Republic of the Philippines

Court of Appeals
Manila

TWELFTH DIVISION

ALEXANDER B. AGUIRRE, CA-G.R. SP No. 146041

HORACIO PAREDES,
RICARDO F. DE LEON,
REYNATO Y. SAWIT,
AGUSTIN N. PEREZ,
GERONIMO M. COLLADO,
EMMANUEL C. CHING,
MACABANGKIT LANTO,
MANUEL DIZON, TARCISIO
CALILUNG, IRINEO
AGUIRRE, ERNESTO ORTIZ,
LUIS BERNARDO JAMBALOS
III, FRANCISCO ARCILLANA,
LUIS S. TANJANGCO,
PABLITO VILLEGAS, AYALA
HILLSIDE ESTATES
HOMEOWNER'S
ASSOCIATION, INC., AYALA
LAND INC., and CAPITOL
HILLS GOLF and COUNTRY
CLUB, INC.,
Petitioners, Members:

Bruselas, Jr., Chairman

- versus - Inting, S.B., and
Santos, JJ.:

ELEUTERIO L. BATHAN, in
his capacity as Honorable
Presiding Judge of the Regional
Trial Court, Branch 92, Quezon
City, SAMUEL L.
ALVARRADO, TREASURER
OF QUEZON CITY, REGISTER
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OF DEEDS OF QUEZON CITY, Promulgated:

JOHN DOES and JANE DOES.
Respondents. February 27, 2018
x==============================================x

DECISION

Santos, J.1

Before this Court is a Joint Petition for Certiorari2 (With Prayer

for the Issuance of Temporary Restraining Order and/or Writ of
Preliminary Injunction) under Rule 65 of the Rules of Court,
seeking to nullify the Orders dated 13 November 20153 and 4 April
2016,4 both rendered by the Regional Trial Court, Branch 92,
Quezon City, (RTC) in Civil Case No. Q-10-68396.

The Antecedents

From a Complaint5 denominated as “Action Assailing

Validity of Tax Sale” dated 7 December 2010, springs the present
Petition. A parcel of land with an area of 15,598 square meters and
covered by Transfer Certificate of Title No. N-253850 6 (subject
property) and registered under the name of Capitol Hills Golf and
Country Club Inc., (CAPITOL) was made subject of a Notice of
Levy dated 16 November 2007 by the Quezon City Government,
due to non-payment of real estate taxes for the tax period of 2004
to 2007.7 The individual petitioners who filed the Complaint are all
members of CAPITOL, who invoked their right to protect the
1 This case was assigned to the undersigned ponente pursuant to Office Order No. 54-17
dated 22 August 2017 as part of his initial caseload.
2 Rollo, pp. 3-18.
3 Id., at 33; issued by Presiding Judge Eleuterio L. Bathan.
4 Id., at 31-32; issued by Presiding Judge Eleuterio L. Bathan.
5 Id., at 34-47
6 Annex “A”; Id., at 57-59.
7 Id., at 36.
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subject corporate property.8 They alleged that stockholders,

members and golfers of CAPITOL were not made aware of the tax
delinquency.9 Petitioner Ayala Land, Inc. (ALI) and CAPITOL
have an existing Agreement for a joint development of the Capitol
Golf Course since ALI's Ayala Hillside Estate (AHE) is located
inside the Capitol Golf Course.10 Petitioner Ayala Hillside Estate
Homeowner's Association, Inc. (AHE-HOA) is an association of
lot owners residing in AHE. 11

A delinquency sale of the subject property was conducted

by the Quezon City Government.12 The subject property was sold
to the highest bidder, respondent Samuel Alvarado (Alvarado) at
the auction sale which took place on 13 December 2007. 13
Consequently, a Certificate of Sale of Delinquent Property 14 and Final
Bill of Sale15 were issued in favor of Alvarado. The Complaint was
filed by petitioners seeking to nullify the Notice of Levy, Public
Auction, Certificate of Sale and Final Bill of Sale pertaining to the
subject property, premised on the alleged violation of the laws
and irregularities in the procedure of the public bidding.16

