MUST the Cebu City Council heed the demand of the Ralloses for payment of land bought in the late nineties for a public road of the City Government? Has the Supreme Court (SC) order thrashing the City made the issue a no-brainer, that is, the City obviously has no recourse but to pay?
The city councilors were told the “facts” of the case, which Majority Floor Leader Jocelyn Pesquera enumerated in a July 25, 2023 privilege speech, in effect arguing against paying, at least not immediately, not until a thorough review by the City.
Apparently, the councilors have still to read the SC ruling, on which the Ralloses have based their latest demand. In that decision, the SC blamed the City Government’s “fault and negligence,” scolding the City for “brazen abuse of remedies” and “disrespect of judicial authority.”
Are the councilors waiting for the City Legal Office to tell them why the city’s lawyers were drubbed from Regional Trial Court (RTC) to Court of Appeals (CA) and all the way to the SC? A reading of the SC decision might cut down further the lean optimism of some Sanggunian members that the SC will reconsider its ruling.
Whatever further moves, Councilor Pesquera said the City already filed a motion for reconsideration.
RECENT DEVELOPMENTS have brought to the Cebu City Government front and up close the question whether to pay or not to pay P472 million to the heirs or assignees of the late Fr. Vicente Rallos as compensation for the land the City used as public road in Sambag. A quick look again:
[a] A June 5, 2023 demand letter from Maurillo B. Rallos, representing the Rallos heirs, giving the City until September 2, 2023 to pay P472 million-plus for 4,564 square meters of land.
[b] The Supreme Court decision -- promulgated February 13, 2023 but announced only last week -- throwing out the petition of the City Government to annul the final decisions of Court of Appeals and Cebu Regional Trial Court ordering the payment.
PESQUERA SEEDS OF DOUBT. It looked like the City would’ve no recourse other than to cough up almost half a billion pesos, after all, it’s now the SC, the highest court of the land, ruling for the payment.
Initiated in 1997, the transaction was finalized in 2008. The case reached the courts twice when the City assailed the decisions on just compensation and the modified award and its execution. When the RTC decided for the Ralloses, the amount due would’ve been only P131 million-plus. The City didn’t pay and instead appealed to the CA, then the SC. “Clearly,” the high-court ruling said, the City “was given every opportunity to ventilate its case. Thus, it can no longer resort to the remedy of annulment of judgment.”
Should the City pay now and thus avoid more interest to pile up? How about the seeds of doubt cast by Councilor Pesquera? A City Hall lawyer told me the City might still haggle on the computation of the amount due in September, particularly on the interest, given that the City, as Pesquera pointed out, had already paid P56 million or P12 million more than the P44 million original amount.
Last July 25, in a privilege speech, Councilor Joy recited “facts” that argue against paying the amount. Even with the SC command staring the City in the face, the councilors were impressed by the amount of research their colleague said she had done and overall impact of the presentation. The consensus seemed to be for further study of the options the City can take.
FLAWS OF DEAL, MISSTEPS IN COURT. Pesquera cataloged what would appear to be flaws in the transaction, which clearly placed the City at a disadvantage, namely:
No negotiated purchase, no expropriation ordinance or petition in court to expropriate the Rallos land; the City had not taken possession of the two parcels of land; the title had not been turned over by the Ralloses; no taxes were paid on the land; it was not the City that built the road but the Ralloses; no document transferring ownership to the City in exchange for the money the Ralloses received; the sellers cannot deliver the land untenanted or without illegal settlers; if the SC order is followed, the Rallos heirs themselves may not receive the money but the assignees.
While there seemed to be big defects in the purchase, there were also big mistakes by the city lawyers in working on the case. Minority Floor Leader Nestor Archival Sr. must have sensed that too, yet earlier he withdrew his request for the mayor to consider hiring in the future outside lawyers to handle complex and costly litigations of the City.
WHERE THE CITY ERRED. FAILED. The high court didn’t pull punches or mince words in telling the City that it committed missteps in pursuing and handling their case. Going through the maze of legalisms is arduous for media and audience but these SC pronouncements in Teresita Gabucan et al vs. Court of Appeals 18th Division and Cebu City et al (GR #219978, February 13, 2023) should tell enough:
[1] The City failed to comply with the first, second and fourth requirements in its petition for annulment of the sale, including sworn verification and specifics on the alleged extrinsic fraud; supporting affidavits; and mandatory averment that it failed to avail of remedies new trial, appeal, or petition for relief.
[2] The City failed to “substantiate” its allegation of extrinsic fraud. Probate of the Rallos will be “in rem” and bound the City even though it wasn’t a party. The City didn’t exercise “due diligence”; otherwise, it would’ve promptly discovered the “convenio” or compromise agreement; “prudence” would’ve prompted the City to obtain complete records of the probate case ”to refute (its adversary’s) allegations and protect the city’s interest.”
[3] The SC decisions that the City invoked were irrelevant as they involved issues different from the issues in the Rallos case.
[4] The high court said it would not “sanction such brazen abuse of remedies and disrespect of judicial authority.” It was “evident,” the ruling said, the City is “feebly attempting to disturb the effects of a judgment that, by its own fault and negligence, had long become final and been the subject of execution.” That cannot be allowed, the SC said, “without running afoul of the finality of judgment…”
EMBARRASSMENT. Aside from the cost in taxpayers' money, the City may have its reputation tarnished. The people who must be embarrassed are the leaders who decided on the general policy and the lawyers whose performance in the job of litigating was less than sterling.
They’re mostly unnamed but the mayor/s and the City Council members concerned, as well as the lawyers who handled the case under more than one administration, must know what they did or failed to do.