MCIAA vs. Court of Appeals

When land is expropriated in fee simple, unconditionally, and the judgment of expropriation contains no resolutory condition or right of repurchase, the former owner retains no rights in the land, and the subsequent abandonment of the public use does not defeat the title acquired by the expropriator or cause any reversion. A judgment in an expropriation case may not be modified by parol evidence of an alleged prior or contemporaneous agreement, and an alleged contract for the sale of real property is unenforceable under the Statute of Frauds unless proven by a writing subscribed by the party charged.

Virginia Chiongbian purchased Lot 941, consisting of 13,766 square meters in Lahug, Cebu City, from its original owner Antonina Faborada in June 1953, during the pendency of expropriation proceedings instituted by the Republic of the Philippines on April 16, 1952, for the expansion and improvement of Lahug Airport. The Lahug Airport had been occupied by the United States Army during the liberation, turned over to the Philippine Government in 1947 through the Surplus Property Commission, and subsequently administered by the Bureau of Aeronautics, the National Airports Corporation, and finally the Civil Aeronautics Administration. In 1990, Republic Act No. 6958 created the Mactan-Cebu International Airport Authority (MCIAA), to which the assets of Lahug Airport, including Lot 941, were transferred. When Mactan International Airport opened for commercial flights, Lahug Airport closed at the end of 1991, and all airport activities were transferred to Mactan.

Lot 941, consisting of 13,766 square meters located in Lahug, Cebu City, adjoined the Lahug Airport and was originally owned by Antonina Faborada. In June 1953, Virginia Chiongbian purchased the lot from Faborada for ₱8,000.00, and Transfer Certificate of Title No. 9919 was issued in her name. Prior to that purchase, on April 16, 1952, the Republic of the Philippines, represented by the Civil Aeronautics Administration, had already filed expropriation proceedings — Civil Case No. R-1881 — before the Court of First Instance of Cebu, Branch III, against forty-five landowners including Faborada, to acquire several parcels of land adjoining Lahug Airport for its expansion and improvement.

On December 29, 1961, judgment was rendered in the expropriation case in favor of the Republic, ordering payment of ₱34,415.00 to Chiongbian for Lot 941, with legal interest computed from November 16, 1947, the date when the government began using the property. Chiongbian did not appeal from the judgment and accepted the compensation. Absolute title to Lot 941 was thereafter transferred to the Republic under TCT No. 27696. Some of the co-defendant landowners — Milagros Urgello, Mamerto Escano, Inc., and Maria Atega Vda. de Deen — did appeal to the Court of Appeals in CA-G.R. No. 33045-R, where a modified judgment was rendered allowing them to repurchase their expropriated properties through separate compromise agreements with the Republic, subject to the resolutory condition that title would revert to them if the property was no longer used as an airport.

In 1990, Republic Act No. 6958 created the Mactan-Cebu International Airport Authority, to which the assets of Lahug Airport were transferred. Lot 941 was transferred to MCIAA under TCT No. 120366 on May 8, 1992. No expansion of Lahug Airport was undertaken, and when Mactan International Airport opened for commercial flights, Lahug Airport was closed at the end of 1991, with all airport activities transferred to Mactan.

On July 24, 1995, Chiongbian filed a complaint for reconveyance of Lot 941 with the Regional Trial Court of Cebu, Branch 9, alleging that she had accepted the expropriation compensation upon the assurance of the National Airports Corporation that she or her heirs would be given the right of reconveyance once the land was no longer used as an airport. The RTC rendered judgment on June 3, 1997, ordering MCIAA to restore possession and ownership of Lot 941 to Chiongbian upon reimbursement of the expropriation price. MCIAA appealed to the Court of Appeals, which affirmed the RTC decision and denied the motion for reconsideration.

