High court upholds decision on land exchange

Posted on Sep 14 2000

The Supreme Court yesterday upheld a decision by the Superior Court which ruled that the Marianas Public Land Corp. had no duty to consummate the land exchange with ailing businessman Luis Benavente.

“If there is no public purpose to be served, the government is not legally or equitably bound to complete the exchange,” the court said in a decision issued by Supreme Court Justices Pro Tem Juan T. Lizama, Timothy H. Bellas, and Marty W.K. Taylor.

The high court noted that to obtain land by exchange, the governor must certify its public purpose. Former Gov. Larry Guerrero had originally certified the land was needed for public use but then Gov. Froilan C. Tenorio reversed the certification.

The civil case stemmed from an appeal filed by Mr. Benavente on the lower court’s decision four years ago which stated that MPLC did not have a duty to complete the land exchange because it did not comply with the land exchange rules.

MPLC had proposed to give Mr. Benavente 2,508 sq. m. of public land at Ladder Beach in exchange for a certain private land situated in Papago and Tanapag. The property in Papago which Mr. Benavente had sought to exchange belonged to Mr. Babauta.

Mr. Benavente purchased the land of Mr. Babauta for the price of $50 per sq. m. or a total sum of $45,500. The deal was closed when Mr. Babauta signed a document which was a warranty deed giving Mr. Benavente title to his Papago property.

But the lower court later on held the warranty deed null and void after it found out that Mr. Babauta does not know how to read English and did not understand what he signed.

The high tribunal also affirmed the lower court’s denial of restitution from MPLC to Mr. Benavente, who claimed that he spent approximately $200,000 in improving the exchange property at Obyan with the government’s knowledge, based on repeated assurances that the proposed land exchange would be consummated.

Since Mr. Benavente’s claim to the land was not made in good faith, he was not entitled to restitution, the high court said. According to the tribunal, Mr. Benavente improved the property because it would be transferred to him. It added that the trial court’s refusal to grant restitution is proper because Mr. Benavente’s decision to improve the land is not an act of good faith since he knew the title to the land had never passed to him.

However, the high tribunal reversed the lower court’s finding that Mr. Benavente committed fraud as the allegations did not meet the elements to prove such act thus, there won’t be any award of punitive damages.

Mr. Benavente shall tender the remainder of the $45,400 purchase price owed within 30 days of the judgment. Mr. Babauta only received the total value of cash and services amounting to $34,018.05.

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