Oranbo Realty Corp. v. Far East Bank and Trust Co.

THIRD DIVISION

[G.R. No. 182768. January 9, 2013.]

ORANBO REALTY CORPORATION, petitioner, vs. FAR EAST BANK AND TRUST COMPANY [NOW BANK OF THE PHILIPPINE ISLANDS], respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated 09 January 2013, which reads as follows:

G.R. No. 182768 (Oranbo Realty Corporation v. Far East Bank and Trust Company [now Bank of the Philippine Islands]). — This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying that the Decision 1 of the Court of Appeals in CA-G.R. CV No. 84538, dated January 22, 2008, and the Resolution 2 dated May 7, 2008 denying petitioners' motion for reconsideration thereof, be annulled and set aside.

Petitioner applied for and obtained a short-term credit facility from respondent, in the amount of P510,000,000.00. Petitioner executed Promissory Note No. TLS#96-96-1467 in the amount of P484,726,000.00, and as security therefor, petitioner also executed a Real Estate Mortgage over fifteen (15) parcels of land with improvements located at Orambo Drive, Pasig City. Said loans reached maturity, but petitioner was unable to pay despite repeated demands. Thus, on January 9, 1998, respondent instituted extrajudicial foreclosure proceedings over the 15 mortgaged parcels of land.

Petitioner then filed cases with the Securities and Exchange Commission (SEC), and with the Regional Trial Courts of Pasig and Las Piñas, all with the end in view of nullifying the foreclosure. Said cases, and several incidents thereof, were elevated to the Court of Appeals (CA). In those cases before the CA, petitioner failed to obtain a favorable ruling and, thus, filed petitions before this Court, this present petition for review on certiorari being one of them. AcDHCS

However, before this Court could resolve the petition, petitioner and respondent, assisted by their respective counsels, executed a Compromise Agreement dated September 21, 2012, pertinent portions of which read as follows:

COMPROMISE AGREEMENT

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WHEREAS, pending the resolution of the SC Case 1, SC Case 2, the Annulment Case, and the BSP Case (collectively, the "Cases"), BPI executed a Contract to Sell ("Contract") over the Properties in favor of Alveo, with the knowledge and consent of Oranbo;

WHEREAS, to put an end to the Cases, Oranbo and BPI, with the participation of Alveo (as possibly being the successor-in-interest of BPI upon execution of a Deed of Absolute Sale), have agreed to a compromise and amicably settle the Cases subject to the terms and conditions hereinafter set forth; and

WHEREAS, with the execution of the Contract and this Agreement, it is the intention of BPI and Oranbo to amicably settle the Cases and avoid future litigation between them.

NOW, THEREFORE, for and in consideration of the foregoing premises, which are essential conditions and integral parts of this Agreement, and the stipulations set forth herein, the Parties hereby agree as follows:

1. PRIMORDIAL INTENT

By this Agreement, it is the primordial intention of:

(a) BPI and Oranbo to settle fully their dispute which is the subject matter of the Cases and put a final end thereto; and

(b) BPI to have Alveo succeed to all its rights, interest and title to and over the Properties upon the execution of the Deed of Absolute Sale ("Deed").

2. ADMISSION

BPI and Oranbo are entering into this Agreement solely in the interest of settling their controversies and in the interest of peace and a harmonious relationship.

Oranbo admits and confirms the validity, legality or propriety of the Loan, the Real Estate Mortgage, the extra-judicial foreclosure sale of the Properties as well as the deficiency claims of BPI against Oranbo in the amount of P729,224,052.42. cDTIAC

The Rodriguezes voluntarily, intelligently and willingly agree to be solidarily liable with Oranbo in the event the latter breaches its obligations, representations and warranties contained in this Agreement.

3. MUTUAL CONSIDERATION

As consideration for executing this Agreement and settling all legal disputes, issues and controversies:

(a) Alveo shall pay Oranbo the sum of One Hundred Seventy-Eight Million Five Hundred Seventy-One Thousand Four Hundred Twenty-Eight and 57/100 Pesos (P178,571,428.57), receipt of which is hereby acknowledged.

