CITY OF MANILA VS.

CHINESE COMMUNITY OF MANILA, digested

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-30138 May 30, 1972 MUNICIPALITY OF LA CARLOTA, petitioner, vs. THE SPOUSES FELICIDAD BALTAZAR AND VICENTE GAN, respondents. Fortunato E. Tiongson, Jr. & Cesar P. Manalo for petitioner. Cesar J. Nessia for respondents. FERNANDO, J.:p It is not a unique situation that confronts the Court. It had happened in the past, and there is no assurance that it will not occur again in the future, that a municipal corporation did, within the meaning of the constitutional provision on eminent domain, 1 take private property without paying the just compensation, the requisite condemnation proceedings not even having been instituted. This Court, however, in an appropriate suit, has invariably seen to it that there be compliance with what the Constitution requires. In such a case, the crucial question is as of what date the value of the property in question is to be appraised. The answer supplied by Alfonso v. Pasay City 2 is that the owner is entitled to how much it was worth at the time of the taking. Such principle is decisive of the present petition for review of a decision of the Court of Appeals. Since there was a failure on its part to abide by such an authoritative pronouncement, we must reverse. The antecedents of the present litigation were set forth in the appealed decision of the Court of Appeals, dated December 23, 1966 thus: "On appeal Civil No. 7208 of the Court of First Instance of Negros Occidental instituted by Felicidad Baltazar, et al., against the Municipality of La Carlota for compensation of expropriated real property in which after filing of the complaint on 14 January 1964, amended afterwards, answer on 3 December 1964 and trial on the merits on various dates from 21 April 1966 to 11 July 1966, there was promulgated decision disposing: Por tanto, se dicta sentencia en esta causa condenando a la demanda Municipio de La Carlota (hoy Ciudad de La Carlota) a pagar a los demandantes la suma de treinta y tres mil quinientos sesenta pesos (P33,560.00) con sus intereses legales desde la presentacion de la demanda hasta su cumpleto pago, y a pagar las costas del presente juicio. Se ordena a los demandantes para que, previo pago por la demandada de la referida cantidad de 'P33,560.00, otorquen a favor de dicha demandada la escritura de traspaso de los Lotes Nos. 314-B y 314-C-1 de la Medicion Catastral de La Carlota. Asi se ordena. Ciudad de Bacolod, Septiembre 30, 1966. (Sgd.) [Eduardo D. Enriquez] Juez.' p. 36, Amended R.A.; which defendant has taken here on the errors assigned in its brief; ... ." 3 There was, according to such decision, "no debate that plaintiffs are the true and absolute owners of Lot No. 314 of the Cadastral Survey of La Carlota; now as shown in the plan, ...,

the municipal cemetery of La Carlota, adjoins the same on three (3) sides; according to plaintiffs, they came to find out after a survey executed sometime in 1963 that it had encroached without their knowledge and consent upon their property occupying what according to the relocation plan, appear to be Lot 314-B with an area of 1,243 square meters and Lot 314-C-1 with an area of 435 square meters or a total of 1,678 square meters; so that because of it, they asked for compensation from the municipality but this was ignored and what the municipality tried to do was to secure a 'possible donation' from the plaintiffs according to its resolution, ...; therefore plaintiffs filed this case, as has been said, for the value of the de facto expropriation with damages claiming therefor the sum of P40 per square meter; But in its defense, the Municipality of La Carlota contended that there had been previously executed many years back a donation of the property and further that the price of P40 was too much; Well then, plaintiffs, during the trial of the case, having submitted oral and documentary proofs and as well the defendant, trial Judge discarded the claim of pretended donation by plaintiff's predecessor in interest and condemned defendant to pay at P20 per square meter; it is because of this that defendant has come here ... ." 4 As it was viewed by the decision under review, the errors assigned could "be reduced to the simple question of what under the evidence should be the measure" 5 of compensation to which plaintiffs were entitled. In reaching its conclusion, the decision emphasized what it considered to be the "unlawful invasion and occupancy" of land belonging to the spouses Felicidad Baltazar and Vicente Gan, now respondents. Then reference was made to the ruling in Province of Rizal v. Araullo 6 thus: "The property is to be considered in its condition and situation at the time it is taken, and not as enhanced by the purpose for which it was taken. The fundamental doctrine that private property cannot be taken for public use without just compensation requires that the owner shall receive the market value of his property at the time of taking, unaffected by any subsequent change in the condition of the property." 7 Nonetheless, it did not decide to apply such doctrine under th rationalization that what should not be overlooked "is that the reason for the rule is because eminent domain is nothing less than a forced legal sale, therefore, the price to be paid by expropriation must be the price, the just price at the time it legally expropriated, not any enhanced price afterwards; putting it in another way, since the sale is forced upon the owner by expropriator who alleged a right to forcibly buy in eminent domain, where expropriator filed the complaint and gets judgment, the Courts having recognized its right to expropriate, will condemn it to pay the price at the time when its right was recognized to have existed, i.e., the price at the time the complaint was filed, see Rule 67, sec. 4; but an illegal usurpation without benefit of judicial proceedings is different; ..." 8 Under such a view, it was to be expected that what the lower court did would receive the approval of the Court of Appeals. So it turned out, the dispositive portion of the decision being tersely worded, "affirmed with costs." 9 It is from such a judgment that the petition for review was elevated to this Court and given due course by us. As was made clear at the outset, the authoritative doctrine in Alfonso v. Pasay City 10 calls for a reversal. It is the value as of the time of the taking that should have been the measure of the just compensation to which under the Constitution respondent spouses are entitled. 1. It would not be amiss then to inquire further into the Alfonso case. The relevant facts follow: "This is a case where a registered owner of a parcel of land has lost possession way back in 1925 because it was taken by a municipal corporation (Municipality of Pasay) for road purposes. It was never paid for, and so the ownership thereof remained in the name of the registered owner. No annotation on said title was made as to any right, say easement of right of way, which the City of Pasay might have acquired over the land. There is some doubt as to whether Estanislao Alfonso ever made demands for the

payment of his property which was taken away from him without the benefit of either expropriation proceedings or a negotiated sale. However, there is reason to believe that Alfonso has made such demands as any owner of a valuable registered property would do, but as usually the case, perhaps the demands were either ignored or action thereon was postponed and perhaps forgotten with the changes of administration in Pasay that occurred since 1925 up to 1954 when Alfonso finally brought the present action to recover either the possession of the parcel or its value." 11 After noting that as such registered owner, plaintiff Alfonso could bring action to recover possession at any time but that the restoration thereof by the City of Pasay would be "neither convenient nor feasible," 12 it was the conclusion of the Court that the only relief available "is for the City of Pasay to make due compensation, which it could and should have done years ago since 1925." 13 The decisive question, according to Justice Montemayor, speaking for the Court, is the price to be paid. After referring to plaintiff's claim to the effect that he was entitled to the then market value, his opinion continues, "the rule is that to determine due compensation for lands appropriated by the Government, the basis should be the price or value at the time that it was taken from the owner and appropriated by the Government. According to the stipulation of facts, the value of the land in 1925 was Pl.25 per square meter. So, for the area of 719.92 square meters, the value will be said area multiplied by Pl.25. Inasmuch as the City of Pasay has not been paying rent for the use of the land since 1925, thereby causing damages in favor of the owner, said damages may be assessed in the form or legal interest on the price since 1925, up to the time when payment is made by the City of Pasay." 14 Nor does it make any difference just because the use to which the land was devoted in Alfonso was for a road, while here, a cemetery is involved. While in the leading case of City of Manila v. Chinese Community of Manila, 15 it was merely assumed that a cemetery is devoted to a public use, there can be no doubt now as to its being so impressed with such a character. 16 There is no valid reason then to deviate in any whit or form from the Alfonso ruling. As we decided then, so do we now. 2. There is all the more reason to adhere to the Alfonso doctrine considering that when it was enunciated in 1960, this Court did not blaze a new trail but did travel a well-worn path. The Court of Appeals itself noted that as early as 1933 in Province of Rizal v. Araullo, there was the categorical pronouncement "that the owner shall receive the market value of this property at the time of the taking ... ." In 1954 came Republic v. Lara, 17 where there was a reiteration of the view that where the actual taking or occupation did precede the filing of the complaint for exappropriation, it was the former date, not that of the filing of the proceeding that should be the basis for the determination of the amount to be awarded the owner as to the compensation due him. There being an apparent conflict between such a principle and the provision in the Rules of Court 18 as to the time that is decisive in ascertaining compensation due the owner, the then Justice, now Chief Justice, Concepcion, speaking for the Court in Republic v. Philippine National Bank, 19 clarified matters thus: "It is apparent from the foregoing that, when plaintiff takes possession before the institution of the condemnation proceedings, the value should be fixed as of the time of the taking of said possession, not of filing of the complaint, and that the latter should be the basis for the determination of the value, when the taking of the property involved coincides with or is subsequent to, the commencement of the proceedings. Indeed, otherwise, the provision of Rule 69, section 3, directing that compensation 'be determined as of the date of the filing of the complaint,' would never be operative. As intimated in Republic v. Lara ..., said provision contemplates 'normal circumstances,' under which 'the complaint coincides or even precedes the taking of the property by the plaintiff.' In fact, the complaint, normally, precedes, and does not coincide with such taking of the property, for 'upon the filing of the complaint or at any time thereafter' plaintiff can not, over the

defendant's objection and the institution of the proceedings generally indicates an issue between the parties take possession of said property without an order of the court fixing provisionally its value and without depositing the same (Rule 69, section 3, Rules of Court)." 20 It is thus apparent how far the Court of Appeals was not at all mindful of what has so long and so consistently been announced by this Court. 3. Even if the question presented were novel, our conclusion would not be any different. With the expanding role of government, including all its branches and subdivisions, municipal corporations not excepted, reliance on the power of eminent domain far from diminishing will continue to manifest itself. This is an assertion confirmed by history. Outside of the aforesaid City of Manila v. Chinese Community of Manila, 21 there were only four other reported cases dealing with condemnation proceedings by local governments, 22 before World War II. It was not so after liberation. At least fifteen decisions have dealt with exercise of such power by such units. 23 Nor is it to be wondered at. Things that were formerly of private concern have, under this era of fostering social and economic rights, assumed a public aspect. Such being the case, the entry of government, whether national or local, in such field cannot legitimately be resisted. What is more appropriate then than that an attribute inherent in government, whether national or local, of expropriation, like taxation and the police power, would be utilized. This is the more so, considering that it is now a well-settled doctrine that public use can be identified with public purpose, public interest and public convenience. 24 It is of course to be expected that the procedural steps set forth in the Rules of Court will be strictly followed by municipal corporations. In the event however that such is not the case, as did happen in this instance, the Alfonso ruling certainly affords an equitable solution. The expropriation stands, and the owner as is the constitutional intent, is paid what he is entitled to according to the value of the property so devoted to public use as of the date of the taking. From that time, he had been deprived thereof. He had no choice but to submit. He is not, however, to be despoiled of such a right. No less than the fundamental law guarantees just compensation. It would be an injustice to him certainly if from such a period, he could not recover the value of what was lost. There could be on the other hand, injustice to the expropriator if by a delay in the collection, the increment in price would accrue to the owner. The doctrine to which this Court has been committed is intended precisely to avoid either contingency fraught with unfairness. The Court of Appeals, as well as the lower court, should not have decided then the case as they did. There can be no affirmance of what was done. WHEREFORE, the decision of the Court of Appeals of December 23, 1966 is reversed and a new judgment entered awarding respondent-spouses Felicidad Baltazar and Vicente Gan, the amount due them computed as of the time of the taking, with legal interest from said date until the sum is paid in full by petitioner, now La Carlota City. The case is remanded to the Court of First Instance of Negros Occidental for the fixing of such money judgment in accordance with this decision. Without pronouncement as to costs. Reyes, J.B.L., Makalintal, Teehankee, Makasiar and Antonio, JJ., concur. Zaldivar and Castro, JJ., reserve their vote. Concepcion, C.J., is on leave.

Posted by Pius Morados on November 7, 2011 40 Phil. 349 (Constitutional Law Eminent Domain) FACTS: Plaintiff sought to expropriate a part of a private cemetery devoted for public use to make an extension of Rizal Avenue. Defendants contend that expropriation is not necessary because it will disturb the remains of the dead. Moreover, adjoining and adjacent lots were offered to the city free of charge for the planned public improvement. ISSUE: Whether or not a private property devoted for public use can still be expropriated. HELD: Yes, private property devoted for public use is still subject to expropriation, provided this is done directly by the national legislature or under a specific grant of authority to the delegate. In addition, there must be a necessity for the expropriation. In the case at bar, evidence shows that there is no proof of the need of converting the cemetery.

Case: Objects of Expropriation

RP. v. PLDT, 26 SCRA 620 (1969)

REPUBLIC OF THE PHILIPPINES VS. PLDT, digested

Posted by Pius Morados on November 8, 2011

26 SCRA 620 (1969) (Constitutional Law Eminent Domain, Expropriation, Just Compensation) FACTS: Public petitioner commenced a suit against private respondent praying for the right of the Bureau of Telecommunications to demand interconnection between the Government Telephone System and that of PLDT, so that the Government Telephone System could make use of the lines and facilities of the PLDT. Private respondent contends that it cannot be compelled to enter into a contract where no agreement is had between them. ISSUE: Whether or not interconnection between PLDT and the Government Telephone System can be a valid object for expropriation. HELD: Yes, in the exercise of the sovereign power of eminent domain, the Republic may require the telephone company to permit interconnection as the needs of the government service may require, subject to the payment of just compensation. The use of lines and services to allow inter-service connection between the both telephone systems, through expropriation can be a subject to an easement of right of way.

Full Text: Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-18841 January 27, 1969 REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, defendant-appellant. Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A. Torres and Solicitor Camilo D. Quiason for plaintiff-appellant.

Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant-appellant. REYES, J.B.L., J.: Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant from the dismissal, after hearing, by the Court of First Instance of Manila, in its Civil Case No. 35805, of their respective complaint and counterclaims, but making permanent a preliminary mandatory injunction theretofore issued against the defendant on the interconnection of telephone facilities owned and operated by said parties. The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers through its branches and instrumentalities, one of which is the Bureau of Telecommunications. That office was created on 1 July 1947, under Executive Order No. 94, with the following powers and duties, in addition to certain powers and duties formerly vested in the Director of Posts: 1awphil.t SEC. 79. The Bureau of Telecommunications shall exercise the following powers and duties: (a) To operate and maintain existing wire-telegraph and radio-telegraph offices, stations, and facilities, and those to be established to restore the pre-war telecommunication service under the Bureau of Posts, as well as such additional offices or stations as may hereafter be established to provide telecommunication service in places requiring such service; (b) To investigate, consolidate, negotiate for, operate and maintain wire-telephone or radio telephone communication service throughout the Philippines by utilizing such existing facilities in cities, towns, and provinces as may be found feasible and under such terms and conditions or arrangements with the present owners or operators thereof as may be agreed upon to the satisfaction of all concerned; (c) To prescribe, subject to approval by the Department Head, equitable rates of charges for messages handled by the system and/or for time calls and other services that may be rendered by said system; (d) To establish and maintain coastal stations to serve ships at sea or aircrafts and, when public interest so requires, to engage in the international telecommunication service in agreement with other countries desiring to establish such service with the Republic of the Philippines; and (e) To abide by all existing rules and regulations prescribed by the International Telecommunication Convention relative to the accounting, disposition and exchange of messages handled in the international service, and those that may hereafter be promulgated by said convention and adhered to by the Government of the Republic of the Philippines. 1 The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a public service corporation holding a legislative franchise, Act 3426, as amended by Commonwealth Act 407, to install, operate and maintain a telephone system throughout the Philippines and to carry on the business of electrical transmission of messages within the Philippines and between the Philippines and the telephone systems of other countries. 2 The RCA Communications, Inc., (which is not a party to the present case but has contractual relations with the parties) is an American corporation authorized to transact business in the Philippines and is the grantee, by assignment, of a legislative franchise to operate a domestic station for the reception and transmission of long distance wireless messages (Act 2178) and to operate broadcasting and radio-telephone and radiotelegraphic communications services (Act 3180). 3 Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered into an agreement whereby telephone messages, coming from the United States and received by RCA's domestic station, could automatically be transferred to the lines of PLDT; and vice-versa, for calls

collected by the PLDT for transmission from the Philippines to the United States. The contracting parties agreed to divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was amended in 1941 to 30% for PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis. The arrangement was later extended to radio-telephone messages to and from European and Asiatic countries. Their contract contained a stipulation that either party could terminate it on a 24-month notice to the other. 4 On 2 February 1956, PLDT gave notice to RCA to terminate their contract on 2 February 1958. 5 Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government Telephone System by utilizing its own appropriation and equipment and by renting trunk lines of the PLDT to enable government offices to call private parties. 6 Its application for the use of these trunk lines was in the usual form of applications for telephone service, containing a statement, above the signature of the applicant, that the latter will abide by the rules and regulations of the PLDT which are on file with the Public Service Commission. 7 One of the many rules prohibits the public use of the service furnished the telephone subscriber for his private use. 8 The Bureau has extended its services to the general public since 1948, 9 using the same trunk lines owned by, and rented from, the PLDT, and prescribing its (the Bureau's) own schedule of rates. 10 Through these trunk lines, a Government Telephone System (GTS) subscriber could make a call to a PLDT subscriber in the same way that the latter could make a call to the former. On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered into an agreement with RCA Communications, Inc., for a joint overseas telephone service whereby the Bureau would convey radio-telephone overseas calls received by RCA's station to and from local residents. 11 Actually, they inaugurated this joint operation on 2 February 1958, under a "provisional" agreement. 12 On 7 April 1958, the defendant Philippine Long Distance Telephone Company, complained to the Bureau of Telecommunications that said bureau was violating the conditions under which their Private Branch Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the rented trunk lines, for the Bureau had used the trunk lines not only for the use of government offices but even to serve private persons or the general public, in competition with the business of the PLDT; and gave notice that if said violations were not stopped by midnight of 12 April 1958, the PLDT would sever the telephone connections. 13 When the PLDT received no reply, it disconnected the trunk lines being rented by the Bureau at midnight on 12 April 1958. 14 The result was the isolation of the Philippines, on telephone services, from the rest of the world, except the United States. 15 At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for telephone connection. 16 The PLDT was also maintaining 60,000 telephones and had also 20,000 pending applications. 17 Through the years, neither of them has been able to fill up the demand for telephone service. The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958 that both enter into an interconnecting agreement, with the government paying (on a call basis) for all calls passing through the interconnecting facilities from the Government Telephone System to the PLDT. 18 The PLDT replied that it was willing to enter into an agreement on overseas telephone service to Europe and Asian countries provided that the Bureau would submit to the jurisdiction and regulations of the Public Service Commission and in consideration of 37 1/2% of the gross revenues. 19 In its memorandum in lieu of oral argument in this Court dated 9 February 1964, on page 8, the defendant reduced its offer to 33 1/3 % (1/3) as its share in the overseas telephone service. The proposals were not accepted by either party. On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine Long

Distance Telephone Company, in the Court of First Instance of Manila (Civil Case No. 35805), praying in its complaint for judgment commanding the PLDT to execute a contract with plaintiff, through the Bureau, for the use of the facilities of defendant's telephone system throughout the Philippines under such terms and conditions as the court might consider reasonable, and for a writ of preliminary injunction against the defendant company to restrain the severance of the existing telephone connections and/or restore those severed. Acting on the application of the plaintiff, and on the ground that the severance of telephone connections by the defendant company would isolate the Philippines from other countries, the court a quo, on 14 April 1958, issued an order for the defendant: (1) to forthwith reconnect and restore the seventy-eight (78) trunk lines that it has disconnected between the facilities of the Government Telephone System, including its overseas telephone services, and the facilities of defendant; (2) to refrain from carrying into effect its threat to sever the existing telephone communication between the Bureau of Telecommunications and defendant, and not to make connection over its telephone system of telephone calls coming to the Philippines from foreign countries through the said Bureau's telephone facilities and the radio facilities of RCA Communications, Inc.; and (3) to accept and connect through its telephone system all such telephone calls coming to the Philippines from foreign countries until further order of this Court. On 28 April 1958, the defendant company filed its answer, with counterclaims. It denied any obligation on its part to execute a contrary of services with the Bureau of Telecommunications; contested the jurisdiction of the Court of First Instance to compel it to enter into interconnecting agreements, and averred that it was justified to disconnect the trunk lines heretofore leased to the Bureau of Telecommunications under the existing agreement because its facilities were being used in fraud of its rights. PLDT further claimed that the Bureau was engaging in commercial telephone operations in excess of authority, in competition with, and to the prejudice of, the PLDT, using defendants own telephone poles, without proper accounting of revenues. After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an agreement with the Bureau because the parties were not in agreement; that under Executive Order 94, establishing the Bureau of Telecommunications, said Bureau was not limited to servicing government offices alone, nor was there any in the contract of lease of the trunk lines, since the PLDT knew, or ought to have known, at the time that their use by the Bureau was to be public throughout the Islands, hence the Bureau was neither guilty of fraud, abuse, or misuse of the poles of the PLDT; and, in view of serious public prejudice that would result from the disconnection of the trunk lines, declared the preliminary injunction permanent, although it dismissed both the complaint and the counterclaims. Both parties appealed. Taking up first the appeal of the Republic, the latter complains of the action of the trial court in dismissing the part of its complaint seeking to compel the defendant to enter into an interconnecting contract with it, because the parties could not agree on the terms and conditions of the interconnection, and of its refusal to fix the terms and conditions therefor. We agree with the court below that parties can not be coerced to enter into a contract where no agreement is had between them as to the principal terms and conditions of the contract. Freedom to stipulate such terms and conditions is of the essence of our contractual system, and by express provision of the statute, a contract may be annulled if tainted by violence, intimidation, or undue influence (Articles 1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has apparently overlooked that while the Republic may not compel the PLDT to celebrate a contract with it, the Republic may, in the exercise of the sovereign power of eminent domain, require the telephone company to permit interconnection of the government telephone system and that of the PLDT, as the needs of the government service may require, subject to the payment of just

compensation to be determined by the court. Nominally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why the said power may not be availed of to impose only a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of right of way. The use of the PLDT's lines and services to allow inter-service connection between both telephone systems is not much different. In either case private property is subjected to a burden for public use and benefit. If, under section 6, Article XIII, of the Constitution, the State may, in the interest of national welfare, transfer utilities to public ownership upon payment of just compensation, there is no reason why the State may not require a public utility to render services in the general interest, provided just compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service would be the users of both telephone systems, so that the condemnation would be for public use. The Bureau of Telecommunications, under section 78 (b) of Executive Order No. 94, may operate and maintain wire telephone or radio telephone communications throughout the Philippines by utilizing existing facilities in cities, towns, and provinces under such terms and conditions or arrangement with present owners or operators as may be agreed upon to the satisfaction of all concerned; but there is nothing in this section that would exclude resort to condemnation proceedings where unreasonable or unjust terms and conditions are exacted, to the extent of crippling or seriously hampering the operations of said Bureau. A perusal of the complaint shows that the Republic's cause of action is predicated upon the radio telephonic isolation of the Bureau's facilities from the outside world if the severance of interconnection were to be carried out by the PLDT, thereby preventing the Bureau of Telecommunications from properly discharging its functions, to the prejudice of the general public. Save for the prayer to compel the PLDT to enter into a contract (and the prayer is no essential part of the pleading), the averments make out a case for compulsory rendering of inter-connecting services by the telephone company upon such terms and conditions as the court may determine to be just. And since the lower court found that both parties "are practically at one that defendant (PLDT) is entitled to reasonable compensation from plaintiff for the reasonable use of the former's telephone facilities" (Decision, Record on Appeal, page 224), the lower court should have proceeded to treat the case as one of condemnation of such services independently of contract and proceeded to determine the just and reasonable compensation for the same, instead of dismissing the petition. This view we have taken of the true nature of the Republic's petition necessarily results in overruling the plea of defendant-appellant PLDT that the court of first instance had no jurisdiction to entertain the petition and that the proper forum for the action was the Public Service Commission. That body, under the law, has no authority to pass upon actions for the taking of private property under the sovereign right of eminent domain. Furthermore, while the defendant telephone company is a public utility corporation whose franchise, equipment and other properties are under the jurisdiction, supervision and control of the Public Service Commission (Sec. 13, Public Service Act), yet the plaintiff's telecommunications network is a public service owned by the Republic and operated by an instrumentality of the National Government, hence exempt, under Section 14 of the Public Service Act, from such jurisdiction, supervision and control. The Bureau of Telecommunications was created in pursuance of a state policy reorganizing the government offices to meet the exigencies attendant upon the establishment of the free and independent Government of the Republic of the Philippines, and for the purpose of promoting simplicity, economy and efficiency in its operation (Section 1, Republic Act No. 51) and the determination of state policy is not vested in the Commission (Utilities Com. vs. Bartonville Bus Line, 290 Ill. 574; 124 N.E. 373). Defendant PLDT, as appellant, contends that the court below was in error in not holding that

the Bureau of Telecommunications was not empowered to engage in commercial telephone business, and in ruling that said defendant was not justified in disconnecting the telephone trunk lines it had previously leased to the Bureau. We find that the court a quo ruled correctly in rejecting both assertions. Executive Order No. 94, Series of 1947, reorganizing the Bureau of Telecommunications, expressly empowered the latter in its Section 79, subsection (b), to "negotiate for, operate and maintain wire telephone or radio telephone communication service throughout the Philippines", and, in subsection (c), "to prescribe, subject to approval by the Department Head, equitable rates of charges for messages handled by the system and/or for time calls and other services that may be rendered by the system". Nothing in these provisions limits the Bureau to non-commercial activities or prevents it from serving the general public. It may be that in its original prospectuses the Bureau officials had stated that the service would be limited to government offices: but such limitations could not block future expansion of the system, as authorized by the terms of the Executive Order, nor could the officials of the Bureau bind the Government not to engage in services that are authorized by law. It is a well-known rule that erroneous application and enforcement of the law by public officers do not block subsequent correct application of the statute (PLDT vs. Collector of Internal Revenue, 90 Phil. 676), and that the Government is never estopped by mistake or error on the part of its agents (Pineda vs. Court of First Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining Co. vs. Pineda, 98 Phil. 711, 724). The theses that the Bureau's commercial services constituted unfair competition, and that the Bureau was guilty of fraud and abuse under its contract, are, likewise, untenable. First, the competition is merely hypothetical, the demand for telephone service being very much more than the supposed competitors can supply. As previously noted, the PLDT had 20,000 pending applications at the time, and the Bureau had another 5,000. The telephone company's inability to meet the demands for service are notorious even now. Second, the charter of the defendant expressly provides: SEC. 14. The rights herein granted shall not be exclusive, and the rights and power to grant to any corporation, association or person other than the grantee franchise for the telephone or electrical transmission of message or signals shall not be impaired or affected by the granting of this franchise: (Act 3436) And third, as the trial court correctly stated, "when the Bureau of Telecommunications subscribed to the trunk lines, defendant knew or should have known that their use by the subscriber was more or less public and all embracing in nature, that is, throughout the Philippines, if not abroad" (Decision, Record on Appeal, page 216). The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff had extended the use of the trunk lines to commercial purposes, continuously since 1948, implies assent by the defendant to such extended use. Since this relationship has been maintained for a long time and the public has patronized both telephone systems, and their interconnection is to the public convenience, it is too late for the defendant to claim misuse of its facilities, and it is not now at liberty to unilaterally sever the physical connection of the trunk lines. ..., but there is high authority for the position that, when such physical connection has been voluntarily made, under a fair and workable arrangement and guaranteed by contract and the continuous line has come to be patronized and established as a great public convenience, such connection shall not in breach of the agreement be severed by one of the parties. In that case, the public is held to have such an interest in the arrangement that its rights must receive due consideration. This position finds approval in State ex rel. vs. Cadwaller, 172 Ind. 619, 636, 87 N.E. 650, and is stated in the elaborate and learned opinion of Chief Justice Myers as follows: "Such physical connection cannot be required as of right, but if such connection is voluntarily made by contract, as is here alleged to be the case, so

that the public acquires an interest in its continuance, the act of the parties in making such connection is equivalent to a declaration of a purpose to waive the primary right of independence, and it imposes upon the property such a public status that it may not be disregarded" citing Mahan v. Mich. Tel. Co., 132 Mich. 242, 93 N.W. 629, and the reasons upon which it is in part made to rest are referred to in the same opinion, as follows: "Where private property is by the consent of the owner invested with a public interest or privilege for the benefit of the public, the owner can no longer deal with it as private property only, but must hold it subject to the right of the public in the exercise of that public interest or privilege conferred for their benefit." Allnut v. Inglis (1810) 12 East, 527. The doctrine of this early case is the acknowledged law. (Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 74 S.E. 636, 638). It is clear that the main reason for the objection of the PLDT lies in the fact that said appellant did not expect that the Bureau's telephone system would expand with such rapidity as it has done; but this expansion is no ground for the discontinuance of the service agreed upon. The last issue urged by the PLDT as appellant is its right to compensation for the use of its poles for bearing telephone wires of the Bureau of Telecommunications. Admitting that section 19 of the PLDT charter reserves to the Government the privilege without compensation of using the poles of the grantee to attach one ten-pin cross-arm, and to install, maintain and operate wires of its telegraph system thereon; Provided, however, That the Bureau of Posts shall have the right to place additional crossarms and wires on the poles of the grantee by paying a compensation, the rate of which is to be agreed upon by the Director of Posts and the grantee; the defendant counterclaimed for P8,772.00 for the use of its poles by the plaintiff, contending that what was allowed free use, under the aforequoted provision, was one ten-pin crossarm attachment and only for plaintiff's telegraph system, not for its telephone system; that said section could not refer to the plaintiff's telephone system, because it did not have such telephone system when defendant acquired its franchise. The implication of the argument is that plaintiff has to pay for the use of defendant's poles if such use is for plaintiff's telephone system and has to pay also if it attaches more than one (1) ten-pin cross-arm for telegraphic purposes. As there is no proof that the telephone wires strain the poles of the PLDT more than the telegraph wires, nor that they cause more damage than the wires of the telegraph system, or that the Government has attached to the poles more than one ten-pin cross-arm as permitted by the PLDT charter, we see no point in this assignment of error. So long as the burden to be borne by the PLDT poles is not increased, we see no reason why the reservation in favor of the telegraph wires of the government should not be extended to its telephone lines, any time that the government decided to engage also in this kind of communication. In the ultimate analysis, the true objection of the PLDT to continue the link between its network and that of the Government is that the latter competes "parasitically" (sic) with its own telephone services. Considering, however, that the PLDT franchise is non-exclusive; that it is wellknown that defendant PLDT is unable to adequately cope with the current demands for telephone service, as shown by the number of pending applications therefor; and that the PLDT's right to just compensation for the services rendered to the Government telephone system and its users is herein recognized and preserved, the objections of defendant-appellant are without merit. To uphold the PLDT's contention is to subordinate the needs of the general public to the right of the PLDT to derive profit from the future expansion of its services under its non-exclusive franchise. WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in so far as it dismisses the petition of the Republic of the Philippines to compel the Philippine Long Distance Telephone Company to continue servicing the Government telephone system upon such terms, and for a compensation, that the trial court may determine to be just,

including the period elapsed from the filing of the original complaint or petition. And for this purpose, the records are ordered returned to the court of origin for further hearings and other proceedings not inconsistent with this opinion. No costs. Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur. Case: Where Expropriation Suit is Filed Barangay San Roque v. Heirs of Pastor, GR 138896 June 20, 2000

Brgy. San Roque, Talisay, Cebu vs Heirs of Franco Pastor

On June 24, 2011 Municipal Corporation Eminent Domain Expropriation BP 129 In 1997, Brgy. San Roque filed for an expropriation suit before the MTC of Talisay. The MTC denied the suit because apparently under BP 129, MTCs do not have jurisdiction over expropriation cases as it is the RTCs that are lodged with the power to try such cases. So Brgy. San Roque filed it before RTC Talisay but then Judge Pastor denied the suit arguing that the action for eminent domain affected title to real property; hence, the value of the property to be expropriated would determine whether the case should be filed before the MTC or the RTC. Concluding that the action should have been filed before the MTC since the value of the subject property was less than P20,000. ISSUE: Whether or not the RTC should take cognizance of the expropriation case. HELD: Yes. Under Section 19 (1) of BP 129, which provides that RTCs shall exercise exclusive original jurisdiction over all civil actions in which the subject of the litigation is incapable of pecuniary estimation; . . . . . The present action involves the exercise of the right to eminent domain, and that such right is incapable of pecuniary estimation. What are the two phases of expropriation cases? The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint. An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter as the Rules expressly state, in the proceedings before the Trial Court, no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard. The second phase of the eminent domain action is concerned with the determination by the court of

the just compensation for the property sought to be taken. This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. . . . It should be stressed that the primary consideration in an expropriation suit is whether the government or any of its instrumentalities has complied with the requisites for the taking of private property. Hence, the courts determine the authority of the government entity, the necessity of the expropriation, and the observance of due process. In the main, the subject of an expropriation suit is the governments exercise of eminent domain, a matter that is incapable of pecuniary estimation.

Barangay San Roque vs. Heirs of Pastor, GR 138896 June 20, 2000
Facts: In 1997, Brgy. San Roque filed for an expropriation suit before the MTC of Talisay. The MTC denied the suit because apparently under BP 129, MTCs do not have jurisdiction over expropriation cases as it is the RTCs that are lodged with the power to try such cases. So Brgy. San Roque filed it before RTC Talisay but then Judge Pastor denied the suit arguing that the action for eminent domain affected title to real property; hence, the value of the property to be expropriated would determine whether the case should be filed before the MTC or the RTC. Concluding that the action should have been filed before the MTC since the value of the subject property was less than P20,ew000. ISSUE: Whether or not the RTC should take cognizance of the expropriation case. HELD: Yes. Under Section 19 (1) of BP 129, which provides that RTCs shall exercise exclusive original jurisdiction over all civil actions in which the subject of the litigation is incapable of pecuniary estimation; The present action involves the exercise of the right to eminent domain, and that such right is incapable of pecuniary estimation. What are the two phases of expropriation cases? The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint. An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter as the Rules expressly state, in the proceedings before the Trial Court, no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard.

The second phase of the eminent domain action is concerned with the determination by the court of the just compensation for the property sought to be taken. This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. It should be stressed that the primary consideration in an expropriation suit is whether the government or any of its instrumentalities has complied with the requisites for the taking of private property. Hence, the courts determine the authority of the government entity, the necessity of the expropriation, and the observance of due process. In the main, the subject of an expropriation suit is the governments exercise of eminent domain, a matter that is incapable of pecuniary estimation. Where expropriation suit is filed?

Full Text: Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 138896 June 20, 2000 BARANGAY SAN ROQUE, TALISAY, CEBU, petitioner, vs. Heirs of FRANCISCO PASTOR namely: EUGENIO SYLIANCO, TEODORO SYLIANCO, TEODORO SYLIANCO, ISABEL SYLIANCO, EUGENIA S. ONG, LAWRENCE SYLIANCO, LAWSON SYLIANCO, LAWINA S. NOTARIO, LEONARDO SYLIANCO JR. and LAWFORD SYLIANCO, respondents. PANGANIBAN, J.: An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within the jurisdiction of the regional trial courts, regardless of the value of the subject property. The Case Before us is a Petition for Review on Certiorari assailing the March 29, 1999 Order of the Regional Trial Court (RTC) of Cebu City (Branch 58) in Civil Case No. CEB-21978, in which it dismissed a Complaint for eminent domain. It ruled as follows: Premises considered, the motion to dismiss is hereby granted on the ground that this Court has no jurisdiction over the case. Accordingly, the Orders dated February 19, 1999 and February 26, 1999, as well as the Writ of Possession issued by virtue of the latter Order are hereby recalled for being without force and effect. Petitioner also challenges the May 14, 1999 Order of the RTC denying reconsideration.

The Facts Petitioner filed before the Municipal Trial Court (MTC) of Talisay, Cebu (Branch 1) a Complaint to expropriate a property of the respondents. In an Order dated April 8, 1997, the MTC dismissed the Complaint on the ground of lack of jurisdiction. It reasoned that [e]minent domain is an exercise of the power to take private property for public use after payment of just compensation. In an action for eminent domain, therefore, the principal cause of action is the exercise of such power or right. The fact that the action also involves real property is merely incidental. An action for eminent domain is therefore within the exclusive original jurisdiction of the Regional Trial Court and not with this Court. Assailed RTC Ruling The RTC also dismissed the Complaint when filed before it, holding that an action for eminent domain affected title to real property; hence, the value of the property to be expropriated would determine whether the case should be filed before the MTC or the RTC. Concluding that the action should have been filed before the MTC since the value of the subject property was less than P20,000, the RTC ratiocinated in this wise: The instant action is for eminent domain. It appears from the current Tax Declaration of the land involved that its assessed value is only One Thousand Seven Hundred Forty Pesos (P1,740.00). Pursuant to Section 3, paragraph (3), of Republic Act No. 7691, all civil actions involving title to, or possession of, real property with an assessed value of less than P20,000.00 are within the exclusive original jurisdiction of the Municipal Trial Courts. In the case at bar, it is within the exclusive original jurisdiction of the Municipal Trial Court of Talisay, Cebu, where the property involved is located. The instant action for eminent domain or condemnation of real property is a real action affecting title to or possession of real property, hence, it is the assessed value of the property involved which determines the jurisdiction of the court. That the right of eminent domain or condemnation of real, property is included in a real action affecting title to or possession of real property, is pronounced by retired Justice Jose Y. Feria, thus, Real actions are those affecting title to or possession of real property. These include partition or condemnation of, or foreclosures of mortgage on, real property. . . . Aggrieved, petitioner appealed directly to this Court, raising a pure question of law. In a Resolution dated July 28, 1999, the Court denied the Petition for Review for being posted out of time on July 2, 1999, the due date being June 2, 1999, as the motion for extension of time to file petition was denied in the resolution of July 14, 1999. In a subsequent Resolution dated October 6, 1999, the Court reinstated the Petition. Issue In its Memorandum, petitioner submits this sole issue for the consideration of this Court: Which court, MTC or RTC, has jurisdiction over cases for eminent domain or expropriation where the assessed value of the subject property is below Twenty Thousand (P20,000.00) Pesos? This Courts Ruling The Petition is meritorious. Main Issue: Jurisdiction over an Expropriation Suit In support of its appeal, petitioner cites Section 19 (1) of BP 129, which provides that RTCs shall exercise exclusive original jurisdiction over all civil actions in which the subject of the litigation is incapable of pecuniary estimation; . . . . . It argues that the present action involves the exercise of the right to eminent domain, and that such right is incapable of pecuniary estimation.

Respondents, on the other hand, contend that the Complaint for Eminent Domain affects the title to or possession of real property. Thus, they argue that the case should have been brought before the MTC, pursuant to BP 129 as amended by Section 3 (3) of RA 7691. This law provides that MTCs shall have exclusive original jurisdiction over all civil actions that involve title to or possession of real property, the assessed value of which does not exceed twenty thousand pesos or, in civil actions in Metro Manila, fifty thousand pesos exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses and costs. We agree with the petitioner that an expropriation suit is incapable of pecuniary estimation. The test to determine whether it is so was laid down by the Court in this wise: A review of the jurisprudence of this Court indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought, like in suits to have the defendant perform his part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to foreclose a mortgage, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance. The rationale of the rule is plainly that the second class cases, besides the determination of damages, demand an inquiry into other factors which the law has deemed to be more within the competence of courts of first instance, which were the lowest courts of record at the time that the first organic laws of the Judiciary were enacted allocating jurisdiction (Act 136 of the Philippine Commission of June 11, 1901). In the present case, an expropriation suit does not involve the recovery of a sum of money. Rather, it deals with the exercise by the government of its authority and right to take private property for public use. In National Power Corporation v. Jocson, the Court ruled that expropriation proceedings have two phases: The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint. An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter as the Rules expressly state, in the proceedings before the Trial Court, no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard. The second phase of the eminent domain action is concerned with the determination by the court of the just compensation for the property sought to be taken. This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. . . . It should be stressed that the primary consideration in an expropriation suit is whether the government or any of its instrumentalities has complied with the requisites for the taking of private property. Hence, the courts determine the authority of the government entity, the necessity of the expropriation, and the observance of due process. In the main, the subject of an expropriation suit is the governments exercise of eminent domain, a matter that is incapable of pecuniary estimation.

True, the value of the property to be expropriated is estimated in monetary terms, for the court is duty-bound to determine the just compensation for it. This, however, is merely incidental to the expropriation suit. Indeed, that amount is determined only after the court is satisfied with the propriety of the expropriation. Verily, the Court held in Republic of the Philippines v. Zurbano that condemnation proceedings are within the jurisdiction of Courts of First Instance, the forerunners of the regional trial courts. The said case was decided during the effectivity of the Judiciary Act of 1948 which, like BP 129 in respect to RTCs, provided that courts of first instance had original jurisdiction over all civil actions in which the subject of the litigation is not capable of pecuniary estimation. The 1997 amendments to the Rules of Court were not intended to change these jurisprudential precedents. We are not persuaded by respondents argument that the present action involves the title to or possession of a parcel of land. They cite the observation of retired Justice Jose Y. Feria, an eminent authority in remedial law, that condemnation or expropriation proceedings are examples of real actions that affect the title to or possession of a parcel of land. Their reliance is misplaced. Justice Feria sought merely to distinguish between real and personal actions. His discussion on this point pertained to the nature of actions, not to the jurisdiction of courts. In fact, in his pre-bar lectures, he emphasizes that jurisdiction over eminent domain cases is still within the RTCs under the 1997 Rules. To emphasize, the question in the present suit is whether the government may expropriate private property under the given set of circumstances. The government does not dispute respondents title to or possession of the same. Indeed, it is not a question of who has a better title or right, for the government does not even claim that it has a title to the property. It merely asserts its inherent sovereign power to appropriate and control individual property for the public benefit, as the public necessity, convenience or welfare may demand. WHEREFORE, the Petition is hereby GRANTED and the assailed Orders SET ASIDE. The Regional Trial Court is directed to HEAR the case. No costs. Case: Taking Definition and scope Requisites of Taking Republic vs. Castelvi, 58 SCRA 336 (1974)

REPUBLIC VS. VDA. DE CASTELLVI, digested

Posted by Pius HYPERLINK "http://piusmorados.wordpress.com/author/piusmorados/"Morados on November 7, 2011

GR # L-20620 August 15, 1974 (Constitutional Law Eminent Domain, Elements of Taking) FACTS: After the owner of a parcel of land that has been rented and occupied by the government in 1947 refused to extend the lease, the latter commenced expropriation proceedings in 1959. During the assessment of just compensation, the government argued that it had taken the property when the contract of lease commenced and not when the proceedings begun. The owner maintains that the disputed land was not taken when the government commenced to occupy the said land as lessee because the essential elements of the taking of property under the power of eminent domain, namely (1) entrance and occupation by condemnor upon the private property for more than a momentary period,

and (2) devoting it to a public use in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property, are not present. ISSUE: Whether or not the taking of property has taken place when the condemnor has entered and occupied the property as lesse. HELD: No, the property was deemed taken only when the expropriation proceedings commenced in 1959. The essential elements of the taking are: (1) Expropriator must enter a private property, (2) for more than a momentary period, (3) and under warrant of legal authority, (4) devoting it to public use, or otherwise informally appropriating or injuriously affecting it in such a way as (5) substantially to oust the owner and deprive him of all beneficial enjoyment thereof. In the case at bar, these elements were not present when the government entered and occupied the property under a contract of lease.

