CA approves compromise deal on Smokey Mountain project

MANILA, Philippines — The Court of Appeals has affirmed the P1.12-billion compromise agreement between the National Housing Authority (NHA) and a private developer of a project in Smokey Mountain in Tondo, Manila.

In a 25-page decision promulgated last May 30 but made public Tuesday, the court’s Special First Division approved the Nov. 21, 2018, compromise deal for payment of an additional P1,122,416,969.92 to R-II Builders Inc. for the 4.5-hectare Vitas property as settlement for pending cases in court.

“Wherefore, the Compromise Agreement dated November 21, 2018 filed in CA-G.R. CV No. 99324 is approved. Judgment is hereby rendered in conformity with and embodying the terms and conditions mentioned therein. R-II Builders, Inc. and National Housing Authority are hereby enjoined to comply strictly with the terms and conditions of said Agreement,” the appeals court, through Presiding Justice Romeo Barza, stated.

The court rejected the opposition raised by the Office of the Government Corporate Counsel (OGCC), which stands as the statutory counsel of the NHA.

In his opposition, OGCC chief Elpidio Vega said NHA General Manager Marcelino Escalada had no authority from the agency to include other properties in the compromise deal particularly the supposed “variance” between its own computation and proposed settlement with R-II amounting to P1.12-billion plus 5 hectares of government property in Vitas, Tondo.

Vega also said the deal was disadvantageous to the government since R-II Builders was supposedly “overpaid by around P300 million” in an earlier settlement for a 5-hectare property.

In disagreeing with the OGCC, the appeals court said: “It bears emphasis that the General Manager, having been authorized to sign for and in (behalf) of the NHA by virtue of NHA-BR-6441, need not have a specific authority for the other mentioned properties, the same being part of the reduced amount of P1,122,416,969.92, to which the NHA freely gave its consent.”

“Significantly, jurisprudence is clear that an essential requisite of the validity of a dacion en pago, and consequently, the total extinguishment of the obligation, is the consent of both parties, which was evidence in the case at bench,” the appeals court said.

According to the court, the law only requires a compromise agreement to be based on real claims and to be agreed upon in good faith to be valid — which both parties did in this case.

In the same ruling, the court also dismissed the petition of the state-run Home Guaranty Corp. (HGC) opposing the compromise deal because of its own claims amounting to over P5 billion.

“After all, HGC is not left without any recourse in law. As the Agreement is only binding upon the parties to the compromise, there is no prejudice as to any negotiations or concessions made between HGC and the latter parties separate and distinct from the said Agreement,” the court added.

Associate Justices Jhosep Lopez and Ronaldo Roberto Martin concurred in the decision.

(Editor: Alexander T. Magno)