• Unconditional Expropriation Judgment: MCIAA contended that the Republic acquired Lot 941 through expropriation proceedings in Civil Case No. R-1881, and the judgment rendered therein was unconditional, containing no stipulation that ownership would revert to Chiongbian or granting her a right to repurchase if the lot was no longer used for the purpose for which it was expropriated.
• Statute of Frauds: MCIAA argued that Chiongbian's claim of a repurchase agreement was not supported by documentary evidence, and that oral evidence to prove such an agreement was inadmissible under the Statute of Frauds. MCIAA maintained that it had objected to the testimonies of Chiongbian, Bercede, and Pastrana for being in violation of the Statute of Frauds, contrary to the Court of Appeals' finding that no objection was made.
• Inapplicability of Limbaco: MCIAA asserted that the ruling in Limbaco vs. Court of Appeals was not squarely in point because that case involved a contract of sale of real property and not an expropriation proceeding, and the parol evidence rule applies to written agreements, not to judgments of a court.
• Non-party to Compromise Agreements: MCIAA alleged that the modified judgment in CA-G.R. No. 33045-R should not redound to Chiongbian's benefit because she did not join in the appeal of her co-defendants and was not a party to the compromise agreements they entered into with the Republic.
• Repurchase Price: Assuming arguendo that Chiongbian had a right to repurchase, MCIAA claimed that the Court of Appeals erred in ruling that the repurchase price should be the same ₱34,415.00 paid as expropriation compensation rather than the prevailing market price, arguing that the lower price would unjustly enrich Chiongbian given that the property is now worth hundreds of millions of pesos due to improvements introduced by MCIAA.

• Non-Forum Shopping Defect: Chiongbian prayed that the petition be denied for violating the 1997 Rules on Civil Procedure, specifically the requirement of a certification of non-forum shopping, on the ground that the Verification and Certification was signed by Colonel Marcelino A. Cordova, whose appointment as Assistant General Manager of MCIAA had been disapproved by the Civil Service Commission as early as September 2, 1999, rendering him unqualified to sign as "principal party" under Section 5, Rule 7 of the Rules of Court.
• Affirmance of CA Decision: Chiongbian prayed that the Court of Appeals decision be affirmed.

• Validity of Verification: Whether the Verification and Certification against Forum Shopping signed by Colonel Cordova was sufficient despite the disapproval of his appointment as Assistant General Manager of MCIAA.
• Reversion of Expropriated Property: Whether the abandonment of the public use for which Lot 941 was expropriated entitles Chiongbian to reacquire the property.
• Admissibility of Parol Evidence: Whether parol evidence was admissible to prove the existence of an alleged repurchase agreement in the context of an expropriation judgment.
• Statute of Frauds: Whether the testimonies of Chiongbian, Bercede, and Pastrana were admissible to prove the alleged repurchase agreement under the Statute of Frauds.
• Hearsay: Whether the testimonies of Chiongbian and Bercede regarding the alleged assurance of reconveyance were admissible or hearsay.
• Benefit of Modified Judgment: Whether the modified judgment in CA-G.R. No. 33045-R, which allowed Chiongbian's co-defendants to repurchase their properties, could redound to Chiongbian's benefit despite her not being a party to the appeal or the compromise agreements.

• Validity of Verification: Yes. The verification was sufficient because Colonel Cordova signed it as Acting General Manager pursuant to Office Order No. 5322-99 dated September 10, 1999, issued by the General Manager of MCIAA, and not pursuant to his disapproved appointment as Assistant General Manager.
• Reversion of Expropriated Property: No. The expropriation judgment in Civil Case No. R-1881 granted fee simple title to the Republic of the Philippines without any condition of reversion or right of repurchase, and the abandonment of the public use does not defeat the title acquired.
• Admissibility of Parol Evidence: No. The parol evidence rule, which allows evidence of the terms of a written agreement only as contained in the writing itself, applies to written agreements and has no application to a judgment of a court. Permitting parol evidence to prove an alleged compromise agreement prior to the judgment would modify a judgment that had long become final and executory.
• Statute of Frauds: No. Under Article 1403 of the Civil Code, a contract for the sale of real property is unenforceable unless in writing and subscribed by the party charged; evidence of the agreement cannot be received without the writing or secondary evidence of its contents. MCIAA had properly objected to the testimonies on this ground.
• Hearsay: No. Chiongbian's testimony regarding the alleged assurance was based on what her lawyer, Atty. Pedro Calderon, told her, and Calderon was not presented as a witness. Bercede similarly lacked personal knowledge, having learned of the alleged assurance only through his father. Both testimonies were inadmissible hearsay.
• Benefit of Modified Judgment: No. Chiongbian did not appeal the judgment of expropriation and was not a party to the appeal of her co-defendants or to the compromise agreements they entered into with the Republic. A judicial compromise is conclusive only between the parties and is not binding on one who did not sign it.

