DO M. OLIVO, ALICIA O. SALAZAR, ANITA O. ORDONO, ANGELITA O.

L
IM, AND ADELFA O. ESPINAS, Respondents.

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LEONEN, J.:

Republic of the Philippines

When the taking of private property is no longer for a public purpose, t
SUPREME COURT
he expropriation complaint should be dismOOOissed by the trial court. T
Manila he case will proceed only if the trial court's order of expropriation beca
me final and executory and the expropriation causes prejudice to the pr
operty owner.
SECOND DIVISION

Before this court is a Motion1 filed by the National Power Corporation s

G.R. No. 191945 March 11, 2015
eeking to withdraw its Petition for Review2 dated June 4, 2010. The Petit
ion sought to reverse the Decision3 of the Court of Appeals dated Aug
ust 7, 2009, which affirmed the trial court’s Decision recalling the Writ of
NATIONAL CORPORATION, Petitioner,
Possession issued in the National Power Corporation’s favor.
vs.

SOCORRO T. POSADA, RENATO BUENO, ALICE BALIN, ADRIAN TABLIZO,

TEOFILO TABLIZO, and LYDIA T. OLIVO, substituted by her heirs, ALFRE
The National Power Corporation instituted expropriation proceedings for
the acquisition of a right-of-way easement over parcels of land located i
n Barangay Marinawa, Bato,Catanduanes owned by respondents Socorro
T. Posada, Renato Bueno, Alice Balin, Adrian Tablizo, Teofilo Tablizo, and
Lydia Tablizo.4 The expropriation was for the construction and mainten
mount of ₱3,280.00, alleging that it represented the provisional value of
the properties.11
On July 10, 2003, the court-appointed commissioners recommended a fai

ance of its Substation Island Grid Project.5 The case was docketed as Ci r market value of ₱1,500.00 per square meter based on the following co

vil Case No. 0008.6 The National Power Corporation offered the price of nsiderations:

₱500.00 per square meter. In their Answer, respondents objected to the

offer and alleged that the value of the properties was ₱2,000.00 per sq
a. The location of the subject parcels of land, which is along the highwa
uare meter.7
y, within a fast-growing community, ideal both for residential and busine
ss purposes, about 3 1/2 kilometers from the capital town of Virac, a st

In the Order dated December 16, 2002, Branch 438 of the Regional Trial ones-throw from the seashore of Cabugao Bay and not too distant from

Court of Virac, Catanduanes confirmed the National Power Corporation’ "Maribina Falls", a tourist attraction;

s right to expropriate the properties and ordered the creation of a com

mission to determine the amount of just compensation to be paid to re
b. The prevailing market value of the properties along the national high
spondents.9
way ranges from ₱1,500.00 to ₱2, 000.00 per square meter as per interv
iew with the residents of the place;

On January 28, 2003, the National Power Corporation filed a Notice to

Take Possession before the court on the basis of Rule 67, Section 210 o
c. Structures and improvements consisting of the residential houses of [r
f the Rules of Court. It alleged that it was entitled to a Writ of Possessi
espondents] and others can be found on the property, hence if the expr
on in view of its deposit with the Land Bank of the Philippines in the a
opriation proceeds, [respondents] would be constrained to leave their ho
mes to relocate.12

The National Power Corporation opposed the recommendation of the co
mmissioners, arguing that:
a. the opinion given by the persons who live in the area should not be
given weight because they are not experts in real estate appraisal;
b. the value of the land at the time of taking and not its potential as a
building site is the criteria for determination of just compensation[;]
c. The Provincial Appraisal Committee valued the lot at ₱500.00 per squ
are meter;
d. The approved zonal values of real properties in Catanduanes classified
as Residential Regular (RR) is ₱105.00;
e. The Schedule of Fair Market Values prescribed ₱160.00 for all lots alo
ng the national road from Marinawa Bridge to FICELCO;
f. Only an easement of right-of-way shall be acquired over the propertie
s of the other defendants which remain classified as cocoland and as pr
ovided in [Republic Act No.] 6395 (NPC Charter), shall not exceed 10%
of the market value declared by the owner or administrator or anyone h
aving legal interest in the property, or as determined by the assessor, w
hichever is lower.13 On November 19, 2003, the National Power Corpora
tion amended its Complaint stating that it needed to acquire portions of
the properties, instead of just an easement of right of way, for the con
struction of the Substation Island Grid Project. For this reason, it deposit
ed with Land Bank of the Philippines the amount of ₱580,769.93, allegin
g that this represented the value of the 3,954 square meters sought to
be expropriated.14
The National Power Corporation filed an Urgent Ex Parte Motion for the
Issuance of a Writ of Possession.15 It also served respondents with a N
otice to Take Possession stating that "it shall enter and take possession
of the property on September 26, 2005."16
In the Order dated July 14, 2005, the trial court granted the Urgent Ex
Parte Motion for the Issuance of a Writ of Possession and issued a Writ
of Possession.17
Respondents filed a Motion to Lift and/or Suspend the Issuance of the
Writ of Possession, which the trial court denied.18
On November 27, 2006, the trial court resolved the issue of just compe
nsation as follows:

Undaunted, respondents filed an Urgent Motion to Grant Defendants Ti

me to Remove their Houses and Improvements as well as Additional De
WHEREFORE, all factors carefully evaluated and considered, this Court, h
posit for Use in Land Acquisition and Expenses for Transfer of their Res
ereby, fixes the just compensation at TWO THOUSAND PESOS (₱2,000.0
pective Residential Houses.19
0) per square meter for the taking of the properties of [respondents] by
[petitioner].

The trial court granted respondents’ Motion in its Order dated June 5, 2
006. It fixed the value of the structures and improvements on the land i
LIKEWISE, in view of NPC’s failure to comply with the Court’s order date
n the amount of ₱827,000.00, based on the value determined by the co
d June 5, 2006 and for misleading this Court when it filed its Motion fo
mmissioners. It ordered the National Power Corporation to deposit an a
r the Issuance of Writ of Possession, this Court, hereby, RECALLS its ord
dditional amount of ₱262,639.17.20 The trial court stated that this amou
er granting said Motion and CANCELS the Writ of Possession. AND, AS
nt was the difference between value of structures and improvements det
A FINAL NOTE, the amount determined by the Court in said Order repr
ermined by the trial court (₱827,000.00) and the amount initially deposit
esents only the value of the structures and improvements and does not
ed by the National Power Corporation (₱564,360.83).21
include the value of the land. Even if said amount is fully paid by NPC,
still it would not be entitled to a Writ of Possession until it has paid th
e value of the land. And what should be its value? Is it the zonal valuat
The National Power Corporation failed to deposit the additional amount.
ion of the Bureau of Internal Revenue? Under Section 4 of Rep. [A]ct. N
The trial court issued an Order during the November 22, 2006 hearing f
o. 8974, payment of one hundred [percent] (100%) of the value of the
or the National Power Corporation to make the necessary deposit. The i
property based on the current relevant zonal valuation of the Bureau of
ssue on the amount of just compensation was also submitted for decisio
Internal Revenue is required upon the filing of the complaint, and after
n.22
due notice to the defendant. This Court believes that this basis is used
because the just compensation is yet to be determined during the seco
nd stage of the expropriation proceeding. In the instant case, the compl
aint has long been filed, and the just compensation has already been d
etermined above. Therefore, it should now be the basis for the re-issuan
ce of a Writ of Possession – nay, even the transfer of ownership if fully
paid.
SO ORDERED.23 (Emphasis supplied)
The National Power Corporation appealed the trial court’s Decision to th
e Court of Appeals.24 On August 7, 2009,25 the Court of Appeals rend
ered a Decision denying the appeal.26 It held that the trial court commi
tted no reversible error "in adopting the recommendation of the appoint
ed commissioners insofar as the value of the subject property is concern
ed."27
The Court of Appeals also held that "the writ of possession was correctl
y recalled by the lower court."28 Citing Republic v. Judge Gingoyon,29 it
held that the National Power Corporation must first pay respondents th
e amount determined by the trial court.30 In the absence of proof that
respondents were paid, the National Power Corporation cannot take pos
session of the property.31
The National Power Corporation filed a Motion for Reconsideration, but
this was denied in the Resolution32 dated April 14, 2010. Hence, it filed
a Petition for Review on Certiorari before this court.
Respondents filed their Comment33 on September 17, 2010. The National
Power Corporation filed its Reply34 to the Comment, substantially reiter
ating the arguments in its Petition.
During the pendency of the case before this court, the National Power
Corporation filed an Urgent Motion for the Issuance of a Temporary Res
training Order35 dated December 13, 2012, which was received by this c
ourt on January 7, 2013. Respondents, in turn, filed their Comments and
Opposition to the Urgent Motion for Issuance of a Temporary Restrainin
g Order.36
On March 11, 2013, this court issued a Resolution37 deferring action on
the Motion for the Issuance of a Temporary Restraining Order.

On May 17, 2013, the National Power Corporation filed a Very Urgent M
otion to Resolve38 stating that "the delay in the possession of the subje
ct properties – intended for the Marinawa 10 MVA Sub-Station Project –
would adversely affect the implementation of the Codon-Virac Transmis
sion Lines[.]"39
In a turn of events, the National Power Corporation informed its counsel
on July 24, 2014 that it no longer needed the properties as it was set
to acquire an alternative site.40 It also requested its counsel to withdraw
Civil Case No. 0008 before the trial court because "it [was] impractical t
o pursue the acquisition of the original site[.]"41
Thus, the National Power Corporation, through counsel, filed the present
Motion to Withdraw Appeal,42 praying for the withdrawal of its appeal
before this court and, ultimately, for its Amended Complaint before the
trial court to be dismissed.43
We are asked to decide whether the National Power Corporation may b
e allowed to withdraw its Petition for Review and whether the withdrawa
l has the effect of dismissing its Amended Complaint before the trial co
urt.
We grant the Motion to Withdraw the Petition for Review.
Expropriation proceedings for national infrastructure projects are governe
d by Rule 67 of the Rules of Court and Republic Act No. 8974.44
The power of eminent domain is an inherent competence of the state. I
t is essential to a sovereign. Thus, the Constitution does not explicitly de
fine this power but subjects it to a limitation: that it be exercised only f
or public use and with payment of just compensation.45 Whether the us
e is public or whether the compensation is constitutionally just will be d
etermined finally by the courts.
However, the manner of its exercise such as which government instrume
ntality can be delegated with the power to condemn, under what condit
ions, and how may be limited by law. Republic Act No. 8974 does these
, but it should not be read as superseding the power of this court to p
romulgate rules of procedure. Thus, our existing rules should be read in
conjunction with the law that limits and conditions the power of eminen
t domain.
Expropriation, the procedure by which the government takes possession
of private property, is outlined primarily in Rule 67 of the Rules of Cour
t. It undergoes two phases. The first phase determines the propriety of t
he action. The second phase determines the compensation to be paid t
o the landowner. Thus:
There are two (2) stages in every action for expropriation. The first is co
ncerned with the determination of the authority of the plaintiff to exercis
e 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 pu
blic use or purpose described in the complaint, upon the payment of ju
st compensation to be determined as of the date of the filing of the co
mplaint." 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 mo
re 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 s
ought to be taken." This is done by the Court with the assistance of no
t more than three (3) commissioners. The order fixing the just compensa
tion on the basis of the evidence before, and findings of, the commissio
ners 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 th
e 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 o
r otherwise. Obviously, too, such a dissatisfied party may seek a reversal
of the order by taking an appeal therefrom.46 (Emphasis supplied, citati
ons omitted)
The first phase of expropriation commences with the filing of the compl
aint. It ends with the order of the trial court to proceed with the expro
priation and determination of just compensation. During the pendency of
the complaint before the trial court, the state may already enter and p
ossess the property subject to the guidelines in Rule 67 of the Rules of
Court.
Rule 67 of the Rules of Court, however, is not the only set of rules that
governs the first phase of expropriation. On November 7, 2000, Congre
ss enacted Republic Act No. 8974 to govern the expropriation of private
property for national government infrastructure projects. The law qualifi
es the manner by which the government may enter and take possession
of the property to be expropriated.
Rule 67, Section 2 of the Rules of Court states:
Sec. 2. Entry of plaintiff upon depositing value with authorized governme
nt depositary. — Upon the filing of the complaint or at any time therea
fter and after due notice to the defendant, the plaintiff shall have the ri
ght to take or enter upon the possession of the real property involved i
f he deposits with the authorized government depositary an amount equ
ivalent to the assessed value of the property for purposes of taxation to
be held by such bank subject to the orders of the court. Such deposit
shall be in money, unless in lieu thereof the court authorizes the deposi
t of a certificate of deposit of a government bank of the Republic of th
e Philippines payable on demand to the authorized government deposita
ry. (Emphasis supplied)
Section 4 of Republic Act No. 8974,on the other hand, mandates: Sectio
n 4. Guidelines for Expropriation Proceedings.- Whenever it is necessary
to acquire real property for the right-of-way or location for any national
government infrastructure project through expropriation, the appropriate i
mplementing agency shall initiate the expropriation proceedings before t
he proper court under the following guidelines:
(a) Upon the filing of the complaint, and after due notice to the defend
ant, the implementing agency shall immediately pay the owner of the pr
operty the amount equivalent to the sum of (1) one hundred percent (1
00%) of the value of the property based on the current relevant zonal v
aluation of the Bureau of Internal Revenue (BIR); and (2) the value of th
e improvements and/or structures as determined under Section 7 hereof;
. . . .
Upon compliance with the guidelines abovementioned, the court shall im
mediately issue to the implementing agency an order to take possession
 of the property and start the implementation of the project. (Emphasis
supplied)
As stated in Gingoyon, Republic Act No. 8974 "provides for a procedure
eminently more favorable to the property owner than Rule 67"47 since
it requires the immediate payment of the zonal value and the value of t
he improvements on the land to the property owner before the trial co
urt can allow the government to take possession. In contrast, Rule 67 o
nly requires the government to deposit the assessed value of the proper
ty for it to enter and take possession.
In its Petition, the National Power Corporation argues that the amount o
f just compensation at ₱2,000.00 per square meter is excessive since the
zonal valuation of the Bureau of Internal Revenue classifies the property
as cocoland48 pegged at 4.15 per square meter, and the commissioner
s merely "engaged in speculation and guess-work"49 when they arrived
at the amount.50
The National Power Corporation argues that the Writ of Possession shou
ld not have been recalled because it already deposited ₱580,769.93, the
provisional amount required by Republic Act No. 8974. It argues that th
e amount ordered by the trial court to be paid to respondents was the
amount of just compensation, which should have been distinguished fro
m the provisional amount required for the issuance of a Writ of Possess
ion. The deposit of the provisional amount was sufficient to be granted
a Writ of Possession and to take possession of the property.51
In their Comment, respondents argue that the Court of Appeals did not
err in sustaining the amount of just compensation determined by the tri
al court since the value was based on location, costs of improvements,
prevailing market values of the properties similarly located, and opinions
of the residents in the area.52
Respondents also argue that the Court of Appeals correctly upheld the t
rial court’s recall of the Writ of Possession because there was no showin
g that any payment was made to respondents, as required by Gingoyon
.53
The purpose for the taking of private property was for the construction
of the National Power Corporation’s Substation Island Grid Project. Accor
ding to the Implementing Rules and Regulations of Republic Act No. 89
74, projects related to "power generation, transmission and distribution"5
4 are national infrastructure projects covered by the law. The National P
ower Corporation must first comply with the guidelines stated in Republi
c Act No. 8974 before it can take possession of respondents’ property.
Thus, the trial court committed two errors. First, it based the value of th
e improvements on the property on the determination made by the co
mmissioners, and not on the determination made by the National Power
The trial court allowed the National Power Corporation to take possessio
Corporation, contrary to the requirements of Section 7 of Republic Act
n of the properties because of its deposit with Land Bank of the Philippi
No. 8974:
nes of the alleged provisional value. However, the trial court recalled the
Writ of Possession because the National Power Corporation failed to de
posit the additional amount.
Section 7. Valuation of Improvements and/or Structures.- The Departmen
t of Public Works and Highways and other implementing agencies conce
rned, in coordination with the local government units concerned in the
We find that the trial court erred, not in recalling the Writ of Possession
acquisition of right-of-way, site or location for any national government i
, but in granting the Writ of Possession in the first place.
nfrastructure project, are hereby mandated to adopt within sixty (60) day
s upon approval of this Act, the necessary implementing rules and regul

Section 4 of Republic Act No. 8974, unlike Rule 67, Section 2 of the Rul ations for the equitable valuation of the improvements and/or structures

es of Civil Procedure, requires immediate payment to the landowner of 1 on the land to be expropriated.

00% of the value of the property based on the current relevant zonal v
aluation of the Bureau of Internal Revenue. It is the Bureau of Internal R
The Implementing Rules and Regulations of Republic Act No. 8974 clarifi
evenue, not the court, which determines the zonal value.
es:

The law also requires the immediate payment of the value of the impro
Section 10. Valuation of Improvements and/or Structures -Pursuant to Se
vements and/or structures on the land before the trial court can issue t
ction 7 of the Act, the Implementing Agency shall determine the valuati
he Writ of Possession.
on of the improvements and/or structures on the land to be acquired u
sing the replacement cost method. The replacement cost of the improve
ments/structures is defined as the amount necessary to replace the impr
ovements/structures, based on the current market prices for materials, eq
uipment, labor, contractor’s profit and overhead, and all other attendant
he correct provisional value, it cannot be considered as compliance with
Section 4 of Republic Act No. 8974. In Gingoyon:
[T]he law plainly requires direct payment to the property owner, and not

costs associated with the acquisition and installation in place of the affec a mere deposit with the authorized government depositary.

ted improvements/structures. In the valuation of the affected improveme

nts/structures, the Implementing Agency shall consider, among other thin
Without such direct payment, no writ of possession may be obtained.55
gs, the kinds and quantities of materials/equipment used, the location, c
(Emphasis supplied)
onfiguration and other physical features of the properties, and prevailing
construction prices. (Emphasis supplied)

There are, of course, instances when immediate payment cannot be mad

e even if the implementing agency is willing to do so. The owner of th
According to the law, it is the implementing agency, not the commission
e property is not precluded from contesting the power of the implemen
ers, that determines the proffered value of the improvements and struct
ting agency to exercise eminent domain, the necessity of the taking, the
ures. A Writ of Possession may be issued once there is confirmation by
public character of its use, or the proffered value by the implementing
the trial court of the proffered value.
agency. In these instances, the implementing agency may deposit the pr
offered value with the trial court having jurisdiction over the expropriatio

The second error of the trial court occurred when it issued a Writ of Po n proceedings.

ssession on the basis of the National Power Corporation’s deposit of the

alleged provisional value with Land Bank of the Philippines, not on its
Considering that the National Power Corporation failed to comply with t
actual payment to respondents. Even if the deposit of ₱580,769.93 was t
he guidelines in Republic Act No. 8974, a Writ of Possession should not
have been issued.

II
The recall of an improperly issued Writ of Possession is not the same as
an injunction.
In its Urgent Motion for the Issuance of a Temporary Restraining Order,
the National Power Corporation argued that it was unable to commence
the Substation Project as it was paralyzed by the trial court’s Decision
dated November 27, 2006 recalling the issuance of the Writ of Possessio
n in its favor.56
The National Power Corporation manifested that the project was "intend
ed to resolve the six (6) to eight (8) hours of daily brownouts being suf
fered by the residents of the province."57 It cited Section 3 of Republic
Act No. 897558 and argued that the project cannot be restrained by th
e recall of a previously issued Writ of Possession because this amounted
to an injunctive writ expressly prohibited by Section 4 of Republic Act
No. 8975.59
Respondents, on the other hand, filed their Comments and Opposition t
o the Urgent Motion for Issuance of a Temporary Restraining Order. The
y argued that records of the First Catanduanes Electric Cooperative, Inc.
(FICELCO)60 showed that brownouts in the entire province only average
d 2.97 hours per day and not 6 to 8 hours as claimed by the National
Power Corporation. Contrary to the National Power Corporation’s claims,
respondents never filed any motion for the issuance of a restraining ord
er or injunctive writ against the National Power Corporation. They argue
d that the trial court recalled the Writ of Possession upon a finding that
the National Power Corporation misled the trial court by making its ow
n interpretation of Section 4 of Republic Act No. 8974,in that a provisio
nal deposit was sufficient compliance when the law requires immediate p
ayment to the owner of the property.61
The National Power Corporation’s argument that the recall of a Writ of
Possession amounts to an injunctive writ prohibited under Section 3 of
Republic Act No. 8975 is without merit.
Section 3 of Republic Act No. 8975 states:
Sec. 3. Prohibition on the Issuance of Temporary Restraining Orders, Prel
iminary Injunctions and Preliminary Mandatory Injunctions. - No court, ex
cept the Supreme Court, shall issue any temporary restraining order, prel
iminary injunction or preliminary mandatory injunction against the govern
ment, or any of its subdivisions, officials or any person or entity, whethe
r public or private, acting under the government’s direction, to restrain,
prohibit or compel the following acts: (a) Acquisition, clearance and deve
lopment of the right-of-way and/or site or location of any national gove
rnment project(Emphasis supplied)
The recall of a Writ of Possession for failure to comply with the guidelin
es of Section 4 of Republic Act No. 8974 is not the same as the issuan
ce of an injunctive writ. The first is an action by the trial court to correc
t an erroneous issuance while the second is an ancillary remedy to pres
erve rights.
For an injunctive writ to be issued, parties must specifically pray for its i
ssuance. Under Rule 58, Section 4(a)62 of the Rules of Civil Procedure, a
preliminary injunction or temporary restraining order may be granted o
nly when, among other requisites, the applicant is entitled to the relief d
emanded. In Nerwin Industries Corporation v. PNOC-Energy Development
Corporation:63
A preliminary injunction is an order granted at any stage of an action o
r proceeding prior to the judgment or final order, requiring a party or a
court, agency or person, to refrain from a particular act or acts. It is a
n ancillary or preventive remedy resorted to by a litigant to protect or
preserve his rights or interests during the pendency of the case. As such
, it is issued only when it is established that:
(a) The applicant is entitled to the relief demanded, and the whole or p
art of such relief consists in restraining the commission or continuance o
f the act or acts complained of, or in requiring the performance of an a
ct or acts, either for a limited period or perpetually; or
(b) The commission, continuance or nonperformance of the act or acts c
omplained of during the litigation would probably work injustice to the
applicant; or
(c) A party, court, agency or a person is doing, threatening, or is attem
pting to do, or is procuring or suffering to be done, some act or acts
probably in violation of the rights of the applicant respecting the subject
of the action or proceeding, and tending to render the judgment ineffe
ctual.64
 uo is the last actual peaceable uncontested status which preceded the c
ontroversy.68
Section 3 of Republic Act No. 8975 contemplates only the issuance of a
n injunctive writ by lower courts. In Republic v. Nolasco:65

In expropriation cases involving national infrastructure projects, the trial c

ourt issues a Writ of Possession upon compliance by the implementing
What is expressly prohibited by the statute is the issuance of the provisi
agency of the guidelines stated in Section 4 of Republic Act No. 8974. I
onal reliefs of temporary restraining orders, preliminary injunctions, and
f it is later found that the guidelines were not complied with, the trial c
preliminary mandatory injunctions. It does not preclude the lower courts
ourt recalls the Writ of Possession for being improperly issued.
from assuming jurisdiction over complaints or petitions that seek as ulti
mate relief the nullification or implementation of a national government i
nfrastructure project. A statute such as Republic Act No. 8975 cannot di
When a trial court recalls a Writ of Possession in an expropriation proce
minish the constitutionally mandated judicial power to determine whether
eding, the parties do not revert to status quo, i.e. the status of the part
or not there has been a grave abuse of discretion amounting to lack o
ies before the expropriation complaint was filed. The trial court’s order o
r excess of jurisdiction on the part of any branch or instrumentality of g
f condemnation stands regardless of whether a Writ of Possession was a
overnment.66 (Emphasis supplied)
lready issued.

Philippine Ports Authority v. Cipres Stevedoring & Arrastre, Inc.67 adds:

The National Power Corporation was not able to take possession of the
property because it failed to comply with Republic Act No. 8974. Respo
ndents did not file an application for the issuance of a writ of prelimina
[I]t is settled that the sole object of a preliminary injunction, may it be
ry injunction or temporary restraining order against it. The trial court did
prohibitory or mandatory, is to preserve the status quo until the merits
not issue any injunctive writ. In other words, it was the National Power
of the case can be heard and the final judgment rendered. The status q
Corporation’s own acts that prevented it from implementing its infrastruc
ture project.

III
In accordance, however, with Rule 67,Section 4 of the Rules of Civil Proc
edure,69 the trial court proceeded with the second phase of expropriatio
n, that is, the determination of just compensation.
Just compensation as required by the Constitution is different from the
provisional value required by Republic Act No. 8974. In Capitol Steel Cor
poration v. PHIVIDEC Industrial Authority:70
Upon compliance with the requirements, a petitioner in an expropriation
case . . . is entitled to a writ of possession as a matter of right and it
becomes the ministerial duty of the trial court to forthwith issue the writ
of possession. No hearing is required and the court neither exercises its
discretion or judgment in determining the amount of the provisional va
lue of the properties to be expropriated as the legislature has fixed the
amount under Section 4 of R.A. 8974.
To clarify, the payment of the provisional value as a prerequisite to the
issuance of a writ of possession differs from the payment of just compe
nsation for the expropriated property. While the provisional value is base
d on the current relevant zonal valuation, just compensation is based on
the prevailing fair market value of the property. As the appellate court
explained:
The first refers to the preliminary or provisional determination of the val
ue of the property. It serves a double-purpose of pre-payment if the pr
operty is fully expropriated, and of an indemnity for damages if the pro
ceedings are dismissed. It is not a final determination of just compensati
on and may not necessarily be equivalent to the prevailing fair market v
alue of the property. Of course, it may be a factor to be considered in
the determination of just compensation.
Just compensation, on the other hand, is the final determination of the f
air market value of the property. It has been described as "the just and
complete equivalent of the loss which the owner of the thing expropriat
ed has to suffer by reason of the expropriation." Market values, has [sic]
also been described in a variety of ways as the "price fixed by the buy
er and seller in the open market in the usual and ordinary course of le
gal trade and competition; the price and value of the article established
as shown by sale, public or private, in the ordinary way of business; the
fair value of the property between one who desires to purchase and on
e who desires to sell; the current price; the general or ordinary price for
which property may be sold in that locality.
There is no need for the determination with reasonable certainty of the
final amount of just compensation before the writ of possession may be
issued.71 (Emphasis and underscoring in the original, citation omitted)
The statutory requirement to pay a provisional amount equivalent to the
full Bureau of Internal Revenue zonal valuation does not substitute for t
he judicial determination of just compensation. The payment to the prop
erty owner of a preliminary amount is one way to ensure that property
will not be condemned arbitrarily. It allows front loading the costs of th
e exercise so that it is the government instrumentality that bears the bu
rden and not the owner whose property is taken.
The payment of a provisional value may also serve as indemnity for da
mages in the event that the expropriation does not succeed. In City of
Manila v. Alegar Corporation:72
[T]he advance deposit required under Section 19 of the Local Governme
nt Code73 constitutes an advance payment only in the event the exprop
riation prospers. Such deposit also has a dual purpose: as pre-payment i
f the expropriation succeeds and as indemnity for damages if it is dismi
ssed. This advance payment, a prerequisite for the issuance of a writ of
possession, should not be confused with payment of just compensation f
or the taking of property even if it could be a factor in eventually deter
mining just compensation. If the proceedings fail, the money could be u
sed to indemnify the owner for damages.74 (Emphasis supplied)
The National Power Corporation was only required to pay the provisiona
l value so that it could take possession of respondents’ properties. Ordin
arily, the government, in accordance with Rule 67 or Republic Act No. 8
974, would have already taken possession of the property before the pr
oper amount of just compensation could be determined by the court.
However, the trial court had already determined the amount of just com
pensation even before the National Power Corporation could take posses
sion of the properties. Payment of the provisional value is not anymore
enough. In Export Processing Zone Authority v. Judge Dulay:75
The determination of "just compensation" in eminent domain cases is a j
udicial function. The executive department or the legislature may make t
he initial determinations but when a party claims a violation of the guar
antee in the Bill of Rights that private property may not be taken for p
ublic use without just compensation, no statute, decree, or executive ord
er can mandate that its own determination shall prevail over the court’s
findings. Much less can the courts be precluded from looking into the "j
ust-ness" of the decreed compensation.76 (Emphasis supplied)
Once the amount of just compensation has been determined, it stands t
o reason that this is the amount that must be paid to the landowner as
compensation for his or her property. In the exercise of the power of
eminent domain, taking of private property necessarily includes its posse
ssion. Government, then, must pay the proper amount of just compensat
ion, instead of the provisional value in order to enter and take the priva
te property.
IV
Before the issue of just compensation can even be considered by this c
ourt, any question on the validity of the exercise of the power of emine
nt domain must first pertain to its necessity. In Vda. de Ouano, et al. v.
Republic, et al.:77
In esse, expropriation is forced private property taking, the landowner be
ing really without a ghost of a chance to defeat the case of the exprop
riating agency. In other words, in expropriation, the private owner is dep
rived of property against his will. Withal, the mandatory requirement of
due process ought to be strictly followed, such that the state must show
, at the minimum, a genuine need, an exacting public purpose to take
private property, the purpose to be specifically alleged or least reasonabl
y deducible from the complaint.
Public use, as an eminent domain concept, has now acquired an expansi
ve meaning to include any use thatis of "usefulness, utility, or advantage
, or what is productive of general benefit [of the public]." If the genuine
public necessity—the very reason or condition as it were— allowing, at
the first instance, the expropriation of a private land ceases or disappear
s, then there is no more cogent point for the government’s retention of
the expropriated land. The same legal situation should hold if the gove
rnment devotes the property to another public use very much different f
rom the original or deviates from the declared purpose to benefit anoth
er private person. It has been said that the direct use by the state of it
s power to oblige landowners to renounce their productive possession t
o another citizen, who will use it predominantly for that citizen’s own pr
ivate gain, is offensive to our laws.
A condemnor should commit to use the property pursuant to the purpo
se stated in the petition for expropriation, failing which it should file ano
ther petition for the new purpose. If not, then it behooves the condemn
or to return the said property to its private owner, if the latter so desire
s. The government cannot plausibly keep the property it expropriated in
any manner it pleases and, in the process, dishonor the judgment of ex
propriation. This is not in keeping with the idea of fair play[.]78 (Emphas
is supplied)
It is the state that bears the burden of proving that the taking of privat
e property is for a public purpose. If it fails in discharging this burden, i
t must return the property to the private owner, subject to whatever da
mages were incurred in the course of the taking.
In Heirs of Moreno v. Mactan-Cebu International Airport Authority,79 pri
vate property was expropriated for the proposed expansion of Lahug Air
port in 1949.80 The property owners were assured that they would be g
iven a right to repurchase once Lahug Airport is closed or its operations
are transferred to Mactan Airport.81 In 1991, Lahug Airport ceased oper
ations when Mactan Airport became fully operational. The former owners
filed a Complaint for Reconveyance to compel the repurchase of the ex
propriated properties.82
This court considered the case "difficult" as it called for "a difficult but j
ust solution."83 In allowing the reconveyance, this court stated:
Mactan-Cebu International Airport Authority[v. Court of Appeals] is corre
ct in stating that one would not find an express statement in the Decisi
on in Civil Case No. R-1881 to the effect that "the [condemned] lot woul
d return to [the landowner] or that [the landowner] had a right to repur
chase the same if the purpose for which it was expropriated is ended o
r abandoned or if the property was to be used other than as the Lahu
g Airport." This omission notwithstanding, and while the inclusion of this
pronouncement in the judgment of condemnation would have been idea
l, such precision is not absolutely necessary nor is it fatal to the cause
of petitioners herein. No doubt, the return or repurchase of the condem
ned properties of petitioners could be readily justified as the manifest le
gal effect or consequence of the trial court’s underlying presumption tha
t "Lahug Airport will continue to be in operation" when it granted the c
omplaint for eminent domain and the airport discontinued its activities.

