Cebu-International airport v Heirs of Sero

The facts of the case are as follows:

On July 6, 1999, respondents, through their attorney-in-fact Anecito Invento, filed a

complaint against several defendants for recovery of ownership and declaration of
nullity of several Transfer Certificates of Title (TCTs), four of which are registered in the
names of the petitioner Mactan-Cebu International Airport Authority (MCIAA) and the
Republic. They alleged that the subject properties were owned by their predecessor
Ysabel Limbaga, but the Original Certificates of Title were lost during the Second World
War. Respondents alleged that the mother of therein defendants Ricardo Inocian, Emilia
I. Bacalla, Olympia I. Esteves and Restituta I. Montana pretended to be "Isabel
Limbaga" and fraudulently succeeded in reconstituting the titles over the subject
properties to her name and in selling some of them to the other defendants. 2

It will be recalled that the subject properties were acquired by the Civil Aeronautics
Administration (CAA) through expropriation proceedings for the expansion and
improvement of the Lahug Airport,3which was granted by the Court of First Instance
(CFI) of Cebu City, Branch 3, in Civil Case No. R-1881, on December 29, 1961.
Subsequently, however, Lahug airport was ordered closed on November 29, 1989, 4 and
all its functions and operations were transferred to petitioner MCIAA5 after its creation in
1990 pursuant to Republic Act (R.A.) No. 6958, otherwise known as the Charter of the
Mactan-Cebu International Airport Authority.

In its Answer, petitioner denied the allegations in the complaint and by way of special
and affirmative defenses moved for the dismissal of the complaint. Likewise, defendants
Ricardo Inocian, Haide Sun and spouses Victor Arcinas and Marilyn Dueñas filed their
separate motions to dismiss.

On June 14, 2001, the RTC dismissed the complaint on the grounds that the
respondents had no cause of action, and that the action was barred by prescription and
laches.6 Respondents filed a motion for reconsideration which was denied; hence, they
filed an appeal with the Court of Appeals which reversed the Orders of the RTC. The
appellate court held that the complaint alleged "ultimate facts" constituting respondents'
cause of action; that the respondents cannot be faulted for not including therein
"evidentiary facts," thus causing confusion or doubt as to the existence of a cause of
action; and assuming the complaint lacked some definitive statements, the proper
remedy for the petitioner and other defendants should have been a motion for bill of
particulars, not a motion to dismiss. Further, the determination of whether respondents
have a right to recover the ownership of the subject properties, or whether their action is
barred by prescription or laches requires evidentiary proof which can be threshed out,
not in a motion to dismiss, but in a full-blown trial.7 The dispositive portion of the
Decision reads:

WHEREFORE, the assailed orders dated 14 June 2001 and 10 August 2001, both
issued by the Regional Trial Court of Cebu City, Branch 8 in Civil Case No. CEB-24012,
are hereby REVERSED and SET ASIDE. Accordingly, we REMAND the case to the
court a quo for further proceedings. We are also directing the RTC of Cebu City, Branch
8 to REINSTATE the case, and to conduct a TRIAL ON THE MERITS and thereafter
render a decision.

SO ORDERED.8

Petitioner moved for reconsideration, however, it was denied in a Resolution dated

September 12, 2006.9 Hence, this Petition for Review based on the following grounds:

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT RESPONDENTS

HAVE A CAUSE OF ACTION AGAINST PETITIONER IN CIVIL CASE NO. CEB-24012.

