G.R. No.

L-48685 September 30, 1987

LORENZO SUMULONG and EMILIA VIDANES-BALAOING, petitioners,
vs.
HON. BUENAVENTURA GUERRERO and NATIONAL HOUSING AUTHORITY,
respondents.
 
CORTES, J.:
On December 5, 1977 the National Housing Authority (NIIA) filed a complaint for expropriation
of parcels of land covering approximately twenty five (25) hectares, (in Antipolo, Rizal)
including the lots of petitioners Lorenzo Sumulong and Emilia Vidanes-Balaoing with an area of
6,667 square meters and 3,333 square meters respectively. The land sought to be expropriated
were valued by the NHA at one peso (P1.00) per square meter adopting the market value fixed
by the provincial assessor in accordance with presidential decrees prescribing the valuation of
property in expropriation proceedings.
Together with the complaint was a motion for immediate possession of the properties. The NHA
deposited the amount of P158,980.00 with the Philippine National Bank, representing the "total
market value" of the subject twenty five hectares of land, pursuant to Presidential Decree No.
1224 which defines "the policy on the expropriation of private property for socialized housing
upon payment of just compensation."
On January 17, 1978, respondent Judge issued the following Order:
Plaintiff having deposited with the Philippine National Bank, Heart Center Extension Office,
Diliman, Quezon City, Metro Manila, the amount of P158,980.00 representing the total market
value of the subject parcels of land, let a writ of possession be issued.
SO ORDERED.
Pasig, Metro Manila, January 17, 1978.
(SGD) BUENAVENTURA S. GUERRERO
Judge
Petitioners filed a motion for reconsideration on the ground that they had been deprived of the
possession of their property without due process of law. This was however, denied.
Hence, this petition challenging the orders of respondent Judge and assailing the constitutionality
of Pres. Decree No. 1224, as amended. Petitioners argue that:
1) Respondent Judge acted without or in excess of his jurisdiction or with grave abuse of
discretion by issuing the Order of January 17, 1978 without notice and without hearing and in
issuing the Order dated June 28, 1978 denying the motion for reconsideration.
2) Pres. Decree l224, as amended, is unconstitutional for being violative of the due process
clause, specifically:
a) The Decree would allow the taking of property regardless of size and no matter how small the
area to be expropriated;
b) "Socialized housing" for the purpose of condemnation proceeding, as defined in said Decree,
is not really for a public purpose;
c) The Decree violates procedural due process as it allows immediate taking of possession,
control and disposition of property without giving the owner his day in court;
d) The Decree would allow the taking of private property upon payment of unjust and unfair
valuations arbitrarily fixed by government assessors;
e) The Decree would deprive the courts of their judicial discretion to determine what would be
the "just compensation" in each and every raise of expropriation.
Indeed, the exercise of the power of eminent domain is subject to certain limitations imposed by
the constitution, to wit:
Private property shall not be taken for public use without just compensation (Art. IV, Sec. 9);
No person shall be deprived of life, liberty, or property without due process of law, nor shall any
person be denied the equal protection of the laws (Art. IV, sec. 1).
Nevertheless, a clear case of constitutional infirmity has to be established for this Court to nullify
legislative or executive measures adopted to implement specific constitutional provisions aimed
at promoting the general welfare.
Petitioners' objections to the taking of their property subsumed under the headings of public use,
just compensation, and due process have to be balanced against competing interests of the public
recognized and sought to be served under declared policies of the constitution as implemented by
legislation.
1. Public use
a) Socialized Housing
Petitioners contend that "socialized housing" as defined in Pres. Decree No. 1224, as amended,
for the purpose of condemnation proceedings is not "public use" since it will benefit only "a
handful of people, bereft of public character."
"Socialized housing" is defined as, "the construction of dwelling units for the middle and lower
class members of our society, including the construction of the supporting infrastructure and
other facilities" (Pres. Decree No. 1224, par. 1). This definition was later expanded to include
among others:
a) The construction and/or improvement of dwelling units for the middle and lower income
groups of the society, including the construction of the supporting infrastructure and other
facilities;
b) Slum clearance, relocation and resettlement of squatters and slum dwellers as well as the
provision of related facilities and services;
c) Slum improvement which consists basically of allocating homelots to the dwellers in the area
or property involved, rearrangemeant and re-alignment of existing houses and other dwelling
structures and the construction and provision of basic community facilities and services, where
there are none, such as roads, footpaths, drainage, sewerage, water and power system schools,
barangay centers, community centers, clinics, open spaces, parks, playgrounds and other
recreational facilities;
d) The provision of economic opportunities, including the development of commercial and
industrial estates and such other facilities to enhance the total community growth; and
e) Such other activities undertaken in pursuance of the objective to provide and maintain housing
for the greatest number of people under Presidential Decree No, 757, (Pres. Decree No. 1259,
sec. 1)
The "public use" requirement for a and exercise of the power of eminent domain is a flexible and
evolving concept influenced by changing conditions. In this jurisdiction, the statutory and
judicial trend has been summarized as follows:
The taking to be valid must be for public use. There was a time when it was felt that a literal
meaning should be attached to such a requirement. Whatever project is undertaken must be for
the public to enjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It
is not anymore. As long as the purpose of the taking is public, then the power of eminent domain
comes into play. As just noted, the constitution in at least two cases, to remove any doubt,
determines what is public use. One is the expropriation of lands to be subdivided into small lots
for resale at cost to individuals. The other is in the transfer, through the exercise of this power, of
utilities and other private enterprise to the government. It is accurate to state then that at present
whatever may be beneficially employed for the general welfare satisfies the requirement of
public use [Heirs of Juancho Ardona v. Reyes, G.R. Nos. 60549, 60553-60555 October 26, 1983,
125 SCRA 220 (1983) at 234-5 quoting E. FERNANDO, THE CONSTITUTION OF THE
PHILIPPINES 523-4, (2nd ed., 1977) Emphasis supplied].
The term "public use" has acquired a more comprehensive coverage. To the literal import of the
term signifying strict use or employment by the public has been added the broader notion of
indirect public benefit or advantage. As discussed in the above cited case of Heirs of Juancho
Ardona:
The restrictive view of public use may be appropriate for a nation which circumscribes the scope
of government activities and public concerns and which possesses big and correctly located
public lands that obviate the need to take private property for public purposes. Neither
circumstance applies to the Philippines. We have never been a laissez faire State. And the
necessities which impel the exertion of sovereign power are all too often found in areas of scarce
public land or limited government resources. (p. 231)
Specifically, urban renewal or redevelopment and the construction of low-cost housing is
recognized as a public purpose, not only because of the expanded concept of public use but also
because of specific provisions in the Constitution. The 1973 Constitution made it incumbent
upon the State to establish, maintain and ensure adequate social services including housing [Art.
11, sec. 7]. The 1987 Constitution goes even further by providing that:
The State shall promote a just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that provide
adequate social services, promote full employment, a rising standard of living and an improved
quality of life for all. [Art. II, sec. 9]
The state shall by law, and for the common good, undertake, in cooperation with the private
sector, a continuing program of urban land reform and housing which will make available at
affordable cost decent housing and basic services to underprivileged and homeless citizens in
urban centers and resettlement areas. It shall also promote adequate employment opportunities
to such citizens. In the implementation of such program the State shall respect the rights of small
property owners. (Art. XIII, sec. 9, Emphaisis supplied)
Housing is a basic human need. Shortage in housing is a matter of state concern since it directly
and significantly affects public health, safety, the environment and in sum, the general welfare.
The public character of housing measures does not change because units in housing projects
cannot be occupied by all but only by those who satisfy prescribed qualifications. A beginning
has to be made, for it is not possible to provide housing for are who need it, all at once.
Population growth, the migration to urban areas and the mushrooming of crowded makeshift
dwellings is a worldwide development particularly in developing countries. So basic and urgent
are housing problems that the United Nations General Assembly proclaimed 1987 as the
"International Year of Shelter for the Homeless" "to focus the attention of the international
community on those problems". The General Assembly is Seriously concerned that, despite the
efforts of Governments at the national and local levels and of international organizations, the
driving conditions of the majority of the people in slums and squatter areas and rural settlements,
especially in developing countries, continue to deteriorate in both relative and absolute terms."
[G.A. Res. 37/221, Yearbook of the United Nations 1982, Vol. 36, p. 1043-4]
In the light of the foregoing, this Court is satisfied that "socialized housing" fans within the
confines of "public use". It is, particularly important to draw attention to paragraph (d) of Pres.
Dec. No. 1224 which opportunities inextricably linked with low-cost housing, or slum clearance,
relocation and resettlement, or slum improvement emphasize the public purpose of the project.
In the case at bar, the use to which it is proposed to put the subject parcels of land meets the
requisites of "public use". The lands in question are being expropriated by the NHA for the
expansion of Bagong Nayon Housing Project to provide housing facilities to low-salaried
government employees. Quoting respondents:
1. The Bagong Nayong Project is a housing and community development undertaking of the
National Housing Authority. Phase I covers about 60 hectares of GSIS property in Antipolo,
Rizal; Phase II includes about 30 hectares for industrial development and the rest are for
residential housing development.
It is intended for low-salaried government employees and aims to provide housing and
community services for about 2,000 families in Phase I and about 4,000 families in Phase II.
It is situated on rugged terrain 7.5 kms. from Marikina Town proper; 22 Kms. east of Manila;
and is within the Lungs Silangan Townsite Reservation (created by Presidential Proclamation
No. 1637 on April 18, 1977).
The lands involved in the present petitions are parts of the expanded/additional areas for the
