G.R. No. L-60941 February 28, 1985
Carmelita E. Reyes, petitioner, vs. The Hon. Intermediate Appellate Court, Gregorio Galang, and Soledad Pangilinan, respondents.

FACTS

Petitioner Carmelita E. Reyes filed an action for reconveyance against Quezon City, its Treasurer, Alicia P. Ledesma, P. Ledesma & Co., Inc., and spouses Gregorio Galang and Soledad Pangilinan. Reyes sought to recover a parcel of land sold at a public auction for unpaid real estate taxes, alleging the tax sale was void due to non-compliance with legal requirements. The trial court declared the tax delinquency and sale proceedings null and void, consequently annulling all subsequent certificates of title and deeds of sale, and ordered the reconveyance of the property to Reyes.
Only the spouses Galang appealed to the then Intermediate Appellate Court. The other defendants did not appeal. The appellate court reversed the trial court’s decision and dismissed Reyes’s complaint, holding that the statutory requirements for the tax sale were complied with and, therefore, the Galang spouses’ title derived therefrom was valid.

ISSUE

Whether the spouses Gregorio Galang and Soledad Pangilinan are purchasers in good faith and for value, thereby insulating their title from any infirmities in the preceding tax sale.

RULING

The Supreme Court partially granted the petition. The Court clarified that the core issue was not merely the technical compliance with tax sale requirements, but the status of the Galang spouses as purchasers. The Court found the trial court’s reasoning on the irregularities in the tax sale more convincing than the appellate court’s simplistic conclusion of compliance. However, the record was devoid of any evidence showing that the Galang spouses participated in or had knowledge of these irregularities.
Applying settled doctrine, the Court held that even assuming the tax sale was void, the Galang spouses, who purchased one-half of the unimproved land for a considerable sum (P62,560.00) without any notice of the infirmity, were purchasers in good faith and for value. As such, their title had become indefeasible and could not be assailed. Consequently, the portion of the trial court’s judgment ordering reconveyance from the Galang spouses was reversed.
Nevertheless, the Supreme Court preserved the trial court’s judgment against the non-appealing defendants (Quezon City, its Treasurer, Alicia Ledesma, and P. Ledesma & Co., Inc.), as that decision had long become final and executory as to them. Thus, the petitioner could still recover her interest in the portion of the property not conveyed to the innocent purchasers, the Galang spouses.