The predicament of petitioners involves a constructive trust, one that is
akin to the implied trust referred to in Art. 1454 of the Civil Code, "If a
n absolute conveyance of property is made in order to secure the perfo
rmance of an obligation of the grantor toward the grantee, a trust by vi
rtue of law is established. If the fulfillment of the obligation is offered b
y the grantor when it becomes due, he may demand the reconveyance
of the property to him." In the case at bar, petitioners conveyed Lots N
os. 916 and 920 to the government with the latter obliging itself to use
the realties for the expansion of Lahug Airport; failing to keep its bargai
n, the government can be compelled by petitioners to reconvey the par
cels of land to them, otherwise, petitioners would be denied the use of
their properties upon a state of affairs that was not conceived nor conte
mplated when the expropriation was authorized.
Although the symmetry between the instant case and the situation conte
mplated by Art. 1454 is not perfect, the provision is undoubtedly applica
ble. For, as explained by an expert on the law of trusts: "The only probl
em of great importance in the field of constructive trusts is to decide w
hether in the numerous and varying fact situations presented to the cou
rts there is a wrongful holding of property and hence a threatened unju
st enrichment of the defendant." Constructive trusts are fictions of equity
which are bound by no unyielding formula when they are used by cou
rts as devices to remedy any situation in which the holder of the legal t
itle may not in good conscience retain the beneficial interest.
. . . .
The rights and obligations between the constructive trustee and the ben
eficiary, in this case, respondent MCIAA and petitioners over Lots Nos. 9
16 and 920, are echoed in Art. 1190 of the Civil Code, "When the condit
ions have for their purpose the extinguishment of an obligation to give,
the parties, upon the fulfillment of said conditions, shall return to each
other what they have received. . . . In case of the loss, deterioration or
improvement of the thing, the provisions which, with respect to the debt
or, are laid down in the preceding article shall be applied to the party
who is bound to return. . . ."
Hence, respondent MCIAA as representative of the State is obliged to re
convey Lots Nos. 916 and 920 to petitioners who shall hold the same s
ubject to existing liens thereon, i.e., leasehold right of DPWH. In return,
petitioners as if they were plaintiff-beneficiaries of a constructive trust m
ust restore to respondent MCIAA what they received as just compensati
on for the expropriation of Lots Nos. 916 and 920 in Civil Case No. R-1
881, i.e., ₱7,065.00 for Lot No. 916 and ₱9,291.00 for Lot No. 920 with c
onsequential damages by way of legal interest from 16 November 1947.
Petitioners must likewise pay respondent MCIAA the necessary expenses
it may have incurred in sustaining the properties and the monetary valu
e of its services in managing them to the extent that petitioners will be
benefited thereby. The government however may keep whatever income
or fruits it may have obtained from the parcels of land, in the same wa
y that petitioners need not account for the interests that the amounts t
hey received as just compensation may have earned in the meantime. A
s a matter of justice and convenience, the law considers the fruits and i
nterests as the equivalent of each other.
Under Art. 1189 of the Civil Code, "If the thing is improved by its nature
, or by time, the improvement shall inure to the benefit of the creditor
. . .," the creditor being the person who stands to receive something as
a result of the process of restitution. Consequently, petitioners as credito
rs do not have to settle as part of the process of restitution the appreci
ation in value of Lots Nos. 916 and 920 which is the natural consequenc
e of nature and time.
Petitioners need not also pay for improvements introduced by third parti
es, i.e., DPWH, as the disposition of these properties is governed by exis
ting contracts and relevant provisions of law. As for the improvements t
hat respondent MCIAA may have made on Lots Nos. 916 and 920, if an
y, petitioners must pay respondent their prevailing free market price in c
ase petitioners opt to buy them and respondent decides to sell. In other
words, if petitioners do not want to appropriate such improvements or
respondent does not choose to sell them, the improvements would have
to be removed without any obligation on the part of petitioners to pay
any compensation to respondent MCIAA for what ever it may have tan
gibly introduced therein.84 (Emphasis supplied)
Heirs of Moreno illustrates the difficulty of determining the respective rig
hts of the parties once it has been determined that the expropriated pr
operties will no longer be devoted for a public purpose. Matters involvin
g the dismissal of an expropriation case or the return of expropriated pr
operty must be determined on a case-to-case basis.
V
The National Power Corporation now requests this court for leave to wit
hdraw this Petition on the ground that it was in the process of acquirin
g a vacant lot owned by FICELCO. Considering that eminent domain is t
he taking of private property for public use, no expropriation proceeding
 can continue if the property to be expropriated will not be for public u
se.
The right of the plaintiff to dismiss an action with the consent of the co
urt is universally recognized with certain well-defined exceptions. If the p
laintiff discovers that the action which he commenced was brought for t
Respondents filed a Motion for Leave to File Comment to Petitioner’s M
he purpose of enforcing a right or a benefit, the advisability or necessity
otion to Withdraw Appeal.85 They argue that the grant of a Motion to
of which he later discovers no longer exists, or that the result of the a
Withdraw would be unjust. From their point of view, the National Power
ction would be different from what he had intended, then he should be
Corporation cannot resort to a withdrawal of an appeal in order to inval
permitted to withdraw his action, subject to the approval of the court. T
idate a judgment duly rendered by the trial court and affirmed by the C
he plaintiff should not be required to continue the action, subject to so
ourt of Appeals. They state that they have no objection to the withdraw
me well-defined exceptions, when it is not to his advantage to do so. Li
al of the appeal, but they object to the dismissal of the Amended Com
tigation should be discouraged and not encouraged. Courts should not r
plaint before the trial court. They propose that the effect of withdrawing
equire parties to litigate when they no longer desire to do so. Courts, i
the Petition for Review is to make the Court of Appeals’ Decision final
n granting permission to dismiss an action, of course, should always tak
and executory.86
e into consideration the effect which said dismissal would have upon the
rights of the defendant.

In National Housing Authority v. Heirs of Guivelondo:87

Subsequently, in Metropolitan Water District v. De Los Angeles, the Cour

In the early case of City of Manila v. Ruymann, the Court was confronte t had occasion to apply the above-quoted ruling when the petitioner, d

d with the question: May the petitioner, in an action for expropriation, a uring the pendency of the expropriation case, resolved that the land sou

fter he has been placed in possession of the property and before the te ght to be condemned was no longer necessary in the maintenance and

rmination of the action, dismiss the petition? It resolved the issue in the operation of its system of waterworks. It was held:

affirmative and held:

It is not denied that the purpose of the plaintiff was to acquire the land
in question for a public use. The fundamental basis then of all actions
brought for the expropriation of lands, under the power of eminent do
main, is public use. That being true, the very moment that it appears at
any stage of the proceedings that the expropriation is not for a public
use, the action must necessarily fail and should be dismissed, for the re
ason that the action cannot be maintained at all except when the expro
priation is for some public use. That must be true even during the pend
ency of the appeal of [sic] at any other stage of the proceedings. If, for
example, during the trial in the lower court, it should be made to app
However, the grant of the Motion to Withdraw carries with it the necess
ary consequence of making the trial court’s order of condemnation final
and executory. In National Housing Authority: Notably, [City of Manila an
d Water District] refer to the dismissal of an action for eminent domain
at the instance of the plaintiff during the pendency of the case. The rul
e is different where the case had been decided and the judgment had
already become final and executory.
. . . .

ear to the satisfaction of the court that the expropriation is not for som
e public use, it would be the duty and the obligation of the trial court
In the case at bar, petitioner did not appeal the Order of the trial court
to dismiss the action. And even during the pendency of the appeal, if it
dated December 10, 1999, which declared that it has a lawful right to e
should be made to appear to the satisfaction of the appellate court th
xpropriate the properties of respondent Heirs of Isidro Guivelondo. Henc
at the expropriation is not for public use, then it would become the dut
e, the Order became final and may no longer be subject to review or r
y and the obligation of the appellate court to dismiss it.88 (Emphasis su
eversal in any court. A final and executory decision or order can no lon
pplied)
ger be disturbed or reopened no matter how erroneous it may be. Alth
ough judicial determinations are not infallible, judicial error should be co

Considering that the National Power Corporation is no longer using resp rrected through appeals, not through repeated suits on the same claim.

ondents’ properties for the purpose of building the Substation Project, it

may be allowed to discontinue with the expropriation proceedings, subje
. . . .
ct to the approval of the court.
Respondent landowners had already been prejudiced by the expropriatio
n case. Petitioner cannot be permitted to institute condemnation procee
dings against respondents only to abandon it later when it finds the am
ount of just compensation unacceptable. Indeed, our reprobation in the
case of Cosculluela v. Court of Appeals is apropos:
It is arbitrary and capricious for a government agency to initiate expropr
iation proceedings, seize a person’s property, allow the judgment of the
court to become final and executory and then refuse to pay on the gro
und that there are no appropriations for the property earlier taken and
profitably used. We condemn in the strongest possible terms the cavalier
attitude of government officials who adopt such a despotic and irrespo
nsible stance.89 (Emphasis supplied)
The rule, therefore, is that expropriation proceedings must be dismissed
when it is determined that it is not for a public purpose, except when:
First, the trial court’s order already became final and executory;
Second, the government already took possession of the property; and
Lastly, the expropriation case already caused prejudice to the landowner.
The expropriation case is not automatically dismissed when the property
ceases to be for public use. The state must first file the appropriate Mot
ion to Withdraw before the trial court having jurisdiction over the proce
edings. The grant or denial of any Motion to Withdraw in an expropriati
on proceeding is always subject to judicial discretion.
Respondents have not yet been deprived of their property since the Nat
ional Power Corporation was never able to take possession. We cannot
determine whether damages have been suffered as a result of the expro
priation.
This case needs to be remanded to the trial court to determine whether
respondents have already been prejudiced by the expropriation. The wit
hdrawal of the Petition before this court will have no practical effect oth
er than to make the trial court's order of condemnation final and execut
ory. In order to prevent this absurdity, the National Power Corporation s
hould file the proper Motion to Withdraw before the trial court. It is no
w the burden of the National Power Corporation to plead and prove to
the trial court its reasons for discontinuing with the expropriation. Respo
ndents may also plead and prove damages incurred from the commenc
ement of the expropriation, if any.
WHEREFORE, the Motion to Withdraw Appeal dated August 28, 2014 is
GRANTED insofar as it withdraws the Petition for Review dated June 4,
2010. The Motion for Leave to File Comment (to Petitioner's Motion to
Withdraw Appeal) dated September 30, 2014 is NOTED. This case is RE
MANDED to the Regional Trial Court of Virac, Catanduanes, Branch 43 f
or appropriate action.
SO ORDERED.
EN BANC
[G.R. No. 171101 : April 24, 2012]
HACIENDA LUISITA, INCORPORATED, PETITIONER, LUISITA INDUSTRIAL P
ARK CORPORATION AND RIZAL COMMERCIAL BANKING CORPORATION,
PETITIONERS-IN-INTERVENTION, VS. PRESIDENTIAL AGRARIAN REFORM
COUNCIL; SECRETARY NASSER PANGANDAMAN OF THE DEPARTMENT
OF AGRARIAN REFORM; ALYANSA NG MGA MANGGAGAWANG BUKID
NG HACIENDA LUISITA, RENE GALANG, NOEL MALLARI, AND JULIO SU
NIGA[1] AND HIS SUPERVISORY GROUP OF THE HACIENDA LUISITA, INC
. AND WINDSOR ANDAYA, RESPONDENTS.
R E S O L U T I O N
VELASCO JR., J.:
Before the Court are the Motion to Clarify and Reconsider Resolution of
November 22, 2011 dated December 16, 2011 filed by petitioner Haciend
a Luisita, Inc. (HLI) and the Motion for Reconsideration/Clarification dated
December 9, 2011 filed by private respondents Noel Mallari, Julio Sunig
a, Supervisory Group of Hacienda Luisita, Inc. and Windsor Andaya (colle
ctively referred to as “Mallari, et al.”).
In Our July 5, 2011 Decision[2] in the above-captioned case, this Court d
enied the petition for review filed by HLI and affirmed the assailed Presi
dential Agrarian Reform Council (PARC) Resolution No. 2005-32-01 dated
December 22, 2005 and PARC Resolution No. 2006-34-01 dated May 3,
 2006 with the modification that the original 6,296 qualified farmworker-
beneficiaries of Hacienda Luisita (FWBs) shall have the option to remain
as stockholders of HLI.
Upon separate motions of the parties for reconsideration, the Court, by
Resolution[3] of November 22, 2011, recalled and set aside the option th
us granted to the original FWBs to remain as stockholders of HLI, while
maintaining that all the benefits and homelots received by all the FWBs
shall be respected with no obligation to refund or return them.
HLI invokes the following grounds in support of its instant Motion to Cl
arify and Reconsider Resolution of November 22, 2011 dated December 1
6, 2011:
A (3) THE NOTICE OF COVERAGE OF JANUARY 02, 2006 MAY, AT THE VE
WITH DUE RESPECT, THE HONORABLE COURT ERRED IN RULING THAT
IN DETERMINING THE JUST COMPENSATION, THE DATE OF “TAKING” IS
NOVEMBER 21, 1989, WHEN PARC APPROVED HLI’s SDP [STOCK DISPT
RIBUTION PLAN] “IN VIEW OF THE FACT THAT THIS IS THE TIME THAT
THE FWBs WERE CONSIDERED TO OWN AND POSSESS THE AGRICULTU
RAL LANDS IN HACIENDA LUISITA” BECAUSE:
(1) THE SDP IS PRECISELY A MODALITY WHICH THE AGRARIAN LAW GI
VES THE LANDOWNER AS ALTERNATIVE TO COMPULSORY COVERAGE I
N WHICH CASE, THEREFORE, THE FWBs CANNOT BE CONSIDERED AS
OWNERS AND POSSESSORS OF THE AGRICULTURAL LANDS AT THE TI
ME THE SDP WAS APPROVED BY PARC;
(2) THE APPROVAL OF THE SDP CANNOT BE AKIN TO A NOTICE OF C
OVERAGE IN COMPULSORY COVERAGE OR ACQUISITION BECAUSE SDP
AND COMPULSORY COVERAGE ARE TWO DIFFERENT MODALITIES WITH
INDEPENDENT AND SEPARATE RULES AND MECHANISMS;
RY LEAST, BE CONSIDERED AS THE TIME WHEN THE FWBs CAN BE CO
NSIDERED TO OWN AND POSSESS THE AGRICULTURAL LANDS OF HAC
IENDA LUISITA BECAUSE THAT IS THE ONLY TIME WHEN HACIENDA LU
ISITA WAS PLACED UNDER COMPULSORY ACQUISITION IN VIEW OF FA
ILURE OF HLI TO PERFORM CERTAIN OBLIGATIONS OF THE SDP, OR S
DOA [STOCK DISTRIBUTION OPTION AGREEMENT];
 (1) IT IS AN EXERCISE OF A RIGHT OF THE FWB WHICH THE HONORAB
LE COURT HAS DECLARED IN ITS DECISION AND EVEN IN ITS RESOLUT
(4) INDEED, THE IMMUTABLE RULE AND THE UNBENDING JURISPRUDEN
ION AND THAT HAS TO BE RESPECTED AND IMPLEMENTED;
CE IS THAT “TAKING” TAKES PLACE WHEN THE OWNER IS ACTUALLY D
EPRIVED OR DISPOSSESSED OF HIS PROPERTY;

(2) NEITHER THE CONSTITUTION NOR THE CARL [COMPREHENSIVE AGR

ARIAN REFORM LAW] REQUIRES THAT THE FWBs SHOULD HAVE CONT
(5) TO INSIST THAT THE “TAKING” IS WHEN THE SDP WAS APPROVED
ROL OVER THE AGRICULTURAL LANDS;
BY PARC ON NOVEMBER 21, 1989 AND THAT THE SAME BE CONSIDER
ED AS THE RECKONING PERIOD TO DETERMINE THE JUST COMPENSATI
ON IS DEPRIVATION OF LANDOWNER’S PROPERTY WITHOUT DUE PRO
(3) THE OPTION HAS NOT BEEN SHOWN TO BE DETRIMENTAL BUT IN
CESS OF LAW;
STEAD BENEFICIAL TO THE FWBs AS FOUND BY THE HONORABLE COU
RT.

(6) HLI SHOULD BE ENTITLED TO PAYMENT OF INTEREST ON THE JUST

COMPENSATION.
C

B
WITH DUE RESPECT, THE HONORABLE COURT ERRED IN RULING THAT
THE PROCEEDS FROM THE SALES OF THE 500-HECTARE CONVERTED L
OT AND THE 80.51-HECTARE SCTEX CANNOT BE RETAINED BY HLI BUT
WITH DUE RESPECT, THE HONORABLE COURT ERRED WHEN IT REVERS
RETURNED TO THE FWBs AS BY SUCH MANNER; HLI IS USING THE CO
ED ITS DECISION GIVING THE FWBs THE OPTION TO REMAIN AS HLI S
RPORATION CODE TO AVOID ITS LIABILITY TO THE FWBs FOR THE PRI
TOCKHOLDERS OR NOT, BECAUSE:
CE IT RECEIVED FROM THE SALES, BECAUSE:
(1) THE PROCEEDS OF THE SALES BELONG TO THE CORPORATION AN
D NOT TO EITHER HLI/TADECO OR THE FWBs, BOTH OF WHICH ARE S
TOCKHOLDERS ENTITLED TO THE EARNINGS OF THE CORPORATION A
ND TO THE NET ASSETS UPON LIQUIDATION;
(2) TO ALLOW THE RETURN OF THE PROCEEDS OF THE SALES TO FWB
s IS TO IMPOSE ALL LIABILITIES OF THE CORPORATION ON HLI/TADEC
O WHICH IS UNFAIR AND VIOLATIVE OF THE CORPORATION CODE.
II
IF THE NOVEMBER 22, 2011 DECISION OF THIS HONORABLE COURT OR
DERING LAND DISTRIBUTION WOULD BE FOLLOWED, THIS WOULD CAU
SE MORE HARM THAN GOOD TO THE LIVES OF THOSE PEOPLE LIVING
IN THE HACIENDA, AND MORE PARTICULARLY TO THE WELFARE OF T
HE FWBs.

III
Mallari, et al. similarly put forth the following issues in its Motion for Re
consideration/Clarification dated December 9, 2011:
ON THE CONCLUSION BY THIS HONORABLE COURT THAT THE OPERAT
IVE FACT DOCTRINE IS APPLICABLE TO THE CASE AT BAR, THEN FWBs
I WHO MERELY RELIED ON THE PARC APPROVAL SHOULD NOT BE PREJ
UDICED BY ITS SUBSEQUENT NULLIFICATION.

REPUBLIC ACT NO. 6657 [RA 6657] OR THE COMPREHENSIVE AGRARIA

N REFORM LAW [CARL] DOES NOT PROVIDE THAT THE FWBs WHO OP
T FOR STOCK DISTRIBUTION OPTION SHOULD RETAIN MAJORITY SHAR
EHOLDING OF THE COMPANY TO WHICH THE AGRICULTURAL LAND W
AS GIVEN.
IV
THOSE WHO CHOOSE LAND SHOULD RETURN WHATEVER THEY GOT F
ROM THE SDOA [STOCK DISTRIBUTION OPTION AGREEMENT] AND TUR
N OVER THE SAME TO HLI FOR USE IN THE OPERATIONS OF THE CO
MPANY, WHICH IN TURN WILL REDOUND TO THE BENEFIT OF THOSE
Payment of just compensation
WHO WILL OPT TO STAY WITH THE SDO.

HLI contends that since the SDP is a modality which the agrarian reform
V
law gives the landowner as alternative to compulsory coverage, then th
e FWBs cannot be considered as owners and possessors of the agricultu
ral lands of Hacienda Luisita at the time the SDP was approved by PAR
FOR THOSE WHO CHOOSE LAND, THE TIME OF TAKING FOR PURPOSE
C.[4] It further claims that the approval of the SDP is not akin to a Noti
S OF JUST COMPENSATION SHOULD BE AT THE TIME HLI WAS DISPOS
ce of Coverage in compulsory coverage situations because stock distribut
SESSED OF CONTROL OVER THE PROPERTY, AND THAT PAYMENT BY [
ion option and compulsory acquisition are two (2) different modalities wi
THE GOVERNMENT] OF THE LAND SHOULD BE TURNED OVER TO HLI
th independent and separate rules and mechanisms. Concomitantly, HLI
FOR THE BENEFIT AND USE OF THE COMPANY’S OPERATIONS THAT W
maintains that the Notice of Coverage issued on January 2, 2006 may, a
ILL, IN TURN, REDOUND TO THE BENEFIT OF FWBs WHO WILL OPT TO
t the very least, be considered as the date of “taking” as this was the o
STAY WITH THE COMPANY.
nly time that the agricultural lands of Hacienda Luisita were placed unde
r compulsory acquisition in view of its failure to perform certain obligati

Basically, the issues raised by HLI and Mallari, et al. boil down to the fol ons under the SDP.[5]

lowing: (1) determination of the date of “taking”; (2) propriety of the rev
ocation of the option on the part of the original FWBs to remain as sto
Mallari, et al. are of a similar view. They contend that Tarlac Developme
ckholders of HLI; (3) propriety of distributing to the qualified FWBs the
nt Corporation (Tadeco), having as it were majority control over HLI, wa
proceeds from the sale of the converted land and of the 80.51-hectare
s never deprived of the use and benefit of the agricultural lands of Haci
Subic-Clark-Tarlac Expressway (SCTEX ) land; and (4) just compensation f
enda Luisita. Upon this premise, Mallari, et al. claim the “date of taking”
or the homelots given to the FWBs.
could not be at the time of the approval of the SDP.[6]
 ed in 1989 by Tadeco to ensure that the FWBs will not control the majo
rity stockholdings in HLI.[10]
A view has also been advanced that the date of the “taking” should be
left to the determination of the Department of Agrarian Reform (DAR) in
conjunction with its authority to preliminarily determine the just compen
At the outset, it should be noted that Section 2, Rule 52 of the Rules o
sation for the land made subject of CARP.
f Court states, “No second motion for reconsideration of a judgment or
final resolution by the same party shall be entertained.” A second motio
n for reconsideration, as a rule, is prohibited for being a mere reiteratio
Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita (AMBALA), in
n of the issues assigned and the arguments raised by the parties.[11]
its Comment/Opposition (to the Motion to Clarify and Reconsider Resolu
tion of November 22, 2011) dated January 30, 2012, on the other hand,
alleges that HLI should not be paid just compensation altogether.[7] It a
In the instant case, the issue on just compensation and the grounds HLI
rgues that when the Court of Appeals (CA) dismissed the case[8] the go
and Mallari, et al. rely upon in support of their respective stance on th
vernment of then President Ferdinand E. Marcos initially instituted and w
e matter had been previously raised by them in their first motion for re
on against Tadeco, the CA allegedly imposed as a condition for its dism
consideration and fully passed upon by the Court in its November 22, 2
issal of the action that should the stock distribution program fail, the lan
011 Resolution. The similarities in the issues then and now presented and
ds should be distributed to the FWBs, with Tadeco receiving by way of
the grounds invoked are at once easily discernible from a perusal of th
compensation only the amount of PhP 3,988,000.[9]
e November 22, 2011 Resolution, the pertinent portions of which read:

AMBALA further contends that if HLI or Tadeco is, at all, entitled to just
In Our July 5, 2011 Decision, We stated that “HLI shall be paid just com
compensation, the “taking” should be reckoned as of November 21, 1989
pensation for the remaining agricultural land that will be transferred to
, the date when the SDP was approved, and the amount of compensati
DAR for land distribution to the FWBs.” We also ruled that the date of t
on should be PhP 40,000 per hectare as this was the same value declar
he “taking” is November 21, 1989, when PARC approved HLI’s SDP per P
ARC Resolution No. 89-12-2.
 me value that Tadeco declared in 1989 to make sure that the farmers w
ill not own the majority of its stocks.
In its Motion for Clarification and Partial Reconsideration, HLI disagrees
with the foregoing ruling and contends that the “taking” should be reck
oned from finality of the Decision of this Court, or at the very least, the
Despite the above propositions, We maintain that the date of “taking” is
reckoning period may be tacked to January 2, 2006, the date when the
November 21, 1989, the date when PARC approved HLI’s SDP per PARC
Notice of Coverage was issued by the DAR pursuant to PARC Resolutio
Resolution No. 89-12-2, in view of the fact that this is the time that the
n No. 2006-34-01 recalling/revoking the approval of the SDP.
FWBs were considered to own and possess the agricultural lands in Haci
enda Luisita. To be precise, these lands became subject of the agrarian
reform coverage through the stock distribution scheme only upon the a
For their part, Mallari, et al. argue that the valuation of the land cannot
pproval of the SDP, that is, November 21, 1989. Thus, such approval is a
be based on November 21, 1989, the date of approval of the SDP. Inste
kin to a notice of coverage ordinarily issued under compulsory acquisitio
ad, they aver that the date of “taking” for valuation purposes is a factua
n. Further, any doubt should be resolved in favor of the FWBs. As this
l issue best left to the determination of the trial courts.
Court held in Perez-Rosario v. CA:

At the other end of the spectrum, AMBALA alleges that HLI should no l
It is an established social and economic fact that the escalation of pover
onger be paid just compensation for the agricultural land that will be di
ty is the driving force behind the political disturbances that have in the
stributed to the FWBs, since the Manila Regional Trial Court (RTC) alread
past compromised the peace and security of the people as well as the
y rendered a decision ordering the Cojuangcos to transfer the control of
continuity of the national order. To subdue these acute disturbances, the
Hacienda Luisita to the Ministry of Agrarian Reform, which will distribut
legislature over the course of the history of the nation passed a series
e the land to small farmers after compensating the landowners P3.988
of laws calculated to accelerate agrarian reform, ultimately to raise the
million. In the event, however, that this Court will rule that HLI is indeed
material standards of living and eliminate discontent. Agrarian reform is
entitled to compensation, AMBALA contends that it should be pegged
a perceived solution to social instability. The edicts of social justice foun
at forty thousand pesos (PhP 40,000) per hectare, since this was the sa
d in the Constitution and the public policies that underwrite them, the e
xtraordinary national experience, and the prevailing national consciousnes
SEC. 3. Second motion for reconsideration. – The Court shall not enterta
s, all command the great departments of government to tilt the balance
in a second motion for reconsideration, and any exception to this rule c
in favor of the poor and underprivileged whenever reasonable doubt ar
an only be granted in the higher interest of justice by the Court en ban
ises in the interpretation of the law. But annexed to the great and sacre
c upon a vote of at least two-thirds of its actual membership. There is r
d charge of protecting the weak is the diametric function to put every e
econsideration “in the higher interest of justice” when the assailed decisi
ffort to arrive at an equitable solution for all parties concerned: the jural
on is not only legally erroneous, but is likewise patently unjust and pote
postulates of social justice cannot shield illegal acts, nor do they sancti
ntially capable of causing unwarranted and irremediable injury or damag
on false sympathy towards a certain class, nor yet should they deny justi
e to the parties. A second motion for reconsideration can only be entert
ce to the landowner whenever truth and justice happen to be on her si
ained before the ruling sought to be reconsidered becomes final by ope
de. In the occupation of the legal questions in all agrarian disputes who
ration of law or by the Court’s declaration.
se outcomes can significantly affect societal harmony, the considerations
of social advantage must be weighed, an inquiry into the prevailing soci
al interests is necessary in the adjustment of conflicting demands and ex In the Division, a vote of three Members shall be required to elevate a
pectations of the people, and the social interdependence of these intere second motion for reconsideration to the Court En Banc.
sts, recognized. (Emphasis and citations omitted.)