In a Manifestation17 dated 11 December 2014, the Office of

the City Attorney of Quezon City pleaded for the RTC to issue an
order for the Complaint be considered as a real action and
therefore, should be assessed in accordance with the provision of
Section 7, paragraph (a), Rule 141 of the Rules of Court. 18 The
8 Id., at 38.
9 Id., at 37.
10 Id., at 38.
11 Ibid.
12 Id., at 36.
13 Ibid.
14 Annex “C”; Id., at 70.
15 Annex “B”; Id., at 67-69.
16 Id., at 46
17 Annex “D”; Id., at 71-73.
18 Section 7. Clerks of Court of Second Level Courts-
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RTC required the parties to file their respective Memorandum of

Authorities19 in aid of the resolution of the issue of whether the
subject of the Complaint is a real action or one incapable of
pecuniary estimation. After the submission of the parties'
Memorandum of Authorities, the RTC issued the assailed Order
dated 3 November 2015, which reads:

Payment of court docket fees is jurisdictional.

Judicious analysis of the allegations of the Complaint,

the Court is of the opinion that the action is a real action, and
the basis of the payment of docket fees is the fair market value
of the property.

Let additional correct docket fees be paid first to be

computed based on the Fair Market Value of the real property
involved.

The plaintiff is directed to pay within five (5) days

additional docket fees after the Clerk of Court makes the
corresponding computation.

The Clerk of Court is directed to compute the deficient

docket fees within five (5) days from receipt of this Order.

SO ORDERED.20

Unsatisfied, petitioners filed a Motion for Reconsideration.21 An

Opposition22 to the Motion for Reconsideration was filed by private
(A) For filing an action or a permissive OR COMPULSORY counter-claim, CROSS-CLAIM,
or money claim against an estate not based on judgment, or for filing a third-party, fourth-
party, etc. complaint, or a complaint-in-intervention, if the total sum claimed, INCLUSIVE
OF INTERESTS, PENALTIES, SURCHARGES, DAMAGES OF WHATEVER KIND, AND
ATTORNEY’S FEES, LITIGATION EXPENSES AND COSTS and/or in cases involving
property, the FAIR MARKET value of the REAL property in litigation STATED IN THE
CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU
OF INTERNAL REVENUE, WHICHEVER IS HIGHER, OR IF THERE IS NONE, THE
STATED VALUE OF THE PROPERTY IN LITIGATION xxx
19 Annex “E” for Petitioner ALI; Id., at 83-92; Annex “H” for Petitioner AHE-HOA; Id., at

106-111; Annex “F” for Respondent Alvarado; Id., at 93-104.

20 Id., at 33.
21 Annex “J” for Petitioner Capitol; Id., at 121-125; Annex “K” for Petitioner Ali; Id., at 128-

136; Annex “I” for AHE-HOA; Id., at 112-120.

22 Annex “L”; Id., at 139-144.
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respondent Alvarado. AHE-HOA filed its Reply23 while ALI and

CAPITOL filed a Joint Reply.24 A Consolidated Rejoinder25 was filed
by Alvarado. A Sur-Rejoinder with Motion For Leave to File and
Admit Sur-Rejoinder26 was filed by AHE-HOA. On 4 April 2016,
the RTC denied petitioners' separate Motions for Reconsideration
and reiterated its previous ruling that the the subject matter of the
Complaint is a real action.

On the basis of the assailed Orders, petitioners paid the

additional filing fees but filed a Compliance Ad Cautelam stating
that its payment was made under protest.27

Aggrieved, petitioners filed the present Petition.

Issues

Petitioners' Statement of the Issues is reproduced as follows:

25. The issues being raised in the instant petition is

whether or not public respondent RTC acted with grave abuse
of discretion amounting to lack or excess of jurisdiction:

I.

