G.R. No. L-64112. May 21, 1984.
THE NATIONAL HOUSING AUTHORITY, petitioner, vs. HON. OTILIO ABAYA, Presiding Judge, RTC, National Capital Region, Branch CLIV, and UNION CHEMICALS, INC., respondents.

FACTS

The National Housing Authority (NHA) initiated expropriation proceedings (Civil Case No. 39068) to acquire parcels of land in Pasig and Cainta for a Sites and Services Project. Among the properties targeted were those owned by private respondent Union Chemicals, Inc. (UCI). During the proceedings, UCI moved to exclude portions of its land from the expropriation, arguing these areas were already devoted to a public purpose, specifically for fulfilling contractual obligations to its employees as approved by the Human Settlement Regulatory Commission. The respondent Judge granted UCI’s motion, issuing an order excluding said properties from the condemnation.
NHA filed this petition for certiorari and mandamus, assailing the respondent Judge’s order as having been issued with grave abuse of discretion. NHA contended that the defense of prior devotion to public use was a belated afterthought raised a year after the expropriation case began and should not preclude the taking. The case was elevated to the Supreme Court, which required comments and memoranda from the parties.

ISSUE

Whether the respondent Judge committed grave abuse of discretion in excluding UCI’s properties from the expropriation proceedings based on the claim that they were already devoted to a public purpose.

RULING

The Supreme Court did not reach a substantive ruling on the legal issue presented due to a supervening event. Before the Court could deliberate on the merits, the parties submitted a Compromise Agreement dated May 10, 1984. In the agreement, NHA and UCI stipulated to an exchange of properties to resolve the dispute. UCI agreed to assign and convey its fragmented properties within the project area to NHA. In exchange, NHA agreed to assign and convey to UCI a contiguous property of equal area already owned by NHA within the same project site. This exchange would allow NHA to consolidate its project area. The parties also agreed to mutual waivers of claims and to shoulder incidental expenses.
The Court approved the Compromise Agreement. It held that a compromise is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced. The agreement was found to be not contrary to law, morals, public order, or public policy. Consequently, the petition was dismissed, and the parties were enjoined to comply faithfully with the terms of their compromise. The approval of the compromise rendered the original legal issue moot and academic. No costs were awarded.