THE COURT OF APPEALS GRAVELY ERRED IN NOT AFFIRMING THE LOWER

COURT'S FINDING THAT RESPONDENTS ARE GUILTY OF LACHES AND THAT
THEIR CAUSE OF ACTION, IF ANY, HAS PRESCRIBED.10

Respondents argue that the properties which were expropriated in connection with the
operation of the Lahug Airport should be reconveyed to the real owners considering that
the purpose for which the properties were expropriated is no longer relevant in view of
the closure of the Lahug Airport.11

A cause of action is an act or omission of one party in violation of the legal right of the
other. Its elements are the following: (1) the legal right of plaintiff; (2) the correlative
obligation of the defendant, and (3) the act or omission of the defendant in violation of
said legal right.12 The existence of a cause of action is determined by the allegations in
the complaint.13 Thus, in the resolution of a motion to dismiss based on failure to state a
cause of action, only the facts alleged in the complaint must be considered. The test in
cases like these is whether a court can render a valid judgment on the complaint based
upon the facts alleged and pursuant to the prayer therein. Hence, it has been held that a
motion to dismiss generally partakes of the nature of a demurrer which hypothetically
admits the truth of the factual allegations made in a complaint.14

However, while a trial court focuses on the factual allegations in a complaint, it cannot
disregard statutes and decisions material and relevant to the proper appreciation of the
questions before it. In resolving a motion to dismiss, every court must take judicial
notice of decisions this Court has rendered as provided by Section 1 of Rule 129 of the
Rules of Court,15 to wit:

SECTION 1. Judicial notice, when mandatory. - A court shall take judicial notice, without
the introduction of evidence, of the existence and territorial extent of states, their
political history, forms of government and symbols of nationality, the law of nations, the
admiralty and maritime courts of the world and their seals, the political constitution and
history of the Philippines, the official acts of the legislative, executive and judicial
departments of the Philippines, laws of nature, the measure of time, and the
geographical divisions.
In reversing the Orders of the RTC, the Court of Appeals failed to consider the decision
of this Court in Mactan-Cebu International Airport v. Court of Appeals,16 rendered on
November 27, 2000, which settled the issue of whether the properties expropriated
under Civil Case No. R-1881 will be reconveyed to the original owners if the purpose for
which it was expropriated is ended or abandoned or if the property was to be used other
than the expansion or improvement of the Lahug airport.

In said case, the Court held that the terms of the judgment in Civil Case No. R-1881
were clear and unequivocal. It granted title over the expropriated land to the Republic of
the Philippines in fee simple without any condition that it would be returned to the
owners or that the owners 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.17 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.18

Had the appellate court considered the import of the ruling in Mactan-Cebu International
Airport v. Court of Appeals, it would have found that respondents can invoke no right
against the petitioner since the subject lands were acquired by the State in fee simple.
Thus, the first element of a cause of action, i.e., plaintiff's legal right, is not present in
the instant case.

We are not unaware of the ruling in Heirs of Timoteo Moreno v. Mactan-Cebu

International Airport Authority,19 concerning still another set of owners of lands which
were declared expropriated in the judgment in Civil Case No. R-1881, but were ordered
by the Court to be reconveyed to their previous owners because there was
preponderant proof of the existence of the right of repurchase. However, we qualified
our Decision in that case, thus:

We adhere to the principles enunciated in Fery and in Mactan-Cebu International

Airport Authority, and do not overrule them. Nonetheless the weight of their import,
particularly our ruling as regards the properties of respondent Chiongbian in Mactan-
Cebu International Airport Authority, must be commensurate to the facts that were
established therein as distinguished from those extant in the case at bar. Chiongbian
put forth inadmissible and inconclusive evidence, while in the instant case we have
preponderant proof as found by the trial court of the existence of the right of repurchase
in favor of petitioners.20 (Emphasis provided)

Thus, the determination of the rights and obligations of landowners whose properties
were expropriated but the public purpose for which eminent domain was exercised no
longer subsist, must rest on the character by which the titles thereof were acquired by
the government. If the land is expropriated for a particular purpose with the condition
that it will be returned to its former owner once that purpose is ended or abandoned,
then the property shall be reconveyed to its former owner when the purpose is
terminated or abandoned. If, on the contrary, the decree of expropriation gives to the
entity a fee simple title, as in this case, then the land becomes the absolute property of
the expropriator. Non-use of the property for the purpose by which it was acquired does
not have the effect of defeating the title acquired in the expropriation proceedings.21

Even assuming that respondents have a right to the subject properties being the heirs of
the alleged real owner Ysabel Limbaga, they still do not have a cause of action against
the petitioner because such right has been foreclosed by prescription, if not by laches.
Respondents failed to take the necessary steps within a reasonable period to recover
the properties from the parties who caused the alleged fraudulent reconstitution of titles.

