The Case of the Batulao Estates
A Real Estate Winner Turned Nightmare,
Due to Unexpected Treachery & Rank Injustice
I. BACKGROUND
The Batulao Estates case study is the story of a brilliant real estate strategy that was headed for a spectacular homerun, but was, instead, suddenly cut short by shameless treachery abetted by a miscarriage of justice.
It is the story of a powerful and influential political clan coming upon a humongous parcel of agricultural land with plans of converting it to other and more profitable uses, but failed. They turn to an acknowledged real estate expert who comes up with a creative, complex but practical, and mutually beneficial win-win approach to developing the entire property for the benefit of all concerned.
The project would have been a sure winner until some of its members – succumbed to greed and treachery.
They blindsided their expert consultant, misrepresented portions of their converted land, and agreed to the acquisition of the DAR TCT T-44634 and fabricated false title and the property under TCT No. T-44648 was sold to CityState Properties & Management Corporation for P48,655,500.00 - all behind the back of their consultant. To put the proverbial icing on the cake, they even filed a case against their hardworking consultant, questioning the legality of his moves on their behalf, notwithstanding documented board resolutions and affidavits of its officers through director-COO ANTONIO G. PUYAT, VP-Finance HERMINIGILDA S. MACALALAD and Corporate Secretary NORINA P. ZIALCITA.
This narrative attempts to summarize the background and main facts of the case.
FREEING UP CONVERTED LAND FOR NEW DEVELOPMENT
The story begins with the issuance on May 27, 1975, of land use conversion for 1,837 hectares in Nasugbu, Batangas from agricultural to non-agricultural by then Agrarian Reform Minister Conrado Estrella to the family of the late Senate President Gil. J. Puyat. This was premised on one important condition: “subject, however, to the payment of the disturbance compensation to the tenant-tillers, if there are any, according to law.”
Called Batulao Estates, the Puyat family created several companies to take care of the development of the property. The family companies included the Batulao Golf and Mountain Resorts, Inc.. (BGMRI), the Group Developers, Inc. (GDI), and the Batulao Bio-Loop Farms, Inc. (BBLFI).
But mobilizing the land for new development was easier said than done. Funds were needed to develop the land as planned. The Puyats were able to secure some funds through loans from the family-owned and controlled The Manila Banking Corporation, but the funds were not enough. There were also various cases filed against the companies and their intended projects with the Housing and Land Use Regulatory Board (HLURB) and the Office of the President of the Philippines. About 75 adverse claims were filed and annotated on the TCTs. When Manila Bank itself was beset with very serious problems, it came under receivership by the Central Bank, along with various family assets purchased from loans with Manila Bank. These included the Batulao Estates, which was threatened with foreclosure. While the Puyats had the option of redeeming the asset, they did not have the funds to do it.
To make matters worse, the DAR’s grant of conversion had not been without opposition. This came from farmer-beneficiaries belonging to the Kooperatiba ng Sandigan ng Magsasakang Pilipino (KSMPI). who strongly opposed the implementation of the conversion order. This complaint also had to be settled first before the land could be disposed for other uses and further subdivided for eventual sale and re-registration to new buyers of the subdivided parcels.
The farmers’ group filed a case with the DAR Adjudication Board (DARAB), but the latter denied the former’s Complaint-In-Intervention. The KSMPI filed a Petition for Certiorari with the Court of Appeals (G.R. NO. 47813), but this was dismissed on June 17, 1999, for failure to conform to Sec. 6, Rule 43 of the Rules of Civil Procedures. The KSMPI elevated the case to the Supreme Court, but on June 26, 2000, its Petition for Review was denied by the highest court for lack of merit. The latter found no error with the assailed ruling of the Court of Appeals.
RGV TO THE RESCUE
Faced with such a complex situation, the Puyat Family, through their directors Gil J. Puyat, Jr. and Antonio J. Puyat, turned for expert assistance to a realtor friend, Rodolfo G. Valencia (more popularly known as RGV).
By then, RGV was already one of the prominent names in Philippine real estate. His RGV Group of Companies had gained fame for its successes in assembling land, studying its best use, packaging it into viable projects, getting them ready for development, securing project financing or marketing the projects to capable investors, and finally launching the projects with qualified buyers.
RGV fielded a high-powered RGV DEVELOPMENT CORPORATION (RGVDC) to handle the Batulao Estates project.
RGV conducted due diligence on the Batulao Estates and saw its huge potential for mixed development and its possible evolution into a new township or modern urban development showcase. He knew that with deeper study and proper planning, the estates could be planned and packaged into various inter-related real estate projects worthy of the interest and resources of qualified investors.