Bagong Nayon Project totalling 25.9725 hectares. They likewise include raw, rolling hills.
(Rollo, pp. 266-7)
The acute shortage of housing units in the country is of public knowledge. Official data indicate
that more than one third of the households nationwide do not own their dwelling places. A
significant number live in dwellings of unacceptable standards, such as shanties, natural shelters,
and structures intended for commercial, industrial, or agricultural purposes. Of these
unacceptable dwelling units, more than one third is located within the National Capital Region
(NCR) alone which lies proximate to and is expected to be the most benefited by the housing
project involved in the case at bar [See, National Census and Statistics Office, 1980 Census of
Population and Housing].
According to the National Economic and Development Authority at the time of the expropriation
in question, about "50 per cent of urban families, cannot afford adequate shelter even at reduced
rates and will need government support to provide them with social housing, subsidized either
partially or totally" [NEDA, FOUR YEAR DEVELOPMENT PLAN For 1974-1977, p. 357]. Up
to the present, housing some remains to be out of the reach of a sizable proportion of the
population" [NEDA, MEDIUM-TERM PHILIPPINE DEVELOPMENT PLAN 1987-1992, p.
240].
The mushrooming of squatter colonies in the Metropolitan Manila area as well as in other cities
and centers of population throughout the country, and, the efforts of the government to initiate
housing and other projects are matters of public knowledge [See NEDA, FOUR YEAR
DEVELOPMENT PLAN For 1974-1977, pp. 357-361; NEDA, FIVE-YEAR PHILIPPINE
DEVELOPMENT PLAN 1978-1982, pp. 215-228 NEDA, FIVE YEAR PHILIPPINE
DEVELOPMENT PLAN 1983-1987, pp. 109-117; NEDA, MEDIUM TERM PHILIPPINE
DEVELOPMENT PLAN 1987-1992, pp. 240-254].
b) Size of Property
Petitioners further contend that Pres. Decree 1224, as amended, would allow the taking of "any
private land" regardless of the size and no matter how small the area of the land to be
expropriated. Petitioners claim that "there are vast areas of lands in Mayamot, Cupang, and San
Isidro, Antipolo, Rizal hundred of hectares of which are owned by a few landowners only. It is
surprising [therefore] why respondent National Housing Authority [would] include [their] two
man lots ..."
In J.M. Tuason Co., Inc. vs. Land Tenure Administration [G. R. No. L-21064, February 18, 1970,
31 SCRA 413 (1970) at 428] this Court earlier ruled that expropriation is not confined to landed
estates. This Court, quoting the dissenting opinion of Justice J.B.L. Reyes in Republic vs.
Baylosis, [96 Phil. 461 (1955)], held that:
The propriety of exercising the power of eminent domain under Article XIII, section 4 of our
Constitution cannot be determined on a purely quantitative or area basis. Not only does the
constitutional provision speak of lands instead of landed estates, but I see no cogent reason why
the government, in its quest for social justice and peace, should exclusively devote attention to
conflicts of large proportions, involving a considerable number of individuals, and eschew small
controversies and wait until they grow into a major problem before taking remedial action.
The said case of J.M. Tuason Co., Inc. departed from the ruling in Guido vs. Rural Progress
Administration [84 Phil. 847 (1949)] which held that the test to be applied for a valid
expropriation of private lands was the area of the land and not the number of people who stood to
be benefited. Since then "there has evolved a clear pattern of adherence to the "number of people
to be benefited test" " [Mataas na Lupa Tenants Association, Inc. v. Dimayuga, G.R. No. 32049,
June 25,1984, 130 SCRA 30 (1984) at 39]. Thus, in Pulido vs. Court of Appeals [G.R. No.
57625, May 3, 1983, 122 SCRA 63 (1983) at 73], this Court stated that, "[i]t is unfortunate that
the petitioner would be deprived of his landholdings, but his interest and that of his family
should not stand in the way of progress and the benefit of the greater may only of the inhabitants
of the country."
The State acting through the NHA is vested with broad discretion to designate the particular
property/properties to be taken for socialized housing purposes and how much thereof may be
expropriated. Absent a clear showing of fraud, bad faith, or gross abuse of discretion, which
petitioners herein failed to demonstrate, the Court will give due weight to and leave undisturbed
the NHA's choice and the size of the site for the project. The property owner may not interpose
objections merely because in their judgment some other property would have been more suitable,
or just as suitable, for the purpose. The right to the use, enjoyment and disposal of private
property is tempered by and has to yield to the demands of the common good. The Constitutional
provisions on the subject are clear:
The State shall promote social justice in all phases of national development. (Art. II, sec. 10)
The Congress shall give highest priority to the enactment of measures that protect and enhance
the right of all the people to human dignity, reduce social, economic, and political inequalities,
and remove cultural inequities by equitably diffusing wealth and political power for the common
good. To this end, the State shall regulate the acquisition, ownership, use and disposition of
property and its increments. (Art, XIII, sec. 1)
Indeed, the foregoing provisions, which are restatements of the provisions in the 1935 and 1973
Constitutions, emphasize:
...the stewardship concept, under which private property is supposed to be held by the individual
only as a trustee for the people in general, who are its real owners. As a mere steward, the
individual must exercise his rights to the property not for his own exclusive and selfish benefit
but for the good of the entire community or nation [Mataas na Lupa Tenants Association, Inc.
supra at 42-3 citing I. CRUZ, PHILIPPINE POLITICAL LAW, 70 (1983 ed.)].
2. Just Compensation
Petitioners maintain that Pres. Decree No. 1224, as amended, would allow the taking of private
property upon payment of unjust and unfair valuations arbitrarily fixed by government assessors.
In addition, they assert that the Decree would deprive the courts of their judicial discretion to
determine what would be "just compensation".
The foregoing contentions have already been ruled upon by this Court in the case of Ignacio vs.
Guerrero (G.R. No. L-49088, May 29, 1987) which, incidentally, arose from the same
expropriation complaint that led to this instant petition. The provisions on just compensation
found in Presidential Decree Nos. 1224, 1259 and 1313 are the same provisions found in
Presidential Decree Nos. 76, 464, 794 and 1533 which were declared unconstitutional in Export
Processing Zone All thirty vs. Dulay (G.R. No. 5960 April 29, 1987) for being encroachments on
prerogatives.
This Court abandoned the ruling in National Housing Authority vs. Reyes [G.R. No. 49439, June
29,1983, 123 SCRA 245 (1983)] which upheld Pres. Decree No. 464, as amended by -
Presidential Decree Nos. 794, 1224 and 1259.
In said case of Export Processing Zone Authority, this Court pointed out that:
The basic unfairness of the decrees is readily apparent.
Just compensation means the value of the property at the time of the taking. It means a fair and
full equivalent for the loss sustained. ALL the facts as to the condition of the property and its
surroundings, its improvements and capabilities, should be considered.
xxx xxx xxx
Various factors can come into play in the valuation of specific properties singled out for
expropriation. The values given by provincial assessors are usually uniform for very wide areas
covering several barrios or even an entire total with the exception of the poblacion. Individual
differences are never taken into account. The value of land is based on such generalities as its
possible cultivation for rice, corn, coconuts, or other crops. Very often land described as
directional has been cultivated for generations. Buildings are described in terms of only two or
three classes of building materials and estimates of areas are more often inaccurate than correct.
Tax values can serve as guides but cannot be absolute substitutes for just compensation.
To say that the owners are estopped to question the valuations made by assessors since they had
the opportunity to protest is illusory. The overwhelming mass of landowners accept
unquestioningly what is found in the tax declarations prepared by local assessors or municipal
clerks for them. They do not even look at, much less analyze, the statements. The Idea of
expropriation simply never occurs until a demand is made or a case filed by an agency
authorized to do so. (pp. 12-3)
3. Due Process
Petitioners assert that Pres. Decree 1224, as amended, violates procedural due process as it
allows immediate taking of possession, control and disposition of property without giving the
owner his day in court. Respondent Judge ordered the issuance of a writ of possession without
notice and without hearing.
The constitutionality of this procedure has also been ruled upon in the Export Processing Zone
Authority case, viz:
It is violative of due process to deny to the owner the opportunity to prove that the valuation in
the tax documents is unfair or wrong. And it is repulsive to basic concepts of justice and fairness
to allow the haphazard work of minor bureaucrat or clerk to absolutely prevail over the judgment
of a court promulgated only after expert commissioners have actually viewed the property, after
evidence and arguments pro and con have been presented, and after all factors and considerations
essential to a fair and just determination have been judiciously evaluated. (p. 13)
On the matter of the issuance of a writ of possession, the ruling in the Ignacio case is reiterated,
thus:
[I]t is imperative that before a writ of possession is issued by the Court in expropriation
proceedings, the following requisites must be met: (1) There must be a Complaint for
expropriation sufficient in form and in substance; (2) A provisional determination of just
compensation for the properties sought to be expropriated must be made by the trial court on the
basis of judicial (not legislative or executive) discretion; and (3) The deposit requirement under
Section 2, Rule 67 must be complied with. (p. 14)
This Court holds that "socialized housing" defined in Pres. Decree No. 1224, as amended by
Pres. Decree Nos. 1259 and 1313, constitutes "public use" for purposes of expropriation.
However, as previously held by this Court, the provisions of such decrees on just compensation
are unconstitutional; and in the instant case the Court finds that the Orders issued pursuant to the
corollary provisions of those decrees authorizing immediate taking without notice and hearing
are violative of due process.
WHEREFORE, the Orders of the lower court dated January 17, 1978 and June 28, 1978 issuing
the writ of possession on the basis of the market value appearing therein are annulled for having
been issued in excess of jurisdiction. Let this case be remanded to the court of origin for further
proceedings to determine the compensation the petitioners are entitled to be paid. No costs.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Padilla, Bidin and Sarmiento, JJ., concur
FIRST DIVISION
 [G.R. No. 106440. January 29, 1996]
ALEJANDRO MANOSCA, ASUNCION MANOSCA and LEONICA MANOSCA,
petitioners, vs. HON. COURT OF APPEALS, HON. BENJAMIN V. PELAYO, Presiding
Judge, RTC-Pasig, Metro Manila, Branch 168, HON. GRADUACION A. REYES
CLARAVAL, Presiding Judge, RTC-Pasig, Metro Manila, Branch 71, and REPUBLIC OF
THE PHILIPPINES, respondents.

