[SEAL. ] (Sgd.) "ROMAN ROQUE,
"Provincial Secretary"
Sometime later, George A. Webster transferred his right and interest in the land to J. C. Webster. Although some testimony was introduced, White & Webster relied absolutely upon the deed of sale above quoted, to obtain registration of the land. The judgment of the trial court, however, dismissed all the oppositions, and declared the tract to be public land.
On appeal, the contention of White & Webster is, that when the Government sold the land to them "free from all liens of any kind whatsoever," there being no allegation of fraud or irregularities, they received an absolute title in fee simple. The contention of the Government, on the other hand, is, that the only title conveyed to White Webster was the interest or right which the person said to be the owner might have had in the premises.
A resolution of these rival arguments is not entirely free from perplexities. Nor is it exactly clear, whatever be our ruling, that injustice will not be done. One cannot but sympathize with White & Webster who purchased the land regularly and lawfully, who then went upon it and made improvements, and who have faithfully paid the Government the corresponding taxes. Similarly, one can also understand the precarious situation of some two hundred individuals who live upon the land and who have obtained concessions from the Government by purchase, lease, or homestead.
After considerable research and study, certain controlling principles have been agreed upon as follows:chanrob1es virtual 1aw library
There are two distinct doctrines on the subject of what passes by the sale of property for back taxes. In many states where the tax is a charge on the land alone, where no resort in any event is contemplated against the owner or his personal estate, and where the proceeding is strictly in rem, the title conveyed by a sale for nonpayment of taxes is not merely the title of the person who had been assessed for the taxes and had neglected to pay them, but a new and paramount title to the land in fee simple absolute, created by an independent grant from the sovereign, and free from all equities and incumbrances existing prior to the sale upon the title of the previous owner. According to this view, the tax title is a breaking up of all titles, and operates not to support, but to destroy them. It is a new and perfect title emanating from the State, and not merely the sum of old titles. The second doctrine prevailing in other jurisdictions where the proceedings for the collection of taxes upon real estate are looked upon as in personam, is that the purchaser at the tax sale gets no better title than was held by the person assessed. According to this view, where the law requires the land to be listed in the name of the owner, provides for a personal demand for the tax, and, in case of default, authorizes the seizure of the personal property of the delinquent in satisfaction of the tax, and permits a sale of the land only when all other remedies have been exhausted, the title is a derivative one, and the purchaser acquires only the apparent interest, whatever it is, of the tax delinquent. (See generally 2 Cooley on Taxation, 3d ed., pp. 960-962; 26 R. C. L., pp. 401~04; 33 L. R. A., 689, notes; Turner v. Smith [18713, 14 Wall., 553.)
Another subsidiary theory, here applicable on the supposition that Diaz, the delinquent taxpayer, had demonstrated no title to the land and that consequently, it was in the nature of public land, is, that while the title remains in the Government, public lands are not subject to taxation, and tax sales and tax deeds thereof are void. The purchaser of any such lands for delinquency in the payment of the taxes charged thereon, derives no title or right of any sort to the land so purchased. (Hussman v. Durham [1896], 165 U. S., 144; Braxton v. Rich [1891], 47 Fed., 178.) A case of this nature, remarkably similar in its antecedents and facts to the one before us, is that of Hall v. Dowling ([1861], 18 Cal., 619). The action was for ejectment, to recover possession of a certain island called Hierba Buena in the Bay of San Francisco. Plaintiff claimed title, first, by prior possession in one Spear and King her predecessors; second, by virtue of a tax deed, and third, by prescription under the laws of Mexico. Plaintiff introduced in evidence at the trial a tax deed executed by the tax collector of the city and county of San Francisco for the entire island called Hierba Buena formerly Goat Island, situated in the Bay of San Francisco. The very trite decision of the Supreme Court of California on these facts was that "We cannot see that the plaintiff makes out title through the tax deed; for this seems to have been public land of the United States, and therefore could not be sold for taxes."cralaw virtua1aw library
The exact phraseology of the particular statute would seem to determine the doctrine applicable in each jurisdiction. The Philippine law on the subject of taxation, when this tax sale occurred, was found in the Municipal Code, Act No. 82 (secs. 74-83), as amended by Act No. 1139. According to these provisions, in case of default in the payment of land taxes, the personal property of the delinquent was first seized. Taxes and penalties were thereafter enforcible against the realty and, if necessary, it could be Id to satisfy the public taxes assessed against it. In case the taxpayer did not redeem the land sold within one year from the date of the sale, the provincial treasurer, as grantor, executed a deed conveying the land to the purchaser free from all liens of any kind whatsoever.
It is thus seen that there was no provision in the local law, such as is found in Iowa and other states, vesting in the purchaser "all the title of the former owner as well as of the State and County." (See Hefner v. Northwestern Mut. L. Ins. Co. [1887], 123 U. S., 747.) It is further seen that proceedings in the Philippines for the sale of land for the nonpayment of taxes were in personam. (Valencia v. Jimenez and Fuster [1908], 11 Phil., 492.) The tax was not a charge upon the land alone. The authorities were first required to hunt up the owner and to make the tax out of his personal property. Only the particular interest or title of the person to whom the land is assessed was sold. As a stream cannot rise higher than its source, so the purchaser could not claim any better title than his predecessor.
The case at bar is not like that of Denoga v. Insular Government ([1911], 19 Phil., 261), for there neither the Government nor any one else appeared to impugn the applicant’s title.
Some of the apparent harshness of our holding will be removed when the words of Mr. Justice Brewer in Hussman v. Durham, supra, are recalled, namely, "It is a familiar law that a purchaser of a tax title takes all the chances. There is no warranty on the part of the State."cralaw virtua1aw library
It would be only just to give the claimants another opportunity to prove their title. There is an allegation in their answer that before acquiring possession of the tract, their predecessors in interest had been in possession thereof for sixty years at the very least. If White & Webster can show occupation of the six hundred hectares of land for ten years previous to July 26, 1904, they can establish their title. If they fail in such effort, it would further be only just for the Government, which once through one of its regularly appointed officers transferred the property to the claimants and, thereafter, accepted the payments of taxes from them, only now to assail the effect of its own acts, to reimburse the claimants for the amount paid by them for the land and for taxes.
It results that the judgment must be affirmed, without prejudice to the right of Curtis W. White and J. C. Webster within a reasonable period, which we fix at one year, to present further evidence in the Court of First Instance of Nueva Ecija to establish their title to the tract of land formerly in the possession of Gervasio Diaz and, whose title, whatever it may be, was transferred to them, with costs against the appellants. So ordered.
Mapa, C.J., Araullo, Avanceña and Villamor, JJ., concur.
Johnson, J., dissents.