He also discovered that diverse portions of the property were occupied by the complaining farmer families. To avoid being encumbered by agrarian reform issues that could discourage potential investors, RGV resolved to address the need to relocate and properly compensate the farmer families. So, he dialogued with the farmers and their representatives and they agreed on a scheme whereby the families would be properly relocated to a designated area. At the relocation site, they would be given by the landowners residential lots, an area sufficient for collective farming, and a smaller area for demonstration farming.
THE ISSUES AND CONCERNS OF THE ESTATES
About 75 Adverse Claims Annotated on the Titles of Batulao Golf & Mountain Resorts, Inc. (BGMRI)
BGMRI’s Pending cases with the Housing & Land Use Regulatory Board (HLURB) and with the Office of the President
Redemption of Foreclosed Properties of Group Developers, Inc. (GDI) and Batulao Bio-Loop Farms, Inc. (BBLFI) from Bangko Sentral ng Pilipinas, Statutory Receiver of The Manila Banking Corporation
Settlement of disturbance compensation to farmers-tillers occupying the Estates in compliance to the 1975 DAR Conversion Order of then Agrarian Reform Secretary Conrado Estrella
Relocation site for farmers-tenants occupying portions of the 335-Ha., the 150-Ha. and the two (2) parcels of land designated as relocation site themselves.
Pending Case with the Supreme Court on the Petition for Review of the Kooperatiba ng Sandigan ng Magsasakang Pilipino, Inc., (KSMPI)
II. THE AGREED-UPON APPROACH BY RGV AND THE PUYAT GROUP
Hereunder is a summary of these transactions and salient events that accompanied the transactions backed by available pieces of documents and material evidences:
1. TRANSACTION NO. 1
JANUARY 25, 1996
MEMORANDUM OF AGREEMENT (MOA) DULY EXECUTED BY BGMRI IN FAVOR OF ANTONIO L. CABANGON CHUA, RODOLFO G. VALENCIA, ALFONSO SIY AND FIORELLO BOTE
a. Subject of Sale. 335-Ha., more or less
TCT No. Area (in Sq.m.)
T-44120 1,003,789
T-44122 803,250
T-44123 674,442
T-44124 868,134
Total Area 3,349,616 (rounded to 335 Has.)
b. Purchase Price: PhP 840,000,000.00 payable:
30% Downpayment
P100,000,000.00 initial downpayment
P152,000,000.00 upon clearing the tenancy problem
P252,000,000.00 Total Downpayment
70% Balance of Purchase Price
P588,000,000.00 in 24 equal monthly amortization with 6% interest per annum to commence upon 30% full downpayment
c. Salient covenants and conditions:
(1) Clearing of the Tenancy Problem
(2) Aside from monetary considerations, the Seller obligates to provide 100 has. as farm lots and 30 has. as residential lots for relocation of the tenants, squatters and occupants.
(3) Escrow deposit of Owner’s Duplicate Certificates of all the Four (4) Titles (TCT T-44120, T-44122, T-44123 and T-44124)
(4) Seller warrants legality of its ownership and titles, same to be free/clear of any lien or encumbrance; authentic, genuine, valid, and registerable.
(5) Seller has the legal capacity to sell the properties; that there are no legal impediments against its selling the same to the Buyers.
(6) Cancellation of Adverse Claims in all of the four (4) titles.
d. Present Status
(1) Because of the PhP 100 Million partial payment of ALC Group, the following were settled:
i. BGMRI cleared 51 Adverse Claims with remaining 25 still annotated.
ii. Settled and resolvedl pending cases with the HLURB and the Office of the President
iii. Successsfully obtained Resolution of the Supreme Court denying the Petition of KSMPI with the legal support of Counsel Manuel Lazaro.
(2) Missing Titles. Original TCT Nos. T-44120 and T-44122 are suspiciously missing from the vault of the Registry of Deeds for the Nasugbu Branch. Only certified electronic copies of TCT Nos. T-44123 and T-44124 were obtained from the RD, Copies enclosed. The owner’s duplicate copies were likewise reported missing. How come no efforts have been initiated to cause the judicial reconstitution of the missing titles? Why?
(3) No farm lots and residential lots (relocation site) provided.
2. TRANSACTION NO. 2
APRIL 22, 1997
THE PUYAT GROUP NEEDS MORE FUNDS TO ADDRESSS ITS PRESSING FINANCIAL OBLIGATIONS. RGV WAS ASKED TO SELL ANOTHER PROPERTY IN THE BATULAO ESTATES.
