Friday, December 16, 2011

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY & AIR TRANSPORTATION OFFICE vs. BERNARDO L. LOZADA, SR., et al. G.R. No. 176625, February 25, 2010

HAD8J5EKCNKC
NACHURA, J.:

FACTS
: Subject of this case is a lot (Lot No. 88) located in Lahug, Cebu City. Its original owner was Anastacio Deiparine when the same was subject to expropriation proceedings, initiated by Republic, represented by the then Civil Aeronautics Administration (CAA), for the expansion and improvement of the Lahug Airport. During the pendency of the expropriation proceedings, respondent Bernardo L. Lozada, Sr. acquired Lot No. 88 from Deiparine. The trial court ruled for the Republic and ordered the latter to pay Lozada the fair market value of the lot. However, the projected improvement and expansion plan of the old Lahug Airport, however, was not pursued. The plaintiff-respondents initiated a complaint for the recovery of possession and reconveyance of ownership the subject lot. On the other hand, the 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. The lower court ruled for herein plaintiff-respondents, which decision was affirmed by the Court of Appeals. In this petition, the petitioners argued that the judgment in Civil Case No. R-1881 was absolute and unconditional, giving title in fee simple to the Republic.

ISSUE: Whether or not a constructive trust was constituted in this case, and as such, the respondents herein are entitled to the restitution of the expropriated property which was not used for a public purpose.

HELD: YES. Art. 1454 of the Civil Code provides: “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.”

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 trustee’s 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.


Digg Google Bookmarks reddit Mixx StumbleUpon Technorati Yahoo! Buzz DesignFloat Delicious BlinkList Furl

0 comments: on "MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY & AIR TRANSPORTATION OFFICE vs. BERNARDO L. LOZADA, SR., et al. G.R. No. 176625, February 25, 2010"

Post a Comment