SUMULONG VS GUERRERO

CORTES, J.:
On December 5, 1977 the National Housing Authority (NIIA) filed a complaint for
expropriation of parcels of land covering approximately twenty five (25) hectares, (in
Antipolo, Rizal) including the lots of petitioners Lorenzo Sumulong and Emilia Vidanes-
Balaoing with an area of 6,667 square meters and 3,333 square meters respectively. The
land sought to be expropriated were valued by the NHA at one peso (P1.00) per square
meter adopting the market value fixed by the provincial assessor in accordance with
presidential decrees prescribing the valuation of property in expropriation proceedings.
Together with the complaint was a motion for immediate possession of the properties. The
NHA deposited the amount of P158,980.00 with the Philippine National Bank, representing
the "total market value" of the subject twenty five hectares of land, pursuant to Presidential
Decree No. 1224 which defines "the policy on the expropriation of private property for
socialized housing upon payment of just compensation."
On January 17, 1978, respondent Judge issued the following Order:
Plaintiff having deposited with the Philippine National Bank, Heart Center
Extension Office, Diliman, Quezon City, Metro Manila, the amount of
P158,980.00 representing the total market value of the subject parcels of
land, let a writ of possession be issued.
SO ORDERED.
Pasig, Metro Manila, January 17, 1978.
(SGD)
BUENAVENTURA S.
GUERRERO
Petitioners filed a motion for reconsideration on the ground that they had been deprived of
the possession of their property without due process of law. This was however, denied.
Hence, this petition challenging the orders of respondent Judge and assailing the
constitutionality of Pres. Decree No. 1224, as amended. Petitioners argue that:
1) Respondent Judge acted without or in excess of his jurisdiction or with
grave abuse of discretion by issuing the Order of January 17, 1978 without
notice and without hearing and in issuing the Order dated June 28, 1978
denying the motion for reconsideration.
2) Pres. Decree l224, as amended, is unconstitutional for being violative of the
due process clause, specifically:
a) The Decree would allow the taking of property regardless of
size and no matter how small the area to be expropriated;
b) "Socialized housing" for the purpose of condemnation
proceeding, as defined in said Decree, is not really for a public
purpose;
c) The Decree violates procedural due process as it allows
immediate taking of possession, control and disposition of
property without giving the owner his day in court;
d) The Decree would allow the taking of private property upon
payment of unjust and unfair valuations arbitrarily fixed by
government assessors;
e) The Decree would deprive the courts of their judicial
discretion to determine what would be the "just compensation"
in each and every raise of expropriation.
Indeed, the exercise of the power of eminent domain is subject to certain limitations
imposed by the constitution, to wit:
Private property shall not be taken for public use without just compensation
(Art. IV, Sec. 9);
No person shall be deprived of life, liberty, or property without due process of
law, nor shall any person be denied the equal protection of the laws (Art. IV,
sec. 1).
 CONSTI LAW2

Nevertheless, a clear case of constitutional infirmity has to be established for this Court to
nullify legislative or executive measures adopted to implement specific constitutional
provisions aimed at promoting the general welfare.
Petitioners' objections to the taking of their property subsumed under the headings of public
use, just compensation, and due process have to be balanced against competing interests of
the public recognized and sought to be served under declared policies of the constitution as
implemented by legislation.
1. Public use
a) Socialized Housing
Petitioners contend that "socialized housing" as defined in Pres. Decree No. 1224, as
amended, for the purpose of condemnation proceedings is not "public use" since it will
benefit only "a handful of people, bereft of public character."
"Socialized housing" is defined as, "the construction of dwelling units for the middle and
lower class members of our society, including the construction of the supporting
infrastructure and other facilities" (Pres. Decree No. 1224, par. 1). This definition was later
expanded to include among others:
a) The construction and/or improvement of dwelling units for the middle and
lower income groups of the society, including the construction of the
supporting infrastructure and other facilities;
b) Slum clearance, relocation and resettlement of squatters and slum dwellers
as well as the provision of related facilities and services;
c) Slum improvement which consists basically of allocating homelots to the
dwellers in the area or property involved, rearrangemeant and re-alignment of
existing houses and other dwelling structures and the construction and
provision of basic community facilities and services, where there are none,
such as roads, footpaths, drainage, sewerage, water and power system
schools, barangay centers, community centers, clinics, open spaces, parks,
playgrounds and other recreational facilities;
d) The provision of economic opportunities, including the development of
commercial and industrial estates and such other facilities to enhance the
total community growth; and
e) Such other activities undertaken in pursuance of the objective to provide
and maintain housing for the greatest number of people under Presidential
Decree No, 757, (Pres. Decree No. 1259, sec. 1)
The "public use" requirement for a and exercise of the power of eminent domain is a flexible
and evolving concept influenced by changing conditions. In this jurisdiction, the statutory
and judicial trend has been summarized as follows:
The taking to be valid must be for public use. There was a time when it was
felt that a literal meaning should be attached to such a requirement.
Whatever project is undertaken must be for the public to enjoy, as in the case
of streets or parks. Otherwise, expropriation is not allowable. It is not
anymore. As long as the purpose of the taking is public, then the power of
eminent domain comes into play. As just noted, the constitution in at least two
cases, to remove any doubt, determines what is public use. One is the
expropriation of lands to be subdivided into small lots for resale at cost to
individuals. The other is in the transfer, through the exercise of this power, of
utilities and other private enterprise to the government. It is accurate to state
then that at present whatever may be beneficially employed for the general
welfare satisfies the requirement of public use [Heirs of Juancho Ardona v.
Reyes, G.R. Nos. 60549, 60553-60555 October 26, 1983, 125 SCRA 220 (1983)
at 234-5 quoting E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 523-
4, (2nd ed., 1977) Emphasis supplied].
The term "public use" has acquired a more comprehensive coverage. To the literal import of
the term signifying strict use or employment by the public has been added the broader
 CONSTI LAW3

notion of indirect public benefit or advantage. As discussed in the above cited case of Heirs
of Juancho Ardona:
The restrictive view of public use may be appropriate for a nation which
circumscribes the scope of government activities and public concerns and
which possesses big and correctly located public lands that obviate the need
to take private property for public purposes. Neither circumstance applies to
the Philippines. We have never been a laissez faire State. And the necessities
which impel the exertion of sovereign power are all too often found in areas of
scarce public land or limited government resources. (p. 231)
Specifically, urban renewal or redevelopment and the construction of low-cost housing is
recognized as a public purpose, not only because of the expanded concept of public use but
also because of specific provisions in the Constitution. The 1973 Constitution made it
incumbent upon the State to establish, maintain and ensure adequate social services
including housing [Art. 11, sec. 7]. The 1987 Constitution goes even further by providing
that:
The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty
through policies that provide adequate social services, promote full
employment, a rising standard of living and an improved quality of life for all.
[Art. II, sec. 9]
The state shall by law, and for the common good, undertake, in cooperation
with the private sector, a continuing program of urban land reform and
housing which will make available at affordable cost decent housing and basic
services to underprivileged and homeless citizens in urban centers and
resettlement areas. It shall also promote adequate employment opportunities
to such citizens. In the implementation of such program the State shall
respect the rights of small property owners. (Art. XIII, sec. 9, Emphaisis
supplied)
Housing is a basic human need. Shortage in housing is a matter of state concern since it
directly and significantly affects public health, safety, the environment and in sum, the
general welfare. The public character of housing measures does not change because units in
housing projects cannot be occupied by all but only by those who satisfy prescribed
qualifications. A beginning has to be made, for it is not possible to provide housing for are
who need it, all at once.
Population growth, the migration to urban areas and the mushrooming of crowded makeshift
dwellings is a worldwide development particularly in developing countries. So basic and
urgent are housing problems that the United Nations General Assembly proclaimed 1987 as
the "International Year of Shelter for the Homeless" "to focus the attention of the
international community on those problems". The General Assembly is Seriously concerned
that, despite the efforts of Governments at the national and local levels and of international
organizations, the driving conditions of the majority of the people in slums and squatter
areas and rural settlements, especially in developing countries, continue to deteriorate in
both relative and absolute terms." [G.A. Res. 37/221, Yearbook of the United Nations 1982,
Vol. 36, p. 1043-4]
In the light of the foregoing, this Court is satisfied that "socialized housing" fans within the
confines of "public use". It is, particularly important to draw attention to paragraph (d) of
Pres. Dec. No. 1224 which opportunities inextricably linked with low-cost housing, or slum
clearance, relocation and resettlement, or slum improvement emphasize the public purpose
of the project.
In the case at bar, the use to which it is proposed to put the subject parcels of land meets
the requisites of "public use". The lands in question are being expropriated by the NHA for
the expansion of Bagong Nayon Housing Project to provide housing facilities to low-salaried
government employees. Quoting respondents:
1. The Bagong Nayong Project is a housing and community development
undertaking of the National Housing Authority. Phase I covers about 60
 CONSTI LAW4

hectares of GSIS property in Antipolo, Rizal; Phase II includes about 30

hectares for industrial development and the rest are for residential housing
development.
It is intended for low-salaried government employees and aims to provide
housing and community services for about 2,000 families in Phase I and about
4,000 families in Phase II.
It is situated on rugged terrain 7.5 kms. from Marikina Town proper; 22 Kms.
east of Manila; and is within the Lungs Silangan Townsite Reservation (created
by Presidential Proclamation No. 1637 on April 18, 1977).
The lands involved in the present petitions are parts of the
expanded/additional areas for the Bagong Nayon Project totalling 25.9725
hectares. They likewise include raw, rolling hills. (Rollo, pp. 266-7)
The acute shortage of housing units in the country is of public knowledge. Official data
indicate that more than one third of the households nationwide do not own their dwelling
places. A significant number live in dwellings of unacceptable standards, such as shanties,
natural shelters, and structures intended for commercial, industrial, or agricultural purposes.
Of these unacceptable dwelling units, more than one third is located within the National
Capital Region (NCR) alone which lies proximate to and is expected to be the most benefited
by the housing project involved in the case at bar [See, National Census and Statistics
Office, 1980 Census of Population and Housing].
According to the National Economic and Development Authority at the time of the
expropriation in question, about "50 per cent of urban families, cannot afford adequate
shelter even at reduced rates and will need government support to provide them with social
housing, subsidized either partially or totally" [NEDA, FOUR YEAR DEVELOPMENT PLAN For
1974-1977, p. 357]. Up to the present, housing some remains to be out of the reach of a
sizable proportion of the population" [NEDA, MEDIUM-TERM PHILIPPINE DEVELOPMENT PLAN
1987-1992, p. 240].
The mushrooming of squatter colonies in the Metropolitan Manila area as well as in other
cities and centers of population throughout the country, and, the efforts of the government
to initiate housing and other projects are matters of public knowledge [See NEDA, FOUR
YEAR DEVELOPMENT PLAN For 1974-1977, pp. 357-361; NEDA, FIVE-YEAR PHILIPPINE
DEVELOPMENT PLAN 1978-1982, pp. 215-228 NEDA, FIVE YEAR PHILIPPINE DEVELOPMENT
PLAN 1983-1987, pp. 109-117; NEDA, MEDIUM TERM PHILIPPINE DEVELOPMENT PLAN 1987-
1992, pp. 240-254].
b) Size of Property
Petitioners further contend that Pres. Decree 1224, as amended, would allow the taking of
"any private land" regardless of the size and no matter how small the area of the land to be
expropriated. Petitioners claim that "there are vast areas of lands in Mayamot, Cupang, and
San Isidro, Antipolo, Rizal hundred of hectares of which are owned by a few landowners only.
It is surprising [therefore] why respondent National Housing Authority [would] include [their]
two man lots ..."
In J.M. Tuason Co., Inc. vs. Land Tenure Administration [G. R. No. L-21064, February 18, 1970,
31 SCRA 413 (1970) at 428] this Court earlier ruled that expropriation is not confined to
landed estates. This Court, quoting the dissenting opinion of Justice J.B.L. Reyes in Republic
vs. Baylosis, [96 Phil. 461 (1955)], held that:
The propriety of exercising the power of eminent domain under Article XIII,
section 4 of our Constitution cannot be determined on a purely quantitative or
area basis. Not only does the constitutional provision speak of lands instead of
landed estates, but I see no cogent reason why the government, in its quest
for social justice and peace, should exclusively devote attention to conflicts of
large proportions, involving a considerable number of individuals, and eschew
small controversies and wait until they grow into a major problem before
taking remedial action.
The said case of J.M. Tuason Co., Inc. departed from the ruling in Guido vs. Rural Progress
Administration [84 Phil. 847 (1949)] which held that the test to be applied for a valid
 CONSTI LAW5

expropriation of private lands was the area of the land and not the number of people who
stood to be benefited. Since then "there has evolved a clear pattern of adherence to the
"number of people to be benefited test" " [Mataas na Lupa Tenants Association, Inc. v.
Dimayuga, G.R. No. 32049, June 25,1984, 130 SCRA 30 (1984) at 39]. Thus, in Pulido vs.
Court of Appeals [G.R. No. 57625, May 3, 1983, 122 SCRA 63 (1983) at 73], this Court stated
that, "[i]t is unfortunate that the petitioner would be deprived of his landholdings, but his
interest and that of his family should not stand in the way of progress and the benefit of the
greater may only of the inhabitants of the country."
The State acting through the NHA is vested with broad discretion to designate the particular
property/properties to be taken for socialized housing purposes and how much thereof may
be expropriated. Absent a clear showing of fraud, bad faith, or gross abuse of discretion,
which petitioners herein failed to demonstrate, the Court will give due weight to and leave
undisturbed the NHA's choice and the size of the site for the project. The property owner
may not interpose objections merely because in their judgment some other property would
have been more suitable, or just as suitable, for the purpose. The right to the use,
enjoyment and disposal of private property is tempered by and has to yield to the demands
of the common good. The Constitutional provisions on the subject are clear:
The State shall promote social justice in all phases of national development.
(Art. II, sec. 10)
The Congress shall give highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity, reduce
social, economic, and political inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for the common good. To this
end, the State shall regulate the acquisition, ownership, use and disposition of
property and its increments. (Art, XIII, sec. 1)
Indeed, the foregoing provisions, which are restatements of the provisions in the 1935 and
1973 Constitutions, emphasize:
...the stewardship concept, under which private property is supposed to be
held by the individual only as a trustee for the people in general, who are its
real owners. As a mere steward, the individual must exercise his rights to the
property not for his own exclusive and selfish benefit but for the good of the
entire community or nation [Mataas na Lupa Tenants Association, Inc. supra at
42-3 citing I. CRUZ, PHILIPPINE POLITICAL LAW, 70 (1983 ed.)].
2. Just Compensation
Petitioners maintain that Pres. Decree No. 1224, as amended, would allow the taking of
private property upon payment of unjust and unfair valuations arbitrarily fixed by
government assessors. In addition, they assert that the Decree would deprive the courts of
their judicial discretion to determine what would be "just compensation".
The foregoing contentions have already been ruled upon by this Court in the case of Ignacio
vs. Guerrero (G.R. No. L-49088, May 29, 1987) which, incidentally, arose from the same
expropriation complaint that led to this instant petition. The provisions on just compensation
found in Presidential Decree Nos. 1224, 1259 and 1313 are the same provisions found in
Presidential Decree Nos. 76, 464, 794 and 1533 which were declared unconstitutional
in Export Processing Zone All thirty vs. Dulay (G.R. No. 5960 April 29, 1987) for being
encroachments on prerogatives.
This Court abandoned the ruling in National Housing Authority vs. Reyes [G.R. No. 49439,
June 29,1983, 123 SCRA 245 (1983)] which upheld Pres. Decree No. 464, as amended by -
Presidential Decree Nos. 794, 1224 and 1259.
In said case of Export Processing Zone Authority, this Court pointed out that:
The basic unfairness of the decrees is readily apparent.
Just compensation means the value of the property at the time of the taking.
It means a fair and full equivalent for the loss sustained. ALL the facts as to
the condition of the property and its surroundings, its improvements and
capabilities, should be considered.
xxx xxx xxx
 CONSTI LAW6

Various factors can come into play in the valuation of specific properties
singled out for expropriation. The values given by provincial assessors are
usually uniform for very wide areas covering several barrios or even an entire
total with the exception of the poblacion. Individual differences are never
taken into account. The value of land is based on such generalities as its
possible cultivation for rice, corn, coconuts, or other crops. Very often land
described as directional has been cultivated for generations. Buildings are
described in terms of only two or three classes of building materials and
estimates of areas are more often inaccurate than correct. Tax values can
serve as guides but cannot be absolute substitutes for just compensation.
To say that the owners are estopped to question the valuations made by
assessors since they had the opportunity to protest is illusory. The
overwhelming mass of landowners accept unquestioningly what is found in
the tax declarations prepared by local assessors or municipal clerks for them.
They do not even look at, much less analyze, the statements. The Idea of
expropriation simply never occurs until a demand is made or a case filed by
an agency authorized to do so. (pp. 12-3)
3. Due Process
Petitioners assert that Pres. Decree 1224, as amended, violates procedural due process as it
allows immediate taking of possession, control and disposition of property without giving the
owner his day in court. Respondent Judge ordered the issuance of a writ of possession
without notice and without hearing.
The constitutionality of this procedure has also been ruled upon in the Export Processing
Zone Authority case, viz:
It is violative of due process to deny to the owner the opportunity to prove
that the valuation in the tax documents is unfair or wrong. And it is repulsive
to basic concepts of justice and fairness to allow the haphazard work of minor
bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the
property, after evidence and arguments pro and con have been presented,
and after all factors and considerations essential to a fair and just
determination have been judiciously evaluated. (p. 13)
On the matter of the issuance of a writ of possession, the ruling in the Ignacio case is
reiterated, thus:
[I]t is imperative that before a writ of possession is issued by the Court in
expropriation proceedings, the following requisites must be met: (1) There
must be a Complaint for expropriation sufficient in form and in substance; (2)
A provisional determination of just compensation for the properties sought to
be expropriated must be made by the trial court on the basis of judicial (not
legislative or executive) discretion; and (3) The deposit requirement under
Section 2, Rule 67 must be complied with. (p. 14)
This Court holds that "socialized housing" defined in Pres. Decree No. 1224, as amended by
Pres. Decree Nos. 1259 and 1313, constitutes "public use" for purposes of expropriation.
However, as previously held by this Court, the provisions of such decrees on just
compensation are unconstitutional; and in the instant case the Court finds that the Orders
issued pursuant to the corollary provisions of those decrees authorizing immediate taking
without notice and hearing are violative of due process.
WHEREFORE, the Orders of the lower court dated January 17, 1978 and June 28, 1978
issuing the writ of possession on the basis of the market value appearing therein are
annulled for having been issued in excess of jurisdiction. Let this case be remanded to the
court of origin for further proceedings to determine the compensation the petitioners are
entitled to be paid. No costs.
SO ORDERED.
 CONSTI LAW7

REPUBLIC VS CA (to follow)

COSCULUELLA VS CA

G.R. No. 77765

GUTIERREZ, JR., J.:
This is a petition for review on certiorari which seeks to set aside the decision of the Court of
Appeals nullifying the orders of the trial court on the ground that said orders in effect,
sought the enforcement of a writ of execution against government funds. The petitioner
contends that to set aside the writ of execution would be an abridgment of his right to just
compensation and due process of law. The public respondents on the other hand, state that
government funds cannot be disbursed without proper appropriation and that a writ of
execution cannot legally issue against the State.
On March 8, 1976, the Republic of the Philippines filed a complaint with the Court of First
Instance of Iloilo to expropriate two parcels of land in the municipality of Barotac, Iloilo
owned by petitioner Sebastian Cosculluela and one Mita Lumampao, for the construction of
the canal network of the Barotac Irrigation Project.
On April 4, 1976, the trial court rendered a decision granting the expropriation and ordered
the public respondent to pay the following amounts:
1. To Mita Lumampao, the sum of P20,000 minus P4,001.82 which she had already
withdrawn plus P3,000 attorney's fees; and
2. Sebastian Cosculluela, the sum of P200,000.00 which is the reasonable estimate of
his actual and consequential loss by reason of the taking of his 3 hectares of land,
destruction of the sugarcane therein and the reduce in the yield of his sugarcane farm due
to water lagging and seepage; plus attorney's fees of P10,000 and litigation expenses of
P5,000.00. (p. 36, Rollo)
On appeal, the Court of Appeals modified the trial court's decision in that the attorney's fees
and litigation expenses were reduced from P10,000.00 and P5,000.00 to P5,000.00 and
P2,500.00 respectively. The decision became final and executory on September 21, 1985.
On May 7, 1986, on motion of the petitioner, the trial court ordered the issuance of a writ of
execution to implement the judgment of the appellate court.
On August 11, 1986, the respondent Republic filed a motion to set aside the order of May 7,
1986 as well as the writ of execution issued pursuant thereto, contending that the funds of
the National Irrigation Authority (NIA) are government funds and therefore, cannot be
disbursed without a government appropriation.
On October 6, 1986, the lower court issued an order modifying its order of May 7, 1986,
directing instead that the respondenit Republic deposit with the Philippine National Bank
(PNB) in the name of the petitioner, the amount adjudged in favor of the latter.
The respondent filed a petition with the Court of Appeals to annul the orders of May 7 and
October 6, 1986.
On November 25, 1986, the appellate court rendered the questioned decision setting aside
the aforementioned orders of the trial court on the ground that public or government funds
are not subject to levy and execution.
In this instant petition, the petitioner assails the decision of the appellate court as being
violative of his right to just compensation and due process of law. He maintains that these
constitutional guarantees transcend all administrative and procedural laws and
jurisprudence for as between these said laws and the constitutional rights of private citizens,
the latter must prevail.
As admitted by the respondent Republic, the NIA took possession of the expropriated
property in 1975 and for around ten (10) years already, it has been servicing the farmers on
both sides of the Barotac Viejo Irrigation Project in Iloilo Province and has been collecting
fees therefor by way of taxes at the expense of the petitioner. On the other hand, the
 CONSTI LAW8

petitioner, who is already more than eighty (80) years old and sickly, is undergoing frequent
hospitalization, and is made to suffer further by the unconscionable delay in the payment of
just compensation based on a final and executory judgment.
The respondent Republic, on the other hand, argues that while it has no intention of keeping
the land and dishonoring the judgment, the manner by which the same will have to be
satisfied must not be inconsistent with prevailing jurisprudence, and that is, that public
funds such as those of the respondent NIA cannot be disbursed without the proper
appropriation.
We rule for the petitioner.
One of the basic principles enshrined in our Constitution is that no person shall be deprived
of his private property without due process of law; and in expropriation cases, an essential
element of due process is that there must be just compensation whenever private property
is taken for public use. Thus, in the case of Province of Pangasinan v. CFI Judge of
Pangasinan, Branch VIII (80 SCRA 117, 120-121), this Court speaking through then Chief
Justice Fernando ruled:
There is full and ample recognition of the power of eminent domain by Justice Street in a
leading case of Visayan Refining Co. v. Camus (4C) Phil. 550 [1919]) decided prior to the
Commonwealth, the matter being governed by the Philippine Autonomy Act of 1916,
otherwise known as the Jones Law. It was characterized as "inseparable from sovereignty
being essential to the existence of the State and inherent in government even in its most
primitive forms." (Ibid, 558) Nonetheless, he was careful to point out: "In other words, the
provisions now generally found in the modern laws of constitutions of civilized countries to
the effect that private property shall not be taken for public use without just compensation
have their origin in the recognition of a necessity for restraining the sovereign and
protecting the individual. (Ibid, 559) Moreover, he did emphasize: "Nevertheless it should be
noted that the whole problem of expropriation is resolvable in its ultimate analysis into a
constitutional question of due process of law. ... Even were there no organic or constitutional
provision in force requiring compensation to be paid, the seizure of one's property without
payment, even though intended for a public use, would undoubtedly be held to be a taking
without due process of law and a denial of the equal protection of the laws. That aspect of
the matter was stressed in the recent case of J. M. Tuason and Co., Inc. v. Land Tenure
Administration. (31 SCRA 413) Conformably to such a fundamental principle then, in
accordance with a constitutional mandate, this Court has never hesitated to assure that
there be just compensation. If it were otherwise, the element of arbitrariness certainly would
enter. It is bad enough that an owner of a property, in the event of the exercise of this
sovereign prerogative, has no choice but to yield to such a taking. It is infinitely worse if
thereafter, he is denied all these years the payment to which he is entitled. This is one of the
instances where law and morals speak to the same effect. (Cf. Province of Tayabas v. Perez,
66 Phil. 467 [1938] and other related cases).
The property of the petitioner was taken by the government in 1975. The following year,
respondent NIA made the required deposit of P2,097.30 with the Philippine National Bank
and within the same year, the Barotac Viejo Irrigation Project was finished. Since then, for
more than a period of ten (10) years, the project has been of service to the farmers nearby
in the province of Iloilo. It is, thus, inconceivable how this project could have been started
without the necessary appropriation for just compensation. Needless to state, no
government instrumentality, agency, or subdivision has any business initiating expropriation
proceedings unless it has adequate funds, supported by proper appropriation acts, to pay for
the property to be seized from the owner. Not only was the government able to make an
initial deposit of P2,097.30 but the project was finished in only a year's time. We agree with
the petitioner that before the respondent NIA undertook the construction of the Barotac
Viejo Irrigation Project, the same was duly authorized, with the corresponding funds
appropriated for the payment of expropriated land and to pay for equipment, salaries of
personnel, and other expenses incidental to the project. The NIA officials responsible for the
project have to do plenty of explaining as to where they misdirected the funds intended for
the expropriated property.
 CONSTI LAW9

The present case must be distinguished from earlier cases where payment for property
expropriated by the National Government may not be realized upon execution. As a rule, the
legislature must first appropriate the additional amount to pay the award. (See
Commissioner of Public Highways v. San Diego, 31 SCRA 616 and Visayan Refining Co. v.
Camus & Paredes, 40 Phil. 550).
In the present case, the Barotac Viejo Project was a package project of government. Money
was allocated for an entire project. Before bulldozers and ditch diggers tore up the place and
before millions of pesos were put into the development of the project, the basic
responsibility of paying the owners for property seized from them should have been met.
Another distinction lies in the fact that the NIA collects fees for the use of the irrigation
system constructed on the petitioner's land. It does not have to await an express act of
Congress to locate funds for this specific purpose. The rule in earlier precedents that the
functions and public services rendered by the state cannot be allowed to be paralyzed or
disrupted by the diversion of public funds from their legitimate and specific objects
(Commissioner of Public Highways v. San Diego, supra, at p. 625) is not applicable here.
There is no showing of any public service to be disrupted if the fees collected from the
farmers of Iloilo for the use of irrigation water from the disrupted property were utilized to
pay for that property.
We must emphasize that nowhere in any expropriation case has there been a deviation from
the rule that the Government must pay for expropriated property. In the Commissioner of
Public Highways case, the Court stressed that it is incumbent upon the legislature to
appropriate the necessary amount because it cannot keep the land and dishonor the
judgment.
This case illustrates the expanded meaning of "public use" in the eminent domain clause.
(Constitution, Article III, Section 9.) The petitioner's land was not taken for the construction
of a road, bridge, school, public buildings, or other traditional objects of expropriation. When
the National Housing Authority expropriates raw land to convert into housing projects for
rent or sale to private persons or the NIA expropriates land to construct irrigation systems
and sells water rights to farmers, it would be the height of abuse and ignominy for the
agencies to start earning from those properties while ignoring final judgments ordering the
payment of just compensation to the former owners.
Just compensation means not only the correct determination of the amount to be paid to the
owner of the land but also the payment of the land within a reasonable time from its taking.
Without prompt payment, compensation cannot be considered "just" for the property owner
is made to suffer the consequence of being immediately deprived of his land while being
made to wait for a decade or more before actually receiving the amount necessary to cope
with his loss. Thus, in the case of Provincial Government of Sorsogon v. Rosa E. Vda. de
Villaroyo (153 SCRA 291), we ruled:
The petitioners have been waiting for more than thirty years to be paid for their land which
was taken for use as a public high school. As a matter of fair procedure, it is the duty of the
Government whenever it takes property from private persons against their will to supply all
required documentation and facilitate payment of just compensation. The imposition of
unreasonable requirements and vexatious delays before effecting payment is not only
galling and arbitrary but a rich source of discontent with government. There should be some
kind of swift and effective recourse against unfeeling and uncaring acts of middle or lower
level bureaucrats.
Under ordinary circumstances, immediate return to the owners of the unpaid property is the
obvious remedy. ln cases where land is taken for public use, public interest, however, must,
be considered. The children of Gubat, Sorsogon have been using the disputed land as their
high school athletic grounds for thirty years. (Emphasis supplied)
In the present case, the irrigation project was completed and has been in operation since
1976. The project is benefitting the farmers specifically and the community in general.
Obviously, the petitioner's land cannot be returned to him. However, it is high time that the
petitioner be paid what was due him eleven years ago. It is arbitrary and capricious for a
 CONSTI LAW10

government agency to initiate expropriation proceedings, seize a person's property, allow

the judgment of the court to become final and executory and then refuse to pay on the
ground that there are no appropriations for the property earlier taken and profitably used.
We condemn in the strongest possible terms the cavalier attitude of government officials
who adopt such a despotic and irresponsible stance.

WHEREFORE, the petition is hereby GRANTED. The decision and order of the respondent
appellate court dated November 25, 1987 and February 16, 1987 respectively are
ANNULLED and SET ASIDE. The Regional Trial Court of Iloilo City is ordered to immediately
execute the final judgment in Civil Case No. 10530 and effect payment of P200,000.00 as
just compensation deducting therefrom the partial payment already deposited by the
respondent at the institution of the action below with legal interest from September 21,
1985, plus P5,000.00 attorney's fees and P2,500.00 litigation expenses.

SO ORDERED.
Fernan, C.J., Feliciano, Bidin and Cortes, JJ., concur.
REPUBLIC VS CASTELLVI
G.R. No. L-20620
ZALDIVAR, J.
Appeal from the decision of the Court of First Instance of Pampanga in its Civil Case No.
1623, an expropriation proceeding.
Plaintiff-appellant, the Republic of the Philippines, (hereinafter referred to as the Republic)
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
(hereinafter referred to as Castellvi), over a parcel of land situated in the barrio of San Jose,
Floridablanca, Pampanga, described as follows:
A parcel of land, Lot No. 199-B Bureau of Lands Plan Swo 23666. Bounded on the NE by
Maria Nieves Toledo-Gozun; on the SE by national road; on the SW by AFP reservation, and
on the NW by AFP reservation. Containing an area of 759,299 square meters, more or less,
and registered in the name of Alfonso Castellvi under TCT No. 13631 of the Register of
Pampanga ...;
and against defendant-appellee Maria Nieves Toledo Gozun (hereinafter referred to as
Toledo-Gozun over two parcels of land described as follows:
A parcel of land (Portion Lot Blk-1, Bureau of Lands Plan Psd, 26254. Bounded on the NE by
Lot 3, on the SE by Lot 3; on the SW by Lot 1-B, Blk. 2 (equivalent to Lot 199-B Swo 23666;
on the NW by AFP military reservation. Containing an area of 450,273 square meters, more
or less and registered in the name of Maria Nieves Toledo-Gozun under TCT No. 8708 of the
Register of Deeds of Pampanga. ..., and
A parcel of land (Portion of lot 3, Blk-1, Bureau of Lands Plan Psd 26254. Bounded on the NE
by Lot No. 3, on the SE by school lot and national road, on the SW by Lot 1-B Blk 2
(equivalent to Lot 199-B Swo 23666), on the NW by Lot 1-B, Blk-1. Containing an area of
88,772 square meters, more or less, and registered in the name of Maria Nieves Toledo
Gozun under TCT No. 8708 of the Register of Deeds of Pampanga, ....
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
authorizes plaintiff to take immediate possession of the lands upon deposit of that amount
with the Provincial Treasurer of Pampanga; 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.
On June 29, 1959 the trial court issued an order fixing the provisional value of the lands at
P259,669.10.
In her "motion to dismiss" filed on July 14, 1959, Castellvi alleged, among other things, that
the land under her administration, being a residential land, had a fair market value of P15.00
 CONSTI LAW11

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 since July 1, 1956, 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 P15.00 per square meter, or a total of P11,389,485.00, plus
interest thereon at 6% per annum from July 1, 1956; that the Republic be ordered to pay her
P5,000,000.00 as unrealized profits, and the costs of the suit.
By order of the trial court, dated August, 1959, Amparo C. Diaz, Dolores G. viuda de Gil,
Paloma Castellvi, Carmen Castellvi, Rafael Castellvi, Luis Castellvi, Natividad Castellvi de
Raquiza, Jose Castellvi and Consuelo Castellvi were allowed to intervene as parties
defendants. Subsequently, Joaquin V. Gozun, Jr., husband of defendant Nieves Toledo Gozun,
was also allowed by the court to intervene as a party defendant.
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", dated October 22, 1959, Toledo-Gozun alleged, among other
things, that her two parcels of land were residential lands, in fact a portion with an area of
343,303 square meters had already been subdivided into different lots for sale to the
general public, and the remaining portion had already been set aside for expansion sites of
the already completed subdivisions; that the fair market value of said lands was P15.00 per
square meter, so they had a total market value of P8,085,675.00; and she prayed that the
complaint be dismissed, or that she be paid the amount of P8,085,675.00, plus interest
thereon at the rate of 6% per annum from October 13, 1959, and attorney's fees in the
amount of P50,000.00.
Intervenors Jose Castellvi and Consuelo Castellvi in their answer, filed on February 11, 1960,
and also intervenor Joaquin Gozun, Jr., husband of defendant Maria Nieves Toledo-Gozun, in
his motion to dismiss, dated May 27, 1960, all alleged that the value of the lands sought to
be expropriated was at the rate of P15.00 per square meter.
On November 4, 1959, the trial court authorized the Provincial Treasurer of Pampanga to pay
defendant Toledo-Gozun the sum of P107,609.00 as provisional value of her lands.2 On May
16, 1960 the trial Court authorized the Provincial Treasurer of Pampanga to pay defendant
Castellvi the amount of P151,859.80 as provisional value of the land under her
administration, and ordered said defendant to deposit the amount with the Philippine
National Bank under the supervision of the Deputy Clerk of Court. In another order of May
16, 1960 the trial Court entered an order of condemnation.3
The trial Court appointed three commissioners: Atty. Amadeo Yuzon, Clerk of Court, as
commissioner for the court; Atty. Felicisimo G. Pamandanan, counsel of the Philippine
National Bank Branch at Floridablanca, for the plaintiff; and Atty. Leonardo F. Lansangan,
Filipino legal counsel at Clark Air Base, for the defendants. The Commissioners, after having
qualified themselves, proceeded to the performance of their duties.
On March 15,1961 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; that an additional P5,000.00
be paid to Toledo-Gozun for improvements found on her land; that legal interest on the
compensation, computed from August 10, 1959, be paid after deducting the amounts
already paid to the owners, and that no consequential damages be awarded.4 The
Commissioners' report was objected to by all the parties in the case — by defendants
Castellvi and Toledo-Gozun, who insisted that the fair market value of their lands should be
fixed at P15.00 per square meter; and by the Republic, which insisted that the price to be
paid for the lands should be fixed at P0.20 per square meter.5
After the parties-defendants and intervenors had filed their respective memoranda, and the
Republic, after several extensions of time, had adopted as its memorandum its objections to
 CONSTI LAW12

the report of the Commissioners, 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.
xxx xxx xxx
The plaintiff will pay 6% interest per annum on the total value of the lands of defendant
Toledo-Gozun since (sic) the amount deposited as provisional value from August 10, 1959
until full payment is made to said defendant or deposit therefor is made in court.
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. The same rate of interest shall be paid
from July 11, 1959 on the total value of the land herein adjudged minus the amount
deposited as provisional value, or P151,859.80, such interest to run until full payment is
made to said defendant or deposit therefor is made in court. All the intervenors having failed
to produce evidence in support of their respective interventions, said interventions are
ordered dismissed.
The costs shall be charged to the plaintiff.
On June 21, 1961 the Republic filed a motion for a new trial and/or reconsideration, upon the
grounds of newly-discovered evidence, that the decision was not supported by the evidence,
and that the decision was against the law, against which motion defendants Castellvi and
Toledo-Gozun filed their respective oppositions. On July 8, 1961 when the motion of the
Republic for new trial and/or reconsideration was called for hearing, the Republic filed a
supplemental motion for new trial upon the ground of additional newly-discovered evidence.
This motion for new trial and/or reconsideration was denied by the court on July 12, 1961.
On July 17, 1961 the Republic gave notice of its intention to appeal from the decision of May
26, 1961 and the order of July 12, 1961. Defendant Castellvi also filed, on July 17, 1961, her
notice of appeal from the decision of the trial court.
The Republic filed various ex-parte motions for extension of time within which to file its
record on appeal. The Republic's record on appeal was finally submitted on December 6,
1961.

Defendants Castellvi and Toledo-Gozun filed not only a joint opposition to the approval of the
Republic's record on appeal, but also a joint memorandum in support of their opposition. The
Republic also filed a memorandum in support of its prayer for the approval of its record on
appeal. On December 27, 1961 the trial court issued an order declaring both the record on
appeal filed by the Republic, and the record on appeal filed by defendant Castellvi as having
been filed out of time, thereby dismissing both appeals.
On January 11, 1962 the Republic filed a "motion to strike out the order of December 27,
1961 and for reconsideration", and subsequently an amended record on appeal, against
which motion the defendants Castellvi and Toledo-Gozun filed their opposition. On July 26,
1962 the trial court issued an order, stating that "in the interest of expediency, the
questions raised may be properly and finally determined by the Supreme Court," and at the
same time it ordered the Solicitor General to submit a record on appeal containing copies of
orders and pleadings specified therein. In an order dated November 19, 1962, the trial court
approved the Republic's record on appeal as amended.
Defendant Castellvi did not insist on her appeal. Defendant Toledo-Gozun did not appeal.
The motion to dismiss the Republic's appeal was reiterated by appellees Castellvi and
Toledo-Gozun before this Court, but this Court denied the motion.
 CONSTI LAW13

In her motion of August 11, 1964, appellee Castellvi sought to increase the provisional value
of her land. The Republic, in its comment on Castellvi's motion, opposed the same. This
Court denied Castellvi's motion in a resolution dated October 2,1964.
The motion of appellees, Castellvi and Toledo-Gozun, dated October 6, 1969, praying that
they be authorized to mortgage the lands subject of expropriation, was denied by this Court
or October 14, 1969.
On February 14, 1972, Attys. Alberto Cacnio, and Associates, counsel for the estate of the
late Don Alfonso de Castellvi in the expropriation proceedings, filed a notice of attorney's
lien, stating that as per agreement with the administrator of the estate of Don Alfonso de
Castellvi they shall receive by way of attorney's fees, "the sum equivalent to ten per centum
of whatever the court may finally decide as the expropriated price of the property subject
matter of the case."
---------
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;
3. In ordering plaintiff-appellant to pay 6% interest on the adjudged value of the
Castellvi property to start from July of 1956;
4. In denying plaintiff-appellant's motion for new trial based on newly discovered
evidence.
In its brief, the Republic discusses the second error assigned as the first issue to be
considered. We shall follow the sequence of the Republic's discussion.
1. 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; and that the permanent improvements amounting to
more that half a million pesos constructed during a period of twelve years on the land,
subject of expropriation, were indicative of an agreed pattern of permanency and stability of
occupancy by the Philippine Air Force in the interest of national Security.7
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
Appellee Toledo-Gozun did not comment on the Republic's argument in support of the
second error assigned, because as far as she was concerned the Republic had not taken
possession of her lands prior to August 10, 1959.9
In order to better comprehend the issues raised in the appeal, in so far as the Castellvi
property is concerned, it should be noted that the Castellvi property had been occupied by
the Philippine Air Force since 1947 under a contract of lease, typified by the contract marked
Exh. 4-Castellvi, the pertinent portions of which read:
CONTRACT OF LEASE
This AGREEMENT OF LEASE MADE AND ENTERED into by and between INTESTATE ESTATE OF
ALFONSO DE CASTELLVI, represented by CARMEN M. DE CASTELLVI, Judicial Administratrix ...
hereinafter called the LESSOR and THE REPUBLIC OF THE PHILIPPINES represented by MAJ.
 CONSTI LAW14

GEN. CALIXTO DUQUE, Chief of Staff of the ARMED FORCES OF THE PHILIPPINES, hereinafter
called the LESSEE,
WITNESSETH:
1. For and in consideration of the rentals hereinafter reserved and the mutual terms,
covenants and conditions of the parties, the LESSOR has, and by these presents does, lease
and let unto the LESSEE the following described land together with the improvements
thereon and appurtenances thereof, viz:
Un Terreno, Lote No. 27 del Plano de subdivision Psu 34752, parte de la hacienda de
Campauit, situado en el Barrio de San Jose, Municipio de Floridablanca Pampanga. ...
midiendo una extension superficial de cuatro milliones once mil cuatro cientos trienta y
cinco (4,001,435) [sic] metros cuadrados, mas o menos.
Out of the above described property, 75.93 hectares thereof are actually occupied and
covered by this contract. .
Above lot is more particularly described in TCT No. 1016, province of Pampanga ...of which
premises, the LESSOR warrants that he/she/they/is/are the registered owner(s) and with full
authority to execute a contract of this nature.
2. The term of this lease shall be for the period beginning July 1, 1952 the date the
premises were occupied by the PHILIPPINE AIR FORCE, AFP until June 30, 1953, subject to
renewal for another year at the option of the LESSEE or unless sooner terminated by the
LESSEE as hereinafter provided.
3. The LESSOR hereby warrants that the LESSEE shall have quiet, peaceful and
undisturbed possession of the demised premises throughout the full term or period of this
lease and the LESSOR undertakes without cost to the LESSEE to eject all trespassers, but
should the LESSOR fail to do so, the LESSEE at its option may proceed to do so at the
expense of the LESSOR. The LESSOR further agrees that should he/she/they sell or
encumber all or any part of the herein described premises during the period of this lease,
any conveyance will be conditioned on the right of the LESSEE hereunder.
4. The LESSEE shall pay to the LESSOR as monthly rentals under this lease the sum of
FOUR HUNDRED FIFTY-FIVE PESOS & 58/100 (P455.58) ...
5. The LESSEE may, at any time prior to the termination of this lease, use the property
for any purpose or purposes and, at its own costs and expense make alteration, install
facilities and fixtures and errect additions ... which facilities or fixtures ... so placed in, upon
or attached to the said premises shall be and remain property of the LESSEE and may be
removed therefrom by the LESSEE prior to the termination of this lease. The LESSEE shall
surrender possession of the premises upon the expiration or termination of this lease and if
so required by the LESSOR, shall return the premises in substantially the same condition as
that existing at the time same were first occupied by the AFP, reasonable and ordinary wear
and tear and damages by the elements or by circumstances over which the LESSEE has no
control excepted: PROVIDED, that if the LESSOR so requires the return of the premises in
such condition, the LESSOR shall give written notice thereof to the LESSEE at least twenty
(20) days before the termination of the lease and provided, further, that should the LESSOR
give notice within the time specified above, the LESSEE shall have the right and privilege to
compensate the LESSOR at the fair value or the equivalent, in lieu of performance of its
obligation, if any, to restore the premises. Fair value is to be determined as the value at the
time of occupancy less fair wear and tear and depreciation during the period of this lease.
6. The LESSEE may terminate this lease at any time during the term hereof by giving
written notice to the LESSOR at least thirty (30) days in advance ...
7. The LESSEE should not be responsible, except under special legislation for any
damages to the premises by reason of combat operations, acts of GOD, the elements or
other acts and deeds not due to the negligence on the part of the LESSEE.

8. This LEASE AGREEMENT supersedes and voids any and all agreements and
undertakings, oral or written, previously entered into between the parties covering the
property herein leased, the same having been merged herein. This AGREEMENT may not be
modified or altered except by instrument in writing only duly signed by the parties. 10
 CONSTI LAW15

It was stipulated by the parties, that "the foregoing contract of lease (Exh. 4, Castellvi) is
'similar in terms and conditions, including the date', with the annual contracts entered into
from year to year between defendant Castellvi and the Republic of the Philippines (p. 17,
t.s.n., Vol. III)". 11 It is undisputed, therefore, that the Republic occupied Castellvi's land from
July 1, 1947, by virtue of the above-mentioned contract, on a year to year basis (from July 1
of each year to June 30 of the succeeding year) under the terms and conditions therein
stated.
Before the expiration of the contract of lease on June 30, 1956 the Republic sought to renew
the same but Castellvi refused. When the AFP refused to vacate the leased premises after
the termination of the contract, on July 11, 1956, Castellvi wrote to the Chief of Staff, AFP,
informing the latter that the heirs of the property had decided not to continue leasing the
property in question because they had decided to subdivide the land for sale to the general
public, demanding that the property be vacated within 30 days from receipt of the letter,
and that the premises be returned in substantially the same condition as before occupancy
(Exh. 5 — Castellvi). A follow-up letter was sent on January 12, 1957, demanding the
delivery and return of the property within one month from said date (Exh. 6 Castellvi). On
January 30, 1957, Lieutenant General Alfonso Arellano, Chief of Staff, answered the letter of
Castellvi, saying that it was difficult for the army to vacate the premises in view of the
permanent installations and other facilities worth almost P500, 000.00 that were erected and
already established on the property, and that, there being no other recourse, the acquisition
of the property by means of expropriation proceedings would be recommended to the
President (Exhibit "7" — Castellvi).
Defendant Castellvi then brought suit in the Court of First Instance of Pampanga, in Civil
Case No. 1458, 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, in an order which, in part, reads as follows:
1. Plaintiff has agreed, as a matter of fact has already signed an agreement with
defendants, whereby she has agreed to receive the rent of the lands, subject matter of the
instant case from June 30, 1966 up to 1959 when the Philippine Air Force was placed in
possession by virtue of an order of the Court upon depositing the provisional amount as
fixed by the Provincial Appraisal Committee with the Provincial Treasurer of Pampanga;
2. That because of the above-cited agreement wherein the administratrix decided to get
the rent corresponding to the rent from 1956 up to 1959 and considering that this action is
one of illegal detainer and/or to recover the possession of said land by virtue of non-
payment of rents, the instant case now has become moot and academic and/or by virtue of
the agreement signed by plaintiff, she has waived her cause of action in the above-entitled
case. 12
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
 CONSTI LAW16

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 word "momentary" when applied to possession or occupancy
of (real) property should be construed to mean "a limited period" — not indefinite or
permanent. 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. Intent is to be
deduced from the language employed by the parties, and the terms 'of the contract, when
unambiguous, as in the instant case, are conclusive in the absence of averment and proof of
mistake or fraud — the question being not what the intention was, but what is expressed in
the language used. (City of Manila v. Rizal Park Co., Inc., 53 Phil. 515, 525); Magdalena
Estate, Inc. v. Myrick, 71 Phil. 344, 348). Moreover, in order to judge the intention of the
contracting parties, their contemporaneous and subsequent acts shall be principally
considered (Art. 1371, Civil Code). If the intention of the lessee (Republic) in 1947 was really
to occupy permanently Castellvi's property, why was the contract of lease entered into on
year to year basis? Why was the lease agreement renewed from year to year? Why did not
the Republic expropriate this land of Castellvi in 1949 when, according to the Republic itself,
it expropriated the other parcels of land that it occupied at the same time as the Castellvi
land, for the purpose of converting them into a jet air base? 14 It might really have been the
intention of the Republic to expropriate the lands in question at some future time, but
certainly mere notice - much less an implied notice — of such intention on the part of the
Republic to expropriate the lands in the future did not, and could not, bind the landowner,
nor bind the land itself. The expropriation must be actually commenced in court (Republic vs.
Baylosis, et al., 96 Phil. 461, 484).
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.
 CONSTI LAW17

Untenable also is the Republic's contention that although the contract between the parties
was one of lease on a year to year basis, it was "in reality a more or less permanent right to
occupy the premises under the guise of lease with the 'right and privilege' to buy the
property should the lessor wish to terminate the lease," and "the right to buy the property is
merged as an integral part of the lease relationship ... so much so that the fair market value
has been agreed upon, not, as of the time of purchase, but as of the time of occupancy" 15
We cannot accept the Republic's contention that a lease on a year to year basis can give rise
to a permanent right to occupy, since by express legal provision a lease made for a
determinate time, as was the lease of Castellvi's land in the instant case, ceases upon the
day fixed, without need of a demand (Article 1669, Civil Code). Neither can it be said that
the right of eminent domain may be exercised by simply leasing the premises to be
expropriated (Rule 67, Section 1, Rules of Court). Nor can it be accepted that the Republic
would enter into a contract of lease where its real intention was to buy, or why the Republic
should enter into a simulated contract of lease ("under the guise of lease", as expressed by
counsel for the Republic) when all the time the Republic had the right of eminent domain,
and could expropriate Castellvi's land if it wanted to without resorting to any guise
whatsoever. Neither can we see how a right to buy could be merged in a contract of lease in
the absence of any agreement between the parties to that effect. To sustain the contention
of the Republic is to sanction a practice whereby in order to secure a low price for a land
which the government intends to expropriate (or would eventually expropriate) it would first
negotiate with the owner of the land to lease the land (for say ten or twenty years) then
expropriate the same when the lease is about to terminate, then claim that the "taking" of
the property for the purposes of the expropriation be reckoned as of the date when the
Government started to occupy the property under the lease, and then assert that the value
of the property being expropriated be reckoned as of the start of the lease, in spite of the
fact that the value of the property, for many good reasons, had in the meantime increased
during the period of the lease. This would be sanctioning what obviously is a deceptive
scheme, which would have the effect of depriving the owner of the property of its true and
fair market value at the time when the expropriation proceedings were actually instituted in
court. The Republic's claim that it had the "right and privilege" to buy the property at the
value that it had at the time when it first occupied the property as lessee nowhere appears
in the lease contract. What was agreed expressly in paragraph No. 5 of the lease agreement
was that, should the lessor require the lessee to return the premises in the same condition
as at the time the same was first occupied by the AFP, the lessee would have the "right and
privilege" (or option) of paying the lessor what it would fairly cost to put the premises in the
same condition as it was at the commencement of the lease, in lieu of the lessee's
performance of the undertaking to put the land in said condition. The "fair value" at the time
of occupancy, mentioned in the lease agreement, does not refer to the value of the property
if bought by the lessee, but refers to the cost of restoring the property in the same condition
as of the time when the lessee took possession of the property. Such fair value cannot refer
to the purchase price, for purchase was never intended by the parties to the lease contract.
It is a rule in the interpretation of contracts that "However general the terms of a contract
may be, they shall not be understood to comprehend things that are distinct and cases that
are different from those upon which the parties intended to agree" (Art. 1372, Civil Code).
We hold, therefore, that the "taking" of the Castellvi property should not be reckoned as of
the year 1947 when the Republic first occupied the same pursuant to the contract of lease,
and that the just compensation to be paid for the Castellvi property should not be
determined on the basis of the value of the property as of that year. The lower court did not
commit an error when it held that the "taking" of the property under expropriation
commenced with the filing of the complaint in this case.
Under Section 4 of Rule 67 of the Rules of Court, 16 the "just compensation" is to be
determined as of the date of the filing of the complaint. This Court has ruled that when the
taking of the property sought to be expropriated coincides with the commencement of the
expropriation proceedings, or takes place subsequent to the filing of the complaint for
eminent domain, the just compensation should be determined as of the date of the filing of
 CONSTI LAW18

the complaint. (Republic vs. Philippine National Bank, L-14158, April 12, 1961, 1 SCRA 957,
961-962). In the instant case, it is undisputed that the Republic was placed in possession of
the Castellvi property, by authority of the court, on August 10, 1959. The "taking" of the
Castellvi property for the purposes of determining the just compensation to be paid must,
therefore, be reckoned as of June 26, 1959 when the complaint for eminent domain was
filed.
Regarding the two parcels of land of Toledo-Gozun, also sought to be expropriated, which
had never been under lease to the Republic, the Republic was placed in possession of said
lands, also by authority of the court, on August 10, 1959, The taking of those lands,
therefore, must also be reckoned as of June 26, 1959, the date of the filing of the complaint
for eminent domain.
2. Regarding the first assigned error — discussed as the second issue — the Republic
maintains that, even assuming that the value of the expropriated lands is to be determined
as of June 26, 1959, the price of P10.00 per square meter fixed by the lower court "is not
only exhorbitant but also unconscionable, and almost fantastic". On the other hand, both
Castellvi and Toledo-Gozun maintain that their lands are residential lands with a fair market
value of not less than P15.00 per square meter.
The lower court found, and declared, that the lands of Castellvi and Toledo-Gozun are
residential lands. The finding of the lower court is in consonance with the unanimous opinion
of the three commissioners who, in their report to the court, declared that the lands are
residential lands.
The Republic assails the finding that the lands are residential, contending that the plans of
the appellees to convert the lands into subdivision for residential purposes were only on
paper, there being no overt acts on the part of the appellees which indicated that the
subdivision project had been commenced, so that any compensation to be awarded on the
basis of the plans would be speculative. The Republic's contention is not well taken. We find
evidence showing that the lands in question had ceased to be devoted to the production of
agricultural crops, that they had become adaptable for residential purposes, and that the
appellees had actually taken steps to convert their lands into residential subdivisions even
before the Republic filed the complaint for eminent domain. In the case of City of Manila vs.
Corrales (32 Phil. 82, 98) this Court laid down basic guidelines in determining the value of
the property expropriated for public purposes. This Court said:
In determining the value of land appropriated for public purposes, the same consideration
are to be regarded as in a sale of property between private parties. The inquiry, in such
cases, must be what is the property worth in the market, viewed not merely with reference
to the uses to which it is at the time applied, but with reference to the uses to which it is
plainly adapted, that is to say, What is it worth from its availability for valuable uses?
So many and varied are the circumstances to be taken into account in determining the value
of property condemned for public purposes, that it is practically impossible to formulate a
rule to govern its appraisement in all cases. Exceptional circumstances will modify the most
carefully guarded rule, but, as a general thing, we should say that the compensation of the
owner is to be estimated by reference to the use for which the property is suitable, having
regard to the existing business or wants of the community, or such as may be reasonably
expected in the immediate future. (Miss. and Rum River Boom Co. vs. Patterson, 98 U.S.,
403).
In expropriation proceedings, therefore, the owner of the land has the right to its value for
the use for which it would bring the most in the market. 17 The owner may thus show every
advantage that his property possesses, present and prospective, in order that the price it
could be sold for in the market may be satisfactorily determined. 18 The owner may also
show that the property is suitable for division into village or town lots. 19
The trial court, therefore, correctly considered, among other circumstances, the proposed
subdivision plans of the lands sought to be expropriated in finding that those lands are
residential lots. This finding of the lower court is supported not only by the unanimous
opinion of the commissioners, as embodied in their report, but also by the Provincial
Appraisal Committee of the province of Pampanga composed of the Provincial Treasurer, the
 CONSTI LAW19

