Case Digest: Valbueco, Inc. v. Province of Butuan, GR No. 173829, June 10, 2013

 

CASE TITLE: Valbueco, Inc. v. Province of Butuan
GR No/ Date: G.R. No. 173829, June 10, 2013
PETITIONER: Valbueco, Inc. Represented by: Jaso, Dorillo and Associates	RESPONDENTS: Province of Bataan, represented by its Provincial Governor Antonio Roman;  Emmanuel M. Aquino, in his official capacity as Registrar of the Register of Deeds of Balanga, Bataan; and  Pastor P. Vichuaco, in his official capacity as Provincial Treasurer of Balanga, Bataan
ACTION WITH THE SUPREME COURT: Petition for Review on Certiorari under Rule 45
PONENTE: Peralta, J.
FACTS: Valbueco, Inc. owned eight parcels of land in Bagac, Bataan, with a total area of 1,862,123 sq. m. and assessed value of ₱1,364,330.00 as of 1994. Due to unpaid real property taxes, these properties were sold at a public auction in 1987 or 1988, with the Province of Bataan as the winning bidder for ₱70,762.90. On March 29, 1995, Valbueco filed a complaint to nullify the tax sale and the consolidation of title to the Province of Bataan, seeking reconveyance of the properties. Valbueco alleged irregularities in the tax collection and auction process, including lack of distraint on personal property, absence of proper notice and publication, and unlawful consolidation of title. The Province of Bataan and its officials denied the allegations, claiming compliance with all legal requirements under Presidential Decree No. 464. They argued that multiple remedies could be used simultaneously for tax collection and that no prior distraint of personal property was necessary. The properties were placed under the Comprehensive Agrarian Reform Program (CARP) and awarded to beneficiaries, prompting Valbueco to amend its complaint on September 10, 1998, to include additional defendants (the DAR Secretary and 85 beneficiaries). Valbueco contended the properties were pasture lands and should not have been covered by CARP. The beneficiaries and DAR Secretary moved to dismiss the amended complaint, citing lack of jurisdiction and failure to exhaust administrative remedies. They argued that the land transfer and issuance of Certificates of Land Ownership Awards (CLOAs) were lawful. RTC-Bataan: Dismissed the amended complaint for lack of jurisdiction but later reversed its decision, asserting jurisdiction over the legality of the auction sale and transfer of title. After trial, the complaint was dismissed and Valbueco was ordered to pay ₱50,000.00 in attorney's fees. CA: Dismissed the appeal and affirming the RTC decision but deleting the award of attorney's fees.
ISSUE: Whether the tax sale and the consolidation of title and ownership in favor of respondent Province is null and void. NO
PETITIONER ARGUMENTS:	DEFENSE:
PREVAILING PARTY: Respondents
DECISION/DOCTRINE:  While it has been ruled that the notices and publication, as well as the legal requirements for a tax delinquency sale under Presidential Decree No. 464 (otherwise known as the Real Property Tax Code),  are mandatory and that failure to comply therewith can invalidate the sale in view of the requirements of due process, We have equally held that the claim of lack of notice is a factual question. In a petition for review, the Court can only pass upon questions of law; it is not a trier of facts and will not inquire into and review the evidence presented by the contending parties during the trial and relied upon by the lower courts to support their findings. The issues raised in this petition undeniably involve only questions of fact. On this ground alone, it should be dismissed outright. Even if We dig deeper and scrutinize the entire case records, the same conclusion would be arrived at. Indeed, petitioner utterly failed to present preponderant evidence to support its allegations that the auction sale of the subject properties due to tax delinquency was attended by irregularities. The two witnesses it presented are neither competent nor convincing to attest with reasonable certainty that respondents failed to observe the procedural requirements of PD 464. The Court is thus, satisfied with the factual findings of the trial court, as affirmed by the CA, and sees no reason to disturb the same. We cannot lend credence to the testimony of Gaudencio P. Juan, petitioner’s Forestry and Technical Consultant who claimed to have been an employee since 1964, that no notice of tax delinquency, demand for tax payment or collection notice was received and that there was no publication and posting of notice of sale held. According to him, his duties and responsibilities include: bringing out some technical matters to the company (e.g., use