GR 182630; (December, 2021) (Digest)
G.R. No. 182630 , December 06, 2021
CITY OF BACOLOD CITY, CITY ENGINEER AND THE SANGGUNIANG PANLUNGSOD OF BACOLOD CITY, PETITIONERS, VS. SUGARLAND HOTEL, INCORPORATED, RESPONDENT. [G.R. No. 182670] DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC) AND AIR TRANSPORTATION OFFICE (ATO), PETITIONERS, VS. SUGARLAND HOTEL, INC., HEREIN REPRESENTED BY ATTY. REYNALDO L. BAGATSING AS ATTORNEY-IN-FACT, RESPONDENT. [G.R. No. 182698] PROVINCE OF NEGROS OCCIDENTAL, PETITIONER, VS. SUGARLAND HOTEL, INCORPORATED, RESPONDENT.
FACTS
This case stems from a Complaint for Recission with Damages or Specific Performance with Damages filed by respondent Sugarland Hotel, Inc. (Sugarland Hotel) against petitioners City of Bacolod, et al., DOTC, ATO, and the Province of Negros Occidental. Sugarland Hotel, located adjacent to the Bacolod City Domestic Airport, had a four-floor building. In 1994, the ATO Chief ordered the closure of the airport, citing the hotel’s third and fourth floors as obstructions. To resolve the issue, a Memorandum of Understanding (MOU) was executed on May 20, 1994, by ATO, the City of Bacolod, the Province, and Sugarland Hotel. The MOU stipulated that a re-survey of the hotel’s height would be conducted. If the survey revealed only the fourth floor needed demolition, Sugarland Hotel owner Felix Yusay agreed to demolish it within 5-7 days, provided the City and Provincial Governments would subsequently pay for its value, subject to approval by their respective Sanggunians and the Commission on Audit. It also stated that no demolition would occur unless all other violating structures were demolished simultaneously. Following a survey that excluded Sugarland Hotel’s representatives, the ATO recommended the removal of an obstacle by 6.38 meters. On May 25, 1994, Yusay consented to and caused the demolition of the fourth floor, and the airport resumed operations. The Sangguniang Panlungsod of Bacolod later passed ordinances appropriating funds (initially Php4,000,000.00, later reduced to Php3,600,000.00) for indemnification, subject to the MOU conditions. However, the City and Province later refused to pay, adopting the ATO’s position that the hotel violated ICAO rules. Subsequently, the Sangguniang Panlungsod declared the remaining undemolished portions a public nuisance. Despite Sugarland Hotel authorizing the Bacolod Airport Task Force to complete the demolition, the City Engineer, acting on a Demolition Order from the ATO Chief and without a court order, forcibly entered the hotel with armed personnel on November 17-18, 1994, and demolished the remaining portions, causing extensive damage to the lower floors. Sugarland Hotel filed the complaint seeking payment for the demolished portion and damages for the subsequent forcible demolition.
ISSUE
The core issue is whether petitioners are liable to pay Sugarland Hotel for the value of the demolished fourth floor pursuant to the MOU and for damages arising from the subsequent forcible demolition.
RULING
Yes. The Supreme Court affirmed the findings of the lower courts with modifications. The MOU was a valid contract. Sugarland Hotel performed its obligation by demolishing the fourth floor, which led to the airport’s reopening. The City of Bacolod and the Province of Negros Occidental breached the contract by refusing to pay the indemnity despite their Sanggunians having appropriated the funds. They cannot invoke the need for COA approval as a defense for non-payment, as this was a condition within their control to fulfill. They are solidarily liable to pay Sugarland Hotel the value of the demolished structure. The Court affirmed the trial court’s valuation of the demolished portion at Php7,200,000.00, with legal interest.
Regarding the forcible demolition, the ATO, DOTC, City of Bacolod, and its City Engineer acted beyond their authority. The demolition order was not final and executory, and the summary abatement of a nuisance requires clear immediacy of danger, which was absent. Their actions in forcibly demolishing the remaining parts and causing collateral damage were illegal, warranting an award of moral damages, exemplary damages, and attorney’s fees. The CA correctly deleted the award for unrealized profits due to lack of sufficient evidence. The awards for temperate damages (for damage to lower floors) and nominal damages (for the violation of Sugarland Hotel’s rights during the forcible entry) were sustained.