Provincial Auditor and the District Engineer. In the minutes of the meeting of the Provincial
Appraisal Committee, held on May 14, 1959 (Exh. 13-Castellvi) We read in its Resolution No.
10 the following:
3. Since 1957 the land has been classified as residential in view of its proximity to the
air base and due to the fact that it was not being devoted to agriculture. In fact, there is a
plan to convert it into a subdivision for residential purposes. The taxes due on the property
have been paid based on its classification as residential land;
The evidence shows that Castellvi broached the idea of subdividing her land into residential
lots as early as July 11, 1956 in her letter to the Chief of Staff of the Armed Forces of the
Philippines. (Exh. 5-Castellvi) As a matter of fact, the layout of the subdivision plan was
tentatively approved by the National Planning Commission on September 7, 1956. (Exh. 8-
Castellvi). The land of Castellvi had not been devoted to agriculture since 1947 when it was
leased to the Philippine Army. In 1957 said land was classified as residential, and taxes
based on its classification as residential had been paid since then (Exh. 13-Castellvi). The
location of the Castellvi land justifies its suitability for a residential subdivision. As found by
the trial court, "It is at the left side of the entrance of the Basa Air Base and bounded on two
sides by roads (Exh. 13-Castellvi), paragraphs 1 and 2, Exh. 12-Castellvi), the poblacion, (of
Floridablanca) the municipal building, and the Pampanga Sugar Mills are closed by. The
barrio schoolhouse and chapel are also near (T.S.N. November 23,1960, p. 68)." 20
The lands of Toledo-Gozun (Lot 1-B and Lot 3) are practically of the same condition as the
land of Castellvi. The lands of Toledo-Gozun adjoin the land of Castellvi. They are also
contiguous to the Basa Air Base, and are along the road. These lands are near the barrio
schoolhouse, the barrio chapel, the Pampanga Sugar Mills, and the poblacion of
Floridablanca (Exhs. 1, 3 and 4-Toledo-Gozun). As a matter of fact, regarding lot 1-B it had
already been surveyed and subdivided, and its conversion into a residential subdivision was
tentatively approved by the National Planning Commission on July 8, 1959 (Exhs. 5 and 6
Toledo-Gozun). As early as June, 1958, no less than 32 man connected with the Philippine Air
Force among them commissioned officers, non-commission officers, and enlisted men had
requested Mr. and Mrs. Joaquin D. Gozun to open a subdivision on their lands in question
(Exhs. 8, 8-A to 8-ZZ-Toledo-Gozun). 21
We agree with the findings, and the conclusions, of the lower court that the lands that are
the subject of expropriation in the present case, as of August 10, 1959 when the same were
taken possession of by the Republic, were residential lands and were adaptable for use as
residential subdivisions. Indeed, the owners of these lands have the right to their value for
the use for which they would bring the most in the market at the time the same were taken
from them. The most important issue to be resolved in the present case relates to the
question of what is the just compensation that should be paid to the appellees.
The Republic asserts that the fair market value of the lands of the appellees is P.20 per
square meter. The Republic cites the case of Republic vs. Narciso, et al., L-6594, which this
Court decided on May 18, 1956. The Narciso case involved lands that belonged to Castellvi
and Toledo-Gozun, and to one Donata Montemayor, which were expropriated by the Republic
in 1949 and which are now the site of the Basa Air Base. In the Narciso case this Court fixed
the fair market value at P.20 per square meter. The lands that are sought to be expropriated
in the present case being contiguous to the lands involved in the Narciso case, it is the stand
of the Republic that the price that should be fixed for the lands now in question should also
be at P.20 per square meter.
We cannot sustain the stand of the Republic. We find that the price of P.20 per square meter,
as fixed by this Court in the Narciso case, was based on the allegation of the defendants
(owners) in their answer to the complaint for eminent domain in that case that the price of
their lands was P2, 000.00 per hectare and that was the price that they asked the court to
pay them. This Court said, then, that the owners of the land could not be given more than
what they had asked, notwithstanding the recommendation of the majority of the
Commission on Appraisal — which was adopted by the trial court — that the fair market
value of the lands was P3, 000.00 per hectare. We also find that the price of P.20 per square
meter in the Narciso case was considered the fair market value of the lands as of the year
 CONSTI LAW20

1949 when the expropriation proceedings were instituted, and at that time the lands were
classified as sugar lands, and assessed for taxation purposes at around P400.00 per hectare,
or P.04 per square meter. 22 While the lands involved in the present case, like the lands
involved in the Narciso case, might have a fair market value of P.20 per square meter in
1949, it cannot be denied that ten years later, in 1959, when the present proceedings were
instituted, the value of those lands had increased considerably. The evidence shows that
since 1949 those lands were no longer cultivated as sugar lands, and in 1959 those lands
were already classified, and assessed for taxation purposes, as residential lands. In 1959 the
land of Castellvi was assessed at P1.00 per square meter. 23
The Republic also points out that the Provincial Appraisal Committee of Pampanga, in its
resolution No. 5 of February 15, 1957 (Exhibit D), recommended the sum of P.20 per square
meter as the fair valuation of the Castellvi property. We find that this resolution was made by
the Republic the basis in asking the court to fix the provisional value of the lands sought to
be expropriated at P259, 669.10, which was approved by the court. 24 It must be
considered, however, that the amount fixed as the provisional value of the lands that are
being expropriated 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. The records show that this
resolution No. 5 was repealed by the same Provincial Committee on Appraisal in its
resolution No. 10 of May 14, 1959 (Exhibit 13-Castellvi). In that resolution No. 10, the
appraisal committee stated that "The Committee has observed that the value of the land in
this locality has increased since 1957 ...", and recommended the price of P1.50 per square
meter. It follows, therefore, that, contrary to the stand of the Republic, that resolution No. 5
of the Provincial Appraisal Committee cannot be made the basis for fixing the fair market
value of the lands of Castellvi and Toledo-Gozun.
The Republic further relied on the certification of the Acting Assistant Provincial Assessor of
Pampanga, dated February 8, 1961 (Exhibit K), to the effect that in 1950 the lands of Toledo-
Gozun were classified partly as sugar land and partly as urban land, and that the sugar land
was assessed at P.40 per square meter, while part of the urban land was assessed at P.40
per square meter and part at P.20 per square meter; and that in 1956 the Castellvi land was
classified as sugar land and was assessed at P450.00 per hectare, or P.045 per square meter.
We cannot also consider this certification of the Acting Assistant Provincial Assessor as a
basis for fixing the fair market value of the lands of Castellvi and Toledo-Gozun because, as
the evidence shows, the lands in question, in 1957, were already classified and assessed for
taxation purposes as residential lands. The certification of the assessor refers to the year
1950 as far as the lands of Toledo-Gozun are concerned, and to the year 1956 as far as the
land of Castellvi is concerned. Moreover, this Court has held that the valuation fixed for the
purposes of the assessment of the land for taxation purposes cannot bind the landowner
where the latter did not intervene in fixing it. 25
On the other hand, the Commissioners, appointed by the court to appraise the lands that
were being expropriated, recommended to the court that the price of P10.00 per square
meter would be the fair market value of the lands. The commissioners made their
recommendation on the basis of their observation after several ocular inspections of the
lands, of their own personal knowledge of land values in the province of Pampanga, of the
testimonies of the owners of the land, and other witnesses, and of documentary evidence
presented by the appellees. Both Castellvi and Toledo-Gozun testified that the fair market
value of their respective land was at P15.00 per square meter. The documentary evidence
considered by the commissioners consisted of deeds of sale of residential lands in the town
of San Fernando and in Angeles City, in the province of Pampanga, which were sold at prices
ranging from P8.00 to P20.00 per square meter (Exhibits 15, 16, 17, 18, 19, 20, 21, 22, 23-
Castellvi). The commissioners also considered the decision in Civil Case No. 1531 of the
Court of First Instance of Pampanga, entitled Republic vs. Sabina Tablante, which was
expropriation case filed on January 13, 1959, involving a parcel of land adjacent to the Clark
Air Base in Angeles City, where the court fixed the price at P18.00 per square meter (Exhibit
14-Castellvi). In their report, the commissioners, among other things, said:
 CONSTI LAW21

... This expropriation case is specially pointed out, because the circumstances and factors
involved therein are similar in many respects to the defendants' lands in this case. The land
in Civil Case No. 1531 of this Court and the lands in the present case (Civil Case No. 1623)
are both near the air bases, the Clark Air Base and the Basa Air Base respectively. There is a
national road fronting them and are situated in a first-class municipality. As added
advantage it may be said that the Basa Air Base land is very near the sugar mill at Del
Carmen, Floridablanca, Pampanga, owned by the Pampanga Sugar Mills. Also just stone's
throw away from the same lands is a beautiful vacation spot at Palacol, a sitio of the town of
Floridablanca, which counts with a natural swimming pool for vacationists on weekends.
These advantages are not found in the case of the Clark Air Base. The defendants' lands are
nearer to the poblacion of Floridablanca then Clark Air Base is nearer (sic) to the poblacion
of Angeles, Pampanga.
The deeds of absolute sale, according to the undersigned commissioners, as well as the land
in Civil Case No. 1531 are competent evidence, because they were executed during the year
1959 and before August 10 of the same year. More specifically so the land at Clark Air Base
which coincidentally is the subject matter in the complaint in said Civil Case No. 1531, it
having been filed on January 13, 1959 and the taking of the land involved therein was
ordered by the Court of First Instance of Pampanga on January 15, 1959, several months
before the lands in this case were taken by the plaintiffs ....
From the above and considering further that the lowest as well as the highest price per
square meter obtainable in the market of Pampanga relative to subdivision lots within its
jurisdiction in the year 1959 is very well known by the Commissioners, the Commission finds
that the lowest price that can be awarded to the lands in question is P10.00 per square
meter. 26
The lower court did not altogether accept the findings of the Commissioners based on the
documentary evidence, but it considered the documentary evidence as basis for comparison
in determining land values. The lower court arrived at the conclusion 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". 27 In arriving at its conclusion,
the lower court took into consideration, among other circumstances, that the lands are
titled, that there is a rising trend of land values, and the lowered purchasing power of the
Philippine peso.
In the case of Manila Railroad Co. vs. Caligsihan, 40 Phil. 326, 328, this Court said:
A court of first instance or, on appeal, the Supreme Court, may change or modify the report
of the commissioners by increasing or reducing the amount of the award if the facts of the
case so justify. While great weight is attached to the report of the commissioners, yet a court
may substitute therefor its estimate of the value of the property as gathered from the record
in certain cases, as, where the commissioners have applied illegal principles to the evidence
submitted to them, or where they have disregarded a clear preponderance of evidence, or
where the amount allowed is either palpably inadequate or excessive. 28
The report of the commissioners of appraisal in condemnation proceedings are not binding,
but merely advisory in character, as far as the court is concerned. 29 In our analysis of the
report of the commissioners, We find points that merit serious consideration in the
determination of the just compensation that should be paid to Castellvi and Toledo-Gozun for
their lands. It should be noted that the commissioners had made ocular inspections of the
lands and had considered the nature and similarities of said lands in relation to the lands in
other places in the province of Pampanga, like San Fernando and Angeles City. We cannot
disregard the observations of the commissioners regarding the circumstances that make the
lands in question suited for residential purposes — their location near the Basa Air Base, just
like the lands in Angeles City that are near the Clark Air Base, and the facilities that obtain
because of their nearness to the big sugar central of the Pampanga Sugar mills, and to the
flourishing first class town of Floridablanca. It is true that the lands in question are not in the
territory of San Fernando and Angeles City, but, considering the facilities of modern
communications, the town of Floridablanca may be considered practically adjacent to San
Fernando and Angeles City. It is not out of place, therefore, to compare the land values in
 CONSTI LAW22

Floridablanca to the land values in San Fernando and Angeles City, and form an idea of the
value of the lands in Floridablanca with reference to the land values in those two other
communities.
The important factor in expropriation proceeding is that the owner is awarded the just
compensation for his property. We have carefully studied the record, and the evidence, in
this case, and after considering the circumstances attending the lands in question We have
arrived at the conclusion that the price of P10.00 per square meter, as recommended by the
commissioners and adopted by the lower court, is quite high. It is Our considered view that
the price of P5.00 per square meter would be a fair valuation of the lands in question and
would constitute a just compensation to the owners thereof. In arriving at this conclusion We
have particularly taken into consideration the resolution of the Provincial Committee on
Appraisal of the province of Pampanga informing, among others, that in the year 1959 the
land of Castellvi could be sold for from P3.00 to P4.00 per square meter, while the land of
Toledo-Gozun could be sold for from P2.50 to P3.00 per square meter. The Court has
weighed all the circumstances relating to this expropriations proceedings, and in fixing the
price of the lands that are being expropriated the Court arrived at a happy medium between
the price as recommended by the commissioners and approved by the court, and the price
advocated by the Republic. This Court has also taken judicial notice of the fact that the value
of the Philippine peso has considerably gone down since the year 1959. 30 Considering that
the lands of Castellvi and Toledo-Gozun are adjoining each other, and are of the same
nature, the Court has deemed it proper to fix the same price for all these lands.
3. The third issue raised by the Republic relates to the payment of interest. The Republic
maintains that the lower court erred when it ordered the Republic to pay Castellvi interest at
the rate of 6% per annum on the total amount adjudged as the value of the land of Castellvi,
from July 1, 1956 to July 10, 1959. We find merit in this assignment of error.
In ordering the Republic to pay 6% interest on the total value of the land of Castellvi from
July 1, 1956 to July 10, 1959, the lower court held that the Republic had illegally possessed
the land of Castellvi from July 1, 1956, after its lease of the land had expired on June 30,
1956, until August 10, 1959 when the Republic was placed in possession of the land
pursuant to the writ of possession issued by the court. What really happened was that the
Republic continued to occupy the land of Castellvi after the expiration of its lease on June 30,
1956, so much so that Castellvi filed an ejectment case against the Republic in the Court of
First Instance of Pampanga. 31 However, while that ejectment case was pending, the
Republic filed the complaint for eminent domain in the present case and was placed in
possession of the land on August 10, 1959, and because of the institution of the
expropriation proceedings the ejectment case was later dismissed. In the order dismissing
the ejectment case, the Court of First Instance of Pampanga said:
Plaintiff has agreed, as a matter of fact has already signed an agreement with defendants,
whereby she had agreed to receive the rent of the lands, subject matter of the instant case
from June 30, 1956 up to 1959 when the Philippine Air Force was placed in possession by
virtue of an order of the Court upon depositing the provisional amount as fixed by the
Provincial Appraisal Committee with the Provincial Treasurer of
Pampanga; ...
If Castellvi had agreed to receive the rentals from June 30, 1956 to August 10, 1959, she
should be considered as having allowed her land to be leased to the Republic until August
10, 1959, and she could not at the same time be entitled to the payment of interest during
the same period on the amount awarded her as the just compensation of her land. The
Republic, therefore, should pay Castellvi interest at the rate of 6% per annum on the value
of her land, minus the provisional value that was deposited, only from July 10, 1959 when it
deposited in court the provisional value of the land.
4. The fourth error assigned by the Republic relates to the denial by the lower court of
its motion for a new trial based on nearly discovered evidence. We do not find merit in this
assignment of error.
After the lower court had decided this case on May 26, 1961, the Republic filed a motion for
a new trial, supplemented by another motion, both based upon the ground of newly
 CONSTI LAW23

discovered evidence. The alleged newly discovered evidence in the motion filed on June 21,
1961 was a deed of absolute sale-executed on January 25, 1961, showing that a certain
Serafin Francisco had sold to Pablo L. Narciso a parcel of sugar land having an area of
100,000 square meters with a sugar quota of 100 piculs, covered by P.A. No. 1701, situated
in Barrio Fortuna, Floridablanca, for P14,000, or P.14 per square meter.
In the supplemental motion, the alleged newly discovered evidence were: (1) a deed of sale
of some 35,000 square meters of land situated at Floridablanca for P7,500.00 (or about P.21
per square meter) executed in July, 1959, by the spouses Evelyn D. Laird and Cornelio G.
Laird in favor of spouses Bienvenido S. Aguas and Josefina Q. Aguas; and (2) a deed of
absolute sale of a parcel of land having an area of 4,120,101 square meters, including the
sugar quota covered by Plantation Audit No. 161 1345, situated at Floridablanca, Pampanga,
for P860.00 per hectare (a little less than P.09 per square meter) executed on October 22,
1957 by Jesus Toledo y Mendoza in favor of the Land Tenure Administration.
We find that the lower court acted correctly when it denied the motions for a new trial.
To warrant the granting of a new trial based on the ground of newly discovered evidence, it
must appear that the evidence was discovered after the trial; that even with the exercise of
due diligence, the evidence could not have been discovered and produced at the trial; and
that the evidence is of such a nature as to alter the result of the case if admitted. 32 The
lower court correctly ruled that these requisites were not complied with.
The lower court, in a well-reasoned order, found that the sales made by Serafin Francisco to
Pablo Narciso and that made by Jesus Toledo to the Land Tenure Administration were
immaterial and irrelevant, because those sales covered sugarlands with sugar quotas, while
the lands sought to be expropriated in the instant case are residential lands. The lower court
also concluded that the land sold by the spouses Laird to the spouses Aguas was a sugar
land.
We agree with the trial court. In eminent domain proceedings, in order that evidence as to
the sale price of other lands may be admitted in evidence to prove the fair market value of
the land sought to be expropriated, the lands must, among other things, be shown to be
similar.
But even assuming, gratia argumenti, that the lands mentioned in those deeds of sale were
residential, the evidence would still not warrant the grant of a new trial, for said evidence
could have been discovered and produced at the trial, and they cannot be considered newly
discovered evidence as contemplated in Section 1(b) of Rule 37 of the Rules of Court.
Regarding this point, the trial court said:
The Court will now show that there was no reasonable diligence employed.
The land described in the deed of sale executed by Serafin Francisco, copy of which is
attached to the original motion, is covered by a Certificate of Title issued by the Office of the
Register of Deeds of Pampanga. There is no question in the mind of the court but this
document passed through the Office of the Register of Deeds for the purpose of transferring
the title or annotating the sale on the certificate of title. It is true that Fiscal Lagman went to
the Office of the Register of Deeds to check conveyances which may be presented in the
evidence in this case as it is now sought to be done by virtue of the motions at bar, Fiscal
Lagman, one of the lawyers of the plaintiff, did not exercise reasonable diligence as required
by the rules. The assertion that he only went to the office of the Register of Deeds 'now and
then' to check the records in that office only shows the half-hazard [sic] manner by which
the plaintiff looked for evidence to be presented during the hearing before the
Commissioners, if it is at all true that Fiscal Lagman did what he is supposed to have done
according to Solicitor Padua. It would have been the easiest matter for plaintiff to move for
the issuance of a subpoena duces tecum directing the Register of Deeds of Pampanga to
come to testify and to bring with him all documents found in his office pertaining to sales of
land in Floridablanca adjacent to or near the lands in question executed or recorded from
1958 to the present. Even this elementary precaution was not done by plaintiff's numerous
attorneys.
The same can be said of the deeds of sale attached to the supplementary motion. They refer
to lands covered by certificate of title issued by the Register of Deeds of Pampanga. For the
 CONSTI LAW24

same reason they could have been easily discovered if reasonable diligence has been
exerted by the numerous lawyers of the plaintiff in this case. It is noteworthy that all these
deeds of sale could be found in several government offices, namely, in the Office of the
Register of Deeds of Pampanga, the Office of the Provincial Assessor of Pampanga, the Office
of the Clerk of Court as a part of notarial reports of notaries public that acknowledged these
documents, or in the archives of the National Library. In respect to Annex 'B' of the
supplementary motion copy of the document could also be found in the Office of the Land
Tenure Administration, another government entity. Any lawyer with a modicum of ability
handling this expropriation case would have right away though [sic] of digging up
documents diligently showing conveyances of lands near or around the parcels of land
sought to be expropriated in this case in the offices that would have naturally come to his
mind such as the offices mentioned above, and had counsel for the movant really exercised
the reasonable diligence required by the Rule' undoubtedly they would have been able to
find these documents and/or caused the issuance of subpoena duces tecum. ...
It is also recalled that during the hearing before the Court of the Report and
Recommendation of the Commissioners and objection thereto, Solicitor Padua made the
observation:
I understand, Your Honor, that there was a sale that took place in this place of land recently
where the land was sold for P0.20 which is contiguous to this land.
The Court gave him permission to submit said document subject to the approval of the
Court. ... This was before the decision was rendered, and later promulgated on May 26, 1961
or more than one month after Solicitor Padua made the above observation. He could have,
therefore, checked up the alleged sale and moved for a reopening to adduce further
evidence. He did not do so. He forgot to present the evidence at a more propitious time.
Now, he seeks to introduce said evidence under the guise of newly-discovered evidence.
Unfortunately the Court cannot classify it as newly-discovered evidence, because tinder the
circumstances, the correct qualification that can be given is 'forgotten evidence'. Forgotten
however, is not newly-discovered evidence.
The granting or denial of a motion for new trial is, as a general rule, discretionary with the
trial court, whose judgment should not be disturbed unless there is a clear showing of abuse
of discretion. We do not see any abuse of discretion on the part of the lower court when it
denied the motions for a new trial.
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.
 CONSTI LAW25

IGNACIO VS GUERREO
G.R. No. L-45144
GANCAYCO, J.:
In this petition for certiorari and mandamus, petitioners seek to nullify a decision of the
Court of First Instance of Cebu dated October 6, 1975 in an action for eminent domain, the
dispositive part of which reads as follows:
WHEREFORE, in view of the foregoing considerations, the Court hereby renders judgment, to
wit:
1. Declaring the City Government of Toledo City entitled to the possession and use of
the properties and subject matter of this expropriation proceedings and as specified in
Paragraphs IV and V of the complaint, with the right to establish, construct and maintain an
extension of the Poloyapoy Street in Toledo City in accordance with the Sketch Plan, Exh. "F";
2. Ordering plaintiff, the City of Toledo, to pay defendants, by way of just compensation,
the following sums, as indicated hereunder, to wit:
a) Floro Espina P94,020.00
b) Filomeno Trocio 7,260.00
c) Ramona Valdivia 11,730.00
d) Spouses Fructouso Sigue and Maria Bacalso and Lourdes Canonigo 12,000.00
3. Ordering plaintiff to pay defendants interest at the rate of 6% per annum from the date of
the filing of the complaint until the aforesaid sums shall have been fully paid. Without costs.
This involves an expropriation proceeding covering several parcels of land belonging to
private respondents initiated by petitioner wherein pursuant to P.D. No. 42 the amount of
P33,060.00 was deposited with the Philippine National Bank, Toledo Branch, by petitioner. 1
A pre-trial conference was undertaken presided by the respondent judge with all the parties
present and on the basis of what transpired in the conference he rendered a judgment. 2
Petitioner alleges that the respondent judge committed a grave abuse of discretion and
acted without jurisdiction when he denied its motion for reconsideration of the judgment,
issued an order for a writ of execution on March 25,1976, and that said writ of execution was
enforced by the garnishment of the deposit of petitioner earmarked for infrastructure in the
amount of P132,927.20 as shown by a receipt issued by the sheriff to the Philippine National
Bank of Toledo sub-branch. 3
Anent the first issue, petitioner contends that the appraisal of the properties being
expropriated by petitioner should be based on the current and fair market value declared by
the owners or administrator or such market value as determined by the assessor or
whichever is lower as provided for under P.D. No. 76. Petitioner argues that the assessed
value of the lots are much lower than the appraised value of P30.00 per square meter which
was adopted by the trial court.
P. D. No. 1533 which is the latest decree related to P.D. No. 76 had been struck down as null
and void by this Court in this case of Export Processing Zone Authority vs. Dulay. 4
We held in that case that:
The determination of just compensation" in the eminent domain cases is a judicial function.
The executive department or the legislature may make the initial determinations but when a
 CONSTI LAW26

party claims a violation of the guarantee in the Bill of Rights that private property may not
be taken for public use without just compensation, no statute, decree, or executive order can
mandate that its own determination shall prevail over the court's findings. Much less can the
courts be precluded from looking into the "justness" of the decreed compensation.
We, therefore, hold that P.D. No. 1533, which eliminates the court's discretion to appoint
commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional and void. To
hold otherwise would be to undermine the very purpose why to Court exists in the first
place.
What governs, therefore, in the ascertainment of just compensation in eminent domain
proceedings is Rule 67 of the Rules of Court and not P.D. No. 76 and other related decrees,
P.D. Nos. 464, 794, 1224, 1259, 1313 and 1533. 5
In the pre-trial conference that was held, the parties presented their respective positions in
the case. The petitioner through the City Mayor submitted itself to the discretion of the court
as to the correct evaluation. Private respondents stated that they have no objection and
were in conformity that the reasonable price of their land should be P30.00 per square
meter. The City Assessor informed the Court of the current market value and appraisal value
of properties in the area and the factors to be considered in the determination of their value.
On the basis of the evidence adduced, the trial court arrived at the following findings:
After a careful study of the record of the case, together with all the documents presented by
the parties, the Court is of the considered view that the parcels of land being traversed by
the extension of the Poloyapoy street which is about 60 to 1 00 meters behind the National
Highway and about 500 meters from the Atlas Fertilizer industrial complex at Sangi, Toledo
City and taking into account the condition and location of the place, the topography, the
improvements such as coconut trees and rice paddies, the present global trend of soaring
prices of commodities and services, the Court sincerely believes that the fair and reasonable
market value of the lands of the defendants should be fixed at the rate of Thirty Pesos
(P30.00) per square meter.
In arriving at this conclusion the Court has taken into account the various instances where
the City Government of Toledo bought and paid for lands taken for roads, streets, and other
public purposes at prices ranging from P20.00 to P43.00 per square meter; that in 1971, the
land of Engineer Cavada which is one of those traversed by the Poloyapoy street extension
and one of the properties similarly situated as those lands of the defendants herein, was
bought at the price of P25.00 per square meter; that in June 1971 the City of Toledo also
bought the land of Rosalia Katungan, situated at the poblacion of Toledo City, at P39.00 per
square meter (Exh. "2"); that the Barrio of Sangi, Toledo City bought and paid the land of
Lorenzo Tabelin situated at Sangi, Toledo City, at P40.00 per square meter (Exh. "3"). In a
private transaction of absolute sale, one Julian Tabanag bought and paid the land of Gabriel
Trocio located at Luray, Toledo City (Poblacion), at P38.58 per square meter (Exh. "l"). In a
decision of this Court in Civil Case No. 500, penned by Judge Alfredo Marigomen, the Court
fixed the price of the land of Esperanza Trocio Vda. de Garcia, located at the national road
adjacent to the At" as Fertilizer industrial complex at Sangi, Toledo City, at P43.83 (Exh. "4").
In another case, Civil Case No. 286-T, this Court fixed the price of the land of the Heirs of
Patricio de la Cerna, situated at the poblacion of Toledo City, about 60 meters from the
Central School building and about 300 meters from the Atlas Fertilizer industrial complex, at
P38.00 per square meter.
The Court has taken further into consideration the various factors necessarily affecting the
rise of prices of parcels of land in the poblacion or in the interior part of the poblacion of
Toledo City, which are as follows:
1.) the location of the Atlas Fertilizer Corporation industrial complex at Sangi, Toledo City
which was established before Toledo City became a City in 1961;
2.) the location of the properties in relation to the Atlas Fertilizer Corporation industrial
complex;
3.) accessibility or proximity of the public towards the school zone or the city
government;
4.) the improvements found in the properties;
 CONSTI LAW27

5.) the purpose for which the property is taken by the city government;
6.) the various transactions involving properties adjacent to or similarly situated as the
parcels of land involved in this case.
7.) the prevailing price and general trend of the continuously rising prices of fuel, oils,
gasoline or other goods in the market, products of the factory, agriculture and the industrial
as well as the various services rendered by the professions (such as doctors, lawyers,
engineers), hospitals, schools, etc.
While the lands in question are classified as cocal or agricultural, according to their tax
declarations, yet, the Court considers these properties as situated within the industrial zone
of the City of Toledo, the same being within the poblacion of Toledo City; the proposed
extension of the Poloyapoy St. being only around 60 to 100 meters to the national highway,
around 300 meters to the Atlas Fertilizer industrial complex zone. Hence, the court has come
to the unhesitating conclusion that the fair market value of the parcels of land in question
shall be fixed at the rate of P30.00 per square meter.
From the foregoing, it is clear that contrary to the claim of petitioner that no evidence was
adduced during the pre-trial conference, what the records show is that such evidence was
received which was the basis of the finding of the court a quo as to the reasonable price of
the property of private respondents being expropriated .i. e. P30.00 per square meter. Such
finding of the court will not be disturbed on appeal unless a clear error or grave abuse of
discretion has been demonstrated.
Clearly, the judgment of the court a quo is supported by the evidence and the applicable
law.
WHEREFORE, the petition is DISMISSED for lack of merit, without pronouncement as to costs.
SO ORDERED.

Garcia vs. Court of Appeals, 102 SCRA 597, No. L-47553, January 31, 1981

FERNANDEZ, J.:
This is a petition for certiorari instituted by Jane L. Garcia, Mayorico P. Sandico, Belen R.
Garcia, and Danilo Diokno against the Court of Appeals (Special Tenth Division), and the
National Power Corporation seeking the following relief :
WHEREFORE, premises considered, it is most respectfully prayed of the Court:
1. That the Decision of the Court of Appeals respecting Block 19, wherein it has adjudged
private respondent entitled to acquire title and ownership over the property by paying a
compensation of PO.07 per square meter be reversed and that the Decision of the Court of
First Instance of Pampanga adjudging the private respondent to compensate herein
petitioners for Block 19 in the amount of P15.00 per square meter with interest at the legal
rate from June 30, 1954 be upheld:
2. That, in the alternative to the petition next preceding, the private respondent be adjudged
to pay rentals for the use of Block 19 at the rate of P2.00 per square meter per annum from
June 30, 1954 until the same is vacated by it;
Petitioners further pray for such other reliefs as may be just and equitable in the premises.
Quezon City for Manila, Philippines, January 31, 1978. 1
The record discloses that on August 8, 1969, the private respondent National Power
Corporation filed a complaint for eminent domain with the Court of First Instance of
Pampanga, Branch Five, docketed as Civil Case No. 3584 2 praying that it be allowed to
acquire right of way easements over the property of petitioners consisting of two adjoining
parcels of land (Lots Nos. 633 and 634) with a total area of 15.98 hectares; that the said
complaint alleges that the proposed right-of-way is needed to construct the 69 KV Mexico-
Balibago power line which will encompass some 2,835 square meters of petitioner's
property; 3 that on March 2, 1970, the defendants, petitioners herein, filed an answer asking
that the complaint for expropriation be dismissed and on the first and second counter-claims
praying for the following:
1. Under the first cause of action, sentencing the plaintiff to pay the defendants rentals at
the annual rate of P2.00 per square meter for the use and occupancy of Block 19 with a total
 CONSTI LAW28

area of not less than 20,439 square meters, starting from the year 1957 and for as long as
plaintiff uses and occupies the same; back rentals to bear interest at the rate of 1 2 % per
annum, until paid.
2. Under the second cause of action, sentencing plaintiff alternatively, i.e., in the event that
expropriation be granted as prayed for in the complaint - to pay defendants as
compensation for the total encompassed in Block 10 (not less than 6,000 square meters) at
the price of P20.00 per square meter, with 12 % interest computed from date of possession,
until paid. 4
that on March 30, 1970, the plaintiff was placed in possession of the property sought to be
expropriated 5 upon a previous deposit on March 12, 1970 of a provisional amount of
P5,670; 6 that after the issues were joined evidence was submitted by both parties to the
Clerk of Court, Andres B. Paras, as lone Commissioner, who submitted his Report 7 with the
following recommendation:
CONCLUSION
All told this Commissioner respectfully recommends that judgment be rendered;
(1) Expropriating the areas covered by Block 19 (20,439 sq. meters) and Block 10 (6,190 sq.
meters) of the subdivision plan (Exhibit 3) of the defendant's properties in favor of the
plaintiff;
(2) Ordering plaintiff to pay the defendants Juana Garcia Sandico, Belen Garcia Diokno and
Bienvenido Garcia (a) by way of just compensation, the amount of P15.00 per square meter
for the Total area encomposed in Block 19 and Block 10, supra, with 6% interest computed
from March 16, 1970, until paid, (b) an amount to be fixed by the Court as and for attorney's
fees.
San Fernando, Pampanga, September 8,1971.
RESPECTFULLY SUBMITTED:
(Sgd) ANDRES B. PARAS
Commissioner 8
that mainly on the basis of the above report, the lower court rendered a decision, the
dispositive part of which reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered:
a) Expropriating the area covered by Block 10 (6,190 square meters) and Block 19 (20,439
square meters) of the subdivision plan of defendants' properties, with an aggregate area of
26,629 square meters, in favor of the plaintiff;
b) Ordering the plaintiff to pay the defendants Juan Garcia Sandico, Belen Garcia Diokno and
Bienvenido Garcia the amount of P 15.00 per square meter for the area herein expropriated
which totals P399,435.00, with interest at the legal rate computed as follows:
A) For the area covered by Block 10, from June 30, 1954;
B) For the area covered by Block 19, from March 30, 1970.
until fully paid and to pay Five (5%) per cent of the amount involved as and for attorney's
fees and expenses of litigation, and to pay the costs of the suit.
SO ORDERED.
San Fernando, Pampanga, November 16,1971.
(Sgd) HONORIO ROMERO
Judge 9
that the plaintiff, private respondent National Power Corporation, appealed to the Court of
Appeals; 10 that on October 28, 1977, the Court of Appeals rendered its decision modifying
the trial court's decision as follows:
Wherefore, judgment is hereby rendered:
1. Expropriating in favor of the plaintiff the area covered by Block 10 (6,190 square meters)
and Block 19 (20,439 square meters) of the subdivision plan of the defendants' property;
2. Ordering the plaintiff to pay the defendants Juan Garcia Sandico, Belen Garcia Diokno and
Bienvenido Garcia the purchase price of Block 10 (6,190 square meters) in the amount of
P87,180.00 at P15.00 per square meter and at the same time ordering the Provincial
Treasurer of Pampanga to release to the said defendants the amount of P5,670 deposited
 CONSTI LAW29

with him on February 26, 1970 as evidenced by Official Receipt No. 2497123 dated March
11, 1970 with interest at the legal rate on the amount of P187,180.00 from March 30, 1970;
3. Ordering the plaintiff to pay to the same defendants the amount of P14,511.69 as the
market value for Block 19 (20,439 square meters) at PO.07 per square meter with legal
interest from July 1, 1957.
The judgment of the lower court awarding attorney's fees and costs are hereby eliminated.
SO ORDERED; 11
that on November 24, 1977, the petitioners filed a motion for reconsideration of the decision
of the Court of Appeals which was denied in its resolution dated December 13, 1977 ; 12 and
that the petitioners appealed to this Court assigning as sole error allegedly committed by
the Court of Appeals the following:
THE COURT OF APPEALS IN ITS DECISION OF OCTOBER 28,1977 IN CA-GR NO. 55720-R
ERRED IN FIXING THE AMOUNT OF JUST COMPENSATION AT P0.07 PER SQUARE METER,
WHEN THE LOWER COURT FINDS THIS TO BE P15.00 PER SQUARE METER. 13
The facts, as found by the Court of Appeals, are:
The defendants own Lot 633 and Lot 634 located in Mexico, Pampanga. Lot 633 has an area
of 85,212 square meters. Lot 634 has an area of 74,613 square meters. Total area is 159,825
square meters.
According to the defendants' pleadings (p. 34, Record on Appeal), not denied in the plaintiff's
pleading, the National Power Corporation occupied as early as 1957 portions of the two (2)
lots for the construction of "steel towers and high power lines for 230 KV Ambuklao-Manila
Line and 69 KV Mexico-Tarlac Line." The portions of the two (2) lots occupied has an area of
20,439 square meters. It is designated as Block 19 in the sketch plan (Exhibit 3). Up to now
the plaintiff has not paid anything for the portion occupied, either as rental or as purchase
price.
As early as March 10, 1960 these two (2) lots were surveyed for the purpose of converting
them into 'Conching Subdivision' (Exhibit 3) for residential purposes. The two (2) lots were
subdivided into 19 blocks (Block No. 1 to 19). Except Block 19 which has been occupied by
the NPC since 1957, the other blocks were subdivided into residential lots, totalling 350 lots
in all. Block 19 occupied by the NPC was not subdivided into lots because of the steel towers
and the power lines of the NPC, which make the said block dangerous for residential
purposes.
The plan and the technical descriptions were duly approved by the court as early as August
23, 1962 (Exh. 2-A). The subdivision plan was in turn approved by the Land Registration
Commission on July 23,1962 and by the Municipal Council of Mexico, Pampanga on January
22, 1962 (Exhibit 4).
After the subdivision plan was approved, steps were taken to improve the property.
Asphalted roads and gutters have been constructed. According to the Commissioner's
Report, "there are men working in the construction of an asphalt road and work is being
done in full blast." The same report states that there are more or less 25 houses of strong
materials constructed in the area.
According to the defendants' evidence, not rebutted by the plaintiff, there are about 100 to
150 willing buyers of lots in the subdivision.
May 8, 1969 the NPC instituted the instant action for expropriation of a 'right-of-way
easement over a portion of the two (2) lots. In Lot 633 the plaintiff wants to expropriate a
portion consisting of 1,470 square meters. In Lot 634 the area to be expropriated is 2,835
square meters. Total area to be expropriated is 2,835 square meters (Exhibit A). The entire
area to be expropriated is within Block 10 of Conching Subdivision (Exhibit 3) which is
adjacent to Block 19. (Vide, Exhibit 3). The plaintiff intends to use the area to be
expropriated for the "construction and maintenance of its 69 KV Mexico-Balibago
Transmission Line." The plaintiff offers to pay to the defendants an easement fee in the
nominal sum of P1.00 and 10.00 for its tower to be constructed.
Anent the error assigned by the petitioners, the pertinent portions of the decision of the
Court of Appeals are:
 CONSTI LAW30

The final question involves the determination of the just compensation. Just compensation is
the market value of the property. It should be determined at the time of the taking. It is the
price which it will command where it is offered for sale by one who desires, but is not obliged
to sell, and is bought by one who is under no necessity of having it. (Manila Railway Co. vs.
Velasquez, 32, Phil. 286; Manila Railroad Co. vs. Caligsihan, 40 Phil., 326).
The market value must be determined as of the time the plaintiff takes possession. Thus
when possession is ahead of the filing of the complaint, the date of possession determines
the market value. (Republic vs. PNB, L-14158, 41261).
We first determine the market value of Block 10 consisting of 6,190 square meters. The
defendants' witnesses, namely, Garcia Sandico (tsn., January 9, 1971 p. 27), Gonzalo
Mapayo (tsn., Feb. 6, 1971), Igino Sason (tsn., Feb. 6, 1971), Igino Sason (tsn., May 8, 1971),
and Jose Angeles (tsn., May 15, 1975) all testified that the prices of the residential lots in the
subdivision as of 1971 was P15.00 to P20.00 per square meter. The contract to sell dated
November 18, 1965 (Exhibit 5) shows that the price per square meter is P15.00. Another
contract to sell dated October 9, 1967 (Exhibit 5-A) shows a purchaser price of P15.00 per
square meter. A request for reservation date July 6, 1970 (Exhibit 6) shows a purchase price
of P17.00 per square meter. Other requests for reservation in 1969 and 1970 show a
purchase price ranging from P15.00 to P17.00 per square meter (Exhibits 6-A to 6-H,
inclusive.)
On the other hand, the plaintiff presented only a tax declaration to prove the market value.
A tax declaration is only prima facie evidence of market value which may be overcome by
satisfactory evidence presented by the owners of the property to be expropriated.
We therefore agree with the finding of the lower court that the price of Block 10 consisting of
6,190 square meters at P15,00 per square meter is P92,850.00. It appears, however, that as
of February 26, 1970 the plaintiff deposited with the Provincial Treasurer of Pampanga the
amount of P5,670 for the compensation of the property. Deducting P5,670 from P92,850.00
the unpaid balance for Block 10 is P87,180.00.
Block 19 presents a different problem. Said property was occupied, according to the
allegations of the defendants' counterclaim not denied in the plaintiff's reply thereto, in 1957
by the plaintiff. In other words, the possession of the property took place 13 years before the
defendants filed their counterclaim praying for the damages with respect to the occupation
of Block 19. The defendants did not present evidence as to the market value of Block 19 as
of 1957. The tax declaration therefore should constitute the prima facie evidence of the
market value for the purpose of determining the just compensation. (Province of Ilocos Norte
vs. Compania General de Tabacos, L-7361, April 20, 1956, 53 O.G. 7687). As per tax
declaration (Exhibits B, B- 1) the market value should be P.07 per square meter or a total
amount of P14,511.69 for Block 19 which consists of 20,439 square meters. 15
The error raised refers solely to Block 19 of the petitioners' property.
It is apparent that the substantial reduction of what compensation has to be paid for Block
19 came about as a result of the application of the doctrine enunciated in the case of the
Republic vs. Phil. National Bank, et al., 16 clarifying the question petition as to what date the
market value of condemned property should be fixed, that "where the taking of the property
precedes the institution of the condemnation proceedings, the value should be fixed as of
the time of the taking". A careful reading of this case and the cases 17 mentioned therein
shows certain material facts which are not Identical to the case at bar, to wit: 1) the
properties in question became the subject of expropriation proceedings initiated by the
plaintiff Government, and 2) that the possession or "taking" of the Government of the
properties in question, whether it was made before or after the filing of the complaint for
expropriation was made for purposes of eminent domain or with the intent to expropriate.
18 Hence, the Court of Appeals, in reducing the amount from P15.00 per square meter to
P0.07 per square meter, made the value stated in the tax declaration of Block 19 in 1957 its
basis on the assumption that in the said year 1957 the private respondent had taken
possession of the land for the purpose of eminent domain and on the further presumption
that subsequent thereto an action for expropriation was entered in court over this property.
 CONSTI LAW31

However, these facts assumed by the Court of Appeals are not borne by the evidence on
record.
Civil Case No. 3584 of the Court of First Instance of Pampanga, Branch V, entitled "National
Power Corporation vs. Jane L. Garcia, et al.," is an action for expropriation but what was
sought to be expropriated in the action was a right of way for the use of private respondent
in the construction of its 69 KV Mexico-Balibago transmission line. This purpose of private
respondent is stated in paragraph 5 of the Complaint 19 and indicated and shaded in red on
the sketch attached to the complaint as Annex "A". 20 Said paragraph reads:
The plaintiff needs right-of-way easements over portions of the parcels of land hereinabove
described for the consideration and maintenance of its KV Mexico-Balibago transmission
line, which portions are indicated and shaded in red on the sketches attached hereto,
marked as Annex "A".
The writ of possession directed the Sheriff "to place the plaintiff National Power Corporation
in immediate possession of what is needed of the defendants' lands for a right-of-way
easement subject of this expropriation proceedings." 21 The Ambuklao-Manila and Mexico-
Tarlac transmission lines established as early as 1953 and 1957 traversing properties
covered by Block 19 were not the subject matter of the said action.
Moreover, in the second paragraph of private respondents' answer to defendant's
compulsory counterclaim, 22 it is alleged that the construction of the Ambuklao-Manila and
Mexico-Tarlac transmission lines were with the permission of petitioners' predecessor-in-
interest, their father, Eutiquiano Garcia. As shown by the transcript of the stenographic
notes of the proceedings of June 26, 1971, 23 Mr. Eladio Espiritu, a witness of the private
respondent, attempted to establish that the entry of private respondent to petitioners'
property was with the consent of their predecessor. Likewise, as found by the Commissioner
in his Report, 24 all that the plaintiff, private respondent herein, could show was an alleged
authority to construct the Ambuklao-Manila line only, allegedly signed by defendants' father
(Exhibit "M"), pending completion of the negotiation of the compensation to be paid. Exhibit
"M", in clear and unmistakable terms, states the nature of the possession that the private
respondent was granted at the time. The title of this document is "PERMISSION TO OCCUPY
LAND" which undoubtedly grants to the National Power Corporation a privilege and the same
is subject to the terms and conditions embodied in the document. 25 As the private
respondent's entry was gained through permission, it did not have the intention to acquire
ownership either by voluntary purchase or by the exercise of eminent domain. And the fact
remains that the private respondent never completed the negotiation as to compensation.
Not only this, private respondent went on to construct another line — the 69 KV Mexico-
Tarlac without defendants' permission nor a court authorization. 26 All these prove the
private respondent's intention not to expropriate Block 19, as it did not seek so in the action
it instituted on August 8, 1969. Neither did it have the intention to do so in 1953 as shown
by the terms in Exhibit "M". It is clear, therefore, that the private respondent not only did not
take possession with intent to expropriate Block 19, but that it did not institute expropriation
proceedings over the same.
Consequently, since the areas covered by Block 19 were never entered into or possessed for
purposes of eminent domain, nor did they become the subject of an action for eminent
domain, neither the date of entry nor the filing of the action by private respondent for
expropriation of a "right-of-way" easement on December 8, 1969 could be reckoned with as
the basis for the determination of just compensation.
Hence, the conclusion of the Court of Appeals that the fair market value of the property in
question based on the tax assessment in 1957 is an error of law, as it is a conclusion
predicated on the wrong assumption that there was a taking or possession of Block 19 in
1957 for purposes of expropriation and that there was an action for expropriation of the
same.
It is significant that the expropriation of Block 19 came about only when the trial court
declared that inasmuch as the private respondent cannot acquire easement of right-of-way
over Block 19, much less own it through prescription, the only way for the private
respondent to justify its continued occupation of Block 19 is to expropriate the same. This
 CONSTI LAW32

declaration of the trial court was affirmed by the Court of Appeals. The petitioners cannot
legally impugn now for the first time on appeal to this Court the trial court's directive to
expropriate Block 19 for public use. Well-settled is the rule that questions not raised in the
lower court cannot now be raised for the first time on appeal. 27 Hence, the expropriation of
Block 19 is final.
By virtue of the special and peculiar circumstances of the case at bar, there being no taking
of the property in question for purposes of eminent domain nor condemnation proceedings
instituted over the same to speak of, the time as of which the market value should be fixed
is the time when the trial court made its order of expropriation. It is the date of appropriation
or the investing date which as everyone knows required more than a day, sometimes weeks
to carry through as would an ordinary real estate purchase and sale. Hence, in estimating
the market value, all the capabilities of the property and all the uses to which it may be
applied or for which it is adapted are to be considered and not merely the condition it is in
the time and the use to which it is then applied by the owner. All the facts as to the condition
of the property and its surroundings, its improvements and capabilities may be shown and
considered in estimating its value.
Anent the compensation to be paid for Block 19, the reasons relied upon by the trial court
which appear just, equitable, and in consonance with established jurisprudence are:
In the mind of the Court, the contentions so advanced by the plaintiff cannot be maintained,
and the authority just cited is not applicable in the instant case. In the first place, it was
clearly shown by the defendants that the properties herein involved have been converted
into a subdivision way back in 1962. In support of this, the defendants presented the order
of this Court approving the subdivision plan, which was likewise approved by the Land
Registration Commission, and the resolution of the municipal council of Mexico-Pampanga
relative to the same subdivision. Moreover, as earlier discuss the Court is guided by the
Commissioner's Report and Findings of the ocular inspection in determining the nature of the
properties involved. In effect, therefore, the Court is of the opinion that the evidence
presented by the defendants outweigh the evidence presented for the plaintiff by
preponderance.
Furthermore, by the testimonies of the witnesses, it was established that the properties,
being converted into a subdivision sell at P15.00 to P20.00 per square meter and there are
many willing buyers at this price range. However, the plaintiff, in an effort to contradict this
claim presented the appraisal made by the provincial appraisal committee for the province
of Pampanga, which appraisal gave the valuation of P6.00 to P8.00 per square meter for lots
adjoining the lots of the defendants. These prices or evaluation, however, in the opinion of
the Court, cannot be and are not the determinative factors in determining the value of the
defendants' properties. It has been established by the evidence on record and confirmed by
the report of the Commissioner, that the Conching Subdivision, where the subject properties
form parts, are located along the national highway; that it is near the town proper of Mexico,
Pampanga were the school and church sites are situated. In giving valuation to properties,
these factors, namely, the relation or distance of the premises towards the national highway,
to the town proper, and to other commercial sites such as schools and churches, must be
given consideration. In this particular case, the properties, being along the national highway,
near the town proper of Mexico, Pampanga and likewise near the school and church sites,
must be given valuation commensurate to its standing. This being the case, the Court
believes that the value of P15.00 per square meter is reasonable to be given to the
defendants' properties. The defendants therefore are entitled to the payment of P15.00 per
square meter for their properties object of this expropriation proceedings which are Blocks
10 and 19 of the subdivision plan with an aggregate area of 26,439 square meters.
The fair market value of Block 19 should be fixed at P15.00 per square meter.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. NO. 55720-R is hereby modified
as to Block 19 of the subdivision plan of petitioners' property and the private respondent,
National Power Corporation, is ordered to pay to the petitioners the amount of P306,585.00
as the market value for Block 19 (20,439 square meters) at P15.00 per square meter with
legal interests from March 30, 1970. No pronouncement as to costs.
 CONSTI LAW33

