FERMIN MANAPAT, G.R. No.
110478 Petitioner, and Housing Corporation (PHHC), negotiated for the acquisition of the
- versus –
COURT OF APPEALS and NATIONAL HOUSING AUTHORITY, Respondents.
DECISION
NACHURA, J.:
For the resolution of the Court are three consolidated petitions for review
on certiorari under Rule 45 of the Rules of Court. G.R. No. 110478 assails the
May 27, 1993 Decision[2] of the Court of Appeals (CA) in CA-G.R. CV Nos.
10200-10212. G.R. No. 116176 questions the June 28, 1994 Decision[3] of
the appellate court in CA-G.R. CV No. 27159. G.R. Nos. 116491-503 assails
the March 2, 1994 and the July 25, 1994 Resolutions[4] of the CA also in CA-
G.R. CV Nos. 10200-10212.
The three-decade saga of the parties herein has for its subject parcels of land
forming part of what was originally known as the Grace Park Subdivision in
Caloocan City and formerly owned by the Roman Catholic Archbishop of
Manila (RCAM) and/or the Philippine Realty Corporation (PRC).
The Facts
Sometime in the 1960s, RCAM allowed a number of individuals to occupy
the Grace Park property on condition that they would vacate the premises
should the former push through with the plan to construct a school in the
area. The plan, however, did not materialize, thus, the occupants offered to
purchase the portions they occupied. Later, as they could not afford RCAMs
proposed price, the occupants, organizing themselves as exclusive members
of the Eulogio Rodriguez, Jr. Tenants Association, Inc., petitioned the
Government for the acquisition of the said property, its subdivision into
home lots, and the resale of the subdivided lots to them at a low price.[5]
Acting on the associations petition, the Government, in 1963, through the
Land Tenure Administration (LTA), later succeeded by the Peoples Homesite
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
property from RCAM/PRC. But because of the high asking price of RCAM and
the budgetary constraints of the Government, the latters effort to purchase
and/or to expropriate the property was discontinued. RCAM then decided
to effect, on its own, the subdivision of the property and the sale of the
individual subdivided lots to the public.[6] Petitioners Manapat and Lim and
respondents Loberanes, Quimque, Vega, Santos, Oracion and Mercado in
these consolidated cases were among those who purchased individual
subdivided lots of Grace Park directly from RCAM and/or PRC.[7]
A significant turn of events however happened in 1977 when the late
President Ferdinand E. Marcos issued Presidential Decree (PD) No. 1072,[8]
appropriating P1.2M out of the Presidents Special Operations Funds to cover
the additional amount needed for the expropriation of Grace Park. The
National Housing Authority (NHA), PHHCs successor, then filed several
expropriation proceedings over the already subdivided lots for the purpose
of developing Grace Park under the Zonal Improvement Program (ZIP) and
subdividing it into small lots for distribution and resale at a low cost to the
residents of the area.[9] The following cases were filed by the NHA with the
Regional Trial Court (RTC) of Caloocan City: C-6225, C-6226, C-6227, C-6228,
C-6229, C-6230, C-6231, C-6232, C-6233, C-6234, C-6235, C-6236, C-6237, C-
6238, C-6255 and C-6435.[10]
After due proceedings, the trial court rendered separate decisions
dismissing the expropriation cases, with the exceptions of Cases Nos. C-6233
and C-6236 in which it ordered the condemnation of the involved lots.[11]
On motion for reconsideration by the NHA in Cases Nos. C-6227, C-6228, C-
6230, C-6234, C-6235, C-6238 and C-6255, the trial court later amended its
decision, set aside its dismissal of the said cases, ordered the condemnation
of the involved lots and fixed the amount of just compensation at P180.00
per square meter. In Cases Nos. C-6225, C-6229, C-6231, C-6232, C-6237 and
C-6435, the RTC however denied NHAs motion for reconsideration.[12]
NHA eventually appealed to the CA the decisions in Cases Nos. C-6225, C-
6229, C-6231, C-6232, C-6237 and C-6435 on the issue of the necessity of
the taking, and the amended ruling in Cases Nos. C-6227, C-6228, C-6230, C-
1
6234, C-6235, C-6238 and C-6255 on the issue of just compensation.[13] The
CA consolidated the appeals and docketed them as CA-G.R. CV No. 10200-
10212. NHA likewise filed with the CA an appeal from the decision in C-6226,
which was docketed as CA-G.R. CV No. 27159.
On May 27, 1993, the appellate court rendered its Decision[14] in CA-G.R.
CV No. 10200-10212 disposing of the appealed cases as follows:
WHEREFORE, premises considered, judgment is hereby rendered:
1) Reversing and setting aside the decisions of dismissal in Cases Nos. C-
6225, C-6229, C-6231, C-6232, C-6237 and C-6435; and in lieu thereof an
order of condemnation is entered declaring that plaintiff-appellant NHA has
a lawful right to take the lots involved for the public use described in the
complaints;
2) Affirming the decisions in Case Nos. C-6227, C-6228, C-6234, C-6235, C-
238 and C-6255 insofar as said decision granted the expropriation; declaring
that plaintiff-appellant NHA has a lawful right to take the lots involved for
the public use stated in the complaint; but annulling and setting aside the
just compensation fixed by the trial court at P180.00 per square meter in the
said cases
3) Ordering the remand of all the appealed cases, except for Case No. C-
6230, to the trial court for determination of the just compensation to which
defendants are entitled in accordance with Rule 67 of the Revised Rules of
Court;
4) Finding the compromise agreement in Case No. C-6230, entitled, NHA v.
Aurora Dy dela Costa, et al. in accordance with law, and not contrary to
morals or public policy, and rendering judgment in accordance therewith;
5) Ordering Remedios Macato to be joined as defendant with Julia C. Diaz in
Case No. C-6227.
No pronouncement as to costs.
SO ORDERED.[15]
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
Rosemarie and Dolores Guanzon, two of the owners of the lots in C-6225,
filed before this Court a petition for review on certiorari of the aforesaid
decision of the appellate court [Their petition was docketed as G.R. Nos.
110462-74]. On September 5, 1994, we dismissed their petition for failure
to sufficiently show that the CA had committed any reversible error in the
challenged decision.[16] An Entry of Judgment was issued on February 2,
1995.[17]
Likewise, Julia Diez and Remedios Macato, the owners of the lots in C-6227,
assailed before us the afore-quoted CA decision through a petition under
Rule 45. On July 28, 1993, however, in G.R. No. 110770, we denied their
Motion for Extension of Time to file a petition for review on certiorari for
their failure to submit an affidavit of service of the motion as required by
Circular No. 19-91.[18] After denying their motion for reconsideration,[19]
we issued an Entry of Judgment on August 27, 1993.[20]
Petitioner Manapat, the defendant-landowner in C-6229, also elevated the
case before us via a petition for review on certiorari docketed as G.R. No.
110478.[21] We initially dismissed this petition for having been filed out of
time,[22] but we reinstated it on motion for reconsideration.[23]
In the meantime, the other defendants-landowners in the expropriation
casesRCAM/PRC in C-6225, Maximo Loberanes and Eladio Quimque in C-
6231, Alejandro Oracion, Gonzalo Mercado, Cesario Vega and Juanito Santos
in C-6435, and Remedios Macato in C-6227moved for the reconsideration of
the said May 27, 1993 Decision of the CA.[24] In the March 2, 1994
Resolution,[25] the appellate court resolved the motions in this wise:
WHEREFORE, premises considered, the motion for reconsideration of
movants Roman Catholic Archbishop of Manila and Philippine Realty
Corporation (in Special Civil Action No. 6225) and movant-intervenor
Remedios Macato (in Special Civil Action No. 6227) are DENIED.
The motions for reconsideration of movants Gonzalo Mercado, Cesario Vega
and Juanito Santos (in Special Civil Action No. 6435) and movants Maximo
Loberanes and Eladio Quimque (in Special Civil Action No. 6231) are
2
GRANTED. The motion for reconsideration of movant Alejandro Oracion (in
Special Civil Action No. 6435) is partially granted to the extent of Three
Hundred (300) square meters of Lot 22, Block 157. The decision of this Court
promulgated May 27, 1993 is accordingly MODIFIED. Lot No. 26, Block No.
157 owned by Cesario Vega and Juanito Santos, and Lot No. 4, Block No. 157
owned by Maximo Loberanes and Eladio Quimque are declared exempt
from expropriation and the corresponding complaints for expropriation (sic)
DISMISSED insofar as said lots are concerned. Lot No. 22, Block No. 157
owned by movant Alejandro Oracion is declared exempt from expropriation
to the extent of Three Hundred (300) square meters. Only the remaining
Ninety (90) square meters shall be the subject of expropriation, the portion
to be determined by the lower court in the manner most beneficial to the
owner and consistent with the objective of PD 1072.
In a separate development, the CA, on June 28, 1994, rendered its
Decision[30] in CA-G.R. CV No. 27159, reversing the RTCs ruling in C-6226.
The fallo of the decision reads:
WHEREFORE, FOREGOING PREMISES CONSIDERED, the appealed decision
dated October 29, 1986 is hereby REVERSED for want of merit. Let the
record of this case be remanded to the court of origin for further
proceedings.
IT IS SO ORDERED.[31]
Discontented with the appellate courts ruling, petitioner Domingo Lim, one
of the owners of the lots subject of C-6226, elevated the case to us via a
petition for review on certiorari docketed as G.R. No. 116176.[32]

SO ORDERED.[26]

Aggrieved by the said March 2, 1994 CA Resolution specifically with regard The Issues
to the exemption from expropriation of the lots of Loberanes, Quimque,
Thus, for resolution by this Court are the following consolidated cases: (1)
Mercado, Vega and Santos, and the partial exemption of the lot of Oracion,
G.R. No. 110478 of Manapat; (2) G.R. Nos. 116491-503 of the NHA; and (3)
NHA moved for the reconsideration of the same. In the subsequent July 25, G.R. No. 116176 of Lim.
1994 Resolution,[27] the appellate court denied NHAs motion, together
In G.R. No. 110487, petitioner Manapat argues in the main that, as he is also
with the belated motion of Vivencio S. de Guzman, the defendant-
a member of the tenant association, the beneficiary of the expropriation, it
landowner in C-6255. The dispositive portion of the July 25, 1994 Resolution
would be incongruous to take the land away from him only to give it back to
reads:WHEREFORE, the motions for reconsideration of defendant-appellant
him as an intended beneficiary. Accordingly, the CA, in its May 27, 1993
Vivencio S. de Guzman of the decision promulgated May 27, 1993 and of
Decision in CA-G.R. CV No. 10200-10212, should not have allowed the
plaintiff-appellant National Housing Authority of the resolution
expropriation of his lot. To further support his stance, Manapat raises the
promulgated March 2, 1994 are DENIED.
following grounds:
SO ORDERED.[28]
I
With the denial of its motion for reconsideration, NHA filed with this Court
THE COURT OF APPEALS ERRED IN HOLDING THAT THE ISSUANCE MADE IN
a Consolidated Petition for Review[29] under Rule 45, as aforesaid, assailing
THE EXERCISE OF LEGISLATIVE POWER, SPECIFYING THE LOTS TO BE
the March 2, 1994 and the July 25, 1994 Resolutions of the appellate court.
EXPROPRIATED AND THE PURPOSE FOR WHICH THEY ARE INTENDED,
NHAs petition was docketed as G.R. Nos. 116491-503 against respondents
REMOVES FROM THE JUDICIARY THE DETERMINATION OF THE NECESSITY
Loberanes and Quimque (in C-6231), Vega, Santos, Oracion and Mercado (in
OF THE TAKING, THERE BEING NO SHOWING OF ABUSE OF DISCRETION.[33]
C-6435).

