Republic v PLDT

FACTS: The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers
through its branches and instrumentalities, one of which is the Bureau of Telecommunications. That
office was created on 1 July 1947, under Executive Order No. 94.

The defendant, Philippine Long Distance Telephone Company (PLDT), is a public service corporation
holding a legislative franchise, to install, operate and maintain a telephone system throughout the
Philippines and to carry on the business of electrical transmission of messages within the Philippines and
between the Philippines and the telephone systems of other countries. The RCA Communications, Inc.,
is an American corporation authorized to transact business in the Philippines. Sometime in 1933, the
defendant, PLDT, and the RCA Communications, Inc., entered into an agreement whereby telephone
messages, coming from the United States and received by RCA's domestic station, could automatically
be transferred to the lines of PLDT; and vice-versa.

Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government
Telephone System by utilizing its own appropriation and equipment and by renting trunk lines of the
PLDT to enable government offices to call private parties. The Bureau has extended its services to the
general public since 1948, using the same trunk lines owned by, and rented from, the PLDT.

The plaintiff, through the Director of Telecommunications, entered into an agreement with RCA
Communications, Inc., for a joint overseas telephone service whereby the Bureau would convey radio-
telephone overseas calls received by RCA's station to and from local residents.

PLDT complained to the Bureau of Telecommunications that said bureau was violating the conditions
under which their Private Branch Exchange (PBX) is inter-connected with the PLDT's facilities, referring
to the rented trunk lines, for the Bureau had used the trunk lines not only for the use of government
offices but even to serve private persons or the general public, in competition with the business of the
PLDT; and gave notice that if said violations were not stopped by midnight of 12 April 1958, the PLDT
would sever the telephone connections. When the PLDT received no reply, it disconnected the trunk
lines being rented by the Bureau.

The plaintiff Republic commenced suit against the defendant, PLDT praying in its complaint for judgment
commanding the PLDT to execute a contract with plaintiff, through the Bureau, for the use of the
facilities of defendant's telephone system throughout the Philippines under such terms and conditions
as the court might consider reasonable.

After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an
agreement with the Bureau because the parties were not in agreement;

The Republic complains of the action of the trial court in dismissing the part of its complaint seeking to
compel the defendant to enter into an interconnecting contract with it, because the parties could not
agree on the terms and conditions of the interconnection, and of its refusal to fix the terms and
conditions therefor.

ISSUE: Whether or not the Republic has grounds to cause the interconnection with PLDT.

HELD: Yes. Although a party cannot be coerced to enter into a contract where no agreement is had
between them as to the principal terms and conditions of the contract, the Republic may, in the exercise
of the sovereign power of eminent domain, require the telephone company to permit interconnection
of the government telephone system and that of the PLDT, as the needs of the government service may
require, subject to the payment of just compensation to be determined by the court.

Nominally, of course, the power of eminent domain results in the taking or appropriation of title to,
and possession of, the expropriated property; but no cogent reason appears why the said power may
not be availed of to impose only a burden upon the owner of condemned property, without loss of
title and possession. It is unquestionable that real property may, through expropriation, be subjected
to an easement of right of way.

The use of the PLDT's lines and services to allow inter-service connection between both telephone
systems is not much different. In either case private property is subjected to a burden for public use and
benefit. If, under section 6, Article XIII, of the Constitution, the State may, in the interest of national
welfare, transfer utilities to public ownership upon payment of just compensation, there is no reason
why the State may not require a public utility to render services in the general interest, provided just
compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service would be the
users of both telephone systems, so that the condemnation would be for public use.

WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in so far
as it dismisses the petition of the Republic of the Philippines to compel the Philippine Long Distance
Telephone Company to continue servicing the Government telephone system upon such terms, and for
a compensation, that the trial court may determine to be just, including the period elapsed from the
filing of the original complaint or petition. And for this purpose, the records are ordered returned to the
court of origin for further hearings and other proceedings not inconsistent with this opinion.

Jesus is Lord Christian School v. Municipality of Pasig

FACTS: The Municipality of Pasig needed an access road from E. R. Santos Street, a municipal road near
the Pasig Public Market, to Barangay Sto. Tomas Bukid, Pasig, where 60 to 70 houses, mostly made of
light materials, were located. The municipality then decided to acquire 51 square meters out of the
1,791-square meter property of the Ching Cuancos which is abutting E. R. Santos Street.

The Sangguniang Bayan of Pasig approved an Ordinance authorizing the municipal mayor to initiate
expropriation proceedings to acquire the said property and appropriate the fund therefor.

On July 21, 1993, the municipality filed a complaint against the Ching Cuancos for the expropriation of
the property under the Local Government Code. The plaintiff alleged therein that it notified the
defendants, by letter, of its intention to construct an access road on a portion of the property but they
refused to sell the same portion. The plaintiff appended to the complaint a photocopy of the letter
addressed to defendant Lorenzo Ching Cuanco.

The plaintiff deposited with the RTC 15% of the market value of the property based on the latest tax
declaration covering the property.

In their answer, the defendants claimed that, as early as February 1993, they had sold the said property
to JILCSFI as evidenced by a deed of sale bearing the signature of defendant Ernesto Ching Cuanco Kho
and his wife.
During trial, Rolando Togonon, the plaintiffs messenger, testified on direct examination he served a
letter of Engr. Jose Reyes, the Technical Assistant to the Mayor on Infrastructure, to Lorenzo Ching
Cuanco at his store in Pasig. A lady received the same and brought it inside the store. When she
returned the letter to him, it already bore the signature of Luz Bernarte. He identified a photocopy of
the letter as similar to the one he served at the store. On cross-examination, he admitted that he never
met Luz Bernarte.

The plaintiff offered in evidence a photocopy of the letter of Engr. Jose Reyes addressed to Lorenzo
Ching Cuanco to prove that the plaintiff made a definite and valid offer to acquire the property to the
co-owners. However, the RTC rejected the same letter for being a mere photocopy.

