G.R. No.

L-18315 September 29, 1962

ERNESTO CAMPOS and FLORENCIO OROC, petitioners-

appellants, vs. ESTEBAN DEGAMO and FELINO
PALARCA, Respondents.

Tranquilino O. Calo, Jr. for petitioners-appellants.

Ismael B. Sanchez and Edelmiro A. Amante for respondents-
appellees.

PAREDES, J.: chanrobles virtual law library

The complaint, styled "Quo warranto", filed on September

27, 1960, alleges that in the election of November, 1959,
petitioners Ernesto Campos and Florencio Oroc were elected and
proclaimed councilor No. 1 and councilor No. 2, respectively, of the
municipality of Carmen, Agusan; that on December 7, 1959,
respondents Esteban Degamo and Felino Palarca were proclaimed
Mayor and Vice Mayor, respectively, of the said municipality, not
withstanding the protest and request that the proclamation be
suspended on the ground that the Board of Canvassers used in their
canvass for election in Precinct 6, the election return coming from
the Provincial Treasurer's Office, inspite of the fact that the copy of
election return in the hands of the municipal treasury of Carmen
was available; that there was no valid canvass for the offices of
Mayor and Vice Mayor effected and the respondents could not
legally occupy the said positions; that on August 8, 1960, the
respondents stalled their own offices in a temporary building near
the municipal hall, and appointed policemen, with the approval of
the Provincial Treasurer; and that petitioner made verbal demands
upon respondents to stop forming the duties and functions of said
offices, but respondents denied and refused, thereby making the
public believe they were the lawful officials of said municipality.
Petitioners, therefore, prayed (a) that a writ quo warranto be issued
ousting and excluding respondents Degamo and Palarca from the
office of mayor and vice-mayor of Carmen, respectively; and that
they be declared entitled to said offices and placed forthwith
possession thereof. chanroblesvirtualawlibrarychanrobles virtual law library

Respondents answering, after the usual admissions and

denials, averred that the Board of Canvassers was created and
appointed by and acted upon instruction of, the Commission on
Elections; that they were duly elected by the people and validly
proclaimed by the said Board; that they occupied another building
as their office, because the then incumbent and defeated Municipal
Mayor Jose Malimit only vacated the municipal building on
September 22, 1960; and that on January 1960, respondent
Degamo, as new mayor, terminated the services of the policeman
appointed by ex-mayor Malimit, and on September 22, 1960, the
Philippine Constabulary disarmed all the policemen appointed by
said Ex-Mayor. As affirmative defenses, respondents claimed that
(1) the petition was filed outside the reglementary period; (2) there
was no sufficient cause of action; (3) the petitioners had no legal
personality or authority to file the present case; 4) the court had no
jurisdiction over the petition and the petitioners; (5) there was a
pending case of the same nature and of substantially the same
allegations against the respondents, before the same court; and (6)
the respondents took their oaths of office and performed their
respective duties starting January 1, 1960. In their counterclaim,
respondents prayed for moral damages and attorneys fees. chanroblesvirtualawlibrarychanrobles virtual law library

On January 28, 1961, the lower court issued the following

order:

The present quo warranto seeks the ouster of the

respondents Esteban Degamo and Felino Palarca from the positions
of mayor and vice-mayor, respectively, of Carmen, Agusan. The
allegations of the petition show that it is not based upon section 173
of the Revised Election Code because the petitioners Ernesto
Campos and Florencio Oroc were not candidates for the same
positions but for the positions of councilors of the municipality of
Carmen in the 1959 elections. Besides, the period of one week from
the proclamation for the filing of quo warranto under the election
law has long expired. chanroblesvirtualawlibrarychanrobles virtual law library
 This quo warranto may therefore be considered as an
ordinary quo warranto under the Rules of Court, but it cannot
prosper because it fails to state a cause of action, the petitioners
not being entitled to the positions of mayor and vice mayor of the
municipality of Carmen, Agusan, inasmuch as there is at present
pending before the Supreme Court a case of quo warranto over
these two positions filed by Jose Malimit and Vicente Acain against
the herein respondents Esteban Degamo and Felino Palarca.
Although the appealed case was dismissed by this Court on
jurisdictional grounds, the appellate court may reverse the decision
and order this Court to proceed with the hearing of said quo
warranto. Hence, this action is premature. chanroblesvirtualawlibrarychanrobles virtual law library

WHEREFORE, for lack of jurisdiction and cause of action, this

petition is hereby dismissed with costs against the petitioners.

Petitioners appealed directly to this Court on purely questions

of law, claiming in their brief that the lower court erred (1) in
declaring that they are not entitled to the said positions of Mayor
and Vice-Mayor; and (2) in declaring that the petition states no
cause of action.chanroblesvirtualawlibrarychanrobles virtual law library

The dominant facts brought out at the hearing, pleadings and

decisions of our court, of which we take judicial cognizance, are the
following: That neither petitioner Campos nor Oroc, was a candidate
for the office of mayor or vice-mayor of the municipality of Carmen
during the 1959 elections; that Degamo and Palarca were
candidates and duly elected mayor and vice-mayor of said
municipality in said election and their close rivals were Jose Malimit
for Mayor and Vicente Acain for Vice-Mayor; that when this present
action for quo warranto (Sp. Civil Case No. 117) was filed with the
CFI of Agusan, there was pending Quo warrantoproceeding filed by
Malimit and Acain against Degamo and Palarca for the same
offices 1 and an election protest was also filed by Malimit against
Degamo; 2 and that the complaint in special civil case No. 117 did
not set forth the names of Malimit and Acain who also claimed to be
entitled to the offices in question. chanroblesvirtualawlibrarychanrobles virtual law library
 Under the theory that Special Civil Action No. 117 comes
under the provisions of the Revised Election Code, its filing violates
section 173 thereof which states:

When a person who is not eligible is elected to a provincial or

Municipal Office, his right to the Office may be contested by any
registered candidate for the same office before the Court of First
Instance of the province, within one week after the proclamation of
his election, by filing a petition for quo warranto. The case shall be
conducted in accordance with the usual procedure and shall be
decided within thirty days from the filing of the complaint. A copy of
the decision shall be furnished the Commission on Elections.

Petitioners Campos and Oroc were not registered candidates

for the offices of mayor and vice-mayor, and the quo warranto was
not filed within one week after the proclamation of the persons
sought to be ousted - the respondents herein. The proclamation of
the respondents was made on December 7, 1959, and the
present quo warranto complaint was filed on September 27, 1960,
about a year later.chanroblesvirtualawlibrarychanrobles virtual law library

On the assumption that the present action is presented as an

ordinary quo warranto case (Rule 68, Rules of Court), same can not
also prosper. Section 7, Rule 68, provides:

What complaint for usurpation to set forth, and who may be

made parties. - When the action is against a person for usurping an
office or franchise, the complaint shall set forth the name of the
person who claims to be entitled thereto, if any, with an averment
of his right to the same and that the defendant is unlawfully in
possession thereof. All persons who claim to be entitled to the office
or franchise may be made parties, and their respective rights to
such office or franchise determined, in the same action.

Malimit and Acain who claimed to be entitled to the offices of

mayor and vice-mayor, respectively, are not parties herein. The
complaint must likewise allege that plaintiffs were duly elected to
such positions. Where the office in question is an elective one, the
complaint must show that the plaintiff was duly elected thereto
(Luna vs. Rodriguez, 38 Phil. 401; Acosta vs. Flor, 5 Phil. 18).
Petitioners-appellants Campos and Oroc, having been candidates
and elected for the office of councilors and not for the office of
mayor and vice-mayor, they are not the proper parties to institute
the present action. chanroblesvirtualawlibrarychanrobles virtual law library

Moreover, there being a pending case for quo

warranto before this court (G.R. No. L-17850 footnote No. 1, supra)
filed by Malimit and Acain against the same Degamo and Palarca,
for the office of mayor and vice-mayor of Carmen, respectively, the
filing of the case at bar was premature and the cause of action had
not as yet accrued. chanroblesvirtualawlibrarychanrobles virtual law library

The appeal is dismissed and the order appealed from is

affirmed, with costs against the petitioners-appellants.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes J.B.L.,

Dizon and Makalintal, JJ., concur.
Regala, J., took no part.

Endnotes:
1
G.R. No L-17850, Jose Malimit & Vicente Acain vs. Esteban Degamo
& Felino Palarca-appeal from the Order of Dismissal (Quo
warranto)-pending decision. chanroblesvirtualawlibrarychanrobles virtual law library

2
G.R. No. L-17951, Jose Malimit, Protestant-Appellant vs Esteban
Degamo, Protegee-Appellee-Appeal from the Order of Dismissal
(Election Protest) pending decision.

G. R. No. L-40295 July 31, 1978

ABRAHAM C. SISON, petitioner,

vs.
HON. EPI REY PANGRAMUYEN, Commissioner of Civil Service; GERONIMO LIPUMANO,
Mayor, Olongapo City; ALFREDO D. OCAMPO, Officer-in-Charge, Civil Service, Regional
Office No. 3, San Fernando, Pampanga; and EUREKA F. MALIWANAG, Assistant City Assesor,
Olongapo City, respondent.
Domingo & Domingo for petitioner.