3
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN

II
SUPERVENING EVENT RENDERS IMPROPER THE DISPOSITION BY THE COURT
OF APPEALS FOR AN ORDER OF CONDEMNATION DECLARING THAT NHA
HAS A LAWFUL RIGHT TO TAKE THE LOT OF FERMIN MANAPAT FOR
SUPPOSED PUBLIC USE AND FOR REMAND OF HIS CASE TO THE TRIAL COURT
FOR DETERMINATION OF JUST COMPENSATION.[34]
III
A. Republic Act 7279 passed in 1992 should operate prospectively and,
therefore, should not be given retroactive effect.[38]
Republic Act 7279 is a substantive and penal law with a penalty clause which
cannot apply retroactively especially to pending actions.[39]
B. Republic Act No. 7279 and PD 1072 are not in pari materia.[40]
The retroactive application of Article VI, Section 10 of RA 7279 will affect
vested rights of petitioner-appellant NHA arising from its exercise of the
power of eminent domain.[41]

THE COURT OF APPEALS SHOULD HAVE CONSIDERED THAT FERMIN II

MANAPAT IS NOT ONLY A BONA FIDE OCCUPANT IN THE GRACE PARK
The Honorable Court of Appeals erred in ignoring the impractical
SUBDIVISION FOR PURPOSES OF P.D. 1072 BUT LIKEWISE HAS A TRANSFER
consequences resulting from a selective expropriation of lots.[42]
CERTIFICATE OF TITLE NO. 42370 OF THE REGISTRY OF DEEDS FOR THE CITY
OF CALOOCAN OVER THE SAME LOT SOUGHT TO BE EXPROPRIATED WHICH
SHOULD NOT BE SUBJECT TO COLLATERAL ATTACK AS DISPOSED BY THE
COURT OF APPEALS.[35] In G.R. No. 116176, petitioner Lim, a non-member of the tenant association
who bought from RCAM/PRC four lots of the subdivided Grace Park
IV Subdivision,[43] argues as follows:
THE COURT OF APPEALS SHOULD HAVE CONSIDERED THAT THE EVENTUAL 1
BENEFICIARIES OF ITS BENEVOLENT EXPROPRIATION ARE SQUATTERS.[36]
Respondent NHA may not, as it would herein, legally re-group several
NHA, in its petition in G.R. Nos. 116491-503, primarily contends that the CA smaller lots into which a much bigger lot had previously been subdivided,
erred when it issued its March 2, 1994 Resolution and modified the May 27, and consider and treat them as one again for the purpose of subdividing it
1993 Decision in CA-G.R. CV No. 10200-10212 to the extent that it applied once more into still smaller lots for distribution to its supposed or intended
retroactively Article VI, Section 10 of Republic Act (R.A.) No. 7279, thus beneficiaries.[44]
exempting from expropriation the 300-sq m lots of respondents Loberanes,
Quimque, Vega, Santos, Oracion and Mercado. NHA summarized its 2
arguments as follows:
There really was no genuine necessity for the expropriation of the lots in
I question to satisfy the purpose thereof as alleged in the complaint
therefor.[45]
The Honorable Court of Appeals erred in applying retroactively Article VI,
Section 10 of Republic Act No. 7279 to the subject expropriation cases 3
instituted back in 1977 by petitioner-appellant NHA.[37]