City Govt. of Quezon City vs. Ericta, 122 SCRA 759 (1983)

City Govt. of Quezon City vs. Ericta, 122 SCRA 759 (1983)
Facts: Quezon City enacted an ordinance entitled ORDINANCE REGULATING THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF PRIVATE MEMORIAL TYPE CEMETERY OR BURIAL GROUND WITHIN THE JURISDICTION OF QUEZON CITY AND PROVIDING PENALTIES FOR THE VIOLATION THEREOF The law basically provides that at least six (6) percent of the total area of the memorial park cemetery shall be set aside for charity burial of deceased persons who are paupers and have been residents of Quezon City for at least 5 years prior to their death, to be determined by competent City Authorities. QC justified the law by invoking police power. ISSUE: Whether or not the ordinance is valid. HELD: The SC held the law as an invalid exercise of police power. There is no reasonable relation between the setting aside of at least six (6) percent of the total area of all private cemeteries for charity burial grounds of deceased paupers and the promotion of health, morals, good order, safety, or the general welfare of the people. The ordinance is actually a taking without compensation of a certain area from a private cemetery to benefit paupers who are charges of the municipal corporation. Instead of building or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries. Requisites of taking

Republic vs. Fajardo

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 170740 May 25, 2007 JULITA P. TAN, Petitioner, vs. THE REPUBLIC OF THE PHILIPPINES, Represented by the PUBLIC ESTATES AUTHORITY, Respondent. DECISION SANDOVAL-GUTIERREZ, J.: For our resolution is the Petition for Review on Certiorari assailing the Decision1 of the Court of Appeals (Thirteenth Division, Special Division of Five) dated July 6, 2005 in CA-G.R. SP No. 84667. The undisputed facts of the case are: Julita P. Tan, petitioner herein, is the registered owner of a parcel of land consisting of 7,161 square meters located at the southern bank of the Zapote River in Sitio Wawa, Pulang Lupa, Las Pias City. Her ownership is evidenced by Transfer Certificate of Title (TCT) No. 78188 of the Registry of Deeds, same city. She acquired this property from the San Antonio Development Corporation (SADC) as shown by a document denominated "Irrevocable and Exclusive Special Power of Attorney" dated April 6, 2001, whereby she assumed SADCs "obligation of paying all imposable taxes due said land." In consideration of such assumption and "for value" she "stepped into the shoes" of SADC "free to exercise such rights and prerogatives as owner of the subject property, including the right to collect and demand payment for the sale and/or use of the subject land or any portion thereof, by and from any person or entity." The Public Estates Authority (PEA) is a government-owned and controlled corporation, organized and existing pursuant to Presidential Decree (P.D.) No. 1084 representing in this case the Republic of the Philippines, herein respondent. Among the properties PEA manages is the Manila-Cavite Coastal Road (Coastal Road), also known as the R-1 Expressway. Prior to the transfer of the property to petitioner by SADC, or on March 29, 1985, PEA wrote SADC requesting permission to enter the latters property, then covered by TCT No. 439101, for the purpose of constructing thereon the southern abutment of the Zapote Bridge at the Coastal Road. PEA also proposed to SADC to start their negotiation for its acquisition of the latters property. On April 11, 1985, SADC replied authorizing PEA to enter the property, subject to the condition that the latter should pay a monthly rental of P10,000.00. PEA then directed its contractor, the Philippine National Construction Corporation, to enter the property and begin the necessary engineering works on the Coastal Road. In a letter dated May 28, 1985, PEA requested SADC either to donate or sell the property to the government. On October 22, 1985, SADC replied by offering to sell the property to PEA. SADCs asking price was P1,288,980.00 plus P400,000.00 as compensation for the house and other improvements

thereon that were destroyed during the construction of the Coastal Road. On January 7, 1987, PEA informed SADC it has no plan to buy the whole lot, but only the 1,131 square meter portion above sea level. PEA then asked SADC to submit proofs of ownership and costs of the improvements which were demolished. Negotiations then ensued between the parties. However, for the past twenty (20) years, they failed to reach an agreement. On October 2, 2000, SADC asked PEA to pay compensation equivalent to the current zonal value plus interest of ten percent (10%) per annum and a monthly rental of P10,000.00, also with the same interest. These sums, according to SADC, could be considered just compensation for the governments use of the property since 1985 until September 2000 and thereafter. The following month, PEA inquired from the Bureau of Internal Revenue (BIR) District 53, Alabang, Muntinlupa City the zonal value of the SADC property. It submitted to the BIR the appraisal reports prepared by two (2) independent licensed appraisers. On April 6, 2001, petitioner Julita Tan acquired the property from SADC.1a\^/phi1.net On July 12, 2001, the BIR sent a letter to PEA stating that the zonal value of the property is P2,900.00 per square meter, with the caveat that the said assessment is subject to review and approval by higher tax authorities. On October 9, 2001, the BIR informed PEA that the current zonal value of the property is P20,000.00 per square meter. In the meantime, the construction of the Coastal Road was completed. PEA entered into a Joint Venture Agreement with the Toll Regulatory Board and the UEM-MARA Philippine Corporation for the toll operation of the Coastal Road, as shown by the Certificate of the Secretary of the Toll Regulatory Board dated May 13, 2003.2 PEA has been collecting toll fees from the road users in the average amount of P1,039,404.85 per day, as shown by a document denominated "Traffic Count of the Year 2002.3 Despite its collection of huge toll fees, PEA continuously refuses to pay petitioner any compensation. On October 22, 2001, petitioner, in her desperation, wrote PEA expressing her willingness to be compensated through a land swapping arrangement. She proposed that PEAs Fishermans Wharf be given to her in exchange for her property. On August 6, 2002, the PEA Board approved the exchange of a portion of petitioners lot consisting of 4,719 square meters for PEAs Lot 12 with an area of 2,360 square meters. The parties entered into a Memorandum of Agreement wherein PEA agreed to execute a Deed of Exchange by way of compensation for petitioners property affected by the Coastal Road. However, on June 18, 2003, PEA withdrew from the land swapping agreement.1a\^/phi1.net Instead, on September 22, 2003, it filed with the Regional Trial Court (RTC), Branch 202, Las Pias City a complaint for expropriation, docketed as Civil Case No. 03-0220. PEA alleged therein, among others, that its liability for just compensation is based on the zonal value of the land at the time of the taking in 1985. Thus, it is liable for only P852,993.51 for the 4,719 square meter portion. In her answer, petitioner claimed that PEA should pay for the whole area consisting of 7,161 square meters at P20,000.00 per square meter, the zonal value set by the BIR pursuant to Republic Act No. 8974.4 She then prayed that she be paid P143,200,000.00 plus interest of twelve percent (12%) per annum, aside from the P10,000.00 monthly rental with 12% interest per annum for the occupancy and use of the property since April 1985 up to the present. On October 20, 2003, petitioner filed with the RTC a motion to order PEA to immediately pay her just compensation based on the zonal valuation of the BIR. This was opposed by PEA. On December 16, 2003, the trial court issued the following Order5:

WHEREFORE, finding merit to the "Motion To Order the Plaintiff to Immediately Pay Defendant Her Expropriated Property," dated October 20, 2003, the same is hereby GRANTED. Accordingly, plaintiff, through PEA, is hereby ordered to immediately pay defendant the sum of P94,380,000.00 (ninety-four million, three hundred eighty thousand pesos) representing the just compensation for the 4,719 square meters of defendants property covered by TCT No. 78188 of the Registry of Deeds of Las Pias based on P20,000.00 per square meter zonal valuation of the Bureau of Internal Revenue. SO ORDERED. PEA timely filed a motion for reconsideration but it was denied by the trial court in its Order 6 dated April 14, 2004. PEA then elevated the matter to the Court of Appeals by way of a petition for certiorari, prohibition, and mandamus. On July 6, 2005, the Court of Appeals rendered its Decision, the dispositive portion of which reads: WHEREFORE, the instant petition for certiorari and prohibition is hereby GRANTED while that of mandamus is hereby DENIED (sic). Accordingly, the assailed Orders, dated December 16, 2003 and April 14, 2004, are hereby REVERSED and SET ASIDE. Public respondent is hereby ordered to DESIST from enforcing the assailed Orders. SO ORDERED. Petitioner filed a motion for reconsideration. In a Resolution dated December 12, 2005, the Court of Appeals denied the same. Hence, the present petition anchored on these twin issues: Whether the Court of Appeals erred in sustaining PEAs petition for certiorari and prohibition and in dismissing that for mandamus; and in holding that the just compensation for petitioners property should be based on the BIR zonal valuation in 1985 when petitioner entered the subject property.1awphi1.nt The first issue involves the nature of the two Orders of the trial court dated December 16, 2003 and April 14, 2004. The Order of December 16, 2003 directed PEA to pay petitioner just compensation in the sum of P94,380,000.00. The Order of April 14, 2004 denied PEAs motion for reconsideration. Are these orders final or interlocutory? Sec. 1, Rule 41 of the 1997 Rules of Civil Procedure, as amended, partly provides: SEC. 1. Subject of appeal. An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable. No appeal may be taken from: xxx (c) an interlocutory order. xxx A final order is one that disposes of the subject matter in its entirety or terminates a particular proceeding or action, leaving nothing else to be done but to enforce by execution what has been determined by the court, while an interlocutory order is one which does not dispose of the case completely but leaves something to be decided upon.7 Under Rule 67 of the same Rules, there are two (2) stages in a condemnation proceeding:8 (1) Determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, with condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned for the public use or purpose

described in the complaint, upon payment of just compensation. An order of expropriation is final.9 An order of dismissal, if this be ordained, would be a final one, as it finally disposes of the action and leaves nothing more to be done by the court on the merits.10 The order of expropriation would also be a final one for after its issuance, no objection to the right of condemnation shall be heard. The order of expropriation may be appealed by any party aggrieved thereby by filing a record on appeal.11 (2) Determination by the court of the just compensation for the property sought to be taken with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before the court and findings of the commissioners would likewise be a final one, as it would leave nothing more to be done by the court regarding this issue. A second and separate appeal may be taken from this order fixing the just compensation. The trial courts Orders in Civil Case No. 03-0220 required PEA to pay petitioner P94,380,000.00 representing the just compensation for her 4,719 square meter lot based on the BIR zonal valuation of P20,000.00 per square meter. Clearly, the Orders are final, hence, appealable. However, instead of appealing from the said Orders within the reglementary period, PEA resorted to certiorari, prohibition and mandamus. It is basic that the remedy of certiorari is not a substitute for a lost appeal, as in this case. On the second issue, Section 9, Article III of the Constitution specifically mandates that "Private property shall not be taken for public use without just compensation." In City of Manila v. Estrada,12 we held that "compensation" means "an equivalent for the value of land (property) taken." The use of the word "just" is "to convey the idea that the equivalent to be rendered for the property taken shall be real, substantial, full, ample." Thus, Estrada defined just compensation as "a fair and full equivalent for the loss sustained." This definition has been reiterated in Manila Railroad Co. v. Velasquez[13] and Province of Tayabas v. Perez.14 Then in Manila Railroad Co. v. Caligsahan,15 we held that "to be exactly just, the compensation should be estimated at the time of the taking." Subsequently, in Republic v. Vda. de Castellvi,16 we ruled that just compensation is determined as of the date of the taking of the property or the filing of the complaint, whichever came first. The Court of Appeals, in its challenged Decision, held that PEAs taking of petitioners property occurred in 1985. Even if PEA requested permission to enter the subject property and petitioner granted such request on condition that PEA should pay a monthly rental of P10,000.00, "it does not change the fact that there was taking of the property for public use." Consequently, the compensation should be computed on the basis of the zonal value of the property at that time (1985) which was P2,900.00 per square meter per letter dated July 12, 2001 of the BIR to PEA. The Court of Appeals is wrong. PEAs entry into the property with the permission of SADC, its previous owner, was not for the purpose of expropriating the property. Records show and as stressed by Mr. Justice Renato C. Dacudao of the Court of Appeals in his Dissenting Opinion, SADC allowed PEA to enter the land on condition that it should pay a monthly rental of P10,000.00. Thereafter, PEA, in a letter dated May 28, 1985, requested SADC to donate or sell the land to the government. On October 22, 1985, SADC responded, offering to sell the land to PEA for P1,288,980.00, plus P400,000.00 representing the value of the improvements destroyed by PEA when it entered the property. However, since 1985 up to the present, no agreement has been reached between PEA and SADC or herein petitioner who acquired the property from the latter. While PEA has been earning huge toll fees, it has refused to pay petitioner any compensation for the use of her property in violation of her right as an owner. The above circumstances clearly show that when PEA entered petitioners land in 1985, it was not for the purpose of expropriating it. We stress that after its entry, PEA wrote SADC requesting to

donate or sell the land to the government. Indeed, there was no intention on the part of PEA to expropriate the subject property. Why did it ask permission from SADC to enter the property? Thereafter, why did it request SADC to donate or sell the land to the government? It could have simply exercised its power of eminent domain. Section 2, Rule 67 (on Expropriation) of the same Rules provides, among others, that upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property. It bears reiterating that in Republic v. Vda. de Castellvi,17 we ruled that just compensation is determined as of the date of the taking of the property or the filing of the complaint, whichever came first. We have made it clear that there was no taking of the property in 1985 by PEA for purposes of expropriation. As shown by the records, PEA filed with the RTC its petition for expropriation on September 22, 2003. The trial court, therefore, was correct in ordering respondent, through PEA, upon the filing of its complaint for expropriation, to pay petitioner just compensation on the basis of the BIR zonal valuation of the subject property at P20,000.00 per square meter. In sum, we rule that the Court of Appeals erred (1) in not dismissing PEAs petition for certiorari, prohibition and mandamus; and (2) in ruling that PEAs taking of the property occurred in 1985 and that the compensation should be based on the BIR zonal valuation in that year. WHEREFORE, the assailed Decision of the Court of Appeals dated July 6, 2005, in CA-G.R. SP No. 84667 is REVERSED. The Decision of the RTC, Branch 202, Las Pias City is AFFIRMED. SO ORDERED. ANGELINA SANDOVAL-GUTIERREZ Associate Justice WE CONCUR: REYNATO S. PUNO Chief Justice Chairperson (On leave) RENATO C. CORONA ADOLFO S. AZCUNA Associate Justice Asscociate Justice CANCIO C. GARCIA Associate Justice C E RT I F I CAT I O N Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice

Case: City Govt. of Quezon City vs. Ericta, 122 SCRA 759 (1983)

CITY GOVERNMENT OF QUEZON CITY VS. ERICTA [122 SCRA 759; G.R. No. L-34915; 24 Jun 1983]
Friday, January 30, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law Facts: Section 9 of Ordinance No. 6118, S-64, entitled "Ordinance Regulating The Establishment, Maintenance And Operation Of Private Memorial Type Cemetery Or Burial Ground Within The Jurisdiction Of Quezon City And Providing Penalties For The Violation Thereof" provides: Sec. 9. At least six (6) percent of the total area of the memorial park cemetery shall be set aside for charity burial of deceased persons who are paupers and have been residents of Quezon City for at least 5 years prior to their death, to be determined by competent City Authorities. The area so designated shall immediately be developed and should be open for operation not later than six months from the date of approval of the application. For several years, the aforequoted section of the Ordinance was not enforced but seven years after the enactment of the ordinance, the Quezon City Council passed a resolution to request the City Engineer, Quezon City, to stop any further selling and/or transaction of memorial park lots in Quezon City where the owners thereof have failed to donate the required 6% space intended for paupers burial. The Quezon City Engineer then notified respondent Himlayang Pilipino, Inc. in writing that Section 9 of the ordinance would be enforced. Respondent Himlayang Pilipino reacted by filing a petition for declaratory relief, prohibition and mandamus with preliminary injunction seeking to annul Section 9 of the Ordinance in question. Respondent alleged that the same is contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and the Revised Administrative Code. Issue: Whether or Not Section 9 of the ordinance in question is a valid exercise of police power. Held: Section 9 of the City ordinance in question is not a valid exercise of police power. Section 9 cannot be justified under the power granted to Quezon City to tax, fix the license fee, and regulate such other business, trades, and occupation as may be established or practiced in the City. Bill of rights states that 'no person shall be deprived of life, liberty or property without due process of law' (Art. Ill, Section 1 subparagraph 1, Constitution). On the other hand, there are three inherent powers of government by which the state interferes with the property rights, namely-. (1) police power, (2) eminent domain, (3) taxation.

The police power of Quezon City is defined in sub-section 00, Sec. 12, Rep. Act 537 that reads as follows: To make such further ordinance and regulations not repugnant to law as may be necessary to carry into effect and discharge the powers and duties conferred by this act and such as it shall deem necessary and proper to provide for the health and safety, , and for the protection of property therein; and enforce obedience thereto with such lawful fines or penalties as the City Council may prescribe under the provisions of subsection (jj) of this section. The power to regulate does not include the power to prohibit. The power to regulate does not include the power to confiscate. The ordinance in question not only confiscates but also prohibits the operation of a memorial park cemetery, because under Section 13 of said ordinance, 'Violation of the provision thereof is punishable with a fine and/or imprisonment and that upon conviction thereof the permit to operate and maintain a private cemetery shall be revoked or cancelled. The confiscatory clause and the penal provision in effect deter one from operating a memorial park cemetery. Moreover, police power is defined by Freund as 'the power of promoting the public welfare by restraining and regulating the use of liberty and property'. It is usually exerted in order to merely regulate the use and enjoyment of property of the owner. If he is deprived of his property outright, it is not taken for public use but rather to destroy in order to promote the general welfare. It seems to the court that Section 9 of Ordinance No. 6118, Series of 1964 of Quezon City is not a mere police regulation but an outright confiscation. It deprives a person of his private property without due process of law, nay, even without compensation. Case: Deprivation of Use Republic vs. Fajardo , 104 Phil.443 (1958) Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-12172 August 29, 1958 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. JUAN F. FAJARDO, ET AL., defendants-appellants. Assistant Solicitor General Esmeraldo Umali and Higinio V. Catalan for appellee. Prila, Pardalis and Pejo for appellants. REYES, J. B. L., J.: Appeal from the decision of the Court of First Instance of Camarines Sur convicting defendants-

appellants Juan F. Fajardo and Pedro Babilonia of a violation of Ordinance No. 7, Series of 1950, of the Municipality of Baao, Camarines Sur, for having constructed without a permit from the municipal mayor a building that destroys the view of the public plaza. It appears that on August 15, 1950, during the incumbency of defendant-appellant Juan F. Fajardo as mayor of the municipality of Baao, Camarines Sur, the municipal council passed the ordinance in question providing as follows: SECTION 1. Any person or persons who will construct or repair a building should, before constructing or repairing, obtain a written permit from the Municipal Mayor. SEC. 2. A fee of not less than P2.00 should be charged for each building permit and P1.00 for each repair permit issued. SEC. 3. PENALTY Any violation of the provisions of the above, this ordinance, shall make the violation liable to pay a fine of not less than P25 nor more than P50 or imprisonment of not less than 12 days nor more than 24 days or both, at the discretion of the court. If said building destroys the view of the Public Plaza or occupies any public property, it shall be removed at the expense of the owner of the building or house. SEC. 4. EFFECTIVITY This ordinance shall take effect on its approval. (Orig. Recs., P. 3) Four years later, after the term of appellant Fajardo as mayor had expired, he and his son in-law, appellant Babilonia, filed a written request with the incumbent municipal mayor for a permit to construct a building adjacent to their gasoline station on a parcel of land registered in Fajardo's name, located along the national highway and separated from the public plaza by a creek (Exh. D). On January 16, 1954, the request was denied, for the reason among others that the proposed building would destroy the view or beauty of the public plaza (Exh. E). On January 18, 1954, defendants reiterated their request for a building permit (Exh. 3), but again the request was turned down by the mayor. Whereupon, appellants proceeded with the construction of the building without a permit, because they needed a place of residence very badly, their former house having been destroyed by a typhoon and hitherto they had been living on leased property. On February 26, 1954, appellants were charged before and convicted by the justice of the peace court of Baao, Camarines Sur, for violation of the ordinance in question. Defendants appealed to the Court of First Instance, which affirmed the conviction, and sentenced appellants to pay a fine of P35 each and the costs, as well as to demolish the building in question because it destroys the view of the public plaza of Baao, in that "it hinders the view of travelers from the National Highway to the said public plaza." From this decision, the accused appealed to the Court of Appeals, but the latter forwarded the records to us because the appeal attacks the constitutionality of the ordinance in question. We find that the appealed conviction can not stand. A first objection to the validity of the ordinance in question is that under it the mayor has absolute discretion to issue or deny a permit. The ordinance fails to state any policy, or to set up any standard to guide or limit the mayor's action. No purpose to be attained by requiring the permit is expressed; no conditions for its grant or refusal are enumerated. It is not merely a case of deficient standards; standards are entirely lacking. The ordinance thus confers upon the mayor arbitrary and unrestricted power to grant or deny the issuance of building permits, and it is a settled rule that such an undefined and unlimited delegation of power to allow or prevent an activity, per se lawful, is invalid (People vs. Vera, 65 Phil., 56; Primicias vs. Fugoso, 80 Phil., 71; Schloss Poster Adv. Co. vs. Rock Hill, 2 SE (2d) 392)

The ordinance in question in no way controls or guides the discretion vested thereby in the respondents. It prescribes no uniform rule upon which the special permission of the city is to be granted. Thus the city is clothed with the uncontrolled power to capriciously grant the privilege to some and deny it others; to refuse the application of one landowner or lessee and to grant that of another, when for all material purposes, the two applying for precisely the same privileges under the same circumstances. The danger of such an ordinance is that it makes possible arbitrary discriminations and abuses in its execution, depending upon no conditions or qualifications whatever, other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is to be tested. Fundamental rights under our government do not depend for their existence upon such a slender and uncertain thread. Ordinances which thus invest a city council with a discretion which is purely arbitrary, and which may be exercised in the interest of a favored few, are unreasonable and invalid. The ordinance should have established a rule by which its impartial enforcement could be secured. All of the authorities cited above sustain this conclusion. As was said in City of Richmond vs. Dudley, 129 Ind. 112,28 N. E. 312, 314 13 L. R. A. 587, 28 Am. St. Rep. 180: "It seems from the foregoing authorities to be well established that municipal ordinances placing restrictions upon lawful conduct or the lawful use of property must, in order to be valid, specify the rules and conditions to be observed in such conduct or business; and must admit of the exercise of the privilege of all citizens alike who will comply with such rules and conditions; and must not admit of the exercise, or of an opportunity for the exercise, of any arbitrary discrimination by the municipal authorities between citizens who will so comply. (Schloss Poster Adv. Co., Inc. vs. City of Rock Hill, et al., 2 SE (2d), pp. 394-395). It is contended, on the other hand, that the mayor can refuse a permit solely in case that the proposed building "destroys the view of the public plaza or occupies any public property" (as stated in its section 3); and in fact, the refusal of the Mayor of Baao to issue a building permit to the appellant was predicated on the ground that the proposed building would "destroy the view of the public plaza" by preventing its being seen from the public highway. Even thus interpreted, the ordinance is unreasonable and oppressive, in that it operates to permanently deprive appellants of the right to use their own property; hence, it oversteps the bounds of police power, and amounts to a taking of appellants property without just compensation. We do not overlook that the modern tendency is to regard the beautification of neighborhoods as conducive to the comfort and happiness of residents. But while property may be regulated in the interest of the general welfare, and in its pursuit, the State may prohibit structures offensive to the sight (Churchill and Tait vs. Rafferty, 32 Phil. 580), the State may not, under the guise of police power, permanently divest owners of the beneficial use of their property and practically confiscate them solely to preserve or assure the aesthetic appearance of the community. As the case now stands, every structure that may be erected on appellants' land, regardless of its own beauty, stands condemned under the ordinance in question, because it would interfere with the view of the public plaza from the highway. The appellants would, in effect, be constrained to let their land remain idle and unused for the obvious purpose for which it is best suited, being urban in character. To legally achieve that result, the municipality must give appellants just compensation and an opportunity to be heard. An ordinance which permanently so restricts the use of property that it can not be used for any reasonable purpose goes, it is plain, beyond regulation and must be recognized as a taking of the property. The only substantial difference, in such case, between restriction and actual taking, is that the restriction leaves the owner subject to the burden of payment of taxation, while outright confiscation would relieve him of that burden. (Arverne Bay Constr. Co. vs. Thatcher (N.Y.) 117 ALR. 1110, 1116). A regulation which substantially deprives an owner of all beneficial use of his property is

confiscation and is a deprivation within the meaning of the 14th Amendment. (Sundlum vs. Zoning Bd., 145 Atl. 451; also Eaton vs. Sweeny, 177 NE 412; Taylor vs. Jacksonville, 133 So. 114). Zoning which admittedly limits property to a use which can not reasonably be made of it cannot be said to set aside such property to a use but constitutes the taking of such property without just compensation. Use of property is an element of ownership therein. Regardless of the opinion of zealots that property may properly, by zoning, be utterly destroyed without compensation, such principle finds no support in the genius of our government nor in the principles of justice as we known them. Such a doctrine shocks the sense of justice. If it be of public benefit that property remain open and unused, then certainly the public, and not the private individuals, should bear the cost of reasonable compensation for such property under the rules of law governing the condemnation of private property for public use. (Tews vs. Woolhiser (1933) 352 I11. 212, 185 N.E. 827) (Emphasis supplied.) The validity of the ordinance in question was justified by the court below under section 2243, par. (c), of the Revised Administrative Code, as amended. This section provides: SEC. 2243. Certain legislative powers of discretionary character. The municipal council shall have authority to exercise the following discretionary powers: xxxxxxxxx (c) To establish fire limits in populous centers, prescribe the kinds of buildings that may be constructed or repaired within them, and issue permits for the creation or repair thereof, charging a fee which shall be determined by the municipal council and which shall not be less than two pesos for each building permit and one peso for each repair permit issued. The fees collected under the provisions of this subsection shall accrue to the municipal school fund. Under the provisions of the section above quoted, however, the power of the municipal council to require the issuance of building permits rests upon its first establishing fire limits in populous parts of the town and prescribing the kinds of buildings that may be constructed or repaired within them. As there is absolutely no showing in this case that the municipal council had either established fire limits within the municipality or set standards for the kind or kinds of buildings to be constructed or repaired within them before it passed the ordinance in question, it is clear that said ordinance was not conceived and promulgated under the express authority of sec. 2243 (c) aforequoted. We rule that the regulation in question, Municipal Ordinance No. 7, Series of 1950, of the Municipality of Baao, Camarines Sur, was beyond the authority of said municipality to enact, and is therefore null and void. Hence, the conviction of herein appellants is reversed, and said accused are acquitted, with costs de oficio. So ordered. Case: Napocor vs. Gutierrez, 193 SCRA 1 (1991) NAPOCOR v. Gutierrez, 193 SCRA 1 (1991) F: For the construction of its 230 KV Mexico-Limay transmission lines, Napocor''s lines have to pass the lands belonging to respondents. Unsuccessful with its negotiations for the acquisition of the right of way easements, Napocor was constrained to file eminent domain proceedings. ISSUE: W/N petitoner should be made to pay simple easement fee or full compensation for the land traversed by its transmissin lines.

RULING: In RP v. PLDT, the SC ruled that "Normally, the power of eminent domain results in the taking or appropriation of the title to, and possession of, the expropriated property, but no cogent reason appears why said power may not be availed of to impose only a burrden upon the owner of the condemned property, without loss of title or possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of right of way." In this case, the easement is definitely a taking under the power of eminent domain. Considering the nature and effect of the installation of the transmission lines, the limitations imposed by the NPC against the use of the land (that no plant higher than 3 meters is allowed below the lines) for an indefinite period deprives priFull-Text Online Libraryvate respondents of ts ordinary use. For these reasons, the owner of the property expropriated is entitled to a just compensation which should neither be more nor less, whenever it is possible to make the assessment, than the money equivalent of said property. Just equiivalent has always been understood to be the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation. The price or value of the land and its character at the time of taking by the Govt. are the criteria for determining just compensation. Case: U.S. v. Causby, 328 U.S. 256 (1946) Digested Case: United States v. Causby | More Citation. 328 U.S. 256,66 S. Ct. 1062,90 L. Ed. 1206, 1946 U.S. click the citation to view the entire case on Brief Fact Summary. Respondents claim that their property was taken, within the meaning of the Fifth Amendment, by the regular army and navy aircraft flights over their house and chicken farm. Synopsis of Rule of Law. The airspace is a public highway, but if the landowner is to have the full enjoyment of his land, he must have exclusive control over the immediate reaches of the enveloping atmosphere.

Facts. Respondents own 2.8 acres near an airport outside of Greensboro, North Carolina.
Respondents property contained a house and a chicken farm. The end of one of the runways of the airport was 2,220 feet from Respondents property, and the glide path passed over the property at 83 feet, which is 67 feet above the house, 63 feet above the barn, and 18 feet above the highest tree. The use by the United States of this airport is pursuant to a lease beginning June 1, 1942, and ending June 30, 1942, with provisions for renewal until June 30, 1967, or six months after the end of the national emergency, whichever is earlier. The United States four motored bombers make loud noises when flying above the property, and have very bright lights. Respondents chicken farm production had to stop, because 150 chickens were killed by flying into walls from fright. In the Court of Claims, it was found that the United States had taken an easement over the property on June 1, 1942, and that the val ue of the property depreciation as the result of the easement was $2,000.00. The United States petitioned for certiorari, which was granted.

Issue. Has the Respondents property been taken within the meaning of the Fifth Amendment? Held. Yes. But the case is remanded for a determination of the value of the

easement and whether the easement was permanent or temporary. The court noted the common law doctrine of ownership of land extending to the sky above the land. However, the court notes that an act of Congress had given the United States exclusive national sovereignty over the air space. The court noted that common sense made the common law doctrine inapplicable. However, the court found that the common law doctrine did not control the present case. The United States had conceded in oral argument that if flights over the Respondents property rendered it uninhabitable then there would be a taking compensable under the Fifth Amendment. The measure of the value of the property taken is the owners loss, not the takers gain. The airspace is a public highway. But it is obvious that if the landowner is to have the full enjoyment of his land, he must have exclusive control of the immediate reaches of the enveloping atmosphere. If this were not true then landowners could not build buildings, plant trees or run fences. The airspace, apart from the immediate reaches above the land, is part of the public domain. The court does not set the precise limits of the line of demarcation. Flights over private land are not a taking, unless, like here, they are so low and frequent as to be a direct and immediate interference with the enjoyment of the land. The Court of Claims must, upon remand, determine the value of the easement and whether it is a temporary or permanent easement. Dissent. The dissent would reverse the decision of the Court of Claims and hold that there has been no taking within the meaning of the Fifth Amendment. This is because of the modern nature of the airplane, and the desire to avoid confusion. Discussion. The national emergency, World War II, meant that the airport, which was not previously used by large planes, would be the home to large bombers. The use of the airspace above Respondents home and farm was not a problem previously, because the flights were sporadic and not nearly as loud as the bombers

Full Text :U.S. Supreme Court

UNITED STATES v. CAUSBY, 328 U.S. 256 (1946)

328 U.S. 256 UNITED STATES v. CAUSBY et ux. No. 630. Argued May 1, 1946. Decided May 27, 1946. Military airplanes are subject to rules of Civil Aeronautics Board where there are no army or navy regulations to the contrary. [328 U.S. 256, 257] Mr. Walter J. Cummings, Jr., of Washington, D.C., for petitioner. Mr. William E. Comer, of Greensboro, N.C., for respondent.
[328 U.S. 256, 258]

Mr. Justice DOUGLAS delivered the opinion of the Court. This is a case of first impression. The problem presented is whether respondents' property was taken within the meaning of the Fifth Amendment by frequent and regular flights of army and navy aircraft over respondents' land at low altitudes. The Court of Claims held that there was a taking and entered judgment for respondent, one judge dissenting. 60 F.Supp. 751. The case is here on a petition for a writ of certiorari which we granted becuase of the importance of the question presented. Respondents own 2.8 acres near an airport outside of Greensboro, North Carolina. It has on it a dwelling house, and also various outbuildings which were mainly used for raising chickens. The end of the airport's northwest-southeast runway is 2,220 feet from respondents' barn and 2,275 feet from their house. The path of glide to this runway passes directly over the property-which is 100 feet wide and 1,200 feet long. The 30 to 1 safe glide angle1 approved by the Civil Aeronautics Authority2 passes over this property at 83 feet, which is 67 feet above the house, 63 feet above the barn and 18 feet above the highest tree. 3 The use by the United States of this airport is pursuant to a lease executed in May, 1942, for a term commencing June 1, 1942 and ending June 30, 1942, with a provision for renewals until June 30, 1967, or six [328 U.S. 256, 259] months after the end of the national emergency, whichever is the earlier. Various aircraft of the United States use this airport-bombers, transports and fighters. The direction of the prevailing wind determines when a particular runway is used. The north-west-southeast runway in question is used about four per cent of the time in taking off and about seven per cent of the time in landing. Since the United States began operations in May, 1942, its four-motored heavy bombers, other planes of the heavier type, and its fighter planes have frequently passed over respondents' land buildings in considerable numbers and rather close together. They come close enough at times to appear barely to miss the tops of the trees and at times so close to the tops of the trees as to blow the old leaves off. The noise is startling. And at night the glare from the planes brightly lights up the place. As a result of the noise, respondents had to give up their chicken business. As many as six to ten of their chickens were killed in one day by flying into the walls from fright. The total chickens lost in that manner was about 150. Production also fell off. The result was the destruction of the use of the property as a commercial chicken farm. Respondents are frequently deprived of their sleep and the family has become nervous and frightened. Although there have been no airplane accidents on respondents' property, there have been several accidents near the airport and close to respondents' place. These are the essential facts found by the Court of Claims. On the basis of these facts, it found that respondents' property had depreciated in value. It held that the United States had taken an easement over the property on June 1, 1942, and that the value of the property destroyed and the easement taken was $2,000. [328 U.S. 256, 260] I. The United States relies on the Air Commerce Act of 1926, 44 Stat. 568, 49 U.S.C. 171 et seq., 49 U.S.C.A. 171 et seq., as amended by the Civil Aeronautics Act of 1938, 52 Stat. 973, 49 U.S.C. 401 et seq., 49 U. S.C.A. 401 et seq. Under those statutes the United States has 'complete and exclusive national sovereignty in the air space' over this country. 49 U.S.C. 176(a), 49 U.S.C.A. 176(a). They grant any citizen of the United States 'a public right of freedom of transit in air commerce4 through the navigable air space of the United States.' 49 U.S.C. 403, 49 U.S.C.A. 403. And 'navigable air space' is defined as 'airspace above the minimum safe altitudes of flight prescribed by the Civil Aeronautics Authority.' 49 U.S.C. 180, 49 U.S.C.A. 180. And it is provided that 'such navigable airspace shall be subject to a public right of freedom of interstate and foreign air navigation.' Id. It is, therefore, argued that since these flights were within the minimum safe altitudes of flight which had been prescribed, they were an exercise of the declared right of travel through the airspace. The United States concludes that when flights are made within the navigable airspace without any physical invasion of the property of the landowners, there has been no taking of property. It says that at most there was merely incidental damage occurring as a consequence of authorized air navigation. It also argues that the landowner does not own superadjacent airspace which he has not subjected to possession by the erection of structures or other occupancy. Moreover, it is argued that

even if the United States took airspace owned by respondents, no compensable damage was shown. Any damages are said to be merely consequential for which no compensation may be obtained under the Fifth Amendment. It is ancient doctrine that at common law ownership of the land extended to the periphery of the universe-Cujus [328 U.S. 256, 261] est solum ejus est usque ad coelum. 5 But that doctrine has no place in the modern world. The ai is a public highway, as Congress has declared. Were that not true, every transcontinental flight would subject the operator to countless trespass suits. Common sense revolts at the idea. To recognize such private claims to the airspace would clog these highways, seriously interfere with their control and development in the public interest, and transfer into private ownership that to which only the public has a just claim. But that general principle does not control the present case. For the United States conceded on oral argument that if the flights over respondents' property rendered it uninhabitable, there would be a taking compensable under the Fifth Amendment. It is the owner's loss, not the taker's gain, which is the measure of the value of the property taken. United States v. Miller, 317 U.S. 369 , 63 S.Ct. 276, 147 A.L. R. 55. Market value fairly determined is the normal measure of the recovery. Id. And that value may reflect the use to which the land could readily be converted, as well as the existing use. United States v. Powelson, 319 U.S. 266, 275 , 63 S.Ct. 1047, 1053, and cases cited. If, by reason of the frequency and altitude of the flights, respondents could not use this land for any purpose, their loss would be complete. 6 It would be as complete as if the United States had entered upon the surface of the land and taken exclusive possession of it. We agree that in those circumstances there would be a taking. Though it would be only an easement of flight [328 U.S. 256, 262] which was taken, that easement, if permanent and not merely temporary, normally would be the equivalent of a fee interest. It would be a definite exercise of complete dominion and control over the surface of the land. The fact that the planes never touched the surface would be as irrelevant as the absence in this day of the feudal livery of seisin on the transfer of real estate. The owner's right to possess and exploit the land-that is to say, his beneficial ownership of itwould be destroyed. It would not be a case of incidental damages arising from a legalized nuisance such as was involved in Richards v. Washington Terminal Co., 233 U.S. 546 , 34 S.Ct. 654, L.R.A.1915A, 887. In that case property owners whose lands adjoined a railroad line were denied recovery for damages resulting from the noise, vibrations, smoke and the like, incidental to the operations of the trains. In the supposed case the line of flight is over the land. And the land is appropriated as directly and completely as if it were used for the runways themselves. There is no material difference between the supposed case and the present one, except that here enjoyment and use of the land are not completely destroyed. But that does not seem to us to be controlling. The path of glide for airplanes might reduce a valuable factory site to grazing land, an orchard to a vegetable patch, a residential section to a wheat field. Some value would remain. But the use of the airspace immediately above the land would limit the utility of the land and cause a diminution in its value. 7 That was the philosophy of Portsmouth Harbor Land & Hotel Co. v. [328 U.S. 256, 263] United States, 260 U.S. 327 , 43 S.Ct. 135. In that case the petition alleged that the United States erected a fort on nearby land, established a battery and a fire control station there, and fired guns over petitioner's land. The Court, speaking through Mr. Justice Holmes, reversed the Court of Claims which dismissed the petition on a demurrer, olding that 'the specific facts set forth would warrant a finding that a servitude has been imposed.' 8 260 U.S. at page 330, 43 S.Ct. at page 137. And see Delta Air Corp. v. Kersey, 193 Ga. 862, 20 S.E.2d 245, 140 A.L.R. 1352. Cf. United States v. 357.25 Acres of Land, D.C., 55 F.Supp. 461. The fact that the path of glide taken by the planes was that approved by the Civil Aeronautics Authority does not change the result. The navigable airspace which Congress has placed in the public domain is 'airspace above the minimum safe altitudes of flight prescribed by the Civil Aeronautics Authority.' 49 U.S.C. 180, 49 U.S.C.A. 180. If that agency prescribed 83 feet as the minimum safe altitude, then we would have presented the question of the validity of the regulation.

But nothing of the sort has been done. The path of glide governs the method of operating- of landing or taking off. The altitude required for that operation is not the minimum safe altitude of flight which is the downward reach of the navigable airspace. The minimum prescribed by the authority is 500 feet during the day and 1000 feet at night for air carriers (Civil Air Regulations, Pt. 61, 61.7400, 61.7401, Code Fed.Reg.Cum.Supp., Tit. 14, ch. 1) and from 300 to 1000 feet for [328 U.S. 256, 264] other aircraft depending on the type of plane and the character of the terrain. Id., Pt. 60, 60.350-60.3505, Fed.Reg.Cum.Supp., supra. Hence, the flights in question were not within the navigable airspace which Congress placed within the public domain. If any airspace needed for landing or taking off were included, flights which were so close to the land as to render it uninhabitable would be immune. But the United States concedes, as we have said, that in that event there would be a taking. Thus, it is apparent that the path of glide is not the minimum safe altitude of flight within the meaning of the statute. The Civil Aeronautics Authority has, of course, the power to prescribe air traffic rules. But Congress has defined navigable airspace only in terms of one of them-the minimum safe altitudes of flight. We have said that the airspace is a public highway. Yet it is obvious that if the landowner is to have full enjoyment of the land, he must have exclusive control of the immediate reaches of the enveloping atmosphere. Otherwise buildings could not be erected, trees could not be planted, and even fences could not be run. The principle is recognized when the law gives a remedy in case overhanging structures are erected on adjoining land. 9 The landowner owns at least as much of the space above the ground as the can occupy or use in connection with the land. See Hinman v. Pacific Air Transport, 9 Cir., 84 F.2d 755. The fact that he does not occupy it in a physical sense-by the erection of buildings and the like-is not material. As we have said, the flight of airplanes, which skim the surface but do not touch it, is as much an appropriation of the use of the land as a more conventional entry upon it. We would not doub that if the United States erected [328 U.S. 256, 265] an elevated railway over respondents' land at the precise altitude where its planes now fly, there would be a partial taking, even though none of the supports of the structure rested on the land. 10 The reason is that there would be an intrusion so immediate and direct as to subtract from the owner's full enjoyment of the property and to limit his exploitation of it. While the owner does not in any physical manner occupy that stratum of airspace or make use of it in the conventional sense, he does use it in somewhat the same sense that space left between buildings for the purpose of light and air is used. The superadjacent airspace at this low altitude is so close to the land that continuous invasions of it affect the use of the surface of the land itself. We think that the landowner, as an incident to his ownership, has a claim to it and that invasions of it are in the same category as invasions of the surface. 11 In this case, as in Portsmouth Harbor Land & Hotel Co. v. United States, supra, the damages were not merely consequential. They were the product of a direct invasion of respondents' do- [328 U.S. 256, 266] main. As stated in United States v. Cress, 243 U.S. 316, 328 , 37 S.Ct. 380, 385, '... it is the character of the invasion, not the amount of damage resulting from it, so long as the damage is substantial, that determines the question whether it is a taking.' We said in United States v. Powelson, supra, 319 U.S. at page 279, 63 S.Ct. at page 1054, that while the meaning of 'property' as used in the Fifth Amendment was a federal question, 'it will normally obtain its content by reference to local law.' If we look to North Carolina law, we reach the same result. Sovereignty in the airspace rests in the State 'except where granted to and assumed by the United States.' Gen.Stats. 1943, 63-11. The flight of aircraft is lawful 'unless at such a low altitude as to interfere with the then existing use to which the land or water, or the space over the land or water, is put by the owner, or unless so conducted as to be imminently dangerous to persons or property lawfully on the land or water beneath.' Id., 63-13. Subject to that right of flight, 'ownership of the space above the lands and waters of this State is declared to be vested in the several owners of the surface beneath.' Id. 63-12. Our holding that there was an invasion of respondents' property is thus not inconsistent with the local law governing a landowner's claim to the immediate reaches of the superadjacent airspace.

The airplane is part of the modern environment of life, and the inconveniences which it causes are normally not compensable under the Fifth Amendment. The airspace, apart from the immediate reaches above the land, is part of the public domain. We need not determine at this time what those precise limits are. Flights over private land are not a taking, unless they are so low and so frequent as to be a direct and immediate interference with the enjoyment and use of the land. We need not speculate on that phase of the present case. For the findings of the Court [328 U.S. 256, 267] of Claims plainly establish that there was a diminution in value of the property and that the frequent, low-level flights were the direct and immediate cause. We agree with the Court of Claims that a servitude has been imposed upon the land. II. By 145(1) of the Judicial Code, 28 U.S.C. 250(1), 28 U.S.C.A . 250(1), the Court of Claims has jurisdiction to hear and determine 'All claims (except for pensions) founded upon the Constitution of the United States or ... upon any contract, express or implied, with the Government of the United States.' We need not decide whether repeated trespasses might give rise to an implied contract. Cf. Portsmouth Harbor Land & Hotel Co. v. United States, supra. If there is a taking, the claim is 'founded upon the Constitution' and within the jurisdiction of the Court of Claims to hear and determine. See Hollister v. Benedict & Burnham Mfg. Co., 113 U.S. 59, 67 , 5 S.Ct. 717, 721; Hurley v. Kincaid, 285 U.S. 95, 104 , 52 S.Ct. 267, 269; Yearsley v. W. A. Ross Construction Co., 309 U.S. 18, 21 , 60 S.Ct. 413, 415. Thus, the jurisdiction of the Court of Claims in this case is clear. III. The Court of Claims held, as we have noted, that an easement was taken. But the findings of fact contain no precise description as to its nature. It is not described in terms of frequency of flight, permissible altitude, or type of airplane. Nor is there a finding as to whether the easement taken was temporary or permanent. Yet an accurate description of the property taken is essential, since that interest vests in the United States. United States v. Cress, supra, 243 U.S. 328, 329 , 37 S.Ct. 385, 386, and cases cited. It is true that the Court of Claims stated in its opinion that the easement taken was permanent. But the deficiency in findings cannot be rectified by statements in the opinion. United States v. Esnault-Pelterie, 299 U.S. 201, 205 , 206 S., 57 S.Ct. 159, 161, 162; United States v. Seminole Nation, 299 U.S. 417, 422 , 57 S.Ct. 283, 287. Findings of fact on every 'material issue' are a statutory [328 U.S. 256, 268] requirement. 53 Stat. 752, 28 U.S.C. 288, 28 U.S.C.A. 288. The importance of findings of fact based on evidence is emphasized here by the Court of Claims' treatment of the nature of the easement. It stated in its opinion that the easement was permanent because the United States 'no doubt intended to make some sort of arrangement whereby it could use the airport for its military planes whenever it had occasion to do so.' (60 F. Supp. 758.) That sounds more like conjecture rather than a conclusion from evidence; and if so, it would not be a proper foundation for liability of the United States. We do not stop to examine the evidence to determine whether it would support such a finding, if made. For that is not our function. United States v. Esnault-Pelterie, supra, 299 U.S. at page 206, 57 S.Ct. at page 162. Since on this record it is not clear whether the easement taken is a permanent or a temporary one, it would be premature for us to consider whether the amount of the award made by the Court of Claims was proper. The judgment is reversed and the cause is remanded to the Court of Claims so that it may make the necessary findings in conformity with this opin on. REVERSED. Mr. Justice JACKSON took no part in the consideration or decision of this case. Mr. Justice BLACK, dissenting. The Fifth Amendment provides that 'private property' shall not 'be taken for public use, without just compensation.' The Court holds today that the Government has 'taken' respondents' property by

repeatedly flying Army bombers directly above respondents' land at a height of eighty-three feet where the light and noise from these planes caused respondents to lose sleep and their chickens to be killed. Since the effect of the Court's decision is [328 U.S. 256, 269] to limit, by the imposition of relatively absolute Constitutional barriers, possible future adjustments through legislation and regulation which might become necessary with the growth of air transportation, and since in my view the Constitution does not contain such barriers, I dissent. The following is a brief statement of the background and of the events that the Court's opinion terms a 'taking' within the meaning of the Fifth Amendment: Since 1928 there has been an airfield some eight miles from Greensboro, North Carolina. In April, 1942, this airport was taken over by the Greensboro-High Point Municipal Airport Authority and it has since then operated as a municipal airport. In 1942 the Government, by contract, obtained the right to use the field 'concurrently, jointly, and in common' with other users. Years before, in 1934, respondents had bought their property, located more than one-third of a mile from the airport. Private planes from the airport flew over their land and farm buildings from 1934 to 1942 and are still doing so. But though these planes disturbed respondents to some extent, Army bombers, which started to fly over the land in 1942 at a height of eighty-three feet, disturbed them more because they were larger, came over more frequently, made a louder noise, and at night a greater glare was caused by their lights. This noise and glare disturbed respondents' sleep, frightened them, and made them nervous. The noise and light also frightened respondents' chickens so much that many of them flew against buildings and were killed. The Court's opinion seems to indicate that the mere flying of planes through the column of air directly above respondents' land does not constitute a 'taking'. Consequently, it appears to be noise and glare, to the extent and under the circumstances shown here, which make the government a seizer of private property. But the allegation [328 U.S. 256, 270] of noise and glare resulting in damages, constitutes at best an action in tort where there might be recovery if the noise and light constituted a nuisance, a violation of a statute,1 or were the result of negligence. 2 But the Government has not consented to be sued in the Court of Claims except in actions based on express or implied contract. And there is no implied contract here, unless by reason of the noise and glare caused by the bombers the Government can be said to have 'taken' respondents' property in a Constitutional sense. The concept of taking property as used in the Constitution has heretofore never been given so sweeping a meaning. The Court's opinion presents no case where a man who makes noise or shines light onto his neighbor's property has been ejected from that property for wrongfully taking possession of it. Nor would anyone take seriously a claim that noisy automobiles passing on a highway are taking wrongful possession of the homes located thereon, or that a city elevated train which greatly interferes with the sleep of those who live next to it wrongfully takes their property. Even the one case in this Court which in considering the sufficiency of a complaint gave the most elastic meaning to the phrase 'private property be taken' as used in the Fifth Amendment, did not go so far. Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S. [328 U.S. 256, 271] 327, 43 S.Ct. 135. I am not willing, nor do I think the Constitution and the decisions authorize me to extend that phrase so as to guarantee an absolute Constitutional right to relief not subject to legislative change, which is based on averments that at best show mere torts committed by Government agents while flying over land. The future adjustment of the rights and remedies of property owners, which might be found necessary because of the flight of planes at safe altitudes, should, especially in view of the imminent expansion of air navigation, be left where I think the Constitution left it, with Congress. Nor do I reach a different conclusion because of the fact that the particular circumstance which under the Court's opinion makes the tort here absolutely actionable, is the passing of planes through a column of air at an elevation of eighty-three feet directly over respondents' property. It is inconceivable to me that the Constitution guarantees that the airspace of this Nation needed for air navigation, is owned by the particular persons who happen to own the land beneath to the same degree as they own the surface below. 3 No rigid Constitutional rule, in my judgment, commands

that the air must be considered as marked off into separate compartments by imaginary metes and bounds in order to synchronize air ownership with land ownership. I think that the Constitution entrusts Congress with full power to control all navigable airspace. Congress has already acted under that power. It has by statute, 44 Stat. 568, 52 Stat. 973, provided that 'the United States of America is ... to possess and exercise complete and exclusive national sovereignty in the [328 U.S. 256, 272] air space (over) the United States.' This was done under the assumption that the Commerce Clause of the Constitution gave Congress the same plenary power to control navigable airspace as its plenary power over navigable waters. H. Rep. No. 572, 69th Cong., 1st Sess., p. 10; H. Rep. No. 1162, 69th Cong., 1st Sess., p. 14; United States v. Commodore Park, Inc., 324 U.S. 386 , 65 S.Ct. 803. To make sure that the airspace used for air navigation would remain free, Congress further declared that 'navigable airspace shall be subject to a public right of freedom of interstate and foreign air navigation,' and finally stated emphatically that there exists 'a public right of freedom of transit ... through the navigable airspace of the United States.' Congress thus declared that the air is free, not subject to private ownership, and not subject to delimitation by the courts. Congress and those acting under its authority were the only ones who had power to control and regulate the flight of planes. 'Navigable air-space' was defined as 'airspace above the minimum safe altitudes of flight prescribed by the Civil Aeronautics Authority.' 49 U.S.C. 180, 49 U.S.C.A. 180. Thus, Congress has given the Civil Aeronautics Authority exclusive power to determine what is navigable airspace subject to its exclusive control. This power derives specifically from the Section which authorizes the Authority to prescribe 'air traffic rules governing the flight of, and for the navigation, protection, and identification of, aircraft, including rules as to safe altitudes of flight and rules for the prevention of collisions between aircraft, and between aircraft and land or water vehicles.' 49 U.S.C.A. 551. Here there was no showing that the bombers flying over respondents' land violated any rule or regulation of the Civil Aeronautics Authority. Yet, unless we hold the Act unconstitutional, at least such a showing would be necessary before the courts could act without interfering with the exclusive authority which Congress gave to the administrative agency. Not even a [328 U.S. 256, 273] showing that the Authority has not acted at all would be sufficient. For in that event, were the courts to have any authority to act in this case at all, they should stay their hand till the Authority has acted. The broad provisions of the Congressional statute cannot properly be circumscribed by making a distinction as the Court's opinion does between rules of safe altitude of flight while on the level of cross-country flight and rules of safe altitude during landing and taking off. First, such a distinction can not be maintained from the practical standpoint. It is unlikely that Congress intended that the Authority prescribe safe altitudes for planes making cross-country flights, while at the same time it left the more hazardous landing and take-off operations unregulated. The legislative history, moreover, clearly shows that the Authority's power to prescribe air traffic rules includes the power to make rules governing landing and take-off. Nor is the Court justified in ignoring that history by labeling rules of safe altitude while on the level of cross-country flight as rules prescribing the safe altitude proper and rules governing take-off and landing as rules of operation. For the Conference Report explicitly states that such distinctions were purposely eliminated from the original House Bill in order that the Section on air traffic rules 'might be given the broadest construction by the ... ( Civil Aeronautics Authority) ... and the courts.' 4 In construing the statute narrowly the Court [328 U.S. 256, 274] thwarts the intent of Congress. A proper broad construction, such as Congress commanded, would not permit the Court to decide what it has today without declaring the Act of Congress unconstitutional. I think the Act given the broad construction intended is constitutional. No greater confusion could be brought about in the coming age of air transportation than that which would result were courts by Constitutional interpretation to hamper Congress in its efforts to keep the air free. Old concepts of private ownership of land should not be introduced into the field of air regulation. I have no doubt that Congress will, if not handicapped by judicial interpretations of the Constitution, preserve the freedom of the air, and at the same time, satisfy the just claims of aggrieved persons. The noise of newer, larger, and more powerful planes may grow louder and

louder and disturb people more and more. But the solution of the problems precipitated by these technological advances and new ways of living cannot come about through the application of rigid Constitutional restraints formulated and enforced by the courts. What adjustments may have to be made, only the future can reveal. It seems certain, however, [328 U.S. 256, 275] the courts do not possess the techniques or the personnel to consider and act upon the complex combinations of factors entering into the problems. The contribution of courts must be made through the awarding of damages for injuries suffered from the flying of planes, or by the granting of injunctions to prohibit their flying. When these two simple remedial devices are elevated to a Constitutional level under the Fifth Amendment, as the Court today seems to have done, they can stand as obstacles to better adapted techniques that might be offered by experienced experts and accepted by Congress. Today's opinion is, I fear, an opening wedge for an unwarranted judicial interference with the power of Congress to develop solutions for new and vital and national problems. In my opinion this case should be reversed on the ground that there has been no 'taking' in the Constitutional sense. Mr. Justice BURTON joins in this dissent.

