G.R. No. 132922 April 21, 1998 TELECOMMUNICATIONS AND BROADCAST ATTORNEYS OF THE PHILIPPINES, INC.

and GMA NETWORK, INC., petitioners, vs. THE COMMISSION ON ELECTIONS, respondent. MENDOZA, J.: In Osmea v. COMELEC, G.R. No. 132231, decided March 31, 1998, 1 we upheld the validity of 11(b) of R.A. No. 6646 which prohibits the sale or donation of print space or air time for political ads, except to the Commission on Elections under 90, of B.P. No. 881, the Omnibus Election Code, with respect to print media, and 92, with respect to broadcast media. In the present case, we consider the validity of 92 of B.P. Blg. No. 881 against claims that the requirement that radio and television time be given free takes property without due process of law; that it violates the eminent domain clause of the Constitution which provides for the payment of just compensation; that it denies broadcast media the equal protection of the laws; and that, in any event, it violates the terms of the franchise of petitioner GMA Network, Inc. Petitioner Telecommunications and Broadcast Attorneys of the Philippines, Inc. is an organization of lawyers of radio and television broadcasting companies. They are suing as citizens, taxpayers, and registered voters. The other petitioner, GMA Network, Inc., operates radio and television broadcasting stations throughout the Philippines under a franchise granted by Congress. Petitioners challenge the validity of 92 on the ground (1) that it takes property without due process of law and without just compensation; (2) that it denies radio and television broadcast companies the equal protection of the laws; and (3) that it is in excess of the power given to the COMELEC to supervise or regulate the operation of media of communication or information during the period of election. The Question of Standing At the threshold of this suit is the question of standing of petitioner Telecommunications and Broadcast Attorneys of the Philippines, Inc. (TELEBAP). As already noted, its members assert an interest as lawyers of radio and television broadcasting companies and as citizens, taxpayers, and registered voters. In those cases 2 in which citizens were authorized to sue, this Court upheld their standing in view of the "transcendental importance" of the constitutional question raised which justified the granting of relief. In contrast, in the case at bar, as will presently be shown, petitioner's substantive claim is without merit. To the extent, therefore, that a party's standing is determined by the substantive merit of his case or preliminary estimate thereof, petitioner TELEBAP must be held to be without standing. Indeed, a citizen will be allowed to raise a constitutional question only when he can show that he has personally suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government; the injury fairly is fairly traceable to the challenged action; and the injury is likely to be redressed by a favorable action. 3 Members of petitioner have not shown that they have suffered harm as a result of the operation of 92 of B.P. Blg. 881. Nor do members of petitioner TELEBAP have an interest as registered voters since this case does not concern their right of suffrage. Their interest in 92 of B.P. Blg. 881 should be precisely in upholding its validity. Much less do they have an interest as taxpayers since this case does not involve the exercise by Congress of its taxing or spending power. 4 A party suing as a taxpayer must specifically show that he has a sufficient interest in

preventing the illegal expenditure of money raised by taxation and that he will sustain a direct injury as a result of the enforcement of the questioned statute. Nor indeed as a corporate entity does TELEBAP have standing to assert the rights of radio and television broadcasting companies. Standing jus tertii will be recognized only if it can be shown that the party suing has some substantial relation to the third party, or that the third party cannot assert his constitutional right, or that the eight of the third party will be diluted unless the party in court is allowed to espouse the third party's constitutional claim. None of these circumstances is here present. The mere fact that TELEBAP is composed of lawyers in the broadcast industry does not entitle them to bring this suit in their name as representatives of the affected companies. Nevertheless, we have decided to take this case since the other petitioner, GMA Network, Inc., appears to have the requisite standing to bring this constitutional challenge. Petitioner operates radio and television broadcast stations in the Philippines affected by the enforcement of 92 of B.P. Blg. 881 requiring radio and television broadcast companies to provide free air time to the COMELEC for the use of candidates for campaign and other political purposes. Petitioner claims that it suffered losses running to several million pesos in providing COMELEC Time in connection with the 1992 presidential election and the 1995 senatorial election and that it stands to suffer even more should it be required to do so again this year. Petitioner's allegation that it will suffer losses again because it is required to provide free air time is sufficient to give it standing to question the validity of 92. 5 Airing of COMELEC Time, a Reasonable Condition for Grant of Petitioner's Franchise As pointed out in our decision in Osmea v. COMELEC, 11(b) of R.A. No. 6646 and 90 and 92 of the B.P. Blg. 881 are part and parcel of a regulatory scheme designed to equalize the opportunity of candidates in an election in regard to the use of mass media for political campaigns. These statutory provisions state in relevant parts: R.A. No. 6646 Sec. 11. Prohibited Forms of Election Propaganda. In addition to the forms of election propaganda prohibited under Section 85 of Batas Pambansa Blg. 881, it shall be unlawful: xxx xxx xxx (b) for any newspapers, radio broadcasting or television station, or other mass media, or any person making use of the mass media to sell or to give free of charge print space or air time for campaign or other political purposes except to the Commission as provided under Section 90 and 92 of Batas Pambansa Blg. 881. Any mass media columnist, commentator, announcer or personality who is a candidate for any elective public office shall take a leave of absence from his work as such during the campaign period. B.P. Blg. 881, (Omnibus Election Code) Sec. 90. Comelec space. The Commission shall procure space in at least one newspaper of general circulation in every province or city; Provided, however, That in the absence of said newspaper, publication shall be done in any other magazine or periodical in said province or city, which shall be known as "Comelec Space" wherein candidates can announce their candidacy. Said space shall be allocated, free of charge, equally and impartially by the Commission among all candidates within the area in which the newspaper is circulated. (Sec. 45, 1978 EC).

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Sec. 92. Comelec time. The commission shall procure radio and television time to be known as "Comelec Time" which shall be allocated equally and impartially among the candidates within the area of coverage of all radio and television stations. For this purpose, the franchise of all radio broadcasting and television stations are hereby amended so as to provide radio or television time, free of charge, during the period of the campaign. (Sec. 46, 1978 EC) Thus, the law prohibits mass media from selling or donating print space and air time to the candidates and requires the COMELEC instead to procure print space and air time for allocation to the candidates. It will be noted that while 90 of B.P. Blg. 881 requires the COMELEC to procure print space which, as we have held, should be paid for, 92 states that air time shall be procured by the COMELEC free of charge. Petitioners contend that 92 of BP Blg. 881 violates the due process clause 6 and the eminent domain provision 7 of the Constitution by taking air time from radio and television broadcasting stations without payment of just compensation. Petitioners claim that the primary source of revenue of the radio and television stations is the sale of air time to advertisers and that to require these stations to provide free air time is to authorize a taking which is not "ade minimis temporary limitation or restraint upon the use of private property." According to petitioners, in 1992, the GMA Network, Inc. lost P22,498,560.00 in providing free air time of one (1) hour every morning from Mondays to Fridays and one (1) hour on Tuesdays and Thursday from 7:00 to 8:00 p.m. (prime time) and, in this year's elections, it stands to lose P58,980,850.00 in view of COMELEC'S requirement that radio and television stations provide at least 30 minutes of prime time daily for the COMELEC Time. 8 Petitioners' argument is without merit, All broadcasting, whether by radio or by television stations, is licensed by the government. Airwave frequencies have to be allocated as there are more individuals who want to broadcast than there are frequencies to assign. 9 A franchise is thus a privilege subject, among other things, to amended by Congress in accordance with the constitutional provision that "any such franchise or right granted . . . shall be subject to amendment, alteration or repeal by the Congress when the common good so requires." 10 The idea that broadcast stations may be required to provide COMELEC Time free of charge is not new. It goes back to the Election Code of 1971 (R.A. No. 6388), which provided: Sec. 49. Regulation of election propaganda through mass media. (a) The franchise of all radio broadcasting and television stations are hereby amended so as to require each such station to furnish free of charge, upon request of the Commission [on Elections], during the period of sixty days before the election not more than fifteen minutes of prime time once a week which shall be known as "Comelec Time" and which shall be used exclusively by the Commission to disseminate vital election information. Said "Comelec Time" shall be considered as part of the public service time said stations are required to furnish the Government for the dissemination of public information and education under their respective franchises or permits. The provision was carried over with slight modification by the 1978 Election Code (P.D. No. 1296), which provided: Sec. 46. COMELEC Time. The Commission [on Elections] shall procure radio and television time to be known as "COMELEC Time" which shall be allocated equally and impartially among the candidates within the area of coverage of said radio and television stations. For this purpose, the franchises of all radio broadcasting and television stations are hereby amended so as to require such stations to furnish the Commission radio or television time, free of charge, during the period of the campaign, at least once but not oftener than every other day. Substantially the same provision is now embodied in 92 of B.P. Blg. 881.

Indeed, provisions for COMELEC Tima have been made by amendment of the franchises of radio and television broadcast stations and, until the present case was brought, such provisions had not been thought of as taking property without just compensation. Art. XII, 11 of the Constitution authorizes the amendment of franchises for "the common good." What better measure can be conceived for the common good than one for free air time for the benefit not only of candidates but even more of the public, particularly the voters, so that they will be fully informed of the issues in an election? "[I]t is the right of the viewers and listeners, not the right of the broadcasters, which is paramount." 11 Nor indeed can there be any constitutional objection to the requirement that broadcast stations give free air time. Even in the United States, there are responsible scholars who believe that government controls on broadcast media can constitutionally be instituted to ensure diversity of views and attention to public affairs to further the system of free expression. For this purpose, broadcast stations may be required to give free air time to candidates in an election. 12 Thus, Professor Cass R. Sunstein of the University of Chicago Law School, in urging reforms in regulations affecting the broadcast industry, writes: Elections. We could do a lot to improve coverage of electoral campaigns. Most important, government should ensure free media time for candidates. Almost all European nations make such provisions; the United States does not. Perhaps government should pay for such time on its own. Perhaps broadcasters should have to offer it as a condition for receiving a license. Perhaps a commitment to provide free time would count in favor of the grant of a license in the first instance. Steps of this sort would simultaneously promote attention to public affairs and greater diversity of view. They would also help overcome the distorting effects of "soundbites" and the corrosive financial pressures faced by candidates in seeking time on the media. 13 In truth, radio and television broadcasting companies, which are given franchises, do not own the airwaves and frequencies through which they transmit broadcast signals and images. They are merely given the temporary privilege of using them. Since a franchise is a mere privilege, the exercise of the privilege may reasonably be burdened with the performance by the grantee of some form of public service. Thus, in De Villata v. Stanley, 14 a regulation requiring interisland vessels licensed to engage in the interisland trade to carry mail and, for this purpose, to give advance notice to postal authorities of date and hour of sailings of vessels and of changes of sailing hours to enable them to tender mail for transportation at the last practicable hour prior to the vessel's departure, was held to be a reasonable condition for the state grant of license. Although the question of compensation for the carriage of mail was not in issue, the Court strongly implied that such service could be without compensation, as in fact under Spanish sovereignty the mail was carried free. 15 In Philippine Long Distance Telephone Company v. NTC, 16 the Court ordered the PLDT to allow the interconnection of its domestic telephone system with the international gateway facility of Eastern Telecom. The Court cited (1) the provisions of the legislative franchise allowing such interconnection; (2) the absence of any physical, technical, or economic basis for restricting the linking up of two separate telephone systems; and (3) the possibility of increase in the volume of international traffic and more efficient service, at more moderate cost, as a result of interconnection. Similarly, in the earlier case of PLDT v. NTC, 17 it was held: Such regulation of the use and ownership of telecommunications systems is in the exercise of the plenary police power of the State for the promotion of the general welfare. The 1987 Constitution recognizes the existence of that power when it provides: Sec. 6. The use of property bears a social function, and all economic agents shall contribute to the common good. Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have

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the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands (Article XII). The interconnection which has been required of PLDT is a form of "intervention" with property rights dictated by "the objective of government to promote the rapid expansion of telecommunications services in all areas of the Philippines, . . . to maximize the use of telecommunications facilities available, . . . in recognition of the vital role of communications in nation building . . . and to ensure that all users of the public telecommunications service have access to all other users of the service wherever they may be within the Philippines at an acceptable standard of service and at reasonable cost" (DOTC Circular No. 90-248). Undoubtedly, the encompassing objective is the common good. The NTC, as the regulatory agency of the State, merely exercised its delegated authority to regulate the use of telecommunications networks when it decreed interconnection. In the granting of the privilege to operate broadcast stations and thereafter supervising radio and television stations, the state spends considerable public funds in licensing and supervising such stations. 18 It would be strange if it cannot even require the licensees to render public service by giving free air time. Considerable effort is made in the dissent of Mr. Justice Panganiban to show that the production of television programs involves large expenditure and requires the use of equipment for which huge investments have to be made. The dissent cites the claim of GMA Network that the grant of free air time to the COMELEC for the duration of the 1998 campaign period would cost the company P52,380,000, representing revenue it would otherwise earn if the air time were sold to advertisers, and the amount of P6,600,850, representing the cost of producing a program for the COMELEC Time, or the total amount of P58,980,850. The claim that petitioner would be losing P52,380,000 in unrealized revenue from advertising is based on the assumption that air time is "finished product" which, it is said, become the property of the company, like oil produced from refining or similar natural resources after undergoing a process for their production. But air time is not owned by broadcast companies. As held in Red Lion Broadcasting Co. v. F.C.C., 19 which upheld the right of a party personally attacked to reply, "licenses to broadcast do not confer ownership of designated frequencies, but only the temporary privilege of using them." Consequently, "a license permits broadcasting, but the license has no constitutional right to be the one who holds the license or to monopolize a radio frequency to the exclusion of his fellow citizens. There is nothing in the First Amendment which prevents the Government from requiring a licensee to share his frequency with others and to conduct himself as a proxy or fiduciary with obligations to present those views and voices which are representative of his community and which would otherwise, by necessity, be barred from the airwaves." 20 As radio and television broadcast stations do not own the airwaves, no private property is taken by the requirement that they provide air time to the COMELEC. Justice Panganiban's dissent quotes from Tolentino on the Civil Code which says that "the air lanes themselves 'are not property because they cannot be appropriated for the benefit of any individual.'" (p. 5) That means neither the State nor the stations own the air lanes. Yet the dissent also says that "The franchise holders can recover their huge investments only by selling air time to advertisers." (p. 13) If air lanes cannot be appropriated, how can they be used to produce air time which the franchise holders can sell to recover their investment? There is a contradiction here. As to the additional amount of P6,600,850, it is claimed that this is the cost of producing a program and it is for such items as "sets and props," "video tapes," "miscellaneous (other rental, supplies, transportation, etc.)," and "technical facilities (technical crew such as director and cameraman as well as 'on air plugs')." There is no basis for this claim. Expenses for these items will be for the account of the candidates. COMELEC Resolution No. 2983, 6(d) specifically provides in this connection:

(d) Additional services such as tape-recording or video-taping of programs, the preparation of visual aids, terms and condition thereof, and consideration to be paid therefor may be arranged by the candidates with the radio/television station concerned. However, no radio/television station shall make any discrimination among candidates relative to charges, terms, practices or facilities for in connection with the services rendered. It is unfortunate that in the effort to show that there is taking of private property worth millions of pesos, the unsubstantiated charge is made that by its decision the Court permits the "grand larceny of precious time," and allows itself to become "the people's unwitting oppressor." The charge is really unfortunate. In Jackson v. Rosenbaun, 21 Justice Holmes was so incensed by the resistance of property owners to the erection of party walls that he was led to say in his original draft, "a statute, which embodies the community's understanding of the reciprocal rights and duties of neighboring landowners, does not need to invoke the penalty larceny of the police power in its justification." Holmes's brethren corrected his taste, and Holmes had to amend the passage so that in the end it spoke only of invoking "the police power." 22 Justice Holmes spoke of the "petty larceny" of the police power. Now we are being told of the "grand larceny [by means of the police power] of precious air time." Giving Free Air Time a Duty Assumed by Petitioner Petitioners claim that 92 is an invalid amendment of R.A. No. 7252 which granted GMA Network, Inc. a franchise for the operation of radio and television broadcasting stations. They argue that although 5 of R.A. No. 7252 gives the government the power to temporarily use and operate the stations of petitioner GMA Network or to authorize such use and operation, the exercise of this right must be compensated. The cited provision of. R.A. No. 7252 states: Sec. 5. Right of Government. A special right is hereby reserved to the President of the Philippines, in times of rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order, to temporarily take over and operate the stations of the grantee, to temporarily suspend the operation of any station in the interest of public safety, security and public welfare, or to authorize the temporary use and operation thereof by any agency of the Government, upon due compensation to the grantee, for the use of said stations during the period when they shall be so operated. The basic flaw in petitioner's argument is that it assumes that the provision for COMELEC Time constitutes the use and operation of the stations of the GMA Network, Inc., This is not so. Under 92 of B.P. Blg. 881, the COMELEC does not take over the operation of radio and television stations but only the allocation of air time to the candidates for the purpose of ensuring, among other things, equal opportunity, time, and the right to reply as mandated by the Constitution. 23 Indeed, it is wrong to claim an amendment of petitioner's franchise for the reason that B.P. Blg. 881, which is said to have amended R.A. No. 7252, actually antedated it. 24 The provision of 92 of B.P. Blg. 881 must be deemed instead to be incorporated in R.A. No. 7252. And, indeed, 4 of the latter statute does. For the fact is that the duty imposed on the GMA Network, Inc. by its franchise to render "adequate public service time" implements 92 of B.P. Blg. 881. Undoubtedly, its purpose is to enable the government to communicate with the people on matters of public interest. Thus, R.A. No. 7252 provides: Sec. 4. Responsibility to the Public. The grantee shall provide adequate public service time to enable the Government, through the said broadcasting stations, to reach the population on important public issues ; provide at all times sound and balanced programming; promote public participation such as in community programming; assist in the functions of public information and education; conform to the ethics of honest enterprise; and not use its

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station for the broadcasting of obscene and indecent language, speech, act or scene, or for the dissemination of deliberately false information or willful misrepresentation, or to the detriment of the public interest, or to incite, encourage, or assist in subversive or treasonable acts. (Emphasis added). It is noteworthy that 40 of R.A. No. 6388, from which 92 of B.P. Blg. 881 was taken, expressly provided that the COMELEC Time should "be considered as part of the public service time said stations are required to furnish the Government for the dissemination of public information and education under their respective franchises or permits." There is no reason to suppose that 92 of B.P. Blg. 881 considers the COMELEC Time therein provided to be otherwise than as a public service which petitioner is required to render under 4 of its charter (R.A. No. 7252). In sum, B.P. Blg. 881, 92 is not an invalid amendment of petitioner's franchise but the enforcement of a duty voluntarily assumed by petitioner in accepting a public grant of privilege. Thus far, we have confined the discussion to the provision of 92 of B.P. Blg. 881 for free air time without taking into account COMELEC Resolution No. 2983-A, 2 of which states: Sec. 2. Grant of "Comelec Time." Every radio broadcasting and television station operating under franchise shall grant the Commission, upon payment of just compensation, at least thirty (30) minutes of prime time daily, to be known as "Comelec Time", effective February 10, 1998 for candidates for President, Vice-President and Senators, and effective March 27, 1998, for candidates for local elective offices, until May 9, 1998. (Emphasis added). This is because the amendment providing for the payment of "just compensation" is invalid, being in contravention of 92 of B.P. Blg. 881 that radio and television time given during the period of the campaign shall be "free of charge." Indeed, Resolution No. 2983 originally provided that the time allocated shall be "free of charge," just as 92 requires such time to be given "free of charge." The amendment appears to be a reaction to petitioner's claim in this case that the original provision was unconstitutional because it allegedly authorized the taking of property without just compensation. The Solicitor General, relying on the amendment, claims that there should be no more dispute because the payment of compensation is now provided for. It is basic, however, that an administrative agency cannot, in the exercise of lawmaking, amend a statute of Congress. Since 2 of Resolution No. 2983-A is invalid, it cannot be invoked by the parties. Law Allows Flextime for Programming by Stations, Not Confiscation of Air Time by COMELEC It is claimed that there is no standard in the law to guide the COMELEC in procuring free air time and that "theoretically the COMELEC can demand all of the air time of such stations." 25 Petitioners do not claim that COMELEC Resolution No. 2983-A arbitrarily sequesters radio and television time. What they claim is that because of the breadth of the statutory language, the provision in question is susceptible of "unbridled, arbitrary and oppressive exercise." 26 The contention has no basis. For one, the COMELEC is required to procure free air time for candidates "within the area of coverage" of a particular radio or television broadcaster so that it cannot, for example, procure such time for candidates outside that area. At what time of the day and how much time the COMELEC may procure will have to be determined by it in relation to the overall objective of informing the public about the candidates, their qualifications and their programs of government. As stated in Osmea v. COMELEC, the COMELEC Time provided for in 92, as well as the COMELEC Space provided for in 90, is in lieu of paid ads which candidates are prohibited to have under 11(b) of R.A. No. 6646. Accordingly, this objective must be kept in mind in determining the details of the COMELEC Time as well as those of the COMELEC Space.

There would indeed be objection to the grant of power to the COMELEC if 92 were so detailed as to leave no room for accommodation of the demands of radio and television programming. For were that the case, there could be an intrusion into the editorial prerogatives of radio and television stations. Differential Treatment of Broadcast Media Justified Petitioners complain that B.P. Blg. 881, 92 singles out radio and television stations to provide free air time. They contend that newspapers and magazines are not similarly required as, in fact, in Philippine Press Institute v. COMELEC, 27 we upheld their right to the payment of just compensation for the print space they may provide under 90. The argument will not bear analysis. It rests on the fallacy that broadcast media are entitled to the same treatment under the free speech guarantee of the Constitution as the print media. There are important differences in the characteristics of the two media, however, which justify their differential treatment for free speech purposes. Because of the physical limitations of the broadcast spectrum, the government must, of necessity, allocate broadcast frequencies to those wishing to use them. There is no similar justification for government allocation and regulation of the print media. 28 In the allocation of limited resources, relevant conditions may validly be imposed on the grantees or licensees. The reason for this is that, as already noted, the government spends public funds for the allocation and regulation of the broadcast industry, which it does not do in the case of the print media. To require the radio and television broadcast industry to provide free air time for the COMELEC Time is a fair exchange for what the industry gets. From another point of view, this Court has also held that because of the unique and pervasive influence of the broadcast media, "[n]ecessarily . . . the freedom of television and radio broadcasting is somewhat lesser in scope than the freedom accorded to newspaper and print media." 29 The broadcast media have also established a uniquely pervasive presence in the lives of all Filipinos. Newspapers and current books are found only in metropolitan areas and in the poblaciones of municipalities accessible to fast and regular transportation. Even here, there are low income masses who find the cost of books, newspapers, and magazines beyond their humble means. Basic needs like food and shelter perforce enjoy high priorities. On the other hand, the transistor radio is found everywhere. The television set is also becoming universal. Their message may be simultaneously received by a national or regional audience of listeners including the indifferent or unwilling who happen to be within reach of a blaring radio or television set. The materials broadcast over the airwaves reach every person of every age, persons of varying susceptibilities to persuasion, persons of different I.Q.s and mental capabilities, persons whose reactions to inflammatory or offensive speech would he difficult to monitor or predict. The impact of the vibrant speech is forceful and immediate. Unlike readers of the printed work, the radio audience has lesser opportunity to cogitate, analyze, and reject the utterance. 30 Petitioners' assertion therefore that 92 of B.P. Blg. 881 denies them the equal protection of the law has no basis. In addition, their plea that 92 (free air time) and 11(b) of R.A. No. 6646 (ban on paid political ads) should be invalidated would pave the way for a return to the old regime where moneyed candidates could monopolize media advertising to the disadvantage of candidates with less resources. That is what Congress tried to reform in 1987 with the enactment of R.A. No. 6646. We are not free to set aside the judgment of Congress, especially in light of the recent failure of interested parties to have the law repealed or at least modified. Requirement of COMELEC Time, a Reasonable Exercise of the State's Power to Regulate Use of Franchises

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Finally, it is argued that the power to supervise or regulate given to the COMELEC under Art. IX-C, 4 of the Constitution does not include the power to prohibit. In the first place, what the COMELEC is authorized to supervise or regulate by Art. IX-C, 4 of the Constitution, 31 among other things, is the use by media of information of their franchises or permits, while what Congress (not the COMELEC) prohibits is the sale or donation of print space or air time for political ads. In other words, the object of supervision or regulation is different from the object of the prohibition. It is another fallacy for petitioners to contend that the power to regulate does not include the power to prohibit. This may have force if the object of the power were the same. In the second place, the prohibition in 11(b) of R.A. No. 6646 is only half of the regulatory provision in the statute. The other half is the mandate to the COMELEC to procure print space and air time for allocation to candidates. As we said in Osmea v. COMELEC: The term political "ad ban" when used to describe 11(b) of R.A. No. 6646, is misleading, for even as 11(b) prohibits the sale or donation of print space and air time to political candidates, it mandates the COMELEC to procure and itself allocate to the candidates space and time in the media. There is no suppression of political ads but only a regulation of the time and manner of advertising. xxx xxx xxx . . . What is involved here is simply regulation of this nature. Instead of leaving candidates to advertise freely in the mass media, the law provides for allocation, by the COMELEC of print space and air time to give all candidates equal time and space for the purpose of ensuring "free, orderly, honest, peaceful, and credible elections." With the prohibition on media advertising by candidates themselves, the COMELEC Time and COMELEC Space are about the only means through which candidates can advertise their qualifications and programs of government. More than merely depriving their qualifications and programs of government. More than merely depriving candidates of time for their ads, the failure of broadcast stations to provide air time unless paid by the government would clearly deprive the people of their right to know. Art III, 7 of the Constitution provides that "the right of the people to information on matters of public concern shall be recognized," while Art. XII, 6 states that "the use of property bears a social function [and] the right to own, establish, and operate economic enterprises [is] subject to the duty of the State to promote distributive justice and to intervene when the common good so demands." To affirm the validity of 92 of B.P. Blg. 881 is to hold public broadcasters to their obligation to see to it that the variety and vigor of public debate on issues in an election is maintained. For while broadcast media are not mere common carriers but entities with free speech rights, they are also public trustees charged with the duty of ensuring that the people have access to the diversity of views on political issues. This right of the people is paramount to the autonomy of broadcast media. To affirm the validity of 92, therefore, is likewise to uphold the people's right to information on matters of public concern. The use of property bears a social function and is subject to the state's duty to intervene for the common good. Broadcast media can find their just and highest reward in the fact that whatever altruistic service they may render in connection with the holding of elections is for that common good. For the foregoing reasons, the petition is dismissed. SO ORDERED. Narvasa, C.J., Regalado, Davide, Jr., Bellosillo, Melo, Puno, Kapunan, Martinez and Quisumbing, JJ., concur.

Separate Opinions VITUG, J., separate opinion; I assent in most part to the well-considered opinion written by Mr. Justice Vicente V. Mendoza in his ponencia, particularly, in holding that petitioner TELEBAP lacks locus standi in filing the instant petition and in declaring that Section 92 of Batas Pambansa Blg. 881 is a legitimate exercise of police power of the State. The grant of franchise to broadcast media is a privilege burdened with responsibilities. While it is, primordially, a business enterprise, it nevertheless, also addresses in many ways certain imperatives of public service. In Stone vs. Mississippi (101, U.S. 814, cited in Cruz, Constitutional Law, 1995 ed., p. 40.), a case involving a franchise to sell lotteries which petitioner claims to be a contract which may not be impaired, the United States Supreme Court opined: . . . (T)he Legislature cannot bargain away the police power of a State. Irrevocable grants of property and franchises may be made if they do not impair the supreme authority to make laws for the right government of the State; but no Legislature can curtail the power of its successors to make such laws as they may deem proper in matters of police. . . In this case, the assailed law, in my view, has not failed in meeting the standards set forth for its lawful exercise,i.e., (a) that its utilization is demanded by the interests of the public, and (b) that the means employed are reasonably necessary, and not unduly oppressive, for the accomplishment of the purposes and objectives of the law. I cannot consider COMELEC Resolution No. 2983-A, particularly Section 2 thereof, as being in contravention of B.P. No. 881. There is nothing in the law that prohibits the COMELEC from itself procuring airtime, perhaps longer than that which can reasonably be allocated, if it believes that in so opting, it does so for the public good. I vote to DISMISS the petition. ROMERO, J., dissenting; Section 92 of BP 881 constitutes taking of private property without just compensation. The power of eminent domain is a power inherent in sovereignty and requires no constitutional provision to give it force. It is the rightful authority which exists in every sovereignty, to control and regulate those rights of a public nature which pertain to its citizens in common, and to appropriate and control individual property for the public benefit as the public safety, necessity, convenience or welfare demand. 1 The right to appropriate private property to public use, however, lies dormant in the state until legislative action is had, pointing out the occasions, the modes, the conditions and agencies for its appropriation. 2 Section 92 of BP 881 states Sec. 92. Comelec Time The Comelec shall procure radio and television time to be known as "Comelec Time" which shall be allocated equally and impartially among the candidates within the area of coverage of all radio and television stations. For this purpose, the franchise of all radio and television stations are hereby attended so as to provide radio and television time free of charge during the period of election campaign. Pursuant to Section 92 of BP 881, respondent COMELEC on March 3, 1998 passed Resolution 2983-A, the pertinent provision of which reads as follows:

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Sec. 2. Grant of "Comelec Time." Every radio broadcasting and television station operating under franchise shall grant the Commission, upon payment of just compensation, at least thirty (30) minutes of prime time daily, to be known as "Comelec Time," effective February 10, 1998 for candidates for President, Vice-President and Senators, and effective March 27, 1998, for candidates for local elective offices, until May 9, 1998. Section 92 of BP 881, insofar as it requires radio and television stations to provide Comelec with radio and television time free of charge is a flagrant violation of the constitutional mandate that private property shall not be taken for public use without just compensation. While it is inherent in the State, the sovereign right to appropriate property has never been understood to include taking property for public purposes without the duty and responsibility of ordering compensation to the individual whose property has been sacrificed for the good of the community. Hence, Section 9 Article III of the 1987 Constitution which reads "No private property shall be taken for public use without just compensation," gives us two limitations on the power of eminent domain: (1) the purpose of taking must be for public use and (2) just compensation must be given to the owner of the private property. There is, of course, no question that the taking of the property in the case at bar is for public use, i.e. to ensure that air time is allocated equally among the candidates, however, there is no justification for the taking without payment of just compensation. While Resolution No. 2983-A has provided that just compensation shall be paid for the 30 minutes of prime time granted by the television stations to respondent Comelec, we note that the resolution was passed pursuant to Section 92 of BP 881 which mandates that radio and television time be provided to respondent Comelec free of charge. Since the legislative intent is the controlling element in determining the administrative powers, rights, privileges and immunities granted, 3 respondent Comelec may, at any time, despite the resolution passed, compel television and radio stations to provide it with airtime free of charge. Apparently, Sec. 92 of BP 881 justices such taking under the guise of police power regulation which cannot be validly done. Police power must be distinguished from the power of eminent domain. In the exercise of police power, there is a restriction of property interest to promote public welfare or interest which involves no compensable taking. When the power of eminent domain, however, is exercised, property interest is appropriated and applied to some public purpose, necessitating compensation therefor. Traditional distinctions between police power and the power of eminent domain precluded application of both powers at the same time in the same subject. 4 Hence, in the case of City of Baguio v. NAWASA, 5 the Court held that a law requiring the transfer of all municipal waterworks systems to NAWASA in exchange for its assets of equivalent value involved the exercise of eminent domain because the property involved was wholesome and intended for public use. Property condemned under the exercise of police power, on the other hand, is noxious or intended for noxious purpose and, consequently, is not compensable. Police power proceeds from the principle that every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community. Rights of property, like all other social and conventional rights, are subject to reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restraits and regulations established by law as the legislature, under the governing and controlling power vested in them by the constitution, may think necessary and expedient. 6 In the case of Small Landowners of the Philippines Inc. v. Secretary of Agrarian Reform, we found occasion to note that recent trends show a mingling of the police power and the power of eminent domain, with the latter being used as an implement of the former like the power of taxation. Citing the cases of Berman v. Parker 7 and Penn Central Transportation Co. v. New York City 8 where owners of the Grand Central Terminal who were not allowed to construct a multi-story building to preserve a historic landmark were allowed certain compensatory rights to mitigate the loss caused by the regulation, this Court is Small Landowners of the Philippines, Inc. case held that measures prescribing retention limits for landowners under the Agrarian Reform Law involved the exercise of police power for the regulation of private property in accordance with the constitution. And, where to carry out the regulation, it

became necessary to deprive owners of whatever lands they may own in excess of the maximum area allowed, the Court held that there was definitely a taking under the power of eminent domain for which payment of just compensation was imperative. The petition before us is no different from the above-cited case. Insofar as See 92 of BP 881 read in conjunction with Sec 11(b) of RA 6646 restricts the sale or donation of airtime by radio and television stations during the campaign period to respondent Comelec, there is an exercise of police power for the regulation of property in accordance with the Constitution. To the extent however that Sec 92 of BP 881 mandates that airtime be provided free of charge to respondent Comelec to be allocated equally among all candidates, the regulation exceeds the limits of police power and should be recognized as a taking. In the case of Pennsylvania Coal v. Mahon, 9 Justice Holmes laid down the limits of police power in this wise," The general rule is that while property may be regulated to a certain extent, if the regulation goes too far, it will be recognized as a taking." While the power of eminent domain often results in the appropriation of title to or possession of property, it need not always be the case. It is a settled rule that neither acquisition of title nor total destruction of value is essential to taking and it is usually in cases where title remains with the private owner that inquiry should be made to determine whether the impairment of a property is merely regulated or amounts to a compensable taking. A regulation which deprives any person of the profitable use of his property constitutes a taking and entitles him to compensation unless the invasion of rights is so slight as to permit the regulation to be justified under the police power. Similarly, a police regulation which unreasonably restricts the right to use business property for business purposes, amounts to taking of private property and the owner may recover therefor. 10 It is also settled jurisprudence that acquisition of right of way easement falls within the purview of eminent domain. 11 While there is no taking or appropriation of title to, and possession of the expropriated property in the case at bar, there is compensable taking inasmuch as them is a loss of the earnings for the airtime which the petitionerintervenors are compelled to donate. It is a loss which, to paraphrase Philippine Press Institute v. Comelec, 12 could hardly be considered "de minimis" if we are to take into account the monetary value of the compulsory donation measured by the current advertising rates of the radio and television stations. In the case of Philippine Press Institute v. Comelec, 13 we had occasion to state that newspapers and other print media are not compelled to donate free space to respondent Comelec inasmuch as this would be in violation of the constitutional provision that no private property shall be taken for public use without just compensation. We find no cogent reason why radio and television stations should be treated considering that their operating expenses as compared to those of the newspaper and other print media publishers involve considerably greater amount of financial resources. The fact that one needs a franchise from government to establish a radio and television station while no license is needed to start a newspaper should not be made a basis for treating broadcast media any differently from the print media in compelling the former to "donate" airtime to respondent Comelec. While no franchises and rights are granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires, 14 this provides no license for government to disregard the cardinal rule that corporations with franchises are as much entitled to due process and equal protection of laws guaranteed under the Constitution. ACCORDINGLY, I vote to declare Section 92 of BP 881 insofar as it mandates that radio and television time be provided to respondent Comelec free of charge UNCONSTITUTIONAL. PANGANIBAN, J., dissenting;

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At issue in this case is the constitutionality of Section 92 of the Omnibus Election Code 1 which compels all broadcast stations in the country "to provide radio and television time, free of charge, during the period of the [election] campaigns," which the Commission on Elections shall allocate "equally and impartially among the candidates . . ." Petitioners contend, and I agree, that this legal provision is unconstitutional because it confiscates private property without due process of law and without payment of just compensation, and denies broadcast media equal protection of the law. In Philippine Press Institute, Inc. (PPI) vs. Commission on Elections, 2 this Court ruled that print media companies cannot be required to donate advertising space, free of charge, to the Comelec for equal allocation among candidates, on the ground that such compulsory seizure of print space is equivalent to a proscribed taking of private property for public use without payment of just compensation. 3 The Court's majority in the present case, speaking through the distinguished Mr. Justice Vicente V. Mendoza, holds, however, that the foregoing PPI doctrine applies only to print media, not to broadcast (radio and TV) networks, arguing that "radio and television broadcasting companies, which are given franchises, do not own the airwaves and frequencies through which they transmit broadcast signals and images. They are merely given the temporary privilege of using them. Since a franchise is a mere privilege, the exercise of the privilege may reasonably be burdened with the performance by the grantee of some form of public service." In other words, the majority theorizes that the forced donation of air time to the Comelec is a means by which the State gets compensation for the grant of the franchise and/or the use of the air lanes. With all due respect, I disagree. The majority is relying on a theoretical distinction that does not make any real difference. Theory must yield to reality. I respectfully submit the following arguments to support my dissent: 1. The State does not own the airwaves and broadcast frequencies. It merely allocates, supervises and regulates their proper use. Thus, other than collecting supervision or regulatory fees which it already does, it cannot exact any onerous and unreasonable post facto burdens from the franchise holders, without due process and just compensation. Moreover, the invocation of the "common good" does not excuse the unbridled and clearly excessive taking of a franchisee's property. 2. Assuming arguendo that the State owns the air lanes, the broadcasting companies already pay rental fees to the government for their use. Hence, the seizure of air time cannot be justified by the theory of compensation. 3. Airwaves and frequencies alone, without the radio and television owner's humongous investments amounting to billions of pesos, cannot be utilized for broadcasting purposes. Hence, a forced donation of broadcast time is in actual fact a taking of such investments without due process and without payment of just compensation. Let me explain further each of these arguments. I. The State Does Not Own Air Lanes: It Merely Regulates Their Proper Use; "Common Good" Does Not Excuse Unbridled Taking. Significantly, the majority does not claim that the State owns the air lanes. It merely contends that "broadcasting, whether by radio or by television stations, is licensed by the government. Airwave frequencies have to be allocated as there are more individuals who want to broadcast than there are frequencies to assign. A franchise is thus a privilege subject among other thing . . . to amendment, alteration or repeal by the Congress when the common good so requires." 4 True enough, a "franchise started out as a 'royal privilege or [a] branch of the King's prerogative, subsisting in the hands of a subject.'" 5

Indeed, while the Constitution expressly provides that "[a]ll lands of the public domain, waters, mineral, coal, petroleum, and other mineral oils, all forces, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State," it is silent as to the ownership of the airwaves and frequencies. It is then reasonable to say that no one owns them. Like the air we breathe and the sunshine that sustains life, the air lanes themselves "are not property because they cannot be appropriated for the benefit of any individual," 6 but are to be used to the best advantage of all. Because, as mentioned earlier, there are more prospective users than frequencies, the State in the exercise of its police power allocates, supervises and regulates their use, so as to derive maximum benefit for the general public. The franchise granted by the legislature to broadcasting companies is essentially for the purpose of putting order in the use of the airwaves by assigning to such companies their respective frequencies. The purpose is not to grant them the privilege of using public property. For, as earlier stated, airwaves are not owned by the government. Accordingly, the National Telecommunications Commission (NTC) was tasked by law to institutionalize this regulation of the air lanes. To cover the administrative cost of supervision and regulation, the NTC levies charges, which have been revised upwards in NTC Memorandum Circular No. 14-8-94 dated August 26, 1994. In accordance with this Circular, Petitioner GMA Network, Inc., for the year 1996, paid the NTC P2,880,591 of which P2,501,776.30 was NTC "supervision and regulation fee," as borne out by its Audited Consolidated Financial Statements for said year, on file with the Securities and Exchange Commission. In short, for its work of allocation, supervision and regulation, the government is adequately compensated by the broadcast media through the payment of fees unilaterally set by the former. Franchisee's Property Cannot Be Taken Without Just Compensation In stamping unbridled donations with its imprimatur, the majority overlooks the twofold nature and purpose of a franchise: other than serving the public benefit which is subject to government regulation, it must also be to the franchise holder's advantage. Once granted, a franchise (not the air lanes) together with concomitant private rights, becomes property of the grantee. 7 It is regarded by law precisely as other property and, as any other property, it is safeguarded by the Constitution from arbitrary revocation or impairment. 8 The rights under a franchise can be neither taken nor curtailed for public use or purpose, even by the government as the grantor, without payment of just compensation 9 as guaranteed under our fundamental law. 10 The fact that the franchise relates to public use or purpose does not entitle the state to abrogate or impair its use without just compensation. 11 The majority further claims that, constitutionally, 12 franchises are always subject to alteration by Congress, "when the common good so requires." The question then boils down to this: Does Section 92 of the Omnibus Election Code constitute a franchise modification for the "common good," or an "unlawful taking of private property"? To answer this question, I go back to Philippine Press Institute, Inc. vs. Commission on Elections, where a unanimous Supreme Court held: 13 To compel print media companies to donate "Comelec space" of the dimensions specified in Section 2 of Resolution No. 2772 (not less than one-half page), amounts to "taking" of private personal property for public use or purposes. Section 2 failed to specify the intended frequency of such compulsory "donation:" only once during the period from 6 March 1995 (or 21 March 1995) until 12 May 1995? or everyday or once a week? or as often as Comelec may direct during the same period? The extent of the taking or deprivation is not insubstantial; this is not a case of a de minimistemporary limitation or restraint upon the use of private property. The monetary value of the compulsory "donation," measured by the advertising rates ordinarily charged by newspaper publishers whether in cities or in nonurban areas, may be very substantial indeed. (Emphasis in original) "Common Good" Does Not Justify Unbridled Taking of Franchisee's Broadcast Time

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Like the questioned resolution in PPI, Section 92 contains no limit as to the amount and recurrence of the "donation" of air time that Comelec can demand from radio and TV stations. There are no guidelines or standards provided as to the choice of stations, time and frequency of airing, and programs to be aired. Theoretically, Comelec can compel the use of all the air time of a station. The fact that Comelec has not exercised its granted power arbitrarily is immaterial because the law, as worded, admits of unbridled exercise. A statute is considered void for overbreadth when "it offends the constitutional principle that a governmental purpose to control or prevent activities constitutionally subject to state regulations may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms." (Zwickler v. Koota, 19 L ed 2d 444 [1967]). In a series of decisions this Court has held that, even though the governmental purpose be legitimate and substantial, that purpose cannot be pursued by means that broadly stifle fundamental personal liberties when the end can be more narrowly achieved. The breadth of legislative abridgment must be viewed in the light of less drastic means for achieving the same basic purpose. 14 In a 1968 opinion, the American Supreme Court made clear that the absence of such reasonable and definite standards in a legislation of its character is fatal. Where, as in the case of the above paragraphs, the majority of the Court could discern "an overbreadth that makes possible oppressive or capricious application" of the statutory provisions, the line dividing the valid from the constitutionally infirm has been crossed. Such provisions offend the constitutional principle that "a governmental purpose to control or prevent activities constitutionally subject to state regulation may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms." It is undeniable, therefore, that even though the governmental purpose be legitimate and substantial, they cannot be pursued by means that broadly stifle fundamental personal liberties when the end can be more narrowly achieved. For precision of regulation is the touchstone in an area so closely related to our most precious freedoms. 15 As a rule, a statute may be said to be vague and invalid if "it leaves law enforces (in the case, the Comelec) unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the government muscle." 16 Moreover, the extent of the actual taking of air time is enormous, exorbitant and unreasonable. In their Memorandum, 17 petitioners allege (and this has not been rebutted at all) that during the 1992 election period, GMA Network has been compelled to donate P22,498.560 worth of advertising revenues; and for the current election period, GMA stands to lose a staggering P58,980,850. Now, clearly and most obviously, these amounts are not inconsequential or de minimis. They constitute arbitrary taking on a grand scale! American jurisprudence is replete with citations showing that "[l]egislative regulation of public utilities must not have the effect of depriving an owner of his property without due process of law, nor of confiscating or appropriating private property without due process of law, nor of confiscating or appropriating private property without just compensation, nor of limiting or prescribing irrevocably vested rights or privileges lawfully acquired under a charter or franchise." The power to regulate is subject to these constitutional limits. 18 Consequently, "rights under a franchise cannot be taken or damaged for a public use without the making of just compensation therefor." 19 To do so is clearly beyond the power of the legislature to regulate. II. Assuming That the State Owns Air Lanes, Broadcast Companies Already Pay Rental Therefor. Let me grant for the moment and for the sake of argument that the State owns the air lanes and that, by its grant of a franchise, it should thus receive compensation for the use of said frequencies. I say, however, that by remitting unreasonably high "annual fees and charges," which as earlier stated amounts to millions of pesos yearly, television stations are in effect paying rental fees for the use (not just the regulation) of said frequencies. Except for the annual

inspection conducted by the NTC, no other significant service is performed by the government in exchange for the enormous fees charged the stations. Evidently, the sums collected by the NTC exceed the cost of services performed by it, and are therefore more properly understood as rental fees for the use of the frequencies granted them. 20 Since the use of the air frequencies is already paid for annually by the broadcast entities, there is no basis for the government, through the Comelec, to compel unbridled donation of the air time of said companies without due process and without payment of just compensation. In fact, even in the case of state-owned resources referred to earlier like oil, minerals and coal once the license to exploit and develop them is granted to a private corporation, the government can no longer arbitrarilyconfiscate or appropriate them gratis under the guise of serving the common good. Crude oil, for instance, once explored, drilled, and refined is thereafter considered the property of the authorized explorer (or refiner) which can sell it to the public and even to the government itself. The State simply cannot demand free gasoline for the operation of public facilities even if they benefit the people in general. It still has to pay compensation therefor. III. Airwaves Useless Without Huge Investment of Broadcast Companies Setting up and operating a credible broadcasting network requires billions of pesos in investments. It is precisely the broadcast licensee's use of a state-granted franchise or privilege which occasions its acquisition of private property in the form of broadcast facilities and its production of air time. These properties are distinct from its franchise. 21 The 1996 Audited Consolidated Balance Sheet of Petitioner GMA, on file with the SEC, shows that its "property and equipment," which it uses in its broadcast function, amount to over one billion pesos or, to be exact, P1,245,741,487. 22 This does not include the cost of producing the programs to be broadcast, talent fees and other aspects of broadcasting. In their Memorandum, 23 petitioners explain that the total cost for GMA to stay on the air (for television) at present is approximately P136,100 per hour, which includes electricity, depreciation, repairs and maintenance, technical facilities, salaries, and so on. The point is: The franchise holders can recover their huge investments only by selling air time to advertisers. This is their "product," their valuable property which Section 92 forcibly takes from them in massive amounts without payment of just compensation. It is too simplistic to say that because the Constitution allows Congress to alter franchises, ergo, an unbridled taking of private property may be allowed. If such appropriation were only, to use the words of PPI vs. Comelec, de minimis or insignificant say, one hour once or twice a month perhaps, it can be justified by the promotion of the "common good." But a taking in the gargantuan amount of over P58 million from Petitioner GMA for the 1998 election season alone is an actual seizure of its private investment, and not at all a reasonable "compensation" or "alteration" for the "common good." Certainly, this partakes of CONFISCATION of private property. What makes the taking of air time even more odious is its ex post facto nature. When the broadcast companies acquired their franchises and set up their expensive facilities, they were not informed of the immensity of the donations they are now compelled to give. Note should be made, too, of the fact that what Section 92 takes away is air time. Air time is the "finished product" after a station uses its own broadcast facilities. The frequency is lust the specific "route" or "channel" by which this medium reaches the TV sets of the general public. Technically, therefore, the wholesale alteration by Section 92 of all broadcast franchise would appear unrelated to the compelled donations. While the express modification is in the franchise, what Section 92 really does is that it takes away the end product of the facilities which were set up through the use of the entrepreneurs' investments and the broadcasters' work.

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EPILOGUE By way of epilogue, I must point out that even Respondent Comelec expressly recognizes the need for just compensation. Thus, Section 2 of its Resolution No. 2983-A states that "[e]very radio broadcasting and television station operating under franchise shall grant the Commission, upon payment of just compensation, at least thirty (30) minutes of prime time daily to be known as 'Comelec Time' . . ." And yet, even with such a judicious legal position taken by the very agency tasked by the Constitution to administer elections, the majority still insists on an arbitrary seizure of precious property produced and owned by private enterprise. That Petitioner GMA is a viable, even profitable, enterprise 24 is no argument for seizing its profits. The State cannot rob the rich to feed the poor in the guise of promoting the "common good." Truly, the end never justifies the means. It cannot be denied that the amount and the extent of the air time demanded from GMA is huge and exorbitant, amounting, I repeat, to over P58 million for the 1998 election season alone. If the air time required from "every radio and television station" in the country in the magnitude stated in the aforesaid Comelec Resolution 2983-A is added up and costed, the total would indeed be staggering in several hundred million pesos. Smacking of undisguised discrimination is the fact that in PPI vs. Comelec, this Court has required payment of print media ads but, in this case, compels broadcast stations to donate their end product on a massive scale. The simplistic distinction given that radio and TV stations are mere grantees of government franchises while newspaper companies are not does not justify the grand larceny of precious air time. This is a violation not only of private property, but also of the constitutional right to equal protection itself. The proffered distinction between print and broadcast media is too insignificant and too flimsy to be a valid justification for the discrimination. The print and broadcast media are equal in the sense that both derive their revenues principally from paid ads. They should thus be treated equally by the law in respect of such ads. To sum up, the Bill of Rights of our Constitution expressly guarantees the following rights: 1. No person, whether rich or poor, shall be deprived of property without due process.
25

WHEREFORE, I vote to GRANT the petition and to declare Section 92 of the Omnibus Election Code UNCONSTITUTIONAL and VOID. Purisima, J., dissents.

G.R. No. 83987 December 27, 1994 GREATER BALANGA DEVELOPMENT CORPORATION, petitioner, vs. MUNICIPALITY OF BALANGA, BATAAN; SANGGUNIANG BAYAN OF BALANGA, BATAAN; HON. MELANIO S. BANZON, JR.; HON. DOMINGO D. DIZON; HON. AGRIPINO C. BANZON; HON. EDUARDO P. TUAZON; HON. GABRIEL J. NISAY; HON. LORENZO P. TAPAN; HON. FEDERICO S. BUSTAMANTE; HON. ROLANDO H. DAVID; HON. EDILBERTO Q. DE GUZMAN; HON. ALFREDO C. GUILA; and HON. GAVINO S. SANTIAGO,respondents. Ricardo C. Valmonte and Reynaldo L. Bagatsing for petitioner. QUIASON, J.: This a a petition for certiorari, prohibition and mandamus under Rule 65 of the Revised Rules of Court to annul Executive Order No. 1, s-88 and Resolution No. 12, s-88 issued, respectively, by the Mayor and the Sangguniang Bayan of Balanga, Bataan. I This case involves a parcel of land, Lot 261-B-6-A-3 of the subdivision plan Psd 03-007623, situated in Barrio San Jose, Municipality of Balanga, Province of Bataan. The lot has an area of 8,467 square meters. It is registered under Transfer Certificate of Title No. 120152 issued on January 11, 1988 by the Register of Deeds of the Province of Bataan in the name of petitioner Greater Balanga Development Corporation. Petitioner is a domestic corporation owned and controlled by the Camacho family, which donated to the Municipality of Balanga the present site of the Balanga Public Market. The lot in dispute lies behind the Balanga Public Market. In 1987, petitioner conducted a relocation survey of the area. It discovered that certain portions of the property had been "unlawfully usurped and invaded" by the Municipality of Balanga, which had "allowed/tolerated/abetted" the construction of shanties and market stalls while charging market fees and market entrance fees from the occupants and users of the area. A portion of the lot had also been utilized as an unloading site ("bagsakan") of transient vegetable vendors, who were charged market and entrance fees by the municipality. On January 11, 1988, petitioner applied with the Office of the Mayor of Balanga for a business permit to engage in business in the said area. On the same day, Mayor Melanio S. Banzon, Jr. issued Mayor's Permit No. 2729, granting petitioner the privilege of a "real estate dealer/privately-owned public market operator" under the trade name of Balanga Public Market. The permit was to expire on December 31, 1988. Petitioner likewise registered "Balanga Central Market" as a trade name with the Bureau of Trade Regulations and Consumer Protection. On February 19, 1988, however, the Sangguniang Bayan of Balanga passed Resolution No. 12, s-88 annulling the Mayor's permit issued to petitioner and advising the Mayor to revoke the permit "to operate a public market."

2. Such property shall not be taken by the government, even for the use of the general public, without first paying just compensation to the owner. 26 3. No one, regardless of social or financial status, shall be denied equal protection of the law. 27 The majority, however, peremptorily brushes aside all these sacred guarantees and prefers to rely on the nebulous legal theory that broadcast stations are mere recipients of state-granted franchises which can be altered or withdrawn anytime or otherwise burdened with post facto elephantine yokes. By this short-circuited rationalization, the majority blithely ignores the private entrepreneurs' billion-peso investments and the broadcast professionals' grit and toil in transforming these invisible franchises into merchandisable property; and conveniently forgets the grim reality that the taking of honestly earned media assets is unbridled, exorbitant and arbitrary. Worse, the government, 28 against which these constitutional rights to property were in the first place written, prudently agrees to respect them and to pay adequate compensation for their taking. But ironically, the majority rejects the exemplary observance by the government of the people's rights and insists on the confiscation of their private property. I have always believed that the Supreme Court is the ever vigilant guardian of the constitutional rights of the citizens and their ultimate protector against the tyrannies of their own government. I am afraid that by this unfortunate Decision, the majority, in this instance, has instead converted this honorable and majestic Court into the people's unwitting oppressor.

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Pursuant to said Resolution, Mayor Banzon, on March 7, 1988, issued Executive Order No. 1, s-88 revoking the permit insofar as it authorized the operation of a public market. On July 13, 1988, petitioner filed the instant petition with a prayer for the issuance of a writ of preliminary mandatory and prohibitory injunction or restraining order aimed at the reinstatement of the Mayor's permit and the curtailment of the municipality's collection of market fees and market entrance fees. The Court did not issue the preliminary reliefs prayed for. Respondent asserted that as the local chief executive, the Mayor may issue, deny or revoke municipal licenses and permits. They contended that Resolution No. 12, s-88 of the Sangguniang Bayan, the basis of Executive Order No. 1, s-88, was a legitimate exercise of local legislative authority and, as such, the revocation of petitioner's permit was not tainted with any grave abuse of discretion. Petitioner replied that since it had not violated any law or ordinance, there was no reason for respondents to revoke the Mayor's permit issued to it. On the contrary, petitioner asserted that the executive order and the resolution in question were quasi-judicial acts and not mere exercises of police power. It questioned respondents' failure to observe due process in revoking the permit and challenged the legality of the collection of the market and entrance fees by the municipality. In their Rejoinder, respondents pointed out that petitioner had violated an existing municipal ordinance when it failed to disclose the true status of the area involved in the permit and when it did not secure separate permits for its two businesses, i.e., one as "real estate dealer" and another as "privately-owned public market operator." Respondents referred to Section 3A-06(b) of the Balanga Revenue Code which, inter alia, enjoins an applicant for a Mayor's permit from making a false statement in his application and provides for the penalties for violation of any existing ordinance regulating business establishments. II Mayor's Permit No. 2729 was revoked by Executive Order No. 1, s-88, which reads as follows: By virtue of the authority vested upon me by law as Mayor of the Municipality of Balanga, and as per Resolution No. 12, s-88 of the Sangguniang Bayan of Balanga, the Mayor's Permit in the latter portion of its purpose, i.e., "to operate a public market," issued to the Greater Balanga Development Corporation, is hereby REVOKED, effective immediately. IN WITNESS WHEREOF, I hereunto have set my hand this 7th day of March 1988, at Balanga, Bataan. (SGD.) MELANIO S. BANZON, JR. Municipal Mayor (Rollo, p. 36) The authority of the Mayor to revoke a permit he issued is premised on a violation by the grantee of any of the conditions for which the permit had been granted. Respondents claimed that petitioner had violated the provisions of Section 3A-06(b) of the Balanga Revenue Code when it failed to inform the Mayor that the lot in controversy was the subject of adverse claims for which a civil case was filed. Section 3A-06(b) of the Balanga Revenue Code reads:

xxx xxx xxx (b) The application for a Mayor's permit shall state the name, residence and citizenship of (sic) the applicant's full description of the business, the particular place where (sic) the same shall be conducted, and such other pertinent information and date (sic) as any (sic) be required. If the applicant deliberately makes a false statement in the application form, the Municipal Mayor may revoke the permit and the applicant may be prosecuted and penalized in accordance with the pertinent provisions of penal laws. In case a person desires to conduct the same kind or line of business in another place within the Municipality, in addition to or aside from the establishment specified in his permit, he shall secure a separate permit for each business and pay the corresponding fee imposed in this article. If a person desires to engage in more than one kind or line of business, he shall pay the fee imposed on each separate business, notwithstanding the fact that he may conduct or operate all distinct business (sic), trades or occupation in one place only. xxx xxx xxx (h) Revocation of Permit. The Municipal Mayor may revoke a permit, in effect close the establishment, upon a violation of existing ordinance regulating business establishments or any provisions of this article, in addition to the fine and imprisonment that they (sic) may be imposed by the court for violation of this article (Memorandum of the Solicitor General, pp. 16-17; Rollo, p. 322). Respondents claim that petitioner (1) deliberately made a false statement in the application form when it failed to provide the information that their place of business is the subject of adverse claims; and (2) failed to apply for two separate permits for the two lines of business it proposed to engage in. The application for Mayor's permit in the case at bench requires the applicant to state what type of "business", profession, occupation and/or calling privileges" is being applied for. Petitioner left this entry bank in its application form (Rollo, p. 324). It is only in the Mayor's permit itself that petitioner's lines of business appear, which in this case are two separate types, one as real estate dealer and another as public market operator. The permit should not have been issued without the required information given in the application form itself. Revoking the permit, however, because of a false statement in the application form cannot be justified under the aforementioned provision. There must be proof of willful misrepresentation and deliberate intent to make a false statement. Good faith is always presumed, and as it happened, petitioner did not make any false statement in the pertinent entry. Neither was petitioner's applying for two businesses in one permit a ground for revocation. The second paragraph of Section 3A-06(b) does not expressly require two permits for their conduct of two or more businesses in one place, but only that separate fees be paid for each business. The powers of municipal corporations are to be construed in strictissimi juris and any doubt or ambiguity must be construed against the municipality (City of Ozamiz v. Lumapas, 65 SCRA 33 [1975]). Granting, however, that separate permits are actually required, the application form does not contain any entry as regards the number of businesses the applicant wishes to engage in. Respondents insinuated bad faith on the part of petitioner in failing to supply the pertinent information in the application form and for taking advantage of the fact that Mayor Banzon was then newly installed as Mayor of Balanga. The absence of the material information in the application form was nonetheless supplied in the face of the permit signed and issued by Mayor Banzon himself (Rollo, p. 17).

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Under the law, the Sangguniang Bayan has the power to provide for the establishment and maintenance of public markets in the municipality and "to regulate any business subject to municipal license tax or fees and prescribe the conditions under which a municipal license may be revoked" (B.P. Blg. 337, Sec. 149 [1] [f & r]). It was this authority which respondent Sangguniang Bayan invoked when it issued Resolution No. 12, s-88. The said Resolution stated that the land subject of this case was earmarked for the expansion of the Balanga Public Market; that this land was owned not by petitioner but by the plaintiffs in Civil Case No. 3803 entitled "Leoncia Dizon, et. al. v. Aurora B. Camacho"; that the Municipality of Balanga was not apprised of the existence of the civil case; that the decision awarding the lot to the plaintiffs and the issuance of the Mayor's permit to petitioner who was not the rightful owner had caused "anxiety, uncertainty and restiveness" among the stallholders and traders in the subject lot; and that the Sangguniang Bayan therefore resolved to annul the said Mayor's permit insofar as it concerns the operation of a public market. As may be gleaned from said Resolution, the main reason for the revocation of the Mayor's permit was the controversy engendered by the filing of Civil Case No. 3803 before the Regional Trial Court, Balanga, Bataan involving the ownership of certain portions of Lot 261-B, the land from which Lot 261-B-6-A-3 was derived. Lot 261-B was originally owned and registered in the name of Aurora T. Banzon Camacho, who subdivided the land into nine lots under LRC Psd-277050 and designated them as Lots 261-B-1 to 261-B-9. She denoted some of the lots to the Municipality of Balanga which now comprise the Balanga Public Market, and sold others to third persons. On January 30, 1974, five buyers of certain portions of Lot 261-B filed Civil Case No. 3803 against Camacho for partition and delivery of titles. Camacho was declared in default and the plaintiffs forthwith presented their evidence. On December 20, 1974, the trial court rendered a decision ordering the defendant to segregate the definite portions sold to the plaintiffs and deliver to them the corresponding titles thereto. This decision was affirmed by the Court of Appeals on January 30, 1981 in CA-G.R. No. 59148-R (G.R. No. 62223, Rollo, pp. 50-58). The defendant elevated the matter to this Court. In a Resolution dated March 21, 1983, we denied the petition for lack of merit (G.R. No. 62223, Rollo, p. 100). The question now is whether Lot 261-B-6-A-3 is a part of the land adjudged by the trial court in Civil Case No. 3803 to the plaintiffs, or any one of them. Lot 261-B-6-A-3 was originally registered in the name of Camacho under TCT No. T-104438. She denoted the land to her daughter, Aurora Fe (Rollo, p. 329). TCT No. 104438 was then cancelled and TCT No. T-104461 issued in the donee's name, who in turn, transferred the land to herein petitioner. TCT No. 104461 of Aurora Fe was cancelled and TCT No. 120152 was issued in petitioner's name on January 11, 1988. On the same day, the Mayor's permit to operate the lot as a public market was also granted. It is the position of respondents that the series of transfers of the subject lot reveals a scheme to avoid the application of the decision in Civil Case No. 3803. There is no question that Lot 261-B-6-A-3 is a portion of Lot 261-B-6, and the claims of the plaintiffs in the civil case were on Lots 261-B-6 and 261-B-7 (Rollo, p. 327). As to whether plaintiffs' claims embraced specifically Lot 261-B-6-A-3 could not be determined from the face of the decision in the civil case. There is no showing that Lot 261-B-6-A-3 was awarded by

the court to one of the plaintiffs therein. There is no proof either that the judgment in said case had already been executed and the titles delivered to the plaintiffs. The question of ownership over Lot 261-B had already been settled with finality by the Supreme Court in 1983 in G.R. No. 62223. Entry of judgment was likewise, made in the same year. When the Mayor's permit was revoked on February 19, 1988, five years had already elapsed since the case was decided. Petitioner was able to survey the land and have the survey approved on March 21, 1984 (Rollo, pp. 15-16), and on January 11, 1988, petitioner obtained in its name TCT No. 120152 "without any memorandum of encumbrance or encumbrances pertaining to any decision rendered in any civil case" (Rollo, p. 199). Clearly, for all intents and purposes, petitioner appeared to be the true owner of Lot 261-B-6-A-3 when respondents revoked its permit to engaged in business on its own land. Assuming arguendo that Lot 261-B-6-A-3 was actually one of those awarded to the plaintiffs in Civil Case No. 3803 and the Transfer Certificate of Title of petitioner is spurious, this still does not justify the revocation of the Mayor's permit. A close scrutiny of the records reveals that the Sangguniang Bayan did not establish or maintain any public market on the subject lot. The resolution merely mentioned the plan to acquire the lot for expansion of the public market adjacent thereto. Until expropriation proceedings are instituted in court, the landowner cannot be deprived of its right over the land (Province of Rizal v. San Diego, 105 Phil. 33 [1959];Republic v. Baylosis, 96 Phil. 461 [1955]). Of course, the Sangguniang Bayan has the duty in the exercise of its police powers to regulate any business subject to municipal license fees and prescribe the conditions under which a municipal license already issued may be revoked (B.P. Blg. 337, Sec. 149 [1] [r]). But the "anxiety, uncertainty, restiveness" among the stallholders and traders cannot be a valid ground for revoking the permit of petitioner. After all, the stallholders and traders were doing business on property not belonging to the Municipal government. Indeed, the claim that the executive order and resolution were measures "designed to promote peace and order and protect the general welfare of the people of Balanga" is too amorphous and convenient an excuse to justify respondents' acts (Villacorta v. Bernardo, 143 SCRA 480 [1986]). Moreover, we find that the manner by which the Mayor revoked the permit transgressed petitioner's right to due process (Gordon v. Veridiano II, 167 SCRA 51 [1988]). The alleged violation of Section 3A-06(b) of the Balanga Revenue Code was not stated in the order of revocation, and neither was petitioner informed of this specific violation until the Rejoinder was filed in the instant case. In fact, with all the more reason should due process have been observed in view of the questioned Resolution of the Sangguniang Bayan. The knowledge of the pendency of Civil Case No. 3803 could not ipso facto nullify any claim petitioner had on the lot. This necessitated first and foremost a determination of the exact parameters of the lot and a finding that petitioner is not the true owner thereof. The finding that Civil Case No. 3803 was already settled by the Supreme Court should have apprised respondents of the possibility that the decision therein may have already been executed. Indeed, the cases of Austin Hardware Co., Inc. v. Court of Appeals, 69 SCRA 564 (1976) and Enriquez v. Bidin, 47 SCRA 183 (1972) are in point. In these cases, the revocation of the Mayor's permit was upheld by this Court because the grounds for revocation were admitted and not disputed. If only for the violation of due process which is manifest from Executive Order No. 1, s-88 and Resolution No. 12, s88, the Mayor's arbitrary action can be annulled. In view of the undisputed fact that the respondent Municipality is not the owner of Lot 261-B-6-A-3, then there is no legal basis for it to impose and collect market fees and market entrance fees. Only the owner has the right to do so.

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Be that as it may, the Mayor's permit issued on January 11, 1988 cannot now be reinstated despite the nullity of its revocation. The permit expired on December 31, 1988. WHEREFORE, (1) the petition for certiorari and prohibition is GRANTED and Executive Order No. 1, s-88 and Resolution No. 12, s-88 issued, respectively, by respondents Mayor and Sangguniang Bayan of Balanga, Bataan are NULLIFIED for having been issued in grave abuse of discretion; and (2) the petition for mandamus is DISMISSED. SO ORDERED. Padilla, Davide, Jr., Bellosillo and Kapunan, JJ., concur.

1. Under the first cause of action, sentencing the plaintiff to pay the defendants rentals at the annual rate of P2.00 per square meter for the use and occupancy of Block 19 with a total area of not less than 20,439 square meters, starting from the year 1957 and for as long as plaintiff uses and occupies the same; back rentals to bear interest at the rate of 1 2 % per annum, until paid. 2. Under the second cause of action, sentencing plaintiff alternatively, i.e., in the event that expropriation be granted as prayed for in the complaint - to pay defendants as compensation for the total encompassed in Block 10 (not less than 6,000 square meters) at the price of P20.00 per square meter, with 12 % interest computed from date of possession, until paid. 4 that on March 30, 1970, the plaintiff was placed in possession of the property sought to be expropriated 5 upon a previous deposit on March 12, 1970 of a provisional amount of P5,670; 6 that after the issues were joined evidence was submitted by both parties to the Clerk of Court, Andres B. Paras, as lone Commissioner, who submitted his Report 7 with the following recommendation: CONCLUSION All told this Commissioner respectfully recommends that judgment be rendered; (1) Expropriating the areas covered by Block 19 (20,439 sq. meters) and Block 10 (6,190 sq. meters) of the subdivision plan (Exhibit 3) of the defendant's properties in favor of the plaintiff; (2) Ordering plaintiff to pay the defendants Juana Garcia Sandico, Belen Garcia Diokno and Bienvenido Garcia (a) by way of just compensation, the amount of P15.00 per square meter for the Total area encomposed in Block 19 and Block 10, supra, with 6% interest computed from March 16, 1970, until paid, (b) an amount to be fixed by the Court as and for attorney's fees. San Fernando, Pampanga, September 8,1971. RESPECTFULLY SUBMITTED: (Sgd) ANDRES B. PARAS Commissioner 8 that mainly on the basis of the above report, the lower court rendered a decision, the dispositive part of which reads: WHEREFORE, in view of all the foregoing, judgment is hereby rendered: a) Expropriating the area covered by Block 10 (6,190 square meters) and Block 19 (20,439 square meters) of the subdivision plan of defendants' properties, with an aggregate area of 26,629 square meters, in favor of the plaintiff; b) Ordering the plaintiff to pay the defendants Juan Garcia Sandico, Belen Garcia Diokno and Bienvenido Garcia the amount of P 15.00 per square meter for the area herein expropriated which totals P399,435.00, with interest at the legal rate computed as follows: A) For the area covered by Block 10, from June 30, 1954; B) For the area covered by Block 19, from March 30, 1970. until fully paid and to pay Five (5%) per cent of the amount involved as and for attorney's fees and expenses of litigation, and to pay the costs of the suit.

