WBench1

THIRD DIVISION

[G.R. No. 139495. November 27, 2000]

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), petitioner, vs. THE HON. COURT OF APPEALS and VIRGINIA CHIONGBIAN, respondents.

D E C I S I O N

GONZAGA-REYES, J.:

This Petition for Review on Certiorari seeks the reversal of the Decision of the Court of Appeals[1] in CA G.R. CV No. 56495 entitled “Virginia Chiongbian vs. Mactan-Cebu International Airport Authority” which affirmed the Decision of the Regional Trial Court[2], 7th Judicial Region, Branch 24, Cebu City.

The Court of Appeals rendered its decision based on the following facts:

“Subject of the action is Lot 941 consisting of 13,766 square meters located in Lahug, Cebu City, adjoining the then Lahug Airport and covered by TCT No. 120366 of the Registry of Deeds of Cebu City, in the name of MCIAA.

During the liberation, the Lahug Airport was occupied by the United States Army. Then, in 1947, it was turned over to the Philippine Government through the Surplus Property Commission. Subsequently, it was transferred to the Bureau of Aeronautics which was succeeded by the National Airports Corporation. When the latter was dissolved, it was replaced by the Civil Aeronautics Administration (CAA).

On April 16, 1952, the Republic of the Philippines, represented by the CAA, filed an expropriation proceeding, Civil Case No. R-1881 (Court of First Instance of Cebu, Third Branch), on several parcels of land in Lahug, Cebu City, which included Lot 941, for the expansion and improvement of Lahug Airport.

In June 1953, appellee Virginia Chiongbian purchased Lot 941 from its original owner, Antonina Faborada, the original defendant in the expropriation case, for P8,000.00. Subsequently, TCT No. 9919 was issued in her name (Exh. D).

Then, on December 29, 1961, judgment was rendered in the expropriation case in favor of the Republic of the Philippines which was made to pay Virginia Chiongbian the amount of P34,415.00 for Lot 941, with legal interest computed from November 16, 1947, the date when the government begun using it. Virginia Chiongbian did not appeal therefrom.

Thereafter, absolute title to Lot 941 was transferred to the Republic of the Philippines under TCT No. 27696 (Exhs. E and 2).

Then, in 1990, Republic Act No. 6958 was passed by Congress creating the Mactan-Cebu International Airport Authority to which the assets of the Lahug Airport was transferred. Lot 941 was then transferred in the name of MCIAA under TCT No. 120366 on May 8, 1992.

On July 24, 1995, Virginia Chiongbian filed a complaint for reconveyance of Lot 941 with the Regional Trial Court of Cebu, Branch 9, docketed as Civil Case No. CEB-17650 alleging, that sometime in 1949, the National Airport Corporation (NAC) ventured to expand the Cebu Lahug Airport. As a consequence, it sought to acquire by expropriation or negotiated sale several parcels of lands adjoining the Lahug Airport, one of which was Lot 941 owned by Virginia Chiongbian. Since she and other landowners could not agree with the NAC’s offer for the compensation of their lands, a suit for eminent domain was instituted on April 16, 1952, before the then Court of First Instance of Cebu (Branch III), against forty-five (45) landowners, including Virginia Chiongbian, docketed as Civil Case No. R-1881, entitled “Republic of the Philippine vs. Damian Ouano, et al.” It was finally decided on December 29, 1961 in favor of the Republic of the Philippines.

Some of the defendants-landowners, namely, Milagros Urgello, Mamerto Escano, Inc. and Ma. Atega Vda. de Deen, appealed the decision to the Court of Appeals under CA-G.R. No. 33045-R, which rendered a modified judgment allowing them to repurchase their expropriated properties. Virginia Chiongbian, on the other hand, did not appeal and instead, accepted the compensation for Lot 941 in the amount of P34,415, upon the assurance of the NAC that she or her heirs would be given the right of reconveyance for the same price once the land would no longer be used as (sic) airport.

Consequently, TCT No. 9919 of Virginia Chiongbian was cancelled and TCT No. 27696 was issued in the name of the Republic of the Philippines. Then, with the creation of the MCIAA, it was cancelled and TCT No. 120366 was issued in its name.

