Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 122846
January 20, 2009
WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA TOURIST &
DEVELOPMENT CORPORATION, Petitioners,
vs.
CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent.
DECISION
Tinga, J.:
With another city ordinance of Manila also principally involving the tourist district as subject,
the Court is confronted anew with the incessant clash between government power and
individual liberty in tandem with the archetypal tension between law and morality.
In City of Manila v. Laguio, Jr.,1 the Court affirmed the nullification of a city ordinance barring
the operation of motels and inns, among other establishments, within the Ermita-Malate area.
The petition at bar assails a similarly-motivated city ordinance that prohibits those same
establishments from offering short-time admission, as well as pro-rated or "wash up" rates for
such abbreviated stays. Our earlier decision tested the city ordinance against our sacred
constitutional rights to liberty, due process and equal protection of law. The same parameters
apply to the present petition.
This Petition2 under Rule 45 of the Revised Rules on Civil Procedure, which seeks the
reversal of the Decision3 in C.A.-G.R. S.P. No. 33316 of the Court of Appeals, challenges the
validity of Manila City Ordinance No. 7774 entitled, "An Ordinance Prohibiting Short-Time
Admission, Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns,
Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila" (the
Ordinance).
I.
The facts are as follows:
On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the Ordinance. 4
The Ordinance is reproduced in full, hereunder:
SECTION 1. Declaration of Policy. It is hereby the declared policy of the City Government to
protect the best interest, health and welfare, and the morality of its constituents in general and
the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting short time
admission in hotels, motels, lodging houses, pension houses and similar establishments in the
City of Manila.
SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate or
other similarly concocted terms, are hereby prohibited in hotels, motels, inns, lodging houses,
pension houses and similar establishments in the City of Manila.
SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance and charging of
room rate for less than twelve (12) hours at any given time or the renting out of rooms more
than twice a day or any other term that may be concocted by owners or managers of said
establishments but would mean the same or would bear the same meaning.

SEC. 5. Penalty Clause. Any person or corporation who shall violate any provision of this
ordinance shall upon conviction thereof be punished by a fine of Five Thousand (P5,000.00)
Pesos or imprisonment for a period of not exceeding one (1) year or both such fine and
imprisonment at the discretion of the court; Provided, That in case of [a] juridical person, the
president, the manager, or the persons in charge of the operation thereof shall be liable:
Provided, further, That in case of subsequent conviction for the same offense, the business
license of the guilty party shall automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of City ordinances not consistent with or
contrary to this measure or any portion hereof are hereby deemed repealed.
SEC. 7. Effectivity. This ordinance shall take effect immediately upon approval.
Enacted by the city Council of Manila at its regular session today, November 10, 1992.
Approved by His Honor, the Mayor on December 3, 1992.
On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed a
complaint for declaratory relief with prayer for a writ of preliminary injunction and/or temporary
restraining order ( TRO)5 with the Regional Trial Court (RTC) of Manila, Branch 9 impleading
as defendant, herein respondent City of Manila (the City) represented by Mayor Lim. 6 MTDC
prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited
establishments, be declared invalid and unconstitutional. MTDC claimed that as owner and
operator of the Victoria Court in Malate, Manila it was authorized by Presidential Decree (P.D.)
No. 259 to admit customers on a short time basis as well as to charge customers wash up
rates for stays of only three hours.
On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation (TC)
and Sta. Mesa Tourist and Development Corporation (STDC) filed a motion to intervene and to
admit attached complaint-in-intervention7 on the ground that the Ordinance directly affects
their business interests as operators of drive-in-hotels and motels in Manila. 8 The three
companies are components of the Anito Group of Companies which owns and operates
several hotels and motels in Metro Manila.9
On December 23, 1992, the RTC granted the motion to intervene. 10 The RTC also notified the
Solicitor General of the proceedings pursuant to then Rule 64, Section 4 of the Rules of Court.
On the same date, MTDC moved to withdraw as plaintiff. 11
On December 28, 1992, the RTC granted MTDC's motion to withdraw. 12 The RTC issued a
TRO on January 14, 1993, directing the City to cease and desist from enforcing the
Ordinance.13 The City filed an Answer dated January 22, 1993 alleging that the Ordinance is a
legitimate exercise of police power.14
On February 8, 1993, the RTC issued a writ of preliminary injunction ordering the city to desist
from the enforcement of the Ordinance.15 A month later, on March 8, 1993, the Solicitor
General filed his Comment arguing that the Ordinance is constitutional.
During the pre-trial conference, the WLC, TC and STDC agreed to submit the case for
decision without trial as the case involved a purely legal question. 16 On October 20, 1993, the
RTC rendered a decision declaring the Ordinance null and void. The dispositive portion of the
decision reads:
WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is
hereby declared null and void.
Accordingly, the preliminary injunction heretofor issued is hereby made permanent.
SO ORDERED.17

The RTC noted that the ordinance "strikes at the personal liberty of the individual guaranteed
and jealously guarded by the Constitution."18 Reference was made to the provisions of the
Constitution encouraging private enterprises and the incentive to needed investment, as well
as the right to operate economic enterprises. Finally, from the observation that the illicit
relationships the Ordinance sought to dissuade could nonetheless be consummated by simply
paying for a 12-hour stay, the RTC likened the law to the ordinance annulled in Ynot v.
Intermediate Appellate Court,19 where the legitimate purpose of preventing indiscriminate
slaughter of carabaos was sought to be effected through an inter-province ban on the
transport of carabaos and carabeef.
The City later filed a petition for review on certiorari with the Supreme Court.20 The petition
was docketed as G.R. No. 112471. However in a resolution dated January 26, 1994, the Court
treated the petition as a petition for certiorari and referred the petition to the Court of
Appeals.21
Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of police
power pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities,
among other local government units, the power:
[To] regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses,
hotels, motels, inns, pension houses, lodging houses and other similar establishments,
including tourist guides and transports.22
The Ordinance, it is argued, is also a valid exercise of the power of the City under Article III,
Section 18(kk) of the Revised Manila Charter, thus:
"to enact all ordinances it may deem necessary and proper for the sanitation and safety, the
furtherance of the prosperity and the promotion of the morality, peace, good order, comfort,
convenience and general welfare of the city and its inhabitants, and such others as be
necessary to carry into effect and discharge the powers and duties conferred by this Chapter;
and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos
fine or six months imprisonment, or both such fine and imprisonment for a single offense. 23
Petitioners argued that the Ordinance is unconstitutional and void since it violates the right to
privacy and the freedom of movement; it is an invalid exercise of police power; and it is an
unreasonable and oppressive interference in their business.
The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the
Ordinance.24 First, it held that the Ordinance did not violate the right to privacy or the freedom
of movement, as it only penalizes the owners or operators of establishments that admit
individuals for short time stays. Second, the virtually limitless reach of police power is only
constrained by having a lawful object obtained through a lawful method. The lawful objective
of the Ordinance is satisfied since it aims to curb immoral activities. There is a lawful method
since the establishments are still allowed to operate. Third, the adverse effect on the
establishments is justified by the well-being of its constituents in general. Finally, as held in
Ermita-Malate Motel Operators Association v. City Mayor of Manila, liberty is regulated by law.
TC, WLC and STDC come to this Court via petition for review on certiorari. 25 In their petition
and Memorandum, petitioners in essence repeat the assertions they made before the Court of
Appeals. They contend that the assailed Ordinance is an invalid exercise of police power.
II.
We must address the threshold issue of petitioners standing. Petitioners allege that as owners
of establishments offering "wash-up" rates, their business is being unlawfully interfered with by

the Ordinance. However, petitioners also allege that the equal protection rights of their clients
are also being interfered with. Thus, the crux of the matter is whether or not these
establishments have the requisite standing to plead for protection of their patrons' equal
protection rights.
Standing or locus standi is the ability of a party to demonstrate to the court sufficient
connection to and harm from the law or action challenged to support that party's participation
in the case. More importantly, the doctrine of standing is built on the principle of separation of
powers,26 sparing as it does unnecessary interference or invalidation by the judicial branch of
the actions rendered by its co-equal branches of government.
The requirement of standing is a core component of the judicial system derived directly from
the Constitution.27 The constitutional component of standing doctrine incorporates concepts
which concededly are not susceptible of precise definition. 28 In this jurisdiction, the extancy of
"a direct and personal interest" presents the most obvious cause, as well as the standard test
for a petitioner's standing.29 In a similar vein, the United States Supreme Court reviewed and
elaborated on the meaning of the three constitutional standing requirements of injury,
causation, and redressability in Allen v. Wright.30
Nonetheless, the general rules on standing admit of several exceptions such as the
overbreadth doctrine, taxpayer suits, third party standing and, especially in the Philippines, the
doctrine of transcendental importance.31
For this particular set of facts, the concept of third party standing as an exception and the
overbreadth doctrine are appropriate. In Powers v. Ohio,32 the United States Supreme Court
wrote that: "We have recognized the right of litigants to bring actions on behalf of third parties,
provided three important criteria are satisfied: the litigant must have suffered an injury-in-fact,
thus giving him or her a "sufficiently concrete interest" in the outcome of the issue in dispute;
the litigant must have a close relation to the third party; and there must exist some hindrance
to the third party's ability to protect his or her own interests." 33 Herein, it is clear that the
business interests of the petitioners are likewise injured by the Ordinance. They rely on the
patronage of their customers for their continued viability which appears to be threatened by
the enforcement of the Ordinance. The relative silence in constitutional litigation of such
special interest groups in our nation such as the American Civil Liberties Union in the United
States may also be construed as a hindrance for customers to bring suit. 34
American jurisprudence is replete with examples where parties-in-interest were allowed
standing to advocate or invoke the fundamental due process or equal protection claims of
other persons or classes of persons injured by state action. In Griswold v. Connecticut,35 the
United States Supreme Court held that physicians had standing to challenge a reproductive
health statute that would penalize them as accessories as well as to plead the constitutional
protections available to their patients. The Court held that:
"The rights of husband and wife, pressed here, are likely to be diluted or adversely affected
unless those rights are considered in a suit involving those who have this kind of confidential
relation to them."36
An even more analogous example may be found in Craig v. Boren,37 wherein the United
States Supreme Court held that a licensed beverage vendor has standing to raise the equal
protection claim of a male customer challenging a statutory scheme prohibiting the sale of
beer to males under the age of 21 and to females under the age of 18. The United States High

Court explained that the vendors had standing "by acting as advocates of the rights of third
parties who seek access to their market or function." 38
Assuming arguendo that petitioners do not have a relationship with their patrons for the former
to assert the rights of the latter, the overbreadth doctrine comes into play. In overbreadth
analysis, challengers to government action are in effect permitted to raise the rights of third
parties. Generally applied to statutes infringing on the freedom of speech, the overbreadth
doctrine applies when a statute needlessly restrains even constitutionally guaranteed rights. 39
In this case, the petitioners claim that the Ordinance makes a sweeping intrusion into the right
to liberty of their clients. We can see that based on the allegations in the petition, the
Ordinance suffers from overbreadth.
We thus recognize that the petitioners have a right to assert the constitutional rights of their
clients to patronize their establishments for a "wash-rate" time frame.
III.
To students of jurisprudence, the facts of this case will recall to mind not only the recent City
of Manila ruling, but our 1967 decision in Ermita-Malate Hotel and Motel Operations
Association, Inc., v. Hon. City Mayor of Manila.40 Ermita-Malate concerned the City ordinance
requiring patrons to fill up a prescribed form stating personal information such as name,
gender, nationality, age, address and occupation before they could be admitted to a motel,
hotel or lodging house. This earlier ordinance was precisely enacted to minimize certain
practices deemed harmful to public morals. A purpose similar to the annulled ordinance in City
of Manila which sought a blanket ban on motels, inns and similar establishments in the
Ermita-Malate area. However, the constitutionality of the ordinance in Ermita-Malate was
sustained by the Court.
The common thread that runs through those decisions and the case at bar goes beyond the
singularity of the localities covered under the respective ordinances. All three ordinances were
enacted with a view of regulating public morals including particular illicit activity in transient
lodging establishments. This could be described as the middle case, wherein there is no
wholesale ban on motels and hotels but the services offered by these establishments have
been severely restricted. At its core, this is another case about the extent to which the State
can intrude into and regulate the lives of its citizens.
The test of a valid ordinance is well established. A long line of decisions including City of
Manila has held that for an ordinance to be valid, it must not only be within the corporate
powers of the local government unit to enact and pass according to the procedure prescribed
by law, it must also conform to the following substantive requirements: (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. 41
The Ordinance prohibits two specific and distinct business practices, namely wash rate
admissions and renting out a room more than twice a day. The ban is evidently sought to be
rooted in the police power as conferred on local government units by the Local Government
Code through such implements as the general welfare clause.
A.
Police power, while incapable of an exact definition, has been purposely veiled in general
terms to underscore its comprehensiveness to meet all exigencies and provide enough room
for an efficient and flexible response as the conditions warrant. 42 Police power is based upon

the concept of necessity of the State and its corresponding right to protect itself and its
people.43 Police power has been used as justification for numerous and varied actions by the
State. These range from the regulation of dance halls, 44 movie theaters,45 gas stations46 and
cockpits.47 The awesome scope of police power is best demonstrated by the fact that in its
hundred or so years of presence in our nations legal system, its use has rarely been denied.
The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered
establishments for illicit sex, prostitution, drug use and alike. These goals, by themselves, are
unimpeachable and certainly fall within the ambit of the police power of the State. Yet the
desirability of these ends do not sanctify any and all means for their achievement. Those
means must align with the Constitution, and our emerging sophisticated analysis of its
guarantees to the people. The Bill of Rights stands as a rebuke to the seductive theory of
Macchiavelli, and, sometimes even, the political majorities animated by his cynicism.
Even as we design the precedents that establish the framework for analysis of due process or
equal protection questions, the courts are naturally inhibited by a due deference to the coequal branches of government as they exercise their political functions. But when we are
compelled to nullify executive or legislative actions, yet another form of caution emerges. If the
Court were animated by the same passing fancies or turbulent emotions that motivate many
political decisions, judicial integrity is compromised by any perception that the judiciary is
merely the third political branch of government. We derive our respect and good standing in
the annals of history by acting as judicious and neutral arbiters of the rule of law, and there is
no surer way to that end than through the development of rigorous and sophisticated legal
standards through which the courts analyze the most fundamental and far-reaching
constitutional questions of the day.
B.
The primary constitutional question that confronts us is one of due process, as guaranteed
under Section 1, Article III of the Constitution. Due process evades a precise definition. 48 The
purpose of the guaranty is to prevent arbitrary governmental encroachment against the life,
liberty and property of individuals. The due process guaranty serves as a protection against
arbitrary regulation or seizure. Even corporations and partnerships are protected by the
guaranty insofar as their property is concerned.
The due process guaranty has traditionally been interpreted as imposing two related but
distinct restrictions on government, "procedural due process" and "substantive due process."
Procedural due process refers to the procedures that the government must follow before it
deprives a person of life, liberty, or property.49 Procedural due process concerns itself with
government action adhering to the established process when it makes an intrusion into the
private sphere. Examples range from the form of notice given to the level of formality of a
hearing.
If due process were confined solely to its procedural aspects, there would arise absurd
situation of arbitrary government action, provided the proper formalities are followed.
Substantive due process completes the protection envisioned by the due process clause. It
inquires whether the government has sufficient justification for depriving a person of life,
liberty, or property.50
The question of substantive due process, moreso than most other fields of law, has reflected
dynamism in progressive legal thought tied with the expanded acceptance of fundamental
freedoms. Police power, traditionally awesome as it may be, is now confronted with a more

rigorous level of analysis before it can be upheld. The vitality though of constitutional due
process has not been predicated on the frequency with which it has been utilized to achieve a
liberal result for, after all, the libertarian ends should sometimes yield to the prerogatives of the
State. Instead, the due process clause has acquired potency because of the sophisticated
methodology that has emerged to determine the proper metes and bounds for its application.
C.
The general test of the validity of an ordinance on substantive due process grounds is best
tested when assessed with the evolved footnote 4 test laid down by the U.S. Supreme Court
in U.S. v. Carolene Products.51 Footnote 4 of the Carolene Products case acknowledged that
the judiciary would defer to the legislature unless there is a discrimination against a "discrete
and insular" minority or infringement of a "fundamental right." 52 Consequently, two standards
of judicial review were established: strict scrutiny for laws dealing with freedom of the mind or
restricting the political process, and the rational basis standard of review for economic
legislation.
A third standard, denominated as heightened or immediate scrutiny, was later adopted by the
U.S. Supreme Court for evaluating classifications based on gender 53 and legitimacy.54
Immediate scrutiny was adopted by the U.S. Supreme Court in Craig, 55 after the Court
declined to do so in Reed v. Reed.56 While the test may have first been articulated in equal
protection analysis, it has in the United States since been applied in all substantive due
process cases as well.
We ourselves have often applied the rational basis test mainly in analysis of equal protection
challenges.57 Using the rational basis examination, laws or ordinances are upheld if they
rationally further a legitimate governmental interest. 58 Under intermediate review,
governmental interest is extensively examined and the availability of less restrictive measures
is considered.59 Applying strict scrutiny, the focus is on the presence of compelling, rather than
substantial, governmental interest and on the absence of less restrictive means for achieving
that interest.
In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard for
determining the quality and the amount of governmental interest brought to justify the
regulation of fundamental freedoms.60 Strict scrutiny is used today to test the validity of laws
dealing with the regulation of speech, gender, or race as well as other fundamental rights as
expansion from its earlier applications to equal protection. 61 The United States Supreme Court
has expanded the scope of strict scrutiny to protect fundamental rights such as suffrage, 62
judicial access63 and interstate travel.64
If we were to take the myopic view that an Ordinance should be analyzed strictly as to its
effect only on the petitioners at bar, then it would seem that the only restraint imposed by the
law which we are capacitated to act upon is the injury to property sustained by the petitioners,
an injury that would warrant the application of the most deferential standard the rational
basis test. Yet as earlier stated, we recognize the capacity of the petitioners to invoke as well
the constitutional rights of their patrons those persons who would be deprived of availing
short time access or wash-up rates to the lodging establishments in question.
Viewed cynically, one might say that the infringed rights of these customers were are trivial
since they seem shorn of political consequence. Concededly, these are not the sort of
cherished rights that, when proscribed, would impel the people to tear up their cedulas. Still,
the Bill of Rights does not shelter gravitas alone. Indeed, it is those "trivial" yet fundamental

freedoms which the people reflexively exercise any day without the impairing awareness of
their constitutional consequence that accurately reflect the degree of liberty enjoyed by the
people. Liberty, as integrally incorporated as a fundamental right in the Constitution, is not a
Ten Commandments-style enumeration of what may or what may not be done; but rather an
atmosphere of freedom where the people do not feel labored under a Big Brother presence as
they interact with each other, their society and nature, in a manner innately understood by
them as inherent, without doing harm or injury to others.
D.
The rights at stake herein fall within the same fundamental rights to liberty which we upheld in
City of Manila v. Hon. Laguio, Jr. We expounded on that most primordial of rights, thus:
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right
to exist and the right to be free from arbitrary restraint or servitude. The term cannot be
dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed
to embrace the right of man to enjoy the facilities with which he has been endowed by his
Creator, subject only to such restraint as are necessary for the common welfare."[ 65] In
accordance with this case, the rights of the citizen to be free to use his faculties in all lawful
ways; to live and work where he will; to earn his livelihood by any lawful calling; and to pursue
any avocation are all deemed embraced in the concept of liberty.[ 66]
The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the
meaning of "liberty." It said:
While the Court has not attempted to define with exactness the liberty . . . guaranteed [by the
Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint
but also the right of the individual to contract, to engage in any of the common occupations of
life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship
God according to the dictates of his own conscience, and generally to enjoy those privileges
long recognized . . . as essential to the orderly pursuit of happiness by free men. In a
Constitution for a free people, there can be no doubt that the meaning of "liberty" must be
broad indeed.67 [Citations omitted]
It cannot be denied that the primary animus behind the ordinance is the curtailment of sexual
behavior. The City asserts before this Court that the subject establishments "have gained
notoriety as venue of prostitution, adultery and fornications in Manila since they provide the
necessary atmosphere for clandestine entry, presence and exit and thus became the ideal
haven for prostitutes and thrill-seekers." 68 Whether or not this depiction of a mise-en-scene of
vice is accurate, it cannot be denied that legitimate sexual behavior among willing married or
consenting single adults which is constitutionally protected 69 will be curtailed as well, as it was
in the City of Manila case. Our holding therein retains significance for our purposes:
The concept of liberty compels respect for the individual whose claim to privacy and
interference demands respect. As the case of Morfe v. Mutuc, borrowing the words of Laski,
so very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness, his
isolation, are indefeasible; indeed, they are so fundamental that they are the basis on which
his civic obligations are built. He cannot abandon the consequences of his isolation, which
are, broadly speaking, that his experience is private, and the will built out of that experience
personal to himself. If he surrenders his will to others, he surrenders himself. If his will is set

by the will of others, he ceases to be a master of himself. I cannot believe that a man no
longer a master of himself is in any real sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of
which should be justified by a compelling state interest. Morfe accorded recognition to the
right to privacy independently of its identification with liberty; in itself it is fully deserving of
constitutional protection. Governmental powers should stop short of certain intrusions into the
personal life of the citizen.70
We cannot discount other legitimate activities which the Ordinance would proscribe or impair.
There are very legitimate uses for a wash rate or renting the room out for more than twice a
day. Entire families are known to choose pass the time in a motel or hotel whilst the power is
momentarily out in their homes. In transit passengers who wish to wash up and rest between
trips have a legitimate purpose for abbreviated stays in motels or hotels. Indeed any person or
groups of persons in need of comfortable private spaces for a span of a few hours with
purposes other than having sex or using illegal drugs can legitimately look to staying in a
motel or hotel as a convenient alternative.
E.
That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and
the petitioners of lucrative business ties in with another constitutional requisite for the
legitimacy of the Ordinance as a police power measure. It must appear that the interests of
the public generally, as distinguished from those of a particular class, require an interference
with private rights and the means must be reasonably necessary for the accomplishment of
the purpose and not unduly oppressive of private rights. 71 It must also be evident that no other
alternative for the accomplishment of the purpose less intrusive of private rights can work.
More importantly, a reasonable relation must exist between the purposes of the measure and
the means employed for its accomplishment, for even under the guise of protecting the public
interest, personal rights and those pertaining to private property will not be permitted to be
arbitrarily invaded.72
Lacking a concurrence of these requisites, the police measure shall be struck down as an
arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power is
subject to judicial review when life, liberty or property is affected. 73 However, this is not in any
way meant to take it away from the vastness of State police power whose exercise enjoys the
presumption of validity.74
Similar to the Comelec resolution requiring newspapers to donate advertising space to
candidates, this Ordinance is a blunt and heavy instrument. 75 The Ordinance makes no
distinction between places frequented by patrons engaged in illicit activities and patrons
engaged in legitimate actions. Thus it prevents legitimate use of places where illicit activities
are rare or even unheard of. A plain reading of section 3 of the Ordinance shows it makes no
classification of places of lodging, thus deems them all susceptible to illicit patronage and
subject them without exception to the unjustified prohibition.
The Court has professed its deep sentiment and tenderness of the Ermita-Malate area, its
longtime home,76 and it is skeptical of those who wish to depict our capital city the Pearl of
the Orient as a modern-day Sodom or Gomorrah for the Third World set. Those still steeped
in Nick Joaquin-dreams of the grandeur of Old Manila will have to accept that Manila like all
evolving big cities, will have its problems. Urban decay is a fact of mega cities such as Manila,
and vice is a common problem confronted by the modern metropolis wherever in the world.

The solution to such perceived decay is not to prevent legitimate businesses from offering a
legitimate product. Rather, cities revive themselves by offering incentives for new businesses
to sprout up thus attracting the dynamism of individuals that would bring a new grandeur to
Manila.
The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in
fact be diminished simply by applying existing laws. Less intrusive measures such as curbing
the proliferation of prostitutes and drug dealers through active police work would be more
effective in easing the situation. So would the strict enforcement of existing laws and
regulations penalizing prostitution and drug use. These measures would have minimal
intrusion on the businesses of the petitioners and other legitimate merchants. Further, it is
apparent that the Ordinance can easily be circumvented by merely paying the whole day rate
without any hindrance to those engaged in illicit activities. Moreover, drug dealers and
prostitutes can in fact collect "wash rates" from their clientele by charging their customers a
portion of the rent for motel rooms and even apartments.
IV.
We reiterate that individual rights may be adversely affected only to the extent that may fairly
be required by the legitimate demands of public interest or public welfare. The State is a
leviathan that must be restrained from needlessly intruding into the lives of its citizens.
However well-intentioned the Ordinance may be, it is in effect an arbitrary and whimsical
intrusion into the rights of the establishments as well as their patrons. The Ordinance
needlessly restrains the operation of the businesses of the petitioners as well as restricting the
rights of their patrons without sufficient justification. The Ordinance rashly equates wash rates
and renting out a room more than twice a day with immorality without accommodating
innocuous intentions.
The promotion of public welfare and a sense of morality among citizens deserves the full
endorsement of the judiciary provided that such measures do not trample rights this Court is
sworn to protect.77 The notion that the promotion of public morality is a function of the State is
as old as Aristotle.78 The advancement of moral relativism as a school of philosophy does not
de-legitimize the role of morality in law, even if it may foster wider debate on which particular
behavior to penalize. It is conceivable that a society with relatively little shared morality among
its citizens could be functional so long as the pursuit of sharply variant moral perspectives
yields an adequate accommodation of different interests. 79
To be candid about it, the oft-quoted American maxim that "you cannot legislate morality" is
ultimately illegitimate as a matter of law, since as explained by Calabresi, that phrase is more
accurately interpreted as meaning that efforts to legislate morality will fail if they are widely at
variance with public attitudes about right and wrong. 80 Our penal laws, for one, are founded on
age-old moral traditions, and as long as there are widely accepted distinctions between right
and wrong, they will remain so oriented.
Yet the continuing progression of the human story has seen not only the acceptance of the
right-wrong distinction, but also the advent of fundamental liberties as the key to the
enjoyment of life to the fullest. Our democracy is distinguished from non-free societies not with
any more extensive elaboration on our part of what is moral and immoral, but from our
recognition that the individual liberty to make the choices in our lives is innate, and protected
by the State. Independent and fair-minded judges themselves are under a moral duty to
uphold the Constitution as the embodiment of the rule of law, by reason of their expression of

consent to do so when they take the oath of office, and because they are entrusted by the
people to uphold the law.81
Even as the implementation of moral norms remains an indispensable complement to
governance, that prerogative is hardly absolute, especially in the face of the norms of due
process of liberty. And while the tension may often be left to the courts to relieve, it is possible
for the government to avoid the constitutional conflict by employing more judicious, less
drastic means to promote morality.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is
REVERSED, and the Decision of the Regional Trial Court of Manila, Branch 9, is
REINSTATED. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL. No
pronouncement as to costs.

LRTS Phase I means the rail transport system comprising about 16.9 line
kilometers extending from Taft Avenue, Pasay City, to North Avenue, Quezon City,
occupying a strip in the center of EDSA approximately 10.5 meters wide
(approximately 12 meters wide at or around the Boni Avenue, Santolan and Buendia
Stations), plus about 0.1 to 0.2 line kilometers extending from the North Avenue
Station to the Depot, together with the Stations, 73 Light Rail Vehicles and all
ancillary plant, equipment and facilities, as more particularly detailed in the
Specifications.
16.2. Assignment of Rights. During the Development Rights Period, Metro
Rail shall be entitled to assign all or any of its rights, titles and interests in the
Development Rights to bona fide real estate developers. In this connection, Metro
Rail may enter into such development, lease, sub-lease or other agreements or
contracts relating to the Depot and the air space above the Stations (the space not
needed for all or any portion of the operation of the LRTS) for all or any portion of
the Development Rights Period.

MMDA V. TRACKWORKS
RESOLUTION
BERSAMIN, J.:
This case concerns whether the Metropolitan Manila Development Authority
(MMDA) could unilaterally dismantle the billboards, signages and other advertizing media in
the structures of the Metro Rail Transit 3 (MRT3) installed by respondent advertising company
by virtue of its existing contract with the owner of the MRT3.

In 1998, respondent Trackworks Rail Transit Advertising, Vending & Promotions, Inc.
(Trackworks) entered into a contract for advertising services with MRTC. Trackworks
thereafter installed commercial billboards, signages and other advertizing media in the
different parts of the MRT3. In 2001, however, MMDA requested Trackworks to dismantle the
billboards, signages and other advertizing media pursuant to MMDA Regulation No. 96-009,
whereby MMDA prohibited the posting, installation and display of any kind or form of
billboards, signs, posters, streamers, in any part of the road, sidewalk, center island, posts,
trees, parks and open space. After Trackworks refused the request of MMDA, MMDA
proceeded to dismantle the formers billboards and similar forms of advertisement.

The trial and appellate courts ruled that MMDA did not have the authority to
dismantle. MMDA is now before the Court to assail such adverse ruling.
Antecedents
In 1997, the Government, through the Department of Transportation and
Communications, entered into a build-lease-transfer agreement (BLT agreement) with Metro
Rail Transit Corporation, Limited (MRTC) pursuant to Republic Act No. 6957 (Build, Operate
and Transfer Law), under which MRTC undertook to build MRT3 subject to the condition that
MRTC would own MRT3 for 25 years, upon the expiration of which the ownership would
transfer to the Government.

On March 1, 2002, Trackworks filed against MMDA in the Regional Trial Court
(RTC) in Pasig City an injunction suit (with prayer for the issuance of a temporary restraining
order [TRO] and preliminary injunction), docketed as Civil Case No. 68864.
On March 6, 2002, the RTC (Branch 155) issued a TRO, enjoining MMDA from
dismantling or destroying Trackworks billboards, signages and other advertizing media. On
March 25, 2002, the RTC issued a writ of preliminary injunction for the same purpose.

The BLT agreement stipulated, among others, that MRTC could build and develop
commercial premises in the MRT3 structures, or obtain advertising income therefrom, viz:

Without filing a motion for reconsideration to challenge the RTCs issuances, MMDA
brought a petition for certiorari and prohibition before the Court of Appeals (CA), docketed as
C.A.-G.R. SP No. 70932, but the CA denied the petition and affirmed the RTC on August 31,
2004. The CA ultimately denied MMDAs motion for reconsideration through its resolution
issued on March 14, 2005.

16.1. Details of Development Rights. DOTC hereby confirms and awards

to Metro Rail the rights to (a) develop commercial premises in the Depot and the air
space above the Stations, which shall be allowed to such height as is legally and
technically feasible, (b) lease or sub-lease interests or assign such interests in the
Depot and such air space and (c) obtain any advertising income from the Depot and
such air space and LRTS Phase I.

Thence, MMDA appealed to this Court (G.R. No. 167514), which denied MMDAs
petition for review on October 25, 2005.1[1]

h. ) It is unlawful for any person/s, private or public corporations, advertising

and promotions companies, movie producers, professionals and service contractors
to post, install, display any kind or form of billboards, signs, posters, streamers,
professional service advertisements and other visual clutters in any part of the road,
sidewalk, center island, posts, trees parks and open space.

Ruling of the RTC

In the meanwhile, on October 10, 2005, the RTC (Branch 155) rendered its decision
permanently enjoining MMDA from dismantling, removing or destroying the billboards,
signages and other advertizing media installed by Trackworks on the interior and exterior
structures of the MRT3.2[2]

MMDA avers that the conversion of the center island of Epifanio Delos Santos
Avenue (EDSA) into the carriageway of the MRT3 line did not exempt the EDSA center island
from the coverage of the MMDA regulation;7[7] that the Governments grant of development
rights to MRTC was not an abdication of its right to regulate, and, therefore, the development
of the MRT3 remained subject to all existing and applicable national and local laws,
ordinances, rules and regulations;8[8] that MMDA was merely implementing existing and
applicable laws;9[9] that Trackworks advertising materials were placed indiscriminately and
without due regard to safety, and as such might be classified as obstructions and distractions
to the motorists traversing EDSA;10[10] and that the interests of a few should not prevail over
the good of the greater number in the community whose safety and general welfare MMDA
was mandated to protect.11[11]

Ruling of the CA
MMDA appealed the RTCs decision to the CA.
On April 30, 2007, the CA denied the MMDAs appeal, 3[3] holding that Trackworks
right to install billboards, signages and other advertizing media on the interior and exterior
structures of the MRT3 must be protected by a writ of permanent injunction; and that MMDA
had no power to dismantle, remove or destroy Trackworks billboards, signages and other
advertizing media.4[4]

Trackworks maintains, on the other hand, that MMDAs petition was defective for its
failure to raise any genuine question of law; and that the CAs decision dated April 30, 2007
was valid and correct.12[12]

MMDA moved for reconsideration, but the CA resolution denied the motion for
reconsideration on September 3, 2007.5[5]
Hence, this appeal by petition for review.

Ruling of the Court

Issues

The petition has no merit.

MMDA claims that its mandate under its charter 6[6] of formulating, coordinating and
monitoring of policies, standards, progress and projects for the use of thoroughfares and the
promotion of safe and convenient movement of persons and goods prompted its issuance of
MMDA Regulation No. 96-009, which reads in part:

That Trackworks derived its right to install its billboards, signages and other
advertizing media in the MRT3 from MRTCs authority under the BLT agreement to develop
commercial premises in the MRT3 structure or to obtain advertising income therefrom is no
longer debatable. Under the BLT agreement, indeed, MRTC owned the MRT3 for 25 years,
upon the expiration of which MRTC would transfer ownership of the MRT3 to the Government.

10

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12
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Considering that MRTC remained to be the owner of the MRT3 during the time
material to this case, and until this date, MRTCs entering into the contract for advertising
services with Trackworks was a valid exercise of ownership by the former. In fact, in
Metropolitan Manila Development Authority v. Trackworks Rail Transit Advertising, Vending &
Promotions, Inc.,13[13] this Court expressly recognized Trackworks right to install the
billboards, signages and other advertising media pursuant to said contract. The latters right
should, therefore, be respected.

