SECOND DIVISION

[G.R. No. 107916. February 20, 1997]

PERCIVAL MODAY, ZOTICO MODAY (deceased) and LEONORA

MODAY, petitioners, vs. COURT OF APPEALS, JUDGE
EVANGELINE S. YUIPCO OF BRANCH 6, REGIONAL TRIAL
COURT, AGUSAN DEL SUR AND MUNICIPALITY OF
BUNAWAN, respondents.
DECISION
ROMERO, J.:

The main issue presented in this case is whether a municipality may expropriate
private property by virtue of a municipal resolution which was disapproved by the
Sangguniang Panlalawigan. Petitioner seeks the reversal of the Court of Appeals
decision and resolution, promulgated on July 15, 1992 and October 22, 1992
respectively , and a declaration that Municipal Resolution No. 43-89 of the Bunawan
Sangguniang Bayan is null and void.
[1]

On July 23, 1989, the Sangguniang Bayan of the Municipality of Bunawan in

Agusan del Sur passed Resolution No. 43-89, "Authorizing the Municipal Mayor to
Initiate the Petition for Expropriation of a One (1) Hectare Portion of Lot No. 6138-Pls-4
along the National Highway Owned by Percival Moday for the Site of Bunawan Farmers
Center and Other Government Sports Facilities."
[2]

In due time, Resolution No. 43-89 was approved by then Municipal Mayor Anuncio
C. Bustillo and transmitted to the Sangguniang Panlalawigan for its approval. On
September 11, 1989, the Sangguniang Panlalawigan disapproved said Resolution and
returned it with the comment that "expropriation is unnecessary considering that there
are still available lots in Bunawan for the establishment of the government center."
[3]

The Municipality of Bunawan, herein public respondent, subsequently filed a

Petition for Eminent Domain against petitioner Percival Moday before the Regional Trial
Court at Prosperidad, Agusan del Sur. The complaint was later amended to include the
registered owners, Percival Moday's parents, Zotico and Leonora Moday, as party
defendants.
[4]

On March 6, 1991, public respondent municipality filed a Motion to Take or Enter

Upon the Possession of Subject Matter of This Case stating that it had already
deposited with the municipal treasurer the necessary amount in accordance with
Section 2, Rule 67 of the Revised Rules of Court and that it would be in the

government's best interest for public respondent to be allowed to take possession of the
property.
Despite petitioners' opposition and after a hearing on the merits, the Regional Trial
Court granted respondent municipality's motion to take possession of the land. The
lower court held that the Sangguniang Panlalawigan's failure to declare the resolution
invalid leaves it effective. It added that the duty of the Sangguniang Panlalawigan is
merely to review the ordinances and resolutions passed by the Sangguniang Bayan
under Section 208 (l) of B.P. Blg. 337, old Local Government Code and that the exercise
of eminent domain is not one of the two acts enumerated in Section 19 thereof requiring
the approval of the Sangguniang Panlalawigan. The dispositive portion of the lower
court's Order dated July 2, 1991 reads:
[5]

"WHEREFORE, it appearing that the amount of P632.39 had been deposited as per
Official Receipt No. 5379647 on December 12, 1989 which this Court now
determines as the provisional value of the land, the Motion to Take or Enter Upon the
Possession of the Property filed by petitioner through counsel is hereby GRANTED.
The Sheriff of this Court is ordered to forthwith place the plaintiff in possession of the
property involved.
Let the hearing be set on August 9, 1991 at 8:30 o'clock in the morning for the
purpose of ascertaining the just compensation or fair market value of the property
sought to be taken, with notice to all the parties concerned.
SO ORDERED."

[6]

Petitioners' motion for reconsideration was denied by the trial court on October 31,
1991.
Petitioners elevated the case in a petition for certiorari alleging grave abuse of
discretion on the part of the trial court, but the same was dismissed by respondent
appellate court on July 15, 1992. The Court of Appeals held that the public purpose for
the expropriation is clear from Resolution No. 43-89 and that since the Sangguniang
Panlalawigan of Agusan del Sur did not declare Resolution No. 43-89 invalid,
expropriation of petitioners' property could proceed.
[7]

Respondent appellate court also denied petitioners' motion for reconsideration on

October 22, 1992.
[8]

Meanwhile, the Municipality of Bunawan had erected three buildings on the subject
property: the Association of Barangay Councils (ABC) Hall, the Municipal Motorpool,
both wooden structures, and the Bunawan Municipal Gymnasium, which is made of
concrete.
In the instant petition for review filed on November 23, 1992, petitioner seeks the
reversal of the decision and resolution of the Court of Appeals and a declaration that
Resolution No. 43-89 of the Municipality of Bunawan is null and void.

On December 8, 1993, the Court issued a temporary restraining order enjoining and
restraining public respondent Judge Evangeline Yuipco from enforcing her July 2, 1991
Order and respondent municipality from using and occupying all the buildings
constructed and from further constructing any building on the land subject of this
petition.
[9]

Acting on petitioners' Omnibus Motion for Enforcement of Restraining Order and for
Contempt, the Court issued a Resolution on March 15, 1995, citing incumbent municipal
mayor Anuncio C. Bustillo for contempt, ordering him to pay the fine and to demolish the
"blocktiendas" which were built in violation of the restraining order.
[10]

Former Mayor Anuncio C. Bustillo paid the fine and manifested that he lost in the
May 8, 1995 election. The incumbent Mayor Leonardo Barrios, filed a Manifestation,
Motion to Resolve "Urgent Motion for Immediate Dissolution of the Temporary
Restraining Order" and Memorandum on June 11, 1996 for the Municipality of
Bunawan.
[11]

[12]

Petitioners contend that the Court of Appeals erred in upholding the legality of the
condemnation proceedings initiated by the municipality. According to petitioners, the
expropriation was politically motivated and Resolution No. 43-89 was correctly
disapproved by the Sangguniang Panlalawigan, there being other municipal properties
available for the purpose. Petitioners also pray that the former Mayor Anuncio C.
Bustillo be ordered to pay damages for insisting on the enforcement of a void municipal
resolution.
The Court of Appeals declared that the Sangguniang Panlalawigan's reason for
disapproving the resolution "could be baseless, because it failed to point out which and
where are 'those available lots.' Respondent court also concluded that since the
Sangguniang Panlalawigan did not declare the municipal board's resolution as invalid,
expropriation of petitioners' property could proceed.
[13]

The Court finds no merit in the petition and affirms the decision of the Court of
Appeals.
Eminent domain, the power which the Municipality of Bunawan exercised in the
instant case, is a fundamental State power that is inseparable from sovereignty. It is
government's right to appropriate, in the nature of a compulsory sale to the State,
private property for public use or purpose. Inherently possessed by the national
legislature, the power of eminent domain may be validly delegated to local
governments, other public entities and public utilities. For the taking of private property
by the government to be valid, the taking must be for public use and there must be just
compensation.
[14]

[15]

[16]

[17]

The Municipality of Bunawan's power to exercise the right of eminent domain is not
disputed as it is expressly provided for in Batas Pambansa Blg. 337, the Local
Government Code in force at the time expropriation proceedings were initiated.
Section 9 of said law states:
[18]

"Section 9. Eminent Domain. A local government unit may, through its head and
acting pursuant to a resolution of its sanggunian, exercise the right of eminent domain
and institute condemnation proceedings for public use or purpose."
What petitioners question is the lack of authority of the municipality to exercise this
right since the Sangguniang Panlalawigan disapproved Resolution No. 43-89.
Section 153 of B.P. Blg. 337 provides:

"Sec. 153. Sangguniang Panlalawigan Review. (1) Within thirty days after
receiving copies of approved ordinances, resolutions and executive orders
promulgated by the municipal mayor, the sangguniang panlalawigan shall examine the
documents or transmit them to the provincial attorney, or if there be none, to the
provincial fiscal, who shall examine them promptly and inform the sangguniang
panlalawigan in writing of any defect or impropriety which he may discover therein
and make such comments or recommendations as shall appear to him proper.
(2)
If the sangguniang panlalawigan shall find that any municipal ordinance,
resolution or executive order is beyond the power conferred upon the sangguniang
bayan or the mayor, it shall declare such ordinance, resolution or executive order
invalid in whole or in part, entering its actions upon the minutes and advising the
proper municipal authorities thereof. The effect of such an action shall be to annul the
ordinance, resolution or executive order in question in whole or in part. The action of
the sangguniang panlalawigan shall be final.
xxx

xxx

xxx." (Emphasis supplied.)

The Sangguniang Panlalawigan's disapproval of Municipal Resolution No. 43-89 is

an infirm action which does not render said resolution null and void. The law, as
expressed in Section 153 of B.P. Blg. 337, grants the Sangguniang Panlalawigan the
power to declare a municipal resolution invalid on the sole ground that it is beyond the
power of the Sangguniang Bayan or the Mayor to issue. Although pertaining to a similar
provision of law but different factual milieu then obtaining, the Court's pronouncements
in Velazco v. Blas, where we cited significant early jurisprudence, are applicable to the
case at bar.
[19]

"The only ground upon which a provincial board may declare any municipal
resolution, ordinance, or order invalid is when such resolution, ordinance, or order is
'beyond the powers conferred upon the council or president making the same.'
Absolutely no other ground is recognized by the law. A strictly legal question is before
the provincial board in its consideration of a municipal resolution, ordinance, or order.
The provincial (board's) disapproval of any resolution, ordinance, or order must be
premised specifically upon the fact that such resolution, ordinance, or order is outside
the scope of the legal powers conferred by law. If a provincial board passes these

limits, it usurps the legislative functions of the municipal council or president. Such
has been the consistent course of executive authority."
[20]

Thus, the Sangguniang Panlalawigan was without the authority to disapprove

Municipal Resolution No. 43-89 for the Municipality of Bunawan clearly has the power to
exercise the right of eminent domain and its Sangguniang Bayan the capacity to
promulgate said resolution, pursuant to the earlier-quoted Section 9 of B.P. Blg. 337.
Perforce, it follows that Resolution No. 43-89 is valid and binding and could be used as
lawful authority to petition for the condemnation of petitioners' property.
As regards the accusation of political oppression, it is alleged that Percival Moday
incurred the ire of then Mayor Anuncio C. Bustillo when he refused to support the latter's
candidacy for mayor in previous elections. Petitioners claim that then incumbent Mayor
C. Bustillo used the expropriation to retaliate by expropriating their land even if there
were other properties belonging to the municipality and available for the purpose.
Specifically, they allege that the municipality owns a vacant seven-hectare property
adjacent to petitioners' land, evidenced by a sketch plan.
[21]

The limitations on the power of eminent domain are that the use must be public,
compensation must be made and due process of law must be observed. The Supreme
Court, taking cognizance of such issues as the adequacy of compensation, necessity of
the taking and the public use character or the purpose of the taking , has ruled that the
necessity of exercising eminent domain must be genuine and of a public character.
Government may not capriciously choose what private property should be taken.
[22]

[23]

[24]

After a careful study of the records of the case, however, we find no evidentiary
support for petitioners' allegations. The uncertified photocopy of the sketch plan does
not conclusively prove that the municipality does own vacant land adjacent to
petitioners' property suited to the purpose of the expropriation. In the questioned
decision, respondent appellate court similarly held that the pleadings and documents on
record have not pointed out any of respondent municipality's "other available properties
available for the same purpose. " The accusations of political reprisal are likewise
unsupported by competent evidence. Consequently, the Court holds that petitioners'
demand that the former municipal mayor be personally liable for damages is without
basis.
[25]

WHEREFORE, the instant petition is hereby DENIED. The questioned Decision and
Resolution of the Court of Appeals in the case of "Percival Moday, et al. v. Municipality
of Bunawan, et al." (CA G.R. SP No. 26712) are AFFIRMED. The Temporary
Restraining Order issued by the Court on December 8, 1993 is LIFTED.
SO ORDERED.
Regalado, (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur.

[1]

"Percival Moday v. Municipality of Bunawan, et. al." CA G.R. SP No. 26712, penned by Justice Artemon
D. Luna, with Justices Jose A.R. Melo (now a member of this Court) and Segundino G. Chua,
concurring. Rollo, p. 21, 36.

[2]

The lot is part of 5.6610 hectares covered by Transfer Certificate of Title No. T-3132 in the name of
Zotico Moday, married to Leonora Moday. The assessed value of the entire lot in 1989 was
P3,580.00 while the assessed value of one hectare is about P632.39.

[3]

Excerpts From the Minutes of the Regular Session of the Sangguniang Panlalawigan of Agusan del Sur
Held at the Session Hall, Training Center, Prosperidad, on September 11, 1989. Rollo, p. 85.

[4]

"Municipality of Bunawan, Agusan del Sur v. Percival Moday, et al.," Special Civil Case No. 719, Judge
Evangeline S. Yuipco, presiding.

"Sec. 19. Certain Acts of the Sangguniang Bayan Requiring Approval of the Sangguniang Panlalawigan.
The following acts of the sangguniang bayan shall be subject to the approval of the sangguniang
panlalawigan:
[5]

(1) Permanent closure of a public road, street, alley, park or square; and
(2) Donation of municipal funds or property."
[6]

Rollo, p. 75.

[7]

"Percival Moday, et al. v. Municipality of Bunawan, et al.," CA G.R. SP No. 26712, Rollo, pp. 21-25.

[8]

Rollo, p. 36.

[9]

Rollo, p. 104.

[10]

Rollo, pp. 242-245.

[11]

Rollo, pp. 248-249.

[12]

Rollo, p. 286.

[13]

Rollo, p. 24.

[14]

V. SINCO, PHILIPPINE POLITICAL LAW: PRINCIPLES AND CONCEPTS 592 (10th ed., 1954) citing
Kohl v. US, 91 U.S. 371. A. PIMENTEL, THE LOCAL GOVERNMENT CODE OF 1991: THE KEY
TO NATIONAL DEVELOPMENT 106 (1993). Visayan Refining Co. v. Camus, 40 Phil. 550.

[15]

BLACK'S LAW DICTIONARY 616 (4th ed.) cited in I. CRUZ, CONSTITUTIONAL LAW 59 (1991 ed.); J.
BERNAS, THE 1987 PHILIPPINE CONSTITUTION, A REVIEWER-PRIMER 92 (2nd ed., 1992)
citing Charles River Bridge v. Warren Bridge, 11 Pet. 420, 641 (US 1837).

[16]

BERNAS, op. cit. at 93; CRUZ, op. cit. at 59-60; Province of Camarines Sur v. CA, G.R. No. 103125,
May 11, 1993, 222 SCRA 173.

[17]

Article III, Section 9 of the 1987 Constitution states that "(p)rivate property shall not be taken for public
use without just compensation."

[18]

Approved on February 10, 1983, the Code was published in 79 O.G. No. 7. The Local Government
Code of 1991 (Republic Act No. 7160) took effect on January 1, 1992. Evardone v. Comelec,
G.R. No. 94010, December 2, 1991, 204 SCRA 464.

[19]

G.R. No. L-30456, July 30, 1982, 115 SCRA 540, 544-545. The law then in force, Section 2233 of the
Revised Administrative Code, also provided that "(i)f the board should in any case find that any
resolution, ordinance, or order, as aforesaid, is beyond the powers conferred upon the council or
mayor making the same, it shall declare such resolution, ordinance, or order invalid, entering its
action upon the minutes and advising the proper municipal authorities thereof. The effect of such
action shall be to annul the resolution, ordinance, or order in question, subject to action by the
Secretary of the Interior as hereinafter provided."

[20]

At pages 544-545, citing Gabriel v. Provincial Board of Pampanga, 50 Phil. 686, 692-693; Cario v.
Jamoralne, 56 Phil. 188, Manantan v. Municipality of Luna, 82 Phil. 844, which cite the Opinions
Attorney-General Wilfley (1905), II Op. Atty.-Gen., 557, 642, Opinion Attorney-General Villareal,
November 22, 1922; Opinion Attorney-General Jaranilla, August 9, 1926; Provincial Circular
Executive Bureau, September 16, 1918.

[21]

Rollo, p. 88.

[22]

V. SINCO, op. cit. citing Visayan Refining Company v. Camus, supra. and In re Fowler, 53 N.Y. 60.

[23]

Municipality of Meycauayan v. IAC, G.R. No. L-72126, January 29, 1988, 157 SCRA 640; J.M.
Tuason v. Land Tenure Administration, 31 SCRA 413; National Power Corporation v. Jocson, 206
SCRA 520; Republic v. IAC, 185 SCRA 572.

[24]

City of Manila v. Chinese Community of Manila, 40 Phil. 349 citing Morrison v. Indianapolis, 166 Ind.
511; Stearns v. Barre, 73 Vt. 281; Wheeling v. Toledo, 72 Ohio St. 368.

[25]

Rollo, p. 23.

SECOND DIVISION

[G.R. No. 152230. August 9, 2005]

JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC., petitioner,

vs.
MUNICIPALITY
(now
CITY)
OF
PASIG,
METRO
MANILA, respondent.
DECISION
CALLEJO, SR., J.:

Before us is a petition for review of the Decision of the Court of Appeals (CA) in
CA-G.R. CV No. 59050, and its Resolution dated February 18, 2002, denying the
motion for reconsideration thereof. The assailed decision affirmed the order of the
Regional Trial Court (RTC) of Pasig, Branch 160, declaring the respondent Municipality
(now City) of Pasig as having the right to expropriate and take possession of the subject
property.
[1]

The Antecedents
The Municipality of Pasig needed an access road from E. R. Santos Street, a
municipal road near the Pasig Public Market, to Barangay Sto. Tomas Bukid, Pasig,
where 60 to 70 houses, mostly made of light materials, were located. The road had to
be at least three meters in width, as required by the Fire Code, so that fire trucks could
pass through in case of conflagration. Likewise, the residents in the area needed the
road for water and electrical outlets. The municipality then decided to acquire 51
square meters out of the 1,791-square meter property of Lorenzo Ching Cuanco, Victor
Ching Cuanco and Ernesto Ching Cuanco Kho covered by Transfer Certificate of Title
(TCT) No. PT-66585, which is abutting E. R. Santos Street.
[2]

[3]

[4]

On April 19, 1993, the Sangguniang Bayan of Pasig approved an

Ordinance authorizing the municipal mayor to initiate expropriation proceedings to
acquire the said property and appropriate the fund therefor. The ordinance stated that
the property owners were notified of the municipalitys intent to purchase the property
for public use as an access road but they rejected the offer.
[5]

On July 21, 1993, the municipality filed a complaint, amended on August 6, 1993,
against the Ching Cuancos for the expropriation of the property under Section 19 of
Republic Act (R.A.) No. 7160, otherwise known as the Local Government Code. The
plaintiff alleged therein that it notified the defendants, by letter, of its intention to
construct an access road on a portion of the property but they refused to sell the same

portion. The plaintiff appended to the complaint a photocopy of the letter addressed to
defendant Lorenzo Ching Cuanco.
[6]

The plaintiff deposited with the RTC 15% of the market value of the property based
on the latest tax declaration covering the property. On plaintiffs motion, the RTC issued
a writ of possession over the property sought to be expropriated. On November 26,
1993, the plaintiff caused the annotation of a notice of lis pendens at the dorsal portion
of TCT No. PT-92579 under the name of the Jesus Is Lord Christian School Foundation,
Incorporated (JILCSFI) which had purchased the property. Thereafter, the plaintiff
constructed therein a cemented road with a width of three meters; the road was called
Damayan Street.
[7]

In their answer, the defendants claimed that, as early as February 1993, they had
sold the said property to JILCSFI as evidenced by a deed of sale bearing the signature
of defendant Ernesto Ching Cuanco Kho and his wife.
[8]

[9]

When apprised about the complaint, JILCSFI filed a motion for leave to intervene as
defendant-in-intervention, which motion the RTC granted on August 26, 1994.
[10]

In its answer-in-intervention, JILCSFI averred, by way of special and affirmative

defenses, that the plaintiffs exercise of eminent domain was only for a particular class
and not for the benefit of the poor and the landless. It alleged that the property sought
to be expropriated is not the best portion for the road and the least burdensome to it.
The intervenor filed a crossclaim against its co-defendants for reimbursement in case
the subject property is expropriated. In its amended answer, JILCSFI also averred that
it has been denied the use and enjoyment of its property because the road was
constructed in the middle portion and that the plaintiff was not the real party-in-interest.
The intervenor, likewise, interposed counterclaims against the plaintiff for moral
damages and attorneys fees.
[11]

[12]

During trial, Rolando Togonon, the plaintiffs messenger, testified on direct

examination that on February 23, 1993, he served a letter of Engr. Jose Reyes, the
Technical Assistant to the Mayor on Infrastructure, to Lorenzo Ching Cuanco at his store
at No. 18 Alkalde Jose Street, Kapasigan, Pasig. A lady received the same and brought
it inside the store. When she returned the letter to him, it already bore the signature of
Luz Bernarte. He identified a photocopy of the letter as similar to the one he served at
the store. On cross-examination, he admitted that he never met Luz Bernarte.
[13]

Edgardo del Rosario, a resident of Sto. Tomas Bukid since 1982 declared that he
would pass through a wooden bridge to go to E. R. Santos Street. At times, the bridge
would be slippery and many had met accidents while walking along the bridge.
Because of this, they requested Mayor Vicente Eusebio to construct a road therein. He
attested that after the construction of the cemented access road, the residents had
water and electricity.
[14]

Augusto Paz of the City Engineers Office testified that, sometime in 1992, the
plaintiff constructed a road perpendicular from E. R. Santos Street to Sto. Tomas Bukid;
he was the Project Engineer for the said undertaking. Before the construction of the
road, the lot was raw and they had to put filling materials so that vehicles could use it.
According to him, the length of the road which they constructed was 70 meters long and

3 meters wide so that a fire truck could pass through. He averred that there is no other
road through which a fire truck could pass to go to Sto. Tomas Bukid.
[15]

Manuel Tembrevilla, the Fire Marshall, averred that he had seen the new road, that
is, Damayan Street, and found that a fire truck could pass through it. He estimated the
houses in the area to be around 300 to 400. Tembrevilla also stated that Damayan
Street is the only road in the area.
[16]

Finally, Bonifacio Maceda, Jr., Tax Mapper IV, testified that, according to their
records, JILCSFI became the owner of the property only on January 13, 1994.
[17]

The plaintiff offered in evidence a photocopy of the letter of Engr. Jose Reyes
addressed to Lorenzo Ching Cuanco to prove that the plaintiff made a definite and valid
offer to acquire the property to the co-owners. However, the RTC rejected the same
letter for being a mere photocopy.
[18]

For the defendant-intervenor, Normita del Rosario, owner of the property located
across the subject property, testified that there are other roads leading to E. R. Santos
Street. She asserted that only about ten houses of the urban poor are using the new
road because the other residents are using an alternative right-of-way. She averred that
she did not actually occupy her property; but there were times that she visited it.
[19]

Danilo Caballero averred that he had been a resident of Sto. Tomas Bukid for seven
years. From his house, he could use three streets to go to E. R. Santos Street, namely,
Catalina Street, Damayan Street and Bagong Taon Street. On cross-examination, he
admitted that no vehicle could enter Sto. Tomas Bukid except through the newly
constructed Damayan Street.
[20]

Eduardo Villanueva, Chairman of the Board of Trustees and President of JILCSFI,

testified that the parcel of land was purchased for purposes of constructing a school
building and a church as worship center. He averred that the realization of these
projects was delayed due to the passing of the ordinance for expropriation.
[21]

The intervenor adduced documentary evidence that on February 27, 1993, Lorenzo
Ching Cuanco and the co-owners agreed to sell their property covered by TCT No. PT66585 forP1,719,000.00. It paid a down payment of P1,000,000.00 for the property.
After payment of the total purchase price, the Ching Cuancos executed a Deed of
Absolute Sale over the property on December 13, 1993. On December 21, 1993, TCT
No. PT-92579 was issued in the name of JILCSFI. It declared the property for taxation
purposes under its name.
[22]

[23]

[24]

[25]

On September 3, 1997, the RTC issued an Order in favor of the plaintiff, the
dispositive portion of which reads:

WHEREFORE, in view of the foregoing and in accordance with Section 4, Rule 67 of

the Revised Rules of Court, the Court Resolves to DECLARE the plaintiff as having a
lawful right to take the property in question for purposes for which the same is
expropriated.

The plaintiff and intervenor are hereby directed to submit at least two (2) names of
their recommended commissioners for the determination of just compensation within
ten (10) days from receipt hereof.
SO ORDERED.

[26]

The RTC held that, as gleaned from the declaration in Ordinance No. 21, there was
substantial compliance with the definite and valid offer requirement of Section 19 of R.A.
No. 7160, and that the expropriated portion is the most convenient access to the interior
of Sto. Tomas Bukid.
Dissatisfied, JILCSFI elevated the case to the CA on the following assignment of
errors:

First Assignment of Error

THE LOWER COURT SERIOUS[LY] ERRED WHEN IT RULED THAT
PLAINTIFF-APPELLEE SUBSTANTIALLY COMPLIED WITH THE LAW WHEN
IT EXPROPRIATED JILS PROPERTY TO BE USED AS A RIGHT OF WAY.
Second Assignment of Error
THE LOWER COURT ERRED IN DISREGARDING JILS EVIDENCE PROVING
THAT THERE WAS NO PUBLIC NECESSITY TO WARRANT THE
EXPROPRIATION OF THE SUBJECT PROPERTY.
[27]

The Court of Appeals Decision

In a Decision dated March 13, 2001, the CA affirmed the order of the RTC. The CA
agreed with the trial court that the plaintiff substantially complied with Section 19 of R.A.
No. 7160, particularly the requirement that a valid and definite offer must be made to the
owner. The CA declared that the letter of Engr. Reyes, inviting Lorenzo Ching Cuanco
to a conference to discuss with him the road project and the price of the lot, was a
substantial compliance with the valid and definite offer requirement under said Section
19. In addition, the CA noted that there was also constructive notice to the defendants
of the expropriation proceedings since a notice of lis pendens was annotated at the
dorsal portion of TCT No. PT-92579 on November 26, 1993.
[28]

[29]

Finally, the CA upheld the public necessity for the subject property based on the
findings of the trial court that the portion of the property sought to be expropriated
appears to be, not only the most convenient access to the interior of Sto. Tomas Bukid,
but also an easy path for vehicles entering the area, particularly fire trucks. Moreover,
the CA took into consideration the provision of Article 33 of the Rules and Regulations

Implementing the Local Government Code, which regards the construction or extension
of roads, streets, sidewalks as public use, purpose or welfare.
[30]

On April 6, 2001, JILCSFI filed a motion for reconsideration of the said decision
alleging that the CA erred in relying on the photocopy of Engr. Reyes letter to Lorenzo
Ching Cuanco because the same was not admitted in evidence by the trial court for
being a mere photocopy. It also contended that the CA erred in concluding that
constructive notice of the expropriation proceeding, in the form of annotation of the
notice of lis pendens, could be considered as a substantial compliance with the
requirement under Section 19 of the Local Government Code for a valid and definite
offer. JILCSFI also averred that no inspection was ever ordered by the trial court to be
conducted on the property, and, if there was one, it had the right to be present thereat
since an inspection is considered to be part of the trial of the case.
[31]

The CA denied the motion for reconsideration for lack of merit. It held that it was
not precluded from considering the photocopy of the letter, notwithstanding that the
same was excluded by the trial court, since the fact of its existence was duly
established by corroborative evidence. This corroborative evidence consisted of the
testimony of the plaintiffs messenger that he personally served the letter to Lorenzo
Ching Cuanco, and Municipal Ordinance No. 21 which expressly stated that the
property owners were already notified of the expropriation proceeding. The CA noted
that JILCSFI failed to adduce controverting evidence, thus the presumption of regularity
was not overcome.
[32]

[33]

The Present Petition

In this petition, petitioner JILCSFI raises the following issues: (1) whether the
respondent complied with the requirement, under Section 19 of the Local Government
Code, of a valid and definite offer to acquire the property prior to the filing of the
complaint; (2) whether its property which is already intended to be used for public
purposes may still be expropriated by the respondent; and (3) whether the requisites for
an easement for right-of-way under Articles 649 to 657 of the New Civil Code may be
dispensed with.
The petitioner stresses that the law explicitly requires that a valid and definite offer
be made to the owner of the property and that such offer was not accepted. It argues
that, in this case, there was no evidence to show that such offer has been made either
to the previous owner or the petitioner, the present owner. The petitioner contends that
the photocopy of the letter of Engr. Reyes, notifying Lorenzo Ching Cuanco of the
respondents intention to construct a road on its property, cannot be considered
because the trial court did not admit it in evidence. And assuming that such letter is
admissible in evidence, it would not prove that the offer has been made to the previous
owner because mere notice of intent to purchase is not equivalent to an offer to
purchase. The petitioner further argues that the offer should be made to the proper
party, that is, to the owner of the property. It noted that the records in this case show
that as of February 1993, it was already the owner of the property. Assuming, therefore,

that there was an offer to purchase the property, the same should have been addressed
to the petitioner, as present owner.
[34]

The petitioner maintains that the power of eminent domain must be strictly
construed since its exercise is necessarily in derogation of the right to property
ownership. All the requirements of the enabling law must, therefore, be strictly complied
with. Compliance with such requirements cannot be presumed but must be proved by
the local government exercising the power. The petitioner adds that the local
government should, likewise, comply with the requirements for an easement of right-ofway; hence, the road must be established at a point least prejudicial to the owner of the
property. Finally, the petitioner argues that, if the property is already devoted to or
intended to be devoted to another public use, its expropriation should not be allowed.
[35]

For its part, the respondent avers that the CA already squarely resolved the issues
raised in this petition, and the petitioner failed to show valid and compelling reason to
reverse the CAs findings. Moreover, it is not the function of the Supreme Court to
weigh the evidence on factual issues all over again. The respondent contends that the
Ching Cuancos were deemed to have admitted that an offer to purchase has been
made and that they refused to accept such offer considering their failure to specifically
deny such allegation in the complaint. In light of such admission, the exclusion of the
photocopy of the letter of Engr. Reyes, therefore, is no longer significant.
[36]

[37]

The Ruling of the Court

The petition is meritorious.
At the outset, it must be stressed that only questions of law may be raised by the
parties and passed upon by the Supreme Court in petitions for review on certiorari.
Findings of fact of the CA, affirming those of the trial court, are final and conclusive
and may not be reviewed on appeal.
[38]

[39]

Nonetheless, where it is shown that the conclusion is a finding grounded on

speculations, surmises or conjectures or where the judgment is based on
misapprehension of facts, the Supreme Court may reexamine the evidence on record.
[40]

Eminent Domain: Nature and Scope

The right of eminent domain is usually understood to be an ultimate right of the
sovereign power to appropriate any property within its territorial sovereignty for a public
purpose. The nature and scope of such power has been comprehensively described as
follows:

It is an indispensable attribute of sovereignty; a power grounded in the primary

duty of government to serve the common need and advance the general welfare.
Thus, the right of eminent domain appertains to every independent government

without the necessity for constitutional recognition. The provisions found in modern
constitutions of civilized countries relating to the taking of property for the public use
do not by implication grant the power to the government, but limit the power which
would, otherwise, be without limit. Thus, our own Constitution provides that
[p]rivate property shall not be taken for public use without just compensation.
Furthermore, the due process and equal protection clauses act as additional safeguards
against the arbitrary exercise of this governmental power.
[41]

Strict Construction and Burden of Proof

The exercise of the right of eminent domain, whether directly by the State or by its
authorized agents, is necessarily in derogation of private rights. It is one of the
harshest proceedings known to the law. Consequently, when the sovereign delegates
the power to a political unit or agency, a strict construction will be given against the
agency asserting the power. The authority to condemn is to be strictly construed in
favor of the owner and against the condemnor. When the power is granted, the extent
to which it may be exercised is limited to the express terms or clear implication of the
statute in which the grant is contained.
[42]

[43]

[44]

[45]

Corollarily, the respondent, which is the condemnor, has the burden of proving all
the essentials necessary to show the right of condemnation. It has the burden of proof
to establish that it has complied with all the requirements provided by law for the valid
exercise of the power of eminent domain.
[46]

The grant of the power of eminent domain to local government units is grounded on
Section 19 of R.A. No. 7160 which reads:

SEC. 19. Eminent Domain. A local government unit may, through its chief
executive and acting pursuant to an ordinance, exercise the power of eminent domain
for public use, or purpose, or welfare for the benefit of the poor and the landless, upon
payment of just compensation, pursuant to the provisions of the Constitution and
pertinent laws; Provided, however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously made to the owner, and
such offer was not accepted: Provided, further, That the local government unit may
immediately take possession of the property upon the filing of the expropriation
proceedings and upon making a deposit with the proper court of at least fifteen
percent (15%) of the fair market value of the property based on the current tax
declaration of the property to be expropriated: Provided, finally, That the amount to be
paid for the expropriated property shall be determined by the proper court based on
the fair market value at the time of the taking of the property.
The Court declared that the following requisites for the valid exercise of the power
of eminent domain by a local government unit must be complied with:

1. An ordinance is enacted by the local legislative council authorizing the local

chief executive, in behalf of the local government unit, to exercise the power
of eminent domain or pursue expropriation proceedings over a particular
private property.
2. The power of eminent domain is exercised for public use, purpose or welfare,
or for the benefit of the poor and the landless.
3. There is payment of just compensation, as required under Section 9, Article
III of the Constitution, and other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the
property sought to be expropriated, but said offer was not accepted.
[47]

Valid and Definite Offer

Article 35 of the Rules and Regulations Implementing the Local Government Code
provides:

ARTICLE 35. Offer to Buy and Contract of Sale. (a) The offer to buy private
property for public use or purpose shall be in writing. It shall specify the property
sought to be acquired, the reasons for its acquisition, and the price offered.
(b) If the owner or owners accept the offer in its entirety, a contract of sale shall be
executed and payment forthwith made.
(c) If the owner or owners are willing to sell their property but at a price higher than
that offered to them, the local chief executive shall call them to a conference for the
purpose of reaching an agreement on the selling price. The chairman of the
appropriation or finance committee of the sanggunian, or in his absence, any member
of the sanggunian duly chosen as its representative, shall participate in the
conference. When an agreement is reached by the parties, a contract of sale shall be
drawn and executed.
(d)

The contract of sale shall be supported by the following documents:

(1)
Resolution of the sanggunian authorizing the local chief executive to enter
into a contract of sale. The resolution shall specify the terms and conditions to be
embodied in the contract;
(2)

Ordinance appropriating the amount specified in the contract; and

(3)
Certification of the local treasurer as to availability of funds together with a
statement that such fund shall not be disbursed or spent for any purpose other than to
pay for the purchase of the property involved.
The respondent was burdened to prove the mandatory requirement of a valid and
definite offer to the owner of the property before filing its complaint and the rejection
thereof by the latter. It is incumbent upon the condemnor to exhaust all reasonable
efforts to obtain the land it desires by agreement. Failure to prove compliance with the
mandatory requirement will result in the dismissal of the complaint.
[48]

[49]

[50]

An offer is a unilateral proposition which one party makes to the other for the
celebration of a contract. It creates a power of acceptance permitting the offeree, by
accepting the offer, to transform the offerors promise into a contractual obligation.
Corollarily, the offer must be complete, indicating with sufficient clearness the kind of
contract intended and definitely stating the essential conditions of the proposed
contract. An offer would require, among other things, a clear certainty on both the
object and the cause or consideration of the envisioned contract.
[51]

[52]

[53]

[54]

The purpose of the requirement of a valid and definite offer to be first made to the
owner is to encourage settlements and voluntary acquisition of property needed for
public purposes in order to avoid the expense and delay of a court action. The law is
designed to give to the owner the opportunity to sell his land without the expense and
inconvenience of a protracted and expensive litigation. This is a substantial right which
should be protected in every instance. It encourages acquisition without litigation and
spares not only the landowner but also the condemnor, the expenses and delays of
litigation. It permits the landowner to receive full compensation, and the entity acquiring
the property, immediate use and enjoyment of the property. A reasonable offer in good
faith, not merely perfunctory or pro forma offer, to acquire the property for a reasonable
price must be made to the owner or his privy. A single bona fide offer that is rejected
by the owner will suffice.
[55]

[56]

[57]

The expropriating authority is burdened to make known its definite and valid offer to
all the owners of the property. However, it has a right to rely on what appears in the
certificate of title covering the land to be expropriated. Hence, it is required to make its
offer only to the registered owners of the property. After all, it is well-settled that
persons dealing with property covered by a Torrens certificate of title are not required to
go beyond what appears on its face.
[58]

In the present case, the respondent failed to prove that before it filed its complaint, it
made a written definite and valid offer to acquire the property for public use as an
access road. The only evidence adduced by the respondent to prove its compliance
with Section 19 of the Local Government Code is the photocopy of the letter purportedly
bearing the signature of Engr. Jose Reyes, to only one of the co-owners, Lorenzo Ching
Cuanco. The letter reads:

MR. LORENZO CHING CUANCO

18 Alcalde Jose Street
Capasigan, Pasig

Metro Manila
Dear Mr. Cuanco:
This refers to your parcel of land located along E. Santos Street, Barangay Palatiw,
Pasig, Metro Manila embraced in and covered by TCT No. 66585, a portion of which
with an area of fifty-one (51) square meters is needed by the Municipal Government
of Pasig for conversion into a road-right of way for the benefit of several residents
living in the vicinity of your property. Attached herewith is the sketch plan for your
information.
In this connection, may we respectfully request your presence in our office to discuss
this project and the price that may be mutually agreed upon by you and the
Municipality of Pasig.
Thank you.
Very truly yours,
(Sgd.)
ENGR. JOSE L. REYES
Technical Asst. to the Mayor
on Infrastructure
[59]

It bears stressing, however, that the respondent offered the letter only to prove its
desire or intent to acquire the property for a right-of-way. The document was not
offered to prove that the respondent made a definite and valid offer to acquire the
property. Moreover, the RTC rejected the document because the respondent failed to
adduce in evidence the original copy thereof. The respondent, likewise, failed to
adduce evidence that copies of the letter were sent to and received by all the co-owners
of the property, namely, Lorenzo Ching Cuanco, Victor Ching Cuanco and Ernesto Kho.
[60]

[61]

The respondent sought to prove, through the testimony of its messenger, Rolando
Togonon, that Lorenzo Ching Cuanco received the original of the said letter. But
Togonon testified that he merely gave the letter to a lady, whom he failed to identify. He
stated that the lady went inside the store of Lorenzo Ching Cuanco, and later gave the
letter back to him bearing the signature purportedly of one Luz Bernarte. However,
Togonon admitted, on cross-examination, that he did not see Bernarte affixing her
signature on the letter. Togonon also declared that he did not know and had never met
Lorenzo Ching Cuanco and Bernarte:
Q

And after you received this letter from that lady, what did you do afterwards?

I brought it with me, that letter, and then I went to Caruncho.

So, [M]r. Witness, you are telling this Honorable Court that this letter intended to
Mr. Lorenzo was served at Pasig Trading which was situated at No. 18 Alkalde
Jose Street on February 23, 1993?

Yes, Maam.

ATTY. TAN:
That is all for the witness, Your Honor.
COURT:
Do you have any cross-examination?
ATTY. JOLO:
Just a few cross, Your Honor, please. With the kind permission of the Honorable
Court.
COURT:
Proceed.
CROSS-EXAMINATION
BY ATTY. JOLO:
Q

Mr. Witness, do you know Mr. Lorenzo Ching [Cuanco]

I do not know him.

As a matter of fact, you have not seen him even once, isnt not (sic)?

Yes, Sir.

This Luz Bernarte, do you know her?

I do not know her.

As a matter of fact, you did not see Mrs. Bernarte even once?

That is correct.

And as a matter of fact, [M]r. Witness, you did not see Mrs. Luz Bernarte affixing
her signature on the bottom portion of this demand letter, marked as Exh. C-2?

Yes, Sir.[62]

Even if the letter was, indeed, received by the co-owners, the letter is not a valid
and definite offer to purchase a specific portion of the property for a price certain. It is
merely an invitation for only one of the co-owners, Lorenzo Ching Cuanco, to a
conference to discuss the project and the price that may be mutually acceptable to both
parties.
There is no legal and factual basis to the CAs ruling that the annotation of a notice
of lis pendens at the dorsal portion of petitioners TCT No. PT-92579 is a substantial
compliance with the requisite offer. A notice of lis pendens is a notice to the whole world
of the pendency of an action involving the title to or possession of real property and a
warning that those who acquire an interest in the property do so at their own risk and
that they gamble on the result of the litigation over it. Moreover, the lis pendens was
[63]

annotated at the dorsal portion of the title only on November 26, 1993, long after the
complaint had been filed in the RTC against the Ching Cuancos.
Neither is the declaration in one of the whereas clauses of the ordinance that the
property owners were already notified by the municipality of the intent to purchase the
same for public use as a municipal road, a substantial compliance with the requirement
of a valid and definite offer under Section 19 of R.A. No. 7160. Presumably,
the Sangguniang Bayan relied on the erroneous premise that the letter of Engr. Reyes
reached the co-owners of the property. In the absence of competent evidence that,
indeed, the respondent made a definite and valid offer to all the co-owners of the
property, aside from the letter of Engr. Reyes, the declaration in the ordinance is not a
compliance with Section 19 of R.A. No. 7160.
The respondent contends, however, that the Ching Cuancos, impliedly admitted the
allegation in its complaint that an offer to purchase the property was made to them and
that they refused to accept the offer by their failure to specifically deny such allegation in
their answer. This contention is wrong. As gleaned from their answer to the complaint,
the Ching Cuancos specifically denied such allegation for want of sufficient knowledge
to form a belief as to its correctness. Under Section 10, Rule 8 of the Rules of Court,
such form of denial, although not specific, is sufficient.
[64]

Public Necessity
We reject the contention of the petitioner that its property can no longer be
expropriated by the respondent because it is intended for the construction of a place for
religious worship and a school for its members. As aptly explained by this Court
in Manosca v. Court of Appeals, thus:
[65]

It has been explained as early as Sea v. Manila Railroad Co., that:

A historical research discloses the meaning of the term public use to be one of
constant growth. As society advances, its demands upon the individual increases and
each demand is a new use to which the resources of the individual may be devoted.
for whatever is beneficially employed for the community is a public use.
Chief Justice Enrique M. Fernando states:
The taking to be valid must be for public use. There was a time when it was felt that a
literal meaning should be attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of streets or parks.
Otherwise, expropriation is not allowable. It is not so any more. As long as the
purpose of the taking is public, then the power of eminent domain comes into play.
As just noted, the constitution in at least two cases, to remove any doubt, determines
what is public use. One is the expropriation of lands to be subdivided into small lots

for resale at cost to individuals. The other is the transfer, through the exercise of this
power, of utilities and other private enterprise to the government. It is accurate to
state then that at present whatever may be beneficially employed for the general
welfare satisfies the requirements of public use.
Chief Justice Fernando, writing the ponencia in J.M. Tuason & Co. vs. Land Tenure
Administration, has viewed the Constitution a dynamic instrument and one that is
not to be construed narrowly or pedantically so as to enable it to meet adequately
whatever problems the future has in store. Fr. Joaquin Bernas, a noted
constitutionalist himself, has aptly observed that what, in fact, has ultimately emerged
is a concept of public use which is just as broad as public welfare.
Petitioners ask: But (w)hat is the so-called unusual interest that the expropriation of
(Felix Manalos) birthplace become so vital as to be a public use appropriate for the
exercise of the power of eminent domain when only members of the Iglesia ni
Cristo would benefit? This attempt to give some religious perspective to the case
deserves little consideration, for what should be significant is the principal objective
of, not the casual consequences that might follow from, the exercise of the power.
The purpose in setting up the marker is essentially to recognize the distinctive
contribution of the late Felix Manalo to the culture of the Philippines, rather than to
commemorate his founding and leadership of the Iglesia ni Cristo. The practical
reality that greater benefit may be derived by members of the Iglesia ni Cristo than by
most others could well be true but such a peculiar advantage still remains to be merely
incidental and secondary in nature. Indeed, that only a few would actually benefit
from the expropriation of property, does not necessarily diminish the essence and
character of public use.
The petitioner asserts that the respondent must comply with the requirements for
the establishment of an easement of right-of-way, more specifically, the road must be
constructed at the point least prejudicial to the servient state, and that there must be no
adequate outlet to a public highway. The petitioner asserts that the portion of the lot
sought to be expropriated is located at the middle portion of the petitioners entire parcel
of land, thereby splitting the lot into two halves, and making it impossible for the
petitioner to put up its school building and worship center.
The subject property is expropriated for the purpose of constructing a road. The
respondent is not mandated to comply with the essential requisites for an easement of
right-of-way under the New Civil Code. Case law has it that in the absence of legislative
restriction, the grantee of the power of eminent domain may determine the location and
route of the land to be taken unless such determination is capricious and wantonly
injurious. Expropriation is justified so long as it is for the public good and there is
genuine necessity of public character. Government may not capriciously choose what
private property should be taken.
[66]

[67]

[68]

[69]

The respondent has demonstrated the necessity for constructing a road from E. R.
Santos Street to Sto. Tomas Bukid. The witnesses, who were residents of Sto. Tomas
Bukid, testified that although there were other ways through which one can enter the
vicinity, no vehicle, however, especially fire trucks, could enter the area except through
the newly constructed Damayan Street. This is more than sufficient to establish that
there is a genuine necessity for the construction of a road in the area. After all, absolute
necessity is not required, only reasonable and practical necessity will suffice.
[70]

Nonetheless, the respondent failed to show the necessity for constructing the road
particularly in the petitioners property and not elsewhere. We note that the whereas
clause of the ordinance states that the 51-square meter lot is the shortest and most
suitable access road to connect Sto. Tomas Bukid to E. R. Santos Street. The
respondents complaint also alleged that the said portion of the petitioners lot has been
surveyed as the best possible ingress and egress. However, the respondent failed to
adduce a preponderance of evidence to prove its claims.
[71]

On this point, the trial court made the following findings:

The contention of the defendants that there is an existing alley that can serve the
purpose of the expropriator is not accurate. An inspection of the vicinity reveals that
the alley being referred to by the defendants actually passes thru Bagong Taon St. but
only about one-half (1/2) of its entire length is passable by vehicle and the other half
is merely a foot-path. It would be more inconvenient to widen the alley considering
that its sides are occupied by permanent structures and its length from the municipal
road to the area sought to be served by the expropriation is considerably longer than
the proposed access road. The area to be served by the access road is composed of
compact wooden houses and literally a slum area. As a result of the expropriation of
the 51-square meter portion of the property of the intervenor, a 3-meter wide road
open to the public is created. This portion of the property of the intervenor is the most
convenient access to the interior of Sto. Tomas Bukid since it is not only a short cut to
the interior of the Sto. Tomas Bukid but also an easy path for vehicles entering the
area, not to mention the 3-meter wide road requirement of the Fire Code.
[72]

However, as correctly pointed out by the petitioner, there is no showing in the record
that an ocular inspection was conducted during the trial. If, at all, the trial court
conducted an ocular inspection of the subject property during the trial, the petitioner was
not notified thereof. The petitioner was, therefore, deprived of its right to due process.
It bears stressing that an ocular inspection is part of the trial as evidence is thereby
received and the parties are entitled to be present at any stage of the trial.
Consequently, where, as in this case, the petitioner was not notified of any ocular
inspection of the property, any factual finding of the court based on the said inspection
has no probative weight. The findings of the trial court based on the conduct of the
ocular inspection must, therefore, be rejected.
[73]

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision and
Resolution of the Court of Appeals are REVERSED AND SET ASIDE. The RTC is

ordered to dismiss the complaint of the respondent without prejudice to the refiling
thereof.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

[1]

Penned by Associate Justice Portia Alio-Hormachuelos, with Associate Justices Fermin A. Martin, Jr.
and Mercedes Gozo-Dadole, concurring; Rollo, pp. 6-14.

[2]

TSN, 9 January 1996, pp. 4-9.

[3]

TSN, 1 August 1994, p. 17.

[4]

Records, p. 17.

[5]

Exhibit C, Id. at 59-60.

[6]

Records, pp. 19-20.

[7]

Id. at 56.

[8]

Id. at 21.

[9]

Exhibits 2 and 3.

[10]

Id. at 24.

[11]

Records, p. 26.

[12]

Id. at 31-32.

[13]

TSN, 1 August 1994, pp. 3-8.

[14]

TSN, 1 August 1994, pp. 15-18.

[15]

TSN, 9 January 1996, pp. 5-10.

[16]

TSN, 30 January 1996, pp. 9-10.

[17]

TSN, 13 March 1996, p. 5.

[18]

Records, p. 41.

[19]

TSN, 15 July 1996, pp. 17-19.

[20]

TSN, 19 August 1996, pp. 8-13.

[21]

TSN, 25 September 1996, pp. 7-9.

[22]

Exhibit 3.

[23]

Exhibit 5.

[24]

Exhibit 1.

[25]

Exhibit 2.

[26]

Rollo, pp. 58-59.

[27]

CA Rollo, p. 46.

[28]

Rollo, p. 13.

[29]

Id. at 10-11.

[30]

Rollo, pp. 12-13.

[31]

CA Rollo, pp. 143-148.

[32]

Exhibit H.

[33]

Rollo, p. 18.

[34]

Rollo, pp. 159-162.

[35]

Rollo, pp. 168-175.

[36]

Id. at 196.

[37]

Id. at 97-98.

[38]

Vicente v. Planters Development Bank, G.R. No. 136112, 28 January 2003, 396 SCRA 282.

[39]

Larena v. Mapili, G.R. No. 146341, 7 August 2003, 408 SCRA 484.

[40]

Chan v. Maceda, Jr., G.R. No. 142591, 30 April 2003, 402 SCRA 352.

[41]

Heirs of Alberto Suguitan v. City of Mandaluyong, G.R. No. 135087, 14 March 2000, 328 SCRA 137.

[42]

City of Manila v. Chinese Community of Manila, 40 Phil. 349 (1919).

[43]

District Board of Trustees of the Daytona Beach Community College v. Allen, 428 So.2d 704 (1983).

[44]

Pequonnock Yacht Club, Inc. v. City of Bridgeport, 259 Conn. 592, 790 A.2d 1178 (2002).

[45]

City of Birmingham v. Brown, 241 Ala. 203, 2 So.2d 305 (1941).

[46]

Gordon v. Conroe Independent School District, 789 S.W.2d 395 (1990).

[47]

Heirs of Alberto Suguitan v. City of Mandaluyong, supra.

[48]

Wampler v. Trustees of Indiana University, 241 Ind. 449, 172 N.E.2d 67 (1961).

[49]

Pequonnock Yacht Club, Inc. v. City of Bridgeport, supra.

[50]

Casino Reinvestment Development Authority v. Katz, 334 N.J.Super 473, 759 A.2d 1247 (2000).

[51]

Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of the Philippines, Volume IV,
1991 Edition, p. 448.

[52]

Blacks Law Dictionary, 5th Edition, p. 976.

[53]

Tolentino, supra, p. 449.

[54]

Swedish Match, AB v. Court of Appeals, G.R. No. 128120, 20 October 2004, 441 SCRA 1.

[55]

City of Atlantic v. Cynwyd Investments, 148 N.J. 55, 689 A.2d 712 (1997).

[56]

In Re University of Avenue in City of Rochester, 82 Misc. 598, 144 N.Y.S. 1086 (1913).

[57]

Chambers v. Public Service Company of Indiana, Inc., 265 Ind. 336, 355 N.E.2d 781 (1976).

[58]

Orquiola v. Court of Appeals, G.R. No. 141463, 6 August 2002, 386 SCRA 301.

[59]

Records, p. 57.

[60]

Id. at 38.

[61]

Records, p. 41.

[62]

TSN, 1 August 1994, pp. 6-8.

[63]

Los Baos Rural Bank, Inc. v. Africa, G.R. No. 143994, 11 July 2002, 384 SCRA 535.

[64]

Section 10, Rule 8 of the Rules of Court provides:

Section 10. Specific denial. A defendant must specify each material allegation of fact
the truth of which he does not admit and whenever practicable, shall set forth the substance of
the matters upon which he relies to support his denial. Where a defendant desires to deny only a
part of an averment, he shall specify so much of it as is true and material and shall deny only the
remainder. Where a defendant is without knowledge or information sufficient to form a belief as
to the truth of a material averment made in the complaint, he shall so state, and this shall have
the effect of a denial. (Emphasis supplied)

[65]

G.R. No. 106440, 29 January 1996, 252 SCRA 412.

[66]

Alabama Elec. Co-op., Inc. v. Watson, 419 So. 2d 1351 (1982).

[67]

Alabama Power Co. v. Tauton, 465 So. 2d 1105 (1984).

[68]

Municipality of Meycauayan, Bulacan v. Intermediate Appellate Court, G.R. No. L-72126, 29 January
1988, 157 SCRA 640.

[69]

Moday v. Court of Appeals, G.R. No. 107916, 20 February 1997, 268 SCRA 586.

[70]

Manotok v. National Housing Authority, G.R. No. L-55166, 21 May 1987, 150 SCRA 89.

[71]

See City of Manila v. Chinese Community of Manila, supra, where the Court noted that the record
contains no proof of the necessity of opening the same through the cemetery; Manotok v.
National Housing Authority, supra, where the Court observed that there is no showing as to why
the properties involved were singled out for expropriation or what necessity impelled the particular
choices or selection.

[72]

Rollo, pp. 57-58.