IN DECLARING THE COMPLAINT AS A REAL ACTION.

II.
IN ORDERING THE PETITIONERS TO PAY ADDITIONAL
DOCKET FEES.28

23 Annex “M”; Id., at 145-154.

24 Annex “N”; Id., at 155-159.
25 Annex “O”; Id., at 160-162.
26 Annex “P”; Id., at 163-168.
27 Id., at 9.
28 Ibid.
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The Court's Ruling

The instant Petition failed to persuade.

It cannot be overemphasized that the rule on the payment of

the docket and other legal fees is both mandatory and
jurisdictional.29 Thus, pertinent to the present controversy are the
provisions of Rule 141 of the Rules of Court, prescribing rates of
docket fees, as amended by Administrative Matter (A.M.) No. 04-
2-04-SC30 and Supreme Court Amended Administrative Circular
No. 35-2004.31

According to petitioners, the subject matter of the case is

incapable of pecuniary estimation, thus, the docket fees should be
based on the fixed rate as set forth for actions incapable of
pecuniary estimation which is pegged at Php400.00. 32 On the
other hand, respondents opine that the present action is a real
action and as such, the docket fees should be based on the fair
market value of the real property subject of litigation as stated in
the current tax declaration or current zonal valuation of the
Bureau of Internal Revenue, whichever is higher or if there is
none the stated value of the property in litigation. 33 Hence,
whether petitioners paid the correct amount of docket fees is
dependent on the determination of the true nature of the
Complaint filed, (whether it is a real action or one incapable of
pecuniary estimation). A real action is defined by jurisprudence,
29 Nuyda v. Court of Appeals, G.R. No. 213861, 13 October 2014.
30 Re: Revised Upgrading Schedule of the Legal Fees in the Supreme Court and the Lower
Courts under Rule 141 of the Rules of Court; En Banc Resolution dated 20 November
2012.
31 Guidelines in the Allocation of the Legal Fees collected under Rule 141 of the Rules of
Court, as amended, between the Special Allowance for the Judiciary Fund and Judiciary
Development Fund, 12 August 2004.
32 Id., at 245.
33 Id., at 213-214.
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as “one in which the plaintiff seeks the recovery of real property;

or, as indicated in what is now Section 1, Rule 4 of the Rules of
Court, a real action is an action affecting title to or recovery of
possession of real property”.34

On the other hand, case law35 enumerates some examples of

civil actions incapable of pecuniary estimation, as follows:

1. Actions for specific performance;

2. Actions for support which will require the

determination of the civil status;

3. The right to support of the plaintiff;

4. Those for the annulment of decisions of lower courts;

5. Those for the rescission or reformation of contracts.

Corollary thereto, is the dictum that the nature of an action

is determined by the allegations in the body of the pleading. 36
This rule finds greater significance in light of the pronouncement
of the Supreme Court in the seminal case of Singsong v. Isabela
Sawmill,37 establishing the standard in the determination of
whether the subject matter of an action is incapable of pecuniary
estimation, by adopting the criterion of first ascertaining the
nature of the principal action or remedy sought, to wit:

In determining whether an action is one the subject

matter of which is not capable of pecuniary estimation this
Court has adopted the criterion of first ascertaining the nature
of the principal action or remedy sought. If it is primarily for
34 Gochan v. Gochan, G.R. No. 146089, 13 December 2001, 423 Phil. 491-508 citing Hernandez
v. Rural Bank of Lucena Inc., G.R. No. L-29791, 10 January 1978, 171 Phil. 70-86.
35 Heirs of Bautista v. Lindo, G.R. No. 208232, 10 March 2014.
36 Philippine First Insurance Co., Inc. v. Pyramid Logistics and Trucking Corp., G.R. No. 165147,
9 July 2008, 579 Phil. 679-693.
37 G.R. No. L-27343, 28 February 1979, 177 Phil. 575-595.
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the recovery of a sum of money, the claim is considered capable

of pecuniary estimation, and whether jurisdiction is in the
municipal courts or in the courts of first instance would depend
on the amount of the claim. However, where the basic issue is
something other than the right to recover a sum of money,
where the money claim is purely incidental to, or a
consequence of, the principal relief sought, this Court has
considered such actions as cases where the subject of the
litigation may not be estimated in terms of money, and are
cognizable exclusively by courts of first instance (now Regional
Trial Courts).|

