SPOUSES ANTONIO and FE G.R. No.

156684
YUSAY,
Petitioners, Present:

CARPIO MORALES, Chairperson,

BRION,
-versus - BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.

COURT OF APPEALS, CITY Promulgated:

MAYOR and CITY COUNCIL
OF MANDALUYONG CITY, April 6, 2011
Respondents.
x-----------------------------------------------------------------------------------------x

RESOLUTION

BERSAMIN, J.:

The petitioners appeal the adverse decision promulgated on October 18, 2002[1] and resolution
promulgated on January 17, 2003,[2] whereby the Court of Appeals (CA) reversed and set aside
the order issued in their favor on February 19, 2002 by the Regional Trial Court, Branch 214, in
Mandaluyong City (RTC).[3] Thereby, the CA upheld Resolution No. 552, Series of 1997,
adopted by the City of Mandaluyong (City) authorizing its then City Mayor to take the necessary
legal steps for the expropriation of the parcel of land registered in the names of the petitioners.

We affirm the CA.

Antecedents

The petitioners owned a parcel of land with an area of 1,044 square meters situated
between Nueve de Febrero Street and Fernandez Street in Barangay
Mauway, Mandaluyong City. Half of their land they used as their residence, and the rest they
rented out to nine other families. Allegedly, the land was their only property and only source of
income.

On October 2, 1997, the Sangguniang Panglungsod of Mandaluyong City adopted Resolution

No. 552, Series of 1997, to authorize then City Mayor Benjamin S. Abalos, Sr. to take the
necessary legal steps for the expropriation of the land of the petitioners for the purpose of
developing it for low cost housing for the less privileged but deserving city inhabitants. The
resolution reads as follows:

RESOLUTION NO. 552, S-1997[4]

RESOLUTION AUTHORIZING HON. BENJAMIN S. ABALOS TO TAKE

THE NECESSARY LEGAL STEPS FOR THE EXPROPRIATION OF A
PARCEL OF LAND SITUATED ALONG DR.
JOSE FERNANDEZ STREET, BARANGAY MAUWAY, CITY
OF MANDALUYONG, OWNED BY MR. ANTONIO YUSAY

WHEREAS, there is a parcel of land situated along Dr. Jose Fernandez Street,
Barangay Mauway, City of Mandaluyong, owned and registered in the name of
MR. ANTONIO YUSAY;

WHEREAS, this piece of land have been occupied for about ten (10) years by
many financially hard-up families which the City Government of Mandaluyong
desires, among other things, to provide modest and decent dwelling;

WHEREAS, the said families have already negotiated to acquire this land but was
refused by the above-named owner in total disregard to the City Governments
effort of providing land for the landless;

WHEREAS, the expropriation of said land would certainly benefit public interest,
let alone, a step towards the implementation of social justice and urban land
reform in this City;

WHEREAS, under the present situation, the City Council deems it necessary to
authorize Hon. Mayor BENJAMIN S. ABALOS to institute expropriation
proceedings to achieve the noble purpose of the City Government of
Mandaluyong.

NOW, THEREFORE, upon motion duly seconded, the City Council of

Mandaluyong, in session assembled, RESOLVED, as it hereby RESOLVES, to
authorize, as it is hereby authorizing, Hon. Mayor BENJAMIN S. ABALOS, to
institute expropriation proceedings against the above-named registered owner of
that parcel of land situated along Dr. Jose Fernandez Street, Barangay Mauway,
City of Mandaluyong, (f)or the purpose of developing it to a low-cost housing
project for the less privileged but deserving constituents of this City.

ADOPTED on this 2nd day of October 1997 at the City of Mandaluyong.

Sgd. Adventor R. Delos Santos

Acting Sanggunian Secretary

Attested: Approved:
 Sgd. Roberto J. Francisco Sgd. Benjamin S. Abalos
City Councilor & Acting City Mayor
Presiding Officer

Notwithstanding that the enactment of Resolution No. 552 was but the initial step in the Citys
exercise of its power of eminent domain granted under Section 19 of the Local Government
Code of 1991, the petitioners became alarmed, and filed a petition for certiorari and prohibition
in the RTC, praying for the annulment of Resolution No. 552 due to its being unconstitutional,
confiscatory, improper, and without force and effect.

The City countered that Resolution No. 552 was a mere authorization given to the City Mayor to
initiate the legal steps towards expropriation, which included making a definite offer to purchase
the property of the petitioners; hence, the suit of the petitioners was premature.

On January 31, 2001, the RTC ruled in favor of the City and dismissed the petition for lack of
merit, opining that certiorari did not lie against a legislative act of the City Government, because
the special civil action of certiorari was only available to assail judicial or quasi-judicial acts
done without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction; that the special civil action of prohibition did not also lie under the
circumstances considering that the act of passing the resolution was not a judicial, or quasi-
judicial, or ministerial act; and that notwithstanding the issuance of Resolution No. 552, the City
had yet to commit acts of encroachment, excess, or usurpation, or had yet to act without or in
excess of jurisdiction or with grave abuse of discretion amounting lack or in excess of
jurisdiction.

However, on February 19, 2002, the RTC, acting upon the petitioners motion for reconsideration,
set aside its decision and declared that Resolution No. 552 was null and void. The RTC held that
the petition was not premature because the passage of Resolution No. 552 would already pave
the way for the City to deprive the petitioners and their heirs of their only property; that there
was no due process in the passage of Resolution No. 552 because the petitioners had not been
invited to the subsequent hearings on the resolution to enable them to ventilate their opposition;
and that the purpose for the expropriation was not for public use and the expropriation would not
benefit the greater number of inhabitants.

Aggrieved, the City appealed to the CA.

 In its decision promulgated on October 18, 2002, the CA concluded that the reversal of
the January 31, 2001 decision by the RTC was not justified because Resolution No. 552 deserved
to be accorded the benefit of the presumption of regularity and validity absent any sufficient
showing to the contrary; that notice to the petitioners (Spouses Yusay) of the succeeding
hearings conducted by the City was not a part of due process, for it was enough that their views
had been consulted and that they had been given the full opportunity to voice their protest; that to
rule otherwise would be to give every affected resident effective veto powers in law-making by a
local government unit; and that a public hearing, although necessary at times, was not
indispensable and merely aided in law-making.

The CA disposed as follows:

WHEREFORE, premises considered, the questioned order of the Regional Trial

Court, Branch 214, Mandaluyong City dated February 19, 2002 in SCA Case No.
15-MD, which declared Resolution No. 552, Series of 1997 of the City of
Mandaluyong null and void, is hereby REVERSED and SET ASIDE. No costs.

SO ORDERED.[5]

The petitioners moved for reconsideration, but the CA denied their motion. Thus, they appeal to
the Court, posing the following issues, namely:

1. Can the validity of Resolution No. 552 be assailed even before its
implementation?

2. Must a citizen await the takeover and possession of his property by the local
government before he can go to court to nullify an unjust expropriation?
Before resolving these issues, however, the Court considers it necessary to first determine
whether or not the action for certiorari and prohibition commenced by the petitioners in the RTC
was a proper recourse of the petitioners.

Ruling

We deny the petition for review, and find that certiorari and prohibition were not
available to the petitioners under the circumstances. Thus, we sustain, albeit upon different
grounds, the result announced by the CA, and declare that the RTC gravely erred in giving due
course to the petition for certiorari and prohibition.
 1.
Certiorari does not lie to assail the issuance of
a resolution by the Sanggunian Panglungsod

The special civil action for certiorari is governed by Rule 65 of the 1997 Rules of Civil
Procedure, whose Section 1 provides:

Section 1. Petition for certiorari. When any tribunal, board or officer

exercising judicial or quasi-judicial functions has acted without or in excess of its
or his jurisdiction, or with grave abuse of discretion amounting to lack or excess
of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy
in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such tribunal,
board or officer, and granting such incidental reliefs as law and justice may
require.
xxx

For certiorari to prosper, therefore, the petitioner must allege and establish the
concurrence of the following requisites, namely:

(a) The writ is directed against a tribunal, board, or officer exercising judicial or
quasi-judicial functions;

(b) Such tribunal, board, or officer has acted without or in excess of jurisdiction,
or with grave abuse of discretion amounting to lack or excess of jurisdiction;
and

(c) There is no appeal or any plain, speedy, and adequate remedy in the ordinary
course of law.[6]

It is further emphasized that a petition for certiorari seeks solely to correct defects in
jurisdiction,[7] and does not correct just any error or mistake committed by a court, board, or
officer exercising judicial or quasi-judicial functions unless such court, board, or officer thereby
acts without jurisdiction or in excess of jurisdiction or with such grave abuse of discretion
amounting to lack of jurisdiction.[8]

The first requisite is that the respondent tribunal, board, or officer must be exercising
judicial or quasi-judicial functions. Judicial function, according to Bouvier,[9] is the exercise of
the judicial faculty or office; it also means the capacity to act in a specific way which appertains
to the judicial power, as one of the powers of government. The term, Bouvier continues,[10] is
used to describe generally those modes of action which appertain to the judiciary as a department
of organized government, and through and by means of which it accomplishes its purpose and
exercises its peculiar powers.

Based on the foregoing, certiorari did not lie against the Sangguniang Panglungsod,
which was not a part of the Judiciary settling an actual controversy involving legally demandable
and enforceable rights when it adopted Resolution No. 552, but a legislative and policy-making
body declaring its sentiment or opinion.

Nor did the Sangguniang Panglungsod abuse its discretion in adopting Resolution No.
552. To demonstrate the absence of abuse of discretion, it is well to differentiate between a
resolution and an ordinance. The first is upon a specific matter of a temporary nature while the
latter is a law that is permanent in character.[11] No rights can be conferred by and be inferred
from a resolution, which is nothing but an embodiment of what the lawmaking body has to say in
the light of attendant circumstances. In simply expressing its sentiment or opinion through the
resolution, therefore, the Sangguniang Panglungsodin no way abused its discretion, least of all
gravely, for its expression of sentiment or opinion was a constitutionally protected right.

Moreover, Republic Act No. 7160 (The Local Government Code) required the City to
pass an ordinance, not adopt a resolution, for the purpose of initiating an expropriation
proceeding. In this regard, Section 19 of The Local Government Code clearly provides, viz:

Section 19. Eminent Domain. A local government unit may, through its
chief executive and acting pursuant to an ordinance, exercise the power of
eminent domain for public use, or purpose, or welfare for the benefit of the poor
and the landless, upon payment of just compensation, pursuant to the provisions
of the Constitution and pertinent laws: Provided, however, That the power of
eminent domain may not be exercised unless a valid and definite offer has been
previously made to the owner, and such offer was not accepted: Provided, further,
That the local government unit may immediately take possession of the property
upon the filing of the expropriation proceedings and upon making a deposit with
the proper court of at least fifteen percent (15%) of the fair market value of the
property based on the current tax declaration of the property to be expropriated:
Provided, finally, That, the amount to be paid for the expropriated property shall
be determined by the proper court, based on the fair market value at the time of
the taking of the property.
 A resolution like Resolution No. 552 that merely expresses the sentiment of
the Sangguniang Panglungsod is not sufficient for the purpose of initiating an expropriation
proceeding. Indeed, in Municipality of Paraaque v. V.M. Realty Corporation,[12] a case in which
the Municipality of Paraaque based its complaint for expropriation on a resolution, not an
ordinance, the Court ruled so:

The power of eminent domain is lodged in the legislative branch of

government, which may delegate the exercise thereof to LGUs, other public
entities and public utilities. An LGU may therefore exercise the power to
expropriate private property only when authorized by Congress and subject to the
latters control and restraints, imposed through the law conferring the power or in
other legislations. In this case, Section 19 of RA 7160, which delegates to LGUs
the power of eminent domain, also lays down the parameters for its exercise. It
provides as follows:

Section 19. Eminent Domain. A local government unit may, through

its chief executive and acting pursuant to an ordinance, exercise the
power of eminent domain for public use, or purpose, or welfare for the
benefit of the poor and the landless, upon payment of just compensation,
pursuant to the provisions of the Constitution and pertinent
laws: Provided, however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously made to
the owner, and such offer was not accepted: Provided, further, That the
local government unit may immediately take possession of the property
upon the filing of the expropriation proceedings and upon making a
deposit with the proper court of at least fifteen percent (15%) of the fair
market value of the property based on the current tax declaration of the
property to be expropriated: Provided, finally, That, the amount to be
paid for the expropriated property shall be determined by the proper
court, based on the fair market value at the time of the taking of the
property. (Emphasis supplied)

Thus, the following essential requisites must concur before an LGU can
exercise the power of eminent domain:

1. An ordinance is enacted by the local legislative

council authorizing the local chief executive, in behalf of the LGU, to
exercise the power of eminent domain or pursue expropriation
proceedings over a particular private property.

2. The power of eminent domain is exercised for public use, purpose

or welfare, or for the benefit of the poor and the landless.
 3. There is payment of just compensation, as required under Section
9 Article III of the Constitution and other pertinent laws.

4. A valid and definite offer has been previously made to the owner
of the property sought to be expropriated, but said offer was not
accepted.

In the case at bar, the local chief executive sought to exercise the power of
eminent domain pursuant to a resolution of the municipal council. Thus, there was
no compliance with the first requisite that the mayor be authorized through an
ordinance. Petitioner cites Camarines Sur vs. Court of Appeals to show that a
resolution may suffice to support the exercise of eminent domain by an LGU.
This case, however, is not in point because the applicable law at that time was BP
337, the previous Local Government Code, which had provided that a mere
resolution would enable an LGU to exercise eminent domain. In contrast, RA
7160, the present Local Government Code which was already in force when
the Complaint for expropriation was filed, explicitly required an ordinance
for this purpose.

We are not convinced by petitioners insistence that the terms resolution and
ordinance are synonymous. A municipal ordinance is different from a
resolution. An ordinance is a law, but a resolution is merely a declaration of
the sentiment or opinion of a lawmaking body on a specific matter. An
ordinance possesses a general and permanent character, but a resolution is
temporary in nature. Additionally, the two are enacted differently -- a third
reading is necessary for an ordinance, but not for a resolution, unless decided
otherwise by a majority of all the Sanggunian members.

If Congress intended to allow LGUs to exercise eminent domain through a

mere resolution, it would have simply adopted the language of the previous Local
Government Code. But Congress did not. In a clear divergence from the previous
Local Government Code, Section 19 of RA 7160 categorically requires that the
local chief executive act pursuant to an ordinance. Indeed, [l]egislative intent is
determined principally from the language of a statute. Where the language of a
statute is clear and unambiguous, the law is applied according to its express terms,
and interpretation would be resorted to only where a literal interpretation would
be either impossible or absurd or would lead to an injustice. In the instant case,
there is no reason to depart from this rule, since the law requiring an ordinance is
not at all impossible, absurd, or unjust.

