Supreme Court: Eusebio N, Rodolfo N., All Surnamed Aguilar, Defendants." Petitioner Sought To Expropriate Three

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 137152
January 29, 2001
CITY OF MANDALUYONG, petitioner,

vs.
ANTONIO N., FRANCISCO N., THELMA N., EUSEBIO N., RODOLFO N., all surnamed AGUILAR,
respondents.
PUNO, J.:
This is a petition for review under Rule 45 of the Rules of Court of the Orders dated September 17,
1998 and December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City 1 dismissing the
petitioner's Amended Complaint in SCA No. 1427 for expropriation of two (2) parcels of land in
Mandaluyong City. 1wphi1.nt
The antecedent facts are as follows:
On August 4, 1997, petitioner filed with the Regional Trial Court, Branch 168, Pasig City a complaint
for expropriation entitled "City of Mandaluyong, plaintiff v. Antonio N., Francisco N, Thelma N,
Eusebio N, Rodolfo N., all surnamed Aguilar, defendants." Petitioner sought to expropriate three (3)
adjoining parcels of land with an aggregate area of 1,847 square meters registered under Transfer
Certificates of Title Nos. 59780, 63766 and 63767 in the names of the defendants, herein
respondents, located at 9 de Febrero Street, Barangay Mauwag, City of Mandaluyong; on a portion of
the 3 lots, respondents constructed residential houses several decades ago which they had since
leased out to tenants until the present; on the vacant portion of the lots, other families constructed
residential structures which they likewise occupied; in 1983, the lots were classified by Resolution No.
125 of the Board of the Housing and Urban Development Coordinating Council as an Area for Priority
Development for urban land reform under Proclamation Nos. 1967 and 2284 of then President
Marcos; as a result of this classification, the tenants and occupants of the lots offered to purchase the
land from respondents, but the latter refused to sell; on November 7, 1996, the Sangguniang
Panlungsod of petitioner, upon petition of the Kapitbisig, an association of tenants and occupants of
the subject land, adopted Resolution No. 516, Series of 1996 authorizing Mayor Benjamin Abalos of
the City of Mandaluyong to initiate action for the expropriation of the subject lots and construction of a
medium-rise condominium for qualified occupants of the land; on January 10, 1996, Mayor Abalos
sent a letter to respondents offering to purchase the said property at P3,000.00 per square meter;
respondents did not answer the letter. Petitioner thus prayed for the expropriation of the said lots and
the fixing of just compensation at the fair market value of P3,000.00 per square meter. 2
In their answer, respondents, except Eusebio N. Aguilar who died in 1995, denied having received a
copy of Mayor Abalos' offer to purchase their lots. They alleged that the expropriation of their land is
arbitrary and capricious, and is not for a public purpose; the subject lots are their only real property
and are too small for expropriation, while petitioner has several properties inventoried for socialized
housing; the fair market value of P3,000.00 per square meter is arbitrary because the zonal valuation
set by the Bureau of Internal Revenue is P7,000.00 per square meter. As counterclaim, respondents
prayed for damages of P21 million.3
Respondents filed a "Motion for Preliminary Hearing" claiming that the defenses alleged in their
Answer are valid grounds for dismissal of the complaint for lack of jurisdiction over the person of the
defendants and lack of cause of action. Respondents prayed that the affirmative defenses be set for
preliminary hearing and that the complaint be dismissed. 4 Petitioner replied.
On November 5, 1997, petitioner filed an Amended Complaint and named as an additional defendant
Virginia N. Aguilar and, at the same time, substituted Eusebio Aguilar with his heirs. Petitioner also
1 | Constitutional Law I
excluded from expropriation TCT No. 59870 and thereby reduced the area sought to be expropriated
from three (3) parcels of land to two (2) parcels totalling 1,636 square meters under TCT Nos. 63766
and 63767.5
The Amended Complaint was admitted by the trial court on December 18, 1997. Respondents, who,
with the exception of Virginia Aguilar and the Heirs of Eusebio Aguilar had yet to be served with
summons and copies of the Amended Complaint, filed a "Manifestation and Motion" adopting their
"Answer with Counterclaim" and "Motion for Preliminary Hearing" as their answer to the Amended
Complaint.6
The motion was granted. At the hearing of February 25, 1998, respondents presented Antonio Aguilar
who testified and identified several documentary evidence. Petitioner did not present any evidence.
Thereafter, both parties filed their respective memoranda. 7
On September 17, 1998, the trial court issued an order dismissing the Amended Complaint after
declaring respondents as "small property owners" whose land is exempt from expropriation under
Republic Act No. 7279. The court also found that the expropriation was not for a public purpose for
petitioner's failure to present any evidence that the intended beneficiaries of the expropriation are
landless and homeless residents of Mandaluyong. The court thus disposed of as follows:
"WHEREFORE, the Amended Complaint is hereby ordered dismissed without pronouncement
as to cost.
SO ORDERED."8
Petitioner moved for reconsideration. On December 29, 1998, the court denied the motion. Hence this
petition.
Petitioner claims that the trial court erred
"IN UPHOLDING RESPONDENT'S CONTENTION THAT THEY QUALIFY AS SMALL
PROPERTY OWNERS AND ARE THUS EXEMPT FROM EXPROPRIATION." 9
Petitioner mainly claims that the size of the lots in litigation does not exempt the same from
expropriation in view of the fact that the said lots have been declared to be within the Area for Priority
Development (APD) No. 5 of Mandaluyong by virtue of Proclamation No. 1967, as amended by
Proclamation No. 2284 in relation to Presidential Decree No. 1517. 10 This declaration allegedly
authorizes petitioner to expropriate the property, ipso facto, regardless of the area of the land.
Presidential Decree (P.D.) No. 1517, the Urban Land Reform Act, was issued by then President
Marcos in 1978. The decree adopted as a State policy the liberation of human communities from
blight, congestion and hazard, and promotion of their development and modernization, the optimum
use of land as a national resource for public welfare. 11 Pursuant to this law, Proclamation No. 1893
was issued in 1979 declaring the entire Metro Manila as Urban Land Reform Zone for purposes of
urban land reform. This was amended in 1980 by Proclamation No. 1967 and in 1983 by
Proclamation No. 2284 which identified and specified 245 sites in Metro Manila as Areas for Priority
Development and Urban Land Reform Zones.
In 1992, the Congress of the Philippines passed Republic Act No. 7279, the "Urban Development and
Housing Act of 1992." The law lays down as a policy that the state, in cooperation with the private
sector, undertake a comprehensive and continuing Urban Development and Housing Program; uplift
the conditions of the underprivileged and homeless citizens in urban, areas and resettlement areas by
making available to them decent housing at affordable cost, basic services and employment
opportunities and provide for the rational use and development of urban land to bring about, among
others, equitable utilization of residential lands; encourage more effective people's participation in the
urban development process and improve the capability of local government units in undertaking
urban development and housing programs and projects. 12 Towards this end, all city and municipal
governments are mandated to conduct an inventory of all lands and improvements within their
respective localities, and in coordination with the National Housing Authority, the Housing and Land
Use Regulatory Board, the National Mapping Resource Information Authority, and the Land
Management Bureau, identify lands for socialized housing and resettlement areas for the immediate
and future needs of the underprivileged and homeless in the urban areas, acquire the lands, and
dispose of said lands to the beneficiaries of the program. 13
The acquisition of lands for socialized housing is governed by several provisions in the law. Section 9
of R.A. 7279 provides:
"Sec. 9. Priorities in the Acquisition of Land. Lands for socialized housing shall be acquired
in the following order:
(a) Those owned by the Government or any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations and their subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas for Priority Development, Zonal Improvement
Program sites, and Slum Improvement and Resettlement Program sites which have not
yet been acquired;
(e) Bagong Lipunan Improvement of Sites and Services or BLISS Sites which have not
yet been acquired;
(f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to the beneficiaries,
the priorities mentioned in this section shall not apply. The local government units shall give
budgetary priority to on-site development of government lands."
Lands for socialized housing are to be acquired in the following order: (1) government lands; (2)
alienable lands of the public domain; (3) unregistered or abandoned or idle lands; (4) lands within the
declared Areas for Priority Development (APD), Zonal Improvement Program (ZIP) sites, Slum
Improvement and Resettlement (SIR) sites which have not yet been acquired; (5) BLISS sites which
have not yet been acquired; and (6) privately-owned lands.
There is no dispute that the two lots in litigation are privately-owned and therefore last in the order of
priority acquisition. However, the law also provides that lands within the declared APD's which have
not yet been acquired by the government are fourth in the order of priority. According to petitioner,
since the subject lots lie within the declared APD, this fact mandates that the lots be given priority in
acquisition.14
Section 9, however, is not a single provision that can be read separate from the other provisions of
the law. It must be read together with Section 10 of R.A. 7279 which also provides:
"Section 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this
Act shall include, among others, community mortgage, land swapping, land assembly or
consolidation, land banking, donation to the Government, joint-venture agreement, negotiated
purchase, and expropriation: Provided, however, That expropriation shall be resorted to
only when other modes of acquisition have been exhausted: Provided, further, That
where expropriation is resorted to, parcels of land owned by small property owners
shall be exempted for purposes of this Act: Provided, finally, That abandoned property, as
herein defined, shall be reverted and escheated to the State in a proceeding analogous to the
procedure laid down in Rule 91 of the Rules of Court. 15
For the purposes of socialized housing, government-owned and foreclosed properties shall be
acquired by the local government units, or by the National Housing Authority primarily through
negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the
land shall be given the right of first refusal."
Lands for socialized housing under R.A. 7279 are to be acquired in several modes. Among these
modes are the following: (1) community mortgage; (2) land swapping, (3) land assembly or
consolidation; (4) land banking; (5) donation to the government; (6) joint venture agreement; (7)
negotiated purchase; and (8) expropriation. The mode of expropriation is subject to two conditions:
(a) it shall be resorted to only when the other modes of acquisition have been exhausted; (b) parcels
of land owned by small property owners are exempt from such acquisition.
Section 9 of R.A. 7279 speaks of priorities in the acquisition of lands. It enumerates the type of lands
to be acquired and the heirarchy in their acquisition. Section 10 deals with the modes of land
acquisition or the process of acquiring lands for socialized housing. These are two different things.
They mean that the type of lands that may be acquired in the order of priority in Section 9 are
to be acquired only in the modes authorized under Section 10. The acquisition of the lands in the
priority list must be made subject to the modes and conditions set forth in the next provision. In other
words, land that lies within the APD, such as in the instant case, may be acquired only in the modes
under, and subject to the conditions of, Section 10.
Petitioner claims that it had faithfully observed the different modes of land acquisition for socialized
housing under R.A. 7279 and adhered to the priorities in the acquisition for socialized housing under
said law.16 It, however, did not state with particularity whether it exhausted the other modes of
acquisition in Section 9 of the law before it decided to expropriate the subject lots. The law states
"expropriation shall be resorted to when other modes of acquisition have been exhausted." Petitioner
alleged only one mode of acquisition, i.e., by negotiated purchase. Petitioner, through the City Mayor,
tried to purchase the lots from respondents but the latter refused to sell. 17 As to the other modes of
acquisition, no mention has been made. Not even Resolution No. 516, Series of 1996 of the
Sangguniang Panlungsod authorizing the Mayor of Mandaluyong to effect the expropriation of the
subject property states whether the city government tried to acquire the same by community
mortgage, land swapping, land assembly or consolidation, land banking, donation to the government,
or joint venture agreement under Section 9 of the law.
Section 9 also exempts from expropriation parcels of land owned by small property owners. 18
Petitioner argues that the exercise of the power of eminent domain is not anymore conditioned on the
size of the land sought to be expropriated. 19 By the expanded notion of public use, present
jurisprudence has established the concept that expropriation is not anymore confined to the vast
tracts of land and landed estates, but also covers small parcels of land. 20 That only a few could
actually benefit from the expropriation of the property does not diminish its public use character. 21 It
simply is not possible to provide, in one instance, land and shelter for all who need them. 22
While we adhere to the expanded notion of public use, the passage of R.A. No. 7279, the "Urban
Development and Housing Act of 1992" introduced a limitation on the size of the land sought to be
expropriated for socialized housing. The law expressly exempted "small property owners" from
expropriation of their land for urban land reform. R.A. No. 7279 originated as Senate Bill No. 234
authored by Senator Joey Lina 23 and House Bill No. 34310. Senate Bill No. 234 then provided that
one of those lands not covered by the urban land reform and housing program was "land actually
used by small property owners within the just and equitable retention limit as provided under this
Act."24 "Small property owners" were defined in Senate Bill No. 234 as:
"4. Small Property Owners are those whose rights are protected under Section 9, Article XIII
of the Constitution of the Philippines, who own small parcels of land within the fair and just
retention limit provided under this Act and which are adequate to meet the reasonable needs of
the small property owner's family and their means of livelihood. 25
The exemption from expropriation of lands of small-property owners was never questioned on the
Senate floor.26 This exemption, although with a modified definition, was actually retained in the
consolidation of Senate Bill No. 234 and House Bill No. 34310 which became R.A. No. 7279. 27
The question now is whether respondents qualify as "small property owners" as defined in Section 3
(q) of R.A. 7279. Section 3 (q) provides:
"Section 3 x x x (q). "Small property owners" refers to those whose only real property consists
of residential lands not exceeding three hundred square meters (300 sq.m.) in highly urbanized
cities and eight hundred square meters (800 sq.m.) in other urban areas."
"Small-property owners" are defined by two elements: (1) those owners of real property whose
property consists of residential lands with an area of not more than 300 square meters in highly
urbanized cities and 800 square meters in other urban areas; and (2) that they do not own real
property other than the same.
The case at bar involves two (2) residential lots in Mandaluyong City, a highly urbanized city. The lot
under TCT No. 63766 is 687 square meters in area and the second under TCT No. 63767 is 949
square meters, both totalling 1,636 square meters in area. TCT No. 63766 was issued in the names
of herein five (5) respondents, viz:
"FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR,
JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita
Puig; all of legal age, Filipinos."28
TCT No. 63767 was issued in the names of the five (5) respondents plus Virginia Aguilar, thus:
"FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR,
JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita
Puig; and VIRGINIA N. AGUILAR, single, all of legal age, Filipinos." 29
Respondent Antonio Aguilar testified that he and the other registered owners are all siblings who
inherited the subject property by intestate succession from their parents. 30 Their father died in 1945
and their mother in 1976.31 Both TCT's were issued in the siblings' names on September 2, 1987. 31 In
1986, however, the siblings agreed to extrajudicially partition the lots among themselves, but no
action was taken by them to this end. It was only eleven (11) years later, on November 28, 1997 that
a survey of the two lots was made 33 and on February 10, 1998, a consolidation subdivision plan was
approved by the Lands Management Service of the Department of Environment and Natural
Resources.34 The co-owners signed a Partition Agreement on February 24, 1998 35 and on May 21,
1998, TCT Nos. 63766 and 63767 were cancelled and new titles issued in the names of the individual
owners pursuant to the Partition Agreement.
Petitioner argues that the consolidation of the subject lots and their partition was made more than six
(6) months after the complaint for expropriation was filed on August 4, 1997, hence, the partition was
made in bad faith, for the purpose of circumventing the provisions of R.A. 7279. 36
At the time of filing of the complaint for expropriation, the lots subject of this case were owned in
common by respondents; Under a co-ownership, the ownership of an undivided thing or right belongs
to different persons.37 During the existence of the co-ownership, no individual can claim title to any
definite portion of the community property until the partition thereof; and prior to the partition, all that
the co-owner has is an ideal or abstract quota or proportionate share in the entire land or thing. 38
Article 493 of the Civil Code however provides that:
"Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners shall be limited to the portion which
may be allotted to him in the division upon termination of the co-ownership. 39
Before partition in a co-ownership, every co-owner has the absolute ownership of his undivided
interest in the common property. The co-owner is free to alienate, assign or mortgage his interest,
except as to purely personal rights. 40 He may also validly lease his undivided interest to a third party
independently of the other co-owners. 41 The effect of any such transfer is limited to the portion which
may be awarded to him upon the partition of the property.42
Article 493 therefore gives the owner of an undivided interest in the property the right to freely sell
and dispose of his undivided interest. 43 The co-owner, however, has no right to sell or alienate a
concrete specific or determinate part of the thing owned in common, because his right over the thing
is represented by a quota or ideal portion without any physical adjudication. 44 If the co-owner sells a
concrete portion, this, nonetheless, does not render the sale void. Such a sale affects only his own
share, subject to the results of the partition but not those of the other co-owners who did not consent
to the sale.45
In the instant case, the titles to the subject lots were issued in respondents' names as co-owners in
1987ten (10) years before the expropriation case was filed in 1997. As co-owners, all that the
respondents had was an ideal or abstract quota or proportionate share in the lots. This, however, did
not mean that they could not separately exercise any rights over the lots. Each respondent had the
full ownership of his undivided interest in the property. He could freely sell or dispose of his interest
independently of the other co-owners. And this interest could have even been attached by his
creditors.46 The partition in 1998, six (6) months after the filing of the expropriation case, terminated
the co-ownership by converting into certain and definite parts the respective undivided shares of the
co-owners.47 The subject property is not a thing essentially indivisible. The rights of the co-owners to
have the property partitioned and their share in the same delivered to them cannot be questioned for
"[n]o co-owner shall be obliged to remain in the co-ownership." 48 The partition was merely a
necessary incident of the co-ownership; 49 and absent any evidence to the contrary, this partition is
presumed to have been done in good faith.
Upon partition, four (4) co-owners, namely, Francisco, Thelma, Rodolfo and Antonio Aguilar each had
a share of 300 square meters under TCT Nos. 13849, 13852, 13850, 13851. 50 Eusebio Aguilar's
share was 347 square meters under TCT No. 13853 51 while Virginia Aguilar's was 89 square meters
under TCT No. 13854.52
It is noted that Virginia Aguilar, although granted 89 square meters only of the subject lots, is, at the
same time, the sole registered owner of TCT No. 59780, one of the three (3) titles initially sought to
be expropriated in the original complaint. TCT No. 59780, with a land area of 211 square meters, was
dropped in the amended complaint. Eusebio Aguilar was granted 347 square meters, which is 47
square meters more than the maximum of 300 square meters set by R.A. 7279 for small property
owners. In TCT No. 13853, Eusebio's title, however, appears the following annotation:
"... subject to x x x, and to the prov. of Sec. 4 Rule 74 of the Rules of Court with respect to the
inheritance left by the deceased Eusebio N. Aguilar." 53
Eusebio died on March 23, 1995, 54 and, according to Antonio's testimony, the former was survived by
five (5) children.55 Where there are several co-owners, and some of them die, the heirs of those who
die, with respect to that part belonging to the deceased, become also co-owners of the property
together with those who survive. 56 After Eusebio died, his five heirs became co-owners of his 347
square-meter portion. Dividing the 347 square meters among the five entitled each heir to 69.4
square meters of the land subject of litigation.
Consequently, the share of each co-owner did not exceed the 300 square meter limit set in R.A.
7279. The second question, however, is whether the subject property is the only real property of
respondents for them to comply with the second requisite for small property owners.
Antonio Aguilar testified that he and most of the original co-owners do not reside on the subject
property but in their ancestral home in Paco, Manila. 57 Respondents therefore appear to own real
property other than the lots in litigation. Nonetheless, the records do not show that the ancestral
home in Paco, Manila and the land on which it stands are owned by respondents or anyone of them.
Petitioner did not present any title or proof of this fact despite Antonio Aguilar's testimony.
On the other hand, respondents claim that the subject lots are their only real property 58 and that they,
particularly two of the five heirs of Eusebio Aguilar, are merely renting their houses and therefore do
not own any other real property in Metro Manila. 59 To prove this, they submitted certifications from the
offices of the City and Municipal Assessors in Metro Manila attesting to the fact that they have no
registered real property declared for taxation purposes in the respective cities. Respondents were
certified by the City Assessor of Manila; 60 Quezon City;61 Makati City;62 Pasay City;63 Paranaque;64
Caloocan City;65 Pasig City;66 Muntinlupa;67 Marikina;68 and the then municipality of Las Pias 69 and
the municipality of San Juan del Monte 70 as having no real property registered for taxation in their
individual names.1wphi1.nt
Finally, this court notes that the subject lots are now in the possession of respondents. Antonio
Aguilar testified that he and the other co-owners filed ejectment cases against the occupants of the
land before the Metropolitan Trial Court, Mandaluyong, Branches 59 and 60. Orders of eviction were
issued and executed on September 17, 1997 which resulted in the eviction of the tenants and other
occupants from the land in question.71
IN VIEW WHEREOF, the petition is DENIED and the orders dated September 17. 1998 and
December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City in SCA No. 1427 are
AFFIRMED.
SO ORDERED.
Davide, Jr., Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