Footnotes
[ Footnote 1 ] A 30 to 1 glide angle means one foot of elevation or descent for every 30 feet of horizontal distance. [ Footnote 2 ] Military planes are subject to the rules of the Civil Aeronautics Board where, as in the present case, there are no Army or Navy regulations to the contrary. Cameron v. Civil Aeronautics Board, 7 Cir., 140 F.2d 482. [ Footnote 3 ] The house is approximately 16 feet high, the barn 20 feet, and the tallest tree 65 eet. [ Footnote 4 ] 'Air commerce' is defined as including 'any operation or navigation of aircraft which directly affects, or which may endanger safety in, interstate, overseas, or foreign air commerce.' 49 U.S.C. 401(3), 49 U.S. C.A. 401(3). [ Footnote 5 ] 1 Coke, Institutes, 19th Ed. 1832, ch. 1, 1(4a); 2 Blackstone, Commentaries, Lewis Ed. 1902, p. 18; 3 Kent, Commentaries, Gould Ed. 1896, p. 621. [ Footnote 6 ] The destruction of all uses of the property by flooding has been held to constitute a taking. Pumpelly v. Green Bay Co., 13 Wall. 166; United States v. Lynah, 188 U.S. 445 , 23 S.Ct. 349; United States v. Welch, 217 U.S. 333 , 30 S.Ct. 527, 28 L.R.A., N.S., 385, 19 Ann.Cas. 680. [ Footnote 7 ] It was stated in United States v. General Motors Corp., 323 U.S. 373, 378 , 65 S.Ct. 357, 359, 156 A.L.R. 390, 'The courts have held that the deprivation of the former owner rather than the accretion of a right or interest to the sovereign constitutes the taking. Governmental action short of acquisition of title or occupancy has been held, if its effects are so complete as to deprive the owner of all or most of his interest in the subject matter, to amount to a taking.' The present case falls short of the General Motors case. This is not a case where the United States has merely destroyed property. It is using a part of it for the flight of its planes. Cf. Warren Township School Dist. v. Detroit, 308 Mich. 460, 14 N.W.2d 134; Smith v. New England Aircraft Co., 270 Mass. 511, 170 N.E. 385, 69 A. L.R. 300; Burnham v. Beverly Airways, Inc., 311 Mass. 628, 42 N.E.2d 575. [ Footnote 8 ] On remand the allegations in the petition were found not to be supported by the facts. 64 Ct.Cl. 572. [ Footnote 9 ] Baten's Case, 9 Coke R. 53b; Meyer v. Metzler, 51 Cal. 142; Codman v. Evans, 7 Allen 431, 89 Mass. 431; Harrington v. McCarthy, 169 Mass. 492, 48 N.E. 278, 61 Am.St.Rep. 298. See Ball, The Vertical Extent of Ownership in Land, 76 U.Pa.L.Rev. 631, 658-671. [ Footnote 10 ] It was held in Butler v. Frontier Telephone Co., 186 N.Y. 486, 79 N.E. 716, 11 L.R.A.,N.S., 920, 116 Am.St.Rep. 563, 9 Ann.Cas. 858, that ejectment would lie where a telephone

wire was strung across the plaintiff's property, even though it did not touch the soil. The court stated pages 491, 492 of 186 N.Y., page 718 of 79 N.E.: '... an owner is entitled to the absolute and undisturbed possession of every part of his premises, including the space above, as much as a mine beneath. If the wire had been a huge cable, several inches thick and but a foot above the ground, there would have been a difference in degree, but not in principle. Expand the wire into a beam supported by posts standing upon abutting lots without touching the surface of plaintiff's land, and the difference would still be one of degree only. Enlarge the beam into a bridge, and yet space only would be occupied. Erect a house upon the bridge, and the air above the surface of the land would alone be disturbed.' [ Footnote 11 ] See Bouve, Private Ownership of Navigable Airspace Under the Commerce Clause, 21 Amer.Bar Assoc.Journ. 416, 421-422; Hise, Ownership and Sovereignty of the Air, 16 Ia.L.Rev. 169; Eubank, The Doctrine of the Airspace Zone of Effective Possession, 12 Boston Univ.L.Rev. 414. [ Footnote 1 ] Neiswonger v. Goodyear Tire & Rubber Co., D.C., 35 F.2d 761. [ Footnote 2 ] As to the damage to chickens, Judge Madden, dissenting from this judgment against the Government said, 'When railroads were new, cattle in fields in sight and hearing of the trains were alarmed, thinking that the great moving objects would turn aside and harm them. Horses ran away at the sight and sound of a train or a threshing machine engine. The farmer's chickens have to get over being alarmed at the incredible racket of the tractor starting up suddenly in the shed adjoining the chicken house. These sights and noises are a part of our world, and airplanes are now and will be to a greater degree, likewise a part of it. These disturbances should not be treated as torts, in the case of the airplane, any more than they are so treated in the case of the railroad or public highway.' [ Footnote 3 ] The House in its report on the Air Commerce Act of 1926 stated: 'The public right of flight in the navigable air space owes its source to the same constitutional basis which, under decisions of the Supreme Court, has given rise to a public easement of navigation in the navigable waters of the United States, regardless of the ownership of adjacent or subjacent soil'. House Report No. 572, 69th Congress, First Session, page 10. [ Footnote 4 ] The full statement read: 'The substitute provides that the Secretary shall by regulation establish air traffic rules for the navigation, protection, and identification of all aircraft, including rules for the safe altitudes of flight and rules for the prevention of collisions between vessels and aircraft. The provision as to rules for taking off and alighting, for instance, was eliminated as unnecessary specification, for the reason that such rules are but one class of air traffic rules for the navigation and protection of aircraft. Rules as to marking were eliminated for the reason that such rules were fairly included within the scope of air rules for the identification of aircraft. No attempt is made by either the Senate bill or the House amendment to fully define the various classes of rules that would fall within the scope of air traffic traffic rules, as, for instance, lights and signals along airways and at air-ports and upon emergency landing fields. In general, these rules would relate to the same subjects as those covered by navigation laws and regulations and by the various State motor vehicle traffic codes. As noted above, surplusage was eliminated in specifying particular air traffic rules in order that the term might be given the broadest possible construc ion by the Department of Commerce and the courts.' House Report No. 1162, 69th Congress, 1st Session, p. 12. That the rules for landing and take-off are rules prescribing 'minimum safe altitudes of flight' is shown by the following further statement in the House Report: '... the minimum safe altitudes of flight ... would vary with the terrain and location of cities and would coincide with the surface of the land or water at airports.' Id. at p. 14. Case: PPI v. Comelec, 244 SCRA 272 (1995)

Phil. Press Institute, Inc. v. Comelec 244 SCRA 272 Facts: Petition for Certiorari and Prohibition with prayer for the issuance of a Temporary Restraining Order. PPI, a non-stock, non-profit organization of newspaper and magazine publishers, asks us to declare Comelec Resolution No. 2772 unconstitutional and void on the ground that it violates the prohibition imposed by the Constitution upon the government, and any of its agencies, against the taking of private property for public use without just compensation. Petitioner also contends that the 22 March 1995 letter directives of Comelec requiring publishers to give free Comelec Space and at the same time process raw data to make it camera-ready, constitute impositions of involuntary servitude, contrary to the provisions of Section 18 (2), Article III of the 1987 Constitution. Finally, PPI argues that Section 8 of Comelec Resolution No. 2772 is violative of the constitutionally guaranteed freedom of speech, of the press and of expression. On the other hand, The Office of the Solicitor General filed its Comment on behalf of respondent Comelec alleging that Comelec Resolution No. 2772 does not impose upon the publishers any obligation to provide free print space in the newspapers as it does not provide any criminal or administrative sanction for non-compliance with that Resolution. According to the Solicitor General, the questioned Resolution merely established guidelines to be followed in connection with the procurement of Comelec space, the procedure for and mode of allocation of such space to candidates and the conditions or requirements for the candidates utilization of the Comelec space procured. At the same time, however, the Solicitor General argues that even if the questioned Resolution and its implementing letter directives are viewed as mandatory, the same would nevertheless be valid as an exercise of the police power of the State. The Solicitor General also maintains that Section 8 of Resolution No. 2772 is a permissible exercise of the power of supervision or regulation of the Comelec over the communication and information operations of print media enterprises during the election period to safeguard and ensure a fair, impartial and credible election.

Issue: Whether or not Resolution No. 2772 issued by respondent Commission on Elections is
valid.

Held: Petition for Certiorari and Prohibition is GRANTED in part and Section 2 of Resolution No.
2772 in its present form and the related letter-directives dated 22 March 1995 are hereby SET ASIDE as null and void, and the Temporary Restraining Order is hereby MADE PERMANENT. The Petition is DISMISSED in part, to the extent it relates to Section 8 of Resolution No. 2772. No pronouncement as to costs. Section 2 of Resolution No. 2772, in its present form and as interpreted by Comelec in its 22 March 1995 letter directives, purports to require print media enterprises to donate free print space to Comelec. As such, Section 2 suffers from a fatal constitutional vice and must be set aside and nullified. To the extent it pertains to Section 8 of Resolution No. 2772, the Petition for Certiorari and Prohibition must be dismissed for lack of an actual, justiciable case or controversy.

Priority in Expropriation
Case: Filstream International v. CA, 284 SCRA 716 (1998) [G.R. No. 125218. January 23, 1998]

FILSTREAM INTERNATIONAL INCORPORATED, petitioner, vs. COURT OF APPEALS, JUDGE FELIPE S. TONGCO and THE CITY OF MANILA, respondent.

[G.R. No. 128077. January 23, 1998]

FILSTREAM INTERNATIONAL INCORPORATED, petitioner, vs., COURT OF APPEALS, ORLANDO MALIT, ANTONIO CAGUIAT, ALICIA CABRERA, ARMANDO LACHICA, JACINTO CAGUIAT, GLORIA ANTONIO, ELIZALDE NAVARRA, DOLORES FUENTES, SUSANA ROY, ANTONIO IBANEZ, BENIGNO BASILIO, LUCERIA DEMATULAC, FLORENCIA GOMEZ, LAZARO GOMEZ, JOSE GOMEZ, VENANCIO MANALOTO, CRISTINO UMALI, DEMETRIA GATUS, PRISCILLA MALONG, DOMINGO AGUILA, RAMON SAN AGUSTIN, JULIAN FERRER, JR., FRANCISCO GALANG, FLORENTINO MALIWAT, SEVERINA VILLAR, TRINIDAD NAGUIT, JOSE NAGUIT, FORTUNATO AGUSTIN CABRERA, GAUDENCIO INTAL, DANILO DAVID, ENRIQUE DAVID, VICENTE DE GUZMAN, POLICARPIO LUMBA, BELEN PALMA, ELEN SOMVILLO, LEONARDO MANICAD, OPRENG MICLAT, BENITA MATA, GREGORIO LOPEZ, MARCELINA SAPNO, JESUS MERCADO, and CALIXTO GOMEZ, respondent. DECISION
FRANCISCO, J.:

In resolving the instant petitions, the Court is tasked to strike a balance between the contending interests when the state exercised its power of eminent domain. On one side we have the owners of the property to be expropriated who must be duly compensated for the loss of their property, while on the other is the State which must take the property for public use. Petitioner, Filstream International Inc., is the registered owner of the properties subject of this dispute consisting of adjacent parcels of land situated in Antonio Rivera Street, Tondo II, Manila, with a total area of 3,571.10 square meters and covered by T.C.T. Nos. 203937, 203936, 169198, 169199, 169200 and 169202 of the Register of Deeds of Manila. On January 7, 1993, petitioner filed an ejectment suit before the Metropolitan Trial Court of Manila (Branch 15) docketed as Civil Case No. 140817-CV against the occupants of the abovementioned parcels of land (herein private respondents in G.R. No. 128077) on the grounds of termination of the lease contract and non-payment of rentals. Judgment was rendered by the MTC on September 14, 1993 ordering private respondents to vacate the premises and pay back rentals to petitioner.
[1]

Not satisfied, private respondents appealed the decision to the Regional Trial Court of Manila, Branch 4 (Civil Case No. 93-68130) which in turn affirmed the decision of the MTC in its decision dated February 22, 1994. Still not content, private respondents proceeded to the Court of Appeals via a petition for review (CA-G.R. SP No. 33714). The result however remained the same as the CA affirmed the decision of the RTC in its decision dated August 25, 1994.
[2]

Thereafter, no further action was taken by the private respondents, as a result of which the decision in the ejectment suit became final and executory. However, it appeared that during the pendency of the ejectment proceedings private respondents filed on May 25, 1993, a complaint for Annulment of Deed of Exchange against petitioner Filstream which was docketed in Civil Case No. 93-66059 before the RTC of Manila, Branch 43. It was at this stage that respondent City of Manila came into the picture when the city government approved Ordinance No. 7813 on November 5, 1993, authorizing Mayor Alfredo S. Lim to initiate the acquisition by negotiation, expropriation, purchase, or other legal means certain parcels of land registered under T.C.T. Nos. 169193, 169198, 169190, 169200, 169202, and 169192 of the Registry of Deeds of Manila which formed part of the properties of petitioner then occupied by private respondents. Subsequently, the City of Manila approved Ordinance No. 7855 declaring the expropriation of certain parcels of land situated along Antonio Rivera and Fernando Ma. Guerero streets in Tondo, Manila which were owned by Mr. Enrique Quijano Gutierez, petitioners predecessor-in-interest. The said properties were to be sold and distributed to qualified tenants of the area pursuant to the Land Use Development Program of the City of Manila.
[3] [4]

On May 23, 1994, respondent City of Manila filed a complaint for eminent domain (Civil Case No. 94-70560) before the RTC of Manila, Branch 42, seeking to expropriate the aforecited parcels of land owned by petitioner Filstream which are situated at Antonio Rivera Street, Tondo II, Manila.
[5] [6]

Pursuant to the complaint filed by respondent City of Manila,the trial court issued a Writ of Possession in favor of the former which ordered the transfer of possession over the disputed premises to the City of Manila.
[7]

At this juncture, petitioner Filstream filed a motion to dismiss the complaint for eminent domain as well as a motion to quash the writ of possession. The motion to dismiss was premised on the following grounds: no valid cause of action; the petition does not satisfy the requirements of public use and a mere clandestine maneuver to circumvent the writ execution issued by the RTC of Manila, Branch 4 in the ejectment suit; violation of the constitutional guarantee against nonimpairment of obligation and contract; price offered was too low hence violative of the just compensation provision of the constitution and the said amount is without the certification of the City Treasurer for availability of funds. With respect to the motion to quash the writ of possession, petitioner raised the following objections: failure to comply with Section 2 of Rule 67 of the Rules of Court, Ordinance No. 7813 is a void enactment for it was approved without a public hearing and violative of the constitutional guarantee against impairment of obligation and contracts; the price is too low and unconscionable violating the just compensation provision of the constitution, and the said writ is tainted with infirmity considering the absence of a certification from the City of Manila that there is an immediately available fund for the subject expropriation.
[8] [9]

Respondent City of Manila filed its opposition to petitioner Filstreams two motion and to which petitioner accordingly filed a reply. On September 30, 1994, the RTC of Manila, Branch 42, issued an order denying petitioner Filstreams motion to dismiss and the motion to quash the Writ of Possession and declared as follows:
[10] [11]

IN FINE, the defendants motion to dismiss and motion to quash writ of possession are both without merit and are hereby DENIED and the subject parcels of lands covered by TCT Nos. 203937, 203936, 169198, 169199, 169200, and 169202 (of the Register of Deeds of Manila) located at Antonio Rivera Street, Tondo II, Manila with a total area of 3,571.10 square meters are hereby declared CONDEMNED in favor of the City of Manila for distribution and resale to all poor and landless qualified residents/tenants in the said area under the citys land-for-the-landless program upon payment of just compensation which is yet to be determined by this Court.[12]

Petitioner filed a motion for reconsideration as well as a supplemental motion for reconsideration seeking the reversal of the above-quoted order but the same were denied. Still, petitioner filed a subsequent motion to be allowed to file a second motion for reconsideration but it was also denied.
[13] [14] [15]

Aggrieved, petitioner filed on March 31, 1996, a Petition for Certiorari with the Court of Appeals (CA-G.R. SP No. 36904) seeking to set aside the September 30, 1994 order of the RTC of Manila, Branch 42. However, on March 18, 1996, respondent CA issued a resolution dismissing the petition in this wise:
It appearing that the above-entitled petition is insufficient in form and substance -- it does not comply with Section 2(a), Rule 6 of the Revised Internal Rules of the Court of Appeals which requires that the petition shall be x x x accompanied by x x x other pertinent documents and papers, aside from the fact that copies of the pleadings attached to the petition are blurred and unreadable -- this Court resolved to summarily DISMISS the same (petition).[16]

Petitioner filed a motion for reconsideration and attached clearer copies of the pertinent documents and papers pursuant to Section 2(a) Rule 6 of the Revised Internal Rules of the Court of Appeals. But on May 20, 1996, respondent CA issued a resolution denying the motion as petitioner failed to submit clearer and readable copies of the pleadings. This prompted petitioner to proceed to this Court giving rise to the instant petition for review on certiorari under Rule 45 and docketed herein as G.R. No. 125218, assailing the dismissal of its petition by the CA in its resolution dated March 18, 1996 as well as that of its motion for reconsideration in the resolution dated May 20, 1996.
[17]

Meanwhile, owing to the finality of the decision in the ejectment suit (Civil Case No 140817 CV), the MTC of Manila, Branch 15, upon motion of petitioner Filstream, issued a Writ of Execution as well as a Notice to Vacate the disputed premises. Private respondents filed a Motion to Recall/Quash the Writ of Execution and Notice to Vacate alleging the existence of a supervening event in that the properties subject of the dispute have already been ordered condemned in an expropriation proceeding in favor of the City of Manila for the benefit of the qualified occupants thereof, thus execution shall be stayed. Petitioner opposed the motion, reiterating that the decision in the ejectment case is already final and executory and disputed private respondents right to interpose the expropriation proceedings as a defense because the latter were not parties to the same.
[18] [19]

For its part, the City of Manila filed on March 13, 1996, a motion for intervention with prayer to stay/quash the writ of execution on the ground that it is the present possessor of the property subject of execution. In its order dated March 14, 1996, the MTC of Manila, Branch 14, denied private respondents motion as it found the allegations therein bereft of merit and upheld the issuance of the Writ of Execution and Notice to Vacate in petitioners favor. Subsequently, the trial court also denied the motion filed by the City of Manila.
[20]

On April 22, 1996, the trial court issued an order commanding the demolition of the structure erected on the disputed premises. To avert the demolition, private respondents filed before the RTC of Manila, Branch 14, a Petition for Certiorari and Prohibition with prayer for the issuance of a temporary restraining order and preliminary injunction (docketed as Civil Case No. 96-78098). On April 29, 1996, the RTC of Manila, Branch 33, issued a TRO enjoining the execution if the writ issued in Civil Case No. 140817-CV by the MTC of Manila, Branch 14. Subsequently, the RTC issued a writ of preliminary injunction on May 14, 1996.
[21] [22]

On May 15, 1996, the City of Manila filed its Petition for Certiorari and Prohibition with prayer for the issuance of a temporary restraining order and preliminary injunction which was raffled to Branch 23 of the RTC of Manila (docketed as Civil Case No. 96-78382), seeking the reversal of the orders issued by the MTC of Manila, Branch 14, which denied its motion to intervene and quash the writ of execution in Civil Case No. 140817-CV. Thereafter, upon motion filed by the City of Manila, an order was issued by the RTC of Manila, Branch 10, ordering the consolidation of Civil Case No. 96-78382 with Civil Case No. 96-78098 pending before Branch 14 of the RTC of Manila. On May 21, 1996, the RTC of Manila, Branch 14, issued an injunction in Civil Case No. 96-78098 enjoining the implementation of the writ of execution until further orders from the court. Petitioner Filstream filed a Motion to Dissolve the Writ of Preliminary Injunction and to be allowed to post a counter-bond but the trial court denied the same. Filstream then filed a motion for reconsideration from the order of denial but pending resolution of this motion for voluntary inhibition of the presiding judge of the RTC of Manila, Branch 14. The motion for inhibition was granted and as a result, the consolidated cases (Civil Case No. 96-78382 and 96-78098) were re-raffled to the RTC of Manila, Branch 33.
[23] [24] [25]

During the proceedings before the RTC of Manila, Branch 33, petitioner Filstream moved for the dismissal of the consolidated cases (Civil Case No. 96-78382 and 96-78098) for violation of Supreme Court Circular No. 04-94 (forum shopping) because the same parties, causes of action and subject matter involved therein have already been disposed of in the decision in the ejectment case (Civil Case No. 140817) which has already become final and executory prior to the filing of these consolidated cases. On December 9, 1996, an order was issued by the RTC of Manila, Branch 33, ordering the dismissal of Civil Cases Nos. 96-78382 and 96-78098 for violation of Supreme Court Circular No. 04-94. Immediately thereafter, petitioner Filstream filed an Ex-parte Motion for Issuance of an Alias Writ of Demolition and Ejectment and a supplemental motion to the same dated January 10 and 13, 1997, respectively, before the MTC of Manila, Branch 15, which promulgated the decision in the ejectment suit (Civil Case No. 140817-CV). On January 23, 1997, the court granted the motion and issued the corresponding writ of demolition.
[26] [27]

As a consequence of the dismissal of the consolidated cases, herein private respondents filed a Petition for Certiorari and Prohibition with prayer for the issuance of a temporary restraining order and preliminary injunction before the Court of Appeals (docketed as CA-G.R. SP No. 43101) assailing the above-mentioned order of dismissal by the RTC of Manila, Branch 33, as having been issued with grave abuse of discretion tantamount to lack or in excess of jurisdiction.

[28]

In a resolution dated January 28, 1997, the Court of Appeals granted herein private respondents prayer for the issuance of a temporary restraining order and directed the MTC of Manila, Branch 15, to desist from implementing the order of demolition dated January 23, 1997, unless otherwise directed.
[29]

At the conclusion of the hearing for the issuance of a writ of preliminary injunction, the Court

of Appeals, in its resolution dated February 18, 1997, found merit in private respondents allegations in support of their application of the issuance of the writ and granted the same, to wit:
Finding that the enforcement or implementation of the writ of execution and notice to vacate issued in Civil Case No. 140817-CV, the ejectment case before respondent Judge Jiro, during the pendency of the instant petition, would probably be in violation of petitioners right, and would tend to render the judgment in the instant case ineffectual, and probably work injustice to the petitioners, the application for the issuance of a writ of preliminary injunction is hereby GRANTED. WHEREFORE, upon the filing of a bond in the amount of P150,000.00, let a writ of preliminary injunction be issued enjoining respondents, their employees, agents, representatives and anyone acting in their behalf from enforcing or executing the writ of execution and notice to vacate issued in Civil Case No. 140817-CV of the court of respondent Judge Jiro, or otherwise disturbing the status quo, until further orders of this Court.[30]

In turn, petitioner Filstream is now before this Court via a Petition for Certiorari under Rule 65 (G.R. No. 128077), seeking to nullify the Resolutions of the Court of Appeals dated January 28, 1997 and February 18, 1997 which granted herein private respondents prayer for a TRO and Writ of Preliminary Injunction, the same being null and void for having been issued in grave abuse of discretion. Upon motion filed by petitioner Filstream, in order to avoid any conflicting decision on the legal issues raised in the petitions, the Court ordered that the later petition, G.R. No. 128077 be consolidated with G.R. No. 128077 in the resolution of March 5, 1997.
[31]

The issue raised in G.R. No. 125218 is purely procedural and technical matter. Petitioner takes exception to the resolutions of respondent CA dated March 18, 1996 and May 20, 1996 which ordered the dismissal of its Petition for Certiorari for non-compliance with Sec. 2(a) of Rule 6 of the Revised Internal Rules of the Court of Appeals by failing to attach to its petition other pertinent documents and papers and for attaching copies of pleadings which are blurred and unreadable. Petitioner argues that respondent appellate court seriously erred in giving more premium to form rather than the substance. We agree with the petitioner. A strict adherence to the technical and procedural rules in this case would defeat rather than meet the ends of justice as it would result in the violation of the substantial rights of petitioner. At stake in the appeal filed by petitioner before the CA is the exercise of their property rights over the disputed premises which have been expropriated and have in fact been ordered condemned in favor of the City of Manila. In effect, the dismissal of their appeal in the expropriation proceedings based on the aforementioned grounds is tantamount to a deprivation of property without due process of law as it would automatically validate the expropriation proceedings based on the aforementioned grounds is tantamount to a deprivation of property without due process of law as it would automatically validate the expropriation proceedings which the petitioner is still disputing. It must be emphasized that where substantial rights are affected, as in this case, the stringent application of procedural rules may be relaxed if only to meet the ends of substantial justice. In these instances, respondent CA can exercise its discretion to suspend its internal rules and allow the parties to present and litigate their causes of action so that the Court can make an actual and complete disposition of the issues presented in the case. Rather than simply dismissing the petition summarily for non-compliance with respondent courts internal rules, respondent CA should have instead entertained petitioner Filstreams petition for review on Certiorari, and ordered petitioner to submit the corresponding pleadings which it deems relevant and replace those which

are unreadable. This leniency could not have caused any prejudiced to the rights of the other parties. With regard to the other petition, G.R. No. 128077, petitioner Filstream objects to the issuance by respondent CA of the restraining order and the preliminary injunction enjoining the execution of the writ of demolition issued in the ejectment suit (Civil Case No. 140817-CV) as an incident to private respondents pending petition assailing the dismissal by the RTC of Manila, Branch 33, of the consolidated petitions for certiorari filed by private respondents and the City of Manila on the ground of forum shopping. The propriety of the issuance of the restraining order and the writ of preliminary injunction is but a mere incient to the actual controversy which is rooted in the assertion of the conflicting rights of the parties in this case over the disputed premises. In order to determine whether private respondents are entitled to the injunctive reliefs granted by respondent CA, we deemed it proper to extract the source of discord. Petitioner Filstream anchors its claim by virtue of its ownership over the properties and the existence of a final and executory judgment against private respondents ordering the latters ejectment from the premises (Civil Case No. 140817-CV). Private respondents claim on the other hand hinges on an alleged supervening event which has rendered the enforcement of petitioners rights moot, that is, the expropriation proceedings (Civil Case No. 94-70560) undertaken by the City of Manila over the disputed premises for the benefit of herein private respondents. For its part, the City of Manila is merely exercising its power of eminent domain within its jurisdiction by expropriating petitioners properties for public use. There is no dispute as to the existence of a final and executory judgment in favor of petitioner Filstream ordering the ejectment of private respondents from the properties subject of this dispute. The judgment in the ejectment suit became final and executory after private respondents failed to interpose any appeal from the adverse decision of the Court of Appeals dated August 25, 1994 in CA-G.R. SP No. 33714. Thus, petitioner has every right to assert the execution of this decision as it had already became final and executory. However, it must also be conceded that the City of Manila has an undeniable right to exercise its power of eminent domain within its jurisdiction. The right to expropriate private property for public use is expressly granted to it under Section 19 of the 1991 Local Government Code, to wit:
SECTION 19. Eminent Domain A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, that the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted; Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property. (Italics supplied)

More specifically, the City of Manila has the power to expropriate private property in the pursuit of its urban land reform and housing program as explicitly laid out in the Revised Charter of the City of Manila (R.A. No. 409) as follows:

General powers The city may have a common seal and alter the same at pleasure, and may take, purchase, receive, hold, lease, convey, and dispose of real and personal property for the general interest of the city, condemn private property for public use, contract and be contracted with, sue and be sued, and prosecute and defend to final judgment and execution, and exercise all the powers hereinafter conferred. (R.A. 409, Sec. 3; Italics supplied). xxx xxx xxx

Sec. 100. The City of Manila is authorized to acquire private lands in the city and to subdivide the same into home lots for sale on easy terms to city residents, giving first priority to the bona fide tenants or occupants of said lands, and second priority to laborers and low-salaried employees. For the purpose of this section, the city may raise necessary funds by appropriations of general funds, by securing loans or by issuing bonds, and, if necessary, may acquire the lands through expropriation proceedings in accordance with law, with the approval of the President x x x. (Italics supplied).

In fact, the City of Manilas right to exercise these prerogatives notwithstanding the existence of a final and executory judgment over the property to be expropriated has been upheld by this Court in the case of Philippine Columbian Association vs. Panis, G.R. No. 106528, December 21, 1993. Relying on the aforementioned provisions of the Revised Charter of the City of Manila, the Court declared that:
[32]

The City of Manila, acting through its legislative branch, has the express power to acquire private lands in the city and subdivide these lands into home lots for sale to bona-fide tenants or occupants thereof, and to laborers and low-salaried employees of the city. That only a few could actually benefit from the expropriation of the property does not diminish its public use character. It is simply not possible to provide all at once land and shelter for all who need them (Sumulong v. Guerrero, 154 SCRA 461 [1987]). Corollary to the expanded notion of public use, expropriation is not anymore confined to vast tracts of land and landed estates (Province of Camarines Sur v. Court of Appeals, G.R. Nol 103125, May 17, 1993; J. M. Tuason and Co., Inc. v. Land Tenure Administration, 31 SCRA 413 [1970]). It is therefore of no moment that the land sought to be expropriated in this case is less than the half a hectare only (Pulido v. Court of Appeals, 122 SCRA 63 [1983]). Through the years, the public use requirement in eminent domain has evolved into a flexible concept, influenced by changing conditions (Sumulong v. Guerrero, supra; Manotok v. National Housing Authority, 150 SCRA 89 [1987]; Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 [1983]). Public use now includes the broader notion of indirect public benefit or advantage, including a particular, urban land reform and housing.[33]

We take judicial notice of the fact that urban land reform has become a paramount task in view of the acute shortage of decent housing in urban areas particularly in Metro Manila. Nevertheless, despite the existence of a serious dilemma, local government units are not given an unbridled authority when exercising their power of eminent domain in pursuit of solutions to these problems. The basic rules still have to be followed, which are as follows: no person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws (Art. 3, Sec. 1, 1987 Constitution); private property shall not be taken for public use without just compensation (Art. 3, Section 9, 1987 Constitution). Thus the exercise by local government units of the power of eminent domain is not without limitations. Even Section 19 of the 1991 Local Government Code is very explicit that it must comply with the provisions of the Constitution and pertinent laws, to wit:

SECTION 19. Eminent Domain. A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: x x x. (Italics supplied).

The governing law that deals with the subject of expropriation for purposed of urban land reform and housing in Republic Act No. 7279 (Urban Development and Housing Act of 1992) and Sections 9 and 10 of which specifically provide as follows:
Sec. 9. Priorities in the acquisition of Land Lands for socialized housing shall be acquired in the following order: (a) Those owned by the Government or any of its sub-divisions, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries; (b) Alienable lands of the public domain; (c) Unregistered or abandoned and idle lands; (d) Those within the declared Areas of Priority Development, Zonal Improvement sites, and Slum Improvement and Resettlement Program sites which have not yet been acquired; (e) Bagong Lipunan Improvement sites and Services or BLISS sites which have not yet been acquired; and (f) Privately-owned lands. Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities mentioned in this section shall not apply. The local government units shall give budgetary priority to on-site development of government lands. Sec. 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act shall include, among others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the Government, joint venture agreement, negotiated purchase, and expropriation: Provided, however, That expropriation shall be resorted to only when other modes of acquisition have been exhausted: Provided further, That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act: Provided, finally, That abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court. For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by the local government units, or by the National Housing Authority primarily through negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the land shall be given the right of first refusal. (Italics supplied).

Very clear from the abovequoted provisions are the limitations with respect to the order of priority in acquiring private lands and in resorting to expropriation proceedings as means to acquire the same. Private lands rank last in the order of priority for purposes of socialized housing. In the same vein, expropriation proceedings are to be resorted to only when the other modes of acquisition have been exhausted. Compliance with these conditions must be deemed mandatory because these are the only safeguards in securing the right of owners of private property to due process when their property is expropriated for public use.

Proceeding from the parameters laid out in the above disquisitions, we now pose the crucial question: Did the city of Manila comply with the abovementioned conditions when it expropriated petitioner Filstreams properties? We have carefully scrutinized the records of this case and found nothing that would indicate the respondent City of Manila complied with Sec. 9 and Sec. 10 of R.A. 7279. Petitioners Filstreams properties were expropriated and ordered condemned in favor of the City of Manila sans any showing that resort to the acquisition of other lands listed under Sec. 9 of RA 7279 have proved futile. Evidently, there was a violation of petitioner Filstreams right to due process which must accordingly be rectified. Indeed, it must be emphasized that the State has a paramount interest in exercising its power of eminent domain for the general good considering that the right of the State to expropriate private property as long as it is for public use always takes precedence over the interest of private property owners. However we must not lose sight of the fact that the individual rights affected by the exercise of such right are also entitled to protection, bearing in mind that the exercise of this superior right cannot override the guarantee of due process extended by the law to owners of the property to be expropriated. In this regard, vigilance over compliance with the due process requirements is in order. WHEREFORE, the petitions are hereby GRANTED. In G.R. 125218, the resolutions of the Court of Appeals in CA-G.R. SP No. 36904 dated March 18, 1996 and May 20, 1996 are hereby REVERSED and SET ASIDE. In G.R. No. 128077, the resolution of the Court of Appeals in CAG.R. SP No. 43101 dated January 28, 1997 and February 18, 1997 are REVERSED and SET ASIDE. Case: Estate or Heirs of Reyes vs. CA of Manila, G.R. No. 132431, February 13, 2004
Republic of the Philippines SUPREME COURT Manila

THIRD DIVISION G.R. No. 132431 February 13, 2004 ESTATE OR HEIRS OF THE LATE EX-JUSTICE JOSE B. L. REYES represented by their Administratrix and Attorney-In-Fact, Adoracion D. Reyes, and the ESTATE OR HEIRS OF THE LATE DR. EDMUNDO A. REYES, represented by MARIA TERESA P. REYES and CARLOS P. REYES, petitioners vs. CITY OF MANILA, respondent. G.R. No. 137146 February 13, 2004 ESTATE OF HEIRS OF THE LATE EX-JUSTICE JOSE B.L. REYES and ESTATE OR HEIRS OF THE LATE DR. EDMUNDO REYES, petitioners vs. COURT OF APPEALS, DR. ROSARIO ABIOG, ANGELINA MAGLONSO and SAMPAGUITA BISIG NG MAGKAKAPITBAHAY, INC. and the CITY OF MANILA, respondents. DECISION CORONA, J.: Before us are the following consolidated petitions filed by petitioners Heirs of Jose B.L. Reyes and Edmundo Reyes: (1) a petition for review1 of the decision2 of the Court of Appeals dated January 27, 1998 which ordered the condemnation of petitioners properties and reversed the order 3 of the

Regional Trial Court (RTC) of Manila, Branch 9, dated October 3, 1995 dismissing the complaint of respondent City of Manila (City) for expropriation, and (2) a petition for certiorari 4 alleging that the Court of Appeals committed grave abuse of discretion in rendering a resolution5 dated August 19, 1998 which issued a temporary restraining order against the Municipal Trial Court (MTC) of Manila, Branch 10, not to "(disturb) the occupancy of Dr. Rosario Abiog, one of the members of SBMI, until the Supreme Court has decided the Petition for Review on Certiorari" and a resolution6 dated December 16, 1998 enjoining petitioners "from disturbing the physical possession of all the properties subject of the expropriation proceedings." The undisputed facts follow. The records show that Jose B. L. Reyes and petitioners Heirs of Edmundo Reyes are the proindiviso co-owners in equal proportion of 11 parcels of land with a total area of 13,940 square meters situated at Sta. Cruz District, Manila and covered by Transfer Certificate of Title No. 24359 issued by the Register of Deeds of Manila. These parcels of land are being occupied and leased by different tenants, among whom are respondents Abiog, Maglonso and members of respondent Sampaguita Bisig ng Magkakapitbahay, Incorporated (SBMI). Petitioners leased to respondent Abiog Lot 2-E, Block 3007 of the consolidated subdivision plan (LRC) Psd- 328345, with an area of 191 square meters7 and to respondent Maglonso, Lot 2-R, Block 2996 of the same consolidation plan, with an area of 112 square meters.8 On November 9, 1993 and May 26, 1994, respectively, Jose B.L. Reyes and petitioners Heirs of Edmundo Reyes filed ejectment complaints against respondents Rosario Abiog and Angelina Maglonso, among others. Upon his death, Jose B.L. Reyes was substituted by his heirs. Petitioners obtained favorable judgments against said respondents. In Civil Case No. 142851-CV, the Metropolitan Trial Court (MTC) of Manila, Branch 10, rendered a decision dated May 9, 1994 against respondent Abiog. In Civil Case No. 144205-CV, the MTC of Manila, Branch 3, issued judgment dated May 4, 1995 against respondent Maglonso. Respondents Abiog and Maglonso appealed the MTC decisions but the same were denied 9 by the RTC of Manila, Branch 28, and the RTC of Manila, Branch 38, respectively. Their appeals to the Court of Appeals were likewise denied.10 As no appeals were further taken, the judgments of eviction against respondents Abiog and Maglonso became final and executory in 1998. Meanwhile, during the pendency of the two ejectment cases against respondents Abiog and Maglonso, respondent City filed on April 25, 1995 a complaint for eminent domain (expropriation)11 of the properties of petitioners at the RTC of Manila, Branch 9. The properties sought to be acquired by the City included parcels of land occupied by respondents Abiog, Maglonso and members of respondent SBMI. The complaint was based on Ordinance No. 7818 enacted on November 29, 1993 authorizing the City Mayor of Manila to expropriate certain parcels of land with an aggregate area of 9,930 square meters, more or less, owned by Jose B.L. Reyes and Edmundo Reyes situated along the streets of Rizal Avenue, Tecson, M. Natividad, Sampaguita, Oroquieta, M. Hizon, Felix Huertes, Bulacan, Sulu, Aurora Boulevard, Pedro Guevarra and Kalimbas in the third district of Manila. These parcels of land are more particularly described in the pertinent Cadastral Plan as Lot 3, Block 2995, Lot 2, Block 2996; Lot 2, Block 2999; Lot 5, Block 2999, and Lot 2, Block 3007. According to the ordinance, the said properties were to be distributed to the intended beneficiaries, who were "the occupants of the said parcels of land who (had) been occupying the said lands as lessees or any term thereof for a period of at least 10 years."12 The complaint alleged that, on March 10, 1995, respondent City thru City Legal Officer Angel Aguirre, Jr. sent the petitioners a written offer to purchase the subject properties for P10,285,293.38 but the same was rejected. Respondent City prayed that an order be issued fixing the provisional value of the property in the amount of P9,684,380 based on the current tax declaration of the real

properties and that it be authorized to enter and take possession thereof upon the deposit with the trial court of the amount of P1,452,657 or 15% of the aforesaid value. On May 15, 1995, respondent SBMI, a registered non-stock corporation composed of the residents of the subject properties (including as well as representing herein respondents Abiog and Maglonso), filed a motion for intervention and admission of their attached complaint with prayer for injunction. Respondent SBMI alleged that it had a legal interest over the subject matter of the litigation as its members were the lawful beneficiaries of the subject matter of the case. It prayed for the issuance of a temporary restraining order to enjoin the petitioners from ousting the occupants of the subject properties. The trial court denied the motion for intervention in an order dated June 2, 1995 on the ground that "the movants interest (was) indirect, contingent, remote, conjectual (sic), consequential (sic) and collateral. At the very least, it (was), if it (existed) at all, purely inchoate, or in sheer expectancy of a right that may or may not be granted."13 On the day SBMIs motion for intervention was denied, petitioners filed a motion to dismiss the complaint for eminent domain for lack of merit. Among the grounds alleged were the following: xxx that the amount allegedly deposited by the plaintiff is based on an erroneous computation since Sec. 19 of the Local Government Code of 1991 provides that in order for the plaintiff to take possession of the property, the deposit should be at least 15% of the fair market value of the property based on the current tax declaration of the property to be expropriated which is P19,619,520.00, 15% of which is P2,942,928.00; that since the subject property is allegedly being expropriated for socialized housing, the guidelines for their equitable valuation shall be set by the Department of Finance on the basis of the market value reflected in the zonal valuation conformably to Sec. 13 of R.A. No. 7279; that under Department Order No. 33-93 adopted by the Department of Finance, through the Bureau of Internal Revenue, on 26 April 1992, the zonal valuation of the subject property is conservatively estimated at approximately P76M; that the plaintiff has no savings or unappropriated funds to pay for the just compensation; that instead of expropriating the subject property which enjoys the least priority in the acquisition by the City of Manila for socialized housing under Sec. 9(t) of R.A. 7279, the money to be paid should be channeled to the development of 244 sites in Metro Manila designated as area for priority development; that the City Ordinance was not properly adopted since there was no public hearing and neither were the defendants notified; that the tenants occupying the subject property cannot be categorized as "underprivileged and homeless citizens" or those whose income falls within the poverty threshold to be qualified as beneficiaries of the intended socialized housing; and that the plaintiff failed to comply with Art. 34, Rule 6 of the Rules and Regulations Implementing the Local Government Code of 1991 which requires the local government unit to first establish the suitability of the property to be acquired for the use intended and then proceed to obtain from the proper authorities, like the National Housing Authority, the necessary locational clearance and other requirements imposed under existing laws, rules and regulations.14 On June 6, 1995, the trial court allowed respondent City to take possession of the subject property upon deposit of the amount of P1,542,793, based on the P10,285,293.38 offer by respondent City to petitioners which the trial court fixed as the provisional amount of the subject properties. On June 14, 1995, respondent City filed an opposition to petitioners motion to dismiss. On October 3, 1995, the Citys complaint for eminent domain was dismissed.15 The trial court held that expropriation was inappropriate because herein petitioners were in fact willing to sell the subject properties under terms acceptable to the purchaser. Moreover, respondent City failed to show that its offer was rejected by petitioners. Respondent Citys motion for reconsideration was denied. On January 12, 1996, respondent City appealed the decision of the trial court to the Court of Appeals. Thereafter, several motions16 seeking the issuance of a temporary restraining order and preliminary injunction were filed by respondent City to prevent petitioners from ejecting the

occupants of the subject premises. On March 21, 1996, the Court of Appeals issued a resolution 17 denying the motions for lack of merit. Respondent Citys motion for reconsideration was likewise denied. Meanwhile, on January 27, 1997, in view of the finality of the judgment in the ejectment case against respondent Abiog, the MTC of Manila, Branch 10, issued a writ of execution. On January 31, 1997, respondent SBMI filed in the Court of Appeals a motion for leave to intervene with prayer for injunctive relief praying that the ejectment cases be suspended or that the execution thereof be enjoined in view of the pendency of the expropriation case filed by respondent City over the same parcels of land. As a follow-up, respondent Abiog filed in the appellate court, on August 25, 1997, a reiteratory motion for issuance of temporary restraining order and to stop the execution of the order dated June 27, 1997 of the Hon. Judge Tranquil P. Salvador, MTC of Manila, Branch 10. On August 26, 1997, the Court of Appeals issued a resolution 18 finding prima facie basis to grant SBMIs motions. It issued a temporary restraining order to Judge Salvador, his employees and agents to maintain the status quo. After the hearing on the propriety of the issuance of a writ of preliminary injunction, respondent SBMI filed a reiteratory motion for injunctive relief on December 11, 1997. On January 27, 1998, the Court of Appeals rendered the assailed decision reversing the trial court judgment and upholding as valid respondent Citys exercise of its power of eminent domain over petitioners properties. The dispositive portion of the decision stated: WHEREFORE, the Orders appealed from are hereby REVERSED and SET ASIDE. The case is remanded to the lower court to determine specifically the amount of just compensation. SO ORDERED.19 According to the Court of Appeals: xxx there is no doubt as to the public purpose of the plaintiff-appellant in expropriating the property of the defendants-appellees. Ordinance No. 7818 expressly states that the subject parcels of land are to be distributed to the landless poor residents therein who have been in possession of the said property for at least ten (10) years. xxx xxx xxx xxx In the absence of any law which expressly provides for a period for filing an expropriation proceeding, the lower court erred in dismissing the complaint based on unsupported accusations and mere speculations, such as political motivation. The fact that the expropriation proceeding was not immediately instituted does not negate the existence of the public purpose for which the ordinance was enacted. Another reason for the lower courts dismissal was its finding that there was no proof that the offer of the plaintiff-appellant, through the City Legal Office, was not accepted. This conclusion by the lower court is belied by the letter of Adoracion D. Reyes, dated 17 March 1995, xxx. xxx xxx xxx There can be no interpretation of the letter of the defendant-appellee other than that the valid and definite offer of the plaintiff-appellant to purchase the subject property was not accepted and, in the words of the defendant-appellee, was totally turned down. The lower court in denying the plaintiff-appellants motion for reconsideration of the order of dismissal held that the defendants-appellees were actually willing to sell, in fact, some of the tenants have already purchased the land that they occupy. However, we agree with the plaintiffappellant that the contracts entered into by the defendants-appellees with some of the tenants do not

affect the offer it made. The plaintiff-appellant was not a party in those transactions and as pointed out, its concern is the majority of those who have no means to provide themselves with decent homes to live on.20 From the aforementioned decision of the Court of Appeals, petitioners filed on March 19, 1998 the present petition for review21 before this Court. Alleging that respondent City cannot expropriate the subject parcels of land, petitioners assigned the following as errors of the Court of Appeals: The Court Appeals committed grave abuse and irreversible errors in holding that respondent City of Manila may expropriate petitioners parcels of land considering that: I. Respondent did not comply with Secs. 9 and 10 of P.D. (sic) No. 7279, otherwise known as the "Urban Development and Housing Act of 1992 and Sec. 34 of the Local Government Code of 1991 (sic)." II. Ordinance No. 7818 enacted by the City of Manila is violative of the equal protection clause. III. There was no valid and definite offer by the respondent City of Manila to purchase subject parcels of land. IV. Assuming there was a valid offer, the amount deposited for the payment of just compensation was insufficient. V. Petitioners are not unwilling to sell the subject parcels of land. VI. There was no pronouncement as to just compensation. 22 What followed were incidents leading to the filing of the petition for certiorari against the resolutions of the Court of Appeals which essentially sought to enjoin the petitioners from enforcing the final judgments against respondents Abiog, Maglonso and SBMI (hereinafter, respondent occupants) in the ejectment cases. On August 17, 1998, respondents Abiog and Maglonso filed in the Court of Appeals an urgent motion for protective order. Meanwhile, on September 8, 1998, petitioners were able to secure from the MTC of Manila, Branch 3, a writ of execution of the final judgment in the other ejectment case against respondent Maglonso. On October 19, 1998, respondent SBMI filed in the CA a similar motion for protective order. In essence, the respondents motions for "protective order" sought to stop the execution of the final and executory judgments in the ejectment cases against them. On August 19, 1998, the Court of Appeals promulgated the first assailed resolution, 23 the dispositive portion of which read: Considering that this case has been elevated to the Supreme Court, the Municipal Trial Court of Manila, Branch 10 and Sheriff Jess Areola or any other sheriff of the City of Manila, are hereby TEMPORARILY RESTRAINED from disturbing the occupancy of Dr. Rosario Abiog, one of the members of the SBMI until the Supreme Court has decided the Petition for Review on Certiorari. On September 4, 1998, petitioners filed a motion to set aside as ineffective and/or null and void the said August 19, 1998 resolution. But the Court of Appeals denied the same in a resolution dated December 16, 1998,24 the dispositive portion of which read: WHEREFORE, the Estate or heirs of J.B.L. Reyes and all persons acting in their behalf are hereby ENJOINED from disturbing the physical possession of all the properties (sic) subject of the expropriation proceedings. SO ORDERED.