The RTC issued an Order in favor of the plaintiff, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing and in accordance with Section 4, Rule 67 of the Revised Rules of
Court, the Court Resolves to DECLARE the plaintiff as having a lawful right to take the property in
question for purposes for which the same is expropriated.

The RTC held that, as gleaned from the declaration in Ordinance No. 21, there was substantial
compliance with the definite and valid offer requirement and that the expropriated portion is the most
convenient access to the interior of Sto. Tomas Bukid.

The CA affirmed the order of the RTC. The CA agreed with the trial court that the plaintiff substantially
complied with the requirement that a valid and definite offer must be made to the owner. The CA
declared that the letter of Engr. Reyes, inviting Lorenzo Ching Cuanco to a conference to discuss with
him the road project and the price of the lot, was a substantial compliance with the valid and definite
offer requirement. In addition, the CA noted that there was also constructive notice to the defendants
of the expropriation proceedings since a notice of lis pendens was annotated at the dorsal portion of of
the TCT.

The petitioner stresses that the law explicitly requires that a valid and definite offer be made to the
owner of the property and that such offer was not accepted. It argues that, in this case, there was no
evidence to show that such offer has been made either to the previous owner or the petitioner, the
present owner. The petitioner contends that the photocopy of the letter of Engr. Reyes, notifying
Lorenzo Ching Cuanco of the respondents intention to construct a road on its property, cannot be
considered because the trial court did not admit it in evidence. And assuming that such letter is
admissible in evidence, it would not prove that the offer has been made to the previous owner because
mere notice of intent to purchase is not equivalent to an offer to purchase. The petitioner further argues
that the offer should be made to the proper party, that is, to the owner of the property. It noted that
the records in this case show that as of February 1993, it was already the owner of the property.
Assuming, therefore, that there was an offer to purchase the property, the same should have been
addressed to the petitioner, as present owner.[34]

The petitioner maintains that the power of eminent domain must be strictly construed since its exercise
is necessarily in derogation of the right to property ownership. All the requirements of the enabling law
must, therefore, be strictly complied with.
ISSUE: Whether or not the respondent complied with the requirement, under Section 19 of the Local
Government Code, of a valid and definite offer to acquire the property prior to the filing of the
complaint.

HELD: No. The petition is meritorious.

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.It is one of the harshest proceedings known to the law.
Consequently, when the sovereign delegates the power to a political unit or agency, a strict
construction will be given against the agency asserting the power. The authority to condemn is to be
strictly construed in favor of the owner and against the condemnor. When the power is granted, the
extent to which it may be exercised is limited to the express terms or clear implication of the statute
in which the grant is contained.

Corollarily, the respondent, which is the condemnor, has the burden of proving all the essentials
necessary to show the right of condemnation.[46] It has the burden of proof to establish that it has
complied with all the requirements provided by law for the valid exercise of the power of eminent
domain.

The Court declared that the following requisites for the valid exercise of the power of eminent domain
by a local government unit must be complied with:

1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf
of the local government unit, to exercise the power of eminent domain or pursue expropriation
proceedings over a particular private property.

2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the
poor and the landless.

3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and
other pertinent laws.

4. A valid and definite offer has been previously made to the owner of the property sought to be
expropriated, but said offer was not accepted.[47]

Valid and Definite Offer

The respondent was burdened to prove the mandatory requirement of a valid and definite offer to the
owner of the property before filing its complaint and the rejection thereof by the latter.[48] It is
incumbent upon the condemnor to exhaust all reasonable efforts to obtain the land it desires by
agreement.[49] Failure to prove compliance with the mandatory requirement will result in the dismissal
of the complaint.[50]

The purpose of the requirement of a valid and definite offer to be first made to the owner is to
encourage settlements and voluntary acquisition of property needed for public purposes in order to
avoid the expense and delay of a court action.
In the present case, the respondent failed to prove that before it filed its complaint, it made a written
definite and valid offer to acquire the property for public use as an access road. The only evidence
adduced by the respondent to prove its compliance with Section 19 of the Local Government Code is the
photocopy of the letter purportedly bearing the signature of Engr. Jose Reyes, to only one of the co-
owners, Lorenzo Ching Cuanco. The letter reads:

Dear Mr. Cuanco:

This refers to your parcel of land located along E. Santos Street, Barangay Palatiw, Pasig, Metro Manila
embraced in and covered by TCT No. 66585, a portion of which with an area of fifty-one (51) square
meters is needed by the Municipal Government of Pasig for conversion into a road-right of way for the
benefit of several residents living in the vicinity of your property. Attached herewith is the sketch plan
for your information.

In this connection, may we respectfully request your presence in our office to discuss this project and
the price that may be mutually agreed upon by you and the Municipality of Pasig.

Thank you.

It bears stressing, however, that the respondent offered the letter only to prove its desire or intent to
acquire the property for a right-of-way.[60] The document was not offered to prove that the respondent
made a definite and valid offer to acquire the property. Moreover, the RTC rejected the document
because the respondent failed to adduce in evidence the original copy thereof.[61] The respondent,
likewise, failed to adduce evidence that copies of the letter were sent to and received by all the co-
owners of the property, namely, Lorenzo Ching Cuanco, Victor Ching Cuanco and Ernesto Kho.

The respondent sought to prove, through the testimony of its messenger, Rolando Togonon, that
Lorenzo Ching Cuanco received the original of the said letter. But Togonon testified that he merely gave
the letter to a lady, whom he failed to identify.

Even if the letter was, indeed, received by the co-owners, the letter is not a valid and definite offer to
purchase a specific portion of the property for a price certain. It is merely an invitation for only one of
the co-owners, Lorenzo Ching Cuanco, to a conference to discuss the project and the price that may be
mutually acceptable to both parties.