The Court also agrees with the CAs ruling that MMDA Regulation No. 96-009 and
MMC Memorandum Circular No. 88-09 did not apply to Trackworks billboards, signages and
other advertising media. The prohibition against posting, installation and display of billboards,
signages and other advertising media applied only to public areas, but MRT3, being private
property pursuant to the BLT agreement between the Government and MRTC, was not one of
the areas as to which the prohibition applied. Moreover, MMC Memorandum Circular No. 8809 did not apply to Trackworks billboards, signages and other advertising media in MRT3,
because it did not specifically cover MRT3, and because it was issued a year prior to the
construction of MRT3 on the center island of EDSA. Clearly, MMC Memorandum Circular No.
88-09 could not have included MRT3 in its prohibition.

It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of
Trackworks billboards, signages and other advertising media. MMDA simply had no power on
its own to dismantle, remove, or destroy the billboards, signages and other advertising media
installed on the MRT3 structure by Trackworks. In Metropolitan Manila Development Authority
v. Bel-Air Village Association, Inc.,14[14] Metropolitan Manila Development Authority v. Viron
Transportation Co., Inc.,15[15] and Metropolitan Manila Development Authority v. Garin,16[16]
the Court had the occasion to rule that MMDAs powers were limited to the formulation,
coordination, regulation, implementation, preparation, management, monitoring, setting of
policies, installing a system, and administration. Nothing in Republic Act No. 7924 granted
MMDA police power, let alone legislative power. 17[17]

MMDAs insistence that it was only implementing Presidential Decree No. 1096
(Building Code) and its implementing rules and regulations is not persuasive. The power to
enforce the provisions of the Building Code was lodged in the Department of Public Works
and Highways (DPWH), not in MMDA, considering the laws following provision, thus:
Sec. 201. Responsibility for Administration and Enforcement.
The administration and enforcement of the provisions of this Code including the
imposition of penalties for administrative violations thereof is hereby vested in the
Secretary of Public Works, Transportation and Communications, hereinafter referred
to as the Secretary.

Clarifying the real nature of MMDA, the Court held:

xxx The MMDA is, as termed in the charter itself, a development authority. It is an
agency created for the purpose of laying down policies and coordinating with the
various national government agencies, peoples organizations, non-governmental
organizations and the private sector for the efficient and expeditious delivery of
basic services in the vast metropolitan area. All its functions are administrative in
nature and these are actually summed up in the charter itself, viz:

There is also no evidence showing that MMDA had been delegated by DPWH to
implement the Building Code.
WHEREFORE, we deny the petition for review, and affirm the decision dated April
30, 2007 and the resolution dated September 3, 2007.

Sec.2. Creation of the Metropolitan Manila Development Authority.- xxx.

The MMDA shall perform planning, monitoring and coordinative functions, and
in the process exercise regulatory and supervisory authority over the delivery of
metro-wide services within Metro Manila, without diminution of the autonomy of
local government units concerning purely local matters. 18[18]

16

Costs against the petitioner.

ACEBEDO OPTICAL COMPANY, INC., petitioner, vs. THE HONORABLE COURT OF
APPEALS, Hon. MAMINDIARA MANGOTARA, in his capacity as Presiding Judge of the
RTC, 12th Judicial Region, Br. 1, Iligan City; SAMAHANG OPTOMETRIST Sa PILIPINAS Iligan City Chapter, LEO T. CAHANAP, City Legal Officer, and Hon. CAMILO P. CABILI,
City Mayor of Iligan, respondents.
DECISION
PURISIMA, J.:
At bar is a petition for review under Rule 45 of the Rules of Court seeking to nullify the
dismissal by the Court of Appeals of the original petition for certiorari, prohibition and
mandamus filed by the herein petitioner against the City Mayor and City Legal Officer of Iligan
and the Samahang Optometrist sa Pilipinas - Iligan Chapter (SOPI, for brevity).
The antecedent facts leading to the filing of the instant petition are as follows:

17

18

13
14
15

Petitioner applied with the Office of the City Mayor of Iligan for a business permit. After
consideration of petitioners application and the opposition interposed thereto by local
optometrists, respondent City Mayor issued Business Permit No. 5342 subject to the following
conditions:
1. Since it is a corporation, Acebedo cannot put up an optical clinic but only a commercial
store;
2. Acebedo cannot examine and/or prescribe reading and similar optical glasses for patients,
because these are functions of optical clinics;
3. Acebedo cannot sell reading and similar eyeglasses without a prescription having first been
made by an independent optometrist (not its employee) or independent optical clinic. Acebedo
can only sell directly to the public, without need of a prescription, Ray-Ban and similar
eyeglasses;
4. Acebedo cannot advertise optical lenses and eyeglasses, but can advertise Ray-Ban and
similar glasses and frames;
5. Acebedo is allowed to grind lenses but only upon the prescription of an independent
optometrist.19[1]
On December 5, 1988, private respondent Samahan ng Optometrist Sa Pilipinas (SOPI),
Iligan Chapter, through its Acting President, Dr. Frances B. Apostol, lodged a complaint
against the petitioner before the Office of the City Mayor, alleging that Acebedo had violated
the conditions set forth in its business permit and requesting the cancellation and/or
revocation of such permit.
Acting on such complaint, then City Mayor Camilo P. Cabili designated City Legal Officer Leo
T. Cahanap to conduct an investigation on the matter. On July 12, 1989, respondent City
Legal Officer submitted a report to the City Mayor finding the herein petitioner guilty of
violating all the conditions of its business permit and recommending the disqualification of
petitioner from operating its business in Iligan City. The report further advised that no new
permit shall be granted to petitioner for the year 1989 and should only be given time to wind
up its affairs.
On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of
Business Permit effective as of said date and giving petitioner three (3) months to wind up its
affairs.
On October 17, 1989, petitioner brought a petition for certiorari, prohibition and mandamus
with prayer for restraining order/preliminary injunction against the respondents, City Mayor,
City Legal Officer and Samahan ng Optometrists sa Pilipinas-Iligan City Chapter (SOPI),
docketed as Civil Case No. 1497 before the Regional Trial Court of Iligan City, Branch I.
Petitioner alleged that (1) it was denied due process because it was not given an opportunity
to present its evidence during the investigation conducted by the City Legal Officer; (2) it was
denied equal protection of the laws as the limitations imposed on its business permit were not
imposed on similar businesses in Iligan City; (3) the City Mayor had no authority to impose the
special conditions on its business permit; and (4) the City Legal Officer had no authority to
conduct the investigation as the matter falls within the exclusive jurisdiction of the Professional
Regulation Commission and the Board of Optometry.

Respondent SOPI interposed a Motion to Dismiss the Petition on the ground of nonexhaustion of administrative remedies but on November 24, 1989, Presiding Judge
Mamindiara P. Mangotara deferred resolution of such Motion to Dismiss until after trial of the
case on the merits. However, the prayer for a writ of preliminary injunction was granted.
Thereafter, respondent SOPI filed its answer.
On May 30, 1990, the trial court dismissed the petition for failure to exhaust administrative
remedies, and dissolved the writ of preliminary injunction it earlier issued. Petitioners motion
for reconsideration met the same fate. It was denied by an Order dated June 28, 1990.
On October 3, 1990, instead of taking an appeal, petitioner filed a petition for certiorari,
prohibition and mandamus with the Court of Appeals seeking to set aside the questioned
Order of Dismissal, branding the same as tainted with grave abuse of discretion on the part of
the trial court.
On January 24, 1991, the Ninth Division20[2] of the Court of Appeals dismissed the petition for
lack of merit. Petitioners motion reconsideration was also denied in the Resolution dated May
15, 1991.
Undaunted, petitioner has come before this court via the present petition, theorizing that:
A.
THE RESPONDENT COURT, WHILE CORRECTLY HOLDING THAT THE RESPONDENT
CITY MAYOR ACTED BEYOND HIS AUTHORITY IN IMPOSING THE SPECIAL
CONDITIONS IN THE PERMIT AS THEY HAD NO BASIS IN ANY LAW OR ORDINANCE,
ERRED IN HOLDING THAT THE SAID SPECIAL CONDITIONS NEVERTHELESS BECAME
BINDING ON PETITIONER UPON ITS ACCEPTANCE THEREOF AS A PRIVATE
AGREEMENT OR CONTRACT.
B.
THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE CONTRACT
BETWEEN PETITIONER AND THE CITY OF ILIGAN WAS ENTERED INTO BY THE LATTER
IN THE PERFORMANCE OF ITS PROPRIETARY FUNCTIONS.
The petition is impressed with merit.
Although petitioner agrees with the finding of the Court of Appeals that respondent City Mayor
acted beyond the scope of his authority in imposing the assailed conditions in subject
business permit, it has excepted to the ruling of the Court of Appeals that the said conditions
nonetheless became binding on petitioner, once accepted, as a private agreement or contract.
Petitioner maintains that the said special conditions are null and void for being ultra vires and
cannot be given effect; and therefore, the principle of estoppel cannot apply against it.
On the other hand, the public respondents, City Mayor and City Legal Officer, private
respondent SOPI and the Office of the Solicitor General contend that as a valid exercise of
police power, respondent City Mayor has the authority to impose, as he did, special conditions
in the grant of business permits.
Police power as an inherent attribute of sovereignty is the power to prescribe regulations to
promote the health, morals, peace, education, good order or safety and general welfare of the
people.21[3] The State, through the legislature, has delegated the exercise of police power to

20
19

21
9

local government units, as agencies of the State, in order to effectively accomplish and carry
out the declared objects of their creation.22[4] This delegation of police power is embodied in
the general welfare clause of the Local Government Code which provides:
Sec. 16. General Welfare. - Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or
incidental for its efficient and effective governance, and those which are essential to the
promotion of the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant
scientific and technological capabilities, improve public morals, enhance economic prosperity
and social justice, promote full employment among their residents, maintain peace and order,
and preserve the comfort and convenience of their inhabitants.
The scope of police power has been held to be so comprehensive as to encompass almost all
matters affecting the health, safety, peace, order, morals, comfort and convenience of the
community. Police power is essentially regulatory in nature and the power to issue licenses or
grant business permits, if exercised for a regulatory and not revenue-raising purpose, is within
the ambit of this power.23[5]
The authority of city mayors to issue or grant licenses and business permits is beyond cavil. It
is provided for by law.
Section 171, paragraph 2 (n) of Batas Pambansa Bilang 337 otherwise known as the Local
Government Code of 1983, reads:
Sec. 171. The City Mayor shall:
xxx
n) Grant or refuse to grant, pursuant to law, city licenses or permits, and revoke the same for
violation of law or ordinance or the conditions upon which they are granted.
However, the power to grant or issue licenses or business permits must always be exercised
in accordance with law, with utmost observance of the rights of all concerned to due process
and equal protection of the law.
Succinct and in point is the ruling of this Court, that:
"x x x While a business may be regulated, such regulation must, however, be within the
bounds of reason, i. e., the regulatory ordinance must be reasonable, and its provision cannot
be oppressive amounting to an arbitrary interference with the business or calling subject of
regulation. A lawful business or calling may not, under the guise of regulation, be
unreasonably interfered with even by the exercise of police power. xxx
xxx xxx xxx
xxx The exercise of police power by the local government is valid unless it contravenes the
fundamental law of the land or an act of the legislature, or unless it is against public policy or
is unreasonable, oppressive, partial, discriminating or in derogation of a common right." 24[6]

In the case under consideration, the business permit granted by respondent City Mayor to
petitioner was burdened with several conditions. Petitioner agrees with the holding by the
Court of Appeals that respondent City Mayor acted beyond his authority in imposing such
special conditions in its permit as the same have no basis in the law or ordinance. Public
respondents and private respondent SOPI, on the other hand, are one in saying that the
imposition of said special conditions on petitioners business permit is well within the authority
of the City Mayor as a valid exercise of police power.
As aptly discussed by the Solicitor General in his Comment, the power to issue licenses and
permits necessarily includes the corollary power to revoke, withdraw or cancel the same. And
the power to revoke or cancel, likewise includes the power to restrict through the imposition of
certain conditions. In the case of Austin-Hardware, Inc. vs. Court of Appeals, 25[7] it was held
that the power to license carries with it the authority to provide reasonable terms and
conditions under which the licensed business shall be conducted. As the Solicitor General
puts it:
"If the City Mayor is empowered to grant or refuse to grant a license, which is a broader
power, it stands to reason that he can also exercise a lesser power that is reasonably
incidental to his express power, i. e. to restrict a license through the imposition of certain
conditions, especially so that there is no positive prohibition to the exercise of such
prerogative by the City Mayor, nor is there any particular official or body vested with such
authority"26[8]
However, the present inquiry does not stop there, as the Solicitor General believes. The power
or authority of the City Mayor to impose conditions or restrictions in the business permit is
indisputable. What petitioner assails are the conditions imposed in its particular case which, it
complains, amount to a confiscation of the business in which petitioner is engaged.
Distinction must be made between the grant of a license or permit to do business and the
issuance of a license to engage in the practice of a particular profession. The first is usually
granted by the local authorities and the second is issued by the Board or Commission tasked
to regulate the particular profession. A business permit authorizes the person, natural or
otherwise, to engage in business or some form of commercial activity. A professional license,
on the other hand, is the grant of authority to a natural person to engage in the practice or
exercise of his or her profession.
In the case at bar, what is sought by petitioner from respondent City Mayor is a permit to
engage in the business of running an optical shop. It does not purport to seek a license to
engage in the practice of optometry as a corporate body or entity, although it does have in its
employ, persons who are duly licensed to practice optometry by the Board of Examiners in
Optometry.
The case of Samahan ng Optometrists sa Pilipinas vs. Acebedo International Corporation,
G.R. No. 117097,27[9] promulgated by this Court on March 21, 1997, is in point. The factual
antecedents of that case are similar to those of the case under consideration and the issue

22

25

23

26

24

27
10

ultimately resolved therein is exactly the same issue posed for resolution by this Court en
banc.
In the said case, the Acebedo International Corporation filed with the Office of the Municipal
Mayor an application for a business permit for the operation of a branch of Acebedo Optical in
Candon, Ilocos Sur. The application was opposed by the Samahan ng Optometrists sa
Pilipinas-Ilocos Sur Chapter, theorizing that Acebedo is a juridical entity not qualified to
practice optometry. A committee was created by the Office of the Mayor to study private
respondents application. Upon recommendation of the said committee, Acebedos application
for a business permit was denied. Acebedo filed a petition with the Regional Trial Court but the
same was dismissed. On appeal, however, the Court of Appeals reversed the trial courts
disposition, prompting the Samahan ng Optometrists to elevate the matter to this Court.
The First Division of this Court, then composed of Honorable Justice Teodoro Padilla, Josue
Bellosillo, Jose Vitug and Santiago Kapunan, with Honorable Justice Regino Hermosisima, Jr.
as ponente, denied the petition and ruled in favor of respondent Acebedo International
Corporation, holding that "the fact that private respondent hires optometrists who practice their
profession in the course of their employment in private respondents optical shops, does not
translate into a practice of optometry by private respondent itself." 28[10] The Court further
elucidated that in both the old and new Optometry Law, R.A. No. 1998, superseded by R.A.
No. 8050, it is significant to note that there is no prohibition against the hiring by corporations
of optometrists. The Court concluded thus:
"All told, there is no law that prohibits the hiring by corporations of optometrists or considers
the hiring by corporations of optometrists as a practice by the corporation itself of the
profession of optometry."
In the present case, the objective of the imposition of subject conditions on petitioners
business permit could be attained by requiring the optometrists in petitioners employ to
produce a valid certificate of registration as optometrist, from the Board of Examiners in
Optometry. A business permit is issued primarily to regulate the conduct of business and the
City Mayor cannot, through the issuance of such permit, regulate the practice of a profession,
like that of optometry. Such a function is within the exclusive domain of the administrative
agency specifically empowered by law to supervise the profession, in this case the
Professional Regulations Commission and the Board of Examiners in Optometry.
It is significant to note that during the deliberations of the bicameral conference committee of
the Senate and the House of Representatives on R.A. 8050 (Senate Bill No. 1998 and House
Bill No. 14100), the committee failed to reach a consensus as to the prohibition on indirect
practice of optometry by corporations. The proponent of the bill, former Senator Freddie
Webb, admitted thus:
"Senator Webb: xxx xxx xxx
The focus of contention remains to be the proposal of prohibiting the indirect practice of
optometry by corporations. We took a second look and even a third look at the issue in the
bicameral conference, but a compromise remained elusive."29[11]
Former Senator Leticia Ramos-Shahani likewise voted her reservation in casting her vote:

"Senator Shahani: Mr. President

The optometry bills have evoked controversial views from the members of the panel. While we
realize the need to uplift the standards of optometry as a profession, the consensus of both
Houses was to avoid touching sensitive issues which properly belong to judicial determination.
Thus, the bicameral conference committee decided to leave the issue of indirect practice of
optometry and the use of trade names open to the wisdom of the Courts which are vested with
the prerogative of interpreting the laws."30[12]
From the foregoing, it is thus evident that Congress has not adopted a unanimous position on
the matter of prohibition of indirect practice of optometry by corporations, specifically on the
hiring and employment of licensed optometrists by optical corporations. It is clear that
Congress left the resolution of such issue for judicial determination, and it is therefore proper
for this Court to resolve the issue.
Even in the United States, jurisprudence varies and there is a conflict of opinions among the
federal courts as to the right of a corporation or individual not himself licensed, to hire and
employ licensed optometrists.31[13]
Courts have distinguished between optometry as a learned profession in the category of law
and medicine, and optometry as a mechanical art. And, insofar as the courts regard optometry
as merely a mechanical art, they have tended to find nothing objectionable in the making and
selling of eyeglasses, spectacles and lenses by corporations so long as the patient is actually
examined and prescribed for by a qualified practitioner. 32[14]
The primary purpose of the statute regulating the practice of optometry is to insure that
optometrical services are to be rendered by competent and licensed persons in order to
protect the health and physical welfare of the people from the dangers engendered by
unlicensed practice. Such purpose may be fully accomplished although the person rendering
the service is employed by a corporation.33[15]
Furthermore, it was ruled that the employment of a qualified optometrist by a corporation is
not against public policy.34[16] Unless prohibited by statutes, a corporation has all the
contractual rights that an individual has35[17] and it does not become the practice of medicine
or optometry because of the presence of a physician or optometrist. 36[18] The manufacturing,

28

35

29

36

30
31
32
33
34

11

selling, trading and bartering of eyeglasses and spectacles as articles of merchandise do not
constitute the practice of optometry. 37[19]
In the case of Dvorine vs. Castelberg Jewelry Corporation,38[20] defendant corporation
conducted as part of its business, a department for the sale of eyeglasses and the furnishing
of optometrical services to its clients. It employed a registered optometrist who was
compensated at a regular salary and commission and who was furnished instruments and
appliances needed for the work, as well as an office. In holding that the corporation was not
engaged in the practice of optometry, the court ruled that there is no public policy forbidding
the commercialization of optometry, as in law and medicine, and recognized the general
practice of making it a commercial business by advertising and selling eyeglasses.
To accomplish the objective of the regulation, a state may provide by statute that corporations
cannot sell eyeglasses, spectacles, and lenses unless a duly licensed physician or a duly
qualified optometrist is in charge of, and in personal attendance at the place where such
articles are sold.39[21] In such a case, the patients primary and essential safeguard lies in the
optometrists control of the "treatment" by means of prescription and preliminary and final
examination.40[22]
In analogy, it is noteworthy that private hospitals are maintained by corporations incorporated
for the purpose of furnishing medical and surgical treatment. In the course of providing such
treatments, these corporations employ physicians, surgeons and medical practitioners, in the
same way that in the course of manufacturing and selling eyeglasses, eye frames and optical
lenses, optical shops hire licensed optometrists to examine, prescribe and dispense
ophthalmic lenses. No one has ever charged that these corporations are engaged in the
practice of medicine. There is indeed no valid basis for treating corporations engaged in the
business of running optical shops differently.
It also bears stressing, as petitioner has pointed out, that the public and private respondents
did not appeal from the ruling of the Court of Appeals. Consequently, the holding by the Court
of Appeals that the act of respondent City Mayor in imposing the questioned special conditions
on petitioners business permit is ultra vires cannot be put into issue here by the respondents.
It is well-settled that:
"A party who has not appealed from the decision may not obtain any affirmative relief from the
appellate court other than what he had obtain from the lower court, if any, whose decision is
brought up on appeal.41[23]

39

xxx an appellee who is not an appellant may assign errors in his brief where his purpose is to
maintain the judgment on other grounds, but he cannot seek modification or reversal of the
judgment or affirmative relief unless he has also appealed." 42[24]
Thus, respondents submission that the imposition of subject special conditions on petitioners
business permit is not ultra vires cannot prevail over the finding and ruling by the Court of
Appeals from which they (respondents) did not appeal.
Anent the second assigned error, petitioner maintains that its business permit issued by the
City Mayor is not a contract entered into by Iligan City in the exercise of its proprietary
functions, such that although petitioner agreed to such conditions, it cannot be held in
estoppel since ultra vires acts cannot be given effect.
Respondents, on the other hand, agree with the ruling of the Court of Appeals that the
business permit in question is in the nature of a contract between Iligan City and the herein
petitioner, the terms and conditions of which are binding upon agreement, and that petitioner
is estopped from questioning the same. Moreover, in the Resolution denying petitioners
motion for reconsideration, the Court of Appeals held that the contract between the petitioner
and the City of Iligan was entered into by the latter in the performance of its proprietary
functions.
This Court holds otherwise. It had occasion to rule that a license or permit is not in the nature
of a contract but a special privilege.
"xxx a license or a permit is not a contract between the sovereignty and the licensee or
permitee, and is not a property in the constitutional sense, as to which the constitutional
proscription against impairment of the obligation of contracts may extend. A license is rather in
the nature of a special privilege, of a permission or authority to do what is within its terms. It is
not in any way vested, permanent or absolute."43[25]
It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner
acquiesced in the special conditions imposed by the City Mayor in subject business permit
does not preclude it from challenging the said imposition, which is ultra vires or beyond the
ambit of authority of respondent City Mayor. Ultra vires acts or acts which are clearly beyond
the scope of ones authority are null and void and cannot be given any effect. The doctrine of
estoppel cannot operate to give effect to an act which is otherwise null and void or ultra vires.
The Court of Appeals erred in adjudging subject business permit as having been issued by
respondent City Mayor in the performance of proprietary functions of Iligan City. As
hereinabove elaborated upon, the issuance of business licenses and permits by a municipality
or city is essentially regulatory in nature. The authority, which devolved upon local government
units to issue or grant such licenses or permits, is essentially in the exercise of the police
power of the State within the contemplation of the general welfare clause of the Local
Government Code.
WHEREFORE, the petition is GRANTED; the Decision of the Court of Appeals in CA-GR SP
No. 22995 REVERSED; and the respondent City Mayor is hereby ordered to reissue
petitioners business permit in accordance with law and with this disposition. No
pronouncement as to costs.

40

42

41

43

37
38

12

SO ORDERED.
HILIPPINE 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

(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 are directed 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.

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
candidates during 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.

13

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 non-compliance 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 letterdirectives 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. 3 Similarly, 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

14

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 of
Section 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 or television 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.

15

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.

In a cabinet meeting held on 1 November 1972, then President Ferdinand E. Marcos

approved the Presidential Commuter Service Project, more commonly known as the Carmona
Project of the President. Per Resolution No. 751 dated 2 November 1972 of the PNR Board of
Directors, its General Manager was authorized to implement the project. The San PedroCarmona Commuter Line Project was implemented with the installation of railroad facilities
and appurtenances.
During the construction of said commuter line, several properties owned by private
individuals/corporations were traversed as right-of-way. Among the properties through which
the commuter line passed was a 100,128 square-meter portion owned by Forfom covered by
TCT Nos. T-34384, T-34386 and T-34387.
On 24 August 1990, Forfom filed before the Regional Trial Court (RTC) of Binan, Laguna a
complaint2 for Recovery of Posssession of Real Property and/or Damages. It alleged that
PNR, with the aid of military men, and without its consent and against its will, occupied
100,128 square meters of its property located in San Pedro, Laguna and installed thereon
railroad and railway facilities and appurtenances. It further alleged that PNR rented out
portions of the property to squatters along the railroad tracks. Despite repeated verbal and
written demands for the return of the property or for the payment of its price, PNR failed to
comply. It prayed that PNR be ordered to vacate the property and to cause the eviction of all
shanties and squatters that PNR had taken in as lessees, and that it be restored to the
peaceful occupation and enjoyment thereof. It likewise asked that Forfom be ordered to pay
(a) P1,000.00 per month per hectare from occupation of the property until the same is vacated
as rentals plus interest at 24% per annum; (b) P1,600,000.00 as unrealized income from
occupation of the property up to the present plus 12% interest per annum until fully paid; (c)
P150,000.00 for actual damages on account of the destruction of crops and improvements on
the property when the occupation of the property commenced plus 12% interest per annum
until fully paid; (d) at least P100,000.00 as exemplary damages; (e) P100,000.00 plus 15% of
the amount and properties to be recovered as attorney's fees; and (f) costs of the suit. 3
In its Amended Answer,4 PNR alleged that, per authority granted by law (Presidential Decree
No. 741), it acquired parcels of land used in the construction of the railway track to Carmona,
Cavite. It, however, denied that the property acquired from Forfom was leased to tenants. It
likewise denied that the acquisition of Forfom's property was made without the consent of Dr.
Felix Limcaoco, the former owner of the property. It stressed that the acquisition of the
properties used in the project was done through negotiations with the respective owners. It
asserted that no crop was damaged when it acquired the property subject of the case. Further,
it denied liability for unrealized income, exemplary damages and attorney's fees.
PNR explained that former President Ferdinand E. Marcos approved what was known to be
the Carmona Project -- a 5.1 kilometer railroad extension line from San Pedro, Laguna to San
Jose, Carmona, Cavite to serve the squatters' resettlement area in said localities. It claimed
that it negotiated with the respective owners of the affected properties and that they were paid
just compensation. Dr. Felix Limcaoco, it said, was not paid because he failed to present the
corresponding titles to his properties. It claimed that the right to and just compensation for the
subject property was the declared fair market value at the time of the taking which was P0.60
per square meter. It disclosed that in a meeting with the representatives of Dr. Limcaoco, the
price agreed upon was P1.25 per square meter, the amount the adjoining owners was paid. It

FORFOM DEVELOPMENT CORPORATION, petitioner,

vs.
PHILIPPINE NATIONAL RAILWAYS, respondent.
DECISION
CHICO-NAZARIO, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court which
seeks to set aside the Decision1 of the Court of Appeals dated 24 April 1996.
Petitioner Forfom Development Corporation (Forfom) is a domestic corporation duly organized
and existing under the laws of the Philippines with principal office at Cabuyao, Laguna, while
respondent Philippine National Railways (PNR) is a government corporation engaged in
proprietary functions with principal office at the PNR Railway Station, C.M. Recto Avenue,
Tutuban, Binondo, Manila.
The facts, stripped of the non-essentials, are as follows:
Forfom is the registered owner of several parcels of land in San Vicente, San Pedro, Laguna
under Transfer Certificates of Title (TCT) Nos. T-34384, T-34386 and 34387, all of the Registry
of Deeds of Laguna. Said parcels of land were originally registered in the name of Felix
Limcaoco, predecessor-in-interest of Forfom, under Original Certificates of Title (OCT) Nos.
(0-326) 0-384 and (0-328) 0-386.

16

prayed that the instant complaint be dismissed, and that the owner of the properties involved
be compelled to accept the amount of P1.25 per square meter as price for the properties.
In an Order dated 29 October 1990, the pre-trial conference on the case was set. 5 On 13
March 1991, for failure of the parties to reach any agreement, pre-trial was terminated and
trial of the case scheduled.6 Thereafter, trial on the merits ensued.
The following witnesses testified for Forfom: (1) Leon Capati; (2) Marites Dimaculangan; (3)
Marilene L. de Guzman; (4) Gavino Rosas de Claro; and (5) Jose Elazegui.
Mr. Leon Capati,7 employee of Forfom, testified that he knew Dr. Felix Limcaoco, Sr. because
he worked for him since 1951 until his death. He knew Forfom Development Corporation to be
a corporation formed by the children of Dr. Limcaoco and owner of the properties left behind
by said doctor. He said he worked as overseer in Hacienda Limcaoco in San Pedro, Laguna
owned by Dr. Limcaoco. Said hacienda was converted to the Olympia Complex Subdivision
now owned by Forfom. Being a worker of Forfom, he disclosed that in 1972, the PNR forcibly
took portions of the property of Forfom. Armed men installed railroads and even used
bulldozers which caused the destruction of around eleven hectares of sugar land. Since 1972,
he said PNR used the property for its benefit and even leased part of it to people living near
the railroad. At that time, he claimed that the value of sugarcane was P200.00 per piko and
that the plantation harvested sixty (60) tons annually worth P224,000.00. In all, from 1972 to
1985, he claimed Forfom lost P2,917,200.00 in ruined sugar, unrealized harvest, excluding
unrealized harvest for nine mango trees which yielded 60 kaings per tree per harvest.
Ms. Marites Dimaculangan,8 an officer of Forfom, corroborated the testimony of Mr. Leon
Capati. She presented documents9 showing that Hacienda Limcaoco was previously owned
by Dr. Felix Limcaoco, then the ownership was transferred to Forfom. As proof that Hacienda
Limcaoco was converted into a low-cost housing subdivision known as the Olympia Complex
Subdivision, she presented permits from the Human Settlements Regulatory Commission and
from the Municipality of San Pedro.10 She also adduced in evidence several letters11 allegedly
showing that PNR occupied the property owned by the Limcaocos. As a result, around eleven
hectares of the sugar cane plantation were destroyed. 12 From 1972 to 1985, she claimed that
part of the property taken by PNR was leased to squatters beside the railroad tracks. She
added that Forfom incurred a loss totaling P2,917,200.00. She claimed that the current price
of land contiguous to the parcels taken by PNR was P1,000.00 per square meter.
Ms. Marilene L. De Guzman,13 Executive Vice-President of Forfom and daughter of the Late
Dr. Felix Limcaoco, corroborated the testimonies of Mr. Capati and Ms. Dimaculangan. She
disclosed that his father died on 25 March 1973. She learned from her father and from Mr.
Leon Capati that when the armed men took a portion of their property, the armed men did not
show any court order or authority from any agency of the government. The armed men used
bulldozers destroying 11 hectares of sugarcane and some mango trees. She said those taken
over were used as railroad tracks and a portion beside the tracks were being leased to
squatters. She revealed that the present fair market value of land at Olympia Complex is
P1,400.00 per square meter.14 If the land is not developed, same can be sold for P800.00 per
square meter. She said from the time their property was taken over by PNR, her family has
been writing to PNR regarding compensation for their land. 15
Ms. De Guzman said the property was still in the name of Dr. Felix Limcaoco, Sr. and Mrs.
Olympia Limcaoco when the PNR took over a portion of their properties. She said she was not
informed by Mr. Capati that the PNR took the said property over pursuant to a Presidential

Mandate in order to provide transportation for relocated squatters. She explained that her
father and Mr. Capati were not advised to harvest their crops and were surprised by the taking
over of the land.
Mr. Gavino Rosas de Claro,16 Land Register Examiner of the Register of Deeds of Calamba,
Laguna, testified as representative of the Register of Deeds. He brought in Court the originals
of TCT Nos. T-3438417 and T-34386,18 both in the name of Forfom Development Corporation
and OCT Nos. (O-326) O-38419 and (O-328) O-386, both in the name of Dr. Felix Limcaoco,
Sr.20 Thereafter, photocopies thereof were compared with the originals which were found to be
faithful reproductions of the same.
Jose Elazegui,21 Supervisor, Southern Tagalog Facoma, Inc. was presented to show the
production of sugar and molasses on the property of Forfom. He presented duplicate original
copies of Tuos ng inaning Tubo for the years 1984-1985, 1985-1986, 1986-1987 and 19871988.22 The documents showed the production (average yield per area per picul) in other
properties owned by Forfom other than the properties subject matter of this case.
For the defendant, Mrs. Edna Ramos, Department Manager of the Real Estate Department of
the PNR, took the stand.23 She testified that she was familiar with the acquisition by the PNR
of the right of way for the San Pedro-Carmona Commuter Line. It was acquired and
established by Presidential Mandate and pursuant to the authority of the PNR to expropriate
under its charter (Presidential Decree No. 741).24 She explained that President Ferdinand E.
Marcos authorized the PNR to acquire said right of way in a Cabinet Meeting on 1 November
1972 as evidenced by an excerpt of the minutes of the meeting of the PNR Board of Directors
on Resolution No. 751.25 The right of way was acquired to provide a cheap, efficient and safe
means of transportation to the squatters who were relocated in Cavite. The commuter line,
she said, was primarily for service rather than profit. As shown by the letter 26 dated 30 April
1974 of Nicanor T. Jimenez, former General Manager of the PNR, to Mrs. Olympia Hemedes
Vda. de Limcaoco, the acquisition of the right of way was with the knowledge and consent of
Dr. Felix Limcaoco, Sr.
Mrs. Ramos disclosed that the total area acquired by the PNR for the San Pedro-Carmona
Commuter Line was 15.7446 hectares or sixteen (16) lots in all owned by seven (7) private
landowners and three (3) corporations. Among the private landowners were Isabel Oliver,
Leoncia Blanco, Catalina Sanchez, Tomas Oliver, Alejandro Oliver and Antonio Sibulo. Per
record of PNR, they were paid P1.25 per square meter for their lands. They executed Absolute
Deeds of Sale in favor of the PNR, as a result of which, titles to the lands were transferred to
PNR.27 The remaining 9 lots belonging to the three private corporations - Forfom Development
Corporation, Alviar Development Manufacturing & Trading Supply Corp. and Life Realty
Development Corporation - were not paid for because these corporations were not able to
present their respective titles, which had been used as loan collaterals in the Philippine
National Bank and the Government Service Insurance System. 28 The unit price per square
meter, which the negotiating panel of the PNR and the representatives of the three
corporations was considering then, was P1.25. In a letter dated 3 October 1975, Mr. Felix
Limcaoco, Jr. of Forfom was asking for P12.00 per square meter for their land and
P150,000.00 for damaged sugar crops and mango trees. 29 She likewise said she had the
minutes of the conference between Mr. Limcaoco and the PNR Chief Construction Engineer
held at the PNR General Manager's Office on 24 July 1979. 30

