The Supreme Court held that tax delinquency sales must adhere strictly to the notice requirements outlined in the Local Government Code to protect taxpayers’ rights. This ruling underscores that depriving a property owner of their land through a tax sale demands rigorous compliance with due process, including proper notification of delinquency and levy, ensuring the owner has a fair opportunity to settle their obligations before losing their property.

Lost Notice, Lost Land? Examining Due Process in Makati’s Tax Sale

In 2006, Katherine Rose Salva purchased Ildefonso P. Magpile’s land at a public auction due to unpaid real property taxes from 1998 to 2006. The City Treasurer of Makati had sent billing statements, notices of tax delinquency, and warrants of levy to Magpile’s address listed as “2118 Apolinario St., Bangkal, Makati City.” Magpile contested the sale, claiming he never received these notices, as his former address was no longer valid since 1996. He presented a certification from the Barangay Captain of Pio del Pilar stating that addresses on Apolinario Street had been changed. The central legal question revolved around whether the City Treasurer’s actions complied with Section 258 of the Local Government Code (LGC), ensuring Magpile received adequate notice before the property was auctioned.

The trial court initially sided with Salva, presuming regularity in the City Treasurer’s actions. However, the Court of Appeals (CA) reversed this decision, declaring the auction sale void, finding that the City Treasurer erred by sending notices to Magpile’s old address after he had provided a new one in a Sworn Statement filed with the Municipal Assessor. The CA emphasized the importance of actual notice in tax sales, as these proceedings are in personam, requiring direct notification to the taxpayer to protect their interests. This decision highlighted the tension between administrative efficiency and the constitutional right to due process when private property is at stake.

The Supreme Court, in affirming the CA’s ruling, underscored that administrative proceedings resulting in the deprivation of a taxpayer’s property are exceptions to the presumption of regularity. The burden of proving compliance with the requirements for a valid tax delinquency sale rests on the buyer, in this case, Salva. The Court emphasized the need for strict adherence to the steps prescribed by law to protect property rights and ensure due process. This requirement is rooted in the principle that tax sales are in derogation of property rights and must be conducted with utmost fairness and transparency.

Section 254 of the LGC mandates specific actions regarding notice of delinquency. The notice must be posted at the main entrance of the provincial capitol or city/municipal hall, and in a publicly accessible place in each barangay. It must also be published once a week for two consecutive weeks in a newspaper of general circulation. Moreover, as the Supreme Court emphasized in Talusan v. Tayag, the notice of delinquency must be sent to the registered owner of the property, recognizing that tax sales are in personam proceedings, necessitating direct notification to the taxpayer.

In this regard, we note that unlike land registration proceedings which are in rem, cases involving an auction sale of land for the collection of delinquent taxes are in personam. Thus, notice by publication, though sufficient in proceedings in rem, does not as a rule satisfy the requirement of proceedings in personam. As such, mere publication of the notice of delinquency would not suffice, considering that the procedure in tax sales is in personam. It was, therefore, still incumbent upon the city treasurer to send the notice of tax delinquency directly to the taxpayer in order to protect the interests of the latter.

Section 258 of the LGC further elaborates on the requirements for the warrant of levy. This warrant must be mailed to or served upon the delinquent owner or person with legal interest in the property. If the owner is out of the country or cannot be located, it should be served to the administrator or occupant of the property. Additionally, written notice of the levy, along with the warrant, must be sent to the assessor and the Register of Deeds. The levying officer must also submit a report on the levy to the sanggunian within ten days after the warrant’s receipt by the property owner.

The Supreme Court found that Salva failed to prove that the notice of tax delinquency was properly posted and published as required by the LGC. She did not provide evidence that the City Treasurer posted the notice in the Makati City Hall or in a conspicuous place in Barangay Bangkal. Nor did she substantiate the publication of the notice, lacking the Affidavit of Publication and relevant newspaper issues. The fact that the notices were sent to an outdated address further compounded the issue, rendering the auction sale invalid.

Adding to the procedural deficiencies, Salva did not demonstrate that Magpile actually received the warrant of levy. The requirement for actual notice is implied in Section 258, which directs the levying officer to report to the sanggunian after the warrant is received by the owner. The Court cited Corporate Strategies Development Corp. et al. v. Agojo, reiterating that actual notice to the delinquent taxpayer is essential, even if preceded by advertisement or publication. This principle arises from the in personam nature of tax sale proceedings.

Moreover, Salva failed to prove that notices of levy were sent to the Assessor and the Register of Deeds. Nor did she provide evidence that the auction sale was advertised through proper posting and publication. By relying solely on the presumption of regularity, which is inapplicable in cases involving deprivation of property, Salva failed to meet her burden of proving compliance with the LGC’s requirements. Therefore, the Court concluded that the tax delinquency sale was invalid due to the insufficiency of evidence demonstrating faithful compliance with the essential requirements.

The Supreme Court reaffirmed that strict adherence to the statutes governing tax sales is crucial to protect taxpayers and prevent collusion between buyers and public officials. Because the public auction impinges on property rights and due process, the prescribed steps are mandatory. Failure to follow them strictly renders the sale invalid, preventing the purchaser from becoming the new owner. This ruling serves as a potent reminder of the importance of meticulous compliance with legal procedures when dealing with the deprivation of property rights.

FAQs

What was the key issue in this case?	The key issue was whether the City Treasurer of Makati complied with the notice requirements of the Local Government Code (LGC) in conducting a tax delinquency sale of Ildefonso Magpile’s property.
Why did Magpile contest the auction sale?	Magpile contested the sale because he claimed he did not receive any notices of tax delinquency or warrants of levy, as they were sent to an outdated address.
What is the significance of a tax sale being considered in personam?	Because tax sales are in personam, it means that direct, personal notice to the taxpayer is required, as opposed to in rem proceedings where publication may suffice. This ensures the taxpayer has a fair chance to address the delinquency before losing their property.
What did the Supreme Court say about the presumption of regularity in this case?	The Supreme Court stated that there is no presumption of regularity in administrative actions that result in depriving a taxpayer of their property through a tax sale. The burden is on the buyer to prove compliance with all legal requirements.
What specific evidence did Salva fail to provide?	Salva failed to provide evidence of proper posting and publication of the notice of delinquency, proof that Magpile received the warrant of levy, and that notices were sent to the Assessor and Register of Deeds.
What is the requirement for a warrant of levy under Section 258 of the LGC?	Section 258 requires that the warrant of levy be mailed to or served upon the delinquent owner, and a report on the levy must be submitted to the sanggunian within ten days after receipt of the warrant by the owner.
Why was the certification from the Barangay Captain of Pio del Pilar relevant?	The certification was relevant because it supported Magpile’s claim that his old address, where the notices were sent, was no longer valid, as the street numbers had been changed since 1996.
What is the practical effect of this Supreme Court ruling?	The ruling reinforces the importance of strict compliance with the Local Government Code’s notice requirements in tax delinquency sales. It protects property owners from losing their land due to procedural errors.

This case underscores the judiciary’s commitment to upholding due process and protecting property rights, ensuring that local governments adhere strictly to legal procedures in tax sales. Taxpayers facing similar situations should ensure that all legal requirements are meticulously followed, and should promptly update their address with the appropriate local government offices to avoid potential issues.

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: Salva vs. Magpile, G.R. No. 220440, November 8, 2017