SUPREME COURT
SECOND DIVISION
G.R. No. 152230. August 9, 2005
JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC., Petitioners,
vs.
MUNICIPALITY (now CITY) OF PASIG, METRO MANILA, Respondent.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review of the Decision 1 of the Court of Appeals (CA) in CA-G.R. CV No.
59050, and its Resolution dated February 18, 2002, denying the motion for reconsideration thereof.
The assailed decision affirmed the order of the Regional Trial Court (RTC) of Pasig, Branch 160,
declaring the respondent Municipality (now City) of Pasig as having the right to expropriate and take
possession of the subject property.
The Antecedents
The Municipality of Pasig needed an access road from E. R. Santos Street, a municipal road near the
Pasig Public Market, to Barangay Sto. Tomas Bukid, Pasig, where 60 to 70 houses, mostly made of
light materials, were located. The road had to be at least three meters in width, as required by the
Fire Code, so that fire trucks could pass through in case of conflagration. 2 Likewise, the residents in
the area needed the road for water and electrical outlets. 3 The municipality then decided to acquire 51
square meters out of the 1,791-square meter property of Lorenzo Ching Cuanco, Victor Ching
Cuanco and Ernesto Ching Cuanco Kho covered by Transfer Certificate of Title (TCT) No. PT-66585, 4
which is abutting E. R. Santos Street.
On April 19, 1993, the Sangguniang Bayan of Pasig approved an Ordinance 5 authorizing the
municipal mayor to initiate expropriation proceedings to acquire the said property and appropriate the
fund therefor. The ordinance stated that the property owners were notified of the municipalitys intent
to purchase the property for public use as an access road but they rejected the offer.
On July 21, 1993, the municipality filed a complaint, amended on August 6, 1993, against the Ching
Cuancos for the expropriation of the property under Section 19 of Republic Act (R.A.) No. 7160,
otherwise known as the Local Government Code. The plaintiff alleged therein that it notified the
defendants, by letter, of its intention to construct an access road on a portion of the property but they
refused to sell the same portion. The plaintiff appended to the complaint a photocopy of the letter
addressed to defendant Lorenzo Ching Cuanco. 6
The plaintiff deposited with the RTC 15% of the market value of the property based on the latest tax
declaration covering the property. On plaintiffs motion, the RTC issued a writ of possession over the
property sought to be expropriated. On November 26, 1993, the plaintiff caused the annotation of a
notice of lis pendens at the dorsal portion of TCT No. PT-92579 under the name of the Jesus Is Lord
Christian School Foundation, Incorporated (JILCSFI) which had purchased the property. 7 Thereafter,
the plaintiff constructed therein a cemented road with a width of three meters; the road was called
Damayan Street.
In their answer,8 the defendants claimed that, as early as February 1993, they had sold the said
property to JILCSFI as evidenced by a deed of sale 9 bearing the signature of defendant Ernesto
Ching Cuanco Kho and his wife.
When apprised about the complaint, JILCSFI filed a motion for leave to intervene as defendant-inintervention, which motion the RTC granted on August 26, 1994. 10
In its answer-in-intervention, JILCSFI averred, by way of special and affirmative defenses, that the
plaintiffs exercise of eminent domain was only for a particular class and not for the benefit of the poor
and the landless. It alleged that the property sought to be expropriated is not the best portion for the
road and the least burdensome to it. The intervenor filed a crossclaim against its co-defendants for
reimbursement in case the subject property is expropriated. 11 In its amended answer, JILCSFI also
averred that it has been denied the use and enjoyment of its property because the road was
constructed in the middle portion and that the plaintiff was not the real party-in-interest. The
intervenor, likewise, interposed counterclaims against the plaintiff for moral damages and attorneys
fees.12
During trial, Rolando Togonon, the plaintiffs messenger, testified on direct examination that on
February 23, 1993, he served a letter of Engr. Jose Reyes, the Technical Assistant to the Mayor on
Infrastructure, to Lorenzo Ching Cuanco at his store at No. 18 Alkalde Jose Street, Kapasigan, Pasig.
A lady received the same and brought it inside the store. When she returned the letter to him, it
already bore the signature of Luz Bernarte. He identified a photocopy of the letter as similar to the
one he served at the store. On cross-examination, he admitted that he never met Luz Bernarte. 13
Edgardo del Rosario, a resident of Sto. Tomas Bukid since 1982 declared that he would pass through
a wooden bridge to go to E. R. Santos Street. At times, the bridge would be slippery and many had
met accidents while walking along the bridge. Because of this, they requested Mayor Vicente Eusebio
to construct a road therein. He attested that after the construction of the cemented access road, the
residents had water and electricity.14
Augusto Paz of the City Engineers Office testified that, sometime in 1992, the plaintiff constructed a
road perpendicular from E. R. Santos Street to Sto. Tomas Bukid; he was the Project Engineer for the
said undertaking. Before the construction of the road, the lot was raw and they had to put filling
materials so that vehicles could use it. According to him, the length of the road which they constructed
was 70 meters long and 3 meters wide so that a fire truck could pass through. He averred that there
is no other road through which a fire truck could pass to go to Sto. Tomas Bukid. 15
Manuel Tembrevilla, the Fire Marshall, averred that he had seen the new road, that is, Damayan
Street, and found that a fire truck could pass through it. He estimated the houses in the area to be
around 300 to 400. Tembrevilla also stated that Damayan Street is the only road in the area. 16
Finally, Bonifacio Maceda, Jr., Tax Mapper IV, testified that, according to their records, JILCSFI
became the owner of the property only on January 13, 1994. 17
The plaintiff offered in evidence a photocopy of the letter of Engr. Jose Reyes addressed to Lorenzo
Ching Cuanco to prove that the plaintiff made a definite and valid offer to acquire the property to the
co-owners. However, the RTC rejected the same letter for being a mere photocopy.18
For the defendant-intervenor, Normita del Rosario, owner of the property located across the subject
property, testified that there are other roads leading to E. R. Santos Street. She asserted that only
about ten houses of the urban poor are using the new road because the other residents are using an
alternative right-of-way. She averred that she did not actually occupy her property; but there were
times that she visited it.19
Danilo Caballero averred that he had been a resident of Sto. Tomas Bukid for seven years. From his
house, he could use three streets to go to E. R. Santos Street, namely, Catalina Street, Damayan
Street and Bagong Taon Street. On cross-examination, he admitted that no vehicle could enter Sto.
Tomas Bukid except through the newly constructed Damayan Street. 20
Eduardo Villanueva, Chairman of the Board of Trustees and President of JILCSFI, testified that the
parcel of land was purchased for purposes of constructing a school building and a church as worship
center. He averred that the realization of these projects was delayed due to the passing of the
ordinance for expropriation.21
The intervenor adduced documentary evidence that on February 27, 1993, Lorenzo Ching Cuanco
and the co-owners agreed to sell their property covered by TCT No. PT-66585 for P1,719,000.00. 22 It
paid a down payment of P1,000,000.00 for the property. After payment of the total purchase price, the
Ching Cuancos executed a Deed of Absolute Sale 23 over the property on December 13, 1993. On
December 21, 1993, TCT No. PT-92579 was issued in the name of JILCSFI. 24 It declared the property
for taxation purposes under its name.25
On September 3, 1997, the RTC issued an Order in favor of the plaintiff, the dispositive portion of
which reads:
WHEREFORE, in view of the foregoing and in accordance with Section 4, Rule 67 of the Revised
Rules of Court, the Court Resolves to DECLARE the plaintiff as having a lawful right to take the
property in question for purposes for which the same is expropriated.
The plaintiff and intervenor are hereby directed to submit at least two (2) names of their
recommended commissioners for the determination of just compensation within ten (10) days from
receipt hereof.
SO ORDERED.26
The RTC held that, as gleaned from the declaration in Ordinance No. 21, there was substantial
compliance with the definite and valid offer requirement of Section 19 of R.A. No. 7160, and that the
expropriated portion is the most convenient access to the interior of Sto. Tomas Bukid.
Dissatisfied, JILCSFI elevated the case to the CA on the following assignment of errors:
First Assignment of Error
THE LOWER COURT SERIOUS[LY] ERRED WHEN IT RULED THAT PLAINTIFF-APPELLEE
SUBSTANTIALLY COMPLIED WITH THE LAW WHEN IT EXPROPRIATED JILS PROPERTY TO BE
USED AS A RIGHT OF WAY.
Second Assignment of Error
THE LOWER COURT ERRED IN DISREGARDING JILS EVIDENCE PROVING THAT THERE WAS
NO PUBLIC NECESSITY TO WARRANT THE EXPROPRIATION OF THE SUBJECT PROPERTY.27
The Court of Appeals Decision
In a Decision dated March 13, 2001, the CA affirmed the order of the RTC. 28 The CA agreed with the
trial court that the plaintiff substantially complied with Section 19 of R.A. No. 7160, particularly the
requirement that a valid and definite offer must be made to the owner. The CA declared that the letter
of Engr. Reyes, inviting Lorenzo Ching Cuanco to a conference to discuss with him the road project
and the price of the lot, was a substantial compliance with the "valid and definite offer" requirement
under said Section 19. In addition, the CA noted that there was also constructive notice to the
defendants of the expropriation proceedings since a notice of lis pendens was annotated at the dorsal
portion of TCT No. PT-92579 on November 26, 1993.29
Finally, the CA upheld the public necessity for the subject property based on the findings of the trial
court that the portion of the property sought to be expropriated appears to be, not only the most
convenient access to the interior of Sto. Tomas Bukid, but also an easy path for vehicles entering the
area, particularly fire trucks. Moreover, the CA took into consideration the provision of Article 33 of the
Rules and Regulations Implementing the Local Government Code, which regards the "construction or
extension of roads, streets, sidewalks" as public use, purpose or welfare. 30
On April 6, 2001, JILCSFI filed a motion for reconsideration of the said decision alleging that the CA
erred in relying on the photocopy of Engr. Reyes letter to Lorenzo Ching Cuanco because the same
was not admitted in evidence by the trial court for being a mere photocopy. It also contended that the
10 | C o n s t i t u t i o n a l L a w I
CA erred in concluding that constructive notice of the expropriation proceeding, in the form of
annotation of the notice of lis pendens, could be considered as a substantial compliance with the
requirement under Section 19 of the Local Government Code for a valid and definite offer. JILCSFI
also averred that no inspection was ever ordered by the trial court to be conducted on the property,
and, if there was one, it had the right to be present thereat since an inspection is considered to be
part of the trial of the case.31
The CA denied the motion for reconsideration for lack of merit. It held that it was not precluded from
considering the photocopy32 of the letter, notwithstanding that the same was excluded by the trial
court, since the fact of its existence was duly established by corroborative evidence. This
corroborative evidence consisted of the testimony of the plaintiffs messenger that he personally
served the letter to Lorenzo Ching Cuanco, and Municipal Ordinance No. 21 which expressly stated
that the property owners were already notified of the expropriation proceeding. The CA noted that
JILCSFI failed to adduce controverting evidence, thus the presumption of regularity was not
overcome.33
The Present Petition
In this petition, petitioner JILCSFI raises the following issues: (1) whether the respondent complied
with the requirement, under Section 19 of the Local Government Code, of a valid and definite offer to
acquire the property prior to the filing of the complaint; (2) whether its property which is already
intended to be used for public purposes may still be expropriated by the respondent; and (3) whether
the requisites for an easement for right-of-way under Articles 649 to 657 of the New Civil Code may
be dispensed with.
The petitioner stresses that the law explicitly requires that a valid and definite offer be made to the
owner of the property and that such offer was not accepted. It argues that, in this case, there was no
evidence to show that such offer has been made either to the previous owner or the petitioner, the
present owner. The petitioner contends that the photocopy of the letter of Engr. Reyes, notifying
Lorenzo Ching Cuanco of the respondents intention to construct a road on its property, cannot be
considered because the trial court did not admit it in evidence. And assuming that such letter is
admissible in evidence, it would not prove that the offer has been made to the previous owner
because mere notice of intent to purchase is not equivalent to an offer to purchase. The petitioner
further argues that the offer should be made to the proper party, that is, to the owner of the property. It
noted that the records in this case show that as of February 1993, it was already the owner of the
property. Assuming, therefore, that there was an offer to purchase the property, the same should have
been addressed to the petitioner, as present owner.34
The petitioner maintains that the power of eminent domain must be strictly construed since its
exercise is necessarily in derogation of the right to property ownership. All the requirements of the
enabling law must, therefore, be strictly complied with. Compliance with such requirements cannot be
presumed but must be proved by the local government exercising the power. The petitioner adds that
the local government should, likewise, comply with the requirements for an easement of right-of-way;
hence, the road must be established at a point least prejudicial to the owner of the property. Finally,
the petitioner argues that, if the property is already devoted to or intended to be devoted to another
public use, its expropriation should not be allowed. 35
For its part, the respondent avers that the CA already squarely resolved the issues raised in this
petition, and the petitioner failed to show valid and compelling reason to reverse the CAs findings.
Moreover, it is not the function of the Supreme Court to weigh the evidence on factual issues all over
again.36 The respondent contends that the Ching Cuancos were deemed to have admitted that an
offer to purchase has been made and that they refused to accept such offer considering their failure
to specifically deny such allegation in the complaint. In light of such admission, the exclusion of the
photocopy of the letter of Engr. Reyes, therefore, is no longer significant. 37
The Ruling of the Court
The petition is meritorious.
At the outset, it must be stressed that only questions of law may be raised by the parties and passed
upon by the Supreme Court in petitions for review on certiorari.38 Findings of fact of the CA, affirming
those of the trial court, are final and conclusive and may not be reviewed on appeal. 39
Nonetheless, where it is shown that the conclusion is a finding grounded on speculations, surmises or
conjectures or where the judgment is based on misapprehension of facts, the Supreme Court may
reexamine the evidence on record.40
Eminent Domain: Nature and Scope
The right of eminent domain is usually understood to be an ultimate right of the sovereign power to
appropriate any property within its territorial sovereignty for a public purpose. The nature and scope
of such power has been comprehensively described as follows:
It is an indispensable attribute of sovereignty; a power grounded in the primary duty of government
to serve the common need and advance the general welfare. Thus, the right of eminent domain
appertains to every independent government without the necessity for constitutional recognition. The
provisions found in modern constitutions of civilized countries relating to the taking of property for the
public use do not by implication grant the power to the government, but limit the power which would,
otherwise, be without limit. Thus, our own Constitution provides that "[p]rivate property shall not be
taken for public use without just compensation." Furthermore, the due process and equal protection
clauses act as additional safeguards against the arbitrary exercise of this governmental power. 41
Strict Construction and Burden of Proof
The exercise of the right of eminent domain, whether directly by the State or by its authorized agents,
is necessarily in derogation of private rights. 42 It is one of the harshest proceedings known to the law.
Consequently, when the sovereign delegates the power to a political unit or agency, a strict
construction will be given against the agency asserting the power. 43 The authority to condemn is to be
strictly construed in favor of the owner and against the condemnor. 44 When the power is granted, the
extent to which it may be exercised is limited to the express terms or clear implication of the statute in
which the grant is contained.45
Corollarily, the respondent, which is the condemnor, has the burden of proving all the essentials
necessary to show the right of condemnation. 46 It has the burden of proof to establish that it has
complied with all the requirements provided by law for the valid exercise of the power of eminent
domain.
The grant of the power of eminent domain to local government units is grounded on Section 19 of
R.A. No. 7160 which reads:
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; Provided, however, That the power of eminent
domain may not be exercised unless a valid and definite offer has been previously made to the
owner, and such offer was not accepted: Provided, further, That the local government unit may
immediately take possession of the property upon the filing of the expropriation proceedings and
upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value
of the property based on the current tax declaration of the property to be expropriated: Provided,
finally, That the amount to be paid for the expropriated property shall be determined by the proper
court based on the fair market value at the time of the taking of the property.
The Court declared that the following requisites for the valid exercise of the power of eminent domain
by a local government unit must be complied with:
1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in
behalf of the local government unit, to exercise the power of eminent domain or pursue expropriation
proceedings over a particular private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of
the poor and the landless.
3. There is payment of just compensation, as required under Section 9, Article III of the Constitution,
and other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property sought to be
expropriated, but said offer was not accepted.47
Valid and Definite Offer
Article 35 of the Rules and Regulations Implementing the Local Government Code provides:
ARTICLE 35. Offer to Buy and Contract of Sale. (a) The offer to buy private property for public use
or purpose shall be in writing. It shall specify the property sought to be acquired, the reasons for its
acquisition, and the price offered.
(b) If the owner or owners accept the offer in its entirety, a contract of sale shall be executed and
payment forthwith made.
(c) If the owner or owners are willing to sell their property but at a price higher than that offered to
them, the local chief executive shall call them to a conference for the purpose of reaching an
agreement on the selling price. The chairman of the appropriation or finance committee of the
sanggunian, or in his absence, any member of the sanggunian duly chosen as its representative,
shall participate in the conference. When an agreement is reached by the parties, a contract of sale
shall be drawn and executed.
(d) The contract of sale shall be supported by the following documents:
(1) Resolution of the sanggunian authorizing the local chief executive to enter into a contract of sale.
The resolution shall specify the terms and conditions to be embodied in the contract;
(2) Ordinance appropriating the amount specified in the contract; and
(3) Certification of the local treasurer as to availability of funds together with a statement that such
fund shall not be disbursed or spent for any purpose other than to pay for the purchase of the
property involved.
The respondent was burdened to prove the mandatory requirement of a valid and definite offer to the
owner of the property before filing its complaint and the rejection thereof by the latter. 48 It is incumbent
upon the condemnor to exhaust all reasonable efforts to obtain the land it desires by agreement. 49
Failure to prove compliance with the mandatory requirement will result in the dismissal of the
complaint.50
An offer is a unilateral proposition which one party makes to the other for the celebration of a
contract.51 It creates a power of acceptance permitting the offeree, by accepting the offer, to transform
the offerors promise into a contractual obligation. 52 Corollarily, the offer must be complete, indicating
with sufficient clearness the kind of contract intended and definitely stating the essential conditions of
the proposed contract.53 An offer would require, among other things, a clear certainty on both the
object and the cause or consideration of the envisioned contract. 54
The purpose of the requirement of a valid and definite offer to be first made to the owner is to
encourage settlements and voluntary acquisition of property needed for public purposes in order to
avoid the expense and delay of a court action. 55 The law is designed to give to the owner the
opportunity to sell his land without the expense and inconvenience of a protracted and expensive
litigation. This is a substantial right which should be protected in every instance. 56 It encourages
acquisition without litigation and spares not only the landowner but also the condemnor, the expenses
and delays of litigation. It permits the landowner to receive full compensation, and the entity acquiring
the property, immediate use and enjoyment of the property. A reasonable offer in good faith, not
merely perfunctory or pro forma offer, to acquire the property for a reasonable price must be made to
the owner or his privy.57 A single bona fide offer that is rejected by the owner will suffice.
The expropriating authority is burdened to make known its definite and valid offer to all the owners of
the property. However, it has a right to rely on what appears in the certificate of title covering the land
to be expropriated. Hence, it is required to make its offer only to the registered owners of the property.
After all, it is well-settled that persons dealing with property covered by a Torrens certificate of title are
not required to go beyond what appears on its face. 58
In the present case, the respondent failed to prove that before it filed its complaint, it made a written
definite and valid offer to acquire the property for public use as an access road. The only evidence
adduced by the respondent to prove its compliance with Section 19 of the Local Government Code is
the photocopy of the letter purportedly bearing the signature of Engr. Jose Reyes, to only one of the
co-owners, Lorenzo Ching Cuanco. The letter reads:
MR. LORENZO CHING CUANCO