4
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
Respondent Court did not sustain the clear finding of the trial court that no
evidence sufficient to prove its claim that the expropriation of said lots and
subdividing them again into much smaller lots for resale to their present
occupants would provide the latter with more healthful, decent and
peaceful surroundings and thus improve the quality of their lives was ever
presented by respondent NHA.[46]
Stripped of non-essentials, the petitions raise only one fundamental issue,
and that is, whether the NHA may validly expropriate the parcels of land
subject of these cases.
The Courts Ruling
The power of eminent domain is an inherent and indispensable power of the
State. Also called the power of expropriation, it is described as the highest
and most exact idea of property remaining in the government that may be
acquired for some public purpose through a method in the nature of a
compulsory sale to the State.[47] By virtue of its sovereign character, the
exercise of the power prevails over the non-impairment clause,[48] and is
clearly superior to the final and executory judgment rendered by a court in
an ejectment case.[49]
Being inherent, the power need not be specifically conferred on the
government by the Constitution. Section 9, Article III of the Constitution,
which mandates that private property shall not be taken for a public use
without just compensation, merely imposes a limit on the governments
exercise of the power and provides a measure of protection to the
individuals right to property.[50]
Just like its two companion fundamental powers of the State,[51] the power
of eminent domain is exercised by the Legislature. However, it may be
delegated by Congress to the President, administrative bodies, local
government units, and even to private enterprises performing public
services.[52]
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
Albeit the power partakes of a sovereign character, it is by no means
absolute. Its exercise is subject to limitations, one of which is, precisely,
Section 9, Article III of the Constitution.
Over the years and in a plethora of cases, this Court has recognized the
following requisites for the valid exercise of the power of eminent domain:
(1) the property taken must be private property; (2) there must be genuine
necessity to take the private property; (3) the taking must be for public use;
(4) there must be payment of just compensation; and (5) the taking must
comply with due process of law.[53] Accordingly, the question that this
Court must resolve is whether these requisites have been adequately
addressed.
It is incontrovertible that the parcels of land subject of these consolidated
petitions are private property. Thus, the first requisite is satisfied.
With respect to the second, it is well to recall that in Lagcao v. Judge
Labra,[54] we declared that the foundation of the right to exercise eminent
domain is genuine necessity, and that necessity must be of a public
character. As a rule, the determination of whether there is genuine necessity
for the exercise is a justiciable question.[55] However, when the power is
exercised by the Legislature, the question of necessity is essentially a
political question.[56] Thus, in City of Manila v. Chinese Community,[57] we
held:
The legislature, in providing for the exercise of the power of eminent
domain, may directly determine the necessity for appropriating private
property for a particular improvement for public use, and it may select the
exact location of the improvement. In such a case, it is well-settled that the
utility of the proposed improvement, the extent of the public necessity for
its construction, the expediency of constructing it, the suitableness of the
location selected and the consequent necessity of taking the land selected
for its site, are all questions exclusively for the legislature to determine, and
the courts have no power to interfere, or to substitute their own views for
those of the representatives of the people.
5
In the instant cases, the authority to expropriate came from Presidential
Decree No. 1072, issued by then President Ferdinand E. Marcos in 1977. At
that time, and as explicitly recognized under the 1973 Constitution,
President Marcos had legislative powers. Perforce, the expropriation of the
subject properties identified with specificity in the P.D. --- was directed by
legislation. The issue of necessity then assumed the nature of a political
question.
As to the third requisite of public use, we examine the purpose for which the
expropriation was undertaken by NHA. As set forth in its petition, NHA
justifies the taking of the subject property for the purpose of improving and
upgrading the area by constructing roads and installing facilities thereon
under the Governments zonal improvement program and subdividing them
into much smaller lots for distribution and sale at a low cost to qualified
beneficiaries, mostly underprivileged long-time occupants of Grace Park.
Around 510 families with approximately 5 members each will be benefited
by the project.[58] The only remaining obstacle in the completion of this
project is the lots subject of these consolidated petitions as the other lots in
Grace Park have already been expropriated.[59]
The Zonal Improvement Program (ZIP), being implemented for government
by NHA, draws breath from policy mandates found in the 1987
Constitution.[60] It is an integral part of the governments socialized housing
program which, in Sumulong v. Guerrero,[61] we deemed compliant with
the public use requirement, it being a program clearly devoted to a public
purpose. Justice Irene R. Cortes, speaking eloquently for the Court, said:
Socialized housing is defined as, the construction of dwelling units for the
middle and lower class members of our society, including the construction
of the supporting infrastructure and other facilities (Pres. Decree No. 1224,
par. 1). This definition was later expanded to include among others:
a) The construction and/or improvement of dwelling units for the middle
and lower income groups of the society, including the construction of the
supporting infrastructure and other facilities;
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
b) Slum clearance, relocation and resettlement of squatters and slum
dwellers as well as the provision of related facilities and services;
c) Slum improvement which consists basically of allocating homelots to the
dwellers in the area or property involved, rearrangement and re-alignment
of existing houses and other dwelling structures and the construction and
provision of basic community facilities and services, where there are none,
such as roads, footpaths, drainage, sewerage, water and power system,
schools, barangay centers, community centers, clinics, open spaces, parks,
playgrounds and other recreational facilities;
d) The provision of economic opportunities, including the development of
commercial and industrial estates and such other facilities to enhance the
total community growth; and
e) Such other activities undertaken in pursuance of the objective to provide
and maintain housing for the greatest number of people under Presidential
Decree No. 757. (Pres. Decree No. 1259, sec. 1)
xxxx
Specifically, urban renewal or redevelopment and the construction of low-
cost housing is recognized as a public purpose, not only because of the
expanded concept of public use but also because of specific provisions in the
Constitution. The 1973 Constitution made it incumbent upon the State to
establish, maintain and ensure adequate social services including housing
[Art. II, sec. 7]. The 1987 Constitution goes even further by providing that:
The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from
poverty through policies that provide adequate social services, promote full
employment, a rising standard of living and an improved quality of life for
all. [Art. II, sec. 9]
The state shall, by law, and for the common good, undertake, in cooperation
with the private sector, a continuing program of urban land reform and
housing which will make available at affordable cost decent housing and
basic services to underprivileged and homeless citizens in urban centers and
6
resettlement areas. It shall also promote adequate employment
opportunities to such citizens. In the implementation of such program the
State shall respect the rights of small property owners. (Art. XIII, sec. 9,
Emphasis supplied)
Housing is a basic human need. Shortage in housing is a matter of state
concern since it directly and significantly affects public health, safety, the
environment and in sum, the general welfare. The public character of
housing measures does not change because units in housing projects cannot
be occupied by all but only by those who satisfy prescribed qualifications. A
beginning has to be made, for it is not possible to provide housing for all
who need it, all at once.
Population growth, the migration to urban areas and the mushrooming of
crowded makeshift dwellings is a worldwide development particularly in
developing countries. So basic and urgent are housing problems that the
United Nations General Assembly proclaimed 1987 as the International Year
of Shelter for the Homeless to focus the attention of the international
community on those problems. The General Assembly is [s]eriously
concerned that, despite the efforts of Governments at the national and local
levels and of international organizations, the living conditions of the
majority of the people in slums and squatter areas and rural settlements,
especially in developing countries, continue to deteriorate in both relative
and absolute terms. [G.A. Res. 37/221, Yearbook of the United Nations 1982,
Vol. 36, p. 1043-4]
In the light of the foregoing, this Court is satisfied that "socialized housing"
falls within the confines of "public use". It is, particularly important to draw
attention to paragraph (d) of Pres. Dec. No. 1224 which should be construed
in relation with the preceding three paragraphs. Provisions on economic
opportunities inextricably linked with low-cost housing, or slum clearance,
relocation and resettlement, or slum improvement emphasize the public
purpose of the project.[62]
It need only be added, at this juncture, that 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
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
to state that whatever is beneficially employed for the general welfare
satisfies the requirement of public use.[63]
Still, petitioner Manapat insists that, being himself a beneficiary of the
expropriation (because he has been a long-time resident of Grace Park), it
would be incongruous for government to take his land away from him only
to give it back to him. This contention sadly fails to comprehend the public
purpose for the taking under the socialized housing program. The parcels of
land subject of the expropriation are, precisely, being taken so that they can
be subdivided into much smaller lots --- at an average of 66.5 square meters
per lot[64] --- for distribution to deserving dwellers in the area. Upon the
completion of the project, Manapat, and those similarly situated as he,
cannot assert any right to be awarded the very same lots they currently
occupy, nor be entitled to the same area of the land they now have.
Then, we have petitioner Lim and respondents Vega, Santos, Oracion, and
Mercado, who argue that the lots they own should not be expropriated are
already titled in their names and are very small in area, being already the
subdivided portions of the original Grace Park Subdivision.
We are not persuaded.
J. M. Tuason & Co., Inc. v. Land Tenure Administration[65] is instructive. In
that case, this Court adopted the dissenting opinion of Justice J. B. L. Reyes
in Republic v. Baylosis,[66] that the propriety of exercising the power of
eminent domain cannot be determined on a purely quantitative or area
basis, given that the Constitution speaks of lands, not of landed estates.
Speaking through Justice (later Chief Justice) Enrique M. Fernando, the
Court said:
This is not to say of course that property rights are disregarded. This is
merely to emphasize that the philosophy of our Constitution embodying as
it does what Justice Laurel referred to as its nationalistic and socialist traits
discoverable upon even a sudden dip into a variety of [its] provisions
although not extending as far as the destruction or annihilation of the rights
to property, negates the postulate which at one time reigned supreme in
American constitutional law as to their well-nigh inviolable character. This is
7
not so under our Constitution, which rejects the doctrine of laissez faire with
its abhorrence for the least interference with the autonomy supposed to be
enjoyed by the property owner. Laissez faire, as Justice Malcolm pointed out
as far back as 1919, did not take too firm a foothold in our jurisprudence.
Our Constitution is much more explicit. There is no room for it for laissez
faire. So Justice Laurel affirmed not only in the above opinion but in another
concurring opinion quoted with approval in at least two of our subsequent
decisions. We had occasion to reiterate such a view in the ACCFA case,
decided barely two months ago.
This particular grant of authority to Congress authorizing the expropriation
of land is a clear manifestation of such a policy that finds expression in our
fundamental law. So is the social justice principle enshrined in the
Constitution of which it is an expression, as so clearly pointed out in the
respective dissenting opinions of Justice J.B.L. Reyes and Chief Justice Paras
in the Baylosis case. Why it should be thus is so plausibly set forth in the
ACCFA decision, the opinion being penned by Justice Makalintal. We quote:
The growing complexities of modern society, however, have rendered this
traditional classification of the functions of government quite unrealistic,
not to say obsolete. The areas which used to be left to private enterprise
and initiative and which the government was called upon to enter
optionally, and only because it was better equipped to administer for the
public welfare than is any private individual or group of individuals, continue
to lose their well-defined boundaries and to be absorbed within activities
that the government must undertake in its sovereign capacity if it is to meet
the increasing social challenges of the times. Here as almost everywhere
else the tendency is undoubtedly towards a greater socialization of
economic forces. Here of course this development was envisioned, indeed
adopted as a national policy, by the Constitution itself in its declaration of
principle concerning the promotion of social justice.
In a more recent decision,[67] we had occasion to declare that the fact that
the property is less than -hectare and that only a few would actually benefit
from the expropriation does not diminish its public use character, inasmuch
as public use now includes the broader notion of indirect public benefit or
advantage, including in particular, urban land reform and housing.
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
The Courts departure from the land size or area test finds further affirmation
in its rulings in Mataas na Lupa Tenants Association, Inc. v. Dimayuga[68]
and the aforecited Sumulong v. Guerrero.[69]
Given this discussion, it is clear that public use, as a requisite for the exercise
of eminent domain in the instant cases, has been adequately fulfilled.
To satisfy the fourth requisite, we affirm the appellate courts disposition
that the subject cases be remanded to the trial court for the determination
of the amount of just compensation. Under case law, the said determination
is a judicial prerogative.[70] As to the observance of the fifth requisite, the
due process clause, in the expropriation proceedings, all the parties have
been given their day in court. That they are now before this Court is
attestation enough that they were not denied due process of law.
From the foregoing disquisitions, it is unmistakable that all the requirements
for the valid exercise of the power of eminent domain have been complied
with. Thus, our answer to the singular and fundamental issue in these
consolidated cases is: YES, the NHA may validly expropriate the subject
parcels of land.
One final matter: the propriety of the application by the CA of R.A. No. 7279,
otherwise known as the Urban Development and Housing Act of 1992.
The Court is not unaware of the condition now imposed by R.A. No. 7279[71]
that, for purposes of urban development and housing under the Act, where
expropriation is resorted to, parcels of land owned by small property owners
shall be exempted.[72] Small property owners are owners of residential
lands with an area not exceeding 300 sq m in highly urbanized cities and 800
sq m in other urban areas and who do not own any other real property.[73]
Invoking this limitation under the said law, the appellate court in the
questioned rulings exempted from expropriation the lots owned by
Loberanes, Quimque, Mercado, Vega and Santos, and partially exempted
the lot of Oracion.
The CAs ruling on this point is incorrect. R.A. No. 7279 was enacted in 1992,
almost two decades after the expropriation cases against the property
8
owners herein were instituted with the RTC in 1977. Nova constitutio futuris
formam imponere debet, non praeteritis. A new statute should affect the
future, not the past. The law looks forward, not backward.[74] Article 4 of
the Civil Code even explicitly declares, (l)aws shall have no retroactive effect,
unless the contrary is provided.[75] In these consolidated cases, the Court
finds that the language of R.A. No. 7279 does not suggest that the
Legislature has intended its provisions to have any retroactive application.
On the contrary, Section 49 of the said law indicates that it shall take effect
upon its publication in at least two (2) national newspapers of general
circulation.[76] The laws prospective application being clearly stated, the
Court cannot agree with the disposition of the appellate court that the
subject lots not exceeding 300 sq m are exempt from expropriation.
WHEREFORE, PREMISES CONSIDERED, the May 27, 1993 Decision of the
Court of Appeals in CA-G.R. CV No. 10200-10212 and the June 28, 1994
Decision in CA-G.R. CV No. 27159 are AFFIRMED; and the March 2, 1994 and
the July 25, 1994 Resolutions in CA-G.R. CV Nos. 10200-10212 are REVERSED
and SET ASIDE.
SO ORDERED.
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
G.R. No. 191945, March 11, 2015
NATIONAL POWER CORPORATION, Petitioner, v. SOCORRO T. POSADA,
RENATO BUENO, ALICE BALIN, ADRIAN TABLIZO, TEOFILO TABLIZO, AND
LYDIA T. OLIVO, SUBSTITUTED BY HER HEIRS, ALFREDO M. OLIVO, ALICIA O.
SALAZAR, ANITA O. ORDONO, ANGELITA O. LIM, AND ADELFA O. ESPINAS,
Respondents.
DECISION
LEONEN, J.:
When the taking of private property is no longer for a public purpose, the
expropriation complaint should be dismissed by the trial court. The case will
proceed only if the trial court's order of expropriation became final and
executory and the expropriation causes prejudice to the property owner.
Before this court is a Motion1 filed by the National Power Corporation
seeking to withdraw its Petition for Review2 dated June 4, 2010. The
Petition sought to reverse the Decision3 of the Court of Appeals dated
August 7, 2009, which affirmed the trial court's Decision recalling the Writ
of Possession issued in the National Power Corporation's favor.
The National Power Corporation instituted expropriation proceedings for
the acquisition of a right-of-way easement over parcels of land located in
Barangay Marinawa, Bato, Catanduanes owned by respondents Socorro T.
Posada, Renato Bueno, Alice Balin, Adrian Tablizo, Teofilo Tablizo, and Lydia
Tablizo.4 The expropriation w.as for the construction and maintenance of
9
its Substation Island Grid Project.5 The case was docketed as Civil Case No.
0008.6 The National Power Corporation offered the, price of P500.00 per
Structures and improvements consisting of the residential houses of
square meter. In their Answer, respondents objected to the offer and
[respondents] and others can be found on the property, hence if the
alleged that the value of the properties was P2,000.00 per square meter.7
expropriation proceeds, [respondents] would be constrained to leave their
homes to relocate.12

In the Order dated December 16, 2002, Branch 438 of the Regional Trial The National Power Corporation opposed the recommendation of the
Court of Virac, Catanduanes confirmed the National Power Corporation's commissioners, arguing that:
right to expropriate the properties and ordered the creation of a
a. the opinion given by the persons who live in the area should not be given
commission to determine the amount of just compensation to be paid to
weight because they are not experts in real estate appraisal;
respondents.9

b. the value of the land at the time of taking and not its potential as a
On January 28, 2003, the National Power Corporation filed a Notice to Take
building site is the criteria for determination of just compensation[;]
Possession before the court on the basis of Rule 67, Section 210 of the Rules
of Court. It alleged that it was entitled to a Writ of Possession in view of its
deposit with the Land Bank of the Philippines in the amount of P3,280.00,
alleging that it represented the provisional value of the properties.11 c. The Provincial Appraisal Committee valued the lot at P500.00 per square
meter;