[73]

Ricardo J. Francisco, Evidence, 3rd ed., 1996, p. 52, citing Benton v. State, 30 Ark. 329; Denver
Omnibus & Cab Co. v. War Auction Co., 47 Colo. 446, 1076 Pac. 1073.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-18841

January 27, 1969

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,

vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, defendant-appellant.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A. Torres and
Solicitor Camilo D. Quiason for plaintiff-appellant.
Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant-appellant.
REYES, J.B.L., J.:
Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant from the
dismissal, after hearing, by the Court of First Instance of Manila, in its Civil Case No. 35805, of their
respective complaint and counterclaims, but making permanent a preliminary mandatory injunction
theretofore issued against the defendant on the interconnection of telephone facilities owned and
operated by said parties.
The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers
through its branches and instrumentalities, one of which is the Bureau of Telecommunications. That
office was created on 1 July 1947, under Executive Order No. 94, with the following powers and
duties, in addition to certain powers and duties formerly vested in the Director of Posts:
1awphil.t

SEC. 79. The Bureau of Telecommunications shall exercise the following powers and duties:
(a) To operate and maintain existing wire-telegraph and radio-telegraph offices, stations, and
facilities, and those to be established to restore the pre-war telecommunication service under
the Bureau of Posts, as well as such additional offices or stations as may hereafter be
established to provide telecommunication service in places requiring such service;
(b) To investigate, consolidate, negotiate for, operate and maintain wire-telephone or radio
telephone communication service throughout the Philippines by utilizing such existing
facilities in cities, towns, and provinces as may be found feasible and under such terms and
conditions or arrangements with the present owners or operators thereof as may be agreed
upon to the satisfaction of all concerned;
(c) To prescribe, subject to approval by the Department Head, equitable rates of charges for
messages handled by the system and/or for time calls and other services that may be
rendered by said system;
(d) To establish and maintain coastal stations to serve ships at sea or aircrafts and, when
public interest so requires, to engage in the international telecommunication service in
agreement with other countries desiring to establish such service with the Republic of the
Philippines; and

(e) To abide by all existing rules and regulations prescribed by the International
Telecommunication Convention relative to the accounting, disposition and exchange of
messages handled in the international service, and those that may hereafter be promulgated
by said convention and adhered to by the Government of the Republic of the Philippines. 1
The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a public service
corporation holding a legislative franchise, Act 3426, as amended by Commonwealth Act 407, to
install, operate and maintain a telephone system throughout the Philippines and to carry on the
business of electrical transmission of messages within the Philippines and between the Philippines
and the telephone systems of other countries. 2 The RCA Communications, Inc., (which is not a party
to the present case but has contractual relations with the parties) is an American corporation
authorized to transact business in the Philippines and is the grantee, by assignment, of a legislative
franchise to operate a domestic station for the reception and transmission of long distance wireless
messages (Act 2178) and to operate broadcasting and radio-telephone and radio-telegraphic
communications services (Act 3180). 3
Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered into an
agreement whereby telephone messages, coming from the United States and received by RCA's
domestic station, could automatically be transferred to the lines of PLDT; and vice-versa, for calls
collected by the PLDT for transmission from the Philippines to the United States. The contracting
parties agreed to divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was
amended in 1941 to 30% for PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis.
The arrangement was later extended to radio-telephone messages to and from European and
Asiatic countries. Their contract contained a stipulation that either party could terminate it on a 24month notice to the other. 4 On 2 February 1956, PLDT gave notice to RCA to terminate their contract
on 2 February 1958. 5
Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government
Telephone System by utilizing its own appropriation and equipment and by renting trunk lines of the
PLDT to enable government offices to call private parties. 6 Its application for the use of these trunk
lines was in the usual form of applications for telephone service, containing a statement, above the
signature of the applicant, that the latter will abide by the rules and regulations of the PLDT which
are on file with the Public Service Commission. 7 One of the many rules prohibits the public use of the
service furnished the telephone subscriber for his private use. 8 The Bureau has extended its services
to the general public since 1948, 9 using the same trunk lines owned by, and rented from, the PLDT,
and prescribing its (the Bureau's) own schedule of rates. 10 Through these trunk lines, a Government
Telephone System (GTS) subscriber could make a call to a PLDT subscriber in the same way that
the latter could make a call to the former.
On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered into an
agreement with RCA Communications, Inc., for a joint overseas telephone service whereby the
Bureau would convey radio-telephone overseas calls received by RCA's station to and from local
residents. 11 Actually, they inaugurated this joint operation on 2 February 1958, under a "provisional"
agreement. 12
On 7 April 1958, the defendant Philippine Long Distance Telephone Company, complained to the
Bureau of Telecommunications that said bureau was violating the conditions under which their
Private Branch Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the rented
trunk lines, for the Bureau had used the trunk lines not only for the use of government offices but
even to serve private persons or the general public, in competition with the business of the PLDT;
and gave notice that if said violations were not stopped by midnight of 12 April 1958, the PLDT
would sever the telephone connections. 13 When the PLDT received no reply, it disconnected the

trunk lines being rented by the Bureau at midnight on 12 April 1958. 14 The result was the isolation of
the Philippines, on telephone services, from the rest of the world, except the United States. 15
At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for
telephone connection. 16 The PLDT was also maintaining 60,000 telephones and had also 20,000
pending applications. 17Through the years, neither of them has been able to fill up the demand for
telephone service.
The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958 that both enter
into an interconnecting agreement, with the government paying (on a call basis) for all calls passing
through the interconnecting facilities from the Government Telephone System to the PLDT. 18 The
PLDT replied that it was willing to enter into an agreement on overseas telephone service to Europe
and Asian countries provided that the Bureau would submit to the jurisdiction and regulations of the
Public Service Commission and in consideration of 37 1/2% of the gross revenues. 19 In its
memorandum in lieu of oral argument in this Court dated 9 February 1964, on page 8, the defendant
reduced its offer to 33 1/3 % (1/3) as its share in the overseas telephone service. The proposals
were not accepted by either party.
On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine Long
Distance Telephone Company, in the Court of First Instance of Manila (Civil Case No. 35805),
praying in its complaint for judgment commanding the PLDT to execute a contract with plaintiff,
through the Bureau, for the use of the facilities of defendant's telephone system throughout the
Philippines under such terms and conditions as the court might consider reasonable, and for a writ of
preliminary injunction against the defendant company to restrain the severance of the existing
telephone connections and/or restore those severed.
Acting on the application of the plaintiff, and on the ground that the severance of telephone
connections by the defendant company would isolate the Philippines from other countries, the court
a quo, on 14 April 1958, issued an order for the defendant:
(1) to forthwith reconnect and restore the seventy-eight (78) trunk lines that it has
disconnected between the facilities of the Government Telephone System, including its
overseas telephone services, and the facilities of defendant; (2) to refrain from carrying into
effect its threat to sever the existing telephone communication between the Bureau of
Telecommunications and defendant, and not to make connection over its telephone system
of telephone calls coming to the Philippines from foreign countries through the said Bureau's
telephone facilities and the radio facilities of RCA Communications, Inc.; and (3) to accept
and connect through its telephone system all such telephone calls coming to the Philippines
from foreign countries until further order of this Court.
On 28 April 1958, the defendant company filed its answer, with counterclaims.
It denied any obligation on its part to execute a contrary of services with the Bureau of
Telecommunications; contested the jurisdiction of the Court of First Instance to compel it to enter into
interconnecting agreements, and averred that it was justified to disconnect the trunk lines heretofore
leased to the Bureau of Telecommunications under the existing agreement because its facilities were
being used in fraud of its rights. PLDT further claimed that the Bureau was engaging in commercial
telephone operations in excess of authority, in competition with, and to the prejudice of, the PLDT,
using defendants own telephone poles, without proper accounting of revenues.
After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an
agreement with the Bureau because the parties were not in agreement; that under Executive Order

94, establishing the Bureau of Telecommunications, said Bureau was not limited to servicing
government offices alone, nor was there any in the contract of lease of the trunk lines, since the
PLDT knew, or ought to have known, at the time that their use by the Bureau was to be public
throughout the Islands, hence the Bureau was neither guilty of fraud, abuse, or misuse of the poles
of the PLDT; and, in view of serious public prejudice that would result from the disconnection of the
trunk lines, declared the preliminary injunction permanent, although it dismissed both the complaint
and the counterclaims.
Both parties appealed.
Taking up first the appeal of the Republic, the latter complains of the action of the trial court in
dismissing the part of its complaint seeking to compel the defendant to enter into an interconnecting
contract with it, because the parties could not agree on the terms and conditions of the
interconnection, and of its refusal to fix the terms and conditions therefor.
We agree with the court below that parties can not be coerced to enter into a contract where no
agreement is had between them as to the principal terms and conditions of the contract. Freedom to
stipulate such terms and conditions is of the essence of our contractual system, and by express
provision of the statute, a contract may be annulled if tainted by violence, intimidation, or undue
influence (Articles 1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has
apparently overlooked that while the Republic may not compel the PLDT to celebrate a contract with
it, the Republic may, in the exercise of the sovereign power of eminent domain, require the
telephone company to permit interconnection of the government telephone system and that of the
PLDT, as the needs of the government service may require, subject to the payment of just
compensation to be determined by the court. Nominally, of course, the power of eminent domain
results in the taking or appropriation of title to, and possession of, the expropriated property; but no
cogent reason appears why the said power may not be availed of to impose only a burden upon the
owner of condemned property, without loss of title and possession. It is unquestionable that real
property may, through expropriation, be subjected to an easement of right of way. The use of the
PLDT's lines and services to allow inter-service connection between both telephone systems is not
much different. In either case private property is subjected to a burden for public use and benefit. If,
under section 6, Article XIII, of the Constitution, the State may, in the interest of national welfare,
transfer utilities to public ownership upon payment of just compensation, there is no reason why the
State may not require a public utility to render services in the general interest, provided just
compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service would be the
users of both telephone systems, so that the condemnation would be for public use.
The Bureau of Telecommunications, under section 78 (b) of Executive Order No. 94, may operate
and maintain wire telephone or radio telephone communications throughout the Philippines by
utilizing existing facilities in cities, towns, and provinces under such terms and conditions or
arrangement with present owners or operators as may be agreed upon to the satisfaction of all
concerned; but there is nothing in this section that would exclude resort to condemnation
proceedings where unreasonable or unjust terms and conditions are exacted, to the extent of
crippling or seriously hampering the operations of said Bureau.
A perusal of the complaint shows that the Republic's cause of action is predicated upon the radio
telephonic isolation of the Bureau's facilities from the outside world if the severance of
interconnection were to be carried out by the PLDT, thereby preventing the Bureau of
Telecommunications from properly discharging its functions, to the prejudice of the general public.
Save for the prayer to compel the PLDT to enter into a contract (and the prayer is no essential part
of the pleading), the averments make out a case for compulsory rendering of inter-connecting
services by the telephone company upon such terms and conditions as the court may determine to

be just. And since the lower court found that both parties "are practically at one that defendant
(PLDT) is entitled to reasonable compensation from plaintiff for the reasonable use of the former's
telephone facilities" (Decision, Record on Appeal, page 224), the lower court should have proceeded
to treat the case as one of condemnation of such services independently of contract and proceeded
to determine the just and reasonable compensation for the same, instead of dismissing the petition.
This view we have taken of the true nature of the Republic's petition necessarily results in
overruling the plea of defendant-appellant PLDT that the court of first instance had no jurisdiction to
entertain the petition and that the proper forum for the action was the Public Service Commission.
That body, under the law, has no authority to pass upon actions for the taking of private property
under the sovereign right of eminent domain. Furthermore, while the defendant telephone company
is a public utility corporation whose franchise, equipment and other properties are under the
jurisdiction, supervision and control of the Public Service Commission (Sec. 13, Public Service Act),
yet the plaintiff's telecommunications network is a public service owned by the Republic and
operated by an instrumentality of the National Government, hence exempt, under Section 14 of the
Public Service Act, from such jurisdiction, supervision and control. The Bureau of
Telecommunications was created in pursuance of a state policy reorganizing the government offices

to meet the exigencies attendant upon the establishment of the free and independent
Government of the Republic of the Philippines, and for the purpose of promoting simplicity,
economy and efficiency in its operation (Section 1, Republic Act No. 51)
and the determination of state policy is not vested in the Commission (Utilities Com. vs. Bartonville
Bus Line, 290 Ill. 574; 124 N.E. 373).
Defendant PLDT, as appellant, contends that the court below was in error in not holding that the
Bureau of Telecommunications was not empowered to engage in commercial telephone business,
and in ruling that said defendant was not justified in disconnecting the telephone trunk lines it had
previously leased to the Bureau. We find that the court a quo ruled correctly in rejecting both
assertions.
Executive Order No. 94, Series of 1947, reorganizing the Bureau of Telecommunications, expressly
empowered the latter in its Section 79, subsection (b), to "negotiate for, operate and maintain wire
telephone or radio telephone communication service throughout the Philippines", and, in subsection
(c), "to prescribe, subject to approval by the Department Head, equitable rates of charges for
messages handled by the system and/or for time calls and other services that may be rendered by
the system". Nothing in these provisions limits the Bureau to non-commercial activities or prevents it
from serving the general public. It may be that in its original prospectuses the Bureau officials had
stated that the service would be limited to government offices: but such limitations could not block
future expansion of the system, as authorized by the terms of the Executive Order, nor could the
officials of the Bureau bind the Government not to engage in services that are authorized by law. It is
a well-known rule that erroneous application and enforcement of the law by public officers do not
block subsequent correct application of the statute (PLDT vs. Collector of Internal Revenue, 90 Phil.
676), and that the Government is never estopped by mistake or error on the part of its agents
(Pineda vs. Court of First Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining Co.
vs. Pineda, 98 Phil. 711, 724).
The theses that the Bureau's commercial services constituted unfair competition, and that the
Bureau was guilty of fraud and abuse under its contract, are, likewise, untenable.

First, the competition is merely hypothetical, the demand for telephone service being very much
more than the supposed competitors can supply. As previously noted, the PLDT had 20,000 pending
applications at the time, and the Bureau had another 5,000. The telephone company's inability to
meet the demands for service are notorious even now. Second, the charter of the defendant
expressly provides:
SEC. 14. The rights herein granted shall not be exclusive, and the rights and power to grant
to any corporation, association or person other than the grantee franchise for the telephone
or electrical transmission of message or signals shall not be impaired or affected by the
granting of this franchise: (Act 3436)
And third, as the trial court correctly stated, "when the Bureau of Telecommunications subscribed to
the trunk lines, defendant knew or should have known that their use by the subscriber was more or
less public and all embracing in nature, that is, throughout the Philippines, if not abroad" (Decision,
Record on Appeal, page 216).
The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff
had extended the use of the trunk lines to commercial purposes, continuously since 1948, implies
assent by the defendant to such extended use. Since this relationship has been maintained for a
long time and the public has patronized both telephone systems, and their interconnection is to the
public convenience, it is too late for the defendant to claim misuse of its facilities, and it is not now at
liberty to unilaterally sever the physical connection of the trunk lines.
..., but there is high authority for the position that, when such physical connection has been
voluntarily made, under a fair and workable arrangement and guaranteed by contract and
the continuous line has come to be patronized and established as a great public
convenience, such connection shall not in breach of the agreement be severed by one of the
parties. In that case, the public is held to have such an interest in the arrangement that its
rights must receive due consideration. This position finds approval in State ex rel. vs.
Cadwaller, 172 Ind. 619, 636, 87 N.E. 650, and is stated in the elaborate and learned opinion
of Chief Justice Myers as follows: "Such physical connection cannot be required as of right,
but if such connection is voluntarily made by contract, as is here alleged to be the case, so
that the public acquires an interest in its continuance, the act of the parties in making such
connection is equivalent to a declaration of a purpose to waive the primary right of
independence, and it imposes upon the property such a public status that it may not be
disregarded" citing Mahan v. Mich. Tel. Co., 132 Mich. 242, 93 N.W. 629, and the reasons
upon which it is in part made to rest are referred to in the same opinion, as follows: "Where
private property is by the consent of the owner invested with a public interest or privilege for
the benefit of the public, the owner can no longer deal with it as private property only, but
must hold it subject to the right of the public in the exercise of that public interest or privilege
conferred for their benefit." Allnut v. Inglis (1810) 12 East, 527. The doctrine of this early case
is the acknowledged law. (Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 74 S.E. 636,
638).
It is clear that the main reason for the objection of the PLDT lies in the fact that said appellant did
not expect that the Bureau's telephone system would expand with such rapidity as it has done; but
this expansion is no ground for the discontinuance of the service agreed upon.
The last issue urged by the PLDT as appellant is its right to compensation for the use of its poles
for bearing telephone wires of the Bureau of Telecommunications. Admitting that section 19 of the
PLDT charter reserves to the Government

the privilege without compensation of using the poles of the grantee to attach one ten-pin
cross-arm, and to install, maintain and operate wires of its telegraph system
thereon; Provided, however, That the Bureau of Posts shall have the right to place additional
cross-arms and wires on the poles of the grantee by paying a compensation, the rate of
which is to be agreed upon by the Director of Posts and the grantee;
the defendant counterclaimed for P8,772.00 for the use of its poles by the plaintiff, contending that
what was allowed free use, under the aforequoted provision, was one ten-pin cross-arm attachment
and only for plaintiff's telegraph system, not for its telephone system; that said section could not refer
to the plaintiff's telephone system, because it did not have such telephone system when defendant
acquired its franchise. The implication of the argument is that plaintiff has to pay for the use of
defendant's poles if such use is for plaintiff's telephone system and has to pay also if it attaches
more than one (1) ten-pin cross-arm for telegraphic purposes.
As there is no proof that the telephone wires strain the poles of the PLDT more than the telegraph
wires, nor that they cause more damage than the wires of the telegraph system, or that the
Government has attached to the poles more than one ten-pin cross-arm as permitted by the PLDT
charter, we see no point in this assignment of error. So long as the burden to be borne by the PLDT
poles is not increased, we see no reason why the reservation in favor of the telegraph wires of the
government should not be extended to its telephone lines, any time that the government decided to
engage also in this kind of communication.
In the ultimate analysis, the true objection of the PLDT to continue the link between its network and
that of the Government is that the latter competes "parasitically" (sic) with its own telephone
services. Considering, however, that the PLDT franchise is non-exclusive; that it is well-known that
defendant PLDT is unable to adequately cope with the current demands for telephone service, as
shown by the number of pending applications therefor; and that the PLDT's right to just
compensation for the services rendered to the Government telephone system and its users is herein
recognized and preserved, the objections of defendant-appellant are without merit. To uphold the
PLDT's contention is to subordinate the needs of the general public to the right of the PLDT to derive
profit from the future expansion of its services under its non-exclusive franchise.
WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in
so far as it dismisses the petition of the Republic of the Philippines to compel the Philippine Long
Distance Telephone Company to continue servicing the Government telephone system upon such
terms, and for a compensation, that the trial court may determine to be just, including the period
elapsed from the filing of the original complaint or petition. And for this purpose, the records are
ordered returned to the court of origin for further hearings and other proceedings not inconsistent
with this opinion. No costs.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee
and Barredo, JJ., concur.

Footnotes
1

Stipulated by parties (Record on Appeal, pages 70-72).

Ibid.

Ibid.

Exhibit "Q", folder of exhibits, pages 1-2, 11, 66-67, 69, 72-73, 82-83, 88.

T.s.n., 26 January 1959, page 11.

Exhibit "12-A".

Partial Stipulation of Facts and its Annex "D", record on appeal, pages 72, 134-135.

Exhibit "16", page 49.

T.s.n., 9 March 1960, page 9.

10

T.s.n., 9 March 1960, page 57.

Annex "M" to Partial Stipulation of Facts, record on appeal, page 164-177.

11

12

T.s.n., 9 March 1960, pages 30-31.

13

Annex "P", record on appeal, pages 184-186.

14

Partial Stipulation of Facts, record on appeal page 78.

15

Decision, record on appeal, pages 221-222.

Decision, record on appeal, page 211; Exhibit "3", record of exhibits, page 103; T.s.n., 9
March 1960, pages 56 and 59.
16

17

Ibid.

18

Partial Stipulation of Facts, record on appeal, page 72.

19

Partial Stipulation of Facts, record on appeal, page 77.

DEVORAH E. BARDILLON, petitioner, vs. BARANGAY

Calamba, Laguna, respondent.

MASILI of

DECISION
PANGANIBAN, J.:

An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within

the jurisdiction of regional trial courts, regardless of the value of the subject property.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to
set aside the January 10, 2001 Decision and the February 5, 2001 Resolution of the
Court of Appeals (CA) in CA-GR SP No. 61088. The dispositive part of the Decision
reads:
[1]

[2]

WHEREFORE, premises considered, the present [P]etition for [C]ertiorari is hereby

DENIED DUE COURSE and accordingly DISMISSED, for lack of merit.
[3]

The assailed Resolution denied petitioners Motion for Reconsideration.

[4]

The Facts
The factual antecedents are summarized by the CA as follows:

At the root of this present [P]etition is the controversy surrounding the two (2)
[C]omplaints for eminent domain which were filed by herein respondent for the
purpose of expropriating a ONE HUNDRED FORTY FOUR (144) square meterparcel of land, otherwise known as Lot 4381-D situated in Barangay Masili, Calamba,
Laguna and owned by herein petitioner under Transfer Certificate of Title No. 383605
of the Registry of Deeds of Calamba, Laguna. Petitioner acquired from Makiling
Consolidated Credit Corporation the said lot pursuant to a Deed of Absolute
Sale which was executed by and between the former and the latter on October 7,
1996.
The first [C]omplaint for eminent domain, docketed as Civil Case No. 3648 and
entitled Brgy. Masili, Calamba, Laguna v. Emelita A. Reblara, Eugenia Almazan &
Devorah E. Bardillon, was filed before the Municipal Trial Court of Calamba,
Laguna (MTC) on February 23, 1998, following the failure of Barangay Masili to
reach an agreement with herein petitioner on the purchase offer of TWO HUNDRED

THOUSAND PESOS (P200,000.00). The expropriation of Lot 4381-D was being

pursued in view of providing Barangay Masili a multi-purpose hall for the use and
benefit of its constituents.
On March 5, 1999, the MTC issued an order dismissing Civil Case No. 3648 for
lack of interest for failure of the [respondent] and its counsel to appear at the pretrial. The MTC, in its Order dated May 3, 1999, denied [respondents] [M]otion for
[R]econsideration thereof.
The second [C]omplaint for eminent domain, docketed as Civil Case No. 2845-99-C
and entitled Brgy. Masili, Calamba, Laguna v. Devorah E. Bardillon, was filed
before Branch 37 of the Regional Trial Court of Calamba, Laguna (RTC) on October
18, 1999. This [C]omplaint also sought the expropriation of the said Lot 4381-D for
the erection of a multi-purpose hall of Barangay Masili, but petitioner, by way of
a Motion to Dismiss, opposed this [C]omplaint by alleging in the main that it violated
Section 19(f) of Rule 16 in that [respondents] cause of action is barred by prior
judgment, pursuant to the doctrine of res judicata.
On January 21, 2000, [the] Judge issued an order denying petitioners Motion to
Dismiss, holding that the MTC which ordered the dismissal of Civil Case No. 3648
has no jurisdiction over the said expropriation proceeding.
With the subsequent approval of Municipal Ordinance No. 2000-261 on July 10,
2000, and the submission thereof in compliance with [the] Judges Order dated June 9,
2000 requiring herein respondent to produce the authority for the expropriation
through the Municipal Council of Calamba, Laguna, the assailed Order dated August
4, 2000 was issued in favor of Barangay Masili x x x and, on August 16, 2000, the
corresponding order for the issuance of the [W]rit of [P]ossession over Lot 4381-D.
[5]

Ruling of the Court of Appeals

In dismissing the Petition, the CA held that the Regional Trial Court (RTC) of
Calamba, Laguna (Branch 37) did not commit grave abuse of discretion in issuing the
assailed Orders. It ruled that the second Complaint for eminent domain (Civil Case No.
2845-99-C) was not barred by res judicata. The reason is that the Municipal Trial Court
(MTC), which dismissed the first Complaint for eminent domain (Civil Case No. 3648),
had no jurisdiction over the action.
[6]

Hence, this Petition.

[7]

The Issues

In her Memorandum, petitioner raises the following issues for our consideration:

A. Whether or not, the Honorable Respondent Court committed grave abuse of

discretion amounting to lack of jurisdiction when it denied and dismissed petitioners
appeal;
B. Whether or not, the Honorable Respondent Court committed grave abuse of
discretion when it did not pass upon and consider the pending Motion for
Reconsideration which was not resolved by the Regional Trial Court before issuing
the questioned Orders of 4 and 16 August 2000;
C. Whether or not, the Honorable Respondent Court committed grave abuse of
discretion in taking the total amount of the assessed value of the land and building to
confer jurisdiction to the court a quo;
D. Whether or not, the Honorable Respondent Court committed grave abuse of
discretion in ignoring the fact that there is an existing multi-purpose hall erected in the
land owned by Eugenia Almazan which should be subject of expropriation; and
E. Whether or not, the Honorable Respondent Court committed grave abuse of
discretion in failing to consider the issue of forum shopping committed by Respondent
Masili.
[8]

Simply put, the issues are as follows: (1) whether the MTC had jurisdiction over the
expropriation case; (2) whether the dismissal of that case before the MTC
constituted res judicata; (3) whether the CA erred when it ignored the issue of entry
upon the premises; and (4) whether respondent is guilty of forum shopping.
The Courts Ruling
The Petition has no merit.
First Issue:
Jurisdiction Over Expropriation
Petitioner claims that, since the value of the land is only P11,448, the MTC had
jurisdiction over the case.
[9]

On the other hand, the appellate court held that the assessed value of the property
was P28,960. Thus, the MTC did not have jurisdiction over the expropriation
proceedings, because the amount involved was beyond the P20,000 jurisdictional
amount cognizable by MTCs.
[10]

An expropriation suit does not involve the recovery of a sum of money. Rather, it
deals with the exercise by the government of its authority and right to take property for
public use. As such, it is incapable of pecuniary estimation and should be filed with the
regional trial courts.
[11]

[12]

This was explained by the Court in Barangay San Roque v. Heirs of Francisco
Pastor:
[13]

It should be stressed that the primary consideration in an expropriation suit is

whether the government or any of its instrumentalities has complied with the
requisites for the taking of private property. Hence, the courts determine the authority
of the government entity, the necessity of the expropriation, and the observance of due
process. In the main, the subject of an expropriation suit is the governments exercise
of eminent domain, a matter that is incapable of pecuniary estimation.
True, the value of the property to be expropriated is estimated in monetary terms, for
the court is duty-bound to determine the just compensation for it. This, however, is
merely incidental to the expropriation suit. Indeed, that amount is determined only
after the court is satisfied with the propriety of the expropriation.
Verily, the Court held in Republic of the Philippines v. Zurbano that condemnation
proceedings are within the jurisdiction of Courts of First Instance, the forerunners of
the regional trial courts. The said case was decided during the effectivity of the
Judiciary Act of 1948 which, like BP 129 in respect to RTCs, provided that courts of
first instance had original jurisdiction over all civil actions in which the subject of the
litigation is not capable of pecuniary estimation. The 1997 amendments to the Rules
of Court were not intended to change these jurisprudential precedents.
[14]

To reiterate, an expropriation suit is within the jurisdiction of the RTC regardless of

the value of the land, because the subject of the action is the governments exercise of
eminent domain -- a matter that is incapable of pecuniary estimation.
Second Issue:
Res Judicata
Petitioner claims that the MTCs dismissal of the first Complaint for eminent domain
was with prejudice, since there was no indication to the contrary in the Order of
dismissal. She contends that the filing of the second Complaint before the RTC should
therefore be dismissed on account of res judicata.
Res judicata literally means a matter adjudged, judicially acted upon or decided, or
settled by judgment. It provides that a final judgment on the merits rendered by a court
of competent jurisdiction is conclusive as to the rights of the parties and their privies;
[15]

and constitutes an absolute bar to subsequent actions involving the same claim,
demand or cause of action.
[16]

The following are the requisites of res judicata: (1) the former judgment must be
final; (2) the court that rendered it had jurisdiction over the subject matter and the
parties; (3) it is a judgment on the merits; and (4) there is -- between the first and the
second actions -- an identity of parties, subject matter and cause of action.
[17]

Since the MTC had no jurisdiction over expropriation proceedings, the doctrine
of res judicata finds no application even if the Order of dismissal may have been an
adjudication on the merits.
Third Issue:
Legality of Entry Into Premises
Petitioner argues that the CA erred when it ignored the RTCs Writ of Possession
over her property, issued despite the pending Motion for Reconsideration of the ruling
dismissing the Complaint. We are not persuaded.
The requirements for the issuance of a writ of possession in an expropriation case
are expressly and specifically governed by Section 2 of Rule 67 of the 1997 Rules of
Civil Procedure. On the part of local government units, expropriation is also governed
by Section 19 of the Local Government Code. Accordingly, in expropriation
proceedings, the requisites for authorizing immediate entry are as follows: (1) the filing
of a complaint for expropriation sufficient in form and substance; and (2) the deposit of
the amount equivalent to 15 percent of the fair market value of the property to be
expropriated based on its current tax declaration.
[18]

[19]

[20]

In the instant case, the issuance of the Writ of Possession in favor of respondent
after it had filed the Complaint for expropriation and deposited the amount required was
proper, because it had complied with the foregoing requisites.
The issue of the necessity of the expropriation is a matter properly addressed to the
RTC in the course of the expropriation proceedings. If petitioner objects to the
necessity of the takeover of her property, she should say so in her Answer to the
Complaint. The RTC has the power to inquire into the legality of the exercise of the
right of eminent domain and to determine whether there is a genuine necessity for it.
[21]

[22]

Fourth Issue:
Forum Shopping
Petitioner claims that respondent is guilty of forum shopping, because it scouted for
another forum after obtaining an unfavorable Decision from the MTC.

The test for determining the presence of forum shopping is whether the elements
of litis pendentia are present in two or more pending cases, such that a final judgment in
one case will amount to res judicata in another.
[23]

Be it noted that the earlier case lodged with the MTC had already been dismissed
when the Complaint was filed before the RTC. Even granting arguendo that both cases
were still pending, a final judgment in the MTC case will not constitute res judicata in the
RTC, since the former had no jurisdiction over the expropriation case.
WHEREFORE,
the
Petition
is DENIED and
Decision AFFIRMED. Costs against petitioner.

the

assailed

SO ORDERED.
Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

[1]

Rollo, pp. 10-34.

[2]

Fourteenth Division. Written by Justice Martin S. Villarama Jr.; concurred in by Justice Conrado M.
Vasquez Jr. (Division chairman) and Justice Perlita J. Tria-Tirona (acting member).

[3]

Assailed CA Decision, p. 5; rollo, p. 142.

[4]

Rollo, p. 151.

[5]

Assailed CA Decision, pp. 2-3; rollo, pp. 139-140. Citations omitted. Emphasis in the original.

[6]

Presided by Judge Juanita T. Guerrero.

[7]

This case was deemed submitted for decision on December 6, 2001, upon the Courts receipt of
petitioners Memorandum signed by Atty. Rufino C. Lizardo of Lizardo Carlos &
Associates. Respondents Memorandum, signed by Atty. Reynaldo V. Improgo, was received by
the Court on November 29, 2001.

[8]

Petitioners Memorandum, pp. 8-9; rollo, pp. 428-429. Original in upper case.

[9]

Annex A-1 - Tax Declaration No. 032-00318 issued by the Municipal Assessor of Calamba, Laguna;
rollo, p. 346.

[10]

Assailed CA Decision, p. 4; rollo, p. 410.

[11]

Barangay San Roque, Talisay, Cebu v. Heirs of Francisco Pastor, 334 SCRA 127, June 20,
2000; Republic v. La Orden de PP. Benedictos de Filipinas, 111 Phil. 230, February 28, 1961.

[12]

19 (1) of BP 129, as amended by RA 7691.

[13]

Supra.

[14]

Id., p. 134, per Panganiban, J. Emphasis in original.

[15]

Mirpuri v. Court of Appeals, 318 SCRA 516, November 19, 1999; citing 46 Am Jur 2d, Judgments Sec.
394 (1969 ed.).

[16]

Republic of the Philippines v. Court of Appeals, 324 SCRA 560, February 3, 2000; Firestone Ceramics,
Inc. v. Court of Appeals, 313 SCRA 522, September 2, 1999; Lee Bun Ting v. Aligaen, 76 SCRA
416, April 22, 1977;Philippine National Bank v. Barretto, 52 Phil. 818, February 21, 1929.

[17]

Quezon Province v. Marte, 368 SCRA 145, October 23, 2001; Avisado v. Rumbaua, 354 SCRA 245,
March 12, 2001; Vda. de Salanga v. Alagar, 335 SCRA 728, July 14, 2000; Siapian v. Court of
Appeals, 327 SCRA 11, March 1, 2000; Ocampo v. Buenaventura, 154 Phil. 253, January 24,
1974.

[18]

SECTION 2. Entry of plaintiff upon depositing value with authorized government depositary. Upon
the filing of the complaint or at any time thereafter and after due notice to the defendant, the
plaintiff shall have the right to take or enter upon the possession of the real property involved if he
deposits with the authorized government depositary an amount equivalent to the assessed value
of the property for purposes of taxation to be held by such bank subject to the orders of the court.
xxx

xxx

xxx

xxx

After such deposit is made the court shall order the sheriff or other proper officer to forthwith
place the plaintiff in possession of the property involved and promptly submit a report thereof to
the court with service of copies to the parties.
[19]

SECTION 19. Eminent Domain. A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or
welfare for the benefits of the poor and the landless, upon payment of just compensation,
pursuant to the provisions of the Constitution and pertinent laws; Provided, however, That the
power of eminent domain may not be exercised unless a valid and definite offer has been
previously made to the owner, and such offer was not accepted: Provided, further, That the local
government unit may immediately take possession of the property upon the filing of the
expropriation proceedings and upon making a deposit with the proper court of at least fifteen
percent (15%) of the fair market value of the property based on the current tax declaration of the
property to be expropriated: Provided, finally, That the amount to be paid for the expropriated
property shall be determined by the proper court, based on the fair market value at the time of the
taking of the property.

[20]

Biglang-awa v. Bacalla, 345 SCRA 562, November 22, 2000.

[21]

3 of Rule 67 of the Rules of Court.

[22]

Moday v. Court of Appeals, 335 Phil. 1057, February 20, 1997; Republic of the Philippines v. La Orden
de PP. Benedictinos de Filipinas, supra; City of Manila v. Chinese Community, 40 Phil. 349,
October 31, 1919.

[23]

Heirs of Victorina Motus Peaverde v. Heirs of Mariano Peaverde, 344 SCRA 69, October 20,
2000; Ong v. Court of Appeals, 333 SCRA 189, June 8, 2000; Philippine Womans Christian
Temperance Union, Inc. v. Abiertas House of Friendship, Inc., 354 Phil. 791, July 22, 1998; Buan
v. Lopez Jr., 229 Phil. 65, October 13, 1986.

DIOSDADO LAGCAO,
DOROTEO LAGCAO and
URSULA LAGCAO,
Petitioners,

EN BANC
G.R. No. 155746

- versus -

JUDGE GENEROSA G. LABRA,

Branch 23, Regional Trial Court,
Cebu, and the CITY OF CEBU,
Respondent.

Present:
DAVIDE, C.J.,
PUNO,
PANGANIBAN,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,*
CALLEJO, SR.,
AZCUNA,*
TINGA and
CHICO-NAZARIO,* JJ.

Promulgated:

October 13, 2004

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION

CORONA, J.:
Before us is a petition for review of the decision dated July 1,
2002 of the Regional Trial Court, Branch 23, Cebu City [1] upholding
the validity of the City of Cebus Ordinance No. 1843, as well as the
lower courts order dated August 26, 2002 denying petitioners
motion for reconsideration.
In 1964, the Province of Cebu donated 210 lots to the City of
Cebu. One of these lots was Lot 1029, situated in Capitol Hills,
Cebu City, with an area of 4,048 square meters. In 1965,
petitioners purchased Lot 1029 on installment basis. But then, in
late 1965, the 210 lots, including Lot 1029, reverted to the Province
of Cebu.[2] Consequently, the province tried to annul the sale of Lot
1029 by the City of Cebu to the petitioners. This prompted the latter
to sue the province for specific performance and damages in the
then Court of First Instance.
On July 9, 1986, the court a quo ruled in favor of petitioners
and ordered the Province of Cebu to execute the final deed of sale in
favor of petitioners. On June 11, 1992, the Court of Appeals
affirmed the decision of the trial court. Pursuant to the ruling of
the appellate court, the Province of Cebu executed on June 17,
1994 a deed of absolute sale over Lot 1029 in favor of petitioners.
Thereafter, Transfer Certificate of Title (TCT) No. 129306 was issued
in the name of petitioners and Crispina Lagcao. [3]

After acquiring title, petitioners tried to take possession of the

lot only to discover that it was already occupied by squatters. Thus,
on June 15, 1997, petitioners instituted ejectment proceedings
against the squatters. The Municipal Trial Court in Cities (MTCC),
Branch 1, Cebu City, rendered a decision on April 1, 1998, ordering
the squatters to vacate the lot. On appeal, the RTC affirmed the
MTCCs decision and issued a writ of execution and order of
demolition.
However, when the demolition order was about to be
implemented, Cebu City Mayor Alvin Garcia wrote two letters [4] to
the MTCC, requesting the deferment of the demolition on the
ground that the City was still looking for a relocation site for the
squatters. Acting on the mayors request, the MTCC issued two
orders suspending the demolition for a period of 120 days from
February 22, 1999. Unfortunately for petitioners, during the
suspension period, the Sangguniang Panlungsod (SP) of Cebu City
passed a resolution which identified Lot 1029 as a socialized
housing site pursuant to RA 7279. [5] Then, on June 30, 1999, the
SP of Cebu City passed Ordinance No. 1772 [6] which included Lot
1029 among the identified sites for socialized housing. On July, 19,
2000, Ordinance No. 1843[7] was enacted by the SP of Cebu City
authorizing the mayor of Cebu City to initiate expropriation
proceedings for the acquisition of Lot 1029 which was registered in
the name of petitioners. The intended acquisition was to be used for
the benefit of the homeless after its subdivision and sale to the
actual

occupants

thereof.

For

this

purpose,

the

ordinance

appropriated the amount of P6,881,600 for the payment of the

subject lot. This ordinance was approved by Mayor Garcia on
August 2, 2000.
On August 29, 2000, petitioners filed with the RTC an action
for declaration of nullity of Ordinance No. 1843 for being
unconstitutional. The trial court rendered its decision on July 1,
2002

dismissing

the

complaint

filed

by

petitioners

whose

subsequent motion for reconsideration was likewise denied on

August 26, 2002.
In this appeal, petitioners argue that Ordinance No. 1843 is
unconstitutional as it sanctions the expropriation of their property
for the purpose of selling it to the squatters, an endeavor contrary
to the concept of public use contemplated in the Constitution.
[8]

They allege that it will benefit only a handful of people. The

ordinance, according to petitioners, was obviously passed for

politicking, the squatters undeniably being a big source of votes.
In sum, this Court is being asked to resolve whether or not the
intended expropriation by the City of Cebu of a 4,048-square-meter
parcel of land owned by petitioners contravenes the Constitution
and applicable laws.
Under Section 48 of RA 7160, [9] otherwise known as the Local
Government Code of 1991,[10] local legislative power shall

be exercised by the Sangguniang Panlungsod of the city. The

legislative acts of the Sangguniang Panlungsod in the exercise of its
lawmaking authority are denominated ordinances.
Local government units have no inherent power of eminent
domain and can exercise it only when expressly authorized by the
legislature.[11] By virtue of RA 7160, Congress conferred upon local
government units the power to expropriate. Ordinance No. 1843
was enacted pursuant to Section 19 of RA 7160:
SEC. 19. Eminent Domain. A local government unit may, through
its chief executive and acting pursuant to an ordinance, exercise the
power of eminent domain for public use, or purpose, or welfare for the
benefit of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and pertinent
laws xxx. (italics supplied).

Ordinance No. 1843 which authorized the expropriation of

petitioners lot was enacted by the SP of Cebu City to provide
socialized housing for the homeless and low-income residents of the
City.
However, while we recognize that housing is one of the most
serious social problems of the country, local government units do
not possess unbridled authority to exercise their power of eminent
domain in seeking solutions to this problem.
There are two legal provisions which limit the exercise of this
power: (1) no person shall be deprived of life, liberty, or property
without due process of law, nor shall any person be denied the

equal protection of the laws;[12] and (2) private property shall not be
taken for public use without just compensation. [13] Thus, the
exercise by local government units of the power of eminent domain
is not absolute. In fact, Section 19 of RA 7160 itself explicitly states
that such exercise must comply with the provisions of the
Constitution and pertinent laws.
The exercise of the power of eminent domain drastically affects
a landowners right to private property, which is as much a
constitutionally-protected right necessary for the preservation and
enhancement of personal dignity and intimately connected with the
rights to life and liberty.[14] Whether directly exercised by the State
or by its authorized agents, the exercise of eminent domain is
necessarily in derogation of private rights. [15] For this reason, the
need for a painstaking scrutiny cannot be overemphasized.
The due process clause cannot be trampled upon each time an
ordinance

orders

the

expropriation

of

private

individuals property. The courts cannot even adopt a hands-off

policy simply because public use or public purpose is invoked by an
ordinance,

or

just

compensation

has

been

fixed

determined. In De Knecht vs. Bautista,[16] we said:

It is obvious then that a land-owner is covered by the mantle of
protection due process affords. It is a mandate of reason. It frowns on
arbitrariness, it is the antithesis of any governmental act that smacks of
whim or caprice. It negates state power to act in an oppressive manner. It
is, as had been stressed so often, the embodiment of the sporting idea of
fair play. In that sense, it stands as a guaranty of justice. That is the
standard that must be met by any governmental agency in the exercise of
whatever competence is entrusted to it. As was so emphatically stressed

and

by the present Chief Justice, Acts of Congress, as well as those of the

Executive, can deny due process only under pain of nullity. xxx.

The foundation of the right to exercise eminent domain is

genuine necessity and that necessity must be of public character.
Government may not capriciously or arbitrarily choose which

[17]

private property should be expropriated. In this case, there was no

showing at all why petitioners property was singled out for
expropriation by the city ordinance or what necessity impelled the
particular choice or selection. Ordinance No. 1843 stated no reason
for the choice of petitioners property as the site of a socialized
housing project.
Condemnation of private lands in an irrational or piecemeal
fashion or the random expropriation of small lots to accommodate
no more than a few tenants or squatters is certainly not the
condemnation for public use contemplated by the Constitution. This
is depriving a citizen of his property for the convenience of a few
without perceptible benefit to the public.[18]
RA 7279 is the law that governs the local expropriation of
property for purposes of urban land reform and housing. Sections 9
and 10 thereof provide:
SEC 9. Priorities in the Acquisition of Land. Lands for socialized
housing shall be acquired in the following order:
(a)

Those owned by the Government or any of its subdivisions,

instrumentalities, or agencies, including government-owned
or controlled corporations and their subsidiaries;

(b)

Alienable lands of the public domain;

(c)

Unregistered or abandoned and idle lands;

(d)

Those within the declared Areas or Priority Development,

Zonal Improvement Program sites, and Slum Improvement
and Resettlement Program sites which have not yet been
acquired;

(e)

Bagong Lipunan Improvement of Sites and Services or

BLISS which have not yet been acquired; and

(f)

Privately-owned lands.

Where on-site development is found more practicable and

advantageous to the beneficiaries, the priorities mentioned in this section
shall not apply. The local government units shall give budgetary priority to
on-site development of government lands. (Emphasis supplied).
SEC. 10. Modes of Land Acquisition. The modes of acquiring
lands for purposes of this Act shall include, among others, community
mortgage, land swapping, land assembly or consolidation, land banking,
donation to the Government, joint venture agreement, negotiated
purchase, and expropriation: Provided, however, That expropriation
shall be resorted to only when other modes of acquisition have been
exhausted: Provided further, That where expropriation is resorted to,
parcels of land owned by small property owners shall be exempted for
purposes of this Act: xxx. (Emphasis supplied).

In the recent case of Estate or Heirs of the Late Ex-Justice Jose

B.L. Reyes et al. vs. City of Manila, [19] we ruled that the above-quoted
provisions are strict limitations on the exercise of the power of
eminent domain by local government units, especially with respect
to (1) the order of priority in acquiring land for socialized housing
and (2) the resort to expropriation proceedings as a means to
acquiring it. Private lands rank last in the order of priority for
purposes of socialized housing. In the same vein, expropriation
proceedings may be resorted to only after the other modes of

acquisition are exhausted. Compliance with these conditions

is mandatory because these are the only safeguards of oftentimes
helpless owners of private property against what may be a
tyrannical violation of due process when their property is forcibly
taken from them allegedly for public use.
We have found nothing in the records indicating that the City
of Cebu complied strictly with Sections 9 and 10 of RA 7279.
Ordinance No. 1843 sought to expropriate petitioners property
without any attempt to first acquire the lands listed in (a) to (e) of
Section 9 of RA 7279. Likewise, Cebu City failed to establish that
the other modes of acquisition in Section 10 of RA 7279 were first
exhausted. Moreover, prior to the passage of Ordinance No. 1843,
there was no evidence of a valid and definite offer to buy petitioners
property as required by Section 19 of RA 7160. [20] We therefore find
Ordinance No. 1843 to be constitutionally infirm for being violative
of the petitioners right to due process.
It should also be noted that, as early as 1998, petitioners had
already obtained a favorable judgment of eviction against the illegal
occupants of their property. The judgment in this ejectment case
had, in fact, already attained finality, with a writ of execution and
an order of demolition. But Mayor Garcia requested the trial court
to suspend the demolition on the pretext that the City was still
searching for a relocation site for the squatters. However, instead of
looking for a relocation site during the suspension period, the city
council suddenly enacted Ordinance No. 1843 for the expropriation

of petitioners lot. It was trickery and bad faith, pure and simple.
The unconscionable manner in which the questioned ordinance was
passed clearly indicated that respondent City transgressed the
Constitution, RA 7160 and RA 7279.
For an ordinance to be valid, it must not only be within the
corporate powers of the city or municipality to enact but must also
be passed according to the procedure prescribed by law. It must be
in accordance with certain well-established basic principles of a
substantive nature. These principles require that an ordinance (1)
must not contravene the Constitution or any statute (2) must not be
unfair or oppressive (3) must not be partial or discriminatory (4)
must not prohibit but may regulate trade (5) must be general and
consistent with public policy, and (6) must not be unreasonable. [21]
Ordinance No. 1843 failed to comply with the foregoing
substantive requirements. A clear case of constitutional infirmity
having been thus established, this Court is constrained to nullify
the subject ordinance. We recapitulate:
first, as earlier discussed, the questioned ordinance is
repugnant to the pertinent provisions of the Constitution, RA
7279 and RA 7160;
second, the precipitate manner in which it was enacted was
plain oppression masquerading as a pro-poor ordinance;

third, the fact that petitioners small property was singled out
for expropriation for the purpose of awarding it to no more
than a few squatters indicated manifest partiality against
petitioners, and
fourth, the ordinance failed to show that there was a
reasonable relation between the end sought and the means
adopted. While the objective of the City of Cebu was to provide
adequate housing to slum dwellers, the means it employed in
pursuit of such objective fell short of what was legal, sensible
and called for by the circumstances.
Indeed, experience has shown that the disregard of basic
liberties and the use of short-sighted methods in expropriation
proceedings have not achieved the desired results. Over the years,
the government has tried to remedy the worsening squatter
problem. Far from solving it, however, governments kid-glove
approach has only resulted in the multiplication and proliferation of
squatter colonies and blighted areas. A pro-poor program that is
well-studied, adequately funded, genuinely sincere and truly
respectful of everyones basic rights is what this problem calls for,
not

the

improvident

enactment

of

politics-based

ordinances

targeting small private lots in no rational fashion.

WHEREFORE, the petition is hereby GRANTED. The July 1,
2002 decision of Branch 23 of the Regional Trial Court of Cebu City
isREVERSED and SET ASIDE.

SO ORDERED.
RENATO C. CORONA
Associate Justice
W E C O N C U R:
HILARIO G. DAVIDE, JR.
Chief Justice
REYNATO S. PUNO
Associate Justice

ARTEMIO V. PANGANIBAN
Associate Justice

LEONARDO A. QUISUMBING
Associate Justice

CONSUELO YNARES-SANTIAGO
Associate Justice

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice

ANTONIO T. CARPIO
Associate Justice

MA. ALICIA M. AUSTRIA-MARTINEZ

Associate Justice

(on leave)
CONCHITA CARPIO MORALES
Associate Justice

ROMEO J. CALLEJO, SR.

Associate Justice

(on leave)
ADOLFO S. AZCUNA
Associate Justice

DANTE O. TINGA
Associate Justice

(on leave)
MINITA V. CHICO-NAZARIO
Associate Justice

CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is
hereby certified that the conclusions in the above Decision were
reached in consultation before the case was assigned to the writer
of the opinion of the Court.

HILARIO G. DAVIDE, JR.

Chief Justice

*
[1]
[2]

[3]
[4]

[5]
[6]

on leave
Presided by Judge Generosa G. Labra.
The records of the case do not state why and how the lots reverted to the Province of Cebu.
Now deceased.
Dated February 22, 1999 and May 20, 1999.
The Urban Development and Housing Act of 1992 (Lina Law).
Entitled, AN ORDINANCE FURTHER AMENDING ORDINANCE NO. 1656 AS AMENDED BY
ORDINANCE NO. 1684 OTHERWISE KNOWN AS THE 1966 REVISED ZONING ORDINANCE OF
THE CITY OF CEBU, BY INCORPORATING THEREIN A NEW DISTRICT CALLED SOCIALIZED
HOUSING SITES.

[7]

Entitled AN ORDINANCE AUTHORIZING THE CITY MAYOR OF CEBU CITY TO INSTITUTE

EXPROPRIATION PROCEEDINGS AGAINST MRS. CRISPINA VDA. DE LAGCAO, OWNER OF
LOT NO. 1029 LOCATED AT GREEN VALLEY, CAPITOL SITE, CEBU CITY, TO ACQUIRE THE
SAME FOR PUBLIC USE OR PURPOSE.

[8]

Article IV, Section 9 Private property shall not be taken for public use without just compensation.
Section 48. Local Legislative Power Local legislative power shall be exercised by the sangguniang
panlalawigan for the province; the sangguniang panlungsod for the city; the sangguniang bayan for the
municipality; and thesangguniang barangay for the barangay.
The law was approved on October 10, 1991 and it became effective on January 1, 1992.
City of Cincinnati vs. Vester, 281 US 439, 74 L. ed 950, 50 S Ct. 360.
Article 3, Section 1, 1987 Constitution.
Article 3, Section 9, 1987 Constitution.
Joaquin G. Bernas, The Constitution of the Republic of the Philippines: A Commentary, vol. 1. p.
43, 1987.
City of Manila vs. Chinese Community of Manila, 40 Phil. 349, 1919.
G.R. No. L-51078, 30 October 1980, 100 SCRA 660.
City of Manila vs. Chinese Community of Manila, supra.

[9]

[10]
[11]
[12]
[13]
[14]

[15]
[16]
[17]

[18]
[19]
[20]

[21]

Urban Estates, Inc. vs. Montesa, 88 Phil. 348 (1951).

G.R. Nos. 132431 and 137146, February 13, 2004.
Sec 19. Eminent Domain xxx. Provided however, that the power of eminent domain may not be
exercised unless a valid and definite offer has been previously made to the owner, and such offer was not
accepted: xxx.
Tatel vs. Municipality of Virac, G.R. No. 40243, 11 March 1992, 207 SCRA 157.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-14355

October 31, 1919

THE CITY OF MANILA, plaintiff-appellant,

vs.
CHINESE COMMUNITY OF MANILA, ET AL., defendants-appellees.
City Fiscal Diaz for appellant.
Crossfield and O'Brien, Williams, Ferrier and Sycip, Delgado and Delgado, Filemon Sotto, and
Ramon Salinas for appellees.

JOHNSON, J.:
The important question presented by this appeal is: In expropriation proceedings by the city of
Manila, may the courts inquire into, and hear proof upon, the necessity of the expropriation?

That question arose in the following manner:

On the 11th day of December, 1916, the city of Manila presented a petition in the Court of First
Instance of said city, praying that certain lands, therein particularly described, be expropriated for the
purpose of constructing a public improvement. The petitioner, in the second paragraph of the
petition, alleged:
That for the purpose of constructing a public improvement, namely, the extension of Rizal
Avenue, Manila, it is necessary for the plaintiff to acquire ownership in fee simple of certain
parcels of land situated in the district of Binondo of said city within Block 83 of said district,
and within the jurisdiction of this court.
The defendant, the Comunidad de Chinos de Manila [Chinese Community of Manila], answering the
petition of the plaintiff, alleged that it was a corporation organized and existing under and by virtue of
the laws of the Philippine Islands, having for its purpose the benefit and general welfare of the
Chinese Community of the City of Manila; that it was the owner of parcels one and two of the land
described in paragraph 2 of the complaint; that it denied that it was either
necessary or expedient that the said parcels be expropriated for street purposes; that existing street
and roads furnished ample means of communication for the public in the district covered by such
proposed expropriation; that if the construction of the street or road should be considered a public
necessity, other routes were available, which would fully satisfy the plaintiff's purposes, at much less
expense and without disturbing the resting places of the dead; that it had a Torrens title for the lands
in question; that the lands in question had been used by the defendant for cemetery purposes; that a
great number of Chinese were buried in said cemetery; that if said expropriation be carried into
effect, it would disturb the resting places of the dead, would require the expenditure of a large sum of
money in the transfer or removal of the bodies to some other place or site and in the purchase of
such new sites, would involve the destruction of existing monuments and the erection of new
monuments in their stead, and would create irreparable loss and injury to the defendant and to all
those persons owning and interested in the graves and monuments which would have to be
destroyed; that the plaintiff was without right or authority to expropriate said cemetery or any part or
portion thereof for street purposes; and that the expropriation, in fact, was not necessary as a public
improvement.
The defendant Ildefonso Tambunting, answering the petition, denied each and every allegation of the
complaint, and alleged that said expropriation was not a public improvement; that it was not
necessary for the plaintiff to acquire the parcels of land in question; that a portion of the lands in
question was used as a cemetery in which were the graves of his ancestors; that monuments and
tombstones of great value were found thereon; that the land had become quasi-public property of a
benevolent association, dedicated and used for the burial of the dead and that many dead were
buried there; that if the plaintiff deemed it necessary to extend Rizal Avenue, he had offered and still
offers to grant a right of way for the said extension over other land, without cost to the plaintiff, in
order that the sepulchers, chapels and graves of his ancestors may not be disturbed; that the land
so offered, free of charge, would answer every public necessity on the part of the plaintiff.

