PSE Circular for Brokers No. 1251-99

May 31, 1999 PSE CIRCULAR FOR BROKERS NO. 1251-99 May 28, 1999 PHILIPPINE STOCK EXCHANGE, INC . PSE Center, Exchange Road Ortigas Center, Pasig City Attention: Ms . Eileen M . Lacorte/Ms . Grace B . De Guia Analyst/Assistant Manager Disclosure Department Gentlemen : This is in response to your facsimile transmission dated May 25, 1999 seeking additional information on the status of the legal proceedings involving some parcels of land intended to form part of Ayala Land's Ayala Southvale project in Las Pias, which was the subject of our May 21, 1999 letter to the Exchange. aisadc 1. Brief Description of the Pending Legal Proceedings Affecting the Property Ayala Land, on its own or through its subsidiaries (hereinafter collectively referred to as "Ayala Land"), owns several parcels of land in Las Pias which are all registered in its name and which are in its exclusive possession. Before acquiring these parcels, Ayala Land and its immediate predecessor, Ayala Corporation, duly ascertained the ownership thereof and determined that, based on the owner's duplicate certificates of title in the possession of their sellers and on the certificates of title recorded with the Register of Deeds, such ownership was free of any adverse claim, lien or encumbrance. However, as Ayala Land began to develop the parcels, certain individuals and entitles have claimed an interest thereon of a nature which is adverse to Ayala Land's interest. Ayala Land has assessed these adverse claims, and has concluded that its titles are in general superior to the purported titles or other evidence of alleged ownership of these claimants. On this basis, beginning in October 1993, Ayala Land filed petitions in local regional trial courts for quieting of title to nullify the purported titles or claims of these adverse claimants. None of these parcels, however, is within the present perimeter of Ayala Land's Southvale project, nor has any of the parcels been offered for sale to the public. cdlex Among the petitions which Ayala Land files to quiet its title are five (5) petitions which were referred to in our letter of May 21, 1999. These petitions are briefly described in the annex attached hereto. 2. Area (in hectares) of the Property The area involved in the petitions for quieting of title which have been referred to in the annex is approximately 101 hectares representing approximately 2.5% of Ayala Land's total landholdings. 3. Approximate Market Value of the Property In as much as the area involved in the various petitions for quieting of title which Ayala Land has filed commencing 1993 consists of partially developed and undeveloped parcels and none of these parcels has been offered for sale to the public, we cannot estimate their aggregate market value. 4. Possible effects on the financial condition and investment value of Ayala Land We wish to reiterate our opinion stated in our letter of May 21, 1999 that even in the event that the courts should adversely decide the various cases referred to in the annex against the Ayala Land, the company and its officers believe that this development will not materially affect the soundness of the financial condition of Ayala Land and its investment value. Very truly yours, (SGD.) JAIME E. YSMAEL Vice President and Corporate Information Officer Annex to the Disclosure Letter Addressed to The Philippine Stock Exchange, Inc. May 28, 1999 Brief Summary and Discussion of the Petitions for Quieting of Title Involving Certain Parcels of Land Comprising Ayala Land's Landholdings in Las Pias Between the period from 1993 to 1997, Ayala Land was prompted to file petitions to quiet its titles vis-a-vis the overlapping titles or adverse claims made by third parties on its property in Las Pias. Ayala Land has received favorable decisions in certain of these cases. LLcd The following petitions are those involved in the appeal proceedings referred to in our letter of May 21, 1999: a. Ayala Land, Inc . v . Heirs of Gerardo Ledonio, et al Civil Case No . 94-1432, filed in 1994 Regional Trial Court, Las Pias, Branch 275 This is a petition filed by Ayala Land to quiet title to a portion of its property which has an area of 152,454 square meters and which is covered by TCT No. T-5331. The petition is grounded on the fact that respondents' titles, which present adverse claims to portions of Ayala Land's aforesaid property, were derived from an OCT which was issued much later than the OCT from which Ayala Land's title was derived. Trial ex parte was conducted as to a number of defaulted respondents, and a Partial Decision has been rendered in Ayala Land's favor. As to the remaining undefaulted respondents, further proceedings have not ensued in view of a number of unresolved incidents. b. Ayala Land, Inc . v . Commercial House of Finance, Inc . , et al . Civil Case No . 94-467, filed in 1994 Regional Trial Court, Las Pias, Branch 275 This petition is grounded on the fact that some respondents' titles, which present adverse claims to portions of Ayala Land's aforesaid property, were derived from either OCT No. 8510 or OCT No. 6190, which were both issued much later than OCT No. 1609 from which Ayala Land's title was derived. In the petition, Ayala Land also contend that the other respondents' titles are fake or spurious. Cdphil Pre-trial has not yet ensued in view of a number of unresolved incidents. C. Ayala Land, Inc . v . Marietta Valisno, et al . Civil Case No . 93-3685, filed in 1993 Regional Trial Court, Makati, Branch 56 (0001 . 10 . 