Respondents' action in the court below is one for reconveyance based on fraud
committed by Isabel Limbaga in reconstituting the titles to her name. It was filed on July
6, 1999, or 38 years after the trial court in Civil Case No. R-1881 granted the
expropriation, or even longer if we reckon from the time of the fraudulent reconstitution
of titles, which date is not stated in the complaint but presumably before the complaint
for expropriation was filed by CAA on April 16, 1952.22

An action for reconveyance is a legal remedy granted to a landowner whose property

has been wrongfully or erroneously registered in another's name.23 However, such
action must be filed within 10 years from the issuance of the title since the issuance
operates as a constructive notice.24 Thus, the cause of action which respondents may
have against the petitioner is definitely barred by prescription.

Rule 9, Section 1 of the Rules of Court provides that when it appears from the pleadings
or the evidence on record that the action is already barred by statute of limitations, the
court shall dismiss the claim. Further, contrary to respondents' claim that a complaint
may not be dismissed based on prescription without trial, an allegation of prescription
can effectively be used in a motion to dismiss when the complaint on its face shows that
indeed the action has prescribed25 at the time it was filed.

Thus, in Gicano v. Gegato:26

We have ruled that trial courts have authority and discretion to dismiss an action on the
ground of prescription when the parties' pleadings or other facts on record show it to be
indeed time-barred; and it may do so on the basis of a motion to dismiss, or an answer
which sets up such ground as an affirmative defense; or even if the ground is alleged
after judgment on the merits, as in a motion for reconsideration; or even if the defense
has not been asserted at all, as where no statement thereof is found in the pleadings, or
where a defendant has been declared in default. What is essential only, to repeat, is
that the facts demonstrating the lapse of the prescriptive period, be otherwise
sufficiently and satisfactorily apparent on the record: either in the averments of the
plaintiffs complaint, or otherwise established by the evidence. 27 (Citations
omitted) chanroblesvirtuallawlibrary
In the instant case, although the complaint did not state the date when the alleged fraud
in the reconstitution of titles was perpetuated, it is however clear from the allegations in
the complaint that the properties sought to be recovered were acquired by the petitioner
in Civil Case No. R-1881 which was granted by the trial court on December 29, 1961.
Clearly, the filing of the action in 1999 is way beyond the ten 10 year prescriptive period.

Further, while it is by express provision of law that no title to registered land in

derogation of that of the registered owner shall be acquired by prescription or adverse
possession, it is likewise an enshrined rule that even a registered owner may be barred
from recovering possession of property by virtue of laches.28 The negligence or
omission to assert a right within a reasonable time warrants a presumption that the
party entitled to assert it had either abandoned it or declined to assert it also casts doubt
on the validity of the claim of ownership. Such neglect to assert a right taken in
conjunction with the lapse of time, more or less great, and other circumstances causing
prejudice to the adverse party, operates as a bar in a court of equity. 29

Respondents' inaction for a period of 38 years to vindicate their alleged rights had
converted their claim into a stale demand. The allegation that petitioner employed threat
or intimidation is an afterthought belatedly raised only in the Court of Appeals. As such it
deserves scant attention.

WHEREFORE, in view of the foregoing, the Petition for Review is GRANTED. The May
12, 2006 Decision and September 12, 2006 Resolution of the Court of Appeals in CA-
G.R. CV No. 73159 are REVERSED and SET ASIDE. The Orders of the Regional Trial
Court of Cebu City, Branch 8 dated June 14, 2001 and August 10, 2001 in Civil Case
No. CEB-24012, dismissing respondent's complaint for reconveyance on grounds of
lack of cause of action, prescription and laches and denying the motion for
reconsideration, respectively, are REINSTATED and AFFIRMED.