GR 207791; (July, 2015) (Digest)
G.R. No. 207791, July 15, 2015
The City of Davao, Represented by the City Treasurer of Davao City, Petitioner, vs. The Intestate Estate of Amado S. Dalisay, Represented by Special Administrator Atty. Nicasio B. Paderna, Respondent.
FACTS
The Intestate Estate of Amado S. Dalisay owned five properties in Davao City. For nonpayment of real estate taxes, these properties were advertised for sale at a public auction scheduled on July 19, 2004. No bidders appeared, so the properties were acquired by the City Government of Davao pursuant to Section 263 of the Local Government Code (LGC). The City Treasurer issued separate Declarations of Forfeiture for the properties on September 13, 2005, which were annotated on the titles on October 3, 2005. The Declarations stated that the taxpayer had one year from the date of the declaration to redeem the property. On September 11, 2006, the City furnished the Estate with billing statements showing an aggregate redemption amount of ₱4,996,534.67. On September 13, 2006, the Estate tendered payment of ₱5,000,000.00 to the City Treasurer, who refused to accept it. The Estate then consigned the amount with the court and filed an action for redemption, consignation, and damages. The City argued the one-year redemption period expired on July 19, 2005, a year after the auction, and that the Declarations of Forfeiture were issued merely for registration. The Regional Trial Court ruled in favor of the Estate, ordering the City to accept the payment as full redemption. The Court of Appeals affirmed the decision.
ISSUE
Whether the one-year period to redeem the forfeited properties should be reckoned from the date of the public auction (July 19, 2004) or from the date of the issuance of the Declarations of Forfeiture (September 13, 2005).
RULING
The Supreme Court ruled that the one-year redemption period should be reckoned from the date of the issuance of the Declarations of Forfeiture, September 13, 2005. The Court affirmed the decisions of the lower courts. It held that the phrase “within one (1) year from the date of such forfeiture” in Section 263 of the LGC refers to the date the forfeiture is declared by the local treasurer, not the date of the auction sale. The Court noted the City’s failure to immediately issue the declarations within two days from the purchase as required by law. It emphasized that redemption laws should be liberally construed in favor of the taxpayer, especially where no injury follows and the delay was due to the government’s own inefficiency. The Court also upheld the awards of actual damages (₱75,200.00 as consignation fees) and attorney’s fees (₱50,000.00) because the City’s refusal to accept the tendered payment compelled the Estate to litigate.