There is no legal and factual basis to the CAs ruling that the annotation of a notice of lis pendens at the
dorsal portion of petitioners TCT No. PT-92579 is a substantial compliance with the requisite offer. A
notice of lis pendens is a notice to the whole world of the pendency of an action involving the title to or
possession of real property and a warning that those who acquire an interest in the property do so at
their own risk and that they gamble on the result of the litigation over it.[63] Moreover, the lis pendens
was annotated at the dorsal portion of the title only on November 26, 1993, long after the complaint
had been filed in the RTC against the Ching Cuancos.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision and Resolution of the Court of
Appeals are REVERSED AND SET ASIDE. The RTC is ordered to dismiss the complaint of the respondent
without prejudice to the refiling thereof.
Bardillion v Barangay Masili of Calamba Laguna

FACTS: At the root of this present [P]etition is the controversy surrounding the two (2) [C]omplaints for
eminent domain which were filed by herein respondent for the purpose of expropriating a (144) square
meter-parcel of land, situated in Barangay Masili, Calamba, Laguna and owned by herein petitioner.

The first [C]omplaint for eminent domain was filed before the Municipal Trial Court of Calamba, Laguna
following the failure of Barangay Masili to reach an agreement with herein petitioner on the purchase
offer of TWO HUNDRED THOUSAND PESOS (P200,000.00). The expropriation of the Lot was being
pursued in view of providing Barangay Masili a multi-purpose hall for the use and benefit of its
constituents. The MTC issued an order dismissing the Civil Case for lack of interest for failure of the
[respondent] and its counsel to appear at the pre-trial.

The second [C]omplaint for eminent domain was filed before Branch 37 of the Regional Trial Court of
Calamba, Laguna (RTC) on October 18, 1999. This [C]omplaint also sought the expropriation of the said
Lot D for the erection of a multi-purpose hall of Barangay Masili, but petitioner, by way of a Motion to
Dismiss, opposed this [C]omplaint by alleging in the main that it violated Section 19(f) of Rule 16 in that
[respondents] cause of action is barred by prior judgment, pursuant to the doctrine of res judicata.

[the] Judge issued an order denying petitioners Motion to Dismiss, holding that the MTC which ordered
the dismissal of Civil Case No. 3648 has no jurisdiction over the said expropriation proceeding.

With the subsequent approval of Municipal Ordinance No. 2000-261, the assailed Order dated August 4,
2000 was issued in favor of Barangay Masili x x x and, on August 16, 2000, the corresponding order for
the issuance of the [W]rit of [P]ossession over the Lot.

In dismissing the Petition, the CA held that the Regional Trial Court (RTC) of Calamba, Laguna did not
commit grave abuse of discretion in issuing the assailed Orders. It ruled that the second Complaint for
eminent domain was not barred by res judicata. The reason is that the Municipal Trial Court (MTC),
which dismissed the first Complaint for eminent had no jurisdiction over the action.

ISSUE: Whether the MTC had jurisdiction over the expropriation case; Whether the CA erred when it
ignored the issue of entry upon the premises;

HELD: No. The Petition has no merit.

Petitioner claims that, since the value of the land is only P11,448, the MTC had jurisdiction over the
case. On the other hand, the appellate court held that the assessed value of the property was P28,960.
Thus, the MTC did not have jurisdiction over the expropriation proceedings, because the amount
involved was beyond the P20,000 jurisdictional amount cognizable by MTCs.

An expropriation suit does not involve the recovery of a sum of money. Rather, it deals with the exercise
by the government of its authority and right to take property for public use. As such, it is incapable of
pecuniary estimation and should be filed with the regional trial courts.

It should be stressed that the primary consideration in an expropriation suit is whether the government
or any of its instrumentalities has complied with the requisites for the taking of private property. Hence,
the courts determine the authority of the government entity, the necessity of the expropriation, and the
observance of due process. In the main, the subject of an expropriation suit is the governments exercise
of eminent domain, a matter that is incapable of pecuniary estimation.

Petitioner argues that the CA erred when it ignored the RTCs Writ of Possession over her property,
issued despite the pending Motion for Reconsideration of the ruling dismissing the Complaint. We are
not persuaded.

The requirements for the issuance of a writ of possession in an expropriation case are expressly and
specifically governed by Section 2 of Rule 67 of the 1997 Rules of Civil Procedure.[18] On the part of
local government units, expropriation is also governed by Section 19 of the Local Government Code.[19]
Accordingly, in expropriation proceedings, the requisites for authorizing immediate entry are as follows:
(1) the filing of a complaint for expropriation sufficient in form and substance; and (2) the deposit of the
amount equivalent to 15 percent of the fair market value of the property to be expropriated based on
its current tax declaration.

In the instant case, the issuance of the Writ of Possession in favor of respondent after it had filed the
Complaint for expropriation and deposited the amount required was proper, because it had complied
with the foregoing requisites.

The issue of the necessity of the expropriation is a matter properly addressed to the RTC in the course
of the expropriation proceedings. If petitioner objects to the necessity of the takeover of her
property, she should say so in her Answer to the Complaint. The RTC has the power to inquire into the
legality of the exercise of the right of eminent domain and to determine whether there is a genuine
necessity for it.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.

Republic v Castelvi

FACTS: Plaintiff-appellant, the Republic of the Philippines, filed, on June 26, 1959, a complaint for
eminent domain against defendant-appellee, Carmen M. Vda. de Castellvi, judicial administratrix of the
estate of the late Alfonso de Castellvi over a parcel of land situated in the barrio of San Jose,
Floridablanca, Pampanga and against defendant-appellee Maria Nieves Toledo over two parcels of land.

