sale and the owner may still stay the sale by paying the delinquency. Under Section 36 of Commonwealth Act Number 470, payment of the tax delinquency before the date of sale suspends the auction, and substantial compliance suffices. The purchaser must present the Report of Sale, the Certificate of Sale, and the Final Bill of Sale; a Certificate of Repurchase After Sale is not a Certificate of Sale and presupposes that the province, not the bidder, bought the property.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, upholding the nullity of the auction sale and declaring the defendants the lawful owners of the property.

Remember This

Memorize this line: the presumption of regularity does not apply to administrative proceedings resulting in the deprivation of a citizen or taxpayer of his property. Examiners use this case on tax-delinquent auction sales, on the requisites of a valid bid, and on the burden of proving regularity in proceedings that take property away.