DECISION
VITUG, J.:
In this appeal, via a petition for review on certiorari, from the decision of the Court of Appeals,
dated 15 January 1992, in CA-G.R. SP No. 24969 (entitled Alejandro Manosca, et al. v. Hon.
Benjamin V. Pelayo, et al.), this Court is asked to resolve whether or not the public use
requirement of Eminent Domain is extant in the attempted expropriation by the Republic of a
492-square-meter parcel of land so declared by the National Historical Institute (NHI) as a
national historical landmark.
The facts of the case are not in dispute.
Petitioners inherited a piece of land located at P. Burgos Street, Calzada, Taguig, Metro Manila,
with an area of about four hundred ninety-two (492) square meters. When the parcel was
ascertained by the NHI to have been the birthsite of Felix Y. Manalo, the founder of Iglesia Ni
Cristo, it passed Resolution No. 1, Series of 1986, pursuant to Section 4 of Presidential Decree
No. 260, declaring the land to be a national historical landmark. The resolution was, on 06
January 1986, approved by the Minister of Education, Culture and Sports. Later, the opinion of
the Secretary of Justice was asked on the legality of the measure. In his Opinion No. 133, Series
of 1987, the Secretary of Justice replied in the affirmative; he explained:
According to your guidelines, national landmarks are places or objects that are associated with
an event, achievement, characteristic, or modification that makes a turning point or stage in
Philippine history. Thus, the birthsite of the founder of the Iglesia ni Cristo, the late Felix Y.
Manalo, who, admittedly, had made contributions to Philippine history and culture has been
declared as a national landmark. It has been held that places invested with unusual historical
interest is a public use for which the power of eminent domain may be authorized x x x.
In view thereof, it is believed that the National Historical Institute as an agency of the
Government charged with the maintenance and care of national shrines, monuments and
landmarks and the development of historical sites that may be declared as national shrines,
monuments and/or landmarks, may initiate the institution of condemnation proceedings for the
purpose of acquiring the lot in question in accordance with the procedure provided for in Rule 67
of the Revised Rules of Court. The proceedings should be instituted by the Office of the Solicitor
General in behalf of the Republic.
Accordingly, on 29 May 1989, the Republic, through the Office of the Solicitor-General,
instituted a complaint for expropriation before the Regional Trial Court of Pasig for and in behalf
of the NHI alleging, inter alia, that:
Pursuant to Section 4 of Presidential Decree No. 260, the National Historical Institute issued
Resolution No. 1, Series of 1986, which was approved on January, 1986 by the then Minister of
Education, Culture and Sports, declaring the above described parcel of land which is the birthsite
of Felix Y. Manalo, founder of the Iglesia ni Cristo, as a National Historical Landmark. The
plaintiff perforce needs the land as such national historical landmark which is a public purpose.
At the same time, respondent Republic filed an urgent motion for the issuance of an order to
permit it to take immediate possession of the property. The motion was opposed by petitioners.
After a hearing, the trial court issued, on 03 August 1989, an order fixing the provisional market
(P54,120.00) and assessed (P16,236.00) values of the property and authorizing the Republic to
take over the property once the required sum would have been deposited with the Municipal
Treasurer of Taguig, Metro Manila.
Petitioners moved to dismiss the complaint on the main thesis that the intended expropriation
was not for a public purpose and, incidentally, that the act would constitute an application of
public funds, directly or indirectly, for the use, benefit, or support of Iglesia ni Cristo, a religious
entity, contrary to the provision of Section 29(2), Article VI, of the 1987 Constitution. Petitioners
sought, in the meanwhile, a suspension in the implementation of the 03rd August 1989 order of
the trial court.
On 15 February 1990, following the filing by respondent Republic of its reply to petitioners
motion seeking the dismissal of the case, the trial court issued its denial of said motion to
dismiss. Five (5) days later, or on 20 February 1990, another order was issued by the trial court,
declaring moot and academic the motion for reconsideration and/or suspension of the order of 03
August 1989 with the rejection of petitioners motion to dismiss. Petitioners motion for the
reconsideration of the 20th February 1990 order was likewise denied by the trial court in its 16th
April 1991 order.
Petitioners then lodged a petition for certiorari and prohibition with the Court of Appeals. In its
now disputed 15th January 1992 decision, the appellate court dismissed the petition on the
ground that the remedy of appeal in the ordinary course of law was an adequate remedy and that
the petition itself, in any case, had failed to show any grave abuse of discretion or lack of
jurisdictional competence on the part of the trial court. A motion for the reconsideration of the
decision was denied in the 23rd July 1992 resolution of the appellate court.
We begin, in this present recourse of petitioners, with a few known postulates.
Eminent domain, also often referred to as expropriation and, with less frequency, as
condemnation, is, like police power and taxation, an inherent power of sovereignty. It need not
be clothed with any constitutional gear to exist; instead, provisions in our Constitution on the
subject are meant more to regulate, rather than to grant, the exercise of the power. Eminent
domain is generally so described as the highest and most exact idea of property remaining in the
government that may be acquired for some public purpose through a method in the nature of a
forced purchase by the State. It is a right to take or reassert dominion over property within the
state for public use or to meet a public exigency. It is said to be an essential part of governance
even in its most primitive form and thus inseparable from sovereignty. The only direct
constitutional qualification is that private property shall not be taken for public use without just
compensation. This proscription is intended to provide a safeguard against possible abuse and so
to protect as well the individual against whose property the power is sought to be enforced.
Petitioners assert that the expropriation has failed to meet the guidelines set by this Court in the
case of Guido v. Rural Progress Administration, to wit: (a) the size of the land expropriated; (b)
the large number of people benefited; and, (c) the extent of social and economic reform.
Petitioners suggest that we confine the concept of expropriation only to the following public
uses, i.e., the -x x x taking of property for military posts, roads, streets, sidewalks, bridges,
ferries, levees, wharves, piers, public buildings including schoolhouses, parks, playgrounds,
plazas, market places, artesian wells, water supply and sewerage systems, cemeteries,
crematories, and railroads.
This view of petitioners is much too limitative and restrictive.
The court, in Guido, merely passed upon the issue of the extent of the Presidents power under
Commonwealth Act No. 539 to, specifically, acquire private lands for subdivision into smaller
home lots or farms for resale to bona fide tenants or occupants. It was in this particular context of
the statute that the Court had made the pronouncement. The guidelines in Guido were not meant
to be preclusive in nature and, most certainly, the power of eminent domain should not now be
understood as being confined only to the expropriation of vast tracts of land and landed estates.

