CA slams ATO, but  orders LGUs to pay Sugarland Hotel

The Court of Appeals’ Ninth Division in Cebu recently slammed the Air Transportation Office (ATO) for having ordered the demolition of the fourth floor of the Sugarland Hotel in Bacolod City. But the court also told the city and provincial governments to pay the agreed damages to the hotel and its owner, Felix Yusay.

Ironically, the CA decision was issued just before the death of Yusay. The latter, however, must have gone to the Beyond aware that the CA had vindicated him.

But the Bacolod City government and the province of Negros Occidental were ordered to pay the promised damages of P3.6 million and P4 million, respectively, as embodied in the memorandum of understanding they had inked on May 20, 1994 in the presence of ATO chief Panfilo Villaruel.

The MOU was signed by then Bacolod mayor Alfredo Montelibano Jr. and former vice governor Romeo Gamboa. Villaruel presided over the meeting. Also signing the MOU were former presidential assistant Daniel Lacson Jr. and then second district congressman Manuel Puey as witnesses.

That was when Yusay, on behalf of Sugarland Hotel, agreed to have the fourth floor of the hotel demolished in line with Villaruel’s contention that it violated the allowable gradient of 1.6 percent for aerial navigation.

The Bacolod Airport then resumed operations. With 95 percent of the demolition work undertaken, the SP of Bacolod issued Resolution Nos. 930 and 931 declaring the un-demolished parapet, shells of five rooms and water pressure tanks as public nuisance to be summarily abated.

Later, the Airport Task Force under architect Ramiro Garcia was tasked to supervise the demolition job. But despite the lack of a court order, the city engineer, accompanied by five policemen and demolition crew, undertook the demolition.

This was the second demolition of additional structures of the hotel.

Later, it was discovered that the height of the building did not pose a threat to aerial navigation, as it did not exceed the allowable height clearance of 2.5 percent gradient on domestic airports. What Villaruel earlier had claimed as the allowable gradient of 1.6 percent applied only to international air navigation.

The court also pointed out that the International COA Annex 14 particularly states that the international standards and recommended practices apply only to international airports and not to the Bacolod City Airport.

The previous closure of the Bacolod Airport by Villaruel had virtually put the commercial operations in the city into paralysis. Hence, the MOU meeting and the agreement by Yusay to allow the demolition on the basis of Villaruel’s order to allow for the resumption of airport operations.

Both the Bacolod City and provincial governments later reneged on paying Yusay and Sugarland what they had agreed to in the MOU.

The court’s decision, penned by Associate Justice Pampio Abasinto and concurred by Associate Justices Francisco Acosta and Amy Lazaro-Javier, ordered both local government units to comply with the MOU, pointing out that it was legally binding.

The court, however, slapped down the claim for reimbursement by both, pointing out that neither ATO nor the Department of Transportation and Communications had bound themselves to pay or reimburse the payments by the two LGUs. DOTC and ATO’s participation was only limited to the opening of the Bacolod Airport at the soonest possible time subject to certain conditions.

It also rejected the 12 percent interest per annum on the amount payable, stressing that the amounts pledged represent only the assessed value of the demolished fourth floor.

The court also rejected the claim of P12 million in unearned income of the hotel, as both Yusay and the Sugarland failed to present evidence to substantiate their claim which “cannot be proven with certainty.”

The CA, however, slapped on the agencies concerned a “temperate or moderate damage” of P6 million since it found that “some pecuniary loss had been suffered” by the claimant. It also pointed out that Yusay suffered mental anguish, serious anxiety, besmirched reputation, social humiliation, etc. and awarded him P1 million in moral damages.

In addition, the CA also awarded P1 million in exemplary damages in recognition of the appellant’s “overly oppressive conspiracy and concerted designs to evade their bounden obligation under the MOU.”

It also awarded P600,000 in attorney’s fees to lawyer Reynaldo Bagatsing who handled the Sugarland suit.

No word has been received so far from the Bacolod legal counsel nor from provincial government’s on whether they will still appeal the CA ruling to the Supreme Court.

ADDENDUM. Iloilo City prosecutor Ephraim Baldago yesterday insisted that the order of acting Justice Secretary Raul Gonzalez Sr. replacing him was without legal basis. Gonzalez dismissed Baldago from the service on the basis of a resolution of the Presidential Anti-Graft Commission dated Aug. 16, 2007. Gonzalez designated Passi City prosecutor Peter Baliao as Baldago’s replacement. The latter contended that it is Malacañang which should issue the directive for his dismissal or relief. How can you implement a decision where the respondent did not even receive any copy of the PAGC resolution? Baldago asked in a radio interview. The dispositive portion of the PAGC resolution found the Iloilo City prosecutor of having violated Sec. 7 (d) of the Code of Conduct and Ethical Standards for Public Officials and Employees or Republic Act 6713.