G.R. No. 168770 Case Digest

ANUNCIACION VDA. DE OUANO, MARIO P.
OUANO, LETICIA OUANO ARNAIZ,and CIELO OUANO

MARTINEZ,G.R. No. 168770 February 9, 2011vs.
ContractsTHE REPUBLIC OF THE PHILIPPINES, THE MACTAN-CEBU INTERNATIONALAIRPORT AUTHORITY,

and THE REGISTER OF DEEDS FOR THE CITY OF CEBU,MACTAN-CEBU INTERNATIONAL AIRPORT
AUTHORITY (MCIAA),vs.RICARDO L. INOCIAN, in his personal capacity and as Attorney-in-Fact
ofOLYMPIA E. ESTEVES, EMILIA E. BACALLA, RESTITUTA E. MONTANA, and RAULL. INOCIAN; and ALETHA
SUICO MAGAT, in her personal capacity and asAttorney-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,G.R. No. 168812FACTS:In 1949, the National
Airport Corporation (NAC), MCIAA’s predecessor agency, pursueda 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 ofthe Banilad Estate. As the landowners would later claim, the government negotiatingteam, as
a sweetener, assured them that they could repurchase their respective landsshould the Lahug Airport
expansion project do not push through or once the LahugAirport closes or its operations
transferred to Mactan-Cebu Airport. Some of thelandowners accepted the assurance and
executed deeds of sale with a right ofrepurchase. Others, however, including the owners of the
aforementioned lots, refusedto sell because the purchase price offered was viewed as way below
market, forcing thehand 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, docketedas Civil Case No. R-1881 entitled
Republic v. Damian Ouano, et al.In view of the adverted buy-back assurance made by the government,
the owners of thelots no longer appealed the decision of the trial court.Following the finality of
thejudgment of condemnation, certificates of title for the covered parcels of land wereissued in the
name of the Republic which, pursuant to Republic Act No. 6958,weresubsequently transferred to
MCIAA.At the end of 1991, or soon after the transfer of the aforesaid lots to MCIAA, LahugAirport
completely ceased operations, Mactan Airport having opened to accommodateincoming and outgoing
commercial flights. On the ground, the expropriated lots were
Contractsnever utilized for the purpose they were taken as no expansion of Lahug Airport
wasundertaken. This development prompted the former lot owners to formally demand fromthe
government that they be allowed to exercise their promised right to repurchase. Thedemands went
unheeded. Civil suits followed.G.R. No. 168770 (Ouano Petition)Soon after the MCIAA jettisoned the
Lahug Airport expansion project, informal settlersentered and occupied Lot No. 763-A which, before its
expropriation, belonged to theOuanos. The Ouanos then formally asked to be allowed to exercise their
right torepurchase the aforementioned lot, but the MCIAA ignored the demand. ISSUE:Whether or not
petitioner Ouanos are entitled to reconveyance of the subject propertieson the basis of an alleged
verbal promise or assurance of the NAC officials that theproperties will be returned if the airport project
would be abandoned.HELD:The petition 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 ofthe final decree of expropriation in Civil Case No. R-1881 for the purpose they
wereoriginally taken by the government, i.e., for the expansion and development of
LahugAirport.Second, the Lahug Airport had been closed and abandoned. A significant portion of ithad,
in fact, been purchased by a private corporation for development as a commercialcomplex.Third, it has
been preponderantly established by evidence that the NAC, through itsteam of negotiators, had given
assurance to the affected landowners that they would beentitled to repurchase their respective lots in
the event they are no longer used forairport purposes."No less than Asterio Uy," the Court noted inHeirs
of Moreno, "one ofthe members of the CAA Mactan Legal Team, which interceded for the acquisition of
thelots for the Lahug Airport’s expansion, affirmed that persistent assurances were given tothe
landowners to the effect that as soon as the Lahug Airport is abandoned or
Contractstransferred to Mactan, the lot owners would be able to reacquire their properties."22InCivil
Case No. CEB-20743, Exhibit "G," the transcript of the deposition2of Anunciacionvda. de Ouano covering
the assurance made had been formally offered in evidence andduly 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, recognizedthe reversionary rights of the suing former lot owners or their
successors ininterest24and resolved the case accordingly. In point with respect to the
representationand promise of the government to return the lots taken should the planned
airportexpansion do not materialize is what the Court said inHeirs of Moreno,thus:This is a difficult case
calling for a difficult but just solution. To begin with there existsanundeniable historical narrativethat the
predecessors of respondent MCIAA hadsuggested to the landowners of the properties covered by the
Lahug Airport expansionscheme that they could repurchase their properties at the termination of the
airport’svenue. Some acted on this assurance and sold their properties; other landowners heldout and
waited for the exercise of eminent domain to take its course until finally comingto terms with
respondent’s predecessors that they would not appeal nor block furtherjudgment of condemnation if
the right of repurchase was extended to them. A handfulfailed to prove that they acted on such
assurance when they parted with ownership oftheir land.25(Emphasis supplied; citations omitted.)For
perspective,Heirs of Moreno––later followed byMCIAA v. Tudtud (Tudtud)and theconsolidated cases at
bar––is cast under the same factual setting and centered on theexpropriation of privately-owned lots for
the public purpose of expanding the LahugAirport and the alleged promise of reconveyance given by the
negotiating NAC officialsto the private lot owners. All the lots being claimed by the former owners or
successors-in-interest of the former owners in theHeirs of Moreno,Tudtud, and the present caseswere
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 uponthe payment of the condemnation price
since thepublic purposeof the expropriationwas 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 inthese consolidated cases have already
previously been passed upon, discussed atlength, and practically peremptorily resolved inHeirs of
Morenoand the November2008Tudtudruling. 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 MorenoinHeirs of
Morenoand Benjamin Tudtud inTudtud. Be that as it may, there is no reasonwhy the ratio decidendi
inHeirs of MorenoandTudtudshould not be made to apply topetitioners Ouanos and respondents
Inocians such that they shall be entitled to recover
Contractstheir or their predecessors’ respective properties under the same manner