On July 10, 2003, the court-appointed commissioners recommended a fair

market value of P1,500.00 per square meter based on the following d. The approved zonal values of real properties in Catanduanes classified as
considerations: Residential Regular (RR) is P105.00;

The location of the subject parcels of land, which is along the highway,
within a fast-growing community, ideal both for residential and business
e. The Schedule of Fair Market Values prescribed P160.00 for all lots along
purposes, about 3 1/2 kilometers from the capital town of Virac, a stones-
the national road from Marinawa Bridge to FICELCO;
throw from the seashore of Cabugao Bay and not too distant from "Maribina
Falls", a tourist attraction;

f. Only an easement of right-of-way shall be acquired over the properties of

the other defendants which remain classified as cocoland and as provided
The prevailing market value of the properties along the national highway
in [Republic Act No.] 6395 (NPC Charter), shall not exceed 10% of the market
ranges from P 1, 500.00 to P 2, 000.00 per square meter as per interview
value declared by the owner or administrator or anyone having legal interest
with the residents of the place;
in the property, or as determined by the assessor, whichever is lower.13

10
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
On November 19, 2003, the National Power Corporation amended its
Complaint stating that it needed to acquire portions of the properties,
instead of just an easement of right of way, for the construction of the
Substation Island Grid Project. For this reason, it deposited with Land Bank
of the Philippines the amount of P580,769.93, alleging that this represented
the value of the 3,954 square meters sought to be expropriated.14
The National Power Corporation filed an Urgent Ex Parte Motion for the
Issuance of a Writ of Possession.15 It also served respondents with a Notice
to Take Possession stating that "it shall enter and take possession of the
property on September 26, 2005."16
was the difference between value of structures and improvements
determined by the trial court (P827,000.00) and the amount initially
deposited by the National Power Corporation (P564,360.83).21
The National Power Corporation failed to deposit the additional amount.
The trial court issued an Order during the November 22, 2006 hearing for
the National Power Corporation to make the necessary deposit. The issue
on the amount of just compensation was also submitted for decision.22
On November 27, 2006, the trial court resolved the issue of just
compensation as follows:

WHEREFORE, all factors carefully evaluated and considered, this Court,

In the Order dated July 14, 2005, the trial court granted the Urgent Ex Parte
hereby, fixes the just compensation at TWO THOUSAND PESOS (P2,000.00)
Motion for the Issuance of a Writ of Possession and issued a Writ of
per square meter for the taking of the properties of [respondents] by
Possession.17
[petitioner].

Respondents filed a Motion to Lift and/or Suspend the Issuance of the Writ
LIKEWISE, in view of NPC's failure to comply with the Court's order dated
of Possession, which the trial court denied.18
June 5, 2006 and for misleading this Court when it filed its Motion for the
Issuance of Writ of Possession, this Court, hereby, RECALLS its order
granting said Motion and CANCELS the Writ of Possession.
Undaunted, respondents filed an Urgent Motion to Grant Defendants Time
to Remove their Houses and Improvements as well as Additional Deposit for
Use in Land Acquisition and Expenses for Transfer of their Respective
AND, AS A FINAL NOTE, the amount determined by the Court in said Order
Residential Houses.19
represents only the value of the structures and improvements and does not
include the value of the land. Even if said amount is fully. paid by NPC, still
it would not be entitled to a Writ of Possession until it has paid the value of
The trial court granted respondents' Motion in its Order dated June 5, 2006.
the land. And what should be its value? Is it the zonal valuation of the Bureau
It fixed the value of the structures and improvements on the land in the
of Internal Revenue? Under Section 4 of Rep. [A]ct. No. 8974, payment of
amount of P827,000.00, based on the value determined by the
one hundred [percent] (100%) of the value of the property based on the
commissioners. It ordered the National Power Corporation to deposit an
current relevant zonal valuation of the Bureau of Internal Revenue is
additional amount of P262,639.17.20 The trial court stated that this amount
required upon the filing of the complaint, and after due notice to the

11
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
defendant. This Court believes that this basis is used because the just
compensation is yet to be determined during the second stage of the
expropriation proceeding. In the instant case, the complaint has long been
filed, and the just compensation has already been determined above.
Therefore, it should now be the basis for the re-issuance of a Writ of
Possession - nay, even the transfer of ownership if fully paid.
During the pendency of the case before this court, the National Power
Corporation filed an Urgent Motion for the Issuance of a Temporary
Restraining Order35 dated December 13, 2012, which was received by this
court on January 7, 2013. Respondents, in turn, filed their Comments and
Opposition to the Urgent Motion for Issuance of a Temporary Restraining
Order.36

SO ORDERED.23 (Emphasis supplied) On March 11, 2013, this court issued a Resolution37 deferring action on the
Motion for the Issuance of a Temporary Restraining Order.
The National Power Corporation appealed the trial court's Decision to the
Court of Appeals.24 On August 7, 2009,25 the Court of Appeals rendered a
Decision denying the appeal.26 It held that the trial court committed no
On May 17, 2013, the National Power Corporation filed a Very Urgent
reversible error "in adopting the recommendation of the appointed
Motion to Resolve38 stating that "the delay in the possession of the subject
commissioners insofar as the value of the subject property is concerned."27
properties — intended for the Marinawa 10 MVA Sub-Station Project —
would adversely affect the implementation of the Codon-Virac
Transmission Lines[.]"39
The Court of Appeals also held that "the writ of possession was correctly
recalled by the lower court."28 Citing Republic v. Judge Gingoyon,29 it held,
that the National Power Corporation must first pay respondents the amount
In a turn of events, the National Power Corporation informed its counsel on
determined by the trial court.30 In the absence of proof that respondents
July 24, 2014 that it no longer needed the properties as it was set to acquire
were paid, the National Power Corporation cannot take possession of the
an alternative site.40 It also requested its counsel to withdraw Civil Case No.
property.31
0008 before the trial court because "it [was] impractical to pursue the
acquisition of the original site[.]"41

The National Power Corporation filed a Motion for Reconsideration, but this
was denied in the Resolution32 dated April 14, 2010. Hence, it filed a
Thus, the National Power Corporation, through counsel, filed the present
Petition for Review on Certiorari before this court.
Motion to Withdraw Appeal,42 praying for the withdrawal of its appeal
before this court and, ultimately, for its Amended Complaint before the trial
court to be dismissed.43
Respondents filed their Comment33 on September 17, 2010. The National
Power Corporation filed its Reply34 to the Comment, substantially
reiterating the arguments in its Petition.

12
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
We are asked to decide whether the National Power Corporation may be
allowed to withdraw its Petition for Review and whether the withdrawal has
the effect of dismissing its Amended Complaint before the trial court.
We grant the Motion to Withdraw the Petition for Review.
I lawful right to take the property sought to be condemned, for the public use
Expropriation proceedings for national infrastructure projects are governed
by Rule 67 of the Rules of Court and Republic Act No. 8974.44
The power of eminent domain is an inherent competence of the state. It is
essential to a sovereign. Thus, the Constitution does not explicitly define this
power but subjects it to a limitation: that it be exercised only for public use
and with payment of just compensation.45 Whether the use is public or
whether the compensation is constitutionally just will be determined finally
by the courts.
However, the manner of its exercise such as which government
instrumentality can be delegated with the power to condemn,' under what
conditions, and how may be limited by law. Republic Act No. 8974 does
these, but it should not be read as superseding the power of this court to
promulgate rules of procedure. Thus, our existing rules should be read in
conjunction with the law that limits and conditions the power of eminent
domain.
Expropriation, the procedure by which the government takes possession of
private property, is outlined primarily in Rule 67 of the Rules of Court. It
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
undergoes two phases. The first phase determines the propriety of the
action. The second phase determines the compensation to be paid to the
landowner. Thus:
There are two (2) stages in every action for expropriation. The first is
concerned with the determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its exercise in
the context of the facts involved in the suit. It ends with an order, if not of
dismissal of the action, "of condemnation declaring, that the plaintiff has a
or purpose described in the complaint, upon the payment of just
compensation to be determined as of the date of the filing of the
complaint." An order of dismissal, if this be ordained, would be a final one,
of course, since it finally disposes of the action and leaves nothing more to
be done by the Court on the merits. So, too, would an order of
condemnation be a final one, for thereafter, as the Rules expressly state, in
the proceedings before the Trial Court, "no objection to the exercise of the
right of condemnation (or the propriety thereof) shall be filed or heard. ["]
The second phase of the eminent domain action is concerned with the
determination by the Court of "the just compensation for the property
sought to be taken. " This is done by the Court with the assistance of not
more than three (3) commissioners. The order fixing the just compensation
on the basis of the evidence before, and findings of, the commissioners
would be final, too. It would finally dispose of the second stage of the suit,
and leave nothing more to be done by the Court regarding the issue.
Obviously, one or another of the parties may believe the order to be
erroneous in its appreciation of the evidence or findings of fact or otherwise.
Obviously, too, such a dissatisfied party may seek a reversal of the order by
taking an appeal therefrom.46 (Emphasis supplied, citations omitted)
The first phase of expropriation commences with the filing of the complaint.
It ends with the order of the trial court to proceed with the expropriation
and determination of just compensation. During the pendency of the
complaint before the trial court, the state may already enter and possess
the property subject to the guidelines in Rule 67 of the Rules of Court.
13

