Saturday, September 15, 2012

The Unseen, Untold and Neglected True Story on NPC Land & Building, etc

The Unseen, Untold and Neglected True Story
on NPC Land & Building, etc

‘As I See It’ Wrong!

(NOTE: THIS IS BEING REPUBLISHED FOR ALL NATIONAL PRESS CLUB MEMBERS TO KNOW.  This was first published at NPC Digest of June 2010.)
 
The author plays a guitar inside NPC bldg.

 By BERTENI "TOTO" CATALUÑA CAUSING
 Author of the book entitled "Simplified Law on Libel in the Philippines"

            The untold and neglected true story about the land and building of National Press Club of the Philippines (NPC) symbolizes the lack of concern and neglect by its old members and senior officers against the backdrop of a murky river of ineptitude, starting with the first generation of journalists.

            This story is compelled by the series of five articles written by Inquirer columnist Neal Cruz, president of the Club in 1978 to 1980, hoping to make all members know the truth, particularly lifetime members, some of whom should take most of the blame for the quagmire NPC is in.

            Thus, it is assured that this is not intended to influence the courts and offices handling the cases related to the precious property of the Club, but merely to inform the members of the NPC and to balance the misimpressions caused in the public’s mind.

            At present, the documents of ownership over NPC property, Transfer Certificates of Title (TCT) No. 265235 and No. 265236, are in the name of the Government Service Insurance System (GSIS). 

TCT No. 265236 covers the NPC building and the land where it stands; while TCT No. 265235 covers the PLDT building and the land upon which it sits.

Despite these, Mr. Neal Cruz started on a wrong premise—that the NPC building and land belong to the GSIS, twice over—in all his column articles.

Mr. Neal Cruz also drew out incorrect conclusions, such as: (a) the decision to sell the mural is wrong; (b) only the NPC officers are being charged by the GSIS; (c) the NPC officers are hiding the name of the buyer of the mural; (d) the NPC officers pocketed the proceeds; and (e) blaming on Roy Mabasa administration all the imagined woes the NPC is in.

             
The beginning of the land & building

            These two sets of land and building belonged to what was once the single property of NPC registered under TCT No. 38690, given to it by the State through Republic Act No. 905.

            On December 29, 1953, then President Elpidio S. Quirino signed RA No. 905 into law, commanding the Chief Executive to donate to NPC that parcel of land located at the corner of Jones Bridge and Magallanes Drive in Intramuros, Manila.

            The law prohibited the Club from selling or transferring the property. It allowed NPC to mortgage the donated land but only for the exclusive purpose of constructing “a permanent building of its own.”  It also says that once the group ceases to need the land for whatever reason or NPC ceases to exist, the land shall revert to the national government.


The loans and encumbrances

            The first NPC officers entered into loan transactions for funds to construct the building.

The first loan was for P315,000.00 with Rehabilitation Finance Corporation (RFC), in an instrument dated July 19, 1955 and recorded on July 23, 1955.  RFC is what is now known as Development Bank of the Philippines (DBP).

The second loan was made with the same financial institution for P39,600.00 on January 5, 1956 and recorded on January 11 that year.  

The NPC president at the time of these transactions was Teodoro “Ka Doroy” Valencia.

The third loan for P100,000.00 was secured from Philippine National Bank on August 2, 1956, which deal was recorded at the back of TCT No. 38690 on August 23, 1956.

This third loan was cancelled on September 1, 1956 on an instrument dated August 31, 1956.

The explanation for the cancellation could be this: The loan with PNB did not push through because another loan, for P458,000.00, was had from the Government Service Insurance System (GSIS). This loan was executed on August 22, 1956 and recorded at the back of the Club’s title on September 1, 1956.   At any rate, this was the first of the doomed-to-fail loans with the state pension system.  The president of the Club during this time was Jose D. Aspiras.

On September 4, 1956, a 50-year lease of Philippine Long Distance Telephone Company was entered at the back of the NPC title, whereby the communications company built and operated a four-story building with the condition that when the lease terminates the structure shall belong to NPC. 

On November 3, 1956, it was recorded at the back of NPC title that the first loan-mortgage with RFC was cancelled, suggesting that it was paid off.