In its complaint, the Republic alleged, among other things, that the fair market value of the above-
mentioned lands, according to the Committee on Appraisal for the Province of Pampanga, was not more
than P2,000 per hectare, or a total market value of P259,669.10; and prayed, that the provisional value
of the lands be fixed at P259.669.10; that the court appoints three commissioners to ascertain and
report to the court the just compensation for the property sought to be expropriated, and that the court
issues thereafter a final order of condemnation.

The trial court issued an order fixing the provisional value of the lands at P259,669.10.

In her "motion to dismiss", Castellvi alleged, among other things, that the land under her administration,
being a residential land, had a fair market value of P15.00 per square meter, so it had a total market
value of P11,389,485.00; that the Republic, through the Armed Forces of the Philippines, particularly the
Philippine Air Force, had been, despite repeated demands, illegally occupying her property thereby
preventing her from using and disposing of it, thus causing her damages by way of unrealized profits.
This defendant prayed that the complaint be dismissed, or that the Republic be ordered to pay her a
total of P11,389,485.00; that the Republic be ordered to pay her P5,000,000.00 as unrealized profits,
and the costs of the suit.

After the Republic had deposited with the Provincial Treasurer of Pampanga the amount of P259,669.10,
the trial court ordered that the Republic be placed in possession of the lands. The Republic was actually
placed in possession of the lands on August 10, 1959.1

In her "motion to dismiss", Toledo-Gozun alleged, among other things, that her two parcels of land were
residential lands so they had a total market value of P8,085,675.00; and she prayed that the complaint
be dismissed.

The trial Court appointed three commissioners. The Commissioners submitted their report and
recommendation, wherein, after having determined that the lands sought to be expropriated were
residential lands, they recommended unanimously that the lowest price that should be paid was P10.00
per square meter, for both the lands of Castellvi and Toledo-Gozun;

The trial court, on May 26, 1961, rendered its decision6 the dispositive portion of which reads as follows:

WHEREFORE, taking into account all the foregoing circumstances, and that the lands are titled, ... the
rising trend of land values ..., and the lowered purchasing power of the Philippine peso, the court finds
that the unanimous recommendation of the commissioners of ten (P10.00) pesos per square meter for
the three lots of the defendants subject of this action is fair and just.

In respect to the defendant Castellvi, interest at 6% per annum will also be paid by the plaintiff to
defendant Castellvi from July 1, 1956 when plaintiff commenced its illegal possession of the Castellvi
land when the instant action had not yet been commenced to July 10, 1959 when the provisional value
thereof was actually deposited in court, on the total value of the said (Castellvi) land as herein adjudged.

Before this Court, the Republic contends that the lower court erred:

1. In finding the price of P10 per square meter of the lands subject of the instant proceedings as just
compensation;

2. In holding that the "taking" of the properties under expropriation commenced with the filing of this
action;

HELD: In support of the assigned error that the lower court erred in holding that the "taking" of the
properties under expropriation commenced with the filing of the complaint in this case, the Republic
argues that the "taking" should be reckoned from the year 1947 when by virtue of a special lease
agreement between the Republic and appellee Castellvi, the former was granted the "right and
privilege" to buy the property should the lessor wish to terminate the lease, and that in the event of
such sale, it was stipulated that the fair market value should be as of the time of occupancy;

Appellee Castellvi, on the other hand, maintains that the "taking" of property under the power of
eminent domain requires two essential elements, to wit: (1) entrance and occupation by condemn or
upon the private property for more than a momentary or limited period, and (2) devoting it to a public
use in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property. This
appellee argues that in the instant case the first element is wanting, for the contract of lease relied upon
provides for a lease from year to year; that the second element is also wanting, because the Republic
was paying the lessor Castellvi a monthly rental of P445.58; and that the contract of lease does not grant
the Republic the "right and privilege" to buy the premises "at the value at the time of occupancy."8

Defendant Castellvi then brought suit in the Court of First Instance of Pampanga to eject the Philippine
Air Force from the land. While this ejectment case was pending, the Republic instituted these
expropriation proceedings, and, as stated earlier in this opinion, the Republic was placed in possession
of the lands on August 10, 1959, On November 21, 1959, the Court of First Instance of Pampanga,
dismissed Civil Case No. 1458, upon petition of the parties.

The Republic urges that the "taking " of Castellvi's property should be deemed as of the year 1947 by
virtue of afore-quoted lease agreement. In American Jurisprudence, Vol. 26, 2nd edition, Section 157, on
the subject of "Eminent Domain, we read the definition of "taking" (in eminent domain) as follows:

Taking' under the power of eminent domain may be defined generally as entering upon private property
for more than a momentary period, and, under the warrant or color of legal authority, devoting it to a
public use, or otherwise informally appropriating or injuriously affecting it in such a way as substantially
to oust the owner and deprive him of all beneficial enjoyment thereof. 13

Pursuant to the aforecited authority, a number of circumstances must be present in the "taking" of
property for purposes of eminent domain.

First, the expropriator must enter a private property. This circumstance is present in the instant case,
when by virtue of the lease agreement the Republic, through the AFP, took possession of the property
of Castellvi.

Second, the entrance into private property must be for more than a momentary period. "Momentary"
means, "lasting but a moment; of but a moment's duration" (The Oxford English Dictionary, Volume
VI, page 596); "lasting a very short time; transitory; having a very brief life; operative or recurring at
every moment" (Webster's Third International Dictionary, 1963 edition.) The aforecited lease contract
was for a period of one year, renewable from year to year. The entry on the property, under the lease,
is temporary, and considered transitory. The fact that the Republic, through the AFP, constructed
some installations of a permanent nature does not alter the fact that the entry into the land was
transitory, or intended to last a year, although renewable from year to year by consent of 'The owner
of the land. By express provision of the lease agreement the Republic, as lessee, undertook to return
the premises in substantially the same condition as at the time the property was first occupied by the
AFP. It is claimed that the intention of the lessee was to occupy the land permanently, as may be
inferred from the construction of permanent improvements. But this "intention" cannot prevail over
the clear and express terms of the lease contract.

