CJHDevco Liable to Pay Sub-lessees Undelivered Portion of Contract

CJHDevco

Loghomes at the Scout Hill, Camp John Hay, Baguio City

The state-owned Bases Conversion and Development Authority (BCDA) said that the Sobrepeña-led Camp John Hay Development Corporation (CJHDevCo) is liable to the Camp John Hay sub-lessees and that the sub-lessees should run after CJHDevCo to claim the undelivered portion of their contract.
BCDA President and CEO Arnel Paciano D. Casanova said BCDA is not privy nor is a signatory to the contracts that the CJHDevCo signed with the sub-lessees.

“BCDA is not bound by the contract for whatever losses and damages the sub-lessee might suffer,” Casanova said.
He added that there is no privity of contract between the BCDA and the sub-lessees therefore the sub-lessees cannot run after BCDA. Thus, CJHDevCo, being the party to the contract and the recipient of the payments from the sub-lessees, is the party liable to the sub-lessees.

According to Casanova, CJHDevCo is trying to mislead the sub-lessees so it can escape its liabilities. He pointed out that the Sobrepeña-led CJHDevCo is clearly liable and accountable and should rightfully pay the sub-lessees for the portion of their contract that CJHDevCo will not deliver because of the Philippine Dispute Resolution Center Inc. final award that practically evicts CJHDevCo from Camp John Hay.
He also added that CJHDevCo concealed the contracts of the sub-lessees to BCDA and the John Hay Management Corporation (JHMC). This makes CJHDevCo liable to the sub-lessees, therefore, the sub-lessees should go after CJHDevCo.”

For his part, BCDA head of legal services lawyer Peter Paul Andrew T. Flores said the Sobrepeña-led CJHDevCo is misinterpreting the PDRCI Award as he shrugged off CJHDevCo’s claims that the confirmation of the PDRCI award by the Regional Trial Court Branch 6 of Baguio City did not carry with it the order for locators and sub-lessees to vacate as their vested rights are to be protected by law.
“CJHDevCo is misinterpreting the PDRCI award for its own vested interest. It’s purely self-serving and deceptive,” he said.

Flores said that the Final Award of the PDRCI is direct and unequivocal. It says that, “Claimant [CJHDevCo] is ordered to VACATE the Leased Premises and promptly deliver the leased property, inclusive of all new constructions and permanent improvements introduced during the term of the lease as reckoned from the execution of the Original Lease Agreement, to Respondent [BCDA] in good and tenantable condition in all respects, reasonable wear and tear excepted.”
He said the PDRCI final award was lifted from the Original Lease Agreement between BCDA and CJHDevCo. It simply means that the CJHDevCo must return land and all the structures to the government free of encumbrances and occupants. He emphasized that the key word is “TENANTABLE”.
He said that the recent Order of the Regional Trial Court Branch 6 of Baguio City is of the same position. The March 27, 2015 Order states that: “The Final Award is clear. It needs no further interpretation. Moreover this Court is not authorized to revise, interpret or in any way encroach upon the work of the Arbitral Tribunal…”
As for the sub-lessees and or vested rights holders, Flores said that the Baguio RTC ruled that, “they will be governed by the law on obligations and contracts.”

“This means that the obligor (CJHDevCo) is liable to the obligee (sub-lessees) for damages that may be suffered by the obligee from the non-performance of the obligor,” he explained.
Flores also cited the Supreme Court ruling in Guevara Realty Inc. v. Court of Appeals, G.R. No. L-57469 where the Supreme Court has held: “A judgement of eviction against a lessee affects his sub-lessee, even if the latter are not sued in the ejectment case. This is so, because a sub-lessee can invoke no right superior to that of his sub-lessor, and the moment the latter is duly ousted from the premises, the former has no leg to stand on. The sub-lessees’ right, if any is to demand reparation for damages from his sub-lessor, should the latter be at fault. The sub-lessees can only assert such right of possession as could have been granted them by their sub-lessor, their right of possession depending entirely upon that of the latter.”

Casanova said that the sub-lessees should now seriously consider claiming from the P1.42 billion that the BCDA will be returing to CJHDevCo as part of Philippine Dispute Resolution Center Inc. (PDRCI) final award that the Baguio RTC has recently confirmed.

“The only way for the CJHDevCo’s victims to recover their investments and protect their interests is to lay claim to the P1.42-B that the BCDA will be returning to CJHDevCo,” Casanova said.
As early as August 2011, the BCDA through the John Hay Management Corporation (JHMC), BCDA’s management arm in Camp John Hay, has requested CJHDevCo copies of all contracts and other relevant documents related to the development of all residential homes, estates and condotels within the leased area such as but not limited to deeds of absolute sale, limited warranty deeds, and deeds of restrictions, among others.

In a reply letter of CJHDevCo COO Alfredo R. Yniguez III to JHMC President and CEO Jamie Eloise Agbayani dated 11 November 2011 who said: “Owing to the nature of all these contracts which outline sensitive and confidential commercial, contractual and financial information, and which are not to be disclosed to anyone without the express written authorization of the parties involved, we regret to inform you that CJHDevCo is under no clear obligation to furnish JHMC such copies.”

It will be recalled that in the PDRCI Arbitral Tribunal’s final award, CJHDevCo is to vacate the Camp John Hay and and promptly deliver the leased property, inclusive of all new constructions and permanent improvements to the BCDA. The BCDA, on the other hand, is to return to CJHDevCo the amount of P1.42-B which the CJHDevCo paid to the BCDA as lease payments.

Earlier, Casanova said the BCDA is ready to pay the P1.42 billion to CJHDevCo. He advised the sub-lessees to seek legal counsel to ensure that their rights and interests will be protected. “The last thing we want to happen is for their contracts to be a worthless piece of paper like what happened with the College Assurance Plan (CAP).”
CJHDevCo is chaired by Robert John Sobrepeña, who also owns and manages the College Assurance Plan, the pre-need company known to have defaulted on its obligations to plan holders, and the Metro Rail Transit Development Corporation (MRTDevco).

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