Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-14355 October 31, 1919

THE CITY OF MANILA, plaintiff-appellant,

vs.
CHINESE COMMUNITY OF MANILA, ET AL., defendants-appellees.

City Fiscal Diaz for appellant.

Crossfield and O'Brien, Williams, Ferrier and Sycip, Delgado and Delgado,
Filemon Sotto, and Ramon Salinas for appellees.

JOHNSON, J.:

The important question presented by this appeal is: In expropriation

proceedings by the city of Manila, may the courts inquire into, and hear proof
upon, the necessity of the expropriation?

That question arose in the following manner:

On the 11th day of December, 1916, the city of Manila presented a petition
in the Court of First Instance of said city, praying that certain lands, therein
particularly described, be expropriated for the purpose of constructing a
public improvement. The petitioner, in the second paragraph of the petition,
alleged:
That for the purpose of constructing a public improvement, namely,
the extension of Rizal Avenue, Manila, it is necessary for the plaintiff to
acquire ownership in fee simple of certain parcels of land situated in
the district of Binondo of said city within Block 83 of said district, and
within the jurisdiction of this court.

The defendant, the Comunidad de Chinos de Manila [Chinese Community of

Manila], answering the petition of the plaintiff, alleged that it was a
corporation organized and existing under and by virtue of the laws of the
Philippine Islands, having for its purpose the benefit and general welfare of
the Chinese Community of the City of Manila; that it was the owner of parcels
one and two of the land described in paragraph 2 of the complaint; that it
denied that it was either necessary or expedient that the said parcels be
expropriated for street purposes; that existing street and roads furnished
ample means of communication for the public in the district covered by such
proposed expropriation; that if the construction of the street or road should
be considered a public necessity, other routes were available, which would
fully satisfy the plaintiff's purposes, at much less expense and without
disturbing the resting places of the dead; that it had a Torrens title for the
lands in question; that the lands in question had been used by the defendant
for cemetery purposes; that a great number of Chinese were buried in said
cemetery; that if said expropriation be carried into effect, it would disturb the
resting places of the dead, would require the expenditure of a large sum of
money in the transfer or removal of the bodies to some other place or site
and in the purchase of such new sites, would involve the destruction of
existing monuments and the erection of new monuments in their stead, and
would create irreparable loss and injury to the defendant and to all those
persons owning and interested in the graves and monuments which would
have to be destroyed; that the plaintiff was without right or authority to
expropriate said cemetery or any part or portion thereof for street purposes;
and that the expropriation, in fact, was not necessary as a public
improvement.
The defendant Ildefonso Tambunting, answering the petition, denied each
and every allegation of the complaint, and alleged that said expropriation
was not a public improvement; that it was not necessary for the plaintiff to
acquire the parcels of land in question; that a portion of the lands in question
was used as a cemetery in which were the graves of his ancestors; that
monuments and tombstones of great value were found thereon; that the land
had become quasi-public property of a benevolent association, dedicated
and used for the burial of the dead and that many dead were buried there;
that if the plaintiff deemed it necessary to extend Rizal Avenue, he had
offered and still offers to grant a right of way for the said extension over
other land, without cost to the plaintiff, in order that the sepulchers, chapels
and graves of his ancestors may not be disturbed; that the land so offered,
free of charge, would answer every public necessity on the part of the
plaintiff.

The defendant Feliza Concepcion de Delgado, with her husband, Jose Maria
Delgado, and each of the other defendants, answering separately, presented
substantially the same defense as that presented by the Comunidad de
Chinos de Manila and Ildefonso Tambunting above referred to.
The foregoing parts of the defense presented by the defendants have been
inserted in order to show the general character of the defenses presented by
each of the defendants. The plaintiff alleged that the expropriation was
necessary. The defendants each alleged (a) that no necessity existed for said
expropriation and (b) that the land in question was a cemetery, which had
been used as such for many years, and was covered with sepulchres and
monuments, and that the same should not be converted into a street for
public purposes.

Upon the issue thus presented by the petition and the various answers, the
Honorable Simplicio del Rosario, judge, in a very elucidated opinion, with
very clear and explicit reasons, supported by ambulance of authorities,
decided that there was no necessity for the expropriation of the particular
strip of land in question, and absolved each and all of the defendants from all
liability under the complaint, without any finding as to costs.

From that judgment the plaintiff appealed and presented the above question
as its principal ground of appeal.

The theory of the plaintiff is, that once it has established the fact, under the
law, that it has authority to expropriate land, it may expropriate any land it
may desire; that the only function of the court in such proceedings is to
ascertain the value of the land in question; that neither the court nor the
owners of the land can inquire into the advisible purpose of purpose of the
expropriation or ask any questions concerning the necessities therefor; that
the courts are mere appraisers of the land involved in expropriation
proceedings, and, when the value of the land is fixed by the method adopted
by the law, to render a judgment in favor of the defendant for its value.

That the city of Manila has authority to expropriate private lands for public
purposes, is not denied. Section 2429 of Act No. 2711 (Charter of the city of
Manila) provides that "the city (Manila) . . . may condemn private property
for public use."

The Charter of the city of Manila contains no procedure by which the said
authority may be carried into effect. We are driven, therefore, to the
procedure marked out by Act No. 190 to ascertain how the said authority
may be exercised. From an examination of Act No. 190, in its section 241, we
find how the right of eminent domain may be exercised. Said section 241
provides that, "The Government of the Philippine Islands, or of any province
or department thereof, or of any municipality, and any person, or public or
private corporation having, by law, the right to condemn private property for
public use, shall exercise that right in the manner hereinafter prescribed."

Section 242 provides that a complaint in expropriation proceeding shall be

presented; that the complaint shall state with certainty the right of
condemnation, with a description of the property sought to be condemned
together with the interest of each defendant separately.

Section 243 provides that if the court shall find upon trial that the right to
expropriate the land in question exists, it shall then appoint commissioners.

Sections 244, 245 and 246 provide the method of procedure and duty of the
commissioners. Section 248 provides for an appeal from the judgment of the
Court of First Instance to the Supreme Court. Said section 248 gives the
Supreme Court authority to inquire into the right of expropriation on the part
of the plaintiff. If the Supreme Court on appeal shall determine that no right
of expropriation existed, it shall remand the cause to the Court of First
Instance with a mandate that the defendant be replaced in the possession of
the property and that he recover whatever damages he may have sustained
by reason of the possession of the plaintiff.

It is contended on the part of the plaintiff that the phrase in said section,
"and if the court shall find the right to expropriate exists," means simply that,
if the court finds that there is some law authorizing the plaintiff to
expropriate, then the courts have no other function than to authorize the
expropriation and to proceed to ascertain the value of the land involved; that
the necessity for the expropriation is a legislative and not a judicial question.

Upon the question whether expropriation is a legislative function exclusively,

and that the courts cannot intervene except for the purpose of determining
the value of the land in question, there is much legal legislature. Much has
been written upon both sides of that question. A careful examination of the
discussions pro and con will disclose the fact that the decisions depend
largely upon particular constitutional or statutory provisions. It cannot be
denied, if the legislature under proper authority should grant the
expropriation of a certain or particular parcel of land for some specified
public purpose, that the courts would be without jurisdiction to inquire into
the purpose of that legislation.

If, upon the other hand, however, the Legislature should grant general
authority to a municipal corporation to expropriate private land for public
purposes, we think the courts have ample authority in this jurisdiction, under
the provisions above quoted, to make inquiry and to hear proof, upon an
issue properly presented, concerning whether or not the lands were private
and whether the purpose was, in fact, public. In other words, have no the
courts in this jurisdiction the right, inasmuch as the questions relating to
expropriation must be referred to them (sec. 241, Act No. 190) for final
decision, to ask whether or not the law has been complied with? Suppose in
a particular case, it should be denied that the property is not private
property but public, may not the courts hear proof upon that question? Or,
suppose the defense is, that the purpose of the expropriation is not public
but private, or that there exists no public purpose at all, may not the courts
make inquiry and hear proof upon that question?

The city of Manila is given authority to expropriate private lands for public
purposes. Can it be possible that said authority confers the right to
determine for itself that the land is private and that the purpose is public,
and that the people of the city of Manila who pay the taxes for its support,
especially those who are directly affected, may not question one or the
other, or both, of these questions? Can it be successfully contended that the
phrase used in Act No. 190, "and if the court upon trial shall find that such
right exists," means simply that the court shall examine the statutes simply
for the purpose of ascertaining whether a law exists authorizing the
petitioner to exercise the right of eminent domain? Or, when the case arrives
in the Supreme Court, can it be possible that the phrase, "if the Supreme
Court shall determine that no right of expropriation exists," that that simply
means that the Supreme Court shall also examine the enactments of the
legislature for the purpose of determining whether or not a law exists
permitting the plaintiff to expropriate?

We are of the opinion that the power of the court is not limited to that
question. The right of expropriation is not an inherent power in a municipal
corporation, and before it can exercise the right some law must exist
conferring the power upon it. When the courts come to determine the
question, they must only find (a) that a law or authority exists for the
exercise of the right of eminent domain, but (b) also that the right or
authority is being exercised in accordance with the law. In the present case
there are two conditions imposed upon the authority conceded to the City of
Manila: First, the land must be private; and, second, the purpose must be
public. If the court, upon trial, finds that neither of these conditions exists or
that either one of them fails, certainly it cannot be contended that the right
is being exercised in accordance with law.

Whether the purpose for the exercise of the right of eminent domain is
public, is a question of fact. Whether the land is public, is a question of fact;
and, in our opinion, when the legislature conferred upon the courts of the
Philippine Islands the right to ascertain upon trial whether the right exists for
the exercise of eminent domain, it intended that the courts should inquire
into, and hear proof upon, those questions. Is it possible that the owner of
valuable land in this jurisdiction is compelled to stand mute while his land is
being expropriated for a use not public, with the right simply to beg the city
of Manila to pay him the value of his land? Does the law in this jurisdiction
permit municipalities to expropriate lands, without question, simply for the
purpose of satisfying the aesthetic sense of those who happen for the time
being to be in authority? Expropriation of lands usually calls for public
expense. The taxpayers are called upon to pay the costs. Cannot the owners
of land question the public use or the public necessity?

As was said above, there is a wide divergence of opinion upon the authority
of the court to question the necessity or advisability of the exercise of the
right of eminent domain. The divergence is usually found to depend upon
particular statutory or constitutional provisions.

It has been contended and many cases are cited in support of that
contention, and section 158 of volume 10 of Ruling Case Law is cited as
conclusive that the necessity for taking property under the right of
eminent domain is not a judicial question. But those who cited said section
evidently overlooked the section immediately following (sec. 159), which
adds: "But it is obvious that if the property is taken in the ostensible behalf of
a public improvement which it can never by any possibility serve, it is being
taken for a use not public, and the owner's constitutional rights call for
protection by the courts. While many courts have used sweeping expression
in the decisions in which they have disclaimed the power of supervising the
power of supervising the selection of the sites of public improvements, it
may be safely said that the courts of the various states would feel bound to
interfere to prevent an abuse of the discretion delegated by the legislature,
by an attempted appropriation of land in utter disregard of the possible
necessity of its use, or when the alleged purpose was a cloak to some
sinister scheme." (Norwich City vs. Johnson, 86 Conn., 151; Bell vs. Mattoon
Waterworks, etc. Co., 245 Ill., 544; Wheeling, etc. R. R. Co. vs. Toledo Ry. etc.
Co., 72 Ohio St., 368; State vs. Stewart, 74 Wis., 620.)

Said section 158 (10 R. C. L., 183) which is cited as conclusive authority in
support of the contention of the appellant, says:

The legislature, in providing for the exercise of the power of eminent

domain, may directly determine the necessity for appropriating private
property for a particular improvement for public use, and it may select
the exact location of the improvement. In such a case, it is well settled
that the utility of the proposed improvement, the extent of the public
necessity for its construction, the expediency of constructing it, the
suitableness of the location selected and the consequent necessity of
taking the land selected for its site, are all questions exclusively for the
legislature to determine, and the courts have no power to interfere, or
to substitute their own views for those of the representatives of the
people.

Practically every case cited in support of the above doctrine has been
examined, and we are justified in making the statement that in each case
the legislature directly determined the necessity for the exercise of the right
of eminent domain in the particular case. It is not denied that if the necessity
for the exercise of the right of eminent domain is presented to the legislative
department of the government and that department decides that there
exists a necessity for the exercise of the right in a particular case, that then
and in that case, the courts will not go behind the action of the legislature
and make inquiry concerning the necessity. But, in the case of Wheeling, etc.
R. R. Co. vs. Toledo, Ry, etc., Co. (72 Ohio St., 368 [106 Am. St. rep., 622,
628]), which was cited in support of the doctrine laid down in section 158
above quoted, the court said:

But when the statute does not designate the property to be taken nor
how may be taken, then the necessity of taking particular property is a
question for the courts. Where the application to condemn or
appropriate is made directly to the court, the question (of necessity)
should be raised and decided in limene.

The legislative department of the government was rarely undertakes to

designate the precise property which should be taken for public use. It has
generally, like in the present case, merely conferred general authority to take
land for public use when a necessity exists therefor. We believe that it can be
confidently asserted that, under such statute, the allegation of the necessity
for the appropriation is an issuable allegation which it is competent for the
courts to decide. (Lynch vs. Forbes, 161 Mass., 302 [42 Am. St. Rep., 402,
407].)

There is a wide distinction between a legislative declaration that a

municipality is given authority to exercise the right of eminent domain, and a
decision by the municipality that there exist a necessity for the exercise of
that right in a particular case. The first is a declaration simply that there exist
reasons why the right should be conferred upon municipal corporation, while
the second is the application of the right to a particular case. Certainly, the
legislative declaration relating to the advisability of granting the power
cannot be converted into a declaration that a necessity exists for its exercise
in a particular case, and especially so when, perhaps, the land in question
was not within the territorial authority was granted.

Whether it was wise, advisable, or necessary to confer upon a municipality

the power to exercise the right of eminent domain, is a question with which
the courts are not concerned. But when that right or authority is exercised
for the purpose of depriving citizens of their property, the courts are
authorized, in this jurisdiction, to make inquiry and to hear proof upon the
necessity in the particular case, and not the general authority.

Volume 15 of the Cyclopedia of Law and Procedure (Cyc.), page 629, is cited
as a further conclusive authority upon the question that the necessity for the
exercise of the right of eminent domain is a legislative and not a judicial
question. Cyclopedia, at the page stated, says:

In the absence of some constitutional or statutory provision to the

contrary, the necessity and expediency of exercising the right of
eminent domain are questions essentially political and not judicial in
their character. The determination of those questions (the necessity
and the expediency) belongs to the sovereign power; the legislative
department is final and conclusive, and the courts have no power to
review it (the necessity and the expediency) . . . . It (the legislature)
may designate the particular property to be condemned, and its
determination in this respect cannot be reviewed by the courts.

The volume of Cyclopedia, above referred to, cites many cases in support of
the doctrine quoted. While time has not permitted an examination of all of
said citations, many of them have been examined, and it can be confidently
asserted that said cases which are cited in support of the assertion that, "the
necessity and expediency of exercising the right of eminent domain are
questions essentially political and not judicial," show clearly and invariably
that in each case the legislature itself usually, by a special law, designated
the particular case in which the right of eminent domain might be exercised
by the particular municipal corporation or entity within the state. (Eastern R.
Co. vs. Boston, etc., R. Co., 11 Mass., 125 [15 Am. Rep., 13]; Brooklyn Park
Com'rs vs. Armstrong, 45 N.Y., 234 [6 Am. Rep., 70]; Hairston vs. Danville,
etc. Ry. Co., 208 U. S. 598; Cincinnati vs. Louisville, etc. Ry. Co., 223 U. S.,
390; U.S. vs. Chandler-Dunbar Water Power Co., 229 U. S., 53; U.S. vs.
Gettysburg, etc. Co., 160 U. S., 668; Traction Co. vs. Mining Co., 196 U.S.,
239; Sears vs. City of Akron, 246 U.S., 351 [erroneously cited as 242 U.S.].)

In the case of Traction Co. vs. Mining Co. (196 U.S., 239), the Supreme Court
of the United States said: "It is erroneous to suppose that the legislature is
beyond the control of the courts in exercising the power of eminent domain,
either as to the nature of the use or the necessity to the use of any particular
property. For if the use be not public or no necessity for the taking exists, the
legislature cannot authorize the taking of private property against the will of
the owner, notwithstanding compensation may be required."

In the case of School Board of Carolina vs. Saldaa (14 Porto Rico, 339, 356),
we find the Supreme Court of Porto Rico, speaking through Justice MacLeary,
quoting approvingly the following, upon the question which we are
discussing: "It is well settled that although the legislature must necessarily
determine in the first instance whether the use for which they
(municipalities, etc.) attempt to exercise the power is a public one or not,
their (municipalities, etc.) determination is not final, but is subject to
correction by the courts, who may undoubtedly declare the statute
unconstitutional, if it shall clearly appear that the use for which it is proposed
to authorize the taking of private property is in reality not public but private."
Many cases are cited in support of that doctrine.

Later, in the same decision, we find the Supreme Court of Porto Rico says:
"At any rate, the rule is quite well settled that in the cases under
consideration the determination of the necessity of taking a particular piece
or a certain amount of land rests ultimately with the courts." (Spring Valley
etc. Co. vs. San Mateo, etc. Co., 64 Cal., 123.) .
In the case of Board of Water Com'rs., etc. vs. Johnson (86 Conn., 571 [41 L.
R. A., N. S., 1024]), the Supreme Court of Connecticut approvingly quoted the
following doctrine from Lewis on Eminent Domain (3d ed.), section 599: "In
all such cases the necessity of public utility of the proposed work or
improvement is a judicial question. In all such cases, where the authority is
to take property necessary for the purpose, the necessity of taking particular
property for a particular purpose is a judicial one, upon which the owner is
entitled to be heard." (Riley vs. Charleston, etc. Co., 71 S. C., 457, 489 [110
Am. St. Rep., 579]; Henderson vs. Lexington 132 Ky., 390, 403.)

The taking of private property for any use which is not required by the
necessities or convenience of the inhabitants of the state, is an unreasonable
exercise of the right of eminent domain, and beyond the power of the
legislature to delegate. (Bennett vs. Marion, 106 Iowa, 628, 633; Wilson vs.
Pittsburg, etc. Co., 222 Pa. St., 541, 545; Greasy, etc. Co. vs. Ely, etc. Co.,
132 Ky., 692, 697.)

In the case of New Central Coal Co. vs. George's etc. Co. (37 Md., 537, 564),
the Supreme Court of the State of Maryland, discussing the question before
us, said: "To justify the exercise of this extreme power (eminent domain)
where the legislature has left it to depend upon the necessity that may be
found to exist, in order to accomplish the purpose of the incorporation, as in
this case, the party claiming the right to the exercise of the power should be
required to show at least a reasonable degree of necessity for its exercise.
Any rule less strict than this, with the large and almost indiscriminate
delegation of the right to corporations, would likely lead to oppression and
the sacrifice of private right to corporate power."

In the case of Dewey vs. Chicago, etc. Co. (184 Ill., 426, 433), the court said:
"Its right to condemn property is not a general power of condemnation, but is
limited to cases where a necessity for resort to private property is shown to
exist. Such necessity must appear upon the face of the petition to condemn.
If the necessary is denied the burden is upon the company (municipality) to
establish it." (Highland, etc. Co. vs. Strickley, 116 Fed., 852, 856; Kiney vs.
Citizens' Water & Light Co., 173 Ind., 252, 257 ; Bell vs. Mattoon Waterworks,
etc. Co., 245 Ill., 544 [137 Am. St. Rep. 338].)

It is true that naby decisions may be found asserting that what is a public
use is a legislative question, and many other decisions declaring with equal
emphasis that it is a judicial question. But, as long as there is a constitutional
or statutory provision denying the right to take land for any use other than a
public use, it occurs to us that the question whether any particular use is a
public one or not is ultimately, at least, a judicial question. The legislative
may, it is true, in effect declare certain uses to be public, and, under the
operation of the well-known rule that a statute will not be declared to be
unconstitutional except in a case free, or comparatively free, from doubt, the
courts will certainly sustain the action of the legislature unless it appears
that the particular use is clearly not of a public nature. The decisions must be
understood with this limitation; for, certainly, no court of last resort will be
willing to declare that any and every purpose which the legislative might
happen to designate as a public use shall be conclusively held to be so,
irrespective of the purpose in question and of its manifestly private character
Blackstone in his Commentaries on the English Law remarks that, so great is
the regard of the law for private property that it will not authorize the least
violation of it, even for the public good, unless there exists a very great
necessity therefor.