Nonetheless, even if we entertain said motion and examine the argumen

Considering that the issue on just compensation has already been passe ts raised by HLI and Mallari, et al. one last time, the result will be the s
d upon and denied by the Court in its November 22, 2011 Resolution, a ame.
subsequent motion touching on the same issue undeniably partakes of
a second motion for reconsideration, hence, a prohibited pleading, and
as such, the motion or plea must be denied. Sec. 3 of Rule 15 of the I
nternal Rules of the Supreme Court is clear:
Sec. 4, Article XIII of the 1987 Constitution expressly provides that the ta
king of land for use in the agrarian reform program of the government
In Land Bank of the Philippines v. Livioco, the Court held that “the ‘time
is conditioned on the payment of just compensation. As stated:
of taking’ is the time when the landowner was deprived of the use an
d benefit of his property, such as when title is transferred to the Republ
ic.”[15] It should be noted, however, that “taking” does not only take pla
Section 4. The State shall, by law, undertake an agrarian reform progra
ce upon the issuance of title either in the name of the Republic or the
m founded on the right of farmers and regular farm workers, who are l
beneficiaries of the Comprehensive Agrarian Reform Program (CARP). “Ta
andless, to own directly or collectively the lands they till or, in the case
king” also occurs when agricultural lands are voluntarily offered by a lan
of other farm workers, to receive a just share of the fruits thereof. To t
downer and approved by PARC for CARP coverage through the stock di
his end, the State shall encourage and undertake the just distribution of
stribution scheme, as in the instant case. Thus, HLI’s submitting its SDP f
all agricultural lands, subject to such priorities and reasonable retention li
or approval is an acknowledgment on its part that the agricultural lands
mits as the Congress may prescribe, taking into account ecological, deve
of Hacienda Luisita are covered by CARP. However, it was the PARC ap
lopmental, or equity considerations, and subject to the payment of just
proval which should be considered as the effective date of “taking” as it
compensation. (Emphasis supplied.)
was only during this time that the government officially confirmed the
CARP coverage of these lands.

Just compensation has been defined as “the full and fair equivalent of t
he property taken from its owner by the expropriator.”[12] The measure
Indeed, stock distribution option and compulsory land acquisition are tw
is not the taker’s gain, but the owner’s loss.[13] In determining just com
o (2) different modalities under the agrarian reform program. Nonetheles
pensation, the price or value of the property at the time it was taken fr
s, both share the same end goal, that is, to have “a more equitable dist
om the owner and appropriated by the government shall be the basis. I
ribution and ownership of land, with due regard to the rights of landow
f the government takes possession of the land before the institution of
ners to just compensation.”[16]
expropriation proceedings, the value should be fixed as of the time of t
he taking of said possession, not of the filing of the complaint.[14]
The fact that Sec. 31 of Republic Act No. 6657 (RA 6657) gives corporat
e landowners the option to give qualified beneficiaries the right to avail
of a stock distribution or, in the phraseology of the law, “the right to p
urchase such proportion of the capital stock of the corporation that the
agricultural land, actually devoted to agricultural activities, bears in relatio
n to the company’s total assets,” does not detract from the avowed poli
cy of the agrarian reform law of equitably distributing ownership of land
. The difference lies in the fact that instead of actually distributing the a
gricultural lands to the farmer-beneficiaries, these lands are held by the
corporation as part of the capital contribution of the farmer-beneficiaries,
not of the landowners, under the stock distribution scheme. The end g
oal of equitably distributing ownership of land is, therefore, undeniable.
And since it is only upon the approval of the SDP that the agricultural l
ands actually came under CARP coverage, such approval operates and t
akes the place of a notice of coverage ordinarily issued under compulso
ry acquisition.
Moreover, precisely because due regard is given to the rights of landow
ners to just compensation, the law on stock distribution option acknowle
dges that landowners can require payment for the shares of stock corre
sponding to the value of the agricultural lands in relation to the outstan
ding capital stock of the corporation.
Although Tadeco did not require compensation for the shares of stock c
orresponding to the value of the agricultural lands in relation to the out
standing capital stock of HLI, its inability to receive compensation cannot
be attributed to the government. The second paragraph of Sec. 31 of
RA 6657 explicitly states that “[u]pon certification by DAR, corporations o
wning agricultural lands may give their qualified beneficiaries the right to
purchase such proportion of the capital stock of the corporation that t
he agricultural land, actually devoted to agricultural activities, bears in rel
ation to the company’s total assets, under such terms and conditions as
may be agreed upon by them. x x x”[17] On the basis of this statutory
provision, Tadeco could have exacted payment for such shares of stock
corresponding to the value of the agricultural lands of Hacienda Luisita i
n relation to the outstanding capital stock of HLI, but it did not do so.
What is notable, however, is that the divestment by Tadeco of the agric
ultural lands of Hacienda Luisita and the giving of the shares of stock f
or free is nothing but an enticement or incentive for the FWBs to agree
with the stock distribution option scheme and not further push for land
distribution. And the stubborn fact is that the “man days” scheme of H
LI impelled the FWBs to work in the hacienda in exchange for such shar
es of stock.
Notwithstanding the foregoing considerations, the suggestion that there i
s “taking” only when the landowner is deprived of the use and benefit
of his property is not incompatible with Our conclusion that “taking” too
k place on November 21, 1989. As mentioned in Our July 5, 2011 Decisi
on, even from the start, the stock distribution scheme appeared to be T
adeco’s preferred option in complying with the CARP when it organized
HLI as its spin-off corporation in order to facilitate stock acquisition by t
he FWBs. For this purpose, Tadeco assigned and conveyed to HLI the a
gricultural lands of Hacienda Luisita, set at 4,915.75 hectares, among oth
ers. These agricultural lands constituted as the capital contribution of the
FWBs in HLI. In effect, Tadeco deprived itself of the ownership over the
se lands when it transferred the same to HLI.
While it is true that Tadeco has majority control over HLI, the Court can
not subscribe to the view Mallari, et al. espouse that, on the basis of su
ch majority stockholding, Tadeco was never deprived of the use and be
nefit of the agricultural lands of Hacienda Luisita it divested itself in favo
r of HLI.
It bears stressing that “[o]wnership is defined as a relation in law by virt
ue of which a thing pertaining to one person is completely subjected to
his will in everything not prohibited by law or the concurrence with the
rights of another.”[18] The attributes of ownership are: jus utendi or the
right to possess and enjoy, jus fruendi or the right to the fruits, jus ab
utendi or the right to abuse or consume, jus disponendi or the right to
dispose or alienate, and jus vindicandi or the right to recover or vindicat
e.[19]
When the agricultural lands of Hacienda Luisita were transferred by Tade
co to HLI in order to comply with CARP through the stock distribution
option scheme, sealed with the imprimatur of PARC under PARC Resolut
ion No. 89-12-2 dated November 21, 1989, Tadeco was consequently dis
possessed of the afore-mentioned attributes of ownership. Notably, Tade
co and HLI are two different entities with separate and distinct legal per
sonalities. Ownership by one cannot be considered as ownership by the
other.
Corollarily, it is the official act by the government, that is, the PARC’s ap
proval of the SDP, which should be considered as the reckoning point f
or the “taking” of the agricultural lands of Hacienda Luisita. Although th
e transfer of ownership over the agricultural lands was made prior to th
e SDP’s approval, it is this Court’s consistent view that these lands offici
ally became subject of the agrarian reform coverage through the stock
distribution scheme only upon the approval of the SDP. And as We hav
e mentioned in Our November 22, 2011 Resolution, such approval is aki
n to a notice of coverage ordinarily issued under compulsory acquisition.
Further, if We adhere to HLI’s view that the Notice of Coverage issued
on January 2, 2006 should, at the very least, be considered as the date
of “taking” as this was the only time that the agricultural portion of the
hacienda was placed under compulsory acquisition in view of HLI’s failur
e to perform certain obligations under the SDP, this Court would, in effe
ct, be penalizing the qualified FWBs twice for acceding to the adoption
of the stock distribution scheme: first, by depriving the qualified FWBs of
the agricultural lands that they should have gotten early on were it not
for the adoption of the stock distribution scheme of which they only b
ecame minority stockholders; and second, by making them pay higher a
mortizations for the agricultural lands that should have been given to th
em decades ago at a much lower cost were it not for the landowner’s i
nitiative of adopting the stock distribution scheme “for free.”
Reiterating what We already mentioned in Our November 22, 2011 Resol
ution, “[e]ven if it is the government which will pay the just compensatio
n to HLI, this will also affect the FWBs as they will be paying higher am
ortizations to the government if the ‘taking’ will be considered to have t
aken place only on January 2, 2006.” As aptly observed by Justice Leon
ardo-De Castro in her Concurring Opinion, “this will put the land beyon
d the capacity of the [FWBs] to pay,” which this Court should not count
enance.
Considering the above findings, it cannot be gainsaid that effective “taki
ng” took place in the case at bar upon the approval of the SDP, that is
, on November 21, 1989.
HLI postulates that just compensation is a question of fact that should b
e left to the determination by the DAR, Land Bank of the Philippines (L
BP) or even the special agrarian court (SAC).[20] As a matter of fact, th
e Court, in its November 22, 2011 Resolution, dispositively ordered the D
AR and the LBP to determine the compensation due to HLI. And as indi
cated in the body of said Resolution:
The foregoing notwithstanding, it bears stressing that the DAR’s land val
uation is only preliminary and is not, by any means, final and conclusive
upon the landowner. The landowner can file an original action with the
RTC acting as a special agrarian court to determine just compensation.
The court has the right to review with finality the determination in the e
xercise of what is admittedly a judicial function.
As regards the issue on when “taking” occurred with respect to the agri
cultural lands in question, We, however, maintain that this Court can rul
e, as it has in fact already ruled on its reckoning date, that is, Novembe
r 21, 1989, the date of issuance of PARC Resolution No. 89-12-2, based
on the above-mentioned disquisitions. The investment on SACs of origin
al and exclusive jurisdiction over all petitions for the determination of jus
t compensation to landowners[21] will not preclude the Court from rulin
g upon a matter that may already be resolved based on the records be
fore Us. By analogy, Our ruling in Heirs of Dr. Jose Deleste v. LBP is ap
plicable:
Indeed, it is the Office of the DAR Secretary which is vested with the pr
imary and exclusive jurisdiction over all matters involving the implementa
tion of the agrarian reform program. However, this will not prevent the
Court from assuming jurisdiction over the petition considering that the is
sues raised in it may already be resolved on the basis of the records be
fore Us. Besides, to allow the matter to remain with the Office of the D
AR Secretary would only cause unnecessary delay and undue hardship o
n the parties. Applicable, by analogy, is Our ruling in the recent Bagong
Pagkakaisa ng Manggagawa ng Triumph International v. Department of
Labor and Employment Secretary, where We held:
But as the CA did, we similarly recognize that undue hardship, to the p
oint of injustice, would result if a remand would be ordered under a sit
uation where we are in the position to resolve the case based on the r
ecords before us. As we said in Roman Catholic Archbishop of Manila v.
Court of Appeals:
[w]e have laid down the rule that the remand of the case to the lower
court for further reception of evidence is not necessary where the Court
is in a position to resolve the dispute based on the records before it. O
n many occasions, the Court, in the public interest and for the expeditio
us administration of justice, has resolved actions on the merits instead o
f remanding them to the trial court for further proceedings, such as wh
ere the ends of justice, would not be subserved by the remand of the c
ase.[22] (Emphasis supplied; citations omitted.)
Even though the compensation due to HLI will still be preliminarily deter
mined by DAR and LBP, subject to review by the RTC acting as a SAC,
the fact that the reckoning point of “taking” is already fixed at a certain
date should already hasten the proceedings and not further cause undu
e hardship on the parties, especially the qualified FWBs.
By a vote of 8-6, the Court affirmed its ruling that the date of “taking”
in determining just compensation is November 21, 1989 when PARC ap
proved HLI’s stock option plan.
As regards the issue of interest on just compensation, We also leave thi
s matter to the DAR and the LBP, subject to review by the RTC acting
as a SAC.
Option will not ensure
control over agricultural lands
In Our November 22, 2011 Resolution, this Court held:
After having discussed and considered the different contentions raised b
y the parties in their respective motions, We are now left to contend wi
th one crucial issue in the case at bar, that is, control over the agricultu
ral lands by the qualified FWBs.
Upon a review of the facts and circumstances, We realize that the FWBs
will never have control over these agricultural lands for as long as they
remain as stockholders of HLI. In Our July 5, 2011 Decision, this Court
made the following observations:
There is, thus, nothing unconstitutional in the formula prescribed by RA
6657. The policy on agrarian reform is that control over the agricultural
land must always be in the hands of the farmers. Then it falls on the
shoulders of DAR and PARC to see to it the farmers should always own
majority of the common shares entitled to elect the members of the b
oard of directors to ensure that the farmers will have a clear majority in
the board. Before the SDP is approved, strict scrutiny of the proposed
SDP must always be undertaken by the DAR and PARC, such that the
value of the agricultural land contributed to the corporation must always
be more than 50% of the total assets of the corporation to ensure tha
t the majority of the members of the board of directors are composed
of the farmers. The PARC composed of the President of the Philippines
and cabinet secretaries must see to it that control over the board of di
rectors rests with the farmers by rejecting the inclusion of non-agricultur
al assets which will yield the majority in the board of directors to non-f
armers. Any deviation, however, by PARC or DAR from the correct appli
cation of the formula prescribed by the second paragraph of Sec. 31 of
RA 6675 does not make said provision constitutionally infirm. Rather, it i
s the application of said provision that can be challenged. Ergo, Sec. 31
of RA 6657 does not trench on the constitutional policy of ensuring con
trol by the farmers.
In line with Our finding that control over agricultural lands must always
be in the hands of the farmers, We reconsider our ruling that the qualifi
ed FWBs should be given an option to remain as stockholders of HLI, in
asmuch as these qualified FWBs will never gain control given the presen
t proportion of shareholdings in HLI.
A revisit of HLI’s Proposal for Stock Distribution under CARP and the St
ock Distribution Option Agreement (SDOA) upon which the proposal was
based reveals that the total assets of HLI is PhP 590,554,220, while the
value of the 4,915.7466 hectares is PhP 196,630,000. Consequently, the
share of the farmer-beneficiaries in the HLI capital stock is 33.296% (196,
630,000 divided by 590,554.220); 118,391,976.85 HLI shares represent 33.2
96%. Thus, even if all the holders of the 118,391,976.85 HLI shares unani
mously vote to remain as HLI stockholders, which is unlikely, control will
never be placed in the hands of the farmer-beneficiaries. Control, of co
urse, means the majority of 50% plus at least one share of the common
shares and other voting shares. Applying the formula to the HLI stock
holdings, the number of shares that will constitute the majority is 295,11
2,101 shares (590,554,220 divided by 2 plus one [1] HLI share). The 118,
391,976.85 shares subject to the SDP approved by PARC substantially fall
short of the 295,112,101 shares needed by the FWBs to acquire control
over HLI. Hence, control can NEVER be attained by the FWBs. There i
s even no assurance that 100% of the 118,391,976.85 shares issued to th
e FWBs will all be voted in favor of staying in HLI, taking into account t
he previous referendum among the farmers where said shares were not
voted unanimously in favor of retaining the SDP. In light of the foregoi
ng consideration, the option to remain in HLI granted to the individual
FWBs will have to be recalled and revoked.
Moreover, bearing in mind that with the revocation of the approval of t
he SDP, HLI will no longer be operating under SDP and will only be tre
ated as an ordinary private corporation; the FWBs who remain as stockh
olders of HLI will be treated as ordinary stockholders and will no longer
be under the protective mantle of RA 6657. (Emphasis in the original.)
HLI, however, takes exception to the above-mentioned ruling and conten
ds that “[t]here is nothing in the Constitution nor in the agrarian laws w
hich require that control over the agricultural lands must always be in th
e hands of the farmers.”[23] Moreover, both HLI and Mallari, et al. claim
that the option given to the qualified FWBs to remain as stockholders
of HLI is neither iniquitous nor prejudicial to the FWBs.[24]
The Court agrees that the option given to the qualified FWBs whether t
o remain as stockholders of HLI or opt for land distribution is neither ini
quitous nor prejudicial to the FWBs. Nonetheless, the Court is not unmin
dful of the policy on agrarian reform that control over the agricultural la
nd must always be in the hands of the farmers. Contrary to the stance
of HLI, both the Constitution and RA 6657 intended the farmers, individ
ually or collectively, to have control over the agricultural lands of HLI; ot
herwise, all these rhetoric about agrarian reform will be rendered for na
ught. Sec. 4, Art. XIII of the 1987 Constitution provides:
Section 4. The State shall, by law, undertake an agrarian reform progra
m founded on the right of farmers and regular farmworkers who are lan
dless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. To this e
nd, the State shall encourage and undertake the just distribution of all a
gricultural lands, subject to such priorities and reasonable retention limits
as the Congress may prescribe, taking into account ecological, develop
mental, or equity considerations, and subject to the payment of just co
mpensation. In determining retention limits, the State shall respect the ri
ght of small landowners. The State shall further provide incentives for vo
luntary land-sharing. (Emphasis supplied.)
Pursuant to and as a mechanism to carry out the above-mentioned con
stitutional directive, RA 6657 was enacted. In consonance with the consti
tutional policy on agrarian reform, Sec. 2 of RA 6657 also states:
SECTION 2. Declaration of Principles and Policies. - It is the policy of th
e State to pursue a Comprehensive Agrarian Reform Program (CARP). Th
e welfare of the landless farmers and farm workers will receive the high
est consideration to promote social justice and to move the nation towa
rds sound rural development and industrialization, and the establishment
of owner cultivatorship of economic-sized farms as the basis of Philippin
e agriculture.
To this end, a more equitable distribution and ownership of land, with d
ue regard to the rights of landowners to just compensation and to the
ecological needs of the nation, shall be undertaken to provide farmers a
nd farm workers with the opportunity to enhance their dignity and impr
ove the quality of their lives through greater productivity of agricultural l
ands.
The agrarian reform program is founded on the right of farmers and re
gular farm workers, who are landless, to own directly or collectively the l
ands they till or, in the case of other farm workers, to receive a share o
f the fruits thereof. To this end, the State shall encourage the just distri
bution of all agricultural lands, subject to the priorities and retention limi
ts set forth in this Act, having taken into account ecological, developme
ntal, and equity considerations, and subject to the payment of just comp
ensation. The State shall respect the right of small landowners and shall
provide incentives for voluntary land-sharing.
The State shall recognize the right of farmers, farm workers and landow
ners, as well as cooperatives and other independent farmers’ organizatio
n, to participate in the planning, organization, and management of the
program, and shall provide support to agriculture through appropriate te
chnology and research, and adequate financial, production, marketing an
d other support services.
The State shall apply the principles of agrarian reform or stewardship, w
henever applicable, in accordance with law, in the disposition or utilizatio
n of other natural resources, including lands of the public domain, unde
r lease or concession, suitable to agriculture, subject to prior rights, hom
estead rights of small settlers and the rights of indigenous communities
to their ancestral lands.
The State may resettle landless farmers and farm workers in its own agri
cultural estates, which shall be distributed to them in the manner provid
ed by law.
By means of appropriate incentives, the State shall encourage the format
ion and maintenance of economic-sized family farms to be constituted b
y individual beneficiaries and small landowners.
The State shall protect the rights of subsistence fishermen, especially of l
ocal communities, to the preferential use of communal marine and fishin
g resources, both inland and offshore. It shall provide support to such fi
shermen through appropriate technology and research, adequate financia
l, production and marketing assistance and other services, The State shal
l also protect, develop and conserve such resources. The protection shall
extend to offshore fishing grounds of subsistence fishermen against for
eign intrusion. Fishworkers shall receive a just share from their labor in t
he utilization of marine and fishing resources.
The State shall be guided by the principles that land has a social functi
on and land ownership has a social responsibility. Owners of agricultural
land have the obligation to cultivate directly or through labor administra
tion the lands they own and thereby make the land productive.
The State shall provide incentives to landowners to invest the proceeds
of the agrarian reform program to promote industrialization, employment
and privatization of public sector enterprises. Financial instruments used
as payment for lands shall contain features that shall enhance negotiabili
ty and acceptability in the marketplace.
The State may lease undeveloped lands of the public domain to qualifie
d entities for the development of capital-intensive farms, traditional and
pioneering crops especially those for exports subject to the prior rights
of the beneficiaries under this Act. (Emphasis supplied.)
Based on the above-quoted provisions, the notion of farmers and regula
r farmworkers having the right to own directly or collectively the lands t
hey till is abundantly clear. We have extensively discussed this ideal in O
ur July 5, 2011 Decision:
The wording of the provision is unequivocal –– the farmers and regular
farmworkers have a right TO OWN DIRECTLY OR COLLECTIVELY THE LA
NDS THEY TILL. The basic law allows two (2) modes of land distributio
n—direct and indirect ownership. Direct transfer to individual farmers is
the most commonly used method by DAR and widely accepted. Indirec
t transfer through collective ownership of the agricultural land is the alte
rnative to direct ownership of agricultural land by individual farmers. Th
e aforequoted Sec. 4 EXPRESSLY authorizes collective ownership by farm
ers. No language can be found in the 1987 Constitution that disqualifies
or prohibits corporations or cooperatives of farmers from being the legal
entity through which collective ownership can be exercised. The word
‘collective’ is defined as ‘indicating a number of persons or things consi
dered as constituting one group or aggregate,’ while ‘collectively’ is defi
ned as ‘in a collective sense or manner; in a mass or body.’ By using t
he word ‘collectively,’ the Constitution allows for indirect ownership of la
nd and not just outright agricultural land transfer. This is in recognition
of the fact that land reform may become successful even if it is done t
hrough the medium of juridical entities composed of farmers.
Collective ownership is permitted in two (2) provisions of RA 6657. Its S
ec. 29 allows workers’ cooperatives or associations to collectively own th
e land, while the second paragraph of Sec. 31 allows corporations or ass
ociations to own agricultural land with the farmers becoming stockholder
s or members. Said provisions read:
SEC. 29. Farms owned or operated by corporations or other business a
ssociations.—In the case of farms owned or operated by corporations or
other business associations, the following rules shall be observed by the
PARC.
In general, lands shall be distributed directly to the individual worker-be
neficiaries.
In case it is not economically feasible and sound to divide the land, the
n it shall be owned collectively by the worker beneficiaries who shall for
m a workers’ cooperative or association which will deal with the corpora
tion or business association. x x x
SEC. 31. Corporate Landowners.— x x x
x x x x
Upon certification by the DAR, corporations owning agricultural lands ma
y give their qualified beneficiaries the right to purchase such proportion
of the capital stock of the corporation that the agricultural land, actually
devoted to agricultural activities, bears in relation to the company’s total
assets, under such terms and conditions as may be agreed upon by the
m. In no case shall the compensation received by the workers at the ti
me the shares of stocks are distributed be reduced. The same principle
shall be applied to associations, with respect to their equity or participa
tion. x x x
Clearly, workers’ cooperatives or associations under Sec. 29 of RA 6657
and corporations or associations under the succeeding Sec. 31, as differe
ntiated from individual farmers, are authorized vehicles for the collective
ownership of agricultural land. Cooperatives can be registered with the
Cooperative Development Authority and acquire legal personality of their
own, while corporations are juridical persons under the Corporation Co
de. Thus, Sec. 31 is constitutional as it simply implements Sec. 4 of Art.
XIII of the Constitution that land can be owned COLLECTIVELY by farm
ers. Even the framers of the l987 Constitution are in unison with respect
to the two (2) modes of ownership of agricultural lands tilled by farmer
s––DIRECT and COLLECTIVE, thus:
MR. NOLLEDO. And when we talk of the phrase ‘to own directly,’ we m
ean the principle of direct ownership by the tiller?
MR. MONSOD. Yes.
MR. NOLLEDO. And when we talk of ‘collectively,’ we mean communal
ownership, stewardship or State ownership?
MS. NIEVA. In this section, we conceive of cooperatives; that is farmers’
cooperatives owning the land, not the State.
MR. NOLLEDO. And when we talk of ‘collectively,’ referring to farmers’
cooperatives, do the farmers own specific areas of land where they only
unite in their efforts?
MS. NIEVA. That is one way.
MR. NOLLEDO. Because I understand that there are two basic systems i
nvolved: the ‘moshave’ type of agriculture and the ‘kibbutz.’ So are bot
h contemplated in the report?
MR. TADEO. Ang dalawa kasing pamamaraan ng pagpapatupad ng tun
ay na reporma sa lupa ay ang pagmamay-ari ng lupa na hahatiin sa in
dividual na pagmamay-ari – directly – at ang tinatawag na sama-samang
gagawin ng mga magbubukid. Tulad sa Negros, ang gusto ng mga m
agbubukid ay gawin nila itong ‘cooperative or collective farm.’ Ang ibig
sabihin ay sama-sama nilang sasakahin.
x x x x
MR. TINGSON. x x x When we speak here of ‘to own directly or collec
tively the lands they till,’ is this land for the tillers rather than land for t
he landless? Before, we used to hear ‘land for the landless,’ but now t
he slogan is ‘land for the tillers.’ Is that right?
MR. TADEO. Ang prinsipyong umiiral dito ay iyong land for the tillers.
Ang ibig sabihin ng ‘directly’ ay tulad sa implementasyon sa rice and co
rn lands kung saan inaari na ng mga magsasaka ang lupang binubungk
al nila. Ang ibig sabihin naman ng ‘collectively’ ay sama-samang pagga
wa sa isang lupain o isang bukid, katulad ng sitwasyon sa Negros.
As Commissioner Tadeo explained, the farmers will work on the agricultu
ral land ‘sama-sama’ or collectively. Thus, the main requisite for collecti
ve ownership of land is collective or group work by farmers of the agric
ultural land. Irrespective of whether the landowner is a cooperative, ass
ociation or corporation composed of farmers, as long as concerted grou
p work by the farmers on the land is present, then it falls within the a
mbit of collective ownership scheme. (Emphasis in the original; underscor
ing supplied.)
As aforequoted, there is collective ownership as long as there is a conce
rted group work by the farmers on the land, regardless of whether the l
andowner is a cooperative, association or corporation composed of farm
ers. However, this definition of collective ownership should be read in lig
ht of the clear policy of the law on agrarian reform, which is to emanci
pate the tiller from the bondage of the soil and empower the common
people. Worth noting too is its noble goal of rectifying “the acute imbal
ance in the distribution of this precious resource among our people.”[25]
Accordingly, HLI’s insistent view that control need not be in the hands
of the farmers translates to allowing it to run roughshod against the ver
y reason for the enactment of agrarian reform laws and leave the farme
rs in their shackles with sheer lip service to look forward to.
Notably, it has been this Court’s consistent stand that control over the a
gricultural land must always be in the hands of the farmers. As We wrot
e in Our July 5, 2011 Decision:
There is, thus, nothing unconstitutional in the formula prescribed by RA
6657. The policy on agrarian reform is that control over the agricultural
land must always be in the hands of the farmers. Then it falls on the
shoulders of DAR and PARC to see to it the farmers should always own
majority of the common shares entitled to elect the members of the b
oard of directors to ensure that the farmers will have a clear majority in
the board. Before the SDP is approved, strict scrutiny of the proposed
SDP must always be undertaken by the DAR and PARC, such that the
value of the agricultural land contributed to the corporation must always
be more than 50% of the total assets of the corporation to ensure tha
t the majority of the members of the board of directors are composed
of the farmers. The PARC composed of the President of the Philippines
and cabinet secretaries must see to it that control over the board of di
rectors rests with the farmers by rejecting the inclusion of non-agricultur
al assets which will yield the majority in the board of directors to non-f
armers. Any deviation, however, by PARC or DAR from the correct appli he return of said proceeds to the FWBs is unfair and violative of the Co
cation of the formula prescribed by the second paragraph of Sec. 31 of rporation Code.
RA 6675 does not make said provision constitutionally infirm. Rather, it i
s the application of said provision that can be challenged. Ergo, Sec. 31
of RA 6657 does not trench on the constitutional policy of ensuring con This claim is bereft of merit.

trol by the farmers. (Emphasis supplied.)

It cannot be denied that the adverted 500-hectare converted land and t

There is an aphorism that “what has been done can no longer be undo he SCTEX lot once formed part of what would have been agrarian-distri

ne.” That may be true, but not in this case. The SDP was approved by butable lands, in fine subject to compulsory CARP coverage. And, as stat

PARC even if the qualified FWBs did not and will not have majority stoc ed in our July 5, 2011 Decision, were it not for the approval of the SDP

kholdings in HLI, contrary to the obvious policy by the government on a by PARC, these large parcels of land would have been distributed and o

grarian reform. Such an adverse situation for the FWBs will not and sho wnership transferred to the FWBs, subject to payment of just compensati

uld not be permitted to stand. For this reason, We maintain Our ruling on, given that, as of 1989, the subject 4,915 hectares of Hacienda Luisita

that the qualified FWBs will no longer have the option to remain as sto were already covered by CARP. Accordingly, the proceeds realized from

ckholders of HLI. the sale and/or disposition thereof should accrue for the benefit of the
FWBs, less deductions of the 3% of the proceeds of said transfers that
were paid to the FWBs, the taxes and expenses relating to the transfer
FWBs Entitled of titles to the transferees, and the expenditures incurred by HLI and Ce
ntennary Holdings, Inc. for legitimate corporate purposes, as prescribed i
to Proceeds of Sale
n our November 22, 2011 Resolution.

HLI reiterates its claim over the proceeds of the sales of the 500 hectar
Homelots
es and 80.51 hectares of the land as corporate owner and argues that t
 SEC. 29. Farms Owned or Operated by Corporations or Other Business
Associations.&mdashIn the case of farms owned or operated by corporat
In the present recourse, HLI also harps on the fact that since the homel
ions or other business associations, the following rules shall be observed
ots given to the FWBs do not form part of the 4,915.75 hectares covere
by the PARC.
d by the SDP, then the value of these homelots should, with the revoca
tion of the SDP, be paid to Tadeco as the landowner.[26]

In general, lands shall be distributed directly to the individual worker-be

neficiaries.
We disagree. As We have explained in Our July 5, 2011 Decision, the dis
tribution of homelots is required under RA 6657 only for corporations or
business associations owning or operating farms which opted for land
In case it is not economically feasible and sound to divide the land, the
distribution. This is provided under Sec. 30 of RA 6657. Particularly:
n it shall be owned collectively by the worker-beneficiaries who shall for
m a workers’ cooperative or association which will deal with the corpora
tion or business association. Until a new agreement is entered into by a
SEC. 30. Homelots and Farmlots for Members of Cooperatives. — The in
nd between the workers’ cooperative or association and the corporation
dividual members of the cooperatives or corporations mentioned in the
or business association, any agreement existing at the time this Act take
preceding section shall be provided with homelots and small farmlots for
s effect between the former and the previous landowner shall be respec
their family use, to be taken from the land owned by the cooperative
ted by both the workers’ cooperative or association and the corporation
or corporation. (Italics supplied.)
or business association.

