G.R. No. L-9303; July 11, 1957
CIRILO PUNZALAN, plaintiff-appellee, vs. ALFREDO S. ASCAÑO, ET AL., ETC., defendants, ALFREDO S. ASCAÑO, appellant.

FACTS

Cirilo Punzalan, owner of a property in Manila assessed at P834.00, filed a case to annul the sale of his property at a public auction conducted by the City Treasurer of Manila. The property was sold to Alfredo S. Ascaño for P18.21, the amount of real estate taxes in arrears. The sale was made pursuant to Section 2498 of the Revised Administrative Code, and a final deed of sale was later executed under Section 2500. Notices of the sale sent by the City Treasurer to Punzalan were returned undelivered. Punzalan learned of the sale only after the one-year redemption period had expired, when the buyer inspected the property, and his attempts to redeem it failed. The trial court declared the sale null and void on three grounds: (1) the notice of sale was published in “Bagong Balita Ng Bayan,” which the court deemed not a newspaper of general circulation for Manila; (2) the buyer, Alfredo S. Ascaño, was a government officer (in the Division of Foreign Fund Control of the Bureau of Treasury) at the time of the sale, and such purchase was prohibited under Section 579 of the Revised Administrative Code; and (3) on grounds of equity. Ascaño appealed.

ISSUE

The primary issues for resolution on appeal were: (1) Whether Section 579 of the Revised Administrative Code, prohibiting government officials from purchasing property at tax sales, is applicable to the case, thereby rendering the sale void; and (2) Whether damages were properly awarded in favor of appellee Punzalan. (The Supreme Court noted that the factual issue regarding the newspaper’s circulation was not contested by appellee on appeal and thus was eliminated from the issues.)

RULING

The Supreme Court affirmed the trial court’s decision. On the first issue, the Court held that Section 579 of the Revised Administrative Code was applicable. The prohibition applies to officials and employees of the Government of the Philippine Islands purchasing property sold for non-payment of taxes. The City of Manila is a political subdivision of the Government, and the prohibition extends to tax sales conducted by the city. Since Ascaño was a government employee at the time of the purchase, the sale was null and void. On the second issue, the Court upheld the award of damages in the amount of P500 to Punzalan, finding that Ascaño acted in bad faith by concealing his status as a government employee from the City Treasurer when making the purchase. The decision of the lower court was affirmed, with costs against appellant Ascaño.