18 Alcalde Jose Street
Capasigan, Pasig
Metro Manila
Dear Mr. Cuanco:
This refers to your parcel of land located along E. Santos Street, Barangay Palatiw, Pasig, Metro
Manila embraced in and covered by TCT No. 66585, a portion of which with an area of fifty-one (51)
square meters is needed by the Municipal Government of Pasig for conversion into a road-right of
way for the benefit of several residents living in the vicinity of your property. Attached herewith is the
sketch plan for your information.
In this connection, may we respectfully request your presence in our office to discuss this project and
the price that may be mutually agreed upon by you and the Municipality of Pasig.
Thank you.
Very truly yours,
(Sgd.)
ENGR. JOSE L. REYES
Technical Asst. to the Mayor
On Infrastructure59
It bears stressing, however, that the respondent offered the letter only to prove its desire or intent to
acquire the property for a right-of-way.60 The document was not offered to prove that the respondent
made a definite and valid offer to acquire the property. Moreover, the RTC rejected the document
because the respondent failed to adduce in evidence the original copy thereof. 61 The respondent,
likewise, failed to adduce evidence that copies of the letter were sent to and received by all the coowners of the property, namely, Lorenzo Ching Cuanco, Victor Ching Cuanco and Ernesto Kho.
The respondent sought to prove, through the testimony of its messenger, Rolando Togonon, that
Lorenzo Ching Cuanco received the original of the said letter. But Togonon testified that he merely
gave the letter to a lady, whom he failed to identify. He stated that the lady went inside the store of
Lorenzo Ching Cuanco, and later gave the letter back to him bearing the signature purportedly of one
Luz Bernarte. However, Togonon admitted, on cross-examination, that he did not see Bernarte
affixing her signature on the letter. Togonon also declared that he did not know and had never met
Lorenzo Ching Cuanco and Bernarte:
Q And after you received this letter from that lady, what did you do afterwards?
A I brought it with me, that letter, and then I went to Caruncho.
Q So, [M]r. Witness, you are telling this Honorable Court that this letter intended to Mr. Lorenzo was
served at Pasig Trading which was situated at No. 18 Alkalde Jose Street on February 23, 1993?
A Yes, Maam.
ATTY. TAN:
That is all for the witness, Your Honor.
COURT:
Do you have any cross-examination?
ATTY. JOLO:
Just a few cross, Your Honor, please. With the kind permission of the Honorable Court.
COURT:
Proceed.
CROSS-EXAMINATION
BY ATTY. JOLO:
Q Mr. Witness, do you know Mr. Lorenzo Ching [Cuanco]
A I do not know him.
Q As a matter of fact, you have not seen him even once, isnt not (sic)?
A Yes, Sir.
Q This Luz Bernarte, do you know her?
A I do not know her.
Q As a matter of fact, you did not see Mrs. Bernarte even once?
A That is correct.
Q And as a matter of fact, [M]r. Witness, you did not see Mrs. Luz Bernarte affixing her signature on
the bottom portion of this demand letter, marked as Exh. "C-2"?
A Yes, Sir.62
Even if the letter was, indeed, received by the co-owners, the letter is not a valid and definite offer to
purchase a specific portion of the property for a price certain. It is merely an invitation for only one of
the co-owners, Lorenzo Ching Cuanco, to a conference to discuss the project and the price that may
be mutually acceptable to both parties.
There is no legal and factual basis to the CAs ruling that the annotation of a notice of lis pendens at
the dorsal portion of petitioners TCT No. PT-92579 is a substantial compliance with the requisite
offer. A notice of lis pendens is a notice to the whole world of the pendency of an action involving the
title to or possession of real property and a warning that those who acquire an interest in the property
do so at their own risk and that they gamble on the result of the litigation over it. 63 Moreover, the lis
pendens was annotated at the dorsal portion of the title only on November 26, 1993, long after the
complaint had been filed in the RTC against the Ching Cuancos.
Neither is the declaration in one of the whereas clauses of the ordinance that "the property owners
were already notified by the municipality of the intent to purchase the same for public use as a
municipal road," a substantial compliance with the requirement of a valid and definite offer under
Section 19 of R.A. No. 7160. Presumably, the Sangguniang Bayan relied on the erroneous premise
that the letter of Engr. Reyes reached the co-owners of the property. In the absence of competent
evidence that, indeed, the respondent made a definite and valid offer to all the co-owners of the
property, aside from the letter of Engr. Reyes, the declaration in the ordinance is not a compliance
with Section 19 of R.A. No. 7160.
The respondent contends, however, that the Ching Cuancos, impliedly admitted the allegation in its
complaint that an offer to purchase the property was made to them and that they refused to accept
the offer by their failure to specifically deny such allegation in their answer. This contention is wrong.
As gleaned from their answer to the complaint, the Ching Cuancos specifically denied such allegation
for want of sufficient knowledge to form a belief as to its correctness. Under Section 10, 64 Rule 8 of
the Rules of Court, such form of denial, although not specific, is sufficient.
Public Necessity
We reject the contention of the petitioner that its property can no longer be expropriated by the
respondent because it is intended for the construction of a place for religious worship and a school for
its members. As aptly explained by this Court in Manosca v. Court of Appeals,65 thus:
It has been explained as early as Sea v. Manila Railroad Co., 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 increases 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 requirements of public use.
Chief Justice Fernando, writing the ponencia in J.M. Tuason & Co. vs. Land Tenure Administration,
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."
Petitioners ask: But "(w)hat is the so-called unusual interest that the expropriation of (Felix Manalos)
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. 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.
The petitioner asserts that the respondent must comply with the requirements for the establishment of
an easement of right-of-way, more specifically, the road must be constructed at the point least
prejudicial to the servient state, and that there must be no adequate outlet to a public highway. The
petitioner asserts that the portion of the lot sought to be expropriated is located at the middle portion
of the petitioners entire parcel of land, thereby splitting the lot into two halves, and making it
impossible for the petitioner to put up its school building and worship center.
The subject property is expropriated for the purpose of constructing a road. The respondent is not
mandated to comply with the essential requisites for an easement of right-of-way under the New Civil
Code. Case law has it that in the absence of legislative restriction, the grantee of the power of
eminent domain may determine the location and route of the land to be taken 66 unless such
determination is capricious and wantonly injurious. 67 Expropriation is justified so long as it is for the
public good and there is genuine necessity of public character. 68 Government may not capriciously
choose what private property should be taken. 69
The respondent has demonstrated the necessity for constructing a road from E. R. Santos Street to
Sto. Tomas Bukid. The witnesses, who were residents of Sto. Tomas Bukid, testified that although
there were other ways through which one can enter the vicinity, no vehicle, however, especially fire
trucks, could enter the area except through the newly constructed Damayan Street. This is more than
sufficient to establish that there is a genuine necessity for the construction of a road in the area. After
all, absolute necessity is not required, only reasonable and practical necessity will suffice. 70
Nonetheless, the respondent failed to show the necessity for constructing the road particularly in the
petitioners property and not elsewhere. 71 We note that the whereas clause of the ordinance states
that the 51-square meter lot is the shortest and most suitable access road to connect Sto. Tomas
Bukid to E. R. Santos Street. The respondents complaint also alleged that the said portion of the
petitioners lot has been surveyed as the best possible ingress and egress. However, the respondent
failed to adduce a preponderance of evidence to prove its claims.
On this point, the trial court made the following findings:
The contention of the defendants that there is an existing alley that can serve the purpose of the
expropriator is not accurate. An inspection of the vicinity reveals that the alley being referred to by the
defendants actually passes thru Bagong Taon St. but only about one-half (1/2) of its entire length is
passable by vehicle and the other half is merely a foot-path. It would be more inconvenient to widen
the alley considering that its sides are occupied by permanent structures and its length from the
municipal road to the area sought to be served by the expropriation is considerably longer than the
proposed access road. The area to be served by the access road is composed of compact wooden
houses and literally a slum area. As a result of the expropriation of the 51-square meter portion of the
property of the intervenor, a 3-meter wide road open to the public is created. This portion of the
property of the intervenor is the most convenient access to the interior of Sto. Tomas Bukid since it is
not only a short cut to the interior of the Sto. Tomas Bukid but also an easy path for vehicles entering
the area, not to mention the 3-meter wide road requirement of the Fire Code. 72
However, as correctly pointed out by the petitioner, there is no showing in the record that an ocular
inspection was conducted during the trial. If, at all, the trial court conducted an ocular inspection of
the subject property during the trial, the petitioner was not notified thereof. The petitioner was,
therefore, deprived of its right to due process. It bears stressing that an ocular inspection is part of the
trial as evidence is thereby received and the parties are entitled to be present at any stage of the
trial.73 Consequently, where, as in this case, the petitioner was not notified of any ocular inspection of
the property, any factual finding of the court based on the said inspection has no probative weight.
The findings of the trial court based on the conduct of the ocular inspection must, therefore, be
rejected.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision and Resolution of the
Court of Appeals are REVERSED AND SET ASIDE. The RTC is ordered to dismiss the complaint of
the respondent without prejudice to the refiling thereof.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 147511
January 20, 2003
MARINA Z. REYES; ALFREDO A. FRANCISCO; ANGELITA Z. GARCIA; ALFREDO Z. FRANCISCO, JR;

