[Eminent Domain]

Forfom Development Corporation v. PNR

G.R. No. 124795, December 10, 2008
Ponente: Justice Chico-Nazario
Facts:
P owned land in San Pedro, Laguna. 1972, PFMarcos approved a project to be implemented by PNR for the
installation of railroads from San Pedro to Carmona. Ps property portion of 100Ksq.m were traversed as right-ofway. 1990, P filed to recover possession of the property, alleging R with military men, against Ps will, occupied the
property and installed railroad facilities, and rented out portions along the tracks to squatters, and despite demands,
PR failed to pay. P also prayed for rent, unrealized income, damages. PR said it had authority of law, but denied
leasing to tenants, and said acquisition was by consent of former owner, Dr. Limcaoco, and acquisition was through
negotiations with respective owners, and no crop was damaged in the acquisition. PR said former PFMarcos
approved the project to serve as squatters resettlement, that respective owners were paid just compensation.
Ps witnesses: one worked with Dr. Limcaoco from1951 until his death, and P was owned by his children, said in
1972, forcible taking of property portions, installed railroads, destroying 11hectares of sugar land, even leased.
Another officer witness presented documents showing transfer of ownership from Dr. Limcaoco to P, but disclosed
notes saying Dr. Limcaoco still owned the land, corroborated by daughter and EVP of P, that armed men took the
property without any court order. Both TCTs were in Ps name, and OCTs were in Dr. Limcaocos name. For PR, the
right-of-way was acquired to provide efficient means of transporting squatters who were relocated in Cavite, the
commuter line for service rather than profit. Allegedly, the lots of P were not paid because P could not present titles,
which had been used as mortgage elsewhere. The witness said PNR employees were not allowed to settle on PNRs
right of way, and squatting had never been encouraged. TC for P, CA increasing compensation. P unsatisfied,
appealed. PNR no longer appealed.
Issue:
Whether or not P can recover possession because PNR failed to file any expropriation case and pay just
compensation.
Held:
Eminent domain inherent, indispensable power of State, need not be conferred by constitution. Restraints are public
use and just compensation, exercised by the Legislature. May be delegated to LGUs, public entities, utilities. PNR,
under charter, has expropriation power. Circumstances present in taking for eminent domain: (1) expropriator must
enter private property; (2) entrance into must be for more than a momentary period; (3) entry should be under legal
authority; (4) property must be devoted to public purpose or otherwise informally, appropriately or injuriously
affected; and (5) utilization of property for public use must be in a way as to oust owner, deprive him of all
beneficial enjoyment of property.
PNR entered private land. Entrance permanent, PNR in control since 1972. Entry with Presidents approval,
authorization from PNR Board. Property for public use, with P deprived of material and beneficial use. The taking is
within constitutional sense.
But P impliedly accepted fact of taking when it negotiated for just compensation, knowing well no expropriation
case was filed at all. Ps inaction for almost 18years to question absence of proceedings and discussions with PNR
waived right, estoppel. No remedy for recovery, only damages and compensation, due to irremedial injury to
railroad company and public in general. Interruption of public service causes loss and inconvenience to all
passengers and shippers using the line. Public policy, if not public necessity, demands owner be denied ordinary
remedies of ejectment and injunction. Fact that railroad company can expropriate land implies denial of usual
remedies. Owner who stands by without objection, cannot, after completion of project, reclaim land, but can file for
damages for value of land, injuries to him by construction or operation, or for company to secure condemnation of
land and pay. Land recovery and possession cannot be allowed on grounds of estoppel and public policy imposing
upon public utility obligation to continue services to the public. Non-filing will not necessarily lead to return of
property. Non-payment of just compensation does not entitle recovery of possession.

And due to estoppel, P cannot object to PRs lease of land to 3rd parties, since it impliedly acquiesced to PRs
authority to expropriate. The leasing is for public use, such requisite being flexible and evolving influenced by
changing conditions. Whatever is beneficially employed for general welfare satisfies public use requirement. Public
use has now been held to be synonymous with public interest, public benefit, public welfare, and public
convenience. Includes the broader notion of indirect public benefit or advantage. Whatever may be beneficially
employed for the general welfare satisfies the requirement of public use. The leasing was an incidental power and in
response to governments social housing project, that to prevent squatting, special strict contracts entered into to
vacate leased property upon notice. Public because addresses shortage of housing, concern of state, directly affecting
public health, environment, general welfare.
Just compensation: court appoints max3 competent, disinterested persons as commissioners to report just
compensation for property. Though ascertainment is judicial prerogative, appointment of commissioners is
mandatory in expropriation cases. While commission findnigs may be disregarded, court substituting own values,
may only do so for valid reasons, e.g. where they applied illegal principles to submitted evidence, where disregarded
clear preponderance of evidence, or where amount allowed is grossly inadequate or excessive. So trial with
commissioners is substantive right, cannot be done away with capriciously.
Here, no appointments made. So valuation ineffectual. Where actual taking made without proceedings, and owner
sought recovery prior to filing of expropriation proceedings, it is value at time of taking. Here, should be from
taking on 1/1973, but comissioners must first be appointed. But PNRs occupation for 18years entitles payment of
interest. No return of leased portions, or rent, because right was impliedly turned over to PNR. PR directed to
institute expropriation proceedings.