Prietos get to keep Mile Long, etc., for now

THE Court of Appeals (CA) has junked the bid of the government to immediately take possession of the 2.9-hectare property in Makati City that the state claimed is being illegally occupied by Sunvar Realty Development Corp., a developer owned by the Rufino and Prieto families, for more than 13 years already.

In a nine-page resolution penned by Associate Justice Jose C. Reyes Jr., the CA’s Fifth Division junked the application for the issuance of temporary restraining order and/or a writ of preliminary injunction filed by the government and National Power Corp. through the Privatization Management Office (PMO).

The injunction sought was intended to prohibit the Regional Trial Court (RTC) in Makati City Branch 58 from further hearing the petition for injunction filed by Sunvar against the government.

Sunvar filed the petition for injunction before the RTC Branch 58 in Makati, seeking to stop the execution of the decision rendered by the Metropolitan Trial Court (MTC) in Makati City Branch 61 on June 10, 2015.

In the said decision, the MTC granted the complaint for ejectment filed by the government against Sunvar and ordered the firm to vacate the 2.9-hectare property located between De la Rosa and Arnaiz streets and parallel to Amorsolo Street in Legazpi Village.

The MTC also directed Sunvar to pay the government back rentals as of May 2015, amounting to P478.2 million, with monthly rental of P3.2 million beginning June 2015, until it vacates the premises.

The government elevated the issue before the CA, after the RTC in Makati denied its petition seeking the dismissal of the petition for injunction filed by Sunvar.

The petitioners insisted that the RTC in Makati should have dismissed Sunvar’s petition on the ground of forum shopping. By taking cognizance of Sunvar’s petition, the government said the RTC in Makati has caused the delay only in the final resolution of the case.

“Private respondent’s continued possession, up to this day, without payment of rental or any other kind of consideration, is a blatant display of public respondent’s utter disregard of petitioner’s rights over their property, which has caused losses to the government, not only in the hundreds of pesos but in the hundreds of millions of pesos. These earnings would have benefited many and not just one family,” the government said.

However, the CA said the government failed to present arguments that would warrant the issuance of the TRO or a writ of preliminary injunction against the RTC in Makati.

It also did not give credence to the government’s claim that its right to speedy disposition of the case has been violated. “In this case, petitioners failed to show that the petition for injunction, or the appeal filed by private respondents, is capricious, vexatious or oppressive. A reading of the various pleadings filed before the public respondent RTC shows that there are legitimate issues to be resolved in both the petition for injunction and appeal…,” the CA pointed out.

Among the issues that the RTC should resolve, according to the CA, is the propriety of the MTC’s jurisdiction to hear the complaint for ejectment despite the existence of an arbitration clause in RA 876, or the arbitration law; the determination of reasonable compensation; whether or not private respondent was a builder in good faith; and the amount of reimbursement for improvements introduced, if proper.

“Finally, we find petitioners’ arguments that they and even the Filipino people would suffer irreparable injury if possession of the subject property would not be given to them, to be without basis,” the CA said,

It explained that since that the merits of the case are still on appeal, if petitioners would later get a favorable ruling, any damage petitioners may suffer can be easily subject to computation and can be fully compensated by damages.

Concurring with the ruling were Associate Justices Stephen Cruz and Ramon Paul Hernando.

In its complaint for ejectment, the government and the National Power Corp. (Napocor)  accused Sunvar Realty Development Corp. of refusing to vacate the subject property despite the lapse of the ultimatum given to it.

The said property is at present being leased out by Sunvar to the operators of Premier Cinema, Mile Long Arcade, Makati Creekside Building, The Gallery Building and Sunvar Plaza. Other portions of the subject property, however, remain as open spaces, profitably utilized as parking area for customers and guests.

Based on the complaint, the government and Napocor coowned the subject property on an 80-20 percent sharing.

On December 26, 1977, plaintiffs leased the property to the Technology Resource Center Foundation Inc. (TRCFI) for a period of 25 years, beginning January 1, 1978 until December 31, 2002, renewable for another 25 years upon mutual agreement of the parties.

Over the years the TRCFI subsequently leased a  portion of the property located between De La Rosa Street and Arnaiz Avenue  (formerly Pasay Road)  to Sunvar Realty under a sublease agreement.

In all the agreements between Sunvar and TRCFI, Sunvar agreed to return or surrender the subleased land, without any delay whatsoever, upon the termination or expiration  of the sublease, contract or any renewal or extension when the agreements expired on December 31, 2002.

During the period of its sublease, Sunvar put up commercial buildings and establishments and introduced several improvements on the property.

Following a reorganization of the government, TRCFI was dissolved and was replaced by the Philippine Development Alternatives Foundation (PDAF), which assumed all the functions of TRCFI.

On June 3, 2002, Napocor notified PDAF of its decision not to renew the contract of lease.

For its part, the government informed PDAF, through a memorandum issued on June 13, 2002, of its decision not to renew the lease contract on the ground that both of them had earlier entered into an agreement to shorten PDAF’s corporate life and cause the transfer of its assets to the government for the purpose of selling it to raise much-needed funds.

Subsequently, the government and Napocor transferred the subject property to PMO for disposition.

On February 22, 2008, the government advised Sunvar to completely vacate the subject property within 30 days, or it will take legal action against before the court.

Sunvar, however, refused to vacate, and continued to remain on the subject property. On February 3, 2009, respondent Sunvar received a final notice to vacate within 15 days. But when the date arrived, it again refused to vacate the property and continued to occupy it.

On July 23, 2009, petitioners filed the complaint for unlawful detainer with the MTC in Makati,  praying that Sunvar be ordered to vacate the subject property and to pay damages for the illegal use and lost income.