However, no expansion of the Lahug Airport was undertaken by MCIAA and its predecessors-in-interest. In fact, when Mactan International Airport was opened for commercial flights, the Lahug Airport was closed at the end of 1991 and all its airport activities were undertaken at and transferred to the Mactan International Airport. Thus, the purpose for which Lot 941 was taken ceased to exist.”[3]

On June 3, 1997, the RTC rendered judgment in favor of the respondent Virginia Chiongbian (CHIONGBIAN) the dispositive portion of the decision reads:

“WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in favor of the plaintiff, Virginia Chiongbian and against the defendant, Mactan Cebu International Authority (MCIAA), ordering the latter to restore to plaintiff the possession and ownership of the property denominated as Lot No. 941 upon reimbursement of the expropriation price paid to plaintiff.

The Register of Deeds is therefore ordered to effect the Transfer of the Certificate Title from the defendant to the plaintiff on Lot No. 941, cancelling Transfer Certificate of Title No. 120366 in the name of defendant MCIAA and to issue a new title on the same lot in the name of Virginia Chiongbian.

No pronouncement as to cost.

SO ORDERED.”[4]

Aggrieved by the holding of the trial court, the petitioner Mactan Cebu International Airport Authority (MCIAA) appealed the decision to the Court of Appeals, which affirmed the RTC decision. Motion for Reconsideration was denied[5] hence this petition where MCIAA raises the following grounds in support of its petition:

“I.

THE COURT OF APPEALS ERRED IN UPHOLDING THE TRIAL COURT’S JUDGMENT THAT THERE WAS A REPURCHASE AGREEMENT AND IGNORING PETITIONER’S PROTESTATIONS THAT ADMISSION OF RESPONDENT’S ORAL EVIDENCE IS NOT ALLOWED UNDER THE STATUE OF FRAUDS.

II.

THE COURT OF APPEALS ERRED IN HOLDING THAT THE DECISION IN LIMBACO IS MATERIAL AND APPLICABLE TO THE CASE AT BAR.

III.

THE COURT OF APPEALS ERRED IN HOLDING THAT THE MODIFIED JUDGMENT IN CA-GR NO. 33045 SHOULD INURE TO THE BENEFIT OF CHIONGBIAN EVEN IF SHE WAS NOT A PARTY IN SAID APPEALED CASE.

IV.

THE COURT OF APPEALS ERRED IN RULING THAT THE RIGHT OF VIRGINIA CHIONGBIAN TO REPURCHASE SHOULD BE UNDER THE SAME TERMS AND CONDITIONS AS THE OTHER LANDOWNERS SUCH THAT HER REPURCHASE PRICE IS ONLY P 34, 415.00.”[6]

MCIAA contends that the Republic of the Philippines appropriated Lot No. 941 through expropriation proceedings in Civil Case No. R-1881. The judgment rendered therein was unconditional and did not contain a stipulation that ownership thereof would revert to CHIONGBIAN nor did it give CHIONGBIAN the right to repurchase the same in the event the lot was no longer used for the purpose it was expropriated. Moreover, CHIONGBIAN’s claim that there was a repurchase agreement is not supported by documentary evidence. The mere fact that twenty six (26) other landowners repurchased their property located at the aforementioned Lahug airport is of no consequence considering that said landowners were able to secure a rider in their contracts entitling them to repurchase their property.

MCIAA also argues that the Court of Appeals erroneously concluded that it did not object to the evidence presented by CHIONGBIAN to prove the alleged repurchase agreement considering that the transcript of stenographic notes shows that it manifested its objections thereto for being in violation of the Statute of Frauds.

MCIAA also faults the Court of Appeals for applying the ruling in the case of Limbaco vs. Court of Appeals[7]. It is the position of MCIAA that the ruling in the case of Limbaco is not squarely in point with respect to the present case for the reason that the Limbaco case involved a contract of sale of real property and not an expropriation.

Moreover, MCIAA alleges that the Court of Appeals erred in ruling that the case of Escaño, et. al. vs. Republic[8] proves the existence of the repurchase agreement. MCIAA claims that although the parties in said case were CHIONGBIAN’s co-defendants in Civil Case No. R-1881, CHIONGBIAN did not join in their appeal of the judgment of condemnation. The modified judgment in CA G.R. No. 33045-R should not therefore redound to CHIONGBIAN’s benefit who was no longer a party thereto or to the compromise agreement which Escaño et. al. entered into with the Republic of the Philippines.

