MANILA, Philippines - The Supreme Court has issued a temporary restraining order enjoining a Manila Regional Trial Court from further hearing a civil case filed by the R-II Builders, Inc. in connection with the Smokey Mountain Project.

The case calls for, among others, the rescission of the deed of assignment and conveyance executed by Planters Development Bank (PDB) in favor of the Home Guaranty Corporation (HGC) in connection with the Smokey Mountain project. The TRO was issued in a petition filed by HGC against R-II Builders and the National Housing Authority.

In 1993, the National Housing Authority and R-II Builders entered into a joint venture agreement for the implementation of the Smokey Mountain project. When the project failed to pay its investors, HGC acted as guarantor for the Smokey Mountain Project Participation Certificates (SMPPCs) to be issued for the project.

As guarantor, HGC shelled out P2.8 billion to fully pay all the investors. The Social Security System (SSS), however, remains to be fully paid.
 
In its petition for review before the High Tribunal, the HGC argued that Manila RTC, Branch 22 has no jurisdiction to proceed with the case considering that the original court (Manila RTC, Branch 24) was without authority to hear the case. It argued that the Court has consistently held that Special Commercial Courts have no jurisdiction over ordinary civil disputes such as in the case at bar.
 
The HGC further argued that the RTC has no jurisdiction considering that there was non-payment of the correct and proper docket fees, whether it be a real or personal action, based on the values of the properties or claims subject of the complaints, and given the clear intent to evade payment of said requisite fees.
 
In 2005, R-II Builders filed a complaint, in the nature of a real action, before the Manila RTC, Branch 24, which was designated a Special Commercial Court.

However, the RTC Branch 24 subsequently “explicitly declared itself to be without authority to hear the case” in its orders dated January 2, 2008 and February 1, 2008. Subsequently, the complaint was transferred to the Manila RTC, Branch 22 presided by Judge Marino M. dela Cruz.

Two years after filing the complaint, R-II filed a motion to admit "Amended and Supplemental Complaint." The first Amended Complaint re-pleaded the essential statements in the original Complaint calling for the return of the former asset pool properties that had already been conveyed to and in the possession of HGC.

The same complaint prayed for, among others, declaration of annulment of the Deed of Assignment and Conveyance executed by Planters Development Bank in favor of HGC; or in the alternative, declaring the nullity of said instrument.

However, R-II Builders filed a Second Amended Complaint which resurrected the alleged cause of action for rescission or resolution of the Deed of Assignment and Conveyance. R-II also sought the appointment of a receiver.