SO ORDERED.
BIGLANG-AWA VS. BACALLA
Before us is a petition for certiorari under Rule 65 of the Rules of Court, with a prayer for the
issuance of a writ of preliminary injunction, seeking to annul and set aside the Orders of the
respondent Court dated August 5, 1998, ordering the issuance of Writs of Possession of the
properties of herein petitioners, and the Order dated August 12, 1998, issuing the
corresponding Writs of Possession, as well as the Order dated July 7, 1999, denying the
petitioners' Motion for Reconsideration of the August 5, 1998 Orders. The petition further
prays for the dismissal of Civil Cases Nos. Q-97-31368 and Q-97-31369 for being premature
due to failure to comply with the substantive requirements of Executive Order No. 1035
(1985).[1]
The antecedent facts are as follows:
Petitioners Remedios Biglang-awa and Salvador Biglang-awa are the registered owners of
certain parcels of land situated in Talipapa, Novaliches, Quezon City. The parcel of land
owned by petitioner Remedios Biglang-awa is covered by T.C.T. No. RT-101389 (362966) with
an area of 769 sq. m., while that owned by Salvador Biglang-awa is covered by T.C.T. No. RT-
101390 (19352) with an area of 2,151 sq. m. The government needed to expropriate 558
sq. m. of the aforesaid property of petitioner Remedios Biglang-awa, and 881 sq. m. of that
belonging to petitioner Salvador Biglang-awa for the construction of the Mindanao Avenue
Extension, Stages II-B and II-C..
On August 29, 1996, the petitioner Remedios Biglang-awa received a Notice from the
respondent Republic, through the Department of Public Works and Highways (DPWH) Project
Manager Patrick G. Gatan, requiring her to submit the documents necessary to determine
the just compensation for her property.[2]
On October 15, 1996, Final Notices, signed by Project Director Cresencio M. Rocamora, were
given by the DPWH to the petitioners to submit within five (5) days the pertinent documents,
otherwise, expropriation proceedings would be filed against their properties.[3] As the
petitioners failed to comply with these final notices, the respondent Republic, through the
DPWH, filed with the respondent Regional Trial Court of Quezon City[4] separate cases for
expropriation against the petitioners, docketed as Civil Case Nos. Q-99-31368 and Q-97-
31369.
On July 10, 1997, the petitioners received summons from the respondent court, and were
ordered to file their respective Answers to the Complaints for expropriation. The petitioners
filed their Answers on August 11, 1997.
Subsequently, the respondent Republic, through the DPWH, deposited with the Land Bank of
the Philippines the amounts of P3,964,500.00 and P2,511,000.00 for the properties of
Salvador and Remedios Biglang-awa, respectively, based on the appraisal report of the
Quezon City Appraisal Committee.
On April 24, 1998, respondent Republic filed separate Motions for the Issuance of Writs of
Possession of the properties of the petitioners with the respondent court. The court issued
Orders giving the petitioners, through counsel Atty. Jose Felix Lucero, ten (10) days within
which to submit their Opposition to the said motions. The petitioners failed to file their
Opposition to the Motion.
On August 5, 1998, the respondent court issued separate Orders[5] granting the motions for
the issuance of writs of possession. Accordingly, the writs of possession were issued by the
respondent court on August 12, 1998.[6]
On September 11, 1998, petitioner Remedios Biglang-awa received a Notice to Vacate her
property. A similar Notice was likewise received by petitioner Salvador Biglang-awa at about
the same time.
On January 25, 1999, the petitioners filed a joint Manifestation with the respondent court to
the effect that they were retaining the law firm of Gumpal and Valenzuela, in lieu of Atty.
Jose Felix Lucero whose services they had already terminated due to the latter's inaction and
abandonment of their cases.
On May 10, 1999, the petitioners, through their new counsel, moved for a reconsideration of
the respondent court's Orders dated August 5, 1998, and a recall of the writs of possession
 CONSTI LAW34

issued on August 12, 1998, mainly on the ground that the respondent Republic failed to
comply with the provisions of E.O. 1035 (1985), relating to the conduct of feasibility studies,
information campaign, detailed engineering/surveys, and negotiation prior to the acquisition
of, or entry into, the property being expropriated.
On July 7, 1999, the respondent court issued an Order denying the petitioners' Motion for
Reconsideration, a copy of which was received by the petitioners on July 26, 1999.
Hence, this Petition for Certiorari.
The sole issue in this case is whether or not the respondent court gravely abused its
discretion, amounting to lack or excess of its jurisdiction, when it issued the questioned
orders.
We rule in the negative.
The petitioners contend that due process of law in relation to expropriation proceedings
mandates that there be compliance with the provisions of Executive Order No. 1035,
particularly Sections 2, 3, 4 and 6, claimed to constitute the substantive requirements of the
expropriation law, prior, and as a condition precedent, to Section 2 of Rule 67 of the 1997
Revised Rules of Civil Procedure. Hence, a writ of possession pursuant to the above
provision of Rule 67 will issue only upon showing that the said provisions of E.O. 1035 have
already been complied with. As the writs of possession in the instant case were issued by
the respondent court without the respondent Republic, through the DPWH, having furnished
the petitioners any feasibility study and "approved" parcellary survey in connection with the
Mindanao Avenue Extension Project,[7] despite formal request by the latter,[8] and therefore
without showing prior compliance with E.O. 1035, the petitioners contend that such issuance
of the writs of possession by the respondent court was made with grave abuse of discretion
amounting to lack or excess of jurisdiction.
We do not agree.
The provisions of law adverted to by petitioners are as follows:
Title A. Activities Preparatory To Acquisition Of Property
Sec. 2. Feasibility Studies. Feasibility studies shall be undertaken for all major projects, and
such studies shall, in addition to the usual technical, economic and operational aspects,
include the social, political, cultural and environmental impact of the project.
Sec. 3. Information Campaign. Every agency, office and instrumentality of the government
proposing to implement a development project which requires the acquisition of private real
property or rights thereon shall first make consultations with the local government officials,
including the regional development councils having jurisdiction over the area where the
project will be undertaken to elicit their support and assistance for the smooth
implementation of the project. The implementing agency/instrumentality concerned with the
assistance of the local government officials and representatives of the Office of Media Affairs
shall conduct an extensive public information campaign among the local inhabitants that will
be affected by the project to acquaint them with the objectives and benefits to be derived
from the project and thus avoid any resistance to or objection against the acquisition of the
property for the project.
Sec. 4. Detailed Engineering/Surveys. The implementing government agency/
instrumentality concerned shall, well in advance of the scheduled construction of the
project, undertake detailed engineering, including parcellary surveys to indicate the location
and size of the sites and to determine ownership of the land to be acquired, including the
status of such landownership.
xxx xxx xxx
Title B. Procedure For Acquisition Of Property
Sec. 6. Acquisition Through Negotiated Sale. As an initial step, the government
implementing agency/instrumentality concerned shall negotiate with the owner of the land
that is needed for the project for the purchase of said land, including improvements thereon.
In the determination of the purchase price to be paid, the Ministry of Finance and the
Provincial/City/Municipal Assessors shall extend full assistance and coordinate with the
personnel of the government implementing agency concerned in the valuation of lands and
improvements thereon taking into consideration the current and fair market value declared
 CONSTI LAW35

by the owner or administrator of the land, or such current market value as determined by
the assessor, whichever is lower, prior to the negotiation. [Executive Order No. 1035 (1985)]
Nothing in the foregoing provisions supports the contention of the petitioners. A careful
perusal of the provisions cited do not yield the conclusion that the conduct of feasibility
studies, information campaign and detailed engineering/surveys are conditions precedent to
the issuance of a writ of possession against the property being expropriated. Although
compliance with these activities should indeed be made prior to the decision to expropriate
private property, the requirements for issuance of a writ of possession once the
expropriation case is filed, are expressly and specifically governed by Section 2 of Rule 67 of
the 1997 Rules of Civil Procedure, to wit:
Sec.2. Entry of the plaintiff upon depositing value with authorized government depositary.--
Upon the filing of the complaint or at anytime thereafter, and after due notice to the
defendant, the plaintiff shall have the right to take or enter upon the possession of the real
property involved if he deposits with the authorized government depositary an amount
equivalent to the assessed value of the property for the purposes of taxation to be held by
such bank subject to the orders of the court xxx xxx .
xxx xxx xxx
If such deposit is made the court shall order the sheriff or other proper officer to forthwith
place the plaintiff in possession of the property involved and promptly submit a report
thereof to the court with service of copies to the parties.
As clearly enunciated in Robern Development Corporation vs. Judge Jesus Quitain[9]:
"Expropriation proceedings are governed by revised Rule 67 of the 1997 Rules of Civil
Procedure which took effect on July 1, 1997. Previous doctrines inconsistent with this Rule
are deemed reversed or modified. Specifically, (1) an answer, not a motion to dismiss, is the
responsive pleading to a complaint in eminent domain; (2) the trial court may issue a writ of
possession once the plaintiff deposits an amount equivalent to the assessed value of the
property, pursuant to Section 2 of said Rule, without need of a hearing to determine the
provisional sum to be deposited; and (3) a final order of expropriation may not be issued
prior to a full hearing and resolution of the objections and defenses of the property owner."
(Emphasis Ours)
Thus, pursuant to Section 2 of Rule 67 of the 1997 Revised Rules of Civil Procedure and the
Robern Development Corporation case, the only requisites for authorizing immediate entry
in expropriation proceedings are: (1) the filing of a complaint for expropriation sufficient in
form and substance; and (2) the making of a deposit equivalent to the assessed value of the
property subject to expropriation. Upon compliance with the requirements the issuance of
the writ of possession becomes "ministerial."[10]
The antecedents and the rationale for the rule are explained thus:
"There is no prohibition against a procedure whereby immediate possession of the land
involved in expropriation proceedings may be taken, provided always that due provision is
made to secure the prompt adjudication and payment of just compensation to the owners.
However, the requirements for authorizing immediate entry in expropriation proceedings
have changed.
To start with, in Manila Railroad Company v. Paredes, [Manila Railroad Company v. Paredes,
31 Phil 118, 135, March 31 & December 17, 1915] the Court held that the railway
corporation had the right to enter and possess the land involved in condemnation
proceedings under Section 1, Act No. 1592, immediately upon the filing of a deposit fixed by
order of the court.

The Rules of Court of 1964 sanctioned this procedure as follows:

Sec. 2. Entry of plaintiff upon depositing value with National or Provincial Treasurer.
Upon the filing of the complaint or at any time thereafter the plaintiff shall have the right to
take or enter upon the possession of the real or personal property involved if he deposits
with the National or Provincial Treasurer its value, as provisionally and promptly ascertained
 CONSTI LAW36

and fixed by the court having jurisdiction of the proceedings, to be held by such treasurer
subject to the orders and final disposition of the court. . . . (emphasis ours.)
Subsequently, former President Ferdinand E. Marcos signed into law Presidential Decree No.
42 and its companion decrees, which removed the court's discretion in determining the
amount of the provisional value of the land to be expropriated and fixed the provisional
deposit at its assessed value for taxation purposes. Hearing was not required; only notice to
the owner of the property sought to be condemned.
On the issue of the immediate possession, PD 42 (Authorizing The Plaintiff In Eminent
Domain Proceedings To Take Possession Of The Property Involved Upon Depositing The
Assessed Value, For Purposes of Taxation) provided:
WHEREAS, the existing procedure for the exercise of the right of eminent domain is not
expeditious enough to enable the plaintiff to take or enter upon the possession of the real
property involved as soon as possible, when needed for public purposes;
xxx xxx xxx
. . . [T]hat, upon filing in the proper court of the complaint in eminent domain proceedings or
at anytime thereafter, and after due notice to the defendant, plaintiff shall have the right to
take or enter upon the possession of the real property involved if he deposits with the
Philippine National Bank, . . . an amount equivalent to the assessed value of the property for
purposes of taxation, to be held by said bank subject to the orders and final disposition of
the court.
The provisions of Rule 67 of the Rules of Court and of any other existing law contrary to or
inconsistent herewith are hereby repealed.
Paragraph 3 of PD No. 1224 (Defining The Policy On The Expropriation Of Private Property for
Socialized Housing Upon Payment Of Just Compensation) also authorized immediate
takeover of the property in this manner:
3. Upon the filing of the petition for expropriation and the deposit of the amount of just
compensation as provided for herein, the Government, or its authorized agency or entity,
shall immediately have possession, control and disposition of the real property and the
improvements thereon even pending resolution of the issues that may be raised whether
before the Court of First Instance or the higher courts.
Where the "taking" was for "socialized housing," Section 3, PD 1259 (Amending Paragraphs
1, 2, And 3 Of PD No. 1224 Further Defining The Policy On The Expropriation Of Private
Property For Socialized Housing Upon Payment Of Just Compensation), amending the above-
quoted paragraph, provided:
Upon the filing of the petition for expropriation and the deposit of the amount of the just
compensation provided for in Section 2 hereof, the Government, or its authorized agency or
entity, shall immediately have possession, control and disposition of the real property and
the improvements thereon even pending resolution of the issues that may be raised whether
before the Court of First Instance, Court of Agrarian Relations or the higher courts.
Similarly, Section 1, PD No. 1313 (Further Amending Paragraph 3 Of Presidential Decree No.
1224 As Amended By Presidential Decree No. 1259, Defining The Policy On The Expropriation
Of Private Property For Socialized Housing Upon Payment Of Just Compensation), amending
paragraph 3 of PD 1224, decreed:
Upon the filing of the petition for expropriation and the deposit in the Philippine National
Bank at its main office or any of its branches of the amount equivalent to ten percent (10%)
of the just compensation provided for in Section 2 of Presidential Decree No. 1259, the
government, or its authorized agency or entity, shall immediately have possession, control
and disposition of the real property and the improvements thereon with the power of
demolition, if necessary, even pending resolution of the issues that may be raised whether
before the Court of First Instance, Court of Agrarian Relations, or the higher Courts.
In this connection, we also quote Section 7 of PD No. 1517 (Proclaiming Urban Land Reform
In The Philippines And Providing For The Implementing Machinery Thereof), which reads:
xxx xxx xxx
Upon the filing of the petition for expropriation and the deposit in the Philippine National
Bank at its main office or any of its branches of the amount equivalent to ten per cent (10%)
 CONSTI LAW37

of the declared assessment value in 1975, the Government, or its authorized agency or
entity shall immediately have possession, control and disposition of the real property and
the improvements thereon with the power of demolition, if necessary, even pending
resolution of the issues that may be raised whether before the Court of First Instance, Court
of Agrarian Relations, or the higher Courts.
Finally, PD 1533 (Establishing A Uniform Basis For Determining Just Compensation And The
Amount Of Deposit For Immediate Possession Of The Property Involved In Eminent Domain
Proceedings) mandated the deposit of only ten percent (10%) of the assessed value of the
private property being sought to be expropriated, after fixing the just compensation for it at
a value not exceeding that declared by the owner or determined by the assessor, whichever
is lower. Section 2 thereof reads:
Sec. 2. Upon the filing of the petition for expropriation and the deposit in the
Philippine National Bank at its main office or any of its branches of an amount equivalent to
ten per cent (10%) of the amount of compensation provided in Section 1 hereof, the
government or its authorized instrumentality agency or entity shall be entitled to immediate
possession, control and disposition of the real property and the improvements thereon,
including the power of demolition if necessary, notwithstanding the pendency of the issues
before the courts.
Accordingly, in San Diego v. Valdellon [80 Phil 305, 310, November 22, 1977], Municipality of
Daet v. Court of Appeals [93 SCRA 503, 525, October 18, 1979], and Haguisan v. Emilia [131
SCRA 517, 522-524, August 31, 1984], the Court reversed itself and ruled that Section 2,
Rule 67 of the 1964 Rules, was repealed by Presidential Decree No. 42. The judicial duty of
ascertaining and fixing the provisional value of the property was done away with, because
the hearing on the matter had not been "expeditious enough to enable the plaintiff to take
possession of the property involved as soon as possible, when needed for public purpose."
In Daet, the Court clarified that the provisional value of the land did not necessarily
represent the true and correct one but only tentatively served as the basis for immediate
occupancy by the condemnor. The just compensation for the property continued to be based
on its current and fair market value, not on its assessed value which constituted only a
percentage of its current fair market value.
However, these rulings were abandoned in Export Processing Zone Authority v. Dulay [149
SCRA 305, 311 & 316, April 29, 1987], because "[t]he method of ascertaining just
compensation under the aforecited decrees constitute[d] impermissible encroachment on
judicial prerogatives. It tend[ed] to render this Court inutile in a matter which under the
Constitution [was] reserved to it for final determination." The Court added:
We return to older and more sound precedents. This Court has the duty to formulate guiding
and controlling constitutional principles, precepts, doctrines, or rules. (See Salonga v. Cruz
Pano, supra).
The determination of "just compensation" in eminent domain cases is a judicial function. The
executive department or the legislature may make the initial determinations but when a
party claims a violation of the guarantee in the Bill of Rights that private property may not
be taken for public use without just compensation, no statute, decree, or executive order can
mandate that its own determination shall prevail over the court's findings. Much less can the
courts be precluded from looking into the "just-ness" of the decreed compensation.
xxx xxx xxx
More precisely, Panes v. Visayas State College of Agriculture [264 SCRA 708, 719, November
27, 1996.] ruled that the judicial determination of just compensation included the
determination of the provisional deposit. In that case, the Court invalidated the Writ of
Possession because of lack of hearing on the provisional deposit, as required under then
Section 2 of Rule 67, pre-1997 Rules. In the light of the declared unconstitutionality of PD
Nos. 76, 1533 and 42, insofar as they sanctioned executive determination of just
compensation, any right to immediate possession of the property must be firmly grounded
on valid compliance with Section 2 of Rule 67, pre-1997 Rules; that is, the value of the
subject property, as provisionally and promptly ascertained and fixed by the court that has
 CONSTI LAW38

jurisdiction over the proceedings, must be deposited with the national or the provincial
treasurer.

However, the 1997 Rules of Civil Procedure revised Section 2 of Rule 67 and clearly reverted
to the San Diego, Daet and Haguisan rulings. Section 2 now reads:

Sec. 2. Entry of plaintiff upon depositing value with government depositary. Upon the
filing of the complaint or at any time thereafter and after due notice to the defendant, the
plaintiff shall have the right to take or enter upon the possession of the real property
involved if he deposits with the authorized government depositary an amount equivalent to
the assessed value of the property for purposes of taxation to be held by such bank subject
to the orders of the court. . . .
xxx xxx xxx
After such deposit is made the court shall order the sheriff or other proper officer to
forthwith place the plaintiff in possession of the property involved and promptly submit a
report thereof to the court with service of copies to the parties. [Emphasis ours.]
In the present case, although the Complaint for expropriation was filed on June 6, 1997, the
Motion for the Issuance of the Writ of Possession was filed on July 28, 1997; thus, the
issuance of the Writ is covered by the 1997 Rules. As earlier stated, procedural rules are
given immediate effect and are applicable to actions pending and undetermined at the time
they are passed; new court rules apply to proceedings that take place after the date of their
effectivity. Therefore, Section 2, Rule 67 of the 1997 Rules of Civil Procedure, is the
prevailing and governing law in this case.
With the revision of the Rules, the trial court's issuance of the Writ of Possession becomes
ministerial, once the provisional compensation mentioned in the 1997 Rule is deposited.
Thus, in the instant case the trial court did not commit grave abuse of discretion when it
granted the NPC's Motion for the issuance of the Writ, despite the absence of hearing on the
amount of the provisional deposit.
The Court nonetheless hastens to add that PD 1533 is not being revived.
Under Section 2, Rule 67 of the 1997 Rules, the provisional deposit should be in an amount
equivalent to the full assessed value of the property to be condemned, not merely ten
percent of it. Therefore, the provisional deposit of NPC is insufficient. Since it seeks to
expropriate portions, not the whole, of four parcels of land owned by Robern, the provisional
deposit should be computed on the basis of the Tax Declarations of the property: xxx"
Hence, the issuance of writs of possession by the respondent court in favor of the
respondent Republic after the latter, through the DPWH, filed complaints for expropriation
and deposited the amounts of P3,964,500.00 and P2,511,000.00 equivalent to the assessed
value of the properties of the petitioners is proper and not without basis.
Contrary to the claim of the petitioners, the issuance of a writ of possession pursuant to Rule
67 of the 1997 Revised Rules of Civil Procedure alone is neither "capricious" nor
"oppressive", as the said rule affords owners safeguards against unlawful deprivation of their
property in expropriation proceedings, one of which is the deposit requirement which
constitutes advance payment in the event expropriation proceeds, and stands as indemnity
for damages should the proceedings fail of consummation.[11] The deposit likewise
sufficiently satisfies the compensation requirement of the Constitution.[12] Moreover, the
owners of the expropriated lands are entitled to legal interest on the compensation
eventually adjudged from the date the condemnor takes possession of the land until the full
compensation is paid to them or deposited in court.[13]
It is the ruling of this Court that there is no grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the respondent court in issuing the orders and the writs
of possession herein questioned. Accordingly, the prayer for the dismissal of Civil Cases Nos.
Q-97-31368 and Q-97-31369 on the ground of prematurity for failure to comply with E.O.
1035 is denied.
As regards Section 6 (Acquisition through Negotiated Sale) of E.O. 1035, records show that
there had been an attempt on the part of the Republic to negotiate with the petitioners
 CONSTI LAW39

through the Notices sent by the former through the DPWH. The Notice dated August 29,
1996 sent to petitioner Remedios Biglang-awa by the respondent Republic[14] was intended
not only to inform her formally of the planned expropriation, but also to require her to
submit several documents needed for the determination of the just compensation for her
property. The petitioner failed to submit the required documents. The respondent Republic
sent both petitioners Remedios and Salvador Biglang-awa Final Notices dated October 15,
1996 stating that failure to submit the required documents "significantly delay[ed] the
completion of the xxx project", and that the petitioners were given five (5) days to
"cooperate by way of submitting the documents being requested", otherwise expropriation
proceedings would be initiated against them.[15] These notices were ignored by the
petitioners. Consequently, the respondent Republic, through the DPWH, filed expropriation
cases against the petitioners, conformably with Section 7 of E.O. 1035, to wit:
Sec. 7. Expropriation. If the parties fail to agree in negotiation of the sale of the land as
provided in the preceding section, the government implementing agency/instrumentality
concerned shall have authority to immediately institute expropriation proceedings through
the Office of the Solicitor General or the Government Corporate Counsel, as the case may
be. The just compensation to be paid for the property acquired through expropriation shall
be in accordance with the provisions of P.D. No. 1533. Courts shall give priority to the
adjudication of cases on expropriation and shall immediately issue the necessary writ of
possession upon deposit by the government implementing agency/instrumentality
concerned of an amount equivalent to ten per cent (10%) of the amount of just
compensation provided under P.D. No. 1533; Provided, That the period within which said writ
of possession shall be issued shall in no case extend beyond five (5) days from the date such
deposit was made.
Thus, the filing of the expropriation cases against the petitioners was not in violation of
Section 6 of E.O. 1035, and was, on the contrary, in accordance with the provisions of the
said special law.
The petitioners also claim that they are not bound by the gross and inexcusable
abandonment of their cases by their former lawyer, Atty. Jose Felix Lucero, resulting to the
non-filing of their Opposition to the respondents' Motion for the Issuance of Writs of
Possession.

Although the general rule is that the negligence of counsel binds the client,[16] the rule is
not without an exception. Petitioners rely on the case of Aceyork Aguilar vs. Court of
Appeals[17] wherein the court relaxed the rule to prevent miscarriage of justice. We find no
such prejudice to petitioners caused by the failure of their counsel.
When petitioner Remedios received a Notice to Vacate her property on September 11, 1998,
the petitioners immediately tried to get in touch with their former counsel, Atty. Jose Felix
Lucero, but to no avail as the latter refused to talk to them or even answer their letter.[18]
No reason was given for the behavior of the counsel. The petitioners wasted no time in
hiring the services of a new counsel, the law firm of Gumpal and Valenzuela. Considering
that once the deposit under Section 2 of Rule 67 of the 1997 Revised Rules on Civil
Procedure has been made, the expropriator becomes entitled to a writ of possession as a
matter of right, and the issuance of the writ becomes ministerial on the part of the trial
court, no opposition on the part of the petitioners on the grounds now pleaded could have
prevented such issuance. Therefore, the petitioners were not prejudiced by the lost
opportunity to file their opposition to the respondent's Motions for the Issuance of Writs of
Possession.
WHEREFORE, the instant petition is DISMISSED for lack of merit.
SO ORDERED.
Melo, (Chairman), Vitug, and Panganiban, JJ., concur.

CITY OF ILOILO V JUDGE LEGASPI

 CONSTI LAW40

The essential office of preliminary injunction is to preserve the rights of the parties before
the final adjudication of the issues. Where injunction is the main relief sought in the action,
therefore, the trial court should desist from granting the plaintiff's application for temporary
restraining order or writ of preliminary injunction if such grant would tend to prejudge the
case on the merits. The preliminary injunction should not determine the merits of the case,
or decide controverted facts, but should still look to a future final hearing.
The Case
This case is a direct resort to the Court by way of certiorari to challenge the orders issued on
June 24, 20031 and August 15, 20032 in Civil Case No. 03-27648 by the Regional Trial Court
(RTC), Branch 29, in Iloilo City on the ground that the RTC thereby committed grave abuse of
its discretion amounting to lack or excess of jurisdiction.
Antecedents
The Department of Transportation and Communications (DOTC) issued Department Order
No. 2002-31 (with the subject "AUTHORIZATION OF PRIVATE EMISSION TESTING CENTERS").3
Item No. 2 of Department Order No. 2002-31 stated:
2. To ensure that "cut throat" or "ruinous" competition, that may result to the degradation of
level of service of the project is avoided, authorization of PETC should strictly be rationalized
taking into consideration the vehicle population expected to be serviced in the area. As
basis, one (1) PETC lane shall be authorized for every 15,000 registered vehicles in an LTO
Registering District.
JPV Motor Vehicle Emission Testing and Car Care Center (JPV), a partnership authorized to
operate a PETC in Iloilo City, was granted a capacity of four lanes that could cater to 15,000
motor vehicles per lane for the total capacity of 60,000 motor vehicles. At the time JPV filed
the complaint in Civil Case No. 03-27648 to prevent the petitioner from acting on the
pending application for the operation of another Private Emission Testing Center (PETC) in
Iloilo City, there were 53,647 registered motor vehicles in Iloilo City. Accordingly, JPV averred
in its complaint that there was no need for another PETC because it already had the
capability to serve all the registered motor vehicles in Iloilo City pursuant to Department
Order No. 2002-31.4
Through its answer, the petitioner contested the injunctive relief being sought by JPV,
insisting that such relief, if issued, would result into a monopoly on the part of JPV in the
operation of a PETC; that the writ of injunction would prevent the exercise by the City Mayor
of his discretionary power to issue or not to issue business permits; and that JPV did not
establish the existence of its right in esse to be protected by the writ of injunction.5

On June 18, 2003, Grahar Emission Testing Center (Grahar), another PETC operator with a
pending application for a business/mayor's permit to operate its own PETC in Iloilo City,
sought leave of court to intervene in Civil Case No. 03-27648.6
Although it allowed the intervention of Grahar on June 24, 2003, the RTC nonetheless issued
the first assailed order granting the application of JPV for the writ of preliminary injunction,7
also on June 24, 2003, disposing as follows:
WHEREFORE, let the Writ of Preliminary Prohibitory Injunction issue. The defendant City of
Iloilo, his agents, representatives or anyone acting for and in his behalf is ordered to refrain
and desist from the issuance of a Mayor's Permit to operate a PETC in the City of Iloilo.
It is understood that the herein injunction shall be dissolved the moment the DOTC
authorizes the operations of another or additional PETC in the City of Iloilo.
The plaintiff is directed to post an Injunction Bond in the amount of Php 100,000.00
executed in favor of the defendant to the effect that Plaintiff will pay the defendant all
damages which it may sustain by reason of the injunction should the court finally decide that
plaintiff is not entitled thereto.
SO ORDERED.
The petitioner moved for the reconsideration of the first assailed order of June 24, 2003 and
prayed for the dissolution of the writ of preliminary injunction.8 On August 15, 2003,
however, the RTC issued the second assailed order denying the petitioner's Motion for
Reconsideration,9 to wit:
 CONSTI LAW41

This resolves the motion for reconsideration of the Order dated June 24, 2003.
It must be noted that the writ of injunction was issued to give effect to the Department
Order No. 2002-31 dated August 20, 2002 of the DOTC to prevent the degradation of the
level of service of the smoke emission test. The amendment of certain section of the said
department order, thereby reducing the vehicle requirements from 15,000 to 12,000
vehicles per one (1) PETC lane does not in anyway require for an additional PETC to operate
since the LTO is also operating two-lanes testing facilities which can serve 24,000 vehicles
plus the four-lanes testing facilities currently operated by the herein plaintiff can
accommodate 72,000 vehicles which is more than enough to serve the 53,647 registered
vehicles in the City of Iloilo. To allow additional PETC will surely result to an unhealthy
competition which will run counter to the purpose of the DOTC Department Order No. 2002-
31, i.e., to ensure that "cut throat" or "ruinous" competition that may result to the
degradation of level of service of the project is avoided, authorization of PETC should strictly
be rationalized taking into consideration the vehicle population expected to be serviced in
the area.
WHEREFORE, the motion for reconsideration is hereby denied. The Order dated June 24,
2003 stands.

SO ORDERED.
It is relevant to note that Grahar filed its own Urgent Motion for Reconsideration on the
Issuance of a Writ of Preliminary Prohibitory Injunction in Favor of the Plaintiff,10 whereby it
brought to the attention of the RTC the fact that the DOTC had meanwhile issued on April 10,
2003 Department Order No. 2003-24 (with the subject "AN ORDER AMENDING CERTAIN
SECTIONS OF DEPARTMENT ORDER NO. 2002-31") in order to reduce the required vehicle
capacity per lane of PETCs from 15,000 vehicles to 12,000 vehicles. Grahar contended that
JPV's capacity and capability were no longer sufficient to serve the emission testing
requirements of the entire motor vehicle population of Iloilo City.
Issue
Hence, on November 5, 2003,11 the petitioner has come directly to the Court on certiorari to
challenge the foregoing orders, specifically asserting:
THAT THE LOWER COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN ISSUING THE ORDER DATED JUNE 24, 2003 ORDERING
PETITION[ER] CITY MAYOR OF ILOILO (sic), HIS AGENTS REPRESENTATIVES OR ANYONE
ACTING FOR AND IN HIS BEHALF TO REFRAIN AND DESIST FROM THE ISSUANCE OF A
MAYOR'S PERMIT TO OPERATE A PRIVATE EMISSION TESTING CENTER IN THE CITY OF ILOILO,
WHICH IN EFFECT PREVENTED THE EXERCISE BY PETITIONER CITY MAYOR (sic) OF A
DISCRETIONARY POWER GRANTED BY LAW, ABSENT ANY SHOWING OF ABUSE IN THE
EXERCISE THEREOF.
THAT THE LOWER COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN HOLDING THAT DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS ORDER NO. 2002-31 PROVIDES A BASIS FOR THE ISSUANCE OF A WRIT
OF PRELIMINARY PROHIBITORTY INJUNCTION IN FAVOR OF RESPONDENT AND AS AGAINST
PETITIONER CITY MAYOR (sic).
THAT THE LOWER COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN DENYING PETITIONER'S MOTION FOR RECONSIDERATION AS
CONTAINED IN ITS ORDER OF AUGUST 15, 2003.
In its comment,12 JPV counters that the petitioner made no showing of grave abuse of
discretion by the RTC because it had established its capability to serve the entire needs of
Iloilo City for the PETC.
In its reply,13 the petitioner adverts to Department Order No. 2003-51, another DOTC order
issued on October 13, 2003 (with the subject "AN ORDER NULLIFYING SECTIONS 2 AND 3 OF
DEPARTMENT ORDER NO. 2002-31"), and submits:
In deference to the opinion of the Office of the Solicitor General dated 10 July 2003 which as
quoted verbatim "policy considerations dictate that open competition will better serve public
needs because it will result in better service for a lesser price to motor vehicle owners" and
 CONSTI LAW42

further stressed that "Further, the lifting of a quota for each lane will eschew future
litigations on the matter", Sections 2 and 3 of Department Order No. 2002-31 are hereby
nullified.

All previous and/or issuances that are found inconsistent herewith are hereby
amended.14ChanRoblesVirtualawlibrary
In the cited opinion, the Solicitor General opined and recommended that "the LTO may
validly eliminate the basis or quota of vehicles to be serviced by PETC lanes."15
Ruling of the Court
The Court grants the petition for certiorari.
A preliminary injunction is an order granted at any stage of an action or proceeding prior to
the judgment or final order requiring a party or a court, an agency, or a person to refrain
from a particular act or acts. Its essential role is preservative of the rights of the parties in
order to protect the ability of the court to render a meaningful decision,16 or in order to
guard against a change of circumstances that will hamper or prevent the granting of the
proper relief after the trial on the merits.17 Another essential role is preventive of the
threats to cause irreparable harm or injury to a party before the litigation could be resolved.
In Pahila-Garrido v. Tortogo,18 we have explained the preservative or preventive character of
injunction as a remedy in the course of the litigation, viz.:
Generally, injunction, being a preservative remedy for the protection of substantive rights or
interests, is not a cause of action in itself but merely a provisional remedy, an adjunct to a
main suit. It is resorted to only when there is a pressing necessity to avoid injurious
consequences that cannot be redressed under any standard of compensation. The
controlling reason for the existence of the judicial power to issue the writ of injunction is that
the court may thereby prevent a threatened or continuous irremediable injury to some of the
parties before their claims can be thoroughly investigated and advisedly adjudicated. The
application for the writ rests upon an alleged existence of an emergency or of a special
reason for such an order to issue before the case can be regularly heard, and the essential
conditions for granting such temporary injunctive relief are that the complaint alleges facts
that appear to be sufficient to constitute a cause of action for injunction and that on the
entire showing from both sides, it appears, in view of all the circumstances, that the
injunction is reasonably necessary to protect the legal rights of plaintiff pending the
litigation.
Reflecting the avowed roles of the remedy, Section 3, Rule 58 of the Rules of Court set the
guidelines for when the issuance of a writ of preliminary injunction is justified, namely: (a)
when the applicant is entitled to the relief demanded, and the whole or part of such relief
consists in restraining the commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited period or perpetually; or (b)
when the commission, continuance or non-performance of the act or acts complained of
during the litigation would probably work injustice to the applicant; or (c) when a party,
court, agency or a person is doing, threatening, or is attempting to do, or is procuring or
suffering to be done, some act or acts probably in violation of the rights of the applicant
respecting the subject of the action or proceeding, and tending to render the judgment
ineffectual.
Did the RTC contravene the foregoing guidelines when it granted JPV's application for the
writ of preliminary injunction?

Although the RTC had the broad discretion in dealing with JPV's application for the writ of
preliminary injunction, it was bound by the Court's exhortation against thereby prejudging
the merits of the case in Searth Commodities Corp. v. Court of Appeals:19
The prevailing rule is that courts should avoid issuing a writ of preliminary injunction which
would in effect dispose of the main case without trial. (Rivas v. Securities and Exchange
Commission, 190 SCRA 295 [1990]; Government Service and Insurance System v. Florendo,
178 SCRA 76 [1989]; and Ortigas v. Co. Ltd. Partnership v. Court of Appeals, 162 SCRA 165
[1988]). In the case at bar, if the lower court issued the desired writ to enjoin the sale of the
 CONSTI LAW43

properties premised on the aforementioned justification of the petitioners, the issuance of

the writ would be a virtual acceptance of their claim that the foreclosure sale is null and
void. (See Ortigas and Co., Ltd. Partnership v. Court of Appeals, supra). There would in effect
be a prejudgment of the main case and a reversal of the rule on the burden of proof since it
would assume the proposition which the petitioners are inceptively bound to prove. (Id.)
(bold Emphasis supplied)
If it was plain from the pleadings that the main relief being sought in Civil Case No. 03-27648
was to enjoin the petitioner from exercising its legal power as a local government unit to
consider and pass upon applications for business permits for the operation of businesses like
the PETC, and to issue business permits within its territory, we find it appalling how the RTC
casually contravened the foregoing guidelines and easily ignored the exhortation by
granting JPV's application for injunction on June 24, 2003 in the initial stage of the case.
Such granting of JPV's application already amounted to the virtual acceptance of JPV's
alleged entitlement to preventing the petitioner from considering and passing upon the
applications of other parties like Grahar to operate their own PETC in Iloilo City based on
JPV's still controversial capability to serve all the registered motor vehicles in Iloilo City
pursuant to Department Order No. 2002-31. The granting amounted to the prejudgment of
the merits of the case, something the RTC could not validly do. It apparently forgot that the
function of the writ of preliminary injunction was not to determine the merits of the case,20
or to decide controverted tacts,21 because an interlocutory injunction was but a preliminary
and preparatory order that still looked to a future final hearing, and, although contemplating
what the result of that hearing would be, it should not settle what the result should be.22
Thus, the RTC did not exercise its broad discretion soundly because it blatantly violated the
right to be heard of the petitioner, whose right to substantiate its defense of the power to
regulate businesses within its territorial jurisdiction should be fully recognized. It also
violated the right to be heard of the intervenor Grahar, whose intervention in the suit was
granted only on the same date of June 24, 2003. To stress yet again, the main relief could
not be resolved without receiving the evidence of all the parties that would settle the
contested facts.
Under the circumstances, the challenged orders of the RTC were undeniably tainted with
grave abuse of discretion amounting to lack or excess of jurisdiction. Grave abuse of
discretion means such capricious or whimsical exercise of judgment which is equivalent to
lack of jurisdiction.23 To justify the issuance of the writ of certiorari, the abuse of discretion
must be grave, as when the power is exercised in an arbitrary or despotic manner by reason
of passion or personal hostility, and the abuse must be so patent and gross as to amount to
an evasion of a positive duty or to a virtual refusal to perform the duty enjoined, or to act at
all, in contemplation of law, as to be equivalent to having acted without jurisdiction.24

Certiorari lies. According to Pahila-Garrido v. Tortogo:25

Certiorari is a writ issued by a superior court to an inferior court of record, or other tribunal
or officer, exercising a judicial function, requiring the certification and return to the former of
some proceeding then pending, or the record and proceedings in some cause already
terminated, in cases where the procedure is not according to the course of the common law.
The remedy is brought against a lower court, board, or officer rendering a judgment or order
and seeks the annulment or modification of the proceedings of such tribunal, board or
officer, and the granting of such incidental reliefs as law and justice may require. It is
available when the following indispensable elements concur, to wit:
l. That it is directed against a tribunal, board or officer exercising judicial or quasi-judicial
functions;
2. That such tribunal, board or officer has acted without or in excess of jurisdiction or with
grave abuse of discretion; and
3. That there is no appeal nor any plain, speedy and adequate remedy in the ordinary course
of law.
Certiorari being an extraordinary remedy, the party who seeks to avail of the same must
strictly observe the rules laid down by law. The extraordinary writ of certiorari may be
 CONSTI LAW44

availed of only upon a showing, in the minimum, that the respondent tribunal or officer
exercising judicial or quasi-judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion.
For a petition for certiorari and prohibition to prosper and be given due course, it must be
shown that: (a) the respondent judge or tribunal issued the order without or in excess of
jurisdiction or with grave abuse of discretion; or (b) the assailed interlocutory order is
patently erroneous, and the remedy of appeal cannot afford adequate and expeditious relief.
Yet, the allegation that the tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction or with grave abuse of
discretion will not alone suffice. Equally imperative is that the petition must satisfactorily
specify the acts committed or omitted by the tribunal, board or officer that constitute grave
abuse of discretion.
WHEREFORE, the Court GRANTS the petition for certiorari; ANNULS and SETS ASIDE the
assailed orders issued on June 24, 2003 and August 15, 2003 in Civil Case No. 03-27648 by
the Regional Trial Court, Branch 29, in Iloilo City; DISSOLVES the writ of preliminary
prohibitory injunction issued pursuant to such orders; ORDERS the Regional Trial Court,
Branch 29, in Iloilo City to resume its proceedings in Civil Case No. 03-27648 as if said orders
had not been issued, if further proceedings are still warranted; and DIRECTS respondent JPV
MOTOR VEHICLE EMISSION TESTING & CAR CARE CENTER, CO., REPRESENTED BY JIM P.
VELEZ to pay the costs of suit.
SO ORDERED.chanroblesvirtuallawlibrary
Sereno, C.J., Leonardo-De Castro, Perez, and Perlas-Bernabe, JJ., concur.chanrobleslaw

REPUBLIC V GINGOYON
This Resolution treats of the following motions:
(a) MOTION FOR PARTIAL RECONSIDERATION, dated 2 January 2006 of the decision of 19
December 2005 filed by the Office of the Solicitor General for petitioners;
(b) MOTION FOR LEAVE (To File Motion for Partial Reconsideration-in-Intervention), dated 5
January 2006 filed by counsel for petitioner-intervenor Asahikosan Corporation praying that
the attached Motion for Partial Reconsideration and Intervention dated January 5, 2006 be
admitted;
(b-1) Aforesaid MOTION FOR PARTIAL RECONSIDERATION-IN-INTERVENTION, dated January 5,
2006;
(c) MOTION FOR LEAVE (To File Motion for Partial Reconsideration-in-Intervention), dated 5
January 2006 filed by counsel for petitioner-intervenor Takenaka Corp.;
(c-1) Aforesaid MOTION FOR PARTIAL RECONSIDERATION-IN-INTERVENTION, dated 5 January
2006;
(d) MOTION FOR INTERVENTION – and – MOTION TO ADMIT THE ATTACHED MOTION FOR
RECONSIDERATION-IN-INTERVENTION (of the Decision dated 19 December 2005), dated 6
January 2006 filed by counsel for movant-in-intervention Rep. Salacnib F. Baterina; and
(d-1) Aforesaid MOTION FOR RECONSIDERATION-IN-INTERVENTION (of the Decision dated 19
December 2005) dated 6 January 2006.
We first dispose of the Motion for Partial Reconsideration filed by petitioner Republic of the
Philippines (Government). It propounds several reasons for the reconsideration of the Court’s
Decision dated 19 December 2005. Some of the arguments merely rehash points raised in
the petition and already dispensed with exhaustively in the Decision. This applies in
 CONSTI LAW45

particular to the argument that Republic Act No. 8974 does not apply to the expropriation of
the Ninoy Aquino International Airport Passenger Terminal 3 (NAIA 3), which is not a right-of-
way, site or location. This Resolution will instead focus as it should on the new arguments, as
well as the perspectives that were glossed over in the Decision.
On the newly raised arguments, there are considerable factual elements brought up by the
Government. In the main, the Government devotes significant effort in diminishing PIATCO’s
right to just compensation as builder or owner of the NAIA 3. Particularly brought to fore are
the claims relating to two entities, Takenaka Corporation (Takenaka) and Asahikosan
(Asahikosan) Corporation, who allegedly claim "significant liens" on the terminal, arising
from their alleged unpaid bills by virtue of an Engineering, Procurement and Construction
Contract they had with PIATCO. On account of these adverse claims, the Government now
claims as controvertible the question of who is the builder of the NAIA 3
The Government likewise claims as "indispensable" the need of Takenaka and Asahikosan to
provide the necessary technical services and supplies so that all the various systems and
equipment will be ready and operational in a manner that allows the Government to possess
a fully-capable international airport terminal.
The Government’s concerns that impelled the filing of its Motion for Reconsideration are
summed up in the following passage therein: "The situation the Republic now faces is that if
any part of its Php3,002,125,000 deposit is released directly to PIATCO, and PIATCO, as in the
past, does not wish to settle its obligations directly to Takenaka, Asahikosan and Fraport, the
Republic may end up having expropriated a terminal with liens and claims far in excess of its
actual value, the liens remain unextinguished, and PIATCO on the other hand, ends up with
the Php3,0002,125,000 in its pockets gratuitously."
The Court is not wont to reverse its previous rulings based on factual premises that are not
yet conclusive or judicially established. Certainly, whatever claims or purported liens
Takenaka and Asahikosan against PIATCO or over the NAIA 3 have not been judicially
established. Neither Takenaka nor Asahikosan are parties to the present action, and thus
have not presented any claim which could be acted upon by this Court. The earlier
adjudications in Agan v. PIATCO made no mention of either Takenaka or Asahikosan, and
certainly made no declaration as to their rights to any form of compensation. If there is
indeed any right to remuneration due to these two entities arising from NAIA 3, they have
not yet been established by the courts of the land.
It must be emphasized that the conclusive ruling in the Resolution dated 21 January 2004 in
Agan v. PIATCO (Agan 2004) is that PIATCO, as builder of the facilities, must first be justly
compensated in accordance with law and equity for the Government to take over the
facilities. It is on that premise that the Court adjudicated this case in its 19 December 2005
Decision.
While the Government refers to a judgment rendered by a London court in favor of Takenaka
and Asahikosan against PIATCO in the amount of US$82 Million, it should be noted that this
foreign judgment is not yet binding on Philippine courts. It is entrenched in Section 48, Rule
39 of the Rules of Civil Procedure that a foreign judgment on the mere strength of its
promulgation is not yet conclusive, as it can be annulled on the grounds of want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.1 It is
likewise recognized in Philippine jurisprudence and international law that a foreign judgment
may be barred from recognition if it runs counter to public policy.2
Assuming that PIATCO indeed has corresponding obligations to other parties relating to NAIA
3, the Court does not see how such obligations, yet unproven, could serve to overturn the
Decision mandating that the Government first pay PIATCO the amount of 3.02 Million Pesos
before it may acquire physical possession over the facilities. This directive enjoining
payment is in accordance with Republic Act No. 8974, and under the mechanism established
by the law the amount to be initially paid is that which is provisionally determined as just
compensation. The provisional character of this payment means that it is not yet final, yet
sufficient under the law to entitle the Government to the writ of possession over the
expropriated property.
 CONSTI LAW46

There are other judicial avenues outside of this Motion for Reconsideration wherein all other
claims relating to the airport facilities may be ventilated, proved and determined. Since such
claims involve factual issues, they must first be established by the appropriate trier of facts
before they can be accorded any respect by or binding force on this Court.
The other grounds raised in the Motion for Reconsideration are similarly flawed.
The Government argues that the 2004 Resolution in Agan did not strictly require the
payment of just compensation before the Government can take over the airport facilities.
Reliance is placed on the use by the Court of the word "for", instead of "before." Yet the clear
intent of that ruling is to mandate payment of just compensation as a condition precedent
before the Government could acquire physical possession over the airport facilities. The
qualification was made out of due consideration of the fact that PIATCO had already
constructed the facilities at its own expense when its contracts with the Government were
nullified.
Even assuming that "for" may be construed as not necessarily meaning "prior to", it cannot
be denied that Rep. Act No. 8974 does require prior payment to the owner before the
Government may acquire possession over the property to be expropriated. Even Rule 67
requires the disbursement of money by way of deposit as a condition precedent prior to
entitlement to a writ of possession. As the instant case is one for expropriation, our
pronouncement is worthily consistent with the principles and laws that govern expropriation
cases.
The Government likewise adopts the position raised by the Dissenting Opinion of Mr. Justice
Corona that Rep. Act No. 8974 could not repeal Rule 67 of the Rules of Court, since the
deposit of the assessed value is a procedural matter. It adds that otherwise, Rep. Act No.
8974 is unconstitutional.
Of course it is too late in the day to question the constitutionality of Rep. Act No. 8974, an
issue that was not raised in the petition. Still, this point was already addressed in the
Decision, which noted that the determination of the appropriate standards for just
compensation is a substantive matter well within the province of the legislature to fix.3 As
held in Fabian v. Desierto, if the rule takes away a vested right, it is not procedural,4 and so
the converse certainly holds that if the rule or provision creates a right, it should be properly
appreciated as substantive in nature. Indubitably, a matter is substantive when it involves
the creation of rights to be enjoyed by the owner of property to be expropriated. The right of
the owner to receive just compensation prior to acquisition of possession by the State of the
property is a proprietary right, appropriately classified as a substantive matter and, thus,
within the sole province of the legislature to legislate on.
It is possible for a substantive matter to be nonetheless embodied in a rule of procedure5 ,
and to a certain extent, Rule 67 does contain matters of substance. Yet the absorption of the
substantive point into a procedural rule does not prevent the substantive right from being
superseded or amended by statute, for the creation of property rights is a matter for the
legislature to enact on, and not for the courts to decide upon. Indeed, if the position of the
Government is sustained, it could very well lead to the absurd situation wherein the judicial
branch of government may shield laws with the veneer of irrepealability simply by absorbing
the provisions of law into the rules of procedure. When the 1987 Constitution restored to the
judicial branch of government the sole prerogative to promulgate rules concerning pleading,
practice and procedure, it should be understood that such rules necessarily pertain to points
of procedure, and not points of substantive law.
The Government also exhaustively cites the Dissenting Opinion in arguing that the
application of Rule 67 would violate the 2004 Resolution of the Court in Agan. It claims that
it is not possible to determine with reasonable certainty the proper amount of just
compensation to be paid unless it first acquires possession of the NAIA 3. Yet what the
Decision mandated to be paid to PIATCO before the writ of possession could issue is merely
the provisionally determined amount of just compensation which, under the auspices of Rep.
Act No. 8974, constitutes the proffered value as submitted by the Government itself. There is
thus no need for the determination with reasonable certainty of the final amount of just
compensation before the writ of possession may be issued. Specifically in this case, only the
 CONSTI LAW47

payment or release by the Government of the proffered value need be made to trigger the
operability of the writ of possession.
Admittedly, the 2004 Resolution in Agan could be construed as mandating the full payment
of the final amount of just compensation before the Government may be permitted to take
over the NAIA 3. However, the Decision ultimately rejected such a construction,
acknowledging the public good that would result from the immediate operation of the NAIA
3. Instead, the Decision adopted an interpretation which is in consonance with Rep. Act No.
8974 and with equitable standards as well, that allowed the Government to take possession
of the NAIA 3 after payment of the proffered value of the facilities to PIATCO. Such a reading
is substantially compliant with the pronouncement in the 2004 Agan Resolution, and is in
accord with law and equity. In contrast, the Government’s position, hewing to the strict
application of Rule 67, would permit the Government to acquire possession over the NAIA 3
and implement its operation without having to pay PIATCO a single centavo, a situation that
is obviously unfair. Whatever animosity the Government may have towards PIATCO does not
acquit it from settling its obligations to the latter, particularly those which had already been
previously affirmed by this Court.
We now turn to the three (3) motions for intervention all of which were filed after the
promulgation of the Court’s Decision. All three (3) motions must be denied. Under Section 2,
Rule 19 of the 1997 Rules of Civil Procedure the motion to intervene may be filed at any time
before rendition of judgment by the court.6 Since this case originated from an original action
filed before this Court, the appropriate time to file the motions-in-intervention in this case if
ever was before and not after resolution of this case. To allow intervention at this juncture
would be highly irregular. It is extremely improbable that the movants were unaware of the
pendency of the present case before the Court, and indeed none of them allege such lack of
knowledge.
Takenaka and Asahikosan rely on Mago v. Court of Appeals7 wherein the Court took the
extraordinary step of allowing the motion for intervention even after the challenged order of
the trial court had already become final.8 Yet it was apparent in Mago that the movants
therein were not impleaded despite being indispensable parties, and had not even known of
the existence of the case before the trial court9 , and the effect of the final order was to
deprive the movants of their land.10 In this case, neither Takenaka nor Asahikosan stand to
be dispossessed by reason of the Court’s Decision. There is no palpable due process
violation that would militate the suspension of the procedural rule.
Moreover, the requisite legal interest required of a party-in-intervention has not been
established so as to warrant the extra-ordinary step of allowing intervention at this late
stage. As earlier noted, the claims of Takenaka and Asahikosan have not been judicially
proved or conclusively established as fact by any trier of facts in this jurisdiction. Certainly,
they could not be considered as indispensable parties to the petition for certiorari. In the
case of Representative Baterina, he invokes his prerogative as legislator to curtail the
disbursement without appropriation of public funds to compensate PIATCO, as well as that as
a taxpayer, as the basis of his legal standing to intervene. However, it should be noted that
the amount which the Court directed to be paid by the Government to PIATCO was derived
from the money deposited by the Manila International Airport Authority, an agency which
enjoys corporate autonomy and possesses a legal personality separate and distinct from
those of the National Government and agencies thereof whose budgets have to be approved
by Congress.
It is also observed that the interests of the movants-in-intervention may be duly litigated in
proceedings which are extant before lower courts. There is no compelling reason to
disregard the established rules and permit the interventions belatedly filed after the
promulgation of the Court’s Decision.
WHEREFORE, the Motion for Partial Reconsideration of the petitioners is DENIED WITH
FINALITY.
The motions respectively filed by Takenaka Corporation, Asahikosan Corporation and
Representative Salacnib Baterina are DENIED. SO ORDERED.
REPUBLIC V HOLY TRINITY REALTY & DEVT CORP
 CONSTI LAW48

Land on which no agricultural activity is being conducted is not subject to the coverage of
either Presidential Decree No. 27 or Republic Act No. 6657 (Comprehensive Agrarian Reform
Law).
The Case
The petitioner appeals the decision promulgated on July 27, 2011, 1 whereby the Court of
Appeals (CA) reversed the decision issued by the Office of the President (OP) on March 1,
2010,2 and reinstated the order of the OIC-Regional Director of the Department of Agrarian
Reform in Regional Office III rendered on August 18, 2006. 3
Antecedents
Subject of the controversy is a parcel of land located in Brgy. Dakila, Malolos, Bulacan (Dakila
property) registered in the name of Freddie Santiago under Transfer Certificate of Title (TCT)
No. T-103698 of the Registry of Deeds of Bulacan with an area of 212,500 square meters.
The Dakila property used to be tenanted by Susana Surio, Cipriano Surio, Alfonso Espiritu,
Agustin Surio, Aurelio Surio, Pacifico Eugenio, Godofredo Alcoriza, Lorenza Angeles, Ramon
Manalad, Toribio Hernandez, Emerciana Montealegre, Pedro Manalad, Celerino Ramos and
Cecilia L. Martin,4 but in August 1991, these tenants freely and voluntarily relinquished their
tenancy rights in favor of Santiago through their respective sinumpaang pahayag5 in
exchange for some financial assistance and individual homelots titled and distributed in their
names, as follows:6
TCT No. Name of Tenant/Successor Area (sq. m.)
T-73006 Susana Surio 186
T-73007 Cipriano Surio 150
T-73008 Alfonso Espiritu 300
T-73009 Agustin Surio 300
T-73010 Aurelio Surio 264
T-73011 Pacifico Eugenio 300
T-73012 Godofredo Alcoriza 300
T-73013 Lorenza Angeles 300
Ramon Manalad 300
T-73014 Toribio M. Hernandez 300
Emerciana Montealegre 300
Pedro Manalad 300
T-73015 Celerino Ramos 300
T-73016 Cecilia L. Martin 300
T-73017 Pablo dela Cruz 300
T-73018 Aurelio dela Cruz 300
T-73019 Julita Leoncio 300
Anicia L. de Guzman
T-73020 Ramon Centeno 300
T-73021 Miguel Centeno 300
TOTAL 4,500

On September 17, 1992, the petitioner purchased the remaining 208,050 square meters of
the Dakila property from Santiago,7 and later caused the transfer of the title to its name as
well as subdivided the Dakila property into six lots,8 to wit:chanRoblesvirtualLawlibrary

TCT No. Area (sq. m.)