Finally, assuming for the sake of argument that CHIONGBIAN has a right to repurchase Lot No. 941, MCIAA claims that the Court of Appeals erred in ruling that the right of CHIONGBIAN to purchase said lot should be under the same terms and conditions given to the other landowners and not at the prevailing market price. Such ruling is grossly unfair and would result in unjustly enriching CHIONGBIAN for the reason that she received just compensation for the property at the time of its taking by the government and that the property is now worth several hundreds of millions of pesos due to the improvements introduced by MCIAA.[9]

On the other hand, aside from praying that this Court affirm the decision of the Court of Appeals, the private respondent CHIONGBIAN prays that the petition be denied for the reason that it violates the 1997 Rules on Civil Procedure, more specifically the requirement of a certification of non-forum shopping. CHIONGBIAN claims that the Verification and Certification on Non-Forum Shopping executed by the MCIAA on September 13, 1999 was signed by a Colonel Marcelino A. Cordova whose appointment as Assistant General Manager of MCIAA was disapproved by the Civil Service Commission as early as September 2, 1999. It is CHIONGBIAN’s position that since his appointment was disapproved, the Verification attached to the petition for review on certiorari cannot be considered as having been executed by the “plaintiff” or “principal party” who under Section 5, Rule 7 of the Rules of Court can validly make the certification in the instant petition. Consequently, the petition should be considered as not being verified and as such should not be considered as having been filed at all.

After a careful consideration of the arguments presented by the parties, we resolve to grant the petition.

We first resolve the procedural issue.

We are not persuaded by CHIONGBIAN’s claim that the Verification and Certification against forum shopping accompanying MCIAA’s petition was insufficient for allegedly having been signed by one who was not qualified to do so. As pointed out by the MCIAA, Colonel Cordova signed the Verification and Certification against forum shopping as Acting General Manager of the MCIAA, pursuant to Office Order No. 5322-99 dated September 10, 1999 issued by the General Manager of MCIAA, Alfonso Allere.[10] Colonel Cordova did not sign the Verification and Certification against forum shopping pursuant to his appointment as assistant General Manager of the MCIAA, which was later disapproved by the Commission on Appointments. This fact has not been disputed by CHIONGBIAN.

We come now to the substantive aspects of the case wherein the issue to be resolved is whether the abandonment of the public use for which Lot No. 941 was expropriated entitles CHIONGBIAN to reacquire it.

In Fery vs. Municipality of Cabanatuan[11], this Court had occasion to rule on the same issue as follows:

“The answer to that question depends upon the character of the title acquired by the expropriator, whether it be the State, a province, a municipality, or a corporation which has the right to acquire property under the power of eminent domain. If, for example, 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, for example, 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. Many other similar examples might be given. 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.

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.”[12]

In the present case, evidence reveals that Lot No. 941 was appropriated by the Republic of the Philippines through expropriation proceedings in Civil Case No. R-1881. The dispositive portion of the decision in said case reads insofar as pertinent as follows:

“IN VIEW OF THE FOREGOING, judgment is hereby rendered:

1. Declaring the expropriation of Lots Nos. 75, 76, 89, 90, 91, 105, 106, 107, 108, 104, 921-A, 88, 93, 913-B, 72, 77, 916, 777-A, 918, 919, 920, 764-A, 988, 744-A, 745-A, 746, 747, 752-A, 263-A, 941, 942, 740-A, 743, 985, 956, 976-A, 984, 989-A; and 947, including in the Lahug Airport, Cebu City, justified and in lawful exercise of the right of eminent domain;

2. Declaring the fair market values of the lots thus taken and condemning the plaintiff to pay the same to the respective owners with legal interest from the dates indicated therein, as follows: Lots Nos. 75, 76, 89, 90, 91, 92, 105, 106, 107, 108-P31, 977 (minus P10,639 or P21,278 as balance in favor of Mamerto Escaño, Inc., with legal interest from November 16, 1947 until fully paid; xxx Lot No. 941- P34,415.00 in favor of Virginia Chiongbian, with legal interest from November 16, 1947 until fully paid; xxx

3. After the payment of the foregoing financial obligation to the landowners, directing the latter to deliver to the plaintiff the corresponding Transfer Certificate of Title to their representative lots; and upon the presentation of the said titles to the Register of Deeds, ordering the latter to cancel the same and to issue, in lieu thereof, new Transfer Certificates of Title in the name of the plaintiff.

NO COST.

SO ORDERED.”[13] (Emphasis supplied)

The terms of the judgment are clear and unequivocal and grant title to Lot No. 941 in fee simple to the Republic of the Philippines. There was no condition imposed to the effect that the lot would return to CHIONGBIAN or that CHIONGBIAN 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.