G.R. No. L-47553 January 31, 1981 JANE L. GARCIA, MAYORICO P. SANDICO, BELEN R. GARCIA and DANILO DIOKNO, petitioners, vs. COURT OF APPEALS (Special Tenth Division) and NATIONAL POWER CORPORATION, respondents. FERNANDEZ, J.: This is a petition for certiorari instituted by Jane L. Garcia, Mayorico P. Sandico, Belen R. Garcia, and Danilo Diokno against the Court of Appeals (Special Tenth Division), and the National Power Corporation seeking the following relief : WHEREFORE, premises considered, it is most respectfully prayed of the Court: 1. That the Decision of the Court of Appeals respecting Block 19, wherein it has adjudged private respondent entitled to acquire title and ownership over the property by paying a compensation of PO.07 per square meter be reversed and that the Decision of the Court of First Instance of Pampanga adjudging the private respondent to compensate herein petitioners for Block 19 in the amount of P15.00 per square meter with interest at the legal rate from June 30, 1954 be upheld: 2. That, in the alternative to the petition next preceding, the private respondent be adjudged to pay rentals for the use of Block 19 at the rate of P2.00 per square meter per annum from June 30, 1954 until the same is vacated by it; Petitioners further pray for such other reliefs as may be just and equitable in the premises. Quezon City for Manila, Philippines, January 31, 1978.
1

The record discloses that on August 8, 1969, the private respondent National Power Corporation filed a complaint for eminent domain with the Court of First Instance of Pampanga, Branch Five, docketed as Civil Case No. 3584 2praying that it be allowed to acquire right of way easements over the property of petitioners consisting of two adjoining parcels of land (Lots Nos. 633 and 634) with a total area of 15.98 hectares; that the said complaint alleges that the proposed right-of-way is needed to construct the 69 KV Mexico-Balibago power line which will encompass some 2,835 square meters of petitioner's property; 3 that on March 2, 1970, the defendants, petitioners herein, filed an answer asking that the complaint for expropriation be dismissed and on the first and second counter-claims praying for the following:

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SO ORDERED. San Fernando, Pampanga, November 16,1971. (Sgd) HONORIO ROMERO Judge 9 that the plaintiff, private respondent National Power Corporation, appealed to the Court of Appeals; 10 that on October 28, 1977, the Court of Appeals rendered its decision modifying the trial court's decision as follows: Wherefore, judgment is hereby rendered: 1. Expropriating in favor of the plaintiff the area covered by Block 10 (6,190 square meters) and Block 19 (20,439 square meters) of the subdivision plan of the defendants' property; 2. Ordering the plaintiff to pay the defendants Juan Garcia Sandico, Belen Garcia Diokno and Bienvenido Garcia the purchase price of Block 10 (6,190 square meters) in the amount of P87,180.00 at P15.00 per square meter and at the same time ordering the Provincial Treasurer of Pampanga to release to the said defendants the amount of P5,670 deposited with him on February 26, 1970 as evidenced by Official Receipt No. 2497123 dated March 11, 1970 with interest at the legal rate on the amount of P187,180.00 from March 30, 1970; 3. Ordering the plaintiff to pay to the same defendants the amount of P14,511.69 as the market value for Block 19 (20,439 square meters) at PO.07 per square meter with legal interest from July 1, 1957. The judgment of the lower court awarding attorney's fees and costs are hereby eliminated. SO ORDERED; 11 that on November 24, 1977, the petitioners filed a motion for reconsideration of the decision of the Court of Appeals which was denied in its resolution dated December 13, 1977 ; 12 and that the petitioners appealed to this Court assigning as sole error allegedly committed by the Court of Appeals the following: THE COURT OF APPEALS IN ITS DECISION OF OCTOBER 28,1977 IN CA-GR NO. 55720-R ERRED IN FIXING THE AMOUNT OF JUST COMPENSATION AT P0.07 PER SQUARE METER, WHEN THE LOWER COURT FINDS THIS TO BE P15.00 PER SQUARE METER. 13 The facts, as found by the Court of Appeals, are: The defendants own Lot 633 and Lot 634 located in Mexico, Pampanga. Lot 633 has an area of 85,212 square meters. Lot 634 has an area of 74,613 square meters. Total area is 159,825 square meters. According to the defendants' pleadings (p. 34, Record on Appeal), not denied in the plaintiff's pleading, the National Power Corporation occupied as early as 1957 portions of the two (2) lots for the construction of "steel towers and high power lines for 230 KV Ambuklao-Manila Line and 69 KV Mexico-Tarlac Line." The portions of the two (2) lots occupied has an area of 20,439 square meters. It is designated as Block 19 in the sketch plan (Exhibit 3). Up to now the plaintiff has not paid anything for the portion occupied, either as rental or as purchase price.

As early as March 10, 1960 these two (2) lots were surveyed for the purpose of converting them into 'Conching Subdivision' (Exhibit 3) for residential purposes. The two (2) lots were subdivided into 19 blocks (Block No. 1 to 19). Except Block 19 which has been occupied by the NPC since 1957, the other blocks were subdivided into residential lots, totalling 350 lots in all. Block 19 occupied by the NPC was not subdivided into lots because of the steel towers and the power lines of the NPC, which make the said block dangerous for residential purposes. The plan and the technical descriptions were duly approved by the court as early as August 23, 1962 (Exh. 2-A). The subdivision plan was in turn approved by the Land Registration Commission on July 23,1962 and by the Municipal Council of Mexico, Pampanga on January 22, 1962 (Exhibit 4). After the subdivision plan was approved, steps were taken to improve the property. Asphalted roads and gutters have been constructed. According to the Commissioner's Report, "there are men working in the construction of an asphalt road and work is being done in full blast." The same report states that there are more or less 25 houses of strong materials constructed in the area. According to the defendants' evidence, not rebutted by the plaintiff, there are about 100 to 150 willing buyers of lots in the subdivision. May 8, 1969 the NPC instituted the instant action for expropriation of a 'right-of-way easement over a portion of the two (2) lots. In Lot 633 the plaintiff wants to expropriate a portion consisting of 1,470 square meters. In Lot 634 the area to be expropriated is 2,835 square meters. Total area to be expropriated is 2,835 square meters (Exhibit A). The entire area to be expropriated is within Block 10 of Conching Subdivision (Exhibit 3) which is adjacent to Block 19. (Vide, Exhibit 3). The plaintiff intends to use the area to be expropriated for the "construction and maintenance of its 69 KV Mexico-Balibago Transmission Line." The plaintiff offers to pay to the defendants an easement fee in the nominal sum of P1.00 and 10.00 for its tower to be constructed. 14 Anent the error assigned by the petitioners, the pertinent portions of the decision of the Court of Appeals are: The final question involves the determination of the just compensation. Just compensation is the market value of the property. It should be determined at the time of the taking. It is the price which it will command where it is offered for sale by one who desires, but is not obliged to sell, and is bought by one who is under no necessity of having it. (Manila Railway Co. vs. Velasquez, 32, Phil. 286; Manila Railroad Co. vs. Caligsihan, 40 Phil., 326). The market value must be determined as of the time the plaintiff takes possession. Thus when possession is ahead of the filing of the complaint, the date of possession determines the market value. (Republic vs. PNB, L-14158, 41261). We first determine the market value of Block 10 consisting of 6,190 square meters. The defendants' witnesses, namely, Garcia Sandico (tsn., January 9, 1971 p. 27), Gonzalo Mapayo (tsn., Feb. 6, 1971), Igino Sason (tsn., Feb. 6, 1971), Igino Sason (tsn., May 8, 1971), and Jose Angeles (tsn., May 15, 1975) all testified that the prices of the residential lots in the subdivision as of 1971 was P15.00 to P20.00 per square meter. The contract to sell dated November 18, 1965 (Exhibit 5) shows that the price per square meter is P15.00. Another contract to sell dated October 9, 1967 (Exhibit 5-A) shows a purchaser price of P15.00 per square meter. A request for reservation date July 6, 1970 (Exhibit 6) shows a purchase price of P17.00 per square meter. Other requests for reservation in 1969 and 1970 show a purchase price ranging from P15.00 to P17.00 per square meter (Exhibits 6-A to 6-H, inclusive.)

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On the other hand, the plaintiff presented only a tax declaration to prove the market value. A tax declaration is only prima facie evidence of market value which may be overcome by satisfactory evidence presented by the owners of the property to be expropriated. We therefore agree with the finding of the lower court that the price of Block 10 consisting of 6,190 square meters at P15,00 per square meter is P92,850.00. It appears, however, that as of February 26, 1970 the plaintiff deposited with the Provincial Treasurer of Pampanga the amount of P5,670 for the compensation of the property. Deducting P5,670 from P92,850.00 the unpaid balance for Block 10 is P87,180.00. Block 19 presents a different problem. Said property was occupied, according to the allegations of the defendants' counterclaim not denied in the plaintiff's reply thereto, in 1957 by the plaintiff. In other words, the possession of the property took place 13 years before the defendants filed their counterclaim praying for the damages with respect to the occupation of Block 19. The defendants did not present evidence as to the market value of Block 19 as of 1957. The tax declaration therefore should constitute the prima facie evidence of the market value for the purpose of determining the just compensation. (Province of Ilocos Norte vs. Compania General de Tabacos, L-7361, April 20, 1956, 53 O.G. 7687). As per tax declaration (Exhibits B, B- 1) the market value should be P.07 per square meter or a total amount of P14,511.69 for Block 19 which consists of 20,439 square meters. 15 The error raised refers solely to Block 19 of the petitioners' property. It is apparent that the substantial reduction of what compensation has to be paid for Block 19 came about as a result of the application of the doctrine enunciated in the case of the Republic vs. Phil. National Bank, et al., 16clarifying the question petition as to what date the market value of condemned property should be fixed, that "where the taking of the property precedes the institution of the condemnation proceedings, the value should be fixed as of the time of the taking". A careful reading of this case and the cases 17 mentioned therein shows certain material facts which are not Identical to the case at bar, to wit: 1) the properties in question became the subject of expropriation proceedings initiated by the plaintiff Government, and 2) that the possession or "taking" of the Government of the properties in question, whether it was made before or after the filing of the complaint for expropriation was made for purposes of eminent domain or with the intent to expropriate. 18 Hence, the Court of Appeals, in reducing the amount from P15.00 per square meter to P0.07 per square meter, made the value stated in the tax declaration of Block 19 in 1957 its basis on the assumption that in the said year 1957 the private respondent had taken possession of the land for the purpose of eminent domain and on the further presumption that subsequent thereto an action for expropriation was entered in court over this property. However, these facts assumed by the Court of Appeals are not borne by the evidence on record. Civil Case No. 3584 of the Court of First Instance of Pampanga, Branch V, entitled " National Power Corporation vs. Jane L. Garcia, et al.," is an action for expropriation but what was sought to be expropriated in the action was a right of way for the use of private respondent in the construction of its 69 KV Mexico-Balibago transmission line. This purpose of private respondent is stated in paragraph 5 of the Complaint 19 and indicated and shaded in red on the sketch attached to the complaint as Annex "A". 20 Said paragraph reads: The plaintiff needs right-of-way easements over portions of the parcels of land hereinabove described for the consideration and maintenance of its KV Mexico-Balibago transmission line, which portions are indicated and shaded in red on the sketches attached hereto, marked as Annex "A". The writ of possession directed the Sheriff "to place the plaintiff National Power Corporation in immediate possession of what is needed of the defendants' lands for a right-of-way easement subject of this expropriation proceedings." 21 The Ambuklao-Manila and Mexico-Tarlac transmission lines established as early as 1953 and 1957 traversing properties covered by Block 19 were not the subject matter of the said action.

Moreover, in the second paragraph of private respondents' answer to defendant's compulsory counterclaim, 22 it is alleged that the construction of the Ambuklao-Manila and Mexico-Tarlac transmission lines were with the permission of petitioners' predecessor-in-interest, their father, Eutiquiano Garcia. As shown by the transcript of the stenographic notes of the proceedings of June 26, 1971, 23 Mr. Eladio Espiritu, a witness of the private respondent, attempted to establish that the entry of private respondent to petitioners' property was with the consent of their predecessor. Likewise, as found by the Commissioner in his Report, 24 all that the plaintiff, private respondent herein, could show was an alleged authority to construct the Ambuklao-Manila line only, allegedly signed by defendants' father (Exhibit "M"), pending completion of the negotiation of the compensation to be paid. Exhibit "M", in clear and unmistakable terms, states the nature of the possession that the private respondent was granted at the time. The title of this document is "PERMISSION TO OCCUPY LAND" which undoubtedly grants to the National Power Corporation a privilege and the same is subject to the terms and conditions embodied in the document. 25 As the private respondent's entry was gained through permission, it did not have the intention to acquire ownership either by voluntary purchase or by the exercise of eminent domain. And the fact remains that the private respondent never completed the negotiation as to compensation. Not only this, private respondent went on to construct another line the 69 KV Mexico-Tarlac without defendants' permission nor a court authorization. 26 All these prove the private respondent's intention not to expropriate Block 19, as it did not seek so in the action it instituted on August 8, 1969. Neither did it have the intention to do so in 1953 as shown by the terms in Exhibit "M". It is clear, therefore, that the private respondent not only did not take possession with intent to expropriate Block 19, but that it did not institute expropriation proceedings over the same. Consequently, since the areas covered by Block 19 were never entered into or possessed for purposes of eminent domain, nor did they become the subject of an action for eminent domain, neither the date of entry nor the filing of the action by private respondent for expropriation of a "right-of-way" easement on December 8, 1969 could be reckoned with as the basis for the determination of just compensation. Hence, the conclusion of the Court of Appeals that the fair market value of the property in question based on the tax assessment in 1957 is an error of law, as it is a conclusion predicated on the wrong assumption that there was a taking or possession of Block 19 in 1957 for purposes of expropriation and that there was an action for expropriation of the same. It is significant that the expropriation of Block 19 came about only when the trial court declared that inasmuch as the private respondent cannot acquire easement of right-of-way over Block 19, much less own it through prescription, the only way for the private respondent to justify its continued occupation of Block 19 is to expropriate the same. This declaration of the trial court was affirmed by the Court of Appeals. The petitioners cannot legally impugn now for the first time on appeal to this Court the trial court's directive to expropriate Block 19 for public use. Well-settled is the rule that questions not raised in the lower court cannot now be raised for the first time on appeal. 27 Hence, the expropriation of Block 19 is final. By virtue of the special and peculiar circumstances of the case at bar, there being no taking of the property in question for purposes of eminent domain nor condemnation proceedings instituted over the same to speak of, the time as of which the market value should be fixed is the time when the trial court made its order of expropriation. It is the date of appropriation or the investing date which as everyone knows required more than a day, sometimes weeks to carry through as would an ordinary real estate purchase and sale. Hence, in estimating the market value, all the capabilities of the property and all the uses to which it may be applied or for which it is adapted are to be considered and not merely the condition it is in the time and the use to which it is then applied by the owner. All the facts as to the condition of the property and its surroundings, its improvements and capabilities may be shown and considered in estimating its value.

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Anent the compensation to be paid for Block 19, the reasons relied upon by the trial court which appear just, equitable, and in consonance with established jurisprudence are: In the mind of the Court, the contentions so advanced by the plaintiff cannot be maintained, and the authority just cited is not applicable in the instant case. In the first place, it was clearly shown by the defendants that the properties herein involved have been converted into a subdivision way back in 1962. In support of this, the defendants presented the order of this Court approving the subdivision plan, which was likewise approved by the Land Registration Commission, and the resolution of the municipal council of Mexico-Pampanga relative to the same subdivision. Moreover, as earlier discuss the Court is guided by the Commissioner's Report and Findings of the ocular inspection in determining the nature of the properties involved. In effect, therefore, the Court is of the opinion that the evidence presented by the defendants outweigh the evidence presented for the plaintiff by preponderance. Furthermore, by the testimonies of the witnesses, it was established that the properties, being converted into a subdivision sell at P15.00 to P20.00 per square meter and there are many willing buyers at this price range. However, the plaintiff, in an effort to contradict this claim presented the appraisal made by the provincial appraisal committee for the province of Pampanga, which appraisal gave the valuation of P6.00 to P8.00 per square meter for lots adjoining the lots of the defendants. These prices or evaluation, however, in the opinion of the Court, cannot be and are not the determinative factors in determining the value of the defendants' properties. It has been established by the evidence on record and confirmed by the report of the Commissioner, that the Conching Subdivision, where the subject properties form parts, are located along the national highway; that it is near the town proper of Mexico, Pampanga were the school and church sites are situated. In giving valuation to properties, these factors, namely, the relation or distance of the premises towards the national highway, to the town proper, and to other commercial sites such as schools and churches, must be given consideration. In this particular case, the properties, being along the national highway, near the town proper of Mexico, Pampanga and likewise near the school and church sites, must be given valuation commensurate to its standing. This being the case, the Court believes that the value of P15.00 per square meter is reasonable to be given to the defendants' properties. The defendants therefore are entitled to the payment of P15.00 per square meter for their properties object of this expropriation proceedings which are Blocks 10 and 19 of the subdivision plan with an aggregate area of 26,439 square meters. The fair market value of Block 19 should be fixed at P15.00 per square meter. WHEREFORE, the decision of the Court of Appeals in CA-G.R. NO. 55720-R is hereby modified as to Block 19 of the subdivision plan of petitioners' property and the private respondent, National Power Corporation, is ordered to pay to the petitioners the amount of P306,585.00 as the market value for Block 19 (20,439 square meters) at P15.00 per square meter with legal interests from March 30, 1970. No pronouncement as to costs. SO ORDERED. Makasiar, Guerrero and De Castro, JJ., concur. Teehankee, Chairman, J., in the result. Melencio-Herrera, J., took no part.

5 Ibid., pp. 49-51. 6 Ibid., pp. 42-43. 7 Commissioner's Report, Annex "O", Record on Appeal. pp. 83-111; Rollo, p. 41. 8 Ibid., p. 110. 9 CFI Decision, Record on Appeal, pp. 139-140; Rollo, p. 41. Typographical errors were corrected in an Order of the CFI of Pampanga, dated January 3, 1972, Record on Appeal pp. 146-147; Rollo, p. 41. 10 Docketed as Civil Case No. CA-G.R. NO. 55720-R. 11 Annex "A", Petition, Rollo, p. 33. Decision of the Court of Appeals was written by Justice Vicente Ericta and concurred in by Justice Ameurfina Melencio-Herrera and Justice Guardson R. Lood. 12 Petition, p. 6; Rollo, p. 14. 13 Brief for the Petitioners, p. 4; Rollo, p. 102. 14 CA Decision, pp. 1-3; Rollo, pp. 21-23, 15 Ibid, pp. 10-13; Rollo, pp. 30-32. 16 1 SCRA 957. 17 Provincial Government of Rizal vs. Caro de Araullo, 58 Phil. 308 and Republic vs. Lara 50 O.G. 5778 (1954). 18 To constitute "taking for purposes of eminent domain the ff: circumstances must concur: 1) theexpropriator must enter upon the private property; 2) the entrance must not be for a momentary period, that is, the entrance must be permanent; 3) the entry must be under warrant or color of legal authority; 4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected; and 5) the utilization of the property must be in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property, Republic vs. Vda. de Castellvi, 58 SCRA 336,350-352 (August 15),1974). 19 Record on Appeal p. 17, Rollo, p. 41. 20 Exhibit "A", Folder of Exhibits. 21 The Writ of Possession (Annex "K") issued by the lower court on March 16, 1970, together with the Sheriff's Return (Annex "J") of March 30, 1970, are additional proofs of what properties were covered by the action for expropriation, pp. 47-50, Record on Appeal, Rollo, p. 41. 22 Record on Appeal, p. 40; Rollo, p. 41. 23 Pp. 20-32. 24 Annex "O", Record on Appeal, pp. 108-109; Rollo, p. 41. 25 Reply to Respondent's Comment, p. 4; Rollo p. 77. 26 Commissioner's Report, Record on Appeal, p. 109. 27 Ferrer vs. Commissioner of Internal Revenue, 5 SCRA 1022.

G.R. No. L-34915 June 24, 1983 Footnotes 1 Petition, p. 10, Rollo, p. 18. 2 Annex "A", Record on Appeal, pp. 15-20; Rollo, p. 41. 3 Ibid. 4 Record on Appeal, pp. 36-37; Rollo, p. 41. CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF QUEZON CITY, petitioners, vs. HON. JUDGE VICENTE G. ERICTA as Judge of the Court of First Instance of Rizal, Quezon City, Branch XVIII; HIMLAYANG PILIPINO, INC., respondents.

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City Fiscal for petitioners. Manuel Villaruel, Jr. and Feliciano Tumale for respondents.

On the other hand, respondent Himlayang Pilipino, Inc. contends that the taking or confiscation of property is obvious because the questioned ordinance permanently restricts the use of the property such that it cannot be used for any reasonable purpose and deprives the owner of all beneficial use of his property. The respondent also stresses that the general welfare clause is not available as a source of power for the taking of the property in this case because it refers to "the power of promoting the public welfare by restraining and regulating the use of liberty and property." The respondent points out that if an owner is deprived of his property outright under the State's police power, the property is generally not taken for public use but is urgently and summarily destroyed in order to promote the general welfare. The respondent cites the case of a nuisance per se or the destruction of a house to prevent the spread of a conflagration. We find the stand of the private respondent as well as the decision of the respondent Judge to be well-founded. We quote with approval the lower court's ruling which declared null and void Section 9 of the questioned city ordinance: The issue is: Is Section 9 of the ordinance in question a valid exercise of the police power? An examination of the Charter of Quezon City (Rep. Act No. 537), does not reveal any provision that would justify the ordinance in question except the provision granting police power to the City. Section 9 cannot be justified under the power granted to Quezon City to tax, fix the license fee, and regulatesuch other business, trades, and occupation as may be established or practised in the City.' (Subsections 'C', Sec. 12, R.A. 537). The power to regulate does not include the power to prohibit (People vs. Esguerra, 81 PhiL 33, Vega vs. Municipal Board of Iloilo, L-6765, May 12, 1954; 39 N.J. Law, 70, Mich. 396). A fortiori, 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. Neither can the ordinance in question be justified under sub- section "t", Section 12 of Republic Act 537 which authorizes the City Council to'prohibit the burial of the dead within the center of population of the city and provide for their burial in such proper place and in such manner as the council may determine, subject to the provisions of the general law regulating burial grounds and cemeteries and governing funerals and disposal of the dead.' (Sub-sec. (t), Sec. 12, Rep. Act No. 537). There is nothing in the above provision which authorizes confiscation or as euphemistically termed by the respondents, 'donation' We now come to the question whether or not Section 9 of the ordinance in question is a valid exercise of police power. The police power of Quezon City is defined in sub-section 00, Sec. 12, Rep. Act 537 which reads as follows: (00) 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, promote, the prosperity, improve the morals, peace, good order, comfort and convenience of the city and the inhabitants thereof, 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.

GUTIERREZ, JR., J.: This is a petition for review which seeks the reversal of the decision of the Court of First Instance of Rizal, Branch XVIII declaring Section 9 of Ordinance No. 6118, S-64, of the Quezon City Council null and void. 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 by city authorities but seven years after the enactment of the ordinance, the Quezon City Council passed the following resolution: RESOLVED by the council of Quezon assembled, to request, as it does hereby 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. Pursuant to this petition, the Quezon City Engineer notified respondent Himlayang Pilipino, Inc. in writing that Section 9 of Ordinance No. 6118, S-64 would be enforced Respondent Himlayang Pilipino reacted by filing with the Court of First Instance of Rizal Branch XVIII at Quezon City, a petition for declaratory relief, prohibition and mandamus with preliminary injunction (Sp. Proc. No. Q-16002) seeking to annul Section 9 of the Ordinance in question The respondent alleged that the same is contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and the Revised Administrative Code. There being no issue of fact and the questions raised being purely legal both petitioners and respondent agreed to the rendition of a judgment on the pleadings. The respondent court, therefore, rendered the decision declaring Section 9 of Ordinance No. 6118, S-64 null and void. A motion for reconsideration having been denied, the City Government and City Council filed the instant petition. Petitioners argue that the taking of the respondent's property is a valid and reasonable exercise of police power and that the land is taken for a public use as it is intended for the burial ground of paupers. They further argue that the Quezon City Council is authorized under its charter, in the exercise of local police power, " to make such further ordinances and resolutions 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, promote the prosperity, improve the morals, peace, good order, comfort and convenience of the city and the inhabitants thereof, and for the protection of property therein."

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We start the discussion with a restatement of certain basic principles. Occupying the forefront in the bill of rights is the provision which 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. These are said to exist independently of the Constitution as necessary attributes of sovereignty. Police power is defined by Freund as 'the power of promoting the public welfare by restraining and regulating the use of liberty and property' (Quoted in Political Law by Tanada and Carreon, V-11, p. 50). 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. In police power, the owner does not recover from the government for injury sustained in consequence thereof (12 C.J. 623). It has been said that police power is the most essential of government powers, at times the most insistent, and always one of the least limitable of the powers of government (Ruby vs. Provincial Board, 39 PhiL 660; Ichong vs. Hernandez, 1,7995, May 31, 1957). This power embraces the whole system of public regulation (U.S. vs. Linsuya Fan, 10 PhiL 104). The Supreme Court has said that police power is so far-reaching in scope that it has almost become impossible to limit its sweep. As it derives its existence from the very existence of the state itself, it does not need to be expressed or defined in its scope. Being coextensive with self-preservation and survival itself, it is the most positive and active of all governmental processes, the most essential insistent and illimitable Especially it is so under the modern democratic framework where the demands of society and nations have multiplied to almost unimaginable proportions. The field and scope of police power have become almost boundless, just as the fields of public interest and public welfare have become almost all embracing and have transcended human foresight. Since the Courts cannot foresee the needs and demands of public interest and welfare, they cannot delimit beforehand the extent or scope of the police power by which and through which the state seeks to attain or achieve public interest and welfare. (Ichong vs. Hernandez, L-7995, May 31, 1957). The police power being the most active power of the government and the due process clause being the broadest station on governmental power, the conflict between this power of government and the due process clause of the Constitution is oftentimes inevitable. It will be seen from the foregoing authorities that police power is usually exercised in the form of mere regulation or restriction in the use of liberty or property for the promotion of the general welfare. It does not involve the taking or confiscation of property with the exception of a few cases where there is a necessity to confiscate private property in order to destroy it for the purpose of protecting the peace and order and of promoting the general welfare as for instance, the confiscation of an illegally possessed article, such as opium and firearms. 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. In sustaining the decision of the respondent court, we are not unmindful of the heavy burden shouldered by whoever challenges the validity of duly enacted legislation whether national or local As early as 1913, this Court ruled in Case v. Board of Health (24 PhiL 250) that the courts resolve every presumption in favor of validity and, more so, where the ma corporation asserts that the ordinance was enacted to promote the common good and general welfare. In the leading case of Ermita-Malate Hotel and Motel Operators Association Inc. v. City Mayor of Manila (20 SCRA 849) the Court speaking through the then Associate Justice and now Chief Justice Enrique M. Fernando stated

Primarily what calls for a reversal of such a decision is the a of any evidence to offset the presumption of validity that attaches to a statute or ordinance. As was expressed categorically by Justice Malcolm 'The presumption is all in favor of validity. ... The action of the elected representatives of the people cannot be lightly set aside. The councilors must, in the very nature of things, be familiar with the necessities of their particular ... municipality and with all the facts and lances which surround the subject and necessitate action. The local legislative body, by enacting the ordinance, has in effect given notice that the regulations are essential to the well-being of the people. ... The Judiciary should not lightly set aside legislative action when there is not a clear invasion of personal or property rights under the guise of police regulation. (U.S. v. Salaveria (1918], 39 Phil. 102, at p. 111. There was an affirmation of the presumption of validity of municipal ordinance as announced in the leading Salaveria decision in Ebona v. Daet, [1950]85 Phil. 369.) We have likewise considered the principles earlier stated in Case v. Board of Health supra : ... Under the provisions of municipal charters which are known as the general welfare clauses, a city, by virtue of its police power, may adopt ordinances to the peace, safety, health, morals and the best and highest interests of the municipality. It is a well-settled principle, growing out of the nature of well-ordered and society, that every holder of property, however absolute and may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community. An property in the state is held subject to its general regulations, which are necessary to the common good and general welfare. Rights of property, like all other social and conventional rights, are subject to such reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restraints and regulations, established by law, as the legislature, under the governing and controlling power vested in them by the constitution, may think necessary and expedient. The state, under the police power, is possessed with plenary power to deal with all matters relating to the general health, morals, and safety of the people, so long as it does not contravene any positive inhibition of the organic law and providing that such power is not exercised in such a manner as to justify the interference of the courts to prevent positive wrong and oppression. but find them not applicable to the facts of this case. There is no reasonable relation between the setting aside of at least six (6) percent of the total area of an 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. The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City which empowers the city council to prohibit the burial of the dead within the center of population of the city and to provide for their burial in a proper place subject to the provisions of general law regulating burial grounds and cemeteries. When the Local Government Code, Batas Pambansa Blg. 337 provides in Section 177 (q) that a Sangguniang panlungsod may "provide for the burial of the dead in such place and in such manner as prescribed by law or ordinance" it simply authorizes the city to provide its own city owned land or to buy or expropriate private properties to construct public cemeteries. This has been the law and practise in the past. It continues to the present. Expropriation, however, requires payment of just compensation. The questioned ordinance is different from laws and regulations requiring owners of subdivisions to set aside certain areas for streets, parks, playgrounds, and other public facilities from the land they sell to buyers of subdivision lots. The necessities of public safety, health, and convenience are very clear from said requirements which are intended to insure the development of communities with salubrious and wholesome environments. The beneficiaries of the regulation, in turn, are made to pay by the subdivision developer when individual lots are sold to home-owners.

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As a matter of fact, the petitioners rely solely on the general welfare clause or on implied powers of the municipal corporation, not on any express provision of law as statutory basis of their exercise of power. The clause has always received broad and liberal interpretation but we cannot stretch it to cover this particular taking. Moreover, the questioned ordinance was passed after Himlayang Pilipino, Inc. had incorporated. received necessary licenses and permits and commenced operating. The sequestration of six percent of the cemetery cannot even be considered as having been impliedly acknowledged by the private respondent when it accepted the permits to commence operations. WHEREFORE, the petition for review is hereby DISMISSED. The decision of the respondent court is affirmed. SO ORDERED. Teehankee (Chairman), Melencio-Herrera, Plana, Vasquez and Relova, JJ., concur.

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. 2The 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 radio-telegraphic 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

US GOVERNMENT VS. CAUSBY, digested Posted by Pius Morados on November 8, 2011 328 US 256, May 27, 1946 (Constitutional Law Just Compensation, Taking, Superjacent Space) FACTS: Government planes fly over a private property at such low altitude as to practically touch the tops of the trees. Herein respondent, owner of the said property filed a complaint against public respondent on grounds that there was an intrusion into the superjacent rights of the former entitling the same to payment of just compensation because the owner was deprive of the use of the said property. Petitioner contends that there has been no taking because flights are made within the navigable airspace and, there was no divestiture of title. ISSUE: Whether or not there was a taking of superjacent space which entitles for just compensation. HELD: Yes. Superjacent space is not part of private property because being a public domain, ownership of the same is vested in the State. However, if flying or occupying over it so low and frequent as to create a direct and immediate interference with the enjoyment and use of the land underneath it, then a taking is considered, entitling the owner for a just compensation.

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.:

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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 radiotelephone 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

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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 noncommercial 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

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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 cross-arms 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 cross-arm 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 well-known 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. Footnotes
1 2

Stipulated by parties (Record on Appeal, pages 70-72). Ibid. 3 Ibid. 4 Exhibit "Q", folder of exhibits, pages 1-2, 11, 66-67, 69, 72-73, 82-83, 88. 5 T.s.n., 26 January 1959, page 11. 6 Exhibit "12-A". 7 Partial Stipulation of Facts and its Annex "D", record on appeal, pages 72, 134-135. 8 Exhibit "16", page 49. 9 T.s.n., 9 March 1960, page 9. 10 T.s.n., 9 March 1960, page 57. 11 Annex "M" to Partial Stipulation of Facts, record on appeal, page 164-177. 12 T.s.n., 9 March 1960, pages 30-31. 13 Annex "P", record on appeal, pages 184-186. 14 Partial Stipulation of Facts, record on appeal page 78. 15 Decision, record on appeal, pages 221-222. 16 Decision, record on appeal, page 211; Exhibit "3", record of exhibits, page 103; T.s.n., 9 March 1960, pages 56 and 59. 17 Ibid. 18 Partial Stipulation of Facts, record on appeal, page 72. 19 Partial Stipulation of Facts, record on appeal, page 77.

G.R. Nos. 94193-99 February 25, 1992 NATIONAL POWER CORPORATION, petitioner, vs. HON. ENRIQUE T. JOCSON, in his capacity as Presiding Judge, Regional Trial Court, 6th Judicial Region, Branch 47, Bacolod City; JESUS, FERNANDO, MARIA CRISTINA and MICHAEL, all surnamed GONZAGA; LUIS, DIONISIO, ROBERTO, GABRIEL, BENJAMIN, ANA, ALEXANDER, CARLA, SOFIA and DANIEL, all surnamed GONZAGA; ROSARIO P. MENDOZA; CELSOY AGRO-IND. CORP.; EMMANUEL, LYDIA, HARRY, NOLI, CLIFFORD and CHRISTIAN DALE, all surnamed AO; MAYO L. LACSON; and LUCIA GOSIENFIAO,respondents. Amado B. Parreno Law Office for Gonzaga, et al. Francisco B. Cruz for R. Mendoza. Eduardo M. Casiple for Mayo Lacson. DAVIDE, JR., J.: This is a special civil action for certiorari to annul, for having been issued without or in excess of jurisdiction, in violation of law and in deprivation of petitioner's right to due process, four (4) orders successively issued by the respondent Judge in seven (7) eminent domain cases (1) fixing the provisional values of the parcels of land sought to be expropriated by the petitioner, National Power Corporation (NAPOCOR), in amounts far exceeding their market values, (2) increasing the provisional values of the parcels of land involved in two (2) of such cases without hearing

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and holding in abeyance the issuance of the writ of possession in favor of petitioner until deposit of the additional amount, (3) requiring the private respondents, as defendants in said cases, to state in writing within twenty-four (24) hours whether or not they are amenable to accepting and withdrawing the amount deposited by petitioner as provisional values in full and final satisfaction of their respective properties, and directing that the writ of possession be issued only until after the defendants shall have so manifested in writing their acceptance and receipt of said amounts, and (4) directing petitioner to release and pay within twenty-four (24) hours, through the Court and in favor of the defendants, the amount of P43,016,960.00. The antecedents of this case are not controverted. Petitioner is a government-owned and controlled corporation created and existing by virtue of Republic Act No. 6395, as amended, for the purpose of undertaking the development of hydraulic power, the production of power from any source, particularly by constructing, operating and maintaining power plants, auxiliary plants, dams, reservoirs, pipes, mains, transmission lines, power stations and other works for the purpose of developing hydraulic power from any river, creek, lake, spring and waterfall in the Philippines and supplying such power to the inhabitants thereof. In order to carry out these purposes, it is authorized to exercise the power of eminent domain. On 30 March 1990, petitioner filed seven (7) eminent domain cases before the Regional Trial Court of the Sixth Judicial Region in Bacolod City, to wit: (1) Civil Case No. 5938 against Jesus, Fernando, Ma. Cristina and Michael, all surnamed GONZAGA; 1 (2) Civil Case No. 5939 against Louis, Dionisio, Roberto, Gabriel, Benjamin, Ana, Alexander, Carla, Sofia, Daniel, all surnamed GONZAGA; 2 (3) Civil Case No. 5940 against Rosario P. Mendoza; 3 (4) Civil Case No. 5941 against Celsoy Agro-Ind. Corporation; 4 (5) Civil Case No. 5942 against Emmanuel, Lydia, Harry, Noli, Clifford and Christian, Dale, all surnamed AO;5 (6) Civil Case No. 5943 against Mayo L. Lacson; 6 (7) Civil Case No. 5944 against Lucia Gosiengfiao 7 for the acquisition of a right-of-way easement over portions of the parcels of land described in the complaints for its Negros-Panay Interconnection Project, particularly the Bacolod-Tomonton Transmission Line. The complaints uniformly (a) allege that petitioner urgently needs portions of the affected land to enable it to construct its tower and transmission line in a manner that is compatible with the greatest good while at the same time causing the least private injury; the purpose for which the lands are principally devoted will not be impaired by the transmission lines as it will only acquire a right-of-way-easement thereon; and it had negotiated with and offered to pay defendants for the portions affected by the Bacolod-Tomonton Transmission Line, but the parties failed to reach an agreement despite long and repeated negotiations, and (b) pray that: 1. This Honorable Court fix the provisional value of the portions of the parcel of land herein sought to be expropriated pursuant to Section 2, Rule 67 of the Rules of Court; 2. This Honorable Court, by proper order and writ, authorize the plaintiff to enter or take possession of the premises described in paragraph 3 hereof, and to commence and undertake the construction of the Bacolod-Tomonton T/L after depositing with the Provincial Treasurer of Negros Occidental the provisional value fixed by this Honorable Court, which amount shall be held by said official subject to the order and final disposition of the Court;

3. This Honorable Court appoint three (3) Commissioners to hear the parties, view the premises, assess the damages to be paid for the condemnation, and to report in full their proceedings to the Court; 4. The plaintiff be declared to have the lawful right to acquire portions of the properties of the defendants affected by the condemnation; 5. After the determination of the amount of indemnity, the Court authorize the payment by the plaintiff to the defendants; and 6. Judgment be rendered against the defendants, condemning the portion of the parcels of land referred to in paragraphs 3 and 4 hereof, including the improvements thereof, if any, for public use and for the purpose hereinabove set forth, free from all other liens and encumbrances whatsoever; and thereafter, upon plaintiff's compliance with the requirements of said judgment, a final order of condemnation be issued and entered in favor of the plaintiff. Plaintiff further prays for such other reliefs as may be deemed just and equitable in the premises. The cases were raffled to different branches of the trial court as follows: Civil Cases Nos. 5938, 5943 and 5944 to Branch 43; Civil Case No. 5939 to Branch 54; Civil Case No. 5940 to Branch 45; Civil Case No. 5941 to Branch 50; and Civil Case No. 5942 to Branch 46. Only the defendants in Civil Cases Nos. 5938, 5939, and 5942 filed Motions to Dismiss. 8 On 4 April 1990, petitioner filed a Motion to consolidate these cases for joint trial 9 and an Urgent Motion To Fix Provisional Value. 10 On 10 April 1990, Executive Judge Jesus V. Ramos issued an Order granting the motion for consolidation and ordering the consolidation of all the cases in Branch 43 of the court, then presided over by Judge Romeo Habaradas. 11 Considering that Judge Habaradas was on sick leave, petitioner filed on 8 May 1990 an Urgent Motion to Reraffle due to the urgent necessity for the hearing of the cases and the Urgent Motion to Fix Provisional Value. 12 Acting on said motion, Vice Executive Judge Bethel K. Moscardon issued on 9 May 1990 an Order granting the motion and directing the re-raffle of the cases. 13 Upon re-raffle, the cases were assigned to Branch 47, presided over by respondent Judge. Since the latter went on sick leave effective 16 May 1990, petitioner filed on said date an Urgent Motion for Special Re-raffle and for Immediate Fixing of Provisional Value. 14 As a consequence thereof, the cases were re-raffled to Branch 48 of the court. On 17 May 1990, Judge Romeo Hibionada of Branch 48 issued an Order directing the defendants to appear before the court on 21 May 1990 at 8:30 A.M. to register their comments or objections to the fixing of the provisional values of the parcels of land subject of expropriation. 15 On 21 May 1990, the petitioner and the defendants, through their respective lawyers, appeared and orally argued their respective positions on the Motion to Fix Provisional Value. 16

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Instead of ruling on the issues raised therein, Judge Hibionada, citing Circular No. 7 of this Court dated 23 September 1974 which establishes a pairing system, 17 promulgated an Order directing the return of the seven (7) cases to Branch 47 for further disposition. On 5 June 1990, Branch 47, through respondent Judge, issued an Order directing the petitioner: . . . to show by documents and otherwise within five (5) days from receipt hereof the following: 1. That it has earlier negotiated repeatedly with defendants but failed to reach agreement; 2. That expropriation of heavily populated subdivision areas in order to install primary electric transmission lines would not endanger lives and property in the area; 3. That such installation is of paramount public interest and there is no other demonstrable alternative. and warning that "no provisional order for tentative cost payment of the land affected would be issued" pending compliance by petitioner with the foregoing. 18 On 25 June 1990, respondent Judge, finding the existence of paramount public interest which. may be served by the expropriation, the long range benefit of the project involved, substantial compliance with the rules concerning efforts for negotiation and, taking into consideration the market value of the subject areas and the daily opportunity profit that the petitioner allegedly admitted in open court, issued an Order fixing the provisional values of the subject areas, to wit: CIVIL CASE AFFECTED MARKET PROVISIONAL NO. AREA(SQ. M.) VALUE 1. 5938 7,050 P 45,000.00 P 180,000.00 3,000 668,700.00 2,674,800.00 6,600 219,830.00 879,320.00 2. 5939 23,400 757,437.00 3,029,748.00 3. 5940 9,030 2,870.00 11,480.00 4. 5941 17,430 433,130.00 1,732,520.00 5. 5942 2,700 342,900.00 1,371,600.00 6. 5943 15,900 2,125,340.00 8,501,360.00 7. 5944 21,000 1,200,000.00 1,800,000.00 and directing the petitioner: . . . to deposit the amount with the Philippine National Bank in escrow for the benefit of the defendants pending decision on the merits. 19 The market values mentioned in the Order are the same values appearing in the tax declarations of the properties and the notices of assessment issued by the Assessor. In compliance with the said Order, petitioner deposited the total sum of P23,180,828.00 with the Philippine National Bank, NAPOCOR Branch, Quezon City, under Savings Account 249-505865-7 and manifested on 3 July 1990 with the court below that it did so. 20

On 11 July 1990, the defendants in Civil Case No. 5938 filed a motion for the reconsideration of the 25 June 1990 Order alleging that the provisional value of the property involved therein "had been set much too low" considering the allegations therein adduced, stating that the real compensation that should accrue to them is estimated at P29,970,000.00 and praying that the questioned Order be reconsidered so as to reflect "the true amount covering the properties subject to (sic) Eminent Domain estimated at TWENTY NINE MILLION NINE HUNDRED SEVENTY THOUSAND (P29,970,000.00)." 21 It likewise appears that the defendants in "Civil Case No. 5939 filed a motion for reconsideration asking for a reevaluation of the provisional value of the subject property. 22 On 12 July 1990, respondent Judge issued an Order 23 increasing the provisional values of the properties enumerated in the motions for reconsideration, directing the petitioner to deposit "whatever differential between the amounts above fixed and those already deposited within twenty four (24) hours from receipt of the Order" and holding in abeyance the issuance of the writ of possession pending compliance therewith. The Order reads in full as follows: ORDER I Before this Court are two (2) Motions for Reconsideration of the Order dated June 25, 1990 fixing provisional values of the lands sought to be expropriated belonging to the defendants in these cases. The first motion was filed by the Torres Valencia Ciocon Dabao Valencia & De La Paz Law Offices for the defendants Jesus, Fernando, Ma. Cristina and Michel (sic), all surnamed Gonzaga, seeking a reconsideration of the values set by this Court earlier at P3,734,120.00 for the areas affected consisting of the following: 7,050 square meters; 6,600 square meters; and 3,000 square meters belonging to the aforesaid persons. The Court is aware that the Order of July 25, 1990 was not based on ultimate factual conditions of the property of the movants. At that time, the Court is (sic) unaware that the expropriation of these areas would render the remaining portion practically a total loss considering that it is in a subdivision and not agricultural and that the fetching price (sic) now in the immediate vicinity is between P1,500.00 and P2,000.00 per square meter. Considering that the presence of the primary transmission lines of the property and the earlier intrusion of the Central Negros Cooperative at the side of the areas affected for free ( sic) during the Martial Law Regime, and considering further the proximity of the Rolling Hills Memorial Park, the San Miguel Corporation manufacturing complex, Jesusa Heights, Green Hills Memorial Park and other posh subdivisions, as well as a golf course, the Court is convinced that that (sic), defendants Jesusa Gonzaga, Fernando Gonzaga, Ma. Cristina and Michel (sic) Gonzaga are entitled to a higher valuation for the property, not only because of the above-stated facts but because of the clear danger to the inhabitants in the area and the destruction of the marketability of the remaining portion after expropriation. II In respect to the plea of defendants Louis Gonzaga, et al. for re-evaluation of the areas owned by them, the Court feels that adjustment should also be made considering that it is contiguous to the areas belonging to Jesus Gonzaga, et al. above-stated and it is also affected by the same conditions. Considering that the area affected is 23,000 square meters and the fetching price

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(sic) in the vicinity is between P1,500.00 and P2,000.00 per square meter, the Court feels that the provisional value of the property should be P12,600,000.00. As to the rest of the defendants, there being no extra-ordinary or peculiar conditions which may warrant re-evaluation the amounts fixed earlier by this Court shall stand. WHEREFORE, (a) the Court rules that the provisional value of 7,050 square meters aforestated should be P6,000,000.00; the provisional value of 6,600 square meters aforestated should be P5,000,000.00; and the provisional value of 3,000 square meters aforestated should be P3,000,000.00 instead of those in the June 25, 1990 Order of this Court for these properties. (b) The provisional value of 23,000 square meters belonging to Louis Gonzaga, et al. should be rightfully valued at P12,600,000.00. The plaintiff is directed to deposit whatever differential between the amounts above fixed and those already deposited in PNB Savings Account No. 249-5-5865-7 within 48 hours from receipt of this Order. Pending such compliance hereof, action on the Motion for Issuance of Writ of Possession will be held in abeyance. The representative of the plaintiff may get from the Branch Clerk of Court the corresponding bank book earlier attached to the expediente for the purpose of complying with this Order. SO ORDERED. In compliance with the said Order, petitioner immediately deposited the additional sum of P22,866,860.00 with the Philippine National Bank under Savings Account No. 249-505865-7 as evidenced by the Bank's certification dated 13 July 1990. 24 On 16 July 1990, respondent Judge issued an Order 25 mandatorily requiring the defendants: . . . to state in writing within twenty-four (24) hours whether or not they are amenable to accept and withdraw (sic) the amounts already deposited by the plaintiff for each of them at final and full satisfaction of the value of their respective property (sic) affected by expropriation, and this is mandatory. [t]he Writ of Possession sought for by the plaintiff will be issued immediately after manifestation of acceptance and receipt of said amounts. On 18 July 1990, respondent Judge, claiming to act on the Manifestation filed in compliance with the Order of 16 July 1990 of defendants Jesus Gonzaga, et al. in Civil Case No. 5938, Luis Gonzaga, et al. in Civil Case No. 5939, Rosario Mendoza in Civil Case No. 5940, Emmanuel Ao, et al. in Civil Case No. 5942 and Mayo Lacson in Civil Case No. 5943, issued an Order 26 directing the petitioner to pay the defendants within twenty-four (24) hours, through the court and from petitioner's Philippine National Bank Savings Account No. 249-505865-7 or from any other fund; whichever may be most expeditious, the following amounts by way of full payment for their expropriated property: CIVIL CASE NO. AFFECTED AREA VALUE (SQ. M.) 1. 5938 7,050 P 6,000,000.00 3,000 3,000,000.00 6,600 5,000,000.00

2. 5939 23,000 12,600,000.00 3. 5940 9,030 11,480.00 4. 5941 17,430 1,732,520.00 5. 5942 2,700 1,371,600.00 6. 5943 15,900 8,501,360.00 7. 5944 21,000 4,800,000.00 and ordering that the writ of possession be issued in these cases after the defendants "have duly received the amounts." Unable to accept the above Orders of 25 June, 12 July, 16 July and 18 July 1990, petitioner filed this petition on 24 July 1990 alleging therein, as grounds for its allowance, that respondent Judge acted in excess of jurisdiction, in violation of laws and in dereliction of the duty to afford respondents due process when he issued said Orders. In support thereof petitioner asserts that the Orders of 25 June and 12 July 1990 fixing the provisional values at excessive and unconscionable amounts, are utterly scandalous and unreasonable. As classified under their respective tax declarations, the several lots to be expropriated are sugarlands with the following assessed values: OWNER TAX DEC. NO. ASSESSED VALUE 1. JESUS L. GONZAGA 007-000621 P18,000.00 2. Estate of SOPHIA Vda. de GONZAGA 007-000495 267,480.00 3. JESUS GONZAGA 005-000007 87,930.00 4. LOUIS, DIONISIO ROBERTO, GABRIEL BENJAMIN, ANA ALEXANDER, CARLO SOPHIA, DANIEL also named GONZAGA 007-5224 398,260.00 5. ROSARIO MENDOZA Notice of Assessment of Real Property dated March 23, 1990, Lot No. 1278-B-1 860.00 6. ROSARIO MENDOZA Notice of Assessment of Real Property dated March 23, 1990, 861,380.00 Lot No. 1278-C-1 429,080.00 7. CEL-SOY-AGROIND. CORPORATION 2284 179,650.00 8. LYDIA S. ANO married to EMMANUEL ANO 4047 (0854-05) 137,160.00 9. PACITA LACSON (MAYO L. LACSON) Notice of Assessment of Real Property dated March 21, 1990 Lot No. 7-G 861,380.00 10. DOLORES D. COSCOLLUELA 020-00017 487,730.00 (LUCIA GOSIENFIAO)

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Yet, petitioner submits that in a clear display of abuse of discretion, respondent Judge fixed, in the Order of 25 June 1990, the provisional valued as follows: CIVIL CASE AFFECTED AREA MARKET PROVISIONAL VALUE (SQ. M.) VALUE NO. 1. 5938 7,050 P 45,000.00 P 180,000.00 3,000 668,700.00 2,674,800.00 6,600 219,830.00 879,320.00 2. 5939 23,400 757,437.00 3,029,748.00 3 5940 9,030 2,870.00 11,480.00 4. 5941 17,430 433,130.00 1,732,520.00 5. 5942 2,700 342,900.00 1,371,600.00 6. 5943 15,900 2,125,340.00 8,501,360.00 7. 5944 21,000 1,200,000.00 4,800,000.00 and that: . . . in another clear abuse (sic) of discretion, herein respondent Judge, on the basis of the respective Motion (sic) for Reconsideration of defendants in Civil Cases Nos. 5938 and 5939, without affording the herein petitioner an opportunity to be heard, and with evident and manifest partiality to therein defendants increased the previously fixed provisional value of their respective lands, as follows: a. Civil Case No. 5938: 1. 7,050 sq. m. From P180,000.00 to P6,000,000.00 2. 3,000 sq. m. From P2,674,800.00 to P3,000,000.00 3. 6,600 sq. m. From P879,320.00 to P5,000,000.00 b. Civil Case No. 5939 1. 23,400 sq. m. From P3,029,748.00 to P12,600,000.00 Nevertheless, due to its urgent need for the areas to be able to complete the interconnection project as soon as possible, petitioner deposited the amounts representing the provisional values fixed by the respondent Judge. Still, petitioner laments, the latter persisted in his stubbornness by not issuing a writ of possession, in violation of Section 2, Rule 67 of the Rules of Court which provides that upon the filing of the complaint or at any time thereafter, the plaintiff shall have the right to take or enter upon the possession of the real or personal property involved if he deposits with the National or Provincial Treasurer its value, as provisionally and promptly ascertained and fixed by the court having jurisdiction of the proceedings, to be held by such treasurer subject to the orders and final disposition of the court; and that after such deposit to made, the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved P.D. No. 42, which provides that: . . . upon filing in the proper court of the complaint in eminent domain proceedings or at anytime thereafter, and after due notice to the defendant, plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the Philippine National Bank, in its main office or any of its branches or agencies, an amount equivalent to the assessed value of the property for purposes of taxation, to be held by said bank subject to the orders and final disposition of the court. is also alleged to have been violated by respondent Judge.

The issuance then of the writ of possession was an unqualified ministerial duty which respondent Judge failed to perform. Moreover, the Order of 16 July 1990 surrenders the judicial prerogative to fix the provisional value in favor of the defendants considering that respondent Judge's valuation may still be overruled by the latter since they were given twenty-four (24) hours to state in writing whether or not they are accepting and withdrawing the amount already deposited by petitioner. Finally, petitioner contends that the Order of 16 July 1990 partakes of the nature of a final disposition of the case should the defendants accept the provisional value as "final and full satisfaction of the value of their respective property (sic)affected by expropriation," thereby preempting and depriving the former of the right to dispute and contest the value of the property. Clearly, respondent Judge took a short-cut, violating in the process the procedure laid down in Sections 3 to 8, inclusive, of Rule 67 of the Rules of Court. In the Resolution of 31 July 1990, this court required the respondents to comment on the petition and resolved to issue a temporary restraining order, effective immediately and to continue until further orders from the Court, compelling the respondent Judge to cease and desist from enforcing and/or executing his questioned Orders and directing him, pending determination of this case, to place petitioner in possession of the properties subject of this petition. 27 The following respondents filed, through their counsels, their Answers on various dates, as follows: Mayo Lacson 14 September 1990 28 Rosario P. Mendoza 18 September 1990 29 Jesus Gonzaga, et al.; Emmanuel Ao, et al. 27 September 1990 30 Luis Gonzaga, et al. 20 September 1990 31 All of them, except for Rosario P. Mendoza who informed the Court that she filed a motion to reconsider the 18 July 1990 Order of respondent Judge and who agrees with petitioner that commissioners should be appointed to determine the just compensation, 32 support and sustain the actions of respondent Judge and pray for the dismissal of the petition. Mayo Lacson, in submitting that the procedure prescribed in Rule 67 may be abbreviated provided that the rights of the parties are duly protected, cites the case of City Government of Toledo vs. Fernandos, et al. 33 wherein this Court sustained the judgment of the trial court on the basis of what transpired in the pre-trial conference. Complying with the Resolution of the 25 September 1990, petitioner filed on 6 November 1990 a Reply to the Comment of respondent Mayo Lacson, 34 stressing therein that the case of City Government of Toledo City vs.Fernandos, et al. 35 does not apply to the present case because a pre-trial was conducted in the former during which the parties were able to present their respective positions on just compensation. On 22 January 1991, this Court resolved to consider the respondents' Comments as Answers to the petition, give due course to the petition and require the parties to file simultaneously their respective Memoranda within twenty (20) days from notice, which petitioner complied with on 11 March 1991; 36 respondent Mendoza on 4 March 1991; 37 respondents Jesus Gonzaga, et al. and Emmanuel Ao, et al. on 19 March 1991; 38 and Mayo Lacson on 5 April 1991. 39 We find merit in the petition.

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Respondent Judge committed grave abuse of discretion amounting to lack of jurisdiction, and is otherwise either unmindful or ignorant of the law: when he fixed the provisional values of the properties for the purpose of issuing a writ of possession on the basis of the market value and the daily opportunity profit petitioner may derive in violation or in disregard of P.D. No. 42; in amending such determination in Civil Cases Nos. 5938 and 5939 by increasing the same without hearing; in directing the defendants to manifest within twenty-four (24) hours whether or not they are accepting and withdrawing the amounts, representing the provisional values, deposited by the plaintiff for each of them as "final and full satisfaction of the value of their respective property (sic); " in declaring the provisional values as the final values and directing the release of the amounts deposited, in full satisfaction thereof, to the defendants even if not all of them made the manifestation; and in suspending the issuance of the writ of possession until after the suspending the amounts shall have been released to and received by defendants. In Municipality of Bian vs. Hon. Jose Mar Garcia, et al., 40 this Court ruled that there are two (2) stages in every action of expropriation: The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. 41 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." 42 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. 43 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. 44 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. . . . However, upon the filing of the complaint or at any time thereafter, the petitioner has the right to take or enter upon the possession of the property involved upon compliance with P.D. No. 42 which requires the petitioner, after due notice to the defendant, to deposit with the Philippine National Bank in its main office or any of its branches or agencies, "an amount equivalent to the assessed value of the property for purposes of taxation." This assessed value is that indicated in the tax declaration. P.D. No. 42 repealed the "provisions of Rule 67 of the Rules of Court and of any other existing law contrary to or inconsistent" with it. Accordingly, it repealed Section 2 of Rule 67 insofar as the determination of the provisional value, the form of payment and the agency with which the deposit shall be made, are concerned. Said section reads in full as follows: Sec. 2. Entry of plaintiff upon depositing value with National or Provisional Treasurer. Upon the filing of the complaint or at any time thereafter the plaintiff shall have the right to take or enter upon the possession of the real or personal property involved if he deposits with the National or Provincial Treasurer its value, as provisionally and promptly ascertained and fixed by the court having jurisdiction of the proceedings, to be held by such treasurer subject to the orders and final disposition 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 depository of the Republic of the Philippines payable on demand to the National or Provincial Treasurer, as the case may be, in the amount

directed by the court to be deposited. 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. It will be noted that under the aforequoted section, the court has the discretion to determine the provisional value which must be deposited by the plaintiff to enable it "to take or enter upon the possession of the property." Notice to the parties is not indispensable. In interpreting a similar provision of Act No. 1592, this Court, in the 1915 case of Manila Railroad Company, et al. vs. Paredes, et al., 45 held: . . . The statute directs that, at the very outset, "when condemnation proceedings are brought by any railway corporation" the amount of the deposit is to be "provisionally and promptly ascertained and fixed by the court." It is very clear that it was not the intention of the legislator that before the order fixing the amount of the deposit could lawfully be entered the court should finally and definitely determine who are the true owners of the land; and after doing so, give them a hearing as to its value, and assess the true value of the land accordingly. In effect, that would amount to a denial of the right of possession of the lands involved until the conclusion of the proceedings, when there would no need for the filing of the deposit. Of course, there is nothing in the statute which denies the right of the judge to hear all persons claiming an interest in the land, and courts should ordinarily give all such persons an opportunity to be heard if that be practicable, and will cause no delay in the prompt and provisional ascertainment of the value of the land. But the scope and extent of the inquiry is left wholly in the discretion of the court, and a failure to hear the owners and claimants of the land, who may or may not be known at the time of the entry of the order, in no wise effects the validity of the order. . . . P.D. No. 42, however, effectively removes the discretion of the court in determining the provisional value. What is to be deposited is an amount equivalent to the assessed value for taxation purpose. 46 No hearing is required for that purpose. All that is needed is notice to the owner of the property sought to be condemned. 47 Clearly, therefore, respondent Judge either deliberately disregarded P.D. No. 42 or was totally unaware of its existence and the cases applying the same. In any event, petitioner deposited the provisional value fixed by the court. As a matter of right, it was entitled to be placed in possession of the property involved in the complaints at once, pursuant to both Section 2 of Rule 67 and P.D. No. 42. Respondent Court had the corresponding duty to order the sheriff or any other proper officer to forthwith place the petitioner in such possession. Instead of complying with the clear mandate of the law, respondent Judge chose to ignore and overlook it. Moreover, upon separate motions for reconsideration filed by the defendants in Civil Cases Nos. 5938 and 5939, he issued a new Order increasing the provisional values of the properties involved therein. No hearing was held on the motions. As a matter of fact, as the records show, the motion for reconsideration filed by defendants Jesus Gonzaga, et al. in Civil Case No. 5938 is dated 11 July 1990 48 while the Order granting both motions was issued the next day, 12 July 1990. 49 The motion for reconsideration in Civil Case No. 5938 does not even contain a notice of hearing. It is then a mere scrap of paper; it presents no question which merits the attention and consideration of the court. It is not even a mere motion for it does not comply with the rules, more particularly Sections 4 and 5, Rule 15 of the Rules of Court; the Clerk of Court then had no right to receive it. 50 There was, moreover, a much stronger reason why the respondent Court should not have issued the 12 July 1990 Order increasing the provisional values of the Gonzaga lots in Civil Cases Nos. 5938 and 5939. After having fixed these provisional values, albeit erroneously, and upon deposit by petitioner of the said amounts, respondent Judge lost, as was held in Manila Railroad Company vs. Paredes, 51 "plenary control over the order fixing the amount of the deposit, and has no power to annul, amend or modify it in matters of substance pending the course of the condemnation proceedings." The reason for this is that a contrary ruling would defeat the very purpose of the law which is to provide a speedy and summary procedure whereby the peaceable possession of the property subject of the expropriation proceedings "may be secured without the delays incident to prolonged and vexatious litigation touching the ownership and value of such lands, which should not be permitted to delay the progress of the work."

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Compounding the above error and the capriciousness with which it was committed is respondent Judge's refusal to place the petitioner in possession of the property or issue the writ of possession despite the fact that the latter had likewise deposited the additional amount called for by the 12 July 1990 Order. Instead, respondent Judge issued the 16 July 1990 Order directing the defendants to state in writing within twenty-four (24) hours whether or not they would accept and withdraw the amounts deposited by the petitioner for each of them " as final and full satisfaction of the value of their respective property (sic) affected by the expropriation" and stating at the same time that the writ will be issued after such manifestation and acceptance and receipt of the amounts. The above Order has absolutely no legal basis even as it also unjustly, oppressively and capriciously compels the petitioner to accept the respondent Judge's determination of the provisional value as the just compensation after the defendants shall have manifested their conformity thereto. He thus subordinated his own judgment to that of the defendants' because he made the latter the final authority to determine such just compensation. This Court ruled in Export Processing Zone Authority vs. Dulay, et al. 52 that the determination of just compensation in eminent domain cases is a judicial function; accordingly, We declared as unconstitutional and void, for being, inter alia, impermissible encroachment on judicial prerogatives which tends to render the Court inutile in a matter which, under the Constitution, is reserved to it for final determination, the method of ascertaining just compensation prescribed in P.D. Nos. 76 464, 794 and 1533, to wit: the market value as declared by the owner or administrator or such market value as determined by the assessor, whichever is lower in the first three (3) decrees, and the value declared by the owner or administrator or anyone having legal interest in the property or the value as determined by the assessor, pursuant to the Real Property Tax Code, whichever is lower, prior to the recommendation or decision of the appropriate Government office to acquire the property, in the last mentioned decree. If the legislature or the executive department cannot even impose upon the court how just compensation should be determined, it would be far more objectionable and impermissible for respondent Judge to grant the defendants in an eminent domain case such power and authority. Without perhaps intending it to be so, there is not only a clear case of abdication of judicial prerogative, but also a complete disregard by respondent Judge of the provisions of Rule 67 as to the procedure to be followed after the petitioner has deposited the provisional value of the property. It must be recalled that three (3) sets of defendants filed motions to dismiss 53 pursuant to Section 3, Rule 67 of the Rules of Court; Section 4 of the same rule provides that the court must rule on them and in the event that it overrules the motions or, when any party fails to present a defense as required in Section 3, it should enter an order of condemnation declaring that the petitioner has a lawful right to take the property sought to be condemned. As may be gleaned from the 25 June 1990 Order, the respondent Judge found that the petitioner has that right and that "there will be a (sic) paramount public interest to be served by the expropriation of the defendants' properties." Accordingly, considering that the parties submitted neither a compromise agreement as to the just compensation nor a stipulation to dispense with the appointment of commissioners and to leave the determination of just compensation to the court on the basis of certain criteria, respondent Judge was duty bound to set in motion Section 5 of Rule 67; said section directs the court to appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to it regarding the just compensation for the property sought to be taken. Such commissioners shall perform their duties in the manner provided for in Section 6; upon the filing of their report, the court may, after a period of ten (10) days which it must grant to the parties in order that the latter may file their objections to such report, and after hearing pursuant to Section 8, accept and render judgment in accordance therewith or, for cause shown, recommit the same to the commissioners for further report of facts. The court may also set aside the report and appoint new commissioners, or it may accept the report in part and reject it in part; and it may make such order or render such judgment as shall secure to the petitioner the property essential to the exercise of its right of condemnation, and to the defendant just compensation for the property so taken. Not satisfied with the foregoing violations of law and insisting upon his own procedure, respondent Judge declared in his Order of 18 July 1990 that the provisional amounts he fixed, later increased with respect to the properties of the Gonzagas, shall be considered as the full payment of the value of the properties after the defendants in Civil Cases Nos. 5938, 5939, 5940, 5942 and 5943 shall have filed their manifestations; he also ruled that the writ of possession will be issued only after the latter shall have received the said amounts. This Order and the records before this Court

do not disclose that the defendants in Civil Cases Nos. 5941 and 5944 filed any manifestation; yet, in the Order, respondent Judge whimsically and arbitrarily considered the so-called provisional values fixed therein as the final values. By such Order, the case was in fact terminated and the writ of execution then became a mere incident of an execution of a judgment. The right of the petitioner to take or enter into possession of the property upon the filing of the complaint granted by Section 2 of Rule 67 and P.D. No. 42 was totally negated despite compliance with the deposit requirement under the latter law. Nothing can justify the acts of respondent Judge. Either by design or sheer ignorance, he made a mockery of the procedural law on eminent domain by concocting a procedure which he believes to be correct. Judges must apply the law; they are not at liberty to legislate. As Canon 18 of the Canon of Judicial Ethics provides: A judge should be mindful that his duty his the application of general law to particular instances, that ours is a government of law and not of men, and that he violates his duty as a minister of justice under such a system if he seeks to do what he may personally consider substantial justice in a particular case and disregards the general law as he knows it to be binding on him. Such action may become a precedent unsettling accepted principles and may have detrimental consequences beyond the immediate controversy. He should administer his office with a due regard to the integrity of the system of the law itself, remembering that he is not a depositary of arbitrary power, but a judge under the sanction of law. They must be reminded once more that "the demands of fair, impartial, and wise administration of justice call for a faithful adherence to legal precepts on procedure which ensure to litigants the opportunity to present their evidence and secure a ruling on all the issues presented in their respective pleadings. "Short-cuts" in judicial processes are to be avoided where they impede rather than promote a judicious disposition of justice." 54 We agree with the petitioner that the ruling in the case of City Government of Toledo City vs. Fernandos, et al., 55does not apply to the instant petition because at the pre-trial conference held therein, the petitioner submitted to the discretion of the court as to the correct valuation, private respondents stated that they have no objections and are in conformity with the price of P30.00 per square meter as reasonable compensation for their land and the City Assessor informed the court of the current market and appraisal values of the properties in the area and the factors to be considered in the determination of such. The parties presented their documentary exhibits. In effect, therefore, the parties themselves agreed to submit to a judicial determination on the matter of just compensation and that judgment be rendered based thereon. In the instant case, no pre-trial was conducted; the proceedings were still at that state where the provisional value was yet to be determined; and the parties made no agreement on just compensation. WHEREFORE, the instant petition is GRANTED and the Orders of respondent Judge of 25 June 1990, 12 July 1990, 16 July 1990 and 18 July 1990 are hereby SET ASIDE and the temporary restraining order issued by this Court on 31 July 1990 directing respondent Judge to cease and desist from enforcing the questioned Orders is hereby made permanent. The respondent Judge is hereby directed to fix the provisional values of the parcels of land in Civil Cases Nos. 5938, 5939, 5940, 5941, 5942, 5943, and 5944 in accordance with P.D. No. 42; thereafter, the petitioner may retain in Savings Account No. 249-505865-7 with the Philippine National Bank, NAPOCOR Branch, Diliman, Quezon City, a sum equivalent to the provisional value as thus fixed, which the Bank shall hold subject to the orders and final disposition of the court a quo, and withdraw the balance. The respondent Judge is further directed to proceed with the above eminent domain cases without unnecessary delay pursuant to the procedure laid down in Rule 67 of the Rules of Court.

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Finally, respondent Judge is reminded to comply faithfully with the procedure provided for in the Rules of Court. Let a copy of this Decision be appended to his record. Costs against private respondents. IT IS SO ORDERED. Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado, Romero and Nocon, JJ., concur. Footnotes 1 Annex "A" of Petition. 2 Annex "B", Id. 3 Annex "C", Id. 4 Annex "D", Id. 5 Annex "E", Id. 6 Annex "F", Id. 7 Annex "G", Id. 8 Annexes "H", "I" and "J"; respectively, of Petition. 9 Annex "K", Id. 10 Annex "L", Id. 11 Annex "M", Id. 12 Annex "N" of Petition. 13 Annex "O", Id. 14 Annex "P", Id. 15 Annex "Q", Id. 16 Rollo, 7. 17 Annex "R" of Petition. 18 Annex "S", Id. 19 Annex "T" of Petition. 20 Annex "U", Id. 21 Annex "V" of Petition. 22 A copy of the motion is not attached to the petition, however, the Order of 12 July 1990 made reference to and resolved this motion. 23 Annex "W", op cit. 24 Annex "X" of Petition. 25 Annex "Y", Id. 26 Annex "Z" of Petition. Copies of the so-called Manifestation are not attached to the Petition. 27 Rollo, 140. 28 Id., 183, et seq. 29 Id., 211, et seq. 30 Id., 216, et seq. 31 Id., 236, et seq. 32 Id., 211-212. 33 160 SCRA 285 (G.R. No. L-45144, 15 April 1988). 34 Rollo, 261, et seq. 35 Supra. 36 Op. cit., 281. 37 Id., 276. 38 Id., 297, et seq. 39 Id., 308, et seq. 40 180 SCRA 576 (1989).