ARMANDO Z. FRANCISCO; ALMA C. FRANCISCO; EUGENIA Z. LUNA; CLARITA Z. ZABALLERO,
LEONARDO Z. ZABALLERO, JR, and TEODORO Z. ZABALLERO, in substitution of LEONARDO M.
ZABALLERO; AUGUSTO M. ZABALLERO; FRINE A. ZABALLERO; ELENA FRONDA ZABALLERO;
VICTOR GREGORIO F. ZABALLERO; MARIA ELENA F. ZABALLERO; LOURDES ZABALLERO-LAVA;
SOCORRO EMILIA ZABALLERO-YAP; and TERESITA F. ZABALLERO, petitioners,
vs.
NATIONAL HOUSING AUTHORITY, respondent.
PUNO, J.:
This is an appeal by certiorari from the decision of the Court of Appeals in CA-GR CV No. 51641 dated
September 29, 20001 affirming the judgment of the Regional Trial Court of Quezon City, Branch 79 which
dismissed the complaint for forfeiture of rights filed by herein petitioners, as well as the Resolution dated March
13, 2001 denying petitioners' motion for reconsideration.
Records show that in 1977, respondent National Housing Authority (NHA) filed separate complaints for the
expropriation of sugarcane lands, particularly Lot Nos. 6450, 6448-E, 6198-A and 6199 of the cadastral survey
of Dasmarias, Cavite belonging to the petitioners, before the then Court of First Instance of Cavite, and
docketed as Civil Case Nos. T.G.-392, T.G.-396 and T.G.-417. The stated public purpose of the expropriation
was the expansion of the Dasmarias Resettlement Project to accommodate the squatters who were relocated
from the Metropolitan Manila area. The trial court rendered judgment ordering the expropriation of these lots
and the payment of just compensation. This was affirmed by the Supreme Court in a decision rendered on
October 29, 1987 in the case of NHA vs. Zaballero2 and which became final on November 26, 1987.3
On February 24, 1989, the expropriation court (now Branch 18, Regional Trial Court of Tagaytay City) issued
an Order4 the dispositive portion of which reads:
"WHEREFORE, and resolving thus, let an Alias Writ of Execution be immediately issued and that:
(1) The Register of Deeds of the Province of Cavite is hereby ordered to transfer, in the name of the plaintiff
National Housing Authority, the following:
(a) Transfer Certificate No. RT-638 containing an area of 79,167 square meters situated in Barrio Bangkal,
Dasmarias, Cavite;
(b) Transfer Certificate of Title No. T-55702 containing an area of 20,872 square meters situated in Barrio
Bangkal, Dasmarias, Cavite;
(c) Transfer Certificate of Title No. RT-639 and RT-4641 covering Lot Nos. 6198-A and 6199 with an aggregate
area of 159,985 square meters also situated in Barrio Bangkal, Dasmarias, Cavite.
(2) Plaintiff National Housing Authority is likewise hereby ordered, under pain of contempt, to immediately pay
the defendants, the amounts stated in the Writ of Execution as the adjudicated compensation of their
expropriated properties, which process was received by it according to the records, on September 26, 1988,
segregating therefrom, and in separate check, the lawyer's fees in favor of Atty. Bobby P. Yuseco, in the
amount of P322,123.05, as sustained by their contract as gleaned from the records, with no other deduction,
paying on its own (NHA) account, the necessary legal expenses incident to the registration or issuance of new
certificates of title, pursuant to the provisions of the Property Registration Law (PD 1529);
(3) Defendants, however, are directed to pay the corresponding capital gains tax on the subject properties,
directing them additionally, to coordinate with the plaintiff NHA in this regard, in order to facilitate the
termination of this case, put an end to this controversy and consign the same to its final rest."
For the alleged failure of respondent NHA to comply with the above order, petitioners filed on April 28, 1992 a
complaint5 for forfeiture of rights before the Regional Trial Court of Quezon City, Branch 79, in Civil Case No.
Q-92-12093. They alleged that respondent NHA had not relocated squatters from the Metropolitan Manila area
on the expropriated lands in violation of the stated public purpose for expropriation and had not paid the just
compensation fixed by the court. They prayed that respondent NHA be enjoined from disposing and alienating
the expropriated properties and that judgment be rendered forfeiting all its rights and interests under the
expropriation judgment. In its Answer,6 respondent NHA averred that it had already paid a substantial amount
to herein petitioners and that the expropriation judgment could not be executed in view of several issues raised
by respondent NHA before the expropriation court (now Branch 18, RTC, Tagaytay City) concerning capital
gains tax, registration fees and other expenses for the transfer of title to respondent NHA, as well as the claims
for attorney's fees of Atty. Joaquin Yuseco, Jr., collaborating counsel for petitioners.
Ocular inspections7 conducted by the trial court on the subject properties show that:
"1. 80% of Lot No. 6198-A with an area of 120,146 square meters is already occupied by relocatees whose
houses are made of light materials with very few houses partly made of hollow blocks. The relocatees were
relocated only on (sic) March of 1994;
2. Most of the area covered by Lot No. 2075 is almost occupied by houses and structures, most of which are
made of concrete materials. These houses are not being occupied by squatters relocated to the said lot by the
defendant NHA;
3. Lot No. 6199 is also occupied by concrete houses and structures but likewise there are no relocatees in said
lot. A large area of the same is still unoccupied."
On September 29, 1995, the trial court rendered judgment dismissing the complaint. Finding that the failure of
respondent NHA to pay just compensation and of petitioners to pay capital gains tax are both unjustified and
unreasonable, the trial court held that: (1) respondent NHA is not deemed to have abandoned the public
purpose for which the subject properties were expropriated because the relocation of squatters involves a long
and tedious process. It ruled that respondent NHA actually pursued the public purpose of the expropriation
when it entered into a contract with Arceo C. Cruz involving the construction of low cost housing on the
expropriated lots to be sold to qualified low income beneficiaries; (2) there is no condition imposed in the
expropriation judgment that the subject properties shall revert back to its original owners in case the purpose of
expropriation is terminated or abandoned; (3) the payment of just compensation is independent of the
obligation of herein petitioners to pay capital gains tax; and (4) in the payment of just compensation, the basis
should be the value at the time the property was taken. On appeal, the Court of Appeals affirmed the decision
of the trial court.
Petitioners are now before us raising the following assignment of errors:
"1. The Honorable Court of Appeals had decided a question of substance not in accord with justice and equity
when it ruled that, as the judgment of the expropriation court did not contain a condition that should the
expropriated property be not used for the intended purpose it would revert to the condemnee, the action to
declare the forfeiture of rights under the expropriation judgment can not prosper;
2. The Honorable Court of Appeals decided a question of substance not in accord with jurisprudence, justice
and equity when it ruled that the non-payment is not a ground for forfeiture;
3. The Honorable Court of Appeals erred in not declaring the judgment of expropriation forfeited in light of the
failure of respondent to use the expropriated property for the intended purpose but for a totally different
purpose."
The petition is not impressed with merit.
Petitioners contend that respondent NHA violated the stated public purpose for the expansion of the
Dasmarias Resettlement Project when it failed to relocate the squatters from the Metro Manila area, as borne
out by the ocular inspection conducted by the trial court which showed that most of the expropriated properties
remain unoccupied. Petitioners likewise question the public nature of the use by respondent NHA when it
entered into a contract for the construction of low cost housing units, which is allegedly different from the stated
public purpose in the expropriation proceedings. Hence, it is claimed that respondent NHA has forfeited its
rights and interests by virtue of the expropriation judgment and the expropriated properties should now be
returned to herein petitioners. We are not persuaded.
The 1987 Constitution explicitly provides for the exercise of the power of eminent domain over private
properties upon payment of just compensation. More specifically, section 9, Article III states that private
property shall not be taken for public use without just compensation. The constitutional restraints are public use
and just compensation.
Petitioners cannot insist on a restrictive view of the eminent domain provision of the Constitution by contending
that the contract for low cost housing is a deviation from the stated public use. It is now settled doctrine that the
concept of public use is no longer limited to traditional purposes. Here, as elsewhere, the idea that "public use"
is strictly limited to clear cases of "use by the public" has been abandoned. The term "public use" has now
been held to be synonymous with "public interest," "public benefit," "public welfare," and "public convenience." 8
The rationale for this new approach is well explained in the case of Heirs of Juancho Ardona, et al. vs. Reyes,
et al.,9 to wit:
"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.
xxx
xxx
xxx
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."
(emphasis supplied)
The act of respondent NHA in entering into a contract with a real estate developer for the construction of low
cost housing on the expropriated lots to be sold to qualified low income beneficiaries cannot be taken to mean
as a deviation from the stated public purpose of their taking. Jurisprudence has it that the expropriation of
private land for slum clearance and urban development is for a public purpose even if the developed area is
later sold to private homeowners, commercials firms, entertainment and service companies, and other private
concerns.10
Moreover, the Constitution itself allows the State to undertake, for the common good and in cooperation with
the private sector, a continuing program of urban land reform and housing which will make at affordable
cost decent housing and basic services to underprivileged and homeless citizens in urban centers and
resettlement areas.11 The expropriation of private property for the purpose of socialized housing for the
marginalized sector is in furtherance of the social justice provision under Section 1, Article XIII of the
Constitution which provides that:
"SECTION 1. 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 require the acquisition, ownership, use and disposition of property and its
increments."
It follows that the low cost housing project of respondent NHA on the expropriated lots is compliant with the
"public use" requirement.
We likewise do not subscribe to petitioners' contention that the stated public purpose was abandoned when
respondent NHA failed to occupy the expropriated lots by relocating squatters from the Metro Manila area. The
expropriation judgment declared that respondent NHA has a lawful right to take petitioners properties "for the
public use or purpose of expanding the Dasmarias Resettlement Project." The taking here is absolute, without
any condition, restriction or qualification. Contrary to petitioners' submission, the ruling enunciated in the early
case of Fery vs. Municipality of Cabanatuan,12 is still good and sound doctrine, viz.:
"x x x If, for example, land is expropriated for a particular purpose, with the condition that when that purpose is
ended or abandoned the property shall return to its former owner, then, of course, when the purpose is
terminated or abandoned the former owner reacquires the property so expropriated. x x x If, upon the contrary,
however, the decree of expropriation gives to the entity a fee simple title, then, of course, the land becomes the
absolute property of the expropriator x x x.
When land has been acquired for public use in fee simple unconditionally, either by the exercise of
eminent domain or by purchase, the former owner retains no rights in the land, and the public use may
be abandoned, or the land may be devoted to a different use, without any impairment of the estate or
title acquired, or any reversion to the former owner."
Petitioners further aver that the continued failure of respondent NHA to pay just compensation for a long period
of time justifies the forfeiture of its rights and interests over the expropriated lots. They demand the return of
the expropriated lots. Respondent NHA justifies the delay to pay just compensation by reason of the failure of
petitioners to pay the capital gains tax and to surrender the owners' duplicate certificates of title.
In the recent case of Republic of the Philippines vs. Court of Appeals, et al.,13 the Court ruled that non-payment
of just compensation does not entitle the private landowners to recover possession of their expropriated lots.
Thus:
"Thus, in Valdehueza vs. Republic where the private landowners had remained unpaid ten years after the
termination of the expropriation proceedings, this Court ruled
'The points in dispute are whether such payment can still be made and, if so, in what amount. Said lots have
been the subject of expropriation proceedings. By final and executory judgment in said proceedings, they were
condemned for public use, as part of an airport, and ordered sold to the government. x x x. It follows that both
by virtue of the judgment, long final, in the expropriation suit, as well as the annotations upon their title
certificates, plaintiffs are not entitled to recover possession of their expropriated lots which are still devoted to
the public use for which they were expropriated but only to demand the market value of the same.
Said relief may be granted under plaintiffs' prayer for such other remedies, which may be deemed just and
equitable under the premises.'
The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay City where the recovery of
possession of property taken for public use prayed for by the unpaid landowner was denied even while no
requisite expropriation proceedings were first instituted. The landowner was merely given the relief of
recovering compensation for his property computed at its market value at the time it was taken and
appropriated by the State.
The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings provides not only for
the payment of just compensation to herein respondents but likewise adjudges the property
condemned in favor of petitioner over which parties, as well as their privies, are bound. Petitioner has
occupied, utilized and, for all intents and purposes, exercised dominion over the property pursuant to
the judgment. The exercise of such rights vested to it as the condemnee indeed has amounted to at
least a partial compliance or satisfaction of the 1979 judgment, thereby preempting any claim of bar by
prescription on grounds of non-execution. In arguing for the return of their property on the basis of nonpayment, respondents ignore the fact that the right of the expropriating authority is far from that of an
unpaid seller in ordinary sales, to which the remedy of rescission might perhaps apply. An in rem
proceeding, condemnation acts upon the property. After condemnation, the paramount title is in the public
under a new and independent title; thus, by giving notice to all claimants to a disputed title, condemnation
proceedings provide a judicial process for securing better title against all the world than may be obtained by
voluntary conveyance." (emphasis supplied)
We, however, likewise find the refusal of respondent NHA to pay just compensation, allegedly for failure of
petitioners to pay capital gains tax and surrender the owners' duplicate certificates of title, to be unfounded and
unjustified.
First, under the expropriation judgment the payment of just compensation is not subject to any condition.
Second, it is a recognized rule that although the right to enter upon and appropriate the land to public use is
completed prior to payment, title to the property expropriated shall pass from the owner to the expropriator only
upon full payment of the just compensation. In the case of Association of Small Landowners in the Phils., Inc.,
et al. vs. Secretary of Agrarian Reform,14 it was held that:
"Title to property which is the subject of condemnation proceedings does not vest the condemnor until the
judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the date on
which the petition under the Eminent Domain Act, or the commissioner's report under the Local Improvement
Act, is filed.
x x x Although the right to appropriate and use land taken for a canal is complete at the time of entry,
title to the property taken remains in the owner until payment is actually made.
In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does not
pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to be
uniformly to this effect. As early as 1838, in Rubottom v. McLure, it was held that 'actual payment to the owner
of the condemned property was a condition precedent to the investment of the title to the property in the State'
albeit 'not to the appropriation of it to public use.' In Rexford v. Knight, the Court of Appeals of New York said
that the construction upon the statutes was that the fee did not vest in the State until the payment of the
compensation although the authority to enter upon and appropriate the land was complete prior to the
payment. Kennedy further said that 'both on principle and authority the rule is x x x that the right to enter on
and use the property is complete, as soon as the property is actually appropriated under the authority
of law for a public use, but that the title does not pass from the owner without his consent, until just
compensation has been made to him.'"
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:
If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be
apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance
that no piece of land can be finally and irrevocably taken from an unwilling owner until compensation is paid. x
x x." (emphasis supplied)
With respect to the amount of the just compensation still due and demandable from respondent NHA, the lower
courts erred in not awarding interest computed from the time the property is actually taken to the time when
compensation is actually paid or deposited in court. In Republic, et al. vs. Court of Appeals, et al.,15 the Court
imposed interest at 12% per annum in order to help eliminate the issue of the constant fluctuation and inflation
of the value of the currency over time, thus:
"The constitutional limitation of 'just compensation' is considered to be the sum equivalent to the market value
of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary
course of legal action and competition or the fair value of the property as between one who receives, and one
who desires to sell, it being fixed at the time of the actual taking by the government. Thus, if property is taken
for public use before compensation is deposited with the court having jurisdiction over the case, the final
compensation must include interests on its just value to be computed from the time the property is taken to the
time when compensation is actually paid or deposited with the court. In fine, between the taking of the property
and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not
better than) the position he was in before the taking occurred.
x x x This allowance of interest on the amount found to be the value of the property as of the time of the taking
computed, being an effective forbearance, at 12% per annum should help eliminate the issue of the constant
fluctuation and inflation of the value of the currency over time. Article 1250 of the Civil Code, providing that, in
case of extraordinary inflation or deflation, the value of the currency at the time of the establishment of the
obligation shall be the basis for the payment when no agreement to the contrary is stipulated, has strict
application only to contractual obligations. In other words, a contractual agreement is needed for the effects of
extraordinary inflation to be taken into account to alter the value of the currency."
Records show that there is an outstanding balance of P1,218,574.35 that ought to be paid to petitioners. 16 It is
not disputed that respondent NHA took actual possession of the expropriated properties in 1977. 17 Perforce,
while petitioners are not entitled to the return of the expropriated property, they are entitled to be paid the
balance of P1,218,574.35 with legal interest thereon at 12% per annum computed from the taking of the
property in 1977 until the due amount shall have been fully paid.
WHEREFORE, the appealed judgment is modified as follows:
1. Ordering respondent National Housing Authority to pay petitioners the amount of P1,218,574.35 with legal
interest thereon at 12% per annum computed from the taking of the expropriated properties in 1997 until the
amount due shall have been fully paid;
2. Ordering petitioners to pay the capital gains tax; and
3. Ordering petitioners to surrender to respondent National Housing Authority the owners' duplicate certificates
of title of the expropriated properties upon full payment of just compensation.
SO ORDERED.
Panganiban, Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 175064
September 18, 2009
PROVINCE OF CAMARINES SUR, represented by Governor LUIS RAYMUND F. VILLAFUERTE, Jr.,