In the case of Wilkinson vs. Leland (2 Pet. [U.S.], 657), the Supreme Court of
the United States said: "That government can scarcely be deemed free
where the rights of property are left solely defendant on the legislative body,
without restraint. The fundamental maxims of free government seem to
require that the rights of personal liberty and private property should be held
sacred. At least no court of justice in this country would be warranted in
assuming that the power to violate and disregard them a power so
repugnant to the common principles of justice and civil liberty lurked in
any general grant of legislature authority, or ought to be implied from any
general expression of the people. The people ought no to be presumed to
part with rights so vital to their security and well-being without very strong
and direct expression of such intention." (Lewis on Eminent Domain, sec.
603; Lecoul vs. Police Jury 20 La. Ann., 308; Jefferson vs. Jazem, 7 La. Ann.,
182.)

Blackstone, in his Commentaries on the English Law said that the right to
own and possess land a place to live separate and apart from others to
retain it as a home for the family in a way not to be molested by others is
one of the most sacred rights that men are heirs to. That right has been
written into the organic law of every civilized nation. The Acts of Congress of
July 1, 1902, and of August 29, 1916, which provide that "no law shall be
enacted in the Philippine Islands which shall deprive any person of his
property without due process of law," are but a restatement of the time-
honored protection of the absolute right of the individual to his property.
Neither did said Acts of Congress add anything to the law already existing in
the Philippine Islands. The Spaniard fully recognized the principle and
adequately protected the inhabitants of the Philippine Islands against the
encroachment upon the private property of the individual. Article 349 of the
Civil Code provides that: "No one may be deprived of his property unless it
be by competent authority, for some purpose of proven public utility, and
after payment of the proper compensation Unless this requisite (proven
public utility and payment) has been complied with, it shall be the duty of
the courts to protect the owner of such property in its possession or to
restore its possession to him , as the case may be."

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, and
the rule in that case is that the authority must be strictly construed. No
species of property is held by individuals with greater tenacity, and none is
guarded by the constitution and laws more sedulously, than the right to the
freehold of inhabitants. When the legislature interferes with that right, and,
for greater public purposes, appropriates the land of an individual without his
consent, the plain meaning of the law should not be enlarged by doubtly
interpretation. (Bensely vs. Mountainlake Water Co., 13 Cal., 306 and cases
cited [73 Am. Dec., 576].)

The statutory power of taking property from the owner without his consent is
one of the most delicate exercise of government authority. It is to be watched
with jealous scrutiny. Important as the power may be to the government, the
inviolable sanctity which all free constitutions attach to the right of property
of the citizens, constrains the strict observance of the substantial provisions
of the law which are prescribed as modes of the exercise of the power, and
to protect it from abuse. Not only must the authority of municipal
corporations to take property be expressly conferred and the use for which it
is taken specified, but the power, with all constitutional limitation and
directions for its exercise, must be strictly pursued. (Dillon on Municipal
Corporations [5th Ed.], sec. 1040, and cases cited; Tenorio vs. Manila
Railroad Co., 22 Phil., 411.)

It can scarcely be contended that a municipality would be permitted to take

property for some public use unless some public necessity existed therefor.
The right to take private property for public use originates in the necessity,
and the taking must be limited by such necessity. The appellant contends
that inasmuch as the legislature has given it general authority to take private
property for public use, that the legislature has, therefore, settled the
question of the necessity in every case and that the courts are closed to the
owners of the property upon that question. Can it be imagined, when the
legislature adopted section 2429 of Act No. 2711, that it thereby declared
that it was necessary to appropriate the property of Juan de la Cruz, whose
property, perhaps, was not within the city limits at the time the law was
adopted? The legislature, then, not having declared the necessity, can it be
contemplated that it intended that a municipality should be the sole judge of
the necessity in every case, and that the courts, in the face of the provision
that "if upon trial they shall find that a right exists," cannot in that trial
inquire into and hear proof upon the necessity for the appropriation in a
particular case?

The Charter of the city of Manila authorizes the taking of private property for
public use. Suppose the owner of the property denies and successfully
proves that the taking of his property serves no public use: Would the courts
not be justified in inquiring into that question and in finally denying the
petition if no public purpose was proved? Can it be denied that the courts
have a right to inquire into that question? If the courts can ask questions and
decide, upon an issue properly presented, whether the use is public or not, is
not that tantamount to permitting the courts to inquire into the necessity of
the appropriation? If there is no public use, then there is no necessity, and if
there is no necessity, it is difficult to understand how a public use can
necessarily exist. If the courts can inquire into the question whether a public
use exists or not, then it seems that it must follow that they can examine
into the question of the necessity.

The very foundation of the right to exercise eminent domain is a genuine

necessity, and that necessity must be of a public character. The
ascertainment of the necessity must precede or accompany, and not follow,
the taking of the land. (Morrison vs. Indianapolis, etc. Ry. Co., 166 Ind., 511;
Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co.,
72 Ohio St., 368.)

The general power to exercise the right of eminent domain must not be
confused with the right to exercise it in a particular case. The power of the
legislature to confer, upon municipal corporations and other entities within
the State, general authority to exercise the right of eminent domain cannot
be questioned by the courts, but that general authority of municipalities or
entities must not be confused with the right to exercise it in particular
instances. The moment the municipal corporation or entity attempts to
exercise the authority conferred, it must comply with the conditions
accompanying the authority. The necessity for conferring the authority upon
a municipal corporation to exercise the right of eminent domain is
admittedly within the power of the legislature. But whether or not the
municipal corporation or entity is exercising the right in a particular case
under the conditions imposed by the general authority, is a question which
the courts have the right to inquire into.

The conflict in the authorities upon the question whether the necessity for
the exercise of the right of eminent domain is purely legislative and not
judicial, arises generally in the wisdom and propriety of the legislature in
authorizing the exercise of the right of eminent domain instead of in the
question of the right to exercise it in a particular case. (Creston Waterworks
Co. vs. McGrath, 89 Iowa, 502.)

By the weight of authorities, the courts have the power of restricting the
exercise of eminent domain to the actual reasonable necessities of the case
and for the purposes designated by the law. (Fairchild vs. City of St. Paul. 48
Minn., 540.)

And, moreover, the record does not show conclusively that the plaintiff has
definitely decided that their exists a necessity for the appropriation of the
particular land described in the complaint. Exhibits 4, 5, 7, and E clearly
indicate that the municipal board believed at one time that other land might
be used for the proposed improvement, thereby avoiding the necessity of
distributing the quiet resting place of the dead.

Aside from insisting that there exists no necessity for the alleged
improvements, the defendants further contend that the street in question
should not be opened through the cemetery. One of the defendants alleges
that said cemetery is public property. If that allegations is true, then, of
course, the city of Manila cannot appropriate it for public use. The city of
Manila can only expropriate private property.

It is a well known fact that cemeteries may be public or private. The former is
a cemetery used by the general community, or neighborhood, or church,
while the latter is used only by a family, or a small portion of the community
or neighborhood. (11 C. J., 50.)
Where a cemetery is open to public, it is a public use and no part of the
ground can be taken for other public uses under a general authority. And this
immunity extends to the unimproved and unoccupied parts which are held in
good faith for future use. (Lewis on Eminent Domain, sec. 434, and cases
cited.)

The cemetery in question seems to have been established under

governmental authority. The Spanish Governor-General, in an order creating
the same, used the following language:

The cemetery and general hospital for indigent Chinese having been
founded and maintained by the spontaneous and fraternal contribution
of their protector, merchants and industrials, benefactors of mankind,
in consideration of their services to the Government of the Islands its
internal administration, government and regime must necessarily be
adjusted to the taste and traditional practices of those born and
educated in China in order that the sentiments which animated the
founders may be perpetually effectuated.

It is alleged, and not denied, that the cemetery in question may be used by
the general community of Chinese, which fact, in the general acceptation of
the definition of a public cemetery, would make the cemetery in question
public property. If that is true, then, of course, the petition of the plaintiff
must be denied, for the reason that the city of Manila has no authority or
right under the law to expropriate public property.

But, whether or not the cemetery is public or private property, its

appropriation for the uses of a public street, especially during the lifetime of
those specially interested in its maintenance as a cemetery, should be a
question of great concern, and its appropriation should not be made for such
purposes until it is fully established that the greatest necessity exists
therefor.

While we do not contend that the dead must not give place to the living, and
while it is a matter of public knowledge that in the process of time sepulchres
may become the seat of cities and cemeteries traversed by streets and daily
trod by the feet of millions of men, yet, nevertheless such sacrifices and such
uses of the places of the dead should not be made unless and until it is fully
established that there exists an eminent necessity therefor. While cemeteries
and sepulchres and the places of the burial of the dead are still within
the memory and command of the active care of the living; while they are still
devoted to pious uses and sacred regard, it is difficult to believe that even
the legislature would adopt a law expressly providing that such places, under
such circumstances, should be violated.

In such an appropriation, what, we may ask, would be the measure of

damages at law, for the wounded sensibilities of the living, in having the
graves of kindred and loved ones blotted out and desecrated by a common
highway or street for public travel? The impossibility of measuring the
damage and inadequacy of a remedy at law is too apparent to admit of
argument. To disturb the mortal remains of those endeared to us in life
sometimes becomes the sad duty of the living; but, except in cases of
necessity, or for laudable purposes, the sanctity of the grave, the last resting
place of our friends, should be maintained, and the preventative aid of the
courts should be invoked for that object. (Railroad Company vs. Cemetery
Co., 116 Tenn., 400; Evergreen Cemetery Association vs. The City of New
Haven, 43 Conn., 234; Anderson vs. Acheson, 132 Iowa, 744; Beatty vs.
Kurtz, 2 Peters, 566.)

In the present case, even granting that a necessity exists for the opening of
the street in question, the record contains no proof of the necessity of
opening the same through the cemetery. The record shows that adjoining
and adjacent lands have been offered to the city free of charge, which will
answer every purpose of the plaintiff.

For all of the foregoing, we are fully persuaded that the judgment of the
lower court should be and is hereby affirmed, with costs against the
appellant. So ordered.

Arellano, C.J., Torres, Araullo and Avancea, JJ., concur.

Separate Opinions

MALCOLM, J., concurring:

The Government of the Philippine Islands is authorized by the Philippine Bill
to acquire real estate for public use by the exercise of the right of eminent
domain. (Act of Congress of July 1, 1902, sec. 63.) A portion of this power has
been delegated by the Philippine Legislature to the city of Manila, which is
permitted to "condemn private property for public use." (Administrative Code
of 1917, sec. 2429.) The Code of Civil Procedure, in prescribing how the right
of eminent domain may be exercised, also limits the condemnation to
"private property for public use." (Sec. 241.) As under the facts actually
presented, there can be no question that a public street constitutes a public
use, the only remaining question is whether or not the Chinese Cemetery
and the other property here sought to be taken by the exercise of the right of
eminent domain is "private property."

As narrowing our inquiry still further, let it be noted that cemeteries are of
two classes, public and private. A public cemetery is one used by the general
community, or neighborhood, or church; while a private cemetery is one
used only by a family, or small portion of a community. (Lay vs. State, 12 Ind.
App., 362; Cemetery Association vs. Meninger [1875], 14 Kan., 312.) Our
specific question, then, is, whether the Chinese Cemetery in the city of
Manila is a public, or a private graveyard. If it be found to be the former, it is
not subject to condemnation by the city of Manila; if it be found to be the
latter, it is subject to condemnation.

The Chinese Cemetery of Manila was established during the Spanish

administration in the Philippines by public spirited Chinese. The order of the
Governor-General giving governmental recognition to the cemetery reads as
follows: "The cemetery and general hospital for indigent Chinese having
been founded and maintained by the spontaneous and fraternal contribution
of their protectors, merchants and industrials, benefactors of mankind, in
consideration of their services to the Government of the Islands, its internal
administration, government and regime, must necessarily be adjusted to the
taste and traditional practices of those born and educated in China in order
that the sentiments which animated the founders may be perpetually
effectuated." Sometimes after the inauguration of the new regime in the
Philippines, a corporation was organized to control the cemetery, and a
Torrens title for the lands in question was obtained.

From the time of its creation until the present the cemetery has been used
by the Chinese community for the burial of their dead. It is said that not less
than four hundred graves, many of them with handsome monuments, would
be destroyed by the proposed street. This desecration is attempted as to the
las t resting places of the dead of a people who, because of their peculiar
and ingrained ancestral workship, retain more than the usual reverence for
the departed. These facts lead us straight to the conclusion that the Chinese
Cemetery is not used by a family or a small portion of a community but by a
particular race long existing in the country and of considerable numbers. The
case, then, is one of where the city of Manila, under a general authority
permitting it to condemn private property for public use, is attempting to
convert a property already dedicated to a public use to an entirely different
public use; and this, not directly pursuant to legislative authority, but
primarily through the sole advice of the consulting architect.

Two well considered decisions coming from the American state courts on
almost identical facts are worthy of our consideration. The first is the case of
The Evergreen Cemetery Association vs. The City of New Haven ([1875], 43
Conn., 234), of cited by other courts. Here the City of New Haven,
Connecticut, under the general power conferred upon it to lay out, construct,
and maintain all necessary highways within its limits, proceeded to widen
and straighten one of its streets and in so doing took a small piece of land
belonging to the Evergreen Cemetery Association. This association was
incorporated under the general statute. The city had no special power to
take any part of the cemetery for such purposes. It was found that the land
taken was needed for the purposes of the cemetery and was not needed for
the purpose of widening and straightening the avenue. The court said that it
is unquestionable that the Legislature has the power to authorize the taking
of land already applied to one public use and devote it to another. When the
power is granted to municipal or private corporations in express words, no
question can arise. But, it was added, "The same land cannot properly be
used for burial lots and for a public highway at the same time. . . . Land
therefore applied to one use should not be taken for the other except in
cases on necessity. . . . There is no difficulty in effecting the desired
improvement by taking land on the other side of the street. . . . The idea of
running a public street, regardless of graves, monuments, and the feelings of
the living, through one of our public cemeteries, would be shocking to the
moral sense of the community, and would not be tolerated except upon the
direst necessity." It was then held that land already devoted to a public use
cannot be taken by the public for another use which is inconsistent with the
first, without special authority from the Legislature, or authority granted by
necessary and reasonable implication.
The second decision is that of Memphis State Line Railroad Company vs.
Forest Hill Cemetery Co. ([1906], 116 Tenn., 400.) Here the purpose of the
proceedings was to condemn a right of way for the railway company through
the Forest Hill Cemetery. The railroad proposed to run through the southeast
corner of the cemetery where no bodies were interred. The cemetery had
been in use for about eight years, and during this period thirteen hundred
bodies had been buried therein. The cemetery was under the control of a
corporation which, by its character, held itself out as being willing to sell lots
to any one who applies therefor and pays the price demanded, except to
members of the Negro race.1awph!l.net

It was found that there were two other routes along which the railroad might
be located without touching the cemetery, while the present line might be
pursued without interfering with Forest Hill Cemetery by making a curve
around it. In the court below the railroad was granted the right of
condemnation through the cemetery and damages were assessed. On
appeal, the certiorari applied for was granted, and the supersedeas awarded.
The court, in effect, found that the land of the Cemetery Company was
devoted to a public purpose, and that under the general language of the
Tennessee statute of eminent domain it could not be taken for another public
purpose. The court said that in process of time the sepulchres of the dead
"are made the seats of cities, and are traversed by streets, and daily trodden
by the feet of man. This is inevitable in the course of ages. But while these
places are yet within the memory and under the active care of the living,
while they are still devoted to pious uses, they are sacred, and we cannot
suppose that the legislature intended that they should be violated, in the
absence of special provisions upon the subject authorizing such invasion,
and indicating a method for the disinterment, removal, and reinterment of
the bodies buried, and directing how the expense thereof shall be borne."
Two members of the court, delivering a separate concurring opinion,
concluded with this significant and eloquent sentence: "The wheels of
commerce must stop at the grave."

For the foregoing reasons, and for others which are stated in the principal
decision, I am of the opinion that the judgment of the lower court should be
affirmed.

STREET, J., dissenting:

It may be admitted that, upon the evidence before us, the projected
condemnation of the Chinese Cemetery is unnecessary and perhaps ill-
considered. Nevertheless I concur with Justice Moir in the view that the
authorities of the city of Manila are the proper judges of the propriety of the
condemnation and that this Court should have nothing to do with the
question of the necessity of the taking.

MOIR, J., dissenting:

I dissent from the majority opinion in this case, which has not yet been
written, and because of the importance of the question involved, present my
dissent for the record.

This is an action by the city of Manila for the expropriation of land for an
extension of Rizal Avenue north. The petition for condemnation was opposed
by the "Comunidad de Chinos de Manila" and Ildefonso Tambunting and
various other who obtained permission of the trial court to intervene in the
case.

All of the defendants allege in their opposition that the proposed extension of
Rizal Avenue cuts through a part of the Chinese Cemetery, North of Manila,
and necessitates the destruction of many monuments and the removal of
many graves.

The Court of First Instance of Manila, Honorable S. del Rosario, judge after
hearing the parties, decided that there was no need for constructing the
street as and where proposed by the city, and dismissed the petition.

The plaintiff appealed and sets up the following errors:

1. The court erred in deciding that the determination of the necessity

and convenience of the expropriation of the lands of the defendants
lies with the court and not with the Municipal Board of the city of
Manila.

2. The court erred in permitting the presentation of proofs over the

objection and exception of the plaintiff tending to demonstrate the lack
of necessity of the projected street and the need of the lands in
question.
 3. The court erred in declaring that the plaintiff had no right to
expropriate the lands in question.

4. The court erred in dismissing the complaint.

The right of the plaintiff to expropriate property for public use cannot be
denied. The "right of eminent domain is inherent in all sovereignties and
therefore would exist without any constitutional recognition . . . . The right of
eminent domain antedates constitutions . . . . The right can only be denied or
restricted by fundamental law and is right inherent in society." (15 Cyc., pp.
557-8.) .

This general right was recognized in the Philippine Code of Civil Procedure
effective October 1st, 1901, which prescribed the manner of exercising the
right. (Sections 241 et seq.)

It was further recognized in the Organic Act of July 1st, 1902, which provides
in section 74 "that the Government of the Philippine Islands may grant
franchises . . . including the authority to exercise the right of eminent domain
for the construction and operation of works of public utility and service, and
may authorize said works to be constructed and maintained over and across
the public property of the United States including . . . reservations." This
provisions is repeated in the Jones Law of August, 1916.

The legislature of the Islands conferred the right on the city of Manila.
(Section 2429, Administrative Code of 1917; section 2402, Administrative
Code of 1916.)

Clearly having the right of expropriation, the city of Manila selected the line
of its street and asked the court by proper order to place the plaintiff in
possession of the land described in the complaint, and to appoint
Commissioners to inspect the property, appraise the value, and assess the
damages. Instead of doing so, the court entered upon the question of the
right of the city to take the property and the necessity for the taking.

The court says:

The controversy relates to whether or not the Chinese Cemetery,

where a great majority of this race is buried and other persons
belonging to other nationalities have been formerly inhumed, is private
or public; whether or not said cemetery, in case it is public, would be
susceptible to expropriation for the purpose of public improvements
proposed by the city of Manila; whether or not the latter is justified of
the necessity and expediency of similar expropriation before its right to
the same would be upheld by the courts of justice; and whether or not
the appreciation of said necessity pertains to the legislative or the
judicial department before which the expropriation proceedings have
been brought.

Relative to the first point, it is not necessary for the court to pass upon
its consideration, in view of the conclusion it has arrived at the
appreciation of the other points connected with each other.

From the testimony of two reputable engineers produced by some of

the defendants, it appears that the land chosen by the plaintiff for the
extension of Rizal Avenue to the municipality of Caloocan is not the
best or the less expensive, although upon it there may be constructed
a straight road, without curves or winding; but that in order to
construct said road upon said land, the city of Manila would have to
remove and transfer to other places about four hundred graves and
monuments, make some grubbings, undergo some leveling and build
some bridges the works thereon, together with the construction of
the road and the value of the lands expropriated, would mean an
expenditure which will not be less than P180,000.

Beside that considerable amount, the road would have a declivity of 3

per cent which, in order to cover a distance of one kilometer, would
require an energy equivalent to that which would be expanded in
covering a distance of two and one-half kilometers upon a level road.