41 Citing Sections 1, 2 and 3, Rule 67 of the Rules of Court. 42 Citing Section 4, Rule 67; Nieto vs. Isip, 97 Phil. 31; Benguet Consolidated vs. Republic, 143 SCRA 466. 43 Citing Investments, Inc. vs. Court of Appeals, et al., 147 SCRA 334. 44 Citing Sections 5 to 8, Rule 67 of the Rules of Court. 45 31 Phil. 118, 132 (1915). 46 Haguisan vs. Emilia, et al., 131 SCRA 517. 47 Arce vs. Genato, 69 SCRA 544; San Diego vs. Valdellon, 80 SCRA 305. 48 Rollo, 133. 49 Annex "W" of Petition. 50 Bank of the Philippine Islands vs. Far East Molasses, Corp., G.R. 89125, 2 July 1991, 198 SCRA 689, citing Firme, et al. vs. Reyes, et al., 92 SCRA 713; Filipinas Fabricators & Sales, Inc., et al. vs. Magsino, et al., 157 SCRA 469. 51 Supra. 52 149 SCRA 305 (1987). 53 Annexes "H", "I" and "J" of Petition. 54 Constantino, et al., vs. Estenzo, et al., 65 SCRA 675. 55 Supra.

Penn Central Transportation Co v. City of New York SCOTUS - 1978 Facts

In 1965, NYC adopted its Landmarks Preservation Law. o After a building is designated a landmark, there are restrictions upon a property owner's options concerning use of the landmark site. o The Landmarks Preservation Commission must approve in advance any proposal to alter the exterior architectural features. Grand Central Terminal is owned by Penn Central and is a landmark under the preservation law. o Penn Central contracted with UGP to allow UGP to construct a multistory office building above the terminal. o UGP promised to pay $1M for each year of construction and $3M for each year thereafter. o Penn Central and UGP then applied to the commission for permission to construct the office building. The first plan (Breuer I) was rejected since the Commission thought it would look silly to balance a 55-story building atop an 8-story history landmark. The second plan (Breuer II Revised)was also rejected since it would strip off the exterior architectural features of the terminal. UGP and Penn Central appealed to the courts.

Procedural History

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Issues

Trial court found no taking. SCOTUS affirmed, no taking.

Dissent

Additionally, Penn Central might still be able to build some sort of building on top that would be approved; it just might not be able to be 50-stories high.

Does the Landmarks Preservation Law as applied to Grand Central Terminal constitute a taking?

Holding/Rule

The Landmarks Preservation Law as applied to Grand Central Terminal does not constitute a taking because it does not impede existing uses or prevent a reasonable return on investment.

Reasoning

The law imposes on Penn Central a substantial cost and no benefit except for the honor of the designation of a landmark. Two key words in the Takings Clause need to be examined o Property Valuable property rights have been destroyed here. The property has been subjected to a nonconsensual servitude not borne by any neighboring or similar properties. o Taken NYC has taken/destroyed substantial property rights from Penn Central. There are two exceptions where the destruction of property rights does not constitute a taking o The gov't may take property to prevent the property owner from using his property to injure others. The question is really one of nuisance and whether the forbidden use is dangerous to the safety, health, or welfare of others. Here, NYC is not prohibiting a nuisance. o The gov't may prohibit a use if the prohibition applies over a broad cross section of land and secures an average reciprocity of advantage. This is why zoning regulations are not takings. Here, a multimillion dollar loss is imposed on Penn Central and is not offset by any benefits flowing from preservation of the 400 buildings in NYC.

There is no set formula for determining when a taking occurs. o However, the Court has recognized several factors that have particular significance The economic impact of the regulation on the claimant. The extent to which the regulation has interfered with distinct investment-backed expectations. If the taking can be characterized as a physical invasion by gov't. The gov't can, however, execute laws or programs that adversely affect recognized economic values. o Even if economic harm is present, it is not a taking if it did not interfere with interests that were sufficiently bound up with the reasonable expectations of the claimant to constitute property for 5th amendment purposes. o When the state has reasonably concluded that the public welfare would be promoted by prohibiting particular contemplated uses of land, this Court has upheld land-use regulations that destroyed or adversely affected recognized real property interests. o In Miller v. Schoene, Court concluded that the state had not exceeded its powers by deciding upon the destruction of one class of property without compensation in order to save another which was of greater value to the public. o In Hadacheck v. Sebastian, Court upheld ruling that prohibited operation of brickyard since it was inconsistent with neighboring uses. o In Goldblatt v. Hempstead, Court held that a use restriction may constitute a taking if not reasonably necessary to the effectuation of a substantial public purpose or if it has an unduly harsh impact upon the owner's use of the property. o In Pennsylvania Coal Co. v. Mahon, Court said that a state statute that substantially furthers an important public policy may so frustrate distinct investment-backed expectations as to amount to a taking. The airspace surrounding a parcel of land cannot be considered a separate parcel for purposes of taking. o Taking jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated. The fact that the law has a more severe impact on some landowners than on others does not in itself mean that the law effects a taking. The law does not interfere with any of the present uses of the terminal.

U.S. Supreme Court Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) Ruckelshaus v. Monsanto Co. No. 83-196 Argued February 27, 1984 Decided June 26, 1984 467 U.S. 986 APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI Syllabus The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) authorizes the Environmental Protection Agency (EPA) to use data submitted by an applicant for registration of a covered product (hereinafter pesticide) in evaluating the application of a subsequent applicant, and to disclose publicly some of the submitted data. Under the dataconsideration provisions of 3, as amended in 1978, applicants now are granted a 10-year period of exclusive use for data on new active ingredients contained in pesticides registered after September 30, 1978, while all other data submitted after December 31, 1969, may be cited and considered in support of another application for 15 years after

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the original submission if the applicant offers to compensate the original submitter. If the parties cannot agree on the amount of compensation, either may initiate a binding arbitration proceeding, and if an original submitter refuses to participate in negotiations or arbitration, he forfeits his claim for compensation. Data that do not qualify for either the 10-year period of exclusive use or the 15-year period of compensation may be considered by EPA without limitation. Section 10, as amended in 1978, authorizes, in general, public disclosure of all health, safety, and environmental data even though it may result in disclosure of trade secrets. Appellee, a company headquartered in Missouri, is an inventor, producer, and seller of pesticides, and invests substantial sums in developing active ingredients for pesticides and in producing end-use products that combine such ingredients with inert ingredients. Appellee brought suit in Federal District Court for injunctive and declaratory relief, alleging, inter alia, that the data-consideration and data-disclosure provisions of FIFRA effected a "taking" of property without just compensation, in violation of the Fifth Amendment, and that the data-consideration provisions violated the Amendment because they effected a taking of property for a private, rather than a public, purpose. The District Court held that the challenged provisions of FIFRA are unconstitutional, and permanently enjoined EPA from implementing or enforcing those provisions. Held: 1. To the extent that appellee has an interest in its health, safety, and environmental data cognizable as a trade secret property right under Missouri law, that property right is protected by the Taking Clause of the Fifth Amendment. Despite their intangible nature, trade secrets have many of the characteristics of more traditional forms of property. Moreover, this Court has found other kinds of intangible interests to be property for purposes of the Clause. Pp. 467 U. S. 1000-1004. 2. EPA's consideration or disclosure of data submitted by appellee prior to October 22, 1972, or after September 30, 1978, does not effect a taking, but EPA's consideration or disclosure of certain health, safety, and environmental data constituting a trade secret under state law and submitted by appellee between those two dates may constitute a taking under certain conditions. Pp. 467 U. S. 1004-1014. (a) A factor for consideration in determining whether a governmental action short of acquisition or destruction of property has gone beyond proper "regulation" and effects a "taking" is whether the action interferes with reasonable investment-backed expectations. With respect to any health, safety, and environmental data that appellee submitted to EPA after the effective date of the 1978 FIFRA amendments (October 1, 1978), appellee could not have had a reasonable, investment-backed expectation that EPA would keep the data confidential beyond the limits prescribed in the amended statute itself. As long as appellee is aware of the conditions under which the data are submitted, and the conditions are rationally related to a legitimate Government interest, a voluntary submission of data in exchange for the economic advantages of a registration can hardly be called a taking. Pp. 467 U. S. 1005-1008. (b) Prior to its amendment in 1972 (effective October 22, 1972), FIFRA was silent with respect to EPA's authorized use and disclosure of data submitted to it in connection with an application for registration. Although the Trade Secrets Act provides a criminal penalty for a Government employee who discloses, in a manner not authorized by law, any trade secret information revealed to him during the course of his official duties, it is not a guarantee of confidentiality to submitters of data, and, absent an express promise, appellee had no reasonable, investmentbacked expectation that its information submitted to EPA before October 22, 1972, would remain inviolate in the EPA's hands. The possibility was substantial that the Federal Government at some future time would find disclosure to be in the public interest. A fortiori, the Trade Secrets Act, which penalizes only unauthorized disclosure, cannot be construed as any sort of assurance against internal agency use of submitted data during consideration of the application of a subsequent applicant for registration. Pp. 467 U. S. 1008-1010. (c) However, under the statutory scheme in effect between October 22, 1972, and September 30, 1978, a submitter was given an opportunity to protect its trade secrets from disclosure by designating them as trade secrets at the time of submission. The explicit governmental guarantee to registration applicants of confidentiality and exclusive use with

respect to trade secrets during this period formed the basis of a reasonable investment-backed expectation. If EPA, consistent with current provisions of FIFRA, were now to disclose such trade secret data or consider those data in evaluating the application of a subsequent applicant in a manner not authorized by the version of FIFRA in effect between 1972 and 1978, its actions would frustrate appellee's reasonable investment-backed expectation. If, however, arbitration pursuant to FIFRA were to yield just compensation for the loss in the market value of appellee's trade secret data suffered because of EPA's consideration of the data in connection with another application (no arbitration having yet occurred), then appellee would have no claim against the Government for a taking. Pp. 467 U. S. 1010-1014. 3. Any taking of private property that may occur in connection with EPA's use of data submitted to it by appellee between October 22, 1972, and September 30, 1978, is a taking for a "public use," rather than for a "private use," even though subsequent applicants may be the most direct beneficiaries. So long as a taking has a conceivable public character, the means by which it will be attained is for Congress to determine. Congress believed that the data-consideration provisions would eliminate costly duplication of research and streamline the registration process, making new end-use products available to consumers more quickly. Such a procompetitive purpose is within Congress' police power. With regard to FIFRA's data-disclosure provisions, the optimum amount of disclosure to assure the public that a product is safe and effective is to be determined by Congress, not the courts. Pp. 467 U. S. 1014-1016. 4. A Tucker Act remedy is available to provide appellee with just compensation for any taking of property that may occur as a result of FIFRA's data-consideration and data-disclosure provisions, and thus the District Court erred in enjoining EPA from acting under those provisions. Neither FIFRA nor its legislative history discusses the interaction between FIFRA and the Tucker Act, and inferring a withdrawal of Tucker Act jurisdiction would amount to a disfavored partial repeal by implication of the Tucker Act. FIFRA's provision that an original submitter of data forfeits his right to compensation from a later submitter for the use of the original submitter's data if he fails to participate in, or comply with the terms of, a negotiated or arbitrated compensation settlement merely requires a claimant to first seek satisfaction through FIFRA's procedure before asserting a Tucker Act claim. Pp. 467 U. S. 1016-1019. 5. Because the Tucker Act is available as a remedy for any uncompensated taking appellee may suffer as a result of the operation of the challenged provisions of FIFRA, appellee's challenges to the constitutionality of the arbitration and compensation scheme of FIFRA are not ripe for resolution. Pp. 467 U. S. 1019-1020.

G.R. No. L-48685 September 30, 1987 LORENZO SUMULONG and EMILIA VIDANES-BALAOING, petitioners, vs. HON. BUENAVENTURA GUERRERO and NATIONAL HOUSING AUTHORITY, respondents. CORTES, J.: On December 5, 1977 the National Housing Authority (NIIA) filed a complaint for expropriation of parcels of land covering approximately twenty five (25) hectares, (in Antipolo, Rizal) including the lots of petitioners Lorenzo Sumulong and Emilia Vidanes-Balaoing with an area of 6,667 square meters and 3,333 square meters respectively. The land sought to be expropriated were valued by the NHA at one peso (P1.00) per square meter adopting the market value fixed by the provincial assessor in accordance with presidential decrees prescribing the valuation of property in expropriation proceedings.

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Together with the complaint was a motion for immediate possession of the properties. The NHA deposited the amount of P158,980.00 with the Philippine National Bank, representing the "total market value" of the subject twenty five hectares of land, pursuant to Presidential Decree No. 1224 which defines "the policy on the expropriation of private property for socialized housing upon payment of just compensation." On January 17, 1978, respondent Judge issued the following Order: Plaintiff having deposited with the Philippine National Bank, Heart Center Extension Office, Diliman, Quezon City, Metro Manila, the amount of P158,980.00 representing the total market value of the subject parcels of land, let a writ of possession be issued. SO ORDERED. Pasig, Metro Manila, January 17, 1978. Buenaventura s. Guerrero Judge Petitioners filed a motion for reconsideration on the ground that they had been deprived of the possession of their property without due process of law. This was however, denied. Hence, this petition challenging the orders of respondent Judge and assailing the constitutionality of Pres. Decree No. 1224, as amended. Petitioners argue that: 1) Respondent Judge acted without or in excess of his jurisdiction or with grave abuse of discretion by issuing the Order of January 17, 1978 without notice and without hearing and in issuing the Order dated June 28, 1978 denying the motion for reconsideration. 2) Pres. Decree l224, as amended, is unconstitutional for being violative of the due process clause, specifically: a) The Decree would allow the taking of property regardless of size and no matter how small the area to be expropriated; b) "Socialized housing" for the purpose of condemnation proceeding, as defined in said Decree, is not really for a public purpose; c) The Decree violates procedural due process as it allows immediate taking of possession, control and disposition of property without giving the owner his day in court; d) The Decree would allow the taking of private property upon payment of unjust and unfair valuations arbitrarily fixed by government assessors; e) The Decree would deprive the courts of their judicial discretion to determine what would be the "just compensation" in each and every raise of expropriation. Indeed, the exercise of the power of eminent domain is subject to certain limitations imposed by the constitution, to wit:

Private property shall not be taken for public use without just compensation (Art. IV, Sec. 9); 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. IV, sec. 1). Nevertheless, a clear case of constitutional infirmity has to be established for this Court to nullify legislative or executive measures adopted to implement specific constitutional provisions aimed at promoting the general welfare. Petitioners' objections to the taking of their property subsumed under the headings of public use, just compensation, and due process have to be balanced against competing interests of the public recognized and sought to be served under declared policies of the constitution as implemented by legislation. 1. Public use a) Socialized Housing Petitioners contend that "socialized housing" as defined in Pres. Decree No. 1224, as amended, for the purpose of condemnation proceedings is not "public use" since it will benefit only "a handful of people, bereft of public character." "Socialized housing" is defined as, "the construction of dwelling units for the middle and lower class members of our society, including the construction of the supporting infrastructure and other facilities" (Pres. Decree No. 1224, par. 1). This definition was later expanded to include among others: a) The construction and/or improvement of dwelling units for the middle and lower income groups of the society, including the construction of the supporting infrastructure and other facilities; b) Slum clearance, relocation and resettlement of squatters and slum dwellers as well as the provision of related facilities and services; c) Slum improvement which consists basically of allocating homelots to the dwellers in the area or property involved, rearrangemeant and re-alignment of existing houses and other dwelling structures and the construction and provision of basic community facilities and services, where there are none, such as roads, footpaths, drainage, sewerage, water and power system schools, barangay centers, community centers, clinics, open spaces, parks, playgrounds and other recreational facilities; d) The provision of economic opportunities, including the development of commercial and industrial estates and such other facilities to enhance the total community growth; and e) Such other activities undertaken in pursuance of the objective to provide and maintain housing for the greatest number of people under Presidential Decree No, 757, (Pres. Decree No. 1259, sec. 1) The "public use" requirement for a and 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:

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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 play. As just noted, the constitution in at least two cases, to remove any doubt, determines what is public use. One is the expropriation of lands to be subdivided into small lots for resale at cost to individuals. The other is in the transfer, through the exercise of this power, of utilities and other private enterprise to the government. It is accurate to state then that at present whatever may be beneficially employed for the general welfare satisfies the requirement of public use [Heirs of Juancho Ardona v. Reyes, G.R. Nos. 60549, 60553-60555 October 26, 1983, 125 SCRA 220 (1983) at 234-5 quoting E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 523-4, (2nd ed., 1977) Emphasis supplied]. 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. As discussed in the above cited case of Heirs of Juancho Ardona: The restrictive view of public use may be appropriate for a nation which circumscribes the scope of government activities and public concerns and which possesses big and correctly located public lands that obviate the need to take private property for public purposes. Neither circumstance applies to the Philippines. We have never been a laissez faire State. And the necessities which impel the exertion of sovereign power are all too often found in areas of scarce public land or limited government resources. (p. 231) Specifically, urban renewal or redevelopment and the construction of low-cost housing is recognized as a public purpose, not only because of the expanded concept of public use but also because of specific provisions in the Constitution. The 1973 Constitution made it incumbent upon the State to establish, maintain and ensure adequate social services including housing [Art. 11, sec. 7]. The 1987 Constitution goes even further by providing that: The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living and an improved quality of life for all. [Art. II, sec. 9] The state shall by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of urban land reform and housing which will make available at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas. It shall also promote adequate employment opportunities to such citizens. In the implementation of such program the State shall respect the rights of small property owners. (Art. XIII, sec. 9, Emphaisis supplied) Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum, the general welfare. The public character of housing measures does not change because units in housing projects cannot be occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be made, for it is not possible to provide housing for are who need it, all at once. Population growth, the migration to urban areas and the mushrooming of crowded makeshift dwellings is a worldwide development particularly in developing countries. So basic and urgent are housing problems that the United Nations General Assembly proclaimed 1987 as the "International Year of Shelter for the Homeless" "to focus the attention of the international community on those problems". The General Assembly is Seriously concerned that, despite the efforts of Governments at the national and local levels and of international organizations, the driving conditions of the

majority of the people in slums and squatter areas and rural settlements, especially in developing countries, continue to deteriorate in both relative and absolute terms." [G.A. Res. 37/221, Yearbook of the United Nations 1982, Vol. 36, p. 1043-4] In the light of the foregoing, this Court is satisfied that "socialized housing" fans within the confines of "public use". It is, particularly important to draw attention to paragraph (d) of Pres. Dec. No. 1224 which opportunities inextricably linked with low-cost housing, or slum clearance, relocation and resettlement, or slum improvement emphasize the public purpose of the project. In the case at bar, the use to which it is proposed to put the subject parcels of land meets the requisites of "public use". The lands in question are being expropriated by the NHA for the expansion of Bagong Nayon Housing Project to provide housing facilities to low-salaried government employees. Quoting respondents: 1. The Bagong Nayong Project is a housing and community development undertaking of the National Housing Authority. Phase I covers about 60 hectares of GSIS property in Antipolo, Rizal; Phase II includes about 30 hectares for industrial development and the rest are for residential housing development. It is intended for low-salaried government employees and aims to provide housing and community services for about 2,000 families in Phase I and about 4,000 families in Phase II. It is situated on rugged terrain 7.5 kms. from Marikina Town proper; 22 Kms. east of Manila; and is within the Lungs Silangan Townsite Reservation (created by Presidential Proclamation No. 1637 on April 18, 1977). The lands involved in the present petitions are parts of the expanded/additional areas for the Bagong Nayon Project totalling 25.9725 hectares. They likewise include raw, rolling hills. (Rollo, pp. 266-7) The acute shortage of housing units in the country is of public knowledge. Official data indicate that more than one third of the households nationwide do not own their dwelling places. A significant number live in dwellings of unacceptable standards, such as shanties, natural shelters, and structures intended for commercial, industrial, or agricultural purposes. Of these unacceptable dwelling units, more than one third is located within the National Capital Region (NCR) alone which lies proximate to and is expected to be the most benefited by the housing project involved in the case at bar [See, National Census and Statistics Office, 1980 Census of Population and Housing]. According to the National Economic and Development Authority at the time of the expropriation in question, about "50 per cent of urban families, cannot afford adequate shelter even at reduced rates and will need government support to provide them with social housing, subsidized either partially or totally" [NEDA, FOUR YEAR DEVELOPMENT PLAN For 1974-1977, p. 357]. Up to the present, housing some remains to be out of the reach of a sizable proportion of the population" [NEDA, MEDIUM-TERM PHILIPPINE DEVELOPMENT PLAN 1987-1992, p. 240]. The mushrooming of squatter colonies in the Metropolitan Manila area as well as in other cities and centers of population throughout the country, and, the efforts of the government to initiate housing and other projects are matters of public knowledge [See NEDA, FOUR YEAR DEVELOPMENT PLAN For 1974-1977, pp. 357-361; NEDA, FIVE-YEAR PHILIPPINE DEVELOPMENT PLAN 1978-1982, pp. 215-228 NEDA, FIVE YEAR PHILIPPINE DEVELOPMENT PLAN 1983-1987, pp. 109-117; NEDA, MEDIUM TERM PHILIPPINE DEVELOPMENT PLAN 1987-1992, pp. 240-254].

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b) Size of Property Petitioners further contend that Pres. Decree 1224, as amended, would allow the taking of "any private land" regardless of the size and no matter how small the area of the land to be expropriated. Petitioners claim that "there are vast areas of lands in Mayamot, Cupang, and San Isidro, Antipolo, Rizal hundred of hectares of which are owned by a few landowners only. It is surprising [therefore] why respondent National Housing Authority [would] include [their] two man lots ..." In J.M. Tuason Co., Inc. vs. Land Tenure Administration [G. R. No. L-21064, February 18, 1970, 31 SCRA 413 (1970) at 428] this Court earlier ruled that expropriation is not confined to landed estates. This Court, quoting the dissenting opinion of Justice J.B.L. Reyes in Republic vs. Baylosis, [96 Phil. 461 (1955)], held that: The propriety of exercising the power of eminent domain under Article XIII, section 4 of our Constitution cannot be determined on a purely quantitative or area basis. Not only does the constitutional provision speak of lands instead of landed estates, but I see no cogent reason why the government, in its quest for social justice and peace, should exclusively devote attention to conflicts of large proportions, involving a considerable number of individuals, and eschew small controversies and wait until they grow into a major problem before taking remedial action. The said case of J.M. Tuason Co., Inc. departed from the ruling in Guido vs. Rural Progress Administration [84 Phil. 847 (1949)] which held that 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 benefited. Since then "there has evolved a clear pattern of adherence to the "number of people to be benefited test" " [Mataas na Lupa Tenants Association, Inc. v. Dimayuga, G.R. No. 32049, June 25,1984, 130 SCRA 30 (1984) at 39]. Thus, in Pulido vs. Court of Appeals [G.R. No. 57625, May 3, 1983, 122 SCRA 63 (1983) at 73], this Court stated that, "[i]t is unfortunate that the petitioner would be deprived of his landholdings, but his interest and that of his family should not stand in the way of progress and the benefit of the greater may only of the inhabitants of the country." The State acting through the NHA is vested with broad discretion to designate the particular property/properties to be taken for socialized housing purposes and how much thereof may be expropriated. Absent a clear showing of fraud, bad faith, or gross abuse of discretion, which petitioners herein failed to demonstrate, the Court will give due weight to and leave undisturbed the NHA's choice and the size of the site for the project. The property owner may not interpose objections merely because in their judgment some other property would have been more suitable, or just as suitable, for the purpose. The right to the use, enjoyment and disposal of private property is tempered by and has to yield to the demands of the common good. The Constitutional provisions on the subject are clear: The State shall promote social justice in all phases of national development. (Art. II, sec. 10) The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use and disposition of property and its increments. (Art, XIII, sec. 1) Indeed, the foregoing provisions, which are restatements of the provisions in the 1935 and 1973 Constitutions, emphasize: 3. Due Process ...the stewardship concept, under which private property is supposed to be held by the individual only as a trustee for the people in general, who are its real owners. As a mere steward, the individual must exercise his rights to the property not for his own exclusive and selfish benefit

but for the good of the entire community or nation [Mataas na Lupa Tenants Association, Inc. supra at 42-3 citing I. CRUZ, PHILIPPINE POLITICAL LAW, 70 (1983 ed.)]. 2. Just Compensation Petitioners maintain that Pres. Decree No. 1224, as amended, would allow the taking of private property upon payment of unjust and unfair valuations arbitrarily fixed by government assessors. In addition, they assert that the Decree would deprive the courts of their judicial discretion to determine what would be "just compensation". The foregoing contentions have already been ruled upon by this Court in the case of Ignacio vs. Guerrero (G.R. No. L-49088, May 29, 1987) which, incidentally, arose from the same expropriation complaint that led to this instant petition. The provisions on just compensation found in Presidential Decree Nos. 1224, 1259 and 1313 are the same provisions found in Presidential Decree Nos. 76, 464, 794 and 1533 which were declared unconstitutional in Export Processing Zone All thirty vs. Dulay (G.R. No. 5960 April 29, 1987) for being encroachments on prerogatives. This Court abandoned the ruling in National Housing Authority vs. Reyes [G.R. No. 49439, June 29,1983, 123 SCRA 245 (1983)] which upheld Pres. Decree No. 464, as amended by - Presidential Decree Nos. 794, 1224 and 1259. In said case of Export Processing Zone Authority, this Court pointed out that: The basic unfairness of the decrees is readily apparent. Just compensation means the value of the property at the time of the taking. It means a fair and full equivalent for the loss sustained. ALL the facts as to the condition of the property and its surroundings, its improvements and capabilities, should be considered. xxx xxx xxx Various factors can come into play in the valuation of specific properties singled out for expropriation. The values given by provincial assessors are usually uniform for very wide areas covering several barrios or even an entire total with the exception of the poblacion. Individual differences are never taken into account. The value of land is based on such generalities as its possible cultivation for rice, corn, coconuts, or other crops. Very often land described as directional has been cultivated for generations. Buildings are described in terms of only two or three classes of building materials and estimates of areas are more often inaccurate than correct. Tax values can serve as guides but cannot be absolute substitutes for just compensation. To say that the owners are estopped to question the valuations made by assessors since they had the opportunity to protest is illusory. The overwhelming mass of landowners accept unquestioningly what is found in the tax declarations prepared by local assessors or municipal clerks for them. They do not even look at, much less analyze, the statements. The Idea of expropriation simply never occurs until a demand is made or a case filed by an agency authorized to do so. (pp. 12-3)

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Petitioners assert that Pres. Decree 1224, as amended, violates procedural due process as it allows immediate taking of possession, control and disposition of property without giving the owner his day in court. Respondent Judge ordered the issuance of a writ of possession without notice and without hearing. The constitutionality of this procedure has also been ruled upon in the Export Processing Zone Authority case, viz: It is violative of due process to deny to the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. And it is repulsive to basic concepts of justice and fairness to allow the haphazard work of minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judiciously evaluated. (p. 13) On the matter of the issuance of a writ of possession, the ruling in the Ignacio case is reiterated, thus: [I]t is imperative that before a writ of possession is issued by the Court in expropriation proceedings, the following requisites must be met: (1) There must be a Complaint for expropriation sufficient in form and in substance; (2) A provisional determination of just compensation for the properties sought to be expropriated must be made by the trial court on the basis of judicial (not legislative or executive) discretion; and (3) The deposit requirement under Section 2, Rule 67 must be complied with. (p. 14) This Court holds that "socialized housing" defined in Pres. Decree No. 1224, as amended by Pres. Decree Nos. 1259 and 1313, constitutes "public use" for purposes of expropriation. However, as previously held by this Court, the provisions of such decrees on just compensation are unconstitutional; and in the instant case the Court finds that the Orders issued pursuant to the corollary provisions of those decrees authorizing immediate taking without notice and hearing are violative of due process. WHEREFORE, the Orders of the lower court dated January 17, 1978 and June 28, 1978 issuing the writ of possession on the basis of the market value appearing therein are annulled for having been issued in excess of jurisdiction. Let this case be remanded to the court of origin for further proceedings to determine the compensation the petitioners are entitled to be paid. No costs. SO ORDERED. Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin and Sarmiento, JJ., concur.

INOBAYA, NENITA ARCE, MAGNO ORTINEZ, ARMANDO PARAGAS, HIPOLITO ESTABILLO, FELICIANO FAUSTINO, VIRGILIO EDIC, JOSE TINGZON, JOSUE MARIANO, MARIA YERO, MA. DOLORES QUIZON, ISIDERO TAGUILIG, CIRIACO MENDOZA, JUAN ROMERO, JOSE LAGATA, FRUCTUSO PUSING, TEOFILO TERSOL, ANTONIO LACHICA, PIO RAJALES, REGINA VIERNES, JUAN ROMERO, DOMINGO EDIC, EDUARDA GONZALES, PABLO QUIRANTE, LEONORA SANTIA, MARIA RIVERA, ELENA ARCE, LAZARO GOMEZ, PEDRO MENDOZA, DOMINADOR ADAO, JUAN PANTERA, FRISCA MANDOT, SOCORRO SANTOS AND GLORIA JEBUNAN, respondents. Angara, Abello, Concepcion, Regala & Cruz for petitioner. Dennis A. Padernal for private respondents. City Legal Officer for respondent City of Manila. QUIASON, J.: This is an appeal by certiorari to review: (1) the decision of the Court of Appeals in CA-G.R. SP No. 23338, which dismissed the petition for certiorari filed by herein petitioner, assailing the orders of (a) respondent Judge Domingo D. Panis of the Regional Trial Court, Branch 41, Manila, in Civil Case No. 90-53531, and (b) respondent Judge Ricardo D. Diaz, of the Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-53346; and (2) its Resolution dated July 30, 1992, which denied the motion for reconsideration of the decision. Philippine Columbian Association, petitioner herein, is a non-stock, non-profit domestic corporation and is engaged in the business of providing sports and recreational facilities for its members. Petitioner's office and facilities are located in the District of Paco, Manila, and adjacent thereto, is a parcel of land consisting of 4,842.90 square meters owned by petitioner. Private respondents are the actual occupants of the said parcel of land, while respondents Antonio Gonzales, Jr. and Karlo Butiong were duly-elected councilors of the City of Manila. In 1982, petitioner instituted ejectment proceedings against herein private respondents before the metropolitan Trial Court of Manila. Judgment was rendered against the said occupants, ordering them to vacate the lot and pay reasonable compensation therefor. This judgment was affirmed by the Regional Trial Court, the Court of Appeals and subsequently by the Supreme Court in G.R. No. 85262. As a result of the favorable decision, petitioner filed before the Metropolitan Trial Court of Manila, a motion for execution of judgment, which was granted on April 9, 1990. A writ of demolition was later prayed and likewise issued by the same court on May 30, 1990. On June 8, 1990, private respondents filed with the Regional Trial Court, Branch 27, Manila, a petition for injunction and prohibition with preliminary injunction and restraining order against the Metropolitan Trial Court of Manila and petitioner herein (Civil Case No. 90-53346) to enjoin their ejectment from and the demolition of their houses on the premises in question.

G.R. No. L-106528 December 21, 1993 PHILIPPINE COLUMBIAN ASSOCIATION, petitioner, vs. THE HONORABLE DOMINGO D. PANIS as Judge, Regional Trial Court of Manila, Branch 41, THE HONORABLE RICARDO DIAZ, as Judge, Regional Trial Court of Manila, Branch 27, the CITY OF MANILA, ANTONIO GONZALES, JR., KARLO BUTIONG, LEONARDO AQUINO, EDILBERTO LOPEZ, ANTILANO FERRER, LEONCIA DAVILLO JAMERO, LUIS FERNANDEZ, PATRICIO DE GUZMAN, RICARDO DE LEON, VIRGILIO TORNERO, FAUSTO FERNANDEZ, DOMINGO MEREN, EDUARDA JACINTO, MAGDALENA VELEZ, LUSITO ALMADRONES, MYRNA BARREDO EBREO, FULGENCIO CORSINO, PEDRO VELASQUEZ, JUAN On June 28, 1990, the City of Manila filed a complaint docketed as Civil Case No. 90-53531 against petitioner before the Regional Trial Court, Branch 41, Manila, for the expropriation of the 4,842.90 square meter lot subject of the ejectment proceedings in Civil Case No. 90-53346. Petitioner, in turn, filed a motion to dismiss the complaint, alleging, inter alia, that the City of Manila had no power to expropriate private land; that the expropriation is not for public use and welfare; that the expropriation is politically motivated; and, that the deposit of P2 million in the City of Manila representing the provisional value of the land, was insufficient and was made under P.D. 1533, a law declared unconstitutional by the Supreme Court.

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On September 14, 1990, the Regional Trial Court, Branch 41, Manila, denied petitioner's motion to dismiss and entered an order of condemnation declaring that the expropriation proceeding was properly instituted in accordance with law. The Court also ordered the parties to submit, within five days, the names of their respective nominees as commissioners to ascertain just compensation for the land in question. Petitioner filed a motion for reconsideration of the order denying its motion to dismiss, and later a motion to defer compliance with the order directing the submission of the names of nominees to be appointed commissioners. The City of Manila, however, filed an ex-parte motion for the issuance of a writ of possession over the subject lot, mentioning the P2 million deposit with the Philippine National Bank, representing the provisional value of the land. In separate orders dated October 5 and 8, 1990, the court issued the writ of possession, and at the same time, denied petitioner's motion to defer compliance and motion for reconsideration. On September 21, 1990, as a result of the expropriation proceedings, the Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-53346 issued an order, granting the writ of preliminary injunction prayed for by the private respondents. A motion for reconsideration filed by petitioner was denied. Petitioner filed before the Court of Appeals a petition before the Court of Appeals a petition assailing the orders dated September 14, 1990, and October 5 and 8, 1990 of Branch 41 of the Regional Trial Court, and the Order dated September 21, 1990 of Branch 27 of the same court (CA-G.R. SP No. 23338). The Court of Appeals rendered a Decision on November 31, 1992, denying the petition, and a Resolution on July 30, 1992, denying consideration thereof. Hence, this petition. The land subject of this case is the 4,842.90 square meter lot, which was formerly a part of the Fabie Estate. As early as November 11, 1966, the Municipal Board of the City of Manila passed Ordinance No. 5971, seeking to expropriate the Fabie Estate. Through negotiated sales, the City of Manila acquired a total of 18,017.10 square meters of the estate, and thereafter subdivided the land into home lots and distributed the portions to the actual occupants thereof. The remaining area of 4,842.90 square meters, more or less, was sold in 1977 by its owner, Dolores Fabie-Posadas, to petitioner. Since the time of the sale, the lot has been occupied by private respondents. On 23, 1989, the City Council of Manila, with the approval of the Mayor, passed Ordinance No. 7704 for the expropriation of the 4,842.90 square meter lot. Petitioner claims that expropriation of the lot cannot prosper because: (1) the City of Manila has no specific power to expropriate private property under the 1987 Constitution; and (2) assuming that it has such power, this was exercised improperly and illegally in violation of the Public use requirement and petitioner's right to due process. Petitioner argues that under the 1987 Constitution, there must be a law expressly authorizing local governments to undertake urban land reform (Art. XIII, Sec. 9). Petitioner forgot that the Revised Charter of the City of Manila, R.A. No. 409, expressly authorizes the City of Manila to "condemn private property for public use" (Sec. 3) and "to acquire private land . . . and subdivide the same into home lots for sale on easy terms to city residents" (Sec. 100). The Revised Charter of the City of Manila expressly grants the City of Manila general powers over its territorial jurisdiction, including the power of eminent domain, thus:

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; Emphasis supplied). Section 100 of said Revised Charter authorizes the City of Manila to undertake urban land reform, thus: 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 for city residents, giving first priority to the bona fidetenants or occupants of said lands, and second priority to laborers and low-salaried employees. For the purpose of this section, the city may raise the 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 . . . (Emphasis supplied). 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 lowsalaried 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. No. 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 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 in particular, urban land reform and housing. This concept is specifically recognized in the 1987 Constitution which provides that: xxx xxx xxx The state shall, by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of urban land reform and housing which will make available at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas . It shall also promote adequate employment opportunities to such citizens. In the implementation of such program the State shall respect the rights of small property owners (Art. XIII, Sec. 9; Emphasis supplied). xxx xxx xxx The due process requirement in the expropriation of subject lot has likewise been complied with. Although the motion to dismiss filed by petitioner was not set for hearing as the court is required to do (National Housing Authority v. Valenzuela, 159 SCRA 396 [1988]), it never questioned the lack of hearing before the trial and appellate courts. It is only now before us that petitioner raises the issue of due process. Indeed, due process was afforded petitioner when it filed its motion for reconsideration of the trial court's order, denying its motion to dismiss.

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The Court of Appeals, in determining whether grave abuse of discretion was committed by respondent courts, passed upon the very same issues raised by petitioner in its motion to dismiss, which findings we uphold. Petitioner therefore cannot argue that it was denied its day in court. The amount of P2 million representing the provisional value of the land is an amount not only fixed by the court, but accepted by both parties. The fact remains that petitioner, albeit reluctantly, agreed to said valuation and is therefore estopped from assailing the same. It must be remembered that the valuation is merely provisional. The parties still have the second stage in the proceedings in the proper court below to determine specifically the amount of just compensation to be paid the landowner (Revised Rules of Court, Rule 67, Sec. 5; National Power Corporation v. Jocson, 206 SCRA 520 [1992] ). WHEREFORE, the petition is DENIED for lack of merit. SO ORDERED. Cruz, Davide, Jr. and Bellosillo, JJ., concur.

that places invested with unusual historical interest is a public use for which the power of eminent domain may be authorized . . . . In view thereof, it is believed that the National Historical Institute as an agency of the Government charged with the maintenance and care of national shrines, monuments and landmarks and the development of historical sites that may be declared as national shrines, monuments and/or landmarks, may initiate the institution of condemnation proceedings for the purpose of acquiring the lot in question in accordance with the procedure provided for in Rule 67 of the Revised Rules of Court. The proceedings should be instituted by the Office of the Solicitor General in behalf of the Republic. Accordingly, on 29 May 1989, the Republic, through the Office of the Solicitor-General, instituted a complaint for expropriation3 before the Regional Trial Court of Pasig for and in behalf of the NHI alleging, inter alia, that: Pursuant to Section 4 of Presidential Decree No. 260, the National Historical Institute issued Resolution No. 1, Series of 1986, which was approved on January, 1986 by the then Minister of Education, Culture and Sports, declaring the above described parcel of land which is the birthsite of Felix Y. Manalo, founder of the "Iglesia ni Cristo," as a National Historical Landrnark. The plaintiff perforce needs the land as such national historical landmark which is a public purpose. At the same time, respondent Republic filed an urgent motion for the issuance of an order to permit it to take immediate possession of the property. The motion was opposed by petitioners. After a hearing, the trial court issued, on 03 August 1989,4 an order fixing the provisional market (P54,120.00) and assessed (P16,236.00) values of the property and authorizing the Republic to take over the property once the required sum would have been deposited with the Municipal Treasurer of Taguig, Metro Manila. Petitioners moved to dismiss the complaint on the main thesis that the intended expropriation was not for a public purpose and, incidentally, that the act would constitute an application of public funds, directly or indirectly, for the use, benefit, or support of Iglesia ni Cristo, a religious entity, contrary to the provision of Section 29(2), Article VI, of the 1987 Constitution.5 Petitioners sought, in the meanwhile, a suspension in the implementation of the 03rd August 1989 order of the trial court. On 15 February 1990, following the filing by respondent Republic of its reply to petitioners' motion seeking the dismissal of the case, the trial court issued its denial of said motion to dismiss. 6 Five (5) days later, or on 20 February 1990,7 another order was issued by the trial court, declaring moot and academic the motion for reconsideration and/or suspension of the order of 03 August 1989 with the rejection of petitioners' motion to dismiss. Petitioners' motion for the reconsideration of the 20th February 1990 order was likewise denied by the trial court in its 16th April 1991 order.8 Petitioners then lodged a petition for certiorari and prohibition with the Court of Appeals. In its now disputed 15th January 1992 decision, the appellate court dismissed the petition on the ground that the remedy of appeal in the ordinary course of law was an adequate remedy and that the petition itself, in any case, had failed to show any grave abuse of discretion or lack of jurisdictional competence on the part of the trial court. A motion for the reconsideration of the decision was denied in the 23rd July 1992 resolution of the appellate court. We begin, in this present recourse of petitioners, with a few known postulates. Eminent domain, also often referred to as expropriation and, with less frequency, as condemnation, is, like police power and taxation, an inherent power of sovereignty. It need not be clothed with any constitutional gear to exist; instead, provisions in our Constitution on the subject are meant more to regulate, rather than to grant, the exercise of the power. Eminent domain is generally so described as "the highest and most exact idea of property remaining in the government" that may be acquired for some public purpose through a method in the nature of a forced purchase

G.R. No. 106440

January 29, 1996

ALEJANDRO MANOSCA, ASUNCION MANOSCA and LEONICA MANOSCA, petitioners, vs. HON. COURT OF APPEALS, HON. BENJAMIN V. PELAYO, Presiding Judge, RTC-Pasig, Metro Manila, Branch 168, HON. GRADUACION A. REYES CLARAVAL, Presiding Judge, RTC-Pasig, Metro Manila, Branch 71, and REPUBLIC OF THE PHILIPPINES, respondents. DECISION VITUG, J.: In this appeal, via a petition for review on certiorari, from the decision1 of the Court of Appeals, dated 15 January 1992, in CA-G.R. SP No. 24969 (entitled "Alejandro Manosca, et al. v. Hon. Benjamin V. Pelayo, et al."), this Court is asked to resolve whether or not the "public use" requirement of Eminent Domain is extant in the attempted expropriation by the Republic of a 492-square-meter parcel of land so declared by the National Historical Institute ("NHI") as a national historical landmark. The facts of the case are not in dispute. Petitioners inherited a piece of land located at P. Burgos Street, Calzada, Taguig. Metro Manila, with an area of about four hundred ninety-two (492) square meters. When the parcel was ascertained by the NHI to have been the birthsite of Felix Y. Manalo, the founder of Iglesia Ni Cristo, it passed Resolution No. 1, Series of 1986, pursuant to Section 42 of Presidential Decree No. 260, declaring the land to be a national historical landmark. The resolution was, on 06 January 1986, approved by the Minister of Education, Culture and Sports. Later, the opinion of the Secretary of Justice was asked on the legality of the measure. In his Opinion No. 133, Series of 1987, the Secretary of Justice replied in the affirmative; he explained: According to your guidelines, national landmarks are places or objects that are associated with an event, achievement, characteristic, or modification that makes a turning point or stage in Philippine history. Thus, the birthsite of the founder of the Iglesia ni Cristo, the late Felix Y. Manalo, who, admittedly, had made contributions to Philippine history and culture has been declared as a national landmark. It has been held

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by the State.9 It is a right to take or reassert dominion over property within the state for public use or to meet a public exigency. It is said to be an essential part of governance even in its most primitive form and thus inseparable from sovereignty. 10 The only direct constitutional qualification is that "private property shall not be taken for public use without just compensation." 11 This proscription is intended to provide a safeguard against possible abuse and so to protect as well the individual against whose property the power is sought to be enforced. Petitioners assert that the expropriation has failed to meet the guidelines set by this Court in the case of Guido v.Rural Progress Administration, 12 to wit: (a) the size of the land expropriated; (b) the large number of people benefited; and, (c) the extent of social and economic reform.13 Petitioners suggest that we confine the concept of expropriation only to the following public uses, 14 i.e., the . . . taking of property for military posts, roads, streets, sidewalks, bridges, ferries, levees, wharves, piers, public buildings including schoolhouses, parks, playgrounds, plazas, market places, artesian wells, water supply and sewerage systems, cemeteries, crematories, and railroads. This view of petitioners is much too limitative and restrictive. The court, in Guido, merely passed upon the issue of the extent of the President's power under Commonwealth Act No. 539 to, specifically, acquire private lands for subdivision into smaller home lots or farms for resale to bona fide tenants or occupants. It was in this particular context of the statute that the Court had made the pronouncement. The guidelines in Guido were not meant to be preclusive in nature and, most certainly, the power of eminent domain should not now be understood as being confined only to the expropriation of vast tracts of land and landed estates. 15 The term "public use," not having been otherwise defined by the constitution, must be considered in its general concept of meeting a public need or a public exigency. 16 Black summarizes the characterization given by various courts to the term; thus: Public Use. Eminent domain. The constitutional and statutory basis for taking property by eminent domain. For condemnation purposes, "public use" is one which confers same benefit or advantage to the public; it is not confined to actual use by public. It is measured in terms of right of public to use proposed facilities for which condemnation is sought and, as long as public has right of use, whether exercised by one or many members of public, a "public advantage" or "public benefit" accrues sufficient to constitute a public use. Montana Power Co. vs. Bokma, Mont. 457 P. 2d 769, 772, 773. Public use, in constitutional provisions restricting the exercise of the right to take private property in virtue of eminent domain, means a use concerning the whole community as distinguished from particular individuals. But each and every member of society need not be equally interested in such use, or be personally and directly affected by it; if the object is to satisfy a great public want or exigency, that is sufficient. Rindge Co. vs. Los Angeles County, 262 U.S. 700, 43 S.Ct. 689, 692, 67 L.Ed. 1186. The term may be said to mean public usefulness, utility, or advantage, or what is productive of general benefit. It may be limited to the inhabitants of a small or restricted locality, but must be in common, and not for a particular individual. The use must be a needful one for the public, which cannot be surrendered without obvious general loss and inconvenience. A "public use" for which land may be taken defies absolute definition for it changes with varying conditions of society, new appliances in the sciences, changing conceptions of scope and functions of government, and other differing circumstances brought about by an increase in population and new modes of communication and transportation. Katz v. Brandon, 156 Conn., 521, 245 A.2d 579,586. 17 The validity of the exercise of the power of eminent domain for traditional purposes is beyond question; it is not at all to be said, however, that public use should thereby be restricted to such traditional uses. The idea that "public use" is

strictly limited to clear cases of "use by the public" has long been discarded. This Court in Heirs of Juancho Ardona v. Reyes,18 quoting from Berman v. Parker (348 U.S. 25; 99 L. ed. 27), held: We do not sit to determine whether a particular housing project is or is not desirable. The concept of the public welfare is broad and inclusive. See DayBrite Lighting, Inc. v. Missouri, 342 US 421, 424, 96 L. Ed. 469, 472, 72 S Ct 405. The values it represents are spiritual as well as physical, aesthetic as well as monetary. It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled. In the present case, the Congress and its authorized agencies have made determinations that take into account a wide variety of values. It is no for us to reappraise them. If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way. Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear. For the power of eminent domain is merely the means to the end. See Luxton v. North River Bridge Co. 153 US 525, 529, 530, 38 L. ed. 808, 810, 14 S Ct 891; United States v. Gettysburg Electric R. Co. 160 US 668, 679, 40 L. ed. 576, 580, 16 S Ct 427. It has been explained as early as Sea v. Manila Railroad Co., 19 that: . . . A historical research discloses the meaning of the term "public use" to be one of constant growth. As society advances, its demands upon the individual increase and each demand is a new use to which the resources of the individual may be devoted. . . . for "whatever is beneficially employed for the community is a public use. Chief Justice Enrique M. Fernando states: 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 so any more. As long as the purpose of the taking is public, then the power of eminent domain comes into play. As just noted, the constitution in at least two cases, to remove any doubt, determines what is public use. One is the expropriation of lands to be subdivided into small lots for resale at cost to individuals. The other is the transfer, through the exercise of this power, of utilities and other private enterprise to the government. It is accurate to state then that at present whatever may be beneficially employed for the general welfare satisfies the requirement of public use. 20 Chief Justice Fernando, writing the ponencia in J.M. Tuason & Co. vs. Land Tenure Administration, 21 has viewed the Constitution a dynamic instrument and one that "is not to be construed narrowly or pedantically" so as to enable it "to meet adequately whatever problems the future has in store." Fr. Joaquin Bernas, a noted constitutionalist himself, has aptly observed that what, in fact, has ultimately emerged is a concept of public use which is just as broad as "public welfare." 22 Petitioners ask: But "(w)hat is the so-called unusual interest that the expropriation of (Felix Manalo's) birthplace become so vital as to be a public use appropriate for the exercise of the power of eminent domain" when only members of the Iglesia ni Cristo would benefit? This attempt to give some religious perspective to the case deserves little consideration, for what should be significant is the principal objective of, not the casual consequences that might follow from, the exercise of the power. The purpose in setting up the marker is essentially to recognize the distinctive contribution of the late Felix Manalo to the culture of the Philippines, rather than to commemorate his founding and leadership of the Iglesia ni Cristo.

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The practical reality that greater benefit may be derived by members of the Iglesia ni Cristo than by most others could well be true but such a peculiar advantage still remains to be merely incidental and secondary in nature. Indeed, that only a few would actually benefit from the expropriation of property does not necessarily diminish the essence and character of public use. 23 Petitioners contend that they have been denied due process in the fixing of the provisional value of their property. Petitioners need merely to be reminded that what the law prohibits is the lack of opportunity to be heard;24contrary to petitioners' argument, the records of this case are replete with pleadings 25 that could have dealt, directly or indirectly, with the provisional value of the property. Petitioners, finally, would fault respondent appellate court in sustaining the trial court's order which considered inapplicable the case of Noble v. City of Manila. 26 Both courts held correctly. The Republic was not a party to the alleged contract of exchange between the Iglesia ni Cristo and petitioners which (the contracting parties) alone, not the Republic, could properly be bound. All considered, the Court finds the assailed decision to be in accord with law and jurisprudence. WHEREFORE, the petition is DENIED. No costs. SO ORDERED. Padilla, Bellosillo, Kapunan and Hermosisima, Jr., JJ., concur.

14 15

Rollo, p. 42. See Province of Camarines Sur v. Court of Appeals, 222 SCRA 173. 16 See U.S. vs. Toribio, 15 Phil. 85. 17 Black's Law Dictionary, p. 1232. 18 125 SCRA 221. 19 42 Phil. 102. 20 Enrique Fernando, The Constitution of the Philippines, 2nd ed., pp. 523-524. 21 31 SCRA 413. 22 Joaquin Bernas, The Constitution of the Republic of the Philippines, Vol. 1, 1987 ed., p.282. 23 Philippine Columbian Association v. Panis, 228 SCRA 668. 24 Capuno v. Jaramillo, 234 SCRA 212.
25

Those pleadings include: (a) An urgent motion that the hearing on the fixing of the property's provisional value and the taking of possession by the Republic over the same be held in abeyance until after petitioners shall have received a copy of the complaint and summons (Rollo, pp. 86-88); (b) A motion to dismiss, dated 08 August 1989, seeking to dismiss the complaint instituted by the Republic on the ground that the expropriation in question is not for a public purpose and contrary to Section 29(a), Article VI, of the 1987 Constitution (Rollo, pp. 90-91); (c) A motion for reconsideration and/or suspension of the implementation of the 03 August 1989 Order (Rollo, pp. 93-95); and (d) A motion for reconsideration of the orders dated 15 and 20 February, 1990 (Rollo, pp. 103111).

Footnotes
1

Penned by Justice Nathanael De Pano, Jr., with the concurrence of Justices Luis Victor and Fortunato Vailoces.
26 2

"The National Museum and the National Historical Commission are hereby vested with the right to declare other such historical and cultural sites as National Shrines, Monuments, and/or Landmarks, in accordance with the guidelines set forth in R.A. 4846 and the spirit of this Decree."
3 4 5

The Noble case holds that where there is a valid and subsisting contract between the owners of the property and the expropriating authority, there is no need or reason for expropriation (67 Phil. 1).

Rollo, pp. 77-82. Rollo, pp. 66-67. Sec. 29. . . .

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

(2) No public money or property shall be appropriated, applied, paid, or employed, directly or indirectly, for the use, benefit, or support of any sect, church, denomination, sectarian institution, or system of religion, or of any priest, preacher, minister, or other religious teacher, or dignitary as such, except when such priest, preacher, minister, or dignitary is assigned to the armed forces, or to any penal institution, or government orphanage or leprosarium.
6 7

Rollo, pp. 68-69. Rollo, p. 70. 8 Rollo, pp. 71-76. 9 Black's Law Dictionary, 6th ed., p. 523. 10 Visayan Refining Company vs. Camus, 40 Phil. 550. 11 Sec. 9, Art. III, 1987 Constitution. 12 84 Phil. 847. 13 Rollo, pp. 38-39.

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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 non-agricultural 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

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thereof, which requires the approval of the Department of Agrarian Reform before a parcel of land can be reclassified from an agricultural to a non-agricultural 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. SO ORDERED.

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Cruz, Grio-Aquino and Bellosillo, JJ., concur.

On August 29, 2000, petitioners filed with the RTC an action for declaration of nullity of Ordinance No. 1843 for being unconstitutional. The trial court rendered its decision on July 1, 2002 dismissing the complaint filed by petitioners whose subsequent motion for reconsideration was likewise denied on August 26, 2002. In this appeal, petitioners argue that Ordinance No. 1843 is unconstitutional as it sanctions the expropriation of their property for the purpose of selling it to the squatters, an endeavor contrary to the concept of "public use" contemplated in the Constitution.8 They allege that it will benefit only a handful of people. The ordinance, according to petitioners, was obviously passed for politicking, the squatters undeniably being a big source of votes. 1avvphi1 In sum, this Court is being asked to resolve whether or not the intended expropriation by the City of Cebu of a 4,048square-meter parcel of land owned by petitioners contravenes the Constitution and applicable laws. Under Section 48 of RA 7160,9 otherwise known as the Local Government Code of 1991,10 local legislative power shall be exercised by the Sangguniang Panlungsod of the city. The legislative acts of the Sangguniang Panlungsod in the exercise of its lawmaking authority are denominated ordinances. Local government units have no inherent power of eminent domain and can exercise it only when expressly authorized by the legislature.11 By virtue of RA 7160, Congress conferred upon local government units the power to expropriate. Ordinance No. 1843 was enacted pursuant to Section 19 of RA 7160: SEC. 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 xxx. (italics supplied). Ordinance No. 1843 which authorized the expropriation of petitioners lot was enacted by the SP of Cebu City to provide socialized housing for the homeless and low-income residents of the City. However, while we recognize that housing is one of the most serious social problems of the country, local government units do not possess unbridled authority to exercise their power of eminent domain in seeking solutions to this problem. There are two legal provisions which limit the exercise of this power: (1) 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;12 and (2) private property shall not be taken for public use without just compensation. 13 Thus, the exercise by local government units of the power of eminent domain is not absolute. In fact, Section 19 of RA 7160 itself explicitly states that such exercise must comply with the provisions of the Constitution and pertinent laws. The exercise of the power of eminent domain drastically affects a landowners right to private property, which is as much a constitutionally-protected right necessary for the preservation and enhancement of personal dignity and intimately connected with the rights to life and liberty.14 Whether directly exercised by the State or by its authorized agents, the exercise of eminent domain is necessarily in derogation of private rights.15 For this reason, the need for a painstaking scrutiny cannot be overemphasized. The due process clause cannot be trampled upon each time an ordinance orders the expropriation of a private individuals property. The courts cannot even adopt a hands-off policy simply because public use or public purpose is invoked by an ordinance, or just compensation has been fixed and determined. In De Knecht vs. Bautista,16 we said: It is obvious then that a land-owner is covered by the mantle of protection due process affords. It is a mandate of reason. It frowns on arbitrariness, it is the antithesis of any governmental act that smacks of

G.R. No. 155746

October 13, 2004

DIOSDADO LAGCAO, DOROTEO LAGCAO and URSULA LAGCAO, petitioners, vs. JUDGE GENEROSA G. LABRA, Branch 23, Regional Trial Court, Cebu, and the CITY OF CEBU, respondent. DECISION CORONA, J.: Before us is a petition for review of the decision dated July 1, 2002 of the Regional Trial Court, Branch 23, Cebu City1 upholding the validity of the City of Cebus Ordinance No. 1843, as well as the lower courts order dated August 26, 2002 denying petitioners motion for reconsideration. In 1964, the Province of Cebu donated 210 lots to the City of Cebu. One of these lots was Lot 1029, situated in Capitol Hills, Cebu City, with an area of 4,048 square meters. In 1965, petitioners purchased Lot 1029 on installment basis. But then, in late 1965, the 210 lots, including Lot 1029, reverted to the Province of Cebu.2Consequently, the province tried to annul the sale of Lot 1029 by the City of Cebu to the petitioners. This prompted the latter to sue the province for specific performance and damages in the then Court of First Instance. On July 9, 1986, the court a quo ruled in favor of petitioners and ordered the Province of Cebu to execute the final deed of sale in favor of petitioners. On June 11, 1992, the Court of Appeals affirmed the decision of the trial court. Pursuant to the ruling of the appellate court, the Province of Cebu executed on June 17, 1994 a deed of absolute sale over Lot 1029 in favor of petitioners. Thereafter, Transfer Certificate of Title (TCT) No. 129306 was issued in the name of petitioners and Crispina Lagcao.3 After acquiring title, petitioners tried to take possession of the lot only to discover that it was already occupied by squatters. Thus, on June 15, 1997, petitioners instituted ejectment proceedings against the squatters. The Municipal Trial Court in Cities (MTCC), Branch 1, Cebu City, rendered a decision on April 1, 1998, ordering the squatters to vacate the lot. On appeal, the RTC affirmed the MTCCs decision and issued a writ of execution and order of demolition.1avvphi1 However, when the demolition order was about to be implemented, Cebu City Mayor Alvin Garcia wrote two letters4to the MTCC, requesting the deferment of the demolition on the ground that the City was still looking for a relocation site for the squatters. Acting on the mayors request, the MTCC issued two orders suspending the demolition for a period of 120 days from February 22, 1999. Unfortunately for petitioners, during the suspension period, the Sangguniang Panlungsod (SP) of Cebu City passed a resolution which identified Lot 1029 as a socialized housing site pursuant to RA 7279.5 Then, on June 30, 1999, the SP of Cebu City passed Ordinance No. 17726 which included Lot 1029 among the identified sites for socialized housing. On July, 19, 2000, Ordinance No. 18437 was enacted by the SP of Cebu City authorizing the mayor of Cebu City to initiate expropriation proceedings for the acquisition of Lot 1029 which was registered in the name of petitioners. The intended acquisition was to be used for the benefit of the homeless after its subdivision and sale to the actual occupants thereof. For this purpose, the ordinance appropriated the amount of P6,881,600 for the payment of the subject lot. This ordinance was approved by Mayor Garcia on August 2, 2000.

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whim or caprice. It negates state power to act in an oppressive manner. It is, as had been stressed so often, the embodiment of the sporting idea of fair play. In that sense, it stands as a guaranty of justice. That is the standard that must be met by any governmental agency in the exercise of whatever competence is entrusted to it. As was so emphatically stressed by the present Chief Justice, "Acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity. xxx. The foundation of the right to exercise eminent domain is genuine necessity and that necessity must be of public character.17 Government may not capriciously or arbitrarily choose which private property should be expropriated. In this case, there was no showing at all why petitioners property was singled out for expropriation by the city ordinance or what necessity impelled the particular choice or selection. Ordinance No. 1843 stated no reason for the choice of petitioners property as the site of a socialized housing project. Condemnation of private lands in an irrational or piecemeal fashion or the random expropriation of small lots to accommodate no more than a few tenants or squatters is certainly not the condemnation for public use contemplated by the Constitution. This is depriving a citizen of his property for the convenience of a few without perceptible benefit to the public.18 RA 7279 is the law that governs the local expropriation of property for purposes of urban land reform and housing. Sections 9 and 10 thereof 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 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 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 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. (Emphasis supplied). 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: xxx. (Emphasis supplied).

In the recent case of Estate or Heirs of the Late Ex-Justice Jose B.L. Reyes et al. vs. City of Manila,19 we ruled that the above-quoted provisions are strict limitations on the exercise of the power of eminent domain by local government units, especially with respect to (1) the order of priority in acquiring land for socialized housing and (2) the resort to expropriation proceedings as a means to acquiring it. Private lands rank last in the order of priority for purposes of socialized housing. In the same vein, expropriation proceedings may be resorted to only after the other modes of acquisition are exhausted. Compliance with these conditions is mandatory because these are the only safeguards of oftentimes helpless owners of private property against what may be a tyrannical violation of due process when their property is forcibly taken from them allegedly for public use. We have found nothing in the records indicating that the City of Cebu complied strictly with Sections 9 and 10 of RA 7279. Ordinance No. 1843 sought to expropriate petitioners property without any attempt to first acquire the lands listed in (a) to (e) of Section 9 of RA 7279. Likewise, Cebu City failed to establish that the other modes of acquisition in Section 10 of RA 7279 were first exhausted. Moreover, prior to the passage of Ordinance No. 1843, there was no evidence of a valid and definite offer to buy petitioners property as required by Section 19 of RA 7160.20 We therefore find Ordinance No. 1843 to be constitutionally infirm for being violative of the petitioners right to due process. It should also be noted that, as early as 1998, petitioners had already obtained a favorable judgment of eviction against the illegal occupants of their property. The judgment in this ejectment case had, in fact, already attained finality, with a writ of execution and an order of demolition. But Mayor Garcia requested the trial court to suspend the demolition on the pretext that the City was still searching for a relocation site for the squatters. However, instead of looking for a relocation site during the suspension period, the city council suddenly enacted Ordinance No. 1843 for the expropriation of petitioners lot. It was trickery and bad faith, pure and simple. The unconscionable manner in which the questioned ordinance was passed clearly indicated that respondent City transgressed the Constitution, RA 7160 and RA 7279. For an ordinance to be valid, it must not only be within the corporate powers of the city or municipality to enact but must also be passed according to the procedure prescribed by law. It must be in accordance with certain wellestablished basic principles of a substantive nature. These principles require that an ordinance (1) must not contravene the Constitution or any statute (2) must not be unfair or oppressive (3) must not be partial or discriminatory (4) must not prohibit but may regulate trade (5) must be general and consistent with public policy, and (6) must not be unreasonable.21 Ordinance No. 1843 failed to comply with the foregoing substantive requirements. A clear case of constitutional infirmity having been thus established, this Court is constrained to nullify the subject ordinance. We recapitulate: first, as earlier discussed, the questioned ordinance is repugnant to the pertinent provisions of the Constitution, RA 7279 and RA 7160; second, the precipitate manner in which it was enacted was plain oppression masquerading as a pro-poor ordinance; third, the fact that petitioners small property was singled out for expropriation for the purpose of awarding it to no more than a few squatters indicated manifest partiality against petitioners, and fourth, the ordinance failed to show that there was a reasonable relation between the end sought and the means adopted. While the objective of the City of Cebu was to provide adequate housing to slum dwellers, the means it employed in pursuit of such objective fell short of what was legal, sensible and called for by the circumstances.

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Indeed, experience has shown that the disregard of basic liberties and the use of short-sighted methods in expropriation proceedings have not achieved the desired results. Over the years, the government has tried to remedy the worsening squatter problem. Far from solving it, however, governments kid -glove approach has only resulted in the multiplication and proliferation of squatter colonies and blighted areas. A pro-poor program that is well-studied, adequately funded, genuinely sincere and truly respectful of everyones basic rights is what this problem calls for, not the improvident enactment of politics-based ordinances targeting small private lots in no rational fashion. WHEREFORE, the petition is hereby GRANTED. The July 1, 2002 decision of Branch 23 of the Regional Trial Court of Cebu City is REVERSED and SET ASIDE. SO ORDERED. Davide, Jr., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio Morales*, Callejo, Sr., Azcuna*, Tinga, and Chico-Nazario*, JJ., concur. Footnotes
*

18 19

Urban Estates, Inc. vs. Montesa, 88 Phil. 348 (1951). G.R. Nos. 132431 and 137146, February 13, 2004.

20

Sec 19. Eminent Domain "xxx. 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: xxx."
21

Tatel vs. Municipality of Virac, G.R. No. 40243, 11 March 1992, 207 SCRA 157.

G.R. No. 7749

September 9, 1913

on leave Presided by Judge Generosa G. Labra. The records of the case do not state why and how the lots reverted to the Province of Cebu. 3 Now deceased. 4 Dated February 22, 1999 and May 20, 1999. 5 The Urban Development and Housing Act of 1992 (Lina Law).
1 2 6

THE CITY OF MANILA, plaintiff-appellant, vs. BALBINA ESTRADA Y SARMIENTO, minor and only heiress of Concepcion Sarmiento, deceased, and ARISTON ESTRADA, personally, and as administrator, defendants-appellants. City Attorney Adams for plaintiff-appellant. Ariston Estrada for defendants-appellants. TRENT, J.: After a careful examination of the entire record in this case and the law applicable to the questions raised therein, we are of the opinion that P10 per square meter is a just compensation for the land taken. Without prejudice to filing a more extended opinion in which our reasons will be set forth in full, judgment will be entered accordingly, without costs. So ordered. A short opinion was handed down in this case on February 18, 1913, and in accordance with the reservation made therein, the court now proceeds to write an extended opinion setting forth the reasons for its judgment in the case. The city of Manila sought to expropriate an entire parcel of land with its improvements for use in connection with a new market at that time being erected in the district of Paco. A complaint was filed setting forth the necessary allegations, answer joined, and commissioners were appointed, who, after viewing the premises and receiving evidence, and being unable to agree, submitted two reports to the court. The court duly rendered its decision, confirming the majority report as to the improvements, but reducing the price of the land from P20 per square meter, as fixed by the majority report, to P15 per square meter. Motions for a new trial having been made by both parties and denied by the court, both parties appealed from that part of the decision fixing the value of the land at P15 per square meter. The record was therefore elevated to this court for a review of the evidence and assigned errors of the parties. This court held that P10 per square meter was just compensation for the land, and rendered its decision accordingly. The court justifies such action, first, upon the ground that the great preponderance of the evidence submitted to the commissioners showed that P10 per square meter was just compensation for the land taken, and, second, upon the power of the court to revise the report of the commissioners when the amount awarded is grossly inadequate or grossly excessive.

Entitled, "AN ORDINANCE FURTHER AMENDING ORDINANCE NO. 1656 AS AMENDED BY ORDINANCE NO. 1684 OTHERWISE KNOWN AS THE 1966 REVISED ZONING ORDINANCE OF THE CITY OF CEBU, BY INCORPORATING THEREIN A NEW DISTRICT CALLED SOCIALIZED HOUSING SITES."
7

Entitled "AN ORDINANCE AUTHORIZING THE CITY MAYOR OF CEBU CITY TO INSTITUTE EXPROPRIATION PROCEEDINGS AGAINST MRS. CRISPINA VDA. DE LAGCAO, OWNER OF LOT NO. 1029 LOCATED AT GREEN VALLEY, CAPITOL SITE, CEBU CITY, TO ACQUIRE THE SAME FOR PUBLIC USE OR PURPOSE."
8

Article IV, Section 9 "Private property shall not be taken for public use without just compensation."

Section 48. Local Legislative Power Local legislative power shall be exercised by the sangguniang panlalawigan for the province; the sangguniang panlungsod for the city; the sangguniang bayan for the municipality; and the sangguniang barangay for the barangay.
10 11 12

The law was approved on October 10, 1991 and it became effective on January 1, 1992. City of Cincinnati vs. Vester, 281 US 439, 74 L. ed 950, 50 S Ct. 360. Article 3, Section 1, 1987 Constitution. 13 Article 3, Section 9, 1987 Constitution. 14 Joaquin G. Bernas, The Constitution of the Republic of the Philippines: A Commentary, vol. 1. p. 43, 1987. 15 City of Manila vs. Chinese Community of Manila, 40 Phil. 349, 1919. 16 G.R. No. L-51078, 30 October 1980, 100 SCRA 660. 17 City of Manila vs. Chinese Community of Manila, supra.

