The Supreme Court clarified that the one-year period to redeem a property sold due to tax delinquency in Quezon City begins from the date the sale is officially recorded in the Registry of Deeds, not merely from the sale date. This ruling protects property owners by ensuring they have adequate notice and time to exercise their right to reclaim their property.

Taxing Times: When Does the Clock Start Ticking on Property Redemption?

This case revolves around a dispute between Rizal Commercial Banking Corporation (RCBC) and the City of Quezon City, concerning the redemption period for properties sold due to tax delinquency. RCBC, as a mortgagee, sought to redeem properties previously owned by spouses Roberto and Monette Naval, which had been sold at a tax auction to Alvin Emerson S. Yu. The central legal question was: From what date should the one-year redemption period be counted—the date of the tax sale itself, as stated in the general law (Republic Act No. 7160, or the Local Government Code), or the date the sale was annotated in the registry, as stipulated in the Quezon City Revenue Code?

The factual backdrop is crucial. The Naval spouses secured a loan from RCBC using their properties as collateral. After they defaulted, RCBC foreclosed the mortgage and became the highest bidder at the public auction in 1998. However, the Certificates of Sale were registered only on February 10, 2004. Meanwhile, the City Treasurer of Quezon City auctioned off the same properties on May 30, 2003, due to tax delinquencies. Alvin Emerson S. Yu emerged as the highest bidder and received a Certificate of Sale of Delinquent Property, which he registered on February 10, 2004.

RCBC attempted to pay the delinquent taxes, interest, and costs on June 10, 2004, but the City Treasurer refused to accept the payment. This prompted RCBC to file a Petition for Mandamus with Prayer for Issuance of a Temporary Restraining Order and a Writ of Preliminary Injunction before the Regional Trial Court (RTC). The RTC initially denied RCBC’s petition, arguing that the reckoning period should be based on the Local Government Code, which repealed Presidential Decree (P.D.) No. 464, also known as the Real Property Tax Code. However, upon reconsideration, the RTC reversed its decision, leading the City officials to appeal to the Supreme Court.

The petitioners argued that the RTC erred in ruling that P.D. No. 464 was not repealed by R.A. No. 7160 and in interpreting the phrase “from the date of sale” in Section 261 of R.A. No. 7160 to mean the date of registration of the certificate of sale. The respondent, RCBC, countered that the RTC correctly ruled that it had timely exercised its right to redeem the subject properties and that the reference to Section 78 of P.D. No. 464 was merely a reference point and did not alter the RTC’s ruling.

The Supreme Court had to reconcile two laws: the general law (R.A. No. 7160) and the special law (Quezon City Revenue Code). Section 261 of R.A. No. 7160 states:

Section 261. Redemption of Property Sold. – Within one (1) year from the date of sale, the owner of the delinquent real property or person having legal interest therein, or his representative, shall have the right to redeem the property upon payment to the local treasurer of the amount of delinquent tax, including the interest due thereon, and the expenses of sale from the date of delinquency to the date of sale, plus interest of not more than two percent (2%) per month on the purchase price from the date of sale to the date of redemption. Such payment shall invalidate the certificate of sale issued to the purchaser and the owner of the delinquent real property or person having legal interest therein shall be entitled to a certificate of redemption which shall be issued by the local treasurer or his deputy.

However, the Quezon City Revenue Code provided a different reckoning point:

7) Within one (1) year from the date of the annotation of the sale of the property at the proper registry, the owner of the delinquent real property or person having legal interest therein, or his representative, shall have the right to redeem the property by paying to the City Treasurer the amount of the delinquent tax, including interest due thereon, and the expenses of sale plus interest of two percent (2) per month on the purchase price from the date of sale to the date of redemption. Such payment shall invalidate the certificate of sale issued to the purchaser and the owner of the delinquent real property or person having legal interest therein shall be entitled to a certificate of redemption which shall be issued by the City Treasurer.

The Court acknowledged the apparent conflict between the two provisions. R.A. No. 7160, as a general law, applies to all local government units, while the Quezon City Revenue Code, as a special law, applies specifically to Quezon City. The Court then invoked the principle that a special law prevails over a general law on the same subject matter. This is because the special law evinces the legislative intent more clearly than the general statute and is taken as intended to constitute an exception to the rule.

Building on this principle, the Supreme Court emphasized that in cases involving redemption, the law protects the original owner. Redemption is favored, and redemption laws are construed liberally. The Court harmonized the provisions of the two laws, stating that Section 14 (a), Paragraph 7 of the Quezon City Revenue Code should be construed as defining the phrase “one (1) year from the date of sale” in Section 261 of R.A. No. 7160 to mean “one (1) year from the date of the annotation of the sale of the property at the proper registry.”

Therefore, the counting of the one-year redemption period begins from the date the certificate of sale is annotated in the Register of Deeds. Applying this to the case, RCBC had until February 10, 2005, to redeem the properties, as the Certificate of Sale of Delinquent Property was registered on February 10, 2004. Consequently, RCBC’s tender of payment on June 10, 2004, was within the redemption period, and the petitioners erred in refusing it.

Finally, the Court addressed the petitioners’ argument that RCBC could not invoke Section 14 (a), Paragraph 7 of the Quezon City Revenue Code because it was not initially cited in the petition for mandamus. The Court noted that RCBC had brought this provision to the attention of the petitioners as early as in its Memorandum to Serve as Draft Resolution and reiterated it in its motion for reconsideration. The petitioners had ample opportunity to counter RCBC’s allegations. Moreover, the Court stated that the petitioners could not feign ignorance of a law they had promulgated in the exercise of their local autonomy.

FAQs

What was the key issue in this case?	The central issue was determining the correct starting point for calculating the one-year redemption period for tax-delinquent properties in Quezon City: the date of sale or the date of annotation of the sale.
Which law governs the redemption period for tax-delinquent properties?	The Quezon City Revenue Code governs the redemption period for tax-delinquent properties within Quezon City, as it is a special law that takes precedence over the general law (Local Government Code).
From what date is the one-year redemption period counted?	The one-year redemption period is counted from the date of annotation of the sale of the property at the proper registry, according to the Quezon City Revenue Code.
What is the significance of annotating the sale in the registry?	Annotation provides constructive notice to all interested parties, including the property owner and those with legal interest, about the sale of the property due to tax delinquency.
Why does the Quezon City Revenue Code take precedence over the Local Government Code in this case?	The Quezon City Revenue Code is a special law applicable specifically to Quezon City, while the Local Government Code is a general law. Special laws prevail over general laws on the same subject matter.
What is the policy of the law regarding redemption?	The law favors redemption and protects the rights of the original owner. Redemption laws are construed liberally to aid rather than defeat the owner’s right to redeem their property.
Can a party raise a new legal argument during judicial proceedings?	Yes, a party can raise a new legal argument if the opposing party has been given an opportunity to respond and present evidence. The core claim must stay the same though.
What was the Supreme Court’s ruling in this case?	The Supreme Court affirmed the RTC’s decision, ruling that the one-year redemption period should be counted from the date of annotation of the sale.

This Supreme Court decision clarifies the timeline for property redemption in Quezon City, offering protection to property owners facing tax delinquency. By specifying that the redemption period begins upon annotation of the sale, the ruling ensures fair notice and a meaningful opportunity to reclaim property. The Court’s emphasis on the special nature of the Quezon City ordinance reinforces local autonomy in taxation matters.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: CITY MAYOR VS RIZAL COMMERCIAL BANKING CORPORATION, G.R. No. 171033, August 03, 2010