Moreover, the power of eminent domain necessarily involves a derogation

of a fundamental or private right of the people. Accordingly, the manifest change
in the legislative language from resolution under BP 337 to ordinance under RA
7160 demands a strict construction. No species of property is held by individuals
with greater tenacity, and is guarded by the Constitution and laws more
sedulously, than the right to the freehold of inhabitants. When the legislature
 interferes with that right and, for greater public purposes, appropriates the land of
an individual without his consent, the plain meaning of the law should not be
enlarged by doubtful interpretation.

xxx

In its Brief filed before Respondent Court, petitioner argues that its
Sangguniang Bayan passed an ordinance on October 11, 1994 which reiterated its
Resolution No. 93-35, Series of 1993, and ratified all the acts of its mayor
regarding the subject expropriation.

This argument is bereft of merit. In the first place, petitioner merely alleged
the existence of such an ordinance, but it did not present any certified true copy
thereof. In the second place, petitioner did not raise this point before this Court. In
fact, it was mentioned by private respondent, and only in passing. In any event,
this allegation does not cure the inherent defect of petitioners Complaint for
expropriation filed on September 23, 1993. It is hornbook doctrine that:

x x x in a motion to dismiss based on the ground that the complaint

fails to state a cause of action, the question submitted before the court
for determination is the sufficiency of the allegations in the complaint
itself.Whether those allegations are true or not is beside the point, for
their truth is hypothetically admitted by the motion. The issue rather is:
admitting them to be true, may the court render a valid judgment in
accordance with the prayer of the complaint?

The fact that there is no cause of action is evident from the face of the
Complaint for expropriation which was based on a mere resolution. The
absence of an ordinance authorizing the same is equivalent to lack of cause of
action. Consequently, the Court of Appeals committed no reversible error in
affirming the trial courts Decision which dismissed the expropriation
suit.[13] (Emphasis supplied)

In view of the absence of the proper expropriation ordinance authorizing and providing
for the expropriation, the petition for certiorari filed in the RTC was dismissible for lack of
cause of action.

2.
Prohibition does not lie against expropriation

The special civil action for prohibition is governed also by Section 2 of Rule 65 of the
1997 Rules of Civil Procedure, which states:
 Section 2. Petition for prohibition. When the proceedings of any tribunal,
corporation, board, officer or person, whether exercising judicial, quasi-judicial or
ministerial functions, are without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction, and there is
no appeal or any other plain, speedy, and adequate remedy in the ordinary course
of law, a person aggrieved thereby may file a verified petition in the proper court,
alleging the facts with certainty and praying that judgment be rendered
commanding the respondent to desist from further proceedings in the action or
matter specified therein, or otherwise granting such incidental reliefs as law and
justice may require.
xxx

The function of prohibition is to prevent the unlawful and oppressive exercise of legal
authority and to provide for a fair and orderly administration of justice.[14] The writ of prohibition
is directed against proceedings that are done without or in excess of jurisdiction, or with grave
abuse of discretion, there being no appeal or other plain, speedy and adequate remedy in the
ordinary course of law.[15] For grave abuse of discretion to be a ground for prohibition, the
petitioner must first demonstrate that the tribunal, corporation, board, officer, or person, whether
exercising judicial, quasi-judicial or ministerial functions, has exercised its or his power in an
arbitrary or despotic manner, by reason of passion or personal hostility, which must be so patent
and gross as would amount to an evasion, or to a virtual refusal to perform the duty enjoined or
to act in contemplation of law.[16] On the other hand, the term excess of jurisdiction signifies that
the court, board, or officer has jurisdiction over a case but has transcended such jurisdiction or
acted without any authority.[17]

The petitioner must further allege in the petition and establish facts to show that any other
existing remedy is not speedy or adequate.[18] A remedy is plain, speedy and adequate if it will
promptly relieve the petitioner from the injurious effects of that judgment and the acts of the
tribunal or inferior court.[19]

The rule and relevant jurisprudence indicate that prohibition was not available to the
petitioners as a remedy against the adoption of Resolution No. 552, for the Sangguniang
Panglungsod, by such adoption, was not exercising judicial, quasi-judicial or ministerial
functions, but only expressing its collective sentiment or opinion.

Verily, there can be no prohibition against a procedure whereby the immediate

possession of the land under expropriation proceedings may be taken, provided always that due
provision is made to secure the prompt adjudication and payment of just compensation to the
owner. [20] This bar against prohibition comes from the nature of the power of eminent domain as
necessitating the taking of private land intended for public use,[21] and the interest of the affected
landowner is thus made subordinate to the power of the State. Once the State decides to exercise
its power of eminent domain, the power of judicial review becomes limited in scope, and the
courts will be left to determine the appropriate amount of just compensation to be paid to the
affected landowners. Only when the landowners are not given their just compensation for the
taking of their property or when there has been no agreement on the amount of just compensation
may the remedy of prohibition become available.

Here, however, the remedy of prohibition was not called for, considering that only a
resolution expressing the desire of the Sangguniang Panglungsod to expropriate the petitioners
property was issued. As of then, it was premature for the petitioners to mount any judicial
challenge, for the
power of eminent domain could be exercised by the City only through the filing of a verified
complaint in the proper court.[22] Before the City as the expropriating authority filed such
verified complaint, no expropriation proceeding could be said to exist. Until then, the petitioners
as the owners could not also be deprived of their property under the power of eminent domain.[23]

WHEREFORE, we affirm the decision promulgated on October 18, 2002 in CA-G.R.

SP No. 70618.

Costs to be paid by the petitioners.

SO ORDERED.

[G.R. No. 158563. June 30, 2005]

AIR TRANSPORTATION OFFICE (ATO) and MACTAN-CEBU INTERNATIONAL

AIRPORT AUTHORITY (MCIAA), petitioners, vs. APOLONIO GOPUCO,
JR., respondent.

DECISION
CHICO-NAZARIO, J.:
 When private land is expropriated for a particular public use, and that particular
public use is abandoned, does its former owner acquire a cause of action for recovery
of the property?
The trial courts ruling in the negative was reversed by the Court of Appeals in its
Decision[1] of 28 February 2001. Hence this petition for review under Rule 45 of the
1997 Rules of Civil Procedure of the said Decision of the court a quo, and its
Resolution[2] of 22 May 2003 dismissing petitioners motion for reconsideration.
The facts, as adduced from the records, are as follows:
Respondent Apolonio Gopuco, Jr. was the owner of Cadastral Lot No. 72 consisting
of 995 square meters located in the vicinity of the Lahug Airport in Cebu City covered by
Transfer Certificate of Title (TCT) No. 13061-T.
The Lahug Airport had been turned over by the Unites States Army to the Republic
of the Philippines sometime in 1947 through the Surplus Property Commission, which
accepted it in behalf of the Philippine Government. In 1947, the Surplus Property
Commission was succeeded by the Bureau of Aeronautics, which office was supplanted
by the National Airport Corporation (NAC). The NAC was in turn dissolved and replaced
with the Civil Aeronautics Administration (CAA).[3]
Sometime in 1949, the NAC informed the owners of the various lots surrounding the
Lahug Airport, including the herein respondent, that the government was acquiring their
lands for purposes of expansion. Some landowners were convinced to sell their
properties on the assurance that they would be able to repurchase the same when
these would no longer be used by the airport. Others, including Gopuco, refused to do
so.
Thus, on 16 April 1952, the CAA filed a complaint with the Court of First Instance
(CFI) of Cebu for the expropriation of Lot No. 72 and its neighboring realties, docketed
as Civil Case No. R-1881.
On 29 December 1961, the CFI promulgated a Decision,

1. Declaring the expropriation of [the subject lots, including Lot No. 72] justified and in lawful
exercise of the right of eminent domain;

2. Declaring . a balance of P1,990 in favor of Apolonio Go Puco, Jr. with legal interest from
November 16, 1947 until fully paid. ;

3. After the payment of the foregoing financial obligation to the landowners, directing the latter
to deliver to the plaintiff the corresponding Transfer Certificates of Title to their respective lots;
and upon the presentation of the said titles to the Register of Deeds, ordering the latter to cancel
the same and to issue, in lieu thereof, new Transfer Certificates of Title in the name of the
plaintiff.[4]

No appeal was taken from the above Decision on Lot No. 72, and the judgment of
condemnation became final and executory. Thereafter, on 23 May 1962, absolute title to
Lot No. 72 was transferred to the Republic of the Philippines under TCT No. 25030. [5]
 Subsequently, when the Mactan International Airport commenced operations, the
Lahug Airport was ordered closed by then President Corazon C. Aquino in a
Memorandum of 29 November 1989.[6] Lot No. 72 was thus virtually abandoned.[7]
On 16 March 1990, Gopuco wrote[8] the Bureau of Air Transportation, through the
manager of the Lahug Airport, seeking the return of his lot and offering to return the
money previously received by him as payment for the expropriation. This letter was
ignored.[9]
In the same year, Congress passed Republic Act No. 6958 creating the Mactan-
Cebu International Airport Authority (MCIAA) and in part providing for the transfer of the
assets of the Lahug Airport thereto. Consequently, on 08 May 1992, ownership of Lot
No. 72 was transferred to MCIAA under TCT No. 120356.[10]
On 06 August 1992, Apolonio Gopuco, Jr. filed an amended complaint[11] for
recovery of ownership of Lot No. 72 against the Air Transportation Office [12] and the
Province of Cebu with the Regional Trial Court (RTC) of Cebu, Branch X, docketed as
Civil Case No. CEB-11914. He maintained that by virtue of the closure of the Lahug
Airport, the original purpose for which the property was expropriated had ceased or
otherwise been abandoned, and title to the property had therefore reverted to him.
Gopuco further alleged that when the original judgment of expropriation had been
handed down, and before they could file an appeal thereto, the CAA offered them a
compromise settlement whereby they were assured that the expropriated lots would be
resold to them for the same price as when it was expropriated in the event that the
Lahug Airport would be abandoned. Gopuco claims to have accepted this
offer.[13] However, he failed to present any proof on this matter, and later admitted that
insofar as the said lot was concerned, no compromise agreement was entered into by
the government and the previous owners.[14]
Lastly, Gopuco asserted that he had come across several announcements in the
papers that the Lahug Airport was soon to be developed into a commercial complex,
which he took to be a scheme of the Province of Cebu to make permanent the
deprivation of his property.
On 20 May 1994, the trial court rendered a Decision[15] dismissing the complaint and
directing the herein respondent to pay the MCIAA exemplary damages, litigation
expenses and costs.
Aggrieved by the holding of the trial court, Gopuco appealed to the Court of
Appeals, which overturned the RTC decision, ordered the herein petitioners to reconvey
Lot No. 72 to Gopuco upon payment of the reasonable price as determined by it, and
deleted the award to the petitioners of exemplary damages, litigation expenses and
costs.
The Motion for Reconsideration was denied[16] on 22 May 2003, hence this petition,
which raises the following issues:

WHETHER THE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT HAS

THE RIGHT TO RECLAIM OWNERSHIP OVER THE SUBJECT EXPROPRIATED LOT
BASED ON THE IMPORT OF THE DECEMBER 29, 1961 DECISION IN CIVIL CASE NO.
1881.

WHETHER THE COURT OF APPEALS ERRED IN DELETING THE AWARD OF

LITIGATION EXPENSES AND COSTS IN FAVOR OF PETITIONERS.

In deciding the original expropriation case that gave rise to the present controversy,
Civil Case No. R-1881, the CFI reasoned that the planned expansion of the airport
justified the exercise of eminent domain, thus:

As for the public purpose of the expropriation proceeding, it cannot be doubted. Although the
Mactan Airport is being constructed, it does not take away the actual usefulness and importance
of the Lahug Airport; it is handling the air traffic both civilian and military. From it aircrafts fly
to Mindanao and Visayas and pass thru it on their return flights to the North and Manila. Then,
no evidence was adduced to show how soon is the Mactan Airport to be placed in operation and
whether the Lahug Airport will be closed immediately thereafter. It is for the other departments
of the Government to determine said matters. The Court cannot substitute its judgment for those
of the said departments or agencies. In the absence of such a showing, the Court will presume
that the Lahug Airport will continue to be in operation.[17] (emphasis supplied)

By the time Gopuco had filed his action for recovery of ownership of Lot No. 72,
Lahug Airport had indeed ceased to operate. Nevertheless, the trial court held:

The fact of abandonment or closure of the Lahug Airport admitted by the defendant did not by
itself, result in the reversion of the subject property back to the plaintiff. Nor did it vest in the
plaintiff the right to demand reconveyance of said property.

When real property has been acquired for public use unconditionally, either by eminent domain
or by purchase, the abandonment or non-use of the real property, does not ipso facto give to the
previous owner of said property any right to recover the same (Fery vs. Municipality of
Cabanatuan, 42 Phil. 28).[18]

In reversing the trial court, the Court of Appeals called attention to the fact that both
parties cited Fery v. Municipality of Cabanatuan,[19] which the trial court also relied on in
its Decision. The court a quo agreed in Gopucos interpretation of Fery that when the
CFI in Civil Case No. R-1881 held that,

. . . [T]hen, no evidence was adduced to show how soon is the Mactan Airport to be placed in
operation and whether the Lahug Airport will be closed immediately thereafter.In the absence of
such a showing, the Court will presume that the Lahug Airport will continue to be in operation, .
. . .[20]

the expropriation of the property was conditioned on its continued devotion to its public
purpose. Thus, although the MCIAA stressed that nothing in the judgment of
expropriation expressly stated that the lands would revert to their previous owners
should the public use be terminated or abandoned, the Court of Appeals nevertheless
ruled that,

. . . [W]hile, there is no explicit statement that the land is expropriated with the condition that
when the purpose is ended the property shall return to its owner, the full import of the decision
(in Civil Case No. R-1881) suggests that the expropriation was granted because there is no clear
showing that Lahug Airport will be closed, the moment Mactan International Airport is put to
operation. It stands to reason that should that public use be abandoned, then the expropriated
property should revert back to its former owner.

Moreover, the foundation of the right to exercise the power of eminent domain is genuine
necessity. Condemnation is justified only if it is for the public good and there is genuine
necessity of a public character. Thus, when such genuine necessity no longer exists as when the
State abandons the property expropriated, government interest must yield to the private right of
the former land owner, whose property right was disturbed as a consequence of the exercise of
eminent domain.