In enjoining the petitioners from evicting respondent occupants and in effect suspending the execution of the MTC judgments, the appellate court held that: We do not agree with the contention of the defendants-appellees that we no longer have any jurisdiction to issue the subject resolution. In spite of having rendered the decision on 27 January 1998, the appellate Court still has the inherent power and discretion to amend whatever order or decision it had made before in order to render substantial justice. xxx xxx xxx There is no doubt that the members of SBMI have a personality to intervene before this Court. The plaintiff-appellant itself, in their Comment to the defendants-appellees motion to set aside this Courts 19 August 1998 resolution, recognized Dr. Rosario Abiog, as one of the intended beneficiaries of the expropriation case. The plaintiff-appellant also enumerated the ejectment cases pending before the lower courts when it filed a motion for the issuance of temporary restraining order and/or writ of preliminary injunction upon appeal to this Court. Moreover, the plaintiffappellant also furnished this Court with a copy of the THIRD PARTY CLAIM it filed before the City Sheriff Office and Sheriff Dante Lot to enjoin them from implementing and executing the Demolition Order issued by the Metropolitan Trial Court of Manila (Branch 3) against Angelina Maglonso. In their motion to set aside the 19 August 1998 resolution, the defendants-appellees, quoting the Order of the lower court denying the motion for intervention stated that: The petition of the plaintiff to expropriate the property does not ipso facto create any fiat that would give rise to the claim of the movant of "legal interest" in the property. The petition could well be denied leaving any assertion of interest on the part of the movant absolutely untenable. If the petition, on the other hand, is granted, that would be the time for the movant to intervene, to show that they are the intended beneficiaries, and if the plaintiff would distribute the property to other persons, the remedy is to compel the plaintiff to deliver the lot to them. Having established that they are the intended beneficiaries, the intervenors then have the right to seek protection from this Court. On 27 January 1998, we held that the plaintiff-appellant validly exercised its power of eminent domain and consequently may expropriate the subject property upon payment of just compensation. The record before us shows that on 6 June 1995, the lower court allowed the plaintiff-appellant to take possession of the subject property upon filing of P1,542,793.00 deposit. The property to be expropriated includes the same properties subject of the ejectment cases against the intervenors. There is nothing in the record that would show that the order of possession was ever set aside or the deposit returned to the plaintiff-appellant. Based on the foregoing considerations, we find that the intervenors are entitled to the injunction that they prayed for. To allow the demolition of the premises of the intervenors would defeat the very purpose of expropriation which is to distribute the subject property to the intended beneficiaries who are the occupants of the said parcels of land who have been occupying the said lands as lessees or any term thereof for a period of at least ten (10) years. In the case of Lourdes Guardacasa Vda. De Legaspi vs. Hon. Herminion A. Avendano, et al., the Supreme Court ordered the suspension of the enforcement and implementation of the writ of execution and order of demolition issued in the ejectment case until after the final termination of the action for quieting of title because it is more equitable and just and less productive of confusion and disturbance of physical possession with all its concomitant inconvenience and expenses. As held in Wilmon Auto Supply Corp., et al. vs. Hon. Court of Appeals, et al., the exception to the rule in the case of Vda. De Legaspi case, execution of the decision in the ejectment case would also

have meant demolition of the premises, which is the situation in the case at bar.25 Claiming that the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction, petitioners filed the subject petition for certiorari26 with the following assignments of error: I PUBLIC RESPONDENT COURT OF APPEALS HAS NO JURISDICTION IN ISSUING THE "PROTECTIVE ORDER" ENJOINING THE EXECUTION OF THE FINAL AND EXECUTORY JUDGMENTS IN THE EJECTMENT CASES AGAINST PRIVATE RESPONDENTS BECAUSE THE POWER TO ISSUE SUCH ORDER HAS BEEN LODGED WITH THE HONORABLE COURT IN VIEW OF THE PENDENCY OF G.R. NO. 132431. II ASSUMING ARGUENDO THAT PUBLIC RESPONDENT COURT OF APPEALS COULD ISSUE SUCH ORDER, IT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE PROTECTIVE ORDER IN FAVOR OF PRIVATE RESPONDENTS BECAUSE IT HAS LONG BEEN SETTLED THAT THEIR INTERESTS IN THE PROPERTIES SUBJECT OF THE EXPROPRIATION CASE ARE NOT SUFFICIENT FOR THEM TO BE DECLARED AS INTERVENORS. III THE SO-CALLED PROTECTIVE ORDER IS AN INJUNCTIVE RELIEF IN DISGUISE. IV PRIVATE RESPONDENTS ACT OF SEEKING THE PROTECTIVE ORDER FROM THE COURT OF APPEALS, DESPITE THE FINALITY OF THE ORDER BY THE TRIAL COURT DISALLOWING INTERVENTION, CONSTITUTES FORUM SHOPPING. V The assailed resolutions of the Court of Appeals should be set aside, following the ruling in Filstream International, Inc. vs. CA, Judge Tongco and the City of Manila (G.R. No. 125218, January 23, 1998) and Filstream International, Inc. vs. CA, Malit et al. (G.R. No. 128077, January 23, 1998).27 In G.R. No 132431, petitioners allege: (1) that Ordinance 7818 is unconstitutional for violating the equal protection clause of the 1987 Constitution and for abridging the "contracts" between petitioners and prospective buyers of the subject parcels of land; (2) that, in expropriating the subject properties, respondent Citys act of expropriation is illegal because it did not comply with Sections 9 and 10 of Republic Act No. 7279 (The Urban Development and Housing Act of 1992); (3) that, prior to the filing of the eminent domain complaint, respondent City did not make a valid and definite offer to purchase the subject properties, and (4) that, assuming the offer as valid, the amount offered was insufficient.28

On the other hand, in insisting that its offer was valid and that the amount it deposited was sufficient, respondent City reiterates the reasons cited by the Court of Appeals. According to respondent City, there is nothing in the Local Government Code of 1991 which requires the offer to be made before enacting an enabling ordinance. The actual exercise of the power of eminent domain begins only upon the filing of the complaint for eminent domain with the RTC by the Chief Executive and not when an ordinance pursuant thereto has been enacted. It is therefore safe to say that the offer to purchase can be made before the actual filing of the complaint, whether that is before or after the ordinance is enacted. On the sufficiency of the amount deposited, respondent City alleges that the determination of the provisional value of the property was judicially determined by the trial court at P10,285,293.38 in its order dated June 6, 1995. On the basis of this order, respondent City filed its compliance dated June 13, 1995 manifesting the deposit of the additional amount of P1,452,793 (15% of P10,285,293.38). Respondent City also claims that all along petitioners were not willing to sell the subject parcels of land as proved by the tenor of the letter of petitioners agent, Adoracion Reyes, who wrote respondent City that "it is the consensus of the heirs xxx to turn down as we are totally turning down your offer to purchase the parcels of land subject matter of the aforesaid ordinance, or your offer is not acceptable to us in every respect." In G.R. No. 137146 (the petition for certiorari questioning the resolutions of the Court of Appeals which issued a temporary restraining order and ordered the parties to maintain the status quo), petitioners assail the resolutions of the Court of Appeals which in effect enjoined the MTC of Manila, Branches 9 and 10, from enforcing the final judgments in the ejectment cases while the appeal from the decision involving the same parcels of land in the expropriation case remains pending before this Court. Petitioners maintain that, first, only this Court and not the Court of Appeals has jurisdiction to enjoin the execution of the judgments in the ejectment cases considering that the expropriating case is now being reviewed by this Court; second, the orders are void as they protect an alleged right that does not belong to respondent City but to a non-party in the expropriation case; third, said orders deprive petitioners of their property without due process of law because they amount to a second temporary restraining order which is expressly prohibited by Section 5, Rule 58 of the Rules of Court29; last, petitioners brand respondent occupants act of seeking the assailed "protective order," despite the finality of the trial court order disallowing intervention, as forum-shopping. To justify the propriety of their intervention and the legality of the assailed resolutions, respondent occupants aver the following: first, Section 9(1)30 of BP 129 (The Judiciary Reorganization Act of 1980) is broad enough to include "protective orders." If the Court of Appeals has the power to annul judgments of the RTC, with more reason does it have the power to annul judgments of the MTC. second, as the undisputed rightful beneficiaries of the expropriation, they have the right to intervene. third, their right to intervene has never been barred with finality. Due to the dismissal of the complaint for expropriation, their motion for reconsideration of the trial court order denying their motion to intervene was never ruled upon as it became moot and academic. The trial courts silence does not mean a denial of the intervention and injunction that respondent occupants prayed for. fourth, it is more appropriate in the interest of equity and justice to preserve the status quo pending resolution by this Court of petitioners appeal in the expropriation case because they are anyway the beneficiaries of the subject properties. The expropriation case should be considered as a supervening event that necessitated a modification, suspension or abandonment of the MTC decisions.

fifth, respondents are not guilty of forum-shopping for the reason that the Court of Appeals never made a ruling or decision on respondents motion to intervene. Moreover, the causes of action in the two cases were different and distinct from each other. In the motion to intervene, respondent occupants sought to be recognized and included as parties to the expropriation case. On the other hand, in the motion for protective order, respondents sought to enjoin the execution of the decisions in the ejectment cases against them. Before proceeding to the discussion of the issues, it would be best to first recapitulate the confusing maze of facts of this case. It is not disputed that the petitioners acquired a favorable judgment of eviction against herein respondents Abiog and Maglonso. In 1998, the said judgments became final and executory. Consequently, writs of execution were issued. During the pendency of the complaints for unlawful detainer, respondent City filed a case for the expropriation of the same properties involved in the ejectment cases. From thereon, numerous motions to intervene and motions for injunction were filed in the expropriation case by respondents. The trial court allowed respondent City to take possession of the property; it denied the motions for intervention and injunction, and, after allowing respondent City to oppose the motion to dismiss, dismissed the complaint for expropriation. On appeal, the Court of Appeals reversed the trial court and found that respondent City properly exercised its right to expropriate the subject properties. Petitioners appealed the CA decision to this Court. Thereafter, on motion of respondent occupants, the Court of Appeals issued protective orders that required the parties to maintain the status quo (prohibiting any ejectment) pending this Courts resolution of the appeal. Petitioner is now before us questioning the legality of the CAs expropriation order and the propriety of its act enjoining the execution of the final judgments in the ejectment cases. With these given facts, it is imperative to first resolve the issue of whether the respondent City may legally expropriate the subject properties, considering that a negative finding will necessarily moot the issue of the propriety of the "protective orders" of the Court of Appeals. Whether respondent City deprived petitioners of their property without due process of law depends on whether the City complied with the legal requirements for expropriation. Before respondent City can exercise its power of eminent domain, the same must be sanctioned and must not violate any law. Being a mere creation of the legislature, a local government unit can only exercise powers granted to it by the legislature. Such is the nature of the constitutional power of control of Congress over local government units, the latter being mere creations of the former.31 When it expropriated the subject properties, respondent City relied on its powers granted by Section 19 of the Local Government Code of 199132 and RA 409 (The Revised Charter of the City of Manila). The latter specifically gives respondent City the power to expropriate private property in the pursuit of its urban land reform and housing program.33 Respondent City, however, is also mandated to follow the conditions and standards prescribed by RA 7279 (the Urban Development and Housing Act of 1992), the law governing the expropriation of property for urban land reform and housing. Sections 9 and 10 of RA 7279 specifically provide that: Sec. 9. Priorities in the acquisition of Land Lands for socialized housing shall be acquired in the following order: (a) Those owned by the Government or any of its sub-divisions, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries; (b) Alienable lands of the public domain; (c) Unregistered or abandoned and idle lands; (d) Those within the declared Areas of Priority Development, Zonal Improvement sites, and Slum Improvement and Resettlement Program sites which have not yet been acquired;

(e) Bagong Lipunan Improvement sites and Services or BLISS sites which have not yet been acquired; and (f) Privately-owned lands. Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities mentioned in this section shall not apply. The local government units shall give budgetary priority to on-site development of government lands. Sec. 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act shall include, among others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the Government, joint venture agreement, negotiated purchase, and expropriation: Provided, however, That expropriation shall be resorted to only when other modes of acquisition have been exhausted: Provided further, That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act: Provided, finally, that abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court. [italics supplied] In Filstream vs. Court of Appeals,34 we held that the above-quoted provisions are limitations to the exercise of the power of eminent domain, specially with respect to the order of priority in acquiring private lands and in resorting to expropriation proceedings as a means to acquire the same. Private lands rank last in the order of priority for purposes of socialized housing. In the same vein, expropriation proceedings are to be resorted to only after the other modes of acquisition have been exhausted. Compliance with these conditions is mandatory because these are the only safeguards of oftentimes helpless owners of private property against violation of due process when their property is forcibly taken from them for public use. We find that herein respondent City failed to prove strict compliance with the requirements of Sections 9 and 10 of RA 7279. Respondent City neither alleged in its complaint nor proved during the proceedings before the trial court that it complied with said requirements. Even in the Court of Appeals, respondent City in its pleadings failed to show its compliance with the law. The Court of Appeals was likewise silent on this specific jurisdictional issue. This is a clear violation of the right to due process of the petitioners. We also take note of the fact that Filstream is substantially similar in facts and issues to the case at bar. In that case, Filstream acquired a favorable judgment of eviction against the occupants of its properties in Tondo, Manila. But prior thereto, on the strength of Ordinance 7818 (the same ordinance used by herein respondent City as basis to file the complaint for eminent domain), respondent City initiated a complaint for expropriation of Filstreams properties in Tondo, Manila, for the benefit of the residents thereof. Filstream filed a motion to dismiss and the City opposed the same. The trial court denied the motion. When the judgment in the ejectment case became final, Filstream was able to obtain a writ of execution and demolition. It thereafter filed a motion to dismiss the expropriation complaint but the trial court denied the same and ordered the condemnation of the subject properties. On appeal, the Court of Appeals denied Filstreams petition on a technical ground. Thus, the case was elevated to this Court for review of the power of the City to expropriate the Filstreams properties. Meanwhile, the occupants and respondent City filed in separate branches of the RTC of Manila several petitions for certiorari with prayer for injunction to prevent the execution of the judgments in the ejectment cases. After the consolidation of the petitions for certiorari, the designated branch of RTC Manila dismissed the cases on the ground of forum-shopping. The dismissal was appealed to the Court of Appeals which reversed the trial courts dismissal and granted respondents prayer for injunction. Filstream appealed the same to this Court, which appeal was consolidated with the earlier petition for review of the decision of the Court of Appeals in the main expropriation case.

Due to the substantial resemblance of the facts and issues of the case at bar to those in Filstream, we find no reason to depart from our ruling in said case. To quote: The propriety of the issuance of the restraining order and the writ of preliminary injunction is but a mere incident to the actual controversy which is rooted in the assertion of the conflicting rights of the parties in this case over the disputed premises. In order to determine whether private respondents are entitled to the injunctive reliefs granted by respondent CA, we deemed it proper to extract the source of discord. xxx xxx xxx Proceeding from the parameters laid out in the above disquisitions, we now pose the crucial question: Did the city of Manila comply with the abovementioned conditions when it expropriated petitioner Filstreams properties? We have carefully scrutinized the records of this case and found nothing that would indicate the respondent City of Manila complied with Sec. 9 and Sec. 10 of R.A. 7279. Petitioners Filstreams properties were expropriated and ordered condemned in favor of the City of Manila sans any showing that resort to the acquisition of other lands listed under Sec. 9 of RA 7279 have proved futile. Evidently, there was a violation of petitioner Filstreams right to due process which must accordingly be rectified. Indeed, it must be emphasized that the State has a paramount interest in exercising its power of eminent domain for the general good considering that the right of the State to expropriate private property as long as it is for public use always takes precedence over the interest of private property owners. However we must not lose sight of the fact that the individual rights affected by the exercise of such right are also entitled to protection, bearing in mind that the exercise of this superior right cannot override the guarantee of due process extended by the law to owners of the property to be expropriated. In this regard, vigilance over compliance with the due process requirements is in order.35 Due to the fatal infirmity in the Citys exercise of the power of eminent domain, its complaint for expropriation must necessarily fail. Considering that the consolidated cases before us can be completely resolved by the application of our Filstream ruling, it is needless to discuss the constitutionality of Ordinance 7818. We herein apply the general precept that constitutional issues will not be passed upon if the case can be decided on other grounds.36 In view of the dismissal of the complaint for expropriation and the favorable adjudication of petitioners appeal from the decision of the Court of Appeals on the expropriation of the subject properties, the petition for certiorari questioning the validity of the Court of Appeals resolutions (allowing respondent occupants to intervene and granting their motion to enjoin the execution of the executory judgments in the ejectment cases) becomes moot and academic. WHEREFORE, the petitions are hereby GRANTED. In G.R. No. 132431, the decision of the Court of Appeals dated January 27, 1998 is hereby REVERSED and SET ASIDE. In G.R. No. 137146, the resolutions of the Court of Appeals dated August 19, 1998 and December 16, 1998 are hereby REVERSED and SET ASIDE. SO ORDERED. Case:City of Mandaluyong v. Francisco, G.R. No. 137152, January 29, 2001

Republic of the Philippines SUPREME COURT

Manila FIRST DIVISION G.R. No. 137152 January 29, 2001

CITY OF MANDALUYONG, petitioner, vs. ANTONIO N., FRANCISCO N., THELMA N., EUSEBIO N., RODOLFO N., all surnamed AGUILAR, respondents. PUNO, J.: This is a petition for review under Rule 45 of the Rules of Court of the Orders dated September 17, 1998 and December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City1 dismissing the petitioner's Amended Complaint in SCA No. 1427 for expropriation of two (2) parcels of land in Mandaluyong City. 1wphi1.nt The antecedent facts are as follows: On August 4, 1997, petitioner filed with the Regional Trial Court, Branch 168, Pasig City a complaint for expropriation entitled "City of Mandaluyong, plaintiff v. Antonio N., Francisco N, Thelma N, Eusebio N, Rodolfo N., all surnamed Aguilar, defendants." Petitioner sought to expropriate three (3) adjoining parcels of land with an aggregate area of 1,847 square meters registered under Transfer Certificates of Title Nos. 59780, 63766 and 63767 in the names of the defendants, herein respondents, located at 9 de Febrero Street, Barangay Mauwag, City of Mandaluyong; on a portion of the 3 lots, respondents constructed residential houses several decades ago which they had since leased out to tenants until the present; on the vacant portion of the lots, other families constructed residential structures which they likewise occupied; in 1983, the lots were classified by Resolution No. 125 of the Board of the Housing and Urban Development Coordinating Council as an Area for Priority Development for urban land reform under Proclamation Nos. 1967 and 2284 of then President Marcos; as a result of this classification, the tenants and occupants of the lots offered to purchase the land from respondents, but the latter refused to sell; on November 7, 1996, the Sangguniang Panlungsod of petitioner, upon petition of the Kapitbisig, an association of tenants and occupants of the subject land, adopted Resolution No. 516, Series of 1996 authorizing Mayor Benjamin Abalos of the City of Mandaluyong to initiate action for the expropriation of the subject lots and construction of a medium-rise condominium for qualified occupants of the land; on January 10, 1996, Mayor Abalos sent a letter to respondents offering to purchase the said property at P3,000.00 per square meter; respondents did not answer the letter. Petitioner thus prayed for the expropriation of the said lots and the fixing of just compensation at the fair market value of P3,000.00 per square meter.2 In their answer, respondents, except Eusebio N. Aguilar who died in 1995, denied having received a copy of Mayor Abalos' offer to purchase their lots. They alleged that the expropriation of their land is arbitrary and capricious, and is not for a public purpose; the subject lots are their only real property and are too small for expropriation, while petitioner has several properties inventoried for socialized housing; the fair market value of P3,000.00 per square meter is arbitrary because the zonal valuation set by the Bureau of Internal Revenue is P7,000.00 per square meter. As counterclaim,

respondents prayed for damages of P21 million.3 Respondents filed a "Motion for Preliminary Hearing" claiming that the defenses alleged in their Answer are valid grounds for dismissal of the complaint for lack of jurisdiction over the person of the defendants and lack of cause of action. Respondents prayed that the affirmative defenses be set for preliminary hearing and that the complaint be dismissed.4 Petitioner replied. On November 5, 1997, petitioner filed an Amended Complaint and named as an additional defendant Virginia N. Aguilar and, at the same time, substituted Eusebio Aguilar with his heirs. Petitioner also excluded from expropriation TCT No. 59870 and thereby reduced the area sought to be expropriated from three (3) parcels of land to two (2) parcels totalling 1,636 square meters under TCT Nos. 63766 and 63767.5 The Amended Complaint was admitted by the trial court on December 18, 1997. Respondents, who, with the exception of Virginia Aguilar and the Heirs of Eusebio Aguilar had yet to be served with summons and copies of the Amended Complaint, filed a "Manifestation and Motion" adopting their "Answer with Counterclaim" and "Motion for Preliminary Hearing" as their answer to the Amended Complaint.6 The motion was granted. At the hearing of February 25, 1998, respondents presented Antonio Aguilar who testified and identified several documentary evidence. Petitioner did not present any evidence. Thereafter, both parties filed their respective memoranda.7 On September 17, 1998, the trial court issued an order dismissing the Amended Complaint after declaring respondents as "small property owners" whose land is exempt from expropriation under Republic Act No. 7279. The court also found that the expropriation was not for a public purpose for petitioner's failure to present any evidence that the intended beneficiaries of the expropriation are landless and homeless residents of Mandaluyong. The court thus disposed of as follows: "WHEREFORE, the Amended Complaint is hereby ordered dismissed without pronouncement as to cost. SO ORDERED."8 Petitioner moved for reconsideration. On December 29, 1998, the court denied the motion. Hence this petition. Petitioner claims that the trial court erred "IN UPHOLDING RESPONDENT'S CONTENTION THAT THEY QUALIFY AS SMALL PROPERTY OWNERS AND ARE THUS EXEMPT FROM EXPROPRIATION."9 Petitioner mainly claims that the size of the lots in litigation does not exempt the same from expropriation in view of the fact that the said lots have been declared to be within the Area for Priority Development (APD) No. 5 of Mandaluyong by virtue of Proclamation No. 1967, as amended by Proclamation No. 2284 in relation to Presidential Decree No. 1517.10 This declaration allegedly authorizes petitioner to expropriate the property, ipso facto, regardless of the area of the land.

Presidential Decree (P.D.) No. 1517, the Urban Land Reform Act, was issued by then President Marcos in 1978. The decree adopted as a State policy the liberation of human communities from blight, congestion and hazard, and promotion of their development and modernization, the optimum use of land as a national resource for public welfare. 11 Pursuant to this law, Proclamation No. 1893 was issued in 1979 declaring the entire Metro Manila as Urban Land Reform Zone for purposes of urban land reform. This was amended in 1980 by Proclamation No. 1967 and in 1983 by Proclamation No. 2284 which identified and specified 245 sites in Metro Manila as Areas for Priority Development and Urban Land Reform Zones. In 1992, the Congress of the Philippines passed Republic Act No. 7279, the "Urban Development and Housing Act of 1992." The law lays down as a policy that the state, in cooperation with the private sector, undertake a comprehensive and continuing Urban Development and Housing Program; uplift the conditions of the underprivileged and homeless citizens in urban, areas and resettlement areas by making available to them decent housing at affordable cost, basic services and employment opportunities and provide for the rational use and development of urban land to bring about, among others, equitable utilization of residential lands; encourage more effective people's participation in the urban development process and improve the capability of local government units in undertaking urban development and housing programs and projects.12 Towards this end, all city and municipal governments are mandated to conduct an inventory of all lands and improvements within their respective localities, and in coordination with the National Housing Authority, the Housing and Land Use Regulatory Board, the National Mapping Resource Information Authority, and the Land Management Bureau, identify lands for socialized housing and resettlement areas for the immediate and future needs of the underprivileged and homeless in the urban areas, acquire the lands, and dispose of said lands to the beneficiaries of the program.13 The acquisition of lands for socialized housing is governed by several provisions in the law. Section 9 of R.A. 7279 provides: "Sec. 9. Priorities in the Acquisition of Land. Lands for socialized housing shall be acquired in the following order: (a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries; (b) Alienable lands of the public domain; (c) Unregistered or abandoned and idle lands; (d) Those within the declared Areas for Priority Development, Zonal Improvement Program sites, and Slum Improvement and Resettlement Program sites which have not yet been acquired; (e) Bagong Lipunan Improvement of Sites and Services or BLISS Sites which have not yet been acquired; (f) Privately-owned lands. Where on-site development is found more practicable and advantageous to the

beneficiaries, the priorities mentioned in this section shall not apply. The local government units shall give budgetary priority to on-site development of government lands." Lands for socialized housing are to be acquired in the following order: (1) government lands; (2) alienable lands of the public domain; (3) unregistered or abandoned or idle lands; (4) lands within the declared Areas for Priority Development (APD), Zonal Improvement Program (ZIP) sites, Slum Improvement and Resettlement (SIR) sites which have not yet been acquired; (5) BLISS sites which have not yet been acquired; and (6) privately-owned lands. There is no dispute that the two lots in litigation are privately-owned and therefore last in the order of priority acquisition. However, the law also provides that lands within the declared APD's which have not yet been acquired by the government are fourth in the order of priority. According to petitioner, since the subject lots lie within the declared APD, this fact mandates that the lots be given priority in acquisition.14 Section 9, however, is not a single provision that can be read separate from the other provisions of the law. It must be read together with Section 10 of R.A. 7279 which also provides: "Section 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act shall include, among others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the Government, joint-venture agreement, negotiated purchase, and expropriation: Provided, however, That expropriation shall be resorted to only when other modes of acquisition have been exhausted: Provided, further, That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act: Provided, finally, That abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.15 For the purposes of socialized housing, government-owned and foreclosed properties shall be acquired by the local government units, or by the National Housing Authority primarily through negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the land shall be given the right of first refusal." Lands for socialized housing under R.A. 7279 are to be acquired in several modes. Among these modes are the following: (1) community mortgage; (2) land swapping, (3) land assembly or consolidation; (4) land banking; (5) donation to the government; (6) joint venture agreement; (7) negotiated purchase; and (8) expropriation. The mode of expropriation is subject to two conditions: (a) it shall be resorted to only when the other modes of acquisition have been exhausted; (b) parcels of land owned by small property owners are exempt from such acquisition. Section 9 of R.A. 7279 speaks of priorities in the acquisition of lands. It enumerates the type of lands to be acquired and the heirarchy in their acquisition. Section 10 deals with the modes of land acquisition or the process of acquiring lands for socialized housing. These are two different things. They mean that the type of lands that may be acquired in the order of priority in Section 9 are to be acquired only in the modes

authorized under Section 10. The acquisition of the lands in the priority list must be made subject to the modes and conditions set forth in the next provision. In other words, land that lies within the APD, such as in the instant case, may be acquired only in the modes under, and subject to the conditions of, Section 10. Petitioner claims that it had faithfully observed the different modes of land acquisition for socialized housing under R.A. 7279 and adhered to the priorities in the acquisition for socialized housing under said law.16 It, however, did not state with particularity whether it exhausted the other modes of acquisition in Section 9 of the law before it decided to expropriate the subject lots. The law states "expropriation shall be resorted to when other modes of acquisition have been exhausted." Petitioner alleged only one mode of acquisition, i.e., by negotiated purchase. Petitioner, through the City Mayor, tried to purchase the lots from respondents but the latter refused to sell. 17 As to the other modes of acquisition, no mention has been made. Not even Resolution No. 516, Series of 1996 of the Sangguniang Panlungsod authorizing the Mayor of Mandaluyong to effect the expropriation of the subject property states whether the city government tried to acquire the same by community mortgage, land swapping, land assembly or consolidation, land banking, donation to the government, or joint venture agreement under Section 9 of the law. Section 9 also exempts from expropriation parcels of land owned by small property owners.18 Petitioner argues that the exercise of the power of eminent domain is not anymore conditioned on the size of the land sought to be expropriated.19 By the expanded notion of public use, present jurisprudence has established the concept that expropriation is not anymore confined to the vast tracts of land and landed estates, but also covers small parcels of land.20 That only a few could actually benefit from the expropriation of the property does not diminish its public use character.21 It simply is not possible to provide, in one instance, land and shelter for all who need them.22 While we adhere to the expanded notion of public use, the passage of R.A. No. 7279, the "Urban Development and Housing Act of 1992" introduced a limitation on the size of the land sought to be expropriated for socialized housing. The law expressly exempted "small property owners" from expropriation of their land for urban land reform. R.A. No. 7279 originated as Senate Bill No. 234 authored by Senator Joey Lina23 and House Bill No. 34310. Senate Bill No. 234 then provided that one of those lands not covered by the urban land reform and housing program was "land actually used by small property owners within the just and equitable retention limit as provided under this Act."24 "Small property owners" were defined in Senate Bill No. 234 as: "4. Small Property Owners are those whose rights are protected under Section 9, Article XIII of the Constitution of the Philippines, who own small parcels of land within the fair and just retention limit provided under this Act and which are adequate to meet the reasonable needs of the small property owner's family and their means of livelihood.25 The exemption from expropriation of lands of small-property owners was never questioned on the Senate floor.26 This exemption, although with a modified definition, was actually retained in the consolidation of Senate Bill No. 234 and House Bill No. 34310 which became R.A. No. 7279.27

The question now is whether respondents qualify as "small property owners" as defined in Section 3 (q) of R.A. 7279. Section 3 (q) provides: "Section 3 x x x (q). "Small property owners" refers to those whose only real property consists of residential lands not exceeding three hundred square meters (300 sq.m.) in highly urbanized cities and eight hundred square meters (800 sq.m.) in other urban areas." "Small-property owners" are defined by two elements: (1) those owners of real property whose property consists of residential lands with an area of not more than 300 square meters in highly urbanized cities and 800 square meters in other urban areas; and (2) that they do not own real property other than the same. The case at bar involves two (2) residential lots in Mandaluyong City, a highly urbanized city. The lot under TCT No. 63766 is 687 square meters in area and the second under TCT No. 63767 is 949 square meters, both totalling 1,636 square meters in area. TCT No. 63766 was issued in the names of herein five (5) respondents, viz: "FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR, JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita Puig; all of legal age, Filipinos."28 TCT No. 63767 was issued in the names of the five (5) respondents plus Virginia Aguilar, thus: "FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR, JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita Puig; and VIRGINIA N. AGUILAR, single, all of legal age, Filipinos."29 Respondent Antonio Aguilar testified that he and the other registered owners are all siblings who inherited the subject property by intestate succession from their parents.30 Their father died in 1945 and their mother in 1976.31 Both TCT's were issued in the siblings' names on September 2, 1987.31 In 1986, however, the siblings agreed to extrajudicially partition the lots among themselves, but no action was taken by them to this end. It was only eleven (11) years later, on November 28, 1997 that a survey of the two lots was made33 and on February 10, 1998, a consolidation subdivision plan was approved by the Lands Management Service of the Department of Environment and Natural Resources.34 The co-owners signed a Partition Agreement on February 24, 199835 and on May 21, 1998, TCT Nos. 63766 and 63767 were cancelled and new titles issued in the names of the individual owners pursuant to the Partition Agreement. Petitioner argues that the consolidation of the subject lots and their partition was made more than six (6) months after the complaint for expropriation was filed on August 4, 1997, hence, the partition was made in bad faith, for the purpose of circumventing the provisions of R.A. 7279.36 At the time of filing of the complaint for expropriation, the lots subject of this case were owned in common by respondents; Under a co-ownership, the ownership of an

undivided thing or right belongs to different persons.37 During the existence of the coownership, no individual can claim title to any definite portion of the community property until the partition thereof; and prior to the partition, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire land or thing.38 Article 493 of the Civil Code however provides that: "Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners shall be limited to the portion which may be allotted to him in the division upon termination of the co-ownership.39 Before partition in a co-ownership, every co-owner has the absolute ownership of his undivided interest in the common property. The co-owner is free to alienate, assign or mortgage his interest, except as to purely personal rights.40 He may also validly lease his undivided interest to a third party independently of the other co-owners.41 The effect of any such transfer is limited to the portion which may be awarded to him upon the partition of the property.42 Article 493 therefore gives the owner of an undivided interest in the property the right to freely sell and dispose of his undivided interest.43 The co-owner, however, has no right to sell or alienate a concrete specific or determinate part of the thing owned in common, because his right over the thing is represented by a quota or ideal portion without any physical adjudication.44 If the co-owner sells a concrete portion, this, nonetheless, does not render the sale void. Such a sale affects only his own share, subject to the results of the partition but not those of the other co-owners who did not consent to the sale.45 In the instant case, the titles to the subject lots were issued in respondents' names as coowners in 1987ten (10) years before the expropriation case was filed in 1997. As coowners, all that the respondents had was an ideal or abstract quota or proportionate share in the lots. This, however, did not mean that they could not separately exercise any rights over the lots. Each respondent had the full ownership of his undivided interest in the property. He could freely sell or dispose of his interest independently of the other co-owners. And this interest could have even been attached by his creditors.46 The partition in 1998, six (6) months after the filing of the expropriation case, terminated the co-ownership by converting into certain and definite parts the respective undivided shares of the co-owners.47 The subject property is not a thing essentially indivisible. The rights of the co-owners to have the property partitioned and their share in the same delivered to them cannot be questioned for "[n]o co-owner shall be obliged to remain in the co-ownership."48 The partition was merely a necessary incident of the coownership;49 and absent any evidence to the contrary, this partition is presumed to have been done in good faith. Upon partition, four (4) co-owners, namely, Francisco, Thelma, Rodolfo and Antonio Aguilar each had a share of 300 square meters under TCT Nos. 13849, 13852, 13850, 13851.50 Eusebio Aguilar's share was 347 square meters under TCT No. 1385351 while Virginia Aguilar's was 89 square meters under TCT No. 13854.52

It is noted that Virginia Aguilar, although granted 89 square meters only of the subject lots, is, at the same time, the sole registered owner of TCT No. 59780, one of the three (3) titles initially sought to be expropriated in the original complaint. TCT No. 59780, with a land area of 211 square meters, was dropped in the amended complaint. Eusebio Aguilar was granted 347 square meters, which is 47 square meters more than the maximum of 300 square meters set by R.A. 7279 for small property owners. In TCT No. 13853, Eusebio's title, however, appears the following annotation: "... subject to x x x, and to the prov. of Sec. 4 Rule 74 of the Rules of Court with respect to the inheritance left by the deceased Eusebio N. Aguilar."53 Eusebio died on March 23, 1995,54 and, according to Antonio's testimony, the former was survived by five (5) children.55 Where there are several co-owners, and some of them die, the heirs of those who die, with respect to that part belonging to the deceased, become also co-owners of the property together with those who survive. 56 After Eusebio died, his five heirs became co-owners of his 347 square-meter portion. Dividing the 347 square meters among the five entitled each heir to 69.4 square meters of the land subject of litigation. Consequently, the share of each co-owner did not exceed the 300 square meter limit set in R.A. 7279. The second question, however, is whether the subject property is the only real property of respondents for them to comply with the second requisite for small property owners. Antonio Aguilar testified that he and most of the original co-owners do not reside on the subject property but in their ancestral home in Paco, Manila. 57 Respondents therefore appear to own real property other than the lots in litigation. Nonetheless, the records do not show that the ancestral home in Paco, Manila and the land on which it stands are owned by respondents or anyone of them. Petitioner did not present any title or proof of this fact despite Antonio Aguilar's testimony. On the other hand, respondents claim that the subject lots are their only real property58 and that they, particularly two of the five heirs of Eusebio Aguilar, are merely renting their houses and therefore do not own any other real property in Metro Manila.59 To prove this, they submitted certifications from the offices of the City and Municipal Assessors in Metro Manila attesting to the fact that they have no registered real property declared for taxation purposes in the respective cities. Respondents were certified by the City Assessor of Manila;60 Quezon City;61 Makati City;62 Pasay City;63 Paranaque;64 Caloocan City;65 Pasig City;66 Muntinlupa;67 Marikina;68 and the then municipality of Las Pias69 and the municipality of San Juan del Monte70 as having no real property registered for taxation in their individual names.1wphi1.nt Finally, this court notes that the subject lots are now in the possession of respondents. Antonio Aguilar testified that he and the other co-owners filed ejectment cases against the occupants of the land before the Metropolitan Trial Court, Mandaluyong, Branches 59 and 60. Orders of eviction were issued and executed on September 17, 1997 which resulted in the eviction of the tenants and other occupants from the land in question.71 IN VIEW WHEREOF, the petition is DENIED and the orders dated September 17. 1998 and December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City in

SCA No. 1427 are AFFIRMED Case: Heirs of Juancho Ardona vs. Reyes, 125 SCRA 220 (1983)
Heirs of Juancho Ardona vs. Reyes Facts: The Philippine Tourism Authority filed 4 complaints with the Court of First Instance of Cebu City for theexpropriation of some 282 hectares of rolling land situated in barangay Alubog and Babag, Cebu City, under PTAsexpress authority to acquire by purchase, by negotiation or by condemnation proceedings any private land withinand without the tourist zones for the purposes indicated in Section 5, paragraph B(2), of its Revised Charter (PD564). The heirs of Juancho Ardona et. Al, ) filed their oppositions, and had a common allegation in that the taking isallegedly not impressed with public use under the Constitution; alleging that there is no specific constitutional provision authorizing the taking of private property for tourism purposes; that assuming that PTA has such power,the intended use cannot be paramount to the determination of the land as a land reform area; that limiting the amountof compensation by legislative fiat is constitutionally repugnant; and that since the land is under the land reform program, it is the Court of Agrarian Relations and not the Court of First Instance (CFI), that has jurisdiction over theexpropriation cases. The Philippine Tourism Authority having deposited with the Philippine National Bank, CebuCity Branch, an amount equivalent to 10% of the value of the properties pursuant to Presidential Decree No. 1533,the lower court issued separate orders authorizing PTA to take immediate possession of the premises and directingthe issuance of writs of possession. The Heirs of Ardona, et. al. then filed a petition for certiorari with preliminaryinjunction before the Supreme Court.Issue: Whether the expropriation of parcels of land for the purpose of constructing a sports complex by thePhilippine Tourism Authority be considered taking for public use. Held: The states power of eminent domain extends to the expropriation of land for tourism purposes although thisspecific objective is not expressed in the constitution. The policy objectives of the framers can be expressed only ingeneral terms such as social justice, local autonomy, conservation and development of the national patrimony publicinterest, and general welfare, among others. The programs to achieve these objectives vary from time to time andaccording to place. To freeze specific programs like tourism into express provisions would make the constitutionmore prolix than bulky code and require of the framers a prescience beyond Delphic proportions. The particular mention in the constitution of agrarian reform and transfer of utilities and other private enterprises to publicownership merely underscores the magnitude of the problems sought to be remedied by this programs. They do not preclude nor limit the exercise of the power of eminent domain for the purposes like tourism and other development program

Heirs of Juancho Ardona v. Reyes 123 SCRA 220 F: The Philippine Tourism Authority sought the expropriation of 282 Ha of land in Barangay Malubog and Babag in Cebu City. upon deposit of an amount equivalent to 10% of the value of the property, the CFI authorized the PTA to take immediate possession of the property. The charter of the PTA authorizes it to acquire through condemnation proceedings lands for tourist zone development of a sports complex. The petitioners who are occupants of the lands, filed a petition for certiorari in the SC. They contended that (1) the taking was not for public use; (2) the land was covered by the land reform program; and (3) expropriation would impair the obligation of contracts. HELD: The concept of public use is not limited to traditional purposes for the construction of roads, bridges, and the like. The idea that "public use" means "use by the public" has been discarded. As long as the purpose of the taking is public, then the power of eminent domain comes into play. It is accurate to state then that at present whatever may be

beneficially employed for the general welfare satisfies the requirement of public use. The petititioners have not shown that the area being developed is land reform area and that the affected persons have been given emancipation patents and certificates of land transfer. The contract clause has never been regarded as a barrier to the exercise of the police power and likewise eminent domain.

