CA: Makati RTC had no jurisdiction over 'Mile Long' case

Ina Reformina, ABS-CBN News

Posted at Jul 20 2017 02:21 AM | Updated as of Jul 20 2017 04:45 PM

MANILA - (UPDATE) The Court of Appeals upheld its decision that a Makati City court had no authority rule on the ownership of a commercial property in the financial district.

The Makati court had stopped Sunvar Realty, owned by the Prieto and Rufino families, from vacating the 2.9-hectare Mile Long compound.

The property was the subject of several speeches by President Rodrigo Duterte, accusing the families, who are also majority stakeholders in the Philippine Daily Inquirer, for alleged tax evasion and non-payment of rentals due government. 

The government and the National Power Corp, the registered owners of the property, went to the appellate court after the Makati City RTC Branch 59 denied their plea for the dismissal of Sunvar’s petition.

Sunvar sought to stop the execution of an order by the Makati City Metropolitan Trial Court (MeTC) Branch 61 in June 2015 for it to vacate the property and pay government back rentals amounting to P478.20 million, with monthly rental of P3.21-million starting June 2015 until the property is vacated. 

The Makati RTC, on August 13, 2016, issued a temporary restraining orderto stay the MeTC’s order.

In a six-page resolution penned by Associate Justice Jose Reyes, Jr., the appellate court’s former Fifth Division junked Sunvar’s motion for reconsideration of its January 26, 2017 ruling dismissing one of two civil cases filed by Sunvar to prevent from ejecting "Mile Long." 

"We adhere to our earlier finding that the RTC of Makati City, Branch 59 has no jurisdiction to take cognizance of the petition for injunction to enjoin the implementation and execution of the decision of the MeTC of Makati City, Branch 61,” the resolution read.

The CA added that the execution of the MeTC order may only be stayed upon the filing of a bond duly approved by the MeTC, and the accruing rentals deposited. 

Government leased the subject property to the Technology Resource Center Foundation, Inc. (TRCFI) for 25 years from January 1, 1978 up to December 31, 2002, renewable for another 25 years. 

TRCFI leased a portion of the property to Sunvar, under a sublease agreement. When all agreements shall have expired on December 31, 2002, Sunvar agreed to return the property. 

TRCFI was later dissolved and replaced by the Philippine Development Alternatives Foundation (PDAF), which was informed by Napocor on June 3, 2002 of the latter’s decision not to renew the lease.

Sunvar was informed of the decision and advised to vacate the property; a final notice to vacate was issued on February 3, 2009. 

Sunvar did not vacate the premises, leading government to file a case for unlawful detainer with the Makati City MeTC in July 2009. 

SUNVAR'S SIDE

The developer issued a statement on Thursday, detailing "facts" of the case:

- The Napocor and the government leased the propert in December 1977. The developer only wanted to sub-lease 3,000 square meters bu the Technology Resource Center Foundation Inc "inisisted" on leasing the entire 22,924-square meter property.

- Sunvar agreed to the "all-or nothing" sub-lease agreement even if the expanded hectarage did not improve its access to the property.

- Sunvar paid TRCFI the full advance of P16.8 million to cover the entire lease period, an initial period of nearly 25 years, renewable for another 25 years at Sunvar’s exclusive option.

- The sub-lease agreements between Sunvar and TRCFI provided that should Sunvar decide to exercise the option to renew the sublease, it shall notify the lessor in writing not less
than 6 months before end-2002. Last April 2002, 8 months before the first 25 year lease expired, Sunvar notified Napocor, the government as well as TRCFI on exercising its exclusive option to extend the lease for another 25 years.

- Sunvar likewise tendered payment of rentals for the extended period.

- Napocor informed PDAF of the non-renewal of the sub-lease. PDAF subsequently informed Sunvar. Sunvar responded that Napocor and the government must honor the lease agreement contract.

- The lease price paid by Sunvar is more than fair, around equal to
purchasing the property at the time

- The occupants on the government-owned 125,000 sq. m. property include not only Sunvar but also Ecology Village residents; Makati police headquarters, fire station and post office; Don Bosco parking lot; and informal settlers.