Justice, equity and fair play demand that the property should revert back to plaintiff-appellant
upon paying the reasonable value of the land to be based on the prevailing market value at the
time of judicial demand to recover the property. If the State expects landowners to cooperate in
its bid to take private property for its public use, so must it apply also the same standard, to allow
the landowner to reclaim the property, now that the public use has been abandoned.[21]

In this petition, the MCIAA reiterates that the Republic of the Philippines validly
expropriated Lot No. 72 through the proceedings in Civil Case No. R-1881, the
judgment of which had long become final and executory. It further asserts that said
judgment vested absolute and unconditional title in the government, specifically on the
petitioners, there having been no condition whatsoever that the property should revert to
its owners in case the Lahug Airport should be abandoned.
On the other hand, the respondent would have us sustain the appellate courts
interpretation of Fery as applied to the original judgment of expropriation, to the effect
that this was subject to the condition that the Lahug Airport will continue to be in
operation.
We resolve to grant the petition.
In Fery, the Court asked and answered the same question confronting us now:
When private land is expropriated for a particular public use, and that particular public
use is abandoned, does the land so expropriated return to its former owner? [22]

The answer to that question depends upon the character of the title acquired by the expropriator,
whether it be the State, a province, a municipality, or a corporation which has the right to acquire
property under the power of eminent domain. If, for example, land is expropriated for a
particular purpose, with the condition that when that purpose is ended or abandoned the
property shall return to its former owner, then, of course, when the purpose is terminated
or abandoned the former owner reacquires the property so expropriated. If, for example,
land is expropriated for a public street and the expropriation is granted upon condition that the
city can only use it for a public street, then, of course, when the city abandons its use as a public
street, it returns to the former owner, unless there is some statutory provision to the contrary. . .
If upon the contrary, however, the decree of expropriation gives to the entity a fee simple title,
then of course, the land becomes the absolute property of the expropriator, whether it be the
State, a province, or municipality, and in that case the non-user does not have the effect of
defeating the title acquired by the expropriation proceedings. (10 R.C.L., 240, sec. 202; 20 C.J.
1234, secs. 593-599 and numerous cases cited; Reichling vs. Covington Lumber Co., 57 Wash.,
225; 135 Am. St. Rep., 976; McConihay vs. Wright, 121 U.S., 201.)

When land has been acquired for public use in fee simple, unconditionally, either by the
exercise of eminent domain or by purchase, the former owner retains no rights in the land,
and the public use may be abandoned or the land may be devoted to a different use,
without any impairment of the estate or title acquired, or any reversion to the former
owner. (Fort Wayne vs. Lake Shore, etc. Ry. Co., 132 Ind., 558; 18 L.R.A., 367.) (Emphases
Supplied)[23]

Did the judgment of expropriation in Civil Case No. R-1881 vest absolute and
unconditional title in the government? We have already had occasion to rule on this
matter in Mactan-Cebu International Airport Authority v. Court of Appeals,[24] which is a
related action for reconveyance of a parcel of land also subject of the expropriation
proceedings in Civil Case No. R-1881. One of the landowners affected by the said
proceeding was Virginia Chiongbian, to whom the CFI ordered the Republic of the
Philippines to pay P34,415.00, with legal interest computed from the time the
government began using her land. Like the herein respondent, she did not appeal from
the CFIs judgment. Also like Gopuco, she eventually filed for the reconveyance of her
property when the airport closed. Although she was upheld by both the RTC of Cebu
and the Court of Appeals, on appeal we held that the terms of the judgment (in Civil
Case No. R-1881) are clear and unequivocal and granted title to Lot No. 941 in fee
simple to the Republic of the Philippines. There was no condition imposed to the
effect that the lot would return to CHIONGBIAN or that CHIONGBIAN had a right
to repurchase the same if the purpose for which it was expropriated is ended or
abandoned or if the property was to be used other than as the Lahug
Airport.[25] Moreover, we held that although other lot owners were able to successfully
reacquire their lands by virtue of a compromise agreement, since CHIONGBIAN was
not a party to any such agreement, she could not validly invoke the same.
The respondent would have us revisit this ruling for three reasons. First, because he
claims there is no showing that the government benefited from entering into
compromise agreements with the other lot owners; second, because such a doctrine
supposedly discriminates against those who have neither the werewithal nor the savvy
to contest the expropriation, or agree to modify the judgment; and third, because there
exists between the government and the owners of expropriated realty an implied
contract that the properties involved will be used only for the public purpose for which
they were acquired in the first place.
As to respondents first and second arguments, we have time and again ruled that a
compromise agreement, when not contrary to law, public order, public policy, morals, or
good customs, is a valid contract which is the law between the parties. [26] It is a contract
perfected by mere consent,[27] whereby the parties, making reciprocal concessions,
avoid litigation or put an end to one already commenced. It has the force of law and is
conclusive between the parties,[28] and courts will not relieve parties from obligations
voluntarily assumed, simply because their contracts turned out to be unwise. [29] Note
that respondent has not shown that any of the compromise agreements were in any
way tainted with illegality, irregularity or imprudence. Indeed, anyone who is not a party
to a contract or agreement cannot be bound by its terms, and cannot be affected by
it.[30] Since Gopuco was not a party to the compromise agreements, he cannot legally
invoke the same.[31]
Lastly, Gopuco argues that there is present, in cases of expropriation, an implied
contract that the properties will be used only for the public purpose for which they were
acquired. No such contract exists.
Eminent domain is generally described as the highest and most exact idea of
property remaining in the government that may be acquired for some public purpose
through a method in the nature of a forced purchase by the State. [32] Also often referred
to as expropriation and, with less frequency, as condemnation, it is, like police power
and taxation, an inherent power of sovereignty and need not be clothed with any
constitutional gear to exist; instead, provisions in our Constitution on the subject are
meant more to regulate, rather than to grant, the exercise of the power. It is a right to
take or reassert dominion over property within the state for public use or to meet a
public exigency and is said to be an essential part of governance even in its most
primitive form and thus inseparable from sovereignty. [33] In fact, all separate interests of
individuals in property are held of the government under this tacit agreement or implied
reservation. Notwithstanding the grant to individuals, the eminent domain, the highest
and most exact idea of property, remains in the government, or in the aggregate body of
people in their sovereign capacity; and they have the right to resume the
possession of the property whenever the public interest so requires it.[34]
The ubiquitous character of eminent domain is manifest in the nature of the
expropriation proceedings. Expropriation proceedings are not adversarial in the
conventional sense, for the condemning authority is not required to assert any
conflicting interest in the property. Thus, by filing the action, the condemnor in effect
merely serves notice that it is taking title and possession of the property, and the
defendant asserts title or interest in the property, not to prove a right to possession, but
to prove a right to compensation for the taking.[35]
The only direct constitutional qualification is thus that private property shall not be
taken for public use without just compensation.[36] This prescription is intended to
provide a safeguard against possible abuse and so to protect as well the individual
against whose property the power is sought to be enforced.[37]
In this case, the judgment on the propriety of the taking and the adequacy of the
compensation received have long become final. We have also already held that the
terms of that judgment granted title in fee simple to the Republic of the Philippines.
Therefore, pursuant to our ruling in Fery, as recently cited in Reyes v. National Housing
Authority,[38] no rights to Lot No. 72, either express or implied, have been retained by
the herein respondent.
We are not unaware of the ruling in Heirs of Timoteo Moreno v. Mactan-Cebu
International Airport Authority,[39] concerning still another set of owners of lots declared
expropriated in the judgment in Civil Case No. R-1881. As with Chiongbian and the
herein respondent, the owners of the lots therein did not appeal the judgment of
expropriation, but subsequently filed a complaint for reconveyance. In ordering MCIAA
to reconvey the said lots in their favor, we held that the predicament of petitioners
therein involved a constructive trust akin to the implied trust referred to in Art.
1454[40] of the Civil Code.[41] However, we qualified our Decision in that case, to the
effect that,

We adhere to the principles enunciated in Fery and in Mactan-Cebu International Airport

Authority, and do not overrule them. Nonetheless the weight of their import, particularly our
ruling as regards the properties of respondent Chiongbian in Mactan-Cebu International Airport
Authority, must be commensurate to the facts that were established therein as distinguished from
those extant in the case at bar. Chiongbian put forth inadmissible and inconclusive evidence,
while in the instant case we have preponderant proof as found by the trial court of the
existence of the right of repurchase in favor of petitioners.

Neither has Gopuco, in the present case, adduced any evidence at all concerning a
right of repurchase in his favor. Heirs of Moreno is thus not in point.
The trial court was thus correct in denying Gopucos claim for the reconveyance of
Lot No. 72 in his favor. However, for failure of the petitioners to present any proof that
this case was clearly unfounded or filed for purposes of harassment, or that the herein
respondent acted in gross and evident bad faith, the reimposition of litigation expenses
and costs has no basis. It is not sound public policy to set a premium upon the right to
litigate where such right is exercised in good faith, as in the present case.[42]
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in
CA-G.R. SP No. 49898 dated 28 February 2001, and its Resolution of 22 May 2003 are
hereby REVERSED and SET ASIDE. The Decision of RTC-Branch X of Cebu dated 20
May 1994 in Civil Case No. CEB-11914 is REINSTATED with the modification that the
award of exemplary damages, litigation expenses and costs are DELETED.
SO ORDERED.

MACTAN-CEBU INTERNATIONAL AIRPORT G.R. No. 176625

AUTHORITY and AIR TRANSPORTATION
OFFICE, Present:
Petitioners,
PUNO, C.J.,
CARPIO,
CORONA,
CARPIO
 - versus - MORALES,VELASCO, JR.,
NACHURA, LEONARDO-DE
CASTRO,
BRION,
PERALTA,*
BERNARDO L. LOZADA, SR., and the BERSAMIN,
HEIRS OF ROSARIO MERCADO, namely, DEL CASTILLO,
VICENTE LOZADA, MARIO M. LOZADA, ABAD,
MARCIA L. GODINEZ, VIRGINIA L. VILLARAMA, JR.,
FLORES, BERNARDO LOZADA, JR., PEREZ, and
DOLORES GACASAN, SOCORRO CAFARO MENDOZA, JJ.
and ROSARIO LOZADA, represented by
MARCIA LOZADA GODINEZ, Promulgated:
Respondents.
February 25, 2010

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to
reverse, annul, and set aside the Decision[1] dated February 28, 2006 and the Resolution[2] dated
February 7, 2007 of the Court of Appeals (CA) (Cebu City), Twentieth Division, in CA-G.R. CV
No. 65796.

The antecedent facts and proceedings are as follows:

Subject of this case is Lot No. 88-SWO-25042 (Lot No. 88), with an area of 1,017 square meters,
more or less, located in Lahug, Cebu City. Its original owner was Anastacio Deiparine when the
same was subject to expropriation proceedings, initiated by the Republic of the Philippines
(Republic), represented by the then Civil Aeronautics Administration (CAA), for the expansion
and improvement of the Lahug Airport. The case was filed with the then Court of First Instance
of Cebu, Third Branch, and docketed as Civil Case No. R-1881.

As early as 1947, the lots were already occupied by the U.S. Army. They were turned over to the
Surplus Property Commission, the Bureau of Aeronautics, the National Airport Corporation and
then to the CAA.
During the pendency of the expropriation proceedings, respondent Bernardo L. Lozada, Sr.
acquired Lot No. 88 from Deiparine. Consequently, Transfer Certificate of Title (TCT) No. 9045
was issued in Lozadas name.

On December 29, 1961, the trial court rendered judgment in favor of the Republic and ordered
the latter to pay Lozada the fair market value of Lot No. 88, adjudged at P3.00 per square meter,
with consequential damages by way of legal interest computed from November 16, 1947the time
when the lot was first occupied by the airport. Lozada received the amount of P3,018.00 by way
of payment.

The affected landowners appealed. Pending appeal, the Air Transportation Office (ATO),
formerly CAA, proposed a compromise settlement whereby the owners of the lots affected by
the expropriation proceedings would either not appeal or withdraw their respective appeals in
consideration of a commitment that the expropriated lots would be resold at the price they were
expropriated in the event that the ATO would abandon the Lahug Airport, pursuant to an
established policy involving similar cases. Because of this promise, Lozada did not pursue his
appeal. Thereafter, Lot No. 88 was transferred and registered in the name of the Republic under
TCT No. 25057.

The projected improvement and expansion plan of the old Lahug Airport, however, was not
pursued.

Lozada, with the other landowners, contacted then CAA Director Vicente Rivera, Jr., requesting
to repurchase the lots, as per previous agreement. The CAA replied that there might still be a
need for the LahugAirport to be used as an emergency DC-3 airport. It reiterated, however, the
assurance that should this Office dispose and resell the properties which may be found to be no
longer necessary as an airport, then the policy of this Office is to give priority to the former
owners subject to the approval of the President.

On November 29, 1989, then President Corazon C. Aquino issued a Memorandum to the
Department of Transportation, directing the transfer of general aviation operations of
the Lahug Airport to the MactanInternational Airport before the end of 1990 and, upon such
transfer, the closure of the Lahug Airport.

Sometime in 1990, the Congress of the Philippines passed Republic Act (R.A.) No. 6958,
entitled An Act Creating the Mactan-Cebu International Airport Authority, Transferring Existing
Assets of the Mactan International Airport and the Lahug Airport to the Authority, Vesting the
Authority with Power to Administer and Operate the Mactan International Airport and the Lahug
Airport, and For Other Purposes.

From the date of the institution of the expropriation proceedings up to the present, the public
purpose of the said expropriation (expansion of the airport) was never actually initiated, realized,
or implemented.Instead, the old airport was converted into a commercial complex. Lot No. 88
became the site of a jail known as Bagong Buhay Rehabilitation Complex, while a portion
thereof was occupied by squatters.[3]The old airport was converted into what is now known as
the Ayala I.T. Park, a commercial area.