Third, the entry into the property should be under warrant or color of legal authority. This
circumstance in the "taking" may be considered as present in the instant case, because the Republic
entered the Castellvi property as lessee.

Fourth, the property must be devoted to a public use or otherwise informally appropriated or
injuriously affected. It may be conceded that the circumstance of the property being devoted to public
use is present because the property was used by the air force of the AFP.
Fifth, the utilization of the property for public use must be in such a way as to oust the owner and
deprive him of all beneficial enjoyment of the property. In the instant case, the entry of the Republic
into the property and its utilization of the same for public use did not oust Castellvi and deprive her of
all beneficial enjoyment of the property. Castellvi remained as owner, and was continuously
recognized as owner by the Republic, as shown by the renewal of the lease contract from year to year,
and by the provision in the lease contract whereby the Republic undertook to return the property to
Castellvi when the lease was terminated. Neither was Castellvi deprived of all the beneficial
enjoyment of the property, because the Republic was bound to pay, and had been paying, Castellvi
the agreed monthly rentals until the time when it filed the complaint for eminent domain on June 26,
1959.

It is clear, therefore, that the "taking" of Catellvi's property for purposes of eminent domain cannot be
considered to have taken place in 1947 when the Republic commenced to occupy the property as lessee
thereof. We find merit in the contention of Castellvi that two essential elements in the "taking" of
property under the power of eminent domain, namely: (1) that the entrance and occupation by the
condemnor must be for a permanent, or indefinite period, and (2) that in devoting the property to
public use the owner was ousted from the property and deprived of its beneficial use, were not present
when the Republic entered and occupied the Castellvi property in 1947.

WHEREFORE, the decision appealed from is modified, as follows:

(a) the lands of appellees Carmen Vda. de Castellvi and Maria Nieves Toledo-Gozun, as described in the
complaint, are declared expropriated for public use;

(b) the fair market value of the lands of the appellees is fixed at P5.00 per square meter;

(c) the Republic must pay appellee Castellvi the sum of P3,796,495.00 as just compensation for her one
parcel of land that has an area of 759,299 square meters, minus the sum of P151,859.80 that she
withdrew out of the amount that was deposited in court as the provisional value of the land, with
interest at the rate of 6% per annum from July 10, 1959 until the day full payment is made or deposited
in court;

(d) the Republic must pay appellee Toledo-Gozun the sum of P2,695,225.00 as the just compensation for
her two parcels of land that have a total area of 539,045 square meters, minus the sum of P107,809.00
that she withdrew out of the amount that was deposited in court as the provisional value of her lands,
with interest at the rate of 6%, per annum from July 10, 1959 until the day full payment is made or
deposited in court; (e) the attorney's lien of Atty. Alberto Cacnio is enforced; and

(f) the costs should be paid by appellant Republic of the Philippines, as provided in Section 12, Rule 67,
and in Section 13, Rule 141, of the Rules of Court.

IT IS SO ORDERED.
Filstream International v. CA

FACTS: Petitioner, Filstream International Inc., is the registered owner of the properties subject of this
dispute consisting of adjacent parcels of land situated in Antonio Rivera Street, Tondo II, Manila.

Petitioner filed an ejectment suit before the Metropolitan Trial Court of Manila (Branch 15) against the
occupants of the abovementioned parcels of land, herein private respondents on the grounds of
termination of the lease contract and non-payment of rentals. Judgment was rendered by the MTC on
1993 ordering private respondents to vacate the premises and pay back rentals to petitioner.[1]

The RTC affirmed the decision of the MTC and the CA affirmed the decision of the RTC in its decision. No
appeals were filed, hence the decision became final and executory.

It appeared that during the pendency of the ejectment proceedings private respondents filed on May
25, 1993, a complaint for Annulment of Deed of Exchange against petitioner Filstream. It was at this
stage that respondent City of Manila came into the picture when the city government approved
Ordinance No. 7813[3] authorizing Mayor Alfredo S. Lim to initiate the acquisition by negotiation,
expropriation, purchase, or other legal means certain parcels of land which formed part of the
properties of petitioner then occupied by private respondents. Subsequently, the City of Manila
approved Ordinance No. 7855[4] declaring the expropriation of certain parcels of land situated along
Antonio Rivera and Fernando Ma. Guerero streets in Tondo, Manila which were owned by Mr. Enrique
Quijano Gutierez, petitioners predecessor-in-interest.

Respondent City of Manila filed a complaint for eminent domain before the RTC of Manila, Branch
42,[5] seeking to expropriate the aforecited parcels of land owned by petitioner Filstream which are
situated at Antonio Rivera Street, Tondo II, Manila.[6] The trial court issued a Writ of Possession[7] in favor
of the former which ordered the transfer of possession over the disputed premises to the City of Manila.

Meanwhile, owing to the finality of the decision in the ejectment suit the MTC of Manila upon motion of
petitioner Filstream, issued a Writ of Execution as well as a Notice to Vacate the disputed premises.[18]

The respondent filed with the CA for the issuance of a restraining order enjoining the execution of the
writ of demolition issued in the ejectment suit which Filstream won. The CA issued the TRO.

Petitioner Filstream objects to the issuance by respondent CA of the restraining order and the
preliminary injunction enjoining the execution of the writ of demolition issued in the ejectment suit as
an incident to private respondents pending petition assailing the dismissal by the RTC of Manila, Branch
33, of the consolidated petitions for certiorari filed by private respondents and the City of Manila on the
ground of forum shopping.

The propriety of the issuance of the restraining order and the writ of preliminary injunction is but a
mere incient to the actual controversy which is rooted in the assertion of the conflicting rights of the
parties in this case over the disputed premises. In order to determine whether private respondents are
entitled to the injunctive reliefs granted by respondent CA, we deemed it proper to extract the source of
discord.

