Mactan Cebu International Airport Authority v. Court of Appeals
REITERATIONFacts
The Antecedents: In 1949, officers of the National Airport Corporation (NAC) informed landowners surrounding Lahug Airport that the government intended to purchase their lands for airport expansion. Landowners were convinced to sell, with assurances that their properties would be returned if no longer used by the airport. Inez Ouano initially hesitated due to the low price and insufficient inheritance for her grandchildren but eventually sold her properties (Lots 742 and 953) after being reassured of the return of the land. Eufemio Vercide, another landowner, signed his deed of sale only after receiving a rider guaranteeing the return of his land at the same selling price if the Lahug Airport became defunct or was transferred. The deed of sale for Inez Ouano's properties did not contain such a repurchase provision or rider. Inez Ouano, during her lifetime, reminded her granddaughter, Melba Limbaco, about the NAC's assurance and conveyed that Melba could recover the land. Procedural History: Upon learning of the airport's transfer to Mactan and that other landowners had recovered their properties, private respondents (heirs of Inez Ouano) attempted to repurchase the properties. The Mactan Cebu International Airport Authority (MCIAA) denied their request, citing the absence of a repurchase condition in the deed of sale. Private respondents filed a case for reconveyance with the Regional Trial Court (RTC), which ruled in their favor. The Court of Appeals (CA) affirmed the RTC's decision. The Petition: MCIAA filed a petition for certiorari with the Supreme Court, seeking reversal of the CA's decision and resolution, assigning errors regarding the admission of parol evidence to establish a right of repurchase absent a written rider and the applicability of the Statute of Frauds.
Issue(s)
Whether parol evidence is admissible to prove a right of repurchase not explicitly stated in the deed of sale. Whether the Statute of Frauds applies to the contract of sale in this case.
Ruling
The petition is denied. The Court of Appeals' decision affirming the Regional Trial Court's ruling in favor of the private respondents is upheld.
Ratio Decidendi
On the admissibility of parol evidence to prove a right of repurchase not explicitly stated in the deed of sale: The Court affirmed the findings of the RTC and CA that the right of repurchase granted by the NAC to Inez Ouano could be sufficiently established by parol evidence. The CA correctly noted that Inez's lots were acquired for the same purpose and under similar conditions as other lots surrounding the airport, many of which were repurchased by their original owners. The Court reiterated the parol evidence rule, stating that while a written agreement is presumed to contain all terms, evidence can be presented to modify, explain, or add to its terms if the pleading puts in issue the failure of the writing to express the true intent. In this case, the private respondents sought to establish a collateral parol agreement that served as the moving cause for Inez Ouano to execute the deed of sale, namely, the representation that the property would be returned if no longer needed. Such evidence is admissible when it forms part of the consideration or is the moving cause for the written contract. Crucially, the petitioner did not object to the admission of this parol evidence, thereby waiving any right to question it later. The Court cited the principle that objections to evidence must be made at the proper time, and failure to do so constitutes waiver. On the applicability of the Statute of Frauds: The Court agreed with the CA that the Statute of Frauds does not apply to this case. The CA correctly reasoned that the right to repurchase was part of the contract of sale, not an independent agreement, and thus the contract was partially executed by the sale of the properties. The Statute of Frauds, under Article 1403 of the Civil Code, applies to executory contracts for the sale of real property. However, it does not apply to contracts that have been partially or totally performed. In this instance, the sale of the properties was consummated, and the petitioner accepted benefits thereunder. Therefore, the contract was taken out of the scope of the Statute of Frauds. The Court emphasized that the Statute of Frauds is intended to prevent fraud, not to facilitate it, and the petitioner could not use it to deny the existence of the agreement after having benefited from the consummated sale.
Main Doctrine
The right to repurchase, even if not explicitly stated in the deed of sale, may be established by parol evidence if it was the moving cause of the written contract or formed part of the consideration, especially when no objection is raised against its admission. Furthermore, the Statute of Frauds does not apply to contracts that have been partially or totally performed.