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 City
to 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
Decision1 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 Decision2 and Resolution3 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 Court’s Decision4 of
October 15, 2003, as reiterated in a Resolution5 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.6In 1949, the National Airport
Corporation (NAC), MCIAA’s 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-Cebu Airport. 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.

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; and5. 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 NAC’s 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 attorney’s fees and P10,000.00 for litigation expenses.
Albert Chiongbian’s 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 CA’s Decision reads:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us

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 CFI’s 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 CA’s 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 Order14 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 Decision15 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 Ouanos––and all covered lots for that matter––
would 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 Court’s 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 CA’s Decision, but was denied per the
CA’s 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

ll. THE IMPUNGED DISPOSITIONS INVALIDLY OVERTURNED THIS HONORABLE

lll. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THIS HONORABLE

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 Court’s ruling in
Heirs of Moreno. MCIAA has, however, formulated in its Consolidated Memorandum the key
interrelated issues in these consolidated cases, as follows:

WHETHER ABANDONMENT OF THE PUBLIC USE FOR WHICH THE SUBJECT

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 Court’s Ruling

The Republic and MCIAA’s 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 Airport’s
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
deposition23 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
interest24 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 airport’s 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 respondent’s 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 Moreno––later followed by MCIAA v. Tudtud (Tudtud)26 and the
consolidated cases at bar––is 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
Tudtud should 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 court’s 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.

MCIAA’s 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 project––the public purpose behind the forced property taking––was, 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 CFI’s
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 CFI’s 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-à-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 MCIAA’s
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 [MCIAA’s] contention that since the possibility of the
Lahug Airport’s 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 Court’s 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 Court’s
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 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."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
equity––the landowners in this instance, in establishing the trust––must 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.1avvphi1

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.1avvphi1 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 necessity—the very reason or condition as it were—
allowing, at the first instance, the expropriation of a private land ceases or disappears, then
there is no more cogent point for the government’s 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
citizen’s 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 attorney’s 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 CA’s 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
attorney’s 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

(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.