Thus, on June 4, 1996, petitioners initiated a complaint for the recovery of possession and
reconveyance of ownership of Lot No. 88. The case was docketed as Civil Case No. CEB-18823
and was raffled to the Regional Trial Court (RTC), Branch 57, Cebu City. The complaint
substantially alleged as follows:

(a) Spouses Bernardo and Rosario Lozada were the registered owners of Lot No.
88 covered by TCT No. 9045;

(b) In the early 1960s, the Republic sought to acquire by expropriation Lot No.
88, among others, in connection with its program for the improvement and
expansion of the Lahug Airport;

(c) A decision was rendered by the Court of First Instance in favor of the
Government and against the land owners, among whom was Bernardo
Lozada, Sr. appealed therefrom;

(d) During the pendency of the appeal, the parties entered into a compromise
settlement to the effect that the subject property would be resold to the
original owner at the same price when it was expropriated in the event that
the Government abandons the Lahug Airport;

(e) Title to Lot No. 88 was subsequently transferred to the Republic of

the Philippines (TCT No. 25057);

(f) The projected expansion and improvement of the Lahug Airport did not
materialize;

(g) Plaintiffs sought to repurchase their property from then CAA Director Vicente
Rivera. The latter replied by giving as assurance that priority would be given
to the previous owners, subject to the approval of the President, should CAA
decide to dispose of the properties;
 (h) On November 29, 1989, then President Corazon C. Aquino, through a
Memorandum to the Department of Transportation and Communications
(DOTC), directed the transfer of general aviation operations at
the Lahug Airportto the Mactan-Cebu International Airport Authority;

(i) Since the public purpose for the expropriation no longer exists, the property
must be returned to the plaintiffs.[4]

In their Answer, petitioners asked for the immediate dismissal of the complaint. They
specifically denied that the Government had made assurances to reconvey Lot No. 88 to
respondents in the event that the property would no longer be needed for airport
operations. Petitioners instead asserted that the judgment of condemnation was unconditional,
and respondents were, therefore, not entitled to recover the expropriated property
notwithstanding non-use or abandonment thereof.

After pretrial, but before trial on the merits, the parties stipulated on the following set of facts:

(1) The lot involved is Lot No. 88-SWO-25042 of the Banilad Estate, situated in
the City of Cebu, containing an area of One Thousand Seventeen (1,017)
square meters, more or less;

(2) The property was expropriated among several other properties in Lahug in
favor of the Republic of the Philippines by virtue of a Decision dated
December 29, 1961 of the CFI of Cebu in Civil Case No. R-1881;

(3) The public purpose for which the property was expropriated was for the
purpose of the Lahug Airport;

(4) After the expansion, the property was transferred in the name of MCIAA;
[and]

(5) On November 29, 1989, then President Corazon C. Aquino directed the
Department of Transportation and Communication to transfer general
aviation operations of the Lahug Airport to the Mactan-Cebu International
Airport Authority and to close the Lahug Airport after such transfer[.][5]

During trial, respondents presented Bernardo Lozada, Sr. as their lone witness, while petitioners
presented their own witness, Mactan-Cebu International Airport Authority legal assistant
Michael Bacarisas.
On October 22, 1999, the RTC rendered its Decision, disposing as follows:

WHEREFORE, in the light of the foregoing, the Court hereby renders judgment
in favor of the plaintiffs, Bernardo L. Lozada, Sr., and the heirs of Rosario
Mercado, namely, Vicente M. Lozada, Marcia L. Godinez, Virginia L. Flores,
Bernardo M. Lozada, Jr., Dolores L. Gacasan, Socorro L. Cafaro and Rosario M.
Lozada, represented by their attorney-in-fact Marcia Lozada Godinez, and against
defendants Cebu-Mactan International Airport Authority (MCIAA) and Air
Transportation Office (ATO):

1. ordering MCIAA and ATO to restore to plaintiffs the possession and

ownership of their land, Lot No. 88 Psd-821 (SWO-23803), upon payment of the
expropriation price to plaintiffs; and

2. ordering the Register of Deeds to effect the transfer of the Certificate of

Title from defendant[s] to plaintiffs on Lot No. [88], cancelling TCT No. 20357 in
the name of defendant MCIAA and to issue a new title on the same lot in the
name of Bernardo L. Lozada, Sr. and the heirs of Rosario Mercado, namely:
Vicente M. Lozada, Mario M. Lozada, Marcia L. Godinez, Virginia L. Flores,
Bernardo M. Lozada, Jr., Dolores L. Gacasan, Socorro L. Cafaro and Rosario M.
Lozada.

No pronouncement as to costs.

SO ORDERED.[6]

Aggrieved, petitioners interposed an appeal to the CA. After the filing of the necessary appellate
briefs, the CA rendered its assailed Decision dated February 28, 2006, denying petitioners appeal
and affirming in toto the Decision of the RTC, Branch 57, Cebu City. Petitioners motion for
reconsideration was, likewise, denied in the questioned CA Resolution dated February 7, 2007.

Hence, this petition arguing that: (1) the respondents utterly failed to prove that there was a
repurchase agreement or compromise settlement between them and the Government; (2) the
judgment in Civil Case No. R-1881 was absolute and unconditional, giving title in fee simple to
the Republic; and (3) the respondents claim of verbal assurances from government officials
violates the Statute of Frauds.

The petition should be denied.

Petitioners anchor their claim to the controverted property on the supposition that the Decision in
the pertinent expropriation proceedings did not provide for the condition that should the intended
use of Lot No. 88 for the expansion of the Lahug Airport be aborted or abandoned, the property
would revert to respondents, being its former owners. Petitioners cite, in support of this
position, Fery v. Municipality of Cabanatuan,[7] which declared that the Government acquires
only such rights in expropriated parcels of land as may be allowed by the character of its title
over the properties

If x x x land is expropriated for a particular purpose, with the condition that when
that purpose is ended or abandoned the property shall return to its former owner,
then, of course, when the purpose is terminated or abandoned the former owner
reacquires the property so expropriated. If x x x land is expropriated for a public
street and the expropriation is granted upon condition that the city can only use it
for a public street, then, of course, when the city abandons its use as a public
street, it returns to the former owner, unless there is some statutory provision to
the contrary. x x x. If, upon the contrary, however, the decree of expropriation
gives to the entity a fee simple title, then, of course, the land becomes the absolute
property of the expropriator, whether it be the State, a province, or municipality,
and in that case the non-user does not have the effect of defeating the title
acquired by the expropriation proceedings. x x x.

When land has been acquired for public use in fee simple, unconditionally,
either by the exercise of eminent domain or by purchase, the former owner retains
no right in the land, and the public use may be abandoned, or the land may be
devoted to a different use, without any impairment of the estate or title acquired,
or any reversion to the former owner. x x x.[8]

Contrary to the stance of petitioners, this Court had ruled otherwise in Heirs of Timoteo
Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority,[9] thus

Moreover, respondent MCIAA has brought to our attention a significant and

telling portion in the Decision in Civil Case No. R-1881 validating our
discernment that the expropriation by the predecessors of respondent was ordered
under the running impression that Lahug Airport would continue in operation

As for the public purpose of the expropriation proceeding, it

cannot now be doubted. Although Mactan Airport is being
constructed, it does not take away the actual usefulness and
importance of the Lahug Airport: it is handling the air traffic both
civilian and military. From it aircrafts fly to Mindanao and Visayas
and pass thru it on their flights to the North and Manila. Then, no
evidence was adduced to show how soon is the Mactan Airport to
 be placed in operation and whether the Lahug Airport will be
closed immediately thereafter. It is up to the other departments of
the Government to determine said matters. The Court cannot
substitute its judgment for those of the said departments or
agencies. In the absence of such showing, the Court will presume
that the Lahug Airport will continue to be in operation (emphasis
supplied).

While in the trial in Civil Case No. R-1881 [we] could have simply acknowledged
the presence of public purpose for the exercise of eminent domain regardless of
the survival of Lahug Airport, the trial court in its Decision chose not to do so but
instead prefixed its finding of public purpose upon its understanding
that Lahug Airport will continue to be in operation. Verily, these meaningful
statements in the body of the Decision warrant the conclusion that the
expropriated properties would remain to be so until it was confirmed
that Lahug Airport was no longer in operation. This inference further implies two
(2) things: (a) after the Lahug Airport ceased its undertaking as such and the
expropriated lots were not being used for any airport expansion project, the rights
vis--vis the expropriated Lots Nos. 916 and 920 as between the State and their
former owners, petitioners herein, must be equitably adjusted; and (b) the
foregoing unmistakable declarations in the body of the Decision should merge
with and become an intrinsic part of the fallo thereof which under the premises is
clearly inadequate since the dispositive portion is not in accord with the findings
as contained in the body thereof.[10]

Indeed, the Decision in Civil Case No. R-1881 should be read in its entirety, wherein it is
apparent that the acquisition by the Republic of the expropriated lots was subject to the condition
that the LahugAirport would continue its operation. The condition not having materialized
because the airport had been abandoned, the former owner should then be allowed to reacquire
the expropriated property.[11]

On this note, we take this opportunity to revisit our ruling in Fery, which involved an
expropriation suit commenced upon parcels of land to be used as a site for a public
market. Instead of putting up a public market, respondent Cabanatuan constructed residential
houses for lease on the area. Claiming that the municipality lost its right to the property taken
since it did not pursue its public purpose, petitioner Juan Fery, the former owner of the lots
expropriated, sought to recover his properties. However, as he had admitted that, in 1915,
respondent Cabanatuan acquired a fee simple title to the lands in question, judgment was
rendered in favor of the municipality, following American jurisprudence, particularly City of
Fort Wayne v. Lake Shore & M.S. RY. Co.,[12] McConihay v. Theodore Wright,[13] and Reichling
v. Covington Lumber Co.,[14] all uniformly holding that the transfer to a third party of the
expropriated real property, which necessarily resulted in the abandonment of the particular
public purpose for which the property was taken, is not a ground for the recovery of the same by
its previous owner, the title of the expropriating agency being one of fee simple.

Obviously, Fery was not decided pursuant to our now sacredly held constitutional right that
private property shall not be taken for public use without just compensation.[15] It is well settled
that the taking of private property by the Governments power of eminent domain is subject to
two mandatory requirements: (1) that it is for a particular public purpose; and (2) that just
compensation be paid to the property owner. These requirements partake of the nature of implied
conditions that should be complied with to enable the condemnor to keep the property
expropriated.[16]

More particularly, with respect to the element of public use, the expropriator should commit to
use the property pursuant to the purpose stated in the petition for expropriation filed, failing
which, it should file another petition for the new purpose. If not, it is then incumbent upon the
expropriator to return the said property to its private owner, if the latter desires to reacquire the
same. Otherwise, the judgment of expropriation suffers an intrinsic flaw, as it would lack one
indispensable element for the proper exercise of the power of eminent domain, namely, the
particular public purpose for which the property will be devoted. Accordingly, the private
property owner would be denied due process of law, and the judgment would violate the property
owners right to justice, fairness, and equity.

In light of these premises, we now expressly hold that the taking of private property, consequent
to the Governments exercise of its power of eminent domain, is always subject to the condition
that the property be devoted to the specific public purpose for which it was taken. Corollarily, if
this particular purpose or intent is not initiated or not at all pursued, and is peremptorily
abandoned, then the former owners, if they so desire, may seek the reversion of the property,
subject to the return of the amount of just compensation received. In such a case, the exercise of
the power of eminent domain has become improper for lack of the required factual
justification.[17]

Even without the foregoing declaration, in the instant case, on the question of whether
respondents were able to establish the existence of an oral compromise agreement that entitled
them to repurchase Lot No. 88 should the operations of the Lahug Airport be abandoned, we rule
in the affirmative.
It bears stressing that both the RTC, Branch 57, Cebu and the CA have passed upon this factual
issue and have declared, in no uncertain terms, that a compromise agreement was, in fact,
entered into between the Government and respondents, with the former undertaking to resell Lot
No. 88 to the latter if the improvement and expansion of the Lahug Airport would not be
pursued. In affirming the factual finding of the RTC to this effect, the CA declared

Lozadas testimony is cogent. An octogenarian widower-retiree and a resident

of Moon Park, California since 1974, he testified that government representatives
verbally promised him and his late wife while the expropriation proceedings were
on-going that the government shall return the property if the purpose for the
expropriation no longer exists. This promise was made at the premises of the
airport. As far as he could remember, there were no expropriation proceedings
against his property in 1952 because the first notice of expropriation he received
was in 1962. Based on the promise, he did not hire a lawyer. Lozada was firm that
he was promised that the lot would be reverted to him once the public use of the
lot ceases. He made it clear that the verbal promise was made in Lahug with other
lot owners before the 1961 decision was handed down, though he could not name
the government representatives who made the promise. It was just a verbal
promise; nevertheless, it is binding. The fact that he could not supply the
necessary details for the establishment of his assertions during cross-examination,
but that When it will not be used as intended, it will be returned back, we just
believed in the government, does not dismantle the credibility and truthfulness of
his allegation. This Court notes that he was 89 years old when he testified in
November 1997 for an incident which happened decades ago. Still, he is a
competent witness capable of perceiving and making his perception known. The
minor lapses are immaterial. The decision of the competency of a witness rests
primarily with the trial judge and must not be disturbed on appeal unless it is clear
that it was erroneous. The objection to his competency must be made before he
has given any testimony or as soon as the incompetency becomes
apparent. Though Lozada is not part of the compromise agreement,[18] he
nevertheless adduced sufficient evidence to support his claim.[19]

As correctly found by the CA, unlike in Mactan Cebu International Airport Authority v. Court of
Appeals,[20] cited by petitioners, where respondent therein offered testimonies which were
hearsay in nature, the testimony of Lozada was based on personal knowledge as the assurance
from the government was personally made to him. His testimony on cross-examination destroyed
neither his credibility as a witness nor the truthfulness of his words.

Verily, factual findings of the trial court, especially when affirmed by the CA, are
binding and conclusive on this Court and may not be reviewed. A petition for certiorari under
Rule 45 of the Rules of Court contemplates only questions of law and not of fact.[21] Not one of
the exceptions to this rule is present in this case to warrant a reversal of such findings.

As regards the position of petitioners that respondents testimonial evidence violates the Statute
of Frauds, suffice it to state that the Statute of Frauds operates only with respect to executory
contracts, and does not apply to contracts which have been completely or partially performed, the
rationale thereof being as follows:

In executory contracts there is a wide field for fraud because unless they be in
writing there is no palpable evidence of the intention of the contracting
parties. The statute has precisely been enacted to prevent fraud. However, if a
contract has been totally or partially performed, the exclusion of parol evidence
would promote fraud or bad faith, for it would enable the defendant to keep the
benefits already delivered by him from the transaction in litigation, and, at the
same time, evade the obligations, responsibilities or liabilities assumed or
contracted by him thereby.[22]

In this case, the Statute of Frauds, invoked by petitioners to bar the claim of respondents for the
reacquisition of Lot No. 88, cannot apply, the oral compromise settlement having been partially
performed. By reason of such assurance made in their favor, respondents relied on the same by
not pursuing their appeal before the CA. Moreover, contrary to the claim of petitioners, the fact
of Lozadas eventual conformity to the appraisal of Lot No. 88 and his seeking the correction of a
clerical error in the judgment as to the true area of Lot No. 88 do not conclusively establish that
respondents absolutely parted with their property. To our mind, these acts were simply meant to
cooperate with the government, particularly because of the oral promise made to them.