of grazing lands) and preparing plans for implementation by the company (e.g., occupation of the area, the conversion of the area for pasture purposes); land and boundary disputes between petitioner and owners of adjoining areas; planning some other plans for the implementation in the area like reforestation and other forestry cases; and planning preparation of reports, uses of the land for forestry and agricultural purposes. These, however, have nothing to do with the duty of ensuring the prompt and timely settlement of petitioner’s realty taxes or of making any representation, for or in behalf of petitioner, with respondents in connection thereto. In fact, Juan categorically admitted that he is not the custodian of petitioner’s corporate records: ATTY. BANZON: Q: It is not among your duties to keep records on file? A: No, sir. Q: Whose duties is it to keep in custody the records of the corporation? A: Our records department, sir. Q: Who heads the records department? A: It is now Gil Herpe, sir. Q: When did Mr. Herpe assume his position as the custodian of the corporation? A: From 1989, sir. Q: Up to the present? A: Yes, sir. Same thing can be said of Atty. Domingo Lalaquit, the second and last witness who professed to be the legal counsel of petitioner since 1973. He noted that he handled petitioner’s legal problems only when referred to him by Mr. Valeriano Bueno, then (but now deceased) President of petitioner. With respect to the subject properties, at the time the matter was referred to him, he found out that these were already sold at public auction. There is no showing, based on his own testimony, that he was involved in taking care of the legal concerns of the subject properties before or during its tax sale. No wonder, he is not aware of and did not receive any notices of assessment or tax delinquency from respondent Province for and in behalf of petitioner. The Court cannot simply rely on the representation of Juan and Atty. Lalaquit that there was no notice of assessment and/or demand for payment of tax delinquency made by respondents because it was what Mr. Bueno told them so in a "conversation." Conformably with the hearsay rule, the trial court correctly allowed the questions propounded by petitioner’s counsel to Juan and Atty. Lalaquit but only insofar as they testify that a "conversation" took place and not necessarily admitting as true the alleged utterance of Mr. Bueno. Neither can We bank on Juan’s mere assumption and speculation nor on his inconsistency, if not confused, testimony: Q: When you said that the corporation was not notified by the Provincial Treasurer you are assuming that must have been so because you could not find any record of any notice? A: I have not seen any notice, sir. Q: And so you presumed that there must have been no notice? A: Precisely, sir. Q: When you said ["]precisely[,"] you mean ["]yes["]? A: Yes, sir. Q: In the same manner that when you said that you have not received any notice of assessment you surmised that there must have been no or you have no record of notice of assessment? x x x That’s why you assumed that there was no assessment? A: Yes, sir. Q: In the same manner when you testified that there was no demand made by the Provincial Treasurer you, according to you, you have not received any, you assumed that there was no demand because according to you all records were lost? A: Yes, sir. Q: When you stated that there was no levy, distraint, you have to give the same reason because that is your assumption and opinion on your part because you have no record of the levy? A: We have not seen that, sir. Q: You have not seen because according to you all records of the corporation were lost? A: Not exactly, it must have been kept in the office, sir, but I have not noticed. Q: What do you mean that you have no notice? In other words there must have been records but you have no notice? A: Yes, sir.  x x x x ATTY. BANZON: Q: x x x Why do you have to ask Mr. Bueno regarding the assessment? A: Because he is concerned about the property, sir. Q: But, you were the one who asked[,] it is not Mr. Bueno? A: No, sir I did not ask Mr. Bueno. Q: In your testimony of June 4 of this year the question asked of you was "did you not ask the president if there was a notice of assessment?" and your answer was ["yes, sir."]. Do you recall that you have asked that question and you made that answer? A: Yes, sir. Q: So, you asked Mr. Bueno? A: No, sir I did not ask Mr. Bueno. [He] was the one [who probably] told me, sir. Q: So, your answer to the question is not correct? A: I think so, sir. Q: Do you recall of any other question which you answered is not correct (sic)? A: No more, sir. Q: All are correct? A: Maybe, sir. Q: When you said "maybe", you are not sure that your answer is not correct? A: Specifically yes I said maybe. Q: Do you know the meaning of ["]maybe["]? A: Not sure, sir. Q: When you said ["]maybe["], you are not sure that your other previous answers were correct? A: Yes, sir.  