On January 24, 1958, the issuance of a new Owner’s Duplicate Copy of TCT No. 38690 was recorded.  Which means that the first owner’s copy got lost.

On January 24, 1958, inscribed at the back of the NPC title is a mortgage with the GSIS for the second loan, amounting to P1,442,000.00 payable in 10 years at the rate of 6% per annum.  This was the fifth time NPC borrowed money with the land as the collateral.  The NPC president this time was Francisco C. Depasupil.

On March 27, 1958, another mortgage-loan of P120,000.00 with the GSIS, dated October 30, 1957, was recorded at the back of the NPC title.  The NPC president during this time was Domingo C. Abadilla.

On May 19, 1960, still another loan with the GSIS for P300,000.00 dated May 13, 1960 was recorded at the back of the NPC title.  The Club president this time was Juan L. Perez.

On November 25, 1960, the encumbrance for a P120,000.00 loan with the GSIS was cancelled, meaning the NPC paid it up.  This turned out to be the last entry on loans ever made by the Club officers.   The president at this time was Ernesto O. Granada.

Despite the series of loans, the GSIS did not exercise the right of a lender to foreclose on the mortgages.

There was no foreclosure event that occurred as revealed by the records at the Registry of Deeds of Manila, contrary to the assertion of Mr. Neal Cruz.


The public auction for non-payment of real property tax


While NPC officers from 1960 onwards failed to pay these loans, another event compounded the problems of the Club regarding debts on the land and building.

The Manila City government attempted to collect real property taxes (ameliar) in the amounts of (a) P26,027.16, presumably for the lot, (b) P116,525.75, presumably for one of the two buildings, and (c) P142,210.23, presumably for another building.  There are two buildings standing on NPC lot: the NPC building and the adjacent PLDT building.

The NPC officers failed to pay these tax assessments, leading the City Treasurer’s Office to direct the conduct of public auctions.

During the three auctions, the GSIS showed up as the lone bidder because it wanted to preserve its financial interests over the property.

Nevertheless, the auction sales pushed through on April 14, 1975.  The Club president during this time was Primitivo Mijares.

On May 9, 1975, a certificate of sale dated April 16, 1975 was inscribed at the back of the NPC title, saying the GSIS bought a Club’s property for P26,027.16 in a public auction conducted on April 14, 1975 by the Manila City government for non-payment of realty property tax, commonly called “ameliar.”

On May 9, 1975, another certificate of sale dated April 16, 1975 was inscribed at the back of the same NPC title, saying the GSIS bought a Club’s property for P116,525.75 for non-payment of real property taxes.

On the same day, a third certificate of sale dated April 16, 1975 was inscribed saying the GSIS bought a Club’s property for P142,210.23 for non-payment of the same kind of taxes.

There is no available proof of reasons why there were three auction sales that were conducted, considering that the property of NPC was only one as evidenced by TCT No. 38690.  A plausible explanation could be that the property was classified into three parts: (a) the land as a whole; (b) the NPC Building; and (c) the PLDT Building.

Since the date of registration of the sales is May 9, 1975, it means that NPC had the chance to redeem the property until May 8, 1976 because the right of redemption under the law is one year.  And if the one who has the right to redeem cannot pay, the property automatically belongs to the winning bidder, which is the GSIS in this case; assuming the public auctions were valid.

            But the NPC failed to redeem and its president during this time was Tirso L. Rodriguez.


The advent of Letter of Instruction No. 500


            Faced with the insurmountable problem due to the failure to recover the property caused by the failure to avail of the one-year redemption right, the incumbents led by Club president Pat Gonzales ran to Marcos.

            The dictator, with all his might that included the power to make laws, signed Letter of Instructions No. 500 into law on January 18, 1977.

            This law was published in the March 21, 1977 issue of the Official Gazette.  It took effect 15 days thereafter under the Civil Code.

            The most important provision of LOI No. 500 is the command for the GSIS to donate, cede, transfer or convey to the NPC that part of its original land where the NPC building stands and gave the other part where the PLDT building stands in payment of all the financial obligations of the Club to the state social insurance system.

            The premise of this law is that it recognizes that the Club owed the GSIS a total of P1,281,696.73 and it should be paid because NPC must not be allowed to enrich itself at the expense of the GSIS.