Case: Sumulong vs. Guerrero, 154 SCRA 461 (1987) Sumulong v. Guerrero 154 SCRA 461 (1987) F: On December 5, 1977, the National Housing Authority filed a complaint for the expropriation of 25 hectares of land in Antipolo, Rizal pursuant to PD 1224 authorizing the expropriation of private lands for socialized housing. Among those lands sought to be expropriated are the petitioners'' lands. They brought this suit in the SC challenging the constitutionality of PD 1224. HELD: Petitioners contend that socialized housing for the purpose of condemnation proceedings is not public use since it will benefit only a handful of people. The "public use" requirement is an evolving concept influences by changing conditions. Urban renewal or redevelopment and the construction of low-cost housing is recognized as a public purpose, not only because of the expanded concept of public use but also because of specific provisions in the Constitution. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and, in sum, the general welfare. Petitioners claim that there are vast areas of lands in Rizal hundreds of hectares of which are owned by a few landowners only. Why should the NHA pick their small lots? Expropriation is not confined to landed estates. The test to be applied for a valid expropriation of private lands was the area of the land and not the number of people who stood to be benefitted. The State acting through the NHA is vested with broad discretion to designate the property. The property owner may not interpose objections merely because in their judgment some other property would have been more suitable. The provisions on just compensation found in PD 1224, 1259, and 1313 are the same provisions which were declared unconstitutional in EPZA v. Dulay (1987) for being encroachments on judicial prerogatives. Case: Province of Camarines Sur vs. CA, 222 SCRA 170 (1993)
Republic of the Philippines SUPREME COURT Manila

FIRST DIVISION G.R. No. 103125 May 17, 1993 PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON. BENJAMIN V. PANGA as Presiding Judge of RTC Branch 33 at Pili, Camarines Sur, petitioners, vs. THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN JOAQUIN, respondents. The Provincial Attorney for petitioners. Reynaldo L. Herrera for Ernesto San Joaquin. QUIASON, J.:

In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551 entitled "Ernesto N. San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to decide whether the expropriation of agricultural lands by local government units is subject, to the prior approval of the Secretary of the Agrarian Reform, as the implementator of the agrarian reform program. On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed Resolution No. 129, Series of 1988, authorizing the Provincial Governor to purchase or expropriate property contiguous to the provincial capitol site, in order to establish a pilot farm for non-food and non-traditional agricultural crops and a housing project for provincial government employees. The "WHEREAS" clause o:f the Resolution states: WHEREAS, the province of Camarines Sur has adopted a five-year Comprehensive Development plan, some of the vital components of which includes the establishment of model and pilot farm for non-food and non-traditional agricultural crops, soil testing and tissue culture laboratory centers, 15 small scale technology soap making, small scale products of plaster of paris, marine biological and sea farming research center,and other progressive feasibility concepts objective of which is to provide the necessary scientific and technology know-how to farmers and fishermen in Camarines Sur and to establish a housing project for provincial government employees; WHEREAS, the province would need additional land to be acquired either by purchase or expropriation to implement the above program component; WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial Capitol Site ideally suitable to establish the same pilot development center; WHEREFORE . . . . Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R.Villafuerte, filed two separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin, docketed as Special Civil Action Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur, presided by the Hon. Benjamin V. Panga. Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession. The San Joaquins failed to appear at the hearing of the motion. The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for their property. In an order dated December 6, 1989, the trial court denied the motion to dismiss and authorized the Province of Camarines Sur to take possession of the property upon the deposit with the Clerk of Court of the amount of P5,714.00, the amount provisionally fixed by the trial court to answer for damages that private respondents may suffer in the event that the expropriation cases do not prosper. The trial court issued a writ of possession in an order dated January18, 1990. The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to take possession of their property and a motion to admit an amended motion to dismiss. Both motions were denied in the order dated February 1990. In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan be declared null and void; (b) that the complaints for expropriation be dismissed; and (c) that the order dated December 6, 1989 (i) denying the motion to dismiss and (ii) allowing the Province of Camarines Sur to take possession of the property subject of the expropriation and the order dated February 26, 1990, denying the motion to

admit the amended motion to dismiss, be set aside. They also asked that an order be issued to restrain the trial court from enforcing the writ of possession, and thereafter to issue a writ of injunction. In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate the expropriation proceedings under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and that the expropriations are for a public purpose. Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that under Section 9 of the Local Government Code (B.P. Blg. 337), there was no need for the approval by the Office of the President of the exercise by the Sangguniang Panlalawigan of the right of eminent domain. However, the Solicitor General expressed the view that the Province of Camarines Sur must first secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of petitioners for use as a housing project. The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to take possession of private respondents' lands and the order denying the admission of the amended motion to dismiss. It also ordered the trial court to suspend the expropriation proceedings until after the Province of Camarines Sur shall have submitted the requisite approval of the Department of Agrarian Reform to convert the classification of the property of the private respondents from agricultural to non-agricultural land. Hence this petition. It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the complaints for expropriation on the ground of the inadequacy of the compensation offered for the property and (ii) the nullification of Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan of the Province of Camarines Sur. The Court of Appeals did not rule on the validity of the questioned resolution; neither did it dismiss the complaints. However, when the Court of Appeals ordered the suspension of the proceedings until the Province of Camarines Sur shall have obtained the authority of the Department of Agrarian Reform to change the classification of the lands sought to be expropriated from agricultural to nonagricultural use, it assumed that the resolution is valid and that the expropriation is for a public purpose or public use. Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or "public use" for which the power of eminent domain may be exercised. The old concept was that the condemned property must actually be used by the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof could satisfy the constitutional requirement of "public use". Under the new concept, "public use" means public advantage, convenience or benefit, which tends to contribute to the general welfare and the prosperity of the whole community, like a resort complex for tourists or housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154 SC.RA 461 [1987]). The expropriation of the property authorized by the questioned resolution is for a public purpose. The establishment of a pilot development center would inure to the direct benefit and advantage of the people of the Province of Camarines Sur. Once operational, the center would make available to the community invaluable information and technology on agriculture, fishery and the cottage industry. Ultimately, the livelihood of the farmers, fishermen and craftsmen would be enhanced. The housing project also satisfies the public purpose requirement of the Constitution. As held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum the general welfare."

It is the submission of the Province of Camarines Sur that its exercise of the power of eminent domain cannot be restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A. No. 6657), particularly Section 65 thereof, which requires the approval of the Department of Agrarian Reform before a parcel of land can be reclassified from an agricultural to a nonagricultural land. The Court of Appeals, following the recommendation of the Solicitor General, held that the Province of Camarines Sur must comply with the provision of Section 65 of the Comprehensive Agrarian Reform Law and must first secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of the San Joaquins. In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the Philippine Tourism Authority can expropriate lands covered by the "Operation Land Transfer" for use of a tourist resort complex. There was a finding that of the 282 hectares sought to be expropriated, only an area of 8,970 square meters or less than one hectare was affected by the land reform program and covered by emancipation patents issued by the Ministry of Agrarian Reform. While the Court said that there was "no need under the facts of this petition to rule on whether the public purpose is superior or inferior to another purpose or engage in a balancing of competing public interest," it upheld the expropriation after noting that petitioners had failed to overcome the showing that the taking of 8,970 square meters formed part of the resort complex. A fair and reasonable reading of the decision is that this Court viewed the power of expropriation as superior to the power to distribute lands under the land reform program. The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by stressing the fact that local government units exercise such power only by delegation. (Comment, pp. 14-15; Rollo, pp. 128-129) It is true that local government units have no inherent power of eminent domain and can exercise it only when expressly authorized by the legislature (City of Cincinnati v. Vester, 28l US 439, 74 L.ed. 950, 50 SCt. 360). It is also true that in delegating the power to expropriate, the legislature may retain certain control or impose certain restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such delegated power may be a limited authority, it is complete within its limits. Moreover, the limitations on the exercise of the delegated power must be clearly expressed, either in the law conferring the power or in other legislations. Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the Local Government Code, which provides: A local government unit may, through its head and acting pursuant to a resolution of its sanggunian exercise the right of eminent domain and institute condemnation proceedings for public use or purpose. Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units must first secure the approval of the Department of Land Reform for the conversion of lands from agricultural to non-agricultural use, before they can institute the necessary expropriation proceedings. Likewise, there is no provision in the Comprehensive Agrarian Reform Law which expressly subjects the expropriation of agricultural lands by local government units to the control of the Department of Agrarian Reform. The closest provision of law that the Court of Appeals could cite to justify the intervention of the Department of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive Agrarian Reform Law, which reads: Sec. 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land ceases to be economically feasible and sound for, agricultural

purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the affected parties, and subject to existing laws, may authorize the reclassification or conversion of the land and its disposition: Provided, That the beneficiary shall have fully paid his obligation. The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed under the agrarian reform program as it speaks of "the lapse of five (5) years from its award." The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series of 1987, cannot be the source of the authority of the Department of Agrarian Reform to determine the suitability of a parcel of agricultural land for the purpose to which it would be devoted by the expropriating authority. While those rules vest on the Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of agricultural lands for residential, commercial or industrial uses, such authority is limited to the applications for reclassification submitted by the land owners or tenant beneficiaries. Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or constricted by implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241). To sustain the Court of Appeals would mean that the local government units can no longer expropriate agricultural lands needed for the construction of roads, bridges, schools, hospitals, etc, without first applying for conversion of the use of the lands with the Department of Agrarian Reform, because all of these projects would naturally involve a change in the land use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the expropriation is for a public purpose or public use. Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the property sought to be expropriated shall be public, the same being an expression of legislative policy. The courts defer to such legislative determination and will intervene only when a particular undertaking has no real or substantial relation to the public use (United States Ex Rel Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585). There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not embrace the sovereign unless the sovereign is specially mentioned as subject thereto (Alliance of Government Workers v. Minister of Labor and Employment, 124 SCRA 1 [1983]). The Republic of the Philippines, as sovereign, or its political subdivisions, as holders of delegated sovereign powers, cannot be bound by provisions of law couched in general term. The fears of private respondents that they will be paid on the basis of the valuation declared in the tax declarations of their property, are unfounded. This Court has declared as unconstitutional the Presidential Decrees fixing the just compensation in expropriation cases to be the value given to the condemned property either by the owners or the assessor, whichever was lower ([Export Processing Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of Talisay v. Ramirez, 183 SCRA 528 [1990], the rules for determining just compensation are those laid down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence on what they consider shall be the just compensation for their property. WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set aside insofar as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to

take possession of private respondents' property; (b) orders the trial court to suspend the expropriation proceedings; and (c) requires the Province of Camarines Sur to obtain the approval of the Department of Agrarian Reform to convert or reclassify private respondents' property from agricultural to non-agricultural use. The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court, denying the amended motion to dismiss of the private respondents.

Case: Estate of Jimenez v. PEZA, G.R. No. 137285 Republic SUPREME Manila of the Philippines COURT

SECOND DIVISION G.R. No. 137285 January 16, 2001 ESTATE SALUD JIMENEZ, petitioner, vs. PHILIPPINES EXPORT PROCESSING ZONE, respondent. DELEON, JR., J.: Before us is a petition for review on certiorari of the Decision1 and the Resolution2 of the Court of Appeals3 dated March 25, 1998 and January 14, 1999, respectively, which ordered the Presiding Judge of the Regional trial Court of Cavite City, Branch 17, to proceed with the hearing of the expropriation proceedings regarding the determination of just compensation for Lot 1406-B while setting aside the Orders dated August 4, 19974 and November 3, 1997 of the said Regional Trial Court which ordered the peaceful turnover to petitioner Estate of Salud Jimenez of said Lot 1406-B. The facts are as follows: On may 15, 1981, private respondent Philippines Export Processing Zone (PEZA), then called as the Export Processing Zone Authority (EPZA), initiated before the Regional Trial Court of Cavite expropriation proceedings5 on three (3) parcels of irrigated riceland in Rosario, Cavite. One of the lots, Lot 1406 (A and B) of the San Francisco de Malabon Estate, with an approximate area of 29,008 square meters, is registered in the name of Salud Jimenez under TCT No. T-113498 of the Registry of Deeds of Cavite. More than ten (10) years later6, the said trial court in an Order7 dated July 11, 1991 upheld the right of private respondent PEZA to expropriate, among others, Lot 1406 (A and B). Reconsideration of the said order was sought by petitioner contending that said lot would only be transferred to a private corporation, Philippines Vinyl Corp., and hence would not be utilized for a public purpose. In an Order8 dated October 25, 19997, the trial court reconsidered the Order dated July 11, 1991 and released Lot 1406-A from expropriation while the expropriation of Lot 1406-B was maintained. Finding the said order unacceptable, private respondent PEZA interposed an appeal to the Court of Appeals.

Meanwhile, petitioner wrote a letter to private respondent offering two (2) proposals, namely: 1. Withdrawal of private respondent's appeal with respect to Lot 1406-A I consideration of the waiver of claim for damages and lass of income for the possession of said lot by private respondent. 2. The swap of Lot 1406-B with Lot 434 covered by TCT No. T-14772 since private respondent has no money yet to pay for the lot. Private respondent's Board approved the "proposal" and the compromise agreement was signed by private respondent through its then administrator Tagumpay Jadiniano assisted by Government Corporate Counsel Oscar I. Garcia. Said compromise agreement9 dated January 4, 1993 is quoted hereunder: 1. That plaintiff agrees to withdraw its appeal from the Order of the Honorable Court dated October 25, 1991 which released lot 1406-A from the expropriation proceedings. On the other hand, defendant Estate of Salud Jimenez agrees to waive, quit claim and forfeit its claim for damages and loss of income which it sustained by person of the possession of said lot by plaintiff from 1981 up to the present. 2. That the parties agree that defendant Estate of Salud Jimenez shall transfer lot 1406-B with an area of 13,118 square meters which forms part of the lot registered under TCT No. 113498 of the Registry of Deeds of Cavite to the name of the plaintiff and the same shall be swapped and exchanged with lot 434 with an area of 14,167 square meters and covered by Transfer Certificate of Title No. 14772 of the Registry of Deeds of Cavite which lot will be transferred to the name of Estate of Salud Jimenez.1wphi1.nt 3. That the swap arrangement recognized the fact that the lot 1406-B covered by TCT No. T113498 of the state of defendant Salud Jimenez is considered expropriated in favor of the government based on Order of the Honorable Court dated July 11, 1991. However, instead of being paid the just compensation for said lot, the estate of said defendant shall be paid with lot 434 covered by TCT No. T-14772. 4. That the parties agree that they will abide by the terms of the foregoing agreement in good faith and the Decision to be rendered based on this Compromise Agreement is immediately final and executory. The Court of Appeals remanded the case to the trial court for the approval of the said compromise agreement entered into between the parties, consequent with the withdrawal of the appeal with the Court of Appeals. In the Order10 dated August 23, 1993, the trial court approved the compromise agreement. However, private respondent failed to transfer the title of Lot 434 to petitioner inasmuch as it was not the registered owner of the covering TCT No. T-14772 but Progressive Realty Estate, Inc. Thus, on March 13, 1997, petitioner Estate filed a "Motion to Partially Annul the Order dated August 23, 1993."11 In the Order12 dated August 4, 1997, the trial court annulled the said compromise agreement entered into between the parties and directed private respondent to peacefully turn over Lot 1406-A to the petitioner. Disagreeing with the said Order of the trial court, respondent PEZA moved13 for its reconsideration. The same proved futile since the trial court denied reconsideration in its Order14 dated November 3, 1997. On December 4, 1997, the trial court, at the instance15 of petitioner, corrected the Orders dated August 4, 1997 and November 3, 1997 by declaring that it is Lot 1406-B and Lot 1406-A that

should be surrendered and returned to petitioner. On November 27, 1997, respondent interposed before the Court of Appeals a petition for certiorari and prohibition16 seeking to nullify the Orders dated August 4, 1997 and November 3, 1997 of the court. Petitioner filed its Comment17 on January 16, 1998. Acting on the petition, the Court of Appeals in a Decision18 dated March 25, 1998 upheld the rescission of the compromise agreement, ratiocinating thus: A judicial compromise may be enforced by a writ of execution, and if a party fails or refuses to abide by the compromise, the other party may regard it as rescinded and insist upon his original demand. This is in accordance with Article 2041 of the Civil Code, which provides: If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand." The Supreme Court had the occasion to explain this provision of law in the case of Leonor v. Syip (1 SCRA 1215). It ruled that the language of the above mentioned provision denotes that no action for rescission is required and that the aggrieved party by the breach of compromise agreement, may regard the compromise agreement already rescinded, to wit: It is worthy of notice, in this connection, that, unlike article 2039 of the same Code, which speaks of "a cause of annulment or rescission of the compromise" and provides that "the compromise may be annulled or rescinded" for the cause therein specified, thus suggesting an action for annulment or rescission, said Article 2041 confers upon the party concerned not a "cause" for rescission, or the right to "demand" rescission, of a compromise, but the authority, not only to "regard it as rescinded," but, also, to 'insist upon his original demand." The language of this Article 2041, particularly when contrasted with that of Article 2039, denotes that no action for rescission is required in said Article 2041, and that to party aggrieved by the breach of a compromise agreement may, if he chooses, bring the suit contemplated or involved in his original demand, as if there had never been any compromise agreement, without bringing an action for rescission thereof. He need not seek a judicial declaration of rescission, for he may "regard" the compromise agreement already, "rescinded". Nonetheless, it held that: Having upheld the rescission of the compromise agreement, what is then the status of the expropriation proceedings? As succinctly discussed in the case of Leonor vs. Sycip, the aggrieved party may insist on his original demand as if there had never been any compromise agreement. This means that the situation of the parties will revert back to status before the execution of the compromise agreement, that is, the second stage of the expropriation proceedings, which is the determination of the just compensation.19 xxx Thus, the appellate court partially granted the petition by setting aside the order of the trial court regarding "the peaceful turn over to the Estate of Salud Jimenez of Lot No. 1406-B" and instead ordered the trial judge to "proceed with the hearing of the expropriation proceedings regarding the determination of just compensation over Lot 1406-B."20 Petitioner sought21 reconsideration of the Decision dated March 25, 1998. However, public respondent in a resolution22 dated January 14, 1999 denied petitioner's motion for reconsideration. Hence, this petition anchored on the following assignment of errors, to wit:

I THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE ERROR IN GIVING DUE COURSE TO THE SPECIAL CIVIL ACTION FILED BY RESPONDENT PEZA IN CA-G.R. SP. NO. 46112 WHEN IT WAS MADE SUBSTITUTE FOR LOST APPEAL IN CLEAR CONTRAVENTION OF THE HONORABLE COURT'S RULING IN SEMPIO VS. COURT OF APPEALS (263 SCRA 617) AND ONGSITCO VS. COURT OF APPEALS (255 SCRA 703) AND DESPITE THE FACT THAT THE ORDER OF THE CAVITE REGIONAL TRIAL COURT IS ALREADY FINAL AND EXECUTORY. II GRANTING IN GRATIA ARGUMENTI THAT THE SPECIAL CIVIL ACTION OF CERTIONRARI IS PROPER, THE COURT OF APPEALS NEVERTHELESS WRONGLY INTERPRETED THE PHRASE "ORIGINAL DEMAND" CONTAINED IN ARTICLE 2041 OF PETITIONER ESTATE IS THE RETURN OF THE SUBJECT LOT (LOT 1406-B) WHICH IS SOUGHT TO BE EXPROPRIATED AND NOT THE DETERMINATION OF JUST COMPENSATION FOR THE LOT. FURTHERMORE, EVEN IF THE INTERPRETATION OF THE COURT OF APPEALS OR THE IMPORT OF THE PHRASE IN QUESTION IS CORRECT, IT IS ARTICLE 2039 OF THE CIVIL CODE AND NOT ARTICLE 2041 WHICH IS APPLICABLE TO COMPROMISE AGREEMENTS APPROVED BY THE COURTS.23 We rule in favor of the respondent. Petitioner contends that the Court of Appeals erred in entertaining the petition for certiorari files by respondent under Rule 65 of the Rules of Court, the same being actually a substitute for lost appeal. It appeared that on August 11, 1997, respondent received the Order of the trial court dated August 4, 1997 annulling the compromise agreement. On August 26, 1997, that last day for the filling of a notice of appeal, respondent filed instead a motion for reconsideration. The Order of the trial court denying the motion for reconsideration was received by respondent on November 23, 1997. The reglementary period to appeal therefore lapsed on November 24, 1997. On November 27, 1997, however, respondent filed with the Court of Appeals a petition for certiorari docketed as CA-G.R. SP. No. 46112. Petitioner claims that appeal is the proper remedy inasmuch as the Order dated August 4, 1997 of the Regional Trial Court is a final order that completely disposes of the case. Besides, according to petitioner, respondent is estopped in asserting that certiorari is the proper remedy inasmuch as it invoked the fifteen (15) day reglementary period for appeal when if filed a motion for reconsideration on August 26, 1997 and not the sixty (60) day period for filing for certiorari under Rule 65 of the Rules of Court. The Court of Appeal did not err in entertaining the petition for certiorari under Rule 65 of The Rules of Court. A petition for certiorari is the proper remedy when any tribunal, board, or officer exercising judicial or quasi-judicial functions has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal, nor any plain, speedy, and adequate remedy at law.24 Grave abuse of discretion is defined as the capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. An error of judgment committed in the exercise of its legitimate jurisdiction is not the same as "grave abuse of discretion." An abuse of discretion is not sufficient by itself to justify the issuance of a writ of certiorari. The abuse must be grave and patent, and it must be shown that the discretion was exercised arbitrarily and despotically.25 As a general rule, a petition for certiorari will not lie if an appeal is the proper remedy thereto such as when an error of judgment as well as of procedure are involved. As long as a court acts within its

jurisdiction and does not gravely abuse its discretion in the exercise thereof, any supposed error committed by it will amount to nothing more than an error of judgment reviewable by a timely appeal and not assailable by a special civil action of certiorari. However, in certain exceptional cases, where the rigid application of such rule will result in a manifest failure or miscarriage of justice, the provisions of the Rules of Court which are technical rules may be relaxed. Certiorari has been deemed to be justified, for instance, in order to prevent irreparable damage and injury to a party where the trial judge has capriciously and whimsically exercised his judgment, or where there may be danger of clear failure of justice, or where and ordinary appeal would simply be inadequate to relieve a party form the injurious effects of the judgment complained of.26 Expropriation proceedings involve two (2) phases. The first phase ends either with an order of expropriation (when the right of plaintiff to take the land and the public purpose to which they are to be devoted are upheld) or an order of dismissal. Either order would be a final one since if finally disposes of the case. The second phase concerns the determination of just compensation to be ascertained by three (3) commissioners. It ends with an order fixing the amount to be paid to the dependant. Inasmuch as it leaves nothing more to be done, this order finally disposes of the second stage. To both orders the remedy therefrom is an appeal.27 In the case at bar, the first phase was terminated when the July 11, 1991 order of expropriation became final and the parties subsequently entered into a compromise agreement regarding the mode of payment of just compensation. When respondent failed to abide by the terms of the compromise agreement, petitioner filed and action to partially rescind the same. Obviously, the trial could only validly order the rescission of the compromise agreement anent the payment of just compensation inasmuch as that was the subject of the compromise. However, on August 4, 1991, the trial court gravely abused its discretion when it ordered the return of Lot 1406-B. It, in effect, annulled the Order of Expropriation dated July 11, 1991 which was already final and executory. We affirm the appellate court's reliance on the cases of Aguilar v. Tan28 and Bautista v. Sarmiento29 wherein it was ruled that the remedies of certiorari and appeal are not mutually exclusive remedies in certain exceptional cases, such as when there is grave abuse of discretion, or when public welfare so requires. The trial court gravely abused its discretion by setting aside the order of expropriation which has long become final and executory and by ordering the return of Lot 1406-B to the petitioner. Its action was clearly beyond its jurisdiction for it cannot modify a final and executory order. A final and executory order can only be annulled by petition to annual the same on the ground of extrinsic fraud and lack of jurisdiction30 or a petition for relief from a final order or judgment under Rule 38 of the Rules of Court. However, no petition to that effect was filed. Hence, though an order completely and finally disposes of the case, if appeal is not a plain, speedy and adequate remedy at law of the interest of substantial justice requires, a petition for certiorari may be availed of upon showing of lack or excess of jurisdiction or grave abuse of discretion on the part of the trial court. According to petitioner the rule that a petition for certiorari can be availed of despite the fact that the proper remedy is an appeal only apples in cases where the petition is filed within the reglementary period for appeal. Inasmuch as the petition in the case at bar was filed after the fifteen (15) day regulatory period to appeal, said exceptional rule as enshrined in the cases of Aguilar v. Tan31 and Bautista v. Sarmiento32 is not applicable. We find this interpretation too restrictive. The said cases do not set as a condition sine qua non the filing of a petition for certiorari within the fifteen (15) day period to appeal in order for the said petition to be entertained by the court. To espouse petitioner's contention would render inutile the sixty (60) day period to file a petition for certiorari under Rule 65. In Republic v. Court of Appeals33, which also involved an expropriation case where the parties entered in a compromise agreement on just compensation, this Court entertained the petition for certiorari despite the existence of an appeal and despite its being filed after the lapse of the fifteen (15) day period to appeal the same. We ruled that the Court has not too

infrequently given due course to a petition for certiorari, even when the proper remedy would have been an appeal, where valid and compelling considerations would warrant such a recourse.34 If compelled to return the subject parcel of land, the respondent would divert its budget already allocated for economic development in order to pay petitioner the rental payments from the lessee banks. Re-adjusting its budget would hamper and disrupt the operation of the economic zone. We believe that the grave abuse of discretion committed by the trial court and the consequent disruption in the operation of the economic zone constitutes valid and compelling reasons to entertain the petition. Petitioner next argues that the instances cited under Section 1 of Rule 41 of the Rules of Court35 whereby an appeal is not allowed are exclusive grounds for a petition for certiorari. Inasmuch as the August 4, 1997 Order rescinding the compromise agreement does not fall under any of the instances enumerated therein, a petition for certiorari will not prosper. This reasoning is severely flawed. The said section is not phrased to make the instances mentioned therein the sole grounds for a petition for certiorari. It only states that Rule 65 may be availed of under the grounds mentioned therein, but it never intended said enumeration to be exclusive. It must be remembered that a wide breadth of discretion is granted a court of justice in certiorari proceeding.36 In the second assignment of error, petitioner assails the interpretation by the Court of appeals of the phrase "original demand" in Article 2041 of the New Civil Code vis--vis the case at bar. Article 2041 provides that, "if one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his "original demand" According to petitioner, the appellate court erred in interpreting "original demand" as the fixing of just compensation. Petitioner claims that the original demand is the return of Lot 1406-B as stated in petitioner's motion to dismiss37 the complaint for expropriation inasmuch as the incorporation of the expropriation order in the compromise agreement subjected the said order to rescission. Since the order of expropriation was rescinded, the authority of respondent to expropriate and the purpose of expropriation have again become subject to dispute. Petitioner cites cases38 which provide that upon the failure to pay by the lessee, the lessor can ask for the return of the lot and the ejectment of the former, this being the lessor's original demand in the complaint. We find said cases to be inapplicable to this instant case for the reason that the case at bar is not a simple ejectment case. This is an expropriation case which involves two (2) orders: an expropriation order and an order fixing just compensation. Once the first order becomes final and no appeal thereto is taken, the authority to expropriate and its public use cannot anymore be questioned. Contrary to petitioner's contention, the incorporation of the expropriation order in the compromise agreement did not subject said to rescission but instead constituted an admission by petitioner of respondent's authority to expropriate the subject parcel of land and the public purpose for which it was expropriated. This is evident from paragraph three (3) of the compromise agreement which states that the "swap arrangement recognizes the fact that Lot 1406-B covered by TCT No. T113498 of the estate of defendant Salud Jimenez is considered expropriated in favor of the government based on the Order of the Honorable Court dated July 11, 1991." It is crystal clear from the contents of the agreement that the parties limited the compromise agreement to matter of just compensation to petitioner. Said expropriate order is not closely intertwined with the issue of payment such that failure to pay by respondent will also nullify the right of respondent to expropriate. No statement to this effect was mentioned in the agreement. The Order was mentioned in the agreement only to clarify what was subject to payment.1wphi1.nt This court therefore finds that the Court of Appeals did not err in interpreting "original demand" to mean the fixing of just compensation. The authority of respondent and the nature of the purpose thereof have been put to rest when the Expropriation Order dated July 11, 1991 became final and was duly admitted by petitioner in the compromise agreement. The only issue for consideration is

the manner and amount of payment due to petitioner. In fact, aside from the withdrawal of private respondent's appeal to the Court of Appeals concerning Lot 1406-A, the matter of payment of just compensation was the only subject of the compromise agreement dated January 4, 1993. Under the compromise agreement, petitioner was supposed to receive respondent's Lot No. 434 in exchange for Lot 1406-B. When respondent failed to fulfill its obligation to deliver Lot 434, petitioner can again demand for the payment but not the return of the expropriated Lot 1406-B. This interpretation by the Court of Appeals is in according with Section 4 to 8, Rule 67 of the Rules of Court. We also find as inapplicable the ruling in Gatchalian v. Arlegui39 , a case cited by petitioner, where we held that even a final judgment can still be compromised so long as it is full satisfied. As already stated, the expropriation order was not the subject of the compromise agreement. It was only the mode of payment which was the subject of the compromise agreement. Hence, the Order of Expropriation dated July 11, 1991 can no longer be annulled. After having invoked the provisions of Article 2041, petitioner inconsistently contends that said article does not apply to the case at bar inasmuch as it is only applicable to cases where a compromise has not been approved by a court. In the case at bar, the trial court approved the compromise agreement. Petitioner insists that Articles 2038, 2039 and 1330 of the New Civil Code should apply. Said articles provide that: Article 2038. A compromise, in which there is mistake, fraud, violence, intimidation, undue influence, or falsity of documents, is subject to the provisions of Article 1330 of this Code. However, one of the parties cannot set up a mistake of fact as against the other if the latter, by virtue of the compromise, has withdrawn from a litigation already commenced. Article 2039. When the parties compromise generally on all differences which they might have with each other, the discovery of documents referring to one or more but not to all of the questions settled shall not itself be a cause for annulment or rescission of the compromise, unless said documents have been concealed by one of the parties. But the compromise may be annulled or rescinded if it refers only to one thing to which one of the parties has no right, as shown by the newly discovered documents.(n)" Article 1330. A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable.40 The applicability of the above-quoted legal provisions will not change the outcome of the subject of the rescission. Since the compromise agreement was only about the mode of payment by swapping of lots and not about the right and purpose to expropriate the subject Lot 1406-B, only the originally agreed for of compensation that is by cash payment, was rescinded. This court holds that respondent has the legal authority to expropriate the subject Lot 1406-B and that the same was for a valid public purpose. In Sumulong v. Guerrero41 , this Court has ruled that, the "public use" requirement for a valid exercise of the power of eminent domain is a flexible and evolving concept influenced by changing conditions. In this jurisdiction, the statutory and judicial trend has been summarized as follows: this court has ruled that the taking to be valid must be for public use. There was a time when it was felt that a literal meaning should be attached to such a requirement. Whatever project is undertaken must be for the public to enjoy as in the case of streets or parks. Otherwise expropriation is not allowable. It is not anymore. As long as the purpose of the taking is public, then the power of eminent domain comes into playIt is accurate to beneficially employed for the general welfare satisfies the

requirement of public use. [Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 (1983) at 234-235 quoting E. Fernando, the Constitution of the Philippines 523-4(2nd Ed. 1977) The term "public use" has acquired a more comprehensive coverage. To the literal import of the term signifying strict use or employment by the public has been added the broader notion of indirect public benefit or advantage. In Manosca v. Court of Appeals, this Court has also held that what ultimately emerged is a concept of public use which is just as abroad as "public welfare."42 Respondent PEZA expropriated the subject parcel of land pursuant to Proclamation No. 1980 dated May 30, 1980 issued by former President Ferdinand Marcos. Meanwhile, the power of eminent domain of respondent is contained in its original charter, Presidential Decree No. 66, which provides that: Section 23. Eminent Domain. For the acquisition of rights of way, or of any property for the establishment of export processing zones, or of low-cost housing projects for the employees working in such zones, or for the protection of watershed areas, or for the construction of dams, reservoirs, wharves, piers, docks, quays, warehouses and other terminal facilities, structures and approaches thereto, the Authority shall have the right and power to acquire the same by purchase, by negotiation, or by condemnation proceedings. Should the authority elect to exercise the right of eminent domain, comdemnation proceedings shall be maintained by and in the name of the Authority and it may proceed in the manner provided for by law. (italics supplied) Accordingly, subject Lot 1406-B was expropriated "for the constructionof terminal facilities, structures and approaches thereto." The authority is broad enough to give the respondent substantial leeway in deciding for what public use the expropriated property would be utilized. Pursuant to this broad authority, respondent leased a portion of the lot to commercial banks while the rest was made a transportation terminal. Said public purposes were even reaffirmed by Republic Act No. 7916, a law amending respondent PEZA's original charter, which provides that: Sec. 7 ECOZONE to be a Decentralized Agro-Industrial, industrial, Commercial/Trading, Tourist, Investment and financial Community. Within the framework of the Constitution, the interest of national sovereignty and territorial integrity of the Republic, ECOZONE shall be developed, as much as possible, into a decentralized, self-reliant and self-sustaining industrial, commercial/trading, agro-industrial, tourist, banking, financial and investment center with minimum government intervention. Each ECOZONE shall be provided with transportation, telecommunications and other facilities needed to generate linkage with industries and employment opportunities for its own habitants and those of nearby towns and cities. The ECOZONE shall administer itself on economic, financial, industrial, tourism development and such other matters within the exclusive competence of the national government. (italics supplied) Among the powers of PEZA enumerated by the same law are: Sec.12. Functions and Powers of PEZA Board. ---- The Philippines Economic Zone Authority (PEZA) Board shall have the following function and powers: (a) Set the general policies on the establishment and operations of the ECOZONE, Industrial estate, exports processing zones, free trade zones, and the like:

xxx (b) Regulate and undertake the establishment, operation and maintenance of utilities, other services and infrastructure in the ECOZONE, such as heat, light and power, water supply, telecommunications, transport, toll roads and bridges, port services, etc. and to fix just, reasonable and competitive rates, fares, charges and fees thereof.43 In Manila Railroad Co. v. Mitchel44 , this Court has ruled that in the exercise of eminent domain, only as much land can be taken as is necessary for the legitimate purpose of the condemnation, the term "necessary", in this connection, does not mean absolutely indispensable but requires only a reasonable necessity of the taking for the stated purpose, growth and future needs of the enterprise. The respondent cannot attain a self-sustaining and viable ECOZONE if inevitable needs in the expansion in the surrounding areas are hampered by the mere refusal of the private landowners to part with their properties. The purpose of creating an ECOZONE and other facilities is better served if respondent directly owns the areas subject of the expansion program. The contention of petitioner that the leasing of the subject lot to banks and building terminals was not expressly mentioned in the original charter of respondent PEZA and that it was only after PEZA devoted the lot to said purpose the Republic Act No. 7916 took effect, is not impressed with merit. It should be pointed out that Presidential Decree No. 66 created the respondent PEZA to be a viable commercial, industrial and investment area. According to the comprehensive wording of Presidential Decree No. 66, the said decree did not intend to limit respondent PEZA to the establishment of an export processing zone but it was also bestowed with authority to expropriate parcels of land "for the construction of terminal facilities, structures and approaches thereto." Republic Act No. 7916 simply particularized the broad language employed by Presidential Decree No. 66 by specifying the purposes for which PEZA shall devote the condemned lots, that is, for the construction and operation of an industrial estate, an export processing zone, free trade zones, and the like. The expropriation of Lot 1406-B for the purpose of being leased to banks and for the construction of a terminal has the purpose of making banking and transportation facilities easily accessible to the persons working at the industries located in PEZA. The expropriation of adjacent areas therefore comes as a matter of necessity to bring life to the purpose of the law. In such a manner, PEZA's goal of being a major force in the economic development of the country would be realized. Furthermore, this Court has already ruled that: (T)he Legislature may directly determine the necessity for appropriating private property for a particular improvement for public use, and it may select the exact location of the improvement. In such a case, it is well-settled that the utility of the proposed improvement, the existence of the public necessity for its construction, the expediency of constructing it, the suitableness of the location selected, are all questions exclusively for the legislature to determine, and the courts have no power to interfere or to substitute their own for those of the representatives of the people. In the absence of some constitutional or statutory provision to the contrary, the necessity and expediency of exercising the right of eminent domain are questions essentially political and not judicial in their character.45 Inasmuch as both Presidential Decree No. 66 and Republic Act No. 7916, bestow respondent with authority to develop terminal facilities and banking centers, this Court will not question the respondent's lease of certain portions of the expropriated lot to banks, as well as the construction of terminal facilities. Petitioner contends that respondent is bound by the representations of its Chief Civil Engineer when the latter testified before the trial court that the lot was to be devoted for the construction of

government offices. Anent this issue, suffice it to say that PEZA can vary the purpose for which a condemned lot will be devoted to provided that the same is for public use. Petitioner cannot impose or dictate on the respondent what facilities to establish for as long as the same are for public purpose. Lastly, petitioner appeals to the sense of justice and equity to this Court in restoring the said lot to its possession. From the time of the filing of the expropriation case in 1981 up to the present, respondent has not yet remunerated the petitioner although respondent has already received earnings from the rental payments by lessees of the subject property. We have rules that the concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" inasmuch as the property owner is made to suffer the consequences of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss.46 Payment of just compensation should follow as a matter of right immediately after the order of expropriation is issued. Any delay in payment must be counted from said order. However, the delay to constitute a violation of due process must be unreasonable and inexcusable: it must be deliberately done by a party in order to defeat the ends of justice. We find that respondent capriciously evaded its duty of giving what is due to petitioner. In the case at bar, the expropriation order was issued by the trial court in 1991. The compromise agreement between the parties was approved by the trial court in 1993. However, from 1993 up to the present, respondent has failed in its obligation to pay petitioner to the prejudice of the latter. Respondent caused damage to petitioner in making the latter to expect that it had a good title to the property to be swapped with Lot 1406-B; and meanwhile, respondent has been reaping benefits from the lease or rental income of the said expropriated lot. We cannot tolerate this oppressive exercise of the power of eminent domain by respondent. As we have ruled in Cosculluela vs. Court of Appeals:47 In the present case, the irrigation project was completed and has been in operation since 1976. The project is benefiting the farmers specifically and the community in general. Obviously, the petitioner's land cannot be returned to him. However, it is high time that the petitioner be paid what was due him eleven years ago. It is high time that the petitioner be paid what was due him eleven years ago. It is arbitrary and capricious for a government agency to initiate expropriation proceedings, seize a person's property, allow the judgment of the court to become final and executory and then refuse to pay on the ground that there are no appropriations for the property earlier taken and profitably used. We condemn in the strongest possible terms the cavalier attitude of government officials who adopt such a despotic and irresponsible stance. Though the respondent has committed a misdeed to petitioner, we cannot, however, grant the petitioner's prayer for the return of the expropriated Lot No. 1406-B. The Order of expropriation dated July 11, 1991, has long become final and executory. Petitioner cited Provincial Government of Sorsogon v. Rosa E. Vda. De Villaroya48 to support its contention that it is entitled to a return of the lot where this court ruled that "under ordinary circumstance, immediate return of the owners of the unpaid property is the obvious remedy." However, the said statement was not the ruling in that case. As in order cases where there was no prompt payment by the government, this Court declared in Sorsogon that "the Provincial Government of Sorsogon is expected to immediately pay as directed should any further delay be encountered, the trial court is directed to seize any patrimonial property or cash saving of the province in the amount necessary to implement this decision." However, this Court also stressed and declared in that case that "In cases where land is taken for public use, public interest, however, must be considered." In view of all the foregoing, justice and equity dictate that this case be remanded to the trial court

for hearing of the expropriation proceedings on the determination of just compensation for Lot 1406-B and for its prompt payment to the petitioner. WHEREFORE, the instant petition is hereby denied. The Regional Trial Court of Cavite City is hereby ordered to proceed with the hearing of the expropriation proceedings, docketed as Civil Case No. N-4029, regarding the determination of just compensation for Lot 1406-B, covered and described in TCT No. T-113498-Cavite, and to resolve the same with dispatch.

Case: Mun. Of Meycayauan vs. IAC,157 SCRA 640 (1988)

MUNICIPALITY OF MEYCAUAYAN, BULACAN, HON. ADRIANO D. DAEZ,MUNICIPAL MAYOR, MEYCAUAYAN, BULACAN, petitioners , vs.INTERMEDIATE APPELLATE COURT and PHILIPPINE PIPES &MERCHANDIZING CORPORATION, respondents G.R. No. 72126, January 29, 1988FACTS OF THE CASE: In 1975, respondent Philippine Pipes and Merchandising Corporation filed withthe Office of the Municipal Mayor of Meycauayan, Bulacan, an application for ap e r m i t t o f e n c e a p a r c e l o f l a n d c o v e r e d b y Tr a n s f e r C e r t i f i c a t e s o f T i t l e N o s . 215165 and 37879. The fencing of said property was allegedly to enable the storageof the respondent's heavy equipment and various finished products such as larged i a m e t e r s t e e l p i p e s , p o n t o o n p i p e s f o r p o r t s , w h a r v e s , a n d h a r b o r s , b r i d g e components, pre-stressed girders and piles, large diameter concrete pipes, andparts for low cost housing.In the same year, the Municipal Council of Meycauayan, passed ResolutionNo. 258, manifesting the intention to expropriate the respondent's parcel of landcovered by Transfer Certificate of Title No. 37879. On March 10, 1976, the SpecialCommittee recommended that the Provincial Board of Bulacan disapprove or annult h e r e s o l u t i o n i n q u e s t i o n b e c a u s e t h e r e w a s n o g e n u i n e n e c e s s i t y f o r t h e Municipality of Meycauayan to expropriate the respondent's property for use as apublic road. Thus, the Provincial Board of Bulacan passed Resolution No. 238 disapproving andannulling Resolution No. 258. The respondent, then, reiterated to the Office of the Mayor its petition for theapproval of the permit to fence the aforesaid parcels of land. On October 21, 1983,however, the Municipal Council of Meycauayan, passed Resolution No. 21, Series of 1983, for the purpose of expropriating anew the respondent's land. The ProvincialBoard of Bulacan approved the aforesaid resolution on January 25, 1984. Thereafter,the petitioner, on February 14, 1984, filed with the Regional Trial Court of Malolos,Bulacan, Branch VI, a special civil action for expropriation.On August 27, 1984, the trial court issued an order declaring the taking of thep r o p e r t y a s l a w f u l a n d a p p o i n t i n g t h e P r o v i n c i a l A s s e s s o r o f B u l a c a n a s c o u r t commissioner who shall hold the hearing to ascertain the just compensation for thep r o p e r t y. O n January 10, 1985, the appellate court affirmed the trial c o u r t ' s decision. However, upon motion for reconsideration by the respondent, the decisionwas re-examined and reversed. The appellate court held that there is no genuinenecessity to expropriate the land for use as a public road as there were severalo t h e r r o a d s f o r t h e s a m e p u r p o s e a n d a n o t h e r m o r e a p p r o p r i a t e l o t f o r t h e proposed public road. The court, taking into consideration the location and size of t h e l a n d , a l s o o p i n e d t h a t t h e l a n d i s m o r e I d e a l f o r u s e a s s t o r a g e a r e a f o r respondent's heavy equipment and finished products. Hence, this petition. ISSUES: Whether or not there is a genuine necessity to expropriate the land for use asa public

road Whether or not the Municipality of Meycauyan can validly expropriate thesubject road RULINGS: We agree with the respondent. The jurisdiction of this Court in cases brought to us from the Court of Appealsis limited to the review of errors of law, factual issues not being proper in certiorarip r o c e e d i n g s . N o n e o f t h e e x c e p t i o n s w a r r a n t i n g n o n - a p p l i c a t i o n o f t h e r u l e i s present in this case. On the contrary, we find that the appellate court's decision issupported by substantial evidence. The petitioner's purpose in expropriating the respondent's property is toconvert the same into a public road which would provide a connecting link betweenMalhacan Road and Bulac Road in Valenzuela, Bulacan and thereby ease the trafficin the area of vehicles coming from MacArthur Highway. The records, however,reveals that there are other connecting links between the aforementioned roads. The petitioner itself admits that there are four such cross roads in existence. Therespondent court stated that with the proposed road, there would be seven. There is no showing that some of the six other available cross roads haveb e e n c l o s e d o r t h a t the private roads in the subdivision may not be used formunicipal p u r p o s e s . W h a t i s m o r e l i ke l y i s t h a t t h e s e r o a d s h a v e a l r e a d y b e e n turned over to the government. The petitioner alleges that surely the environmentalprogress during the span of seven years between the first and second attempts toexpropriate has brought about a change in the facts of the case. This allegationdoes not merit consideration absent a showing of concrete evidence attesting to it. There is no question here as to the right of the State to take private propertyfor public use upon payment of just compensation. What is questioned is theexistence of a genuine necessity therefor. I n t h e c a s e o f C i t y o f M a n i l a v. C h i n e s e C o m m u n i t y o f M a n i l a ( 4 0 Phil. 349), this Court held that the foundation of the right to exercise thepower of eminent domain is genuine necessity and that necessity must beof a public character . Condemnation of private property is justified only if it is fort h e p u b l i c g o o d and there is a genuine necessity of a public c h a r a c t e r . Consequently, the courts have the power to inquire into the legality of theexercise of the right of eminent domain and to determine whether there isa genuine necessity therefor In the case of De Knecht v. Bautista , (100 SCRA 660) , this court furtherr u l e d t h a t t h e g o v e r n m e n t m a y n o t c a p r i c i o u s l y c h o o s e w h a t p r i v a t e property should be taken. Citing the case of J . M . Tu a s o n & C o . , I n c . v. L a n d Tenure Administration (supra), the court held that with due recognition then of thepower of Congress to designate the particular property to be taken and how much thereof may be condemned in the exercise of the power of expropriation, it is stilla judicial question whether in the exercise of such competence, the partyadversely affected is the victim of partiality and prejudice . That the equalprotection clause will not allow. There is absolutely no showing in the petition why the more appropriatel o t f o r t h e p r o p o s e d r o a d w h i c h w a s o f f e r e d f o r s a l e h a s n o t b e e n t h e subject of the petitioner's attempt to expropriate assuming there is a realneed for another

connecting road.

Case: De Knecht vs. Bautista, 100 SCRA 660 (1980)

De Knecht v. Bautista 100 SCRA 660 (1980)

F: The plan to extend EDSA to Roxas Boulevard to be ultimately linked to the Cavite Coastal Road Project, originally called for the expropriation of properties along Cuneta Avenue in Pasay City. Later on, however, the Ministry of Public Highways decided to make the proposed extension pass through Fernando Rein and Del Pan Streets. Because of the protests of residents of the latter, the Commission on Human Settlements recommended the reversion to the original plan, but the Ministry argued the new route withh save the government P2 million. The government filed expropriation proceedings against the owners of Fernando Rein and Del Pan streets, among whom was petitioner. HELD: The choice of Fernando Rein and Del Pan streets is arbitrayr and should not receive judicial aprpoval. The Human Settlements Commission concluded that the cost factor is so minimal that it can be disregarded in making a choice between the two lines. The factor of functionality strongly militates against the choice of Fernando Rein and Del Pan streets, while the factor of social and economic impact bears grievously on the residents of Cuneta Avenue. While the issue would seem to boil down to a choice between people, on one hand, and progress and development, on the other, it is to be remembered that progress and development are carried out for the benefit of the people.

Case: Republic vs. De Knecht, G.R. 87351, February 12, 1990

Republic v. De Knecht, 182 SCRA 142 (1990) F: De Knecht was one of the owners of several properties along the Fernando Rein-Del Pan streets which the Government sought to expropriate to give way to the extension of EDSA and the construction of drainage facilities. De Knecht filed a case to restrain the Government from proceeding with the expropriation. Her prayer was denied by the lower court but upon certiorari, the SC reversed the lower court decision and granted the relief asked for by De Knecht ruling that the expropriation was arbitrary. The case was remanded to the lower court. No further action was taken despite the SC decision until two years later, in 1983, when the Government moved for the dismissal of the case on the ground that the Legislature has since enacted BP 340 expropriating the same properties for the same purpose. The lower court denied tthe motion. Appeal. RULING: While it is true that said final judgment of this Curt on the subject becomes the law of the case between the parties, it is equally true that the right of petitioner to take private properties for public use upon payment of just compensation is so provided in the Constitution and the laws.