Reading through the transcript of stenographic notes unveils two likely scenarios that could have actually transpired in this case: either the notices sent by respondents were lost by petitioner, or the same were sent to but not received by petitioner without the fault of respondents. In both instances, We cannot invalidate the public auction or nullify the consolidation and transfer of title in favor of respondent Province. Similar to what happened on its copy of Certificate of Filing of Amended Articles of Incorporation and Certificate of Filing of By-laws, Juan confessed that the notices sent by respondent Province were probably one of those corporate documents lost due to the "several" transfer of petitioner’s office. During his cross-examination, he answered as follows: Q: Why do you have to secure from the SEC[?] why you do not ask your (sic) secretary of the corporation who is the legal custodian of this corporation? A: The papers could no longer be located after we transferred office several times, sir. Q: What other papers that you cannot locate? x x x x A: There are other titles and documents that could not be located so we requested for certified true copy of these documents, sir. Q: And these papers may include notices which must have been sent to Valbueco regarding this property from the province of Bataan? A: Yes, sir. Q: And this may (sic) among those lost of the notices of assessment or levy? A: We have not seen those documents, sir. Q: You have not seen those documents because this (sic) was (sic) among those lost in your records? A: Maybe, sir. Q: The reason why you stated that you have not seen any of the documents coming from the Province of Bataan in your files? A: Yes, sir.  The testimony of Atty. Lalaquit also shows that petitioner changed its office address in 1975 without even informing respondent Province: CROSS EXAM. BY ATTY. BANZON: x x x x Q: When you stated that . . . by the way, Mr. Bueno used to hold office at 7th Floor of Bank of Philippine Island (sic) Building at Ayala Avenue in Makati? A: Yes, sir. Q: That is his usual address? A: From 1973 up to 1974 sir. Q: And did you notify the treasurer’s office regarding the change of address? A: I did not sir. Q: At any rate, that address appears or appeared in all certificates of title involving properties in Bagac which is the subject matter of this action? A: I am not very sure sir. Q: And these are evident in the annexes of the complaint, is it not? And Valbueco Incorporporation (sic) and I quote, Valbueco Incorporation organized and existing under the laws of Republic of the Philippines with office at 7th Floor, Bank of Philippine Island (sic), Building Ayala Avenue, Makati, Rizal? A: If that appears in the document sir. Q: There is also an office at the 4th Floor, ICOPHIL Bldg, 1081 Pedro Gil, Paco, Manila? A: Yes, sir. Q: That is for Valbueco Industrial and Development Corporation? A: The group of companies of Mr. Bueno holds office in the whole building of ICOPHIL, sir.37 Under Section 73 of PD 464 – x x x notices of the sale at public auction may be sent to the delinquent taxpayer, either (i) at the address as shown in the tax rolls or property tax record cards of the municipality or city where the property is located or (ii) at his residence, if known to such treasurer or barrio captain.  Plainly, Section 73 gives the treasurer the option of where to send the notice of sale. In giving the treasurer the option, nowhere in the wordings is there an indication of a requirement that notice must actually be received by the intended recipient. Compliance by the treasurer is limited to strictly following the provisions of the statute: he may send it at the address of the delinquent taxpayer as shown in the tax rolls or tax records or to the residence if known by him or the barrio captain.  