G.R. No. 168770 & G.R. No. 168812; February 9, 2011
ANUNCIACION VDA. DE OUANO, et al. (the Ouanos), Petitioners, vs. THE REPUBLIC OF THE PHILIPPINES, THE MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), and THE REGISTER OF DEEDS FOR THE CITY OF CEBU, Respondents.

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), Petitioner, vs. RICARDO L. INOCIAN, et al. (the Inocians), Respondents.

FACTS

In 1949, the National Airport Corporation (NAC), predecessor of the Mactan-Cebu International Airport Authority (MCIAA), pursued the expansion of the Lahug Airport in Cebu City. A government negotiating team assured landowners, including the predecessors of the Ouanos and the Inocians, that they could repurchase their properties if the expansion did not push through or if the Lahug Airport ceased operations. Some landowners sold their lots with this repurchase condition. Others, including the owners of Lot Nos. 744-A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and 947, refused due to low offered prices. The Republic, through the Civil Aeronautics Administration (CAA), filed an expropriation case (Civil Case No. R-1881). On December 29, 1961, the Court of First Instance rendered judgment condemning the lots for public use (airport expansion). The landowners did not appeal, relying on the repurchase assurance. Titles were issued in the name of the Republic and later transferred to MCIAA. The Lahug Airport ceased operations in 1991, and the expropriated lots were never used for the intended expansion. The former owners demanded to repurchase, which was refused, leading to separate suits for reconveyance.
In G.R. No. 168812, the Inocians (successors of original owners Isabel Limbaga and Santiago Suico) and intervenor Albert Chiongbian filed a complaint for reconveyance and damages against MCIAA (Civil Case No. CEB-18370). During pre-trial, MCIAA admitted that: (1) the properties were those expropriated in Civil Case R-1881; (2) the purpose was airport expansion, which did not happen; (3) Lahug Airport closed in 1992; (4) the price paid was as per the expropriation decision; and (5) MCIAA had reconveyed other properties where express repurchase agreements existed. The RTC ruled in favor of the Inocians, ordering MCIAA to reconvey the lots upon repayment of the expropriation price. The CA affirmed.
In G.R. No. 168770 , the Ouanos filed a similar suit to compel reconveyance (Civil Case No. CEB-20743). The RTC dismissed their complaint, and the CA affirmed, prompting their petition.

ISSUE

Whether the former owners of the expropriated lots have the right to repurchase or secure reconveyance of their properties after the public purpose for which they were taken (expansion of Lahug Airport) ceased to exist.

RULING

NO. The Supreme Court denied the petitions and affirmed the assailed CA decisions. The right to repurchase or reconveyance does not arise upon the cessation of the particular public use for which the property was expropriated.
1. Expropriation is Permanent and Absolute: The expropriation of the lots, finalized by a final and executory judgment in Civil Case No. R-1881, vested full and irrevocable title in the Republic, and subsequently in MCIAA. The government’s acquisition was absolute, not conditional. The alleged verbal assurances of repurchase made by negotiators could not vary the terms of the final judgment, which contained no such condition. The government negotiators had no authority to bind the Republic to such a condition.
2. Cessation of Public Use Does Not Automatically Restore Ownership: Once property is validly expropriated for public use, it becomes patrimonial property of the State. If the specific public use is abandoned, the property does not automatically revert to the former owner. Instead, the State may devote it to another public use or, if declared no longer needed for public use, may alienate it. The former owner has no preferential right to repurchase it. The correct remedy for the former owner, if the taking was invalid or the purpose was not public, is an action for recovery of property, not an action for reconveyance based on an implied trust.
3. No Implied Trust Created: An implied trust under Article 1454 of the Civil Code requires that the “absolute conveyance” be made “in order to secure the performance of an obligation.” The expropriation was not a conveyance to secure an obligation; it was a forced sale for a public purpose. The alleged oral promise did not create a trust. The right to repurchase must be expressly stipulated, and no such stipulation was contained in the expropriation judgment or any written agreement binding the government.
4. Distinction from Voluntary Sale with Right to Repurchase: The Court distinguished the case from MCIAA v. Lozada, Sr., where reconveyance was ordered. In Lozada, the landowners voluntarily sold their properties to the government through deeds of sale that contained express written stipulations granting the right to repurchase if the airport project did not materialize. In the present cases, the taking was via expropriation, and the judgment contained no resolutory condition.
5. Application of the Heirs of Moreno Doctrine: The Court applied its ruling in Heirs of Timoteo Moreno v. MCIAA, which involved the same Lahug Airport expropriation. It held that the final judgment of expropriation ended any rights of the former owners. The cessation of the airport’s operation did not give rise to a cause of action for recovery. Any claim based on the oral assurances was personal to the negotiators and could not prevail against the government.
CONCLUSION: The Supreme Court held that the expropriation was absolute. The subsequent closure of Lahug Airport and non-use of the lots for the intended expansion did not revive the rights of the former owners. The Ouanos’ petition ( G.R. No. 168770 ) was denied, affirming the CA decision which upheld the dismissal of their complaint. MCIAA’s petition (G.R. No. 168812) was also denied, affirming the CA decision which upheld the RTC’s order for MCIAA to reconvey the lots to the Inocians only because MCIAA, during pre-trial, admitted facts that effectively estopped it from denying the claimants’ right under the specific circumstances, following the principle laid down in MCIAA v. Court of Appeals ( G.R. No. 117356 ). The Court emphasized that the ruling in favor of the Inocians was based on judicial admissions, not on a general right to repurchase upon cessation of public use.