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A brief resume of the evidence in regard to the value of the land will first be made. The land was bounded by Calle Herran, the Paco Estero, the market site, and Calle Looban. The several sessions of the commissioners at which evidence was heard took place between September 19 and October 3, 1911. George C. Sellner, a real estate agent, testified that he was familiar with real estate values in the city of Manila. He stated that the land in question, fronting as it did on Calles Herran and Looban and the Paco Estero, was worth 60 per cent more than other land near by, and placed its value at P10 per square meter. He stated that he had carried on negotiations with regard to a parcel of land situated on the opposite side of the estero and fronting Herran; that he was offering this land for sale at P5.50 per square meter, but that the owner succeeded in obtaining P6 per square meter, and that the sale had been consummated only about thirty days prior to the date of the hearing. The witness stated that this land was of about the same elevation as the parcel sought to be expropriated, but that it had no improvements, being used for the storage of coal. Enrique Brias, another real estate man, testified that P10 was a good price for the land. He stated that he was the owner of the land on the opposite side of the estero which had been sold for P6 per square meter about one month prior to the hearing, but that this land was not in such a good commercial location. Mr. Powell, of the Internal Revenue Bureau, testified that the Estrada land was appraised for taxation at P6 per square meter; that prior to 1911 it had been appraised at about P4 per square meter. The president of the Municipal Board of the city of Manila testified that a parcel of land on the opposite side of Calle Herran but on the same side of the Paco Estero, owned by one Clarke, had been expropriated by the city in 1908. He stated that commissioners were appointed who duly rendered their report to the court, but as it was accepted by both parties, no further litigation was necessary. In this case it seems that the land desired by the city was part of a parcel fronting on Calle Herran, whose other boundaries were the Paco Estero, some private property, and a small callejon. The portion desired by the city compromised the entire Herran frontage of the owner. The commissioners appraised the total area, consisting of 1,399.03 square meters at P6.50 per square meter. The city desired only 353.21 square meters facing on Calle Herran, and the commissioners therefore found consequential damages to the remained, due to depriving it of its Herran frontage, to be P4.50 per square meter. These consequential damages were included in the price paid by the city for the land taken, making the apparent price of the 353.21 square meters P7,002.05, or P19.85 per square meter. To the same effect was the testimony of Judge Camus of the municipal court, who at the time of the Clarke transaction was city attorney. Ariston Estrada, one of the defendants, testified as follows: As to the market value of the land (the subject of the present case), whatever may be its price on the market, in my opinion, by comparing previous sales of land in the same or similar conditions and circumstances, and having in mind the only sale which has been made in twenty years of land equally or similarly situated to this, I believe that it is all that can serve as a standard to ascertain the value in the market of the land in question. xxx xxx xxx

ago; and, on the one hand, property values have increased in the last three years, and, on other hand, with the opening of the market, property values along Calles Herran and Looban have increased. From the record it appears that the improvements on the land consisted of a camarin in fairly good condition, appraised at P4,500; a dwelling house in very bad condition, appraised at P1,500; the former being occupied by tenants and the latter by the defendants Estrada and his family. The remaining improvements consisted of a stone wall surrounding the lot, appraised at P1,020, and some trees, appraised at P150. The majority report of the committee, fixing the value of the land at P20 per square meter, states: And lastly, with respect to the value of the land, the evidence is very contradictory. While the evidence of the plaintiff tends to show that the value of the land does not exceed P10 per square meter, that of the defendants, on the contrary, maintains that the value of the land is more than P19.85 per square meter, and it is contended by the defendants that the true market value of the land in question is P25 per square meter. The lower court, in arriving at its decision to reduce the price of the land to P15, discussed the Clarke transaction at some length and concluded as follows: The court therefore understands that the price which the plaintiff accepted three years ago for a piece of land less suited for commercial purposes than that in question, without proof that since then the price of land in the place where the tract here considered is situated has fallen, ought to serve as criterion for fixing the value of the land that is the subject matter of the present expropriation. xxx xxx xxx

So, the court holds it just and equitable to take as a compromise between the two conflicting majority and minority opinions of the three commissioners the average of the two prices they have fixed per square meter for the land in question, P20 and P10, respectively, fixing upon P15 per square meter. From this review of the evidence it appears that two disinterested witnesses for the plaintiff corporation testified that the land was worth P10 per square meter, their statements being based upon the prices obtained for land in the open market in the vicinity. The defendant Estrada testified that it was worth P25 per square meter, basing his statement on the price obtained three years previously by the owner of the parcel on the opposite side of Calle Herran of P19.85 per square meter. It also clearly appears that the price fixed in the majority report of the commissioners was based principally upon this same transaction, and that the compromise price fixed by the court was based upon the evidence of this sale and the testimony of the two witnesses for the plaintiff who fixed the price of P10 per square meter. Attorney for the plaintiff corporation objected to the introduction of all evidence with reference to the Clarke transaction, and so much depending upon it, it is proper to inquire as to its competency and relevancy. The general rule that the market value of the land taken is the just compensation to which the owner of condemned property is entitled under the law meets with our unqualified approval. Such was our holding in Manila R. Co. vs. Fabie (17 Phil. Rep., 206). But as stated in Packard vs. Bergen Neck Ry. Co. (54 N. J. L., 553; 25 A., 506): The difficulty is not with the rule, but with its application. For the determination of the market value of land, which is 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 therefore, is beyond doubt difficult. The test is logically and legally correct, but it cannot be applied to land with the accuracy with which it can

With reference to the land, I believe I am as well as informed as the witnesses for the plaintiff who have testified, and I estimate that the land in question should be worth on the market at this time P25 per square meter for the reason that about P19.85 per square was paid for Mr. Clarke's land and this was three years

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be applied to stocks, bonds, and personal property generally. Still, it is this test which admittedly must be applied, even when the value of the land and the damages are found in separate sums. It is a very difficult matter to limit the scope of the inquiry as to what the market value of condemned property is. The market value of a piece of land is attained by a consideration of all those facts which make it commercial valuable. Whether evidence considered by those whose duty it is to appraise the land is of that nature is often a very difficult matter to decide. The Supreme Court of the United States, in a carefully worded statement, marks out the scope of the inquiry as follows: In determining the value of land appropriated for public purposes, the same considerations are to be regarded as in a sale of property between private parties. The inquiry in such cases must be what is the property worth in the market, viewed not merely with reference to the uses to which it is at that time applied, but with reference to the uses to which it is plainly adapted; that is to say, what is it worth from its availability for valuable uses? . . . As a general thing, we should say that the compensation to the owner is to be estimated by reference to the uses for which the property is suitable, having regard to the existing business or wants of the community, or such as may be reasonably expected in the immediate future. (98 U.S. 403; 25 L. ed., 206.) This passage is quoted with approval in the late case of St. Louis I. M. & S. R. Co. vs. Theodore Maxfield Co. (94 Ark., 135; 26 L.R.A. (N. S.), 111; 126 S. W., 83) a very well considered case. The supreme court of Missouri has also formulated an exceedingly clear statement of the matter in the Stock Yards case (120 Mo., 541): The market value of the property means its actual value, independent of the location of plaintiff's road thereon, that is, the fair value of the property as between one who wants to purchase and one who wants to sell it; not what could be obtained for it in peculiar circumstances when greater than its fair price could be obtained; not its speculative value; not the value obtained through the necessities of another. Nor, on the other hand, is it to be limited to that price which the property would bring when forced off at auction under the hammer. The question is, if the defendant wanted to sell its property, what could be obtained for it upon the market from the parties who wanted to buy and would give its full value. (Approved in Met. Street Ry. Co.vs. Walsh, 197 Mo., 392, 418; 94 S. W., 860.) These views are practically in accord with Lewis on Eminent Domain (2d ed.), paragraph 478, who state the rule as follows: The market value of property is the price which it will bring when it is offered for sale by one who desires, but is not obliged to sell it, and is brought by one who is under no necessity of having it. In estimating its value all the capabilities of the property, and all the uses to which it may be applied or for which it is adapted, are to be considered, and not merely the condition is it an at the time and the use to which it is then applied by the owner. It is not a question of the value of the property to the owner. Nor can the damages be enhanced by his unwillingness to sell. On the other hand, the damages cannot be measured by the value of the property to the party condemning it, nor by its need of the particular property. All the facts as to the condition of the property and its surrounding, its improvements and capabilities, may be shown and considered in estimating its value. (Approved in Seaboard Air Line vs. Chamblin, 108 Va., 42.) In the practical application of this doctrine, the courts have been obliged to reject various kinds of evidence which the partisan zeal of the one side has attempted to introduce in order to swell the measure of damages, and to approve evidence which the other side has attempted to discredit in order to reduce the amount to be realized. Three such questions present themselves in this case.

First, testimony as to mere offers for the property desired or for contiguous property is not admissible. Upon this point we quote from the case of Keller vs. Paine (34 Hun, 167): Its value depends upon too many circumstances. If evidence of offers is to be received it will be important to know whether the offer was made in good faith, by a man of good judgment, acquainted with the value of the article and of sufficient ability to pay; also whether the offer was cash, for credit, in exchange, and whether made with reference to the market value of the article; or to supply a particular need or to gratify a fancy. Private offers can be multiplied to any extent for the purposes of a cause, and the bad faith in which they were made would be difficult to prove. The reception of evidence of private offers to sell or purchase stands upon an entirely different footing from evidence of actual sales between individuals or by public auction, and also upon a different footing from bids made at auction sales. The reception of this class of evidence would multiply the issues upon questions of damages to an extent not to be tolerated by court aiming to practically administer justice between litigants. (As quoted with approval in Yellowstone Park R. R. Co. vs. Bridger Coal Co., 34 Mont., 545.) In the present case, the defendant Estrada testified that upon learning that the property which was the subject of the present litigation was to be condemned, he offered to pay a real estate agent P15 per square meter for a piece of land situated in the locality with relatively similar commercial location. This was improper evidence and should not have been considered by the commissioners. (See also Sherlock vs. Chicago B & Q. R. Co., 130 Ill., 403; 22 N. E., 844; Winnisimmet Co. vs. Grueby, 111 Mass., 543; Montclair Ry Co. vs. Benson, 36 N. J. L., 557.) The second point raised by the evidence taken in the present case is the admission of testimony relative to real estate transaction in the vicinity of the land desired. The rule which admits such evidence meets with universal approval, but with certain reservations. In Aledo Terminal Ry. Co. vs. Butler (246 Ill., 406; 92 N. E., 909) the court said: Evidence of voluntary sales of other lands in the vicinity and similarly situated is admissible in evidence to aid in estimating the value of the tract sought to be condemned, but the value of such testimony depends upon the similarity of the land to that in question and the time when such sales were made and the distance such lands are from those the value of which is the subject of inquiry. The supreme court of Massachusetts, in Fourth National Bank vs. Com. (212 Mass., 66; 98 N.E., 86), affirms the rule as follows: It long has been settled, that in the assessment of damages where lands are acquired by eminent domain evidence is admissible of the price received from sale of land similar in character, and situated in the vicinity, if the transactions are not so remote in point of time that a fair comparison practically is impossible. In Hewitt vs. Price (204 Mo., 31) it was said: It is sufficient to say upon this proposition that the law is well settled in this State upon that subject, and while the value of selling price of similar property may be taken into consideration in determining the value of the piece of property in litigation, it is equally true that the location and character of such property should be similar and the sales of such other property should at least be reasonably near in point of time to the at which the inquiry of the value of the property in dispute is directed. In Laing vs. United New Jersey R. R. & C. Co. (54 N. J. L., 576; 33 Am. St. Rep., 682; 25 A., 409) it was said:

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Generally in this and other States evidence of sale of land in the neighborhood is competent on an inquiry as to the value of land, and if the purchases or sales were made by the party against whom the evidence was offered it might stand as an admission. But such testimony is received only upon the idea that there is substantial similarity between the properties. The practice does not extend, and the rule should not be applied, to cases where the conditions are so dissimilar as not easily to admit of reasonable comparison, and much must be left to the discretion of the trial judge in the determination of the preliminary question conditions are fairly comparable. In an early case, and which will be referred to again upon another question, the supreme court of Illinois stated the rule as follows: The theory upon which evidence of sale of other similar property in the neighborhood at about the same time, is held to be admissible is that it tends to show the fair market value of the property sought to be condemned. And it cannot be doubted that such sales, when made in a free and open market, where a fair opportunity for competition has existed, become material and often very important factors in determining the value of the particular property in question. (Peoria Gas Light Co. vs. Peoria Term. Ry. Co., 146 Ill., 372; 21 L. R. A., 373; 34 N. E., 550.) Even in those States where direct evidence of particular sales is not allowed, such questions may be directed to witnesses on cross-examination to test their credibility. This is the position taken by the supreme court of Pennsylvania in the late cases of Rea vs. Pittsburg, etc., R. R. Co. (229 Pa., 106) and Brown vs. City of Scranton(231 Pa., 593; 80 A., 113). See also Oregon R. & N. Co. vs. Eastlack (54 Ore., 196; 102 Pac., 1011) where this somewhat technical differences is set forth. Evidence of other sales is competent if the character of such parcels as sites for business purposes, dwellings, or for whatever other use which enhances the pecuniary value of the condemned land is sufficiently similar to the latter that it may be reasonably assumed that the price of the condemned land would be approximately near the price brought by the parcels sold. The value of such evidence, of course, diminishes as the differences between the property sold and the condemned land increase. The property must be in the immediate neighborhood, that is, in the zone of commercial activity with which the condemned property is identified, and the sales must be sufficiently coeval with the date of the condemnation proceedings as to exclude general increases or decreases in property values due to changed commercial conditions in the vicinity. No two estates are ever exactly alike, and as the differences between parcels sold and the land condemned must necessarily be taken into consideration in comparing values, we think it much better that those differences should be shown as part of the evidence of such sales, as is the practice in Iowa. (Town of Cherokee vs. S. C. & I. F. Town Lot and Land Co., 52 Iowa, 279, 3 N. W., 42.) And where these differences are so great that the sales in question can form no reliable standard for comparison, such evidence should not be admitted. (Presbrey vs. Old Colony & Newport R. Co., 103 Mass., 1.) The testimony as to the sale of a parcel of land on the opposite side of the stereo from the condemned land at P6 per square meter we think was properly admitted, and should have been given much greater weight by the commissioners and the court below. This was a sale in the open market, just one month prior to the time of the hearing before the commissioners. It was located on the same street, Calle Herran, and on the same estero. The differences between the two parcels as to location was that the condemned property also had a frontage on Calle Looban and was on the same side of the estero and immediately in front of the market site. It is true that the condemned land had improvements upon it while the parcel was vacant land. But it is also true that the values of these improvements were estimated as separate and distinct items, and the value of the land was estimated without regard to the improvements upon it. A sale of vacant land is evidence of the value of neighboring land. (O'Malley vs. Com., 182 Mass., 196; 65 N.E., 30.) Basing their estimate of the value of the condemned land upon the price obtained for the parcel mentioned, and estimating the more favored location of the condemned land as being worth 60 per cent more than the land on the opposite side of the estero, Sellner and Brias arrived at the conclusion that P10 per square meter (a difference of more than 66 per cent) was a fair price for the land condemned. These witnesses were professional real estate agents, both had been active in the vicinity at about the time they testified before the commissioners, and were therefore peculiarly qualified to appraise the land in question. We are inclined to

agree with the opinion expressed in the case of I. I. & M. R. Co. vs. Humiston (208 Ill., 100; 69 N. E., 880), where it is said: The fact of salaries is not always the only factor in determining the weight of the testimony of a witness as to value. A witness may, in forming his opinion, consider the uses and capabilities of the property, as well as the prices at which like property in the neighborhood has been sold. He may also base his opinion of value upon his knowledge or observation of the growth and development of towns and cities, a general knowledge of trade and business, rental value, the interests which the land would pay upon an investment, its productiveness, ease of cultivation, its situation in a particular community, and other elements. These parcels were in the same neighborhood and their respective locations and surroundings were, with the differences above named, practically the same. The price which the parcel sold by Brias brought was therefore of great importance as a basis for estimating the value of the condemned land. The next question of evidence, and the most important to this case, is the admissibility of evidence showing prices paid for neighboring land under eminent domain proceedings. Is this class of evidence admissible? The authorities almost with one accord reply emphatically, No. The rule is so universal that it seems sufficient to quote from only one or two authorities. Lewis on Eminent Domain (par. 447) says: What the party condemning has paid for other property is incompetent. Such sales are not a fair criterion of value, for the reason that they are in the nature of a compromise. . . . The fear of one party or the other to take the risk of legal; proceedings ordinarily results in the one party paying more or the other party taking less than is considered to be the fair market value of the property. For these reasons, such sales would not seem to be competent evidence of value in any case, whether in a proceeding by the same condemning party or otherwise. In the case of Peoria Gas Light Co. vs. Peoria Term. Ry Co. (146 Ill., 372), from which we quoted above sustaining the rule that sales of property in the vicinity are admissible as evidence, it was said: But it seems very clear that to have that tendency, they (sales of adjacent land) must have been made under circumstances where they are not compulsory, and where the vendor is not compelled to sell at all events, but is at liberty to invite competition among those desiring to become purchasers. Accordingly among the various decisions in this and other States to which our attention has been called or which our own researches have discovered, we find none in which the price paid at a forced or compulsory sale has been admitted as competent evidence of value. This case is particularly valuable for its review of the authorities upon this point. Other late cases sustaining the rule are: U.S. vs. Beaty (198 Fed. Rep., 284); City of San Luis Obispo vs. Brizzolara (100 Cal., 434; 34 P. 1083); C.& W. I. R. R. Co. vs. Heidenreich (254 Ill., 231; 98 N.E., 567); Howe vs. Howard (158 Mass., 278); Seaboard Air Line vs. Chamblin (108 Va., 42); O'Day vs. Meyers (147 Wis., 549; 133 N.W., 605). It is to be observed that this rule excluding evidence of prices obtained for neighboring land under eminent domain proceedings is in the nature of an exception to the rule that sales of such land may be offered in evidence, and that, speaking briefly, the underlying reason is that they are not prices obtained "by one who desires but is not obliged to sell it, and is bought by one who is under no necessity for having it." The objection of the plaintiff to the introduction of evidence showing that Clarke had obtained for his land condemned by the city on 1908 was well taken. The testimony of Estrada, based, as he himself admits (see except of his testimony above), upon that transaction, was valueless, and the commissioners and the lower court erred in issuing it as a basis for estimating the value of the condemned land.

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But, carrying this discussion perhaps one step further than is really necessary, we desire to say that even were evidence of the Clarke transaction admissible in the present case, the use made of the facts of that case by the witness Estrada, the commissioners, and the court itself, was clearly erroneous. As was stated above, the apparent price of P19.85 for the land taken by the city was in reality made up of P6.50 per square meter for the land itself and consequential damages to the remaining portion of Clarke's and at the rate of P4.50 per square meter. The damage or injury to the remainder of the land on account of the construction of the railroad is in effect the actual taking of that much of the remainder of the land, for the diminished market value of which the owner is entitled to full compensation. (St. Louis I. M. & S. R. Co. vs. Theodore Maxfield Co., 94 Ark., 135; 26 L. R. A. (N. S.), 1111; 126 S. W., 83.) The value of the property taken and the damages to the remainder of the property are two distinct and separate things. (Louisiana Ry. & Nav. Co. vs. Morere, 116 La., 997; 41 So., 236.) There were no consequential damages to the defendant in the present case for the reason that his entire holding was taken. The market value of the land taken from Clarke did not include the consequential damages to the remainder. The deed of transfer (Exhibit 1) was obviously ambiguous when it stated "that in consideration of the sum of P7,002.05 which the city of Manila has offered to pay me for the said parcel of land for a sewer pumping station." This sum included the market value of the land taken and something more the consequential damages to 1,045.82 square meters of land remaining at P4.50 per square meter. The deed so read merely for convenience and brevity. It was written for the purpose or transferring the land taken and was not intended to be a record of the expropriation proceedings which culminated in its execution. It was satisfactorily proven in the present case that the figures shown in the deed were made up in the manner we have already described, and manifestly P19,85 is merely a fictitious value for the land taken, far beyond its true value. We have now eliminated the testimony of the defendant Estrada of his offer to pay P15 per square meter for other land as well situated as that condemned; and all evidence of the Clarke transaction in 1908. This leaves as the only evidence of record as to the value of the condemned land the testimony of Sellner and Brias, based upon the sale of an adjacent parcel of land, which evidence we have approved as being relevant, and the testimony of Mr. Powell to the effect that the land was appraised for taxation at P6 per square meter, which was also relevant. The next question which it is necessary to consider is the view of the premises made by the commissioners. What is the purpose of this view? An exhaustive search of the authorities has been made upon this point, and we have come to the conclusion that some of the statements made in the earlier decisions upon the subject are not sound law. They view the premises, and are supposed to exercise their own judgment to some extent, irrespective of evidence. (Virginia and Truckee R. Co. vs. Henry, 8 Nev., 165.) The testimony of witnesses as to value . . . although entitled to due consideration, is not controlling. (City of St. Louis vs. Lanigan, 97 Mo., 175; 10 S. W., 475.) They are to be guided largely by their own judgment as they view the premises. (City of Kingston vs. Terry, 53 N. Y. S., 652.) They may go and view the premises and upon the knowledge thus acquired base their award. (Stevens vs.Railroad Co., 8 N. Y. S., 707.) That the commissioners had a right to act upon information derived in part from a personal view of the premises cannot be questioned. (In re certain lands in the Twelfth Ward, 68 N. Y. S., 965.)

They are not bound by the testimony of their of these experts, and may act upon their own personal view. (In re opening Trinity Ave., 71 N. Y. S., 24.) Doubtless, in a proceeding of this kind, the commissioners may act upon their own judgment, disregarding oral testimony. (Waterford E. Light, Heat & Power Co. vs. Reed, 94 N. Y. S., 551.) All of these statements, while made in cases where there was a conflict of evidence, and wherein the commissioners or jury found damages within the estimates made by witnesses, if taken at their face value would allow commissioners or special juries to assess damages at any sum they pleased. The true rule, as laid down in the more recent cases is that the view of the premises is made for the purpose of better enabling the appraisers to understand the evidence presented by the parties, and giving it its proper weight. The supreme court of Colorado is substance supports this principle in Denver Co. vs. Howe (49 Colo., 256;112 P., 779): The jury viewed the premises and were better able to judge of the number of acres in each, as well as other conditions affecting the land. The facts ascertained by the view of the premises are not in the record, whether they were regarded as so much additional evidence, or were used to better understand and apply the evidence adduced at the trial. Keeping in view the evidence relating to the special value of the building site, the value of improvements and of the ground, it will be found that the verdict is within and supported by the values as testified to, and these values, as fixed by the several witnesses, represented to each the market value, as conceded by appellants. The verdict is supported by the evidence of market value and on that ground would have to be sustained if the matter complained of in the instruction had been entirely omitted. In a clear statement of the rule, the supreme court of Pennsylvania says (Gorgas vs. Railroad Co., 144 Pa., 1;22 A., 715): "A view may sometimes be of the highest importance, where there is a conflict of testimony. It may enable the jurors to see on which side the truth lies. And if the witnesses on the one side of the other have testified to a state of facts which exists only in their imagination, as to the location of the property, the manner in which it is cut by the road, the character of the improvements, or any other physical fact bearing upon the case, they surely cannot be expected to ignore the evidence of their senses, and give weight to testimony which their view shows to be false. . . . The true rule, in such cases, is believed to be that the jury in estimating the damages shall consider the testimony as given by the witnesses, in connection with the facts as they appear upon the view; and upon the whole case, as thus presented, ascertain the difference between the market value of the property immediately before and immediately after the land was taken. This difference is the proper measure of the damages. In Close vs. Samm (27 Iowa, 503) it was said: "The question then arises as to the purpose and intent of this statute. It seems to us that it was to enable the jury, by the view of the premises or place, to better understand and comprehended the testimony of the witnesses respecting the same, and thereby the more intelligently to apply the testimony to the issues on trial before them, and not to make them silent witnesses in the case, burdened with testimony unknown to both parties, and in respect to which no opportunity for cross-examination or correction of error, if any, could be afforded either party. If they are thus permitted to include their personal examination, how could a court ever properly set side their verdict as being against the evidence, or even refuse to set aside without knowing the facts ascertained by such personal examination by the jury? It is a general rule, certainly, if not universal, that the jury must base their verdict upon the evidence delivered to them in open court, and they may not take into consideration facts known to them personally, but outside of the evidence produced before them in court. If a party would avail himself of the facts known to a juror, he must have him sworn and examined as other witnesses." (Approved in the late case of Guinn vs. Railway Co., 131 Iowa, 680; 109 N. W., 209.) The doctrine finds favor in Kansas. In C. K. & W. R. Co. vs. Mouriquand (45 Kan., 170), the court approved of the practice of instructing the jury that their view of the premises was to be sued in determining the value of conflicting testimony, saying: "Had the jury disregarded all the sworn evidence, and returned a verdict upon their own view of the premises, then it might be said that the evidence which the jurors acquired from making the view had been

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elevated to the character of exclusive and predominating evidence. This is not allowable. The evidence of the witnesses introduced in the court on the part of the landowner supports fully the verdict. If the verdict was not supported by substantial testimony given by witnesses sworn upon the trial, we would set aside, but as the jury only took into consideration the result of their view of the premises, in connection with the sworn evidence produced before the to connection with the sworn evidence produced before them, to determine between conflicting evidence, the instruction was not so erroneous as to require a new trial." A very clear statement of it is made by Dyer, J., charging a jury, in Laflin vs. Chicago W. & N. R. Co. (33 Fed. Rep., 415): "You have been permitted to view the premises in question. The object of this view was to acquaint you with the physical situation, condition, and surroundings of the premises, and to enable you better to understand the evidence on the trial. The knowledge which you acquired by the view may be used by you in determining the weight of conflicting testimony respecting value and damage, but no farther. Your final conclusion must rest on the evidence here adduced." In Postal Telegraph-Cable Co. vs. Peyton (124 Ga., 746; 52 S. E., 803; 3 L. R. A. (N. S.), 333) it was said: "A jury cannot be left to roam without any evidence in the ascertainment and assessment of damages. The damages which the law allows to be assessed in favor of landowners whose property has been taken or damaged under the right of eminent domain are purely compensatory. The land actually appropriated by the telegraph company amounted to only a fraction of an acre; and while it appeared that the construction and maintenance of the telegraph line would cause consequential damages to the plaintiff, no proof was offered from which any fair and reasonable estimate of the amount of damages thereby sustained could be made. The jury should have been supplied with the data necessary in arriving at such an estimate in the absence of this essential proof, a verdict many times in excess of the highest proved value of the land actually taken must necessarily be deemed excessive." The question has often been up in the State of Illinois, and the rule has been clearly stated there in number of cases. In Sexton vs. Union Stock Yard Co. (200 Ill., 244;65 N. E., 638), a leading case, it was said: "The evidence consisted most largely of opinions of values entertained by the different witnesses. Their judgment varied widely and their opinions were likewise variant. The amount allowed, though much less than the estimates of the witnesses produced in appellant's behalf, is larger than that of the witnesses produced by the appellate company. We cannot know the effect which was produced on the minds of the jurors by the actual inspection of the premises. The rule in such cases as not to disturb a verdict, if it is within the range of the testimony, unless we can clearly see that injustice has been done and that passion and prejudice influenced the action of the jury." In the very recent case of South Park Comrs. vs. Ayer (245 Ill., 402; 92 N. E., 274) it was said: "The jury view the premises, and the law is well settled in this State that in a condemnation proceeding, where the jury have viewed the premises and where the evidence is conflicting, and where the amount is within the range of value as testified to on the trial, and does not appear to have been the result of prejudice, passion, undue influence, or other improper cause, the verdict will not be disturbed. (Citing cases.) It is clear the amount fixed by the jury in this case was well within the range of the evidence, which was conflicting, and the verdict should not be set aside unless it appears it was brought about by some improper ruling of the court upon the trial." The rule is also stated in Lanquist vs. City of Chicago (200 Ill., 69; 65 N. E., 681); in I. I. & M. R. Co. vs. Humiston(208 Ill., 100; 69 N. E., 880); and in G. & S. R. R. R. Co. vs. Herman (206 Ill., 34; 69 N. E., 36). In New York, where the question has doubtless been raised more often than anywhere else, the late cases illustrate the rule perhaps the most clearly. The appellate division, supreme court, In re Titus Street in City of New York (123 N. Y. S., 10018), where it appeared that the city's witnesses testified that the property was worth $9,531 and the commissioners awarded $2,000 less said: "We do not think this is meeting the requirements of the law; we do not believe that it is within the province of the commissioners to arbitrarily set up their own opinion against that of the witnesses called by the city, and to award damages largely below the figure at which the moving party is committed, without something appearing in the record

to justify such action. When a party comes into court and makes an admission against his interest, no court or judicial tribunal is justified in assuming that the admission is not true, without at least pointing out the reason for discrediting it; it carries within the presumption of truth, and this presumption is not to be overcome by the mere fact that the commissioners might themselves have reached a different conclusion upon the viewing of the premises. . . . This view of the commissioners, it seems to us, is for the purpose of enabling the commissioners to give proper weight and effect to the evidence before them, and it might justify them in giving larger damages than some of the witnesses thought proper; or even less than some of them declared to be sustained. But where the evidence produced by the moving party in a proceeding for taking property for public purposes fixes a sum, without any disagreement in the testimony on that side, we are of the opinion that the cases do not justify a holding that the commissioners are authorized to ignore such testimony and to substitute their own opinion in such manner as to preclude the supreme court from reviewing the determination. That is not in harmony with that due process of law which is always demanded where rights of property are involved, and would make it possible for a corrupt commission to entirely disregard the rights of the individual to the undisturbed enjoyment of his property or its equivalent." From these authorizes, and keeping in mind the local law on the subject, we think the correct rule to be that, if the testimony of value and damages is conflicting, the commissioners may resort to their knowledge of the elements which affect the assessment and which were obtained from a view of the premises, in order to determine the relative weight of conflicting testimony, but their award must be supported by the evidence adduced at their hearings and made of record or it cannot stand; or, in other words, the view is intended solely for the purposes of better understanding the evidence submitted. To allow the commissioners to make up their judgment on their own individual knowledge of disputed facts material to the case, or upon their private opinions, would be most dangerous and unjust. It would deprive the losing party of the right of cross-examination and the benefit of all the tests of credibility which the law affords. It would make each commissioners the absolute judge of the accuracy and value of his own knowledge or opinions and compel the court to affirm the report on the facts when all of such facts were not before it. The evidence of such knowledge or of the grounds of such opinions could not be preserved on a bill of exceptions or questioned upon appeal. It those cases where the testimony as to value and damages is conflicting, the commissioners should always set forth in full their reasons for accepting the testimony of certain witnesses and rejecting that of others, especially in those cases where a view of the premises has been made. The commissioners, being disinterested landowners of the province, selected by the court for their ability to arrive at a judicious decision in the assessment of damages, their report is entitled to greater weight than that of an ordinary trier of facts. A mere numerical superiority of the witnesses on the one side or the other should not be sufficient to overturn the decision arrived at by the commissioners, as such witnesses are not required to be either landowners on judicious and disinterested parties, as are the commissioners. The weight to be given to the testimony of a witness might be considerable or it might be almost negligible, according to his standing in the community and his ability and experience in real estate values. But where experts fixed the value of the property, the lowest estimate being $5,533 and the highest $16,000, and the commissioners allowed only $750, the court held that the award was inadequate. (In re Metropolitan El. Ry. Co., 27 N. Y. S., 756.) And where a lessee of a building was allowed damages in an extravagant sum for his unexpired lease, when compared with the allowance made to the owner of the property, the award was set aside. (In re Manhattan Loop No. 1, 135 N. Y. S., 153). InPalmer vs. Harris Country (29 Tex. Civ. App., 340, 69S. W., 229) the court said: It may be that jury were influenced by the idea that it might not have been necessary to use all of the tract sought to be condemned for the construction of the ditch, but the proceeding was to condemn the entire tract, and so far as presented by the record the value of the land might be so affected by the construction of the ditch as to destroy its use by the appellant for any purpose. . . . The verdict is so manifestly against the great preponderance of the evidence that we deem it our duty to set it aside. Calor Oil & Gas Co. vs. Withers (141 Ky., 489; 133 S. W., 210) was an action to condemn a strip of land 27 feet wide and 434 feet long for a pipe line, the said strip lying wholly within a railroad right of way. The commissioners appointed to assess the damages fixed them at $16.51. Upon appeal, the damages were assessed at $750, which

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was held aside. In Mutual Union Telegraph Co. vs. Katkamp (103 Ill., 420) it appeared that telegraph poles were to be set along the line of a railroad right way, 1 foot from such right of way line, so that there would be eleven poles on defendant's land. The defendant himself testified that his land was worth $60 per acre, and that the damage done would be about $10 per pole. Two other witnesses testified that $10 per pole would be the amount of defendant's damage. Of three witnesses for the plaintiff, one testified that the damage would be 50 cents and two that it would be $1 per pole. As only a very small fraction of an acre of defendant's land would be taken, a verdict of $38.50 was held to be manifestly against the weight of evidence and the judgment was reversed. The report of the commissioners has also been set a side because a wrong principle of assessing the damages was used. Thus, in Waterford E. Light, Heat & Power Co. vs. Reed (94 N. Y. S., 551), the award was set aside because counsel for the plaintiff had presented to the commissioners that the plaintiff was only acquiring the right of flowage in respect to the property in question and that the defendants, by reason of the execution of a deed, had lost all but a nominal interest in the question of damages, both of which theories were untrue, and which resulted in only nominal damages being awarded to the defendants. In the matter of Gilroy (85 Hun, 424; 32 N. Y. S., 891) it appeared that the commissioners erroneously refused to take into consideration the fact that the property was available for use in connection with the water supply of the city of New York, in estimating the value of the property, and the report was for that reason set aside as allowing insufficient damages. No allowances having been made for consequential damages, the report of the commissioners was set aside. (Williamson vs.Read, 106 Va., 453; 56 S. E., 174.) And where a deed was so construed as embracing more land than it actually did embrace, resulting in excessive damages being awarded, the report was set aside. (Morris & Essex R. Co. vs.Bonnell, 34 N. J. L., 474.) The report has also been set aside for refusal to consider competent evidence. (Statevs. Shuffield & Thompsonville Bridge Co., 82 Conn., 460; 74 A., 775.) We come now to a consideration of the amount fixed upon by this court of P10 per square meter for the condemned lane. We have already referred to the testimony of the two real estate agents, Brias and Sellner, which was based upon a sale of similarly situated land made only thirty days previous to the date of the hearing; and the assessment of the property for taxation, at P6 per square meter. This was the evidence upon which the dissenting commissioner predicated his appraisement of the land, arriving at the same figure as did this Supreme Court of P10 per square meter. There is a considerable difference between this valuation and P25 per square meter, as fixed by Estrada, or of the price fixed by the majority report of the commissioners of P20 per square meter. It is to be noted that no witnesses other than Estrada were called who could confirm the higher valuation or even testify to an intermediate price. The price of P10 per square meter is 66 per cent greater than that obtained for land on the opposite side of the estero, and this difference would seem amply sufficient to compensate for the more favored location of the condemned land. That P10 per square meter is a just compensation is shown by a great preponderance of the evidence. "Compensation" means an equivalent for the value of the land (property) taken. Anything beyond that is more and anything short of that is less than compensation. To compensate is to render something which is equal to that taken or received. The word "just" is used to intensify the meaning of the word "compensation;" to convey the idea that the equivalent to be rendered for the property taken shall be real, substantial, full, ample. "Just compensation," therefore, as used in section 246 of the Code of Civil Procedure, means a fair and full equivalent for the loss sustained." The exercise of the power being necessary for the public good, and all property being held subject to its exercise when, and as the public good requires it, it would be unjust to the public that it should be required to pay the owner more than a fair indemnity for such loss. To arrive at this fair indemnity, the interests of the public and of the owner and all the circumstance of the particular appropriation should be taken into consideration. (2 Lewis on Em. Do., 562.) The compensation must be just to the public as well as to the owners. (Searl vs. School District, 133 U.S., 553; 33 L. ed., 740.) Section 2 44 of our code says that:

The commissioners shall assess the value of property taken and used, and shall also assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be derived by the owners. "To assess" is to perform a judicial act. The commissioners' power is limited to assessing the value and to determining the amount of the damages. There it stops; they can go no further. The value and damages awarded must be a just compensation and no more and no less. But in fixing these amounts, the commissioners are not to act ad libitum. They are to discharge the trust reposed in them according to well established rules and form their judgment upon correct legal principles. To deny this is to place them where no one else in this country is placed: Above the law and beyond accountability. This court, after an examination of the evidence, found that the awards as fixed by the majority of the commissioners and the trial court were grossly excessive; that a just compensation for the land taken was P10 per square meter, and, in a short opinion, rendered judgment accordingly. It was insisted that to so decide this case would be an conflict with former adjudicated cases by this court. It now becomes necessary to review these cases. In City of Manila vs. Tuason, et al. (R. G. No. 3367), decided March 23, 1907 (unreported), the court of First Instance modified the report of the commissioners as to some to the items and confirmed it as to others. On appeal, the Supreme Court remanded the cause, apparently for the reason that the evidence taken by the commissioners and the lower court was not before it, and perhaps also because the commissioners adopted a wrong principle of assessing damages. In Manila Railroad Co. vs. Fabie (17 Phil. Rep., 206) the majority report of the commissioners appraised the land at P56,337.18, while a dissenting commissioner estimated it at P27,415.92. The Court of First Instance, after taking additional evidence upon the consequential benefits to the remainder of defendant's land by the construction of the railroad, and also as to the rental value of various pieces of land in the locality, fixed the value of the land at the sum estimated by the dissenting commissioner. The defendants appealed to this court. This court remarked that the only evidence tending to support the majority report of the commissioners consisted of deeds of transfer of real estate between parties in that community showing the prices paid by the vendees in such conveyances. It was held that without its being shown that such transfer had been made in the ordinary course of business and competition, and that the prices therein stated were not fictitious, such deeds were incompetent as evidence of the value of the condemned land. As to the action of the court in fixing the price of the land at P27,415.92, the court said: Conceding, without deciding, that he also had the right to formulate an opinion his own as to the value of the land in question, nevertheless, if he formulate such an opinion, he must be base it upon competent evidence. The difficulty with the case is that it affirmatively appears from the record on appeal that there is an entire absence of competent evidence to support the finding either of the commissioners or of the court, even if the court had a right to make a finding of his own at all under the circumstances. In Manila Railroad Co. vs. Attorney-General (22 Phil. Rep., 192) the only question raised was the value of certain improvements on the condemned portion of an hacienda, such improvements consisting mainly of plants and trees and belonging to a lessee of the premises. The total damages claimed were P24,126.50. The majority report of the commission allowed P19,478, which amount was reduced by the Court of First Instance to P16,778. The plaintiff company, upon appeal to this court, alleged that the damages allowed were grossly excessive and that the amount allowed by the commissioners should have been reduced by at least P17,000; while the defendant urged that the damages as shown by the record were much greater than those allowed, either by the commissioners or by the court. The only ground upon which the plaintiff company bases its contention that the valuations are excessive is the minority report of one of the commissioners. The values assigned to some of the improvements may be excessive but we are not prepared to say that such is the case. Certainly there is no evidence in the record which would justify us in holding these values to be grossly excessive. The commissioners in their

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report go into rather minute detail as to the reasons for the conclusions reached and the valuations fixed for the various items included therein. There was sufficient evidence before the commissioners to support the valuations fixed by them except only those later modified by the court below. The trial court was of opinion that the price of P2 each which was fixed for the orange trees (naranjitos) was excessive, and this was reduced to P1.50 for each tree; this on the ground that the evidence discloses that these trees were comparatively young at the time of the expropriation, and that the value fixed by the majority report of the commissioners was that of full-grown or nearly full-grown trees. We are of opinion that this reduction was just and reasonable. Aside from the evidence taken into consideration by the trial judge we find no evidence in the record in support of the contention of the railroad plaintiff that the valuations fixed in the majority report of the commissioners and by the trial court are grossly excessive, and plaintiff company having wholly failed to offer evidence in support of its allegations in this regard when the opportunity so to do was provided in accordance with law, it has no standing in this court to demand a new trial based on its unsupported allegations of grossly excessive valuation of the property by the commissioners and the court below. This court affirmed the findings of damages made by the trial court with the exception of an item for damages caused by fire to improvements on lands adjoining those condemned, which was held not to be a proper matter to be considered in condemnation proceedings. The court here approved of the action of the Court of First Instance in reducing the amount of damages fixed by the commissioners as to the value of the young orange trees on the strength of the evidence of record. In Manila Railroad Company vs. Caligsihan (R.G. No. 7932), decided March 25, 1913 (unreported), it appears that the lower court approved in toto the report of the commissioners. On appeal, this Supreme Court reversed the lower court and remanded the case with orders to appoint new commissioners, saying: Under the evidence in this case the award is excessive. Section 246 of the Code of Civil Procedure giving to the court the power to "make such final order and judgment as shall secure to the party the property essential to the exercise of his rights under the law, and to the defendant just compensation for the land so take", we exercise that right in this case for the purpose of preventing the defendants from obtaining that which would be more than "just compensation" under all the evidence of the case. The judgment is reversed and the cause remanded, with instructions to the lower court to appoint a new commission and to proceed from that point de novo. We will know examine the case (Philippine Railway Co. vs. Solon, 13 Phil. Rep., 34) relied upon to support the proposition that the courts should not interfere with the report of the commissioners to correct the amount of damages except in cases of gross error, showing prejudice or corruption. In that case the property belonging to the appellant which the company sought to appropriate was his interest as tenant in a tract of land belonging to the Government, together with a house standing thereon and other property belonging to him. He asked that he be awarded for all the property taken P19,398.42. The commissioners allowed him P10,745.25. At the hearing had upon the report, the court reduced this amount and allowed the appellant P9,637.75. The commissioners took a large amount of evidence relative to the amount of damages. The testimony was conflicting as to the value of the house, two witnesses fixing it at over P12,000; another at over P14,000.00; one at P8,750; another at P6,250; and another at P7,050.95. The commissioners fixed the value of the house alone at P9,500, and the court at P8,792.50. This court said: Nor do we decide, whether, in a case where the damages awarded by the commissioners are grossly excessive or grossly insufficient, the court can, upon the same evidence presented before the commissioners, itself change the award. We restrict ourselves to deciding the precise question presented by this case, in which it is apparent that, in the opinion of the court below, the damages were not grossly excessive, for its own allowance was only P10,000 less than the amount allowed by the commissioners,

and the question is whether in such a case the court can substitute its own opinion upon the evidence presented before the commissioners for the opinion which the commissioners themselves formed, not only from the evidence but also from a view of the premises which by law they were required to make. Referring to the manner in which the trial court arrived at its valuation of the various items, including the house, this court said: Without considering the correctness of the rule adopted by the court for determining the value of the property, it is sufficient to say that the evidence before the commissioners as to the value of the property taken was contradictory and that their award was not palpably excessive or inadequate. Under such circumstances, we are of the opinion of the court had no right to interfere with it. From the foregoing it is clear that (1) the testimony was conflicting; (2) that the award as allowed by the commissioners was well within the amounts fixed by the witnesses; (3) that the award was not grossly excessive. That it was not grossly excessive is shown by the difference between the amount fixed by the commissioners and that fixed by the court, this difference being P1,117.50, a reduction of a little over 10 per cent. From the above review of the cases, it will be seen that this court has not only not decided that the courts cannot interfere with the report of the commissioners unless prejudice or fraud has been shown, but the decisions tend to show the contrary; that is, an award which is grossly excessive or grossly insufficient cannot stand, although there be nothing which even tends to indicate prejudice or fraud on the part of the commissioners. The case at bar is the first one wherein the court changed the award and rendered a final judgment upon the record. Had the court the power to thus dispose of the case? Section 246 of the Code of Civil Procedure reads as follows: "Upon the filing of such report in court, the court shall, upon hearing, accept the same and render judgment in accordance therewith; or for cause shown, it may recommit the report to the commissioners for further report of facts; or it may set aside the report and appoint new commissioners; or it may accept the report in part and reject it in part, and may make such final order and judgment as shall secure to the plaintiff the property essential to the exercise of his rights under the law, and to the defendant just compensation for the land so taken; and the judgment shall require payment of the sum awarded as provided in the next section before the plaintiff can enter upon the ground and appropriate it to the public use." From this section it clearly appears that the report of the commissioners is not final. The judgment of the court is necessary to give to the proceedings. Nor is the report of the commissioners conclusive, under any circumstance, so that the judgment of the court is a mere detail or formality requisite to the proceedings. The judgment of the court is rendered after a consideration of the commissioners' report and the exceptions thereto submitted upon the hearing of the report. By this judgment the court may accept the commissioners' report unreservedly; it may return the report for additional facts or it may set the report aside and appoint new commissioners; or it may accept the report in part and reject it in part, and "make such final order and judgment as shall secure to the plaintiff the property essential to the exercise of his rights under the law, and to the defendant just compensation for the land so taken." Any one of these methods of disposing of the report is available to and may be adopted by the court according as they are deemed suited to secure to the plaintiff the necessary property and to the defendant just compensation therefor. But can the latter method produce a different result in reference to any part of the report from that recommended by the commissioners? The purpose of this discussion is solely to determine this question. Section 246 expressly authorizes the court to "accept the report in part and reject it in part." If this phrase stood alone, it might be said that the court is only empowered to accept as a whole certain parts of the report and reject as a whole other parts. That is, if the commissioners fixed the value of the land taken at P5,000, the improvements at P1,000, and the consequential damages at P500, the court could accept the report in full as to any one item and reject it as to any other item, but could not accept or reject a part of the report in such a way as to change any one of the amounts. But the court is also empowered "to make such final order and judgment as shall secure to the plaintiff the property essential to the exercise of his rights under the law, and to the defendant just compensation for the land

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so taken." The court is here expressly authorizes to issue such orders and render such judgment as will produce these results. If individual items which make up the total amount of the award in the commissioners' report could only be accepted or rejected in their entirety, it would be necessary to return to the case, so far as the rejected portions of the report were concerned, for further consideration before the same or new commissioners, and the court could not make a "final order and judgment" in the cause until the rejected portions of the report had been re-reported to it. Thus, in order to give the italicized quotation from section 246 any meaning at all, it is obvious that the court may, in its discretion, correct the commissioners' report in any manner deemed suitable to the occasion so that final judgment may be rendered and thus end the litigation. The "final order and judgment" are reviewable by this court by means of a bill of exceptions in the same way as any ordinary action. Section 496 provides that the Supreme Court may, in the exercise of its appellate jurisdiction, affirm, reverse, or modify any final judgment, order, or decree of the Court of First Instance, and section 497, as amended by Act No. 1596, provides that if the excepting party filed a motion in the Court of First Instance for a new trial upon the ground that the evidence was insufficient to justify the decision and the judge overruled said motion and due exception was taken to his ruling, the Supreme Court may review the evidence and make such findings upon the facts by a preponderance of the evidence and render such final judgment as justice and equity may require. So it is clear from these provisions that this court, in those cases where the right of eminent domain has been exercised and where the provisions of the above section have been complied with, may examine the testimony and decide the case by a preponderance of the evidence; or, in other words, retry the case upon the merits and render such order or judgment as justice and equity may require. The result is that, in our opinion, there is ample authority in the statute to authorize the courts to change or modify the report of the commissioners by increasing or decreasing the amount of the award, if the facts of the case will justify such change or modification. The question now arises, when may the court, with propriety, overrule the award of the commissioners in whole or in part and substitute its own valuation of the condemned property? From a mere reading of section 246 and the remarks just made, it should be clear that the court is permitted to act upon the commissioners' report in one of several ways, at its own discretion. The whole duty of the court in considering the commissioners' report is to satisfy itself that just compensation will be made to the defendant by its final judgment in the matter, and in order to fulfill its duty in this respect the court will be obliged to exercise its discretion in dealing with the report as the particular circumstances of the case may require. But generally speaking, when the commissioners' report cannot with justice be approved by the court, one of three or four circumstances will usually present itself, each of which has for its antidote one of the methods of dealing with the report placed at the disposal of the court by section 246. Thus, if it be successfully established that the commissioners refused to hear competent evidence, then all the evidence in the case would not be before the court; the court could not, with reason, attempt to either approve or change the report, as it stood, for the reason that all the evidence of the case would not be before it; and the remedy in this case would be to "recommit the report to the commissioners for further report of facts." Again, if improper conduct, fraud, or prejudice be charged against the commissioners, and this charge be sustained, it would be safer to set aside the award thus vitiated and "appoint new commissioners" who could render a report not tainted by these things. But it is to be observed again that this discussion is confined to a case were no competent evidence was refused by the commissioners and no suspicion rests upon the motives of the commissioners in making the award. When the only error of the commissioners is that they have applied illegal principles to the evidence submitted to them; or that they have disregarded a clear preponderance of the evidence; or that they have used an improper rule of assessment in arriving at the amount of the award, then, in such a case, if the evidence be clear and convincing, the court should be able, by the use of those correct legal principles which govern the case, to determine upon the amount which should be awarded without remanding the cause. When the matter stands in this light, it becomes the duty of the court to make "final order and judgment" in which the proper award will be made and thus end the litigation between the parties. In Louisiana, where the procedural law on this point is similar to our own, the supreme court has used its powers in this respect quite frequently. And in this connection, we think it proper to quote from a case which, in some respects, is similar to the one at bar: On the question of the value of the land, 8.34 acres, the commissioners have allowed $2,500 or $300 per acre. The defendant has put in the record the testimony of witnesses claimed to support the allowance. Without disregarding this testimony, it is sufficient to say that the opinions of the witnesses do not seem to

be based on any fact calculated to show the value of the land. . . . On the other hand the plaintiff has placed before us the titles of defendant of recent date showing the price paid by him (the defendant) for the entire body of land of which the 8 acres are a part; the acts of sale of land in the same neighborhood, and of the same quality; the assessment of defendant's property, and other testimony on this issue of value. . . . Giving all possible weight, or rather restricting the testimony of the plaintiff's witnesses to its due influence and giving, we think, necessary effect to the acts by which defendant purchased, the acts of sale of other land, the assessment of value, with due allowance for underassessment, and the other testimony of record, we reach the conclusion that the award gives two-thirds more than the value of the land. We fix the value of the land at $833.33. (Morgan's Louisiana & Texas R. R. Co. vs. Barton, 51 La. Ann., 1338.) See also T. & P. R. R. Co. vs. Southern Develop. Co. (52 La. Ann., 53), where the court held that appraisement made by the jury too low and after discussing the evidence, increased the amount of the award accordingly. A similar case is Abney vs. Railroad Company (105 La., 446). See also T. & P. R. R. Co. vs. Wilson (108 La., 1; 32 So., 173); and Louisiana Western R. Co. vs. Crossman's Heirs (111 La., 611; 35 So., 784), where the points is touched upon. In Missouri the statute (1 Mo. Ann. Stat., 1268) directs that "the court shall make such order therein as right and justice may require, and may order a new appraisement, upon good cause shown." Owing to a constitutional restriction, this provision has been construed to apply only to damages and benefits resulting to landowners in consequence of proposed improvements, the cash value of property expropriated being an issue triable, at the instance of either party, by a jury subsequent to the findings of the commissioners. Subject to this restriction, however, it has been held that the above provisions of law gives the court the right to increase or decrees the amount awarded by the commissioners. In the late case of Tarkio Drainage District vs. Richardson (237 Mo., 49) the court presents a lengthy review of its decisions on this subject. We are clearly of the opinion that our holding on this branch of the case is supported not only by reason but by the interpretation of similar provisions of law in other jurisdictions, so far as we have had the opportunity to examine the question. This opinion will be substitute for the short opinion rendered in the cause near the close of last term. Johnson and Carson, JJ., concur. Arellano, C.J. and Moreland, J., dissent. Separate Opinions TORRES, J., dissenting: I am of the opinion that, for the reasons stated in the appealed judgment of January 4, 1912, and those expressed in the latter part of the majority opinion, the judgment should be affirmed with the costs against the appellant.

G.R. No. L-10713

March 31, 1915

THE MANILA RAILROAD COMPANY and THE BOARD OF PUBLIC UTILITY COMMISSIONERS, petitioners, vs. THE HONORABLE ISIDRO PAREDES, judge of the Fourteenth Judicial District, THE TAYABAS LAND COMPANY, THE TAYABAS LAND COMPANY & LIM, LEONCIO SEA, and ESTEBAN CATALLA, respondents.

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William A. Kincaid and Thomas L. Hartigan for petitioner Manila Railroad Co. Attorney-General Avancea for petitioner Board of Public Utility Commissioners. Alfredo Chicote and Agustin Alvarez for respondents. PER CURIAM: With the expectation of writing later a more extended opinion sustaining the judgment about to be pronounced, the court for the present declares that if finds the demurrer to the complaint to be unfounded and the motion to dissolve the injunction without basis. The basis the decision is that the court had no authority to increase the amount of the deposit required of the railroad company and its attempt to do so was in excess of its jurisdiction. The demurrer is overruled and the defendants are given ten days within which to answer. On failure to answer, the plaintiffs will entitled to the relief demanded in the complaint. The motion to dissolve the preliminary injunction is overruled .So ordered. Arellano, C.J., Johnson, Carson, Moreland, and Trent, JJ., concur. DECEMBER 17, 1915. CARSON, J.:p These are original proceedings in this court, wherein the applicants, The Manila Railroad Company and the Board of Public Utility Commissioners, pray for the issuance of a writ of certiorari to the Honorable Isidro Paredes, judge of the fourteenth Judicial District, requiring him to certify to this court the record of certain condemnation proceedings pending before him. The applicant allege that in the course of those proceedings the respondent judge issued an order directing the Railroad Company to increase an amount of a certain deposit, therefore made by the company to secure final payment of the value of certain lands which it sought to have condemned for its use, from P8,971.72 to P1,000,000. They further allege that the order in question is illegal, null and void because, as they insist, the respondent judge who issued it was wholly without jurisdiction so to do; and also because, as they contend, even if it were admitted that the respondent judge had jurisdiction to issue an order increasing the amount of the deposit theretofore made in those proceedings, the issuance of an order directing its increase from P8,971.72 to P1,000,000 was, under all the circumstances of the case, a manifest abuse of judicial discretion. Applicants pray that on a review of the whole record this court declare the order in question null, void and without effect. Various parties claiming to be owners of the greater part or all of the land involved in the condemnation proceedings in the court below, and at whose instance the order in question was issued, are joined as respondents with the respondent judge in accordance with the statutory requirements in cases of this kind. All the respondents are represented by the same counsel, and the only responses to the order of this court to show cause why the writ should not be issued are those filed by the respondent judge, the Tayabas Land Company, and the Tayabas Land Co. & Lim, (hereinafter referred to as land companies) all the other respondents contenting themselves by appearing by counsel and formally adhering to the questions made by the land companies, and making them their own. In response to an order of this court to show cause why the writ should not issue, the respondents demurred to the complaint; and thereafter, the demurrer having been overruled, the land companies filed an extended answer, in which they undertook to show that in issuing the order in question the respondent judge was acting within the jurisdiction conferred upon him by law, and that there was no abuse of his discretion in its issuance. In support of their contentions, these respondents set forth in their answer what purports to be a full and complete history of all the

proceedings had in the court below, supported by extensive extracts from the record of those proceedings. The respondent judge also filed an answer in which he sets forth the grounds upon which he insists that he acted within his jurisdiction in the issuance of the order, and in support of his contention sets forth a statement of facts, which, so far as it goes, is substantially identical with the statement of facts relied upon by the land companies. A pleading, purporting on its face to be a demurrer to the answer of the respondents having been filed by counsel for the plaintiff, the case was set for argument upon the pleadings as they then stood. At the hearing, it was agreed in open court that the pleading purporting to be a demurrer to the answers should be treated as a prayer for judgment on the pleadings, and after extended oral argument the case was finally submitted for judgment. Without stopping to consider or comment upon any contention which might be made as to the form of the pleadings, we are of opinion that the facts disclosed by the pleadings permit us to go directly to the merits of the cause, since we are satisfied that, accepting as true all the facts well pleaded in the respective answers of the respondents, these facts, taken together with the uncontroverted facts set forth in the complaint, fully sustain the contention of the applicants that the order complained of was issued by the respondent judge without jurisdiction in the premises, and that it is therefore null, void and no effect. Sometime prior to the first of April, 1913, the Railroad Company entered upon and took possession of a long, narrow strip of land, running between the municipalities of Pagbilao and Lopez in the Province of Tayabas, for use as a roadbed for a railroad which it was engaged in building under its charter. The Railroad Company claims that it took possession of this strip of land with the consent of the various owners and occupants claiming title thereto, and with the understanding that it would pay the owners of all the lands thus taken a price to be agreed upon thereafter, or to be fixed in condemnation proceedings; and that, not having been able to agree upon a price with the owners of the land, it was later compelled to institute proceedings for the condemnation of the land thus taken. However this may be, the Railway Company, on the first day of April, 1913, instituted expropriation proceedings looking to the condemnation of all these lands under and by virtue of the authority conferred upon it by is charter and under the laws applicable to such proceedings. On the fourth day of April, 1913, the Honorable Herbert Gale, the judge then presiding in the court wherein these proceedings were pending, entered an order granting to the Railroad Company the right of possession of all these lands, upon the filing of a deposit in an amount certified by the provincial treasurer to be equal to the average assessed value of all these lands, which, in the language of the order itself was the value of the lands, "hereby provisionally ascertained and fixed." On the eleventh of April, 1913, the Railroad Company deposited the sum of P8,971.72, the assessed value of the lands in question as shown by the certificate of the provincial treasurer. On the of April, 1913, Judge Cui, then presiding in the court wherein the proceedings were pending, issued a formal writ, directing the sheriff of the court to put the Railroad Company in possession of all the lands described in the applications in expropriation proceedings filed by the Railroad Company. Thereafter, the land companies to be the owners and successors in interest of the original owners of most of the lands in question, entered their appearance as defendants in the expropriation proceedings, and acting jointly with the various claimants whose lands had not been acquired by them, procured the appointment of commissioners for the valuation of these lands. On the ninth of January, 1915, the land companies and the other claimants to these lands moved the court to increase the amount of the deposit from P8,971.72, the amount originally fixed, to P1,000,000. On the 18th of February, 1915, the respondent judge, then presiding in the court wherein the proceedings were pending, after hearing the parties and considering the evidence submitted at the hearing, and notwithstanding objection duly interposed on the ground of his lack of jurisdiction to entertain the motion, issued an order directing the Railroad Company to increase its deposit to P1,000,000. It is this order which the applicants now seek to have this court declare null an void in original certiorariproceedings in this court. On behalf of the applicants for the writ, it is contended that not only was the respondent judge wholly without jurisdiction to issue this order but that even if it were admitted that he had such jurisdiction, the amount fixed by him

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is so far in excess of the true value of the land, that this court should declare that in fixing this amount, he manifestly abused his judicial discretion in the premises. On behalf of the respondents, it is contended that, in issuing the order in question the trial judge in no wise exceeded the jurisdiction conferred upon him by statute; and further that the amount originally fixed for the deposit was utterly inadequate, and was so far short of the true value of the lands in question, as to justify this court and the court below in holding that there had been an abuse of discretion in its issuance; and that the value of the land as fixed by the respondent judge is well within the true value as disclosed by the evidence submitted to him in the court below. The admitted facts as disclosed by the pleadings are wholly insufficient to sustain a finding on the various contentions of the parties as to the true value of the land; and if it were necessary for us to make findings in this regard and to rule upon applicants' contentions as to the alleged abuse of discretion in the court below in fixing the amount of the deposit to be filed by the Railroad Company, it would be incumbent on us to give the parties an opportunity to submit evidence in support of their respective contentions. Holding as we do, however, that the respondent judge was wholly without jurisdiction to enter the order complained of, or any order whatever directing an increase in the amount of the deposit which had been made in conformity with a lawful order theretofore entered in the proceedings, it is not necessary for us to consider any disputed question of fact the admitted facts as disclosed by the proceedings being sufficient to sustain the prayer of the applicants for the issuance of the writ on the ground of a total lack of jurisdiction in the respondent judge. It is said that the jurisdiction of the respondent judge to issue the order complained of is recognized in the following paragraph of section 1 of Act No. 1592. When condemnation proceedings are brought by any railway corporation, in any court of competent jurisdiction in the Philippine Islands, for the purpose of the expropriation of land for the proper corporate use of such railway corporation, said corporation shall have the right to enter immediately upon the possession of the land involved, after and upon the deposit by it with the Treasurer of the Philippine Islands of the value of the land, in money, as provisionally and promptly ascertained and fixed by the court having jurisdiction of the proceedings, said sum to be held by the Treasurer subject to the orders and final disposition of the court: Provided, however, That the court may authorize the deposit with the Insular Treasurer of a certificate of deposit of any depository of the Government of the Philippine Islands in lieu of cash, such certificate to be payable to the Insular Treasurer on demand in the amount directed by the court to be deposited. The certificate and the moneys represented thereby shall be subject to the orders and final disposition of the court. And in case has already been commenced on any land and the money with the Insular Treasurer at the date of the passage of this Act, the said money may, upon proper order of the court, be withdrawn from the Treasury by the railway corporation which deposited the same, and a certificate of deposit, as above described, may be deposited in lieu thereof. And the court is empowered and directed by appropriate order and writ if necessary, to place the railway corporation in possession of the land, upon the making of the deposit. We are of opinion, however, that while this section of the Act clearly empowers the court wherein expropriation proceedings are pending to fix the amount of the required deposit and to give possession of the land upon the making of the deposit; it is clearly denies, by necessary implication, the power of the court to change or modify the amount thus fixed, or to disturb the possession of the railway, after the deposit thus fixed has actually been made by the railway corporation. The statute expressly provides that the corporation "shall have the right to enter immediately upon the possession of the land involved" upon the making of the prescribed deposit. The statutory right of possession thus secured to the railway corporation is an unqualified right of possession during the pendency of the expropriation proceedings; but if it were within the power of the court to change or modify the amount of the deposit as it sees fit, at any time throughout the proceedings, the statutory right of possession thus guaranteed and expressly conferred upon the railroad company might well become illusory. If the issuance of an order directing the increase of the amount of the deposit does not affect the railroad company's right of possession, the entry of such an order would be a vain and meaningless thing. If it does affect the right of possession of the railway corporation, then it is in direct conflict with

the express terms of the statute securing a statutory right to enter upon, and maintain possession during the pendency of the proceedings. It will be observed, furthermore, that the statute expressly empowers and directs the court, "upon the making of the deposit," to place the railway corporation in possession of the land; and that there is nothing in the statute which either expressly or by implication reserves to the court the power to undo its act, or to deprive the Railroad Company of possession, in the event that, pending the proceedings, the judge should become convinced that the amount of the deposit is insufficient. Respondents insist that the power of the court to change or modify the amount of the deposit is expressly recognized in the clause of the above-cited statute which provides that after the deposit has been made "the certificate and the moneys represented thereby shall be subject to the order and final deposition of the court." We are of opinion, however, that this clause of the statute merely provides for the placing of the control and final disposition of the moneys actually deposited in the hands of the court, after they have been deposited. It has no relation whatever to the exercise of jurisdiction to fix the amount of the deposit which is conferred upon the court elsewhere in the statute. It is also contended that the power of the court to modify and amend the order in question is expressly recognized in paragraph 7 of section 11 of the Code of Civil Procedure (Act No. 190). That section provides: Every court shall have power: xxx xxx xxx

7. To amend and control its process and orders so as to make them conformable to law and justice. This provision of the code was borrowed from section 128 of the California Code, and in Kaufman vs. Shain (111 Cal., 16), the supreme court of the State of California in commenting upon its terms and limitations held as follows: Every court of record has the inherent right to cause its acts and proceedings to be correctly set forth in its records; and whenever it is properly brought to the knowledge of the court that a record made by the clerk does not correctly show that the order or direction which in fact made by the court at the time it was given, the court has authority to correct its record in accordance with the facts, but it cannot, under the form of an amendment of its record, correct a judicial error, or make of record an order or judgment that was never in fact given. But it is urged that aside from any express grant of power by statute, every court has inherent power over the proceedings pending before it, by virtue of which it may amend its judgments and orders so long as they are still pending before it, when it has become convinced that such judgments are erroneous either in matter of law or of fact. It is said that such power, in relation more especially to interlocutory orders, is universally exercised and recognized in everyday practice in every court in the Philippines. The question of the power of the courts in this jurisdiction to change or modify judgments in matters of substance, and to correct errors of law or of fact into which they may have fallen in rendering the original judgment, is discussed at length in relation more especially to final judgments in the case of Arnedo vs. Llorente and Liongson(18 Phil. Rep., 257). In that case we held that Courts of First Instance in this jurisdiction have plenary power over judgments, orders and decrees entered by them in proceedings pending before them, until such judgments, orders and decrees have become final in the sense that the party in whose favor they are rendered is entitled, as of right, to have execution thereon; but that thereafter they lose control of such judgments, orders and decrees, and have no inherent power to

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annul or to change or to modify them in matters of substance, either of law or of fact. Relying upon the doctrine thus announced, by virtue of which a Court of First Instance is clothed with power to render a particular judgment, discloses, either in express terms or by necessary implication, the legislative intent that the judgment should be executed forthwith upon its entry, the court loses its control over such judgment immediately upon its entry, and has no power to annul, change or modify it hereafter. From what we said in that case, we think there can be no doubt that, speaking generally, Courts of First Instance have plenary control over all interlocutory judgments, orders or decrees entered by them pending the final determination of the proceedings; and indeed, it is true, as was said by counsel for respondents in oral argument, that it is everyday practice for these courts to annul, change or modify such interlocutory judgments, at any time prior to the final determination of the proceedings in which they are issued. But in accordance with the reasoning on which the former opinion is based, it cannot be doubted that where the statute by virtue of which a particular judgment, order or decree is entered in the course of proceedings pending in a Court of First Instance, expressly or by necessary implication prescribes that one of the parties shall have the right to have the judgment, order or decree executed upon compliance with certain prescribed conditions, the Court of First Instance loses plenary control over such judgment, order or decree from and after the time when such prescribed conditions have been duly complied with. Act No. 1592 expressly provides that railway corporations shall have the right to enter upon possession of the lands involved in condemnation proceedings had under the Act immediately upon the filing of a deposit fixed by order of the court; and further, that, if necessary, they shall have the right to a writ of possession pending the proceedings. In other words, the statute provides that they may have execution as of right upon the order for possession, immediately upon the making of the prescribed deposit. It follows, under the reasoning of the case above referred to, that immediately upon the making of a deposit fixed by order of the court, the court loses plenary control over the order fixing or modify it in matters of substance pending the course of the condemnation proceedings. A contrary ruling would tend directed to defeat the manifest intention of the legislator to provide a speedy and summary procedure whereby the peaceable possession of lands necessary for the construction of railroads may be secured without the delays incident to prolonged and vexatious litigations touching the ownership and value of such lands, which should not be permitted to delay the progress of the work. It is contended, however, in behalf of the respondents, that even if it be admitted that Courts of First Instance have no power to alter or amend orders fixing the amount of the deposit to be filed by railway corporations under the provisions of Act No. 1592, nevertheless, in the case now under consideration, the order entered by the respondent judge, although in form an order amending the original order fixing the amount of the deposit, should be held to be in truth and in fact an original order entered under authority of the Act this because, as it is said, the original order was invalid, void and of legal effect. It is urged that the original order should be held to be invalid because (1) it was issued without giving the owners of the land involved in the proceedings an opportunity to be heard, and because, (2) it fixed the deposit in an amount so palpably and grossly inadequate, as to justify a holding that there was a manifest abuse of discretion on the part of the judge who entered it. As to the contention of respondents based on the failure of the judge who entered the order to give the claimants to the land an opportunity to be heard, it should be sufficient to point to the provisions of the Act (No. 1592) itself. The statute directs that, at the very outset, "when condemnation proceedings are brought by any railway corporation" the amount of the deposit is to be "provisionally and promptly ascertained and fixed by the court." It very clear that it was not the intention of the legislator that before the order fixing the amount of the deposit could lawfully be entered the court should finally and definitely determine who are the true owners of the land; and after doing so, give them a hearing as to its value, and assess the true value of the land accordingly. In effect, that would amount to a denial of the right of possession of the lands involved until the conclusion of the proceedings, when there would be no need for the filing of the deposit. Of course, there is nothing in the statute which denies the right of the judge to hear all

persons claiming an interest in the land, and courts should ordinarily give all such persons an opportunity to be heard if that be practicable, and will cause no delay in the prompt and provisional ascertainment of the value of the land. But the scope and extent of the inquiry is left wholly in the discretion of the court, and a failure to hear the owners and claimants of the land, who may or may not be known at the time of the entry of the order, in no wise affects the validity of the order. From such sources of information as may be available at the time "when condemnation proceedings are brought," it is the duty oft he judge of the court wherein the proceedings are brought, promptly and provisionally to ascertain the value of the land involved therein; and when he has satisfied himself in this regard, it is his duty to enter the order for the prescribed deposit, even though he may be well aware that full inquiry his estimate may prove to be less than or in excess of the true value of the land, and even though the claimants and owners have not been heard. It appears from the pleadings that the different strips of land involved in the proceedings now under consideration were made up of small parcels which, prior to the entry of the Railroad Company, belonged to scores and perhaps hundreds of different owners, and it would seem that any attempt by the court at the outset of the proceedings to bring in all the possible claimants, would have been attended with intolerable delay; and be this as it may, it was clearly within the sound discretion of the trial judge to determine provisionally the value of the land, for the purpose of fixing the amount of the deposit, without delaying the proceedings in order to give all or any of these claimants an opportunity to be heard. In thus ruling, we are not unmindful of the perfect and unquestioned right of every owner of lands to be heard in any judicial proceeding wherein his rights of ownership are adjudicated. The right to be heard is inherent in the very nature of such proceedings. But the right of the Railroad Company to acquire possession and ownership of the lands in question the compensation of the owners, has never been challenged; and the provisional and prompt ascertainment of the value of the lands under the terms of Act No. 1592 upon which the order for possession was based was not a proceeding for the ascertainment of title to the land or of its true value for the purpose of determining the amount of compensation to which the owners would be entitled upon the condemnation of their lands. The sole purpose and object of that proceeding was to ascertain the amount of the deposit which the state required the railway corporation to make in a case wherein it invoked the right of eminent domain, and desired to enter into possession of the land before the title and the amount of compensation to be paid the owners of the land had been judicially determined. The question then is not whether the state has power to authorize the taking of lands in condemnation proceedings and to adjudicate the rights of claimants of ownership to just compensation therefor, without giving the parties an opportunity to be heard. The right of the claimants to appear and to be heard on their claims for compensation is not and cannot be questioned under the statute. The real question is whether the state may prescribed a procedure by virtue of which a railway corporation may secure the possession of the lands it seeks to condemn, pending the condemnation proceedings, without first paying the owners just compensation therefor, on condition that it deposit with the Treasurer of the Philippine Islands the value of the land, in money, provisionally ascertained by the court without giving the owners of the land an opportunity to be heard as to the amount of the prescribed deposit. The validity and constitutionality of legislative enactments authorizing taking immediate possession of lands involved in condemnation proceedings, without first making compensation therefor, has frequently been challenged. But "According to the weight of authority if the constitution or statutes do not expressly require it, actual payment or tender before taking is unnecessary, and it will be sufficient if a certain and adequate remedy is provided by which the owner can obtain compensation without any unreasonable delay. According to this view the usual constitutional provision that private property shall not be taken for a public use without just compensation does not require that compensation shall be actually paid in advance of the occupancy of the land taken, and does not prohibit the legislature from authorizing a taking in advance of payment. (15 Cyc., 778 and cases there cited.) Lewis in his work on Eminent Domain, section 678, citing a long list of cases in support of the text, says that:

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As an original question, it seems clear that the proper interpretation of the constitution requires that the owner should receive his just compensation before entry upon his property. When an individual is ousted from possession under a claim of right, his property is taken from him, and, if he has not been paid an equivalent in money it is taken from him without compensation. Some of the cases so hold. But in most States it is held that the making of compensation need not precede an entry upon the property, provided some definite provision is made whereby the owner will certainly obtain compensation. Some courts have gone so far as to hold that the property may be occupied before compensation is made, provided the statute under which it is taken provides a mode for ascertaining the compensation, ands requires its payment by the party taking, although the taking may be by an individual or private corporation. In this jurisdiction the constitutional prohibition against the taking of property without just compensation contains no express provision requiring pre-payment; and following the weight of authority, we are of opinion that there is no prohibition against the legislative enactment of a form of procedure whereby immediate possession of lands involved in expropriation proceedings may be taken, provided always that due provision is made to secure the prompt adjudication and payment of just compensation to the owners. We believe that such provision is made for the adjudication and payment of just compensation to the owners of the lands affected by the condemnation proceedings authorized under Act No. 1592; and we conclude that these legislative provisions cannot be successfully attacked on the ground that they contravene the prohibitions against the taking of property without due process of law or without just compensation. It may be, and doubtless is true that the prescribed procedure, like all man-made institutions, partakes of the imperfections and human weaknesses of its creator, so that it cannot be said to furnish an infallible mode whereby just compensation will be secured to the owners of lands taken in expropriation proceedings. But having in mind that the value of the land, in money, as provisionally ascertained by an impartial judge, must be deposited in the Insular Treasurer before the order for possession can be put into effect; and that the right of the owners to recover just compensation is not limited or restricted to the amount of the deposit should it prove insufficient in a particular case; and further that the order for possession cannot issue until the condemnation proceedings are actually instituted; we are satisfied that it sufficiently and satisfactorily secures the end in view, that is to say, "the prompt adjudication and payment of just compensation without reasonable delay." In the very nature of things, the whole procedure looking to the authorization of the taking possession of the lands in advance of payment might, and in many cases would degenerate into a meaningless farce, if a lawful order granting immediate possession could not issue without first giving the owners an opportunity to be heard as to the value of their lands and the amount of the deposit which should be required of the railway corporation before taking possession. In contested cases this would involve the adjudication in the first place of the title to the lands involved; and after title has been adjudicated the right of the true owner to be heard would necessarily involve to call witnesses in support of his claim as to the value of the land and the amount of the deposit. As we have already indicated, all this would defeat the very purpose which the whole procedure is intended to secure; and would substantially amount to the postponement of the right of entry on the lands until a stage of the proceedings has been reached at which final judgment might well be entered definitely disposing of the case. Having concluded that the constitutional prohibitions do not deny to the legislature the right to authorize the taking of land in expropriation proceedings without pre-payment of just compensation, if due provision is made for the adjudication and payment of just compensation without unreasonable delay; and having arrived at the further conclusion that the deposit of the value of the lands involved, in money, as promptly and provisionally ascertained by an impartial judge, in the course of expropriation proceedings already instituted, sufficiently and satisfactorily secures the end in view, even though the owners of the land are not given an opportunity to be heard as to the amount of the deposit; we conclude that these statutory provisions do not deny any right of the owners of such lands guaranteed in the Constitution or the Philippine Bill of Rights; and that such owners of lands are not entitled to demand the right to be heard, as an indispensable requisite to the validity of the "prompt and provisional" determination of the amount of deposits made under authority of the provisions of section 1 of Act No. 1592.