Russell v. Vestil38 is one of the cases which applied the

foregoing test. The Supreme Court in the said case, held that the
action to annul the document entitled Declaration of Heirs and
Deed of Confirmation of Previous Oral Partition is one incapable
of pecuniary estimation, the resulting annulment of title and
partition of the property were merely incidental to the said case,
thus:

The main purpose of petitioners in filing the complaint is

to declare null and void the document in which private
respondents declared themselves as the only heirs of the late
spouses Casimero Tautho and Cesaria Tautho and divided his
property among themselves to the exclusion of petitioners who
also claim to be legal heirs and entitled to the property. While
the complaint also prays for the partition of the property, this is
just incidental to the main action, which is the declaration of
nullity of the document above-described. It is axiomatic that
jurisdiction over the subject matter of a case is conferred by law
and is determined by the allegations in the complaint and the
character of the relief sought, irrespective of whether the
plaintiff is entitled to all or some of the claims asserted therein.

At first blush, there appears to be precariousness in

jurisprudence on the matter of whether a particular action is a real
action or one incapable of pecuniary estimation. Case in point is
an action for annulment of sale of real property. The cases of
38 G.R. No. 119347, 17 March 1999, 346 Phil. 392-402.
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Spouses De Leon v. Court of Appeals39 and Serrano v. Delica.40 which

are similar to the present controversy illustrate the apparent
contradiction in jurisprudence. The case of Spouses De Leon v.
Court of Appeals emanated from an action for annulment or
rescission of a contract of sale of real property where the Supreme
Court ruled that it is incapable of pecuniary estimation and thus,
the docket fee to be paid should be the flat rate prescribed by Rule
141 of the Rules of Court. The Supreme Court held that:

Thus, although eventually the result may be the recovery

of land, it is the nature of the action as one for rescission of
contract which is controlling. The Court of Appeals correctly
applied these cases to the present one. As it said:

We would like to add the observations that since the

action of petitioners [private respondents] against private
respondents [petitioner] is solely for annulment or rescission
which is not susceptible of pecuniary estimation, the action
should not be confused and equated with the "value of the
property" subject of the transaction; that by the very nature of
the case, the allegations, and specific prayer in the complaint,
sans any prayer for recovery of money and/or value of the
transaction, or for actual or compensatory damages, the
assessment and collection of the legal fees should not be
intertwined with the merits of the case and/or what may be its
end result; and that to sustain private respondents'
[petitioners'] position on what the respondent court may decide
after all, then the assessment should be deferred and finally
assessed only after the court had finally decided the case,
which cannot be done because the rules requires that filing fees
should be based on what is alleged and prayed for in the face
of the complaint and paid upon the filing of the complaint.

On the other hand, in the case of Serrano v. Delica, the

Supreme Court declared respondents' Complaint for cancellation
of Deeds of Sale, Transfer Certificate of Title, Joint Venture
Agreement and damages with prayer for the issuance of a writ of
39 G.R. No. 104796, 6 March 1998, 350 Phil. 535-543.
40 G.R. No. 136325, 503 Phil. 71-78.
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preliminary injunction and temporary restraining order, as a real

action. The Supreme Court reasoned out in this wise:

A careful examination of respondents' complaint is that

it is a real action. In Paderanga vs. Buissan, we held that in a real
action, the plaintiff seeks the recovery of real property, or, as
stated in Section 2(a), Rule 4 of the Revised Rules of Court, a
real action is one affecting title to real property or for the
recovery of possession of, or for partition or condemnation of,
or foreclosure of a mortgage on a real property.

