Spouses Tan vs Bantegui
Facts: In 1954 Gorgonia Bantegui ( married to Jesus Bayot) acquired a parcel of land located in
Quezon. The property was rented to spouses Florante B. Caedo and Florencia B. Caedo who
resided in said property until 1994.
Taxes were paid until 1977 but the real property taxes from the year 1978 to 1983 inclusive of
penalties were not paid.
Due to no payment of taxes, the city treasurer of Quezon City sold said property at public auction
to Spouses Edilberto and Josefina Capistrano for the sum of P10,000. The Certificate of Sale of
Delinquent Property was thereafter issued.
The property was not redeemed within one year, thus title to said property was consolidated to
the Capistranos.
But the Capistranos did not take possession of the land nor inform the Caedos about the sale or
collected any rent from them. They did not pay any real property taxes thereon.
Later on, the property was sold by the Capistranos to spouses Evelyn and Jesse Pereyra for
P60,000. Spouses Pereyra also did not take possession of the property in question but instead
mortgaged the property to Rural Bank of Imus, Cavite. Bantegui and Caedos were not informed
of the transactions, all the while Caedos paid rent to Bantegui until December 1993.
On May 3,1990, the same property was sold by the Pereyras to the spouses Ramon and Rosita
Tan for P350,000 with the latter paying the amount of P300,000 to the Rural Bank of Imus,
Cavite for the release of the mortgage per agreement by the parties. The Tans likewise paid the
overdue taxes and other expenses incurred by the Pereyras pertaining to said mortgage. The
Tan’s did not immediately take possession of the property nor inform the occupants (Caedos ).
But in the latter part of 1990 the Tan’s through their lawyer informed the Caedos of their
ownership and demanded that they vacate the property. They later filed an action for ejectment
against the Caedos before the MTC of Quezon City.
The court ruled in favor of Tans.
Thereafter, Bantegui, through her sister Guadalupe Bautista filed a complaint for the annulment
of sale, injunction and damages against the spouses Capistrano and the City Treasurer of Quezon City
with the RTC of Quezon.
RTC decided in favor of respondents, petitioners appealed to the CA.
CA decided in favor of respondent. Declaring that petitioners were not purchasers in good faith
and had no better right to the subject property than that of any of their predecessor-in-interest,
that the auction was tainted with irregularities such as: no notice of delinquency and of sale
were sent to the owner.
ISSUE: Whether or Not the auction sale was valid.
HELD: No. the auction sale was not valid. First, no notice of delinquency or of sale was given to
either Gorgonia Bantegui, the delinquent owner; or to her representative as provided under
Section 65 and 73 of PD 464 the Real Property Tax Code The auction sale of real property for
the collection of delinquent taxes is in personam, not in rem. Although sufficient in proceedings
in rem like land registration, mere notice by publication will not satisfy the requirements of
proceedings in personam. “[P]ublication of the notice of delinquency [will] not suffice, considering
that the procedure in tax sales is in personam.” It is still incumbent upon the city treasurer to
send the notice directly to the taxpayer -- the registered owner of the property -- in order to
protect the latter’s interests. Although preceded by proper advertisement and publication, an
auction sale is void absent an actual notice to a delinquent taxpayer. The sale of land “for tax
delinquency is in derogation of property rights and due process[;] the prescribed steps must be
followed strictly.” In the present case, notices either of delinquency or of sale were not given to
the delinquent taxpayer. Those notices are mandatory, and failure to issue them invalidates a
sale. Because it was clearly in contravention of the requirements under the law and jurisprudence,
The subsequent sale of the real property did not make its purchaser the new owner. While it is
true that Transfer Certificates of Title have already been issued in the names of the subsequent
purchasers, they should nonetheless be invalidated. Considering the failure to abide by the
mandatory requirements of a proceeding in personam, no better title than that of the original
owner can be assumed by the transferees.
Section 80 of PD 464 provides that “any balance of the proceeds of the sale left after deducting
the amount of the taxes and penalties due and the costs of sale, shall be returned to the owner
or his representative.” Again contrary to the mandate of the law, the balance of the proceeds
from the tax sale was not even returned to Respondent Bantegui or her representative after the
issuance of the final bill of sale. The failure to return the proceeds reinforced the apparent
irregularity not only in the conduct of the tax sale, but also in its subsequent disposition.