We come now to consider the contentions of counsel based upon their allegations that the value of the land as provisionally determined in the original order fixing the amount of the deposit was so grossly inadequate, that the respondent judge, treating it as an order entered with manifest abuse of the discretion conferred upon the judge who made it, was justified and empowered either to declare it null, void and without effect, or wholly to disregard it, and himself enter an original order fixing the amount of the deposit which should be required of the Railroad Company. As we have already indicated, if the disposition of this contention required a ruling on our part as to the true value of the land, we would be compelled to hear testimony in that regard, that fact being developed or admitted in the pleadings. But we think that the contentions of counsel can be disposed of without entering upon an inquiry of this hotly disputed question of fact. In the first place it appears that the judge who issued the original order fixed the value of the lands in question at the amount of their assessed valuation, as shown by the sworn certificate of the provincial treasurer; and although it might thereafter be made to appear that the amount so determined would not furnish just compensation of the land taken, or that it was grossly inadequate, it is by no means certain that proof of the mere inadequacy of the amount of the value of the lands thus provisionally ascertained would be sufficient in itself to establish an allegation of abuse of discretion on the part of the judge, who adopted the assessed valuation as a standard for the provisional determination of the amount of the deposit to be made under Act No. 1592. Under such circumstances it may well be doubted that any court, even in certiorari proceedings, would be authorized to annul or set aside the order fixing the amount of the deposit. It has been said that: The principle is uncontroverted that certiorari does not lie tot review maters and proceedings of inferior tribunals, boards, officers, etc., in the proper exercise of discretion confided to them; and that, in order to obtain this review, it must be clearly shown that there has been an unwarrantable and illegal exercise of such discretion, to the substantial injury of the party complaining. (Enc. Pl. and Pr., vol. 4, p. 81.) In support of the doctrine a number of cases are cited including Clifford vs. Overseer of Poor of Frankford (37 N.J.L., 152), wherein it was held as follows: Before this court can interfere on certiorari with a matter confided to the discretion of the court below, it must be clearly shown that there has been an unwarrantable and illegal exercise of such discretion to the substantial injury of the party complaining. Also the case of Avery vs. Ruffin (4 Ohio, 420), wherein the court said in an opinion rendered in certiorariproceedings pending before it: When the court of common pleas makes an order under the statute to distribute fees between the late and present sheriff, the Supreme Court will not interfere unless a strong case of abuse is presented. And the same doctrine is announced in Rose vs. Stuyvesant (8 Johns.[N.Y.], 426; Beekman vs. Wright (11 Johns. [N.Y.], 442) ; People vs. Martin (33 N.Y. Supp., 1000), and Trustees Brooklyn vs. Patchen (8 Wend. [N.Y.], 47), wherein the writ of certiorari was granted to correct abuses of discretion by inferior tribunals. But without passing definitely on this proposition, ,it is sufficient answer to respondents' contentions in this regard to indicate that if there was in fact such an abuse of discretion by the judge who entered the original order as to entitle the aggrieved parties to relief, their remedy, if any they had, was to be found in the institution of appropriate

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proceedings in this court, in like manner as in the case at bar the applicants attack the validity of the order entered by the respondent judge. There can be no question as to the original jurisdiction in the premises of the judge who entered the order fixing the amount of the deposit. Until and unless it was set aside, the order entered by him could not, therefore, be wholly disregarded by the respondent judge merely on the ground that he was of opinion that his predecessor has so far abused his discretion in the premises, that he should be deemed to have gone beyond or to have acted in excess of his jurisdiction in its issuance. We have already shown that the respondent judge was not clothed with power to set aside such an order after the deposit had been made by the railroad company; and it follows that if the respondent land companies were entitled to relief, it could be found only in appropriate proceedings in this court instituted for the purpose of vacating, annulling or setting aside the original order fixing the amount of the deposit to be made by the Railroad Company. We think that what has been said disposes of all the substantial objections advanced by the respondents against the issuance of the writ and the grant of the prayer of the applicants; except their contention that the applicants have another adequate remedy by appeal and therefore should not be permitted to seek relief in certiorariproceedings. To this it is sufficient answer to say that an examination of the statute clearly discloses that it was not the intention of the legislator to authorize an appeal from orders fixing the amount of the deposits the making of which secure to railway corporations the right of immediate possession of lands involved in expropriation proceedings; and that, even if an appeal did lie from such orders, the purpose and object of the "provisional and "prompt" ascertainment of the amount of the deposit being to authorize the immediate entry of the railway corporation upon the lands involved in the proceedings, an appeal from an order, affecting adversely the statutory right of possession and issued without jurisdiction or in excess of the jurisdiction of the court wherein it is entered, would not furnish an adequate remedy in favor of a railway corporation entitled to the undisturbed possession of such lands for the purpose of completing its construction work at the earliest practicable date. The public as well as the railway corporation have an interest in the speedy termination of the work, and when it is made to appear that a court is proceeding without jurisdiction, or in excess of its jurisdiction, to interfere with the statutory right of possession and thus delay the work, the railway corporation will not be compelled to await the slower processes of a remedy by appeal and denied the speedier relief which may be furnished in certiorari proceedings. Perhaps we should indicate, before concluding this opinion, that we have not considered or decided the contentions of counsel for applicants based on their claim of a right to the undisturbed possession of the lands in question, because of the tacit or express consent of the owners and occupants to the entry of the Railroad Company upon these lands prior to the institution of the expropriation proceedings in the court below. We have refrained from any discussion of these contentions because the facts upon which they are based are not unqualified admitted by the pleadings; and because a ruling upon these contentions is not necessary for the final disposition of the case as submitted at this time. We conclude that upon the pleadings submitted to us for judgment the applicants are entitled to the relief prayed for in their complaint. The facts admitted and affirmatively disclosed in the pleadings make it unnecessary for us to issue formal orders directing the bringing up of the original record now on file in the court below; and without stopping to consider whether the answers of the respondents should be treated technically as responses to our order "to show cause," or as answers to the complaint to which a formal demurrer has been interposed, we are of opinion that unless the answers are amended hereafter by the addition of new allegations of fact sustaining the jurisdiction of the respondent judge in the premises, which we do not anticipate, judgment should be entered in this court declaring the order complained of to be null, void and without effect. Unless, therefore, the answers of the respondents are amended in the meantime as above indicated, let judgment be entered ten days from the date of the filing of this opinion declaring the order entered in the court below on the 18th

of February 1915, as set forth in the complaint, null, void and without effect, with the costs of these proceedings against the respondent land companies; and twenty days thereafter let a duly certified copy of that judgment be remitted to the clerk of the Court of First Instance of Tayabas Province for file with the expropriation proceedings wherein the order was entered; and at the same time let the record of these certiorari proceedings be filed with the archives of original proceedings in this court. So ordered. Arellano, C.J., Torres, Johnson, Trent, and Araullo, JJ., concur.

Separate Opinions MORELAND, J., concurring: I agree. (1) In condemnation proceedings the court has such authority only as is expressly conferred by statute or is clearly incident to the complete fulfillment of the duties laid on it by the statute. No express authority is found in the statute for the order objected to in this case and its issuance is not necessary to the performance of the duties laid on the court by the statute. (2) The order of the court fixing the amount of the deposit which the plaintiff company must make under Act No. 1592 before entering into possession of the land involved in the proceeding was in the nature of an offer. Being of such a nature the company had the right to refuse to accept it. It could have rejected the offer and discontinued its proceedings if it found the amount fixed excessive or for any other reason. (3) The condition fixed by the court as a prerequisite to entry having been accepted by the company, the court had no authority to make the condition more onerous after the company, on the faith of the condition already met, had expended on the land vast sums of money in making its roadbed and laying its rails. (4) The assignees of the original owners of the land, who took the lands pending the proceedings, acquired no rights which justified or could support their motion to increase the amount of the deposit.

THIRD DIVISION

[G.R. No. 137431. September 7, 2000]

EDGARDO SANTOS, represented by his attorney-in-fact ROMEO L. SANTOS, petitioner, vs. LAND BANK OF THE PHILIPPINES, JESUS DIAZ, ROBERTO ONG and AUGUSTO AQUINO, respondents.

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DECISION PANGANIBAN, J.: The Comprehensive Agrarian Reform Law (RA 6657) provides that just compensation to landowners shall be paid in cash and bonds. Hence, a trial court decision directing the payment of such compensation "in the manner provided by R.A. 6657" is not illegally amended but is merely clarified by an order, issued during the execution proceedings, that such amount shall be paid in cash and bonds.

"On December 22, 1997, the Regional Trial Court issued an Order declaring that the Land Bank had complied with the writ of execution and ordered the same to release the amount of P44,749,947.82 to petitioner and the amount of P948,857.52 to the Clerk of Court as commission fees for execution of judgment. "The Land Bank remitted the amount of P948,857.52 to the Clerk of Court on December 24, 1997 and released the amount of P3,621,023.01 in cash and Land Bank Bond No. AR-0002206 in the amount of P41,128,024.81 to the petitioner. "Petitioner filed a motion for the issuance of an alias writ of execution before the Regional Trial Court, praying that the payment of the compensation be in proportion of P8,629,179.36 in bonds and P32,499,745 in cash, alleging that the cash portion should include the amounts in the Decision representing the interest payments. "Before the motion could be resolved by the Regional Trial Court, petitioner moved to withdraw the same and instead filed a motion for release of the balance of the garnished amount. He claimed that the payment of P41,128,024.81 in Land Bank Bonds was not acceptable to him and that the said amount should be paid in cash or certified check. The respondent Land Bank, on the other hand, opposed the motion, contending that the judgment amount had already been satisfied on December 24, 1997. "The Regional Trial Court issued an Order on March 20, 1998 for the Land Bank to release the balance of P41,128,024.81 from the garnished amount in cash or certified check. "The Land Bank moved for a reconsideration of the said Order, maintaining that the payment was properly made in Land Bank Bonds. "On March 25, 1998, petitioner filed a motion to hold the Land Bank in contempt for its refusal to release the balance of the garnished amount in cash or certified check. "Respondent Regional Trial Court presided over by a new judge, resolved the two motions on April 24, 1998. It held that the payment of just compensation must be computed in the manner provided for in Section 18, Republic Act No. 6657. Thus, it ruled that: "To summarize, the very issue to be resolved in the instant case is to determine how much should be paid in cash and how much also should be paid in bonds, to fully satisfy the judgment herein rendered in the amount of P49,241,876.00, the computation of which is as follows: Total land value per judgment P49,241,876.00 Amount payable in bonds: 70% (50 has) P22,323,932.75 75% (excess) P13,012,907.41 35,336,840.16 Amount payable in cash: 30% (50 has) P9,567,399.75

The Case

Before the Court is a Petition for Review on Certiorari of the December 8, 1998 Decision[1] and the February 2, 1999 Resolution[2] of the Court of Appeals (CA)[3] in CA-GR SP No. 48517, which had respectively dismissed the Petition for Certiorari and Mandamus, filed by petitioner, and denied reconsideration. The decretal part of the assailed Decision reads: "WHEREFORE, the petition is DISMISSED. The Order of April 24, 1998 is AFFIRMED."[4]

The Facts

The antecedents of the case are adequately summarized in the assailed Decision, as follows: "It appears that petitioner Edgardo Santos is the plaintiff in Agrarian Case No. RTC 94-3206 for the determination of just compensation regarding properties which were taken by DAR under P.D. No. 27 in 1972. On August 12, 1997, the Regional Trial Court, sitting as an Agrarian Court rendered judgment, the dispositive portion of which reads: "WHEREFORE, judgment is hereby rendered (1) fixing the amount of P49,241,876.00 to be the just compensation for the irrigated and unirrigated ricelands with areas of 36.4152 and 40.7874 hectares, respectively, and situated at Pinit, Ocampo, Camarines Sur which are portions of the agricultural lands covered by Transfer Certificates of Title Nos. 2883 and 2884 in the name of the [p]laintiff, and which were taken by the government pursuant to Land Reform Program as provided in Presidential Decree No. 27; and (2) ordering Defendant Land Bank of the Philippines to pay [p]laintiff the amount of FORTY-FIVE MILLION SIX HUNDRED NINE-EIGHT THOUSAND EIGHT HUNDRED FIVE AND 34/100 (P45,698,805.34) PESOS, Philippine [c]urrency, in the manner provided by R.A. 6657, by way of full payment of the said just compensation. No pronouncement as to costs." "A preliminary valuation in the amount of P3,543,070.66 had in fact been previously released by the Land Bank in cash and bond; thus deducting it from the total amount adjudged, the balance unpaid amount[ed] to P45,698,805.34 which was ordered by the Regional Trial Court to be paid in accordance with RA 6657. "The Land Bank elevated the matter to the Supreme Court, which eventually dismissed the appeal in its Resolution dated December 17, 1997. Accordingly, a writ of execution was issued by the Regional Trial Court on December 4, 1997 and a notice of garnishment was served on the Land Bank on December 17, 1997.

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35% (excess) 4,337,635.81 13,905,035.56 Less: Preliminary valuation: P3,543,070.66 Commissioner's Fee: 948,857.52 Payment to plaintiff on 12-24-97 3,621,023.01 P 8,112,951.19 ______________ P 5,792,084.37 "Consequently, not only must the Order of March 20, 1997 be reconsidered, but by implication, the Order of this Court dated December 22, 1997 is likewise deemed reconsidered. It goes without saying that the payment of just compensation must be made in accordance with Sec. 18, Republic Act No. 6657 in relation to Section 9, Rule 39 of the 1997 Rules of Civil Procedure insofar as it does not contravene x x x the former. "On the basis of the foregoing discussion, this Court finds no merit [i]n the motion to cite in contempt of court the Land Bank of the Philippines. "Be it also noted that Defendant Land Bank, through counsel, has submitted a re-computation of the compensation in accordance with her manifestation on oral argument [with] which this court begs to disagree.

The CA upheld the questioned April 24, 1998 Order of the trial court. The appellate court opined that the Order merely ascertained the mode of compensation for petitioner's expropriated properties, as decreed in the final judgment, and was issued pursuant to the court a quo's general supervisory control over the process of execution. Said the CA: "RA 6657 is clear and leaves no doubt as to its interpretation regarding the manner of payment of just compensation. The provision allows the landowner to choose the manner of payment from the list provided therein, but since plaintiff had obviously wanted payment to be made in cash, then the trial court, through the new presiding judge, Judge Villegas-Llaguno, had only to apply Section 18 of R.A. 6657 which provides for the payment of a percentage thereon in cash and the balance in bond, in the exercise of her ministerial duty to execute the decision which ha[d] become final and executory. Nevertheless, in the exercise of her supervisory powers over the execution of a final and executory judgment, Judge Villegas-Llaguno found it necessary to modify the order of Judge Naval dated December 22, 1997 as regards the order of execution since it had erroneously applied Section 9, Article 39 of the Rules of Court regarding satisfaction of money judgments in the manner of payment even as to the portion required to be paid in bonds, and thus, had completely disregarded the portion in the final and executory decision of August 12, 1997 which makes direct reference to RA 6657. "The garnishment, on the other hand, of the amount of P45,698,805.34 from the Land Bank of the Philippines does not affect the execution of the judgment in the case. As above-expounded, the judgment was to be fully executed in accordance with the provisions of R.A. 6657 which allows the landowner to have the compensation be paid in cash and in bond, but not fully in cash, as herein petitioner would like to maintain. Technically, the garnishment which was made in this case pursuant to the order of execution by Judge Naval shall extend only to the cash portion of the judgment amount. On the other hand, with respect to the amount to be issued in bonds, the only jurisdiction of the trial court is to order the Land Bank of the Philippines to issue the corresponding bonds and deliver the same to herein petitioners. Hence, this Petition.[6]

Issues

"WHEREFORE, Defendant Land Bank of the Philippines is hereby ordered to pay the [p]laintiff the [c]ash [b]alance of FIVE MILLION SEVEN HUNDRED NINETY TWO THOUSAND EIGHTY-FOUR and 37/100 (P5,792,084.37), Philippine [c]urrency and the amount of THIRTY FIVE MILLION, THREE HUNDRED THIRTY SIX THOUSAND EIGHT HUNDRED FORTY and 16/100 (P35,336,840.16) PESOS in government instruments or bonds to fully satisfy the Judgment herein in the amount of forty-nine million two hundred forty one thousand eight hundred seventy six (P49,241,876.00) pesos, Philippine [c]urrency as just compensation due the [p]laintiff. "Thus, the Order of this Court dated March 20, 1998 is hereby reconsidered and SET ASIDE and by implication, the Order dated December 22, 1997 is hereby deemed reconsidered and MODIFIED accordingly. "The Motion to Cite in Contempt of Court the Land Bank of the Philippines is hereby DENIED.

In his Memorandum,[7] petitioner submits the following issues for resolution: "1. Did respondent judge act without jurisdiction when she issued the Order dated 24 April 1998 amending the final Judgment dated 12 August 1997? "2. Is it a ministerial duty of the respondent judge to order the release and of the Land Bank to release the garnished amount under Section 9 (c) of Rule 39 of the Rules of Court? "3. May respondent Land Bank question the legality of its own compliance with the Writ of Execution?

"SO ORDERED." "Petitioner's motion to reconsider the above-mentioned Order was denied on June 17, 1998[;] hence, this petition."
[5]

"4. Are the respondent judge and the respondent Land Bank and its officials liable for damages under Section 3 of Rule 65 of the Rules of Court?"[8] In short, the main issue is whether the April 24, 1998 Order of Judge Llaguno was proper.

The CA Ruling

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The Court's Ruling

We find no merit in this Petition.

the excess hectarage is concerned. (b) For lands above twenty-four (24) hectares and up to fifty (50) hectares

Main Issue: Propriety and Efficacy of the April 24, 1998 RTC Order

government financial instruments negotiable at any time Thirtypercent (30%) cash, the balance to be paid in government financial instruments negotiable at anytime."

Petitioner insists that the April 24, 1998 Order of Judge Llaguno was issued without jurisdiction. That is, it allegedly amended the August 12, 1997 judgment of the Special Agrarian Court by requiring the payment of compensation in cash and bonds.

Be that as it may, petitioner contends that the bank is estopped from questioning its alleged undertaking to pay him in cash. This contention was purportedly manifested in its letter-compliance with the Writ of Execution and the Notice of Garnishment. In the letter, respondent said that it was segregating a specified amount from the Agrarian Reform Fund, in order to pay him. He insists that such amount was garnished in accordance with Section 1, Rule 39 of the Rules of Court, and should have been delivered to him pursuant to Section 9 of the same Rule. We disagree. Respondent bank was obliged to follow the mandate of the August 12, 1997 judgment. Hence, its compliance with the Writ of Execution and the Notice of Garnishment[11] ought to have been construed as an agreement to pay petitioner in the manner set forth in Republic Act No. 6657. Its compliance was not an undertaking to pay in cash because such act would have been a deviation from the dictum of the final judgment, to which execution must conform.[12] Paying in cash, as petitioner demands, is not compatible with such judgment. Misplaced is petitioner's reliance on Section 9, Rule 39 of the Rules of Court, because the final judgment decrees payment in cash and bonds. Indeed, this provision must be taken in conjunction with RA 6657. Since respondent bank had already given petitioner the entire adjudged amount in the required proportion of cash and bonds, it must be deemed to have complied with its duty under Rule 39. We understand petitioner's desire to be paid in cash; after all, his compensation was long overdue. However, we cannot grant his Petition because it is not sustained by the law. In this regard, we recall the Court's explanation in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform:[13] "It cannot be denied from these cases that the traditional method for the payment of just compensation is money and no other. And so, conformably, has just compensation been paid in the past solely in that medium.However, we do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation. xxxxxxxxx "With these assumptions, the Court hereby declares that the content and manner of the just compensation provided for in the afore-quoted Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but after all this Court is not a cloistered institution removed from the realities and demands of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the rest our people to see the goal of agrarian reform achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing decades. We are aware that invalidation of the said section will result in the nullification of the entire program, killing the farmer's hopes even as they approach realization and resurrecting the specter of discontent and dissent in the restless countryside. That is not in our view the intention of the Constitution, and that is not what we shall decree today. "Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find further that the proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more than the big landowners, who can afford a bigger balance in bonds and other things of value. No

Assailed Order Not an Amendment, But an Iteration of Final Judgment

The argument is not persuasive. The April 24, 1998 Order was not an illegal amendment of the August 12, 1997 judgment which had become final and executory. The reason is that the Order did not revise, correct, or alter the Decision. Rather, the Order iterated and made clear the essence of the final judgment. The August 12, 1997 judgment mandated compensation to the petitioner "in the manner provided by R.A. 6657."[9] There is certitude with regard to this assertion. The confusion in the present case, which required the issuance of the assailed Order, arose from petitioner's belief that the Land Bank had obligated itself to pay in cash the compensation due him. This fact can allegedly be gleaned from its compliance with the December 4, 1997 Writ of Execution and December 19, 1997 Notice of Garnishment.

Compensation Due Petitioner to Be Paid Pursuant to RA 6657

However, it is clear from the August 12, 1997 judgment that the compensation was to be paid "in the manner provided by RA 6657."[10] Pursuant to Section 18 of the same law, payment was to be in cash and bonds, as indicated below: "Section 18. Valuation and Mode of Compensation. -- The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and LBP, in accordance with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land. "The compensation shall be paid in one of the following modes, at the option of the landowner: (1) Cash payment, under the following terms and conditions (a) For Twenty-five percent lands above fifty(50)(25%) cash, the hectares, insofar as balance to be paid in

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less importantly, the government financial instruments making up the balance of the payment are 'negotiable at any time.' The other modes, which are likewise available to be landowner at his option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the amount of just compensation. "Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know they are of the need for their forbearance and even sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail." All told, we hold that the appellate court was correct in sustaining the propriety and the efficacy of the April 24, 1998 Order of Judge Llaguno. In the exercise of her supervisory powers over the execution of a final and executory judgment,[14] such as her August 12, 1997 Decision, special circumstances attending its execution impelled her to issue the Order clarifying the terms thereof. Petitioner's claim for damages against the bank must likewise be denied because, as already explained, it was well within its rights in resisting the former's claim. WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioner. SO ORDERED. Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

determined compensation for plaintiff's parcels of land placed by the Department of Agrarian Reform (DAR) under Operation Land Transfer pursuant to Presidential Decree No. 27, to be delivered to plaintiff only upon final release order of the court. The amount shall be taken from the ARF which answers for the payment of lands covered by the Government's agrarian reform program, not from Land Bank's corporate funds which are separate from the ARF." Because execution which varies the tenor of the judgment or exceeds the terms thereof is a nullity. Equatorial Realty Development, Inc. v. Mayfair Theater, GR No. 136221, May 12, 2000; Philippine Bank of Communications v.Court of Appeals, 279 SCRA 364, September 23, 1997; Matuguina Integrated Wood Products, Inc. v. Court of Appeals, 263 SCRA 490, October 24, 1996; Ex-Bataan Veterans Security Agency, Inc. v. National Labor Relations Commission, 250 SCRA 418, November 29, 1995.
[13] [14] [12]

175 SCRA 343, July 14, 1989, per Cruz, J.

The rule is that the court which rendered the decision has a general supervisory control over the process of execution. Panado et al. v Court of Appeals, 298 SCRA 110, October 14, 1998; Balais v. Velasco, 252 SCRA 707, January 31, 1996.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-35861 October 18, 1979

[1] [2]

Rollo, pp. 28-37. Ibid., p. 38. MUNICIPALITY OF DAET, petitioner, vs. COURT OF APPEALS and LI SENG GIAP & CO., INC., respondent.

[3] Seventh Division composed of Justices Salome A. Montoya, chairman and ponente; and Ruben T. Reyes and Eloy R. Bello, members, both concurring. [4] [5] [6]

CA Decision, p. 10; rollo, p. 37. CA Decision, pp. 1-5; rollo, pp. 28-32. GUERRERO, J.: The judgment of the respondent Court of Appeals, subject of the instant petition to review on certiorari, "fixing the fair market value of the property sought to be expropriated at P200.00 per square meter or for of FIVE HUNDRED FORTY THREE THOUSAND FOUR HUNDRED (P543,400.00) PESOS, and the value of the improvement thereon at THIRTY SIC THOUSAND FIVE HUNDRED (P36,500.00) PESOS, Philippine Currency, both amounts to bear legal interest from and after the date of the actual taking of possession by the Municipality of Daet, Camarines Norte until the full amount is paid, with costs against plaintiff-appellant," must be affirmed in the light of the unusual, unique and abnormal circumstances obtaining in this case where the complaint for condemnation was filed on August 9, 1962 or seventeen (17) years ago but up to the present, the petitioner Municipality of Daet has failed to make the deposit required to take possession of the property sought to be expropriated. The Municipality of Daet instituted condemnation proceedings against private respondent Li Seng Giap & Co. Inc. on August 9, 1962 before the Court of Firs Instance of Camarines Norte for the purpose of acquiring and subsequently converting the following described property owned by private respondent as a public park: A parcel of land (Lot No. 3 Plans PSU-57331 situated in the Poblacion, Municipality of Daet, bounded on the North-East by a provincial road known as Vinzons Avenue; on the South-East,

The case was deemed submitted for decision on October 29, 1999, upon receipt by this Court of the respondents' Memorandum, signed by Atty. Augusto M. Aquino of Gonzales Aquino & Associates. Petitioner's Memorandum, signed by Atty. Fernando A. Santiago, was received on October 20, 1999.
[7] [8]

Rollo, pp. 199-214.

Ibid., pp. 204-205. The issue of whether bonds constitute "just compensation" within the constitutional provision could not be taken up by the Court because it was not raised by the parties.
[9]9 [10]

Rollo, p. 45.

Entitled "An Act Instituting A Comprehensive Agrarian Reform Program To Promote Social Justice And Industrialization, Providing The Mechanism For Its Implementation, And For Other Purposes."
[11]

Through the December 19, 1997 letter of Augusto M. Aquino, LBP vice president, Agrarian Legal Office; rollo, p. 50. The pertinent portion of the letter reads: "Relative to the above-subject, please be informed that Land Bank has segregated from the National Government's Agrarian Reform Fund (ARF) in the Bank's custody the amount of P45,698,805.34 to satisfy the RTC x x x

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by Felipe II Street; on the South, by Ildefonso Moreno Street, and on the West, by J. Lukban Street, covering an area of TWO THOUSAND SEVEN HUNDRED AND SEVENTEEN (2,717 sq. meters) SQUARE METERS, more or less and assessed by TRANSFER CERTIFICATE OF TITLE NO. 207 in the name of Li Seng Giap & Co. 1 On August 20, 1962, private respondent, having been served with summons through counsel, filed a "Motion to Dismiss" on the following grounds: 1. The proposed expropriation has not been duly authorized as provided by law, principally because it has not been approved by the Office of the President as required by Section 2245 of the Revised Administrative Code; 2. There is no genuine necessity for the proposed expropriation of the defendant's property; 3. The proposed park should be put up in a different site which would entail less expense to the plaintiff; 4. The present expropriation proceeding instituted by the herein plaintiff against the defendant is discriminatory; 5. The plaintiff does not have sufficient funds to push through its project of constructing a park and to allow the plaintiff to expropriate defendant's property this time would be only to needlessly deprive the latter of the use of its property. 2 On February 8, 1963, the trial court rendered a decision dismissing the expropriation proceedings mainly on the grounds that there is no "genuine need" for the petitioner to convert the aforestated lot into a park nor necessity to widen the streets and that even if there is genuine necessity for the proposed expropriation, still the petitioner cannot, in this case, exercise the power of eminent domain as it has no funds to pay the reasonable value of the land and the building thereon. 3 On February 12, 1963, petitioner filed a motion for reconsideration which was denied on February 27, 1963. Petitioner then appealed to the Court of Appeals, which appeal was docketed as CA-G.R. No. 32-259-R. On April 14, 1968, the Court of Appeals rendered a decision reversing the trial court's decision, the dispositive portion of which is as follows: WHEREFORE, the appealed "decision" (order) in Civil Case No. 1436 for expropriation is hereby reversed and set aside, and, in lieu thereof, another one is hereby rendered denying defendant Li Seng Gia & Company's motion for dismiss; declaring that plaintiff Municipality of Daet has a lawful right to take the property sought to be condemned, for the public use described in the complaint, upon payment of just compensation to be determined as of the date of the filing of the complaint; directing the court a quo to promptly fix the provisional value of the property sought to be condemned for the purposed of the motion of plaintiff Municipality of Daet to take immediate possession of said property under Sec. 2 of Rules 67 (formerly Sec. 3 of Rules 69) of the Rules of Court; and remanding the case to the court a quo for further proceedings consistent with this decision, the costs in this appeal to be taxed against plaintiff Municipality of Daet in accordance with Sec. 12 of Rule 67 (formerly Sec. 13 of Rule 69) of the Rules of Court; ... 4 On March 20, 1969, after the records of the case were remanded to the trial court, private respondent filed a "Motion for Appointment of Commissioners to Fix Just Compensation for the Property Sought to be Taken."

On April 15, 1969, the trial court issued twin orders: (1) fixing the provisional value of the land at P129,99 per square meter and the value of the improvement at P30,000.00 totalling P356,040.00 and require the Municipality to deposit with the Provincial Treasurer in cash or in security which should be payable on demand and upon deposit being effected, the Clerk of Court was ordered to issue the necessary writ of place the Municipality in possession of the property; and (2) appointing Atty. Ernesto de Jesus, Provincial Assessor, as chairman; Atty. Jose V. Jamito, PNB Branch Attorney and Dr. Mateo Aquino, a resident of the municipality, as members of the committee on appraisal. The committee members proceeded to qualify by taking their oaths of office and then held three sessions on May 10, May 17, and May 24, 1969. On May 28, 1969, the committee filed t he following report: COMMISSIONERS' REPORT In compliance with the order of this Honorable Court dated April 15, 1969, and pursuant to the provisions of Sec. 6. Rule 67 of the Rules of Court, the undersigned commissioners, with due notice to the counsels of both parties, convened in the morning of May 10, 1969, for the purpose of finding ways and means by which the commissioners could ascertain the fair market value of the property subject of this proceeding. There are two basic approaches used in the appraisal of land sought to be condemned the sale approach, and the income approach. The commissioners as well as the counsels of both parties agreed to use the sale approach. In order to enable the counsels of both parties, as well as the commissioners, to gather or secure documents regarding transaction of real property which the commissioners might use as guide in determining the fair market value, the parties agreed to postpone the hearing to May 17, 1969, at 6:30 in the morning. Hearing was resumed in the morning of May 17, forthwith, the counsel for the plaintiff presented documents which were submitted as Exhibits, to wit: 1. Exh. "A" Deed of absolute sale executed by Lydia Moreno in favor of Jaime R. Alegre, entered as Doc. No. 160: Page No. 33: Book No. IV; Series of 1962. (The consideration was about P13.00 per square meter). 2. Exh. "B" Deed of absolute sale executed by Jesus Villafranca y Aules in favor of Sourthern Products Import and Export Corporation, entered as Doc. No. 314; Page No. 64; Book No. II; Series of 1962. (The consideration was around P14.00 per square meter). 3 Exh. "C" Deed of absolute sale executed by Julio Curva, et al. in favor of Felicidad Vinzons Pajarillo, entered as Doc. No. 186; Page No. 39; Book No. 1; Series of 1958. (The consideration was P 15.00 per square meter). 4. Exh. "D" Deed of Absolute Sale executed by Clao Dy Kim To in favor of Concepcion Fonacier-Abao, entered as Doc. No. 133; Page No. 88; Book No. V; Series of 1948. (The consideration was about P8.57 per square meter). 5. Exh. "E" Deed of sale with mortgage executed by Dr. Agustin F. Cuevas and Leticia Lopez, in favor of the Camarines Norte Teachers Cooperative Credit Union, Inc., entered as Doc. No. 117; Page No. 56; Book NO. VIII; Series of 1961. (The consideration was P57,000.00 the lot with an area of 972 square meters, and a three-storey concrete building assessed at P16,000.00 under Tax Dec. No. 7083. If we will exclude the value of the building, the consideration for the land will be about P43.00 per square meter). After the submission of the aforementioned exhibits, upon motion of the counsel for the defendant, the hearing was postponed to May 24, 1969, at 8:30 in the morning. Upon

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resumption of the hearing on said hour and date, the counsel for the defendant presented Exh. 1, which the deed of sale executed by the Municipality of Daet in favor of the Development Bank of the Philippines; the document was executed on January 30, 1969; Exh. "1-A", the consideration in the amount of P205,600.00; Exh. "1-B", the area of 2,056 square meters; and Exh. "2", the letter of Tomas Cootauco to Li Seng Giap & Co., dated July 21, 1962. In addition to the aforementioned evidence, the counsel for the defendant presented as witness Lo Chin who testified that sometime in July, 1962. In addition to the aforementioned evidence, the counsel for the defendant presented as witness Lo Chin who testified that sometime in July, 19 1962 (after the fire), he was instructed by his son-in-law, Mr. Jesus Ty Poco, to see Mr. Jose Ong, the representative of Mr. William Lee, for the purpose of making an offer to buy the land subject of this proceeding for a price of P120.00 per square meter, and P30,000.00 for the structure thereon; that he had talked with Mr. William Lee, for the purpose of making an offer to buy the land subject of this proceeding for a price of P120.00 per square meter, and P30,000.00 for the structure thereon; that he had talked with Mr. Jose Ong, for the same purpose, on several occasions 5 or 6 times, the last was sometime in the first week of May, this year wherein he offered to pay as high as P150.00 per square meter, and P50,000,00 for the structure thereon; and that Mr. Ty Poco, having been born in Mercedes, and resided here since birth, was desirous of buying said property because he intends to build a memorial thereon. Counsel likewise presented Mr. Jose Ong as witness to corroborate the testimony of Lo Chin. After the hearing held by the commissioners, Atty. Ernesto de Jesus, who is the incumbent provincial assessor, dig up the records in his office for the purpose of finding, in addition to the exhibits already presented, other documents covering transactions of properties located within the areas near the land sought to be condemned, but failed to locate even a single document Hence, the commissioners have no other recourse but to base their appraisal of the value of the land under consideration from the Exhibits submitted by the parties. Under Sec. 4, Rule 67, of the Rules of Court, just compensation is to be determined as of the date of the filing of the complaint. The above-entitled complaint was filed in August, 1962; hence, Exh. "1", Exh. "1-B" and Exh. "1-C" could not be taken into consideration, the same having been executed in the year 1969 seven years after the filing of the complaint. The offer of Mr. Jesus Ty Poco could not also be considered because the same was made by one who was under an imperative necessity of buying the property. After all the exhibits submitted by the plaintiff had been examined by the commissioners, and upon a conscientious and analytical study of the sales of land near the land subject of this proceeding, and after serious deliberations on the matter, the commissioners agreed that, in the year 1962, the reasonable or fair market value of the land subject of this proceeding should be P60.00 per square meter; and the structure remaining thereon at P15,000.00 Attached hereto is the map of the commercial center of Daet wherein the land subject of this case is shown. The lands described in the Exhibits submitted by the plaintiff are also indicated thereon. Daet, Camarines Norte, May 28, 1969. R e s p e c

t f u l l y s u b m i t t e d , (Sgd.) Ernesto de Jesus (Sgd.) Jose V. Jamito Commissioner Commissioner (Sgd.) Mateo D. Aquino Commissioner
5

Private respondent, having received copy of the commissioner's report, filed a "Motion to Admit Additional Evidence" which was opposed by petitioner but the same was granted by the Court provided that the additional evidence consisted of the expert testimony of a duly licensed broker. On August 20, 1969, the municipality manifested its conformity to the commissioner's report. Meanwhile, on July 23, 1969, Judge Gabriel V. Valero, the Presiding Judge at Branch I, issued an order transferring this case to Judge Isidro Vera of Branch II, who proceeded to take the additional evidence of private respondent. Said evidence consisted of the testimony of Engineer Aurelio B. Aquino, who appraised the land involved herein at P200.00 per square meter and the improvement thereon at P36,500.00 in 1969. On December 2, 1969, after submission of evidence for both parties, the trial court rendered a decision disregarding the valuation made by the commissioners and using the appraisal of Engineer Aurelio B. Aquino in 1969 as the basis in determining the value of the land in 1962. The dispositive portion of said decision is quoted herein as follows: WHEREFORE, the Court renders judgment fixing the reasonable value of the property sought to be expropriated at P117.00 per square meter or for a total amount of Three Hundred Seventeen Thousand Eight Hundred Eighty Nine Pesos (P317,889.00), and the value of the improvement at Thirty Six Thousand Five Hundred Pesos (P36,500.00), this amount to bear interest at the legal rate from the filing of the complaint until paid with costs against the plaintiff. SO ORDERED. 6

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Both petitioner and private respondent filed their respective motions for reconsideration, the former praying that the trial court give due course to the commissioner's report while the latter insisting that the market value of the land be fixed at P200.00 per square meter. Upon denial of the said motions, both parties then appealed to the Court of Appeals. On October 18, 1972, respondent Court of Appeals rendered a decision sustaining the valuation of the property in 1969, declaring the municipality to have a lawful right to expropriate and modified the judgment of the trial court with respect to the interest that can be recovered which should be from and after the date of actual taking. Petitioner's motion for reconsideration having been denied, the instant petition for review on certiorari was filed and the following assignment of errors raised: I. Contrary to law and jurisprudence, the Court of Appeals erred in the interpretation and application of Section 4, Rule 67 of the Rules of Court by determining the value of the property in condemnation proceedings at the time of the rendition of the judgment of the trial court and not at the date of the filing of the complaint. II. Contrary to the principle of res judicata, the Court of Appeals gravely abused its power in modifying, disregarding and amending its own decision which has long become final and executory (in CA-G.R. No. 32259-R). III. Without regard to the guidelines set forth by procedural laws and jurisprudence, the Court of Appeals erred in giving credence to an appraiser under the employ of the private respondent and totally disregarded the findings of the commissioners appointed by the Court and the by not declaring that the trial judge of Branch II of the Court of First Instance of Camarines Norte has gravely abused his discretion in taking cognizance of the condemnation case. IV. In any event, by virtue of the Presidential Decree No. 42 issued on November 9, 1972 private respondent in estopped from claiming in valuation higher than the assessed value of the property sought to be condemned. 7 The first assignment of error assails the respondent Court's application of Section 4, Rule 67 of the Revised Rules of Court which states the time when the value of the land should be determined in condemnation proceedings. The Rule provides thus: Sec. 4. 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 payment of just compensation to be determined as of the date of the filing of the complaint ... A look into the original of this provision reveals that it is a reproduction of Section 5, Rule 69 of the Rules of Court of July 1, 1940. In turn, the said provision in the Rules of 1940 appears to have been taken from the ruling Manila Railroad Company vs. Caligsihan, 8 a 1919 case, where the rule that "the value of the property taken should be fixed as of the date of the proceedings" was enunciated. Prior to the promulgation of the Rules of 1940, however, there is another case that touched on the question of time when valuation of the property taken should be fixed. This is the case of Provincial Government of Rizal vs. Caro de Araullo 9 a 1938 case, where the value of the property therein involved was fixed as of the date when it was taken in 1927 and not at the time of the filing of the complaint in 1928. This ruling was reiterated in Republic vs. Lara, 10 a

1954 case, where it was held that the value of the lands expropriated must be reckoned as of the time of the actual possession by the Government in 1946 and not as of the time of the filing of the complaint in 1949. Such was the ruling notwithstanding the fact that the Rules of 1940 was already in force and effect. In explaining the ruling, the Court therein held: ... Ordinarily, inquiry is limited to actual market values at the time of the institution of the condemnation proceedings because under normal circumstances, the filing of the complaint coincides or even precedes the taking of the property by the plaintiff; and Rule 69 simply fixes this convenient date for the valuation of property sought to be expropriated. Where, however, the actual taking or occupation by the plaintiff, with the consent of the landowner long precedes the filing of the complaint for expropriation the rule to be followed must still be that enunciated by us in Provincial Government of Rizal vs. Caro, supra, that "that value of the property should be fixed as of the date when it was taken and not of the date of the filing of the proceedings." For where 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 of 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 the 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 the 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." (18 Am. Jur. 873, 874) Subsequent cases where the taking preceded the filing of the expropriation proceedings followed the doctrine in the Caro case. These cases were: Republic vs. Garcellano, et al.; 11 Municipal Government of Sagay vs. Jison, et al.; 12 and Alfonso vs. Pasay City. 13 However, in the case of Republic vs. Narciso, et al., 14 where the expropriation proceeding preceded the taking, it was held that the value of "the property to be considered are those at the beginning of the expropriation" and not accordingly at the time of the taking of said property. For this reason, this Court fittingly saw the need for clarify the departure of some cases from the mandate of Section 5, Rule 69 of the Rules of Court of 1940 (now Section 4, Rule 67 of the Revised Rules of Court) in the case of Republic of the Philippines vs. Philippine National Bank, 15 where it was held: 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 the said possession, not the filing of the complaint, and 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 5, directing that compensation" be determined as of the date of the filing of the complaint," would never be operative. In Capitol Subdivision, Inc. vs. Province of Negros Occidental, 7 SCRA 60, the Court said that "Since the right of the Province of Negros Occidental to expropriate the lot in question in the present case is not contested, the owner of said lot is entitled to recover from said province the fair and full value of the lot, as of the time when possession thereof was actually taken by the province, plus consequential damages including attorney's fees from which the consequential benefits, if any, should be deducted with interest at the legal rate, on the aggregate sum due to the owner from and after the date of actual taking." And in the case of J.M. Tuason & Co., INc. vs. Land Tenure Administration, 31 SCRA 413, the Court, speaking thru now Chief Justice Fernando, reiterated the "well-settled (rule) of the property at the time of its taking. Anything beyond that is more and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriation entity." In the case at bar, it is a fact that there has been no taking of the property prior to the institution of the condemnation proceedings. And it cannot even be said that the filing of the complaint coincided with he taking of the property by the

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plaintiff because the latter did not enter into possession of the property since it failed or did not comply with the order of the Court requiring the municipality to make the necessary deposit of the provisional value as fixed by the Court in its Order of April 15, 1969. Petitioner did not even move for a reconsideration of said Order. The trial proceeded and after hearing and submission of evidence for both parties, the trial court rendered on December 2, 1969 its decision "fixing the reasonable value of the property sought to be expropriated at P117.00 per square meter or for a total amount of Three Hundred Seventeen Thousand Eight Hundred Eighty Nine Pesos (P317,889.00), and the value of the improvement at Thirty Six Thousand Five Hundred Pesos (P36,500.00), said amount ... to bear interest at the legal rate from the date of the filing of the complaint until paid." Still questioning the value determined by the trial court, petitioner appealed to the Court of Appeals and on October 8, 1972, the appellate court in its judgment fixed the value of the property at P200.00 per square meter and P36,500.00 for the improvement. Not yet satisfied, the municipality appealed to the Supreme Court and meantime took no step to take possession of the land. While petitioner submitted a Manifestation on September 15, 1977 to this Court invoking Presidential Decree No. 42 dated November 9, 1972 and manifesting that it had made a deposit to the Philippine National Bank in the amount of P54,370.00 as per PNB Certificate No. 9381 dated February 9, 1973, We hold that petitioner has not made the correct and proper deposit of the provisional value as fixed by the trial court. It is elementary that Presidential Decree No. 42 of November 9, 1972 which grants the right to take or enter upon the possession of the property sought to be expropriated if he deposits with the Philippine National Bank an amount equivalent tot he assessed value of the property for purposes of taxation has no application to the case at bar where the Court of Appeals had already fixed the value of the property at P200.00 per square meter and P36,500.00 for the improvement in its decision promulgated on October 18, 1972 about three weeks earlier than the issuance of the Presidential Decree No. 42 By not complying with the orders of the trial court and the appellate court, petitioner would benefit by its noncompliance and dilly-dallying in taking possession of the property which We will not sanction or allow to the prejudice of the private respondent landowner who should not be penalized by the protracted delay of petitioner in taking over the property over a period of seventeen (17) years during which time private respondent was deprived of the beneficial use of the land and the improvement thereon. Petitioner upon tiling the complaint has the duty to make the deposit in the amount provisionally ascertained and fixed by the court (Sec. 2, Rule 67, Rules of Court), which deposit serves the double purpose of pre- payment of the property if the same is finally expropriated and of an indemnity for damages if the proceedings are dismissed. (Visayan Refining Co. vs. Camus, 40 Phil. 550; Republic of the Philippines vs. Baylosis, L-13582, Sept. 30, 1960) The records disclose that petitioner filed a Motion for Authority to Demolish Building of Private Respondent dated June 27, 1974 for reasons therein alleged which private respondent opposed as not being the proper procedure under the law to abate a nuisance unless petitioner deposits the amount of P36,500.00 which is the value of the improvement. The Court resolved to deny the motion without prejudice to petitioner's taking the proper proceedings for the abatement of the alleged nuisance pursuant to the provisions of the new Civil Code in its Resolution of July 24, 1974. The records further disclose that in the Petition to Cite the Mayor of the Municipality of Daet (Herein Petitioner) in Contempt of Court filed by private respondent on February 14, 1978, this Court was informed that the petitioner acting thru its Mayor, Engineer Jose P. Timoner, started to demolish on February 6, 1978 the building of the private respondent, attaching thereto photographs marked Annexes 1 and 2 showing the building before and during the demolition. Private respondent prayed that the Mayor be cited for contempt or alternatively, that the petitioner be ordered to deposit with the Philippine National Bank the amount of P36,500.00 instead of P28,830.00 to await the final outcome of this case. Commenting on the petition to cite the Mayor in contempt of court, petitioner again relies on Presidential Decree No. 42 alleging that the assessed value of the property for taxation purposes is only P18,250.00 which is less than the amount of P28,830.00 it had already deposited with the Philippine National Bank.

The above antecedent facts and circumstances of this case are unique and abnormal such that by reason thereof, We agree with the judgment of the Court of Appeals fixing the fair market value of the property sought to be expropriated at P200.00 per sq. meter or for a total of FIVE HUNDRED FORTY THREE THOUSAND FOUR HUNDRED (P543,400.00) PESOS, and the value of the improvement thereon at THIRTY SIX THOUSAND FIVE HUNDRED (P36,500.00) PESOS, Philippine Currency, both amounts to bear legal interest from and after the date of the actual taking of possession by the Municipality of Daet, Camarines Norte until the full amount is paid, with costs against plaintiff-appellant. We hold that the decision of the Court of Appeals fixing the market value of the property to be that obtaining, at least, as of the date of the rendition of the judgment on December 2, 1969 as prayed by private respondent, which the Court fixed at P200.00 per square meter is in conformity with doctrinal rulings herein above cited that the value should be fixed as of the time of the taking of the possession of the property because firstly, at the time judgment was rendered on December 2, 1969, petitioner had not actually taken possession of the property sought to be expropriated and secondly, We find the valuation determined by the Court of Appeals to be just, fair and reasonable. On the second assignment of error, petitioner faults the respondent court in modifying, disregarding and amending its own decision in CA-G.R. No. 32259-R which directed payment of just compensation to be determined as of the date of the filing of the complaint. Petitioner claims that this decision has tong become final and executory and it would be contrary to the doctrine of res judicata to modify, disregard and amend said decision. In order that there may be res judicata, the following requisites must be present: (a) the former judgment must be final; (b) it must have been rendered by a court having jurisdiction of the subject- matter and of the parties; (c) it must be a judgment on the merits; and (d) there must be, between the first and second actions, Identity of parties, of subject matter, and of cause of action. 16 When, between the first case where the judgment was rendered, and the second case where such judgment is invoked, the three Identities mentioned in paragraph (d) above, are present, the judgment on the merits rendered in the first case constitutes an absolute bar to the subsequent action. It is final as to the claim or demand in the controversy, including the parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose and of all matters that could have been adjudged in that case. 17 This is, however, not the situation in the case at bar. The only question drawn in issue before the Court of Appeals in CA-G.R. No. 32259-R was whether petitioner had the authority to exercise the right of eminent domain. The question regarding the amount of just compensation was expressly reserved by the Court of Appeals for the trial court to determine. Perforce, Between the first case wherein the judgment is rendered, and the second case wherein such judgment is invoked, there is Identity of parties but there is no Identity of causes of action. In such a situation, the judgment is conclusive in the second case only to those matters actually and directly controverted and determined, and not as to matters merely involved therein. To constitute res judicata, the right to relief in one suit must rest upon the same question which in essence and substance was litigated and determined in the first suit. 18 That phrase in the dispositive portion of the decision of the Court of Appeals in CA-G.R. No. 32259-R referring to the time that should be considered in reckoning the just compensation, to wit "declaring that plaintiff Municipality of Daet has the lawful right to take the Property sought to be condemned, for the public use described in the complaint, upon payment of just compensation to be determined as of the date of the filing of the complaint" cannot likewise constitute the law of the case, which is a doctrine closely akin to res judicata. The law of the case, as applied to a former decision of an appellate court, merely expresses the practice of the courts in refusing to reopen what has been decided. 19 It differs from res judicata in that the conclusiveness of the first judgment ' is not dependent upon its finality. The first judgment is generally' if not universally, not final. 20 It relates entirely to questions of law, and is confined in its operation to subsequent proceedings in the same case. 21 While it is conclusive as to all matters within its scope, it cannot be invoked, except as to questions as have been actually considered and determined in the first

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appeal. In the application of this rule, courts will take cognizance of such points only as affirmatively appears in the last to have been decided in the former appeal. 22 Moreover, this case is before the Supreme Court and being the Court of last resort, it is the final arbiter of all legal questions properly brought before it and its decision in any given case constitutes the law of this particular case. Once Our judgment becomes final, it is binding on all inferior courts, and hence beyond their power and authority to alter or modify. (Kabigting vs. Acting Director oil Prisons, 6 SCRA 281, 286). Petitioner's second assignment of error is, therefore, without merit. The first part of the third assignment of error hinges on what is the proper procedure in determining the just compensation in proceedings. Section 5, Rule 67 of the Revised Rules of Court calls for the appointment of 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. As to the extent of this function and power of the commissioner, this Court held inManila Railroad Company vs. Velasquez 23 that the commissioners' power is limited to assessing the value and determining the amount of damages. There it stops; they can go no farther. The value and damages awarded must be a just compensation and no more and no less. But in fixing these amounts, the commissioners are not to act ad libitum. They are to discharge the trust reposed in them according to well-established rules and form their judgment upon correct legal principles. To deny this is to place them where no one else in this country is placed, above the law and beyond accountability. Corollary to tills limitation, it has been held that reports submitted by commissioners of appraisals in condemnation proceedings are not binding, but merely advisory in character, as far as the court is concerned. 24 An early case enunciated the rule that a Court of First Instance has the undoubted right to reject the report of the commissioners as to the value of the land, if the report is not founded upon legal evidence. The judge has the undoubted right also to discharge the commission and appoint a new one. He also has the right to formulate an opinion of his own as to the value of the land in question, nevertheless, if he formulates such an opinion, he must base it upon competent evidence. 25 When the commissioners report is not in accordance with the law on the matter, another case ruled that it cannot serve as the basis of the judicial decision but must be annulled and set aside, and the case remanded to the court below for reopening of trial. 26 Then, in still other cases, it was held that a Court of First Instance or on appeal, the Supreme Court may substitute its own estimate of value as gathered from the record submitted to it, in cases where the only error of the commissioners is that they have applied illegal principles to the evidence submitted to them; or that they have disregarded a clear preponderance of evidence; or that they have used an improper rule of assessment in arriving at the amount of the award; provided always that the evidence be clear and convincing and the amount allowed by the commissioners is grossly inadequate or excessive. 27 That the commissioners' report is not final and conclusive, but merely recommendatory is bolstered by the requirement in Section 8, Rule 67 of the Revised Rules of Court of conducting a hearing thereon. Otherwise stated, said provision requires that upon the expiration of the period of ten (10) days within which all interested parties may file their objects to the report, or even before the expiration of such period if all interested parties have filed their objections to the report or their statement of agreement therewith, the court must conduct a hearing on the report. In view of these basic provisions of the Rules of Court on eminent domain and various jurisprudence on the function of the commissioners as limited by the Court, We hold that the respondent Court of Appeals did not err in giving credence to the appraiser employed by private respondent and in disregarding the commissioners report. Respondent court found that aside from being a civil engineer, Aurelio B. Aquino is a licensed real estate broker and appraiser of long standing, being one of the incorporators of C.M. Hoskins and Co., Inc., a corporation engaged in real estate brokerage since October, 1938 and of which firm he is presently the Chairman of the board of directors. With these qualifications, respondent court committed no error in concluding that he was competent to make the appraisal of the fair market value of the parcel of land under consideration. Although he does not maintain an office

in Daet nor does he appear to have had any transactions in said locality, he is compatent since a commercial parcel of land retains the same characteristics whether it is located in Manila or Daet, and the criterion for making an appraisal of a parcel of land is universally applied, irrespective of the locality where it is situated. And since the value of a parcel of land taken by eminent domain is always a matter of opinion, the same may be proved by opinion evidence of the real estate appraiser. 28 Hence, We find substantial basis for the court to fix the value of the land at P200-00 per square meter and the building at P36,500.00 as testified to by the broker. Petitioner assails the transfer of the case from Branch I of the Court of First Instance of Camarines Norte to Branch 11 thereof, claiming that the jurisdiction of the respective branches are delineated by a controlling department circular and thereby concluding that Branch 11 has no legal and valid authority to take over said expropriation case. We do not agree. Where a court of first instance is divided into several branches, each of the branches is not a court distinct and separate from the others. Jurisdiction is vested in the court, not in the judges, so that when a complaint or information is filed before one branch or judge, jurisdiction does not attach to said branch or judge alone, to the exclusion of the others. Trial may be had or proceedings may continue by and before another branch or judge. It is for this reason that Section 57 of the Judiciary Act, expressly grants the Minister of Justice, upon recommendation of the district Judge, the administrative right or power to apportion the cases among the different branches, both for the convenience of the parties and the coordination of the work by the different branches, and the judges presiding each branch. The apportionment does not involve a grant or limitation or jurisdiction; this continues to be vested in the court of first instance of the province as a whole, and trial may be had by any judge or branch of the court. 29 We do agree, however, that the apportionment of cases must be respected by the judges in the interest of order and coordination in the dispatch of cases. But the question of whether Branch II took cognizance of a case properly belonging to another branch is negated by the fact, pointed out by respondents, that Administrative Order No. 472 of the Secretary of Justice dividing the Province of Camarines Norte between Branch I and Branch II took effect on January 1, 1971 long after Branch II had disposed of the case at bar because said case was decided on December 2, 1969. The fourth assignment of error is clearly untenable. Presidential Decree No. 42 issued on November 9, 1972 does not limit the just compensation in expropriation proceedings to the assessed value of the value sought to be condemned. By its title alone, i.e., "Authorizing the Plaintiff in Eminent Domain Proceedings to Take Possession of the Property Involved Upon Depositing the Assessed Value for Purposes of Taxation," it can already be gleaned that said decree fixes only the provisional value of the property. As a provisional value, "it does not necessarily represent the true and correct value of the land. The value is only "provisional" or "tentative" to serve as the basis for the immediate occupancy of the property being expropriated by the condemnor. 30 This decree repealed Section 2, Rule 67 of the Revised Rules of Court which imposed upon the court having jurisdiction of the proceeding with the duty of ascertaining and fixing the provisional value of The property. As stated in the said decree itself, the repeal was necessary inasmuch as the "existing procedure for the exercise of the right of eminent domain is not expeditious enough to enable the plaintiff to take possession of the real property involved as soon as possible, when needed for public purposes." Even in Presidential Decree No. 76, "Requiring All Persons, Natural or Juridical Owning or Administering Real Property, Including the Improvements Thereon, to File Sworn Statement of the True Value of Such Property," issued on December 6, 1972, it is clearly stated that the just compensation is based on the current and fair market value and not on the assessed value. The pertinent provisions state as follows: For purposes of just compensation in cases of private property acquired by the government for public use, the basis shall be the current and fair market value as declared by the owner or administrator or such market value as determined by the assessor, whichever is lower.

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Under this Decree, the assessed valuation which shall be the basis for payment of real property tax beginning the calendar year 1974 shall be fifty per centum of the current fair market value, as determined by the assessor, in case of commercial, industrial or mineral lands; forty per centum in the case of agricultural lands and thirty per centum in the case of lands for purely residential purposes. Clearly, therefore, the assessed value of a property constitutes only a percentage of its current fair market value. It cannot, thus, be the direct basis of just compensation in expropriation proceedings. But more importantly, this assignment of error is bereft of merit because Presidential Decree No. 42 is inapplicable in the case at bar. As pointed out by private respondent, it is a cardinal rule of statutory construction that laws shall have only prospective effect. The provisional value of the property in this case having already been fixed, the deposit on February 9, 1973 of the amount of P54,370.00 representing the assessed value of the land and the deposit on October 21, 1977 of the amount of P25,830.00 representing the assessed value of the improvement, both pursuant to the said decree, are not sufficient. Nevertheless, said amounts should be deducted from the total amount due to private respondent. To elucidate and clarify the judgment of this Court in affirming the decision appealed from, We consider and hold that the demolition of the building of private respondent standing on the land by the Municipal Mayor, Engr. Jose P. Timoner on February 14, 1978 constituted the actual taking of possession of the property sought to be expropriated by the Municipality of Daet. And from said date, February 14, 1978, interest at the legal rate shall be paid by the municipality until the full amount is paid. IN VIEW OF ALL THE FOREGOING, the judgment under review is hereby AFFIRMED in toto. SO ORDERED.

8 40 Phil. 326. 9 58 Phil. 308. 10 96 Phil. 170. 11 103 Phil. 231. 12 104 Phil. 1026. 13 106 Phil. 1017. 14 L-6594, May 18, 1956. 15 1 SCRA 957. 16 Alejandrino vs. Carmona, 70 Phil. 281; Vda. de Nator vs. Court of Industrial Relations, 4 SCRA 727; Suzara vs. Caluag, 4 SCRA 1060; Philippine Farming Corporation, Ltd. vs. Llanos 14 SCRA 949; Malvar vs Palligayan 18 SCRA 121; Suarez vs. Municipality of Naujan 18 SCRA 682. 17 Sec. 49 (c), Rule 39, Revised Rules of Court; Aguila vs. J.M. Tuason & Co., 22 SCRA 690: Gonzales vs. Gonzales, 26 SCRA 72. 18 In re Aktiebolaget Kreuger & Toll, D.C. N.Y.. 20 F. Supp. 964,968.

Claudio Teehankee, took no part. Makasiar, Fernandez, De Castro and Melencio Herrera, JJ., concur. 19 See Great Western Tel. Co. vs. Burham (1895), 162 U.S., 339, 343; Robert vs. Cooper (1857), 20 How. 467, 481; Messenger vs. Anderson (I 912) 225 U. S. 436. 20 Steinman vs. Clinchfield Coal Corp., 121 V.A. 611, 620, 93 SE 684. #Footnotes 1 Record on Appeal, pp. 2-3. 2 Ibid., pp. 5-6. 23 32 Phil. 286, 314. 3 Ibid., p. 50. 24 City of Cebu vs. Ledesma, 14 SCRA 666. 4 Ibid., pp. 79-80. 25 Manila Railroad Company vs. Fabie, 17 SCRA 206. 5 Ibid., pp. 80-85. 26 Province of Tayabas vs. Perez, 56 Phil. 257. 6 Ibid., pp. 103-104. 21 30 Am. Jur. 913-914. 22 Alerding vs. Allison, 170 Ind., 252, 258, 83 NE, 1006, 17 Am. Jur. SR, 363, (aff. CA) 32 NE, 934.

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27 Manila Railroad Company vs. Velasquez, 32 Phil. 286; see also City of Manila vs. Neal, 33 Phil. 291; Manila Railroad Co. vs. Aguilar, 36 Phil. 118; Manila Railroad Co. vs. Alano, 36 Phil. 500. 28 18 Am. Jur. 999. 29 Lumpay, et al. vs. Hon. Moscoso, 105 Phil. 968, Bacalso vs. Ramolete, 21 SCRA 519. 30 Republic vs. Vda. de Castelvi, 58 SCRA 336.

Thereafter, petitioner began to construct on respondents' properties its power lines and transmission towers, which were completed in 1996. Petitioner's Interconnection Project affected portions of respondents' properties, with a combined area of 3,199 square meters. Upon its completion of the construction of the power lines and transmission towers, petitioner imposed several restrictions upon the respondents on the use of their lands, which included the prohibition against planting or building anything higher than three meters below the area traversed by its transmission lines as the high tension electric current passing through said lines pose danger to life and limbs. Additionally, respondent-Spouses Quimco, holder of a Small Scale Quarry Permit, Series of 1995, were also prohibited from continuing their quarry business near petitioner's transmission towers because of the great possibility that the quarry might weaken the foundation of the transmission towers. In other words, respondents lost substantial amount of income due to the restriction imposed on their properties by the petitioner. Petitioner then paid respondents Santa Loro Vda. De Capin and Spouses Quimco the amounts of P8,015.90[11] and P5,350.49,[12] respectively, for the portions of their lots affected by the Interconnection Project. Only later did respondents discover that in comparison to the measly sums they were paid by petitioner, the other landowners within their area who resisted the expropriation of their properties in court or who entered into compromise agreements with the petitioner were paid by petitioner the amount of P448.30 to P450.00 per square meter as just compensation for the portions of their properties similarly affected by the petitioner's Interconnection Project. Accordingly, respondents filed a Complaint[13] for Rescission of Agreement, Recovery of Possession of Parcels of Land, Removal of Tower and Transmission Lines, Damages and Other Reliefs, against the petitioner before the RTC, where it was docketed as Civil Case No. DNA-547. Petitioner, in its Answer, countered that respondents' claim for compensation for the full value of their properties traversed by its transmission lines was repugnant to Section 3-A[14] of its Charter, according to which, petitioner is obligated only to pay the easement fee equivalent to 10% of the market value of the land as just compensation, plus the cost of damaged improvements. During the Pre-trial Conference, the parties conceded that there was no dispute as to the material fact that petitioner had taken portions of respondents' lots, with a combined area of 3,199 square meters, for use in its Interconnection Project. They also agreed that the only issue for resolution by the RTC was the determination of the amount of just compensation due the respondents for the portions of their land taken by the petitioner. Thus, respondents assented that they would file a Motion for Summary Judgment. On 4 September 2000, the RTC issued an Order[15] giving the respondents 30 days within which to file their Motion for Summary Judgment. The petitioner was also given 20 days from receipt of a copy of respondents' Motion for Summary Judgment to interpose or file its Opposition thereto. In compliance with the 4 September 2000 Order of the RTC, respondents filed their Motion for Summary Judgment, with several documentary evidence and affidavits of witnesses attached, on 10 October 2000. In an Order[16] dated 17 November 2000, the RTC gave petitioner a 15-day period from receipt of the said Order to file its Opposition to or Comment on respondents' Motion for Summary Judgment. On 21 December 2000, petitioner filed a Motion for Extension of Time to File Comment on Motion for Summary Judgment. It averred that (1) it was not inclined to oppose respondents' Motion for Summary Judgment, except that the area of 3,199 square meters of respondents' lots alleged to have been traversed by petitioner's transmission lines was still being verified as to its correctness by its Right of Way Officers; and (2) upon confirmation that the area was correct, it would join respondents' Motion for Summary Judgment. [17] In an Order[18]dated 29 December 2000, the RTC granted petitioner's motion and gave it an extension of 15 days within which to file its Comment to respondents' Motion for Summary Judgment. Despite the extension given the petitioner, it still failed to file its Comment. Hence, in an Order[19] dated 23 February 2001, the RTC deemed respondents' Motion for Summary Judgment submitted for resolution.

(NPC) National Power Corp. vs. Court of Appeals, 129 SCRA 665, No. L-56378, June 22, 1984

[G.R. No. 175176, October 17, 2008] NATIONAL POWER CORPORATION, PETITIONER, VS. SANTA LORO VDA. DE CAPIN AND SPS. JULITO QUIMCO AND GLORIA CAPIN, RESPONDENTS. DECISION CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to review, reverse, and set aside the Decision[1] dated 21 April 2006 and Resolution[2] dated 27 October 2006 of the Court of Appeals in CA-G.R. CV No. 73656. In its assailed Decision, the appellate court affirmed the Resolution[3] dated 16 April 2001, as modified by the Order[4]dated 24 August 2001, of the Regional Trial Court (RTC), 7th Judicial Region, Branch 25, Danao City, in Civil Case No. DNA-547, awarding in favor of herein respondents Santa Loro Vda. De Capin and spouses Julito Quimco and Gloria Capin (Spouses Quimco) damages, in the total amount P1,434,207.67 (at the rate of P448.33 per square meter), for the 3,199-square-meter portion of their lots taken by herein petitioner National Power Corporation (NAPOCOR). In its assailed Resolution, the appellate court denied petitioner's Motion for Reconsideration. The present controversy arose from the following facts: Petitioner is a government-owned and controlled corporation duly organized under Philippine laws and vested with the power of eminent domain by its Charter under Republic Act No. 6395, [5] as amended by Presidential Decree No. 938.[6] Pursuant to its 230 KV Leyte-Cebu Interconnection Project (Interconnection Project), petitioner expropriated several parcels of land in the Municipality of Carmen and City of Danao in the Province of Cebu, which will be traversed and affected by its transmission towers and lines. Among the lots affected by the petitioner's Interconnection Project were those owned by the respondents located in Dawis Sur, Carmen, Cebu. Respondent Santa Loro Vda. De Capin's lot has an area of 16,193 square meters, covered by Tax Declaration No. 15-22196 (1994);[7] while respondent-Spouses Quimco's lot has an area of 3,298 square meters, covered by Tax Declaration No. 31376 (1996).[8] To be able to enter the said properties, petitioner obtained from each of the respondents Santa Loro Vda. De Capin and Spouses Quimco a "Permission to Enter for Construction of Transmission Line Project," dated 14 June 1994[9] and 11 December 1996,[10] respectively. The permits were signed by the respondents upon representation by the petitioner that it would pay them just compensation for the intrusion into their properties.