On the other hand, if the road would be constructed with the deviation
proposed by Ildefonso Tambunting, one of the defendants, who even
offered to donate gratuitously to the city of Manila part of the land
upon which said road will have to be constructed, the plaintiff entity
would be able to save more than hundreds of thousand of pesos, which
can be invested in other improvements of greater pressure and
necessity for the benefit of the taxpayers; and it will not have to
employ more time and incur greater expenditures in the removal and
transfer of the remains buried in the land of the Chinese Community
and of Sr. Tambunting, although with the insignificant disadvantage
that the road would be little longer by a still more insignificant
 extension of 426 meters and 55 centimeters less than one-half
kilometer, according to the plan included in the records; but it would
offer a better panorama to those who would use it, and who would not
have to traverse in their necessary or pleasure-making trips or walks
any cemetery which, on account of its nature, always deserves the
respect of the travellers. It should be observed that the proposed
straight road over the cemetery, which the city of Manila is proposing
to expropriate, does not lead to any commercial, industrial, or
agricultural center, and if with said road it is endeavored to benefit
some community or created interest, the same object may be obtained
by the proposed deviation of the road by the defendants. The road
traced by the plaintiffs has the disadvantage that the lands on both
sides thereof would not serve for residential purposes, for the reason
that no one has the pleasure to construct buildings upon cemeteries,
unless it be in very overcrowded cities, so exhausted of land that every
inch thereof represents a dwelling house.

And it is against the ruling, that it lies with the court to determine the
necessity of the proposed street and not with the municipal board, that the
appellant directs its first assignment of error.

It is a right of the city government to determine whether or not it will

construct streets and where, and the court's sole duty was to see that the
value of the property was paid the owners after proper legal proceedings
ascertaining the value.

The law gives the city the right to take private property for public use. It is
assumed it is unnecessary to argue that a public road is a public use.

But it is argued that plaintiff must show that it is necessary to take this land
for a public improvement. The law does not so read, and it is believed that
the great weight of authority, including the United States Supreme Court, is
against the contention.

The question of necessity is distinct from the question of public use,

and former question is exclusively for the legislature, except that if the
constitution or statute authorizes the taking of property only in cases
of necessity, then the necessity becomes a judicial question.
(McQuillen Municipal Corporations, Vol. IV, pp. 3090-3091.)
 In the absence of some constitutional or statutory provision to the
contrary, the necessity and expediency of exercising the right of
eminent domain are questions essentially political and not judicial in
their character. The determination of those questions belongs to the
sovereign power; the legislative determination is final and conclusive,
and the courts have no power to review it. It rests with the legislature
not only to determine when the power of eminent domain may be
exercised, but also the character, quality, method, and extent of such
exercise. And this power is unqualified, other than by the necessity of
providing that compensation shall be made. Nevertheless, under the
express provisions of the constitution of some states the question of
necessity is made a judicial one, to be determined by the courts and
not by the legislature.

While the legislature may itself exercise the right of determining the
necessity for the exercise of the power of eminent domain, it may,
unless prohibited by the constitution, delegate this power to public
officers or to private corporations established to carry on enterprises in
which the public are interested, and their determination that a
necessity for the exercise of the power exists is conclusive. There is no
restraint upon the power except that requiring compensation to be
made. And when the power has been so delegated it is a subject of
legislative discretion to determine what prudential regulations shall be
established to secure a discreet and judicious exercise of the authority.
It has been held that in the absence of any statutory provision
submitting the matter to a court or jury the decision of the question of
necessity lies with the body of individuals to whom the state has
delegated the authority to take, and the legislature may be express
provision confer this power on a corporation to whom the power of
eminent domain is delegated unless prohibited by the constitution. It is
of course competent for the legislature to declare that the question
shall be a judicial one, in which case the court and not the corporation
determines the question of necessity. (15 Cyc., pp. 629-632.)

To the same effect is Lewis on Eminen Domain (3d Edition, section 597).

I quote from the notes to Vol. 5, Encyclopedia of United States Supreme

Court Reports, p. 762, as follows:
 Neither can it be said that there is any fundamental right secured by
the constitution of the United States to have the questions of
compensation and necessity both passed upon by one and the same
jury. In many states the question of necessity is never submitted to the
jury which passes upon the question of compensation. It is either
settled affirmatively by the legislature, or left to the judgment of the
corporation invested with the right to take property by condemnation.
The question of necessity is not one of a judicial character, but rather
one for determination by the lawmaking branch of the government.
(Boom Co. vs. Patterson, 98 U.S., 403, 406 [25 L. ed., 206]; United
States vs. Jones, 109 U.S., 513 [27 L. ed., 1015]; Backus vs. Fort Street
Union Depot Co., 169 U.S., 557, 568 [42 L. ed., 853].)

Speaking generally, it is for the state primarily and exclusively, to

declare for what local public purposes private property, within its limits
may be taken upon compensation to the owner, as well as to prescribe
a mode in which it may be condemned and taken. (Madisonville Tract.
Co. vs. St. Bernard Min. Co., 196 U.S., 239, 252 [49 L. ed., 462].)

Courts have no power to control the legislative authority in the exercise

of their right to determine when it is necessary or expedient to
condemn a specific piece of property for public purposes. (Adirondack
R. Co. vs. New York States, 176 U.S., 335 [44 L. ed., 492].)

10 R. C. L. (p. 183), states the law as follows:

158. Necessity for taking ordinarily not judicial question. The

legislature, in providing for the exercise the power of eminent domain,
may directly determine the necessity for appropriating private property
for a particular improvement or public use, and it may select the exact
location of the improvement. In such a case, it is well settled that the
utility of the proposed improvement, the extent of the public necessity
for its construction, the expediency of constructing it, the suitableness
of the location selected and the consequent necessity of taking the
land selected for its site, are all questions exclusively for the
legislature to determine, and the courts have no power to interfere, or
to substitute their own views for these of the representatives of the
people. Similarly, when the legislature has delegated the power of
eminent domain to municipal or public service corporation or other
tribunals or bodies, and has given them discretion as to when the
 power is to be called into exercise and to what extent, the court will
not inquire into the necessity or propriety of the taking.

The United States Supreme Court recently said:

The uses to which this land are to be put are undeniably public uses.
When that is the case the propriety or expediency of the appropriation
cannot be called in question by any other authority. (Cinnati vs. S. & N.
R. R. Co., 223 U.S., 390, quoting U.S. vs. Jones, 109, U.S., 519.)

And in Sears vs. City of Akron (246 U.S., 242), decided March 4th, 1918, it
said:

Plaintiff contends that the ordinance is void because the general

statute which authorized the appropriation violates both Article 1,
paragraph 10, of the Federal Constitution, and the Fourteenth
Amendment, in that it authorizes the municipality to determine the
necessity for the taking of private property without the owners having
an opportunity to be hear as to such necessity; that in fact no
necessity existed for any taking which would interfere with the
company's project; since the city might have taken water from the
Little Cuyahoga or the Tuscarawas rivers; and furthermore, that it has
taken ten times as much water as it can legitimately use. It is well
settled that while the question whether the purpose of a taking is a
public one is judicial (Hairston vs. Danville & W. R. Co., 208 U.S. 598
[52 L. ed., 637; 28 Sup. Ct. Rep., 331; 13 Ann. Cas., 1008]), the
necessity and the proper extent of a taking is a legislative question.
(Shoemaker vs. United States, 147 U.S., 282, 298 [57 L. ed., 170, 184;
13 Supt. Ct. Rep., 361]; United States vs. Gettysburg Electric R. Co.,
160 U.S. 668, 685 [40 L. ed., 576, 582; 16 Sup. Ct. Rep., 427]; United
States vs. Chandler-Dunbar Water Power Co., 229 U.S., 53, 65 [57 L.
ed., 1063, 1076; 33 Sup. Ct. Rep., 667].)

I think the case should be decided in accordance with foregoing citations, but
one other point has been argued so extensively that it ought to be
considered.

It is contended for the defense that this Chinese Cemetery is a public

cemetery and that it cannot therefore be taken for public use. In its answer
the "Comunidad de Chinos de Manila" says it is "a corporation organized and
existing under and by virtue of the laws of the Philippine Islands," and that it
owns the land which plaintiff seeks to acquire. The facts that it is private
corporation owning land would seem of necessity to make the land it owns
private land. The fact that it belongs to the Chinese community deprives it of
any public character.

But admitting that it is a public cemetery, although limited in its use to the
Chinese Community of the city of Manila, can it not be taken for public use?
Must we let the reverence we feel for the dead and the sanctity of their final
resting-place obstruct the progress of the living? It will be instructive to
inquire what other jurisdictions have held on that point.

On the Application of Board of Street Openings of New York City to acquire St.
Johns Cemetery (133 N.Y., 329) the court of appeal said:

. . . The board instituted this proceeding under the act to acquire for
park purposes the title to land below One Hundred and Fifty-fifth street
known as St. John's cemetery which belonged to a religious corporation
in the city of New York, commonly called Trinity Church. It was
established as a cemetery as early as 1801, and used for that purpose
until 1839, during which time about ten thousand human bodies had
been buried therein. In 1839 an ordinance was passed by the city of
New York forbidding interments south of Eighty-sixth street, and since
that time no interments have been made in the cemetery, but Trinity
Church has preserved and kept it in order and prevented any
disturbance thereof.

It is contended on behalf of Trinity Church that under the general

authority given by statute of 1887, this land which had been devoted
to cemetery purposes could not be taken for a park. The authority
conferred upon the board by the act is broad and general. It is
authorized to take for park purposes any land south of One Hundred
and Fifty-fifth street. . . . .

The fact that lands have previously been devoted to cemetery

purposes does not place them beyond the reach of the power of
eminent domain. That is an absolute transcendent power belonging to
the sovereign which can be exercised for the public welfare whenever
the sovereign authority shall determine that a necessity for its exercise
exists. By its existence the homes and the dwellings of the living, and
the resting-places of the dead may be alike condemned.
 It seems always to have been recognized in the laws of this state, that
under the general laws streets and highways could be laid out through
cemeteries, in the absence of special limitation or prohibition. . . .

In Re Opening of Twenty-second Street (102 Penn. State Reports, 108) the

Supreme Court of the State said:

This was an action for the opening of a street through a cemetery in

the City of Philadelphia. It was contended for the United American
Mechanics and United Daughters of America Cemetery Association that
by an act of the legislature of the State approved March 20th, 1849,
they were forever exempt from the taking of any their property for
streets, roads or alleys and this Act was formally accepted by the
Cemetery Company on April 9th, 1849, and there was, therefore, a
contract between the Cemetery Company and the State of
Pennsylvania, which would be violated by the taking of any part of
their property for street purposes. It was further contended that there
were 11,000 persons buried in the cemetery.

The court held that property and contracts of all kinds must yield to the
demand of the sovereign and that under the power of eminent domain
all properties could be taken, and that if there was a contract between
the State of Pennsylvania and the Cemetery Association, the contract
itself could be taken for public use, and ordered the opening of the
street through the cemetery.

In Vol. 5, Encyclopedia of United States Supreme Court Reports (p. 759), it is

said:

Although it has been held, that where a state has delegated the power
of eminent domain to a person or corporation and where by its exercise
lands have been subject to a public use, they cannot be applied to
another public use without specific authority expressed or implied to
that effect, yet, the general rule seems to be that the fact that
property is already devoted to a public use, does not exempt it from
being appropriated under the right of eminent domain but it may be so
taken for a use which is clearly superior or paramount to the one to
which it is already devoted. (Citing many United States Supreme Court
decisions.)
A few cases have been cited where the courts refused to allow the opening
of streets through cemeteries, but in my opinion they are not as well
considered as the cases and authorities relied upon herein.

The holding of this court in this case reverses well settled principles of law of
long standing and almost universal acceptance.

The other assignments of error need not be considered as they are involved
in the foregoing.

The decision should be reversed and the record returned to the Court of First
Instance with instructions to proceed with the case in accordance with this
decision.
United States v. Causby, 328 U.S. 256 (1946)

United States v. Causby

No. 630

Argued May 1, 1946

Decided May 27, 1946

328 U.S. 256

CERTIORARI TO THE COURT OF CLAIMS

Syllabus

Respondents owned a dwelling and a chicken farm near a municipal airport.

The safe path of glide to one of the runways of the airport passed directly
over respondents' property at 83 feet, which was 67 feet above the house,
63 feet above the barn and 18 feet above the highest tree. It was used 4% of
the time in taking off and 7% of the time in landing. The Government leased
the use of the airport for a term of one month commencing June 1, 1942,
with a provision for renewals until June 30, 1967, or six months after the end
of the national emergency, whichever was earlier. Various military aircraft of
the United States used the airport. They frequently came so close to
respondents' property that they barely missed the tops of trees, the noise
was startling, and the glare from their landing lights lighted the place up
brightly at night. This destroyed the use of the property as a chicken farm
and caused loss of sleep, nervousness, and fright on the part of respondents.
They sued in the Court of Claims to recover for an alleged taking of their
property and for damages to their poultry business. The Court of Claims
found that the Government had taken an easement over respondents'
property, and that the value of the property destroyed and the easement
taken was $2,000; but it made no finding as to the precise nature or duration
of the easement.

Held:

1. A servitude has been imposed upon the land for which respondents are
entitled to compensation under the Fifth Amendment. Pp. 328 U. S. 260-267.

(a) The common law doctrine that ownership of land extends to the
periphery of the universe has no place in the modern world. Pp. 328 U. S.
260-261.

(b) The air above the minimum safe altitude of flight prescribed by the Civil
Aeronautics Authority is a public highway and part of the public domain, as
declared by Congress in the Air Commerce Act of 1926, as amended by the
Civil Aeronautics Act of 1938. Pp. 328 U. S. 260-261, 328 U. S. 266.

(c) Flights below that altitude are not within the navigable air space which
Congress placed within the public domain, even though they are within the
path of glide approved by the Civil Aeronautics Authority. Pp. 328 U. S. 263-
264.

Page 328 U. S. 257

(d) Flights of aircraft over private land which are so low and frequent as to be
a direct and immediate interference with the enjoyment and use of the land
are as much an appropriation of the use of the land as a more conventional
entry upon it. Pp. 328 U. S. 261-262, 328 U. S. 264-267.

2. Since there was a taking of private property for public use, the claim was
"founded upon the Constitution," within the meaning of 141(1) of the
Judicial Code, and the Court of Claims had jurisdiction to hear and determine
it. P. 328 U. S. 267.

3. Since the court's findings of fact contain no precise description of the

nature or duration of the easement taken, the judgment is reversed, and the
cause is remanded to the Court of Claims so that it may make the necessary
findings. Pp. 328 U. S. 267-268.

(a) An accurate description of the easement taken is essential, since that

interest vests in the United States. P. 328 U. S. 267.

(b) Findings of fact on every "material issue" are a statutory requirement,

and a deficiency in the findings cannot be rectified by statements in the
opinion. Pp. 328 U. S. 267-268.

(c) A conjecture in lieu of a conclusion from evidence would not be a proper

foundation for liability of the United States. P. 328 U. S. 268.

104 Ct.Cls. 342, 60 F.Supp. 751, reversed and remanded.

The Court of Claims granted respondents a judgment for the value of

property destroyed and damage to their property resulting from the taking of
an easement over their property by low-flying military aircraft of the United
States, but failed to include in its findings of fact a specific description of the
nature or duration of the easement. 104 Ct.Cls. 342, 60 F.Supp. 751. This
Court granted certiorari. 327 U.S. 775. Reversed and remanded, p. 328 U. S.
268.

Page 328 U. S. 258

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

This is a case of first impression. The problem presented is whether
respondents' property was taken within the meaning of the Fifth Amendment
by frequent and regular flights of army and navy aircraft over respondents'
land at low altitudes. The Court of Claims held that there was a taking, and
entered judgment for respondent, one judge dissenting. 60 F.Supp. 751. The
case is here on a petition for a writ of certiorari which we granted because of
the importance of the question presented.

Respondents own 2.8 acres near an airport outside of Greensboro, North

Carolina. It has on it a dwelling house, and also various outbuildings which
were mainly used for raising chickens. The end of the airport's northwest-
southeast runway is 2,220 feet from respondents' barn and 2,275 feet from
their house. The path of glide to this runway passes directly over the
property -- which is 100 feet wide and 1,200 feet long. The 30 to 1 safe glide
angle [Footnote 1] approved by the Civil Aeronautics Authority [Footnote 2]
passes over this property at 83 feet, which is 67 feet above the house, 63
feet above the barn and 18 feet above the highest tree. [Footnote 3] The use
by the United States of this airport is pursuant to a lease executed in May,
1942, for a term commencing June 1, 1942 and ending June 30, 1942, with a
provision for renewals until June 30, 1967, or six

Page 328 U. S. 259

months after the end of the national emergency, whichever is the earlier.

Various aircraft of the United States use this airport -- bombers, transports,
and fighters. The direction of the prevailing wind determines when a
particular runway is used. The northwest-southeast runway in question is
used about four percent of the time in taking off and about seven percent of
the time in landing. Since the United States began operations in May, 1942,
its four-motored heavy bombers, other planes of the heavier type, and its
fighter planes have frequently passed over respondents' land buildings in
considerable numbers and rather close together. They come close enough at
times to appear barely to miss the tops of the trees, and at times so close to
the tops of the trees as to blow the old leaves off. The noise is startling. And,
at night, the glare from the planes brightly lights up the place. As a result of
the noise, respondents had to give up their chicken business. As many as six
to ten of their chickens were killed in one day by flying into the walls from
fright. The total chickens lost in that manner was about 150. Production also
fell off. The result was the destruction of the use of the property as a
commercial chicken farm. Respondents are frequently deprived of their
sleep, and the family has become nervous and frightened. Although there
have been no airplane accidents on respondents' property, there have been
several accidents near the airport and close to respondents' place. These are
the essential facts found by the Court of Claims. On the basis of these facts,
it found that respondents' property had depreciated in value. It held that the
United States had taken an easement over the property on June 1, 1942, and
that the value of the property destroyed and the easement taken was
$2,000.

Page 328 U. S. 260

I. The United States relies on the Air Commerce Act of 1926, 44 Stat. 568, 49
U.S.C. 171 et seq., as amended by the Civil Aeronautics Act of 1938, 52
Stat. 973, 49 U.S.C. 401 et seq. Under those statutes, the United States has
"complete and exclusive national sovereignty in the air space" over this
country. 49 U.S.C. 176(a). They grant any citizen of the United States "a
public right of freedom of transit in air commerce [Footnote 4] through the
navigable air space of the United States." 49 U.S.C. 403. And "navigable air
space" is defined as "airspace above the minimum safe altitudes of flight
prescribed by the Civil Aeronautics Authority." 49 U.S.C. 180. And it is
provided that "such navigable airspace shall be subject to a public right of
freedom of interstate and foreign air navigation." Id. It is therefore argued
that, since these flights were within the minimum safe altitudes of flight
which had been prescribed, they were an exercise of the declared right of
travel through the airspace. The United States concludes that, when flights
are made within the navigable airspace without any physical invasion of the
property of the landowners, there has been no taking of property. It says
that, at most, there was merely incidental damage occurring as a
consequence of authorized air navigation. It also argues that the landowner
does not own superadjacent airspace which he has not subjected to
possession by the erection of structures or other occupancy. Moreover, it is
argued that, even if the United States took airspace owned by respondents,
no compensable damage was shown. Any damages are said to be merely
consequential for which no compensation may be obtained under the Fifth
Amendment.

It is ancient doctrine that at common law ownership of the land extended to

the periphery of the universe -- cujus

Page 328 U. S. 261

est solum ejus est usque and coelum. [Footnote 5] But that doctrine has no
place in the modern world. The air is a public highway, as Congress has
declared. Were that not true, every transcontinental flight would subject the
operator to countless trespass suits. Common sense revolts at the idea. To
recognize such private claims to the airspace would clog these highways,
seriously interfere with their control and development in the public interest,
and transfer into private ownership that to which only the public has a just
claim.

But that general principle does not control the present case. For the United
States conceded on oral argument that, if the flights over respondents'
property rendered it uninhabitable, there would be a taking compensable
under the Fifth Amendment. It is the owner's loss, not the taker's gain, which
is the measure of the value of the property taken. United States v. Miller,317
U. S. 369. Market value fairly determined is the normal measure of the
recovery. Id. And that value may reflect the use to which the land could
readily be converted, as well as the existing use. United States v.
Powelson,319 U. S. 266, 319 U. S. 275, and cases cited. If, by reason of the
frequency and altitude of the flights, respondents could not use this land for
any purpose, their loss would be complete. [Footnote 6] It would be as
complete as if the United States had entered upon the surface of the land
and taken exclusive possession of it.

