GR L 11291; (April, 1959) (Digest)
G.R. No. L-11291; April 30, 1959
JOSE DEL CASTILLO, Ancillary Administrator of the testate Estate of Isabel Schober Jimas, plaintiff-appellant, vs. DELFIN S. SIAN, defendant-appellee, TREASURER OF THE CITY OF BAGUIO, defendant-appellant, REGISTER OF DEEDS OF THE CITY OF BAGUIO, ET AL., defendants-appellees.
FACTS
A parcel of land in Baguio City was sold to “Schober Brothers,” and Transfer Certificate of Title No. 1555 was issued in their name. The City Treasurer assessed and collected taxes from “Schober Brothers” up to 1948. Due to non-payment of the 1949 tax, the treasurer, after proper notices and publication, sold the entire lot at public auction on April 3, 1950, to Delfin S. Sian for P218.13. The property was not redeemed. The treasurer executed a final deed of sale, annotated on the title. After the “Schober Brothers” failed to surrender the owner’s duplicate certificate upon request, Sian petitioned the court for cancellation of the old title and issuance of a new one in his name. Notices sent to J.B. Hoover, the ancillary administrator for the estate, were returned unclaimed. The court granted the petition, and Transfer Certificate of Title No. 1575 was issued to Sian. Sian later sold the land to the Rodrigo spouses, who subsequently sold it to Jose Ma. Delgado. New certificates of title were issued accordingly.
Almost five years after the auction sale, Jose del Castillo, as ancillary administrator of the estate of Isabel Schober Jimas (widow and sole heir of William J. Schober, a partner in “Schober Brothers”), filed an action. He alleged that the land had been adjudicated to William J. Schober and, by court order, delivered to Isabel Schober (later Jimas) in 1947, prior to the tax sale. He sought to annul the auction sale and cancel the subsequent titles, requesting a new title be issued to the estate.
The trial court dismissed the complaint against all defendants except the City Treasurer of Baguio. It ruled the auction sale null and void because the entire parcel was sold for a small tax debt, but held that the Land Registration Act barred recovery of the land. It limited the plaintiff’s remedy to an action for damages against the City Treasurer. Both the plaintiff and the City Treasurer appealed.
ISSUE
1. Is the sale at public auction conducted by the City Treasurer of Baguio null and void?
2. Are defendants Delfin S. Sian, the Rodrigo spouses, and Jose Ma. Delgado purchasers for value and in good faith?
RULING
1. No, the auction sale was not null and void. The sale was conducted under Section 2571 of the Baguio City Charter, which states the treasurer may advertise for sale “so much thereof as may be necessary” to satisfy the tax due. The Court held this provision is directory, not mandatory. The treasurer is expected to use judicious judgment. Under the circumstances, selling the entire lot was justified as it was a single, indivisible lot covered by one certificate of title. Subdividing it was not feasible, and the treasurer acted in good faith. The trial court’s ruling on the sale’s nullity was reversed.
2. Yes, the subsequent purchasers are purchasers in good faith and for value. The Court applied the principle of the Torrens system. Under Sections 50 and 51 of the Land Registration Act (Act No. 496), registration is the operative act that validates a transfer. A person dealing with registered land is only charged with notice of burdens noted on the certificate of title. At the time of the auction sale and all subsequent transactions, the title remained registered in the name of “Schober Brothers.” The alleged prior transfer to Isabel Schober Jimas in 1947 was not recorded. Therefore, Sian, as a bona fide purchaser at the auction sale, acquired good title against the prior unrecorded transferee. The subsequent buyers, the Rodrigo spouses and Delgado, who relied on the clean titles issued, are likewise protected as innocent purchasers for value.
DISPOSITIVE:
The decision appealed from was REVERSED insofar as the City Treasurer of Baguio is concerned (the sale is not declared null). The decision was AFFIRMED in all other respects (the titles of Sian and subsequent purchasers are upheld). No costs.