11) This is a petition filed by Ayala Land to quiet title to portions of its property which have a total area of 218,523 square meters and which are covered by TCTs Nos. T-15643 and T-15644. The petition is grounded on the fact that the OCTs from which respondents' titles were derived (and which present adverse claims to portions of Ayala Land's aforesaid property) were issued much later than the OCT from which Ayala Land's titles were derived. While the pre-trial stage has been reached, it cannot yet ensue in view of a number of unresolved incidents. d. Ayala Land, Inc . v . Celeste Realty, Inc . et al . Civil Case No . 94-468, filed in 1994 Regional Trial Court, Makati, Branch 64 This is a petition filed by Ayala Land to quiet title to portions of its property, which have a total area of 15,756 square meters and which are covered by transfer certificates of title ("TCTs") Nos. T-36975, T-36976, T-36977, T-36978, T-36979, T-36980, T-36982 and T-36983. The petition is grounded on the fact that some respondents' titles, which present adverse claims to portions of Ayala Land's aforesaid property, were derived from original certificates of title ("OCTs") which were issued long after the OCT from which Ayala Land's titles were derived. The petition also contends that some respondents' titles are fake or spurious. Trial pends as to respondent National Tobacco Administration, while we have all but concluded presenting evidence ex parte against several other defaulted respondents. e. Ayala Land, Inc . v . Marietta Valisno Civil Case No . LP-97-0058, filed in 1997 Regional Trial Court, Las Pias, Branch 253 This is a petition filed by Ayala Land to quiet title to portions of its landholdings which have a total area of about 32 hectares and which are covered by TCTs Nos. T-41262 and T-41263 issued in Ayala Land's name. The petition is primarily grounded on the fact that the OCT from which the respondent's own TCT derives (and which present adverse claims to portions of Ayala Land's aforesaid landholdings) was issued much later than the OCT from which Ayala Land's titles derived. Ayala Land also assails respondent's title as having, been spuriously issued. LLpr On October 13, 1998, the Court of Appeals in CA-G.R. SP No. 47122, " Marietta Valisno vs . Hon . Delia Panganiban as Judge, Regional Trial Court of Makati Branch 64 and Ayala Land, Inc ." dismissed the foregoing cases as against Valisno only. On March 3, 1998, the Supreme Court denied due course to Ayala Land's Petition for Review of the Court of Appeals' aforementioned decision. Ayala Land, however, filed a Motion for Reconsideration which is now pending. It should be noted, however, that the aforesaid dismissal is not on the merits and does not set aside or nullify any of Ayala Land's TCTs or its possession of the property. In the event that Ayala land fails to set aside this decision of the Court of Appeals, the respondents will have to litigate to have Ayala Land's TCTs set aside and Ayala land will still have the right to defend those TCTs. LLjur In a related case entitled " Marietta Valisno and Jesus Yujuico v . Ayala Land, Inc . , et al .," Civil Case No. LP-97-0064 with the Regional Trial Court, Las Pias, Branch 253 which was filed by Marietta Valisno (joined by her husband), a respondent in the petitions cited above, against Ayala Land to quiet title to the properties covered by her own TCT No. (273301) RT-4 which overlap Ayala Land's landholdings in Las Pias. Respondents other than Ayala Land are also impleaded. The petitioners pray for the confirmation (as valid) of their supposed title and the cancellation of Ayala Land's affected titles. They also seek from all the defendants to be awarded actual, moral and exemplary damages, and attorney's fees, in various amounts. Ayala Land filed its answer alleging a number of affirmative defenses, among which are that: (a) the petitioner Valisno committed forum-shopping when she filed this case after Ayala Land had filed several petitions to quiet title involving Valisno's TCT; (b) Valisno's title is spurious; and (c) Valisno's title is, in any case, inferior to Ayala Land's TCTs. The trial court refused to dismiss this case on the ground of forum shopping prompting Ayala Land to file a petition for certiorari with the Court of Appeals. On 26 April 1999, the Court of Appeals in " Ayala Land, Inc . v . Hon . Caoibes, Valisno and Yujuico ," CA-G.R. SP No. 48230, ruled in favor of Ayala Land and dismissed this case. Valisno, however, is expected to move for reconsideration. LibLex In summary, in the event that: (a) the Court of Appeals' ruling dismissing Valisno's case against Ayala Land is reversed, and Valisno's case is reinstated; and (b) Ayala Land fails in its motion for reconsideration now pending with the Supreme Court and further, its five petitions against Valisno are dismissed with prejudice (all of which, we wish to emphasize, are contingencies which have not yet or may not occur), the issue of whose titles are superior will still have to be resolved in the quieting of titles case which Valisno filed against Ayala Land in respect of Ayala Land's counterclaims made therein and which remain pending. Otherwise stated, the merits of the contending claims of the parties in the cases involving Ayala Land's landholdings in Las Pias will still, eventually, have to be threshed out. Pursuant to the requirements of the Revised Securities Act, the registrant has duly caused this report to be singed on its behalf by the undersigned hereunto duly authorized. AYALA LAND, INC. Registrant (SGD.) JAIME E. YSMAEL Vice President & Comptroller