The term public use, not having been otherwise defined by the constitution, must be considered
in its general concept of meeting a public need or a public exigency.
Black summarizes the characterization given by various courts to the term; thus:
Public Use. Eminent domain. The constitutional and statutory basis for taking property by
eminent domain. For condemnation purposes, public use is one which confers same benefit or
advantage to the public; it is not confined to actual use by public. It is measured in terms of right
of public to use proposed facilities for which condemnation is sought and, as long as public has
right of use, whether exercised by one or many members of public, a public advantage or public
benefit accrues sufficient to constitute a public use. Montana Power Co. vs. Bokma, Mont. 457 P.
2d 769, 772, 773.
Public use, in constitutional provisions restricting the exercise of the right to take private
property in virtue of eminent domain, means a use concerning the whole community as
distinguished from particular individuals. But each and every member of society need not be
equally interested in such use, or be personally and directly affected by it; if the object is to
satisfy a great public want or exigency, that is sufficient. Rindge Co. vs. Los Angeles County,
262 U.S. 700, 43 S.Ct. 689, 692, 67 L.Ed. 1186. The term may be said to mean public
usefulness, utility, or advantage, or what is productive of general benefit. It may be limited to the
inhabitants of a small or restricted locality, but must be in common, and not for a particular
individual. The use must be a needful one for the public, which cannot be surrendered without
obvious general loss and inconvenience. A public use for which land may be taken defies
absolute definition for it changes with varying conditions of society, new appliances in the
sciences, changing conceptions of scope and functions of government, and other differing
circumstances brought about by an increase in population and new modes of communication and
transportation. Katz v. Brandon, 156 Conn., 521, 245 A.2d 579,586.
The validity of the exercise of the power of eminent domain for traditional purposes is beyond
question; it is not at all to be said, however, that public use should thereby be restricted to such
traditional uses. The idea that public use is strictly limited to clear cases of use by the public has
long been discarded. This Court in Heirs of Juancho Ardona v. Reyes, quoting from Berman v.
Parker (348 U.S. 25; 99 L. ed. 27), held:
We do not sit to determine whether a particular housing project is or is not desirable. The
concept of the public welfare is broad and inclusive. See DayBrite Lighting, Inc. v. Missouri, 342
US 421, 424, 96 L. Ed. 469, 472, 72 S Ct 405. The values it represents are spiritual as well as
physical, aesthetic as well as monetary. It is within the power of the legislature to determine that
the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as
well as carefully patrolled. In the present case, the Congress and its authorized agencies have
made determinations that take into account a wide variety of values. It is not for us to reappraise
them. If those who govern the District of Columbia decide that the Nations Capital should be
beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it through the exercise of
eminent domain is clear. For the power of eminent domain is merely the means to the end. See
Luxton v. North River Bridge Co. 153 US 525, 529, 530, 38 L. ed. 808, 810, 14 S Ct 891; United
States v. Gettysburg Electric R. Co. 160 US 668, 679, 40 L. ed. 576, 580, 16 S Ct 427.
It has been explained as early as Sea v. Manila Railroad Co., that:
x x x A historical research discloses the meaning of the term public use to be one of constant
growth. As society advances, its demands upon the individual increase and each demand is a new
use to which the resources of the individual may be devoted. x x x for whatever is beneficially
employed for the community is a public use.
Chief Justice Enrique M. Fernando states:
The taking to be valid must be for public use. There was a time when it was felt that a literal
meaning should be attached to such a requirement. Whatever project is undertaken must be for
the public to enjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It
is not so any more. As long as the purpose of the taking is public, then the power of eminent
domain comes into play. As just noted, the constitution in at least two cases, to remove any
doubt, determines what is public use. One is the expropriation of lands to be subdivided into
small lots for resale at cost to individuals. The other is the transfer, through the exercise of this
power, of utilities and other private enterprise to the government. It is accurate to state then that
at present whatever may be beneficially employed for the general welfare satisfies the
requirement of public use.