Such expropriation proceeding may be undertaken by the petitioner not only by voluntary negotiation with the land owners but also by taking appropriate court action or by legislation. When BP 340 was passed, it appears that it was based on supervening events

that occured after the 1980 decision of the SC on the De Knecht case was rendered. The social impact factor which persuaded the Court to consider this extension to be arbitrary had disappeared. Moreover, the said decision is no obstacle to the legislative arm of the Government in thereafter making its own independent assessment of the circumstances then pravailing as to the propriety of undertaking the expropriation of properties in question and thereafter by enacting the corresponding legislation as it did in this case. The Court agrees in the wisdom and necessity of enacting BP 340. Thus the anterior decision of the Court must yield to the subsequent legislative fiat

Case: PPI vs. Comelec, 244 SCRA 272 (1995) Phil. Press Institute, Inc. v. Comelec 244 SCRA 272 Facts: Petition for Certiorari and Prohibition with prayer for the issuance of a Temporary Restraining Order. PPI, a non-stock, non-profit organization of newspaper and magazine publishers, asks us to declare Comelec Resolution No. 2772 unconstitutional and void on the ground that it violates the prohibition imposed by the Constitution upon the government, and any of its agencies, against the taking of private property for public use without just compensation. Petitioner also contends that the 22 March 1995 letter directives of Comelec requiring publishers to give free Comelec Space and at the same time process raw data to make it camera-ready, constitute impositions of involuntary servitude, contrary to the provisions of Section 18 (2), Article III of the 1987 Constitution. Finally, PPI argues that Section 8 of Comelec Resolution No. 2772 is violative of the constitutionally guaranteed freedom of speech, of the press and of expression. On the other hand, The Office of the Solicitor General filed its Comment on behalf of respondent Comelec alleging that Comelec Resolution No. 2772 does not impose upon the publishers any obligation to provide free print space in the newspapers as it does not provide any criminal or administrative sanction for non-compliance with that Resolution. According to the Solicitor General, the questioned Resolution merely established guidelines to be followed in connection with the procurement of Comelec space, the procedure for and mode of allocation of such space to candidates and the conditions or requirements for the candidates utilization of the Comelec space procured. At the same time, however, the Solicitor General argues that even if the questioned Resolution and its implementing letter directives are viewed as mandatory, the same would nevertheless be valid as an exercise of the police power of the State. The Solicitor General also maintains that Section 8 of Resolution No. 2772 is a permissible exercise of the power of supervision or regulation of the Comelec over the communication and information operations of print media enterprises during the election period to safeguard and ensure a fair, impartial and credible election. Issue: Whether or not Resolution No. 2772 issued by respondent Commission on Elections is valid. Held: Petition for Certiorari and Prohibition is GRANTED in part and Section 2 of Resolution No. 2772 in its present form and the related letter-directives dated 22 March 1995 are hereby SET ASIDE as null and void, and the Temporary Restraining Order is hereby MADE PERMANENT. The Petition is DISMISSED in part, to the extent it relates to Section 8 of Resolution No. 2772. No pronouncement as to costs. Section 2 of Resolution No. 2772, in its present form and as interpreted by Comelec in its 22 March

1995 letter directives, purports to require print media enterprises to donate free print space to Comelec. As such, Section 2 suffers from a fatal constitutional vice and must be set aside and nullified. To the extent it pertains to Section 8 of Resolution No. 2772, the Petition for Certiorari and Prohibition must be dismissed for lack of an actual, justiciable case or controversy. Case: NHA v. Heirs of Isidro Guivelondo, G.R. No. 154411. June 19, 2003 [G.R. No. 154411. June 19, 2003]

NATIONAL HOUSING AUTHORITY, petitioner, vs. HEIRS OF ISIDRO GUIVELONDO, COURT OF APPEALS, HON. ISAIAS DICDICAN, Presiding Judge, Regional Trial Court, Branch 11, Cebu City, and PASCUAL Y. ABORDO, Sheriff, Regional Trial Court, Branch 11, Cebu City, respondents. DECISION
YNARES-SANTIAGO, J.:

On February 23, 1999, petitioner National Housing Authority filed with the Regional Trial Court of Cebu City, Branch 11, an Amended Complaint for eminent domain against Associacion Benevola de Cebu, Engracia Urot and the Heirs of Isidro Guivelondo, docketed as Civil Case No. CEB-23386. Petitioner alleged that defendant Associacion Benevola de Cebu was the claimant/owner of Lot 108-C located in the Banilad Estate, Cebu City; that defendant Engracia Urot was the claimant/owner of Lots Nos. 108-F, 108-I, 108-G, 6019-A and 6013-A, all of the Banilad Estate; that defendant Heirs of Isidro Guivelondo were the claimants/owners of Cadastral Lot No. 1613-D located at Carreta, Mabolo, Cebu City; and that the lands are within a blighted urban center which petitioner intends to develop as a socialized housing project.
[1]

On November 12, 1999, the Heirs of Isidro Guivelondo, respondents herein, filed a Manifestation stating that they were waiving their objections to petitioners power to expropriate their properties. Hence, the trial court issued an Order as follows:
WHEREFORE, the Court hereby declares that the plaintiff has a lawful right to expropriate the properties of the defendants who are heirs of Isidro Guivelondo. The appointment of commissioners who would ascertain and report to the Court the just compensation for said properties will be done as soon as the parties shall have submitted to the Court the names of persons desired by them to be appointed as such commissioners. SO ORDERED.[2]

Thereafter, the trial court appointed three Commissioners to ascertain the correct and just compensation of the properties of respondents. On April 17, 2000, the Commissioners submitted their report wherein they recommended that the just compensation of the subject properties be fixed at P11,200.00 per square meter. On August 7, 2000, the trial court rendered Partial Judgment adopting the recommendation of the Commissioners and fixing the just compensation of the lands of respondent Heirs of Isidro Guivelondo at P11,200.00 per square meter, to wit:
[3]

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by the Court in this case fixing the just compensation for the lands of the defendants who are the heirs of Isidro

Guivelondo, more particularly Lots Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 19, 20, 6016F, 6016-H, 6016-E and 6016-D of Csd-10219, which were sought to be expropriated by the plaintiff at P11,200.00 per square meter and ordering the plaintiff to pay to the said defendants the just compensation for the said lands computed at P11,200.00 per square meter. IT IS SO ORDERED.[4]

Petitioner NHA filed two motions for reconsideration dated August 30, 2000 and August 31, 2000, assailing the inclusion of Lots 12, 13 and 19 as well as the amount of just compensation, respectively. Respondent Heirs also filed a motion for reconsideration of the Partial Judgment. On October 11, 2000, the trial court issued an Omnibus Order denying the motion for reconsideration of respondent Heirs and the August 31, 2000 motion of petitioner, on the ground that the fixing of the just compensation had adequate basis and support. On the other hand, the trial court granted petitioners August 30, 2000 motion for reconsideration on the ground that the Commissioners Report did not include Lots 12, 13 and 19 within its coverage. Thus:
WHEREFORE, in view of the foregoing premises, the Court hereby denies the motion of the heirs of Isidro Guivelondo (with the exception of Carlota Mercado and Juanita Suemith) for reconsideration of the partial judgment rendered in this case on August 7, 2000 and plaintiffs motion for reconsideration of said judgment, dated August 31, 2000. However, the Court hereby grants the plaintiffs motion for reconsideration of said judgment, dated August 30, 2000. Accordingly, the judgment rendered in this case on August 7, 2000 is hereby set aside insofar as it has fixed just compensations for Lots Nos. 12, 13 and 19 of Csd10219 because the fixing of said just compensations appears to lack adequate basis. SO ORDERED.[5]

Petitioner filed with the Court of Appeals a petition for certiorari, which was docketed as CAG.R. SP No. 61746. Meanwhile, on October 31, 2000, the trial court issued an Entry of Judgment over the Partial Judgment dated August 7, 2000 as modified by the Omnibus Order dated October 11, 2000. Subsequently, respondent Heirs filed a Motion for Execution, which was granted on November 22, 2000.
[6] [7]

On January 31, 2001, the Court of Appeals dismissed the petition for certiorari on the ground that the Partial Judgment and Omnibus Order became final and executory when petitioner failed to appeal the same.
[8]

Petitioners Motion for Reconsideration and Urgent Ex-Parte Motion for a Clarificatory Ruling were denied in a Resolution dated March 18, 2001. A petition for review was filed by petitioner with this Court, which was docketed as G.R. No. 147527. However, the same was denied in a Minute Resolution dated May 9, 2001 for failure to show that the Court of Appeals committed a reversible error.
[9] [10]

Petitioner filed a Motion for Reconsideration which was however denied with finality on August 20, 2001.
[11]

Prior to the aforesaid denial of the Motion for Reconsideration, petitioner, on July 16, 2001, filed with the trial court a Motion to Dismiss Civil Case No. CEB-23386, complaint for eminent domain, alleging that the implementation of its socialized housing project was rendered impossible by the unconscionable value of the land sought to be expropriated, which the intended beneficiaries can not afford. The Motion was denied on September 17, 2001, on the ground that the Partial Judgment had already become final and executory and there was no just and equitable reason to
[12]

warrant the dismissal of the case. Petitioner filed a Motion for Reconsideration, which was denied in an Order dated November 20, 2001.
[13] [14]

Petitioner thus filed a petition for certiorari with the Court of Appeals, which was docketed as CA-G.R. SP No. 68670, praying for the annulment of the Order of the trial court denying its Motion to Dismiss and its Motion for Reconsideration.
[15]

On February 5, 2002, the Court of Appeals summarily dismissed the petition. Immediately thereafter, respondent Sheriff Pascual Y. Abordo of the Regional Trial Court of Cebu City, Branch 11, served on petitioner a Notice of Levy pursuant to the Writ of Execution issued by the trial court to enforce the Partial Judgment of August 7, 2000 and the Omnibus Order of October 11, 2000.
[16]

On February 18, 2002, the Court of Appeals set aside the dismissal of the petition and reinstated the same. Thereafter, a temporary restraining order was issued enjoining respondent sheriff to preserve the status quo.
[17] [18]

On May 27, 2002, respondent sheriff served on the Landbank of the Philippines a Notice of Third Garnishment against the deposits, moneys and interests of petitioner therein. Subsequently, respondent sheriff levied on funds and personal properties of petitioner.
[19] [20]

On July 16, 2002, the Court of Appeals rendered the assailed decision dismissing the petition for certiorari.
[21]

Hence, petitioner filed this petition for review, raising the following issues:
1) WHETHER OR NOT THE STATE CAN BE COMPELLED AND COERCED BY THE COURTS TO EXERCISE OR CONTINUE WITH THE EXERCISE OF ITS INHERENT POWER OF EMINENT DOMAIN; WHETHER OR NOT JUDGMENT HAS BECOME FINAL AND EXECUTORY AND IF ESTOPPEL OR LACHES APPLIES TO GOVERNMENT; WHETHER OR NOT WRITS OF EXECUTION AND GARNISHMENT MAY BE ISSUED AGAINST THE STATE IN AN EXPROPRIATION WHEREIN THE EXERCISE OF THE POWER OF EMINENT DOMAIN WILL NOT SERVE PUBLIC USE OR PURPOSE {APPLICATION OF SUPREME COURT ADMINISTRATIVE CIRCULAR NO. 10-2000}.[22]

2)

3)

Respondent Heirs of Isidro Guivelondo filed their Comment, arguing as follows:

I AS EARLIER UPHELD BY THE HONORABLE COURT, THE JUDGMENT OF THE TRIAL COURT IS ALREADY FINAL AND EXECUTORY, HENCE, COULD NO LONGER BE DISTURBED NOR SET ASIDE II THE FUNDS AND ASSETS OF THE PETITIONER ARE NOT EXEMPT FROM LEVY AND GARNISHMENT III

THE ISSUES RAISED IN THIS SECOND PETITION FOR REVIEW WERE ALREADY RESOLVED BY THE HONORABLE COURT[23]

In the early case of City of Manila v. Ruymann, the Court was confronted with the question: May the petitioner, in an action for expropriation, after he has been placed in possession of the property and before the termination of the action, dismiss the petition? It resolved the issue in the affirmative and held:
[24]

The right of the plaintiff to dismiss an action with the consent of the court is universally recognized with certain well-defined exceptions. If the plaintiff discovers that the action which he commenced was brought for the purpose of enforcing a right or a benefit, the advisability or necessity of which he later discovers no longer exists, or that the result of the action would be different from what he had intended, then he should be permitted to withdraw his action, subject to the approval of the court. The plaintiff should not be required to continue the action, subject to some well-defined exceptions, when it is not to his advantage to do so. Litigation should be discouraged and not encouraged. Courts should not require parties to litigate when they no longer desire to do so. Courts, in granting permission to dismiss an action, of course, should always take into consideration the effect which said dismissal would have upon the rights of the defendant.[25]

Subsequently, in Metropolitan Water District v. De Los Angeles, the Court had occasion to apply the above-quoted ruling when the petitioner, during the pendency of the expropriation case, resolved that the land sought to be condemned was no longer necessary in the maintenance and operation of its system of waterworks. It was held:
[26]

It is not denied that the purpose of the plaintiff was to acquire the land in question for a public use. The fundamental basis then of all actions brought for the expropriation of lands, under the power of eminent domain, is public use. That being true, the very moment that it appears at any stage of the proceedings that the expropriation is not for a public use, the action must necessarily fail and should be dismissed, for the reason that the action cannot be maintained at all except when the expropriation is for some public use. That must be true even during the pendency of the appeal of at any other stage of the proceedings. If, for example, during the trial in the lower court, it should be made to appear to the satisfaction of the court that the expropriation is not for some public use, it would be the duty and the obligation of the trial court to dismiss the action. And even during the pendency of the appeal, if it should be made to appear to the satisfaction of the appellate court that the expropriation is not for public use, then it would become the duty and the obligation of the appellate court to dismiss it.[27]

Notably, the foregoing cases refer to the dismissal of an action for eminent domain at the instance of the plaintiff during the pendency of the case. The rule is different where the case had been decided and the judgment had already become final and executory. Expropriation proceedings consists of two stages: first, condemnation of the property after it is determined that its acquisition will be for a public purpose or public use and, second, the determination of just compensation to be paid for the taking of private property to be made by the court with the assistance of not more than three commissioners. Thus:
[28]

There are two (2) stages in every action for expropriation. The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint. An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter, as the Rules expressly state, in

the proceedings before the Trial Court, no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard. The second phase of the eminent domain action is concerned with the determination by the Court of the just compensation for the property sought to be taken. This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. Obviously, one or another of the parties may believe the order to be erroneous in its appreciation of the evidence or findings of fact or otherwise. Obviously, too, such a dissatisfied party may seek a reversal of the order by taking an appeal therefrom.[29]

The outcome of the first phase of expropriation proceedings, which is either an order of expropriation or an order of dismissal, is final since it finally disposes of the case. On the other hand, the second phase ends with an order fixing the amount of just compensation. Both orders, being final, are appealable. An order of condemnation or dismissal is final, resolving the question of whether or not the plaintiff has properly and legally exercised its power of eminent domain. Once the first order becomes final and no appeal thereto is taken, the authority to expropriate and its public use can no longer be questioned.
[30] [31] [32]

The above rule is based on Rule 67, Section 4 of the 1997 Rules of Civil Procedure, which provides:
Order of expropriation. If the objections to and the defenses against the right of the plaintiff to expropriate the property are overruled, 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. A final order sustaining the right to expropriate the property may be appealed by any party aggrieved thereby. Such appeal, however, shall not prevent the court from determining the just compensation to be paid. After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as the court deems just and equitable. (underscoring ours)

In the case at bar, petitioner did not appeal the Order of the trial court dated December 10, 1999, which declared that it has a lawful right to expropriate the properties of respondent Heirs of Isidro Guivelondo. Hence, the Order became final and may no longer be subject to review or reversal in any court. A final and executory decision or order can no longer be disturbed or reopened no matter how erroneous it may be. Although judicial determinations are not infallible, judicial error should be corrected through appeals, not through repeated suits on the same claim.
[33] [34]

Petitioner anchors its arguments on the last paragraph of the above-quoted Rule 67, Section 4. In essence, it contends that there are just and equitable grounds to allow dismissal or discontinuance of the expropriation proceedings. More specifically, petitioner alleges that the intended public use was rendered nugatory by the unreasonable just compensation fixed by the court, which is beyond the means of the intended beneficiaries of the socialized housing project. The argument is tenuous. Socialized housing has been recognized as public use for purposes of exercising the power of eminent domain.

Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum, the general welfare. The public character of housing measures does not change because units in housing projects cannot be occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be made, for it is not possible to provide housing for all who need it, all at once.

xxx

xxx xxx.

In the light of the foregoing, this Court is satisfied that socialized housing falls with the confines of public use. xxx xxx xxx. Provisions on economic opportunities inextricably linked with low-cost housing, or slum clearance, relocation and resettlement, or slum improvement emphasize the public purpose of the project.[35]

The public purpose of the socialized housing project is not in any way diminished by the amount of just compensation that the court has fixed. The need to provide decent housing to the urban poor dwellers in the locality was not lost by the mere fact that the land cost more than petitioner had expected. It is worthy to note that petitioner pursued its petition for certiorari with the Court of Appeals assailing the amount of just compensation and its petition for review with this Court which eloquently indicates that there still exists a public use for the housing project. It was only after its appeal and petitions for review were dismissed that petitioner made a complete turnaround and decided it did not want the property anymore. Respondent landowners had already been prejudiced by the expropriation case. Petitioner cannot be permitted to institute condemnation proceedings against respondents only to abandon it later when it finds the amount of just compensation unacceptable. Indeed, our reprobation in the case of Cosculluela v. Court of Appeals is apropos:
[36]

It is arbitrary and capricious for a government agency to initiate expropriation proceedings, seize a persons property, allow the judgment of the court to become final and executory and then refuse to pay on the ground that there are no appropriations for the property earlier taken and profitably used. We condemn in the strongest possible terms the cavalier attitude of government officials who adopt such a despotic and irresponsible stance.

In order to resolve the issue of the propriety of the garnishment against petitioners funds and personal properties, there is a need to first determine its true character as a government entity. Generally, funds and properties of the government cannot be the object of garnishment proceedings even if the consent to be sued had been previously granted and the state liability adjudged.
[37]

The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimants action only up to the completion of proceedings anterior to the stage of execution and that the power of the Courts ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law.[38]

However, if the funds belong to a public corporation or a government-owned or controlled corporation which is clothed with a personality of its own, separate and distinct from that of the government, then its funds are not exempt from garnishment. This is so because when the government enters into commercial business, it abandons its sovereign capacity and is to be treated like any other corporation.
[39] [40]

In the case of petitioner NHA, the matter of whether its funds and properties are exempt from garnishment has already been resolved squarely against its predecessor, the Peoples Homesite and Housing Corporation (PHHC), to wit:
The plea for setting aside the notice of garnishment was premised on the funds of the Peoples Homesite and Housing Corporation deposited with petitioner being public in character. There was not even a categorical assertion to that effect. It is only the possibility of its being public in character. The tone was thus irresolute, the approach diffident. The premise that the funds cold be spoken of as public in character may be accepted in the sense that the Peoples Homesite and Housing Corporation was a government-owned entity. It does not follow though that they were exempt from garnishment.[41]

This was reiterated in the subsequent case of Philippine Rock Industries, Inc. v. Board of Liquidators:
[42]

Having a juridical personality separate and distinct from the government, the funds of such government-owned and controlled corporations and non-corporate agency, although considered public in character, are not exempt from garnishment. This doctrine was applied to suits filed against the Philippine Virginia Tobacco Administration (PNB vs. Pabalan, et al., 83 SCRA 695); the National Shipyard & Steel Corporation (NASSCO vs. CIR, 118 Phil. 782); the Manila Hotel Company (Manila Hotel Employees Asso. vs. Manila Hotel Co., 73 Phil. 374); and the People's Homesite and Housing Corporation (PNB vs. CIR, 81 SCRA 314). [emphasis ours]

Hence, it is clear that the funds of petitioner NHA are not exempt from garnishment or execution. Petitioners prayer for injunctive relief to restrain respondent Sheriff Pascual Abordo from enforcing the Notice of Levy and Garnishment against its funds and properties must, therefore, be denied. WHEREFORE, in view of the foregoing, the instant petition for review is DENIED. The decision of the Court of Appeals in CA-G.R. SP No. 68670, affirming the trial courts Order denying petitioners Motion to Dismiss the expropriation proceedings in Civil Case No. CEB23386, is AFFIRMED. Petitioners prayer for injunctive relief against the levy and garnishment of its funds and personal properties is DENIED. The Temporary Restraining Order dated January 22, 2003 is LIFTED.

Case: Eslaban v. De Onorio, G.R. No.146062, June 28, 2001

[G.R. No. 146062. June 28, 2001]

SANTIAGO ESLABAN, JR., in his capacity as Project Manager of the National Irrigation Administration, petitioner, vs. CLARITA VDA. DE ONORIO, respondent. DECISION
MENDOZA, J.:

This is a petition for review of the decision[1] of the Court of Appeals which affirmed the decision of the Regional Trial Court, Branch 26, Surallah, South Cotabato, ordering the National Irrigation Administration (NIA for brevity) to pay respondent the amount of P107,517.60 as just compensation for the taking of the latters property.

The facts are as follows: Respondent Clarita Vda. de Enorio is the owner of a lot in Barangay M. Roxas, Sto. Nio, South Cotabato with an area of 39,512 square meters. The lot, known as Lot 1210-A-Pad-11000586, is covered by TCT No. T-22121 of the Registry of Deeds, South Cotabato. On October 6, 1981, Santiago Eslaban, Jr., Project Manager of the NIA, approved the construction of the main irrigation canal of the NIA on the said lot, affecting a 24,660 square meter portion thereof. Respondents husband agreed to the construction of the NIA canal provided that they be paid by the government for the area taken after the processing of documents by the Commission on Audit. Sometime in 1983, a Right-of-Way agreement was executed between respondent and the NIA (Exh. 1). The NIA then paid respondent the amount of P4,180.00 as Right-of-Way damages. Respondent subsequently executed an Affidavit of Waiver of Rights and Fees whereby she waived any compensation for damages to crops and improvements which she suffered as a result of the construction of a right-of-way on her property (Exh. 2). The same year, petitioner offered respondent the sum of P35,000.00 by way of amicable settlement pursuant to Executive Order No. 1035, 18, which provides in part that
Financial assistance may also be given to owners of lands acquired under C.A. 141, as amended, for the area or portion subject to the reservation under Section 12 thereof in such amounts as may be determined by the implementing agency/instrumentality concerned in consultation with the Commission on Audit and the assessors office concerned.

Respondent demanded payment for the taking of her property, but petitioner refused to pay. Accordingly, respondent filed on December 10, 1990 a complaint against petitioner before the Regional Trial Court, praying that petitioner be ordered to pay the sum of P111,299.55 as compensation for the portion of her property used in the construction of the canal constructed by the NIA, litigation expenses, and the costs. Petitioner, through the Office of the Solicitor-General, filed an Answer, in which he admitted that NIA constructed an irrigation canal over the property of the plaintiff and that NIA paid a certain landowner whose property had been taken for irrigation purposes, but petitioner interposed the defense that: (1) the government had not consented to be sued; (2) the total area used by the NIA for its irrigation canal was only 2.27 hectares, not 24,600 square meters; and (3) respondent was not entitled to compensation for the taking of her property considering that she secured title over the property by virtue of a homestead patent under C.A. No. 141. At the pre-trial conference, the following facts were stipulated upon: (1) that the area taken was 24,660 square meters; (2) that it was a portion of the land covered by TCT No. T-22121 in the name of respondent and her late husband (Exh. A); and (3) that this area had been taken by the NIA for the construction of an irrigation canal.[2] On October 18, 1993, the trial court rendered a decision, the dispositive portion of which reads:
In view of the foregoing, decision is hereby rendered in favor of plaintiff and against the defendant ordering the defendant, National Irrigation Administration, to pay to plaintiff the sum of One Hundred Seven Thousand Five Hundred Seventeen Pesos and Sixty Centavos (P107,517.60) as just compensation for the questioned area of 24,660 square meters of land owned by plaintiff and taken by said defendant NIA which used it for its main canal plus costs.[3]

On November 15, 1993, petitioner appealed to the Court of Appeals which, on October 31, 2000, affirmed the decision of the Regional Trial Court. Hence this petition.

The issues in this case are:

1. WHETHER OR NOT THE PETITION IS DISMISSIBLE FOR FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 5, RULE 7 OF THE REVISED RULES OF CIVIL PROCEDURE. 2. WHETHER OR NOT LAND GRANTED BY VIRTUE OF A HOMESTEAD PATENT AND SUBSEQUENTLY REGISTERED UNDER PRESIDENTIAL DECREE 1529 CEASES TO BE PART OF THE PUBLIC DOMAIN. 3. WHETHER OR NOT THE VALUE OF JUST COMPENSATION SHALL BE DETERMINED FROM THE TIME OF THE TAKING OR FROM THE TIME OF THE FINALITY OF THE DECISION. 4. WHETHER THE AFFIDAVIT OF WAIVER OF RIGHTS AND FEES EXECUTED BY RESPONDENT EXEMPTS PETITIONER FROM MAKING PAYMENT TO THE FORMER.

We shall deal with these issues in the order they are stated. First. Rule 7, 5 of the 1997 Revised Rules on Civil Procedure provides
Certification against forum shopping. The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report the fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing . . . .

By reason of Rule 45, 4 of the 1997 Revised Rules on Civil Procedure, in relation to Rule 42, 2 thereof, the requirement of a certificate of non-forum shopping applies to the filing of petitions for review on certiorari of the decisions of the Court of Appeals, such as the one filed by petitioner. As provided in Rule 45, 5, The failure of the petitioner to comply with any of the foregoing requirements regarding . . . the contents of the document which should accompany the petition shall be sufficient ground for the dismissal thereof. The requirement in Rule 7, 5 that the certification should be executed by the plaintiff or the principal means that counsel cannot sign the certificate against forum-shopping. The reason for this is that the plaintiff or principal knows better than anyone else whether a petition has previously been filed involving the same case or substantially the same issues. Hence, a certification signed by counsel alone is defective and constitutes a valid cause for dismissal of the petition.[4] In this case, the petition for review was filed by Santiago Eslaban, Jr., in his capacity as Project Manager of the NIA. However, the verification and certification against forum-shopping were signed by Cesar E. Gonzales, the administrator of the agency. The real party-in-interest is the NIA, which is a body corporate. Without being duly authorized by resolution of the board of the corporation, neither Santiago Eslaban, Jr. nor Cesar E. Gonzales could sign the certificate against

forum-shopping accompanying the petition for review. Hence, on this ground alone, the petition should be dismissed. Second. Coming to the merits of the case, the land under litigation, as already stated, is covered by a transfer certificate of title registered in the Registry Office of Koronadal, South Cotabato on May 13, 1976. This land was originally covered by Original Certificate of Title No. (P-25592) P9800 which was issued pursuant to a homestead patent granted on February 18, 1960. We have held:
Whenever public lands are alienated, granted or conveyed to applicants thereof, and the deed grant or instrument of conveyance [sales patent] registered with the Register of Deeds and the corresponding certificate and owners duplicate of title issued, such lands are deemed registered lands under the Torrens System and the certificate of title thus issued is as conclusive and indefeasible as any other certificate of title issued to private lands in ordinary or cadastral registration proceedings.[5]

The Solicitor-General contends, however, that an encumbrance is imposed on the land in question in view of 39 of the Land Registration Act (now P.D. No. 1529, 44) which provides:
Every person receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land who takes a certificate of title for value in good faith shall hold the same free from all encumbrances except those noted on said certificate, and any of the following encumbrances which may be subsisting, namely: ....

Third. Any public highway, way, private way established by law, or any government irrigation canal or lateral thereof, where the certificate of title does not state that the boundaries of such highway, way, irrigation canal or lateral thereof, have been determined. As this provision says, however, the only servitude which a private property owner is required to recognize in favor of the government is the easement of a public highway, way, private way established by law, or any government canal or lateral thereof where the certificate of title does not state that the boundaries thereof have been pre-determined. This implies that the same should have been pre-existing at the time of the registration of the land in order that the registered owner may be compelled to respect it. Conversely, where the easement is not pre-existing and is sought to be imposed only after the land has been registered under the Land Registration Act, proper expropriation proceedings should be had, and just compensation paid to the registered owner thereof.[6] In this case, the irrigation canal constructed by the NIA on the contested property was built only on October 6, 1981, several years after the property had been registered on May 13, 1976. Accordingly, prior expropriation proceedings should have been filed and just compensation paid to the owner thereof before it could be taken for public use. Indeed, the rule is that where private property is needed for conversion to some public use, the first thing obviously that the government should do is to offer to buy it.[7] If the owner is willing to sell and the parties can agree on the price and the other conditions of the sale, a voluntary transaction can then be concluded and the transfer effected without the necessity of a judicial action. Otherwise, the government will use its power of eminent domain, subject to the payment of just compensation, to acquire private property in order to devote it to public use. Third. With respect to the compensation which the owner of the condemned property is entitled to receive, it is likewise settled that it is the market value which should be paid or that sum

of money which a person, desirous but not compelled to buy, and an owner, willing but not compelled to sell, would agree on as a price to be given and received therefor.[8] Further, just compensation means not only the correct amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered just for then the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss.[9] Nevertheless, as noted in Ansaldo v. Tantuico, Jr.,[10] there are instances where the expropriating agency takes over the property prior to the expropriation suit, in which case just compensation shall be determined as of the time of taking, not as of the time of filing of the action of eminent domain. Before its amendment in 1997, Rule 67, 4 provided:
Order of condemnation. When such a motion is overruled or when any party fails to defend as required by this rule, the court may enter an order of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint upon the payment of just compensation to be determined as of the date of the filing of the complaint. . . .

It is now provided thatSEC. 4. Order of expropriation. If the objections to and the defense against the right of the plaintiff to expropriate the property are overruled, 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. A final order sustaining the right to expropriate the property may be appealed by any party aggrieved thereby. Such appeal, however, shall not prevent the court from determining the just compensation to be paid. After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as the court deems just and equitable. (Emphasis added)

Thus, the value of the property must be determined either as of the date of the taking of the property or the filing of the complaint, whichever came first. Even before the new rule, however, it was already held in Commissioner of Public Highways v. Burgos[11] that the price of the land at the time of taking, not its value after the passage of time, represents the true value to be paid as just compensation. It was, therefore, error for the Court of Appeals to rule that the just compensation to be paid to respondent should be determined as of the filing of the complaint in 1990, and not the time of its taking by the NIA in 1981, because petitioner was allegedly remiss in its obligation to pay respondent, and it was respondent who filed the complaint. In the case of Burgos,[12] it was also the property owner who brought the action for compensation against the government after 25 years since the taking of his property for the construction of a road. Indeed, the value of the land may be affected by many factors. It may be enhanced on account of its taking for public use, just as it may depreciate. As observed in Republic v. Lara:[13]
[W]here property is taken ahead of the filing of the condemnation proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the entry by the plaintiff upon the property may have depreciated its value thereby; or there may have been a natural increase in the value of the property from the time it is taken to the time the complaint is filed, due to general economic conditions. The owner of private property should be compensated only for what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at the time it is

taken. This is the only way that compensation to be paid can be truly just, i.e., just not only to the individual whose property is taken, but to the public, which is to pay for it . . . .

In this case, the proper valuation for the property in question is P16,047.61 per hectare, the price level for 1982, based on the appraisal report submitted by the commission (composed of the provincial treasurer, assessor, and auditor of South Cotabato) constituted by the trial court to make an assessment of the expropriated land and fix the price thereof on a per hectare basis.[14] Fourth. Petitioner finally contends that it is exempt from paying any amount to respondent because the latter executed an Affidavit of Waiver of Rights and Fees of any compensation due in favor of the Municipal Treasurer of Barangay Sto. Nio, South Cotabato. However, as the Court of Appeals correctly held:
[I]f NIA intended to bind the appellee to said affidavit, it would not even have bothered to give her any amount for damages caused on the improvements/crops within the appellees property. This, apparently was not the case, as can be gleaned from the disbursement voucher in the amount of P4,180.00 (page 10 of the Folder of Exhibits in Civil Case 396) issued on September 17, 1983 in favor of the appellee, and the letter from the Office of the Solicitor General recommending the giving of financial assistance in the amount of P35,000.00 to the appellee. Thus, We are inclined to give more credence to the appellees explanation that the waiver of rights and fees pertains only to improvements and crops and not to the value of the land utilized by NIA for its main canal.[15]

WHEREFORE, premises considered, the assailed decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION to the extent that the just compensation for the contested property be paid to respondent in the amount of P16,047.61 per hectare, with interest at the legal rate of six percent (6%) per annum from the time of taking until full payment is made. Costs against petitioner.

Case: RP vs. IAC, et al., G.R. No. 71176, May 21, 1990
Republic SUPREME Manila of the Philippines COURT

THIRD DIVISION G.R. No. 71176 May 21, 1990 REPUBLIC OF THE PHILIPPINES (Ministry of Education and Culture), petitioner, vs. INTERMEDIATE APPELLATE COURT and AMEREX ELECTRONICS, PHILS. CORPORATION, respondents. Siguion Reyna, Montecillo and Ongsiako for private respondents. FERNAN, C.J.: The government, in the exercise of its power of eminent domain, expropriated property owned by Amerex Electronics, Phils. Corporation. The amount of just compensation for such property is now the subject of this petition for review on certiorari.

The property involved consists of four (4) parcels of land with a total area of 9,650 square meters located at No. 2090 Dr. Manuel L. Carreon Street, Manila, a short walking distance from Herran (now Pedro Gil) Street. Its previous owner, Avegon Inc., offered it for sale to the City School Board of Manila on July 21, 1973 at P2,300,000. The school board was willing to buy at P1,800,000 but the then Mayor of Manila intervened and volunteered to negotiate with Avegon Inc. for a better price. Inasmuch as the alleged negotiation did not materialize, on June 3, 1974, Avegon Inc. sold the property and its improvements to Amerex Electronics, Phils. Corporation (Amerex for brevity) for P1,800,000. Thereafter, Transfer Certificates of Title Nos. 115571, 115572, 115573 and 115574 were issued in favor of Amerex. On August 29, 1975, the Solicitor General filed for the Department of Education and Culture (DEC) a complaint against Amerex for the expropriation of said property before the Court of First Instance of Manila (Civil Case No. 99190). The complaint stated that the property was needed by the government as a permanent site for the Manuel de la Fuente High School (later renamed Don Mariano Marcos Memorial High School); that the fair market value of the property had been declared by Amerex as P2,435,000, and that the assessor had determined its market value as P2,432,042 and assessed it for taxation purposes in the amount of P1,303,470. 1 In a motion praying that the plaintiff be authorized to take immediate possession of the property, the then Acting Solicitor General Hugo E. Gutierrez, Jr., invoking Presidential Decree No. 42, informed the court that said assessed value of the property for taxation purposes had been deposited with the Philippine National Bank (PNB) in Escolta, Manila on September 30, 1975. Consequently, on October 9, 1975, the court issued an order directing the sheriff to place the plaintiff in possession of the property. The plaintiff took actual possession thereof on October 13, 1975. Amerex filed a motion to dismiss the complaint stating that while it was not contesting the merits of the complaint, the same failed to categorically state the amount of just compensation for the property. It therefore prayed that in consonance with P.D. No. 794, the just compensation be fixed at P2,432,042, the market value of the property determined by the assessor which was lower than Amerex's own declaration. The motion to dismiss was opposed by the plaintiff reasoning that while indeed the market value as determined by the assessor was lower than that declared by Amerex, the plaintiff intended to present evidence of a much lower market value. Alleging that its motion to dismiss merely sought a clarification on the just compensation for the property, Amerex filed a motion to withdraw the plaintiffs deposit of P1,303,470 with the PNB without prejudice to its entitlement to the amount of P1,128,572, the balance of the just compensation of P2,432,042 insisted upon. The plaintiff interposed no objection to the motion provided that an order of condemnation be issued by the court and that the plaintiff be allowed to present its evidence on the matter of just compensation. On December 3, 1975, the lower court issued an order vesting the plaintiff with the lawful light to take the property upon payment of just compensation as provided by law. On December 19, 1975, after the parties had submitted the names of their respective recommendees to the appraisal committee, the lower court appointed Atty. Narciso Pea, Aurelio V. Aquino and Atty. Higinio Sunico as commissioners. Thereafter, the lower court ordered Amerex to submit an audited financial statement on the acquisition cost of the property including expenses for its improvement. Amerex was also allowed by the court, after it had filed a second motion therefor, to withdraw the P1,303,470 deposit with the

PNB. On March 12, 1976, the plaintiff filed a motion for leave of court to amend its complaint stating that after it had filed the same, P.D. No. 464 2 was amended by P.D. No. 794; that Section 92 of said Code, as amended, provided that when private property is acquired for public use, its just compensation "shall not exceed the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor, whichever is lower"; and that the amended complaint would state that the fair market value of the property could not be in excess of P1,800,000, the amount for which defendant's predecessor-in-interest had offered to sell said properties to the Division of Public Schools of Manila and which amount was also the purchase price paid by Amerex to Avegon Inc. In due course, plaintiff filed an amended complaint. Amerex, however, opposed the motion for leave to amend the complaint contending that the plaintiff was insisting on a valuation given by neither the owner nor the assessor as mandated by P.D. No. 794 but by another person in August 1973 when the peso value was much higher. The lower court denied the motion to amend the complaint; but after the plaintiff had filed a motion for reconsideration, the lower court admitted the amended complaint on April 27, 1976. In the meantime, Amerex submitted to the court "audited financial statements' consisting of an account stating that the cost of its land and buildings was P2,107,479.48, and another account stating that it incurred total expenses of P150,539 for their maintenance. 3 These statements yielded the amount of P2,258,018.48 as the total value of the property. The commissioners conducted an ocular inspection and hearing on the value of the property. On October 18, 1976, the plaintiff filed a motion seeking the disqualification of Engineer Aurelio B. Aquino as commissioner on the ground that he could not be expected to be unbiased inasmuch as in the three appraisal reports submitted by Amerex, Aquino had indicated as fair market value of the property amounts much more than the plaintiffs fair market value determination of P1,800,000. Said appraisal reports were made by Ampil Realty and Appraisal Co., Inc. with Aquino signing thereon as real estate appraiser. One report, dated February 15, 1974 and submitted to Commonwealth Insurance Company indicated P2,100,000 as the fair market value of the property. 4 Two other reports were made at the behest of Amerex with one, dated November 15, 1974, fixing the fair market value at P2,300,000 5, and the other, dated June 5, 1975, with P2,400,000 as the fair market value. 6 Amerex opposed the motion to disqualify Aquino as commissioner, and the court, in its order of November 5, 1976, denied it. Hence, on January 24, 1977, the commissioners submitted their appraisal report finding that the fair market value of the property was P2,763,400. The commissioners, however added: Under the provision of Presidential Decree No. 464, as amended by Presidential Decree No. 794, abovequoted, we could have safely adopted the valuation of the City Assessor in the sum of P2,432,042.00, this being lower than that declared by the owner in the sum of P2,435,000.00, although by actual appraisal of the undersigned Commissioners the property could command a fair market value of P2,763,400.00 as of the date of our ocular inspection. Considering, however, that according to the audited statement submitted by defendant, the acquisition costs and other legal expenses incurred on the subject property by AMEREX, the grand total of P2,258,018.57, are (sic) lower than the findings of the undersigned Commissioners, the explanation being the fact that the price of the sale was a real bargain possibly due to dire necessities of the seller Avegon, it is respectfully submitted that the said sum of P2,258,018.57 be adopted

for purposes of determining just compensation payable to defendant AMEREX, which sum does not exceed, but is even lower than, the fair market value was determined by the City Assessor and as declared by said defendant. 7 Both parties objected to the report of the commissioners. The plaintiff contended that the commissioners' conclusion that the fair market value of the property was P2,763,400 was unsupported by evidence and that their recommended just compensation of P2,258,018.57 was excessive. It reiterated its stand that the just compensation should only be P1,800,000 it being the price had the sale between the city school board and Avegon Inc. materialized and also the actual price of the sale between Avegon Inc. and Amerex. On the other hand, Amerex averred that the recommended just compensation was unjustified in view of the commissioners' finding that the fair market value of the property was P2,763,400. On March 15, 1977, the lower court 8 rendered a decision based on the following findings: The court believes that the findings of the commissioners are supported by the evidence adduced during the hearings and that their recommendation is reasonable. The property was originaly owned by Avegon Inc. and was assessed at P1,079,370.00 by the City of Manila for the year 1974 (Exh. A-4). Avegon Inc. offered to sell it to the City School Board on July 21, 1973 at P2,300,000.00 but it accepted the counter-offer of P1,800,000. The negotiations, however, fell through when the city failed to act (Exhs. C, C-1, C-2, C-3 and C-4). The property was appraised on February 15, 1974 at P2,100,000.00 at the Instance of Commonwealth Insurance Company, an affiliate of Warner, Barnes & Co., Inc. (Exh. G). The defendant company introduced improvements on the property in the middle part of 1974 worth P260,690.50 (Exhs. 4, 4-A to 4-J; 11, 13, 14 to 19). After the renovation, the property was again appraised at the instance of the defendant at P2,300,000.00 on November 15, 1974 (Exh. 2). Due to the world-wide recession, there followed a slump in the demand for electronic products. On June 4, 1975, the Traders Commodities Corporation offered to buy the property at P2,750,000.00 with a deposit of P50,000.00 as earnest money. The offer was formally made by the law firm Salonga, Ordoez, Yap, Africano and Associates (Exch. 6). The offer was accepted on June 9, 1975 (Exhs. 7 and 8). The sale was not consummated, however, when the government notified the defendant in a conference held in Malacanang on June 15, 1975 that it wanted to buy the property for the use of the Manuel de la Fuente High School (Exh. 9). Because of the failure of the parties to agree on the price and other conditions of the purchase, the government filed this action on August 2, 1975. It is apparent that the commissioners were influenced by the fact that the city assessors fixed the market value of the property at P2,432,042.00 for the year 1975 pursuant to Presidential Decree No. 464 and that there was a perfected contract to buy it at P2,750,000.00. No evidence was presented nor even an allegation made, to show that the government valuation is fraudulent or erroneous. It must therefore be regular (Rule 131, sec. m) and in view of the reliance of the Presidential Decree upon it as a standard to be followed by the courts in arriving at the just compensation of the property when it is acquired by the government, it has great evidentiary weight. The offer to buy at P2,750,000.00 was made by one of the most reputable law firms in the country. It is not likely that it would have lent itself to any fraudulent device or scheme to inflate the value of the property. Commissioner Pea is a renowned authority on land registration, and has been a realtor for many years. Atty. Higinio Sunico is the chief of the Land Management Division, Bureau of Lands, who was recommended by the plaintiff. Both are well-known for their probability

Although it appears that Mr. Aquino, the commissioner recommended by the defendant, had occasion in the past to participate in transactions involving the same property, the court believes that the concurrence of the other commissioners is a safe guaranty of the correctness of their appraisal and recommendation. Accordingly, the dispositive portion of the decision reads as follows: WHEREFORE, judgment is hereby rendered funding the amount of P2,258.018.57 as just compensation for the property of the defendant and declaring the plaintiff entitled to possess and approximate it to the public use alleged in the complaint and to retain it upon payment of the said amount, after deducting the amount of P1,303,470.00, with legal interest from October 13, 1975 when the plaintiff was placed in possession of the real property, and upon payment to each of the commissioners of the sum of P35.00 for their attendance during the hearings held on January 23, February 16, May 11, July 23, September 17, October 12 and December 10, 1976, plus P500.00 each for the preparation of the report, and the costs. The plaintiff elevated the case to the then Intermediate Appellate Court (IAC) for review. On October 29, 1984, it affirmed the appealed decision with the modification that the plaintiff Republic of the Philippines be exempted from the payment of the commissioners' fees, the P500.00 granted each of them for the preparation of the report and the costs. Its motion for the reconsideration of said decision having been denied, petitioner filed the instant petition submitting the following issues for resolution: 1. Whether or not respondent Court erred in not disqualifying Commissioner Aurelio B. Aquino from membership in the Committee of Appraisal. 2. Whether or not respondent Court erred in not totally disregarding the audited statement by the defendant, which is hearsay in nature and was not formally offered in evidence. 3. Whether or not respondent Court erred in totally disregarding petitioner's evidence showing that the award of just compensation should be only P1,800,000.00 and not P2,258.018.57 as awarded by said respondent Court. The issue of the disqualification of Aquino as commissioner deserves scant attention. Under Section 8, Rule 67 of the Rules of Court, the court may take the following actions on the report submitted by commissioners: it may "accept the report and render judgment in accordance therewith; or for cause shown, it may recommit the same to the commissioners for further report of facts, or it may set aside the report and appoint new commissioners, or it may accept the report in part and reject it in part; . . . ." In other words, the report of the commissioners is merely advisory and recommendatory in character as far as the court is concerned. 9 Hence, it hardly matters that one of the three commissioners had a preconceived and biased valuation of the condemned property. The veracity or exactitude of the estimate arrived at by the commissioners may not be adversely affected thereby. In fact, the report of only two commissioners may suffice if the third commissioner dissents from the former's valuation. 10 Indeed, the participation of an allegedly biased commissioner may not result in the total disregard of an appraisal report in the absence of proof that the two other commissioners were unduly influenced by their allegedly partial colleague. The determination of just compensation for a condemned property is basically a judicial function.

