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ANUNCIACION VDA. DE OUANO v. REPUBLIC

FACTS:

The consolidated petitions involve the right of former owners of lots acquired for the expansion of the Lahug Airport in Cebu City to repurchase or secure reconveyance of their respective properties. In the first petition, the Ouanos seek to nullify the decision of the Court of Appeals (CA) affirming the order of the Regional Trial Court (RTC) in Cebu City. The second petition, filed by MCIAA, seeks to annul and set aside the decision of the CA sustaining the RTC decision.

In G.R. No. 168812, the dispute revolves around the expropriation of certain lots in Lahug for the proposed expansion of the Lahug Airport. The Inocians, as successors-in-interest of the previous owners, claim that during the negotiations, they were assured that their landholdings would be reconveyed to them if the Lahug Airport were abandoned or its operation transferred to the Mactan Airport. The MCIAA, however, argues that there was no condition of repurchase in the decision of the court in the expropriation case. The RTC ruled in favor of the Inocians and ordered the reconveyance of the lots. The CA affirmed the decision of the RTC.

In G.R. No. 168770, the Ouanos sought to exercise their right to repurchase Lot No. 763-A, which was expropriated for the airport expansion. They claimed that informal settlers had occupied the lot after the project was abandoned. The MCIAA refused to allow the repurchase, arguing that there was no reversionary condition stated in the decision in the expropriation case. The RTC ruled in favor of the Ouanos and ordered the reconveyance of the lot.

The case involves the expropriation of Lot No. 763-A owned by the plaintiffs, Anunciacion Vda. De Ouano, Mario P. Ouano, Leticia Ouano Arnaiz, and Cielo Ouano Martinez. The Republic of the Philippines and Mactan Cebu International Airport Authority (MCIAA) expropriated the land for the construction of the Lahug Airport. The Regional Trial Court (RTC) initially ruled in favor of the plaintiffs, granting them the restoration of possession and ownership of their land. It also ordered the Register of Deeds to transfer the title from the Republic to the plaintiffs. However, upon the motion for reconsideration of the Republic and MCIAA, the RTC reversed its decision and dismissed the plaintiffs' complaint. The Court of Appeals (CA) denied the plaintiffs' appeal, affirming the RTC's order. The plaintiffs filed a motion for reconsideration, which was also denied by the CA. Dissatisfied with the CA's decision, the plaintiffs filed a petition before the Supreme Court. The key issues raised in the petition include the legality of stripping the Republic of its title to the expropriated properties, the application of previous court rulings, and the admissibility of testimonial evidence under the Statute of Frauds.

ISSUES:

  1. Whether the Ouanos and the Inocians are entitled to recover their respective properties under the same manner and arrangement as the heirs of Moreno and Tudtud.

  2. Whether the alleged verbal assurance given by the NAC negotiating team is barred by the Statute of Frauds.

  3. Whether or not the parties can present parol evidence to prove the oral undertaking to allow repurchase of the properties.

  4. Whether the former landowners are entitled to repurchase the expropriated properties upon abandonment of the public purpose for which it was expropriated.

  5. Whether the former landowners can demand the reconveyance of their properties after the payment of the condemnation price.

  6. Whether the government's exercise of its power of eminent domain is subject to the condition that the property be devoted to the specific public purpose for which it was taken.

  7. Whether the private property owner has the right to seek the reversion of the property if the particular purpose or intent is not initiated or pursued.

  8. Whether the lands subject to expropriation should be reconveyed to the original landowners.

  9. Whether the original landowners should return the just compensation they received for the expropriation.

  10. Whether the Mactan-Cebu International Airport Authority (MCIAA) should return the necessary expenses it incurred in sustaining the lots and the monetary value of its services in managing the lots to the original landowners.

  11. Whether the MCIAA is entitled to keep the income or fruits it obtained from the expropriated lots.

  12. Whether the original landowners should settle the appreciation of the values of their lots.

RULING:

  1. Yes, the Ouanos and the Inocians are entitled to recover their respective properties under the same manner and arrangement as the heirs of Moreno and Tudtud.

  2. No, the alleged verbal assurance given by the NAC negotiating team is not barred by the Statute of Frauds.

  3. The parties can present parol evidence to prove the oral undertaking to allow repurchase of the properties. The Statute of Frauds only applies to executory contracts and not to completed or partially consummated contracts. In this case, the agreement between the parties was already partially performed by the government through the acquisition of the lots. If the contract has been partially performed, excluding parol evidence would promote fraud or bad faith by allowing the defendant to keep the benefits already derived from the transaction while evading the obligations assumed. Additionally, the objection on the admissibility of evidence on the basis of the Statute of Frauds may be waived if not timely raised.

  4. The former landowners are entitled to repurchase the expropriated properties upon abandonment of the public purpose for which it was expropriated as expressed in the condemnation judgment. The decision in Civil Case No. R-1881 enjoined MCIAA to allow recovery or repurchase upon abandonment of the Lahug airport project. The return or repurchase of the condemned properties was the manifest legal effect and 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.

  5. The former landowners can demand the reconveyance of their properties after the payment of the condemnation price. 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. Since the government failed to perform the obligation that is the basis of the transfer of the property, then the lot owners can demand the reconveyance of their old properties.

  6. Yes, the taking of private property through the exercise of eminent domain is always subject to the condition that the property be devoted to the specific public purpose for which it was taken. If the purpose is not initiated or not pursued, the former owners, if they desire, may seek the reversion of the property.

  7. Yes, the private property owner has the right to seek the reversion of the property if the particular purpose or intent is not initiated or pursued.

  8. The lands subject to expropriation should be reconveyed to the original landowners.

  9. The original landowners should return the just compensation they received for the expropriation.

  10. The MCIAA is entitled to the necessary expenses it incurred in sustaining the lots and the monetary value of its services in managing the lots to the extent that the original landowners were benefited.

  11. The MCIAA is entitled to keep whatever income or fruits it obtained from the expropriated lots.

  12. The original landowners do not have to settle the appreciation of the values of their lots as part of the reconveyance process.

PRINCIPLES:

  • The court upheld the doctrine of stare decisis in applying the ratio decidendi from previous cases to the present case. (Stare decisis et non quieta movere)

  • The Statute of Frauds applies only to executory contracts for the sale or acquisition of real property, and not to completed, executed, or partially consummated contracts.

  • The Statute of Frauds applies only to executory contracts and not to completed, executed, or partially consummated contracts.

  • Parol evidence may be admitted to prove an oral undertaking in a contract that has been partially performed.

  • Objection on the admissibility of evidence on the basis of the Statute of Frauds may be waived if not timely raised.

  • The government acquires only such rights in expropriated parcels of land as may be allowed by the character of its title over the properties.

  • Constructive trusts are fictions of equity that courts use as devices to remedy situations in which the holder of the legal title may not, in good conscience, retain the beneficial interest.

  • 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.

  • The exercise of the power of eminent domain is subject to the condition that the property be devoted to the specific public purpose for which it was taken.

  • The private property owner has the right to seek the reversion of the property if the particular purpose or intent is not initiated or pursued.

  • Equity and justice demand the reconveyance of litigated lands to the original landowners.

  • The MCIAA is entitled to the necessary expenses it incurred in sustaining the lots and the monetary value of its services in managing the lots to the extent that the original landowners were benefited.

  • The original landowners are not required to settle the appreciation of the values of their lots as it is a natural effect of nature and time.

  • No premium should be set on the right to litigate where there is no doubt about the exercise of such right.