The right of respondents to repurchase Lot No. 88 may be enforced based on a constructive trust
constituted on the property held by the government in favor of the former. On this note, our
ruling in Heirs of Timoteo Moreno is instructive, viz.:

Mactan-Cebu International Airport Authority is correct in stating that one would

not find an express statement in the Decision in Civil Case No. R-1881 to the
effect that the [condemned] lot would return to [the landowner] or that [the
landowner] had a right to repurchase the same if the purpose for which it was
expropriated is ended or abandoned or if the property was to be used other than
as the Lahug Airport. This omission notwithstanding, and while the inclusion of
this pronouncement in the judgment of condemnation would have been ideal, such
precision is not absolutely necessary nor is it fatal to the cause of petitioners
herein. No doubt, the return or repurchase of the condemned properties of
petitioners could be readily justified as the manifest legal effect or consequence of
the trial courts underlying presumption that Lahug Airport will continue to be in
operation when it granted the complaint for eminent domain and the airport
discontinued its activities.

The predicament of petitioners involves a constructive trust, one that is akin to the
implied trust referred to in Art. 1454 of the Civil Code, If an absolute conveyance
of property is made in order to secure the performance of an obligation of the
grantor toward the grantee, a trust by virtue of law is established. If the
fulfillment of the obligation is offered by the grantor when it becomes due, he may
demand the reconveyance of the property to him. In the case at bar, petitioners
conveyed Lots No. 916 and 920 to the government with the latter obliging itself to
use the realties for the expansion of Lahug Airport; failing to keep its bargain, the
government can be compelled by petitioners to reconvey the parcels of land to
them, otherwise, petitioners would be denied the use of their properties upon a
state of affairs that was not conceived nor contemplated when the expropriation
was authorized.

Although the symmetry between the instant case and the situation contemplated
by Art. 1454 is not perfect, the provision is undoubtedly applicable. For, as
explained by an expert on the law of trusts: The only problem of great importance
in the field of constructive trust is to decide whether in the numerous and varying
fact situations presented to the courts there is a wrongful holding of property and
hence a threatened unjust enrichment of the defendant. Constructive trusts are
fictions of equity which are bound by no unyielding formula when they are used
by courts as devices to remedy any situation in which the holder of legal title may
not in good conscience retain the beneficial interest.

In constructive trusts, the arrangement is temporary and passive in which the

trustees sole duty is to transfer the title and possession over the property to the
plaintiff-beneficiary. Of course, the wronged party seeking the aid of a court of
equity in establishing a constructive trust must himself do equity. Accordingly, the
court will exercise its discretion in deciding what acts are required of the plaintiff-
beneficiary as conditions precedent to obtaining such decree and has the
obligation to reimburse the trustee the consideration received from the latter just
as the plaintiff-beneficiary would if he proceeded on the theory of rescission. In
the good judgment of the court, the trustee may also be paid the necessary
expenses he may have incurred in sustaining the property, his fixed costs for
improvements thereon, and the monetary value of his services in managing the
property to the extent that plaintiff-beneficiary will secure a benefit from his acts.

The rights and obligations between the constructive trustee and the beneficiary, in
this case, respondent MCIAA and petitioners over Lots Nos. 916 and 920, are
echoed in Art. 1190 of the Civil Code, When the conditions have for their purpose
the extinguishment of an obligation to give, the parties, upon the fulfillment of
said conditions, shall return to each other what they have received x x x In case of
 the loss, deterioration or improvement of the thing, the provisions which, with
respect to the debtor, are laid down in the preceding article shall be applied to
the party who is bound to return x x x.[23]

On the matter of the repurchase price, while petitioners are obliged to reconvey Lot No. 88 to
respondents, the latter must return to the former what they received as just compensation for the
expropriation of the property, plus legal interest to be computed from default, which in this case
runs from the time petitioners comply with their obligation to respondents.

Respondents must likewise pay petitioners the necessary expenses they may have incurred in
maintaining Lot No. 88, as well as the monetary value of their services in managing it to the
extent that respondents were benefited thereby.

Following Article 1187[24] of the Civil Code, petitioners may keep whatever income or fruits
they may have obtained from Lot No. 88, and respondents need not account for the interests that
the amounts they received as just compensation may have earned in the meantime.

In accordance with Article 1190[25] of the Civil Code vis--vis Article 1189, which provides that
(i)f a thing is improved by its nature, or by time, the improvement shall inure to the benefit of the
creditor x x x, respondents, as creditors, do not have to pay, as part of the process of restitution,
the appreciation in value of Lot No. 88, which is a natural consequence of nature and time.[26]

WHEREFORE, the petition is DENIED. The February 28, 2006 Decision of the Court of
Appeals, affirming the October 22, 1999 Decision of the Regional Trial Court, Branch 87, Cebu
City, and its February 7, 2007 Resolution are AFFIRMED with MODIFICATION as follows:

1. Respondents are ORDERED to return to petitioners the just compensation they received for
the expropriation of Lot No. 88, plus legal interest, in the case of default, to be computed from
the time petitioners comply with their obligation to reconvey Lot No. 88 to them;

2. Respondents are ORDERED to pay petitioners the necessary expenses the latter incurred in
maintaining Lot No. 88, plus the monetary value of their services to the extent that respondents
were benefited thereby;

3. Petitioners are ENTITLED to keep whatever fruits and income they may have
obtained from Lot No. 88; and
4. Respondents are also ENTITLED to keep whatever interests the amounts they received as
just compensation may have earned in the meantime, as well as the appreciation in value of Lot
No. 88, which is a natural consequence of nature and time;

In light of the foregoing modifications, the case is REMANDED to the Regional Trial Court,
Branch 57, Cebu City, only for the purpose of receiving evidence on the amounts that
respondents will have to pay petitioners in accordance with this Courts decision. No costs.
SO ORDERED.

ANUNCIACION VDA. DE OUANO, MARIO P. G.R. No. 168770

OUANO, LETICIA OUANO ARNAIZ, and
CIELO OUANO MARTINEZ,

Petitioners,
Present:

- versus -
CORONA, C.J., Chairperson,

VELASCO, JR.,
THE REPUBLIC OF THE PHILIPPINES, THE
MACTAN-CEBU INTERNATIONAL AIRPORT LEONARDO-DE CASTRO,
AUTHORITY, and THE REGISTER OF DEEDS
FOR THE CITY OF CEBU, DEL CASTILLO,

Respondents. PEREZ, JJ.

x-------------------------------------------x

MACTAN-CEBUINTERNATIONAL AIRPORT
AUTHORITY (MCIAA),

Petitioner,
G.R. No. 168812
 - versus -

RICARDO L. INOCIAN, in his personal

capacity and as Attorney-in-Fact of
OLYMPIA E. ESTEVES, EMILIA E. BACALLA,
RESTITUTA E. MONTANA, and RAUL L.
INOCIAN; and ALETHA SUICO MAGAT, in
her personal capacity and as Attorney-in-
Fact of PHILIP M. SUICO, DORIS S. DELA
CRUZ, JAMES M. SUICO, EDWARD M.
SUICO, ROSELYN SUICO-LAWSIN, REX M.
SUICO, KHARLA SUICO-GUTIERREZ, ALBERT
CHIONGBIAN, and JOHNNY CHAN,

Respondents.

Promulgated:

February 9, 2011

x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

At the center of these two (2) Petitions for Review on Certiorari under Rule 45 is the issue of
the right of the former owners of lots acquired for the expansion of
the Lahug Airport in Cebu City to repurchase or secure reconveyance of their respective
properties.

In the first petition, docketed as G.R. No. 168770, petitioners Anunciacion vda. de
Ouano, Mario Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez (the Ouanos) seek to
nullify the Decision[1]dated September 3, 2004 of the Court of Appeals (CA) in CA-G.R. CV No.
78027, affirming the Order dated December 9, 2002 of the Regional Trial Court (RTC), Branch 57
in Cebu City, in Civil Case No. CEB-20743, a suit to compel the Republic of the Philippines and/or
the Mactan-Cebu International Airport Authority (MCIAA) to reconvey to the Ouanos a parcel of
land.

The second petition, docketed as G.R. No. 168812, has the MCIAA seeking principally to annul
and set aside the Decision[2] and Resolution[3] dated January 14, 2005 and June 29, 2005,
respectively, of the CA in CA-G.R. CV No. 64356, sustaining the RTC, Branch 13 in Cebu City in its
Decision of October 7, 1988 in Civil Case No. CEB-18370.

Per its October 19, 2005 Resolution, the Court ordered the consolidation of both cases.

Except for the names of the parties and the specific lot designation involved, the relevant
factual antecedents which gave rise to these consolidated petitions are, for the most part, as
set forth in the Courts Decision[4] of October 15, 2003, as reiterated in a Resolution[5] dated
August 9, 2005, in G.R. No. 156273 entitled Heirs of Timoteo Moreno and Maria Rotea v.
Mactan-Cebu International Airport Authority (Heirs of Moreno), and in other earlier related
cases.[6]

In 1949, the National Airport Corporation (NAC), MCIAAs predecessor agency, pursued a
program to expand the Lahug Airport in Cebu City. Through its team of negotiators, NAC met
and negotiated with the owners of the properties situated around the airport, which included
Lot Nos. 744-A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and 947 of the Banilad Estate. As the
landowners would later claim, the government negotiating team, as a sweetener, assured them
that they could repurchase their respective lands should the Lahug Airport expansion project do
not push through or once the Lahug Airportcloses or its operations transferred to Mactan-
Cebu Airport. Some of the landowners accepted the assurance and executed deeds of sale with
a right of repurchase. Others, however, including the owners of the aforementioned lots,
refused to sell because the purchase price offered was viewed as way below market, forcing the
hand of the Republic, represented by the then Civil Aeronautics Administration (CAA), as
successor agency of the NAC, to file a complaint for the expropriation of Lot Nos. 744-A, 745-A,
746, 747, 761-A, 762-A, 763-A, 942, and 947, among others, docketed as Civil Case No. R-
1881 entitled Republic v. Damian Ouano, et al.

On December 29, 1961, the then Court of First Instance (CFI) of Cebu rendered
judgment for the Republic, disposing, in part, as follows:

IN VIEW OF THE FOREGOING, judgment is hereby rendered:

1. Declaring the expropriation of Lots Nos. 75, 76, 76, 89, 90, 91, 92, 105, 106,
107, 108, 104, 921-A, 88, 93, 913-B, 72, 77, 916, 777-A, 918, 919, 920, 764-A,
988, 744-A, 745-A, 746, 747, 762-A, 763-A, 951, 942, 720-A, x x x and 947,
included in the Lahug Airport, Cebu City, justified in and in lawful exercise of the
right of eminent domain.

xxxx
3. After the payment of the foregoing financial obligation to the landowners,
directing the latter to deliver to the plaintiff the corresponding Transfer
Certificates of Title to their respective lots; and upon the presentation of the said
titles to the Register of Deeds, ordering the latter to cancel the same and to
issue, in lieu thereof, new Transfer Certificates of Title in the name of the
plaintiff.[7]

In view of the adverted buy-back assurance made by the government, the owners of the
lots no longer appealed the decision of the trial court.[8] Following the finality of the judgment
of condemnation, certificates of title for the covered parcels of land were issued in the name of
the Republic which, pursuant to Republic Act No. 6958, [9] were subsequently transferred to
MCIAA.
At the end of 1991, or soon after the transfer of the aforesaid lots to
MCIAA, Lahug Airport completely ceased operations, Mactan Airport having opened to
accommodate incoming and outgoing commercial flights. On the ground, the expropriated lots
were never utilized for the purpose they were taken as no expansion of Lahug Airport was
undertaken. This development prompted the former lot owners to formally demand from the
government that they be allowed to exercise their promised right to repurchase. The demands
went unheeded. Civil suits followed.

G.R. No. 168812 (MCIAA Petition)

On February 8, 1996, Ricardo L. Inocian and four others (all children of Isabel Limbaga who
originally owned six [6] of the lots expropriated); and Aletha Suico Magat and seven others,
successors-in-interest of Santiago Suico, the original owner of two (2) of the condemned lots
(collectively, the Inocians), filed before the RTC in Cebu City a complaint for reconveyance of
real properties and damages against MCIAA. The complaint, docketed as Civil Case No. CEB-
18370, was eventually raffled to Branch 13 of the court.

On September 29, 1997, one Albert Chiongbian (Chiongbian), alleging to be the owner of Lot
Nos. 761-A and 762-A but which the Inocians were now claiming, moved and was later allowed
to intervene.

During the pre-trial, MCIAA admitted the following facts:

1. That the properties, which are the subject matter of Civil Case No.
CEB-18370, are also the properties involved in Civil Case R-1881;

2. That the purpose of the expropriation was for the expansion of the
old Lahug Airport; that the Lahug Airport was not expanded;

3. That the old Lahug Airport was closed sometime in June 1992;
4. That the price paid to the lot owners in the expropriation case is
found in the decision of the court; and
 5. That some properties were reconveyed by the MCIAA because the
previous owners were able to secure express waivers or riders wherein the
government agreed to return the properties should the expansion of
the LahugAirport not materialize.

During trial, the Inocians adduced evidence which included the testimony of Ricardo
Inocian (Inocian) and Asterio Uy (Uy). Uy, an employee of the CAA, testified that he was a
member of the team which negotiated for the acquisition of certain lots in Lahug for the
proposed expansion of the Lahug Airport. He recalled that he acted as
the interpreter/spokesman of the team since he could speak the Cebuano dialect. He stated
that the other members of the team of negotiators were Atty. Pedro Ocampo, Atty. Lansang,
and Atty. Saligumba. He recounted that, in the course of the negotiation, their team assured
the landowners that their landholdings would be reconveyed to them in the event
the Lahug Airport would be abandoned or if its operation were transferred to
the Mactan Airport. Some landowners opted to sell, while others were of a different bent
owing to the inadequacy of the offered price.

Inocian testified that he and his mother, Isabel Lambaga, attended a meeting called by
the NAC team of negotiators sometime in 1947 or 1949 where he and the other landowners
were given the assurance that they could repurchase their lands at the same price in the event
the Lahug Airport ceases to operate. He further testified that they rejected the NACs offer.
However, he said that they no longer appealed the decree of expropriation due to the
repurchase assurance adverted to.

The MCIAA presented Michael Bacarizas (Bacarizas), who started working for MCIAA as
legal assistant in 1996. He testified that, in the course of doing research work on the lots
subject of Civil Case No. CEB-18370, he discovered that the same lots were covered by the
decision in Civil Case No. R-1881. He also found out that the said decision did not expressly
contain any condition on the matter of repurchase.