As an equity solution, Marcos deemed it wise to give unto the GSIS the PLDT building and the land thereby as more than sufficient payment for all the financial exposures it had with the NPC property.  This PLDT portion of the property had an appraised valued of P2,272,000.00.


The failure to implement LOI No. 500


            The success of the presidency of Mr. Pat Gonzales in having Marcos sign the all-too-important LOI No. 500 was never followed up.

            When he faded, Mr. Neal Cruz entered as the president for 1978, 1979 and 1980.

            Mr. Cruz was the first president to have been confronted with the task of seeking the implementation of LOI No. 500.  But there is no evidence he ever lifted a finger.  The fact remains that the law remained a law.

            There is also no evidence that succeeding presidents thereafter, except for Mr. Fred Gabot and Mr. Louie Logarta, ever thought of seeking the implementation of LOI No. 500.

            Mr. Gabot conducted researches on the matter and he was able to dig up this law, LOI No. 500, and Republic Act No. 905.  His efforts were enough to start off.

            Mr. Logarta wrote President Arroyo on June 14, 2001, asking for the implementation of the law.  This led to his meeting with Presidential Legal Counsel Avelino J. Cruz, along with Mr. Gabot, Mandy Francisco and Lolit Acosta.

Presidential Management Staff (PMS) Chief Vicky Garchitorena and Atty. Cruz issued memoranda requiring GSIS president Winston Garcia to comment on Logarta’s letter.

Though nothing happened thereafter, Mr. Garcia admitted knowledge of LOI No. 500 and he said it has not been implemented.  He also said the GSIS was offering to reconvey the property to NPC, but he wanted that the GSIS property on Arroceros St., Manila be given to them by the National Government.  This sounds like a blackmail or hostage taking.

Whatever happened after this is not known. What is important, though, is that Logarta started it.

Then came the election of Mr. Roy C. Mabasa as the Club’s president for the term 2006 to 2008.

To his mind, he wanted to know the real score about the Club and its property.  So that he commissioned Toto Causing, the NPC legal consultant, to conduct thorough and deep research on the property and know whether the NPC is still registered as the owner or it also belonged to someone else.

This led to the discovery and documentations of these two laws and the certifications of the land titles and the encumbrances therein.

From these documents were formed the untold story about the NPC land and building, the loans and mortgages and the public auctions conducted for failure to pay real property taxes.


The quiet cancellation of NPC title


            On June 1, 1994, the GSIS quietly cancelled the title (TCT No. 38690) of the NPC over the land and had it registered in its name under TCT No. 216162.    The president of the Club this time was Mr. Fred Lobo.

            Still not contented, on September 15, 2004, the GSIS, now under the presidency of Atty. Winston F. Garcia, subdivided the said property into two, also under its name and under TCT No. 265235 and TCT No. 265236.   During this time, the president of the Club was Mr. Antonio Antonio.

            This means that the Club’s most precious gift from the State went to naught with a whimper, apparently without any president knowing what had happened. It might be even possible that not one NPC president or official had known about the public auction to be conducted by the Manila City Treasurer’s Office.

But it is much more likely that negligence, ineptitude and poor ability to manage funds took its toll from the Club’s property.

The void ownership by GSIS

            If these auction sales were ordinary, there would be no doubt that the GSIS owns the property.

            But in the case of the NPC property, the auction sales were void for the following reasons: (a) violation of Republic Act No. 905; and (b) NPC property is tax-exempt.

            Republic Act No. 905 requires the prior authorization of the President of the Philippines before the NPC land can be transferred to another person.

            There is no proof the President of the Philippines, Mr. Marcos at that time, gave prior authorization to the auction sales conducted by the Manila City government.

            This means that the auction sales violated RA No. 905.  Under the Civil Code, any contract or transaction that violates a law is null and void, or good as non-existent since the beginning. 

The auction sales where the GSIS won are one form of a contract.  Hence, they were null and void, too. 

It is succinct that there is no right that arises from a void transaction.  As such, there is also no right of ownership over NPC property that accrued in favor of the GSIS.

Mr. Neal Cruz and Atty. Winston Garcia, president and general manager of GSIS, are therefore incorrect in claiming the GSIS owns the NPC Building and the land upon which it stands.