The “preceding section” referred to in the above-quoted provision is Sec

Since none of the above-quoted provisions made reference to corporatio
. 29 of RA 6657, which states:
ns which opted for stock distribution under Sec. 31 of RA 6657, then it i
s apparent that said corporations are not obliged to provide for homelo
ts. Nonetheless, HLI undertook to “subdivide and allocate for free and w
ithout charge among the qualified family-beneficiaries x x x residential or To recapitulate, the Court voted on the following issues in this manner:
homelots of not more than 240 sq. m. each, with each family beneficia
ry being assured of receiving and owning a homelot in the barrio or ba
rangay where it actually resides.” In fact, HLI was able to distribute hom In determining the date of “taking,” the Court voted 8-6 to maintain the

elots to some if not all of the FWBs. Thus, in our November 22, 2011 R ruling fixing November 21, 1989 as the date of “taking,” the value of th

esolution, We declared that the homelots already received by the FWBs e affected lands to be determined by the LBP and the DAR;

shall be respected with no obligation to refund or to return them.

On the propriety of the revocation of the option of the FWBs to remain

The Court, by a unanimous vote, resolved to maintain its ruling that the as HLI stockholders, the Court, by unanimous vote, agreed to reiterate

FWBs shall retain ownership of the homelots given to them with no ob its ruling in its November 22, 2011 Resolution that the option granted to

ligation to pay for the value of said lots. However, since the SDP was al the FWBs stays revoked;

ready revoked with finality, the Court directs the government through th
e DAR to pay HLI the just compensation for said homelots in consonanc
On the propriety of returning to the FWBs the proceeds of the sale of t
e with Sec. 4, Article XIII of the 1987 Constitution that the taking of lan
he 500-hectare converted land and of the 80.51-hectare SCTEX land, the
d for use in the agrarian reform program is “subject to the payment of
Court unanimously voted to maintain its ruling to order the payment o
just compensation.” Just compensation should be paid to HLI instead of
f the proceeds of the sale of the said land to the FWBs less the 3% sh
Tadeco in view of the Deed of Assignment and Conveyance dated Marc
are, taxes and expenses specified in the fallo of the November 22, 2011
h 22, 1989 executed between Tadeco and HLI, where Tadeco transferred
Resolution;
and conveyed to HLI the titles over the lots in question. DAR is ordered
to compute the just compensation of the homelots in accordance with
existing laws, rules and regulations.
On the payment of just compensation for the homelots to HLI, the Cour
t, by unanimous vote, resolved to amend its July 5, 2011 Decision and N
ovember 22, 2011 Resolution by ordering the government, through the
DAR, to pay to HLI the just compensation for the homelots thus distribu
ted to the FWBS.

WHEREFORE, the Motion to Clarify and Reconsider Resolution of Novem

ber 22, 2011 dated December 16, 2011 filed by petitioner Hacienda Luisit
a, Inc. and the Motion for Reconsideration/Clarification dated December
9, 2011 filed by private respondents Noel Mallari, Julio Suniga, Supervisor
y Group of Hacienda Luisita, Inc. and Windsor Andaya are hereby DENIE
D with this qualification: the July 5, 2011 Decision, as modified by the N
ovember 22, 2011 Resolution, is FURTHER MODIFIED in that the governm Today is Tuesday, October 08, 2019home
ent, through DAR, is ordered to pay Hacienda Luisita, Inc. the just comp
ensation for the 240-square meter homelots distributed to the FWBs.
Republic of the Philippines

SUPREME COURT
The July 5, 2011 Decision, as modified by the November 22, 2011 Resolut
Manila
ion and further modified by this Resolution is declared FINAL and EXEC
UTORY. The entry of judgment of said decision shall be made upon th
e time of the promulgation of this Resolution.
SECOND DIVISION

No further pleadings shall be entertained in this case.

G.R. No. 183290* July 9, 2014
DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY NASS
ER C. PANGANDAMAN, Petitioner,
vs.
SPOUSES DIOSDADO STA. ROMANA and RESURRECCION O. RAMOS, re
presented by AURORA STA. ROMANA, PURIFICACION C. DAEZ, represent
ed by EFREN D. VILLALUZ and ROSAURO D. VILLALUZ, and SPOUSES LE
ANDRO C. SEVILLA and MILAGROS C. DAEZ, Respondents.
R E S O L U T I O N
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated
March 27, 2008 and the Resolution3 dated June 12, 2008 rendered by t
he Court of Appeals (CA) in CA-G.R. SP Nos. 93132 and 93240 which af
firmed the Decision4 dated October 18, 2005 of the Regional Trial Court
of Guimba, Nueva Ecija, Branch 33 (RTC) in AGR. Case No. 1163-G,5 fixi
ng the just compensation for respondents’ 21.2192-hectare (ha.) land at
₱2,576,829.94 or ₱121,438.60/ha., and ordering the Land Bank of the Phil
ippines (LBP) to pay the said amount in the manner provided by law.
The Facts
Respondents, spouses Diosdado Sta. Romana and Resurreccion O. Ramos
, represented by Aurora Sta. Romana, Purificacion C. Daez, represented
by Efren D. Villaluz and Rosauro D. Villaluz, and spouses Leandro C. Sev
illa and Milagros C. Daez, are the owners of a 27.5307-ha. agricultural la
nd situated in San Jose City, Nueva Ecija, covered by Transfer Certificate
of Title No. NT-66211.6 Petitioner, the Department of Agrarian Reform (D
AR), compulsorily acquired a 21.2192-ha. portion (subject land) of respon
dents’ property pursuant to the government’s Operation Land Transfer P
rogram7 under Presidential Decree No. (PD) 27,8 otherwise known as th
e "Tenants Emancipation Decree," as amended. On November 29, 1995, t
he DAR caused the generation of emancipation patents (EPs) in favor of
the farmer-beneficiaries,9 and, in 1996, the LBP fixed the value of the su
bject land at ₱361,181.8710 (LBP valuation) using the formula11 under Exe
cutive Order No. (EO) 22812 and DAR Administrative Order No. (AO) 13,
series of 1994,13 i.e., LV = (2.5 x AGP x ₱35.00) x (1.06)n14 .Under this
formula, the government support price (GSP) for one (1) cavan of palay
was pegged at ₱35.00, which is the GSP price set on the date of PD 27
’s effectivity on October 21, 1972.15
Dissatisfied with the LBP valuation, respondents filed a Petition for Appro
val and Appraisal of Just Compensation before the RTC, docketed as AG
R. Case No. 1163-G, averring that: (a) the LBP valuation was grossly inad
equate considering the subject land’s proximity to subdivision lots and c
ommercial establishments; and (b) the fair market value of the subject la
nd should be fixed in the amount of at least ₱300,000.00/ha. as some b
eneficiaries were even selling their lands to subdivision developers at the
price of ₱1,000,000.00/ha.16
On the other hand, the LBP insisted on the correctness of the valuation,
having been computed in accordance with the formula under EO 228
which governs the determination of just compensation due a landowner
whose property was seized under PD 27. For its part, the DAR maintain
ed that the proper procedure relevant to the determination of the valua
tion was followed, hence, the amount of ₱361,181.87 or ₱4,719.77/ha. was
in keeping with the mandate of PD 27.17
The RTC appointed two18 (2) commissioners for the purpose. On August
27, 2004, the commissioners submitted their report, recommending the
amount of ₱300,000.00/ha. as reasonable compensation for the subject l
and.19
The RTC Ruling
On October 18, 2005, the RTC rendered a Decision20 rejecting the LBP
valuation and fixing the just compensation of the subject land at ₱2,576,
829.94 or ₱121,438.60/ha. It explained that while respondents’ land was a
cquired pursuant to PD 27, the same is covered by Republic Act No. (R
A) 6657,21 otherwise known as the "Comprehensive Agrarian Reform Law
of 1988," as amended, which provides that in determining just compens
ation, the factors under Section 17 of RA 6657, as amended, should be
considered.22 It likewise pointed out that t he Court, in the case of LBP
v. Spouses Banal,23 had declared that the abovementioned factors have
already been translated into a basic formula in DAR AO 6, series of 199
2,24 as amended by DAR AO 11, series of 1994,25 i.e., LV = (CNI + 0.6)
+ (CS x 0.3) + (MV x 0.1).26 Considering the availability of only the CS
27 and MV28 factors, the RTC applied the formula LV = (CS x 0.9) + (
MV x 0.1) in fixing the just compensation for the subject land.29
The DAR and the LBP filed separate motions for reconsideration which
were, however, denied by the RTC. Hence, they filed separate appeals b
efore the CA, respectively docketed as CA-G.R. SP Nos. 93132 and 9324
0, that were, thereafter, consolidated by the CA on August 31, 2006.30
The CA Ruling the DAR which was subsequently consolidated35 with the LBP’s petition
in G.R. Nos. 183298-99.

In a Decision31 dated March 27, 2008, the CA affirmed the RTC Decisio
n, explaining that the expropriation of a landholding covered by PD 27, The Issue Before the Court
such as that of the subject land, is not considered to have taken place
on the effectivity of the said decree, or on October 21, 1972, but at the
time payment of just compensation is made, as judicially determined. Th The essential issue for the Court’s resolution is whether or not the subje

us, it would be inequitable to base the amount of just compensation on ct land was properly valued in accordance with the factors set forth in S

the guidelines provided by PD 27 and EO 228 when the seizure of the ection 17 of RA 6657, as amended. The Proceedings Before the Court

subject land took place after the enactment of RA 665732 on June 15,
1988. The acquisition of the subject land having been initiated only in 19
In a Resolution36 dated October 12, 2009, the parties were directed to f
95, the LBP valuation using the formula under EO 228 was confiscatory ,
ile their respective memoranda. In lieu of a memorandum, however, the
as just compensation should constitute the full and fair equivalent of th
LBP filed a manifestation and motion37 (motion to withdraw and to rem
e property when it is taken. Considering that the agrarian reform proces
and) in G.R. Nos. 183298-99 (a) averring that the matter of computation
s remained incomplete as the payment of the just compensation for the
of just compensation had been rendered moot and academic by the en
subject land has yet to be made, and in view of the passage of RA 665
actment of RA 9700,38 which ordains that when the valuation of previou
7 in the interim, the CA upheld the RTC valuation as having been comp
sly acquired lands is challenged by the landowner, the same shall be co
uted in accordance with Section 17 of RA 6657, as amended.33
mpleted and finally resolved pursuant to Section 17 of RA 6657, as ame
nded;39 and (b) praying that it be allowed to withdraw its petition and

The motions for reconsideration filed by the DAR and the LBP were den that the case be remanded to the RTC for re-computation of the just c

ied in a Resolution34 dated June 12, 2008, hence, the instant petition by ompensation of the subject land40 based on the factors set forth under
Section 17 of RA 6657, as amended, in relation to Section 541 of RA 97
00.
The respondents in the said cases, who are the same respondents in th
e instant case, did not oppose the motion to withdraw and to remand,
which the Court granted in a Resolution42 dated January 18, 2010. Neith
er did they file any motion for reconsideration therefrom.
On the other hand, the DAR filed a memorandum,43 praying for the ad
option of the LBP valuation for the subject land, or in the alternative, fo
r a similar remand of the case to the RTC for further proceedings to de
termine the value of the land in accordance with existing provisions of l
aw and applicable administrative issuances.
The Court’s Ruling
Settled is the rule that when the agrarian reform process is still incompl
ete, as in this case where the just compensation for the subject land ac
quired under PD 27 has yet to be paid, just compensation should be d
etermined and the process concluded under RA 6657,44 with PD 27 and
EO 228 having mere suppletory effects. This means that PD 27 and EO
228 only apply when there are gaps in RA 6657; where RA 6657 is suf
ficient, PD 27 and EO 228 are superseded.45
For purposes of determining just compensation, the fair market value of
an expropriated property is determined by its character and its price at
the time of taking.46 In addition, the factors enumerated under Section
17 of RA 6657,47 i.e., (a) the acquisition cost of the land, (b) the current
value of like properties, (c) the nature and actual use of the property,
and the income therefrom, (d) the owner's sworn valuation, (e) the tax d
eclarations, (f) the assessment made by government assessors, (g) the so
cial and economic benefits contributed by the farmers and the farmwork
ers, and by the government to the property, and (h) the non-payment
of taxes or loans secured from any government financing institution on t
he said land, if any , must be equally considered.1âwphi1
The Court has gone over the records and observed that the only factors
considered by the RTC in determining the just compensation for the su
bject land were (a) the acquisition price of a 5.5825-ha. landholding situ
ated in the same locality paid to the owner on November 17, 1997,48 a
nd (b) the market value of the subject land declared by the respondents
, without a showing that the other factors under Section 17 of RA 6657
, as amended, were even taken into account or, otherwise, found to be
inapplicable , contrary to what the law requires. Consequently, the CA er
red in upholding the RTC’s valuation as having been made in accordanc
e with Section 17 of RA 6657, as amended.
 ongress passed RA 9700 on July 1, 2009, amending certain provisions of
RA 6657, as amended, among them, Section 17, and declaring "(t)hat all
This, considering too that the records of AGR. Case No. 1163-G on LBP’s
previously acquired lands wherein valuation is subject to challenge by la
petition for review, docketed as G.R. Nos. 183298-99, had already been
ndowners shall be completed and finally resolved pursuant to Section 17
remanded to the RTC, the Court finds that there is a need to make a si
of [RA 6657], as amended,"51 the law should not be retroactively applie
milar remand of DAR’ s present petition in this case also stemming from
d to pending claims/cases. In fact, DAR AO 2, series of 2009,52 implem
AGR. Case No. 1163-G to the same RTC for the determination of just c
enting RA 9700, expressly excepted from the application of the amended
ompensation in accordance with Section 17 of RA 6657, as amended. Asi
Section 17 all claim folders received by LBP prior to July 1, 20 09, whic
de from the requirement and need to apply the factors under Section 1
h shall be valued in accordance with Section 17 of RA 6657, as amende
7 of RA 6657, as amended, this course of action is also meant to avoid
d, prior to its further amendment by RA 9700.53
the possibility of any conflict or inconsistency with any eventual ruling in
AGR. Case No. 1163-G. To this end, the RTC is hereby directed to obse
rve the following guidelines in the remand of the case:
With this in mind, the Court, cognizant of the fact that the instant petiti
on for review on certiorari was filed on July 21, 2008,54 or long before
the passage of RA 9700, finds that Section 17 of RA 6657, as amended,
1. Just compensation must be valued at the time of taking, or the time
prior to its further amendment by RA 9700, should control the challenge
when the landowner was deprived of the use and benefit of his propert
d valuation. In the event that the respondents had already withdrawn th
y, such as when title is transferred in the name of the Republic of the
e amount deposited by the LB P, the withdrawn amount should be ded
Philippines.49 Hence, the evidence to be presented by the parties before
ucted from the final land valuation to be paid by LBP.55
the trial court for the valuation of the subject land must be based on t
he values prevalent on such time of taking for like agricultural lands.50

3. The Regional Trial Court may impose interest on the just compensatio
n award as may be warranted by the circumstances of the case.56 In pr
2. The evidence must conform with Section 17 of RA 6657, as amended,
evious cases, the Court has allowed the grant of legal interest in exprop
prior to its amendment by RA 9700. It bears pointing out that while C
riation cases where there is delay in the payment since the just compen
sation due to the landowners was deemed to be an effective forbearanc
e on the part of the State.57 Legal interest shall be pegged at the rate
of 12% interest per annum (p.a.). from the time of taking until June 30,
2013 only. Thereafter, or beginning July 1, 2013, until fully paid, the just
compensation due the landowners shall earn interest at the new legal ra
te of 6% interest p.a. in line with the amendment introduced by BSP-M
B Circular No. 799,58 series of 2013.59
4. The Regional Trial Court is reminded, however, that while it should ta
ke into account the different formula created by the DAR in arriving at i
ts just compensation valuation, it is not strictly bound thereto if the situ
ations before it do not warrant their application. As held in LBP v. Heirs
of Maximo Puyat:60
[T]he determination of just compensation is a judicial function; hence, co
urts cannot be unduly restricted in their determination thereof. To do so
would deprive the courts of their judicial prerogatives and reduce them
to the bureaucratic function of inputting data and arriving at the valuat
ion. While the courts should be mindful of the different formulae create
d by the DAR in arriving at just compensation, they are not strictly bou
nd to adhere thereto if the situations before them do not warrant it. Ap
o Fruits Corporation v. Court of Appeals thoroughly discusses this issue,
to wit:
"x x x [T]he basic formula and its alternatives–administratively determined
(as it is not found in Republic Act No. 6657, but merely set forth in D
AR AO No. 5, Series of 1998)–although referred to and even applied by
the courts in certain instances, does not and cannot strictly bind the co
urts. To insist that the formula must be applied with utmost rigidity whe
reby the valuation is drawn following a strict mathematical computation
goes beyond the intent and spirit of the law. The suggested interpretati
on is strained and would render the law inutile. Statutory construction s
hould not kill but give life to the law. As we have established in earlier
jurisprudence, the valuation of property in eminent domain is essentially
a judicial function which is vested in the regional trial court acting as a
SAC, and not in administrative agencies. The SAC, therefore, must still b
e able to reasonably exercise its judicial discretion in the evaluation of t
he factors for just compensation, which cannot be arbitrarily restricted b
y a formula dictated by the DAR, an administrative agency. Surely, DAR
AO No. 5 did not intend to straightjacket the hands of the court in the
computation of the land valuation. While it provides a formula, it could
not have been its intention to shackle the courts into applying the form
ula in every instance. The court shall apply the formula after an evaluati
on of the three factors, or it may proceed to make its own computation
 based on the extended list in Section 17 of Republic Act No. 6657, whi G.R. No. 205544, June 29, 2016
ch includes other factors[.] x x x."61

MUNICIPALITY OF CORDOVA, PROVINCE OF CEBU; THE SANGGUNIANG

WHEREFORE, the petition is DENIED insofar as it seeks to sustain the val
uation of the 21.2192-hectare portion of respondents' property made by
the Land Bank of the Philippines. The Decision dated March 27, 2008 an
d the Resolution dated June 12, 2008 rendered by the Court of Appeals
in CAG.R. SP Nos. 93132 and 93240 upholding the said valuation which
did not consider the factors enumerated under Section 17 of Republic A
BAYAN OF CORDOVA; AND THE MAYOR OF THE MUNICIPALITY OF CO
RDOVA, Petitioners, v. PATHFINDER DEVELOPMENT CORPORATION AND
TOPANGA DEVELOPMENT CORPORATION, Respondents.
D E C I S I O N

ct No. 6657, as amended, are hereby REVERSED and SET ASIDE. The De
partment of Agrarian Reform's petition stemming from AGR. Case No. 11
PERALTA, J.:
63-G is REMANDED to the Regional Trial Court of Guimba, Nueva Ecija,
Branch 33 for reception of evidence on the issue of just compensation i
n accordance with the guidelines set in this Decision. The trial court is d
This is a Petition for Review on Certiorari which petitioners Municipality
irected to conduct the proceedings in said case with reasonable dispatch
of Cordova, Province of Cebu, the Sangguniang Bayan of Cordova, and
and to submit to the Court a report on its findings and recommended
the Mayor of the Municipality of Cordova filed seeking to reverse the C
conclusions within sixty (60) days from notice of this Decision.
ourt of Appeals (CA) Decision1 dated March 28, 2012 in CA-G.R. SP No.
06193 and to order the trial court to proceed to the second stage of th
e proceedings for the determination of the proper valuation of the expr
SO ORDERED.
opriated properties.

ESTELA M. PERLAS-BERNABE
The procedural and factual antecedents of the case, as borne by the rec
ords, are as follows:
On February 17, 2011, the Mayor of Cordova filed an expropriation comp
laint against the owners of the properties. Later, the Mayor filed a moti
on to place the municipality in possession of the properties sought to b
chanRoblesvirtualLawlibraryRespondent Pathfinder Development Corporatio
e expropriated.
n (Pathfinder) is the owner of real properties in Alegria, Cordova, Cebu:
(1) Lot No. 692 covered by Tax Declaration (TD) No. 190002-02765 with
an area of 1,819 square meters (sq.m.), and (2) part of Lot No. 697 cove
On March 4, 2011, Pathfinder and Topanga filed an action for Declaratio
red by Transfer Certificate of Title (TCT) No. T-95706 and TD No. 19000
n of Nullity of the Expropriation Ordinance before the Regional Trial Co
2-02902 with an area of 50,000 sq.m., while respondent Topanga Develo
urt (RTC) of Mandaue City, Branch 56, claiming that no offer to buy ad
pment Corporation (Topanga) owns Lot No. 691 covered by TCT No. 109
dressed to them was shown or attached to the expropriation complaint,
337 and TD No. 190002-02761 with an area of 29,057 sq.m., and part of
thereby rendering the Ordinance constitutionally infirm for being in violat
Lot No. 697 covered by TD No. 190002-02901 with an area of 15,846 s
ion of their right to due process and equal protection. On July 13, 2011,
q.m.
they likewise filed an Urgent Motion to Suspend Proceedings based on
prejudicial question in the case for the declaration of nullity of the Ordi
nance.
On February 8, 2011, petitioner Sangguniang Bay an of the Municipality
of Cordova enacted Ordinance No. 003-2011 expropriating 836 sq.m. of
Lot No. 692, 9,728 sq.m. of Lot No. 697, 3,898 sq.m. of Lot No. 691, an
On August 12, 2011, the Lapu-Lapu RTC, Branch 27 issued an Order2 de
d 1,467 sq.m. of Lot No. 693 owned by one Eric Ng Mendoza, for the
nying the corporations' motion for suspension of the proceedings and g
construction of a road access from the national highway to the municip
ranting the issuance of a Writ of Possession in favor of the municipality.
al roll-on/roll-off (RORO) port. It likewise authorized petitioner Mayor of
Pathfinder and Topanga moved for reconsideration, but the same was d
Cordova (the Mayor) to initiate and execute the necessary expropriation
enied. Hence, they elevated the case to the CA via a Petition for Certior
proceedings.
ari and Prohibition under Rule 65 of the Rules of Court.

On March 28, 2012, the CA reversed the RTC, thus:ChanRoblesVirtualawli
brary
WHEREFORE, the petition is hereby GRANTED. The Orders issued by the
Regional trial Court, 7th Judicial Region, Branch 53 and Branch 27, Lapu-
Lapu City in Civil Case No. R-LLP-11-05959-CV, dated May 26, 2011, Aug
ust 12, 2011 and August 22, 2011, are REVERSED, [ANNULLED] and SET A
SIDE.
The case is remanded to the Regional Trial Court, Branch 27, Lapu-Lapu
City for the reception of evidence de novo on the determination of the
authority of the respondent municipality to exercise the power of emin
ent domain and the propriety of its exercise in the context of the facts i
nvolved in the suit. No pronouncement as to costs.
SO ORDERED.3chanroblesvirtuallawlibrary
Petitioners Municipality, Sangguniang Bayan, and Mayor of Cordova then
filed a Motion for Reconsideration, but the same proved to be futile.
Hence, this petition.
The main issue before the Court is whether or not the CA committed a
reversible error in giving due course to the petition under Rule 65.
The petition deserves merit.
The municipality argues that the CA seriously erred when it allowed the
companies' Petition for Certiorari despite the available remedy of appeal
under Rule 67 of the Rules of Court.
While there exists a settled rule precluding certiorari as a remedy agains
t the final order when appeal is available, a petition for certiorari may b
e allowed when: (a) the broader interest of justice demands that certiora
ri be given due course to avoid any grossly unjust result that would oth
erwise befall the petitioners; and (b) the order of the RTC evidently cons
titutes grave abuse of discretion amounting to excess of jurisdiction. In t
he past, the Court has considered certiorari as the proper remedy despit
e the availability of appeal, or other remedy in the ordinary course of la
w. In Francisco Motors Corporation v. Court of Appeals,4 the Court has
declared that "the requirement that there must be no appeal, or any pla
in, speedy and adequate remedy in the ordinary course of law admits o
f exceptions, such as: (a) when it is necessary to prevent irreparable da
mages and injury to a party; (b) where the trial judge capriciously and
whimsically exercised his judgment; (c) where there may be danger of a
failure of justice; (d) where an appeal would be slow, inadequate, and in
sufficient; (e) where the issue raised is one purely of law; (f) where publi
c interest is involved; and (g) in case of urgency."5chanrobleslaw
If appeal is not an adequate remedy, or an equally beneficial, or speedy
remedy, the availability of appeal as a remedy cannot constitute sufficie
nt ground to prevent or preclude a party from making use of certiorari.
It is mere inadequacy, not the absence of all other legal remedies, and
the danger of failure of justice without the writ, that must determine the
propriety of certiorari. A remedy is said to be plain, speedy and adequ
ate if it will promptly relieve the petitioner from the injurious effects of t
he judgment, order, or resolution of the lower court or agency. It is un
derstood, then, that a litigant need not resort to the less speedy remed
y of appeal in order to have an order annulled and set aside for being
patently void. And even assuming that certiorari is not the proper reme
dy against an assailed order, the petitioner should still not be denied th
e recourse because it is better to look beyond procedural requirements
and to overcome the ordinary disinclination to exercise supervisory powe
rs in order that a void order of a lower court may be made conformabl
e to law and justice.6chanrobleslaw
Verily, the instances in which certiorari will issue cannot be strictly define
d, because to do so is to destroy the comprehensiveness and usefulness
of the extraordinary writ. The wide breadth and range of the discretion
of the Court are such that authority is not wanting to show that certiora
ri is more discretionary than either prohibition or mandamus, and that in
the exercise of superintending control over inferior courts, a superior co
urt is to be guided by all the circumstances of each particular case as t
he ends of justice may require. Therefore, when, as in this case, there is
an urgent need to prevent a substantial wrong or to do substantial just
ice, the writ will be granted.7chanrobleslaw
The foregoing notwithstanding, the CA erred when it held that the RTC
acted with grave abuse of discretion.
Eminent domain is the right or power of a sovereign state to appropriat
e private property to particular uses to promote public welfare. It is an i
ndispensable attribute of sovereignty; a power grounded in the primary
duty of government to serve the common need and advance the gener
al welfare.8 The power of eminent domain is inseparable in sovereignty
being essential to the existence of the State and inherent in government
. Its exercise is proscribed by only two Constitutional requirements: first,
that there must be just compensation, and second, that no person shall
be deprived of life, liberty or property without due process of law.9chan
robleslaw
The power of eminent domain is essentially legislative in nature but may
be validly delegated to local government units. The basis for its exercis
e by the Municipality of Cordova, being a local government unit, is gran
ted under Section 19 of Republic Act 7160, to wit:ChanRoblesVirtualawlibr
ary
Sec. 19. Eminent Domain. - A local government unit may, through its chi
ef executive and acting pursuant to an ordinance, exercise the power of
eminent domain for public use, or purpose, or welfare for the benefit of
the poor and the landless, upon payment of just compensation, pursua
nt to the provisions of the Constitution and pertinent laws: Provided, ho
wever, That the power of eminent domain may not be exercised unless
a valid and definite offer has been previously made to the owner, and s
uch offer was not accepted: Provided, further, That the local government
unit may immediately take possession of the property upon the filing o
f the expropriation proceedings and upon making a deposit with the pr
oper court of at least fifteen percent (15%) of the fair market value of t
he property based on the current tax declaration of the property to be
expropriated: Provided, finally, That the amount to be paid for the expro
priated property shall be determined by the proper court, based on the
fair market value at the time of the taking of the property.
Judicial review of the exercise of the power of eminent domain is limite
d to the following areas of concern: (a) the adequacy of the compensati
on, (b) the necessity of the taking, and (c) the public use character of t
he purpose of the taking.10chanrobleslaw
Under Rule 67 of the Rules of Court, expropriation proceedings are com
prised of two stages: (1) the determination of the authority of the plainti
ff to exercise the power of eminent domain and the propriety of its exe
rcise in the context of the surrounding facts, and (2) the determination
of the just compensation for the property sought to be taken. The first
stage ends, if not in a dismissal of the action, with an order of condem
nation declaring that the plaintiff has a lawful right to take the property
sought to be condemned, for public use or purpose.11chanrobleslaw
Pathfinder and Topanga contend that the trial court issued an Order of
Condemnation of the properties without previously conducting a proper
hearing for the reception of evidence of the parties. However, no hearin
g is actually required for the issuance of a writ of possession, which de
mands only two requirements: (a) the sufficiency in form and substance
of the complaint, and (b) the required provisional deposit. The sufficienc
y in form and substance of the complaint for expropriation can be deter
mined by the mere examination of the allegations of the complaint.12 H
ere, there is indeed a necessity for the taking of the subject properties
as these would provide access towards the RORO port being constructe
d in the municipality. The construction of the new road will highly benef
it the public as it will enable shippers and passengers to gain access to
the port from the main public road or highway.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED. T
he Decision of the Court of Appeals dated March 28, 2012 in CA-G.R. S
P No. 06193 is hereby REVERSED and SET ASIDE. The Orders of the Re
gional Trial Court of Lapu-Lapu, Branches 53 and 27, in Civil Case No. R
-LLP-11-05959-CV, dated May 26, 2011, August 12, 2011, and August 22,
2011, are hereby REINSTATED. The case is REMANDED to the trial court
for further proceedings.

SO ORDERED.chanRoblesvirtualLawlibrary
The requisites for authorizing immediate entry are the filing of a compla
int for expropriation sufficient in form and substance, and the deposit of
the amount equivalent to fifteen percent (15%) of the fair market value
of the property to be expropriated based on its current tax declaration.
Upon compliance with these requirements, the petitioner in an expropria
tion case is entitled to a writ of possession as a matter of right13 and t
he issuance of the writ becomes ministerial.14 Indubitably, since the com
plaint was found to have been sufficient in form and substance and the
required deposit had been duly complied with, the issuance of the writ
had aptly become ministerial on the part of the RTC. It cannot be said,
therefore, that the RTC committed grave abuse of discretion when it fou
nd the taking of the properties of Topanga and Pathfinder proper.