We agree that, in those circumstances, there would be a taking. Though it

would be only an easement of flight

Page 328 U. S. 262

which was taken, that easement, if permanent and not merely temporary,
normally would be the equivalent of a fee interest. It would be a definite
exercise of complete dominion and control over the surface of the land. The
fact that the planes never touched the surface would be as irrelevant as the
absence in this day of the feudal livery of seisin on the transfer of real estate.
The owner's right to possess and exploit the land -- that is to say, his
beneficial ownership of it -- would be destroyed. It would not be a case of
incidental damages arising from a legalized nuisance, such as was involved
in Richards v. Washington Terminal Co.,233 U. S. 546. In that case, property
owners whose lands adjoined a railroad line were denied recovery for
damages resulting from the noise, vibrations, smoke, and the like, incidental
to the operations of the trains. In the supposed case, the line of flight is over
the land. And the land is appropriated as directly and completely as if it were
used for the runways themselves.

There is no material difference between the supposed case and the present
one, except that, here, enjoyment and use of the land are not completely
destroyed. But that does not seem to us to be controlling. The path of glide
for airplanes might reduce a valuable factory site to grazing land, an orchard
to a vegetable patch, a residential section to a wheat field. Some value
would remain. But the use of the airspace immediately above the land would
limit the utility of the land and cause a diminution in its value. [Footnote 7]
That was the philosophy of Portsmouth Harbor Land & Hotel Co. v.

Page 328 U. S. 263

United States,260 U. S. 327. In that case, the petition alleged that the United
States erected a fort on nearby land, established a battery and a fire control
station there, and fired guns over petitioner's land. The Court, speaking
through Mr. Justice Holmes, reversed the Court of Claims which dismissed the
petition on a demurrer, holding that "the specific facts set forth would
warrant a finding that a servitude has been imposed." [Footnote 8] 260 U.S.
at 260 U. S. 330. And see Delta Air Corp. v. Kersey, 193 Ga. 862, 20 S.E.2d
245. Cf. United States v. 357.25 Acres of Land, 55 F.Supp. 461.

The fact that the path of glide taken by the planes was that approved by the
Civil Aeronautics Authority does not change the result. The navigable
airspace which Congress has placed in the public domain is "airspace above
the minimum safe altitudes of flight prescribed by the Civil Aeronautics
Authority." 49 U.S.C. 180. If that agency prescribed 83 feet as the minimum
safe altitude, then we would have presented the question of the validity of
the regulation. But nothing of the sort has been done. The path of glide
governs the method of operating -- of landing or taking off. The altitude
required for that operation is not the minimum safe altitude of flight which is
the downward reach of the navigable airspace. The minimum prescribed by
the authority is 500 feet during the day and 1000 feet at night for air carriers
(Civil Air Regulations, Pt. 61, 61.7400, 61.7401, Code Fed.Reg.Cum.Supp.,
Tit. 14, ch. 1) and from 300 to 1000 feet for

Page 328 U. S. 264

other aircraft depending on the type of plane and the character of the
terrain. Id., Pt. 60, 60.350-60.3505, Fed.Reg.Cum.Supp., supra. Hence, the
flights in question were not within the navigable airspace which Congress
placed within the public domain. If any airspace needed for landing or taking
off were included, flights which were so close to the land as to render it
uninhabitable would be immune. But the United States concedes, as we have
said, that, in that event, there would be a taking. Thus, it is apparent that the
path of glide is not the minimum safe altitude of flight within the meaning of
the statute. The Civil Aeronautics Authority has, of course, the power to
prescribe air traffic rules. But Congress has defined navigable airspace only
in terms of one of them -- the minimum safe altitudes of flight.

We have said that the airspace is a public highway. Yet it is obvious that, if
the landowner is to have full enjoyment of the land, he must have exclusive
control of the immediate reaches of the enveloping atmosphere. Otherwise
buildings could not be erected, trees could not be planted, and even fences
could not be run. The principle is recognized when the law gives a remedy in
case overhanging structures are erected on adjoining land. [Footnote 9] The
landowner owns at least as much of the space above the ground as the can
occupy or use in connection with the land. See Hinman v. Pacific Air
Transport, 84 F.2d 755. The fact that he does not occupy it in a physical
sense -- by the erection of buildings and the like -- is not material. As we
have said, the flight of airplanes, which skim the surface but do not touch it,
is as much an appropriation of the use of the land as a more conventional
entry upon it. We would not doubt that, if the United States erected
Page 328 U. S. 265

an elevated railway over respondents' land at the precise altitude where its
planes now fly, there would be a partial taking, even though none of the
supports of the structure rested on the land. [Footnote 10] The reason is that
there would be an intrusion so immediate and direct as to subtract from the
owner's full enjoyment of the property and to limit his exploitation of it. While
the owner does not in any physical manner occupy that stratum of airspace
or make use of it in the conventional sense, he does use it in somewhat the
same sense that space left between buildings for the purpose of light and air
is used. The superadjacent airspace at this low altitude is so close to the land
that continuous invasions of it affect the use of the surface of the land itself.
We think that the landowner, as an incident to his ownership, has a claim to
it, and that invasions of it are in the same category as invasions of the
surface. [Footnote 11]

In this case, as in Portsmouth Harbor Land & Hotel Co. v. United States,
supra, the damages were not merely consequential. They were the product
of a direct invasion of respondents' domain.

Page 328 U. S. 266

As stated in United States v. Cress,243 U. S. 316, 243 U. S. 328,

". . . it is the character of the invasion, not the amount of damage resulting
from it, so long as the damage is substantial, that determines the question
whether it is a taking."

We said in United States v. Powelson, supra, p. 319 U. S. 279, that, while the
meaning of "property" as used in the Fifth Amendment was a federal
question, "it will normally obtain its content by reference to local law." If we
look to North Carolina law, we reach the same result. Sovereignty in the
airspace rests in the State "except where granted to and assumed by the
United States." Gen.Stats.1943, 63-11. The flight of aircraft is lawful

"unless at such a low altitude as to interfere with the then existing use to
which the land or water, or the space over the land or water, is put by the
owner, or unless so conducted as to be imminently dangerous to persons or
property lawfully on the land or water beneath."

Id., 63-13. Subject to that right of flight, "ownership of the space above the
lands and waters of this State is declared to be vested in the several owners
of the surface beneath." Id., 63-12. Our holding that there was an invasion
of respondents' property is thus not inconsistent with the local law governing
a landowner's claim to the immediate reaches of the superadjacent airspace.
The airplane is part of the modern environment of life, and the
inconveniences which it causes are normally not compensable under the Fifth
Amendment. The airspace, apart from the immediate reaches above the
land, is part of the public domain. We need not determine at this time what
those precise limits are. Flights over private land are not a taking, unless
they are so low and so frequent as to be a direct and immediate interference
with the enjoyment and use of the land. We need not speculate on that
phase of the present case. For the findings of the Court

Page 328 U. S. 267

of Claims plainly establish that there was a diminution in value of the

property, and that the frequent, low-level flights were the direct and
immediate cause. We agree with the Court of Claims that a servitude has
been imposed upon the land.

II. By 145(1) of the Judicial Code, 28 U.S.C. 250(1), the Court of Claims
has jurisdiction to hear and determine

"All claims (except for pensions) founded upon the Constitution of the United
States or . . . upon any contract, express or implied, with the Government of
the United States."

We need not decide whether repeated trespasses might give rise to an

implied contract. Cf. Portsmouth Harbor Land & Hotel Co. v. United States,
supra. If there is a taking, the claim is "founded upon the Constitution," and
within the jurisdiction of the Court of Claims to hear and determine. See
Hollister v. Benedict & Burnham Mfg. Co.,113 U. S. 59, 113 U. S. 67; Hurley v.
Kincaid,285 U. S. 95, 285 U. S. 104; Yearsley v. W. A. Ross Construction
Co.,309 U. S. 18, 309 U. S. 21. Thus, the jurisdiction of the Court of Claims in
this case is clear.

III. The Court of Claims held, as we have noted, that an easement was taken.
But the findings of fact contain no precise description as to its nature. It is
not described in terms of frequency of flight, permissible altitude, or type of
airplane. Nor is there a finding as to whether the easement taken was
temporary or permanent. Yet an accurate description of the property taken is
essential, since that interest vests in the United States. United States v.
Cress, supra,243 U. S. 328-329, and cases cited. It is true that the Court of
Claims stated in its opinion that the easement taken was permanent. But the
deficiency in findings cannot be rectified by statements in the opinion.
United States v. Esnault-Pelterie,299 U. S. 201, 299 U. S. 205-206; United
States v. Seminole Nation,299 U. S. 417, 299 U. S. 422. Findings of fact on
every "material issue" are a statutory

Page 328 U. S. 268

requirement. 53 Stat. 752, 28 U.S.C. 288. The importance of findings of fact
based on evidence is emphasized here by the Court of Claims' treatment of
the nature of the easement. It stated in its opinion that the easement was
permanent because the United States "no doubt intended to make some sort
of arrangement whereby it could use the airport for its military planes
whenever it had occasion to do so." That sounds more like conjecture, rather
than a conclusion from evidence, and if so, it would not be a proper
foundation for liability of the United States. We do not stop to examine the
evidence to determine whether it would support such a finding, if made. For
that is not our function. United States v. Esnault-Pelterie, supra, p. 299 U. S.
206.

Since on this record it is not clear whether the easement taken is a

permanent or a temporary one, it would be premature for us to consider
whether the amount of the award made by the Court of Claims was proper.

The judgment is reversed, and the cause is remanded to the Court of Claims
so that it may make the necessary findings in conformity with this opinion.

Reversed.

MR. JUSTICE JACKSON took no part in the consideration or decision of this

case.

[Footnote 1]

A 30 to 1 glide angle means one foot of elevation or descent for every 30

feet of horizontal distance.

[Footnote 2]

Military planes are subject to the rules of the Civil Aeronautics Board where,
as in the present case, there are no Army or Navy regulations to the contrary.
Cameron v. Civil Aeronautics Board, 140 F.2d 482.

[Footnote 3]

The house is approximately 16 feet high, the barn 20 feet, and the tallest
tree 65 feet.

[Footnote 4]

"Air commerce" is defined as including "any operation or navigation of

aircraft which directly affects, or which may endanger safety in, interstate,
overseas, or foreign air commerce." 49 U.S.C. 401(3).

[Footnote 5]
1 Coke, Institutes, 19th Ed. 1832, ch. 1, 1(4a); 2 Blackstone,
Commentaries, Lewis Ed.1902, p. 18; 3 Kent, Commentaries, Gould Ed. 1896,
p. 621.

[Footnote 6]

The destruction of all uses of the property by flooding has been held to
constitute a taking. Pumpelly v. Green Bay Co., 13 Wall. 166; United States v.
Lynah,188 U. S. 445; United States v. Welch,217 U. S. 333.

[Footnote 7]

It was stated in United States v. General Motors Corp.,323 U. S. 373, 323 U.

S. 378,

"The courts have held that the deprivation of the former owner, rather than
the accretion of a right or interest to the sovereign, constitutes the taking.
Governmental action short of acquisition of title or occupancy has been held,
if its effects are so complete as to deprive the owner of all or most of his
interest in the subject matter, to amount to a taking."

The present case falls short of the General Motors case. This is not a case
where the United States has merely destroyed property. It is using a part of it
for the flight of its planes.

Cf. Warren Township School Dist. v. Detroit, 308 Mich. 460, 14 N.W.2d 134;
Smith v. New England Aircraft Co., 270 Mass. 511, 170 N.E. 385; Burnham v.
Beverly Airways, Inc., 311 Mass. 628, 42 N.E.2d 575.

[Footnote 8]

On remand, the allegations in the petition were found not to be supported by

the facts. 64 Ct.Cls. 572.

[Footnote 9]

Baten's Case, 9 Coke R. 53b; Meyer v. Metzler, 51 Cal. 142; Codman v. Evans,
7 Allen 431, 89 Mass. 431; Harrington v. McCarthy, 169 Mass. 492, 48 N.E.
278. See Ball, The Vertical Extent of Ownership in Land, 76 U.Pa.L.Rev. 631,
658-671.

[Footnote 10]

It was held in Butler v. Frontier Telephone Co., 186 N.Y. 486, 79 N.E. 716, that
ejectment would lie where a telephone wire was strung across the plaintiff's
property, even though it did not touch the soil. The court stated, pp. 491-
492:
". . . an owner is entitled to the absolute and undisturbed possession of every
part of his premises, including the space above, as much as a mine beneath.
If the wire had been a huge cable, several inches thick and but a foot above
the ground, there would have been a difference in degree, but not in
principle. Expand the wire into a beam supported by posts standing upon
abutting lots without touching the surface of plaintiff's land, and the
difference would still be one of degree only. Enlarge the beam into a bridge,
and yet space only would be occupied. Erect a house upon the bridge, and
the air above the surface of the land would alone be disturbed."

[Footnote 11]

See Bouve, Private Ownership of Navigable Airspace Under the Commerce

Clause, 21 Amer.Bar Assoc.Journ. 416, 421-422; Hise, Ownership and
Sovereignty of the Air, 16 Ia.L.Rev. 169; Eubank, The Doctrine of the Airspace
Zone of Effective Possession, 12 Boston Univ.L.Rev. 414.

MR. JUSTICE BLACK, dissenting.

The Fifth Amendment provides that "private property" shall not "be taken for
public use, without just compensation." The Court holds today that the
Government has "taken" respondents' property by repeatedly flying Army
bombers directly above respondents' land at a height of eighty-three feet
where the light and noise from these planes caused respondents to lose
sleep, and their chickens to be killed. Since the effect of the Court's decision
is

Page 328 U. S. 269

to limit, by the imposition of relatively absolute Constitutional barriers,

possible future adjustments through legislation and regulation which might
become necessary with the growth of air transportation, and since, in my
view, the Constitution does not contain such barriers, I dissent.

The following is a brief statement of the background and of the events that
the Court's opinion terms a "taking" within the meaning of the Fifth
Amendment: since 1928, there has been an airfield some eight miles from
Greensboro, North Carolina. In April, 1942, this airport was taken over by the
Greensboro-High Point Municipal Airport Authority, and it has since then
operated as a municipal airport. In 1942, the Government, by contract,
obtained the right to use the field "concurrently, jointly, and in common" with
other users. Years before, in 1934, respondents had bought their property,
located more than one-third of a mile from the airport. Private planes from
the airport flew over their land and farm buildings from 1934 to 1942. and
are still doing so. But though these planes disturbed respondents to some
extent, Army bombers, which started to fly over the land in 1942 at a height
of eighty-three feet, disturbed them more, because they were larger, came
over more frequently, made a louder noise, and, at night, a greater glare was
caused by their lights. This noise and glare disturbed respondents' sleep,
frightened them, and made them nervous. The noise and light also
frightened respondents' chickens so much that many of them flew against
buildings and were killed.

The Court's opinion seems to indicate that the mere flying of planes through
the column of air directly above respondents' land does not constitute a
"taking." Consequently, it appears to be noise and glare, to the extent and
under the circumstances shown here, which make the government a seizer
of private property. But the allegation

Page 328 U. S. 270

of noise and glare resulting in damages constitutes at best, an action in tort

where there might be recovery if the noise and light constituted a nuisance,
a violation of a statute, [Footnote 2/1] or were the result of negligence.
[Footnote 2/2] But the Government has not consented to be sued in the
Court of Claims except in actions based on express or implied contract. And
there is no implied contract here, unless, by reason of the noise and glare
caused by the bombers, the Government can be said to have "taken"
respondents' property in a Constitutional sense. The concept of taking
property, as used in the Constitution, has heretofore never been given so
sweeping a meaning. The Court's opinion presents no case where a man who
makes noise or shines light onto his neighbor's property has been ejected
from that property for wrongfully taking possession of it. Nor would anyone
take seriously a claim that noisy automobiles passing on a highway are
taking wrongful possession of the homes located thereon, or that a city
elevated train which greatly interferes with the sleep of those who live next
to it wrongfully takes their property. Even the one case in this Court which, in
considering the sufficiency of a complaint, gave the most elastic meaning to
the phrase "private property be taken," as used in the Fifth Amendment, did
not go so far. Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S.

Page 328 U. S. 271

327. I am not willing, nor do I think the Constitution and the decisions
authorize me, to extend that phrase so as to guarantee an absolute
Constitutional right to relief not subject to legislative change, which is based
on averments that, at best, show mere torts committed by Government
agents while flying over land. The future adjustment of the rights and
remedies of property owners, which might be found necessary because of
the flight of planes at safe altitudes, should, especially in view of the
imminent expansion of air navigation, be left where I think the Constitution
left it -- with Congress.
Nor do I reach a different conclusion because of the fact that the particular
circumstance which under the Court's opinion makes the tort here absolutely
actionable is the passing of planes through a column of air at an elevation of
eighty-three feet directly over respondents' property. It is inconceivable to
me that the Constitution guarantees that the airspace of this Nation needed
for air navigation is owned by the particular persons who happen to own the
land beneath to the same degree as they own the surface below. [Footnote
2/3] No rigid Constitutional rule, in my judgment, commands that the air
must be considered as marked off into separate compartments by imaginary
metes and bounds in order to synchronize air ownership with land ownership.
I think that the Constitution entrusts Congress with full power to control all
navigable airspace. Congress has already acted under that power. It has by
statute, 44 Stat. 568, 52 Stat. 973, provided that

"the United States of America is . . . to possess and exercise complete and

exclusive national sovereignty in the

Page 328 U. S. 272

air space [over] the United States."

This was done under the assumption that the Commerce Clause of the
Constitution gave Congress the same plenary power to control navigable
airspace as its plenary power over navigable waters. H.Rep. No. 572, 69th
Cong., 1st Sess., p. 10; H.Rep. No. 1162, 69th Cong., 1st Sess., p. 14; United
States v. Commodore Park, Inc.,324 U. S. 386. To make sure that the airspace
used for air navigation would remain free, Congress further declared that
"navigable airspace shall be subject to a public right of freedom of interstate
and foreign air navigation," and finally stated emphatically that there exists
"a public right of freedom of transit . . . through the navigable airspace of the
United States." Congress thus declared that the air is free -- not subject to
private ownership and not subject to delimitation by the courts. Congress
and those acting under its authority were the only ones who had power to
control and regulate the flight of planes. "Navigable air-space" was defined
as "airspace above the minimum safe altitudes of flight prescribed by the
Civil Aeronautics Authority." 49 U.S.C. 180. Thus, Congress has given the
Civil Aeronautics Authority exclusive power to determine what is navigable
airspace subject to its exclusive control. This power derives specifically from
the Section which authorizes the Authority to prescribe

"air traffic rules governing the flight of, and for the navigation, protection,
and identification of, aircraft, including rules as to safe altitudes of flight and
rules for the prevention of collisions between aircraft, and between aircraft
and land or water vehicles."

Here, there was no showing that the bombers flying over respondents' land
violated any rule or regulation of the Civil Aeronautics Authority. Yet, unless
we hold the Act unconstitutional, at least such a showing would be necessary
before the courts could act without interfering with the exclusive authority
which Congress gave to the administrative agency. Not even a

Page 328 U. S. 273

showing that the Authority has not acted at all would be sufficient. For, in
that event, were the courts to have any authority to act in this case at all,
they should stay their hand till the Authority has acted.

The broad provisions of the Congressional statute cannot properly be

circumscribed by making a distinction, as the Court's opinion does, between
rules of safe altitude of flight while on the level of cross-country flight and
rules of safe altitude during landing and taking off. First, such a distinction
cannot be maintained from the practical standpoint. It is unlikely that
Congress intended that the Authority prescribe safe altitudes for planes
making cross-country flights while, at the same time, it left the more
hazardous landing and take-off operations unregulated. The legislative
history, moreover, clearly shows that the Authority's power to prescribe air
traffic rules includes the power to make rules governing landing and take-off.
Nor is the Court justified in ignoring that history by labeling rules of safe
altitude while on the level of cross-country flight as rules prescribing the safe
altitude proper and rules governing take-off and landing as rules of
operation. For the Conference Report explicitly states that such distinctions
were purposely eliminated from the original House Bill in order that the
Section on air traffic rules "might be given the broadest construction by
the . . . [Civil Aeronautics Authority] . . . and the courts." [Footnote 2/4] In
construing the statute narrowly the Court

Page 328 U. S. 274

thwarts the intent of Congress. A proper broad construction, such as

Congress commanded, would not permit the Court to decide what it has
today without declaring the Act of Congress unconstitutional. I think the Act
given the broad construction intended is constitutional.

