Republic of the 

Philippines
SUPREME COURT
Manila
 
FIRST DIVISION
 
ANUNCIACION VDA. DE   G.R. No. 168770
OUANO, MARIO P. OUANO,  
LETICIA OUANO ARNAIZ, and  
CIELO OUANO MARTINEZ, Present:
Petitioners,  
  CORONA, C.J., Chairperson,
- versus - VELASCO, JR.,
  LEONARDO-DE CASTRO,
THE REPUBLIC OF DEL CASTILLO,
THE PHILIPPINES, THE PEREZ, JJ.
MACTAN-CEBU
INTERNATIONAL AIRPORT
 
AUTHORITY, and THE  
REGISTER OF DEEDS FOR THE  
CITY OF CEBU,  
Respondents. G.R. No. 168812
x-------------------------------------------x  
   
MACTAN-  
CEBUINTERNATIONAL  
AIRPORT AUTHORITY  
(MCIAA),  
Petitioner,  
   
- 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. Promulgated:
DELA CRUZ, JAMES M. SUICO, February 9, 2011
EDWARD M. SUICO, ROSELYN
SUICO-LAWSIN, REX M. SUICO,
KHARLA SUICO-GUTIERREZ,
ALBERT CHIONGBIAN, and
JOHNNY CHAN,
Respondents.
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 Cityto 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 Airport closes or its operations
transferred to Mactan-CebuAirport. 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 Lahug Airport 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 Tudtudshould 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.
  
 
PRESBITERO J. VELASCO, JR. Associate Justice
WE CONCUR:
 
 
 
 
RENATO C. CORONA
Chief Justice
Chairperson
 
 
 
 
TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO
Associate Justice Associate Justice
 
 
 
 
 
JOSE PORTUGAL PEREZ
Associate Justice
 
 
 
 
CERTIFICATION
 
 
Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.
 
 
 
RENATO C. CORONA
Chief Justice
 [1]
 Rollo (G.R. No.168770), pp. 45-56. Penned by Associate Justice Mercedes Gozo-Dadole and concurred
in by Associate Justices Pampio A. Abarintos and Ramon M. Bato, Jr.
[2]
 Penned by Associate Justice Isaias P. Dicdican and concurred in by Associate Justices Sesinando E.
Villon and Ramon M. Bato, Jr.
[3]
 Rollo (G.R. No.168812), pp. 77-78.
[4]
 Heirs of Timoteo Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority, G.R. No.
156273, October 15, 2003, 413 SCRA 502.
[5]
 Heirs of Timoteo Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority, G.R. No.
156273, August 9, 2005, 466 SCRA 288.
[6]
 Air Transportation Office v. Gopuco, Jr., G.R. No. 158563, June 30, 2005, 462 SCRA 544; MCIAA v.
Court of Appeals, G.R. No. 139495, November 27, 2000, 346 SCRA 126.
[7]
 Rollo (G.R. No.168812), pp. 31-32.
[8]
 Id. at 10.
[9]
 An Act Creating [MCIAA], Transferring Existing Assets of the Mactan International Airport to the
[MCIAA], Vesting the [MCIAA] with Powers to Administer and Operate the Mactan International Airport and the
Lahug Airport.
[10]
 Rollo (G.R. No. 168812), pp. 95-96. Penned by Judge Meinrado P. Paredes.
[11]
 Supra note 4.
[12]
 Rollo (G.R. No. 168812), p. 70.
[13]
 Rollo (G.R. No. 168770), pp. 77-78. Penned by Judge Victorio U. Montecillo.
[14]
 Id. at 79-81.
[15]
 Id. at 57-58.
[16]
 G.R. No. 121506, October 30, 1996, 263 SCRA 736. This case should not be confused with MCIAA v.
Court of Appeals, supra note 6, which involved the complaint by Virginia Chiongbian.
[17]
 Rollo (G.R. No. 168770), pp. 57-58.
[18]
 Rollo (G.R. No. 168812), p. 39.
[19]
 Rollo (G.R. No. 168770), p. 22.
[20]
 MCIAA v. Tudtud, G.R. No. 174012, November 14, 2008, 571 SCRA 165; Heirs of Moreno, supra note
4.
[21]
 Id.
[22]
 Supra note 5, at 303.
[23]
 Rollo (G.R. No. 168770), pp. 180-194.
[24]
 Id. at 93.
[25]
 Supra note 4, at 507-508.
[26]
 Supra note 20.
[27]
 Confederation of Sugar Producers Association, Inc. v. Department of Agrarian Reform (DAR), G.R. No.
169514, March 30, 2007, 519 SCRA 582, 618; citing BLACKS LAW DICTIONARY (5th ed.).
[28]
 CIVIL CODE, Art. 1403(2)(e), as a general proposition, places agreements for the sale of real property
within the coverage of the Statute of Fraud, a postulate that declares unenforceable all contracts of realty unless
made in writing. Contracts infringing the Statute of Frauds referred to in Art. 1403 of the Code are ratified by the
failure to object to the presentation of oral evidence to prove the same, or by acceptance of benefits under them.
[29]
 Arrogante v. Deliarte, G.R. No. 152132, July 24, 2007, 528 SCRA 63, 74; Tudtud, supra note 20.
[30]
 103 Phil. 655, 659 (1958); citing 3 Moran, COMMENTS ON THE RULES OF COURT 178 (1957).
[31]
 Air Transportation Office v. Gopuco, Jr., supra note 6; Reyes v. National Housing Authority, G.R. No.
147511, January 20, 2003, 395 SCRA 494; MCIAA v. Court of Appeals, supra note 6; Fery
v. Municipality of Cabanatuan, 42 Phil. 28 (1921).
[32]
 Heirs of Moreno, supra note 4, at 510.
[33]
 Id.
[34]
 Heirs of Moreno, supra note 5, at 305.
[35]
 Supra note 31.
[36]
 Supra note 4, at 512. Emphasis in the original.
 [37]
 Art. 1454.If an absolute conveyance of property is made in order to secure the performance of
an obligation of the grantor towards 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.
[38]
 4 Paras, CIVIL CODE OF THE PHILIPPINES ANNOTATED 668 (10th ed.).
[39]
 G.R. No. 176625, February 25, 2010, 613 SCRA 618, 629-631.
[40]
 Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. Nos.
78742, 79310, 79744 & 79777, July 14, 1989, 175 SCRA 343, 389-390.
[41]
 Bernas, THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A COMMENTARY 391
(2003).
[42]
 Heirs of Moreno, supra note 5, at 302; citing City of Owensboro v. McCormick, 581 S.W.2d 3, 5 (1979).
[43]
 Eastern Shipping Lines, Inc. v. CA, G.R. No. 97412, July 12, 1994, 234 SCRA 78, 95; and CIVIL
CODE, Art. 1169: In reciprocal obligations, neither party incurs delay if the other does not comply or is not ready to
comply in a proper manner what is incumbent upon him. From the moment one of the parties fulfills his obligation,
delay by the other begins.
 
[44]
 CIVIL CODE, Art. 1187: The effects of a conditional obligation to give, once the condition has been
fulfilled, shall retroact to the day of the constitution of the obligation. Nevertheless, when the obligation imposes
prestations upon parties, the fruits and interests during the pendency of the condition shall be deemed to have been
mutually compensated.
[45]
 Cordero v. F.S. Management & Development Corporation, G.R. No. 167213, October 31, 2006, 506
SCRA 451, 465.