• Validity of Verification: The Court found that Colonel Cordova signed the Verification and Certification against Forum Shopping in his capacity as Acting General Manager of MCIAA, pursuant to Office Order No. 5322-99 dated September 10, 1999, issued by General Manager Alfonso Allere. His signing was not pursuant to his appointment as Assistant General Manager, which had been disapproved by the Civil Service Commission. This fact was not disputed by Chiongbian. The verification was therefore validly executed.

• Reversion of Expropriated Property: The Court relied on Fery vs. Municipality of Cabanatuan, which established that the answer to whether abandonment of public use entitles the former owner to reacquire expropriated property depends on the character of the title acquired by the expropriator. If the decree of expropriation gives the entity a fee simple title, the land becomes the absolute property of the expropriator, and non-user does not defeat the title. The dispositive portion of the judgment in Civil Case No. R-1881 was clear and unequivocal: it declared the expropriation justified, fixed just compensation, and directed the issuance of new titles in the name of the Republic. No condition was imposed that the lot would return to Chiongbian or that she had a right to repurchase if the purpose for which it was expropriated ended or was abandoned. The judgment thus conveyed fee simple title unconditionally.

• Admissibility of Parol Evidence: The Court distinguished the present case from Mactan Cebu International Airport Authority vs. Court of Appeals (the Limbaco case), where parol evidence was allowed to prove a contemporaneous collateral agreement in the context of a contract of sale. The parol evidence rule — that when the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon — applies to written agreements and has no application to a judgment of a court. To permit Chiongbian to prove an alleged compromise agreement entered into prior to the rendition of judgment would result in a modification of a judgment that had long become final and executory.

• Statute of Frauds: Under Article 1403 of the Civil Code, a contract for the sale of real property is unenforceable unless the same, or some note or memorandum thereof, is in writing and subscribed by the party charged or his agent. Evidence of the agreement cannot be received without the writing or secondary evidence of its contents. Contrary to the Court of Appeals' finding, the records showed that MCIAA had objected to the testimonies of Chiongbian, Bercede, and Pastrana when offered to prove the existence of the alleged written agreement, on the ground of violation of the Statute of Frauds. The testimonies were therefore inadmissible to prove the alleged sale.

• Hearsay: Chiongbian's own deposition testimony revealed that she had no personal knowledge of the alleged assurance made by the Republic that Lot 941 would be returned to her. She testified that the assurance was made to her lawyer, Atty. Pedro Calderon, who was not presented as a witness. Her testimony was thus based on the knowledge of another person not on the witness stand, making it hearsay. Bercede's testimony suffered the same defect, as he learned of the alleged assurance only through his father, not from personal knowledge. Pastrana's testimony that a deed of sale had been executed was uncorroborated and contradicted by Chiongbian herself, who never mentioned any deed of sale. The records showed that Lot 941 was transferred to the Republic pursuant to the expropriation judgment, which Chiongbian herself enforced by filing a motion for withdrawal of the money. Had a sale actually taken place, the Republic would not have needed to pursue expropriation, since expropriation lies only when made necessary by the owner's opposition to the sale or by the lack of agreement on price.

• Benefit of Modified Judgment: The modified judgment in CA-G.R. No. 33045-R arose from separate and distinct compromise agreements entered into by Chiongbian's co-defendants with the Republic, containing a resolutory condition of reversion. Chiongbian did not appeal the expropriation judgment and was not a party to the appeal or to the compromise agreements. A compromise is a contract perfected by mere consent, and a judicial compromise has the force of law and is conclusive only between the parties who signed it. Since Chiongbian was not a party to the compromise agreements, she could not legally invoke them.

• Character of Title in Expropriation — When land is expropriated for a particular purpose with the condition that the property shall return to the former owner when that purpose is ended or abandoned, the former owner reacquires the property upon termination or abandonment of the purpose. However, when the decree of expropriation gives the expropriator a fee simple title, the land becomes the absolute property of the expropriator, and non-user does not defeat the title acquired. The public use may be abandoned or the land devoted to a different use without any impairment of the estate or title acquired, or any reversion to the former owner. The Court applied this doctrine by examining the dispositive portion of the judgment in Civil Case No. R-1881 and finding that it granted fee simple title to the Republic without any resolutory condition.

• Parol Evidence Rule Does Not Apply to Judgments — The parol evidence rule, which provides that when the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon, applies to written agreements between parties and has no application to a judgment of a court. Permitting parol evidence to prove an alleged prior agreement in the context of an expropriation judgment would modify a final and executory judgment.