81618 50,000
81619 50,000
81620 50,000
81621 54,810
 CONSTI LAW49

73022 2,401
73023 839
TOTAL 208,050

The petitioner then developed the property by dumping filling materials on the topsoil, and
by erecting a perimeter fence and steel gate. It established its field office on the property. 9

On March 4, 1998, the Sanggunian Bayan ng Malolos passed Municipal Resolution No. 16-98
reclassifying four of the six subdivided lots belonging to the petitioner, to
wit:chanRoblesvirtualLawlibrary

MUNICIPAL RESOLUTION NO. 16-98

A RESOLUTION RE-CLASSIFYING AS RESIDENTIAL LOTS THE FOUR (4) PARCELS OF LAND

SEPARATELY COVERED BY TCT NO. 81618, TCT NO. 81619, TCT NO.81620 AND TCT NO.
81621 CONTAINING AN AREA OF 50,000 SQ MTS, 50,000 SQ. MTS, 50,000 SQ M (sic) AND
54,810 SQ M (sic) RESPECTIVELY ALL LOCATED AT DAKILA, MALOLOS, BULACAN REGISTERED
IN THE NAME OF THE HOLY TRINITY REALTY AND DEVELOPMENT CORPORATION

WHEREAS, Ms. Jennifer M. Romero, Auditor Representative of Holy Trinity Realty and
Development Corporation in [her] letter to the Sangguniang Bayan made a request for re-
classification of four parcel(s) of land registered in the name of Holy Trinity and Development
Corporation under TCT NO. 81618, TCT NO. 81619, TCT NO.81620 AND TCT NO. 81621 with
an area of 50,000 sq. m., 50,000 sq. m., 50,000 sq. m. AND 54,810 sq. m. respectively all
located at Dakila, Malolos, Bulacan.

WHEREAS, after an ocular inspection of the subject lots and matured deliberation, the
Sangguniang Bayan found merit in the request for the following reasons, thus:
1. The Properties are untenanted;cralawlawlibrary

2. That they are not fitted (sic) for agricultural use for lack of sufficient
irrigation;cralawlawlibrary

3. There are improvements already introduce[d] on the property by its owner like
construction of subdivision roads;cralawlawlibrary

4. Lack of oppositor to the intend[ed] subdivision project on the properties by its

owner;cralawlawlibrary

5. That they are more suitable for residential use considering their location vi[s]-à-vi[s] with
(sic) the residential lots in the area.

NOW THEREFORE, on motion of Hon. Romeo L. Maclang as seconded by all Sangguniang

Bayan members present,

RESOLVED, as is hereby resolved to re-classify into residential properties four (4) parcels of
land separately covered by TCT NO. 81618, TCT NO. 81619, TCT NO.81620 AND TCT NO.
81621 of the Registry of Deeds of Bulacan, containing an area of 50,000 sq. m. respectively,
registered in ownership of Holy Trinity and Development Corporation located and adjacent to
one another in Barangay Dakila of this Municipality pursuant to the power vested to this
Sangguniang [sic] by the Local Government Code of the Philippines.

RESOLVED further that the owner and/or developer of the said property shall provide
adequate [illegible] to protect the adjacent lots and its owners from any inconvenience and
 CONSTI LAW50

prejudice caused by the development of the above mentioned property.

APPROVED.

Consequently, the Municipal Planning and Development Office (MPDO) of Malolos, Bulacan
issued a Certificate of Eligibility for Conversion (Certificate of Zoning Conformance), 11 as well
as a Preliminary Approval and Locational Clearance in favor of the petitioner for its
residential subdivision project on the Dakila property.12

On August 23, 1999, the petitioner purchased from Santiago another parcel of land with an
area of 25,611 located in Barangay Sumapang Matanda, Malolos, Bulacan (Sumapang
Matanda property) and covered by TCT No. T-103697 of the Registry of Deeds of Bulacan. 13

In April 2006, a certain Silvino Manalad and the alleged heirs of Felix Surio wrote to the
Provincial Agrarian Reform Officer (PARO) of Bulacan to request an investigation of the sale
of the Dakila property.14 This was followed by the letter request of Sumapang Matanda
Barangay Agrarian Reform Council (BARC) Chairman Numeriano L. Enriquez to place the
Dakila property within the coverage of Operation Land Transfer (OLT) pursuant to
Presidential Decree No. 27, which was docketed as A-0302-0608-06, A.R. Case No. LSD-
0324’06.15

Several days later, the DAR Provincial Office of Bulacan filed a petition to annul the sale of
the Dakila property with the Provincial Agrarian Reform Adjudicator (PARAD) of Bulacan,
docketed as DARAB Case No. R-03-02-2873’06.

Ruling of the DAR Regional Office

On August 18, 2006, the OIC-Regional Director in San Fernando, Pampanga issued an order
granting the letter request of BARC Chairman Enriquez in A-0302-0608-06, A.R. Case No.
LSD-0324’06,16viz:

WHEREFORE, in the light of the foregoing premises and for the reason indicated therein, this
Office resolves to give due course to this instant request. Accordingly, the MARO and PARO
concerned are hereby DIRECTED to place within the ambit of PD 27/RA 6657 the following
titles TCT Nos. T-81618, T-81619, T-81620, T-81621, T-81622 and T-73023, all situated at
Sumapang Matanda, Malolos City, Bulacan, registered in the name of Holy Trinity Realty and
Development Corporation for distribution to qualified farmer beneficiary (sic).

Finally, the DAR reserves the right to cancel or withdraw this Order in case of
misrepresentation of facts material to its issuance and for violation of pertinent agrarian
laws including applicable implementing guidelines or rules and regulations.

SO ORDERED

The OIC-Regional Director opined that the sale of the Dakila property was a prohibited
transaction under Presidential Decree No. 27, Section 6 of Republic Act No. 6657 18 and DAR
Administrative Order No. 1, Series of 1989; and that the petitioner was disqualified from
acquiring land under Republic Act No. 6657 because it was a corporation.

Aggrieved, the petitioner assailed the order through its Motion to Withdraw/Quash/Set Aside,
citing lack of jurisdiction and denial of due process. It argued that the letter request was in
the nature of a collateral attack on its title.

Pending resolution of the Motion to Withdraw/Quash/Set Aside, the Register of Deeds issued
 CONSTI LAW51

emancipation patents (EPs) pursuant to the order of the OIC-Regional Director. The
petitioner’s titles were canceled and EPs were issued to the respondents as follows:
Emancipation
TCT No. Beneficiary/ies Area (sqm)
Patent No.
T-2007-EP 22
00783329 Victorio dela Cruz 50,000
T-2008-EP 23
00783330 Lorenzo Manalaysay 50,000
T-2009-EP24 00783331 Ricardo Marcelo, Jr. 50,000
T-2010- 00783332 Leoncio de Guzman 54,810
EP25cralawred
T-2011-EP26 00783334 Gonzalo Caspe 2,401
T-2012-EP 27
00783333 839

Almost two months after the EPs were issued, the OIC-Regional Director denied the
petitioner’s motion for reconsideration.28

Ruling of the DAR Secretary

The petitioner appealed to the DAR Secretary, submitting that: (1) the letter request for
coverage under Presidential Decree No. 27 and the subsequent filing of the petition for
annulment of sale in the DARAB constituted forum shopping; and (2) the EPs were
prematurely issued.

On November 22, 2007, DAR Secretary Nasser C. Pangandaman issued an order denying the
appeal, and holding that forum shopping was not committed because the causes of action in
the letter request and the action for cancellation of the deed of sale before the DARAB were
distinct and separate; that the EPs were regularly issued; and that the resolution of the
DARAB would not in any manner affect the validity of the EPs.

Ruling on the petitioner’s motion for reconsideration, the DAR Secretary said that the Dakila
property was not exempt from the coverage of Presidential Decree No. 27 and Republic Act
No. 6657 because Municipal Resolution No. 16-98 did not change or reclassify but merely re-
zoned the Dakila property.30

Ruling of the Office of the President

On March 1, 2010, the Office of the President (OP) reversed the ruling of DAR Secretary
Pangandaman upon its finding that the Dakila property had ceased to be suitable for
agriculture, and had been reclassified as residential land pursuant to Municipal Resolution
No. 16-98, thus:

We find merit in the appeal.

Under Section 3 (c) of RA 6657, agricultural lands refer to lands devoted to agriculture as
conferred in the said law and not classified as industrial land. Agricultural lands are only
those lands which are arable or suitable lands that do not include commercial, industrial and
residential lands.

In this case, the subject landholdings are not agricultural lands but rather residential lands.
The lands are located in a residential area. Likewise, there are agricultural activities within or
near the area. Even today, the areas in question continued (sic) to be developed as a
residential community, albeit at a snail’s pace. This can be readily gleaned from the fact that
both the City Assessor of Malolos and the Provincial Assessor of Bulacan have considered
these lands as residential for taxation purposes.

Based on the foregoing, it is clear that appellant’s landholding cannot in any language be
considered as “agricultural lands.” These lots were intended for residential use. They ceased
 CONSTI LAW52

to be agricultural lands upon approval of Municipal Resolution No. 16-98. The authority of
the municipality (now City) of Malolos to issue zoning classification is an exercise of its police
power, not the power of eminent domain. Section 20, Chapter 2, Title I of RA 7160
specifically empowers municipal and/or city councils to adopt zoning and subdivision
ordinances or regulations within its territorial jurisdiction. A zoning ordinance/resolution
prescribes, defines, and apportions a given political subdivision into specific land uses as
present and future projection of needs. The power of the local government to convert or
reclassify agricultural lands to non-agricultural lands is not subject to the approval of the
Department of Agrarian Reform.

It bears stressing that in his Decision dated April 30, 2002, as affirmed by the Department of
Agrarian Reform Adjudication Board (DARAB) in its Resolution dated March 17, 2006, Bulacan
Provincial Adjudicator Toribio Ilao, Jr., declared that the properties were not tenanted and/or
agricultural and that the alleged farmers-occupants are mere squatters thereto. These
decision and resolution were not appealed by the farmers-occupants and, as such, it became
final and executory. By declaring, in its assailed Order of November 22, 2007, that the
properties subject of the suit, were agricultural lands, the DAR Secretary thereby reversed
the said DARAB rulings, issued more than a year before, and nullified Resolution No. 16-98 of
the Municipal Council of Malolos, approved nine (9) years earlier, on March 4, 1998. Thus,
the DAR Secretary acted with grave abuse of discretion amounting to excess or lack of
jurisdiction.

IN VIEW OF THE FOREGOING, the appeal is hereby GRANTED. Accordingly, the November
22, 2007 Order and February 22, 2008 Resolution of the Department of Agrarian Reform are
hereby REVERSED and SET ASIDE.SO ORDERED.

The respondents moved to reconsider, but the OP denied their motion for reconsideration.
Hence, they appealed to the CA by petition for review.

Ruling of the CA
In the now assailed decision promulgated on July 27, 2011, the CA reversed and set aside
the decision of the OP. It declared that prior to the effectivity of Republic Act No. 6657 on
June 15, 1988 and even after the passage of Municipal Resolution No. 16-98 on March 4,
1998, the Dakila property was an agricultural land; that there was no valid reclassification
because Section 20 of Republic Act No. 7160 (The Local Government Code) and
Memorandum Circular No. 54 required an ordinance, not a resolution; and that findings of
the DAR on the Dakila property being an agricultural land should be respected, 35subject to
the clarification to the effect that its determination was only limited to the issue of whether
the Dakila property was an agricultural land covered by Republic Act No. 6657.

The petitioner sought reconsideration but its motion for that purpose was denied. Hence,
this appeal by petition for review on certiorari.

Issues

The petitioner presents the following issues for our consideration:

I.WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRONEOUSLY OMITTED TO RULE
UPON, ALBEIT WITHOUT CITING ANY VALID REASONS, THE VARIOUS INTERRELATED ISSUES
PROFFERED IN PETITIONER’S COMMENT RELATIVE TO DAR’S INCLUSION OF THE SUBJECT
DAKILA PROPERTY UNDER THE COVERAGE OF THE AGRARIAN REFORM LAW, TO WIT: A.)
RESPONDENT-GRANTEES OF EMANCIPATION PATENTS FROM DAR ARE NOT LEGITIMATE
TENANTS OF THE DAKILA PROPERTY; B.) THE SALE AND TRANSFER OF TITLES IN THE NAME
OF PETITIONER HAVE NOT HERETOFORE BEEN NULLIFIED EITHER BY THE DARAB CENTRAL
 CONSTI LAW53

OFFICE OR THE REGULAR COURTS; C.) THE BONAFIDE TENANTS OF THE DAKILA PROPERTY
HAVE VALIDLY SURRENDERED THEIR TENANCY RIGHTS IN FAVOR OF PETITIONER’S
PREDECESSOR-IN-INTEREST; D.) THE DAKILA PROPERTY WAS NO LONGER TENANTED AND,
FURTHER, WAS NO LONGER SUITABLE TO AGRICULTURE, AT THE TIME OF ITS COVERAGE
UNDER AGRARIAN REFORM, ITS ACTUAL USE BEING ALREADY RESIDENTIAL
II.WHETHER OR NOT THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN FAILING TO
RULE ON THE ILLEGALITY OF THE MANNER BY WHICH THE DAR CAUSED THE SUMMARY
COVERAGE OF THE DAKILA PROPERTY UNDER THE CARP, ITS EXTRA-JUDICIAL CANCELLATION
OF PETITIONER’S TITLES WITHOUT DUE PROCESS OF LAW, AND ITS PREMATURE ISSUANCE
OF EMANCIPATION PATENTS IN FAVOR OF RESPONDENTS
III.WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRONEOUSLY APPLIED THE
PROVISIONS OF RA 6657 IN RESOLVING THE SUBJECT PETITION, EVEN THOUGH THE DAR
PLACED THE SUBJECT DAKILA PROPERTY UNDER THE COVERAGE OF PRESIDENTIAL DECREE
NO. 27
IV. WHETHER OR NOT HEREIN RESPONDENT’S PETITION FOR REVIEW A QUO OUGHT TO
HAVE BEEN DISMISSED OUTRIGHT BY THE HONORABLE COURT OF APPEALS FOR FAILURE TO
COMPLY WITH SECTION 4, RULE 7 OF THE 1997 REVISED RULES OF CIVIL PROCEDURE. 37

The petitioner argues that the CA ignored issues vital to the complete determination of the
parties’ respective rights over the Dakila property.

Firstly, the CA should have ruled on the propriety of issuing the EPs. In view of the pending
petition before the DARAB, the DAR should have withheld the issuance of the EPs. Even
granting that a final decision had already been rendered by the DARAB, the issuance of the
EPs remained premature inasmuch as the DAR had not yet commenced any court
proceedings for the cancellation of the petitioner’s title. Accordingly, the petitioner’s title
remained indefeasible and could not be disturbed by the collateral orders by the OIC-
Regional Director and the DAR Secretary.

Secondly, the petitioner was deprived of due process because the requirements of notice
and the conduct of a public hearing and a field investigation were not strictly complied with
by the DAR pursuant to Republic Act No. 6657 and DAR Administrative Order No. 12, Series
of 1998.

Thirdly, the CA erred in placing the Dakila property under the coverage of Republic Act No.
6657 when the order of the OIC-Regional Director applied the provisions of Presidential
Decree No. 27. The two laws should be differentiated from each other; on one hand,
Presidential Decree No. 27 required the beneficiary to be a tenant-farmer of an agricultural
land devoted to rice or corn, while on the other Republic Act No. 6657 was relatively broader
and covered all public and private agricultural lands regardless of the tenurial arrangement
and the commodity produced.

Lastly, the CA should have dismissed the respondents’ petition for review due to its
defective certification, pointing to the verification having been executed by the respondents
despite the letter request having been signed by BARC Chairman Enriquez; and assailing the
verification for containing the statement that the allegations therein were based on their
“knowledge and belief” instead of their “personal knowledge and authentic records” as
required by the Rules of Court.

The respondents countered that: (1) the CA correctly set aside the issue of whether or not
they were qualified beneficiaries, because that was not the issue raised in the letter request;
(2) the CA could not have ruled on the validity of the sale of the Dakila property in light of
the pending action in the DARAB; (3) it was within the jurisdiction of the DAR to determine
whether or not the respondents were qualified beneficiaries; (4) the waivers by the tenants
were illegal; and (5) the issuance of the EPs was a necessary consequence of placing the
 CONSTI LAW54

Dakila property under the coverage of Presidential Decree No. 27.

In view of the foregoing, the Court needs to consider and resolve the following:
1. Did the CA gravely err in limiting its decision to the issue of whether or not the Dakila
property was subject to the coverage of Republic Act No. 6657?
2. Was the Dakila property agricultural land within the coverage of Republic Act No.
6657 or Presidential Decree No. 27?
3. Was the issuance of the EPs pursuant to the August 16, 2006 order of the DAR
Regional Office proper?
Ruling: We reverse the CA, and reinstate the decision of the OP.

I. Procedural Issue

We first resolve the issue of the supposedly defective verification.

The verification of a petition is intended to secure an assurance that the allegations

contained in the petition have been made in good faith, are true and correct and not merely
speculative.38 This requirement affects the form of the pleading, and its non-compliance will
not render the pleading defective. It is a formal, not a jurisdictional requisite. 39 The courts
may order the correction of the pleading if the verification is lacking, and may even act on
an unverified pleading if doing so will serve the ends of justice. 40

Under the foregoing, the CA rightly allowed the petition for review of the respondents
despite the statement that the allegations therein were based on their “knowledge and
belief.” We underscore that the defect was even lifted upon the voluntary submission by the
respondents themselves of their corrected verification in order to comply with the Rules of
Court.

We cannot also subscribe to the argument that the respondents were not appropriate parties
to sign the verification. They were, considering that when the DAR issued the EPs, they
became the real parties in interest in the proceedings, giving them the requisite personality
to sign the verification. Moreover, there is no question that the party himself need not sign
the verification, for it was enough that the party’s representative, lawyer, or any person who
personally knew the truth of the facts alleged in the pleadings could sign the
verification.41 In any event, the respondents, as the identified beneficiaries, had legal
standing and interest to intervene to protect their rights or interests under Republic Act No.
6657. This is clear from Section 19 of Republic Act No. 9700, 42 which amended Republic Act
No. 6657 by adding Section 50-A, to wit:

Section 19. Section 50 of Republic Act No. 6657, as amended, is hereby further amended by
adding Section 50-A to read as follows:
Section 50-A. Exclusive Jurisdiction on Agrarian Dispute. – x x x

In cases where regular courts or quasi-judicial bodies have competent jurisdiction, agrarian
reform beneficiaries or identified beneficiaries and/or their associations shall have legal
standing and interest to intervene concerning their individual or collective rights and/or
interests under the CARP.

xxxx
II. Courts can pass upon matters related to the issues raised by the parties

As a general rule, appellate courts are precluded from discussing and delving into issues
that are not raised by the parties. The pertinent rule is Section 8, Rule 51 of the Rules of
Court, to wit:
 CONSTI LAW55

Section 8. Questions that may be decided. – No error which does not affect the jurisdiction
over the subject matter or the validity of the judgment appealed from or the proceedings
therein will be considered unless stated in the assignment of errors, or closely related to or
dependent on an assigned error and properly argued in the brief, save as the court may pass
upon plain errors and clerical errors.

In Philippine National Bank v. Rabat,43 the Court explained how this rule operates, thus:

In his book, Mr. Justice Florenz D. Regalado commented on this section, thus:
1. Sec. 8, which is an amendment of the former Sec. 7 of this Rule, now includes some
substantial changes in the rules on assignment of errors. The basic procedural rule is that
only errors claimed and assigned by a party will be considered by the court, except errors
affecting its jurisdiction over the subject matter. To this exception has now been added
errors affecting the validity of the judgment appealed from or the proceedings
therein.

Also, even if the error complained of by a party is not expressly stated in his
assignment of errors but the same is closely related to or dependent on an
assigned error and properly argued in his brief, such error may now be considered
by the court. These changes are of jurisprudential origin.

2. The procedure in the Supreme Court being generally the same as that in the Court of
Appeals, unless otherwise indicated (see Secs. 2 and 4, Rule 56), it has been held that the
latter is clothed with ample authority to review matters, even if they are not assigned as
errors on appeal, if it finds that their consideration is necessary in arriving at a just decision
of the case. Also, an unassigned error closely related to an error properly assigned (PCIB vs.
CA, et al., L-34931, Mar. 18, 1988), or upon which the determination of the question raised
by error properly assigned is dependent, will be considered by the appellate court
notwithstanding the failure to assign it as error (Ortigas, Jr. vs. Lufthansa German Airlines, L-
28773, June 30, 1975; Soco vs. Militante, et al., G.R. No. 58961, June 28, 1983).

It may also be observed that under Sec. 8 of this Rule, the appellate court is authorized to
consider a plain error, although it was not specifically assigned by the appellant (Dilag vs.
Heirs of Resurreccion, 76 Phil. 649), otherwise it would be sacrificing substance for
technicalities.44 (Emphasis supplied)

Conformably with the foregoing, the CA is vested with sufficient authority and discretion to
review matters, not assigned as errors on appeal, if it finds that consideration thereof is
necessary in arriving at a complete and just resolution of the case or to serve the interests
of justice or to avoid dispensing piecemeal justice.45 In fact, the CA is possessed with
inherent authority to review unassigned errors that are closely related to an error properly
raised, or upon which the determination of the error properly assigned is dependent, or
where it finds that consideration thereof is necessary in arriving at a just decision of the
case.46

It cannot be gainsaid that the validity of the EPs was closely intertwined with the issue of
whether the Dakila property was covered by the agrarian reform laws. When the CA declared
that the Dakila property came within the coverage of Republic Act No. 6657, the CA barely
scraped the surface and left more questions unresolved rather than writing finis on the
matter. To recall, this case originated from the letter of BARC Chairman Enriquez requesting
that the Dakila property be placed under the OLT pursuant to Presidential Decree No. 27.
But, as the petitioner correctly argues, the two laws, although similarly seeking to alleviate
the plight of landless farmers or farmworkers from the bondage of tilling the soil, are distinct
from each other. Republic Act No. 6657 is broader in scope than Presidential Decree No. 27,
for the former applies to all agricultural lands in which agricultural activities are conducted,
 CONSTI LAW56

while the latter requires that the covered agricultural land be tenanted and primarily
devoted to rice or corn cultivation.

In Sigre v. Court of Appeals,47 the Court also stated:

[T]he Court need not belabor the fact that R.A. 6657 or the CARP Law operates distinctly
from P.D. 27. R.A. 6657 covers all public and private agricultural land including other lands
of the public domain suitable for agriculture as provided for in Proclamation No. 131 and
Executive Order No. 229; while, P.D. 27 covers rice and corn lands. On this score, E.O. 229,
which provides for the mechanism of the Comprehensive Agrarian Reform Program,
specifically states: “(P)residential Decree No. 27, as amended, shall continue to operate with
respect to rice and corn lands, covered thereunder. x x x” It cannot be gainsaid, therefore,
that R.A. 6657 did not repeal or supersede, in any way, P.D. 27. And whatever provisions of
P.D. 27 that are not inconsistent with R.A. 6657 shall be suppletory to the latter, and all
rights acquired by the tenant-farmer under P.D. 27 are retained even with the passage of
R.A. 6657.48

In addition, the tenurial instruments issued to agrarian reform beneficiaries differ under
these laws. Ownership of the beneficiary under Presidential Decree No. 27 is evidenced by
an EP while a certificate of land ownership award (CLOA) is issued under Republic Act No.
6657. For this reason, the CA could not have simply set aside the issue of whether the EPs
issued to the respondents were validly made by the DAR considering its declaration that the
Dakila property was subject to Republic Act No. 6657.

III. The Dakila property was not an agricultural landwithin the coverage of R.A.
No. 6657 or P.D. No. 27

The CA declared that the Dakila property as an agricultural land; and that there was no valid
reclassification under Municipal Resolution No. 16-98 because the law required an ordinance,
not a resolution.

We agree in part with the CA.

Under Republic Act No. 7160, local government units, such as the Municipality of Malolos,
Bulacan, are vested with the power to reclassify lands. However, Section 20, Chapter II, Title
I of Republic Act No. 7160 ordains:

Section 20. Reclassification of Lands. – (a) A city or municipality may, through an

ordinance passed by the sanggunian after conducting public hearings for the
purpose, authorize the reclassification of agricultural lands and provide for the manner of
their utilization or disposition in the following cases: (1) when the land ceases to be
economically feasible and sound for agricultural purposes as determined by the Department
of Agriculture or (2) where the land shall have substantially greater economic value for
residential, commercial, or industrial purposes, as determined by the sanggunian concerned:
x x x. (Emphasis supplied)

Clearly, an ordinance is required in order to reclassify agricultural lands, and such may only
be passed after the conduct of public hearings.

The petitioner claims the reclassification on the basis of Municipal Resolution No. 16-98.
Given the foregoing clarifications, however, the resolution was ineffectual for that purpose.
A resolution was a mere declaration of the sentiment or opinion of the lawmaking body on a
specific matter that was temporary in nature, and differed from an ordinance in that the
latter was a law by itself and possessed a general and permanent character. 49 We also note
 CONSTI LAW57

that the petitioner did not show if the requisite public hearings were conducted at all. In the
absence of any valid and complete reclassification, therefore, the Dakila property remained
under the category of an agricultural land.

Nonetheless, the Dakila property was not an agricultural land subject to the coverage of
Republic Act No. 6657 or Presidential Decree No. 27.

Verily, the basic condition for land to be placed under the coverage of Republic Act No. 6657
is that it must either be primarily devoted to or be suitable for agriculture. 50 Perforce, land
that is not devoted to agricultural activity is outside the coverage of Republic Act No.
6657.51 An agricultural land, according to Republic Act No. 6657, is one that is devoted to
agricultural activity and not classified as mineral, forest, residential, commercial or industrial
land.52Agricultural activity includes the “cultivation of the soil, planting of crops, growing of
fruit trees, raising livestock, poultry or fish, including the harvesting of such farm products;
and other farm activities and practices performed by a farmer in conjunction with such
farming operations done by persons whether natural or juridical.”53

Consequently, before land may be placed under the coverage of Republic Act No. 6657, two
requisites must be met, namely: (1) that the land must be devoted to agricultural activity;
and (2) that the land must not be classified as mineral, forest, residential, commercial or
industrial land. Considering that the Dakila property has not been classified as mineral,
forest, residential, commercial or industrial, the second requisite is satisfied. For the first
requisite to be met, however, there must be a showing that agricultural activity is
undertaken on the property.

It is not difficult to see why Republic Act No. 6657 requires agricultural activity in order to
classify land as agricultural. The spirit of agrarian reform laws is not to distribute lands per
se, but to enable the landless to own land for cultivation. This is why the basic qualification
laid down for the intended beneficiary is to show the willingness, aptitude and ability to
cultivate and make the land as productive as possible.54 This requirement conforms with the
policy direction set in the 1987 Constitution to the effect that agrarian reform laws shall be
founded on the right of the landless farmers and farmworkers to own, directly or collectively,
the lands they till.55 In Luz Farms v. Secretary of the Department of Agrarian Reform,56 we
even said that the framers of the Constitution limited agricultural lands to the “arable and
suitable agricultural lands.”

Here, no evidence was submitted to show that any agricultural activity – like cultivation of
the land, planting of crops, growing of fruit trees, raising of livestock, or poultry or fish,
including the harvesting of such farm products, and other farm activities and practices –
were being performed on the Dakila property in order to subject it to the coverage of
Republic Act No. 6657. We take particular note that the previous tenants had themselves
declared that they were voluntarily surrendering their tenancy rights because the land was
not conducive to farming by reason of its elevation, among others. 57 Also notable is the
second Whereas Clause of Municipal Resolution No. 16-98, which mentioned that the Dakila
property was not fit for agricultural use due to lack of sufficient irrigation and that it was
more suitable for residential use, thus:

WHEREAS, after an ocular inspection of the subject lots and matured deliberation, the
Sangguniang Bayan found merit in the request for the following reasons, thus:
1. The properties are untenanted;

2. That they are not fitted [sic] for agricultural use for lack of sufficient irrigation;

3. There are improvements already introduce[d] on the property by its owner like
construction of subdivision roads;
 CONSTI LAW58

4. Lack of oppositor to the intend[ed] subdivision project on the properties by its owner;

5. That they are more suitable for residential use considering their location viz-a-viz (sic)
with (sic) the residential lots in the area.58 (Emphasis supplied)

The terse statement by the OIC-Regional Director that the Dakila property would still be
subject to Republic Act No. 6657 should Presidential Decree No. 27 be inapplicable 59 did not
meet the requirements under Republic Act No. 6657. Section 7 of Republic Act No. 6657
identified rice and corn lands subject to Presidential Decree No. 27 for priority distribution in
the first phase and implementation of the CARP. Insofar as the interplay of these two laws
was concerned, the Court has said that during the effectivity of the Republic Act No. 6657
and in the event of incomplete acquisition under Presidential Decree No. 27, the former
should apply, with the provisions of the latter and Executive Order No. 228 60 having only
suppletory effect.61

Even if we supplemented the provisions of Presidential Decree No. 27, the outcome is still
the same, because the Dakila property was still not within the scope of the law. For land to
be covered under Presidential Decree No. 27, it must be devoted to rice or corn crops, and
there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite is
absent, the land must be excluded. Hence, exemption from coverage followed when the land
was not devoted to rice or corn even if it was tenanted; or the land was untenanted even
though it was devoted to rice or corn.62 Based on these conditions, the DAR Regional Office
erred in subjecting the Dakila property under the OLT.

The first requirement, that the land be devoted to rice or corn cultivation, was not
sufficiently established. In this regard, the OIC-Regional Director inaccurately based his
holding on the report submitted by the Legal Services Division that—

[P]ortion of the property embraced under TCT No. 103697 with an area of 2.5611
hectares more or less, was placed under PD [No.] 27 and subsequently an approved survey
plan (Psd-03-020270) has been prepared which was then the basis of the issuance of titles in
favor of Felix Surio and Silvino Manalad under EP Nos. 345262 and 342561.On the other
hand, the land subject of this controversy was, likewise, subdivided and now covered by an
approved plan ASP No. Psd-031410-066532.63
What can be gathered from the report of the Legal Services Division was that the land
owned by the petitioner and covered by Presidential Decree No. 27 was the Sumapang
Matanda property under TCT No. 103697. As to the Dakila property, we can only infer from
the report that it was merely subdivided. The report did not mention whatsoever the
agricultural activities performed in the Dakila property. Nor was there a finding that the
Dakila property was devoted to either rice or corn cultivation as to justify its coverage under
Presidential Decree No. 27. Such a finding was necessary, for the Court has observed
in Solmayor v. Arroyo:
Although this Court will not disregard the evidence presented by petitioners that the land is
devoted to rice and corn crops in 1993, when the ocular inspection by the DAR personnel
was conducted, it must be noted that around the time of the passage of Presidential Decree
No. 27 up to 1978, when the subject property was placed under the coverage of Operation
Land Transfer, the available evidence issued and certified by the different government
agencies, closer in time to the mentioned time frame will show that respondent’s property
has, indeed, been classified as within the residential and commercial zones of Davao City. It
cannot escape the notice of this Court that more than a decade before the issuance of the
said ocular investigation report stating that the land is devoted to agricultural production,
government agencies equipped with the technical expertise to determine the proper
classification of the subject land have already determined that the land is part of the
residential and commercial zones of Davao City making it suitable for other urban use.
 CONSTI LAW59

Therefore, it is only reasonable to conclude, based on the certification of various executive

agencies issued when this controversy arose, that at the time of the passage of Presidential
Decree No. 27, respondent’s property was not agricultural.
For land to come within the coverage of the OLT, indeed, there must be a showing that it is
devoted to the cultivation of rice or corn, and there must be a system of share-crop or lease
tenancy obtaining on October 21, 1972, the time when Presidential Decree No. 27 took
effect.66 Unfortunately, no such evidence was presented, nor was there any field
investigation conducted to verify whether or not the landholding was primarily devoted to
the cultivation of rice or corn. Accordingly, the Dakila property should be excluded from the
OLT.

The DAR Secretary affirmed the validity of the EPs in favor of the respondents
only “pursuant to the Order of the Regional Director.”67 We note, however, that the evidence
to establish in the proceedings below that they or their predecessors had been tenants of
the petitioner’s predecessor-in-interest to make them the rightful beneficiaries of the Dakila
property was severely wanting. For tenancy to exist, there must be proof that: (1) the parties
are the landholder and the tenant; (2) the subject is agricultural land; (3) there is consent;
(4) the purpose is agricultural production; (5) there is consideration; and (6) there is a
sharing of the harvests. All these requisites are necessary to create a tenancy relationship,
and the absence of one or more of them will not make the alleged tenant a de
facto tenant.69 Unless a person has established his status as a de jure tenant, he is not
entitled to security of tenure; nor is he covered by the land reform program of the
Government under the existing tenancy laws. Here, the consent to establish a tenant-
landlord relationship was manifestly absent. In view of the petitioner’s repeated denial of the
tenancy, the respondents ought then to establish the tenancy relationship, but did not do so.
Tenancy could not be presumed, but must be established by evidence; its mere allegation is
neither evidence nor equivalent to proof of its existence.

There was also no showing that the respondents were engaged in any agricultural activities,
or agreed with Santiago or the petitioner on the sharing of harvests. The OIC-Regional
Director obviously disregarded the affidavit of Barangay Captain Felino M. Teodoro of Dakila,
Malolos, Bulacan stating that the respondents were never the actual farmers on the Dakila
property.72

IV. The petitioner was deprived of due process

The petitioner posits that it was denied due process by the failure of the OIC-Regional
Director to see to the compliance with the procedures outlined by Republic Act No. 6657 and
Presidential Decree No. 27. It claims that the OIC-Regional Director resorted to “procedural
shortcuts” and irregularities73 in issuing the EPs to the respondents.

We agree with the petitioner’s position.

In Reyes v. Barrios, we identified the procedural requirements that must be followed prior to
the issuance of an EP, viz:
The Primer on Agrarian Reform enumerates the steps in transferring the land to the tenant-
tiller, thus:
a. First step: the identification of tenants, landowners, and the land covered by OLT.
b. Second step: land survey and sketching of the actual cultivation of the tenant to
determine parcel size, boundaries, and possible land use;
c. Third step: the issuance of the Certificate of Land Transfer (CLT). To ensure accuracy and
safeguard against falsification, these certificates are processed at the National Computer
Center (NCC) at Camp Aguinaldo
d. Fourth step: valuation of the land covered for amortization computation; e. Fifth step:
amortization payments of tenant-tillers over fifteen (15) year period; and
f. Sixth step: the issuance of the Emancipation Patent.
 CONSTI LAW60

Thus, there are several steps to be undertaken before an Emancipation Patent can be
issued. x x x.

xxxx

Furthermore, there are several supporting documents which a tenant-farmer must submit
before he can receive the Emancipation Patent, such as:
a. Application for issuance of Emancipation Patent;
b. Applicant's (owner's) copy of Certificate of Land Transfer.
c. Certification of the landowner and the Land Bank of the Philippines that the applicant has
tendered full payment of the parcel of land as described in the application and as actually
tilled by him;
d. Certification by the President of the Samahang Nayon or by the head of farmers'
cooperative duly confirmed by the municipal district officer (MDO) of the Ministry of Local
Government and Community Development (MLGCD) that the applicant is a full-fledged
member of a duly registered farmers' cooperative or a certification to these effect;
e. Copy of the technical (graphical) description of the land parcel applied for prepared by the
Bureau of Land Sketching Team (BLST) and approved by the regional director of the Bureau
of Lands;
f. Clearance from the MAR field team (MARFT) or the MAR District Office (MARDO) legal
officer or trial attorney; or in their absence, a clearance by the MARFT leader to the effect
that the land parcel applied for is not subject of adverse claim, duly confirmed by the legal
officer or trial attorney of the MAR Regional Office or, in their absence, by the regional
director;
g. Xerox copy of Official Receipts or certification by the municipal treasurer showing that the
applicant has fully paid or has effected up-to-date payment of the realty taxes due on the
land parcel applied for; and
h. Certification by the MARFT leader whether applicant has acquired farm machineries from
the MAR and/or from other government agencies.
Majority of these supporting documents are lacking in this case. Hence, it was improper for
the DARAB to order the issuance of the Emancipation Patent in favor of respondent without
the required supporting documents and without following the requisite procedure before an
Emancipation Patent may be validly issued.

Furthermore, Section 16 of Republic Act No. 6657 outlines the procedure in acquiring private
lands subject to its coverage, viz:

Section 16. Procedure for Acquisition of Private Lands. - For purposes of acquisition of
private lands, the following procedures shall be followed:

(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send
its notice to acquire the land to the owners thereof, by personal delivery or registered mail,
and post the same in a conspicuous place in the municipal building and barangay hall of the
place where the property is located. Said notice shall contain the offer of the DAR to pay a
corresponding value in accordance with the valuation set forth in Sections 17, 18 and other
pertinent provisions hereof.

(b) Within thirty (30) days from the date of receipt of written notice by personal delivery or
registered mail, the landowners, his administrator or representative shall inform the DAR of
his acceptance or rejection of the former.

(c) If the landowner accepts the offer of the DAR, the Land Bank of the Philippines shall pay
the landowner the purchase price of the land within thirty (30) days after he executes and
delivers a deed of transfer in favor of the Government and surrenders the Certificate of Title
and other muniments of title.
 CONSTI LAW61

(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative
proceedings to determine the compensation for the land by requiring the landowner, the LBP
and other interested parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from the receipt of notice. After the expiration of the above period,
the matter is deemed submitted for decision. The DAR shall decide the case within thirty
(30) days after it is submitted for decision.

(e) Upon receipt by the landowner of the corresponding payment or in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the
DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall
take immediate possession of the land and shall request the proper Register of Deeds to
issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The
DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.

(f) Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.

Under Republic Act No. No. 6657 and DAR A.O. No. 12, Series of 1989, two notices should be
sent to the landowner — the first, the notice of coverage; and the other, the notice of
acquisition.

The Court cannot consider and declare the proceedings conducted by the OIC-Regional
Director as a substantial compliance with the notice requirements. Compliance with such
requirements, being necessary to render the implementation of the CARP valid, was
mandatory. As the Court observed in Roxas & Co., Inc. v. Court of Appeals:

For a valid implementation of the CAR Program, two notices are required: (1) the Notice of
Coverage and letter of invitation to a preliminary conference sent to the
landowner, the representatives of the BARC, LBP, farmer beneficiaries and other
interested parties pursuant to DAR A.O. No. 12, Series of 1989; and (2) the Notice
of Acquisition sent to the landowner under Section 16 of the CARL.

The importance of the first notice, i.e., the Notice of Coverage and the letter of
invitation to the conference, and its actual conduct cannot be understated. They
are steps designed to comply with the requirements of administrative due
process. The implementation of the CARL is an exercise of the State’s police
power and the power of eminent domain. To the extent that the CARL prescribes
retention limits to the landowners, there is an exercise of police power for the
regulation of private property in accordance with the Constitution. But where, to
carry out such regulation, the owners are deprived of lands they own in excess of
the maximum area allowed, there is also a taking under the power of eminent
domain. The taking contemplated is not a mere limitation of the use of the land.
What is required is the surrender of the title to and physical possession of the
said excess and all beneficial rights accruing to the owner in favor of the farmer
beneficiary. The Bill of Rights provides that "[n]o person shall be deprived of life,
liberty or property without due process of law." The CARL was not intended to
take away property without due process of law. The exercise of the power of
eminent domain requires that due process be observed in the taking of private
property.

xxxx

Clearly then, the notice requirements under the CARL are not confined to the Notice of
 CONSTI LAW62

Acquisition set forth in Section 16 of the law. They also include the Notice of Coverage first
laid down in DAR A. O. No. 12, Series of 1989 and subsequently amended in DAR A. O. No. 9,
Series of 1990 and DAR A. O. No. 1, Series of 1993. This Notice of Coverage does not merely
notify the landowner that his property shall be placed under CARP and that he is entitled to
exercise his retention right; it also notifies him, pursuant to DAR A. O. No. 9, Series of 1990,
that a public hearing shall be conducted where he and representatives of the concerned
sectors of society may attend to discuss the results of the field investigation, the land
valuation and other pertinent matters. Under DAR A. O. No. 1, Series of 1993, the Notice of
Coverage also informs the landowner that a field investigation of his landholding shall be
conducted where he and the other representatives may be present. 77 (Emphasis supplied)

The procedures provided by Section 16 of Republic Act No. 6657 and its relevant DAR
administrative issuances are to ensure the compliance with the due process requirements of
the law. The result of their non-compliance is to deprive the landowner of its constitutional
right to due process.

The Court has carefully explained in Roxas & Co., Inc. v. Court of Appeals that the taking
under the CARL is an exercise of police power as well as of eminent domain. The taking of
the landholding by the State effectively results in the surrender by the landowner of its title
and physical possession to the beneficiaries. Hence, compensation should be given to the
landowner prior to the taking. This is the clear-cut directive of Section 16(e) of Republic Act
No. 6657 which mandates the DAR to take immediate possession of the land only after full
payment and to thereafter request the Register of Deeds to transfer title in the name of the
Republic of the Philippines, and later on to the intended beneficiaries.

However, there was no evidence of payment prior to the cancellation of the petitioner’s TCTs
submitted here. The requirement of prior payment was found in Republic Act No. 6657 and
Presidential Decree No. 27, under which full payment by the intended beneficiary was a
condition prior to the award of an EP. We have explicitly pronounced in Coruña v.
Cinamin78 that the emancipation of tenants does not come free. The transfer of lands under
Presidential Decree No. 27 remained subject to the terms and conditions provided in said
law. In Paris v. Alfeche,79 we said:

x x x. Section 2 of PD 266 states:

“After the tenant-farmer shall have fully complied with the requirements for a grant of title
under Presidential Decree No. 27, an Emancipation Patent and/or Grant shall be issued by
the Department of Agrarian Reform on the basis of a duly approved survey plan.”

On the other hand, paragraphs 8 and 9 of PD 27 reads as follows:

“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 ½)
times the average harvest of three normal crop years immediately preceding the
promulgation of this Decree;

“The total cost of the land, including interest at the rate of six (6) per centum per annum,
shall be paid by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations[.]”

Although, under the law, tenant farmers are already deemed owners of the land
they till, they are still required to pay the cost of the land, including interest,
within fifteen years before the title is transferred to them.80 (Emphasis supplied)
The unquestioned non-compliance with the procedures set by Republic Act No. 6657 and its
relevant rules and regulations further denied to the petitioner the exercise of its right of
retention.81 In doing so, the OIC-Regional Director disregarded this constitutionally
guaranteed right. We cannot understate the value of the right of retention as the means to
 CONSTI LAW63

mitigate the effects of compulsory land acquisition by balancing the rights of the landowner
and the tenant and by implementing the doctrine that social justice is not meant to
perpetrate an injustice against the landowner.82

We also consider the manner by which the Dakila property was apportioned to the
respondents highly suspect. It appears from the face of the EPs that the individual lots were
allocated based on how the landholding was subdivided by the petitioner. Moreover, all the
respondents were awarded lots exceeding three hectares in violation of Section 23 of
Republic Act No. 6657, which provides that “[n]o qualified beneficiary may own more than
three (3) hectares of agricultural land.”

In fine, the order of the OIC-Regional Director was patently null and void. The denial of due
process to the petitioner sufficed to cast the impress of nullity on the official act thereby
taken. A decision rendered without due process is void ab initio and may be attacked directly
or collaterally.83 All the resulting acts were also null and void. Consequently, the EPs awarded
to the respondents should be nullified.

WHEREFORE, the Court GRANTS the petition for review

on certiorari; REVERSES and SETS ASIDE the decision promulgated on July 27, 2011 by the
Court of Appeals; REINSTATES the assailed decision of the Office of the President issued on
March 1, 2010; DIRECTS the cancellation of Emancipation Patents No. 00783329, No.
00783330, No. 0078331, No. 0078332, No. 0078333, and No. 0078334 issued to the
respondents for being NULL and VOID; and ORDERS the respondents to pay the costs of
suit.

SO ORDERED.

Sereno, C.J., Leonardo-De Castro, Perez, and Perlas-Bernabe, JJ., concur.

CITY OF MANILA V CHINESE COMMUNITY

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
 CONSTI LAW64

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 becomequasi-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 forpublic 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
 CONSTI LAW65

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 thestatutes 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
 CONSTI LAW66

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
improvementwhich 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.,
 CONSTI LAW67

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
 CONSTI LAW68

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. Saldaña (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
 CONSTI LAW69

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 theduty 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
 CONSTI LAW70

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 aparticular 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.
 CONSTI LAW71

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 Avanceña, JJ., concur.
 CONSTI LAW72

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
 CONSTI LAW73

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.
 CONSTI LAW74

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.
 CONSTI LAW75

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
 CONSTI LAW76

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
 CONSTI LAW77

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 necessityand 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
 CONSTI LAW78

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.

KNECHT VS BAUTISTA,GR L-51078

FERNANDEZ, J.:

This is a petition for certiorari and prohibition filed by Cristina de Knecht against the
Honorable Pedro JL. Bautista, as Judge presiding over Branch III of the Court of First Instance
of Rizal (Pasay City), and the Republic of the Philippines pines seeking the following relief:

WHEREFORE, petitioner respectfully prays that judgment be rendered annulling the order for
immediate possession issued by respondent court in the expropriation proceedings and
commanding respondents to desist from further proceedings in the expropriation action or
the order for immediate possession issued in said action, with costs.

Petitioner prays that a restraint order or writ of preliminary injunction be issued ex-
parte enjoining respondents, their representative representative and agents from enforcing
the here questioned order for mediate posession petitioner offering to post a bond executed
to the parties enjoined in an amount to be fixed by the Court to the effect that she will pay
to such parties all damages which they may sustain by reason of the injunction if the Court
should finally decide she is not entitled there

She prays for such other remedy as the Court may deem just and equitable in the premises.