Obviously, respondents complaint is a real action

involving not only the recovery of real properties, but likewise
the cancellation of the titles thereto. (Emphasis in the original)

The ostensible conflict between these cases was clarified by

the Supreme Court in the case of Ruby Shelter Builders and Realty
Development Corporation v. Formaran III,41 to wit:

The Court, however, does not perceive a contradiction

between Serrano and the Spouses De Leon. The Court calls
attention to the following statement in Spouses De Leon: "A
review of the jurisprudence of this Court indicates that in
determining whether an action is one the subject matter of
which is not capable of pecuniary estimation, this Court has
adopted the criterion of first ascertaining the nature of the
principal action or remedy sought". Necessarily, the
determination must be done on a case-to-case basis,
depending on the facts and circumstances of each. What
petitioner conveniently ignores is that in Spouses De Leon, the
action therein that private respondents instituted before the
RTC was "solely for annulment or rescission" of the contract of
sale over a real property. There appeared to be no transfer of
title or possession to the adverse party. (Emphasis supplied) ||

In the more recent case of Home Guaranty Corp. v. R-II

Builders Inc., the seeming contradiction in jurisprudence was
adequately addressed by the Supreme Court:
41 G.R. No. 175914, 10 February 2009, 598 Phil. 105-131.
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Although an action for resolution and/or the

nullification of a contract, like an action for specific
performance, fall squarely into the category of actions where
the subject matter is considered incapable of pecuniary
estimation, we find that the causes of action for resolution
and/or nullification of the DAC was erroneously isolated by
the CA from the other causes of action alleged in R-II Builders'
original complaint and Amended and Supplemental
Complaint which prayed for the conveyance and/or transfer of
possession of the Asset Pool. In Gochan v. Gochan, this Court
held that an action for specific performance would still be
considered a real action where it seeks the conveyance or
transfer of real property, or ultimately, the execution of deeds
of conveyance of real property. More to the point is the case
of Ruby Shelter Builders and Realty Development Corporation v.
Hon. Pablo C. Formaran III where, despite the annulment of
contracts sought in the complaint, this Court upheld the
directive to pay additional docket fees corresponding to a real
action in the following wise, to wit:

x x x [I]n Siapno v. Manalo, the Court disregarded

the title/denomination of therein plaintiff
Manalo's amended petition as one for
Mandamuswith Revocation of Title and Damages;
and adjudged the same to be a real action, the
filing fees for which should have been computed
based on the assessed value of the subject
property or, if there was none, the estimated
value thereof. The Court expounded in Siapno
that:

In his amended petition, respondent Manalo

prayed that NTA's sale of the property in
dispute to Standford East Realty Corporation
and the title issued to the latter on the basis
thereof, be declared null and void. In a very real
sense, albeit the amended petition is styled as one
for "Mandamus with Revocation of Title and
Damages", it is, at bottom, a suit to recover from
Standford the realty in question and to vest
in respondent the ownership and possession
thereof. In short, the amended petition is in
reality an action in res or a real action. Our
pronouncement in Fortune Motors (Phils.), Inc. vs.
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Court of Appeals is instructive. There, we said:

A prayer for annulment or rescission of contract

does not operate to efface the true objectives
and nature of the action which is to recover real
property. (Inton, et al., v. Quintan,81 Phil. 97,
1948)

An action to annul a real estate mortgage

foreclosure sale is no different from an action
to annul a private sale of real property. (Muñoz
v. Llamas, 87 Phil. 737, 1950).

