|Vargas Case Digests|

Mactan-cebu international airporT V. BERNARDO LOZADA

Facts and Controversy

Subject of the case is Lot No. 88 with an area 1, 017 sq. m. Original owner was Anastacio Deiparine when it
was subject to expropriation proceedings initiated by the Republic of the Philippines to expand and improve
the Lahug Airport. Case filed with CFI Cebu.

1947, lots were occupied by the US Army. During pendency of proceedings Lozada acquired Lot No. 88 from
Deiparine. The Transfer Certificate Title was issued in Lozada’s name.

December 29, 1961, trial court rendered judgment in favor of Republic to order it to pay Lozada fair market
value at P3.00 per sq. m. Affected landowners appealed. Air Transportation Office proposed a compromise
settlement where the owners of the lots affected by the proceedings would either not appeal or withdraw
their 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.

Because of this, Lozada did not pursue his appeal, and the Lot was transferred to the Republic. The
improvement and expansion plan of the Lahug Airport was not pursued. Thus, Lozada and other landowners
requested the repurchasing of the lats. However, CAA (Civil Aeronautics Administration) stated that the
Lahug Airport might still be used as an emergency DC-3 Airport.

Nov. 29, 1989 - President Aquino issued a memorandum to the Department of Transportation to direct
aviation operations from Lahug Airport to Mactan International Airport. Upon such transfer, Lahug Airport
would be closed.

From the date of expropriation to the present of the case, the proposal of expansion was never initiated. Lot
No. 88 became a site of a jail and a portion was occupied by squatters. The old airport was made into Ayala
IT Park.

Petitioners initiated a complaint for recovery of possession and reconveyance of ownership of Lot No. 88. The
MCIA asked for dismissal denying that the government made assurances to reconvey the lots. RTC ruled in
favor of Lozada. Appeal to CA, affirmed RTC decision. Motion for reconsideration denied.

ISSUE: Whether or not the property in question should be reconveyed to the previous landowners.

Decision of the Supreme Court

MCIA Arguments: (1) Respondents failed to prove the repurchase agreement, (2) judgement in the civil case
was absolute and conditional, (3) Respondent’s claim of verbal assurances from government violates
statutes of frauds.

PETITION SHOULD BE DENIED. Petitioners cite Fery v. Municipality of Cabatuan which stated that the
government acquires only rights in expropriated parcels of land as may be allowed by the character of its
title over the properties. However, the Court has ruled otherwise in Heirs of Moreno v. MCIAA. The condition
set by the Republic that Lahug Airport would continue its operation did not materialize. The Fery ruling was
not decided pursuant to eminent domain. It is settled that eminent domain must have two requirements: (1)
for a public purpose, and (2) that just compensation be paid to property owner.

Taking of private property always subject to condition that the property be devoted to specific public
purpose. If intent is abandoned, they may seek reversion of the property, subject to return of the amount of
just compensation.

CA and RTC passed that there was a compromise agreement that was entered into. Lozada’s testimony was
based on personal knowledge as assurance from government that was personally made to him. Factual
findings may not be reviewed.

Statute of frauds operates only with respect to executory contracts and does not apply to contracts which
have been completely or partially performed. Statute of frauds invoked by petitioners cannot apply since
oral compromise was only partially performed. Lozada’s conformity to appraisal and seeking the correction
of a clerical error does not conclusively establish that respondents absolute parted with their property. Right
of respondents to repurchase Lot No. 88 may be enforced based on constructive trust constituted on the
property held by the government in favor of the former.