The Supreme Court held that land expropriated for a specific public purpose, such as an airport expansion, must be returned to its former owners if that purpose is abandoned. This ruling emphasizes that the power of eminent domain is not absolute and that property rights are protected when the government’s initial justification for taking land no longer exists. It provides a pathway for landowners to reclaim their properties when the intended public use fails to materialize, ensuring fairness and preventing unjust enrichment by the state.

Lahug Airport Lands: Can Expropriated Property Revert After Project Abandonment?

This case revolves around two parcels of land in Lahug, Cebu City, originally owned by the Heirs of Timoteo Moreno and Maria Rotea. In 1949, the National Airport Corporation, the predecessor of the Mactan-Cebu International Airport Authority (MCIAA), sought to acquire these lands for the expansion of Lahug Airport. While some landowners sold their properties with a right of repurchase, the Morenos and Roteas refused, deeming the payment inadequate. Consequently, in 1952, the Civil Aeronautics Administration initiated expropriation proceedings, leading to a court decision in 1961 that condemned the land for public use upon payment of just compensation. The Heirs of Moreno and Rotea were paid, and the titles were transferred to the Republic of the Philippines, later to MCIAA.

However, by the end of 1991, Lahug Airport ceased operations after Mactan Airport opened. The expropriated lands, Lots Nos. 916 and 920, were never used for the intended airport expansion. This led the heirs to request the right to repurchase their properties, citing assurances made by government officials during the initial acquisition. When their pleas were ignored, they filed a complaint for reconveyance and damages against MCIAA in 1997, arguing that the expropriation became functus officio (having no further force or authority) when the intended purpose was abandoned.

The trial court sided with the heirs, granting them the right to repurchase the properties at the original just compensation price, but subject to the rights of other parties who had intervened. MCIAA appealed, and the Court of Appeals reversed the trial court’s decision, asserting that the original condemnation was unconditional and granted MCIAA ownership in fee simple. The appellate court relied on precedents like Fery v. Municipality of Cabanatuan and Mactan-Cebu International Airport Authority v. Court of Appeals, which emphasized that a mere deviation from the public purpose does not automatically revert the property to its former owners.

The Supreme Court then faced the complex task of balancing established jurisprudence with the equities of the case. The Court acknowledged the historical context, where MCIAA’s predecessors had led landowners to believe they could repurchase their properties if the airport project failed. The key question became whether the Heirs of Moreno and Rotea had a valid claim to repurchase their land, given that the intended public use had not materialized.

The Supreme Court distinguished this case from Mactan-Cebu International Airport Authority v. Court of Appeals, where the landowner’s evidence was deemed inadmissible and lacking probative value. In contrast, the Heirs of Moreno and Rotea presented substantial evidence, which the trial court found credible, supporting their claim of a right to repurchase. Furthermore, the Court highlighted a crucial aspect of the original condemnation decision, stating:

As for the public purpose of the expropriation proceeding, it cannot now be doubted… 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.

The Court interpreted this statement as evidence that the expropriation was predicated on the understanding that Lahug Airport would remain operational. Consequently, when the airport closed and the land was not used for the intended expansion, the Court reasoned that the rights between the State and the former owners needed equitable adjustment. The Court clarified that its present interpretation aligns with the principle that a final judgment can be “clarified” by referring to other parts of the decision.

The Court then invoked the concept of a constructive trust, akin to the implied trust under Article 1454 of the Civil Code. This provision states that if property is conveyed to secure an obligation, the grantor can demand reconveyance upon fulfilling that obligation. In this case, the obligation was to use the land for the Lahug Airport expansion. Since that obligation was not met, the Court found that the government could be compelled to reconvey the land.

The Court acknowledged that the situation wasn’t a perfect fit with Article 1454 but emphasized that constructive trusts are flexible tools used to prevent unjust enrichment. The role of the trustee, in this case, MCIAA, is to transfer the property back to the beneficiary, the Heirs of Moreno and Rotea. The Court then outlined the obligations of both parties based on Article 1190 of the Civil Code, which governs the extinguishment of obligations to give:

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 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 x

The Court ordered MCIAA to reconvey the lands to the heirs, subject to existing liens like the leasehold right of the DPWH. In return, the heirs were required to restore the just compensation they received, including legal interest from 1947, and reimburse MCIAA for necessary expenses incurred in maintaining the properties. The government was allowed to retain any income derived from the land, and the heirs were not required to account for interest earned on the compensation. Additionally, the Court clarified that the heirs did not have to pay for improvements introduced by third parties, like the DPWH, but would have to compensate MCIAA for any improvements made by the authority itself if they chose to keep them.

FAQs

What was the key issue in this case?	The central issue was whether the heirs of the original landowners had the right to repurchase land that had been expropriated for a public purpose (airport expansion) that was never realized.
What is eminent domain?	Eminent domain is the right of the government to take private property for public use, with just compensation paid to the owner. This power is enshrined in the Philippine Constitution.
What does “functus officio” mean in this context?	It means that the original purpose for which the land was expropriated no longer exists or has been abandoned. In this case, the intended airport expansion never occurred.
What is a constructive trust?	A constructive trust is an equitable remedy used by courts to prevent unjust enrichment. It compels someone holding property unfairly to transfer it to the rightful owner.
What is the significance of the trial court’s original decision?	The Supreme Court emphasized the trial court’s presumption that Lahug Airport would continue to operate, indicating that the expropriation was conditional on the airport’s continued operation.
What were the obligations of the heirs after the reconveyance was ordered?	The heirs were required to return the just compensation they had received, including legal interest, and to reimburse MCIAA for necessary expenses incurred in maintaining the properties.
What happens to improvements made on the land?	Improvements made by third parties (like DPWH) are governed by existing contracts. The heirs must pay MCIAA for any improvements made by the authority if they wish to keep them.
What was the final ruling of the Supreme Court?	The Supreme Court granted the petition, ordering MCIAA to reconvey the lands to the heirs, subject to the conditions of returning the just compensation and reimbursing expenses.

This decision underscores the principle that the power of eminent domain is not absolute and that property rights are protected even after expropriation. It highlights the importance of ensuring that the stated public purpose is genuinely pursued and provides a mechanism for landowners to reclaim their properties when the original justification for the taking no longer exists. The ruling also emphasizes the equitable considerations that courts must weigh when balancing the interests of the state and individual property owners.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Heirs of Timoteo Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority, G.R. No. 156273, October 15, 2003