NPC property is tax-exempt

Moreover, the auction sales themselves were null and void even if there were prior authorization given.

The NPC land is exempt from real property tax. Hence, there was nothing for the City Treasurer of Manila to tax against the Club.

The first reason for the tax exemption is the fact that it can be inferred from Republic Act No. 905 that the legal owner of the donated land is the national government and NPC merely acted as a title holder.   

The said law says that whenever the NPC ceases to need the land, it shall revert to the national government.   In the layman’s language, the actual owner is the national government.

The principle is still good when it says that the national government cannot be taxed by a subordinate body such as local governments (cities, municipalities and provinces), the latter being mere political subdivisions of the former.

Besides, the NPC can be considered a charitable institution for it is ministering to the thankless job of upholding and defending press freedom. 

It is committed to defend newsmen against libel and related cases.  It spends money to work for a stop to extrajudicial killings of journalists. It files cases and petitions on behalf of all newsmen. It conducts free seminars for journalists.  It acts as the spokesman of journalists in different fora, including legislative hearings in connection with proposed bills that have connection with press freedom exercise.

Under Section 28, sub-paragraph 3 of Article VI of the Constitution, charitable institutions and their land and improvements shall be exempt from taxation.


The Manansala Mural is owned by the NPC


            The logic of the GSIS is that it owns the NPC building, so that it also owns the Manansala mural painted on lawanit boards because it forms part of the permanent building.

            Even if we abide by this incongruent syntax that he who owns the building necessarily owns the mural found in it, the NPC is still the rightful owner of the Manansala mural. 

This is because the NPC still owns the NPC building and land as just discussed.

            From another angle, Article 415 of the Civil Code provides that a painting is deemed a permanent part of the building if it cannot be removed without causing destruction on the building or on the painting itself, or when the manner of placement reveals an intention to make it a permanent part of the building.

The lawanit boards were attached to a temporary wall of lumber frames and plywood covers on both faces.  This is the reason that when it was removed there was no damage caused on the building and on the painting itself. 

There was no physical destruction that was caused despite it was already in deterioration state that the lawanit grains continuously fell on the floor and termite colonies were found behind them.  These lawanit boards and the painting itself were 50 years old when removed.  It was painted in 1956 as Mr. Neal Cruz claims. 

These circumstances clearly reveal there was no intention to make the mural a permanent part of the building.  It can never be said as an improvement.

If intention can be had by an express declaration of the owner of the building, NPC being a corporation can reveal its intention only in the form of a board resolution.  

At the time the Manansala mural was painted and placed on the temporary wall in the restaurant and bar, it was undisputed that the owner of the building was NPC. 

Now, there has been no board resolution passed by any past administration of the Club declaring an intention making the painting a permanent part thereof.   Hence, it cannot be imagined how the mural can be said to be a permanent part of the NPC building.

Moreover, the tax declarations pertaining to the NPC land and building never show any listing of the Manansala mural as an improvement. 

Under the law of taxation, it is required of any land owner to declare improvements.  The fact that the wall painting has not been listed as an improvement makes sense to argue it is not a permanent part of the building.

Besides, the theme of the painting is press freedom. It is a symbol of the primary purpose of NPC which is to uphold press freedom.  It therefore must go wherever NPC goes.  It is like the logo of NPC that belongs to it only.

It is therefore crystal clear that the Manansala mural has never formed part of the NPC building.

           
The decision to sell the mural cannot be wrong


            It is incorrect for Mr. Neal Cruz to write in his columns that the decision to sell the Vicente Manansala Mural is wrong or a thievery.

It was a judgment call, a business judgment that cannot be contested.

Under the principle of business judgment established by jurisprudence from the Corporation Code, the board or the members of an association or stockholders of a corporation cannot be faulted for a judgment if it turns out bad later as long as the decision is anchored on reasonableness.

After all, no man is perfect.  This imperfectness is the reason that many corporation succeed, many fail.

The decision to sell the Manansala Mural was based on undisputed facts that the painting has deteriorated to the extent that that the grains of the lawanit boards were falling off and the Club had no money to shoulder the restoration cost of about P2.1 million.