While it is true that petitioner does not directly

seek the recovery of title or possession of the
property in question,his action for annulment of
sale and his claim for damages are closely
intertwined with the issue of ownership of
the building which, under the law, is considered
immovable property, the recovery of which is
petitioner's primary objective. The prevalent
doctrine is that an action for the annulment or
rescission of a sale of real property does not
operate to efface the fundamental and prime
objective and nature of the case, which is to
recover said real property. It is a real action

Obtained from the foregoing, the material allegations of the

complaint and the relief prayed for, which are illustrative of the
primary purpose of an action are paramount to the
determination of whether an action is real or one incapable of
pecuniary estimation.

Upon scrutiny of petitioners' Complaint, it appears that the

action for the nullification of tax sale is intimately related to the
recovery of title of the subject property, thus, it is a real action but
one incapable of pecuniary estimation. The Supreme Court had
the occasion to define an action involving title to real property in
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the case of Heirs of Sebe v. Heirs of Sevilla,42 where it was explained

that:

An action "involving title to real property" means that

the plaintiff's cause of action is based on a claim that he owns
such property or that he has the legal rights to have exclusive
control, possession, enjoyment, or disposition of the same. Title
is the "legal link between (1) a person who owns property
and (2) the property itself".

"Title" is different from a "certificate of title" which is the

document of ownership under the Torrens system of
registration issued by the government through the Register of
Deeds. While title is the claim, right or interest in real
property, a certificate of title is the evidence of such claim.

Another way of looking at it is that, while "title" gives

the owner the right to demand or be issued a "certificate of
title", the holder of a certificate of title does not necessarily
possess valid title to the real property. The issuance of a
certificate of title does not give the owner any better title than
what he actually has in law. Thus, a plaintiff's action for
cancellation or nullification of a certificate of title may only be a
necessary consequence of the defendant's lack of title to real
property. Further, although the certificate of title may have
been lost, burned, or destroyed and later on reconstituted, title
subsists and remains unaffected unless it is transferred or
conveyed to another or subjected to a lien or encumbrance.
(Emphasis supplied)

Petitioners in their Complaint made the following

allegations:

21] The removal of Hole No. 5 from the golf course of Capitol
Golf and Country Club will be a dismemberment of the golf
course and would render the latter as a dysfunctional if not a
worthless golf course: it would be incomplete, no natural access
to Hole No. 6, and the right of way towards the other holes of
the “front 9” would also be lost.

22] The individual plaintiffs as corporate members have a right

to protect corporate property, such as Hole No. 5 which is
42 G.R. No. 174497, 12 October 2009, 618 Phil. 395-409.
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registered under the name of Capitol Hills Golf & Country

Club, Inc. which property has a zonal valuation of
P249,568.000.00; thru a fraudulent scheme perpetrated by
certain personalities there was a deliberate intention to deprive
the individual members and stakeholders of their right therein.

xx xx

26] The residents of Ayala Hillside Estate will lose their right of
way over a portion of Mactan Road that is part of TCT No. N-
253850. Mactan Road is their principal or direct access to the
main road in Tandang Sora/Katipunan Avenue. Worst, some
residents of Ayala Hillside Estate located in the Pinnacle area of
the subdivision and the “fairway lot” owners therein will have
no access at all to the main road and are practically landlocked
inside since the access road is covered in and part of TCT No.
N-253850.

xx xx

33] TCT No. N-253850 was a consolidation of portions of TCT

No. 338515 and TCT No. 338516 that was made subsequent to
the afore-mentioned Deed of Conveyance over the access
roads. This process of title consolidation is NOT a legal mode
of acquiring ownership over the already assigned access roads
to ALI. In other words, TCT NO. N-253850 did not confer
ownership over the already disposed access roads; CAPITOL
was not the real owner of the access roads. Defendant
Alvarado could not have acquired ownership over said access
roads by virtue of the tax sale. The principle of caveat emptor
applies. (Emphasis supplied; citation omitted).43

Also, in their prayer, petitioners pleaded:

1] To declare the Notice of Levy, Public Auction, Certificate of

Sale and Final Bill of Sale pertaining to TCT No. N-253850 as
Null and Void and of no force and effect;

