Date: 6 June 2022

For: Rockwell Cebu

From: Legal Services Team
Re: Initial due diligence report on Banawa Property

Based on the documents provided by the Rockwell Cebu Team, the undersigned conducted initial due
diligence on four parcels of land situated in Barangay Labangon, Cebu City (the , registered in
the name of Grandeur Realty, Inc., with an aggregate area of Twelve Thousand and Nine Hundred
Seventy Three Square Meters (12,973 sqm), more particularly described as follows:

Transfer Certificate Lot No. Area in sqm.

138845 6 545.00
130651 6160 11,966.00
143946 6137-D-3 200.00
154092 6137-D-4 262.00
TOTAL 12,973.00

Comprehensive Discussion

1. TCT No. 138845

a. The Property is subject to reservation provided in Section 7 of Republic Act No. 26 which affirms
that reconstituted title title. This annotation is a carryover from
one of its previous titles. The provision referred to reads:

onstituted certificates of title shall have the same validity and legal effect as the
originals thereof: Provided, however, That certificates of title reconstituted extra judicially, in the
manner stated in sections five and six hereof, shall be without prejudice to any party whose right
or interest in the property was duly noted in the original, at the time it was lost or destroyed, but
entry or notation of which has not been made on the reconstituted certificate of title. This
reservation shall be noted a

Any title at the time it was

lost or destroyed, but does not appear on the reconstituted title, may file a petition with the court
to have such right annotated on the reconstituted title, challenging the transfer within the two-year
time allowed by law. Under Section 9 of Republic Act No. 26, if such person does not act within
two (2) years from the reconstitution of the title, the registered owner may petition the court to
cancel the annotation.

Section 9, Republic Act No. 26 states that:

after the expiration of two years from the date of the reconstitution of
a certificate of title, if no petition has been filed within that period under the preceding section, the
court shall, on motion ex parte by the registered owner or other person having registered interest
in the reconstituted certificate of title, order the register of deeds to cancel, proper annotation, the
encumbrance mentioned in

In this case, since the two-year period has lapsed on 15 December 1956, the annotation has no
legal impediment over the Property. The Owner may file for the cancellation of the annotation.

b. The Property is also subject to a carryover annotation on restrictions under Section 4 Rule 74 of
the Rules of Court for the estate of the deceased Spouses Cecilio Caballero and Gregoria Rama,
within a period of two years from 16 December 1954.

Section 4 Rule 74 of the Rules of Court states that:

e. - If it shall appear at any time within two (2) years

after the settlement and distribution of an estate in accordance with the provisions of either of the
first two sections of this rule, that an heir or other person has been unduly deprived of his lawful
participation in the estate, such heir or such other person may compel the settlement of the estate
 Initial due diligence report on Banawa Property
Page 2 of 3
Legal Services

in the courts in the manner hereinafter provided for the purpose of satisfying such lawful
participation. And if within the same time of two (2) years, it shall appear that there are debts
outstanding against the estate which have not been paid, or that an heir or other person has been
unduly deprived of his lawful participation payable in money, the court having jurisdiction of the
estate may, by order for that purpose, after hearing, settle the amount of such debts or lawful
participation and order how much and in what manner each distributee shall contribute in the
payment thereof, and may issue execution, if circumstances require, against the bond provided in
the preceding section or against the real estate belonging to the deceased, or both. Such bond
and such real estate shall remain charged with a liability to creditors, heirs, or other persons for
the full period of two (2) years after such distribution, notwithstanding any transfers of real estate
t

The liabilities under Section 4 Rule 74 of the Rules of Court are enforceable for two (2) years from
the settlement and distribution of the estate, or from the notice thereof. Therefore, heirs and
claimants omitted from the estate of Sps. Cecilio Caballero and Gregoraia Rama have only until
15 December 1956 to file the appropriate action. Since the 2-year period has lapsed, the
annotation in each title may be considered for cancellation.

c. Similarly, it is also subject to a carryover annotation regarding restrictions under Section 4 Rule
74 of the Rules of Court for the estate of the deceased Maximo Verano within a period of two (2)
years, from 24 January 1985, and subject further to the usufructuary right of Maximo Verano.

The liabilities under Section 4 Rule 74 of the Rules of Court are enforceable for two (2) years from
the settlement and distribution of the estate, or from the notice thereof. Therefore, heirs and
claimants omitted from the estate of Maximo Verano have only until 23 January 1987 to file the
appropriate action. Since the 2-year period has lapsed, the annotation in each title may be
considered for cancellation.

2. TCT No. 136051

a. The subject property has an on-going transaction with Entry No. 2020000459 dated 16 January
2020. It is recommended that Rockwell require the registered owner to disclose the nature and
substance of the on-going transaction, and transmit copies of pertinent documents relating to
them, if there are any. This is to enable the Legal Services Team to understand the annotation
and determine what course of action to take in relation to these on-going transactions.

b. Several annotations regarding Real Estate Mortgages are copied from its previous TCT No.
84606 in favor of Philippine Bank of Communication for the sum and dates indicated below:

Entry No. Date of Inscription Amount

1258-V-27-D.B. 28 May 1986 500,000.00
*1255-V-31-D.B. 19 April 1989 1,000,000.00
8139-V32-D.B. 16 April 1990 4,000,000.00

*In relation to the annotation, Entry No. 1254-V-31-D.B., which ,

was annotated on the TITLE.

Thereafter, the foregoing mortgages were released under Entry No. 118610-44 dated 8
November 1995.

c. Entry No. 84120 dated 8 June 1994 refers to a Notice of Levy on Execution in connection with
Civil Case No. CEB-15428.

Entry Nos. 149693-47-D.B. and 146170-47-D.B. refer to Orders of RTC Cebu City, Branch 5
to

annotation regarding the writ of attachment in relation to Civil Case No. CEB-15428.

d. Entry No. 118616 dated 8 November 1998 refers to a Real Estate Mortgage for the amount of
Twenty Million Pesos (PhP20,000,000.00) in favor of Philippine Bank of Communications. This
annotation was thereafter released under Entry No. 244287 dated 20 February 2002.

In relation to the mortgage, Entry No. 184158 dated 22 September 1998 refers to an Affidavit
giving consent to the expropriation of Metro Cebu Development Project (MCDP) of a portion of
the property covered by this title under the condition that MCDP will pay a total amount of
PhP2,251,500.00 to Philippine Bank of Communications, as the mortgagee of the Property.
 Initial due diligence report on Banawa Property
Page 3 of 3
Legal Services

e. Entry No. 184162 dated 22 September 1998 refers to a Deed of Sale in favor of the Republic of
the Philippines (DPWH), through MDCP as the Project Director, for the expropriation of a portion
of the lot covered by this title for sum of PhP1,204,500.00. The metes and bounds involved in this
expropriation sale for road widening must be taken into consideration for the acquisition of the
Property.

3. There is no annotation found in TCT No. 154092.

4. TCT No. 143946.

Similar to the annotation on TCT No. 138845, the Property is subject to the restrictions under Section
4 Rule 74 of the Rules of Court for the estate of the deceased Cipriano A. Zabala within a period of
two years, from 9 March 1983. In this case, since the two-year period has lapsed on 8 March 1985,
the annotation has no legal impediment over the Property and the registered owner may file for the
cancellation of the annotation.

Prepared by: Reviewed by: Noted by:

Jam Nabong Edbert Matienzo Carol Pinoy