Petitioner,
vs.
HONORABLE COURT OF APPEALS; and CITY OF NAGA, represented by Mayor JESSE M. ROBREDO,
Respondents.
DECISION
CHICO-NAZARIO, J.:
This Petition for Certiorari1 under Rule 65 of the Rules of Court seeks to annul and set aside the Decision 2
dated 28 June 2004 and the Resolution 3 dated 11 August 2006 of the Court of Appeals in CA-G.R. SP No.
56243. The assailed Decision of the appellate court denied due course the Petition for Review on Certiorari 4
filed by petitioner Province of Camarines Sur (Camarines Sur), while the assailed Resolution denied the Motion
for Reconsideration of the earlier Decision.
The property subject of the instant case is a parcel of land, known as Plaza Rizal, situated within the territory of
herein respondent City of Naga and with an aggregate area of 4,244 square meters, more or less. Plaza Rizal
is located in front of the old provincial capitol building, where the Provincial Government of Camarines Sur
used to have its seat, at the time when the then Municipality of Naga was still the provincial capital.
On 18 June 1948, Republic Act No. 3055 took effect and, by virtue thereof, the Municipality of Naga was
converted into the City of Naga. Subsequently, on 16 June 1955, Republic Act No. 1336 6 was approved,
transferring the site of the provincial capitol of Camarines Sur from the City of Naga to the barrio of Palestina,
Municipality of Pili.7 The Municipality of Pili was also named as the new provincial capital.8
On 13 January 1997, the City of Naga filed a Complaint9 for Declaratory Relief and/or Quieting of Title against
Camarines Sur before the Regional Trial Court (RTC) of the City of Naga, Branch 61, which was docketed as
Civil Case No. 97-3691.
The City of Naga alleged that, for a considerable length of time, Camarines Sur possessed and claimed
ownership of Plaza Rizal because of a tax declaration over the said property in the name of the province. As a
result, Camarines Sur had long exercised administrative control and management of Plaza Rizal, to the
exclusion of the City of Naga. The City of Naga could not introduce improvements on Plaza Rizal, and its
constituents could not use the property without securing a permit from the proper officials of Camarines Sur.
The situation had created a conflict of interest between the parties herein and had generated animosities
among their respective officials.
The City of Naga stressed that it did not intend to acquire ownership of Plaza Rizal. Being a property of the
public domain, Plaza Rizal could not be claimed by any subdivision of the state, as it belonged to the public in
general. Instead, the City of Naga sought a declaration that the administrative control and management of
Plaza Rizal should be vested in it, given that the said property is situated within its territorial jurisdiction. The
City of Naga invoked Section 2, Article I of Republic Act No. 305, the Charter of the City of Naga, which states:
SEC. 2. Territory of the City of Naga. The city of Naga which is hereby created, shall comprise the present
territorial jurisdiction of the municipality of Naga, in the Province of Camarines Sur.
On 21 February 1997, Camarines Sur filed an Answer with Motion to Dismiss. 10 It argued that it was the legal
and absolute owner of Plaza Rizal and, therefore, had the sole right to maintain, manage, control, and
supervise the said property. Camarines Sur asserted that the City of Naga was without any cause of action
because the Complaint lacked any legal or factual basis. Allegedly, Section 2 of Republic Act No. 305 merely
defined the territorial jurisdiction of the City of Naga and did not vest any color of right to the latter to manage
and control any property owned by Camarines Sur. Furthermore, the remedy of Declaratory Relief was
inappropriate because there was no justiciable controversy, given that the City of Naga did not intend to
acquire ownership of Plaza Rizal; and Camarines Sur, being the owner of Plaza Rizal, had the right to the
management, maintenance, control, and supervision thereof. There was likewise no actual or impending
controversy, since Plaza Rizal had been under the control and supervision of Camarines Sur since time
immemorial. The remedy of Quieting of Title was inappropriate, as the City of Naga had no legal or equitable
title to or interest in Plaza Rizal that needed protection. Lastly, Camarines Sur stated that Plaza Rizal was not a
property of public domain, but a property owned by Camarines Sur which was devoted to public use.
In an Order11 dated 28 May 1997, the RTC denied the Motion to Dismiss of Camarines Sur, since the grounds
cited therein were legal issues that were evidentiary in nature and could only be threshed out in a full-blown
trial.
On 10 March 1999, the RTC rendered a Decision12 in favor of the City of Naga, the pertinent portions of which
provide:
As understood in the Law of Nations, the right of jurisdiction accorded a sovereign state consists of first, its
personal jurisdiction, which in a sense is its authority over its nationals who are in a foreign country and
second, territorial jurisdiction, which is its authority over persons and properties within the territorial boundaries
x x x.
"The territorial jurisdiction of a state is based on the right of domain. The domain of a State includes normally
only the expanse of its territory over which it exercises the full rights of sovereignty." x x x
"Sovereignty, in turn, refers to the supreme power of a State to command and enforce obedience; it is the
power, to which, legally speaking all interest[s] are practically subject and all wills subordinate." x x x Indeed,
from the point of view of national law, it is in a sense absolute control over a definite territory. x x x.
In summation therefore from the above-quoted citations, when territorial jurisdiction is being referred to, it
means the entire territory over which a State (or any local government unit) can exercise absolute control.
In the instant case, [Camarines Sur] thru (sic) counsel admitted during the pre-trial conference that indeed, the
property in question, which is Plaza Rizal, is within the territorial jurisdiction of the [City of Naga]. Thus,
applying the above-quoted principles concerning territorial jurisdiction, [Camarines Sur] is barred by its express
admission from claiming that it is the Province of Camarines Sur who has the right to administratively control,
manage and supervise said Plaza Rizal.
[The contention of Camarines Sur] that [Section 2, Article I] of [Republic Act No.] 305 merely defines [the]
territory of the City of Naga has no strong leg to stand on.
The unequivocal and specific import of said provision provides the extent into which the City of Naga can
exercise its powers and functions over all its constituents and properties found within its territory. Further, Art.
II, Sec. 9, par. b of [Republic Act No.] 305 provides one of the general powers and duties of the City Mayor, to
wit:
"To safeguard all the lands, buildings, records, moneys, credits and other property and rights of the city, and
subject to the [provisions] of this Charter, have control of all its property."
Considering that the Province [of Camarines Sur] expressly acknowledged that [Section 2, Article I] of
[Republic Act No.] 305 merely defines the territory of [the City of Naga], then it is safe to assume that it also
accept that the City of Naga as represented by the City Mayor exercises control of all the properties of the City,
for properties as used in the above-quoted provision refers to lands, buildings, records, moneys[,] credits and
other property and rights of the city. x x x Since [Section 2, Article I] of [Republic Act No.] 305 defines the
territory of [the City of] Naga and Plaza Rizal is within its territorial jurisdiction, ergo, it is the City [of Naga] who
has the right of administrative control and management of Plaza Rizal.
The RTC thus decreed:
WHEREFORE, premises considered, [Section 2, Article I] of [Republic Act No.] 305 is hereby interpreted and
declared in this Court to mean that the administrative control and management of Plaza Rizal is within the City
of Naga and not with the Province of Camarines Sur.13
Camarines Sur received a copy of the foregoing Decision on 16 March 1999, and filed a Motion for
Reconsideration14 of the same on 30 March 1999. The RTC denied the Motion for Reconsideration of
Camarines Sur in an Order15 dated 1 September 1999. The RTC reiterated that the enactment of Republic Act
No. 305, which converted the Municipality of Naga into an independent city, had ipso facto ceased the power of
administrative control and supervision exercised by Camarines Sur over the property within the territorial
jurisdiction of the Municipality of Naga and vested into the City of Naga. The administrative control and
supervision exercised by Camarines Sur over Plaza Rizal, since the time of the creation of the City of Naga
and up to the time of the filing of the instant case, was by mere tolerance on the part of the said city.
Furthermore, the claim of ownership of Plaza Rizal by Camarines Sur was wanting, given that there was no
express legislative action therefor. Public streets, squares, plazas and the like, are not the private property of
either the City of Naga or Camarines Sur.
Camarines Sur received a copy of the RTC Order dated 1 September 1999, denying its Motion for
Reconsideration, on 3 September 1999. On 8 September 1999, Camarines Sur filed with the RTC a Notice of
Appeal.16 In an Order17 dated 13 September 1999, the RTC disapproved the Notice of Appeal for non25 | C o n s t i t u t i o n a l L a w I
compliance with the material data rule, which requires the statement of such data as will show that the appeal
was perfected on time.
On 13 September 1999, Camarines Sur filed a second Notice of Appeal, 18 which was again disapproved by the
RTC in an Order19 dated 14 September 1999 for having been filed outside of the reglementary period. The
RTC noted that Camarines Sur received a copy of the RTC Decision dated 10 March 1999 on 16 March 1999.
It thus had a period of 15 days therefrom to file a motion for reconsideration or appeal. Camarines Sur filed its
Motion for Reconsideration on 30 March 1999 or on the fourteenth day of the reglementary period. Said Motion
for Reconsideration was denied by the RTC in an Order dated 1 September 1999, which was received by
Camarines Sur on 3 September 1999. Thereafter, Camarines Sur only had two days left to file its Notice of
Appeal, but the province filed said Notice on 8 September 1999, or five days after receipt of the Order denying
its Motion for Reconsideration.201avvphi1
On 18 October 1999, Camarines Sur filed before the Court a Petition for Review on Certiorari, 21 which was
docketed as G.R. No. 139838. Camarines Sur questioned in its Petition the act of the RTC of giving due
course to the Complaint for Declaratory Relief and/or Quieting of Title and the interpretation of said trial court of
Section 2, Article 1 of Republic Act No. 305.
In a Resolution22 dated 17 November 1999, the Court referred the Petition for Review filed by Camarines Sur
to the Court of Appeals for appropriate action, holding that the latter had jurisdiction concurrent with that of the
former over the case, and no special and important reason was cited for the Court to take cognizance of the
case in the first instance. Before the appellate court, the Petition for Review of Camarines Sur was docketed as
CA-G.R. SP No. 56243.
On 28 June 2004, the Court of Appeals promulgated the assailed Decision denying the Petition in CA-G.R. SP
No. 56243. It pronounced:
We deny the petition.
Where an appeal would have been an adequate remedy but it was lost through petitioners inexcusable
negligence, certiorari is not in order. x x x Certiorari cannot be resorted to as a substitute for the lost remedy of
appeal x x x. It is notable that Camarines Sur took this recourse of petition for certiorari only after it twice
attempted to avail of appeal, but both of which were DISAPPROVED. Because it made these attempts to
appeal, it goes without saying that Camarines Sur believed that the errors it claimed were committed by the
court a quo were correctible only by appeal and not by certiorari. Thus, when it subsequently filed the instant
petition, it was availing of it as a disallowed substitute remedy for a lost appeal. Time and again it has been
ruled that [the] remedies of appeal and certiorari are mutually exclusive and not alternative or successive x x x.
But disregarding for the nonce the lost appeal and its disallowed substitution by certiorari, still the petition
would fail because of the absence of grave abuse of discretion. The court a quo had declared that:
The existence of the Municipality of Naga was governed by the provisions of Chapter 57 of the Old Revised
Administrative Code, otherwise known as the Regular Municipal Law. A law under which the municipalities in
regularly organized provinces like the province of Camarines Sur may be organized. As a consequence of its
creation, the Municipality of Naga acquired title to all the property, powers, rights and obligations falling within
its territorial limits (62 C.J.S. 193). Being a political subdivision created within an organized province, the
administration of the higher political subdivision, the province of Camarines Sur x x x has stood as trustee of all
the properties belonging to the State within its territorial limits. This is the legal and logical reason why[,] before
the conversion of the municipality of Naga to a City[,] [Camarines Sur] was exercising control and supervision
over Plaza Rizal. x x x
This finds support in one of the provisions of the old Administrative Code of the Philippine Islands where it was
provided that:
SEC. 2168. Beginning of the corporate existence of new municipality. x x x.
When a township or other local territorial division is converted or fused into a municipality all property rights
vested in the original territorial organization shall become vested in the government of the municipality. x x x.
When Naga was converted from a municipality into a city, all properties under its territorial jurisdiction including
Plaza Rizal was vested upon it.23 (Emphasis ours.)
The fallo of the Court of Appeals decision reads:
WHEREFORE, the petition is DENIED DUE COURSE and DISMISSED.24
Camarines Sur sought a reconsideration25 of the aforequoted Decision, but the Court of Appeals denied the
same in the assailed Resolution dated 11 August 2006.
Camarines Sur, thus, filed the instant Petition, raising the sole issue of:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT TREATED THE [PETITION
FOR REVIEW UNDER RULE 45 FILED BY CAMARINES SUR] AS ONE FOR CERTIORARI UNDER RULE 65
THEREBY DENYING DUE COURSE AND DISMISSING THE PETITION AND EVEN THE MOTION FOR
RECONSIDERATION ON THE GROUND THAT THE PETITION WAS AVAILED OF AS A SUBSTITUTE FOR
THE LOST APPEAL AND FOR ABSENCE OF GRAVE ABUSE OF DISCRETION.
Camarines Sur argues that the Court of Appeals went beyond its authority and gravely abused its discretion
when it treated and resolved the Petition for Review on Certiorari under Rule 45 of the Rules of Court as a
Petition for Certiorari under Rule 65, which must allege grave abuse of discretion on the part of the RTC, and
which cannot be made a substitute for a lost appeal. Camarines Sur insists that what it filed was a Petition
under Rule 45, which raised all reversible errors committed by the RTC and presented all questions of laws.
Moreover, as the Court of Appeals upheld the Decision dated 16 March 1999 of the RTC based on a wrong
premise and application of legal principles, Camarines Sur pleads for this Court to decide on the questions of
law raised in the dismissed Petition.
First, Camarines Sur avers that the filing of the Complaint for Declaratory Relief and/or Quieting of Title was
improper as it was hinged on a pretended controversy. Essentially, the complaint of the City of Naga did not
show "an active antagonistic assertion of a legal right, on one side, and a denial thereof, on the other." Such
action sought merely to create an unwarranted inference not of a clear right, but of a theoretical implication that
a property, even if not legally owned or possessed by a city, could be administratively controlled and managed
by it on the sheer expediency of being located within its territorial jurisdiction. Thus, there was no actual
controversy between Camarines Sur and the City of Naga, considering that Camarines Sur had always
managed and administratively controlled the same, the projects installed thereon and the programs and
activities held therein, without any question from the previous Mayors of the City of Naga or from any national
official, department, bureau or agency.
Second, Camarines Sur contends that since Plaza Rizal is admittedly located within the territorial jurisdiction of
the City of Naga, the question of law is whether the management and administrative control of said land should
be vested in the City of Naga, simply because of Article 1, Section 2 of the Charter of the City of Naga. Naga
never possessed administrative control and management of Plaza Rizal when it was still a municipality, and it
cannot be deemed to have been vested with the same, just because it was converted into the City of Naga
especially when the City admits it does not intend to acquire ownership of Plaza Rizal.
Petition for Review v. Petition for Certiorari
At the outset, the Court holds that the Court of Appeals indeed committed grave abuse of discretion amounting
to lack or excess of jurisdiction in erroneously and inexplicably resolving the Petition, which was initially filed by
Camarines Sur before the Court, but later referred to the appellate court, as if the same were a Petition for
Certiorari under Rule 65 of the Rules of Court. This mistake is evident in the preliminary statement of the case,
as found in the first paragraph of the Decision dated 28 June 2004, where the Court of Appeals stated that:
The petitioner Province of Camarines Sur (or Camarines Sur for brevity), represented by Gov. Luis Villafuerte,
asks through this Petition for Certiorari that the Decision of Branch 61 of the Regional Trial Court stationed at
Naga City x x x be reversed and set aside x x x.26 (Emphasis ours.)
For a Petition for Certiorari under Rule 65 of the Rules of Court to prosper, the following requisites must be
present: (1) the writ is directed against a tribunal, a board or an officer exercising judicial or quasi-judicial
functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law.27
There is grave abuse of discretion "when there is a capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, such as where the power is exercised in an arbitrary or despotic manner by
reason of passion or personal hostility, and it must be so patent and gross so as to amount to an evasion of
positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law."28
On the other hand, Rule 45 of the Rules of Court pertains to a Petition for Review on Certiorari, whereby "a
party desiring to appeal by certiorari from a judgment, final order or resolution of the x x x the Regional Trial
Court x x x, may file with the Supreme Court a verified petition for review on certiorari. The petition may include
an application for a writ of preliminary injunction or other provisional remedies and shall raise only questions of
law, which must be distinctly set forth."29
A perusal of the petition referred to the Court of Appeals lays bare the fact that the same was undoubtedly a
Petition for Review on Certiorari under Rule 45 of the Rules of Court. Not only does the title of the Petition
indicate it as such, but a close reading of the issues and allegations set forth therein also discloses that it
involved pure questions of law. A question of law arises when there is doubt as to what the law is on a certain
state of facts. For a question to be one of law, the same must not involve an examination of the probative value
of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what
the law provides on the given set of circumstances. 30 The Court of Appeals, thus, could not fault Camarines
Sur for failing to allege, much less prove, grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of the RTC when such is not required for a Petition for Review on Certiorari.
Likewise, the doctrine that certiorari cannot be resorted to as a substitute for the lost remedy of appeal applies
only when a party actually files a Petition for Certiorari under Rule 65 in lieu of a Petition for Review under Rule
45, since the latter remedy was already lost through the fault of the petitioning party. In the instant case,
Camarines Sur actually filed a Petition for Review under Rule 45; the Court of Appeals only mistook the same
for a Petition for Certiorari under Rule 65.
Be that as it may, the Court still finds that the questions of law invoked by Camarines Sur must be resolved
against it.
Declaratory Relief
Declaratory relief is defined as an action by any person interested in a deed, will, contract or other written
instrument, executive order or resolution, to determine any question of construction or validity arising from the
instrument, executive order or regulation, or statute; and for a declaration of his rights and duties thereunder. 31
The only issue that may be raised in such a petition is the question of construction or validity of provisions in an
instrument or statute.32
The requisites of an action for declaratory relief are: (1) there must be a justiciable controversy between
persons whose interests are adverse; (2) the party seeking the relief has a legal interest in the controversy;
and (3) the issue is ripe for judicial determination.33
The Court rules that the City of Naga properly resorted to the filing of an action for declaratory relief.
In the instant case, the controversy concerns the construction of the provisions of Republic Act No. 305 or the
Charter of the City of Naga. Specifically, the City of Naga seeks an interpretation of Section 2, Article I of its
Charter, as well as a declaration of the rights of the parties to this case thereunder.
To recall, Section 2, Article I of Republic Act No. 305 defines the territory of the City of Naga, providing that the
City shall comprise the present territorial jurisdiction of the Municipality of Naga. By virtue of this provision, the
City of Naga prays that it be granted the right to administratively control and supervise Plaza Rizal, which is
undisputedly within the territorial jurisdiction of the City.
Clearly, the interests of the City of Naga and Camarines Sur in this case are adverse. The assertion by the City
of Naga of a superior right to the administrative control and management of Plaza Rizal, because said property
of the public domain is within its territorial jurisdiction, is clearly antagonistic to and inconsistent with the
insistence of Camarines Sur. The latter asserted in its Complaint for Declaratory Relief and/or Quieting of Title
that it should maintain administrative control and management of Plaza Rizal having continuously possessed
the same under a claim of ownership, even after the conversion of the Municipality of Naga into an
independent component city. The City of Naga further asserted that as a result of the possession by
Camarines Sur, the City of Naga could not introduce improvements on Plaza Rizal; its constituents were
denied adequate use of said property, since Camarines Sur required that the latters permission must first be
sought for the use of the same; and it was still Camarines Sur that was able to continuously use Plaza Rizal for
its own programs and projects. The City of Naga undoubtedly has a legal interest in the controversy, given that
Plaza Rizal is undisputedly within its territorial jurisdiction. Lastly, the issue is ripe for judicial determination in
that, in view of the conflicting interests of the parties to this case, litigation is inevitable, and there is no
adequate relief available in any other form or proceeding.34
Administrative control and supervision of Plaza Rizal
Republic Act No. 305 took effect on 18 June 1948. At that time, the Spanish Civil Code of 1889 was still in
effect in the Philippines. Properties of local government units under the Spanish Civil Code were limited to
properties of public use and patrimonial property.35 Article 344 of the Spanish Civil Code provides:
Art. 344. Property of public use, in provinces and in towns, comprises the provincial and town roads, the
squares, streets, fountains, and public waters, the promenades, and public works of general service paid for by
such towns or provinces.
All other property possessed by either is patrimonial and shall be governed by the provisions of this code,
unless otherwise provided by special laws.
Under the 1950 Civil Code, the properties of local government units are set forth in Article 424 thereof, which
reads:
Art. 424. Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads, city
streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public
service paid for by said provinces, cities, or municipalities.
All other property possessed by any of them is patrimonial and shall be governed by this Code, without
prejudice to the provisions of special laws.
Manifestly, the definition of what constitutes the properties for public use and patrimonial properties of local
government units has practically remained unchanged.
As regards properties for public use, the principle is the same: property for public use can be used by
everybody, even by strangers or aliens, in accordance with its nature; but nobody can exercise over it the
rights of a private owner.36
It is, therefore, vital to the resolution of this case that the exact nature of Plaza Rizal be ascertained. In this
regard, the description thereof by Camarines Sur is enlightening, viz:
The land subject of the Action filed by the City of Naga against the Province of Camarines Sur was a garden
that served as the front lawn of the old capitol site in Naga. A monument in honor of our national hero was built
by the Provincial Government of Camarines Sur sometime in 1911 on a portion of subject land. Within the
same land, a structure as a memorial for Ninoy Aquino was also constructed by the Provincial Government of
Camarines Sur; and nearby, a stage in honor of President Manuel Quezon was also built. In the post-martial
[law] period there was inscribed in the wall of the said garden the following words: "Freedom Park of
Camarines Sur."
A historical marker was erected in the said place which attests to the long standing ownership, possession and
management by the Province of Camarines Sur of said place.
All the improvements in said place, such as the construction of monuments and memorial structures, the
concreting of its flooring and the walkways, planting of trees and ornamental plants, the construction of the
skating or skateboard ring, a public TV facility, an internet caf, a gazebo where people from all walks of life
discuss religion, political, social and economic issues, a portable stage where cultural shows are held, a giant
chessboard on the tiled ground with large pieces for playing, where portable booths are installed for the trade
fairs during fiesta or Christmas season, where year-round lights are wrapped around the trees, all of which
have been constructed, operated and maintained by the Province of Camarines Sur (not by Naga City) where
millions of pesos had been spent for construction and millions of pesos are budgeted annually for
maintenance, operating expenses and personnel services by the Province of Camarines Sur.37
Unmistakable from the above description is that, at present, Plaza Rizal partakes of the nature of a public park
or promenade. As such, Plaza Rizal is classified as a property for public use.
In Municipality of San Carlos, Pangasinan v. Morfe,38 the Court recognized that a public plaza is a public land
belonging to, and, subject to the administration and control of, the Republic of the Philippines. Absent an
express grant by the Spanish Government or that of the Philippines, the local government unit where the plaza
was situated, which in that case was the Municipality of San Carlos, had no right to claim it as its patrimonial
property. The Court further held that whatever right of administration the Municipality of San Carlos may have
exercised over said plaza was not proprietary, but governmental in nature. The same did not exclude the
national government. On the contrary, it was possessed on behalf and in representation thereof, the municipal
government of San Carlos being -- in the performance of its political functions -- a mere agency of the
Republic, acting for its benefit.
Applying the above pronouncements to the instant case, Camarines Sur had the right to administer and
possess Plaza Rizal prior to the conversion of the then Municipality of Naga into the independent City of Naga,
as the plaza was then part of the territorial jurisdiction of the said province. Said right of administration by
Camarines Sur was governmental in nature, and its possession was on behalf of and in representation of the
Republic of the Philippines, in the performance of its political functions.
Thereafter, by virtue of the enactment of Republic Act No. 305 and as specified in Section 2, Article I thereof,
the City of Naga was created out of the territory of the old Municipality of Naga. Plaza Rizal, which was located
in the said municipality, thereby ceased to be part of the territorial jurisdiction of Camarines Sur and was,
instead transferred to the territorial jurisdiction of the City of Naga. Theretofore, the local government unit that
is the proper agent of the Republic of the Philippines that should administer and possess Plaza Rizal is the City
of Naga.
Camarines Sur cannot claim that Plaza Rizal is part of its patrimonial property. The basis for the claim of
ownership of Camarines Sur, i.e., the tax declaration39 covering Plaza Rizal in the name of the province, hardly
convinces this Court. Well-settled is the rule that a tax declaration is not conclusive evidence of ownership or of
the right to possess land, when not supported by any other evidence. The same is merely an indicia of a claim
of ownership.40 In the same manner, the Certification 41 dated 14 June 1996 issued by the Department of
Environment and Natural ResourcesCommunity Environment and Natural Resources Office (DENR-CENRO)
in favor of Camarines Sur, merely stating that the parcel of land described therein, purportedly Plaza Rizal, was
being claimed solely by Camarines Sur, hardly constitutes categorical proof of the alleged ownership of the
said property by the province.
Thus, being a property for public use within the territorial jurisdiction of the City of Naga, Plaza Rizal should be
under the administrative control and supervision of the said city.
WHEREFORE, premises considered, the Petition for Certiorari under Rule 65 of the Rules of Court is hereby
DISMISSED. The administrative control and supervision of Plaza Rizal is hereby vested in the City of Naga.
Costs against petitioner.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 151084
July 2, 2010
PROVINCE OF CAMARINES SUR, represented by GOVERNOR LUIS R. VILLAFUERTE, Petitioner,