WITH THE PROFESSIONAL HANDLING OF RGV, ANOTHER PROPERTY WAS SOLD. BGMRI EXECUTED THE DEED OF ABSOLUTE SALE IN FAVOR OF PRAEDIUM REALTY & DEVELOPMENT CORPORATION FOR THE SALE OF 12.3466-HA. PORTION OF THE BATULAO ESTATES COVERED BY TCT NO. T-59802 FOR THE PRICE OF P200 MILLION
3. TRANSACTION NO. 3
MEMORANDUM OF AGREEMENT DATED JULY 23, 1999
GDI & BBLFI REQUESTED RGV TO REDEEM THEIR
FORECLOSED PROPERTIES FROM THE BSP
a. On August 4, 1999, The Manila Banking Corporation (TMBC) sent final demand for GDI and BBLFI with enclosed Statement of Account dated July 31, 199 in the total amount of P 296,527,647.97 to be paid within a period of seven (7) days from receipt. Otherwise, Manila Bank will resort to immediate execution of of the aforesaid judgment without further notice. COO Tony Puyat adviced VP-Finance Hermie Macalalada to immediately send to RGV to seek for assistance in the settlement of the account.
b. On October 16, 1998, in order to extend again its support to Puyat Group, RGV directly paid the sum of PhP 55 Million to Bangko Sentral ng Pilipinas (BSP), Statutory Receiver of Manila Bank to redeem the foreclosed properties of GDI under TCT No. T-41389 (later sold to Monterrosa Development Corporation) and TCT T-44634 of GDI together with TCT No. T-44648 of BBLFI with clear agreement and resolution of both Corporation GDI and BBLFI including an Affidavit of Antonio G. Puyat that subject properties will be used exclusively for relocation site of the tenants occupying portions of the properties of BGMRI, Monterrosa and the proposed relocation sites totalling about 388 tenants. (See enclosed plan indicating subject properties and tenants).
c. TMBC issued its Official Receipt No. 153920. With this payment, BSP caused the restructure of the joint account
d. On July 23, 1999, a Memorandum of Agreement was duly executed by GDI and RGVDC. It stipulated the sale of the real property covered by TCT No. T-41389 in favor of RGVDC (on behalf of its Nominee) containing an area of 150 hectares.
The conveyance of the designated relocation site covered by TCT No. T-44634 containing 323,275 square meters and the real property of BBLFI covered by TCT No. T-44648 containing an area of 294,622 square meters. for a combined area of 517,897 square meters.
The MOA likewise provided for the appropriation/allocation of the agreed purchase price of PhP 321,600,000.00 and empowered RGVDC to disburse the same as appropriated, among others.
e. Total amount already paid and/or disbursed by RGV, deductible from the purchase price pursuant to the MOA dated July 23, 1999:
Earnest-money paid on 11 December 1997 P 1,000,000.00
Directly paid to BSP for the redemption of
properties covered by TCT T-41389, T-44634
and T-44648 55,000,000.00
Legal and miscellaneous expenses incurred
in the redemption 16,000,000.00
Partial settlement of legitimate claims of
farmer-beneficiaries occupying TCT T-41389 4,133,349.00
(Actual Area Occupied: 758,583 sq.m.
x P100/sqm. = Php 75,885,300.00)
Partial settlement of legitimate claims of
farmer-beneficiaries occupying TCT Nos.
T-44634 and T-44648 3,119,896.00
(Actual areas occupied: 13,081 sq.m.
x P 100 per sq.m. = P 41,308,100.00)
Costs & Expenses incurred in obtaining
Clearances and approvals from the
Municipality of Nasugbu relative to the
consolidation, subdivision and
development of the Relocation Site 5,000,000.00 _______________
Total Amount Paid/Disbursed by RGV P100,333,245.00
f. GDI and RGVDC mutually agreed that should the estimated costs and expenses increase due to the enlargement of the actual area occupied by the farmer-beneficiary, said additional expenses shall be authorized and shouldered by GDI for its sole and exclusive account.
g. With the agreement by both parties on the appropriation/allocation and disbursement of the entire sales proceeds as provided for in the MOA, the monetary obligation of RGVDC to GDI is deemed fully settled and paid. Therefore, the enabling Deed of Absolute Sale in favor of RGVDC or its Nominee was executed and finalized.
h. August 5, 1999, GDI executed the Deed of Absolute Sale in favor of MONTERROSA DEVELOPMENT CORPORATION, nominee of RGVDC, for the property covered by TCT T-41389. The sale of this real property of the Corporation was adequately covered by enabling Resolution duly approved and adopted by its Board of Directors and affidavit executed by its corporate officer, Antonio G. Puyat.
i. August 23, 1999, the Register of Deeds for the Nasugbu Branch cancelled TCT T-41389 and issued TCT No. T-82447 duly registered in the name of MONTERROSA DEVELOPMENT CORPORATION.