G.R. No. 166429 December 19, 2005
REPUBLIC OF THE PHILIPPINES, Represented by Executive Secretary Edua
rdo R. Ermita, the DEPARTMENT OF TRANSPORTATION AND COMMUNI
CATIONS (DOTC), and the MANILA INTERNATIONAL AIRPORT AUTHORIT
Y (MIAA), Petitioners,
vs.
HON. HENRICK F. GINGOYON, In his capacity as Presiding Judge of the
Regional Trial Court, Branch 117, Pasay City and PHILIPPINE INTERNATIO
NAL AIR TERMINALS CO., INC., Respondents.
D E C I S I O N
TINGA, J.:
The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) w
as conceived, designed and constructed to serve as the country’s show
window to the world. Regrettably, it has spawned controversies. Regretta
bly too, despite the apparent completion of the terminal complex way b
ack it has not yet been operated. This has caused immeasurable econo
mic damage to the country, not to mention its deplorable discredit in th
e international community.
In the first case that reached this Court, Agan v. PIATCO,1 the contracts
which the Government had with the contractor were voided for being c
ontrary to law and public policy. The second case now before the Court
involves the matter of just compensation due the contractor for the ter
minal complex it built. We decide the case on the basis of fairness, the
same norm that pervades both the Court’s 2004 Resolution in the first c
ase and the latest expropriation law.
The present controversy has its roots with the promulgation of the Cour
t’s decision in Agan v. PIATCO,2 promulgated in 2003 (2003 Decision). T
his decision nullified the "Concession Agreement for the Build-Operate-a
nd-Transfer Arrangement of the Ninoy Aquino International Airport Passe
nger Terminal III" entered into between the Philippine Government (Gove
rnment) and the Philippine International Air Terminals Co., Inc. (PIATCO),
as well as the amendments and supplements thereto. The agreement ha
d authorized PIATCO to build a new international airport terminal (NAIA
3), as well as a franchise to operate and maintain the said terminal duri
ng the concession period of 25 years. The contracts were nullified, amon
g others, that Paircargo Consortium, predecessor of PIATCO, did not pos
sess the requisite financial capacity when it was awarded the NAIA 3 co
ntract and that the agreement was contrary to public policy.3
At the time of the promulgation of the 2003 Decision, the NAIA 3 facilit
ies had already been built by PIATCO and were nearing completion.4 H
owever, the ponencia was silent as to the legal status of the NAIA 3 fac
ilities following the nullification of the contracts, as well as whatever righ
ts of PIATCO for reimbursement for its expenses in the construction of t
he facilities. Still, in his Separate Opinion, Justice Panganiban, joined by J
ustice Callejo, declared as follows:
Should government pay at all for reasonable expenses incurred in the c
onstruction of the Terminal? Indeed it should, otherwise it will be unjustl
y enriching itself at the expense of Piatco and, in particular, its funders,
contractors and investors — both local and foreign. After all, there is no
question that the State needs and will make use of Terminal III, it bein
g part and parcel of the critical infrastructure and transportation-related
programs of government.5
PIATCO and several respondents-intervenors filed their respective motion
s for the reconsideration of the 2003 Decision. These motions were deni
ed by the Court in its Resolution dated 21 January 2004 (2004 Resolutio
n).6 However, the Court this time squarely addressed the issue of the ri
ghts of PIATCO to refund, compensation or reimbursement for its expen
ses in the construction of the NAIA 3 facilities. The holding of the Court
on this crucial point follows:
This Court, however, is not unmindful of the reality that the structures c
omprising the NAIA IPT III facility are almost complete and that funds h
ave been spent by PIATCO in their construction. For the government to
take over the said facility, it has to compensate respondent PIATCO as
builder of the said structures. The compensation must be just and in acc
ordance with law and equity for the government can not unjustly enrich
itself at the expense of PIATCO and its investors.7
The Government also declared that it had deposited the amount of ₱3,0
02,125,000.0012 (3 Billion)13 in Cash with the Land Bank of the Philippine
s, representing the NAIA 3 terminal’s assessed value for taxation purpose
s.14

After the promulgation of the rulings in Agan, the NAIA 3 facilities have
The case15 was raffled to Branch 117 of the Pasay City RTC, presided by
remained in the possession of PIATCO, despite the avowed intent of th
respondent judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). On the s
e Government to put the airport terminal into immediate operation. The
ame day that the Complaint was filed, the RTC issued an Order16 directi
Government and PIATCO conducted several rounds of negotiation regard
ng the issuance of a writ of possession to the Government, authorizing i
ing the NAIA 3 facilities.8 It also appears that arbitral proceedings were
t to "take or enter upon the possession" of the NAIA 3 facilities. Citing
commenced before the International Chamber of Commerce International
the case of City of Manila v. Serrano,17 the RTC noted that it had the
Court of Arbitration and the International Centre for the Settlement of I
ministerial duty to issue the writ of possession upon the filing of a com
nvestment Disputes,9 although the Government has raised jurisdictional q
plaint for expropriation sufficient in form and substance, and upon depo
uestions before those two bodies.10
sit made by the government of the amount equivalent to the assessed v
alue of the property subject to expropriation. The RTC found these requi

Then, on 21 December 2004, the Government11 filed a Complaint for ex sites present, particularly noting that "[t]he case record shows that [the

propriation with the Pasay City Regional Trial Court (RTC), together with Government has] deposited the assessed value of the [NAIA 3 facilities] i

an Application for Special Raffle seeking the immediate holding of a spe n the Land Bank of the Philippines, an authorized depositary, as shown

cial raffle. The Government sought upon the filing of the complaint the i by the certification attached to their complaint." Also on the same day, t

ssuance of a writ of possession authorizing it to take immediate possessi he RTC issued a Writ of Possession. According to PIATCO, the Governm

on and control over the NAIA 3 facilities. ent was able to take possession over the NAIA 3 facilities immediately a
fter the Writ of Possession was issued.18
 her, and the value of the improvements and/or structures using the repl
acement cost method.
However, on 4 January 2005, the RTC issued another Order designed to
supplement its 21 December 2004 Order and the Writ of Possession. In
the 4 January 2005 Order, now assailed in the present petition, the RT
Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and
C noted that its earlier issuance of its writ of possession was pursuant t
Section 10 of the Implementing Rules, the RTC made key qualifications
o Section 2, Rule 67 of the 1997 Rules of Civil Procedure. However, it w
to its earlier issuances. First, it directed the Land Bank of the Philippines,
as observed that Republic Act No. 8974 (Rep. Act No. 8974), otherwise
Baclaran Branch (LBP-Baclaran), to immediately release the amount of U
known as "An Act to Facilitate the Acquisition of Right-of-Way, Site or L
S$62,343,175.77 to PIATCO, an amount which the RTC characterized as t
ocation for National Government Infrastructure Projects and For Other P
hat which the Government "specifically made available for the purpose o
urposes" and its Implementing Rules and Regulations (Implementing Rule
f this expropriation;" and such amount to be deducted from the amount
s) had amended Rule 67 in many respects.
of just compensation due PIATCO as eventually determined by the RTC.
Second, the Government was directed to submit to the RTC a Certificat
e of Availability of Funds signed by authorized officials to cover the pay
There are at least two crucial differences between the respective proced
ment of just compensation. Third, the Government was directed "to mai
ures under Rep. Act No. 8974 and Rule 67. Under the statute, the Gove
ntain, preserve and safeguard" the NAIA 3 facilities or "perform such as
rnment is required to make immediate payment to the property owner
acts or activities in preparation for their direct operation" of the airport t
upon the filing of the complaint to be entitled to a writ of possession,
erminal, pending expropriation proceedings and full payment of just com
whereas in Rule 67, the Government is required only to make an initial
pensation. However, the Government was prohibited "from performing ac
deposit with an authorized government depositary. Moreover, Rule 67 pr
ts of ownership like awarding concessions or leasing any part of [NAIA
escribes that the initial deposit be equivalent to the assessed value of th
3] to other parties."19
e property for purposes of taxation, unlike Rep. Act No. 8974 which pro
vides, as the relevant standard for initial compensation, the market value
of the property as stated in the tax declaration or the current relevant
zonal valuation of the Bureau of Internal Revenue (BIR), whichever is hig
The very next day after the issuance of the assailed 4 January 2005 Ord
er, the Government filed an Urgent Motion for Reconsideration, which w
as set for hearing on 10 January 2005. On 7 January 2005, the RTC issu
ed another Order, the second now assailed before this Court, which app
ointed three (3) Commissioners to ascertain the amount of just compens
mporary restraining order and preliminary injunction was granted by this
Court in a Resolution dated 14 January 2005.21
The Government, in imputing grave abuse of discretion to the acts of H

ation for the NAIA 3 Complex. That same day, the Government filed a on. Gingoyon, raises five general arguments, to wit:

Motion for Inhibition of Hon. Gingoyon.

(i) that Rule 67, not Rep. Act No. 8974, governs the present expropriatio

The RTC heard the Urgent Motion for Reconsideration and Motion for I n proceedings;

nhibition on 10 January 2005. On the same day, it denied these motions

in an Omnibus Order dated 10 January 2005. This is the third Order n
(ii) that Hon. Gingoyon erred when he ordered the immediate release of
ow assailed before this Court. Nonetheless, while the Omnibus Order affi
the amount of US$62.3 Million to PIATCO considering that the assessed
rmed the earlier dispositions in the 4 January 2005 Order, it excepted fr
value as alleged in the complaint was only ₱3 Billion;
om affirmance "the superfluous part of the Order prohibiting the plaintiff
s from awarding concessions or leasing any part of [NAIA 3] to other p
arties."20
(iii) that the RTC could not have prohibited the Government from enjoini
ng the performance of acts of ownership;

Thus, the present Petition for Certiorari and Prohibition under Rule 65 w
as filed on 13 January 2005. The petition prayed for the nullification of t
(iv) that the appointment of the three commissioners was erroneous; an
he RTC orders dated 4 January 2005, 7 January 2005, and 10 January 2
d
005, and for the inhibition of Hon. Gingoyon from taking further action
on the expropriation case. A concurrent prayer for the issuance of a te
(v) that Hon. Gingoyon should be compelled to inhibit himself from the The 2004 Resolution Which Is
expropriation case.22

Law of This Case Generally

Before we delve into the merits of the issues raised by the Government,
it is essential to consider the crucial holding of the Court in its 2004 R
esolution in Agan, which we repeat below: Permits Expropriation

This Court, however, is not unmindful of the reality that the structures c The pronouncement in the 2004 Resolution is especially significant to thi

omprising the NAIA IPT III facility are almost complete and that funds h s case in two aspects, namely: (i) that PIATCO must receive payment of

ave been spent by PIATCO in their construction. For the government to just compensation determined in accordance with law and equity; and (ii

take over the said facility, it has to compensate respondent PIATCO as ) that the government is barred from taking over NAIA 3 until such just

builder of the said structures. The compensation must be just and in acc compensation is paid. The parties cannot be allowed to evade the direct

ordance with law and equity for the government can not unjustly enrich ives laid down by this Court through any mode of judicial action, such

itself at the expense of PIATCO and its investors.23 as the complaint for eminent domain.

This pronouncement contains the fundamental premises which permeate It cannot be denied though that the Court in the 2004 Resolution presc

this decision of the Court. Indeed, Agan, final and executory as it is, sta ribed mandatory guidelines which the Government must observe before i

nds as governing law in this case, and any disposition of the present pe t could acquire the NAIA 3 facilities. Thus, the actions of respondent jud

tition must conform to the conditions laid down by the Court in its 200 ge under review, as well as the arguments of the parties must, to merit

4 Resolution. affirmation, pass the threshold test of whether such propositions are in a
ccord with the 2004 Resolution.
 However, the reason for the resort by the Government to expropriation
proceedings is understandable in this case. The 2004 Resolution, in requi
The Government does not contest the efficacy of this pronouncement in
ring the payment of just compensation prior to the takeover by the Gov
the 2004 Resolution,24 thus its application
ernment of

to the case at bar is not a matter of controversy. Of course, questions s

NAIA 3, effectively precluded it from acquiring possession or ownership
uch as what is the standard of "just compensation" and which particular
of the NAIA 3 through the unilateral exercise of its rights as the owner
laws and equitable principles are applicable, remain in dispute and shall
of the ground on which the facilities stood. Thus, as things stood after t
be resolved forthwith.
he 2004 Resolution, the right of the Government to take over the NAIA
3 terminal was preconditioned by lawful order on the payment of just c

The Government has chosen to resort to expropriation, a remedy availab ompensation to PIATCO as builder of the structures.

le under the law, which has the added benefit of an integrated process
for the determination of just compensation and the payment thereof to
The determination of just compensation could very well be agreed upon
PIATCO. We appreciate that the case at bar is a highly unusual case, w
by the parties without judicial intervention, and it appears that steps to
hereby the Government seeks to expropriate a building complex constru
wards that direction had been engaged in. Still, ultimately, the Governm
cted on land which the State already owns.25 There is an inherent illogi
ent resorted to its inherent power of eminent domain through expropria
c in the resort to eminent domain on property already owned by the St
tion proceedings. Is eminent domain appropriate in the first place, with
ate. At first blush, since the State already owns the property on which
due regard not only to the law on expropriation but also to the Court’s
NAIA 3 stands, the proper remedy should be akin to an action for eject
2004 Resolution in Agan?
ment.

The right of eminent domain extends to personal and real property, and
the NAIA 3 structures, adhered as they are to the soil, are considered
as real property.26 The public purpose for the expropriation is also beyo
nd dispute. It should also be noted that Section 1 of Rule 67 (on Expro
priation) recognizes the possibility that the property sought to be expro
priated may be titled in the name of the
Republic of the Philippines, although occupied by private individuals, and
in such case an averment to that effect should be made in the compla
int. The instant expropriation complaint did aver that the NAIA 3 comple
x "stands on a parcel of land owned by the Bases Conversion Developm
ent Authority, another agency of [the Republic of the Philippines]."27
Admittedly, eminent domain is not the sole judicial recourse by which th
e Government may have acquired the NAIA 3 facilities while satisfying th
e requisites in the 2004 Resolution. Eminent domain though may be the
most effective, as well as the speediest means by which such goals ma
y be accomplished. Not only does it enable immediate possession after
satisfaction of the requisites under the law, it also has a built-in procedu
re through which just compensation may be ascertained. Thus, there sho
uld be no question as to the propriety of eminent domain proceedings
in this case.
Still, in applying the laws and rules on expropriation in the case at bar,
we are impelled to apply or construe these rules in accordance with the
Court’s prescriptions in the 2004 Resolution to achieve the end effect t
hat the Government may validly take over the NAIA 3 facilities. Insofar a
s this case is concerned, the 2004 Resolution is effective not only as a l
egal precedent, but as the source of rights and prescriptions that must
be guaranteed, if not enforced, in the resolution of this petition. Otherwi
se, the integrity and efficacy of the rulings of this Court will be severely
diminished.
It is from these premises that we resolve the first question, whether Rule
67 of the Rules of Court or Rep. Act No. 8974 governs the expropriati
on proceedings in this case.
Application of Rule 67 Violates
the 2004 Agan Resolution
The Government insists that Rule 67 of the Rules of Court governs the
expropriation proceedings in this case to the exclusion of all other laws.
On the other hand, PIATCO claims that it is Rep. Act No. 8974 which d
oes apply. Earlier, we had adverted to the basic differences between the
statute and the procedural rule. Further elaboration is in order.
Rule 67 outlines the procedure under which eminent domain may be ex
ercised by the Government. Yet by no means does it serve at present a
s the solitary guideline through which the State may expropriate private
property. For example, Section 19 of the Local Government Code govern
s as to the exercise by local government units of the power of eminent
domain through an enabling ordinance. And then there is Rep. Act No.
8974, which covers expropriation proceedings intended for national gove
rnment infrastructure projects.
Rep. Act No. 8974, which provides for a procedure eminently more favo
rable to the property owner than Rule 67, inescapably applies in instanc
es when the national government expropriates property "for national gov
ernment infrastructure projects."28 Thus, if expropriation is engaged in b
y the national government for purposes other than national infrastructur
e projects, the assessed value standard and the deposit mode prescribed
in Rule 67 continues to apply.
Under both Rule 67 and Rep. Act No. 8974, the Government commence
s expropriation proceedings through the filing of a complaint. Unlike in t
he case of local governments which necessitate an authorizing ordinance
before expropriation may be accomplished, there is no need under Rul
e 67 or Rep. Act No. 8974 for legislative authorization before the Gover
nment may proceed with a particular exercise of eminent domain. The
most crucial difference between Rule 67 and Rep. Act No. 8974 concern
s the particular essential step the Government has to undertake to be e
ntitled to a writ of possession.
The first paragraph of Section 2 of Rule 67 provides:
SEC. 2. Entry of plaintiff upon depositing value with authorized governm
ent depository. — Upon the filing of the complaint or at any time there
after and after due notice to the defendant, the plaintiff shall have the r
ight to take or enter upon the possession of the real property involved
if he deposits with the authorized government depositary an amount eq
uivalent to the assessed value of the property for purposes of taxation t
o be held by such bank subject to the orders of the court. Such deposi
t shall be in money, unless in lieu thereof the court authorizes the depo
sit of a certificate of deposit of a government bank of the Republic of t
he Philippines payable on demand to the authorized government deposi
tary.
In contrast, Section 4 of Rep. Act No. 8974 relevantly states:
SEC. 4. Guidelines for Expropriation Proceedings.— Whenever it is necess
ary to acquire real property for the right-of-way, site or location for any
national government infrastructure project through expropriation, the ap
propriate proceedings before the proper court under the following guide
lines:
a) Upon the filing of the complaint, and after due notice to the defenda
nt, the implementing agency shall immediately pay the owner of the pro
perty the amount equivalent to the sum of (1) one hundred percent (10
0%) of the value of the property based on the current relevant zonal va
luation of the Bureau of Internal Revenue (BIR); and (2) the value of the
improvements and/or structures as determined under Section 7 hereof;
. . .
c) In case the completion of a government infrastructure project is of ut
most urgency and importance, and there is no existing valuation of the
area concerned, the implementing agency shall immediately pay the own
er of the property its proffered value taking into consideration the stand
ards prescribed in Section 5 hereof.
Upon completion with the guidelines abovementioned, the court shall im
mediately issue to the implementing agency an order to take possession
of the property and start the implementation of the project.
Before the court can issue a Writ of Possession, the implementing agenc
y shall present to the court a certificate of availability of funds from the
proper official concerned.
. . .
As can be gleaned from the above-quoted texts, Rule 67 merely require
s the Government to deposit with an authorized government depositary
the assessed value of the property for expropriation for it to be entitled
to a writ of possession. On the other hand, Rep. Act No. 8974 requires
that the Government make a direct payment to the property owner bef
ore the writ may issue. Moreover, such payment is based on the zonal
valuation of the BIR in the case of land, the value of the improvements
or structures under the replacement cost method,29 or if no such valuat
ion is available and in cases of utmost urgency, the proffered value of t
he property to be seized.
It is quite apparent why the Government would prefer to apply Rule 67
in lieu of Rep. Act No. 8974. Under Rule 67, it would not be obliged to
immediately pay any amount to PIATCO before it can obtain the writ o
f possession since all it need do is deposit the amount equivalent to th
e assessed value with an authorized government depositary. Hence, it de
votes considerable effort to point out that Rep. Act No. 8974 does not
apply in this case, notwithstanding the undeniable reality that NAIA 3 is
a national government project. Yet, these efforts fail, especially considerin
g the controlling effect of the 2004 Resolution in Agan on the adjudicati
on of this case.
It is the finding of this Court that the staging of expropriation proceedin
gs in this case with the exclusive use of Rule 67 would allow for the Go
vernment to take over the NAIA 3 facilities in a fashion that directly reb
ukes our 2004 Resolution in Agan. This Court cannot sanction deviation
from its own final and executory orders.
Section 2 of Rule 67 provides that the State "shall have the right to tak
e or enter upon the possession of the real property involved if [the plai
ntiff] deposits with the authorized government depositary an amount eq
uivalent to the assessed value of the property for purposes of taxation t
o be held by such bank subject to the orders of the court."30 It is thus
apparent that under the provision, all the Government need do to obta
in a writ of possession is to deposit the amount equivalent to the asses
sed value with an authorized government depositary.
Would the deposit under Section 2 of Rule 67 satisfy the requirement la
id down in the 2004 Resolution that "[f]or the government to take over
the said facility, it has to compensate respondent PIATCO as builder of t
he said structures"? Evidently not.
If Section 2 of Rule 67 were to apply, PIATCO would be enjoined from
receiving a single centavo as just compensation before the Government
takes over the NAIA 3 facility by virtue of a writ of possession. Such an
injunction squarely contradicts the letter and intent of the 2004 Resoluti
on. Hence, the position of the Government sanctions its own disregard
or violation the prescription laid down by this Court that there must first
be just compensation paid to PIATCO before the Government may take
over the NAIA 3 facilities.
Thus, at the very least, Rule 67 cannot apply in this case without violati
ng the 2004 Resolution. Even assuming that Rep. Act No. 8974 does no
x x x
t govern in this case, it does not necessarily follow that Rule 67 should
then apply. After all, adherence to the letter of Section 2, Rule 67 woul
d in turn violate the Court’s requirement in the 2004 Resolution that the THE CHAIRMAN (REP. VERGARA). Accepted.
re must first be payment of just compensation to PIATCO before the Go
vernment may take over the property.
x x x

It is the plain intent of Rep. Act No. 8974 to supersede the system of d
eposit under Rule 67 with the scheme of "immediate payment" in cases THE CHAIRMAN (SEN. CAYETANO). Oo. Because this is really in favor of
involving national government infrastructure projects. The following portio the landowners, e.
n of the Senate deliberations, cited by PIATCO in its Memorandum, is w
orth quoting to cogitate on the purpose behind the plain meaning of th
e law: THE CHAIRMAN (REP. VERGARA). That’s why we need to really secure t
he availability of funds.

THE CHAIRMAN (SEN. CAYETANO). "x x x Because the Senate believes t

x x x
hat, you know, we have to pay the landowners immediately not by treas
ury bills but by cash.

THE CHAIRMAN (SEN. CAYETANO). No, no. It’s the same. It says here: i
yong first paragraph, diba? Iyong zonal – talagang magbabayad muna. I
Since we are depriving them, you know, upon payment, ‘no, of possessi
on, we might as well pay them as much, ‘no, hindi lang 50 percent. n other words, you know, there must be a payment kaagad. (TSN, Bica
meral Conference on the Disagreeing Provisions of House Bill 1422 and laint shall be resolved under the provisions on expropriation of Rule 67
Senate Bill 2117, August 29, 2000, pp. 14-20) of the Rules of Court."32

x x x Given that the 2004 Resolution militates against the continued use of th
e norm under Section 2, Rule 67, is it then possible to apply Rep. Act
No. 8974? We find that it is, and moreover, its application in this case c
THE CHAIRMAN (SEN. CAYETANO). Okay, okay, ‘no. Unang-una, it is not omplements rather than contravenes the prescriptions laid down in the 2
deposit, ‘no. It’s payment." 004 Resolution.

REP. BATERINA. It’s payment, ho, payment." (Id., p. 63)31 Rep. Act No. 8974 Fits

It likewise bears noting that the appropriate standard of just compensati to the Situation at Bar
on is a substantive matter. It is well within the province of the legislatur
e to fix the standard, which it did through the enactment of Rep. Act N
o. 8974. Specifically, this prescribes the new standards in determining th and Complements the
e amount of just compensation in expropriation cases relating to nationa
l government infrastructure projects, as well as the manner of payment t
hereof. At the same time, Section 14 of the Implementing Rules recogniz 2004 Agan Resolution

es the continued applicability of Rule 67 on procedural aspects when it

provides "all matters regarding defenses and objections to the complaint,
Rep. Act No. 8974 is entitled "An Act To Facilitate The Acquisition Of Ri
issues on uncertain ownership and conflicting claims, effects of appeal
ght-Of-Way, Site Or Location For National Government Infrastructure Proj
on the rights of the parties, and such other incidents affecting the comp
ects And For Other Purposes." Obviously, the law is intended to cover e
xpropriation proceedings intended for national government infrastructure
projects. Section 2 of Rep. Act No. 8974 explains what are considered a
s "national government projects."
Sec. 2. National Government Projects. – The term "national government
projects" shall refer to all national government infrastructure, engineering
works and service contracts, including projects undertaken by governmen
t-owned and controlled corporations, all projects covered by Republic Ac
t No. 6957, as amended by Republic Act No. 7718, otherwise known as
the Build-Operate-and-Transfer Law, and other related and necessary acti
vities, such as site acquisition, supply and/or installation of equipment an
d materials, implementation, construction, completion, operation, mainten
ance, improvement, repair and rehabilitation, regardless of the source of
funding.
As acknowledged in the 2003 Decision, the development of NAIA 3 was
made pursuant to a build-operate-and-transfer arrangement pursuant to
Republic Act No. 6957, as amended,33 which pertains to infrastructure o
r development projects normally financed by the public sector but which
are now wholly or partly implemented by the private sector.34 Under t
he build-operate-and-transfer scheme, it is the project proponent which
undertakes the construction, including the financing, of a given infrastruc
ture facility.35 In Tatad v. Garcia,36 the Court acknowledged that the op
erator of the EDSA Light Rail Transit project under a BOT scheme was t
he owner of the facilities such as "the rail tracks, rolling stocks like the c
oaches, rail stations, terminals and the power plant."37
There can be no doubt that PIATCO has ownership rights over the facili
ties which it had financed and constructed. The 2004 Resolution squarely
recognized that right when it mandated the payment of just compensat
ion to PIATCO prior to the takeover by the Government of NAIA 3. The
fact that the Government resorted to eminent domain proceedings in t
he first place is a concession on its part of PIATCO’s ownership. Indeed,
if no such right is recognized, then there should be no impediment for
the Government to seize control of NAIA 3 through ordinary ejectment
proceedings.
Since the rights of PIATCO over the NAIA 3 facilities are established, the
nature of these facilities should now be determined. Under Section 415(
1) of the Civil Code, these facilities are ineluctably immovable or real pr
operty, as they constitute buildings, roads and constructions of all kinds
adhered to the soil.38 Certainly, the NAIA 3 facilities are of such nature
that they cannot just be packed up and transported by PIATCO like a tr
aveling circus caravan.
Thus, the property subject of expropriation, the NAIA 3 facilities, are real
property owned by PIATCO. This point is critical, considering the Gover
nment’s insistence that the NAIA 3 facilities cannot be deemed as the "r
ight-of-way", "site" or "location" of a national government infrastructure
project, within the coverage of Rep. Act No. 8974.
There is no doubt that the NAIA 3 is not, under any sensible contempla
tion, a "right-of-way." Yet we cannot agree with the Government’s insiste
nce that neither could NAIA 3 be a "site" or "location". The petition quo
tes the definitions provided in Black’s Law Dictionary of "location’" as the
specific place or position of a person or thing and ‘site’ as pertaining t
o a place or location or a piece of property set aside for specific use.’"3
9 Yet even Black’s Law Dictionary provides that "[t]he term [site] does n
ot of itself necessarily mean a place or tract of land fixed by definite bo
undaries."40 One would assume that the Government, to back up its co
ntention, would be able to point to a clear-cut rule that a "site" or "loc
ation" exclusively refers to soil, grass, pebbles and weeds. There is none.
Indeed, we cannot accept the Government’s proposition that the only pr
operties that may be expropriated under Rep. Act No. 8974 are parcels
of land. Rep. Act No. 8974 contemplates within its coverage such real p
roperty constituting land, buildings, roads and constructions of all kinds
adhered to the soil. Section 1 of Rep. Act No. 8974, which sets the decl
aration of the law’s policy, refers to "real property acquired for national
government infrastructure projects are promptly paid just compensation."
41 Section 4 is quite explicit in stating that the scope of the law relates
to the acquisition of "real property," which under civil law includes buildi
ngs, roads and constructions adhered to the soil.
It is moreover apparent that the law and its implementing rules commo
nly provide for a rule for the valuation of improvements and/or structur
es thereupon separate from that of the land on which such are construc
ted. Section 2 of Rep. Act No. 8974 itself recognizes that the improvem
ents or structures on the land may very well be the subject of expropria
tion proceedings. Section 4(a), in relation to Section 7 of the law provid
es for the guidelines for the valuation of the improvements or structures
to be expropriated. Indeed, nothing in the law would prohibit the appli
cation of Section 7, which provides for the valuation method of the imp
rovements and or structures in the instances wherein it is necessary for
the Government to expropriate only the improvements or structures, as i
n this case.
 n. Unlike in the case of Rule 67, the application of Rep. Act No. 8974 w
ill not contravene the 2004 Resolution, which requires the payment of ju
The law classifies the NAIA 3 facilities as real properties just like the soil
st compensation before any takeover of the NAIA 3 facilities by the Gov
to which they are adhered. Any sub-classifications of real property and
ernment. The 2004 Resolution does not particularize the extent such pay
divergent treatment based thereupon for purposes of expropriation must
ment must be effected before the takeover, but it unquestionably requir
be based on substantial distinctions, otherwise the equal protection claus
es at least some degree of payment to the private property owner befo
e of the Constitution is violated. There may be perhaps a molecular disti
re a writ of possession may issue. The utilization of Rep. Act No. 8974
nction between soil and the inorganic improvements adhered thereto, ye
guarantees compliance with this bare minimum requirement, as it assure
t there are no purposive distinctions that would justify a variant treatme
s the private property owner the payment of, at the very least, the proff
nt for purposes of expropriation. Both the land itself and the improveme
ered value of the property to be seized. Such payment of the proffered
nts thereupon are susceptible to private ownership independent of each
value to the owner, followed by the issuance of the writ of possession i
other, capable of pecuniary estimation, and if taken from the owner, con
n favor of the Government, is precisely the schematic under Rep. Act N
sidered as a deprivation of property. The owner of improvements seized
o. 8974, one which facially complies with the prescription laid down in t
through expropriation suffers the same degree of loss as the owner of l
he 2004 Resolution.
and seized through similar means. Equal protection demands that all per
sons or things similarly situated should be treated alike, both as to right
s conferred and responsibilities imposed. For purposes of expropriation,
Clearly then, we see no error on the part of the RTC when it ruled that
parcels of land are similarly situated as the buildings or improvements c
Rep. Act No. 8974 governs the instant expropriation proceedings.
onstructed thereon, and a disparate treatment between those two classe
s of real property infringes the equal protection clause.

