G.R. No. 213669 March 5, 2018
JEROME K. SOLCO, Petitioner, vs. MEGAWORLD CORPORATION, Respondent.

FACTS

Megaworld Corporation was the registered owner of two condominium parking slots in Makati. Due to non-payment of real property taxes from 2000 to 2008, the City Government levied and sold the properties at public auction on December 20, 2005. Jerome Solco emerged as the highest bidder. After the redemption period lapsed without action from Megaworld, a Final Deed of Conveyance was issued to Solco in 2007. Solco subsequently filed a petition with the Regional Trial Court (RTC) for the issuance of new titles, as the original certificates remained in Megaworld’s name and possession.
Megaworld opposed the petition, alleging that it had previously sold the properties via contracts to sell and that the buyers had assumed tax obligations. It contended the tax delinquency and auction proceedings were void due to multiple irregularities, including lack of proper notice, defective posting and publication of the notice of delinquency, and the suspiciously low auction price. The RTC ruled in favor of Solco, ordering the surrender of the title and the issuance of a new one in his name.

ISSUE

Whether the Court of Appeals correctly reversed the RTC’s decision by declaring the tax auction sale null and void due to non-compliance with the mandatory procedures under the Local Government Code.

RULING

Yes, the Supreme Court affirmed the Court of Appeals’ decision. The legal logic centers on the mandatory and jurisdictional nature of the procedures for tax delinquency sale under Republic Act No. 7160 (the Local Government Code). For a tax auction sale to be valid, the local government must strictly comply with the requisite steps, including the service of warrants of levy, posting and publication of the notice of sale, and the conduct of the auction itself. These steps are not mere formalities but are essential to due process, as they afford the taxpayer an opportunity to contest the action or redeem the property.
The Court found that Solco, as the party seeking to benefit from the auction, failed to present sufficient evidence to prove the City Treasurer’s compliance with these mandatory procedures. Specifically, he did not substantiate the proper posting of the notice of delinquency or the notice of sale as required by law. In contrast, Megaworld successfully cast doubt on the regularity of the proceedings. In tax sales, the presumption of regularity in the performance of official duty cannot prevail when, as here, there is a clear showing of non-compliance with specific statutory requirements. Consequently, the auction sale was declared null and void for being conducted in violation of the law, and Solco acquired no valid title to the property. The Court emphasized that the validity of a tax sale is dependent on the strict observance of the law, and any deviation renders the sale void.