City of Davao v. Dalisay
NEW DOCTRINEFacts
The Antecedents: The Intestate Estate of Amado S. Dalisay (Estate) owned several properties in Davao City which were advertised for sale at public auction due to nonpayment of real estate taxes. No bidders appeared, and the properties were acquired by the City Government of Davao (City) pursuant to Section 263 of R.A. No. 7160. Declarations of Forfeiture were issued by the City Treasurer on September 13, 2005, more than a year after the auction. The City annotated these declarations on the Transfer Certificates of Title (TCTs). The Estate inquired about the redemption price, was furnished a summary totaling ₱4,996,534.67, and tendered ₱5,000,000.00. The City refused to accept the payment, prompting the Estate to file a Notice to Deposit the amount and subsequently an action for redemption, consignation, and damages. Procedural History: The Regional Trial Court (RTC), Branch 17, Davao City, ruled in favor of the Estate, ordering the City to receive the deposited amount as full payment of the redemption price and to issue a certificate of redemption. The RTC also awarded actual damages and attorney's fees. The Court of Appeals (CA) affirmed the RTC ruling, holding that redemption laws should be liberally construed and that the City's delay in issuing the Declaration of Forfeiture was the cause of the dispute. The Petition: The City filed a petition for review on certiorari with the Supreme Court, assailing the CA decision. The City argued that the one-year redemption period should be reckoned from the date of the auction sale (July 19, 2004), not from the date of the Declaration of Forfeiture (September 13, 2005). The City also contended that it should not be bound by the alleged erroneous statement of the City Treasurer due to the doctrine of estoppel against the government.
Issue(s)
Whether the one (1) year redemption period of forfeited tax delinquent properties purchased by the local government for want of a bidder is reckoned from the date of the auction or sale or from the date of the issuance of the declaration of forfeiture. Whether the City Government is estopped from disclaiming and denying the erroneous statement made by the City Treasurer in his Declaration of Forfeitures. Whether the provision of Section 263 of R.A. 7160 repealed pertinent provisions of P.D. 464 and Act 496 regarding the right of redemption. Whether the City Government is liable to pay actual damages and attorney's fees.
Ruling
The Supreme Court REVERSED and SET ASIDE the assailed Decision of the Court of Appeals and its Resolution. The action for redemption, consignation, and damages filed by the respondent Estate was ordered DISMISSED.
Ratio Decidendi
On the reckoning of the redemption period: The Court held that the one (1) year redemption period for tax delinquent properties purchased by a local government unit for want of a bidder, as provided under Section 263 of R.A. No. 7160 (Local Government Code), is reckoned from the date of the auction sale, not from the date of the issuance of the declaration of forfeiture. The Court reasoned that the "forfeiture" contemplated in the law refers to the act of the local government purchasing the property for lack of a bidder, which occurs on the date of the auction sale. To hold otherwise would mean that the local government's right as a purchaser is contingent on the issuance of a declaration of forfeiture, creating a vacuum and rendering the forfeiture exercise meaningless. The Court also found the City's argument more logical, aligning with the principle of uniformity in the redemption period for tax delinquent properties, similar to Section 261 of the LGC which counts the period from the date of sale. The Court noted that while the CA favored a liberal interpretation of redemption laws, it failed to consider the deeper underpinnings of the law and the rights of the purchaser. The Court also distinguished this case from City Mayor v. RCBC, where a local ordinance dictated a different reckoning period, which was not invoked here. On estoppel against the government: The Court ruled that the City Government is not estopped from disclaiming the erroneous statement made by the City Treasurer in the Declaration of Forfeitures. While acknowledging the general rule that the State cannot be estopped by the mistakes of its agents, the Court found no rare or unusual circumstance that would warrant an exception. The Court pointed out that the Estate was aware of the public auction and the delinquent status of the properties. The Estate's delay in inquiring about the redemption price and its misplaced reliance on the belatedly issued Declaration of Forfeiture, which appeared to benefit the Estate, raised doubts. The Court concluded that binding the City to its officer's suspect actions would cause injustice and undermine the policy of enabling local governments to utilize real property tax income. The Court emphasized that the statutory privilege of redemption should not be extended by the indiscretion of officers. On the repeal of prior laws: The Court implicitly affirmed that R.A. No. 7160, specifically Section 263, governs the redemption period in this case, superseding prior laws like P.D. 464, as established in City Mayor v. RCBC. The Court's analysis focused on the interpretation of Section 263 of the LGC and did not find it necessary to explicitly discuss the repeal of P.D. 464 or Act 496 in detail, as the core issue revolved around the interpretation of the LGC provision itself. On damages and attorney's fees: The Court reversed the award of actual damages and attorney's fees. Since the Estate's action for redemption was dismissed, the basis for claiming damages and attorney's fees, which arose from the City's refusal to accept the tendered payment, was removed. The Court found that the City's refusal was valid because the redemption period had already expired.
Main Doctrine
The one (1) year redemption period for tax delinquent properties purchased by a local government unit for want of a bidder under Section 263 of the Local Government Code (R.A. No. 7160) is reckoned from the date of the auction sale, not from the date of the issuance of the declaration of forfeiture.