17

Mrs. Ramos clarified that as a matter of policy, PNR employees and other persons were not
allowed to settle on the PNR's right of way. Squatting along the right of way had never been
encouraged. To prevent its proliferation, special contracts were entered into with selected
parties under strict conditions to vacate the property leased upon notice. She explained that
the leasing of PNR's right of way was an incidental power and was in response to the
government's social housing project.
In its decision dated 29 October 1992, the trial court ruled generally in favor of plaintiff, the
dispositive portion reading:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and
against defendant ordering the latter to pay the former the following:
1. Just compensation of the subject real properties consisting of 100,128 square meters and
covered by TCT Nos. T-34387, T-34384 and T-34386 at P10.00 per square meter, with legal
interest from the time of actual taking of plaintiff's real properties until payment is made by the
defendant;
2. The amount of P4,480,000.00 as unearned income of plaintiff from 1972 up to the current
year, and thereafter, the amount of P224,000 yearly, with legal interest until payment is made;
3. Actual damages in the amount of P150,000 corresponding to sugarcane crops and mango
trees destroyed or damaged as a result of the unlawful taking of plaintiff's real properties, with
legal interest until payment is made;
4. The amount of P100,000 as and for attorney's fees;
5. The amount of P150,000 for litigation expenses plus the costs of this suit.
Plaintiff's claim for recovery of possession and the other prayers in the complaint are hereby
dismissed for want of merit.31
The trial court found that the properties of Forfom were taken by PNR without due process of
law and without just compensation. Although the power of eminent domain was not exercised
in accordance with law, and PNR occupied petitioner's properties without previous
condemnation proceedings and payment of just compensation, the RTC ruled that, by its
acquiescence, Forfom was estopped from recovering the properties subject of this case. As to
its right to compensation and damages, it said that the same could not be denied. The trial
court declared that P10.00 per square meter was the fair and equitable market value of the
real properties at the time of the taking thereof.
Not contented with the decision, both parties appealed to the Court of Appeals by filing their
respective Notices of Appeal.32 PNR questioned the trial court's ruling fixing the just
compensation at P10.00 per square meter and not the declared value of P0.60 per square
meter or the fair market value of P1.25 paid to an adjacent owner. It likewise questioned the
award of actual damages and unearned income to Forfom.
On 24 April 1996, the appellate court disposed of the case as follows:
WHEEFORE, the decision appealed from is hereby AFFIRMED insofar as (1) it denies
plaintiff's claim for recovery of possession and (2) it awards just compensation at the rate of
P10.00 per square meter which defendant must pay to plaintiff, but with legal rate of interest
thereon hereby specifically fixed at six (6) percent per annum starting from January of 1973
until full payment is made. However, the appealed decision is MODIFIED in the sense that
plaintiff's claim for damages is DENIED for lack of merit.
No pronouncement as to costs.33

Except for the deletion of the award of damages, attorney's fees and litigation expenses, the
appellate court agreed the with trial court. We quote:
There is no dispute that defendant neither commenced an expropriation proceedings nor paid
just compensation prior to its occupation and construction of railroad lines on the subject
property. Nevertheless, plaintiff's prayer to recover the property cannot be granted.
Immediately after the occupation, or within a reasonable time thereafter, there is no showing
that the same was opposed or questioned by plaintiff or its representatives on the ground that
defendant never filed an expropriation proceedings and that no just compensation was ever
paid. Neither is there a showing that plaintiff sought to recover the property because the taking
was done forcibly with the aid of armed men. Instead, and this is borne out by certain
communications between the parties through their respective officers or representatives, what
plaintiff actually did was to negotiate with defendant for the purpose of fixing the amount which
the latter should pay as just compensation and, if there be any, damages. x x x.
xxxx
Clearly, a continuing negotiation between the parties took place for the purpose only of fixing
the amount of just compensation and not because plaintiff wanted to recover the subject
property. Thus, the failure of defendant to first file an expropriation proceedings and pay just
compensation is now beside the point. And even if the contention of plaintiff that defendant
used force is true, the former can no longer complain at this time. What controls now is the
fact that by its own act of negotiating with defendant for the payment of just compensation,
plaintiff had in effect made representations that it acquiesced to the taking of its property by
defendant. We therefore agree with the lower court that plaintiff, by its acquiescence, waived
its right, and is thus estopped, from recovering the subject property or from challenging any
supposed irregularity in its acquisition.
xxxx
Plaintiff's right to recover just compensation, however, remains. On this matter, we agree with
the P10.00 per square meter valuation fixed by the trial court x x x.
xxxx
With the long delay in the payment of just compensation however, defendant should pay
interest thereon at the legal rate of six (6) percent per annum from the time of occupation until
payment is made. x x x.34
Still unsatisfied with the decision, Forfom filed the instant petition for review on certiorari
raising the following issues:
A. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER
CANNOT RECOVER POSSESSION OF ITS LAND DESPITE THE ADMISSION THAT IT
WAS FORCIBLY TAKEN (DURING THE MARTIAL LAW ERA) WITHOUT ANY
EXPROPRIATION PROCEEDING OR PAYMENT OF COMPENSATION SIMPLY BECAUSE
PETITIONER DID NOT OPPOSE THE ARMED AND FORCIBLE TAKING THEREOF:
B. THE HONORABLE COURT OF APPEALS EMPLOYED DOUBLE STANDARD OF
JUSTICE IN ADMITTING HEARSAY EVIDENCE OF PNR YET REJECTING THAT OF
PETITIONER WHICH IS PROPERLY IDENTIFIED WITH ABUNDANT CROSS
EXAMINATION CONDUCTED ON THE BASIS OF PETITIONER'S REJECTED EVIDENCE:
C. THE HONORABLE COURT OF APPEALS ERRED GRIEVOUSLY IN HOLDING THAT IN
THIS ACTION "THE FAILURE OF DEFENDANT TO FIRST FILE AN EXPROPRIATION

18

PROCEEDINGS AND PAY JUST COMPENSATION (FOR THE PROPERTY OF PETITIONER

FORCIBLY TAKEN BY PRIVATE RESPONDENT) IS (NOW) BESIDE THE POINT."
D. THE HONORABLE COURT OF APPEALS ERRED IN AGREEING WITH THE RTC IN
FIXING THE COMPENSATION FOR THE LAND FORCIBLY TAKEN BY PNR AT A
RIDICULOUS, OUTRAGEOUS, AND ABSURD PRICE OF P10.00 PER SQUARE METER
DESPITE THE EVIDENCE SHOWING THAT THE PRICE OF LAND IN THE ADJACENT AND
SURROUNDING AREAS IS MORE THAN P1,500.00 PER SQUARE METER:
E. THE HONORABLE COURT OF APPEALS ERRED IN IGNORING THE EVIDENCE
ESTABLISHING THE RIGHT OF THE PETITIONER TO BE AWARDED ACTUAL OR
COMPENSATORY DAMAGES, ATTORNEY'S FEES, AND UNREALIZED INCOME:
F. THE HONORABLE COURT OF APPEALS ERRED IN AND ABUSED ITS DISCRETION IN
ADOPTING DOUBLE STANDARD IN ITS EVALUATION OF THE EVIDENCE AND IN
ADMITTING PNR's PATENTLY HEARSAY EVIDENCE WHILE REJECTING PETITIONER'S
RELEVANT - MATERIAL AND ADMISSIBLE EVIDENCE:
G. THE HONORABLE COURT OF APPEALS DEVIATED FROM ESTABLISHED
JURISPRUDENCE IN UNJUSTIFIABLY IGNORING AND SETTING ASIDE THE FINDINGS
OF FACTS OF THE TRIAL COURT THAT ARE IN FACT SUPPORTED BY ABUNDANT
EVIDENCE:
H. THE HONORABLE COURT OF APPEALS APPARENTLY SUPPRESSED THE EVIDENCE
THAT PRIVATE RESPONDENT PNR APART FROM FORCIBLY TAKING THE LAND OF
PETITIONER WITH THE EMPLOYMENT OF ARMED MEN, RENTED OUT PORTIONS OF
SAID LAND TO ITS TENANTS WHO PAID HEFTY RENTALS FOR THE USE OF THE SAME
AS RESIDENTIAL LOTS (AND NOT FOR PUBLIC PURPOSES).35
On the other hand, PNR accepted the decision of the Court of Appeals and no longer
appealed.
The primary question to be resolved is: Can petitioner Forfom recover possession of its
property because respondent PNR failed to file any expropriation case and to pay just
compensation?
The power of eminent domain is an inherent and indispensable power of the State. Being
inherent, the power need not be specifically conferred on the government by the
Constitution.36 Section 9, Article III states that private property shall not be taken for public use
without just compensation. The constitutional restraints are public use and just
compensation.37
The fundamental power of eminent domain is exercised by the Legislature. It may be
delegated by Congress to the local governments, other public entities and public utilities. 38 In
the case at bar, PNR, under its charter, 39 has the power of expropriation.
A number of circumstances must be present in the taking of property for purposes of eminent
domain: (1) the expropriator must enter a private property; (2) the entrance into private
property must be for more than a momentary period; (3) the entry into the property should be
under warrant or color of legal authority; (4) the property must be devoted to a public purpose
or otherwise informally, appropriately or injuriously affected; and (5) the 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.40
In the case at bar, the expropriator (PNR) entered the property of Forfom, a private land. The
entrance into Forfom's property was permanent, not for a fleeting or brief period. PNR has

been in control, possession and enjoyment of the subject land since December 1972 or
January 1973. PNR's entry into the property of Forfom was with the approval of then President
Marcos and with the authorization of the PNR's Board of Directors. The property of Forfom
measuring around eleven hectares was devoted to public use - railroad tracks, facilities and
appurtenances for use of the Carmona Commuter Service. With the entrance of PNR into the
property, Forfom was deprived of material and beneficial use and enjoyment of the property. It
is clear from the foregoing that there was a taking of property within the constitutional sense.
Forfom argues that the property taken from it should be returned because there was neither
expropriation case filed by PNR nor just compensation paid for the same.
It can be gathered from the records that Forfom accepted the fact of the taking of its land
when it negotiated with PNR for just compensation, knowing fully well that there was no
expropriation case filed at all. Forfom's inaction for almost eighteen (18) years to question the
absence of expropriation proceedings and its discussions with PNR as to how much petitioner
shall be paid for its land preclude it from questioning the PNR's power to expropriate or the
public purpose for which the power was exercised. In other words, it has waived its right and
is estopped from assailing the takeover of its land on the ground that there was no case for
expropriation that was commenced by PNR.
In Manila Railroad Co. v. Paredes,41 the first case in this jurisdiction in which there was an
attempt to compel a public service corporation, endowed with the power of eminent domain, to
vacate the property it had occupied without first acquiring title thereto by amicable purchase or
expropriation proceedings, we said:
x x x whether the railroad company has the capacity to acquire the land in dispute by virtue of
its delegated power of eminent domain, and, if so, whether the company occupied the land
with the express or implied consent or acquiescence of the owner. If these questions of fact be
decided in the affirmative, it is uniformly held that an action of ejectment or trespass or
injunction will not lie against the railroad company, but only an action for damages, that is,
recovery of the value of the land taken, and the consequential damages, if any. The primary
reason for thus denying to the owner the remedies usually afforded to him against usurpers is
the irremedial injury which would result to the railroad company and to the public in general. It
will readily be seen that the interruption of the transportation service at any point on the right
of way impedes the entire service of the company and causes loss and inconvenience to all
passengers and shippers using the line. Under these circumstances, public policy, if not public
necessity, demands that the owner of the land be denied the ordinarily remedies of ejectment
and injunction. The fact that the railroad company has the capacity to eventually acquire the
land by expropriation proceedings undoubtedly assists in coming to the conclusion that the
property owner has no right to the remedies of ejectment or injunction. There is also
something akin to equitable estoppel in the conduct of one who stands idly by and watches
the construction of the railroad without protest. x x x. But the real strength of the rule lies in the
fact that it is against public policy to permit a property owner, under such circumstances, to
interfere with the service rendered to the public by the railroad company. x x x. (I)f a
landowner, knowing that a railroad company has entered upon his land and is engaged in
constructing its road without having complied with a statute requiring either payment by
agreement or proceedings to condemn, remains inactive and permits it to go on and expend
large sums in the work, he is estopped from maintaining either trespass or ejectment for the

19

entry, and will be regarded as having acquiesced therein, and will be restricted to a suit for
damages.
Further, in De Ynchausti v. Manila Electric Railroad & Light Co.,42 we ruled:
The owner of land, who stands by, without objection, and sees a public railroad constructed
over it, can not, after the road is completed, or large expenditures have been made thereon
upon the faith of his apparent acquiescence, reclaim the land, or enjoin its use by the railroad
company. In such a case there can only remain to the owner a right of compensation.
xxxx
One who permits a railroad company to occupy and use his land and construct its roads
thereon without remonstrance or complaint, cannot afterwards reclaim it free from the
servitude he has permitted to be imposed upon it. His acquiescence in the company's taking
possession and constructing its works under circumstances which made imperative his
resistance, if he ever intended to set up illegality, will be considered a waiver. But while this
presumed waiver is a bar to his action to dispossess the company, he is not deprived of his
action for damages for the value of the land, of for injuries done him by the construction or
operation of the road.
xxxx
We conclude that x x x the complaint in this action praying for possession and for damages for
the alleged unlawful detention of the land in question, should be dismissed x x x but that such
dismissal x x x should be without prejudice to the right of the plaintiff to institute the
appropriate proceedings to recover the value of the lands actually taken, or to compel the
railroad corporation to take the necessary steps to secure the condemnation of the land and to
pay the amount of the compensation and damages assessed in the condemnation
proceedings.
In Ansaldo v. Tantuico, Jr.,43 a case involving the takeover by the Government of two private
lots to be used for the widening of a road without the benefit of an action for expropriation or
agreement with its owners, we held that the owners therein, having been silent for more than
two decades, were deemed to have consented to such taking -- although they knew that there
had been no expropriation case commenced -- and therefore had no reason to impugn the
existence of the power to expropriate or the public purpose for which that power had been
exercised. In said case, we directed the expropriator to forthwith institute the appropriate
expropriation action over the land, so that just compensation due the owners may be
determined in accordance with the Rules of Court.
From the afore-cited cases, it is clear that recovery of possession of the property by the
landowner can no longer be allowed on the grounds of estoppel and, more importantly, of
public policy which imposes upon the public utility the obligation to continue its services to the
public. The non-filing of the case for expropriation will not necessarily lead to the return of the
property to the landowner. What is left to the landowner is the right of compensation.
Forfom argues that the recovery of its property is justified because PNR failed to pay just
compensation from the time its property was taken. We do not agree. It is settled that nonpayment of just compensation does not entitle the private landowners to recover possession
of their expropriated lot.44
Forfom contends that since there is enormous proof that portions of the property taken by
PNR were being leased to third parties there was enough justification for the Court of Appeals
to order the return to petitioner of the leased portions as well as the rents received therefrom.

We find such contention to be untenable. As ruled above, Forfom's inaction on and

acquiescence to the taking of its land without any expropriation case being filed, and its
continued negotiation with PNR on just compensation for the land, prevent him from raising
any issues regarding the power and right of the PNR to expropriate and the public purpose for
which the right was exercised. The only issue that remains is just compensation. Having no
right to further question PNR's act of taking over and the corresponding public purpose of the
condemnation, Forfom cannot now object to PNR's lease of portions of the land to third
parties. The leasing out of portions of the property is already a matter between PNR and third
persons in which Forfom can no longer participate. The same no longer has any bearing on
the issue of just compensation.
Forfom further avers that the leasing out of portions of the property to third persons is beyond
the scope of public use and thus should be returned to it. We do not agree. The public-use
requisite for the valid exercise of the power of eminent domain is a flexible and evolving
concept influenced by changing conditions. At present, it may not be amiss to state that
whatever is beneficially employed for the general welfare satisfies the requirement of public
use.45 The term "public use" has now been held to be synonymous with "public interest,"
"public benefit," "public welfare," and "public convenience." 46 It includes the broader notion of
indirect public benefit or advantage.47 Whatever may be beneficially employed for the general
welfare satisfies the requirement of public use.48
In the instant case, Mrs. Ramos of the PNR explains that the leasing of PNR's right of way is
an incidental power and is in response to the government's social housing project. She said
that to prevent the proliferation of squatting along the right of way, special contracts were
entered into with selected parties under strict conditions to vacate the property leased upon
notice. To the court, such purpose is indeed public, for it addresses the shortage in housing,
which is a matter of concern for the state, as it directly affects public health, safety,
environment and the general welfare.
Forfom claims it was denied due process when its property was forcibly taken without due
compensation for it. Forfom is not being denied due process. It has been given its day in
court. The fact that its cause is being heard by this Court is evidence that it is not being denied
due process.
We now go to the issue of just compensation.
Under Section 5 of the 1997 Rules of Civil Procedure, the court shall appoint not more than
three competent and disinterested persons as commissioners to ascertain and report to the
court the just compensation for the property. Though the ascertainment of just compensation
is a judicial prerogative,49 the appointment of commissioners to ascertain just compensation
for the property sought to be taken is a mandatory requirement in expropriation cases. While it
is true that the findings of commissioners may be disregarded and the trial court may
substitute its own estimate of the value, it may only do so for valid reasons; that is, where the
commissioners have applied illegal principles to the evidence submitted to them, where they
have disregarded a clear preponderance of evidence, or where the amount allowed is either
grossly inadequate or excessive. Thus, "trial with the aid of the commissioners is a substantial
right that may not be done away with capriciously or for no reason at all." 50
In the case before us, the trial court determined just compensation, but not in an expropriation
case. Moreover, there was no appointment of commissioners as mandated by the rules. The
appointment of commissioners is one of the steps involved in expropriation proceedings. What

20

the judge did in this case was contrary to what the rules prescribe. The judge should not have
made a determination of just compensation without first having appointed the required
commissioners who would initially ascertain and report the just compensation for the property
involved. This being the case, we find the valuation made by the trial court to be ineffectual,
not having been made in accordance with the procedure provided for by the rules.
The next issue to be resolved is the time when just compensation should be fixed. Is it at the
time of the taking or, as Forfom maintains, at the time when the price is actually paid?
Where actual taking was made without the benefit of expropriation proceedings, and the
owner sought recovery of the possession of the property prior to the filing of expropriation
proceedings, the Court has invariably ruled that it is the value of the property at the time of
taking that is controlling for purposes of compensation. 51 In the case at bar, the just
compensation should be reckoned from the time of taking which is January 1973. The
determination thereof shall be made in the expropriation case to be filed without delay by the
PNR after the appointment of commissioners as required by the rules.
Admittedly, the PNR's occupation of Forfom's property for almost eighteen (18) years entitles
the latter to payment of interest at the legal rate of six (6%) percent on the value of the land at
the time of taking until full payment is made by the PNR. 52
For almost 18 years, the PNR has enjoyed possession of the land in question without the
benefit of expropriation proceedings. It is apparent from its actuations that it has no intention
of filing any expropriation case in order to formally place the subject land in its name. All these
years, it has given Forfom the runaround, failing to pay the just compensation it rightly
deserves. PNR's uncaring and indifferent posture must be corrected with the awarding of
exemplary damages, attorney's fees and expenses of litigation. However, since Forfom no
longer appealed the deletion by both lower courts of said prayer for exemplary damages, the
same cannot be granted. As to attorney's fees and expenses of litigation, we find the award
thereof to be just and equitable. The amounts of P100,000.00 as attorney's fees and
P50,000.00 as litigation expenses are reasonable under the premises.
As explained above, the prayer for the return of the leased portions, together with the rental
received therefrom, is denied. Unearned income for years after the takeover of the land is
likewise denied. Having turned over the property to PNR, Forfom has no more right to receive
any income, if there be any, derived from the use of the property which is already under the
control and possession of PNR.
As to actual damages corresponding to the sugarcane and mango trees that were allegedly
destroyed when PNR entered and took possession of the subject land, we find that the same,
being a question of fact, is better left to be determined by the expropriation court where the
PNR will be filing the expropriation case. Evidence for such claim may be introduced before
the condemnation proceedings.53
WHEREFORE, the instant petition is PARTIALLY DENIED insofar as it denies Forfom
Development Corporation's prayer for recovery of possession (in whole or in part) of the
subject land, unearned income, and rentals. The petition is PARTIALLY GRANTED in that
attorney's fees and litigation expenses in the amounts of P100,000.00 and P50,000.00,
respectively, are awarded. The Philippine National Railways is DIRECTED to forthwith institute
the appropriate expropriation action over the land in question, so that just compensation due
to its owner may be determined in accordance with the Rules of Court, with interest at the
legal rate of six (6%) percent per annum from the time of taking until full payment is made. As

to the claim for the alleged damaged crops, evidence of the same, if any, may be presented
before the expropriation court. No costs.
REPUBLIC OF THE PHILIPPINES, represented by the PHILIPPINE ECONOMIC ZONE
AUTHORITY (PEZA), Petitioner,
vs.
SPOUSES AGUSTIN and IMELDA CANCIO, Respondents.
DECISION
CORONA, J.:
This petition for review on certiorari under Rule 45 of the Rules of Court seeks to set aside the
October 17, 2005 decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 75092.
Petitioner Philippine Economic Zone Authority is a government-owned and controlled
corporation created and existing under and by virtue of RA 7916, 2 as amended. It is vested
with governmental functions,3 including the power of eminent domain, thus enabling it to
acquire private land within or adjacent to the ecozone for consolidation with land for zone
development purposes.4
On January 15, 1979, then President Ferdinand E. Marcos issued Proclamation No. 1811 5
which reserved certain parcels of land of the public domain in Lapu Lapu City in favor of
petitioner (then Export Processing Zone Authority or EPZA) for the establishment of the
Mactan Export Processing Zone. However, some of the parcels covered by the proclamation,
including that of respondent spouses Agustin and Imelda Cancio, were private land.
Petitioner eventually laid out the development of the economic zone and subsequently leased
out respondents 47,540 sq. m. lot to an investor in the economic zone, Maitland Smith Inc.
(Maitland).
On May 19, 2001, petitioner offered to purchase respondents lot at P1,100 per sq. m. or
P52,294,000 for the whole property. The letter containing the offer further instructed
respondents "to consider and accept, otherwise we will initiate expropriation proceedings in
the proper court."
Instead of accepting the offer, respondents filed an unlawful detainer case against Maitland in
the Municipal Trial Court of Lapu Lapu City.
Thereafter, petitioner commenced expropriation proceedings for respondents property with
the Regional Trial Court (RTC) of Lapu Lapu City, Branch 54 on August 27, 2001. 6 Accordingly,
it sought a writ of possession for the property for which it was willing to deposit 10% of the
offered amount or a total of P5,229,400 with the Land Bank of the Philippines in accordance
with Administrative Order (A.O.) No. 50.7
Respondents, however, filed a motion to require petitioner to comply with RA 8974,8
specifically Section 4(a) thereof, which requires that, upon the filing of the complaint for
expropriation, the implementing agency shall immediately pay the owner of the property an
amount equivalent to 100% of the current zonal valuation thereof for purposes of the issuance
of a writ of possession.
In its January 14, 2002 order (first order), the trial court granted respondents motion.
Petitioner moved for its reconsideration. It argued that RA 8974 was inapplicable as the
payment required under the law applied only to instances where the property was still in the
owners possession and had yet to be transferred to the government. It could not be validly
invoked when the property was already in the governments possession, as in this case. It also
averred that it should be made to pay only the price of the land at the time of its taking.

21

Corollarily, if it was ordered to pay the amount required under RA 8974, it would be unjustly
penalized for its own improvements to the property.
This time, the RTC agreed with petitioners position. On February 26, 2002 (second order), the
court a quo granted petitioners motion for reconsideration.
Respondents filed a motion for reconsideration, contending that petitioner should make the
required payment under the law because RA 8974, which took effect before the
commencement of the expropriation case, applied to all actions of such nature regardless of
whether the government agency was already in possession or not. The court a quo issued its
September 5, 2002 order (third order) which reversed its second order and reinstated the first
one.
Thereafter, petitioner filed a petition for certiorari in the CA, assailing the first and third orders
of the RTC. The appellate court sustained the RTCs ruling.
Hence, this petition.
The issue before us is whether or not RA 8974 is applicable to this case for purposes of the
issuance of the writ of possession.9 It is petitioners stance that it is not. It cited A.O. No. 50 as
its legal authority when it offered to purchase respondents property in an amount equivalent
to ten percent (10%) higher than the zonal value thereof. 10 Consequently, petitioner prayed in
its complaint for expropriation11 that it be issued a writ of possession upon a showing that the
amount equivalent to ten percent (10%) of the offered amount has been duly deposited.
Respondents, on the other hand, agree that RA 8974 is the controlling law in this case as the
complaint for expropriation was instituted when said law was already in effect.
We deny the petition. RA 8974 governs this case, not A.O. No. 50 as petitioner insists.
A perusal of RA 8974 readily reveals that it applies to instances when the national government
expropriates property for national government infrastructure projects. 12 Undeniably, the
economic zone is a national government project a matter undisputed by both parties. Also,
the complaint for expropriation was filed only on August 27, 2001 or almost one year after the
law was approved on November 7, 2000. Thus, there is no doubt about its applicability to this
case.
We note that this expropriation case is still in its initial stages. The trial court had yet to
approve a writ of possession in petitioners favor when the issue of payment of just
compensation cropped up. Both parties seemed to have confused the requirement of paying
100% of the current zonal valuation of the property (as a prerequisite to the issuance of a writ
of possession) with the payment of just compensation itself.
In its complaint filed in the RTC,13 petitioner prayed that:
a. A writ of possession be issued in favor of plaintiff respecting its possession, control and
disposition of the land sought to be expropriated including the power or authority to demolish,
if any, improvements thereon, upon showing that the amount equivalent to 10% of the offered
amount has been duly deposited.
In their motion to require petitioner to comply with RA 8974, 14 respondents countered that
they:
x x x contest PEZAs proferred value as it is not a just compensation for the property sought to
be expropriated.
When petitioner moved for reconsideration15 after the RTC granted respondents
aforementioned motion, it argued that:

The inapplicability of R. A. No. 8974 is further highlighted by the fact that it requires a deposit
based on the current zonal valuation of the property. To apply such valuation to the instant
case would be to violate the cardinal principle in eminent domain proceedings that the
just compensation for the property should be its fair market value at the time of taking.
The nature and character of the land at the time of its taking is the principal criterion to
determine just compensation to the landowner (National Power Corporation vs. Henson, 300
SCRA 751 [1998]). (Emphasis supplied)
Clearly, there was a confusion regarding the nature of the amount to be paid for the issuance
of a writ of possession. In Capitol Steel Corporation v. PHIVIDEC Industrial Authority,16 we
clarified that the payment of the provisional value as a condition for the issuance of a writ of
possession is different from the payment of just compensation for the expropriated property.
While the provisional value is based on the current relevant zonal valuation, just
compensation is based on the prevailing fair market value of the property.1avvph!1.zw+
In that case, we agreed with the CAs explanation 17 that:
The first refers to the preliminary or provisional determination of the value of the property. It
serves a double-purpose of pre-payment if the property is fully expropriated, and of an
indemnity for damages if the proceedings are dismissed. It is not a final determination of just
compensation and may not necessarily be equivalent to the prevailing fair market value of the
property. Of course, it may be a factor to be considered in the determination of just
compensation.
Just compensation, on the other hand, is the final determination of the fair market value of the
property. It has been described as "the just and complete equivalent of the loss which the
owner of the thing expropriated has to suffer by reason of the expropriation." Market value[s,]
has also been described in a variety of ways as the "price fixed by the buyer and seller in the
open market in the usual and ordinary course of legal trade and competition; the price and
value of the article established as shown by sale, public or private, in the ordinary way of
business; the fair value of the property between one who desires to purchase and one who
desires to sell; the current price; the general or ordinary price for which property may be sold
in that locality." (Emphasis in the original)
There is therefore no need yet to determine with reasonable certainty the final amount of just
compensation in resolving the issue of a writ of possession. 18 In fact, it is the ministerial duty of
the trial court to issue the writ upon compliance with the requirements of Section 4 19 of the law.
No hearing is required and the court cannot exercise its discretion in order to arrive at the
amount of the provisional value of the property to be expropriated as the legislature has
already fixed the amount under the aforementioned provision of the law. 20
It is only after the trial court ascertains the provisional amount to be paid that just
compensation will be determined.
In establishing the amount of just compensation, the parties may present evidence relative to
the propertys fair market value, as provided under Section 5 of RA 8974. 21 Thus:
Sec. 5. Standards for the Assessment of the Value of the Land Subject of Expropriation
Proceedings or Negotiated Sale. In order to facilitate the determination of just
compensation, the court may consider, among other well-established factors, the following
relevant standards:
(a) The classification and use for which the property is suited;
(b) The developmental costs for improving the land;

22

(c) The value declared by the owners;

(d) The current selling price of similar lands in the vicinity;
(e) The reasonable disturbance compensation for the removal and/or demolition of certain
improvements on the land and for the value of improvements thereon;
(f) The size, shape or location, tax declaration and zonal valuation of the land;
(g) The price of the land as manifested in the ocular findings, oral as well as documentary
evidence presented; and
(h) Such facts and events as to enable the affected property owners to have sufficient funds to
acquire similarly-situated lands of approximate areas as those required from them by the
government, and thereby rehabilitate themselves as early as possible.
This must be so as just compensation should take into account the consequential benefits and
damages which may arise from the expropriation.22 Furthermore, it is well to remember that
the concept of just compensation does not mean fairness to the property owner alone. It must
also be just to the public which ultimately bears the cost of expropriation. 23
Lastly, RA 8974 provides that "the court shall determine the just compensation to be paid the
owner within sixty (60) days from the date of filing of the expropriation case." 24 In this case,
almost eight years have passed since petitioner commenced the expropriation proceedings on
August 27, 2001. We, however, hold that it is still feasible to comply with the spirit of the law
by requiring the trial court to make such determination within sixty (60) days from finality of
this decision, in accordance with the guidelines laid down in RA 8974 and its implementing
rules.25
WHEREFORE, the petition is hereby DENIED.
EN BANC
[G.R. NO. 169008 : July 31, 2008]
LAND BANK OF THE PHILIPPINES, Petitioner, v. RAYMUNDA MARTINEZ, Respondent.
RESOLUTION
NACHURA, J.:
Before the Court are petitioner's September 20, 2007 Motion for Reconsideration 1 and
November 8, 2007 Supplemental Motion for Reconsideration, 2 which seek the reversal of the
August 14, 2007 Decision3 in the instant case. To recall, the Court in the challenged decision
denied the Petition for Review on Certiorari and affirmed the ruling of the Court of Appeals
(CA) in CA-G.R. SP No. 83276.
Lifted from the said assailed decision are the following antecedent facts and proceedings:
After compulsory acquisition by the Department of Agrarian Reform (DAR), on November 16,
1993, of respondent Martinez's 62.5369-hectare land in Barangay Agpudlos, San Andres,
Romblon, pursuant to Republic Act No. 6657 or the Comprehensive Agrarian Reform Law of
1988 (CARL), petitioner Land Bank of the Philippines (LBP) offered P1,955,485.60 as just
compensation. Convinced that the proffered amount was unjust and confiscatory, respondent
rejected it. Thus, the Department of Agrarian Reform Adjudication Board (DARAB), through its
Provincial Agrarian Reform Adjudicator (PARAD) conducted summary administrative
proceedings for the preliminary determination of just compensation in accordance with Section
16 (d) of the CARL.
On September 4, 2002, PARAD Virgilio M. Sorita, finding some marked inconsistencies in the
figures and factors made as bases by LBP in its computation, rendered judgment as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered:

Ordering the Land Bank of the Philippines to pay landowner-protestant RAYMUNDA

MARTINEZ for her property covered and embraced by TCT No. T-712 with an area of 62.5369
hectares, more or less, which the Department of Agrarian Reform intends to acquire, the total
amount of TWELVE MILLION ONE HUNDRED SEVENTY NINE THOUSAND FOUR
HUNDRED NINETY TWO and 50/100 Pesos (Php12,179,492.50), in the manner provided for
by law.
SO ORDERED.
A petition for the fixing of just compensation docketed as Agrarian Case No. 696 was then
filed by LBP's counsel before the Special Agrarian Court (SAC), the Regional Trial Court of
Odiongan, Romblon, Branch 82. After filing her answer to the said petition, respondent,
contending that the orders, rulings and decisions of the DARAB become final after the lapse of
15 days from their receipt, moved for the dismissal of the petition for being filed out of time.
Petitioner opposed the motion.
Meanwhile, respondent, still asserting the finality of PARAD Sorita's decision, filed before the
Office of the PARAD a motion for the issuance of a writ of execution, which was eventually
granted on November 11, 2003. Ascertaining that the petition before the SAC was filed by LBP
26 days after it received a copy of PARAD Sorita's decision, the Office of the PARAD denied
LBP's motion for reconsideration and ordered the issuance of a writ of execution on February
23, 2004. Aggrieved of these developments, LBP, on March 12, 2004, moved to quash the
said February 23, 2004 PARAD resolution.
On April 6, 2004, even as the motion to quash was yet unresolved, LBP instituted a petition for
certiorari before the CA, which was docketed as CA-G.R. SP No. 83276, assailing both the
November 11, 2003 and the February 23, 2004 PARAD resolutions. LBP primarily contended
that the Office of the PARAD gravely abused its discretion when it issued the writ of execution
despite the pendency with the SAC of a petition for the fixing of just compensation.
The CA, finding LBP guilty of forum-shopping for not disclosing the pendency of the Motion to
Quash dated March 12, 2004, dismissed the petition on September 28, 2004, thus:
ACCORDINGLY, the present petition for certiorari is DISMISSED outright.
Consequently, in view of the dismissal of the above-entitled case, we are no longer in a
position to act on the private respondent's motion for execution pending appeal.
Further, this Court, mindful that under Sec. 5, Rule 7, of the 1997 Rules of Civil Procedure,
willful and deliberate forum-shopping constitutes direct contempt of court and cause for
administrative sanctions, which may both be resolved and imposed in the same case where
the forum shopping is found, WARNS the counsel of record of the petitioner that a repetition of
a similar act of submitting a false certification shall be dealt with most severely.
SO ORDERED.
Not persuaded by LBP's motion for reconsideration, the appellate court denied the same on
July 15, 2005. Necessarily, LBP, through its legal department, elevated the case before this
Court on September 9, 2005 via a Petition for Review on Certiorari under Rule 45, contending,
among others, that it did not commit deliberate forum shopping for what it filed with the Office
of the PARAD was a motion to quash, which is not an initiatory pleading; and the decision of
the PARAD cannot be executed due to the pending petition for fixing of just compensation with
the SAC.