Chief Justice Fernando, writing the ponencia in J.M. Tuason & Co. vs. Land Tenure
Administration, has viewed the Constitution a dynamic instrument and one that is not to be
construed narrowly or pedantically so as to enable it to meet adequately whatever problems the
future has in store. Fr. Joaquin Bernas, a noted constitutionalist himself, has aptly observed that
what, in fact, has ultimately emerged is a concept of public use which is just as broad as public
welfare.
Petitioners ask: But (w)hat is the so-called unusual interest that the expropriation of (Felix
Manalos) birthplace become so vital as to be a public use appropriate for the exercise of the
power of eminent domain when only members of the Iglesia ni Cristo would benefit? This
attempt to give some religious perspective to the case deserves little consideration, for what
should be significant is the principal objective of, not the casual consequences that might follow
from, the exercise of the power. The purpose in setting up the marker is essentially to recognize
the distinctive contribution of the late Felix Manalo to the culture of the Philippines, rather than
to commemorate his founding and leadership of the Iglesia ni Cristo. The practical reality that
greater benefit may be derived by members of the Iglesia ni Cristo than by most others could
well be true but such a peculiar advantage still remains to be merely incidental and secondary in
nature. Indeed, that only a few would actually benefit from the expropriation of property does
not necessarily diminish the essence and character of public use.
Petitioners contend that they have been denied due process in the fixing of the provisional value
of their property. Petitioners need merely to be reminded that what the law prohibits is the lack
of opportunity to be heard; contrary to petitioners argument, the records of this case are replete
with pleadings that could have dealt, directly or indirectly, with the provisional value of the
property.
Petitioners, finally, would fault respondent appellate court in sustaining the trial courts order
which considered inapplicable the case of Noble v. City of Manila. Both courts held correctly.
The Republic was not a party to the alleged contract of exchange between the Iglesia ni Cristo
and petitioners which (the contracting parties) alone, not the Republic, could properly be bound.
All considered, the Court finds the assailed decision to be in accord with law and jurisprudence.
WHEREFORE, the petition is DENIED. No costs.
SO ORDERED.
Padilla, Bellosillo, Kapunan, and Hermosisima, Jr., JJ., concur.
 MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY and AIR
TRANSPORTATION OFFICE, Petitioners, versus - BERNARDO L. LOZADA, SR., and
the HEIRS OF ROSARIO MERCADO, namely, VICENTE LOZADA, MARIO M.
LOZADA, MARCIA L. GODINEZ, VIRGINIA L. FLORES, BERNARDO LOZADA, JR.,
DOLORES GACASAN, SOCORRO CAFARO and ROSARIO LOZADA, represented by
MARCIA LOZADA GODINEZ, Respondents
 