No greater confusion could be brought about in the coming age of air

transportation than that which would result were courts by Constitutional
interpretation to hamper Congress in its efforts to keep the air free. Old
concepts of private ownership of land should not be introduced into the field
of air regulation. I have no doubt that Congress will, if not handicapped by
judicial interpretations of the Constitution, preserve the freedom of the air,
and at the same time, satisfy the just claims of aggrieved persons. The noise
of newer, larger, and more powerful planes may grow louder and louder and
disturb people more and more. But the solution of the problems precipitated
by these technological advances and new ways of living cannot come about
through the application of rigid Constitutional restraints formulated and
enforced by the courts. What adjustments may have to be made, only the
future can reveal. It seems certain, however,

Page 328 U. S. 275

the courts do not possess the techniques or the personnel to consider and
act upon the complex combinations of factors entering into the problems.
The contribution of courts must be made through the awarding of damages
for injuries suffered from the flying of planes, or by the granting of
injunctions to prohibit their flying. When these two simple remedial devices
are elevated to a Constitutional level under the Fifth Amendment, as the
Court today seems to have done, they can stand as obstacles to better
adapted techniques that might be offered by experienced experts and
accepted by Congress. Today's opinion is, I fear, an opening wedge for an
unwarranted judicial interference with the power of Congress to develop
solutions for new and vital and national problems. In my opinion, this case
should be reversed on the ground that there has been no "taking" in the
Constitutional sense.

[Footnote 2/1]

Neiswonger v. Goodyear Tire & Rubber Co., 35 F.2d 761.

[Footnote 2/2]

As to the damage to chickens, Judge Madden, dissenting from this judgment

against the Government said,

"When railroads were new, cattle in fields in sight and hearing of the trains
were alarmed, thinking that the great moving objects would turn aside and
harm them. Horses ran away at the sight and sound of a train or a threshing
machine engine. The farmer's chickens have to get over being alarmed at
the incredible racket of the tractor starting up suddenly in the shed adjoining
the chicken house. These sights and noises are a part of our world, and
airplanes are now and will be to a greater degree, likewise a part of it. These
disturbances should not be treated as torts in the case of the airplane any
more than they are so treated in the case of the railroad or public highway."

104 Ct.Cls. 342, 358.

[Footnote 2/3]

The House, in its report on the Air Commerce Act of 1926, stated:

"The public right of flight in the navigable air space owes its source to the
same constitutional basis which, under decisions of the Supreme Court, has
given rise to a public easement of navigation in the navigable waters of the
United States regardless of the ownership of adjacent or subjacent soil."

House Report No. 572, 69th Congress, First Session, page 10.

[Footnote 2/4]

The full statement read:

"The substitute provides that the Secretary shall by regulation establish air
traffic rules for the navigation, protection, and identification of all aircraft,
including rules for the safe altitudes of flight and rules for the prevention of
collisions between vessels and aircraft. The provision as to rules for taking off
and alighting, for instance, was eliminated as unnecessary specification, for
the reason that such rules are but one class of air traffic rules for the
navigation and protection of aircraft. Rules as to marking were eliminated for
the reason that such rules were fairly included within the scope of air rules
for the identification of aircraft. No attempt is made by either the Senate bill
or the House amendment to fully define the various classes of rules that
would fall within the scope of air traffic traffic rules, as, for instance, lights
and signals along airways and at airports and upon emergency landing fields.
In general, these rules would relate to the same subjects as those covered by
navigation laws and regulations and by the various State motor vehicle
traffic codes. As noted above, surplusage was eliminated in specifying
particular air traffic rules in order that the term might be given the broadest
possible construction by the Department of Commerce and the courts."

House Report No. 1162, 69th Congress, 1st Session, p. 12.

That the rules for landing and take-off are rules prescribing "minimum safe
altitudes of flight" is shown by the following further statement in the House
Report:

". . . the minimum safe altitudes of flight . . . would vary with the terrain and
location of cities and would coincide with the surface of the land or water at
airports."

Id. at p. 14.

Official Supreme Court case law is only found in the print version of the
United States Reports. Justia case law is provided for general informational
purposes only, and may not reflect current legal developments, verdicts or
settlements. We make no warranties or guarantees about the accuracy,
completeness, or adequacy of the information contained on this site or
information linked to from this site. Please check official sources.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-35861 October 18, 1979

MUNICIPALITY OF DAET, petitioner,

vs.
COURT OF APPEALS and LI SENG GIAP & CO., INC., respondent.

GUERRERO, J.:

The judgment of the respondent Court of Appeals, subject of the instant

petition to review on certiorari, "fixing the fair market value of the property
sought to be expropriated at P200.00 per square meter or for of FIVE
HUNDRED FORTY THREE THOUSAND FOUR HUNDRED (P543,400.00) PESOS,
and the value of the improvement thereon at THIRTY SIC THOUSAND FIVE
HUNDRED (P36,500.00) PESOS, Philippine Currency, both amounts to bear
legal interest from and after the date of the actual taking of possession by
the Municipality of Daet, Camarines Norte until the full amount is paid, with
costs against plaintiff-appellant," must be affirmed in the light of the
unusual, unique and abnormal circumstances obtaining in this case where
the complaint for condemnation was filed on August 9, 1962 or seventeen
(17) years ago but up to the present, the petitioner Municipality of Daet has
failed to make the deposit required to take possession of the property sought
to be expropriated.
The Municipality of Daet instituted condemnation proceedings against
private respondent Li Seng Giap & Co. Inc. on August 9, 1962 before the
Court of Firs Instance of Camarines Norte for the purpose of acquiring and
subsequently converting the following described property owned by private
respondent as a public park:

A parcel of land (Lot No. 3 Plans PSU-57331 situated in the

Poblacion, Municipality of Daet, bounded on the North-East by a
provincial road known as Vinzons Avenue; on the South-East, by
Felipe II Street; on the South, by Ildefonso Moreno Street, and on
the West, by J. Lukban Street, covering an area of TWO
 THOUSAND SEVEN HUNDRED AND SEVENTEEN (2,717 sq.
meters) SQUARE METERS, more or less and assessed by
TRANSFER CERTIFICATE OF TITLE NO. 207 in the name of Li Seng
Giap & Co. 1
On August 20, 1962, private respondent, having been served with summons
through counsel, filed a "Motion to Dismiss" on the following grounds:

1. The proposed expropriation has not been duly authorized as

provided by law, principally because it has not been approved by
the Office of the President as required by Section 2245 of the
Revised Administrative Code;

2. There is no genuine necessity for the proposed expropriation

of the defendant's property;

3. The proposed park should be put up in a different site which

would entail less expense to the plaintiff;

4. The present expropriation proceeding instituted by the herein

plaintiff against the defendant is discriminatory;

5. The plaintiff does not have sufficient funds to push through its
project of constructing a park and to allow the plaintiff to
expropriate defendant's property this time would be only to
needlessly deprive the latter of the use of its property. 2

On February 8, 1963, the trial court rendered a decision dismissing the

expropriation proceedings mainly on the grounds that there is no "genuine
need" for the petitioner to convert the aforestated lot into a park nor
necessity to widen the streets and that even if there is genuine necessity for
the proposed expropriation, still the petitioner cannot, in this case, exercise
the power of eminent domain as it has no funds to pay the reasonable value
of the land and the building thereon. 3

On February 12, 1963, petitioner filed a motion for reconsideration which was
denied on February 27, 1963. Petitioner then appealed to the Court of
Appeals, which appeal was docketed as CA-G.R. No. 32-259-R. On April 14,
1968, the Court of Appeals rendered a decision reversing the trial court's
decision, the dispositive portion of which is as follows:
 WHEREFORE, the appealed "decision" (order) in Civil Case No.
1436 for expropriation is hereby reversed and set aside, and, in
lieu thereof, another one is hereby rendered denying defendant
Li Seng Gia & Company's motion for dismiss; declaring that
plaintiff Municipality of Daet has a lawful right to take the
property sought to be condemned, for the public use described in
the complaint, upon payment of just compensation to be
determined as of the date of the filing of the complaint; directing
the court a quo to promptly fix the provisional value of the
property sought to be condemned for the purposed of the motion
of plaintiff Municipality of Daet to take immediate possession of
said property under Sec. 2 of Rules 67 (formerly Sec. 3 of Rules
69) of the Rules of Court; and remanding the case to the court a
quo for further proceedings consistent with this decision, the
costs in this appeal to be taxed against plaintiff Municipality of
Daet in accordance with Sec. 12 of Rule 67 (formerly Sec. 13 of
Rule 69) of the Rules of Court; ... 4

On March 20, 1969, after the records of the case were remanded to the trial
court, private respondent filed a "Motion for Appointment of Commissioners
to Fix Just Compensation for the Property Sought to be Taken."

On April 15, 1969, the trial court issued twin orders: (1) fixing the provisional
value of the land at P129,99 per square meter and the value of the
improvement at P30,000.00 totalling P356,040.00 and require the
Municipality to deposit with the Provincial Treasurer in cash or in security
which should be payable on demand and upon deposit being effected, the
Clerk of Court was ordered to issue the necessary writ of place the
Municipality in possession of the property; and (2) appointing Atty. Ernesto
de Jesus, Provincial Assessor, as chairman; Atty. Jose V. Jamito, PNB Branch
Attorney and Dr. Mateo Aquino, a resident of the municipality, as members of
the committee on appraisal. The committee members proceeded to qualify
by taking their oaths of office and then held three sessions on May 10, May
17, and May 24, 1969. On May 28, 1969, the committee filed t he following
report:

COMMISSIONERS' REPORT

In compliance with the order of this Honorable Court dated April

15, 1969, and pursuant to the provisions of Sec. 6. Rule 67 of the
Rules of Court, the undersigned commissioners, with due notice
to the counsels of both parties, convened in the morning of May
10, 1969, for the purpose of finding ways and means by which
the commissioners could ascertain the fair market value of the
property subject of this proceeding. There are two basic
approaches used in the appraisal of land sought to be
condemned the sale approach, and the income approach. The
commissioners as well as the counsels of both parties agreed to
use the sale approach. In order to enable the counsels of both
parties, as well as the commissioners, to gather or secure
documents regarding transaction of real property which the
commissioners might use as guide in determining the fair market
value, the parties agreed to postpone the hearing to May 17,
1969, at 6:30 in the morning.

Hearing was resumed in the morning of May 17, forthwith, the

counsel for the plaintiff presented documents which were
submitted as Exhibits, to wit:

1. Exh. "A" Deed of absolute sale executed by Lydia Moreno in

favor of Jaime R. Alegre, entered as Doc. No. 160: Page No. 33:
Book No. IV; Series of 1962. (The consideration was about P13.00
per square meter).

2. Exh. "B" Deed of absolute sale executed by Jesus Villafranca

y Aules in favor of Sourthern Products Import and Export
Corporation, entered as Doc. No. 314; Page No. 64; Book No. II;
Series of 1962. (The consideration was around P14.00 per square
meter).

3 Exh. "C" Deed of absolute sale executed by Julio Curva, et al.

in favor of Felicidad Vinzons Pajarillo, entered as Doc. No. 186;
Page No. 39; Book No. 1; Series of 1958. (The consideration was
P 15.00 per square meter).

4. Exh. "D" Deed of Absolute Sale executed by Clao Dy Kim To

in favor of Concepcion Fonacier-Abao, entered as Doc. No. 133;
Page No. 88; Book No. V; Series of 1948. (The consideration was
about P8.57 per square meter).
5. Exh. "E" Deed of sale with mortgage executed by Dr.
Agustin F. Cuevas and Leticia Lopez, in favor of the Camarines
Norte Teachers Cooperative Credit Union, Inc., entered as Doc.
No. 117; Page No. 56; Book NO. VIII; Series of 1961. (The
consideration was P57,000.00 the lot with an area of 972
square meters, and a three-storey concrete building assessed at
P16,000.00 under Tax Dec. No. 7083. If we will exclude the value
of the building, the consideration for the land will be about
P43.00 per square meter).

After the submission of the aforementioned exhibits, upon

motion of the counsel for the defendant, the hearing was
postponed to May 24, 1969, at 8:30 in the morning. Upon
resumption of the hearing on said hour and date, the counsel for
the defendant presented Exh. 1, which the deed of sale executed
by the Municipality of Daet in favor of the Development Bank of
the Philippines; the document was executed on January 30, 1969;
Exh. "1-A", the consideration in the amount of P205,600.00; Exh.
"1-B", the area of 2,056 square meters; and Exh. "2", the letter of
Tomas Cootauco to Li Seng Giap & Co., dated July 21, 1962. In
addition to the aforementioned evidence, the counsel for the
defendant presented as witness Lo Chin who testified that
sometime in July, 1962. In addition to the aforementioned
evidence, the counsel for the defendant presented as witness Lo
Chin who testified that sometime in July, 19 1962 (after the fire),
he was instructed by his son-in-law, Mr. Jesus Ty Poco, to see Mr.
Jose Ong, the representative of Mr. William Lee, for the purpose
of making an offer to buy the land subject of this proceeding for
a price of P120.00 per square meter, and P30,000.00 for the
structure thereon; that he had talked with Mr. William Lee, for the
purpose of making an offer to buy the land subject of this
proceeding for a price of P120.00 per square meter, and
P30,000.00 for the structure thereon; that he had talked with Mr.
Jose Ong, for the same purpose, on several occasions 5 or 6
times, the last was sometime in the first week of May, this year
wherein he offered to pay as high as P150.00 per square meter,
and P50,000,00 for the structure thereon; and that Mr. Ty Poco,
having been born in Mercedes, and resided here since birth, was
desirous of buying said property because he intends to build a
memorial thereon. Counsel likewise presented Mr. Jose Ong as
witness to corroborate the testimony of Lo Chin.

After the hearing held by the commissioners, Atty. Ernesto de

Jesus, who is the incumbent provincial assessor, dig up the
records in his office for the purpose of finding, in addition to the
exhibits already presented, other documents covering
transactions of properties located within the areas near the land
sought to be condemned, but failed to locate even a single
document Hence, the commissioners have no other recourse but
to base their appraisal of the value of the land under
consideration from the Exhibits submitted by the parties.

Under Sec. 4, Rule 67, of the Rules of Court, just compensation is

to be determined as of the date of the filing of the complaint. The
above-entitled complaint was filed in August, 1962; hence, Exh.
"1", Exh. "1-B" and Exh. "1-C" could not be taken into
consideration, the same having been executed in the year 1969
seven years after the filing of the complaint. The offer of Mr.
Jesus Ty Poco could not also be considered because the same
was made by one who was under an imperative necessity of
buying the property.

After all the exhibits submitted by the plaintiff had been

examined by the commissioners, and upon a conscientious and
analytical study of the sales of land near the land subject of this
proceeding, and after serious deliberations on the matter, the
commissioners agreed that, in the year 1962, the reasonable or
fair market value of the land subject of this proceeding should be
P60.00 per square meter; and the structure remaining thereon at
P15,000.00

Attached hereto is the map of the commercial center of Daet

wherein the land subject of this case is shown. The lands
described in the Exhibits submitted by the plaintiff are also
indicated thereon.

Daet, Camarines Norte, May 28, 1969.

Resp
ectful
 ly
subm
itted,

(Sgd.) Ernesto de Jesus (Sgd.) Jose V. Jamito

Commissioner Commissioner

(Sgd.) Mateo D. Aquino

Commissioner 5

Private respondent, having received copy of the commissioner's report, filed

a "Motion to Admit Additional Evidence" which was opposed by petitioner but
the same was granted by the Court provided that the additional evidence
consisted of the expert testimony of a duly licensed broker. On August 20,
1969, the municipality manifested its conformity to the commissioner's
report.

Meanwhile, on July 23, 1969, Judge Gabriel V. Valero, the Presiding Judge at
Branch I, issued an order transferring this case to Judge Isidro Vera of Branch
II, who proceeded to take the additional evidence of private respondent. Said
evidence consisted of the testimony of Engineer Aurelio B. Aquino, who
appraised the land involved herein at P200.00 per square meter and the
improvement thereon at P36,500.00 in 1969.

On December 2, 1969, after submission of evidence for both parties, the trial
court rendered a decision disregarding the valuation made by the
commissioners and using the appraisal of Engineer Aurelio B. Aquino in 1969
as the basis in determining the value of the land in 1962. The dispositive
portion of said decision is quoted herein as follows:

WHEREFORE, the Court renders judgment fixing the reasonable

value of the property sought to be expropriated at P117.00 per
square meter or for a total amount of Three Hundred Seventeen
Thousand Eight Hundred Eighty Nine Pesos (P317,889.00), and
the value of the improvement at Thirty Six Thousand Five
Hundred Pesos (P36,500.00), this amount to bear interest at the
legal rate from the filing of the complaint until paid with costs
against the plaintiff.
 SO ORDERED. 6

Both petitioner and private respondent filed their respective motions for
reconsideration, the former praying that the trial court give due course to the
commissioner's report while the latter insisting that the market value of the
land be fixed at P200.00 per square meter. Upon denial of the said motions,
both parties then appealed to the Court of Appeals.

On October 18, 1972, respondent Court of Appeals rendered a decision

sustaining the valuation of the property in 1969, declaring the municipality
to have a lawful right to expropriate and modified the judgment of the trial
court with respect to the interest that can be recovered which should be from
and after the date of actual taking.

Petitioner's motion for reconsideration having been denied, the instant

petition for review on certiorari was filed and the following assignment of
errors raised:

I. Contrary to law and jurisprudence, the Court of Appeals erred

in the interpretation and application of Section 4, Rule 67 of the
Rules of Court by determining the value of the property in
condemnation proceedings at the time of the rendition of the
judgment of the trial court and not at the date of the filing of the
complaint.

II. Contrary to the principle of res judicata, the Court of Appeals

gravely abused its power in modifying, disregarding and
amending its own decision which has long become final and
executory (in CA-G.R. No. 32259-R).

III. Without regard to the guidelines set forth by procedural laws

and jurisprudence, the Court of Appeals erred in giving credence
to an appraiser under the employ of the private respondent and
totally disregarded the findings of the commissioners appointed
by the Court and the by not declaring that the trial judge of
Branch II of the Court of First Instance of Camarines Norte has
gravely abused his discretion in taking cognizance of the
condemnation case.

IV. In any event, by virtue of the Presidential Decree No. 42

issued on November 9, 1972 private respondent in estopped
 from claiming in valuation higher than the assessed value of the
property sought to be condemned. 7

The first assignment of error assails the respondent Court's application of

Section 4, Rule 67 of the Revised Rules of Court which states the time when
the value of the land should be determined in condemnation proceedings.
The Rule provides thus:

Sec. 4. Order of condemnation. When such a motion is

overruled or when any party fails to defend as required by this
rule, the court may enter an order of condemnation declaring
that the plaintiff has a lawful right to take the property sought to
be condemned, for the public use or purpose described in the
complaint, upon payment of just compensation to be determined
as of the date of the filing of the complaint ...

A look into the original of this provision reveals that it is a reproduction of

Section 5, Rule 69 of the Rules of Court of July 1, 1940. In turn, the said
provision in the Rules of 1940 appears to have been taken from the ruling
Manila Railroad Company vs. Caligsihan, 8 a 1919 case, where the rule that
"the value of the property taken should be fixed as of the date of the
proceedings" was enunciated.