The defendant Feliza Concepcion de Delgado, with her husband, Jose Maria Delgado, and each of
the other defendants, answering separately, presented substantially the same defense as that
presented by the Comunidad de Chinos de Manila and Ildefonso Tambunting above referred to.
The foregoing parts of the defense presented by the defendants have been inserted in order to show
the general character of the defenses presented by each of the defendants. The plaintiff alleged that
the expropriation was necessary. The defendants each alleged (a) that no necessity existed for said
expropriation and (b) that the land in question was a cemetery, which had been used as such for
many years, and was covered with sepulchres and monuments, and that the same should not be
converted into a street for public purposes.
Upon the issue thus presented by the petition and the various answers, the Honorable Simplicio del
Rosario, judge, in a very elucidated opinion, with very clear and explicit reasons, supported by
ambulance of authorities, decided that there was no necessity for the expropriation of the particular
strip of land in question, and absolved each and all of the defendants from all liability under the
complaint, without any finding as to costs.
From that judgment the plaintiff appealed and presented the above question as its principal ground
of appeal.
The theory of the plaintiff is, that once it has established the fact, under the law, that it
has authority to expropriate land, it may expropriate any land it may desire; that the only function of
the court in such proceedings is to ascertain the value of the land in question; that neither the court
nor the owners of the land can inquire into the advisible purpose of purpose of the expropriation or
ask any questions concerning the necessities therefor; that the courts are mere appraisers of the
land involved in expropriation proceedings, and, when the value of the land is fixed by the method
adopted by the law, to render a judgment in favor of the defendant for its value.
That the city of Manila has authority to expropriate private lands for public purposes, is not denied.
Section 2429 of Act No. 2711 (Charter of the city of Manila) provides that "the city (Manila) . . . may
condemn private property forpublic use."
The Charter of the city of Manila contains no procedure by which the said authority may be carried
into effect. We are driven, therefore, to the procedure marked out by Act No. 190 to ascertain how
the said authority may be exercised. From an examination of Act No. 190, in its section 241, we
find how the right of eminent domain may be exercised. Said section 241 provides that, "The
Government of the Philippine Islands, or of any province or department thereof, or of
any municipality, and any person, or public or private corporation having, by law, the right to
condemn private property for public use, shall exercise that right in the manner hereinafter
prescribed."
Section 242 provides that a complaint in expropriation proceeding shall be presented; that the
complaint shall state with certainty the right of condemnation, with a description of the property
sought to be condemned together with the interest of each defendant separately.

Section 243 provides that if the court shall find upon trial that the right to expropriate the land in
question exists, it shall then appoint commissioners.
Sections 244, 245 and 246 provide the method of procedure and duty of the commissioners. Section
248 provides for an appeal from the judgment of the Court of First Instance to the Supreme Court.
Said section 248 gives the Supreme Court authority to inquire into the right of expropriation on the
part of the plaintiff. If the Supreme Court on appeal shall determine that no right of expropriation
existed, it shall remand the cause to the Court of First Instance with a mandate that the defendant be
replaced in the possession of the property and that he recover whatever damages he may have
sustained by reason of the possession of the plaintiff.
It is contended on the part of the plaintiff that the phrase in said section, "and if the court shall find
the right to expropriate exists," means simply that, if the court finds that there is some
law authorizing the plaintiff to expropriate, then the courts have no other function than to authorize
the expropriation and to proceed to ascertain the value of the land involved; that the necessity for the
expropriation is a legislative and not a judicial question.
Upon the question whether expropriation is a legislative function exclusively, and that the courts
cannot intervene except for the purpose of determining the value of the land in question, there is
much legal legislature. Much has been written upon both sides of that question. A careful
examination of the discussions pro and con will disclose the fact that the decisions depend largely
upon particular constitutional or statutory provisions. It cannot be denied, if the legislature under
proper authority should grant the expropriation of a certain or particular parcel of land for some
specified public purpose, that the courts would be without jurisdiction to inquire into the purpose of
that legislation.
If, upon the other hand, however, the Legislature should grant general authority to a municipal
corporation to expropriate private land for public purposes, we think the courts have ample authority
in this jurisdiction, under the provisions above quoted, to make inquiry and to hear proof, upon an
issue properly presented, concerning whether or not the lands were private and whether the purpose
was, in fact, public. In other words, have no the courts in this jurisdiction the right, inasmuch as the
questions relating to expropriation must be referred to them (sec. 241, Act No. 190) for final decision,
to ask whether or not the law has been complied with? Suppose in a particular case, it should be
denied that the property is not private property but public, may not the courts hear proof upon that
question? Or, suppose the defense is, that the purpose of the expropriation is not public butprivate,
or that there exists no public purpose at all, may not the courts make inquiry and hear proof upon
that question?
The city of Manila is given authority to expropriate private lands for public purposes. Can it be
possible that said authority confers the right to determine for itself that the land is private and that the
purpose is public, and that the people of the city of Manila who pay the taxes for its support,
especially those who are directly affected, may not question one or the other, or both, of these
questions? Can it be successfully contended that the phrase used in Act No. 190, "and if the court
upon trial shall find that such right exists," means simply that the court shall examine the statutes
simply for the purpose of ascertaining whether a law exists authorizing the petitioner to exercise the
right of eminent domain? Or, when the case arrives in the Supreme Court, can it be possible that the

phrase, "if the Supreme Court shall determine that no right of expropriation exists," that that simply
means that the Supreme Court shall also examine the enactments of the legislature for the purpose
of determining whether or not a law exists permitting the plaintiff to expropriate?
We are of the opinion that the power of the court is not limited to that question. The right of
expropriation is not an inherent power in a municipal corporation, and before it can exercise the right
some law must exist conferring the power upon it. When the courts come to determine the question,
they must only find (a) that a law or authority exists for the exercise of the right of eminent domain,
but (b) also that the right or authority is being exercised in accordance with the law. In the present
case there are two conditions imposed upon the authority conceded to the City of Manila: First, the
land must be private; and, second, the purpose must be public. If the court, upon trial, finds that
neither of these conditions exists or that either one of them fails, certainly it cannot be contended
that the right is being exercised in accordance with law.
Whether the purpose for the exercise of the right of eminent domain is public, is a question of fact.
Whether the land is public, is a question of fact; and, in our opinion, when the legislature conferred
upon the courts of the Philippine Islands the right to ascertain upon trial whether the right exists for
the exercise of eminent domain, it intended that the courts should inquire into, and hear proof upon,
those questions. Is it possible that the owner of valuable land in this jurisdiction is compelled to stand
mute while his land is being expropriated for a use not public, with the right simply to beg the city of
Manila to pay him the value of his land? Does the law in this jurisdiction permit municipalities to
expropriate lands, without question, simply for the purpose of satisfying the aesthetic sense of those
who happen for the time being to be in authority? Expropriation of lands usually calls for public
expense. The taxpayers are called upon to pay the costs. Cannot the owners of land question
the public use or the public necessity?
As was said above, there is a wide divergence of opinion upon the authority of the court to question
the necessity or advisability of the exercise of the right of eminent domain. The divergence is usually
found to depend upon particular statutory or constitutional provisions.
It has been contended and many cases are cited in support of that contention, and section 158 of
volume 10 of Ruling Case Law is cited as conclusive that the necessity for taking property under
the right of eminent domain is not a judicial question. But those who cited said section evidently
overlooked the section immediately following (sec. 159), which adds: "But it is obvious that if the
property is taken in the ostensible behalf of a public improvement which it can never by any
possibility serve, it is being taken for a use not public, and the owner's constitutional rights call for
protection by the courts. While many courts have used sweeping expression in the decisions in
which they have disclaimed the power of supervising the power of supervising the selection of the
sites of public improvements, it may be safely said that the courts of the various states would feel
bound to interfere to prevent an abuse of the discretion delegated by the legislature, by an attempted
appropriation of land in utter disregard of the possible necessity of its use, or when the alleged
purpose was a cloak to some sinister scheme." (Norwich City vs. Johnson, 86 Conn., 151; Bell vs.
Mattoon Waterworks, etc. Co., 245 Ill., 544; Wheeling, etc. R. R. Co. vs. Toledo Ry. etc. Co., 72 Ohio
St., 368; State vs. Stewart, 74 Wis., 620.)

Said section 158 (10 R. C. L., 183) which is cited as conclusive authority in support of the contention
of the appellant, says:
The legislature, in providing for the exercise of the power of eminent domain, may directly
determine the necessity for appropriating private property for a particular improvement for
public use, and it may select the exact location of the improvement. In such a case, it is well
settled that the utility of the proposed improvement, the extent of the public necessity for its
construction, the expediency of constructing it, the suitableness of the location selected and
the consequent necessity of taking the land selected for its site, are all questions exclusively
for the legislature to determine, and the courts have no power to interfere, or to substitute
their own views for those of the representatives of the people.
Practically every case cited in support of the above doctrine has been examined, and we are justified
in making the statement that in each case the legislature directly determined the necessity for the
exercise of the right of eminent domain in the particular case. It is not denied that if the necessity for
the exercise of the right of eminent domain is presented to the legislative department of the
government and that department decides that there exists a necessity for the exercise of the right in
a particular case, that then and in that case, the courts will not go behind the action of the legislature
and make inquiry concerning the necessity. But, in the case of Wheeling, etc. R. R. Co. vs. Toledo,
Ry, etc., Co. (72 Ohio St., 368 [106 Am. St. rep., 622, 628]), which was cited in support of the
doctrine laid down in section 158 above quoted, the court said:
But when the statute does not designate the property to be taken nor how may be taken,
then the necessity of taking particular property is a question for the courts. Where the
application to condemn or appropriate is made directly to the court, the question (of
necessity) should be raised and decided in limene.
The legislative department of the government was rarely undertakes to designate the precise
property which should be taken for public use. It has generally, like in the present case, merely
conferred general authority to take land for public use when a necessity exists therefor. We believe
that it can be confidently asserted that, under such statute, the allegation of the necessity for the
appropriation is an issuable allegation which it is competent for the courts to decide.
(Lynch vs. Forbes, 161 Mass., 302 [42 Am. St. Rep., 402, 407].)
There is a wide distinction between a legislative declaration that a municipality is given authority to
exercise the right of eminent domain, and a decision by the municipality that there exist a necessity
for the exercise of that right in a particular case. The first is a declaration simply that there exist
reasons why the right should be conferred upon municipal corporation, while the second is the
application of the right to a particular case. Certainly, the legislative declaration relating to the
advisability of granting the power cannot be converted into a declaration that a necessity exists for
its exercise in a particular case, and especially so when, perhaps, the land in question was not within
the territorial authority was granted.
Whether it was wise, advisable, or necessary to confer upon a municipality the power to exercise the
right of eminent domain, is a question with which the courts are not concerned. But when that right
or authority is exercised for the purpose of depriving citizens of their property, the courts are

authorized, in this jurisdiction, to make inquiry and to hear proof upon the necessity in the particular
case, and not the general authority.
Volume 15 of the Cyclopedia of Law and Procedure (Cyc.), page 629, is cited as a further conclusive
authority upon the question that the necessity for the exercise of the right of eminent domain is a
legislative and not a judicial question. Cyclopedia, at the page stated, says:
In the absence of some constitutional or statutory provision to the contrary,
the necessity and expediency of exercising the right of eminent domain are questions
essentially political and not judicial in their character. The determination of those questions
(the necessity and the expediency) belongs to the sovereign power; the legislative
department is final and conclusive, and the courts have no power to review it (the necessity
and the expediency) . . . . It (the legislature) may designate the particular property to be
condemned, and its determination in this respect cannot be reviewed by the courts.
The volume of Cyclopedia, above referred to, cites many cases in support of the doctrine quoted.
While time has not permitted an examination of all of said citations, many of them have been
examined, and it can be confidently asserted that said cases which are cited in support of the
assertion that, "the necessity and expediency of exercising the right of eminent domain are
questions essentially political and not judicial," show clearly and invariably that in each case the
legislature itself usually, by a special law, designated the particular case in which the right of eminent
domain might be exercised by the particular municipal corporation or entity within the state. (Eastern
R. Co. vs. Boston, etc., R. Co., 11 Mass., 125 [15 Am. Rep., 13]; Brooklyn Park
Com'rs vs. Armstrong, 45 N.Y., 234 [6 Am. Rep., 70]; Hairston vs. Danville, etc. Ry. Co., 208 U. S.
598; Cincinnati vs. Louisville, etc. Ry. Co., 223 U. S., 390; U.S. vs. Chandler-Dunbar Water Power
Co., 229 U. S., 53; U.S. vs. Gettysburg, etc. Co., 160 U. S., 668; Traction Co. vs. Mining Co., 196
U.S., 239; Sears vs. City of Akron, 246 U.S., 351 [erroneously cited as 242 U.S.].)
In the case of Traction Co. vs. Mining Co. (196 U.S., 239), the Supreme Court of the United States
said: "It is erroneous to suppose that the legislature is beyond the control of the courts in exercising
the power of eminent domain, either as to the nature of the use or the necessity to the use of any
particular property. For if the use be not public or no necessity for the taking exists, the legislature
cannot authorize the taking of private property against the will of the owner, notwithstanding
compensation may be required."
In the case of School Board of Carolina vs. Saldaa (14 Porto Rico, 339, 356), we find the Supreme
Court of Porto Rico, speaking through Justice MacLeary, quoting approvingly the following, upon the
question which we are discussing: "It is well settled that although the legislature must necessarily
determine in the first instance whether the use for which they (municipalities, etc.) attempt to
exercise the power is a public one or not, their (municipalities, etc.) determination is not final, but is
subject to correction by the courts, who may undoubtedly declare the statute unconstitutional, if it
shall clearly appear that the use for which it is proposed to authorize the taking of private property is
in reality not public but private." Many cases are cited in support of that doctrine.
Later, in the same decision, we find the Supreme Court of Porto Rico says: "At any rate, the rule is
quite well settled that in the cases under consideration the determination of the necessity of taking

a particular piece or a certain amount of land rests ultimately with the courts." (Spring Valley etc.
Co. vs. San Mateo, etc. Co., 64 Cal., 123.) .
In the case of Board of Water Com'rs., etc. vs. Johnson (86 Conn., 571 [41 L. R. A., N. S., 1024]),
the Supreme Court of Connecticut approvingly quoted the following doctrine from Lewis on Eminent
Domain (3d ed.), section 599: "In all such cases the necessity of public utility of the proposed work
or improvement is a judicial question. In all such cases, where the authority is to take property
necessary for the purpose, the necessity of taking particular property for a particular purpose is a
judicial one, upon which the owner is entitled to be heard." (Riley vs.Charleston, etc. Co., 71 S. C.,
457, 489 [110 Am. St. Rep., 579]; Henderson vs. Lexington 132 Ky., 390, 403.)
The taking of private property for any use which is not required by the necessities or convenience of
the inhabitants of the state, is an unreasonable exercise of the right of eminent domain, and beyond
the power of the legislature to delegate. (Bennett vs. Marion, 106 Iowa, 628, 633;
Wilson vs. Pittsburg, etc. Co., 222 Pa. St., 541, 545; Greasy, etc. Co. vs. Ely, etc. Co., 132 Ky., 692,
697.)
In the case of New Central Coal Co. vs. George's etc. Co. (37 Md., 537, 564), the Supreme Court of
the State of Maryland, discussing the question before us, said: "To justify the exercise of this
extreme power (eminent domain) where the legislature has left it to depend upon the necessity that
may be found to exist, in order to accomplish the purpose of the incorporation, as in this case, the
party claiming the right to the exercise of the power should be required to show at least a reasonable
degree of necessity for its exercise. Any rule less strict than this, with the large and almost
indiscriminate delegation of the right to corporations, would likely lead to oppression and the
sacrifice of private right to corporate power."
In the case of Dewey vs. Chicago, etc. Co. (184 Ill., 426, 433), the court said: "Its right to condemn
property is not a general power of condemnation, but is limited to cases where a necessity for resort
to private property is shown to exist. Such necessity must appear upon the face of the petition to
condemn. If the necessary is denied the burden is upon the company (municipality) to establish it."
(Highland, etc. Co. vs. Strickley, 116 Fed., 852, 856; Kiney vs. Citizens' Water & Light Co., 173 Ind.,
252, 257 ; Bell vs. Mattoon Waterworks, etc. Co., 245 Ill., 544 [137 Am. St. Rep. 338].)
It is true that naby decisions may be found asserting that what is a public use is a legislative
question, and many other decisions declaring with equal emphasis that it is a judicial question. But,
as long as there is a constitutional or statutory provision denying the right to take land for any use
other than a public use, it occurs to us that the question whether any particular use is a public one or
not is ultimately, at least, a judicial question. The legislative may, it is true, in effect declare certain
uses to be public, and, under the operation of the well-known rule that a statute will not be declared
to be unconstitutional except in a case free, or comparatively free, from doubt, the courts will
certainly sustain the action of the legislature unless it appears that the particular use is clearly not of
a public nature. The decisions must be understood with this limitation; for, certainly, no court of last
resort will be willing to declare that any and every purpose which the legislative might happen to
designate as a public use shall be conclusively held to be so, irrespective of the purpose in question
and of its manifestly private character Blackstone in his Commentaries on the English Law remarks

that, so great is the regard of the law for private property that it will not authorize the least violation of
it, even for the public good, unless there exists a very great necessity therefor.
In the case of Wilkinson vs. Leland (2 Pet. [U.S.], 657), the Supreme Court of the United States said:
"That government can scarcely be deemed free where the rights of property are left solely defendant
on the legislative body, without restraint. The fundamental maxims of free government seem to
require that the rights of personal liberty and private property should be held sacred. At least no
court of justice in this country would be warranted in assuming that the power to violate and
disregard them a power so repugnant to the common principles of justice and civil liberty
lurked in any general grant of legislature authority, or ought to be implied from any general
expression of the people. The people ought no to be presumed to part with rights so vital to their
security and well-being without very strong and direct expression of such intention." (Lewis on
Eminent Domain, sec. 603; Lecoul vs. Police Jury 20 La. Ann., 308; Jefferson vs. Jazem, 7 La. Ann.,
182.)
Blackstone, in his Commentaries on the English Law said that the right to own and possess land
a place to live separate and apart from others to retain it as a home for the family in a way not to
be molested by others is one of the most sacred rights that men are heirs to. That right has been
written into the organic law of every civilized nation. The Acts of Congress of July 1, 1902, and of
August 29, 1916, which provide that "no law shall be enacted in the Philippine Islands which shall
deprive any person of his property without due process of law," are but a restatement of the timehonored protection of the absolute right of the individual to his property. Neither did said Acts of
Congress add anything to the law already existing in the Philippine Islands. The Spaniard fully
recognized the principle and adequately protected the inhabitants of the Philippine Islands against
the encroachment upon the private property of the individual. Article 349 of the Civil Code provides
that: "No one may be deprived of his property unless it be by competent authority, for some purpose
of proven public utility, and after payment of the proper compensation Unless this requisite (proven
public utility and payment) has been complied with, it shall be the duty of the courts to protect the
owner of such property in its possession or to restore its possession to him , as the case may be."
The exercise of the right of eminent domain, whether directly by the State, or by its authorized
agents, is necessarily in derogation of private rights, and the rule in that case is that the authority
must be strictly construed. No species of property is held by individuals with greater tenacity, and
none is guarded by the constitution and laws more sedulously, than the right to the freehold of
inhabitants. When the legislature interferes with that right, and, for greater public purposes,
appropriates the land of an individual without his consent, the plain meaning of the law should not be
enlarged by doubtly interpretation. (Bensely vs. Mountainlake Water Co., 13 Cal., 306 and cases
cited [73 Am. Dec., 576].)
The statutory power of taking property from the owner without his consent is one of the most delicate
exercise of government authority. It is to be watched with jealous scrutiny. Important as the power
may be to the government, the inviolable sanctity which all free constitutions attach to the right of
property of the citizens, constrains the strict observance of the substantial provisions of the law
which are prescribed as modes of the exercise of the power, and to protect it from abuse. Not only
must the authority of municipal corporations to take property be expressly conferred and the use for
which it is taken specified, but the power, with all constitutional limitation and directions for its

exercise, must be strictly pursued. (Dillon on Municipal Corporations [5th Ed.], sec. 1040, and cases
cited; Tenorio vs. Manila Railroad Co., 22 Phil., 411.)
It can scarcely be contended that a municipality would be permitted to take property for some public
use unless some public necessity existed therefor. The right to take private property for public use
originates in the necessity, and the taking must be limited by such necessity. The appellant contends
that inasmuch as the legislature has given it general authority to take private property for public use,
that the legislature has, therefore, settled the question of the necessity in every case and that the
courts are closed to the owners of the property upon that question. Can it be imagined, when the
legislature adopted section 2429 of Act No. 2711, that it thereby declared that it was necessary to
appropriate the property of Juan de la Cruz, whose property, perhaps, was not within the city limits at
the time the law was adopted? The legislature, then, not having declared the necessity, can it be
contemplated that it intended that a municipality should be the sole judge of the necessity in every
case, and that the courts, in the face of the provision that "if upon trial they shall find that a right
exists," cannot in that trial inquire into and hear proof upon the necessity for the appropriation in a
particular case?
The Charter of the city of Manila authorizes the taking of private property for public use. Suppose the
owner of the property denies and successfully proves that the taking of his property serves no public
use: Would the courts not be justified in inquiring into that question and in finally denying the petition
if no public purpose was proved? Can it be denied that the courts have a right to inquire into that
question? If the courts can ask questions and decide, upon an issue properly presented, whether the
use is public or not, is not that tantamount to permitting the courts to inquire into the necessity of the
appropriation? If there is no public use, then there is no necessity, and if there is no necessity, it is
difficult to understand how a public use can necessarily exist. If the courts can inquire into the
question whether a public use exists or not, then it seems that it must follow that they can examine
into the question of the necessity.
The very foundation of the right to exercise eminent domain is a genuine necessity, and that
necessity must be of a public character. The ascertainment of the necessity must precede or
accompany, and not follow, the taking of the land. (Morrison vs. Indianapolis, etc. Ry. Co., 166 Ind.,
511; Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72 Ohio St.,
368.)
The general power to exercise the right of eminent domain must not be confused with the right to
exercise it in aparticular case. The power of the legislature to confer, upon municipal corporations
and other entities within the State, general authority to exercise the right of eminent domain cannot
be questioned by the courts, but that general authority of municipalities or entities must not be
confused with the right to exercise it in particular instances. The moment the municipal corporation
or entity attempts to exercise the authority conferred, it must comply with the conditions
accompanying the authority. The necessity for conferring the authority upon a municipal corporation
to exercise the right of eminent domain is admittedly within the power of the legislature. But whether
or not the municipal corporation or entity is exercising the right in a particular case under the
conditions imposed by the general authority, is a question which the courts have the right to inquire
into.

The conflict in the authorities upon the question whether the necessity for the exercise of the right of
eminent domain is purely legislative and not judicial, arises generally in the wisdom and propriety of
the legislature in authorizing the exercise of the right of eminent domain instead of in the question of
the right to exercise it in a particular case. (Creston Waterworks Co. vs. McGrath, 89 Iowa, 502.)
By the weight of authorities, the courts have the power of restricting the exercise of eminent domain
to the actual reasonable necessities of the case and for the purposes designated by the law.
(Fairchild vs. City of St. Paul. 48 Minn., 540.)
And, moreover, the record does not show conclusively that the plaintiff has definitely decided that
their exists a necessity for the appropriation of the particular land described in the complaint.
Exhibits 4, 5, 7, and E clearly indicate that the municipal board believed at one time that other land
might be used for the proposed improvement, thereby avoiding the necessity of distributing the quiet
resting place of the dead.
Aside from insisting that there exists no necessity for the alleged improvements, the defendants
further contend that the street in question should not be opened through the cemetery. One of the
defendants alleges that said cemetery is public property. If that allegations is true, then, of course,
the city of Manila cannot appropriate it for public use. The city of Manila can only
expropriate private property.
It is a well known fact that cemeteries may be public or private. The former is a cemetery used by the
general community, or neighborhood, or church, while the latter is used only by a family, or a small
portion of the community or neighborhood. (11 C. J., 50.)
Where a cemetery is open to public, it is a public use and no part of the ground can be taken for
other public uses under a general authority. And this immunity extends to the unimproved and
unoccupied parts which are held in good faith for future use. (Lewis on Eminent Domain, sec. 434,
and cases cited.)
The cemetery in question seems to have been established under governmental authority. The
Spanish Governor-General, in an order creating the same, used the following language:
The cemetery and general hospital for indigent Chinese having been founded and
maintained by the spontaneous and fraternal contribution of their protector, merchants and
industrials, benefactors of mankind, in consideration of their services to the Government of
the Islands its internal administration, government and regime must necessarily be adjusted
to the taste and traditional practices of those born and educated in China in order that the
sentiments which animated the founders may be perpetually effectuated.
It is alleged, and not denied, that the cemetery in question may be used by the general community of
Chinese, which fact, in the general acceptation of the definition of a public cemetery, would make the
cemetery in question public property. If that is true, then, of course, the petition of the plaintiff must
be denied, for the reason that the city of Manila has no authority or right under the law to expropriate
public property.

But, whether or not the cemetery is public or private property, its appropriation for the uses of a
public street, especially during the lifetime of those specially interested in its maintenance as a
cemetery, should be a question of great concern, and its appropriation should not be made for such
purposes until it is fully established that the greatest necessity exists therefor.
While we do not contend that the dead must not give place to the living, and while it is a matter of
public knowledge that in the process of time sepulchres may become the seat of cities and
cemeteries traversed by streets and daily trod by the feet of millions of men, yet, nevertheless such
sacrifices and such uses of the places of the dead should not be made unless and until it is fully
established that there exists an eminent necessity therefor. While cemeteries and sepulchres and
the places of the burial of the dead are still within
the memory and command of the active care of the living; while they are still devoted to pious uses
and sacred regard, it is difficult to believe that even the legislature would adopt a law expressly
providing that such places, under such circumstances, should be violated.
In such an appropriation, what, we may ask, would be the measure of damages at law, for the
wounded sensibilities of the living, in having the graves of kindred and loved ones blotted out and
desecrated by a common highway or street for public travel? The impossibility of measuring the
damage and inadequacy of a remedy at law is too apparent to admit of argument. To disturb the
mortal remains of those endeared to us in life sometimes becomes the sad duty of the living; but,
except in cases of necessity, or for laudable purposes, the sanctity of the grave, the last resting
place of our friends, should be maintained, and the preventative aid of the courts should be invoked
for that object. (Railroad Company vs. Cemetery Co., 116 Tenn., 400; Evergreen Cemetery
Associationvs. The City of New Haven, 43 Conn., 234; Anderson vs. Acheson, 132 Iowa, 744;
Beatty vs. Kurtz, 2 Peters, 566.)
In the present case, even granting that a necessity exists for the opening of the street in question,
the record contains no proof of the necessity of opening the same through the cemetery. The record
shows that adjoining and adjacent lands have been offered to the city free of charge, which will
answer every purpose of the plaintiff.
For all of the foregoing, we are fully persuaded that the judgment of the lower court should be and is
hereby affirmed, with costs against the appellant. So ordered.
Arellano, C.J., Torres, Araullo and Avancea, JJ., concur.

Separate Opinions

MALCOLM, J., concurring:

The Government of the Philippine Islands is authorized by the Philippine Bill to acquire real estate
for public use by the exercise of the right of eminent domain. (Act of Congress of July 1, 1902, sec.
63.) A portion of this power has been delegated by the Philippine Legislature to the city of Manila,
which is permitted to "condemn private property for public use." (Administrative Code of 1917, sec.
2429.) The Code of Civil Procedure, in prescribing how the right of eminent domain may be
exercised, also limits the condemnation to "private property for public use." (Sec. 241.) As under the
facts actually presented, there can be no question that a public street constitutes a public use, the
only remaining question is whether or not the Chinese Cemetery and the other property here sought
to be taken by the exercise of the right of eminent domain is "private property."
As narrowing our inquiry still further, let it be noted that cemeteries are of two classes, public and
private. A public cemetery is one used by the general community, or neighborhood, or church; while
a private cemetery is one used only by a family, or small portion of a community. (Lay vs. State, 12
Ind. App., 362; Cemetery Association vs.Meninger [1875], 14 Kan., 312.) Our specific question, then,
is, whether the Chinese Cemetery in the city of Manila is a public, or a private graveyard. If it be
found to be the former, it is not subject to condemnation by the city of Manila; if it be found to be the
latter, it is subject to condemnation.
The Chinese Cemetery of Manila was established during the Spanish administration in the
Philippines by public spirited Chinese. The order of the Governor-General giving governmental
recognition to the cemetery reads as follows: "The cemetery and general hospital for indigent
Chinese having been founded and maintained by the spontaneous and fraternal contribution of their
protectors, merchants and industrials, benefactors of mankind, in consideration of their services to
the Government of the Islands, its internal administration, government and regime, must necessarily
be adjusted to the taste and traditional practices of those born and educated in China in order that
the sentiments which animated the founders may be perpetually effectuated." Sometimes after the
inauguration of the new regime in the Philippines, a corporation was organized to control the
cemetery, and a Torrens title for the lands in question was obtained.
From the time of its creation until the present the cemetery has been used by the Chinese
community for the burial of their dead. It is said that not less than four hundred graves, many of them
with handsome monuments, would be destroyed by the proposed street. This desecration is
attempted as to the las t resting places of the dead of a people who, because of their peculiar and
ingrained ancestral workship, retain more than the usual reverence for the departed. These facts
lead us straight to the conclusion that the Chinese Cemetery is not used by a family or a small
portion of a community but by a particular race long existing in the country and of considerable
numbers. The case, then, is one of where the city of Manila, under a general authority permitting it to
condemn private property for public use, is attempting to convert a property already dedicated to a
public use to an entirely different public use; and this, not directly pursuant to legislative authority, but
primarily through the sole advice of the consulting architect.
Two well considered decisions coming from the American state courts on almost identical facts are
worthy of our consideration. The first is the case of The Evergreen Cemetery Association vs. The
City of New Haven ([1875], 43 Conn., 234), of cited by other courts. Here the City of New Haven,

Connecticut, under the general power conferred upon it to lay out, construct, and maintain all
necessary highways within its limits, proceeded to widen and straighten one of its streets and in so
doing took a small piece of land belonging to the Evergreen Cemetery Association. This association
was incorporated under the general statute. The city had no special power to take any part of the
cemetery for such purposes. It was found that the land taken was needed for the purposes of the
cemetery and was not needed for the purpose of widening and straightening the avenue. The court
said that it is unquestionable that the Legislature has the power to authorize the taking of land
already applied to one public use and devote it to another. When the power is granted to municipal
or private corporations in express words, no question can arise. But, it was added, "The same land
cannot properly be used for burial lots and for a public highway at the same time. . . . Land therefore
applied to one use should not be taken for the other except in cases on necessity. . . . There is no
difficulty in effecting the desired improvement by taking land on the other side of the street. . . . The
idea of running a public street, regardless of graves, monuments, and the feelings of the living,
through one of our public cemeteries, would be shocking to the moral sense of the community, and
would not be tolerated except upon the direst necessity." It was then held that land already devoted
to a public use cannot be taken by the public for another use which is inconsistent with the first,
without special authority from the Legislature, or authority granted by necessary and reasonable
implication.
The second decision is that of Memphis State Line Railroad Company vs. Forest Hill Cemetery Co.
([1906], 116 Tenn., 400.) Here the purpose of the proceedings was to condemn a right of way for the
railway company through the Forest Hill Cemetery. The railroad proposed to run through the
southeast corner of the cemetery where no bodies were interred. The cemetery had been in use for
about eight years, and during this period thirteen hundred bodies had been buried therein. The
cemetery was under the control of a corporation which, by its character, held itself out as being
willing to sell lots to any one who applies therefor and pays the price demanded, except to members
of the Negro race.
1awph!l.net

It was found that there were two other routes along which the railroad might be located without
touching the cemetery, while the present line might be pursued without interfering with Forest Hill
Cemetery by making a curve around it. In the court below the railroad was granted the right of
condemnation through the cemetery and damages were assessed. On appeal, the certiorari applied
for was granted, and the supersedeas awarded. The court, in effect, found that the land of the
Cemetery Company was devoted to a public purpose, and that under the general language of the
Tennessee statute of eminent domain it could not be taken for another public purpose. The court
said that in process of time the sepulchres of the dead "are made the seats of cities, and are
traversed by streets, and daily trodden by the feet of man. This is inevitable in the course of ages.
But while these places are yet within the memory and under the active care of the living, while they
are still devoted to pious uses, they are sacred, and we cannot suppose that the legislature intended
that they should be violated, in the absence of special provisions upon the subject authorizing such
invasion, and indicating a method for the disinterment, removal, and reinterment of the bodies
buried, and directing how the expense thereof shall be borne." Two members of the court, delivering
a separate concurring opinion, concluded with this significant and eloquent sentence: "The wheels of
commerce must stop at the grave."

For the foregoing reasons, and for others which are stated in the principal decision, I am of the
opinion that the judgment of the lower court should be affirmed.
STREET, J., dissenting:
It may be admitted that, upon the evidence before us, the projected condemnation of the Chinese
Cemetery is unnecessary and perhaps ill-considered. Nevertheless I concur with Justice Moir in the
view that the authorities of the city of Manila are the proper judges of the propriety of the
condemnation and that this Court should have nothing to do with the question of the necessity of the
taking.
MOIR, J., dissenting:
I dissent from the majority opinion in this case, which has not yet been written, and because of the
importance of the question involved, present my dissent for the record.
This is an action by the city of Manila for the expropriation of land for an extension of Rizal Avenue
north. The petition for condemnation was opposed by the "Comunidad de Chinos de Manila" and
Ildefonso Tambunting and various other who obtained permission of the trial court to intervene in the
case.
All of the defendants allege in their opposition that the proposed extension of Rizal Avenue cuts
through a part of the Chinese Cemetery, North of Manila, and necessitates the destruction of many
monuments and the removal of many graves.
The Court of First Instance of Manila, Honorable S. del Rosario, judge after hearing the parties,
decided that there was no need for constructing the street as and where proposed by the city, and
dismissed the petition.
The plaintiff appealed and sets up the following errors:
1. The court erred in deciding that the determination of the necessity and convenience of the
expropriation of the lands of the defendants lies with the court and not with the Municipal
Board of the city of Manila.
2. The court erred in permitting the presentation of proofs over the objection and exception of
the plaintiff tending to demonstrate the lack of necessity of the projected street and the need
of the lands in question.
3. The court erred in declaring that the plaintiff had no right to expropriate the lands in
question.
4. The court erred in dismissing the complaint.
The right of the plaintiff to expropriate property for public use cannot be denied. The "right of eminent
domain is inherent in all sovereignties and therefore would exist without any constitutional

recognition . . . . The right of eminent domain antedates constitutions . . . . The right can only be
denied or restricted by fundamental law and is right inherent in society." (15 Cyc., pp. 557-8.) .
This general right was recognized in the Philippine Code of Civil Procedure effective October 1st,
1901, which prescribed the manner of exercising the right. (Sections 241 et seq.)
It was further recognized in the Organic Act of July 1st, 1902, which provides in section 74 "that the
Government of the Philippine Islands may grant franchises . . . including the authority to exercise the
right of eminent domain for the construction and operation of works of public utility and service, and
may authorize said works to be constructed and maintained over and across the public property of
the United States including . . . reservations." This provisions is repeated in the Jones Law of
August, 1916.
The legislature of the Islands conferred the right on the city of Manila. (Section 2429, Administrative
Code of 1917; section 2402, Administrative Code of 1916.)
Clearly having the right of expropriation, the city of Manila selected the line of its street and asked
the court by proper order to place the plaintiff in possession of the land described in the complaint,
and to appoint Commissioners to inspect the property, appraise the value, and assess the damages.
Instead of doing so, the court entered upon the question of the right of the city to take the property
and the necessity for the taking.
The court says:
The controversy relates to whether or not the Chinese Cemetery, where a great majority of
this race is buried and other persons belonging to other nationalities have been formerly
inhumed, is private or public; whether or not said cemetery, in case it is public, would be
susceptible to expropriation for the purpose of public improvements proposed by the city of
Manila; whether or not the latter is justified of the necessity and expediency of similar
expropriation before its right to the same would be upheld by the courts of justice; and
whether or not the appreciation of said necessity pertains to the legislative or the judicial
department before which the expropriation proceedings have been brought.
Relative to the first point, it is not necessary for the court to pass upon its consideration, in
view of the conclusion it has arrived at the appreciation of the other points connected with
each other.
From the testimony of two reputable engineers produced by some of the defendants, it
appears that the land chosen by the plaintiff for the extension of Rizal Avenue to the
municipality of Caloocan is not the best or the less expensive, although upon it there may be
constructed a straight road, without curves or winding; but that in order to construct said road
upon said land, the city of Manila would have to remove and transfer to other places about
four hundred graves and monuments, make some grubbings, undergo some leveling and
build some bridges the works thereon, together with the construction of the road and the
value of the lands expropriated, would mean an expenditure which will not be less than
P180,000.

Beside that considerable amount, the road would have a declivity of 3 per cent which, in
order to cover a distance of one kilometer, would require an energy equivalent to that which
would be expanded in covering a distance of two and one-half kilometers upon a level road.
On the other hand, if the road would be constructed with the deviation proposed by Ildefonso
Tambunting, one of the defendants, who even offered to donate gratuitously to the city of
Manila part of the land upon which said road will have to be constructed, the plaintiff entity
would be able to save more than hundreds of thousand of pesos, which can be invested in
other improvements of greater pressure and necessity for the benefit of the taxpayers; and it
will not have to employ more time and incur greater expenditures in the removal and transfer
of the remains buried in the land of the Chinese Community and of Sr. Tambunting, although
with the insignificant disadvantage that the road would be little longer by a still more
insignificant extension of 426 meters and 55 centimeters less than one-half kilometer,
according to the plan included in the records; but it would offer a better panorama to those
who would use it, and who would not have to traverse in their necessary or pleasure-making
trips or walks any cemetery which, on account of its nature, always deserves the respect of
the travellers. It should be observed that the proposed straight road over the cemetery, which
the city of Manila is proposing to expropriate, does not lead to any commercial, industrial, or
agricultural center, and if with said road it is endeavored to benefit some community or
created interest, the same object may be obtained by the proposed deviation of the road by
the defendants. The road traced by the plaintiffs has the disadvantage that the lands on both
sides thereof would not serve for residential purposes, for the reason that no one has the
pleasure to construct buildings upon cemeteries, unless it be in very overcrowded cities, so
exhausted of land that every inch thereof represents a dwelling house.
And it is against the ruling, that it lies with the court to determine the necessity of the proposed street
and not with the municipal board, that the appellant directs its first assignment of error.
It is a right of the city government to determine whether or not it will construct streets and where, and
the court's sole duty was to see that the value of the property was paid the owners after proper legal
proceedings ascertaining the value.
The law gives the city the right to take private property for public use. It is assumed it is unnecessary
to argue that a public road is a public use.
But it is argued that plaintiff must show that it is necessary to take this land for a public improvement.
The law does not so read, and it is believed that the great weight of authority, including the United
States Supreme Court, is against the contention.
The question of necessity is distinct from the question of public use, and former question is
exclusively for the legislature, except that if the constitution or statute authorizes the taking of
property only in cases of necessity, then the necessity becomes a judicial question.
(McQuillen Municipal Corporations, Vol. IV, pp. 3090-3091.)
In the absence of some constitutional or statutory provision to the contrary, the necessity and
expediency of exercising the right of eminent domain are questions essentially political and

not judicial in their character. The determination of those questions belongs to the sovereign
power; the legislative determination is final and conclusive, and the courts have no power to
review it. It rests with the legislature not only to determine when the power of eminent
domain may be exercised, but also the character, quality, method, and extent of such
exercise. And this power is unqualified, other than by the necessity of providing that
compensation shall be made. Nevertheless, under the express provisions of the constitution
of some states the question of necessity is made a judicial one, to be determined by the
courts and not by the legislature.
While the legislature may itself exercise the right of determining the necessity for the
exercise of the power of eminent domain, it may, unless prohibited by the constitution,
delegate this power to public officers or to private corporations established to carry on
enterprises in which the public are interested, and their determination that a necessity for the
exercise of the power exists is conclusive. There is no restraint upon the power except that
requiring compensation to be made. And when the power has been so delegated it is a
subject of legislative discretion to determine what prudential regulations shall be established
to secure a discreet and judicious exercise of the authority. It has been held that in the
absence of any statutory provision submitting the matter to a court or jury the decision of the
question of necessity lies with the body of individuals to whom the state has delegated the
authority to take, and the legislature may be express provision confer this power on a
corporation to whom the power of eminent domain is delegated unless prohibited by the
constitution. It is of course competent for the legislature to declare that the question shall be
a judicial one, in which case the court and not the corporation determines the question of
necessity. (15 Cyc., pp. 629-632.)
To the same effect is Lewis on Eminen Domain (3d Edition, section 597).
I quote from the notes to Vol. 5, Encyclopedia of United States Supreme Court Reports, p. 762, as
follows:
Neither can it be said that there is any fundamental right secured by the constitution of the
United States to have the questions of compensation and necessity both passed upon by
one and the same jury. In many states the question of necessity is never submitted to the
jury which passes upon the question of compensation. It is either settled affirmatively by the
legislature, or left to the judgment of the corporation invested with the right to take property
by condemnation. The question of necessity is not one of a judicial character, but rather one
for determination by the lawmaking branch of the government. (Boom Co. vs.Patterson, 98
U.S., 403, 406 [25 L. ed., 206]; United States vs. Jones, 109 U.S., 513 [27 L. ed., 1015];
Backus vs. Fort Street Union Depot Co., 169 U.S., 557, 568 [42 L. ed., 853].)
Speaking generally, it is for the state primarily and exclusively, to declare for what local public
purposes private property, within its limits may be taken upon compensation to the owner, as
well as to prescribe a mode in which it may be condemned and taken. (Madisonville Tract.
Co. vs. St. Bernard Min. Co., 196 U.S., 239, 252 [49 L. ed., 462].)

Courts have no power to control the legislative authority in the exercise of their right to
determine when it is necessary or expedient to condemn a specific piece of property for
public purposes. (Adirondack R. Co. vs.New York States, 176 U.S., 335 [44 L. ed., 492].)
10 R. C. L. (p. 183), states the law as follows:
158. Necessity for taking ordinarily not judicial question. The legislature, in providing for
the exercise the power of eminent domain, may directly determine the necessity for
appropriating private property for a particular improvement or public use, and it may select
the exact location of the improvement. In such a case, it is well settled that the utility of the
proposed improvement, the extent of the public necessity for its construction, the expediency
of constructing it, the suitableness of the location selected and the consequent necessity of
taking the land selected for its site, are all questions exclusively for the legislature to
determine, and the courts have no power to interfere, or to substitute their own views for
these of the representatives of the people. Similarly, when the legislature has delegated the
power of eminent domain to municipal or public service corporation or other tribunals or
bodies, and has given them discretion as to when the power is to be called into exercise and
to what extent, the court will not inquire into the necessity or propriety of the taking.
The United States Supreme Court recently said:
The uses to which this land are to be put are undeniably public uses. When that is the case
the propriety or expediency of the appropriation cannot be called in question by any other
authority. (Cinnati vs. S. & N. R. R. Co., 223 U.S., 390, quoting U.S. vs. Jones, 109, U.S.,
519.)
And in Sears vs. City of Akron (246 U.S., 242), decided March 4th, 1918, it said:
Plaintiff contends that the ordinance is void because the general statute which authorized the
appropriation violates both Article 1, paragraph 10, of the Federal Constitution, and the
Fourteenth Amendment, in that it authorizes the municipality to determine the necessity for
the taking of private property without the owners having an opportunity to be hear as to such
necessity; that in fact no necessity existed for any taking which would interfere with the
company's project; since the city might have taken water from the Little Cuyahoga or the
Tuscarawas rivers; and furthermore, that it has taken ten times as much water as it can
legitimately use. It is well settled that while the question whether the purpose of a taking is a
public one is judicial (Hairstonvs. Danville & W. R. Co., 208 U.S. 598 [52 L. ed., 637; 28 Sup.
Ct. Rep., 331; 13 Ann. Cas., 1008]), thenecessity and the proper extent of a taking is a
legislative question. (Shoemaker vs. United States, 147 U.S., 282, 298 [57 L. ed., 170, 184;
13 Supt. Ct. Rep., 361]; United States vs. Gettysburg Electric R. Co., 160 U.S. 668, 685 [40
L. ed., 576, 582; 16 Sup. Ct. Rep., 427]; United States vs. Chandler-Dunbar Water Power
Co., 229 U.S., 53, 65 [57 L. ed., 1063, 1076; 33 Sup. Ct. Rep., 667].)
I think the case should be decided in accordance with foregoing citations, but one other point has
been argued so extensively that it ought to be considered.

It is contended for the defense that this Chinese Cemetery is a public cemetery and that it cannot
therefore be taken for public use. In its answer the "Comunidad de Chinos de Manila" says it is "a
corporation organized and existing under and by virtue of the laws of the Philippine Islands," and that
it owns the land which plaintiff seeks to acquire. The facts that it is private corporation owning land
would seem of necessity to make the land it owns private land. The fact that it belongs to the
Chinese community deprives it of any public character.
But admitting that it is a public cemetery, although limited in its use to the Chinese Community of the
city of Manila, can it not be taken for public use? Must we let the reverence we feel for the dead and
the sanctity of their final resting-place obstruct the progress of the living? It will be instructive to
inquire what other jurisdictions have held on that point.
On the Application of Board of Street Openings of New York City to acquire St. Johns Cemetery (133
N.Y., 329) the court of appeal said:
. . . The board instituted this proceeding under the act to acquire for park purposes the title to
land below One Hundred and Fifty-fifth street known as St. John's cemetery which belonged
to a religious corporation in the city of New York, commonly called Trinity Church. It was
established as a cemetery as early as 1801, and used for that purpose until 1839, during
which time about ten thousand human bodies had been buried therein. In 1839 an ordinance
was passed by the city of New York forbidding interments south of Eighty-sixth street, and
since that time no interments have been made in the cemetery, but Trinity Church has
preserved and kept it in order and prevented any disturbance thereof.
It is contended on behalf of Trinity Church that under the general authority given by statute of
1887, this land which had been devoted to cemetery purposes could not be taken for a park.
The authority conferred upon the board by the act is broad and general. It is authorized to
take for park purposes any land south of One Hundred and Fifty-fifth street. . . . .
The fact that lands have previously been devoted to cemetery purposes does not place them
beyond the reach of the power of eminent domain. That is an absolute transcendent power
belonging to the sovereign which can be exercised for the public welfare whenever the
sovereign authority shall determine that a necessity for its exercise exists. By its existence
the homes and the dwellings of the living, and the resting-places of the dead may be alike
condemned.
It seems always to have been recognized in the laws of this state, that under the general
laws streets and highways could be laid out through cemeteries, in the absence of special
limitation or prohibition. . . .
In Re Opening of Twenty-second Street (102 Penn. State Reports, 108) the Supreme Court of the
State said:
This was an action for the opening of a street through a cemetery in the City of Philadelphia.
It was contended for the United American Mechanics and United Daughters of America
Cemetery Association that by an act of the legislature of the State approved March 20th,

1849, they were forever exempt from the taking of any their property for streets, roads or
alleys and this Act was formally accepted by the Cemetery Company on April 9th, 1849, and
there was, therefore, a contract between the Cemetery Company and the State of
Pennsylvania, which would be violated by the taking of any part of their property for street
purposes. It was further contended that there were 11,000 persons buried in the cemetery.
The court held that property and contracts of all kinds must yield to the demand of the
sovereign and that under the power of eminent domain all properties could be taken, and
that if there was a contract between the State of Pennsylvania and the Cemetery
Association, the contract itself could be taken for public use, and ordered the opening of the
street through the cemetery.
In Vol. 5, Encyclopedia of United States Supreme Court Reports (p. 759), it is said:
Although it has been held, that where a state has delegated the power of eminent domain to
a person or corporation and where by its exercise lands have been subject to a public use,
they cannot be applied to another public use without specific authority expressed or implied
to that effect, yet, the general rule seems to be that the fact that property is already devoted
to a public use, does not exempt it from being appropriated under the right of eminent
domain but it may be so taken for a use which is clearly superior or paramount to the one to
which it is already devoted. (Citing many United States Supreme Court decisions.)
A few cases have been cited where the courts refused to allow the opening of streets through
cemeteries, but in my opinion they are not as well considered as the cases and authorities relied
upon herein.
The holding of this court in this case reverses well settled principles of law of long standing and
almost universal acceptance.
The other assignments of error need not be considered as they are involved in the foregoing.
The decision should be reversed and the record returned to the Court of First Instance with
instructions to proceed with the case in accordance with this decision.

Republic vs. Vda. de Castellvi

GR L-20620, 15 August 1974

En Banc, Zaldivar (J): 7 concur, 4 took no part

FACTS:
1 July 1947 - Petitioner Republic of the Philippines (Philippine Air Force) occupied the land situated in
Floridablanca, Pampanga of Carmen M. vda. de Castellvi, the judicial administratrix of the estate of the late Alfonso
de Castellvi since by virtue of a contract of lease.

30 June 1956 - Before the expiration of the contract of lease, the Republic sought to renew the same but Castellvi
refused, intending to subdivide the lots for sale to the general public; filed civil case for ejectment of AFP.

26 June 1959 In view of the difficulty for the army to vacate the premises due to permanent installations and other
facilities, AFP filed expropriation proceedings and was placed in possession of the lands on 10 August 1959.

In its complaint, the Republic alleged, among other things, that the fair market value of the above-mentioned lands,
according to the Committee on Appraisal for the Province of Pampanga, was not more than P2,000 per hectare
(P.20/sqm), or a total market value of P259,669.10 when AFP first had the taking of the said property by virtue of
the special lease agreement. Respondents allege that their lands are residential with a fair market value of not less
than P15/sqm.

The trial court rendered its decision, finding that the unanimous recommendation of the commissioners of P10.00
per square meter for the 3 lots subject of the action is fair and just compensation

ISSUE:
1.

WON the taking of the properties under expropriation commenced with the filing of the action

2.

WON the P10/sqm is fair and just compensation.

HELD:
1.

The "taking" of Catellvi's property for purposes of eminent domain cannot be considered to have taken place in
1947 when the Republic commenced to occupy the property as lessee. Elements B & E were not present when
Republic entered the properties in 1947.

Elements/Requisites of taking of property for purposes of eminent domain:

A. Expropriator must enter a private property.
B. Entrance into private property must be for more than a momentary period.
C. Entry into the property should be under warrant or color of legal authority.
D. Property must be devoted to a public use or otherwise informally appropriated or injuriously affected.
E. Utilization of the property for public use must be in such a way as to oust the owner and deprive him of all
beneficial enjoyment of the property.

2.

Under Section 4 of Rule 67 of the Rules of Court, the just compensation is to be determined as of the date of
the filing of the complaint.

This Court has ruled that when the taking of the property sought to be expropriated coincides with the
commencement of the expropriation proceedings, or takes place subsequent to the filing of the complaint for
eminent domain, the just compensation should be determined as of the date of the filing of the complaint. Herein, it
is undisputed that the Republic was placed in possession of the Castellvi property, by authority of the court, on 10
August 1959.

The taking of the Castellvi property for the purposes of determining the just compensation to be paid should not
be paid based on 1947 fair market value amount.

Basic guidelines in determining the value of the land to be expropriated:

Same considerations are to be regarded as in a sale of property between private parties.

Estimated by reference to the use for which the property is suitable, having regard to the existing business or
wants of the community, or such as may be reasonably expected in the immediate future.

In expropriation proceedings, therefore, the owner of the land has the right to its value for the use for which it would
bring the most in the market.

We have arrived at the conclusion that the price of P10/sqm is quite high. The price of P5/sqm would be a fair
valuation and would constitute a just compensation. We considered the resolution of the Provincial Committee on
Appraisal of the province of Pampanga informing, that in the year 1959 the lands could be sold for from P2.50P4/sqm, and the Court arrived at a happy medium between the price as recommended by the commissioners and
approved by the court, and the price advocated by the Republic.

FIRST DIVISION

[G.R. No. 109338. November 20, 2000]

CAMARINES
NORTE
ELECTRIC
COOPERATIVE,
INC.
(CANORECO), petitioner, vs. COURT OF APPEALS, HON. LUIS L.
DICTADO, Presiding Judge, RTC, Branch 39, Daet, Camarines
Norte, EDUARDO R. MORENO, LT. COL. RUFINO CHAVEZ, CAPT.
ALFREDO BORJA, CONRAD C. LEVISTE and VINES REALTY
CORPORATION, respondents.
DECISION
PARDO, J.:
The acquisition of an easement of a right-of-way falls within the purview of the
power of eminent domain.
We have before the Court for consideration a petition for review on certiorari of the
decision of the Court of Appeals, and its resolution, which denied petitioners motion
for reconsideration.
[1]

[2]

[3]

The facts of the case, as found by the Court of Appeals, are as follows:
On May 18, 1989, Conrad L. Leviste filed with the Regional Trial Court, Daet,
Camarines Norte, a complaint for collection of a sum of money and foreclosure of
mortgage against Philippine Smelter Corporation (PSC).
[4]

For failure to file an answer to the complaint, the trial court declared PSC in default
and allowed plaintiff Leviste to present evidence ex-parte.
On November 23, 1989, the trial court rendered a decision, the dispositive portion of
which reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against

the defendant ordering the latter
1. to pay the plaintiff the sum of P1,798,750.00 with interest thereon at the
rate of 12% per annum from November, 1989 until the whole amount shall
have been fully paid;
2. to pay the plaintiff the sum of P11,500.00 as attorneys fees;
to pay the plaintiff the sum of P5,000.00 as expenses incidental to this
litigation; and
3. to pay the costs of this suit.