• Statute of Frauds (Article 1403, Civil Code) — A contract for the sale of real property is unenforceable unless the same, or some note or memorandum thereof, is in writing and subscribed by the party charged or by his agent. Evidence of the agreement cannot be received without the writing or secondary evidence of its contents. The Court applied this to bar the testimonies of Chiongbian, Bercede, and Pastrana offered to prove the alleged repurchase agreement.

• Hearsay Rule — Evidence is hearsay if its probative value is not based on the personal knowledge of the witness but on the knowledge of another person who is not on the witness stand. The Court applied this to exclude Chiongbian's testimony (based on what her lawyer told her) and Bercede's testimony (based on what his father told him) regarding the alleged assurance of reconveyance.

• Binding Effect of Compromise Agreements — A judicial compromise has the force of law and is conclusive between the parties, but it is not valid and binding on a party who did not sign it. The Court applied this to hold that Chiongbian, not being a party to the compromise agreements of her co-defendants, could not invoke their terms.

• "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." — This passage, quoted from Fery vs. Municipality of Cabanatuan, articulates the controlling doctrine on the character of title acquired in expropriation and forms the ratio decidendi for denying reversion.

• "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 rights 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." — This passage restates the doctrine in definitive terms and directly supports the conclusion that Chiongbian retained no rights in Lot 941 after the unconditional expropriation.

• "To permit CHIONGBIAN to prove the existence of a compromise settlement which she claims to have entered into with the Republic of the Philippines prior to the rendition of judgment in the expropriation case would result in a modification of the judgment of a court which has long become final and executory." — This passage explains why the parol evidence rule's inapplicability to judgments bars Chiongbian's attempt to prove an alleged prior agreement, distinguishing the case from the Limbaco ruling.

• Fery vs. Municipality of Cabanatuan, 42 Phil 28 (1921) — Controlling precedent on the character of title acquired through expropriation. The Court relied on this case to establish that when the decree of expropriation grants fee simple title, non-user does not defeat the title and no reversion occurs. The quoted passage from Fery formed the core of the ratio decidendi.
• Mactan Cebu International Airport Authority vs. Court of Appeals, 263 SCRA 736 (1996) (the Limbaco case) — Distinguished. This case allowed parol evidence to prove a contemporaneous collateral agreement in the context of a contract of sale. The Court held it inapplicable because the present case involved an expropriation judgment, not a written contract, and the parol evidence rule does not apply to judgments.
• Republic of the Philippines vs. Escaño, et al., CA-G.R. No. 33045-R — Distinguished. The modified judgment therein arose from compromise agreements entered into by Chiongbian's co-defendants. The Court held that the judgment could not redound to Chiongbian's benefit because she was neither a party to the appeal nor to the compromise agreements.
• PNOC Shipping and Transport Corporation vs. Court of Appeals, 297 SCRA 402 (1998) — Cited for the definition of hearsay evidence, supporting the exclusion of Chiongbian's and Bercede's testimonies.
• Noble vs. City of Manila, 67 Phil 1 (1938) — Cited for the principle that expropriation lies only when made necessary by the opposition of the owner to the sale or by the lack of agreement as to price, supporting the conclusion that no deed of sale had been executed since the Republic pursued expropriation.

• Article 1403, Civil Code — Provides that a contract for the sale of real property is unenforceable unless the same, or some note or memorandum thereof, is in writing and subscribed by the party charged or by his agent. The Court applied this provision to hold that the alleged repurchase agreement could not be proven by oral testimony, as no writing was presented, and evidence of the agreement could not be received without the writing or secondary evidence of its contents.
• Section 5, Rule 7, Rules of Court — Pertains to the requirement of a certification of non-forum shopping executed by the plaintiff or principal party. The Court found compliance with this requirement because Colonel Cordova validly signed the certification as Acting General Manager pursuant to Office Order No. 5322-99, not in his capacity as the disapproved Assistant General Manager.
• Republic Act No. 6958 — Created the Mactan-Cebu International Airport Authority, to which the assets of Lahug Airport, including Lot 941, were transferred. This statute provided the backdrop for MCIAA's acquisition of title to Lot 941 under TCT No. 120366.

Melo (Chairman), Vitug, and Panganiban, JJ., concurred.