23

On September 14, 2005, we issued a temporary restraining order (TRO) restraining the
appellate court and the DAR adjudicators from implementing the November 11, 2003 and the
February 23, 2004 resolutions.
For her part, respondent contends that petitioner has committed forum-shopping when it filed
a certiorari petition without first awaiting the resolution by the Office of the PARAD of the
motion to quash; and that petitioner has lost its standing to sue considering that it is being
represented by its lawyers and not the Office of the Government Corporate Counsel (OGCC).
[Citations omitted.]4
Three primordial issues were then resolved by the Court in the said decision' (1) whether or
not petitioner could file its appeal solely through its legal department; (2) whether or not
petitioner committed forum shopping; and (3) whether or not the Provincial Agrarian Reform
Adjudicator (PARAD) gravely abused his discretion when he issued a writ of execution despite
the pendency of LBP's petition for fixing of just compensation with the Special Agrarian Court
(SAC).
The Court went on to rule that the Petition for Review on Certiorari could not be filed without
the Office of the Government Corporate Counsel (OGCC) entering its appearance as the
principal legal counsel of the bank or without the OGCC giving its conformity to the LBP Legal
Department's filing of the petition. The Court also found petitioner to have forum-shopped
when it moved to quash the PARAD resolutions and at the same time petitioned for their
annulment via certiorari under Rule 65. Most importantly, the Court ruled that petitioner was
not entitled to the issuance of a writ of certiorari by the appellate court because the Office of
the PARAD did not gravely abuse its discretion when it undertook to execute the September 4,
2002 decision on land valuation. The said adjudicator's decision attained finality after the
lapse of the 15-day period stated in Rule XIII, Section 11 of the Department of Agrarian
Reform Adjudication Board (DARAB) Rules of Procedure.
Dissatisfied with our ruling, petitioner successively filed, as aforesaid, the September 20, 2007
Motion for Reconsideration5 and the November 8, 2007 Supplemental Motion for
Reconsideration.6 In both motions, petitioner contends that its lawyers are authorized to
appear in the instant case for they have been issued a letter of authority by the OGCC on April
17, 2006; that it did not commit deliberate forum shopping; that the Provincial Agrarian Reform
Adjudicator (PARAD) gravely abused his discretion in issuing the writ of execution to
implement his decision; that respondent's defense of res judicata or the alleged finality of the
PARAD's decision was never pleaded in her answer, hence, was already deemed waived; that
the PARAD had no jurisdiction to issue the writ of execution due to the pending petition for
determination of just compensation with the SAC; and that the Court's August 14, 2007
Decision in this case is contrary to its October 11, 2007 Decision in Land Bank of the
Philippines v. Suntay, G.R. No. 157903 on the issue of whether the petition for determination
of just compensation was filed out of time.
Respondent, in her January 24, 2008 Comment,7 counters, among others, that the filing of the
said motions is only dilatory considering that the arguments raised therein have already been
answered by the Court in the decision sought to be reconsidered.
The Court agrees with respondent's contention and denies petitioner's motions.
Indeed, except for the alleged conflict of the August 14, 2007 Decision with that promulgated
on October 11, 2007 in G.R. No. 157903 [LBP v. Suntay], the grounds raised by petitioner in

the motions are identical to those stated in its previous pleadings. And these have already
been considered and sufficiently passed upon by the Court in the August 14, 2007 Decision.
On the supposedly conflicting pronouncements in the cited decisions, the Court reiterates its
ruling in this case that the agrarian reform adjudicator's decision on land valuation attains
finality after the lapse of the 15-day period stated in the DARAB Rules. The petition for the
fixing of just compensation should therefore, following the law and settled jurisprudence, be
filed with the SAC within the said period. This conclusion, as already explained in the assailed
decision, is based on the doctrines laid down in Philippine Veterans Bank v. Court of Appeals 8
and Department of Agrarian Reform Adjudication Board v. Lubrica. 9
In Philippine Veterans Bank, decided in 2000 through the pen of Justice Vicente V. Mendoza,
the Court ruled that the trial court correctly dismissed the petition for the fixing of just
compensation because it was filed beyond the 15-day period provided in the DARAB Rules.
In Lubrica, decided in 2005 through the pen of Justice Dante O. Tinga, the Court, citing
Philippine Veterans Bank, ruled that the adjudicator's decision had already attained finality
because LBP filed the petition for just compensation beyond the 15-day reglementary period.
Incidentally, Josefina Lubrica is the assignee of Federico Suntay whose property is the subject
of the aforementioned October 11, 2007 Decision in LBP v. Suntay.chanrobles virtual law
library
Following settled doctrine, we ruled in this case that the PARAD's decision had already
attained finality because of LBP's failure to file the petition for the fixing of just compensation
within the 15-day period.
This ruling, however, as correctly pointed out by petitioner, runs counter to the Court's recent
decision in Suntay [the motions for reconsideration in Suntay were denied with finality in the
January 30, 2008 Resolution of the Court 10], in which the Court ruled that the trial court erred
in dismissing the petition for determination of just compensation on the ground that it was filed
out of time. The Court in that case stressed that the petition was not an appeal from the
adjudicator's final decision but an original action for the determination of just compensation.
We, however, promulgated our decision in this case ahead of Suntay. To reiterate, this case
was decided on August 14, 2007, while Suntay was decided two months later, or on October
11, 2007. Suntay should have then remained consistent with our ruling, and with the doctrines
enunciated in Philippine Veterans Bank and in Lubrica, especially considering that Lubrica
was the representative of Suntay in the Suntay case.
The Court notes that the Suntay ruling is based on Republic of the Philippines v. Court of
Appeals,11 decided in 1996 also through the pen of Justice Vicente V. Mendoza. In that case,
the Court emphasized that the jurisdiction of the SAC is original and exclusive, not appellate.
Republic, however, was decided at a time when Rule XIII, Section 11 was not yet present in
the DARAB Rules. Further, Republic did not discuss whether the petition filed therein for the
fixing of just compensation was filed out of time or not. The Court merely decided the issue of
whether cases involving just compensation should first be appealed to the DARAB before the
landowner can resort to the SAC under Section 57 of R.A. No. 6657.
To resolve the conflict in the rulings of the Court, we now declare herein, for the guidance of
the bench and the bar, that the better rule is that stated in Philippine Veterans Bank, reiterated
in Lubrica and in the August 14, 2007 Decision in this case. Thus, while a petition for the fixing
of just compensation with the SAC is not an appeal from the agrarian reform adjudicator's
decision but an original action, the same has to be filed within the 15-day period stated in the

24

DARAB Rules; otherwise, the adjudicator's decision will attain finality. This rule is not only in
accord with law and settled jurisprudence but also with the principles of justice and equity.
Verily, a belated petition before the SAC, e.g., one filed a month, or a year, or even a decade
after the land valuation of the DAR adjudicator, must not leave the dispossessed landowner in
a state of uncertainty as to the true value of his property.
IN THE LIGHT OF THE FOREGOING DISQUISITIONS, the Court DENIES WITH FINALITY
petitioner's September 20, 2007 Motion for Reconsideration and the November 8, 2007
Supplemental Motion for Reconsideration.
THIRD DIVISION
[G.R. NO. 162474 : October 13, 2009]
HON. VICENTE P. EUSEBIO, LORNA A. BERNARDO, VICTOR ENDRIGA, and the CITY
OF PASIG, Petitioners, v. JOVITO M. LUIS, LIDINILA LUIS SANTOS, ANGELITA
CAGALINGAN, ROMEO M. LUIS, and VIRGINIA LUIS-BELLESTEROS, * Respondents.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court,
praying that the Decision1 of the Court of Appeals (CA) dated November 28, 2003, affirming
the trial court judgment, and the CA Resolution2 dated February 27, 2004, denying petitioners'
motion for reconsideration, be reversed and set aside.
The antecedent facts are as follows:
Respondents are the registered owners of a parcel of land covered by Transfer Certificate of
Title Nos. 53591 and 53589 with an area of 1,586 square meters. Said parcel of land was
taken by the City of Pasig sometime in 1980 and used as a municipal road now known as A.
Sandoval Avenue, Barangay Palatiw, Pasig City. On February 1, 1993, the Sanggunian of
Pasig City passed Resolution No. 15 authorizing payments to respondents for said parcel of
land. However, the Appraisal Committee of the City of Pasig, in Resolution No. 93-13 dated
October 19, 1993, assessed the value of the land only at P150.00 per square meter. In a letter
dated June 26, 1995, respondents requested the Appraisal Committee to consider P2,000.00
per square meter as the value of their land.
One of the respondents also wrote a letter dated November 25, 1994 to Mayor Vicente P.
Eusebio calling the latter's attention to the fact that a property in the same area, as the land
subject of this case, had been paid for by petitioners at the price of P2,000.00 per square
meter when said property was expropriated in the year 1994 also for conversion into a public
road. Subsequently, respondents' counsel sent a demand letter dated August 26, 1996 to
Mayor Eusebio, demanding the amount of P5,000.00 per square meter, or a total of
P7,930,000.00, as just compensation for respondents' property. In response, Mayor Eusebio
wrote a letter dated September 9, 1996 informing respondents that the City of Pasig cannot
pay them more than the amount set by the Appraisal Committee.
Thus, on October 8, 1996, respondents filed a Complaint for Reconveyance and/or Damages
(Civil Case No. 65937) against herein petitioners before the Regional Trial Court (RTC) of
Pasig City, Branch 155. Respondents prayed that the property be returned to them with
payment of reasonable rental for sixteen years of use at P500.00 per square meter, or
P793,000.00, with legal interest of 12% per annum from date of filing of the complaint until full
payment, or in the event that said property can no longer be returned, that petitioners be
ordered to pay just compensation in the amount of P7,930,000.00 and rental for sixteen years

of use at P500.00 per square meter, or P793,000.00, both with legal interest of 12% per
annum from the date of filing of the complaint until full payment. In addition, respondents
prayed for payment of moral and exemplary damages, attorney's fees and costs.
After trial, the RTC rendered a Decision3 dated January 2, 2001, the dispositive portion of
which reads as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiffs
and against the defendants:
1. Declaring as ILLEGAL and UNJUST the action of the defendants in taking the properties of
plaintiffs covered by Transfer Certificates of Title Nos. 53591 and 53589 without their consent
and without the benefit of an expropriation proceedings required by law in the taking of private
property for public use;
2. Ordering the defendants to jointly RETURN the subject properties to plaintiffs with payment
of reasonable rental for its use in the amount of P793,000.00 with legal interest at the rate of
6% per annum from the filing of the instant Complaint until full payment is made;
3. In the event that said properties can no longer be returned to the plaintiffs as the same is
already being used as a public road known as A. Sandoval Avenue, Pasig City, the defendants
are hereby ordered to jointly pay the plaintiffs the fair and reasonable value therefore at
P5,000.00 per square meter or a total of P7,930,000.00 with payment of reasonable rental for
its use in the amount of P500.00 per square meter or a total of P793,000.00, both with legal
interest at the rate of 6% per annum from the filing of the instant Complaint until full payment
is made; andcralawlibrary
4. Ordering the defendants to jointly pay the plaintiffs attorney's fees in the amount of
P200,000.00.
No pronouncement as to costs.
SO ORDERED.
Petitioners then appealed the case to the CA, but the CA affirmed the RTC judgment in its
Decision dated November 28, 2003.rbl rl l lbrr
Petitioners' motion for reconsideration of the CA Decision was denied per Resolution dated
February 27, 2004.
Hence, this petition where it is alleged that:
I. PUBLIC RESPONDENT COURT ERRED IN UPHOLDING THE RULING OF THE LOWER
COURT DESPITE THE APPARENT LACK OF JURISDICTION BY REASON OF
PRESCRIPTION OF PRIVATE RESPONDENTS' CLAIM FOR JUST COMPENSATION;
II. PUBLIC RESPONDENT COURT ERRED IN FIXING THE FAIR AND REASONABLE
COMPENSATION FOR RESPONDENTS' PROPERTY AT P5,000.00 PER SQUARE METER
DESPITE THE GLARING FACT THAT AT THE TIME OF TAKING IN THE YEAR 1980 THE
FAIR MARKET VALUE WAS PEGGED BY AN APPRAISAL COMMITTEE AT ONE HUNDRED
SIXTY PESOS (PHP160.00);
III. PUBLIC RESPONDENT COURT ERRED IN UPHOLDING THE JUDGMENT OF THE
LOWER COURT AWARDING THE AMOUNT OF P793,000.00 AS REASONABLE RENTAL
FOR THE USE OF RESPONDENTS' PROPERTY IN SPITE OF THE FACT THAT THE SAME
WAS CONVERTED INTO A PUBLIC ROAD BY A PREVIOUSLY ELECTED MUNICIPAL
MAYOR WITHOUT RESPONDENTS' REGISTERING ANY COMPLAINT OR PROTEST FOR
THE TAKING AND DESPITE THE FACT THAT SUCH TAKING DID NOT PERSONALLY
BENEFIT THE PETITIONERS BUT THE PUBLIC AT LARGE; AND

25

IV. PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE P200,000.00

AWARD FOR ATTORNEY'S FEES TO THE PRIVATE RESPONDENTS' COUNSEL DESPITE
THE ABSENCE OF NEGLIGENCE OR INACTION ON THE PART OF PETITIONERS
RELATIVE TO THE INSTANT CLAIM FOR JUST COMPENSATION.4
At the outset, petitioners must be disabused of their belief that respondents' action for
recovery of their property, which had been taken for public use, or to claim just compensation
therefor is already barred by prescription. In Republic of the Philippines v. Court of Appeals, 5
the Court emphasized "that where private property is taken by the Government for public use
without first acquiring title thereto either through expropriation or negotiated sale, the owner's
action to recover the land or the value thereof does not prescribe." The Court went on to
remind government agencies not to exercise the power of eminent domain with wanton
disregard for property rights as Section 9, Article III of the Constitution provides that "private
property shall not be taken for public use without just compensation." 6
The remaining issues here are whether respondents are entitled to regain possession of their
property taken by the city government in the 1980's and, in the event that said property can no
longer be returned, how should just compensation to respondents be determined.
These issues had been squarely addressed in Forfom Development Corporation v. Philippine
National Railways,7 which is closely analogous to the present case. In said earlier case, the
Philippine National Railways (PNR) took possession of the private property in 1972 without
going through expropriation proceedings. The San Pedro-Carmona Commuter Line Project
was then implemented with the installation of railroad facilities on several parcels of land,
including that of petitioner Forfom. Said owner of the private property then negotiated with
PNR as to the amount of just compensation. No agreement having been reached, Forfom filed
a complaint for Recovery of Possession of Real Property and/or Damages with the trial court
sometime in August 1990.
In said case, the Court held that because the landowner did not act to question the lack of
expropriation proceedings for a very long period of time and even negotiated with the PNR as
to how much it should be paid as just compensation, said landowner is deemed to have
waived its right and is estopped from questioning the power of the PNR to expropriate or the
public use for which the power was exercised. It was further declared therein that:
x x x recovery of possession of the property by the landowner can no longer be allowed on the
grounds of estoppel and, more importantly, of public policy which imposes upon the public
utility the obligation to continue its services to the public. The non-filing of the case for
expropriation will not necessarily lead to the return of the property to the landowner. What is
left to the landowner is the right of compensation.
x x x It is settled that non-payment of just compensation does not entitle the private
landowners to recover possession of their expropriated lot. 8
Just like in the Forfom case, herein respondents also failed to question the taking of their
property for a long period of time (from 1980 until the early 1990's) and, when asked during
trial what action they took after their property was taken, witness Jovito Luis, one of the
respondents, testified that "when we have an occasion to talk to Mayor Caruncho we always
asked for compensation."9 It is likewise undisputed that what was constructed by the city
government on respondents' property was a road for public use, namely, A. Sandoval Avenue
in Pasig City. Clearly, as in Forfom, herein respondents are also estopped from recovering
possession of their land, but are entitled to just compensation.

Now, with regard to the trial court's determination of the amount of just compensation to which
respondents are entitled, the Court must strike down the same for being contrary to
established rules and jurisprudence.
The prevailing doctrine on judicial determination of just compensation is that set forth in
Forfom.10 Therein, the Court ruled that even if there are no expropriation proceedings
instituted to determine just compensation, the trial court is still mandated to act in accordance
with the procedure provided for in Section 5, Rule 67 of the 1997 Rules of Civil Procedure,
requiring the appointment of not more than three competent and disinterested commissioners
to ascertain and report to the court the just compensation for the subject property. The Court
reiterated its ruling in National Power Corporation v. Dela Cruz 11 that "trial with the aid of
commissioners is a substantial right that may not be done away with capriciously or for no
reason at all."12 It was also emphasized therein that although ascertainment of just
compensation is a judicial prerogative, the commissioners' findings may only be disregarded
or substituted with the trial court's own estimation of the property's value only if the
commissioners have applied illegal principles to the evidence submitted to them, where they
have disregarded a clear preponderance of evidence, or where the amount allowed is either
grossly inadequate or excessive. Thus, the Court concluded in Forfom that:
The judge should not have made a determination of just compensation without first having
appointed the required commissioners who would initially ascertain and report the just
compensation for the property involved. This being the case, we find the valuation made by
the trial court to be ineffectual, not having been made in accordance with the procedure
provided for by the rules.13
Verily, the determination of just compensation for property taken for public use must be done
not only for the protection of the landowners' interest but also for the good of the public. In
Republic v. Court of Appeals,14 the Court explained as follows:
The concept of just compensation, however, does not imply fairness to the property owner
alone. Compensation must be just not only to the property owner, but also to the public which
ultimately bears the cost of expropriation.15
It is quite clear that the Court, in formulating and promulgating the procedure provided for in
Sections 5 and 6, Rule 67, found this to be the fairest way of arriving at the just compensation
to be paid for private property taken for public use.
With regard to the time as to when just compensation should be fixed, it is settled
jurisprudence that where property was taken without the benefit of expropriation proceedings,
and its owner files an action for recovery of possession thereof before the commencement of
expropriation proceedings, it is the value of the property at the time of taking that is
controlling.16 Explaining the reason for this rule in Manila International Airport Authority v.
Rodriguez,17 the Court, quoting Ansaldo v. Tantuico, Jr., 18 stated, thus:
The reason for the rule, as pointed out in Republic v. Lara, is that . . . [w]here property is taken ahead of the filing of the condemnation proceedings, the value
thereof may be enchanced by the public purpose for which it is taken; the entry by the plaintiff
upon the property may have depreciated its value thereby; or, there may have been a natural
increase in the value of the property from the time the complaint is filed, due to general
economic conditions. The owner of private property should be compensated only for what he
actually loses; it is not intended that his compensation shall extend beyond his loss or injury.
And what he loses is only the actual value of his property at the time it is taken. This is the

26

only way that compensation to be paid can be truly just; i.e., 'just not only to the individual
whose property is taken,' 'but to the public, which is to pay for it.' 19
In this case, the trial court should have fixed just compensation for the property at its value as
of the time of taking in 1980, but there is nothing on record showing the value of the property
at that time. The trial court, therefore, clearly erred when it based its valuation for the subject
land on the price paid for properties in the same location, taken by the city government only
sometime in the year 1994.
However, in taking respondents' property without the benefit of expropriation proceedings and
without payment of just compensation, the City of Pasig clearly acted in utter disregard of
respondents' proprietary rights. Such conduct cannot be countenanced by the Court. For said
illegal taking, the City of Pasig should definitely be held liable for damages to respondents.
Again, in Manila International Airport Authority v. Rodriguez, 20 the Court held that the
government agency's illegal occupation of the owner's property for a very long period of time
surely resulted in pecuniary loss to the owner. The Court held as follows:
Such pecuniary loss entitles him to adequate compensation in the form of actual or
compensatory damages, which in this case should be the legal interest (6%) on the value of
the land at the time of taking, from said point up to full payment by the MIAA. This is based on
the principle that interest "runs as a matter of law and follows from the right of the landowner
to be placed in as good position as money can accomplish, as of the date of the taking."
The award of interest renders unwarranted the grant of back rentals as extended by the courts
below. In Republic v. Lara, et al., the Court ruled that the indemnity for rentals is inconsistent
with a property owner's right to be paid legal interest on the value of the property, for if the
condemnor is to pay the compensation due to the owners from the time of the actual taking of
their property, the payment of such compensation is deemed to retroact to the actual taking of
the property; and, hence, there is no basis for claiming rentals from the time of actual
taking.http://127.0.0.1:7860/source/2006.zip%3e17e,df|2006/FEB2006/161836.htm - _ftn#_ftn
More explicitly, the Court held in Republic v. Garcellano that:
The uniform rule of this Court, however, is that this compensation must be, not in the form of
rentals, but by way of 'interest from the date that the company [or entity] exercising the right of
eminent domain take possession of the condemned lands, and the amounts granted by the
court shall cease to earn interest only from the moment they are paid to the owners or
deposited in court x x x.
xxx
For more than twenty (20) years, the MIAA occupied the subject lot without the benefit of
expropriation proceedings and without the MIAA exerting efforts to ascertain ownership of the
lot and negotiating with any of the owners of the property. To our mind, these are wanton and
irresponsible acts which should be suppressed and corrected. Hence, the award of exemplary
damages and attorneys fees is in order. However, while Rodriguez is entitled to such
exemplary damages and attorney's fees, the award granted by the courts below should be
equitably reduced. We hold that Rodriguez is entitled only to P200,000.00 as exemplary
damages, and attorney's fees equivalent to one percent (1%) of the amount due. 21
Lastly, with regard to the liability of petitioners Vicente P. Eusebio, Lorna A. Bernardo, and
Victor Endriga all officials of the city government the Court cannot uphold the ruling that
said petitioners are jointly liable in their personal capacity with the City of Pasig for payments
to be made to respondents. There is a dearth of evidence which would show that said

petitioners were already city government officials in 1980 or that they had any involvement
whatsoever in the illegal taking of respondents' property. Thus, any liability to respondents is
the sole responsibility of the City of Pasig.
IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the
Court of Appeals dated November 28, 2003 is MODIFIED to read as follows:
1. The valuation of just compensation and award of back rentals made by the Regional Trial
Court of Pasig City, Branch 155 in Civil Case No. 65937 are hereby SET ASIDE. The City of
Pasig, represented by its duly-authorized officials, is DIRECTED to institute the appropriate
expropriation action over the subject parcel of land within fifteen (15) days from finality of this
Decision, for the proper determination of just compensation due to respondents, with interest
at the legal rate of six (6%) percent per annum from the time of taking until full payment is
made.
2. The City of Pasig is ORDERED to pay respondents the amounts of P200,000.00 as
exemplary damages and P200,000.00 as attorney's fees.
Magsangkay case
DECISION
BERSAMIN, J.:
Private property shall not be taken for public use without just compensation.
Section 9, Article III, 1987 Constitution
The application of this provision of the Constitution is the focus of this appeal.
Petitioner National Power Corporation (NPC) seeks the review on certiorari of the
decision promulgated on October 5, 2004,44[1] whereby the Court of Appeals (CA) affirmed the
decision dated August 13, 1999 and the supplemental decision dated August 18, 1999,
ordering NPC to pay just compensation to the respondents, both rendered by the Regional
Trial Court, Branch 1, in Iligan City (RTC).
Antecedents
Pursuant to its legal mandate under Republic Act No. 6395 (An Act Revising the
Charter of the National Power Corporation), NPC undertook the Agus River Hydroelectric
Power Plant Project in the 1970s to generate electricity for Mindanao. The project included the
construction of several underground tunnels to be used in diverting the water flow from the
Agus River to the hydroelectric plants.45[2]
On November 21, 1997, the respondents, namely: Cebu, Bangowa-an, Sayana,
Nasser, Manta, Edgar, Putri, Mongkoy and Amir, all surnamed Macabangkit (Heirs of

44
45
27

Macabangkit), as the owners of land with an area of 221,573 square meters situated in
Ditucalan, Iligan City, sued NPC in the RTC for the recovery of damages and of the property,
with the alternative prayer for the payment of just compensation. 46[3] They alleged that they
had belatedly discovered that one of the underground tunnels of NPC that diverted the water
flow of the Agus River for the operation of the Hydroelectric Project in Agus V, Agus VI and
Agus VII traversed their land; that their discovery had occurred in 1995 after Atty. Saidali C.
Gandamra, President of the Federation of Arabic Madaris School, had rejected their offer to
sell the land because of the danger the underground tunnel might pose to the proposed Arabic
Language Training Center and Muslims Skills Development Center; that such rejection had
been followed by the withdrawal by Global Asia Management and Resource Corporation from
developing the land into a housing project for the same reason; that Al-Amanah Islamic
Investment Bank of the Philippines had also refused to accept their land as collateral because
of the presence of the underground tunnel; that the underground tunnel had been constructed
without their knowledge and consent; that the presence of the tunnel deprived them of the
agricultural, commercial, industrial and residential value of their land; and that their land had
also become an unsafe place for habitation because of the loud sound of the water rushing
through the tunnel and the constant shaking of the ground, forcing them and their workers to
relocate to safer grounds.

After trial, the RTC ruled in favor of the plaintiffs (Heirs of Macabangkit), 49[6]
decreeing:

WHEREFORE, premises considered:

1. The prayer for the removal or dismantling of defendants tunnel is
denied. However, defendant is hereby directed and ordered:
a)To pay plaintiffs land with a total area of 227,065 square meters, at the rate
of FIVE HUNDRED (P500.00) PESOS per square meter, or a total of ONE
HUNDRED THIRTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND
FIVE HUNDRED (P113,532,500.00), PESOS, plus interest, as actual damages or
just compensation;
b)
To pay plaintiff a monthly rental of their land in the amount of THIRTY
THOUSAND (P30,000.00) PESOS from 1979 up to July 1999 with 12% interest per
annum;

In its answer with counterclaim,47[4] NPC countered that the Heirs of Macabangkit
had no right to compensation under section 3(f) of Republic Act No. 6395, under which a mere
legal easement on their land was established; that their cause of action, should they be
entitled to compensation, already prescribed due to the tunnel having been constructed in
1979; and that by reason of the tunnel being an apparent and continuous easement, any
action arising from such easement prescribed in five years.

c)To pay plaintiffs the sum of TWO HUNDRED THOUSAND (P200,000.00)

PESOS, as moral damages;
d)
To pay plaintiffs, the sum of TWO HUNDRED THOUSAND
(P200,000.00) PESOS, as exemplary damages;

Ruling of the RTC

e)To pay plaintiffs, the sum equivalent to 15% of the total amount awarded, as
attorneys fees, and to pay the cost.

On July 23, 1998, an ocular inspection of the land that was conducted by RTC
Judge Mamindiara P. Mangotara and the representatives of the parties resulted in the
following observations and findings:
a.
b.

c.

SO ORDERED.

That a concrete post which is about two feet in length from the ground which
according to the claimants is the middle point of the tunnel.

The RTC found that NPC had concealed the construction of the tunnel in 1979 from
the Heirs of Macabangkit, and had since continuously denied its existence; that NPC had
acted in bad faith by taking possession of the subterranean portion of their land to construct
the tunnel without their knowledge and prior consent; that the existence of the tunnel had
affected the entire expanse of the land, and had restricted their right to excavate or to
construct a motorized deep well; and that they, as owners, had lost the agricultural,
commercial, industrial and residential value of the land.

That at least three fruit bearing durian trees were uprooted and as a result of the
construction by the defendant of the tunnel and about one hundred coconuts
planted died.
That underground tunnel was constructed therein.48[5]

46

48

47

49
28

execution,53[10] prompting NPC to assail the writ by petition for certiorari in the CA. On
September 15, 1999, the CA issued a temporary restraining order (TRO) to enjoin the RTC
from implementing its decision. The Heirs of Macabangkit elevated the ruling of the CA (G.R.
No. 141447), but the Court upheld the CA on May 4, 2006.54[11]

The RTC fixed the just compensation at P500.00/square meter based on the
testimony of Dionisio Banawan, OIC-City Assessor of Iligan City, to the effect that the
appraised value of the adjoining properties ranged from P700.00 to P750.00, while the
appraised value of their affected land ranged from P400.00 to P500.00. The RTC also
required NPC to pay rentals from 1979 due to its bad faith in concealing the construction of
the tunnel from the Heirs of Macabangkit.

Ruling of the CA

On August 18, 1999, the RTC issued a supplemental decision, 50[7] viz:

NPC raised only two errors in the CA, namely:

Upon a careful review of the original decision dated August 13, 1999, a
sentence should be added to paragraph 1(a) of the dispositive portion thereof, to
bolster, harmonize, and conform to the findings of the Court, which is quoted
hereunder, to wit:

I
THE COURT A QUO SERIOUSLY ERRED IN RULING THAT NAPOCORS
UNDERGROUND TUNNEL IN ITS AGUS RIVER HYDRO-ELECTRIC PLANT
PROJECT TRAVERSED AND/OR AFFECTED APPELLEES PROPERTY AS
THERE IS NO CLEAR EVIDENCE INDUBITABLY ESTABLISHING THE SAME

Consequently, plaintiffs land or properties are hereby condemned in favor of

defendant National Power Corporation, upon payment of the aforesaid sum.

II
THE COURT A QUO SERIOUSLY ERRED IN GRANTING APPELLEES CLAIMS IN
THEIR ENTIRETY FOR GRANTING ARGUENDO THAT NAPOCORS
UNDERGROUND TUNNEL INDEED TRAVERSED APPELLEES PROPERTY,
THEIR CAUSE OF ACTION HAD ALREADY BEEN BARRED BY PRESCRIPTION,
ESTOPPEL AND LACHES

Therefore, paragraph 1(a) of the dispositive portion of the original

decision should read, as follows:
a)

To pay plaintiffs land with a total area of 227,065 square meters, at the rate of FIVE
HUNDRED (P500.00) PESOS per square meter, or a total of ONE HUNDRED
THIRTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND FIVE
HUNDRED (P113,532,500.00) PESOS, plus interest, as actual damages or just
compensation; Consequently, plaintiffs land or properties are hereby condemned in
favor of defendant National Power Corporation, upon payment of the aforesaid sum;

On October 5, 2004, the CA affirmed the decision of the RTC, holding that the
testimonies of NPCs witness Gregorio Enterone and of the respondents witness Engr. Pete
Sacedon, the topographic survey map, the sketch map, and the ocular inspection report
sufficiently established the existence of the underground tunnel traversing the land of the
Heirs of Macabangkit; that NPC did not substantiate its defense that prescription already
barred the claim of the Heirs of Macabangkit; and that Section 3(i) of R.A. No. 6395, being
silent about tunnels, did not apply, viz:

This supplemental decision shall be considered as part of

paragraph 1(a) of the dispositive portion of the original decision.
Furnish copy of this supplemental decision to all parties

As regard Section 3(i) of R.A. No. 6395 (An Act Revising the
Charter of the National Power Corporation), it is submitted that the same provision is
not applicable. There is nothing in Section 3(i) of said law governing claims involving
tunnels. The same provision is applicable to those projects or facilities on the
surface of the land, that can easily be discovered, without any mention about the
claims involving tunnels, particularly those surreptitiously constructed beneath the
surface of the land, as in the instant case.

immediately.
SO ORDERED.
On its part, NPC appealed to the CA on August 25, 1999. 51[8]
Earlier, on August 18, 1999, the Heirs of Macabangkit filed an urgent motion for
execution of judgment pending appeal.52[9] The RTC granted the motion and issued a writ of

50

Now, while it is true that Republic Act No. 6395 authorizes

NAPOCOR to take water from any public stream, river, creek, lake, spring or
waterfall in the Philippines for the realization of the purposes specified therein for its

51

53

52

54
29

creation; to intercept and divert the flow of waters from lands of riparian owners (in
this case, the Heirs), and from persons owning or interested in water which are or
may be necessary to said purposes, the same Act expressly mandates the payment
of just compensation.

Ruling
We uphold the liability of NPC for payment of just compensation.

WHEREFORE, premises considered, the instant appeal is hereby

DENIED for lack of merit. Accordingly, the appealed Decision dated August 13,
1999, and the supplemental Decision dated August 18, 1999, are hereby
AFFIRMED in toto.

1.
Factual findings of the RTC,
when affirmed by the CA, are binding
The existence of the tunnel underneath the land of the Heirs of Macabangkit, being
a factual matter, cannot now be properly reviewed by the Court, for questions of fact are
beyond the pale of a petition for review on certiorari. Moreover, the factual findings and
determinations by the RTC as the trial court are generally binding on the Court, particularly
after the CA affirmed them.56[13] Bearing these doctrines in mind, the Court should rightly
dismiss NPCs appeal.

SO ORDERED.55[12]
Issue
NPC has come to the Court, assigning the lone error that:
THE APPELLATE COURT ERRED ON A QUESTION OF LAW WHEN IT
AFFIRMED THE DECISION AND SUPPLEMENTAL DECISION OF THE COURT A
QUO DIRECTING AND ORDERING PETITIONER TO PAY JUST COMPENSATION
TO RESPONDENTS.

NPC argues, however, that this appeal should not be dismissed because the Heirs
of Macabangkit essentially failed to prove the existence of the underground tunnel. It insists
that the topographic survey map and the right-of-way map presented by the Heirs of
Macabangkit did not at all establish the presence of any underground tunnel.

NPC reiterates that witnesses Enterone and Sacedon lacked personal knowledge
about the construction and existence of the tunnel and were for that reason not entitled to
credence; and that the topographic and relocation maps prepared by Sacedon should not be a
basis to prove the existence and location of the tunnel due to being self-serving.

NPC still fails to convince.

Even assuming, for now, that the Court may review the factual findings of the CA
and the RTC, for NPC to insist that the evidence on the existence of the tunnel was not
adequate and incompetent remains futile. On the contrary, the evidence on the tunnel was
substantial, for the significance of the topographic survey map and the sketch map (as
indicative of the extent and presence of the tunnel construction) to the question on the
existence of the tunnel was strong, as the CA correctly projected in its assailed decision, viz:

NPC contends that the CA should have applied Section 3(i) of Republic Act No.
6395, which provided a period of only five years from the date of the construction within which
the affected landowner could bring a claim against it; and that even if Republic Act No. 6395
should be inapplicable, the action of the Heirs of Macabangkit had already prescribed due to
the underground tunnel being susceptible to acquisitive prescription after the lapse of 10 years
pursuant to Article 620 of the Civil Code due to its being a continuous and apparent legal
easement under Article 634 of the Civil Code.