G. J. de la Llana for respondent City Mayor.

M. S. Gerong for respondent Maliwanag.

BARREDO, J:

Petition denominated as for certiorari us and quo warranto and (1) seeking the annulment of the
actions of respondents Regional Director and commissioner of Civil Service in respectively attesting
and affirming such attestation of private respondent Eureka F. Maliwanag's appointment as Assistant
City Assessor of Olongapo City, extended by the respondent Mayor of said city on November 23,
1973, and (2) assailing the validity of said respondent Commissioner's decision of May 3, 1974
dismissing petitioner's protest and his resolution dated June 24, 1974 denying reconsideration of
said decision, and (3) further asking that respondent Commissioner be mandated to appoint
petitioner as such Assistant City Assessor and that private respondent Maliwanag be declared as
unlawfully usurping said position under a void and illegal appointment.

In sum, petitioner would want the Court to hold that since at the time of the appointment in dispute,
he was Chief Deputy Assessor exercising, according to his allegation, immediate administrative
control and supervision over respondent Maliwanag, who was Senior Deputy Assessor, and
inasmuch as he has superior educational and appropriate civil service eligibilities to those of said
respondent, the appointment aforementioned extended to the latter by respondent City Mayor is
illegal and contrary to law being violative of the rule of next-in-rank. Petitioner maintains that upon
the promotion of the Assistant City Assessor to the position of City Assessor, he, petitioner, instead
of respondent Maliwanag should have been appointed thereto.

We have carefully considered petitioner's contentions in his petition as well as his reply to the
answers of the respondents and, at best, We find the issues raised by him to be rather controversial,
with the result that it is difficult for Us to categorize respondent public official's impugned actuations
as tainted with grave abuse of discretion. Maliwanag's appointment was recommended by the City
Assessor and his reasons therefor, stated in said official's indorsement to the Mayor recommending
dismissal of petitioner's protest thereto and quoted in the record, are substantial and well taken, as,
in fact, they have been reviewed by respondent Commissioner and found to be sustainable, as he
did sustain them. We are loathe to substitute Our own judgment for that of the Commissioner of Civil
Service who is primarily charged with the administration of the Civil Service Law and rules and
regulations, absent, as in this case, convincing showing of palpable error or grave abuse of
discretion. After all as We see it, petitioner rests his case mostly on the Organization Chart and the
position description or CSC Form No. 122-D of respondent Maliwanag, prepared by petitioner
himself, which do not carry the approval of the Mayor, as Department Head, contrary to requirement
of Memorandum Circular No. 5, S. 1963 of the Commission of Civil Service touching on the basis for
determining the hierarchical relationships of positions, and, therefore, are not necessarily controlling.

Withal, the most fatal drawback of petitioner's cause is that he came to the courts out of time. As
already stated, the appointment in controversy was made on November 23, 1973 and respondent
Maliwanag assumed office on the strength thereof, albeit she claims she has not been paid her
salary. On the other hand, the petition herein was filed only on March 13, 1975, clearly more than
one year after the pretended right of petitioner to hold the office in question arose. This single
circumstance has closed the door for any judicial remedy in his favor.
Petitioner contends in regard to this point that Section 16 of Rule 66 invoked by private respondent
refers to actions of quo warranto and since his petition is also for certiorari and mandamus, said rule
is inapplicable. Such contention is not correct. As earlier noted in this decision, the allegations
supporting petitioner's cause or causes of action boil down to no more than the removal of
respondent Maliwanag from the position to which she has been appointed in order to be replaced by
him, with a new appointment in his favor. Necessarily, the ouster of Maliwanag by quo warranto has
to be based on a nullification o her appointment, which petitioner seeks, albeit unnecessarily, by
certiorari. His ultimate remedy, therefore, is quo warranto. Besides, even if it could be also viewed as
mandamus, it is already settled that his latter remedy prescribes also after one year. (Cornejo vs.
Sec. of Justice, L-32818, June 28, 1974, 57 SCRA 663.) And it is of no avail to petitioner that during
the intervening period of more than one year, he was seeking relief from the corresponding
administrative outhorities. The resort to such administrative remedy does not abate the period for the
judicial action. (Torres vs. Quintos, 88 Phil. 436; Galano vs. Roxas, G.R. L-31241, Sept. 12, 1975, 67
SCRA 8.)

WHEREFORE, the petition is dismissed and the restraining order heretofore issued is hereby lifted
effective immediately. No. costs.

Separate Opinions

AQUINO, J., dissenting:

Petitioner Abraham C. Sison, as the incumbent chief deputy assessor, is the qualified and competent
next-in-rank employee who should be promoted to the contested position of assistant city assessor
of Olongapo City, as contemplated in section 23 of the Civil Service Law. He is qualified for that
position because he is a provincial Assessor eligible and he holds a bachelor's degree in commerce.
Those qualifications are required for the position of assistant city assessor.

Respondent Eureka F. Maliwanag, who was appointed by the mayor to that position, is not qualified
because she is not a provincial assessor eligible and she is not a holder of a bachelor's degree. Her
appointment to the contested position is in violation of section 23. Hence, the Commissioner of Civil
Service revoked that appointment in his decision of May 3, 1974. However, upon motion for
reconsideration, the Commissioner approved that appointment in his decision of June 24, 1974.

It is incontestable that Sison is senior to Mrs. Maliwanag. He was appointed senior deputy assessor
of Olongapo City effective September 25, 1967. Then, he was promoted to the position of chief
deputy assessor of that city on September 1, 1969. On that date, Mrs. Maliwanag was appointed to
the position of senior deputy assessor, the position vacated by Sison (pp. 62-63, Rollo).

Thus, Sison (not Mrs. Maliwanag) was next in line for the position of assistant city assessor when
that position became vacant on November 23, 1973. There is no reason why Mrs. Maliwanag should
jump over Sison. The mayor should have apprised Sison as to why he was being bypassed and why
Mrs. Maliwanag was being appointed to that position. That legal requirement was not observed.

Although Sison's petition in this Court is for certiorari, mandamus and quo warranto, he has no
cause of action for quo warranto because Mrs. Maliwanag holds an appointment to the contested
position of assistant city assessor. She cannot be regarded as a usurper of that position. Sison's
petition should be treated as one for certiorari and mandamus only. Those special civil actions are
adequate for assailing the decisions of the Commissioner of Civil Service. The quo warranto aspect
of Sisons's petition should be disregarded.

Rule 65 of the Rules of Court does not fix any period for the filing of a petition
for certiorari and mandamus. The one-year period within which the petition for quo warranto should
be filled does not apply to Sison. His petition was delayed because, as he explained, he is a poor
man who cannot afford to embark on an expensive and protracted litigation.

I vote for the setting aside of the questioned decisions of the Commissioner of Civil Service. The
mayor should be directed to appoint Sison to the contested position. Mrs. Maliwanag should be
promoted to the position of chief of deputy assessor to be vacated by Sison.

Fernando (Chairman), Antonio, Concepcion, Jr. and Santos, JJ., concur.

Separate Opinions

AQUINO, J., dissenting:

Petitioner Abraham C. Sison, as the incumbent chief deputy assessor, is the qualified and competent
next-in-rank employee who should be promoted to the contested position of assistant city assessor
of Olongapo City, as contemplated in section 23 of the Civil Service Law. He is qualified for that
position because he is a provincial Assessor eligible and he holds a bachelor's degree in commerce.
Those qualifications are required for the position of assistant city assessor.

Respondent Eureka F. Maliwanag, who was appointed by the mayor to that position, is not qualified
because she is not a provincial assessor eligible and she is not a holder of a bachelor's degree. Her
appointment to the contested position is in violation of section 23. Hence, the Commissioner of Civil
Service revoked that appointment in his decision of May 3, 1974. However, upon motion for
reconsideration, the Commissioner approved that appointment in his decision of June 24, 1974.

It is incontestable that Sison is senior to Mrs. Maliwanag. He was appointed senior deputy assessor
of Olongapo City effective September 25, 1967. Then, he was promoted to the position of chief
deputy assessor of that city on September 1, 1969. On that date, Mrs. Maliwanag was appointed to
the position of senior deputy assessor, the position vacated by Sison (pp. 62-63, Rollo).

Thus, Sison (not Mrs. Maliwanag) was next in line for the position of assistant city assessor when
that position became vacant on November 23, 1973. There is no reason why Mrs. Maliwanag should
jump over Sison. The mayor should have apprised Sison as to why he was being bypassed and why
Mrs. Maliwanag was being appointed to that position. That legal requirement was not observed.

Although Sison's petition in this Court is for certiorari, mandamus and quo warranto, he has no
cause of action for quo warranto because Mrs. Maliwanag holds an appointment to the contested
position of assistant city assessor. She cannot be regarded as a usurper of that position. Sison's
petition should be treated as one for certiorari and mandamus only. Those special civil actions are
adequate for assailing the decisions of the Commissioner of Civil Service. The quo warranto aspect
of Sisons's petition should be disregarded.

Rule 65 of the Rules of Court does not fix any period for the filing of a petition
for certiorari and mandamus. The one-year period within which the petition for quo warranto should
be filled does not apply to Sison. His petition was delayed because, as he explained, he is a poor
man who cannot afford to embark on an expensive and protracted litigation.

I vote for the setting aside of the questioned decisions of the Commissioner of Civil Service. The
mayor should be directed to appoint Sison to the contested position. Mrs. Maliwanag should be
promoted to the position of chief of deputy assessor to be vacated by Sison.

Fernando (Chairman), Antonio, Concepcion, Jr. and Santos, JJ., concur.