IT IS SO ORDERED.

[5]

When the decision became final and executory, the trial court issued a writ of
execution and respondent sheriff Eduardo R. Moreno levied upon two (2) parcels of
land covered TCT Nos. T-13505 and T-13514 issued by the Registrar of Deeds in the
name of PSC. On April 24, 1990, the parcels of land were sold at public auction in favor
of Vines Realty Corporation (Vines Realty). On April 25, 1990, the Clerk of Court, as exofficio Provincial Sheriff, issued a Certificate of Sale, which Judge Luis D. Dictado, in
his capacity as executive judge, approved.
[6]

On June 23, 1992, Vines Realty moved for the issuance of a writ of possession over
said property. On June 25, 1992, the trial court granted the motion.
[7]

On August 7, 1992, copy of the writ of possession was served on petitioner as

owner of the power lines standing on certain portions of the subject property. Later, on
August 12, 1992, Vines Realty filed an amended motion for an order of demolition and
removal of improvements on the subject land.
[8]

Among the improvements for removal were the power lines and electric posts
belonging to petitioner.
Petitioner opposed the motion on the ground, among other reasons, that petitioner
was not a party to the case and therefore not bound by the judgment of the trial court
and that it had subsisting right-of-way agreements over said property.
[9]

The trial court set the hearing on the amended motion on September 29, 1992 but
the hearing was re-scheduled on October 28, 1992, and then again on November 10,
1992. On all these dates, no hearing was conducted.
[10]

[11]

Then the case was re-raffled to Branch 39 of the regional trial court presided over
by respondent judge.
On November 27, 1992, the trial court set the hearing on the amended motion for
demolition. However,
instead
of
adducing
evidence
for
petitioner,
its
counsel manifested that he was withdrawing his appearance since the authority given
him by petitioner was only for the filing of the opposition to the amended motion. The
trial court proceeded with the hearing despite the fact that petitioner had no counsel
present. Thus, only Vines Realty presented its evidence.
[12]

[13]

On the same date, November 27, 1992, the trial court ordered the issuance of a writ
of demolition directing and deputizing Lt. Col. Rufino Chavez, Jr. and Capt. Alfredo
Borja to constitute an augmentation force for the immediate implementation of the writ.
[14]

On December 7, 1992, petitioner filed with the Court of Appeals a petition for
prohibition with restraining order and preliminary injunction. Petitioner argued that the
trial court acted without or in excess of its jurisdiction or with grave abuse of discretion
in issuing the order dated November 27. 1992.
[15]

On December 10, 1992, the Court of Appeals sent telegrams to respondents

informing them of the issuance of a restraining order. On the same day, however, the
trial court issued a writ of demolition. The court addressed the writ to sheriff Eduardo
[16]

de los Reyes, who was not a respondent in the petition before the Court of Appeals, so
that the latter can implement the writ on the pretext that he was not covered by the
restraining order.
[17]

On December 11, 1992, the trial court issued another order directing the National
Power Corporation sub-unit in Camarines Norte to shut off the power lines energizing
the New Lucena Oil Products Corporation, one of the consumers serviced by petitioner,
as shown by the radiogram of Simeon P. Zao III, OIC Labo, NPC. Mr. Zao filed a
manifestation with the trial court that if NPC would shut off said power supply before
the sub-station of petitioner, it would deprive Benguet Mining Corporation of electricity
and endanger the lives of its miners.
[18]

[19]

On the same day, December 11, 1992, respondent Vines Realty cut down
petitioners electric posts professedly using a chainsaw and resulting in a loud blast
affecting the area. Philippine National Police desk officer Bianito Cobacha of Barangay
Jose Panganiban Police Station entered in the police blotter that on December 11,
1992, at about 2 p.m., men led by the provincial sheriff felled petitioners electric posts
along the cemetery of Bagumbayan.
[20]

[21]

Even the members of the Sangguniang Bayan at San Jose appealed to respondent
Sheriff to desist from proceeding with the demolition due to a restraining order but to no
avail.
On January 4, 1993, Vines Realty filed with the trial court a motion for the issuance
of an alias writ of demolition. The hearing was scheduled on January 12, 1993, at 8:30
a. m. but petitioners lawyer, Atty. Jose Maacop, received a copy only on January 11,
1994.
[22]

Atty. Bienvenido A. Paita made a special appearance for petitioner through a

manifestation with motion for reconsideration dated January 21, 1993. Atty. Paita
declared it was impossible for him to appear and file an opposition to the motion on very
short notice. He said that petitioner was not a party to the case, that the restraining
order of the Court of Appeals was good until further orders, and the writ of execution
was executed on December 11, 1992. Petitioner manifested that it was denied its day
in court.
[23]

On January 25, 1993, the trial court denied the motion for reconsideration on the
ground that the appearance of Atty. Paita was irregular and that Atty. Maacop as the
counsel in the appellate court must first make an entry of appearance with the trial
court.
[24]

On January 26, 1993, the trial court issued an alias writ of demolition.

[25]

The sheriff, at the request of Vines Realty demolished the remaining electric posts
resulting in the cutting off of power supply to various business establishments and
barangays.
Meantime, on January 19, 1993, the Court of Appeals, promulgated a
decision dismissing the petition for lack of merit.
[26]

WHEREFORE, the present petition is DISMISSED for lack of merit.

Let it be stated that the temporary restraining order which was issued by this
Court on December 9, 1992 has a limited life of twenty (20) days from date of
issue (Carbungco vs. CA, 181 SCRA 313) and has therefore become void at
the expiration of the said twenty (20) days (Ilaw at Buklod ng Manggagawa vs.
NLRC, 198 SCRA 586).
SO ORDERED.
On February 19, 1993, petitioners new counsel, Gancayco Law Offices, filed with
the Court of Appeals an Urgent Appearance And Motion To Admit Supplemental
Petition. This was a new petition for certiorari and prohibition with prayer for issuance of
a writ of mandatory injunction.
[27]

[28]

On March 15, 1993, the Court of Appeals denied the motion for
reconsideration as well as the admission of the supplemental petition on the ground
that the petition had been decided.
[29]

Meanwhile, in response to the publics urgent basic need, petitioner re-constructed

its power lines along the provincial road leading to the Port of Osmea upon authority of
the District Engineer of the Department of Public Works and Highways [DPWH].
On April 23, 1993, however, petitioner received a letter dated April 10, 1993, stating
that Vines Realty was the owner of the roadside and that petitioner could not construct
power lines therein without its permission. Petitioner promptly replied that the power
lines were constructed within the right of way of the provincial road leading to the port of
Osmea as granted by the District Engineer of DPWH.
Hence, this petition.

[30]

At issue is whether petitioner is entitled to retain possession of the power lines

located in the land sold at public auction as a result of extra-judicial foreclosure of
mortgage.
The most basic tenet of due process is the right to be heard. A court denies a
party due process if it renders its orders without giving such party an opportunity to
present its evidence.
[31]

[32]

We find that petitioner was denied due process. Petitioner could have negated
private respondents claims by showing the absence of legal or factual basis therefor if
only the trial court in the exercise of justice and equity reset the hearing instead of
proceeding with the trial and issuing an order of demolition on the same day.
It is incumbent upon the trial court to receive evidence on petitioners right over the
property to be demolished.
The essence of due process is an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain ones side or an opportunity to
seek a reconsideration of the action or ruling complained of. Due process is equally
applicable in a case involving public utilities, where a strict application of the rules would
bring about catastrophic inconveniences to the public. Hence, the act would do more
[33]

harm than good to the public, which the government seeks to protect. Damages and
losses of a considerable amount of time (about 8 years) could have been prevented if
the trial court did not gravely abuse its discretion on the matter.
Well aware that the counsel was not authorized, the trial court could have stretched
its liberality a little to ensure that it would serve the ends of justice well for the people of
Camarines Norte. Petitioner must be given the chance to prove its position.
We cannot conceive how, knowing fully well that destroying the power lines and
electric posts would cause overwhelming losses to a lot of business establishments and
a great inconvenience to a lot of people, the trial court still ordered the demolition of the
property. Their personal motives aside, the Court finds that the trial court gravely
abused its discretion in hastily ordering the removal of the electric posts.
We are not a trier of facts. We cannot determine whether petitioners Agreements of
Right of Way or that of the authorization of the OIC District Engineer to construct
electric posts within the limits of the road right of way were genuine instruments. We
can, however, determine the legality of the acts of the trial court in issuing the writs of
demolition over the property.
[34]

[35]

The trial court failed to appreciate the nature of electric cooperatives as public
utilities.
Among the powers granted to electric cooperatives by virtue of Presidential Decree
No. 269 are:
[36]

Section 16 Powers(j) To construct, maintain and operate electric transmission and distribution
lines along, upon, under and across publicly owned lands and public
thoroughfares, including, without limitation, all roads, highways, streets, alleys,
bridges and causeways; Provided, that such shall not prevent or unduly impair
the primary public uses to which such lands and thoroughfares are otherwise
devoted;
(k) To exercise the power of eminent domain in the manner provided by law
for the exercise of such power by other corporations constructing or operating
electric generating plants and electric transmission and distribution lines or
systems.
Electric cooperatives, like CANORECO, are vested with the power of eminent
domain.
The acquisition of an easement of a right-of-way falls within the purview of the
power of eminent domain. Such conclusion finds support in easements of right-of-way
where the Supreme Court sustained the award of just compensation for private property
condemned for public use. The Supreme Court, in Republic vs. PLDT thus held
that:
[37]

[38]

"Normally, of course, the power of eminent domain results in the taking or

appropriation of title to, and possession of, the expropriated property; but no
cogent reason appears why said power may not be availed of to impose only
a burden upon the owner of condemned property, without loss of title and
possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right-of-way."
However, a simple right-of-way easement transmits no rights, except the easement.
Vines Realty retains full ownership and it is not totally deprived of the use of the
land. It can continue doing what it wants to do with the land, except those that would
result in contact with the wires.
[39]

The acquisition of this easement, nevertheless, is not gratis. Considering the nature
and effect of the installation power lines, the limitations on the use of the land for an
indefinite period deprives private respondents of its ordinary use. For these reasons,
Vines Realty is entitled to payment of just compensation, which must be neither more
nor less than the money equivalent of the property.
[40]

Just compensation has been understood to be the just and complete equivalent of
the loss, which the owner of the res expropriated has to suffer by reason of the
expropriation. The value of the land and its character at the time it was taken by the
Government are the criteria for determining just compensation. No matter how
commendable petitioners purpose is, it is just and equitable that Vines Realty be
compensated the fair and full equivalent for the taking of its property, which is the
measure of the indemnity, not whatever gain would accrue to the expropriating entity.
[41]

[42]

[43]

Moreover, CANORECO only sought the continuation of the exercise of its right-ofway easement and not ownership over the land. Public utilities power of eminent
domain may be exercised although title is not transferred to the expropriator.
[44]

Consequently, we rule that a courts writ of demolition can not prevail over the
easement of a right-of-way which falls within the power of eminent domain.
WHEREFORE, the petition is hereby GRANTED. The decision of the Court of
Appeals promulgated on January 19, 1993, and the resolution adopted on March 15,
1993, in CA-G. R. SP No. 29624, are SET ASIDE. The orders of the trial court dated
November 27, 1992, December 10, 1992, January 18, 1993, and January 25, 1993 and
the writs of demolition issued on December 11, 1992, and January 26, 1993, are
ANNULLED.
Private respondents are ordered to restore or restitute petitioners electric posts and
power lines or otherwise indemnify petitioner for the cost of the restoration
thereof. Finally, private respondents are permanently enjoined or prohibited from
disturbing or interfering with the operation and maintenance of the business of
petitioner.
Costs against private respondents.
SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur.

In CA-G.R. SP No. 29624, promulgated on January 19, 1993, Paras, J., ponente, Victor and Martin, Jr.,
JJ., concurring, Petition, Annex A, Rollo, pp. 41-46.
[1]

[2]

Adapted on March 15, 1993, Rollo, pp. 48-49.

[3]

Dated February 1, 1993, Rollo, pp. 119-121.

[4]

Petition, Annex C, Rollo, pp. 50-52.

[5]

Petition, Annex D, Rollo, pp, 53-56.

[6]

Petition, Annex E, Rollo, pp. 57-58.

[7]

Petition, Annex F, Rollo p. 59.

[8]

Petition, Annex G, Rollo, pp. 60-61.

[9]

Petition, Annex H, Rollo, p. 62.

[10]

Regional Trial Court, Camarines Norte, Branch 38, Judge Sancho Dames II, presiding.

Reply, Annex A, Rollo, pp. 307-308. Judge Sancho Dames II voluntarily inhibited himself from trying
the case and its incidents due to his receipt of CANORECOs Special Citation.
[11]

[12]

Regional Trial Court, Camarines Norte, Branch 39, respondent Judge Luis L. Dictado, presiding.

[13]

Atty. Bienvenido Paita.

[14]

Petition, Annex I, Rollo, p. 63.

[15]

Petition, Annex J, Rollo, pp. 64-76.

[16]

Petition, Annex L, Rollo, p. 82.

[17]

Sheriff IV, RTC Daet, Camarines Norte, Branch 39.

[18]

Petition, Annex L, Rollo, p. 84.

[19]

[20]

Petition, Annex O, Rollo, p. 85

Petition, Annex P, Affidavit of resident Winifredo D. Reyes, Rollo, p. 86.

Petition, Annex Q, Rollo, p. 87, Certification that Eng. Tomas Juego of CANORECO and Exequiel
Santos of New Lucena Oil Product Inc., reported the demolition.
[21]

[22]

Petition, Annex S, Rollo, p. 90.

[23]

Supplemental Petition, Annex N-1, CA Rollo, pp. 129-130.

[24]

Petition, Annex U, Rollo, p. 93.24

[25]

Petition, Annex V, Rollo, 94-96.

[26]

Rollo, pp. 42-46.

[27]

CA Rollo, pp. 94-95.

[28]

CA Rollo, pp. 97-119.

[29]

Rollo, pp. 48-49.

Petition filed on May 10, 1993, Rollo, pp. 7-39; On August 10, 1994, we gave due course to the
petition, Rollo, p. 334.
[30]

Moslares v. Court of Appeals, 291 SCRA 440 [1998]; Philippine

Corporation v. National Labor Relations Commission, 292 SCRA 266 [1998].
[31]

[32]

National

Construction

Philippine National Bank v. Sayo, Jr., 292 SCRA 202 [ 1998] .

Trinidad v. COMELEC, 315 SCRA 175 [1999]; Oil and Natural Gas Commission v. Court of Appeals,
293 SCRA 26 [1998].
[33]

[34]

Annexes C L to Reply, Rollo, pp. 310-328.

[35]

Dated May 26, 1993, Rollo, p. 331.

[36]

Which was done on August 6, 1973.

NAPOCOR v. Gutierrez, 193 SCRA 1, [1991], citing NAPOCOR v. Court of Appeals, 129 SCRA
665[1984]; Garcia v. Court of Appeals, 102 SCRA 597[1981].
[37]

[38]

136 Phil. 20 [1969].

[39]

NAPOCOR v. Gutierrez, supra.

Robern Development Corp. v. Quitain, 315 SCRA 150 [1999]; Republic v. Salem Investment, G. R. No.
137569, June 23, 2000.
[40]

[41]

Province of Tayabas v. Perez, 66 Phil. 467 [1938]; Manaay v. Juico, 175 SCRA 343 [1989].

[42]

NAPOCOR v. Court of Appeals, 129 SCRA 665, [1984].

[43]

EPZA v. Dulay, 149 SCRA 305 [1987]; Mun. of Daet v. Court of Appeals, 93 SCRA 503 [1979].

[44]

NAPOCOR v. Gutierrez, supra.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. L-60077 January 18, 1991

NATIONAL POWER CORPORATION, petitioner,
vs.

SPS. MISERICORDIA GUTIERREZ and RICARDO MALIT and THE HONORABLE COURT OF
APPEALS,respondents.
Pedro S. Dabu for private respondents.

BIDIN, J.:p
This is a petition for review on certiorari filed by the National Power Corporation (NPC) seeking the
reversal or modification of the March 9, 1986 Decision of the Court of Appeals in CA G.R. No.
54291-R entitled "National Power Corporation v. Sps. Misericordia Gutierrez and Ricardo Malit",
affirming the December 4, 1972 Decision of the then Court of First Instance of Pampanga, Fifth
Judicial District, Branch II, in Civil Case No. 2709, entitledNational Power Corporation v. Matias
Cruz, et al.
The undisputed facts of the case, as found by the Court of Appeals, are as follows:
Plaintiff National Power Corporation, a government owned and controlled entity, in
accordance with Commonwealth Act No. 120, is invested with the power of eminent
domain for the purpose of pursuing its objectives, which among others is the
construction, operation, and maintenance of electric transmission lines for distribution
throughout the Philippines. For the construction of its 230 KV Mexico-Limay
transmission lines, plaintiff's lines have to pass the lands belonging to defendants
Matias Cruz, Heirs of Natalia Paule and spouses Misericordia Gutierrez and Ricardo
Malit covered by tax declarations Nos. 907, 4281 and 7582, respectively.
Plaintiff initiated negotiations for the acquisition of right of way easements over the
aforementioned lots for the construction of its transmission lines but unsuccessful in
this regard, said corporation was constrained to file eminent domain proceedings
against the herein defendants on January 20, 1965.
Upon filing of the corresponding complaint, plaintiff corporation deposited the amount
of P973.00 with the Provincial Treasurer of Pampanga, tendered to cover the
provisional value of the land of the defendant spouses Ricardo Malit and Misericordia
Gutierrez. And by virtue of which, the plaintiff corporation was placed in possession
of the property of the defendant spouses so it could immediately proceed with the
construction of its Mexico-Limay 230 KV transmission line. In this connection, by the
trial court's order of September 30, 1965, the defendant spouses were authorized to
withdraw the fixed provisional value of their land in the sum of P973.00.
The only controversy existing between the parties litigants is the reasonableness and
adequacy of the disturbance or compensation fee of the expropriated properties.
Meanwhile, for the purpose of determining the fair and just compensation due the
defendants, the court appointed three commissioners, comprised of one

representative of the plaintiff, one for the defendants and the other from the court,
who then were empowered to receive evidence, conduct ocular inspection of the
premises, and thereafter, prepare their appraisals as to the fair and just
compensation to be paid to the owners of the lots. Hearings were consequently held
before said commissioners and during their hearings, the case of defendant Heirs of
Natalia Paule was amicably settled by virtue of a Right of Way Grant (Exh. C)
executed by Guadalupe Sangalang for herself and in behalf of her co-heirs in favor of
the plaintiff corporation. The case against Matias Cruz was earlier decided by the
court, thereby leaving only the case against the defendant spouses Ricardo Malit and
Misericordia Gutierrez still to be resolved. Accordingly, the commissioners submitted
their individual reports. The commissioner for the plaintiff corporation recommended
the following:
. . . that plaintiff be granted right of way easement over the 760
square meters of the defendants Malit and Gutierrez land for plaintiff
transmission line upon payment of an easement fee of P1.00
therefor. . . . (Annex M)
The commissioner for the defendant spouses recommended the following:
. . . that Mr. and Mrs. Ricardo Malit be paid as disturbance
compensation the amount of P10.00 sq. meter or the total amount of
P7,600.00' (Annex K)
The Court's commissioner recommended the following:
. . . the payment of Five (P 5.OO) Pesos per square meter of the area covered by the
Right-of-way to be granted, . . .(Annex L)
The plaintiff corporation urged the Court that the assessment as recommended by
their commissioner be the one adopted. Defendant spouses, however, dissented and
objected to the price recommended by both the representative of the court and of the
plaintiff corporation.
With these reports submitted by the three commissioners and on the evidence
adduced by the defendants as well as the plaintiff for the purpose of proving the fair
market value of the property sought to be expropriated, the lower court rendered a
decision the dispositive portion of which reads as follows:
WHEREFORE, responsive to the foregoing considerations, judgment
is hereby rendered ordering plaintiff National Power Corporation to
pay defendant spouses Ricardo Malit and Misericordia Gutierrez the
sum of P10.00 per square meter as the fair and reasonable
compensation for the right-of-way easement of the affected area,
which is 760 squares, or a total sum of P7,600.00 and P800.00 as
attorney's fees' (Record on Appeal, p. 83)

Dissatisfied with the decision, the plaintiff corporation filed a motion for
reconsideration which was favorably acted upon by the lower court, and in an order
dated June 10, 1973, it amended its previous decision in the following tenor:
On the basis of an ocular inspection made personally by the
undersigned, this court finally classified the land of the spouses
Ricardo Malit and Misericordia to be partly commercial and partly
agricultural, for which reason the amount of P10.00 per sq. meter
awarded in the decision of December 4,1972 is hereby reduced to
P5.00 per square meter as the fair and reasonable market value of
the 760 square meters belonging to the said spouses.
There being no claim and evidence for attorney's fees, the amount of
P800.00 awarded as attorney's fees, in the decision of December 4,
1972 is hereby reconsidered and set aside. (Annex S)
Still not satisfied, an appeal was filed by petitioner (NPC) with the Court of Appeals but respondent
Court of Appeals in its March 9, 1982, sustained the trial court, as follows:
WHEREFORE, finding no reversible error committed by the court a quo, the
appealed judgment is hereby affirmed with costs against the plaintiff-appellant.
Hence, the instant petition.
The First Division of this Court gave due course to the petition and required both parties to submit
their respective memoranda (Resolution of January 12, 1983). It also noted in an internal resolution
of August 17, 1983 that petitioner flied its memorandum while the respondents failed to file their
memorandum within the period which expired on February 24,1983; hence, the case was considered
submitted for decision.
The sole issue raised by petitioner is
WHETHER PETITIONER SHOULD BE MADE TO PAY SIMPLE EASEMENT FEE
OR FULL COMPENSATION FOR THE LAND TRAVERSED BY ITS TRANSMISSION
LINES.
It is the contention of petitioner that the Court of Appeals committed gross error by adjudging the
petitioner liable for the payment of the full market value of the land traversed by its transmission
lines, and that it overlooks the undeniable fact that a simple right-of-way easement (for the passage
of transmission lines) transmits no rights, except that of the easement. Full ownership is retained by
the private respondents and they are not totally deprived of the use of the land. They can continue
planting the same agricultural crops, except those that would result in contact with the wires. On this
premise, petitioner submits that if full market value is required, then full transfer of ownership is only
the logical equivalent.

The petition is devoid of merit. The resolution of this case hinges on the determination of whether the
acquisition of a mere right-of-way is an exercise of the power of eminent domain contemplated by
law.
The trial court's observation shared by the appellate court show that ". . . While it is true that plaintiff
are (sic) only after a right-of-way easement, it nevertheless perpetually deprives defendants of their
proprietary rights as manifested by the imposition by the plaintiff upon defendants that below said
transmission lines no plant higher than three (3) meters is allowed. Furthermore, because of the
high-tension current conveyed through said transmission lines, danger to life and limbs that may be
caused beneath said wires cannot altogether be discounted, and to cap it all plaintiff only pays the
fee to defendants once, while the latter shall continually pay the taxes due on said affected portion of
their property."
The foregoing facts considered, the acquisition of the right-of-way easement falls within the purview
of the power of eminent domain. Such conclusion finds support in similar cases of easement of rightof-way where the Supreme Court sustained the award of just compensation for private property
condemned for public use (See National Power Corporation vs. Court of Appeals, 129 SCRA 665,
1984; Garcia vs. Court of Appeals, 102 SCRA 597,1981). The Supreme Court, in Republic of the
Philippines vs. PLDT, * thus held that:
Normally, of course, the power of eminent domain results in the taking or
appropriation of title to, and possession of, the expropriated property; but no cogent
reason appears why said power may not be availed of to impose only a burden upon
the owner of condemned property, without loss of title and possession. It is
unquestionable that real property may, through expropriation, be subjected to an
easement of right-of-way.
In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent
domain. Considering the nature and effect of the installation of the 230 KV Mexico-Limay
transmission lines, the limitation imposed by NPC against the use of the land for an indefinite period
deprives private respondents of its ordinary use.
For these reasons, the owner of the property expropriated is entitled to a just compensation, which
should be neither more nor less, whenever it is possible to make the assessment, than the money
equivalent of said property. Just compensation has always been understood to be the just and
complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of
the expropriation (Province of Tayabas vs. Perez, 66 Phil. 467 [1938]; Assoc. of Small Land Owners
of the Phils., Inc. vs. Secretary of Agrarian Reform, G.R. No. 78742; Acuna vs. Arroyo, G.R. No.
79310; Pabrico vs. Juico, G.R. No. 79744; Manaay v. Juico, G.R. No. 79777,14 July 1989, 175
SCRA 343 [1989]). The price or value of the land and its character at the time it was taken by the
Government are the criteria for determining just compensation (National Power Corp. v. Court of
Appeals, 129 SCRA 665, [1984]). The above price refers to the market value of the land which may
be the full market value thereof. According to private respondents, the market value of their lot is
P50.00 per square meter because the said lot is adjacent to the National and super highways of
Gapan, Nueva Ecija and Olongapo City.

Private respondents recognize the inherent power of eminent domain being exercised by NPC when
it finally consented to the expropriation of the said portion of their land, subject however to payment
of just compensation. No matter how laudable NPC's purpose is, for which expropriation was sought,
it is just and equitable that they be compensated the fair and full equivalent for the loss sustained,
which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity
(EPZA v. Dulay, 149 SCRA 305 [1987]; Mun. of Daet v. Court of Appeals, 93 SCRA 503 (1979]).
It appearing that the trial court did not act capriciously and arbitrarily in setting the price of P5.00 per
square meter of the affected property, the said award is proper and not unreasonable.
On the issue of ownership being claimed by petitioner in the event that the price of P5.00 per square
meter be sustained, it is well settled that an issue which has not been raised in the Court a
quo cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair
play, justice and due process . . . (Filipino Merchants v. Court of Appeals, G.R. No. 85141, November
8, 1989, 179 SCRA 638; Commissioner of Internal Revenue v. Procter and Gamble Philippines
Manufacturing Corporation, 160 SCRA 560 [1988]; Commissioner of Internal Revenue v. Wander
Philippines, Inc., 160 SCRA 573 1988]). Petitioner only sought an easement of right-of-way, and as
earlier discussed, the power of eminent domain may be exercised although title was not transferred
to the expropriator.
WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Fernan, C.J. and Feliciano, J., concur.
Gutierrez, Jr., J., I concur but believe payment should be P10.00 a sq. meter at the very least.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-119694 May 22, 1995

PHILIPPINE PRESS INSTITUTE, INC., for and in behalf of 139 members, represented by its
President, Amado P. Macasaet and its Executive Director Ermin F. Garcia, Jr., petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.

RESOLUTION

FELICIANO, J.:
The Philippine Press Institute, Inc. ("PPI") is before this Court assailing the constitutional validity of
Resolution No. 2772 issued by respondent Commission on Elections ("Comelec") and its
corresponding Comelec directive dated 22 March 1995, through a Petition for Certiorari and
Prohibition. Petitioner PPI is a non-stock, non-profit organization of newspaper and magazine
publishers.
On 2 March 1995, Comelec promulgated Resolution No. 2772, which reads in part:
xxx xxx xxx
Sec. 2. Comelec Space. The Commission shall procure free print space of not
less than one half (1/2) page in at least one newspaper of general circulation in
every province or city for use as "Comelec Space" from March 6, 1995 in the case of
candidates for senator and from March 21, 1995 until May 12, 1995. In the absence
of said newspaper, "Comelec Space" shall be obtained from any magazine or
periodical of said province or city.
Sec. 3. Uses of Comelec Space. "Comelec Space" shall be allocated by the
Commission, free of charge, among all candidates within the area in which the
newspaper, magazine or periodical is circulated to enable the candidates to make
known their qualifications, their stand on public issues and their platforms and
programs of government.
"Comelec Space" shall also be used by the Commission for dissemination of vital
election information.
Sec. 4. Allocation of Comelec Space. (a) "Comelec Space" shall also be available
to all candidatesduring the periods stated in Section 2 hereof. Its allocation shall be
equal and impartial among all candidates for the same office. All candidates
concerned shall be furnished a copy of the allocation of "Comelec Space" for their
information, guidance and compliance.
(b) Any candidate desiring to avail himself of "Comelec Space" from newspapers or
publications based in the Metropolitan Manila Area shall submit an application
therefor, in writing, to the Committee on Mass Media of the Commission. Any
candidate desiring to avail himself of "Comelec Space" in newspapers or publications
based in the provinces shall submit his application therefor, in writing, to the
Provincial Election Supervisor concerned. Applications for availment of "Comelec
Space" maybe filed at any time from the date of effectivity of this Resolution.
(c) The Committee on Mass Media and the Provincial Election Supervisors
shall allocate available"Comelec Space" among the candidates concerned by
lottery of which said candidates shall be notified in advance, in writing, to be present
personally or by representative to witness the lottery at the date, time and place

specified in the notice. Any party objecting to the result of the lottery may appeal to
the Commission.
(d) The candidates concerned shall be notified by the Committee on Mass Media or
the Provincial Election Supervisor, as the case maybe, sufficiently in advance and in
writing of the date of issue and the newspaper or publication allocated to him, and
the time within which he must submit the written material for publication in the
"Comelec Space".
xxx xxx xxx
Sec. 8. Undue Reference to Candidates/Political Parties in Newspapers. No
newspaper or publication shall allow to be printed or published in the news, opinion,
features, or other sections of the newspaper or publication accounts or comments
which manifestly favor or oppose any candidate or political party by unduly or
repeatedly referring to or including therein said candidate or political party. However,
unless the facts and circumstances clearly indicate otherwise, the Commission will
respect the determination by the publisher and/or editors of the newspapers or
publications that the accounts or views published are significant, newsworthy and of
public interest. (Emphasis supplied)
Apparently in implementation of this Resolution, Comelec through Commissioner Regalado E.
Maambong sent identical letters, dated 22 March 1995, to various publishers of newspapers like
the Business World, the Philippine Star, the Malaya and the Philippine Times Journal, all members
of PPI. These letters read as follows:
This is to advise you that pursuant to Resolution No. 2772 of the Commission on
Elections, you aredirected to provide free print space of not less than one half (1/2)
page for use as "Comelec Space"or similar to the print support which you have
extended during the May 11, 1992 synchronized elections which was 2 full pages for
each political party fielding senatorial candidates, from March 6, 1995 to May 6,
1995, to make known their qualifications, their stand on public issues and their
platforms and programs of government.
We shall be informing the political parties and candidates to submit directly to
you their pictures, biographical data, stand on key public issues and platforms of
government either as raw data or in the form of positives or camera-ready materials.
Please be reminded that the political parties/candidates may be accommodated in
your publication any day upon receipt of their materials until May 6, 1995 which is the
last day for campaigning.
We trust you to extend your full support and cooperation in this regard. (Emphasis
supplied)
In this Petition for Certiorari and Prohibition with prayer for the issuance of a Temporary Restraining
Order, PPI asks us to declare Comelec Resolution No. 2772 unconstitutional and void on the ground
that it violates the prohibition imposed by the Constitution upon the government, and any of its
agencies, against the taking of private property for public use without just compensation. Petitioner
also contends that the 22 March 1995 letter directives of Comelec requiring publishers to give free
"Comelec Space" and at the same time process raw data to make it camera-ready, constitute
impositions of involuntary servitude, contrary to the provisions of Section 18 (2), Article III of the

1987 Constitution. Finally, PPI argues that Section 8 of Comelec Resolution No. 2772 is violative of
the constitutionally guaranteed freedom of speech, of the press and of expression. 1
On 20 April 1995, this Court issued a Temporary Restraining Order enjoining Comelec from
enforcing and implementing Section 2 of Resolution No. 2772, as well as the Comelec directives
addressed to various print media enterprises all dated 22 March 1995. The Court also required the
respondent to file a Comment on the Petition.
The Office of the Solicitor General filed its Comment on behalf of respondent Comelec alleging that
Comelec Resolution No. 2772 does not impose upon the publishers any obligation to provide free
print space in the newspapers as it does not provide any criminal or administrative sanction for noncompliance with that Resolution. According to the Solicitor General, the questioned Resolution
merely established guidelines to be followed in connection with the procurement of "Comelec
space," the procedure for and mode of allocation of such space to candidates and the conditions or
requirements for the candidate's utilization of the "Comelec space" procured. At the same time,
however, the Solicitor General argues that even if the questioned Resolution and its implementing
letter directives are viewed as mandatory, the same would nevertheless be valid as an exercise of
the police power of the State. The Solicitor General also maintains that Section 8 of Resolution No.
2772 is a permissible exercise of the power of supervision or regulation of the Comelec over the
communication and information operations of print media enterprises during the election period to
safeguard and ensure a fair, impartial and credible election. 2
At the oral hearing of this case held on 28 April 1995, respondent Comelec through its Chairman,
Hon. Bernardo Pardo, in response to inquiries from the Chief Justice and other Members of the
Court, stated that Resolution No. 2772, particularly Section 2 thereof and the 22 March 1995 letters
dispatched to various members of petitioner PPI, were not intended to compel those members to
supply Comelec with free print space. Chairman Pardo represented to the Court that Resolution and
the related letter-directives were merely designed to solicit from the publishers the same free print
space which many publishers had voluntarily given to Comelec during the election period relating to
the 11 May 1992 elections. Indeed, the Chairman stated that the Comelec would, that very
afternoon, meet and adopt an appropriate amending or clarifying resolution, a certified true copy of
which would forthwith be filed with the Court.
On 5 May 1995, the Court received from the Office of the Solicitor General a manifestation which
attached a copy of Comelec Resolution No. 2772-A dated 4 May 1995. The operative portion of this
Resolution follows:
NOW THEREFORE, pursuant to the powers vested in it by the Constitution, the
Omnibus Election Code, Republic Acts No. 6646 and 7166 and other election laws,
the Commission on Elections RESOLVED to clarify Sections 2 and 8 of Res. No.
2772 as follows:
1. Section 2 of Res. No. 2772 shall not be construed
to mean as requiring publishers of the different mass
media print publications to provide print space under
pain of prosecution, whether administrative, civil or
criminal, there being no sanction or penalty for
violation of said Section provided for either in said
Resolution or in Section 90 of Batas Pambansa Blg.
881, otherwise known as the Omnibus Election Code,
on the grant of "Comelec space."

2. Section 8 of Res. No. 2772 shall not be construed

to mean as constituting prior restraint on the part of
publishers with respect to the printing or publication of
materials in the news, opinion, features or other
sections of their respective publications or other
accounts or comments, it being clear from the last
sentence of said Section 8 that the Commission shall,
"unless the facts and circumstances clearly indicate
otherwise . . . respect the determination by the
publisher and/or editors of the newspapers or
publications that the accounts or views published are
significant, newsworthy and of public interest."
This Resolution shall take effect upon approval. (Emphasis in the original)
While, at this point, the Court could perhaps simply dismiss the Petition for Certiorari and Prohibition
as having become moot and academic, we consider it not inappropriate to pass upon the first
constitutional issue raised in this case. Our hope is to put this issue to rest and prevent its
resurrection.
Section 2 of Resolution No. 2772 is not a model of clarity in expression. Section 1 of Resolution No.
2772-A did not try to redraft Section 2; accordingly, Section 2 of Resolution No. 2772 persists in its
original form. Thus, we must point out that, as presently worded, and in particular as interpreted and
applied by the Comelec itself in its 22 March 1995 letter-directives to newspaper publishers, Section
2 of Resolution No. 2772 is clearly susceptible of the reading that petitioner PPI has given it. That
Resolution No. 2772 does not, in express terms, threaten publishers who would disregard it or its
implementing letters with some criminal or other sanction, does not by itself demonstrate that the
Comelec's original intention was simply to solicit or request voluntary donations of print space from
publishers. A written communication officially directing a print media company to supply free print
space, dispatched by a government (here a constitutional) agency and signed by a member of the
Commission presumably legally authorized to do so, is bound to produce a coercive effect upon the
company so addressed. That the agency may not be legally authorized to impose, or cause the
imposition of, criminal or other sanctions for disregard of such directions, only aggravates the
constitutional difficulties inhearing in the present situation. The enactment or addition of such
sanctions by the legislative authority itself would be open to serious constitutional objection.
To compel print media companies to donate "Comelec-space" of the dimensions specified in Section
2 of Resolution No. 2772 (not less than one-half page), amounts to "taking" of private personal
property for public use or purposes. Section 2 failed to specify the intended frequency of such
compulsory "donation:" only once during the period from 6 March 1995 (or 21 March 1995) until 12
May 1995? or everyday or once a week? or as often as Comelec may direct during the same
period? The extent of the taking or deprivation is not insubstantial; this is not a case of a de
minimis temporary limitation or restraint upon the use of private property. The monetary value of the
compulsory "donation," measured by the advertising rates ordinarily charged by newspaper
publishers whether in cities or in non-urban areas, may be very substantial indeed.
The taking of print space here sought to be effected may first be appraised under the rubric of
expropriation of private personal property for public use. The threshold requisites for a lawful taking
of private property for public use need to be examined here: one is the necessity for the taking;
another is the legal authority to effect the taking. The element of necessity for the taking has not
been shown by respondent Comelec. It has not been suggested that the members of PPI are
unwilling to sell print space at their normal rates to Comelec for election purposes. Indeed, the

unwillingness or reluctance of Comelec to buy print space lies at the heart of the problem. 3Similarly,
it has not been suggested, let alone demonstrated, that Comelec has been granted the power of eminent
domain either by the Constitution or by the legislative authority. A reasonable relationship between that
power and the enforcement and administration of election laws by Comelec must be shown; it is not
casually to be assumed.
That the taking is designed to subserve "public use" is not contested by petitioner PPI. We note only
that, under Section 3 of Resolution No. 2772, the free "Comelec space" sought by the respondent
Commission would be used not only for informing the public about the identities, qualifications and
programs of government of candidates for elective office but also for "dissemination of vital election
information" (including, presumably, circulars, regulations, notices, directives, etc. issued by
Comelec). It seems to the Court a matter of judicial notice that government offices and agencies
(including the Supreme Court) simply purchase print space, in the ordinary course of events, when
their rules and regulations, circulars, notices and so forth need officially to be brought to the attention
of the general public.
The taking of private property for public use is, of course, authorized by the Constitution, but not
without payment of "just compensation" (Article III, Section 9). And apparently the necessity of
paying compensation for "Comelec space" is precisely what is sought to be avoided by respondent
Commission, whether Section 2 of Resolution No. 2772 is read as petitioner PPI reads it, as an
assertion of authority to require newspaper publishers to "donate" free print space for Comelec
purposes, or as an exhortation, or perhaps an appeal, to publishers to donate free print space, as
Section 1 of Resolution No. 2772-A attempts to suggest. There is nothing at all to prevent
newspaper and magazine publishers from voluntarily giving free print space to Comelec for the
purposes contemplated in Resolution No. 2772. Section 2 of Resolution No. 2772 does not,
however, provide a constitutional basis for compelling publishers, against their will, in the kind of
factual context here present, to provide free print space for Comelec purposes. Section 2 does not
constitute a valid exercise of the power of eminent domain.
We would note that the ruling here laid down by the Court is entirely in line with the theory of
democratic representative government. The economic costs of informing the general public about
the qualifications and programs of those seeking elective office are most appropriately distributed as
widely as possible throughout our society by the utilization of public funds, especially funds raised by
taxation, rather than cast solely on one small sector of society, i.e., print media enterprises. The
benefits which flow from a heightened level of information on and the awareness of the electoral
process are commonly thought to be community-wide; the burdens should be allocated on the same
basis.
As earlier noted, the Solicitor General also contended that Section 2 of Resolution No. 2772, even if
read as compelling publishers to "donate" "Comelec space, " may be sustained as a valid exercise of
the police power of the state. This argument was, however, made too casually to require prolonged
consideration on our part. Firstly, there was no effort (and apparently no inclination on the part of
Comelec) to show that the police power essentially a power of legislation has been
constitutionally delegated to respondent Commission. 4 Secondly, while private property may indeed be
validly taken in the legitimate exercise of the police power of the state, there was no attempt to show
compliance in the instant case with the requisites of a lawful taking under the police power. 5
Section 2 of Resolution No. 2772 is a blunt and heavy instrument that purports, without a showing of
existence of a national emergency or other imperious public necessity, indiscriminately and without
regard to the individual business condition of particular newspapers or magazines located in differing
parts of the country, to take private property of newspaper or magazine publishers. No attempt was
made to demonstrate that a real and palpable or urgent necessity for the taking of print space
confronted the Comelec and that Section 2 of Resolution No. 2772 was itself the only reasonable

and calibrated response to such necessity available to the Comelec. Section 2 does not constitute a
valid exercise of the police power of the State.
We turn to Section 8 of Resolution No. 2772, which needs to be quoted in full again:
Sec. 8. Undue Reference to Candidates/Political Parties in Newspapers. No
newspaper or publication shall allow to be printed or published in the news, opinion,
features, or other sections of the newspaper or publication accounts or comments
which manifestly favor or oppose any candidate or political party by unduly or
repeatedly referring to or including therein said candidate or political party. However,
unless the facts and circumstances clearly indicate otherwise, the Commission will
respect the determination by the publisher and/or editors of the newspapers or
publications that the accounts or views published are significant, newsworthy and of
public interest.
It is not easy to understand why Section 8 was included at all in Resolution No. 2772. In any case,
Section 8 should be viewed in the context of our decision in National Press Club v. Commission on
Elections. 6 There the Court sustained the constitutionality of Section 11 (b) of R.A. No. 6646, known as
the Electoral Reforms Law of 1987, which prohibits the sale or donation of print space and airtime for
campaign or other political purposes, except to the Comelec. In doing so, the Court carefully distinguished
(a) paid political advertisements which are reached by the prohibition of Section 11 (b), from (b) the
reporting of news, commentaries and expressions of belief or opinion by reporters, broadcasters, editors,
commentators or columnists which fall outside the scope of Section 11 (b) and which are protected by the
constitutional guarantees of freedom of speech and of the press:
Secondly, and more importantly, Section 11 (b) is limited in its scope of application.
Analysis ofSection 11 (b) shows that it purports to apply only to the purchase and
sale, including purchase and sale disguised as a donation, of print space and air
time for campaign or other political purposes.Section 11 (b) does not purport in any
way to restrict the reporting by newspapers or radio ortelevision stations of news or
news-worthy events relating to candidates, their qualifications, political parties and
programs of government. Moreover, Section 11 (b) does not reach commentaries
and expressions of belief or opinion by reporters or broadcaster or editors or
commentators or columnists in respect of candidates, their qualifications, and
programs and so forth, so long at least as such comments, opinions and beliefs are
not in fact advertisements for particular candidates covertly paid for. In sum, Section
11 (b) is not to be read as reaching any report or commentary or other coverage that,
in responsible media, is not paid for by candidates for political office. We read
Section 11 (b) as designed to cover only paid political advertisements of particular
candidates.
The above limitation in scope of application of Section 11 (b) that it does not
restrict either the reporting of or the expression of belief or opinion or comment upon
the qualifications and programs and activities of any and all candidates for office
constitutes the critical distinction which must be made between the instant case and
that of Sanidad v. Commission on Elections. . . . 7 (Citations omitted; emphasis
supplied)
Section 8 of Resolution No. 2772 appears to represent the effort of the Comelec to establish a
guideline for implementation of the above-quoted distinction and doctrine in National Press Club an
effort not blessed with evident success. Section 2 of Resolution No. 2772-A while possibly helpful,
does not add substantially to the utility of Section 8 of Resolution No. 2772. The distinction between

paid political advertisements on the one hand and news reports, commentaries and expressions of
belief or opinion by reporters, broadcasters, editors, etc. on the other hand, can realistically be given
operative meaning only in actual cases or controversies, on a case-to-case basis, in terms of very
specific sets of facts.
At all events, the Court is bound to note that PPI has failed to allege any specific affirmative action
on the part of Comelec designed to enforce or implement Section 8. PPI has not claimed that it or
any of its members has sustained actual or imminent injury by reason of Comelec action under
Section 8. Put a little differently, the Court considers that the precise constitutional issue here sought
to be raised whether or not Section 8 of Resolution No. 2772 constitutes a permissible exercise of
the Comelec's power under Article IX, Section 4 of the Constitution to
supervise or regulate the enjoyment or utilization of all franchise or permits for the
operation of media of communication or information [for the purpose of
ensuring] equal opportunity, time and space, and the right of reply, including
reasonable, equal rates therefore, for public information campaigns and forums
among candidates in connection with the objective of holding free, orderly honest,
peaceful and credible elections
is not ripe for judicial review for lack of an actual case or controversy involving, as the very lis
mota thereof, the constitutionality of Section 8.
Summarizing our conclusions:
1. Section 2 of Resolution No. 2772, in its present form and as interpreted by Comelec in its 22
March 1995 letter directives, purports to require print media enterprises to "donate" free print space
to Comelec. As such, Section 2 suffers from a fatal constitutional vice and must be set aside and
nullified.
2. To the extent it pertains to Section 8 of Resolution No. 2772, the Petition for Certiorari and
Prohibition must be dismissed for lack of an actual, justiciable case or controversy.
WHEREFORE, for all the foregoing, the Petition for Certiorari and Prohibition is GRANTED in part
and Section 2 of Resolution No. 2772 in its present form and the related letter-directives dated 22
March 1995 are hereby SET ASIDE as null and void, and the Temporary Restraining Order is hereby
MADE PERMANENT. The Petition is DISMISSED in part, to the extent it relates to Section 8 of
Resolution No. 2772. No pronouncement as to costs.
Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan,
Mendoza and Francisco, JJ., concur.
Quiason, J., is on leave.

Footnotes
1 Petition, pp. 6-11; Rollo, pp. 7-12.
2 Comment, pp. 5-15; Rollo, pp. 70-80.

3 As I.A. Cruz, Constitutional Law, p. 59 (1991 ed.), citing Noble v. City of Manila, 67
Phil. 1 (1938), stressed:
[w]here private properties needed for conversion to some public use, the first thing
obviously that the government should do is to offer to buy it. If the owner is willing to
sell and the parties can agree on the price and the other conditions of the sale, a
voluntary transaction can then be concluded and the transfer effected without the
necessity of judicial action.
But if the owner of the private property is unwilling to part with it, or, being
willing, cannot agree to the conditions of the transfer, then it will be necessary for the
government to use its coercive authority. By its power of eminent domain, it can then,
upon payment of just compensation, forcibly acquire the needed property in order to
devote it to the intended public use. (Emphases supplied)
4 See, in this connection, Cruz, surpra note 3 at pp. 44-45. The police power may be
delegated by the legislative authority to local governments under the general welfare
clause (Section 16, R.A. No. 7160, "Local Government Code of 1991"), to the
President and administrative agencies. See alsoBinay v. Domingo, 201 SCRA 508
(1991); Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386
(1988); Villacosta v. Bernardo, 143 SCRA 480 (1986).
5 See National Development Company v. Philippine Veterans Bank, 192 SCRA 257
(1990); Association of Small Landowners in the Philippines, Inc. v. Secretary of
Agrarian Reform, 175 SCRA 343 (1989).
6 207 SCRA 1 (1992).
7 207 SCRA at 10-11.

Republic of the Philippines

SUPREME COURT
Baguio City
EN BANC

G.R. No. 132922 April 21, 1998

TELECOMMUNICATIONS AND BROADCAST ATTORNEYS OF THE PHILIPPINES, INC. and
GMA NETWORK, INC., petitioners,
vs.
THE COMMISSION ON ELECTIONS, respondent.

MENDOZA, J.:

In Osmea v. COMELEC, G.R. No. 132231, decided March 31, 1998, 1 we upheld the validity of 11(b) of R.A.
No. 6646 which prohibits the sale or donation of print space or air time for political ads, except to the Commission on Elections under 90, of
B.P. No. 881, the Omnibus Election Code, with respect to print media, and 92, with respect to broadcast media. In the present case, we
consider the validity of 92 of B.P. Blg. No. 881 against claims that the requirement that radio and television time be given free takes property
without due process of law; that it violates the eminent domain clause of the Constitution which provides for the payment of just
compensation; that it denies broadcast media the equal protection of the laws; and that, in any event, it violates the terms of the franchise of
petitioner GMA Network, Inc.

Petitioner Telecommunications and Broadcast Attorneys of the Philippines, Inc. is an organization of

lawyers of radio and television broadcasting companies. They are suing as citizens, taxpayers, and
registered voters. The other petitioner, GMA Network, Inc., operates radio and television
broadcasting stations throughout the Philippines under a franchise granted by Congress.
Petitioners challenge the validity of 92 on the ground (1) that it takes property without due process
of law and without just compensation; (2) that it denies radio and television broadcast companies the
equal protection of the laws; and (3) that it is in excess of the power given to the COMELEC to
supervise or regulate the operation of media of communication or information during the period of
election.
The Question of Standing
At the threshold of this suit is the question of standing of petitioner Telecommunications and
Broadcast Attorneys of the Philippines, Inc. (TELEBAP). As already noted, its members assert an
interest as lawyers of radio and television broadcasting companies and as citizens, taxpayers, and
registered voters.
In those cases 2 in which citizens were authorized to sue, this Court upheld their standing in view of the "transcendental importance" of
the constitutional question raised which justified the granting of relief. In contrast, in the case at bar, as will presently be shown, petitioner's
substantive claim is without merit. To the extent, therefore, that a party's standing is determined by the substantive merit of his case or
preliminary estimate thereof, petitioner TELEBAP must be held to be without standing. Indeed, a citizen will be allowed to raise a
constitutional question only when he can show that he has personally suffered some actual or threatened injury as a result of the allegedly
illegal conduct of the government; the injury fairly is fairly traceable to the challenged action; and the injury is likely to be redressed by a
favorable action. 3 Members of petitioner have not shown that they have suffered harm as a result of the operation of 92 of B.P. Blg. 881.

Nor do members of petitioner TELEBAP have an interest as registered voters since this case does
not concern their right of suffrage. Their interest in 92 of B.P. Blg. 881 should be precisely in
upholding its validity.
Much less do they have an interest as taxpayers since this case does not involve the exercise by
Congress of its taxing or spending power. 4 A party suing as a taxpayer must specifically show that he has a sufficient
interest in preventing the illegal expenditure of money raised by taxation and that he will sustain a direct injury as a result of the enforcement
of the questioned statute.

Nor indeed as a corporate entity does TELEBAP have standing to assert the rights of radio and
television broadcasting companies. Standing jus tertii will be recognized only if it can be shown that
the party suing has some substantial relation to the third party, or that the third party cannot assert
his constitutional right, or that the eight of the third party will be diluted unless the party in court is
allowed to espouse the third party's constitutional claim. None of these circumstances is here
present. The mere fact that TELEBAP is composed of lawyers in the broadcast industry does not
entitle them to bring this suit in their name as representatives of the affected companies.
Nevertheless, we have decided to take this case since the other petitioner, GMA Network, Inc.,
appears to have the requisite standing to bring this constitutional challenge. Petitioner operates radio
and television broadcast stations in the Philippines affected by the enforcement of 92 of B.P. Blg.