The said sum shall be entered in Oranbo's books as "Other Income" and shall be subject to two percent (2%) withholding by Alveo;

(b) BPI shall not pursue its counterclaims before the Annulment Case and shall not claim for deficiency judgment pursuant to the Real Estate Mortgage against Oranbo, its owners, stockholders, officers, and directors;

(c) Oranbo shall not pursue its claims against BPI;

(d) Oranbo shall not pursue the Cases and provide BPI and Alveo representations and warranties respecting the Properties as contained in Section 6 herein; and

(e) The Rodriguezes voluntarily, intelligently and willingly agree to be solidarily liable with Oranbo in the event the latter breaches its obligations, representations and warranties contained in this Agreement.

4. ORANBO AND RODRIGUEZES DELIVERABLES

On or before the execution of this Agreement, Oranbo and the Rodriguezes shall deliver to BPI the original or certified true copies of the following documents: TaEIAS

(a) Original or certified true copies of the 2012 General Information Sheets of Oranbo and all corporate shareholders of Oranbo, including Kimberly Holdings Corporation ("KHC"), duly filed with the Securities and Exchange Commission ("SEC");

(b) Original SEC Certificate of Clearance for Oranbo and all its corporate shareholders, including KHC;

(c) Original or certified true copy of the Audited Financial Statements of Oranbo for the preceding fiscal year duly filed with the SEC and the Bureau of Internal Revenue;

(d) Original notarized Joint Stockholders' and Director's Certificate of Oranbo, substantially in the form attached hereto as Annex F, stating:

1. That all of the members of the Board of Directors approved the execution of this Agreement and that all of the stockholders of Oranbo ratified such resolution of the Board of Directors in a special meeting held for this purpose;

2. That the stockholders and the members of the Board of Directors authorize Joaquin H. Rodriguez, Jr.:

a. to sign, execute, deliver, receive and receipt any and all documents in connection with this Agreement;

b. to receive payment under this Agreement;

c. to execute the waiver of all claims against BPI and Alveo;

d. to execute the Joint Motion for Judgment Based on Compromise;

(e) Original notarized Joint Stockholders' and Director's Certificate of Oranbo's corporate shareholders, substantially in the form attached hereto as Annex G, including KHC, stating that all of their stockholders and members of the Board of Directors approved the resolution authorizing Joaquin H. Rodriguez, Jr. as proxy of the corporation in the Oranbo Stockholders' meeting; TEcCHD

(f) Original copy of the notarized special power of attorney executed by the Rodriguezes (with spousal consent, if married; duly authenticated if executed outside the Philippines) substantially in the form attached hereto as Annex H, appointing Joaquin H. Rodriguez, Jr. as attorney-in-fact, for the purpose of consenting and accepting to be solidarily liable in the event Oranbo breaches any of its obligations, representations and warranties contained in this Agreement; and

(g) Any and all other documents and instruments in connection with the execution and implementation of this Agreement as may be reasonably requested of it by BPI and/or Alveo, including an irrevocable special power of attorney, substantially in the form attached hereto as Annex I, appointing BPI and/or Alveo as its attorney-in-fact, to execute and deliver on its behalf, any and all documents and instruments required or necessary for the execution and implementation of the intent and purpose of this Agreement.

5. RELEASE AND DISCHARGE

BPI and Oranbo, for and in consideration of this Agreement, hereby mutually, irrevocably, freely and voluntarily RELEASE, REMISE and FOREVER DISCHARGE each other, including their respective parents, subsidiaries, affiliates, successors, predecessors, partners, directors, officers, shareholders, employees, agents, assigns and representatives, from any and all demands, deficiency claims, claims, suits, actions, causes of action, liabilities, judgments, damages, costs, attorney's fees, and expenses of any and every character and nature whatsoever in law or equity, which they had, now have, or may have against each other, arising directly or indirectly from the facts and circumstances giving rise to, surrounding or arising from the Cases, all of which claims or causes of action by these presents, BPI and Oranbo hereby abandon and waive. Such RELEASE shall be a complete bar to any claims, demands or causes of action that either party may have against the other. SEAHID

Oranbo and the Rodriguezes wholly and irrevocably assign, transfer and convey to BPI and/or Alveo all of its rights, titles, interest, claims or causes of action which Oranbo or the Rodriguezes had, now have or may have against BPI, Alveo or any third party over, or in connection with, the Properties, or the Real Estate Mortgage.