G.R. No. 103702 December 6, 1994

MUNICIPALITY OF SAN NARCISO, QUEZON; MAYOR JUAN K. UY; COUNCILORS:

DEOGRACIAS R. ARGOSINO III, BENITO T. CAPIO, EMMANUEL R. CORTEZ, NORMANDO
MONTILLA, LEONARDO C. UY, FIDEL C. AURELLANA, PEDRO C. CARABIT, LEONARDO D.
AURELLANA, FABIAN M. MEDENILLA, TRINIDAD F. CORTEZ, SALVADOR M. MEDENILLA,
CERELITO B. AUREADA and FRANCISCA A. BAMBA, petitioners,
vs.
HON. ANTONIO V. MENDEZ, SR., Presiding Judge, Regional Trial Court, Branch 62, 4th
Judicial Region, Gumaca, Quezon; MUNICIPALITY OF SAN ANDRES, QUEZON; MAYOR
FRANCISCO DE LEON; COUNCILORS: FE LUPINAC, TOMAS AVERIA, MANUEL O. OSAS,
WILFREDO O. FONTANIL, ENRICO U. NADRES, RODELITO LUZOIR, LENAC, JOSE L.
CARABOT, DOMING AUSA, VIDAL BANQUELES and CORAZON M. MAXIMO, respondents.

Manuel Laserna, Jr. for petitioners.

Florante Pamfilo for private respondents.

VITUG, J.:

On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and 2630
of the Revised Administrative Code, as amended, Executive Order No. 353 creating the municipal
district of San Andres, Quezon, by segregating from the municipality of San Narciso of the same
province, the barrios of San Andres, Mangero, Alibijaban, Pansoy, Camflora and Tala along with their
respective sitios.

Executive Order No. 353 was issued upon the request, addressed to the President and coursed
through the Provincial Board of Quezon, of the municipal council of San Narciso, Quezon, in its
Resolution No. 8 of 24 May 1959. 1

By virtue of Executive Order No. 174, dated 05 October 1965, issued by President Diosdado
Macapagal, the municipal district of San Andres was later officially recognized to have gained the
status of a fifth class municipality beginning 01 July 1963 by operation of Section 2 of Republic Act
No. 1515. The executive order added that "(t)he conversion of this municipal district into (a)
2

municipality as proposed in House Bill No. 4864 was approved by the House of Representatives."

On 05 June 1989, the Municipality of San Narciso filed a petition for quo warranto with the Regional
Trial Court, Branch 62, in Gumaca, Quezon, against the officials of the Municipality of San Andres.
Docketed Special Civil Action No. 2014-G, the petition sought the declaration of nullity of Executive
Order No. 353 and prayed that the respondent local officials of the Municipality of San Andres be
permanently ordered to refrain from performing the duties and functions of their respective
offices. Invoking the ruling of this Court in Pelaez v. Auditor General, the petitioning municipality
3 4

contended that Executive Order No. 353, a presidential act, was a clear usurpation of the inherent
powers of the legislature and in violation of the constitutional principle of separation of powers.
Hence, petitioner municipality argued, the officials of the Municipality or Municipal District of San
Andres had no right to exercise the duties and functions of their respective offices that righfully
belonged to the corresponding officials of the Municipality of San Narciso.

In their answer, respondents asked for the dismissal of the petition, averring, by way of affirmative
and special defenses, that since it was at the instance of petitioner municipality that the Municipality
of San Andres was given life with the issuance of Executive Order No. 353, it (petitioner municipality)
should be deemed estopped from questioning the creation of the new municipality; that because the
5

Municipality of San Andred had been in existence since 1959, its corporate personality could no
longer be assailed; and that, considering the petition to be one for quo warranto, petitioner
municipality was not the proper party to bring the action, that prerogative being reserved to the State
acting through the Solicitor General. 6

On 18 July 1991, after the parties had submitted their respective pre-trial briefs, the trial court
resolved to defer action on the motion to dismiss and to deny a judgment on the pleadings.

On 27 November 1991, the Municipality of San Andres filed anew a motion to dismiss alleging that
the case had become moot and academic with the enactment of Republic Act No. 7160, otherwise
known as the Local Government Code of 1991, which took effect on 01 January 1991. The movant
municipality cited Section 442(d) of the law, reading thusly:

Sec. 442. Requisites for Creation. — . . .

(d) Municipalities existing as of the date of the effectivity of this Code shall continue
to exist and operate as such. Existing municipal districts organized pursuant to
presidential issuances or executive orders and which have their respective set of
elective municipal officials holding office at the time of the effectivity of this Code
shall henceforth be considered as regular municipalities.

The motion was opposed by petitioner municipality, contending that the above provision of
law was inapplicable to the Municipality of San Andres since the enactment referred to
legally existing municipalities and not to those whose mode of creation had been void ab
initio.
7

In its Order of 02 December 1991, the lower court finally dismissed the petition for lack of cause of
8 9

action on what it felt was a matter that belonged to the State, adding that "whatever defects (were)
present in the creation of municipal districts by the President pursuant to presidential issuances and
executive orders, (were) cured by the enactment of R.A. 7160, otherwise known as Local
Government Code of 1991." In an order, dated 17 January 1992, the same court denied petitioner
municipality's motion for reconsideration.

Hence, this petition "for review on certiorari." Petitioners argue that in issuing the orders of 02
10

December 1991 and 17 January 1992, the lower court has "acted with grave abuse of discretion
amounting to lack of or in excess of jurisdiction." Petitioners assert that the existence of a
municipality created by a null and void presidential order may be attacked either directly or even
collaterally by anyone whose interests or rights are affected, and that an unconstitutional act is not a
law, creates no office and is inoperative such as though its has never been passed. 11
Petitioners consider the instant petition to be one for "review on certiorari" under Rules 42 and 45 of
the Rules of Court; at the same time, however, they question the orders of the lower court for having
been issued with "grave abuse of discretion amounting to lack of or in excess of jurisdiction, and that
there is no other plain, speedy and adequate remedy in the ordinary course of law available to
petitioners to correct said Orders, to protect their rights and to secure a final and definitive
interpretation of the legal issues involved." Evidently, then, the petitioners intend to submit their
12

case in this instance under Rule 65. We shall disregard the procedural incongruence.

The special civil action of quo warranto is a "prerogative writ by which the Government can call upon
any person to show by what warrant he holds a public office or exercises a public franchise." When 13

the inquiry is focused on the legal existence of a body politic, the action is reserved to the State in a
proceeding for quo warranto or any other credit proceeding. It must be brought "in the name of the
14

Republic of the Philippines" and commenced by the Solicitor General or the fiscal "when directed
15

by the President of the Philippines . . . ." Such officers may, under certain circumstances, bring
16

such an action "at the request and upon the relation of another person" with the permission of the
court. The Rules of Court also allows an individual to commence an action for quo warranto in his
17

own name but this initiative can be done when he claims to be "entitled to a public office or position
usurped or unlawfully held or exercised by another." While the quo warranto proceedings filed
18

below by petitioner municipality has so named only the officials of the Municipality of San Andres as
respondents, it is virtually, however, a denunciation of the authority of the Municipality or Municipal
District of San Andres to exist and to act in that capacity.

At any rate, in the interest of resolving any further doubt on the legal status of the Municipality of San
Andres, the Court shall delve into the merits of the petition.

While petitioners would grant that the enactment of Republic Act

No. 7160 may have converted the Municipality of San Andres into a de facto municipality, they,
however, contend that since the petition for quo warranto had been filed prior to the passage of said
law, petitioner municipality had acquired a vested right to seek the nullification of Executive Order
No. 353, and any attempt to apply Section 442 of Republic Act 7160 to the petition would perforce be
violative of due process and the equal protection clause of the Constitution.

Petitioners' theory might perhaps be a point to consider had the case been seasonably brought.
Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959
but it was only after almost thirty (30) years, or on 05 June 1989, that the municipality of San Narciso
finally decided to challenge the legality of the executive order. In the meantime, the Municipal
District, and later the Municipality, of San Andres, began and continued to exercise the powers and
authority of a duly created local government unit. In the same manner that the failure of a public
officer to question his ouster or the right of another to hold a position within a one-year period can
abrogate an action belatedly filed, so also, if not indeed with greatest imperativeness, must a quo
19

warranto proceeding assailing the lawful authority of a political subdivision be timely raised. Public
20

interest
demands it.

Granting the Executive Order No. 353 was a complete nullity for being the result of an
unconstitutional delegation of legislative power, the peculiar circumstances obtaining in this case
hardly could offer a choice other than to consider the Municipality of San Andres to have at least
attained a status uniquely of its own closely approximating, if not in fact attaining, that of a de
facto municipal corporation. Conventional wisdom cannot allow it to be otherwise. Created in 1959
by virtue of Executive Order No. 353, the Municipality of San Andres had been in existence for more
than six years when, on 24 December 1965, Pelaez v. Auditor General was promulgated. The ruling
could have sounded the call for a similar declaration of the unconstitutionality of Executive Order No.
353 but it was not to be the case. On the contrary, certain governmental acts all pointed to the
State's recognition of the continued existence of the Municipality of San Andres. Thus, after more
than five years as a municipal district, Executive Order No. 174 classified the Municipality of San
Andres as a fifth class municipality after having surpassed the income requirement laid out in
Republic Act No. 1515. Section 31 of Batas Pambansa Blg. 129, otherwise known as the Judiciary
Reorganization Act of 1980, constituted as municipal circuits, in the establishment of Municipal
Circuit Trial Courts in the country, certain municipalities that comprised the municipal circuits
organized under Administrative Order No. 33, dated 13 June 1978, issued by this Court pursuant to
Presidential Decree No. 537. Under this administrative order, the Municipality of San Andres had
been covered by the 10th Municipal Circuit Court of San Francisco-San Andres for the province of
Quezon.