(2) Whether the Heirs of Macabangkits right to claim just compensation had
prescribed under section 3(i) of Republic Act No. 6395, or, alternatively, under Article
620 and Article 646 of the Civil Code.

Among the pieces of documentary evidence presented showing the

existence of the said tunnel beneath the subject property is the topographic survey
map. The topographic survey map is one conducted to know about the location and
elevation of the land and all existing structures above and underneath it. Another is
the Sketch Map which shows the location and extent of the land traversed or
affected by the said tunnel. These two (2) pieces of documentary evidence
readily point the extent and presence of the tunnel construction coming from
the power cavern near the small man-made lake which is the inlet and
approach tunnel, or at a distance of about two (2) kilometers away from the
land of the plaintiffs-appellees, and then traversing the entire and the whole
length of the plaintiffs-appellees property, and the outlet channel of the tunnel
is another small man-made lake. This is a sub-terrain construction, and
considering that both inlet and outlet are bodies of water, the tunnel can hardly be

55

56

The issues for resolution are, therefore, as follows:

(1) Whether the CA and the RTC erred in holding that there was an
underground tunnel traversing the Heirs of Macabangkits land constructed by NPC;
and

30

noticed. All constructions done were beneath the surface of the plaintiffs-appellees
property. This explains why they could never obtain any knowledge of the existence
of such tunnel during the period that the same was constructed and installed
beneath their property.57[14]

It bears noting that NPC did not raise any issue against or tender any contrary
comment on the ocular inspection report.
2.
Five-year prescriptive period under Section 3(i) of Republic Act No. 6395 does
not apply to claims for just compensation

The power cavern and the inlet and outlet channels established the presence of the
underground tunnel, based on the declaration in the RTC by Sacedon, a former employee of
the NPC.58[15] It is worthy to note that NPC did not deny the existence of the power cavern,
and of the inlet and outlet channels adverted to and as depicted in the topographic survey
map and the sketch map. The CA cannot be faulted for crediting the testimony of Sacedon
despite the effort of NPC to discount his credit due to his not being an expert witness, simply
because Sacedon had personal knowledge based on his being NPCs principal engineer and
supervisor tasked at one time to lay out the tunnels and transmission lines specifically for the
hydroelectric projects,59[16] and to supervise the construction of the Agus 1 Hydroelectric
Plant itself60[17] from 1978 until his retirement from NPC.61[18] Besides, he declared that he
personally experienced the vibrations caused by the rushing currents in the tunnel, particularly
near the outlet channel.62[19] Under any circumstances, Sacedon was a credible and
competent witness.

The CA held that Section 3(i) of Republic Act No. 6395 had no application to this
action because it covered facilities that could be easily discovered, not tunnels that were
inconspicuously constructed beneath the surface of the land. 64[21]
NPC disagrees, and argues that because Article 635 65[22] of the Civil Code directs
the application of special laws when an easement, such as the underground tunnel, was
intended for public use, the law applicable was Section 3(i) of Republic Act No. 6395, as
amended, which limits the action for recovery of compensation to five years from the date of
construction. It posits that the five-year prescriptive period already set in due to the
construction of the underground tunnel having been completed in 1979 yet.

The ocular inspection actually confirmed the existence of the tunnel underneath the
land of the Heirs of Macabangkit. Thus, the CA observed:

Without necessarily adopting the reasoning of the CA, we uphold its conclusion that
prescription did not bar the present action to recover just compensation.

More so, the Ocular inspection conducted on July 23, 1998 further
bolstered such claim of the existence and extent of such tunnel. This was conducted
by a team composed of the Honorable Presiding Judge of the Regional Trial Court,
Branch 01, Lanao del Norte, herself and the respective lawyers of both of the parties
and found that, among others, said underground tunnel was constructed
beneath the subject property.63[20]

Section 3 (i) of Republic Act No. 6395, the cited law, relevantly provides:
Section 3. Powers and General Functions of the Corporation.
The powers, functions, rights and activities of the Corporation shall be the following:

61

xxx
To construct works across, or otherwise, any stream, watercourse, canal, ditch,
flume, street, avenue, highway or railway of private and public ownership, as the
location of said works may require:Provided, That said works be constructed in such
a manner as not to endanger life or property; And provided, further, That the stream,
watercourse, canal ditch, flume, street, avenue, highway or railway so crossed or
intersected be restored as near as possible to their former state, or in a manner not
to impair unnecessarily their usefulness. Every person or entity whose right of way
or property is lawfully crossed or intersected by said works shall not obstruct any
such crossings or intersection and shall grant the Board or its representative, the
proper authority for the execution of such work. The Corporation is hereby given the
right of way to locate, construct and maintain such works over and throughout the
lands owned by the Republic of the Philippines or any of its branches and political

62

64

63

65

(i)

57
58
59
60

31

subdivisions. The Corporation or its representative may also enter upon private
property in the lawful performance or prosecution of its business and purposes,
including the construction of the transmission lines thereon; Provided, that the
owner of such property shall be indemnified for any actual damage caused
thereby;Provided, further, That said action for damages is filed within five years
after the rights of way, transmission lines, substations, plants or other
facilities shall have been established; Provided, finally, That after said period, no
suit shall be brought to question the said rights of way, transmission lines,
substations, plants or other facilities;

just is used to intensify 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.70[27] On the other hand, the latter action seeks to vindicate a legal wrong through
damages, which may be actual, moral, nominal, temperate, liquidated, or exemplary. When a
right is exercised in a manner not conformable with the norms enshrined in Article 19 71[28] and
like provisions on human relations in the Civil Code, and the exercise results to the damage of
another, a legal wrong is committed and the wrongdoer is held responsible. 72[29]
The two actions are radically different in nature and purpose. The action to recover
just compensation is based on the Constitution73[30] while the action for damages is
predicated on statutory enactments. Indeed, the former arises from the exercise by the State
of its power of eminent domain against private property for public use, but the latter emanates
from the transgression of a right. The fact that the owner rather than the expropriator brings
the former does not change the essential nature of the suit as an inverse condemnation, 74[31]
for the suit is not based on tort, but on the constitutional prohibition against the taking of
property without just compensation.75[32] It would very well be contrary to the clear language
of the Constitution to bar the recovery of just compensation for private property taken for a
public use solely on the basis of statutory prescription.

A cursory reading shows that Section 3(i) covers the construction of works across,
or otherwise, any stream, watercourse, canal, ditch, flume, street, avenue, highway or railway
of private and public ownership, as the location of said works may require. It is notable that
Section 3(i) includes no limitation except those enumerated after the term works. Accordingly,
we consider the term works as embracing all kinds of constructions, facilities, and other
developments that can enable or help NPC to meet its objectives of developing hydraulic
power expressly provided under paragraph (g) of Section 3. 66[23] The CAs restrictive
construal of Section 3(i) as exclusive of tunnels was obviously unwarranted, for the provision
applies not only to development works easily discoverable or on the surface of the earth but
also to subterranean works like tunnels. Such interpretation accords with the fundamental
guideline in statutory construction that when the law does not distinguish, so must we not. 67
[24] Moreover, when the language of the statute is plain and free from ambiguity, and
expresses a single, definite, and sensible meaning, that meaning is conclusively presumed to
be the meaning that the Congress intended to convey. 68[25]

Due to the need to construct the underground tunnel, NPC should have first moved
to acquire the land from the Heirs of Macabangkit either by voluntary tender to purchase or
through formal expropriation proceedings. In either case, NPC would have been liable to pay
to the owners the fair market value of the land, for Section 3(h) of Republic Act No. 6395
expressly requires NPC to pay the fair market value of such property at the time of the taking,
thusly:

Even so, we still cannot side with NPC.

(h) To acquire, promote, hold, transfer, sell, lease, rent, mortgage,

encumber and otherwise dispose of property incident to, or necessary,
convenient or proper to carry out the purposes for which the Corporation was
created: Provided, That in case a right of way is necessary for its transmission

We rule that the prescriptive period provided under Section 3(i) of Republic Act No.
6395 is applicable only to an action for damages, and does not extend to an action to recover
just compensation like this case. Consequently, NPC cannot thereby bar the right of the Heirs
of Macabangkit to recover just compensation for their land.

69

The action to recover just compensation from the State or its expropriating agency
differs from the action for damages. The former, also known as inverse condemnation, has the
objective to recover the value of property taken in fact by the governmental defendant, even
though no formal exercise of the power of eminent domain has been attempted by the taking
agency.69[26] Just compensation is the full and fair equivalent of the property taken from its
owner by the expropriator. The measure is not the takers gain, but the owners loss. The word

70
71
72

66

73

67

74

68

75
32

lines, easement of right of way shall only be sought: Provided, however, That in
case the property itself shall be acquired by purchase, the cost thereof shall
be the fair market value at the time of the taking of such property.

of the easement is not without expense. The underground tunnels impose limitations
on respondents use of the property for an indefinite period and deprive them of its
ordinary use. Based upon the foregoing, respondents are clearly entitled to the
payment of just compensation. Notwithstanding the fact that petitioner only
occupies the sub-terrain portion, it is liable to pay not merely an easement fee
but rather the full compensation for land. This is so because in this case, the
nature of the easement practically deprives the owners of its normal beneficial
use. Respondents, as the owner of the property thus expropriated, are 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.78[35]

This was what NPC was ordered to do in National Power Corporation v. Ibrahim, 76
[33] where NPC had denied the right of the owners to be paid just compensation despite their
land being traversed by the underground tunnels for siphoning water from Lake Lanao needed
in the operation of Agus II, Agus III, Agus IV, Agus VI and Agus VII Hydroelectric Projects in
Saguiran, Lanao del Sur, in Nangca and Balo-I in Lanao del Norte and in Ditucalan and
Fuentes in Iligan City. There, NPC similarly argued that the underground tunnels constituted a
mere easement that did not involve any loss of title or possession on the part of the property
owners, but the Court resolved against NPC, to wit:

Here, like in National Power Corporation v. Ibrahim, NPC constructed a tunnel

underneath the land of the Heirs of Macabangkit without going through formal expropriation
proceedings and without procuring their consent or at least informing them beforehand of the
construction. NPCs construction adversely affected the owners rights and interests because
the subterranean intervention by NPC prevented them from introducing any developments on
the surface, and from disposing of the land or any portion of it, either by sale or mortgage.

Petitioner contends that the underground tunnels in this case constitute an

easement upon the property of the respondents which does not involve any loss of
title or possession. The manner in which the easement was created by petitioner,
however, violates the due process rights of respondents as it was without notice and
indemnity to them and did not go through proper expropriation proceedings.
Petitioner could have, at any time, validly exercised the power of eminent domain to
acquire the easement over respondents property as this power encompasses not
only the taking or appropriation of title to and possession of the expropriated
property but likewise covers even the imposition of a mere burden upon the owner
of the condemned property. Significantly, though, landowners cannot be deprived of
their right over their land until expropriation proceedings are instituted in court. The
court must then see to it that the taking is for public use, that there is payment of just
compensation and that there is due process of law. 77[34]

Did such consequence constitute taking of the land as to entitle the owners to just
compensation?
We agree with both the RTC and the CA that there was a full taking on the part of
NPC, notwithstanding that the owners were not completely and actually dispossessed. It is
settled that the taking of private property for public use, to be compensable, need not be an
actual physical taking or appropriation.79[36] Indeed, the expropriators action may be short of
acquisition of title, physical possession, or occupancy but may still amount to a taking. 80[37]
Compensable taking includes destruction, restriction, diminution, or interruption of the rights of
ownership or of the common and necessary use and enjoyment of the property in a lawful
manner, lessening or destroying its value.81[38] It is neither necessary that the owner be
wholly deprived of the use of his property,82[39] nor material whether the property is removed
from the possession of the owner, or in any respect changes hands. 83[40]

3.
NPCs construction of the tunnel
constituted taking of the land, and
entitled owners to just compensation

78

The Court held in National Power Corporation v. Ibrahim that NPC was liable to pay
not merely an easement fee but rather the full compensation for land traversed by the
underground tunnels, viz:

79

In disregarding this procedure and failing to recognize respondents

ownership of the sub-terrain portion, petitioner took a risk and exposed itself to
greater liability with the passage of time. It must be emphasized that the acquisition

80

76

82

77

83

81

33

a measure of simple justice and ordinary fairness to them, therefore, reckoning just
compensation on the value at the time the owners commenced these inverse condemnation
proceedings is entirely warranted.

As a result, NPC should pay just compensation for the entire land. In that regard,
the RTC pegged just compensation at P500.00/square meter based on its finding on what the
prevailing market value of the property was at the time of the filing of the complaint, and the
CA upheld the RTC.

In National Power Corporation v. Court of Appeals,85[42] a case that involved the

similar construction of an underground tunnel by NPC without the prior consent and
knowledge of the owners, and in which we held that the basis in fixing just compensation
when the initiation of the action preceded the entry into the property was the time of the filing
of the complaint, not the time of taking,86[43] we pointed out that there was no taking when the
entry by NPC was made without intent to expropriate or was not made under warrant or color
of legal authority.

We affirm the CA, considering that NPC did not assail the valuation in the CA and in
this Court. NPCs silence was probably due to the correctness of the RTCs valuation after
careful consideration and weighing of the parties evidence, as follows:
The matter of what is just compensation for these parcels of land is a matter
of evidence. These parcels of land is (sic) located in the City of Iligan, the Industrial
City of the South. Witness Dionisio Banawan, OIC- City Assessors Office, testified,
Within that area, that area is classified as industrial and residential. That plaintiffs
land is adjacent to many subdivisions and that is within the industrial classification.
He testified and identified Exhibit AA and AA-1, a Certification, dated April 4,
1997, showing that the appraised value of plaintiffs land ranges from P400.00 to
P500.00 per square meter (see, TSN, testimony of Dionisio Banawan, pp. 51, 57,
and 71, February 9, 1999). Also, witness Banawan, testified and identified Two (2)
Deeds of Sale, marked as Exhibit AA-2 and AA-3,[] showing that the appraised
value of the land adjoining or adjacent to plaintiff land ranges from P700.00 to
P750.00 per square meter. As between the much lower price of the land as testified
by defendants witness Gregorio Enterone, and that of the City Assessor of Iligan
City, the latter is more credible. Considering however, that the appraised value of the
land in the area as determined by the City Assessors Office is not uniform, this
Court, is of the opinion that the reasonable amount of just compensation of plaintiffs
land should be fixed at FIVE HUNDRED (500.00) PESOS, per square meter. xxx. 84
[41]

4.
Awards for rentals, moral damages, exemplary
damages, and attorneys fees are deleted
for insufficiency of factual and legal bases
The CA upheld the RTCs granting to the Heirs of Macabangkit of rentals of P
30,000.00/month from 1979 up to July 1999 with 12% interest per annum by finding NPC
guilty of bad faith in taking possession of the land to construct the tunnel without their
knowledge and consent.
Granting rentals is legally and factually bereft of justification, in light of the taking of
the land being already justly compensated. Conformably with the ruling in Manila International
Airport Authority v. Rodriguez,87[44] in which the award of interest was held to render the grant
of back rentals unwarranted, we delete the award of back rentals and in its place prescribe
interest of 12% interest per annum from November 21, 1997, the date of the filing of the
complaint, until the full liability is paid by NPC. The imposition of interest of 12% interest per
annum follows a long line of pertinent jurisprudence,88[45] whereby the Court has fixed the rate
of interest on just compensation at 12% per annum whenever the expropriator has not
immediately paid just compensation.

The RTC based its fixing of just compensation ostensibly on the prevailing market
value at the time of the filing of the complaint, instead of reckoning from the time of the taking
pursuant to Section 3(h) of Republic Act No. 6395. The CA did not dwell on the reckoning
time, possibly because NPC did not assign that as an error on the part of the RTC.

The RTC did not state any factual and legal justifications for awarding to the Heirs of
Macabangkit moral and exemplary damages each in the amount of P200,000.00. The awards
just appeared in the fallo of its decision. Neither did the CA proffer any justifications for
sustaining the RTC on the awards. We consider the omissions of the lower courts as pure

We rule that the reckoning value is the value at the time of the filing of the complaint,
as the RTC provided in its decision. Compensation that is reckoned on the market value
prevailing at the time either when NPC entered or when it completed the tunnel, as NPC
submits, would not be just, for it would compound the gross unfairness already caused to the
owners by NPCs entering without the intention of formally expropriating the land, and without
the prior knowledge and consent of the Heirs of Macabangkit. NPCs entry denied elementary
due process of law to the owners since then until the owners commenced the inverse
condemnation proceedings. The Court is more concerned with the necessity to prevent NPC
from unjustly profiting from its deliberate acts of denying due process of law to the owners. As

85
86
87

84

88
34

legal error that we feel bound to correct even if NPC did not submit that for our consideration.
There was, to begin with, no factual and legal bases mentioned for the awards. It is never trite
to remind that moral and exemplary damages, not by any means liquidated or assessed as a
matter of routine, always require evidence that establish the circumstances under which the
claimant is entitled to them. Moreover, the failure of both the RTC and the CA to render the
factual and legal justifications for the moral and exemplary damages in the body of their
decisions immediately demands the striking out of the awards for being in violation of the
fundamental rule that the decision must clearly state the facts and the law on which it is
based. Without the factual and legal justifications, the awards are exposed as the product of
conjecture and speculation, which have no place in fair judicial adjudication.

NPC converted the fees to extraordinary. We have to disagree with the RTC thereon, and we
express our discomfort that the CA did not do anything to excise the clearly erroneous and
unfounded grant.
An award of attorneys fees has always been the exception rather than the rule. To
start with, attorneys fees are not awarded every time a party prevails in a suit. 90[47] Nor
should an adverse decision ipso facto justify an award of attorneys fees to the winning party. 91
[48] The policy of the Court is that no premium should be placed on the right to litigate. 92[49]
Too, such fees, as part of damages, are assessed only in the instances specified in Art. 2208,
Civil Code.93[50] Indeed, attorneys fees are in the nature of actual damages. 94[51] But even
when a claimant is compelled to litigate with third persons or to incur expenses to protect his
rights, attorneys fees may still be withheld where no sufficient showing of bad faith could be
reflected in a partys persistence in a suit other than an erroneous conviction of the
righteousness of his cause.95[52] And, lastly, the trial court must make express findings of fact
and law that bring the suit within the exception. What this demands is that the factual, legal or
equitable justifications for the award must be set forth

We also reverse and set aside the decree of the RTC for NPC to pay to the Heirs of
Macabangkit the sum equivalent to 15% of the total amount awarded, as attorneys fees, and
to pay the cost. The body of the decision did not state the factual and legal reasons why NPC
was liable for attorneys fees. The terse statement found at the end of the body of the RTCs
decision, stating: xxx The contingent attorneys fee is hereby reduced from 20% to only 15%
of the total amount of the claim that may be awarded to plaintiffs, without more, did not
indicate or explain why and how the substantial liability of NPC for attorneys fees could have
arisen and been determined.
In assessing attorneys fees against NPC and in favor of the respondents, the RTC
casually disregarded the fundamental distinction between the two concepts of attorneys fees
the ordinary and the extraordinary. These concepts were aptly distinguished in Traders
Royal Bank Employees Union-Independent v. NLRC,89[46] thuswise:

not only in the fallo but also in the text of the decision, or else, the award should be thrown out
for being speculative and conjectural.96[53]
Sound policy dictates that even if the NPC failed to raise the issue of attorneys fees,
we are not precluded from correcting the lower courts patently erroneous application of the
law.97[54] Indeed, the Court, in supervising the lower courts, possesses the ample authority to
review legal matters like this one even if not specifically raised or assigned as error by the
parties.

There are two commonly accepted concepts of attorneys fees, the so-called
ordinary and extraordinary. In its ordinary concept, an attorneys fee is the
reasonable compensation paid to a lawyer by his client for the legal services he has
rendered to the latter. The basis of this compensation is the fact of his employment
by and his agreement with the client.

90

In its extraordinary concept, an attorneys fee is an indemnity for damages

ordered by the court to be paid by the losing party in a litigation. The basis of this is
any of the cases provided by law where such award can be made, such as those
authorized in Article 2208, Civil Code, and is payable not to the lawyer but to the
client, unless they have agreed that the award shall pertain to the lawyer as
additional compensation or as part thereof.

91
92
93
94

By referring to the award as contingency fees, and reducing the award from 20% to
15%, the RTC was really referring to a supposed agreement on attorneys fees between the
Heirs of Macabangkit and their counsel. As such, the concept of attorneys fees involved was
the ordinary. Yet, the inclusion of the attorneys fees in the judgment among the liabilities of

95
96

89

97
35

2005,107[64] the Court directed Atty. Dibaratun to enter his appearance herein. He complied
upon filing the comment.108[65]

5.
Attorneys fees under quantum meruit principle
are fixed at 10% of the judgment award

Amir Macabangkit confirmed Atty. Dibaratuns representation through an ex parte

manifestation that he filed in his own behalf and on behalf of his siblings Mongkoy and Putri. 109
[66] Amir reiterated his manifestation on March 6, 2006,110[67] and further imputed malpractice
to Atty. Ballelos for having filed an entry of appearance bearing Amirs forged signature and for
plagiarism, i.e., copying verbatim the arguments contained in the pleadings previously filed by
Atty. Dibaratun.111[68]

Based on the pending motions of Atty. Macarupung Dibaratun and Atty. Manuel D.
Ballelos to assert their respective rights to attorneys fees, both contending that they
represented the Heirs of Macabangkit in this case, a conflict would ensue from the finality of
the judgment against NPC.

On September 11, 2008, Atty. Ballelos submitted two motions, to wit: (a) a
manifestation and motion authorizing a certain Abdulmajeed Djamla to receive his attorneys
fees equivalent of 15% of the judgment award,112[69] and (b) a motion to register his attorneys
lien that he claimed was contingent.113[70]

A look at the history of the legal representation of the Heirs of Macabangkit herein
provides a helpful predicate for resolving the conflict.
Atty. Dibaratun was the original counsel of the Heirs of Macabangkit. When the
appeal was submitted for decision in the CA,98[55] Atty. Ballelos filed his entry of
appearance,99[56] and a motion for early decision.100[57] Atty. Ballelos subsequently filed
also a manifestation,101[58] supplemental manifestation,102[59]

Both Atty. Dibaratun and Atty. Ballelos posited that their entitlement to attorneys
fees was contingent. Yet, a contract for a contingent fees is an agreement in writing by which
the fees, usually a fixed percentage of what may be recovered in the action, are made to
depend upon the success in the effort to enforce or defend a supposed right. Contingent fees
depend upon an express contract, without which the attorney can only recover on the basis of
quantum meruit.114[71] With neither Atty. Dibaratun nor Atty. Ballelos presenting a written
agreement bearing upon their supposed contingent fees, the only way to determine their right
to appropriate attorneys fees is to apply the principle of quantum meruit.

reply,103[60] and ex parte motion reiterating the motion for early decision.104[61] It appears that
a copy of the CAs decision was furnished solely to Atty. Ballelos. However, shortly before the
rendition of the decision, Atty. Dibaratun filed in the CA a motion to register attorneys lien, 105
[62] alleging that he had not withdrawn his appearance and had not been aware of the entry of
appearance by Atty. Ballelos. A similar motion was also received by the Court from Atty.
Dibaratun a few days after the petition for review was filed. 106[63] Thus, on February 14,

Quantum meruit literally meaning as much as he deserves is used as basis

for determining an attorneys professional fees in the absence of an express agreement. 115[72]

98

107

99

108

100

109

101

110

102

111

103

112

104

113

105

114

106

115
36

The recovery of attorneys fees on the basis of quantum meruit is a device that prevents an
unscrupulous client from running away with the fruits of the legal services of counsel without
paying for it and also avoids unjust enrichment on the part of the attorney himself. 116[73] An
attorney must show that he is entitled to reasonable compensation for the effort in pursuing
the clients cause, taking into account certain factors in fixing the amount of legal fees. 117[74]

purpose. However, it will be just and equitable to now assess and fix the attorneys fees of
both attorneys in order that the resolution of a comparatively simple controversy, as Justice
Regalado put it in Traders Royal Bank Employees Union-Independent v. NLRC, 119[76] would
not be needlessly prolonged, by taking into due consideration the accepted guidelines and so
much of the pertinent data as are extant in the records.

Rule 20.01 of the Code of Professional Responsibility lists the guidelines for
determining the proper amount of attorney fees, to wit:

Atty. Dibaratun and Atty. Ballelos each claimed attorneys fees equivalent to 15% of
the principal award of P113,532,500.00, which was the amount granted by the RTC in its
decision. Considering that the attorneys fees will be defrayed by the Heirs of Macabangkit out
of their actual recovery from NPC, giving to each of the two attorneys 15% of the principal
award as attorneys fees would be excessive and unconscionable from the point of view of the
clients. Thus, the Court, which holds and exercises the power to fix attorneys fees on a
quantum meruit basis in the absence of an express written agreement between the attorney
and the client, now fixes attorneys fees at 10% of the principal award of P113,532,500.00.
Whether it is Atty. Dibaratun or Atty. Ballelos, or both, who should receive attorneys
fees from the Heirs of Macabangkit is a question that the Court must next determine and settle
by considering the amount and quality of the work each performed and the results each
obtained.

Rule 20.1 A lawyer shall be guided by the following factors in determining

his fees:
a)

The time spent and the extent of the services rendered or required;

b)

The novelty and difficult of the questions involved;

c)

The important of the subject matter;

d)

The skill demanded;

Atty. Dibaratun, the attorney from the outset, unquestionably carried the bulk of the
legal demands of the case. He diligently prepared and timely filed in behalf of the Heirs of
Macabangkit every pleading and paper necessary in the full resolution of the dispute, starting
from the complaint until the very last motion filed in this Court. He consistently appeared
during the trial, and examined and cross-examined all the witnesses presented at that stage of
the proceedings. The nature, character, and substance of each pleading and the motions he
prepared for the Heirs of Macabangkit indicated that he devoted substantial time and energy
in researching and preparing the case for the trial. He even advanced P250,000.00 out of his
own pocket to defray expenses from the time of the filing of the motion to execute pending
appeal until the case reached the Court.120[77] His representation of all the Heirs of
Macabangkit was not denied by any of them.

e) The probability of losing other employment as a result of acceptance of

the proffered case;
f)
The customary charges for similar services and the schedule of fees of
the IBP chapter to which he belongs;
g) The amount involved in the controversy and the benefits resulting to
the client from the service;
h)

The contingency or certainty of compensation;

i)

The character of the employment, whether occasional or established;

j)

The professional standing of the lawyer.

We note that Atty. Dibaratun possessed some standing in the legal profession and in
his local community. He formerly served as a member of the Board of Director of the
Integrated Bar of the Philippines (IBP), Lanao del Norte-Iligan City Chapter, and was an IBP
national awardee as Best Legal Aid Committee Chairman. He taught at Mindanao State
University College of Law Extension. He was a Municipal Mayor of Matungao, Lanao del
Norte, and was enthroned Sultan a Gaus.

and

In the event of a dispute as to the amount of fees between the attorney and his
client, and the intervention of the courts is sought, the determination requires that there be
evidence to prove the amount of fees and the extent and value of the services rendered,
taking into account the facts determinative thereof. 118[75] Ordinarily, therefore, the
determination of the attorneys fees on quantum meruit is remanded to the lower court for the

118

116

119

117

120
37

In contrast, not much about the character and standing of Atty. Ballelos, as well as
the nature and quality of the legal services he rendered for the Heirs of Macabangkit are in
the records. The motions he filed in the

(c) The award of 15% attorneys fees decreed to be paid by National Power Corporation
to the Heirs of Macabangkit is DELETED.
The Court PARTLY GRANTS the motion to register attorneys lien filed by Atty.
Macarupung Dibaratun, and FIXES Atty. Dibaratuns attorneys fees on the basis of quantum
meruit at 10% of the principal award of P113,532,500.00.

Court and in the CA lacked enlightening research and were insignificant to the success of the
clients cause. His legal service, if it can be called that, manifested no depth or assiduousness,
judging from the quality of the pleadings from him. His written submissions in the case
appeared either to have been lifted verbatim from the pleadings previously filed by Atty.
Dibaratun, or to have been merely quoted from the decisions and resolutions of the RTC and
the CA. Of the Heirs of Macabangkit, only Cebu, Batowa-an, Sayana, Nasser, Manta,
Mongkoy121[78] and Edgar gave their consent to Atty. Ballelos to appear in their behalf in the
CA, which he did despite Atty. Dibaratun not having yet filed any withdrawal of his
appearance. The Court did not receive any notice of appearance for the Heirs of Macabangkit
from Atty. Ballelos, but that capacity has meanwhile become doubtful in the face of Amirs
strong denial of having retained him.

The motion to register attorneys lien of Atty. Manuel D. Ballelos is PARTLY

GRANTED, and Atty. Ballelos is DECLARED ENTITLED TO RECOVER from Cebu, Batowaan, Sayana, Nasser, Manta and Edgar, all surnamed Macabangkit, the amount of P5,000.00
as attorneys fees on the basis of quantum meruit.
Costs of suit to be paid by the petitioner.
SO ORDERED.

In fairness and justice, the Court accords full recognition to Atty. Dibaratun as the
counsel de parte of the Heirs of Macabangkit who discharged his responsibility in the
prosecution of the clients cause to its successful end. It is he, not Atty. Ballelos, who was
entitled to the full amount of attorneys fees that the clients ought to pay to their attorney.
Given the amount and quality of his legal work, his diligence and the time he expended in
ensuring the success of his prosecution of the clients cause, he deserves the recognition,
notwithstanding that some of the clients might appear to have retained Atty. Ballelos after the
rendition of a favorable judgment.122[79]

Anunciacion case
DECISION
VELASCO, JR., J.:
At the center of these two (2) Petitions for Review on Certiorari under Rule 45 is the
issue of the right of the former owners of lots acquired for the expansion of the Lahug Airport
in Cebu City to repurchase or secure reconveyance of their respective properties.

Atty. Ballelos may claim only from Cebu, Batowa-an, Sayana, Nasser, Manta and
Edgar, the only parties who engaged him. The Court considers his work in the case as very
minimal. His compensation under the quantum meruit principle is fixed at P5,000.00, and only
the Heirs of Macabangkit earlier named are liable to him.

In the first petition, docketed as G.R. No. 168770, petitioners Anunciacion vda. de
Ouano, Mario Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez (the Ouanos) seek to
nullify the Decision123[1] dated September 3, 2004 of the Court of Appeals (CA) in CA-G.R. CV
No. 78027, affirming the Order dated December 9, 2002 of the Regional Trial Court (RTC),
Branch 57 in Cebu City, in Civil Case No. CEB-20743, a suit to compel the Republic of the
Philippines and/or the Mactan-Cebu International Airport Authority (MCIAA) to reconvey to the
Ouanos a parcel of land.

WHEREFORE, the Court AFFIRMS the decision promulgated on October 5, 2004

by the Court of Appeals, subject to the following MODIFICATIONS, to wit:
(a) Interest at the rate of 12% per annum is IMPOSED on the principal amount of
P113,532,500.00 as just compensation, reckoned from the filing of the complaint on
November 21, 1997 until the full liability is paid;

The second petition, docketed as G.R. No. 168812, has the MCIAA seeking
principally to annul and set aside the Decision124[2] and Resolution125[3] dated January 14,

(b) The awards of P30,000.00 as rental fee, P200,000.00 as moral damages, and
P200,000.00 as exemplary damages are DELETED; and

123

121

124

122

125
38

2005 and June 29, 2005, respectively, of the CA in CA-G.R. CV No. 64356, sustaining the
RTC, Branch 13 in Cebu City in its Decision of October 7, 1988 in Civil Case No. CEB-18370.

3. After the payment of the foregoing financial obligation to the landowners,

directing the latter to deliver to the plaintiff the corresponding Transfer Certificates of Title to
their respective lots; and upon the presentation of the said titles to the Register of Deeds,
ordering the latter to cancel the same and to issue, in lieu thereof, new Transfer Certificates of
Title in the name of the plaintiff.129[7]

Per its October 19, 2005 Resolution, the Court ordered the consolidation of both
cases.
Except for the names of the parties and the specific lot designation involved, the
relevant factual antecedents which gave rise to these consolidated petitions are, for the most
part, as set forth in the Courts Decision126[4] of October 15, 2003, as reiterated in a
Resolution127[5] dated August 9, 2005, in G.R. No. 156273 entitled Heirs of Timoteo Moreno
and Maria Rotea v. Mactan-Cebu International Airport Authority (Heirs of Moreno), and in other
earlier related cases.128[6]

In view of the adverted buy-back assurance made by the government, the owners of
the lots no longer appealed the decision of the trial court. 130[8] Following the finality of the
judgment of condemnation, certificates of title for the covered parcels of land were issued in
the name of the Republic which, pursuant to Republic Act No. 6958, 131[9] were subsequently
transferred to MCIAA.
At the end of 1991, or soon after the transfer of the aforesaid lots to MCIAA, Lahug
Airport completely ceased operations, Mactan Airport having opened to accommodate
incoming and outgoing commercial flights. On the ground, the expropriated lots were never
utilized for the purpose they were taken as no expansion of Lahug Airport was undertaken.
This development prompted the former lot owners to formally demand from the government
that they be allowed to exercise their promised right to repurchase. The demands went
unheeded. Civil suits followed.

In 1949, the National Airport Corporation (NAC), MCIAAs predecessor agency,

pursued a program to expand the Lahug Airport in Cebu City. Through its team of negotiators,
NAC met and negotiated with the owners of the properties situated around the airport, which
included Lot Nos. 744-A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and 947 of the Banilad
Estate. As the landowners would later claim, the government negotiating team, as a
sweetener, assured them that they could repurchase their respective lands should the Lahug
Airport expansion project do not push through or once the Lahug Airport closes or its
operations transferred to Mactan-Cebu Airport. Some of the landowners accepted the
assurance and executed deeds of sale with a right of repurchase. Others, however, including
the owners of the aforementioned lots, refused to sell because the purchase price offered was
viewed as way below market, forcing the hand of the Republic, represented by the then Civil
Aeronautics Administration (CAA), as successor agency of the NAC, to file a complaint for the
expropriation of Lot Nos. 744-A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and 947, among
others, docketed as Civil Case No. R-1881 entitled Republic v. Damian Ouano, et al.