The Proper Amount to be Paid

Even as the provisions of Rep. Act No. 8974 call for that law’s applicatio
n in this case, the threshold test must still be met whether its implemen under Rep. Act No. 8974
tation would conform to the dictates of the Court in the 2004 Resolutio
Then, there is the matter of the proper amount which should be paid t
o PIATCO by the Government before the writ of possession may issue,
consonant to Rep. Act No. 8974.
At this juncture, we must address the observation made by the Office of
the Solicitor General in behalf of the Government that there could be
no "BIR zonal valuations" on the NAIA 3 facility, as provided in Rep. Act
No. 8974, since zonal valuations are only for parcels of land, not for ai
rport terminals. The Court agrees with this point, yet does not see it as
an impediment for the application of Rep. Act No. 8974.
It must be clarified that PIATCO cannot be reimbursed or justly compen
sated for the value of the parcel of land on which NAIA 3 stands. PIAT
CO is not the owner of the land on which the NAIA 3 facility is constru
cted, and it should not be entitled to just compensation that is inclusive
of the value of the land itself. It would be highly disingenuous to com
pensate PIATCO for the value of land it does not own. Its entitlement t
o just compensation should be limited to the value of the improvements
and/or structures themselves. Thus, the determination of just compensat
ion cannot include the BIR zonal valuation under Section 4 of Rep. Act
No. 8974.
Under Rep. Act No. 8974, the Government is required to "immediately p
ay" the owner of the property the amount equivalent to the sum of (1)
one hundred percent (100%) of the value of the property based on the
current relevant zonal valuation of the [BIR]; and (2) the value of the im
provements and/or structures as determined under Section 7. As stated
above, the BIR zonal valuation cannot apply in this case, thus the amou
nt subject to immediate payment should be limited to "the value of the
improvements and/or structures as determined under Section 7," with Se
ction 7 referring to the "implementing rules and regulations for the equi
table valuation of the improvements and/or structures on the land." Und
er the present implementing rules in place, the valuation of the improve
ments/structures are to be based using "the replacement cost method."4
2 However, the replacement cost is only one of the factors to be consid
ered in determining the just compensation.
In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also man
dated that the payment of just compensation should be in accordance
with equity as well. Thus, in ascertaining the ultimate amount of just co
mpensation, the duty of the trial court is to ensure that such amount c
onforms not only to the law, such as Rep. Act No. 8974, but to principl
es of equity as well.
 under the erroneous notion that Rule 67, and not Rep. Act No. 8974, is
the applicable law. Still, as regards the amount, the Court sees no impe
Admittedly, there is no way, at least for the present, to immediately asc
diment to recognize this sum of ₱3 Billion as the proffered value under
ertain the value of the improvements and structures since such valuation
Section 4(b) of Rep. Act No. 8974. After all, in the initial determination
is a matter for factual determination.43 Yet Rep. Act No. 8974 permits
of the proffered value, the Government is not strictly required to adhere
an expedited means by which the Government can immediately take pos
to any predetermined standards, although its proffered value may later
session of the property without having to await precise determination of
be subjected to judicial review using the standards enumerated under Se
the valuation. Section 4(c) of Rep. Act No. 8974 states that "in case the
ction 5 of Rep. Act No. 8974.
completion of a government infrastructure project is of utmost urgency
and importance, and there is no existing valuation of the area concerne
d, the implementing agency shall immediately pay the owner of the pro
How should we appreciate the questioned order of Hon. Gingoyon, whic
perty its proferred value, taking into consideration the standards prescrib
h pegged the amount to be immediately paid to PIATCO at around $62
ed in Section 5 [of the law]."44 The "proffered value" may strike as a hi
.3 Million? The Order dated 4 January 2005, which mandated such amo
ghly subjective standard based solely on the intuition of the government
unt, proves problematic in that regard. While the initial sum of ₱3 Billio
, but Rep. Act No. 8974 does provide relevant standards by which "proff
n may have been based on the assessed value, a standard which should
ered value" should be based,45 as well as the certainty
not however apply in this case, the RTC cites without qualification Secti
on 4(a) of Rep. Act No. 8974 as the basis for the amount of $62.3 Milli
on, thus leaving the impression that the BIR zonal valuation may form p
of judicial determination of the propriety of the proffered value.46
art of the basis for just compensation, which should not be the case. M
oreover, respondent judge made no attempt to apply the enumerated g

In filing the complaint for expropriation, the Government alleged to have uidelines for determination of just compensation under Section 5 of Rep.

deposited the amount of ₱3 Billion earmarked for expropriation, represe Act No. 8974, as required for judicial review of the proffered value.

nting the assessed value of the property. The making of the deposit, inc
luding the determination of the amount of the deposit, was undertaken
The Court notes that in the 10 January 2005 Omnibus Order, the RTC n
oted that the concessions agreement entered into between the Governm
ent and PIATCO stated that the actual cost of building NAIA 3 was "not
less than" US$350 Million.47 The RTC then proceeded to observe that
while Rep. Act No. 8974 required the immediate payment to PIATCO th
e amount equivalent to 100% of the value of NAIA 3, the amount depo
sited by the Government constituted only 18% of this value. At this poin
t, no binding import should be given to this observation that the actual
cost of building NAIA 3 was "not less than" US$350 Million, as the final
conclusions on the amount of just compensation can come only after d
ue ascertainment in accordance with the standards set under Rep. Act N
o. 8974, not the declarations of the parties. At the same time, the expre
ssed linkage between the BIR zonal valuation and the amount of just co
mpensation in this case, is revelatory of erroneous thought on the part
of the RTC.
We have already pointed out the irrelevance of the BIR zonal valuation
as an appropriate basis for valuation in this case, PIATCO not being the
owner of the land on which the NAIA 3 facilities stand. The subject ord
er is flawed insofar as it fails to qualify that such standard is inappropria
te.
It does appear that the amount of US$62.3 Million was based on the ce
rtification issued by the LBP-Baclaran that the Republic of the Philippines
maintained a total balance in that branch amounting to such amount.
Yet the actual representation of the $62.3 Million is not clear. The Land
Bank Certification expressing such amount does state that it was issued
upon request of the Manila International Airport Authority "purportedly a
s guaranty deposit for the expropriation complaint."48 The Government
claims in its Memorandum that the entire amount was made available a
s a guaranty fund for the final and executory judgment of the trial cour
t, and not merely for the issuance of the writ of possession.49 One coul
d readily conclude that the entire amount of US$62.3 Million was intend
ed by the Government to answer for whatever guaranties may be requir
ed for the purpose of the expropriation complaint.
Still, such intention the Government may have had as to the entire US$
62.3 Million is only inferentially established. In ascertaining the proffered
value adduced by the Government, the amount of ₱3 Billion as the amo
unt deposited characterized in the complaint as "to be held by [Land Ba
nk] subject to the [RTC’s] orders,"50 should be deemed as controlling. T
here is no clear evidence that the Government intended to offer US$62.
3 Million as the initial payment of just compensation, the wording of th
e Land Bank Certification notwithstanding, and credence should be given
to the consistent position of the Government on that aspect.
In any event, for the RTC to be able to justify the payment of US$62.3 Be Implemented Until Actual
Million to PIATCO and not ₱3 Billion Pesos, he would have to establish
that the higher amount represents the valuation of the structures/improv
ements, and not the BIR zonal valuation on the land wherein NAIA 3 is Receipt by PIATCO of Proferred

built. The Order dated 5 January 2005 fails to establish such integral fac
t, and in the absence of contravening proof, the proffered value of ₱3
Value
Billion, as presented by the Government, should prevail.

The Court thus finds another error on the part of the RTC. The RTC aut
Strikingly, the Government submits that assuming that Rep. Act No. 8974
horized the issuance of the writ of possession to the Government notwit
is applicable, the deposited amount of ₱3 Billion should be considered
hstanding the fact that no payment of any amount had yet been made
as the proffered value, since the amount was based on comparative valu
to PIATCO, despite the clear command of Rep. Act No. 8974 that there
es made by the City Assessor.51 Accordingly, it should be deemed as ha
must first be payment before the writ of possession can issue. While the
ving faithfully complied with the requirements of the statute.52 While th
RTC did direct the LBP-Baclaran to immediately release the amount of
e Court agrees that ₱3 Billion should be considered as the correct proff
US$62 Million to PIATCO, it should have likewise suspended the writ of
ered value, still we cannot deem the Government as having faithfully co
possession, nay, withdrawn it altogether, until the Government shall have
mplied with Rep. Act No. 8974. For the law plainly requires direct paym
actually paid PIATCO. This is the inevitable consequence of the clear co
ent to the property owner, and not a mere deposit with the authorized
mmand of Rep. Act No. 8974 that requires immediate payment of the i
government depositary. Without such direct payment, no writ of possessi
nitially determined amount of just compensation should be effected. Oth
on may be obtained.
erwise, the overpowering intention of Rep. Act No. 8974 of ensuring pay
ment first before transfer of repossession would be eviscerated.

Writ of Possession May Not

Rep. Act No. 8974 represents a significant change from previous expropr
iation laws such as Rule 67, or even Section 19 of the Local Government
Code. Rule 67 and the Local Government Code merely provided that t
he Government deposit the initial amounts53 antecedent to acquiring po
ssession of the property with, respectively, an authorized
Government depositary54 or the proper court.55 In both cases, the priva
te owner does not receive compensation prior to the deprivation of pro
perty. On the other hand, Rep. Act No. 8974 mandates immediate paym
ent of the initial just compensation prior to the issuance of the writ of
possession in favor of the Government.
Rep. Act No. 8974 is plainly clear in imposing the requirement of imme
diate prepayment, and no amount of statutory deconstruction can evade
such requisite. It enshrines a new approach towards eminent domain th
at reconciles the inherent unease attending expropriation proceedings wit
h a position of fundamental equity. While expropriation proceedings hav
e always demanded just compensation in exchange for private property,
the previous deposit requirement impeded immediate compensation to t
he private owner, especially in cases wherein the determination
of the final amount of compensation would prove highly disputed. Unde
r the new modality prescribed by Rep. Act No. 8974, the private owner
sees immediate monetary recompense with the same degree of speed a
s the taking of his/her property.
While eminent domain lies as one of the inherent powers of the State, t
here is no requirement that it undertake a prolonged procedure, or that
the payment of the private owner be protracted as far as practicable. I
n fact, the expedited procedure of payment, as highlighted under Rep.
Act No. 8974, is inherently more fair, especially to the layperson who w
ould be hard-pressed to fully comprehend the social value of expropriati
on in the first place. Immediate payment placates to some degree whate
ver ill-will that arises from expropriation, as well as satisfies the demand
of basic fairness.
The Court has the duty to implement Rep. Act No. 8974 and to direct
compliance with the requirement of immediate payment in this case. Acc
ordingly, the Writ of Possession dated 21 December 2004 should be hel
d in abeyance, pending proof of actual payment by the Government to
PIATCO of the proffered value of the NAIA 3 facilities, which totals ₱3,0
02,125,000.00.
Rights of the Government In deciding this question, the 2004 Resolution in Agan cannot be ignore
d, particularly the declaration that "[f]or the government to take over th
e said facility, it has to compensate respondent PIATCO as builder of th
upon Issuance of the Writ e said structures." The obvious import of this holding is that unless PIAT
CO is paid just compensation, the Government is barred from "taking ov
er," a phrase which in the strictest sense could encompass even a bar o
of Possession
f physical possession of NAIA 3, much less operation of the facilities.

Once the Government pays PIATCO the amount of the proffered value
There are critical reasons for the Court to view the 2004 Resolution less
of ₱3 Billion, it will be entitled to the Writ of Possession. However, the
stringently, and thus allow the operation by the Government of NAIA 3
Government questions the qualification imposed by the RTC in its 4 Jan
upon the effectivity of the Writ of Possession. For one, the national pres
uary 2005 Order consisting of the prohibition on the Government from
tige is diminished every day that passes with the NAIA 3 remaining mot
performing acts of ownership such as awarding concessions or leasing a
hballed. For another, the continued non-use of the facilities contributes t
ny part of NAIA 3 to other parties. To be certain, the RTC, in its 10 Jan
o its physical deterioration, if it has not already. And still for another, th
uary 2005 Omnibus Order, expressly stated that it was not affirming "the
e economic benefits to the Government and the country at large are be
superfluous part of the Order [of 4 January 2005] prohibiting the plaint
yond dispute once the NAIA 3 is put in operation.
iffs from awarding concessions or leasing any part of NAIA [3] to other
parties."56 Still, such statement was predicated on the notion that since
the Government was not yet the owner of NAIA 3 until final payment o Rep. Act No. 8974 provides the appropriate answer for the standard tha
f just compensation, it was obviously incapacitated to perform such acts t governs the extent of the acts the Government may be authorized to
of ownership. perform upon the issuance of the writ of possession. Section 4 states th
at "the court shall immediately issue to the implementing agency an ord
er to take possession of the property and start the implementation of th
e project." We hold that accordingly, once the Writ of Possession is effe
ctive, the Government itself is authorized to perform the acts that are es
sential to the operation of the NAIA 3 as an international airport termin
al upon the effectivity of the Writ of Possession. These would include th
e repair, reconditioning and improvement of the complex, maintenance
of the existing facilities and equipment, installation of new facilities and
equipment, provision of services and facilities pertaining to the facilitatio
n of air traffic and transport, and other services that are integral to a m
odern-day international airport.
The Government’s position is more expansive than that adopted by the
Court. It argues that with the writ of possession, it is enabled to perfor
m acts de jure on the expropriated property. It cites Republic v. Tagle,5
7 as well as the statement therein that "the expropriation of real propert
y does not include mere physical entry or occupation of land," and from
them concludes that "its mere physical entry and occupation of the pro
perty fall short of the taking of title, which includes all the rights that m
ay be exercised by an owner over the subject property."
This conclusion is indeed lifted directly from statements in Tagle,58 but
not from the ratio decidendi of that case. Tagle concerned whether a w
rit of possession in favor of the Government was still necessary in light
of the fact that it was already in actual possession of the property. In r
uling that the Government was entitled to the writ of possession, the Co
urt in Tagle explains that such writ vested not only physical possession,
but also the legal right to possess the property. Continues the Court, su
ch legal right to possess was particularly important in the case, as there
was a pending suit against the Republic for unlawful detainer, and the
writ of possession would serve to safeguard the Government from evicti
on.59
At the same time, Tagle conforms to the obvious, that there is no transf
er of ownership as of yet by virtue of the writ of possession. Tagle may
concede that the Government is entitled to exercise more than just the
right of possession by virtue of the writ of possession, yet it cannot be
construed to grant the Government the entire panoply of rights that ar
e available to the owner. Certainly, neither Tagle nor any other case or l
aw, lends support to the Government’s proposition that it acquires benef
icial or equitable ownership of the expropriated property merely through
the writ of possession.
Indeed, this Court has been vigilant in defense of the rights of the prop
erty owner who has been validly deprived of possession, yet retains lega
l title over the expropriated property pending payment of just compensa
tion. We reiterated the various doctrines of such import in our recent h
olding in Republic v. Lim:60
The recognized rule is that title to the property expropriated shall pass f
rom the owner to the expropriator only upon full payment of the just c
ompensation. Jurisprudence on this settled principle is consistent both he
re and in other democratic jurisdictions. In Association of Small Landown
ers in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform[61 ], th
us:
"Title to property which is the subject of condemnation proceedings doe
s not vest the condemnor until the judgment fixing just compensation is
entered and paid, but the condemnor’s title relates back to the date o
n which the petition under the Eminent Domain Act, or the commissione
r’s report under the Local Improvement Act, is filed.
x x x Although the right to appropriate and use land taken for a canal
is complete at the time of entry, title to the property taken remains in t
he owner until payment is actually made. (Emphasis supplied.)
In Kennedy v. Indianapolis, the US Supreme Court cited several cases ho
lding that title to property does not pass to the condemnor until just co
mpensation had actually been made. In fact, the decisions appear to be
uniform to this effect. As early as 1838, in Rubottom v. McLure, it was h
eld that ‘actual payment to the owner of the condemned property was
a condition precedent to the investment of the title to the property in t
he State’ albeit ‘not to the appropriation of it to public use.’ In Rexford
v. Knight, the Court of Appeals of New York said that the construction
upon the statutes was that the fee did not vest in the State until the p
ayment of the compensation although the authority to enter upon and
appropriate the land was complete prior to the payment. Kennedy furthe
r said that ‘both on principle and authority the rule is . . . that the righ
t to enter on and use the property is complete, as soon as the propert
y is actually appropriated under the authority of law for a public use, b
ut that the title does not pass from the owner without his consent, until
just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, that:
‘If the laws which we have exhibited or cited in the preceding discussion
are attentively examined it will be apparent that the method of expropr
iation adopted in this jurisdiction is such as to afford absolute reassuran
ce that no piece of land can be finally and irrevocably taken from an u
nwilling owner until compensation is paid....’"(Emphasis supplied.)
Clearly, without full payment of just compensation, there can be no tran
sfer of title from the landowner to the expropriator. Otherwise stated, th
e Republic’s acquisition of ownership is conditioned upon the full payme
nt of just compensation within a reasonable time.
Significantly, in Municipality of Biñan v. Garcia[62 ] this Court ruled that
the expropriation of lands consists of two stages, to wit:
"x x x The first is concerned with the determination of the authority of t
he 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 wit
h 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 c
ondemned, for the public use or purpose described in the complaint, up
on the payment of just compensation to be determined as of the date
of the filing of the complaint" x x x.
The second phase of the eminent domain action is concerned with the
determination by the court of "the just compensation for the property s
ought to be taken." This is done by the court with the assistance of not
more than three (3) commissioners. x x x.
It is only upon the completion of these two stages that expropriation is
said to have been completed. In Republic v. Salem Investment Corporati
on[63 ] , we ruled that, "the process is not completed until payment of
just compensation." Thus, here, the failure of the Republic to pay respon
dent and his predecessors-in-interest for a period of 57 years rendered t
he expropriation process incomplete.
Lim serves fair warning to the Government and its agencies who consist
ently refuse to pay just compensation due to the private property owner
whose property had been
expropriated. At the same time, Lim emphasizes the fragility of the right
s of the Government as possessor pending the final payment of just co
mpensation, without diminishing the potency of such rights. Indeed, the
public policy, enshrined foremost in the Constitution, mandates that the
Government must pay for the private property it expropriates. Conseque
ntly, the proper judicial attitude is to guarantee compliance with this pri
mordial right to just compensation.
Final Determination of Just
Compensation Within 60 Days
The issuance of the writ of possession does not write finis to the expro
priation proceedings. As earlier pointed out, expropriation is not complet
ed until payment to the property owner of just compensation. The proff
ered value stands as merely a provisional determination of the amount
of just compensation, the payment of which is sufficient to transfer poss
ession of the property to the Government. However, to effectuate the tr
ansfer of ownership, it is necessary for the Government to pay the prop
erty owner the final just compensation.
In Lim, the Court went as far as to countenance, given the exceptional
circumstances of that case, the reversion of the validly expropriated prop
erty to private ownership due to the failure of the Government to pay j
ust compensation in that case.64 It was noted in that case that the Gov
ernment deliberately refused to pay just compensation. The Court went
on to rule that "in cases where the government failed to pay just comp
ensation within five (5) years from the finality of the judgment in the ex
propriation proceedings, the owners concerned shall have the right to re
cover possession of their property."65
Rep. Act No. 8974 mandates a speedy method by which the final deter
mination of just compensation may be had. Section 4 provides:
In the event that the owner of the property contests the implementing
agency’s proffered value, the court shall determine the just compensatio
n to be paid the owner within sixty (60) days from the date of filing of
the expropriation case. When the decision of the court becomes final an
d executory, the implementing agency shall pay the owner the difference
between the amount already paid and the just compensation as determ
ined by the court.
We hold that this provision should apply in this case. The sixty (60)-day
period prescribed in Rep. Act No. 8974 gives teeth to the law’s avowed
policy "to ensure that owners of real property acquired for national gov
ernment infrastructure projects are promptly paid just compensation."66 I
n this case, there already has been irreversible delay in the prompt pay
ment of PIATCO of just compensation, and it is no longer possible for t
he RTC to determine the just compensation due PIATCO within sixty (60
) days from the filing of the complaint last 21 December 2004, as conte
mplated by the law. Still, it is feasible to effectuate the spirit of the law
by requiring the trial court to make such determination within sixty (60)
days from finality of this decision, in accordance with the guidelines laid
down in Rep. Act No. 8974 and its Implementing Rules.
Of course, once the amount of just compensation has been finally deter
mined, the Government is obliged to pay PIATCO the said amount. As s
hown in Lim and other like-minded cases, the Government’s refusal to
make such payment is indubitably actionable in court.
Appointment of Commissioners
The next argument for consideration is the claim of the Government tha
t the RTC erred in appointing the three commissioners in its 7 January
2005 Order without prior consultation with either the Government or PIA
TCO, or without affording the Government the opportunity to object to
the appointment of these commissioners. We can dispose of this argum
ent without complication.
It must be noted that Rep. Act No. 8974 is silent on the appointment o
f commissioners tasked with the ascertainment of just compensation.67 T
his protocol though is sanctioned under Rule 67. We rule that the appoi
ntment of commissioners under Rule 67 may be resorted to, even in ex
propriation proceedings under Rep. Act No. 8974, since the application
of the provisions of Rule 67 in that regard do not conflict with the stat
ute. As earlier stated, Section 14 of the Implementing Rules does allow s
uch other incidents affecting the complaint to be resolved under the pro
visions on expropriation of Rule 67 of the Rules of Court. Even without
Rule 67, reference during trial to a commissioner of the examination of
an issue of fact is sanctioned under Rule 32 of the Rules of Court.
But while the appointment of commissioners under the aegis of Rule 67
may be sanctioned in expropriation proceedings under Rep. Act No. 897
4, the standards to be observed for the determination of just compensat
ion are provided not in Rule 67 but in the statute. In particular, the gov
erning standards for the determination of just compensation for the NAI
A 3 facilities are found in Section 10 of the Implementing Rules for Rep.
Act No. 8974, which provides for the replacement cost method in the
valuation of improvements and structures.68
Nothing in Rule 67 or Rep. Act No. 8974 requires that the RTC consult parties to file their objections with the RTC within five (5) days from fina
with the parties in the expropriation case on who should be appointed lity of this decision.
as commissioners. Neither does the Court feel that such a requirement s
hould be imposed in this case. We did rule in Municipality of Talisay v.
Ramirez69 that "there is nothing to prevent [the trial court] from seeking Insufficient Ground for Inhibition

the recommendations of the parties on [the] matter [of appointment of

commissioners], the better to ensure their fair representation."70 At the
of Respondent Judge
same time, such solicitation of recommendations is not obligatory on the
part of the court, hence we cannot impute error on the part of the RT
C in its exercise of solitary discretion in the appointment of the commiss
The final argument for disposition is the claim of the Government is tha
ioners.
t Hon. Gingoyon has prejudged the expropriation case against the Gover
nment’s cause and, thus, should be required to inhibit himself. This grav
e charge is predicated on facts which the Government characterizes as "
What Rule 67 does allow though is for the parties to protest the appoin
undeniable." In particular, the Government notes that the 4 January 2005
tment of any of these commissioners, as provided under Section 5 of th
Order was issued motu proprio, without any preceding motion, notice
e Rule. These objections though must be made filed within ten (10) days
or hearing. Further, such order, which directed the payment of US$62 M
from service of the order of appointment of the commissioners.71 In th
illion to PIATCO, was attended with error in the computation of just co
is case, the proper recourse of the Government to challenge the choice
mpensation. The Government also notes that the said Order was issued
of the commissioners is to file an objection with the trial court, conform
even before summons had been served on PIATCO.
ably with Section 5, Rule 67, and not as it has done, assail the same th
rough a special civil action for certiorari. Considering that the expropriati
on proceedings in this case were effectively halted seven (7) days after t
The disqualification of a judge is a deprivation of his/her judicial power7
he Order appointing the commissioners,72 it is permissible to allow the
3 and should not be allowed on the basis of mere speculations and sur
mises. It certainly cannot be predicated on the adverse nature of the ju
dge’s rulings towards the movant for inhibition, especially if these rulings
are in accord with law. Neither could inhibition be justified merely on t
he erroneous nature of the rulings of the judge. We emphasized in We
bb v. People:74
To prove bias and prejudice on the part of respondent judge, petitioner
s harp on the alleged adverse and erroneous rulings of respondent judg
e on their various motions. By themselves, however, they do not sufficie
ntly prove bias and prejudice to disqualify respondent judge. To be disq
ualifying, the bias and prejudice must be shown to have stemmed from
an extrajudicial source and result in an opinion on the merits on some
basis other than what the judge learned from his participation in the ca
se. Opinions formed in the course of judicial proceedings, although erro
neous, as long as they are based on the evidence presented and condu
ct observed by the judge, do not prove personal bias or prejudice on t
he part of the judge. As a general rule, repeated rulings against a litiga
nt, no matter how erroneous and vigorously and consistently expressed,
are not a basis for disqualification of a judge on grounds of bias and p
rejudice. Extrinsic evidence is required to establish bias, bad faith, malice
or corrupt purpose, in addition to the palpable error which may be infer
red from the decision or order itself. Although the decision may seem s
o erroneous as to raise doubts concerning a judge's integrity, absent ext
rinsic evidence, the decision itself would be insufficient to establish a cas
e against the judge. The only exception to the rule is when the error is
so gross and patent as to produce an ineluctable inference of bad faith
or malice.75
The Government’s contentions against Hon. Gingoyon are severely under
cut by the fact that the 21 December 2004 Order, which the 4 January
2005 Order sought to rectify, was indeed severely flawed as it erroneous
ly applied the provisions of Rule 67 of the Rules of Court, instead of Re
p. Act No. 8974, in ascertaining compliance with the requisites for the is
suance of the writ of possession. The 4 January
2005 Order, which according to the Government establishes Hon. Gingoy
on’s bias, was promulgated precisely to correct the previous error by ap
plying the correct provisions of law. It would not speak well of the Cour
t if it sanctions a judge for wanting or even attempting to correct a pre
vious erroneous order which precisely is the right move to take.
Neither are we convinced that the motu proprio issuance of the 4 Janua
ry 2005 Order, without the benefit of notice or hearing, sufficiently evinc
es bias on the part of Hon. Gingoyon. The motu proprio amendment by
a court of an erroneous order previously issued may be sanctioned de
pending on the circumstances, in line with the long-recognized principle
that every court has inherent power to do all things reasonably necessar
y for the administration of justice within the scope of its jurisdiction.76 S
ection 5(g), Rule 135 of the Rules of Court further recognizes the inhere
nt power of courts "to amend and control its process and orders so as
to make them conformable to law and justice,"77 a power which Hon. G
ingoyon noted in his 10 January 2005 Omnibus Order.78 This inherent p
ower includes the right of the court to reverse itself, especially when in
its honest opinion it has committed an error or mistake in judgment, an
d that to adhere to its decision will cause injustice to a party litigant.79
Certainly, the 4 January 2005 Order was designed to make the RTC’s pr
evious order conformable to law and justice, particularly to apply the co
rrect law of the case. Of course, as earlier established, this effort proved
incomplete, as the 4 January 2005 Order did not correctly apply Rep.
Act No. 8974 in several respects. Still, at least, the 4 January 2005 Orde
r correctly reformed the most basic premise of the case that Rep. Act N
o. 8974 governs the expropriation proceedings.
Nonetheless, the Government belittles Hon. Gingoyon’s invocation of Sec
tion 5(g), Rule 135 as "patently without merit". Certainly merit can be se
en by the fact that the 4 January 2005 Order reoriented the expropriati
on proceedings towards the correct governing law. Still, the Government
claims that the unilateral act of the RTC did not conform to law or justi
ce, as it was not afforded the right to be heard.
The Court would be more charitably disposed towards this argument if
not for the fact that the earlier order with the 4 January 2005 Order so
ught to correct was itself issued without the benefit of any hearing. In f
act, nothing either in Rule 67 or Rep. Act No. 8975 requires the conduc
t of a hearing prior to the issuance of the writ of possession, which by
design is available immediately upon the filing of the complaint provided
that the requisites attaching thereto are present. Indeed, this expedited
process for the obtention of a writ of possession in expropriation cases
comes at the expense of the rights of the property owner to be heard
or to be deprived of possession. Considering these predicates, it would
be highly awry to demand that an order modifying the earlier issuance
of a writ of possession in an expropriation case be barred until the stag
ing of a hearing, when the issuance of the writ of possession itself is no
t subject to hearing. Perhaps the conduct of a hearing under these circu
mstances would be prudent. However, hearing is not mandatory, and th
e failure to conduct one does not establish the manifest bias required f
or the inhibition of the judge.
The Government likewise faults Hon. Gingoyon for using the amount of
US$350 Million as the basis for the 100% deposit under Rep. Act No. 89
74. The Court has noted that this statement was predicated on the erro
neous belief that the BIR zonal valuation applies as a standard for deter
mination of just compensation in this case. Yet this is manifest not of bi
as, but merely of error on the part of the judge. Indeed, the Governme
nt was not the only victim of the errors of the RTC in the assailed orde
rs. PIATCO itself was injured by the issuance by the RTC of the writ of
possession, even though the former had yet to be paid any amount of j
ust compensation. At the same time, the Government was also prejudice
d by the erroneous ruling of the RTC that the amount of US$62.3 Millio
n, and not ₱3 Billion, should be released to PIATCO.
The Court has not been remiss in pointing out the multiple errors com
mitted by the RTC in its assailed orders, to the prejudice of both parties
. This attitude of error towards all does not ipso facto negate the charg
e of bias. Still, great care should be had in requiring the inhibition of ju
dges simply because the magistrate did err. Incompetence may be a gro
und for administrative sanction, but not for inhibition, which requires lac
k of objectivity or impartiality to sit on a case.
The Court should necessarily guard against adopting a standard that a j
udge should be inhibited from hearing the case if one litigant loses trus
t in the judge. Such loss of trust on the part of the Government may b
e palpable, yet inhibition cannot be grounded merely on the feelings of
the party-litigants. Indeed, every losing litigant in any case can resort to
claiming that the judge was biased, and he/she will gain a sympathetic
ear from friends, family, and people who do not understand the judicial
process. The test in believing such a proposition should not be the vehe
mence of the litigant’s claim of bias, but the Court’s judicious estimation,
as people who know better than to believe any old cry of "wolf!", whet
her such bias has been irrefutably exhibited.
The Court acknowledges that it had been previously held that "at the ve
ry first sign of lack of faith and trust in his actions, whether well-ground
ed or not, the judge has no other alternative but to inhibit himself from
the case."80 But this doctrine is qualified by the entrenched rule that "
a judge may not be legally prohibited from sitting in a litigation, but wh
en circumstances appear that will induce doubt to his honest actuations
and probity in favor of either party, or incite such state of mind, he sho
uld conduct a careful self-
examination. He should exercise his discretion in a way that the people's
faith in the Courts of Justice is not impaired."81 And a self-assessment
by the judge that he/she is not impaired to hear the case will be respe
cted by the Court absent any evidence to the contrary. As held in Chin
v. Court of Appeals:
An allegation of prejudgment, without more, constitutes mere conjecture
and is not one of the "just and valid reasons" contemplated in the seco
nd paragraph of Rule 137 of the Rules of Court for which a judge may
inhibit himself from hearing the case. We have repeatedly held that mer
e suspicion that a judge is partial to a party is not enough. Bare allegat
ions of partiality and prejudgment will not suffice in the absence of clea
r and convincing evidence to overcome the presumption that the judge
will undertake his noble role to dispense justice according to law and ev
idence and without fear or favor. There should be adequate evidence to
prove the allegations, and there must be showing that the judge had a
n interest, personal or otherwise, in the prosecution of the case. To be
a disqualifying circumstance, the bias and prejudice must be shown to h
ave stemmed from an extrajudicial source and result in an opinion on t
he merits on some basis other than what the judge learned from his pa
rticipation in the case.82
The mere vehemence of the Government’s claim of bias does not transl
ate to clear and convincing evidence of impairing bias. There is no suffi
cient ground to direct the inhibition of Hon. Gingoyon from hearing the
expropriation case.
In conclusion, the Court summarizes its rulings as follows:
(1) The 2004 Resolution in Agan sets the base requirement that has to
be observed before the Government may take over the NAIA 3, that th
ere must be payment to PIATCO of just compensation in accordance wit
h law and equity. Any ruling in the present expropriation case must be
conformable to the dictates of the Court as pronounced in the Agan ca
ses.
(2) Rep. Act No. 8974 applies in this case, particularly insofar as it requir
es the immediate payment by the Government of at least the proffered
value of the NAIA 3 facilities to PIATCO and provides certain valuation s
tandards or methods for the determination of just compensation.
(3) Applying Rep. Act No. 8974, the implementation of Writ of Possessio
n in favor of the Government over NAIA 3 is held in abeyance until PIA
TCO is directly paid the amount of ₱3 Billion, representing the proffered
value of NAIA 3 under Section 4(c) of the law.
(4) Applying Rep. Act No. 8974, the Government is authorized to start t
he implementation of the NAIA 3 Airport terminal project by performing
the acts that are essential to the operation of the NAIA 3 as an internat
ional airport terminal upon the effectivity of the Writ of Possession, subj
ect to the conditions above-stated. As prescribed by the Court, such aut
hority encompasses "the repair, reconditioning and improvement of the c
omplex, maintenance of the existing facilities and equipment, installation
of new facilities and equipment, provision of services and facilities pertai
ning to the facilitation of air traffic and transport, and other services tha
t are integral to a modern-day international airport."83
(5) The RTC is mandated to complete its determination of the just comp
ensation within sixty (60) days from finality of this Decision. In doing so,
the RTC is obliged to comply with "law and equity" as ordained in Agai
n and the standard set under Implementing Rules of Rep. Act No. 8974
which is the "replacement cost method" as the standard of valuation of
structures and improvements.
(6) There was no grave abuse of discretion attending the RTC Order ap
pointing the commissioners for the purpose of determining just compens
ation. The provisions on commissioners under Rule 67 shall apply insofar
as they are not inconsistent with Rep. Act No. 8974, its Implementing
Rules, or the rulings of the Court in Agan.
(7) The Government shall pay the just compensation fixed in the decisio
n of the trial court to PIATCO immediately upon the finality of the said
decision.
(8) There is no basis for the Court to direct the inhibition of Hon. Ging
oyon.
All told, the Court finds no grave abuse of discretion on the part of the
RTC to warrant the nullification of the questioned orders. Nonetheless,
portions of these orders should be modified to conform with law and th
e pronouncements made by the Court herein.
WHEREFORE, the Petition is GRANTED in PART with respect to the order
s dated 4 January 2005 and 10 January 2005 of the lower court. Said or
ders are AFFIRMED with the following MODIFICATIONS:
 The Temporary Restraining Order dated 14 January 2005 is hereby LIFTE
D.
1) The implementation of the Writ of Possession dated 21 December 200
5 is HELD IN ABEYANCE, pending payment by petitioners to PIATCO of
the amount of Three Billion Two Million One Hundred Twenty Five Thou
No pronouncement as to costs.
sand Pesos (₱3,002,125,000.00), representing the proffered value of the N
AIA 3 facilities;

