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‘Bistek’ continues to mislead public on land-grabbing

opinion / Columnists
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As I See It

‘Bistek’ continues to mislead public on land-grabbing

/ 02:07 AM July 13, 2015

THE QUEZON City government under Mayor Herbert Bautista continues to mislead the public in its attempt to justify the illegal grabbing of a 7-hectare lot on Quezon Avenue. The lot is owned by the National Housing Authority (NHA) but its usufruct has been delegated to the Manila Seedling Bank Foundation (MSBF).

Reacting to my column of June 12, 2015, Regina A. Samson, assistant secretary to Mayor Bautista and chief of the Communications Coordination Center, in a letter to the editor (“Records show facts, seedling bank tax liability,” 7/6/15), cites a certification of the Securities and Exchange Commission (SEC), a decision of the Quezon City regional trial court and a Supreme Court resolution, all purporting to show that the land-grab was legal. All misleading.

I do not blame Samson for the attempt to mislead the public. After all, she must have been ordered by her boss to write the letter containing the misleading legal justifications, most likely fed her by the legal department (also on orders of the mayor). But I refute those justifications one by one:

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  1. On the SEC certification that MSBF’s certificate of registration had been revoked. The SEC itself does not consider the revocation as having become final. In fact, in the SEC letter of Jan. 3, 2014, MSBF was given until Dec. 31, 2015, to file a petition to lift the revocation of its certificate of registration. And on Feb. 4, 2015, the foundation did file a petition in the SEC where it is now awaiting resolution.
  1. On the RTC pronouncement that the MSBF is without corporate personality because of the alleged revocation of its certificate of registration. The RTC disregarded the SEC Jan. 3, 2014, order giving MSBF until Dec. 31, 2015, to file a petition to lift the revocation order. The SEC order clearly shows that the revocation order has not yet become final.
  • Samson herself does not deny that the SEC’s revocation order has not yet become final.
  • The RTC order of Dec. 22, 2014, which stated that MSBF has no corporate personality on account of the revocation of its certificate of registration, is on appeal and has not become final either.
  • The Quezon City government is estopped to deny the corporate personality of the foundation. The government has all the while recognized, treated and transacted with the foundation as a corporation. It tried to collect, albeit illegally, real estate taxes from it. It has actually collected from the foundation business permit fees for 2012, 2013, 2014, and in previous years. Besides, in the judicial actions between the foundation and the Quezon City government, the latter has consistently admitted the foundation’s juridical personality.
  • Corporate existence cannot be the subject of a collateral attack even as the foundation may be considered as a de facto corporation under Section 20 of the Corporation Code.
  • A corporate personality may be inquired into under Rule 66 of the Revised Rules of Court only by a direct action of quo warranto brought in the name of the Republic of the Philippines by the solicitor general.
  • No court has jurisdiction to question a corporation’s juridical personality. In Tongonan Holdings and Development Corp. vs Atty. Francisco Escaño Jr. (GR 190994, Sept. 7, 2011), the Supreme Court ruled that the original and exclusive jurisdiction to pass upon the juridical personality of a corporation belongs to the Securities and Exchange Commission and not to the courts.
  • The foundation has not been dissolved; much less is it in the stage of dissolution as Samson wants to make it appear in her letter. It is gross dishonesty for Samson to invoke in her letter Section 122 of the Corporation Code and Article 605 of the Civil Code when these provisions of law refer to a dissolved corporation.
  1. On the foundation’s liability for real estate taxes on the NHA’s 7-hectare property under its usufruct. Samson’s citation of the Supreme Court resolution in GR 191335, which in effect affirmed the repeal by the Local Government Code of 1991 of the foundation’s tax exemption under Presidential Decree No. 1197, is misleading. The revocation of PD 1197 is not an issue here and the foundation is not claiming tax exemption under the decree.

The foundation, as the usufructuary of NHA’s 7-hectare property, is exempt, under Article 597 of the Civil Code, from real property taxes on the capital (property under usufruct) during the usufruct; and if money had been advanced by the usufructuary, it shall recover from the landowner the amount at the termination of the usufruct. Because Samson cannot deny Article 697 of the Civil Code, she attempts to confound the issue by citing the repeal of PD 1197 by the Local Government Code of 1991.

The truth is that the NHA is exempt from real property taxes by virtue of the Urban Development and Housing Act of 1992 (Republic Act No. 7279), while the foundation, as usufructuary, is also exempt from real property taxes under Article 597 of the Civil Code. The attempt of Mayor Bautista to enforce real property taxes on the foundation by forfeiting the 7-hectare property of the NHA, over which the foundation enjoys usufruct, cannot be tolerated as it is a clear circumvention of the tax exemption the NHA enjoys over the property.

In fine, Samson’s attempt to justify the real property taxes she claims to be due from the foundation is just as false and misleading as Mayor Bautista’s letter to President Aquino, which shamelessly inveigled the latter into amending Proclamation No. 2670 to lend his seal of approval on Bautista’s indefensible land-grabbing of the property under usufruct.

 

(To be continued)

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