2] To order the release to the plaintiffs with interest the

necessary bond posted by the plaintiffs in the case at bar; and

Plaintiffs further pray for such other reliefs and remedies

43 Rollo, p. 38, 39 & 41.

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deemed just and equitable under the premises.44

Although petitioner's Complaint does not unequivocally seek

the recovery of title to or possession of the subject property, it is
clear from the allegations of said Complaint that the annulment of
the tax sale is inseparable from the issue of ownership and title of
the subject property, which is beyond quibble, a real property.
Petitioners' ultimate objective of recovering possession and
ownership over the subject property is bolstered in light of the
provision in the Final Bill of Sale in favor of respondent Alvarado
which is sought to be annulled, which states:

WHEREAS, the owner of the delinquent real property

or person having legal interest therein or his representative
has wholly failed, within the period of one (1) year from the
date of sale to redeem the property sold by paying to this
Office the total amount of taxes, and penalties due up to the
date of redemption, the costs of sale and the interests at the rate
of two percent (2%) per month on the purchase price, thereby
allowing the sale to become absolute.45 (Emphasis supplied)

The provision of Section 33, Rule 39 of the Rules of Court is

explicit on the effect of the expiration of the right of redemption:

Section 33. Deed and possession to be given at expiration of

redemption period; by whom executed or given. — If no redemption
be made within one (1) year from the date of the registration of
the certificate of sale, the purchaser is entitled to a conveyance
and possession of the property; or, if so redeemed whenever
sixty (60) days have elapsed and no other redemption has been
made, and notice thereof given, and the time for redemption
has expired, the last redemptioner is entitled to the conveyance
and possession; but in all cases the judgment obligor shall have
the entire period of one (1) year from the date of the
registration of the sale to redeem the property. The deed shall
be executed by the officer making the sale or by his successor in
44 Id., at 46-47.
45 Id., at 68.
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office, and in the latter case shall have the same validity as
though the officer making the sale had continued in office and
executed it.

Upon the expiration of the right of redemption, the

purchaser or redemptioner shall be substituted to and acquire
all the rights, title, interest and claim of the judgment obligor
to the property as of the time of the levy. The possession of the
property shall be given to the purchaser or last redemptioner
by the same officer unless a third party is actually holding the
property adversely to the judgment obligor. (Emphasis and
underscoring supplied)

While this Court is not to pass upon the merits of the

allegations in petitioners' Complaint, it cannot be gainsaid that the
resolution of the case before the RTC is inextricably intertwined to
the issue of title and ownership of the subject property, hence, a
real action.

Taking the foregoing into consideration, it cannot be said

that the RTC gravely abused its discretion, for the assailed Orders
are in accord with the laws and jurisprudence. Section 1, Rule 65
of the Rules of Court pertinently provides that:

Section 1. Petition for certiorari. — When any tribunal,

board or officer exercising judicial or quasi-judicial functions
has acted without or in excess its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings
of such tribunal, board or officer, and granting such incidental
reliefs as law and justice may require.

Significantly, grave abuse of discretion finds its definition in

jurisprudence, hence:
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By grave abuse of discretion is meant such

capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. Mere abuse of
discretion is not enough. It must be grave abuse of
discretion as when the power is exercised in an
arbitrary or despotic manner by reason of passion or
personal hostility, and must be so patent and so gross
as to amount to an evasion of a positive duty or to a
virtual refusal to perform the duty enjoined or to act at
all in contemplation of law. Failure on the part of the
petitioner to show grave abuse of discretion will result
in the dismissal of the petition. 46

Petitioners failed to substantiate their assertion that the RTC

misapprehended facts and misapplied the laws. The RTC has
acted well within its discretion in issuing the assailed Orders. For
the failure of petitioners to show that the assailed Orders were
issued with grave abuse of discretion, the present petition must
fall. Consequently, petitioners are not entitled to injunctive relief
whether provisional or permanent.