881 requiring radio and television broadcast companies to provide free air time to the COMELEC for
the use of candidates for campaign and other political purposes.
Petitioner claims that it suffered losses running to several million pesos in providing COMELEC Time
in connection with the 1992 presidential election and the 1995 senatorial election and that it stands
to suffer even more should it be required to do so again this year. Petitioner's allegation that it will
suffer losses again because it is required to provide free air time is sufficient to give it standing to
question the validity of 92. 5
Airing of COMELEC Time, a
Reasonable Condition for
Grant of Petitioner's
Franchise
As pointed out in our decision in Osmea v. COMELEC, 11(b) of R.A. No. 6646 and 90 and 92 of the B.P. Blg. 881 are part and parcel of
a regulatory scheme designed to equalize the opportunity of candidates in an election in regard to the use of mass media for political
campaigns. These statutory provisions state in relevant parts:

R.A. No. 6646

Sec. 11. Prohibited Forms of Election Propaganda. In addition to the forms of election
propaganda prohibited under Section 85 of Batas Pambansa Blg. 881, it shall be unlawful:
xxx xxx xxx
(b) for any newspapers, radio broadcasting or television station, or other mass media, or any
person making use of the mass media to sell or to give free of charge print space or air time
for campaign or other political purposes except to the Commission as provided under
Section 90 and 92 of Batas Pambansa Blg. 881. Any mass media columnist, commentator,
announcer or personality who is a candidate for any elective public office shall take a leave
of absence from his work as such during the campaign period.
B.P. Blg. 881, (Omnibus Election Code)
Sec. 90. Comelec space. The Commission shall procure space in at least one newspaper
of general circulation in every province or city; Provided, however, That in the absence of
said newspaper, publication shall be done in any other magazine or periodical in said
province or city, which shall be known as "Comelec Space" wherein candidates can
announce their candidacy. Said space shall be allocated, free of charge, equally and
impartially by the Commission among all candidates within the area in which the newspaper
is circulated. (Sec. 45, 1978 EC).
Sec. 92. Comelec time. The commission shall procure radio and television time to be
known as "Comelec Time" which shall be allocated equally and impartially among the
candidates within the area of coverage of all radio and television stations. For this purpose,
the franchise of all radio broadcasting and television stations are hereby amended so as to
provide radio or television time, free of charge, during the period of the campaign. (Sec. 46,
1978 EC)

Thus, the law prohibits mass media from selling or donating print space and air time to the
candidates and requires the COMELEC instead to procure print space and air time for allocation to
the candidates. It will be noted that while 90 of B.P. Blg. 881 requires the COMELEC to procure
print space which, as we have held, should be paid for, 92 states that air time shall be procured by
the COMELEC free of charge.
Petitioners contend that 92 of BP Blg. 881 violates the due process clause 6 and the eminent domain
provision 7 of the Constitution by taking air time from radio and television broadcasting stations without payment of just compensation.
Petitioners claim that the primary source of revenue of the radio and television stations is the sale of air time to advertisers and that to
require these stations to provide free air time is to authorize a taking which is not "a de minimis temporary limitation or restraint upon the use
of private property." According to petitioners, in 1992, the GMA Network, Inc. lost P22,498,560.00 in providing free air time of one (1) hour
every morning from Mondays to Fridays and one (1) hour on Tuesdays and Thursday from 7:00 to 8:00 p.m. (prime time) and, in this year's
elections, it stands to lose P58,980,850.00 in view of COMELEC'S requirement that radio and television stations provide at least 30 minutes
of prime time daily for the COMELEC Time. 8

Petitioners' argument is without merit, All broadcasting, whether by radio or by television stations, is
licensed by the government. Airwave frequencies have to be allocated as there are more individuals
who want to broadcast than there are frequencies to assign. 9 A franchise is thus a privilege subject, among other
things, to amended by Congress in accordance with the constitutional provision that "any such franchise or right granted . . . shall be subject
to amendment, alteration or repeal by the Congress when the common good so requires." 10

The idea that broadcast stations may be required to provide COMELEC Time free of charge is not
new. It goes back to the Election Code of 1971 (R.A. No. 6388), which provided:
Sec. 49. Regulation of election propaganda through mass media. (a) The franchise of all
radio broadcasting and television stations are hereby amended so as to require each such
station to furnish free of charge, upon request of the Commission [on Elections], during the
period of sixty days before the election not more than fifteen minutes of prime time once a
week which shall be known as "Comelec Time" and which shall be used exclusively by the
Commission to disseminate vital election information. Said "Comelec Time" shall be
considered as part of the public service time said stations are required to furnish the
Government for the dissemination of public information and education under their respective
franchises or permits.
The provision was carried over with slight modification by the 1978 Election Code (P.D. No. 1296),
which provided:
Sec. 46. COMELEC Time. The Commission [on Elections] shall procure radio and
television time to be known as "COMELEC Time" which shall be allocated equally and
impartially among the candidates within the area of coverage of said radio and television
stations. For this purpose, the franchises of all radio broadcasting and television stations are
hereby amended so as to require such stations to furnish the Commission radio or television
time, free of charge, during the period of the campaign, at least once but not oftener than
every other day.
Substantially the same provision is now embodied in 92 of B.P. Blg. 881.
Indeed, provisions for COMELEC Tima have been made by amendment of the franchises of radio
and television broadcast stations and, until the present case was brought, such provisions had not
been thought of as taking property without just compensation. Art. XII, 11 of the Constitution
authorizes the amendment of franchises for "the common good." What better measure can be
conceived for the common good than one for free air time for the benefit not only of candidates but
even more of the public, particularly the voters, so that they will be fully informed of the issues in an

election? "[I]t is the right of the viewers and listeners, not the right of the broadcasters, which is
paramount." 11
Nor indeed can there be any constitutional objection to the requirement that broadcast stations give
free air time. Even in the United States, there are responsible scholars who believe that government
controls on broadcast media can constitutionally be instituted to ensure diversity of views and
attention to public affairs to further the system of free expression. For this purpose, broadcast
stations may be required to give free air time to candidates in an election. 12 Thus, Professor Cass R. Sunstein
of the University of Chicago Law School, in urging reforms in regulations affecting the broadcast industry, writes:

Elections. We could do a lot to improve coverage of electoral campaigns. Most important,

government should ensure free media time for candidates. Almost all European nations
make such provisions; the United States does not. Perhaps government should pay for such
time on its own. Perhaps broadcasters should have to offer it as a condition for receiving a
license. Perhaps a commitment to provide free time would count in favor of the grant of a
license in the first instance. Steps of this sort would simultaneously promote attention to
public affairs and greater diversity of view. They would also help overcome the distorting
effects of "soundbites" and the corrosive financial pressures faced by candidates in seeking
time on the media. 13
In truth, radio and television broadcasting companies, which are given franchises, do not own the
airwaves and frequencies through which they transmit broadcast signals and images. They are
merely given the temporary privilege of using them. Since a franchise is a mere privilege, the
exercise of the privilege may reasonably be burdened with the performance by the grantee of some
form of public service. Thus, in De Villata v. Stanley, 14 a regulation requiring interisland vessels licensed to engage in
the interisland trade to carry mail and, for this purpose, to give advance notice to postal authorities of date and hour of sailings of vessels and
of changes of sailing hours to enable them to tender mail for transportation at the last practicable hour prior to the vessel's departure, was
held to be a reasonable condition for the state grant of license. Although the question of compensation for the carriage of mail was not in
issue, the Court strongly implied that such service could be without compensation, as in fact under Spanish sovereignty the mail was carried
free. 15

In Philippine Long Distance Telephone Company v. NTC, 16 the Court ordered the PLDT to allow the interconnection
of its domestic telephone system with the international gateway facility of Eastern Telecom. The Court cited (1) the provisions of the
legislative franchise allowing such interconnection; (2) the absence of any physical, technical, or economic basis for restricting the linking up
of two separate telephone systems; and (3) the possibility of increase in the volume of international traffic and more efficient service, at more
moderate cost, as a result of interconnection.

Similarly, in the earlier case of PLDT v. NTC, 17 it was held:

Such regulation of the use and ownership of telecommunications systems is in the exercise
of the plenary police power of the State for the promotion of the general welfare. The 1987
Constitution recognizes the existence of that power when it provides:
Sec. 6. The use of property bears a social function, and all economic agents
shall contribute to the common good. Individuals and private groups,
including corporations, cooperatives, and similar collective organizations,
shall have the right to own, establish, and operate economic enterprises,
subject to the duty of the State to promote distributive justice and to intervene
when the common good so demands (Article XII).
The interconnection which has been required of PLDT is a form of "intervention" with
property rights dictated by "the objective of government to promote the rapid expansion of
telecommunications services in all areas of the Philippines, . . . to maximize the use of
telecommunications facilities available, . . . in recognition of the vital role of communications
in nation building . . . and to ensure that all users of the public telecommunications service

have access to all other users of the service wherever they may be within the Philippines at
an acceptable standard of service and at reasonable cost" (DOTC Circular No. 90-248).
Undoubtedly, the encompassing objective is the common good. The NTC, as the regulatory
agency of the State, merely exercised its delegated authority to regulate the use of
telecommunications networks when it decreed interconnection.
In the granting of the privilege to operate broadcast stations and thereafter supervising radio and
television stations, the state spends considerable public funds in licensing and supervising such
stations. 18 It would be strange if it cannot even require the licensees to render public service by giving free air time.
Considerable effort is made in the dissent of Mr. Justice Panganiban to show that the production of
television programs involves large expenditure and requires the use of equipment for which huge
investments have to be made. The dissent cites the claim of GMA Network that the grant of free air
time to the COMELEC for the duration of the 1998 campaign period would cost the company
P52,380,000, representing revenue it would otherwise earn if the air time were sold to advertisers,
and the amount of P6,600,850, representing the cost of producing a program for the COMELEC
Time, or the total amount of P58,980,850.
The claim that petitioner would be losing P52,380,000 in unrealized revenue from advertising is
based on the assumption that air time is "finished product" which, it is said, become the property of
the company, like oil produced from refining or similar natural resources after undergoing a process
for their production. But air time is not owned by broadcast companies. As held in Red Lion
Broadcasting Co. v. F.C.C., 19 which upheld the right of a party personally attacked to reply, "licenses to broadcast do not confer
ownership of designated frequencies, but only the temporary privilege of using them." Consequently, "a license permits broadcasting, but the
license has no constitutional right to be the one who holds the license or to monopolize a radio frequency to the exclusion of his fellow
citizens. There is nothing in the First Amendment which prevents the Government from requiring a licensee to share his frequency with
others and to conduct himself as a proxy or fiduciary with obligations to present those views and voices which are representative of his
community and which would otherwise, by necessity, be barred from the airwaves." 20 As radio and television broadcast stations do not own
the airwaves, no private property is taken by the requirement that they provide air time to the COMELEC.

Justice Panganiban's dissent quotes from Tolentino on the Civil Code which says that "the air lanes
themselves 'are not property because they cannot be appropriated for the benefit of any individual.'"
(p. 5) That means neither the State nor the stations own the air lanes. Yet the dissent also says that
"The franchise holders can recover their huge investments only by selling air time to advertisers." (p.
13) If air lanes cannot be appropriated, how can they be used to produce air time which the
franchise holders can sell to recover their investment? There is a contradiction here.
As to the additional amount of P6,600,850, it is claimed that this is the cost of producing a program
and it is for such items as "sets and props," "video tapes," "miscellaneous (other rental, supplies,
transportation, etc.)," and "technical facilities (technical crew such as director and cameraman as
well as 'on air plugs')." There is no basis for this claim. Expenses for these items will be for the
account of the candidates. COMELEC Resolution No. 2983, 6(d) specifically provides in this
connection:
(d) Additional services such as tape-recording or video-taping of programs, the preparation
of visual aids, terms and condition thereof, and consideration to be paid therefor may be
arranged by the candidates with the radio/television station concerned. However, no
radio/television station shall make any discrimination among candidates relative to charges,
terms, practices or facilities for in connection with the services rendered.
It is unfortunate that in the effort to show that there is taking of private property worth millions of
pesos, the unsubstantiated charge is made that by its decision the Court permits the "grand larceny
of precious time," and allows itself to become "the people's unwitting oppressor." The charge is really
unfortunate. In Jackson v.Rosenbaun, 21 Justice Holmes was so incensed by the resistance of property owners to the erection

of party walls that he was led to say in his original draft, "a statute, which embodies the community's understanding of the reciprocal rights
and duties of neighboring landowners, does not need to invoke the penalty larceny of the police power in its justification." Holmes's brethren
corrected his taste, and Holmes had to amend the passage so that in the end it spoke only of invoking "the police power." 22 Justice Holmes
spoke of the "petty larceny" of the police power. Now we are being told of the "grand larceny [by means of the police power] of precious air
time."

Giving Free Air Time a Duty

Assumed by Petitioner
Petitioners claim that 92 is an invalid amendment of R.A. No. 7252 which granted GMA Network,
Inc. a franchise for the operation of radio and television broadcasting stations. They argue that
although 5 of R.A. No. 7252 gives the government the power to temporarily use and operate the
stations of petitioner GMA Network or to authorize such use and operation, the exercise of this right
must be compensated.
The cited provision of. R.A. No. 7252 states:
Sec. 5. Right of Government. A special right is hereby reserved to the President of the
Philippines, in times of rebellion, public peril, calamity, emergency, disaster or disturbance of
peace and order, to temporarily take over and operate the stations of the grantee, to
temporarily suspend the operation of any station in the interest of public safety, security and
public welfare, or to authorize the temporary use and operation thereof by any agency of the
Government, upon due compensation to the grantee, for the use of said stations during the
period when they shall be so operated.
The basic flaw in petitioner's argument is that it assumes that the provision for COMELEC Time
constitutes the use and operation of the stations of the GMA Network, Inc., This is not so. Under 92
of B.P. Blg. 881, the COMELEC does not take over the operation of radio and television stations but
only the allocation of air time to the candidates for the purpose of ensuring, among other things,
equal opportunity, time, and the right to reply as mandated by the Constitution. 23
Indeed, it is wrong to claim an amendment of petitioner's franchise for the reason that B.P. Blg. 881,
which is said to have amended R.A. No. 7252, actually antedated it. 24 The provision of 92 of B.P. Blg. 881 must
be deemed instead to be incorporated in R.A. No. 7252. And, indeed, 4 of the latter statute does.

For the fact is that the duty imposed on the GMA Network, Inc. by its franchise to render "adequate
public service time" implements 92 of B.P. Blg. 881. Undoubtedly, its purpose is to enable the
government to communicate with the people on matters of public interest. Thus, R.A. No. 7252
provides:
Sec. 4. Responsibility to the Public. The grantee shall provide adequate public service
time to enable the Government, through the said broadcasting stations, to reach the
population on important public issues; provide at all times sound and balanced programming;
promote public participation such as in community programming; assist in the functions of
public information and education; conform to the ethics of honest enterprise; and not use its
station for the broadcasting of obscene and indecent language, speech, act or scene, or for
the dissemination of deliberately false information or willful misrepresentation, or to the
detriment of the public interest, or to incite, encourage, or assist in subversive or treasonable
acts. (Emphasis added).
It is noteworthy that 40 of R.A. No. 6388, from which 92 of B.P. Blg. 881 was taken, expressly
provided that the COMELEC Time should "be considered as part of the public service time said

stations are required to furnish the Government for the dissemination of public information and
education under their respective franchises or permits." There is no reason to suppose that 92 of
B.P. Blg. 881 considers the COMELEC Time therein provided to be otherwise than as a public
service which petitioner is required to render under 4 of its charter (R.A. No. 7252). In sum, B.P.
Blg. 881, 92 is not an invalid amendment of petitioner's franchise but the enforcement of a duty
voluntarily assumed by petitioner in accepting a public grant of privilege.
Thus far, we have confined the discussion to the provision of 92 of B.P. Blg. 881 for free air time
without taking into account COMELEC Resolution No. 2983-A, 2 of which states:
Sec. 2. Grant of "Comelec Time." Every radio broadcasting and television station
operating under franchise shall grant the Commission, upon payment of just compensation,
at least thirty (30) minutes of prime time daily, to be known as "Comelec Time", effective
February 10, 1998 for candidates for President, Vice-President and Senators, and effective
March 27, 1998, for candidates for local elective offices, until May 9, 1998. (Emphasis
added).
This is because the amendment providing for the payment of "just compensation" is invalid, being in
contravention of 92 of B.P. Blg. 881 that radio and television time given during the period of the
campaign shall be "free of charge." Indeed, Resolution No. 2983 originally provided that the time
allocated shall be "free of charge," just as 92 requires such time to be given "free of charge." The
amendment appears to be a reaction to petitioner's claim in this case that the original provision was
unconstitutional because it allegedly authorized the taking of property without just compensation.
The Solicitor General, relying on the amendment, claims that there should be no more dispute
because the payment of compensation is now provided for. It is basic, however, that an
administrative agency cannot, in the exercise of lawmaking, amend a statute of Congress. Since 2
of Resolution No. 2983-A is invalid, it cannot be invoked by the parties.
Law Allows Flextime for Programming
by Stations, Not Confiscation of
Air Time by COMELEC
It is claimed that there is no standard in the law to guide the COMELEC in procuring free air time
and that "theoretically the COMELEC can demand all of the air time of such stations." 25 Petitioners do not
claim that COMELEC Resolution No. 2983-A arbitrarily sequesters radio and television time. What they claim is that because of the breadth
of the statutory language, the provision in question is susceptible of "unbridled, arbitrary and oppressive exercise." 26

The contention has no basis. For one, the COMELEC is required to procure free air time for
candidates "within the area of coverage" of a particular radio or television broadcaster so that it
cannot, for example, procure such time for candidates outside that area. At what time of the day and
how much time the COMELEC may procure will have to be determined by it in relation to the overall
objective of informing the public about the candidates, their qualifications and their programs of
government. As stated in Osmea v. COMELEC, the COMELEC Time provided for in 92, as well as
the COMELEC Space provided for in 90, is in lieu of paid ads which candidates are prohibited to
have under 11(b) of R.A. No. 6646. Accordingly, this objective must be kept in mind in determining
the details of the COMELEC Time as well as those of the COMELEC Space.
There would indeed be objection to the grant of power to the COMELEC if 92 were so detailed as
to leave no room for accommodation of the demands of radio and television programming. For were

that the case, there could be an intrusion into the editorial prerogatives of radio and television
stations.
Differential Treatment of
Broadcast Media Justified
Petitioners complain that B.P. Blg. 881, 92 singles out radio and television stations to provide free
air time. They contend that newspapers and magazines are not similarly required as, in fact,
in Philippine Press Institute v.COMELEC, 27 we upheld their right to the payment of just compensation for the print space
they may provide under 90.

The argument will not bear analysis. It rests on the fallacy that broadcast media are entitled to the
same treatment under the free speech guarantee of the Constitution as the print media. There are
important differences in the characteristics of the two media, however, which justify their differential
treatment for free speech purposes. Because of the physical limitations of the broadcast spectrum,
the government must, of necessity, allocate broadcast frequencies to those wishing to use them.
There is no similar justification for government allocation and regulation of the print media. 28
In the allocation of limited resources, relevant conditions may validly be imposed on the grantees or
licensees. The reason for this is that, as already noted, the government spends public funds for the
allocation and regulation of the broadcast industry, which it does not do in the case of the print
media. To require the radio and television broadcast industry to provide free air time for the
COMELEC Time is a fair exchange for what the industry gets.
From another point of view, this Court has also held that because of the unique and pervasive
influence of the broadcast media, "[n]ecessarily . . . the freedom of television and radio broadcasting
is somewhat lesser in scope than the freedom accorded to newspaper and print media." 29
The broadcast media have also established a uniquely pervasive presence in the lives of all
Filipinos. Newspapers and current books are found only in metropolitan areas and in the
poblaciones of municipalities accessible to fast and regular transportation. Even here, there are low
income masses who find the cost of books, newspapers, and magazines beyond their humble
means. Basic needs like food and shelter perforce enjoy high priorities.
On the other hand, the transistor radio is found everywhere. The television set is also
becoming universal. Their message may be simultaneously received by a national or
regional audience of listeners including the indifferent or unwilling who happen to be within
reach of a blaring radio or television set. The materials broadcast over the airwaves reach
every person of every age, persons of varying susceptibilities to persuasion, persons of
different I.Q.s and mental capabilities, persons whose reactions to inflammatory or offensive
speech would he difficult to monitor or predict. The impact of the vibrant speech is forceful
and immediate. Unlike readers of the printed work, the radio audience has lesser opportunity
to cogitate, analyze, and reject the utterance. 30
Petitioners' assertion therefore that 92 of B.P. Blg. 881 denies them the equal protection of the law
has no basis. In addition, their plea that 92 (free air time) and 11(b) of R.A. No. 6646 (ban on paid
political ads) should be invalidated would pave the way for a return to the old regime where
moneyed candidates could monopolize media advertising to the disadvantage of candidates with
less resources. That is what Congress tried to reform in 1987 with the enactment of R.A. No. 6646.
We are not free to set aside the judgment of Congress, especially in light of the recent failure of
interested parties to have the law repealed or at least modified.

Requirement of COMELEC Time, a

Reasonable Exercise of the
State's Power to Regulate
Use of Franchises
Finally, it is argued that the power to supervise or regulate given to the COMELEC under Art. IX-C,
4 of the Constitution does not include the power to prohibit. In the first place, what the COMELEC is
authorized to supervise or regulate by Art. IX-C, 4 of the Constitution, 31 among other things, is the use by
media of information of their franchises or permits, while what Congress (not the COMELEC) prohibits is the sale or donation of print space
or air time for political ads. In other words, the object of supervision or regulation is different from the object of the prohibition. It is another
fallacy for petitioners to contend that the power to regulate does not include the power to prohibit. This may have force if the object of the
power were the same.

In the second place, the prohibition in 11(b) of R.A. No. 6646 is only half of the regulatory provision
in the statute. The other half is the mandate to the COMELEC to procure print space and air time for
allocation to candidates. As we said in Osmea v. COMELEC:
The term political "ad ban" when used to describe 11(b) of R.A. No. 6646, is misleading, for
even as 11(b) prohibits the sale or donation of print space and air time to political
candidates, it mandates the COMELEC to procure and itself allocate to the candidates space
and time in the media. There is no suppression of political ads but only a regulation of the
time and manner of advertising.
xxx xxx xxx
. . . What is involved here is simply regulation of this nature. Instead of leaving candidates to
advertise freely in the mass media, the law provides for allocation, by the COMELEC of print
space and air time to give all candidates equal time and space for the purpose of ensuring
"free, orderly, honest, peaceful, and credible elections."
With the prohibition on media advertising by candidates themselves, the COMELEC Time and
COMELEC Space are about the only means through which candidates can advertise their
qualifications and programs of government. More than merely depriving their qualifications and
programs of government. More than merely depriving candidates of time for their ads, the failure of
broadcast stations to provide air time unless paid by the government would clearly deprive the
people of their right to know. Art III, 7 of the Constitution provides that "the right of the people to
information on matters of public concern shall be recognized," while Art. XII, 6 states that "the use
of property bears a social function [and] the right to own, establish, and operate economic
enterprises [is] subject to the duty of the State to promote distributive justice and to intervene when
the common good so demands."
To affirm the validity of 92 of B.P. Blg. 881 is to hold public broadcasters to their obligation to see to
it that the variety and vigor of public debate on issues in an election is maintained. For while
broadcast media are not mere common carriers but entities with free speech rights, they are also
public trustees charged with the duty of ensuring that the people have access to the diversity of
views on political issues. This right of the people is paramount to the autonomy of broadcast media.
To affirm the validity of 92, therefore, is likewise to uphold the people's right to information on
matters of public concern. The use of property bears a social function and is subject to the state's
duty to intervene for the common good. Broadcast media can find their just and highest reward in the

fact that whatever altruistic service they may render in connection with the holding of elections is for
that common good.
For the foregoing reasons, the petition is dismissed.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Bellosillo, Melo, Puno, Kapunan, Martinez and Quisumbing,
JJ., concur.

Separate Opinions

VITUG, J., separate opinion;

I assent in most part to the well-considered opinion written by Mr. Justice Vicente V. Mendoza in
his ponencia, particularly, in holding that petitioner TELEBAP lacks locus standi in filing the instant
petition and in declaring that Section 92 of Batas Pambansa Blg. 881 is a legitimate exercise of
police power of the State.
The grant of franchise to broadcast media is a privilege burdened with responsibilities. While it is,
primordially, a business enterprise, it nevertheless, also addresses in many ways certain imperatives
of public service. In Stone vs. Mississippi (101, U.S. 814, cited in Cruz, Constitutional Law, 1995 ed.,
p. 40.), a case involving a franchise to sell lotteries which petitioner claims to be a contract which
may not be impaired, the United States Supreme Court opined:
. . . (T)he Legislature cannot bargain away the police power of a State. Irrevocable grants of
property and franchises may be made if they do not impair the supreme authority to make
laws for the right government of the State; but no Legislature can curtail the power of its
successors to make such laws as they may deem proper in matters of police. . .
In this case, the assailed law, in my view, has not failed in meeting the standards set forth for its
lawful exercise,i.e., (a) that its utilization is demanded by the interests of the public, and (b) that the
means employed are reasonably necessary, and not unduly oppressive, for the accomplishment of
the purposes and objectives of the law.
I cannot consider COMELEC Resolution No. 2983-A, particularly Section 2 thereof, as being in
contravention of B.P. No. 881. There is nothing in the law that prohibits the COMELEC from itself
procuring airtime, perhaps longer than that which can reasonably be allocated, if it believes that in so
opting, it does so for the public good.
I vote to DISMISS the petition.
ROMERO, J., dissenting;
Section 92 of BP 881 constitutes taking of private property without just compensation. The power of
eminent domain is a power inherent in sovereignty and requires no constitutional provision to give it
force. It is the rightful authority which exists in every sovereignty, to control and regulate those rights

of a public nature which pertain to its citizens in common, and to appropriate and control individual
property for the public benefit as the public safety, necessity, convenience or welfare demand. 1 The
right to appropriate private property to public use, however, lies dormant in the state until legislative action is had, pointing out the occasions,
the modes, the conditions and agencies for its appropriation. 2

Section 92 of BP 881 states

Sec. 92. Comelec Time The Comelec shall procure radio and television time to be
known as "Comelec Time" which shall be allocated equally and impartially among the
candidates within the area of coverage of all radio and television stations. For this purpose,
the franchise of all radio and television stations are hereby attended so as to provide radio
and television time free of charge during the period of election campaign.
Pursuant to Section 92 of BP 881, respondent COMELEC on March 3, 1998 passed Resolution
2983-A, the pertinent provision of which reads as follows:
Sec. 2. Grant of "Comelec Time." Every radio broadcasting and television station
operating under franchise shall grant the Commission, upon payment of just compensation,
at least thirty (30) minutes of prime time daily, to be known as "Comelec Time," effective
February 10, 1998 for candidates for President, Vice-President and Senators, and effective
March 27, 1998, for candidates for local elective offices, until May 9, 1998.
Section 92 of BP 881, insofar as it requires radio and television stations to provide Comelec with
radio and television time free of charge is a flagrant violation of the constitutional mandate that
private property shall not be taken for public use without just compensation. While it is inherent in the
State, the sovereign right to appropriate property has never been understood to include taking
property for public purposes without the duty and responsibility of ordering compensation to the
individual whose property has been sacrificed for the good of the community. Hence, Section 9
Article III of the 1987 Constitution which reads "No private property shall be taken for public use
without just compensation," gives us two limitations on the power of eminent domain: (1) the purpose
of taking must be for public use and (2) just compensation must be given to the owner of the private
property.
There is, of course, no question that the taking of the property in the case at bar is for public use, i.e.
to ensure that air time is allocated equally among the candidates, however, there is no justification
for the taking without payment of just compensation. While Resolution No. 2983-A has provided that
just compensation shall be paid for the 30 minutes of prime time granted by the television stations to
respondent Comelec, we note that the resolution was passed pursuant to Section 92 of BP 881
which mandates that radio and television time be provided to respondent Comelec free of charge.
Since the legislative intent is the controlling element in determining the administrative powers, rights,
privileges and immunities granted, 3 respondent Comelec may, at any time, despite the resolution passed, compel television
and radio stations to provide it with airtime free of charge.

Apparently, Sec. 92 of BP 881 justices such taking under the guise of police power regulation which
cannot be validly done. Police power must be distinguished from the power of eminent domain. In
the exercise of police power, there is a restriction of property interest to promote public welfare or
interest which involves no compensable taking. When the power of eminent domain, however, is
exercised, property interest is appropriated and applied to some public purpose, necessitating
compensation therefor. Traditional distinctions between police power and the power of eminent
domain precluded application of both powers at the same time in the same subject. 4 Hence, in the case
of City of Baguio v. NAWASA, 5 the Court held that a law requiring the transfer of all municipal waterworks systems to NAWASA in exchange
for its assets of equivalent value involved the exercise of eminent domain because the property involved was wholesome and intended for
public use. Property condemned under the exercise of police power, on the other hand, is noxious or intended for noxious purpose and,
consequently, is not compensable. Police power proceeds from the principle that every holder of property, however absolute and unqualified

may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal
right to the enjoyment of their property, nor injurious to the rights of the community. Rights of property, like all other social and conventional
rights, are subject to reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restraits
and regulations established by law as the legislature, under the governing and controlling power vested in them by the constitution, may think
necessary and expedient. 6

In the case of Small Landowners of the Philippines Inc. v. Secretary of Agrarian Reform, we found
occasion to note that recent trends show a mingling of the police power and the power of eminent
domain, with the latter being used as an implement of the former like the power of taxation. Citing
the cases of Berman v. Parker 7 and Penn Central Transportation Co. v. New York City 8 where owners of the Grand Central
Terminal who were not allowed to construct a multi-story building to preserve a historic landmark were allowed certain compensatory rights to
mitigate the loss caused by the regulation, this Court is Small Landowners of the Philippines, Inc. case held that measures prescribing
retention limits for landowners under the Agrarian Reform Law involved the exercise of police power for the regulation of private property in
accordance with the constitution. And, where to carry out the regulation, it became necessary to deprive owners of whatever lands they may
own in excess of the maximum area allowed, the Court held that there was definitely a taking under the power of eminent domain for which
payment of just compensation was imperative.

The petition before us is no different from the above-cited case. Insofar as See 92 of BP 881 read in
conjunction with Sec 11(b) of RA 6646 restricts the sale or donation of airtime by radio and television
stations during the campaign period to respondent Comelec, there is an exercise of police power for
the regulation of property in accordance with the Constitution. To the extent however that Sec 92 of
BP 881 mandates that airtime be provided free of charge to respondent Comelec to be allocated
equally among all candidates, the regulation exceeds the limits of police power and should be
recognized as a taking. In the case of Pennsylvania Coal v. Mahon, 9 Justice Holmes laid down the limits of police
power in this wise," The general rule is that while property may be regulated to a certain extent, if the regulation goes too far, it will be
recognized as a taking."

While the power of eminent domain often results in the appropriation of title to or possession of
property, it need not always be the case. It is a settled rule that neither acquisition of title nor total
destruction of value is essential to taking and it is usually in cases where title remains with the
private owner that inquiry should be made to determine whether the impairment of a property is
merely regulated or amounts to a compensable taking. A regulation which deprives any person of the
profitable use of his property constitutes a taking and entitles him to compensation unless the
invasion of rights is so slight as to permit the regulation to be justified under the police power.
Similarly, a police regulation which unreasonably restricts the right to use business property for
business purposes, amounts to taking of private property and the owner may recover therefor. 10 It is
also settled jurisprudence that acquisition of right of way easement falls within the purview of eminent domain. 11

While there is no taking or appropriation of title to, and possession of the expropriated property in the
case at bar, there is compensable taking inasmuch as them is a loss of the earnings for the airtime
which the petitioner-intervenors are compelled to donate. It is a loss which, to paraphrase Philippine
Press Institute v. Comelec, 12 could hardly be considered "de minimis" if we are to take into account the monetary value of the
compulsory donation measured by the current advertising rates of the radio and television stations.

In the case of Philippine Press Institute v. Comelec, 13 we had occasion to state that newspapers and other print media
are not compelled to donate free space to respondent Comelec inasmuch as this would be in violation of the constitutional provision that no
private property shall be taken for public use without just compensation. We find no cogent reason why radio and television stations should
be treated considering that their operating expenses as compared to those of the newspaper and other print media publishers involve
considerably greater amount of financial resources.

The fact that one needs a franchise from government to establish a radio and television station while
no license is needed to start a newspaper should not be made a basis for treating broadcast media
any differently from the print media in compelling the former to "donate" airtime to respondent
Comelec. While no franchises and rights are granted except under the condition that it shall be
subject to amendment, alteration, or repeal by the Congress when the common good so
requires, 14 this provides no license for government to disregard the cardinal rule that corporations with franchises are as much entitled to
due process and equal protection of laws guaranteed under the Constitution.

ACCORDINGLY, I vote to declare Section 92 of BP 881 insofar as it mandates that radio and
television time be provided to respondent Comelec free of charge UNCONSTITUTIONAL.
PANGANIBAN, J., dissenting;
At issue in this case is the constitutionality of Section 92 of the Omnibus Election Code 1 which compels all
broadcast stations in the country "to provide radio and television time, free of charge, during the period of the [election] campaigns," which
the Commission on Elections shall allocate "equally and impartially among the candidates . . ." Petitioners contend, and I agree, that this
legal provision is unconstitutional because it confiscates private property without due process of law and without payment of just
compensation, and denies broadcast media equal protection of the law.

In Philippine Press Institute, Inc. (PPI) vs. Commission on Elections, 2 this Court ruled that print media companies
cannot be required to donate advertising space, free of charge, to the Comelec for equal allocation among candidates, on the ground that
such compulsory seizure of print space is equivalent to a proscribed taking of private property for public use without payment of just
compensation. 3

The Court's majority in the present case, speaking through the distinguished Mr. Justice Vicente V.
Mendoza, holds, however, that the foregoing PPI doctrine applies only to print media, not to
broadcast (radio and TV) networks, arguing that "radio and television broadcasting companies,
which are given franchises, do not own the airwaves and frequencies through which they transmit
broadcast signals and images. They are merely given the temporary privilege of using them. Since a
franchise is a mere privilege, the exercise of the privilege may reasonably be burdened with the
performance by the grantee of some form of public service." In other words, the majority theorizes
that the forced donation of air time to the Comelec is a means by which the State gets compensation
for the grant of the franchise and/or the use of the air lanes.
With all due respect, I disagree. The majority is relying on a theoretical distinction that does not
make any real difference. Theory must yield to reality. I respectfully submit the following arguments
to support my dissent:
1. The State does not own the airwaves and broadcast frequencies. It merely allocates, supervises
and regulates their proper use. Thus, other than collecting supervision or regulatory fees which it
already does, it cannot exact any onerous and unreasonable post facto burdens from the franchise
holders, without due process and just compensation. Moreover, the invocation of the "common
good" does not excuse the unbridled and clearly excessive taking of a franchisee's property.
2. Assuming arguendo that the State owns the air lanes, the broadcasting companies already pay
rental fees to the government for their use. Hence, the seizure of air time cannot be justified by the
theory of compensation.
3. Airwaves and frequencies alone, without the radio and television owner's humongous investments
amounting to billions of pesos, cannot be utilized for broadcasting purposes. Hence, a forced
donation of broadcast time is in actual fact a taking of such investments without due process and
without payment of just compensation.
Let me explain further each of these arguments.
I. The State Does Not Own Air Lanes:
It Merely Regulates Their Proper Use;
"Common Good" Does Not Excuse Unbridled Taking.

Significantly, the majority does not claim that the State owns the air lanes. It merely contends that
"broadcasting, whether by radio or by television stations, is licensed by the government. Airwave
frequencies have to be allocated as there are more individuals who want to broadcast than there are
frequencies to assign. A franchise is thus a privilege subject among other thing . . . to amendment,
alteration or repeal by the Congress when the common good so requires." 4 True enough, a "franchise started
out as a 'royal privilege or [a] branch of the King's prerogative, subsisting in the hands of a subject.'" 5

Indeed, while the Constitution expressly provides that "[a]ll lands of the public domain, waters,
mineral, coal, petroleum, and other mineral oils, all forces, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State," it is
silent as to the ownership of the airwaves and frequencies. It is then reasonable to say that no one
owns them. Like the air we breathe and the sunshine that sustains life, the air lanes themselves "are
not property because they cannot be appropriated for the benefit of any individual," 6 but are to be used to
the best advantage of all.

Because, as mentioned earlier, there are more prospective users than frequencies, the State in
the exercise of its police power allocates, supervises and regulates their use, so as to derive
maximum benefit for the general public. The franchise granted by the legislature to broadcasting
companies is essentially for the purpose of putting order in the use of the airwaves by assigning to
such companies their respective frequencies. The purpose is not to grant them the privilege of using
public property. For, as earlier stated, airwaves are not owned by the government.
Accordingly, the National Telecommunications Commission (NTC) was tasked by law to
institutionalize this regulation of the air lanes. To cover the administrative cost of supervision and
regulation, the NTC levies charges, which have been revised upwards in NTC Memorandum Circular
No. 14-8-94 dated August 26, 1994. In accordance with this Circular, Petitioner GMA Network, Inc.,
for the year 1996, paid the NTC P2,880,591 of which P2,501,776.30 was NTC "supervision and
regulation fee," as borne out by its Audited Consolidated Financial Statements for said year, on file
with the Securities and Exchange Commission. In short, for its work of allocation, supervision and
regulation, the government is adequately compensated by the broadcast media through the payment
of fees unilaterally set by the former.
Franchisee's Property Cannot
Be Taken Without Just Compensation
In stamping unbridled donations with its imprimatur, the majority overlooks the twofold nature and
purpose of a franchise: other than serving the public benefit which is subject to government
regulation, it must also be to the franchise holder's advantage. Once granted, a franchise (not the air
lanes) together with concomitant private rights, becomes property of the grantee. 7 It is regarded by law
precisely as other property and, as any other property, it is safeguarded by the Constitution from arbitrary revocation or impairment. 8 The
rights under a franchise can be neither taken nor curtailed for public use or purpose, even by the government as the grantor, without
payment of just compensation 9 as guaranteed under our fundamental law. 10 The fact that the franchise relates to public use or purpose
does not entitle the state to abrogate or impair its use without just compensation. 11

The majority further claims that, constitutionally, 12 franchises are always subject to alteration by Congress, "when the
common good so requires." The question then boils down to this: Does Section 92 of the Omnibus Election Code constitute a franchise
modification for the "common good," or an "unlawful taking of private property"? To answer this question, I go back to Philippine Press
Institute, Inc. vs. Commission on Elections, where a unanimous Supreme Court held: 13

To compel print media companies to donate "Comelec space" of the dimensions specified in
Section 2 of Resolution No. 2772 (not less than one-half page), amounts to "taking" of private
personal property for public use or purposes. Section 2 failed to specify the intended frequency of
such compulsory "donation:" only once during the period from 6 March 1995 (or 21 March 1995)

until 12 May 1995? or everyday or once a week? or as often as Comelec may direct during the
same period? The extent of the taking or deprivation is not insubstantial; this is not a case of a de
minimistemporary limitation or restraint upon the use of private property. The monetary value of
the compulsory "donation," measured by the advertising rates ordinarily charged by newspaper
publishers whether in cities or in non-urban areas, may be very substantial indeed. (Emphasis in
original)

"Common Good" Does Not Justify Unbridled

Taking of Franchisee's Broadcast Time
Like the questioned resolution in PPI, Section 92 contains no limit as to the amount and recurrence of the "donation" of air time that Comelec
can demand from radio and TV stations. There are no guidelines or standards provided as to the choice of stations, time and frequency of
airing, and programs to be aired. Theoretically, Comelec can compel the use of all the air time of a station. The fact that Comelec has not
exercised its granted power arbitrarily is immaterial because the law, as worded, admits of unbridled exercise.

A statute is considered void for overbreadth when "it offends the constitutional principle that
a governmental purpose to control or prevent activities constitutionally subject to state
regulations may not be achieved by means which sweep unnecessarily broadly and thereby
invade the area of protected freedoms." (Zwickler v. Koota, 19 L ed 2d 444 [1967]). In a
series of decisions this Court has held that, even though the governmental purpose be
legitimate and substantial, that purpose cannot be pursued by means that broadly stifle
fundamental personal liberties when the end can be more narrowly achieved. The breadth of
legislative abridgment must be viewed in the light of less drastic means for achieving the
same basic purpose. 14
In a 1968 opinion, the American Supreme Court made clear that the absence of such
reasonable and definite standards in a legislation of its character is fatal. Where, as in the
case of the above paragraphs, the majority of the Court could discern "an overbreadth that
makes possible oppressive or capricious application" of the statutory provisions, the line
dividing the valid from the constitutionally infirm has been crossed. Such provisions offend
the constitutional principle that "a governmental purpose to control or prevent activities
constitutionally subject to state regulation may not be achieved by means which sweep
unnecessarily broadly and thereby invade the area of protected freedoms."
It is undeniable, therefore, that even though the governmental purpose be legitimate and
substantial, they cannot be pursued by means that broadly stifle fundamental personal
liberties when the end can be more narrowly achieved. For precision of regulation is the
touchstone in an area so closely related to our most precious freedoms. 15
As a rule, a statute may be said to be vague and invalid if "it leaves law enforces (in the case, the
Comelec) unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the
government muscle." 16
Moreover, the extent of the actual taking of air time is enormous, exorbitant and unreasonable. In
their Memorandum, 17 petitioners allege (and this has not been rebutted at all) that during the 1992 election period, GMA Network has
been compelled to donate P22,498.560 worth of advertising revenues; and for the current election period, GMA stands to lose a staggering
P58,980,850. Now, clearly and most obviously, these amounts are not inconsequential or de minimis. They constitute arbitrary taking on a
grand scale!

American jurisprudence is replete with citations showing that "[l]egislative regulation of public utilities
must not have the effect of depriving an owner of his property without due process of law, nor of
confiscating or appropriating private property without due process of law, nor of confiscating or
appropriating private property without just compensation, nor of limiting or prescribing irrevocably

vested rights or privileges lawfully acquired under a charter or franchise." The power to regulate is
subject to these constitutional limits. 18 Consequently, "rights under a franchise cannot be taken or damaged for a public use
without the making of just compensation therefor." 19 To do so is clearly beyond the power of the legislature to regulate.

II. Assuming That the State Owns Air Lanes,

Broadcast Companies Already Pay Rental Therefor.
Let me grant for the moment and for the sake of argument that the State owns the air lanes and that,
by its grant of a franchise, it should thus receive compensation for the use of said frequencies. I say,
however, that by remitting unreasonably high "annual fees and charges," which as earlier stated
amounts to millions of pesos yearly, television stations are in effect paying rental fees for the use
(not just the regulation) of said frequencies. Except for the annual inspection conducted by the NTC,
no other significant service is performed by the government in exchange for the enormous fees
charged the stations. Evidently, the sums collected by the NTC exceed the cost of services
performed by it, and are therefore more properly understood as rental fees for the use of the
frequencies granted them. 20
Since the use of the air frequencies is already paid for annually by the broadcast entities, there is no
basis for the government, through the Comelec, to compel unbridled donation of the air time of said
companies without due process and without payment of just compensation.
In fact, even in the case of state-owned resources referred to earlier like oil, minerals and coal
once the license to exploit and develop them is granted to a private corporation, the government can
no longer arbitrarilyconfiscate or appropriate them gratis under the guise of serving the common
good. Crude oil, for instance, once explored, drilled, and refined is thereafter considered the property
of the authorized explorer (or refiner) which can sell it to the public and even to the government
itself. The State simply cannot demand free gasoline for the operation of public facilities even if they
benefit the people in general. It still has to pay compensation therefor.
III. Airwaves Useless Without Huge
Investment of Broadcast Companies
Setting up and operating a credible broadcasting network requires billions of pesos in investments. It
is precisely the broadcast licensee's use of a state-granted franchise or privilege which occasions its
acquisition of private property in the form of broadcast facilities and its production of air time. These
properties are distinct from its franchise. 21 The 1996 Audited Consolidated Balance Sheet of Petitioner GMA, on file with the
SEC, shows that its "property and equipment," which it uses in its broadcast function, amount to over one billion pesos or, to be exact,
P1,245,741,487. 22 This does not include the cost of producing the programs to be broadcast, talent fees and other aspects of broadcasting.
In their Memorandum, 23 petitioners explain that the total cost for GMA to stay on the air (for television) at present is approximately P136,100
per hour, which includes electricity, depreciation, repairs and maintenance, technical facilities, salaries, and so on. The point is: The franchise
holders can recover their huge investments only by selling air time to advertisers. This is their "product," their valuable property which
Section 92 forcibly takes from them in massive amounts without payment of just compensation.

It is too simplistic to say that because the Constitution allows Congress to alter franchises, ergo, an
unbridled taking of private property may be allowed. If such appropriation were only, to use the
words of PPI vs. Comelec, de minimis or insignificant say, one hour once or twice a month
perhaps, it can be justified by the promotion of the "common good." But a taking in the gargantuan
amount of over P58 million from Petitioner GMA for the 1998 election season alone is an actual
seizure of its private investment, and not at all a reasonable "compensation" or "alteration" for the
"common good." Certainly, this partakes of CONFISCATION of private property.

What makes the taking of air time even more odious is its ex post facto nature. When the broadcast
companies acquired their franchises and set up their expensive facilities, they were not informed of
the immensity of the donations they are now compelled to give.
Note should be made, too, of the fact that what Section 92 takes away is air time. Air time is the
"finished product" after a station uses its own broadcast facilities. The frequency is lust the specific
"route" or "channel" by which this medium reaches the TV sets of the general public. Technically,
therefore, the wholesale alteration by Section 92 of all broadcast franchise would appear unrelated
to the compelled donations. While the express modification is in the franchise, what Section 92 really
does is that it takes away the end product of the facilities which were set up through the use of the
entrepreneurs' investments and the broadcasters' work.
EPILOGUE
By way of epilogue, I must point out that even Respondent Comelec expressly recognizes the need
for just compensation. Thus, Section 2 of its Resolution No. 2983-A states that "[e]very radio
broadcasting and television station operating under franchise shall grant the Commission, upon
payment of just compensation, at least thirty (30) minutes of prime time daily to be known as
'Comelec Time' . . ." And yet, even with such a judicious legal position taken by the very agency
tasked by the Constitution to administer elections, the majority still insists on an arbitrary seizure of
precious property produced and owned by private enterprise.
That Petitioner GMA is a viable, even profitable, enterprise 24 is no argument for seizing its profits. The State cannot
rob the rich to feed the poor in the guise of promoting the "common good." Truly, the end never justifies the means.

It cannot be denied that the amount and the extent of the air time demanded from GMA is huge and
exorbitant, amounting, I repeat, to over P58 million for the 1998 election season alone. If the air time
required from "every radio and television station" in the country in the magnitude stated in the
aforesaid Comelec Resolution 2983-A is added up and costed, the total would indeed be staggering
in several hundred million pesos.
Smacking of undisguised discrimination is the fact that in PPI vs. Comelec, this Court has required
payment of print media ads but, in this case, compels broadcast stations to donate their end product
on a massive scale. The simplistic distinction given that radio and TV stations are mere grantees
of government franchises while newspaper companies are not does not justify the grand larceny
of precious air time. This is a violation not only of private property, but also of the constitutional right
to equal protection itself. The proffered distinction between print and broadcast media is too
insignificant and too flimsy to be a valid justification for the discrimination. The print and broadcast
media are equal in the sense that both derive their revenues principally from paid ads. They should
thus be treated equally by the law in respect of such ads.
To sum up, the Bill of Rights of our Constitution expressly guarantees the following rights:
1. No person, whether rich or poor, shall be deprived of property without due process. 25
2. Such property shall not be taken by the government, even for the use of the general public,
without first paying just compensation to the owner. 26
3. No one, regardless of social or financial status, shall be denied equal protection of the law. 27
The majority, however, peremptorily brushes aside all these sacred guarantees and prefers to rely
on the nebulous legal theory that broadcast stations are mere recipients of state-granted franchises

which can be altered or withdrawn anytime or otherwise burdened with post facto elephantine yokes.
By this short-circuited rationalization, the majority blithely ignores the private entrepreneurs' billionpeso investments and the broadcast professionals' grit and toil in transforming these invisible
franchises into merchandisable property; and conveniently forgets the grim reality that the taking of
honestly earned media assets is unbridled, exorbitant and arbitrary. Worse, the government, 28 against
which these constitutional rights to property were in the first place written, prudently agrees to respect them and to pay adequate
compensation for their taking. But ironically, the majority rejects the exemplary observance by the government of the people's rights and
insists on the confiscation of their private property.

I have always believed that the Supreme Court is the ever vigilant guardian of the constitutional
rights of the citizens and their ultimate protector against the tyrannies of their own government. I am
afraid that by this unfortunate Decision, the majority, in this instance, has instead converted this
honorable and majestic Court into the people's unwitting oppressor.
WHEREFORE, I vote to GRANT the petition and to declare Section 92 of the Omnibus Election
Code UNCONSTITUTIONAL and VOID.
Purisima, J., dissents.

Separate Opinions

VITUG, J., separate opinion;

I assent in most part to the well-considered opinion written by Mr. Justice Vicente V. Mendoza in
his ponencia, particularly, in holding that petitioner TELEBAP lacks locus standi in filing the instant
petition and in declaring that Section 92 of Batas Pambansa Blg. 881 is a legitimate exercise of
police power of the State.
The grant of franchise to broadcast media is a privilege burdened with responsibilities. While it is,
primordially, a business enterprise, it nevertheless, also addresses in many ways certain imperatives
of public service. In Stone vs. Mississippi (101, U.S. 814, cited in Cruz, Constitutional Law, 1995 ed.,
p. 40.), a case involving a franchise to sell lotteries which petitioner claims to be a contract which
may not be impaired, the United States Supreme Court opined:
. . . (T)he Legislature cannot bargain away the police power of a State. Irrevocable grants of
property and franchises may be made if they do not impair the supreme authority to make
laws for the right government of the State; but no Legislature can curtail the power of its
successors to make such laws as they may deem proper in matters of police. . .
In this case, the assailed law, in my view, has not failed in meeting the standards set forth for its
lawful exercise,i.e., (a) that its utilization is demanded by the interests of the public, and (b) that the
means employed are reasonably necessary, and not unduly oppressive, for the accomplishment of
the purposes and objectives of the law.
I cannot consider COMELEC Resolution No. 2983-A, particularly Section 2 thereof, as being in
contravention of B.P. No. 881. There is nothing in the law that prohibits the COMELEC from itself
procuring airtime, perhaps longer than that which can reasonably be allocated, if it believes that in so
opting, it does so for the public good.
I vote to DISMISS the petition.

ROMERO, J., dissenting;

Section 92 of BP 881 constitutes taking of private property without just compensation. The power of
eminent domain is a power inherent in sovereignty and requires no constitutional provision to give it
force. It is the rightful authority which exists in every sovereignty, to control and regulate those rights
of a public nature which pertain to its citizens in common, and to appropriate and control individual
property for the public benefit as the public safety, necessity, convenience or welfare demand. 1 The
right to appropriate private property to public use, however, lies dormant in the state until legislative action is had, pointing out the occasions,
the modes, the conditions and agencies for its appropriation. 2

Section 92 of BP 881 states

Sec. 92. Comelec Time The Comelec shall procure radio and television time to be
known as "Comelec Time" which shall be allocated equally and impartially among the
candidates within the area of coverage of all radio and television stations. For this purpose,
the franchise of all radio and television stations are hereby attended so as to provide radio
and television time free of charge during the period of election campaign.
Pursuant to Section 92 of BP 881, respondent COMELEC on March 3, 1998 passed Resolution
2983-A, the pertinent provision of which reads as follows:
Sec. 2. Grant of "Comelec Time." Every radio broadcasting and television station
operating under franchise shall grant the Commission, upon payment of just compensation,
at least thirty (30) minutes of prime time daily, to be known as "Comelec Time," effective
February 10, 1998 for candidates for President, Vice-President and Senators, and effective
March 27, 1998, for candidates for local elective offices, until May 9, 1998.
Section 92 of BP 881, insofar as it requires radio and television stations to provide Comelec with
radio and television time free of charge is a flagrant violation of the constitutional mandate that
private property shall not be taken for public use without just compensation. While it is inherent in the
State, the sovereign right to appropriate property has never been understood to include taking
property for public purposes without the duty and responsibility of ordering compensation to the
individual whose property has been sacrificed for the good of the community. Hence, Section 9
Article III of the 1987 Constitution which reads "No private property shall be taken for public use
without just compensation," gives us two limitations on the power of eminent domain: (1) the purpose
of taking must be for public use and (2) just compensation must be given to the owner of the private
property.
There is, of course, no question that the taking of the property in the case at bar is for public use, i.e.
to ensure that air time is allocated equally among the candidates, however, there is no justification
for the taking without payment of just compensation. While Resolution No. 2983-A has provided that
just compensation shall be paid for the 30 minutes of prime time granted by the television stations to
respondent Comelec, we note that the resolution was passed pursuant to Section 92 of BP 881
which mandates that radio and television time be provided to respondent Comelec free of charge.
Since the legislative intent is the controlling element in determining the administrative powers, rights,
privileges and immunities granted, 3 respondent Comelec may, at any time, despite the resolution passed, compel television
and radio stations to provide it with airtime free of charge.

Apparently, Sec. 92 of BP 881 justices such taking under the guise of police power regulation which
cannot be validly done. Police power must be distinguished from the power of eminent domain. In
the exercise of police power, there is a restriction of property interest to promote public welfare or
interest which involves no compensable taking. When the power of eminent domain, however, is
exercised, property interest is appropriated and applied to some public purpose, necessitating

compensation therefor. Traditional distinctions between police power and the power of eminent
domain precluded application of both powers at the same time in the same subject. 4 Hence, in the case
of City of Baguio v. NAWASA, 5 the Court held that a law requiring the transfer of all municipal waterworks systems to NAWASA in exchange
for its assets of equivalent value involved the exercise of eminent domain because the property involved was wholesome and intended for
public use. Property condemned under the exercise of police power, on the other hand, is noxious or intended for noxious purpose and,
consequently, is not compensable. Police power proceeds from the principle that every holder of property, however absolute and unqualified
may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal
right to the enjoyment of their property, nor injurious to the rights of the community. Rights of property, like all other social and conventional
rights, are subject to reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restraits
and regulations established by law as the legislature, under the governing and controlling power vested in them by the constitution, may think
necessary and expedient. 6

In the case of Small Landowners of the Philippines Inc. v. Secretary of Agrarian Reform, we found
occasion to note that recent trends show a mingling of the police power and the power of eminent
domain, with the latter being used as an implement of the former like the power of taxation. Citing
the cases of Berman v. Parker 7 and Penn Central Transportation Co. v. New York City 8 where owners of the Grand Central
Terminal who were not allowed to construct a multi-story building to preserve a historic landmark were allowed certain compensatory rights to
mitigate the loss caused by the regulation, this Court is Small Landowners of the Philippines, Inc. case held that measures prescribing
retention limits for landowners under the Agrarian Reform Law involved the exercise of police power for the regulation of private property in
accordance with the constitution. And, where to carry out the regulation, it became necessary to deprive owners of whatever lands they may
own in excess of the maximum area allowed, the Court held that there was definitely a taking under the power of eminent domain for which
payment of just compensation was imperative.

The petition before us is no different from the above-cited case. Insofar as See 92 of BP 881 read in
conjunction with Sec 11(b) of RA 6646 restricts the sale or donation of airtime by radio and television
stations during the campaign period to respondent Comelec, there is an exercise of police power for
the regulation of property in accordance with the Constitution. To the extent however that Sec 92 of
BP 881 mandates that airtime be provided free of charge to respondent Comelec to be allocated
equally among all candidates, the regulation exceeds the limits of police power and should be
recognized as a taking. In the case of Pennsylvania Coal v. Mahon, 9 Justice Holmes laid down the limits of police
power in this wise," The general rule is that while property may be regulated to a certain extent, if the regulation goes too far, it will be
recognized as a taking."

While the power of eminent domain often results in the appropriation of title to or possession of
property, it need not always be the case. It is a settled rule that neither acquisition of title nor total
destruction of value is essential to taking and it is usually in cases where title remains with the
private owner that inquiry should be made to determine whether the impairment of a property is
merely regulated or amounts to a compensable taking. A regulation which deprives any person of the
profitable use of his property constitutes a taking and entitles him to compensation unless the
invasion of rights is so slight as to permit the regulation to be justified under the police power.
Similarly, a police regulation which unreasonably restricts the right to use business property for
business purposes, amounts to taking of private property and the owner may recover therefor. 10 It is
also settled jurisprudence that acquisition of right of way easement falls within the purview of eminent domain. 11

While there is no taking or appropriation of title to, and possession of the expropriated property in the
case at bar, there is compensable taking inasmuch as them is a loss of the earnings for the airtime
which the petitioner-intervenors are compelled to donate. It is a loss which, to paraphrase Philippine
Press Institute v. Comelec, 12 could hardly be considered "de minimis" if we are to take into account the monetary value of the
compulsory donation measured by the current advertising rates of the radio and television stations.

