ABC Law Firm

December 4, 2021
Kyle Centeno
Manila City,
Philippines

Re: Legal opinion on any judicial recourse after finding that the purchased
lots were subsequently sold in auction without knowledge of the rightful
owner

Dear Mr. Centeno:

This legal opinion will answer your question whether you have a judicial recourse or
remedy after finding that the two lots in Cavite that you purchased on 2011, without
your knowing sometime 2014, was subsequently levied by the Government of Cavite
due to non-payment of taxes thereafter sold in auction on November 2015.

Antecedent Facts

As per our discussion and based on the documents shown to me, the following
are the relevant facts:

Sometime 2011, you bought six pieces of property situated in Cavite through
Paredes Realty Corporation (PRC) and paid in full the price around 2013.

In 2016, all properties were transferred to your name except for the two lots
(A&B). You went to PRC to verify the status of the property, and the latter assured
that the lots be transferred under your name the soonest.

Come 2020, after you inquired about the status of the lots, you were told that
there is a legal problem that PRC took responsibility to manage. In your own efforts,
after inquiry from the Registry of Deeds to check the status of the subject properties,
you found out that Lots A & B were levied for non-payment of taxes by the
Government of Cavite and subsequently sold by auction last November 2015.

Legal Evaluation

The applicable law is Arts. 476 and 477 of the New Civil Code which
provides that:

“Art. 476. Whenever there is a cloud on title to real

property or any interest therein, by reason of any
instrument, record, claim, encumbrance or
proceeding which is apparently valid or effective
but is in truth and in fact invalid, ineffective,
voidable, or unenforceable, and may be prejudicial
 to said title, an action may be brought to remove
such cloud or to quiet the title.

An action may also be brought to prevent a cloud

from being cast upon title to real property or any
interest therein1.

Art. 477. The plaintiff must have legal or equitable

title to, or interest in the real property which is the
subject-matter of the action. He need not be in
possession of said property2.”

Under the provisions of the law, an action to remove the cloud over the title or
any interest therein or action to quiet title may commence where the plaintiff has legal
or equitable title to, or interest in, the property which is the subject-matter of the
action.

In an action for quieting of title, the competent court is tasked to determine the
respective rights of the complainant and other claimants, "x x x not only to place
things in their proper place, to make the one who has no rights to said immovable
respect and not disturb the other, but also for the benefit of both, so that he who has
the right would see every cloud of doubt over the property dissipated, and he could
afterwards without fear introduce the improvement she may desire, to use, and even to
abuse the property as he deems best x x x.3"

In this case, the right of action may be had from where the plaintiff has legal
or equitable title thereto. Legal title denotes registered ownership, while equitable title
means beneficial ownership. In the absence of such legal or equitable title, or interest,
there is no cloud to be prevented or removed 4. In general, the registered owner of a
property is the proper party to bring an action to quiet title. However, it has been held
that this remedy may also be availed of by a person other than the registered owner,
because in Art. 476 of the New Civil Code, ‘title’ does not necessarily refer to the
original or transfer certificate of title. Thus, lack of actual certificate to a property
does not necessarily bar an action to quiet title5.

After determining the appropriate legal standing, it is further essential to note

the procedural aspect for this action, namely governed by Rule 63 6 of the Rules of
Court on declaratory relief and similar remedies. Actions for declaratory relief and
other similar remedies are distinguished from ordinary civil actions because in
declaratory relief, the subject-matter is a deed, will, contract or other written
instrument, statute, executive order or regulation, or ordinance. The issue is the

1
Article 476, New Civil Code.
2
Article 477, New Civil Code.
3
G.R. No. 105902 - Baricuatro Jr vs CA, Feb. 9, 2000.
4
G.R. No. 180076, Manaquil vs Moico, Nov. 21, 2012.
5
G.R. No. 156171, Sps. Portic vs Cristobal, Apr. 22, 2005
6
Rule 63, Rules of Court: “An action for the reformation of an instrument, to quiet title to real property or remove clouds
therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be brought under this Rule.”
validity or construction of these documents. The relief sought is the declaration of the
petitioner’s rights and duties thereunder7.