Prior to the promulgation of the Rules of 1940, however, there is another

case that touched on the question of time when valuation of the property
taken should be fixed. This is the case of Provincial Government of Rizal vs.
Caro de Araullo 9 a 1938 case, where the value of the property therein
involved was fixed as of the date when it was taken in 1927 and not at the
time of the filing of the complaint in 1928. This ruling was reiterated in
Republic vs. Lara, 10 a 1954 case, where it was held that the value of the
lands expropriated must be reckoned as of the time of the actual possession
by the Government in 1946 and not as of the time of the filing of the
complaint in 1949. Such was the ruling notwithstanding the fact that the
Rules of 1940 was already in force and effect. In explaining the ruling, the
Court therein held:

... Ordinarily, inquiry is limited to actual market values at the

time of the institution of the condemnation proceedings because
under normal circumstances, the filing of the complaint coincides
or even precedes the taking of the property by the plaintiff; and
Rule 69 simply fixes this convenient date for the valuation of
 property sought to be expropriated. Where, however, the actual
taking or occupation by the plaintiff, with the consent of the
landowner long precedes the filing of the complaint for
expropriation the rule to be followed must still be that
enunciated by us in Provincial Government of Rizal vs. Caro,
supra, that "that value of the property should be fixed as of the
date when it was taken and not of the date of the filing of the
proceedings." For where property is taken ahead of the filing of
the condemnation proceedings, the value thereof may be
enhanced by the public purpose for which it is taken, the entry of
the plaintiff upon the property may have depreciated its value
thereby, or there may have been a natural increase in the value
of the property from the time it is taken to the time the
complaint is filed, due to general economic conditions. The
owner of the private property should be compensated only for
what he actually loses, it is not intended that his compensation
shall extend beyond his loss or injury. And what he loses is only
the actual value of his property at the time it is taken. This is the
only way the compensation to be paid can be truly just, i.e.,
"just" not only to the individual whose property is taken, "but to
the public, which is to pay for it." (18 Am. Jur. 873, 874)

Subsequent cases where the taking preceded the filing of the expropriation
proceedings followed the doctrine in the Caro case. These cases were:
Republic vs. Garcellano, et al.; 11 Municipal Government of Sagay vs. Jison, et
al.; 12 and Alfonso vs. Pasay City. 13 However, in the case of Republic vs.
Narciso, et al., 14 where the expropriation proceeding preceded the taking, it
was held that the value of "the property to be considered are those at the
beginning of the expropriation" and not accordingly at the time of the taking
of said property. For this reason, this Court fittingly saw the need for clarify
the departure of some cases from the mandate of Section 5, Rule 69 of the
Rules of Court of 1940 (now Section 4, Rule 67 of the Revised Rules of Court)
in the case of Republic of the Philippines vs. Philippine National Bank, 15
where it was held:

It is apparent from the foregoing that, when plaintiff takes

possession before the institution of the condemnation
proceedings, the value should be fixed as of the time of the
taking of the said possession, not the filing of the complaint, and
the latter should be the basis for the determination of the value,
 when the taking of the property involved coincides with or is
subsequent to, the commencement of the proceedings. Indeed,
otherwise, the provision of Rule 69, Section 5, directing that
compensation" be determined as of the date of the filing of the
complaint," would never be operative.

In Capitol Subdivision, Inc. vs. Province of Negros Occidental, 7 SCRA 60, the
Court said that "Since the right of the Province of Negros Occidental to
expropriate the lot in question in the present case is not contested, the
owner of said lot is entitled to recover from said province the fair and full
value of the lot, as of the time when possession thereof was actually taken
by the province, plus consequential damages including attorney's fees
from which the consequential benefits, if any, should be deducted with
interest at the legal rate, on the aggregate sum due to the owner from and
after the date of actual taking." And in the case of J.M. Tuason & Co., INc. vs.
Land Tenure Administration, 31 SCRA 413, the Court, speaking thru now
Chief Justice Fernando, reiterated the "well-settled (rule) of the property at
the time of its taking. Anything beyond that is more and anything short of
that is less, than just compensation. It means a fair and full equivalent for
the loss sustained, which is the measure of the indemnity, not whatever gain
would accrue to the expropriation entity."

In the case at bar, it is a fact that there has been no taking of the property
prior to the institution of the condemnation proceedings. And it cannot even
be said that the filing of the complaint coincided with he taking of the
property by the plaintiff because the latter did not enter into possession of
the property since it failed or did not comply with the order of the Court
requiring the municipality to make the necessary deposit of the provisional
value as fixed by the Court in its Order of April 15, 1969. Petitioner did not
even move for a reconsideration of said Order. The trial proceeded and after
hearing and submission of evidence for both parties, the trial court rendered
on December 2, 1969 its decision "fixing the reasonable value of the
property sought to be expropriated at P117.00 per square meter or for a total
amount of Three Hundred Seventeen Thousand Eight Hundred Eighty Nine
Pesos (P317,889.00), and the value of the improvement at Thirty Six
Thousand Five Hundred Pesos (P36,500.00), said amount ... to bear interest
at the legal rate from the date of the filing of the complaint until paid."

Still questioning the value determined by the trial court, petitioner appealed
to the Court of Appeals and on October 8, 1972, the appellate court in its
judgment fixed the value of the property at P200.00 per square meter and
P36,500.00 for the improvement. Not yet satisfied, the municipality appealed
to the Supreme Court and meantime took no step to take possession of the
land. While petitioner submitted a Manifestation on September 15, 1977 to
this Court invoking Presidential Decree No. 42 dated November 9, 1972 and
manifesting that it had made a deposit to the Philippine National Bank in the
amount of P54,370.00 as per PNB Certificate No. 9381 dated February 9,
1973, We hold that petitioner has not made the correct and proper deposit of
the provisional value as fixed by the trial court. It is elementary that
Presidential Decree No. 42 of November 9, 1972 which grants the right to
take or enter upon the possession of the property sought to be expropriated
if he deposits with the Philippine National Bank an amount equivalent tot he
assessed value of the property for purposes of taxation has no application to
the case at bar where the Court of Appeals had already fixed the value of the
property at P200.00 per square meter and P36,500.00 for the improvement
in its decision promulgated on October 18, 1972 about three weeks earlier
than the issuance of the Presidential Decree No. 42

By not complying with the orders of the trial court and the appellate court,
petitioner would benefit by its non-compliance and dilly-dallying in taking
possession of the property which We will not sanction or allow to the
prejudice of the private respondent landowner who should not be penalized
by the protracted delay of petitioner in taking over the property over a
period of seventeen (17) years during which time private respondent was
deprived of the beneficial use of the land and the improvement thereon.
Petitioner upon tiling the complaint has the duty to make the deposit in the
amount provisionally ascertained and fixed by the court (Sec. 2, Rule 67,
Rules of Court), which deposit serves the double purpose of pre- payment of
the property if the same is finally expropriated and of an indemnity for
damages if the proceedings are dismissed. (Visayan Refining Co. vs. Camus,
40 Phil. 550; Republic of the Philippines vs. Baylosis, L-13582, Sept. 30,
1960)

The records disclose that petitioner filed a Motion for Authority to Demolish
Building of Private Respondent dated June 27, 1974 for reasons therein
alleged which private respondent opposed as not being the proper procedure
under the law to abate a nuisance unless petitioner deposits the amount of
P36,500.00 which is the value of the improvement. The Court resolved to
deny the motion without prejudice to petitioner's taking the proper
proceedings for the abatement of the alleged nuisance pursuant to the
provisions of the new Civil Code in its Resolution of July 24, 1974.

The records further disclose that in the Petition to Cite the Mayor of the
Municipality of Daet (Herein Petitioner) in Contempt of Court filed by private
respondent on February 14, 1978, this Court was informed that the petitioner
acting thru its Mayor, Engineer Jose P. Timoner, started to demolish on
February 6, 1978 the building of the private respondent, attaching thereto
photographs marked Annexes 1 and 2 showing the building before and
during the demolition. Private respondent prayed that the Mayor be cited for
contempt or alternatively, that the petitioner be ordered to deposit with the
Philippine National Bank the amount of P36,500.00 instead of P28,830.00 to
await the final outcome of this case.

Commenting on the petition to cite the Mayor in contempt of court,

petitioner again relies on Presidential Decree No. 42 alleging that the
assessed value of the property for taxation purposes is only P18,250.00
which is less than the amount of P28,830.00 it had already deposited with
the Philippine National Bank.

The above antecedent facts and circumstances of this case are unique and
abnormal such that by reason thereof, We agree with the judgment of the
Court of Appeals fixing the fair market value of the property sought to be
expropriated at P200.00 per sq. meter or for a total of FIVE HUNDRED FORTY
THREE THOUSAND FOUR HUNDRED (P543,400.00) PESOS, and the value of
the improvement thereon at THIRTY SIX THOUSAND FIVE HUNDRED
(P36,500.00) PESOS, Philippine Currency, both amounts to bear legal interest
from and after the date of the actual taking of possession by the Municipality
of Daet, Camarines Norte until the full amount is paid, with costs against
plaintiff-appellant.

We hold that the decision of the Court of Appeals fixing the market value of
the property to be that obtaining, at least, as of the date of the rendition of
the judgment on December 2, 1969 as prayed by private respondent, which
the Court fixed at P200.00 per square meter is in conformity with doctrinal
rulings herein above cited that the value should be fixed as of the time of the
taking of the possession of the property because firstly, at the time judgment
was rendered on December 2, 1969, petitioner had not actually taken
possession of the property sought to be expropriated and secondly, We find
the valuation determined by the Court of Appeals to be just, fair and
reasonable.

On the second assignment of error, petitioner faults the respondent court in

modifying, disregarding and amending its own decision in CA-G.R. No. 32259-
R which directed payment of just compensation to be determined as of the
date of the filing of the complaint. Petitioner claims that this decision has
tong become final and executory and it would be contrary to the doctrine of
res judicata to modify, disregard and amend said decision.

In order that there may be res judicata, the following requisites must be
present: (a) the former judgment must be final; (b) it must have been
rendered by a court having jurisdiction of the subject- matter and of the
parties; (c) it must be a judgment on the merits; and (d) there must be,
between the first and second actions, Identity of parties, of subject matter,
and of cause of action. 16

When, between the first case where the judgment was rendered, and the
second case where such judgment is invoked, the three Identities mentioned
in paragraph (d) above, are present, the judgment on the merits rendered in
the first case constitutes an absolute bar to the subsequent action. It is final
as to the claim or demand in the controversy, including the parties and those
in privity with them, not only as to every matter which was offered and
received to sustain or defeat the claim or demand, but as to any other
admissible matter which might have been offered for that purpose and of all
matters that could have been adjudged in that case. 17

This is, however, not the situation in the case at bar. The only question
drawn in issue before the Court of Appeals in CA-G.R. No. 32259-R was
whether petitioner had the authority to exercise the right of eminent domain.
The question regarding the amount of just compensation was expressly
reserved by the Court of Appeals for the trial court to determine. Perforce,
Between the first case wherein the judgment is rendered, and the second
case wherein such judgment is invoked, there is Identity of parties but there
is no Identity of causes of action. In such a situation, the judgment is
conclusive in the second case only to those matters actually and directly
controverted and determined, and not as to matters merely involved therein.
To constitute res judicata, the right to relief in one suit must rest upon the
same question which in essence and substance was litigated and determined
in the first suit. 18
That phrase in the dispositive portion of the decision of the Court of Appeals
in CA-G.R. No. 32259-R referring to the time that should be considered in
reckoning the just compensation, to wit "declaring that plaintiff
Municipality of Daet has the lawful right to take the Property sought to be
condemned, for the public use described in the complaint, upon payment of
just compensation to be determined as of the date of the filing of the
complaint" cannot likewise constitute the law of the case, which is a
doctrine closely akin to res judicata. The law of the case, as applied to a
former decision of an appellate court, merely expresses the practice of the
courts in refusing to reopen what has been decided. 19 It differs from res
judicata in that the conclusiveness of the first judgment ' is not dependent
upon its finality. The first judgment is generally' if not universally, not final. 20
It relates entirely to questions of law, and is confined in its operation to
subsequent proceedings in the same case. 21 While it is conclusive as to all
matters within its scope, it cannot be invoked, except as to questions as
have been actually considered and determined in the first appeal. In the
application of this rule, courts will take cognizance of such points only as
affirmatively appears in the last to have been decided in the former appeal.
22

Moreover, this case is before the Supreme Court and being the Court of last
resort, it is the final arbiter of all legal questions properly brought before it
and its decision in any given case constitutes the law of this particular case.
Once Our judgment becomes final, it is binding on all inferior courts, and
hence beyond their power and authority to alter or modify. (Kabigting vs.
Acting Director oil Prisons, 6 SCRA 281, 286). Petitioner's second assignment
of error is, therefore, without merit.

The first part of the third assignment of error hinges on what is the proper
procedure in determining the just compensation in proceedings.

Section 5, Rule 67 of the Revised Rules of Court calls for the appointment of
not more than three (3) competent and disinterested persons as
commissioners to ascertain and report to the court the just compensation for
the property sought to be taken. As to the extent of this function and power
of the commissioner, this Court held in Manila Railroad Company vs.
Velasquez 23 that the commissioners' power is limited to assessing the value
and determining the amount of damages. There it stops; they can go no
farther. The value and damages awarded must be a just compensation and
no more and no less. But in fixing these amounts, the commissioners are not
to act ad libitum. They are to discharge the trust reposed in them according
to well-established rules and form their judgment upon correct legal
principles. To deny this is to place them where no one else in this country is
placed, above the law and beyond accountability.

Corollary to tills limitation, it has been held that reports submitted by

commissioners of appraisals in condemnation proceedings are not binding,
but merely advisory in character, as far as the court is concerned. 24 An early
case enunciated the rule that a Court of First Instance has the undoubted
right to reject the report of the commissioners as to the value of the land, if
the report is not founded upon legal evidence. The judge has the undoubted
right also to discharge the commission and appoint a new one. He also has
the right to formulate an opinion of his own as to the value of the land in
question, nevertheless, if he formulates such an opinion, he must base it
upon competent evidence. 25 When the commissioners report is not in
accordance with the law on the matter, another case ruled that it cannot
serve as the basis of the judicial decision but must be annulled and set aside,
and the case remanded to the court below for reopening of trial. 26 Then, in
still other cases, it was held that a Court of First Instance or on appeal, the
Supreme Court may substitute its own estimate of value as gathered from
the record submitted to it, in cases where the only error of the
commissioners is that they have applied illegal principles to the evidence
submitted to them; or that they have disregarded a clear preponderance of
evidence; or that they have used an improper rule of assessment in arriving
at the amount of the award; provided always that the evidence be clear and
convincing and the amount allowed by the commissioners is grossly
inadequate or excessive. 27

That the commissioners' report is not final and conclusive, but merely
recommendatory is bolstered by the requirement in Section 8, Rule 67 of the
Revised Rules of Court of conducting a hearing thereon. Otherwise stated,
said provision requires that upon the expiration of the period of ten (10) days
within which all interested parties may file their objects to the report, or even
before the expiration of such period if all interested parties have filed their
objections to the report or their statement of agreement therewith, the court
must conduct a hearing on the report.

In view of these basic provisions of the Rules of Court on eminent domain

and various jurisprudence on the function of the commissioners as limited by
the Court, We hold that the respondent Court of Appeals did not err in giving
credence to the appraiser employed by private respondent and in
disregarding the commissioners report.

Respondent court found that aside from being a civil engineer, Aurelio B.
Aquino is a licensed real estate broker and appraiser of long standing, being
one of the incorporators of C.M. Hoskins and Co., Inc., a corporation engaged
in real estate brokerage since October, 1938 and of which firm he is
presently the Chairman of the board of directors. With these qualifications,
respondent court committed no error in concluding that he was competent to
make the appraisal of the fair market value of the parcel of land under
consideration. Although he does not maintain an office in Daet nor does he
appear to have had any transactions in said locality, he is compatent since a
commercial parcel of land retains the same characteristics whether it is
located in Manila or Daet, and the criterion for making an appraisal of a
parcel of land is universally applied, irrespective of the locality where it is
situated. And since the value of a parcel of land taken by eminent domain is
always a matter of opinion, the same may be proved by opinion evidence of
the real estate appraiser. 28 Hence, We find substantial basis for the court to
fix the value of the land at P200-00 per square meter and the building at
P36,500.00 as testified to by the broker.

Petitioner assails the transfer of the case from Branch I of the Court of First
Instance of Camarines Norte to Branch 11 thereof, claiming that the
jurisdiction of the respective branches are delineated by a controlling
department circular and thereby concluding that Branch 11 has no legal and
valid authority to take over said expropriation case.

We do not agree. Where a court of first instance is divided into several

branches, each of the branches is not a court distinct and separate from the
others. Jurisdiction is vested in the court, not in the judges, so that when a
complaint or information is filed before one branch or judge, jurisdiction does
not attach to said branch or judge alone, to the exclusion of the others. Trial
may be had or proceedings may continue by and before another branch or
judge. It is for this reason that Section 57 of the Judiciary Act, expressly
grants the Minister of Justice, upon recommendation of the district Judge, the
administrative right or power to apportion the cases among the different
branches, both for the convenience of the parties and the coordination of the
work by the different branches, and the judges presiding each branch. The
apportionment does not involve a grant or limitation or jurisdiction; this
continues to be vested in the court of first instance of the province as a
whole, and trial may be had by any judge or branch of the court. 29

We do agree, however, that the apportionment of cases must be respected

by the judges in the interest of order and coordination in the dispatch of
cases. But the question of whether Branch II took cognizance of a case
properly belonging to another branch is negated by the fact, pointed out by
respondents, that Administrative Order No. 472 of the Secretary of Justice
dividing the Province of Camarines Norte between Branch I and Branch II
took effect on January 1, 1971 long after Branch II had disposed of the case
at bar because said case was decided on December 2, 1969.

The fourth assignment of error is clearly untenable. Presidential Decree No.

42 issued on November 9, 1972 does not limit the just compensation in
expropriation proceedings to the assessed value of the value sought to be
condemned. By its title alone, i.e., "Authorizing the Plaintiff in Eminent
Domain Proceedings to Take Possession of the Property Involved Upon
Depositing the Assessed Value for Purposes of Taxation," it can already be
gleaned that said decree fixes only the provisional value of the property. As a
provisional value, "it does not necessarily represent the true and correct
value of the land. The value is only "provisional" or "tentative" to serve as
the basis for the immediate occupancy of the property being expropriated by
the condemnor. 30

This decree repealed Section 2, Rule 67 of the Revised Rules of Court which
imposed upon the court having jurisdiction of the proceeding with the duty of
ascertaining and fixing the provisional value of The property. As stated in the
said decree itself, the repeal was necessary inasmuch as the "existing
procedure for the exercise of the right of eminent domain is not expeditious
enough to enable the plaintiff to take possession of the real property
involved as soon as possible, when needed for public purposes."

Even in Presidential Decree No. 76, "Requiring All Persons, Natural or Juridical
Owning or Administering Real Property, Including the Improvements Thereon,
to File Sworn Statement of the True Value of Such Property," issued on
December 6, 1972, it is clearly stated that the just compensation is based on
the current and fair market value and not on the assessed value. The
pertinent provisions state as follows:

For purposes of just compensation in cases of private property

acquired by the government for public use, the basis shall be the
 current and fair market value as declared by the owner or
administrator or such market value as determined by the
assessor, whichever is lower.

Under this Decree, the assessed valuation which shall be the

basis for payment of real property tax beginning the calendar
year 1974 shall be fifty per centum of the current fair market
value, as determined by the assessor, in case of commercial,
industrial or mineral lands; forty per centum in the case of
agricultural lands and thirty per centum in the case of lands for
purely residential purposes.

Clearly, therefore, the assessed value of a property constitutes only a

percentage of its current fair market value. It cannot, thus, be the direct
basis of just compensation in expropriation proceedings.

But more importantly, this assignment of error is bereft of merit because

Presidential Decree No. 42 is inapplicable in the case at bar. As pointed out
by private respondent, it is a cardinal rule of statutory construction that laws
shall have only prospective effect. The provisional value of the property in
this case having already been fixed, the deposit on February 9, 1973 of the
amount of P54,370.00 representing the assessed value of the land and the
deposit on October 21, 1977 of the amount of P25,830.00 representing the
assessed value of the improvement, both pursuant to the said decree, are
not sufficient. Nevertheless, said amounts should be deducted from the total
amount due to private respondent.

To elucidate and clarify the judgment of this Court in affirming the decision
appealed from, We consider and hold that the demolition of the building of
private respondent standing on the land by the Municipal Mayor, Engr. Jose P.
Timoner on February 14, 1978 constituted the actual taking of possession of
the property sought to be expropriated by the Municipality of Daet. And from
said date, February 14, 1978, interest at the legal rate shall be paid by the
municipality until the full amount is paid.

IN VIEW OF ALL THE FOREGOING, the judgment under review is hereby

AFFIRMED in toto.

SO ORDERED.

Claudio Teehankee, took no part.

Makasiar, Fernandez, De Castro and Melencio Herrera, JJ., concur.
 EN BANC

DIOSDADO LAGCAO, G.R. No. 155746

DOROTEO LAGCAO and

URSULA LAGCAO,

Petitioners, Present:

DAVIDE, C.J.,

PUNO,

PANGANIBAN,

QUISUMBING,

YNARES-SANTIAGO,

- versus - SANDOVAL-GUTIERREZ,

CARPIO,

AUSTRIA-MARTINEZ,

CORONA,

CARPIO MORALES,*

CALLEJO, SR.,

AZCUNA,*

TINGA and

CHICO-NAZARIO,* JJ.

