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Correcting Irregularities in Auction Sale of Delinquent Property

Curing irregularities in Auction Sale of Delinquent Property:

Delinquency sale: depriving ownership without due process

Constitutional provision:

No person shall be deprived of life, liberty or property without due process.

Property rights involved

Nature of property rights.

Right to be respected in own home.

Cannot enter an abode without any warrant.

Rights taken and rights conferred

Auction sale of ones property is a confiscation of the property to satisfy the tax delinquency.

Government does not take possession but grants rights of ownership and possession to another person.

It transfers ownership.

Delinquent taxpayer is at risk of being deprived of ownership. From the time the property is advertised

for auction, the property owner s title to the property is potentially at risk. The risk becomes real when

another person buys the property at public auction. The buyer acquires a future right to own the

property one year from the date of the auction. It is a real right that ripens to full ownership one yearfrom the date of auction.

If the delinquent taxpayer fails to redeem the property, the right of ownership is completed.

It is the treasurer who executes the Deed of Conveyance. The Government, through the Local

Treasurer, appropriates the power to transfer ownership of the property sold at auction.

Who is entitled to notice?

for purposes of the collection of real property taxes, the registered owner of the property is considered

the taxpayer. Hence, only the registered owner is entitled to a notice of tax delinquency and other

proceedings relative to the tax sale. Talusan v. Tayag

Section ____ (Art. 347 of IRR) of Local Government Code is unconstitutional in that it does away with

personal notice requirement and states that

Formal demand for the payment of the delinquent taxes and penalties due is not a pre-requisite to

such remedies. The notice of delinquency required in Article 346 of this Rule shall be sufficient for the

purpose.

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Art. 358 (IRR). No court shall declare a sale at public auction invalid by reason of irregularities or

informalities in the proceedings unless the substantive rights of the delinquent owner of the real

property or the person having legal interest therein have been impaired.

Talusan v. Tayag , G.R. No. 133698, April 4, 2001, 356 SCRA 263, 276-277.

In this regard, we note that unlike land registration proceedings which are in rem, cases involving an

auction sale of land for the collection of delinquent taxes are in personam. Thus, notice by publication,

though sufficient in proceedings in rem, does not as a rule satisfy the requirement of proceedings in

personam. As such, mere publication of the notice of delinquency would not suffice, considering that

the procedure in tax sales is in personam. It was, therefore, still incumbent upon the city treasurer to

send the notice of tax delinquency directly to the taxpayer in order to protect the interests of the latter.

Section 73. P.D. 464 (Real Property Tax Code)Copy of the notice shall forthwith be sent either by registered mail or by messenger, or through the

barrio captain, to the delinquent taxpayer, at his address as shown in the tax rolls or property tax record

cards of the municipality or city where the property is located, or at his residence, if known to said

treasurer or barrio captain: Provided, however, That a return of the proof of service under oath shall be

filed by the person making the service with the provincial or city treasurer concerned.

The auction sale of real property for the collection of delinquent taxes is in personam, not in rem. 10

Although sufficient in proceedings in rem like land registration, mere notice by publication will not

satisfy the requirements of proceedings in personam. 11 "[P]ublication of the notice of delinquency[will] not suffice, considering that the procedure in tax sales is in personam." 12 It is still incumbent

upon the city treasurer to send the notice directly to the taxpayer the registered owner of the

property in order to protect the latter's interests. Although preceded by proper advertisement and

publication, an auction sale is void absent an actual notice to a delinquent taxpayer. 13

The sale of land "for tax delinquency is in derogation of property rights and due process[;] the

prescribed steps must be followed strictly." 14 In the present case, notices either of delinquency or of

sale were not given to the delinquent taxpayer. Those notices are mandatory, and failure to issue them

invalidates a sale. 15

10. Pea, Pea Jr., & Pea, Registration of Land Titles and Deeds (1994 rev. ed.), p. 376. Talusan v.

Tayag, 356 SCRA 263, 276, April 4, 2001.

11. Pea, Pea Jr., & Pea; supra.

12. Talusan v. Tayag, supra, per Panganiban, J.

13. Puzon v. Abellera, 169 SCRA 789, 795-796, January 31, 1989.

14. Ramos v. Villaverde, 88 Phil. 651, 654, April 28, 1951, per Tuason, J.

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15. See Pantaleon v. Santos, 101 Phil. 1001, July 31, 1957.