ON SEPTEMBER 7, 1999, SWAP OF SHARES STOCKS BETWEEN MONTERROSA DEVELOPMENT CORPORATION AND CHINATOWN STEEL TOWERS, INC. (CSTI)
a. As a background, the AFP-RSBS was a pension fund for retired military personnel. RSBS typically invested its funds in various ventures to grow its assets for its members.
b. Among its ventures was the China Steel Towers condominium building in Chinatown, Manila (CSTI).
c. Since 1995, RGV had extended assistance to CSTI to sell out its remaining 120 condominium units that have remained unsold for several years. This posed a serious problem to the RSBS, similar to the situation of Batulao Estates.
d. RGVDC conducted an in-depth Finance and Marketing study on the matter. As a result, it was resolved that a swap of shares of stocks with another high-value and viable asset could be the best and most expeditious way for CSTI to recover its investment. RGVDC can then takeover management from the military and solve numerous problems of the project. The building can be repaired and the selling price can be reduced to market value so sale of condo unit can materialized. A big part of the proceeds from the sale will then be utilized for the development of relocation site and payment of tenants occupying the Monterosa Property.
e. A Deed of Assignment was finalized between CSTI and RGVDC on September 7, 1999 for a swap of shares of stocks of Monterrosa Development Corporation with CSTI.
f. At the time of the execution of the Deed of Assignment, an agreement has already been executed with some 208 farmers-tenants represented by their Attorney-in-Fact on the terms and conditions of the settlement of their legitimate claims. Further, there were favorable developments and assurances as to the issuance of the clearances and approvals by the Municipality of Nasugbu respecting the consolidation and subdivision of the two (2) parcels of land designated as relocation site.
g. The fate of the relocation site is discussed at length in the following Transaction No. 4.
4. TRANSACTION NO. 4
RELOCATION SITE
a. October 7, 1998, Resolution adopted by GDI Board authorizing the assignment of the parcel of land covered by TCT No. T-44634 containing an area of 323,275 square meters as relocation site for tenants and squatters, further authorizing its Director, Antonio G. Puyat, to make, sign and execute all pertinent documents to effect the said resolution. On same date, an identical Resolution was adopted by the Board of Directors of Batulao Bio-Loop Farms, Inc. assigning a parcel of land covered by TCT No. T-44648 containing an area of 294,622 square meters as relocation site.
b. By virtue of MOA dated July 23, 1999, RGV initiated the negotiation with the farmer-beneficiaries. This led to the execution of an Agreement with some 208 farmer-beneficiaries represented by their Attorney-in-Fact on the terms and conditions of the settlement.
c. August 24, 1999, RGVDC wrote GDI that payment to the first batch of farmers/occupants is already in the process of conclusion.
d. August 30, 1999, Barangay Chairman Pedro T. Fenol of Kaylaway issued a Certification affirming that proper consultation was made with respective constituents who interposed no objection to the 51-Hectare Relocation Site of RGVDC.
e. September 20, 1999, RGVDC submitted its report on the “Payment of Disturbance Compensation” to Farmer-Benefiaciaries Kaylaway, Nasugbu, Batangas
f. November 10, 1999, the Office of the Municipal Planning and Development Coordinator/Zoning Administrator of Nasugbu issued the Certificate of Zoning Compliance in favor of RGVDC.
g. January 6, 2000, RGVDC submitted its Project Management Report to GDI (thru Mr. Antonio G. Puyat, Chief Operating Officer) covering the topics:
h. Payment of Disturbance Compensation in the total sum of PhP 7,253,245.50 covering a total of 111 farmer-beneficiaries paid.
i. Conversion of the 51- Hectare Relocation Site from Agricultural to Residential use from the Municipal Government of Nasugbu at estimated cost of PhP 3.00 per square meter or a total sum of PhP1,559,691.00 chaqrgeable against GDI.
j. Two (2) groups of farmer organizations, Samahang Magbubukid ng Pilipinas and the Pinag-isang Lakas ng Mamamayan ng Kaylaway, actively campaigning against the Conversion Order.