Quezon City for July 1979. 1

The petitioner alleges that than ten (10) years ago, the government through the Department
of Public Workmen's and Communication (now MPH) prepared a to Epifanio de los Santos
Avenue (EDSA) to Roxas Boulevard; that the proposed extension, an adjunct of building
program, the Manila — Cavite Coastal Read Project, would pass through Cuneta Avenue up
to Roxas Boulevard that this route would be a straight one taking into account the direction
of EDSA; that preparation to the implementation of the aforesaid plan, or on December 13,
1974, then Secretary Baltazar Aquino of the Department of Public Highways directed the City
Engineer of Pasay City not to issue temporary or permanent permits for the construction
 CONSTI LAW79

and/or improvement of buildings and other structures located within the proposed extension
through Cuneta Avenue that shortly thereafter the Department of Public Highways decided
to make the proposed extension go through Fernando Rein and Del Pan Streets which are
lined with old substantial houses; that upon learning of the changed the owners of the
residential houses that would be affected, the herein petitioner being one of them, filed on
April 15, 1977 a formal petition to President Ferdinand E. Marcos asking him to order the
Ministry of Public Highways to adoption, the original plan of making the extension of EDSA
through Araneta Avenue instead of the new plan going through Fernando Rein and Del Pan
Streets; that President Marcos directed then Minister Baltazar Aquino to explain within
twenty-four (24) hours why the proposed project should not be suspended; that on April 21,
1977 then Minister Aquino submitted his explanation defending the new proposed route;
that the President then referred the matter to the Human Settlements Commission for
investigation and recommendation; that after formal hearings to which all the parties
proponents and oppositors were given full opportunity to ventilate their views and to present
their evidence, the Settlements Commission submitted a report recommending the reversion
of the extension of EDSA to the original plan passing through Cuneta Avenue; and that
notwithstanding the said report and recommendation, the Ministry of Public Highways
insisted on implementing the plan to make the extension of EDSA go through Fernando Rein
and Del Pan Streets. 2

In February 1979, the government filed in the Court of First Instance of Rizal, Branch III,
Pascual City presided by the respondent Judge, a complaint for expropriation against the
owners of the houses standing along Fernando Rein and Del Pan Streets, among them the
herein petitioner. The complaint was docketed as Civil Case No. 7001-P and
entitled "Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, etc."

The herein petitioner filed a motion to dismiss dated March 19, 1979 on the following
grounds:

(a) court had no jurisdiction over the subject matter of the action because the complaint
failed to allege that the instant project for expropriation bore the approval of the Ministry of
Human Settlements and the Metro Manila Government nor pursuant to Presidential Decrees
Nos. 824, 1396 and 1517;

(b) The choice of properties to be expropriated made by the Ministry of Public Highways was
arbitrary and erroneous;

(c) The complaint was premature as the plaintiff never really had gone through serious
negotiations with the defendant for the purchase of her property; and

(d) The complaint relied on an arbitrary and erroneous valuation of properties and
disregarded consequential damages.

An urgent motion dated March 28, 1979 for preliminary junction was also filed.

In June 1979 the Republic of the Philippines filed a motion for the issuance of a writ of
possession of the property sought to be expropriated on the ground that said Republic had
made the required deposit with the Philippine National Bank.

The respondent judge issued a writ of possession dated June 14, 1979 authorizing the
Republic of the Philippines to take and enter upon the possession of the properties sought be
condemned. 3
 CONSTI LAW80

The petitioner contends that "Respondent court lacked or exceeded its jurisdiction or gravely
abused its discretion in issuing the order to take over and enter upon the possession of the
properties sought to be expropriated-petitioner having raised a constitutional question which
respondent court must resolve before it can issue an order to take or enter upon the
possession of properties sought to be expropriated." 4

The petitioner assails the choice of the Fernando Rein and Del Pan Streets route on the
following grounds:

The choice of property to be expropriated cannot be without rhyme or reason. The

condemnor may not choose any property it wants. Where the legislature has delegated a
power of eminent do-main, the question of the necessity for taking a particular fine for the
intended improvement rests in the discretion of the grantee power subject however to
review by the courts in case of fraud, bad faith or gross abuse of discretion. The choice of
property must be examined for bad faith, arbitrariness or capriciousness and due process
determination as to whether or not the proposed location was proper in terms of the public
interests. Even the claim of respondent's Secretary Baltazar Aquino that there would be a
saving of P2 million under his new plan must be reviewed for it bears no relation to the site
of the proposed EDSA extension As envisioned by the government, the EDSA extension
would be linked to the Cavite Expressway. Logically then, the proposed extension must point
to the south and not detour to the north.

Also, the equal protection of the law must be accorded, not on to the motel owners along
Cuneta (Fisher) Avenue, but also to the owners of solid and substantial homes and quality
residential lands occupied for generations. 5

The respondents maintain that the respondent court did not act without jurisdiction or
exceed its jurisdiction or gravel abuse its discretion in issuing the order dated June 14, 1979
authorizing the Republic of the Philippines to take over and enter the possession of the
properties sought to be appropriated because the Republic has complied with all the
statutory requirements which entitled it to have immediate possession of the properties
involved. 6

Defending the change of the EDSA extension to pass through Fernando Rein — Del Pan
Streets, the respondents aver:

'There was no sudden change of plan in the selection of the site of the EDSA Extension to
Roxas Blvd. As a matter of fact, when the Ministry of Public Highways decided to change the
site of EDSA Ex- tension to Roxas Boulevard from Cuneta Avenue to the Del Pan — Fernando
Item Streets the residents of Del Pan and Fernando Rein Streets who were to be adversely
affected by the construction of ED — SA Extension to Roxas Boulevard along Del Pan -
Fernando Rein Streets were duly notified of such proposed project. Petitioner herein was one
of those notified Annex 1). It be conceded that the Cuneta Avenue line goes southward and
outward (from the city center while the Del Pan — Fernando Rein Streets line follows
northward and inward direction. It must be stated that both lines, Cuneta Avenue and Del
Pan — Fernando Rein Streets lines, meet satisfactorily planning and design criteria and
therefore are both acceptable. In selecting the Del Pan — Fernando Rein Streets line the
Government did not do so because it wanted to save the motel located along Cuneta Avenue
but because it wanted to minimize the social impact factor or problem involved. 7

There is no question as to the right of the Republic of the Philippines to take private property
for public use upon the payment of just compensation. Section 2, Article IV of the
Constitution of the Philippines provides: "Private property shall not be taken for public use
without just compensation."
 CONSTI LAW81

It is recognized, was, that the government may not capriciously or arbitrarily' choose what
private property should be taken. In J. M. Tuazon & Co., Inc. vs. Land Tenure administration
31 SCRA, 413, 433, the Supreme Court said:

For the purpose of obtaining a judicial declaration of nullity, it is enough if the respondents
or defendants named be the government officials who would give operation and effect to
official action allegedly tainted with unconstitutionality. Thus, where the statute assailed was
sought to be enforced by the Land Tenure Administrative and the Solicitor General, the two
officials may be made respondents in the action without need of including the Executive
Secretary as a party in the action

The failure to meet tile exacting standard of due process would likewise constitute a valid
objection to the exercise of this congressional power. That was so intimated in the above
leading Guido Case. There was an earlier pronouncement to that effect in a decision
rendered long before the adoption of the Constitution under the previous organic law then in
force, while the Philippines was still an unincorporated territory of the United States.

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

In the same case the Supreme Court concluded:

With due recognition then of the power of Congress to designate the particular property to
be taken and how much thereof may be condemned in the exercise of the power of
expropriation, it is still a judicial question whether in the exercise of such competence, the
party adversely affected is the victim of partiality and prejudice. That the equal protection
clause will not allow. (p. 436)

In the instant case, it is a fact that the Department of Public Highways originally establish
the extension of EDSA along Cuneta Avenue. It is to be presumed that the Department of
Public Highways made studies before deciding on Cuneta Avenue. It is indeed odd why
suddenly the proposed extension of EDSA to Roxas Boulevard was changed to go through
Fernando Rein-Del Pan Streets which the Solicitor General con- cedes "... the Del Pan —
Fernando Rein Streets line follows northward and inward direction. While admit "that both
lines, Cuneta Avenue and Del Pan — Fernando Rein Streets lines, meet satisfactorily planning
and design criteria and therefore are both acceptable ... the Solicitor General justifies the
change to Del Pan — Fernando Rein Streets on the ground that the government "wanted to
the social impact factor or problem involved." 8

It is doubtful whether the extension of EDSA along Cuneta Avenue can be objected to on the
ground of social impact. The improvements and buildings along Cuneta Avenue to be
affected by the extension are mostly motels. Even granting, arguendo, that more people be
affected, the Human Setlements Commission has suggested coordinative efforts of said
Commission with the National Housing Authority and other government agencies in the
relocation and resettlement of those adversely affected. 9

The Human Settlements Commission considered conditionality social impact and cost. The
pertinent portion of its report reads:
 CONSTI LAW82

Comparison of Alignment 1 (Cuneta Fisher) and Alignment 2 (Del Pan — Fernando Rein)
based on the criteria of functionality, social impact and cost

A. Functionality

This issue has to do with the physical design of a highway, inclusive of engineering factors
and management consideration

From both engineering and traffic management viewpoints, it is incontestable that the
straighter and shorter alignment is preferable to one which is not. Systematically and
diagramatically, alignment 1 is straighter than alignment 2. In fact, Director Antonio Goco of
the Department of Public Highways admitted that alignment 2 is three (3) meters longer
than alignment 1. Furthermore, alignment 1 is definitely the contour conforming alignment
to EDSA whereas alignment 2 affords a greater radius of unnatural curvature as it hooks
slightly northward before finally joining with Roxas Boulevard. Besides, whichever alignment
is adopted, there will be a need for a grade separator or interchange at the Roxas Boulevard
junction. From the of highway design, it is imperative to have interchanges as far apart as
possible to avoid traffic from slow down in negotiating the slope on the interchanges. Up
north would be the future Buendia Avenue- Roxas Boulevard Interchange. Consequently,
alignment 1 which is farther away from Buendia Avenue than alignment 2 is the better
alignment from the viewpoint of the construction of the grade separator or interchange, a
necessary corollary to the extension project. Finally, the choice of alignment 2 which is
longer by three (3) meters than alignment 1 could have serious repercussions on our energy
conservation drive and from the larger perspective of the national economy, considering
that, by ad- statistical data, no less than fifty thousand (50,000) vehicles a day will have to
traverse an extra three (3) meters.

B. Social Impact

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

(1) Number of property

owners:

Alignment 1 73

Alignment 2 49

(2) Incidence of non-

resident owner:

Alignment 1 25 (34.3%)
 CONSTI LAW83

Alignment 2 31 (63.3%)

(3) Number of actually

affected residents:

Alignment 1 547

Alignment 2 290 (estimated)

(4) Average income of

residents:

Alignment 2:

Below P350 P350 – P500 P 500 – P 800 P800 – Pl000 Over P1000 16 (28%) 24 (42%) 0 (14%)
5 (9%) 4 (7%)

Alignment 2: Figures not available.

It is evident from the foregoing figures that social impact is greater on the residents of
alignment 1.

C. Cost

The resolution of the issue of right-of-way acquisition cost depends to a large extend on the
nature of the properties to be affected and the relative value thereof. A comparison of
alignment 1 and alignment 2 on these two points has produced the following results:

(1) Nature and number of properties involved:

Line I Line 2

Lots Lots Improvemen Lots Improvement

t s

Residential 41 46 38 34
 CONSTI LAW84

Commercial 25 24 11 13

Industrial 5 3 1 1

Church 1 1 1 1

Educational _ _ _ _

TOTAL 72 75 51 49

(2) Relative value of properties affected:

Lots Improvemen Total

ts

Alignmen P9,300,136 P5,928,6 P15,228,8

t1 80 16

Alignmen 8,314,890 6,644,13 14,959,02

t2 0 0

Differenc P269,796
e

It is obvious from the immediately table that the right- of-way acquisition cost difference
factor of the two alignment is only P269,196 and not P2M as alleged by the Department of
Public Highways and P1.2M as claimed by the oppositors. Consequently, the cost difference
factor between the two alignments is so minimal as to be practically nil in the consideration
of the issues involved in this case. 10
 CONSTI LAW85

After considering all the issues and factors, the Human Setlements Commission made the
following recommendations:

Weighing in the balance the issues and factors of necessity, functionality, impact, cost and
property valuation as basis for scheme of compensation to be adopted in the instant case,
the Hearing Board takes cognizance of the following points:

1. The EDSA extension to Roxas Boulevard is necessary and desirable from the strictly
technical viewpoint and the overall perspective of the Metro Manila transport system.

2. The right-of-way acquisition cost difference factor is so minimal as to influence in any way
the choice of either alignment as the extension of EDSA to Roxas Boulevard.

3. The negotiated sale approach to compensation as proposed should apply to a whichever

alignment is selected.

4. The factor of functionality states strongly against the selection of alignment 2 while the
factor of great social and economic impact bears grieviously on the residents of alignment 1.

The course of the decision in this case consequently boils down to the soul-searching and
heart-rending choice between people on one hand and progress and development on the
other. In deciding in favor of the latter, the Hearing Board is not unmindful that progress and
development are carried out by the State precisely and ultimately for the benefit of its
people and therefore, recommends the reverend of the extension project to alignment 1.
However, before the Government, through its implementing agencies, particularly the
Department of Public Highways, undertakes the actual step of appropriating properties on
alignment I to pave the way for the extension the hearing Board recommends the following
as absolute. binding and imperative preconditions:

1. The preparation, and ignore importantly, the execution of a comprehensive and detailed
plan for the relocation and resettlement of the adversely and genuinely affected residents of
alignment I which will necessitate the coordinative efforts of such agencies as the Human
Settlements Commission, the National Housing Authority and other such governmental
agencies. To be concrete, a self sufficient community or human settlement complete with
infrastructure capture market, school, church and industries for employment should be set
up to enable the affected residents of alignment 1 to maintain, their present social and
economic standing.

2. The prompt payment of fair and just compensation through the negotiated sale approach.

Finally, the Hearing Board recommends that the Department of Public Highways conduct
public hearings before undertaking on future expropriations of private properties for public
use.

Respectfully submitted to the Human Settlements Commission Commissioners for

consideration, final disposition and endorsement thereof to His Excellency, the President of
the Philippines.

Makati, Metro Manila, July 4, 1977. 11

... From all the foregoing, the facts of record and recommendations of the Human
Settlements Commission, it is clear that the choice of Fernando Rein — Del Pan Streets as
the line through which the Epifanio de los Santos Avenue should be extended to Roxas
 CONSTI LAW86

Boulevard is arbitrary and should not receive judicial approval. The respondent judge
committed a grave abuse of discretion in allowing the Republic of the Philippines to take
immediate possession of the properties sought to be expropriated.

WHEREFORE, the petition for certiorari and prohibition is hereby granted. The order of June
14, 1979 authorizing the Republic of the Philippines to take or enter upon the possession of
the properties sought to be condemned is set aside and the respondent Judge is
permanently enjoined from taking any further action on Civil Case No. 7001-P,
entitled "Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, etc." except to
dismiss said case.

SO ORDERED.

Teehankee, Acting C.J., Makasiar, Guerrero, and Melencio-Herrera Herrera, JJ., concur.

REPUBLIC VS DE KNECHT AND CA

G.R. No. 87335 February 12, 1990

GANCAYCO, J.:

The issue posed in this case is whether an expropriation proceeding that was determined by
a final judgment of this Court may be the subject of a subsequent legislation for
expropriation.

On February 20, 1979 the Republic of the Philippines filed in the Court of First Instance (CFI)
of Rizal in Pasay City an expropriation proceedings against the owners of the houses
standing along Fernando Rein-Del Pan streets among them Cristina De Knecht (de Knecht for
short) together with Concepcion Cabarrus, and some fifteen other defendants, docketed as
Civil Case No. 7001-P.

On March 19, 1979 de Knecht filed a motion to dismiss alleging lack of jurisdiction, pendency
of appeal with the President of the Philippines, prematureness of complaint and arbitrary
and erroneous valuation of the properties. On March 29, 1979 de Knecht filed an ex
parte urgent motion for the issuance by the trial court of a restraining order to restrain the
Republic from proceeding with the taking of immediate possession and control of the
property sought to be condemned. In June, 1979 the Republic filed a motion for the issuance
of a writ of possession of the property to be expropriated on the ground that it had made the
required deposit with the Philippine National Bank (PNB) of 10% of the amount of
compensation stated in the complaint. In an order dated June 14, 1979 the lower court
issued a writ of possession authorizing the Republic to enter into and take possession of the
properties sought to be condemned, and created a Committee of three to determine the just
compensation for the lands involved in the proceedings.
 CONSTI LAW87

On July 16, 1979 de Knecht filed with this Court a petition for certiorari and prohibition
docketed as G.R. No. L-51078 and directed against the order of the lower court dated June
14, 1979 praying that the respondent be commanded to desist from further proceeding in
the expropriation action and from implementing said order. On October 30, 1980 this Court
rendered a decision, the dispositive part of which reads as follows:

WHEREFORE, the petition for certiorari and prohibition is hereby granted. The order of June
14, 1979 authorizing the Republic of the Philippines to take c enter upon the possession of
the properties sought to be condemned is set aside and the respondent Judge is
permanently enjoined from taking any further action on Civil Case No. 7001-P,
entitled 'Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, et al.' except to
dismiss said case. 1

On August 8, 1981 defendants Maria Del Carmen Roxas Vda. de Elizalde, Francisco Elizalde
and Antonio Roxas moved to dismiss the expropriation action in compliance with the
dispositive portion of the aforesaid decision of this Court which had become final and in
order to avoid further damage to same defendants who were denied possession of their
properties. The Republic filed a manifestation on September 7, 1981 stating, among others,
that it had no objection to the said motion to dismiss as it was in accordance with the
aforestated decision.

On September 2, 1983, the Republic filed a motion to dismiss said case due to the
enactment of the Batas Pambansa Blg. 340 expropriating the same properties and for the
same purpose. The lower court in an order of September 2, 1983 dismissed the case by
reason of the enactment of the said law. The motion for reconsideration thereof was denied
in the order of the lower court dated December 18, 1986.

De Knecht appealed from said order to the Court of Appeals wherein in due course a
decision was rendered on December 28, 1988, 2 the dispositive part of which reads as
follows:

PREMISES CONSIDERED, the order appealed from is hereby SET ASIDE. As prayed for in the
appellant's brief another Order is hereby issued dismissing the expropriation proceedings
(Civil Case No. 51078) before the lower court on the ground that the choice of Fernando
Rein-Del Pan Streets as the line through which the Epifanio de los Santos Avenue should be
extended is arbitrary and should not receive judicial approval.

No pronouncement as to Costs. 3

Hence the Republic filed that herein petition for review of the A aforestated decision
whereby the following issues were raised:

WHETHER OR NOT THE ENACTMENT OF BATAS PAMBANSA BLG. 340 IS THE PROPER GROUND
FOR THE DISMISSAL OF THE EXPROPRIATION CASE. (PROPERLY PUT, WHETHER OR NOT THE
LOWER COURT COMMITTED GRAVE ABUSE OF DIS CRETION IN DISMISSING CIVIL CASE NO.
7001-P UPON JUDICIAL NOTICE OF B.P. BLG. 340).

II
 CONSTI LAW88

WHETHER OR NOT THE DPWH'S "CHOICE" OF LAND TO BE EXPROPRIATED IS STILL AN ISSUE

UNDER THE CIRCUMSTANCES, SAID "CHOICE" HAVING BEEN SUPPLANTED BY THE
LEGISLATURE'S CHOICE.

III

WHETHER OR NOT THE LAW OF THE CASE THEORY SHOULD BE APPLIED TO THE CASE AT
BAR. 4

The petition is impressed with merit. There is no question that as early as 1977, pursuant to
the Revised Administrative Code, the national government, through the Department of
Public Works and Highways began work on what was to be the westward extension of
Epifanio de los Santos Avenue (EDSA) outfall (or outlet) of the Manila and suburbs flood
control and drainage project and the Estero Tripa de Gallina. These projects were aimed at:
(1) easing traffic congestion in the Baclaran and outlying areas; (2) controlling flood by the
construction of the outlet for the Estero Tripa de Gallina (which drains the area of Marikina,
Pasay, Manila and Paranaque); and (3) thus completing the Manila Flood and Control and
Drainage Project.

So the petitioner acquired the needed properties through negotiated purchase starting with
the lands from Taft Avenue up to Roxas Boulevard including the lands in Fernando Rein-Del
Pan streets. It acquired through negotiated purchases about 80 to 85 percent of the lands
involved in the project whose owners did not raise any objection as to arbitrariness on the
choice of the project and of the route. It is only with respect to the remaining 10 to 15
percent along the route that the petitioner cannot negotiate through a sales agreement with
a few land owners, including de Knecht whose holding is hardly 5% of the whole route area.
Thus, as above related on February 20, 1979 the petitioner filed the expropriation
proceedings in the Court of First Instance.

There is no question that in the decision of this Court dated October 30, 1980 in De Knecht
vs. Bautista, G.R. No. L-51078, this Court held that the "choice of the Fernando Rein-Del Pan
streets as the line through which the EDSA should be extended to Roxas Boulevard is
arbitrary and should not receive judicial approval." 5 It is based on the recommendation of
the Human Settlements Commission that the choice of Cuneta street as the line of the
extension will minimize the social impact factor as the buildings and improvement therein
are mostly motels. 6

In view of the said finding, this Court set aside the order of the trial court dated June 14,
1979 authorizing the Republic of the Philippines to take possession of the properties sought
to be condemned and enjoined the respondent judge from taking any further action in the
case except to dismiss the same.

Said decision having become final no action was taken by the lower court on the said
directive of this Court to dismiss the case. Subsequently B.P. Blg. 340 was enacted by the
Batasang Pambansa on February 17, 1983. On the basis of said law petitioner filed a motion
to dismiss the case before the trial court and this was granted.

On appeal by de Knecht to the Court of Appeals the appellate court held that the decision of
the Supreme Court having become final, the petitioner's right as determined therein should
no longer be disturbed and that the same has become the law of the case between the
parties involved. Thus, the appellate court set aside the questioned order of the trial court
and issued another order dismissing the expropriation proceedings before the lower court
pursuant to the ruling in De Knecht case.
 CONSTI LAW89

While it is true that said final judgment of this Court on the subject becomes the law of the
case between the parties, it is equally true that the right of the petitioner to take private
properties for public use upon the payment of the just compensation is so provided in the
Constitution and our laws. 7 Such expropriation proceedings may be undertaken by the
petitioner not only by voluntary negotiation with the land owners but also by taking
appropriate court action or by legislation. 8

When on February 17, 1983 the Batasang Pambansa passed B.P. Blg. 340 expropriating the
very properties subject of the present proceedings, and for the same purpose, it appears
that it was based on supervening events that occurred after the decision of this Court was
rendered in De Knecht in 1980 justifying the expropriation through the Fernando Rein-Del
Pan Streets.

The social impact factor which persuaded the Court to consider this extension to be arbitrary
had disappeared. All residents in the area have been relocated and duly compensated.
Eighty percent of the EDSA outfall and 30% of the EDSA extension had been completed.
Only private respondent remains as the solitary obstacle to this project that will solve not
only the drainage and flood control problem but also minimize the traffic bottleneck in the
area.

The Solicitor General summarizing the situation said —

The construction and completion of the Metro Manila Flood Control and Drainage Project and
the EDSA extension are essential to alleviate the worsening traffic problem in the Baclaran
and Pasay City areas and the perennial flood problems. Judicial notice may be taken that
these problems bedevil life and property not only in the areas directly affected but also in
areas much beyond. Batas Pambansa Blg. 340 was enacted to hasten 'The Project' and thus
solve these problems, and its implementation has resulted so far in an 80% completion of
the EDSA outfall and a 30% completion of the EDSA extension, all part of 'The Project'.

This instant case stands in the way of the final solution of the above-mentioned problems,
solely because the single piece of property I occupied' by De Knecht, although already
expropriated under B.P. Blg. 340, is the only parcel of land where Government engineers
could not enter due to the 'armed' resistance offered by De Knecht, guarded and surrounded
as the lot is perennially by De Knecht's fierce private security guards. It may thus be said
that De Knecht, without any more legal interest in the land, single-handedly stands in the
way of the completion of 'The Project' essential to the progress of Metro Manila and
surrounding areas. Without the property she persists in occupying and without any
bloodletting, the EDSA outfall construction on both sides of the said property cannot be
joined together,and the flood waters of Pasay, Parañaque and Marikina — which flow through
the Estero Tripa de Gallina will continue to have no way or outlet that could drain into Manila
Bay. Without said property, the EDSA extension, already 30% completed, can in no way be
finished, and traffic will continue to clog and jam the intersections of EDSA and Taft Avenue
in Baclaran and pile up along the airport roads.

In sum, even in the face of BP340, De Knecht holds the Legislative sovereign will and choice
inutile. 9

The Court finds justification in proceeding with the said expropriation proceedings through
the Fernando Rein-Del Pan streets from ESDA to Roxas Boulevard due to the aforestated
supervening events after the rendition of the decision of this Court in De Knecht.
 CONSTI LAW90

B.P. Blg. 340 therefore effectively superseded the aforesaid final and executory decision of
this Court. And the trial court committed no grave abuse of discretion in dismissing the case
pending before it on the ground of the enactment of B.P. Blg. 340.

Moreover, the said decision, is no obstacle to the legislative arm of the Government in
thereafter (over two years later in this case) making its own independent assessment of the
circumstances then prevailing as to the propriety of undertaking the expropriation of the
properties in question and thereafter by enacting the corresponding legislation as it did in
this case. The Court agrees in the wisdom and necessity of enacting B.P. Blg. 340. Thus the
anterior decision of this Court must yield to this subsequent legislative flat.

WHEREFORE, the petition is hereby GRANTED and the questioned decision of the Court of
Appeals dated December 28, 1988 and its resolution dated March 9, 1989 are hereby
REVERSED and SET ASIDE and the order of Branch III of the then Court of First Instance of
Rizal in Pasay City in Civil Case No. 7001-P dated September 2, 1983 is hereby reinstated
without pronouncement as to costs.

SO ORDERED.

Narvasa, Griño-Aquino and Medialdea, JJ., concur.

CITY OF BAGUIO VS NAWASA

BAUTISTA ANGELO, J.:
Plaintiff, a municipal corporation, filed on April 25, 1956, in the Court of First Instance of
Baguio, a complaint for declaratory relief against defendant, a public corporation created by
 CONSTI LAW91

Republic Act No. 1383, contending that said Act does not include within its preview the
Baguio Workshop System; that assuming that it does, said Act is unconstitutional because it
has the effect of depriving plaintiff of the ownership, control and operation of said
waterworks system without compensation and without due process of law, and that it is
oppressive, unreasonable and unjust to plaintiff and other cities, municipalities and
municipal districts similarly situated.
On My 22, 1956, defendant filed a motion to dismiss on the ground that Republic Act No.
1383 is a proper exercise of the police power of the State; that assuming that said Act
contemplates an act of expropriation, it is still a constitutional exercise of the power of
eliminate domain; that at any rate the Baguio Waterworks System is not a private property
but "public works of public service" over which the Legislature has control; and that the
provision of the said Act being clear and unambiguous, there is no necessity for
construction.
On June 21, 1956, the Court, acting on the motion to dismiss as well as on the answer and
rejoinder filed by both parties, denied the motion and ordered defendant to file its answer to
the complaint. On July 6, 1956, defendant filed its answer reiterating and amplifying the
ground already advanced in this motion to dismiss, adding thereto that the action for the
declaratory relief is improper for the reason that the Baguio waterworks System has already
been transferred to defendant pursuant to Republic Act No. 1383 or, if such has not been
done, there has already been a breach of said Act.
On August 14, 1956, the parties submitted a written stipulation of the facts and filed written
memoranda. And after allowing plaintiff to file a suplementary complaint, the Court on
November 5, 1956, rendered decision the dispositive part of which reads: "This Court, . . .
holds that the workshop system of the City of Baguio falls filed within the category of
'private property', as contemplated by our constitution and may not expropriated without
just compensation — and that section 8 of republic act No. 1383 provides for the exchange
of the NAWASA assets for the value of workshop system of Baguio is unconstitutional as this
is not 'just compensation,'" Defendant filed a motion for reconsideration, and upon its denial.
It took the present appeal.
The issues posed in this appeal are: (1) plaintiff's action for declatory relief is improper
because there has already been a breach by plaintiff of Republic Act No. 1383 (2) Republic
Act No. 1383 does not contemplates the exercise of the power of eliminate domain but the
exertion of the police power of the State; and (3) assuming arguendo that Republic Act No.
1383 involves the exercise of the power of eminent domain the same does not violate our
Constitution.
Before we proceed with the discussion of this issues, there is need to state some facts
necessarily for their determination since the proper application of the principles of law that
may be pertinent would greatly depend upon them.
Plaintiff is a municipal corporation organized under its Charter with principal place of
business in the City of Baguio, while defendant is in the public corporation created by
Republic Act No. 1383 with provincial place of business in the City of manila. Under section
2553 of its Charter, plaintiffs is maintaining the Baguio Waterworks System under a
certificates of public convenience, the same being financed by its own funds, the Baguio
general fund, and funds advanced by the national Government. The assets of said system as
of December 31, 1955 were reported to be P1,408.795.98. The system supplies only the City
of Baguio, its inhabitants, and transient visitors, and, as provided for in accordance, it grants
to the employees of the City one fifth (1/5) of cubic meter free from every one peso of their
total salary per annum as part of their compensation. The employees of the national
Government are not given this privilege but there is a provision plaintiff Charter which says:
"in consideration of the exemption from the taxation to the extensive real state holdings of
the national Government within the limit of the City, of the expenses of the improvements
which the Government of the said City is required to make a reason for the location therein
of the offenses of the national Government, and of free services in connection of the said
offices, there is created a permanent and continuing appropriation from the funds in the
national Treasury not otherwise appropriated, equal to fifty per centum of the expenses of
 CONSTI LAW92

the Government of the City exclusive of this accounts which appear as expenses by reason
of inter-department charges and charges against the national Government for services and
supplies."
The purposes for which defendants was created is expressed in section 1 of republic Act No.
1383, which we quote:
Creation of the national Waterworks and Sewerage Authority;' its general purposes; Zone
and extends of the jurisdiction comprised by it; domicile and place of business of the
corporation. — For purposes of consolidating and centralizing all waterworks, sewerage and
drainage systems in the Philippines under one control, direction and general supervision,
there is hereby created a public corporation to be known as the National workshop and
Sewerage authority, which shall be organized within one month after the approval of this
Act.
The National Waterworks and Sewerage authority shall own and/or have jurisdiction,
supervision and control over all territory now embraced by the Metropolitan Water Districts
as well as all areas now served by existing government-owned waterworks in the boundaries
of cities, municipalities and municipality districts in the Philippines including those served by
the waterworks and wells and drills sections of the national Waterworks and Sewerage
authority, any from time to time extends its territory by the admission of or the inclusion of
any municipal or municipal districts in the Philippines.
The jurisdiction of the national waterworks and Sewerage Authority shall extend to the
construction, maintenance, operation and control of non-supporting and/or non-revenue
producing water systems and sanitary works, whether undertaken at the expense of the
Authority or through subsidy of the national Government as provided in Section 10 of this
act.
And to accomplish the above purpose, the following was provided in section 8 of the same
act:
Dissolution of the Metropolitan Water District; transfer to the Authority of its records, assets
and liabilities; transfer to the Authority of entities, waterworks and sewerage systems in the
cities, municipalities, municipal district and other government waterworks and sewerage
systems. The present Metropolitan Water District created Under Act Number Two Thousand
eight hundred thirty-two, as amended, is hereby dissolved, and its records, assets and
liabilities are transferred to the authority. All existing government owned waterworks and
sewerage systems are transferred to the National waterworks and Sewerage Authority, and
in turn to pledge such assets as security for the payment of the waterworks and sewerage
bonded debt.

The net book value of the properties and assets of the Metropolitan Water District and of
government-owned waterworks and sewerage systems in cities, municipalities, or municipal
districts, and other government-owned waterworks and sewerage systems shall be received
by the Authority in payment for an equal value of the assets of the National Waterworks and
sewerage Authority.
The references made to the Metropolitan Water District or to any existing government-
owned waterworks and sewerage system in any city, municipality or municipal district and
other waterworks and sewerage system under the Bureau of Public Works, in any Act or
Executive Order or Proclamation of the President of the Philippines or in any city or municipal
ordinance which is still in force, shall be deemed to be a reference to the National
Waterworks and Sewerage Authority created by this Act.
On September 19, 1955, the President of the Philippines issued Executive Order No. 127
outlining the procedure for the transfer of government-owned waterworks and sewerage
systems in the provinces, cities and municipalities to defendant and provided for a time limit
for such transfer, which is "at the earliest time possible but not exceeding 90 days from the
date of said order."
And on March 15, 1956, defendant, implementing said Executive Order, issued Office
Memorandum No. 7 providing, among other things, the following:
 CONSTI LAW93

(1) Pending the establishment of the Waterworks district offices of the Authority, District and
City Engineers, shall continue to be in charge of the operation and maintenance of all
existing waterworks systems, including the repair and improvement thereof and the
construction of new waterworks projects in their respective districts in accordance with the
Memorandum of the Secretary of Public Works and Communications dated October 25, 1955,
quoted in the Memorandum of the Director of Public Works dated October 27, 1955.
Likewise, they shall continue approving vouchers and payrolls for salaries and essential
services chargeable against waterworks funds heretofore, provided that said expenses do
not exceed the appropriations in the approved budget for the preceeding fiscal year.
(2) Pending the establishment of the Waterworks district offices of the Authority which shall
ultimately include an auditing force, Provincial and City auditors shall, as heretofore, audit
the accounts of the different waterworks systems in their respective jurisdictions in
accordance with Provincial Auditor's Memorandum No. 151 to Provincial and City Auditors
dated December 7, 1955.
(3) Pending the establishment of the waterworks district offices of the Authority, provincial,
city and municipal treasurers shall continue to perform the work of handling the collections
and disbursements of funds of the waterworks systems and artesian wells projects in their
respective jurisdictions in accordance with provincial circular of the Secretary of Finance to
all provincial and City Treasurers dated November 23, 1955.
(4) Provincial Waterworks Boards, provincial Boards, Municipal Boards, or City councils of
cities and municipal councils of Municipalities and municipal districts ipso facto ceased to
have control and supervision over waterworks systems within their respective territorial
jurisdictions upon the formal organization of the National Waterworks and sewerage
Authority in accordance with the provisions of Republic Act No. 1383. All budgets and
plantillas of personnel of said waterworks personnel, including collectors who were formerly
directly under the Provincial, City or Municipal Treasurers, whether permanent, temporary or
emergency, shall be effective only after their approval by the Board of directors of the
Authority.

Let us now discussed the issues raised..

As regards the first issue, appellant contends that appellee's action for declaratory relief is
improper because there has already been a breach of the Republic Act No. 1383, invoking
section 2 of rule 66 which provides; "A contract or statue may be construed before there has
been a breach thereof."
This contention is untenable. To begin with, the answer filed by defendant through its
counsel the Solicitor General contains a express admission of the avernment in appellee's
complaint that "although Republic Act No. 1383 took effect upon its approval on June 18,
1955, and notwithstanding Executive Order No. 127 of the President, there has been no
breach of said law because no actual physical turn-over of the Baguio Waterworks System
has so far been made." Because of such admission, it has always been assumed in the trial
court that the present action is proper because there has not been such breach so much so
that appellant desisted from raising the point in the rest of the proceedings in the trial court
and in the long memorandum it has submitted, for which reason the trial court made in its
decision the following comment: In its memorandum, however, the NAWASA has failed to
argue this point. the omission is significant and this Court takes that in any objection to the
declaratory relief proceedings are waived." That appellant would now take an inconsistent
stand is strange in any event, we find that such is the situation obtaining here. Republic Act
No. 1383 provides that government-owned waterworks system should be transferred to
appellant at the earliest time possible, and unless by administrative action this provision is
actually carried out, it cannot be said that the transfer has been effected. The most that
appellant did to carry out such provision is to issue its Office memorandum No. 7 which
prescribes the preparatory steps for such transfer pending the establishment of the branch
office of the NAWASA that would take over the waterworks concerned, but before any
definite step could be taken to comply with said directive the present action was instituted.
 CONSTI LAW94

We agree with the trial court that so far there has not been a breach of the law and that the
other requisites necessary for an action for declaratory relief are present.
The contention that the Republic Act No. 1383 constitutes a valid exercise of police power
rather than a directive to expropriate the waterworks of the appellee by the exercise of the
power of eminent domain cannot also be entertained. This is far from the intent and purpose
of the law. The act does not confiscate, nor destroy, nor appropriate property belonging to
the appellee. It merely directs that all waterworks belonging to cities, municipalities, and
municipal districts in the Philippines be transferred to the NAWASA for the purpose of placing
them under the control and supervision of one agency with a view to promoting their
efficient management, but in so doing it does not confiscate them because it directs that
they be paid with an equal value of the assets of the NAWASA. This is clearly inferred from
the context of the law (section 8, Rep. Act No. 1383).
But appellant invites our attention to some authorities purporting to show the Republic Act
No. 1383 could at least be considered as a legitimate exercise of police power such that
Congress may in the exercise of such power enact a law transferring Government property
from one agency to another, and laying stress one said authorities it contends that although
Congress cannot deprive the citizens of a municipal corporation of the use of property held
in trust for their benefit it may however change the trustee with or without its consent or
compensation provided the citizens are not deprived of its enjoyment. In other words,
appellant invokes the principle that the transfer of property and authority by an act of
Congress from one class of public officer to another where the property continues devoted to
its original purpose does not impair any vested right of the city owning the property.
But the authorities cited are not in point. They in substance point out that the transfer, if
any, of the property of municipal corporation from one agency to another is merely done for
purposes of administration, its ownership and benefits being retained by the corporation.
Such is not the clear intent of Republic Act No. 1383. Here, as we have already shown, its
purpose is to effect a real transfer of the ownership of the waterworks to the new agency
and does not merely encompass a transfer of administration. At any rate, the authorities
cited do not bear out the proposition of appellant as clearly pointed out by counsel for
appellee in his brief.
But it is insisted that the waterworks system of Baguio City does not have the character of
patrimonial property but comes under the phrase "public works for public service"
mentioned in Article 424 of the New Civil Code and as such is subjected to the control of
Congress. This contention is also untenable. The Baguio Waterworks System is not like any
public road, park, street or any other public property held in trust by a municipal corporation
held for the benefit of the public but it is rather a property owned by appellee in its
proprietary character. While the cases may differ as to the public or private character of
waterworks, the weight of authority as far as the legislature is concerned classes them as
private affairs. (sec. 239, Vol. I, Revised, McQuillin Municipal Corporation, p. 239; Shrik vs.
City of Lancaster, 313 Pa. 158, 169 Atl. 557). And in this jurisdiction, this court has already
expressed the view that the waterworks system is patrimonial property of the city that has
established it.(Mendoza vs. De Leon, 33 Phil. 509). And being owned by the municipal
corporation in a proprietary character, waterworks cannot be taken away without observing
the safeguards set by our Constitution for the protection of private property.
While the judicial opinions on this subject are more or less uncertain in expression, and court
judgment apparently conflicting, perhaps it is correct to affirm that a majority of decision
recognize the private rights of the municipal corporation, and hence support the view that
all its property of a distinctly private character is fully protected by the constitutional
provisions protecting private property of the individual or the private corporation.
Accordingly the right of state as to the private property of municipal corporation is a right of
regulation to be exercised in harmony with the general policy of the state, and though
broader than exists in the case of individuals, or private corporations, is not a right of
appropriation.
xxx xxx xxx
 CONSTI LAW95

The decision maintain that the property held by a municipal corporation units private
capacity is not subject to the unrestricted control of the legislature, and the municipality
cannot be deprived of such property against its will, except by the exercise of eminent
domain with payment of full compensation. (McQuillin Municipal Corporation, 2nd Ed., Vol. I,
pp. 670-681).
In its private capacity a municipal corporation is wholly different. The people of a compact
community usually require certain conveniences which cannot be furnished without a
franchise from the State and which are either unnecessary in the rural districts, such as a
system of sewers, or parks and open spaces, or which on account of the expenses it would
be financially impossible to supply except where the population is reasonably dense, such as
water or gas. But in so far as the municipality is thus authorized to exercise the functions of
a private corporation, it is clothed with the capacities of a private corporation and may claim
its rights and immunities, even as against the sovereign, and is subject to the liabilities of
such a corporation, even as against third parties. (19 R.C. L. p. 698)
The attempt of appellant in having waterworks considered as public property subject to the
control of Congress or one which can be regulated by the exercise of police power having
failed, that question that now arises is: Does Republic Act No. 1383 provide for the
automatic expropriation of the waterworks in question in the light of our Constitution? In
other words, does said law comply with the requirements of section 6, Article XIII, in relation
to section 1(2), Article III, of our Constitution?
Section 6, Article XIII of our Constitution provides:
SEC. 6. The State may, in the interest of National Welfare and defense, establish and operate
industries and means of transportation and communication, and, upon payment of just
compensation, transfer to public ownership utilities and other private enterprises to be
operated by the Government.
Section 1 (2), Article III, of our Constitution provides:
(2) Private property shall not be taken for public use without just compensation.
It is clear that the State may, in the interest of National welfare, transfer to public ownership
any private enterprise upon payment of just compensation. At the same time, one has to
bear in mind that no person can be deprived of his property except for public use and upon
payment of just compensation. There is an attempt to observe this requirement in Republic
Act No. 1383 when in providing for the transfer of appellee's waterworks system to a
national agency it was directed that the transfer be made upon payment of an equivalent
value of the property. Has this been implemented? Has appellant actually transferred to
appellee any asset of the NAWASA that may be considered just compensation for the
property expropriated? There is nothing in the record to show that such was done. Neither is
there anything to this effect in Office Memorandum No. 7 issued by the NAWASA in
implementation of the provision of the Republic Act No. 1383. The law speaks of assets of
the NAWASA by they are not specified. While the Act empowers the NAWASA to contract
indebtedness and issue bonds subject to the approval of the Secretary of Finance when
necessary for the transaction of its business (sec. 2, par. (L), sec. 5, Act No. 1383), no such
action has been taken to comply with appellant's commitment in so far as payment of
compensation of appellee is concerned. As to when such action should be taken no one
knows. And unless this aspect of the law is clarified and appellee is given its due
compensation, appellee cannot be deprived of its property even if appellant desires to take
over its administration in line with the spirit of the law. We are therefore persuaded to
conclude that the law, insofar as it expropriates the waterworks in question without
providing for an effective payment of just compensation, violates our Constitution. In this
respect, the decision of the trial court is correct.
Wherefore, the decision appealed from is affirmed, without pronouncement as to costs.
Paras, C. J., Bengzon, Padilla, Montemayor, Endencia, and Barrera, JJ., concur.
Conception, J., concurs in the result.

GARCIA VS CA,102 SCRA 620 (TO FOLLOW)

 CONSTI LAW96

MUNICIPALITY OF DAET VS CA

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
 CONSTI LAW97

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.
 CONSTI LAW98

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-Abaño, 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
 CONSTI LAW99

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.

Respectfully submitted,

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

Commissioner Commissioner

(Sgd.) Mateo D. Aquino

Commissioner5

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
 CONSTI LAW100

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,
 CONSTI LAW101

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 Araullo9 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.; 12and 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
 CONSTI LAW102

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)
 CONSTI LAW103

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
 CONSTI LAW104

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
 CONSTI LAW105

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.
 CONSTI LAW106

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.
 CONSTI LAW107

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.

RAFAEL SALAS VS HON. HILARION JARENCIO

ESGUERRA, J.:p

This is a petition for review of the decision of the Court of First Instance of Manila, Branch
XXIII, in Civil Case No. 67946, dated September 23, 1968, the dispositive portion of which is
as follows:

WHEREFORE, the Court renders judgment declaring Republic Act No. 4118 unconstitutional
and invalid in that it deprived the City of Manila of its property without due process and
payment of just compensation. Respondent Executive Secretary and Governor of the Land
Authority are hereby restrained and enjoined from implementing the provisions of said law.
Respondent Register of Deeds of the City of Manila is ordered to cancel Transfer Certificate
of Title No. 80876 which he had issued in the name of the Land Tenure Administration and
reinstate Transfer Certificate of Title No. 22547 in the name of the City of Manila which he
 CONSTI LAW108

cancelled, if that is feasible, or issue a new certificate of title for the same parcel of land in
the name of the City of Manila.1

The facts necessary for a clear understanding of this case are as follows:

On February 24, 1919, the 4th Branch of the Court of First Instance of Manila, acting as a
land registration court, rendered judgment in Case No. 18, G.L.R.O. Record No. 111,
declaring the City of Manila the owner in fee simple of a parcel of land known as Lot No. 1,
Block 557 of the Cadastral Survey of the City of Mani1a, containing an area of 9,689.8
square meters, more or less. Pursuant to said judgment the Register of Deeds of Manila on
August 21, 1920, issued in favor of the City of Manila, Original Certificate of Title No. 4329
covering the aforementioned parcel of land. On various dates in 1924, the City of Manila sold
portions of the aforementioned parcel of land in favor of Pura Villanueva. As a consequence
of the transactions Original Certificate of Title No. 4329 was cancelled and transfer
certificates of title were issued in favor of Pura Villanueva for the portions purchased by her.
When the last sale to Pura Villanueva was effected on August 22, 1924, Transfer Certificate
of Title No. 21974 in the name of the City of Manila was cancelled and in lieu thereof Transfer
Certificate of Title (TCT) No. 22547 covering the residue thereof known as Lot 1-B-2-B of
Block 557, with an area of 7,490.10 square meters, was issued in the name of the City of
Manila.

On September 21, 1960, the Municipal Board of Manila, presided by then Vice-Mayor Antono
J. Villegas, adopted a resolution requesting His Excellency, the President of the Philippines to
consider the feasibility of declaring the City property bounded by Florida, San Andres, and
Nebraska Streets, under Transfer Certificate of Title Nos. 25545 and 22547, containing a
total area of 7,450 square meters as a patrimonial property of the City of Manila for the
purpose of reselling these lots to the actual occupants thereof.2

The said resolution of the Municipil Board of the City of Manila was officially transmitted to
the President of the Philippines by then Vice-Mayor Antonio J. Villegas on September 21,
1960, with the information that the same resolution was, on the same date, transmitted to
the Senate and House of Representatives of the Congress of the Philippines.3

During the First Session of the Fifth Congress of the Philippines, House Bill No. 191 was filed
in the House of Representatives by then Congressman Bartolome Cabangbang seeking to
declare the property in question as patrimonial property of the City of Manila, and for other
purposes. The explanatory note of the Bill gave the grounds for its enactment, to wit:

In the particular case of the property subject of this bill, the City of Manila does not seem to
have use thereof as a public communal property. As a matter of fact, a resolution was
adopted by the Municipal Board of Manila at its regular session held on September 21, 1960,
to request the feasibility of declaring the city property bounded by Florida, San Andres and
Nebraska Streets as a patrimonial property of the City of Manila for the purpose of reselling
these lots to the actual occupants thereof. Therefore, it will be to the best interest of society
that the said property be used in one way or another. Since this property has been occupied
for a long time by the present occupants thereof and since said occupants have expressed
their willingness to buy the said property, it is but proper that the same be sold to them.4

Subsequently, a revised version of the Bill was introduced in the House of Representatives
by Congressmen Manuel Cases, Antonio Raquiza and Nicanor Yñiguez as House Bill No.
1453, with the following explanatory note:
 CONSTI LAW109

The accompanying bill seeks to convert one (1) parcel of land in the district of Malate, which
is reserved as communal property into a disposable or alienable property of the State and to
provide its subdivision and sale to bona fide occupants or tenants.

This parcel of land in question was originally an aggregate part of a piece of land with an
area of 9,689.8 square meters, more or less. ... On September 21, 1960, the Municipal Board
of Manila in its regular session unanimously adopted a resolution requesting the President of
the Philippines and Congress of the Philippines the feasibility of declaring this property into
disposable or alienable property of the State. There is therefore a precedent that this parcel
of land could be subdivided and sold to bona fide occupants. This parcel of land will not
serve any useful public project because it is bounded on all sides by private properties which
were formerly parts of this lot in question.

Approval of this bill will implement the policy of the Administration of land for the landless
and the Fifth Declaration of Principles of the Constitution, which states that the promotion of
Social Justice to insure the well-being and economic security of all people should be the
concern of the State. We are ready and willing to enact legislation promoting the social and
economic well-being of the people whenever an opportunity for enacting such kind of
legislation arises.

In view of the foregoing consideration and to insure fairness and justice to the present bona
fide occupants thereof, approval of this Bill is strongly urged.5

The Bill having been passed by the House of Representatives, the same was thereafter sent
to the Senate where it was thoroughly discussed, as evidenced by the Congressional Records
for May 20, 1964, pertinent portion of which is as follows:

SENATOR FERNANDEZ: Mr. President, it will be re called that when the late Mayor Lacson
was still alive, we approved a similar bill. But afterwards, the late Mayor Lacson came here
and protested against the approval, and the approval was reconsidered. May I know whether
the defect in the bill which we approved, has already been eliminated in this present bill?

SENATOR TOLENTINO: I understand Mr. President, that that has already been eliminated and
that is why the City of Manila has no more objection to this bill.

SENATOR FERNANDEZ: Mr. President, in view of that manifestation and considering that
Mayor Villegas and Congressman Albert of the Fourth District of Manila are in favor of the
bill. I would not want to pretend to know more what is good for the City of Manila.

SENATOR TOLENTINO: Mr. President, there being no objection, I move that we approve this
bill on second reading.

PRESIDENT PRO-TEMPORE: The biII is approved on second reading after several Senetors
said aye and nobody said nay.

The bill was passed by the Senate, approved by the President on June 20, 1964, and became
Republic Act No. 4118. It reads as follows:

Lot I-B-2-B of Block 557 of the cadastral survey of the City of Manila, situated in the District
of Malate, City of Manila, which is reserved as communal property, is hereby converted into
disposal or alienable land of the State, to be placed under the disposal of the Land Tenure
Administration. The Land Tenure Administration shall subdivide the property into small lots,
none of which shall exceed one hundred and twenty square meters in area and sell the same
 CONSTI LAW110

on installment basis to the tenants or bona fide occupants thereof and to individuals, in the
order mentioned: Provided, That no down payment shall be required of tenants or bona fide
occupants who cannot afford to pay such down payment: Provided, further, That no person
can purchase more than one lot: Provided, furthermore, That if the tenant or bona fide
occupant of any given lot is not able to purchase the same, he shall be given a lease from
month to month until such time that he is able to purchase the lot: Provided, still further,
That in the event of lease the rentals which may be charged shall not exceed eight per cent
per annum of the assessed value of the property leased: And provided, finally, That in fixing
the price of each lot, which shall not exceed twenty pesos per square meter, the cost of
subdivision and survey shall not be included.

Sec. 2. Upon approval of this Act no ejectment proceedings against any tenant or bona fide
occupant of the above lots shall be instituted and any ejectment proceedings pending in
court against any such tenant or bona fide occupant shall be dismissed upon motion of the
defendant: Provided, That any demolition order directed against any tenant or bona fide
occupant shall be lifted.

Sec. 3. Upon approval of this Act, if the tenant or bona fide occupant is in arrears in the
payment of any rentals, the amount legally due shall be liquidated and shall be payable in
twenty-four equal monthly installments from the date of liquidation.

Sec. 4. No property acquired by virtue of this Act shall be transferred, sold, mortgaged, or
otherwise disposed of within a period of five years from the date full ownership thereof has
been vested in the purchaser without the consent of the Land Tenure Administration.

Sec. 5. In the event of the death of the purchaser prior to the complete payment of the price
of the lot purchased by him, his widow and children shall succeed in all his rights and
obligations with respect to his lot.

Sec. 6. The Chairman of the Land Tenure Administration shall implement and issue such
rules and regulations as may be necessary to carry out the provisions of this Act.

Sec. 7. The sum of one hundred fifty thousand pesos is appropriated out of any funds in the
National Treasury not otherwise appropriated, to carry out the purposes of this Act.

Sec. 8. All laws or parts of laws inconsistent with this Act are repealed or modified
accordingly.

Sec. 9. This Act shall take effect upon its approval.

Approved, June 20, 1964.