JUDGE GENEROSA G. LABRA,

Branch 23, Regional Trial Court,

Cebu, and the CITY OF CEBU,

*
 Respondent. Promulgated:

October 13, 2004

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CORONA, J.:

Before us is a petition for review of the decision dated July 1, 2002 of

the Regional Trial Court, Branch 23, Cebu City 1 upholding the validity of the

City of Cebus Ordinance No. 1843, as well as the lower courts order dated

August 26, 2002 denying petitioners motion for reconsideration.

In 1964, the Province of Cebu donated 210 lots to the City of Cebu. One of

these lots was Lot 1029, situated in Capitol Hills, Cebu City, with an area of

4,048 square meters. In 1965, petitioners purchased Lot 1029 on installment

basis. But then, in late 1965, the 210 lots, including Lot 1029, reverted to the

Province of Cebu.2 Consequently, the province tried to annul the sale of Lot

1029 by the City of Cebu to the petitioners. This prompted the latter to sue

2
the province for specific performance and damages in the then Court of First

Instance.

On July 9, 1986, the court a quo ruled in favor of petitioners and

ordered the Province of Cebu to execute the final deed of sale in favor of

petitioners. On June 11, 1992, the Court of Appeals affirmed the decision of

the trial court. Pursuant to the ruling of the appellate court, the Province of

Cebu executed on June 17, 1994 a deed of absolute sale over Lot 1029 in

favor of petitioners. Thereafter, Transfer Certificate of Title (TCT) No. 129306

was issued in the name of petitioners and Crispina Lagcao.3

After acquiring title, petitioners tried to take possession of the lot only to

discover that it was already occupied by squatters. Thus, on June 15, 1997,

petitioners instituted ejectment proceedings against the squatters. The

Municipal Trial Court in Cities (MTCC), Branch 1, Cebu City, rendered a

decision on April 1, 1998, ordering the squatters to vacate the lot. On appeal,

the RTC affirmed the MTCCs decision and issued a writ of execution and

order of demolition.

3
 However, when the demolition order was about to be implemented,

Cebu City Mayor Alvin Garcia wrote two letters 4 to the MTCC, requesting the

deferment of the demolition on the ground that the City was still looking for a

relocation site for the squatters. Acting on the mayors request, the MTCC

issued two orders suspending the demolition for a period of 120 days from

February 22, 1999. Unfortunately for petitioners, during the suspension

period, the Sangguniang Panlungsod (SP) of Cebu City passed a resolution

which identified Lot 1029 as a socialized housing site pursuant to RA 7279. 5

Then, on June 30, 1999, the SP of Cebu City passed Ordinance No. 1772 6

which included Lot 1029 among the identified sites for socialized housing. On

July, 19, 2000, Ordinance No. 1843 7 was enacted by the SP of Cebu City

authorizing the mayor of Cebu City to initiate expropriation proceedings for

the acquisition of Lot 1029 which was registered in the name of petitioners.

The intended acquisition was to be used for the benefit of the homeless after

its subdivision and sale to the actual occupants thereof. For this purpose, the

ordinance appropriated the amount of P6,881,600 for the payment of the

subject lot. This ordinance was approved by Mayor Garcia on August 2, 2000.

7
On August 29, 2000, petitioners filed with the RTC an action for declaration of

nullity of Ordinance No. 1843 for being unconstitutional. The trial court

rendered its decision on July 1, 2002 dismissing the complaint filed by

petitioners whose subsequent motion for reconsideration was likewise denied

on August 26, 2002.

In this appeal, petitioners argue that Ordinance No. 1843 is

unconstitutional as it sanctions the expropriation of their property for the

purpose of selling it to the squatters, an endeavor contrary to the concept of

public use contemplated in the Constitution. 8 They allege that it will benefit

only a handful of people. The ordinance, according to petitioners, was

obviously passed for politicking, the squatters undeniably being a big source

of votes.

In sum, this Court is being asked to resolve whether or not the intended

expropriation by the City of Cebu of a 4,048-square-meter parcel of land

owned by petitioners contravenes the Constitution and applicable laws.

8
 Under Section 48 of RA 7160, 9 otherwise known as the Local

Government Code of 1991,10 local legislative power shall

be exercised by the Sangguniang Panlungsod of the city. The legislative acts

of the Sangguniang Panlungsod in the exercise of its lawmaking authority are

denominated ordinances.

Local government units have no inherent power of eminent domain and can

exercise it only when expressly authorized by the legislature. 11 By virtue of

RA 7160, Congress conferred upon local government units the power to

expropriate. Ordinance No. 1843 was enacted pursuant to Section 19 of RA

7160:

SEC. 19. Eminent Domain. A local government unit may,

through its chief executive and acting pursuant to an ordinance,
exercise the power of eminent domain for public use, or purpose,
or welfare for the benefit of the poor and the landless, upon
payment of just compensation, pursuant to the provisions of the
Constitution and pertinent laws xxx. (italics supplied).

10

11
 Ordinance No. 1843 which authorized the expropriation of petitioners

lot was enacted by the SP of Cebu City to provide socialized housing for the

homeless and low-income residents of the City.

However, while we recognize that housing is one of the most serious

social problems of the country, local government units do not possess

unbridled authority to exercise their power of eminent domain in seeking

solutions to this problem.

There are two legal provisions which limit the exercise of this power:

(1) no person shall be deprived of life, liberty, or property without due

process of law, nor shall any person be denied the equal protection of the

laws;12 and (2) private property shall not be taken for public use without just

compensation.13 Thus, the exercise by local government units of the power

of eminent domain is not absolute. In fact, Section 19 of RA 7160 itself

explicitly states that such exercise must comply with the provisions of the

Constitution and pertinent laws.

The exercise of the power of eminent domain drastically affects a

landowners right to private property, which is as much a constitutionally-

12

13
protected right necessary for the preservation and enhancement of personal

dignity and intimately connected with the rights to life and liberty. 14 Whether

directly exercised by the State or by its authorized agents, the exercise of

eminent domain is necessarily in derogation of private rights. 15 For this

reason, the need for a painstaking scrutiny cannot be overemphasized.

The due process clause cannot be trampled upon each time an ordinance

orders the expropriation of a private individuals property. The courts

cannot even adopt a hands-off policy simply because public use or public

purpose is invoked by an ordinance, or just compensation has been fixed and

determined. In De Knecht vs. Bautista,16 we said:

It is obvious then that a land-owner is covered by the mantle of

protection due process affords. It is a mandate of reason. It
frowns on arbitrariness, it is the antithesis of any governmental
act that smacks of whim or caprice. It negates state power to
act in an oppressive manner. It is, as had been stressed so often,
the embodiment of the sporting idea of fair play. In that sense, it
stands as a guaranty of justice. That is the standard that must
be met by any governmental agency in the exercise of whatever
competence is entrusted to it. As was so emphatically stressed
by the present Chief Justice, Acts of Congress, as well as those
of the Executive, can deny due process only under pain of nullity.
xxx.

14

15

16
 The foundation of the right to exercise eminent domain is genuine

necessity and that necessity must be of public character. 17 Government may

not capriciously or arbitrarily choose which private property should be

expropriated. In this case, there was no showing at all why petitioners

property was singled out for expropriation by the city ordinance or what

necessity impelled the particular choice or selection. Ordinance No. 1843

stated no reason for the choice of petitioners property as the site of a

socialized housing project.

Condemnation of private lands in an irrational or piecemeal fashion or

the random expropriation of small lots to accommodate no more than a few

tenants or squatters is certainly not the condemnation for public use

contemplated by the Constitution. This is depriving a citizen of his property

for the convenience of a few without perceptible benefit to the public.18

RA 7279 is the law that governs the local expropriation of property for

purposes of urban land reform and housing. Sections 9 and 10 thereof

provide:

17

18
 SEC 9. Priorities in the Acquisition of Land. Lands for
socialized housing shall be acquired in the following order:

(a) Those owned by the Government or any of its

subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and
their subsidiaries;

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas or Priority

Development, Zonal Improvement Program sites, and
Slum Improvement and Resettlement Program sites
which have not yet been acquired;

(e) Bagong Lipunan Improvement of Sites and Services

or BLISS which have not yet been acquired; and

(f) Privately-owned lands.

Where on-site development is found more practicable and

advantageous to the beneficiaries, the priorities mentioned in
this section shall not apply. The local government units shall give
budgetary priority to on-site development of government lands.
(Emphasis supplied).

SEC. 10. Modes of Land Acquisition. The modes of

acquiring lands for purposes of this Act shall include, among
 others, community mortgage, land swapping, land assembly or
consolidation, land banking, donation to the Government, joint
venture agreement, negotiated purchase, and expropriation:
Provided, however, That expropriation shall be resorted to
only when other modes of acquisition have been
exhausted: Provided further, That where expropriation is
resorted to, parcels of land owned by small property owners shall
be exempted for purposes of this Act: xxx. (Emphasis supplied).

In the recent case of Estate or Heirs of the Late Ex-Justice Jose B.L.

Reyes et al. vs. City of Manila, 19 we ruled that the above-quoted provisions

are strict limitations on the exercise of the power of eminent domain by local

government units, especially with respect to (1) the order of priority in

acquiring land for socialized housing and (2) the resort to expropriation

proceedings as a means to acquiring it. Private lands rank last in the order of

priority for purposes of socialized housing. In the same vein, expropriation

proceedings may be resorted to only after the other modes of acquisition are

exhausted. Compliance with these conditions is mandatory because these

are the only safeguards of oftentimes helpless owners of private property

against what may be a tyrannical violation of due process when their

property is forcibly taken from them allegedly for public use.

We have found nothing in the records indicating that the City of Cebu

complied strictly with Sections 9 and 10 of RA 7279. Ordinance No. 1843

sought to expropriate petitioners property without any attempt to first

19
acquire the lands listed in (a) to (e) of Section 9 of RA 7279. Likewise, Cebu

City failed to establish that the other modes of acquisition in Section 10 of RA

7279 were first exhausted. Moreover, prior to the passage of Ordinance No.

1843, there was no evidence of a valid and definite offer to buy petitioners

property as required by Section 19 of RA 7160. 20 We therefore find

Ordinance No. 1843 to be constitutionally infirm for being violative of the

petitioners right to due process.

It should also be noted that, as early as 1998, petitioners had already

obtained a favorable judgment of eviction against the illegal occupants of

their property. The judgment in this ejectment case had, in fact, already

attained finality, with a writ of execution and an order of demolition. But

Mayor Garcia requested the trial court to suspend the demolition on the

pretext that the City was still searching for a relocation site for the squatters.

However, instead of looking for a relocation site during the suspension

period, the city council suddenly enacted Ordinance No. 1843 for the

expropriation of petitioners lot. It was trickery and bad faith, pure and

simple. The unconscionable manner in which the questioned ordinance was

passed clearly indicated that respondent City transgressed the Constitution,

RA 7160 and RA 7279.

20
 For an ordinance to be valid, it must not only be within the corporate

powers of the city or municipality to enact but must also be passed

according to the procedure prescribed by law. It must be in accordance with

certain well-established basic principles of a substantive nature. These

principles require that an ordinance (1) must not contravene the Constitution

or any statute (2) must not be unfair or oppressive (3) must not be partial or

discriminatory (4) must not prohibit but may regulate trade (5) must be

general and consistent with public policy, and (6) must not be

unreasonable.21

Ordinance No. 1843 failed to comply with the foregoing substantive

requirements. A clear case of constitutional infirmity having been thus

established, this Court is constrained to nullify the subject ordinance. We

recapitulate:

first, as earlier discussed, the questioned ordinance is repugnant to the

pertinent provisions of the Constitution, RA 7279 and RA 7160;

second, the precipitate manner in which it was enacted was plain

oppression masquerading as a pro-poor ordinance;

21
 third, the fact that petitioners small property was singled out for

expropriation for the purpose of awarding it to no more than a few

squatters indicated manifest partiality against petitioners, and

fourth, the ordinance failed to show that there was a reasonable

relation between the end sought and the means adopted. While the

objective of the City of Cebu was to provide adequate housing to slum

dwellers, the means it employed in pursuit of such objective fell short

of what was legal, sensible and called for by the circumstances.

Indeed, experience has shown that the disregard of basic liberties and

the use of short-sighted methods in expropriation proceedings have not

achieved the desired results. Over the years, the government has tried to

remedy the worsening squatter problem. Far from solving it, however,

governments kid-glove approach has only resulted in the multiplication and

proliferation of squatter colonies and blighted areas. A pro-poor program that

is well-studied, adequately funded, genuinely sincere and truly respectful of

everyones basic rights is what this problem calls for, not the improvident

enactment of politics-based ordinances targeting small private lots in no

rational fashion.
 WHEREFORE, the petition is hereby GRANTED. The July 1, 2002

decision of Branch 23 of the Regional Trial Court of Cebu City is REVERSED

and SET ASIDE.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 182209 October 3, 2012

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
EMILIANO R. SANTIAGO, JR., Respondent.

DECISION

LEONARDO-DE CASTRO, J.:

This is a Petition for Review on Certiorari1 seeking to annul and set aside the
September 28, 2007 Decision2 and March 14, 2008 Resolution3 of the Court
of Appeals in CA-G.R. SP No. 82467, which affirmed the January 21, 2000
Decision4 of the Regional Trial Court of Cabanatuan City, Branch 23, sitting as
a Special Agrarian Court (SAC Branch 23 ), as modified by the January 28,
2004 Resolution5 of the Regional Trial Court of Cabanatuan City, Branch 29
(SAC Branch 29) in Agrarian Case No. 125-AF.
The antecedents of this case, as culled from the records, are as follows:

Petitioner Land Bank of the Philippines (LBP) is a government financial

institution6 designated under Section 64 of Republic Act No. 66577 as the
financial intermed iary of the agrarian reform program of the government.8
Respondent Emiliano R. Santiago, Jr. (respondent) is one of the heirs of
Emiliano F. Santiago (Santiago), the registered owner of an 18.5615-hectare
parcel of land (subject property) in Laur, Nueva Ecija, covered by Transfer
Certificate of Title (TCT) No. NT-60359.9
Pursuant to the governments Operation Land Transfer (OLT) Program under
Presidential Decree No. 27,10 the Department of Agrarian Reform (DAR)
acquired 17.4613 hectares of the subject property.11

In determining the just compensation payable to Santiago, the LBP and the
DAR used the following formula under Presidential Decree No. 27, which
states:
For the purpose of determining the cost of the land to be transferred to the
tenant- farmer pursuant to this Decree, the value of the land shall be
equivalent to two and one-half (2-1/2) times the average harvest of three
normal crop years immediately preceding the promulgation of this Decree.

and Executive Order No. 228, which reads:

Sec. 2. Henceforth, the valuation of rice and corn lands covered by P.D. No.
27 shall be based on the average gross production determined by the
Barangay Committee on Land Production in accordance with Department
Memorandum Circular No. 26, series of 1973 and related issuances and
regulation of the Department of Agrarian Reform. The average gross
production per hectare shall be multiplied by two and a half (2.5), the
product of which shall be multiplied by Thirty-Five Pesos (P 35.00), the
government support price for one cavan of 50 kilos of palay on October 21,
1972, or Thirty One Pesos (P 31.00), the government support price for one
cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at
shall be the value of the rice and corn land, as t he case may be, for the
purpose of determining its cost to the farmer and compensation to t he land
owner.

The above formula in equation form is :

Land Value (Average Gross Production [AGP] x 2.5

(LV) = Hectares x Government Support Price [GSP])

Using the foregoing formula, the land value of the subject property was
pegged at 3,915 cavans of palay, using 90 cavans of palay per year for the
irrigated portion and 44.33 cavans of palay per year for the unirrigated portio
n, as the AGP per hectare in San Joseph, Laur, Nueva Ecija, as established by
the Barangay Committee on Land Production (BCLP), based on three normal
crop years immediately preceding the promulgation of Presidential Decree
No. 27.12

As Santiago had died earlier on November 1, 1987,13 the LBP , in 1992,

reserved in trust for his heirs the amount of One Hundred Thirty-Five
Thousand Four Hundred Eighty-Two Pesos and 12/100 (P 135,482.12), as just
compensation computed by LBP and DAR using the above formula with P
35.00 as the GSP per cavan of palay for the year 1972 under Executive Order
No. 228.14
The land valuation of the subject property is broken down as follows15:

x Area
AGP x 2 and = LV in
Acquired x GSP = LV
cavans hectares Cavans
(hectare)

90 2.5 16.954416 3,814.74 P 35.00 P 133,515.92

44.33 2.5 506917 56.18 P 35.00 1,966.20

17.4613 3,870.92 P 35,482.12

This amount was released to Santiagos heirs on April 28, 1998,18 pursuant to
this Courts decision in Land Bank of the Philippines v. Court of Appeals.19
LBP, on May 21, 1998 and June 1, 1998, also paid the heirs the sum of P
353,122.62, representing the incremental interest of 6% on the preliminary
compensation, compounded annually for 22 years,20 pursuant to Provincial
Agrarian Reform Council (PARC) Resolution No. 94-24-121 and DAR
Administrative Order (AO) No. 13, series of 1994.22

However, on November 20, 1998, respondent, as a co-owner and

administrator of the subject property, filed a petition before the RTC of
Cabanatuan City, Branch 23, acting as a Special Agrarian Court (SAC Branch
23), for the "approval and appraisal of just compensation" due on the subject
property. This was docketed as SAC Case No. 125-AF.23

While respondent was in total agreement with the land valuation of the
subject property at 3,915 cavans of palay, he contended that the 1998 GSP
per cavan, which was P 400.00, should be used in the computation of the just
compensation for the subject property. Moreover, the incremental interest of
6% compounded annually, as per PARC Resolution No. 94-24-1, should be
imposed on the principal amount from 1972 to 1998 or for 26 years.24

On January 21, 2000, the SAC Branch 23 rendered its Decision, the
dispositive portion of which reads:

WHEREFORE, the defendant Land Bank of the Philippines is hereby ordered

to pay the plaintiff in the sum of P 1,039,017.88 representing the balance of
the land valuation of the plaintiff with legal interest at 12 % from the yea r
1998 until the same is fully paid subject to the modes of compensation under
R.A. No. 6657.25

The SAC Branch 23 arrived at its ruling, ratiocinating in this wise:

The defendant LBP arrived at this aforesaid amount by pegging the price at
the rate of P 35.00 per cavan, which was the government support price GSP
in 1972, pursuant to E.O. No. 228.

With the GSP of palay in 1992 being already P 300.00 per cavan x x x, it is
ver y clear, the n, that the respondent was denied the true, current actual
money equivalence of the land valuation of 3,915 cavans of palay mutually
agreed upon by the parties.

Aptly, plaintiff had been s hort-paid. x x x.

xxxx

The sum of P 135,482.12 as the money value o f 3,915 ca vans did not,
therefore, amount to "just compensation" to respondent since what was due
to him of 3,915 cavans was diluted when t he defendant LBP gave a money
value at the rate of P 35.00 per cavan, which was a far cry from the pre
vailing true and actual GSP o f P 300.00 per cavan in 1992 x x x.26

Discontented with the ruling, respondent filed a Motion for Reconsideration27

of the SACs decision on February 16, 2000, arguing that the GSP per cavan
of palay should be computed at P 400.00 instead of P 300.00 because
payment of the preliminary compensation was made by LBP in 1998 and not
in 1992. Respondent likewise ins isted that in addition to the 12% legal
interest ordered by the SAC, a compounded annual interest of 6% of the
principal amount should be awarded to them pursuant to the PARC
Resolution and DAR AO No. 13. Furthermore, respondent asked that the DAR
be ordered to return to him the unacquired portion of the subject property.28

On February 10, 2000, Judge Andres R. Amante, Jr., the presiding judge of
SAC Branch 23, inhibited himself from resolving the motion for
reconsideration,29 thus, the case was re-raffled to the RTC of Cabanatuan
City, Branch 29, acting as Special Agrarian Court (SAC Branch 29). 30

On January 28, 2004, the SAC Branch 29 issued a Resolution, with the
following fallo:
WHEREFORE, the decision is reconsidered as follows:

1. The defendant Land Bank of the Philippines is hereby ordered to pay the
petitioner the sum of P 1,039,017.88 representing the land valuation of the
petitioner with legal interest of six percent (6%) per annum beginning year
1998 until the same is fully paid subject to the modes of compensation under
Republic Act No. 6657.