k. February 2, 2000, ANTONIO G. PUYAT, in his capacity as Director of BBLFI and Chief Operating Office of GDI, executed separate Affidavits affirming that the properties covered by Transfer Certificate of Title No. T-44648 containing an area of 194,622 square meters and Transfer Certificate of Title No. T-44634 containing an area of 323,275 square meters are “set aside as relocation site is intended for dislocated beneficiaries and not for sale to the public”.
l. February 17, 2000, Municipal Assessor Lauro C. Andaya approved the Assessment of Real Property No. 023-00751 pertaining to Lot No. 3-E-11 located at Barangay Kaylaway, Nasugbu, Batangas, covered by TCT No. T-44648 with the following Memoranda:
“Re-assessed on the basis of plans submitted for the purpose of relocation site of affected beneficiaries in compliance of DAR Conversion Order dated May 27, 1975 and January 22, 1991 signed by Secretary Conrado Estrella and Secretary Benjamin T. Leong, respectively and on the basis of Certification issued by the Municipal Planning and Development Coordinator that subject land is within the Urban Core Zone pursuant to Municipal Ordinance No. 3, S. 1982 which was ratified by the Housing and Land Use Regulatory Board under Board Resolution No. 123, dated May 4, 1983 and per recommendation of the Municipal Assessor.”
m. February 3, 2000, the MPDC/Zoning Administator, Municipality of Nasugbu Certification, issued a Certification attesting that the properties covered by TCT No. T-44634 and T-44648 are classified with the Urban Core Zone. Attached thereto is the Certification from the Barangay Chairman of Kaylaway dated August 30, 1999 interposing no objection to the Relocation Site of RGVDC.
n. March 20, 2000, Municipality of Nasugbu approved and adopted Resolution No. 17, Series of 2000 approving the application for subdivision and development permit for residential/relocation site of RGV Development Corporation covering two (2) parcels of land with combined area of 517,897 square meters situated at Barangay Kaylaway, Nasugbu, Batangas. Said properties were consolidated and subdivided into 697 residential lots, 8 lots as open spaces and road lots, in order to provide homelots to the displaced tenants and beneficiaries of Puyat Properties.
o. March 30, 2000, Subdivision Approval issued in favor of RGV Development Corporation on March 30, 2000 by the Municipality of Nasugbu, Batangas for the Properties covered by TCT Nos. T-44634 andT-4648 with an area of 517,899 square meters for the purpose of relocation site.
p. March 30, 2000, the Chairman on Housing and Land Use issued the Development Permit in favor of RGVDC.
A SUDDEN AND INEXPLICABLE TURN OF EVENTS
The foregoing list of dates and activities clearly indicates that the agreed-upon work program between GDI and RGVDC was proceeding according to plan.
Suddenly, and without prior warning or consultation between the parties, RGVDC received a number of communications that indicated a reversal of the agreed-upon work process.
On May 12, 2000, or six weeks from March 30, 2000 when the Development Permit was issued in favor of RGVDC, a Notice of Coverage and Field Investigation signed by MARO Manuel Limjoco addressed to GDI on its property covered by TCT No. T-44634 and to BBLFI on its property covered by TCT No. T-44648.
The implication is that these properties will now be acquired by the Republic, represented by the DAR, thereafter subdivided and each lot issued the individual Certificate of Land Ownership Award (CLOA) to be awarded to farmer-beneficiaries.
N.B. – Despite all the approvals already obtained, RGVDC had to cease further negotiations with the farmer-beneficiaries and the development of the relocation site. When he queried GDI about the turn of events, the latter assured RGV that their lawyers can handle the problem with DAR and will inform RGV of results of their intervention as soon as possible.
On December 2002, despite the assurance of GDI that they will handle the DAR problem, PARO Miriam C. Santos issued a Memorandum to MARO Limjoco forwarding the Memorandum of Regional Director Dominador B. Andres pertaining to the compliance of GDI/BBLFI to the May 27, 1975 Conversion Order issued by then Agrarian Reform Minister Conrado F. Estrella covering the 1,827 hectares landholdings at Barangay Kaylaway, Nasugbu, Batangas. Cited in the Memo were the efforts already exerted by RGV for and in behalf of GDI/BBLFI.
On December 28, 2005, TCT No. T-44634 was officially canceled by the Registry of Deeds for the Nasugbu Branch by virtue of a Deed of Absolute Sale duly executed by GDI in favor of the Republic of the Philippines. On the same date, TCT No. T-105639 was issued in the name of the Republic of the Philippines. Thirty-three (33) individual Certificates of Land Ownership Award (CLOA) awarded to Agrarian Reform Beneficiaries.