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On 16 April 2001, the RTC rendered a Resolution in favor of the respondents, the decretal portion of which reads: WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the [herein respondents], ordering the [herein petitioner] to pay damages in the amount of FOUR HUNDRED FORTY EIGHT & 33/100 PESOS (P448.33) PER SQUARE METER or the total amount of ONE MILLION FOUR HUNDRED THIRTY FOUR AND TWO HUNDRED SEVEN & 67/100 PESOS (P1,434,207.67) for the 3,199 square meters of [respondents'] lots taken by the [petitioner], with interest thereon at the rate of 14% per annum computed since 1996 when the [petitioner] took said portions from the [respondents].[20] Petitioner filed a Motion for Reconsideration praying that the aforesaid Resolution of the RTC be set aside and the amount of just compensation be reduced to P25.00 per square meter. Petitioner also filed a Supplemental Motion for Reconsideration seeking the reduction of the interest rate imposed by the RTC from 14% per annum to 6% per annum. Acting on petitioner's Motion for Reconsideration and Supplemental Motion for Reconsideration, the RTC issued an Order[21] dated 24 August 2001, affirming its Resolution dated 16 April 2001, with the modification that the imposable rate of interest was reduced to 6% per annum from the filing of the complaint, and 12% per annum from the time the judgment has become final and executory until fully satisfied. According to the dispositive portion of the RTC Order: WHEREFORE, the resolution of this Court dated [16 April 2001] is hereby affirmed with modification that the imposable rate of interest of the monetary judgment in favor of [respondents] should be 6% per annum from the filing of the complaint and 12% per annum from the time the judgment has become final and executory until fully satisfied, using the amount adjudged as the actual base for the computation.[22] Still refusing to accept the judgment of the RTC, petitioner appealed the 16 April 2001 Resolution and 24 August 2001 Order of the said trial court to the Court of Appeals. Petitioner's appeal was docketed as CA-G.R. CV No. 73656. On 21 April 2006, the appellate court rendered a Decision affirming the Resolution dated 16 April 2001, as modified by the Order dated 24 August 2001, both by the RTC. Petitioner moved for the reconsideration of the appellate court's Decision, but it was denied by the same court in a Resolution dated 27 October 2006. Hence, petitioner filed the present Petition before this Court, raising the following issues: Whether or not the Court of Appeals committed reversible error in upholding the propriety of the trial court's resort to summary judgment in determining the amount of just compensation for the properties of respondents affected by petitioner's transmission line project. Whether or not the Court of Appeals committed reversible error in affirming the finding of the trial court that the total area of respondents' lands affected by petitioner's transmission line project is 3,199 square meters. Whether or not the Court of Appeals committed reversible error in ruling that the decision in Civil Case No. DNA-379 provides sufficient basis for fixing the fair market value of the affected properties of respondents at P448.33 per square meter. Whether or not the Court of Appeals committed reversible error in not ruling that under petitioner's Charter, R.A. No. 6395, as amended, respondents are only entitled to simple easement fees. [23] Petitioner argues that although the Complaint filed by the respondents before the RTC was one for rescission of agreement and/or damages, it was subsequently transformed into one for "reversed eminent domain"[24] where the determination of the amount of just compensation was the issue. In fact, respondents' Motion for Summary Judgment focused only on the payment of just compensation. Resultantly, the RTC erred in resolving the respondents' Complaint on the basis of the provisions of the Rules of Court on Summary Judgment. The rules on summary judgment apply only to ordinary taking of properties. Instead of granting respondents' Motion for Summary Judgment, the RTC should have appointed commissioners who would ascertain the amount of just compensation for the subject properties, pursuant to Section 5, Rule 67 of the Revised Rules of Court. [25] Thus, the determination of just compensation by the RTC based only on the pleadings submitted, was palpably void. The Resolution dated 16 April 2001 of the RTC in Civil Case No. DNA-547, fixing the fair market value for the

portions of respondents' lots affected by the Interconnection Project at P448.33 per square meter, is based on the Decision dated 25 May 1998 also of the RTC in Civil Case No. DNA-379;[26] which, petitioner contends, is based on another Decision dated 5 May 1998 of the same RTC in Civil Case No. DNA-373.[27] In its 5 May 1998 Decision in Civil Case No. DNA-373, the RTC considered the opinion values of the Committee on Appraisal in determining the fair market value of the properties involved therein. The said Decision, however, did not contain a description of the properties involved therein and their land classification at the time of the filing of the complaint and/or their taking. Therefore, the Decision dated 25 May 1998 in Civil Case No. DNA-379 did not provide sufficient basis for pegging the fair market value of respondents' properties at P448.33 per square meter in Civil Case No. DNA-547. Petitioner maintains that the RTC did not discuss in its Resolution dated 16 April 2001 its factual and legal bases for fixing the amount of damages payable to respondents. Respondents likewise failed to demonstrate that their properties, at the time of their taking, were of the same classification as the properties belonging to other landowners which were similarly traversed by petitioner's Interconnection Project and for which petitioner paid more. Finally, petitioner insists that it only acquired an easement of right of way on respondents' properties for the construction of its transmission lines. The respondents still retained ownership of their properties despite the imposition of an easement of right of way thereon. Consequently, petitioner is liable only to pay respondents an easement fee, not exceeding 10% of the fair market value of the portions of their properties actually affected by the petitioner's Interconnection Project, in accordance with Section 3-A(b) of petitioner's Charter, as amended. The Petition is bereft of merit. Summary or accelerated judgment is a procedural technique aimed at weeding out sham claims or defenses at an early stage of the litigation, thereby avoiding the expense and loss of time involved in a trial. Even if the pleadings appear, on their face, to raise issues, summary judgment may still ensue as a matter of law if the affidavits, depositions and admissions show that such issues are not genuine. The presence or absence of a genuine issue as to any material fact determines, at bottom,the propriety of summary judgment.[28] Sections 1 and 3, Rule 35 of the Revised Rules of Civil Procedure provide: SECTION 1. Summary judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof. xxxx SEC. 3. Motion and proceedings thereon. - The motion shall be served at least ten (10) days before the time specified for the hearing. The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days before the hearing. After the hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting affidavits, depositions, and admissions on file, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Under the afore-quoted procedural rules, for a summary judgment to be proper, the movant must establish two requisites: (a) there must be no genuine issue as to any material fact, except for the amount of damages; and (b) the party presenting the motion for summary judgment must be entitled to a judgment as a matter of law. Where, on the basis of the pleadings of a moving party, including documents appended thereto, no genuine issue as to a material fact exists, the burden to produce a genuine issue shifts to the opposing party. If the opposing party fails, the moving party is entitled to a summary judgment.[29] A "genuine issue" is an issue of fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. When the facts as pleaded appear uncontested or undisputed, then there is no real or genuine issue or question as to the facts, and summary judgment is called for. The party who moves for summary judgment has the burden of demonstrating clearly the absence of any genuine issue of fact, or that the issue posed in the complaint is patently unsubstantial so as not to constitute a genuine issue for trial. Trial courts have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as to any material fact. When the facts as pleaded by the parties are disputed or contested, proceedings for summary judgment cannot take the place of trial.[30]

I.

II. III.

IV.

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In this case, during the Pre-trial Conference, petitioner already admitted that it had taken portions of respondents' lands for the construction of its power lines and transmission towers pursuant to its Interconnection Project. However, the parties could not agree on the amount of just compensation or damages that petitioner should pay respondents for the lands taken. Respondents insist that they be paid the full market value of the portions of their lots taken by the petitioner, while petitioner believed that it was only bound to pay respondents easement fees, which was equivalent to 10% of the market value of the respondents' lots as indicated in their tax declarations, pursuant to Section 3-A of petitioner's Charter. Evidently, based on the foregoing, what remained for the determination of the RTC was the proper amount of damages due the respondents for the portions of their lots taken by the petitioner. Accordingly, respondents filed a Motion for Summary Judgment before the RTC, where they specifically alleged that: "4. Portions of the above-described parcels of land with a total area of 3,199 square meters were affected by the aforesaid [petitioner's] 230 KV Leyte-Cebu Interconnection Project and were taken by [petitioner] in 1996, is shown by a Sketch Plan hereto attached as Annex C which is also made an integral part of this motion."[31] (Emphasis supplied.) Petitioner, in turn, filed its Motion for Extension of Time to File Comment, which was granted by the RTC. In its Motion, petitioner stated that it was not inclined to oppose respondents' Motion for Summary Judgment, except that its officers were still verifying whether the area of respondents' lots traversed by petitioner's transmission lines was indeed 3,199 square meters; and the moment the area is confirmed to be correct, petitioner will join respondents' Motion for Summary Judgment. However, despite the ample opportunities given to petitioner by the RTC, it never filed any Opposition to or Comment on respondents' Motion for Summary Judgment. It did not submit to the RTC the results of its supposed verification of the area of respondents' lots actually traversed by its transmission lines. Petitioner only raised the issue on the area actually taken after the RTC had rendered summary judgment directing petitioner to pay damages for the 3,199 square meters it took from respondents. As correctly and clearly ratiocinated by the Court of Appeals in its appealed Decision: [Petitioner] did not present the alleged communication of its Project Manager or the sketch plans for the RTC's perusal despite the extension of time given by the court a quo. In view thereof, it is quite clear that the [petitioner] was given sufficient time to verify the area affected by [petitioner's] tower and transmission lines and to inform the court of the result thereof. Furthermore, the sketch plans[32] were not even signed by the geodetic engineer who supposedly conducted the survey and its preparation which makes these documents of doubtful credibility. As such without any comment filed by the [petitioner] and without any evidence to the contrary, the court a quo correctly relied on the evidence submitted by the [respondents]. x x x. The [petitioner] cannot now raise any issue as to any material fact in the case at bar when through its own fault and inaction, it chose to remain silent when the motion for summary judgment was filed with the RTC. Such an actuation speaks of a dilatory tactic on the part of the [petitioner] in the payment of the just compensation due the [respondents]. [33] (Emphasis supplied.) In light of the foregoing, the issue on the area of respondents' lots actually affected by petitioner's Interconnection Project was not timely or validly raised as an issue before the RTC. Except for the amount of damages to which the respondents were entitled to as a matter of law, there was no other genuine issue as to any material fact involved in Civil Case No. DNA-547. Hence, the RTC was justified in resorting to summary judgment. Equally futile is petitioner's insistence that respondents' Complaint is actually for "reversed eminent domain," which requires the appointment of commissioners for the determination of just compensation, as provided under Section 5, Rule 67 of the Revised Rules of Court, rather than the promulgation of a summary judgment. It should be emphasized that the present case stemmed from a Complaint for Rescission of Agreement, Recovery of Possession of Parcels of Land, Removal of Tower and Transmission Lines, Damages and Other Reliefs filed by the respondents against the petitioner. It was an ordinary civil action for the rescission of respondents' agreement with petitioner, as well as recovery of the possession of the lots taken, for failure of petitioner to comply with its obligation to pay just compensation for the respondents' properties. Payment of just compensation or damages was an alternative remedy, akin to specific performance by the petitioner of its obligation under its agreement with respondents,which would prevent the rescission of the agreements altogether and the return of the possession of the properties to respondents. The parties, at the Pre-Trial Conference, implicitly agreed to pursue the remedy for payment of damages rather than rescission of the agreement. Clearly, the proceedings before the RTC were not for expropriation, but were for damages, to which Section 5, Rule 67 of the Revised Rules of Court is irrelevant.

Reference may be made to National Power Corporation v. Court of Appeals.[34] In the said case, after therein petitioner NAPOCOR withdrew its second Petition for Expropriation, what was left for the trial court's determination was the counterclaim of therein private respondent Antonino Pobre, contained in his Motion to Dismiss, for damages. The Court ruled therein: "In this case, NPC appropriated [private respondent's] Property without resort to expropriation proceedings. NPC dismissed its own complaint for the second expropriation. At no point did NPC institute expropriation proceedings for the lots outside the 5,554 square-meter portion subject of the second expropriation. The only issues that the trial court had to settle were the amount of just compensation and damages that NPC had to pay [private respondent]. This case ceased to be an action for expropriation when NPC dismissed its complaint for expropriation. Since this case has been reduced to a simple case of recovery of damages, the provisions of the Rules of Court on the ascertainment of the just compensation to be paid were no longer applicable. A trial before commissioners, for instance, was dispensable." (Emphasis supplied.) Petitioner herein cannot hide behind the mantle of protection of procedural laws when it has so arbitrarily violated respondents' right to just compensation for their properties taken for public use. Petitioner assured respondents that it will pay them just compensation for the portions of their lots needed for the Interconnection Project, on the basis of which respondents agreed in good faith to allow petitioner to already enter their properties and build thereon. Yet, instead of paying respondents just compensation for the portions of their lots taken, they were paid negligible amounts as easements fees. More lopsided is the fact that the other landowners within their area who resisted the taking of their properties were paid by petitioner way more than respondents who voluntarily dealt with petitioner. Petitioner had to bring some of the resisting landowners to court in expropriation proceedings where petitioner willingly paid just compensation for the said landowners' properties, as determined by a panel of commissioners. Petitioner entered into compromise agreements with the other resisting landowners in which it likewise paid just compensation for the latter's properties. There is no rhyme or reason why respondents were the only ones paid with easement fees, which were of much lesser values. The Decision dated 25 May 1998 of the RTC in Civil Case No. DNA-379[35] provides sufficient basis for the same RTC in Civil Case No. DNA-547 to award just compensation to respondents, equivalent to the fair market value of their affected properties at a rate of P448.33 per square meter. In its 25 May 1998 Decision in Civil Case No. DNA-379, the RTC therein ordered the petitioner to pay just compensation in the amount of P448.33 per square meter for the lot owned by the heirs of Tomas Gingco, which was similarly traversed by petitioner's transmission lines. Said Decision became final and executory on 3 December 1998.[36] Although it is a Decision in another case, the RTC in Civil Case No. DNA-547 can take cognizance thereof when respondents presented the same for its consideration. The lot of the heirs of Tomas Gingco and those of the herein respondents are all located within the same area in Dawis Sur, Carmen, Cebu and, are in fact, separated only by a lot owned jointly by Epifanio, Edilberto and Josefa, all surnamed Loro. The lots owned by the respondents are even more advantageously situated than the lot owned by the heirs of Tomas Gingco since respondents' properties are traversed by a barangay road and near the quarry areas of Llyons Richfield Industrial Corporation. The lots of the heirs of Tomas Gingco and of the respondents were all affected by the Interconnection Project and were taken by the petitioner at about the same time. The lots of respondents were effectively taken in June 1996, while the lot of the heirs of Tomas Gingco was acquired only a month later, in July 1996. Since the personalities and properties in both Civil Case No. DNA-379 and Civil Case No. DNA-547 were essentially in similar situations, then the just compensation awarded for the property in the former case was a logical and reasonable basis for fixing or determining the just compensation due in the latter. Furthermore, petitioner attached to their Motion for Summary Judgment several pieces of document in support of their allegations therein, and they furnished petitioner copies of the same. The petitioner was given ample time to study, challenge, and controvert respondents' evidences, yet it failed to do so. The RTC only rightfully proceeded, based on its evaluation of the evidence on record, to render a Decision awarding to the respondents just

Article III Section 9 cases Page 69 of 111

compensation or damages for the taking of their lots, equivalent to the fair market value thereof at the rate of P448.33 per square meter. Finally, petitioner cannot insist that it only acquired an easement of right of way on the properties of the respondents and that it was liable to pay respondents only an easement fee not exceeding 10% of the fair market value of the portions of their property actually affected by the Interconnection Project, pursuant to Section 3-A(b) of its Charter. Expropriation is not limited to the acquisition of real property with a corresponding transfer of title or possession. The right-of-way easement resulting in a restriction or limitation on property rights over the land traversed by transmission lines also falls within the ambit of the term "expropriation."[37] After petitioner's transmission lines were fully constructed on portions of respondents' lots, petitioner imposed restrictions thereon such as the prohibition against planting or building anything higher than three meters below the area traversed by said lines. In addition, respondent-Spouses Quimco, holders of a Small Scale Quarry Permit, Series of 1995,[38] were also prohibited from continuing their quarry business near petitioner's transmission towers because of the great possibility that it could weaken the foundation thereof. Hence, the respondent-spouses Quimco suffered substantial loss of income. It is clear then that petitioner's acquisition of an easement of right of way on the lands of the respondents amounted to an expropriation of the portions of the latter's properties and perpetually deprived the respondents of their proprietary rights thereon and for which they are entitled to a reasonable and just compensation. Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the taker's gain, but the owner's loss. The word "just" is used to intensify the meaning of the word "compensation" and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample. [39] As the Court thoroughly explained in National Power Corporation v. Gutierrez,[40] viz: The trial court's observation shared by the appellate court show that "x x x While it is true that plaintiff [is] only after a right-of-way easement, it neverthelessperpetually deprives defendants of their proprietary rights as manifested by the imposition by the plaintiff upon defendants that below said transmission lines no plant higher than three (3) meters is allowed. Furthermore, because of the high-tension current conveyed through said transmission lines, danger to life and limbs that may be caused beneath said wires cannot altogether bediscounted, and to cap it all, plaintiff only pays the fee to defendants once, while the latter shall continually pay the taxes due on said affected portion of their property." The foregoing facts considered, the acquisition of the right-of-way easement falls within the purview of the power of eminent domain. Such conclusion finds support in similar cases of easement of right-of-way where the Supreme Court sustained the award of just compensation for private property condemned for public use (See National Power Corporation vs. Court of Appeals, 129 SCRA 665, 1984;Garcia vs. Court of Appeals, 102 SCRA 597, 1981). The Supreme Court, in Republic of the Philippines vs. PLDT, thus held that: "Normally, 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 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." In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent domain. Considering the nature and effect of the installation of the 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC against the use of the land for an indefinite period deprives private respondents of its ordinary use.[41] (Emphasis supplied.) Having established that petitioner's acquisition of right-of-way easement over the portions of respondents' lots was definitely a taking under the power of eminent domain, petitioner then is liable to pay respondents just compensation and not merely an easement fee. The Court quotes with affirmation the ruling of the Court of Appeals on this matter: The [herein petitioner] vehemently insists that its Charter [Section 3A (b) of R.A. 6395] obliges it to pay only a maximum of 10% of 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. To uphold such a contention would not only interfere with a judicial function but would also render as useless the protection guaranteed by our Constitution in Section 9, Article III of our Constitution that no private property shall be taken for public use without payment of just compensation.

Moreover, the valuation of a property in the tax declaration cannot be an absolute substitute to just compensation. Stated differently, the market value stated in the tax declaration of the condemned property is no longer conclusive.[42] It is violative of due process to deny to the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. It is also repulsive to the basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court which is promulgated only after expert commissioners have actually viewed the property, after evidence, arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judicially evaluated.[43] 10% of the market value of the expropriated property cannot in any way be considered as the fair and full equivalent to the loss sustained by the owner of the property, such would be 90% less than what is due him. Thus, we are of the conclusion that Section 3A of [petitioner's] Charter cannot prevail over the mandate of our Constitution on the payment of just compensation. The court a quo did not commit an error when it held that the [petitioner's] charter encroached on the function of the court in determining just compensation.[44] WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 73656, dated 21 April 2006 and 27 October 2006, respectively, are hereby AFFIRMED. No pronouncement as to costs. SO ORDERED. Ynares-Santiago, (Chairperson), Carpio,* Austria-Martinez, and Azcuna,** JJ., concur.

* Justice Antonio T. Carpio was designated to sit as additional member replacing Justice Antonio Eduardo B. Nachura per Raffle dated 22 September 2008. ** Per Special Order No. 521, dated 29 September 2008, signed by Chief Justice Reynato S. Puno, designating Associate Justice Adolfo S. Azcuna to replace Associate Justice Ruben T. Reyes, who is on official leave.
[1]

Penned by Associate Justice Apolinario D. Bruselas, Jr., with Associate Justices Arsenio J. Magpale and Vicente L. Yap, concurring; rollo, pp. 34-46.
[2]

Penned by Arsenio J. Magpale, with Associate Justices Arlene Gonzales-Sison and Antonio L. Villamor; concurring; rollo, pp. 48-49.
[3]

Penned by Acting Presiding Judge Meinrado P. Paredes; rollo, pp. 50-63. Penned by Presiding Judge Sylvia G. Aguirre Paderanga; rollo, pp. 64-66. An Act Revising the Charter of the National Power Corporation. It was approved on 10 September 1971. It was signed into law on 27 May 1976. Rollo, p. 67. Id. at 68. Id. at 69. Id. at 70. As evidenced by disbursement voucher dated 27 June 1996; records, p. 74. As evidenced by disbursement voucher dated 27 December 1996; id. at 75.

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

Article III Section 9 cases Page 70 of 111

[13]

Records, pp. 2-9.

[14]

"SEC. 3-A. In acquiring private property or private property rights through expropriation proceedings where the land or portion thereof will be traversed by the transmission lines, only a right-of-way easement thereon shall be acquired when the principal purpose for which such land is actually devoted will not be impaired, and where the land itself or portion thereof will be needed for the projects or works, such land or portion thereof as necessary shall be acquired. In determining the just compensation of the property or property sought to be acquired through expropriation proceedings, the same shall (a) With respect to the acquired land or portion thereof, not to 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. (b) With respect to the acquired right-of-way easement over the land or portion thereof, not to exceed ten percent (10%) of 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.
[15]

square meter for the property of the defendant being expropriated therein. The RTC held that since the property of defendant Heirs of Tomas Gingco in Civil Case No. DNA-379 and that of the defendant in Civil Case No. DNA-373 were adjacent to each other, there was no reason why the former, which is of the same locality and of the same kind as the latter, should be appraised less.
[27]

The case, entitled National Power Corporation v. Francisco V. Camara, and Michael Poultry Farm, Inc., represented by Lydia Lim, President, was an action for expropriation filed by therein plaintiff NPC against therein defendants Francisco Camara and Michael Poultry Farm, Inc. The plaintiff wanted to acquire defendants' properties to be used for its 230 KV Leyte-Cebu Interconnection Project. Upon motion by plaintiff and defendant Francisco Camara, the RTC created a Committee on Appraisal. During the hearing, both defendants manifested that they would rely on the Commissioners' Report already submitted and they adopted the same as their evidence. The RTC used as basis the opinion values of the Committee on Appraisal in determining the just compensation due the defendants, thus, it adjudged that the just compensation of the area taken by the plaintiff from the defendants should be P448.33 per square meter.
[28]

Yuchengco v. Sandiganbayan, G.R. No. 149802, 20 January 2006, 479 SCRA 1, 132-133. Rivera v. Solidbank Corporation, G.R. No. 163269, 19 April 2006, 487 SCRA 512, 535. Tan v. De la Vega, G.R. No. 168809, 10 March 2006, 484 SCRA 538, 551. Records, p. 52. Rollo, pp. 78-80. Id. at 40-41. G.R. No. 106804, 12 August 2004, 436 SCRA 195, 210.

[29]

Rollo, p. 136. Id. at 137. Records, pp. 139-140. Rollo, p. 140. Id. at 141. Id. at 63. Id. at 64-66. Id. at 66. Id. at 223.

[30]

[16]

[31]

[17]

[32]

[18]

[33]

[19]

[34]

[20]

[35]

[21]

The said case was entitled National Power Corporation v. Heirs of Pedro D. Sepulveda, Sr., represented by Socorro S. Lawas (Administrator), Heirs of Tomas Gingco, represented by Joselito Gingco ; rollo, pp. 81-83.
[36]

[22]

As evidenced by an Entry of Final Judgment dated 22 December 1998; id. at 84. National Power Corporation v. Aguirre-Paderanga, G.R. No. 155065, 28 July 2005, 464 SCRA 481, 493-494. Records, pp. 123-125.

[37]

[23]

[38]

[24]

For the government to exercise its power of eminent domain, it must first initiate expropriation proceedings before the proper court and pay just compensation before taking the private property for public use. Apparently, petitioner considered the process reversed herein when it was respondents, the landowners, who filed a case, after their properties have already been taken for determination of the just compensation therefor.
[25]

[39]

National Power Corporation v. Manubay Agro-Industrial Development Corporation, G.R. No. 150936, 18 August 2004, 437 SCRA 60, 68.
[40]

G.R. No. 60077, 18 January 1991, 193 SCRA 1, 6-8. Supra note 35. Sumulong v. Guerrero, G.R. No. L-48685, 30 September 1987, 154 SCRA 461. Export Processing Zone Authority v. Dulay, G.R. No. L-59603, 29 April 1987, 149 SCRA 305. Rollo, pp. 42-43.

SEC. 5. Ascertainment of compensation. - Upon the rendition of the order of expropriation, 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. x x x.
[26]

[41]

[42]

The case, entitled National Power Corporation v. Heirs of Pedro D. Sepulva, Sr., represented by Socorro S. Lawas (Administrator), Heirs of Tomas Gingco, represented by Joselito Gingco, was an action for expropriation filed by therein plaintiff NPC against therein defendants Heirs of Pedro D. Sepulva, Sr., and the Heirs of Tomas Gingco. The plaintiff sought to enter and take possession of defendants' properties for its 230 KV Leyte-Cebu Interconnection Project. The negotiations for a settlement on the issue of just compensation between plaintiff and defendant Heirs of Pedro D. Sepulveda were unsuccessful upon the former's discovery that the latter's property was classified as agricultural and was being claimed by someone else. As to the value of the property of the defendant Heirs of Tomas Gingco, the Commissioners' Report submitted in Civil Case No. DNA 373 was adopted by the RTC. Said Commissioners' Report in Civil Case No. DNA-373 recommended the average price of P448.333 per

[43]

[44]

Article III Section 9 cases Page 71 of 111

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-59603 April 29, 1987

On June 19, 1981, the three commissioners submitted their consolidated report recommending the amount of P15.00 per square meter as the fair and reasonable value of just compensation for the properties. On July 29, 1981, the petitioner Med a Motion for Reconsideration of the order of February 19, 1981 and Objection to Commissioner's Report on the grounds that P.D. No. 1533 has superseded Sections 5 to 8 of Rule 67 of the Rules of Court on the ascertainment of just compensation through commissioners; and that the compensation must not exceed the maximum amount set by P.D. No. 1533. On November 14, 1981, the trial court denied the petitioner's motion for reconsideration and gave the latter ten (10) days within which to file its objection to the Commissioner's Report. On February 9, 1982, the petitioner flied this present petition for certiorari and mandamus with preliminary restraining order, enjoining the trial court from enforcing the order dated February 17, 1981 and from further proceeding with the hearing of the expropriation case. The only issue raised in this petition is whether or not Sections 5 to 8, Rule 67 of the Revised Rules of Court had been repealed or deemed amended by P.D. No. 1533 insofar as the appointment of commissioners to determine the just compensation is concerned. Stated in another way, is the exclusive and mandatory mode of determining just compensation in P.D. No. 1533 valid and constitutional? The petitioner maintains that the respondent judge acted in excess of his jurisdiction and with grave abuse of discretion in denying the petitioner's motion for reconsideration and in setting the commissioner's report for hearing because under P.D. No. 1533, which is the applicable law herein, the basis of just compensation shall be the fair and current market value declared by the owner of the property sought to be expropriated or such market value as determined by the assessor, whichever is lower. Therefore, there is no more need to appoint commissioners as prescribed by Rule 67 of the Revised Rules of Court and for said commissioners to consider other highly variable factors in order to determine just compensation. The petitioner further maintains that P.D. No. 1533 has vested on the assessors and the property owners themselves the power or duty to fix the market value of the properties and that said property owners are given the full opportunity to be heard before the Local Board of Assessment Appeals and the Central Board of Assessment Appeals. Thus, the vesting on the assessor or the property owner of the right to determine the just compensation in expropriation proceedings, with appropriate procedure for appeal to higher administrative boards, is valid and constitutional. Prior to the promulgation of P.D. Nos. 76, 464, 794 and 1533, this Court has interpreted the eminent domain provisions of the Constitution and established the meaning, under the fundametal law, of just compensation and who has the power to determine it. Thus, in the following cases, wherein the filing of the expropriation proceedings were all commenced prior to the promulgation of the aforementioned decrees, we laid down the doctrine onjust compensation: Municipality of Daet v. Court of Appeals (93 SCRA 503, 516), xxx xxx xxx

EXPORT PROCESSING ZONE AUTHORITY, petitioner, vs. HON. CEFERINO E. DULAY, in his capacity as the Presiding Judge, Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, and SAN ANTONIO DEVELOPMENT CORPORATION, respondents. Elena M. Cuevas for respondents. GUTIERREZ, JR., J.: The question raised in this petition is whether or not Presidential Decrees Numbered 76, 464, 794 and 1533 have repealed and superseded Sections 5 to 8 of Rule 67 of the Revised Rules of Court, such that in determining the just compensation of property in an expropriation case, the only basis should be its market value as declared by the owner or as determined by the assessor, whichever is lower. On January 15, 1979, the President of the Philippines, issued Proclamation No. 1811, reserving a certain parcel of land of the public domain situated in the City of Lapu-Lapu, Island of Mactan, Cebu and covering a total area of 1,193,669 square meters, more or less, for the establishment of an export processing zone by petitioner Export Processing Zone Authority (EPZA). Not all the reserved area, however, was public land. The proclamation included, among others, four (4) parcels of land with an aggregate area of 22,328 square meters owned and registered in the name of the private respondent. The petitioner, therefore, offered to purchase the parcels of land from the respondent in acccordance with the valuation set forth in Section 92, Presidential Decree (P.D.) No. 464, as amended. The parties failed to reach an agreement regarding the sale of the property. The petitioner filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, a complaint for expropriation with a prayer for the issuance of a writ of possession against the private respondent, to expropriate the aforesaid parcels of land pursuant to P.D. No. 66, as amended, which empowers the petitioner to acquire by condemnation proceedings any property for the establishment of export processing zones, in relation to Proclamation No. 1811, for the purpose of establishing the Mactan Export Processing Zone. On October 21, 1980, the respondent judge issued a writ of possession authorizing the petitioner to take immediate possession of the premises. On December 23, 1980, the private respondent flied its answer. At the pre-trial conference on February 13, 1981, the respondent judge issued an order stating that the parties have agreed that the only issue to be resolved is the just compensation for the properties and that the pre-trial is thereby terminated and the hearing on the merits is set on April 2, 1981. On February 17, 1981, the respondent judge issued the order of condemnation declaring the petitioner as having the lawful right to take the properties sought to be condemned, upon the payment of just compensation to be determined as of the filing of the complaint. The respondent judge also issued a second order, subject of this petition, appointing certain persons as commissioners to ascertain and report to the court the just compensation for the properties sought to be expropriated.

"And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413, the Court, speaking thru now Chief Justice Fernando, reiterated the 'well-settled (rule) that just compensation means the equivalent for the value of the property at the time of its taking. Anything beyond that is more and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity." Garcia v. Court ofappeals (102 SCRA 597, 608),

Article III Section 9 cases Page 72 of 111

xxx

xxx

xxx

the Real Property Tax Code, whichever value is lower, prior to the recommendation or decision of the appropriate Government office to acquire the property." We are constrained to declare the provisions of the Decrees on just compensation unconstitutional and void and accordingly dismiss the instant petition for lack of merit. The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under the Constitution is reserved to it for final determination. Thus, although in an expropriation proceeding the court technically would still have the power to determine the just compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking. However, the strict application of the decrees during the proceedings would be nothing short of a mere formality or charade as the court has only to choose between the valuation of the owner and that of the assessor, and its choice is always limited to the lower of the two. The court cannot exercise its discretion or independence in determining what is just or fair. Even a grade school pupil could substitute for the judge insofar as the determination of constitutional just compensation is concerned. In the case of National Housing Authority v. Reyes (123 SCRA 245), this Court upheld P.D. No. 464, as further amended by P.D. Nos. 794, 1224 and 1259. In this case, the petitioner National Housing Authority contended that the owner's declaration at P1,400.00 which happened to be lower than the assessor's assessment, is the just compensation for the respondent's property under section 92 of P.D. No. 464. On the other hand, the private respondent stressed that while there may be basis for the allegation that the respondent judge did not follow the decree, the matter is still subject to his final disposition, he having been vested with the original and competent authority to exercise his judicial discretion in the light of the constitutional clauses on due process and equal protection. To these opposing arguments, this Court ruled ihat under the conceded facts, there should be a recognition that the law as it stands must be applied; that the decree having spoken so clearly and unequivocably calls for obedience; and that on a matter where the applicable law speaks in no uncertain language, the Court has no choice except to yield to its command. We further stated that "the courts should recognize that the rule introduced by P.D. No. 76 and reiterated in subsequent decrees does not upset the established concepts of justice or the constitutional provision on just compensation for, precisely, the owner is allowed to make his own valuation of his property." While the Court yielded to executive prerogative exercised in the form of absolute law-making power, its members, nonetheless, remained uncomfortable with the implications of the decision and the abuse and unfairness which might follow in its wake. For one thing, the President himself did not seem assured or confident with his own enactment. It was not enough to lay down the law on determination of just compensation in P.D. 76. It had to be repeated and reiterated in P.D. 464, P.D. 794, and P.D. 1533. The provision is also found in P.D. 1224, P.D. 1259 and P.D. 1313. Inspite of its effectivity as general law and the wide publicity given to it, the questioned provision or an even stricter version had to be embodied in cases of specific expropriations by decree as in P.D. 1669 expropriating the Tambunting Estate and P.D. 1670 expropriating the Sunog Apog area in Tondo, Manila. In the present petition, we are once again confronted with the same question of whether the courts under P.D. 1533, which contains the same provision on just compensation as its predecessor decrees, still have the power and authority to determine just compensation, independent of what is stated by the decree and to this effect, to appoint commissioners for such purpose.

"Hence, in estimating the market value, all the capabilities of the property and all the uses to which it may be applied or for which it is adapted are to be considered and not merely the condition it is in the time and the use to which it is then applied by the owner. All the facts as to the condition of the property and its surroundings, its improvements and capabilities may be shown and considered in estimating its value." Republic v. Santos (141 SCRA 30, 35-36), "According to section 8 of Rule 67, the court is not bound by the commissioners' report. It may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of his right of condemnation, and to the defendant just compensation for the property expropriated. This Court may substitute its own estimate of the value as gathered from the record (Manila Railroad Company v. Velasquez, 32 Phil. 286)." However, the promulgation of the aforementioned decrees practically set aside the above and many other precedents hammered out in the course of evidence-laden, well argued, fully heard, studiously deliberated, and judiciously considered court proceedings. The decrees categorically and peremptorily limited the definition of just compensation thus: P.D. No. 76: xxx xxx xxx

"For purposes of just compensation in cases of private property acquired by the government for public use, the basis shall be the current and fair market value declared by the owner or administrator, or such market value as determined by the Assessor, whichever is lower." P.D. No. 464: "Section 92. Basis for payment of just compensation in expropriation proceedings. In determining just compensation which private property is acquired by the government for public use, the basis shall be the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor, whichever is lower." P.D. No. 794: "Section 92. Basis for payment of just compensation in expropriation proceedings. In determining just compensation when private property is acquired by the government for public use, the same shall not exceed the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor, whichever is lower." P.D. No. 1533: "Section 1. In determining just compensation for private property acquired through eminent domain proceedings, the compensation to be paid shall not exceed the value declared by the owner or administrator or anyone having legal interest in the property or determined by the assessor, pursuant to

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This time, we answer in the affirmative. In overruling the petitioner's motion for reconsideration and objection to the commissioner's report, the trial court said: "Another consideration why the Court is empowered to appoint commissioners to assess the just compensation of these properties under eminent domain proceedings, is the well-entrenched ruling that 'the owner of property expropriated is entitled to recover from expropriating authority the fair and full value of the lot, as of the time when possession thereof was actually taken by the province, plus consequential damages including attorney's fees from which the consequential benefits, if any should be deducted, with interest at the legal rate, on the aggregate sum due to the owner from and after the date of actual taking.' (Capitol Subdivision, Inc. v. Province of Negros Occidental, 7 SCRA 60). In fine, the decree only establishes a uniform basis for determining just compensation which the Court may consider as one of the factors in arriving at 'just compensation,' as envisage in the Constitution. In the words of Justice Barredo, "Respondent court's invocation of General Order No. 3 of September 21, 1972 is nothing short of an unwarranted abdication of judicial authority, which no judge duly imbued with the implications of the paramount principle of independence of the judiciary should ever think of doing." (Lina v. Purisima, 82 SCRA 344, 351; Cf. Prov. of Pangasinan v. CFI Judge of Pangasinan, Br. VIII, 80 SCRA 117) Indeed, where this Court simply follows PD 1533, thereby limiting the determination of just compensation on the value declared by the owner or administrator or as determined by the Assessor, whichever is lower, it may result in the deprivation of the landowner's right of due process to enable it to prove its claim to just compensation, as mandated by the Constitution. (Uy v. Genato, 57 SCRA 123). The tax declaration under the Real Property Tax Code is, undoubtedly, for purposes of taxation." We are convinced and so rule that the trial court correctly stated that the valuation in the decree may only serve as a guiding principle or one of the factors in determining just compensation but it may not substitute the court's own judgment as to what amount should be awarded and how to arrive at such amount. A return to the earlier wellestablished doctrine, to our mind, is more in keeping with the principle that the judiciary should live up to its mission "by vitalizing and not denigrating constitutional rights." (See Salonga v. Cruz Pao, 134 SCRA 438, 462; citing Mercado v. Court of First Instance of Rizal, 116 SCRA 93.) The doctrine we enunciated in National Housing Authority v. Reyes, supra, therefore, must necessarily be abandoned if we are to uphold this Court's role as the guardian of the fundamental rights guaranteed by the due process and equal protection clauses and as the final arbiter over transgressions committed against constitutional rights. The basic unfairness of the decrees is readily apparent. Just compensation means the value of the property at the time of the taking. It means a fair and full equivalent for the loss sustained. All the facts as to the condition of the property and its surroundings, its improvements and capabilities, should be considered. In this particular case, the tax declarations presented by the petitioner as basis for just compensation were made by the Lapu-Lapu municipal, later city assessor long before martial law, when land was not only much cheaper but when assessed values of properties were stated in figures constituting only a fraction of their true market value. The private respondent was not even the owner of the properties at the time. It purchased the lots for development purposes. To peg the value of the lots on the basis of documents which are out of date and at prices below the acquisition cost of present owners would be arbitrary and confiscatory. Various factors can come into play in the valuation of specific properties singled out for expropriation. The values given by provincial assessors are usually uniform for very wide areas covering several barrios or even an entire town with the exception of the poblacion. Individual differences are never taken into account. The value of land is based on such generalities as its possible cultivation for rice, corn, coconuts, or other crops. Very often land described as "cogonal" has been cultivated for generations. Buildings are described in terms of only two or three classes of

building materials and estimates of areas are more often inaccurate than correct. Tax values can serve as guides but cannot be absolute substitutes for just compensation. To say that the owners are estopped to question the valuations made by assessors since they had the opportunity to protest is illusory. The overwhelming mass of land owners accept unquestioningly what is found in the tax declarations prepared by local assessors or municipal clerks for them. They do not even look at, much less analyze, the statements. The Idea of expropriation simply never occurs until a demand is made or a case filed by an agency authorized to do so. It is violative of due process to deny to the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. And it is repulsive to basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judiciously evaluated. As was held in the case of Gideon v. Wainwright (93 ALR 2d,733,742): "In the light of these and many other prior decisions of this Court, it is not surprising that the Betts Court, when faced with the contention that 'one charged with crime, who is unable to obtain counsel must be furnished counsel by the State,' conceded that '[E]xpressions in the opinions of this court lend color to the argument. . .' 316 U.S., at 462, 463, 86 L ed. 1602, 62 S Ct. 1252. The fact is that in deciding as it did-that "appointment of counsel is not a fundamental right, essential to a fair trial" the Court in Betts v. Brady made an ubrupt brake with its own well-considered precedents. In returning to these old precedents, sounder we believe than the new, we but restore constitutional principles established to achieve a fair system of justice. . ." We return to older and more sound precedents. This Court has the duty to formulate guiding and controlling constitutional principles, precepts, doctrines, or rules. (See Salonga v. Cruz Pano, supra). The determination of "just compensation" in eminent domain cases is a judicial function. The executive department or the legislature may make the initial determinations but when a party claims a violation of the guarantee in the Bill of Rights that private property may not be taken for public use without just compensation, no statute, decree, or executive order can mandate that its own determination shall prevail over the court's findings. Much less can the courts be precluded from looking into the "just-ness" of the decreed compensation. We, therefore, hold that P.D. No. 1533, which eliminates the court's discretion to appoint commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional and void. To hold otherwise would be to undermine the very purpose why this Court exists in the first place. WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The temporary restraining order issued on February 16, 1982 is LIFTED and SET ASIDE. SO ORDERED. Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ.,concur. Teehankee, C.J., in the result. Yap, J., on leave. Petition dismissed. Order lifted and set aside.

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THOUSAND FOUR HUNDRED SIXTEEN & 69/100 (P1,416.69) PESOS, Philippine currency, at twelve (12%) percent interest per annum, compounded monthly, beginning December 1, 1981." 2 Republic of the Philippines SUPREME COURT Manila SECOND DIVISION The first installment in the amount of P1,416.00 was paid by petitioner on December 3, 1981. When the second monthly installment became due, petitioner sent a letter dated January 5, 1982, to the GSIS Board of Trustees requesting that he be allowed to pay the monthly amortizations with his Land Bank bonds commencing in January, 1982 until the exhaustion of the said bonds. 3 Petitioner invoked the provisions of Secton 85 of Republic Act No. 3844, as amended by Presidential Decree No. 251. The GSIS Board of Trustees, in its Resolution No. 91 adopted on January 22, 1982, denied petitioner's offer. The board "resolved to reiterate the policy that Land Bank bonds shall be accepted as payment only at a discounted rate to yield the System 18% at maturity. 4 In a letter dated February 12, 1982, petitioner asked the Board of Trustees to reconsider Resolution No. 91. 5Petitioner reiterated his reliance on Section 85 of Republic Act No. 3844, as amended, and further supported his position with the contention that the policy of the GSIS contravenes the ruling in the case of Gonzales, et al. vs. The Government Insurance System, etc., et al. 6 Likng in the case of ewise, petitioner submitted an opinion of the Ministry of Agrarian Reform, dated February 12, 1982, wherein it was stated,a inter alia, that "if the GSIS accepts the Land Bank bonds as payment thereof, it must accept the same at par or face value. To accept said bonds at a discounted rate would lessen the credibility of the bonds as instruments of indebtedness." 7 In a letter dated May 31, 1982, petitioner was advised by the Manager, Acquired Assets Department, GSIS that Resolution No. 415 was adopted on May 18, 1982 by the GSIS Board of Trustees denying the request of petitioner. Hence, on August 5, 1982, the instant original action for mandamus was filed by petitioner. The issue posed by this petition is whether or not under the provisions of Section 85 of Republic Act No. 3844, as amended by Presidential Decree No. 251 effective July 21, 1973, the GSIS may be compelled to accept Land Bank bonds at their face value in payment for a residential house and lot purchased by the bondholder from the GSIS. The aforesaid provision of law provides: The records disclose that on December 10, 1980, respondent GSIS conducted a public bidding of several foreclosed properties. Included in the properties offered to the public was a house and lot situated at 3377 New Panaderos Street, Sta. Ana, Manila, covered by Transfer Certificate of Title No. 4749 of the Register of Deeds of Manila. Petitioner Domingo B. Maddumba participated in the public bidding and submitted his sealed bid in the amount of P98,000.00 in Philippine currency. The bid was subject to the condition that there should be a down payment of 35% of the amount thereof, the 10% constituting the proposal bond with the remaining 25% to be paid after the receipt of the notice of award or acceptance of the bid. Accordingly, petitioner enclosed with his sealed bid a manager's check in the amount of P9,500.00 and cash in the amount of P300.00 to complete the P9,800.00 proposal bond. Upon the receipt of the notice of award, petitioner offered to pay the additional 25% in Land Bank bonds at their face value. These bonds were issued to petitioner as payment for his riceland consisting of twenty-six hectares located in Cordon, Isabela acquired by the Government from him under Presidential Decree No. 27. However, the GSIS rejected the offer, hence it was withdrawn by petitioner. Petitioner then offered to pay in cash the remaining 25% down payment "and all future installments." 1 Thereafter, on November 16, 1981, petitioner paid in cash the balance of the required down payment. A "Deed of Conditional Sale" was executed by the parties on November 19, 1981, where the petitioner as vendee agreed to pay the vendor GSIS "the balance of the purchase price of SIXTY THREE THOUSAND SEVEN HUNDRED FIVE & 50/100 (P63,705.50) PESOS, Philippine currency, in SIXTY (60) monthly installments of ONE Sec. 85. Use of Bonds. The bonds issued by the Bank may be used by the holder thereof and shall be accepted for any of the following: xxx xxx xxx 2. Payment for the purchase of shares of stock or assets of government-owned or controlled corporations. Upon offer by the bondholders, the corporation owned or controlled by the Government shall, through its Board of Directors, negotiate with such bondholder with respect to the price and other terms and conditions of the sale. In case there are various bondholders making the offer, the one willing to purchase under the terms and conditions most favorable to the corporation shall be preferred. If no price is acceptable to the corporation, the same shall be determined by the Committee of Appraisers composed of three members, one to be appointed by the corporation, another by the bondholder making the highest or only offer, and the third by the members so chosen. The expense of appraisal shall be borne equally by the corporation and the successful purchaser.

G.R. No. L-61293 February 15, 1990 DOMINGO B. MADDUMBA and ANITA C. MADDUMBA, petitioners, vs. GOVERNMENT SERVICE INSURANCE SYSTEM, Represented by its Chairman, Board of Trustees, HONORABLE LEONILO OCAMPO, respondent. Vicente P. Leus for petitioners. The Government Corporate Counsel for GSIS.

REGALADO, J.: This petition for mandamus seeks to compel respondent Government Service Insurance System (GSIS) to accept Land Bank bonds at their face value as installments payments for a pre-existing obligation.

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Should the Government offer for sale to the public any or all the shares of stock or the assets of any of the Government-owned or controlled corporations, the bidder who offers to pay in bonds of the Land Bank shall be preferred, provided that the various bids be equal in every respect in the medium of payment. xxx xxx xxx It is not disputed that under the above quoted provisions, a government-owned or controlled corporation, like the GSIS, is compelled to accept Land Bank bonds as payment for the purchase of its assets. As a matter of fact, the bidder who offers to pay in bonds of the Land Bank is entitled to preference. What respondent GSIS is resisting, however, is its being compelled to accept said bonds at their face value. Respondent, in support of its stance that it can discount the bonds, avers that "(a) PD 251 has amended Section 85 of RA 3844 by deleting and eliminatingthe original provision that Land Bank bonds shall be accepted 'in the amount of their face value'; and (b) to accept the said bonds at their face value will impair the actuarial solvency of the GSIS and thoroughly prejudice its capacity to pay death, retirement, insurance, dividends and other benefits and claims to its more than a million members, the majority of whom are low salaried government employees and workers." 8 We cannot agree with respondent. Respondent's arguments disregard the fact that the provisions of Section 85 are primarily designed to cushion the impact of dispossession. Not only would there be inconvenience resulting from dispossession itself, but also from the modes of payment in financing the acquisition of farm lots. Acceptance of Land Bank bonds, instead of money, undoubtedly involves a certain degree of sacrifice for the landowner. This, of course, is in addition to the fact that, in case of expropriation of land covered by land reform, the landowner will seldom get the compensation he desires. Thus, discounting the Land Banks bonds, and thereby reducing their effective value, entails and imposes an additional burden on his part. It is, in fact, in consideration of this sacrifice that we extended the rule on liberality in the interpretation of the provisions of Republic Act No. 3844, then known as the Agricultural Land Reform Code, in favor not only of the actual tillers but the landowners as well. Ita semper fiat relatio ut valeat dispositio. The interpretation must always be such that the disposition may prevail. The nature of a Land Bank bond itself fortifies our view that the respondent may be compelled to accept those bonds at their face value. As explained in an earlier case: True, the statute does not explicitly provide that Land Bank bonds shall be accepted at their face value. There can be no question, however, that such is the intendment of the law particularly in the absence of any provision expressly permitting discounting, as differentiated from Republic Act No. 304, or the Backpay Law, as amended by Republic Acts Nos. 800 and 897, which expressly allows it. Land Bank bonds are certificates of indebtedness, approved by the Monetary Board of the Central Bank, fully tax-exempt both as to principal and income, and bear interest at the rate of 6% per annum redeemable at the option of the Land Bank at or before maturity, which in no case shall exceed 25 years. They are fully negotiable and unconditionally guaranteed by the Government of the Republic of the Philippines. These bonds are deemed contracts and the obligations resulting therefrom fall within the purview of the non-impairment clause of the Constitution, and any impairment thereof may take any encroachment in any respect upon the obligation and cannot be permitted. Thus, the value of these bonds cannot be diminished by any direct or indirect act, particularly, since said bonds are fully guaranteed by the Government of the Philippines. They are issued not in the open market nor for the primary purpose of raising funds or pooling financial resources but in the

captive market of landowners and to facilitate the speedy transfer of lands to the tenant-farmers in support of the land reform program of the Government. They are not ordinary commercial paper in that sense subject to discounting (Emphasis supplied). 9 We are aware that the above cited cases primarily involved Section 80 of the law as applied to cases where government financial institutions were compelled to accept Land Bank bonds at their face value for the discharge of existing encumbrances on parcels of land given as security even if not an the lands covered by the mortgage were acquired by the Land Bank under Presidential Decree No. 27. Evidently, however, the variance in the factual setting would not change the very nature of said bonds by reason of which payment of pre-existing obligations to government financial institutions at their face or par value is justified and authorized. It would be hermeneutically unjustified to adopt a tenuous theory which would subject the parity of Land Bank bonds to qualifications and distinctions when the law itself does not so provide. The deed of conditional sale which was executed by the parties herein is subject to the obligation of and guaranteed by the Government under said bonds. Their agreement for the payment of installments in Philippine currency cannot in any way be construed as an alteration, nor should it detract from the essence and compulsion, of said obligation While, in one instance, petitioner offered to pay his future installments in cash, that offer was obviously not voluntarily made but was exacted from him because of the refusal of respondent to accept the Land Bank bonds. That incident should not prevent petitioner from making, and allow respondent to refuse, an alternative mode of payment authorized by law and under the conditions laid down by this Court. Respondent cannot rely on the deletion by Presidential Decree No. 251 of the provision in Section 85 that the bonds shall be accepted in the amount of their face value, and wrest therefrom an interpretation in support of its thesis. Implied repeals are frowned upon in this jurisdiction. They are not favored in law and will not be so declared unless the intent of the legislature is manifest. In the present case, no such intention to effect changes in the law exists nor is it even apparent. On the contrary, it can be said that when amendments were made to Section 85, the legislators were fully aware of the nature of Land Bank bonds, which would necessarily be concordant with the analysis and explanation subsequently made by the Court in the cases hereinbefore cited. If the legislature had really been minded to make changes in the policy on the acceptance value of said bonds, they could have expressly so provided with facility and ease. Thus, although such amendment by deletion was effected in 1973 and the cases which clarified this point were decided in 1986 and 1987 on factual situations subsequent to 1973, this argument now posited by respondent based on such amendment was not taken into account by the Court in laying down its aforequoted doctrinal rulings. Neither can the respondent complain that the acceptance of said bonds at their face value will impair its actuarial solvency. We are constrained to quote from Gonzales again, that "(w)hatever unfavorable results the acceptance may have on its finances, the effects must be deemed to have been intended by Presidential Decree No. 251, particularly, when it provided for the payment in bonds to government lending institutions their 'existing charters to the contrary notwithstanding.' If iniquitous to said institutions, it remains now with the legislative branch to make the necessary revisions if desired. The traditional role assigned to the Judiciary is to implement and not to thwart fundamental policy goals." It is apropos to recall, all this juncture, our reminder in the aforecited case of Philippine National Bank vs. Amores, et al., which applies with equal force to herein respondent and the present case: Suffice it to mention that the petitioner is a government lending institution and as such, it has the obligation to support unequivocably government programs already on stream and not to introduce its own interpretative policies which may thwart such programs or modify them to nothingness. This is specially compelling with regard to land reform, the great venture of the government.

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The preamble of PD 251 eloquently articulates government intent to implement the state policy of 'diverting landlord capital in agriculture to industrial development' by 'mobilization and harnessing properly all available government resources for the realization of the desired agrarian reform program.' For agrarian reform cannot be fully realized without the intervention of the governmentparticularly in the payment of just compensation. Surely, the tenant by himself does not have and cannot afford the wherewithal to defray the cost of the land tranferred to him. It is only with the full support and active assistance of the government principally through its financial institutions that payment of just compensation to the landowner may be realized. ... (Emphasis supplied). WHEREFORE, the writ of mandamus prayed for is hereby GRANTED. Respondent Government Service Insurance System is ordered to accept the bonds issued by the Land Bank of the Philippines at their par or face value. SO ORDERED. Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.

FIRST DIVISION G.R. No. 89980 December 14, 1992 B. H. BERKENKOTTER & CO., though its President GEORGE E. BERKENKOTTER, petitioner, vs. COURT OF APPEALS and THE REPUBLIC OF THE PHILIPPINES, respondents.

CRUZ, J.: The sole issue for resolution in this case is the just compensation to be paid for a parcel of land sought to be expropriated for the use of the Apolinario R. Apacible School of Fisheries, a government institution, in Nasugbu, Batangas. The property has an area of 10,640 square meters and belongs to B. H. Berkenkotter & Co., the herein petitioner. On June 18, 1982, Vicente Viray, president of the said school, sent the owner a written offer to buy the land in line with the 5-year expansion program of ARASOF. In reply, Berkenkotter expressed its willingness to sell at P50.00 per square meter payable in cash. At Viray's request, the Provincial Appraisal Committee, Office of the Provincial Assessor, Batangas City, appraised the land and fixed its market value at P32.00 per square meter. Viray then wrote Berkenkotter another letter and offered to buy the property at the said price. The latter stuck to its original valuation; later it said that the property had in fact appreciated to as much as P100.00 per square meter. Further negotiations failed to resolve the impasse between ARASOF and the petitioner. In the end, expropriation proceedings were commenced against the petitioner by the Republic of the Philippines on behalf of ARASOF. In its complaint dated October 28, 1983, the Republic invoked the assessment made by the Provincial Appraisal Committee at P32.00 per square meter and sought possession of the property upon payment of the 10% deposit required by P.D. 48. Berkenkotter originally questioned the purpose of the expropriation but later abandoned this objection and concentrated only on what it called the under-appraisal of the subject land. On March 21, 1985, the Regional Trial Court of Batangas issued an order of condemnation and, pursuant to Rule 67, Section 5, of the Rules of Court, appointed a panel of commissioners to determine the just compensation to be paid for the land. 1 Just compensation is defined as the full and fair equivalent of the property sought to be expropriated. 2 The measure is not the taker's gain but the owner's loss. 3 The compensation, to be just, must be fair not only to the owner but also to the taker. Even as undervaluation would deprive the owner of his property without due process, so too would its overvaluation unduly favor him to the prejudice of the public. To determine just compensation, the trial court should first ascertain the market value of the property, to which should be added the consequential benefits which may arise from the expropriation. 4 If the consequential benefits exceed the consequential damages, these items should be disregarded altogether as the basic value of the property should be paid in every case. 5 The market value of the property is the price that may be agreed upon by parties willing but not compelled to enter into the contract of sale 6 Not unlikely, a buyer desperate to acquire a piece of property would agree to pay more, and a seller in urgent need of funds would agree to accept less, than what it is actually worth. The price agreed upon in these cases would not represent the market value of the property.

Footnotes 1 Rollo, 138. 2 Ibid., 62. 3 Ibid., 11. 4 Ibid., 14. 5 Ibid., 15-18. 6 107 SCRA 492 (1981). 7 Rollo, 19. 8 Ibid., 111. 9 Gonzales et al. vs. Government Service Insurance System, etc., et al., ante; see also Philippine National Bank vs. Intermediate Appellate Court, et al., 143 SCRA 299 (1986); Philippine National Bank vs. Amores, et al., 155 SCRA 445 (1987).

Republic of the Philippines SUPREME COURT Manila

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Among the factors to be considered in arriving at the fair marker value of the property are the cost of acquisition, the current value of like properties, its actual or potential uses, and in the particular case of lands, their size, shape, location, and the tax declarations thereon. 7 It is settled that just compensation is to be ascertained as of the time of the taking, which usually coincides with the commencement of the expropriation proceedings. Where the institution of the action precedes entry into the property, the just compensation is to be ascertained as of the time of the filing of the complaint. 8 On September 23, 1985, the panel of commissioners submitted its report to the trial court and recommended that the property be appraised at the unit price of P85.00. The Republic objected and pointed to three contracts of sale the petitioner had concluded in 1985 whereby it sold three tracts of land similar in topography and adjacent to the property in question for the unit price of only P19.18. The trial court directed the commissioners to convene anew and receive additional evidence. It did and conducted more interviews. In its second report dated April 1, 1987, however, the panel reiterated its original recommendation for the valuation of the property at P85.00 per square meter. Acting on this recommendation, Judge Roseo L. Venturanza rendered judgment affirming the right of the plaintiff to expropriate the subject land upon payment to the owner of just compensation at the rate of P85.00 per square meter, for a total of P904,400.00. 9 This decision was elevated to and reversed by the Court of Appeals. 10 The respondent court noted that the three contracts of sale concluded in 1985 were practically disregarded by the trial court. Justice Jose A. R. Melo, now a member of this Court, observed that the lands covered by these deeds, which were adjacent to the subject property, were voluntarily sold by Berkenkotter for the price of only P19.18 per square meter. Moreover, the panel of commissioners relied only "on opinions and conclusions which were patently hearsay and gratuitous. Not a single document was submitted to support their recommended compensation of P85.00." Accordingly, the respondent court set aside the compensation fixed by the trial court and ordered that the subject property be paid for at the rate of P19.18 per square meter, or a total of P204,075.20, including the amount already deposited by the Republic when it took possession of the land. The present petition challenges the decision of the Court of Appeals on the following grounds: This is our ruling. 1. The value of the subject property is more than P19.18 (a) Resolution No. 2-83 (Exh. "4"), which was passed by the Provincial Appraisal Committee, Office of the Provincial Assessor, Batangas City on April 4, 1983, provides THAT THE PREVAILING MARKET VALUE OF COMPARATIVE PROPERTIES IN THE LOCALITY WAS THIRTY-TWO PESOS (P32.00) PER SQUARE METER. (b) Respondent REPUBLIC through Mr. VICENTE VIRAY, Superintendent of Apolinario R. Apacible School of Fisheries OFFERED TO PAY PETITIONER THIRTY TWO PESOS (P32.00) PER SQUARE METER for the subject property (Exh. "D").

(c) In the APPRAISAL REPORT OF G. AMBROSIO, INC., (Exh. "A"), the fair market value of the subject property was assessed at NINETY-FIVE PESOS (P95.00) per square meter, considering the various circumstances as testified to by its representative, Mr. Ernesto Ambrosio. (d) MR. JAIME PIMENTEL, Administrator of Roxas y Compania in Nasugbu, Batangas, which company owns land within the vicinity of ARASOF, testified that lots surrounding the property subject of these expropriation proceedings are being sold at FOUR HUNDRED (P400.00) to FIVE HUNDRED (P500.00) PESOS PER SQUARE METER. (e) MR. JUSTINO LIM, who is engaged in the selling of the lots right across the property being expropriated, testified that the very same properties which were the subject of the Deeds of Sale (properties sold by petitioner at P19.18) presented by respondent Republic were being sold for TWO HUNDRED PESOS PER SQUARE METER. 2. The Deeds of Sale are not reliable for purposes of determining just compensation as the registrants tend to undervalue the cost of property to lower the expenses they would have to pay for the documents. 3. To disregard the report of the panel of commissioner would be to violate due process. 4. No proof was presented to show that the petitioner undervalued the sale of its properties so that it should not be penalized in these expropriation proceedings.

We do not agree that the commissioners' report was without sufficient basis as it was in fact made only after extensive interviews with persons who, although not necessarily experts, were nonetheless familiar with land values in the vicinity of the property sought to be expropriated. There was also an ocular inspection of the subject land, to give the panel a better idea of its real value. It is also not correct to say that the petitioner did not submit any documentary evidence to support its claim. The record shows that there was, among others, the appraisal report made by the reputable realty firm of G. Ambrosio, Inc., which Ambrosio himself explained at the trial. 11 Even so, the report and recommendations of the panel of commissioners were not conclusive upon the trial court, which had the right and discretion to arrive at its own assessment of the land. The findings of the commissioners were at best only advisory and persuasive and by no means final or binding. As the Court held in the case ofRepublic v. Santos: 12 According to Section 8 of Rule 67, the Court is not bound by the commissioners' report. It may make such order or render such judgement as shall secure to the plaintiff the property essential to the exercise of his right of condemnation, and to the defendant just compensation for the property expropriated. This Court may substitute its own estimate of the value as gathered from the record.

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What mystifies the Court is why, if the property was really worth P85.00 per square meter in 1985, the petitioner agreed to sell its other lands, of the same topography as the land in dispute and separated therefrom by only a road, at only P19.18 per square meter. The sales it made in favor of three different purchasers, and for the said uniform rate, are embodied in the following evidence submitted by the Republic as: Exhibit "1" Deed of Sale dated July 18, 1985 between B. H. Berkenkotter and Co., Inc., as vendor, and Andrea Rodriguez Ilao, et al., as vendees. The property sold for P140,885.76 is covered by TCT 26382 with an area of 7,344 square meters. Exhibit "2" Deed of Sale dated July 18, 1985 between B. H. Berkenkotter and Co., Inc., as vendors, and Andrea Rodriguez Ilao, et al., as vendees. The property sold for P107,102.60, is covered by TCT 26383 with an area of 5,583 square meters. Exhibit "3" Deed of Sales dated July 18, 1985 between B. H. Berkenkotter and Co., Inc., and vendor, and Andrea Rodriguez Ilao, as vendee. The property, sold for P152,011.64 is covered by TCT 26384 with an area of 7,924 square meters. There is no showing that the petitioner had any special reason for granting each of the individual vendees the extraordinary discount amounting to as much as 75% of its claimed real value of the land. To all appearances, they were ordinary buyers and probably even land investors or speculators who did not deserve any particular generosity of bounty form the petitioner. Given this far from extraordinary situation, we find it difficult to understand why the petitioner, while insisting that the 10,640 square meters under expropriation had a unit price of P85.00, agreed to sell as many as 7,344 square meters of similar land to the first private buyer, 5,583 square meters to the second, and 7,924 square meters to the third, and all for only P19.18 per square meter. The price demanded by the petitioner from the Republic of the Philippines is more than 4 times the price it willingly accepted from the private vendees. It is also noteworthy that the individual buyers bought the land for their own private purposes only and not for the public purpose invoked by the Republic and admitted by the petitioner itself. And no less importantly, the petitioner has not even made any efforts to differentiate the subject property from the lands sold at the lower rate, to justify the increase in its price by more than 300%. The petitioner seek to explain its curious conduct by claiming that it had liquidity problems and needed cash when it entered into the three contracts of sale. If it really was in that predicament, it is strange that it did not even bother to withdraw, as it had a right to do so, the 10% deposit made by the Republic when it took possession of the subject property in 1985. As strangely, it also did not accept the government's standing offer, made as early as 1983, to buy the 10,640 square meters subject of the complaint at P32.00 per square meters, for a total price of P340,480.00. This would not only have relieved its financial difficulties but could also have avoided the expense and inconvenience of litigation that up to now have delayed its recovery of the cost of its property. Also, acceptance of the offer would have been a better deal than selling 20,851 square meters for only P400,000.00 from which, let it be stressed, the capital gains tax and other expenses of documentation and registration would still have to be deducted. The petitioner now submits that the consideration mentioned in deeds of sale is not a reliable index of just compensation because the parties "tend to undervalue the cost of the property to lower the expenses they would have to pay for the documents." The expenses presumably refer to the cost of the documentary stamps for the registration of the property and the capital gains tax to be paid by the vendor to the government. The suggestion is revealing. There is practically an admission here that the parties to the three transactions did not indicate the real consideration therefor so they could evade the legitimate taxes and fees that were due the government on the basis of the correct purchase price. If this was the purpose of the petitioner when it executed Exhibits 1, 2 and 3, then it is surely hoist now by its own petard. And rightly so, for it cannot be allowed to profit from its own deception and claim that the subject property

should be assessed at the higher rate it clandestinely agreed upon with the buyers. That is assuming the worst. But even on the assumption that the petitioner comported itself with all propriety and rectitude and did not falsify the consideration for the sales, the result would still be the same. Such a posture would signify that it seriously believed the fair price for its property to be only P19.18 per square meter, and not any lower or higher than that, whoever the purchaser might be. The Court is disappointed that the petitioner should demand a higher price for the Republic, which needs the lands for a public purpose, when it was willing to accept less from the three individual buyers who had only their private interests to serve. But this is not only a matter of civic spirit. We recognize that the basic issue is the hard-nosed business of tit for tat. Civic altruism aside, the simple fact is that, whatever its motive, the petitioner cannot now assert that its property is worth P85.00 per square meter as far as the Republic is concerned although, by its own voluntary act, it sold similar property to private individuals for only P19.18 per square meter. There is no satisfactory explanation for this incredible discrimination. The Republic should not pay more simply because it is the Republic, as if it were a milking cow with unlimited resource to abuse. It may be asked why the petitioner should not be paid at the rate at least of P32.00, which was the price offered by Viray and in the complaint for expropriation later filled by the Republic. The Republic had no choice then because P.D. 1533 fixed the just compensation at the valuation given by the owner of the government, whichever was lower. The price determined by the Provincial Appraisal Committee was lower. True, the decree has since been declared unconstitutional in Export Processing Zone Authority v. Dulay. 13 Even so, the fact is that the petitionerrejected that offer and has up to now been insisting on its own unit price of P85.00. We agree with the respondent court that by selling its lands in the three deed of sale indicated as Exhibits 1, 2 and 3, at the uniform rate of P19.18 per square meter, the petitioner thereby impliedly admitted that the lands subject of the expropriation proceeding, being of the same topography and virtually in the same location is the said other lands, should also be valued at the same rate. This rule of inconsistency is best expressed in the familiar saying, surely not unknown to the petitioner, that what is sauce for the goose is also sauce for the gander. WHEREFORE, the petition is DENIED, and it is hereby affirmed that the just compensation for the subject land should be computed at the rated of P19.18 per square meter. Costs against the petitioner. SO ORDERED. Padilla, Grio-Aquino and Bellosillo, JJ., concur. Footnotes 1 Rollo, p. 43; Annex "F." 2 Manila Railroad Co. v. Velasquez, 32 Phil. 286; Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 378. 3 Province of Tayabas v. Perez, 66 Phil. 467; Municipality of Daet v. Court of Appeals, 93 SCRA 503; Manotok v. National Housing Authority, 150 SCRA 89. 4 Cruz, Constitutional Law, 1991 ed., p. 74. 5 Rule 67, Section 6, Rules of Court.

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6 Manila Railroad Co. v. Caligsihan, 40 Phil. 326. 7 Cruz, Constitutional Law, supra. 8 Republic v. PNB, 1 SCRA 957; Ansaldo v. Tantuico, Jr., 188 SCRA 300. 9 Rollo, pp. 92-99. 10 Ibid., pp. 140-146. Melo, J., ponente, with Pronove and Benipayo, JJ., concurring. 11 Exhibit "A;" TSN, August 15, 1986, pp. 2-25. 12 141 SCRA 30. 13 149 SCRA 305.