andarrangement as the heirs of Moreno and Tudtud.Stare decisis et non quieta movere(toadhere to
precedents, and not to unsettle things which are established).27Under 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 thesame 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 withoutthe
writing, or secondary evidence of its contents.MCIAA’s invocation of the Statute of Frauds is misplaced
primarily because the statuteapplies only to executory and not to completed, executed, or partially
consummatedcontracts.Carbonnel v. Poncio, et al., quoting Chief Justice Moran, explains
therationale behind this rule, thusly:x x x "The reason is simple. In executory contracts there is a wide
field for fraudbecause unless they may be in writing there is no palpable evidence of the intention ofthe
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 ofparol evidence would promote fraud or
bad faith, for it would enable the defendant tokeep the benefits already derived by him from the
transaction in litigation, and at thesame time, evade the obligations, responsibilities or liabilities
assumed or contracted byhim thereby.(Emphasis in the original.)Analyzing the situation of the cases at
bar, there can be no serious objection to theproposition that the agreement package between the
government and the private lotowners was already partially performed by the government through the
acquisition ofthe lots for the expansion of the Lahug airport. The parties, however, failed
toaccomplish the more important condition in the CFI decision decreeing the expropriationof the lots
litigated upon: the expansion of the Lahug Airport. The project––the publicpurpose behind the forced
property taking––was, in fact, never pursued and, as aconsequence, the lots expropriated were
abandoned. Be that as it may, the two groupsof landowners can, in an action to compel MCIAA to make
good its oral undertaking toallow repurchase, adduce parol evidence to prove the transaction.The Court,
in the recent MCIAA v. Lozada, Sr., revisited and abandoned the Fery rulingthat the former owner is not
entitled to reversion of the property even if the publicpurpose were not pursued and were abandoned,
thus:On this note, we take this opportunity to revisit our ruling inFery, which involved anexpropriation
suit commenced upon parcels of land to be used as a site for a public
Contractsmarket. Instead of putting up a public market, respondent Cabanatuan constructedresidential

houses for lease on the area. Claiming that the municipality lost its right tothe property taken since it did
not pursue its public purpose, petitioner Juan Fery, theformer owner of the lots expropriated, sought to
recover his properties. However, as hehad admitted that, in 1915, respondent Cabanatuan acquired a
fee simple title to thelands in question, judgment was rendered in favor of the municipality,
followingAmerican jurisprudence, particularlyCity of Fort Wayne v. Lake Shore & M.S. RY.Co.,McConihay
v. Theodore Wright,andReichling v. Covington Lumber Co.,alluniformly holding that the transfer
to a third party of the expropriated real property,which necessarily resulted in the abandonment of the
particular public purpose forwhich the property was taken, is not a ground for the recovery of the same
by itsprevious owner, the title of the expropriating agency being one of fee simple.Obviously,Ferywas
not decided pursuant to our now sacredly held constitutional rightthat private property shall not be
taken for public use without just compensation.It iswell settled that the taking of private property by the
Governments power of eminentdomain is subject to two mandatory requirements: (1) that it is for a
particular publicpurpose; and (2) that just compensation be paid to the property owner.
Theserequirements partake of the nature of implied conditions that should be complied with toenable
the condemnor to keep the property expropriated.

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ANUNCIACION VDA. DE OUANO, MARIO P.

OUANO, LETICIA OUANO ARNAIZ,and CIELO OUANO

ContractsTHE REPUBLIC OF THE PHILIPPINES, THE MACTAN-CEBU INTERNATIONALAIRPORT AUTHORITY,

Contractstheir or their predecessors’ respective properties under the same manner

Contractsmarket. Instead of putting up a public market, respondent Cabanatuan constructedresidential

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