BIR Ruling No. 369-2018

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMEH IT OF FINANCE Quezon City IPS

the NIRC Sections 2 and 58 (E) of amended of1997, as : 369-2018 Person to Contact: Chief, Law Division Tel. Nos. 926-55-36 / 927-09-63

Date: Iarch e 2018

Makati City PHILIPPINE INVESTMENT ONE (SPV-AMC), INC. Unit l615-1616, Ayala Tower One & Exchange Plaza, cor. Ayala Avenue & Paseo de Roxas.

Attention: CARLOS M. MANALAC General Manager Gentlemen:

in relation to the Foreclosure Sale of the said lots owned by Sps. Luis and Emmie Estrella and Sps. Eugene and Corazon Tamayo. Certificates Authorizing Reoistration (CARs) on Transfer Certificates of Title (TCTs) Nos. This refers to your letter dated March 31, 2017 requesting, for the issuanee of and T'ax Declaration (ID) No.

Background:

from UCPB through a Deed Of Assignment dated March 14, 2008, including the properties mortgaged as security of the loans. United Coconut Planters Banks's (UCPB" for brevity) non-performing loans secured by Real Estate Mortgages with Sps. Luis and Emmie Estrella and Sps. Eugene and Corazon Tainayo. as borrowers and mortgagors. The annotated loans appeared on the above seven (7) titles started on March 6. 1995 with a Php: Php Phitippine Investment One (SPV-AMC), Inc. ("PIONE" for brevity) is the assignee of Ioan, and Php Toan payable. It followed by a Php. loan. PIONE acquired the non-pertorming loans Yoan. -

of Certificate of Release of Mortgage), dated March 3, 2016, issued by the Office of the including all the mortgaged properties secured by the loans of Sps. Estrella. Provincial Sherriff in favor of Luis Estrella. Jr., his heirs, assigns, successors, administrators. PIONE by way of the Deed of Assignment became under the principle of custodia! legis of all the necessary taxes assessed against PIONE for the above subject properties, before Revenue District Office (RDO) No. Ti, Kalibo Aklan. However, before the 'release of the appropriate CARs, Sps. Estrella presented and submitted to Alexander P. Laroza, Revenue then issued by the said court on the same date. Thus, all the loans of UCPB transferred to Distriet Officer of RDO No. 71, Kalibo Aklan, a Certificate of Redemption (with Cancellaticn brevity) fi!ed S.P. PROC CASE NO. M-6682 (IN THE MATTER OF PETITIOV FOR PROCEEDINGS AGAINST PHILIPPINE INVESTMENT ONE (SPV-AMC. INC. 3gainSt PIONE before the Regionai Trial Court (RTC) of Makati City, Branch 149. A Stay Order was REHABILITATION WITH PRAYER FOR STAYING ALL CLAIMS, ACTIONS AND On Jufy 4, 201 6, PiONE applied for the issuance of the appropriate CARs after pay'ment On September 23, 2008. creditor Metropolitan Bank and "Trust Company ("MB7C" for }

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PHILIPPINE INVESTMENT ONE (SPV-AMC), INC. 3-8-2018 03UC - -..

RDO Alexander P. Laroza requested for a ruling or legal opinion on whether or not his office The said Certificates were issued before the lapse of the one-year redemption period. Thus. will hold the release of the CARs in favor of PIONE. b .

Aranas; issued Memorandum No. 034-2016, which states that: On December 16. 2016, the Deputy Commissioner of the Legal Group, Jesus Clint O

property involves restoration of the property to the mortgagor-debtor fron the successors, administrators, the rights of Sps. Luis and Enimie Estrella and Sps Eugene and Corazon Tamayo over the properties have been restored as the same were actually reverted to them. Thus' the CAR should not be issued in purchaser. Considering that a Certificate of Redemption (with Cancellation of Certificate of Release of Mortgage dated March 3, 2016) was issued by the Office of the Provincial Sherriff in favor of Luis Estrella, Jr., his heirs, assigus. "In reply, please be informed that timely redemption of mortgaged real 1 L

fuvor of Philippine Investment One (SPV-AMC), Inc.

the morigaged real properties. Thus., please determine if there was an his redenption, or if ihere was merely a loan agreement between the Iandowners and Luis Estrella, Jr., so that appropriate taxes may be collected therefrom. agreement to convey the properties in favor of Luis Estrella, Jr. by reuson of Please take note, however, that it was Luis Estrella, Jr. who redeemed : L

appropriate CARs in favor of PIONE. In view of the above Memorandum; RDO Alexander P. Laroza did not issue the

portion of the said Resolution provides that: executed on March 31, 2016 to be null and without force and iegal effect. The dispositive Redemption with Cancellation of Certificate of Release of Mortgage dated March 3. 2016 declared the Certificate of Release of Mortgage dated March 3, 2016 and the Certificate of However, the RTC of Makati City, Branch I 49, in its Resolution dated March 23. 2017.