G.R. No. 168812 (MCIAA Petition)

On February 8, 1996, Ricardo L. Inocian and four others (all children of Isabel
Limbaga who originally owned six [6] of the lots expropriated); and Aletha Suico Magat and
seven others, successors-in-interest of Santiago Suico, the original owner of two (2) of the
condemned lots (collectively, the Inocians), filed before the RTC in Cebu City a complaint for
reconveyance of real properties and damages against MCIAA. The complaint, docketed as
Civil Case No. CEB-18370, was eventually raffled to Branch 13 of the court.

On December 29, 1961, the then Court of First Instance (CFI) of Cebu rendered
judgment for the Republic, disposing, in part, as follows:

On September 29, 1997, one Albert Chiongbian (Chiongbian), alleging to be the

owner of Lot Nos. 761-A and 762-A but which the Inocians were now claiming, moved and
was later allowed to intervene.

IN VIEW OF THE FOREGOING, judgment is hereby rendered:

1. Declaring the expropriation of Lots Nos. 75, 76, 76, 89, 90, 91, 92, 105, 106, 107,
108, 104, 921-A, 88, 93, 913-B, 72, 77, 916, 777-A, 918, 919, 920, 764-A, 988, 744-A, 745-A,
746, 747, 762-A, 763-A, 951, 942, 720-A, x x x and 947, included in the Lahug Airport, Cebu
City, justified in and in lawful exercise of the right of eminent domain.

During the pre-trial, MCIAA admitted the following facts:

1.
That the properties, which are the subject matter of Civil Case No. CEB-18370,
are also the properties involved in Civil Case R-1881;

xxxx

126

129

127

130

128

131
39

2.
That the purpose of the expropriation was for the expansion of the old Lahug
Airport; that the Lahug Airport was not expanded;

plaintiffs Aletha Suico Magat, Philip M. Suico, Doris S. dela Cruz, James M. Suico, Edward M.
Suico, Roselyn S. Lawsin, Rex M. Suico and Kharla Suico-Gutierrez Lots No. 942 and 947,
after plaintiffs shall have paid MCIAA the sums indicated in the decision in Civil Case No. R1881. Defendant MCIAA is likewise directed to pay the aforementioned plaintiffs the sum or
P50,000.00 as and for attorneys fees and P10,000.00 for litigation expenses.

3.
That the old Lahug Airport was closed sometime in June 1992;
4.
That the price paid to the lot owners in the expropriation case is found in the
decision of the court; and

Albert Chiongbians intervention should be, as it is hereby DENIED for utter lack of
factual basis.
With costs against defendant MCIAA.132[10]

5.
That some properties were reconveyed by the MCIAA because the previous
owners were able to secure express waivers or riders wherein the government agreed to
return the properties should the expansion of the Lahug Airport not materialize.
During trial, the Inocians adduced evidence which included the testimony of Ricardo
Inocian (Inocian) and Asterio Uy (Uy). Uy, an employee of the CAA, testified that he was a
member of the team which negotiated for the acquisition of certain lots in Lahug for the
proposed expansion of the Lahug Airport. He recalled that he acted as the
interpreter/spokesman of the team since he could speak the Cebuano dialect. He stated that
the other members of the team of negotiators were Atty. Pedro Ocampo, Atty. Lansang, and
Atty. Saligumba. He recounted that, in the course of the negotiation, their team assured the
landowners that their landholdings would be reconveyed to them in the event the Lahug
Airport would be abandoned or if its operation were transferred to the Mactan Airport. Some
landowners opted to sell, while others were of a different bent owing to the inadequacy of the
offered price.

Therefrom, MCIAA went to the CA on appeal, docketed as CA-G.R. CV No. 64356.

Ruling of the CA
On January 14, 2005, the CA rendered judgment for the Inocians, declaring them
entitled to the reconveyance of the questioned lots as the successors-in-interest of the late
Isabel Limbaga and Santiago Suico, as the case may be, who were the former registered
owners of the said lots. The decretal portion of the CAs Decision reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by
us DISMISSING the appeal filed in this case and AFFFIRMING the decision rendered by the
court a quo on October 7, 1998 in Civil Case No. CEB-18370.

Inocian testified that he and his mother, Isabel Lambaga, attended a meeting called
by the NAC team of negotiators sometime in 1947 or 1949 where he and the other
landowners were given the assurance that they could repurchase their lands at the same price
in the event the Lahug Airport ceases to operate. He further testified that they rejected the
NACs offer. However, he said that they no longer appealed the decree of expropriation due to
the repurchase assurance adverted to.

SO ORDERED.
The CA, citing and reproducing excerpts from Heirs of Moreno,133[11] virtually held
that the decision in Civil Case No. R-1881 was conditional, stating that the expropriation of
[plaintiff-appellees] lots for the proposed expansion of the Lahug Airport was ordered by the
CFI of Cebu under the impression that Lahug Airport would continue in operation. 134[12] The
condition, as may be deduced from the CFIs decision, was that should MCIAA, or its
precursor agency, discontinue altogether with the operation of Lahug Airport, then the owners
of the lots expropriated may, if so minded, demand of MCIAA to make good its verbal
assurance to allow the repurchase of the properties. To the CA, this assurance, a
demandable agreement of repurchase by itself, has been adequately established.

The MCIAA presented Michael Bacarizas (Bacarizas), who started working for
MCIAA as legal assistant in 1996. He testified that, in the course of doing research work on
the lots subject of Civil Case No. CEB-18370, he discovered that the same lots were covered
by the decision in Civil Case No. R-1881. He also found out that the said decision did not
expressly contain any condition on the matter of repurchase.
Ruling of the RTC

On September 21, 2005, the MCIAA filed with Us a petition for review of the CAs
Decision, docketed as G.R. No. 168812.

On October 7, 1998, the RTC rendered a Decision in Civil Case No. CEB-18370, the
dispositive portion of which reads as follows:

132

WHEREFORE, in view of the foregoing, judgment is hereby rendered directing

defendant Mactan Cebu International Airport Authority (MCIAA) to reconvey (free from liens
and encumbrances) to plaintiffs Ricardo Inocian, Olimpia E. Esteves, Emilia E. Bacalla,
Restituta E. Montana and Raul Inocian Lots No. 744-A, 745-A, 746, 762-A, 747, 761-A and to

133
134
40

In time, the Ouanos interposed an appeal to the CA, docketed as CA-G.R. CV No.
78027. Eventually, the appellate court rendered a Decision 137[15] dated September 3, 2004,
denying the appeal, thus:

G.R. No. 168770 (Ouano Petition)

Soon after the MCIAA jettisoned the Lahug Airport expansion project, informal
settlers entered and occupied Lot No. 763-A which, before its expropriation, belonged to the
Ouanos. The Ouanos then formally asked to be allowed to exercise their right to repurchase
the aforementioned lot, but the MCIAA ignored the demand. On August 18, 1997, the Ouanos
instituted a complaint before the Cebu City RTC against the Republic and the MCIAA for
reconveyance, docketed as Civil Case No. CEB-20743.

WHEREFORE, premises considered, the Order dated December 9, 2002, of the

Regional Trial Court, 7th Judicial Region, Branch 57, Cebu City, in Civil Case No. CEB-20743,
is hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.

Answering, the Republic and MCIAA averred that the Ouanos no longer have
enforceable rights whatsoever over the condemned Lot No. 763-A, the decision in Civil Case
No. R-1881 not having found any reversionary condition.

Explaining its case disposition, the CA stated that the decision in Civil Case No. R1881 did not state any condition that Lot No. 763-A of the Ouanosand all covered lots for
that matterwould be returned to them or that they could repurchase the same property if it
were to be used for purposes other than for the Lahug Airport. The appellate court also went
on to declare the inapplicability of the Courts pronouncement in MCIAA v. Court of Appeals,
RTC, Branch 9, Cebu City, Melba Limbago, et al.,138[16] to support the Ouanos cause, since
the affected landowners in that case, unlike the Ouanos, parted with their property not through
expropriation but via a sale and purchase transaction.

Ruling of the RTC

By a Decision dated November 28, 2000, the RTC, Branch 57 in Cebu City ruled in
favor of the Ouanos, disposing as follows:
WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in
favor of the plaintiffs, Anunciacion Vda. De Ouano, Mario P. Ouano, Leticia Ouano Arnaiz and
Cielo Ouano Martinez and against the Republic of the Philippines and Mactan Cebu
International Airport Authority (MCIAA) to restore to plaintiffs, the possession and ownership of
their land, Lot No. 763-A upon payment of the expropriation price to defendants; and

The Ouanos filed a motion for reconsideration of the CAs Decision, but was denied
per the CAs May 26, 2005 Resolution.139[17] Hence, they filed this petition in G.R. No.
168770.
The Issues

2. Ordering the Register of Deeds to effect the transfer of the Certificate of Title from
defendant Republic of the Philippines on Lot 763-A, canceling TCT No. 52004 in the name of
defendant Republic of the Philippines and to issue a new title on the same lot in the names of
Anunciacion Vda. De Ouano, Mario P. Ouano, Leticia Ouano Arnaiz and Cielo Ouano
Martinez.

G.R. No. 168812

GROUNDS FOR ALLOWANCE OF THE PETITION
l.
THE ASSAILED ISSUANCES ILLEGALLY STRIPPED THE REPUBLIC OF ITS
ABSOLUTE AND UNCONDITIONAL TITLE TO THE SUBJECT EXPROPRIATED
PROPERTIES.

No pronouncement as to costs.135[13]

ll.
THE IMPUNGED DISPOSITIONS INVALIDLY OVERTURNED THIS HONORABLE
COURTS FINAL RULINGS IN FERY V. MUNICIPALITY OF CABANATUAN, MCIAA V.
COURT OF APPEALS AND REYES V. NATIONAL HOUSING AUTHORITY.

Acting on the motion of the Republic and MCIAA for reconsideration, however, the
RTC, Branch 57 in Cebu City, presided this time by Judge Enriqueta L. Belarmino, issued, on
December 9, 2002, an Order136[14] that reversed its earlier decision of November 28, 2000
and dismissed the Ouanos complaint.
Ruling of the CA

137

135

138

136

139
41

lll. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THIS HONORABLE

COURTS RULING IN MORENO, ALBEIT IT HAS NOT YET ATTAINED FINALITY.140[18]
G.R. No. 168770

The Courts Ruling

Questions of law presented in this Petition

The Republic and MCIAAs petition in G.R. No. 168812 is bereft of merit, while the
Ouano petition in G.R. No. 168770 is meritorious.

Whether or not the testimonial evidence of the petitioners proving the promises, assurances
and representations by the airport officials and lawyers are inadmissbale under the Statute of
Frauds.

At the outset, three (3) fairly established factual premises ought to be emphasized:
First, the MCIAA and/or its predecessor agency had not actually used the lots
subject of the final decree of expropriation in Civil Case No. R-1881 for the purpose they were
originally taken by the government, i.e., for the expansion and development of Lahug Airport.

Whether or not under the ruling of this Honorable Court in the heirs of Moreno Case, and
pursuant to the principles enunciated therein, petitioners herein are entitiled to recover their
litigated property.

Second, the Lahug Airport had been closed and abandoned. A significant portion of
it had, in fact, been purchased by a private corporation for development as a commercial
complex.142[20]

Reasons for Allowances of this Petition

Respondents did not object during trial to the admissibility of petitioners testimonial evidence
under the Statute of Frauds and have thus waived such objection and are now barred from
raising the same. In any event, the Statute of Frauds is not applicable herein. Consequently,
petitioners evidence is admissible and should be duly given weight and credence, as initially
held by the trial court in its original Decision.141[19]

Third, it has been preponderantly established by evidence that the NAC, through its
team of negotiators, had given assurance to the affected landowners that they would be
entitled to repurchase their respective lots in the event they are no longer used for airport
purposes.143[21] No less than Asterio Uy, the Court noted in Heirs of Moreno, one of the
members of the CAA Mactan Legal Team, which interceded for the acquisition of the lots for
the Lahug Airports expansion, affirmed that persistent assurances were given to the
landowners to the effect that as soon as the Lahug Airport is abandoned or transferred to
Mactan, the lot owners would be able to reacquire their properties. 144[22] In Civil Case No.
CEB-20743, Exhibit G, the transcript of the deposition 145[23] of Anunciacion vda. de Ouano
covering the assurance made had been formally offered in evidence and duly considered in
the initial decision of the RTC Cebu City. In Civil Case No. CEB-18370, the trial court, on the
basis of testimonial evidence, and later the CA, recognized the reversionary rights of the suing
former lot owners or their successors in interest146[24] and resolved the case accordingly. In
point with respect to the representation and promise of the government to return the lots taken
should the planned airport expansion do not materialize is what the Court said in Heirs of
Moreno, thus:

While their respective actions against MCIAA below ended differently, the Ouanos
and the Inocians proffered arguments presented before this Court run along parallel lines,
both asserting entitlement to recover the litigated property on the strength of the Courts ruling
in Heirs of Moreno. MCIAA has, however, formulated in its Consolidated Memorandum the key
interrelated issues in these consolidated cases, as follows:
I
WHETHER ABANDONMENT OF THE PUBLIC USE FOR WHICH THE SUBJECT
PROPERTIES WERE EXPROPRIATED ENTITLES PETITIONERS OUANOS, ET AL. AND
RESPONDENTS INOCIAN, ET AL. TO REACQUIRE THEM.
II
WHETHER PETITIONERS OUANOS, ET AL. AND RESPONDENTS INOCIAN, ET AL. ARE
ENTITLED TO RECONVEYANCE OF THE SUBJECT PROPERTIES SIMPLY ON THE BASIS
OF AN ALLEGED VERBAL PROMISE OR ASSURANCE OF SOME NAC OFFICIALS THAT
THE SUBJECT PROPERTIES WILL BE RETUNRED IF THE AIRPORT PROJECT WOULD
BE ABANDONED.

142

140

145

141

146

143
144

42

This is a difficult case calling for a difficult but just solution. To begin with there exists
an undeniable historical narrative that the predecessors of respondent MCIAA had
suggested to the landowners of the properties covered by the Lahug Airport expansion
scheme that they could repurchase their properties at the termination of the airports venue.
Some acted on this assurance and sold their properties; other landowners held out and waited
for the exercise of eminent domain to take its course until finally coming to terms with
respondents predecessors that they would not appeal nor block further judgment of
condemnation if the right of repurchase was extended to them. A handful failed to prove that
they acted on such assurance when they parted with ownership of their land. 147[25] (Emphasis
supplied; citations omitted.)

undertook to reconvey the covered lots in case the Lahug airport expansion project is aborted.
Elaborating on this angle, MCIAA argues that the claim of the Ouanos and the Inocians
regarding the alleged verbal assurance of the NAC negotiating team that they can reacquire
their landholdings is barred by the Statute of Frauds. 150[28]
Under the rule on the Statute of Frauds, as expressed in Article 1403 of the Civil
Code, a contract for the sale or acquisition of real property shall be unenforceable unless the
same or some note of the contract be in writing and subscribed by the party charged. Subject
to defined exceptions, evidence of the agreement cannot be received without the writing, or
secondary evidence of its contents.
MCIAAs invocation of the Statute of Frauds is misplaced primarily because the
statute applies only to executory and not to completed, executed, or partially consummated
contracts.151[29] Carbonnel v. Poncio, et al., quoting Chief Justice Moran, explains the
rationale behind this rule, thusly:

For perspective, Heirs of Morenolater followed by MCIAA v. Tudtud (Tudtud)148[26]

and the consolidated cases at baris cast under the same factual setting and centered on
the expropriation of privately-owned lots for the public purpose of expanding the Lahug Airport
and the alleged promise of reconveyance given by the negotiating NAC officials to the private
lot owners. All the lots being claimed by the former owners or successors-in-interest of the
former owners in the Heirs of Moreno, Tudtud, and the present cases were similarly adjudged
condemned in favor of the Republic in Civil Case No. R-1881. All the claimants sought was or
is to have the condemned lots reconveyed to them upon the payment of the condemnation
price since the public purpose of the expropriation was never met. Indeed, the expropriated
lots were never used and were, in fact, abandoned by the expropriating government agencies.

x x x The reason is simple. In executory contracts there is a wide field for fraud
because unless they may be in writing there is no palpable evidence of the intention of the
contracting parties. The statute has been precisely been enacted to prevent fraud. x x x
However, if a contract has been totally or partially performed, the exclusion of parol evidence
would promote fraud or bad faith, for it would enable the defendant to keep the benefits
already derived by him from the transaction in litigation, and at the same time, evade the
obligations, responsibilities or liabilities assumed or contracted by him thereby. 152[30]
(Emphasis in the original.)

In all then, the issues and supporting arguments presented by both sets of
petitioners in these consolidated cases have already previously been passed upon, discussed
at length, and practically peremptorily resolved in Heirs of Moreno and the November 2008
Tudtud ruling. The Ouanos, as petitioners in G.R. No. 168770, and the Inocians, as
respondents in G.R. No. 168812, are similarly situated as the heirs of Moreno in Heirs of
Moreno and Benjamin Tudtud in Tudtud. Be that as it may, there is no reason why the ratio
decidendi in Heirs of Moreno and Tudtud should not be made to apply to petitioners Ouanos
and respondents Inocians such that they shall be entitled to recover their or their
predecessors respective properties under the same manner and arrangement as the heirs of
Moreno and Tudtud. Stare decisis et non quieta movere (to adhere to precedents, and not to
unsettle things which are established).149[27]

Analyzing the situation of the cases at bar, there can be no serious objection to the
proposition that the agreement package between the government and the private lot owners
was already partially performed by the government through the acquisition of the lots for the
expansion of the Lahug airport. The parties, however, failed to accomplish the more important
condition in the CFI decision decreeing the expropriation of the lots litigated upon: the
expansion of the Lahug Airport. The projectthe public purpose behind the forced property
takingwas, in fact, never pursued and, as a consequence, the lots expropriated were
abandoned. Be that as it may, the two groups of landowners can, in an action to compel
MCIAA to make good its oral undertaking to allow repurchase, adduce parol evidence to prove
the transaction.

Just like in Tudtud and earlier in Heirs of Moreno, MCIAA would foist the theory that
the judgment of condemnation in Civil Case No. R-1881 was without qualification and was
unconditional. It would, in fact, draw attention to the fallo of the expropriation courts decision
to prove that there is nothing in the decision indicating that the government gave assurance or

At any rate, the objection on the admissibility of evidence on the basis of the Statute
of Frauds may be waived if not timely raised. Records tend to support the conclusion that

147

150

148

151

149

152
43

MCIAA did not, as the Ouanos and the Inocians posit, object to the introduction of parol
evidence to prove its commitment to allow the former landowners to repurchase their
respective properties upon the occurrence of certain events.

Not to be overlooked of course is what the Court said in its Resolution disposing of
MCIAAs motion to reconsider the original ruling in Heirs of Moreno. In that resolution, We
stated that the fallo of the decision in Civil Case R-1881 should be viewed and understood in
connection with the entire text, which contemplated a return of the property taken if the airport
expansion project were abandoned. For ease of reference, following is what the Court wrote:

In a bid to deny the lot owners the right to repurchase, MCIAA, citing cases, 153[31]
points to the dispositive part of the decision in Civil Case R-1881 which, as couched, granted
the Republic absolute title to the parcels of land declared expropriated. The MCIAA is correct
about the unconditional tone of the dispositive portion of the decision, but that actuality would
not carry the day for the agency. Addressing the matter of the otherwise absolute tenor of the
CFIs disposition in Civil Case No. R-1881, the Court, in Heirs of Moreno, after taking stock of
the ensuing portion of the body of the CFIs decision, said:

Moreover, we do not subscribe to the [MCIAAs] contention that since the possibility
of the Lahug Airports closure was actually considered by the trial court, a stipulation on
reversion or repurchase was so material that it should not have been discounted by the court
a quo in its decision in Civil Case No. R-1881, if, in fact, there was one. We find it proper to
cite, once more, this Courts ruling that the fallo of the decision in Civil Case No. R-1881 must
be read in reference to the other portions of the decision in which it forms a part. A reading of
the Courts judgment must not be confined to the dispositive portion alone; rather it should be
meaningfully construed in unanimity with the ratio decidendi thereof to grasp the true intent
and meaning of a decision.156[34]

As for the public purpose of the expropriation proceeding, it cannot now be doubted.
Although Mactan Airport is being constructed, it does not take away the actual usefulness and
importance of the Lahug Airport: it is handling the air traffic of both civilian and military. From it
aircrafts fly to Mindanao and Visayas and pass thru it on their flights to the North and Manila.
Then, no evidence was adduced to show how soon is the Mactan Airport to be placed in
operation and whether the Lahug Airport will be closed immediately thereafter. It is up to the
other departments of the Government to determine said matters. The Court cannot substitute
its judgments for those of the said departments or agencies. In the absence of such showing,
the court will presume that the Lahug Airport will continue to be in operation.154[32]
(Emphasis supplied.)

The Court has, to be sure, taken stock of Fery v. Municipality of Cabanatuan,157[35]

a case MCIAA cites at every possible turn, where the Court made these observations:
If, for example, land is expropriated for a particular purpose, with the condition that
when that purpose is ended or abandoned the property shall return to its former owner, then of
course, when the purpose is terminated or abandoned, the former owner reacquires the
property so expropriated. x x x If, upon the contrary, however the decree of expropriation gives
to the entity a fee simple title, then, of course, the land becomes the absolute property of the
expropriator x x x and in that case the non-user does not have the effect of defeating the title
acquired by the expropriation proceedings x x x.

We went on to state as follows:

While the trial court in Civil Case No. R-1881 could have simply acknowledged the presence
of public purpose for the exercise of eminent domain regardless of the survival of the Lahug
Airport, the trial court in its Decision chose not to do so but instead prefixed its finding of public
purpose upon its understanding that Lahug Airport will continue to be in operation. Verily,
these meaningful statements in the body of the Decision warrant the conclusion that the
expropriated properties would remain to be so until it was confirmed that Lahug Airport was no
longer in operation. This inference further implies two (2) things: (a) after the Lahug Airport
ceased its undertaking as such and the expropriated lots were not being used for any airport
expansion project, the rights vis--vis the expropriated lots x x x as between the State and
their former owners, petitioners herein, must be equitably adjusted; and (b) the foregoing
unmistakable declarations in the body of the Decision should merge with and become an
intrinsic part of the fallo thereof which under the premises is clearly inadequate since the
dispositive portion is not in accord with the findings as contained in the body thereof. 155[33]

Fery notwithstanding, MCIAA cannot really rightfully say that it has absolute title to
the lots decreed expropriated in Civil Case No. R-1881. The correct lesson of Fery is
captured by what the Court said in that case, thus: the government acquires only such rights
in expropriated parcels of land as may be allowed by the character of its title over the
properties. In light of our disposition in Heirs of Moreno and Tudtud, the statement
immediately adverted to means that in the event the particular public use for which a parcel of
land is expropriated is abandoned, the owner shall not be entitled to recover or repurchase it
as a matter of right, unless such recovery or repurchase is expressed in or irresistibly
deducible from the condemnation judgment. But as has been determined below, the
decision in Civil Case No. R-1881 enjoined MCIAA, as a condition of approving expropriation,
to allow recovery or repurchase upon abandonment of the Lahug airport project. To borrow
from our underlying decision in Heirs of Moreno, [n]o doubt, the return or repurchase of the

153

156

154

157

155

44

condemned properties of petitioners could readily be justified as the manifest legal effect of
consequence of the trial courts underlying presumption that Lahug Airport will continue to be
in operation when it granted the complaint for eminent domain and the airport discontinued its
activities.158[36]

Covington Lumber Co., all uniformly holding that the transfer to a third party of the
expropriated real property, which necessarily resulted in the abandonment of the particular
public purpose for which the property was taken, is not a ground for the recovery of the same
by its previous owner, the title of the expropriating agency being one of fee simple.

Providing added support to the Ouanos and the Inocians right to repurchase is what
in Heirs of Moreno was referred to as constructive trust, one that is akin to the implied trust
expressed in Art. 1454 of the Civil Code,159[37] the purpose of which is to prevent unjust
enrichment.160[38] In the case at bench, the Ouanos and the Inocians parted with their
respective lots in favor of the MCIAA, the latter obliging itself to use the realties for the
expansion of Lahug Airport; failing to keep its end of the bargain, MCIAA can be compelled by
the former landowners to reconvey the parcels of land to them, otherwise, they would be
denied the use of their properties upon a state of affairs that was not conceived nor
contemplated when the expropriation was authorized. In effect, the government merely held
the properties condemned in trust until the proposed public use or purpose for which the lots
were condemned was actually consummated by the government. Since the government
failed to perform the obligation that is the basis of the transfer of the property, then the lot
owners Ouanos and Inocians can demand the reconveyance of their old properties after the
payment of the condemnation price.

Obviously, Fery was not decided pursuant to our now sacredly held constitutional
right that private property shall not be taken for public use without just compensation. It is well
settled that the taking of private property by the Governments power of eminent domain is
subject to two mandatory requirements: (1) that it is for a particular public purpose; and (2)
that just compensation be paid to the property owner. These requirements partake of the
nature of implied conditions that should be complied with to enable the condemnor to keep the
property expropriated.
More particularly, with respect to the element of public use, the expropriator
should commit to use the property pursuant to the purpose stated in the petition for
expropriation filed, failing which, it should file another petition for the new purpose. If
not, it is then incumbent upon the expropriator to return the said property to its private
owner, if the latter desires to reacquire the same. Otherwise, the judgment of expropriation
suffers an intrinsic flaw, as it would lack one indispensable element for the proper exercise of
the power of eminent domain, namely, the particular public purpose for which the property will
be devoted. Accordingly, the private property owner would be denied due process of law, and
the judgment would violate the property owners right to justice, fairness, and equity.

Constructive trusts are fictions of equity that courts use as devices to remedy any
situation in which the holder of the legal title, MCIAA in this case, may not, in good
conscience, retain the beneficial interest. We add, however, as in Heirs of Moreno, that the
party seeking the aid of equitythe landowners in this instance, in establishing the trust
must himself do equity in a manner as the court may deem just and reasonable.

In light of these premises, we now expressly hold that the taking of private property,
consequent to the Governments exercise of its power of eminent domain, is always subject to
the condition that the property be devoted to the specific public purpose for which it was
taken. Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and is
peremptorily abandoned, then the former owners, if they so desire, may seek the reversion of
the property, subject to the return of the amount of just compensation received. In such a
case, the exercise of the power of eminent domain has become improper for lack of the
required factual justification.161[39] (Emphasis supplied.)

The Court, in the recent MCIAA v. Lozada, Sr., revisited and abandoned the Fery ruling
that the former owner is not entitled to reversion of the property even if the public purpose
were not pursued and were abandoned, thus:
On this note, we take this opportunity to revisit our ruling in Fery, which involved an
expropriation suit commenced upon parcels of land to be used as a site for a public market.
Instead of putting up a public market, respondent Cabanatuan constructed residential houses
for lease on the area. Claiming that the municipality lost its right to the property taken since it
did not pursue its public purpose, petitioner Juan Fery, the former owner of the lots
expropriated, sought to recover his properties. However, as he had admitted that, in 1915,
respondent Cabanatuan acquired a fee simple title to the lands in question, judgment was
rendered in favor of the municipality, following American jurisprudence, particularly City of Fort
Wayne v. Lake Shore & M.S. RY. Co., McConihay v. Theodore Wright, and Reichling v.

Clinging to Fery, specifically the fee simple concept underpinning it, is no longer
compelling, considering the ensuing inequity such application entails. Too, the Court resolved
Fery not under the cover of any of the Philippine Constitutions, each decreeing that private
property shall not be taken for public use without just compensation. The twin elements of just
compensation and public purpose are, by themselves, direct limitations to the exercise of
eminent domain, arguing, in a way, against the notion of fee simple title. The fee does not vest
until payment of just compensation.162[40]

158
159

161

160

162
45

In esse, expropriation is forced private property taking, the landowner being really
without a ghost of a chance to defeat the case of the expropriating agency. In other words, in
expropriation, the private owner is deprived of property against his will. Withal, the mandatory
requirement of due process ought to be strictly followed, such that the state must show, at the
minimum, a genuine need, an exacting public purpose to take private property, the purpose to
be specifically alleged or least reasonably deducible from the complaint.

ownership to the government which reneges on its assurance that the private property shall
be for a public purpose may be too much. But it would be worse if the power of eminent
domain were deliberately used as a subterfuge to benefit another with influence and power in
the political process, including development firms. The mischief thus depicted is not at all farfetched with the continued application of Fery. Even as the Court deliberates on these
consolidated cases, there is an uncontroverted allegation that the MCIAA is poised to sell, if it
has not yet sold, the areas in question to Cebu Property Ventures, Inc. This provides an added
dimension to abandon Fery.

Public use, as an eminent domain concept, has now acquired an expansive

meaning to include any use that is of usefulness, utility, or advantage, or what is productive of
general benefit [of the public].163[41] If the genuine public necessitythe very reason or
condition as it wereallowing, at the first instance, the expropriation of a private land ceases
or disappears, then there is no more cogent point for the governments retention of the
expropriated land. The same legal situation should hold if the government devotes the
property to another public use very much different from the original or deviates from the
declared purpose to benefit another private person. It has been said that the direct use by the
state of its power to oblige landowners to renounce their productive possession to another
citizen, who will use it predominantly for that citizens own private gain, is offensive to our
laws.164[42]

Given the foregoing disquisitions, equity and justice demand the reconveyance by
MCIAA of the litigated lands in question to the Ouanos and Inocians. In the same token,
justice and fair play also dictate that the Ouanos and Inocian return to MCIAA what they
received as just compensation for the expropriation of their respective properties plus legal
interest to be computed from default, which in this case should run from the time MCIAA
complies with the reconveyance obligation.165[43] They must likewise pay MCIAA the
necessary expenses it might have incurred in sustaining their respective lots and the
monetary value of its services in managing the lots in question to the extent that they, as
private owners, were benefited thereby.

A condemnor should commit to use the property pursuant to the purpose stated in the petition
for expropriation, failing which it should file another petition for the new purpose. If not, then it
behooves the condemnor to return the said property to its private owner, if the latter so
desires. The government cannot plausibly keep the property it expropriated in any manner it
pleases and, in the process, dishonor the judgment of expropriation. This is not in keeping
with the idea of fair play,

In accordance with Art. 1187 of the Civil Code on mutual compensation, MCIAA may
keep whatever income or fruits it may have obtained from the parcels of land expropriated. In
turn, the Ouanos and Inocians need not require the accounting of interests earned by the
amounts they received as just compensation.166[44]
Following Art. 1189 of the Civil Code providing that [i]f the thing is improved by
its nature, or by time, the improvement shall inure to the benefit of the creditor x x x,
the Ouanos and Inocians do not have to settle the appreciation of the values of their
respective lots as part of the reconveyance process, since the value increase is merely the
natural effect of nature and time.

The notion, therefore, that the government, via expropriation proceedings, acquires
unrestricted ownership over or a fee simple title to the covered land, is no longer tenable. We
suggested as much in Heirs of Moreno and in Tudtud and more recently in Lozada, Sr.
Expropriated lands should be differentiated from a piece of land, ownership of which was
absolutely transferred by way of an unconditional purchase and sale contract freely entered by
two parties, one without obligation to buy and the other without the duty to sell. In that case,
the fee simple concept really comes into play. There is really no occasion to apply the fee
simple concept if the transfer is conditional. The taking of a private land in expropriation
proceedings is always conditioned on its continued devotion to its public purpose. As a
necessary corollary, once the purpose is terminated or peremptorily abandoned, then the
former owner, if he so desires, may seek its reversion, subject of course to the return, at the
very least, of the just compensation received.

Finally, We delete the award of PhP 50,000 and PhP 10,000, as attorneys fees and
litigation expenses, respectively, made in favor of the Inocians by the Cebu City RTC in its
judgment in Civil Case No. CEB-18370, as later affirmed by the CA. As a matter of sound
policy, no premium should be set on the right to litigate where there is no doubt about the
bona fides of the exercise of such right,167[45] as here, albeit the decision of MCIAA to resist
the former landowners claim eventually turned out to be untenable.
WHEREFORE, the petition in G.R. No. 168770 is GRANTED. Accordingly, the CA
Decision dated September 3, 2004 in CA-G.R. CV No. 78027 is REVERSED and SET ASIDE.

To be compelled to renounce dominion over a piece of land is, in itself, an already

bitter pill to swallow for the owner. But to be asked to sacrifice for the common good and yield

165

163

166

164

167
46

Mactan-Cebu International Airport Authority is ordered to reconvey subject Lot No. 763-A to
petitioners Anunciacion vda. de Ouano, Mario P. Ouano, Leticia Ouano Arnaiz, and Cielo
Ouano Martinez. The Register of Deeds of Cebu City is ordered to effect the necessary
cancellation of title and transfer it in the name of the petitioners within fifteen (15) days from
finality of judgment.
The petition of the Mactan-Cebu International Airport Authority in G.R. No. 168812 is
DENIED, and the CAs Decision and Resolution dated January 14, 2005 and June 29, 2005,
respectively, in CA-G.R. CV No. 64356 are AFFIRMED, except insofar as they awarded
attorneys fees and litigation expenses that are hereby DELETED. Accordingly, Mactan-Cebu
International Airport Authority is ordered to reconvey to respondents Ricardo L. Inocian,
Olympia E. Esteves, Emilia E. Bacalla, Restituta E. Montana, and Raul L. Inocian the litigated
Lot Nos. 744-A, 745-A, 746, 762-A, 747, and 761-A; and to respondents Aletha Suico Magat,
Philip M. Suico, Dolores S. dela Cruz, James M. Suico, Edward M. Suico, Roselyn S. Lawsin,
Rex M. Suico, and Kharla Suico-Gutierrez the litigated Lot Nos. 942 and 947. The Register of
Deeds of Cebu City is ordered to effect the necessary cancellation of title and transfer it in the
name of respondents within a period of fifteen (15) days from finality of judgment.