vs.
HEIRS OF AGUSTIN PATO, ADOLFO DEL VALLE BRUSAS and ZENAIDA BRUSAS; TRIFONA
FEDERIS, MAURICIO MEDIALDEA and NELSON TONGCO; MARIANO DE LOS ANGELES;
HEIRS OF MIGUEL PATO, ARACELI BARRAMEDA ACLAN and PONCIANO IRAOLA; HEIRS OF
CRESENCIA VDA. DE SAN JOAQUIN,* Respondents.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari, 1 under Rule 45 of the Rules of Court, seeking to set aside
the Resolutions of the Court of Appeals (CA) dated May 31, 2001 2 and November 19, 20013 in CA-G.R. CV
No. 69735.
The facts of the case are as follows:
Expropriation proceedings were initiated by petitioner Province of Camarines Sur against respondents Heirs of
Agustin Pato, Adolfo del Valle Brusas & Zenaida Brusas, Trifona Federis, Mauricio Medialdea & Nelson
Tongco, Mariano de los Angeles, Heirs of Miguel Pato, Araceli Barrameda Aclan and Ponciano Iraola sometime
in 1989 in the Regional Trial Court (RTC) of Pili, Camarines, Sur, Fifth Judicial Region, Branch 32. In the
proceedings which was docketed as Special Civil Action No. P-2-89, petitioner proposed to pay respondents
P20,000.00 per hectare, or P2.00 per square meter, as just compensation for their lands. Respondents resisted
the attempt of petitioner to expropriate their properties arguing, among others, that there was no public
necessity. Motions to Dismiss filed by respondents were, however, denied by the RTC. After a protracted
litigation that led to the appointment of Commissioners to determine the proper value of the properties, the RTC
rendered a Decision,4 the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered:
1. Expropriating, in favor of plaintiff Province, for the public use detailed in its complaint, and in Res.
No. 129, S. of 1998, the lands described in its pars. 1 and 4, consolidated complaint, as further described
its sketch plan, p. 361 records;
2. Condemning plaintiff to pay defendants as just compensation for the land, owned by defendants
named in the consolidated complaint and enumerated in Annex A as well as the improvements standing
thereon, at the time this decision is executed, and set forth in Annex C hereof, which is made an integral
part of this decision, with 6% interest per annum from the date cases were individually filed until paid;
and
3. Condemning plaintiff to pay Financial Assistance per E.O. 1035, Sec. 18 to the tenants mentioned in
the summary of the commissioners report and enumerated in Annex A; and to pay Commissioners Co,
Altar and Malali, P5,000.00 each, immediately.
NO COSTS.
SO ORDERED.5
The RTC ruled that the reasonable value of the lands to be expropriated were as follows:
Irrigated riceland P9.00 per sq. m.
Unirrigated riceland, coconut land, orchard P8.00 per sq. m.

Residential land P120.00 per sq. m.6
Petitioner filed a Motion for Reconsideration 7 to the RTC Decision, specifically arguing that the value of just
compensation should only be P20,000.00 per hectare, or P2.00 per square meter. Petitioner argued that such
value was the amount awarded by other RTCs in the area, which involved landholdings of the same condition as
that of the subject properties.
On June 9, 2000, the RTC issued an Omnibus Order 8 denying petitioners motion to reduce the valuations it
made.
On June 15, 2000, petitioner filed with the RTC a Notice of Appeal.9
On May 31, 2001, the CA issued a Resolution 10 dismissing the appeal of petitioner for failure to pay the docket
fees, thus:
xxxx
The Court RESOLVES to:
xxxx
(d) DISMISS the appeal of plaintiff-appellant Province of Camarines Sur for failure to pay the jurisdictional
requirement of payment of the docket fee pursuant to Sec. 1 (c) of the 1997 Rules of Civil Procedure.11
Aggrieved, petitioner filed a Motion for Reconsideration,12 which was, however, denied by the CA in a
Resolution13 dated November 19, 2001.
Hence, herein petition, with petitioner raising the following errors committed by the CA, to wit:
i.
THE COURT OF APPEALS GRAVELY ERRED AND GROSSLY ABUSED ITS DISCRETION IN
DISMISSING THE APPEAL OF HEREIN PETITIONER PROVINCE OF CAMARINES SUR AND IN
DENYING ITS MOTION FOR RECONSIDERATION SUCH DISMISSAL AND DENIAL BEING
ENTIRELY NOT IN ACCORD AND DIRECTLY IN CONTRAVENTION WITH THE APPLICABLE
DECISIONS OF THE SUPREME COURT IN THE INSTANT CASE, CONSIDERING THE ATTENDANT
CIRCUMSTANCES HEREIN WHICH JUSTIFY THE LIBERAL INTERPRETATION AND APPLICATION
OF THE RULES OF COURT.
ii.
THE COURT OF APPEALS SERIOUSLY ERRED IN DISMISSING THE APPEAL OF HEREIN
PETITIONER PROVINCE OF CAMARINES SUR SINCE SAID APPEAL IS EXCEPTIONALLY
MERITORIOUS AS THE APPEALED DECISION COMPLETELY DEPARTED FROM THE APPLICABLE
RULES AND DULY ESTABLISHED JURISPRUDENCE IN THE DETERMINATION OF JUST
COMPENSATION IN EXPROPRIATION CASES AND INSTEAD THE JUDGE IN THE LOWER COURT
USED HIS OWN PERSONAL VIEW AND BELIEF IN COMING UP WITH THE VALUATION OF THE
PROPERTY AS TO URGENTLY REQUIRE THE EXERCISE OF THE POWER OF JUDICIAL
INTERVENTION AND SUPERVISION BY THE COURT OF APPEALS.
iii.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT DENIED THE MOTION FOR
RECONSIDERATION FILED BY HEREIN PETITIONER AND AFFIRMED ITS RESOLUTION
DISMISSING THE APPEAL OF HEREIN PETITIONER PROVINCE BY CITING ONE CASE WHICH IS
NOT APPLICABLE IN THIS INSTANT CASE AND CITING ANOTHER WHICH IS, IN FACT, SUPPORT
OF THE APPEAL OF HEREIN PETITIONER.14
At the crux of the controversy is a determination of the propriety of the CAs resolution dismissing petitioners
appeal for failure to pay the docket fees. In its Motion for Reconsideration 15 before the CA, petitioner argued
that its failure to pay the docket fees was due to the honest inadvertence and excusable negligence of its former
counsel, Atty. Victor D.R. Catangui, to wit:
xxxx
1. The failure of the former counsel of herein Plaintiff-Appellant Province of Camarines Sur (the late
Atty. Victor D.R. Catangui) to pay or caused to be paid the appellate court docket fees was committed
through honest inadvertence and excusable negligence, since during the time that the notice of appeal
was filed, said counsel was already having health problems affecting his heart that substantially
distracted him from faithfully performing his duties and functions as Provincial Legal Officer, including
that as counsel of herein Plaintiff-Appellant Province of Camarines Sur in the above-entitled case;
2. That it was the same physical condition that forced him to resign as Provincial Legal Officer effective
January 2, 2001 as the distance between his office in Provincial Capitol Complex, Cadlan, Pili,
Camarines Sur and that of his residence in San Roque, Iriga City, which is, more or less than 27
kilometers is too much for him to physically endure;
3. That, notwithstanding his resignation from the Provincial Government of Camarines Sur and
subsequent transfer to a much nearer office in Iriga City, he nevertheless, sad to tell, unexpectedly
succumbed on March 2, 2001 at the age of 47. x x x16
This Court is not convinced. Time and time again, this Court has consistently held that the payment of docket
fees within the prescribed period is mandatory for the perfection of an appeal. Without such payment, the
appellate court does not acquire jurisdiction over the subject matter of the action and the decision sought to be
appealed from becomes final and executory.17
Records disclose that petitioners former counsel Atty. Catangui filed a Notice of Appeal on June 15, 2000. On
January 15, 2001, Atty. Catangui filed a Motion with the CA notifying the same that he was withdrawing as
counsel for petitioner. On May 31, 2001, the CA issued the first assailed Resolution, which noted the motion of
Atty. Catangui to withdraw as counsel and which also dismissed petitioners appeal for failure to pay the docket
fees. Said resolution was sent to petitioner via registered mail and was received by petitioners agent, a certain
Loningning Noora-Papa, as evidenced by the Registry Return Receipt. 18 It was only on August 2, 2001 that the
CA received the Entry of Appearance19 of petitioners new counsel, Atty. Elias A. Torallo, Jr. With the
appearance of Atty. Torallo, the CA resent the May 31, 2001 Resolution informing him of the dismissal of the
petition. On September 11, 2001, a day after receiving said Resolution, Atty. Torallo paid the corresponding
docket fees.
From the time Atty. Torallo paid the corresponding docket fees, approximately 15 months had already lapsed
from the time the notice of appeal was filed by petitioners former counsel Atty. Catangui. This is to this Courts
mind, already too late in the day.
While the strict application of the jurisdictional nature of the rule on payment of appellate docket fees may be
mitigated under exceptional circumstances to better serve the interest of justice, 20 such circumstances are not
present in the case at bar.
Petitioners attempt to pass the buck on the sickness of its former counsel, Atty. Catangui, is not a compelling
reason for this Court to relax the strict requirement for the timely payment of appellate docket fees. While this
Court expresses grief over the death of Atty. Catangui, his sickness 21 was not of such a nature which would have
impaired his mental faculties and one which would have prevented him from filing the docket fees. From the
time he filed a notice of appeal assailing the RTC Decision, Atty. Catangui was still the Provincial Legal Officer
for 6 months prior to his transfer to his new post at the National Commission on Indigenous Peoples. Even if the
corresponding docket fees were not paid upon the filing of the notice of appeal, still, Atty. Catangui could have
rectified the situation by paying the fees within the 15-day reglementary period to file an appeal. As manifested
by petitioner, Atty. Catangui was in the practice of law for 10 years, he should have, therefore, seen to it that the
stringent requirements for an appeal were complied with.
M. A. Santander Construction Inc. v. Villanueva22 is instructive, thus:

In the instant case, petitioner received a copy of the Decision of the trial court on March 3, 1998. Accordingly, it
had, pursuant to Section 3, Rule 41, until March 18, 1998 within which to perfect its appeal by filing within that
period the Notice of Appeal and paying the appellate docket and other legal fees. While petitioner filed the
Notice of Appeal on March 9, 1998, or within the reglementary period, however, it paid the required docket fees
only on November 13, 1998, or late by 7 months and 25 days.
The mere filing of the Notice of Appeal is not enough, for it must be accompanied by the payment of the correct
appellate docket fees. Payment in full of docket fees within the prescribed period is mandatory. It is an essential
requirement without which the decision appealed from would become final and executory as if no appeal had
been filed. Failure to perfect an appeal within the prescribed period is not a mere technicality but jurisdictional
and failure to perfect an appeal renders the judgment final and executory.
In Guevarra vs. Court of Appeals, where the docket fees were not paid in full within the prescribed period of
fifteen (15) days but were paid forty-one (41) days late due to "inadvertence, oversight, and pressure of work,"
we held that the Court of Appeals correctly dismissed the appeal. In Lee vs. Republic of the Philippines, where
half of the appellate docket fee was paid within the prescribed period, while the other half was tendered after the
period within which payment should have been made, we ruled that no appeal was perfected. Clearly, where the
appellate docket fee is not paid in full within the reglementary period, the decision of the trial court becomes
final and no longer susceptible to an appeal. For once a decision becomes final, the appellate court is without
jurisdiction to entertain the appeal.23
Withal, it bears to stress that Appeal is not a constitutional right, but a mere statutory privilege. It must be
exercised strictly in accordance with the provisions of the law and rules. Specifically, the payment of docket
fees within the period for perfecting an appeal is mandatory. In the present case, petitioner has not given
sufficient reason why it should be exempt from this stringent rule.
WHEREFORE, premises considered, the petition is DENIED. The Resolutions of the Court of Appeals, dated
May 31, 2001 and November 19, 2001, in CA-G.R. CV No. 69735, are AFFIRMED.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 156273
October 15, 2003
HEIRS OF TIMOTEO MORENO and MARIA ROTEA, namely: ESPERANZA R. EDJEC,