Ruling of the RTC

On October 7, 1998, the RTC rendered a Decision in Civil Case No. CEB-18370, the
dispositive portion of which reads as follows:
 WHEREFORE, in view of the foregoing, judgment is hereby rendered
directing defendant Mactan Cebu International Airport Authority (MCIAA) to
reconvey (free from liens and encumbrances) to plaintiffs Ricardo Inocian,
Olimpia E. Esteves, Emilia E. Bacalla, Restituta E. Montana and Raul Inocian Lots
No. 744-A, 745-A, 746, 762-A, 747, 761-A and to plaintiffs Aletha Suico Magat,
Philip M. Suico, Doris S. dela Cruz, James M. Suico, Edward M. Suico, Roselyn S.
Lawsin, Rex M. Suico and Kharla Suico-Gutierrez Lots No. 942 and 947, after
plaintiffs shall have paid MCIAA the sums indicated in the decision in Civil Case
No. R-1881. Defendant MCIAA is likewise directed to pay the aforementioned
plaintiffs the sum or P50,000.00 as and for attorneys fees and P10,000.00 for
litigation expenses.

Albert Chiongbians intervention should be, as it is hereby DENIED for

utter lack of factual basis.
With costs against defendant MCIAA.[10]

Therefrom, MCIAA went to the CA on appeal, docketed as CA-G.R. CV No. 64356.

Ruling of the CA

On January 14, 2005, the CA rendered judgment for the Inocians, declaring them
entitled to the reconveyance of the questioned lots as the successors-in-interest of the late
Isabel Limbaga and Santiago Suico, as the case may be, who were the former registered owners
of the said lots. The decretal portion of the CAs Decision reads:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by

us DISMISSING the appeal filed in this case and AFFFIRMING the decision
rendered by the court a quo on October 7, 1998 in Civil Case No. CEB-18370.

SO ORDERED.

The CA, citing and reproducing excerpts from Heirs of Moreno,[11] virtually held that the
decision in Civil Case No. R-1881 was conditional, stating that the expropriation of [plaintiff-
appellees] lots for the proposed expansion of the Lahug Airport was ordered by the CFI of Cebu
under the impression that Lahug Airport would continue in operation.[12] The condition, as may
be deduced from the CFIs decision, was that should MCIAA, or its precursor agency, discontinue
altogether with the operation of Lahug Airport, then the owners of the lots expropriated may, if
so minded, demand of MCIAA to make good its verbal assurance to allow the repurchase of the
properties. To the CA, this assurance, a demandable agreement of repurchase by itself, has
been adequately established.

On September 21, 2005, the MCIAA filed with Us a petition for review of the CAs Decision,
docketed as G.R. No. 168812.

G.R. No. 168770 (Ouano Petition)

Soon after the MCIAA jettisoned the Lahug Airport expansion project, informal settlers entered
and occupied Lot No. 763-A which, before its expropriation, belonged to the Ouanos. The
Ouanos then formally asked to be allowed to exercise their right to repurchase the
aforementioned lot, but the MCIAA ignored the demand. On August 18, 1997, the Ouanos
instituted a complaint before the Cebu City RTC against the Republic and the MCIAA for
reconveyance, docketed as Civil Case No. CEB-20743.

Answering, the Republic and MCIAA averred that the Ouanos no longer have
enforceable rights whatsoever over the condemned Lot No. 763-A, the decision in Civil Case No.
R-1881 not having found any reversionary condition.

Ruling of the RTC

By a Decision dated November 28, 2000, the RTC, Branch 57 in Cebu City ruled in favor
of the Ouanos, disposing as follows:

WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in
favor of the plaintiffs, Anunciacion Vda. De Ouano, Mario P. Ouano, Leticia
Ouano Arnaiz and Cielo Ouano Martinez and against the Republic of the
Philippines and Mactan Cebu International Airport Authority (MCIAA) to restore
to plaintiffs, the possession and ownership of their land, Lot No. 763-A upon
payment of the expropriation price to defendants; and

2. Ordering the Register of Deeds to effect the transfer of the Certificate of Title
from defendant Republic of the Philippines on Lot 763-A, canceling TCT No.
52004 in the name of defendant Republic of the Philippines and to issue a new
 title on the same lot in the names of Anunciacion Vda. De Ouano, Mario P.
Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez.

No pronouncement as to costs.[13]

Acting on the motion of the Republic and MCIAA for reconsideration, however, the RTC, Branch
57 in Cebu City, presided this time by Judge Enriqueta L. Belarmino, issued, on December 9,
2002, an Order[14] that reversed its earlier decision of November 28, 2000 and dismissed the
Ouanos complaint.

Ruling of the CA

In time, the Ouanos interposed an appeal to the CA, docketed as CA-G.R. CV No. 78027.
Eventually, the appellate court rendered a Decision[15] dated September 3, 2004, denying the
appeal, thus:

WHEREFORE, premises considered, the Order dated December 9, 2002, of the

Regional Trial Court, 7th Judicial Region, Branch 57, Cebu City, in Civil Case No.
CEB-20743, is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.

Explaining its case disposition, the CA stated that the decision in Civil Case No. R-1881 did not
state any condition that Lot No. 763-A of the Ouanosand all covered lots for that matterwould
be returned to them or that they could repurchase the same property if it were to be used for
purposes other than for the Lahug Airport. The appellate court also went on to declare the
inapplicability of the Courts pronouncement in MCIAA v. Court of Appeals, RTC, Branch 9, Cebu
City, Melba Limbago, et al.,[16] to support the Ouanos cause, since the affected landowners in
that case, unlike the Ouanos, parted with their property not through expropriation but via a
sale and purchase transaction.

The Ouanos filed a motion for reconsideration of the CAs Decision, but was denied per
the CAs May 26, 2005 Resolution.[17] Hence, they filed this petition in G.R. No. 168770.
The Issues
G.R. No. 168812
GROUNDS FOR ALLOWANCE OF THE PETITION

l. THE ASSAILED ISSUANCES ILLEGALLY STRIPPED THE REPUBLIC OF ITS

ABSOLUTE AND UNCONDITIONAL TITLE TO THE SUBJECT EXPROPRIATED
PROPERTIES.

ll. THE IMPUNGED DISPOSITIONS INVALIDLY OVERTURNED THIS

HONORABLE COURTS FINAL RULINGS IN FERY V. MUNICIPALITY OF
CABANATUAN, MCIAA V. COURT OF APPEALS AND REYES V. NATIONAL
HOUSING AUTHORITY.

lll. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THIS HONORABLE

COURTS RULING IN MORENO, ALBEIT IT HAS NOT YET ATTAINED FINALITY.[18]

G.R. No. 168770

Questions of law presented in this Petition

Whether or not the testimonial evidence of the petitioners proving the promises,
assurances and representations by the airport officials and lawyers are
inadmissbale under the Statute of Frauds.

Whether or not under the ruling of this Honorable Court in the heirs of Moreno
Case, and pursuant to the principles enunciated therein, petitioners herein are
entitiled to recover their litigated property.

Reasons for Allowances of this Petition

Respondents did not object during trial to the admissibility of petitioners

testimonial evidence under the Statute of Frauds and have thus waived such
objection and are now barred from raising the same. In any event, the Statute of
Frauds is not applicable herein. Consequently, petitioners evidence is admissible
and should be duly given weight and credence, as initially held by the trial court
in its original Decision.[19]
While their respective actions against MCIAA below ended differently, the Ouanos and the
Inocians proffered arguments presented before this Court run along parallel lines, both
asserting entitlement to recover the litigated property on the strength of the Courts ruling
in Heirs of Moreno. MCIAA has, however, formulated in its Consolidated Memorandum the key
interrelated issues in these consolidated cases, as follows:

I
WHETHER ABANDONMENT OF THE PUBLIC USE FOR WHICH THE SUBJECT
PROPERTIES WERE EXPROPRIATED ENTITLES PETITIONERS OUANOS, ET AL. AND
RESPONDENTS INOCIAN, ET AL. TO REACQUIRE THEM.

II

WHETHER PETITIONERS OUANOS, ET AL. AND RESPONDENTS INOCIAN, ET AL.

ARE ENTITLED TO RECONVEYANCE OF THE SUBJECT PROPERTIES SIMPLY ON THE
BASIS OF AN ALLEGED VERBAL PROMISE OR ASSURANCE OF SOME NAC
OFFICIALS THAT THE SUBJECT PROPERTIES WILL BE RETUNRED IF THE AIRPORT
PROJECT WOULD BE ABANDONED.

The Courts Ruling

The Republic and MCIAAs petition in G.R. No. 168812 is bereft of merit, while the Ouano
petition in G.R. No. 168770 is meritorious.

At the outset, three (3) fairly established factual premises ought to be emphasized:

First, the MCIAA and/or its predecessor agency had not actually used the lots subject of the
final decree of expropriation in Civil Case No. R-1881 for the purpose they were originally taken
by the government, i.e., for the expansion and development of Lahug Airport.

Second, the Lahug Airport had been closed and abandoned. A significant portion of it
had, in fact, been purchased by a private corporation for development as a commercial
complex.[20]
 Third, it has been preponderantly established by evidence that the NAC, through its
team of negotiators, had given assurance to the affected landowners that they would be
entitled to repurchase their respective lots in the event they are no longer used for airport
purposes.[21] No less than Asterio Uy, the Court noted in Heirs of Moreno, one of the members
of the CAA Mactan Legal Team, which interceded for the acquisition of the lots for the Lahug
Airports expansion, affirmed that persistent assurances were given to the landowners to the
effect that as soon as the Lahug Airport is abandoned or transferred to Mactan, the lot owners
would be able to reacquire their properties.[22] In Civil Case No. CEB-20743, Exhibit G, the
transcript of the deposition[23] of Anunciacion vda. de Ouano covering the assurance made had
been formally offered in evidence and duly considered in the initial decision of
the RTC Cebu City. In Civil Case No. CEB-18370, the trial court, on the basis of testimonial
evidence, and later the CA, recognized the reversionary rights of the suing former lot owners or
their successors in interest[24] and resolved the case accordingly. In point with respect to the
representation and promise of the government to return the lots taken should the planned
airport expansion do not materialize is what the Court said in Heirs of Moreno, thus:
This is a difficult case calling for a difficult but just solution. To begin with
there exists an undeniable historical narrative that the predecessors of
respondent MCIAA had suggested to the landowners of the properties covered
by the Lahug Airport expansion scheme that they could repurchase their
properties at the termination of the airports venue. Some acted on this
assurance and sold their properties; other landowners held out and waited for
the exercise of eminent domain to take its course until finally coming to terms
with respondents predecessors that they would not appeal nor block further
judgment of condemnation if the right of repurchase was extended to them. A
handful failed to prove that they acted on such assurance when they parted with
ownership of their land.[25] (Emphasis supplied; citations omitted.)

For perspective, Heirs of Morenolater followed by MCIAA v. Tudtud (Tudtud)[26] and the
consolidated cases at baris cast under the same factual setting and centered on the
expropriation of privately-owned lots for the public purpose of expanding
the Lahug Airport and the alleged promise of reconveyance given by the negotiating NAC
officials to the private lot owners. All the lots being claimed by the former owners or
successors-in-interest of the former owners in the Heirs of Moreno, Tudtud, and the
present cases were similarly adjudged condemned in favor of the Republic in Civil Case No. R-
1881. All the claimants sought was or is to have the condemned lots reconveyed to them upon
the payment of the condemnation price since the public purpose of the expropriation was
never met. Indeed, the expropriated lots were never used and were, in fact, abandoned by the
expropriating government agencies.
In all then, the issues and supporting arguments presented by both sets of petitioners in
these consolidated cases have already previously been passed upon, discussed at length, and
practically peremptorily resolved in Heirs of Moreno and the November 2008 Tudtud ruling. The
Ouanos, as petitioners in G.R. No. 168770, and the Inocians, as respondents in G.R. No. 168812,
are similarly situated as the heirs of Moreno in Heirs of Moreno and Benjamin Tudtud
in Tudtud. Be that as it may, there is no reason why the ratio decidendi in Heirs of
Moreno and Tudtud should not be made to apply to petitioners Ouanos and respondents
Inocians such that they shall be entitled to recover their or their predecessors respective
properties under the same manner and arrangement as the heirs of Moreno and Tudtud. Stare
decisis et non quieta movere (to adhere to precedents, and not to unsettle things which are
established).[27]

Just like in Tudtud and earlier in Heirs of Moreno, MCIAA would foist the theory that the
judgment of condemnation in Civil Case No. R-1881 was without qualification and was
unconditional. It would, in fact, draw attention to the fallo of the expropriation courts decision
to prove that there is nothing in the decision indicating that the government gave assurance or
undertook to reconvey the covered lots in case the Lahug airport expansion project is aborted.
Elaborating on this angle, MCIAA argues that the claim of the Ouanos and the Inocians
regarding the alleged verbal assurance of the NAC negotiating team that they can reacquire
their landholdings is barred by the Statute of Frauds.[28]

Under the rule on the Statute of Frauds, as expressed in Article 1403 of the Civil Code, a
contract for the sale or acquisition of real property shall be unenforceable unless the same or
some note of the contract be in writing and subscribed by the party charged. Subject to defined
exceptions, evidence of the agreement cannot be received without the writing, or secondary
evidence of its contents.

MCIAAs invocation of the Statute of Frauds is misplaced primarily because the statute
applies only to executory and not to completed, executed, or partially consummated
contracts.[29] Carbonnel v. Poncio, et al., quoting Chief Justice Moran, explains the rationale
behind this rule, thusly:
 x x x The reason is simple. In executory contracts there is a wide field for fraud
because unless they may be in writing there is no palpable evidence of the
intention of the contracting parties. The statute has been precisely been enacted
to prevent fraud. x x x However, if a contract has been totally or partially
performed, the exclusion of parol evidence would promote fraud or bad faith, for
it would enable the defendant to keep the benefits already derived by him from
the transaction in litigation, and at the same time, evade the obligations,
responsibilities or liabilities assumed or contracted by him thereby.[30] (Emphasis
in the original.)

Analyzing the situation of the cases at bar, there can be no serious objection to the
proposition that the agreement package between the government and the private lot owners
was already partially performed by the government through the acquisition of the lots for the
expansion of the Lahug airport. The parties, however, failed to accomplish the more important
condition in the CFI decision decreeing the expropriation of the lots litigated upon: the
expansion of the Lahug Airport. The projectthe public purpose behind the forced property
takingwas, in fact, never pursued and, as a consequence, the lots expropriated were
abandoned. Be that as it may, the two groups of landowners can, in an action to compel MCIAA
to make good its oral undertaking to allow repurchase, adduce parol evidence to prove the
transaction.