Petitioner Filstream anchors its claim by virtue of its ownership over the properties and the existence of
a final and executory judgment against private respondents ordering the latters ejectment from the
premises. Private respondents claim on the other hand hinges on an alleged supervening event which
has rendered the enforcement of petitioners rights moot, that is, the expropriation proceedings
undertaken by the City of Manila over the disputed premises for the benefit of herein private
respondents. For its part, the City of Manila is merely exercising its power of eminent domain within its
jurisdiction by expropriating petitioners properties for public use.

ISSUE: Whether or not Filstream was deprived of due process on the ground of non-compliance with
priority in expropriation?

HELD: Yes. There is no dispute as to the existence of a final and executory judgment in favor of
petitioner Filstream ordering the ejectment of private respondents from the properties subject of this
dispute. The judgment in the ejectment suit became final and executory after private respondents failed
to interpose any appeal from the adverse decision of the Court of Appeals. Thus, petitioner has every
right to assert the execution of this decision as it had already became final and executory.

However, it must also be conceded that the City of Manila has an undeniable right to exercise its power
of eminent domain within its jurisdiction. The right to expropriate private property for public use is
expressly granted to it under Section 19 of the 1991 Local Government Code.

More specifically, the City of Manila has the power to expropriate private property in the pursuit of its
urban land reform and housing program as explicitly laid out in the Revised Charter of the City of Manila.

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

The City of Manila, acting through its legislative branch, has the express power to acquire private lands
in the city and subdivide these lands into home lots for sale to bona-fide tenants or occupants thereof,
and to laborers and low-salaried employees of the city.

That only a few could actually benefit from the expropriation of the property does not diminish its public
use character. It is simply not possible to provide all at once land and shelter for all who need them
(Sumulong v. Guerrero, 154 SCRA 461 [1987]).

Corollary to the expanded notion of public use, expropriation is not anymore confined to vast tracts of
land and landed estates. It is therefore of no moment that the land sought to be expropriated in this
case is less than the half a hectare only.

Through the years, the public use requirement in eminent domain has evolved into a flexible concept,
influenced by changing conditions. Public use now includes the broader notion of indirect public
benefit or advantage, including a particular, urban land reform and housing.[33]

The governing law that deals with the subject of expropriation for purposed of urban land reform and
housing in Republic Act No. 7279 (Urban Development and Housing Act of 1992) and Sections 9 and 10
of which specifically provide as follows:

Sec. 9. Priorities in the acquisition of Land Lands for socialized housing shall be acquired in the following
order:
(a) Those owned by the Government or any of its sub-divisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their subsidiaries;

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas of Priority Development, Zonal Improvement sites, and Slum
Improvement and Resettlement Program sites which have not yet been acquired;

(e) Bagong Lipunan Improvement sites and Services or BLISS sites which have not yet been acquired; and

(f) Privately-owned lands.

Where on-site development is found more practicable and advantageous to the beneficiaries, the
priorities mentioned in this section shall not apply. The local government units shall give budgetary
priority to on-site development of government lands.

Sec. 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act shall include,
among others, community mortgage, land swapping, land assembly or consolidation, land banking,
donation to the Government, joint venture agreement, negotiated purchase, and
expropriation: Provided, however, That expropriation shall be resorted to only when other modes of
acquisition have been exhausted: Provided further, That where expropriation is resorted to, parcels of
land owned by small property owners shall be exempted for purposes of this Act: Provided, finally, That
abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding
analogous to the procedure laid down in Rule 91 of the Rules of Court.

For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired
by the local government units, or by the National Housing Authority primarily through negotiated
purchase: Provided, That qualified beneficiaries who are actual occupants of the land shall be given the
right of first refusal. (Italics supplied).

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

Proceeding from the parameters laid out in the above disquisitions, we now pose the crucial
question: Did the city of Manila comply with the abovementioned conditions when it expropriated
petitioner Filstreams properties? We have carefully scrutinized the records of this case and found
nothing that would indicate the respondent City of Manila complied with Sec. 9 and Sec. 10 of R.A.
7279. Petitioners Filstreams properties were expropriated and ordered condemned in favor of the City
of Manila sans any showing that resort to the acquisition of other lands listed under Sec. 9 of RA 7279
have proved futile. Evidently, there was a violation of petitioner Filstreams right to due process which
must accordingly be rectified.
Indeed, it must be emphasized that the State has a paramount interest in exercising its power of
eminent domain for the general good considering that the right of the State to expropriate private
property as long as it is for public use always takes precedence over the interest of private property
owners. However we must not lose sight of the fact that the individual rights affected by the exercise of
such right are also entitled to protection, bearing in mind that the exercise of this superior right cannot
override the guarantee of due process extended by the law to owners of the property to be
expropriated. In this regard, vigilance over compliance with the due process requirements is in order.
Republic v Mupas
On October 5, 1994, Asias Emerging Dragon Corp. (AEDC) submitted an unsolicited proposal to the
Government through the Department of Transportation and Communications (DOTC) and the Manila
International Airport Authority (MIAA) for the construction and development of the NAIA-IPT III under
a build-operate-and-transfer (BOT) arrangement. The DOTC and the MIAA invited the public to submit
competitive and comparative proposals to AEDCs unsolicited proposal in accordance with the BOT Law3 and
its implementing rules.4 c ralawre dnad

2. PIATCO

On September 20, 1996, Paircargo Consortium composed of Peoples Air Cargo and Warehousing Co., Inc.
(Paircargo), Philippine Air and Grounds Services, Inc. (PAGS), and Security Bank Corporation (Security
Bank) submitted its competitive proposal to the Prequalification Bids and Awards Committee (PBAC).5 cralawr

