EN BANC
|
MACTAN- Petitioners, -
versus - BERNARDO L. LOZADA, SR.,
and the HEIRS OF ROSARIO MERCADO,
namely, VICENTE LOZADA, MARIO M. LOZADA, MARCIA L. GODINEZ, VIRGINIA L.
FLORES, BERNARDO LOZADA, JR., DOLORES GACASAN, SOCORRO CAFARO and ROSARIO
LOZADA, represented by MARCIA LOZADA GODINEZ, Respondents. |
G.R.
No. 176625
Present: PUNO,
C.J., CARPIO,
CARPIO
MORALES, VELASCO, JR., NACHURA, LEONARDO-DE CASTRO, BRION,
PERALTA,* BERSAMIN,
ABAD, VILLARAMA,
JR., PEREZ,
and MENDOZA,
JJ. Promulgated: 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) (
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,
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
Lozada’s 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, 1947—the 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
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
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
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
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,
(a) Spouses Bernardo and Rosario Lozada were the
registered owners of Lot No. 88 covered by TCT No. 9045;
(b) In
the early 1960’s, the Republic sought to acquire by expropriation Lot No. 88,
among others, in connection with its program for the improvement and expansion
of the
(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
(e) Title
to Lot No. 88 was subsequently transferred to the Republic of the
(f) The
projected expansion and improvement of the
(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
(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
(2) The
property was expropriated among several other properties in Lahug in favor of
the Republic of the
(3) The
public purpose for which the property was expropriated was for the purpose of
the
(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,
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
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
As
for the public purpose of the expropriation proceeding, it cannot now be
doubted. Although
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
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
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
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 Government’s 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 owner’s
right to justice, fairness, and equity.
In
light of these premises, we now expressly hold that the taking of private
property, consequent to the Government’s 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
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—
Lozada’s
testimony is cogent. An octogenarian
widower-retiree and a resident of
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 Lozada’s 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 court’s 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
trustee’s 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-à-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,
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
|
ANTONIO T. CARPIO Associate
Justice |
RENATO C. CORONA Associate
Justice |
|
|
CONCHITA CARPIO MORALES Associate
Justice |
PRESBITERO J. VELASCO, JR. Associate
Justice |
|
|
TERESITA J. LEONARDO-DE CASTRO Associate
Justice |
ARTURO D. BRION Associate
Justice |
|
|
(on official
leave) DIOSDADO M. PERALTA Associate
Justice |
LUCAS P. BERSAMIN Associate
Justice |
|
|
MARIANO C. Associate
Justice |
ROBERTO A. ABAD Associate
Justice |
|
|
MARTIN
S. VILLARAMA, JR. Associate
Justice |
JOSE Associate Justice |
|
JOSE CATRAL
Associate Justice
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, I
hereby certify that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court.
REYNATO
S. PUNO
Chief
Justice
* On official leave.
[1] Penned by Associate Justice Enrico A. Lanzanas, with Associate Justices Pampio A. Abarintos and Apolinario D. Bruselas, Jr., concurring; rollo, pp. 46-65.
[2] Rollo, pp. 67-68.
[3] TSN, June 25, 1998, p. 7.
[4] Rollo, pp. 20-21.
[5]
[6] Records, p. 178.
[7] 42 Phil. 28 (1921).
[8]
[9] G.R. No. 156273, October 15, 2003, 413 SCRA 502.
[10]
[11] Ruling on the Motion for Reconsideration affirming the Decision; Heirs of Timoteo Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority, G.R. No. 156273, August 9, 2005, 466 SCRA 288, 305.
[12] 132 Ind. 558, November 5, 1892.
[13] 121
[14] 57
[15] CONSTITUTION, Art. III, Sec. 9.
[16] Supra note 11, at 302; Vide Republic v. Lim, G.R. No. 161656, June 29, 2005, 462 SCRA 265.
[17] Vide the Separate Concurring Opinion of Associate Justice Presbitero J. Velasco, Jr.
[18] Petitioners’ witness Michael Bacarisas testified that three other lot owners entered into a written compromise agreement with the government but Lozada was not part of it.
[19] Rollo, pp. 58-59.
[20] G.R. No. 121506, October 30, 1996, 263 SCRA 736.
[21] Caluag v. People, G.R. No. 171511, March 4, 2009, 580 SCRA 575, 583; Gregorio Araneta University Foundation v. Regional Trial Court of Kalookan City, Br. 120, G.R. No. 139672, March 4, 2009, 580 SCRA 532, 544; Heirs of Jose T. Calo v. Calo, G.R. No. 156101, February 10, 2009, 578 SCRA 226, 232.
[22] Mactan-Cebu International Airport Authority v. Tudtud, G.R. No. 174012, November 14, 2008, 571 SCRA 165, 175.
[23] Supra note 9, at 512-514.
[24] 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 reciprocal prestations upon the parties, the fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated. x x x.
[25] Art. 1190. 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.
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 (Article 1189) shall be applied to the party who is bound to return.
[26] Mactan-