Mactan-Cebu International Airport Authority v. Lozada
ABANDONMENTFacts
The Antecedents: The Republic of the Philippines initiated expropriation proceedings for Lot No. 88-SWO-25042, located in Lahug, Cebu City, for the expansion of the Lahug Airport. During the pendency of the proceedings, respondent Bernardo L. Lozada, Sr. acquired the lot from the original owner, Anastacio Deiparine, and a Transfer Certificate of Title (TCT) No. 9045 was issued in his name. The trial court ordered the Republic to pay Lozada P3.00 per square meter, with legal interest from November 16, 1947, and Lozada received P3,018.00. The expropriated lots were eventually transferred to the Republic under TCT No. 25057. The projected airport expansion did not materialize, and the property was later transferred to the Mactan-Cebu International Airport Authority (MCIAA). The lot was used for a jail and occupied by squatters, and later became part of a commercial area (Ayala I.T. Park). Respondents sought to repurchase the lot based on an alleged verbal agreement that it would be resold to former owners if the airport operations were abandoned. Procedural History: Respondents filed a complaint for recovery of possession and reconveyance of Lot No. 88 against MCIAA and the Air Transportation Office (ATO). The Regional Trial Court (RTC), Branch 57, Cebu City, ruled in favor of the respondents, ordering MCIAA and ATO to restore possession and ownership of the lot upon payment of the expropriation price and directing the Register of Deeds to cancel the title in the name of MCIAA and issue a new one in the name of the respondents. The Court of Appeals (CA) affirmed the RTC decision. Petitioners then filed a petition for review on certiorari with the Supreme Court. The Petition: Petitioners sought to reverse the CA decision, arguing that respondents failed to prove a repurchase agreement or compromise settlement, that the expropriation judgment was absolute and unconditional, and that the claim of verbal assurances violated the Statute of Frauds. They contended that the government acquired a fee simple title to the property, which could not be defeated by non-user or abandonment of the public purpose.
Issue(s)
Whether the expropriation of Lot No. 88 was subject to a condition that the property would revert to the former owner if the public purpose (airport expansion) was not pursued. Whether respondents were able to establish the existence of an oral compromise agreement for the repurchase of Lot No. 88. Whether the respondents' claim of verbal assurances from government officials violates the Statute of Frauds.
Ruling
The petition is denied. The Court affirmed the decision of the Court of Appeals, with modifications regarding the terms of reconveyance. Respondents are ordered to return the just compensation received plus legal interest, and to pay necessary expenses for maintenance and management to the extent benefited. Petitioners are entitled to keep fruits and income, and respondents are entitled to keep interests earned on compensation and appreciation in value. The case is remanded to the RTC for reception of evidence on the amounts to be paid.
Ratio Decidendi
On Issue 1: The Court clarified that while Fery v. Municipality of Cabanatuan suggested that a fee simple title acquired through expropriation is absolute, subsequent jurisprudence, particularly Heirs of Timoteo Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority, indicates that the expropriation is subject to the implied condition of the property being devoted to the stated public purpose. The Court expressly held that the taking of private property is always subject to the condition that it be devoted to the specific public purpose, and if this purpose is abandoned, the former owners may seek reversion upon returning the just compensation. The Court found that the Decision in Civil Case No. R-1881, when read in its entirety, implied that the Lahug Airport would continue to operate, and the expropriation was premised on this continuation. Since the airport was abandoned and the expansion not pursued, the condition for the expropriation was not met, justifying the reversion of the property. On Issue 2: The Court affirmed the findings of the RTC and CA that an oral compromise agreement for the repurchase of Lot No. 88 was established. Respondent Bernardo Lozada, Sr.'s testimony, though lacking specific details of the government representatives involved, was found to be credible and based on personal knowledge. He testified that government representatives verbally promised him and his wife that the property would be returned if the purpose for expropriation no longer existed. The CA found his testimony cogent and noted that minor lapses due to his age and the passage of time did not dismantle his credibility. The Court emphasized that factual findings of the RTC, especially when affirmed by the CA, are binding and conclusive on the Supreme Court, and no exceptions warrant a reversal. On Issue 3: The Court ruled that the Statute of Frauds does not apply to the oral compromise settlement in this case because it was partially performed. The Statute of Frauds applies only to executory contracts, not to those that have been completely or partially performed. Respondents relied on the verbal assurance by not pursuing their appeal, constituting partial performance. The Court reasoned that excluding parol evidence in such cases would promote fraud or bad faith, allowing a party to retain benefits while evading obligations. Therefore, the oral agreement, having been acted upon by the respondents, was enforceable despite not being in writing.
Main Doctrine
The exercise of the power of eminent domain is conditioned upon the property being devoted to the specific public purpose for which it was taken. If this purpose is abandoned, the former owner has the right to seek the reversion of the property, subject to the return of the just compensation received. Additionally, oral compromise agreements in expropriation cases, even if not in writing, are enforceable if partially performed, as the Statute of Frauds does not apply to such executed contracts.