DAR OIC-PARO Merle H. Manalo, in her Certification dated May 15, 2017, affirmed the list of the Agrarian Reform Beneficiaries individually awarded their respective CLOA as beneficiaries under the CARP, on the coverage of agricultural property embraced in TCT No. T-44634.
On January 11, 2006, the individual Certificates of Land Ownership Awards (CLOA) were issued to the some thirty-three (33) agrarian reform beneficiaries.
As the above events show, GDI’s warranties, commitments, resolutions and affidavits appear to have been for naught.
TO MAKE MATTERS WORSE, GDI HAD THE AUDACITY TO BRING RGV TO COURT.
On May 23, 2007, GDI filed a Complaint for Reconveyance of Property with Damages against RGV, et al. before the Regional Trial Court, Branch 14, Nasugbu, Batangas.
TO ADD INSULT AND INJURY
April 20, 2015, BBLFI, using a fraudulently reproduced owner’s duplicate certificate of TCT No. T-44648, sold the property to CityState Properties & Management Corporation for the sum of PhP 48,655,500.00.
N.B. - RGV has been and remains to be in possession and custody of the owner’s duplicate copy of TCT T-44648 from the time of its release from Real Estate Mortgage by the Bangko Sentral ng Pilipinas acting as Statutory Receiver for The Manila Banking Corporation on October 16, 1998. The sum of PhP 55 Million was paid by RGV to redeem real properties covered by TCT No. T-41389, T-44634 and T-44648 under The Manila Banking Corporation Official Receipt No. 1539820.
THE RTC BRANCH 14 PRESIDING JUDGE ERRED IN JUDGMENT
On February 2, 2017, RTC Branch 14 Presiding Judge Marcedes Dagdag-Lindog rendered a Decision in favor of GDI. This was less than two (2) years from the fraudulent sale of TCT T-44648.
The decision rendered by RTC Branch 14 Presiding Judge Mercedes Dagdag-Lindog less than two (2) years from the fraudulent sale of TCT T-44648 reveals gross misinformation and/or misrepresentation of crucial facts of the case, based on citations within the decision. This could have been due either to lack of knowledge of the true facts of the case arising from failure to read or appreciate important supporting documents or an outright manipulation or misrepresentation of facts.
III. FINDINGS OF THE COURT (LIFTED FROM ITS DECISION)
1. WAS THERE FULL PAYMENT OF THE PURCHASE PRICE?
The remaining balance of the purchase price (in the sum of PhP 232,920,000.00) was supposed to be applied as payment for the disturbance compensation of the farmers-beneficiaries who were occupying portions of Plaintiff’s properties and the development of their relocation site in the area covered by TCT Nos. T-44634 and T-44648. There is no showing that RGVDC complied with this provisions.
REPLY:- Identical Special Power of Attorney were separately executed and approved by GDI and BBLFI in favor of RGVDC authorizing and empowering the latter, among others, “ to pay and settle the disturbance compensation, legitimate claims and other related expenses of the occupants, tenants presently occupying the parcels of land covered by TCT No. T-44634 and T-44648”. For the record, RGV had already paid and disbursed PhP 100,333,245.00 and acknowledged by GDI per MOA dated July 23, 1999. Further, GDI acknowledged that RGV had already paid an additional amount of PhP 7,253,245.00, as follows.
Partial settlement of legitimate claims of P4.133,349.00
farmer-beneficiaries occupying TCT
T-41389 (Actual Area Occupied:
758,583 sq.m. x P100/sqm. =
Php 75,885,300.00)
Partial settlement of legitimate claims of 3,119,896.00
farmer-beneficiaries occupying TCT Nos.
T-44634 and T-44846 (Actual areas
occupied: 13,081 sq.m. x P 100 per sq.m.
P 41,308,100.00) ------------------
P7,253.245.00
Other payments for the conversion, approval of the Municipality of Nasugbu, and legal fees are not yet included.
Main reason why the payment to the tenants had stopped and the budget for the development of the relocation site as approved by the Municipality of Nasugbu in the grant of the Development Permit was in view of the treacherous twist of event.
b. Compliance with the prestations in the MOA regarding the payment of the disturbance compensation of the farmers-beneficiaries and the development of the relocation sites had not yet been complied with at the time of the execution of the Deed of Absolute Sale on August 5, 1999 by GDI in favor of Monterorrsa. This only proves that the price or consideration in the Deed of Absolute Sale was simulated.