2) Petitioners, upon the effectivity of the Writ of Possession, are authoriz

ed start the implementation of the Ninoy Aquino International Airport Pa
senger Terminal III project by performing the acts that are essential to t
he operation of the said International Airport Passenger Terminal project;

3) RTC Branch 117 is hereby directed, within sixty (60) days from finality
of this Decision, to determine the just compensation to be paid to PIAT
CO by the Government.

The Order dated 7 January 2005 is AFFIRMED in all respects subject to

the qualification that the parties are given ten (10) days from finality of
this Decision to file, if they so choose, objections to the appointment of
the commissioners decreed therein.
 G.R. No. 156093 February 2, 2007

NATIONAL POWER CORP., Petitioner,

vs.

SPOUSES NORBERTO AND JOSEFINA DELA CRUZ, METROBANK, Dasmari

ñas, Cavite Branch, REYNALDO FERRER, and S.K. DYNAMICS MANUFACT
URER CORP., Respondents.

Today is Monday, October 14, 2019home

D E C I S I O N
Custom Search

VELASCO, JR., J.:

Republic of the Philippines

The Case
SUPREME COURT

Manila
In this petition for review under Rule 45 of the Rules of Court, petitione
r National Power Corporation (NAPOCOR) seeks to annul and set aside

SECOND DIVISION the November 18, 2002 Decision1 of the Court of Appeals (CA) in CA-G.
R. CV No. 67446, which affirmed the December 28, 1999 Order2 of the
Imus, Cavite Regional Trial Court (RTC), Branch XX in Civil Case No. 1816
-98, which fixed the fair market value of the expropriated lots at PhP 10,
000.00 per square meter.
The Facts
Petitioner NAPOCOR is a government-owned and controlled corporation
created under Republic Act No. 6395, as amended, with the mandate of
developing hydroelectric power, producing transmission lines, and devel
oping hydroelectric power throughout the Philippines. NAPOCOR decided
to acquire an easement of right-of-way over portions of land within th
e areas of Dasmariñas and Imus, Cavite for the construction and mainte
nance of the proposed Dasmariñas-Zapote 230 kV Transmission Line Pro
ject.3
On November 27, 1998, petitioner filed a Complaint4 for eminent domai
n and expropriation of an easement of right-of-way against respondents
as registered owners of the parcels of land sought to be expropriated,
which were covered by Transfer Certificates of Title (TCT) Nos. T-313327,
T-671864, and T-454278. The affected areas were 51.55, 18.25, and 14.62
5 square meters, respectively, or a total of 84.425 square meters.
After respondents filed their respective answers to petitioner’s Complaint,
petitioner deposited PhP 5,788.50 to cover the provisional value of the
land in accordance with Section 2, Rule 67 of the Rules of Court.5 Then,
on February 25, 1999, petitioner filed an Urgent Ex-Parte Motion for th
e Issuance of a Writ of Possession, which the trial court granted in its
March 9, 1999 Order. The trial court issued a Writ of Possession over th
e lots owned by respondents spouses de la Cruz and respondent Ferrer
on March 10, 1999 and April 12, 1999, respectively.
However, the trial court dropped the Dela Cruz spouses and their mortg
agee, Metrobank, as parties-defendants in its May 11, 1999 Order,6 in vie
w of the Motion to Intervene filed by respondent/intervenor Virgilio M.
Saulog, who claimed ownership of the land sought to be expropriated fr
om respondents spouses Dela Cruz.
On June 24, 1999, the trial court terminated the pre-trial in so far as res
pondent Ferrer was concerned, considering that the sole issue was the a
mount of just compensation, and issued an Order directing the constituti
on of a Board of Commissioners with respect to the property of respon
dent S.K. Dynamics. The trial court designated Mr. Lamberto C. Parra, Ca
vite Provincial Assessor, as chairman, while petitioner nominated the Mun
icipal Assessor of Dasmariñas, Mr. Regalado T. Andaya, as member. Resp
ondent S.K. Dynamics did not nominate any commissioner.
As to the just compensation for the property of Saulog, successor-in-inte
rest of the Dela Cruz spouses, the trial court ordered the latter and peti
tioner to submit their compromise agreement.
The commissioners conducted an ocular inspection of S.K. Dynamics’ pro
perty, and on October 8, 1999, they submitted a report to the trial cour
t, with the following pertinent findings:
In arriving our [sic] estimate of values our studies and analysis include t
he following:
I. PROPERTY LOCATION
As shown to us on-site during our ocular inspection, the appraised prop
erty is land only, identified as the area affected by the construction of t
he National Power Corporation (NPC) Dasmariñas-Zapote 230KV Transmi
ssion Lines Project, located within Barangay Salitran, Dasmariñas, Cavite r
egistered in the name of S.K. Dynamic[s] Manufacture[r], Corp., under Tr
ansfer Certificate of Title No. T-454278.
II. NEIGHBORHOOD DESCRIPTION
The neighborhood particularly in the immediate vicinity is within a mixed
residential and commercial area, situated in the northern section of the
Municipality of Dasmariñas which was transversed [sic] by Gen. Emilio Ag
uinaldo Highway [where] several residential subdivisions and commercial
establishment[s] are located.
Considered as some of the important improvements [on] the vicinity are
(within 1.5 radius)
Orchard Golf and Country Club
Golden City Subdivision
Southfield Subdivisions
Arcontica Sports Complex Public transportation consisting of passenger jeepneys and buses as well
taxicabs are [sic] regularly available along Gen. E. Emilio Aguinaldo High
way [sic].
Max’s Restaurant

x x x x
Waltermart Shopping Mall

IV. HIGHEST AND MOST PROFITABLE USE

UMC Medical Center

Several savings and Commercial Banks as well as several Gasoline station
s.
Community centers such as, [sic] churches, public markets, shopping mall
s, banks and gasoline stations are easily accessible from the subject real
properties.
x x x x
The subject property is situated within the residential/commercial zone a
nd considering the area affected and taking into consideration, their loca
tion, shape, lot topography, accessibility and the predominant uses of pr
operties in the neighborhood, as well as the trend of land developments
in the vicinity, we are on the opinion that the highest and most profita
ble use of the property is good for residential and commercial purposes.

Convenience facilities such as electricity, telephone service as well as pip

e potable water supply system are all available along Gen. Emilio Aguina V. VALUATION OF LAND MARKET DATA
ldo Highway.
 Upon the submission of the commissioners’ report, petitioner was not no
tified of the completion or filing of it nor given any opportunity to file i
x x x x
ts objections to it.

Based on the analysis of data gathered and making the proper adjustme
On December 1, 1999, respondent Ferrer filed a motion adopting in toto
nts with respect to the location, area, shape, accessibility, and the highes
the commissioners’ report with respect to the valuation of his property.
t and best use of the subject properties, it is the opinion of the herein
8 On December 28, 1999, the trial court consequently issued the Order
commissioners that the fair market value of the subject real properties is
approving the commissioners’ report, and granted respondent Ferrer’s m
P10,000.00 per square meter, as of this date, October 05, 1999.7
otion to adopt the subject report. Subsequently, the just compensation f
or the disparate properties to be expropriated by petitioner for its proje

Thus, both commissioners recommended that the property of S.K. Dyna ct was uniformly pegged at PhP 10,000.00 per square meter.

mics to be expropriated by petitioner be valued at PhP 10,000.00 per sq

uare meter.
Incidentally, on February 11, 2000, respondent S.K. Dynamics filed a moti
on informing the trial court that in addition to the portion of its propert

The records show that the commissioners did not afford the parties the y covered by TCT No. T-454278 sought to be expropriated by petitioner

opportunity to introduce evidence in their favor, nor did they conduct h , the latter also took possession of an 8.55-square meter portion of S.K.

earings before them. In fact, the commissioners did not issue notices to Dynamics’ property covered by TCT No. 503484 for the same purpose––

the parties to attend hearings nor provide the concerned parties the op to acquire an easement of right-of-way for the construction and mainten

portunity to argue their respective causes. ance of the proposed Dasmariñas-Zapote 230 kV Transmission Line Proje
ct. Respondent S.K. Dynamics prayed that said portion be included in th
e computation of the just compensation to be paid by petitioner.
On the same date, the Imus, Cavite RTC granted S.K. Dynamics’ motion
to have the 8.55-square meter portion of its property included in the co
mputation of just compensation.1awphi1.net
The Ruling of the Regional Trial Court
As previously stated, in its December 28, 1999 Order, the trial court fixe
d the just compensation to be paid by petitioner at PhP 10,000.00 per s
quare meter. The relevant portion of the said Order reads as follows:
On October 8, 1999, a Commissioner’s Valuation Report was submitted i
n Court by the Provincial Assessor of Cavite and by the Municipal Asses
sor of Dasmariñas, Cavite. Quoting from said Report, thus:
"Based on the analysis of data gathered and making the proper adjustm
ents with respect to location, area, shape, accessibility, and the highest a
nd best use of the subject properties, it is the opinion of herein commis
sioners that the fair market value of the subject real properties is ₧10,0
00.00 per square meter, as of this date, October 05, 1999."
Finding the opinion of the Commissioners to be in order, this Court app
roves the same. Accordingly, the Motion filed by [respondent] Reynaldo
Ferrer adopting said valuation report is granted.
SO ORDERED. 9
On January 20, 2000, petitioner filed a Motion for Reconsideration of th
e abovementioned Order, but said motion was denied in the trial court’s
March 23, 2000 Order, which states that:
The basis of [petitioner] in seeking to set aside the Order dated Decem
ber 28, 1999 is its claim that the Commissioners’ Report fixing the just c
ompensation at P10,000.00 per square meter is exorbitant, unjust and un
reasonable. To support its contention, [petitioner] invoked Provincial Appr
aisal Committee Report No. 08-95 dated October 25, 1995 which set the
just compensation of lots along Gen. Aguinaldo Highway at P3,000.00
per sq.m. only.
By way of opposition, [respondent] Dynamics countered that the valuatio
n of a lot under expropriation is reckoned at the time of its taking by t
he government. And since in the case at bar, the writ of possession was
 issued on March 10, 1999, the price or value for 1999 must be the one
to be considered.
We find for the defendant.
The PAR Resolution alluded to by [petitioner] was passed in 1995 or fou
r (4) years [before] the lot in question was taken over by the governme
nt. This explains why the price or cost of the land has considerably incr
eased. Besides, the valuation of P10,000.00 per sq.m. was the one recom
mended by the commissioner designated by [petitioner] itself and concur
red in by the Provincial Assessor of Cavite.
Be that as it may, the Motion for Reconsideration is denied.
SO ORDERED.10
The Ruling of the Court of Appeals
Unsatisfied with the amount of just compensation, petitioner filed an app
eal before the CA. In resolving the appeal, the CA made the following fi
ndings:
We find nothing on record which would warrant the reversal of the Ord
er dated December 28, 1999 of the court a quo.
[Petitioner] submits that the order of the court a quo adopting the Com
missioners [sic] Valuation Report, fixing the just compensation for the su
bject lots in the amount of P10,000.00 per square meter is exhorbitant [
sic], highly speculative and without any basis. In support thereto, [petitio
ner] presented before the court a quo the Provincial Appraisal Committe
e of Cavite Resolution No. 08-95 x x x which fixed the fair market value
of lots located along Gen. Aguinaldo Highway, Dasmariñas, Cavite, whic
h incidentally includes the lots subject of this proceedings [sic], in the a
mount of P3,000.00 per square meter.
We do not agree.
"The nature and character of the land at the time of its taking is the pr s of the commissioners, so that [petitioner] was as fully heard as there
incipal criterion to determine just compensation to the land owner." (Nat might have been hearing actually taken place x x x."
ional Power Corporation vs. Henson, 300 SCRA 751-756).

The CA ultimately rendered its judgment, as follows:

The CA then cited Section 4, Rule 67 of the 1997 Rules of Civil Procedu
re11 to explain why Resolution No. 08-95 could not "be used as [a] basi
s for determining the just compensation of the subject lots, which by re WHEREFORE, premises considered, the present appeal is hereby DISMISS

ason of the changed commercial conditions in the vicinity, could have in ED for lack of merit. The Order dated December 28, 1999 and March 2

creased its value greater than its value three (3) years ago." The said re 3, 2000 of the court a quo are hereby AFFIRMED by this Court.

solution, which fixed the fair market value of the lots, including that of t
he disputed lots along Gen. Aguinaldo Highway, was approved on Octo
SO ORDERED.12
ber 25, 1995, while petitioner filed the Complaint for the expropriation o
f the disputed lots on November 27, 1998, or more than three (3) years
had elapsed after said resolution was approved. Reflecting on the commi
Significantly, petitioner did not file a Motion for Reconsideration of the
ssioners’ report, the CA noted that since the property underwent import
CA November 18, 2002 Decision, but it directly filed a petition for revie
ant changes and improvements, "the highest and most profitable use of
w before us.
the property is good for residential and commercial purposes."

The Issues
As regards the commissioners’ failure to conduct a hearing "to give the
parties the opportunity to present their respective evidence," as alleged
by petitioner, the CA opined that "[t]he filing by [petitioner] of a motion In this petition for review, the issues are the following:
for reconsideration accorded it ample opportunity to dispute the finding
PETITIONER WAS DENIED DUE PROCESS WHEN IT WAS NOT ALLOWED
TO PRESENT EVIDENCE ON THE REASONABLE VALUE OF THE EXPROPRI
ATED PROPERTY BEFORE THE BOARD OF COMMISSIONERS.
THE VALUATION OF JUST COMPENSATION HEREIN WAS NOT BASED F
ROM THE EVIDENCE ON RECORD AND OTHER AUTHENTIC DOCUMENT
S.13
The Court’s Ruling
We find this petition meritorious.
It is beyond question that petitions for review may only raise questions
of law which must be distinctly set forth;14 thus, this Court is mandated
to only consider purely legal questions in this petition, unless called for
by extraordinary circumstances.
In this case, petitioner raises the issue of denial of due process because
it was allegedly deprived of the opportunity to present its evidence on t
he just compensation of properties it wanted to expropriate, and the suf
ficiency of the legal basis or bases for the trial court’s Order on the ma
tter of just compensation. Unquestionably, a petition for review under Ru
le 45 of the Rules of Court is the proper vehicle to raise the issues in q
uestion before this Court.
In view of the significance of the issues raised in this petition, because t
his case involves the expenditure of public funds for a clear public purp
ose, this Court will overlook the fact that petitioner did not file a Motio
n for Reconsideration of the CA November 18, 2002 Decision, and brush
aside this technicality in favor of resolving this case on the merits.
First Issue: Petitioner was deprived of due process when it was not give
n the opportunity to present evidence before the commissioners
It is undisputed that the commissioners failed to afford the parties the o
pportunity to introduce evidence in their favor, conduct hearings before
them, issue notices to the parties to attend hearings, and provide the o
pportunity for the parties to argue their respective causes. It is also undi
sputed that petitioner was not notified of the completion or filing of the
commissioners’ report, and that petitioner was also not given any oppo
rtunity to file its objections to the said report.
A re-examination of the pertinent provisions on expropriation, under Rul
e 67 of the Rules of Court, reveals the following:
SEC. 6. Proceedings by commissioners.—Before entering upon the perfor
mance of their duties, the commissioners shall take and subscribe an oat
h that they will faithfully perform their duties as commissioners, which o
ath shall be filed in court with the other proceedings in the case. Eviden
ce may be introduced by either party before the commissioners who are
authorized to administer oaths on hearings before them, and the com
missioners shall, unless the parties consent to the contrary, after due not
ice to the parties to attend, view and examine the property sought to b
e expropriated and its surroundings, and may measure the same, after
which either party may, by himself or counsel, argue the case. The com
missioners shall assess the consequential damages to the property not ta
ken and deduct from such consequential damages the consequential ben
efits to be derived by the owner from the public use or purpose of the
property taken, the operation of its franchise by the corporation or the
carrying on of the business of the corporation or person taking the pro
perty. But in no case shall the consequential benefits assessed exceed th
e consequential damages assessed, or the owner be deprived of the act
ual value of his property so taken.
SEC. 7. Report by commissioners and judgment thereupon.—The court
may order the commissioners to report when any particular portion of t
he real estate shall have been passed upon by them, and may render j
udgment upon such partial report, and direct the commissioners to proc
eed with their work as to subsequent portions of the property sought to
be expropriated, and may from time to time so deal with such propert
y. The commissioners shall make a full and accurate report to the court
of all their proceedings, and such proceedings shall not be effectual unti
l the court shall have accepted their report and rendered judgment in a
ccordance with their recommendations. Except as otherwise expressly ord
ered by the court, such report shall be filed within sixty (60) days from
the date the commissioners were notified of their appointment, which ti
me may be extended in the discretion of the court. Upon the filing of s
uch report, the clerk of the court shall serve copies thereof on all intere
sted parties, with notice that they are allowed ten (10) days within which
to file objections to the findings of the report, if they so desire.
SEC. 8. Action upon commissioners’ report.—Upon the expiration of the
period of ten (10) days referred to in the preceding section, or even bef
ore the expiration of such period but after all the interested parties hav
e filed their objections to the report or their statement of agreement th
erewith, the court may, after hearing, accept the report and render judg
ment in accordance therewith; or, for cause shown, it may recommit the
same to the commissioners for further report of facts; or it may set asi
de the report and appoint new commissioners; or it may accept the rep
ort 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 t
he exercise of his right of expropriation, and to the defendant just com
pensation for the property so taken.
Based on these provisions, it is clear that in addition to the ocular inspe
ction performed by the two (2) appointed commissioners in this case, th
ey are also required to conduct a hearing or hearings to determine just
compensation; and to provide the parties the following: (1) notice of the
said hearings and the opportunity to attend them; (2) the opportunity to
introduce evidence in their favor during the said hearings; and (3) the
opportunity for the parties to argue their respective causes during the s
aid hearings.
The appointment of commissioners to ascertain just compensation for th
e property sought to be taken is a mandatory requirement in expropriati
on cases. In the instant expropriation case, where the principal issue is t
he determination of just compensation, a hearing before the commission
ers is indispensable to allow the parties to present evidence on the issu
e of just compensation. While it is true that the findings of commissione
rs may be disregarded and the trial court may substitute its own estimat
e of the value, the latter may only do so for valid reasons, that is, wher
e the commissioners have applied illegal principles to the evidence subm
itted to them, where they have disregarded a clear preponderance of ev
idence, or where the amount allowed is either grossly inadequate or exc
essive. Thus, "trial with the aid of the commissioners is a substantial righ
t that may not be done away with capriciously or for no reason at all."1
5
In this case, the fact that no trial or hearing was conducted to afford th
e parties the opportunity to present their own evidence should have im
pelled the trial court to disregard the commissioners’ findings. The absen
ce of such trial or hearing constitutes reversible error on the part of the
trial court because the parties’ (in particular, petitioner’s) right to due p
rocess was violated.
The Court of Appeals erred in ruling that the petitioner was not deprive
d of due process when it was able to file a motion for reconsideration
In ruling that petitioner was not deprived of due process because it was
able to file a Motion for Reconsideration, the CA had this to say:

[Petitioner], further, asserts that "the appointed commissioners failed to c
onduct a hearing to give the parties the opportunity to present their res
pective evidence. According to [petitioner], the Commissioners Valuation
Report was submitted on October 8, 1999 in violation of the appellant’s
right to due process as it was deprived of the opportunity to present ev
idence on the determination of the just compensation."
We are not persuaded.
The filing by [petitioner] of a motion for reconsideration accorded it am
ple opportunity to dispute the findings of the commissioners, so that [p
etitioner] was as fully heard as there might have been hearing actually t
aken place. "Denial of due process cannot be successfully invoked by a
party who has had the opportunity to be heard on his motion for recon
sideration." (Vda. De Chua vs. Court of Appeals, 287 SCRA 33, 50).16
In this respect, we are constrained to disagree with the CA ruling, and t
herefore, set it aside.
While it is true that there is jurisprudence supporting the rule that the fi
ling of a Motion for Reconsideration negates allegations of denial of du
e process, it is equally true that there are very specific rules for expropri
ation cases that require the strict observance of procedural and substanti
ve due process,17 because expropriation cases involve the admittedly pai
nful deprivation of private property for public purposes and the disburse
ment of public funds as just compensation for the private property take
n. Therefore, it is insufficient to hold that a Motion for Reconsideration i
n an expropriation case cures the defect in due process.
As a corollary, the CA’s ruling that "denial of due process cannot be su
ccessfully invoked by a party who has had the opportunity to be heard
on his motion for reconsideration," citing Vda. de Chua v. Court of App
eals, is not applicable to the instant case considering that the cited case
involved a lack of notice of the orders of the trial court in granting let
ters of administration. It was essentially a private dispute and therefore,
no public funds were involved. It is distinct from this expropriation case
where grave consequences attached to the orders of the trial court whe
n it determined the just compensation.
The Court takes this opportunity to elucidate the ruling that the opportu
nity to present evidence incidental to a Motion for Reconsideration will s
uffice if there was no chance to do so during the trial. We find such sit
uation to be the exception and not the general rule. The opportunity to
present evidence during the trial remains a vital requirement in the obs
ervance of due process. The trial is materially and substantially different
from a hearing on a Motion for Reconsideration. At the trial stage, the
party is usually allowed several hearing dates depending on the number
of witnesses who will be presented. At the hearing of said motion, the t
rial court may not be more accommodating with the grant of hearing d
ates even if the movant has many available witnesses. Before the decisio
n is rendered, a trial court has an open mind on the merits of the parti
es’ positions. After the decision has been issued, the trial court’s view of
these positions might be inclined to the side of the winning party and
might treat the Motion for Reconsideration and the evidence adduced d
uring the hearing of said motion perfunctorily and in a cavalier fashion.
The incident might not receive the evaluation and judgment of an impar
tial or neutral judge. In sum, the constitutional guarantee of due process
still requires that a party should be given the fullest and widest opport
unity to adduce evidence during trial, and the availment of a motion for
reconsideration will not satisfy a party’s right to procedural due process
, unless his/her inability to adduce evidence during trial was due to his/
her own fault or negligence.
Second Issue: The legal basis for the determination of just compensation
was insufficient
In this case, it is not disputed that the commissioners recommended tha
t the just compensation be pegged at PhP 10,000.00 per square meter.
The commissioners arrived at the figure in question after their ocular ins
pection of the property, wherein they considered the surrounding structu
res, the property’s location and, allegedly, the prices of the other, contig
uous real properties in the area. Furthermore, based on the commission
ers’ report, the recommended just compensation was determined as of t
he time of the preparation of said report on October 5, 1999.
In B.H. Berkenkotter & Co. v. Court of Appeals, we held, thus:
Just compensation is defined as the full and fair equivalent of the prope
rty sought to be expropriated. The measure is not the taker’s gain but t
he owner’s loss. The compensation, to be just, must be fair not only to
the owner but also to the taker. Even as undervaluation would deprive t
he owner of his property without due process, so too would its overvalu
ation unduly favor him to the prejudice of the public.
To determine just compensation, the trial court should first ascertain the
market value of the property, to which should be added the consequent
ial damages after deducting therefrom the consequential benefits which
may arise from the expropriation. If the consequential benefits exceed th
e consequential damages, these items should be disregarded altogether
as the basic value of the property should be paid in every case.
The market value of the property is the price that may be agreed upon
by parties willing but not compelled to enter into the contract of sale.
Not unlikely, a buyer desperate to acquire a piece of property would ag
ree to pay more, and a seller in urgent need of funds would agree to
accept less, than what it is actually worth. x x x
Among the factors to be considered in arriving at the fair market value
of the property are the cost of acquisition, the current value of like pro
perties, its actual or potential uses, and in the particular case of lands, t
heir size, shape, location, and the tax declarations thereon.
It is settled that just compensation is to be ascertained as of the time o
f the taking, which usually coincides with the commencement of the exp
ropriation proceedings. Where the institution of the action precedes entr
y into the property, the just compensation is to be ascertained as of th
e time of the filing of the complaint.18
We note that in this case, the filing of the complaint for expropriation p
receded the petitioner’s entry into the property.
Therefore, it is clear that in this case, the sole basis for the determinatio
n of just compensation was the commissioners’ ocular inspection of the
properties in question, as gleaned from the commissioners’ October 5, 1
999 report. The trial court’s reliance on the said report is a serious error
considering that the recommended compensation was highly speculative
and had no strong factual moorings. For one, the report did not indica
te the fair market value of the lots occupied by the Orchard Golf and C
ountry Club, Golden City Subdivision, Arcontica Sports Complex, and oth
er business establishments cited. Also, the report did not show how con
venience facilities, public transportation, and the residential and commerc
ial zoning could have added value to the lots being expropriated.
Moreover, the trial court did not amply explain the nature and applicatio
n of the "highest and best use" method to determine the just compensa
tion in expropriation cases. No attempt was made to justify the recomm
ended "just price" in the subject report through other sufficient and relia
ble means such as the holding of a trial or hearing at which the parties
could have had adequate opportunity to adduce their own evidence, th
e testimony of realtors in the area concerned, the fair market value and
tax declaration, actual sales of lots in the vicinity of the lot being expro
priated on or about the date of the filing of the complaint for expropria
tion, the pertinent zonal valuation derived from the Bureau of Internal R
evenue, among others.
More so, the commissioners did not take into account that the Asian fin
ancial crisis in the second semester of 1997 affected the fair market valu
e of the subject lots. Judicial notice can be taken of the fact that after t
he crisis hit the real estate market, there was a downward trend in the
prices of real estate in the country.
Furthermore, the commissioners’ report itself is flawed considering that it
s recommended just compensation was pegged as of October 5, 1999,
or the date when the said report was issued, and not the just compens
ation as of the date of the filing of the complaint for expropriation, or
as of November 27, 1998. The period between the time of the filing of
the complaint (when just compensation should have been determined), a
nd the time when the commissioners’ report recommending the just co
mpensation was issued (or almost one [1] year after the filing of the co
mplaint), may have distorted the correct amount of just compensation.
Clearly, the legal basis for the determination of just compensation in this
case is insufficient as earlier enunciated. This being so, the trial court’s
ruling in this respect should be set aside.
WHEREFORE, the petition is GRANTED. The December 28, 1999 and Mar
ch 23, 2000 Orders of the Imus, Cavite RTC and the November 18, 2002
Decision of the CA are hereby SET ASIDE. This case is remanded to th
e said trial court for the proper determination of just compensation in c
onformity with this Decision. No costs.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice
WE CONCUR:
 Associate Justice

LEONARDO A. QUISUMBING Chairperson

Associate Justice

Chairperson C E R T I F I C A T I O N

ANTONIO T. CARPIO Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairperson’s Attestation, I certify that the conclusions in the above Deci
Associate Justice CONCHITA CARPIO MORALES
sion had been reached in consultation before the case was assigned to
Asscociate Justice the writer of the opinion of the Court’s Division.

