Prime SRP lot up for sale as City Hall seeks court delay

Posted on April 10, 2012

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Barring a last-minute miracle, the public auction of about 9.7 hectares of the South Road Properties (SRP) will push through today to pay for the P130 million owed by Cebu City to the Rallos heirs.

Bidders will be entertained from 10 a.m. to 2 p.m. at the Sheriff’s Office located at the ground floor of the Palace of Justice.

Only a Temporary Restraining Order (TRO) from the court can stop the public auction, sheriff Eugenio Fuentes said.

Cebu City Hall filed the TRO petition before the Court of Appeals last Tuesday.

Proceeds will be given to the heirs of Rev. Fr. Vicente Rallos whose property in barangay Sambag II was expropriated by the city for a road in 1963.

Roy Rallos, one of the grandchildren of Fr. Rallos, said he will be among the bidders.

He said other claimants want money as payment from the city since most of them are already old.

“But I prefer to get a portion of the SRP so I’ll be the one to decide what to do with the lot,” Roy told Cebu Daily News.

‘No legal effect’

The 9.7-hectare lot will be awarded to the highest bidder.

The 9.7-hectare lot, which forms part of the P25-billion joint venture (JV) agreement between Cebu City and Filinvest Land Inc., was placed under auction after Cebu City Hall refused to pay at least P133 million to the Ralloses.

Lawyer Jade Ponce, one of Cebu City Mayor Michael Rama’s consultants, said the auction has no legal basis or effect.

“Such act would be a mere public charade and useful only for everyone’s amusement or coffee shop talk,” Ponce said.

Ponce said the sheriff should comply with Supreme Court Administrative Circular No. 10-2000 that mandates all monetary claims against the government to be filed before the Commission on Audit (COA).

Ponce said an auction of the SRP lot shall be coursed through COA before it will be implemented.

“We have the law on our side. I’m just curious why he won’t bring up the matter to COA. Why can’t just they follow the law?” he said.

Ponce also said the city government should have been given the the option to choose which real property to be auctioned. “It is not up to the sheriff,” he said.

Storage room

Last March 28, Mayor Rama filed an administrative case against Fuentes before the High Court for being hasty in enforcing the court order for Cebu City to pay at least P133 million to the Rallos heirs.

Ponce said Fuentes’ decision to hold an auction of a part of the SRP violates an Oct. 26, 2011, ruling of Regional Trial Court Judge James Stewart Ramon Himalaloan who ordered the sheriff to comply with Supreme Court Administrative Circular No. 10-2000.

When asked if he will attend the auction today, Ponce said, “What for?”

Roy Rallos said he intends to construct a “bodega” or storage room for rent at the SRP if he wins in today’s auction.

But if he will lose, he said it would be all right since he will have his share of the proceeds since he is one of the 29 claimants.

Under the Rules of Civil Procedure, “all sales of property under execution must be made at public auction, to the highest bidder, to start at the exact time fixed in the notice.”

Fuentes said those who wish to purchase the auctioned lot have to submit their respective bids today.

Third-party claim

Fuentes said a Certificate of Sale will be awarded to the winning bidder who shall pay for the subject lot as well as a government commission.

The lot at the SRP was supposed to be auctioned off last December 2011.

However, it didn’t push through after the Ralloses declined to pay the P1.2-billion indemnity bond sought by Filinvest, which filed a third-party claim.

The amount represents Filinvest’s development costs for the lot.

The amount will be set aside in case Filinvest seeks legal action in the future.

But the sheriff set aside the third-party claim of Filinvest, paving the way for today’s auction. Fuentes said auctions doesn’t have to be coursed through COA.

He earlier said the city government should have chosen the properties to be auctioned off.

But since it did not, it prompted sheriff Antonio Bellones to choose the lot at the SRP upon the recommendation of the Ralloses.

Ignored

Bellones was the former sheriff assigned to implement the court order but he retired last year.

City officials, through former Cebu City councilor Jocelyn Pesquera, discovered last year an old convenio or compromise agreement between feuding descendants of the Rallos family in the 1940s.

The agreement would purportedly prove that the city government need not pay for a lot that was supposed to be donated by the Ralloses to the local government unit.

But the court ignored the papers. City lawyers mentioned about the convenio only during a hearing last year.

Judge Himalaloan said the agreement isn’t considered a “supervening event that transpired after judgement of the case which became final and executory.”

Notices of Garnishment were also sent to the city’s depository banks like the Development Bank of the Philippines.

Notices were also sent to SM Prime Holding Inc., SM Development Corp. and SM Investments Corp. at their offices in the Mall of Asia Complex in Pasay City, Metro Manila.

‘Too much risk’

For his part, Rep. Tomas Osmeña of Cebu City’s south district said the city may be sued by Filinvest if the bidding for the SRP lot turns out successful.

He said part of the city’s assurance to Filinvest was to ensure the land titles should be free and clear of liens and encumbrances.

“It is very bad . . . We (Cebu City) will lose our reputation of selling our properties,” Osmeña said.

In a phone interview, Osmeña said the city should pay the Ralloses P133 million so that the city’s joint venture property with Filinvest won’t have to go through with the bidding.

“Pay them. They have waited 10 years for that and now they have found an opportunity to attach the property (to the case). A big legal company in Manila is backing the Ralloses. The risk is too much,” he said.

During Osmeña’s term as mayor, the Ralloses agreed to a P34 million payment on installment basis and without interest.

Rama who was then the city’s vice mayor said the city should fight the family’s claim in court.

Among the investors who already poured in their investments in SRP are Filinvest, SM and Bigfoot.

Osmeña said the value of the property would reach P4 billion in the next three years once SM sets up their mall in the SRP.

The SM mall would be just as big as the Mall of Asia in Manila considered as among the biggest in Asia, the congressman said.

Osmeña said the value of the properties will be at par with Ayala and IT Park. /Ador Vincent Mayol and Marian Z. Codilla

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