REPLY: With the agreement by both parties on the appropriation/allocation and disbursement of the entire sales proceeds as provided for in the MOA, the monetary obligation of RGVDC to GDI is deemed fully settled and paid. Therefore, the enabling Deed of Absolute Sale in favor of RGVDC or its Nominee, Monterrosa, was executed and finalized. the sale to Monterrosa was duly covered by a Resolution of the Board of Directors of GDI which is an essential documents required by the Bureau of Internal Revenue (BIR) and the Registry of Deeds in the registration and transfer of the title from GDI to Monterrosa. The documents will speak for themselves.
It should be clear that RGV, in extending assistance to GDI and the Puyat Group, had redeemed the properties from foreclosure, which include the title covering the property in question. Moreover, various documents and agreements with the tenants and their lawyers have been executed and reported to the Puyat Group
c. To date, RGVDC and/or Monterrosa have not complied with said prestations in the MOA. Despite the testimony of GDI’s witness of such non-compliance, they did not adduce any proof that they have fulfilled their part of the obligation. In fact, in the Deed of Assignment dated September 7, 1999 executed between CSTI and RGVDC, the latter made the same undertaking to clear the subject property from squatters, occupants and tenants and to settle their claims and subsequent relocation. From the testimony of the witness of Monterrosa and AFPRSBS, this was not complied with.
REPLY:
RGVDC had been submitting reports to GDI as well as CSTI and AFPRSBS. Example, June 8, 2007 report (copy enclosed) addressed to CAPT. RODERICK A LUNA, Head, REMD, AFPRSBS forwarding photocopies of RGVDC’s Answer in Civil Case No. 9888 together with accompanying attachments, as follows:
Secretary’s Certificate dated May 29, 2007
Official Receipts of Realty Taxes paid by Monterrosa Development CorporAtion covering the Year 2006 and first quarter of 2007
MOA between GDI and RGVDC dated July 23, 1999
Resolution No. R-68 Series of 1999 confirming and endorsing the Subdivision Development of the Relocation Site for the tenants-occupants
Certificate of Zoning Compliance
Development Permit or the 51 Has. Relocation Site
Resolution of the Sangguniang Bayan of Nasugbu, approving the Application of Subdivision and Development of Relocation Site
Subdivision Approval
Further, RGVDC conveyed to AFPRSBS the verbal assurance of Ms. Herminigilda S. Macalalad, Senior Vice President-Finance and Administration for the amicable settlement of the case.
Said letter was received by AFPRSBS on June 8, 1999.
d. The Court emphasized that the prestations in the MOA form part of the consideration for the purchase of the subject property. Verily, they comprise the bulk of the purchase price. Effectively, non-compliance thereof constitutes non-payment of the full-purchase price and a breach of contract on the part of RGVDC.
REPLY:
GDI had consented and approved to the allocation/appropriation of the balance of purchase price for the settlement of the legitimate claims of farmers-beneficiaries, the development of the 51-ha. Relocation Site and the orderly transfer of said farmers-beneficiaries thereto, the disbursements of which GDI had duly entrusted, empowered and authorized RGVDC.
There is no defined timeframe as to the completion and delivery of the prostrations of RGVDC particularly in the settlement of the legitimate claims of the farmers-beneficiaries and their orderly transfer to the designated Relocation.
RGV had obtained all the necessary permits, clearances and approvals for the subdivision and development of the Relocation Site. RGV had to cease negotiation with the farmers-beneficiaries and the development of the Relocation arising from the coverage under CARP of TCT T-44634 and the subsequent issuance of the CLOA to some 33 farmers-beneficiaries as well as the fraudulent sale of TCT No. T-44648.
The designated 51-Ha. Relocation Site is adequate to fully satisfy the legitimate demands for farmlots and homelots by the estimated 219 farmers-beneficiaries.
2. ARE THERE VALID GROUNDS TO RESCIND THE MOA DATED JULY 23, 1999 EXECUTED BETWEEN GDI AND RGVDC AND THE DEED OF ABSOLUTE SALE DATED AUGUST 5, 1999 EXECUTED BY GDI IN FAVOR OF MONTERROSA?
a. The Court cited the case of Rido Montecillo vs. Ignacio Reyes, et al., G.R. No. 138018, July 26, 2002, which held and expounded that failure to pay the purchase price amounts to a breach of obligation for which rescission of the contract is a proper remedy. The Court ruled that there was failure on the part of RGVDC and Monterrosa to pay the full purchase price which entitles GDI to the rescission of the contracts.
