Land owners who are registered on the certificates of title, not those found on tax declarations, should be notified in warrants of levy for non- payment of taxes otherwise the subsequent sale and forfeiture of the levied real property would be null and void, the Supreme Court (SC) declared.

In a recent decision, the SC said that “Section 258 of Republic Act (RA) No. 7160, the Local Government Code of 1991 (LGC), requires the treasurer of the local government to send the warrant of levy to the delinquent owner of the real property, among others.”

“The term ‘delinquent owner’ shall be construed as the person registered as owner of the realty based on the certificate of title, and not on the tax declaration,” it said.

“The failure of the treasurer to send the required notices to the delinquent registered owner of the property shall render void not only the levy, but the consequent public auction and sale of the subject property,” it stressed.

The SC decision, written by Chief Justice Alexander G. Gesmundo, denied the petition filed by the Antipolo City government and its treasurer challenging the 2016 and 2017 rulings of the city’s regional trial court (RTC) in favor of Transmix Builders & Construction, Inc.

Case records showed that Clarisa San Juan Santos owned three parcels of land in Antipolo City with certificates of titles in her name. The tax declarations on the three lots were also in her name.

Sometime in January 1997, Transmix Builders bought the three pieces of land from Santos and, subsequently, certificates of titles were issued in the name of the firm. However, the firm failed to transfer the tax declarations over the properties in its name.

On Oct. 30, 2005, the Antipolo City treasurer published in a newspaper the notices of delinquency of real properties with unpaid real property taxes (RPT).  Thereafter, the city’s local government issued the corresponding notices of levy and the three lots bought by Transmix Builders were included. However, the notices were sent to Santos in her address reflected on the tax declarations not to the firm as registered on the certificates of titles.

The city government also published on Nov. 27, 2005 the notice of public auction which was held on Dec. 28, 2005. For lack of bidders, Transmix Builders’ three lots were forfeited in favor of Antipolo City.

On Feb. 26, 2009, Transmix Builders’ president Leodegario R. Santos wrote the city treasurer requesting the settlement of the tax delinquencies on the three lots.  He said his firm was not aware of the assessments and statements of accounts sent to Clarisa Santos.

On July 12, 2010, the city passed “An Ordinance Prescribing the Date of Payment Without Interest of Delinquent Realty Taxes in the City of Antipolo.”

The city’s treasurer sent the notice of real property tax delinquency from 1997 to 2010 for each of the three lots again to Clarisa Santos. On Nov. 17, 2010 Transmix Builders updated and settled its RPT.

On Jan. 27, 2011, the city treasurer issued a certification for the payments but told Transmix Builders that since the properties had been forfeited by the local government, the payments made by the firm “will be held in trust until a Resolution by a competent authority has been reached.”

Transmix Builders filed on Dec. 18, 2014 a case before the RTC for the declaration of nullity of public auction, certificate of sale, titles, and/or reconveyance against the city government and its treasurer and register of deeds. It said that the levy and forfeiture of its real properties were void for lack of notice.

In its Nov. 18, 2016 decision, the RTC ruled that the offer of tax amnesty by Antipolo City and the firm’s payment of the RPT effectively condoned the tax delinquency.  It ordered the reconveyance of the three pieces of land to Transmix Builders.

On Oct. 2, 2017, the RTC modified its decision.  Aside from the reconveyance of the forfeited pieces of land, it ordered the return to Transmix Builders the P7,787,459.36 deposited on Feb. 9, 2015.

The RTC ruled that the provisions of the LGC should apply in the case.  It said that due to the void auction proceedings, Antipolo City should return to Transmix Builders its deposit since the P2,769,460,00 for RPT for 2010 and previous years had already been paid.

Antipolo City elevated the case directly to the SC. It told the SC that the notices were sent to Clarisa Santos being the registered owner of the three pieces of land based on tax declarations.

Transmix Builders countered and told the SC that since its titles to the properties were issued under the Torrens system of land titling, the notices should have been sent to it as registered owner on the transfer certificates of title (CTCs).

In denying the petition filed by Antipolo City and its treasurer, the SC said:

“The Court cannot tum a blind eye on the fatal defect in the levy proceedings committed by the City Treasurer. Lest it be misunderstood, such statement is not to promote neglect on taxpayers to declare their properties. It is still incumbent upon registered owners to declare their real properties.

“The predicament that respondent faces in the present case is not far from the evil sought to be prevented by the basic maxim that notice should be mailed or served to the registered owner. It should be stressed that while registered owners have the duty to declare their property for payment of RPT, non-declaration of the same does not do away with the treasurer's responsibility to ascertain the identity of the true registered owner thereof.

“Prescinding from the foregoing and given the lack of notice to respondent as the registered owner, the levy, sale, and consequent forfeiture of the subject lots by the City Government of Antipolo, are void for lack of due process.

“No error can, thus, be attributed to the RTC. for ordering the return of the deposit to respondent (Transmix Builders) because it no longer owes the city government delinquent RPT covering the period 1997 to 2010. To do otherwise would unjustly enrich the city government which the Court cannot allow.

“Before leaving this matter to rest, the Court emphasizes that this ruling only covers respondent's RPT liabilities and corresponding payments covering the period 1997 to 2010. Due to the unlawful levy, sale, and subsequent forfeiture by the City Government of Antipolo, the subject lots are still owned by respondent, and should rightfully be returned to the latter.

“Hence the TCTs issued under the name of the City Government of Antipolo should be cancelled, and the previous titles in the name of respondent should be reinstated.

“In sum, notice of sale to the delinquent landowners and to the public in general is an essential and indispensable requirement of law, the nonfulfillment of which vitiates the sale.Absence of the requisite notice amounts to a violation of the delinquent taxpayer's substantial right to due process. 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.

“Wherefore, the petition is denied. The Nov. 18, 2016 decision and the Oct. 2, 2017 order rendered by the Regional Trial Court of Antipolo City, Branch 99 in Civil Case No. 14-10486 are affirmed. No costs. So ordered.”