As the court is not bound by the commissioners' report, it may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of its right of condemnation, and to the defendant just compensation for the property expropriated. For that matter, this Court may even substitute its own estimate of the value as gathered from the record. 11 Hence, although the determination of just compensation appears to be a factual matter which is ordinarily outside the ambit of its jurisdiction, this Court may disturb the lower court's factual finding on appeal when there is clear error or grave abuse of discretion. 12 We hold that the courts below made an erroneous determination of just compensation in this case. In the first place, the just compensation prescribed herein is based on the commissioners' recommendation which in turn is founded on the "audited" statements of Amerex that the property is worth P2,258,018.57. As earlier pointed out, while the court may accept the commissioners' report and render judgment in accordance therewith, it may not do so without considering whether the report is supported by evidence. The court is also duty-bound to determine whether the commissioners had discharged the trust reposed in them according to well-established rules and formed their judgment upon correct legal principles for they are not supposed to act ad libitum . 13 Amerex's "audited" statement on the acquisition cost, cost of painting and major repairs, taxes, and insurance premiums which totals P2,107,479.48, contains the following certification: We have checked the details of the transactions indicated in the foregoing schedule of Land and Building Account as at January 31, 1976 with the books and records of Amerex Electronics (Philippines) Corporation which were presented to us for examination and have found the details to be in accordance therewith. We have not made an audit of the books of accounts of Amerex Electronics (Philippines) Corporation. Sycip, Gorres Velayo & Co. PTR No. 4709791 January 23, 1976 Makati, Rizal (Emphasis supplied). 14 Amerex's other "audited" statement on the maintenance expenses of the property wherein it allegedly incurred the amount of P150,539.09 contains a similar certification by the same accounting firm specifically stating that the auditor did not make an audit of the books of accounts of Amerex. 15 It is clear from these certifications that the accounting firm which issued them merely compared the figures in the schedules or "audited" statements with those of the records and books of accounts of Amerex. As no investigation was made as to the veracity of the figures in the account, there was no audit in the real sense of the term. To audit is to examine an account, compare it with the vouchers, adjust the same, and to state the balance, by persons legally authorized for the purpose. 16 While the word "audit" is sometimes restricted to a mere mathematical process, it generally includes investigation, the weighing of evidence, and deciding whether items should or should not be included in the account . 17 Audit involves the exercise of discretion; it is a quasi-judicial function. 18 The accuracy of the "audited" statements herein is therefore suspect. Besides the fact that the petitioner was not furnished a copy of the audited statements which were also not introduced in evidence, Enrique P. Esteban, vice-president and treasurer of Amerex, and even a representative of the accounting firm, were likewise not presented during the trial thereby

depriving petitioner herein of the opportunity to cross-examine them. It would therefore be unfair to the petitioner to hold it bound by the "audited" statements of Amerex which may have been premised on false or mistaken data. 19 This Court having declared as unconstitutional the mode of fixing just compensation under P.D. No. 794 20 just compensation should be determined either at the time of the actual taking of the government or at the time of the judgment of the court, whichever comes first. 21 In this case, the issuance of the condemnation order and the actual taking of the property both occurred in October, 1975. Accordingly, the appraisal made by Ampil Realty and Appraisal Co., Inc. on June 5, 1975, which date is nearest to that of the actual taking of the property, should be the basis for the determination of just compensation the record being bereft of any indications of anomaly appertaining thereto. It should be added that Wenceslao Ampil, the president of said appraisal firm, testified at the trial and therefore petitioner had the opportunity to confront him and to question his report. The reasonableness of the June 5,1975 appraisal fixing at P2,400,000 the fair market value of the property, is bolstered by the fact that on June 4, 1975, Traders Commodities Corporation, through its lawyer, Sedfrey A. Ordoez offered to buy the property at P2,750,000. 22 It must be emphasized, however, that legal interest on the balance of the just compensation of P2,400,000 after deducting the amount of P1,303,470 which had been delivered to Amerex, should be paid by petitioner from the time the government actually took over the propert y. 23 Much as we realize the need of the government, under these trying times, to get the best possible price for the expropriated property considering the ceaseless and continuing necessity for schools, we cannot agree with the petitioner that the just compensation for the property should be the price it commanded when it was first offered for sale to the City School Board of Manila. Petitioner failed to substantiate its claim that the property is worth the lower amount of P1,800,000. In contrast, Amerex submitted evidence consisting of the aforesaid June 5, 1975 appraisal report which fixed the fair market value of the property at P2,400,000. WHEREFORE, the just compensation of the property expropriated for the use of the Manuel de la Fuente High School Don Mariano Marcos Memorial High School) is hereby fixed at Two Million Four Hundred Thousand Pesos (P2,400,000.00). After deducting the amount of P1,303,470.00 therefrom, the petitioner shall pay the balance with legal interest from October 13, 1975.

Case: City of Cebu v. Spouses Dedamo, G. R. No. 142971, May 07, 2002

City of Cebu v. Spouses Dedamo, G.R. No. 142 971, May 07, 2002

DAVIDE, JR., C.J.:

In its petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner City of Cebu assails the decision of 11 October 1999 of the Court of Appeals in CAG.R. CV No. 59204 affirming the judgment of 7 May 1996 of the Regional Trial Court, Branch 13, Cebu City, in Civil Case No. CEB-14632, a case for eminent domain, which fixed the valuation of the land subject thereof on the basis of the recommendation of the commissioners appointed by it. The material operative facts are not disputed.

On 17 September 1993, petitioner City of Cebu filed in Civil Case No. CEB-14632 a complaint for eminent domain against respondents spouses Apolonio and Blasa Dedamo. The petitioner alleged therein that it needed the following parcels of land of respondents, to wit:
Lot No. 1527 Area----------------------------1,146 square meters Tax Declaration---------------03472 Title No.-----------------------31833 Market value------------------P240,660.00 Assessed Value---------------P72,200.00 Lot No. 1528 Area--------------------------------------------------------793 square meters Area sought to be-----------------------------------------478 square meters expropriated Tax Declaration-------------------------------------------03450 Title No. ---------------------------------------------------31832 Market value for the whole lot--------------------------P1,666,530.00 Market value of the Area to be expropriated----------P100,380.00 Assessed Value--------------------------------------------P49,960.00

for a public purpose, i.e., for the construction of a public road which shall serve as an access/relief road of Gorordo Avenue to extend to the General Maxilum Avenue and the back of Magellan International Hotel Roads in Cebu City. The lots are the most suitable site for the purpose. The total area sought to be expropriated is 1,624 square meters with an assessed value of P1,786,400. Petitioner deposited with the Philippine National Bank the amount of P51,156 representing 15% of the fair market value of the property to enable the petitioner to take immediate possession of the property pursuant to Section 19 of R.A. No. 7160. Respondents, filed a motion to dismiss the complaint because the purpose for which their property was to be expropriated was not for a public purpose but for benefit of a single private entity, the Cebu Holdings, Inc. Petitioner could simply buy directly from them the property at its fair market value if it wanted to, just like what it did with the neighboring lots. Besides, the price offered was very low in light of the consideration of P20,000 per square meter, more or less, which petitioner paid to the neighboring lots. Finally, respondents alleged that they have no other land in Cebu City. A pre-trial was thereafter had. On 23 August 1994, petitioner filed a motion for the issuance of a writ of possession pursuant to Section 19 of R.A. No. 7160. The motion was granted by the trial court on 21 September 1994. On 14 December 1994, the parties executed and submitted to the trial court an Agreement wherein they declared that they have partially settled the case and in consideration thereof they agreed:
1. That the SECOND PARTY hereby conforms to the intention to [sic] the FIRST PARTY in expropriating their parcels of land in the above-cited case as for public purpose and for the benefit of the general public; 2. That the SECOND PARTY agrees to part with the ownership of the subject parcels of land in favor of the FIRST PARTY provided the latter will pay just compensation for the same in the amount determined by the court after due notice and hearing;

3. That in the meantime the SECOND PARTY agrees to receive the amount of ONE MILLION SEVEN HUNDRED EIGHTY SIX THOUSAND FOUR HUNDRED PESOS (1,786,400.00) as provisional payment for the subject parcels of land, without prejudice to the final valuation as maybe determined by the court; 4. That the FIRST PARTY in the light of the issuance of the Writ of Possession Order dated September 21, 1994 issued by the Honorable Court, agreed to take possession over that portion of the lot sought to be expropriated where the house of the SECOND PARTY was located only after fifteen (15) days upon the receipt of the SECOND PARTY of the amount of P1,786,400.00; 5. That the SECOND PARTY upon receipt of the aforesaid provisional amount, shall turn over to the FIRST PARTY the title of the lot and within the lapse of the fifteen (15) days grace period will voluntarily demolish their house and the other structure that may be located thereon at their own expense; 6. That the FIRST PARTY and the SECOND PARTY jointly petition the Honorable Court to render judgment in said Civil Case No. CEB-14632 in accordance with this AGREEMENT; 7. That the judgment sought to be rendered under this agreement shall be followed by a supplemental judgment fixing the just compensation for the property of the SECOND PARTY after the Commissioners appointed by this Honorable Court to determine the same shall have rendered their report and approved by the court.

Pursuant to said agreement, the trial court appointed three commissioners to determine the just compensation of the lots sought to be expropriated. The commissioners were Palermo M. Lugo, who was nominated by petitioner and who was designated as Chairman; Alfredo Cisneros, who was nominated by respondents; and Herbert E. Buot, who was designated by the trial court. The parties agreed to their appointment. Thereafter, the commissioners submitted their report, which contained their respective assessments of and recommendation as to the valuation of the property. On the basis of the commissioners report and after due deliberation thereon, the trial court rendered its decision on 7 May 1996, the decretal portion of which reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in accordance with the report of the commissioners. Plaintiff is directed to pay Spouses Apolonio S. Dedamo and Blasa Dedamo the sum of pesos: TWENTY FOUR MILLION EIGHT HUNDRED SIXTY-FIVE THOUSAND AND NINE HUNDRED THIRTY (P24,865.930.00) representing the compensation mentioned in the Complaint. Plaintiff and defendants are directed to pay the following commissioners fee; 1. To Palermo Lugo 2. To Herbert Buot 3. To Alfredo Cisneros - P21,000.00 - P19,000.00 - P19,000.00

Without pronouncement as to cost. SO ORDERED.

Petitioner filed a motion for reconsideration on the ground that the commissioners report was inaccurate since it included an area which was not subject to expropriation. More specifically, it contended that Lot No. 1528 contains 793 square meters but the actual area to be expropriated is only 478 square meters. The remaining 315 square meters is the subject of a separate expropriation proceeding in Civil Case No. CEB-8348, then pending before Branch 9 of the Regional Trial Court of Cebu City. On 16 August 1996, the commissioners submitted an amended assessment for the 478 square meters of Lot No. 1528 and fixed it at P12,824.10 per square meter, or in the amount of P20,826,339.50. The assessment was approved as the just compensation thereof by the trial court in its Order of 27 December 1996. Accordingly, the dispositive portion of the decision was amended to reflect the new valuation. Petitioner elevated the case to the Court of Appeals, which docketed the case as CA-G.R. CV No. 59204. Petitioner alleged that the lower court erred in fixing the amount of just compensation at P20,826,339.50. The just compensation should be based on the prevailing market price of the property at the commencement of the expropriation proceedings. The petitioner did not convince the Court of Appeals. In its decision of 11 October 1999,[7] the Court of Appeals affirmed in toto the decision of the trial court. Still unsatisfied, petitioner filed with us the petition for review in the case at bar. It raises the sole issue of whether just compensation should be determined as of the date of the filing of the complaint. It asserts that it should be, which in this case should be 17 September 1993 and not at the time the property was actually taken in 1994, pursuant to the decision in National Power Corporation vs. Court of Appeals.[8] In their Comment, respondents maintain that the Court of Appeals did not err in affirming the decision of the trial court because (1) the trial court decided the case on the basis of the agreement of the parties that just compensation shall be fixed by commissioners appointed by the court; (2) petitioner did not interpose any serious objection to the commissioners report of 12 August 1996 fixing the just compensation of the 1,624-square meter lot at P20,826,339.50; hence, it was estopped from attacking the report on which the decision was based; and (3) the determined just compensation fixed is even lower than the actual value of the property at the time of the actual taking in 1994. Eminent domain is a fundamental State power that is inseparable from sovereignty. It is the Governments right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose.[9] However, the Government must pay the owner thereof just compensation as consideration therefor. In the case at bar, the applicable law as to the point of reckoning for the determination of just compensation is Section 19 of R.A. No. 7160, which expressly provides that just compensation shall be determined as of the time of actual taking. The Section reads as follows:
SECTION 19. Eminent Domain. -- A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the

property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property.

The petitioner has misread our ruling in The National Power Corp. vs. Court of Appeals.[10] We did not categorically rule in that case that just compensation should be determined as of the filing of the complaint. We explicitly stated therein that although the general rule in determining just compensation in eminent domain is the value of the property as of the date of the filing of the complaint, the rule admits of an exception: where this Court fixed the value of the property as of the date it was taken and not at the date of the commencement of the expropriation proceedings. Also, the trial court followed the then governing procedural law on the matter, which was Section 5 of Rule 67 of the Rules of Court, which provided as follows:
SEC. 5. Ascertainment of compensation. -- Upon the entry of the order of condemnation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken. The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report is to be filed with the court.

More than anything else, the parties, by a solemn document freely and voluntarily agreed upon by them, agreed to be bound by the report of the commission and approved by the trial court. The agreement is a contract between the parties. It has the force of law between them and should be complied with in good faith. Article 1159 and 1315 of the Civil Code explicitly provides:
Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.

Furthermore, during the hearing on 22 November 1996, petitioner did not interpose a serious objection.[11] It is therefore too late for petitioner to question the valuation now without violating the principle of equitable estoppel. Estoppel in pais arises when one, by his acts, representations or admissions, or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts.[12] Records show that petitioner consented to conform with the valuation recommended by the commissioners. It cannot detract from its agreement now and assail correctness of the commissioners assessment. Finally, while Section 4, Rule 67 of the Rules of Court provides that just compensation shall be determined at the time of the filing of the complaint for expropriation, [13]such law cannot prevail over R.A. 7160, which is a substantive law.[14] WHEREFORE, finding no reversible error in the assailed judgment of the Court of

Appeals in CA-G.R. CV No. 59204, the petition in this case is hereby DENIED. No pronouncement as to costs.

Case: EPZA vs. Dulay, 149 SCRA 305 (1987)

EPZA v. Dulay 149 SCRA 305 (1987) Facts: The San Antonio Development Corporation was the owner of a piece of land in Lapu-Lapu City which the EPZA expropriated in 1979. The commissioners appointed by the trial court recommended that the San Antonio Development Corp. be paid P15.00 per square meter. EPZA filed a petition for certiorari, arguing that under PD 1533 the compensation should be the fair and current market value declared by the owner or the market value determined by the assessor, whichever is lower. HELD: The method of ascertaining just compensation under PD 1533 constitutes impermissible encroachment on judicial prerogatives. Although the court technically would still have the power to determine the just compensation for the property, following the decree, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. Just compensation means the value of the property at the time of the taking. It means a fair and full equivalent for the loss sustained. All the facts as to the condition of the property and its surroundings, its improvements and capabilities should be considered. In this case, the tax declarations used as basis for the just compensation were made long before the declaration of martial law when the land was much cheaper. To peg the value of the lots on the basis of those documents which are outdated would be arbitrary and confiscatory

Case: Ansaldo vs. Tantuico, G.R. 50147 August 3, 1990

Ansaldo vs. Tantuico, G.R. 50147 August 3, 1990

Facts: Two lots of private ownership were taken by the Government and used for the widening of a road more than forty-three years ago, without benefit of an action of eminent domain or agreement with its owners, albeit without protest by the latter. The lots belong to the petitioners, Jose Ma. Ansaldo and Maria Angela Ansaldo, are covered by title in their names and have an aggregate area of 1,041 square meters. These lots were taken from the Ansaldos sometime in 1947 by the Department of Public Work Transportation and Communication and made part of what used to be Sta. Mesa Street and is now Ramon Magsaysay Avenue at San Juan, Metro Manila. Said owners made no move whatever until twenty-six years later. They wrote to ask for compensation for their land on January 22, 1973. Their claim was referred to the Secretary of Justice who in due course rendered an opinion dated February 22, 1973, that just compensation should be paid in accordance with Presidential Decree No. 76. The Commission on Audit, however, declined to adopt the recommendation. In a decision handed down on September 26, 1973. The Acting Chairman

ruled that the amount of compensation to be paid to the claimants is to be determined as of the time of the taking of the subject lots. Issue: Whether or not just compensation should be fixed as of the time of actual taking of possession by the expropriating entity or only after conveyance of title to the expropriator pursuant to expropriation proceedings duly instituted. Held: In the context of the State's inherent power of eminent domain, there is a "taking" when the owner is actually deprived or dispossessed of his property; when there is a practical destruction or a material impairment of the value of his property or when he is deprived of the ordinary use thereof. There is a "taking" in this sense when the expropriator enters private property not only for a momentary period 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 deprive him of all beneficial enjoyment thereof. Clearly, then, the value of the Ansaldos property must be ascertained as of the year 1947, when it was actually taken, and not at the time of the filing of the expropriation suit, which, by the way, still has to be done. The value, once fixed, shall earn interest at the legal rate until full payment is effected, conformably with other principles laid down by case law.

Case: NPC v. CA, 254 SCRA 577 (1996) Case: Asso. Of Small landowners v. DAR, 175 SCRA 343 (1989)
Assoc.of Small Landowners v. DAR, 175 SCRA 343 (1989)

Facts: These are 3 cases consolidated questioning the constitutionality of the Agrarian Reform Act. Article XIII on Social Justice and Human Rights includes a call for the adoption by the State of an agrarian reform program. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farm workers, who are landless, to own directly or collectively the lands they till or, in the case of other farm workers, to receive a just share of the fruits thereof. RA 3844, Agricultural Land Reform Code, had already been enacted by Congress on August 8, 1963. This was substantially superseded almost a decade later by PD 27, which was promulgated on Oct 21, 1972, along with martial law, to provide for the compulsory acquisition of private lands for distribution among tenant-farmers and

to specify maximum retention limits for landowners. On July 17, 1987, Cory issued EO 228, declaring full land ownership in favor of the beneficiaries of PD 27 and providing for the valuation of still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987 by PP 131, instituting a comprehensive agrarian reform program (CARP), and EO 229, providing the mechanics for its implementation. Afterwhich, is the enactment of RA 6657, Comprehensive Agrarian Reform Law of 1988, which Cory signed on June 10. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with its provisions. In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of their property rights as protected by due process. The equal protection clause is also violated because the order places the burden of solving the agrarian problems on the owners only of agricultural lands. No similar obligation is imposed on the owners of other properties. The petitioners maintain that in declaring the beneficiaries under PD 27 to be the owners of the lands occupied by them, EO 228 ignored judicial prerogatives and so violated due process. Worse, the measure would not solve the agrarian problem because even the small farmers are deprived of their lands and the retention rights guaranteed by the Constitution. In his comment the Sol-Gen asserted that the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to a different class and should be differently treated. The Comment also suggests the possibility of Congress first distributing public agricultural lands and scheduling the expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition would be premature. ISSUE: Whether or not there was a violation of the equal protection clause. HELD: The SC ruled affirming the Sol-Gen. The argument of the small farmers that they have been denied equal protection because of the absence of retention limits has also become academic under Sec 6 of RA 6657. Significantly, they too have not questioned the area of such limits. There is also the complaint that they should not be made to share the burden of agrarian reform, an objection also made by the sugar planters on the ground that they belong to a particular class with particular interests of their own. However, no evidence has been submitted to the Court that the requisites of a valid classification have been violated. Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each other in these same particulars. To be valid, it must conform to the following requirements: (1) It must be based on substantial distinctions;

(2) It must be germane to the purposes of the law; (3) It must not be limited to existing conditions only; and (4) It must apply equally to all the members of the class. The Court finds that all these requisites have been met by the measures here challenged as arbitrary and discriminatory. Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities imposed. The petitioners have not shown that they belong to a different class and entitled to a different treatment. The argument that not only landowners but also owners of other properties must be made to share the burden of implementing land reform must be rejected. There is a substantial distinction between these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of Rights. Manner of payment

Case: DAR v. CA, 249 SCRA 149 (1995)

G.R. No. 118745 October 6, 1995 DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents. FRANCISCO, R., J.: It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out to such an extent as deny justice to the landowner whenever truth and justice happen to be on his side. 1 As eloquently stated by Justice Isagani Cruz: . . . social justice or any justice for that matter is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to prefer the poor simply because they are poor, or to reject the rich simply because they are rich, for justice must always be served, for poor and rich alike, according to the mandate of the law. 2 In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution. Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745) and Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP No. 33465. However, upon motion filed by private respondents, the petitions were ordered consolidated. 3

Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted private respondents' Petition for Certiorari and Mandamus and ruled as follows: WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby GRANTED: a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar as it provides for the opening of trust accounts in lieu of deposits in cash or bonds; b) Respondent Landbank is ordered to immediately deposit not merely "earmark", "reserve" or "deposit in trust" with an accessible bank designated by respondent DAR in the names of the following petitioners the following amounts in cash and in government financial instruments within the parameters of Sec. 18 (1) of RA 6657: P 1,455,207.31 Pedro L. Yap P 135,482.12 Heirs of Emiliano Santiago P 15,914,127.77 AMADCOR; c) The DAR-designated bank is ordered to allow the petitioners to withdraw the above-deposited amounts without prejudice to the final determination of just compensation by the proper authorities; and d) Respondent DAR is ordered to 1) immediately conduct summary administrative proceedings to determine the just compensation for the lands of the petitioners giving the petitioners 15 days from notice within which to submit evidence and to 2) decide the cases within 30 days after they are submitted for decision. 4 Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5 denying their motion for reconsideration. Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657). Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of compensation for their land pursuant to the provisions of RA 6657, private respondents filed with this Court a Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private respondents questioned the validity of DAR Administrative Order No. 6, Series of 1992 6 and DAR Administrative Order No. 9, Series of 1990, 7 and sought to compel the DAR to expedite the pending summary administrative proceedings to finally determine the just compensation of their properties, and the Landbank to deposit in cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents, and to allow them to withdraw the same. Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to respondent Court of Appeals for proper determination and disposition. As found by respondent court , the following are undisputed:

Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the names of farmer beneficiaries collectively, based on the request of the DAR together with a certification of the Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked for Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and 6283, respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without complying with the requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank bonds in an accessible bank. (Rollo, p. 6). The above allegations are not disputed by any of the respondents. Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of a parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT No. NT-60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F. Santiago; that in November and December 1990, without notice to the petitioners, the Landbank required and the beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the net harvest; that on 24 October 1991 the DAR Regional Director issued an order directing the Landbank to pay the landowner directly or through the establishment of a trust fund in the amount of P135,482.12, that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F. Santiago. (ANNEX "E"; Rollo, p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual Tiller's Deed of Undertaking committing themselves to pay rentals to the LandBank (Rollo, p. 133). The above allegations are not disputed by the respondents except that respondent Landbank claims 1) that it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed of Undertaking (ATDU, for brevity); and 2) that respondent Landbank, although armed with the ATDU, did not collect any amount as rental from the substituting beneficiaries (Rollo, p. 99). Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges with respect to its properties located in San Francisco, Quezon that the properties of AMADCOR in San Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares and another parcel covered by TCT No. 10832 with an area of 163.6189 hectares; that a summary administrative proceeding to determine compensation of the property covered by TCT No. 34314 was conducted by the DARAB in Quezon City without notice to the landowner; that a decision was rendered on 24 November 1992 (ANNEX "F") fixing the compensation for the parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares at P2,768,326.34 and ordering the Landbank to pay or establish a trust account for said amount in the name of AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in the decision was established by adding P1,986,489.73 to the first trust account established on 19 December 1991 (ANNEX "G"). With respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged that the property of AMADCOR in Tabaco, Albay is covered by TCT No. T-2466 of the Register of Deeds of Albay with an area of 1,629.4578 hectares'; that emancipation patents were issued covering an area of 701.8999 hectares which were registered on 15 February 1988 but no action was taken thereafter by the DAR to fix

the compensation for said land; that on 21 April 1993, a trust account in the name of AMADCOR was established in the amount of P12,247,217.83', three notices of acquisition having been previously rejected by AMADCOR. (Rollo, pp. 8-9) The above allegations are not disputed by the respondents except that respondent Landbank claims that petitioner failed to participate in the DARAB proceedings (land valuation case) despite due notice to it (Rollo, p. 100). 8 Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and the titles are cancelled as provided under Section 16(e) of RA 6657. 9 Private respondents also assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as landowners despite the clear mandate that before taking possession of the property, the compensation must be deposited in cash or in bonds. 10 Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rulemaking power pursuant to Section 49 of RA 6657. 11 Moreover, the DAR maintained that the issuance of the "Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA 6657 and the ruling in the case of Association of Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343).
12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also used. 13 On October 20, 1994, the respondent court rendered the assailed decision in favor of private respondents. 14 Petitioners filed a motion for reconsideration but respondent court denied the same. 15 Hence, the instant petitions. On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the appeal has no merit and is merely intended to delay the finality of the appealed decision. 16 The Court, however, denied the motion and instead required the respondents to file their comments. 17 Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No. 9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and (2) in holding that private respondents are entitled as a matter of right to the immediate and provisional release of the amounts deposited in trust pending the final resolution of the cases it has filed for just compensation. Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657 referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit. Thus, in opting for the opening of a trust account as the acceptable form of deposit through Administrative Circular No. 9, petitioner DAR did not commit any grave abuse of discretion since it merely exercised its power to promulgate rules and regulations in implementing the declared policies of RA 6657. The contention is untenable. Section 16(e) of RA 6657 provides as follows: Sec. 16. Procedure for Acquisition of Private Lands xxx xxx xxx

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied) It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit". The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative enactment. 18 In this regard, it must be stressed that the function of promulgating rules and regulations may be legitimately exercised only for the purpose of carrying the provisions of the law into effect. The power of administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is that administrative regulations cannot extend the law and amend a legislative enactment, 19 for settled is the rule that administrative regulations must be in harmony with the provisions of the law. And in case there is a discrepancy between the basic law and an implementing rule or regulation, it is the former that prevails. 20 In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29A and 54 because these implementing regulations cannot outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and void. Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their properties, petitioners assert the negative. The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of RA 6657 and payment of final compensation as provided under Section 18 21 of the same law. According to petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by the landowner because the latter amount is only provisional and intended merely to secure possession of the property pending final valuation. To further bolster the contention petitioners cite the following pronouncements in the case of "Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22 The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just compensation, in contravention of a well-accepted principle of eminent domain. xxx xxx xxx

The CARP Law, for its part conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change of ownership is contemplated either. xxx xxx xxx Hence the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be rejected. Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found that: . . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not always required to be made fully in money" even as the Supreme Court admits in the same case "that the traditional medium for the payment of just compensation is money and no other" the Supreme Court in said case did not abandon the "recognized rule . . . that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation." 23 (Emphasis supplied) We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional mode of payment of compensation and recognized payment other than in cash. It did not, however, dispense with the settled rule that there must be full payment of just compensation before the title to the expropriated property is transferred. The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to appropriate the amounts already deposited in their behalf as compensation for their properties simply because they rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession and use of such properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the more by withholding that which rightfully belongs to private respondents in exchange for the taking, under an authority (the "Association" case) that is, however, misplaced. This is misery twice bestowed on private respondents, which the Court must rectify. Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property for which he should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule that: . . . within the context of the State's inherent power of eminent domain, just compensation 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 within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. 24 (Emphasis supplied)

The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of the Comprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer. 25 But despite this, cases involving its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still optimistic that the goal of totally emancipating the farmers from their bondage will be attained in due time. It must be stressed, however, that in the pursuit of this objective, vigilance over the rights of the landowners is equally important because social justice cannot be invoked to trample on the rights of property owners, who under our Constitution and laws are also entitled to protection. 26 WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the appealed decision is AFFIRMED in toto.

Case: Meralco v. Pineda, 206 SCRA 196 (1992)

MERALCO v. Pineda 206 SCRA 196 Facts: MERALCO filed a complaint for expropriation of the lots of the private respondents. While the case was going on and before the appointment of the Board of Commissioners to value the land, the private respondents filed a motion to withdraw a portion of the deposit of MERALCO. This was granted by Judge Pineda; MERALCO objected, contending that this cannot be done since the Board of Commissioners was not yet constituted, and allowing such is a deprivation of its property without due process of law. Judge Pineda maintained that he can dispense with the Board and adopt the testimony of a credible real estate broker, or he could exercise himself the right to decide the just compensation to be paid to the owners of the land. Issue: Can the court order payment of just compensation before appraisal and valuation of the property by a Board of Commissioners? Ruling: Negative. Although it is true that the judge may disregard the findings of the commissioners and substitute his own estimate of the value of the land, he may only do so for a valid reason, e.g. where the Commissioners have applied illegal principles to the evidence submitted to them or where they have disregarded a clear preponderance of evidence, or where the amount allowed is either grossly inadequate or excessive. But the composition of the Board of Commissioners is mandatory. A trial before the Commissioners is indispensable to allow the parties to present evidence on the issue of just compensation. The lot owners must prove the value of the land by evidence. On the other hand, MERALCO must be given an opportunity to rebut any evidence presented by lot owners.

Case: NPC v. Henson, G.R. No. 129998, December 29, 1998

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 129998 December 29, 1998 NATIONAL POWER CORPORATION, petitioner, vs. LOURDES HENSON, married to Eugenio Galvez; JOSEFINA HENSON, married to Petronio Katigbak, JESUSA HENSON; CORAZON HENSON, married to Jose Ricafort;

ALFREDO TANCHIATCO; BIENVENIDO DAVID; MARIA BONDOC CAPILI, married to Romeo Capili; and MIGUEL MANOLOTO, respondents. PARDO, J.: The case is an appeal via certiorari under Rule 45 of the Revised Rules of Court from the decision of the Court of Appeals, which affirmed with modification the decision of the Regional Trial Court, San Fernando, Pampanga, in a special civil action for eminent domain, ordering the National Power Corporation (NPC) to pay respondents landowners/claimants just compensation for the taking of their five (5) parcels of land, with an area of 63,220 square meters at P400.00, per square meter, with legal interest from September 11, 1990, plus costs of the proceedings. On March 21, 1990, the National Power Corporation (NPC) originally instituted with the Regional Trial Court, Third Judicial District, Branch 46, San Fernando, Pampanga, a complaint 1 for eminent domain, later amended on October 11, 1990, for the taking for public use of five (5) parcels of land, owned or claimed by respondents, with a total aggregate area of 58,311 square meters, for the expansion of the NPC Mexico Sub-Station. 2 Respondents are the registered owners/claimants of the five (5) parcels of land sought to be expropriated, situated in San Jose Matulid, Mexico, Pampanga, more particularly described as follows: Parcels of rice land, being Lot 1, 2, 3, 4, and 5 of the subdivision plan Psd-03-017121 (OLT) and being a portion of Lot 212 of Mexico Cadastre, situated in the Barangay of San Jose Matulid, Municipality of Mexico, province of Pampanga, Island of Luzon. Bounded on the North by Barangay Road Calle San Jose; on the East by Lot 6, Psd03-017121 (OLT) owned by the National Power Corporation; on the South by Lot 101, Psd-03-017121 (OLT) being an irrigation ditch; on the West by Lot 100, Psd-03-0017121 (OLT) being an irrigation ditch and Barrio road, containing an aggregate area of FIFTY EIGHT THOUSAND THREE HUNDRED ELEVEN (58,311) square meters, which parcels of land are broken down as follows with claimants: 1. Lot 1-A = 43,532 sq. m. - Henson Family 2. Lot 2-A = 6,823 sq. m. - Alfredo Tanchiatco, encumber ed with Land Bank of the Phil. (LBP) 3. Lot 3-A = 3,057 sq. m. - Bienvenido David, encumber ed with LBP 4. Lot 4-A = 1,438 sq. m. - Maria Bondoc

Capili, encumber ed with LBP 5. Lot 5-A = 3,461 sq. m. - Miguel Manoloto and Henson Family Total A = 58,311 sq. m. and covered by Transfer Certificate of Title No. 557 in the name of Henson, et al.; Transfer Certificate of Title No. 7131/Emancipation Patent No. A-277216 in the name of Alfredo Tanchiatco; Transfer Certificate of Title No. 7111/Emancipation Patent No. A-278086 in the name of Bienvenido David; Transfer Certificate of Title No. 7108/Emancipation Patent No. A-278089 in the name of Maria B. Capili; Certificate of Land Transfer No. 4550 in the name of Miguel C. Manaloto, and Subdivision Plan Psd-03-017121 (OLT), which is a subdivision of Lot 212, Mexico Cadastre as surveyed for Josefina Katigbak, et al. Said five (5) parcels of land are agricultrual/riceland covered by Operation Land Transfer (OLT) of the Department of Agrarian Reform. 3 Petitioner needed the entire area of the five (5) parcels of land, comprising an aggregate area of 58,311 square meters, for the expansion of its Mexico Subdivision. 4 On March 28, 1990, petitioner filed an urgent motion to fix the provisional value of the subject parcels of land. 3 On April 20, 1990, respondents filed a motion to dismiss. 4 They did not challenge petitioner's right to condemn their property, but declared that the fair market value of their property was from P180.00 to P250.00 per square meter. 5 On July 10, 1990, the trial court denied respondents' motion to dismiss. The court did not declare that petitioner had a lawful right to take the property sought to be expropriated. 6 However, the court fixed the provisional value of the land at P100.00 per square meter, for a total area of 63,220 7 square meters of respondents' property, to be deposited with the Provincial Treasurer of Pampanga. Petitioner deposited the amount on August 29, 1990. 8 On September 5, 1990, the trial court issued a writ of possession in favor of petitioner, and, on September 11, 1990, the court's deputy sheriff placed petitioner in possession of the subject land. 9 On November 22, 1990, and December 20, 1990, the trial court granted the motions of respondents to withdraw the deposit made by petitioner of the provisional value of their property amounting to P5,831,100.00, with a balance of P690,900.00, remaining with the Provincial Treasurer of Pampanga. 10 On April 5, 1991, the trial court issued an order appointing three (3) commissioners to aid the court in the reception of evidence to determine just compensation for the taking of the subject property. After receiving the evidence and conducting an ocular inspection, the commissioners submitted to the court their individual reports. Commisioner Mariano C. Tiglao, in his report dated September 10, 1992, recommended that the fair market value of the entire 63,220 square meters property be fixed at P350.00 per square meter. Commissioner Arnold P. Atienza, in his report dated February 24, 1993, recommended that the fair

market value be fixed at P375.00 per square meter. Commissioner Victorino Orocio, in his report dated April 28, 1993, recommended that the fair market value be fixed at P170.00 per square meter.
11

However, the trial court did not conduct a hearing on any of the reports. On May 19, 1993, the trial court rendered judgment fixing the amount of just compensation to be paid by petitioner for the taking of the entire area of 63,220 square meters at P400.00 per square meter, with legal interest thereon computed from September 11, 1990, when petitioner was placed in possession of the land, plus attorney's fees of P20,000.00, and costs of the proceedings. 12 In due time, petitioner appealed to the Court of Appeals. 13 On July 23, 1997, the Court of Appeals rendered decision affirming that of the Regional Trial Court, except that the award of P20,000.00, as attorney's fees was deleted. 14 Hence, this petition for review. 15 By resolution adopted on October 8, 1997, the Court required respondents to comment on the petition within ten (10) days from notice. 16 On January 7, 1998, respondents filed their comment thereon. 17 By resolution adopted on February 2, 1998, the Court required petitioner to file a reply to the comment. 18 On August 25, 1990, petitioner filed a reply thereto. 19 We now resolve to give due course to the petition. We modify the appealed decision. As respondents did not challenge petitioner's right to expropriate their property, the issue presented boils down to what is the just compensation for the taking of respondents' property for the expansion of the NPC's Mexico Sub-station, situated in San Jose Matulid, Mexico, Pampanga. The parcels of land sought to be expropriated are undeniably idle, undeveloped, raw agricultural land, bereft of any improvement. Except for the Henson family, all the other respondents were admittedly farmer beneficiaries under operation land transfer of the Department of Agrarian Reform. However, the land has been re-classified as residential. The nature and character of the land at the time of its taking is the principal criterion to determine just compensation to the landowner. 20 In this case, the trial court and the Court of Appeals fixed the value of the land at P400.00 per square meter, which was the selling price of lots in the adjacent fully developed subdivision, the Santo Domingo Village Subdivision. The land in question, however, was an undeveloped, idle land, principally agricultural in character, though re-classified as residential. Unfortunately, the trial court, after creating a board of commissioners to help it determine the market value of the land did not conduct a hearing on the report of the commissioners. The trial court fixed the fair market value of subject land in an amount equal to the value of lots in the adjacent fully developed subdivision. This finds no support in the evidence. The valuation was even higher than the recommendation of anyone of the commissioners. On the other hand, Commissioner Atienza recommended a fair market value at P375.00 per square meter. This appears to be the closest valuation to the market value of lots in the adjoining fully developed subdivision. Considering that the subject parcels of land are undeveloped raw land, the price of P375.00 per square meter would appear to the Court as the just compensation for the taking of such raw land. Consequently, we agree with Commissioner Atienza's report that the fair market value of subject parcels of land be fixed at P375.00 per square-meter.

We also agree with petitioner that the area of the communal irrigation canal consisting of 4,809 square meters must be excluded from the land to be expropriated. To begin with, it is excluded in the amended complaint. Hence, the trial court and the Court of Appeals erred in including the same in the area to be taken. The trial court erroneously ordered double payment for 3,611 square meters of lot 5 (portion) in the dispositive part of its decision, and, hence, this must be deleted. The trial court and the Court of Appeals correctly required petitioner to pay legal interest 21 on the compensation awarded from September 11, 1990, the date petitioner was placed in possession of the subject land, less the amount respondents had withdrawn from the deposit that petitioner made with the Provincial Treasurer's Office. We, however, rule that petitioner is under its charter exempt from payment of costs of the proceedings. WHEREFORE, the decision of the Court of Appeals and that of the trial court subject of the appeal are hereby MODIFIED. We render judgment as follows: 1. The Court fixes the amount of P375.00, per square meter, as the just compensation to be paid to respondents for the taking of their property consisting of five (5) parcels of land, with a total area of 58,311 square meters, described in and covered by Transfer Certificates of Title Nos. 557, 7131, 7111, 7108 and Certificate of Land Transfer No. 4550, which parcels of land are broken down as follows: a. Lot 1-A, with an area of 43,532 square meters belonging to Lourdes Henson, Josefina Henson, Jesusa Henson and Corazon Henson; b. Lot 2-A, with an area of 6,823 square meters belonging to Alfredo Tanchiatco; c. Lot 3-A, with an area of 3,057 square meters belonging to Bienvenido David (TCT No. 7111) d. Lot 4-A, with an area of 1,438 square meters belonging to Maria Bondoc Capili (TCT No. 7108) e. Lot 5-A, with an area of 3,461 square meters belonging to Miguel Manaloto (150 square meters), Certificate of Land Transfer No. 4550 and Henson Family (3,311 square meters), deducting therefrom the amounts they had withdrawn from the deposit of petitioner for the provisional value of said parcels of land. 22 2. With legal interest thereon at 6% per annum commencing on September 11, 1990, until the finality of this decision, and at 12% per annum therefrom on the remaining unpaid amount until full payment. Let this decision be recorded in the office of the Register of Deeds of Pampanga. No costs in all instances.

Case: NPC v. Angas, 208 SCRA 542 (1992)

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION NATIONAL POWER CORPORATION, Petitioner, G. R. Nos. 60225-26 May 8, 1992

-versusHON. ZAIN B. ANGAS, District Judge of the Court of First Instance of Lanao del Sur, HADJI DALUMA KINIDAR, EBRA ALI and/or GASNARA ALI [Intervenors], MANGORSI CASAN, CASNANGANBATUGAN, PUNDAMARUG ATOCAL, PASAYOD PADO, DIMAAMPAO BAUTE CASNANGAN BAUTE, DIMAPORO SUBANG, TAMBILAWAN OTE, MANISUN ATOCAL, MASACAL TOMIARA [In Civil Case No. 2277] and LACSAMAN BATUGAN, and/or GUIMBA SHIPPING & DEVELOPMENT CORPORATION, MAGANCONG DIGAYAN, MOCTARA LAMPACO, LAMPACO PASANDALAN, DIMAPORO SUBANG, HADJI DALUMA KINIDAR, DIMAAMPAO BAUTE, PANGONOTAN COSNA TAGOL, SALACOP DIMACALING, HADJI SITTIE SOHRA LINANG BATARA, BERTUDAN PIMPING and/or CADUROG PIMPING, BUTUAN TAGOL, DISANGCOPAN MARABONG and HADJI SALIC SAWA [In Civil Case No. 2248], Respondents.

DECISION

PARAS, J.:

The basic issue in this original action for certiorari and mandamus filed by the National Power Corporation is, whether or not, in the computation of the legal rate of interest on just compensation for expropriated lands, the law applicable is Article 2209 of the Civil Code which prescribes a 6% legal interest rate or Central Bank Circular No. 416 which fixed the legal interest rate at 12% per annum. Pending consideration of this case on the merits,

petitioner seeks the issuance of a writ of preliminary injunction and/or restraining order to restrain or enjoin the respondent judge of the lower court from enforcing the herein assailed orders and from further acting or proceeding with Civil Case Nos. 2248 and 2277. The following are the antecedents of the case: On April 13, 1974 and December 3, 1974, petitioner National Power Corporation, a government-owned and controlled corporation and the agency through which the government undertakes the on-going infrastructure and development projects throughout the country, filed two complaints for eminent domain against private respondents with the Court of First Instance [now Regional Trial Court] of Lanao del Sur, docketed as Civil Case No. 2248 and Civil Case No. 2277, respectively. The complaint which sought to expropriate certain specified lots situated at Limogao, Saguiaran, Lanao del Sur was for the purpose of the development of hydro-electric power and production of electricity as well as the erection of such subsidiary works and constructions as may be necessarily connected therewith. Both cases were jointly tried upon agreement of the parties. After responsive pleadings were filed and issues joined, a series of hearings before court-designated commissioners were held. On June 15, 1979, a consolidated decision in Civil Cases Nos. 2248 and 2277 was rendered by the lower court, declaring and confirming that the lots mentioned and described in the complaints have entirely been lawfully condemned and expropriated by the petitioner, and ordering the latter to pay the private respondents certain sums of money as just compensation for their lands expropriated "with legal interest thereon until fully paid." Two consecutive motions for reconsideration of the said consolidated decision were filed by the petitioner. The same were denied by the respondent court. Petitioner did not appeal the aforesaid consolidated decision, which became final and executory. Thus, on May 16, 1980, one of the private respondents [Sittie Sohra Batara] filed an exparte motion for the execution of the June 15, 1979 decision, praying that petitioner be directed to pay her the unpaid balance of P14,300.00 for the lands expropriated from her, including legal interest which she computed at 6% per annum. The said motion was granted by the lower court. Thereafter, the lower court directed the petitioner to deposit with its Clerk of Court the sums of money as adjudged in the joint decision dated June 15, 1979. Petitioner complied with said order and deposited the sums of money with interest computed at 6% per annum. On February 10, 1981, one of the private respondents [Pangonatan Cosna Tagol], through counsel, filed with the trial court an ex-parte motion in Civil Case No. 2248 praying, for the first time, that the legal interest on the just compensation awarded to her by the court be computed at 12% per annum as allegedly "authorized under and by virtue of Circular No. 416 of the Central Bank issued pursuant to Presidential Decree No. 116 and in a decision of the Supreme Court that legal interest allowed in the judgment of the courts, in the absence of express contract, shall be computed at 12% per annum." [Brief for Respondents, p. 3]. On February 11, 1981, the lower court granted the said motion allowing 12% interest per annum. [Annex L, Petition]. Subsequently, the other private respondents filed motions also praying that the legal interest on the just compensation awarded to them be computed at 12% per annum, on the basis of which the lower court issued on March 10, 1981 and August 28, 1981 orders bearing similar import. Petitioner moved for a reconsideration of the lower court's last order dated August 28,

1981, alleging that the main decision had already become final and executory with its compliance of depositing the sums of money as just compensation for the lands condemned, with legal interest at 6% per annum; that the said main decision can no longer be modified or changed by the lower court; and that Presidential Decree No. 116 is not applicable to this case because it is Art. 2209 of the Civil Code which applies. On January 25, 1982, the lower court denied petitioner's, motion for reconsideration, stating that the rate of interest at the time of the promulgation of the June 15, 1981 decision is that prescribed by Central Bank Circular No. 416 issued pursuant to Presidential Decree No. 116, which is 12% per annum, and that it did not modify or change but merely amplified its order of August 28, 1981 in the determination of the legal interest. Petitioner brings the case to Us for a determination of which legal interest is applicable to the transaction in question. Central Bank Circular No. 416 reads: By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended, otherwise known as the "Usury Law," the Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be twelve per cent (12%) per annum. It is clear from the foregoing provision that the Central Bank Circular applies only to loan or forbearance of money, goods or credits. This has already been settled in several cases decided by this Court. Private respondents, however, take exception to the inclusion of the term "judgments" in the said Circular, claiming that such term refers to any judgment directing the payment of legal interest, which term includes the questioned judgment of the lower court in the case at bar. Private respondents' contention is bereft of merit. The term "judgments" as used in Section 1 of the Usury Law, as well as in Central Bank Circular No. 416, should be interpreted to mean only judgments involving loan or forbearance of money, goods or credits, following the principle of ejusdem generis. Under this doctrine, where general terms follow the designation of particular things or classes of persons or subjects, the general term will be construed to comprehend those things or persons of the same class or of the same nature as those specifically enumerated [Crawford, Statutory Construction, p. 191; Go Tiaco vs. Union Ins. Society of Canton, 40 Phil. 40; Mutuc vs. COMELEC, 36 SCRA 228]. The purpose of the rule on ejusdem generis is to give effect to both the particular and general words, by treating the particular words as indicating the class and the general words as including all that is embraced in said class, although not specifically named by the particular words. This is justified on the ground that if the lawmaking body intended the general terms to be used in their unrestricted sense, it would have not made an enumeration of particular subjects but would have used only general terms [2 Sutherland, Statutory Construction, 3rd ed., pp. 395-400]. Applying the said rule on statutory construction to Central Bank Circular No. 416, the general term "judgments" can refer only to judgments in cases involving loans or forbearance of any money, goods or credits. As significantly laid down by this Court in the case of Reformina vs. Tomol, 139 SCRA 260: The judgments spoken of and referred to are judgments in litigation involving loans or forbearance of any money, goods or credits. Any other kind of monetary judgment which has nothing to do with, nor involving loans or forbearance of any money, goods or credits

does not fall within the coverage of the said law for it is not within the ambit of the authority granted to the Central Bank. The Monetary Board may not tread on forbidden grounds. It cannot rewrite other laws. That function is vested solely with the legislative authority. It is axiomatic in legal hermeneutics that statutes should be construed as a whole and not as a series of disconnected articles and phrases. In the absence of a clear contrary intention, words and phrases in statutes should not be interpreted in isolation from one another. A word or phrase in a statute is always used in association with other words or phrases and its meaning may, thus, be modified or restricted by the latter. Obviously, therefore, Art. 2209 of the Civil Code, and not Central Bank Circular No. 416, is the law applicable to the case at bar. Said law reads: Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs a delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six percent per annum. The Central Bank circular applies only to loan or forbearance of money, goods or credits and to judgments involving such loan or forbearance of money, goods or credits. This is evident not only from said circular but also from Presidential Decree No. 116, which amended Act No. 2655, otherwise known as the Usury Law. On the other hand, Art. 2209 of the Civil Code applies to transactions requiring the payment of indemnities as damages, in connection with any delay in the performance of the obligation arising therefrom other than those covering loan or forbearance of money, goods or credits. In the case at bar, the transaction involved is clearly not a loan or forbearance of money, goods or credits but expropriation of certain parcels of land for a public purpose, the payment of which is without stipulation regarding interest, and the interest adjudged by the trial court is in the nature of indemnity for damages. The legal interest required to be paid on the amount of just compensation for the properties expropriated is manifestly in the form of indemnity for damages for the delay in the payment thereof. Therefore, since the kind of interest involved in the joint judgment of the lower court sought to be enforced in this case is interest by way of damages, and not by way of earnings from loans, etc. Art. 2209 of the Civil Code shall apply. As for private respondents' argument that Central Bank Circular No. 416 impliedly repealed or modified Art. 2209 of the Civil Code, suffice it to state that repeals or even amendments by implication are not favored if two laws can be fairly reconciled. The Courts are slow to hold that one statute has repealed another by implication, and they will not make such an adjudication if they can refrain from doing so, or if they can arrive at another result by any construction which is just and reasonable. Besides, the courts will not enlarge the meaning of one act in order to decide that it repeals another by implication, nor will they adopt an interpretation leading to an adjudication of repeal by implication unless it is inevitable and a clear and explicit reason therefor can be adduced. [82 C.J.S. 479-486]. In this case, Central Bank Circular No. 416 and Art. 2209 of the Civil Code contemplate different situations and apply to different transactions. In transactions involving loan or forbearance of money, goods or credits, as well as judgments relating to such loan or forbearance of money, goods or credits, the Central Bank circular applies. It is only in such transactions or judgments where the Presidential Decree allowed the Monetary Board to dip its fingers into. On the other hand, in cases requiring the payment of indemnities as damages, in connection with any delay in the performance of an obligation other than those involving loan or forbearance of money, goods or credits, Art. 2209 of the Civil Code applies. For the Court, this is the most fair, reasonable, and logical interpretation of the two laws. We do not see any conflict between Central Bank Circular No. 416 and Art. 2209 of the Civil Code or any reason to hold that the former has repealed the latter by

implication. WHEREFORE, the petition is granted. The Orders promulgated on February 11, 1981, March 10, 1981, August 28, 1981 and January 25, 1982 [as to the recomputation of interest at 12% per annum] are annulled and set aside. It is hereby declared that the computation of legal interest at 6% per annum is the correct and valid legal interest allowed in payments of just compensation for lands expropriated for public use to herein private respondents by the Government through the National Power Corporation. The injunction heretofore granted is hereby made permanent. No costs.