REPLY: Already answered above.
3. IS AFPRSBS AN ASSIGNEE IN GOOD FAITH?
a. By virtue of Deeds of Assignment executed on September 7, 1999, RGVDC conveyed the property in favor of Monterrosa barely one month after the execution of the Deed of Absolute Sale dated August 5, 1999. To the mind of the Court, the conveyance and transfer of the property was tainted with fraud, with the intent of making the property beyond the reach of GDI. The Court concluded that with the property now conveyed to AFPRSBS, it becomes more arduous for GDI to run after the Property and have it reconveyed in its favor.
REPLY:
By virtue of the Deed of Absolute Sale duly executed by GDI on August 5, 1999, it has sold, transferred, conveyed and delivered the property in favor of Monterrosa by way of absolute and unconditional sale. GDI has already subrogated all its rights and interests over the subject property.
b. The Court ruled that AFPRSBS cannot feign ignorance of the non-compliance by RGVDC of the prestations in the MOA with GDI because it is precisely the same undertaking embodied in the Deed of Assignment executed between CSTI and RGVDC on September 7, 1999.
REPLY:
Precisely, the Deed of Assignment mandated RGVDC to clear the 150-Ha. Property of its existing tenants-occupants. At the time of the execution of the said document, RGV had inked an agreement with the tenants-occupants, thru their Attorney-in-Fact, for the settlement of their legitimate claims. Further, there was green light on the issuance of the clearances and approval by the Municipal Government of Nasugbu with respect to the development of the relocation site.
c. The Court concluded that AFPRSBS was not in good faith it being aware that RGVDC did not comply its prestations forming part of the purchase price of the Property. Further, in merely stepping into the shoes of RGVDC, AFPRSBS had not acquired a better right than that of RGVDC.
REPLY:
On the contrary, AFPRSBS is fully aware of the compliance by RGV of its prestations particularly the Agreement reached with the 208 farmers-tenants thru their Attorney-in-Fact and the obtaining of clearances and approvals issued by the Municipality of Nasugbu. Already mentioned herein was the letter of RGVDC to AFPRSBS dated June 2007 wherein the latter was supplied with the pertinent documents and instruments relating to the performance and delivery by RDVDC of its prestations.
d. Notwithstanding the findings of the Court that AFPRSBS is not an assignee in good faith, RGV and RGVDC are nevertheless liable to return to AFPRBS the proceeds of the 120 condominium units under the principle of unjust enrichment.
REPLY:
It is GDI and BBLFI who should be held liable not RGV. The latter complied with its prestations. Fact is, it has reached an agreement with the tenants-farms thru their Attorney-in-Fact for the settlement of their legitimate claims, Further, RGV obtained all the necessary clearances and approvals from the Municipality of Nasugbu for the consolidation and development of the two (2) parcels supposed to be designated for relocation site. By sheer treachery, GDI allowed it to have its lot acquired and covered by CARP while BBLFI fraudulently sold the other lot using a manufactured owner’s duplicate copy of the title of the other lot. With the two (2) lots getting out of the hands of RGV, the requirement for the relocation site cannot be completed and delivered.
CASE STATUS
Court of Appeals, G.R. CV No. 109243, Eight Division
a. 29 April 2019, filed Manifestation with Motion for Reconsideration
b. 28 August 2019, filed Supplement to the Motion for Reconsideration together with Exhibits “A” to “I”
2. Criminal Complaint, Office of the City Prosecutor of Makati, NPS Docket No. XV-05-INV-19B0618, “Rodolfo G. Valencia v. Gil Miguel T. Puyat, et al” for Violation of Art. 315(2)(a) and 172, Revised Penal Code; and Sections 117 and 118, Act No. 496: Pending Resolution.
IN RETROSPECT
RGV’s Proposed Solution
Until greed got the better of several members of the Puyat clan, things were looking good for them, for RGV and their business partners, and even the farmer-beneficiaries. True to his reputation for thinking out of the box in coming up with approaches to real estate development and marketing for the benefit of his clients, RGV had again come up with what was clearly a win-win solution for all parties concerned with regard to the Batulao Estates.
Here were two separate entities (BGRMI/GDI and RSBS) with real estate problems that were totally unrelated to each other. The only thing they had in common was that they both knew RGV and asked him each for his help. Using his experience and expertise, RGV was able to come up with a creative solution that would yield positive results for both entities by using each one’s resources to generate reciprocally beneficial results.