To implement the provisions of Republic Act No. 4118, and pursuant to the request of the
occupants of the property involved, then Deputy Governor Jose V. Yap of the Land Authority
(which succeeded the Land Tenure Administration) addressed a letter, dated February 18,
1965, to Mayor Antonio Villegas, furnishing him with a copy of the proposed subdivision plan
of said lot as prepared for the Republic of the Philippines for resale of the subdivision lots by
the Land Authority to bona fide applicants.6

On March 2, 1965, the City Mayor of Manila, through his Executive and Technical Adviser,
acknowledged receipt of the proposed subdivision plan of the property in question and
informed the Land Authority that his office would interpose no objection to the
implementation of said law, provided that its provisions be strictly complied with.7
 CONSTI LAW111

With the above-mentioned written conformity of the City of Manila for the implementation of
Republic Act No. 4118, the Land Authority, thru then Deputy Governor Jose V. Yap, requested
the City Treasurer of Manila, thru the City Mayor, for the surrender and delivery to the former
of the owner's duplicate of Transfer Certificate of Title No. 22547 in order to obtain title
thereto in the name of the Land Authority. The request was duly granted with the knowledge
and consent of the Office of the City Mayor.8

With the presentation of Transfer Certificate of Title No. 22547, which had been yielded as
above stated by the, City authorities to the Land Authority, Transfer Certificate of Title (T.C.T.
No. 22547) was cancelled by the Register of Deeds of Manila and in lieu thereof Transfer
Certificate of Title No. 80876 was issued in the name of the Land Tenure Administration (now
Land Authority) pursuant to the provisions of Republic Act No.

4118.9

But due to reasons which do not appear in the record, the City of Manila made a complete
turn-about, for on December 20, 1966, Antonio J. Villegas, in his capacity as the City Mayor
of Manila and the City of Manila as a duly organized public corporation, brought an action for
injunction and/or prohibition with preliminary injunction to restrain, prohibit and enjoin the
herein appellants, particularly the Governor of the Land Authority and the Register of Deeds
of Manila, from further implementing Republic Act No. 4118, and praying for the declaration
of Republic Act No. 4118 as unconstitutional.

With the foregoing antecedent facts, which are all contained in the partial stipulation of facts
submitted to the trial court and approved by respondent Judge, the parties waived the
presentation of further evidence and submitted the case for decision. On September 23,
1968, judgment was rendered by the trial court declaring Republic Act No. 4118
unconstitutional and invalid on the ground that it deprived the City of Manila of its property
without due process of law and payment of just compensation. The respondents were
ordered to undo all that had been done to carry out the provisions of said Act and were
restrained from further implementing the same.

Two issues are presented for determination, on the resolution of which the decision in this
case hinges, to wit:

I. Is the property involved private or patrimonial property of the City of Manila?

II. Is Republic Act No. 4118 valid and not repugnant to the Constitution?

I.

As regards the first issue, appellants maintain that the land involved is a communal land or
"legua comunal" which is a portion of the public domain owned by the State; that it came
into existence as such when the City of Manila, or any pueblo or town in the Philippines for
that matter, was founded under the laws of Spain, the former sovereign; that upon the
establishment of a pueblo, the administrative authority was required to allot and set aside
portions of the public domain for a public plaza, a church site, a site for public buildings,
lands to serve as common pastures and for streets and roads; that in assigning these lands
some lots were earmarked for strictly public purposes, and ownership of these lots (for
public purposes) immediately passed to the new municipality; that in the case of common
lands or "legua comunal", there was no such immediate acquisition of ownership by the
pueblo, and the land though administered thereby, did not automatically become its
property in the absence of an express grant from the Central Government, and that the
 CONSTI LAW112

reason for this arrangement is that this class of land was not absolutely needed for the
discharge of the municipality's governmental functions.

It is argued that the parcel of land involved herein has not been used by the City of Manila
for any public purpose and had not been officially earmarked as a site for the erection of
some public buildings; that this circumstance confirms the fact that it was originally
"communal" land alloted to the City of Manila by the Central Government not because it was
needed in connection with its organization as a municipality but simply for the common use
of its inhabitants; that the present City of Manila as successor of the Ayuntamiento de Manila
under the former Spanish sovereign merely enjoys the usufruct over said land, and its
exercise of acts of ownership by selling parts thereof did not necessarily convert the land
into a patrimonial property of the City of Manila nor divest the State of its paramount title.

Appellants further argue that a municipal corporation, like a city is a governmental agent of
the State with authority to govern a limited portion of its territory or to administer purely
local affairs in a given political subdivision, and the extent of its authority is strictly delimited
by the grant of power conferred by the State; that Congress has the exclusive power to
create, change or destroy municipal corporations; that even if We admit that legislative
control over municipal corporations is not absolute and even if it is true that the City of
Manila has a registered title over the property in question, the mere transfer of such land by
an act of the legislature from one class of public land to another, without compensation,
does not invade the vested rights of the City.

Appellants finally argue that Republic Act No. 4118 has treated the land involved as one
reserved for communal use, and this classification is conclusive upon the courts; that if the
City of Manila feels that this is wrong and its interests have been thereby prejudiced, the
matter should be brought to the attention of Congress for correction; and that since
Congress, in the exercise of its wide discretionary powers has seen fit to classify the land in
question as communal, the Courts certainly owe it to a coordinate branch of the Government
to respect such determination and should not interfere with the enforcement of the law.

Upon the other hand, appellees argue by simply quoting portions of the appealed decision of
the trial court, which read thus:

The respondents (petitioners-appellants herein) contend, among other defenses, that the
property in question is communal property. This contention is, however, disproved by
Original Certificate of Title No. 4329 issued on August 21, 1920 in favor of the City of Manila
after the land in question was registered in the City's favor. The Torrens Title expressly states
that the City of Manila was the owner in 'fee simple' of the said land. Under Sec. 38 of the
Land Registration Act, as amended, the decree of confirmation and registration in favor of
the City of Manila ... shall be conclusive upon and against all persons including the Insular
Government and all the branches there ... There is nothing in the said certificate of title
indicating that the land was 'communal' land as contended by the respondents. The
erroneous assumption by the Municipal Board of Manila that the land in question was
communal land did not make it so. The Municipal Board had no authority to do that.

The respondents, however, contend that Congress had the power and authority to declare
that the land in question was 'communal' land and the courts have no power or authority to
make a contrary finding. This contention is not entirely correct or accurate. Congress has the
power to classify 'land of the public domain', transfer them from one classification to another
and declare them disposable or not. Such power does not, however, extend to properties
which are owned by cities, provinces and municipalities in their 'patrimonial' capacity.
 CONSTI LAW113

Art. 324 of the Civil Code provides that properties of provinces, cities and municipalities are
divided into properties for public use and patrimonial property. Art. 424 of the same code
provides that properties for public use consist of provincial roads, city streets, municipal
streets, the squares, fountains, public waters, promenades and public works for public
service paid for by said province, cities or municipalities. All other property possessed by
any of them is patrimonial. Tested by this criterion the Court finds and holds that the land in
question is patrimonial property of the City of Manila.

Respondents contend that Congress has declared the land in question to be 'communal' and,
therefore, such designation is conclusive upon the courts. The Courts holds otherwise. When
a statute is assailed as unconstitutional the Courts have the power and authority to inquire
into the question and pass upon it. This has long ago been settled in Marbury vs. Madison, 2
L. ed. 60, when the United States Supreme Court speaking thru Chief Justice Marshall held:

... If an act of the legislature, repugnant to the constitution, is void, does it, notwithstanding
its validity, bind the courts, and oblige them to give effect? It is emphatically the province
and duty of the judicial department to say what the law is ... So if a law be in opposition to
the constitution; if both the law and the constitution apply to a particular case, so that the
court must either decide that case conformable to the constitution, disregarding the law, the
court must determine which of these conflicting rules governs the case. This is of the very
essence of unconstitutional judicial duty.

Appellees finally concluded that when the courts declare a law unconstitutional it does not
mean that the judicial power is superior to the legislative power. It simply means that the
power of the people is superior to both and that when the will of the legislature, declared in
statutes, stands in opposition to that of the people, declared in the Constitution, the judges
ought to be governed by the Constitution rather than by the statutes.

There is one outstanding factor that should be borne in mind in resolving the character of
the land involved, and it is that the City of Manila, although declared by the Cadastral Court
as owner in fee simple, has not shown by any shred of evidence in what manner it acquired
said land as its private or patrimonial property. It is true that the City of Manila as well as its
predecessor, the Ayuntamiento de Manila, could validly acquire property in its corporate or
private capacity, following the accepted doctrine on the dual character — public and private
— of a municipal corporation. And when it acquires property in its private capacity, it acts
like an ordinary person capable of entering into contracts or making transactions for the
transmission of title or other real rights. When it comes to acquisition of land, it must have
done so under any of the modes established by law for the acquisition of ownership and
other real rights. In the absence of a title deed to any land claimed by the City of Manila as
its own, showing that it was acquired with its private or corporate funds, the presumption is
that such land came from the State upon the creation of the municipality (Unson vs. Lacson,
et al., 100 Phil. 695). Originally the municipality owned no patrimonial property except those
that were granted by the State not for its public but for private use. Other properties it owns
are acquired in the course of the exercise of its corporate powers as a juridical entity to
which category a municipal corporation pertains.

Communal lands or "legua comunal" came into existence when a town or pueblo was
established in this country under the laws of Spain (Law VII, Title III, Book VI, Recopilacion de
las Leyes de Indios). The municipalities of the Philippines were not entitled, as a matter of
right, to any part of the public domain for use as communal lands. The Spanish law provided
that the usufruct of a portion of the public domain adjoining municipal territory might be
granted by the Government for communal purposes, upon proper petition, but, until
granted, no rights therein passed to the municipalities, and, in any event, the ultimate title
remained in the sovereign (City of Manila vs. Insular Government, 10 Phil. 327).
 CONSTI LAW114

For the establishment, then, of new pueblos the administrative authority of the province, in
representation of the Governor General, designated the territory for their location and
extension and the metes and bounds of the same; and before alloting the lands among the
new settlers, a special demarcation was made of the places which were to serve as the
public square of the pueblo, for the erection of the church, and as sites for the public
buildings, among others, the municipal building or the casa real, as well as of the lands
whick were to constitute the common pastures, and propios of the municipality and the
streets and roads which were to intersect the new town were laid out, ... . (Municipality of
Catbalogan vs. Director of Lands, 17 Phil. 216, 220) (Emphasis supplied)

It may, therefore, be laid down as a general rule that regardless of the source or
classification of land in the possession of a municipality, excepting those acquired with its
own funds in its private or corporate capacity, such property is held in trust for the State for
the benefit of its inhabitants, whether it be for governmental or proprietary purposes. It
holds such lands subject to the paramount power of the legislature to dispose of the same,
for after all it owes its creation to it as an agent for the performance of a part of its public
work, the municipality being but a subdivision or instrumentality thereof for purposes of
local administration. Accordingly, the legal situation is the same as if the State itself holds
the property and puts it to a different use (2 McQuilin,Municipal Corporations, 3rd Ed., p.
197, citing Monagham vs. Armatage, 218 Minn. 27, 15 N. W. 2nd 241).

True it is that the legislative control over a municipal corporation is not absolute even when
it comes to its property devoted to public use, for such control must not be exercised to the
extent of depriving persons of their property or rights without due process of law, or in a
manner impairing the obligations of contracts. Nevertheless, when it comes to property of
the municipality which it did not acquire in its private or corporate capacity with its own
funds, the legislature can transfer its administration and disposition to an agency of the
National Government to be disposed of according to its discretion. Here it did so in
obedience to the constitutional mandate of promoting social justice to insure the well-being
and economic security of the people.

It has been held that a statute authorizing the transfer of a Municipal airport to an Airport
Commission created by the legislature, even without compensation to the city, was not
violative of the due process clause of the American Federal Constitution. The Supreme Court
of Minnessota in Monagham vs. Armatage, supra, said:

... The case is controlled by the further rule that the legislature, having plenary control of the
local municipality, of its creation and of all its affairs, has the right to authorize or direct the
expenditures of money in its treasury, though raised, for a particular purpose, for any
legitimate municipal purpose, or to order and direct a distribution thereof upon a division of
the territory into separate municipalities ... . The local municipality has no such vested right
in or to its public funds, like that which the Constitution protects in the individual as
precludes legislative interferences. People vs. Power, 25 Ill. 187; State Board (of Education)
vs. City, 56 Miss. 518. As remarked by the supreme court of Maryland in Mayor vs. Sehner,
37 Md. 180: "It is of the essence of such a corporation, that the government has the sole
right as trustee of the public interest, at its own good will and pleasure, to inspect, regulate,
control, and direct the corporation, its funds, and franchises."

We therefore hold that c.500, in authorizing the transfer of the use and possession of the
municipal airport to the commission without compensation to the city or to the park board,
does not violate the Fourteenth Amendment to the Constitution of the United States.
 CONSTI LAW115

The Congress has dealt with the land involved as one reserved for communal use (terreno
comunal). The act of classifying State property calls for the exercise of wide discretionary
legislative power and it should not be interfered with by the courts.

This brings Us to the second question as regards the validity of Republic Act No. 4118,
viewed in the light of Article III, Sections 1, subsection (1) and (2) of the Constitution which
ordain that no person shall be deprived of his property without due process of law and that
no private property shall be taken for public use without just compensation.

II .

The trial court declared Republic Act No. 4118 unconstitutional for allegedly depriving the
City of Manila of its property without due process of law and without payment of just
compensation. It is now well established that the presumption is always in favor of the
constitutionality of a law (U S. vs. Ten Yu, 24 Phil. 1; Go Ching, et al. vs. Dinglasan, et al., 45
O.G. No. 2, pp. 703, 705). To declare a law unconstitutional, the repugnancy of that law to
the Constitution must be clear and unequivocal, for even if a law is aimed at the attainment
of some public good, no infringement of constitutional rights is allowed. To strike down a law
there must be a clear showing that what the fundamental law condemns or prohibits, the
statute allows it to be done (Morfe vs. Mutuc, et al., G.R. No. L-20387, Jan. 31, 1968; 22
SCRA 424). That situation does not obtain in this case as the law assailed does not in any
manner trench upon the constitution as will hereafter be shown. Republic Act No. 4118 was
intended to implement the social justice policy of the Constitution and the Government
program of "Land for the Landless". The explanatory note of House Bill No. 1453 which
became Republic Act No. 4118, reads in part as follows:

Approval of this bill will implement the policy of the administration of "land for the landless"
and the Fifth Declaration of Principles of the Constitution which states that "the promotion of
social justice to insure the well-being and economic security of all people should be the
concern of the State." We are ready and willing to enact legislation promoting the social and
economic well-being of the people whenever an opportunity for enacting such kind of
legislation arises.

The respondent Court held that Republic Act No. 4118, "by converting the land in question —
which is the patrimonial property of the City of Manila into disposable alienable land of the
State and placing it under the disposal of the Land Tenure Administration — violates the
provisions of Article III (Secs. 1 and 2) of the Constitution which ordain that "private property
shall not be taken for public use without just compensation, and that no person shall be
deprived of life, liberty or property without due process of law". In support thereof reliance is
placed on the ruling in Province of Zamboanga del Norte vs. City of Zamboanga, G.R. No.
2440, March 28, 1968; 22 SCRA 1334, which holds that Congress cannot deprive a
municipality of its private or patrimonial property without due process of law and without
payment of just compensation since it has no absolute control thereof. There is no quarrel
over this rule if it is undisputed that the property sought to be taken is in reality a private or
patrimonial property of the municipality or city. But it would be simply begging the question
to classify the land in question as such. The property, as has been previously shown, was not
acquired by the City of Manila with its own funds in its private or proprietary capacity. That it
has in its name a registered title is not questioned, but this title should be deemed to be
held in trust for the State as the land covered thereby was part of the territory of the City of
Manila granted by the sovereign upon its creation. That the National Government, through
the Director of Lands, represented by the Solicitor General, in the cadastral proceedings did
not contest the claim of the City of Manila that the land is its property, does not detract from
its character as State property and in no way divests the legislature of its power to deal with
it as such, the state not being bound by the mistakes and/or negligence of its officers.
 CONSTI LAW116

One decisive fact that should be noted is that the City of Manila expressly recognized the
paramount title of the State over said land when by its resolution of September 20, 1960,
the Municipal Board, presided by then Vice-Mayor Antonio Villegas, requested "His
Excellency the President of the Philippines to consider the feasibility of declaring the city
property bounded by Florida, San Andres and Nebraska Streets, under Transfer Certificate of
Title Nos. 25545 and 25547, containing an area of 7,450 square meters, as patrimonial
property of the City of Manila for the purpose of reselling these lots to the actual occupants
thereof." (See Annex E, Partial Stipulation of Facts, Civil Case No. 67945, CFI, Manila, p. 121,
Record of the Case) [Emphasis Supplied]

The alleged patrimonial character of the land under the ownership of the City of Manila is
totally belied by the City's own official act, which is fatal to its claim since the Congress did
not do as bidden. If it were its patrimonial property why should the City of Manila be
requesting the President to make representation to the legislature to declare it as such so it
can be disposed of in favor of the actual occupants? There could be no more blatant
recognition of the fact that said land belongs to the State and was simply granted in usufruct
to the City of Manila for municipal purposes. But since the City did not actually use said land
for any recognized public purpose and allowed it to remain idle and unoccupied for a long
time until it was overrun by squatters, no presumption of State grant of ownership in favor of
the City of Manila may be acquiesced in to justify the claim that it is its own private or
patrimonial property (Municipality of Tigbauan vs. Director of Lands, 35 Phil. 798; City of
Manila vs. Insular Government, 10 Phil. 327; Municipality of Luzuriaga vs. Director of Lands,
24 Phil. 193). The conclusion of the respondent court that Republic Act No. 4118 converted a
patrimonial property of the City of Manila into a parcel of disposable land of the State and
took it away from the City without compensation is, therefore, unfounded. In the last
analysis the land in question pertains to the State and the City of Manila merely acted as
trustee for the benefit of the people therein for whom the State can legislate in the exercise
of its legitimate powers.

Republic Act No. 4118 was never intended to expropriate the property involved but merely
to confirm its character as communal land of the State and to make it available for
disposition by the National Government: And this was done at the instance or upon the
request of the City of Manila itself. The subdivision of the land and conveyance of the
resulting subdivision lots to the occupants by Congressional authorization does not operate
as an exercise of the power of eminent domain without just compensation in violation of
Section 1, subsection (2), Article III of the Constitution, but simply as a manifestation of its
right and power to deal with state property.

It should be emphasized that the law assailed was enacted upon formal written petition of
the Municipal Board of Manila in the form of a legally approved resolution. The certificate of
title over the property in the name of the City of Manila was accordingly cancelled and
another issued to the Land Tenure Administration after the voluntary surrender of the City's
duplicate certificate of title by the City Treasurer with the knowledge and consent of the City
Mayor. To implement the provisions of Republic Act No. 4118, the then Deputy Governor of
the Land Authority sent a letter, dated February 18, 1965, to the City Mayor furnishing him
with a copy of the "proposed subdivision plan of the said lot as prepared for the Republic of
the Philippines for subdivision and resale by the Land Authority to bona fide applicants." On
March 2, 1965, the Mayor of Manila, through his Executive and Technical Adviser,
acknowledged receipt of the subdivision plan and informed the Land Authority that his Office
"will interpose no objection to the implementation of said law provided that its provisions are
strictly complied with." The foregoing sequence of events, clearly indicate a pattern of
regularity and observance of due process in the reversion of the property to the National
Government. All such acts were done in recognition by the City of Manila of the right and
power of the Congress to dispose of the land involved.
 CONSTI LAW117

Consequently, the City of Manila was not deprived of anything it owns, either under the due
process clause or under the eminent domain provisions of the Constitution. If it failed to get
from the Congress the concession it sought of having the land involved given to it as its
patrimonial property, the Courts possess no power to grant that relief. Republic Act No. 4118
does not, therefore, suffer from any constitutional infirmity.

WHEREFORE, the appealed decision is hereby reversed, and petitioners shall proceed with
the free and untrammeled implementation of Republic Act No. 4118 without any obstacle
from the respondents. Without costs.

Rafael S. Salas vs. Hon. Hilarion U. Jarencio, 46 SCRA 734

FACTS:

City of Manila – owner in fee simple of a parcel of land known as Lot 1, Block 557 of
Cadastral Survey of City of Manila, containing an area of 9689.80 sqm. On various dates in
1927, City of Manila sold portions of the parcel of land. When the last sale was effected
August 1924, Transfer Certificate of Title 22547 covering the residue of the land 7490.10
sam was issued in the name of City of Manila.

On September 1960, Municipal Board of Manila adopted a resolution requesting the

President to consider the feasibility of declaring the land under Transfer Certificate of Title
25545-25547 as patrimonial property of Manila for the purpose of selling these lots to the
actual occupants thereof. The resolution was then transmitted to the Congress. The bill was
then passed by Congress and approved by President, and became Republic Act 4118,
converting the land from communal property to disposable and alienable land of State.

To implement RA 4118, Land Authority requested City of Manila to deliver the City’s TCT
22547 in order to obtain title thereto in the name of Land Authority. The request was granted
with the knowledge and consent of City mayor, cancelling TCT 22547 and issuing TCT 80876
in the name of Land Authority.

City of Manila, for some reasons, brought an action to restrain, prohibit, and enjoin Land
Authority and Register of Deeds from implementing RA 4118, and praying for the declaration
of RA 4118 as unconstitutional.

Trial court declared RA 4118 to be unconstitutional and invalid on the ground that it deprived
City of its property without due process of law and payment of just compensation.

Land Authority and Register of Deeds argued that the land is a communal land, or a portion
of public domain owned by State; that the land has not been used by City of Manila for any
public purpose; that it was originally a communal land not because it was needed in
connection with its organisation as a municipality but rather for the common use of its
inhabitants; that the City mayor merely enjoys the usufruct over said land and its exercise of
acts of ownership by selling parts thereof did not necessarily convert the land into a
patrimonial property of City of Manila nor divert the State of its paramount title.

ISSUE: Whether the land is a private or patrimonial property of the City of Manila.

HELD:

The land is public property.

 CONSTI LAW118

As a general rule, regardless of the source or classification of the land in the possession of
municipality, excepting those which it acquired in its own funds in its private or corporate
capacity, such property is held for the State for the benefit of its inhabitants, whether it be
for governmental or proprietary purposes. The legal situation is the same if the State itself
holds the property and puts it to a different use.

When it comes to property of municipality which it did not acquire in its private or corporate
capacity with its own funds (the land was originally given to City by Spain), the legislature
can transfer its administration and disposition to an agency of the National Government to
be disposed of according to its discretion. Here it did so in obedience to the constitutional
mandate of promoting social justice to insure the well-being and economic security of the
people.

The property was not acquired by the City of Manila with its own funds in its private or
proprietary capacity. The land was part of the territory of City of Manila granted by sovereign
in its creation. Furthermore, City expressly recognised the paramount title of the State over
its land when it requested the President to consider the feasibility of declaring the lot as
patrimonial property for selling.

There could be no more blatant recognition of the fact that said land belongs to the State
and was simply granted in usufruct to the City of Manila for municipal purposes. But since
the City did not actually use said land for any recognized public purpose and allowed it to
remain idle and unoccupied for a long time until it was overrun by squatters, no presumption
of State grant of ownership in favor of the City of Manila may be acquiesced in to justify the
claim that it is its own private or patrimonial property.

WHEREFORE, the appealed decision is hereby reversed, and petitioners shall proceed with
the free and untrammeled implementation of Republic Act No. 4118 without any obstacle
from the respondents. Without costs.

ARCE VS. GENITO (TO FOLLOW)

GUIDO VS RPA

TUASON, J.:

This a petition for prohibition to prevent the Rural Progress Administration and Judge Oscar
Castelo of the Court of First Instance of Rizal from proceeding with the expropriation of the
petitioner Justa G. Guido's land, two adjoining lots, part commercial, with a combined area of
22,655 square meters, situated in Maypajo, Caloocan, Rizal, just outside the north Manila
boundary, on the main street running from this city to the north. Four grounds are adduced
in support of the petition, to wit:
 CONSTI LAW119

(1) That the respondent RPA (Rural Progress Administration) acted without jurisdiction or
corporate power in filling the expropriation complaint and has no authority to negotiate with
the RFC a loan of P100,000 to be used as part payment of the value of the land.

(2) That the land sought to be expropriated is commercial and therefore excluded within the
purview of the provisions of Act 539.

(3) That majority of the tenants have entered with the petitioner valid contracts for lease, or
option to buy at an agreed price, and expropriation would impair those existing obligation of
contract.

(4) That respondent Judge erred in fixing the provisional value of the land at P118,780 only
and in ordering its delivery to the respondent RPA.

We will take up only ground No. 2. Our conclusion on this branch of the case will make
superfluous a decision on the other questions raised.

Sections 1 and 2 of Commonwealth Act No. 539, copied verbatim, are as follows:

SECTION 1. The President of the Philippines is authorized to acquire private lands or any
interest therein, through purchaser or farms for resale at reasonable prices and under such
conditions as he may fix to their bona fide tenants or occupants or to private individuals who
will work the lands themselves and who are qualified to acquire and own lands in the
Philippines.

SEC. 2. The President may designated any department, bureau, office, or instrumentality of
the National Government, or he may organize a new agency to carry out the objectives of
this Act. For this purpose, the agency so created or designated shall be considered a public
corporation.

The National Assembly approved this enactment on the authority of section 4 of Article XIII
of the Constitution which, copied verbatim, is as follows:

The Congress may authorize, upon payment of just compensation, the expropriation of lands
to be subdivided into small lots and conveyed at cost to individuals.

What lands does this provision have in view? Does it comprehend all lands regardless of
their location, nature and area? The answer is to be found in the explanatory statement of
Delegate Miguel Cuaderno, member of the Constitutional Convention who was the author or
sponsor of the above-quoted provision. In this speech, which was entitled "Large Estates and
Trust in Perpetuity" and is transcribed in full in Aruego's "The Framing of the Philippine
Constitution," Mr. Cuaderno said:

There has been an impairment of public tranquility, and to be sure a continuous of it,
because of the existence of these conflicts. In our folklore the oppression and exploitation of
the tenants are vividly referred to; their sufferings at the hand of the landlords are
emotionally pictured in our drama; and even in the native movies and talkies of today, this
theme of economic slavery has been touched upon. In official documents these same
conflicts are narrated and exhaustively explained as a threat to social order and stability.

But we should go to Rizal inspiration and illumination in this problem of this conflicts
between landlords and tenants. The national hero and his family were persecuted because
of these same conflicts in Calamba, and Rizal himself met a martyr's death because of his
 CONSTI LAW120

exposal of the cause of the tenant class, because he would not close his eyes to oppression
and persecution with his own people as victims.lawphi1.nêt

I ask you, gentlemen of the Convention, knowing this as you do and feeling deeply as you
must feel a regret over the immolation of the hero's life, would you not write in the
Constitution the provision on large estates and trust in perpetuity, so that you would be the
very instrument of Providence to complete the labors of Rizal to insure domestic tranquility
for the masses of our people?

If we are to be true to our trust, if it is our purpose in drafting our constitution to insure
domestic tranquility and to provide for the well-being of our people, we cannot, we must fail
to prohibit the ownership of large estates, to make it the duty of the government to break up
existing large estates, and to provide for their acquisition by purchase or through
expropriation and sale to their occupants, as has been provided in the Constitutions of
Mexico and Jugoslavia.

No amendment was offered and there was no debate. According to Dean Aruego, Mr.
Cuaderno's resolution was readily and totally approved by the Convention. Mr. Cuaderno's
speech therefore may be taken as embodying the intention of the framers of the organic
law, and Act No. 539 should be construed in a manner consonant with that intention. It is to
be presumed that the National Assembly did not intend to go beyond the constitutional
scope of its powers.

There are indeed powerful considerations, aside from the intrinsic meaning of section 4 of
Article XIII of the Constitution, for interpreting Act No. 539 in a restrictive sense. Carried to
extremes, this Act would be subversive of the Philippine political and social structure. It
would be in derogation of individual rights and the time-honored constitutional guarantee
that no private property of law. The protection against deprivation of property without due
process for public use without just compensation occupies the forefront positions (paragraph
1 and 2) in the Bill for private use relieves the owner of his property without due process of
law; and the prohibition that "private property should not be taken for public use without just
compensation" (Section 1 [par. 2], Article III, of the Constitution) forbids necessary
implication the appropriation of private property for private uses (29 C.J.S., 819). It has been
truly said that the assertion of the right on the part of the legislature to take the property of
and citizen and transfer it to another, even for a full compensation, when the public interest
is not promoted thereby, is claiming a despotic power, and one inconsistent with very just
principle and fundamental maxim of a free government. (29 C.J.S., 820.)

Hand in hand with the announced principle, herein invoked, that "the promotion of social
justice to insure the well-being and economic security of all the people should be the
concern of the state," is a declaration, with which the former should be reconciled, that "the
Philippines is a Republican state" created to secure to the Filipino people "the blessings of
independence under a regime of justice, liberty and democracy." Democracy, as a way of life
enshrined in the Constitution, embraces as its necessary components freedom of
conscience, freedom of expression, and freedom in the pursuit of happiness. Along with
these freedoms are included economic freedom and freedom of enterprise within reasonable
bounds and under proper control. In paving the way for the breaking up of existing large
estates, trust in perpetuity, feudalism, and their concomitant evils, the Constitution did not
propose to destroy or undermine the property right or to advocate equal distribution of
wealth or to authorize of what is in excess of one's personal needs and the giving of it to
another. Evincing much concern for the protection of property, the Constitution distinctly
recognize the preferred position which real estate has occupied in law for ages. Property is
bound up with every aspects of social life in a democracy as democracy is conceived in the
Constitution. The Constitution owned in reasonable quantities and used legitimately, plays in
 CONSTI LAW121

the stimulation to economic effort and the formation and growth of a social middle class that
is said to be the bulwark of democracy and the backbone of every progressive and happy
country.

The promotion of social justice ordained by the Constitution does not supply paramount
basis for untrammeled expropriation of private land by the Rural Progress Administration or
any other government instrumentality. Social justice does not champion division of property
or equality of economic status; what it and the Constitution do guaranty are equality of
opportunity, equality of political rights, equality before the law, equality between values
given and received on the basis of efforts exerted in their production. As applied to
metropolitan centers, especially Manila, in relation to housing problems, it is a command to
devise, among other social measures, ways and means for the elimination of slums,
shambles, shacks, and house that are dilapidated, overcrowded, without ventilation. light
and sanitation facilities, and for the construction in their place of decent dwellings for the
poor and the destitute. As will presently be shown, condemnation of blighted urban areas
bears direct relation to public safety health, and/or morals, and is legal.

In reality, section 4 of Article XIII of the Constitution is in harmony with the Bill of Rights.
Without that provision the right of eminent domain, inherent in the government, may be
exercised to acquire large tracts of land as a means reasonably calculated to solve serious
economic and social problem. As Mr. Aruego says "the primary reason" for Mr. Cuaderno's
recommendation was "to remove all doubts as to the power of the government to
expropriation the then existing landed estates to be distributed at costs to the tenant-
dwellers thereof in the event that in the future it would seem such expropriation necessary
to the solution of agrarian problems therein."

In a broad sense, expropriation of large estates, trusts in perpetuity, and land that embraces
a whole town, or a large section of a town or city, bears direct relation to the public welfare.
The size of the land expropriated, the large number of people benefited, and the extent of
social and economic reform secured by the condemnation, clothes the expropriation with
public interest and public use. The expropriation in such cases tends to abolish economic
slavery, feudalistic practices, and other evils inimical to community prosperity and
contentment and public peace and order. Although courts are not in agreement as to the
tests to be applied in determining whether the use is public or not, some go far in the
direction of a liberal construction as to hold that public advantage, and to authorize the
exercise of the power of eminent domain to promote such public benefit, etc., especially
where the interest involved are considerable magnitude. (29 C.J.S., 823, 824. See also
People of Puerto Rico vs. Eastern Sugar Associates, 156 Fed. [2nd], 316.) In some instances,
slumsites have been acquired by condemnation. The highest court of New York States has
ruled that slum clearance and reaction of houses for low-income families were public
purposes for which New York City Housing authorities could exercise the power of
condemnation. And this decision was followed by similar ones in other states. The underlying
reasons for these decisions are that the destruction of congested areas and insanitary
dwellings diminishes the potentialities of epidemic, crime and waste, prevents the spread of
crime and diseases to unaffected areas, enhances the physical and moral value of the
surrounding communities, and promotes the safety and welfare of the public in general.
(Murray vs. La Guardia, 52 N.E. [2nd], 884; General Development Coop. vs. City of Detroit,
33 N.W. [2ND], 919; Weizner vs. Stichman, 64 N.Y.S. [2nd], 50.) But it will be noted that in all
these case and others of similar nature extensive areas were involved and numerous people
and the general public benefited by the action taken.

The condemnation of a small property in behalf of 10, 20 or 50 persons and their families
does not inure to the benefit of the public to a degree sufficient to give the use public
character. The expropriation proceedings at bar have been instituted for the economic relief
 CONSTI LAW122

of a few families devoid of any consideration of public health, public peace and order, or
other public advantage. What is proposed to be done is to take plaintiff's property, which for
all we know she acquired by sweat and sacrifice for her and her family's security, and sell it
at cost to a few lessees who refuse to pay the stipulated rent or leave the premises.

No fixed line of demarcation between what taking is for public use and what is not can be
made; each case has to be judge according to its peculiar circumstances. It suffices to say
for the purpose of this decision that the case under consideration is far wanting in those
elements which make for public convenience or public use. It is patterned upon an ideology
far removed from that consecrated in our system of government and embraced by the
majority of the citizens of this country. If upheld, this case would open the gates to more
oppressive expropriations. If this expropriation be constitutional, we see no reason why a
10-, 15-, or 25-hectare farm land might not be expropriated and subdivided, and sold to
those who want to own a portion of it. To make the analogy closer, we find no reason why
the Rural Progress Administration could not take by condemnation an urban lot containing
an area of 1,000 or 2,000 square meters for subdivision into tiny lots for resale to its
occupants or those who want to build thereon.

The petition is granted without special findings as to costs.

Moran, C.J., Feria, Bengzon, Padilla and Montemayor, JJ., concur.

Paras and Reyes, JJ., concur in the result.

Separate Opinions

TORRES, J., concurring:

I fully concur in the above opinion of Mr. Justice Tuason. I strongly agree with him that when
the framers of our Constitution wrote in our fundamental law the provision contained in
section 4 of Article XIII, they never intended to make it applicable to all cases, wherein a
group of more or less numerous persons represented by the Rural Progress Administration,
or some other governmental instrumentality, should take steps for the expropriation of
private land to be resold to them on the installment plan. If such were the intention of the
Constitution, if section 4 of its Article XIII will be so interpreted as to authorize that
government corporation to institute the corresponding court proceedings to expropriate for
the benefit of a new interested persons a piece of private land, the consequence that such
interpretation will entail will be incalculable.

In addition to the very cogent reasons mentioned by Mr. Justice Tuason in support of his
interpretation of that constitution created by the acquisition of the so-called friar lands at
the beginning of the establishment of civil government by the United States in these islands.
After the lapse of a few years, the tenants for whose benefit those haciendas were
purchased by the government, and who signed contracts of purchase by the government.
Thousands of cases were time, the Government which had been administering those
haciendas for a long period of years went into much expense in order to achieve the purpose
of the law. I take for granted that in this case the prospective purchasers, in inducing the
government to buy the land to be expropriated and sold to them by lots on the installments
plan do from the beginning have the best of intentions to abide by the terms of the contract
which they will be required to sign.

If I am not misinformed, the whole transaction in the matter of the purchase of the friar
lands has been a losing proposition, with the government still holding many lots originally
 CONSTI LAW123

intended for sale to their occupants, who for some reasons or other failed to comply with the
terms of the contract signed by them.

Without the sound interpretation thus given this Court restricting within reasonable bounds
the application of the provision of section 4 of Article XIII of our Constitution and clarifying
the powers of the Rural Progress Administration under Commonwealth Act No. 539, said
corporation — or, for that matter, some other governmental entity — might embark in a
policy of indiscriminate acquisition of privately — owned land, urban or otherwise just for the
purpose of taking care of the wishes of certain individuals and, as outlined by Mr. Justice
Tuason, regardless of the merits of the case. And once said policy is carried out, it will place
the Government of the Republic in the awkward predicament of veering towards socialism, a
step not foreseen nor intended by our Constitution. Private initiative will thus be substituted
by government action and intervention in cases where the action of the individual will be
more than enough to accomplish the purpose sought. In the case at bar, it is understood
that contracts, for the sale by lots of the land sought to be expropriated to the present
tenants of this herein petitioner, have been executed. There is, therefore, not the slightest
reason for the intervention of the government in the premises.

Justa G. Guido vs. Rural Progress Administration, c/o Faustino Aguilar, 84 Phil 847

Social justice does not champion division of property or equality of economic status; what it
and the Constitution do guaranty are equality of opportunity, equality of political rights,
equality before the law, equality between values given and received on the basis of efforts
exerted in their production.

Justa Guido, owner of the land being expropriated by the Rural Progress Administration
(RPA), filed a petition for prohibition to prevent RPA and Judge Oscar Castelo from
proceeding with the expropriation. Guido alleged, among others, that the land sought to be
expropriated is commercial and therefore excluded within the purview of the provisions of
Act 539. Commonwealth Act No. 539 authorized the President of the Philippines to acquire
private lands or any interest therein through purchaser or farms for resale at a reasonable
price. The National Assembly approved this enactment on the authority of section 4 of
Article XIII of the Constitution which provides that the Congress may authorize, upon
payment of just compensation, the expropriation of lands to be subdivided into small lots
and conveyed at cost to individuals.

Issue:

Whether the expropriation of Guido’s land is in conformity to the principle of Social Justice.

Ruling: NO.

Hand in hand with the principle that no one shall be deprived of his property without due
process of law, herein invoked, and that "the promotion of social justice to insure the well-
being and economic security of all the people should be the concern of the state," is a
declaration, with which the former should be reconciled, that "the Philippines is a Republican
state" created to secure to the Filipino people "the blessings of independence under a
regime of justice, liberty and democracy."

Democracy, as a way of life enshrined in the Constitution, embraces as its necessary

components freedom and along with these freedoms are included economic freedom and
freedom of enterprise within reasonable bounds and under proper control. In paving the way
for the breaking up of existing large estates, trust in perpetuity, feudalism, and their
 CONSTI LAW124

concomitant evils, the Constitution did not propose to destroy or undermine the property
right or to advocate equal distribution of wealth or to authorize of what is in excess of one's
personal needs and the giving of it to another.

The condemnation of a small property in behalf of 10, 20 or 50 persons and their families
does not inure to the benefit of the public to a degree sufficient to give the use public
character. The expropriation proceedings at bar have been instituted for the economic relief
of a few families devoid of any consideration of public health, public peace and order, or
other public advantage. What is proposed to be done is to take plaintiff's property, which for
all we know she acquired by sweat and sacrifice for her and her family's security, and sell it
at cost to a few lessees who refuse to pay the stipulated rent or leave the premises.

No fixed line of demarcation between what taking is for public use and what is not can be
made; each case has to be judge according to its peculiar circumstances. It suffices to say
for the purpose of this decision that the case under consideration is far wanting in those
elements which make for public convenience or public use. It is patterned upon an ideology
far removed from that consecrated in our system of government and embraced by the
majority of the citizens of this country. If upheld, this case would open the gates to more
oppressive expropriations. If this expropriation be constitutional, we see no reason why a
10-, 15-, or 25-hectare farm land might not be expropriated and subdivided, and sold to
those who want to own a portion of it. To make the analogy closer, we find no reason why
the Rural Progress Administration could not take by condemnation an urban lot containing
an area of 1,000 or 2,000 square meters for subdivision into tiny lots for resale to its
occupants or those who want to build thereon.

The petition is granted without special findings as to costs.

REPUBLIC VS. BAYLOSIS

REYES, J.B.L., J.:

This case is an offshoot of our decision in G.R. No. L-6191, Republic of the
Philippines vs. Cirilo Baylosis, et al., promulgated January 31, 1955, (96 Phil., 461; 51 Off.
Gaz., No. 2, 62), sustaining the motions to dismiss of appellants and ordering the dismissal
of the expropriation proceedings filed by the Republic of the Philippines in the Court of First
Instance of Batangas (C.C. No. 84) to expropriate seven lots formerly constituting part of the
Lian Estate (Hacienda Lian) in the municipality of Lian, Batangas.

It appears that after the records were returned by this Court to the Court a quo, the plaintiff
Republic of the Philippines filed on June 30, 1955 a motion to withdraw its preliminary
deposit of P27,105.22 made pursuant to section 3, Rule 69 of the Rules of Court, and by
virtue of which it was placed in the possession of parcels in question, on the ground that
whatever claims for damages the finality of our decision in G.R. No. L-6191, which made no
pronouncement on nor contained a reservation of defendants' right to claim damages.
Defendants opposed the motion, claiming that their losses and damages resulting from the
transfer of the possession of their lands to plaintiff and which they alleged in their motions
to dismiss had not yet been determined by the trial court. Notwithstanding the opposition,
the court below, on July 25, 1955, ordered the result of the aforesaid deposit to plaintiff, for
the reason that "the defendants have not taken any step towards the recovery of such
damages," nor "is there any assurance that they would do so in the immediate future, on the
 CONSTI LAW125

assumption that their right to pursue such claim for damages is not barred by laches".
Defendants accordingly moved for the reconsideration of such order, and before their
motion for reconsideration was resolved, also moved that their counterclaims for the
damages be set for hearing. Both motions were denied by the court; whereupon, defendants
interposed the present appeal to this Court.1awphîl.nèt

We find merit in the appeal.

Firstly, appellants are right in claiming that the lower court should not have authorized the
withdrawal of plaintiff's preliminary deposit before their right to recover the damages
allegedly suffered by them by reason of the filing of the expropriation suit is finally
determined and adjudicated. For as we said in Visayan Refining Co. vs. Camus, 40 Phil., 562,
said deposit protects the defendant "from any danger of loss resulting from the temporary
occupation of the land by the Government, for it is obvious that this preliminary deposit
serve the double purpose of a prepayment upon the value of the property, if finally
expropriated, and as an indemnity against damages in the eventuality that the proceedings
should fail of consummation." To return this deposit to plaintiff now would, therefore, be
depriving defendants of this legal safeguard for the payment of their damages in case they
are finally held to have the right to collect said damages in these same proceedings.

The decisive question in this appeal, therefore, is whether or not appellants can still prove
and recover their damages in this same action. Appellee and the lower court entertain the
view that appellants are now barred from claiming any damages in this case, because our
decision in G.R. No. L-6191 made no reservation of their right to do so, and said decision is
now res judicata. Appellants, upon the other hand, maintain that the only issue involved in
that appeal was plaintiff's right to expropriate their lands, and as their right to damages was
not brought up and litigated therein, the decision of this Court in said appeal can not be res
judicata as to such matter. Again we find appellant's position on this matter the more
tenable. The records show that all of appellants' motion to dismiss contained counterclaims
for damages supposedly suffered by them as a result of the filing of the expropriation
proceedings. When the motions to dismiss were called for trial, however, the hearing was
confined to the issue of plaintiff's right to expropriate, and evidence was accordingly
adduced by the parties on this question alone (see Decision of the court below, R.A., pp.
162-163). In fact, defendants at this hearing started to prove their damages, but they were
prevented from doing so by the lower Court, saying that such matter "will be for the
commissioners" (t.s.n. of February 18, 1952, p. 293); and for that reason, defendants,
through counsel, repeatedly manifested that they were reserving their right to present
evidence on their damages (t.s.n., ibid, pp. 293, 297, 298), and the reservation was
approved by the court (ibid, p. 298). Unfortunately for defendants, the trial court upheld
plaintiff's right to expropriate; and from this finding exclusively, they appealed to this Court
in G.R. No. L-6191.

In view of the antecedents, it can not be said that appellants are now barred from proving
their alleged in this case simply because their right to do so had not been reserved in our
decision in G.R. No. L-6191. The reservation had already been made in the court below and
duly approved therein; the reservation was not questioned by the Government, and it did
not appeal therefrom. As there was already that reservation, it was needless for appellants,
to raise such matter on appeal or ask for a reservation of their right to prove damages in our
decision in G.R. No. L-6191. In a similar case wherein agreed to the appointment of
commissioners and presented evidence before them, upon the understanding that said
hearing was without prejudice to discussing later the question relative to the right to plaintiff
to expropriate, we held that the reservation was "very expressive in the sense that in the
mind of the court, defendants never had the intention of waiving that defense as otherwise
it would not stated in its order such reservation. Such reservation negatives the idea of
 CONSTI LAW126

waiver." (Republic vs. G.R. No. L-6161, May 28, 1954.) The reservation made by appellants
and approved by the court in this case can not be any less effective than the reservation in
the Gabriel case.

Plaintiff-appellee cites two cases to support its contention that the absence of a reservation
of appellants' right to recover damages in G.R. No. L-6191 forecloses such right, but the case
cited are inapplicable to this case because of the substantial differences in the facts and
issues in said cases and the present one. In the first place, both cases cited involved, not
motions to dismiss filed by defendants wherein they expressly included counterclaims for
damages as in this case, but motions to dismiss at the instance of plaintiff, the very party
that filed the expropriation proceedings. In the first case, Metropolitan Water District vs. De
Los Angeles, 55 Phil., 776 plaintiff's motion to dismiss was even filed after the lower court
had already decided the case in its favor, and an appeal already taken by both parties on
the question of just compensation. In view of the motion to dismiss filed by plaintiff on
appeal, the only question presented for decision was whether or not plaintiff should be
allowed to dismiss the proceedings at that stage, since defendants had already suffered
great damages by reason of their dispossession and incurred into great expenses by reason
of the long and protracted litigation. In sustaining plaintiff's right to dismiss, we had, of
necessity and in justice to defendants, to reserve to them the right to recover their damages
either in the same or in another action. While in the case of City of Manila vs. J.C. Ruymann,
37 Phil., 421, the lower court sustained plaintiff's motion to dismiss the expropriation
proceedings, reserving to defendants their to prove damages in another action, so that
defendants appealed, urging that they should be allowed to recover their damages in the
same proceedings since they had claimed damages in their motions to dismiss. As the
precise question presented to us in the appeal was defendants' right to claim and recover
damages in the same proceedings, it was necessary for us to declare in our decision that
they had said right. These cases can not be invoked in the case at bar, not only because the
only question presented in G.R. No. L-6191 was whether or not plaintiff was entitled to
expropriate defendants' properties, but also because, as already stated, the right of
defendants to prove in the same proceedings the damages alleged in their motions to
dismiss had already been reserved to them by the trial court.

The remaining question involves the denial by the court below of appellants' motion to set
for hearing their counterclaims for damages, for the reason given that "the motion of the
defendants to set for hearing their counterclaim for damages would in effect be to reopen a
case decided by the Supreme Court unconditionally and with finality" (R.A., p. 208). This
order will also have to be reserve, in view of what we have already said upholding
appellants' right to prove and recover their damages in these same proceedings. As for
appellee's contention that appellants are guilty of laches in the prosecution of their claims
for damages, we do not think the delay of four months in their asking for the trial of their
counterclaims (see Appellee's Brief, p. 8) is such unreasonable length of time as would
justify us to dismiss said claims on the ground of laches or non-suit. Anyway, no prejudice
could have been caused plaintiff by this delay.

Wherefore, the order appealed from is reserved, and the records are remanded to the
court a quo for trial on appellants' counterclaims for damages and other reliefs contained in
their motions to dismiss. Costs against plaintiff-appellee.

MATAAS NA LUPA VS DIMAYUGA

G.R. No. L-32049 June 25, 1984

 CONSTI LAW127

MAKASIAR, J.:

This petition for review on certiorari presents for review the order dated October 30, 1969 of
the defunct Court of First Instance of Manila, Branch IV, which granted the motion to dismiss
the complaint of petitioners in Civil Case No. 75391 on the ground that the same failed to
state a cause of action (p. 16, rec.; pp. 1, 100, CFI rec.).

The undisputed facts are as follows:

On January 17, 1969, petitioners filed a complaint for the exercise of preferential rights with
the then Court of First Instance of Manila, Branch IV, docketed as Civil Case No. 75391 (p.
32, rec.; p. 1, CFI rec.).

The said complaint alleged that petitioner association has for its members Nicolas Aglabay,
et al., named and listed in Annex "A" of said complaint, which members are heads of 110
tenant families, and who have been, for more than ten years prior to 1959, occupants of a
parcel of land (with their 110 houses built thereon), formerly owned by the respondent,
Juliana Diez Vda. de Gabriel, to whom petitioners have been paying rents for the lease
thereof, but who, on May 14, 1968, without notice to petitioners, sold the same to
respondent Carlos Dimayuga, who, in turn, mortgaged the same to her for the balance of the
purchase price; that according to Republic Act 1162, as amended by Republic Act 2342, a
parcel of land in Manila and suburbs, with at least fifty (50) houses of tenants erected
thereon and actually leased to said tenants for at least ten (10) years prior to June 20, 1959,
may not be sold by the landowner to any person other than such tenants, unless the latter
renounced their rights in a public instrument; that without said tenants-appellants having
renounced their preferential rights in public instrument, respondent Vda. de Gabriel sold the
land to respondent Dimayuga; that petitioners-tenants are willing to purchase said land at
the same price and on the same terms and conditions observed in the contract of sale with
respondent Dimayuga; and that since aforesaid contract of sale is expressly prohibited by
law, the same is null and void, while it is mandatory for respondent Vda. de Gabriel to
execute such sale to petitioners, Petitioners therefore prayed that said contract of sale be
declared void, and that respondent Vda. de Gabriel be ordered to execute a deed of sale in
favor of petitioners at the same price and conditions followed in the contract with
respondent Dimayuga, plus attorney's fees and damages (p. 32, rec.; p. 1, CFI rec.).

On January 31, 1969, respondent Vda. de Gabriel filed a motion to dismiss on the ground
that the complaint stated no cause of action because the land subject of the complaint is not
a landed estate, and not being such, the same cannot be expropriated, and not being
expropriable, no preferential rights could be availed of by the tenants (p. 41, rec.; p. 22, CFI
rec.).

Respondent Dimayuga filed his answer to aforesaid complaint on February 6, 1969 admitting
therein certain factual allegations, denied some averments, interposed the affirmative
defenses that plaintiffs had no personality to initiate the action since the Land Tenure
Administration possessed the power to institute the proper expropriation proceedings before
the competent court and that the subject complaint stated no cause of action against
respondent, alleged a counterclaim to eject plaintiffs from the property, and prayed for the
dismissal of the complaint and other remedies (p. 44, rec.; p. 155, CFI rec.).lwphl@itç

On February 6, 1969, plaintiffs-petitioners filed their opposition to the motion to dismiss,

maintaining, among others, that Republic Act 1162, as amended by Republic Act 2342 (law
which respondent Vda. de Gabriel invoked), does not necessarily refer to landed estates, but
to any piece of land occupied by more than 50 families leasing the same for more than ten
(10) years prior to June 20, 1959; that their preferential rights are independent of the
 CONSTI LAW128

expropriability of the land; that therefore, said rights may be exercised even if the land is not
expropriable; and that these rights were granted pursuant to the police power of the State
for the general welfare, with prayer that aforesaid motion to dismiss be denied (p. 47, rec.;
p. 26, CFI rec.).

On February 13, 1969, respondent Vda. de Gabriel replied to the aforesaid opposition to
motion to dismiss, reiterating therein her prayer to dismiss the complaint (p. 57, rec.; p. 38,
CFI rec.).

Plaintiffs-petitioners filed their rejoinder to above reply to their opposition on February 19,
1969, laying emphasis on the alleged distinction between the two ways of acquiring
occupied land under Republic Act 1162, which are expropriation and voluntary disposal of
the land by the owner thereof, and which are exercisable independently of each other (p. 56,
rec.; p. 42, CFI rec.).