Rule 67 of the Rules of Court, however, is not the only set of rules that
governs the first phase of expropriation. On November 7, 2000, Congress
enacted Republic Act No. 8974 to govern the expropriation of private
property for national government infrastructure projects. The law qualifies
the manner by which the government may enter and take possession of the
property to be expropriated.
Rule 67, Section 2 of the Rules of Court states:
Sec. 2. Entry of plaintiff upon depositing value with authorized government
depositary. — Upon the filing of the complaint or at any time thereafter and
after due notice to the defendant, the plaintiff shall have the right to take or
enter upon the possession of the real property involved if he deposits with
the authorized government depositary an amount equivalent to the
assessed value of the property for purposes of taxation to be held by such
bank subject to the orders of the court. Such deposit shall be in money,
unless in lieu thereof the court authorizes the deposit of a certificate of
deposit of a government bank of the Republic of the Philippines payable on
demand to the authorized government depositary.
(Emphasis supplied)
Section 4 of Republic Act No. 8974, on the other hand, mandates:
Section 4. Guidelines for Expropriation Proceedings. - Whenever it is
necessary to acquire real property for the right-of-way or location for any
national government infrastructure project through expropriation, the
appropriate implementing agency shall initiate the expropriation
proceedings before the proper court under the following guidelines:
(a) Upon the filing of the complaint, and after due notice to the defendant,
the implementing agency shall immediately pay the owner of the property
the amount equivalent to the sum of (1) one hundred percent (100%) of the
value of the property based on the current relevant zonal valuation of the
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
Bureau of Internal Re venue. (BIR); and (2) the value of the improvements
and/or structures as determined under Section 7 hereof;
. . .
Upon compliance with the guidelines abovementioned, the court shall
immediately issue to the implementing agency an order to take possession
of the property and start the implementation of the project. (Emphasis
supplied)
As stated in Gingoyon, Republic Act No. 8974 "provides for a procedure
eminently more favorable to the property owner than Rule 67"47 since it
requires the immediate payment of the zonal value and the value of the
improvements on the land to the property owner before the trial court can
allow the government to take possession. In contrast, Rule 67 only requires
the government to deposit the assessed value of the property for it to enter
and take possession.
In its Petition, the National Power Corporation argues that the amount of
just compensation at P2,000.00 per square meter is excessive since the
zonal valuation of the Bureau of Internal Revenue classifies the property as
cocolana48 pegged at P4.15 per square meter, and the commissioners
merely "engaged in speculation and guess-work"49 when they arrived at
the amount."50
The National Power Corporation argues that the Writ of Possession should
not have been recalled because it already deposited P580,769.93, the
provisional amount required by Republic Act No. 8974. It argues that the
amount ordered by the trial court to be paid to respondents was the amount
of just compensation, which should have been distinguished from the
provisional amount required for the issuance of a Writ of Possession. The
14
deposit of the provisional amount was sufficient to be granted a Writ of
Possession and to take possession of the property.51
In their Comment, respondents argue that the Court of Appeals did not err
in sustaining the amount of just compensation determined by the trial court
since the value was based on location, costs of improvements, prevailing
market values of the properties similarly located, and opinions of the
residents in the area.52
Respondents also argue that the Court of Appeals correctly upheld the trial
court's recall of the Writ of Possession because there was no showing that
any payment was made to respondents, as required by Gingoyon.53
The purpose for the taking of private property was for the construction of
the National Power Corporation's Substation Island Grid Project. According
to the Implementing Rules and Regulations of Republic Act No. 8974,
projects related to "power generation, transmission and distribution"54 are
national infrastructure projects covered by the law. The National Power
Corporation must first comply with the guidelines stated in Republic Act No.
8974 before it can take possession of respondents' property.
The trial court allowed the National Power Corporation to take possession
of the properties because of its deposit with Land Bank of the Philippines of
the alleged provisional value. However, the trial court recalled the Writ of
Possession because the National Power Corporation failed to deposit the
additional amount.
We find that the trial court erred, not in recalling the Writ of Possession, but
in granting the Writ of Possession in the first place.
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
Section 4 of Republic Act No. 8974, unlike Rule 67, Section 2 of the Rules of
Civil Procedure, requires immediate payment to the landowner of 100% of
the value of the property based on the current relevant zonal valuation of
the Bureau of Internal Revenue. It is the Bureau of Internal Revenue, not the
court, which determines the zonal value.
The law also requires the immediate payment of the value of the
improvements and/or structures on the land before the trial court can issue
the Writ of Possession.
Thus, the trial court committed two errors. First, it based the value of the
improvements on the property on the determination made by the
commissioners, and not on the determination made by the National Power
Corporation, contrary to the requirements of Section 7 of Republic Act No.
8974:
Section 7. Valuation of Improvements and/or Structures. - The Department
of Public Works and Highways and other implementing agencies concerned,
in coordination with the local government units concerned in the acquisition
of right-of-way, site or location for any national government infrastructure
project, are hereby mandated to adopt within sixty (60) days upon approval
of this Act, the necessary implementing rules and regulations for the
equitable valuation of the improvements and/or structures on the land to
be expropriated.
The Implementing Rules and Regulations of Republic Act No. 8974 clarifies:
Section 10. Valuation of Improvements and/or Structures - Pursuant to
Section 7 of the Act, the Implementing Agency shall determine the valuation
of the improvements and/or structures on the land to be acquired using the
replacement cost method. The replacement cost of the
improvements/structures is defined as the amount necessary to replace the
15
improvements/structures, based on the current market prices for materials,
equipment, labor, contractor's profit and overhead, and all other attendant
costs associated with the acquisition and installation in place of the affected
improvements/structures. In the valuation of the affected
improvements/structures, the Implementing Agency shall consider, among
other things, the kinds and quantities of materials/equipment used,, the
location, configuration and other physical features of the properties, and
prevailing construction prices. (Emphasis supplied)
According to the law, it is the implementing agency, not the commissioners,
that determines the proffered value of the improvements and structures. A
Writ of Possession may be issued once there is confirmation by the trial
court of the proffered value.
The second error of the trial court occurred when it issued a Writ of
Possession on the basis of the National Power Corporation's deposit of the
alleged provisional value with Land Bank of the Philippines, not on its actual
payment to respondents. Even if the deposit of P5 80,769.93 was the correct
provisional value, it cannot be considered as compliance with Section 4 of
Republic Act No. 8974. In Gingoyon:
[T]he law plainly requires direct payment to the property owner, and not a
mere deposit with the authorized government depositary. Without such
direct payment, no writ of possession may be obtained.53 (Emphasis
supplied)
There are, of course, instances when immediate payment cannot be made
even if the implementing agency is willing to do so. The owner of the
property is not precluded from contesting the power of the implementing
agency to exercise eminent domain, the necessity of the taking, the public
character of its use, or the proffered' value by the implementing agency. In
these instances, the implementing agency may deposit the proffered value
with the trial court having jurisdiction over the expropriation proceedings.
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
Considering that the National Power Corporation failed to comply with the
guidelines in Republic Act No. 8974, a Writ of Possession should not have
been issued.
II
The recall of an improperly issued Writ of Possession is not the same as an
injunction.
In its Urgent Motion for the Issuance of a Temporary Restraining Order, the
National Power Corporation argued that it was unable to commence the
Substation Project as it was paralyzed by the trial court's Decision dated
November 27, 2006 recalling the issuance of the Writ of Possession in its
favor.56
The National Power Corporation manifested that the project was "intended
to resolve the six (6) to eight (8) hours of daily brownouts being suffered by
the residents of the province."57 It cited Section 3 of Republic Act No.
897558 and argued that the project cannot be restrained by the recall of a
previously issued Writ of Possession because this amounted to an injunctive
writ expressly prohibited by Section 4 of Republic Act No. 8975."59
Respondents, on the other hand, filed their Comments and Opposition to
the Urgent Motion for Issuance of a Temporary Restraining Order. They
argued that records of the First Catanduanes Electric Cooperative, Inc.
(FICELCO)60 showed that brownouts in the entire province only averaged
2.97 hours per day and not 6 to 8 hours as claimed by the National Power
Corporation. Contrary to the National Power Corporation's claims,
respondents never filed any motion for the issuance of a restraining order
16
or injunctive writ against the National Power Corporation. They argued that demanded. In Nerwin Industries Corporation v. PNOC-Energy Development
the trial court recalled the Writ of Possession upon a finding that the Corporation:63
National Power Corporation misled the trial court by making its own
A preliminary injunction is an order granted at any stage of an action or
interpretation of Section 4 of Republic Act No. 8974, in that a provisional
proceeding prior to the judgment or final order, requiring a party or a court,
deposit was sufficient compliance when the law requires immediate
agency or person, to refrain from a particular act or acts. It is an ancillary or
payment to the owner of the property.61
preventive remedy resorted to by a litigant to protect or preserve his rights
or interests during the pendency of the case. As such, it is issued only when
it is established that:
The National Power Corporation's argument that the recall of a Writ of
Possession amounts to an injunctive writ prohibited under Section 3 of
Republic Act No. 8975 is without merit.
(a)

The applicant is entitled to the relief demanded, and the whole or part of
Section 3 of Republic Act No. 8975 states: such relief consists in restraining the commission or continuance of the act
or acts complained of, or in requiring the performance of an act or acts,
Sec. 3. Prohibition on the Issuance of Temporary Restraining Orders,
either for a' limited period or perpetually; or
Preliminary Injunctions and Preliminary Mandatory Injunctions. - No court,
except the Supreme Court, shall issue any temporary restraining order,
preliminary injunction or preliminary mandatory injunction against the
(b)
government, or any of its subdivisions, officials or any person or entity,
whether public or private, acting under the government's direction, to The commission, continuance or non-performance of the act or acts
restrain, prohibit or compel the following acts: complained of during the litigation would probably work injustice to the
applicant; or
(a) Acquisition, clearance and development of the right-of-way and/or site
or location of any national government project (Emphasis supplied)

The recall of a Writ of Possession for failure to comply with the guidelines of
Section 4 of Republic Act No. 8974 is not the same as the issuance of an
injunctive writ. The first is an action by the trial court to correct an erroneous
issuance while the second is an ancillary remedy to preserve rights.
For an injunctive writ to be issued, parties must specifically pray for its
issuance. Under Rule 58, Section 4(a)62 of the Rules of Civil Procedure, a
preliminary injunction or temporary restraining order may be granted only
when, among other requisites, the applicant is entitled to the relief
(c)
A party, court, agency or a person is doing, threatening, or is attempting to
do, or is procuring or suffering to be done, some act or acts probably in
violation of the rights of the applicant respecting the subject of the action
or proceeding, and 'tending to render the judgment ineffectual.64
Section 3 of Republic Act No. 8975 contemplates only the issuance of an
injunctive writ by lower courts. In Republic v. Nolasco:65

17
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
What is expressly prohibited by the statute is the issuance of the provisional preliminary injunction or temporary restraining order against it. The trial
reliefs of temporary restraining orders, preliminary injunctions, and court did not issue any injunctive writ. In other words, it was the National
preliminary mandatory injunctions. It does not preclude the lower courts Power Corporation's own acts that prevented it from implementing its
from assuming jurisdiction over complaints or petitions that seek as ultimate infrastructure project.
relief the nullification or implementation of a national government
infrastructure project. A statute such as Republic Act No. 8975 cannot
diminish the constitutionally mandated judicial power to determine III
whether or not there has been a grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or instrumentality of
government.66 (Emphasis supplied)
In accordance, however, with Rule 67, Section 4 of the Rules of Civil
Philippine Ports Authority v. Cipres Stevedoring & Arrastre, Inc.67 adds: Procedure,69 the trial court proceeded with the second phase of
expropriation, that is, the determination of just compensation.
[I]t is settled that the sole object of a preliminary injunction, may it be
prohibitory or mandatory, is to preserve the status quo until the merits of
the case can be heard and the final judgment rendered. The status quo is
Just compensation as required by the Constitution is different from the
the last actual peaceable uncontested status which preceded the
provisional value required by Republic Act No. 8974. In Capitol Steel
controversy.68
Corporation v. PHIVIDEC Industrial Authority:70
In expropriation cases involving national infrastructure projects, the trial
Upon compliance with the requirements, a petitioner in an expropriation
court issues a Writ of Possession upon compliance by the implementing
case ... is entitled to a writ of possession as a matter of right and it becomes
agency of the guidelines stated in Section 4 of Republic Act No. 8974. If it is
the ministerial duty of the trial court to forthwith issue the writ of
later found that the guidelines were not complied with, the trial court recalls
possession. No hearing is required and the court neither exercises its
the Writ of Possession for being improperly issued.
discretion or judgment in determining the amount of the provisional value
of the properties to be expropriated as the legislature has fixed the amount
under Section 4 of R.A. 8974.
When a trial court recalls a Writ of Possession in an expropriation
proceeding, the parties do not revert to status quo, i.e. the status of the
parties before the expropriation complaint was filed. The trial court's order
To clarify, the payment of the provisional value as a prerequisite to the
of condemnation stands regardless of whether a Writ of Possession was
issuance of a writ of possession differs from the payment of just
already issued.
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. As the appellate court-
The National Power Corporation was not able to take possession of the explained:
property because it failed to comply with Republic Act No. 8974.
Respondents did not file an application for the issuance of a writ of

