Real estate firm asserts claim over 9.7-hectare lot in Cebu

Friday, December 2, 2011

CEBU CITY – Filinvest Land Inc. (FLI) has formally asserted its ownership of a 9.7-hectare lot at the South Road Properties (SRP) in Cebu City, which is being eyed by the Rallos heirs as payment of the City to satisfy the P133-million monetary award for the use of their lot.

Court sheriff Eugenio Fuentes Jr. confirmed Thursday that FLI filed last week a third-party claim or a formal claim asserting a right to possess the property that is subject for public auction next week.

With the filing of the formal claim, Fuentes said he would require the Rallos heirs to put up P1.2 billion as indemnity bond, which will serve as a guarantee for any damage that the December 13 public auction of the 9.7-hectare SRP lot may cause.

If the Ralloses fail to post the indemnity bond by December 12, the public sale of the property will not push through, Fuentes said.

The amount represents the estimated cost of the development that Filinvest will undertake in the SRP.

The Rallos heirs chose the 9.7-hectare SRP lot as the City's payment for the P133-million judgment debt, said Fuentes.

The lot owners picked the property apparently because of its high commercial value, and because they believe that the property forms part of the 50.6-hectare residential and commercial development project of Filinvest.

Filinvest purchases a 10.6-hectare lot in the SRP and is developing another 40 hectares under a joint venture agreement with the City Government.

Earlier, though, a Filinvest representative dismissed the idea that the properties they are developing are the same properties referred to by the heirs of Fr. Vicente Rallos, which will be auctioned off on December 13.

The Rallos heirs want the sheriff to implement the notice of garnishment against the City's properties, after Judge James Stewart Ramon Himalaloan ordered City Hall to pay the Rallos heirs P133 million for the 4,654-square-meter lot being used as a road-right-of-way in Barangay Sambag II.

In an interview Thursday, Fuentes said the rules of court will have to be observed before the scheduled auction can be cancelled.

Under Rule 4 of the Revised Rules of Court of the Philippines, the law provides that all proceedings, including the execution or auction sale of a property, shall automatically be suspended if the third party claim is found to be valid.

The arbitrator who issued the writ of execution shall conduct a hearing with due notice to all parties concerned, and resolve the validity of the claim within 10 days from receipt of the notice.

Once the third party claim is declared valid, the sheriff shall immediately release the property to the third party claimant, his agent or representative and the levy on execution shall be lifted.

However, the sheriff shall proceed with the execution of the property levied upon if the third party claim is found to be without factual or legal basis.

Before the sheriff disclosed the filing of Filinvest's third party claim, Judge Himalaloan told the counsels of both parties that his decision to voluntarily inhibit from handling the case stays.

In open court, Himalaloan said he could not yet comment on the City's pending motions that seek to stop the public auction of the 9.7-hectare SRP lot and the reversal of the court ruling denying the City's plea to quash the writ of execution.

RTC Executive Judge Silvestre Maamo has yet to act on the inhibition of Himalaloan, who earlier cited the monthly stipend he is receiving from the City as the reason he is letting go of the Rallos case.

"(Monthly allowance) is enough just and valid grounds for the sitting judge to inhibit himself," said Himalaloan in his two-page order.

City Hall lawyers said the public auction of the 9.7-hectare SRP lot scheduled on December 13 may push through if the court will not resolve their motions immediately.

But Himalaloan said the city lawyers can file pleadings to suspend the public auction.

Himalaloan earlier thumbed down the City's motion to quash the writ of execution and set aside the notice of garnishment issued to satisfy the money award.

With the court's order for the issuance of an amended writ of execution, notices on the execution sale at a public auction were posted by the sheriff inside the Palace of Justice and Cebu Post Office.

The notices indicate that a parcel of SRP lot, which is comprised of 97,621 square meters, or 9.76 hectares, "is for sale at a public auction on December 13."

Fuentes, in the notice, advised prospective buyers, though, to "examine and verify" for themselves for any encumbrance on the property.

Several other court rules cover the garnishment or the public auction of government properties and assets.

Administrative Circular 10-2000 issued by the Supreme Court provides that "judges are hereby enjoined to observe utmost caution, prudence and judiciousness in the issuance of writs of execution to satisfy money judgments against government agencies and local government units."

Presidential Decree (PD) 1445, or the Government Auditing Code of the Philippines, also states that "upon determination of state liability, the prosecution, enforcement or satisfaction must still be pursued."

Sections 49-50 of PD 1445 further provides that all money claims against the government must be filed first with the Commission on Audit, which is mandated to act on the matter within 60 days.

If rejected, the claimants may file a petition with the High Court via certiorari.

Meanwhile, Mayor Michael Rama and the department heads conducted an ocular inspection of the Rallos property on Thursday, and saw that several houses stand on a portion of the lot that is now being used as a road-right-of-way. The city officials saw that there were houses built on the lot that is now the main road in Sambag II, and were told that the housing project was initiated by Pagtambayayong Foundation Inc.

Rama refused to confirm the involvement of Pagtambayayong, which is headed by former city administrator Francisco Fernandez, an ally of Representative Tomas Osmeña (Cebu City, south district).

When Fernandez heard about the matter Thursday, he immediately sent his staff to the site to investigate it.

He later confirmed that Pagtambayayong helped the urban poor group Hiniusang Kusog sa mga Kabus Inc. (HKKI) to build their houses in the area near the Rallos lot in 1988, through the community mortgage program (CMP).

"They own the titles to the lot but some encroached on the road," Fernandez said.

The lots where the houses stand were purchased from the Cuenco family.

The properties are beside the Rallos lot but Fernandez admitted that there are "a few houses" that encroached on the subject road lot.

"It was surveyed and the people know the boundary. So I have no objection as to what the City will do to those who encroached because they (urban poor) know the boundary," he told Sun.Star Cebu.

While some houses encroached on the road, the entire house does not stand on the road lot, which means that no one will be displaced in the event the City clears the road.

HKKI has 111 members but Fernandez does not have the number of families living in the area near the Rallos property.

Rama brought the department heads and lawyers from the City Legal Office so they would know the situation in the area.

He said he has asked Division for the Welfare of the Urban Poor (DWUP) Chief Collin Rosell to investigate the matter.

"Many have occupied (part of the property) some years ago and I have asked Attorney Rosell to look at both sides because of reports that an organization is responsible for (the houses) being there," said Rama. (GMD/JGA of Sun.Star Cebu)

Published in the Sun.Star Cebu newspaper on December 02, 2011.