BERNARDA R. SUELA, RUBY C. ROTEA, BERNARDA R. ROTEA, ELIA R. VDA. DE LIMBAGA,
VIRGINIA R. ARBON, ROSALINDA R. ARQUISOLA, CORAZON ROTEA, FE R. EBORA,
CARIDAD ROTEA, ANGELES VDA. DE RENACIA, JORGE ROTEA, MARIA LUISA ROTEAVILLEGAS, ALFREDO R. ROTEA, represented by his heirs LIZBETH ROTEA and ELEPETH
ROTEA; LUIS ROTEA, represented by his heir JENNIFER ROTEA; and ROLANDO R. ROTEA,
represented by his heir ROLANDO R. ROTEA JR., petitioners,
vs.
MACTAN - CEBU INTERNATIONAL AIRPORT AUTHORITY, respondent.
DECISION
BELLOSILLO, J.:
THE HEIRS OF TIMOTEO MORENO AND MARIA ROTEA, petitioners herein, are the successors-in-interest
of the former registered owners of two (2) parcels of land situated in Lahug, Cebu City, designated as Lot No.
916 with an area of 2,355 square meters under TCT No. RT-7543 (106) T-13694, and Lot No. 920 consisting of
3,097 square meters under TCT No. RT-7544 (107) T-13695.1
In 1949 the National Airport Corporation as the predecessor agency of respondent Mactan-Cebu International
Airport Authority (MCIAA) wanted to acquire Lots Nos. 916 and 920 above described among other parcels of
land for the proposed expansion of Lahug Airport.2 To entice the landowners to cede their properties, the
government assured them that they could repurchase their lands once Lahug Airport was closed or its operations
transferred to Mactan Airport.3 Some of the landowners executed deeds of sale with right of repurchase in favor
of the government but many others, including the owners of Lots Nos. 916 and 920 herein mentioned, refused
the offer because the payment was perceived to be way below the market price.4
On 16 April 1952, as the negotiations for the purchase of the lots necessary for the expansion and improvement
of Lahug Airport irredeemably broke down, the Civil Aeronautics Administration as the successor agency of the
National Airport Corporation filed a complaint with the Court of First Instance of Cebu, for the expropriation of
Lots Nos. 916 and 920 and other subject realties, docketed as Civil Case No. R-1881.
On 29 December 1961 the trial court promulgated its Decision in Civil Case No. R-1881 condemning Lots Nos.
916 and 920 and other lots for public use upon payment of just compensation. 5 Petitioners predecessors were
paid P7,065.00 for Lot No. 916 and P9,291.00 for Lot No. 920 with consequential damages by way of legal
interest from 16 November 1947. No appeal was taken from the Decision on Lots Nos. 916 and 920, and the
judgment of condemnation became final and executory.6 Thereafter, the certificates of title for these parcels of
land were issued in the name of the Republic of the Philippines under TCT No. 58691 for Lot No. 916 and TCT
No. 58692 for Lot No. 920, which under RA 6958 (1990) were subsequently transferred in favor of respondent
MCIAA.7
At the end of 1991, or soon after the transfer of Lots Nos. 916 and 920 to MCIAA, Lahug Airport ceased
operations as the Mactan Airport was opened for incoming and outgoing flights.8 Lots Nos. 916 and 920 which
had been expropriated for the extension of Lahug Airport were not utilized. 9 In fact, no expansion of Lahug
Airport was undertaken by MCIAA and its predecessors-in-interest. 10 Hence, petitioners wrote then President
Fidel V. Ramos and the airport manager begging them for the exercise of their alleged right to repurchase Lots
Nos. 916 and 920.11 Their pleas were not heeded.12
On 11 March 1997 petitioners filed a complaint for reconveyance and damages with RTC of Cebu City against
respondent MCIAA to compel the repurchase of Lots Nos. 916 and 920, docketed as Civil Case No. CEB35 | C o n s t i t u t i o n a l L a w I
20015. In the main, petitioners averred that they had been convinced by the officers of the predecessor agency
of respondent MCIAA not to oppose the expropriation proceedings since in the future they could repurchase the
properties if the airport expansion would not push through. MCIAA did not object to petitioners evidence
establishing these allegations.
When the civil case was pending, one Richard E. Enchuan filed a Motion for Transfer of Interest alleging that
he acquired through deeds of assignment the rights of some of herein petitioners over Lots Nos. 916 and 920. 13
The Department of Public Works and Highways (DPWH) also sought to intervene in the civil case claiming that
it leased in good faith Lot No. 920 from the predecessor agencies of respondent MCIAA and that it built thereon
its Regional Equipment Services and its Region 7 Office.14
On 12 April 1999 the trial court found merit in the claims of petitioners and granted them the right to repurchase
the properties at the amount pegged as just compensation in Civil Case No. R-1881 but subject to the alleged
property rights of Richard E. Enchuan and the leasehold of DPWH. 15 The trial court opined that the
expropriation became illegal or functus officio when the purpose for which it was intended was no longer
there.16
Respondent MCIAA appealed the Decision of the trial court to the Court of Appeals, docketed as CA-G.R. CV
No. 64456.1vvphi1.nt
On 20 December 2001 the Court of Appeals reversed the assailed Decision on the ground that the judgment of
condemnation in Civil Case No. R-1881 was unconditional so that the rights gained therefrom by respondent
MCIAA were indicative of ownership in fee simple.17 The appellate court cited Fery v. Municpality of
Cabanatuan18 which held that mere deviation from the public purpose for which the power of eminent domain
was exercised does not justify the reversion of the property to its former owners, and Mactan-Cebu International
Airport Authority v. Court of Appeals19 which is allegedly stare decisis to the instant case to prevent the exercise
of the right of repurchase as the former dealt with a parcel of land similarly expropriated under Civil Case No.
R-1881.20
On 28 November 2002 reconsideration of the Decision was denied. 21 Hence, this petition for review.
Petitioners argue that Fery v. Municpality of Cabanatuan does not apply to the case at bar since what was
involved therein was the "right of reversion" and not the "right of repurchase" which they are invoking. They
also differentiate Mactan-Cebu International Airport Authority v. Court of Appeals22 from the instant case in that
the landowners in the MCIAA case offered inadmissible evidence to show their entitlement to a right of
repurchase, while petitioners herein offered evidence based on personal knowledge for which reason MCIAA
did not object and thus waived whatever objection it might have had to the admissibility thereof. Finally,
petitioners allege that their right to equal protection of the laws would be infringed if some landowners are
given the right to repurchase their former properties even as they are denied the exercise of such prerogative.
On the other hand, respondent MCIAA clings to our decisions in Fery v. Municpality of Cabanatuan and
Mactan-Cebu International Airport Authority v. Court of Appeals. According to respondent MCIAA "there is
only one instance when expropriated land may be repurchased by its previous owners, and that is, if the decision
of expropriation itself provides [the] condition for such repurchase." Respondent asserts that the Decision in
Civil Case No. R-1881 is absolute and without conditions, thus, no repurchase could be validly exercised.
This is a difficult case calling for a difficult but just solution. To begin with, there exists an undeniable historical
narrative that the predecessors of respondent MCIAA had suggested to the landowners of the properties covered
by the Lahug Airport expansion scheme that they could repurchase their properties at the termination of the
airports venture.23 Some acted on this assurance and sold their properties; 24 other landowners held out and
waited for the exercise of eminent domain to take its course until finally coming to terms with respondents
predecessors that they would not appeal nor block further the judgment of condemnation if the same right of
repurchase was extended to them.25 A handful failed to prove that they acted on such assurance when they
parted with the ownership of their lands.26
In resolving this dispute, we must reckon with the rulings of this Court in Fery v. Municpality of Cabanatuan
and Mactan-Cebu International Airport Authority v. Court of Appeals, which define the rights and obligations of
landowners whose properties were expropriated when the public purpose for which eminent domain was
exercised no longer subsists. In Fery, which was cited in the recent case of Reyes v. Court of Appeals, 27 we
declared that the government acquires only such rights in expropriated parcels of land as may be allowed by the
character of its title over the properties If x x x land is expropriated for a particular purpose, with the condition that when that purpose is ended or
abandoned the property shall return to its former owner, then, of course, when the purpose is terminated or
abandoned the former owner reacquires the property so expropriated. If x x x land is expropriated for a public
street and the expropriation is granted upon condition that the city can only use it for a public street, then, of
course, when the city abandons its use as a public street, it returns to the former owner, unless there is some
statutory provision to the contrary x x x x If, upon the contrary, however, the decree of expropriation gives to
the entity a fee simple title, then, of course, the land becomes the absolute property of the expropriator, whether
it be the State, a province, or municipality, and in that case the non-user does not have the effect of defeating the
title acquired by the expropriation proceedings x x x x When land has been acquired for public use in fee
simple, unconditionally, either by the exercise of eminent domain or by purchase, the former owner retains no
rights in the land, and the public use may be abandoned, or the land may be devoted to a different use, without
any impairment of the estate or title acquired, or any reversion to the former owner x x x x28
In Mactan-Cebu International Airport Authority, respondent Chiongbian sought to enforce an alleged right of
repurchase over her properties that had been expropriated in Civil Case No. R-1881. This Court did not allow
her to adduce evidence of her claim, for to do so would unsettle as to her properties the judgment of
condemnation in the eminent domain proceedings. We also held therein that Chiongbians evidence was both
inadmissible and lacking in probative value The terms of the judgment are clear and unequivocal and grant title to Lot No. 941 in fee simple to the Republic
of the Philippines. There was no condition imposed to the effect that the lot would return to CHIONGBIAN or
that CHIONGBIAN had a right to repurchase the same if the purpose for which it was expropriated is ended or
abandoned or if the property was to be used other than as the Lahug Airport. CHIONGBIAN cannot rely on the
ruling in Mactan-Cebu International Airport vs. Court of Appeals wherein the presentation of parol evidence
was allowed to prove the existence of a written agreement containing the right to repurchase. Said case did not
involve expropriation proceedings but a contract of sale x x x x To permit CHIONGBIAN to prove the
existence of a compromise settlement which she claims to have entered into with the Republic of the
Philippines prior to the rendition of judgment in the expropriation case would result in a modification of the
judgment of a court which has long become final and executory x x x x And even assuming for the sake of
argument that CHIONGBIAN could prove the existence of the alleged written agreement acknowledging her
right to repurchase Lot No. 941 through parol evidence, the Court of Appeals erred in holding that the evidence
presented by CHIONGBIAN was admissible x x x x Aside from being inadmissible under the provisions of the
Statute of Frauds, [the] testimonies are also inadmissible for being hearsay in nature x x x x29
We adhere to the principles enunciated in Fery and in Mactan-Cebu International Airport Authority, and do not
overrule them. Nonetheless the weight of their import, particularly our ruling as regards the properties of
respondent Chiongbian in Mactan-Cebu International Airport Authority, must be commensurate to the facts that
were established therein as distinguished from those extant in the case at bar. Chiongbian put forth inadmissible
and inconclusive evidence, while in the instant case we have preponderant proof as found by the trial court of
the existence of the right of repurchase in favor of petitioners.
Moreover, respondent MCIAA has brought to our attention a significant and telling portion in the Decision in
Civil Case No. R-1881 validating our discernment that the expropriation by the predecessors of respondent was
ordered under the running impression that Lahug Airport would continue in operation As for the public purpose of the expropriation proceeding, it cannot now be doubted. Although Mactan Airport
is being constructed, it does not take away the actual usefulness and importance of the Lahug Airport: it is
handling the air traffic both civilian and military. From it aircrafts fly to Mindanao and Visayas and pass thru it
on their flights to the North and Manila. Then, no evidence was adduced to show how soon is the Mactan
Airport to be placed in operation and whether the Lahug Airport will be closed immediately thereafter. It is up
to the other departments of the Government to determine said matters. The Court cannot substitute its judgment
for those of the said departments or agencies. In the absence of such showing, the Court will presume that the
Lahug Airport will continue to be in operation (emphasis supplied).301awphi1.nt
While the trial court in Civil Case No. R-1881 could have simply acknowledged the presence of public purpose
for the exercise of eminent domain regardless of the survival of Lahug Airport, the trial court in its Decision
chose not to do so but instead prefixed its finding of public purpose upon its understanding that "Lahug Airport
will continue to be in operation." Verily, these meaningful statements in the body of the Decision warrant the
conclusion that the expropriated properties would remain to be so until it was confirmed that Lahug Airport was
no longer "in operation." This inference further implies two (2) things: (a) after the Lahug Airport ceased its
undertaking as such and the expropriated lots were not being used for any airport expansion project, the rights
vis--vis the expropriated Lots Nos. 916 and 920 as between the State and their former owners, petitioners
herein, must be equitably adjusted; and, (b) the foregoing unmistakable declarations in the body of the Decision
should merge with and become an intrinsic part of the fallo thereof which under the premises is clearly
inadequate since the dispositive portion is not in accord with the findings as contained in the body thereof.31
Significantly, in light of the discussion above, the admission of petitioners during the pre-trial of Civil Case No.
CEB-20015 for reconveyance and damages that respondent MCIAA was the absolute owner of Lots Nos. 916
and 920 does not prejudice petitioners interests. This is as it should be not only because the admission concerns
a legal conclusion fiercely debated by the parties32 but more so since respondent was truly the absolute owner of
the realties until it was apparent that Lahug Airport had stopped doing business.
To sum up what we have said so far, the attendance in the case at bar of standing admissible evidence validating
the claim of petitioners as well as the portions above-quoted of the Decision in the expropriation case
volunteered no less than by respondent itself, takes this case away from the ambit of Mactan-Cebu International
Airport Authority v. Court of Appeals 33 but within the principles enunciated in Fery as mentioned earlier. In
addition, there should be no doubt that our present reading of the fallo of the Decision in Civil Case No. R-1881
so as to include the statements in the body thereof afore-quoted is sanctioned by the rule that a final and
executory judgment may nonetheless be "clarified" by reference to other portions of the decision of which it
forms a part. In Republic v. De Los Angeles34 we ruled This Court has promulgated many cases x x x wherein it was held that a judgment must not be read separately
but in connection with the other portions of the decision of which it forms a part. Hence x x x the decision of the
court below should be taken as a whole and considered in its entirety to get the true meaning and intent of any
particular portion thereof x x x x Neither is this Court inclined to confine itself to a reading of the said fallo
literally. On the contrary, the judgment portion of a decision should be interpreted and construed in harmony
with the ratio decidendi thereof x x x x As stated in the case of Policarpio vs. Philippine Veterans Board, et al.,
supra, to get the true intent and meaning of a decision, no specific portion thereof should be resorted to but the
same must be considered in its entirety. Hence, a resolution or ruling may and does appear in other parts of the
decision and not merely in the fallo thereof x x x x The foregoing pronouncements find support in the case of
Locsin, et al. vs. Paredes, et al., 63 Phil., 87, 91-92, wherein this Court allowed a judgment that had become
final and executory to be "clarified" by supplying a word which had been inadvertently omitted and which,
when supplied, in effect changed the literal import of the original phraseology x x x x This is so because, in the
first place, if an already final judgment can still be amended to supply an omission committed through
oversight, this simply means that in the construction or interpretation of an already final decision, the fallo or
dispositive portion thereof must be correlated with the body of such final decision x x x x [I]f an amendment
may be allowed after a decision has already become final x x x such amendment may consist x x x either in the
x x x interpretation of an ambiguous phrase therein in relation to the body of the decision which gives it life.35
We now resolve to harmonize the respective rights of the State and petitioners to the expropriated Lots Nos. 916
and 920.
Mactan-Cebu International Airport Authority36 is correct in stating that one would not find an express statement
in the Decision in Civil Case No. R-1881 to the effect that "the [condemned] lot would return to [the
landowner] or that [the landowner] had a right to repurchase the same if the purpose for which it was
expropriated is ended or abandoned or if the property was to be used other than as the Lahug Airport." This
omission notwithstanding, and while the inclusion of this pronouncement in the judgment of condemnation
would have been ideal, such precision is not absolutely necessary nor is it fatal to the cause of petitioners
herein. No doubt, the return or repurchase of the condemned properties of petitioners could be readily justified
as the manifest legal effect or consequence of the trial courts underlying presumption that "Lahug Airport will
continue to be in operation" when it granted the complaint for eminent domain and the airport discontinued its
activities.
The predicament of petitioners involves a constructive trust, one that is akin 37 to the implied trust referred to in
Art. 1454 of the Civil Code, "If an absolute conveyance of property is made in order to secure the performance
of an obligation of the grantor toward the grantee, a trust by virtue of law is established. If the fulfillment of the
obligation is offered by the grantor when it becomes due, he may demand the reconveyance of the property to
him." In the case at bar, petitioners conveyed Lots Nos. 916 and 920 to the government with the latter obliging
itself to use the realties for the expansion of Lahug Airport; failing to keep its bargain, the government can be
compelled by petitioners to reconvey the parcels of land to them, otherwise, petitioners would be denied the use
of their properties upon a state of affairs that was not conceived nor contemplated when the expropriation was
authorized.
Although the symmetry between the instant case and the situation contemplated by Art. 1454 is not perfect, the
provision is undoubtedly applicable. For, as explained by an expert on the law of trusts: "The only problem of
great importance in the field of constructive trusts is to decide whether in the numerous and varying fact
situations presented to the courts there is a wrongful holding of property and hence a threatened unjust
enrichment of the defendant."38 Constructive trusts are fictions of equity which are bound by no unyielding
formula when they are used by courts as devices to remedy any situation in which the holder of the legal title
may not in good conscience retain the beneficial interest.39
In constructive trusts, the arrangement is temporary and passive in which the trustees sole duty is to transfer the
title and possession over the property to the plaintiff-beneficiary.40 Of course, the "wronged party seeking the
aid of a court of equity in establishing a constructive trust must himself do equity." 41 Accordingly, the court will
exercise its discretion in deciding what acts are required of the plaintiff-beneficiary as conditions precedent to
obtaining such decree and has the obligation to reimburse the trustee the consideration received from the latter
just as the plaintiff-beneficiary would if he proceeded on the theory of rescission. 42 In the good judgment of the
court, the trustee may also be paid the necessary expenses he may have incurred in sustaining the property, his
fixed costs for improvements thereon, and the monetary value of his services in managing the property to the
extent that plaintiff-beneficiary will secure a benefit from his acts.43
The rights and obligations between the constructive trustee and the beneficiary, in this case, respondent MCIAA
and petitioners over Lots Nos. 916 and 920, are echoed in Art. 1190 of the Civil Code, "When the conditions
have for their purpose the extinguishment of an obligation to give, the parties, upon the fulfillment of said
conditions, shall return to each other what they have received x x x x In case of the loss, deterioration or
improvement of the thing, the provisions which, with respect to the debtor, are laid down in the preceding
article shall be applied to the party who is bound to return x x x x"
Hence, respondent MCIAA as representative of the State is obliged to reconvey Lots Nos. 916 and 920 to
petitioners who shall hold the same subject to existing liens thereon, i.e., leasehold right of DPWH. In return,
petitioners as if they were plaintiff-beneficiaries of a constructive trust must restore to respondent MCIAA what
they received as just compensation for the expropriation of Lots Nos. 916 and 920 in Civil Case No. R-1881,
i.e., P7,065.00 for Lot No. 916 and P9,291.00 for Lot No. 920 with consequential damages by way of legal
interest from 16 November 1947. Petitioners must likewise pay respondent MCIAA the necessary expenses it
may have incurred in sustaining the properties and the monetary value of its services in managing them to the
extent that petitioners will be benefited thereby. The government however may keep whatever income or fruits
it may have obtained from the parcels of land, in the same way that petitioners need not account for the interests
that the amounts they received as just compensation may have earned in the meantime. As a matter of justice
and convenience, the law considers the fruits and interests as the equivalent of each other.44
Under Art. 1189 of the Civil Code, "If the thing is improved by its nature, or by time, the improvement shall
inure to the benefit of the creditor x x x," the creditor being the person who stands to receive something as a
result of the process of restitution. Consequently, petitioners as creditors do not have to settle as part of the
process of restitution the appreciation in value of Lots Nos. 916 and 920 which is the natural consequence of
nature and time.
Petitioners need not also pay for improvements introduced by third parties, i.e., DPWH, as the disposition of
these properties is governed by existing contracts and relevant provisions of law. As for the improvements that
respondent MCIAA may have made on Lots Nos. 916 and 920, if any, petitioners must pay respondent their
prevailing free market price in case petitioners opt to buy them and respondent decides to sell. In other words, if
petitioners do not want to appropriate such improvements or respondent does not choose to sell them, the
improvements would have to be removed without any obligation on the part of petitioners to pay any
compensation to respondent MCIAA for whatever it may have tangibly introduced therein.45
The medium of compensation for the restitution shall be ready money or cash payable within a period of three
hundred sixty five (365) days from the date that the amount to be returned by petitioners is determined with
finality, unless the parties herein stipulate and agree upon a different scheme, medium or schedule of payment.
If after the period of three hundred sixty five (365) days or the lapse of the compromise scheme or schedule of
payment such amount owed is not settled, the right of repurchase of petitioners and the obligation of respondent
MCIAA to reconvey Lots Nos. 916 and 920 and/or the latters improvements as set forth herein shall be deemed
forfeited and the ownership of those parcels of land shall vest absolutely upon respondent MCIAA.
Finally, we delete the award of P60,000.00 for attorneys fees and P15,000.00 for litigation expenses in favor of
petitioners as decreed in the assailed Decision of 12 April 1999 of the trial court. It is not sound public policy to
set a premium upon the right to litigate where such right is exercised in good faith, as in the present case, albeit
the decision to resist the claim is erroneous.46
The rule on awards of attorneys fees and litigation expenses is found in Art. 2208 of the Civil Code In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be
recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to
incur expenses to protect his interests;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's valid
and demandable claim;1awphi1.nt
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
As noted in Mirasol v. De la Cruz, 47 Art. 2208 intends to retain the award of attorneys fees as the exception in
our law and the general rule remains that attorneys fees are not recoverable in the absence of a stipulation
thereto.
In the case at bar, considering the established absence of any stipulation regarding attorneys fees, the trial court
cannot base its award on any of the exceptions enumerated in Art. 2208. The records of the instant case do not
disclose any proof presented by petitioners to substantiate that the actuations of respondent MCIAA were
clearly unfounded or purely for the purpose of harassment; neither does the trial court make any finding to that
effect in its appealed Decision.
While Art. 2208, par. (4), allows attorneys fees in cases of clearly unfounded civil actions, this exception must
be understood to mean those where the defenses are so untenable as to amount to gross and evident bad faith.
Evidence must be presented to the court as to the facts and circumstances constituting the alleged bad faith,
otherwise, the award of attorneys fees is not justified where there is no proof other than the bare statement of
harassment that a party to be so adjudged had acted in bad faith. The exercise of judicial discretion in the award
of attorneys fees under Art. 2208, par. (11), demands a factual, legal or equitable justification that would bring
the case within the exception and justify the grant of such award.
WHEREFORE, the instant Petition for Review is GRANTED. The Decision of the Court of Appeals in CAG.R. CV No. 64456 dated 20 December 2001 and its Resolution of 28 November 2002 denying reconsideration
of the Decision are REVERSED and SET ASIDE.
The Decision of RTC-Br. 19 of Cebu City dated 12 April 1999 in Civil Case No. CEB-20015 is MODIFIED IN
PART by (a) ORDERING respondent Mactan-Cebu International Airport Authority (MCIAA) TO RECONVEY to
petitioner Heirs of Timoteo Moreno and Maria Rotea, namely: Esperanza R. Edjec, Bernarda R. Suela,
Ruby C. Rotea, Bernarda R. Rotea, Elia R. Vda De Limbaga, Virginia R. Arbon, Rosalinda R. Arquisola,
Corazon Rotea, Fe R. Ebora, Caridad Rotea, Angeles Vda. De Renacia, Jorge Rotea, Maria Luisa RoteaVillegas, Alfredo R. Rotea, represented by his heirs, namely: Lizbeth Rotea and Elepeth Rotea; Luis
Rotea, represented by his heir Jennifer Rotea; and Rolando R. Rotea, represented by his heir Rolando R.
Rotea Jr., Lot No. 916 with an area of 2,355 square meters and Lot No. 920 consisting of 3,097 square
meters in Lahug, Cebu City, with all the improvements thereon evolving through nature or time, but
excluding those that were introduced by third parties, i.e., DPWH, which shall be governed by existing
contracts and relevant provisions of law;
(b) ORDERING petitioner Heirs of Timoteo Moreno and Maria Rotea TO PAY respondent MCIAA
what the former received as just compensation for the expropriation of Lots Nos. 916 and 920 in Civil
Case No. R-1881, i.e., P7,065.00 for Lot No. 916 and P9,291.00 for Lot No. 920 with consequential
damages by way of legal interest from 16 November 1947. Petitioners must likewise PAY respondent
MCIAA the necessary expenses that the latter may have incurred in sustaining the properties and the
monetary value of its services in managing the properties to the extent that petitioners will secure a
benefit from such acts. Respondent MCIAA however may keep whatever income or fruits it may have
obtained from the parcels of land, in the same way that petitioners need not account for the interests that
the amounts they received as just compensation may have earned in the meantime;
(c) ORDERING respondent MCIAA TO CONVEY to petitioners the improvements it may have built on
Lots Nos. 916 and 920, if any, in which case petitioners SHALL PAY for these improvements at the
prevailing free market price, otherwise, if petitioners do not want to appropriate such improvements, or
if respondent does not choose to sell them, respondent MCIAA SHALL REMOVE these improvements
WITHOUT ANY OBLIGATION on the part of petitioners to pay any compensation to respondent
MCIAA for them;
(d) ORDERING petitioners TO PAY the amount so determined under letter (b) of this dispositive portion
as consideration for the reconveyance of Lots Nos. 916 and 920, as well as the prevailing free market
price of the improvements built thereon by respondent MCIAA, if any and desired to be bought and sold
by the parties, in ready money or cash PAYABLE within a period of three hundred sixty five (365) days
from the date that the amount under letter (b) above is determined with finality, unless the parties herein
stipulate a different scheme or schedule of payment, otherwise, after the period of three hundred sixty
five (365) days or the lapse of the compromise scheme or schedule of payment and the amount so
payable is not settled, the right of repurchase of petitioners and the obligation of respondent MCIAA to
so reconvey Lots Nos. 916 and 920 and/or the improvements shall be DEEMED FORFEITED and the
ownership of those parcels of land shall VEST ABSOLUTELY upon respondent MCIAA;
(e) REMANDING the instant case to RTC-Br. 19 of Cebu City for purposes of determining the amount
of compensation for Lots Nos. 916 and 920 to be paid by petitioners as mandated in letter (b) hereof,
and the value of the prevailing free market price of the improvements built thereon by respondent
MCIAA, if any and desired to be bought and sold by the parties, and in general, securing the immediate
execution of this Decision under the premises;
(f) ORDERING petitioners to respect the right of the Department of Public Works and Highways to its
lease contract until the expiration of the lease period; and
(g) DELETING the award of P60,000.00 for attorneys fees and P15,000.00 for litigation expenses
against respondent MCIAA and in favor of petitioners.
This Decision is without prejudice to the claim of intervenor one Richard E. Enchuan on his allegation that he
acquired through deeds of assignment the rights of some of herein petitioners over Lots Nos. 916 and 920.
No costs.
SO ORDERED.
Quisumbing, Austria-Martinez, Callejo, and Tinga, JJ., concur.

Supreme Court: Eusebio N, Rodolfo N., All Surnamed Aguilar, Defendants." Petitioner Sought To Expropriate Three

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Supreme Court: Eusebio N, Rodolfo N., All Surnamed Aguilar, Defendants." Petitioner Sought To Expropriate Three

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Republic of the Philippines

January 29, 2001

CITY OF MANDALUYONG, petitioner,

Republic of the Philippines

MR. LORENZO CHING CUANCO

Republic of the Philippines

January 20, 2003

MARINA Z. REYES; ALFREDO A. FRANCISCO; ANGELITA Z. GARCIA; ALFREDO Z. FRANCISCO, JR;

Republic of the Philippines

September 18, 2009

PROVINCE OF CAMARINES SUR, represented by Governor LUIS RAYMUND F. VILLAFUERTE, Jr.,

Republic of the Philippines

PROVINCE OF CAMARINES SUR, represented by GOVERNOR LUIS R. VILLAFUERTE, Petitioner,

Unirrigated riceland, coconut land, orchard P8.00 per sq. m.

M. A. Santander Construction Inc. v. Villanueva22 is instructive, thus:

Republic of the Philippines

October 15, 2003

HEIRS OF TIMOTEO MORENO and MARIA ROTEA, namely: ESPERANZA R. EDJEC,

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