Monday 24 September, 2018
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SC upholds Reghis Romero’s right to recover P4B from gov’t for Smokey Mountain project

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The Supreme Court (SC) upheld with finality its decision in favor of R-II Builders, Inc.’s right to file a case before the Quezon City Regional Trial Court (RTC) to recover assets worth more than PHP4 billion from the joint venture agreement it has entered into with National Housing Authority (NHA) and the Home Guaranty Corp. (HGC) in connection with the Smokey Mountain Development and Reclamation Project (SMDRP) in Manila.

In a resolution issued by SC First Division on Jan. 17 but was released to media on Thursday, the high court denied the motions filed by the NHA and HGC for lack of merit.

“Acting on the petitioners’ separate motions for reconsideration… and considering that there is no substantial argument to warrant a modification of this Court’s resolution, the Court resolves to deny reconsideration with finality,” the SC ruled.

It also said that “no further pleadings or motions shall be entertained” and “let an entry of judgment in these cases be issued immediately”.

Based on the complaint filed with the Quezon City RTC, R-II Builders wanted the rescission of deed of assignment and conveyance executed by the Planters Development Bank in favor of the HGC in view of the failure of the latter to fulfill its obligation to pay for all unredeemed Regular participation certificates; the resolution of the contract of guaranty on account of the HGC’s refusal to pay for the guarantee coverage with debenture bonds as specifically required in the agreement; and the accounting and liquidation of the asset pool as necessary consequence of the rescission of the deed of assignment and conveyance.

In its July 26, 2017 resolution, the SC dismissed the petitions filed by NHA and HGC, which challenged the 2015 decision of the Court of Appeals (CA) in favor of R-II Builders, owned by port developer Reghis M. Romero II.

“After judicious consideration of the arguments raised by petitioners HGC and NHA, the Court resolves to deny the instant petitions for review on certiorari for lack of merit. Petitioners failed to sufficiently show that the Court of Appeals committed reversible error in issuing the assailed decision and resolution,” the SC ruled.

The SC pointed out that the primary objective of R-II Builders in filing a civil case “is to recover the residual value of the asset pool (Smokey Mountain Asset Pool or SMAP) in the SMDRP after its liquidation and the annulment of the instruments in question.”

It said, “We agree with the finding of the CA that based on the allegations in the complaint, as well as the reliefs prayed for therein, the suit instituted by respondent R-II Builders, Inc. was a personal action because its primary objective was the rescission of certain agreements.”

The SC said “these prayers for resolution, rescission, accounting, liquidation, and delivery of the residual value of the Asset Pool are akin to actions for specific performance and recovery of a sum of money”.

The SMDRP, which began in 1993, was aimed at implementing a two-phase conversion of the Smokey Mountain Dumpsite into a habitable housing project.

In 1994, NHA and R-II Builders, with HGC as guarantor and the Philippine National Bank (PNB) as trustee, entered into an Asset Pool Formation Trust Agreement which provided the mechanics for the implementation of the project.

Former Vice President Noli de Castro, as then chair of the Housing and Urban Development Coordinating Council under the Office of the President, had recommended in 2010 the settlement of the claims made by HGC as subrogee of the SMAP amounting to P4.7 billion.

De Castro’s recommendation stated that the items of work in SMDRP had been rendered as early as 1995 but remained unpaid. It pointed out that based on the validation of an inter-agency technical committee, the SMAP already had a value of more than P7.09 billion as of 2010.

In the same resolution, the high court also dismissed the claims of both the NHA and HGC that the civil case filed by R-II Builders with the RTC was the same case it had resolved and dismissed in 2011.

“We do not find any merit either in petitioners’ assertions that the instant case must be deemed barred by res judicata and the ‘law of the case’ principle in light of this Court’s earlier decision in Home Guaranty Corp.,” the SC ruled.

It noted that “the issues and the causes of action raised in the complaints filed in the two cases are different, thus rendering both doctrines of res judicata and the ‘law of the case’ inapplicable.” (PNA)

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