CHIONGBIAN cannot rely on the ruling in Mactan Cebu International Airport vs. Court of Appeals[14] wherein the presentation of parol evidence was allowed to prove the existence of a written agreement containing the right to repurchase. Said case did not involve expropriation proceedings but a contract of sale. This Court consequently allowed the presentation of parol evidence to prove the existence of an agreement allowing the right of repurchase based on the following ratiocination:

“Under the parol evidence rule, when the terms of an agreement have been reduced into writing, it is considered as containing all the terms agreed upon, and there can be, between the parties and their successors-in-interest, no evidence of such terms other than the contents of the written agreement. However, a party may present evidence to modify, explain or add to the terms of the written agreement if he puts in issue in his pleading, the failure of the written agreement to express the true intent of the parties thereto. In the case at bench, the fact which private respondents seek to establish by parol evidence consists of the agreement or representation made by the NAC that induced Inez Ouano to execute the deed of sale; that the vendors and their heirs are given the right of repurchase should the government no longer need the property. Where a parol contemporaneous agreement was the moving cause of the written contract, or where the parol agreement forms part of the consideration of the written contract, and it appears that the written contract was executed on the faith of the parol contract or representation, such evidence is admissible. It is recognized that proof is admissible of any collateral parol agreement that is not inconsistent with the terms of the written contract though it may relate to the same subject matter. The rule excluding parol evidence to vary or contradict a writing does not extend so far as to preclude the admission of existing evidence to show prior or contemporaneous collateral parol agreements between the parties, but such evidence may be received, regardless of whether or not the written agreement contains any reference to such collateral agreement, and whether the action is at law or in equity.

More importantly, no objection was made by petitioner when private respondents introduced evidence to show the right of repurchase granted by the NAC to Inez Ouano. It has been repeatedly laid down as a rule of evidence that a protest or objection against the admission of any evidence must be made at the proper time, and if not so made, it will be understood to have been waived.”[15]

This pronouncement is not applicable to the present case since the parol evidence rule which provides that “when the terms of a written agreement have been reduced to writing, it is considered as containing all the terms agreed upon, and there can be, between the parties and their successors-in-interest, no evidence of such terms other than the contents of the written agreement” applies to written agreements and has no application to a judgment of a court. 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.

And even assuming for the sake of argument that CHIONGBIAN could prove the existence of the alleged written agreement acknowledging her right to repurchase Lot No. 941 through parol evidence, the Court of Appeals erred in holding that the evidence presented by CHIONGBIAN was admissible.

Under 1403 of the Civil Code, a contract for the sale of real property shall be unenforceable unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore of the agreement cannot be received without the writing or a secondary evidence of its contents.

Contrary to the finding of the Court of Appeals, the records reveal that MCIAA objected to the purpose for which the testimonies of CHIONGBIAN[16] and Patrosinio Bercede[17] (BERCEDE) were offered, i.e. to prove the existence of the alleged written agreement evincing a right to repurchase Lot No. 941 in favor of CHIONGBIAN, for being in violation of the Statute of Frauds. MCIAA also objected to the purpose for which the testimony of Attorney Manuel Pastrana (PASTRANA) was offered, i.e. to prove the existence of the alleged written agreement and an alleged deed of sale, on the same ground.[18] Consequently, the testimonies of these witnesses are inadmissible under the Statute of Frauds to prove the existence of the alleged sale.

Aside from being inadmissible under the provisions of the Statute of Frauds, CHIONGBIAN’s and BERCEDE’s testimonies are also inadmissible for being hearsay in nature. 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.[19] CHIONGBIAN, through deposition, testified that:

“ATTY. DUBLIN (To Witness)

Q: Mrs. Chiongbian, you said a while ago that there was an assurance by the government to return this property to you in case Lahug Airport will be no longer used, is that correct?

WITNESS:

A: Yes, sir. That is true.

ATTY. DUBLIN: (To witness)

Q: Can you recall when was this verbal assurance made?

A: I cannot remember anymore.

Q: You cannot also remember the year in which the alleged assurance was made?

A: I cannot also remember because I’m very forgetful.

Q: Now, can you tell us so far as you can remember who was that person or government authority or employee that made the alleged assurance?

A: The owner of the property.

Q: Now, how many times was this assurance being made to you to return this property in case the Lahug Airport will no longer be used?

A: 2 or 3, I cannot recall.

Q: You cannot also remember in what particular place or places was this assurance being made?

A: In my previous residence in Mabolo.