At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under
the Ordinance (adopted on 15 October 1986) apportioning the seats of the House of
Representatives, appended to the 1987 Constitution, the Municipality of San Andres has been
considered to be one of the twelve (12) municipalities composing the Third District of the province of
Quezon. Equally significant is Section 442(d) of the Local Government Code to the effect that
municipal districts "organized pursuant to presidential issuances or executive orders and which have
their respective sets of elective municipal officials holding office at the time of the effectivity of (the)
Code shall henceforth be considered as regular municipalities." No pretension of
unconstitutionality per se of Section 442(d) of the Local Government Code is proferred. It is doubtful
whether such a pretext, even if made, would succeed. The power to create political subdivisions is a
function of the legislature. Congress did just that when it has incorporated Section 442(d) in the
Code. Curative laws, which in essence are retrospective, and aimed at giving "validity to acts done
21

that would have been invalid under existing laws, as if existing laws have been complied with," are
validly accepted in this jurisdiction, subject to the usual qualification against impairment of vested
rights.22

All considered, the de jure status of the Municipality of San Andres in the province of Quezon must
now be conceded.

WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Costs against petitioners.

SO ORDERED.

Narvasa, C.J., Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno,
Kapunan and Mendoza, JJ. concur.

Feliciano, J., is on leave.

# Footnotes

1 Present at the meeting when the municipal council of San Narciso, Quezon
adopted Resolution No. 8 were Municipal Mayor Godofredo M. Tan, Vice-Mayor
Jesus R. Cortez, and Councilors Maximino F. Rivadulla, Eleuterio Aurellana, Juanito
Conjares, Dominador Nadres and Felix Aurellana. Councilor Eduardo L. Ausa was
absent. The reasons for the adoption of Resolution No. 8 are stated in the following
clauses:

"WHEREAS, this body has been informed that the chance for the
approval of the bill creating the barrios of San Andres, Mangero,
 Alibijaban, Pansoy, Camflora and Tala, into a regular Municipality is
very slim;

WHEREAS, the reason behind such disapproval is the patent inability

of the proposed Municipality to pay its would-to-be (sic) employees at
the rate required in the Minimum Wage Law;

WHEREAS, this body in particular, and the great majority of the

people of San Andres in general, nowithstanding the provision of the
Minimum Wage Law, agitate for the separation or segregation of the
abovementioned barrios so as to have a corporate personality in the
eyes of the Provincial Board, in the eyes of Congress and in the eyes
of the President;

WHEREAS, once said barrios acquire a corporate personality in the

eyes of the Provincial Board, of Congress and of the President, the
development of said barrios and practically the whole southern tip of
the Bondoc Peninsula will be hastened. (Rollo, p. 162.)

2 This act has provided for a more autonomous government for municipal districts,
amending for the purpose Art. VI, Chapter 64 of the Administrative Code. Sec. 2
thereof states that "any first class municipal district the annual receipts of which shall
average more than four thousand pesos for four consecutive fiscal years shall ipso
facto be classified as a fifth class municipality and shall thereafter be governed by
the provisions of Articles one to five, Chapter 64 of the same Code."

3 Rollo, pp. 77-80.

4 15 SCRA 569, holding that the authority to create municipalities is essentially

legislative in nature.

5 Invoked was the Court's ruling in Municipality of Malabang v. Benito 27 SCRA 533.

6 Rollo, pp. 81-83.

7 Rollo, p. 102.

8 Presided by Judge Antonio V. Mendez, Sr.

9 Rollo, pp. 71-74.

10 Named co-petitioners of the Municipality of San Narciso before this Court are its
municipal mayor and thirten (13) councilors.

11 Rollo, pp. 183-185.

12 Ibid., pp. 2 & 21; Ibid., p. 50.

13 Moran, COMMENTS ON THE RULES OF COURT, Vol. 3, 1970 ed., p. 208 citing
Newman v. U.S., 238 U.S. 537, 545, 56 L.Ed. 513.
 14 Only in few exceptions may a private person exercise this function of government,
an example of which is when the state law allows a private person to question the
regularity of the incorporation of an entity; see E. McQuillin, THE LAW OF
MUNICIPAL CORPORATION, sec. 3.49, p. 592 (3rd ed. 1949).

15 Sec. 1(c), Rule 66, Rules of Court.

16 Sec. 3, ibid.

17 Sec. 4, ibid.

18 Sec. 6, ibid.

19 Tumulak v. Egay, 82 Phil. 828; Tavora v. Ofiana, 83 Phil. 672; Unabia v. City
Mayor (99 Phil. 253). In Castro v. Del Rosario (19 SCRA 196), the Court stated that
the one-year limitation for filing a quo warranto proceedings is "an expression of
policy on the part of the State that persons claiming a right to an office of which they
are illegally dispossessed should immediately take steps to recover said office and
that if they do not do so within a period of one year, they shall be considered as
having lost their right thereto by abandonment."

20 Noteworthy is Section 16, Rule 16, of the Rules of Court which sets a five-year
limitation for filing a quo warranto action if its purpose is to bring about the "forfeiture
of charter" of a corporation, that period to be counted from the time "the act
complained of was done or committed."

21 Briad Agro Development Corporation v. De la Serna, supra at p. 534; SSK Parts

Corporation v. Camas, 181 SCRA 675.

22 Briad Agro Development Corporation v. De la Serna, 174 SCRA 524, 532 citing
Government of P.I. v. Municipality of Binalonan, 32 Phil. 634.

EN BANC

[G.R. No. L-2929. February 28, 1950.]

THE CITY OF MANILA, Plaintiff-Appellant, v. THE ARELLANO LAW COLLEGES, INC., Defendant-
Appellee.

City Fiscal Eugenio Angeles and Assistant City Fiscal Arsenio Nañawa for Appellant.

Emmanuel Pelaez for Appellee.

SYLLABUS

1. STATUTORY CONSTRUCTION; POWER OF CITIES TO EXPROPRIATE; REPUBLIC ACT No. 267 CONSTRUED.
— Republic Act No. 267 empowers cities to expropriator as well as to purchase lands for homesites. The
word "priopriating," taken singly or with the text, is susceptible of only meaning. But this power to
expropriate is necessarily subject to the limitations and conditions noted in the cases of Guido v. Rural
Progress Administration (G.R. No. L-2089), and commonwealth of the Philippines v. Borja (G.R. No. L-1496).
The national Government may not confer upon its instrumentalities authority which it itself may not
exercise. A stream can not run higher than its source.

2. EMINENT DOMAIN, POWER OF; EXISTENCE OF NECESSITY FOR USES AND PURPOSES FOR ITS
EXERCISE. — To authorize the condemnation of any particular land by a grantee of the power of eminent
 domain, a necessity must exist for the taking thereof for the proposed uses and purposes.

3. ID.; WORDS AND PHRASES: "NECESSITY." — Necessity within the rule that the particular property to be
expropriated must be necessary, does not mean an absolute but only a reasonable or practical necessity,
such as would combine the greatest benefit to the public with the least inconvenience and expense to the
condemning party and property owner consistent with such benefit.

4. ID.; LIMITATIONS OF ITS EXERCISE; PREFERENCE TO PREPARATION OF YOUTHS FOR USEFUL

CITIZENSHIP. — Any good that would accrue to the public from providing homes to ,a few families fades
into insignificance in comparison with the preparation of young men and women for useful citizenship and
for service to the government and the community, a task which the government alone is not a position to
undertake.

DECISION

TUASON, J.:

Section 1 of Republic Act No. 267 provides: jgc:chanrobles.com.ph

"Cities and municipalities are authorized to contract loans from the Reconstruction Finance Corporation, the
Philippine National Bank, and/or any other entity or person at a rate of interest not exceeding eight per cent
per annum for the purpose of purchasing or expropriating homesites within their respective territorial
jurisdiction and reselling them at cost to residents of the said cities and municipalities."
cralaw virtua1aw library

The court below ruled that this provision empowers cities to purchase but not to expropriate lands for the
purpose of subdivision and resale, and so dismissed the present action, which seeks to condemn, for the
purpose just stated, several parcels of land having a combined area of 7,270 square meters and situated on
Legarda Street, City of Manila.

In the cases of Guido v. Rural Progress Administration (G.R. No. L-2089) 1 and Commonwealth of the
Philippines v. De Borja (G.R. No. L-1496), 2 we discussed at great length the extent of the Philippine
Government’s power to condemn private property for resale. Among other things, we said: jgc:chanrobles.com.ph

"It has been truly said that the assertion of the right on the part of the legislature to take the property of
one citizen and transfer it to another, even for a full compensation, when the public interest is not promoted
thereby, is claiming a despotic power, and one inconsistent with every just principle and fundamental maxim
of a free government. (29 C.J.S., 820.)

"In a broad sense, expropriation of large estates, trusts in perpetuity, and land that embraces a whole town,
or a large section of a town or city, bears direct relation to the public welfare. The size of the land
expropriated, the large number of people benefited, and the extent of social and economic reform secured
by the condemnation, clothes the expropriation with public interest and public use. The expropriation in such
cases tends to abolish economic slavery, feudalistic practices, endless conflicts between landlords and
tenants, and other evils inimical to community prosperity and contentment and public peace and order.
Although courts are not in agreement as to the tests to be applied in determining whether the use is public
or not, some go so far in the direction of a liberal construction as to hold that public use is synonymous with
public benefit, public utility, or public advantage, and to authorize the exercise of the power of eminent
domain to promote such public benefit, etc., especially where the interests involved are of considerable
magnitude. (29 C. J. S.; 823, 824; see also People of Puerto Rico v. Eastern Sugar Associates Et. Al., 156
Fed [2d], 316.) In some instances, slumsites have been acquired by condemnation. The highest court of
New York State has ruled that slum clearance and erection of houses for low-income families were public
purposes for which New York City Housing authorities could exercise the power of condemnation. And this
decision was followed by similar ones in other states. The underlying reasons for these decisions are that the
destruction of congested areas and insanitary dwellings diminishes the potentialities of epidemics, crime and
waste, prevents the spread of crime and diseases to unaffected areas, enhances the physical and moral
value of the surrounding communities, and promotes the safety and welfare of the public in general. (Murray
Et. Al. v. La Guardia, 52 N. E. [2d], 884; General Development Coop. v. City of Detroit, 33 N. W. [2d], 919;
Weizner v. Stichman, 64 N.Y. S. [2d], 50.) But it will be noted that in all these cases and others of similar
nature extensive areas were involved and numerous people and the general public benefited by the action
taken.