2. The Land Bank of the Philippines is ordered to return to the petitioner the
unacquired area embraced and covered by TCT No. NT-60359 after
segregating the area taken by the DAR.31

In denying respondents claim over the 6% compounded annual interest, the

SAC Branch 29 explained that the purpose of the compounded interest was
to compensate the landowners for unearned interest, as their money would
have earned if they had been paid in 1972, when the GSP for a cavan of
palay was still at P 35.00. The SAC Branch 29 said that since a higher GSP
was already used in the computation of the subject propertys land value,
there was no more justification in adding any compounded interest to the
principal amount.32

The SAC Branch 29 also lowered the legal interest from 12% to 6% on the
ground that respondents claim cannot be considered as a forbearance of
money. Furthermore, since the government only acquired 17.4 hectares of
the subject property, it ordered LBP to return the unacquired portion to
respondent.33

Respondent filed a Petit io n for Review before this Court, questioning the
SAC Branch 29s ruling on his non-entitlement to the incremental interest of
6%. The case, entitled Heirs of Emiliano F. Santiago, represented by Emiliano
R. Santiago, Jr. as administrator of the land covered by TCT No. NT 60354 v.
Republic of the Philippines, represented by the Department of Agrarian
Reform, and Land Bank of the Philippines, and docketed as G.R. No. 162055,
was, however, denied by this Court on March 31, 2004, for lack of merit.34

Meanwhile, LBP filed a Petition for Review35 before the Court of Appeals,
questioning the just compensation fixed and the legal interest granted by the
SAC Branch 23 in its January 21, 2000 Decision and by the SAC Branch 29 in
its January 28, 2004 Resolution.
On September 28, 2007, the Court of Appeals, in CA-G.R. SP No. 82467,
affirmed the SAC Branch 23s Decision as modified by the SAC Branch 29s
Resolution. The dispositive portion of that Decision reads:

WHEREFORE, based on the fore going, the instant petition for review filed
pursuant to Section 60 of Republic Act No. 6657 is hereby DISMISSED.
ACCORDINGLY, the Decision dated January 21, 2000 of the Regional Trial
Court of Cabanatuan City, Branch 23, sitting as Special Agrarian Court, as
modified by the Resolution dated January 28, 2004 of the Regional Trial Court
of Cabanatuan City, Branch 29, is hereby AFFIRM ED.36

The Court of Appeals held that the formula in DAR AO No. 13 could no longer
be applied since the Provincial Agrarian Reform Ad judicator (PARAD) had
already been using a higher GSP. Since the formula could no longer be
applied, as a higher GSP was used in the computation of respondents just
compensation, the Court of Appeals ruled that he was no longer entitled to
the incremental interest of 6%.37

The LBP38 moved to reconsider the foregoing decis ion on October 25, 2007.
However, the Court of Appeals, find ing no new argument worthy of its
reconsideration, denied such motion in a Resolution dated March 14, 2008.

The LBP is now before us, claiming that its petition should be allowed for the
following reason:

THE COURT OF APPEALS COMMI TTED A S ERIOUS ERROR OF LAW IN

AFFIRMING THE JANUARY 21, 2000 DECISION OF THE REGIONAL TRIAL
COURT (RTC) OF CABANATUAN CITY, BR. 23, SITTING AS SPECIAL AGRARIAN
COURT (AS M ODIFI ED BY THE RESOLUTION DATED JANUARY 28, 2004 OF
THE RTC OF CABAN ATUAN CITY, BRANCH 29) WHICH FIXED THE JUST
COMPENSATION OF SUBJECT PROPERTIES ACQUIRED UNDER P.D. 27
WITHOUT OBS ERVING THE PRESCRI BED FORM ULA UNDER P.D. 27 AND E.O.
228.39

Issues

The following are the issues propounded by the LBP for this Courts
Resolution:
1. WHETHER OR NOT THE COURT OF APPEALS CAN DISREGARD THE
FORMULA PRESCRIBED UNDER P.D. 27 AND E.O. 228 IN FIXING THE JUST
COMPENSATION OF SUBJECT P.D. 27-ACQUIRED LAN D.

2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THE

GRAN T BY THE COURT A QUO O F 6% INTERES T TO THE RESPONDENT. 40

1st Issue
Computation of Just Compensation

LBP has been consistent in its position that the formula prescribed in
Presidential Decree No. 27 and Executive Order No. 228 is the only formula
that should be applied in the computation of the valuation of lands acquired
under Presidential Decree No. 27. In support of its position, LBP cites this
Courts ruling in Gabatin v. Land Bank of the Philippines,41 wherein we held
that the GSP should be pegged at the time of the taking of the properties,
which in this case was deemed effected on October 21, 1972, the effectivity
date of Presidential Decree No. 27.

This Court notes that even before respondent filed a petition for the judicial
determination of the just compensation due him for the subject property
before the SAC Branch 23 on November 20, 1998, Republic Act No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1988,
already took effect on June 15, 1988.

The determination of the just compensation therefore in this case depends

on the valuation formula to be applied: the formula under Presidential Decree
No. 27 and Executive Order No. 228 or the formula under Republic Act No.
6657? This Court finds the case of Meneses v. Secretary of Agrarian Reform 42
applicable insofar as it has determined what formula should be used in
computing the just compensation for property expropriated under
Presidential Decree No. 27 under the factual milieu of this case, viz:

Respondent correctly cited the case of Gabatin v. Land Bank of the

Philippines, where the Court ruled that "incomputing the just compensation
for expropriation proceedings, it is the value of the land at the time of the
taking or October 21, 1972, the effectivity date of P.D. No. 27, not at the time
of the rendition of judgment, which should be take n into consideration. "
Under P.D. No. 27 and E.O. No. 228, the following formula is used to compute
the land value for palay:
 LV (land value) = 2.5 x AGP x GSP x (1.06)n

It should also be pointed out, however, that in the more recent case of Land
Bank of the Philippines vs. Natividad, the Court categorically ruled: "the
seizure of the landholding did not take place on the date of effectivity of P.D.
No. 27 but would take effect on the payment of just compensation." Under
Section 17 of R.A. No. 6657, the following factors are considered in de
termining just compensation, to wit:

Sec. 17. Determination of Just Compensation. - In determining just

compensation, the cost of acquisition of the land, the current value of like
properties , its nature, actual use and income, the sworn valuation by the
owner, the tax de clarations , and the assessment made by government
assessors shall be considered. The social and economic benefits contributed
by the farmers and the farm-workers and by the Government to the property
as well as the non-payment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional factors
to determine its valuation.

Consequently, the question that arises is which o f these two rulings should
be applied?

Under the circumstances of this case, the Court deems it more equitable to
apply the ruling in the Natividad case. In said case, the Court applied the
provisions of R.A. No. 6657 in computing just compensation for property
expropriated under P.D. No. 27, stating, viz:

Land Bank's contention that the property was acquired for purposes of
agrarian reform on October 21, 1972, the time of the effectivity of PD 27,
ergo just compensation should be based on the value of the property as of
that time and not at the time of possession in 1993, is like wise erroneous. In
Office of the President, Malacaang, Manila v. Court of Appeals, we ruled that
the seizure of the land holding did not take place on the date of effectivity of
PD 27 but would take effect on the payment of just compensation.

Under the factual circumstances of this case, the agrarian reform process is
still incomplete as the just compensation to be paid private respondents has
yet to be settled. Considering the pass age of Republic Act No. 6657 (RA
6657) before the completion of this process, the just compensation should be
determined and the process concluded under the said law. Indeed, RA 6657
is the applicable law, with PD 27 and EO 228 having only suppletory effect,
conformably with our ruling in Paris v. Alfeche.

xxxx

It would certainly be inequitable to determine just compensation based on

the guideline provided by PD 27 and EO 228 considering the DAR's failure to
determine the just compensation for a considerable length of time. That just
compensation should be determined in accordance with RA 6657, and not PD
27 or EO 228, is especially imperative considering that just compensation
should be the full and fair equivalent of the property taken from its owner by
the expropriator, the equivalent being real, substantial, full and ample.43
(Emphases supplied, citations omitted.)

The ruling in Land Bank of the Philippines v. Natividad44 was likewise applied
in Land Bank of the Philippines v. Heirs of Angel T. Domingo,45 when the
landowner Domingo filed a Petition for the Determination and Payment of
Just Compensation despite his receipt of LBPs partial payment. This Court
held that since the amount of just compensation to be paid Domingo had yet
to be settled, then the agrarian reform process was still incomplete; thus, it
should be completed under Republic Ac t No. 6657.

Based on the foregoing, when the agrarian reform process is still incomplete
as the just compensation due the landowner has yet to be settled, such just
compensation should be determined and the process concluded under
Republic Act No. 6657.46

Elucidating on this pronouncement, this Court, in Land Bank of the

Philippines v. Puyat,47 held

In the case at bar, respondents title to the property was cancelled and
awarded to farmer-beneficiaries on March 20, 1990. In 1992, Land Bank
approved the initial valuation for the just compensation that will be given to
respondents. Both the taking of respondents property and the valuation
occurred during the effectivity of RA 6657. When t he acquisition process
under PD 27 remains incomplete and is overtaken by RA 6657, the process
should be completed under RA 6657, with PD 27 and EO 228 having
suppletory effect only. This means that PD 27 applies only insofar as there
are gaps in RA 6657; where RA 6657 is sufficient, PD 27 is superseded.
Among the matters where RA 6657 is sufficient is the determination of just
compensation. In Section 17 thereof, the legislature has provided for the
factors that are determinative of just compensation. Petitioner cannot insist
on applying PD 27 which would render Section 17 of RA 6657 inutile.
( Emphases ours, citation omitted.)

Similarly, in the case before us, the emancipation patents were issued to the
farmer-beneficiaries from 1992 to 1994. While the preliminary compensation
of P 135,482.12 was reserved in trust at LBP for the heirs of Santiago in
1992, this amount was not received by the heirs until 1998, as its release,
pending the final determination of the land valuation, became the subject of
a petition in this Court in Land Bank of the Philippines v. Court of Appeals.48
Like in the case cited above, both the taking and the valuation of the subject
property occurred after Republic Ac t No. 6657 had already become effective.
Until now, the issue of just compensation for the subject property has not
been settled and the process has yet to be completed; thus, the provisions of
Republic Act No. 6657 shall apply.

Section 17 of Republic Ac t No. 6657 or the Comprehensive Agrarian Reform

Law of 1988 provides:

SEC. 17. Determination of Just compensation. - In determining just

compensation, the cost of acquisition of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits contributed
by the farmers and the farm workers and by the Government to the property
as well as the non-payment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional factors
to determine its valuation.

This Court is not unaware of the new agrarian reform law, Republic Act No.
9700 or the CARPER Law, entitled "An Act Strengthening the Comprehensive
Agrarian Reform Program (CARP), Extending the Acquisition and Distribution
of all Agricultural Lands, Instituting Necessary Reforms, Amending for the
Purpose Certain Provisions of Republic Act No. 6657, Otherwise Known as the
Comprehensive Agrarian Reform Law of 1988, as amended, and
Appropriating Funds Therefor," passed by the Congress on July 1, 2009,49
further amending Republic Act No. 6657, as amended.

That this case, despite the new law, still falls under Section 17 of Republic Ac
t No. 6657 is supported even by Republic Act No. 9700, which states that
"previously acquired lands wherein valuation is subject to challenge shall be
completed and resolved pursuant to Section 17 of Republic Act No. 6657, as
amended," viz:

Section 5. Section 7 of Republic Act No. 6657, as amended, is hereby further

amended to read as follows:

SEC. 7. Priorities. - The DAR, in coordination with the Presidential Agrarian

Reform Council (P ARC) shall plan and pro ram the final acquisition and
distribution of all remaining unacquired and undistributed agricultural lands
from the effectivity o f this Ac t until June 30, 2014. Lands shall be acquired
and distributed as follows:

Phase One : During t he five (5)-year extension period hereafter all remaining
lands above fifty (50) hectares shall be covered for purposes of agrarian
reform upon the effectivity of this Act. All private agricultural lands of
landowners with aggregate land holdings in excess of fifty (50) hectares
which have already been subjected to a notice of coverage issued on or
before December 10, 2008; rice and corn lands under Presidential Decree No.
27; all idle or abandoned lands; all private lands voluntarily offered by the
owners for agrarian reform: x x x Provided, furthermore, That al l previously
acquired lands where in valuation is subject to challenge by landowners s
hall be completed and finally resolved pursuant to Section 17 of Republic Act
No. 6657, as amended: x x x. (Emphases supplied.)

Section 7 of Republic Act No. 9700, further amending Section 17 of Republic

Ac t No. 6657, as amended, reads:

Section 7. Section 17 of Republic Act No. 6657, as amended, is hereby

further amended to read as follows:

SEC. 17. Determination of Just Compensation. In determining just

compensation, the cost of acquisition of the land, the value of the standing
crop, the current value of like properties, its nature, actual use and income,
the sworn valuation by the owner, the tax declarations, the assessment
made by government assessors, and seventy percent (70%) of t he zonal
valuation of the Bureau of Internal Revenue (BIR), translated into a basic
formula by t he DAR shall be considered, subject to the final decision of the
proper court. The social and economic benefits contributed by the farmers
and the farm workers and by the Government to the property as well as the
nonpayment of taxes or loans secured from any government financing
institution on the said land shall be considered as additional factors to
determine its valuation. (Emphases supplied; further amendments made to
Section 17 of R.A. N o. 6657, as amended, are italicized.)

The foregoing shows that the Section 17 referred to in Section 5 of Republic

Act No. 9700 is the old Section 17 under Republic Act No. 6657, as amended;
that is, prior to further amendment by Republic Ac t No. 9700.

A reading of the provisions of Republic Ac t No. 9700 will readily show that
the old provisions, under Republic Act No. 6657, are referred to as Sections
under "Republic Act No. 6657, as amended," as distinguished from "further
amendments" under Republic Act No. 9700.

DAR AO No. 02-09, the Implementing Rules of Republic Act No. 9700, which
DAR formulated pursuant to Section 3150 of Republic Act No. 9700, makes the
above distinction even clearer, to wit:

VI. Transitory Provision

With respect to cases where the Master List of ARBs has been finalized on or
before July 1, 2009 pursuant to Administrative Order No. 7, Series of 2003,
the acquisition and distribution of landholdings shall continue to be
processed under the provisions of R.A. No. 6657 prior to its amendment by
R.A. No. 9700.

However, with respect to land valuation, all Claim Folders received by LBP
prior to July 1, 2009 shall be valued in accordance with Section 17 of R.A. No.
6657 prior to its amendment by R.A. No. 9700. (Emphasis supplied.)

Thus, DAR AO No. 02-09 authorizes the valuation of lands in accordance with
the old Section 17 of Republic Act No. 6657, as amended (prior to further
amendment by Republic Act No. 9700), so long as the claim folders for such
lands have been received by LBP before its amendment by Republic Act No.
9700 in 2009.51

2nd Issue
Imposition of 6% Legal Interest

All the courts a quo imposed a legal interest on the just compensation due
respondent, albeit the SAC Branch 29 lowered it from 12% to 6% per annum.
LBP argues that DARAO No. 13, which provides for an incremental interest of
6%, compounded annually, should be the governing rule when it comes to
the grant of interest.52

Respondent on the other hand, prays that the original award of 12% interest
be reinstated as the unreasonable delay in the payment of his just
compensation constitutes forbearance of money.53

This Court notes that the award of 6% legal interest was not given under DAR
AO No. 13, as the courts a quo explicitly stated that DARAO No. 13 was not
applicable, albeit citing a n incorrect reason, i.e., that this was because a
higher GSP was already used. As we have discussed above, "the law and
jurisprudence on the determination of just compensation of agrarian lands
are settled,"54 and the courts below deviated from them when they simply
used a higher GSP in the computation of respondents just
compensation.1wphi1

The Court has allowed the grant of interest in expropriation cases where
there is delay in the payment of just compensation.55 In fact, the interest
imposed in case of delay in payments in agrarian cases is 12% per annum
and not 6%56 as "the imposition x x x is in the nature of damages for delay in
payment which in effect makes the obligation on the part of the government
one of forbearance."57

Quoting Republic v. Court of Appeals58 this Court, in Land Bank of the

Philippines v. Rivera,59 held :

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, if 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 interest on its jus t 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.
The Bulacan trial court, in its 1979 decision, was correct in imposing interest
on the zonal value of the property to be computed from the time petitioner
instituted condemnation proceedings and "took" the property in September
1969. 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. 60
(Citation omitted, emphasis in the original.)

The Court, in Republic, recognized that "the just compensation due to the
landowners for their expropriated property amounted to an effective
forbearance on the part of the State."61 In fixing the interest rate at 12%, it
followed the guidelines on the award of interest that we enumerated in
Eastern Shipping Lines, In c. v. Court of Appeals,62 to wit:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-

contracts, delicts or quasi-delicts is breached, the contravenor can be held
liable for damages. The provisions under Title XVIII on "Damages" o f the
Civil Code govern in determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual

and compensatory damages, the rate of interest, as well as the accrual
thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum

of money, i.e., a loan or forbearance of money, the interest due should be
that which may have been stipulated in writing. Fur t her more, the interest
due shall itself earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 12% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is

breached, an interest on the amount of damages awarded may be imposed
at t he discretion of the court at the rate of 6% per annum. N o interest,
however, shall be adjudged on unliquidated claims or damages except when
or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made judicially or extra
judicially (Art. 1169, Civil Code) but when such certainty cannot be so
reasonably established at the time the demand is made, the interest shall
begin to run only from the d ate the judgment o f the court is made (at which
time the quantification of damages ma y be deemed to have been
reasonably ascertained). The actual base for the computation of legal
interest shall, in any case, be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final
and executory, the rate of legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 12% per annum from such
finality until its satisfaction, this interim period being deemed to be by then
an equivalent to a forbearance of credit.63 (Citations omitted.)

This Court therefore deems it proper to impose a 12% legal interest per
annum, computed from the date of the "taking" of the subject property on
the just compensation to be determined by the SAC, due to respondent, less
whatever he and his co-owners had already received.

Rem and of the Case

Given that the only factor considered by the SAC in the determination of just
compensation was the changing government support price for a cavan of
palay, this Court is constrained to remand the case to the SAC Branch 29 for
the reception of evidence and determination of just compensation in
accordance with Section 17 of Republic Act No. 665764 and DAR AO No. 02-09
dated October 15, 2009, the latest DAR issuance on fixing just
compensation.65

Guidelines in the Remand of the Case

In Land Bank of the Philippines v. Heirs of Salvador Encinas and Jacoba

Delgado,66 we said that "the taking of private lands under the agrarian
reform program partakes of the nature of an expropriation proceeding." Thus,
the SAC is "reminded to adhere strictly to the doctrine that just
compensation must be valued at the time of taking"67 and not at the time of
the rendition of judgment.68

In the same case, this Court also required the trial court to consider the
following factors as enumerated in Section 17 of Republic Ac t No. 6657, as
amended :

(1) the acquisition cost of the land ; (2) the current value of the properties;
(3) its nature, actual use, and income ; (4) the sworn valuation by the owner;
(5) the tax declarations ; (6) the assessment made by government assessors;
(7) the social and economic benefits contributed by the farmers and the
farmworkers, and by the government to the property; and (8) the non-
payment of taxes or loans secured from any government financing institution
on the said land, if any.69

It is stressed that the foregoing factors, and the formula as translated by the
DAR in its implementing rules, are mandatory and not mere guides that the
SAC may disregard.70 This Court has held:

While the de termination o f just compensation is essentially a judicial

function vested in the RTC acting as a SAC, the judge cannot abuse his
discretion by not taking into full consideration the factors specifically
identified by law and implementing rules. SACs are not at liberty to disregard
the formula laid down by the DAR, because unless an administrative order is
declared invalid, courts have no option but to apply it. The SAC cannot
ignore, without violating the agrarian law, the formula provided by the DAR
for the determination of just compensation.71 (Emphasis in the original,
citation omitted.)

WHEREFORE, premises considered, the petition is DENIED insofar as it

seeks to have the Land Bank of the Philippines valuation of the subject
property sustained. The assailed September 28, 2007 Decision and March 14,
2008 Resolution of the Court of Appeals in CA-G.R. SP No. 82467 are
REVERSED and SET ASIDE for lack of factual and legal basis. Agrarian
Case No. 125-AF is REMANDED back to the Regional Trial Court of
Cabanatuan City, Branch 29, to determine the just compensation due
Emiliano R. Santiago, Jr., less whatever payments he and his co-owners had
received, strictly in accordance with the guidelines in this Decision; Section
17 of Republic Act No. 6657, as amended; and Department of Agrarian
Reform Administrative Order No. 02-09 dated October 15, 2009.

SO ORDERED.