Title: Sps Plaza v. LustivaG.R. No. 172909Date: March 5, 2014Ponente: Brion, J.

Parties:Petitioners: Sps Silvestre Plaza and Elena PlazaRespondents: Guillermo Lustiva, Eleodora Vda. de Martinez, Vicky Sayson Goloseno

Facts:

An agricultural land located in Butuan was the subject of this petition. In 1997, the Court of Appeals ruled that among the Plaza siblings namely: Aureliano, Emiliana, Vidal, Marciano, and Barbara, Barbara was the owner of the land. Said decision has become final and executory and pursuant to such, the successors of Barbara, the respondents in this petition (Lustiva et al.), have continued occupying the property.

In 1999, Vidal’s son and daughter in law, petitioners in this case (Sps Plaza), filed a complaint to enjoin respondents from taking possession of the property alleging that they acquired the land from a certain Virginia Tuazon in 1997, who allegedly acquired the land in a tax deliquencey sale conducted by the City of Butuan on Dec. 27, 1996.

Respondents, in their answer, pointed out that the land was never offered in a public auction; also assuming it had been sold, Tuazon, being a government employee was disqualified from bidding in a public auction as stated in Sec. 89 of the Local Government Code (LCG) of 1991. Since her participation was void, she could not have transferred ownership to the petitioners. Likewise, petitioners merely falsified tax declarations on the property by inserting the name of Vidal, making him appear as a co-owner of the agricultural land. As heirs of Vidal, they fraudulently redeemed the land from Tuazon.

The RTC and the CA ruled in favour of respondents, finding Tuazon disqualified from bidding under Sec. 89 of the LGC, and the petitioners as buyers in bad faith for falsifying tax declarations which they used to redeem the property with.

Issues:WON petitioners validly acquired the subject land from Tuazon, who acquired said land in a public auction despite being a government employee – NO.

Ratio:

Petitioners allege that, if Tuazon was indeed disqualified, then Sec. 181 of the LGC applies, meaning if there was no bidder, then the City of Butuan was to be considered as the purchaser of the land in auction and therefore, they bought the land, not from Tuazon, but directly from the City of Butuan, as redeemers.

Also, respondents may not question the validity of the auction for failing to deposit with the court the amount required under Sec. 267 of the LGC.

The Supreme Court in finding against the petitioners stated that Sec. 181 and Sec. 267 of the LGC finds no application in this case. Under Sec. 181, the law authorizes the local government unit to purchase the auctioned property only where “there is no bidder”, or “the highest bid xxx is insufficient.” A disqualified bidder is not among the authorized grounds.

Sec 267 likewise does not apply. The deposit required by Sec. 267 applies to actions for annulment of tax sales. The deposit precondition is a legal device to guarantee the satisfaction of a tax delinquency with the local government unit keeping the payment on the bid price no matter the final outcome of the suit to nullify a tax sale.

The petitioners suit here is an action for injunction and damages. The issue of nullity of the auction was raised by respondents themselves merely as a defense and in no way converted the action to an action for annulment of tax sales. Therefore, petitioners invocation of Sec. 267 is misplaced.

Petition for certiorari DENIED. Decision of the Court of Appeals AFFIRMED.