 
DECISION
 
NACHURA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to
reverse, annul, and set aside the Decision dated February 28, 2006 and the Resolution dated
February 7, 2007 of the Court of Appeals (CA) (Cebu City), Twentieth Division, in CA-G.R. CV
No. 65796.

The antecedent facts and proceedings are as follows:

 
Subject of this case is Lot No. 88-SWO-25042 (Lot No. 88), with an area of 1,017 square meters,
more or less, located in Lahug, Cebu City. Its original owner was Anastacio Deiparine when the
same was subject to expropriation proceedings, initiated by the Republic of the Philippines
(Republic), represented by the then Civil Aeronautics Administration (CAA), for the expansion
and improvement of the Lahug Airport. The case was filed with the then Court of First Instance
of Cebu, Third Branch, and docketed as Civil Case No. R-1881.
 
As early as 1947, the lots were already occupied by the U.S. Army. They were turned over to the
Surplus Property Commission, the Bureau of Aeronautics, the National Airport Corporation and
then to the CAA.
 
During the pendency of the expropriation proceedings, respondent Bernardo L. Lozada, Sr.
acquired Lot No. 88 from Deiparine. Consequently, Transfer Certificate of Title (TCT) No. 9045
was issued in Lozadas name.
 
On December 29, 1961, the trial court rendered judgment in favor of the Republic and ordered
the latter to pay Lozada the fair market value of Lot No. 88, adjudged at P3.00 per square meter,
with consequential damages by way of legal interest computed from November 16, 1947the time
when the lot was first occupied by the airport. Lozada received the amount of P3,018.00 by way
of payment.
 
The affected landowners appealed. Pending appeal, the Air Transportation Office (ATO),
formerly CAA, proposed a compromise settlement whereby the owners of the lots affected by
the expropriation proceedings would either not appeal or withdraw their respective 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, pursuant to an
established policy involving similar cases. Because of this promise, Lozada did not pursue his
appeal. Thereafter, Lot No. 88 was transferred and registered in the name of the Republic under
TCT No. 25057.
 
The projected improvement and expansion plan of the old Lahug Airport, however, was not
pursued.
 
Lozada, with the other landowners, contacted then CAA Director Vicente Rivera, Jr., requesting
to repurchase the lots, as per previous agreement. The CAA replied that there might still be a
need for the Lahug Airport to be used as an emergency DC-3 airport. It reiterated, however, the
assurance that should this Office dispose and resell the properties which may be found to be no
longer necessary as an airport, then the policy of this Office is to give priority to the former
owners subject to the approval of the President.
 
On November 29, 1989, then President Corazon C. Aquino issued a Memorandum to the
Department of Transportation, directing the transfer of general aviation operations of the Lahug
Airport to the Mactan International Airport before the end of 1990 and, upon such transfer, the
closure of the Lahug Airport.
 
Sometime in 1990, the Congress of the Philippines passed Republic Act (R.A.) No. 6958,
entitled An Act Creating the Mactan-Cebu International Airport Authority, Transferring Existing
Assets of the Mactan International Airport and the Lahug Airport to the Authority, Vesting the
Authority with Power to Administer and Operate the Mactan International Airport and the Lahug
Airport, and For Other Purposes.
 
From the date of the institution of the expropriation proceedings up to the present, the public
purpose of the said expropriation (expansion of the airport) was never actually initiated, realized,
or implemented. Instead, the old airport was converted into a commercial complex. Lot No. 88
became the site of a jail known as Bagong Buhay Rehabilitation Complex, while a portion
thereof was occupied by squatters. The old airport was converted into what is now known as the
Ayala I.T. Park, a commercial area.
 
Thus, on June 4, 1996, petitioners initiated a complaint for the recovery of possession and
reconveyance of ownership of Lot No. 88. The case was docketed as Civil Case No. CEB-18823
and was raffled to the Regional Trial Court (RTC), Branch 57, Cebu City. The complaint
substantially alleged as follows:
 
(a) Spouses Bernardo and Rosario Lozada were the registered owners of Lot No. 88
 covered by TCT No. 9045;
 
(b) In the early 1960s, the Republic sought to acquire by expropriation Lot No. 88,
among others, in connection with its program for the improvement
and expansion of the Lahug Airport;
 
(c) A decision was rendered by the Court of First Instance in favor of the Government
and against the land owners, among whom was Bernardo Lozada, Sr.
appealed therefrom;
 
(d) During the pendency of the appeal, the parties entered into a compromise
settlement to the effect that the subject property would be resold to
the original owner at the same price when it was expropriated in the
event that the Government abandons the Lahug Airport;
 
(e) Title to Lot No. 88 was subsequently transferred to the Republic of the Philippines
(TCT No. 25057);
 
(f) The projected expansion and improvement of the Lahug Airport did not materialize;
 
(g) Plaintiffs sought to repurchase their property from then CAA Director Vicente
Rivera. The latter replied by giving as assurance that priority would
be given to the previous owners, subject to the approval of the
President, should CAA decide to dispose of the properties;
 
(h) On November 29, 1989, then President Corazon C. Aquino, through a
Memorandum to the Department of Transportation and
Communications (DOTC), directed the transfer of general aviation
operations at the Lahug Airport to the Mactan-Cebu International
Airport Authority;
 
(i) Since the public purpose for the expropriation no longer exists, the property must be
returned to the plaintiffs.
 
 
In their Answer, 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.
 
