City Government of Antipolo v. Transmix Builders & Construction, Inc.
REITERATIONFacts
The Antecedents: Clarisa San Juan Santos originally owned three parcels of land. In January 1997, Transmix Builders & Construction, Inc. (Transmix) purchased these lots, and new titles were issued in its name. However, Transmix failed to transfer the tax declarations to its name. On October 30, 2005, the City Treasurer published a Notice of Delinquency for unpaid real property taxes (RPT) on these lots, which were still in Santos's name in the tax records. Notices of Levy were sent to Santos, and Warrants of Levy were issued and sent to Santos's address. A public auction was held on December 28, 2005, and due to want of bidders, the properties were forfeited in favor of the City Government of Antipolo. On February 26, 2009, Transmix expressed its unawareness of the delinquency and sought to settle. On July 12, 2010, City Ordinance No. 2010-398 was passed, providing an amnesty on interest for RPT delinquencies. On October 19, 2010, the City Treasurer issued Notices of Real Property Tax Delinquency for the years 1997-2010 to Santos, but with an address indicating Transmix's location. Transmix paid the updated RPT on November 17, 2010. On February 17, 2011, the City Treasurer informed Transmix that the payments would be held in trust due to the forfeiture. The properties were eventually registered under the City Government of Antipolo on March 28, 2011. Procedural History: Transmix filed a Complaint for the declaration of nullity of the public auction, certificate of sale, titles, and/or reconveyance. The Regional Trial Court (RTC) initially ordered the reconveyance, finding that while the City Treasurer adhered to legal guidelines, the tax amnesty and Transmix's payment condoned the delinquency. Upon reconsideration, the RTC nullified the forfeiture proceedings for lack of notice to Transmix as the registered owner, directed the cancellation of titles in the City Government's name, and the reinstatement of titles in Transmix's name. The RTC also ordered the return of Transmix's deposit. The Petition: The City Government of Antipolo and the City Treasurer (petitioners) appealed to the Supreme Court, arguing that the levy, sale, and forfeiture were valid, that they were not estopped from accepting payments, and that the deposit should not be returned.
Issue(s)
Whether the levy, sale, and forfeiture of the subject properties were valid. Whether petitioners are estopped from accepting RPT payments from respondent. Whether the deposit made by respondent should be returned.
Ruling
The petition is DENIED. The November 18, 2016 Decision and the October 2, 2017 Order rendered by the Regional Trial Court of Antipolo City, Branch 99 in Civil Case No. 14-10486 are AFFIRMED.
Ratio Decidendi
On the validity of the levy, sale, and forfeiture: The Court held that the levy, sale, and subsequent forfeiture of the subject properties were void due to lack of due process. Section 258 of the Local Government Code (LGC) requires the warrant of levy to be mailed or served upon the delinquent owner of the real property or the person having legal interest therein. Unlike in rem proceedings, auction sales for RPT delinquency are in personam, requiring personal notice to the taxpayer. The Court emphasized that the City Treasurer should have sent notices to Transmix as the registered owner based on the Transfer Certificates of Title (TCTs), not solely relying on the tax declarations which still listed the previous owner, Santos. The Court distinguished this from previous laws like P.D. No. 464, noting that the LGC's use of the term "owner" and the inclusion of "person having legal interest therein" signifies a shift towards recognizing the registered owner under the Torrens system. The Court reiterated the principle established in Estate of Jacob v. Court of Appeals, stating that the treasurer should verify the registered owner from the Register of Deeds, as relying solely on tax declarations is insufficient when the property is covered by the Torrens system. The failure to notify the registered owner, Transmix, rendered the proceedings void. On whether petitioners are estopped from accepting RPT payments: The Court ruled that petitioners are not estopped from levying the properties. While the City Treasurer accepted payments from Transmix, this acceptance was qualified, with the payments being held in trust pending a resolution. The Court reiterated the principle that the State is not subject to estoppel by the mistakes or errors of its officials or agents, especially in the absence of proof of capricious or dishonorable dealings. Transmix, as the registered owner, had a duty to declare and pay RPT, and its failure to do so for several years, despite being aware of its tax delinquency, meant it could not plead innocence. The acceptance of tax payments does not amount to condonation or estoppel. On whether the deposit made by respondent should be returned: The Court affirmed the RTC's ruling to return the deposit made by Transmix. Section 267 of the LGC requires a deposit for actions assailing the validity of a tax sale, which is to be paid to the purchaser if the sale is declared invalid. However, in this case, the levy, auction sale, and forfeiture were declared void due to lack of due process. Since Transmix had already paid the delinquent RPT for the years 1997 to 2010 under the tax amnesty provided by the City Ordinance, it no longer owed the City Government delinquent RPT. Therefore, the deposit could not be paid to the City Government, and its return to Transmix was proper to prevent unjust enrichment.
Main Doctrine
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. The City Treasurer is mandated to send notices to the registered owner based on the Transfer Certificate of Title (TCT), not solely on the tax declaration.