"The condemnation of a small property in behalf of 10, 20 or 50 persons and their families does not insure
to the benefit of the public to a degree sufficient to give the use public character. The expropriation
proceedings at bar have been instituted for the economic relief of a few families devoid of any consideration
of public health, public peace and order, or other public advantage. What is proposed to be done is to take
plaintiff property, which for all we know she acquired by sweat and sacrifices for he r and her family’s
security, and sell it at cost to a few lessees who refuse to pay the stipulated rent or leave the premises.

"No fixed line of demarcation between what taking is for public use and what is not can be made; each case
has to be judged according to its peculiar circumstances. It suffices to say for the purpose of this decision
that the case under consideration is far wanting in those elements which make for public convenience or
public use. It is patterned upon an ideology far removed from that consecrated in our system of government
and embraced by the majority of the citizens of this country. If upheld, this case would open the gates to
more oppressive expropriations. If this expropriation be constitutional, we see no reason why a 10-, 15-, or
25-hectare farm land might not be expropriated and subdivided, and sold to those who want to own a
portion of it. To make the analogy closer, we find no reason why the Rural Progress Administration could not
take by condemnation an urban lot containing and area of 1,000 or 2,000 square meters for subdivision into
tiny lots for resale to its occupants or those who want to build thereon." cralaw virtua1aw library

We are inclined to believe that Act No. 267 empowers cities to expropriate as well as to purchase lands for
homesites. The word "expropriating," taken singly or with the text, is susceptible of only one meaning. But
this power to expropriate is necessarily subject to the limitations and conditions noted in the decisions above
cited. The National Government may not confer upon its instrumentalities authority which it itself may not
exercise. A stream can not run higher than its source.

Viewed from another angle, the case at bar is weaker for the condemnor. In the first place, the land that is
the subject of the present expropriation is only one-third of the land sought to be taken in the Guido case,
and about two-thirds of that involved in the Borja condemnation proceeding. In the second place, the
Arellano Colleges’ land is situated in a highly commercial section of the city and is occupied by persons who
are not bona fide tenants. Lastly, this land was bought by the defendant for a university site to take the
place of rented buildings that are unsuitable for schools of higher learning.

To authorize the condemnation of any particular land by a grantee of the power of eminent domain, a
necessity must exist for the taking thereof for the proposed uses and purposes. (29 C.J.S., 884-885.) In City
of Manila v. Manila Chinese Community (40 Phil., 349), this Court, citing American decisions, laid down this
rule:
jgc:chanrobles.com.ph

"The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity
must be of a public character. The ascertainment of the necessity must precede or accompany, and not
follow, the taking of the land. (Morrison v. Indianapolis, etc. Ry. Co., 166 Ind., 511; Stearns v. Barre, 73
Vt., 281; Wheeling, etc. R.R. Co. v. Toledo, Ry. etc. Co., 72 Ohio St., 368.)"

And this passage in Blackstone’s Commentaries on the English Law is cited in that decision: "So great is the
regard of the law for private property that it will not authorize the least violation of it, even for the public
good, unless there exists a very great necessity thereof." cralaw virtua1aw library

Perhaps modern decisions are not so exigent. Necessity within the rule that the particular property to be
expropriated must be necessary, does not mean an absolute but only a reasonable or practical necessity,
such as would combine the greatest benefit to the public with the least inconvenience and expense to the
condemning party and property owner consistent with such benefit. (29 C.J.S., 386.) But measured even by
this standard, and forgetting for a moment the private character of the intended use, necessity for the
condemnation has not been shown. The land in question has cost the owner P140,000. The people for whose
benefit the condemnation is being undertaken are so poor they could ill afford to meet this high price, unless
they intend to borrow the money with a view to disposing of the property later for a profit. Cheaper lands
not dedicated to a purpose so worthy as a school and more suited to the occupants’ needs and means, if
really they only want to own their own homes, are aplenty elsewhere. On the other hand, the defendant not
only has invested a considerable amount for its property but had the plans for construction ready and would
have completed the project a long time ago had it not been stopped by the city authorities. And again, while
a handful of people stand to profit by the expropriation, the development of a university that has a present
enrollment of 9,000 students would be sacrificed. Any good that would accrue to the public from providing
homes to a few families fades into insignificance in comparison with the preparation of young men and
young women for useful citizenship and for service to the government and the community, a task which the
government alone is not in a position to undertake. As the Rural Progress Administration, the national
agency created by the Government to purchase or expropriate lands for resale as homesites, and to which
the petition to purchase the land in question on behalf of the occupants was referred by the President,
turning down the occupants’ request after proper investigation, commented that "the necessity of the
Arellano Law College to acquire a permanent site of its own is imperative not only because denial of the
same would hamper the objectives of that educational institution, but it would likewise be taking a property
intended already for public benefit." The Mayor of the City of Manila himself confessed that he believes the
plaintiff is entitled to keep this land.

The order of the Court of First Instance of Manila is affirmed without costs.

Moran, C.J., Ozaeta, Pablo, Bengzon, Padilla, Montemayor, Reyes and Torres, JJ., concur.

Endnotes:

1. 84 Phil., 847.

2. 85 Phil., 51.

EN BANC

G.R. No. L-59603 April 29, 1987

EXPORT PROCESSING ZONE AUTHORITY, petitioner,

vs.
HON. CEFERINO E. DULAY, in his capacity as the Presiding Judge, Court of First Instance of
Cebu, Branch XVI, Lapu-Lapu City, and SAN ANTONIO DEVELOPMENT
CORPORATION, respondents.
Elena M. Cuevas for respondents.

GUTIERREZ, JR., J.:

The question raised in this petition is whether or not Presidential Decrees Numbered 76, 464, 794
and 1533 have repealed and superseded Sections 5 to 8 of Rule 67 of the Revised Rules of Court,
such that in determining the just compensation of property in an expropriation case, the only basis
should be its market value as declared by the owner or as determined by the assessor, whichever is
lower.

On January 15, 1979, the President of the Philippines, issued Proclamation No. 1811, reserving a
certain parcel of land of the public domain situated in the City of Lapu-Lapu, Island of Mactan, Cebu
and covering a total area of 1,193,669 square meters, more or less, for the establishment of an
export processing zone by petitioner Export Processing Zone Authority (EPZA).

Not all the reserved area, however, was public land. The proclamation included, among others, four
(4) parcels of land with an aggregate area of 22,328 square meters owned and registered in the
name of the private respondent. The petitioner, therefore, offered to purchase the parcels of land
from the respondent in acccordance with the valuation set forth in Section 92, Presidential Decree
(P.D.) No. 464, as amended. The parties failed to reach an agreement regarding the sale of the
property.
The petitioner filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, a
complaint for expropriation with a prayer for the issuance of a writ of possession against the private
respondent, to expropriate the aforesaid parcels of land pursuant to P.D. No. 66, as amended, which
empowers the petitioner to acquire by condemnation proceedings any property for the establishment
of export processing zones, in relation to Proclamation No. 1811, for the purpose of establishing the
Mactan Export Processing Zone.

On October 21, 1980, the respondent judge issued a writ of possession authorizing the petitioner to
take immediate possession of the premises. On December 23, 1980, the private respondent flied its
answer.

At the pre-trial conference on February 13, 1981, the respondent judge issued an order stating that
the parties have agreed that the only issue to be resolved is the just compensation for the properties
and that the pre-trial is thereby terminated and the hearing on the merits is set on April 2, 1981.

On February 17, 1981, the respondent judge issued the order of condemnation declaring the
petitioner as having the lawful right to take the properties sought to be condemned, upon the
payment of just compensation to be determined as of the filing of the complaint. The respondent
judge also issued a second order, subject of this petition, appointing certain persons as
commissioners to ascertain and report to the court the just compensation for the properties sought to
be expropriated.

On June 19, 1981, the three commissioners submitted their consolidated report recommending the
amount of P15.00 per square meter as the fair and reasonable value of just compensation for the
properties.

On July 29, 1981, the petitioner Med a Motion for Reconsideration of the order of February 19, 1981
and Objection to Commissioner's Report on the grounds that P.D. No. 1533 has superseded
Sections 5 to 8 of Rule 67 of the Rules of Court on the ascertainment of just compensation through
commissioners; and that the compensation must not exceed the maximum amount set by P.D. No.
1533.

On November 14, 1981, the trial court denied the petitioner's motion for reconsideration and gave
the latter ten (10) days within which to file its objection to the Commissioner's Report.

On February 9, 1982, the petitioner flied this present petition for certiorari and mandamus with
preliminary restraining order, enjoining the trial court from enforcing the order dated February 17,
1981 and from further proceeding with the hearing of the expropriation case.