In the case of Philippine Press Institute v. Comelec, 13 we had occasion to state that newspapers and other print media
are not compelled to donate free space to respondent Comelec inasmuch as this would be in violation of the constitutional provision that no
private property shall be taken for public use without just compensation. We find no cogent reason why radio and television stations should
be treated considering that their operating expenses as compared to those of the newspaper and other print media publishers involve
considerably greater amount of financial resources.

The fact that one needs a franchise from government to establish a radio and television station while
no license is needed to start a newspaper should not be made a basis for treating broadcast media

any differently from the print media in compelling the former to "donate" airtime to respondent
Comelec. While no franchises and rights are granted except under the condition that it shall be
subject to amendment, alteration, or repeal by the Congress when the common good so
requires, 14 this provides no license for government to disregard the cardinal rule that corporations with franchises are as much entitled to
due process and equal protection of laws guaranteed under the Constitution.

ACCORDINGLY, I vote to declare Section 92 of BP 881 insofar as it mandates that radio and
television time be provided to respondent Comelec free of charge UNCONSTITUTIONAL.
PANGANIBAN, J., dissenting;
At issue in this case is the constitutionality of Section 92 of the Omnibus Election Code 1 which compels all
broadcast stations in the country "to provide radio and television time, free of charge, during the period of the [election] campaigns," which
the Commission on Elections shall allocate "equally and impartially among the candidates . . ." Petitioners contend, and I agree, that this
legal provision is unconstitutional because it confiscates private property without due process of law and without payment of just
compensation, and denies broadcast media equal protection of the law.

In Philippine Press Institute, Inc. (PPI) vs. Commission on Elections, 2 this Court ruled that print media companies
cannot be required to donate advertising space, free of charge, to the Comelec for equal allocation among candidates, on the ground that
such compulsory seizure of print space is equivalent to a proscribed taking of private property for public use without payment of just
compensation. 3

The Court's majority in the present case, speaking through the distinguished Mr. Justice Vicente V.
Mendoza, holds, however, that the foregoing PPI doctrine applies only to print media, not to
broadcast (radio and TV) networks, arguing that "radio and television broadcasting companies,
which are given franchises, do not own the airwaves and frequencies through which they transmit
broadcast signals and images. They are merely given the temporary privilege of using them. Since a
franchise is a mere privilege, the exercise of the privilege may reasonably be burdened with the
performance by the grantee of some form of public service." In other words, the majority theorizes
that the forced donation of air time to the Comelec is a means by which the State gets compensation
for the grant of the franchise and/or the use of the air lanes.
With all due respect, I disagree. The majority is relying on a theoretical distinction that does not
make any real difference. Theory must yield to reality. I respectfully submit the following arguments
to support my dissent:
1. The State does not own the airwaves and broadcast frequencies. It merely allocates, supervises
and regulates their proper use. Thus, other than collecting supervision or regulatory fees which it
already does, it cannot exact any onerous and unreasonable post facto burdens from the franchise
holders, without due process and just compensation. Moreover, the invocation of the "common
good" does not excuse the unbridled and clearly excessive taking of a franchisee's property.
2. Assuming arguendo that the State owns the air lanes, the broadcasting companies already pay
rental fees to the government for their use. Hence, the seizure of air time cannot be justified by the
theory of compensation.
3. Airwaves and frequencies alone, without the radio and television owner's humongous investments
amounting to billions of pesos, cannot be utilized for broadcasting purposes. Hence, a forced
donation of broadcast time is in actual fact a taking of such investments without due process and
without payment of just compensation.
Let me explain further each of these arguments.

I. The State Does Not Own Air Lanes:

It Merely Regulates Their Proper Use;
"Common Good" Does Not Excuse Unbridled Taking.
Significantly, the majority does not claim that the State owns the air lanes. It merely contends that
"broadcasting, whether by radio or by television stations, is licensed by the government. Airwave
frequencies have to be allocated as there are more individuals who want to broadcast than there are
frequencies to assign. A franchise is thus a privilege subject among other thing . . . to amendment,
alteration or repeal by the Congress when the common good so requires." 4 True enough, a "franchise started
out as a 'royal privilege or [a] branch of the King's prerogative, subsisting in the hands of a subject.'" 5

Indeed, while the Constitution expressly provides that "[a]ll lands of the public domain, waters,
mineral, coal, petroleum, and other mineral oils, all forces, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State," it is
silent as to the ownership of the airwaves and frequencies. It is then reasonable to say that no one
owns them. Like the air we breathe and the sunshine that sustains life, the air lanes themselves "are
not property because they cannot be appropriated for the benefit of any individual," 6 but are to be used to
the best advantage of all.

Because, as mentioned earlier, there are more prospective users than frequencies, the State in
the exercise of its police power allocates, supervises and regulates their use, so as to derive
maximum benefit for the general public. The franchise granted by the legislature to broadcasting
companies is essentially for the purpose of putting order in the use of the airwaves by assigning to
such companies their respective frequencies. The purpose is not to grant them the privilege of using
public property. For, as earlier stated, airwaves are not owned by the government.
Accordingly, the National Telecommunications Commission (NTC) was tasked by law to
institutionalize this regulation of the air lanes. To cover the administrative cost of supervision and
regulation, the NTC levies charges, which have been revised upwards in NTC Memorandum Circular
No. 14-8-94 dated August 26, 1994. In accordance with this Circular, Petitioner GMA Network, Inc.,
for the year 1996, paid the NTC P2,880,591 of which P2,501,776.30 was NTC "supervision and
regulation fee," as borne out by its Audited Consolidated Financial Statements for said year, on file
with the Securities and Exchange Commission. In short, for its work of allocation, supervision and
regulation, the government is adequately compensated by the broadcast media through the payment
of fees unilaterally set by the former.
Franchisee's Property Cannot
Be Taken Without Just Compensation
In stamping unbridled donations with its imprimatur, the majority overlooks the twofold nature and
purpose of a franchise: other than serving the public benefit which is subject to government
regulation, it must also be to the franchise holder's advantage. Once granted, a franchise (not the air
lanes) together with concomitant private rights, becomes property of the grantee. 7 It is regarded by law
precisely as other property and, as any other property, it is safeguarded by the Constitution from arbitrary revocation or impairment. 8 The
rights under a franchise can be neither taken nor curtailed for public use or purpose, even by the government as the grantor, without
payment of just compensation 9 as guaranteed under our fundamental law. 10 The fact that the franchise relates to public use or purpose
does not entitle the state to abrogate or impair its use without just compensation. 11

The majority further claims that, constitutionally, 12 franchises are always subject to alteration by Congress, "when the
common good so requires." The question then boils down to this: Does Section 92 of the Omnibus Election Code constitute a franchise

modification for the "common good," or an "unlawful taking of private property"? To answer this question, I go back to Philippine Press
Institute, Inc. vs. Commission on Elections, where a unanimous Supreme Court held: 13

To compel print media companies to donate "Comelec space" of the dimensions specified in
Section 2 of Resolution No. 2772 (not less than one-half page), amounts to "taking" of private
personal property for public use or purposes. Section 2 failed to specify the intended frequency of
such compulsory "donation:" only once during the period from 6 March 1995 (or 21 March 1995)
until 12 May 1995? or everyday or once a week? or as often as Comelec may direct during the
same period? The extent of the taking or deprivation is not insubstantial; this is not a case of a de
minimistemporary limitation or restraint upon the use of private property. The monetary value of
the compulsory "donation," measured by the advertising rates ordinarily charged by newspaper
publishers whether in cities or in non-urban areas, may be very substantial indeed. (Emphasis in
original)

"Common Good" Does Not Justify Unbridled

Taking of Franchisee's Broadcast Time
Like the questioned resolution in PPI, Section 92 contains no limit as to the amount and recurrence of the "donation" of air time that Comelec
can demand from radio and TV stations. There are no guidelines or standards provided as to the choice of stations, time and frequency of
airing, and programs to be aired. Theoretically, Comelec can compel the use of all the air time of a station. The fact that Comelec has not
exercised its granted power arbitrarily is immaterial because the law, as worded, admits of unbridled exercise.

A statute is considered void for overbreadth when "it offends the constitutional principle that
a governmental purpose to control or prevent activities constitutionally subject to state
regulations may not be achieved by means which sweep unnecessarily broadly and thereby
invade the area of protected freedoms." (Zwickler v. Koota, 19 L ed 2d 444 [1967]). In a
series of decisions this Court has held that, even though the governmental purpose be
legitimate and substantial, that purpose cannot be pursued by means that broadly stifle
fundamental personal liberties when the end can be more narrowly achieved. The breadth of
legislative abridgment must be viewed in the light of less drastic means for achieving the
same basic purpose. 14
In a 1968 opinion, the American Supreme Court made clear that the absence of such
reasonable and definite standards in a legislation of its character is fatal. Where, as in the
case of the above paragraphs, the majority of the Court could discern "an overbreadth that
makes possible oppressive or capricious application" of the statutory provisions, the line
dividing the valid from the constitutionally infirm has been crossed. Such provisions offend
the constitutional principle that "a governmental purpose to control or prevent activities
constitutionally subject to state regulation may not be achieved by means which sweep
unnecessarily broadly and thereby invade the area of protected freedoms."
It is undeniable, therefore, that even though the governmental purpose be legitimate and
substantial, they cannot be pursued by means that broadly stifle fundamental personal
liberties when the end can be more narrowly achieved. For precision of regulation is the
touchstone in an area so closely related to our most precious freedoms. 15
As a rule, a statute may be said to be vague and invalid if "it leaves law enforces (in the case, the
Comelec) unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the
government muscle." 16
Moreover, the extent of the actual taking of air time is enormous, exorbitant and unreasonable. In
their Memorandum, 17 petitioners allege (and this has not been rebutted at all) that during the 1992 election period, GMA Network has
been compelled to donate P22,498.560 worth of advertising revenues; and for the current election period, GMA stands to lose a staggering

P58,980,850. Now, clearly and most obviously, these amounts are not inconsequential or de minimis. They constitute arbitrary taking on a
grand scale!

American jurisprudence is replete with citations showing that "[l]egislative regulation of public utilities
must not have the effect of depriving an owner of his property without due process of law, nor of
confiscating or appropriating private property without due process of law, nor of confiscating or
appropriating private property without just compensation, nor of limiting or prescribing irrevocably
vested rights or privileges lawfully acquired under a charter or franchise." The power to regulate is
subject to these constitutional limits. 18 Consequently, "rights under a franchise cannot be taken or damaged for a public use
without the making of just compensation therefor." 19 To do so is clearly beyond the power of the legislature to regulate.

II. Assuming That the State Owns Air Lanes,

Broadcast Companies Already Pay Rental Therefor.
Let me grant for the moment and for the sake of argument that the State owns the air lanes and that,
by its grant of a franchise, it should thus receive compensation for the use of said frequencies. I say,
however, that by remitting unreasonably high "annual fees and charges," which as earlier stated
amounts to millions of pesos yearly, television stations are in effect paying rental fees for the use
(not just the regulation) of said frequencies. Except for the annual inspection conducted by the NTC,
no other significant service is performed by the government in exchange for the enormous fees
charged the stations. Evidently, the sums collected by the NTC exceed the cost of services
performed by it, and are therefore more properly understood as rental fees for the use of the
frequencies granted them. 20
Since the use of the air frequencies is already paid for annually by the broadcast entities, there is no
basis for the government, through the Comelec, to compel unbridled donation of the air time of said
companies without due process and without payment of just compensation.
In fact, even in the case of state-owned resources referred to earlier like oil, minerals and coal
once the license to exploit and develop them is granted to a private corporation, the government can
no longer arbitrarilyconfiscate or appropriate them gratis under the guise of serving the common
good. Crude oil, for instance, once explored, drilled, and refined is thereafter considered the property
of the authorized explorer (or refiner) which can sell it to the public and even to the government
itself. The State simply cannot demand free gasoline for the operation of public facilities even if they
benefit the people in general. It still has to pay compensation therefor.
III. Airwaves Useless Without Huge
Investment of Broadcast Companies
Setting up and operating a credible broadcasting network requires billions of pesos in investments. It
is precisely the broadcast licensee's use of a state-granted franchise or privilege which occasions its
acquisition of private property in the form of broadcast facilities and its production of air time. These
properties are distinct from its franchise. 21 The 1996 Audited Consolidated Balance Sheet of Petitioner GMA, on file with the
SEC, shows that its "property and equipment," which it uses in its broadcast function, amount to over one billion pesos or, to be exact,
P1,245,741,487. 22 This does not include the cost of producing the programs to be broadcast, talent fees and other aspects of broadcasting.
In their Memorandum, 23 petitioners explain that the total cost for GMA to stay on the air (for television) at present is approximately P136,100
per hour, which includes electricity, depreciation, repairs and maintenance, technical facilities, salaries, and so on. The point is: The franchise
holders can recover their huge investments only by selling air time to advertisers. This is their "product," their valuable property which
Section 92 forcibly takes from them in massive amounts without payment of just compensation.

It is too simplistic to say that because the Constitution allows Congress to alter franchises, ergo, an
unbridled taking of private property may be allowed. If such appropriation were only, to use the

words of PPI vs. Comelec, de minimis or insignificant say, one hour once or twice a month
perhaps, it can be justified by the promotion of the "common good." But a taking in the gargantuan
amount of over P58 million from Petitioner GMA for the 1998 election season alone is an actual
seizure of its private investment, and not at all a reasonable "compensation" or "alteration" for the
"common good." Certainly, this partakes of CONFISCATION of private property.
What makes the taking of air time even more odious is its ex post facto nature. When the broadcast
companies acquired their franchises and set up their expensive facilities, they were not informed of
the immensity of the donations they are now compelled to give.
Note should be made, too, of the fact that what Section 92 takes away is air time. Air time is the
"finished product" after a station uses its own broadcast facilities. The frequency is lust the specific
"route" or "channel" by which this medium reaches the TV sets of the general public. Technically,
therefore, the wholesale alteration by Section 92 of all broadcast franchise would appear unrelated
to the compelled donations. While the express modification is in the franchise, what Section 92 really
does is that it takes away the end product of the facilities which were set up through the use of the
entrepreneurs' investments and the broadcasters' work.
EPILOGUE
By way of epilogue, I must point out that even Respondent Comelec expressly recognizes the need
for just compensation. Thus, Section 2 of its Resolution No. 2983-A states that "[e]very radio
broadcasting and television station operating under franchise shall grant the Commission, upon
payment of just compensation, at least thirty (30) minutes of prime time daily to be known as
'Comelec Time' . . ." And yet, even with such a judicious legal position taken by the very agency
tasked by the Constitution to administer elections, the majority still insists on an arbitrary seizure of
precious property produced and owned by private enterprise.
That Petitioner GMA is a viable, even profitable, enterprise 24 is no argument for seizing its profits. The State cannot
rob the rich to feed the poor in the guise of promoting the "common good." Truly, the end never justifies the means.

It cannot be denied that the amount and the extent of the air time demanded from GMA is huge and
exorbitant, amounting, I repeat, to over P58 million for the 1998 election season alone. If the air time
required from "every radio and television station" in the country in the magnitude stated in the
aforesaid Comelec Resolution 2983-A is added up and costed, the total would indeed be staggering
in several hundred million pesos.
Smacking of undisguised discrimination is the fact that in PPI vs. Comelec, this Court has required
payment of print media ads but, in this case, compels broadcast stations to donate their end product
on a massive scale. The simplistic distinction given that radio and TV stations are mere grantees
of government franchises while newspaper companies are not does not justify the grand larceny
of precious air time. This is a violation not only of private property, but also of the constitutional right
to equal protection itself. The proffered distinction between print and broadcast media is too
insignificant and too flimsy to be a valid justification for the discrimination. The print and broadcast
media are equal in the sense that both derive their revenues principally from paid ads. They should
thus be treated equally by the law in respect of such ads.
To sum up, the Bill of Rights of our Constitution expressly guarantees the following rights:
1. No person, whether rich or poor, shall be deprived of property without due process. 25

2. Such property shall not be taken by the government, even for the use of the general public,
without first paying just compensation to the owner. 26
3. No one, regardless of social or financial status, shall be denied equal protection of the law. 27
The majority, however, peremptorily brushes aside all these sacred guarantees and prefers to rely
on the nebulous legal theory that broadcast stations are mere recipients of state-granted franchises
which can be altered or withdrawn anytime or otherwise burdened with post facto elephantine yokes.
By this short-circuited rationalization, the majority blithely ignores the private entrepreneurs' billionpeso investments and the broadcast professionals' grit and toil in transforming these invisible
franchises into merchandisable property; and conveniently forgets the grim reality that the taking of
honestly earned media assets is unbridled, exorbitant and arbitrary. Worse, the government, 28 against
which these constitutional rights to property were in the first place written, prudently agrees to respect them and to pay adequate
compensation for their taking. But ironically, the majority rejects the exemplary observance by the government of the people's rights and
insists on the confiscation of their private property.

I have always believed that the Supreme Court is the ever vigilant guardian of the constitutional
rights of the citizens and their ultimate protector against the tyrannies of their own government. I am
afraid that by this unfortunate Decision, the majority, in this instance, has instead converted this
honorable and majestic Court into the people's unwitting oppressor.
WHEREFORE, I vote to GRANT the petition and to declare Section 92 of the Omnibus Election
Code UNCONSTITUTIONAL and VOID.
Purisima, J., dissents.
Footnotes

1 Reiterated in Kapisanan ng mga Broadkaster sa Pilipinas (Negros Occidental

Chapter) v. COMELEC, (res.), G.R. No. 132749, April 2, 1998.
2 Emergency Powers Cases [Araneta v. Dinglasan], 84 Phil. 368 (1949), Iloilo Palay
and Corn Planters Ass'n v. Feliciano, 121 Phil. 358 (1965); Philconsa v. Gimenez,
122 Phil. 894 (1965); CLU v. Executive Secretary, 194 SCRA 317 (1991).
3 Lawyers League for a Better Philippines v. Aquino, G.R. Nos. 73748, 73972 and
73990, May 22, 1986; In re Bermudez, 145 SCRA 160 (1986); Tatad v. Garcia, Jr.,
243 SCRA 436, 473 (1995) (Mendoza, J., concurring).
4 CONST., ART. VI, 24-25 and 29.
5 In Valmonte v. Philippine Charity Sweepstakes Office, (res), G.R. No. 78716, Sept.
22, 1987, we held that the party bringing a suit challenging the constitutionality of a
law must show "not only that the law is invalid, but also that he has sustained or is in
immediate danger of sustaining some direct injury as a result of its enforcement, and
not merely that he suffers thereby in some indefinite way. It must appear that the
person complaining has been or is about to be denied some right or privilege to
which he is lawfully entitled or that he is about to be subjected to some burdens or
penalties by reason of the statute complained of." (Emphasis added)
6 Art. III, 1 provides: "No person shall be deprived of life, liberty, or property without
due process of law, nor shall any person be denied the equal protection of the laws."

7 Id., 9 provides: "Private Property shall not be taken for public use without just
compensation.
8 Memorandum for Petitioners, pp. 21-28.
9 Eastern Broadcasting Corp. (DYRE) v. Dans, Jr., 137 SCRA 628 (1985); Red Lion
Broadcasting Corp. Co. v. FCC, 395 U.S. 367, 23 L. Ed2d 371 (1969). See The
Radio Act (Act No. 3846, as amended), 3(c) & (d).
10 Art, XII, 11.
11 Red Lion Broadcasting Corp. v. FCC, 395 U.S. at 390, 23 L.Ed.2d at 389.
12 E.g., OWEN M. FISS, THE IRONY OF THE FREE SPEECH 2-3 (1996) ("Surely
the state can be an oppressor, but it may also be a source of freedom . . . In some
instances, instrumentalities of the state will try to stifle free and open debate, and the
First Amendment is the tried-and-true mechanism that stops or prevents such abuse
of state power. In other instances, however, the state may have to further the
robustness of public debate . . . It may have to allocate public resources . . . to those
whose voices would not otherwise be heard in the public square."); CASS R.
SUNSTEIN, DEMOCRACY AND THE PROBLEM OF FREE SPEECH 50-51 (1993)
("The idea that threats to speech stem from the government is undoubtedly correct,
but as usually understood, it is far too simple. Sometimes threats come from what
seems to be the private sphere, and, much more fundamentally, these threats could
not be made without legal entitlements that enable some private actors but not others
to speak and to be heard . . . [Government regulation] may therefore be necessary.")
13 CASS R. SUNSTEIN, id., at 85 (emphasis added).
14 32 Phil. 541 (1915).
15 The Court said:
Considerable expenditures of public money have been made in the past and
continue to be made annually for the purpose of securing the safety of vessels plying
in Philippine waters. [Here the Court enumerated many government facilities to make
the coastwise transportation safe.] Can it be fairly contended that a regulation is
unreasonable which requires vessels licensed to engage in the interisland trade, in
whose behalf the public funds are so lavishly expended, to hold themselves in
readiness to carry the public mails when duly tendered for transportation, and to give
such reasonable notice of their sailing hours as will insure the prompt dispatch of all
mails ready for delivery at the hours thus designated? Id., at 552.
16 241 SCRA 486 (1995).
17 190 SCRA 717, 734 (1990) (italics by the Court).
18 For example, under the Radio Act (Act No. 3846, as amended), the government
performs, inter alia, the following functions:

Sec. 3. The Secretary of Public Works and Communications is hereby empowered,

to regulate the construction or manufacture, possession, control, sale and transfer or
radio transmitters or transceivers (combination transmitter-receiver) and the
establishment, use, the operation of all radio stations and of all form of radio
communications and transmissions within the Philippines. In addition to the above he
shall have the following specific powers and duties;
xxx xxx xxx
(c) He shall assigns call letter and assign frequencies for each station licensed by
him for each station established by virtue of a franchise granted by the Congress of
the Philippines and specify the stations to which each of such frequencies may be
used;
(d) He shall promulgate rules and regulations to prevent and eliminate interference
between stations and carry out the provisions of this Act and the provisions of the
International Radio Regulations:Provided, however, That changes in the frequencies
or in the authorized power, or in the character of omitted signals, or in the type of the
power supply, or in the hours of operations of any licensed stations, shall not be
made without first giving the station license a hearing.
19 395 U.S. at 394, 23 L.Ed.2d at 391, quoting 47 U.S.C. 301.
20 395 U.S. at 389, 23 L.Ed.2d at 388-389.
21 260 U.S. 22, 67 L.Ed. 107 (1922).
22 260 U.S. at 31, 67 L.Ed. at 112. HOLMES-LASKI LETTERS 457, quoted in P.
FREUND, A. SUTHERLAND, M. HOWE AND B. BROWN, CONSTITUTION LAW,
CASES AND OTHER PROBLEMS 1095 (1978).
23 Art. IX-C, 4.
24 B.P. Blg. 881 took effect on Dec. 3, 1985, whereas R.A. No. 7252 took effect on
March 20, 1992.
25 Memorandum for Petitioners, p. 17.
26 Ibid.
27 244 SCRA 272 (1995).
28 In the United States, because of recognition of these differences in the
characteristics of news media, it has been held that broadcast stations may be
required to give persons subjected to personal attack during discussion of an
important public issue the right to reply. (Red Lion Broadcasting Corp. v. FCC, 395
U.S. 367, 23 L.Ed.2d 371 (1969), but similar "right of reply" is inapplicable to
newspapers. It was pointed out that a statute providing for such right "operates as a
command in the same sense as a statute or regulation forbidding [the newspaper] to
publish specified matter . . . [It] exacts a penalty on the basis of the content of a
newspaper. The first phase of the penalty [is] exacted in terms of the cost in printing

and in taking up space that could be devoted to other material the newspaper may
have preferred to print . . . [Faced with such a penalty] editors might well conclude
that the safe course is to avoid controversy. [Thus, the government-enforced] right of
access inescapably "dampens the vigor and limits the variety of public debate."
(Miami Herald Pub. Co. v. Tornillo, 418 U.S. 241, 4L.Ed.2d 730 (1974))
29 Eastern Broadcasting (DYRE) Corporation v. Dans, Jr., 137 SCRA at 635.
30 Id., at 635-636.
31 This provision reads: "The Commission may, during the election period, supervise
or regulate the enjoyment or utilization of all franchises or permits for the operation of
transportation and other utilities, media of communication or information, all grants,
special privileges, or concessions granted by the Government or any subdivision,
agency, or instrumentality thereof, including any government-owned or controlled
corporation or its subsidiary. Such supervision or regulation shall aim to ensure equal
opportunity, time, and space, and the rights to reply, including reasonable, equal
rates therefor, for public information campaigns and forums among candidates in
connection with the objective of holding free, orderly, honest, peaceful, and credible
elections."
ROMERO, J., dissenting;
1 Cooley, Thomas, II A Treatise on Constitutional Limitations, pp. 1110, [1927].
2 Supra, at p. 1119.
3 Horack, Frank, Sutherland Statutory Construction, p. 279 [1939].
4 Association of Small Landowners of the Philippines, Inc. vs. Secretary of Agrarian
Reform, 175 SCRA 343 [1989].
5 108 Phil. 144.
6 See Cooley, Thomas II Constitutional Limitations, 8th Ed, pp. 1224 [1927].
7 348 US 1954 (1964).
8 438 US 104.
9 260 US 393.
10 Cooley, Thomas, II Constitutional Limitations, pp. 1161 [1927].
11 Napocor v. CA, 129 SCRA 665 [1984]; Garcia v. CA, 102 SCRA 597 [1981];
Republic v. PLDT, 26 SCRA 620 [1969].
12 244 SCRA 272 [1995].
13 Supra.

14 See Section 11, Article XII of the 1987 Constitution.

PANGANIBAN, J., dissenting;
1 92 of BP Blg. 881 (Omnibus Election Code) provides:
Sec. 92. Comelec time. The Commission shall procure radio and television time to
be known as "Comelec Time" which shall be allocated equally and impartially among
the candidates within the area of coverage of all radio and television stations. For this
purpose, the franchise of all radio broadcasting and television stations are hereby
amended so as to provide radio or television time, free of charge, during the period of
the campaign.
2 244 SCRA 272, May 22, 1995, per Feliciano, J.
3 9, Art. III of the Constitution provides:
Sec. 9. Private property shall not be taken for public use without just compensation.
4 Pp. 6-7, Decision in GR 132922.
5 Finch, adopted by Blackstone in State v. Twin Village Water Co., 98 Me 214, 56 A
763 (1903), cited in Radio Communication of the Philippines, Inc. vs. National
Telecommunications Commission, 150 SCRA 450, 457, May 29, 1987. Also in Lim
vs. Pacquing, 240 SCRA 649, 678, January 27, 1995.
6 Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of the
Philippines, p. 2, Vol. II, (1992); citing 3 Planiol & Ripert 59.
7 36 Am Jur 2d, 4 Franchises.
8 Ibid., 5.
9 Ibid., citing Los Angeles v. Los Angeles Gas & Electric Corp. 251 US 32, 64 L ed.
121, 40 S Ct 76; United States v. Brooklyn Union Gas Co. (CA 2 NY) 168 F 2d 391;
South California Gas Co. v. Los Angeles, 50 Cal 2d 713, 329 P 2d 289. Also in
English Ave. Coach Corp. v. New York, 286 NY 84, 35 NE 2d 907.
10 See footnote no. 3.
11 36 Am Jur 2d, 8 Franchises, citing Grand Turk Western R. Co. v. South Bend,
227 US 544, 57 L ed. 633, 33 S Ct 303; Wilcox Consolidated Gas Co., 212 US 19, 53
L ed. 382, 29 S Ct 192; Wilmington & W.R. Co. v. Reid, 13 Wall (US) 264, 20 L ed.
568; Arkansas State Highway Commission v. Arkansas Power & Light Co., 231 Ark
307, 330 SW 2d 77; and others.
12 11, Art. XII of the Constitution provides:
Sec. 11. No franchise, certificate, or any other form of authorization for the operation
of a public utility shall be granted except to citizens of the Philippines or to
corporations or associations organized under the laws of the Philippines at least

sixty per centum of whose capital is owned by such citizens, nor shall such franchise,
certificate or authorization be exclusive in character or for a longer period than fifty
years. Neither shall any such franchise or right be granted except under the condition
that is shall be subject to amendment, alteration, or repeal by the Congress when the
common good so requires. The State shall encourage equity participation in public
utilities by the general public. The participation of foreign investors in the governing
body of any public utility enterprise shall be limited to their proportionate share in its
capital, and all the executive and managing officers of such corporation or
association must be citizens of the Philippines.
13 244 SCRA at p. 279.
14 Blo Urrquar Adiong v. Comelec, 207 SCRA 712, 719, March 31, 1992, per
Gutierrez, J., cited in Memorandum for Petitioners, p. 15.
15 Gonzales vs. Comelec, 27 SCRA 835, 871, April 18, 1969, per Fernando, J.
16 People vs. Nazario, 165 SCRA 186, 195, August 31, 1988, per Sarmiento, J.
17 See pp. 20-27 for the detailed computation.
18 Agbayani, Aguendo F., Commentaries and Jurisprudence on the Commercial
Laws of the Philippines, p. 560, 1993 ed.; citing Fisher vs. Yangco Steamship
Company, 31 Phil 1, (1915), referring to Chicago etc. R. Co. vs. Minnesota, 134 U.S.
418, Minneapolis Eastern R. Co. vs. Minnesota, 134 U.S. 467, Chicago etc. R. Co.
vs. Wellman, 143 U.S. 339, Smyth vs. Arnes, 169 U.S. 466, 524, Henderson Bridge
Co. vs. Henderson City, 173 U.S. 592, 614.
19 36 Am Jur 2d 732; citing Los Angeles v. Los Angeles Gas & E. Corp. 251 U.S. 32,
64 L ed 121, 40 S Ct 76; United States v. Brooklyn Union Gas Co. (CA2 NY) 168 F2d
391; Southern California Gas Co. v. Los Angeles, 50 Cal 2d 713, 329 P2d 289, cert
den 359 US 907, 3 L ed 2d 572, 79 S Ct 583.
20 Apart from paying "supervision fees," broadcast media also pay normal taxes,
imposts, fees, assessments and other government charges.
21 36 Am Jur 2d pp. 724 and 727; citing Gordon v. Appeal Tax Ct. 3 How (US) 133,
11 L ed. 529; Bridgeport v. New York & N.H.R. Co., 36 Conn 255; Consolidated Gas
Co. v. Baltimore, 101 Md 541, 61 A 532.
22 In the case of ABS-CBN Broadcasting Corporation, the amount is much larger:
P3,196,912,000, per its Audited Consolidated Financial Report as of December 31,
1996, on file with the SEC.
23 At p. 20. See also Annex B of said Memorandum.
24 This is not to say that all broadcast networks are profitable. A comparative study
of their Financial Statements on file with the SEC shows that a majority are not really
profitable.
25 1, Art. III of the Constitution.

26 9, Art. III of the Constitution.

27 1, Art. III of the Constitution.
28 As personified in this case by the Comelec.

SECOND DIVISION

[G.R. No. 137285. January 16, 2001]

ESTATE OF SALUD JIMENEZ, petitioner, vs. PHILIPPINE EXPORT

PROCESSING ZONE, respondent.
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision[1] and the Resolution[2]of the
Court of Appeals[3] dated March 25, 1998 and January 14, 1999, respectively, which ordered the
Presiding Judge of the Regional Trial Court of Cavite City, Branch 17, to proceed with the
hearing of the expropriation proceedings regarding the determination of just compensation for
Lot 1406-B while setting aside the Orders dated August 4, 1997 [4] and November 3, 1997 of the
said Regional Trial Court which ordered the peaceful turnover to petitioner Estate of Salud
Jimenez of said Lot 1406-B.
The facts are as follows:
On May 15, 1981, private respondent Philippine Export Processing Zone (PEZA), then
called as the Export Processing Zone Authority (EPZA), initiated before the Regional Trial Court
of Cavite expropriation proceedings[5] on three (3) parcels of irrigated riceland in Rosario,
Cavite. One of the lots, Lot 1406 (A and B) of the San Francisco de Malabon Estate, with an
approximate area of 29,008 square meters, is registered in the name of Salud Jimenez under TCT
No. T-113498 of the Registry of Deeds of Cavite.
More than ten (10) years later[6], the said trial court in an Order[7] dated July 11, 1991 upheld the
right of private respondent PEZA to expropriate, among others, Lot 1406 (A and B). Reconsideration of
the said order was sought by petitioner contending that said lot would only be transferred to a private
corporation, Philippine Vinyl Corp., and hence would not be utilized for a public purpose.

In an Order[8] dated October 25, 1991, the trial court reconsidered the Order dated July 11,
1991 and released Lot 1406-A from expropriation while the expropriation of Lot 1406-B was
maintained. Finding the said order unacceptable, private respondent PEZA interposed an appeal
to the Court of Appeals.

Meanwhile, petitioner wrote a letter to private respondent offering two (2) proposals,
namely:
1. Withdrawal of private respondents appeal with respect to Lot 1406-A in consideration of the
waiver of claim for damages and loss of income for the possession of said lot by private
respondent.
2. The swap of Lot 1406-B with Lot 434 covered by TCT No. T-14772 since private respondent
has no money yet to pay for the lot.

Private respondents Board approved the proposal and the compromise agreement was
signed by private respondent through its then administrator Tagumpay Jardiniano assisted by
Government Corporate Counsel Oscar I. Garcia. Said compromise agreement[9] dated January 4,
1993 is quoted hereunder:
1. That plaintiff agrees to withdraw its appeal from the Order of the Honorable Court dated
October 25, 1991 which released lot 1406-A from the expropriation proceedings. On the
other hand, defendant Estate of Salud Jimenez agrees to waive, quitclaim and forfeit its
claim for damages and loss of income which it sustained by reason of the possession of said
lot by plaintiff from 1981 up to the present.
2. That the parties agree that defendant Estate of Salud Jimenez shall transfer lot 1406-B with
an area of 13,118 square meters which forms part of the lot registered under TCT No.
113498 of the Registry of Deeds of Cavite to the name of the plaintiff and the same shall be
swapped and exchanged with lot 434 with an area of 14,167 square meters and covered by
Transfer Certificate of Title No. 14772 of the Registry of Deeds of Cavite which lot will be
transferred to the name of Estate of Salud Jimenez.
3. That the swap arrangement recognizes the fact that the lot 1406-B covered by TCT No. T113498 of the estate of defendant Salud Jimenez is considered expropriated in favor of the
government based on Order of the Honorable Court dated July 11, 1991. However, instead
of being paid the just compensation for said lot, the estate of said defendant shall be paid
with lot 434 covered by TCT No. T-14772.
4. That the parties agree that they will abide by the terms of the foregoing agreement in good
faith and the Decision to be rendered based on this Compromise Agreement is immediately
final and executory.

The Court of Appeals remanded the case to the trial court for the approval of the said
compromise agreement entered into between the parties, consequent with the withdrawal of the
appeal with the Court of Appeals. In the Order[10] dated August 23, 1993, the trial court approved
the compromise agreement.
However, private respondent failed to transfer the title of Lot 434 to petitioner inasmuch as
it was not the registered owner of the covering TCT No. T-14772 but Progressive Realty Estate,
Inc. Thus, on March 13, 1997, petitioner Estate filed a Motion to Partially Annul the Order
dated August 23, 1993.[11]
In the Order[12] dated August 4, 1997, the trial court annulled the said compromise agreement
entered into between the parties and directed private respondent to peacefully turn over Lot
1406-A to the petitioner. Disagreeing with the said Order of the trial court, respondent PEZA
moved[13] for its reconsideration. The same proved futile since the trial court denied
reconsideration in its Order[14] dated November 3, 1997.

On December 4, 1997, the trial court, at the instance [15] of petitioner, corrected the Orders
dated August 4, 1997 and November 3, 1997 by declaring that it is Lot 1406-B and not Lot 1406A that should be surrendered and returned to petitioner.
On November 27, 1997, respondent interposed before the Court of Appeals a petition for
certiorari and prohibition[16] seeking to nullify the Orders dated August 4, 1997 and November 3,
1997 of the trial court. Petitioner filed its Comment[17]on January 16, 1998.
Acting on the petition, the Court of Appeals in a Decision [18]dated March 25, 1998 upheld the
rescission of the compromise agreement, ratiocinating thus:

A judicial compromise may be enforced by a writ of execution, and if a party fails or

refuses to abide by the compromise, the other party may regard it as rescinded and
insist upon his original demand. This is in accordance with Article 2041 of the Civil
Code which provides:
If one of the parties fails or refuses to abide by the compromise, the other party may
either enforce the compromise or regard it as rescinded and insist upon his original
demand.
The Supreme Court had the occasion to explain this provision of law in the case of
Leonor v. Sycip (1 SCRA 1215). It ruled that the language of the abovementioned
provision denotes that no action for rescission is required and that the aggrieved party
by the breach of compromise agreement, may regard the compromise agreement
already rescinded, to wit:
It is worthy of notice, in this connection, that, unlike Article 2039 of the same Code,
which speaks of a cause of annulment or rescission of the compromise and provides
that the compromise may be annulled or rescinded for the cause therein specified,
thus suggesting an action for annulment or rescission, said Article 2041 confers upon
the party concerned not a cause for rescission, or the right to demand rescission,
of a compromise, but the authority, not only to regard it as rescinded, but, also, to
insist upon his original demand. The language of this Article 2041, particularly
when contrasted with that of Article 2039, denotes that no action for rescission is
required in said Article 2041, and that the party aggrieved by the breach of a
compromise agreement may, if he chooses, bring the suit contemplated or involved in
his original demand, as if there had never been any compromise agreement, without
bringing an action for rescission thereof. He need not seek a judicial declaration of
rescission, for he may regard the compromise agreement already, rescinded.
Nonetheless, it held that:

Having upheld the rescission of the compromise agreement, what is then the status of
the expropriation proceedings? As succinctly discussed in the case of Leonor v.

Sycip, the aggrieved party may insist on his original demand as if there had never
been any compromise agreement. This means that the situation of the parties will
revert back to status before the execution of the compromise agreement, that is, the
second stage of the expropriation proceedings which is the determination of the just
compensation.[19]
x

Thus, the appellate court partially granted the petition by setting aside the order of the trial
court regarding the peaceful turn over to the Estate of Salud Jimenez of Lot No. 1406-B and
instead ordered the trial judge to proceed with the hearing of the expropriation proceedings
regarding the determination of just compensation over Lot 1406-B.[20]
Petitioner sought[21] reconsideration of the Decision dated March 25, 1998. However, public
respondent in a Resolution[22] dated January 14, 1999 denied petitioners motion for
reconsideration.
Hence, this petition anchored on the following assignment of errors, to wit:
I

THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE

ERROR IN GIVING DUE COURSE TO THE SPECIAL CIVIL ACTION
FILED BY RESPONDENT PEZA IN CA-G.R. SP. NO. 46112 WHEN IT WAS
MADE A SUBSTITUTE FOR LOST APPEAL IN CLEAR CONTRAVENTION
OF THE HONORABLE COURTS RULING IN SEMPIO VS. COURT OF
APPEALS (263 SCRA 617) AND ONGSITCO VS. COURT OF APPEALS (255
SCRA 703) AND DESPITE THE FACT THAT THE ORDER OF THE CAVITE
REGIONAL TRIAL COURT IS ALREADY FINAL AND EXECUTORY.
II

GRANTING IN GRATIA ARGUMENTI THAT THE SPECIAL CIVIL ACTION

OF CERTIORARI IS PROPER, THE COURT OF APPEALS
NEVERTHELESS WRONGLY INTERPRETED THE PHRASE ORIGINAL
DEMAND CONTAINED IN ARTICLE 2041 OF THE CIVIL CODE. THE
ORIGINAL DEMAND OF PETITIONER ESTATE IS THE RETURN OF THE
SUBJECT LOT (LOT 1406-B) WHICH IS SOUGHT TO BE EXPROPRIATED
AND NOT THE DETERMINATION OF JUST COMPENSATION FOR THE
LOT. FURTHERMORE, EVEN IF THE INTERPRETATION OF THE COURT
OF APPEALS OR THE IMPORT OF THE PHRASE IN QUESTION IS
CORRECT, IT IS ARTICLE 2039 OF THE CIVIL CODE AND NOT ARTICLE

2041 WHICH IS APPLICABLE TO COMPROMISE AGREEMENTS

APPROVED BY THE COURTS.[23]
We rule in favor of the respondent.
Petitioner contends that the Court of Appeals erred in entertaining the petition
for certiorari filed by respondent under Rule 65 of the Rules of Court, the same being actually a
substitute for lost appeal. It appeared that on August 11, 1997, respondent received the Order of
the trial court dated August 4, 1997 annulling the compromise agreement. On August 26, 1997,
the last day for the filing of a notice of appeal, respondent filed instead a motion for
reconsideration. The Order of the trial court denying the motion for reconsideration was
received by respondent on November 23, 1997. The reglementary period to appeal therefore
lapsed on November 24, 1997. On November 27, 1997, however, respondent filed with the
Court of Appeals a petition for certiorari docketed as CA-G.R. SP. No. 46112. Petitioner claims
that appeal is the proper remedy inasmuch as the Order dated August 4, 1997 of the Regional
Trial Court is a final order that completely disposes of the case. Besides, according to petitioner,
respondent is estopped in asserting that certiorari is the proper remedy inasmuch as it invoked
the fifteen (15) day reglementary period for appeal when it filed a motion for reconsideration on
August 26, 1997 and not the sixty (60) day period for filing a petition for certiorariunder Rule 65
of the Rules of Court.
The Court of Appeals did not err in entertaining the petition for certiorari under Rule 65 of
The Rules of Court. A petition for certiorari is the proper remedy when any tribunal, board, or
officer exercising judicial or quasi-judicial functions has acted without or in excess of its
jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction and
there is no appeal, nor any plain, speedy, and adequate remedy at law. [24] Grave abuse of
discretion is defined as the capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction. An error of judgment committed in the exercise of its legitimate jurisdiction
is not the same as grave abuse of discretion. An abuse of discretion is not sufficient by itself to
justify the issuance of a writ of certiorari. The abuse must be grave and patent, and it must be
shown that the discretion was exercised arbitrarily and despotically.[25]
As a general rule, a petition for certiorari will not lie if an appeal is the proper remedy
thereto such as when an error of judgment as well as of procedure are involved. As long as a
court acts within its jurisdiction and does not gravely abuse its discretion in the exercise thereof,
any supposed error committed by it will amount to nothing more than an error of judgment
reviewable by a timely appeal and not assailable by a special civil action of certiorari. However,
in certain exceptional cases, where the rigid application of such rule will result in a manifest
failure or miscarriage of justice, the provisions of the Rules of Court which are technical rules
may be relaxed. Certiorari has been deemed to be justified, for instance, in order to prevent
irreparable damage and injury to a party where the trial judge has capriciously and whimsically
exercised his judgment, or where there may be danger of clear failure of justice, or where an
ordinary appeal would simply be inadequate to relieve a party from the injurious effects of the
judgment complained of.[26]
Expropriation proceedings involve two (2) phases. The first phase ends either with an order
of expropriation (where the right of plaintiff to take the land and the public purpose to which
they are to be devoted are upheld) or an order of dismissal. Either order would be a final one

since it finally disposes of the case. The second phase concerns the determination of just
compensation to be ascertained by three (3) commissioners. It ends with an order fixing the
amount to be paid to the defendant. Inasmuch as it leaves nothing more to be done, this order
finally disposes of the second stage. To both orders the remedy therefrom is an appeal.[27]
In the case at bar, the first phase was terminated when the July 11, 1991 order of
expropriation became final and the parties subsequently entered into a compromise agreement
regarding the mode of payment of just compensation. When respondent failed to abide by the
terms of the compromise agreement, petitioner filed an action to partially rescind the same.
Obviously, the trial could only validly order the rescission of the compromise agreement anent
the payment of just compensation inasmuch as that was the subject of the
compromise. However, on August 4, 1991, the trial court gravely abused its discretion when it
ordered the return of Lot 1406-B. It, in effect, annulled the Order of Expropriation dated July 11,
1991 which was already final and executory.
We affirm the appellate courts reliance on the cases of Aguilar v. Tan[28] and Bautista v.
Sarmiento[29] wherein it was ruled that the remedies of certiorari and appeal are not mutually exclusive remedies in
certain exceptional cases, such as when there is grave abuse of discretion, or when public welfare so requires. The
trial court gravely abused its discretion by setting aside the order of expropriation which has long become final and
executory and by ordering the return of Lot 1406-B to the petitioner. Its action was clearly beyond its jurisdiction
for it cannot modify a final and executory order. A final and executory order can only be annulled by a petition to
annul the same on the ground of extrinsic fraud and lack of jurisdiction [30] or a petition for relief from a final order or
judgment under Rule 38 of the Rules of Court. However, no petition to that effect was filed. Hence, though an
order completely and finally disposes of the case, if appeal is not a plain, speedy and adequate remedy at law or the
interest of substantial justice requires, a petition for certiorari may be availed of upon showing of lack or excess of
jurisdiction or grave abuse of discretion on the part of the trial court.

According to petitioner the rule that a petition for certiorari can be availed of despite the
fact that the proper remedy is an appeal only applies in cases where the petition is filed within
the reglementary period for appeal. Inasmuch as the petition in the case at bar was filed after the
fifteen (15) day regulatory period to appeal, said exceptional rule as enshrined in the cases
of Aguilar v. Tan[31] and Bautista v. Sarmiento[32] is not applicable. We find this interpretation too restrictive. The
said cases do not set as a condition sine qua non the filing of a petition for certiorari within the fifteen (15) day
period to appeal in order for the said petition to be entertained by the court. To espouse petitioners contention
would render inutile the sixty (60) day period to file a petition for certiorari under Rule 65. In Republic v. Court of
Appeals[33], which also involved an expropriation case where the parties entered into a compromise agreement on
just compensation, this Court entertained the petition for certiorari despite the existence of an appeal and despite its
being filed after the lapse of the fifteen (15) day period to appeal the same. We ruled that the Court has not too
infrequently given due course to a petition for certiorari, even when the proper remedy would have been an appeal,
where valid and compelling considerations would warrant such a recourse. [34] If compelled to return the subject
parcel of land, the respondent would divert its budget already allocated for economic development in order to pay
petitioner the rental payments from the lessee banks. Re-adjusting its budget would hamper and disrupt the
operation of the economic zone. We believe that the grave abuse of discretion committed by the trial court and the
consequent disruption in the operation of the economic zone constitutes valid and compelling reasons to entertain
the petition.

