G.R. No. 120435 and G.R. No. 120974 December 22, 1997
ESTATE OF THE LATE MERCEDES JACOB represented by MERCEDITA JACOB, DONATO JACOB JR., ERENEO JACOB and LILIAN JACOB QUINTO, petitioners, vs. COURT OF APPEALS, SPOUSES RAMON R. TUGBANG and VIRGINIA S. TUGBANG, REGISTER OF DEEDS OF QUEZON CITY and CITY TREASURER OF QUEZON CITY, respondents. (G.R. No. 120435)

CITY TREASURER OF QUEZON CITY, petitioner, vs. COURT OF APPEALS and BERNARDITA C. TOLENTINO, respondents. (G.R. No. 120974)

FACTS

In G.R. No. 120435, Mercedes Jacob, the registered owner of land covered by TCT No. 39178, left for the U.S. in 1981. Her son-in-law, Luciano Quinto Jr., was asked to pay the real estate taxes but was refused by the City Treasurer’s Office for lack of written authorization. In 1984, the City Treasurer notified Mercedes Jacob through her daughter that the taxes were delinquent and the land had been sold at public auction on August 24, 1983, to Virginia Tugbang. The family attempted to redeem the property but was evaded by Tugbang. On September 30, 1985, Virginia Tugbang filed a petition for cancellation of TCT No. 39178, which was granted, and TCT No. 81860 was issued in her name on March 3, 1989. On May 17, 1993, the heirs of Mercedes Jacob filed a complaint in the RTC of Quezon City for annulment or cancellation of the auction sale, the final bill of sale, TCT No. 81860, and for redemption plus damages. The trial court dismissed the petition for lack of jurisdiction, deeming it a petition to annul an RTC decision. The Court of Appeals dismissed the petition for lack of merit.
In G.R. No. 120974, Alberto Sta. Maria owned land covered by TCT No. 68818, which he sold in 1964 to Teresa L. Valencia, who obtained TCT No. 79818 but failed to transfer the tax declaration. Valencia paid taxes from 1964 to 1978 in Sta. Maria’s name. On December 20, 1973, Valencia entered into a contract of sale with a mortgage in favor of Bernardita C. Tolentino. From 1979 to 1983, Valencia failed to pay taxes. Notices of delinquency were sent to Sta. Maria’s address in Olongapo, Zambales, but were returned for a “better complete address.” In an auction sale on February 29, 1984, spouses Romeo and Verna Chua bought the land. The certificate of sale referenced the canceled TCT No. 68818. A Final Bill of Sale was issued on May 15, 1985. The Chuas filed a petition for cancellation of TCT No. 79818, which was granted, and TCT No. 357727 was issued in their name on February 4, 1987. On February 2, 1987, Tolentino paid the full purchase price to Valencia and obtained a deed of absolute sale. On August 2, 1988, Tolentino filed for reconstitution of TCT No. 79818. In April 1989, the Chuas demanded possession. Tolentino sued for annulment of the auction sale in the RTC, which granted the petition. The Court of Appeals affirmed.

ISSUE

The common issue in both petitions is whether the Regional Trial Court has jurisdiction over the nature of the actions filed by the petitioners (in G.R. No. 120435) and by respondent Tolentino (in G.R. No. 120974), which were characterized as actions for annulment of auction sales and related titles, as opposed to actions for annulment of judgment.

RULING

The Supreme Court ruled that the RTC has jurisdiction over both cases. In G.R. No. 120435, the Court held that the averments of the complaint determine the nature of the action and jurisdiction. A cursory examination shows it is an action for reconveyance based on allegations of fraudulent representation by Virginia Tugbang in procuring the transfer certificate of title, creating a constructive trust. An action for reconveyance, which involves title to or possession of real property, falls under the exclusive original jurisdiction of the RTC under Section 19 of B.P. Blg. 129. Furthermore, under the Property Registration Decree (P.D. 1529), the RTC has authority to act on petitions filed after original registration. The case was remanded for trial.
In G.R. No. 120974, the Court held that while Tolentino’s complaint was captioned as annulment of auction sale, it was not an action for annulment of judgment of the RTC, which would be within the exclusive original jurisdiction of the Court of Appeals. Instead, it was an action to annul the tax sale due to jurisdictional defects, specifically the lack of valid notice of delinquency and sale as required by law. The Court found that the notices sent to the former owner’s incomplete address were insufficient, rendering the tax sale void. The action to annul a void tax sale is within the jurisdiction of the RTC. The Court also noted that the City Treasurer failed to comply with the mandatory notice requirements under the Real Property Tax Code. The decision of the Court of Appeals was affirmed.