Rather than leaving it rot because of lack of money, the NPC board led by president Roy C. Mabasa passed a resolution deciding to sell it to the highest offer of P10 million, on the basis of the authority granted in the October 2006 general assembly.

In addition, the decision to sell was firmed up by the urgent need to replace the oldest and craggiest elevator in town.  The NPC lifter was installed in 1956 and it had malfunctioned so often that trapped inside many dignitaries, including Senate President Manny Villar who precariously crawled up to get out. 

Thus, the new elevator worth P1.5 million has been installed.

Another reason for the sale was the urgency of installing individual meter installations for all the units in order to arrest the piling up electric debts with Meralco. 

This lowered NPC’s electric bills by almost P100,000 a month, enabling it to slowly reduce the more than P3 million overdue bills with Meralco when Roy Mabasa and company took oath as the officers for 2006-2008 term; now it is only about P1 million.

Another reason for the sale was the piling up water bills that ran to about P1 million when the Mabasa administration entered.  This has been reduced to about half.

There was also the inherited debt of about P5 million owing to the lost labor case against the NPC union.  This has been reduced to zero.

With these facts, can the judgment to sell be wrong?

With NPC as the owner of the mural, can its officers be thieves for selling what belongs to it?  To say yes is just like saying Juan stealing a property that belongs to him.


The balance of the proceeds of
the sale less the expenses for
renovations, debts & new mural is intact


            The balance of the proceeds from the sale of the mural after all the expenses due to elevator, individual meter installations, debts to Meralco and Maynilad and the new mural is intact.  It would be open for inspection to all persons who commit not to reveal its whereabouts to the GSIS.

            As Mr. Neal Cruz has clearly appeared to be lawyering for the GSIS, he is disqualified from availing of the right to inspection of the Club’s accounts.   Any information that he would have would be used against NPC as the defendant in all the civil cases filed by the state pension house.

            The NPC secretariat staff members, particularly Ms. Mae Briones and Ms. Fely Santos, are living witnesses that no single centavo of the proceeds went to the pocket of any incumbent officer.


The sale of the mural is legally valid


            The presumption under the Rules of Evidence says that an act performed as an official function is presumed valid unless proven otherwise by clear and convincing evidence.

            To vote in a general assembly and to determine quorum are official functions of the NPC.  Once it has been declared that an assembly had a quorum, it becomes the presumption. 

Hence, any claim of Mr. Neal Cruz to the contrary cannot be given any weight as he has no clear and convincing evidence that it had no quorum.

            Besides, even if there were no quorum, still the sale is one act that does not need general assembly consent.

            Under the Corporation Code, there is a need of the general membership consent only if what is to be sold constitutes all or substantially all of the property of an organization.

            The NPC land easily runs to P60 million at P30,000 per square meter.  The building is easily worth P50 million.  By these, it can never be imagined how the mural can be said to consist as “substantially all” of the property of the NPC.

Hence, it is clear that the sale of the mural was valid even if only it is backed by a board resolution.

It is also valid because it is NPC that owns the said mural – not the GSIS.


The buyer of the mural is Heritage Arts & Gallery


The NPC has never hidden the identity of the buyer of the Manansala mural.  The buyer is Heritage Arts & Gallery, whose owner Odette Alcantara, was charged by the GSIS with anti-fencing law violation, along with NPC officers.

So how can it be said that the buyer is hidden can never be imagined.  Of course, the NPC cannot prevent Heritage Arts & Gallery from selling it to another person as a matter of its right of ownership.


The GSIS charged not only the officers


            For the information of all members, the GSIS charged not only the officers of the NPC, but the NPC itself.

            In the complaint for recovery of mural in the Pasay City RTC, the GSIS named NPC, its officers and Heritage Arts & Gallery as defendants.

            In the complaint for eviction at the Manila MeTC, the GSIS named NPC alone as the defendant.

            So that it is incorrect for Mr. Neal Cruz to say that the GSIS only charged the NPC officers.


The incumbent officers cannot be blamed

           
            With all these discussions and arguments, it is very clear that there is nothing that can be blamed on the incumbent officers of NPC. (This refers to the incumbency of Mr. Roy C. Mabasa as the president.)
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