The Supreme Court has affirmed the right of RII Builders, Inc. to institute before the Quezon City regional trial court the recovery from the Home Guaranty Corporation and the National Housing Authority of the more than P4 billion, in connection with the Smokey Mountain Development and Reclamation Project (SMDRP) in Manila.
In a resolution, the SC’s first division dismissed the petitions filed by HGC and NHA, which challenged the Court of Appeals decision that reversed the ruling of the Quezon City regional trial court in 2012.
Petitioners (HGC and NHA) failed to sufficiently show that the Court of Appeals committed reversible error in issuing the assailed decision and resolution,” the SC declared.
“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,” it said.
At the same time, the SC junked the claims of both HGC and NHA that the civil case instituted by RII-Builders was the same case the High Court had dismissed in 2011/
The SC noted that in its complaint filed with the Quezon City RTC, R-II Builders submitted three main causes of action (a) 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; (b) 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 (c) the accounting liquidation of the asset pool as necessary consequence of the rescission of the deed of assignment and conveyance.
It stressed that “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.”
Thus, the SC said, “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.”
It also pointed out that the primary objective of R-II Builders is to recover the residual value of the asset pool after its liquidation and the annulment of the instruments in question.
Earlier in 2010, then Vice President Noli de Castro as chair of the Housing and Urban Development Coordinating Council under the Office of the President, had recommended the settlement of the claims made by HGC as subrogee of the Smokey Mountain Asset Pool (SMAP) amounting to P4.7billion.
The recommendation stated that the items of work in SMDRP had been rendered as early 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 1993, the NHA and R-II Builders entered into a Joint Venture Agreement (JVA) for the implementation of the SMDRP.
The JVA was aimed at implementing a two-phase conversion of the Smokey Mountain Dumpsite into a habitable housing project inclusive of the reclamation of the area across radial road (R-10).
In 1994, NHA and R-II Builders, alongside with HGC as guarantor and the Philippine National bank as trustee, entered into an Asset Pool Formation Trust Agreement which provided the mechanics for the implementation of the project.