18
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
The first refers to the preliminary or provisional determination of the value The payment of a provisional value may also serve as indemnity for damages
of the property. It serves a double-purpose of pre-payment if the property in the event that the expropriation does not succeed. In City of Manila v.
is fully expropriated, and of an indemnity for damages if the proceedings are Alegar Corporation:72
dismissed. It is not a final determination of just compensation and may not
[T]he advance deposit required under Section 19 of the Local Government
necessarily be equivalent to the prevailing fair market value of the property.
Code73 constitutes an advance payment only in the event the expropriation
Of course, it may be a factor to be considered in the determination of just
prospers. Such deposit also has a dual purpose: as pre-payment if the
compensation.
expropriation succeeds and as indemnity for damages if it is dismissed. This
advance payment, a prerequisite for the issuance of a writ of possession,
should not be confused with payment of just compensation for the taking of
Just compensation, on the other hand, is the final determination of the fair
property even if it could be a factor in eventually determining just
market value of the property. It has been described as "the just and
compensation. If the proceedings fail, the money could be used to indemnify
complete equivalent of the loss which the owner of the thing expropriated
the owner for damages.74 (Emphasis supplied)
has to suffer by reason of the expropriation." Market values, has [sic] also
been described in a variety of ways as the "price fixed by the buyer and seller The National Power Corporation was only required to pay the provisional
in the open market in the usual and ordinary course of legal trade and value so that it could take possession of respondents' properties. Ordinarily,
competition; the price and value of the article established as shown by sale, the government, in accordance with Rule 67 or Republic Act No. 8974, would
public or private, in the ordinary way of business; the fair' value of the have already taken possession of the property before the proper amount of
property between one who desires to purchase and one who desires to sell; just compensation could be determined by the court.
the current price; the general or ordinary price for which property may be
sold in that locality.
However, the trial court had already determined the amount of just
There is no need for the determination with reasonable certainty of the final
compensation even before the National Power Corporation could take
amount of just compensation before the writ of possession may be
possession of the properties. Payment of the provisional value is not
issued.71 (Emphasis and underscoring in the original, citation omitted)
anymore enough. In Export Processing Zone Authority v. Judge Dulay:75
The statutory requirement to pay a provisional amount equivalent to the full
The determination of "just compensation" in eminent domain cases is a
Bureau of Internal Revenue zonal valuation does' not substitute for the
judicial function. The executive department or the legislature may make the
judicial determination of just compensation. The payment to the property
initial determinations but when a party claims a violation of the guarantee
owner of a preliminary amount is one way to ensure that property will not
in the Bill of Rights that private property may not be taken for public use
be condemned arbitrarily. It allows frontloading the costs of the exercise so
without just compensation, no statute, decree; or executive order can
that it is the government instrumentality that bears the burden and not the
mandate that its own determination shall prevail over the court's findings.
owner whose property is taken.
Much less can the courts be precluded from looking into the "justness" of
the decreed compensation.76 (Emphasis supplied)

19
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
Once the amount of just compensation has been determined, it stands to
reason that this is the amount that must be paid to the landowner as
compensation for his or her property. In the exercise of the power of
eminent domain, taking of private property necessarily includes its
possession. Government, then, must pay the proper amount of just
compensation, instead of the provisional value in order to enter and take
the private property.
IV
Before the issue of just compensation can even be considered by this court,
any question on the validity of the exercise of the power of eminent domain
must first pertain to its necessity. In Vda. de Ouano, et al. v. Republic, et
al.:77
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.
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]. " If the genuine public
necessity—the very reason or condition as it were— allowing, at the first
instance, the expropriation of a private land ceases or disappears, then
there is no more cogent point for the government's 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
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
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 citizen's own private gain, is offensive to
our laws.
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[.]78
(Emphasis supplied)
It is the state that bears the burden of proving that the taking of private
property is for a public purpose. If it fails in discharging this burden, it must
return the property to the private owner, subject to whatever damages
were incurred in the course of the taking.
In Heirs of Moreno v. Mactan-Cebu International Airport Authority, 79
private property was expropriated for the proposed expansion of Lahug
Airport in 1949.80 The property owners were assured that they would be
given a right to repurchase once Lahug Airport is closed or its operations are
transferred to Mactan Airport.81 In ,1991, Lahug Airport ceased operations
when Mactan Airport became fully operational. The former owners filed a
Complaint for Reconveyance to compel the repurchase of the expropriated
properties.82
This court considered the case "difficult" as it called for "a difficult but just
solution."83 In allowing the reconveyance, this court stated:
20
Mactan-Cebu International Airport Authority [v. Court of Appeals] is correct
in stating that one would not find an express statement in the Decision in
Civil Case No. R-1881 to the effect that "the [condemned] lot would return
to [the landowner] or that [the landowner] had a right to repurchase the
same if the purpose for which it was expropriated is ended or abandoned or
if the property was to be used other than as the Lahug Airport." This
omission notwithstanding,.and while the inclusion of this pronouncement in
the judgment of condemnation would have been ideal, such precision is not
absolutely necessary nor is it fatal to the cause of petitioners herein. No
doubt, the return or repurchase of the condemned properties of petitioners
could be readily justified as the manifest legal effect or consequence of the
trial court's 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.
The predicament of petitioners involves a constructive trust, one that is akin
to the implied trust referred to in Art. 1454 of the Civil Code, "If an absolute
conveyance of property is made in order to secure the performance of an
obligation of the grantor toward the grantee, a trust by virtue of law is
established. If the fulfillment of the obligation is offered by the grantor when
it becomes due, he may demand the reconveyance of the property to him."
In the case at bar, petitioners conveyed Lots Nos. 916 and 920 to the
government with the latter obliging itself to use the realties for the
expansion of Lahug Airport; failing to keep its bargain, the government can
be compelled by petitioners to reconvey the parcels of land to them,
otherwise, petitioners would be denied the use of their properties upon a
state of affairs that was not conceived nor contemplated when the
expropriation was authorized.
Although the symmetry between the instant case and the situation
contemplated by Art. 1454 is not perfect, the provision is undoubtedly
applicable. For, as explained by an expert on the law of trusts: "The only
problem of great importance in the field of constructive trusts is to decide
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
whether in the numerous and varying fact situations presented to the courts
there is a wrongful holding of property and hence a threatened unjust
enrichment of the defendant." Constructive trusts are fictions of equity
which are bound by no unyielding formula when they are used by courts as
devices to remedy any situation in which the holder of the legal title may
not in good conscience retain the beneficial interest.
. . . .
The rights and obligations between the constructive trustee and the
beneficiary, in this case, respondent MCIAA and petitioners over Lots Nos.
916 and 920, are echoed in Art. 1190 of the Civil Code, "When the conditions
have for their purpose the extinguishment of an obligation to give, the
parties, upon the fulfillment of said conditions, shall return to each other
what they have received . . . In case of the loss, deterioration or
improvement of the thing, the provisions which, with respect to the debtor,
are laid down in the preceding article shall be applied to the party who is
bound to return. ..."
Hence, respondent MCIAA as representative of the State is obliged to
reconvey Lots Nos. 916 and 920 to petitioners who shall hold the same
subject to existing liens thereon, i.e., leasehold right ofDPWH. In-return,
petitioners as if they were plaintiff beneficiaries of a constructive trust must-
restore to respondent MCIAA what they received as just compensation for
the expropriation of Lots Nos. 916 and 920 in Civil Case No. R-1881, i.e.,
P7.065.00 for Lot No. 916 and P9,291.00 for Lot No. 920 with consequential
damages by way of legal interest from 16 November 1947. Petitioners must
likewise pay respondent MCIAA the necessary expenses it may have
incurred in sustaining the properties and the monetary value of its services
in managing them to the extent that petitioners will be benefited thereby.
The government however may keep whatever income or fruits it may have
21
obtained from the parcels of land, in the same way thai petitioners need not
account for the interests that the amounts they received as just
The National Power Corporation now requests this court for leave to
compensation may have earned in the meantime. As a matter of justice and
withdraw this Petition on the ground that it was in the process of acquiring
convenience, the law considers the fruits and interests as the equivalent of
a vacant lot owned by FICELCO. Considering that eminent domain is the
each other.
taking of private property for public use, no expropriation proceeding can
continue if the property to be expropriated will not be for public use.