The only issue raised in this petition is whether or not Sections 5 to 8, Rule 67 of the Revised Rules
of Court had been repealed or deemed amended by P.D. No. 1533 insofar as the appointment of
commissioners to determine the just compensation is concerned. Stated in another way, is the
exclusive and mandatory mode of determining just compensation in P.D. No. 1533 valid and
constitutional?

The petitioner maintains that the respondent judge acted in excess of his jurisdiction and with grave
abuse of discretion in denying the petitioner's motion for reconsideration and in setting the
commissioner's report for hearing because under P.D. No. 1533, which is the applicable law herein,
the basis of just compensation shall be the fair and current market value declared by the owner of
the property sought to be expropriated or such market value as determined by the assessor,
whichever is lower. Therefore, there is no more need to appoint commissioners as prescribed by
Rule 67 of the Revised Rules of Court and for said commissioners to consider other highly variable
factors in order to determine just compensation. The petitioner further maintains that P.D. No. 1533
has vested on the assessors and the property owners themselves the power or duty to fix the market
value of the properties and that said property owners are given the full opportunity to be heard
before the Local Board of Assessment Appeals and the Central Board of Assessment Appeals. Thus,
the vesting on the assessor or the property owner of the right to determine the just compensation in
expropriation proceedings, with appropriate procedure for appeal to higher administrative boards, is
valid and constitutional.

Prior to the promulgation of P.D. Nos. 76, 464, 794 and 1533, this Court has interpreted the eminent
domain provisions of the Constitution and established the meaning, under the fundametal law, of just
compensation and who has the power to determine it. Thus, in the following cases, wherein the filing
of the expropriation proceedings were all commenced prior to the promulgation of the
aforementioned decrees, we laid down the doctrine onjust compensation:

Municipality of Daet v. Court of Appeals (93 SCRA 503, 516),

xxx xxx xxx

"And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413, the Court,
speaking thru now Chief Justice Fernando, reiterated the 'well-settled (rule) that just compensation
means the equivalent for the value of the property at the time of its taking. Anything beyond that is
more and anything short of that is less, than just compensation. It means a fair and full equivalent for
the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the
expropriating entity."

Garcia v. Court ofappeals (102 SCRA 597, 608),

xxx xxx xxx

"Hence, in estimating the market value, all the capabilities of the property and all the uses to
which it may be applied or for which it is adapted are to be considered and not merely the
condition it is in the time and the use to which it is then applied by the owner. All the facts as
to the condition of the property and its surroundings, its improvements and capabilities may
be shown and considered in estimating its value."

Republic v. Santos (141 SCRA 30, 35-36),

"According to section 8 of Rule 67, the court is not bound by the commissioners' report. It
may make such order or render such judgment as shall secure to the plaintiff the property
essential to the exercise of his right of condemnation, and to the defendant just
compensation for the property expropriated. This Court may substitute its own estimate of
the value as gathered from the record (Manila Railroad Company v. Velasquez, 32 Phil.
286)."

However, the promulgation of the aforementioned decrees practically set aside the above and many
other precedents hammered out in the course of evidence-laden, well argued, fully heard, studiously
deliberated, and judiciously considered court proceedings. The decrees categorically and
peremptorily limited the definition of just compensation thus:

P.D. No. 76:

 xxx xxx xxx

"For purposes of just compensation in cases of private property acquired by the government
for public use, the basis shall be the current and fair market value declared by the owner or
administrator, or such market value as determined by the Assessor, whichever is lower."

P.D. No. 464:

"Section 92. Basis for payment of just compensation in expropriation proceedings. — In

determining just compensation which private property is acquired by the government for
public use, the basis shall be the market value declared by the owner or administrator or
anyone having legal interest in the property, or such market value as determined by the
assessor, whichever is lower."

P.D. No. 794:

"Section 92. Basis for payment of just compensation in expropriation proceedings. — In

determining just compensation when private property is acquired by the government for
public use, the same shall not exceed the market value declared by the owner or
administrator or anyone having legal interest in the property, or such market value as
determined by the assessor, whichever is lower."

P.D. No. 1533:

"Section 1. In determining just compensation for private property acquired through eminent
domain proceedings, the compensation to be paid shall not exceed the value declared by the
owner or administrator or anyone having legal interest in the property or determined by the
assessor, pursuant to the Real Property Tax Code, whichever value is lower, prior to the
recommendation or decision of the appropriate Government office to acquire the property."

We are constrained to declare the provisions of the Decrees on just compensation unconstitutional
and void and accordingly dismiss the instant petition for lack of merit.

The method of ascertaining just compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter
which under the Constitution is reserved to it for final determination.

Thus, although in an expropriation proceeding the court technically would still have the power to
determine the just compensation for the property, following the applicable decrees, its task would be
relegated to simply stating the lower value of the property as declared either by the owner or the
assessor. As a necessary consequence, it would be useless for the court to appoint commissioners
under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the
taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was
not had before the actual taking. However, the strict application of the decrees during the
proceedings would be nothing short of a mere formality or charade as the court has only to choose
between the valuation of the owner and that of the assessor, and its choice is always limited to the
lower of the two. The court cannot exercise its discretion or independence in determining what is just
or fair. Even a grade school pupil could substitute for the judge insofar as the determination of
constitutional just compensation is concerned.
In the case of National Housing Authority v. Reyes (123 SCRA 245), this Court upheld P.D. No. 464,
as further amended by P.D. Nos. 794, 1224 and 1259. In this case, the petitioner National Housing
Authority contended that the owner's declaration at P1,400.00 which happened to be lower than the
assessor's assessment, is the just compensation for the respondent's property under section 92 of
P.D. No. 464. On the other hand, the private respondent stressed that while there may be basis for
the allegation that the respondent judge did not follow the decree, the matter is still subject to his
final disposition, he having been vested with the original and competent authority to exercise his
judicial discretion in the light of the constitutional clauses on due process and equal protection.

To these opposing arguments, this Court ruled ihat under the conceded facts, there should be a
recognition that the law as it stands must be applied; that the decree having spoken so clearly and
unequivocably calls for obedience; and that on a matter where the applicable law speaks in no
uncertain language, the Court has no choice except to yield to its command. We further stated that
"the courts should recognize that the rule introduced by P.D. No. 76 and reiterated in subsequent
decrees does not upset the established concepts of justice or the constitutional provision on just
compensation for, precisely, the owner is allowed to make his own valuation of his property."

While the Court yielded to executive prerogative exercised in the form of absolute law-making power,
its members, nonetheless, remained uncomfortable with the implications of the decision and the
abuse and unfairness which might follow in its wake. For one thing, the President himself did not
seem assured or confident with his own enactment. It was not enough to lay down the law on
determination of just compensation in P.D. 76. It had to be repeated and reiterated in P.D. 464, P.D.
794, and P.D. 1533. The provision is also found in P.D. 1224, P.D. 1259 and P.D. 1313. Inspite of its
effectivity as general law and the wide publicity given to it, the questioned provision or an even
stricter version had to be embodied in cases of specific expropriations by decree as in P.D. 1669
expropriating the Tambunting Estate and P.D. 1670 expropriating the Sunog Apog area in Tondo,
Manila.

In the present petition, we are once again confronted with the same question of whether the courts
under P.D. 1533, which contains the same provision on just compensation as its predecessor
decrees, still have the power and authority to determine just compensation, independent of what is
stated by the decree and to this effect, to appoint commissioners for such purpose.

This time, we answer in the affirmative.

In overruling the petitioner's motion for reconsideration and objection to the commissioner's report,
the trial court said:

"Another consideration why the Court is empowered to appoint commissioners to assess the
just compensation of these properties under eminent domain proceedings, is the well-
entrenched ruling that 'the owner of property expropriated is entitled to recover from
expropriating authority the fair and full value of the lot, as of the time when possession
thereof was actually taken by the province, plus consequential damages — including
attorney's fees — from which the consequential benefits, if any should be deducted, with
interest at the legal rate, on the aggregate sum due to the owner from and after the date of
actual taking.' (Capitol Subdivision, Inc. v. Province of Negros Occidental, 7 SCRA 60). In
fine, the decree only establishes a uniform basis for determining just compensation which the
Court may consider as one of the factors in arriving at 'just compensation,' as envisage in the
Constitution. In the words of Justice Barredo, "Respondent court's invocation of General
Order No. 3 of September 21, 1972 is nothing short of an unwarranted abdication of judicial
authority, which no judge duly imbued with the implications of the paramount principle of
independence of the judiciary should ever think of doing." (Lina v. Purisima, 82 SCRA 344,
 351; Cf. Prov. of Pangasinan v. CFI Judge of Pangasinan, Br. VIII, 80 SCRA 117) Indeed,
where this Court simply follows PD 1533, thereby limiting the determination of just
compensation on the value declared by the owner or administrator or as determined by the
Assessor, whichever is lower, it may result in the deprivation of the landowner's right of due
process to enable it to prove its claim to just compensation, as mandated by the Constitution.
(Uy v. Genato, 57 SCRA 123). The tax declaration under the Real Property Tax Code is,
undoubtedly, for purposes of taxation."

We are convinced and so rule that the trial court correctly stated that the valuation in the decree may
only serve as a guiding principle or one of the factors in determining just compensation but it may
not substitute the court's own judgment as to what amount should be awarded and how to arrive at
such amount. A return to the earlier well-established doctrine, to our mind, is more in keeping with
the principle that the judiciary should live up to its mission "by vitalizing and not denigrating
constitutional rights." (See Salonga v. Cruz Paño, 134 SCRA 438, 462; citing Mercado v. Court of
First Instance of Rizal, 116 SCRA 93.) The doctrine we enunciated in National Housing Authority v.
Reyes, supra, therefore, must necessarily be abandoned if we are to uphold this Court's role as the
guardian of the fundamental rights guaranteed by the due process and equal protection clauses and
as the final arbiter over transgressions committed against constitutional rights.