On July 12, 1997, the Government executed a Concession Agreement with PIATCO for the construction,
development, and operation of the NAIA-IPT III under a build-operate-transfer scheme. On November
26, 1998, the Amended and Restated Concession Agreement (ARCA) superseded the 1997 Concession
Agreement. The Government and PIATCO likewise entered into a series of supplemental agreements,
namely: the First Supplement signed on August 27, 1999; the Second Supplement signed on September 4,
2000; and the Third Supplement signed on June 22, 2001.8 cralaw rednad

3. PIATCO and the Services of Takenaka and Asahikosan

On March 31, 2000, PIATCO engaged the services of Takenaka, a local branch of a foreign corporation
duly organized under the laws of Japan and doing business in the Philippines, for the construction of the
NAIA-IPT III under an Onshore Construction Contract.10 cralaw redn

APPOINTMENT OF APPRAISER:
The Government likewise avers that the appointment of an independent appraiser would only render the
expropriation proceedings more costly. The Government would be forced to pay for the services of two
appraisers, which is not the intention of RA 8974. The court-appointed appraiser, too, would render the
BOCs functions useless. Under Rule 67 of the Rules of Court, it is the BOC that is required to receive
evidence in the determination of just compensation. Rule 67 of the Rules of Court does not require the
appointment of an appraiser in eminent domain cases.

PIATCO further argues that the rules on preliminary attachment do not apply to this case. Mere
apprehension that PIATCO would abscond from its financial liabilities is not a ground for the attachment of
the creditors assets. Moreover, an artificial entity cannot abscond. PIATCO likewise denies that it refuses to
pay Takenaka and Asahikosans money claims. PIATCO posits that the eminent domain case is not the
proper venue for the adjudication of Takenaka and Asahikosans money claims.160 cralawrednad

Takenaka and Asahikosan maintain that Section 9, Rule 67 of the Rules of Court apply with respect to the
adjudication of the parties conflicting just compensation claims. The Court did not declare in Gingoyon that
Rule 67 of the Rules of Court shall not apply to the payment of final just compensation. The Court merely
applied RA 8974 in Gingoyon insofar as the law prescribes direct payment as a prerequisite for the issuance
of a writ of possession in eminent domain cases.

Takenaka and Asahikosan argue that deductions for depreciation and deterioration are inconsistent with the
concept of replacement cost as a measure of appraising the actual value of the NAIA-IPT III. In exercising
the power of eminent domain, the Government takes the property on as is, where is basis. Takenaka and
Asahikosan point out that the Government has the option not to expropriate the terminal. Consequently, the
Government cannot base the value of the building on whether or not the building caters to the
Governments needs.

Framework: Eminent domain is

an inherent power of the State

2.a. The power of eminent domain is

a fundamental state power that is
inseparable from sovereignty.Eminent domain is a fundamental state power that is inseparable from
sovereignty. It is the power of a sovereign state to appropriate private property within its territorial
sovereignty to promote public welfare. The exercise of this power is based on the States primary duty to
serve the common need and advance the general welfare.174 It is an inherent power and is not conferred by
the Constitution.175 It is inalienable and no legislative act or agreement can serve to abrogate the power of
eminent domain when public necessity and convenience require its exercise.176 cralaw rednad

The decision to exercise the power of eminent domain rests with the legislature which has the exclusive
power to prescribe how and by whom the power of eminent domain is to be exercised. Thus, the Executive
Department cannot condemn properties for its own use without direct authority from the Congress.177 cralawredna d

The exercise of eminent domain necessarily derogates against private rights which must yield to demand of
the public good and the common welfare.178However, it does not confer on the State the authority to
wantonly disregard and violate the individuals fundamental rights.

2.b. Just compensation is the full and

fair equivalent of the property taken from the
owner by the condemnor.

The 1987 Constitution embodies two constitutional safeguards against the arbitrary exercise of eminent
domain: first, private property shall not be taken for public use without just compensation;179 and second,
no person shall be deprived of life, liberty, or property without due process of law.180 cralaw rednad

2.b.2. Replacement cost is a

different standard of value from fair
market value.

2.b.3. Replacement cost is only one

of the standards that the Court shall
consider in appraising the NAIA-
IPT III.

Section 5 of RA 8974 in this regard provides that the court may consider the following relevant standards in
eminent domain cases: ChanRoblesvirtual Lawlib ra ry

(a)The classification and use for which the property is suited;

(b)The developmental costs for improving the land;
(c) The value declared by the owners;
(d)The current selling price of similar lands in the vicinity;
(e) The reasonable disturbance compensation for the removal and/or demolition of certain improvement on
the land and for the value of improvements thereon;
(f) The size, shape or location, tax declaration and zonal valuation of the land;
 (g)The price of the land as manifested in the ocular findings, oral as well as documentary evidence
presented; and
(h)Such facts and events as to enable the affected property owners to have sufficient funds to acquire
similarly situated lands of approximate areas as those required from them by the government, and
thereby rehabilitate themselves as early as possible.

If we adopt the new replacement cost method, PIATCO would be compensated for more than
what it had actually lost. We must remember that the concept of just compensation does not imply
fairness to the property owner alone. In an eminent domain situation, compensation must likewise be just to
the public which ultimately bears the cost of expropriation. The property owner is entitled to
compensation only for what he actually loses; what he loses is only the actual value of the
property at the time of the taking.231 cralawred nad

This Court exercises its judicial function to fix just compensation in eminent domain cases on the
basis of the law, the rules, and the evidence including the appraisal reports and the embedded formula on
how the parties arrived at the amounts of just compensation presented by the parties before the trial
court and the entire record of the consolidated cases.

The determination of just compensation in eminent domain cases is essentially and exclusively
a judicial function. Fixing the formula with definitiveness and particularity in just compensation is not the
function of the executive nor of the legislative branches, much less of the parties in this case. Any valuation
for just compensation laid down in the statutes may not replace the courts own judgment as to what
amount should be awarded and how this amount should be arrived at. Legislative enactments, as well as
executive issuances, providing the method of computing just compensation are treated as
mere guidelines in ascertaining the amount of just compensation.