On October 30, 1969, Branch IV of the Court of First Instance of Manila issued the subject
order which found respondent's motion to dismiss well-taken and thereby dismissed the
complaint (p. 69, rec.; p. 100, CFI rec.).

Petitioners moved for reconsideration of the aforecited order on January 7, 1970, which
motion was denied in the lower court's order of January 27, 1970 (p. 111, 190, CFI rec.).

On February 9, 1970, petitioners filed a notice of appeal with the lower court to which
respondent Vda. de Gabriel moved for dismissal of the same on February 11, 1970 on the
alleged ground that pursuant to Republic Act 5440, petitioners should have appealed from
the questioned order by way of a petition for certiorari to this Court since the matter
involved only errors or questions of law (p. 143, CFI rec.).

After a series of motions, reply, rejoinder, sur-rejoinder, and answer between both parties,
the lower court issued its order of May 11, 1970 dismissing petitioners' appeal (p. 225, CFI
rec.).

Petitioners thus resorted to this petition.

Petitioners contend that the lower court committed an error in dismissing their complaint on
the ground that since the land is not expropriable, it follows that the tenants therein have no
preferential rights to buy said land, if the same is sold voluntarily. Petitioners' contention is
anchored on the amendment introduced by Republic Act 3516 into Section 1 of Republic Act
1162, which latter law had been invoked in the decision of the lower court.

According to petitioners, the phrase "any landed estates or haciendas herein authorized to
be expropriated" had been amended to read "any landed estates or haciendas or lands
herein authorized to be expropriated"; hence, Republic Act 1162 does not refer exclusively to
landed estates or haciendas, but even to smaller lands. The particular section as amended
reads thus:

The expropriation of landed estates or haciendas, or lands which formerly

formed part thereof, or any piece of land in the City of Manila, Quezon City
and suburbs, which have been and are actually being leased to tenants for at
least ten years, is hereby authorized: Provided, That such lands shall have at
least forty families of tenants thereon. (Sec. 1 of R. A. 3516).
 CONSTI LAW129

Petitioners likewise invoke the amended title of Republic Act 1162 which had been
introduced by Republic Act 2342 which title now reads as follows:

An Act Providing for the Expropriation of Landed Estates or Haciendas or

Lands Which Formerly Formed Part Thereof or Any Piece of Land in the City of
Manila, Quezon City and Suburbs, Their Subdivision into Small Lots, and the
Sale of Such Lots at Cost or Their Lease on Reasonable Terms, and for Other
Purposes (emphasis supplied).

Petitioners further allege that Republic Act 1162 is both an exercise of the power of eminent
domain and the police power of the State. The exercise of the police power of the State
refers to the grant of preferential rights to the tenants of such land, if the same is disposed
of voluntarily. Simply stated, petitioners theorize that Republic Act 1162 covers both
compulsory and voluntary sale; hence, while expropriability is pertinent to compulsory sale,
the same does not relate to voluntary sale. Even if the land is not expropriable, if the same
is however actually leased to the occupants for more than ten years prior to May 22, 1963
(when R.A. 3516 took effect) with at least 40 families, said land, if sold voluntarily, is subject
to the preferential rights of the tenants.

Respondent Vda. de Gabriel maintains, on the other hand, that there is no more issue
regarding the non-expropriability of subject land, which condition or status was expressly
admitted by petitioners in the lower court; that the title of Republic Act 1162, as amended
by Republic Act Nos. 2342 and 3516 clearly embraces expropriation; that the prohibitive acts
enumerated in Section 5 of R.A. 1162, as amended, are entirely dependent on the
expropriability of the land in controversy; that there is nothing in the aforecited law which
validly supports the alleged preferential right of petitioners to purchase the property at the
same price and under the same conditions; that the only reasonable interpretation of the
opening lines of Section 5 of Republic Act 1162, as amended, is that pending expropriation,
the landowner shall not sell the land to any other person than the tenant or occupant unless
the latter renounces his rights in a public instrument; but if the land is not expropriable, as
petitioners have admitted, the prohibition does not apply; and that clearly, from the
provision of Section 6 of the amended law, Section 5 thereof may be violated only if the land
is "herein authorized to be expropriated" and since petitioners have admitted the non-
expropriability of subject land, it necessarily follows that said Section 5 cannot apply.

Respondent Dimayuga avers that Section 9, in relation to the title of R.A. 1162, clearly
provides that the preferential right could be exercised only when the land under question is
subject to expropriation, or better still, if the tenanted property which formerly formed part
of an hacienda or is a landed estate, had been expropriated; and, that R.A. 1162, as
amended, embraces only landed estates or haciendas with an extensive area.

The sole issue raised by petitioners is whether or not they have the pre-emptive or
preferential rights to buy the land in question.

WE find for petitioners.

The third proviso in Section 5 of Republic Act 3516, which law further amended R.A. 1162,
reads:

Provided, furthermore, That no lot or portion thereof actually occupied by a

tenant or occupant shall be sold by the landowner to any other person than
 CONSTI LAW130

such tenant or occupant, unless the latter renounce in a public instrument his
rights under this Act: Provided, finally, That if there shall be tenants who have
constructed bona fide improvements on the lots leased by them, the rights of
these tenants should be recognized in the sale or in the lease of the lots, the
limitation as to area in Section three notwithstanding.

The provision clearly defines the preferential right of herein petitioners to buy the parcel of
land. It should be noted that respondent Vda. de Gabriel voluntarily sold the land to
respondent Dimayuga without informing the petitioners of the transaction. Respondent Vda.
de Gabriel did not give the first offer to petitioners who were then tenants-lessees and who
would have either accepted or refused to buy the land in a public 7 document. The fact is
that on discovery of the sale to respondent dent Dimayuga, petitioners filed their original
claim for preferential rights eight months after the clandestine sale. Thus, the condition set
forth in the aforesaid proviso — that of offering first the sale of the land to petitioners and
the latter's renunciation in a public instrument — were not met when the land was sold to
respondent Dimayuga. Evidently, said sale was made illegally and, therefore, void.
Petitioners have still the first option to buy the land as provided for in the above provision.

II

A brief run down of this Court's decisions easily reveal the adherence to the principle that
the test for a valid expropriation of private land for resale to its occupants, is the number of
families to be benefited thereby, and not the area.

In his book on Constitutional Law, Dean Isagani A. Cruz recapitulates thus:

In the earlier case of Rural Progress Administration v. Reyes, the Supreme

Court held that the criterion for determining the validity of expropriation under
this provision was not the area of the land sought to be taken but the number
of people intended to be benefited thereby. The land, in other words, could be
small provided it was tenanted by a sizable number of people.

This ruling was abandoned in the case of Guido v. Rural Progress

Administration where the Supreme Court declared, also by a split decision as
in the Reyes case, that the test to be applied was the area of the land and not
the number of people who stood to be benefitted by the expropriation. The
land should be a landed estate or one comprising a very fast area. It was
stressed that one of the purposes of the framers was precisely to break up
these estates in the hands of only a few individuals or families and thus more
equitably distribute them along the landless.

xxx xxx xxx

It has also been held that where a landed estate is broken up into reasonable
portions which are thereafter sold to separate purchasers, the resultant
portions cannot be deemed as still subject to expropriation under this
provision simply because they used to form part of a landed estate.

In the case of Tuason v. PHHC, which was a petition for prohibition to nullify a
law directing the expropriation of Tatalon Estate in Quezon City, Justice
Fernando suggested a ruling to the Reyes ruling arguing that the propriety of
expropriation "could not be determined on a purely quantitative or area
 CONSTI LAW131

basis," quoting from Justice J.B.L. Reyes in his dissenting opinion in

the Baylosis Case. ... (p 71,1983 Ed.; emphasis supplied).

From the Reyes case where the number of beneficiaries test was applied in determining
public use down to the Guido and Baylosis cases where the land or area size test was
invoked, then to the Tuason case where a return to the Reyes decision was made and then
up to the recent case of Pulido vs. Court of Appeals (L-57625, May 3, 1983; 122 SCRA 63)
where this Court found it "unfortunate that petitioner would be deprived of his land holdings,
but his interest and that of his family should not stand in the way of progress and the benefit
of the greater majority of the inhabitants of the country," there has evolved a clear pattern
of adherence to the "number of people to be benefited test.

This is made more manifest by the new constitutional provisions on the equitable diffusion of
property ownership and profits (Sec. 6, Art. 11) and the implementation of an agrarian
reform program aimed at emancipating the tenant from the bondage of the soil (Sec. 12, Art.
XIV).

It has been noted with concern that while respondents raised the issue of expropriability of
the parcel of land, petitioners limited themselves to the issue of preferential or pre-emptive
rights.

What petitioners might have failed to realize is that had they invoked the expropriability of
subject land, they would have had a foolproof case. Right from the start, they would have
had the upper hand. Ironically, however, instead of anchoring their case on the
expropriability of such land, they concentrated on asserting their preferential right to buy
the land. For, Section 1 of R.A. 1162, as amended by R.A. 3516, specifically authorizes the
expropriation of any piece of land in the City of Manila, Quezon City and suburbs which have
been and are actually being leased to tenants for at least ten (10) years, provided said lands
have at least forty families of tenants thereon. The case at bar comes within the coverage of
the aforesaid legal provision since the parcel of land is located in Manila which was then
actually leased to 110 tenant families 20 years prior to the commencement of this action in
the lower court. Clearly, therefore, the land in question is capable of expropriation.

The above situation now brings Us back to the case of J.M. Tuason & Co. vs. Land Tenure
Administration (L-21064, Feb. 18, 1970, 31 SCRA 413-417) where this Court laid down
certain basic doctrines on the power of eminent domain. Thus, this Court, speaking thru then
Justice Fernando, declared:

It does not admit of doubt that the congressional power conferred by the
Constitution is far from limited. It is left to the legislative will to determine
what lands may be expropriated so that they could be subdivided for resale to
those in need of them. Nor can it be doubted either that as to when such
authority may be exercised is purely for Congress to decide. Its discretion on
the matter is not to be interfered with. This is shown by reference to the
historical basis of the provision as reflected in the proceedings of the
Constitutional Convention.

Historical discussion while valuable is not necessarily decisive. It is easy to

understand why. The social and economic conditions are not static. They
change with the times. To Identify the text of a written constitution with the
circumstances that inspired its inclusion may render it incapable of being
responsive to future needs. Precisely, it is assumed to be one of the virtues of
a written constitution that it suffices to govern the life of the people not only
at the time of its framing but far into the indefinite future. It is not to be
 CONSTI LAW132

considered as so lacking in flexibility and suppleness that it may be a bar to

measures, novel and unorthodox, as they may appear to some, but
nonetheless imperatively called for.

xxx xxx xxx

The framers of the Constitution were seriously concerned with the grave
problems of inequality of wealth, with its highly divisive tendency, resulting in
the generous scope accorded the police power and eminent domain
prerogatives of the state, even if the exercise thereof would cover terrain of
property right previously thought of as beyond state control, to promote social
justice and the general welfare.

As in the case of the more general provision on eminent domain, the power to
expropriate lands under Sec. 4 of Art. XIII of the Constitution requires the
payment of just compensation, the taking to be for the public use, and to
meet the exacting standard of due process and equal protection guaranty of
the Constitution.

xxx xxx xxx

The power granted to Congress by the Constitution to "authorize, upon

payment of just compensation, the expropriation of lands to be subdivided
into small lots and conveyed at cost to individuals" is unlimited by any other
provision of the Constitution. Just compensation is in reality a part of the
power granted rather than a limitation thereto, just as just compensation is of
the essence in any exercise of the power of eminent domain as, otherwise it
would be plain commandeering.

While the taking must be for public use as a matter of principle, in the judicial
proceeding, the Government need not present evidence of such public use as
a fact. The constitutional provision itself declares the public objective, purpose
or use of the expropriation contemplated, hence, it should follow that as long
as a congressional legislation declares that the condemnation of a particular
land is for the specific purpose stated in the Constitution, it is not for the
judiciary to inquire as to whether or not the taking of such land is for public
use. The Constitution itself which is supposed to be the supreme law on
private property rights declares it to be so, and leaves it to Congress, not to
the judiciary, to make the choice of the lands to be taken to attain the
objective the constituent assembly aimed to achieve. The scope and the limit
of the power of the judiciary in this regard is only to determine the existence
of enabling legislation, to see to it that the facts are as contemplated in such
enabling act and to provide the vehicle for compliance with procedural due
process in the implementation of the congressional act.

On the matter of taking for public use, Chief Justice Fernando summarily observed:

The taking to be valid must be for public use. There was a time when it was
felt that a literal meaning should be attached to such a requirement.
Whatever project is undertaken must be for the public to enjoy, as in the case
of streets or parks. Otherwise, expropriation is not allowable. It is not so any
more. As long as the purpose of the taking is public, then the power of
eminent domain comes into play. As just noted, the Constitution in at least
two cases, to remove any doubt, determines what is public use One is the
 CONSTI LAW133

expropriation of lands to be subdivided into small lots for resale at cost to

individuals. The other is the transfer, through the exercise of this power, of
utilities and other private enterprise to the government. It is accurate to state
then that at present whatever may be beneficially employed for the general
welfare satisfies the requirement of public use (The Constitution of the
Philippines, 2nd Ed., 1977, pp. 523-24).

III

This preferential right of petitioners and the power of eminent domain have been further
mandated, strengthened and expanded by recent developments in law and jurisprudence.

It must be recalled that the 1973 Constitution embodies certain original and innovative
provisions on eminent domain. The new Constitution provides thus:

Private property shall not be taken for public use without just compensation"
(Sec. 2, Art. IV).

The Batasang Pambansa may authorize, upon payment of just compensation,

the expropriation of private lands to be subdivided into small lots and
conveyed at cost to deserving citizens (See. 13, Art. XIV).

The State shall promote social justice to ensure the dignity, welfare and
security of affirmatively the people. Toward this end, the State shall regulate
the acquisition Ownership, use, enjoyment and disposition of private property,
and equitably diffuse property ownership and profits (Sec. 6, Art. 11;
emphasis supplied).

The State shall establish, maintain, and ensure adequate social services in the
field of education, health, housing, employment, welfare, and social security
to guarantee the enjoyment by the people of a decent standard of living (Sec.
7, Art. 11).

The State shall formulate and implement an agrarian reform program aimed
at emancipating the tenant from the bondage of the soil and achieving the
goals enunciated in this Constitution (Sec. 12, Art. XIV).

The aforequoted Section 6 of Article 11, which is a modified version of the original provision
of the 1935 Constitution, "emphasizes the stewardship concept, under which private
property is supposed to be held by the individual only as a trustee for the people in general,
who are its real owners. As a mere steward, the individual must exercise his rights to the
proper- 4 ty not for his own exclusive and selfish benefit but for the good of the entire
community or nation" (p. 70, Phil. Political Law, Cruz, 1983 ed.).lwphl@itç

In the case of Almeda vs. Court of Appeals, et al. (L-43800, 78 SCRA 194 [July 29, 1977]),
this Court thus declared:

It is to be noted that under the new Constitution, property ownership is

impressed with social function. Property use must not only be for the benefit
of the owner but of society as well. The State, in the promotion of social
justice, may "regulate the acquisition, ownership, use, enjoyment and
disposition of private property, and equitably diffuse property — ownership
and profits." One governmental policy of recent date projects the
 CONSTI LAW134

emancipation of tenants from the bondage of the soil and the transfer to them
of the ownership of the land they till.

"The Legislature may regulate 'the acquisition, ownership, use, enjoyment and disposition of
private property,' to the end that maximum advantage can be derived from it by the people
as a whole. Thus, it may limit the size of private landholdings, impose higher taxes on
agricultural lands that are not being tilled, or provide for a wider distribution of land among
the landless. ... (p. 70, Phil. Political Law, Cruz, 1983 ed.).

It is obviously in the spirit of Sections 6 and 7 of Article 11 that P.D. No. 1517 on urban land
reform was enacted and the subsequent implementing Proclamation No. 1967 was issued.
Significantly also, the latest amendment to the Constitution on urban land reform and social
housing program which has been proclaimed by the President as having been approved in
the recent plebiscite on January 17, 1984 all the more emphasizes and strengthens the
constitutional base for urban land reform consistent with the provisions on social justice.

Even as we have consistently and explicitly pronounced that the power of eminent domain is
a basic and inherent power of government which does not have to be spelled out by the
Constitution, still our legislators felt such urgent demands for redistribution of land in this
country that they had to incorporate into the 1935 and 1973 Constitutions a specific
provision on expropriation of land for resale. Section 13, Article IV of the 1973 Constitution
specially authorizes the expropriation of private lands for resale.

Thus, as earlier mentioned, P.D. No. 1517 entitled "Proclaiming Urban Land Reform in the
Philippines and Providing for the Implementing Machinery Thereof" was enacted and beer
effective on June 1 1, 1978 and Proclamation No. 1967 was issued on May 14, 1980 as an
implementing law. This decree, which is firmly based on Section 6, Article 11 of the new
Constitution, undoubtedly adopts and crystallizes the greater number of people criterion
when it speaks of tenants and residents in declared urban land reform zones or areas
without any mention of the land area covered by such zones. The focus, therefore, is on
people who would stand to benefit and not on the size of the land involved.

It should now be clarified that Section 22 of the aforecited decree declares thus:

Sec. 22. Repealing Clause. — All laws, decrees, executive orders, rules and
regulations inconsistent herewith are hereby repealed, amended or modified
accordingly.

The decree has, therefore, superseded R.A. Nos. 1162, 2342 and 3516.

The issue of pre-emptive or preferential rights still remains for Our resolution within the
purview of the said decree.

The pertinent provisions of P.D. No. 1517 are as follows:

Sec. 4. Proclamation of Urban Land Reform Zones. — The President shall

proclaim specific parcels of urban and urbanizable lands as Urban Land
Reform Zones, otherwise known as Urban Zones for purposes of this Decree,
which may include Bagong Lipunan Sites, as defined in P.D. 1396 (par. 1 of the
section).

xxx xxx xxx

 CONSTI LAW135

Sec. 6. Land Tenancy in Urban Land Reform A Teas. Within the Urban Zones
legitimate tenants who have resided on the land for ten years or more who
have built their homes on the land and residents who have legally occupied
the lands by contract, continuously for the last ten years shall not be
dispossessed of the land and shall be allowed the right of first refusal to
purchase the same within a reasonable time and at reasonable prices, under
terms and conditions to be determined by the Urban Zone Expropriation and
Land Management Committee created by Section 8 of the Decree.

xxx xxx xxx

Sec. 9. Compulsory Declaration of Sale and Preemptive Rights. Upon the

proclamation by the President of an area as an Urban Land Reform Zone, all
landowners, tenants and residents thereupon are required to declare to the
Ministry any proposal to sell, lease or encumber lands and improvements
thereon, including the proposed price, rent or value of encumbrances and
secure approval of said proposed transactions.

The Ministry shag have the pre-emptive right to acquire the above-mentioned
lands and improvements thereon which shall include, but shag not be limited
to lands occupied by tenants as provided for in Section 6 of this Decree
(emphasis supplied).

Pursuant to the above decree and for purposes of making specific the applicability of the
same and other subsequent laws on the matter, the President issued Proclamation No. 1967
dated May 14, 1980 declaring Metropolitan Manila Area as Urban Land Reform Zone. Thus,
on page 2, No. 14 of said proclamation, Mataas na Lupa, the land in controversy, (an area
bounded on the northwest by Quirino Avenue, South Superhighway on the east, San Andres
Street on the south, and on the west, by Anak Bayan Street) was declared as an area for
priority development and urban land reform zone.

The aforequoted provisions of P.D. 1517 and the declaration in the aforesaid proclamation
are clear and leave no room for any interpretation. Evidently, petitioners' case falls squarely
within the law. Under Section 6 of the decree, the 110 tenant-families have been vested with
the right of first refusal to purchase the land in question within a reasonable time and
reasonable prices, subject to Ministry of Human Settlements rules and regulations.

WHEREFORE, THE ORDER DATED OCTOBER 30, 1969 OF THE THEN MANILA COURT OF FIRST
INSTANCE, BRANCH IV, IS HEREBY SET ASIDE AND THE MINISTRY OF HUMAN SETTLEMENTS
IS HEREBY DIRECTED TO FACILITATE AND ADMINISTER THE IMPLEMENTATION OF THE RIGHTS
OF HEREIN PETITIONERS. COSTS AGAINST RESPONDENTS.

SO ORDERED.

SAN DIEGO VS VANDELLON

G.R. No. L-45673 November 22, 1977

FERNANDO, J.:
 CONSTI LAW136

This is the second case where an order of a lower court judge, respondent Judge Nelly L.
Romero Valdellon in this instance, in an expropriation proceeding allowing late possession,
the other respondent this time being the Republic of the Philippines, upon compliance with
the applicable Presidential Decrees, 1 is assailed as having been issued either in excess of
jurisdiction or with grave abuse of discretion. The challenged order of January 26, 1977
reads as follows: "Acting on plaintiffs 'Manifestation and Motion' dated November 10, 1976
as well as that dated December 15, 1976, the latter motion having attached to it an
amended estimate of the costs of damages on oppositor's properties, and it appearing that
the requirements of both Presidential Decrees Nos. 42 and 76 have been complied with, and
since the defenses raised by defendants in their opposition and answer are proper during
the trial on the merits, plaintiff is hereby authorized to take possession of the property
sought to be expropriated, after depositing with the Philippine National Bank in the name of
defendants the additional amount of P138.69, representing the difference in appraisal." 2 In
the other case, Arce v. Genato, 3such an issue had to be resolved as the immediate
possession of the property sought to be expropriated by respondent Municipality of
Baliangao of Misamis Occidental was allowed by respondent Judge Genato. In dismissing
such petition, this Court held: "Presidential Decree No. 42 speaks categorically. It is thereby
decreed and ordered 'as part of the law of the land that, upon filing in the proper court of the
complaint in eminent domain proceedings or at anytime thereafter, and after due notice to
the defendant, plaintiff shall have the right to take or enter upon the possession of the real
property involved if he deposits with the Philippine National Bank, in its main office or any of
its branches or agencies, an amount equivalent to the assessed value of the property for
purposes of taxation to be held by said bank subject to the orders and final disposition of the
court. The decree, issued on November 9, 1972, was to 'take effect immediately.' It is
beyond question that such a decree is included within the Transitory Provisions of the
Constitution. So it is therein expressly provided: 'All proclamations, orders, decrees,
instructions, and acts promulgated, issued, or done by the incumbent President shall be part
of the law of the land, and shall remain valid, legal, binding, and effective even after lifting
the martial law or the ratification of this Constitution, unless modified, revoked, or
superseded by subsequent proclamations, orders, decrees. instructions, or other acts of the
incumbent President, or unless expressly and explicitly modified or repealed by the regular
National Assembly.' Deference to it, as is to be expected, has been accorded by this Court.
The task, therefore, of assailing a lower court order in compliance therewith, made a part of
the law of the land by the Constitution itself, is one attended with extreme difficulty. That is
why on its face, the weakness of the petition is rather apparent." 4 So it must be likewise in
this case.

There is no dispute as to the facts. The Republic of the Philippines, on October 29, 1976,
started expropriation proceedings with a complaint against the spouses Serapio San Diego
and Asuncion Balajadia, Rodante San Diego, and Lilia S. D. Chavez, now petitioners, filed
with the sala of respondent Judge. The property sought to be condemned covering 642
square meters, situated in the municipality of Morong, Rizal, would form part of a national
highway, the Pasig-Sta. Cruz-Calamba Road (Manila East Road), 2nd IBRD Project. It was
alleged in such complaint that upon the filing thereof and with due notice to the defendants,
"the plaintiff is authorized to take and enter into the possession of the properties involved,
upon deposit made with the Philippine National Bank, at its main office or at any of its
branches or agencies, of the amount equivalent to the assessed value of the subject
properties for purposes of taxation, to be held by said bank subject to the orders and final
disposition of the court (Presidential Decree No. 42)." 5 It was also set forth in such complaint
that for taxation purposes as computed in accordance with the rate provided for under
Presidential Decree No. 76, the value of such property is P2,889.00. 6 There was likewise
mention of its being needed for the construction of the Pasig-Sta. Cruz-Calamba Road
(Manila East Road), 2nd IBRD Project. 7 Then came as part of the prayer a plea for the
issuance of an order or writ authorizing it to take ion of the parcels of land in question and
appropriate the same for public use, upon the sum of P2,889.00 being deposited with the
 CONSTI LAW137

Philippine National Bank in its main office or any of its branches or agencies pursuant to
Presidential Decree No. 42. 8Thereafter, on November 10, 1976, a manifestation and motion
of the Republic of the Philippines alleging that it has deposited with the Philippine National
Bank, Pasig Branch, the amount of P5,848.00 representing the assessed value for taxation
purposes of the lands sought to be expropriated and the "value of the affected
improvements thereon," was filed with the lower court, with the prayer "that an order be
issued authorizing [it] to take possession of said properties sought to be expropriated and
appropriate the same for public use." 9 Petitioners as defendants in an ex-parte motion
sought deferment of the resolution of the plea for issuance of a writ of possession, on the
ground that there had been no independent assessment by the Provincial Assessor of Rizal
of the improvements on the lands in question pursuant to Presidential Decree No. 76, the
deposit requirement of Presidential Decree No. 42 not having been complied
with. 10 Respondent Judge granted such motion in an order of November 24, 1976 deferring
resolution of the plea by the Republic for the issuance of a writ of possession until it could be
shown that the requirements of the aforesaid Presidential decrees were complied
with.11 There were further proceedings, respondent Judge even conducting an ocular
inspection and deferring action on the motion for reconsideration filed by the Republic,
understandably convinced with the immediate possession of the land needed until there be
an amended estimate of the damages to be incurred by petitioners. So it was set forth in an
order of December 8, 1976. 12 Subsequently, on December 15, 1976, respondent Republic
filed a manifestation and motion praying that having submitted an amended estimate of the
value of the improvements of the land in question in the amount of P3,097.39, or an
increase of P138.39 over the previous appraisal, an order be issued authorizing it (Republic)
to take possession of the properties involved after it shall have deposited the additional
amount of P138.39. 13 There was an opposition on the part of petitioners. 14 It was not until a
month later, on January 26, 1977 to be exact, that the order, subject of this certiorari
proceeding, was issued.

It was the submission of Solicitor General Estelito P. Mendoza 15 in his comment treated as
the answer that the requisites of Presidential Decree No. 42 having been fully complied with,
there being filed in the proper court a complaint for expropriation with the deposit in the
Philippine National Bank of an amount equivalent to the assessed value of the property for
purposes of taxation to be held by said bank subject to the orders and final disposition of the
court, as well as the notice to the defendant. the order cannot be impugned on the ground
that the court acted either in excess or with grave abuse of discretion. Independently,
therefore, of the authoritative ruling in the aforesaid Arce v. Genato decision. there would be
no justification for sustaining the claim of Petitioners. Certiorari, as noted at the outset, does
not lie.

1. There is insistence on the part of petitioners that there be a prior hearing on the question
of necessity before immediate possession can be granted the Republic of the Philippines.
That is an untenable stand. There is no such requirement in Presidential Decree No. 42. As
noted in the assailed order, the defenses raised by petitioner in their opposition to the
motion for immediate possession could be considered in the trial on the merits. The Decree
is plain and explicit. All that is required is notice to the owner of the property sought to be
condemned. Petitioners were duly notified they were so informed upon the filing of the
complaint by the Republic of the Philippines on October 25, 1976. 16 The received copy of
the manifestation and motion for immediate possession dated November 10, 1976. 17 As a
matter of fact, in a pleading dated November 17, 1976, they presented an urgent ex-parte
motion to defer resolution on writ of possession. 18 The order of respondent Judge of
November 24, 1976 was agreeable to such manifestation and motion deferring a ruling on
the plea for immediate possession until it could be shown that the requirements of both
Presidential Decrees Nos. 42 and 76 have been complied with. 19 There was a motion for
reconsideration dated November 26, 1976 by the Republic of the Philippines. 20 Petitioners
again filed their own opposition to such motion on December 2, 1976. 21Again, respondent
 CONSTI LAW138

Judge held in abeyance the ruling on reconsideration until after an ocular inspection as order
of December 3, 1976. 22 Even after such an ocular inspection, there was another order from
respondent Judge of December 8, 1976 holding in abeyance the action on the motion for
reconsideration by the damages on the property have been submitted by the Republic of the
Philippines. 23 Then came -such data in a manifestation and motion filed by the Republic of
the Philippines on December 15, 1976 wherein it asked that an order be issued authorizing it
to take possession of the property sought to be condemned. 24 On December 27, 1976, an
opposition was filed by petitioners. 25 It was not until January 26, 1977, long after the plea
for possession, that the assailed order was issued. Any assertion, therefore, that the
requirements of Presidential Decree No. 42 were not complied with before the order for
possession was issued would be absolutely bereft of any support either in fact or in law.

2. Nonetheless, petitioners, in pleading after pleading both in the lower court and with this
Tribunal, reiterate their stand that there should be a prior hearing before an order for
immediate possession could be issued. Ostensibly, support is derived from two judicial
decisions, Urban Estates, Inc. v. Montesa 26 and Republic of the Philippines v. La Order de PP.
Benedictinos de Filipinas. 27 Neither case is applicable. The opening paragraph of the Urban
Estates decision reads as follows: "This case, brought here on appeal from an order of Judge
Agustin P. Montesa denying defendant's motion to dismiss, concerns the authority of the City
of Manila to expropriate a tract of land situated within the city limits and having an area of
49,553.10 square meters, more or less." 28 Moreover, as stressed in the opinion of
the ponente, Justice Tuazon, the question deals with the power of the government to
condemn "urban private lands for subdivision or resale to private persons ..." 29 Since such
an issue had previously been passed upon in the leading case of Guido v. Rural Progress
Administration, 30 De Borja v. Commonwealth of the Philippines, 31 and Arellano Law Colleges
v. City of Manila, 32 he stressed that "the question is no longer open, at least as far as inferior
courts are concerned." 33 Nor could petitioners derive comfort from the Republic v. La Orden
de PP. Benedictinos decision. For as expressly set forth in the opinion of Justice Dizon, there
was an order "authorizing appellant [Republic of the Philippines] to take immediate
possession [of the property in question] upon depositing said amount." 34

3. What cannot be sufficiently stressed is that there being a compliance with Presidential
Decrees which now constitute part of the law of the land and there being no claim that such
decrees are violative of any constitutional provision, it follows that respondent Judge is not
susceptible to the accusation of acting either in excess or with grave abuse of discretion
when all that she did was to comply. Moreover, as noted at the outset, the assailed order is
in conformity with the aforesaid Arce v. Genato decision, the facts of which are controlling.
As a matter of law, the position taken by respondent Judge is even less vulnerable as the
plaintiff in this case is the Republic of the Philippines, seeking to expropriate property not
only of petitioners but of others to construct a much needed national highway. All that
respondent Judge did was to implement the applicable decrees and thus assure that no
judicial obstacle be placed to the governmental efforts aimed at completing infrastructure
projects to assure economic growth and development.

WHEREFORE, the petition for certiorari is dismiss Costs against petitioners.

HAGUISAN VS EMILIA
G.R. No. L-40108 August 31, 1984

CUEVAS, J.:
In this appeal special civil action of certiorari and PROHIBITION, petitioner Cesar B. Haguisan
seeks to annul the Orders dated January 16 and 27, 1975, issued by the Honorable
 CONSTI LAW139

respondent Judge in Civil Case No. 837 of the then Court of First Instance of Negros
Occidental together with all the proceedings held in the aforesaid case. Petitioner likewise
prays that the aforenamed respondent Judge be ordered to desist from further proceeding
with the aforementioned case.
Petitioner is the registered owner of a parcel of coconut land situated in the Municipality of
Cauayan, Province of Negros Occidental, known as Lot No. 5972, (portion of Lot No. 3384 of
Cauayan Cadastre), covered by Transfer Certificate of Title No. T-70001 in his name, and
more particularly described as follows -
Beginning at a point marked "1" on plan F-14-3414-D, being S. 3434 "W"., 1385.97 m. from
BLIM NO. 99, Cauayan cadastre, thence S. 40-00 E., 200.00 m. to point "2" N. 68-19 "W".,
125.29 m. to point "3". S. 5-30 "W"., 200.00 m. to point "4"; S. 8659 "W"., 389.54 m. to point
"5"; N. 20-42 E., 179.18 m. to point "6"; N. 6824 E., 160-12 m. to point "7"; N. 64-27 E.,
195.34 m. to point 1, point of beginning, containing an area of EIGHTY FIVE THOUSAND TWO
HUNDRED AND SIXTY EIGHT (85,268) SQUARE METERS. All points referred to are indicated
on the plan and are marked on the ground as follows: points 2 & 3 by X on Trees and the rest
by Old P.L.S./B.L. Cvl. Conc. Mons. Bounded on the NE., E., & S., along lines 1-2-3-4-5 by Lot
3384, Cauayan Cadastre; on the "W"., along line 5-6 by Lot 3174, Cauayan Cadastre; and on
the N., along lines 6-7 by Lot 3171, Cauayan Cadastre; and along fine 7-1 by Lot 3172,
Cauayan Cadastre.
Private respondent, on the other hand, is a mining corporation operating a copper
concentrate mill in the Municipality of Sipalay, Negros Occidental. It is also engaged in
intensified discovery, exploration and development of various mining claims all of which are
situated in the same and adjacent localities.
In line with the government's program of intensive production of mineral areas as a major
support to the national economy, private respondent is constructing an adequate pier in
Barrio Bulata, Municipality of Cauayan, Province of Negros Occidental in order to cope with
the increased volume of copper produced for shipment abroad. Within the area or site of its
pier construction is the aforedescribed lot of the petitioner. Private respondent then
negotiated to acquire the said parcel either through sale or some other acceptable
arrangement, but to no avail. Left with no other recourse, private respondent, on January 8,
1975, instituted expropriation proceedings in the Court of First Instance of Negros
Occidental, which case was docketed therein as Civil Case No. 837 and assigned to the sala
presided over by the Honorable respondent Judge.
In its complaint, private respondent, among others alleged that -
8. Defendant Haguisan's real property being expropriated is situated within the area where
plaintiff is constructing the pier and it needs it as a site to construct the pier facilities such
as warehouses, depots and storages;
9. Plaintiff negotiated to acquire from defendant Haguisan the property being expropriated
but they failed to agree on the price of the property, more particularly because defendant
Haguisan charged plaintiff unreasonable prices beyond what they have declared in their
sworn statement under Presidential Decree No. 76;chanrobles virtual law library
10. Plaintiff, as a mining corporation is imbued with power of eminent domain to acquire
properties for mining purposes sanctioned by Presidential Decree No. 463, otherwise known
as the Mineral Resources Decree of 1974;
11. Plaintiff hereby tenders to deposit with Philippine National Bank, the sum of P17,500.00,
equivalent to the assessed value of the real property being expropriated so that plaintiff may
immediately be placed in possession, pursuant to Presidential Decree No. 42. The said
assessed value is stated in the Declaration of Real Property No. 3184, xerox copy of which is
hereto attached as Annex "A" and made integral part of this complaint.
Plaintiff then prayed for judgment as follows -
l. Provisionally adjudging the value of said real property in an amount equal to the assessed
value of the property being expropriated;
2. After said provisional sum is deposited by the plaintiff with the Philippine National Bank
(Presidential Decree No. 42) or any of its branches in Negros Occidental, awarding forthwith
the possession of the property being expropriated to the plaintiff, and
 CONSTI LAW140

3. That, after due notice and hearing, an order of condemnation be entered, declaring that
the plaintiff has a lawful right to take and acquire the property herein sought to be
condemned, for the public use hereinabove specified upon payment of just compensation to
be determined as of the date of the filing of this complaint.
On January 16, 1975, respondent Judge issued the first assailed Order, fixing the provisional
value of the property sought to be expropriated at P17,500.00, the same being its assessed
value and requiring the defendants to deposit the said amount with the Philippine National
Bank or any of its branches in Negros Occidental and after making the deposit, ordering the
provincial sheriff of Negros Occidental or any of his deputies, to place immediately the
plaintiff in the possession of the property.
On January 23, 1975, private respondent (then plaintiff) deposited with the Philippine
National Bank (Bacolod Branch) the amount of P17,500.00 pursuant to the aforesaid Order.
On January 27, 1975, respondent Judge issued the second challenged Order, directing the
Provincial Sheriff or any of his deputies to immediately place private respondent in actual
possession of the property sought to be expropriated.
On January 28, 1975, petitioner (then defendant) filed his Motion to Dismiss with
Counterclaim
On February 10, 1975, petitioner instituted the instant petition for certiorari and Prohibition
seeking to annul and set aside the aforesaid Orders dated January 16, 1975 and January 27,
1975.chanroblesvirtualawlibrarychanrobles virtual law library
The instant petition being one for certiorari and prohibition, the only and sole issue which
this court is called upon to decide is whether the respondent Judge, in issuing the two (2)
Orders (dated January 16 and 27, 1975) in question acted without or in excess of jurisdiction,
or with grave abuse of discretion amounting to lack of jurisdiction. 1chanrobles virtual law
library
The Mining Act (Commonwealth Act 137) as amended by Republic Act 4388 as well as
Presidential Decree No. 463 expressly declare that "mining warehouses" and "port facilities"
are for "public purpose, use or benefit" and Secs. 58 and 59 of said Presidential Decree No.
463 grants mining firms the right of easement and power of eminent domain.
SEC. 58. Easement Rights. - When mining claims are so situated that for purposes of more
convenient exploration, development, exploitation, utilization and operation thereof by the
claim owner or lessee, it is necessary to build, construct or install on mining claims or lands
owned, occupied or leased by other persons, roads, railroads, mills, waste
dumpsites, warehouses and port facilities, tramways, electric transmission, telephone or
telegraph lines, serial transportation thereto or therefrom, dams and their normal flood
areas, ditches, canals, pipelines, flumes, cuts, shafts or tunnels to drain or convey water, ore
waste, or tailings therefrom, shafts or tunnels for mining purposes, which are hereby
declared to be for public purposes, use or benefit, the claim owner or lessee upon payment
of just compensation shall be entitled to the right to enter and occupy the said mining
claims or land (Emphasis supplied)
SEC. 59. Eminent Domain - When the claim owner or an occupant or owner of private
lands refuses to grant to another claim owner or lessee the right to build, construct or
install any of the facilities mentioned in the next preceding section, the claim owner or
lessee may prosecute an action for eminent domain under the Rules of Court in the Court of
First Instance of province where the mining claims involved are situated. In
the determinationof the just compensation due the claim owner or occupant of the land, the
court shall appoint at least one duly qualified mining engineer or geologist to be
recommended by the Director as one of the Commissioners. (Emphasis supplied)
The main thrust of petitioner's attack against the Orders sought to be annulled and set aside
is that said orders were issued without hearing and before the expiration of his time to
plead. Thus, petitioner argues -
The dispatch attendant to the fixing of the amount of the deposit and allowing immediately
the private respondent to take possession of the property in question without petitioner
being heard on the matter and before the reglementary period for petitioner to file his
 CONSTI LAW141

responsive pleading had expired makes the Orders corrosive intrusion on substantial justice
gravely prejudicial to the interest of petitioners warranting their avoidance.
Petitioner's aforesaid submission fails to convince us.
Private respondent's complaint for expropriation was filed in the court below on January 8,
1975. It is therefore governed by P.D. NO. 42 which was issued on November 9, 1972, the
pertinent portion of which provides -
Upon the filing in the proper court of the complaint in eminent domain proceedings or
anytime thereafter, and after notice to the defendant, plaintiff shall have the right to take or
enter upon the possession of the real property involved if he deposits with the Philippine
National Bank in its main office or any of its branches or agencies an amount equivalent to
the assessed value of the propertyfor purposes of taxation to be held by said bank, subject
to the final orders and final disposition of the court. (Emphasis supplied)
This decree repealed Sec. 2, Rule 67 of the Rules of Court which imposed upon the court
"having jurisdiction of the proceeding the duty of ascertaining and fixing the provisional
value of the property" thus necessitating a hearing. Precisely, said procedure has been done
away with by P.D. NO. 42, as clearly stated in one of its WHEREASES- because it "is not
expeditious enough to enable the plaintiff to take possession of the property involved as
soon as possible, when needed for public purposes. 2chanrobles virtual law library
This Court, speaking thru the Honorable Justice Fernando, now Chief Justice, in the cases
of Arce vs. Genato 3 and San Diego vs. Valdellon4held that under Presidential Decree No. 42,
which is decreed to be "a part of the law of the land," no prior hearing is necessary.
There is insistence on the part of petitioners that there be a prior hearing on the question of
necessity before immediate possession can be granted. That is an untenable stand. There is
no such requirement in Presidential Decree No. 42. The decree is plain and explicit. All that is
required is notice to the owner of the property sought to be condemned. Petitioners were
duly notified. They were so informed upon the filing of the complaint on October 25, 1976.
In the case at bar, it is not denied that petitioner was notified of the complaint filed against
him because he admits having been served with the summons on January 13, 1975. 5The
amount which respondent Judge fixed as the provisional value of the property and which the
respondent deposited with the Philippine National Bank pursuant to Presidential Decree No.
42 was equivalent to the assessed value of the property for purposes of taxation as stated in
the Declaration of Real Property No. 3189, submitted by petitioner. 6chanrobles virtual law
library
Even with the issuance of the latest decree on expropriation proceedings 7prior hearing is
not a requirement before the plaintiff can take immediate possession of the property sought
to be expropriated as can be gleaned from the following portion of the said decree:
SEC. 2. Upon the filing of the petition for expropriation and the deposit in the Philippine
National Bank at its main office or any of its branches of an amount equivalent to ten
percent (10%) of the amount of compensation provided in Section 1 hereof, the government
or its authorized instrumentality agency or entity shall be entitled to immediate possession,
control and disposition of the real property and the improvements thereon, including the
power of demolition if necessary, notwithstanding the pendency of the issues before the
courts.
The assailed Orders being unquestionably free from any legal infirmity, the extraordinary
writ of certiorari and prohibition cannot lie.
The other contentions of petitioner-that there is no genuine necessity to justify expropriation
that the allegation in the complaint do not make out a case of eminent domain and that the
proposed port facilities are not for public purpose, use or benefit are matters that could be
taken up and considered in the trial on the merits before the lower court.
WHEREFORE, the instant petition is DISMISSED with costs against petitioner.
SO ORDERED.

HEIRS OF ARDONA VS REYES

 CONSTI LAW142

HEIRS OF JUANCHO ARDONA (represented by Gloria Ardona) ANASTACIO C.

CABILAO, HEIRS OF CIPRIANO CABILAO (represented by Jose Cabilao) MODESTA
CABILAO, HEIRS OF ROMAN CABUENAS (represented by Alberto Cabuenas),
AGRIPINO GABISAY and PRUDENCIA MABINI, ANTONIO LABRADOR and LUCIA
GABISAY, GERONIMO MABINI and MARCELINA SABAL, INOCENCIO MABINI and
ARSENIA REYES, PATRICIO MABINI and GREGORIA BORRES, ANICETO GADAPAN and
MAXIMA GABISAY, BARTOLOME MAGNO and CALINECA E. MAGNO, ALBERTO
CABUENAS, NARCISO CABUENAS and VICTORIA CABUENAS, EUTIQUIOSENO, HEIRS
OF ESPERIDION CABUENAS (represented by Alberto Cabuenas), MAXIMINA
NAVARO, SULPICIO NAVARO, EDUARDO NAVARO, MARTINIANO ROMA (in
representation of Arcadio Mabini, deceased), MARTIN SENO, FAUSTO ARDA,
MAXIMA CABILAO, ESTRELLA SENO, EDUVEGIS S. CABILAO, ROSARIO CABILAO,
MINORS DANILO, SOCORRO, JOSEFINA and MARITES, all surnamed Cabilao, JUAN
BORRES (represented by Francisca Borres), RAMON JABADAN, JESUS ALIPAR and
LEONILA KABAHAR, ANTONIO LABRADOR, HEIRS OF NICASIO GABISAY
(represented by Arsenio Gabisay), PACIFICO LABRADOR, DEMETRIO LABRADOR
and FRUCTOSA TABURA, VENANCIO DEL MAR, MARINO DEL MAR, HEIRS OF
TEODORA ARCILLO (represented by Brigida Arcillo) DIONISIA GABUNADA, HEIRS
OF BUENAVENTURA FRANCISCO (represented by Felicidad Sadaya Francisco),
HEIRS OF VICTORIA C. CABUENAS (represented by Alberto Cabuenas) HEIRS OF
CIPRIANO GABUNADA (represented by Claudio Gabunada), petitioners,
vs.
HON. JUAN Y. REYES, Executive Judge and Presiding Judge of Branch I, COURT OF
FIRST instance OF CEBU, and the PHILIPPINE TOURISM AUTHORITY, respondents.

George M. Baladjay, Mario G. dela Victoria, Olegario Sarmiento, Jr., and Democrito Barcenas
for petitioners.

The Solicitor General for respondent Judge.

F.A. Sugue & Elino B. Lingas for Philippine Tourism Authoirity

GUTIERREZ, JR., J.:

This is a petition for certiorari with preliminary injunction challenging the constitutionality of
Presidential Decree No. 564, the Revised Charter of the Philippine Tourism Authority, and
Proclamation No. 2052 declaring the barangays of Sibugay, Malubog, Babag and Sirao
including the proposed Lusaran Dam in the City of Cebu and in the municipalities of Argao
and Dalaguete in the province of Cebu as tourist zones. The petitioners ask that we restrain
respondent Court of First Instance of Cebu and the Philippine Tourism Authority (PTA) from
enforcing and implementing the writs of possession issued in four (4) expropriation cases
filed by PTA against the petitioners: Civil Cases Nos. R-19562, R-19684, R-20701, and R-
21608 of the Court of First Instance of Cebu (Branch 1).

The Philippine Tourism Authority filed four (4) Complaints with the Court of First Instance of
Cebu City for the expropriation of some 282 hectares of rolling land situated in barangays
Malubog and Babag, Cebu City, under PTA's express authority "to acquire by purchase, by
negotiation or by condemnation proceedings any private land within and without the tourist
zones" for the purposes indicated in Section 5, paragraph B(2), of its Revised Charter (PD
564), more specifically, for the development into integrated resort complexes of selected
 CONSTI LAW143

and well-defined geographic areas with potential tourism value. As uniformly alleged in the
complaints, the purposes of the expropriation are:

xxx xxx xxx

Plaintiff, in line with the policy of the government to promote tourism and
development of tourism projects will construct in Barangays Malubog, Busay
and Babag, all of Cebu City, a sports complex (basketball courts, tennis courts,
volleyball courts, track and field, baseball and softball diamonds, and
swimming pools), clubhouse, gold course, children's playground and a nature
area for picnics and horseback riding for the use of the public.

The development plan, covering approximately 1,000 hectares, includes the

establishment of an electric power grid in the area by the National Power
Corporation, thus assuring the supply of electricity therein for the benefit of
the whole community. Deep wells will also be constructed to generate water
supply within the area. Likewise, a complex sewerage and drainage system
will be devised and constructed to protect the tourists and nearby residents
from the dangers of pollution.

Complimentary and support facilities for the project will be constructed,

including public rest houses, lockers, dressing rooms, coffee shops, shopping
malls, etc. Said facilities will create and offer employment opportunities to
residents of the community and further generate income for the whole of
Cebu City.

Plaintiff needs the property above described which is directly covered by the
proposed golf court.

xxx xxx xxx

The defendants in Civil Cases Nos. R-20701 and R-21608 filed their respective Opposition
with Motion to Dismiss and/or Reconsideration. The defendants in Civil Case No. R-19562
filed a manifestation adopting the answer of defendants in Civil Case No. R-19864. The
defendants, now petitioners, had a common allegation in that the taking is allegedly not
impressed with public use under the Constitution.

In their motions to dismiss, the petitioners alleged, in addition to the issue of public use, that
there is no specific constitutional provision authorizing the taking of private property for
tourism purposes; that assuming that PTA has such power, the intended use cannot be
paramount to the determination of the land as a land reform area; that limiting the amount
of compensation by Legislative fiat is constitutionally repugnant; and that since the land is
under the land reform program, it is the Court of Agrarian Relations and not the Court of First
Instance that has jurisdiction over the expropriation cases.

The Philippine Tourism Authority having deposited with The Philippine National Bank, Cebu
City Branch, an amount equivalent to 10% of the value of the properties pursuant to
Presidential Decree No. 1533. the lower court issued separate orders authorizing PTA to take
immediate possession of the premises and directing the issuance of writs of possession.
 CONSTI LAW144

On May 25, 1982, petitioners filed this petition questioning the orders of the respondent
Judge, The respondents have correctly restated the grounds in the petition as follows:

xxx xxx xxx

A. The complaints for expropriation lack basis because the Constitution does
not provide for the expropriation of private property for tourism or other
related purposes;

B. The writs of possession or orders authorizing PTA to take immediate

possession is premature because the "public use" character of the taking has
not been previously demonstrated;

C. The taking is not for public use in contemplation of eminent domain law;

D. The properties in question have been previously declared a land reform

area; consequently, the implementation of the social justice pro- ,vision of the
Constitution on agrarian reform is paramount to the right of the State to
expropriate for the purposes intended;

E. Proclamation No. 2052 declaring certain barangays in Cebu City, which

include the lands subject of expropriation as within a tourist zone, is
unconstitutional for it impairs the obligation of contracts; "F. Since the
properties are within a land reform area, it is the Court of Agrarian Relations,
not the lower court, that has jurisdiction pursuant to Pres. Decree No. 946;

F. The forcible ejectment of defendants from the premises constitutes a

criminal act under Pres. Decree No. 583;

In their memorandum, the petitioners have summarized the issues as follows:

I. Enforcement of the Writ of Possession is Premature:

II. Presidential Decree 564 Amending Presidential Decree l89 is

Constitutionally Repugnant:

III. The Condemnation is not for Public Use, Therefore, Unconstitutional:

IV. The Expropriation for Tourism Purposes of Lands Covered by the Land
Reform Program Violates the Constitution:

V. Presidential Proclamation 2052 is Unconstitutional:

VI. Presidential Decree No 1533 is Unconstitutional:

VII. The Court of First Instance has no Jurisdiction:

VIII. The Filing of the Present Petition is not Premature.

The issues raised by the petitioners revolve around the proposition that the actions to
expropriate their properties are constitutionally infirm because nowhere in the Constitution
 CONSTI LAW145

can a provision be found which allows the taking of private property for the promotion of
tourism.

The petitioners' arguments in their pleadings in support of the above proposition are
subsumed under the following headings:

1. Non-compliance with the "public use" requirement under the eminent

domain provision of the Bill of Rights.

2. Disregard of the land reform nature of the property being expropriated.

3. Impairment of the obligation of contracts.

There are three provisions of the Constitution which directly provide for the exercise of the
power of eminent domain. Section 2, Article IV states that private property shall not be taken
for public use without just compensation. Section 6, Article XIV allows the State, in the
interest of national welfare or defense and upon payment of just compensation to transfer to
public ownership, utilities and other private enterprises to be operated by the government.
Section 13, Article XIV states that the Batasang Pambansa may authorize upon payment of
just compensation the expropriation of private lands to be subdivided into small lots and
conveyed at cost to deserving citizens.

While not directly mentioning the expropriation of private properties upon payment of just
compensation, the provisions on social justice and agrarian reforms which allow the exercise
of police power together with the power of eminent domain in the implementation of
constitutional objectives are even more far-reaching insofar as taking of private property is
concerned.

