G.R. No. L-47207 September 25, 1980
JOSE F. ESCANO, et al., petitioners-appellants, vs. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents-appellees.

FACTS

The petitioners are successors-in-interest to Mamerto Escano, Inc., which sold ten lots to the Republic in 1964 for use by the Civil Aeronautics Administration (CAA) as part of the Lahug Airport in Cebu City. The deed of sale contained a resolutory condition: if the CAA ceased to use the lots for airport purposes, title would revert to the seller upon reimbursement of the original purchase price of P31,977 without interest. In 1972, petitioners tendered the repurchase price, contending the condition was fulfilled as commercial airline operations had shifted to Mactan Airport by 1966. The CAA rejected the tender, asserting the Lahug Airport was still used for general aviation.
Petitioners filed an action for reconveyance. The trial court ordered the CAA to reconvey the lots upon payment of the repurchase price, finding the lots were no longer needed for airport facilities. Both parties appealed: petitioners sought compensation for the CAA’s use of the lots from the time of their tender, while the government contested the fulfillment of the resolutory condition. The Court of Appeals affirmed the reconveyance but imposed five additional conditions on the repurchase, modeled on conditions from a separate 1961 resale of nearby property to a third party.

ISSUE

Whether the Court of Appeals erred in: (1) imposing conditions on the repurchase not raised by the parties or present in the original contract; and (2) denying petitioners’ claim for compensation for the CAA’s use of the lots from the time of the tender of the repurchase price.

RULING

The Supreme Court modified the decision of the Court of Appeals. First, it held the Appellate Court erred in imposing the five conditions. The propriety of such conditions was never an issue raised in the pleadings, assigned as error, or argued by the parties in either the trial court or on appeal. The Court of Appeals thus departed from the settled rules that questions on appeal must be within the issues framed by the parties and that courts should not adjudicate matters not raised. The 1964 contract is the law between the parties, and the absence of such conditions therein means they were never contemplated. Imposing them, especially a condition allowing the CAA to continue using the property until the final transfer to Mactan Airport, would effectively nullify the resolutory condition and contradict the trial court’s factual finding that the airport was no longer operational for its intended purpose.
Second, the Court affirmed the denial of compensation for use and occupancy. While the claim had some justification from the time of the valid tender, it would be inequitable to grant it under the circumstances. The CAA derived no benefit from the unused lots, and the petitioners had the use of the redemption money during the period of delay. Any incidental damage suffered was damnum absque injuria—a loss without a legal wrong—as the government entity’s actions were presumably guided by public interest. The trial court’s judgment ordering reconveyance upon payment of P31,977 was thus reinstated without the additional conditions.