Another issue of equal importance that may arise affecting the claim of the
title in question is whether such action may prosper beyond the redemption period of
1-year from the date of forfeiture.

For the case, we rely on the basic rules in interpretation: the liberal application
of redemption laws inquired into the equities of the case and preference to uphold the
protection afforded to the original owner as it is the policy of the law to aid rather
than defeat the owner’s right8.

In a long line of cases, the Court has indeed been copious in its stance to allow
the redemption of property where in doing so, the ends of justice are better realized.
Doronila v. Vasquez9 allowed redemption in certain cases even after the lapse of the
one-year period in order to promote justice and avoid injustice. In Tolentino v. Court
of Appeals10, the policy of the law to aid rather than defeat the right of redemption
was expressed, stressing that where no injury would ensue, liberal construction of
redemption laws was to be pursued and the exercise of the right to redemption to be
permitted to better serve the ends of justice. In De los Reyes v. Intermediate Appellate
Court11, the rule was liberally interpreted in favor of the original owner of the property
to give him another opportunity, should his fortunes improve, to recover his property.

Furthermore, we then question the validity of the assessment for the collection
of real property tax of the subjected properties. It is incumbent upon the local assessor
to provide the correct information concerning the ownership and assessed value of the
delinquent real property subject to civil action through the court or to public auction
by the treasurer12. As such in the case of Sps. Vizarra vs Rodriguez, the auction sale
was null and void for non-compliance with the provisions of the Real Property Tax
Code when the provincial assessor failed to serve a separate notice to Conchita—the
true and lawful owner— that her land was to be auctioned off due to non-payment of
real estate taxes, he violated Section 73 of Presidential Decree No. 464, otherwise
known as the Real Property Tax Code, which provides that a copy of the notice shall
forthwith be sent by registered mail, or by messenger or through the barrio captain to
the delinquent taxpayer, at his address shown on the tax record cards or at his
residence. The auction sale, therefore, was null and void for noncompliance with the
provisions of the Real Property Tax Code on mandatory notice13.

The failure of the assessor to ascertain and thereafter notify the rightful owner
of the property being subjected for levy denotes the nullity of the subsequent auction
sale of the same.

7
G.R. No. 170375, Republic vs Mangotara, Jul. 7, 2010.
8
G.R. No. 207791, The City of Davao vs The intestate Estate of Dalisay, Jul. 15, 2015
9
72 Phil. 572 (1941).
10
193 Phil. 663 (1981).
11
257 Phil. 406 (1989).
12
Manual on Real Property Appraisal and Assessment Operations, Department of Finance, Bureau of Local Government
Finance, January 2006, pg. 31.
13
G.R. 148014, Sps. Vizarra vs Rodriguez, Dec. 5, 2006.
Legal Opinion in Brief

We are of the considered opinion that having an equitable title to Lots A&B,
you may file an action to quiet a title to real property before the court having
jurisdiction.

Regarding the nature of the action filed before the trial court, quieting of title
is a common law remedy for the removal of any cloud upon or doubt or uncertainty
with respect to title to real property. Originating in equity jurisprudence, its purpose is
to secure "x x x an adjudication that a claim of title to or an interest in property,
adverse to that of the complainant, is invalid, so that the complainant and those
claiming under him may be forever afterward free from any danger of hostile claim14."

As such, we submit that the questioned auction sale does not warrant the buyer
from the time of sale legal ownership of the property sold. A contract of repurchase
arising out of a contract of sale where the seller did not have any title to the property
"sold" is not valid. Since nothing was sold, then there is also nothing to repurchase15.

We appreciate the opportunity to advise you regarding this matter. Please let
us know if you wish to discuss any of these issues further.

Very Truly Yours,

ABC Law Firm

By:

(Sgd.)
__________________________
xx

14
382 Phil. 15, 25 (2000) Baricuatro, Jr. v. Court of Appeals
15
G.R. No. 116635, Almojera vs CA, Jul. 24, 1997