Sheriff IV, Cyril C. Francisco, are hereby declared in violation of the said without force and legal effect. Circular and Law and Jurisprudence, hence, these are declared a nullity. Certificate of Redemption_with Cancellarion of Certificate of Release of C. Tejada, Jr., Clerk of Court VI/Ex-Officio Provincial Sherriff, attested by Mortgage dated March 3, 2016 executed on March 31. 2016 by Atty. Arnaldo March 3, 2016 executed by Atty. Arnaldo C. Tejada, Jr., Clerk of Court V1/Ex- Officio Provincial Sherriff, attested by Sheriff IV, Cyril C. Francisco; and the "WHEREFORE, the subiect Certificate of Release of Mortgage dated

within fifteen (15) days from receipt of this Order that they have complied with this Order, under pain of sanction. Series of 2006; and Certificute of Redemption dated Murch 31. 2016 notarized by Atty. Higino C. Macabales, as Doc. No. 7, Page No. 3, Book No been annotated, they are ordered to cancel the sume, with notice to this court Cancellation of said Certificate of Release of Morigage dated March 3. 2016 notarized by Atty. Jerald I. Iledan, as Doc. No. 346, Page No. 71, Book No. 14. they have signed and executed with the Registry of Deeds. If the same had Sherriff, and Sheriff IV, Cyril C. Francisco of the Regional Trial Court of Kalibo; Aklan are hereby ordered to implement immediately upon receipt: the 71, Series of 2016. They are further ordered not to register those documents Alty. Arnaldo C. Tejada, Jr., Clerk of Court VUEx-Officio Provincial

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PHILIPPINE INVESTMENT ONE (SPV-AMC). INC. i: 3692018 38-2018 I

SO) ORDERED. " (Emphasis and underscoring supplied)

Release of Mortgage dated March 3, 2016 and Certificate of Redemption dated March 31, implementation of the Resolution dated March 23, 2017, the former attached thereto the explanation letter of Presiding Judge Cesar O. Untalan dated August 14, 2017, which partly 2016. In the letter dated August 23, 2017 of the Depuly Court Administrator Jenny Lind R. provides that: of Kalibo, Aklan were ordered to implement immediately the cancellation of the Certificate of Aldecoa-Delorino to Cyril C. Francisco relative 'to the query of the latter as to the Stay Order issued by this court on September 23, 2008.... In the said Resolution, Atty. Arnaldo C. Tejada, Jr. and Cyril C. Francisco of the RTC "It is worthy note that the subject property was part and subject to the

persons, regardless of status and position who shall intervene and disturb the smooth and proper distribution of subject assets shall alvays be subjected to the power and authority of the court. Court for Philippine Investment One, has to protect the assets under rehabilitation which includes the issuance of the subject Resolution dated March 23, 2017 under questioned by Sheriff Cyril C. Francisco. Thus, all court under the principle of custodia legis, hence this court, as Rehabilitation Order, the subject property becomes autonatically under the custody of this In view of the inclusion of the subject property under the said Stay +.

Interna! Revenue Code of 1997, as amended, states that: In reply, please be informed that Section 2 in relation to Section 58 (E) of the Nationat

this Code or other laws. " by the Court of Tax Appeals and the ordinary courts. The Bureau shall give effect to and adininister the supervisory and police powers conferred to ii by assessnent and collection of all 'national internal revenue taxes, fees, and charges, und the enforcement of ull forfeitures, penalties, and fines connected therewith, including the execution of judgments in all cases decided in its favor Bureau of Internal Revenue shall be under the supervision and control of the Department of Finance and its powers and duties shall comprehend the "SEC. 2. Powers and Duties of the Bureau of Internal Revenue. --- The

"SEC. 58. Returns and Puyment of Taxes Withheld at Source. --

xxx XXX XXX

such transfer has been reported, and the capital gains or creditable withholding tax, if any, has been paid: xxxxxx xxx document iransferring real property shall be effected by the Register of Deeds unless the Commissioner or his duly authorized representative has certified that : E) Registration with Register of Deeds. -- No registrution of any

the CAR is nothing more but a certification that applicable taxes on the transaction have been does not fall within its jurisdiction. been reported, and that the applicable taxes have been duly paid. It must be emphasized that paid. In issuing the CAR, the BIR does not rule on the validity of the transaction as the same is concerned, the BIR shall ensure that proper taxes have been paid thereon. The BIR 'shail make a certification, through the issuance of CAR, that the transfer of the real property has Revenue (BIR) is to collect taxes. In so far as registration of document transferring real property It is clear from the foregoing provisions that the prime concern of the Bureau of Internat

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PHILIPPINE INVESTMENT ONE (SPV-AMC), INC. 38-2018 369-2018

Court ordering the RDO in Kalibo, Aklan to issue the necessary CARs in favor of PIONE custody of the said Court under the principle of custodia legis, a specific Order from the said should first be secured. issued by the RTC of Makati City, Branch 149'dated September 23.2008. and under the However, considering that the subject property was part and subject to the Stay Order

considered null and void. if upon investigation it will be disclosed that the facts are different, then this ruling shall be This ruling is being issued on the basis of the foregoing facts as represented. However.

Very truly yours,

&K-I-LMAT Commissioner of Internal Revenue. CAESAR R. DULAY 013955

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