This is a petition for review on certiorari on pure question of law seeking the nullification of the orders issued by the respondent Judge Gregorio G. Pineda, in his capacity as the presiding Judge of the Court of First Instance (now Regional Trial Court) of Rizal, Branch 21, Pasig, Metro Manila in Civil Case No. 20269, entitled "Manila Electric Company v. Teofilo Arayon, et al." The aforesaid orders are as follows: (1) the order dated December 4, 1981 granting the motion for payment of private respondents; (2) the order dated December 21, 1981 granting the private respondents' omnibus motion; and (3) the order dated February 9, 1982 adjudging in favor of private respondents the fair market value of their property at forty pesos (P40.00) per square meter for a total of P369,720.00 and denying the motions for contempt for being moot and academic and the motion for reconsideration of the orders dated December 4, 1981 and December 21, 1981 for lack of merit. The antecedent facts giving rise to the controversy at bar are as follows: Petitioner Manila Electric Company (MERALCO) is a domestic corporation duly organized and existing under the laws of Philippines. Respondent Honorable Judge Gregorio G. Pineda is impleaded in his official capacity as the presiding judge of the Court of First Instance (now Regional Trial Court) of Rizal, Branch XXI, Pasig, Metro Manila. While private respondents Teofilo Arayon, Sr., Gil de Guzman, Lucito Santiago and Teresa Bautista are owners in fee simple of the expropriated property situated at Malaya, Pililla, Rizal. On October 29, 1974, a complaint for eminent domain was filed by petitioner MERALCO against forty-two (42) defendants with the Court of First Instance (now Regional Trial Court) of Rizal, Branch XXII, Pasig, Metro Manila. The complaint alleges that for the purpose of constructing a 230 KV Transmission line from Barrio Malaya to Tower No. 220 at Pililla, Rizal, petitioner needs portions of the land of the private respondents consisting of an aggregate area of 237,321 square meters. Despite petitioner's offers to pay compensation and attempts to negotiate with the respondents', the parties failed to reach an agreement. Private respondents question in their motion to dismiss dated December 27, 1974 the petitioner's legal existence and the area sought to be expropriated as too excessive. On January 7, 1975, respondents Gil de Guzman and Teresa Bautista filed a motion for contempt of court alleging, among other things that petitioner's corporate existence had expired in 1969 and therefore it no longer exists under Philippine Laws. But despite the opposition of the private respondents, the court issued an Order dated January 13, 1975 authorizing the petitioner to take or enter upon the possession of the property sought to be expropriated. On July 13, 1976, private respondents filed a motion for withdrawal of deposit claiming that they are entitled to be paid at forty pesos (P40.00) per square meter or an approximate sum of P272,000.00 and prayed that they be allowed to withdraw the sum of P71,771.50 from petitioner's deposit-account with the Philippine National Bank, Pasig Branch. However, respondents motion was denied in an order dated September 3, 1976. In the intervening period, Branch XXII became vacant when the presiding Judge Nelly Valdellon-Solis retired, so respondent Judge Pineda acted on the motions filed with Branch XXII. Pursuant to a government policy, the petitioners on October 30, 1979 sold to the National Power Corporation (Napocor) the power plants and transmission lines, including the transmission lines traversing private respondents' property. On February 11, 1980, respondent court issued an Order appointing the members of the Board of Commissioners to make an appraisal of the properties.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. L-59791 February 13, 1992 MANILA ELECTRIC COMPANY, petitioner, vs. THE HONORABLE GREGORIO G. PINEDA, Presiding Judge, Court of First Instance of Rizal, Branch XXI, Pasig, Metro Manila, TEOFILO ARAYON, SR., GIL DE GUZMAN, LUCITO SANTIAGO and TERESA BAUTISTA,respondents. Quiason, Makalintal & Barot for petitioner. Gil P. De Guzman Law Offices for private respondents.

MEDIALDEA, J.:

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On June 5, 1980, petitioner filed a motion to dismiss the complaint on the ground that it has lost all its interests over the transmission lines and properties under expropriation because of their sale to the Napocor. In view of this motion, the work of the Commissioners was suspended. On June 9, 1981, private respondents filed another motion for payment. But despite the opposition of the petitioner, the respondent court issued the first of the questioned Orders dated December 4, 1981 granting the motion for payment of private respondents, to wit: As prayed for by defendants Teofilo Arayon, Lucito Santiago, Teresa Bautista and Gil de Guzman, thru counsel Gil de Guzman, in their Motion for Payment, for reasons therein stated, this Court hereby orders the plaintiff to pay the movants the amount of P20,400.00 for the expropriated area of 6,800 square meters, at P3.00 per square meter without prejudice to the just compensation that may be proved in the final adjudication of this case. The aforesaid sum of P20,400.00 having been deposited by plaintiff in the Philippine National Bank (Pasig Branch) under Savings Account No. 9204, let the Deputy Sheriff of this Branch Mr. Sofronio Villarin withdraw said amount in the names of Teofilo Arayon, Lucito Santiago, Teresa Bautista and Gil de Guzman, the said amount to be delivered to the defendant's counsel Atty. Gil de Guzman who shall sign for the receipt thereof. SO ORDERED. (Rollo, p. 108) On December 15, 1981, private respondents filed an Omnibus Motion praying that they be allowed to withdraw an additional sum of P90,125.50 from petitioner's deposit-account with the Philippine National Bank. By order dated December 21, 1981, the respondent court granted the Omnibus Motion hereunder quoted as follows: Acting on the Omnibus Motion dated December 15, 1981 filed by Atty. Gil de Guzman, counsel for Teofilo Arayon, Sr., Lucito Santiago, Teresita Bautista and for himself, and it appearing that there is deposited in the bank in trust for them the amount of P90,125.50 to guarantee just compensation of P272,000.00, thereby leaving a balance of P161,475.00 still payable to them, the same is hereby GRANTED. Mr. Nazario Nuevo and Marianita Burog, respectively the Manager and Cashier, Philippine National Bank, Pasig Branch, Pasig, Metro Manila are hereby ordered to allow Sheriff Sofronio Villarin to withdraw and collect from the bank the amount of P90,125.50 under Savings Account No. 9204 and to deliver the same to Atty. Gil de Guzman upon proper receipt, pending final determination of just compensation. SO ORDERED. (Rollo, p. 120) Private respondents filed another motion dated January 8, 1982 praying that petitioner be ordered to pay the sum of P169, 200.00. On January 12, 1982 petitioner filed a motion for reconsideration of the Orders dated December 4, 1981 and December 21, 1981 and to declare private respondents in contempt of court for forging or causing to be forged the receiving stamp of petitioner's counsel and falsifying or causing to be falsified the signature of its receiving clerk in their Omnibus Motion.

In response to private respondents' motion for payment dated January 8, 1982, petitioner filed an opposition alleging that private respondents are not entitled to payment of just compensation at this stage of the proceeding because there is still no appraisal and valuation of the property. On February 9, 1982 the respondent court denied the petitioner's motion for reconsideration and motion for contempt, the dispositive portion of which is hereunder quoted as follows: Viewed in the light of the foregoing, this Court hereby adjudges in favor of defendants Teofilo Arayon, Sr., Lucito Santiago, Teresita Bautista and Atty. Gil de Guzman the fair market value of their property taken by MERALCO at P40.00 per square meter for a total of P369,720.00, this amount to bear legal interest from February 24, 1975 until fully paid plus consequential damages in terms of attorney's fees in the sum of P10,000.00, all these sums to be paid by MERALCO to said defendants with costs of suit, minus the amount of P102,800.00 already withdrawn by defendants. For being moot and academic, the motions for contempt are DENIED; for lack of merit, the motion for reconsideration of the orders of December 4, 1981 and December 21, 1981 is also DENIED. SO ORDERED. (Rollo, p. 211-212) Furthermore, the respondent court stressed in said order that "at this stage, the Court starts to appoint commissioners to determine just compensation or dispenses with them and adopts the testimony of a credible real estate broker, or the judge himself would exercise his right to formulate an opinion of his own as to the value of the land in question. Nevertheless, if he formulates such an opinion, he must base it upon competent evidence." ( Rollo, p. 211) Hence, this petition. Subsequently, the respondent court issued an Order dated March 22, 1982 granting the private respondents' motion for execution pending appeal, thus requiring petitioner to deposit P52,600.00 representing the consideration paid by Napocor for the property it bought from petitioner which includes the subject matter of this case, computed at P200.55 per square meter and to render an accounting. On March 26, 1982, petitioner filed a petition for preliminary injunction with this Court seeking to enjoin respondent judge and all persons acting under him from enforcing the Order dated March 22, 1982. This Court issued a temporary restraining order addressed to respondent judge. A motion to lift the restraining order was filed by the respondents. Despite a series of oppositions and motions to lift the said order, this Court reiterated its stand and noted that the restraining order is still effective. The petitioner strongly maintains that the respondent court's act of determining and ordering the payment of just compensation to private respondents without formal presentation of evidence by the parties on the reasonable value of the property constitutes a flagrant violation of petitioner's constitutional right to due process. It stressed that respondent court ignored the procedure laid down by the law in determining just compensation because it formulated an opinion of its own as to the value of the land in question without allowing the Board of Commissioners to hold hearings for the reception of evidence. On the other hand, private respondents controvert the position of the petitioner and contend that the petitioner was not deprived of due process. They agreed with respondent court's ruling dispensing the need for the appointment of

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a Board of Commissioners to determine just compensation, thus concluding that the respondent court did not err in determining just compensation. Furthermore, petitioner argues that the respondent judge gravely abused his discretion in granting the motion for execution pending appeal and consequently denying the petitioner's motion to dismiss. Respondent judge should have ordered that Napocor be impleaded in substitution of petitioner or could have at least impleaded both the Napocor and the petitioner as party plaintiffs. The controversy boils down to the main issue of whether or not the respondent court can dispense with the assistance of a Board of Commissioners in an expropriation proceeding and determine for itself the just compensation. The applicable laws in the case at bar are Sections 5 and 8 of Rule 67 of the Revised Rules of Court. The said sections particularly deal with the ascertainment of compensation and the court's action upon commissioners' report, to wit: Sec. 5. Upon the entry of the order of condemnation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken. The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report is to be filed with the court. xxx xxx xxx Sec. 8. Upon the expiration of the period of ten (10) days referred to in the preceding section, or even before the expiration of such period but after all the interested parties have filed their objections to the report or their statement of agreement therewith, the court may, after hearing, accept the report and render judgment in accordance therewith; or, for cause shown, it may recommit the same to the commissioners for further report of facts; or it may set aside the report and appoint new commissioners, or it may accept the report in part and reject it in part; and it may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of his right of condemnation, and to the defendant just compensation for the property so taken. We already emphasized in the case of Municipality of Bian v. Hon. Jose Mar Garcia (G.R. No. 69260, December 22, 1989, 180 SCRA 576, 583-584) the procedure for eminent domain, to wit: There are two (2) stages in every action of expropriation. The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint". An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter, as the Rules expressly state, in the proceedings before the Trial Court, "no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard." The second phase of the eminent domain action is concerned with the determination by the Court of "the just compensation for the property sought to be taken." This is done by the Court

with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. Obviously, one or another of the parties may believe the order to be erroneous in its appreciation of the evidence or findings of fact or otherwise. Obviously, too, such a dissatisfied party may seek reversal of the order by taking an appeal therefrom. Respondent judge, in the case at bar, arrived at the valuation of P40.00 per square meter on a property declared for real estate tax purposes at P2.50 per hectare on the basis of a "Joint Venture Agreement on Subdivision and Housing Projects" executed by A.B.A Homes and private respondents on June 1, 1972. This agreement was merely attached to the motion to withdraw from petitioner's deposit. Respondent judge arrived at the amount of just compensation on its own, without the proper reception of evidence before the Board of Commissioners. Private respondents as landowners have not proved by competent evidence the value of their respective properties at a proper hearing. Likewise, petitioner has not been given the opportunity to rebut any evidence that would have been presented by private respondents. In an expropriation case such as this one where the principal issue is the determination of just compensation, a trial before the Commissioners is indispensable to allow the parties to present evidence on the issue of just compensation. Contrary to the submission of private respondents, the appointment of at least three (3) competent persons as commissioners to ascertain just compensation for the property sought to be taken is a mandatory requirement in expropriation cases. While it is true that the findings of commissioners may be disregarded and the court may substitute its own estimate of the value, the latter may only do so for valid reasons, i.e., where the Commissioners have applied illegal principles to the evidence submitted to them or where they have disregarded a clear preponderance of evidence, or where the amount allowed is either grossly inadequate or excessive (Manila Railroad Company v. Velasquez, 32 Phil. 286). Thus, trial with the aid of the commissioners is a substantial right that may not be done away with capriciously or for no reason at all. Moreover, in such instances, where the report of the commissioners may be disregarded, the trial court may make its own estimate of value from competent evidence that may be gathered from the record. The aforesaid joint venture agreement relied upon by the respondent judge, in the absence of any other proof of valuation of said properties, is incompetent to determine just compensation. Prior to the determination of just compensation, the property owners may rightfully demand to withdraw from the deposit made by the condemnor in eminent domain proceedings. Upon an award of a smaller amount by the court, the property owners are subject to a judgment for the excess or upon the award of a larger sum, they are entitled to a judgment for the amount awarded by the court. Thus, when the respondent court granted in the Orders dated December 4, 1981 and December 21, 1981 the motions of private respondents for withdrawal of certain sums from the deposit of petitioner, without prejudice to the just compensation that may be proved in the final adjudication of the case, it committed no error. Records, specifically Meralco's deed of sale dated October 30, 1979, in favor of Napocor show that the latter agreed to purchase the parcels of land already acquired by Meralco, the rights, interests and easements over those parcels of land which are the subject of the expropriation proceedings under Civil Case No. 20269, (Court of First Instance of Rizal, Branch XXII), as well as those parcels of land occupied by Meralco by virtue of grant of easements of right-ofway (see Rollo, pp. 341-342). Thus, Meralco had already ceded and in fact lost all its rights and interests over the aforesaid parcels of land in favor of Napocor. In addition, the same contract reveals that the Napocor was previously advised and actually has knowledge of the pending litigation and proceedings against Meralco (see Rollo, pp. 342343). Hence, We find the contention of the petitioner tenable. It is therefore proper for the lower court to either implead the Napocor in substitution of the petitioner or at the very least implead the former as party plaintiff. All premises considered, this Court is convinced that the respondent judge's act of determining and ordering the payment of just compensation without the assistance of a Board of Commissioners is a flagrant violation of petitioner's constitutional right to due process and is a gross violation of the mandated rule established by the Revised Rules of Court.

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

In 1978, National Power Corporation (NAPOCOR), took possession of a 21,995 square meter land which is a portion of Lot 1 of the subdivision plan (LRC) Psd-116159 situated in Marawi City, owned by Mangondato, and covered by Transfer Certificate Title No. T-378-A, under the mistaken belief that it forms part of the public land reserved for use by NAPOCOR for hydroelectric power purposes under Proclamation No. 1354 of the President of the Philippines dated December 3, 1974. NAPOCOR alleged that the subject land was until then possessed and administered by Marawi City so that in exchange for the city's waiver and quitclaim of any right over the property, NAPOCOR had paid the city a "financial assistance" of P40.00 per square meter. In 1979, when NAPOCOR Started building its Agus I (HE Hydroelectric Plant) Project, Mangondato demanded compensation from NAPOCOR. NAPOCOR refused to compensate insisting that the property is public land and that it had already paid "financial assistance" to Marawi City in exchange for the rights over the property. Mangondato claimed that the subject land is his duly registered private property covered by Transfer Certificate of Title No. T-378-A in his name, and that he is not privy to any agreement between NAPOCOR and Marawi City and that any payment made to said city cannot be considered as payment to him. More than a decade later NAPOCOR acceded to the fact that the property belongs to Mangondato. At the outset, in March, 1990, NAPOCOR's regional legal counsel, pursuant to Executive Order No. 329 dated July 11, 1988 requested Marawi City's City Appraisal Committee to appraise the market value of the property in Saduc, Marawi City affected by the infrastructure projects of NAPOCOR without specifying any particular land-owner . The City Appraisal Committee in its Minutes dated March 8, 1990, fixed the fair market value as follows: 7 Land Fair Market Value Per Sq. M.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

G.R. No. 113194 March 11, 1996 NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS and MACAPANTON MANGONDATO, respondents.

PANGANIBAN, J.:p At what point in time should the value of the land subject of expropriation be computed: at the date of the "taking'" or the date of the filing of the complaint for eminent domain? This is the main question posed by the parties in this petition for review on certiorari assailing the Decision 1 of the Court of Appeals 2 which affirmed in toto the decision of the Regional Trial Court of Marawi City 3. The dispositive portion of the decision of the trial court reads: 4 WHEREFORE, the prayer in the recovery case for Napocor's surrender of the property is denied but Napocor is ordered to pay monthly rentals in the amount of P15,000.00 from 1978 up to July 1992 with 12% interest per annum from which sun the amount of P2,199,500.00 should be deducted; and the property is condemned in favor of Napocor effective July 1992 upon payment of the fair market value of the property at One Thousand (P1,000.00) Pesos per square meter or a total of Twenty-One Million Nine Hundred Ninety-five Thousand (P21,995.000.00) Pesos. SO ORDERED. Cost against NAPOCOR. The Facts The facts are undisputed by both the petitioner and the private respondent, 5 and are quoted from the Decision of the respondent Court 6, as follows:

Price Per Sq. M. Price per Sq. M. Along the City Not in the City National Highway National Highway P150 Residential Lot P100 P250 Commercial Lot P180 P300 Industrial Lot P200 On July 13, 1990, NAPOCOR's National Power Board (hereafter NAPOCOR's board) passed Resolution No. 90-225 resolving to pay Mangondato P100.00 per square meter for only a 12,132 square meter portion of the subject property plus 12% interest per annum from 1978. However, in the August 7, 1990 board meeting, confirmation of said resolution was deferred to allow

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NAPOCOR's regional legal counsel to determine whether P100.00 per square meter is the fair market value. (Records, Civil Case No. 606-92 p. 45). On August 14, 1990, NAPOCOR's board passed Resolution No. 90-316 resolving that Mangondato be paid the base price of P40.00 per square meter for the 12,132 square meter portion (P485,280,001 plus 12% interest per annum from 1978 (P698,808.00) pending the determination whether P100.00 per square meter is the fair market value of the property (id.). Pursuant to the aforementioned resolution Mangondato was paid P1,184,088.00 (id., p. 58). NAPOCOR's regional legal counsel's findings embodied in 2 memoranda to NAPOCOR's general counsel (dated January 29, 1991 and February 19, 1991) state that Mangondato's property is classified as industrial, that the market value of industrial lots In Marawi City when NAPOCOR took possession is P300,00 for those along the national highway and that on the basis of recent Supreme Court decisions, NAPOCOR has to pay not less than P300.00 square meter. NAPOCOR's general counsel incorporated the foregoing findings in his report to the board plus the data that the area possessed by NAPOCOR is 21,995 square meters, and that the legal rate of interest per annum from the time of the taking of the property alleged to be in 1978, is 12%, but recommended to the board that the fair market value of the property is P100.00 per square meter; NAPOCOR's board on May 17, 1991 passed Resolution No. 91,247 resolving to pay Mangondato P100.00 per square meter for the property excluding 12% interest per annum (id., pp. 50-52). In a letter dated December 17, 1991, Mangondato disagreed with the NAPOCOR board's Resolution No. 91-247 pegging the compensation for his land at P100.000 per square meter without interest from 1978. Mangondato submitted that the fair market value of his land is even more than the P300.00 (per) square meter stated in the City Appraisal Report but that for expediency, he is willing to settle for P300.00 per square meter plus 12% interest per annum from 1978 (id., pp. 53-59). In another letter dated February 4, 1992, Mangondato reiterated his disagreement to the P100.00 per square meter compensation without interest. At the same time, to get partial payment, he asked that he be paid in the meantime, P100.00 per square meter without prejudice to pursuing his claim for the proper and just compensation plus interest thereon (id., p. 60). On February 12, 1992, NAPOCOR's general counsel filed a memorandum for its president finding no legal impediment if they, in the meantime were to pay Mangondato P100.00 per square meter without prejudice to the final determination of the proper and just compensation by the board inasmuch as the regional counsel submitted to him (general counsel) 2 memoranda stating that the appraisal of industrial lots in Marawi City when NAPOCOR took possession is P300.00 per square meter for those along the national highway and P200.00 per square meter for those not along the highway, and that NAPOCOR has to pay not less than P300.00 per square meter plus 12% interest on the basis of recent Supreme Court decisions. Further, the general counsel submitted that since the board has already set the purchase price at P100.00 per square meter (Resolution No. 91-247), NAPOCOR would not be prejudiced thereby (id., pp. 60-62). In March, 1992, the parties executed a Deed of Sale Of A Registered Property where NAPOCOR acceded to Mangondato's request of provisional payment of P100.00 per square meter excluding interest and without prejudice to Mangondato's pursuance of claims for just compensation and interest. Mangondato was paid P1,015,412.00 in addition to the P,184,088.00

earlier paid to him by NAPOCOR which payments total P2,199,500.00 for the 12,995 square meter land (Records, Civil Case No. 610-92, pp. 85-87). In his letter to NAPOCOR's president dated April 20, 1992, Mangondato asked for the payment of P300.00 per square meter plus 12% interest per annum from 1978. NAPOCOR's president, in his memorandum to the board dated April 24, 1993 recommended the approval of Mangodato's request (Records, Civil Case No. 605-92, pp. 63-69). On May 25, 1992, NAPOCOR's board passed Resolution No. 92-121 granting its president the authority to negotiate for the payment of P100.00 per square meter for the land plus 12% interest per annum from 1978 less the payments already made to Mangondato and to Marawi City on the portion of his land, and with the provisos that said authorized payment shall be effected only after Agus I HE Project has been placed in operation and that said payment shall be covered by a deed of absolute sale with a quitclaim executed by Mangondato (id., pp. 70-71). On July 7, 1992, Mangondato filed before the lower court Civil Case No. 605-92 against NAPOCOR seeking to recover the possession of the property described in the complaint as Lots 1 and 3 of the subdivision plan (LRC) Psd-116159 against NAPOCOR, the payment of a monthly rent of P15,000.00 from 1978 until the surrender of the property, attorney's fees and costs, and the issuance of a temporary restraining order and a writ of preliminary mandatory injunction to restrain NAPOCOR from proceeding with any construction and/or improvements on Mangondato's land or from committing any act of dispossession (id., pp. 1-8). The temporary restraining order was issued by the lower court. Anent the prayer for the writ of preliminary mandatory injunction, NAPOCOR filed its Opposition thereto on July 23, 1992 (id., pp. 17-20). Before the lower court could resolve the pending incident on the writ of preliminary mandatory injunction, and instead of filing a motion to dismiss, NAPOCOR, on July 27, 1992, filed also before the lower court, Civil Case No. 610-92 which is a Complaint for eminent domain against Mangondato over the subject property (Records, Civil Case No. 610-92, pp. 1-3) . On the same date Mangondato filed his Manifestation in Lieu of Answer contending that the negotiations for payment made by NAPOCOR were "virtual dictations" on a ''take it or leave it" basis; that he was given the "run-around" by NAPOCOR for 15 years; so that there was no agreement reached as to payment because of NAPOCOR's insistence of its own determination of the price; that he treats the P2,199,500.00 so far received by him as partial payment for the rent for the use of his property. Mangondato prayed that he be compensated in damages for the unauthorized taking and continued possession of his land from 1978 until the filing of the Complaiant (sic) in the expropriation case; that should the lower court order the expropriation of the subject property, that the just compensation for the land be reckoned from the time of the filing of the expropriation case; that the expropriation case can be consolidated with the recovery of possession case; that the restraining order issued in the recovery of possession case be maintained and a writ of preliminary injunction be at once issued against NAPOCOR; and that the NAPOCOR be ordered to deposit the value of the land as provisionally determined by the lower court (id., pp. 4-5). Upon agreement of the parties, the 2 cases were ordered consolidated and the lower court appointed the following commissioners; Atty. Saipal Alawi, representing the lower court; Atty. Connie Doromal, representing NAPOCOR; and Mr. Alimbsar A. Ali, from the City Assessor's Office to ascertain and report to the court the just compensation (id., pp. 6-7).

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The lower court ordered NAPOCOR to deposit with the Philippine National Bank the amount of P10, 997,500.00, provisionally fixing the value of the land at P500.00 per square meter P100.00 lower than the assessed value of the land appearing in Tax Declaration No. 0873 for 1992 which was used as basis by the lower court (id., p. 8). In its Motion for Reconsideration of the Order For Provisional Deposit[,] NAPOCOR opposed the provisional value quoted by the lower court saying that the basis of the provisional value of the land should be the assessed value of the property as of the time of the taking which in this case is 1978 when the assessed value of the land under Tax Declaration No. 7394 was P100 per square meter (id., pp. 28-32). In reply, Mangondato filed his Opposition to Motion For Reconsideration Of the Order For Provisional Deposit (id., pp. 44-46). However, the lower court did not rule on the provisional value to be deposited and chose to go right into the determination of just compensation on that the "provisional valuation could not be decided without going into the second phase of expropriation case which is the determination by the court of the just compensation for the property soguht (sic) to be taken (NPC vs. Jocson, supra)" (Decision, p. 5.) On August 5, 1992, Mangondato filed a Motion To Dismiss in the expropriation case alleging that NAPOCOR filed its Complaint for eminent domain not for the legitimate aim of pursuing NAPOCOR's business and purpose but to legitimize a patently illegal possession and at the same time continue dictating its own valuation of the property. Said motion was however, later withdrawn by Mangondato (id., pp. 37-39 and 47). In the meanwhile, the commissioners filed their respective reports. On July 28, 1992, Commissioner Doromal filed his report recommending a fair market value of P300.00 per square meter as of November 23, 1978, (id., pp. 11-27). On August 6, 1992, Commissioners Alawi and Ali filed their joint report recommending a fair market value of P1,000.00 per square meter as of 1992 (id., pp. 40-42). After the parties filed their respective comments to commissioners' reports. On August 21, 1992, the lower court rendered its decision denying Mangondato recovery of possession of the property but ordering NAPOCOR to pay a monthly rent of P15,000.00 from 1978 up to July 1992 with 12% interestper annum and condemning the property in favor of NAPOCOR effective July, 1992 upon payment of P1,000.00 per square meter or a total of P21,995,000.00 as just compensation. Mangondato filed a Motion For Partial Execution Pending Appeal which was granted by the lower court in an Order dated September 15, 1992 (id., pp. 151-152 and 157-160). However, on appeal by NAPOCOR via a Petition For Certiorari in CA-G.R. SP No. 28971 to this Court, said Order was annulled and set aside (Rollo, pp. 30-37). NAPOCOR filed a Motion For Reconsideration of the decision alleging that the fair market value of the property at the time it was taken allegedly in 1978 is P40.00 per square meter. After Mangondato filed his Opposition To Motion For Reconsideration the lower court denied NAPOCOR's motion for reconsideration in an Order date September 15, 1992 (Records, Civil Case No. 610-92, pp. 145-149). In the meanwhile, on August 7, 1992, Mangondato filed and Ex-Parte Manifestation To Correct Clerical Error of Description of Property submitting that Lot 3 which does not form part of the subject property was included in the Complaint because clerical error inadvertently committed by the typist who continuously copied the description of the property covered by Transfer Certificate of Title No. T-378-A, and thus praying that the portion of the Complaint describing Lot 3 be deleted (Records, Civil Case No. 605-92, p. 22).

On August 12, 1992, the intervenors filed their Motion For Intervention and Intervention claiming interest against each of the parties on the ground that Lot 3 which is included in the Complaint has since been conveyed by Mangondato to their predecessors-in-interest and that they are entitled to just compensation from NAPOCOR is entitled to expropriate the entire area described in the Complaint (id., pp. 23-34). In an Order dated August 19, 1992 the lower court granted intervenor's Motion For Intervention (id., p. 72). On August 25, 1992, the lower court ordered the delegation of the portion in the Complaint describing Lot 3 and declared that intervenors' Motion For Intervention has become moot (id., p. 82). On October 13, 1992 the intervenors filed their Motion To Reconsider the Order Of August 25, 1992 and the Decision Dated August 21, 1992 which was however denied by the lower court in an Order dated November 26, 1992 (id., pp. 162-184). The Issues Two errors were raised before this Court by the petitioner, thus: 8 ASSIGNMENT OF ERRORS THE RESPONDENT COURT ERRED IN AFFIRMING THAT THE JUST COMPENSATION FOR THE PROPERTY IS ITS VALUE IN 1992, WHEN THE COMPLAINT WAS FILED, AND NOT ITS VALUE IN 1978, WHEN THE PROPERTY WAS TAKEN BY PETITION. THE COURT ERRED IN FIXING THE VALUE OF JUST COMPENSATION AT P1,000.00 PER SQUARE METER INSTEAD OF P40.00 PER SQUARE METER. The petitioner summarized the two issues it raised by asking "whether or not the respondent court was justified in deviating from the wall-settled doctrine that just compensation is the equivalent of the value of the property taken for public use reckoned from the time of taking;" 9 in his Comment, private respondent worded the issues as follows 10: . . . As stated by the respondent court, Napocor, in its appeal . . .avers that the taking of the property (sic) should not be reckoned as of the year 1992 when NAPOCOR filed its Complaint for eminent domain but as of the year 1978 when it took possession of the property, and that the just compensation, determined as it should be, on the basis of the value of the property as of 1978, as P40.00 per square meter. The petitioner, after failing to persuade both lower courts, reiterated before us its proposition (with cited cases) "that when the taking of property precedes the filing of the judicial proceeding, the value of the property at the time it was taken shall be the basis for the payment of just compensation". 11 The First Issue: Date of Taking or Date of Suit?

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The general rule in determining "just compensation" in eminent domain is the value of the property as of the date of the filing of complaint, as follows 12: Sec. 4. 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. . . . (Emphasis supplied). Normally, the time of the taking coincides with the filing of the complaint for expropriation. Hence, many rulings of this Court have equated just compensation with the value of the property as of the time of filing of the complaint consistent with the above provision of the Rules. So too, where the institution of the action precedes entry into the property, the just compensation is to be ascertained as of the time of the filing of the complaint. 13 The general rule, however, 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. In the old case of Provincial Government of Rizal vs. Caro de Araullo 14, the Court ruled that ". . . the owners of the land have no right to recover damages for this unearned increment resulting from the construction of the public improvement (lengthening of Taft Avenue from Manila to Pasay) for which the land was taken. To permit them to do so would be to allow them to recover more than the value of the land at the time when it was taken, which is the true measure of the damages, or just compensation, and would discourage the construction of important public improvements." In subsequent cases 15 the Court, following the above doctrine, invariably held that the time of taking is the critical date in determining lawful or just compensation. Justifying this stance, Mr. Justice (later Chief Justice) Enrique Fernando, speaking for the Court in Municipality of La Carlota vs. The Spouses Felicidad Baltazar and Vicente Gan 16, said, ". . . 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 guarantee's 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." Simply stated, the exception finds application where the owner would be given undue incremental advantages arising from the use to which the government devotes the property expropriated as for instance, the extension of a main thoroughfare as was the case in Caro de Araullo. In the instant case, however, it is difficult to conceive of how there could have been an extra-ordinary increase in the value of the owner's land arising from the expropriation, as indeed the records do not show any evidence that the valuation of P1,000.00 reached in 1992 was due to increments directly caused by petitioner's use of the land. Since the petitioner is claiming an exception to Rule 67, Section 4, 17 it has the burden of proving its claim that its occupancy and use not ordinary inflation and increase in land values was the direct cause of the increase in valuation from 1978 to 1992. Side Issue: When is There, "Taking" of Property? But there is yet another cogent reason why this petition should be denied and why the respondent Court should be sustained. An examination of the undisputed factual environment would show that the "taking" was not really made in 1973.

This Court has defined the elements of ''taking" as the main ingredient in the exercise of power of eminent domain,18 in the following words: A number of circumstances must be present in the "taking" of property for purposes of eminent domain: (1) the expropriator must enter a private property; (2) the entrance into private property must be for more than a momentary period; (3) the entry into the property should be under warrant or color of legal authority; (4) the property must be devoted to a public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for public use must be in such a way to oust the owner and deprive him of all beneficial enjoyment of the property. (Emphasis supplied) In this case, the petitioner's entrance in 1978 was without intent to expropriate or was not made under warrant or color of legal authority, for it believed the property was public land covered by proclamation No. 1354. When the private respondent raised his claim of ownership sometime in 1979, the petitioner flatly refused the claim for compensation, nakedly insisted that the property was public land and wrongly justified its possession by alleging it had already paid "financial assistance" to Marawi City in exchange for the rights over the property. Only in 1990, after more than a decade of beneficial use, did the petitioner recognize private respondent's ownership and negotiate for the voluntary purchase of the property. A Deed of Sale with provisional payment and subject to negotiations for the correct price was then executed. Clearly, this is not the intent nor the expropriation contemplated by law. This is a simple attempt at a voluntary purchase and sale. Obviously, the petitioner neglected and/or refused to exercise the power of eminent domain. Only in 1992, after the private respondent sued to recover possession and petitioner filed its Complaint to expropriate, did petitioner manifest its intention to exercise the power of eminent domain. Thus, the respondent Court correctly held: 19 If We decree that the fair market value of the land be determined as of 1978, then We would be sanctioning a deceptive scheme whereby NAPOCOR, for any reason other than for eminent domain would occupy another's property and when later pressed for payment, first negotiate for a low price and then conveniently expropriate the property when the landowner refuses to accept its offer claiming that the taking of the property for the purpose of eminent domain should be reckoned as of the date when it started to occupy the property and that the value of the property should be computed as of the date of the taking despite the increase in the meantime in the value of the property. In Noble vs. City of Manila, 20 the City entered into a lease-purchase agreement of a building constructed by the petitioner's predecessor-in-interest in accordance with the specifications of the former. The Court held that being bound by the said contract, the City could not expropriate the building. Expropriation could be reported to "only when it is made necessary by the opposition of the owner to the sale or by the lack of any agreement as to the price". Said the Court: The contract, therefore, in so far as it refers to the purchase of the building, as we have interpreted it, is in force, not having been revoked by the parties or by judicial decision. This being the case, the city being bound to buy the building at an agreed price, under a valid and subsisting contract, and the plaintiff being agreeable to its sale, the expropriation thereof, as sought by the defendant, is baseless. Expropriation lies only when it is made necessary by the opposition of the owner to the sale or by the lack of any agreement as to the price. There being in the present case a valid and subsisting contract, between the owner of the building and the city, for the purchase thereof at an agreed price, there is no reason for the expropriation. (Emphasis supplied).

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In the instant case, petitioner effectively repudiated the deed of sale it entered into with the private respondent when it passed Resolution No. 92-121 on May 25, 1992 authorizing its president to negotiate, inter alia, that payment" shall be effected only after Agus I HE project has been placed in operation". It was only then that petitioner's intent to expropriate became manifest as private respondent disagreed and, barely a month after, filed suit. The Second Issue: Valuation We now come to the issue of valuation.

1 Rollo, pp. 24-40. 2 CA-G.R. CV No. 39353, decided by the Fifth Division composed of J. Cezar D. Francisco, ponente, andJJ. Manuel C. Herrera (chairman) and Buenaventura J. Guerrero. 3 12th Judicial Region, Branch VIII, Marawi City in two (2) consolidated cases: Civil Case No. 605-92 and Civil Case No. 610-92. 4 Rollo, p. 24-A.

The fair market value as held by the respondent Court, is the amount of P1,000.00 per square meter. In an expropriation case where the principal issue is the determination of just compensation, as is the case here, a trial before Commissioners is indispensable to allow the parties to present the evidence on the issue of just compensation. 21 Inasmuch as determination of just compensation in eminent domain cases is a judicial function22 and factual findings of the Court of Appeals are conclusive on the parties and reviewable only when the case falls within the recognized exceptions 23, which is not the situation obtaining in this petition, we see no reason to disturb the factual findings as to valuation of the subject property. As can be gleaned from the record, the court-andthe-parties-appointed commissioners did not abuse their authority in evaluating the evidence submitted to them nor misappreciate the clear preponderance of evidence. The amount fixed and agreed to by the respondent appellate Court is not grossly exorbitant. 24 To quote: 25 Commissioner Ali comes from the Office of the Register of Deeds who may well be considered an expert, with a general knowledge of the appraisal of real estate and the prevailing prices of land in the vicinity of the land in question so that his opinion on the valuation of the property cannot be lightly brushed aside. The prevailing market value of the land is only one of the determinants used by the commissioners' report the others being as herein shown: xxx xxx xxx Commissioner Doromal's report, recommending P300.00 per square meter, differs from the 2 commissioners only because his report was based on the valuation as of 1978 by the City Appraisal Committee as clarified by the latter's chairman in response to NAPOCOR's general counsel's query (id., pp. 128-129). In sum, we agree with the Court of Appeals that petitioner has failed to show why it should be granted an exemption from the general rule in determining just compensation provided under Section 4 of Rule 67. On the contrary, private respondent has convinced us that, indeed, such general rule should in fact be observed in this case. WHEREFORE, the petition is hereby DISMISSED and the judgment appealed from AFFIRMED, except as to the interest on the monthly rentals. which is hereby reduced from twelve percent to the legal rate of six percent (6%) per annum. Costs against the petitioner. SO ORDERED. Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur. Footnotes

5 Ibid., pp. 74 & 93. 6 Ibid., pp. 24-A-33. 7 Ibid., p. 75. 8 Ibid., p. 10. 9 Ibid., pp. 93-94. 10 Ibid., p. 50. 11 Ibid., p . 94. 12 Section 4, Rule 69 of the Revised Rules of Court. 13 B. H. Berkenkotter & Co. vs. Court of Appeals, 216 SCRA 584, 587 (December 14, 1992); Republic of the Philippines vs. Philippine National Bank, 1 SCRA 957 (April 21, 1961). 14 58 Phil. 308, 316 (August 16, 1933). 15 Provincial Government of Rizal vs. Caro de Araullo, supra, at p. 317; Republic of the Philippines vs. Lara, et al., 96 Phil. 170 (November 29, 1954); Alfonso vs. Pasay City, 106 Phil. 1017 (January 30, 1960); Municipality of La Carlota vs. The Spouses Felicidad Baltazar and Vicente Gan, infra. 16 45 SCRA 235 (May 30, 1972). 17 Supra. 18 Republic vs. Vda. de Castellvi, 58 SCRA 336, 337 (August 15, 1974). 19 Rollo, p. 36. 20 67 Phil. 1 (December 24, 1938).

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21 Manila Electric Company vs. Pineda, 206 SCRA 196 (February 13, 1992). 22 National Power Corporation vs. Jocson, 206 SCRA 520 (February 25, 1992).

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.

23 Coca-Cola Bottlers Philippines, Inc. vs. Court of Appeals, 229 SCRA 533 (January 27, 1994). 24 Republic vs. Court of Appeals, 154 SCRA 428, 430 (September 30, 1987). 25 Rollo, pp. 36-38. 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 G.R. No. 118745 October 6, 1995 P 15,914,127.77 AMADCOR; 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. 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).

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 118712 October 6, 1995 LAND BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., 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

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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 rule-making 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. 14Petitioners 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.

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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, 29-A 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.

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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. SO ORDERED.

8 Rollo, pp. 109-111. 9 Sec. 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of private lands, the following shall be followed: 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. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. 10 Rollo, p. 111. 11 Sec. 49. Rules and Regulations. The PARC and the DAR shall have the power to issue rules and regulations, whether substantive or procedural, to carry out the objects and purposes of this Act. Said rules shall take effect ten (l0) days after the publication in two (2) national newspapers of general circulation. 12 Rollo, pp. 111-112. 13 Rollo, p. 112.

Regalado, Puno and Mendoza, JJ., concur. 14 Rollo, p. 107. Narvasa, C.J., is on leave. 15 Rollo, p. 149. Footnotes 16 Rollo, p. 63. 1 Gelos v. Court of Appeals, 208 SCRA 608. 615 (1992), quoting Justice Alicia Sempio-Diy. 2 Ibid, p. 616. 3 Rollo, p. 7. 4 Rollo, pp. 122-123. 5 Rollo, p. 149. 20 Shell Philippines, Inc. vs. Central Bank of the Philippines, 162 SCRA 628 (1988). 6 which provides formulas for the valuation of land expropriated under RA 6657. 7 which provides for the opening of trust accounts in the Land Bank instead of depositing in an accessible bank, in cash and bonds, the compensation for land expropriated by the DAR. 21 Sec. 18. Valuation and Mode of Compensation. The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and LBP in accordance with the criteria provided for in Sections 16 and 17 and other 17 Rollo, p. 67. 18 Peralta vs. Civil Service Commission 212 SCRA 425, 432 (1992). 19 Toledo vs. Civil Service Commission 202 SCRA 507, 54 (1991) citing Teoxon v. Members of the Board of Administrators, Philippine Veterans Administration, 33 SCRA 585, 589 (1970),citing Santos vs. Estenzo, 109 Phil. 419 (1960); Animos vs. Phil. Veterans Affairs Office, 174 SCRA 214, 223-224 (1989).

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pertinent provisions hereof, or as may be finally determined by the court as the just compensation for the land. 22 175 SCRA 343. 23 Decision, Court of Appeals, p. 14. 24 Municipality of Makati vs. Court of Appeals, 190 SCRA 207, 213 (1990) citing Cosculluela vs. The Hon. Court of Appeals, 164 SCRA 393, 400 (1988); Provincial Government of Sorsogon vs. Vda. de Villaroya, 153 SCRA 291, 302 (1987). 25 175 SCRA 343, 392.

motions for reconsideration contending mainly that, contrary to the Court's conclusion, the opening of trust accounts in favor of the rejecting landowners is sufficient compliance with the mandate of Republic Act 6657. Moreover, it is argued that there is no legal basis for allowing the withdrawal of the money deposited in trust for the rejecting landowners pending the determination of the final valuation of their properties. Petitioner DAR maintains that "the deposit contemplated by Section 16(e) of Republic Act 6657, absent any specific indication, may either be general or special, regular or irregular, voluntary or involuntary (necessary) or other forms known in law, and any thereof should be, as it is the general rule, deemed complying."[2] We reject this contention. Section 16(e) of Republic Act 6657 was very specific in limiting the type of deposit to be made as compensation for the rejecting landowners, that is in "cash" or in "LBP bonds", to wit: "Sec. 16. Procedure for Acquisition of Private Lands xxx xxx xxx

26 Mata vs. Court of Appeals, 207 SCRA 748, 753 (1992). (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. x x x" (Italics supplied) THIRD DIVISION The provision is very clear and unambiguous, foreclosing any doubt as to allow an expanded construction that would include the opening of "trust accounts" within the coverage of term "deposit. Accordingly, we must adhere to the well-settled rule that when the law speaks in clear and categorical language, there is no reason for interpretation or construction, but only for application.[3] Thus, recourse to any rule which allows the opening of trust accounts as a mode of deposit under Section 16(e) of R.A. 6657 goes beyond the scope of the said provision and is therefore impermissible. As we have previously declared, the rule-making power must be confined to details for regulating the mode or proceedings to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand the statutory requirements or to embrace matters not covered by the statute. [4] Administrative regulations must always be in harmony with the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the basic law.[5] The validity of constituting trust accounts for the benefit of the rejecting landowners and withholding immediate payment to them is further premised on the latter's refusal to accept the offered compensation thereby making it necessary that the amount remains in the custody of the LBP for safekeeping and in trust for eventual payment to the landowners.[6] Additionally, it is argued that the release of the amount deposited in trust prior to the final determination of the just compensation would be premature and expose the government to unnecessary risks and disadvantages, citing the possibility that the government may subsequently decide to abandon or withdraw from the coverage of the CARP certain portions of the properties that it has already acquired, through supervening administrative determination that the subject land falls under the exempt category, or by subsequent legislation allowing additional exemptions from the coverage, or even the total scrapping of the program itself. Force majeure is also contemplated in view of the devastation suffered by Central Luzon de to lahar. Petitioner DAR maintains that under these conditions, the government will be forced to institute numerous actions for the recovery of the amounts that it has already paid in advance to the rejecting landowners. [7] We are not persuaded. As an exercise of police power, the expropriation of private property under the CARP puts the landowner, and not the government, in a situation where the odds are already stacked against his favor. He has no recourse but to allow it. His only consolation is that he can negotiate for the amount of compensation to be paid for the expropriated property. As expected, the landowner will exercise this right to the hilt, but subject however to the limitation that he can only be entitled to a "just compensation." Clearly therefore, by rejecting and disputing the valuation of the DAR, the landowner is merely exercising his right to seek just compensation. If we are to affirm the withholding of the release of the offered compensation despite depriving the landowner of the possession and use of his property, we are in effect penalizing the latter for simply exercising a right afforded to him by law.

[G.R. No. 118712. July 5, 1996]

LAND BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORPORATION, respondents.

[G.R. No. 118745. July 5, 1996]

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 AND DEVELOPMENT CORPORATION, ET AL., respondents. RESOLUTION FRANCISCO, J.: Consequent to the denial of their petitions for review on certiorari by this Court on October 6, 1995[1], petitioners Department of Agrarian Reform (DAR) and Land Bank of the Philippines (LBP), filed their respective

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Obviously, this would render the right to seek a fair and just compensation illusory as it would discourage owners of private lands from contesting the offered valuation of the DAR even if they find it unacceptable, for fear of the hardships that could result from long delays in the resolution of their cases. This is contrary to the rules of fair play because 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" 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.[8] It is significant to note that despite petitioner's objections to the immediate release of the rejected compensation, petitioner LBP, taking into account the plight of the rejecting landowners, has nevertheless allowed partial withdrawal through LBP Executive Order No. 003, [9] limited to fifty (50) per cent of the net cash proceeds. This is a clear confirmation that petitioners themselves realize the overriding need of the landowners' immediate access to the offered compensation despite rejecting its valuation. But the effort, though laudable, still falls short because the release of the amount was unexplainably limited to only fifty per cent instead of the total amount of the rejected offer, notwithstanding that the rejecting landowner's property is taken in its entirety. The apprehension against the total release of the rejected compensation is discounted since the government's interest is amply protected under the aforementioned payment scheme because among the conditions already imposed is that the landowner must execute a Deed of Conditional Transfer for the subject property.[10] Anent the aforecited risks and disadvantages to which the government allegedly will be unnecessarily exposed if immediate withdrawal of the rejected compensation is allowed, suffice it to say that in the absence of any substantial evidence to support the same, the contemplated scenarios are at the moment nothing but speculations. To allow the taking of the landowners' properties, and in the meantime leave them empty handed by withholding payment of compensation while the government speculates on whether or not it will pursue expropriation, or worse for government to subsequently decide to abandon the property and return it to the landowner when it has already been rendered useless by force majeure, is undoubtedly an oppressive exercise of eminent domain that must never be sanctioned. Legislations in pursuit of the agrarian reform program are not mere overnight creations but were the result of long exhaustive studies and even heated debates. In implementation of the program, much is therefore expected from the government. Unduly burdening the property owners from the resulting flaws in the implementation of the CARP which was supposed to have been a carefully crafted legislation is plainly unfair and unacceptable. WHEREFORE, in view of the foregoing, petitioners' motions for reconsideration are hereby DENIED for lack of merit. SO ORDERED. Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Panganiban, JJ., concur.

[8]

Municipality of Makati vs. Court of Appeals, 190 SCRA 207, 213 (1990) citing Cosculluela vs. The Hon. Court of Appeals, 164 SCRA 393, 400 (1988); Provincial Government of Sorsogon vs. Vda. de Villaroya, 153 SCRA 291, 302 (1987).
[9]

Issued on January 19, 1993, Rollo, p. 250. LBP E.O. No. 003 Sec. II (3)(a), Rollo, p. 251.

[10]

[Syllabus] FIRST DIVISION

[G.R. Nos. 56219 & 56220. November 27, 1996]

JAIME T. PANES, DOMINADOR A. TAN, NILDA, SYVELIN, ROSELLER, HUMILIA, ERNA, SHERLYN, LYNGAGE, EDELYN, LAURENCE and FUJILYN, all surnamed TAN; ANTONIO C. RAQUIZA, JR., HEIRS OF RAYMUNDO BRAGA, represented by IGNACIO BRAGA, CRISTITUTA VALENZONA, TEODORICO MORO, BASILIO MENDOZA, represented by JOSE R. BANDALAN, ENRICA VALENZONA, ALBERTO SABEJON, and 1,401 other TENANTS, represented by their counsel, ATTY. SABAS B. ASTORGA, and HONORABLE GABINO R. SEPULVEDA, Presiding Judge, Court of Agrarian Relations, Branch I, Ormoc City, petitioners, vs. VISAYAS STATE COLLEGE OF AGRICULTURE, and the HONORABLE COURT OF APPEALS, presided by the HONORABLE JUSTICES CRISOLITO PASCUAL, SERAFIN R. CUEVAS, and CAROLINA GRIOAQUINO,respondents.

[1] [2] [3]

[G.R. Nos. 56393 & 56394. November 27, 1996] Rollo, p. 182. Motion for Reconsideration, p. 3, Rollo, p. 202. JAIME T. PANES, DOMINADOR A. TAN, for himself and as guardian of minors LYNGAGE, EDELYN, LAURENCE AND FUJILYN all surnamed TAN, BANK OF THE PHILIPPINE ISLANDS, NILDA TAN, SYVELYN TAN, ROSELLER TAN, HUMILLA TAN, ERNA TAN, SHERLYN TAN, ANTONIO C. RAQUIZA, JR., Heirs of RAYMUNDO BRAGA, represented by IGNACIO BRAGA, Heirs of MACARIO PIAMONTE, represented by Z. ROCA, CRISTITUTA VALENZONA, Heirs of TEODORICO MORO, represented by MARIA VDA. DE MORO & BASILIO MENDOZA, represented by JOSE BANDALAN & ENRICA VALENZONA, petitioners, vs. THE COURT OF APPEALS and VISAYAN STATE COLLEGE OF AGRICULTURE,respondents. DECISION

Songco vs. National Labor Relations Commission 183 SCRA 610, 616 (1990) citing Cebu Portland Cement Co. vs. Municipality of Naga, 24 SCRA 708; Gonzaga vs. Court of Appeals 51 SCRA 381.
[4] [5]

Shell Philippines, Inc. vs. Central Bank of the Philippines, 162 SCRA 628 (1988).

Philippine Petroleum Corporation vs. Municipality of Pililla, 198 SCRA 82 (1991); Tayug Rural Bank, 146 SCRA 120 (1986) citing People vs. Lim, 108 Phil. 1091.
[6] [7]

Rollo, p. 202. Rollo, pp. 216-217.

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HERMOSISIMA, JR., J.: Before us are consolidated petitions both seeking the review of the decision [1]of respondent Court of Appeals[2] in an expropriation case[3] filed before the Court of Agrarian Relations of Ormoc City. Of the two sets of petitions, G.R. No. 56219-20 had been denied by our resolution[4] of February 27, 1981. Since petitioners did not ask for the reconsideration thereof, the said resolution of denial had become final, and so we have only the petitions in G.R. Nos. 56393-94 to rule upon. The facts, as culled from the pleadings, follows: On March 21, 1977, then President Marcos issued Presidential Decree (P.D.) No. 1107 establishing the Philippine Root Crops Research and Training Center (hereafter, Root Crops Center) in the Visayas State College of Agriculture (hereafter VISCA) located at Baybay, Leyte. Pursuant to the purposes of the Root Crops Center, VISCA was authorized under P.D. No. 1107 to acquire by negotiated sale or expropriation, private agricultural properties in Barrios Pangasugan to the extent of 250 hectares and in Guadalupe, Baybay, Leyte to the extent of 75 hectares.[5] Clothed by P.D. No. 1107 with the power to expropriate lands situated within the aforecited barrios, respondent VISCA filed a complaint[6] for expropriation against petitioners. The public purposes cited therefor were the following: (1) to establish experimental fields; (2) to construct buildings, laboratories and housing facilities for the personnel of the Root Crops Center; and (3) to integrate and conduct country-wide researches on root crops.[7] Respondent VISCA deposited the amount of P74,050.00 with the Philippine National Bank (PNB) representing the assessed value of the lands for taxation purposes as determined under P.D. No. 76. On the basis of this deposit, respondent VISCA prayed in its complaint that a writ of possession be issued. P.D. No. 42 allows the entity expropriating the land to take possession thereof upon deposit with the PNB of the amount equivalent to the assessed value of the subject properties. On May 15, 1978, petitioners filed their answer to the complaint. They alleged that (1) the lands sought to be expropriated were not within the area specified under P.D. No. 1107; (2) the amount of P74,050.00 did not constitute just compensation; (3) P.D. No. 794 providing that the just compensation shall not be in excess of the current and fair market value declared by the owner or administrator, or such market value as determined by the provincial assessor, which is lower, was unconstitutional; (4) likewise unconstitutional was P.D. No. 1107 for impairing the freedom of contract and violating the equal protection clause; and (5) there was no public necessity for the acquisition by respondent VISCA of petitioners lands. Petitioners also averred, by way of counterclaim, that because of the institution of the expropriation suit against them, they suffered anguish and anxiety for which they should be indemnified with damages. On May 10, 1978, respondent VISCA filed a motion for the issuance of a writ of possession of the properties in question, attaching thereto a certification dated November 17, 1977 issued by the cashier of the PNB, Ormoc Branch, Ormoc City, to the effect that respondent VISCA had deposited with said bank the amount of P74,050.00. On June 8, 1978, the aforestated motion was heard before the trial court. During the hearing, respondent VISCA presented in evidence tax declarations of the properties involved which indicate the assessed values thereof for taxation purposes and the PNB certification. All these documents were admitted by the trial court without objections from petitioners. On the other hand, petitioners moved for and were granted by the lower court, additional time within which to file their written opposition to the said motion. On July 7, 1978, some 1,298 tenants filed a motion to intervene attaching thereto an answer in intervention. In their answer, the intervenors alleged, among others, that: (1) they were tenant-tillers and occupants of the lands involved in the expropriation proceedings; (2) their tenure of work as tenants being secured and protected by law, they cannot be removed from their landholdings through eminent domain; (3) P.D. No. 1107 was unconstitutional because the expropriation contemplated under the Constitution refers to landed estates or haciendas and not to small agricultural lands; and (4) P.D. No. 27 decreeing emancipation of tenant-tillers from the bondage of the soil and other decrees related thereto preclude expropriation of the properties of the intervenors. On July 21, 1978, the trial court issued an order granting the intervenors motion to intervene and admitting their answer in intervention.

On December 4, 1978, respondent VISCA filed its reply to the answer in intervention. Respondent VISCA denied that all the intervenors were tenants of the lands being expropriated and alleged that their reliance on P.D. No. 27 and other related decrees was misplaced since the proscription therein against the ejectment or removal of tenants in applicable as regards landowners, landholders and agricultural lessors and not as regards the State or those acting for and in its behalf. On March 29, 1979, the trial court issued a resolution denying respondent VISCAs motion for the issuance of a writ of possession. The trial court reasoned that (1) expropriation was not one of the causes provided for in Republic Act (R.A.) Nos. 1199 and 3844 and P.D. Nos. 316 and 583 for the ejectment of tenants; (2) the presiding judge would be subjected to prosecution and suffer the penalty provided for under Section 2 of P.D. No. 583 were he to grant said motion; (3) P.D. No. 42, being a procedural law, cannot be said to prevail over the aforecited agrarian laws which are substantive laws; (4) P.D. No. 42 was only applicable to untenanted private properties; (5) the purpose for the expropriation, which is root crop experimentation, cannot be deemed to prevail over the tenurial rights of the tenant-intervenors; and (6) there is doubt as to whether the lands to be expropriated were indeed within the area indicated by P.D. No. 1107 to be proper for expropriation. On April 23, 1979, respondent VISCA filed a motion for reconsideration of the aforecited resolution. On June 21, 1979, the trial court issued an order denying respondent VISCAs motion for reconsideration. On August 17, 1979, respondent VISCA filed with this court a petition for review by certiorari with prayer for the issuance of a temporary restraining order (TRO) and/or a writ of preliminary injunction. We, however, referred the said petition to the respondent Court of Appeals which docketed the same as CA-G.R. No. 09659-SP. Acting on the prayer for the issuance of a TRO, respondent court issued the same on August 30, 1979 ordering all the parties and the trial court to maintain the status quo. Notwithstanding the mandate of the TRO, however, the trial court proceeded with the scheduled hearing of the expropriation case on September 5 and 6, 1979. On September 6, 1979, the trial judge dismissed the case in an order of the same date. Respondent VISCA filed a motion for reconsideration of the order of dismissal which was denied in an order dated October 23, 1979, this notwithstanding receipt by the trial judge of the TRO on September 14, 1979. On November 6, 1979, respondent VISCA filed in CA-G.R. No. 09659-SP a motion for the issuance of an order of preliminary mandatory injunction directing the trial court to reinstate the expropriation case. On December 10, 1979, respondent appellate court issued a resolution directing the trial judge to reinstate the expropriation case as it was on or before August 31, 1979. Meanwhile, respondent VISCA, on November 7, 1979, likewise filed a notice of appeal from the trial courts order of September 6, 1979 and resolution of October 23, 1979 as regards the dismissal of the expropriation case. On December 6, 1979, the clerk of court of the trial court forwarded the original records of the expropriation case to the respondent appellate court. The appeal was docketed as CA-G.R. No. 10250-CAR. Subsequently, respondent VISCA filed a manifestation with motion to consolidate CA-G.R. No. 09659-SP and CA-G.R. No. 10250-CAR. Said motion was granted by the respondent court on February 20, 1980. On August 14, 1980, respondent Court of Appeals rendered a decision in the aforecited consolidated cases. Respondent court found the dismissal of the expropriation case to be tainted with grave abuse of discretion. It explained: We cannot approve the dismissal of CAR Case NO. 1659. The reasons advanced by the x x x [trial] court for the issuance of the order of September 6, 1979 and the resolution of October 23, 1979, do not support the dismissal with prejudice of CAR Case No. 1659. That step taken by the lower court is too drastic and harsh under the premises. First, the petitioner [private respondent] sent a telegram on August 28, 1979 to the x x x [trial] court and to the opposing counsels requesting for the cancellation of the hearing of CAR Case No. 1659 set on September 5, 6

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and 7, 1979. Second, the scheduled hearings were also subject of injunction in a petition for certiorari filed before x x x [respondent] Court. Third, it was the first time the petitioner [respondent VISCA] sought for a postponement of the hearing of the case. Fourth, there is no basis for the conclusion of the lower court that there is failure to prosecute the case. x x x we find in the record evidence of grave abuse of discretion on the part of the x x x [trial] court in dismissing with prejudice CAR Case No. 1659 considering that the petitioner [respondent VISCA] had already asked for the postponement of the hearings set for September 5, 6 and 7, 1979 until the resolution by x x x [respondent] court of the issue raised in its original petition x x x.[8] With respect to the issue of whether or not the trial court erred in not granting respondent VISCAs motion for the issuance of a writ of possession, respondent Court of Appeals ruled in favor of respondent VISCA, holding that: x x x [trial] court had committed a grave abuse of discretion when it denied immediate possession of the subject properties in its resolution of March 29, 1979 and in its order of June 21, 1979. As we see it, the authority of the petitioner [respondent VISCA] to take immediate possession of the subject properties appear clear and explicit under Section 4 of Presidential Decree No. 1107 in relation to Presidential Decree No. 42. The contention of the respondents [petitioners] that Presidential Decree No. 42 applies only to untenanted lands in not convincing for there is nothing in Presidential Decree No. 42 that indicates this. We are guided in this by the prevailing wisdom that there is no basis for distinction when the law itself does not distinguish. xxx x x x [P]etitioner [respondent] Visayas State College filed on May 10, 1978 a motion for the issuance of a writ to take possession of the subject properties. Petitioner [respondent VISCA] has complied with the requirements of Presidential Decree no. 42 which gives the petitioner [respondent VISCA] the right to take possession of the subject of the expropriation proceedings. Petitioner [respondent VISCA] has notified the respondents [petitioners] of its desire to take possession of the properties, as evidenced by the complaint filed in Civil Case NO. 1659CAR. Petitioner [respondent VISCA] has also deposited with the Philippine National Bank, Ormoc Branch, the amount equivalent to the assessed value of the subject properties. Petitioners [respondent VISCAs] motion for the issuance of the writ of possession was duly heard by the x x x [trial] court x x x Under Section 4 of Presidential Decree No. 1107, the issuance of a possessory writ is then mandatory on the part of the x x x [trial] judge. But this notwithstanding, the x x x [trial] court denied the motion for the issuance of the writ of possession. While it is a fact that at the time the resolution of March 29, 1979 and the order of June 21, 1979 were issued by the x x x [trial] court, Presidential Decree No. 1533 x x x has previously established a uniform basis for the determination of just compensation and the amount of deposit for immediate possession of the property involved in eminent domain proceedings, having been promulgated on June 11, 1978, the same does not render the deposit made by the petitioner void or invalid. As a matter of fact, Section 2 of Presidential Decree No. 1533 authorizes the immediate possession of properties affected by eminent domain proceedings upon payment of an amount equivalent to 10% of the amount of compensation for the property. So that if and when the standing deposit of the petitioner with the Philippine National Bank as required by Presidential Decree No. 42 is not sufficient under Presidential Decree No. 1533, the x x x [trial] court should have ordered the petitioner [respondent VISCA] to deposit the additional amount rather than deny the motion[9] Petitioners also assailed the constitutionality of P.D. No. 1107 before the respondent Court of Appeals. Said court, however, was unconvinced. It ruled: Respondents [petitioners] x x x assails [sic] the constitutionality of Presidential Decree No. 1107 on the grounds that it: 1) impairs the freedom of contract guaranteed by the Constitution, 2) violates the equal protection of law and the tenurial security guaranteed by the Constitution, and 3) runs counter to Republic Act Nos. 1199 and 3844 and Presidential Decree Nos. 316, 583, and other related agrarian laws.

Our analysis of this matter does not sustain the constitutional attack leveled by the respondents [petitioners] on Presidential Decree No. 1107. The constitutional guaranty of non-impairment of contract is of course subject to the exercise of the police power of the State for reasons of public health, public safety, public morals, and general welfare. The concept of freedom of contract is not an unlimited one for it is vulnerable to reasonable legislation aimed at the promotion of public health , public safety, public morals and general welfare. By implication, therefore, even the tenurial security of the respondent tenants would not be an exception. The supremacy of the police power of the State over individual rights is a constitutional precept that is well entrenched in our jurisprudence (J.M. Tuason vs. Land Tenure Administration, 31 SCRA 413, 430).[10] In accordance with the aforecited rulings, the respondent Court of Appeals, in the dispositive portion of its decision, ordered the following: WHEREFORE, finding the petitions meritorious, the resolutions or orders of March 29, 1979, June 21, 1979, September 6, 1979, and October 23, 1979 x x x are all set aside. x x x [trial] court is hereby ordered to require the petitioner [respondent VISCA] to comply with the requirements of Presidential Decree No. 1533, in relation to Presidential Decrees [sic] Nos. 1107 and 42, if it has not yet done so, after which issue a writ in favor of the petitioner [respondent VISCA] to take immediate possession of the properties involved in CAR Casse No. 1659, pursuant to Section 4 of Presidential Decree No. 1107, and then proceed with the trial of CAR Case No. 1659 on the merits. The preliminary injunction heretofore issued by this Court is hereby made permanent.[11] The trial court decision favorable to petitioners having been reversed on appeal by respondent court, petitioners are now before us seeking the nullification of that reversal on the basis of the following assignment of errors: "First Assignment of Error THE COURT OF APPEALS ERRED IN ORDERING THE ISSUANCE OF A WRIT OF POSSESSION OVER THE PROPERTIES SUBJECT MATTER OF THE EXPROPRIATION PROCEEDINGS A. The Court of Appeals erred in failing to consider the valid and substantial grounds raised by the petitioner against the issuance of a writ of possession 1. Almost all of the lands sought to be expropriated are not within the area defined in Annex A of PD 1107 2. The lands sought to be expropriated are already devoted to another public purpose 3. There is no public necessity for the expropriation a. There are other areas which respondent VISCA can utilize for root crop research b. The alleged purposes for which respondent VISCA seeks to expropriate the property do not require 325 hectares of prime rice and coconut land 4. The lands sought to be expropriated are not contiguous and adjacent to VISCA B. The issuance of a writ of possession will render the whole proceedings for expropriation moot and academic C. VISCA is unable to comply with the requirement of a deposit for the amount of just compensation

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Second Assignement of Error THE COURT OF APPEALS ERRED IN ORDERING THE REINSTATEMENT OF THE EXPROPRIATION PROCEEDINGS BEFORE THE COURT OF AGRARIAN RELATIONS Third Assignment of Error THE COURT OF APPEALS COMMITTED GRAVE PROCEDURAL ERRORS IN THE DISPOSITION OF THE CASE BEFORE IT.[12] We affirm the respondent Court of Appeals insofar only as it ordered the reinstatement of the expropriation proceedings before the Court of Agrarian Relations (now the Regional Trial Court). The dismissal with prejudice of the complaint for expropriation was indeed precipitate under the circumstances obtaining. The law under which the expropriation is sought, notwithstanding the attack against its constitutionality, remains in force and effective. Admittedly enacted pursuant to the police power of the state, P.D. 1107 has in its favor the presumption of constitutionality that is not easily eroded by a mere allegation of its illegality. Hence, respondent VISCA is entitled to prosecute its expropriation case and be heard on the merits as to the rights that it claims under P.D. 1107. However, the finding of respondent appellate court insofar as it found that respondent VISCA has the right to a writ of possession upon compliance with the requirements of P.D. No. 1533 in relation to P.D. Nos. 1107 and 42, i.e., payment of an amount equivalent to 10% of the amount of compensation for the property which is, under P.D. 42, the amount equivalent to the assessed value of the subject property for purposes of taxation, has been rendered ineffectual by our ruling in Export Processing Zone Authority v. Dulay. P.D. No. 1533 determines the just compensation in expropriation cases to be the fair and current market value declared by the owner of the property sought to be expropriated or such market value as determined by the assessor, whichever is lower. As such, the determination of just compensation, by virtue of the enactment of P.D. No. 1533, was converted from being a judicial prerogative to an executive decision. Because the executive determination of just compensation in eminent domain proceedings renders the courts inutile in a matter which under the Constitution is reserved to them for final determination, we declared P.D. No. 1533 to be unconstitutional and void in the case of Export Processing Zone Authority v. Dulay[13] Similar provisions regarding executive determination of just compensation found in Presidential Decree Nos. 42, 76, 464, 794, 1224, 1259, 1313, and 1517 were therefore likewise nullified for being unconstitutional.[14] In the instant case, respondent VISCA deposited an amount with the PNB representing the assessed value of the lands for taxation purposes as determined under P.D. No. 76. On the basis of this deposit, respondent VISCA prayed in its complaint that a writ of possession be issued, the same being allegedly sanctioned under P.D. No. 42 which allows the entity expropriating the land to take possession thereof upon deposit with the PNB of the amount equivalent to the assessed value of the subject properties for purposes of taxation. The trial court refused to grant a writ of possession upon the foregoing basis. When the case was elevated before it, the respondent appellate court indirectly ordered the issuance of said writ upon the condition that respondent VISCA comply with the requirements of P.D. No. 1533. Now, in the light of the declared unconstitutionality of P.D. No. 76, P.D. No. 1533 and P.D. No. 42 insofar as they sanction executive determination of just compensation in expropriation cases, it is imperative that any right to the immediate possession of the subject property, accruing to respondent VISCA, must be firmly grounded on a valid compliance with Section 2 of Rule 67, i.e., there must be a deposit with the National or Provincial Treasurer of the value of the subject property as provisionally and promptly ascertained and fixed by the court having jurisdiction of the proceedings.[15] As to the other assigned errors raised by petitioners, suffice it to say that they indubitably involve factual questions such as, among others, whether or not the properties sought to be expropriated are within the areas specified by P.D. No. 1107 as proper for expropriation, which factual questions need to be threshed out in trial court

proceedings for hearing thereupon on the merits. At any rate, we cannot pre-empt the prosecution of this expropriation case and defeat the statutory rights of respondent VISCA by prematurely ruling on the constitutionality issues raised herein. WHEREFORE, the decision of the Court of Appeals is affirmed insofar as it ordered the reinstatement of CAR Case No. 1659 and is HEREBY MODIFIED insofar as it ordered respondent VISCA to comply with the requirements under P.D. No. 1533 in order to be entitled by right to a writ of possession of the subject property. The trial court is hereby ordered to issue a writ of possession in CAR Case No. 1659 in favor of respondent VISCA pending trial on the merits but only after payment of just compensation determined by the trial court in accordance with Section 2, Rule 67, of the Revised Rules of Court. No pronouncement as to cost. SO ORDERED. Padilla (Chairman), Bellosillo, Vitug, and Kapunan, JJ., concur.

[1]

In CA-G.R. Nos. 09659-SP and 10250-CAR, dated August 14, 1980, penned by Associate Justice Crisolito Pascual and concurred in by Associate Justices Serafin Cuevas and Carolina Grio-Aquino, Rollo, pp. 66-77.
[2] [3] [4] [5] [6] [7] [8] [9]

Fourth Division. CAR Case No. 1659. Rollo, of G.R. Nos. 56219-20, p. 6. Annex A referred to in P.D. 1107, Rollo, p. 64. Rollo, pp. 51-64. Complaint dated November 4, 1977, p. 8, Rollo, p. 58. Decision dated August 14, 1980, pp. 8-9, Rollo, pp. 73-74. Id., pp. 9-11, Rollo, pp. 74-76. Id., p. 10, Rollo, p. 75. Id., pp. 11-12, Rollo, pp. 76-77. Brief for Petitioners dated September 23, 1982, pp. i-iii, Rollo, p. 257. 149 SCRA 305 (1987).