BPI, Oranbo and the Rodriguezes hereby undertake and warrant that they will not directly or indirectly institute or cause the institution of any complaint, action, suit, claim or demand whatsoever of whatever nature and kind, whether civil, criminal, administrative, against each other or against their successors and assigns, in any court of law, tribunal, agency or body in connection with the controversy arising from the facts, incident, claim, causes of action in the Cases.

This Agreement can and may be used by either party or their successors and assigns as a bar to or to cause the dismissal of any demand, claim, action, suit or proceeding in any court of law, tribunal, agency or body in connection with the controversy arising from the issues in the Cases and any and all acts in connection therewith. cITCAa

6. REPRESENTATIONS AND WARRANTIES

Oranbo hereby represents and warrants in favor of BPI and Alveo that:

(a) Oranbo has the full power and authority and legal right to enter and execute this Agreement on its own and the same constitutes its legal, valid and binding obligation enforceable in accordance with its terms;

(b) All authenticated corporate resolutions making this Agreement and all other documents, instruments and contracts relevant or executed and/or delivered pursuant hereto, are valid and binding on Oranbo, and the signatures of the authorized signatories are the true and authentic signatures of such designated officers;

(c) The execution and delivery of this Agreement, and the compliance with the terms and provisions herein, will not result in, nor will constitute, nor will constitute (with due notice or lapse of time or both): (i) a default, breach or violation of its charter documents or any agreement to which it is a party or by which any of its property or assets is bound; (ii) a violation of any law, judgment, injunction, order, decree or any other restriction of any kind or character by which it or any of its property or assets may be bound or subject; or (iii) an event which would require any consents or approvals of, the giving of notice to, the registration with, the recording or filing of any documents with, or the taking of any other action in respect of any government authority, except for the government approvals; or subjects or will subject the performance of its obligations under this Agreement to any lien and approval;

(d) The Properties or any portion thereof do not suffer from any defect, lien, encumbrance, restriction, mortgage, pledge, security interest, option, right to acquire or charge whatsoever;

(e) The Properties or any portion thereof is/are not made subject of any action, suit or proceeding, at law or in equity, or official investigation before or by any government authority, arbitral tribunal or other body pending or threatened against or affecting BPI, Oranbo or the Properties or the titles thereto or BPI's rights and interests therein, which could reasonably be expected to result in a material adverse effect on BPI's ability to sell the Properties to Alveo free and clear of all liens, encumbrances, structures, claims and occupants; or which could reasonably be expected to result in a material adverse effect on the validity or enforceability of BPI's intended conveyance to Alveo or Alveo's proposed purchase and development of the Properties;

(f) Oranbo warrants that the Properties and other claims against BPI are not subject of any sale, reservation, agreement, contract to sell, contract of sale, deed of assignment and/or any agreement with any third party until and unless the said representations and/or warranties are disclosed to BPI and Alveo in writing prior to the execution of this Agreement and they agree to be bound by such representations and/or warranties; EHDCAI

(g) Oranbo, or any of its officers, directors, investors and stockholders, shall not directly or indirectly initiate, file, assist, finance or support, in any way or manner, any person or corporation claiming to have any right, interest and/or title over any or all of the Properties subject of this Agreement. Oranbo shall defend and hold harmless BPI and Alveo, and their respective officers, directors, stockholders, employees, representatives, assignees and successors from any and all liability, loss or damage, in relation to any claim, proceedings, suits and actions from creditors of Oranbo.

The above undertakings shall survive the execution of this Agreement.

7. JOINT MOTION FOR JUDGMENT BASED ON COMPROMISE AGREEMENT

Upon the execution of this Agreement, BPI and Oranbo shall, by their respective duly authorized representatives supported by the appropriate Secretary's Certificate, submit this Agreement for judicial approval in the SC Case 1 and SC Case 2, both pending before the Supreme Court, and the Annulment Cases pending before the Regional Trial Court, Pasig City, Branch 268, through a Joint Motion for Judgment Based on Compromise. Upon approval by the Supreme Court and the Regional Trial Court, Pasig City, Branch 268, of the Joint Motion for Judgment Based on Compromise, the Cases, including all claims and counterclaims therein, shall be dismissed on the basis of this Agreement, without prejudice to BPI, Alveo or Oranbo's right to seek a writ of execution to enforce the foregoing judgment by compromise. This Agreement shall be considered as full settlement only upon full compliance by the Parties of their respective obligations under this Agreement.