DEPOSITION OFFICER:

The assurance was made in my previous residence at Mabolo.

WITNESS:

A: I entrusted that to my lawyer, Atty. Pedro Calderon.

ATTY. DUBLIN: (to witness)

Q: You mean the assurance was made personally to your lawyer at that time, Atty. Pedro Calderon?

A: Yes, sir.

Q: So you are now trying to tell us that that assurance was never made to you personally. Is that right, Mam?

A: He assured me directly that the property will be returned to me.

Q: When you said “he”, are you referring to your lawyer at that time, Atty. Pedro Calderon

A: Yes, sir.

Q: So, in effect, it was your lawyer, Atty. Pedro Calderon, who made the assurance to you that the property will be returned in case Lahug Airport will be abandoned?

A: Yes, sir.”[20]

CHIONGBIAN’s testimony shows that she had no personal knowledge of the alleged assurance made by the Republic of the Philippines that Lot No. 941 would be returned to her in the event that the Lahug Airport was closed. She stated that she only learned of the alleged assurance of the Republic of the Philippines through her lawyer, Attorney Calderon, who was not presented as a witness.

BERCEDE’s testimony regarding the alleged agreement is likewise inadmissible to prove the existence of the agreement for also being hearsay in nature. Like CHIONGBIAN, BERCEDE did not have personal knowledge of the alleged assurance made by the Republic of the Philippines to his father that their land would be returned should the Lahug Airport cease to operate for he only learned of the alleged assurance through his father.

PASTRANA’s testimony does little to help CHIONGBIAN’s cause. He claims that subsequent to the execution of the alleged written agreement but prior to the rendition of judgment in the expropriation case, the Republic and CHIONGBIAN executed a Deed of Sale over Lot No. 941 wherein CHIONGBIAN sold the aforementioned lot to the Republic of the Philippines. However, CHIONGBIAN never mentioned the existence of a deed of sale.[21] In fact, the records disclose that Lot No. 941 was transferred to the Republic of the Philippines pursuant to the judgment of expropriation in Civil Case No. R-1881 which CHIONGBIAN herself enforced by filing a motion for withdrawal of the money after the decision was rendered.[22] Moreover, since the very terms of the judgment in Civil Case No. R-1881 are silent regarding the alleged deed of sale or of the alleged written agreement acknowledging the right of CHIONGBIAN to repurchase Lot No. 941, the only logical conclusion is that no sale in fact took place and that no compromise agreement was executed prior to the rendition of the judgment. Had CHIONGBIAN and the Republic executed a contract of sale as claimed by PASTRANA, the Republic of the Philippines would not have needed to pursue the expropriation case inasmuch as it would be duplicitous and would result in the Republic of the Philippines expropriating something it had already owned. Expropriation lies only when it is made necessary by the opposition of the owner to the sale or by the lack of agreement as to the price.[23] Consequently, CHIONGBIAN cannot compel MCIAA to reconvey Lot No. 941 to her since she has no cause of action against MCIAA.

Finally, CHIONGBIAN cannot invoke the modified judgment of the Court of Appeals in the case of Republic of the Philippines vs. Escaño, et. al.[24] where her co-defendants, Mamerto Escaño, Inc., Milagros Urgello and Maria Atega Vda. De Deen entered into separate and distinct compromise agreements with the Republic of the Philippines wherein they agreed to sell their land subject of the expropriation proceedings to the latter subject to the resolutory condition that in the event the Republic of the Philippines no longer uses said property as an airport, title and ownership of said property shall revert to its respective owners upon reimbursement of the price paid therefor without interest. MCIAA correctly points out that since CHIONGBIAN did not appeal the judgment of expropriation in Civil Case No. R-1881 and was not a party to the appeal of her co-defendants, the judgment therein cannot redound to her benefit. And even assuming that CHIONGBIAN was a party to the appeal, she was not a party to the compromise agreements entered into by her co-defendants. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced.[25] Essentially, it is a contract perfected by mere consent, the latter being manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract.[26] A judicial compromise has the force of law and is conclusive between the parties[27] and it is not valid and binding on a party who did not sign the same.[28] Since CHIONGBIAN was not a party to the compromise agreements, she cannot legally invoke the same.

ACCORDINGLY, the Decision of the Court of Appeals is hereby REVERSED and SET ASIDE. The complaint of Virgina Chiongbian against the Mactan-Cebu International Airport Authority for reconveyance of Lot No. 941 is DISMISSED.

SO ORDERED.

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