Petitioner next argues that the instances cited under Section 1 of Rule 41 of the Rules of
Court[35] whereby an appeal is not allowed are exclusive grounds for a petition for certiorari.
Inasmuch as the August 4 1997 Order rescinding the compromise agreement does not fall under
any of the instances enumerated therein, a petition for certiorari will not prosper. This reasoning
is severely flawed. The said section is not phrased to make the instances mentioned therein the
sole grounds for a petition for certiorari. It only states that Rule 65 may be availed of under the

grounds mentioned therein, but it never intended said enumeration to be exclusive. It must be
remembered that a wide breadth of discretion is granted a court of justice
in certiorari proceedings.[36]
In the second assignment of error, petitioner assails the interpretation by the Court of
Appeals of the phrase original demand in Article 2041 of the New Civil Code vis-a-vis the case
at bar. Article 2041 provides that, If one of the parties fails or refuses to abide by the
compromise, the other party may either enforce the compromise or regard it as rescinded and
insist upon his original demand. According to petitioner, the appellate court erred in interpreting
original demand as the fixing of just compensation. Petitioner claims that the original demand
is the return of Lot 1406-B as stated in petitioners motion to dismiss [37] the complaint for
expropriation inasmuch as the incorporation of the expropriation order in the compromise
agreement subjected the said order to rescission. Since the order of expropriation was rescinded,
the authority of respondent to expropriate and the purpose of expropriation have again become
subject to dispute.
Petitioner cites cases[38] which provide that upon the failure to pay by the lessee, the lessor
can ask for the return of the lot and the ejectment of the former, this being the lessors original
demand in the complaint. We find said cases to be inapplicable to this instant case for the reason
that the case at bar is not a simple ejectment case. This is an expropriation case which involves
two (2) orders: an expropriation order and an order fixing just compensation. Once the first
order becomes final and no appeal thereto is taken, the authority to expropriate and its public use
cannot anymore be questioned.
Contrary to petitioners contention, the incorporation of the expropriation order in the
compromise agreement did not subject said order to rescission but instead constituted an
admission by petitioner of respondents authority to expropriate the subject parcel of land and the
public purpose for which it was expropriated. This is evident from paragraph three (3) of the
compromise agreement which states that the swap arrangement recognizes the fact that Lot
1406-B covered by TCT No. T-113498 of the estate of defendant Salud Jimenez is considered
expropriated in favor of the government based on the Order of the Honorable Court dated July
11, 1991. It is crystal clear from the contents of the agreement that the parties limited the
compromise agreement to the matter of just compensation to petitioner. Said expropriation order
is not closely intertwined with the issue of payment such that failure to pay by respondent will
also nullify the right of respondent to expropriate. No statement to this effect was mentioned in
the agreement. The Order was mentioned in the agreement only to clarify what was subject to
payment.
This Court therefore finds that the Court of Appeals did not err in interpreting original
demand to mean the fixing of just compensation. The authority of respondent and the nature of
the purpose thereof have been put to rest when the Expropriation Order dated July 11, 1991
became final and was duly admitted by petitioner in the compromise agreement. The only issue
for consideration is the manner and amount of payment due to petitioner. In fact, aside from the
withdrawal of private respondents appeal to the Court of Appeals concerning Lot 1406-A, the
matter of payment of just compensation was the only subject of the compromise agreement dated
January 4, 1993. Under the compromise agreement, petitioner was supposed to receive
respondents Lot No. 434 in exchange for Lot 1406-B. When respondent failed to fulfill its
obligation to deliver Lot 434, petitioner can again demand for the payment but not the return of

the expropriated Lot 1406-B. This interpretation by the Court of Appeals is in accordance with
Sections 4 to 8, Rule 67 of the Rules of Court.
We also find as inapplicable the ruling in Gatchalian v. Arlegui[39], a case cited by petitioner,
where we held that even a final judgment can still be compromised so long as it is not fully
satisfied. As already stated, the expropriation order was not the subject of the compromise
agreement. It was only the mode of payment which was the subject of the compromise
agreement. Hence, the Order of Expropriation dated July 11, 1991 can no longer be annulled.
After having invoked the provisions of Article 2041, petitioner inconsistently contends that
said article does not apply to the case at bar inasmuch as it is only applicable to cases where a
compromise has not been approved by a court. In the case at bar, the trial court approved the
compromise agreement. Petitioner insists that Articles 2038, 2039 and 1330 of the New Civil
Code should apply. Said articles provide that:

Article 2038. A compromise in which there is mistake, fraud, violence, intimidation,

undue influence, or falsity of documents, is subject to the provisions of Article 1330 of
this Code.
However, one of the parties cannot set up a mistake of fact as against the other if the
latter, by virtue of the compromise, has withdrawn from a litigation already
commenced.
Article 2039. When the parties compromise generally on all differences which they
might have with each other, the discovery of documents referring to one or more but
not to all of the questions settled shall not itself be a cause for annulment or rescission
of the compromise, unless said documents have been concealed by one of the parties.
But the compromise may be annulled or rescinded if it refers only to one thing to
which one of the parties has no right, as shown by the newly discovered documents.
(n)
Article 1330. A contract where consent is given through mistake, violence,
intimidation, undue influence, or fraud is voidable. [40]
The applicability of the above-quoted legal provisions will not change the outcome of the
subject of the rescission. Since the compromise agreement was only about the mode of payment
by swapping of lots and not about the right and purpose to expropriate the subject Lot 1406-B,
only the originally agreed form of compensation that is by cash payment, was rescinded.
This Court holds that respondent has the legal authority to expropriate the subject Lot 1406B and that the same was for a valid public purpose. In Sumulong v. Guerrero[41], this Court has
ruled that,

the public use requirement for a valid exercise of the power of eminent domain is a
flexible and evolving concept influenced by changing conditions. In this jurisdiction,
the statutory and judicial trend has been summarized as follows:
this Court has ruled that the taking to be valid must be for public use. There was a
time when it was felt that a literal meaning should be attached to such a
requirement. Whatever project is undertaken must be for the public to enjoy, as in the
case of streets or parks. Otherwise expropriation is not allowable. It is not
anymore. As long as the purpose of the taking is public, then the power of eminent
domain comes into play It is accurate to state then that at present whatever may be
beneficially employed for the general welfare satisfies the requirement of public
use. [Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 (1983) at 234-235 quoting E.
Fernando, the Constitution of the Philippines 523-4 (2nd Ed. 1977)
The term public use has acquired a more comprehensive coverage. To the literal
import of the term signifying strict use or employment by the public has been added
the broader notion of indirect public benefit or advantage.
In Manosca v. Court of Appeals, this Court has also held that what ultimately emerged is a
concept of public use which is just as broad as public welfare.[42]
Respondent PEZA expropriated the subject parcel of land pursuant to Proclamation No.
1980 dated May 30, 1980 issued by former President Ferdinand Marcos. Meanwhile, the power
of eminent domain of respondent is contained in its original charter, Presidential Decree No. 66,
which provides that:

Section 23. Eminent Domain. For the acquisition of rights of way, or of any
property for the establishment of export processing zones, or of low-cost housing
projects for the employees working in such zones, or for the protection of watershed
areas, or for the construction of dams, reservoirs, wharves, piers, docks, quays,
warehouses and other terminal facilities, structures and approaches thereto, the
Authority shall have the right and power to acquire the same by purchase, by
negotiation, or by condemnation proceedings. Should the authority elect to exercise
the right of eminent domain, condemnation proceedings shall be maintained by and in
the name of the Authority and it may proceed in the manner provided for by law.
(italics supplied)
Accordingly, subject Lot 1406-B was expropriated for the construction of terminal
facilities, structures and approaches thereto. The authority is broad enough to give the
respondent substantial leeway in deciding for what public use the expropriated property would
be utilized. Pursuant to this broad authority, respondent leased a portion of the lot to commercial
banks while the rest was made a transportation terminal. Said public purposes were even
reaffirmed by Republic Act No. 7916, a law amending respondent PEZAs original charter, which
provides that:

Sec. 7. ECOZONE to be a Decentralized Agro-Industrial, Industrial,

Commercial/Trading, Tourist, Investment and Financial Community. Within the
framework of the Constitution, the interest of national sovereignty and territorial
integrity of the Republic, ECOZONE shall be developed, as much as possible, into a
decentralized, self-reliant and self-sustaining industrial, commercial/trading, agroindustrial, tourist, banking, financial and investment center with minimum
government intervention. Each ECOZONE shall be provided with transportation,
telecommunications and other facilities needed to generate linkage with industries and
employment opportunities for its own habitants and those of nearby towns and cities.
The ECOZONE shall administer itself on economic, financial, industrial, tourism
development and such other matters within the exclusive competence of the national
government. (italics supplied)
Among the powers of PEZA enumerated by the same law are:
Sec. 12. Functions and Powers of PEZA Board. ---- The Philippine Economic Zone
Authority (PEZA) Board shall have the following function and powers:
(a)
Set the general policies on the establishment and operations of the ECOZONE,
Industrial estate, exports processing zones, free trade zones, and the like;
x

(c)
Regulate and undertake the establishment, operation and maintenance of
utilities, other services and infrastructure in the ECOZONE, such as heat, light and
power, water supply, telecommunications, transport, toll roads and bridges, port
services, etc. and to fix just, reasonable and competitive rates, fares, charges and fees
thereof.[43]
In Manila Railroad Co. v. Mitchel[44], this Court has ruled that in the exercise of eminent
domain, only as much land can be taken as is necessary for the legitimate purpose of the
condemnation. The term necessary, in this connection, does not mean absolutely
indispensable but requires only a reasonable necessity of the taking for the stated purpose,
growth and future needs of the enterprise. The respondent cannot attain a self-sustaining and
viable ECOZONE if inevitable needs in the expansion in the surrounding areas are hampered by
the mere refusal of the private landowners to part with their properties. The purpose of creating
an ECOZONE and other facilities is better served if respondent directly owns the areas subject of
the expansion program.
The contention of petitioner that the leasing of the subject lot to banks and building
terminals was not expressly mentioned in the original charter of respondent PEZA and that it was
only after PEZA devoted the lot to said purpose that Republic Act No. 7916 took effect, is not
impressed with merit. It should be pointed out that Presidential Decree No. 66 created the

respondent PEZA to be a viable commercial, industrial and investment area. According to the
comprehensive wording of Presidential Decree No. 66, the said decree did not intend to limit
respondent PEZA to the establishment of an export processing zone but it was also bestowed
with authority to expropriate parcels of land for the construction of terminal facilities,
structures and approaches thereto. Republic Act No. 7916 simply particularized the broad
language employed by Presidential Decree No. 66 by specifying the purposes for which PEZA
shall devote the condemned lots, that is, for the construction and operation of an industrial estate,
an export processing zone, free trade zones, and the like. The expropriation of Lot 1406-B for
the purpose of being leased to banks and for the construction of a terminal has the purpose of
making banking and transportation facilities easily accessible to the persons working at the
industries located in PEZA. The expropriation of adjacent areas therefore comes as a matter of
necessity to bring life to the purpose of the law. In such a manner, PEZAs goal of being a major
force in the economic development of the country would be realized. Furthermore, this Court
has already ruled that:

(T)he Legislature may directly determine the necessity for appropriating private
property for a particular improvement for public use, and it may select the exact
location of the improvement. In such a case, it is well-settled that the utility of the
proposed improvement, the existence of the public necessity for its construction, the
expediency of constructing it, the suitableness of the location selected, are all
questions exclusively for the legislature to determine, and the courts have no power to
interfere or to substitute their own views for those of the representatives of the people.
In the absence of some constitutional or statutory provision to the contrary, the
necessity and expediency of exercising the right of eminent domain are questions
essentially political and not judicial in their character.[45]
Inasmuch as both Presidential Decree No. 66 and Republic Act No. 7916, bestow respondent
with authority to develop terminal facilities and banking centers, this Court will not question the
respondents lease of certain portions of the expropriated lot to banks, as well as the construction
of terminal facilities.
Petitioner contends that respondent is bound by the representations of its Chief Civil
Engineer when the latter testified before the trial court that the lot was to be devoted for the
construction of government offices. Anent this issue, suffice it to say that PEZA can vary the
purpose for which a condemned lot will be devoted to, provided that the same is for public
use. Petitioner cannot impose or dictate on the respondent what facilities to establish for as long
as the same are for public purpose.
Lastly, petitioner appeals to the sense of justice and equity to this Court in restoring the said
lot to its possession. From the time of the filing of the expropriation case in 1981 up to the
present, respondent has not yet remunerated the petitioner although respondent has already
received earnings from the rental payments by lessees of the subject property.
We have ruled that the concept of just compensation embraces not only the correct
determination of the amount to be paid to the owners of the land, but also the payment of the
land within a reasonable time from its taking. Without prompt payment, compensation cannot be

considered just inasmuch as the property owner is made to suffer the consequences of being
immediately deprived of his land while being made to wait for a decade or more before actually
receiving the amount necessary to cope with his loss.[46] Payment of just compensation should
follow as a matter of right immediately after the order of expropriation is issued. Any delay in
payment must be counted from said order. However, the delay to constitute a violation of due
process must be unreasonable and inexcusable; it must be deliberately done by a party in order to
defeat the ends of justice.
We find that respondent capriciously evaded its duty of giving what is due to petitioner. In
the case at bar, the expropriation order was issued by the trial court in 1991. The compromise
agreement between the parties was approved by the trial court in 1993. However, from 1993 up
to the present, respondent has failed in its obligation to pay petitioner to the prejudice of the
latter. Respondent caused damage to petitioner in making the latter to expect that it had a good
title to the property to be swapped with Lot 1406-B; and meanwhile, respondent has been
reaping benefits from the lease or rental income of the said expropriated lot. We cannot tolerate
this oppressive exercise of the power of eminent domain by respondent. As we have ruled
in Cosculluela vs. Court of Appeals:[47]

In the present case, the irrigation project was completed and has been in operation
since 1976. The project is benefiting the farmers specifically and the community in
general. Obviously, the petitioners land cannot be returned to him. However, it is
high time that the petitioner be paid what was due him eleven years ago. It is arbitrary
and capricious for a government agency to initiate expropriation proceedings, seize a
persons property, allow the judgment of the court to become final and executory and
then refuse to pay on the ground that there are no appropriations for the property
earlier taken and profitably used. We condemn in the strongest possible terms the
cavalier attitude of government officials who adopt such a despotic and irresponsible
stance.
Though the respondent has committed a misdeed to petitioner, we cannot, however, grant the
petitioners prayer for the return of the expropriated Lot No. 1406-B. The Order of expropriation
dated July 11, 1991, has long become final and executory. Petitioner cited Provincial
Government of Sorsogon v. Rosa E. Vda. De Villaroya [48] to support its contention that it is
entitled to a return of the lot where this Court ruled that under ordinary circumstances,
immediate return to the owners of the unpaid property is the obvious remedy. However, the said
statement was not the ruling in that case. As in other cases where there was no prompt payment
by the government, this Court declared in Sorsogon that the Provincial Government
of Sorsogon is expected to immediately pay as directed. Should any further delay be
encountered, the trial court is directed to seize any patrimonial property or cash savings of the
province in the amount necessary to implement this decision. However, this Court also stressed
and declared in that case that In cases where land is taken for public use, public interest,
however, must be considered.
In view of all the foregoing, justice and equity dictate that this case be remanded to the trial
court for hearing of the expropriation proceedings on the determination of just compensation for
Lot 1406-B and for its prompt payment to the petitioner.

WHEREFORE, the instant petition is hereby denied. The Regional Trial Court of Cavite
City is hereby ordered to proceed with the hearing of the expropriation proceedings, docketed as
Civil Case No. N-4029, regarding the determination of just compensation for Lot 1406-B,
covered and described in TCT No. T-113498-Cavite, and to resolve the same with dispatch.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.

[1]

Penned by Associate Justice Quirino D. Abad Santos, Jr. and concurred in by Associate Justices Ruben T. Reyes
and Hilarion L. Aquino, in CA-G.R. SP. No. 46112, Rollo, pp. 61-70.
[2]

Id., pp. 72-74.

[3]

Tenth Division.

[4]

The appellate court erroneously declared that it is the Order dated July 11, 1991 and not the Order dated August
4, 1997 which ordered the peaceful turn-over to the Estate of Salud Jimenez of Lot 1406-B.
[5]

Entitled EPZA v. Jose Pulido, Vicenta Panganiban, et al., docketed as Civil Case No. N-4079 assigned to
Branch 17; Rollo, pp. 75-84.
[6]

In a Motion to Dismiss filed on June 10, 1981, petitioner sought the dismissal of said expropriation case
contending that the intended expropriation is not for a public purpose. On August 11, 1981, the trial court ordered
the issuance of a writ of possession in favor of private respondent PEZA over Lot 1406. On August 13, 1981,
Deputy Provincial Sheriff, in behalf of private respondent PEZA, took possession of Lot 1406 owned by petitioner.
[7]

Rollo, pp. 88-92.

[8]

Id., pp. 93-96.

[9]

Id., pp. 97-99.

[10]

Id., pp. 100-101.

[11]

Id., pp. 102-111.

[12]

Id., pp. 112-116.

[13]

Id., pp. 117-123.

[14]

Id., pp. 124-126.

[15]

Id., pp. 127-131.

[16]

Id., pp. 132-164.

[17]

Id., pp. 165-192.

[18]

See Note No. 1, supra.

[19]

Italics supplied.

[20]

Rollo, p. 70.

[21]

Id., pp. 193-207.

[22]

See Note No. 2, supra.

[23]

Rollo, pp. 17-18.

[24]

Rules of Court, Rule 65, sec. 1.

[25]

Miranda v. Abaya, 311 SCRA 617, 631 (1999).

[26]

BF Corporation v. Court of Appeals, 288 SCRA 267 (1998).

[27]

Municipality of Bian vs. Garcia, 180 SCRA 576, 583-584 (1989).

[28]

31 SCRA 205 (1970).

[29]

138 SCRA 587 (1985).

[30]

Rules of Court, Rule 47, sec. 2.

[31]

See Note No. 20.

[32]

See Note No. 29.

[33]

Republic v. Court of Appeals, 296 SCRA 171 (1998).

[34]

Santo Tomas University Hospital vs. Surla, 294 SCRA 382 (1998).

[35]

RULE 41. SECTION 1. Subject of Appeal. An appeal may be taken from a judgment or final order that
completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable.
No appeal may be taken from:
(a) An order denying a motion for new trial or reconsideration;
(b) An order denying a petition for relief or any similar motion seeking relief from judgment;
(c) An interlocutory order;
(d) An order disallowing or dismissing an appeal;
(e) An order denying a motion to set aside a judgment by consent, confession or compromise on the ground of fraud,
mistake or duress, or any other ground vitiating consent;
(f) An order of execution;
(g) A judgment or final order for or against one or more of several parties or in separate claims, counter-claims,
cross-claims and third party complaints, while the main case is pending, unless the court allows an appeal therefrom;
and
(h) An order dismissing an action without prejudice.
In all above instances where the judgment or final order is not appealable, the aggrieved party may file an
appropriate civic action under Rule 65. (n)
[36]

Gutib v. Court of Appeals, 312 SCRA 365 (1999).

[37]

The motion to dismiss asked for the return of Lot 1406-B inasmuch as respondent would not devote the lot to
public use.
[38]

Leonor v. Sycip, 1 SCRA 1215 (1961); Tionson v. Court of Appeals, 49 SCRA 429 (1973); Barreras, et. al. v.
Garcia, et. al, 169 SCRA 401 (1989).
[39]

Gatchalian v. Arlegui, 75 SCRA 234 (1977).

[40]

Italics supplied.

[41]

154 SCRA 461, 467-468 (1987).

[42]

252 SCRA 412, 422 (1996), quoting Joaquin Bernas, The Constitution of the Republic of the Philippines, Vol. 1,
1987 ed., p. 282.
[43]

Italics supplied.

[44]

50 Phil 832, 837-838 (1927).

[45]

City of Manila v. Chinese Community of Manila, 40 Phil 349 (1919).

[46]

Land Bank of the Philippines v. Court of Appeals 258 SCRA 404, 408-409 (1996) quoting Municipality of
Makati v. Court of Appeals, 190 SCRA 207, 213 (1990).
[47]

164 SCRA 393, 401 (1988).

[48]

153 SCRA 291, 302 (1987).

FIRST DIVISION

[G.R. No. 127820. July 20, 1998]

MUNICIPALITY OF PARAAQUE, petitioner,

CORPORATION, respondent.

vs. V.M.

REALTY

DECISION
PANGANIBAN, J.:

A local government unit (LGU), like the Municipality of Paraaque, cannot authorize
an expropriation of private property through a mere resolution of its lawmaking
body. The Local Government Code expressly and clearly requires an ordinance or a
local law for the purpose. A resolution that merely expresses the sentiment or opinion
of the Municipal Council will not suffice. On the other hand, the principle of res
judicata does not bar subsequent proceedings for the expropriation of the same
property when all the legal requirements for its valid exercise are complied with.
Statement of the Case
These principles are applied by this Court in resolving this petition for review
on certiorari of the July 22, 1996 Decision of the Court of Appeals in CA GR CV No.
48048, which affirmed in toto the Regional Trial Courts August 9, 1994 Resolution.
The trial court dismissed the expropriation suit as follows:
[1]

[2]

[3]

[4]

The right of the plaintiff to exercise the power of eminent domain is not
disputed. However, such right may be exercised only pursuant to an Ordinance (Sec.
19, R.A. No. 7160). In the instant case, there is no such ordinance passed by the
Municipal Council of Paraaque enabling the Municipality, thru its Chief Executive,

to exercise the power of eminent domain. The complaint, therefore, states no cause of
action.
Assuming that plaintiff has a cause of action, the same is barred by a prior
judgment. On September 29, 1987, the plaintiff filed a complaint for expropriation
involving the same parcels of land which was docketed as Civil Case No. 17939 of
this Court (page 26, record). Said case was dismissed with prejudice on May 18, 1988
(page 39, record). The order of dismissal was not appealed, hence, the same became
final. The plaintiff can not be allowed to pursue the present action without violating
the principle of [r]es [j]udicata. While defendant in Civil Case No. 17939 was
Limpan Investment Corporation, the doctrine of res judicata still applies because the
judgment in said case (C.C. No. 17939) is conclusive between the parties and their
successors-in-interest (Vda. de Buncio vs. Estate of the late Anita de Leon). The
herein defendant is the successor-in-interest of Limpan Investment Corporation as
shown by the Deed of Assignment Exchange executed on June 13, 1990.
WHEREFORE, defendants motion for reconsideration is hereby granted. The order
dated February 4, 1994 is vacated and set aside.
This case is hereby dismissed. No pronouncement as to costs.
SO ORDERED.

[5]

Factual Antecedents
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, the
Municipality of Paraaque filed on September 20, 1993, a Complaint for
expropriation against Private Respondent V.M. Realty Corporation over two parcels of
land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a combined area of
about 10,000 square meters, located at Wakas, San Dionisio, Paraaque, Metro Manila,
and covered by Torrens Certificate of Title No. 48700. Allegedly, the complaint was
filed for the purpose of alleviating the living conditions of the underprivileged by
providing
homes
for
the
homeless
through
a
socialized
housing
project. Parenthetically, it was also for this stated purpose that petitioner, pursuant to
its Sangguniang Bayan Resolution No. 577, Series of 1991, previously made an offer to
enter into a negotiated sale of the property with private respondent, which the latter did
not accept.
[6]

[7]

[8]

[9]

[10]

Finding the Complaint sufficient in form and substance, the Regional Trial Court of
Makati, Branch 134, issued an Order dated January 10, 1994, giving it due
course. Acting on petitioners motion, said court issued an Order dated February 4,
1994, authorizing petitioner to take possession of the subject property upon deposit
[11]

[12]

with its clerk of court of an amount equivalent to 15 percent of its fair market value
based on its current tax declaration.
On February 21, 1994, private respondent filed its Answer containing affirmative
defenses and a counterclaim, alleging in the main that (a) the complaint failed to state
a cause of action because it was filed pursuant to a resolution and not to an ordinance
as required by RA 7160 (the Local Government Code); and (b) the cause of action, if
any, was barred by a prior judgment orres judicata. On private respondents motion, its
Answer was treated as a motion to dismiss. On March 24, 1994, petitioner filed its
opposition, stressing that the trial courts Order dated February 4, 1994 was in accord
with Section 19 of RA 7160, and that the principle of res judicata was not applicable.
[13]

[14]

[15]

Thereafter, the trial court issued its August 9, 1994 Resolution nullifying its
February 4, 1994 Order and dismissing the case. Petitioners motions for
reconsideration and transfer of venue were denied by the trial court in a Resolution
dated December 2, 1994. Petitioner then appealed to Respondent Court, raising the
following issues:
[16]

[17]

1.

2.
3.

4.

Whether or not the Resolution of the Paraaque Municipal Council No.

93-95, Series of 1993 is a substantial compliance of the statutory
requirement of Section 19, R.A. 7180 [sic] in the exercise of the power
of eminent domain by the plaintiff-appellant.
Whether or not the complaint in this case states no cause of action.
Whether or not the strict adherence to the literal observance to the rule
of procedure resulted in technicality standing in the way of substantial
justice.

Whether or not the principle of res judicata is applicable to the present case.

[18]

As previously mentioned, the Court of Appeals affirmed in toto the trial courts
Decision. Respondent Court, in its assailed Resolution promulgated on January 8,
1997, denied petitioners Motion for Reconsideration for lack of merit.
[19]

Hence, this appeal.

[20]

The Issues
Before this Court, petitioner posits two issues, viz.:

1. A resolution duly approved by the municipal council has the same force and
effect of an ordinance and will not deprive an expropriation case of a valid cause of
action.

2.
The principle of res judicata as a ground for dismissal of case is not applicable
when public interest is primarily involved.
[21]

The Courts Ruling

The petition is not meritorious.
First Issue:
Resolution Different from an Ordinance
Petitioner contends that a resolution approved by the municipal council for the
purpose of initiating an expropriation case substantially complies with the requirements
of the law because the terms ordinance and resolution are synonymous for the
purpose of bestowing authority [on] the local government unit through its chief executive
to initiate the expropriation proceedings in court in the exercise of the power of eminent
domain. Petitioner seeks to bolster this contention by citing Article 36, Rule VI of the
Rules and Regulations Implementing the Local Government Code, which provides: If
the LGU fails to acquire a private property for public use, purpose, or welfare through
purchase, the LGU may expropriate said property through a resolution of
theSanggunian authorizing
its
chief
executive
to
initiate
expropriation
proceedings. (Italics supplied.)
[22]

[23]

[24]

The Court disagrees. The power of eminent domain is lodged in the legislative
branch of government, which may delegate the exercise thereof to LGUs, other public
entities and public utilities. An LGU may therefore exercise the power to expropriate
private property only when authorized by Congress and subject to the latters control
and restraints, imposed through the law conferring the power or in other
legislations. In this case, Section 19 of RA 7160, which delegates to LGUs the power
of eminent domain, also lays down the parameters for its exercise. It provides as
follows:
[25]

[26]

Section 19. Eminent Domain. A local government unit may, through its chief
executive and acting pursuant to an ordinance, exercise the power of eminent domain
for public use, or purpose, or welfare for the benefit of the poor and the landless, upon
payment of just compensation, pursuant to the provisions of the Constitution and
pertinent laws: Provided, however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously made to the owner, and
such offer was not accepted: Provided, further, That the local government unit may
immediately take possession of the property upon the filing of the expropriation
proceedings and upon making a deposit with the proper court of at least fifteen

percent (15%) of the fair market value of the property based on the current tax
declaration of the property to be expropriated: Provided, finally, That, the amount to
be paid for the expropriated property shall be determined by the proper court, based
on the fair market value at the time of the taking of the property. (Emphasis
supplied)
Thus, the following essential requisites must concur before an LGU can exercise
the power of eminent domain:
1. An ordinance is enacted by the local legislative council authorizing the local chief
executive, in behalf of the LGU, to exercise the power of eminent domain or pursue
expropriation proceedings over a particular private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or for
the benefit of the poor and the landless.
3. There is payment of just compensation, as required under Section 9, Article III of the
Constitution, and other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property
sought to be expropriated, but said offer was not accepted.[27]

In the case at bar, the local chief executive sought to exercise the power of eminent
domain pursuant to a resolution of the municipal council. Thus, there was no
compliance with the first requisite that the mayor be authorized through an
ordinance. Petitioner cites Camarines Sur vs. Court of Appeals to show that a
resolution may suffice to support the exercise of eminent domain by an LGU. This
case, however, is not in point because the applicable law at that time was BP 337, the
previous Local Government Code, which had provided that a mere resolution would
enable an LGU to exercise eminent domain. In contrast, RA 7160, the present Local
Government Code which was already in force when the Complaint for expropriation was
filed, explicitly required an ordinance for this purpose.
[28]

[29]

[30]

[31]

We are not convinced by petitioners insistence that the terms resolution and
ordinance are synonymous. A municipal ordinance is different from a resolution. An
ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of
a lawmaking body on a specific matter. An ordinance possesses a general and
permanent character, but a resolution is temporary in nature. Additionally, the two are
enacted differently -- a third reading is necessary for an ordinance, but not for a
resolution, unless decided otherwise by a majority of all theSanggunian members.
[32]

[33]

If Congress intended to allow LGUs to exercise eminent domain through a mere

resolution, it would have simply adopted the language of the previous Local
Government Code. But Congress did not. In a clear divergence from the previous
Local Government Code, Section 19 of RA 7160 categorically requires that the local
chief executive act pursuant to an ordinance. Indeed, [l]egislative intent is determined
principally from the language of a statute. Where the language of a statute is clear and
unambiguous, the law is applied according to its express terms, and interpretation
would be resorted to only where a literal interpretation would be either impossible or
absurd or would lead to an injustice. In the instant case, there is no reason to depart
[34]

from this rule, since the law requiring an ordinance is not at all impossible, absurd, or
unjust.
Moreover, the power of eminent domain necessarily involves a derogation of a
fundamental or private right of the people. Accordingly, the manifest change in the
legislative language -- from resolution under BP 337 to ordinance under RA 7160 -demands a strict construction. No species of property is held by individuals with
greater tenacity, and is guarded by the Constitution and laws more sedulously, than the
right to the freehold of inhabitants. When the legislature interferes with that right and,
for greater public purposes, appropriates the land of an individual without his consent,
the plain meaning of the law should not be enlarged by doubtful interpretation.
[35]

[36]

Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires
only a resolution to authorize an LGU to exercise eminent domain. This is clearly
misplaced, because Section 19 of RA 7160, the law itself, surely prevails over said rule
which merely seeks to implement it. It is axiomatic that the clear letter of the law is
controlling and cannot be amended by a mere administrative rule issued for its
implementation. Besides, what the discrepancy seems to indicate is a mere oversight in
the wording of the implementing rules, since Article 32, Rule VI thereof, also requires
that, in exercising the power of eminent domain, the chief executive of the LGU must act
pursuant to an ordinance.
[37]

In this ruling, the Court does not diminish the policy embodied in Section 2, Article X
of the Constitution, which provides that territorial and political subdivisions shall enjoy
local autonomy. It merely upholds the law as worded in RA 7160. We stress that an
LGU is created by law and all its powers and rights are sourced therefrom. It has
therefore no power to amend or act beyond the authority given and the limitations
imposed on it by law. Strictly speaking, the power of eminent domain delegated to an
LGU is in reality not eminent but inferior domain, since it must conform to the limits
imposed by the delegation, and thus partakes only of a share in eminent domain.
Indeed, the national legislature is still the principal of the local government units,
which cannot defy its will or modify or violate it.
[38]

[39]

Complaint Does Not State a Cause of Action

In its Brief filed before Respondent Court, petitioner argues that its Sanguniang
Bayan passed an ordinance on October 11, 1994 which reiterated its Resolution No. 9335, Series of 1993, and ratified all the acts of its mayor regarding the subject
expropriation.
[40]

This argument is bereft of merit. In the first place, petitioner merely alleged the
existence of such an ordinance, but it did not present any certified true copy thereof. In
the second place, petitioner did not raise this point before this Court. In fact, it was
mentioned by private respondent, and only in passing. In any event, this allegation
does not cure the inherent defect of petitioners Complaint for expropriation filed on
September 23, 1993. It is hornbook doctrine that:
[41]

 x x x in a motion to dismiss based on the ground that the complaint fails to state a
cause of action, the question submitted before the court for determination is the
sufficiency of the allegations in the complaint itself. Whether those allegations are
true or not is beside the point, for their truth is hypothetically admitted by the
motion. The issue rather is: admitting them to be true, may the court render a valid
judgment in accordance with the prayer of the complaint?
[42]

The fact that there is no cause of action is evident from the face of the Complaint for
expropriation which was based on a mere resolution. The absence of an ordinance
authorizing the same is equivalent to lack of cause of action. Consequently, the Court
of Appeals committed no reversible error in affirming the trial courts Decision which
dismissed the expropriation suit.
Second Issue:
Eminent Domain Not Barred by Res Judicata
As correctly found by the Court of Appeals and the trial court, all the requisites for
the application of res judicata are present in this case. There is a previous final
judgment on the merits in a prior expropriation case involving identical interests, subject
matter and cause of action, which has been rendered by a court having jurisdiction over
it.
[43]

[44]

Be that as it may, the Court holds that the principle of res judicata, which finds
application in generally all cases and proceedings, cannot bar the right of the State or
its agent to expropriate private property. The very nature of eminent domain, as an
inherent power of the State, dictates that the right to exercise the power be absolute
and unfettered even by a prior judgment or res judicata. The scope of eminent domain
is plenary and, like police power, can reach every form of property which the State
might need for public use. All separate interests of individuals in property are held of
the government under this tacit agreement or implied reservation. Notwithstanding the
grant to individuals, the eminent domain, the highest and most exact idea of property,
remains in the government, or in the aggregate body of the people in their sovereign
capacity; and they have the right to resume the possession of the property whenever
the public interest requires it. Thus, the State or its authorized agent cannot be
forever barred from exercising said right by reason alone of previous non-compliance
with any legal requirement.
[45]

[46]

[47]

While the principle of res judicata does not denigrate the right of the State to
exercise eminent domain, it does apply to specific issues decided in a previous
case. For example, a final judgment dismissing an expropriation suit on the ground that
there was no prior offer precludes another suit raising the same issue; it cannot,
however, bar the State or its agent from thereafter complying with this requirement, as
prescribed by law, and subsequently exercising its power of eminent domain over the

same property. By the same token, our ruling that petitioner cannot exercise its
delegated power of eminent domain through a mere resolution will not bar it from
reinstituting similar proceedings, once the said legal requirement and, for that
matter, all others are properly complied with. Parenthetically and by parity of reasoning,
the same is also true of the principle of law of the case. In Republic vs De Knecht,
the Court ruled that the power of the State or its agent to exercise eminent domain is
not diminished by the mere fact that a prior final judgment over the property to be
expropriated has become the law of the case as to the parties. The State or its
authorized agent may still subsequently exercise its right to expropriate the same
property, once all legal requirements are complied with. To rule otherwise will not only
improperly diminish the power of eminent domain, but also clearly defeat social justice.
[48]

[49]

WHEREFORE, the petition is hereby DENIED without prejudice to petitioners

proper exercise of its power of eminent domain over subject property. Costs against
petitioner.
SO ORDERED.
Davide, Jr., (Chairman), Bellosillo, Vitug, and Quisumbing, JJ., concur.

[1]

Rollo, pp. 21-25.

Special Sixth Division, composed of J. Antonio M. Martinez (now an Associate Justice of the Supreme
Court), ponente and chairman; and JJ. Ricardo P. Galvez and Hilarion L. Aquino, concurring.
[2]

[3]
[4]

[5]

See Rollo, p. 25.

Penned by acting Presiding Judge Paul T. Arcangel.
Resolution of the Regional Trial Court, p. 2; Rollo, p. 70.

Rollo, pp. 41-43.

Ibid., pp. 27-32.
[8]
Petitioners Memorandum, p. 1; Rollo, p. 184.
[9]
Rollo, pp. 37-38.
[10]
Complaint, p. 3; Rollo, p. 29.
[11]
Rollo, p. 45.
[12]
Ibid., p. 47.
[13]
Ibid., pp. 48-51.
[14]
Private respondents Memorandum, pp. 1-2; Rollo, pp. 197-198.
[15]
Rollo, pp. 66-68.
[16]
Ibid., pp. 69-70.
[17]
Ibid., pp. 71-72.
[18]
Ibid., pp. 78-79.
[19]
Ibid., p. 26.
[6]
[7]

The case was deemed submitted for resolution on March 13, 1998, when the Court received private
respondents Memorandum.
[20]

Petitioners Memorandum, p. 3; Rollo, p. 187.

Ibid., p. 4; Rollo, p. 188.
[23]
Ibid.
[24]
Paragraph A.
[21]
[22]

[25]

Moday vs. Court of Appeals, 268 SCRA 586, 592, February 20, 1997.

Province of Camarines Sur vs. Court of Appeals, 222 SCRA 173, 179-180, May 17, 1993, per
Quiason, J.
[26]

Senator Aquilino Q. Pimentel, Jr., The Local Government Code of 1991: The Key To National
Development, 1993 ed., p. 110.
[27]

[28]
[29]

Supra.
Petitioners Memorandum, p. 6; Rollo, p. 189.

Approved on February 10, 1983 and published in 79 O.G. No. 7. See Moday vs. Court of
Appeals, supra, p. 593. Sec. 9 of BP 337 reads:
[30]

SEC. 9. Eminent Domain. --- A local government unit may, through its head and acting pursuant to a
resolution of its sanggunian, exercise the right of eminent domain and institute condemnation proceedings
for public use or purpose.
[31]
Effective January 1, 1992.
Mascuana vs. Provincial Board of Negros Occidental, 79 SCRA 399, 405, October 18, 1977; cited in
private respondents Memorandum, p. 5.
[32]

Article 107, pars. a and c, Implementing Rules and Regulations of RA 7160; cited in Pimentel,
Jr., supra, pp. 163-164.
[33]

Azarcon vs. Sandiganbayan, 268 SCRA 747, 762, February 26, 1997, per Panganiban, J.; citing
Ramirez vs. Court of Appeals, 248 SCRA 590, 596, September 28, 1995.
[34]

City of Manila vs. Chinese Community of Manila, 40 Phil 349, 366 (1919), and Arriete vs. Director of
Public Works, 58 Phil 507, 511 (1933). See also Bernas, Joaquin G., The 1987 Constitution of the
Republic of the Philippines: A Commentary, 1996 ed., p. 348.
[35]

[36]

Justice Isagani A. Cruz, Constitutional Law, 1993 ed., p. 59.

See Villa vs. Llanes, Jr., 120 SCRA 81, 84, January 21, 1983, and Wise & Co. vs. Meer, 78 Phil 655,
676 (1947). See also Art. 7, Civil Code of the Philippines.
[37]

Bernas, supra, pp. 348-349.

Magtajas vs. Pryce Properties, Corp., Inc., 234 SCRA 255, 272-273, July 20, 1994, per Cruz, J.
[40]
Rollo, pp. 81-82.
[38]
[39]

[41]

See private respondents Memorandum, pp. 5-6; Rollo, pp. 201-202.

Travel Wide Associated Sales (Phils.), Inc. vs. Court of Appeals, 199 SCRA 205, 210, July 15,
1991, per Cruz, J.; citing The Heirs of Juliana Clavano vs. Genato, 80 SCRA 217, 222, October 28,
1977.
[42]

[43]

Decision, p. 5; Rollo, p. 25.

[44]

Resolution of the Regional Trial Court, p. 2; Rollo, p. 70.

Republic vs. Director of Lands, 99 SCRA 651, 657, September 11, 1980.
Bernas, supra, p. 349.
[47]
Ibid.
[45]
[46]

[48]

See National Power Corporation vs. Court of Appeals, 254 SCRA 577, March 11, 1996.

[49]

182 SCRA 142, 147-148, February 12, 1990.

SECOND DIVISION
[G.R. No. 137569. June 23, 2000]
REPUBLIC OF THE PHILIPPINES, plaintiff-appellee, vs. SALEM
INVESTMENT CORPORATION, MARIA DEL CARMEN ROXAS DE
ELIZALDE, CONCEPCION CABARRUS VDA. DE SANTOS, defendantsappellees.
MILAGROS AND INOCENTES DE LA RAMA, petitioners,
ALFREDO GUERRERO, respondent.
DECISION
MENDOZA, J.:
The main petition in this case is for determination of just compensation for the
expropriation of lands under B.P. Blg. 340. Alfredo Guerrero intervened in this
proceeding arguing that, instead of the De la Ramas, he should receive the
just compensation for the subject land. The trial court and the Court of
Appeals declared him the rightful recipient of the amount. This is an appeal
from the decision of the Court of Appeals. We affirm.
[1]

The facts are as follows:

On February 17, 1983, Batas Pambansa Blg. 340 was passed authorizing the
expropriation of parcels of lands in the names of defendants in this case,

including a portion of the land, consisting of 1,380 square meters, belonging to

Milagros and Inocentes De la Rama covered by TCT No. 16213.
On December 14, 1988, or five years thereafter, Milagros and Inocentes De la
Rama entered into a contract with intervenor Alfredo Guerrero whereby the
De la Ramas agreed to sell to Guerrero the entire property covered by TCT
No. 16213, consisting of 4,075 square meters for the amount of
P11,800,000.00. The De la Ramas received the sum of P2,200,000.00 as
partial payment of the purchase price, the balance thereof to be paid upon
release of the title by the Philippine Veterans Bank.
[2]

On November 3, 1989, Guerrero filed in the Regional Trial Court in Pasay City
a complaint for specific performance (Civil Case No. 6974-P) to compel the
De la Ramas to proceed with the sale.
On July 10, 1990, while this case for specific performance was pending, the
Republic of the Philippines filed the present case (Civil Case No. 7327) for
expropriation pursuant to B.P. Blg. 340. Among the defendants named in the
complaint were Milagros and Inocentes De la Rama as registered owners of
Lot 834, a portion of which (Lot 834-A) was part of the expropriated property.
Upon the deposit of P12,970,350.00 representing 10 percent of the
approximate market value of the subject lands, a writ of possession was
issued on August 29, 1990 in favor of the government.
[3]

[4]

On May 2, 1991, Guerrero filed a motion for intervention alleging that the De
la Ramas had agreed to sell to him the entire Lot 834 (TCT No. 16213) on
December 14, 1988 and that a case for specific performance had been filed
by him against the De la Ramas.
[5]

On September 9, 1991, based on the report of the committee on appraisers

appointed by the court and the submissions of defendants, the trial court
approved payment to the De la Ramas at the rate of P23,976.00 per square
meter for the taking of 920 square meters out of the 1,380 square meters to
be expropriated under B.P. Blg. 340.
[6]

Meanwhile, on September 18, 1991, the trial court rendered a decision in the
case for specific performance (Civil Case No. 6974-P) upholding the validity
[7]

of the contract to sell and ordering the De la Ramas to execute the

corresponding deed of sale covering the subject property in favor of Guerrero.
The De la Ramas appealed to the Court of Appeals (CA-G.R. No. CV-35116)
but their petition was dismissed on July 28, 1992. They tried to appeal to this
Court (G.R. No. 106488) but again they failed in their bid as their petition for
review was denied on December 7, 1992.
Meanwhile, on October 2, 1991, Guerrero filed an Omnibus Motion praying
that the just compensation for the land be deposited in court pursuant to Rule
67, 9 of the Rules of Court. As his motion for intervention and omnibus
motion had not yet been resolved, Guerrero filed with the Court of Appeals a
petition for mandamus, certiorari, and injunction with temporary restraining
order (C.A.-G.R. SP No. 28311) to enjoin the Republic from releasing or
paying to the De la Ramas any amount corresponding to the payment of the
expropriated property and to compel the trial court to resolve his two motions.
[8]

[9]

On January 12, 1993, the Court of Appeals rendered a decision granting the
writ of mandamus.
[10]

Nonetheless, the De la Ramas filed on March 17, 1993 a Motion for Authority
to Withdraw the deposit made by the Republic in 1991. This motion was
denied as the trial court, on May 7, 1993, allowed the intervention of Guerrero
and ordered the Republic to deposit the amount of just compensation with the
Clerk of Court of RTC, Pasay City.
[11]

[12]

On June 16, 1993, the De la Ramas filed a Motion for Execution again
praying that the courts order dated September 9, 1991, approving the
recommendation of the appraisal committee, be enforced. This was duly
opposed by Guerrero.
[13]

[14]

On June 22, 1993, the trial court denied the motion of the De la Ramas
holding that there had been a change in the situation of the parties, therefore,
making the execution of the September 9, 1991 Order inequitable, impossible,
or unjust.
[15]

As if to further delay the proceedings of this case, the De la Ramas then filed
an Omnibus Motion seeking clarification of the September 18, 1991 decision

of the trial court in the case for specific performance, upholding the validity of
the contract to sell, insofar as the area covered by the contract was
concerned, and asking that a restraining order be issued until this motion was
granted.
In its order dated October 7, 1993, the trial court clarified that the area of land
covered by the contract to sell included the portion expropriated by the
Republic. It stated:
WHEREFORE, by way of clarification, the court holds that the
transfer of title to the plaintiff under the Contract to Sell dated
December 14, 1988 covers the entire Lot 834 consisting of 4,075
square meters (including the expropriated portion); that this
change of owner over the entire property is necessarily junior or
subject to the superior rights of the REPUBLIC over the
expropriated portion (the metes and bounds of which are clearly
defined in Section 1 6 of B.P. Blg. 340); that the Contract to Sell
dated December 14, 1988 executed by the parties is a valid
document that authorizes the plaintiff to step into the shoes of the
defendants in relation to the property covered by TCT No. 16213;
and that the transfer shall be free from all liens and
encumbrances except for the expropriated portion of 1,380 square
meters.
[16]

The decision in the action for specific performance in Civil Case No. 6974-P
having become final, an order of execution was issued by the Pasay City
RTC, and as a result of which, a deed of absolute sale was executed by the
Branch Clerk of Court on March 8, 1994 in favor of Guerrero upon payment by
him of the sum of P8,808,000.00 on January 11, 1994 and the further sum
ofP1,608,900.00 on February 1, 1994 as full payment for the balance of the
purchase price under the contract to sell of December 14, 1988. The entire
amount was withdrawn and duly received by the De la Ramas.
[17]

[18]

[19]

Thereafter, the De la Ramas sought the nullification of the June 22, 1993
order of the trial court in this case, denying their motion for execution of the
order approving the recommendation of the appraisal committee, by filing a
petition for certiorari and mandamus in the Court of Appeals. This petition

was, however, dismissed in a decision dated July 29, 1994 of the appellate
court.
[20]

On April 5, 1995, the Pasay City Regional Trial Court, Branch 111, declared
Guerrero the rightful owner of the 920-square meter expropriated property and
ordered payment to him of just compensation for the taking of the land. The
dispositive portion of its decision reads:
WHEREFORE, respondent-intervenor Alfredo Guerrero is hereby
declared as the rightful person entitled to receive the just
compensation of the 920-square meter portion of the property
described in TCT No. 16213 of the Register of Deeds of Pasay
City and ordering the Philippine National Bank to release and
deliver to Uniland Realty and Development Corporation, the
assignee of Guerrero, the amount of P20,000,000.00 representing
the deposit made by the plaintiff through the Department of Public
Works and Highways in the Philippine National Bank, Escolta
Branch with the check solely payable to said Uniland Realty and
Development Corporation, as assignee of Alfredo Guerrero.
[21]

This decision was subsequently affirmed by the Court of Appeals. Hence,

this petition.
[22]

The De la Ramas contend:

I. THE COURT OF APPEALS WRONGLY INTERPRETED B.P.
NO. 340 BY HOLDING THAT BATAS PAMBANSA BLG. 340
MERELY AUTHORIZED THE EXPROPRIATION OF THE LANDS
OF THE DEFENDANTS, INCLUDING THAT PORTION
BELONGING TO THE HEREIN PETITIONERS DE LA RAMAS
COVERED BY TCT NO. 16213.
II. THE COURT OF APPEALS WRONGLY INTERPRETED THE
CONTRACT TO SELL BY HOLDING THAT THE PETITIONERS
DE LA RAMAS HAD CONVEYED TO THE RESPONDENT
GUERRERO THE WHOLE PROPERTY COVERED BY TCT NO.
16213, INCLUDING THE EXPROPRIATED AREA.

III.THE HONORABLE COURT OF APPEALS WRONGLY

DECLARED THAT THE PETITIONERS DE LA RAMAS COULD
STILL SELL IN 1988 THEIR PROPERTY AS TITLE THERETO
HAD NOT YET PASSED TO THE GOVERNMENT IN 1983.
IV.THE COURT OF APPEALS GRAVELY ERRED IN WRONGLY
INTERPRETING THE CONTRACT TO SELL, BY HOLDING
THAT PETITIONERS DE LA RAMAS HAD CONVEYED TO THE
RESPONDENT GUERRERO THE RIGHT TO RECEIVE THE
JUST COMPENSATION FOR THE EXPROPRIATED AREA.
V. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT THE RIGHT TO RECEIVE THE JUST COMPENSATION
FOR THE EXPROPRIATED AREA BECAME VESTED UPON
THE RESPONDENT GUERRERO THROUGH SUBROGATION.
VI.THE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT THE RESPONDENT GUERRERO HAD PAID TO
PETITIONERS RAMAS THE FULL PURCHASE PRICE OF
P11,800,00.00 STIPULATED IN THE CONTRACT TO SELL OF
14 DECEMBER 1988.
[23]

As already stated, the De la Ramas and Guerrero entered into a contract to

sell with respect to Lot 834. This lot has an area of 4,075 square meters. This
contract was executed on December 14, 1988, after B.P. Blg. 340 was passed
authorizing the expropriation of a portion of the land, consisting of 1,380
square meters, of the De la Ramas. The only issue in this case is who,
between the De la Ramas and Guerrero, is/are entitled to receive payment of
just compensation for the taking of 920 square meters of the land in question?
The De la Ramas claim that they should receive the amount of just
compensation because when they agreed to sell Lot 834 in 1988 to Guerrero,
it did not include the portion expropriated by the Republic since, at that time,
such portion had been expropriated by the government by virtue of B.P. Blg.
340, which took effect on February 17, 1983. They state:

In 1988, the petitioners Ramas could no longer agree to sell to

another person the expropriated property itself. For one thing,
the property was already expropriated and petitioners Ramas for
not objecting in effect conveyed the same to the Government.
Secondly, the physical and juridical possession of the property
was already in the Government. Thirdly, the equitable and
beneficial title over the property was already vested in the
Government, and therefore the property itself was already outside
the commerce of man. As a matter of fact, the property was
already part of a Government infrastructure.
[24]

On the other hand, Alfredo Guerrero argues that the title to the expropriated
portion of Lot 834 did not immediately pass to the government upon the
enactment of B.P. Blg. 340 in 1983, as payment of just compensation was yet
to be made before ownership of the land was transferred to the government.
As a result, petitioners still owned the entire Lot 834 at the time they agreed to
sell it to Guerrero. Therefore, since Guerrero obtained ownership of Lot 834,
including the 920 square meters expropriated by the government, he has the
right to receive the just compensation over the said property.
We find the De la Ramas contention without merit. We hold that Guerrero is
entitled to receive payment of just compensation for the taking of the land.
The power of eminent domain
The power of eminent domain is an inherent power of the State. No
constitutional conferment is necessary to vest it in the State. The constitutional
provision on eminent domain, Art. III, 9, provides a limitation rather than a
basis for the exercise of such power by the government. Thus, it states that
"Private property shall not be taken for public use without just compensation."
Expropriation may be initiated by court action or by legislation. In both
instances, just compensation is determined by the courts.
[25]

[26]

The expropriation of lands consists of two stages. As explained in Municipality

of Bian v. Garcia:
[27]

The first is concerned with the determination of the authority of the

plaintiff to exercise the power of eminent domain and the propriety
of its exercise in the context of the facts involved in the suit. It
ends with an order, if not of dismissal of the action, "of
condemnation declaring that the plaintiff has a lawful right to take
the property sought to be condemned, for the public use or
purpose described in the complaint, upon the payment of just
compensation to be determined as of the date of the filing of the
complaint". . . .
The second phase of the eminent domain action is concerned
with the determination by the court of "the just compensation for
the property sought to be taken." This is done by the court with
the assistance of not more than three (3) commissioners. . . .
It is only upon the completion of these two stages that expropriation is said to
have been completed. Moreover, it is only upon payment of just compensation
that title over the property passes to the government. Therefore, until the
action for expropriation has been completed and terminated, ownership over
the property being expropriated remains with the registered owner.
Consequently, the latter can exercise all rights pertaining to an owner,
including the right to dispose of his property, subject to the power of the State
ultimately to acquire it through expropriation.
[28]

In the case at hand, the first stage of expropriation was completed when B.P.
Blg. 340 was enacted providing for the expropriation of 1,380 square meters
of the land in question. The constitutionality of this law was upheld in the case
of Republic v. De Knecht. In 1990, the government commenced the second
stage of expropriation through the filing of a petition for the determination of
just compensation. This stage was not completed, however, because of the
intervention of Guerrero which gave rise to the question of ownership of the
subject land. Therefore, the title to the expropriated property of the De la
Ramas remained with them and did not at that point pass to the government.
[29]

The De la Ramas are mistaken in arguing that the two stages of expropriation
cited above only apply to judicial, and not to legislative, expropriation.
Although Congress has the power to determine what land to take, it can not

do so arbitrarily. Judicial determination of the propriety of the exercise of the

power, for instance, in view of allegations of partiality and prejudice by those
adversely affected, and the just compensation for the subject property is
provided in our constitutional system.
[30]

We see no point in distinguishing between judicial and legislative

expropriation as far as the two stages mentioned above are concerned. Both
involve these stages and in both the process is not completed until payment of
just compensation is made. The Court of Appeals was correct in saying that
B.P. Blg. 340 did not effectively expropriate the land of the De la Ramas. As a
matter of fact, it merely commenced the expropriation of the subject property.
Thus, in 1988, the De la Ramas still had authority to transfer ownership of
their land and convey all rights, including the right to receive just
compensation, to Guerrero.
The Contract to Sell and the Deed of Absolute Sale
The contract to sell between the De la Ramas and Guerrero, executed on
December 14, 1988, reads:
CONTRACT TO SELL
KNOW ALL MEN BY THESE PRESENTS:
This CONTRACT is made and executed by and between:
MILAGROS DE LA RAMA and INOCENTES DE LA RAMA, of
legal age, both single, Filipinos Citizen and with residence and
postal address at 2838 F.B. Harrison St., Pasay City, Metro
Manila, hereinafter referred to as the SELLERS.
- and ALFREDO S. GUERRERO, of legal age, Filipino, married to
SUSANA C. PASCUAL and with residence and postal address at
No. 17 Mangyan, La Vista, Quezon City, hereinafter referred to as
the BUYER.

WITNESSETH:
WHEREAS, the SELLERS are the registered owners of a parcel
of land consisting of 4,075 square meters together with all the
improvements thereon situated at 2838 F.B. Harrison St., Pasay
City, covered by Transfer Certificate of Title No. 16213 of the
Registry of Deeds of Pasay City and more particularly described
as follows:
A PARCEL OF LAND (Lot 834 of the Cadastral
Survey of Pasay, L.R.C. Cad. Rec. No.), situated in
the City of Pasay. Bounded on the N., along line 1-2
by Lot 835; and along line 2-3 by Lot 836, on the NE.,
and SE., along lines 3-4-5 by Lot 833, all of Pasay
Cadastre; and on the SW., along lines 5-6-1 by Calle
F.B. Harrison. Beginning at a point marked "1" on
plan, being N. 3 deg. 50E., 100.44 m. from B.L.L.M.
5, Pasay Cadastre; thence N. 84 deg. 19E., 73.79 m.
to point 2; thence N. 84 deg. 19E., 14.47 m. to point
3; thence S. 93 deg. 11E., 45.69 m. to point 4; thence
S. 33 deg. 10W., 87.39 m. to point 5; thence N. 10
deg. 46W., 11.82 m. to point 6; thence N. 10 deg.
46W., 35.70 m. to point of beginning; containing an
area of FOUR THOUSAND AND SEVENTY FIVE
(4,075) SQUARE METERS. All points referred to are
indicated on the plan and marked on the ground by
Old Points; bearing true date of the cadastral survey,
Oct., 1928 to Nov., 1930.
WHEREAS, the SELLERS offer to sell and the BUYER agrees to
buy t

FIRST DIVISION

LECA REALTY CORPORATION,

G.R. No. 155605

Petitioner,
Present:

PANGANIBAN, CJ, C
hairperson,
-

versus

YNARES-

SANTIAGO,
AUSTRIAMARTINEZ,
CALLEJO, SR., and

CHICONAZARIO, JJ
REPUBLIC OF THE PHILIPPINES,
Represented by the Department
of Public Works and Highways,
Respondent.
x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- x
REPUBLIC
160179

OF

THE

G.R.

No.

PHILIPPINES,
Represented by the Department
of Public Works and Highways,
Petitioner,

- versus -

BANK OF THE PHILIPPINE ISLANDS,

CITYLAND INCORPORATED,
LECA REALTY CORPORATION, and
LEELENG REALTY CORPORATION,[1]

Promulgated:

Respondents.

Septem

ber 27, 2006

x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- --x

DECISION

PANGANIBAN, CJ:

Zonal valuation is simply one of the indices of the fair market

value of real estate. By itself, however, this index cannot be the sole
basis of just compensation in expropriation cases. The standard is not
the takers gain, but the owners loss.

The Case

Before the Court are two consolidated Petitions:

[2]

the first is a Petition for Review[3] under Rule 45 filed by

Leca Realty Corporation; and the second, a special civil

action for certiorari[4] filed under Rule 65 by the Republic
of the Philippines, represented by the Department of

Public Works and Highways (DPWH) through the Office of

the Solicitor General (OSG).

Both Petitions urge this Court to set aside the

Decision dated September 25, 2002, rendered by the
Court of Appeals (CA) in CA-GR CV No. 60731.[5] The
assailed

judgment

affirmed in

toto the

Decision

dated March 30, 1998, issued by the Regional Trial Court

(RTC) of Pasig City, Branch 159, in SCA No. 1063. [6] The
RTC

approved

determined

by

the
the

amount

of

commissioners

compensation
in

their

as

Report

dated January 8, 1998. This compensation was for the

subject properties expropriated in connection with the
construction

of

the EDSA-Shaw

Boulevard (Mandaluyong City) flyover.

The Facts

The facts are narrated by the CA as follows:

On 18 March 1996, the Republic of the

Philippines, represented by the Department of Public
Works and Highways (DPWH), filed a complaint for
eminent domain for the taking of some portions of the
properties of Leca Realty Corp. (Leca), Leeleng Realty
Inc. (Leeleng), Metropolitan Bank and Trust Co.
(Metrobank), Bank of the Philippine Islands (BPI), and

Cityland Inc. (Cityland). The said properties would be

affected by the construction of the EDSA-Shaw
Boulevard
Overpass
Project
in Shaw
Boulevard, Mandaluyong City, a public purpose to be
undertaken by the DPWH.

The
complaint
was
filed
with
the Regional Trial Court of Pasig City and was raffled to
Branch 159 of the said court.

Attached to the complaint is, among other

things, Resolution No. 94-1 of the City Appraisal
Committee of Mandaluyong, which was created to
appraise the properties that would be affected by the
construction of the project in question. In the said
resolution, the City Appraisal Committee fixed the fair
market values of defendants properties, as follows:

1. All lots situated along Shaw Boulevard from Edsa

going westward towards Manila up to Samat
Street, that City, at THIRTY FIVE THOUSAND
PESOS (P35,000) per square meter[.]

2. All lots situated along Shaw Boulevard from Edsa

going eastward towards Pasig up to San Miguel
Avenue, Pasig, Metro Manila at FORTY FIVE
THOUSAND PESOS (P45,000) per square meter[.]

The property of defendant-appellant Leca is

approximately 297.00 meters from the intersection of

Shaw Boulevard and EDSA while that of x x x Leeleng

has an approximate distance of 146 meters from the
intersection of EDSA-Shaw Boulevard.

The property of Metrobank is approximately 200

meters from EDSA and located beside Shangri-La Plaza,
within Ortigas Center while that of BPI is approximately
237 meters from EDSA and southeast of ShangriLa Plaza, within Ortigas Center.

The property of Cityland, Inc. is one lot away

from EDSA Plaza Hotel, Shangri-La Plaza and walking
distance to SM Department Store, within Ortigas Center.

On October 7, 1997, the court a quo appointed

three (3) competent and disinterested persons; namely,
Atty. Benjamin C. Angeles, Mr. Joselito E. Gunio and Mr.
Melchor Savillo as commissioners to ascertain and
report the just compensation of the properties sought to
be taken.

On January 9, 1998, the commissioners

submitted their report dated January 8, 1998, and
recommended the fair market value of the subject
properties as follows:

1.

Properties of Leca Realty Corporation and

Leeleng Realty Inc.: P50,000 per sq.m.

2.

Metropolitian Bank and Trust Co., Bank of

the Philippine Islands: P125,000 per sq.m.

3.

Cityland, Inc.: P137,500 per sq.m. plus

10%
corner
influence,
for
a
total
of P137,500 per sq.m. (sic)

In arriving at the said Report, the Commissioners

took into consideration the following factors: property
location,
identification[,]
neighborhood
data,
community facilities and utilities, highest and best use,
valuation and reasonable indication of land values
within the vicinity.

