(Continued from Wednesday)
As a result of the forcible takeover by the Quezon City government, gestapo style, of the 7-hectare lot on Quezon Avenue granted by law under usufruct to the Manila Seedling Bank Foundation (MSBF), Mayor Herbert Bautista, City Administrator Victor Endriga and six other city officials, as well as Chito M. Cruz, general manager of the National Housing Authority (NHA), are now facing criminal and administrative charges for violation of the Anti-Graft and Corrupt Practices Act, of the Code of Conduct and Ethical Standards for Public Officials and Employees, and of the New Civil Code.
MSBF filed the charges with the Office of the Ombudsman; the case’s temporary assigned number is IC-OC-12-0172. The others charged are Quezon City Treasurer Edgar T. Villanueva, Real Estate Division chief Jesson G. Labao, the police chief, Supt. Mario de la Vega, retired general Elmo San Diego, head of the Department of Public Order and Safety or DPOS, Roger Cuaresma, M.J. Cameran, and other members of the DPOS.
You will remember that before the opening of office hours on July 10, 2012, DPOS personnel, escorted by some 100 officers of the Quezon City Police District under De la Vega, swooped down on the MSBF gardens, padlocked all the gates, deployed themselves all over the premises, and prevented the entry and exit of all vehicles. They were all acting under the direct orders of Mayor Bautista.
In a letter to MSBF, the mayor said the city government is now the owner of the 7-hectare property by virtue of its auction sale for its failure to pay P59,365,189 in delinquent real estate taxes and to redeem the property on July 7, 2012, or one year after the auction sale, and demanded that MSBF vacate the premises.
In its reply, MSBF said there is nothing in the laws that “authorizes the City or any of its officials to forcibly take over the Foundation’s premises by padlocking its gates … and deploying a contingent of DPOS.”
Background: When City Hall first attempted to collect real estate taxes from MSBF, the latter went to court invoking Presidential Decree 1197 exempting it from all taxes. The Regional Trial Court issued a decision on Oct. 6, 2009, (1) nullifying the sale at public auction of the lot because the city government did not make any prior assessment on MSBF for the realty taxes in question; and (2) declaring that the Local Government Code of 1991 (LGC) repealed PD 1197 which exempted MSBF from taxes. MSBF appealed the tax exemption issue to the Supreme Court.
The high court upheld the RTC decision, meaning MSBF no longer was tax-exempt from 1992 when the LGC took effect but was tax-exempt before that, but that the auction sale was nullified because City Hall did not make any prior assessment on MSBF as required by due process.
The City Hall mouthpiece, therefore, was confusing the public when he said that the Supreme Court had upheld the takeover. The truth is that the high court only upheld the collection of taxes due after 1992. He omitted the fact that the high court also upheld the nullification of the auction sale. Therefore, the city government is not the owner of the property and has no right to padlock the premises and grab control of the gardens and force the tenant-gardeners to pay rent to City Hall and not to MSBF.
Until now, however, City Hall is still unlawfully occupying the premises, with guards posted at the gates. With these unlawful actions, the MSBF complaint said, City Hall has inflicted damage and loss of income to MSBF, to its operations, and that of its tenants.
MSBF charged that the defendants violated the Anti-Graft and Corrupt Practices Act and the New Civil Code, to wit:
“Sec. 3. Corrupt practices of public officers…
“Causing any undue injury to any party, including the Government, xx xx, in the discharge of his official xx xx xx functions, through manifest partiality, evident bad faith, or gross inexcusable negligence.”
Although Mayor Bautista said in his demand letter that if MSBF does not vacate the premises, the city government “shall be constrained to avail [itself] of all legal remedies allowed pursuant to law to vest upon the Quezon City government possession and ownership thereof,” it did no such thing. City Hall’s only legal remedy was to institute in court the appropriate legal actions to oust MSBF from the area and obtain a court decision. Instead, it swooped down on the property without any court order and forcibly and unlawfully took over the property. This also violates the constitutional provision against deprivation of property without due process.
Furthermore, even assuming, without granting, that the city government has become the owner of the 7-hectare area, such change of ownership does not terminate MSBF’s usufruct over, and its right to continue possession of, the property because change of ownership does not extinguish the usufruct.
Usufruct is different from lease in that a usufruct is granted by law (in this case by Proclamation 1670) and the beneficiary does not pay rent, while lease is a mere agreement between the owner and lessee who pays rent. A lease agreement can be terminated by mutual consent of the owner and lessee, but a usufruct cannot be terminated by the owner unless the area is abandoned by the beneficiary.
As for the city treasurer, his crime is unlawfully forcing the collection of realty taxes from MSBF. According to the New Civil Code “the taxes which, during the usufruct, may be imposed directly on the capital, shall be at the expense of the owner.” Therefore, the taxes due on the property are the liability of the owner, in this case the NHA.