Finally, the Court notes that except for paragraph 2 in the

prayer of the Complaint which mentions the posting of a “bond”,
petitioners' compliance with the provision of Section 267 of
Republic Act 7160, known as the Local Government Code of 1991
is not apparent from the record made available to the Court.
Section 267 provides:

Section 267. Action Assailing Validity of Tax Sale.- No

court shall entertain any action assailing the validity or any
sale at public auction of real property or rights therein under
this Title until the taxpayer shall have deposited with the
court the amount for which the real property was sold,
together with interest of two percent (2%) per month from the
date of sale to the time of the institution of the action. The
amount so deposited shall be paid to the purchaser at the
auction sale if the deed is declared invalid but it shall be
46 Ong v. Ciba Geigy (Phils.), Inc., G.R. No. 149200, 14 July 2006, 527 Phil. 425-430.
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returned to the depositor if the action fails.

Neither shall any court declare a sale at public auction

invalid by reason or 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. (Emphasis supplied)

In the case of National Housing Authority v. Iloilo City, 47 the

Supreme Court held that:

As is apparent from a reading of the foregoing

provision, a deposit equivalent to the amount of the sale at
public auction plus two percent (2%) interest per month from
the date of the sale to the time the court action is instituted is a
conditional prerequisite, to borrow the term used by the
acknowledged father of the Local Government Code which
must be satisfied before the court can entertain any action
assailing the validity of the public auction sale. The law, in
plain and unequivocal language, prevents the court from
entertaining a suit unless a deposit is made. This is evident
from the use of the word shall in the first sentence of Section
267. Otherwise stated, the deposit is a jurisdictional
requirement the nonpayment of which warrants the failure of
the action.

The deposit requirement, to be sure, is not a tax measure.

As expressed in Section 267 itself, the amount deposited shall
be paid to the purchaser at the auction sale if the deed is
declared invalid; otherwise, it shall be returned to the
depositor. The deposit, equivalent to the value for which the
real property was sold plus interest, is essentially meant to
reimburse the purchaser of the amount he had paid at the
auction sale should the court declare the sale invalid.

Clearly, the deposit precondition is an ingenious legal

device to guarantee the satisfaction of the tax delinquency, with
the local government unit keeping the payment on the bid price
no matter the final outcome of the suit to nullify the tax sale

The Supreme Court in the case of Gamilla v. Burgundy Realty

47 G.R. No. 172267, 20 August 2008, 584 Phil. 604-612.
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Corp.,48 made a disquisition on the requirement prescribed by

Section 267 of the Local Government as well as the consequence
for its non-observance, as follows:

On the first issue, the CA erred in taking cognizance of

the case. Section 267 of R.A. No. 7160 explicitly provides that a
court shall not entertain any action assailing the validity or sale
at public auction of real property unless the taxpayer deposits
with the court the amount for which the real property was sold,
together with interest of two percent (2%) per month from the
date of sale to the time of the institution of the action. This
condition is a jurisdictional requirement, the nonpayment of
which warrants the dismissal of the action. Considering that
BRC did not make such deposit, the RTC should not have acted
on the opposition of BRC.

Thus, it is incumbent upon the RTC to ascertain petitioners'

compliance with the requirement set forth under Section 267 of
R.A. No. 7160 as the non-observance of which renders the
complaint dismissible.

WHEREFORE, the Petition for Certiorari is DENIED for lack

of merit including the application for the issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction.

SO ORDERED.

RAFAEL ANTONIO M. SANTOS

Associate Justice

48 G.R. No. 212246, 22 June 2015.

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WE CONCUR:

APOLINARIO D. BRUSELAS, JR. SOCORRO B. INTING

Associate Justice Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is

hereby certified that the conclusions in the above decision were
reached in consultation before the opinion of the Court was
written.

APOLINARIO D. BRUSELAS, JR.

Associate Justice
Chairman, Twelfth Division

/MBP