[10] [11] [12] [13] [14]

Id.; Ignacio v. Guerrero, 150 SCRA 369 (1987); Sumulong v. Guerrero, 154 SCRA 461 (1987); Leyva v. Intermediate Appellate Court, 155 SCRA 39 (1987); Belen v. Court of Appeals, 160 SCRA 291 (1988); City Government of Toledo v. Fernandos, 160 SCRA 285 (1988); Municipality of Talisay v. Ramirez, 183 SCRA 528 (1990).

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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 122256 October 30, 1996 REPUBLIC OF THE PHILIPPINES, represented by the Department of Agrarian Reform (DAR), and LAND BANK OF THE PHILIPPINES, petitioners, vs. COURT OF APPEALS and ACIL CORPORATION, respondents.

under 57. Petitioners sustain the affirmative proposition. They cite 50 of R.A. No. 6657 which in pertinent part provides: 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). . . and argue that the fixing of just compensation for the taking of lands under R.A. No. 6657 is a "[matter] involving the implementation of agrarian reform" within the contemplation of this provision. They invoke 16(f) of R.A. No. 6657, which provides that "any party who disagrees to the decision [of the DAR] may bring the matter to the court of proper jurisdiction for final determination of just compensation," as confirming their construction of 50. The contention has no merit. It is true that 50 grants the DAR primary jurisdiction to determine and adjudicate "agrarian reform matters" and exclusive original jurisdiction over "all matters involving the implementation of agrarian reform," except those falling under the exclusive jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources. It is also true, however that 57 provides: 57. Special Jurisdiction. The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision. Thus Special Agrarian Courts, which are Regional Trial Courts, are given original and exclusive jurisdiction over two categories of cases, to wit: (1) "all petitions for the determination of just compensation to landowners" and (2) "the prosecution of all criminal offenses under [R.A. No. 6657]." 2 The provision of 50 must be construed in harmony with this provision by considering cases involving the determination of just compensation and criminal cases for violations of R.A. No. 6657 as excepted from the plenitude of power conferred on the DAR. Indeed, there is a reason for this distinction. The DAR is an administrative agency which cannot be granted jurisdiction over cases of eminent domain (for such are takings under R.A. No. 6657) and over criminal cases. Thus in EPZA v. Duly 3 and Sumulong v. Guerrero 4 we held that the valuation of property in eminent domain is essentially a judicial function which cannot be vested in administrative agencies, while in Scoty's Department Store v. Micaller 5 we struck down a law granting the then Court of Industrial Relations jurisdiction to try criminal cases for violations of the Industrial Peace Act. Petitioners also cite Rule II, 5 and Rule XIII, 1 of the DARAB Rules of Procedure in support of their contention that decisions of agrarian reform adjudicators may only be appealed to the DARAB. These rules provide: Rule II, 5. Appellate Jurisdiction. The Board shall have exclusive appellate jurisdiction to review, reverse, modify, alter or affirm resolutions, orders, decisions, and other dispositions of its [regional and provincial agrarian reform adjudicators].

MENDOZA, J.:p Private respondent Acil Corporation owned several hectares of land in Linoan, Montevista, Davao del Norte, which the government took pursuant to the Comprehensive Agrarian Reform Law (R.A. No. 6657). Private respondent's certificates of title were cancelled and new ones were issued and distributed to farmer-beneficiaries. The lands were valued by the Land Bank of the Philippines at P19,312.24 per hectare for the riceland and P4,267.68 per hectare for brushland, or for a total of P439,105.39. It appears, however, that in the Statement of Agricultural Landholdings ("LISTASAKA") which private respondent had earlier filed with the Department of Agrarian Reform (DAR), a lower "Fair Value Acceptable to Landowner" was stated and that based on this statement, the Land Bank of the Philippines valued private respondent's lands uniformly at P15,311.79 per hectare and fixed the amount of P390,557.84 as the total compensation to be paid for the lands. Private respondent rejected the government's offer, pointing out that nearby lands planted to the same crops were valued at the higher price of P24,717.40 per hectare. The matter was brought before the Provincial Agrarian Reform Adjudicator (PARAD) who, on October 8, 1992, sustained the initial valuation made by the LBP. On December 12, 1992, private respondent filed a Petition for Just Compensation in the Regional Trial Court of Tagum, Davao del Norte, sitting as a Special Agrarian Court. Private respondent prayed that DAR be ordered to pay P24,717.40 per hectare. However, the RTC dismissed its petition on the ground that private respondent should have appealed to the Department of Agrarian Reform Adjudication Board (DARAB), pursuant to the latter's Revised Rules of Procedure, before recourse to it (the RTC) could be had. In addition the RTC found that, in violation of the DARAB's rules of procedure the petition had been filed more than fifteen (15) days after notice of the decision of the PARAD. Private respondent moved for reconsideration but its motion was denied on October 13, 1994. Private respondent therefore filed a petition for certiorari with the Court of Appeals, contending that a petition for just compensation under R.A. No. 6657 56-57 falls under the exclusive and original jurisdiction of the RTC. His contention was sustained by the Court of Appeals which, in its decision 1 of October 4, 1995, set aside the order of dismissal of the RTC. Accordingly, the case was remanded to the RTC for further proceedings. In turn the government, represented by the Department of Agrarian Reform, filed this petition for review on certiorari, raising as the issue whether in cases involving claims for just compensation under R.A. No. 6657 an appeal from the decision of the provincial adjudicator to the DARAB must first be made before a landowner can resort to the RTC

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Rule XIII, 1. Appeal to the Board. a) An appeal may be taken from an order or decision of the Regional or Provincial Adjudicator to the Board by either of the parties or both, by giving or stating a written or oral appeal within a period of fifteen (15) days from the receipt of the resolution, order or decision appealed from, and serving a copy thereof on the opposite or adverse party, if the appeal is in writing. b) An oral appeal shall be reduced into writing by the Adjudicator to be signed by the appellant, and a copy thereof shall be served upon the opposite or adverse party within ten (10) days from the taking of oral appeal. Apart from the fact that only a statute can confer jurisdiction on courts and administrative agencies rules of procedure cannot it is noteworthy that the New Rules of Procedure of the DARAB, which was adopted on May 30, 1994, now provide that in the event a landowner is not satisfied with a decision of an agrarian adjudicator, the landowner can bring the matter directly to the Regional Trial Court sitting as Special Agrarian Court. Thus Rule XIII, 11 of the new rules provides: 11. Land Valuation and Preliminary Determination and Payment of Just Compensation. The decision of the Adjudicator on land valuation and preliminary determination and payment of just compensationshall not be appealable to the Board but shall be brought directly to the Regional Trial Courtsdesignated as Special Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration. (Emphasis supplied) This is an acknowledgment by the DARAB that the decision of just compensation cases for the taking of lands under R.A. No. 6657 is a power vested in the courts. Thus, under the law, the Land Bank of the Philippines is charged with the initial responsibility of determining the value of lands placed under land reform and the compensation to be paid for their taking. 6 Through notice sent to the landowner pursuant to 16(a) of R.A. No. 6657, the DAR makes an offer. In case the landowner rejects the offer, a summary administrative proceeding is held 7 and afterward the provincial (PARAD), the regional (RARAD) or the central (DARAB) adjudicator as the case may be, depending on the value of the land, fixes the price to be paid for the land. If the landowner does not agree to the price fixed, he may bring the matter to the RTC acting as Special Agrarian Court. 8 This in essence is the procedure for the determination of compensation cases under R.A. No. 6657. In accordance with it, the private respondent's case was properly brought by it in the RTC, and it was error for the latter court to have dismissed the case. In the terminology of 57, the RTC, sitting as a Special Agrarian Court, has "original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners." 9 It would subvert this "original and exclusive" jurisdiction of the RTC for the DAR to vest original jurisdiction in compensation cases in administrative officials and make the RTC an appellate court for the review of administrative decisions. Consequently, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from 57 that the original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into appellate jurisdiction would be contrary to 57 and therefore would be void. What adjudicators are empowered to do is only to determine in a preliminary manner the reasonable compensation to be paid to landowners, leaving to the courts the ultimate power to decide this question. WHEREFORE the petition for review on certiorari is DENIED and the decision of the Court of Appeals is AFFIRMED. SO ORDERED.

Regalado, Romero, Puno and Torres, Jr., JJ., concur. Footnotes 1 Per Justice Cesar D. Francisco, and concurred in by Justices Eubulo G. Verzola and Oswaldo D. Agcaoili. 2 Quismundo v. Court of Appeals, 201 SCRA 609 (1991); Vda. de Tangub v. Court of Appeals, 191 SCRA 558 (1990). 3 149 SCRA 305 (1987). 4 154 SCRA 461 (1987). 5 99 Phil. 762 (1956). 6 Sec. 1, E.O. No. 405 (June 14, 1990). 7 Sec. 15(d), R.A. No. 6657. 8 Vinzons-Magana v. Estrella, 201 SCRA 536 (1991); Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 366 (1989). 9 Sec. 57, R.A. No. 6657.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-51078 October 30, 1980 CRISTINA DE KNECHT, petitioner, vs. HON. PEDRO JL. BAUTISTA, as Judge presiding over Branch III of the Court of First Instance (Pasay City) and the REPUBLIC OF THE PHILIPPINES, respondents.

FERNANDEZ, J.:

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This is a petition for certiorari and prohibition filed by Cristina de Knecht against the Honorable Pedro JL. Bautista, as Judge presiding over Branch III of the Court of First Instance of Rizal (Pasay City), and the Republic of the Philippines pines seeking the following relief: WHEREFORE, petitioner respectfully prays that judgment be rendered annulling the order for immediate possession issued by respondent court in the expropriation proceedings and commanding respondents to desist from further proceedings in the expropriation action or the order for immediate possession issued in said action, with costs. Petitioner prays that a restraint order or writ of preliminary injunction be issued exparte enjoining respondents, their representative representative and agents from enforcing the here questioned order for mediate posession petitioner offering to post a bond executed to the parties enjoined in an amount to be fixed by the Court to the effect that she will pay to such parties all damages which they may sustain by reason of the injunction if the Court should finally decide she is not entitled there She prays for such other remedy as the Court may deem just and equitable in the premises. Quezon City for July 1979. 1 The petitioner alleges that than ten (10) years ago, the government through the Department of Public Workmen's and Communication (now MPH) prepared a to Epifanio de los Santos Avenue (EDSA) to Roxas Boulevard; that the proposed extension, an adjunct of building program, the Manila Cavite Coastal Read Project, would pass through Cuneta Avenue up to Roxas Boulevard that this route would be a straight one taking into account the direction of EDSA; that preparation to the implementation of the aforesaid plan, or on December 13, 1974, then Secretary Baltazar Aquino of the Department of Public Highways directed the City Engineer of Pasay City not to issue temporary or permanent permits for the construction and/or improvement of buildings and other structures located within the proposed extension through Cuneta Avenue that shortly thereafter the Department of Public Highways decided to make the proposed extension go through Fernando Rein and Del Pan Streets which are lined with old substantial houses; that upon learning of the changed the owners of the residential houses that would be affected, the herein petitioner being one of them, filed on April 15, 1977 a formal petition to President Ferdinand E. Marcos asking him to order the Ministry of Public Highways to adoption, the original plan of making the extension of EDSA through Araneta Avenue instead of the new plan going through Fernando Rein and Del Pan Streets; that President Marcos directed then Minister Baltazar Aquino to explain within twenty-four (24) hours why the proposed project should not be suspended; that on April 21, 1977 then Minister Aquino submitted his explanation defending the new proposed route; that the President then referred the matter to the Human Settlements Commission for investigation and recommendation; that after formal hearings to which all the parties proponents and oppositors were given full opportunity to ventilate their views and to present their evidence, the Settlements Commission submitted a report recommending the reversion of the extension of EDSA to the original plan passing through Cuneta Avenue; and that notwithstanding the said report and recommendation, the Ministry of Public Highways insisted on implementing the plan to make the extension of EDSA go through Fernando Rein and Del Pan Streets. 2 In February 1979, the government filed in the Court of First Instance of Rizal, Branch III, Pascual City presided by the respondent Judge, a complaint for expropriation against the owners of the houses standing along Fernando Rein and Del Pan Streets, among them the herein petitioner. The complaint was docketed as Civil Case No. 7001-P and entitled"Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, etc ." The herein petitioner filed a motion to dismiss dated March 19, 1979 on the following grounds:

(a) court had no jurisdiction over the subject matter of the action because the complaint failed to allege that the instant project for expropriation bore the approval of the Ministry of Human Settlements and the Metro Manila Government nor pursuant to Presidential Decrees Nos. 824, 1396 and 1517; (b) The choice of properties to be expropriated made by the Ministry of Public Highways was arbitrary and erroneous; (c) The complaint was premature as the plaintiff never really had gone through serious negotiations with the defendant for the purchase of her property; and (d) The complaint relied on an arbitrary and erroneous valuation of properties and disregarded consequential damages. An urgent motion dated March 28, 1979 for preliminary junction was also filed. In June 1979 the Republic of the Philippines filed a motion for the issuance of a writ of possession of the property sought to be expropriated on the ground that said Republic had made the required deposit with the Philippine National Bank. The respondent judge issued a writ of possession dated June 14, 1979 authorizing the Republic of the Philippines to take and enter upon the possession of the properties sought be condemned. 3 The petitioner contends that "Respondent court lacked or exceeded its jurisdiction or gravely abused its discretion in issuing the order to take over and enter upon the possession of the properties sought to be expropriated-petitioner having raised a constitutional question which respondent court must resolve before it can issue an order to take or enter upon the possession of properties sought to be expropriated." 4 The petitioner assails the choice of the Fernando Rein and Del Pan Streets route on the following grounds: The choice of property to be expropriated cannot be without rhyme or reason. The condemnor may not choose any property it wants. Where the legislature has delegated a power of eminent do-main, the question of the necessity for taking a particular fine for the intended improvement rests in the discretion of the grantee power subject however to review by the courts in case of fraud, bad faith or gross abuse of discretion. The choice of property must be examined for bad faith, arbitrariness or capriciousness and due process determination as to whether or not the proposed location was proper in terms of the public interests. Even the claim of respondent's Secretary Baltazar Aquino that there would be a saving of P2 million under his new plan must be reviewed for it bears no relation to the site of the proposed EDSA extension As envisioned by the government, the EDSA extension would be linked to the Cavite Expressway. Logically then, the proposed extension must point to the south and not detour to the north. Also, the equal protection of the law must be accorded, not on to the motel owners along Cuneta (Fisher) Avenue, but also to the owners of solid and substantial homes and quality residential lands occupied for generations. 5 The respondents maintain that the respondent court did not act without jurisdiction or exceed its jurisdiction or gravel abuse its discretion in issuing the order dated June 14, 1979 authorizing the Republic of the Philippines to take over and enter the possession of the properties sought to be appropriated because the Republic has complied with all the statutory requirements which entitled it to have immediate possession of the properties involved. 6

Article III Section 9 cases Page 99 of 111

Defending the change of the EDSA extension to pass through Fernando Rein Del Pan Streets, the respondents aver: 'There was no sudden change of plan in the selection of the site of the EDSA Extension to Roxas Blvd. As a matter of fact, when the Ministry of Public Highways decided to change the site of EDSA Ex- tension to Roxas Boulevard from Cuneta Avenue to the Del Pan Fernando Item Streets the residents of Del Pan and Fernando Rein Streets who were to be adversely affected by the construction of ED SA Extension to Roxas Boulevard along Del Pan - Fernando Rein Streets were duly notified of such proposed project. Petitioner herein was one of those notified Annex 1). It be conceded that the Cuneta Avenue line goes southward and outward (from the city center while the Del Pan Fernando Rein Streets line follows northward and inward direction. It must be stated that both lines, Cuneta Avenue and Del Pan Fernando Rein Streets lines, meet satisfactorily planning and design criteria and therefore are both acceptable. In selecting the Del Pan Fernando Rein Streets line the Government did not do so because it wanted to save the motel located along Cuneta Avenue but because it wanted to minimize the social impact factor or problem involved. 7 There is no question as to the right of the Republic of the Philippines to take private property for public use upon the payment of just compensation. Section 2, Article IV of the Constitution of the Philippines provides: "Private property shall not be taken for public use without just compensation." It is recognized, was, that the government may not capriciously or arbitrarily' choose what private property should be taken. In J. M. Tuazon & Co., Inc. vs. Land Tenure administration 31 SCRA, 413, 433, the Supreme Court said: For the purpose of obtaining a judicial declaration of nullity, it is enough if the respondents or defendants named be the government officials who would give operation and effect to official action allegedly tainted with unconstitutionality. Thus, where the statute assailed was sought to be enforced by the Land Tenure Administrative and the Solicitor General, the two officials may be made respondents in the action without need of including the Executive Secretary as a party in the action The failure to meet tile exacting standard of due process would likewise constitute a valid objection to the exercise of this congressional power. That was so intimated in the above leading Guido Case. There was an earlier pronouncement to that effect in a decision rendered long before the adoption of the Constitution under the previous organic law then in force, while the Philippines was still an unincorporated territory of the United States. It is obvious then that a landowner is covered by the mantle of protection due process affords. It is a mandate of reason. It frowns on arbitrariness, it is the antithesis of any governmental act that smacks of whim or caprice. It negates state power to act in an impressive manner. It is, as had been stressed so often, the embodiment of the sporting Idea of fair play. In that sense, it stands as a guaranty of justice. That is the standard that must be met by any government talk agency in the exercise of whatever competence is entrusted to it. As was so emphatically stressed by the present Chief Justice, 'Acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity, ... In the same case the Supreme Court concluded:

affected is the victim of partiality and prejudice. That the equal protection clause will not allow. (p. 436) In the instant case, it is a fact that the Department of Public Highways originally establish the extension of EDSA along Cuneta Avenue. It is to be presumed that the Department of Public Highways made studies before deciding on Cuneta Avenue. It is indeed odd why suddenly the proposed extension of EDSA to Roxas Boulevard was changed to go through Fernando Rein-Del Pan Streets which the Solicitor General con- cedes "... the Del Pan Fernando Rein Streets line follows northward and inward direction. While admit "that both lines, Cuneta Avenue and Del Pan Fernando Rein Streets lines, meet satisfactorily planning and design criteria and therefore are both acceptable ... the Solicitor General justifies the change to Del Pan Fernando Rein Streets on the ground that the government "wanted to the social impact factor or problem involved." 8 It is doubtful whether the extension of EDSA along Cuneta Avenue can be objected to on the ground of social impact. The improvements and buildings along Cuneta Avenue to be affected by the extension are mostly motels. Even granting,arguendo, that more people be affected, the Human Setlements Commission has suggested coordinative efforts of said Commission with the National Housing Authority and other government agencies in the relocation and resettlement of those adversely affected. 9 The Human Settlements Commission considered conditionality social impact and cost. The pertinent portion of its report reads: Comparison of Alignment 1 (Cuneta Fisher) and Alignment 2 (Del Pan Fernando Rein) based on the criteria of functionality, social impact and cost A. Functionality This issue has to do with the physical design of a highway, inclusive of engineering factors and management consideration From both engineering and traffic management viewpoints, it is incontestable that the straighter and shorter alignment is preferable to one which is not. Systematically and diagramatically, alignment 1 is straighter than alignment 2. In fact, Director Antonio Goco of the Department of Public Highways admitted that alignment 2 is three (3) meters longer than alignment 1. Furthermore, alignment 1 is definitely the contour conforming alignment to EDSA whereas alignment 2 affords a greater radius of unnatural curvature as it hooks slightly northward before finally joining with Roxas Boulevard. Besides, whichever alignment is adopted, there will be a need for a grade separator or interchange at the Roxas Boulevard junction. From the of highway design, it is imperative to have interchanges as far apart as possible to avoid traffic from slow down in negotiating the slope on the interchanges. Up north would be the future Buendia Avenue- Roxas Boulevard Interchange. Consequently, alignment 1 which is farther away from Buendia Avenue than alignment 2 is the better alignment from the viewpoint of the construction of the grade separator or interchange, a necessary corollary to the extension project. Finally, the choice of alignment 2 which is longer by three (3) meters than alignment 1 could have serious repercussions on our energy conservation drive and from the larger perspective of the national economy, considering that, by ad- statistical data, no less than fifty thousand (50,000) vehicles a day will have to traverse an extra three (3) meters. B. Social Impact

With due recognition then of the power 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 still a judicial question whether in the exercise of such competence, the party adversely

The following factual data which have a direct bearing on the issue of social impact were culled from the records of the case and the evidence presented during the public hearings:

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(1) Number of property owners: Alignment 1 Alignment 2 (2) Incidence of non-resident owner: Alignment 1 Alignment 2 (3) Number of actually affected residents: Alignment 1 Alignment 2 (4) Average income of residents: Alignment 2: Below P350 P350 P500 P 500 P 800 P800 Pl000 Over P1000 16 (28%) 24 (42%) 0 (14%) 5 (9%) 4 (7%) Alignment 2: Figures not available. It is evident from the foregoing figures that social impact is greater on the residents of alignment 1. C. Cost The resolution of the issue of right-of-way acquisition cost depends to a large extend on the nature of the properties to be affected and the relative value thereof. A comparison of alignment 1 and alignment 2 on these two points has produced the following results: (1) Nature and number of properties involved: Line I Line 2 547 290 (estimated) 25 (34.3%) 31 (63.3%) 73 49

es id e nti al C o m m er ci al In d us tri al C h ur ch E d uc ati o n al T O T A L

2 5

24

1 1

13

7 2

75

5 1

49

(2) Relative value of properties affected:

Lots L o t s Im pr ov em ent 46 L o t s Imp rov em ent s 34

Improve ments P9,300, 136

Total

L ot s

Align ment 1 Align ment 2

P5,92 8,680

P15,2 28,816

8,314,8 90

6,644 ,130

14,959 ,020

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Diffe renc e

P269, 796

Finally, the Hearing Board recommends that the Department of Public Highways conduct public hearings before undertaking on future expropriations of private properties for public use. Respectfully submitted to the Human Settlements Commission Commissioners for consideration, final disposition and endorsement thereof to His Excellency, the President of the Philippines. Makati, Metro Manila, July 4, 1977.
11

It is obvious from the immediately table that the right- of-way acquisition cost difference factor of the two alignment is only P269,196 and not P2M as alleged by the Department of Public Highways and P1.2M as claimed by the oppositors. Consequently, the cost difference factor between the two alignments is so minimal as to be practically nil in the consideration of the issues involved in this case. 10 After considering all the issues and factors, the Human Setlements Commission made the following recommendations: Weighing in the balance the issues and factors of necessity, functionality, impact, cost and property valuation as basis for scheme of compensation to be adopted in the instant case, the Hearing Board takes cognizance of the following points: 1. The EDSA extension to Roxas Boulevard is necessary and desirable from the strictly technical viewpoint and the overall perspective of the Metro Manila transport system. 2. The right-of-way acquisition cost difference factor is so minimal as to influence in any way the choice of either alignment as the extension of EDSA to Roxas Boulevard. 3. The negotiated sale approach to compensation as proposed should apply to a whichever alignment is selected. 4. The factor of functionality states strongly against the selection of alignment 2 while the factor of great social and economic impact bears grieviously on the residents of alignment 1. The course of the decision in this case consequently boils down to the soul-searching and heartrending choice between people on one hand and progress and development on the other. In deciding in favor of the latter, the Hearing Board is not unmindful that progress and development are carried out by the State precisely and ultimately for the benefit of its people and therefore, recommends the reverend of the extension project to alignment 1. However, before the Government, through its implementing agencies, particularly the Department of Public Highways, undertakes the actual step of appropriating properties on alignment I to pave the way for the extension the hearing Board recommends the following as absolute. binding and imperative preconditions: 1. The preparation, and ignore importantly, the execution of a comprehensive and detailed plan for the relocation and resettlement of the adversely and genuinely affected residents of alignment I which will necessitate the coordinative efforts of such agencies as the Human Settlements Commission, the National Housing Authority and other such governmental agencies. To be concrete, a self sufficient community or human settlement complete with infrastructure capture market, school, church and industries for employment should be set up to enable the affected residents of alignment 1 to maintain, their present social and economic standing. 2. The prompt payment of fair and just compensation through the negotiated sale approach. Footnotes

... From all the foregoing, the facts of record and recommendations of the Human Settlements Commission, it is clear that the choice of Fernando Rein Del Pan Streets as the line through which the Epifanio de los Santos Avenue should be extended to Roxas Boulevard is arbitrary and should not receive judicial approval. The respondent judge committed a grave abuse of discretion in allowing the Republic of the Philippines to take immediate possession of the properties sought to be expropriated. WHEREFORE, the petition for certiorari and prohibition is hereby granted. The order of June 14, 1979 authorizing the Republic of the Philippines to take or enter upon the possession of the properties sought to be condemned is set aside and the respondent Judge is permanently enjoined from taking any further action on Civil Case No. 7001-P, entitled"Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, etc." except to dismiss said case. SO ORDERED. Teehankee, Acting C.J., Makasiar, Guerrero, and Melencio-Herrera Herrera, JJ., concur.

1 Petition, Rollo, P. 7. 2 Petitioner's Memorandum. Rollo pp. 174-177. 3 Memorandum of Respondents, Rollo, p. 156. 4 Petition, Rollo p. 4. 5 Rollo, pp- 5-6. 6 Memorandum of Respondents, Rollo, pp. 161-162. 7 Ibid Rollo, pp. 165-166. 8 Ibid Rollo, p. 166. 9 Report and Recommendation, Rollo, pp. 125- 126.

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10 Ibid Rollo, pp. 120-123. 11 Ibid Rollo, pp. 125-126.

(3) The petitioners' right to equal protection of the law was violated. (4) The decrees are vague, defective, and patently erroneous. (5) The petitioners' properties are not proper subjects for expropriation considering their location and other relevant circumstances. On June 11, 1977, the President of the Philippines issued Letter of Instruction (LOI) No. 555 instituting a nationwide slum improvement and resettlement program (SIR). On the same date, the President also issued LOI No. 557, adopting slum improvement as a national housing policy. In compliance with LOI No. 555, the Governor of Metro Manila issued, on July 21, 1977, Executive Order No.6-77 adopting the Metropolitan Manila Zonal Improvement Program which included the properties known as the Tambunting Estate and the Sunog-Apog area in its priority list for a zonal improvement program (ZIP) because the findings of the representative of the City of Manila and the National Housing Authority (NHA) described these as blighted communities. On March 18, 1978, a fire razed almost the entire Tambunting Estate. Following this calamity, the President and the Metro Manila Governor made public announcement that the national government would acquire the property for the fire victims. The President also designated the NHA to negotiate with the owners of the property for the acquisition of the same. This, however, did not materialize as the negotiations for the purchase of the property failed. On December 22, 1978, the President issued Proclamation No. 1810 declaring all sites Identified by the Metro Manila local governments and approved by the Ministry of Human Settlements to be included in the ZIP upon proclamation of the President. The Tambunting Estate and the Sunog-Apog area were among the sites included. On January 28, 1980, the President issued the challenged Presidential Decrees Nos. 1669 and 1670 which respectively declared the Tambunting Estate and the Sunog-Apog area expropriated. Presidential Decree No. 1669, provides, among others: Section 1. The real properties known as the "Tambunting Estate" and covered by TCT Nos. 119059, 122450, 122459, 122452 and Lots Nos. 1- A, 1-C, 1-D, l-E, 1-F and 1-H of (LRC) Psd-230517 (Previously covered by TCT No. 119058) of the Register of Deeds of Manila with an area of 52,688.70 square meters, more or less are hereby declared expropriated. The National Housing Authority hereinafter referred to as the "Authority" is designated administrator of the National Government with authority to immediately take possession, control, disposition, with the power of demolition of the expropriated properties and their improvements and shall evolve and implement a comprehensive development plan for the condemned properties. xxx xxx xxx Section 6. Notwithstanding any provision of law or decree to the contrary and for the purpose of expropriating this property pegged at the -.market value determined by the City Assessor pursuant to Presidential Decree No. 76, as amended, particularly by Presidential Decree No. 1533 which is in force and in effect at the time of the issuance of this decree. In assessing the market value, the City Assessor pursuant consider existing

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-55166 May 2l, 1987 TIONGSON, married to CAYETANO TIONGSON, PACITA L. GO married to EDUARDO GO, ROBERTO LAPERAL III, MIGUEL SISON, PHILIP L. MANOTOK, MARIA TERESA L. MANOTOK, JOSE CLEMENTE MANOTOK, RAMON SEVERINO MANOTOK, JOSE MARIA MANOTOK and JESUS JUDE MANOTOK, JR., assisted by their father and judicial guardian, JESUS MANOTOK, MILAGROS V. MANOTOK, IGNACIO V. MANOTOK, JR., FELISA V. MANOTOK, MARY-ANN V. MANOTOK, MICHAEL V. MANOTOK, FAUSTO C. MANOTOK, SEVERINO MANOTOK III, and JESUS MANOTOK, petitioners, vs. NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES, respondents. No. L-55167 May 21,1987 PATRICIA L. TIONGSON, PATRICIA L. GO, assisted by her husband EDWARD GO, ROBERTO LAPERAL III, ELISA R. MANOTOK, JESUS R. MANOTOK, MIGUEL A. B. SISON, SEVERINO MANOTOK III, JOSE MARIA MANOTOK and JESUS MANOTOK, represented herein by their father and judicial guardian JESUS MANOTOK, JR., IGNACIO R. MANOTOK., and FAUSTO C. MANOTOK, petitioners, vs. NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES, respondents

GUTIERREZ, JR., J.: Before us are two petitions. The first one challenges the constitutionality of Presidential Decree No. 1669 which provides for the expropriation of the property known as the "Tambunting Estate" and the second challenges the constitutionality of Presidential Decree No.1670 which provides for the expropriation of the property along the Estero de Sunog-Apog. In both cases, the petitioners maintain that the two decrees are unconstitutional and should be declared null and void because: (1) They deprived the petitioners of their properties without due process of law. (2) The petitioners were denied to their right to just compensation

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conditions in the area notably, that no improvement has been undertaken on the land and that the land is squatted upon by resident families which should considerably depress the expropriation cost. Subject to the foregoing, the just compensation for the above property should not exceed a maximum of SEVENTEEN MILLION PESOS (Pl7,000,000.00) which shall be payable to the owners within a period of five (5) years in five (5) equal installments. Presidential Decree No. 1670, on the other hand, provides: Section 1. The real property along the Estero de Sunog-Apog in Tondo, Manila formerly consisting of Lots Nos 55-A, 55-B and 55-C, Block 2918 of the subdivision plan Psd-1 1746, covered by TCT Nos. 49286, 49287 and 49288, respectively, of the Registry of Deeds of Manila, and formerly owned by the Manotok Realty, Inc., with an area of 72,428.6 square meters, more or less, is hereby declared expropriated. The National Housing Authority hereinafter referred to as the 'Authority' is designated administrator of the National Government with authority to immediately take possession, control and disposition, with the power of demolition of the expropriated properties and their improvements and shall evolve and imagine implement a comprehensive development plan for the condemned properties. xxx xxx xxx Section 6. Notwithstanding any provision of law or decree to the contrary and for the purpose of expropriating this property pegged at the market value determined by the City Assessor pursuant to Presidential Decree No. 76, as amended, particularly by Presidential Decree No. 1533 which is in force and in effect at the time of the issuance of this decree. In assessing the market value, the City Assessor shall consider existing conditions in the area notably, that no improvement has been undertaken on the land and that the land is squatted upon by resident families which should considerably depress the expropriation cost. Subject to the foregoing, the just compensation for the above property should not exceed a maximum of EIGHT MILLION PESOS (P8,000,000.00), which shall be payable to the owners within a period of five (5) years in five equal installment. On April 4, 1980, the National Housing Authority, through its general-manager, wrote the Register of Deeds of Manila, furnishing it with a certified copy of P.D. Nos. 1669 and 1670 for registration, with the request that the certificates of title covering the properties in question be cancelled and new certificates of title be issued in the name of the Republic of the Philippines. However, the Register of Deeds in her letter to NHA's general-manager, requested the submission of the owner's copy of the certificates of title of the properties in question to enable her to implement the aforementioned decrees. Subsequently, petitioner Elisa R. Manotok, one of the owners of the properties to be expropriated, received from the NHA a letter informing her that the latter had deposited, on July 16, 1980, with the Philippine National Bank the total amount of P5,000,000.00 which included the amount of P3,400,000.00 representing the first annual installment for the Tambunting Estate pursuant to P.D. No. 1669; and another P5,000,000.00 which also included the amount of P1,600,000.00 representing the first annual installment for the SunogApog area under P.D. No. 1670. The petitioner was also informed that she was free to withdraw her share in the properties upon surrender by her of the titles pertaining to said properties and that if petitioner failed to avail herself of the said offer, the NHA would be constrained to take the necessary legal steps to implement the decrees.

On August 19, 1980, petitioner Elisa R. Manotok wrote a letter to the NHA alleging, inter alia, that the amounts of compensation for the expropriation of the properties of the petitioners as fixed in the decrees do not constitute the "just compensation" envisioned in the Constitution. She expressed veritable doubts about the constitutionality of the said decrees and informed the NHA that she did not believe that she was obliged to withdraw the amount of P5,000,000.00 or surrender her titles over the properties. In the meantime, some officials of the NHA circulated instructions to the tenants-occupants of the properties in dispute not to pay their rentals to the petitioners for their lease-occupancy of the properties in view of the passage of P.D. Nos. 1669 and 1670. Hence, the owners of the Tambunting Estate filed a petition to declare P.D. No. 1669 unconstitutional. The owners of the Sunog-Apog area also filed a similar petition attacking the constitutionality of P.D. No. 1670. On September 27, 1982, the lessees of the Tambunting Estate and the Sunog-Apog area filed a motion for leave to intervene together with their petition for intervention alleging that they are themselves owners of the buildings and houses built on the properties to be expropriated and as such, they are real parties-in-interest to the present petitions. The petitioners maintain that the Presidential Decrees providing for the direct expropriation of the properties in question violate their constitutional right to due process and equal protection of the law because by the mere passage of the said decrees their properties were automatically expropriated and they were immediately deprived of the ownership and possession thereof without being given the chance to oppose such expropriation or to contest the just compensation to which they are entitled. The petitioners argue that the government must first have filed a complaint with the proper court under Rule 67 of the Revised Rules of Court in order to fulfill the requirements of due process. 'They contend that the determination of just compensation should not have been vested solely with the City Assessor and that a maximum or fixed amount of compensation should not have been imposed by the said decrees. Petitioners likewise state that by providing for the maximum amount of just compensation and by directing the City Assessor to take into consideration the alleged existing conditions of the properties in question, namely: that no "improvement has been undertaken on the land and that the land is squatted upon by resident families which should considerably depress the expropriation costs," the City Assessor is forced to accept, as actual and existing conditions of the property, the foregoing statements in the decrees when in fact the Sunog-Apog area has been subdivided into subdivision lots and leased to the occupants thereof under contracts of lease, making them lessees and not squatters as assumed by Presidential Decree No. 1670. Moreover, each subdivision lot is surrounded by adobe walls constructed by the particular owner of the property: the houses were required to have septic tanks by the City Hall and the, owners themselves: there is a drainage system; and there are adequate water facilities. As far as the Tambunting Estate is concerned, the petitioners maintain that aside from the residential houses in the area, there are buildings and structures of strong materials on the lots fronting Rizal Avenue Extension, most of which are leased to proprietors of business establishments under long term contracts of lease which use the same for their furniture business from which they secure substantial income. The Government as represented by the Solicitor-General and the NHA, on the other hand, contends that the power of eminent domain is inherent in the State and when the legislature itself or the President through his law-making prerogatives exercises this power, the public use and public necessity of the expropriation, and the fixing of the just compensation become political in nature, and the courts must respect the decision of the law-making body, unless the legislative decision is clearly and evidently arbitrary, unreasonable, and devoid of logic and reason; and that all that is required is that just compensation be determined with due process of law which does not necessarily entail judicial process.

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The public respondents, further argue that since the Constitution lays down no procedure by which the authority to expropriate may be carried into effect, Rule 67 of the Revised Rules of Court which is invoked by the petitioners may be said to have been superseded by the challenged decrees insofar as they are applicable to the properties in question and, therefore, there is no need to follow the said rule for due process to be observed. Moreover, the public respondents maintain that it cannot be fairly said that the petitioners' valuations were ignored in fixing the ceiling amount of the properties in question because the only reason why the determination appeared unilateral was because said petitioners did not actually state any valuation in their sworn declaration of true market value of their respective properties, and as far as payment in installments is concerned, the same can be justified by the fact that the properties in question are only two of the four hundred and fifteen (415) slums and blighted areas in Metro Manila and two of the two hundred and fifty one (251) sites for ungrading under the ZIP and that to immediately acquire and upgrade all those sites would obviously entail millions and millions of pesos. The financial constraints, therefore, require a system of payment of just compensation. Thus, the respondent states that the payment of just compensation in installments did not arise out of ill will or the desire to discriminate. We start with fundamentals. The power of eminent domain is inherent in every state and the provisions in the Constitution pertaining to such power only serve to limit its exercise in order to protect the individual against whose property the power is sought to be enforced. We pointed out the constitutional limitations in the case of Republic vs. Juan (92 SCRA 26, 40): To begin with, it must be emphasized that plaintiff-appellee in this instant case is the Republic of the Philippines which is exercising its right of eminent domain inherent in it as a body sovereign. In the exercise of its sovereign right the State is not subject to any limitation other than those imposed by the Constitution which are: first, the taking must be for a public use; secondly, the payment of just compensation must be made: and thirdly, due process must be observed in the taking... The challenged decrees are uniquely unfair in the procedures adopted and the powers given to the respondent NHA. The Tambunting subdivision is summarily proclaimed a blighted area and directly expropriated by decree without the slightest semblance of a hearing or any proceeding whatsoever. The expropriation is instant and automatic to take effect immediately upon the signing of the decree. No deposit before taking is required under the decree. The P3,400,000.00 appropriated from the general fund is not a deposit but constitutes an installment payment for the property, the maximum price of which is fixed so as not to exceed P17,000,000.00. There is no provision for any interests to be paid on the unpaid installments spread out over a period of five years. Not only are the owners given absolutely no opportunity to contest the expropriation, plead their side, or question the amount of payments fixed by decree, but the decisions, rulings, orders, or resolutions of the NHA are expressly declared as beyond the reach of judicial review. An appeal may be made to the Office of the President but the courts are completely enjoined from any inquiry or participation whatsoever in the expropriation of the subdivision or its incidents. In some decisions promulgated before the February, 1986 political upheaval, this Court presumed the validity of the beautiful "whereases" in presidential decrees governing expropriations and legitimated takings of private property which, in normal times, would have been constitutionally suspect. There were then the avowed twin purposes of martial law to first quell the Communist rebellion and second to reform society. Thus, in Haguisan v. Emilia (131 SCRA 517) the Court sustained the contention that prior hearing is no longer necessary under P.D. No. 42 in ascertaining the value of the property to be expropriated and before the government may take possession. There was a disregard in the decree for Section 2 of Rule 67 which requires the court having jurisdiction over the proceedings to promptly ascertain and fix the

provisional value of the property for purposes of the initial taking or entry by the Government into the premises. In National Housing Authority v. Reyes (123 SCRA 245) the Court upheld the decrees which state that the basis for just compensation shall be the market value declared by the owner for tax purposes or such market value as determined by the government assessor, whichever is lower. Subsequent developments have shown that a disregard for basic liberties and the shortcut methods embodied in the decrees on expropriation do not achieve the desired results. Far from disappearing, squatter colonies and blighted areas have multiplied and proliferated. It appears that constitutionally suspect methods or authoritarian procedures cannot, be the basis for social justice. A program to alleviate problems of the urban poor which is well studied, adequately funded, genuinely sincere, and more solidly grounded on basic rights and democratic procedures is needed. We re-examine the decisions validating expropriations under martial law and apply established principles of justice and fairness which have been with us since the advent of constitutional government. We return to older and more sound precedents. The due process clause cannot be rendered nugatory everytime a specific decree or law orders the expropriation of somebody's property and provides its own peculiar manner of taking the same. Neither should the courts adopt a hands-off policy just because the public use has been ordained as existing by the decree or the just compensation has been fixed and determined beforehand by a statute. The case of Dohany v. Rogers, (74 L.ed. 904.'912, 281. U.S. 362-370) underscores the extent by which the due process clause guarantees protection from arbitrary exercise of the power of eminent domain. The due process clause does not guarantee to the citizen of a state any particular form or method of state procedure. Under it he may neither claim a right to trial by jury nor a right of appeal. Its requirements are satisfied if he has reasonable opportunity to be heard and to present his claim or defense, due regard being had to the nature of the proceeding and the character of the rights which may be affected by it. Reetz v. Michigan, 188 U.S. 505, 508, 47 L.ed. 563, 566, 23 Sup. Ct. Rep. 390; Missouri ex rel. Hurwitz v. North, 271 U.S. 40, 70 L.ed. 818, 46 Sup. Ct. Rep. 384: Bauman v. Ross, 167 U.S. 548, 593, 42 L.ed. 270, 289, 17 Sup. Ct. Rep. 966; A. Backus Jr. & Sons v. Fort Street Union Depot Co. 169 U.S. 569, 42 L. ed. 859, 18 Sup. Ct. Rep. 445. In other words, although due process does not always necessarily demand that a proceeding be had before a court of law, it still mandates some form of proceeding wherein notice and reasonable opportunity to be heard are given to the owner to protect his property rights. We agree with the public respondents that there are exceptional situations when, in the exercise of the power of eminent domain, the requirement of due process may not necessarily entail judicial process. But where it is alleged that in the taking of a person's property, his right to due process of law has been violated, the courts will have to step in and probe into such an alleged violation. Thus, certain portions of the decision in De Knecht v. Bautista, (100 SCRA 660, 666-667) state: There is no question as to the right of the Republic of the Philippines to take private property for public use upon the payment of just compensation. Section 2, Article IV of the Constitution of the Philippines provides: 'Private property shall not be taken for public use without just compensation.

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It is recognized, however, that the government may not capriciously or arbitrarily choose what private property should be taken. In J.M. Tuazon & Co., Inc. v. Land tenure Administration, 31 SCRA 413, 433, the Supreme Court said: xxx xxx xxx It is obvious then that a land-owner is covered by the mantle of protection due process affords. It is a mandate of reason. It frowns on arbitrariness, it is the antithesis of any governmental act that smacks of whim or caprice. It negates state power to act in an oppressive manner. It is, as had been stressed so often, the embodiment of the sporting Idea of fair play. In that sense, it stands as a guaranty of justice. 'That is the standard that must be met by any governmental agency in the exercise of whatever competence is entrusted to it As was so emphatically stressed by the present Chief Justice, 'Acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity... In the same case the Supreme Court concluded: With due recognition then of the power 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 still a judicial question whether in the exercise of such competence, the party adversely affected is the victim of partiality and prejudice, That the equal protection clause will not allow. (p. 436) The basis for the exercise of the power of eminent domain is necessity. This Court stated in City of Manila v. Chinese Community of Manila (40 Phil. 349) that "(t)he very foundation of the right to exercise eminent domain is a genuine necessity and that necessity must be of a public character. In City of Manila v. Arellano Law Colleges (85 Phil. 663), we reiterated that a necessity must exist for the taking of private property for the proposed uses and purposes but accepted the fact that modern decisions do not call for absolute necessity. It is enough if the condemnor can show a reasonable or practical necessity, which of course, varies with the time and peculiar circumstances of each case. In the instant petitions, there is no showing whatsoever as to why the properties involved were singled out for expropriation through decrees or what necessity impelled the particular choices or selections. In expropriations through legislation, there are, at least, debates in Congress open to the public, scrutiny by individual members of the legislature, and very often, public hearings before the statute is enacted. Congressional records can be examined. In these petitions, the decrees show no reasons whatsoever for the choice of the properties as housing projects. The anonymous adviser who drafted the decrees for the President's signature cannot be questioned as to any possible error or partiality, act of vengeance, or other personal motivations which may have led him to propose the direct expropriation with its onerous provisions. The Tambunting estate or at least the western half of the subdivision fronting Rizal Avenue Extension is valuable commercial property. It is located at the junction where three main city streets converge Rizal Avenue from downtown Manila, Jose Abad Santos Street from Binondo, and Aurora Boulevard leading to Retiro Street and other points in Quezon City. The Libiran Furniture Company, alone, which fronts the entrance to Jose Abad Santos Street is clearly a multi-million peso enterprise. It is a foregone conclusion that the favored squatters allowed to buy these choice lots would lose no time, once it is possible to do so, to either lease out or sell their lots to wealthy merchants even as they seek other places where they can set

up new squatter colonies. The public use and social justice ends stated in the whereas clauses of P.D. 1669 and P.D. 1670 would not be served thereby. The provision of P.D. 1669 which allows NHA, at its sole option, to put portions of the expropriated area to commercial use in order to defray the development costs of its housing projects cannot stand constitutional scrutiny. The Government, for instance, cannot expropriate the flourishing Makati commercial area in order to earn money that would finance housing projects all over the country. The leading case of Guido v. Rural Progress Administration (84 Phil. 847) may have been modified in some ways by the provisions of the new Constitution on agrarian and urban land reform and on housing. The principle of non-appropriation of private property for private purposes, however, remains. The legislature, according to the Guido case, may not take the property of one citizen and transfer it to another, even for a full compensation, when the public interest is not thereby promoted. The Government still has to prove that expropriation of commercial properties in order to lease them out also for commercial purposes would be "public use" under the Constitution. P.D. No. 1670 suffers from a similar infirmity. There is no showing how the President arrived at the conclusion that the Sunog-Apog area is a blighted community. The many pictures submitted as exhibits by the petitioners show a well-developed area subdivided into residential lots with either middle-income or upper class homes. There are no squatters. The provisions of the decree on the relocation of qualified squatter families and on the re-blocking and re-alignment of existing structures to allow the introduction of basic facilities and services have no basis in fact The area is well-developed with roads, drainage and sewer facilities, water connection to the Metropolitan Waterworks and Sewerage System electric connections to Manila Electric Company, and telephone connections to the Philippine Long Distance Telephone Company. There are many squatter colonies in Metro Manila in need of upgrading. The Government should have attended to them first. There is no showing for a need to demolish the existing valuable improvements in order to upgrade Sunog-Apog. After a careful examination of the questioned decrees, we find P.D. Nos. 1669 and 1670 to be violative of the petitioners' right to due process of law and, therefore, they must fail the test of constitutionality. The decrees, do not by themselves, provide for any form of hearing or procedure by which the petitioners can question the propriety of the expropriation of their properties or the reasonableness of the just compensation. Having failed to provide for a hearing, the Government should have filed an expropriation case under Rule 67 of the Revised Rules of Court but it did not do so. Obviously, it did not deem it necessary because of the enactment of the questioned decrees which rendered, by their very passage, any questions with regard to the expropriation of the properties, moot and academic. In effect, the properties, under the decrees were "automatically expropriated." This became more evident when the NHA wrote the Register of Deeds and requested her to cancel the certificate of titles of the petitioners, furnishing said Register of Deeds only with copies of the decrees to support its request. This is hardly the due process of law which the state is expected to observe when it exercises the power of eminent domain. The government states that there is no arbitrary determination of the fair market value of the property by the government assessors because if the owner is not satisfied with the assessor's action, he may within sixty (60) days appeal to the Board of Assessment Appeals of the province or city as the case may be and if said owner is still unsatisfied, he may appeal further to the Central Board of Assessment Appeals pursuant to P.D. No. 464. The Government argues that with this procedure, the due process requirement is fulfilled. We cannot sustain this argument.

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Presidential Decree No. 464, as amended, otherwise known as the Real Property Tax Code, provides for the procedure on how to contest assessments but does not deal with questions as to the propriety of the expropriation and the manner of payment of just compensation in the exercise of the power of eminent domain. We find this wholly unsatisfactory. It cannot in anyway substitute for the expropriation proceeding under Rule 67 of the Revised Rules of Court. Another infirmity from which the questioned decrees suffer is the determination of just compensation. Pursuant to P.D. 1533, the basis of the just compensation is the market value of the property "prior to the recommendation or decision of the appropriate Government Office to acquire the property." (see also Republic v. Santos, (1 41 SCRA 30, 35). In these petitions, a maximum amount of compensation was imposed by the decrees and these amounts were only a little more than the assessed value of the properties in 1978 when, according to the government, it decided to acquire said properties. The fixing of the maximum amounts of compensation and the bases thereof which are the assessed values of the properties in 1978 deprive the petitioner of the opportunity to prove a higher value because, the actual or symbolic taking of such properties occurred only in 1980 when the questioned decrees were promulgated. According to the government, the cut-off year must be 1978 because it was in this year that the government decided to acquire the properties and in the case of the Tambunting Estate, the President even made a public announcement that the government shall acquire the estate for the fire victims. The decision of the government to acquire a property through eminent domain should be made known to the property owner through a formal notice wherein a hearing or a judicial proceeding is contemplated as provided for in Rule 67 of the Rules of Court. This shall be the time of reckoning the value of the property for the purpose of just compensation. A television or news announcement or the mere fact of the property's inclusion in the Zonal Improvement Program (ZIP) cannot suffice because for the compensation to be just, it must approximate the value of the property at the time of its taking and the government can be said to have decided to acquire or take the property only after it has, at the least, commenced a proceeding, judicial or otherwise, for this purpose. In the following cases, we have upheld the determination of just compensation and the rationale behind it either at the time of the actual taking of the government or at the time of the judgment by the court, whichever came first. Municipality of Daet v. Court of Appeals, (93 SCRA 503, 506, 519): ...And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413, the Court, speaking thru now Chief Justice Fernando, reiterated the 'wen-settled (rule) that just compensation means the equivalent for the value of the property at the time of its taking. Anything beyond that is more and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity. xxx xxx xxx

We hold that the decision of the Court of Appeals fixing the market value of the property to be that obtaining, at least, as of the date of the rendition of the judgment on December 2, 1969 as prayed by private respondent, which the Court fixed at P200.00 per square meter is in conformity with doctrinal rulings hereinabove cited that the value should be fixed as of the time of the taking of the possession of the property because firstly, at the time judgment was rendered on December 2, 1969, petitioner had not actually taken possession of the property sought to be expropriated and secondly, We find the valuation determined by the Court of Appeals to be just, fair and reasonable. National Power Corporation v. Court of Appeals, (1 29 SCRA 665, 673): xxx xxx xxx (5) And most importantly,on the issue of just compensation, it is now settled doctrine, following the leading case of Alfonso v. Pasay City, (1,06 PhiL 1017 (1960)), that no determine due compensation for lands appropriated by the Government, the basis should be the price or value at the time it was taken from the owner and appropriated by the Government. The owner of property expropriated by the State is entitled to how much it was worth at the time of the taking. This has been clarified in Republic v. PNB (1 SCRA 957) 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 complainant, and that the latter should be the basis for the determination of the value, when the of the property involved coincides with or is subsequent to, the commencement of the proceedings. Indeed, otherwise, the provision of Rule 619, section 3, directing that compensation "be determined as of the date of the filing of the complaints" would never be operative. municipality of La Carlota v. The Spouses Baltazar, et al., 45 SCRA 235 (1972)). Furthermore, the so-called "conditions" of the properties should not be determined through a decree but must be shown in an appropriate proceeding in order to arrive at a just valuation of the property. In the case of Garcia v. Court of Appeals, (102 SCRA 597, 608) we ruled: ...Hence, in estimating the market value, all the capabilities of the property and all the uses to which it may be applied or for which it is adapted are to be considered and not merely the condition it is in at the time and the use to which it is then applied by the owner. All the facts as to the condition of the property and its surroundings, its improvements and capabilities may be shown and considered in estimating its value. In P.D. No. 76, P.D. No. 464, P.D. No. 794, and P.D. No. 1533, the basis for determining just compensation was fixed at the market value declared by the owner or the market value determined by the assessor, whichever is lower. P.D.s 1669 and 1670 go further. There is no mention of any market value declared by the owner. Sections 6 of the two decrees peg just compensation at the market value determined by the City Assessor. The City Assessor is warned by the decrees to "consider existing conditions in the area notably, that no improvement has been undertaken on the land and that the land is squatted upon by resident families which should considerably depress the expropriation costs."

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In other cases involving expropriations under P.D. Nos. 76, 464, 794, and 1533, this Court has decided to invalidate the mode of fixing just compensation under said decrees. (See Export Processing Zone Authority v. Hon. Ceferino E. Dulay, et al. G.R. No. 59603) With more reason should the method in P.D.s 1669 and 1670 be declared infirm. The market value stated by the city assessor alone cannot substitute for the court's judgment in expropriation proceedings. It is violative of the due process and the eminent domain provisions of the Constitution to deny to a property owner the opportunity to prove that the valuation made by a local assessor is wrong or prejudiced. The statements made in tax documents by the assessor may serve as one of the factors to be considered but they cannot exclude or prevail over a court determination made after expert commissioners have examined the property and all pertinent circumstances are taken into account and after the parties have had the opportunity to fully plead their cases before a competent and unbiased tribunal. To enjoin this Court by decree from looking into alleged violations of the due process, equal protection, and eminent domain clauses of the Constitution is impermissible encroachment on its independence and prerogatives. The maximum amounts, therefore, which were provided for in the questioned decrees cannot adequately reflect the value of the property and, in any case, should not be binding on the property owners for, as stated in the above cases, there are other factors to be taken into consideration. We, thus, find the questioned decrees to likewise transgress the petitioners' right to just compensation. Having violated the due process and just compensation guarantees, P. D. Nos. 1669 and 1670 are unconstitutional and void. WHEREFORE, the petitions in G.R. No. 55166 and G.R. No. 55167 are hereby GRANTED. Presidential Decree Numbers 1669 and 1670 which respectively proclaimed the Tambunting Estate and the Estero de SunogApog area expropriated, are declared unconstitutional and, therefore, null and void ab initio. SO ORDERED. Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur. Yap, J., is on leave.

This is in line with my concurring and dissenting opinion in the six-to-five decision in J.M. Tuason & Co., Inc. v. Land Tenure Administration 1 wherein the Congress through Republic Act No. 2616 "authorized the expropriation of the Tatalon Estate" comprising about 109 hectares in Quezon City for subdivision into small lots and conveyed at cost to individuals. I concurred with the tenuous majority's ruling there setting aside the lower court's ruling granting therein petitioner appellee's petition to prohibit respondents-appellees from instituting proceedings for expropriation of the "Tatalon Estate" as specifically authorized by R.A. 2616, with the result that the expropriation proceedings could then be properly filed but subject to such proper and valid objections and defenses to the action as petitioner-owner may raise. I dissented, however, from the majority ruling, insofar as it held that the constitutional power of Congress for the expropriation of lands is well-nigh all embracing and forecloses the courts from inquiring into the necessity for the taking of the property. I noted that "this is the first case where Congress has singled out a particular property for condemnation under the constitutional power conferred upon it. Does this square with the due process and equal protection clauses of the Constitution? Is the explanatory note of the bill later enacted as Republic Act 2616, without any evidence as to a hearing with the affected parties having been given the opportunity to be heard, and citing merely the population increase of Quezon City and the land-for-the-landless program sufficient compliance with these basic constitutional guarantees? Rather, does not the need for a more serious scrutiny as to the power of Congress to single out a particular piece of property for expropriation, acknowledged in the main opinion, call for judicial scrutiny, with all the acts in, as to the need for the expropriation for full opportunity to dispute the legislative appraisal of the matter?" 2 I added that there were prejudicial questions raised which could only be threshed out in trial court proceedings, (and not in the special civil action filed with the Court to set aside the trial court's declaring of unconstitutionality of the questioned Expropriation Act), viz., with therein petitioner maintaining that only 11.68% or less than 39 hectares of its Sta. Mesa Heights Subdivision (of which the "Tatalon Estate" formed part) remained unsold; that existing contractual rights acquired by vendors and purchasers of subdivided lots should be accorded the appropriate constitutional protection of non impairment; and that in view of the cardinal principle of eminent domain for payment of just compensation of the market value of the land "respondents may well consider that the objectives of the Act may be accomplished more expeditiously by a direct purchase of the available unsold lots for resale at cost to the remaining bona fide occupants in accordance with the Act's provisions or by extending financial assistance to enable them to purchase directly the unsold lots from petitioner. I do not see anything to be gained by respondents from the institution of expropriation proceedings, when petitioner-owner is actually selling the property in subdivided lots." 3 The judgment at bar now clearly overturns the majority ruling in Tuason that "the power 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" must be duly recognized, leaving only as "a judicial question whether in the exercise of such competence, the party adversely affected is the victim of partiality and prejudice. That the equal protection clause will not allow." 4 The Court now clearly rules that such singling out of properties to be expropriated by Presidential Decree as in the case at bar, or by act of the legislature as in Tuason, does not foreclose judicial scrutiny and determination as to whether such expropriation by legislative act transgresses the due process and equal protection, 5 and just compensation 6 guarantees of the Constitution. As we hold now expressly in consonance with my above-quoted separate opinion in Tuason: "To enjoin this Court by decree from looking into alleged violations of the due process, equal protection, and eminent domain clauses of the Constitution is impermissible encroachment on its independence and prerogatives." 7 As in all eminent domain proceedings, the State may not capriciously or arbitrarily singleout specific property for condemnation and must show the necessity of the taking for public use.

Separate Opinions

TEEHANKEE, C.J., concurring: The judgment of the Court invalidates Presidential Decrees numbered 1669 and 1670 which unilaterally proclaimed the Tambunting Estate and the Estero de Sunog-Apog area as expropriated without further recourse, for being violative of the due process and eminent domain provisions of the Constitution in the particulars stated in the opinion ably penned by Mr. Justice Gutierrez.

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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 87335 February 12, 1990 REPUBLIC OF THE PHILIPPINES, petitioner, vs. CRISTINA DE KNECHT AND THE COURT OF APPEALS, respondents. Villanueva, Talamayan, Nieva, Elegado, and Ante Law Offices for respondent Cristina de Knecht.

Court which had become final and in order to avoid further damage to same defendants who were denied possession of their properties. The Republic filed a manifestation on September 7, 1981 stating, among others, that it had no objection to the said motion to dismiss as it was in accordance with the aforestated decision. On September 2, 1983, the Republic filed a motion to dismiss said case due to the enactment of the Batas Pambansa Blg. 340 expropriating the same properties and for the same purpose. The lower court in an order of September 2, 1983 dismissed the case by reason of the enactment of the said law. The motion for reconsideration thereof was denied in the order of the lower court dated December 18, 1986. De Knecht appealed from said order to the Court of Appeals wherein in due course a decision was rendered on December 28, 1988, 2 the dispositive part of which reads as follows: PREMISES CONSIDERED, the order appealed from is hereby SET ASIDE. As prayed for in the appellant's brief another Order is hereby issued dismissing the expropriation proceedings (Civil Case No. 51078) before the lower court on the ground that the choice of Fernando Rein-Del Pan Streets as the line through which the Epifanio de los Santos Avenue should be extended is arbitrary and should not receive judicial approval. No pronouncement as to Costs. 3 Hence the Republic filed that herein petition for review of the A aforestated decision whereby the following issues were raised: I WHETHER OR NOT THE ENACTMENT OF BATAS PAMBANSA BLG. 340 IS THE PROPER GROUND FOR THE DISMISSAL OF THE EXPROPRIATION CASE. (PROPERLY PUT, WHETHER OR NOT THE LOWER COURT COMMITTED GRAVE ABUSE OF DIS CRETION IN DISMISSING CIVIL CASE NO. 7001-P UPON JUDICIAL NOTICE OF B.P. BLG. 340). II WHETHER OR NOT THE DPWH'S "CHOICE" OF LAND TO BE EXPROPRIATED IS STILL AN ISSUE UNDER THE CIRCUMSTANCES, SAID "CHOICE" HAVING BEEN SUPPLANTED BY THE LEGISLATURE'S CHOICE. III WHETHER OR NOT THE LAW OF THE CASE THEORY SHOULD BE APPLIED TO THE CASE AT BAR. 4 The petition is impressed with merit. There is no question that as early as 1977, pursuant to the Revised Administrative Code, the national government, through the Department of Public Works and Highways began work on what was to be the westward extension of Epifanio de los Santos Avenue (EDSA) outfall (or outlet) of the Manila and suburbs flood control and drainage project and the Estero Tripa de Gallina. These projects were aimed at: (1) easing traffic congestion in the Baclaran and outlying areas; (2) controlling flood by the construction of the outlet for the Estero Tripa de Gallina (which drains the area of Marikina, Pasay, Manila and Paranaque); and (3) thus completing the Manila Flood and Control and Drainage Project.

GANCAYCO, J.: The issue posed in this case is whether an expropriation proceeding that was determined by a final judgment of this Court may be the subject of a subsequent legislation for expropriation. On February 20, 1979 the Republic of the Philippines filed in the Court of First Instance (CFI) of Rizal in Pasay City an expropriation proceedings against the owners of the houses standing along Fernando Rein-Del Pan streets among them Cristina De Knecht (de Knecht for short) together with Concepcion Cabarrus, and some fifteen other defendants, docketed as Civil Case No. 7001-P. On March 19, 1979 de Knecht filed a motion to dismiss alleging lack of jurisdiction, pendency of appeal with the President of the Philippines, prematureness of complaint and arbitrary and erroneous valuation of the properties. On March 29, 1979 de Knecht filed an ex parte urgent motion for the issuance by the trial court of a restraining order to restrain the Republic from proceeding with the taking of immediate possession and control of the property sought to be condemned. In June, 1979 the Republic filed a motion for the issuance of a writ of possession of the property to be expropriated on the ground that it had made the required deposit with the Philippine National Bank (PNB) of 10% of the amount of compensation stated in the complaint. In an order dated June 14, 1979 the lower court issued a writ of possession authorizing the Republic to enter into and take possession of the properties sought to be condemned, and created a Committee of three to determine the just compensation for the lands involved in the proceedings. On July 16, 1979 de Knecht filed with this Court a petition for certiorari and prohibition docketed as G.R. No. L-51078 and directed against the order of the lower court dated June 14, 1979 praying that the respondent be commanded to desist from further proceeding in the expropriation action and from implementing said order. On October 30, 1980 this Court rendered a decision, the dispositive part of which reads as follows: WHEREFORE, the petition for certiorari and prohibition is hereby granted. The order of June 14, 1979 authorizing the Republic of the Philippines to take c enter upon the possession of the properties sought to be condemned is set aside and the respondent Judge is permanently enjoined from taking any further action on Civil Case No. 7001-P, entitled 'Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, et al.'except to dismiss said case. 1 On August 8, 1981 defendants Maria Del Carmen Roxas Vda. de Elizalde, Francisco Elizalde and Antonio Roxas moved to dismiss the expropriation action in compliance with the dispositive portion of the aforesaid decision of this

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So the petitioner acquired the needed properties through negotiated purchase starting with the lands from Taft Avenue up to Roxas Boulevard including the lands in Fernando Rein-Del Pan streets. It acquired through negotiated purchases about 80 to 85 percent of the lands involved in the project whose owners did not raise any objection as to arbitrariness on the choice of the project and of the route. It is only with respect to the remaining 10 to 15 percent along the route that the petitioner cannot negotiate through a sales agreement with a few land owners, including de Knecht whose holding is hardly 5% of the whole route area. Thus, as above related on February 20, 1979 the petitioner filed the expropriation proceedings in the Court of First Instance. There is no question that in the decision of this Court dated October 30, 1980 in De Knecht vs. Bautista, G.R. No. L51078, this Court held that the "choice of the Fernando Rein-Del Pan streets as the line through which the EDSA should be extended to Roxas Boulevard is arbitrary and should not receive judicial approval." 5 It is based on the recommendation of the Human Settlements Commission that the choice of Cuneta street as the line of the extension will minimize the social impact factor as the buildings and improvement therein are mostly motels. 6 In view of the said finding, this Court set aside the order of the trial court dated June 14, 1979 authorizing the Republic of the Philippines to take possession of the properties sought to be condemned and enjoined the respondent judge from taking any further action in the case except to dismiss the same. Said decision having become final no action was taken by the lower court on the said directive of this Court to dismiss the case. Subsequently B.P. Blg. 340 was enacted by the Batasang Pambansa on February 17, 1983. On the basis of said law petitioner filed a motion to dismiss the case before the trial court and this was granted. On appeal by de Knecht to the Court of Appeals the appellate court held that the decision of the Supreme Court having become final, the petitioner's right as determined therein should no longer be disturbed and that the same has become the law of the case between the parties involved. Thus, the appellate court set aside the questioned order of the trial court and issued another order dismissing the expropriation proceedings before the lower court pursuant to the ruling in De Knecht case. While it is true that said final judgment of this Court on the subject becomes the law of the case between the parties, it is equally true that the right of the petitioner to take private properties for public use upon the payment of the just compensation is so provided in the Constitution and our laws. 7 Such expropriation proceedings 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. 8 When on February 17, 1983 the Batasang Pambansa passed B.P. Blg. 340 expropriating the very properties subject of the present proceedings, and for the same purpose, it appears that it was based on supervening events that occurred after the decision of this Court was rendered in De Knecht in 1980 justifying the expropriation through the Fernando Rein-Del Pan Streets. The social impact factor which persuaded the Court to consider this extension to be arbitrary had disappeared. All residents in the area have been relocated and duly compensated. Eighty percent of the EDSA outfall and 30% of the EDSA extension had been completed. Only private respondent remains as the solitary obstacle to this project that will solve not only the drainage and flood control problem but also minimize the traffic bottleneck in the area. The Solicitor General summarizing the situation said The construction and completion of the Metro Manila Flood Control and Drainage Project and the EDSA extension are essential to alleviate the worsening traffic problem in the Baclaran and Pasay City areas and the perennial flood problems. Judicial notice may be taken that these problems bedevil life and property not only in the areas directly affected but also in areas much beyond. Batas Pambansa Blg. 340 was enacted to hasten 'The Project' and thus solve these

problems, and its implementation has resulted so far in an 80% completion of the EDSA outfall and a 30% completion of the EDSA extension, all part of 'The Project'. This instant case stands in the way of the final solution of the above-mentioned problems, solely because the single piece of property I occupied' by De Knecht, although already expropriated under B.P. Blg. 340, is the only parcel of land where Government engineers could not enter due to the 'armed' resistance offered by De Knecht, guarded and surrounded as the lot is perennially by De Knecht's fierce private security guards. It may thus be said that De Knecht, without any more legal interest in the land, single-handedly stands in the way of the completion of 'The Project' essential to the progress of Metro Manila and surrounding areas. Without the property she persists in occupying and without any bloodletting, the EDSA outfall construction on both sides of the said property cannot be joined together, and the flood waters of Pasay, Paraaque and Marikina which flow through the Estero Tripa de Gallina will continue to have no way or outlet that could drain into Manila Bay. Without said property, the EDSA extension, already 30% completed, can in no way be finished, and traffic will continue to clog and jam the intersections of EDSA and Taft Avenue in Baclaran and pile up along the airport roads. In sum, even in the face of BP340, De Knecht holds the Legislative sovereign will and choice inutile. 9 The Court finds justification in proceeding with the said expropriation proceedings through the Fernando Rein-Del Pan streets from ESDA to Roxas Boulevard due to the aforestated supervening events after the rendition of the decision of this Court in De Knecht. B.P. Blg. 340 therefore effectively superseded the aforesaid final and executory decision of this Court. And the trial court committed no grave abuse of discretion in dismissing the case pending before it on the ground of the enactment of B.P. Blg. 340. Moreover, the said decision, is no obstacle to the legislative arm of the Government in thereafter (over two years later in this case) making its own independent assessment of the circumstances then prevailing as to the propriety of undertaking the expropriation of the 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 B.P. Blg. 340. Thus the anterior decision of this Court must yield to this subsequent legislative flat. WHEREFORE, the petition is hereby GRANTED and the questioned decision of the Court of Appeals dated December 28, 1988 and its resolution dated March 9, 1989 are hereby REVERSED and SET ASIDE and the order of Branch III of the then Court of First Instance of Rizal in Pasay City in Civil Case No. 7001-P dated September 2, 1983 is hereby reinstated without pronouncement as to costs. SO ORDERED. Narvasa, Grio-Aquino and Medialdea, JJ., concur.

Separate Opinions

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CRUZ, J., concurring: While the ponencia is plain enough, I wish to make it even plainer that B.P. Blg. 340 is not a legislative reversal of our finding in De Knecht v. Bautista, 100 SCRA 660, that the expropriation of the petitioner's property was arbitrary. As Justice Gancayco clearly points out, supervening events have changed the factual basis of that decision to justify the subsequent enactment of the statute. If we are sustaining that legislation, it is not because we concede that the lawmakers can nullify the findings of the Court in the exercise of its discretion. It is simply because we ourselves have found that under the changed situation, the present expropriation is no longer arbitrary. I must add that this decision is not a reversal either of the original De Knecht case, which was decided under a different set of facts.

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