DANTE O. TINGA

Associate Justice REYNATO S. PUNO

Chief Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion o
f the Court’s Division.
LEONARDO A. QUISUMBING
Footnotes
1 Rollo, pp. 31-37. The Decision was penned by Associate Justice B.A. Ad
efuin-Dela Cruz, and concurred in by Associate Justices Mercedes Gozo-
Dadole and Mariano C. Del Castillo.
 If personal property is involved, its value shall be provisionally ascertaine
d and the amount to be deposited shall be promptly fixed by the court.
2 Id. at 66-67. The Order was rendered by Executive Judge Lucenito N.
Tagle.

After such deposit is made the court shall order the sheriff or other pro
per officer to forthwith place the plaintiff in possession of the property i
3 Id. at 40-42.
nvolved and promptly submit a report thereof to the court with service
of copies to the parties.

4 Id. at 40-46.

6 Rollo, p. 60.

5 SEC. 2. Entry of plaintiff upon depositing value with authorized govern

ment depositary.––Upon the filing of the complaint or at any time there
7 Id. at 64-65.
after and after due notice to the defendant, the plaintiff shall have the r
ight to take or enter upon the possession of the real property involved
if he deposits with the authorized government depositary an amount eq
8 Id. at 35.
uivalent to the assessed value of the property for purposes of taxation t
o be held by such bank subject to the orders of the court. Such deposi
t shall be in money, unless in lieu thereof the court authorizes the depo 9 Supra note 2.
sit of a certificate of deposit of a government bank of the Republic of t
he Philippines payable on demand to the authorized government deposi
tary. 10 Rollo, pp. 75-76.
11 SEC. 4. Order of expropriation.­­––If the objections to and the defens
es against the right of the plaintiff to expropriate the property are overr
17 Supra note 16.
uled, or when no party appears to defend as required by this Rule, the
court may issue an order of expropriation declaring that the plaintiff has
a lawful right to take the property sought to be expropriated, 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 taking of the
property or the filing of the complaint, whichever came first (emphasis s Today is Monday, October 14, 2019home
upplied).

Republic of the Philippines

12 Supra note 1, at 37.
SUPREME COURT

Manila
13 Rollo, p. 18.

FIRST DIVISION
14 Rules of Court, Rule 45, Sec. 1.

G.R. No. 155407 November 11, 2008

15 Manila Electric Company v. Pineda, G.R. No. 59791, February 13, 1992,
206 SCRA 196, 204.
PHILIPPINE NATIONAL OIL COMPANY, petitioner

vs.
16 Supra note 1, at 37.
LEONILO A. MAGLASANG and OSCAR S. MAGLASANG, respondents.
D E C I S I O N
LEONARDO-DE CASTRO, J.:
Before the Court is a petition for review on certiorari under Rule 45 of
the Rules of Court, assailing the January 23, 2002 Decision1 of the Court
of Appeals (CA) in CA-G.R. CV No. 67341, as reiterated in its Resolution
2 of September 20, 2002, affirming with modification the Joint Judgment
3 dated December 16, 1999 of the Regional Trial Court (RTC) of Ormoc
City, Branch 35, in Civil Case No. 3267-O and Civil Case No. 3273-O.
On October 25, 1994, the Philippine National Oil Company (PNOC) filed
a complaint for eminent domain against respondent Oscar S. Maglasang,
the registered owner of a 63,333-square meter parcel of land identified
as Lot No. 11900 and covered by TCT No. T-4097. The case was docket
ed at the RTC, Ormoc City, Leyte as Civil Case No. 3267-O.
On November 10, 1994, the PNOC filed another expropriation complaint,
this time against respondent Leolino A. Maglasang, owner of the 98,206-
square meter parcel of land identified as Lot No. 11907, covered by OCT
No. P-18869. The case was docketed with the same RTC as Civil Case
No. 3273-O.
The subject parcels of land are located at Lim-ao, Municipality of Kanan
ga, Leyte and to be used by the PNOC in the construction and operatio
n of the 125MW Upper Mahiao Geothermal Power Plant Project.
The RTC issued writs of possession over Lot No. 11907 and Lot No. 1190
0 on December 5, 1994 and December 13, 1994, respectively, after PNO
C posted the required provisional deposit.
On March 21, 1997, upon finality of the orders of condemnation in both
expropriation cases, the trial court appointed three commissioners to asc
ertain and make a recommendation on the just compensation for the co
ndemned lots in accordance with Section 5, Rule 67 of the Rules of Co
urt. Those appointed were: Branch Clerk of Court Atty. Bibiano Reforzad
o, City Assessor Briccio D. Supremo and businessman Augusto T. Pongos
.
Upon conduct of hearing and ocular inspections and reception of the p
arties' position papers and documentary evidence, Atty. Reforzado submi
tted a Commissioners' Report dated February 18, 1999, attaching therewit
h the different valuations recommended by the three commissioners. Cit
y Assessor Supremo recommended the price of P 1,000.00 per square m
eter,4 Clerk of Court Reforzado pegged the value of the lots at P 900.0
0 per square meter.5 In his report, Mr. Pongos arrived at the lowest val
uation of P 400.00 per square meter for the developed area and P 85.0
0 for the undeveloped area. 6
Confronted with the commissioners' varying land valuations, the trial cou
rt made its own determination of the just compensation taking into acco
unt the range of prices recommended in the Commissioners' Report and
documentary evidence presented by the parties. Setting the reckoning
period for the computation of the just compensation at the time of the
filing of the complaints, the trial court pegged the value of the two lots
at P 300.00 per square meter. However, in the same decision, the trial c
ourt further increased said initial valuation to P 700.00 per square meter
to compensate for what it termed as inflation factor and adjustment fa
ctor. Relying on the case of Cosculluela v. Court of Appeals,7 the trial c
ourt ruled:
After examining the data, the Court would like to take the mean positio
n but similar to the ones taken by the Commissioners. For this, therefor
e, the Commissioners' Report is hereby accepted. From the reckoning da
te of 1994, the Court wants to apply a three-year period therefrom to a
scertain the prevailing price. The court has in mind the dictum in Coscul
luela vs. Court of Appeals (164 SCRA 393) which runs as follows: ‘just co
mpensation means not only the correct determination of the amount to
be paid to the owner of the land but also the payment of the land wit
hin a reasonable time from its taking. Without prompt payment, compen
sation cannot be considered just for the property owner is made to suff
er the consequence of being immediately deprived of his land.'
The Court thus believes an inflation factor is to be applied in the comp
utation considering the time that elapsed since late 1994 up to the pres
ent. Also an adjustment factor commonly adopted by appraisers is inclu
ded in the computations.
x x x
Wherefore, after considering all the foregoing, judgment is hereby rende
red fixing the amount of P 700.00 per square meter as just compensatio
n for Lot 11900 under TCT T-4097 in Civil Case No. 3267-0 or the amo
unt of P 44,333,100 and for Lot 11907 under OCT No. P-18869 in Civil C
ase No. 3273-0 or the amount of P 68,744,200 to be paid by the plaint
iff to the respective defendants plus cost of the proceedings.
SO ORDERED.
From the foregoing decision, both parties filed their respective appeals
with the CA.
On January 23, 2002, the CA rendered the herein challenged decision8
which modified the decision of the trial court insofar as it reduced the j
ust compensation for the subject lots from P 700.00 to P 300.00. In arri
ving at such a decision, the CA ratiocinated, thus:
We are of the opinion that the trial court reversibly erred in taking into
account such ‘inflation factor' and ‘adjustment factor' for the determinati
on of just compensation in this case. It has misapplied the ruling in Cos
culluela by substituting such ‘inflation factor' and or ‘adjustment factor' f
or the legally mandated interest in the price to be paid as just compens
ation in expropriation cases.
xxx Nowhere in the said decision may it be inferred that damages for s
uch delay in the payment of just compensation, other than the legal int
erest provided by law, may be granted in addition or considered in com
puting the amount of just compensation such as the ‘inflation factor' ap
plied by the trial court. On the contrary, our Supreme Court has even r
uled that the de facto devaluation of the peso is not a factor in land v
aluation for purposes of expropriation. Therefore, there is absolutely no l
egal basis for the trial court's application of an ‘inflation factor' and ‘adj
ustment factor' in the determination of just compensation in these expro
priation cases. The consistent rule has always been that the owner of th
e property should be compensated only for what he actually loses; it is
not intended that his compensation shall extend beyond his loss or injur
y. And what he loses is only the actual value of the property at the tim
e it is taken. This is the only way that compensation to be paid can be
truly just, i.e., just ‘not only to the individual whose property is taken, b
ut to the public, which is to pay for it.' Hence, the price level for 1994
when the property was taken by plaintiff-appellant should be the proper
valuation for defendant-appellants' properties and not their subsequent i
ncreased value after the passage of time.
x x x

Unable to accept the CA's decision for allegedly being contrary to law a
nd established jurisprudence, PNOC is now before the Court with the fol
WHEREFORE, premises considered, the present appeals are hereby PARTL
lowing grounds in support of its petition:
Y GRANTED. The Joint Judgment appealed from in Civil Case Nos. 3267-
O and 3273-O is hereby AFFIRMED with MODIFICATIONS in that the jus
t compensation for the expropriated properties is hereby ordered to be
A. CONTRARY TO THE RULING OF THE HONORABLE COURT OF APPEA
paid to defendant-appellants in the amount of P 300.00 per square met
LS, THE INITIAL VALUATION OF THE TRIAL COURT OF P 300.00 PER SQ
er, or the total amounts of P18,999,900.00 to defendant-appellant Oscar
UARE METER IS NOT WELL SUPPORTED BY THE EVIDENCE ON RECORD
S. Maglasang for Lot No. 11900 and P 29,461,800.00 to defendant-appell
AS REPRESENTING THE FAIR MARKET VALUE OF THE EXPROPRIATED P
ant Leolino A. Maglasang for Lot No. 11907, with interest at the legal rat
ARCELS OF LAND.
e of 6% per annum from October 25, 1994 and November 10, 1994, res
pectively, until full payment is made.

B. LIKEWISE CONTRARY TO THE RULING OF THE HONORABLE COURT

OF APPEALS, THE SUBJECT PROPERTIES WERE AGRICULTURAL, NOT IND
No pronouncement as to costs.
USTRIAL, PARCELS OF LAND AT THE TIME THEY WERE TAKEN FOR PUB
LIC USE.

SO ORDERED

As we see it, other than the question as to the precise time the fixing
of just compensation should be reckoned, the rest of petitioner's argum
Still unsatisfied, petitioner filed a motion for reconsideration of the foreg
ents dwell solely on questions of fact.
oing decision but its motion was denied by the CA in the resolution of
September 20, 2002.
In expropriation proceedings, the value of the land and its character at t
he time it was taken by the government are the criteria for determining
just compensation.9 This is so because, there are instances when the ex
propriating agency takes over the property prior to the expropriation sui
t, in which situation just compensation shall be determined as of the tim
e of taking.10 The reason for the rule, as pointed out in Republic v. Lar
a,11 is that –
(W)here property is taken ahead of the filing of the condemnation proce
edings, the value thereof may be enchanced by the public purpose for
which it is taken; the entry by the plaintiff upon the property may have
depreciated its value thereby; or, there may have been a natural increas
e in the value of the property from the time the complaint is filed, due
to general economic conditions. The owner of private property should b
e compensated only for what he actually loses; it is not intended that hi
s compensation shall extend beyond his loss or injury. And what he lose
s is only the actual value of his property at the time it is taken. This is
the only way that compensation to be paid can be truly just; i.e., 'just n
ot only to the individual whose property is taken,' 'but to the public, wh
ich is to pay for it.
Here, petitioner insists that contrary to the findings of the two courts be
low, the determination of just compensation should be reckoned prior to
the time of the filing of the complaint for expropriation. According to
petitioner in Civil Case No. 3267-O, petitioner took possession of the lan
d on January 1, 1992 when PNOC leased the same from its administrato
r as evidenced by a Lease Agreement12 for the period of January 1, 199
2 to December 31, 1992. Thus, taking, for purposes of computing just co
mpensation, should have been reckoned from January 1, 1992.
We are not persuaded.
In the context of the State's inherent power of eminent domain, there is
"taking" where the owner is actually deprived or dispossessed of his pr
operty; where there is a practical destruction or a material impairment o
f the value of his property; or when he is deprived of the ordinary use
thereof.13
In Republic v. Castellvi, 14 this Court held that there is a "taking" when
the expropriator enters private property not only for a momentary perio
d but for a more permanent duration, for the purpose of devoting the
property to a public use in such a manner as to oust the owner and d
eprive him of all beneficial enjoyment thereof. Thus, in that case, we rej
ected the State's contention that a lease on a year to year basis can gi
ve rise to a permanent right to occupy, since by express legal provision
For Lot 11907, the time of the taking shall be reckoned on November 10
a lease made for a determinate time, as was the lease of Castellvi's land
, 1994 where the institution of the case precedes entry of the property,
, ceases upon the day fixed, without need of a demand. Neither can it
the just compensation is to be ascertained as of the filing of the compl
be said that the right of eminent domain may be exercised by simply le
aint.15
asing the premises to be expropriated. Where, as here, the owner was c
ompensated and not deprived of the ordinary and beneficial use of his
property by its being diverted to public use, there is no taking within th Accordingly, we quote with approval the trial court's ruling on this point:
e constitutional sense.

Contrary to plaintiff's position, the lease in 1992 should not be construe

In fixing the just compensation reckoned from 1994, the trial court took
the Commissioners' Report into consideration:
II. Time of the Taking.
d as taking in the constitutional sense. What constitutes ‘taking' is when
the property is ‘directly appropriated' and not to ‘consequential injuries r
esulting from the exercise of lawful power' (Tañada and Carreon, Political
Law of the Philippines, Vol. Two, 1962 First Edition, Manila Central Book
Supply, Inc. 1 p.90, p. 92)

In both cases the time of the taking may be reckoned in 1994. For Lot
Following the doctrine in Castellvi, the trial court committed no error wh
11900, on October 24, 1994, the date of the filing of the complaint altho
en it reckoned the time of taking of the subject properties from the dat
ugh the plaintiff took possession of the property in 1991 due to a lease
e of filing of petitioner's complaints for eminent domain.
contract executed between plaintiff and defendant yet the intention to e
xpropriate was manifested only upon the filing of the complaint (NPC vs
. CA and Macapanton Magondata, 254 SCRA 577).
Petitioner would next argue that the subject lots were erroneously classifi
ed as industrial land when in fact they were agricultural land at the tim
e they were taken for expropriation.
At the outset, we reiterate that the Court recognizes the power of a loc
al government to reclassify and convert lands through local ordinance.16
On this score, we quote the findings of the commissioners as contained
in their report on the ocular inspection conducted on October 29, 1997,
and summarized by the CA, to wit:
xxx (1) Lot 11907 was only recently flattened, there are no more trees, n
o more plants except cogon grass and other wild plants; Lot 11900 has
also been flattened in the middle of which are two reinjection pumps, a
nd also found therein are some fruit bearing coconut trees; (2) adjacent
lots are partly forested areas; (3) the trees in both lots had been felled,
including fruit bearing coconut trees, but the number of those felled are
unknown, there being no records available; what remains are cogon gr
ass and other wild plants and the traces of rivulets created by torrential
rains. The terrain is rolling and mountainous although these areas have l
ong been developed and used by the PNOC before the filing of the cas
es, which though not traversed directly by the provincial or national roa
ds, are already accessible by all-weather roads and are adjacent to differ
ent PNOC buildings.
The Commissioners' Report discussed in detail the circumstances which l
ed to the reclassification of subject lots from agricultural to industrial lan
d upon declaration of the city of Ormoc and the town of Kananga that
the areas around the geothermal plants are industrial zones. The schedul
e of values prepared by the municipal assessor which classified the subj
ect lots as industrial property was also appended to the said report sub
mitted to the trial court.
Taking its cue from the Commissioners' Report, the trial court took into
consideration among others the lots' classification as industrial land in fix
ing the just compensation. Throughout the entire proceedings in the trial
court, no objection was proffered by petitioner on this matter.
As it were, the Court cannot but agree with the CA when it ruled that
petitioner's belated objection on appeal of the classification of the subje
ct lots could no longer be entertained. For the same reason the Court r
efuses to consider petitioner's Manifestation17 stating that a property adj
acent to the subject lots was purchased at P 80.00 per square meter an
d urging the Court to peg the value of the subject properties at the sa
me amount. Suffice it to state that issues raised for the first time on ap
peal and not raised timely in the proceedings in the lower court are bar
red by estoppel. Matters, theories or arguments not brought out in the
original proceedings cannot be considered on review or appeal where th
ey are raised for the first time. To consider the alleged facts and argum
ents raised belatedly would amount to trampling on the basic principles
of fair play, justice and due process.18
Finally, on the basis of all its arguments, petitioner asks this Court to set
aside the lower courts' factual finding as to the just compensation for t
he subject expropriated lots.
It must be stressed that only questions of law may be raised in petition
s to review decisions of the CA filed before this Court. The factual findi
ngs of the CA affirming those of the trial court are final and conclusive.
They cannot be reviewed by this Court, save only in the following circu
mstances, which we find absent in the instant case: (1) when the factual
conclusion is a finding grounded entirely on speculations, surmises and c
onjectures; (2) when the inference is manifestly mistaken, absurd or impo
ssible; (3) when there is a grave abuse of discretion; (4) when the judg
ment is based on a misapprehension of facts; (5) when the findings of f
act are conflicting; (6) when the CA went beyond the issues of the case
in making its findings, which are further contrary to the admissions of b
oth the appellant and the appellee; (7) when the CA's findings are contr
ary to those of the trial court; (8) when the conclusions do not cite the
specific evidence on which they are based; (9) when the facts set forth i
n the petition as well as in the petitioner's main and reply briefs are no
t disputed by the respondents; and (10) when the CA's findings of fact,
supposedly premised on the absence of evidence, are contradicted by th
e evidence on record.19
Clearly, petitioner has failed to establish that the present case falls under
any of the exceptions enumerated above. A perusal of the facts and ev
idence presented does not convince this Court to deviate from the findi
ngs of fact of the two courts below. The lower courts properly appreciat
ed the evidence submitted by both parties as regards the nature of the
expropriated lots. These courts have determined that the lots were indus
trial at the time of the taking by petitioner for expropriation.
To recapitulate, in denying the instant petition, the Court relies on a wel
l-established doctrine. Thus, in the present case, the findings of fact of t
he CA, affirming those of the trial court, cannot be disturbed, modified
or reversed by this Court in a petition for review under Rule 45 of the
Rules of Court.
 Associate Justice

WHEREFORE, the petition is DENIED and the assailed decision and resolu
tion of the CA are AFFIRMED.
RENATO C. CORONA

Associate Justice
SO ORDERED.

ADOLFO S. AZCUNA
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
Associate Justice

CERTIFICATION
WE CONCUR:

Pursuant to Section 13, Article VIII of the Constitution, I certify that the c
onclusions in the above Decision had been reached in consultation befor
e the case was assigned to the writer of the opinion of the Court's Divi
REYNATO S. PUNO
sion.
Chief Justice

Chairperson
FIRST DIVISION

ANTONIO T. CARPIO
G.R. No. 170147 January 30, 2009 within or adjacent to the ecozone for consolidation with land for zone d
evelopment purposes.4

REPUBLIC OF THE PHILIPPINES, represented by the PHILIPPINE ECONOM

IC ZONE AUTHORITY (PEZA), Petitioner, On January 15, 1979, then President Ferdinand E. Marcos issued Proclam
ation No. 18115 which reserved certain parcels of land of the public dom
vs.
ain in Lapu Lapu City in favor of petitioner (then Export Processing Zon
SPOUSES AGUSTIN and IMELDA CANCIO, Respondents. e Authority or EPZA) for the establishment of the Mactan Export Process
ing Zone. However, some of the parcels covered by the proclamation, in
cluding that of respondent spouses Agustin and Imelda Cancio, were pri
D E C I S I O N
vate land.

CORONA, J.:
Petitioner eventually laid out the development of the economic zone an
d subsequently leased out respondents’ 47,540 sq. m. lot to an investor
in the economic zone, Maitland Smith Inc. (Maitland).
This petition for review on certiorari under Rule 45 of the Rules of Cour
t seeks to set aside the October 17, 2005 decision1 of the Court of App
eals (CA) in CA-G.R. SP No. 75092.
On May 19, 2001, petitioner offered to purchase respondents’ lot at ₱1,10
0 per sq. m. or ₱52,294,000 for the whole property. The letter containin
g the offer further instructed respondents "to consider and accept, other
Petitioner Philippine Economic Zone Authority is a government-owned an
wise we will initiate expropriation proceedings in the proper court."
d controlled corporation created and existing under and by virtue of RA
7916,2 as amended. It is vested with governmental functions,3 including
the power of eminent domain, thus enabling it to acquire private land
Instead of accepting the offer, respondents filed an unlawful detainer cas
e against Maitland in the Municipal Trial Court of Lapu Lapu City.
Thereafter, petitioner commenced expropriation proceedings for responde
nts’ property with the Regional Trial Court (RTC) of Lapu Lapu City, Bran
ch 54 on August 27, 2001.6 Accordingly, it sought a writ of possession f
or the property for which it was willing to deposit 10% of the offered a
mount or a total of ₱5,229,400 with the Land Bank of the Philippines in
accordance with Administrative Order (A.O.) No. 50.7
Respondents, however, filed a motion to require petitioner to comply wit
h RA 8974,8 specifically Section 4(a) thereof, which requires that, upon t
he filing of the complaint for expropriation, the implementing agency sh
all immediately pay the owner of the property an amount equivalent to
100% of the current zonal valuation thereof for purposes of the issuance
of a writ of possession.
In its January 14, 2002 order (first order), the trial court granted respond
ents’ motion.
Petitioner moved for its reconsideration. It argued that RA 8974 was ina
pplicable as the payment required under the law applied only to instanc
es where the property was still in the owner’s possession and had yet t
o be transferred to the government. It could not be validly invoked whe
n the property was already in the government’s possession, as in this ca
se. It also averred that it should be made to pay only the price of the l
and at the time of its taking. Corollarily, if it was ordered to pay the a
mount required under RA 8974, it would be unjustly penalized for its o
wn improvements to the property.
This time, the RTC agreed with petitioner’s position. On February 26, 20
02 (second order), the court a quo granted petitioner’s motion for recon
sideration.
Respondents filed a motion for reconsideration, contending that petitione
r should make the required payment under the law because RA 8974, w
hich took effect before the commencement of the expropriation case, ap
plied to all actions of such nature regardless of whether the government
agency was already in possession or not. The court a quo issued its Se
ptember 5, 2002 order (third order) which reversed its second order and
reinstated the first one.
Thereafter, petitioner filed a petition for certiorari in the CA, assailing th
e first and third orders of the RTC. The appellate court sustained the RT
C’s ruling.
Hence, this petition.
The issue before us is whether or not RA 8974 is applicable to this case
for purposes of the issuance of the writ of possession.9 It is petitioner’s
stance that it is not. It cited A.O. No. 50 as its legal authority when it
offered to purchase respondents’ property in an amount equivalent to te
n percent (10%) higher than the zonal value thereof.10 Consequently, pet
itioner prayed in its complaint for expropriation11 that it be issued a writ
of possession upon a showing that the amount equivalent to ten perce
nt (10%) of the offered amount has been duly deposited. Respondents,
on the other hand, agree that RA 8974 is the controlling law in this cas
e as the complaint for expropriation was instituted when said law was al
ready in effect.
We deny the petition. RA 8974 governs this case, not A.O. No. 50 as p
etitioner insists.
A perusal of RA 8974 readily reveals that it applies to instances when th
e national government expropriates property for national government inf
rastructure projects.12 Undeniably, the economic zone is a national gover
nment project – a matter undisputed by both parties. Also, the complain
t for expropriation was filed only on August 27, 2001 or almost one yea
r after the law was approved on November 7, 2000. Thus, there is no d
oubt about its applicability to this case.
We note that this expropriation case is still in its initial stages. The trial
court had yet to approve a writ of possession in petitioner’s favor when
the issue of payment of just compensation cropped up. Both parties see
med to have confused the requirement of paying 100% of the current z
onal valuation of the property (as a prerequisite to the issuance of a wri
t of possession) with the payment of just compensation itself.
In its complaint filed in the RTC,13 petitioner prayed that:
a. A writ of possession be issued in favor of plaintiff respecting its poss
ession, control and disposition of the land sought to be expropriated inc
luding the power or authority to demolish, if any, improvements thereon
, upon showing that the amount equivalent to 10% of the offered amou
nt has been duly deposited.
 Clearly, there was a confusion regarding the nature of the amount to b
e paid for the issuance of a writ of possession. In Capitol Steel Corporat
In their motion to require petitioner to comply with RA 8974,14 respond
ion v. PHIVIDEC Industrial Authority,16 we clarified that the payment of t
ents countered that they:
he provisional value as a condition for the issuance of a writ of possessi
on is different from the payment of just compensation for the expropriat

x x x contest PEZA’s proferred value as it is not a just compensation for ed property. While the provisional value is based on the current relevant

the property sought to be expropriated. zonal valuation, just compensation is based on the prevailing fair marke
t value of the property.1avvph!1.zw+

When petitioner moved for reconsideration15 after the RTC granted resp
ondents’ aforementioned motion, it argued that: In that case, we agreed with the CA’s explanation17 that:

The inapplicability of R. A. No. 8974 is further highlighted by the fact th The first refers to the preliminary or provisional determination of the val

at it requires a deposit based on the current zonal valuation of the pro ue of the property. It serves a double-purpose of pre-payment if the pr

perty. To apply such valuation to the instant case would be to violate th operty is fully expropriated, and of an indemnity for damages if the pro

e cardinal principle in eminent domain proceedings that the just compen ceedings are dismissed. It is not a final determination of just compensati

sation for the property should be its fair market value at the time of ta on and may not necessarily be equivalent to the prevailing fair market v

king. The nature and character of the land at the time of its taking is t alue of the property. Of course, it may be a factor to be considered in

he principal criterion to determine just compensation to the landowner ( the determination of just compensation.

National Power Corporation vs. Henson, 300 SCRA 751 [1998]). (Emphasis
supplied)
Just compensation, on the other hand, is the final determination of the f
air market value of the property. It has been described as "the just and
complete equivalent of the loss which the owner of the thing expropriat
ed has to suffer by reason of the expropriation." Market value[s,] has als
o been described in a variety of ways as the "price fixed by the buyer
and seller in the open market in the usual and ordinary course of legal
trade and competition; the price and value of the article established as
shown by sale, public or private, in the ordinary way of business; the fai
r value of the property between one who desires to purchase and one
In establishing the amount of just compensation, the parties may present
evidence relative to the property’s fair market value, as provided under
Section 5 of RA 8974.21 Thus:
Sec. 5. Standards for the Assessment of the Value of the Land Subject o

who desires to sell; the current price; the general or ordinary price for f Expropriation Proceedings or Negotiated Sale. – In order to facilitate th

which property may be sold in that locality." (Emphasis in the original) e determination of just compensation, the court may consider, among ot
her well-established factors, the following relevant standards:

There is therefore no need yet to determine with reasonable certainty th

e final amount of just compensation in resolving the issue of a writ of (a) The classification and use for which the property is suited;

possession.18 In fact, it is the ministerial duty of the trial court to issue t

he writ upon compliance with the requirements of Section 419 of the la
(b) The developmental costs for improving the land;
w. No hearing is required and the court cannot exercise its discretion in
order to arrive at the amount of the provisional value of the property t
o be expropriated as the legislature has already fixed the amount under
(c) The value declared by the owners;
the aforementioned provision of the law.20

(d) The current selling price of similar lands in the vicinity;

It is only after the trial court ascertains the provisional amount to be pai
d that just compensation will be determined.
(e) The reasonable disturbance compensation for the removal and/or de
molition of certain improvements on the land and for the value of impr
Lastly, RA 8974 provides that "the court shall determine the just compen
ovements thereon;
sation to be paid the owner within sixty (60) days from the date of filin
g of the expropriation case."24 In this case, almost eight years have pas
sed since petitioner commenced the expropriation proceedings on Augus
(f) The size, shape or location, tax declaration and zonal valuation of the
t 27, 2001. We, however, hold that it is still feasible to comply with the
land;
spirit of the law by requiring the trial court to make such determination
within sixty (60) days from finality of this decision, in accordance with th

(g) The price of the land as manifested in the ocular findings, oral as w e guidelines laid down in RA 8974 and its implementing rules.25

ell as documentary evidence presented; and

WHEREFORE, the petition is hereby DENIED.

(h) Such facts and events as to enable the affected property owners to
have sufficient funds to acquire similarly-situated lands of approximate ar
eas as those required from them by the government, and thereby rehab
ilitate themselves as early as possible.

This must be so as just compensation should take into account the cons
equential benefits and damages which may arise from the expropriation.
22 Furthermore, it is well to remember that the concept of just compen
sation does not mean fairness to the property owner alone. It must also
be just to the public which ultimately bears the cost of expropriation.23