After pretrial, but before trial on the merits, the parties stipulated on the following set of facts:
 
(1) The lot involved is Lot No. 88-SWO-25042 of the Banilad Estate, situated in the
City of Cebu, containing an area of One Thousand Seventeen (1,017)
square meters, more or less;
 
(2) The property was expropriated among several other properties in Lahug in favor of
the Republic of the Philippines by virtue of a Decision dated
December 29, 1961 of the CFI of Cebu in Civil Case No. R-1881;
 
(3) The public purpose for which the property was expropriated was for the purpose of
the Lahug Airport;
 
(4) After the expansion, the property was transferred in the name of MCIAA; [and]
 
(5) On November 29, 1989, then President Corazon C. Aquino directed the
Department of Transportation and Communication to transfer general
aviation operations of the Lahug Airport to the Mactan-Cebu
International Airport Authority and to close the Lahug Airport after
such transfer[.]
 
During trial, respondents presented Bernardo Lozada, Sr. as their lone witness, while petitioners
presented their own witness, Mactan-Cebu International Airport Authority legal assistant
Michael Bacarisas.
 
On October 22, 1999, the RTC rendered its Decision, disposing as follows:
 
WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in
favor of the plaintiffs, Bernardo L. Lozada, Sr., and the heirs of Rosario
Mercado, namely, Vicente M. Lozada, Marcia L. Godinez, Virginia L.
Flores, Bernardo M. Lozada, Jr., Dolores L. Gacasan, Socorro L. Cafaro and
Rosario M. Lozada, represented by their attorney-in-fact Marcia Lozada
Godinez, and against defendants Cebu-Mactan International Airport
Authority (MCIAA) and Air Transportation Office (ATO):
 
1. ordering MCIAA and ATO to restore to plaintiffs the possession
and ownership of their land, Lot No. 88 Psd-821 (SWO-23803), upon
payment of the expropriation price to plaintiffs; and
 
2. ordering the Register of Deeds to effect the transfer of the
 Certificate of Title from defendant[s] to plaintiffs on Lot No. [88], cancelling
TCT No. 20357 in the name of defendant MCIAA and to issue a new title on
the same lot in the name of Bernardo L. Lozada, Sr. and the heirs of Rosario
Mercado, namely: Vicente M. Lozada, Mario M. Lozada, Marcia L.
Godinez, Virginia L. Flores, Bernardo M. Lozada, Jr., Dolores L. Gacasan,
Socorro L. Cafaro and Rosario M. Lozada.
 
No pronouncement as to costs.
 
SO ORDERED.
 
Aggrieved, petitioners interposed an appeal to the CA. After the filing of the necessary appellate
briefs, the CA rendered its assailed Decision dated February 28, 2006, denying petitioners appeal
and affirming in toto the Decision of the RTC, Branch 57, Cebu City. Petitioners motion for
reconsideration was, likewise, denied in the questioned CA Resolution dated February 7, 2007.
 
Hence, this petition arguing that: (1) the respondents utterly failed to prove that there was a
repurchase agreement or compromise settlement between them and the Government; (2) the
judgment in Civil Case No. R-1881 was absolute and unconditional, giving title in fee simple to
the Republic; and (3) the respondents claim of verbal assurances from government officials
violates the Statute of Frauds.
 
The petition should be denied.
 
Petitioners anchor their claim to the controverted property on the supposition that the Decision in
the pertinent expropriation proceedings did not provide for the condition that should the intended
use of Lot No. 88 for the expansion of the Lahug Airport be aborted or abandoned, the property
would revert to respondents, being its former owners. Petitioners cite, in support of this position,
Fery v. Municipality of Cabanatuan, which declared 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
 
If x x x 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. If x x x land is expropriated
for a public street and the expropriation is granted upon condition that the
city can only use it for a public street, then, of course, when the city
abandons its use as a public street, it returns to the former owner, unless
there is some statutory provision to the contrary. 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,
whether it be the State, a province, or municipality, and in that case the non-
user does not have the effect of defeating the title acquired by the
expropriation proceedings. x x x.
 
When land has been acquired for public use in fee simple,
unconditionally, either by the exercise of eminent domain or by purchase, the
former owner retains no right in the land, and the public use may be
abandoned, or the land may be devoted to a different use, without any
impairment of the estate or title acquired, or any reversion to the former
owner. x x x.
 
 
Contrary to the stance of petitioners, this Court had ruled otherwise in Heirs of
Timoteo Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority, thus
 
Moreover, respondent MCIAA has brought to our attention a significant and telling
portion in the Decision in Civil Case No. R-1881 validating our discernment
that the expropriation by the predecessors of respondent was ordered under
the running impression that Lahug Airport would continue in operation
 
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 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 judgment 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 (emphasis supplied).
 
While in the trial in Civil Case No. R-1881 [we] could have simply acknowledged the
presence of public purpose for the exercise of eminent domain regardless of
the survival of 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--vis the expropriated Lots Nos. 916 and 920 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.
 
 
Indeed, the Decision in Civil Case No. R-1881 should be read in its entirety, wherein it is
apparent that the acquisition by the Republic of the expropriated lots was subject to the condition
that the Lahug Airport would continue its operation. The condition not having materialized
because the airport had been abandoned, the former owner should then be allowed to reacquire
the expropriated property.
 
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.
 
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.
 
Even without the foregoing declaration, in the instant case, on the question of whether
respondents were able to establish the existence of an oral compromise agreement that entitled
them to repurchase Lot No. 88 should the operations of the Lahug Airport be abandoned, we rule
in the affirmative.
 
It bears stressing that both the RTC, Branch 57, Cebu and the CA have passed upon this factual
issue and have declared, in no uncertain terms, that a compromise agreement was, in fact,
entered into between the Government and respondents, with the former undertaking to resell Lot
No. 88 to the latter if the improvement and expansion of the Lahug Airport would not be
pursued. In affirming the factual finding of the RTC to this effect, the CA declared
 
Lozadas testimony is cogent. An octogenarian widower-retiree and a resident of Moon
Park, California since 1974, he testified that government representatives
verbally promised him and his late wife while the expropriation proceedings
were on-going that the government shall return the property if the purpose
for the expropriation no longer exists. This promise was made at the
premises of the airport. As far as he could remember, there were no
expropriation proceedings against his property in 1952 because the first
notice of expropriation he received was in 1962. Based on the promise, he
did not hire a lawyer. Lozada was firm that he was promised that the lot
would be reverted to him once the public use of the lot ceases. He made it
clear that the verbal promise was made in Lahug with other lot owners
 before the 1961 decision was handed down, though he could not name the
government representatives who made the promise. It was just a verbal
promise; nevertheless, it is binding. The fact that he could not supply the
necessary details for the establishment of his assertions during cross-
examination, but that When it will not be used as intended, it will be returned
back, we just believed in the government, does not dismantle the credibility
and truthfulness of his allegation. This Court notes that he was 89 years old
when he testified in November 1997 for an incident which happened decades
ago. Still, he is a competent witness capable of perceiving and making his
perception known. The minor lapses are immaterial. The decision of the
competency of a witness rests primarily with the trial judge and must not be
disturbed on appeal unless it is clear that it was erroneous. The objection to
his competency must be made before he has given any testimony or as soon
as the incompetency becomes apparent. Though Lozada is not part of the
compromise agreement, he nevertheless adduced sufficient evidence to
support his claim.
 
