Vda. de Gordon v. Court of Appeals
REITERATIONFacts
The Antecedents: Two parcels of land owned by petitioner Restituta V. Vda. de Gordon were sold at public auction on December 3, 1964, by the City Treasurer of Quezon City due to unpaid taxes for the years 1953 to 1963. Respondent Rosario Duazo acquired the properties for P10,500.00. The certificate of sale was registered on December 28, 1964. Upon failure of the registered owner to redeem the property within the one-year period, a final deed of sale was executed by the City Treasurer on January 4, 1966, and registered on January 18, 1966. Procedural History: Petitioner opposed respondent Duazo's petition for consolidation of ownership. The Court of Appeals upheld the tax sale and respondent Duazo's ownership. Petitioner appealed to the Supreme Court. The Petition: Petitioner sought to annul the tax sale, primarily on the grounds of alleged gross inadequacy of the purchase price, lack of personal notice, and an incorrect redemption period.
Issue(s)
Whether the purchase price of P10,500.00 for the two parcels of land and the residential house thereon was so grossly inadequate as to justify setting aside the public sale. Whether petitioner was entitled to redeem the two parcels of land in question. Whether petitioner received personal notice of the tax sale. Whether the applicable redemption period was one year or two years.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, upholding the tax sale and declaring the ownership of respondent Rosario Duazo over the two parcels of land and the improvements thereon consolidated. The Register of Deeds of Quezon City was ordered to cancel the existing Transfer Certificates of Title and issue new ones in favor of respondent Duazo.
Ratio Decidendi
On the issue of gross inadequacy of price: The Court held that mere inadequacy of price alone is not sufficient ground to annul a public sale. While the purchase price of P10,500.00 was less than the assessed value of the land (P16,800.00) and significantly less than the assessed value of the house (P45,580.00), it was not so grossly inadequate as to shock the conscience of the court. The Court emphasized that when the law provides a right to redeem, inadequacy of price should not be material because a lower price makes it easier for the owner to effect redemption. The Court cited Director of Lands vs. Abarca and Velasquez vs. Coronet to support its position that the price must be so shockingly low as to be unconscionable, which was not the case here. The Court also noted that the finding of a fair market value of P200,000.00 by the lower court had no factual basis. On the issue of the right to redeem: The Court ruled that petitioner was not entitled to redeem the property because she failed to do so within the one-year period prescribed by law from the date of the sale. The Court clarified that tax sales governed by Section 40 of Commonwealth Act No. 470 do not require judicial confirmation, unlike foreclosure of mortgage sales. Upon the expiration of the redemption period without redemption, it becomes a mandatory duty of the treasurer to issue a final deed of sale. The Court pointed out that petitioner had not exercised her right of redemption for ten years (and seventeen years as of the filing of respondent's brief), and respondent Duazo had been paying the real estate taxes since 1964, further indicating a lack of good faith in asserting a right to redeem. On the issue of lack of personal notice: The Court found this contention negated by petitioner's own averments in her opposition, where she stated she was not aware of the auction sale or that any notice sent to her did not reach her or had escaped her mind due to her age. The Court considered this admission as a failure to specifically deny the material averments regarding the proper procedures and formalities of the sale. On the issue of the applicable redemption period: The Court held that the applicable law was the Quezon City Charter, Commonwealth Act No. 502, Section 31, which provides for a one-year redemption period. This special law governing Quezon City prevails over the general law, Republic Act No. 1275, which provides for a two-year period. Therefore, the one-year period was correctly applied.
Main Doctrine
Mere inadequacy of price alone is not sufficient ground to annul a public sale, especially when the law provides for a right to redeem, as the lesser price makes redemption easier for the owner. Failure to exercise the right of redemption within the statutory period results in the consolidation of ownership in the buyer.