At any rate, the objection on the admissibility of evidence on the basis of the Statute of
Frauds may be waived if not timely raised. Records tend to support the conclusion that MCIAA
did not, as the Ouanos and the Inocians posit, object to the introduction of parol evidence to
prove its commitment to allow the former landowners to repurchase their respective
properties upon the occurrence of certain events.

In a bid to deny the lot owners the right to repurchase, MCIAA, citing cases,[31] points to
the dispositive part of the decision in Civil Case R-1881 which, as couched, granted the Republic
absolute title to the parcels of land declared expropriated. The MCIAA is correct about the
unconditional tone of the dispositive portion of the decision, but that actuality would not carry
the day for the agency. Addressing the matter of the otherwise absolute tenor of the CFIs
disposition in Civil Case No. R-1881, the Court, in Heirs of Moreno, after taking stock of the
ensuing portion of the body of the CFIs decision, said:
 As for the public purpose of the expropriation proceeding, it cannot now be
doubted. Although Mactan Airport is being constructed, it does not take away
the actual usefulness and importance of the Lahug Airport: it is handling the air
traffic of both civilian and military. From it aircrafts fly to Mindanao and Visayas
and pass thru it on their flights to the North and Manila. Then, no evidence was
adduced to show how soon is the Mactan Airport to be placed in operation and
whether the Lahug Airport will be closed immediately thereafter. It is up to the
other departments of the Government to determine said matters. The Court
cannot substitute its judgments for those of the said departments or agencies. In
the absence of such showing, the court will presume that the Lahug Airport will
continue to be in operation.[32] (Emphasis supplied.)

We went on to state as follows:

While the trial court in Civil Case No. R-1881 could have simply acknowledged
the presence of public purpose for the exercise of eminent domain regardless of
the survival of the Lahug Airport, the trial court in its Decision chose not to do so
but instead prefixed its finding of public purpose upon its understanding
that Lahug Airport will continue to be in operation. Verily, these meaningful
statements in the body of the Decision warrant the conclusion that the
expropriated properties would remain to be so until it was confirmed
that Lahug Airport was no longer in operation. This inference further implies two
(2) things: (a) after the Lahug Airport ceased its undertaking as such and the
expropriated lots were not being used for any airport expansion project, the
rights vis--vis the expropriated lots x x x as between the State and their former
owners, petitioners herein, must be equitably adjusted; and (b) the foregoing
unmistakable declarations in the body of the Decision should merge with and
become an intrinsic part of the fallo thereof which under the premises is clearly
inadequate since the dispositive portion is not in accord with the findings as
contained in the body thereof.[33]

Not to be overlooked of course is what the Court said in its Resolution disposing of
MCIAAs motion to reconsider the original ruling in Heirs of Moreno. In that resolution, We
stated that the fallo of the decision in Civil Case R-1881 should be viewed and understood in
connection with the entire text, which contemplated a return of the property taken if the
airport expansion project were abandoned. For ease of reference, following is what the Court
wrote:

Moreover, we do not subscribe to the [MCIAAs] contention that since the

possibility of the Lahug Airports closure was actually considered by the trial
court, a stipulation on reversion or repurchase was so material that it should not
have been discounted by the court a quo in its decision in Civil Case No. R-1881,
if, in fact, there was one. We find it proper to cite, once more, this Courts ruling
that the fallo of the decision in Civil Case No. R-1881 must be read in reference
to the other portions of the decision in which it forms a part. A reading of the
Courts judgment must not be confined to the dispositive portion alone; rather it
should be meaningfully construed in unanimity with the ratio decidendi thereof
to grasp the true intent and meaning of a decision.[34]

The Court has, to be sure, taken stock of Fery v. Municipality of Cabanatuan,[35] a case MCIAA
cites at every possible turn, where the Court made these observations:

If, for example, land is expropriated for a particular purpose, with the
condition that when that purpose is ended or abandoned the property shall
return to its former owner, then of course, when the purpose is terminated or
abandoned, the former owner reacquires the property so expropriated. x x x If,
upon the contrary, however the decree of expropriation gives to the entity a fee
simple title, then, of course, the land becomes the absolute property of the
expropriator x x x and in that case the non-user does not have the effect of
defeating the title acquired by the expropriation proceedings x x x.

Fery notwithstanding, MCIAA cannot really rightfully say that it has absolute title to the lots
decreed expropriated in Civil Case No. R-1881. The correct lesson of Fery is captured by what
the Court said in that case, thus: the government acquires only such rights in expropriated
parcels of land as may be allowed by the character of its title over the properties. In light of our
disposition in Heirs of Moreno and Tudtud, the statement immediately adverted to means that
in the event the particular public use for which a parcel of land is expropriated is abandoned,
the owner shall not be entitled to recover or repurchase it as a matter of right, unless such
recovery or repurchase is expressed in or irresistibly deducible from the condemnation
judgment. But as has been determined below, the decision in Civil Case No. R-1881 enjoined
MCIAA, as a condition of approving expropriation, to allow recovery or repurchase upon
abandonment of the Lahug airport project. To borrow from our underlying decision in Heirs of
Moreno, [n]o doubt, the return or repurchase of the condemned properties of petitioners could
readily be justified as the manifest legal effect of consequence of the trial courts underlying
presumption that Lahug Airport will continue to be in operation when it granted the complaint
for eminent domain and the airport discontinued its activities.[36]

Providing added support to the Ouanos and the Inocians right to repurchase is what in Heirs of
Moreno was referred to as constructive trust, one that is akin to the implied trust expressed in
Art. 1454 of the Civil Code,[37] the purpose of which is to prevent unjust enrichment.[38] In the
case at bench, the Ouanos and the Inocians parted with their respective lots in favor of the
MCIAA, the latter obliging itself to use the realties for the expansion of Lahug Airport; failing to
keep its end of the bargain, MCIAA can be compelled by the former landowners to reconvey the
parcels of land to them, otherwise, they would be denied the use of their properties upon a
state of affairs that was not conceived nor contemplated when the expropriation was
authorized. In effect, the government merely held the properties condemned in trust until the
proposed public use or purpose for which the lots were condemned was actually consummated
by the government. Since the government failed to perform the obligation that is the basis of
the transfer of the property, then the lot owners Ouanos and Inocians can demand the
reconveyance of their old properties after the payment of the condemnation price.

Constructive trusts are fictions of equity that courts use as devices to remedy any situation in
which the holder of the legal title, MCIAA in this case, may not, in good conscience, retain the
beneficial interest. We add, however, as in Heirs of Moreno, that the party seeking the aid of
equitythe landowners in this instance, in establishing the trustmust himself do equity in a
manner as the court may deem just and reasonable.

The Court, in the recent MCIAA v. Lozada, Sr., revisited and abandoned the Fery ruling that the
former owner is not entitled to reversion of the property even if the public purpose were not
pursued and were abandoned, thus:

On this note, we take this opportunity to revisit our ruling in Fery, which
involved an expropriation suit commenced upon parcels of land to be used as a
site for a public market. Instead of putting up a public market,
respondent Cabanatuan constructed residential houses for lease on the area.
Claiming that the municipality lost its right to the property taken since it did not
pursue its public purpose, petitioner Juan Fery, the former owner of the lots
expropriated, sought to recover his properties. However, as he had admitted
that, in 1915, respondent Cabanatuan acquired a fee simple title to the lands in
question, judgment was rendered in favor of the municipality, following
American jurisprudence, particularly City of Fort Wayne v. Lake Shore & M.S. RY.
Co., McConihay v. Theodore Wright, and Reichling v. Covington Lumber Co., all
uniformly holding that the transfer to a third party of the expropriated real
property, which necessarily resulted in the abandonment of the particular public
purpose for which the property was taken, is not a ground for the recovery of
the same by its previous owner, the title of the expropriating agency being one
of fee simple.

Obviously, Fery was not decided pursuant to our now sacredly held
constitutional right that private property shall not be taken for public use
without just compensation. It is well settled that the taking of private property
by the Governments power of eminent domain is subject to two mandatory
requirements: (1) that it is for a particular public purpose; and (2) that just
compensation be paid to the property owner. These requirements partake of the
nature of implied conditions that should be complied with to enable the
condemnor to keep the property expropriated.

More particularly, with respect to the element of public use, the

expropriator should commit to use the property pursuant to the purpose
stated in the petition for expropriation filed, failing which, it should file
another petition for the new purpose. If not, it is then incumbent upon the
expropriator to return the said property to its private owner, if the latter
desires to reacquire the same. Otherwise, the judgment of expropriation suffers
an intrinsic flaw, as it would lack one indispensable element for the proper
exercise of the power of eminent domain, namely, the particular public purpose
for which the property will be devoted. Accordingly, the private property owner
would be denied due process of law, and the judgment would violate the
property owners right to justice, fairness, and equity.

In light of these premises, we now expressly hold that the taking of

private property, consequent to the Governments exercise of its power of
eminent domain, is always subject to the condition that the property be devoted
to the specific public purpose for which it was taken. Corollarily, if this particular
purpose or intent is not initiated or not at all pursued, and is peremptorily
abandoned, then the former owners, if they so desire, may seek the reversion of
 the property, subject to the return of the amount of just compensation received.
In such a case, the exercise of the power of eminent domain has become
improper for lack of the required factual justification.[39](Emphasis supplied.)

Clinging to Fery, specifically the fee simple concept underpinning it, is no longer compelling,
considering the ensuing inequity such application entails. Too, the Court resolved Fery not
under the cover of any of the Philippine Constitutions, each decreeing that private property
shall not be taken for public use without just compensation. The twin elements of just
compensation and public purpose are, by themselves, direct limitations to the exercise of
eminent domain, arguing, in a way, against the notion of fee simple title. The fee does not vest
until payment of just compensation.[40]
In esse, expropriation is forced private property taking, the landowner being really without a
ghost of a chance to defeat the case of the expropriating agency. In other words, in
expropriation, the private owner is deprived of property against his will. Withal, the mandatory
requirement of due process ought to be strictly followed, such that the state must show, at the
minimum, a genuine need, an exacting public purpose to take private property, the purpose to
be specifically alleged or least reasonably deducible from the complaint.

Public use, as an eminent domain concept, has now acquired an expansive meaning to include
any use that is of usefulness, utility, or advantage, or what is productive of general benefit [of
the public].[41] If the genuine public necessitythe very reason or condition as it wereallowing, at
the first instance, the expropriation of a private land ceases or disappears, then there is no
more cogent point for the governments retention of the expropriated land. The same legal
situation should hold if the government devotes the property to another public use very much
different from the original or deviates from the declared purpose to benefit another private
person. It has been said that the direct use by the state of its power to oblige landowners to
renounce their productive possession to another citizen, who will use it predominantly for that
citizens own private gain, is offensive to our laws.[42]

A condemnor should commit to use the property pursuant to the purpose stated in the
petition for expropriation, failing which it should file another petition for the new purpose. If not,
then it behooves the condemnor to return the said property to its private owner, if the latter so
desires. The government cannot plausibly keep the property it expropriated in any manner it
pleases and, in the process, dishonor the judgment of expropriation. This is not in keeping with
the idea of fair play,

The notion, therefore, that the government, via expropriation proceedings, acquires
unrestricted ownership over or a fee simple title to the covered land, is no longer tenable. We
suggested as much in Heirs of Moreno and in Tudtud and more recently in Lozada, Sr.
Expropriated lands should be differentiated from a piece of land, ownership of which was
absolutely transferred by way of an unconditional purchase and sale contract freely entered by
two parties, one without obligation to buy and the other without the duty to sell. In that case,
the fee simple concept really comes into play. There is really no occasion to apply the fee
simple concept if the transfer is conditional. The taking of a private land in expropriation
proceedings is always conditioned on its continued devotion to its public purpose. As a
necessary corollary, once the purpose is terminated or peremptorily abandoned, then the
former owner, if he so desires, may seek its reversion, subject of course to the return, at the
very least, of the just compensation received.

To be compelled to renounce dominion over a piece of land is, in itself, an already bitter
pill to swallow for the owner. But to be asked to sacrifice for the common good and yield
ownership to the government which reneges on its assurance that the private property shall be
for a public purpose may be too much. But it would be worse if the power of eminent domain
were deliberately used as a subterfuge to benefit another with influence and power in the
political process, including development firms. The mischief thus depicted is not at all far-
fetched with the continued application of Fery. Even as the Court deliberates on these
consolidated cases, there is an uncontroverted allegation that the MCIAA is poised to sell, if it
has not yet sold, the areas in question to Cebu Property Ventures, Inc. This provides an added
dimension to abandon Fery.

Given the foregoing disquisitions, equity and justice demand the reconveyance by
MCIAA of the litigated lands in question to the Ouanos and Inocians. In the same token, justice
and fair play also dictate that the Ouanos and Inocian return to MCIAA what they received as
just compensation for the expropriation of their respective properties plus legal interest to be
computed from default, which in this case should run from the time MCIAA complies with the
reconveyance obligation.[43] They must likewise pay MCIAA the necessary expenses it might
have incurred in sustaining their respective lots and the monetary value of its services in
managing the lots in question to the extent that they, as private owners, were benefited
thereby.

In accordance with Art. 1187 of the Civil Code on mutual compensation, MCIAA may
keep whatever income or fruits it may have obtained from the parcels of land expropriated. In
turn, the Ouanos and Inocians need not require the accounting of interests earned by the
amounts they received as just compensation.[44]

Following Art. 1189 of the Civil Code providing that [i]f the thing is improved by its
nature, or by time, the improvement shall inure to the benefit of the creditor x x x, the
Ouanos and Inocians do not have to settle the appreciation of the values of their respective lots
as part of the reconveyance process, since the value increase is merely the natural effect of
nature and time.

Finally, We delete the award of PhP 50,000 and PhP 10,000, as attorneys fees and
litigation expenses, respectively, made in favor of the Inocians by the Cebu City RTC in its
judgment in Civil Case No. CEB-18370, as later affirmed by the CA. As a matter of sound policy,
no premium should be set on the right to litigate where there is no doubt about the bona
fides of the exercise of such right,[45] as here, albeit the decision of MCIAA to resist the former
landowners claim eventually turned out to be untenable.

