G.R. No. 253115. September 15, 2021
FILINVEST DEVELOPMENT CORPORATION, PETITIONER, VS. NILO DEL ROSARIO, RESPONDENT.

FACTS

This case originated from a petition for confirmation of final bill of sale and entry of new certificate of title filed by respondent Nilo Del Rosario before the Regional Trial Court (RTC). Filinvest Development Corporation (Filinvest) was the registered owner of a parcel of land in Quezon City covered by TCT No. N-375865. Due to Filinvest’s delinquency in paying real estate taxes, the property was sold at a public auction on October 3, 2013, with Del Rosario as the highest bidder for P23,602.53. A Certificate of Sale was issued, and after Filinvest failed to redeem the property within the one-year period, a Final Bill of Sale was issued to Del Rosario on March 24, 2015. Del Rosario filed the petition after Filinvest failed to surrender the TCT. Filinvest countered that it had sold the property to Spouses Danilo and Milagros Cabreros, as evidenced by a provisional registration annotated on the title, and that it did not receive notices from the City Treasurer’s Office. The RTC granted Del Rosario’s petition, confirming the tax sale and ordering the cancellation of Filinvest’s title and the issuance of a new one in Del Rosario’s name. The Court of Appeals (CA) affirmed the RTC decision, ruling that Filinvest could not question the validity of the sale due to its non-compliance with the deposit requirement under Section 267 of the Local Government Code (LGC). Filinvest filed a Petition for Review on Certiorari before the Supreme Court.

ISSUE

Whether the tax delinquency sale of the subject property is valid.

RULING

The Supreme Court GRANTED the petition and declared the tax sale NULL and VOID. The Court held that the deposit requirement under Section 267 of the LGC applies only to initiatory actions assailing the validity of a tax sale and not to a defensive challenge raised in a confirmation proceeding, as in this case. Therefore, Filinvest’s failure to make a deposit did not bar it from questioning the sale’s validity. On the merits, the Court found that the mandatory procedural requirements for a valid tax delinquency sale under the LGC were not strictly followed. Specifically, the City Treasurer failed to provide sufficient proof that the registered owner, Filinvest, actually received the required notices (Statement of Delinquency, Final Notice, Warrant of Levy, and Notice of Sale). Moreover, the Court ruled that the Spouses Cabreros, as the actual owners by virtue of the annotated provisional registration on the title, were persons with legal interest entitled to receive individual notices of the delinquency and sale, which were not given. The sale was also rendered invalid due to the gross inadequacy of the purchase price (P23,602.53) compared to the property’s fair market value (P259,500.00). Consequently, Del Rosario did not become the new owner, and the confirmation of the sale and the order for a new title in his name were set aside.