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As I See It

Now it’s squatting by rich businessmen

/ 08:24 PM November 08, 2012

THE SQUATTING problem is getting very bad and President Aquino, instead of traipsing all over the world spending the people’s money, should stay home and do his homework, particularly solving this problem. Because now, it is no longer just the small-time squatters and the squatting syndicates who are grabbing the properties of law-abiding and tax-paying citizens, but also rich businessmen. Worse, they are able to do it with the help (or connivance?) of the courts, which are supposed to do justice to all men. Chief Justice Maria Lourdes Sereno, please take notice of this case:

Machro Thrend Inc. is the legitimate owner of Gotesco Tower in Manila but it cannot take possession of the building because it is being occupied by Royal Overseers Inc. (Royal), a member of the Gotesco Group of Companies. A former tenant whose lease contract has expired, Royal no longer has any right to the property but it continues to collect rent from the other tenants yet does not pay a single peso to the building’s owner, Machro. And it is the latter that pays the real estate taxes for the property. All of these came about because of dubious orders from judges and justices in favor of Gotesco. (This is justice in the Philippines?) How did this paradox come about?

Gotesco Tower was mortgaged by its previous owner, Gotesco Investments, to the United Coconut Planters Bank (UCPB) as collateral for a loan. When Gotesco defaulted on the loan, UCPB foreclosed Gotesco Tower and consolidated its ownership over it.


After the foreclosure, Royal, represented by Jose Go and Vicente Go, entered into a lease contract with UCPB for the third floor up to the 10th floor of the building for a period of two years—Jan. 1, 2002, until Dec. 31, 2003—at the rate of Pl million a month. Jose Go subsequently managed to convince UCPB to also lease to him the first and second floors of the building.

Royal, however, defaulted on its monthly obligation, and its debts to UCPB reached a staggering P43 million in back rentals. Despite constant demands, Royal neither paid its debts nor returned possession of Gotesco Tower to UCPB.

When the lease contract expired, Royal maintained possession of the property and even continued collecting monthly rentals from the building’s tenants without paying a single peso to UCPB, prompting the bank to initiate ejection proceedings before the Makati Metropolitan Trial Court, which decided in favor of UCPB. Royal appealed to the Regional Trial Court, which affirmed the MTC decision, and the bank was able to take possession of the tower.

Royal, however, elevated the case to the Court of Appeals, and here the mystery begins. In June 2008, the appellate court overturned the RTC and MTC decisions on a technicality—the court summons was allegedly not properly served on Royal despite the fact that Royal participated in both MTC and RTC hearings.

Shocked? There’s more. When the case was appealed by the owners to the Supreme Court, the justices sustained the CA decision. It makes you wonder whether there is justice in the Philippines. How can the two highest tribunals allow an entity to regain possession of a property even if its contract of lease had already expired for five years before the issuance of those decisions? The decisions did not even state how much compensation and rental fee the property owner should get if the property is turned over to Royal.

In the course of the proceedings in the CA in 2008, UCPB sold the tower to Philippine Investments Two (PI Two), which, in November 2009, in turn sold the property to a new owner, Machro Thrend Inc.

On May 12, 2010, Machro received a Notice to Vacate the property in favor of Royal with an attached writ of execution from the Makati Sheriff although the property is located in Manila. The writ of execution was the result of the finality of the CA decision and a resolution denying the motion for reconsideration of UCPB which, later on, was sustained by the high court. But who is to vacate when the lease contract between Royal and UCPB has already long expired? Shouldn’t it be Royal, because its contract had expired way back in 2002?

Nonetheless, Jose Go and Royal have succeeded in occupying the building through an ex-parte motion appointing two Manila RTC sheriffs to implement the writ of execution.


These setbacks notwithstanding, the new owners opted to believe in our justice system by filing an ejection case against Royal before the Manila RTC, this time hoping that the supposed technical infirmity cited earlier by the CA had been cured. The MTC ruled in favor of the new owners and directed Royal to pay the back rentals and immediately return possession of the building to the new owners.

That victory turned out to be short-lived. On appeal, Manila RTC Judge Cicero Jurado reversed the MTC decision. Despite the insistence of Machro, Jurado stood pat on his decision without discussing the legal basis for Royal’s continued possession of the building in the absence of a law or contract.

Additional information: This is not the first time that Judge Jurado has ruled in favor of Go, known as the man who stopped the City of Caloocan from taking over his mall, Ever Gotesco Grand Central, due to nonpayment of real property taxes amounting to P722,321,368.55. It was also Judge Jurado who issued a writ of preliminary injunction preventing the City of Caloocan from taking over the mall.

On the same day that Go’s troops took over Gotesco Tower, they also took over the property of a certain Joey de Jesus in Marikina. That property was also previously owned by Jose Go.

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TAGS: column, gotesco tower, neal h. cruz, squatting
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