The basic unfairness of the decrees is readily apparent.

Just compensation means the value of the property at the time of the taking. It means a fair and full
equivalent for the loss sustained. All the facts as to the condition of the property and its
surroundings, its improvements and capabilities, should be considered.

In this particular case, the tax declarations presented by the petitioner as basis for just compensation
were made by the Lapu-Lapu municipal, later city assessor long before martial law, when land was
not only much cheaper but when assessed values of properties were stated in figures constituting
only a fraction of their true market value. The private respondent was not even the owner of the
properties at the time. It purchased the lots for development purposes. To peg the value of the lots
on the basis of documents which are out of date and at prices below the acquisition cost of present
owners would be arbitrary and confiscatory.

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

To say that the owners are estopped to question the valuations made by assessors since they had
the opportunity to protest is illusory. The overwhelming mass of land owners accept unquestioningly
what is found in the tax declarations prepared by local assessors or municipal clerks for them. They
do not even look at, much less analyze, the statements. The Idea of expropriation simply never
occurs until a demand is made or a case filed by an agency authorized to do so.

It is violative of due process to deny to the owner the opportunity to prove that the valuation in the
tax documents is unfair or wrong. And it is repulsive to basic concepts of justice and fairness to allow
the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the property, after evidence and
arguments pro and con have been presented, and after all factors and considerations essential to a
fair and just determination have been judiciously evaluated.

As was held in the case of Gideon v. Wainwright (93 ALR 2d,733,742):

"In the light of these and many other prior decisions of this Court, it is not surprising that the Betts
Court, when faced with the contention that 'one charged with crime, who is unable to obtain counsel
must be furnished counsel by the State,' conceded that '[E]xpressions in the opinions of this court
lend color to the argument. . .' 316 U.S., at 462, 463, 86 L ed. 1602, 62 S Ct. 1252. The fact is that in
deciding as it did-that "appointment of counsel is not a fundamental right, essential to a fair trial" —
the Court in Betts v. Brady made an ubrupt brake with its own well-considered precedents. In
returning to these old precedents, sounder we believe than the new, we but restore constitutional
principles established to achieve a fair system of justice. . ."

We return to older and more sound precedents. This Court has the duty to formulate guiding and
controlling constitutional principles, precepts, doctrines, or rules. (See Salonga v. Cruz Pano, supra).

The determination of "just compensation" in eminent domain cases is a judicial function. The
executive department or the legislature may make the initial determinations but when a party claims
a violation of the guarantee in the Bill of Rights that private property may not be taken for public use
without just compensation, no statute, decree, or executive order can mandate that its own
determination shall prevail over the court's findings. Much less can the courts be precluded from
looking into the "just-ness" of the decreed compensation.

We, therefore, hold that P.D. No. 1533, which eliminates the court's discretion to appoint
commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional and void. To hold
otherwise would be to undermine the very purpose why this Court exists in the first place.

WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The temporary
restraining order issued on February 16, 1982 is LIFTED and SET ASIDE.

SO ORDERED.

Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento
and Cortes, JJ.,concur.
Teehankee, C.J., in the result.
Yap, J., on leave.
Petition dismissed. Order lifted and set aside.

FIRST DIVISION

G.R. No. L-59791 February 13, 1992

MANILA ELECTRIC COMPANY, petitioner,

vs.
THE HONORABLE GREGORIO G. PINEDA, Presiding Judge, Court of First Instance of Rizal,
Branch XXI, Pasig, Metro Manila, TEOFILO ARAYON, SR., GIL DE GUZMAN, LUCITO
SANTIAGO and TERESA BAUTISTA, respondents.
Quiason, Makalintal & Barot for petitioner.

Gil P. De Guzman Law Offices for private respondents.

MEDIALDEA, J.:

This is a petition for review on certiorari on pure question of law seeking the nullification of the orders
issued by the respondent Judge Gregorio G. Pineda, in his capacity as the presiding Judge of the
Court of First Instance (now Regional Trial Court) of Rizal, Branch 21, Pasig, Metro Manila in Civil
Case No. 20269, entitled "Manila Electric Company v. Teofilo Arayon, et al." The aforesaid orders are
as follows: (1) the order dated December 4, 1981 granting the motion for payment of private
respondents; (2) the order dated December 21, 1981 granting the private respondents' omnibus
motion; and (3) the order dated February 9, 1982 adjudging in favor of private respondents the fair
market value of their property at forty pesos (P40.00) per square meter for a total of P369,720.00
and denying the motions for contempt for being moot and academic and the motion for
reconsideration of the orders dated December 4, 1981 and December 21, 1981 for lack of merit.

The antecedent facts giving rise to the controversy at bar are as follows:

Petitioner Manila Electric Company (MERALCO) is a domestic corporation duly organized and
existing under the laws of Philippines. Respondent Honorable Judge Gregorio G. Pineda is
impleaded in his official capacity as the presiding judge of the Court of First Instance (now Regional
Trial Court) of Rizal, Branch XXI, Pasig, Metro Manila. While private respondents Teofilo Arayon, Sr.,
Gil de Guzman, Lucito Santiago and Teresa Bautista are owners in fee simple of the expropriated
property situated at Malaya, Pililla, Rizal.

On October 29, 1974, a complaint for eminent domain was filed by petitioner MERALCO against
forty-two (42) defendants with the Court of First Instance (now Regional Trial Court) of Rizal, Branch
XXII, Pasig, Metro Manila.

The complaint alleges that for the purpose of constructing a 230 KV Transmission line from Barrio
Malaya to Tower No. 220 at Pililla, Rizal, petitioner needs portions of the land of the private
respondents consisting of an aggregate area of 237,321 square meters. Despite petitioner's offers to
pay compensation and attempts to negotiate with the respondents', the parties failed to reach an
agreement.

Private respondents question in their motion to dismiss dated December 27, 1974 the petitioner's
legal existence and the area sought to be expropriated as too excessive.

On January 7, 1975, respondents Gil de Guzman and Teresa Bautista filed a motion for contempt of
court alleging, among other things that petitioner's corporate existence had expired in 1969 and
therefore it no longer exists under Philippine Laws.

But despite the opposition of the private respondents, the court issued an Order dated January 13,
1975 authorizing the petitioner to take or enter upon the possession of the property sought to be
expropriated.

On July 13, 1976, private respondents filed a motion for withdrawal of deposit claiming that they are
entitled to be paid at forty pesos (P40.00) per square meter or an approximate sum of P272,000.00
and prayed that they be allowed to withdraw the sum of P71,771.50 from petitioner's deposit-account
with the Philippine National Bank, Pasig Branch. However, respondents motion was denied in an
order dated September 3, 1976.

In the intervening period, Branch XXII became vacant when the presiding Judge Nelly Valdellon-
Solis retired, so respondent Judge Pineda acted on the motions filed with Branch XXII.

Pursuant to a government policy, the petitioners on October 30, 1979 sold to the National Power
Corporation (Napocor) the power plants and transmission lines, including the transmission lines
traversing private respondents' property.

On February 11, 1980, respondent court issued an Order appointing the members of the Board of
Commissioners to make an appraisal of the properties.

On June 5, 1980, petitioner filed a motion to dismiss the complaint on the ground that it has lost all
its interests over the transmission lines and properties under expropriation because of their sale to
the Napocor. In view of this motion, the work of the Commissioners was suspended.

On June 9, 1981, private respondents filed another motion for payment. But despite the opposition of
the petitioner, the respondent court issued the first of the questioned Orders dated December 4,
1981 granting the motion for payment of private respondents, to wit:

As prayed for by defendants Teofilo Arayon, Lucito Santiago, Teresa Bautista and Gil
de Guzman, thru counsel Gil de Guzman, in their Motion for Payment, for reasons
therein stated, this Court hereby orders the plaintiff to pay the movants the amount of
P20,400.00 for the expropriated area of 6,800 square meters, at P3.00 per square
meter without prejudice to the just compensation that may be proved in the final
adjudication of this case.

The aforesaid sum of P20,400.00 having been deposited by plaintiff in the Philippine
National Bank (Pasig Branch) under Savings Account No. 9204, let the Deputy
Sheriff of this Branch Mr. Sofronio Villarin withdraw said amount in the names of
Teofilo Arayon, Lucito Santiago, Teresa Bautista and Gil de Guzman, the said
amount to be delivered to the defendant's counsel Atty. Gil de Guzman who shall
sign for the receipt thereof.

SO ORDERED. (Rollo, p. 108)

On December 15, 1981, private respondents filed an Omnibus Motion praying that they be allowed
to withdraw an additional sum of P90,125.50 from petitioner's deposit-account with the Philippine
National Bank.

By order dated December 21, 1981, the respondent court granted the Omnibus Motion hereunder
quoted as follows:

Acting on the Omnibus Motion dated December 15, 1981 filed by Atty. Gil de
Guzman, counsel for Teofilo Arayon, Sr., Lucito Santiago, Teresita Bautista and for
himself, and it appearing that there is deposited in the bank in trust for them the
amount of P90,125.50 to guarantee just compensation of P272,000.00, thereby
leaving a balance of P161,475.00 still payable to them, the same is hereby
GRANTED.
 Mr. Nazario Nuevo and Marianita Burog, respectively the Manager and Cashier,
Philippine National Bank, Pasig Branch, Pasig, Metro Manila are hereby ordered to
allow Sheriff Sofronio Villarin to withdraw and collect from the bank the amount of
P90,125.50 under Savings Account No. 9204 and to deliver the same to Atty. Gil de
Guzman upon proper receipt, pending final determination of just compensation.

