On September 5, 1938, the Republic of the Philippines instituted in the Court of First Instance of Cebu expropriation proceedings involving lands in Lahug, Cebu City, for a military reservation to be used by the Philippine Army. Among those lands (there were many others) is Lot. No. 939 which along with Lot No. 932, were acquired by Eulalia Denzon and Gervasia Denzon from the Banilad Friar Land Estate for P152 and P237, respectively. Transfer Certficate Title No. 12560 in the name of Eulalia Denzon covered Lot. No 939, with an area of 13,164 square meters; Transfer Certificate of Title No. 14921 in the name of Gervasia Denzon covered Lot. No. 932, which has 25,137 square meters.
The Government took possession of the lands after depositing with the Philippine National Bank, in the name of the Provincial Treasurer, the amount of P9,500 pursuant to an order of the court dated October 19, 1938.
On May 14, 1940, the Court of First Instance of Cebu rendered its decision in the expropriation proceedings, ordering the Republic to pay Gervasia and Eulalia Denzon the sum of P4,062.10 for Lot Nos. 932 and 939. The decision of the Court of First Instance was challenged by the Denzons' before the Court of Appeals.
On October 7, 1947, Gervasia Denzon died, survived by two granddaughters, Josefina and Francisca Galeos. The granddaughters are children of Bibiana, a daughter of Gervasia, who predeceased her, and Bibiana's husband, Jose Galeos. Eulalia died even earlier, on October 25, 1931, without issued.
In 1947, the subject lands were turned over to the National Airports Corporation (later changed to Civil Aeronautics Administration) when, pursuant to a presidential proclamation, the military airport of the Philippine Army in Lahug became a national one.
On March 11, 1948, the Court of Appeals dismissed the appeal of the Denzons and on April 5, 1948, final judgment was entered. However, said judgment of expropriation was never recorded in the office of the Register of Deeds. Furthermore, the records do not show that the government paid the owners or their successors in interest the fair market value of the lots.
On November 9, 1961, Jose Galeos secured the issuance of Transfer Certificates of Title Nos. 23934 and 23935 covering Lot Nos. 932 and 939, respectively, both in the names of Franscisca Galeos-Valdehueza and Josefina Galeos-Paneria. The titles contained the following annotation: "Subject to the priority of the National Airports Corporation to acquire said parcels of land, Lot Nos. 932 and 939 upon previous payment of a reasonable market value." On the same day the registered owners filed a complaint with the Court of First Instance of Cebu, docketed as Civil Case No. 7208-R. entitled Francisca Galeos-Valdehueza, et al versus Republic of the Philippines, for the recovery of the lots and for damages by way of rentals.
On July 31, 1962, the Court of First Instance rendered judgment ordering the government to pay the Denzons as the reasonable market value of the two lots in question the sum of P16,248 with interest, at legal rate from April 5, 1948, until full payment shall have been made, plus Three Thousand Pesos as attorneys fee.
On July 29, 1969 the lots were sold by Francisca Galeos-Valdehueza to Ramon Yu and others who were assured by the Register of Deeds of Cebu City that the vendors title to the lots will be issued. Eventually, a Transfer of Certificate of Title was issued in the names of Ramon Yu and co-owners (Teofista Villama, Lourdes Yu, and Yu Se Peng). The Civil Aeronautics Administration questioned the decision of the Court of First Instance and continued to possess the lots, with Ramon Yu, the new owner to file an action for recovery of ownership and possession.
The judges who handled the case were Honorable Regino Campos Hermosisima (born on October 18, 1927 in Sibonga, Cebu, became a lawyer on April 16, 1953, eventually became an Associate Justice of the Supreme Court), Francis J. Militante (originally from Plaridel, Misamis Occidental became a lawyer on March 28, 1949, a daughter by the name who became a lawyer Anna Marie Pace Militante (admitted to the Bar on May 14, 1993) is presently a presiding judge of the Regional Trial Court in Lapu-Lapu City, Cebu) and Agapito Hontanosas (members of the Hontanosas who became lawyers, Agapito Y. Hontanosas (of Bohol, November 10, 1934), Agapito L. Hontanosas Jr. (Tagbilaran, Bohol, March 15, 1969), Albert L. Hontanosas (Tagbilaran, Bohol, June 19, 1972) and Johnson B. Hontanosas (of Tagbilaran, Bohol, May 3, 1983, presently the resident Ombudsman of the Cebu City government, appointed by Mayor Michael Lopez Rama).