We cannot adopt the same liberal attitude in an eminent domain case and merely estimate the
attendant cost in the total absence of evidence of construction costs. The amount of just
compensation must be substantiated by a preponderance of evidence.

An eminent domain case is different from a complaint for damages. A complaint for damages is based on
tort and emanates from the transgression of a right. A complaint for damages seeks to vindicate a legal
wrong through damages, which may be actual, moral, nominal, temperate, liquidated, or exemplary. When
a right is exercised in a manner not conformable with Article 19 of the Civil Code and other provisions on
human relations in the Civil Code, and the exercise results in the damage of another, a legal wrong is
committed and the wrongdoer is held responsible.296 cra lawred nad

In contrast, an eminent domain case arises from the States exercise of its power to expropriate private
property for public use. The Constitution mandates that the property owner shall only receive just
compensation which, of course, should be based on preponderance of evidence. Moreover, the
determination of eminent domain being a judicial function, there is no constitutional or statutory provision
giving the courts unfettered discretion to determine just compensation based on estimates and conjectures.

5.a. Depreciation should be

deducted from the replacement
cost.

In eminent domain cases, it is acceptable that a deduction should be made to the extent to which the
improvement or fixture has depreciated. The cost of the buildings and fixtures, minus depreciation, is a
reasonable test of the amount by which they enhance the market value of the land even where the market
value of the land itself is not readily quantifiable.308 c ralawr
ven assuming that Takenaka and Asahikosan as unpaid contractors in the botched NAIA-IPT III
construction contract indeed have liens over the NAIA-IPT III, PIATCO is still the property owner who, as
such, should directly receive just compensation from the Government.

We clarify that the expropriation courts determination of the lawful property owner is merely provisional.
By filing an action for expropriation, the condemnor merely serves notice that it is taking title to and
possession of the property, and that the defendant is asserting title to or interest in the property, not to
prove a right to possession, but to prove a right to compensation for the taking. The Courts
disposition with respect to the ownership of the property is not conclusive, and it remains open to
challenge through proper actions. The courts resolution of the title to the land at the time of taking has no
legal consequences beyond the eminent domain proceedings. The courts decision cannot be pleaded as a
defense of res judicata or collateral estoppel in any action to determine title to the property.

9.c. A final disposition in the eminent

domain case with respect to the order of
payment to a particular person shall be
final and executory.

To avoid future litigation, we emphasize that a final disposition in the eminent domain case with
respect to the order to pay a particular person shall be final and executory upon the lapse of
relevant periods under Rule 39 of the Rules of Court. The recourse of the person claiming ownership
over the expropriated property in any subsequent case is against the adjudged property owner in the
expropriation case.

The principle of res judicata applies in this particular matter because the issues on the amount of just
compensation and the person to be paid just compensation are the central issues in the second
phase of expropriation. Based on this principle, a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on points and
matters determined in the former suit.369 cra lawred nad

There would be no end to litigation in an eminent domain case if we rule otherwise; we would only foment
mockery of the judicial proceedings as the order of payment in the eminent domain case would never be
truly final and executory. Furthermore, to the detriment of the public, interest would continue to accrue on
just compensation if we rule that the order of payment to a particular recipient can be reversed in the
subsequent judicial proceedings and is, indeed, reversed in the subsequent case. This would be unfair to the
State (and the public) that merely exercised its immutable right to exercise the power of eminent domain.

Contrary to Takenaka and Asahikosans claim, in Calvo v. Zandueta,370 the Court did not stay the
execution of a final and executory ruling in the eminent domain case during the pendency of the
interpleader case.

10.a. The Government may take the property

for public purpose or public use upon the
issuance and effectivity of the writ of possession.

To clarify and to avoid confusion in the implementation of our judgment, the full payment of just
compensation is not a prerequisite for the Governments effective taking of the property. As
discussed above, RA 8974 allows the Government to enter the property and implement national
infrastructure projects upon the issuance of the writ of possession. When the taking of the property
precedes the payment of just compensation, the Government shall indemnify the property owner by way of
interest.

Taking under the power of eminent domain means entering upon private property for more than a
momentary period, and under the warrant or color of legal authority, devoting it to public use, or otherwise
informally appropriating or injuriously affecting it in such a way as substantially to oust the owner and
deprive him of all beneficial enjoyment thereof.373 cra lawredna d

Taking of property takes place when: (1) the owner is actually deprived or dispossessed of his property;
(2) there is a practical destruction or a material impairment of the value of his property; (3) the owner is
deprived of the ordinary use of the property, or (4) when he is deprived of the jurisdiction, supervision and
control of his property.374 c ralawre dnad

The taking of property is different from the transfer of the property title from the private owner
to the Government. Under Rule 67 of the Rules of Court, there are two phases of expropriation: (a) the
condemnation of the property after it is determined that its acquisition will be for a public purpose or public
use; and (b) the determination of just compensation to be paid for the taking of private property to be made
by the court with the assistance of not more than three commissioners.

The first phase is concerned with the determination of the Governments authority to exercise the power of
eminent domain and the propriety of its exercise in the context of the facts involved in the suit. The court
declares that the Government has a lawful right to take the property sought to be condemned, for the public
use or purpose described in the complaint.37

The second phase relates to the just amount that the Government shall compensate the property
owner. 376 cralaw rednad

Whenever the court affirms the condemnation of private property in the first phase of the proceedings, it
merely confirms the Governments lawful right to take the private property for public purpose or
public use. The court does not necessarily rule that the title to the private property likewise vests on the
Government.

The transfer of property title from the property owner to the Government is not a condition
precedent to the taking of property. The State may take private property prior to the eventual transfer
of title of the expropriated property to the State.