In this case, it is reasonable to deduce that respondent Provincial Treasurer actually sent the notices at the address uniformly indicated in TCT No. 47377, 47378, 47379, 47380, 47381, 47382, 47385 and 47386, as well as in the tax declarations, which is 7th Floor, Bank of P.I. Bldg., Ayala Avenue, Makati, Rizal. The fault herein lies with petitioner, not with respondent Provincial Treasurer. It had a number of years to amend its address and provide a more updated and reliable one. By neglecting to do so, it should be aware of the chances it was taking should notices be sent to it. Respondent Provincial Treasurer cannot be faulted for presumably sending the notices to petitioner’s address indicated in the land titles and tax declarations of the subject properties. The principle We enunciated in Valencia v. Jimenez, Camo v. Riosa Boyco, and Requiron v. Sinaban that there can be no presumption of regularity of any administrative action which results in depriving a taxpayer of his property through a tax sale does not apply in the case at bar.  By and large, these cases cited by petitioner involved facts that are way too different from the one found in the instant case. More importantly, in the present case, respondent Province, through its witness, Josephine Espino, unequivocally attested that the procedural requisites mandated by PD 464 were definitely observed. During her presentation, Espino stated that she is a Local Treasury Operation Officer IV of the Provincial Treasurer’s Office since March 2000 and that she had previously served as Local Treasury Operations Officer and Local Revenue Collection Officer III of the Provincial Treasurer’s Office, being in charge of collecting taxes.43 Under oath, she declared to have personal knowledge of the fact that notice of tax delinquency was sent by the Provincial Treasurer’s Office to petitioner. She could not, however, show any documentary proof mainly because the exclusive folder of petitioner’s properties are now missing despite exercise of all possible means to locate them in other property files. Considering the long time that elapsed between the public sale held sometime in 1987 or 1988 and the presentation of her testimony in 2002, it is also understandable that Espino could no longer remember the minute details surrounding the notices, publication, and posting that respondent Provincial Treasurer observed relative to the auction sale of the subject properties. The Court, therefore, affirms the RTC’s opinion that petitioner was not able to establish its cause of action for its failure to submit convincing evidence to establish a case and the CA’s position that it must rely on the strength of its evidence and not on the weakness of respondents’ claim. Indeed, in Sapu-an v. Court of Appeals, We held: The general rule in civil cases is that the party having the burden of proof must establish his case by a preponderance of evidence. By "preponderance of evidence" is meant that the evidence as a whole adduced by one side is superior to that of the other. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts on which they are testifying, the nature of such facts, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility as far as the same may legitimately appear at the trial. The court may also consider the number of witnesses, although the preponderance is not necessarily with the greatest number. It is settled that matters of credibility are addressed basically to the trial judge who is in a better position than the appellate court to appreciate the weight and evidentiary value of the testimonies of witnesses who have personally appeared before him. What petitioner has accomplished is only to cast doubts by capitalizing on the absence of documentary evidence on the part of respondents. While such approach would succeed if carried out by the accused in criminal cases, plaintiffs in civil cases need to do much more to overturn findings of fact and credibility by the trial court, especially when the same had been affirmed by the CA. It must be stressed that overturning judgments in civil cases should be based on preponderance of evidence, and with the further qualification that, when the scales shall stand upon an equipoise, the court should find for the defendant. The "equiponderance of evidence" rule states that when the scale shall stand upon an equipoise and there is nothing in the evidence which shall incline it to one side or the other, the court will find for the defendant. Under this principle, the plaintiff must rely on the strength of his evidence and not on the weakness of the defendant's claim; even if the evidence of the plaintiff may be stronger than that of the defendant, there is no preponderance of evidence on his side if such evidence is insufficient in itself to establish his cause of action. WHEREFORE, the petition is DENIED. The assailed October 24, 2005 Decision and July 18, 2006 Resolution of the Court of Appeals in CAG.R. CV No. 81191, which sustained the August 19,2003 Decision of the Regional Trial Court, Branch 1, Balanga City, Bataan dismissing the case are hereby AFFIRMED. DIOSDADO M. PERALTA Associate Justice