SO ORDERED. (Rollo, p. 120)

Private respondents filed another motion dated January 8, 1982 praying that petitioner be ordered to
pay the sum of P169, 200.00.

On January 12, 1982 petitioner filed a motion for reconsideration of the Orders dated December 4,
1981 and December 21, 1981 and to declare private respondents in contempt of court for forging or
causing to be forged the receiving stamp of petitioner's counsel and falsifying or causing to be
falsified the signature of its receiving clerk in their Omnibus Motion.

In response to private respondents' motion for payment dated January 8, 1982, petitioner filed an
opposition alleging that private respondents are not entitled to payment of just compensation at this
stage of the proceeding because there is still no appraisal and valuation of the property.

On February 9, 1982 the respondent court denied the petitioner's motion for reconsideration and
motion for contempt, the dispositive portion of which is hereunder quoted as follows:

Viewed in the light of the foregoing, this Court hereby adjudges in favor of
defendants Teofilo Arayon, Sr., Lucito Santiago, Teresita Bautista and Atty. Gil de
Guzman the fair market value of their property taken by MERALCO at P40.00 per
square meter for a total of P369,720.00, this amount to bear legal interest from
February 24, 1975 until fully paid plus consequential damages in terms of attorney's
fees in the sum of P10,000.00, all these sums to be paid by MERALCO to said
defendants with costs of suit, minus the amount of P102,800.00 already withdrawn
by defendants.

For being moot and academic, the motions for contempt are DENIED; for lack of
merit, the motion for reconsideration of the orders of December 4, 1981 and
December 21, 1981 is also DENIED.

SO ORDERED. (Rollo, p. 211-212)

Furthermore, the respondent court stressed in said order that "at this stage, the Court starts to
appoint commissioners to determine just compensation or dispenses with them and adopts the
testimony of a credible real estate broker, or the judge himself would exercise his right to formulate
an opinion of his own as to the value of the land in question. Nevertheless, if he formulates such an
opinion, he must base it upon competent evidence." (Rollo, p. 211)

Hence, this petition.

Subsequently, the respondent court issued an Order dated March 22, 1982 granting the private
respondents' motion for execution pending appeal, thus requiring petitioner to deposit P52,600.00
representing the consideration paid by Napocor for the property it bought from petitioner which
includes the subject matter of this case, computed at P200.55 per square meter and to render an
accounting.
On March 26, 1982, petitioner filed a petition for preliminary injunction with this Court seeking to
enjoin respondent judge and all persons acting under him from enforcing the Order dated March 22,
1982.

This Court issued a temporary restraining order addressed to respondent judge. A motion to lift the
restraining order was filed by the respondents. Despite a series of oppositions and motions to lift the
said order, this Court reiterated its stand and noted that the restraining order is still effective.

The petitioner strongly maintains that the respondent court's act of determining and ordering the
payment of just compensation to private respondents without formal presentation of evidence by the
parties on the reasonable value of the property constitutes a flagrant violation of petitioner's
constitutional right to due process. It stressed that respondent court ignored the procedure laid down
by the law in determining just compensation because it formulated an opinion of its own as to the
value of the land in question without allowing the Board of Commissioners to hold hearings for the
reception of evidence.

On the other hand, private respondents controvert the position of the petitioner and contend that the
petitioner was not deprived of due process. They agreed with respondent court's ruling dispensing
the need for the appointment of a Board of Commissioners to determine just compensation, thus
concluding that the respondent court did not err in determining just compensation.

Furthermore, petitioner argues that the respondent judge gravely abused his discretion in granting
the motion for execution pending appeal and consequently denying the petitioner's motion to
dismiss. Respondent judge should have ordered that Napocor be impleaded in substitution of
petitioner or could have at least impleaded both the Napocor and the petitioner as party plaintiffs.

The controversy boils down to the main issue of whether or not the respondent court can dispense
with the assistance of a Board of Commissioners in an expropriation proceeding and determine for
itself the just compensation.

The applicable laws in the case at bar are Sections 5 and 8 of Rule 67 of the Revised Rules of
Court. The said sections particularly deal with the ascertainment of compensation and the court's
action upon commissioners' report, to wit:

Sec. 5. Upon the entry of the order of condemnation, the court shall appoint not more
than three (3) competent and disinterested persons as commissioners to ascertain
and report to the court the just compensation for the property sought to be taken. The
order of appointment shall designate the time and place of the first session of the
hearing to be held by the commissioners and specify the time within which their
report is to be filed with the court.

xxx xxx xxx

Sec. 8. Upon the expiration of the period of ten (10) days referred to in the preceding
section, or even before the expiration of such period but after all the interested
parties have filed their objections to the report or their statement of agreement
therewith, the court may, after hearing, accept the report and render judgment in
accordance therewith; or, for cause shown, it may recommit the same to the
commissioners for further report of facts; or it may set aside the report and appoint
new commissioners, or it may accept the report in part and reject it in part; and it may
make such order or render such judgment as shall secure to the plaintiff the property
 essential to the exercise of his right of condemnation, and to the defendant just
compensation for the property so taken.

We already emphasized in the case of Municipality of Biñan v. Hon. Jose Mar Garcia (G.R. No.
69260, December 22, 1989, 180 SCRA 576, 583-584) the procedure for eminent domain, to wit:

There are two (2) stages in every action of 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 lawful right to take the property sought to be condemned, for the
public use or purpose described in the complaint, upon the payment of just
compensation to be determined as of the date of the filing of the complaint". 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 reversal of the order by taking an appeal therefrom.

Respondent judge, in the case at bar, arrived at the valuation of P40.00 per square meter on a
property declared for real estate tax purposes at P2.50 per hectare on the basis of a "Joint Venture
Agreement on Subdivision and Housing Projects" executed by A.B.A Homes and private
respondents on June 1, 1972. This agreement was merely attached to the motion to withdraw from
petitioner's deposit. Respondent judge arrived at the amount of just compensation on its own,
without the proper reception of evidence before the Board of Commissioners. Private respondents
as landowners have not proved by competent evidence the value of their respective properties at a
proper hearing. Likewise, petitioner has not been given the opportunity to rebut any evidence that
would have been presented by private respondents. In an expropriation case such as this one where
the principal issue is the determination of just compensation, a trial before the Commissioners is
indispensable to allow the parties to present evidence on the issue of just compensation. Contrary to
the submission of private respondents, the appointment of at least three (3) competent persons as
commissioners to ascertain just compensation for the property sought to be taken is a mandatory
requirement in expropriation cases. While it is true that the findings of commissioners may be
disregarded and the court may substitute its own estimate of the value, the latter may only do so for
valid reasons, i.e., where the Commissioners have applied illegal principles to the evidence
submitted to them or where they have disregarded a clear preponderance of evidence, or where the
amount allowed is either grossly inadequate or excessive (Manila Railroad Company v. Velasquez,
32 Phil. 286). Thus, trial with the aid of the commissioners is a substantial right that may not be done
away with capriciously or for no reason at all. Moreover, in such instances, where the report of the
commissioners may be disregarded, the trial court may make its own estimate of value from
competent evidence that may be gathered from the record. The aforesaid joint venture agreement
relied upon by the respondent judge, in the absence of any other proof of valuation of said
properties, is incompetent to determine just compensation.

Prior to the determination of just compensation, the property owners may rightfully demand to
withdraw from the deposit made by the condemnor in eminent domain proceedings. Upon an award
of a smaller amount by the court, the property owners are subject to a judgment for the excess or
upon the award of a larger sum, they are entitled to a judgment for the amount awarded by the court.
Thus, when the respondent court granted in the Orders dated December 4, 1981 and December 21,
1981 the motions of private respondents for withdrawal of certain sums from the deposit of petitioner,
without prejudice to the just compensation that may be proved in the final adjudication of the case, it
committed no error.

Records, specifically Meralco's deed of sale dated October 30, 1979, in favor of Napocor show that
the latter agreed to purchase the parcels of land already acquired by Meralco, the rights, interests
and easements over those parcels of land which are the subject of the expropriation proceedings
under Civil Case No. 20269, (Court of First Instance of Rizal, Branch XXII), as well as those parcels
of land occupied by Meralco by virtue of grant of easements of right-of-way (see Rollo, pp. 341-342).
Thus, Meralco had already ceded and in fact lost all its rights and interests over the aforesaid
parcels of land in favor of Napocor. In addition, the same contract reveals that the Napocor was
previously advised and actually has knowledge of the pending litigation and proceedings against
Meralco (see Rollo, pp. 342-343). Hence, We find the contention of the petitioner tenable. It is
therefore proper for the lower court to either implead the Napocor in substitution of the petitioner or
at the very least implead the former as party plaintiff.

All premises considered, this Court is convinced that the respondent judge's act of determining and
ordering the payment of just compensation without the assistance of a Board of Commissioners is a
flagrant violation of petitioner's constitutional right to due process and is a gross violation of the
mandated rule established by the Revised Rules of Court.

ACCORDINGLY, the petition is GRANTED and the order dated February 9, 1982 issued by the
respondent judge insofar as it finally determined the amount of just compensation is nullified. This
case is hereby ordered remanded to the lower court for trial with the assistance of a Board of
Commissioners. Further, the National Power Corporation is impleaded as party plaintiff therein.

SO ORDERED.

Narvasa, C.J., Cruz and Griño-Aquino, JJ., concur.