Under Art. 1189 of the Civil Code, "If the thing is improved by its nature, or
by time, the improvement shall inure to the benefit of the creditor . . .," the
creditor being the person who stands to receive something as a result of the
process of restitution. Consequently petitioners as creditors do not have to
settle as part of the process of restitution the appreciation in value of Lots
Nos. 916 and 920 which is the natural consequence of nature and time.
Petitioners need not also pay for improvements introduced by third parties,
i.e., DPWH, as the disposition of these properties is governed by existing
contracts and relevant provisions of law. As for the improvements that
respondent MCIAA may have made on Lots Nos. 916 and 920; if any,
petitioners must pay respondent their prevailing free market price in case
petitioners opt to buy them and respondent decides to sell. In other words,
if petitioners do not want to appropriate such improvements or respondent
does not choose to sell them, the improvements would have to be removed
without any obligation on the part of petitioners to pay any compensation
to respondent MCIAA for whatever it may have tangibly introduced
therein.84 (Emphasis supplied)
Heirs of Moreno illustrates the difficulty of determining the respective rights
of the parties once it has been determined that the expropriated properties
will no longer be devoted for a public purpose. Matters involving the
dismissal of an expropriation case or the return of expropriated property
must be determined on a case-to-case basis.
V not be required to continue the action, subject to-some well-defined
Respondents filed a Motion for Leave to File Comment to Petitioner's
Motion to Withdraw Appeal. They argue that the grant of a Motion to
Withdraw would be unjust. From their point of view, the National Power
Corporation cannot resort to a withdrawal of an appeal in order to invalidate
a judgment duly rendered by the trial court and affirmed by the Court of
Appeals. They state that they have no objection to the withdrawal of the
appeal, but they object to the dismissal of the Amended Complaint before
the trial court. They propose that the effect of withdrawing the Petition for
Review is to make the Court of Appeals' Decision final and executory.86
In National Housing Authority v. Heirs of Guivelondo:87
In the early case of City of Manila v. Ruymann, the Court was confronted
with the question: May the petitioner, in an action for expropriation, after
he has been placed in possession of the property and before the termination
of the action, dismiss the petition? It resolved the issue in the affirmative
and held:
The right of the plaintiff to dismiss an action with the consent of the court is
universally recognized with certain well-defined exceptions. If the plaintiff
discovers that the action which he commenced was brought for the purpose
of enforcing a right or a benefit, the advisability or necessity of which he
later discovers no longer exists, or that the result of the action would be
different from what he had intended, then he should be permitted to
withdraw his action, subject to the approval of the court. The plaintiff should

22
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
exceptions, when it is not to his advantage to do so. Litigation should be However, the grant of the Motion to Withdraw carries with it the necessary
discouraged and not encouraged. Courts should not require parties to consequence of making the trial court's order of condemnation final and
litigate when they no longer desire to do so. Courts, in granting permission executory. In National Housing Authority:
to dismiss an action, of course, should always take into consideration the
effect which said dismissal would have upon the rights of the defendant.
Notably, [City of Manila and Water District] refer to the dismissal of an
Subsequently, in Metropolitan Water District v. De Los Angeles, the Court
action for eminent domain at the instance of the plaintiff during the
had occasion to apply the above-quoted ruling when the petitioner, during
pendency of the case. The rule is different where the case had been decided
the pendency of the expropriation case, resolved that the land sought to be
and the judgment had already become final and executory.
condemned was no longer necessary in the maintenance and operation of
its system of waterworks, it was held:

It is not denied that the purpose of the plaintiff was to acquire the land in . . . .
question for a public use. The fundamental basis then of all actions brought
for the expropriation of lands, under the power of eminent domain, is public
use. That being true, the very moment that it appears at any stage of the
In the case at bar, petitioner did not appeal the Order of the trial court dated
proceedings that the expropriation is not for a public use, the action must
December 10, 1999, which declared that it has a lawful right to expropriate
necessarily fail and should be dismissed, for the reason that the action
the properties of respondent Heirs of Isidro1 Guivelondo. Hence, the Order
cannot be maintained at all except when the expropriation is for some public
became final and may no longer be subject to review or reversal in any court.
use. That must be true even during the pendency of the appeal of [sic] at
A final and executory decision or order can no longer be disturbed or
any other stage of the proceedings. If, for example, during the trial in the
reopened no matter how erroneous it may be. Although judicial
lower court, it should be made to appear to the satisfaction of the court that
determinations are not infallible, judicial error should be corrected through
the expropriation is not for some public use, it would be the duty and the
appeals, not through repeated suits on the same claim.
obligation of the trial court to dismiss the action. And even during the
pendency of the appeal, if it should be made to appear to the satisfaction of
the appellate court that the expropriation is not for public use, then it would
become the duty and the obligation of the appellate court to dismiss it.88 . . . .
(Emphasis supplied)

Considering that the National Power Corporation is no longer using
respondents' properties for the purpose of building the Substation Project,
it may be allowed to discontinue with the expropriation proceedings,
subject to the approval of the court.
Respondent landowners had already been prejudiced by the expropriation
case. Petitioner cannot be permitted to institute condemnation proceedings
against respondents only to abandon it later when it finds the amount of
just compensation unacceptable. Indeed, our reprobation in the case of
Cosculluela v. Court of Appeals is apropos:

23
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
It is arbitrary and capricious for a government agency to initiate
expropriation proceedings, seize a person's property, allow the judgment of
the court to become final and executory and then refuse to pay on the
ground that there are no appropriations for the property earlier taken and
profitably used. We condemn in the strongest possible terms the cavalier
attitude of government officials who adopt such a despotic and
irresponsible stance.89 (Emphasis supplied)
The rule, therefore, is that expropriation proceedings must be dismissed
when it is determined that it is not for a public purpose, except when:
The withdrawal of the Petition before this court will have no practical effect
other than to make the trial court's order of condemnation final and
executory. In order to prevent this absurdity, the National Power
Corporation should file the proper Motion to Withdraw before the trial
court. It is now the burden of the National Power Corporation to plead and
prove to the trial court its reasons for discontinuing with the expropriation.
Respondents may also plead and prove damages incurred from the
commencement of the expropriation, if any.cralawred

WHEREFORE, the Motion to Withdraw Appeal dated August 28, 2014 is

GRANTED insofar as it withdraws the Petition for Review dated June 4, 2010.
First, the trial court's order already became final and executory;
The Motion for Leave to File Comment (to Petitioner's Motion to Withdraw
Appeal) dated September 30, 2014 is NOTED. This case is REMANDED to the
Regional Trial Court of Virac, Catanduanes, Branch 43 for appropriate action.
Second, the government already took possession of the property; and

SO ORDERED.
Lastly, the expropriation case already caused prejudice to the landowner.

The expropriation case is not automatically dismissed when the property

ceases to be for public use. The state must first file the appropriate Motion
to Withdraw before the trial court having jurisdiction over the proceedings.
The grant or denial of any Motion to Withdraw in an expropriation
proceeding is always subject to judicial discretion.

Respondents have not yet been deprived of their property since the National
Power Corporation was never able to take possession. We cannot determine
whether damages have been suffered as a result of the expropriation. This
case needs to be remanded to the trial court to determine whether
respondents have already been prejudiced by the expropriation.

24
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
[G.R. No. 127820. July 20, 1998]
MUNICIPALITY OF PARAAQUE, petitioner, vs. V.M. REALTY CORPORATION,
respondent.
DECISION
PANGANIBAN, J.:
A local government unit (LGU), like the Municipality of Paraaque, cannot
authorize an expropriation of private property through a mere resolution of
its lawmaking body. The Local Government Code expressly and clearly
requires an ordinance or a local law for the purpose. A resolution that
merely expresses the sentiment or opinion of the Municipal Council will not
suffice. On the other hand, the principle of res judicata does not bar
subsequent proceedings for the expropriation of the same property when
all the legal requirements for its valid exercise are complied with.
Statement of the Case
These principles are applied by this Court in resolving this petition for review
on certiorari of the July 22, 1996 Decision[1] of the Court of Appeals[2] in CA
GR CV No. 48048, which affirmed in toto[3] the Regional Trial Courts August
9, 1994 Resolution.[4] The trial court dismissed the expropriation suit as
follows:
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
The right of the plaintiff to exercise the power of eminent domain is not
disputed. However, such right may be exercised only pursuant to an
Ordinance (Sec. 19, R.A. No. 7160). In the instant case, there is no such
ordinance passed by the Municipal Council of Paraaque enabling the
Municipality, thru its Chief Executive, to exercise the power of eminent
domain. The complaint, therefore, states no cause of action.
Assuming that plaintiff has a cause of action, the same is barred by a prior
judgment. On September 29, 1987, the plaintiff filed a complaint for
expropriation involving the same parcels of land which was docketed as Civil
Case No. 17939 of this Court (page 26, record). Said case was dismissed with
prejudice on May 18, 1988 (page 39, record). The order of dismissal was not
appealed, hence, the same became final. The plaintiff can not be allowed to
pursue the present action without violating the principle of [r]es [j]udicata.
While defendant in Civil Case No. 17939 was Limpan Investment
Corporation, the doctrine of res judicata still applies because the judgment
in said case (C.C. No. 17939) is conclusive between the parties and their
successors-in-interest (Vda. de Buncio vs. Estate of the late Anita de Leon).
The herein defendant is the successor-in-interest of Limpan Investment
Corporation as shown by the Deed of Assignment Exchange executed on
June 13, 1990.
WHEREFORE, defendants motion for reconsideration is hereby granted. The
order dated February 4, 1994 is vacated and set aside.
This case is hereby dismissed. No pronouncement as to costs.
SO ORDERED.[5]
25
Factual Antecedents
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993,[6] the
Municipality of Paraaque filed on September 20, 1993, a Complaint for
expropriation[7] against Private Respondent V.M. Realty Corporation over
two parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917),
with a combined area of about 10,000 square meters, located at Wakas, San
Dionisio, Paraaque, Metro Manila, and covered by Torrens Certificate of
Title No. 48700. Allegedly, the complaint was filed for the purpose of
alleviating the living conditions of the underprivileged by providing homes
for the homeless through a socialized housing project.[8] Parenthetically, it
was also for this stated purpose that petitioner, pursuant to its Sangguniang
Bayan Resolution No. 577, Series of 1991,[9] previously made an offer to
enter into a negotiated sale of the property with private respondent, which
the latter did not accept.[10]
Finding the Complaint sufficient in form and substance, the Regional Trial
Court of Makati, Branch 134, issued an Order dated January 10, 1994,[11]
giving it due course. Acting on petitioners motion, said court issued an Order
dated February 4, 1994,[12] authorizing petitioner to take possession of the
subject property upon deposit with its clerk of court of an amount
equivalent to 15 percent of its fair market value based on its current tax
declaration.
On February 21, 1994, private respondent filed its Answer containing
affirmative defenses and a counterclaim,[13] alleging in the main that (a)
the complaint failed to state a cause of action because it was filed pursuant
to a resolution and not to an ordinance as required by RA 7160 (the Local
Government Code); and (b) the cause of action, if any, was barred by a prior
judgment or res judicata. On private respondents motion, its Answer was
treated as a motion to dismiss.[14] On March 24, 1994,[15] petitioner filed
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
its opposition, stressing that the trial courts Order dated February 4, 1994
was in accord with Section 19 of RA 7160, and that the principle of res
judicata was not applicable.
Thereafter, the trial court issued its August 9, 1994 Resolution[16] nullifying
its February 4, 1994 Order and dismissing the case. Petitioners motions for
reconsideration and transfer of venue were denied by the trial court in a
Resolution dated December 2, 1994.[17] Petitioner then appealed to
Respondent Court, raising the following issues:
1. Whether or not the Resolution of the Paraaque Municipal Council No. 93-
95, Series of 1993 is a substantial compliance of the statutory requirement
of Section 19, R.A. 7180 [sic] in the exercise of the power of eminent domain
by the plaintiff-appellant.
2. Whether or not the complaint in this case states no cause of action.
3. Whether or not the strict adherence to the literal observance to the rule
of procedure resulted in technicality standing in the way of substantial
justice.
4. Whether or not the principle of res judicata is applicable to the present
case.[18]
As previously mentioned, the Court of Appeals affirmed in toto the trial
courts Decision. Respondent Court, in its assailed Resolution promulgated
on January 8, 1997,[19] denied petitioners Motion for Reconsideration for
lack of merit.
26