Does the due process clause encompass the right to be assisted by counsel during an
administrative inquiry?
Arsenio P. Lumiqued was the Regional Director of the Department of Agrarian Reform
Cordillera Autonomous Region (DAR-CAR) until President Fidel V. Ramos dismissed him from
that position pursuant to Administrative Order No. 52 dated May 12, 1993. In view of
Lumiqueds death on May 19, 1994, his heirs instituted this petition for certiorari and
mandamus, questioning such order.
The dismissal was the aftermath of three complaints filed by DAR-CAR Regional Cashier and
private respondent Jeannette Obar-Zamudio with the Board of Discipline of the DAR. The first
affidavit-complaint dated November 16, 1989,i[1] charged Lumiqued with malversation through
falsification of official documents. From May to September 1989, Lumiqued allegedly
committed at least 93 counts of falsification by padding gasoline receipts. He even submitted
a vulcanizing shop receipt worth P550.00 for gasoline bought from the shop, and another
receipt for P660.00 for a single vulcanizing job. With the use of falsified receipts, Lumiqued
claimed and was reimbursed the sum of P44,172.46. Private respondent added that Lumiqued
seldom made field trips and preferred to stay in the office, making it impossible for him to
consume the nearly 120 liters of gasoline he claimed everyday.
In her second affidavit-complaint dated November 22, 1989, ii[2] private respondent accused
Lumiqued with violation of Commission on Audit (COA) rules and regulations, alleging that
during the months of April, May, July, August, September and October, 1989, he made
unliquidated cash advances in the total amount of P116,000.00. Lumiqued purportedly
defrauded the government by deliberately concealing his unliquidated cash advances through
the falsification of accounting entries in order not to reflect on `Cash advances of other
officials under code 8-70-600 of accounting rules.
The third affidavit-complaint dated December 15, 1989, iii[3] charged Lumiqued with oppression
and harassment. According to private respondent, her two previous complaints prompted
Lumiqued to retaliate by relieving her from her post as Regional Cashier without just cause.
The three affidavit-complaints were referred in due course to the Department of Justice (DOJ)
for appropriate action. On May 20, 1992, Acting Justice Secretary Eduardo G. Montenegro
issued Department Order No. 145 creating a committee to investigate the complaints against
Lumiqued. The order appointed Regional State Prosecutor Apolinario Exevea as committee
chairman with City Prosecutor Erdolfo Balajadia and Provincial Prosecutor Felix Cabading as
members. They were mandated to conduct an investigation within thirty days from receipt of
the order, and to submit their report and recommendation within fifteen days from its
conclusion.
The investigating committee accordingly issued a subpoena directing Lumiqued to submit his
counter-affidavit on or before June 17, 1992. Lumiqued, however, filed instead an urgent
motion to defer submission of his counter-affidavit pending actual receipt of two of private
respondents complaints. The committee granted the motion and gave him a five-day
extension.
In his counter-affidavit dated June 23, 1992,iv[4] Lumiqued alleged, inter alia, that the cases
were filed against him to extort money from innocent public servants like him, and were
initiated by private respondent in connivance with a certain Benedict Ballug of Tarlac and a
certain Benigno Aquino III. He claimed that the apparent weakness of the charge was
bolstered by private respondents execution of an affidavit of desistance. v[5]

The foregoing dispositions are subject to QUALIFICATIONS, to apply to these

consolidated petitions, when appropriate, as follows:
(1) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L Inocian,
et al. in G.R. No. 168812 are ordered to return to the MCIAA the just compensation they or
their predecessors-in-interest received for the expropriation of their respective lots as stated in
Civil Case No. R-1881, within a period of sixty (60) days from finality of judgment;
(2) The MCIAA shall be entitled to RETAIN whatever fruits and income it may have
obtained from the subject expropriated lots without any obligation to refund the same to the lot
owners; and
(3) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L.
Inocian, et al. in G.R. No. 168812 shall RETAIN whatever interests the amounts they received
as just compensation may have earned in the meantime without any obligation to refund the
same to MCIAA.
SO ORDERED.
RSENIO P. LUMIQUED (deceased), Regional Director, DAR CAR, Represented by his
Heirs, Francisca A. Lumiqued, May A. Lumiqued, Arlene A. Lumiqued and Richard A.
Lumiqued, petitioners, vs. Honorable APOLINIO G. EXEVEA, ERDOLFO V. BALAJADIA and
FELIX T. CABADING, ALL Members of Investigating Committee, created by DOJ Order No.
145 on May 30, 1992; HON. FRANKLIN M. DRILON, SECRETARY OF JUSTICE, HON.
ANTONIO T. CARPIO, CHIEF Presidential Legal Adviser/Counsel; and HON. LEONARDO A.
QUISIMBING, Senior Deputy Executive Secretary of the Office of the President, and
JEANNETTE OBAR-ZAMUDIO, Private Respondent, respondents.
DECISION
ROMERO, J.:

47

On August 12, 1992, Lumiqued filed an urgent motion for additional hearing, viii[8] alleging that
he suffered a stroke on July 10, 1992. The motion was forwarded to the Office of the State
Prosecutor apparently because the investigation had already been terminated. In an order
dated September 7, 1992,ix[9] State Prosecutor Zoila C. Montero denied the motion, viz:
The medical certificate given show(s) that respondent was discharged from the Sacred Heart
Hospital on July 17, 1992, the date of the hearing, which date was upon the request of
respondent (Lumiqued). The records do not disclose that respondent advised the Investigating
committee of his confinement and inability to attend despite his discharge, either by himself or
thru counsel. The records likewise do not show that efforts were exerted to notify the
Committee of respondents condition on any reasonable date after July 17, 1992. It is herein
noted that as early as June 23, 1992, respondent was already being assisted by counsel.
Moreover an evaluation of the counter-affidavit submitted reveal(s) the sufficiency,
completeness and thoroughness of the counter-affidavit together with the documentary
evidence annexed thereto, such that a judicious determination of the case based on the
pleadings submitted is already possible.
Moreover, considering that the complaint-affidavit was filed as far back as November 16, 1989
yet, justice can not be delayed much longer.
Following the conclusion of the hearings, the investigating committee rendered a report dated
July 31, 1992,x[10] finding Lumiqued liable for all the charges against him. It made the
following findings:
After a thorough evaluation of the evidences (sic) submitted by the parties, this committee
finds the evidence submitted by the complainant sufficient to establish the guilt of the
respondent for Gross Dishonesty and Grave Misconduct.
That most of the gasoline receipts used by the respondent in claiming for the reimbursement
of his gasoline expenses were falsified is clearly established by the 15 Certified Xerox Copies
of the duplicate receipts (Annexes G-1 to G-15) and the certifications issued by the different
gasoline stations where the respondent purchased gasoline. Annexes `G-1 to `G-15 show
that the actual average purchase made by the respondent is about 8.46 liters only at a
purchase price of P50.00, in contrast to the receipts used by the respondent which reflects an
average of 108.45 liters at a purchase price of P550.00. Here, the greed of the respondent is
made manifest by his act of claiming reimbursements of more than 10 times the value of what
he actually spends. While only 15 of the gasoline receipts were ascertained to have been
falsified, the motive, the pattern and the scheme employed by the respondent in defrauding
the government has, nevertheless, been established.
That the gasoline receipts have been falsified was not rebutted by the respondent. In fact, he
had in effect admitted that he had been claiming for the payment of an average consumption
of 108.45 liters/day by justifying that this was being used by the 4 vehicles issued to his office.
Besides he also admitted having signed the receipts.
Respondents act in defrauding the government of a considerable sum of money by falsifying
receipts constitutes not only Dishonesty of a high degree but also a criminal offense for
Malversation through Falsification of Official Documents.
This committee likewise finds that the respondent have (sic) unliquidated cash advances in
the year 1989 which is in violation of established office and auditing rules. His cash advances
totalling to about P116,000.00 were properly documented. The requests for obligation of
allotments and the vouchers covering the amounts were all signed by him. The mere

Lumiqued admitted that his average daily gasoline consumption was 108.45 liters. He
submitted, however, that such consumption was warranted as it was the aggregate
consumption of the five service vehicles issued under his name and intended for the use of
the Office of the Regional Director of the DAR. He added that the receipts which were issued
beyond his region were made in the course of his travels to Ifugao Province, the DAR Central
Office in Diliman, Quezon City, and Laguna, where he attended a seminar. Because these
receipts were merely turned over to him by drivers for reimbursement, it was not his obligation
but that of auditors and accountants to determine whether they were falsified. He affixed his
signature on the receipts only to signify that the same were validly issued by the
establishments concerned in order that official transactions of the DAR-CAR could be carried
out.
Explaining why a vulcanizing shop issued a gasoline receipt, Lumiqued said that he and his
companions were cruising along Santa Fe, Nueva Vizcaya on their way to Ifugao when their
service vehicle ran out of gas. Since it was almost midnight, they sought the help of the owner
of a vulcanizing shop who readily furnished them with the gasoline they needed. The
vulcanizing shop issued its own receipt so that they could reimburse the cost of the gasoline.
Domingo Lucero, the owner of said vulcanizing shop, corroborated this explanation in an
affidavit dated June 25, 1990.vi[6] With respect to the accusation that he sought
reimbursement in the amount of P660.00 for one vulcanizing job, Lumiqued submitted that the
amount was actually only P6.60. Any error committed in posting the amount in the books of
the Regional Office was not his personal error or accountability.
To refute private respondents allegation that he violated COA rules and regulations in
incurring unliquidated cash advances in the amount of P116,000.00, Lumiqued presented a
certificationvii[7] of DAR-CAR Administrative Officer Deogracias F. Almora that he had no
outstanding cash advances on record as of December 31, 1989.
In disputing the charges of oppression and harassment against him, Lumiqued contended that
private respondent was not terminated from the service but was merely relieved of her duties
due to her prolonged absences. While admitting that private respondent filed the required
applications for leave of absence, Lumiqued claimed that the exigency of the service
necessitated disapproval of her application for leave of absence. He allegedly rejected her
second application for leave of absence in view of her failure to file the same immediately with
the head office or upon her return to work. He also asserted that no medical certificate
supported her application for leave of absence.
In the same counter-affidavit, Lumiqued also claimed that private respondent was corrupt and
dishonest because a COA examination revealed that her cash accountabilities from June 22
to November 23, 1989, were short by P30,406.87. Although private respondent immediately
returned the amount on January 18, 1990, the day following the completion of the cash
examination, Lumiqued claimed that she should be relieved from her duties and assigned to
jobs that would not require handling of cash and money matters.
Committee hearings on the complaints were conducted on July 3 and 10, 1992, but Lumiqued
was not assisted by counsel. On the second hearing date, he moved for its resetting to July
17, 1992, to enable him to employ the services of counsel. The committee granted the motion,
but neither Lumiqued nor his counsel appeared on the date he himself had chosen, so the
committee deemed the case submitted for resolution.

48

certification issued by the Administrative Officer of the DAR-CAR cannot therefore rebut these
concrete evidences (sic).
On the third complaint, this committee likewise believes that the respondents act in relieving
the complainant of her functions as a Regional Cashier on December 1, 1989 was an act of
harassment. It is noted that this was done barely two weeks after the complainant filed
charges against her (sic). The recommendation of Jose G. Medina of the Commission on
Audit came only on May 11, 1990 or almost six months after the respondents order relieving
the complainant was issued. His act in harassing a subordinate employee in retaliation to a
complaint she filed constitute(s) Gross Misconduct on the part of the respondent who is a
head of office.
The affidavits of Joseph In-uyay and Josefina Guting are of no help to the respondent. In fact,
this only show(s) that he is capable of giving bribes if only to have the cases against him
dismissed. He could not have given a certain Benigno Aquino III the sum of P10,000.00 for
any other purpose.
Accordingly, the investigating committee recommended Lumiqueds dismissal or removal from
office, without prejudice to the filing of the appropriate criminal charges against him.
Acting on the report and recommendation, former Justice Secretary Franklin M. Drilon
adopted the same in his Memorandum to President Fidel V. Ramos dated October 22, 1992.
He added that the filing of the affidavit of desistance xi[11] would not prevent the issuance of a
resolution on the matter considering that what was at stake was not only the violation of
complainants (herein private respondents) personal rights but also the competence and
fitness of the respondent (Lumiqued) to remain in public office. He opined that, in fact, the
evidence on record could call for a punitive action against the respondent on the initiative of
the DAR.
On December 17, 1992, Lumiqued filed a motion for reconsideration of the findings of the
Committee with the DOJ.xii[12] Undersecretary Ramon S. Esguerra indorsed the motion to the
investigating committee.xiii[13] In a letter dated April 1, 1993, the three-member investigating
committee informed Undersecretary Esguerra that the committee had no more authority to
act on the same (motion for reconsideration) considering that the matter has already been
forwarded to the Office of the President and that their authority under Department Order No.
145 ceased when they transmitted their report to the DOJ. xiv[14] Concurring with this view,
Undersecretary Esguerra informed Lumiqued that the investigating committee could no longer
act on his motion for reconsideration. He added that the motion was also prematurely filed
because the Office of the President (OP) had yet to act on Secretary Drilons
recommendation.xv[15]
On May 12, 1993, President Fidel V. Ramos himself issued Administrative Order No. 52 (A.O.
No. 52),xvi[16] finding Lumiqued administratively liable for dishonesty in the alteration of fifteen
gasoline receipts, and dismissing him from the service, with forfeiture of his retirement and
other benefits. Thus:
That the receipts were merely turned over to him by his drivers and that the auditor and
accountant of the DAR-CAR should be the ones to be held liable is untenable. The receipts in
question were signed by respondent for the purpose of attesting that those receipts were
validly issued by the commercial establishments and were properly disbursed and used in the
official business for which it was intended.

This Office is not about to shift the blame for all these to the drivers employed by the DARCAR as respondent would want us to do.
The OP, however, found that the charges of oppression and harassment, as well as that of
incurring unliquidated cash advances, were not satisfactorily established.
In a petition for appealxvii[17] addressed to President Ramos, Lumiqued prayed that A.O. No.
52 be reconsidered and that he be reinstated to his former position with all the benefits
accorded to him by law and existing rules and regulations. This petition was basically
premised on the affidavit dated May 27, 1993, of a certain Dwight L. Lumiqued, a former driver
of the DAR-CAR, who confessed to having authored the falsification of gasoline receipts and
attested to petitioner Lumiqueds being an honest man who had no premonition that the
receipts he (Dwight) turned over to him were altered.xviii[18]
Treating the petition for appeal as a motion for the reconsideration of A.O. No. 52, the OP,
through Senior Deputy Executive Secretary Leonardo A. Quisumbing, denied the same on
August 31, 1993.
Undaunted, Lumiqued filed a second motion for reconsideration, alleging, among other things,
that he was denied the constitutional right to counsel during the hearing. xix[19] On May 19,
1994,xx[20] however, before his motion could be resolved, Lumiqued died. On September 28,
1994,xxi[21] Secretary Quisumbing denied the second motion for reconsideration for lack of
merit.
Hence, the instant petition for certiorari and mandamus praying for the reversal of the Report
and Recommendation of the Investigating Committee, the October 22, 1992, Memorandum of
then Justice Secretary Drilon, A.O. No. 52 issued by President Ramos, and the orders of
Secretary Quisumbing. In a nutshell, it prays for the payment of retirement benefits and other
benefits accorded to deceased Arsenio Lumiqued by law, payable to his heirs; and the
backwages from the period he was dismissed from service up to the time of his death on May
19, 1994.xxii[22]
Petitioners fault the investigating committee for its failure to inform Lumiqued of his right to
counsel during the hearing. They maintain that his right to counsel could not be waived unless
the waiver was in writing and in the presence of counsel. They assert that the committee
should have suspended the hearing and granted Lumiqued a reasonable time within which to
secure a counsel of his own. If suspension was not possible, the committee should have
appointed a counsel de oficio to assist him.
These arguments are untenable and misplaced. The right to counsel, which cannot be waived
unless the waiver is in writing and in the presence of counsel, is a right afforded a suspect or
an accused during custodial investigation.xxiii[23] It is not an absolute right and may, thus, be
invoked or rejected in a criminal proceeding and, with more reason, in an administrative
inquiry. In the case at bar, petitioners invoke the right of an accused in criminal proceedings to
have competent and independent counsel of his own choice. Lumiqued, however, was not
accused of any crime in the proceedings below. The investigation conducted by the committee
created by Department Order No. 145 was for the purpose of determining if he could be held
administratively liable under the law for the complaints filed against him. The order issued by
Acting Secretary of Justice Montenegro states thus:
In the interest of the public service and pursuant to the provisions of existing laws, a
Committee to conduct the formal investigation of the administrative complaint for oppression,
dishonesty, disgraceful and immoral conduct, being notoriously undesirable and conduct

49

prejudicial to the best interest of the service against Mr. ARSENIO P. LUMIQUED, Regional
Director, Department of Agrarian Reform, Cordillera Autonomous Region, is hereby created x
x x.xxiv[24]
As such, the hearing conducted by the investigating committee was not part of a criminal
prosecution. This was even made more pronounced when, after finding Lumiqued
administratively liable, it hinted at the filing of criminal case for malversation through
falsification of public documents in its report and recommendation.
Petitioners misconception on the nature of the investigation xxv[25] conducted against
Lumiqued appears to have been engendered by the fact that the DOJ conducted it. While it is
true that under the Administrative Code of 1987, the DOJ shall administer the criminal justice
system in accordance with the accepted processes thereof consisting in the investigation of
the crimes, prosecution of offenders and administration of the correctional system, xxvi[26]
conducting criminal investigations is not its sole function. By its power to perform such other
functions as may be provided by law, xxvii[27] prosecutors may be called upon to conduct
administrative investigations. Accordingly, the investigating committee created by Department
Order No. 145 was duty-bound to conduct the administrative investigation in accordance with
the rules therefor.
While investigations conducted by an administrative body may at times be akin to a criminal
proceeding, the fact remains that under existing laws, a party in an administrative inquiry may
or may not be assisted by counsel, irrespective of the nature of the charges and of the
respondents capacity to represent himself and no duty rests on such a body to furnish the
person being investigated with counsel.xxviii[28] In an administrative proceeding such as the
one that transpired below, a respondent (such as Lumiqued) has the option of engaging the
services of counsel or not. This is clear from the provisions of Section 32, Article VII of
Republic Act No. 2260xxix[29] (otherwise known as the Civil Service Act) and Section 39,
paragraph 2, Rule XIV (on discipline) of the Omnibus Rules Implementing Book V of
Executive Order No. 292xxx[30] (otherwise known as the Administrative Code of 1987).
Excerpts from the transcript of stenographic notes of the hearings attended by
Lumiquedxxxi[31] clearly show that he was confident of his capacity and so opted to represent
himself. Thus, the right to counsel is not imperative in administrative investigations because
such inquiries are conducted merely to determine whether there are facts that merit
disciplinary measures against erring public officers and employees, with the purpose of
maintaining the dignity of government service.
Furthermore, petitioners reliance on Resolution No. 94-0521 of the Civil Service Commission
on the Uniform Procedure in the Conduct of Administrative Investigation stating that a
respondent in an administrative complaint must be informed of his right to the assistance of a
counsel of his choice,xxxii[32] is inappropriate. In the first place, this resolution is applicable
only to cases brought before the Civil Service Commission. xxxiii[33] Secondly, said resolution,
which is dated January 25, 1994, took effect fifteen days following its publication in a
newspaper of general circulation,xxxiv[34] much later than the July 1992 hearings of the
investigating committee created by Department Order No. 145. Thirdly, the same committee
was not remiss in the matter of reminding Lumiqued of his right to counsel. Thus at the July 3,
1992, hearing, Lumiqued was repeatedly appraised of his option to secure services of
counsel:
RSP EXEVEA:

This is an administrative case against Director Lumiqued. Director Lumiqued is present. The
complainant is present, Janet Obar-Zamudio. Complainant has just been furnished with a
copy of the counter-affidavit of the respondent. Do you have a counsel, Director?
DIR. LUMIQUED:
I did not bring anybody, Sir, because when I went to see him, he told me, Sir, that he has
already set a hearing, morning and afternoon today.
RSP EXEVEA:
So, we will proceed with the hearing even without your counsel? You are willing to proceed
with the hearing even without your counsel?
DIR. LUMIQUED:
Yes, I am confident . . .
CP BALAJADIA:
You are confident that you will be able to represent yourself?
DIR. LUMIQUED:
That is my concern.xxxv[35] (Underscoring supplied)
In the course of private respondents damaging testimony, the investigating committee once
again reminded Lumiqued of his need for a counsel. Thus:
CP BALAJADIA:
Q. (To Director Lumiqued) You really wish to go through with this even without your counsel?
DIRECTOR LUMIQUED:
A. I think so, Sir.
CP BALAJADIA:
Let us make it of record that we have been warning you to proceed with the assistance of
counsel but you said that you can take care of yourself so we have no other alternative but to
proceed.xxxvi[36] (Underscoring supplied)
Thereafter, the following colloquies transpired:
CP BALAJADIA:
We will suspend in the meantime that we are waiting for the supplemental affidavit you are
going to present to us. Do you have any request from the panel of investigators, Director
Lumiqued?
DIRECTOR LUMIQUED:
I was not able to bring a lawyer since the lawyer I requested to assist me and was the one
who prepared my counter-affidavit is already engaged for a hearing and according to him he is
engaged for the whole month of July.
RSP EXEVEA:
We cannot wait . . .
CP BALAJADIA:
Why dont you engage the services of another counsel. The charges against you are quite
serious. We are not saying you are guilty already. We are just apprehensive that you will go
through this investigation without a counsel. We would like you to be protected legally in the
course of this investigation. Why dont you get the services of another counsel. There are
plenty here in Baguio...
DIRECTOR LUMIQUED:
I will try to see, Sir . . .
CP BALAJADIA:

50

Please select your date now, we are only given one month to finish the investigation, Director
Lumiqued.
RSP EXEVEA:
We will not entertain any postponement. With or without counsel, we will proceed.
CP BALAJADIA:
Madam Witness, will you please submit the document which we asked for and Director
Lumiqued, if you have other witnesses, please bring them but reduce their testimonies in
affidavit form so that we can expedite with the proceedings. xxxvii[37]
At the hearing scheduled for July 10, 1992, Lumiqued still did not avail of the services of
counsel. Pertinent excerpts from said hearing follow:
FISCAL BALAJADIA:
I notice also Mr. Chairman that the respondent is not being represented by a counsel. The last
time he was asked to invite his lawyer in this investigation. May we know if he has a lawyer to
represent him in this investigation?
DIR. LUMIQUED:
There is none Sir because when I went to my lawyer, he told me that he had set a case also at
9:30 in the other court and he told me if there is a possibility of having this case postponed
anytime next week, probably Wednesday so we will have good time (sic) of presenting the
affidavit.
FISCAL BALAJADIA:
Are you moving for a postponement Director? May I throw this to the panel. The charges in
this case are quite serious and he should be given a chance to the assistance of a
counsel/lawyer.
RSP EXEVEA:
And is (sic) appearing that the supplemental-affidavit has been furnished him only now and
this has several documents attached to it so I think we could grant him one last postponement
considering that he has already asked for an extension.
DIR. LUMIQUED:
Furthermore Sir, I am now being bothered by my heart ailment. xxxviii[38]
The hearing was reset to July 17, 1992, the date when Lumiqued was released from the
hospital. Prior to said date, however, Lumiqued did not inform the committee of his
confinement. Consequently, because the hearing could not push through on said date, and
Lumiqued had already submitted his counter-affidavit, the committee decided to wind up the
proceedings. This did not mean, however, that Lumiqued was short-changed in his right to due
process.
Lumiqued, a Regional Director of a major department in the executive branch of the
government, graduated from the University of the Philippines (Los Baos) with the degree of
Bachelor of Science major in Agriculture, was a recipient of various scholarships and grants,
and underwent training seminars both here and abroad. xxxix[39] Hence, he could have
defended himself if need be, without the help of counsel, if truth were on his side. This,
apparently, was the thought he entertained during the hearings he was able to attend. In his
statement, That is my concern, one could detect that it had been uttered testily, if not
exasperatedly, because of the doubt or skepticism implicit in the question, You are confident
that you will be able to represent yourself? despite his having positively asserted earlier, Yes,
I am confident. He was obviously convinced that he could ably represent himself. Beyond

repeatedly reminding him that he could avail himself of counsel and as often receiving the
reply that he is confident of his ability to defend himself, the investigating committee could not
do more. One can lead a horse to water but cannot make him drink.
The right to counsel is not indispensable to due process unless required by the Constitution or
the law. In Nera v. Auditor General,xl[40] the Court said:
x x x. There is nothing in the Constitution that says that a party in a non-criminal proceeding
is entitled to be represented by counsel and that, without such representation, he shall not be
bound by such proceedings. The assistance of lawyers, while desirable, is not indispensable.
The legal profession was not engrafted in the due process clause such that without the
participation of its members, the safeguard is deemed ignored or violated. The ordinary citizen
is not that helpless that he cannot validly act at all except only with a lawyer at his side.
In administrative proceedings, the essence of due process is simply the opportunity to explain
ones side. One may be heard, not solely by verbal presentation but also, and perhaps even
much more creditably as it is more practicable than oral arguments, through pleadings. xli[41]
An actual hearing is not always an indispensable aspect of due process. xlii[42] As long as a
party was given the opportunity to defend his interests in due course, he cannot be said to
have been denied due process of law, for this opportunity to be heard is the very essence of
due process.xliii[43] Moreover, this constitutional mandate is deemed satisfied if a person is
granted an opportunity to seek reconsideration of the action or ruling complained of. xliv[44]
Lumiqueds appeal and his subsequent filing of motions for reconsideration cured whatever
irregularity attended the proceedings conducted by the committee. xlv[45]
The constitutional provision on due process safeguards life, liberty and property. xlvi[46] In the
early case of Cornejo v. Gabriel and Provincial Board of Rizal xlvii[47] the Court held that a
public office is not property within the sense of the constitutional guarantee of due process of
law for it is a public trust or agency. This jurisprudential pronoucement has been enshrined in
the 1987 Constitution under Article XI, Section 1 on accountability of public officers, as follows:
Section 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and lead modest lives.
When the dispute concerns ones constitutional right to security of tenure, however, public
office is deemed analogous to property in a limited sense; hence, the right to due process
could rightfully be invoked. Nonetheless, the right to security of tenure is not absolute. Of
equal weight is the countervailing mandate of the Constitution that all public officers and
employees must serve with responsibility, integrity, loyalty and efficiency. xlviii[48] In this case, it
has been clearly shown that Lumiqued did not live up to this constitutional precept.
The committees findings pinning culpability for the charges of dishonesty and grave
misconduct upon Lumiqued were not, as shown above, fraught with procedural mischief. Its
conclusions were founded on the evidence presented and evaluated as facts. Well-settled in
our jurisdiction is the doctrine that findings of fact of administrative agencies must be
respected as long as they are supported by substantial evidence, even if such evidence is not
overwhelming or preponderant.xlix[49] The quantum of proof necessary for a finding of guilt in
administrative cases is only substantial evidence or such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion. l[50]
Consequently, the adoption by Secretary Drilon and the OP of the committees
recommendation of dismissal may not in any way be deemed tainted with arbitrariness

51

amounting to grave abuse of discretion. Government officials are presumed to perform their
functions with regularity. Strong evidence is not necessary to rebut that presumption, li[51]
which petitioners have not successfully disputed in the instant case.
Dishonesty is a grave offense penalized by dismissal under Section 23 of Rule XIV of the
Omnibus Rules Implementing Book V of the Administrative Code of 1987. Under Section 9 of
the same Rule, the penalty of dismissal carries with it cancellation of eligibility, forfeiture of
leave credits and retirement benefits, and the disqualification for reemployment in the
government service. The instant petition, which is aimed primarily at the payment of
retirement benefits and other benefits plus backwages from the time of Lumiqueds dismissal
until his demise, must, therefore, fail.
WHEREFORE, the instant petition for certiorari and mandamus is hereby DISMISSED and
Administrative Order No. 52 of the Office of the President is AFFIRMED. Costs against
petitioners.
SO ORDERED.
EN BANC
[G.R. No. 139465. October 17, 2000]
SECRETARY OF JUSTICE, petitioner, vs. HON. RALPH C. LANTION, Presiding Judge,
Regional Trial Court of Manila, Branch 25, and MARK B. JIMENEZ, respondents.
RESOLUTION
PUNO, J.:
On January 18, 2000, by a vote of 9-6, we dismissed the petition at bar and ordered the
petitioner to furnish private respondent copies of the extradition request and its supporting
papers and to grant him a reasonable period within which to file his comment with supporting
evidence.lii[1]
On February 3, 2000, the petitioner timely filed an Urgent Motion for Reconsideration. He
assails the decision on the following grounds:
"The majority decision failed to appreciate the following facts and points of substance and of
value which, if considered, would alter the result of the case, thus:
I.
There is a substantial difference between an evaluation process antecedent to the
filing of an extradition petition in court and a preliminary investigation.
II.
Absence of notice and hearing during the evaluation process will not result in a
denial of fundamental fairness.
III.
In the evaluation process, instituting a notice and hearing requirement satisfies no
higher objective.
IV.
The deliberate omission of the notice and hearing requirement in the Philippine
Extradition Law is intended to prevent flight.
V.
There is a need to balance the interest between the discretionary powers of
government and the rights of an individual.
VI.
The instances cited in the assailed majority decision when the twin rights of notice
and hearing may be dispensed with in this case results in a non sequitur conclusion.
VII.
Jimenez is not placed in imminent danger of arrest by the Executive Branch
necessitating notice and hearing.
VIII.
By instituting a 'proceeding' not contemplated by PD No. 1069, the Supreme Court
has encroached upon the constitutional boundaries separating it from the other two co-equal
branches of government.

IX.
Bail is not a matter of right in proceedings leading to extradition or in extradition
proceedings."liii[2]
On March 28, 2000, a 58-page Comment was filed by the private respondent Mark B.
Jimenez, opposing petitioners Urgent Motion for Reconsideration.
On April 5, 2000, petitioner filed an Urgent Motion to Allow Continuation and Maintenance of
Action and Filing of Reply. Thereafter, petitioner filed on June 7, 2000 a Manifestation with the
attached Note 327/00 from the Embassy of Canada and Note No. 34 from the Security Bureau
of the Hongkong SAR Government Secretariat. On August 15, 2000, private respondent filed
a Manifestation and Motion for Leave to File Rejoinder in the event that petitioner's April 5,
2000 Motion would be granted. Private respondent also filed on August 18, 2000, a Motion to
Expunge from the records petitioner's June 7, 2000 Manifestation with its attached note
verbales. Except for the Motion to Allow Continuation and Maintenance of Action, the Court
denies these pending motions and hereby resolves petitioner's Urgent Motion for
Reconsideration.
The jugular issue is whether or not the private respondent is entitled to the due process right
to notice and hearing during the evaluation stage of the extradition process.
We now hold that private respondent is bereft of the right to notice and hearing during the
evaluation stage of the extradition process.
First. P.D. No. 1069liv[3] which implements the RP-US Extradition Treaty provides the time
when an extraditee shall be furnished a copy of the petition for extradition as well as its
supporting papers, i.e., after the filing of the petition for extradition in the extradition court, viz:
"Sec. 6. Issuance of Summons; Temporary Arrest; Hearing; Service of Notices. - (1)
Immediately upon receipt of the petition, the presiding judge of the court shall, as soon as
practicable, summon the accused to appear and to answer the petition on the day and hour
fixed in the order . . . Upon receipt of the answer, or should the accused after having received
the summons fail to answer within the time fixed, the presiding judge shall hear the case or set
another date for the hearing thereof.
(2)
The order and notice as well as a copy of the warrant of arrest, if issued, shall be
promptly served each upon the accused and the attorney having charge of the case."
It is of judicial notice that the summons includes the petition for extradition which will be
answered by the extraditee.
There is no provision in the RP-US Extradition Treaty and in P.D. No. 1069 which gives an
extraditee the right to demand from the petitioner Secretary of Justice copies of the extradition
request from the US government and its supporting documents and to comment thereon
while the request is still undergoing evaluation. We cannot write a provision in the treaty
giving private respondent that right where there is none. It is well-settled that a "court cannot
alter, amend, or add to a treaty by the insertion of any clause, small or great, or dispense with
any of its conditions and requirements or take away any qualification, or integral part of any
stipulation, upon any motion of equity, or general convenience, or substantial justice." lv[4]
Second. All treaties, including the RP-US Extradition Treaty, should be interpreted in light
of their intent. Nothing less than the Vienna Convention on the Law of Treaties to which the
Philippines is a signatory provides that "a treaty shall be interpreted in good faith in
accordance with the ordinary meaning to be given to the terms of the treaty in their context
and in light of its object and purpose."lvi[5] (emphasis supplied) The preambular paragraphs
of P.D. No. 1069 define its intent, viz:

52

"WHEREAS, under the Constitution[,] the Philippines adopts the generally accepted principles
of international law as part of the law of the land, and adheres to the policy of peace, equality,
justice, freedom, cooperation and amity with all nations;
WHEREAS, the suppression of crime is the concern not only of the state where it is
committed but also of any other state to which the criminal may have escaped, because it
saps the foundation of social life and is an outrage upon humanity at large, and it is in the
interest of civilized communities that crimes should not go unpunished;
WHEREAS, in recognition of this principle the Philippines recently concluded an extradition
treaty with the Republic of Indonesia, and intends to conclude similar treaties with other
interested countries;
x x x." (emphasis supplied)
It cannot be gainsaid that today, countries like the Philippines forge extradition treaties to
arrest the dramatic rise of international and transnational crimes like terrorism and drug
trafficking. Extradition treaties provide the assurance that the punishment of these crimes will
not be frustrated by the frontiers of territorial sovereignty. Implicit in the treaties should be the
unbending commitment that the perpetrators of these crimes will not be coddled by any
signatory state.
It ought to follow that the RP-US Extradition Treaty calls for an interpretation that will minimize
if not prevent the escape of extraditees from the long arm of the law and expedite their trial.
The submission of the private respondent, that as a probable extraditee under the RP-US
Extradition Treaty he should be furnished a copy of the US government request for his
extradition and its supporting documents even while they are still under evaluation by
petitioner Secretary of Justice, does not meet this desideratum. The fear of the petitioner
Secretary of Justice that the demanded notice is equivalent to a notice to flee must be deeply
rooted on the experience of the executive branch of our government. As it comes from the
branch of our government in charge of the faithful execution of our laws, it deserves the
careful consideration of this Court. In addition, it cannot be gainsaid that private respondents
demand for advance notice can delay the summary process of executive evaluation of the
extradition request and its accompanying papers. The foresight of Justice Oliver Wendell
Holmes did not miss this danger. In 1911, he held:
"It is common in extradition cases to attempt to bring to bear all the factitious niceties of a
criminal trial at common law. But it is a waste of time . . . if there is presented, even in
somewhat untechnical form according to our ideas, such reasonable ground to suppose him
guilty as to make it proper that he should be tried, good faith to the demanding government
requires his surrender."lvii[6] (emphasis supplied)
We erode no right of an extraditee when we do not allow time to stand still on his prosecution.
Justice is best served when done without delay.
Third. An equally compelling factor to consider is the understanding of the parties
themselves to the RP-US Extradition Treaty as well as the general interpretation of the
issue in question by other countries with similar treaties with the Philippines. The rule is
recognized that while courts have the power to interpret treaties, the meaning given them by
the departments of government particularly charged with their negotiation and enforcement is
accorded great weight.lviii[7] The reason for the rule is laid down in Santos III v. Northwest
Orient Airlines, et al.,lix[8] where we stressed that a treaty is a joint executive-legislative act

which enjoys the presumption that "it was first carefully studied and determined to be
constitutional before it was adopted and given the force of law in the country."
Our executive department of government, thru the Department of Foreign Affairs (DFA) and
the Department of Justice (DOJ), has steadfastly maintained that the RP-US Extradition
Treaty and P.D. No. 1069 do not grant the private respondent a right to notice and hearing
during the evaluation stage of an extradition process. lx[9] This understanding of the treaty is
shared by the US government, the other party to the treaty. lxi[10] This interpretation by the
two governments cannot be given scant significance. It will be presumptuous for the Court to
assume that both governments did not understand the terms of the treaty they concluded.
Yet, this is not all. Other countries with similar extradition treaties with the Philippines
have expressed the same interpretation adopted by the Philippine and US
governments. Canadianlxii[11] and Hongkonglxiii[12] authorities, thru appropriate note verbales
communicated to our Department of Foreign Affairs, stated in unequivocal language that it is
not an international practice to afford a potential extraditee with a copy of the extradition
papers during the evaluation stage of the extradition process. We cannot disregard such a
convergence of views unless it is manifestly erroneous.
Fourth. Private respondent, however, peddles the postulate that he must be afforded the right
to notice and hearing as required by our Constitution. He buttresses his position by likening an
extradition proceeding to a criminal proceeding and the evaluation stage to a preliminary
investigation.
We are not persuaded. An extradition proceeding is sui generis. It is not a criminal
proceeding which will call into operation all the rights of an accused as guaranteed by the Bill
of Rights. To begin with, the process of extradition does not involve the determination of
the guilt or innocence of an accused.lxiv[13] His guilt or innocence will be adjudged in the
court of the state where he will be extradited. Hence, as a rule, constitutional rights that are
only relevant to determine the guilt or innocence of an accused cannot be invoked by an
extraditee especially by one whose extradition papers are still undergoing evaluation. lxv[14] As
held by the US Supreme Court in United States v. Galanis:
"An extradition proceeding is not a criminal prosecution, and the constitutional safeguards that
accompany a criminal trial in this country do not shield an accused from extradition pursuant
to a valid treaty."lxvi[15]
There are other differences between an extradition proceeding and a criminal proceeding.
An extradition proceeding is summary in nature while criminal proceedings involve a full-blown
trial.lxvii[16] In contradistinction to a criminal proceeding, the rules of evidence in an extradition
proceeding allow admission of evidence under less stringent standards. lxviii[17] In terms of the
quantum of evidence to be satisfied, a criminal case requires proof beyond reasonable doubt
for convictionlxix[18] while a fugitive may be ordered extradited "upon showing of the existence
of a prima facie case."lxx[19] Finally, unlike in a criminal case where judgment becomes
executory upon being rendered final, in an extradition proceeding, our courts may adjudge an
individual extraditable but the President has the final discretion to extradite him. lxxi[20] The
United States adheres to a similar practice whereby the Secretary of State exercises wide
discretion in balancing the equities of the case and the demands of the nation's foreign
relations before making the ultimate decision to extradite. lxxii[21]
As an extradition proceeding is not criminal in character and the evaluation stage in an
extradition proceeding is not akin to a preliminary investigation, the due process

53

safeguards in the latter do not necessarily apply to the former. This we hold for the
procedural due process required by a given set of circumstances "must begin with a
determination of the precise nature of the government function involved as well as the
private interest that has been affected by governmental action."lxxiii[22] The concept of due
process is flexible for "not all situations calling for procedural safeguards call for the same kind
of procedure."lxxiv[23]
Fifth. Private respondent would also impress upon the Court the urgency of his right to notice
and hearing considering the alleged threat to his liberty "which may be more priceless than
life."lxxv[24] The supposed threat to private respondents liberty is perceived to come from
several provisions of the RP-US Extradition Treaty and P.D. No. 1069 which allow provisional
arrest and temporary detention.
We first deal with provisional arrest. The RP-US Extradition Treaty provides as follows:
"PROVISIONAL ARREST
1.
In case of urgency, a Contracting Party may request the provisional arrest of the
person sought pending presentation of the request for extradition. A request for
provisional arrest may be transmitted through the diplomatic channel or directly between the
Philippine Department of Justice and the United States Department of Justice.
2.
The application for provisional arrest shall contain:
a)
a description of the person sought;
b)
the location of the person sought, if known;
c)
a brief statement of the facts of the case, including, if possible, the time and location
of the offense;
d)
a description of the laws violated;
e)
a statement of the existence of a warrant of arrest or finding of guilt or judgment of
conviction against the person sought; and
f)
a statement that a request for extradition for the person sought will follow.
3.
The Requesting State shall be notified without delay of the disposition of its
application and the reasons for any denial.
4.
A person who is provisionally arrested may be discharged from custody upon the
expiration of sixty (60) days from the date of arrest pursuant to this Treaty if the executive
authority of the Requested State has not received the formal request for extradition and the
supporting documents required in Article 7." (emphasis supplied)
In relation to the above, Section 20 of P.D. No. 1069 provides:
"Sec. 20. Provisional Arrest.- (a) In case of urgency, the requesting state may, pursuant to the
relevant treaty or convention and while the same remains in force, request for the provisional
arrest of the accused, pending receipt of the request for extradition made in accordance
with Section 4 of this Decree.
(b)
A request for provisional arrest shall be sent to the Director of the National Bureau
of Investigation, Manila, either through the diplomatic channels or direct by post or telegraph.
(c)
The Director of the National Bureau of Investigation or any official acting on his
behalf shall upon receipt of the request immediately secure a warrant for the provisional arrest
of the accused from the presiding judge of the Court of First Instance of the province or city
having jurisdiction of the place, who shall issue the warrant for the provisional arrest of the
accused. The Director of the National Bureau of Investigation through the Secretary of Foreign
Affairs shall inform the requesting state of the result of its request.

(d)
If within a period of 20 days after the provisional arrest the Secretary of Foreign
Affairs has not received the request for extradition and the documents mentioned in Section 4
of this Decree, the accused shall be released from custody." (emphasis supplied)
Both the RP-US Extradition Treaty and P.D. No. 1069 clearly provide that private respondent
may be provisionally arrested only pending receipt of the request for extradition. Our
DFA has long received the extradition request from the United States and has turned it over to
the DOJ. It is undisputed that until today, the United States has not requested for private
respondents provisional arrest. Therefore, the threat to private respondents liberty has
passed. It is more imagined than real.
Nor can the threat to private respondents liberty come from Section 6 of P.D. No. 1069, which
provides:
"Sec. 6. Issuance of Summons; Temporary Arrest; Hearing, Service of Notices.- (1)
Immediately upon receipt of the petition, the presiding judge of the court shall, as soon as
practicable, summon the accused to appear and to answer the petition on the day and hour
fixed in the order. [H]e may issue a warrant for the immediate arrest of the accused which
may be served anywhere within the Philippines if it appears to the presiding judge that the
immediate arrest and temporary detention of the accused will best serve the ends of
justice. . .
(2) The order and notice as well as a copy of the warrant of arrest, if issued, shall be promptly
served each upon the accused and the attorney having charge of the case." (emphasis
supplied)
It is evident from the above provision that a warrant of arrest for the temporary detention of the
accused pending the extradition hearing may only be issued by the presiding judge of the
extradition court upon filing of the petition for extradition. As the extradition process is still
in the evaluation stage of pertinent documents and there is no certainty that a petition for
extradition will be filed in the appropriate extradition court, the threat to private respondents
liberty is merely hypothetical.
Sixth. To be sure, private respondents plea for due process deserves serious consideration
involving as it does his primordial right to liberty. His plea to due process, however, collides
with important state interests which cannot also be ignored for they serve the interest
of the greater majority. The clash of rights demands a delicate balancing of interests
approach which is a "fundamental postulate of constitutional law." lxxvi[25] The approach
requires that we "take conscious and detailed consideration of the interplay of interests
observable in a given situation or type of situation."lxxvii[26] These interests usually consist in
the exercise by an individual of his basic freedoms on the one hand, and the governments
promotion of fundamental public interest or policy objectives on the other. lxxviii[27]
In the case at bar, on one end of the balancing pole is the private respondents claim to due
process predicated on Section 1, Article III of the Constitution, which provides that "No person
shall be deprived of life, liberty, or property without due process of law . . ." Without a bubble
of doubt, procedural due process of law lies at the foundation of a civilized society which
accords paramount importance to justice and fairness. It has to be accorded the weight it
deserves.
This brings us to the other end of the balancing pole. Petitioner avers that the Court should
give more weight to our national commitment under the RP-US Extradition Treaty to expedite
the extradition to the United States of persons charged with violation of some of its laws.

54

Petitioner also emphasizes the need to defer to the judgment of the Executive on matters
relating to foreign affairs in order not to weaken if not violate the principle of separation of
powers.
Considering that in the case at bar, the extradition proceeding is only at its evaluation
stage, the nature of the right being claimed by the private respondent is nebulous and
the degree of prejudice he will allegedly suffer is weak, we accord greater weight to the
interests espoused by the government thru the petitioner Secretary of Justice. In
Angara v. Electoral Commission, we held that the "Constitution has blocked out with deft
strokes and in bold lines, allotment of power to the executive, the legislative and the judicial
departments of the government."lxxix[28] Under our constitutional scheme, executive power is
vested in the President of the Philippines.lxxx[29] Executive power includes, among others, the
power to contract or guarantee foreign loans and the power to enter into treaties or
international agreements.lxxxi[30] The task of safeguarding that these treaties are duly honored
devolves upon the executive department which has the competence and authority to so act in
the international arena.lxxxii[31] It is traditionally held that the President has power and even
supremacy over the countrys foreign relations.lxxxiii[32] The executive department is aptly
accorded deference on matters of foreign relations considering the Presidents most
comprehensive and most confidential information about the international scene of which he is
regularly briefed by our diplomatic and consular officials. His access to ultra-sensitive military
intelligence data is also unlimited.lxxxiv[33] The deference we give to the executive department
is dictated by the principle of separation of powers. This principle is one of the cornerstones of
our democratic government. It cannot be eroded without endangering our government.
The Philippines also has a national interest to help in suppressing crimes and one way to do it
is to facilitate the extradition of persons covered by treaties duly entered by our government.
More and more, crimes are becoming the concern of one world. Laws involving crimes and
crime prevention are undergoing universalization. One manifest purpose of this trend towards
globalization is to deny easy refuge to a criminal whose activities threaten the peace and
progress of civilized countries. It is to the great interest of the Philippines to be part of this
irreversible movement in light of its vulnerability to crimes, especially transnational crimes.
In tilting the balance in favor of the interests of the State, the Court stresses that it is
not ruling that the private respondent has no right to due process at all throughout the
length and breadth of the extrajudicial proceedings. Procedural due process requires a
determination of what process is due, when it is due, and the degree of what is due. Stated
otherwise, a prior determination should be made as to whether procedural protections
are at all due and when they are due, which in turn depends on the extent to which an
individual will be "condemned to suffer grievous loss."lxxxv[34] We have explained why an
extraditee has no right to notice and hearing during the evaluation stage of the extradition
process. As aforesaid, P.D. No. 1069 which implements the RP-US Extradition Treaty affords
an extraditee sufficient opportunity to meet the evidence against him once the petition is
filed in court. The time for the extraditee to know the basis of the request for his extradition
is merely moved to the filing in court of the formal petition for extradition. The extraditee's
right to know is momentarily withheld during the evaluation stage of the extradition
process to accommodate the more compelling interest of the State to prevent escape of
potential extraditees which can be precipitated by premature information of the basis of the
request for his extradition. No less compelling at that stage of the extradition proceedings is

the need to be more deferential to the judgment of a co-equal branch of the government, the
Executive, which has been endowed by our Constitution with greater power over matters
involving our foreign relations. Needless to state, this balance of interests is not a static but a
moving balance which can be adjusted as the extradition process moves from the
administrative stage to the judicial stage and to the execution stage depending on factors that
will come into play. In sum, we rule that the temporary hold on private respondent's privilege
of notice and hearing is a soft restraint on his right to due process which will not deprive him
of fundamental fairness should he decide to resist the request for his extradition to the
United States. There is no denial of due process as long as fundamental fairness is
assured a party.
We end where we began. A myopic interpretation of the due process clause would not suffice
to resolve the conflicting rights in the case at bar. With the global village shrinking at a rapid
pace, propelled as it is by technological leaps in transportation and communication, we need
to push further back our horizons and work with the rest of the civilized nations and move
closer to the universal goals of "peace, equality, justice, freedom, cooperation and amity with
all nations."lxxxvi[35] In the end, it is the individual who will reap the harvest of peace and
prosperity from these efforts.
WHEREFORE, the Urgent Motion for Reconsideration is GRANTED. The Decision in the case
at bar promulgated on January18, 2000 is REVERSED. The assailed Order issued by the
public respondent judge on August 9, 1999 is SET ASIDE. The temporary restraining order
issued by this Court on August 17, 1999 is made PERMANENT. The Regional Trial Court of
Manila, Branch 25 is enjoined from conducting further proceedings in Civil Case No. 9994684.
.R. No. 148571.December 17, 2002]

GOV'T OF THE USA, etc. vs. HON. PURGANAN, etc., et al.

EN BANC
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated 17 DEC 2002.
G.R. No. 148571(Government of the United States of America, etc. vs. Hon. Guillermo G.
Purganan, etc., et al.)
Before the Court are private respondent's Motion for Reconsideration dated 10 October 2002,
petitioner's Comment thereon dated 05 November 2002, private respondent's Motion for
Leave of Court to File and to Admit Additional Arguments in Support of Motion for
Reconsideration dated November 6, 2002, and Reply (to petitioner's Comment) dated
November 26, 2002.
First, private respondent insists that the Extradition Court acted properly in granting
bail to him. We have already exhaustively discussed this issue in our Decision and in the
Concurring Opinion of Mr. Justice Antonio T. Carpio. Thus, we will not belabor our ruling on
this point. Suffice it to say that petitioner's repeated invocation of the Extradition Court's grant
of bail has not convinced us that he deserves bail under the exception laid down in our
Decision, namely, "(1) that, once granted bail, the applicant will not be a flight risk or a danger
to the community; and (2) that there exists special, humanitarian and compelling
circumstances including, as a matter ofreciprocity, those cited by the highest court in the
requesting state when it grants provisional liberty in extradition cases therein."

55

There has been no clear and convincing showing as to the absence of flight risk and the nonendangerment of the community, or as to the existence of special, humanitarian and
compelling circumstances justifying grant of bail.
Second, private respondent claims that our Decision did not make an express finding of grave
abuse of discretion on the part of the lower court. This is incorrect. On page 24 of our
Decision, we plainly stated: "Hence, after having already determined therefrom that a prima
facie finding did exist, respondent judge gravely abused his discretion when he set the matter
for hearing upon motion of Jimenez." Such grave abuse continued to characterize
thesubsequent actions of Judge Purganan in illegally granting bail to private
respondent.Again, we will not repeat here why respondent does not deserve temporary liberty.
This point has been already exhaustively taken up in our Decision and in the Opinions
individually written by the members of the Court.
Further, contrary to Jimenez's claims, the Extradition Court did not negate the flight risk posed
by him. It did not make a finding on flight risk as it considered the issue irrelevant, having
already determined bail to be a matter of right. Without making any finding on flight risk, it
found the capacity to flee subservient to "the benefits that respondent may be able to deliver
to his constituents," despite the absence from the records of evidence showing the existence
of such benefits.
And in any event, in his Memorandum, private respondent submitted factual issues -- i.e.,
existence of special circumstances and absence of flight risk -- for the consideration of this
Court. He even reiterated some of those factual submissions in his Motion for
Reconsideration. He is therefore deemed estopped to claim that thisCourt cannot, on
certiorari, address factual issues and review andreverse the factual findings of the Extradition
Court.
Third, private respondent's arguments (1) that the Extradition Court exercised due discretion
in its grant of bail and (2) that our "ruling that bail is not a matter of right in extradition cases is
contrary to prevailing law and jurisprudence" are neither novel nor deserving of further
rebuttal. Again, they have been extensively taken up in Decision as well as in Concurring,
Separate and Dissenting Opinions.
Fourth, private respondent argues that allegedly our Decision violates his due process rights.
Again, we have discussed this matter in our Decision saying that, in its simplest concept, due
process is merely the opportunity to be heard -- which opportunity need not always be a prior
one.In point of fact, private respondent has been given more than enough opportunity to be
heard in this Court as well as in the extradition Court.Even his Motion for Reconsideration has
been given all the chances to persuade by way of allowing "additional arguments" in his
Motion dated November 6, 2002 and Reply. These latter pleadings are normally not allowed,
but precisely because this Court wanted to give him more than enough opportunity to be
heard and to argue, we have bent backwards and admitted these additional pleadings.
Finally, private respondent contends that' as a member of Congress, he is immune from arrest
"arising from offenses punishable by not more than six (6) years imprisonment," saying that he
cannot be prevented from performing his legislative duties because his constituents would be
disenfranchised. He perorates that a member of Congress may be suspended or removed
from office only by two thirds vote of the House of Representatives.
Citing People v. Jalosjos, our Decision (pp. 38-40) has already debunked the
disenfranchisement argument. Furthermore, our Decision does not in any manner suspend or

remove him from office. Neither his arrest or detention arising from the extradition proceeding
will constitute his suspension or removal from office. That is clear enough.
While equal protection and reasonable classifications are not directly in issue in this case, we
nevertheless stress, paraphrasing Jalosjos, that respondent's election to the position of
congressman, with the concomitant duty to discharge legislative functions, does not constitute
a substantial differentiation which warrants placing him in a classification or category apart
from all other persons confined and deprived of their liberty pending resolution of their
extradition cases. We reiterate that lawful arrest and temporary confinement of a potential
extraditee are germane to the purposes of the law and apply to all those belonging to the
same class.
As we have stated, the procedure adopted by the Extradition Court of first notifying and
hearing a prospective extraditee before the actual issuance of the warrant for his arrest, is
tantamount to giving notice to flee and avoid extradition. Whether a candidate for extradition
does in fact go into hiding or not is beside the point. In the final analysis, the method adopted
by the lower court wascompletely at loggerheads with the purpose, object and rationale of the
law, and overlooked the evils to be remedied.
As already suggested in our Decision (p. 32), private respondent can avoid arrest and
detention which are the consequences of theextradition proceeding simply by applying for bail
before the courts trying the criminal cases against him in the USA. He himself has repeatedly
told us that the indictments against him in the United States are bailable. Furthermore, he is
capable, financially and otherwise, of producing the necessary bail in the US. Why then has
he not done so?
Otherwise stated, Respondent Jimenez has the actual power to lift his arrest and detention
arising from his extradition by simply and voluntarily going to and filing bail in the USA.
AT BOTTOM, private respondent's Motion for Reconsideration presents no new or substantial
arguments which have not been presented in his prior pleadings and which have not been
taken up in our Decision. His present allegations and asseverations are mere rehashes of
arguments previously presented to us or are mere restatements of the Separate and
Dissenting Opinions which were already adequately discussed in our Decision. In short,
private respondent has not given any compelling reason to warrant a reversal or modification
of our earlier rulings.
WHEREFORE, the Motion for Reconsideration is hereby DENIED with finality.
SO ORDERED.(Davide, Jr., CJ., Mendoza, Panganiban, Carpio, Martinez, Corona,
Morales, Callejo and Azcuna, JJ., concur; Bellosillo and Puno, JJ., the latter joined by
Quisumbing, J., reiterate their Separate Opinions, while Vitug, and Santiago, JJ., both joined
by Gutierrez, J., filed their Dissenting Opinions)
Very truly yours,
(Sgd.) LUZVIMINDA D. PUNO
Clerk of Court
Philippine Brotherhood case

56

iR E S O L U T I O N
BRION, J.:
The Philippine Guardians Brotherhood, Inc. (PGBI) seeks in this petition for certiorari[1] and
in the motion for reconsideration it subsequently filed to nullify Commission on Elections
(COMELEC) Resolution No. 8679 dated October 13, 2009 insofar as it relates to PGBI, and the
Resolution dated December 9, 2009 denying PGBIs motion for reconsideration in SPP No. 09-004
(MP). Via these resolutions, the COMELEC delisted PGBI from the roster of registered national,
regional or sectoral parties, organizations or coalitions under the party-list system.
BACKGROUND
Section 6(8) of Republic Act No. 7941 (RA 7941), otherwise known as the Party-List System
Act, provides:
Section 6. Removal and/or Cancellation of Registration. The COMELEC may
motu proprio or upon verified complaint of any interested party, remove or cancel,
after due notice and hearing, the registration of any national, regional or sectoral
party, organization or coalition on any of the following grounds:
x x x x
(8) It fails to participate in the last two (2) preceding elections or fails to
obtain at least two per centum (2%) of the votes cast under the party-list system in
the two (2) preceding elections for the constituency in which it has registered.
[Emphasis supplied.]
The COMELEC replicated this provision in COMELEC Resolution No. 2847 the Rules and
Regulations Governing the Election of the Party-List Representatives through the Party-List System
which it promulgated on June 25, 1996.
For the upcoming May 2010 elections, the COMELEC en banc issued on October 13, 2009
Resolution No. 8679 deleting several party-list groups or organizations from the list of registered
national, regional or sectoral parties, organizations or coalitions.
Among the party-list
organizations affected was PGBI; it was delisted because it failed to get 2% of the
votes cast in 2004 and it did not participate in the 2007 elections. Nevertheless, the
COMELEC stated in this Resolution that any national, regional sectoral party or organizations or
coalitions adversely affected can personally or through its authorized representative file a verified
opposition on October 26, 2009.
PGBI filed its Opposition to Resolution No. 8679, but likewise sought, through its pleading,
the admission ad cautelam of its petition for accreditation as a party-list organization under the
Party-List System Act. Among other arguments, PGBI asserted that:
(1)

The assailed resolution negates the right of movant and those similarly
situated to invoke Section 4 of R.A. No. 7941, which allows any party,
organization and coalition already registered with the Commission to no
longer register anew; the party though is required to file with the
Commission, not later than ninety (90) days before the election, a
manifestation of its desire to participate in the party-list system; since PGBI
filed a Request/Manifestation seeking a deferment of its participation in the
2007 elections within the required period prior to the 2007 elections, it has
the option to choose whether or not to participate in the next succeeding
election under the same conditions as to rights conferred and responsibilities
imposed;

(2)

The Supreme Courts ruling in G.R. No. 177548 Philippine Mines Safety
Environment Association, also known as MINERO v. Commission on
Elections cannot apply in the instant controversy for two reasons: (a) the
factual milieu of the cited case is removed from PGBIs; (b) MINERO, prior to
delisting, was afforded the opportunity to be heard, while PGBI and the 25
others similarly affected by Resolution No. 8679 were not. Additionally, the
requirement of Section 6(8) has been relaxed by the Courts ruling in G.R. No.
179271 (Banat v. COMELEC) and the exclusion of PGBI and the 25 other
party-list is a denial of the equal protection of the laws;

(3)

The implementation of the challenged resolution should be suspended

and/or aborted to prevent a miscarriage of justice in view of the failure to
notify the parties in accordance with the same Section 6(8) or R.A. No. 7941.
[2]

The COMELEC denied PGBIs motion/opposition for lack of merit.

First, the COMELEC observed that PGBI clearly misunderstood the import of Section 4 of
R.A. 7941.[3] The provision simply means that without the required manifestation or if a party or
organization does not participate, the exemption from registration does not arise and the party,
organization or coalition must go through the process again and apply for requalification; a request
for deferment would not exempt PGBI from registering anew.
Second, the MINERO ruling is squarely in point, as MINERO failed to get 2% of the votes in
2001 and did not participate at all in the 2004 elections.
Third, PGBI was given an opportunity to be heard or to seek the reconsideration of the
action or ruling complained of the essence of due process; this is clear from Resolution No. 8679
which expressly gave the adversely affected parties the opportunity to file their opposition.
As regards the alternative relief of application for accreditation, the COMELEC found the
motion to have been filed out of time, as August 17, 2009 was the deadline for accreditation
provided in Resolution 8646. The motion was obviously filed months after the deadline.
PGBI came to us in its petition for certiorari, arguing the same positions it raised with the
COMELEC when it moved to reconsider its delisting.
We initially dismissed the petition in light of our ruling in Philippine Mines Safety
Environment Association, also known as MINERO v. Commission on Elections (Minero);[4] we said
that no grave abuse of discretion exists in a ruling that correctly applies the prevailing law and
jurisprudence. Applying Section 6(8) of RA 7941, the Court disqualified MINERO under the
following reasoning:
Since petitioner by its own admission failed to get 2% of the votes in 2001
and did not participate at all in the 2004 elections, it necessarily failed to get at
least two per centum (2%) of the votes cast in the two preceding elections.
COMELEC, therefore, is not duty bound to certify it.
PGBI subsequently moved to reconsider the dismissal of its petition. Among other
arguments, PGBI claimed that the dismissal of the petition was contrary to law, the evidence and
existing jurisprudence. Essentially, PGBI asserts that Section 6(8) of RA 7941 does not apply if one
is to follow the tenor and import of the deliberations inclusive of the interpellations in Senate Bill
No. 1913 on October 19, 1994. It cited the following excerpts from the Records of the Senate:
Senator Gonzales: On the other hand, Mr. President, under ground no. (7),
Section 5 there are actually two grounds it states: Failure to participate in the
last two (2) preceding elections or its failure to obtain at least ten percent (10%) of
the votes case under the party-list system in either of the last two (2) preceding

elections for the constituency in which it has registered

In short, the first ground is that, it failed to participate in the last two (2) preceding
elections. The second is, failure to obtain at least 10 percent of the votes cast under
the party-list system in either of the last two preceding elections, Mr. President,
Senator Tolentino: Actually, these are two separate grounds.
Senator Gonzales: There are actually two grounds, Mr. President.
Senator Tolentino: Yes, Mr. President.[5] [Underscoring supplied.]
PGBI thus asserts that Section 6(8) does not apply to its situation, as it is obvious that it failed to
participate in one (1) but not in the two (2) preceding elections. Implied in this is that it also
failed to secure the required percentage in one (1) but not in the two (2) preceding elections.
Considering PGBIs arguments, we granted the motion and reinstated the petition in the
courts docket.
THE ISSUES
We are called upon to resolve: (a) whether there is legal basis for delisting PGBI; and (b)
whether PGBIs right to due process was violated.
OUR RULING
We find the petition partly impressed with merit.
a.

The Minero Ruling

Our Minero ruling is an erroneous application of Section 6(8) of RA 7941; hence, it cannot
sustain PGBIs delisting from the roster of registered national, regional or sectoral parties,
organizations or coalitions under the party-list system.
First, the law is clear the COMELEC may motu proprio or upon verified complaint of any
interested party, remove or cancel, after due notice and hearing, the registration of any national,
regional or sectoral party, organization or coalition if it: (a) fails to participate in the last two (2)
preceding elections; or (b) fails to obtain at least two per centum (2%) of the votes cast under the
party-list system in the two (2) preceding elections for the constituency in which it has registered.
[6] The word or is a disjunctive term signifying disassociation and independence of one thing
from the other things enumerated; it should, as a rule, be construed in the sense in which it
ordinarily implies, as a disjunctive word.[7] Thus, the plain, clear and unmistakable language of
the law provides for two (2) separate reasons for delisting.
Second, Minero is diametrically opposed to the legislative intent of Section 6(8) of RA 7941,
as PGBIs cited congressional deliberations clearly show.
Minero therefore simply cannot stand. Its basic defect lies in its characterization of the
non-participation of a party-list organization in an election as similar to a failure to garner the 2%
threshold party-list vote. What Minero effectively holds is that a party list organization that does
not participate in an election necessarily gets, by default, less than 2% of the party-list votes. To
be sure, this is a confused interpretation of the law, given the laws clear and categorical language
and the legislative intent to treat the two scenarios differently. A delisting based on a mixture or
fusion of these two different and separate grounds for delisting is therefore a strained application
of the law in jurisdictional terms, it is an interpretation not within the contemplation of the
framers of the law and hence is a gravely abusive interpretation of the law.[8]

What we say here should of course take into account our ruling in Barangay Association for
Advancement and National Transparency v. COMELEC[9] (Banat) where we partly invalidated the
2% party-list vote requirement provided in RA 7941 as follows:
We rule that, in computing the allocation of additional seats, the continued
operation of the two percent threshold for the distribution of the additional seats as
found in the second clause of Section 11(b) of R.A. No. 7941 is unconstitutional.
This Court finds that the two percent threshold makes it mathematically impossible
to achieve the maximum number of available party list seats when the number of
available party list seats exceeds 50. The continued operation of the two percent
threshold in the distribution of the additional seats frustrates the attainment of the
permissive ceiling that 20% of the members of the House of Representatives shall
consist of party-list representatives.
The disqualification for failure to get 2% party-list votes in two (2) preceding elections should
therefore be understood in light of the Banat ruling that party-list groups or organizations
garnering less than 2% of the party-list votes may yet qualify for a seat in the allocation of
additional seats.
We need not extensively discuss Banats significance, except to state that a party-list group
or organization which qualified in the second round of seat allocation cannot now validly be
delisted for the reason alone that it garnered less than 2% in the last two elections. In other
words, the application of this disqualification should henceforth be contingent on the percentage
of party-list votes garnered by the last party-list organization that qualified for a seat in the House
of Representatives, a percentage that is less than the 2% threshold invalidated in Banat. The
disqualification should now necessarily be read to apply to party-list groups or organizations that
did not qualify for a seat in the two preceding elections for the constituency in which it registered.
To reiterate, (a) Section 6(8) of RA 7941 provides for two separate grounds for delisting;
these grounds cannot be mixed or combined to support delisting; and (b) the disqualification for
failure to garner 2% party-list votes in two preceding elections should now be understood, in light
of the Banat ruling, to mean failure to qualify for a party-list seat in two preceding elections for the
constituency in which it has registered. This, we declare, is how Section 6(8) of RA 7941 should be
understood and applied. We do so under our authority to state what the law is,[10] and as an
exception to the application of the principle of stare decisis.
The doctrine of stare decisis et non quieta movere (to adhere to precedents and not to
unsettle things which are established) is embodied in Article 8 of the Civil Code of the Philippines
which provides, thus:
ART. 8. Judicial decisions applying or interpreting the laws or the Constitution
shall form a part of the legal system of the Philippines.
The doctrine enjoins adherence to judicial precedents. It requires courts in a country to
follow the rule established in a decision of its Supreme Court. That decision becomes a
judicial precedent to be followed in subsequent cases by all courts in the land. The doctrine of
stare decisis is based on the principle that once a question of law has been examined and decided,
it should be deemed settled and closed to further argument.[11] The doctrine is grounded on the
necessity for securing certainty and stability of judicial decisions, thus:
Time and again, the court has held that it is a very desirable and
necessary judicial practice that when a court has laid down a principle of law as
applicable to a certain state of facts, it will adhere to that principle and apply it to all
future cases in which the facts are substantially the same. Stare decisis et non
quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis
simply means that for the sake of certainty, a conclusion reached in one case
should be applied to those that follow if the facts are substantially the

same, even though the parties may be different. It proceeds from the first principle
of justice that, absent any powerful countervailing considerations, like cases
ought to be decided alike. Thus, where the same questions relating to the same
event have been put forward by the parties similarly situated as in a previous case
litigated and decided by a competent court, the rule of stare decisis is a bar to
any attempt to relitigate the same issue.[12]
The doctrine though is not cast in stone for upon a showing that circumstances attendant in
a particular case override the great benefits derived by our judicial system from the doctrine of
stare decisis, the Court is justified in setting it aside.[13]
As our discussion above shows, the most compelling reason to abandon Minero exists; it
was clearly an erroneous application of the law an application that the principle of stability or
predictability of decisions alone cannot sustain. Minero did unnecessary violence to the language
of the law, the intent of the legislature, and to the rule of law in general. Clearly, we cannot allow
PGBI to be prejudiced by the continuing validity of an erroneous ruling. Thus, we now abandon
Minero and strike it out from our ruling case law.
We are aware that PGBIs situation a party list group or organization that failed to garner
2% in a prior election and immediately thereafter did not participate in the preceding election is
something that is not covered by Section 6(8) of RA 7941. From this perspective, it may be an
unintended gap in the law and as such is a matter for Congress to address. We cannot and do not
address matters over which full discretionary authority is given by the Constitution to the
legislature; to do so will offend the principle of separation of powers. If a gap indeed exists, then
the present case should bring this concern to the legislatures notice.
b.

The Issue of Due Process

On the due process issue, we agree with the COMELEC that PGBIs right to due process was
not violated for PGBI was given an opportunity to seek, as it did seek, a reconsideration of
Resolution No. 8679. The essence of due process, we have consistently held, is simply the
opportunity to be heard; as applied to administrative proceedings, due process is the opportunity
to explain ones side or the opportunity to seek a reconsideration of the action or ruling
complained of. A formal or trial-type hearing is not at all times and in all instances essential. The
requirement is satisfied where the parties are afforded fair and reasonable opportunity to explain
their side of the controversy at hand. What is frowned upon is absolute lack of notice and hearing
x x x.[14] We find it obvious under the attendant circumstances that PGBI was not denied due
process. In any case, given the result of this Resolution, PGBI has no longer any cause for
complaint on due process grounds.
WHEREFORE, premises considered, we GRANT the petition and accordingly ANNUL
COMELEC Resolution No. 8679 dated October 13, 2009 insofar as the petitioner PGBI is concerned,
and the Resolution dated December 9, 2009 which denied PGBIs motion for reconsideration in SPP
No. 09-004 (MP). PGBI is qualified to be voted upon as a party-list group or organization in the
coming May 2010 elections.
SO ORDERED
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