 
As correctly found by the CA, unlike in Mactan Cebu International Airport Authority v. Court of
Appeals, cited by petitioners, where respondent therein offered testimonies which were hearsay
in nature, the testimony of Lozada was based on personal knowledge as the assurance from the
government was personally made to him. His testimony on cross-examination destroyed neither
his credibility as a witness nor the truthfulness of his words.
 
Verily, factual findings of the trial court, especially when affirmed by the CA, are
binding and conclusive on this Court and may not be reviewed. A petition for certiorari under
Rule 45 of the Rules of Court contemplates only questions of law and not of fact. Not one of the
exceptions to this rule is present in this case to warrant a reversal of such findings.
 
As regards the position of petitioners that respondents testimonial evidence violates the Statute
of Frauds, suffice it to state that the Statute of Frauds operates only with respect to executory
contracts, and does not apply to contracts which have been completely or partially performed, the
rationale thereof being as follows:
 
In executory contracts there is a wide field for fraud because unless they be in writing
there is no palpable evidence of the intention of the contracting parties. The
statute has precisely been enacted to prevent fraud. 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 delivered by him from the transaction in litigation, and,
at the same time, evade the obligations, responsibilities or liabilities assumed
 or contracted by him thereby.
 
 
In this case, the Statute of Frauds, invoked by petitioners to bar the claim of respondents for the
reacquisition of Lot No. 88, cannot apply, the oral compromise settlement having been partially
performed. By reason of such assurance made in their favor, respondents relied on the same by
not pursuing their appeal before the CA. Moreover, contrary to the claim of petitioners, the fact
of Lozadas eventual conformity to the appraisal of Lot No. 88 and his seeking the correction of a
clerical error in the judgment as to the true area of Lot No. 88 do not conclusively establish that
respondents absolutely parted with their property. To our mind, these acts were simply meant to
cooperate with the government, particularly because of the oral promise made to them.
 
The right of respondents to repurchase Lot No. 88 may be enforced based on a constructive trust
constituted on the property held by the government in favor of the former. On this note, our
ruling in Heirs of Timoteo Moreno is instructive, viz.:
 
Mactan-Cebu International Airport Authority is correct in stating that one would not find an
express statement in the Decision in Civil Case No. R-1881 to the effect that the [condemned]
lot would return to [the landowner] or that [the landowner] had a right to repurchase the same
if the purpose for which it was expropriated is ended or abandoned or if the property was to be
used other than as the Lahug Airport. This omission notwithstanding, and while the inclusion of
this pronouncement in the judgment of condemnation would have been ideal, such precision is
not absolutely necessary nor is it fatal to the cause of petitioners herein. No doubt, the return or
repurchase of the condemned properties of petitioners could be readily justified as the manifest
legal effect or consequence of the trial courts 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.
 
The predicament of petitioners involves a constructive trust, one that is akin to the
implied trust referred to in Art. 1454 of the Civil Code, 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. In
the case at bar, petitioners conveyed Lots No. 916 and 920 to the government
with the latter obliging itself to use the realties for the expansion of Lahug
Airport; failing to keep its bargain, the government can be compelled by
petitioners to reconvey the parcels of land to them, otherwise, petitioners
would be denied the use of their properties upon a state of affairs that was
not conceived nor contemplated when the expropriation was authorized.
 
Although the symmetry between the instant case and the situation contemplated by
Art. 1454 is not perfect, the provision is undoubtedly applicable. For, as
explained by an expert on the law of trusts: The only problem of great
importance in the field of constructive trust is to decide whether in the
numerous and varying fact situations presented to the courts there is a
wrongful holding of property and hence a threatened unjust enrichment of
the defendant. 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.
 
 
On the matter of the repurchase price, while petitioners are obliged to reconvey Lot No. 88 to
respondents, the latter must return to the former what they received as just compensation for the
expropriation of the property, plus legal interest to be computed from default, which in this case
runs from the time petitioners comply with their obligation to respondents.
 
Respondents must likewise pay petitioners the necessary expenses they may have incurred in
maintaining Lot No. 88, as well as the monetary value of their services in managing it to the
extent that respondents were benefited thereby.
 
Following Article 1187 of the Civil Code, petitioners may keep whatever income or fruits they
may have obtained from Lot No. 88, and respondents need not account for the interests that the
amounts they received as just compensation may have earned in the meantime.
 
In accordance with Article 1190 of the Civil Code vis--vis Article 1189, which provides that (i)f
a thing is improved by its nature, or by time, the improvement shall inure to the benefit of the
creditor x x x, respondents, as creditors, do not have to pay, as part of the process of restitution,
the appreciation in value of Lot No. 88, which is a natural consequence of nature and time.
 
WHEREFORE, the petition is DENIED. The February 28, 2006 Decision of the Court of
Appeals, affirming the October 22, 1999 Decision of the Regional Trial Court, Branch 87, Cebu
City, and its February 7, 2007 Resolution are AFFIRMED with MODIFICATION as follows:
 
1. Respondents are ORDERED to return to petitioners the just compensation they received for
the expropriation of Lot No. 88, plus legal interest, in the case of default, to be computed from
the time petitioners comply with their obligation to reconvey Lot No. 88 to them;
 
2. Respondents are ORDERED to pay petitioners the necessary expenses the latter incurred in
maintaining Lot No. 88, plus the monetary value of their services to the extent that respondents
were benefited thereby;
 
3. Petitioners are ENTITLED to keep whatever fruits and income they may have
obtained from Lot No. 88; and
 
4. Respondents are also ENTITLED to keep whatever interests the amounts they received as
just compensation may have earned in the meantime, as well as the appreciation in value of Lot
No. 88, which is a natural consequence of nature and time;
 
In light of the foregoing modifications, the case is REMANDED to the Regional Trial Court,
Branch 57, Cebu City, only for the purpose of receiving evidence on the amounts that
respondents will have to pay petitioners in accordance with this Courts decision. No costs.

SO ORDERED.