WHEREFORE, the petition in G.R. No. 168770 is GRANTED. Accordingly, the CA Decision
dated September 3, 2004 in CA-G.R. CV No. 78027 is REVERSED and SET ASIDE. Mactan-Cebu
International Airport Authority is ordered to reconvey subject Lot No. 763-A to petitioners
Anunciacion vda. de Ouano, Mario P. Ouano, Leticia Ouano Arnaiz, and Cielo Ouano Martinez.
The Register of Deeds of Cebu City is ordered to effect the necessary cancellation of title and
transfer it in the name of the petitioners within fifteen (15) days from finality of judgment.
The petition of the Mactan-Cebu International Airport Authority in G.R. No.
168812 is DENIED, and the CAs Decision and Resolution dated January 14, 2005 and June 29,
2005, respectively, in CA-G.R. CV No. 64356 are AFFIRMED, except insofar as they awarded
attorneys fees and litigation expenses that are hereby DELETED. Accordingly, Mactan-Cebu
International Airport Authority is ordered to reconvey to respondents Ricardo L. Inocian,
Olympia E. Esteves, Emilia E. Bacalla, Restituta E. Montana, and Raul L. Inocian the litigated Lot
Nos. 744-A, 745-A, 746, 762-A, 747, and 761-A; and to respondents Aletha Suico Magat, Philip
M. Suico, Dolores S. dela Cruz, James M. Suico, Edward M. Suico, Roselyn S. Lawsin, Rex M.
Suico, and Kharla Suico-Gutierrez the litigated Lot Nos. 942 and 947. The Register of Deeds of
Cebu City is ordered to effect the necessary cancellation of title and transfer it in the name of
respondents within a period of fifteen (15) days from finality of judgment.

The foregoing dispositions are subject to QUALIFICATIONS, to apply to these

consolidated petitions, when appropriate, as follows:

(1) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L Inocian, et al.
in G.R. No. 168812 are ordered to return to the MCIAA the just compensation they or their
predecessors-in-interest received for the expropriation of their respective lots as stated in Civil
Case No. R-1881, within a period of sixty (60) days from finality of judgment;

(2) The MCIAA shall be entitled to RETAIN whatever fruits and income it may have
obtained from the subject expropriated lots without any obligation to refund the same to the
lot owners; and

(3) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L. Inocian, et al.
in G.R. No. 168812 shall RETAIN whatever interests the amounts they received as just
compensation may have earned in the meantime without any obligation to refund the same to
MCIAA.
SO ORDERED.

G.R. No. 87335 February 12, 1990

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
CRISTINA DE KNECHT AND THE COURT OF APPEALS, respondents.

Villanueva, Talamayan, Nieva, Elegado, and Ante Law Offices for respondent Cristina
de Knecht.

GANCAYCO, J.:

The issue posed in this case is whether an expropriation proceeding that was
determined by a final judgment of this Court may be the subject of a subsequent
legislation for expropriation.

On February 20, 1979 the Republic of the Philippines filed in the Court of First Instance
(CFI) of Rizal in Pasay City an expropriation proceedings against the owners of the
houses standing along Fernando Rein-Del Pan streets among them Cristina De Knecht
(de Knecht for short) together with Concepcion Cabarrus, and some fifteen other
defendants, docketed as Civil Case No. 7001-P.

On March 19, 1979 de Knecht filed a motion to dismiss alleging lack of jurisdiction,
pendency of appeal with the President of the Philippines, prematureness of complaint
and arbitrary and erroneous valuation of the properties. On March 29, 1979 de Knecht
filed an ex parte urgent motion for the issuance by the trial court of a restraining order to
restrain the Republic from proceeding with the taking of immediate possession and
control of the property sought to be condemned. In June, 1979 the Republic filed a
motion for the issuance of a writ of possession of the property to be expropriated on the
ground that it had made the required deposit with the Philippine National Bank (PNB) of
10% of the amount of compensation stated in the complaint. In an order dated June 14,
1979 the lower court issued a writ of possession authorizing the Republic to enter into
and take possession of the properties sought to be condemned, and created a
Committee of three to determine the just compensation for the lands involved in the
proceedings.

On July 16, 1979 de Knecht filed with this Court a petition for certiorari and prohibition
docketed as G.R. No. L-51078 and directed against the order of the lower court dated
June 14, 1979 praying that the respondent be commanded to desist from further
proceeding in the expropriation action and from implementing said order. On October
30, 1980 this Court rendered a decision, the dispositive part of which reads as follows:

WHEREFORE, the petition for certiorari and prohibition is hereby granted.

The order of June 14, 1979 authorizing the Republic of the Philippines to
take c enter upon the possession of the properties sought to be
condemned is set aside and the respondent Judge is permanently
enjoined from taking any further action on Civil Case No. 7001-P,
entitled 'Republic of the Philippines vs. Concepcion Cabarrus Vda. de
Santos, et al.' except to dismiss said case. 1

On August 8, 1981 defendants Maria Del Carmen Roxas Vda. de Elizalde, Francisco
Elizalde and Antonio Roxas moved to dismiss the expropriation action in compliance
with the dispositive portion of the aforesaid decision of this Court which had become
final and in order to avoid further damage to same defendants who were denied
possession of their properties. The Republic filed a manifestation on September 7, 1981
stating, among others, that it had no objection to the said motion to dismiss as it was in
accordance with the aforestated decision.

On September 2, 1983, the Republic filed a motion to dismiss said case due to the
enactment of the Batas Pambansa Blg. 340 expropriating the same properties and for
the same purpose. The lower court in an order of September 2, 1983 dismissed the
case by reason of the enactment of the said law. The motion for reconsideration thereof
was denied in the order of the lower court dated December 18, 1986.
De Knecht appealed from said order to the Court of Appeals wherein in due course a
decision was rendered on December 28, 1988, 2 the dispositive part of which reads as
follows:

PREMISES CONSIDERED, the order appealed from is hereby SET

ASIDE. As prayed for in the appellant's brief another Order is hereby
issued dismissing the expropriation proceedings (Civil Case No. 51078)
before the lower court on the ground that the choice of Fernando Rein-Del
Pan Streets as the line through which the Epifanio de los Santos Avenue
should be extended is arbitrary and should not receive judicial approval.

No pronouncement as to Costs. 3

Hence the Republic filed that herein petition for review of the A aforestated decision
whereby the following issues were raised:

WHETHER OR NOT THE ENACTMENT OF BATAS PAMBANSA BLG.

340 IS THE PROPER GROUND FOR THE DISMISSAL OF THE
EXPROPRIATION CASE. (PROPERLY PUT, WHETHER OR NOT THE
LOWER COURT COMMITTED GRAVE ABUSE OF DIS CRETION IN
DISMISSING CIVIL CASE NO. 7001-P UPON JUDICIAL NOTICE OF
B.P. BLG. 340).

II

WHETHER OR NOT THE DPWH'S "CHOICE" OF LAND TO BE

EXPROPRIATED IS STILL AN ISSUE UNDER THE CIRCUMSTANCES,
SAID "CHOICE" HAVING BEEN SUPPLANTED BY THE
LEGISLATURE'S CHOICE.

III

WHETHER OR NOT THE LAW OF THE CASE THEORY SHOULD BE

APPLIED TO THE CASE AT BAR. 4

The petition is impressed with merit. There is no question that as early as 1977,
pursuant to the Revised Administrative Code, the national government, through the
Department of Public Works and Highways began work on what was to be the westward
extension of Epifanio de los Santos Avenue (EDSA) outfall (or outlet) of the Manila and
suburbs flood control and drainage project and the Estero Tripa de Gallina. These
projects were aimed at: (1) easing traffic congestion in the Baclaran and outlying areas;
(2) controlling flood by the construction of the outlet for the Estero Tripa de Gallina
(which drains the area of Marikina, Pasay, Manila and Paranaque); and (3) thus
completing the Manila Flood and Control and Drainage Project.
So the petitioner acquired the needed properties through negotiated purchase starting
with the lands from Taft Avenue up to Roxas Boulevard including the lands in Fernando
Rein-Del Pan streets. It acquired through negotiated purchases about 80 to 85 percent
of the lands involved in the project whose owners did not raise any objection as to
arbitrariness on the choice of the project and of the route. It is only with respect to the
remaining 10 to 15 percent along the route that the petitioner cannot negotiate through
a sales agreement with a few land owners, including de Knecht whose holding is hardly
5% of the whole route area. Thus, as above related on February 20, 1979 the petitioner
filed the expropriation proceedings in the Court of First Instance.

There is no question that in the decision of this Court dated October 30, 1980 in De
Knecht vs. Bautista, G.R. No. L-51078, this Court held that the "choice of the Fernando
Rein-Del Pan streets as the line through which the EDSA should be extended to Roxas
Boulevard is arbitrary and should not receive judicial approval." 5 It is based on the
recommendation of the Human Settlements Commission that the choice of Cuneta
street as the line of the extension will minimize the social impact factor as the buildings
and improvement therein are mostly motels. 6

In view of the said finding, this Court set aside the order of the trial court dated June 14,
1979 authorizing the Republic of the Philippines to take possession of the properties
sought to be condemned and enjoined the respondent judge from taking any further
action in the case except to dismiss the same.

Said decision having become final no action was taken by the lower court on the said
directive of this Court to dismiss the case. Subsequently B.P. Blg. 340 was enacted by
the Batasang Pambansa on February 17, 1983. On the basis of said law petitioner filed
a motion to dismiss the case before the trial court and this was granted.

On appeal by de Knecht to the Court of Appeals the appellate court held that the
decision of the Supreme Court having become final, the petitioner's right as determined
therein should no longer be disturbed and that the same has become the law of the
case between the parties involved. Thus, the appellate court set aside the questioned
order of the trial court and issued another order dismissing the expropriation
proceedings before the lower court pursuant to the ruling in De Knecht case.

While it is true that said final judgment of this Court on the subject becomes the law of
the case between the parties, it is equally true that the right of the petitioner to take
private properties for public use upon the payment of the just compensation is so
provided in the Constitution and our laws. 7 Such expropriation proceedings may be
undertaken by the petitioner not only by voluntary negotiation with the land owners but
also by taking appropriate court action or by legislation. 8

When on February 17, 1983 the Batasang Pambansa passed B.P. Blg. 340
expropriating the very properties subject of the present proceedings, and for the same
purpose, it appears that it was based on supervening events that occurred after the
decision of this Court was rendered in De Knecht in 1980 justifying the expropriation
through the Fernando Rein-Del Pan Streets.

The social impact factor which persuaded the Court to consider this extension to be
arbitrary had disappeared. All residents in the area have been relocated and duly
compensated. Eighty percent of the EDSA outfall and 30% of the EDSA extension had
been completed. Only private respondent remains as the solitary obstacle to this project
that will solve not only the drainage and flood control problem but also minimize the
traffic bottleneck in the area.

The Solicitor General summarizing the situation said

The construction and completion of the Metro Manila Flood Control and
Drainage Project and the EDSA extension are essential to alleviate the
worsening traffic problem in the Baclaran and Pasay City areas and the
perennial flood problems. Judicial notice may be taken that these
problems bedevil life and property not only in the areas directly affected
but also in areas much beyond. Batas Pambansa Blg. 340 was enacted to
hasten 'The Project' and thus solve these problems, and its
implementation has resulted so far in an 80% completion of the EDSA
outfall and a 30% completion of the EDSA extension, all part of 'The
Project'.

This instant case stands in the way of the final solution of the above-
mentioned problems, solely because the single piece of property I
occupied' by De Knecht, although already expropriated under B.P. Blg.
340, is the only parcel of land where Government engineers could not
enter due to the 'armed' resistance offered by De Knecht, guarded and
surrounded as the lot is perennially by De Knecht's fierce private security
guards. It may thus be said that De Knecht, without any more legal
interest in the land, single-handedly stands in the way of the completion of
'The Project' essential to the progress of Metro Manila and surrounding
areas. Without the property she persists in occupying and without any
bloodletting, the EDSA outfall construction on both sides of the said
property cannot be joined together,and the flood waters of Pasay,
Paraaque and Marikina which flow through the Estero Tripa de Gallina
will continue to have no way or outlet that could drain into Manila Bay.
Without said property, the EDSA extension, already 30% completed, can
in no way be finished, and traffic will continue to clog and jam the
intersections of EDSA and Taft Avenue in Baclaran and pile up along the
airport roads.

In sum, even in the face of BP340, De Knecht holds the Legislative

sovereign will and choice inutile. 9
The Court finds justification in proceeding with the said expropriation proceedings
through the Fernando Rein-Del Pan streets from ESDA to Roxas Boulevard due to the
aforestated supervening events after the rendition of the decision of this Court in De
Knecht.

B.P. Blg. 340 therefore effectively superseded the aforesaid final and executory
decision of this Court. And the trial court committed no grave abuse of discretion in
dismissing the case pending before it on the ground of the enactment of B.P. Blg. 340.

Moreover, the said decision, is no obstacle to the legislative arm of the Government in
thereafter (over two years later in this case) making its own independent assessment of
the circumstances then prevailing as to the propriety of undertaking the expropriation of
the properties in question and thereafter by enacting the corresponding legislation as it
did in this case. The Court agrees in the wisdom and necessity of enacting B.P. Blg.
340. Thus the anterior decision of this Court must yield to this subsequent legislative
flat.

WHEREFORE, the petition is hereby GRANTED and the questioned decision of the
Court of Appeals dated December 28, 1988 and its resolution dated March 9, 1989 are
hereby REVERSED and SET ASIDE and the order of Branch III of the then Court of
First Instance of Rizal in Pasay City in Civil Case No. 7001-P dated September 2, 1983
is hereby reinstated without pronouncement as to costs.

SO ORDERED.

Separate Opinions

CRUZ, J., concurring:

While the ponencia is plain enough, I wish to make it even plainer that B.P. Blg. 340 is
not a legislative reversal of our finding in De Knecht v. Bautista, 100 SCRA 660, that the
expropriation of the petitioner's property was arbitrary. As Justice Gancayco clearly
points out, supervening events have changed the factual basis of that decision to justify
the subsequent enactment of the statute. If we are sustaining that legislation, it is not
because we concede that the lawmakers can nullify the findings of the Court in the
exercise of its discretion. It is simply because we ourselves have found that under the
changed situation, the present expropriation is no longer arbitrary.

I must add that this decision is not a reversal either of the original De Knecht case,
which was decided under a different set of facts.

Separate Opinions

CRUZ, J., concurring:

While the ponencia is plain enough, I wish to make it even plainer that B.P. Blg. 340 is
not a legislative reversal of our finding in De Knecht v. Bautista, 100 SCRA 660, that the
expropriation of the petitioner's property was arbitrary. As Justice Gancayco clearly
points out, supervening events have changed the factual basis of that decision to justify
the subsequent enactment of the statute. If we are sustaining that legislation, it is not
because we concede that the lawmakers can nullify the findings of the Court in the
exercise of its discretion. It is simply because we ourselves have found that under the
changed situation, the present expropriation is no longer arbitrary.

I must add that this decision is not a reversal either of the original De Knecht case,
which was decided under a different set of facts.