Case Digest (G.R. No. 241814)
Facts:
Mondragon Leisure and Resorts Corporation, Mondragon International Philippines, Inc., and Mondragon Securities, Inc. were lessees of property in what used to be Clark Air Base, leased from Clark Development Corporation (CDC) for fifty years. CDC sought to eject Mondragon for alleged lease violations, including non-payment of the proper rent, and the dispute led to restraining orders issued by the Regional Trial Court of Angeles City in Civil Case No. 9242 and Civil Case No. 8970, restraining parties including PAGCOR and CDC. CDC appealed to the Court of Appeals, which set aside the restraining orders, prompting Mondragon to file a petition for review on certiorari under Rule 45 to the Supreme Court.While the petition was pending, the parties reached an amicable settlement embodied in a Compromise Agreement dated June 28, 1999, including payment of rentals in arrears, consolidated lease terms, and provisions on reconciliation and withdrawal of pending cases. Mondragon and CDC j
Case Digest (G.R. No. 241814)
Facts:
- Parties and transactional relationship
- Mondragon Leisure and Resorts Corporation (Mondragon) leased a 152.25 has. area in what used to be Clark Air Base.
- Mondragon leased the property from Clark Development Corporation (CDC) for a fifty-year period.
- CDC and Mondragon were the adverse parties in pending judicial disputes before the Regional Trial Court in Angeles City and in this Court.
- Alleged breach and ejectment effort
- CDC alleged that Mondragon violated the lease agreement.
- CDC’s specific claim involved non-payment of the proper rent over the leased property.
- CDC sought to eject Mondragon from the premises because of the alleged lease violations.
- Civil actions for injunctive relief and issuance of restraining orders
- Police barricades were set up around the Mimosa Regency Casino, an establishment operated by Mondragon in the leased area.
- To prevent ejectment, Mondragon filed a complaint with the Regional Trial Court of Angeles City, docketed as Civil Case No. 9242.
- The Civil Case No. 9242 complaint prayed for a temporary restraining order.
- Civil Case No. 9242 was raffled to Judge Yturralde, who granted the prayer for a restraining order.
- Meanwhile, the Philippine Amusement and Gaming Corporation (PAGCOR) threatened to revoke Mondragon’s authority to operate the Mimosa Regency Casino.
- Mondragon filed a second complaint with the Regional Trial Court of Angeles City, docketed as Civil Case No. 8970, to restrain PAGCOR from revoking its license.
- Civil Case No. 8970 was raffled to Judge Viola, who issued a restraining order not only against PAGCOR but also against CDC.
- Appeal and appellate reversal
- Aggrieved, CDC brought the matter to the Court of Appeals.
- On March 19, 1999, the Court of Appeals set aside the restraining orders, namely:
- Petition for review by Mondragon before this Court
- On March 25, 1999, Mondragon filed a petition for review on certiorari under Rule 45 with this Court.
- The petition sought reversal of the Court of Appeals’ March 19, 1999 decision that set aside the above restraining orders.
- Subsequent developments after filing of the petition
- After Mondragon filed the petition, this Court deputized the Philippine National Police personnel still deployed around the casino area, to prevent persons from entering or leaving the premises.
- On May 13, 1999, CDC filed a manifestation stating it was willing to negotiate for a possible amicable settlement.
- On May 17, 1999, Mondragon filed a manifestation stating its sincere desire to have the case amicably settled.
- On May 18, 1999, this Court issued a resolution granting the parties a non-extendible period of twenty days to submit an amicable settlement.
- Submission of compromise agreement and terms
- On June 28, 1999, the parties submitted a joint manifestation and motion stating they had reached an amicable settlement embodied in a Compromise Agreement executed on even date.
- The Compromise Agreement identified the parties as CDC and MLRC (Mondragon Leisure and Resorts Corporation) and narrated that:
- The Compromise Agreement specified that the Supreme Court required the parties to submit an amicable settlement within twenty (20) days and that on June 24, 1999, the parties entered into an agreement to submit their disputes to a Board of Arbitrators.
- It stated that during proceedings before the Board of Arbitrators on June 26, 1999, after presentation and full ventilation of respective submissions and arguments, a compromise was reached through the arbitrators’ mediation.
- The Compromise Agreement then set forth substantive terms, including:
- July 31, 1999 — PHP 50,000,000.00
- August 31, 1999 — PHP 50,000,000.00
- September 30, 1999 — PHP 50,000,000.00
- October 31, 1999 — PHP 50,000,000.00
- November 30, 1999 — PHP 50,000,000.00
- December 31, 1999 — PHP 50,000,000.00
- June 30, 2000 — PHP 25,000,000.00
- The parties were to compare the Percentage of Gross Revenues (PGR) derived by MLRC from its operations against the MGLR to determine whether PGR was higher or lower.
- The rental due to CDC was the higher of MGLR or PGR.
- The comparison was to be done monthly starting on or before July 31, 1999, at MLRC’s offices, with CDC or authorized representatives allowed to inspect necessary records.
- Reconciliation for annual determination and necessary adjustments was to be done not later than May 31 of the succeeding year using audited financial statements prepared by a reputable accounting firm acceptable to CDC.
- Gross revenues of all business activities within the leased properties, including sub-leases and subsidiaries within the leased properties, were included in PGR computation.
- Casino revenues were to be determined using the formula used by PAGCOR in determining casino gross revenues under Article I of the existing agreement dated July 27, 1995 between MLRC and PAGCOR.
- Upon failure of MLRC to pay any monthly rental based on either MGLR or PGR, or failure to comply with any obligations, CDC could demand and, after expiration of thirty (30) days from receipt of demand without compliance, CDC could cancel and terminate the Compromise Agreement.
- Upon cancellation/termination, MLRC was to leave, abandon, and vacate premises leased under the Master Lease Agreement, Supplemental Lease Agreements, and other Lease Agreements as modified.
- the parcels of land identified as B, C, D, and F under the map/sketch in Annex “A”,
- the parcel known as Wagner and existing improvements,
- all lands and improvements along the parade grounds except the lands where the Mimosa Regency Casino and Chi Restaurant were situated as shown in shaded/colored portions in Annex “B” (with CDC allocating the vacant lot next to the Chi Restaurant to the Office of the President of the Philippines),
- the rule that any future design, development, or improvements on areas at the back of the Casino and Chi Restaurant premises facing the parade grounds required CDC approval.