A businessman's plea for reforms

Today I give space to a prominent realtor’s sad experience with the executive and judiciary. He hopes that, with promised changes under P-Noy’s admin, the obvious shenanigans and injustice would end. His anonymous narrative:

“Last year then-Chief Justice Reynato Puno called for the emergence of a moral force to counter the decadence sweeping the land. He asked the Supreme Court to seize the initiative in this task, as ultimate defender of a Constitution based on morality. He called on the country’s moral forces to cease being passive but assert themselves. Target judges and even justices who mock the law, and bureaucrats who bend the rules for a price, he said.

“My story encompasses justices and bureaucrats.

“The Housing & Land Use Regulatory Board upheld the imposition of onerously high interest — five percent a month, compounded monthly — for supposed advances made by a property Buyer. The case stemmed from a Developer’s complaint against the influential Buyer who had defaulted on installment payments for 12 lots in a posh subdivision in Quezon City.

“The HLURB initially ruled in favor of Developer. Two months later it reversed itself by voiding the cancellation of contract. Buyer was to be credited with land equivalent to the amount he had already paid, and allowed to resume paying the balance on the other lots under the contract.

“Buyer immediately chose five lots out of the 12 for titling in his name. To facilitate the transfer, he volunteered to advance the cash needed to pay requisite taxes on the lots, to the tune of P3.2 million. No written contract was drawn up to cover this ‘generous’ offer. Nor was there any mention of interest to be paid on them, being for the sole benefit of Buyer himself.

“No sooner had the five lots been titled to him than Buyer used them as collateral to secure a P60-million bank loan. He also announced to Developer that he was charging five percent monthly interest, compounded monthly, on the advances he had made. Adding insult to injury, Buyer then defaulted on payments for outstanding liabilities of more than P24 million under the original Contract to Sell, the reason Developer had cancelled it in the first place. Yet the HLURB not only ruled against Developer, but also confirmed the unilateral imposition of interest at confiscatory rate, against an undocumented ‘Agreement’. How was Buyer able to sell this idea to HLURB?

“Developer appealed the case to the Office of the President. The senior Malacañang official-in-charge affirmed the HLURB. Curiously, the affirmation came one month after the official’s transfer to another office. When the discrepancy was noted, Malacañang claimed that the official had signed the affirmation a day before his transfer. Incredible!

“Developer then petitioned the Court of Appeals. Its 4th Division nullified the HLURB and Malacañang rulings, particularly the onerous interest rate. That wasn’t the end of story.

“Three months later the Court constituted a so-called ‘Special 4th Division’ by replacing a justice with a controversial one. This special division reversed the earlier decision and restored the status quo in Buyer’s favor and at Developer’s expense. No compelling reason was cited to justify the reversal.

“Where’s the logic? Buyer owes Developer P24.1 million under a valid property sales contract. Granting a tacit obligation on Developer’s part to return P3.2 million in advances to Buyer, this could readily be resolved by simple offset of one obligation against another. Yet even after all 12 lots have been fully paid, Developer would still owe Buyer a whopping P76 million, with the meter continuing to run.

“Buyer has succeeded in placing all of Developer’s lot titles under lien, some of which were auctioned, with Buyer himself as bidder. This could bankrupt Developer.

“Developer brought the case to the Supreme Court. He petitioned for an en banc hearing on the merits. The Clerk of Court dismissed the petition through a ‘minute resolution’ to which not a single justice was signatory. Yet it was taken to be a Supreme Court decision.

“Developer then appealed to Chief Justice Puno, who endorsed it to the 3rd Division for ‘appropriate action.’ Puno noted that ‘legal issues raised therein are of paramount transcendental importance, such as the validity, constitutionality and legality of the 5-percent interest rate compounded monthly.’ The Chief Justice’s endorsement was merely noted, then likewise dismissed by minute resolution of the 3rd Division, via its Division Clerk of Court.

“This case sets a dangerous precedent. Official validation of unilateral undocumented advances as loans with unconscionable interest threatens all borrowers, particularly since the Anti-Usury Law has been repealed.”

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Gotcha will be absent this Friday and the whole of next week, as I take a break.

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‘Men say, ‘from the bottom of my heart.’ Should we not rather say, from my bottomless heart’?’ Shafts of Light, Fr. Guido Arguelles, SJ

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E-mail: [email protected]