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Expropriation; abandonment of public purpose.

In this case, the Mactan Cebu International Airport


Authority (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. In fact, the Lahug Airport had
been closed and abandoned. Also, in this case, it was preponderantly established by evidence that the
National Airport Corporation, MCIAAs predecessor, 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. The SC held that the government acquires only
such rights in expropriated parcels of land as may be allowed by the character of its title over the
properties. This 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. The SC held that 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. 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 can demand the reconveyance of their old properties after the
payment of the condemnation price. 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. Anunciacion Vda. De Ouano, et al.
v. Republic of the Philippines, et al./Mactan-Cebu International Airport [MCIAA] v. Ricardo L. Inocian, in
his personal capacity and as Attorney-in-Fact of Olympia E. Esteves, et al. and Aletha Suico Magat in her
personal capacity and as Attorney-in-Fact of Philip M. Suico, et al. G.R. Nos. 168770 & 168812, February
9, 2011.

Expropriation; reconveyance of expropriated property. 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 landowners need not require the accounting of interests
earned by the amounts they received as just compensation. Following Art. 1189 of the Civil Code
providing that if the thing is improved by its nature, or by time, the improvement shall inure to the
benefit of the creditor, the landowners 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. Anunciacion Vda. De Ouano, et al. v. Republic of the Philippines, et al./Mactan-Cebu
International Airport [MCIAA] v. Ricardo L. Inocian, in his personal capacity and as Attorney-in-Fact of
Olympia E. Esteves, et al. and Aletha Suico Magat in her personal capacity and as Attorney-in-Fact of
Philip M. Suico, et al. G.R. Nos. 168770 & 168812, February 9, 2011.

MCIAA VS LOZADA
FACTS: Subject of this case is a lot (Lot No. 88) located in Lahug, Cebu City. Its original owner was
Anastacio Deiparine when the same was subject to expropriation proceedings, initiated by Republic,
represented by the then Civil Aeronautics Administration (CAA), for the expansion and improvement of
the Lahug Airport. During the pendency of the expropriation proceedings, respondent Bernardo L.
Lozada, Sr. acquired Lot No. 88 from Deiparine. The trial court ruled for the Republic and ordered the
latter to pay Lozada the fair market value of the lot. However, the projected improvement and
expansion plan of the old Lahug Airport, however, was not pursued. The plaintiff-respondents initiated a
complaint for the recovery of possession and reconveyance of ownership the subject lot. On the other
hand, the 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. The lower court ruled for
herein plaintiff-respondents, which decision was affirmed by the Court of Appeals. In this petition, the
petitioners argued that the judgment in Civil Case No. R-1881 was absolute and unconditional, giving
title in fee simple to the Republic.
ISSUE: Whether or not a constructive trust was constituted in this case, and as such, the respondents
herein are entitled to the restitution of the expropriated property which was not used for a public
purpose.
HELD: YES. Art. 1454 of the Civil Code provides: 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.
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 trustees 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.