Court of Appeals orders 'RJ' to return Makati property to PNB

MANILA, Philippines - The Court of Appeals (CA) has ordered the return to the Philippine National Bank (PNB) of an 8,000-sq. meter land earlier bought by singer - businessman Ramon “RJ” Jacinto in Makati City after he failed to settle his loan amounting to over P6 billion for the purchase.

In a 31-page decision, the eighth division of the appeals court reversed an earling resolution of the Makati regional trial court Branch 132 last March 10 ordering PNB to return to Jacinto the property located at Gil Puyat Ave. (formerly Buendia Ave.) corner Paseo de Roxas St.

The CA also restored the bank’s possession over certain properties in Tagaytay owned by RFR Development Corp. that were used by Jacinto as collateral for his loan.

Upon review, the CA ruled that RTC Judge Rommel Baybay erred in granting the petition of Jacinto’s RJ Ventures Realty Development Corp. and Rajah Broadcasting Network, Inc. seeking reclamation of both Makati and Tagaytay properties.

“The Court is simply perplexed as to how the respondent court (Makati RTC Branch 132) could have ordered the restoration of possession of the Buendia and Tagaytay properties which have already been foreclosed by petitioner bank, in its assailed writ of execution, issued on March 10, 2009,” stated the ruling penned by Associate Justice Romeo Barza.

The lower court issued the writ of execution based on the final and executory decision of the Supreme Court last Sept. 27, 2006 in the same case, according to the CA.

In the said ruling, the SC affirmed CA’s earlier reinstatement of the writ of preliminary injunction issued on May 28, 1999 by another Makati court, RTC Branch 66, enjoining PNB from “foreclosing all collaterals pledged or mortgaged” by the two firms of Jacinto.

But the CA explained that the SC ruling covered only the broadcasting equipment of Rajah Broadcasting Network in several parts of the country and not the Buendia and Tagaytay properties.

“There was nothing in the said Supreme Court decision, nor from the said decision of this Court, about the restoration of possession over the Buendia property to the RJ Ventures nor of the Tagaytay properties to RFR Development Corporation,” the CA said.

It noted that the SC ruling was clarified by Judge Joselito Villarosa, of Makati RTC Branch 66, when he denied the motion of Jacinto and RFR Development Corp.’s motion to issue writ of execution to get back the Buendia and Tagaytay properties.

Records show that in 1996, First Women’s Credit Corp. (FWCC) won the bid on the sale of the Buendia property at the bid price of P3.68 million but due to its inability to come up with the entire purchase price, FWCC applied for financing with PNB.

Before the loan of FWCC was approved by PNB, however, FWCC assigned all its rights, claims, interest and title over the Buendia property to RJ Ventures, which in turn assumed the right to purchase the Buendia property and the obligations of FWCC to pay PNB the balance of the purchase price.

In order to pay for the balance of the purchase price, RJ Ventures obtained a loan from PNB in the amount of P2.94 billion, equivalent to 80 percent of the purchase price, with the Buendia property as security.

However, before granting the loan, PNB required RJ Ventures to deposit an additional 10 percent, or P368 million, as downpayment.

In order to pay the additional downpayment, Rajah Broadcasting borrowed P350 million from PNB for re-lending to RJ Ventures, which was secured by a pledge consisting of 70 percent shares of stock in Rajah Broadcasting and 40 percent shares of stock in FWCC.

In addition, Rajah Broadcasting secured another loan from PNB in the amount of P100 million, which was secured by broadcasting equipment of the radio network, and a real estate mortgage over certain properties in Tagaytay of RFR Development, which held itself out as “accommodation mortgagor.”

Subsequently, PNB demanded from the two firms the payment of P5.40 billion and P841,46 million, respectively.

For failure of RJ Ventures and Rajah Broadcasting to pay their loans, the bank instituted foreclosure proceedings for the Buendia and Tagaytay property.