Oranbo shall likewise execute an Affidavit of Desistance, substantially in the form attached hereto as Annex J, which will be submitted by BPI and Oranbo to the BSP, and BPI and ORANBO shall cause the dismissal of the BSP, Case.

8. UNDERTAKING

BPI and Oranbo undertake and warrant that they shall execute and deliver any and all additional documents or instruments and do such further acts as may be necessary to:

(a) Fully settle and resolve the cases and all other pending litigation between the Parties; and

(b) Cancel and lift any and all annotations Oranbo caused to be inscribed on the Properties' certificates of title. THAICD

9. INDEMNITY

Oranbo shall hold harmless, defend and indemnify each of BPI and Alveo, and their respective officers, directors, stockholders, employees, representatives, assignees and successors-in-interest, from and against all claims arising out of or related to or incurred by reason of or in connection with (i) any actual breach of its representations and warranties under this Agreement; (ii) the inaccuracy of any representation or warranty made by Oranbo under this Agreement; or (iii) any act or omission by Oranbo or the Rodriguezes in the performance of its/their obligations under this Agreement. The indemnity shall survive the execution of this Agreement.

10. BREACH

Oranbo's breach of any provision of this Agreement, whether in favor of BPI and/or Alveo, shall entitle:

(a) BPI to immediately move for execution of the outstanding obligations, including the deficiency judgment in the amount of P729,224,052.42, including interest and penalties;

(b) BPI and/or Alveo to claim legal and incident expenses from Oranbo, including attorney's fees, that will arise by reason of a legal action before the courts and other actions for satisfaction in the event that BPI is constrained to seek execution and other reliefs, or to litigate to seek satisfaction and other reliefs from any court, body or tribunal by reason of the bleach/violation of Oranbo, of its obligations under this Agreement.

xxx xxx xxx

IN WITNESS WHEREOF, the parties have affixed their signatures on the date and place above written. ECaAHS

BANK OF THE PHILIPPINES ISLANDS	ORANBO REALTY CORPORATION
By:	By:
(signed)	(signed)
ALBERTO E. PASCUAL	JOAQUIN H. RODRIGUEZ, JR.
Senior Vice-President	Attorney-in-Fact
ALVEO LAND CORP.	We agree to be jointly and
By:	solidarily liable with
	Oranbo Realty Corporation
	(Signed)
	JOAQUIN C. RODRIGUEZ, SR. and
	JOAQUIN H. RODRIGUEZ, SR.
(signed)	(signed)
ROBERTO S. LAO	JOAQUIN H. RODRIGUEZ, JR.
Attorney-in-Fact	Attorney-in-Fact
(signed)
JENNYLLE S. TUPAZ
Attorney-in-Fact

The parties then filed the present Joint Motion for Judgment Based on Compromise Agreement, stating that they have decided to amicably settle their respective claims and prayed that the Court render judgment approving the Compromise Agreement and enjoining the parties to faithfully comply with their respective obligations stipulated therein. IcTaAH

In Gaisano vs. Akol,3 the Court defined a compromise agreement as a contract whereby the parties make reciprocal concessions, avoid litigation, or put an end to one already commenced. Its validity depends on its fulfillment of the requisites and principles of contracts dictated by law; its terms and conditions being not contrary to law, morals, good customs, public policy and public order.

A close reading of the aforequoted agreement shows the same to be sanctioned under Article 2028 of the Civil Code, its terms and conditions not being contrary to law, morals, good customs, public policy and public order. Hence, the Court finds nothing objectionable with the same.

WHEREFORE, the Joint Motion for Judgment Based on Compromise Agreement is GRANTED. The Compromise Agreement dated September 21, 2012 is hereby APPROVED and ADOPTED as the judgment in this case. Herein parties are ORDERED to strictly and faithfully comply with said Compromise Agreement. This case is now deemed TERMINATED.

No pronouncement as to costs. (Abad, J., no part, due to close association to or close relation with law firm representing a party; Villarama, Jr., J., designated Additional Member, per raffle dated January 8, 2013.)

SO ORDERED.

Very truly yours,

 

(SGD.) LUCITA ABJELINA SORIANODivision Clerk of Court

 

Footnotes

1.Penned by Associate Justice Ramon R. Garcia, with Associate Justices Josefina Guevara-Salonga and Vicente Q. Roxas, concurring.

2.Id.

3.G.R. No. 193840, June 15, 2011.