Hence, this appeal.[20]
The Issues
Before this Court, petitioner posits two issues, viz.:
1. A resolution duly approved by the municipal council has the same force
and effect of an ordinance and will not deprive an expropriation case of a
valid cause of action.
2. The principle of res judicata as a ground for dismissal of case is not
applicable when public interest is primarily involved.[21]
The Courts Ruling
The petition is not meritorious.
First Issue:
Resolution Different from an Ordinance
Petitioner contends that a resolution approved by the municipal council for
the purpose of initiating an expropriation case substantially complies with
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
the requirements of the law[22] because the terms ordinance and
resolution are synonymous for the purpose of bestowing authority [on] the
local government unit through its chief executive to initiate the
expropriation proceedings in court in the exercise of the power of eminent
domain.[23] Petitioner seeks to bolster this contention by citing Article 36,
Rule VI of the Rules and Regulations Implementing the Local Government
Code, which provides: If the LGU fails to acquire a private property for public
use, purpose, or welfare through purchase, the LGU may expropriate said
property through a resolution of the Sanggunian authorizing its chief
executive to initiate expropriation proceedings.[24] (Italics supplied.)
The Court disagrees. The power of eminent domain is lodged in the
legislative branch of government, which may delegate the exercise thereof
to LGUs, other public entities and public utilities.[25] An LGU may therefore
exercise the power to expropriate private property only when authorized by
Congress and subject to the latters control and restraints, imposed through
the law conferring the power or in other legislations.[26] In this case, Section
19 of RA 7160, which delegates to LGUs the power of eminent domain, also
lays down the parameters for its exercise. It provides as follows:
Section 19. Eminent Domain. A local government unit may, through its chief
executive and acting pursuant to an ordinance, exercise the power of
eminent domain for public use, or purpose, or welfare for the benefit of the
poor and the landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent laws: Provided, however, That
the power of eminent domain may not be exercised unless a valid and
definite offer has been previously made to the owner, and such offer was
not accepted: Provided, further, That the local government unit may
immediately take possession of the property upon the filing of the
expropriation proceedings and upon making a deposit with the proper court
of at least fifteen percent (15%) of the fair market value of the property
based on the current tax declaration of the property to be expropriated:
Provided, finally, That, the amount to be paid for the expropriated property
27
shall be determined by the proper court, based on the fair market value at
the time of the taking of the property. (Emphasis supplied)
Thus, the following essential requisites must concur before an LGU can
exercise the power of eminent domain:
1. An ordinance is enacted by the local legislative council authorizing the
local chief executive, in behalf of the LGU, to exercise the power of eminent
domain or pursue expropriation proceedings over a particular private
property.
2. The power of eminent domain is exercised for public use, purpose or
welfare, or for the benefit of the poor and the landless.
3. There is payment of just compensation, as required under Section 9,
Article III of the Constitution, and other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the
property sought to be expropriated, but said offer was not accepted.[27]
In the case at bar, the local chief executive sought to exercise the power of
eminent domain pursuant to a resolution of the municipal council. Thus,
there was no compliance with the first requisite that the mayor be
authorized through an ordinance. Petitioner cites Camarines Sur vs. Court of
Appeals[28] to show that a resolution may suffice to support the exercise of
eminent domain by an LGU.[29] This case, however, is not in point because
the applicable law at that time was BP 337,[30] the previous Local
Government Code, which had provided that a mere resolution would enable
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN
an LGU to exercise eminent domain. In contrast, RA 7160,[31] the present
Local Government Code which was already in force when the Complaint for
expropriation was filed, explicitly required an ordinance for this purpose.
We are not convinced by petitioners insistence that the terms resolution and
ordinance are synonymous. A municipal ordinance is different from a
resolution. An ordinance is a law, but a resolution is merely a declaration of
the sentiment or opinion of a lawmaking body on a specific matter.[32] An
ordinance possesses a general and permanent character, but a resolution is
temporary in nature. Additionally, the two are enacted differently -- a third
reading is necessary for an ordinance, but not for a resolution, unless
decided otherwise by a majority of all the Sanggunian members.[33]
If Congress intended to allow LGUs to exercise eminent domain through a
mere resolution, it would have simply adopted the language of the previous
Local Government Code. But Congress did not. In a clear divergence from
the previous Local Government Code, Section 19 of RA 7160 categorically
requires that the local chief executive act pursuant to an ordinance. Indeed,
[l]egislative intent is determined principally from the language of a statute.
Where the language of a statute is clear and unambiguous, the law is applied
according to its express terms, and interpretation would be resorted to only
where a literal interpretation would be either impossible or absurd or would
lead to an injustice.[34] In the instant case, there is no reason to depart from
this rule, since the law requiring an ordinance is not at all impossible, absurd,
or unjust.
Moreover, the power of eminent domain necessarily involves a derogation
of a fundamental or private right of the people.[35] Accordingly, the
manifest change in the legislative language -- from resolution under BP 337
to ordinance under RA 7160 -- demands a strict construction. No species of
property is held by individuals with greater tenacity, and is guarded by the
28
Constitution and laws more sedulously, than the right to the freehold of
inhabitants. When the legislature interferes with that right and, for greater
In its Brief filed before Respondent Court, petitioner argues that its
public purposes, appropriates the land of an individual without his consent,
Sanguniang Bayan passed an ordinance on October 11, 1994 which
the plain meaning of the law should not be enlarged by doubtful
reiterated its Resolution No. 93-35, Series of 1993, and ratified all the acts
interpretation.[36]
of its mayor regarding the subject expropriation.[40]

Petitioner relies on Article 36, Rule VI of the Implementing Rules, which

This argument is bereft of merit. In the first place, petitioner merely alleged
requires only a resolution to authorize an LGU to exercise eminent domain.
the existence of such an ordinance, but it did not present any certified true
This is clearly misplaced, because Section 19 of RA 7160, the law itself, surely
copy thereof. In the second place, petitioner did not raise this point before
prevails over said rule which merely seeks to implement it.[37] It is axiomatic
this Court. In fact, it was mentioned by private respondent, and only in
that the clear letter of the law is controlling and cannot be amended by a
passing.[41] In any event, this allegation does not cure the inherent defect
mere administrative rule issued for its implementation. Besides, what the
of petitioners Complaint for expropriation filed on September 23, 1993. It is
discrepancy seems to indicate is a mere oversight in the wording of the
hornbook doctrine that:
implementing rules, since Article 32, Rule VI thereof, also requires that, in
exercising the power of eminent domain, the chief executive of the LGU
must act pursuant to an ordinance.
x x x in a motion to dismiss based on the ground that the complaint fails to
state a cause of action, the question submitted before the court for
determination is the sufficiency of the allegations in the complaint itself.
In this ruling, the Court does not diminish the policy embodied in Section 2,
Whether those allegations are true or not is beside the point, for their truth
Article X of the Constitution, which provides that territorial and political
is hypothetically admitted by the motion. The issue rather is: admitting them
subdivisions shall enjoy local autonomy. It merely upholds the law as
to be true, may the court render a valid judgment in accordance with the
worded in RA 7160. We stress that an LGU is created by law and all its
prayer of the complaint?[42]
powers and rights are sourced therefrom. It has therefore no power to
amend or act beyond the authority given and the limitations imposed on it
by law. Strictly speaking, the power of eminent domain delegated to an LGU
is in reality not eminent but inferior domain, since it must conform to the The fact that there is no cause of action is evident from the face of the
limits imposed by the delegation, and thus partakes only of a share in Complaint for expropriation which was based on a mere resolution. The
eminent domain.[38] Indeed, the national legislature is still the principal of absence of an ordinance authorizing the same is equivalent to lack of cause
the local government units, which cannot defy its will or modify or violate of action. Consequently, the Court of Appeals committed no reversible error
it.[39] in affirming the trial courts Decision which dismissed the expropriation suit.

Complaint Does Not State a Cause of Action Second Issue:

29
CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN

Eminent Domain Not Barred by Res Judicata
As correctly found by the Court of Appeals[43] and the trial court,[44] all the
requisites for the application of res judicata are present in this case. There
is a previous final judgment on the merits in a prior expropriation case
involving identical interests, subject matter and cause of action, which has
been rendered by a court having jurisdiction over it.
Be that as it may, the Court holds that the principle of res judicata, which
finds application in generally all cases and proceedings,[45] cannot bar the
right of the State or its agent to expropriate private property. The very
nature of eminent domain, as an inherent power of the State, dictates that
the right to exercise the power be absolute and unfettered even by a prior
judgment or res judicata. The scope of eminent domain is plenary and, like
police power, can reach every form of property which the State might need
for public use.[46] All separate interests of individuals in property are held
of the government under this tacit agreement or implied reservation.
Notwithstanding the grant to individuals, the eminent domain, the highest
and most exact idea of property, remains in the government, or in the
aggregate body of the people in their sovereign capacity; and they have the
right to resume the possession of the property whenever the public interest
requires it.[47] Thus, the State or its authorized agent cannot be forever
barred from exercising said right by reason alone of previous non-
compliance with any legal requirement.
thereafter complying with this requirement, as prescribed by law, and
subsequently exercising its power of eminent domain over the same
property.[48] By the same token, our ruling that petitioner cannot exercise
its delegated power of eminent domain through a mere resolution will not
bar it from reinstituting similar proceedings, once the said legal requirement
and, for that matter, all others are properly complied with. Parenthetically
and by parity of reasoning, the same is also true of the principle of law of
the case. In Republic vs De Knecht,[49] the Court ruled that the power of the
State or its agent to exercise eminent domain is not diminished by the mere
fact that a prior final judgment over the property to be expropriated has
become the law of the case as to the parties. The State or its authorized
agent may still subsequently exercise its right to expropriate the same
property, once all legal requirements are complied with. To rule otherwise
will not only improperly diminish the power of eminent domain, but also
clearly defeat social justice.
WHEREFORE, the petition is hereby DENIED without prejudice to petitioners
proper exercise of its power of eminent domain over subject property. Costs
against petitioner.
SO ORDERED.

While the principle of res judicata does not denigrate the right of the State
to exercise eminent domain, it does apply to specific issues decided in a
previous case. For example, a final judgment dismissing an expropriation
suit on the ground that there was no prior offer precludes another suit
raising the same issue; it cannot, however, bar the State or its agent from

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CONSTI II | ATTY. PASCUAL | EMINENT DOMAIN | TAN