A Bacolod Regional Trial Court judge has ordered the Negros Occidental and Bacolod City governments, and their co-defendants, to jointly pay Sugarland Hotel P21.6 million plus interest for failure to comply with a Memorandum of Understanding in the demolition of the fourth floor of the hotel 11 years ago.

Lawyer Jose Ma. Valencia, chief of staff of Gov. Joseph Marañon, yesterday said the provincial government will appeal the recently released ruling of RTC Judge Ramon Delariarte dated Dec. 28, 2005.

Bacolod Mayor Evelio Leonardia yesterday said he had not received a copy of Delariarte's decision but added that they will definitely appeal the ruling because "we want to protect the coffers of the city."

"I don't believe the amount ordered to be paid is reasonable, and we will exhaust all legal means to appeal the ruling, even if we go all the way up to the Supreme Court," he also said.

The case stemmed from the order of Capt. Panfilo Villaruel Jr., then chief of the Air Transportation Office, on May 13, 1994 for the closure of the Bacolod airport.

He decreed that the airport could not resume operation unless and until the fourth floor of Sugarland Hotel was removed as it posed an obstruction to aerial navigation.

The judge noted that the airport closure drew public outcry as commerce practically ground to a standstill, thus on May 13, 1994, a conference was held at L' Fisher Hotel in Bacolod City which resulted in the signing of an MOU by Villaruel, then Bacolod Mayor Alfredo Montelibano Jr., then Vice Governor Romeo Gamboa and Sugarland Hotel represented by Felix Yusay for the demolition of a portion of the top floor of Sugarland Hotel.

The MOU contained terms and conditions defining the rights and obligations of the parties, but in the course of its implementation something went wrong, the judge said.

Sugarland Hotel had gone to the conference table and signed the MOU in good faith and felt betrayed by the other signatories and went to court to seek redress, the judge noted.

The hotel, through its lawyer Reynaldo Bagatsing, filed a complaint for rescission with damages or specific performance with damages with application for a writ of preliminary injunction and or temporary restraining order against the Department of Transportation and Communication represented by Jesus Garcia, the Air Transportation Office headed by Villaruel, Negros Occidental represented by then Gov. Rafael Coscolluela, Bacolod City represented by Montelibano, the City Sangguniang Panlungsod represented by then Vice Mayor Leonardia and the City Engineer of Bacolod City.

The judge ruled that the defendants are guilty of breach and bad faith in the performance of what was incumbent upon them in the MOU.

After Sugarland Hotel had accomplished 95 percent of the demolition work in compliance with the MOU the Bacolod and Negros Occidental governments failed to pay the hotel and, instead, the Bacolod Sanggunian declared it a nuisance and authorized extra legal- means to finish the demolition, the judge said.

The province also offered the lame excuse of lack of compliance with Commission on Audit auditing requirements to justify its failure and refusal to pay the hotel the amount it had set aside for the purpose, the judge said.

Despite the fact that the MOU called for a joint survey by all the parties, the judge also noted that ATO, through Villaruel, unilaterally conducted a survey in July 1994 and ordered the immediate demolition of the remaining portion of the fourth floor of the hotel.

Villaruel also issued an additional order to include in the demolition the parapet of the hotel that was already beyond 1.7 meters of the alleged excess in the obstruction plan, the judge said.

Delariarte ruled that Sugarland Hotel was not an obstruction to aerial navigation and did not violate height requirements contrary to the claim of Villaruel, and could not be considered a nuisance.

Because of this, the judge said Sugarland Hotel is entitled to payment of damages from the defendants for breach and bad faith in the performance of their obligation and other acts of omission.

Delariarte ordered the Bacolod and Negros Occidental governments to pay Sugarland Hotel P4 million and P3.6 million plus interest of 12 percent per annum computed from May 25, 1994, respectively, representing then value of the demolished fourth floor as appraised by the United Architects Guild of the Philippines, Bacolod City chapter.

The defendants were also jointly ordered to pay Sugarland Hotel P12 million by way of unearned profits for the period that it stopped operations because of the demolition.

"The records show that, due to unwarranted demolition of its fourth floor, Sugarland Hotel was forced to close business for more than three years depriving it of it income during this period of closure," Delariarte said.

Sugarland Hotel contended that demolition caused the roof of the hotel to leak.

Worst, the hotel had to lay off its employees on account of the hotel's unwarranted closure, the judge added.

The defendants were also ordered to jointly pay the hotel owner P1 million in moral damages, P1 million as exemplary damages, P600,000 in attorney's fees and the cost of the suit.

The judge also ordered the DOTC and ATO to reimburse the Bacolod and Negros Occidental governments P4 million and P3.6 million respectively.

Valencia said there is good ground for the provincial government to appeal of the decision, which is now being studied.

He pointed out that while the provincial government was duly represented by Gamboa in the signing of the MOU, to be ordered to pay P12 million for loss of profits and P2 million in moral and exemplary damages and P600,00 in attorneys fees is excessive and unwarranted.

He pointed out that the provincial government did not take part in the actual demolition, so why should it be jointly and severely liable, he said.

While there was an amount appropriated by the provincial government to reimburse Sugarland Hotel, Valencia said it also has to be proven that Sugarland complied with its obligation under the MOU.

It was the position of the province that Sugarland Hotel did not, so why should the provincial government be obliged to pay? he asked.*CPG

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