AMANDA TRIGAL, MANUEL T. PAZ, ET AL., PLAINTIFFS AND APPELLANTS, VS. SABINA TOBIAS, AS ADMINISTRATRIX OF THE TRUSTEESHIP OF AURELIO REYES AND MARIANO V. TAJONERA, DEFENDANTS AND…

Trigal versus Tobias

The Case

This is an action brought by Amanda Trigal and the other heirs of Fermin Paz against Sabina Tobias, as administratrix of the trusteeship of Aurelio Reyes, and against Mariano V. Tajonera. The heirs ask that the Court annul a sale at public auction of two parcels of land, covered by Transfer Certificate of Title Number 23783, made to Aurelio Reyes for tax delinquency, and also annul the later transfer of those properties to Tajonera. The case matters because it teaches when a prior order of a registration court will bar a later suit under the rule of res judicata, and it teaches that a tax sale void from the beginning may be attacked at any time, subject to the special requirement of Section 77 of Republic Act Number 1837.

Procedural History

The heirs filed their complaint before the Court of First Instance of Manila. The defendants moved to dismiss on the grounds of a prior judgment and lack of jurisdiction. The trial court deferred ruling on a second motion to dismiss until after trial on the merits, saying the ground of res judicata was not indubitable. On reconsideration, however, the trial court set aside its earlier order and dismissed the complaint, holding that the order of the registration court dated February 27, 1943 was res judicata. The plaintiffs appealed from that order of dismissal. The appeal reached the Supreme Court, which reviewed the dismissal and the grounds relied upon by the defendants.

Facts

On December 21, 1948, Amanda Trigal and the other heirs of Fermin Paz sued in the Court of First Instance of Manila. They sought to annul the sale at public auction of two parcels of land covered by Transfer Certificate of Title Number 23783, made to Aurelio Reyes for tax delinquency, and the subsequent transfer of those lands to Mariano V. Tajonera. They alleged that the sale was made without notice to Fermin Paz or his heirs, without due publication in newspapers of general circulation, without posting notice at the City Hall, and without complying with the formalities required by law.

The defendants moved to dismiss, invoking a prior order of the registration court dated February 27, 1943, which had cancelled Transfer Certificate of Title Number 23783 in the name of Fermin Paz and directed the Register of Deeds to issue a new title in the name of Aurelio Reyes. That order recited that it was issued on the petition of Aurelio Reyes as purchaser at public auction, so that his right might be inscribed. The defendants also invoked lack of jurisdiction, because the plaintiffs had not complied with the legal provisions on suits contesting tax sales.

The case was repeatedly set for hearing but could not proceed because the record was allegedly lost or mislaid. The defendants later filed a second motion to dismiss on the ground of res judicata. The trial court first deferred ruling until trial, then on reconsideration dismissed the complaint, holding that the order of February 27, 1943 was res judicata. The plaintiffs appealed.

Issues

• Whether or not the order of the registration court dated February 27, 1943 is res judicata to the present action for annulment of the tax sale.
• Whether or not the action to annul the tax sale has prescribed.
• Whether or not the trial court acquired jurisdiction over the suit despite the plaintiffs' alleged failure to comply with Section 77 of Republic Act Number 1837.

Applicable Provisions

Section 3 of Rule 8, on the grounds for a motion to dismiss, provides:

The defendant may, within the time for pleading, file a motion to dismiss the action on any of the following grounds: that the cause of action is barred by a prior judgment.

This provision governs whether the prior order may be pleaded as a bar, and the Court requires that the ground be indubitable.

Article 1410 of the New Civil Code provides:

The action or defense for the declaration of the inexistence of a contract does not prescribe.

This provision supports the ruling that an action to annul a tax sale void from the beginning does not prescribe.

Section 77 of Republic Act Number 1837 provides:

No court shall entertain any suit assailing the validity of a tax sale of real estate until the taxpayer shall have paid into the court the amount for which the real estate was sold, together with the interest at the rate of 15 per cent per annum, from the date of sale to the institution of the suit.

This provision is the basis of the defendants' claim that the trial court lacked jurisdiction over the suit.

Ruling

On the first issue, the Court held that the validity of the sale at public auction had not been put in issue when the registration court issued its order of February 27, 1943. The only mention of the sale was the recital that it was made on the petition of Aurelio Reyes as purchaser at public auction. A sale at public auction is presumed valid unless the contrary is proven, but the complaint alleged that the sale was made without notice, without publication, and without posting. Since compliance with these requirements gives validity to the sale, and since the plaintiffs are ready to prove noncompliance, the Court concluded that res judicata did not appear to be indubitable under Section 3 of Rule 8.

On the second issue, the Court held that the action is one to annul a tax sale, and the averments of the complaint, if true, rendered the tax sale void from the beginning. Citing Article 1410 of the New Civil Code, the Court ruled that an action to set aside a contract void from the beginning does not prescribe.

On the third issue, the Court held that the trial court having entertained the complaint, the presumption is that the requirements of the law had been fulfilled. The failure to allege compliance in the complaint, or to attach a receipt of payment, does not mean that no payment was made. It is for the defendants to prove their assertion, giving the plaintiffs the chance to show otherwise. To remove the doubt on this ground, the trial court should require proof from the parties.

Doctrine

A prior order of a registration court that does not put in issue the validity of the tax sale on which it rests cannot be pleaded as res judicata against a later action attacking that sale. The ground of a prior judgment must be indubitable to justify dismissal. An action to annul a tax sale that is void from the beginning does not prescribe, following Article 1410 of the New Civil Code. The requirement of Section 77 of Republic Act Number 1837 is not jurisdictional in the sense that failure to allege compliance in the complaint defeats the action; the defendants must prove noncompliance, and the trial court should receive evidence on the point.

Disposition

The Supreme Court set aside the order of May 27, 1959 dismissing the complaint and remanded the case to the court of origin for further proceedings, with no pronouncement as to costs.

Remember This

The single line worth memorizing is that a tax sale void from the beginning may be attacked at any time, and a prior registration order that never passed on the sale's validity is not res judicata. Examiners use this case to test the requisites of res judicata, the non-prescription of actions to annul void contracts, and the procedural effect of Section 77 of Republic Act Number 1837.