On March 30, 1998, the court rendered the

decision whereby the Commissioners Report was
adopted.[7]

Ruling of the CA

The CA affirmed the lower courts judgment for the

following reasons. First, the RTCs appointment of the
commissioners was fair and impartial. Second, the fair
market

values

of

the

affected

properties

were

unanimously arrived at by the appointed commissioners

after a thorough and objective investigation and analysis

of the properties, with due consideration of the various
factors affecting those values: location, existing facilities,
desirability, neighborhood, and size.[8]

The

appellate

court

likewise

debunked

the

contention of the Republic of the Philippines that the

commissioners had erred in fixing the fair market values
of the properties, because the appraisals exceeded the
zonal values determined in Department of Finance Order
No. 71-96. The CA held that the zonal valuation was
made for taxation purposes only and was not necessarily
reflective of the actual market values of the properties in
the area.[9]

Hence, these Petitions.[10]

The Issues

The following issues were submitted to this Court

for resolution:

1.

Is the Republic bound and put in estoppel by

the gross negligence/mistake of its agent/former
counsel? Is the Court of Appeals Decision
of September 25, 2002 in accord with law and
jurisprudence[11]

2.

Whether the Court of Appeals incurred an error

of law in affirming the amount fixed by the trial
court based on the report of the board of
commissioners ofP50,000 per square meter as just
compensation for the taking of petitioner [Lecas]
1,217 square meter property at Shaw Boulevard,
Mandaluyong City, while adjudging other parties
whose lands were also expropriated in the same
vicinity to payment of P125,000.00 per square
meter for Metrobank and BPI, andP137,500.00 per
square meter for City Land, Inc. [or] more than
double the value fixed for petitioner [Lecas]
land.[12]

The Courts Ruling

The Petition in GR 155605 is meritorious, while that

in GR 160179 is not.

First Issue:
Estoppel by the Government

Before this Court is the issue of whether Petitioner Republic is

estopped by its agents failure to file an appeal of the CA Decision.

Clearly, the questioned Decision was received by the Republic

through the OSG on October 7, 2002. Accordingly, the governments
lawyers had fifteen (15) days or until October 22, 2002, to file a motion
for reconsideration with the CA; and, in case this motion was denied,
another fifteen (15) days from the notice of the denial to file a petition
for review under Rule 45. But it was only on October 20, 2003, more
than one year later, that the Republic filed the present Petition for
Certiorari. Presumably, it resorted to the special civil action because of
its failure to file an appeal within the 15-day reglementary period.

Time and time again, this Court has emphasized that a special civil
action for certiorari under Rule 65 lies only when there is no appeal[;]
nor any plain, speedy and adequate remedy in the ordinary course of
law.[13] That action is not a substitute for a lost appeal; in general, it is
not allowed when a party to a case fails to appeal a judgment to the
proper forum.[14]

In this case, there was no reason why the Republic could not have
moved to reconsider the assailed CA Decision or appealed it within the
reglementary period. These procedural devices (reconsideration and
appeal) were not only available; they would have also constituted plain,
speedy and adequate remedies for questioning the alleged errors in the
CA Decision.

Besides, it is a hornbook doctrine that mere errors of judgment

cannot be the proper subject of a special civil action for certiorari.
[15]

International Exchange Bank v. Court of Appeals[16] stressed this rule

as follows:

x x x Where the issue or question involved affects

the wisdom or legal soundness of the decision not the
jurisdiction of the court to render said decision the
same is beyond the province of a special civil action for
certiorari. Erroneous findings and conclusions do not
render the appellate court vulnerable to the corrective
writ of certiorari, for where the court has jurisdiction
over the case, even if its findings are not correct, they
would, at the most, constitute errors of law and not
abuse
of
discretion
correctible
[17]
by certiorari.
(Emphasis supplied)

Furthermore, petitions under Rule 65 must be filed within 60

days. In the present case, the Petition was filed after over a year.

Faced with the inevitable brick wall, the Republic through the
OSG invokes the principle that a lawyers gross negligence will not bind
the client.[18] The Republic imputes the failure to file a timely appeal to
one of its lawyers, Solicitor Mauro Elinzano, who allegedly took no
action after receiving the adverse Decision of the Court of Appeals. [19] In
support of its claim, the OSG cites this Courts pronouncements that a
lawyers procedural blunder constitutes an exception to the rule that

clients are bound by the mistakes of their counsel. Hence, it implores

this Court to give due course to the Petition to prevent a miscarriage of
justice.
We are not convinced.

First, the time-honored rule that the government cannot be

estopped by the mistakes or errors of its agent is not without exceptions.
In Republic of the Philippines v. G Holdings,[20] this Court held thus:

While the Republic or the government is usually not estopped

by the mistake or error on the part of its officials or agents, the
Republic cannot now take refuge in the rule as it does not afford a
blanket or absolute immunity. Our pronouncement in Republic v. Court
of Appeals is instructive: the Solicitor-General may not be excused
from its shortcomings by invoking the doctrine as if it were some
magic incantation that could benignly, if arbitrarily, condone and erase
its errors.

The rule on non-estoppel of the government is not

designed to perpetrate an injustice. In general, the rules

on appeal are created and enforced to ensure the orderly

administration of justice. The judicial machinery would
run aground if late petitions, like the present one, are
allowed on the flimsy excuse that the attending lawyer
was grossly lacking in vigilance.

Besides, to countenance the Republics plea for

liberality would mean a reexamination of issues that have
long been settled, at least from the points of view of the
other respondents that did not appeal the CA Decision
BPI, Cityland and Leeleng. As far as they are concerned,
the appellate courts judgment datedSeptember 25,
2002, already attained finality on October 23, 2002.
[21]

Accordingly, the entry of judgment was ordered by

the CA in its Resolution dated July 25, 2003.[22]

Second,

as

Respondent

BPI

observed

in

its

Memorandum, nowhere in the pleadings of the OSG in the

lower courts did the name of Solicitor Mauro Elinzano
appear. The Republics Brief before the Court of Appeals
was signed by Assistant Solicitor General Pio C. Guerrero
and Associate Solicitor Roland C. Villaluz.[23] Neither was
evidence adduced to show the participation in the case of

Solicitor Elinzano, particularly as the attending counsel of

the Republic.
Third, we are hard-pressed in appreciating the socalled grave injustice against the government. In a
letter dated May 20, 1998, Secretary Gregorio R. Vigilar of
the DPWH instructed the OSG to file the necessary
pleading in court to either withdraw or drop the appeal on
the Decision promulgated on March 30, 1998 by the RTC,
National

Capital

Judicial

Region, Pasig City,

Branch

159.[24]

The request was predicated on the conclusion that

the

compensation

costs

as

recommended

by

the

commissioners and fixed by the court in the abovementioned Decision are reasonable and acceptable; and
that the move will hasten the legal process, thereby
shorten the time of the proceedings and stop the running
of

interest

in

the

amount P6,240,000.00

per

annum.[25] The same request was reiterated in a second

letter dated August 18, 1998, stating that the market
values recommended by the commissioners are [f]air and
reflective values prevailing in the area.[26]

The DPWH is the main government agency tasked to

implement the expropriation and subsequent construction
of the EDSA-Shaw Boulevard Overpass project. Thus, its
judgment on this matter is impossible to ignore; quite the
contrary, it should be accorded significant weight.

In the light of the circumstances, it is indeed plausible -- as

Respondent BPI submits -- that Solicitor Elinzano, or whoever was the
governments handling lawyer, purposely exercised his discretion not to
appeal the assailed CA Decision. It was altogether possible that the
OSG adopted the position of the DPWH that the valuation of the
expropriated properties, as determined by the RTC, was correct and
justified.

Lastly, we note that the OSG seeks to excuse its failure to file a
timely appeal in order to avert the alleged improvident release of public
funds and consequent unjust enrichment of the concerned property
owners.[27] Lest it be conveniently forgotten, the responsibility of
preventing the improvident release of public funds falls upon the OSG as
counsel of the government.[28] The Courts duty in this case is merely to

determine if the Decision of the lower courts in fixing just compensation

is in accord with the facts and the law.

Second Issue:
Determination of Just Compensation

The more critical issue is the determination of the amount of just

compensation for the expropriated property of Leca in GR 155605. The
Republic avers that the values arrived at in the Commissioners Report
were not supported by sufficient evidence. Moreover, they were
allegedly based on newspaper listings of advertisements, [29] which the
commissioners deemed to be reasonable indices of the fair market
value. Further, mere offers of sale -- not consummated transactions -were these listed items, save for one,[30] as follows:

1. On February 12, 1997, a property with an area of 1,600

square meter, more or less, located along Meralco Avenue,
within Ortigas Center, Pasig City, Metropolitan Manila was offered

for sale through the Manila Bulletin at an asking price of P218,000

per square meter.

2. On February 12, 1997, a property with an area of 2,015

square meter more or less, located along Dona Julia Vargas Avenue,
within Ortigas Center, Pasig City, Metropolitan Manila, was offered
for sale through the Manila Bulletin at an asking price of P330,000
per square meter.

3. On February 24, 1997, a commercial lot having an area of

2,000 square meter more or less, located along Meralco Avenue,
within Ortigas Center, PasigCity, Metropolitan Manila, was offered
for sale through the Manila Bulletin at an asking price of P200,000
per square meter.

4. On July 20, 1997, a property having an area of 1,749 square

meter more or less, located along Dona Julia Vargas Avenue,
within Ortigas Center, Pasig City, Metropolitan Manila, was offered
for sale through the Manila Bulletin at an asking price of 220,000 per
square meter.

The Revised Zonal Values of Real Properties in the City

of Mandaluyong were

implemented

on April

29,

1996,

by

the

Department of Finance under DO No. 71-96. The Republic further

argues that, according to this listing, properties classified as residential

condominiums in the vicinity of Shaw Boulevard had a zonal value
of P55,000 per square meter. On the other hand, those properties
classified as commercial condominiums had a zonal value of P60,000
per square meter.

Hence, the fair market value of the subject properties of BPI and
Cityland should not be higher than P60,000 per square meter.[31] Given
these prescribed values, the Republic contends that the compensation
was rendered unfair, unjust and unconscionable by the gross
discrepancies between the values determined for the properties of Leca
and Leeleng Realty and for those of BPI and Cityland.[32]

Leca, on the other hand, alleges that the fair market value ascribed
to its property was not sufficient. Supposedly, the Court of Appeals did
not give due consideration to the Zonal Value Table of the Bureau of
Internal Revenue.[33] Worse, the CA totally ignored the Fair Market
Value Appraisal dated November 10, 1997, prepared by Cuervo
Appraisers, Inc. This appraisal, which was submitted in compliance
with the directive of the commissioners, [34] had placed the value of
Lecas property at P70,000 per square meter.

In expropriation proceedings in general, the market

value is the just compensation to which the owner of a
condemned property is entitled. More precisely,market
value is that sum of money which a person desirous but
not compelled to buy, and an owner willing but not
compelled to sell, would agree on as a price to be given
and received therefor.[35]

Republic v. Court of Appeals[36] ruled in this wise:

The constitutional limitation of just compensation is

considered to be the sum equivalent of the market value of the
property, broadly described to be the price fixed by the seller in open
market in the usual and ordinary course of legal action and
competition or the fair value of the property as between one who
receives, and one who desires to sell, it fixed at the time of the actual
taking by the government.[37]

Just compensation, then, is the full and fair

equivalent of a property taken from its owner by the
expropriator. The measure is not the takers gain, but the
owners loss. Note must be taken that the word just is
used to stress the meaning of the word compensation,
in order to convey the idea that the equivalent to be
rendered for the property to be taken shall be real,
substantial, full and ample.[38]

Necessarily, just compensation must not be arrived

at arbitrarily, but determined after an evaluation of
different factors. In the present case, the Commissioners
Report made use of the so-called market-data approach
in arriving at the valuation of the properties. In this
method, the value of the land is based on sales and
listings of comparable property registered within the
vicinity.

As both the Republic and Leca correctly pointed out,

however, the Commissioners Report relied heavily on
newspaper advertisements of offers of sale of properties
in the vicinity. Clearly, these offers were merely asking
prices. By

their

very

nature,

they

are

subject

to

negotiations in which a buyer may ask for a lower price;

understandably, it is customary for the owner to raise the
price offer.

Well-settled

is

the

rule

that

in

expropriation

proceedings, the value of a property must be determined

either as of the date of the taking of the property or the
filing of the complaint, whichever comes first. [39] In this
case, the Complaint was filed on March 18, 1996, and the
trial court issued the Writ of Possession onJune 19, 1997.
[40]

The offers cited in the Commissioners Report, though,

were made between May 1996 to February 1997, a

period after the filing of the Complaint on March 18,
1996. Thus, there is no evidence on record of the fair
market value of the property as of March 1996.

Moreover, the offers for sale were good for

properties inside the Ortigas Center.[41] Thus, those offers

cannot be used as bases for the values of properties

along EDSA, where the property of Petitioner Leca is
situated. In fact, no listing or evidence of concluded sales
was

submitted

for

properties

the Ortigas Center. While

it

is

in
true

areas
that

outside
adjoining

properties may be valued differently, competent evidence

still has to be presented to establish the differences in
market values.

The Republic is incorrect, however, in alleging that the values

were exorbitant, merely because they exceeded the maximum zonal
value of real properties in the same location where the subject properties
were located. The zonal value may be one, but not necessarily the sole,
index of the value of a realty.[42]National Power Corporation v. Manubay
Agro-Industrial held thus:

x x x [Market value] is not limited to the assessed

value of the property or to the schedule of market
values determined by the provincial or city appraisal
committee. However, these values may serve as factors
to be considered in the judicial valuation of the
property.[43]

The above ruling finds support in EPZA v. Dulay[44] in this wise:

Various factors can come into play in the valuation of specific

properties singled out for expropriation. The values given by
provincial assessors are usually uniform for very wide areas covering
several barrios or even an entire town with the exception of
the poblacion. Individual differences are never taken into account. The
value of land is based on such generalities as its possible cultivation
for rice, corn, coconuts or other crops. Very often land described as
cogonal has been cultivated for generations. Buildings are described
in terms of only two or three classes of building materials and
estimates of areas are more often inaccurate than correct. Tax values
can serve as guides but cannot be absolute substitutes for just
compensation.[45] (Emphasis supplied)

As pointed out earlier, no other evidence was presented to support

the values determined as just compensation for Lecas property. The
only items submitted to the trial court were the Commissioners Report
and a location map, which were evidently insufficient.[46]

In National Power Corporation v. Manubay Agro-Industrial

Development Corporation,[47] the recommended price of the city assessor
was rejected by this Court. The opinions of the banks and the realtors,

as reflected in the computation of the market value of the property and in

the Commissioners Report, were not substantiated by any documentary
evidence.

Moreover, Land Bank of the Philippines v. Wycoco ruled as

follows:

x x x. While market value may be one of the bases

of determining just compensation, the same cannot be
arbitrarily arrived at without considering the factors to
be appreciated in arriving at the fair market value of
the property e.g., the cost of acquisition, the current
value of like properties, its size, shape, location, as well
as the tax declarations thereon. Since these factors
were not considered, a remand of the case for
determination of just compensation is necessary. x x
x.[48]

It must be noted, though, that the interest of Petitioner Leca is

distinct and separate from and will in no way affect the settled rights and
interests of the other parties that did not appeal the judgment of the trial

court. As to Cityland Inc., Bank of the Philippine Islands, and Leeleng

Realty Inc., the Decision below has long become final and executory.

WHEREFORE, the Petition of the Republic in GR No.

160179

is DISMISSED, while

that

of

Leca

Realty

Corporation is REMANDED to the trial court for the

proper

determination

of

the

amount

of

just

compensation. To forestall any further delay in the

resolution of this case, the trial court is hereby ordered to
fix the just compensation for Lecas property within six
months from its receipt of this Decision; and afterwards to
report to the Court its compliance. Insofar as it affects
the property of Leca Realty Corporation, the assailed
Decision of the Court of Appeals in CA GR CV No. 60731
is SET ASIDE. No costs.

SO ORDERED.

ARTEMIO V. PANGANIBAN
Chief Justice

Chairperson, First Division

WE

C O N C U R:

CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

ROMEO J. CALLEJO, SR.

Associate Justice

Associate Justice

MINITA V. CHICO-NAZARIO
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify

that the conclusions in the above Decision were reached in consultation

before the case was assigned to the writer of the opinion of the Courts
Division.

ARTEMIO V. PANGANIBAN
Chief
Justice

[1]

The Petition impleaded the Court of Appeals (CA) as a respondent. Pursuant to

Sec. 4 of Rule 45 of the Rules of Court, this Court has deleted the CA from the
title of the case.

[2]

GR Nos. 155605 and 160179 were ordered consolidated in a Resolution of the

Court dated December 15, 2004; rollo (GR No. 160179), p. 237.

[4]

[5]

[6]

[7]

Rollo (GR No. 155605), pp. 3-21.

Rollo (GR No. 160179), pp. 2-36.
Penned by Justice Andres B. Reyes, Jr. and concurred in by Justices Ruben T.
Reyes (then chairperson, 7th Division; now CA presiding justice) and Danilo B.
Pine.
Presided by Judge Rodolfo R. Bonifacio.
CA Decision, pp. 2-5; rollo (GR No. 155605), pp. 225-228; rollo (GR No.
160179), pp. 39-42. Citations omitted.

[8]

Id. at 8; id. at 231; id at 45.

[9]

Id. at 8-9; id. at 231-232; id. at 45-46.

[10]

These consolidated Petitions were deemed submitted for Decision on July 21,
2005, upon the Courts receipt of the Memorandum of Respondent BPI in GR No.
160179, signed by Atty. Justino M. Marquez III of Benedicto Versoza Gealogo
Burkley & Associates. The Memoranda of Respondents Cityland Inc. and Leeleng
Realty Corporation were filed on June 27, 2005and May 6, 2005,
respectively. The Republics Memorandum in the consolidated cases, signed by
Assistant Solicitor General Karl Miranda and Solicitor Ma. Ana C. Rivera, was
received by the Court on July 4, 2005. Petitioner Leca Realtys Memorandum in
GR No. 155605, signed by Attys. Ponciano V. Cruz Jr. and Eric Paul I. Fetalino,
was filed on January 23, 2004. Petitioner Leca also submitted a Supplemental
Memorandum in the consolidated cases on May 26, 2005.

[11]

Petitioner Republics Memorandum, p. 10; rollo (GR No. 160179), p. 443.

[12]

Petitioner Lecas Memorandum, pp. 13-14; rollo (GR No. 155605), pp. 479-480.

[13]

Hanjin Engineering v. CA, GR No. 165910, April 10, 2006; Madrigal Transport,
Inc. v. Lapanday Holdings Corp., 436 SCRA 123, August 11, 2004; Land Bank of
the Philippines v. CA, 409 SCRA 455, August 25, 2003. This is also provided under
the 1997 RULES OF COURT, Rule 65, Sec. 1.

[14]

See Del Mar v. Court of Appeals, 429 Phil. 19, March 13, 2002; Almuete v.
Andres, 421 Phil. 522, November 20, 2001; Republic v. Court of Appeals, 379
Phil. 92, January 18, 2000.

[15]

See Chan v. Court of Appeals, 457 SCRA 502, April 28, 2005; Militante v.
People, 444 SCRA 465, November 26, 2004; People v. Court of Appeals, 431
SCRA 610, June 10, 2004.

[16]

GR No. 165403, February 27, 2006, per Chico-Nazario, J.

[17]

Id.

[18]

Petition for Certiorari, p. 16; rollo (GR No. 160179), p. 17.

[19]

Id. at 17; id. at 18.

[20]

GR No. 141241, November 22, 2005, per Corona, J. (citing Republic v. CA, 211
SCRA 657, July 20, 1992).

[21]

In their respective Comments to the Petition filed by the Republic, Respondents

Cityland, Leeleng Realty Inc., and BPI stressed that the Petition for Certiorari had
been filed out of time, and that the errors committed by lawyers of the Office of
the Solicitor-General should bind the Republic. See also rollo (GR No. 160179),
p. 166.

[22]

Id. at 159-162.

[23]

Memorandum of co-respondent BPI, p. 14; rollo (GR No. 160179), p. 478.

[24]

Annex 1 of Citylands Brief; rollo (GR No. 155605), p. 315.

[25]

Id.

[26]

Annex 2 of Citylands Brief; rollo (GR No. 155605), p. 316.

[27]

Petitioner Republics Memorandum, p. 19; rollo (GR No. 160179), p. 452.

[28]

ADMINISTRATIVE CODE OF 1987, Book IV, Title III, Chapter 12, Sec. 35:
Powers and Functions. The Office of the Solicitor General shall represent the
Government of thePhilippines, its agencies and instrumentalities and its officials
and agents in any litigation proceeding, investigation or matter requiring the
services of lawyers. x x x Represent the Government in the Supreme Court and the
Court of Appeals in all criminal proceedings; represent the Government and its
officers in the Supreme Court, the Court of Appeals and all other courts or
tribunals in all civil actions and special proceedings in which the Government or
any officer thereof in his official capacity is a party.

[29]

Commissioners Report, p. 4; rollo (GR No. 160179), p. 66. The Report was
appended as Annex D of the Republics Petition for Certiorari.

[30]

Listed was a lone sale transaction stating that on May 12, 1996, a property
having an area of 1,749 sq.m., more or less, located along Dona Julia Vargas

Avenue, within Ortigas Center, Pasig City, Metropolitan Manila was sold
for P198,170 per square meter. Rollo (GR No. 160179), p. 344.
[31]

Id. at 460.

[32]

Id. at 461.

[33]

Petitioner Lecas Memorandum, p. 19; rollo (GR No. 155605), p. 485.

[34]

Id.

[35]

Manansan v. Republic of the Philippines, GR No. 140091, August 10, 2006,

per Callejo, Sr., J.; Eslaban, Jr. v. Vda. De Onorio, 412 Phil. 667, June 28,
2001; Bank of the PhilippineIslands v. CA, 441 SCRA 637, November 10, 2004.

[36]

433 Phil. 106, July 2, 2002, per Vitug, J. See also Republic v. Court of Appeals,
154 SCRA 428, September 30, 1987.

[37]

Id. at 122.

[38]

Manansan v. Republic, supra note 35; National Power Corp. v.

Manubay Agro-Industrial Development Corporation, 437 SCRA 60,
August 18, 2004 citing Association of Small Landowners in the
Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 343,
July 14, 1989.

[39]

Eslaban, Jr. v. De Onorio, supra note 35 at 678; National Power Corporation v.

Court of Appeals, 325 Phil. 29, March 11, 1996; B.H. Berkenkotter & Co. v. Court
of Appeals, 216 SCRA 584, December 14, 1992.

[40]

Record on Appeal attached to Lecas Petition, pp. 88-91; rollo (GR 155605), pp.
116-119.

[41]

RTC Decision, pp. 5-6; rollo (GR No. 160179), pp. 54-55.

[42]

See Eslaban, Jr. v. Vda. De Onorio, supra note 35.

[43]

National Power Corporation v. Manubay Agro-Industrial Development

Corporation, supra note 38 at 68, per Panganiban, J. (now CJ).

[44]

149 SCRA 305, April 29, 1987, per Gutierrez, Jr., J.

[45]

Id. at 315.

[46]

[47]

[48]

Land Bank of the Philippines v. Wycoco, (419 SCRA 67, January 13, 2004) held
that [I]nasmuch as the valuation of the property of Wycoco is the very issue in the
case at bar, the trial court should have allowed the parties to present evidence
thereon instead of practically assuming a valuation without basis.
Supra note 38 at 70.
Supra note 46 at 78, citing B.H. Berkenkotter & Co.
Appeals, supra note 39 at 587.

v. Court of

EN BANC

[G.R. No. 161656. June 29, 2005]

REPUBLIC OF THE PHILIPPINES, GENERAL ROMEO ZULUETA,

COMMODORE EDGARDO GALEOS, ANTONIO CABALUNA,
DOROTEO MANTOS & FLORENCIO BELOTINDOS, petitioners,
vs. VICENTE G. LIM, respondent.
RESOLUTION
SANDOVAL-GUTIERREZ, J.:

Justice is the first virtue of social institutions. [1] When the state wields its power of
eminent domain, there arises a correlative obligation on its part to pay the owner of the
expropriated property a just compensation. If it fails, there is a clear case of injustice
that must be redressed. In the present case, fifty-seven (57) years have lapsed from
the time the Decision in the subject expropriation proceedings became final, but still the
Republic of the Philippines, herein petitioner, has not compensated the owner of the
property. To tolerate such prolonged inaction on its part is to encourage distrust and
resentment among our people the very vices that corrode the ties of civility and tempt
men to act in ways they would otherwise shun.
A revisit of the pertinent facts in the instant case is imperative.

On September 5, 1938, the Republic of the Philippines (Republic) instituted a

special civil action for expropriation with the Court of First Instance (CFI) of Cebu,
docketed as Civil Case No. 781, involving Lots 932 and 939 of the Banilad Friar Land
Estate, Lahug, Cebu City, for the purpose of establishing a military reservation for the
Philippine Army. Lot 932 was registered in the name of Gervasia Denzon under
Transfer Certificate of Title (TCT) No. 14921 with an area of 25,137 square meters,
while Lot 939 was in the name of Eulalia Denzon and covered by TCT No. 12560
consisting of 13,164 square meters.
After depositing P9,500.00 with the Philippine National Bank, pursuant to the Order
of the CFI dated October 19, 1938, the Republic took possession of the lots.
Thereafter, or on May 14, 1940, the CFI rendered its Decision ordering the Republic to
pay the Denzons the sum of P4,062.10 as just compensation.
The Denzons interposed an appeal to the Court of Appeals but it was dismissed on
March 11, 1948. An entry of judgment was made on April 5, 1948.
In 1950, Jose Galeos, one of the heirs of the Denzons, filed with the National
Airports Corporation a claim for rentals for the two lots, but it denied knowledge of the
matter. Another heir, Nestor Belocura, brought the claim to the Office of then President
Carlos Garcia who wrote the Civil Aeronautics Administration and the Secretary of
National Defense to expedite action on said claim. On September 6, 1961, Lt. Manuel
Cabal rejected the claim but expressed willingness to pay the appraised value of the
lots within a reasonable time.
For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons
successors-in-interest, Francisca Galeos-Valdehueza and Josefina Galeos-Panerio,
[2]
filed with the same CFI an action for recovery of possession with damages against
the Republic and officers of the Armed Forces of the Philippines in possession of the
property. The case was docketed as Civil Case No. R-7208.
In the interim or on November 9, 1961, TCT Nos. 23934 and 23935 covering Lots
932 and 939 were issued in the names of Francisca Valdehueza and Josefina Panerio,
respectively. Annotated thereon was the phrase subject to the priority of the National
Airports Corporation to acquire said parcels of land, Lots 932 and 939 upon previous
payment of a reasonable market value.
On July 31, 1962, the CFI promulgated its Decision in favor of Valdehueza and
Panerio, holding that they are the owners and have retained their right as such over
Lots 932 and 939 because of the Republics failure to pay the amount of P4,062.10,
adjudged in the expropriation proceedings. However, in view of the annotation on their
land titles, they were ordered to execute a deed of sale in favor of the Republic. In view
of the differences in money value from 1940 up to the present, the court adjusted the
market value at P16,248.40, to be paid with 6% interest per annum from April 5, 1948,
date of entry in the expropriation proceedings, until full payment.
After their motion for reconsideration was denied, Valdehueza and Panerio
appealed from the CFI Decision, in view of the amount in controversy, directly to this
Court. The case was docketed as No. L-21032. [3] On May 19, 1966, this Court rendered
its Decision affirming the CFI Decision. It held that Valdehueza and Panerio are still the

registered owners of Lots 932 and 939, there having been no payment of just
compensation by the Republic. Apparently, this Court found nothing in the records to
show that the Republic paid the owners or their successors-in-interest according to the
CFI decision. While it deposited the amount of P9,500,00, and said deposit was
allegedly disbursed, however, the payees could not be ascertained.
Notwithstanding the above finding, this Court still ruled that Valdehueza and Panerio
are not entitled to recover possession of the lots but may only demand the payment of
their fair market value, ratiocinating as follows:

Appellants would contend that: (1) possession of Lots 932 and 939 should be
restored to them as owners of the same; (2) the Republic should be ordered to pay
rentals for the use of said lots, plus attorneys fees; and (3)the court a quo in the
present suit had no power to fix the value of the lots and order the execution of the
deed of sale after payment.
It is true that plaintiffs are still the registered owners of the land, there not having been
a transfer of said lots in favor of the Government. The records do not show that the
Government paid the owners or their successors-in-interest according to the 1940 CFI
decision although, as stated, P9,500.00 was deposited by it, and said deposit had been
disbursed. With the records lost, however, it cannot be known who received the
money (Exh. 14 says: It is further certified that the corresponding Vouchers and
pertinent Journal and Cash Book were destroyed during the last World War, and
therefore the names of the payees concerned cannot be ascertained.) And the
Government now admits that there is no available record showing that payment
for the value of the lots in question has been made (Stipulation of Facts, par. 9,
Rec. on Appeal, p. 28).
The points in dispute are whether such payment can still be made and, if so, in
what amount. Said lots have been the subject of expropriation proceedings. By
final and executory judgment in said proceedings, they were condemned for
public use, as part of an airport, and ordered sold to the Government. In fact, the
abovementioned title certificates secured by plaintiffs over said lots contained
annotations of the right of the National Airports Corporation (now CAA) to pay
for and acquire them. It follows that both by virtue of the judgment, long final,
in the expropriation suit, as well as the annotations upon their title certificates,
plaintiffs are not entitled to recover possession of their expropriated lots which
are still devoted to the public use for which they were expropriated but only to
demand the fair market value of the same.
Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente
Lim, herein respondent,[4] as security for their loans. For their failure to pay Lim despite
demand, he had the mortgage foreclosed in 1976. Thus, TCT No. 23934 was
cancelled, and in lieu thereof, TCT No. 63894 was issued in his name.

On August 20, 1992, respondent Lim filed a complaint for quieting of title with the
Regional Trial Court (RTC), Branch 10, Cebu City, against General Romeo Zulueta, as
Commander of the Armed Forces of the Philippines, Commodore Edgardo Galeos, as
Commander of Naval District V of the Philippine Navy, Antonio Cabaluna, Doroteo
Mantos and Florencio Belotindos, herein petitioners. Subsequently, he amended the
complaint to implead the Republic.
On May 4, 2001, the RTC rendered a decision in favor of respondent, thus:

WHEREFORE, judgment is hereby rendered in favor of plaintiff Vicente Lim and

against all defendants, public and private, declaring plaintiff Vicente Lim the
absolute and exclusive owner of Lot No. 932 with all the rights of an absolute
owner including the right to possession. The monetary claims in the complaint and
in the counter claims contained in the answer of defendants are ordered Dismissed.
Petitioners elevated the case to the Court of Appeals, docketed therein as CA-G.R.
CV No. 72915. In its Decision[5] dated September 18, 2003, the Appellate Court
sustained the RTC Decision, thus:

Obviously, defendant-appellant Republic evaded its duty of paying what was

due to the landowners. The expropriation proceedings had already become final
in the late 1940s and yet, up to now, or more than fifty (50) years after, the
Republic had not yet paid the compensation fixed by the court while
continuously reaping benefits from the expropriated property to the prejudice of
the landowner. x x x. This is contrary to the rules of fair play because the
concept of just compensation embraces not only the correct determination of the
amount to be paid to the owners of the land, but also the payment for the land
within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered just for the property owner is made to
suffer the consequence of being immediately deprived of his land while being
made to wait for a decade or more, in this case more than 50 years, before
actually receiving the amount necessary to cope with the loss. To allow the taking
of the landowners properties, and in the meantime leave them empty-handed by
withholding payment of compensation while the government speculates on
whether or not it will pursue expropriation, or worse, for government to
subsequently decide to abandon the property and return it to the landowners, is
undoubtedly an oppressive exercise of eminent domain that must never be
sanctioned. (Land Bank of the Philippines vs. Court of Appeals, 258 SCRA 404).
x x x

x x

An action to quiet title is a common law remedy for the removal of any cloud or doubt
or uncertainty on the title to real property. It is essential for the plaintiff or

complainant to have a legal or equitable title or interest in the real property, which is
the subject matter of the action. Also the deed, claim, encumbrance or proceeding that
is being alleged as cloud on plaintiffs title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy (Robles vs.
Court of Appeals, 328 SCRA 97). In view of the foregoing discussion, clearly, the
claim of defendant-appellant Republic constitutes a cloud, doubt or uncertainty
on the title of plaintiff-appellee Vicente Lim that can be removed by an action to
quiet title.
WHEREFORE, in view of the foregoing, and finding no reversible error in the
appealed May 4, 2001 Decision of Branch 9, Regional Trial Court of Cebu City, in
Civil Case No. CEB-12701, the said decision isUPHELD AND
AFFIRMED. Accordingly, the appeal is DISMISSED for lack of merit.
Undaunted, petitioners, through the Office of the Solicitor General, filed with this
Court a petition for review on certiorari alleging that the Republic has remained the
owner of Lot 932 as held by this Court in Valdehueza vs. Republic.[6]
In our Resolution dated March 1, 2004, we denied the petition outright on the
ground that the Court of Appeals did not commit a reversible error. Petitioners filed an
urgent motion for reconsideration but we denied the same with finality in our
Resolution of May 17, 2004.
On May 18, 2004, respondent filed an ex-parte motion for the issuance of an entry
of judgment. We only noted the motion in our Resolution of July 12, 2004.
On July 7, 2004, petitioners filed an urgent plea/motion for clarification, which is
actually a second motion for reconsideration. Thus, in our Resolution of September
6, 2004, we simply noted without action the motion considering that the instant petition
was already denied with finality in our Resolution of May 17, 2004.
On October 29, 2004, petitioners filed a very urgent motion for leave to file a motion
for reconsideration of our Resolution dated September 6, 2004 (with prayer to refer the
case to the En Banc). They maintain that the Republics right of ownership has been
settled in Valdehueza.
The basic issue for our resolution is whether the Republic has retained ownership of
Lot 932 despite its failure to pay respondents predecessors-in-interest the just
compensation therefor pursuant to the judgment of the CFI rendered as early as May
14, 1940.
Initially, we must rule on the procedural obstacle.
While we commend the Republic for the zeal with which it pursues the present
case, we reiterate that its urgent motion for clarification filed on July 7, 2004 is actually a
second motion for reconsideration. This motion is prohibited under Section 2, Rule 52,
of the 1997 Rules of Civil Procedure, as amended, which provides:

Sec. 2. Second motion for reconsideration. No second motion for reconsideration

of a judgment or final resolution by the same party shall be entertained.
Consequently, as mentioned earlier, we simply noted without action the motion
since petitioners petition was already denied with finality.
Considering the Republics urgent and serious insistence that it is still the owner of
Lot 932 and in the interest of justice, we take another hard look at the controversial
issue in order to determine the veracity of petitioners stance.
One of the basic principles enshrined in our Constitution is that no person shall be
deprived of his private property without due process of law; and in expropriation cases,
an essential element of due process is that there must be just compensation whenever
private property is taken for public use. [7] Accordingly, Section 9, Article III, of our
Constitution mandates: Private property shall not be taken for public use without just
compensation.
The Republic disregarded the foregoing provision when it failed and refused to pay
respondents predecessors-in-interest the just compensation for Lots 932 and 939. The
length of time and the manner with which it evaded payment demonstrate its arbitrary
high-handedness and confiscatory attitude. The final judgment in the expropriation
proceedings (Civil Case No. 781) was entered on April 5, 1948. More than half of a
century has passed, yet, to this day, the landowner, now respondent, has remained
empty-handed. Undoubtedly, over 50 years of delayed payment cannot, in any way, be
viewed as fair. This is more so when such delay is accompanied by bureaucratic
hassles. Apparent from Valdehueza is the fact that respondents predecessors-ininterest were given a run around by the Republics officials and agents. In 1950,
despite the benefits it derived from the use of the two lots, the National Airports
Corporation denied knowledge of the claim of respondents predecessors-in-interest.
Even President Garcia, who sent a letter to the Civil Aeronautics Administration and the
Secretary of National Defense to expedite the payment, failed in granting relief to them.
And, on September 6, 1961, while the Chief of Staff of the Armed Forces expressed
willingness to pay the appraised value of the lots, nothing happened.
The Court of Appeals is correct in saying that Republics delay is contrary to the
rules of fair play, as just compensation embraces not only the correct
determination of the amount to be paid to the owners of the land, but also the
payment for the land within a reasonable time from its taking. Without prompt
payment, compensation cannot be considered just. In jurisdictions similar to ours,
where an entry to the expropriated property precedes the payment of compensation, it
has been held that if the compensation is not paid in a reasonable time, the party may
be treated as a trespasser ab initio.[8]
Corollarily, in Provincial Government of Sorsogon vs. Vda. De Villaroya,[9] similar to
the present case, this Court expressed its disgust over the governments vexatious
delay in the payment of just compensation, thus:

The petitioners have been waiting for more than thirty years to be paid for their
land which was taken for use as a public high school. As a matter of fair procedure,
it is the duty of the Government, whenever it takes property from private persons
against their will, to supply all required documentation and facilitate payment of just
compensation. The imposition of unreasonable requirements and vexatious
delays before effecting payment is not only galling and arbitrary but a rich
source of discontent with government. There should be some kind of swift and
effective recourse against unfeeling and uncaring acts of middle or lower level
bureaucrats.
We feel the same way in the instant case.
More than anything else, however, it is the obstinacy of the Republic that prompted
us to dismiss its petition outright. As early as May 19, 1966, in Valdehueza, this Court
mandated the Republic to pay respondents predecessors-in-interest the sum
of P16,248.40 as reasonable market value of the two lots in question. Unfortunately, it
did not comply and allowed several decades to pass without obeying this Courts
mandate. Such prolonged obstinacy bespeaks of lack of respect to private rights and to
the rule of law, which we cannot countenance. It is tantamount to confiscation of private
property. While it is true that all private properties are subject to the need of
government, and the government may take them whenever the necessity or the
exigency of the occasion demands, however, the Constitution guarantees that when this
governmental right of expropriation is exercised, it shall be attended by compensation.
[10]
From the taking of private property by the government under the power of eminent
domain, there arises an implied promise to compensate the owner for his loss. [11]
Significantly, the above-mentioned provision of Section 9, Article III of the
Constitution is not a grant but a limitation of power. This limiting function is in keeping
with the philosophy of the Bill of Rights against the arbitrary exercise of governmental
powers to the detriment of the individuals rights. Given this function, the provision
should therefore be strictly interpreted against the expropriator, the government,
and liberally in favor of the property owner.[12]
Ironically, in opposing respondents claim, the Republic is invoking this Courts
Decision in Valdehueza, a Decision it utterly defied. How could the Republic acquire
ownership over Lot 932 when it has not paid its owner the just compensation, required
by law, for more than 50 years? The recognized rule is that title to the property
expropriated shall pass from the owner to the expropriator only upon full payment of
the just compensation. Jurisprudence on this settled principle is consistent both here
and in other democratic jurisdictions. In Association of Small Landowners in the
Philippines, Inc. et al., vs. Secretary of Agrarian Reform, [13] thus:

Title to property which is the subject of condemnation proceedings does not vest
the condemnor until the judgment fixing just compensation is entered and
paid, but the condemnors title relates back to the date on which the petition under the

Eminent Domain Act, or the commissioners report under the Local Improvement Act,
is filed.
x x x Although the right to appropriate and use land taken for a canal is complete
at the time of entry, title to the property taken remains in the owner until
payment is actually made. (Emphasis supplied.)
In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that
title to property does not pass to the condemnor until just compensation had actually
been made. In fact, the decisions appear to be uniform to this effect. As early as 1838,
in Rubottom v. McLure, it was held that actual payment to the owner of the
condemned property was a condition precedent to the investment of the title to
the property in the State albeit not to the appropriation of it to public
use. In Rexford v. Knight, the Court of Appeals of New York said that the
construction upon the statutes was that the fee did not vest in the State until the
payment of the compensation although the authority to enter upon and appropriate the
land was complete prior to the payment. Kennedy further said that both on principle
and authority the rule is . . . that the right to enter on and use the property is
complete, as soon as the property is actually appropriated under the authority of
law for a public use, but that the title does not pass from the owner without his
consent, until just compensation has been made to him.
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford absolute reassurance that no piece
of land can be finally and irrevocably taken from an unwilling owner until
compensation is paid...(Emphasis supplied.)
Clearly, without full payment of just compensation, there can be no transfer of title
from the landowner to the expropriator. Otherwise stated, the Republics acquisition of
ownership is conditioned upon the full payment of just compensation within a
reasonable time.[14]
Significantly, in Municipality of Bian v. Garcia [15] this Court ruled that the
expropriation of lands consists of two stages, to wit:

x x x The first is concerned with the determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its exercise in the context
of the facts involved in the suit. It ends with an order, if not of dismissal of the action,
of condemnation declaring that the plaintiff has a lawful right to take the property
sought to be condemned, for the public use or purpose described in the complaint,

upon the payment of just compensation to be determined as of the date of the filing of
the complaint x x x.
The second phase of the eminent domain action is concerned with the determination
by the court of the just compensation for the property sought to be taken. This is
done by the court with the assistance of not more than three (3) commissioners. x x
x.
It is only upon the completion of these two stages that expropriation is said to have
been completed. In Republic v. Salem Investment Corporation,[16] we ruled that, the
process is not completed until payment of just compensation. Thus, here, the failure of
the Republic to pay respondent and his predecessors-in-interest for a period of 57 years
rendered the expropriation process incomplete.
The Republic now argues that under Valdehueza, respondent is not entitled to
recover possession of Lot 932 but only to demand payment of its fair market value. Of
course, we are aware of the doctrine that non-payment of just compensation (in an
expropriation proceedings) does not entitle the private landowners to recover
possession of the expropriated lots. This is our ruling in the recent cases of Republic
of the Philippines vs. Court of Appeals, et al.,[17] and Reyes vs. National Housing
Authority.[18] However, the facts of the present case do not justify its application. It bears
stressing that the Republic was ordered to pay just compensation twice, the first was in
the expropriation proceedings and the second, in Valdehueza. Fifty-seven (57) years
have passed since then. We cannot but construe the Republics failure to pay just
compensation
as
a
deliberate
refusal
on
its
part. Under
such
circumstance, recovery of possession is in order. In several jurisdictions, the courts
held that recovery of possession may be had when property has been wrongfully taken
or is wrongfully retained by one claiming to act under the power of eminent domain [19] or
where a rightful entry is made and the party condemning refuses to pay the
compensation which has been assessed or agreed upon; [20]or fails or refuses to
have the compensation assessed and paid.[21]
The Republic also contends that where there have been constructions being used
by the military, as in this case, public interest demands that the present suit should not
be sustained.
It must be emphasized that an individual cannot be deprived of his property for the
public convenience.[22] In Association of Small Landowners in the Philippines, Inc. vs.
Secretary of Agrarian Reform,[23] we ruled:

One of the basic principles of the democratic system is that where the rights of the
individual are concerned, the end does not justify the means. It is not enough that
there be a valid objective; it is also necessary that the means employed to pursue it be
in keeping with the Constitution. Mere expediency will not excuse constitutional
shortcuts. There is no question that not even the strongest moral conviction or the
most urgent public need, subject only to a few notable exceptions, will excuse the

bypassing of an individual's rights. It is no exaggeration to say that a person

invoking a right guaranteed under Article III of the Constitution is a majority of
one even as against the rest of the nation who would deny him that right.
The right covers the persons life, his liberty and his property under Section 1 of
Article III of the Constitution. With regard to his property, the owner enjoys the
added protection of Section 9, which reaffirms the familiar rule that private
property shall not be taken for public use without just compensation.
The Republics assertion that the defense of the State will be in grave danger if we
shall order the reversion of Lot 932 to respondent is an overstatement. First, Lot 932
had ceased to operate as an airport. What remains in the site is just the National
Historical Institutes marking stating that Lot 932 is the former location of Lahug
Airport. And second, there are only thirteen (13) structures located on Lot 932, eight
(8) of which are residence apartments of military personnel. Only two (2) buildings are
actually used as training centers. Thus, practically speaking, the reversion of Lot 932 to
respondent will only affect a handful of military personnel. It will not result to
irreparable damage or damage beyond pecuniary estimation, as what the Republic
vehemently claims.
We thus rule that the special circumstances prevailing in this case entitle
respondent to recover possession of the expropriated lot from the Republic. Unless this
form of swift and effective relief is granted to him, the grave injustice committed against
his predecessors-in-interest, though no fault or negligence on their part, will be
perpetuated. Let this case, therefore, serve as a wake-up call to the Republic that in the
exercise of its power of eminent domain, necessarily in derogation of private rights, it
must comply with the Constitutional limitations. This Court, as the guardian of the
peoples right, will not stand still in the face of the Republics oppressive and
confiscatory taking of private property, as in this case.
At this point, it may be argued that respondent Vicente Lim acted in bad faith in
entering into a contract of mortgage with Valdehueza and Panerio despite the clear
annotation in TCT No. 23934 that Lot 932 is subject to the priority of the National
Airports Corporation [to acquire said parcels of land] x x x upon previous
payment of a reasonable market value.
The issue of whether or not respondent acted in bad faith is immaterial considering
that the Republic did not complete the expropriation process. In short, it failed to perfect
its title over Lot 932 by its failure to pay just compensation. The issue of bad faith would
have assumed relevance if the Republic actually acquired title over Lot 932. In such a
case, even if respondents title was registered first, it would be the Republics title or
right of ownership that shall be upheld. But now, assuming that respondent was in
bad faith, can such fact vest upon the Republic a better title over Lot 932? We
believe not. This is because in the first place, the Republic has no title to speak of.
At any rate, assuming that respondent had indeed knowledge of the annotation, still
nothing would have prevented him from entering into a mortgage contract involving Lot

932 while the expropriation proceeding was pending. Any person who deals with a
property subject of an expropriation does so at his own risk, taking into account the
ultimate possibility of losing the property in favor of the government. Here, the
annotation merely served as a caveat that the Republic had a preferential right to
acquire Lot 932 upon its payment of a reasonable market value. It did not
proscribe Valdehueza and Panerio from exercising their rights of ownership including
their right to mortgage or even to dispose of their property. In Republic vs. Salem
Investment Corporation,[24] we recognized the owners absolute right over his property
pending completion of the expropriation proceeding, thus:

It is only upon the completion of these two stages that expropriation is said to have
been completed. Moreover, it is only upon payment of just compensation that title
over the property passes to the government. Therefore, until the action for
expropriation has been completed and terminated, ownership over the property being
expropriated remains with the registered owner. Consequently, the latter can
exercise all rights pertaining to an owner, including the right to dispose of his
property subject to the power of the State ultimately to acquire it through
expropriation.
It bears emphasis that when Valdehueza and Panerio mortgaged Lot 932 to
respondent in 1964, they were still the owners thereof and their title had not yet passed
to the petitioner Republic. In fact, it never did. Such title or ownership was rendered
conclusive when we categorically ruled in Valdehueza that: It is true that plaintiffs
are still the registered owners of the land, there not having been a transfer of said
lots in favor of the Government.
For respondents part, it is reasonable to conclude that he entered into the contract
of mortgage with Valdehueza and Panerio fully aware of the extent of his right as a
mortgagee. A mortgage is merely an accessory contract intended to secure the
performance of the principal obligation. One of its characteristics is that it
is inseparable from the property. It adheres to the property regardless of who its owner
may subsequently be.[25] Respondent must have known that even if Lot 932 is ultimately
expropriated by the Republic, still, his right as a mortgagee is protected. In this regard,
Article 2127 of the Civil Code provides:

Art. 2127. The mortgage extends to the natural accessions, to the improvements,
growing fruits, and the rents or income not yet received when the obligation becomes
due, and to the amount of the indemnity granted or owing to the proprietor from the
insurers of the property mortgaged, or in virtue of expropriation for public use, with
the declarations, amplifications, and limitations established by law, whether the
estate remains in the possession of the mortgagor or it passes in the hands of a
third person.
In summation, while the prevailing doctrine is that the non-payment of just
compensation does not entitle the private landowner to recover possession of the

expropriated lots,[26] however, in cases where the government failed to pay just
compensation within five (5)[27] years from the finality of the judgment in the
expropriation proceedings, the owners concerned shall have the right to recover
possession of their property. This is in consonance with the principle that the
government cannot keep the property and dishonor the judgment. [28] To be sure, the
five-year period limitation will encourage the government to pay just compensation
punctually. This is in keeping with justice and equity. After all, it is the duty of the
government, whenever it takes property from private persons against their will, to
facilitate the payment of just compensation. In Cosculluela v. Court of Appeals,[29] we
defined just compensation as not only the correct determination of the amount to be
paid to the property owner but also the payment of the property within a reasonable
time. Without prompt payment, compensation cannot be considered just.
WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No.
72915 is AFFIRMED in toto.
The Republics motion for reconsideration of our Resolution dated March 1, 2004 is
DENIED with FINALITY. No further pleadings will be allowed.
Let an entry of judgment be made in this case.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Carpio,
Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, ChicoNazario, and Garcia, JJ.,concur.

[1]

Rawls, A Theory of Justice (1971) at 4.

[2]

They were joined by their husbands, Angel Valdehueza and Pablo Panerio, and father, Jose Galeos.

[3]

May 19, 1966, 17 SCRA 107.

[4]

The mortgage was duly annotated at the back of the mortgagors title in 1964, while the Decision of this
Court in Valdehueza vs. Republic was annotated in 1974.

[5]

Penned by Justice Sergio L. Pestao (retired) and concurred in by Justices Perlita J. Tria Tirona and
Jose C. Mendoza.

[6]

Supra.

[7]

Coscuella vs. Court of Appeals, No. L-77765, August 15, 1988, 164 SCRA 393, citing Province of
Pangasinan vs. CFI Judge of Pangasinan, Branch VIII, 80 SCRA 117, 120-121 (1977).

[8]

Law of Eminent Domain, Third Edition, Volume II 931 citing Cushman vs. Smith, 34 Me. 247; and
see Davis vs. Russel, 47 Me. 443.

[9]

No. L-64037, August 27, 1987, 153 SCRA 291.

[10]

26 Am Jur 2d 168.

[11]

Ibid.

[12]

Cruz, Constitutional Law, 1995 Ed., at 58-59.

[13]

G.R. No. 78742, July 14, 1989, 175 SCRA 343.

[14]

Just compensation is described as a full and fair equivalent of the property taken from the private
owner by the expropriator. This is intended to indemnify the owner fully for the loss he has
sustained as a result of the expropriation. The measure of this compensation is not the takers
gain but the owners loss. The word just is used to intensify the meaning of the word
compensation, to convey the idea that the equivalent to be rendered for the property taken shall
be real, substantial, full, ample. (Manila Railroad Co. vs. Velasquez, 32 Phil. 286).

[15]

G.R. No. 69260, December 22, 1989, 180 SCRA 576, 583-584.

[16]

G.R. No. 137569, June 23, 2000, 334 SCRA 320, 329.

[17]

G.R. No. 146587, July 2, 2002, 383 SCRA 611.

[18]

G.R. No. 147511, January 20, 2003, 395 SCRA 494.

[19]

Law of Eminent Domain, Third Edition, Volume II 927 citing Robinson vs. Southern California Ry.Co.,
129 Cal. 8, 61 Pac. 947; Meeker vs. Chicago, 23 Ill. App. 23; Wilson vs. Muskegon etc. R.R. Co.,
132 Mich. 469, 93 N.W. 1059; Illinois Cent.R.R. Co. vs. Hoskins, 80 Miss. 730, 32 So. 150, 92 Am
St. Rep. 612; McClinton vs. Pittsburg etc. Ry Co., 66 Pa St. 404

[20]

Id., citing White vs. Wabash, St. Louis & Pacific Ry. Co., 64 Ia. 281,20 N.W. 436; St. Joseph & Denver
City R.R. Co. vs. Callender, 13 Kan. 496; Blackshire vs. Atchison,Topeka and Sta. Fe R.R. Co.,
13 Kan. 514; Kanne v. Minneapolis & St. Louis Ry.Co., 30 Minn. 423; Bartleson vs. Minneapolis,
33 Minn. 468; Wheeling etc. R.R.Co. vs. Warrell, 122 Pa St. 613, 16 Alt 20

[21]

Id., citing Connellsville Gas Coal Co. vs. Baltimore, etc. R.R. Co., 216 Pa St.309, 65 Atl. 669.

[22]

Law of Eminent Domain, Third Edition, Volume II 929 citing Hooper vs. Columbus & Western Ry.Co.,
78 Ala. 213; Stratten vs. Great Western & Bradford Ry.Co., 40 L.J. Eq. 50. In the latter case the
court says. With regard to what is said as to public interests, I am not inclined to listen to any
suggestion of public interest as against private rights acquired in a lawful way. I do not think that
the interest of the public in using something that is provided for their convenience is to be upheld
at the price of saying that a persons property is to be confiscated for that purpose. A man who
comes to this court is entitled to have his rights ascertained and declared, however, inconvenient
it may be to third persons to whom it may be a convenience to have the use of his property.

[23]

Supra at 375-376.

[24]

Supra.

[25]

Paras, Civil Code of the Philippines Annotated, 14th Ed., Book V, at 1021.

[26]

Republic of the Philippines vs. Court of Appeals, supra. and Reyes vs. National Housing
Authority, supra.

[27]

Section 6, Rule 39 provides that: A final and executory judgment or order may be executed on motion
within five (5) years from the date of its entry. After the lapse of such time, and before it is barred
by the statute of limitations, a judgment may be enforced by action. The revived judgment may
also be enforced by motion within (5) years from the date of its entry and thereafter by action
before it is barred by the statute of limitations.

[28]

Commissioner of Public Highways v. San Diego, No. L-30098, February 18, 1970.

[29]

No. L-77765, August 15, 1988, 164 SCRA 393.