Title
ATO vs. Tongoy
Case
G.R. No. 174011
Decision Date
Apr 14, 2008
Respondents proved an oral compromise agreement allowing repurchase of expropriated lots after Lahug Airport's closure; Supreme Court upheld lower courts' rulings.
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Case Digest (G.R. No. 174011)

Facts:

Expropriation Proceedings

  • In 1963, the Republic of the Philippines initiated expropriation proceedings for the improvement and expansion of the Lahug Airport in Cebu City. Among the properties affected were Lot Nos. 913-F and 913-G, owned by respondents Angeles Urgello Tongoy and the heirs of Pilar U. Arcenas.

Compromise Agreement

  • Pending the appeal of the expropriation decision, the parties entered into a verbal compromise agreement. The respondents agreed to withdraw their appeal in exchange for a commitment that the subject lots would be resold to them at the same price at which they were expropriated if the Civil Aeronautics Administration (CAA), later succeeded by the Air Transportation Office (ATO), abandoned the Lahug Airport. Consequently, the respondents withdrew their appeal.

Post-Expropriation Developments

  • The properties were registered in the name of the government after expropriation. However, the planned improvements and expansion of the Lahug Airport did not materialize. Instead, the ATO moved its operations to the Mactan Airbase and leased out the Lahug Airport area. The Department of Public Works and Highways constructed a building on a portion of the subject properties.

Requests to Repurchase

  • In 1964, respondents requested to repurchase the lots based on the CAA's commitment. The CAA responded that the Lahug Airport might still be needed as an emergency DC-3 airport but reiterated its policy to prioritize former owners in case of resale, subject to presidential approval.
  • In 1967, respondents reiterated their offer to repurchase, citing an executive order by President Ferdinand Marcos directing the closure of the Lahug Airport. The CAA, however, stated that it had no plans to abandon the airport.

Transfer of Operations and Closure

  • In 1989, President Corazon Aquino directed the transfer of general aviation operations from the Lahug Airport to the Mactan International Airport by the end of 1990, leading to the closure of the Lahug Airport. The management of the Lahug Airport was transferred to the Mactan-Cebu International Airport Authority (MCIAA) under Republic Act No. 6958.

Legal Action

  • In 1992, respondents filed an action for recovery of possession and reconveyance of ownership of the properties with damages in the Regional Trial Court (RTC) of Cebu City. Petitioners failed to present evidence, cross-examine witnesses, or submit a memorandum.
  • The RTC ruled in favor of the respondents, ordering the restoration of possession and ownership of the lots to them upon reimbursement of the just compensation paid during expropriation.

Appeal to the Court of Appeals

  • Petitioners appealed to the Court of Appeals (CA), which affirmed the RTC's decision. The CA denied reconsideration in 2006.

Issue:

The core issue in this case is whether the respondents were able to prove the existence of an oral compromise agreement that entitled them to repurchase the expropriated lots.

Ruling:

The Supreme Court denied the petition, affirming the decisions of the RTC and CA. The Court found no reason to disturb the factual findings of the lower courts, which concluded that there was indeed an oral compromise agreement allowing the respondents to repurchase the lots. The Court also cited a similar case, Heirs of Timoteo Moreno and Maria Rotea v. MCIAA, where the right of previous owners to repurchase expropriated land was recognized.

Ratio:

  1. Existence of the Oral Agreement: The respondents successfully proved the existence of an oral compromise agreement that allowed them to repurchase the lots if the Lahug Airport was abandoned. Petitioners failed to rebut this evidence.
  2. Precedent: The Court referenced Heirs of Timoteo Moreno and Maria Rotea v. MCIAA, where a similar commitment by the government to allow former owners to repurchase expropriated land was upheld.
  3. Inapplicability of Cited Cases: The cases cited by petitioners (MCIAA v. CA and ATO v. Gopuco) were deemed inapplicable because, in those cases, the previous owners either failed to prove the compromise agreement or were not parties to it.

Conclusion:

The Supreme Court upheld the right of the respondents to repurchase the expropriated lots based on the proven oral compromise agreement and the government's prior commitment. The petition was denied, and the decisions of the lower courts were affirmed.


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