Case: Republic v. Salem Investment Corp., G.R. 137769 23 June 2000

REPUBLIC OF THE PHILIPPINES, plaintiff-appellee, vs. SALEM INVESTMENT CORPORATION, MARIA DEL CARMEN ROXAS DE ELIZALDE, CONCEPCION CABARRUS VDA. DE SANTOS, defendants-appellees. MILAGROS AND INOCENTES DE LA RAMA, petitioners, ALFREDO GUERRERO, respondent. DECISION MENDOZA, J.: The main petition in this case is for determination of just compensation for the expropriation of lands under B.P. Blg. 340. Alfredo Guerrero intervened in this proceeding arguing that, instead of the De la Ramas, he should receive the just compensation for the subject land. The trial court and the Court of Appeals declared him the rightful recipient of the amount. This is an appeal from the decision[1] of the Court of Appeals. We affirm. The facts are as follows: On February 17, 1983, Batas Pambansa Blg. 340 was passed authorizing the expropriation of parcels of lands in the names of defendants in this case, including a portion of the land, consisting of 1,380 square meters, belonging to Milagros and Inocentes De la Rama covered by TCT No. 16213. On December 14, 1988, or five years thereafter, Milagros and Inocentes De la Rama entered into a contract[2] with intervenor Alfredo Guerrero whereby the De la Ramas agreed to sell to Guerrero the entire property covered by TCT No. 16213, consisting of 4,075 square meters for the amount of P11,800,000.00. The De la Ramas received the sum of P2,200,000.00 as partial payment of the purchase price, the balance thereof to be paid upon release of the title by the Philippine Veterans Bank. On November 3, 1989, Guerrero filed in the Regional Trial Court in Pasay City a complaint for specific performance (Civil Case No. 6974-P) to compel the De la Ramas to proceed with the sale. On July 10, 1990, while this case for specific performance was pending, the Republic of the Philippines filed the present case (Civil Case No. 7327) for expropriation pursuant to B.P. Blg. 340. [3] Among the defendants named in the complaint were Milagros and Inocentes De la Rama as registered owners of Lot 834, a portion of which (Lot 834-A) was part of the expropriated property. Upon the deposit of P12,970,350.00 representing 10 percent of the approximate market value of the subject lands, a writ of possession[4] was issued on August 29, 1990 in favor of the government. On May 2, 1991, Guerrero filed a motion for intervention[5] alleging that the De la Ramas had agreed to sell to him the entire Lot 834 (TCT No. 16213) on December 14, 1988 and that a case for

specific performance had been filed by him against the De la Ramas. On September 9, 1991, based on the report of the committee on appraisers appointed by the court and the submissions of defendants, the trial court approved payment to the De la Ramas at the rate of P23,976.00 per square meter for the taking of 920 square meters out of the 1,380 square meters to be expropriated under B.P. Blg. 340.[6] Meanwhile, on September 18, 1991, the trial court rendered a decision in the case for specific performance (Civil Case No. 6974-P)[7] upholding the validity of the contract to sell and ordering the De la Ramas to execute the corresponding deed of sale covering the subject property in favor of Guerrero. The De la Ramas appealed to the Court of Appeals (CA-G.R. No. CV-35116) but their petition was dismissed on July 28, 1992. They tried to appeal to this Court (G.R. No. 106488) but again they failed in their bid as their petition for review was denied on December 7, 1992. Meanwhile, on October 2, 1991, Guerrero filed an Omnibus Motion[8] praying that the just compensation for the land be deposited in court pursuant to Rule 67, 9 of the Rules of Court. As his motion for intervention and omnibus motion had not yet been resolved, Guerrero filed with the Court of Appeals a petition for mandamus, certiorari, and injunction with temporary restraining order[9] (C.A.-G.R. SP No. 28311) to enjoin the Republic from releasing or paying to the De la Ramas any amount corresponding to the payment of the expropriated property and to compel the trial court to resolve his two motions. On January 12, 1993, the Court of Appeals rendered a decision granting the writ of mandamus.[10] Nonetheless, the De la Ramas filed on March 17, 1993 a Motion for Authority to Withdraw[11] the deposit made by the Republic in 1991. This motion was denied as the trial court, on May 7, 1993, allowed the intervention of Guerrero and ordered the Republic to deposit the amount of just compensation with the Clerk of Court of RTC, Pasay City.[12] On June 16, 1993, the De la Ramas filed a Motion for Execution[13] again praying that the courts order dated September 9, 1991, approving the recommendation of the appraisal committee, be enforced. This was duly opposed by Guerrero.[14] On June 22, 1993, the trial court denied the motion of the De la Ramas holding that there had been a change in the situation of the parties, therefore, making the execution of the September 9, 1991 Order inequitable, impossible, or unjust.[15] As if to further delay the proceedings of this case, the De la Ramas then filed an Omnibus Motion seeking clarification of the September 18, 1991 decision of the trial court in the case for specific performance, upholding the validity of the contract to sell, insofar as the area covered by the contract was concerned, and asking that a restraining order be issued until this motion was granted. In its order dated October 7, 1993, the trial court clarified that the area of land covered by the contract to sell included the portion expropriated by the Republic. It stated: WHEREFORE, by way of clarification, the court holds that the transfer of title to the plaintiff under the Contract to Sell dated December 14, 1988 covers the entire Lot 834 consisting of 4,075 square meters (including the expropriated portion); that this change of owner over the entire property is necessarily junior or subject to the superior rights of the REPUBLIC over the expropriated portion (the metes and bounds of which are clearly defined in Section 1 6 of B.P. Blg. 340); that the Contract to Sell dated December 14, 1988 executed by the parties is a valid document that authorizes the plaintiff to step into the shoes of the defendants in relation to the property covered by TCT No. 16213; and that the transfer shall be free from all liens and encumbrances except for the expropriated portion of 1,380 square

meters.[16] The decision in the action for specific performance in Civil Case No. 6974-P having become final, an order of execution[17] was issued by the Pasay City RTC, and as a result of which, a deed of absolute sale[18] was executed by the Branch Clerk of Court on March 8, 1994 in favor of Guerrero upon payment by him of the sum of P8,808,000.00 on January 11, 1994 and the further sum of P1,608,900.00 on February 1, 1994 as full payment for the balance of the purchase price under the contract to sell of December 14, 1988. The entire amount was withdrawn and duly received by the De la Ramas.[19] Thereafter, the De la Ramas sought the nullification of the June 22, 1993 order of the trial court in this case, denying their motion for execution of the order approving the recommendation of the appraisal committee, by filing a petition for certiorari and mandamus in the Court of Appeals. This petition was, however, dismissed in a decision dated July 29, 1994 of the appellate court.[20] On April 5, 1995, the Pasay City Regional Trial Court, Branch 111, declared Guerrero the rightful owner of the 920-square meter expropriated property and ordered payment to him of just compensation for the taking of the land. The dispositive portion of its decision reads: WHEREFORE, respondent-intervenor Alfredo Guerrero is hereby declared as the rightful person entitled to receive the just compensation of the 920-square meter portion of the property described in TCT No. 16213 of the Register of Deeds of Pasay City and ordering the Philippine National Bank to release and deliver to Uniland Realty and Development Corporation, the assignee of Guerrero, the amount of P20,000,000.00 representing the deposit made by the plaintiff through the Department of Public Works and Highways in the Philippine National Bank, Escolta Branch with the check solely payable to said Uniland Realty and Development Corporation, as assignee of Alfredo Guerrero.[21] This decision was subsequently affirmed by the Court of Appeals.[22] Hence, this petition. The De la Ramas contend: I. THE COURT OF APPEALS WRONGLY INTERPRETED B.P. NO. 340 BY HOLDING THAT BATAS PAMBANSA BLG. 340 MERELY AUTHORIZED THE EXPROPRIATION OF THE LANDS OF THE DEFENDANTS, INCLUDING THAT PORTION BELONGING TO THE HEREIN PETITIONERS DE LA RAMAS COVERED BY TCT NO. 16213. II. THE COURT OF APPEALS WRONGLY INTERPRETED THE CONTRACT TO SELL BY HOLDING THAT THE PETITIONERS DE LA RAMAS HAD CONVEYED TO THE RESPONDENT GUERRERO THE WHOLE PROPERTY COVERED BY TCT NO. 16213, INCLUDING THE EXPROPRIATED AREA. III.THE HONORABLE COURT OF APPEALS WRONGLY DECLARED THAT THE PETITIONERS DE LA RAMAS COULD STILL SELL IN 1988 THEIR PROPERTY AS TITLE THERETO HAD NOT YET PASSED TO THE GOVERNMENT IN 1983. IV.THE COURT OF APPEALS GRAVELY ERRED IN WRONGLY INTERPRETING THE CONTRACT TO SELL, BY HOLDING THAT PETITIONERS DE LA RAMAS HAD CONVEYED TO THE RESPONDENT GUERRERO THE RIGHT TO RECEIVE THE JUST COMPENSATION FOR THE EXPROPRIATED AREA.

V. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE RIGHT TO RECEIVE THE JUST COMPENSATION FOR THE EXPROPRIATED AREA BECAME VESTED UPON THE RESPONDENT GUERRERO THROUGH SUBROGATION. VI.THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE RESPONDENT GUERRERO HAD PAID TO PETITIONERS RAMAS THE FULL PURCHASE PRICE OF P11,800,00.00 STIPULATED IN THE CONTRACT TO SELL OF 14 DECEMBER 1988.[23] As already stated, the De la Ramas and Guerrero entered into a contract to sell with respect to Lot 834. This lot has an area of 4,075 square meters. This contract was executed on December 14, 1988, after B.P. Blg. 340 was passed authorizing the expropriation of a portion of the land, consisting of 1,380 square meters, of the De la Ramas. The only issue in this case is who, between the De la Ramas and Guerrero, is/are entitled to receive payment of just compensation for the taking of 920 square meters of the land in question? The De la Ramas claim that they should receive the amount of just compensation because when they agreed to sell Lot 834 in 1988 to Guerrero, it did not include the portion expropriated by the Republic since, at that time, such portion had been expropriated by the government by virtue of B.P. Blg. 340, which took effect on February 17, 1983. They state: In 1988, the petitioners Ramas could no longer agree to sell to another person the expropriated property itself. For one thing, the property was already expropriated and petitioners Ramas for not objecting in effect conveyed the same to the Government. Secondly, the physical and juridical possession of the property was already in the Government. Thirdly, the equitable and beneficial title over the property was already vested in the Government, and therefore the property itself was already outside the commerce of man. As a matter of fact, the property was already part of a Government infrastructure.[24] On the other hand, Alfredo Guerrero argues that the title to the expropriated portion of Lot 834 did not immediately pass to the government upon the enactment of B.P. Blg. 340 in 1983, as payment of just compensation was yet to be made before ownership of the land was transferred to the government. As a result, petitioners still owned the entire Lot 834 at the time they agreed to sell it to Guerrero. Therefore, since Guerrero obtained ownership of Lot 834, including the 920 square meters expropriated by the government, he has the right to receive the just compensation over the said property. We find the De la Ramas contention without merit. We hold that Guerrero is entitled to receive payment of just compensation for the taking of the land. The power of eminent domain The power of eminent domain is an inherent power of the State. No constitutional conferment is necessary to vest it in the State. The constitutional provision on eminent domain, Art. III, 9, provides a limitation rather than a basis for the exercise of such power by the government. Thus, it states that "Private property shall not be taken for public use without just compensation." Expropriation may be initiated by court action or by legislation.[25] In both instances, just compensation is determined by the courts.[26] The expropriation of lands consists of two stages. As explained in Municipality of Bian v. Garcia:
[27]

The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint". . . . The second phase of the eminent domain action is concerned with the determination by the court of "the just compensation for the property sought to be taken." This is done by the court with the assistance of not more than three (3) commissioners. . . . It is only upon the completion of these two stages that expropriation is said to have been completed. Moreover, it is only upon payment of just compensation that title over the property passes to the government.[28] Therefore, until the action for expropriation has been completed and terminated, ownership over the property being expropriated remains with the registered owner. Consequently, the latter can exercise all rights pertaining to an owner, including the right to dispose of his property, subject to the power of the State ultimately to acquire it through expropriation. In the case at hand, the first stage of expropriation was completed when B.P. Blg. 340 was enacted providing for the expropriation of 1,380 square meters of the land in question. The constitutionality of this law was upheld in the case of Republic v. De Knecht.[29] In 1990, the government commenced the second stage of expropriation through the filing of a petition for the determination of just compensation. This stage was not completed, however, because of the intervention of Guerrero which gave rise to the question of ownership of the subject land. Therefore, the title to the expropriated property of the De la Ramas remained with them and did not at that point pass to the government. The De la Ramas are mistaken in arguing that the two stages of expropriation cited above only apply to judicial, and not to legislative, expropriation. Although Congress has the power to determine what land to take, it can not do so arbitrarily. Judicial determination of the propriety of the exercise of the power, for instance, in view of allegations of partiality and prejudice by those adversely affected,[30] and the just compensation for the subject property is provided in our constitutional system. We see no point in distinguishing between judicial and legislative expropriation as far as the two stages mentioned above are concerned. Both involve these stages and in both the process is not completed until payment of just compensation is made. The Court of Appeals was correct in saying that B.P. Blg. 340 did not effectively expropriate the land of the De la Ramas. As a matter of fact, it merely commenced the expropriation of the subject property. Thus, in 1988, the De la Ramas still had authority to transfer ownership of their land and convey all rights, including the right to receive just compensation, to Guerrero. The Contract to Sell and the Deed of Absolute Sale The contract to sell between the De la Ramas and Guerrero, executed on December 14, 1988, reads: CONTRACT TO SELL KNOW ALL MEN BY THESE PRESENTS: This CONTRACT is made and executed by and between: MILAGROS DE LA RAMA and INOCENTES DE LA RAMA, of legal age, both single, Filipinos Citizen and with residence and postal address at 2838 F.B. Harrison

St., Pasay City, Metro Manila, hereinafter referred to as the SELLERS. - and ALFREDO S. GUERRERO, of legal age, Filipino, married to SUSANA C. PASCUAL and with residence and postal address at No. 17 Mangyan, La Vista, Quezon City, hereinafter referred to as the BUYER. WITNESSETH: WHEREAS, the SELLERS are the registered owners of a parcel of land consisting of 4,075 square meters together with all the improvements thereon situated at 2838 F.B. Harrison St., Pasay City, covered by Transfer Certificate of Title No. 16213 of the Registry of Deeds of Pasay City and more particularly described as follows: A PARCEL OF LAND (Lot 834 of the Cadastral Survey of Pasay, L.R.C. Cad. Rec. No.), situated in the City of Pasay. Bounded on the N., along line 1-2 by Lot 835; and along line 2-3 by Lot 836, on the NE., and SE., along lines 3-4-5 by Lot 833, all of Pasay Cadastre; and on the SW., along lines 5-6-1 by Calle F.B. Harrison. Beginning at a point marked "1" on plan, being N. 3 deg. 50E., 100.44 m. from B.L.L.M. 5, Pasay Cadastre; thence N. 84 deg. 19E., 73.79 m. to point 2; thence N. 84 deg. 19E., 14.47 m. to point 3; thence S. 93 deg. 11E., 45.69 m. to point 4; thence S. 33 deg. 10W., 87.39 m. to point 5; thence N. 10 deg. 46W., 11.82 m. to point 6; thence N. 10 deg. 46W., 35.70 m. to point of beginning; containing an area of FOUR THOUSAND AND SEVENTY FIVE (4,075) SQUARE METERS. All points referred to are indicated on the plan and marked on the ground by Old Points; bearing true date of the cadastral survey, Oct., 1928 to Nov., 1930. WHEREAS, the SELLERS offer to sell and the BUYER agrees to buy the abovedescribed real property; NOW, THEREFORE, for and in consideration of the amount of ELEVEN MILLION EIGHT HUNDRED THOUSAND PESOS (P11,800.000.00) the parties hereby agree to enter unto the Contract subject to such terms and conditions as follows: 1. Upon execution of this Contract, the BUYER shall pay the SELLERS the sum of TWO MILLION TWO HUNDRED THOUSAND PESOS (P2,200,000.00) it being understood and agreed that this payment shall be for the purpose of liquidating in full the mortgage indebtedness and affecting the redemption of the property subject of the sale as annotated at the back of the title; 2. The balance of EIGHT MILLION EIGHT HUNDRED THOUSAND PESOS (P8,800,000.00) shall be paid by the BUYER upon release of the title by Phil. Veterans Bank and execution of the Deed of Absolute Sale; 3. The amount of P800,000.00 shall be paid by the BUYER upon payment of Capital Gains Tax and documentary sales stamp by the SELLERS and their vacation of the premises. 4. All existing improvements shall be assigned to the BUYER; 5. The SELLERS shall settle all realty taxes up to the end of 1988, water and electric bills;

6. The SELLERS shall pay three percent (3%) of the total consideration as brokers commission to be computed in the purchase price of P11,000,000.00; 7. It is hereby agreed and covenanted and stipulated by and between the parties hereto that the SELLERS shall execute and deliver to the BUYER a formal Absolute Deed of Sale free from all liens and encumbrances; 8. That the SELLERS shall vacate the premises and or deliver the physical possession of the property within thirty (30) days from the date of sale, that is upon complete payment by the BUYER of the agreed purchase price and execution of Deed of Sale; 9. That the execution of all legal documents in connection with this sale transaction shall be done thru SELLERS legal counsel; 10. The BUYER shall assume payment of transfer and registration expenses. IN WITNESS WHEREOF, the parties have hereunto set their hands this 14th day of December 1988 at Manila, Metro Manila.[31] The land, as described above in the Contract to Sell, includes the land expropriated under B.P. Blg. 340, to wit: 6. A parcel of land (a portion of Lot No. 834 of the Cadastral Survey of Pasay, Cadastral Case No. 23, G.L.R.O. Cadastral Record No. 1368), situated in the City of Pasay, bounded on the southeast, along lines 1-2-3 by Lot No. 833, Pasay Cadastre; and on the southwest, along lines 3-4-5 by Calle F.B. Harrison; and on the north, points 5-17-17-1 by the remaining portion of Lot 834; beginning at point marked "1" on plan, being S. 32 deg. 17 44"E., 267.187 meters from BLLM No. 5, Pasay Cadastre; thence S.9 deg. 11E., 11.579 m. to point "2"; thence S.82 deg. 10W., 87.390 m. to point "3"; thence N. 10 deg. 45 58"W., 11.82 m. to point "4"; thence N. 10 deg. 46 W., 15,568.4 m. to point "5"; thence S.15 deg. 37 27"E., 3.287 m. to point "6"; thence S.34 deg.. 3227"E., 3.287 m. to point "7"; thence S. 53 deg. 2650"E., 3.287 m. to point "8"; thence S. 72 deg. 2251"E., 3.287 m. to point "9"; thence N. 88 deg. 4032"E., 3.287 m. to point "10"; thence N. 72 deg. 0053"E., 6.480 m. to point "11"; thence N. 84 deg. 55 05"E., 10.375 m. to point "12"; thence N. 85 deg. 3814"E., 10.375 m. to point "13"; thence N. 86 deg. 21 10"E., 10.375 m. to point "14"; thence N. 87 deg. 04 18"E., 10.375 m. to point "15"; thence N. 87 deg. 97 06"E., 10.375 m. to point "16"; thence N. 88 deg. 3011"E., 10.375 m. to point "17"; thence N. 89 deg. 1256"E., 9.422 m. to the point of beginning, containing an area of one thousand three hundred eighty square meters (1,380.00 Sq.M.), more or less.[32] As the trial court in the case for specific performance ruled, the contract to sell covered the entire Lot 834, including the expropriated area, which was then owned by the De la Ramas. It is true that the contract to sell did not convey to Guerrero the subject parcel of land described therein. However, it created an obligation on the part of the De la Ramas to convey the land, subject to the fulfillment of the suspensive conditions therein stated. The declaration of this contracts validity, which paved the way for the subsequent execution of the Deed of Absolute Sale on March 8, 1994, following the order of the Regional Trial Court for its execution, by the Clerk of Court, Branch 113, Pasay City, effectively conveyed ownership of said parcel of land to Guerrero. The contention that the Deed of Absolute Sale excluded the portion expropriated by the government is untenable. The Deed of Absolute Sale reads in pertinent parts:

That for and in consideration of the sum of ELEVEN MILLION PESOS (P11,000,000), Philippine Currency, paid by the VENDEE, the VENDORS, by these presents hereby SELL, TRANSFER, CONVEY and ASSIGN, unto the herein VENDEE, his heirs, successors-in-interest and assigns, by way of absolute sale, a parcel of land located in 2838 F.B. Harrison Street, Pasay City, formerly covered by Transfer Certificate of Title No. 16213 of the land records of Pasay City, presently covered by the new Transfer Certificate of Title No. 132995, together with all improvements thereon, free from all liens and encumbrances whatsoever except over a portion equal to one thousand three hundred eighty (1,380) square meters expropriated by the Republic of the Philippines under and by virtue of Batas Pambansa Blg. 340 which took effect on February 17, 1983, the technical description of which is found therein, and which Lot 834 in its entirety is more particularly described as follows: A PARCEL OF LAND (Lot 834 of the Cadastral Survey of Pasay, L.R.C. Cad. Rec No. ), situated in the City of Pasay. Bounded on the N. along line 1-2 by Lot 835, and along line 2-3 by Lot 836; on the NE., and SE., along lines 3-4-5 by Lot 833; all of Pasay Cadastre; and on the SW., along lines 5-6-1 by Calle F.B. Harrison. Beginning at a point marked "1" on plan, being N. 3 deg. 50E., 100.44 from B.I.I.M. 5; Pasay Cadastre; thence N. 84 deg. 19E., 73.79 m. to point 2; thence N. 84 deg. 19E., 14.47 m. to point 3; thence S. 9 deg. 11E., 45.69 m. to point 4; thence S.53 deg. 10W., 87.39 m. to point 5; thence N. 10 deg. 46W., 11.82 m. to point 6; thence N. 10 deg. 46W., 35. 70 m. to point of beginning; containing an area of FOUR THOUSAND AND SEVENTY FIVE (4,075) SQUARE METERS. All points referred to are indicated on the plan and are marked on the ground by Old Points; bearing true date of the Cadastral Survey, Oct. 1928 to Nov. 1, 1930.[33] The underscored phrase does not say that the expropriated portion of the lot was excluded from the sale. Rather, it states that the entire property, consisting of 4,075 square meters, was being sold free from all liens and encumbrances except the lien in favor of the government over the portion being expropriated by it. Stated in another way, Guerrero was buying the entire property free from all claims of third persons except those of the government. Evidently, Lot 834 was conveyed in 1994 to Guerrero by virtue of the Deed of Absolute Sale. This contract was registered in the Register of Deeds and, accordingly, a new transfer certificate of title was issued to Guerrero.[34] Pursuant thereto, and by virtue of subrogation, the latter became the rightful owner entitled to receive the just compensation from the Republic. The De la Ramas make much of the fact that ownership of the land was transferred to the government because the equitable and the beneficial title was already acquired by it in 1983, leaving them with only the naked title. However, as this Court held in Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian Reform:[35] The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. Thus: . . . although the right to expropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains in the owner until payment is actually made. (Emphasis supplied).

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does not pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, it was held that "actual payment to the owner of the condemned property was a condition precedent to the investment of the title to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, the Court of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the State until the payment of the compensation although the authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that "both on principle and authority the rule is . . . that the right to enter on and use the property is complete, as soon as the property is actually appropriated under the authority of law for a public use, but that the title does not pass from the owner without his consent, until just compensation has been made to him." The amount paid by Guerrero Lastly, the De la Ramas contend that Guerrero only paid P7,417,000.00 and not P8,800,000.00 as stipulated in the contract to sell. However, Guerrero explained in his comment in this case: In making such misleading allegations, petitioners withheld the information that on January 25, 1994, Branch 114 of the Pasay City Regional Trial Court had issued an order which explained very clearly why the sum of P7,417,000.00 deposited by Guerrero constitute full payment of the agreed price, viz: Plaintiffs motion is meritorious. The decision dated September 18, 1991 rendered in this case has long become final and executory. Paragraph 4 of the dispositive portion of said decision reads as follows: 4. Ordering defendants Milagros dela Rama and Inocentes dela Rama to execute the corresponding deed of sale conveying the subject property, free from all liens and encumbrances in favor of the plaintiff upon payment of the latter of his balance of P8,800,000.00: .... 6. Ordering both defendants, jointly and severally, to pay the plaintiff the following: a.....the sum of P500,000.00 by way of moral damages; b.....the sum of P200,000.00 by way of exemplary damages; c.....the sum of P100,000.00 by way of attorneys fees; d.....legal interest of the amount of P2,200,000.00 from August 2, 1989 until the deed of absolute sale is executed in favor of the plaintiff; The plaintiff [Alfredo Guerrero] is therefore entitled to collect from the defendants [Milagros and Inocentes de la Rama] the sum of P800,000.00 in damages and attorneys fees, and interest at the legal rate. The earlier computation of the courts Branch Sheriff Edilberto Santiago is wrong. The legal rate of interest for damages, and even for

loans where interest was not stipulated, is 6% per annum (Art. 2209, Civil Code). The rate of 12% per annum was established by the Monetary Board when, under the power vested in it by P.D. 116 to amend Act No. 2655 (more commonly known as the Anti Usury Law), it amended Section 1 by increasing the rate of legal interest for loans, renewals and forbearance thereof, as well as for judgments, from 6% per annum to 12% per annum. Inasmuch as the Monetary Board may not repeal or amend the Civil Code, in the face of the apparent conflict between Art. 2209 and Act No. 2655 as amended, it is this courts persuasion that the ruling of the Monetary Board applies only to banks, financing companies, pawnshops and intermediaries performing quasi-banking functions, all of which are under the control and supervision of the Central Bank and of the Monetary Board. The interest rate on the P2,200,000.00 paid to the defendants by the plaintiff at the inception of the transactions should be only 6% per annum from August 2, 1989, and as of January 2, 1994 this amounts to the sum of P583,000.00 and P11,000.00 every month thereafter until the deed of absolute sale over the property subject matter of this case is executed. The amounts payable by the defendants to the plaintiff therefore stands at a total of P1,383,000.00. Offsetting this amount from the balance of P8,800,000.00, the plaintiff must still pay to the defendants the sum of P7,417,000.00. The plaintiff has already deposited with the Clerk of Court of this court the sum of P5,808,100.00 as of January 11, 1994; he should add to this the sum of P1,608,900.00.[36] The De la Ramas question this ruling of the lower court. They say: That Petitioners do not agree with the explanation of the lower Court, which held that the Petitioners are liable to pay legal interest on the initial payment of P2,200.000 that petitioners received under the Contract To Sell as part of the purchase price. Why should Petitioners pay legal interest on a sum of money that was payable to them and which they received as initial payment of the purchase price? This ruling is absurd and preposterous. It is a legal monstrosity.[37] Petitioners can no longer question a judgment which has already become final and executory. The order of the Regional Trial Court on the payment of legal interest was issued on September 18, 1991 in the case for specific performance against the De la Ramas (Civil Case No. 6974-P). Hence, they are already barred from questioning it now in this proceeding. Finally, we take note of the fact that the De la Ramas have withdrawn and appropriated for themselves the amount paid by Guerrero. This amount represented the purchase price of the entire 4,075 square meters of land, including the expropriated portion, which was the subject of their agreement. The payment, therefore, to them of the value of the expropriated portion would unjustly enrich them. WHEREFORE, the decision of the Court of Appeals is AFFIRMED.

Case: City of Manila v. Oscar Serrano, G.R. No. 142304, June 20, 2001

CITY OF MANILA, petitioner, vs. OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA, and ADELAIDA, all surnamed SERRANO, respondents. DECISION
MENDOZA, J.:

This is a petition for review on certiorari of the decision, dated November 16, 1999, and resolution, dated February 23, 2000, of the Court of Appeals reversing the order, dated December 15, 1998, of the Regional Trial Court, Branch 16, Manila and perpetually enjoining it from proceeding with petitioners complaint for eminent domain in Civil Case No. 94-72282. The facts are as follows: On December 21, 1993, the City Council of Manila enacted Ordinance No. 7833, authorizing the expropriation of certain properties in Manilas First District in Tondo, covered by TCT Nos. 70869, 105201, 105202, and 138273 of the Register of Deeds of Manila, which are to be sold and distributed to qualified occupants pursuant to the Land Use Development Program of the City of Manila. One of the properties sought to be expropriated, denominated as Lot 1-C, consists of 343.10 square meters. It is covered by TCT No. 138272 which was derived from TCT No. 70869 issued in the name of Feliza De Guia.[1] After her death, the estate of Feliza De Guia was settled among her heirs by virtue of a compromise agreement, which was duly approved by the Regional Trial Court, Branch 53, Manila in its decision, dated May 8, 1986.[2] In 1989, Alberto De Guia, one of the heirs of Feliza De Guia, died, as a result of which his estate, consisting of his share in the properties left by his mother, was partitioned among his heirs. Lot 1-C was assigned to Edgardo De Guia, one of the heirs of Alberto De Guia.[3] On April 15, 1994, Edgardo De Guia was issued TCT No. 215593, covering Lot 1-C.[4] On July 29, 1994, the said property was transferred to Lee Kuan Hui, in whose name TCT No. 217018 was issued.[5] The property was subsequently sold on January 24, 1996 to Demetria De Guia to whom TCT No. 226048 was issued.[6] On September 26, 1997, petitioner City of Manila filed an amended complaint for expropriation, docketed as Civil Case No. 94-72282, with the Regional Trial Court, Branch 16, Manila, against the supposed owners of the lots covered by TCT Nos. 70869 (including Lot 1-C), 105201, 105202, and 138273, which included herein respondents Oscar, Felicitas, Jose, Benjamin, Estelita, Leonora, Adelaida, all surnamed Serrano.[7] On November 12, 1997, respondents filed a consolidated answer, in which they alleged that their mother, the late Demetria De Guia, had acquired Lot 1-C from Lee Kian Hui; that they had been the bona fide occupants of the said parcel of land for more than 40 years; that the expropriation of Lot 1-C would result in their dislocation, it being the only residential land left to them by their deceased mother; and that the said lot was exempt from expropriation because dividing the said parcel of land among them would entitle each of them to only about 50 square meters of land. Respondents, therefore, prayed that judgment be rendered declaring Lot 1-C exempt from expropriation and ordering the cancellation of the notice annotated on the back of TCT No. 226048,[8] regarding the pendency of Civil Case No. 94-72282 for eminent domain filed by petitioner.[9]

Upon motion by petitioner, the trial court issued an order, dated October 9, 1998, directing petitioner to deposit the amount of P1,825,241.00 equivalent to the assessed value of the properties. [10] After petitioner had made the deposit, the trial court issued another order, dated December 15, 1998, directing the issuance of a writ of possession in favor of petitioner.[11] Respondents filed a petition for certiorari with the Court of Appeals, alleging that the expropriation of Lot 1-C would render respondents, who are actual occupants thereof, landless; that Lot 1-C is exempt from expropriation because R.A. No. 7279 provides that properties consisting of residential lands not exceeding 300 square meters in highly urbanized cities are exempt from expropriation; that respondents would only receive around 49 square meters each after the partition of Lot 1-C which consists of only 343.10 square meters; and that R.A. No. 7279 was not meant to deprive an owner of the entire residential land but only that in excess of 300 square meters.[12] On November 16, 1999, the Court of Appeals rendered a decision holding that Lot 1-C is not exempt from expropriation because it undeniably exceeds 300 square meters which is no longer considered a small property within the framework of R.A. No. 7279. However, it held that in accordance with the ruling in Filstream International Inc. v. Court of Appeals,[13] the other modes of acquisition of lands enumerated in 9-10 of the law must first be tried by the city government before it can resort to expropriation. As petitioner failed to show that it had done so, the Court of Appeals gave judgment for respondents and enjoined petitioner from expropriating Lot 1-C. The dispositive portion of its decision reads:
WHEREFORE, in view of all the foregoing, the instant petition is hereby GIVEN DUE COURSE and accordingly GRANTED. The Order, dated December 15, 1998, denying petitioners motion for reconsideration issued by respondent Regional Trial Court of Manila, Branch 16, in Civil Case No. 94-72282 is hereby REVERSED and SET ASIDE. Let a writ of injunction issue perpetually enjoining the same respondent court from proceeding with the complaint for eminent domain in Civil Case No. 94-72282.[14]

In its resolution, dated February 23, 2000, the Court of Appeals likewise denied two motions for reconsideration filed by petitioner.[15] Hence this petition. Petitioner contends that the Court of Appeals erred in
1) Giving due course to the Petition of the Serranos under Rule 65 notwithstanding its own declaration of the impropriety of the resort to the writ and filing thereof with the wrong appellate court; 2) Concluding that the Order of October 9, 1998 which authorizes the immediate entry of the City as the expropriating agency into the property sought to be expropriated upon the deposit of the provisionally fixed fair market value thereof as tantamount to condemnation of the property without prior showing of compliance with the acquisition of other lands enumerated in Sec. 9 of R.A. 7279 ergo a violation of due process to the Serranos by the doctrinaire application of FILSTREAM ruling and corrollarily, 3) In prohibiting permanently, by writ of injunction, the trial court from proceeding with a complaint for expropriation of the City in Civil Case No. 94-72282.[16]

We will deal with these contentions in the order they are presented. First. Petitioner contends that respondents remedy against the order of the trial court granting a writ of possession was not to file a petition for certiorari under Rule 65 but a petition for review under Rule 45 which should have been filed in the Supreme Court.[17] This contention has no merit. A petition for review under Rule 45 is a mode of appeal. Accordingly, it could not have been resorted to by respondents inasmuch as the order of the trial court granting a writ of possession was merely interlocutory from which no appeal could be taken.

Rule 45, 1 of the 1997 Rules of Civil Procedure applies only to final judgments or orders of the Court of Appeals, the Sandiganbayan, and the Regional Trial Court. On the other hand, a petition for certiorari is the suitable remedy in view of Rule 65, 1 which provides:
When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

Respondents petition before the Court of Appeals alleged that the trial court had acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing the order, dated December 15, 1998, resolving that Lot 1-C is not exempt from expropriation and ordering the issuance of the writ of possession in favor of petitioner.[18] Second. Petitioner faults the Court of Appeals for deciding issues not raised in the trial court, specifically the question of whether or not there was compliance with 9 and 10 of R.A. No. 7279. It argues that the sole defense set up by respondents in their petition before the Court of Appeals was that their property was exempted from expropriation because it comes within the purview of a small property as defined by R.A. No. 7279. Accordingly, the Court of Appeals should not have applied the doctrine laid down by this Court in the Filstream[19] case as such issue was not raised by respondents in their petition before the Court of Appeals. This contention likewise has no merit. In their petition before the Court of Appeals, respondents raised the following issues:
1. Whether or not the subject Lot 1-C with an area of 343.10 square meters covered by T.C.T. No. 226048 in the name of petitioners mother, the late Demetria [De Guia] Serrano, may be lawfully expropriated for the public purpose of providing landless occupants thereof homelots of their own under the land-for-the-landless program of respondent City of Manila. 2. Whether or not the expropriation of the said Lot 1-C by respondent City of Manila violates the equal protection clause of the Constitution, since petitioners, with the exception of petitioner Oscar G. Serrano, who are likewise landless are actual occupants hereof. 3. Whether or not Lot 1-C is or may be exempted from expropriation pursuant to R.A. 7279, otherwise known as the Urban Development and Housing Act of 1992.[20]

It is clear that respondents raised in issue the propriety of the expropriation of their property in connection with R.A. No. 7279. Although what was discussed at length in their petition before the Court of Appeals was whether or not the said property could be considered a small property within the purview of the exemption under the said law, the other provisions of the said law concerning expropriation proceedings need also be looked into to address the first issue raised by respondents and to determine whether or not expropriation of Lot 1-C was proper under the circumstances. The Court of Appeals properly considered relevant provisions of R.A. No. 7279 to determine the issues raised by respondents. Whether or not it correctly applied the doctrine laid down in Filstream in resolving the issues raised by respondents, however, is a different matter altogether, and this brings us to the next point. Third. Petitioner contends that the Court of Appeals erroneously presumed that Lot 1-C has been ordered condemned in its favor when the fact is that the order of the trial court, dated December 15, 1998, merely authorized the issuance of a writ of possession and petitioners entry

into the property pursuant to Rule 67, 2. At that stage, it was premature to determine whether the requirements of R.A. No. 7279, 9-10 have been complied with since no evidentiary hearing had yet been conducted by the trial court.[21] This contention is well taken. Rule 67, 2 provides:
Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government bank of the Republic of the Philippines payable on demand to the authorized government depositary. If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shall be fixed by the court. After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved and promptly submit a report thereof to the court with service of copies to the parties.

Thus, a writ of execution may be issued by a court upon the filing by the government of a complaint for expropriation sufficient in form and substance and upon deposit made by the government of the amount equivalent to the assessed value of the property subject to expropriation. Upon compliance with these requirements, the issuance of the writ of possession becomes ministerial.[22] In this case, these requirements were satisfied and, therefore, it became the ministerial duty of the trial court to issue the writ of possession. The Court of Appeals, however, ruled that petitioner failed to comply with the requirements laid down in 9-10 of R.A. No. 7279 and reiterated in the Filstream ruling. This is error. The ruling in Filstream was necessitated because an order of condemnation had already been issued by the trial court in that case. Thus, the judgment in that case had already become final. In this case, the trial court has not gone beyond the issuance of a writ of possession. Hearing is still to be held to determine whether or not petitioner indeed complied with the requirements provided in R.A. No. 7279. It is, therefore, premature at this stage of the proceedings to find that petitioner resorted to expropriation without first trying the other modes of acquisition enumerated in 10 of the law. R.A. No. 7279 in pertinent parts provide:
SEC. 9. Priorities in the Acquisition of Land.--- Lands for socialized housing shall be acquired in the following order: (a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including government-owned and controlled corporations and their subsidiaries; (b) Alienable lands of the public domain; (c) Unregistered or abandoned and idle lands; (d) Those within the declared Areas or Priority Development, Zonal Improvement Program sites, and Slum Improvement and Resettlement Program sites which have not yet been acquired; (e) Bagong Lipunan Improvement of Sites and Services or BLISS sites which have not yet been acquired; and

(f) Privately-owned lands. Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities mentioned in this section shall not apply. the local government units shall give budgetary priority to on-site development of government lands. SEC. 10. Modes for Land Acquisition.--- The modes of acquiring lands for purposes of this Act shall include, amount others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the Government, joint-venture agreement, negotiated purchase, and expropriation: Provided, however, That expropriation shall be resorted to only when other modes of acquisition have been exhausted: Provided, further, That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act: Provided, finally, That abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court. For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by the local government units, or by the National Housing Authority primarily through negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the land shall be given the right of first refusal.

Whether petitioner has complied with these provisions requires the presentation of evidence, although in its amended complaint petitioner did allege that it had complied with the requirements. [23] The determination of this question must await the hearing on the complaint for expropriation, particularly the hearing for the condemnation of the properties sought to be expropriated. Expropriation proceedings consists of two stages: first, condemnation of the property after it is determined that its acquisition will be for a public purpose or public use and, second, the determination of just compensation to be paid for the taking of private property to be made by the court with the assistance of not more than three commissioners.[24] WHEREFORE, the decision, dated November 16, 1999, and resolution, dated February 23, 2000, of the Court of Appeals are REVERSED and the order of the trial court, dated December 15, 1998, is REINSTATED. This case is REMANDED to the trial court for further proceedings.

Case: City of Baguio vs. Nawasa, 106 Phil.114 (1959)

City of Baguio vs. National Waterworks and Sewerage Authority [GR L-12032, 31 August 1959] En Banc, Bautista Angelo (J): 6 concur, 1 concurs in result Facts: The City of Baguio filed on 25 April 1956, in the Court of First Instance of Baguio, a complaint for declaratory relief against the National Waterworks and Sewerage Authority (NAWASA), a public corporationcreated by Republic Act 1383, contending that said Act does not include within its purview the BaguioWaterworks System; that assuming that it does, said Act is unconstitutional because it has the effect of depriving the City of the ownership, control and operation of said waterworks system without compensation andwithout due process of law, and that it is oppressive, unreasonable and unjust to plaintiff and other cities,municipalities and municipal districts similarly situated. On 22 May 1956, NAWASA filed a motion to dismiss.On 21 June 1956, the Court, acting on the motion to dismiss as well

as on the answer and rejoinder filed by both parties, denied the motion and ordered NAWASA to file its answer to the complaint. On 6 July 1956, NAWASA filed its answer reiterating and amplifying the grounds already advanced in its motion to dismiss. On14 August 1956, the parties submitted a written stipulation of facts and filed written memoranda. And after allowing the City to file a supplementary complaint, the Court on 5 November 1956, rendered decision holdingthat the waterworks system of the City of Baguio falls within the category of private property, ascontemplated by our Constitution and may not be expropriated without just compensation. NAWASA filed amotion for reconsideration, and upon its denial, it took the present appeal. Issue: Whether the Baguio Waterworks partakes of the nature of public property or private/patrimonial propertyof the City. Held: The Baguio Waterworks System is not like any public road, park, street or other public property held intrust by a municipal corporation for the benefit of the public but it is rather a property owned by the City in its proprietary character. While the cases may differ as to the public or private character of waterworks, the weightof authority as far as the legislature is concerned classes them as private affairs. (sec. 239, Vol. I, Revised,McQuillin Municipal Corporations, p. 239; Shrik vs. City of Lancaster, 313 Pa. 158, 169 Atl. 557). And in this jurisdiction, this Court has already expressed the view that a waterworks system is patrimonial property of thecity that has established it. (Mendoza vs. De Leon, 33 Phil. 509). And being owned by a municipal corporationin a proprietary character, waterworks cannot be taken away without observing the safeguards set by our Constitution for the protection of private property. The State may, in the interest of National welfare, transfer to public ownership any private enterprise upon payment of just compensation. At the same time, one has to bear in mind that no person can be deprived of his property except for public use and upon payment of justcompensation. Unless the City is given its due compensation, the City cannot be deprived of its property even if NAWASA desires to take over its administration in line with the spirit of the law (Republic Act 1383). The law,insofar as it expropriates the waterworks in question without providing for an effective payment of justcompensation, violates our Constitution.

Case: Zamboanga del Norte vs. City of Zamboanga, 22 SCRA 1334 (1968)
Province of Zamboanga del Norte vs Zamboanga City 22 SCRA 1334 Facts: Prior to its incorporation as a chartered city, theM u n i c i p a l i t y o f Zamboanga used to be thep ro v i n c i a l c a p i t a l o f t h e t h e n Z a m b o a n g a Province. On October 12, 1936, CommonwealthA c t 3 9 w a s a p p r o v e d c o n v e r t i n g t h e Municipality of Zamboanga into ZamboangaCity. Sec. 50 of the Act also provided that Buildings and properties which the provinceshall abandon upon the transfer of the capitalto another place will be acquired and paid forby the City of

Zamboanga at a price to be fixedby the Auditor General. T h e p r o p e r t i e s an d buildin gs re fe rre d toc o n s i s t e d o f 5 0 l o t s a n d s o m e b u i l d i n g s c o n s t r u c t e d t h e re o n , l o c a t e d i n t h e C i t y o f Zamboanga and covered individually by Torrenscertificates of title in the name of ZamboangaProvince. O n J u n e 6 , 1 9 5 2 , R e p u b l i c A c t 7 1 1 w a s approved dividing the province of Zamboangai n t o t w o ( 2 ) : Z a m b o a n g a d e l N o r t e a n d Z a m b o a n g a d e l S u r. P r o p e r t i e s a n d t h e obligations of the province of Zamboanga shallbe divided equitably between the Province of Z a m b o a n g a d e l N o r t e a n d t h e Pro v i n c e o f Zamboanga del Sur by the President of thePhilippines, upon the recommendation of theAuditor General.However, on June 17, 1961, Republic Act 3039w a s a p p r o v e d a m e n d i n g S e c . 5 0 o f Commonwealth Act 39 by providing that Allbuildings, properties and assets belonging tothe former province of Zamboanga and locatedw i t h i n t h e C i t y o f Z a m b o a n g a a r e h e r e b y transferred, free of charge, in favor of the saidCity of Zamboanga.

Issue: WON Zamboanga del Norte is deprived of itsprivate properties without due process and just compensation. Ruling: The fact that the 26 lots are registered strengthens the proposition that they are trulyprivate in nature. On the other hand, that the24 lots used for governmental purposes area l s o re g i s t e re d i s o f n o s i g n i f i c a n c e s i n c e registration cannot convert public property toprivate.Applying Art. 424 of NCC, all the properties inquestion, except the two (2) lots used as HighSchool playgrounds, could be considered asp a t r i m o n i a l p r o p e r t i e s o f t h e f o r m e r Zamboanga province. Even the capital site, thehospital and leprosarium sites, and the schoolsites will be considered patrimonial for they are not for public use. They would fall under thephrase "public works for public service"