Section 6, Article II provides:

Sec. 6. The State shall promote social justice to ensure the dignity, welfare,
and security of all the people. Towards its end, the State shall regulate the
acquisition, ownership, use, enjoyment, and disposition of private property,
and equitably diffuse property ownership and profits.

xxx xxx xxx

Section 12, Article XIV provides:

See. 12. The State shall formulate and implement an agrarian reform program
aimed at emancipating the tenant from the bondage of the soil and achieving
the goals enunciated in this Constitution.

The equitable diffusion of property ownership in the promotion of social justice implies the
exercise, whenever necessary, of the power to expropriate private property. Likewise there
can be no meaningful agrarian reform program unless the power to expropriate is utilized.

We cite all the above provisions on the power to expropriate because of the petitioners'
insistence on a restrictive view of the eminent domain provision. The thrust of all
constitutional provisions on expropriation is in the opposite direction.
 CONSTI LAW146

As early as 1919, this Court in Visayan Refining Co. v. Samus (40 Phil. 550) categorized the
restrictive view as wholly erroneous and based on a misconception of fundamentals.

The petitioners look for the word "tourism" in the Constitution. Understandably the search
would be in vain. The policy objectives of the framers can be expressed only in general
terms such as social justice, local autonomy, conservation and development of the national
patrimony, public interest, and general welfare, among others. The programs to achieve
these objectives vary from time to time and according to place, To freeze specific programs
like Tourism into express constitutional provisions would make the Constitution more prolix
than a bulky code and require of the framers a prescience beyond Delphic proportions. The
particular mention in the Constitution of agrarian reform and the transfer of utilities and
other private enterprises to public ownership merely underscores the magnitude of the
problems sought to be remedied by these programs. They do not preclude nor limit the
exercise of the power of eminent domain for such purposes like tourism and other
development programs.

In the leading case of Visayan Refining Co. v. Camus (supra), this Court emphasized that the
power of eminent domain is inseparable from sovereignty being essential to the existence of
the State and inherent in government even in its most primitive forms. The only purpose of
the provision in the Bill of Rights is to provide some form of restraint on the sovereign power.
It is not a grant of authority -

The power of eminent domain does not depend for its existence on a specific
grant in the constitution. It is inherent in sovereignty and exists in a sovereign
state without any recognition of it in the constitution. The provision found in
most of the state constitutions relating to the taking of property for the public
use do not by implication grant the power to the government of the state, but
limit a power which would otherwise be without limit.

The constitutional restraints are public use and just compensation.

Do the purposes of the taking in this case constitute "public use"?

The petitioners ask us to adopt a strict construction and declare that "public use" means
literally use by the public and that "public use" is not synonymous with "public interest",
"public benefit", or "public welfare" and much less "public convenience. "

The petitioners face two major obstacles. First, their contention which is rather sweeping in
its call for a retreat from the public welfare orientation is unduly restrictive and outmoded.
Second, no less than the lawmaker has made a policy determination that the power of
eminent domain may be exercised in the promotion and development of Philippine tourism.

The restrictive view of public use may be appropriate for a nation which circumscribes the
scope of government activities and public concerns and which possesses big and correctly
located public lands that obviate the need to take private property for public purposes.
Neither circumstance applies to the Philippines. We have never been a laissez faire State,
And the necessities which impel the exertion of sovereign power are all too often found in
areas of scarce public land or limited government resources.

Certain aspects of parliamentary government were introduced by the 1973 amendments to

the Constitution with further modifications in the 1976 and 1981 amendments. Insofar as
the executive and legislative departments are concerned, the traditional concept of checks
and balances in a presidential form was considerably modified to remove some roadblocks in
 CONSTI LAW147

the expeditious implementation of national policies. There was no such change for the
judiciary. We remain as a checking and balancing department even as all strive to maintain
respect for constitutional boundaries. At the same time, the philosophy of coordination in the
pursuit of developmental goals implicit in the amendments also constrains in the judiciary to
defer to legislative discretion iii the judicial review of programs for economic development
and social progress unless a clear case of constitutional infirmity is established. We cannot
stop the legitimate exercise of power on an invocation of grounds better left interred in a
bygone age and time.* As we review the efforts of the political departments to bring about
self-sufficiency, if not eventual abundance, we continue to maintain the liberal approach
because the primary responsibility and the discretion belong to them.

There can be no doubt that expropriation for such traditions' purposes as the construction of
roads, bridges, ports, waterworks, schools, electric and telecommunications systems,
hydroelectric power plants, markets and slaughterhouses, parks, hospitals, government
office buildings, and flood control or irrigation systems is valid. However, the concept of
public use is not limited to traditional purposes. Here as elsewhere the Idea that "public use"
is strictly limited to clear cases of "use by the public" has been discarded.

In the United States, the rule was enunciated in Berman v. Parker (348 U.S. 25; 99 L. ed. 27)
as follows:

We do not sit to determine whether a particular housing project is or is not

desirable. The concept of the public welfare is broad and inclusive. See
DayBrite Lighting, Inc. v. Missouri, 342 US 421, 424, 96 L ed 469, 472, 72 S Ct
405. The values it represents are spiritual as well as physical, aesthetic as well
as monetary. It is within the power of the legislature to determine that the
community should be beautiful as well as healthy, spacious as well as clean,
well-balanced as well as carefully patrolled. In the present case, the Congress
and its authorized agencies have made determinations that take into account
a wide variety of values. It is not for us to reappraise them. If those who
govern the District of Columbia decide that the Nation's Capital should be
beautiful as well as sanitary, there is nothing in the Fifth Amendment that
stands in the way.

Once the object is within the authority of Congress, the right to realize it
through the exercise of eminent domain is clear. For the power of eminent
domain is merely the means to the end. See Luxton v. North River Bridge Co.
153 US 525, 529, 530, 38 L ed 808, 810, 14 S Ct 891; United States v.
Gettysburg Electric R. Co. 160 US 668, 679, 40 L ed 576, 580, 16 S Ct 427.

In an earlier American case, where a village was isolated from the rest of North Carolina
because of the flooding of the reservoir of a dam thus making the provision of police, school,
and health services unjustifiably expensive, the government decided to expropriate the
private properties in the village and the entire area was made part of an adjoining national
park. The district court and the appellate court ruled against the expropriation or excess
condemnation. The Court of Appeals applied the "use by the public" test and stated that the
only land needed for public use was the area directly flooded by the reservoir. The village
may have been cut off by the dam but to also condemn it was excess condemnation not
valid under the "Public use" requirement. The U.S. Supreme Court in United States ex rel
TVA v. Welch (327 U.S, 546; 90 L. ed 843) unanimously reversed the lower courts. It stated:

The Circuit Court of Appeals, without expressly relying on a compelling rule of

construction that would give the restrictive scope to the T.V.A. Act given it by
the district court, also interpreted the statute narrowly. It first analyzed the
 CONSTI LAW148

facts by segregating the total problem into distinct parts, and thus came to
the conclusion that T.V.A.'s purpose in condemning the land in question was
only one to reduce its liability arising from the destruction of the highway. The
Court held that use of the lands for that purpose is a "private" and not a
"public use" or, at best, a "public use" not authorized by the statute. we are
unable to agree with the reasoning and conclusion of the Circuit Court of
Appeals.

We think that it is the function of Congress to decide what type of taking is for
a public use and that the agency authorized to do the taking may do so to the
still extent of its statutory authority, United States v. Gettysburg Electric R. Co.
160 US 668, 679, 40 L ed 576, 580, 16 S Ct 427. ...

xxx xxx xxx

... But whatever may be the scope of the judicial power to determine what is a
"public use" in Fourteenth Amendment controversies, this Court has said that
when Congress has spoken on this subject "Its decision is entitled to
deference until it is shown to involve an impossibility." Old Dominion Land Co.
v. United States, 269, US 55, 66, 70 L ed 162, 46 S Ct 39. Any departure from
this judicial restraint would result in courts deciding on what is and is not a
governmental function and in their invalidating legislation on the basis of their
view on that question at the moment of decision, a practice which has proved
impracticable in other fields. See Case v. Bowles decided February 4, 1946,
437 US 92, 101, ante, 552, 559, 66 S Ct 438. New York v. United States, 326
US 572 ante 326, 66 S Ct 310). We hold that the T.V.A. took the tracts here
involved for a public purpose, if, as we think is the case, Congress authorized
the Authority to acquire, hold, and use the lands to carry out the purposes of
the T.V.A. Act.

In the Philippines, Chief Justice Enrique M. Fernando has aptly summarized the statutory and
judicial trend as follows:

The taking to be valid must be for public use. There was a time when it was
felt that a literal meaning should be attached to such a requirement.
Whatever project is undertaken must be for the public to enjoy, as in the case
of streets or parks. Otherwise, expropriation is not allowable. It is not any
more. As long as the purpose of the taking is public, then the power of
eminent domain comes into play. As just noted, the constitution in at least two
cases, to remove any doubt, determines what is public use. One is the
expropriation of lands to be subdivided into small lots for resale at cost to
individuals. The other is in the transfer, through the exercise of this power, of
utilities and other private enterprise to the government. It is accurate to state
then that at present whatever may be beneficially employed for the general
welfare satisfies the requirement of public use. (Fernando, The Constitution of
the Philippines, 2nd ed., pp. 523-524)

The petitioners' contention that the promotion of tourism is not "public use" because private
concessioners would be allowed to maintain various facilities such as restaurants, hotels,
stores, etc. inside the tourist complex is impressed with even less merit. Private bus firms,
taxicab fleets, roadside restaurants, and other private businesses using public streets end
highways do not diminish in the least bit the public character of expropriations for roads and
streets. The lease of store spaces in underpasses of streets built on expropriated land does
not make the taking for a private purpose. Airports and piers catering exclusively to private
 CONSTI LAW149

airlines and shipping companies are still for public use. The expropriation of private land for
slum clearance and urban development is for a public purpose even if the developed area is
later sold to private homeowners, commercial firms, entertainment and service companies,
and other private concerns.

The petitioners have also failed to overcome the deference that is appropriately accorded to
formulations of national policy expressed in legislation. The rule in Berman u. Parker (supra)
of deference to legislative policy even if such policy might mean taking from one private
person and conferring on another private person applies as well as in the Philippines.

... Once the object is within the authority of Congress, the means by which it
will be attained is also for Congress to determine. Here one of the means
chosen is the use of private enterprise for redevelopment of the area.
Appellants argue that this makes the project a taking from one businessman
for the benefit of another businessman. But the means of executing the
project are for Congress and Congress alone to determine, once the public
purpose has been established. Selb Luxton v. North River Bridge Co. (US)
supra; cf. Highland v. Russel Car & Snow Plow Co. 279 US 253, 73 L ed 688, 49
S Ct 314. The public end may be as well or better served through an agency of
private enterprise than through a department of government-or so the
Congress might conclude. We cannot say that public ownership is the sole
method of promoting the public purposes of community redevelopment
projects. What we have said also disposes of any contention concerning the
fact that certain property owners in the area may be permitted to repurchase
their properties for redevelopment in harmony with the over-all plan. That,
too, is a legitimate means which Congress and its agencies may adopt, if they
choose. (Berman v. Parker, 99 L ed 38, 348 US 33, 34)

An examination of the language in the 1919 cases of City of Manila v. Chinese Community of
Manila (40 Phil, 349) and Visayan Refining Co. vs. Camus, earlier cited, shows that from the
very start of constitutional government in our country judicial deference to legislative policy
has been clear and manifest in eminent domain proceedings.

The expressions of national policy are found in the revised charter of the Philippine Tourism
Authority, Presidential Decree No. 564:

WHEREAS, it is the avowed aim of the government to promote Philippine

tourism and work for its accelerated and balanced growth as well as for
economy and expediency in the development of the tourism plant of the
country;

xxx xxx xxx

SECTION 1. Declaration of Policy. - It is hereby declared to be the policy of the

State to promote, encourage, and develop Philippine tourism as an instrument
in accelerating the development of the country, of strengthening the country's
foreign exchange reserve position, and of protecting Philippine culture,
history, traditions and natural beauty, internationally as well as domestically.

The power of eminent domain is expressly provided for under Section 5 B(2) as follows:

xxx xxx xxx

 CONSTI LAW150

2. Acquisition of Private Lands, Power of Eminent Domain. — To acquire by

purchase, by negotiation or by condemnation proceedings any private land
within and without the tourist zones for any of the following reasons: (a)
consolidation of lands for tourist zone development purposes, (b) prevention
of land speculation in areas declared as tourist zones, (c) acquisition of right
of way to the zones, (d) protection of water shed areas and natural assets with
tourism value, and (e) for any other purpose expressly authorized under this
Decree and accordingly, to exercise the power of eminent domain under its
own name, which shall proceed in the manner prescribed by law and/or the
Rules of Court on condemnation proceedings. The Authority may use any
mode of payment which it may deem expedient and acceptable to the land
owners: Provided, That in case bonds are used as payment, the conditions and
restrictions set forth in Chapter III, Section 8 to 13 inclusively, of this Decree
shall apply.

xxx xxx xxx

The petitioners rely on the Land Reform Program of the government in raising their second
argument. According to them, assuming that PTA has the right to expropriate, the properties
subject of expropriation may not be taken for the purposes intended since they are within
the coverage of "operation land transfer" under the land reform program. Petitioners claim
that certificates of land transfer (CLT'S) and emancipation patents have already been issued
to them thereby making the lands expropriated within the coverage of the land reform area
under Presidential Decree No. 2; that the agrarian reform program occupies a higher level in
the order of priorities than other State policies like those relating to the health and physical
well- being of the people; and that property already taken for public use may not be taken
for another public use.

We have considered the above arguments with scrupulous and thorough circumspection. For
indeed any claim of rights under the social justice and land reform provisions of the
Constitution deserves the most serious consideration. The Petitioners, however, have failed
to show that the area being developed is indeed a land reform area and that the affected
persons have emancipation patents and certificates of land transfer.

The records show that the area being developed into a tourism complex consists of more
than 808 hectares, almost all of which is not affected by the land reform program. The
portion being expropriated is 282 hectares of hilly and unproductive land where even
subsistence farming of crops other than rice and corn can hardly survive. And of the 282
disputed hectares, only 8,970 square meters-less than one hectare-is affected by Operation
Land Transfer. Of the 40 defendants, only two have emancipation patents for the less than
one hectare of land affected. And this 8,970 square meters parcel of land is not even within
the sports complex proper but forms part of the 32 hectares resettlement area where the
petitioners and others similarly situated would be provided with proper housing, subsidiary
employment, community centers, schools, and essential services like water and electricity-
which are non-existent in the expropriated lands. We see no need under the facts of this
petition to rule on whether one public purpose is superior or inferior to another purpose or
engage in a balancing of competing public interests. The petitioners have also failed to
overcome the showing that the taking of the 8,970 square meters covered by Operation
Land Transfer forms a necessary part of an inseparable transaction involving the
development of the 808 hectares tourism complex. And certainly, the human settlement
needs of the many beneficiaries of the 32 hectares resettlement area should prevail over the
property rights of two of their compatriots.
 CONSTI LAW151

The invocation of the contracts clause has no merit. The non-impairment clause has never
been a barrier to the exercise of police power and likewise eminent domain. As stated
in Manigault v. Springs (199 U.S. 473) "parties by entering into contracts may not stop the
legislature from enacting laws intended for the public good."

The applicable doctrine is expressed in Arce v. Genato (69 SCRA 544) which involved the
expropriation of land for a public plaza. The Court stated:

xxx xxx xxx

... What is claimed is that there must be a showing of necessity for such
condemnation and that it was not done in this case in support of such a view,
reliance is placed on City of Manila v. Arenano Law Colleges. (85 Phil. 663
[1950]) That doctrine itself is based on the earlier case of City of Manila v.
Chinese Community of Manila, (50 Phil. 349) also, like Camus, a 1919
decision. As could be discerned, however, in the Arellano Law Colleges
decision. it was the antiquarian view of Blackstone with its sanctification of
the right to one's estate on which such an observation was based. As did
appear in his Commentaries: "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 thereof." Even the most ,
cursory glance at such well-nigh absolutist concept of property would show its
obsolete character at least for Philippine constitutional law. It cannot survive
the test of the 1935 Constitution with its mandates on social justice and
protection to labor. (Article II, Section 5 of the 1935 Constitution reads: "The
promotion of social justice to unsure the well-being and economic security of
all the people should be the concern of the State." Article XI, Section 6 of the
same Constitution provides: "The State shall afford protection to labor,
especially to working women and minors, and shall regulate the relation
between landowner and tenant, and between labor and capital in industry and
in agriculture. The State may provide for compulsory arbitration.") What is
more, the present Constitution pays even less heed to the claims of property
and rightly so. After stating that the State shall promote social justice, it
continues: "Towards this end, the State shall regulate the acquisition,
ownership, use, enjoyment, and disposition of private property, and equitably
diffuse property ownership and profits." (That is the second sentence of Article
II, Section 6 of the Constitution) If there is any need for explicit confirmation of
what was set forth in Presidential Decree No. 42, the above provision supplies
it. Moreover, that is merely to accord to what of late has been the consistent
course of decisions of this Court whenever property rights are pressed unduly.
(Cf. Alalayan v. National Power Corporation, L-24396, July 29, 1968, 24 SCRA
172; Agricultural Credit and Cooperative Financing Administration v.
Confederation of Unions, L-21484, Nov. 29, 1969, 30 SCRA 649; Edu v. Ericta,
L-32096, Oct. 24, 1970, 35 SCRA 481; Phil. Virginia Tobacco Administration v.
Court of Industrial Relations, L-32052, July 25, 1975, 65 SCRA 416) The
statement therefore, that there could be discerned a constitutional objection
to a lower court applying a Presidential Decree, when it leaves no doubt that a
grantee of the power of eminent domain need not prove the necessity for the
expropriation, carries its own refutation.

xxx xxx xxx

The issue of prematurity is also raised by the petitioners. They claim that since the necessity
for the taking has not been previously established, the issuance of the orders authorizing the
 CONSTI LAW152

PTA to take immediate possession of the premises, as well as the corresponding writs of
possession was premature.

Under Presidential Decree No. 42, as amended by Presidential Decree No. 1533, the
government, its agency or instrumentality, as plaintiff in an expropriation proceedings is
authorized to take immediate possession, control and disposition of the property and the
improvements, with power of demolition, notwithstanding the pendency of the issues before
the court, upon deposit with the Philippine National Bank of an amount equivalent to 10% of
the value of the property expropriated. The issue of immediate possession has been settled
in Arce v. Genato (supra). In answer to the issue:

... whether the order of respondent Judge in an expropriation case allowing the
other respondent, ... to take immediate possession of the parcel of land
sought to be condemned for the beautification of its public plaza, without a
prior hearing to determine the necessity for the exercise of the power of
eminent domain, is vitiated by jurisdictional defect, ...

this Court held that:

... It is not disputed that in issuing such order, respondent Judge relied on
Presidential Decree No. 42 issued on the 9th of November, 1972. (Presidential
Decree No. 42 is entitled "Authorizing the Plaintiff in Eminent Domain
Proceedings to Take Possession of the Property involved Upon Depositing the
Assessed Value for Purposes of Taxation.") The question as thus posed does
not occasion any difficulty as to the answer to be given. This petition for
certiorari must fail, there being no showing that compliance with the
Presidential Decree, which under the Transitory Provisions is deemed a part of
the law of the land, (According to Article XVII, Section 3 par. (2) of the
Constitution: "All proclamations, orders, decrees, instructions and acts
promulgated, issued, or done by the incumbent President shall be part of the
law of the land, and shall remain valid, legal, binding, and effective even after
lifting of martial law or the ratification of this Constitution, unless modified,
revoked, or superseded by subsequent proclamations. orders, decrees
instructions, or other acts of the incumbent President, or unless expressly and
explicitly modified or repealed by the regular National Assembly") would be
characterized as either an act in excess of jurisdiction or a grave abuse of
discretion. So we rule.

Likewise in Ramos v. Philippine Tourism Authority (G.R. Nos. 52449-50, June 9, 1980), this
Court held:

... condemnation or expropriation proceedings is in the nature of one that is

quasi-in-rem wherein the fact that the owner of the property is made a party
is not essentially indispensable insofar was least as it conncerns is the
immediate taking of possession of the property and the preliminary
determination of its value, including the amount to be deposited.

In their last argument, the petitioners claim that a consequence of the expropriation
proceedings would be their forcible ejectment. They contend that such forcible ejectment is
a criminal act under Presidential Decree No. 583. This contention is not valid. Presidential
Decree No. 583 prohibits the taking cognizance or implementation of orders designed to
obstruct the land reform program. It refers to the harassment of tenant- farmers who try to
enforce emancipation rights. It has nothing to do with the expropriation by the State of lands
needed for public purposes. As a matter of fact, the expropriated area does not appear in
 CONSTI LAW153

the master lists of the Ministry of Agrarian Reforms as a teranted area. The petitioners' bare
allegations have not been supported with particulars pointing to specific parcels which are
subject of tenancy contracts. The petitioners may be owner-tillers or may have some form of
possessory or ownership rights but there has been no showing of their being tenants on the
disputed lands.

The petitioners have failed to overcome the burden of anyone trying to strike down a statute
or decree whose avowed purpose is the legislative perception is the public good. A statute
has in its favor the presumption of validity. All reasonable doubts should be resolved in favor
of the constitutionality of a law. The courts will not set aside a law as violative of the
Constitution except in a clear case (People v. Vera, 65 Phil. 56). And in the absence of factual
findings or evidence to rebut the presumption of validity, the presumption prevails (Ermita-
Malate Hotel, etc. v. Mayor of Manila, 20 SCRA 849; Morfe v. Mutuc, 22 SCRA 424).

The public respondents have stressed that the development of the 808 hectares includes
plans that would give the petitioners and other displaced persons productive employment,
higher incomes, decent housing, water and electric facilities, and better living standards.
Our dismissing this petition is, in part, predicated on those assurances. The right of the PTA
to proceed with the expropriation of the 282 hectares already Identified as fit for the
establishment of a resort complex to promote tourism is, therefore, sustained.

WHEREFORE, the instant petition for certiorari is hereby DISMISSE D for lack of merit.

SO ORDERED.

COMMISSIONER VS BURGOS
G.R. No. L-36706 March 31, 1980

DE CASTRO, J.:
Victoria Amigable is the owner of parcel of land situated in Cebu City with an area of 6,167
square meters. Sometime in 1924, the Government took this land for road-right-of-way
purpose. The land had since become streets known as Mango Avenue and Gorordo Avenue in
Cebu City.
On February 6, 1959, Victoria Amigable filed in the Court of First Instance of Cebu a
complaint, which was later amended on April 17, 1959 to recover ownership and possession
of the land, and for damages in the sum of P50,000.00 for the alleged illegal occupation of
the land by the Government, moral damages in the sum of P25,000.00, and attorney's fees
in the sum of P5,000.00, plus costs of suit. The complaint was docketed as Civil Case No. R-
5977 of the Court of First Instance of Cebu, entitled "Victoria Amigable vs. Nicolas Cuenca, in
his capacity as Commissioner of Public Highway and Republic of the Philippines. 1
In its answer, 2 the Republic alleged, among others, that the land was either donated or sold
by its owners to the province of Cebu to enhance its value, and that in any case, the right of
the owner, if any, to recover the value of said property was already barred by estoppel and
the statute of limitations, defendants also invoking the non-suability of the Government.
In a decision rendered on July 29, 1959 by Judge Amador E. Gomez, the plaintiff's complaint
was dismissed on the grounds relied upon by the defendants therein. 3 The plaintiff appealed
the decision to the Supreme Court where it was reversed, and the case was remanded to the
court of origin for the determination of the compensation to be paid the plaintiff-appellant as
owner of the land, including attorney's fees. 4 The Supreme Court decision also directed that
to determine just compensation for the land, the basis should be the price or value thereof
at the time of the taking. 5
 CONSTI LAW154

In the hearing held pursuant to the decision of the Supreme Court, the Government proved
the value of the property at the time of the taking thereof in 1924 with certified copies,
issued by the Bureau of Records Management, of deeds of conveyance executed in 1924 or
thereabouts, of several parcels of land in the Banilad Friar Lands in which the property in
question is located, showing the price to be at P2.37 per square meter. For her part, Victoria
Amigable presented newspaper clippings of the Manila Times showing the value of the peso
to the dollar obtaining about the middle of 1972, which was P6.775 to a dollar.
Upon consideration of the evidence presented by both parties, the court which is now the
public respondent in the instant petition, rendered judgment on January 9, 1973 directing
the Republic of the Philippines to pay Victoria Amigable the sum of P49,459.34 as the value
of the property taken, plus P145,410.44 representing interest at 6% on the principal amount
of P49,459.34 from the year 1924 up to the date of the decision, plus attorney's fees of 10%
of the total amount due to Victoria Amigable, or a grand total of P214,356.75. 6
The aforesaid decision of the respondent court is now the subject of the present petition for
review by certiorari, filed by the Solicitor General as counsel of the petitioner, Republic of
the Philippines, against the landowner, Victoria Amigable, as private respondent. The
petition was given due course after respondents had filed their comment thereto, as
required. The Solicitor General, as counsel of petitioner, was then required to file petitioner's
brief and to serve copies thereof to the adverse parties. 7 Petitioner's brief was duly filed on
January 29, 1974, 8 to which respondents filed only a "comment." 9 instead of a brief, and the
case was then considered submitted for decision. 10
1. The issue of whether or not the provision of Article 1250 of the New Civil Code is
applicable in determining the amount of compensation to be paid to respondent Victoria
Amigable for the property taken is raised because the respondent court applied said Article
by considering the value of the peso to the dollar at the time of hearing, in determining due
compensation to be paid for the property taken. The Solicitor General contends that in so
doing, the respondent court violated the order of this Court, in its decision in G.R. No. L-
26400, February 29, 1972, to make as basis of the determination of just compensation the
price or value of the land at the time of the taking.
It is to be noted that respondent judge did consider the value of the property at the time of
the taking, which as proven by the petitioner was P2.37 per square meter in 1924. However,
applying Article 1250 of the New Civil Code, and considering that the value of the peso to
the dollar during the hearing in 1972 was P6.775 to a dollar, as proven by the evidence of
the private respondent Victoria Amigable the Court fixed the value of the property at the
deflated value of the peso in relation, to the dollar, and came up with the sum of P49,459.34
as the just compensation to be paid by the Government. To this action of the respondent
judge, the Solicitor General has taken exception.
Article 1250 of the New Civil Code seems to be the only provision in our statutes which
provides for payment of an obligation in an amount different from what has been agreed
upon by the parties because of the supervention of extra-ordinary inflation or deflation.
Thus, the Article provides:
ART. 1250. In case extra-ordinary inflation or deflation of the currency
stipulated should supervene, the value of the currency at the time of the
establishment of the obligation shall be the basis of payment, unless there is
an agreement to the contrary.
It is clear that the foregoing provision applies only to cases where a contract or agreement is
involved. It does not apply where the obligation to pay arises from law, independent of
contract. The taking of private property by the Government in the exercise of its power of
eminent domain does not give rise to a contractual obligation. We have expressed this view
in the case of Velasco vs. Manila Electric Co., et al., L-19390, December 29, 1971. 11
Moreover, the law as quoted, clearly provides that the value of the currency at the time of
the establishment of the obligation shall be the basis of payment which, in cases of
expropriation, would be the value of the peso at the time of the taking of the property when
the obligation of the Government to pay arises. 12 It is only when there is an "agreement to
the contrary" that the extraordinary inflation will make the value of the currency at the time
 CONSTI LAW155

of payment, not at the time of the establishment of the obligation, the basis for payment. In
other words, an agreement is needed for the effects of an extraordinary inflation to be taken
into account to alter the value of the currency at the time of the establishment of the
obligation which, as a rule, is always the determinative element, to be varied by agreement
that would find reason only in the supervention of extraordinary inflation or deflation.
We hold, therefore, that under the law, in the absence of any agreement to the contrary,
even assuming that there has been an extraordinary inflation within the meaning of Article
1250 of the New Civil Code, a fact We decline to declare categorically, the value of the peso
at the time of the establishment of the obligation, which in the instant case is when the
property was taken possession of by the Government, must be considered for the purpose of
determining just compensation. Obviously, there can be no "agreement to the contrary" to
speak of because the obligation of the Government sought to be enforced in the present
action does not originate from contract, but from law which, generally is not subject to the
will of the parties. And there being no other legal provision cited which would justify a
departure from the rule that just compensation is determined on the basis of the value of
the property at the time of the taking thereof in expropriation by the Government, the value
of the property as it is when the Government took possession of the land in question, not the
increased value resulting from the passage of time which invariably brings unearned
increment to landed properties, represents the true value to be paid as just compensation
for the property taken. 13
In the present case, the unusually long delay of private respondent in bringing the present
action-period of almost 25 years which a stricter application of the law on estoppel and the
statute of limitations and prescription may have divested her of the rights she seeks on this
action over the property in question, is an added circumstance militating against payment to
her of an amount bigger-may three-fold more than the value of the property as should have
been paid at the time of the taking. For conformably to the rule that one should take good
care of his own concern, private respondent should have commenced proper action soon
after she had been deprived of her right of ownership and possession over the land, a
deprivation she knew was permanent in character, for the land was intended for, and had
become, avenues in the City of Cebu. A penalty is always visited upon one for his inaction,
neglect or laches in the assertion of his rights allegedly withheld from him, or otherwise
transgressed upon by another.
From what has been said, the correct amount of compensation due private respondent for
the taking of her land for a public purpose would be not P49,459.34, as fixed by the
respondent court, but only P14,615.79 at P2.37 per square meter, the actual value of the
land of 6,167 square meters when it was taken in 1924. The interest in the sum of
P145,410.44 at the rate of 6% from 1924 up to the time respondent court rendered its
decision, as was awarded by the said court should accordingly be reduced.
In Our decision in G.R. No. L-26400, February 29, 1972, 14 We have said that Victoria
Amigable is entitled to the legal interest on the price of the land from the time of the taking.
This holding is however contested by the Solicitor General, citing the case of Raymunda S.
Digsan vs. Auditor General, et al., 15 alleged to have a similar factual environment and
involving the same issues, where this Court declared that the interest at the legal rate in
favor of the landowner accrued not from the taking of the property in 1924 but from April 20,
1961 when the claim for compensation was filed with the Auditor General. Whether the
ruling in the case cited is still the prevailing doctrine, what was said in the decision of this
Court in the abovecited case involving the same on the instant matter, has become the "law
of the case", no motion for its reconsideration having been filed by the Solicitor General
before the decision became final. Accordingly, the interest to be paid private respondent,
Victoria Amigable, shall commence from 1924, when the taking of the property took place,
computed on the basis of P14,615.79, the value of the land when taken in said year 1924.
2. On the amount of attorney's fees to be paid private respondent, about which the Solicitor
General has next taken issue with the respondent court because the latter fixed the same at
P19,486.97, while in her complaint, respondent Amigable had asked for only P5,000.00, the
amount as awarded by the respondent court, would be too exhorbitant based as it is, on the
 CONSTI LAW156

inflated value of the land. An attorney's fees of P5,000.00, which is the amount asked for by
private respondent herself in her complaint, would be reasonable.
WHEREFORE, the judgment appealed from is hereby reversed as to the basis in the
determination of the price of the land taken as just compensation for its expropriation, which
should be the value of the land at the time of the taking, in 1924. Accordingly, the same is
hereby fixed at P14,615.79 at P2.37 per square meter, with interest thereon at 6% per
annum, from the taking of the property in 1924, to be also paid by Government to private
respondent, Victoria Amigable, until the amount due is fully paid, plus attorney's fees of
P5,000.00.
SO ORDERED.

REPUBLIC VS JUAN
G.R. No. L-24740 July 30, 1979

MAKASIAR, J.
Appeal by defendants-appellants from the decision dated September 28, 1964 of the Court
of First Instance of La Union in Civil Case No. 1835 for the expropriation of 338.7480
hectares of land owned by spouses Celestino C. Juan and Ana Tanseco as the site for the La
Union Regional Agricultural School, directing the plaintiff Republic of the Philippines totêñ.
£îhqwâ£
... pay the legal owners Celestino C. Juan and Ana Tanseco the amount of
P190,000.00 which is the just and reasonable compensation that the Court
rules in this case in favor of the defendants; and it appearing that on May 7,
1963, P100,000.00 had already been paid, it is therefore ordered that upon
this decision becoming final the balance of P90,000.00 plus interest of 6%
from May 4, 1963 shall be paid to defendants Celestino C. Juan and Ana
Tanseco," aside from the costs of the suit.
Defendants-appellants are the registered owners of two (2) adjoining parcels of land located
at Barrio Sapilang, Bacnotan, La Union with an aggregate area of 3,387,480 square meters
or 338.7480 hectares, more or less, and covered by Original Certificate of Title No. 0-420
issued on April 14, 1959 (pp, 9-14, 46-47, ROA; Vol. 1, rec.).
Pursuant to the authorization issued on March 15, 1963 by the President of the Philippines
through the Executive Secretary (p 15, ROA), the Solicitor General filed on April 8, 1963 the
complaint for expropriation of the aforesaid parcels of land to be used as the site of the La
Union Agricultural School, which was to be established by authority of Republic Act 2692 (pp.
9-20, 43 ROA, Vol. I, rec.).
Before the institution of the expropriation proceedings Victor Luis, who was appointed
principal of the proposed school, recommended the property of defendants as the school
site. Thereafter, together with Mrs. Avelina L. Osias, he negotiated with the defendants for
the purchase of their property (pp. 85-87, ROA, Vol. 1, rec.). On January 25, 1963, he wrote a
letter to defendant Celestino Juan, thus:têñ.£îhqwâ£
... Feelers have come to you to inquire about the price that you would be
willing to sell your land. Mrs, Pacita Gonzales and the undersigned came to
you personally and you informed us verbally your least price of P170,000.00
which you explained to us is very reasonable.
May I request your kindness to confirm the above price in writing, as your
offer as the selling price of your above-mentioned land in order that there will
be an official record or basis in negotiating with authorities concerned in the
purchase of your land as school site. (pp. 43-44, ROA, Vol. I, rec.).
Defendant Celestino Juan replied on January 28, 1963.têñ.£îhqwâ£
... that the selling price of my land is P170,000.00 net to me exclusive of the
amount of my obligation to the China Banking Corporation where the property
is mortgaged.
 CONSTI LAW157

The condition of the sale is at least P90,000.00 down and the balance within a
period of one (1) year. Title to the property will be transferred to you
immediately provided that an annotation of the remaining balance of the price
be accordingly made in the new title.
I wish, however, to tell you that presently there are no less than 23 tenants in
the land and they are harvesting or about to harvest their tobacco crops. In
justice to them, they should be allowed to finish harvesting their crops before
they are finally ejected.
It is with deep regret that I cannot part with the land at a lesser price. There
are 3 parties at least aside from you who are interested to buy the land. One
of them is ready to sign the contract for a price of P200,000.00 payable in
cash or at least a period of ten (10) days. This party, through an
understanding with a certain bank can mortgage the property for
P350,000.00. As you see, if the primary consideration is money alone, then, if
I am a smart, I should mortgage the land myself. It should be noted, and I
have all the records with me, that I have applied for a loan with the
Development Bank of the Philippines in the amount of P4,102,000.00
principally to establish a dairy farm and mortgaging only as collateral the said
land. From the conversation with said bank, it seems to me that the same
would be favorably considered if not for P4,000,000.00 at least P1,000,000.00.
Kindly confirm your acceptance of the terms of this letter as I can hold the
land for a period of ten (10) days. (pp. 382-384, ROA).
After receipt of the aforequoted letter, Mr. Luis consulted his office in Manila (p. 86, ROA, Vol.
I, rec.) as well as the provincial officials of La Union and the municipal officials of Bacnotan
(pp. 86,174, ROA, Vol. I, rec.).
In an order dated April 15, 1963, the trial court authorized the Government to enter and take
immediate possession of the property after depositing the amount of P90,793.70 with the
provincial treasurer of La Union as provisional value (p. 20, ROA, Vol. I, rec.),
Defendants on April 24, 1963 filed their "Urgent Motion for Reconsideration and/or to Lift
Writ of Possession" questioning among others, the propriety and correctness of Resolution
No. 13, series of 1962, of the Provincial Appraisal Committee and pointing out that "the fair
and reasonable market value ... should be at least fifty centavos (P0.50) per square meter of
P5,000.00 per hectare" and prayed that the complaint for expropriation be dismissed for lack
of jurisdiction; to set aside the order dated April 15, 1963 and instead order plaintiff to
deposit the amount of P300,000.00 as provisional value; and to set aside the writ of
possession dated April 16, 1963 until the court has decided the issue of jurisdiction and/or
until plaintiff has deposited the amount of P300,000.00 as provisional value of the property
(pp. 22-32, ROA, Vol. I, rec.). On the same date, the lower court lifted the writ of possession
until further orders.
Acting on the aforesaid motion on April 26, 1963, the lower court found the expropriation
proceedings in order and the provisional value made by the Provincial Appraisal Committee
inadequate and ordered the plaintiff Republic of the Philippines to deposit the amount of
P100,000.00 as provisional value until the true valuation of the lots can be determined in
accordance with law and further directed "that for the best interest of the defendants whose
improvements may be vandalized for lack of protection, let the writ be effected without
prejudice to the final determination of the true value of the property to be determined in due
course" and forthwith ordered the issuance of the writ of possession after the deposit by
plaintiff of the amount of P100,000.00 is made (p. 45, ROA, Vol. I, rec.).
On May 4, 1963, plaintiff Republic of the Philippines took possession and occupied the lots
under expropriation (p. 86, ROA, Vol. I, rec.) and deposited on May 7, 1963 the amount of
P100,000.00 which the appellants withdrew that same day.
On May 7, 1963, defendants filed two simultaneous pleadings: motion for reconsideration of
the provisional value on the ground that the value fixed by the court is still inadequate; and
a motion to dismiss which likewise embodied defendants' answer to the complaint for
expropriation (pp. 46-66, ROA, Vol. I, rec.).
 CONSTI LAW158

In an order dated June 13, 1963, the court denied the motion to dismiss of defendants for
lack of merit (p. 66, ROA, Vol. I, rec.).
In order dated January 8, 1964, the trial court directed the condemnation of the
property,têñ.£îhqwâ£
it appearing that the plaintiff has already deposited the amount of
P100,000.00 the provisional value of the property sought to be
condemned, which amount has already been withdrawn by the defendants
and the property accordingly turned over to the Republic of the Philippines for
the use of the La Union Agricultural School, ..." (pp. 66-67, ROA, emphasis
supplied).
and appointed as commissioners of appraisal (1) Atty. Rogelio Balagot, for the lower court
and as chairman; (2) Atty. Eufemio Molina, for the plaintiff; and (3) Atty. Pablito M. Rojas, for
the defendants (pp. 4, 67-68, ROA, Vol. I, rec.).
For a period of three days, these commissioners in the presence of the parties, conducted an
extensive ocular inspection and physical investigation of the property, after which they held
protracted hearings until June 2, 1964, wherein both parties were given full opportunity to
present their respective positions with voluminous documentary and oral evidence (p. 4,
ROA, Vol. I, rec.).
On June 29, 1964, Atty. Eufemio Molina, commissioner for plaintiff, filed his report dated June
25, 1964 (pp. 69-78, ROA, Vol. I, rec.) recommendingtêñ.£îhqwâ£
... that the value of the land of defendants to be taken as the site of the La
Union Agricultural School at Sapilang, Bacnotan, La Union, be fixed at
P135,000.00. which amount is the meeting point between the government's
offer of P100,000.00 and the defendants' price of P170,000.00.
Atty. Pablito M. Rojas, commissioner for the defendants, in his report of July 13, 1964,
recommendedtêñ.£îhqwâ£
... as the price of the land to be paid by the plaintiff to the defendants the
amount of P1,407,856.00 the same to bear interest at the legal rate from the
date of possession by the plaintiff to the date the amount is actually paid.
Commissioner Rogelio F. Balagot for the court and chairman recommended:têñ.£îhqwâ£
... that the just compensation to be paid the defendants landowners be the
following:
Value of the Land......................................................................... P1,044,163.70
Value of Improvements.................................................................. 1,712.60
Total Amount................................................................ P1,045,876.30
That the balance of P945,876.30 (deducting P100,000.00, the amount paid as
provisional value) earn legal interest (6%) until fully paid.
Defendants-appellants filed their objection to the reports of Commissioners Rojas, Balagot
and Molina, claiming that the true value of the land is P1,736,208.32 or P1,693,740.00 (pp.
284, 374, ROA, Vol. 1. rec.).
On September 4, 1964, defendants filed a petition entitled "Petition to Submit Case for
Decision" without any hearing on the reports (p. 378, ROA, Vol, I, rec.)
On September 28, 1964, the lower court rendered its decision (pp. 380- 426, ROA, Vol. I,
rec.).
A motion for reconsideration was filed by defendants on October 26, 1964 (pp. 426-508,
ROA. Vol. I, rec.), but the same was denied by the Court in an order dated May 10, 1965 (pp.
509-514, ROA. Vol. I, rec.).
I
Under their first assignment of error, appellants contend that the propriety of the
expropriation and the manner in which it was conducted were in dispute throughout the
proceedings in the trial court and that they never waived their objections thereto; that the
conditions precedent as provided for by Executive Order No. 132, series of 1937, as
amended, were not complied with, for no proper and valid negotiation to purchase the lots
or to have it donated to the Government was undertaken by the State before the institution
of the expropriation case in court; and that the resolution of the Appraisal Committee which
 CONSTI LAW159

was the basis of the amount alleged in the complaint as the fair market value of the lots to
be expropriated was null and void, having been adopted contrary to legal requirements (pp.
24-46, Appellants' Brief: p. 11. Vol. II. rec.). The same points were raised by the appellants in
their motion for reconsideration of the lower court's main decision and the trial court in its
order of May 10, 1965 correctly overruled them, stating that:têñ.£îhqwâ£
Movants start by bringing to the front the alleged lack of negotiations between
plaintiff and defendants for the acquisition of the 338 hectares belonging to
the latter. Non-compliance with Executive Order No. 132 is mentioned
repeatedly by the defendants as vitiating this case. It is even hinted that the
best resolution for this case would be to dismiss it because plaintiff failed to
comply with said Executive Order dictated in pre-war days. Plaintiff delivered
to defendants through this Court P100,000.00 as part of the fair and just
compensation that the defendants are entitled. On May 7, 1963, such amount
was received by defendants and plaintiff started developing the area and
constructing the buildings needed for the La Union Agricultural School. This
school is now in operation; and it would certainly be the most disturbing step
for the regularity of the functions of the Government to dismiss the case,
compelling the plaintiff to remove all buildings in the land that once belonged
to the defendants and return the property to them. Besides, interpreting with
fair liberality the pre-war Executive Order No. 132, the court shall now state
that for the purpose of negotiations with the land owners the letter of January
5, 1963 received by the defendants and the latter's reply of January 28, 1963
are clear and sufficient compliance with the tenor and spirit of said Executive
Order. The court, therefore, rejects any request that this case having been
filed without sufficient compliance with said administrative procedures the
whole proceeding shall have to be dismissed. This cannot be done." (pp. 511-
512, ROA, Vol. I, rec.).
To begin with, it must be emphasized that plaintiff-appellee in this instant case is the
Republic of the Philippines which is exercising its right of eminent domain inherent in it as a
body sovereign. In the exercise of his sovereign right the state is not subject to any
limitation other than those imposed by the Constitution which are: first, the taking must be
for a public use; secondly, the payment of just compensation must be made; and thirdly,
due process must be observed in the taking. Beyond these conditions, the exercise by the
State of its right of eminent domain is subject to no restraint. Section 64(h) of the Revised
Administrative Code confers upon the Chief Executive the power to determine when it is
necessary or advantageous to exercise the power of eminent domain in behalf of the
Republic of the Philippines and to direct the Solicitor General to cause the filing of the
appropriate condemnation proceedings in court. By this grant, the executive authorities may
then decide whether the power will be invoked and to what extent (see pp. 87-89, Political
Law of the Philippines, Tañ;ada and Carreon, 1962 ed., citing Visayan Refining Co. v. Camus,
40 Phil. 550).
Appellants in making their first assignment of error are under the wrong impression that the
provisions of Executive Order No. 132 are conditions precedent to the valid exercise of the
State of its right of eminent domain. As a whole, Executive Order No. 132 is purely an
administrative procedure confined within the executive department of the government
designed merely to govern and regulate the taking of private properties for public use which
may either be by voluntary sale or by donation in favor of the government. Nothing is
provided in said executive order expressly or impliedly making the procedures therein
enumerated as conditions precedent to the valid exercise by the government of the right of
eminent domain by filing the proper action in court. As stated, Executive Order No. 132 was
intended merely to govern the taking of private property short of judicial action either by
purchase or donation. Being so, the same cannot limit or circumscribe the sovereign and
inherent right of the State to expropriate private property through the Courts.
Moreover, there has been substantial compliance with the requirements of Executive Order
No. 132; because negotiations for the purchase of the parcels were conducted between
 CONSTI LAW160

Victor Luis, the principal of the proposed agricultural school, and Mrs. Avelina L. Osias on one
hand, and the defendants-appellants on the other, which did not result in a voluntary sale by
the defendants-appellants for lack of agreement on the just compensation for the parcels.
Paragraph (a) of Executive Order No. 132 provides that negotiations shall be conducted by
the "Director of Public works, city or district engineer, or other officials concerned ... The last
term can comprehend the principal of the proposed agricultural institution.
Furthermore, the unqualified withdrawal by appellant of the amount of P100,000.00
deposited in court by the plaintiff as provisional value of the lots subject of expropriation,
constituted recognition on their part of the right of the government to expropriate the lots,
(Republic v. Pasicolan, May 31, 1961, 2 SCRA 626).
If the unconditional withdrawal of the amount deposited as provisional value precludes the
defendants-appellants from questioning the right of the plaintiff to expropriate, it must
necessarily follow that said withdrawal also estops defendants-appellants from raising any
objection to the manner and propriety of the exercise by the plaintiff of the right of
expropriation (18 American Jurisprudence 634-635, Francisco's The Revised Rules of Court in
the Philippines, Vol. IV-B, pp. 411-412).
There can be no debate that due process was observed in the instant case. Likewise,
education is public use or public purpose. Republic Act No. 2692 expressly authorizes the
establishment of the La Union Regional Agricultural School within the Province of La Union
and the acquisition of a suitable site therefor. The inadvertent omission of the
term Regional in the complaint for expropriation could not nullify the expropriation of the
lands of defendants-appellants. Such error in the complaint does not amend the law and can
easily be corrected without affecting the validity of the proceedings.
II
The valuation of the lots must be fair and just, not only to the owner but also to the
taxpayers who are to pay for it. Appellants are entitled to receive only the value of what
they have been deprived of, and no more; because to award them less, would be unjust to
them, and to award them more, would be unjust to the public (27 Am. Jur., 2nd s 266,
footnote 17 pp. 52- 53).
The three commissioners appointed by the trial court to determine the fair market value of
the lots did not reach a consensus as to the classification of the land, the allocation of areas
as to each class, and the fair market value of each class of land.
Commissioner Rogelio F. Balagot found and recommended as follows:
1
. Irrigated 70 P8,500.00 P595,000.0
Riceland 0
2. Upland Rice 66 3,500.00 231,000.00
3. Orchard 52.0785 1,200.00 50,494.20
Land
4. Pasture 90.6695 1,000.00 90,669.50
Land
5. Forestland 70 1,000.00 77,000.00
TOTAL 338.7480 1,044,163.
has. 70
and, after adding to the above amount the sum of P1,712.00, representing improvements,
finally recommended the amount of P1,045,876.30 less P100,000.00 earlier withdrawn by
appellants, to earn legal interest until fully paid (pp. 271-282, ROA, Vol. I, rec.) Commissioner
Pablito M. Rojas appraised the land as follows:
Commissioner Pablito M. Rojas appraised the land as follows:
Land Total Market Total
Classification
 CONSTI LAW161

Hectares Value sq. Market

meter Value
Irrigated Palay 65.0000 P1.00 P650,000.0
Land 0
Upland Palay 66.0000 0.30 198,000.00
Orchard 38.0785 25 98,200.00
Pasture Land 95.6695 10 92,669.50
Forestry 8.0000 30 95,000.00
Compound
Forest Land 65.0000 15 97,500.00
Barrio 4.0000 .50 20,000.00
Compound
TOTAL 338.7480 1,171,369.5
0
and after considering some factors, like the fact that the lots are titled, said commissioner
finally recommended "the amount of P1,407,856.00, the same to bear interest at the legal
rate from the date of possession by the plaintiff to the date the amount is actually paid" (pp.
160-166, ROA, Vol. I, rec.).
Commissioner Eufemio Molina adopted the following classification and allocation:têñ.
£îhqwâ£
(a) With respect to Lot No. 1 (Exh. "B"), into —têñ.£îhqwâ£
1. Unirrigated riceland with an area of 120,000 sq. meters.
2. Upland rice with an area of 85,000 sq. meters.
3. Pasture land with area of 2,801,695 sq. meters.
(b) With respect to Lot No. 2 (Exh. 'B-l') , into-têñ.£îhqwâ£
1. Unirrigated riceland with an area of 120,000 sq. meters,
2. Upland rice with an area of 85,000 sq. meters.
3. Pasture land with an area of 175,785 sq. meters.
and making a mass valuation of the entire two lots, recommended the amount of
P135,000.00 by taking into consideration the amount which to him is the price the
government is willing to pay: P100,000.00 (actually the provisional value deposited by the
government to take possession of the lots); P170,000.00 which according to him is the
amount for which the defendants are willing to part with their lots (actually P190,000.00
including the bank mortgage liability of the land) and also the fact that the lots in question
were acquired by tile defendants in 1957 for the amount of only P50,000.00 fro 'm Felipe
Nebrija and his children (pp, 71- 78, ROA, Vol. 1, rec.).
Before the filing of the complaint, a Provincial Appraisal Committee composed of Provincial
Assessor Ramon Zandueta as chairman, and as members, Provincial Highway District
Engineer( Oscar Data and Provincial Auditor Gabino Ferrer, was constituted. On November
16, 1962, this committee conducted an ocular inspection of the property, and on the same
day, submitted its Resolution No. 13, Exhibit A, which classified defendant's property as
follows:têñ.£îhqwâ£
60 hectares riceland at P800.00 per hectare .I................. P48,000.00
278.7480 hectares pasture land at P150.00 per hectare ...41,812.20têñ.
£îhqwâ£
TOTAL................................................................ 189,812.20
(p. 135, ROA, Vol. I. rec.). The aforesaid resolution was rejected as having been done in
haste (pp. 135-136, ROA, Vol. I, rec.).
 CONSTI LAW162

According to Provincial Assessor Zandueta, the amount of P89,812.20 is the assessed value
of the property, which assessed value is the appraised value in expropriation cases (p. 141,
ROA, Vol. I, rec.).
La Union Agriculturist Pio A. Tadina was requested by Provincial Assessor Ramon Zandueta to
appraise the property. Pursuant to said request, Mr. Tadina went to the property thrice and
thereafter submitted his classification and valuation, as follows:
1
. 40 hectares P60,000.00 P200,000.00
riceland
2. 20 hectares 20,000.00 60,000.00
riceland
3. 80 hectares 40,000.00 80,000.00
pasture land
4. 120 hectares fruit 60,000.00 120,000.00
trees
5. 72 hectares 2nd 78,000.00 156,000.00
growth forest
TOTAL P258,000.00 P616,000.00
(p. 145, ROA, Vol. I, rec.).
When the complaint was filed, the improvements on the property consisted of the following:
20
mango (bearing) P30 ea. P800.00
21 coconut (bearing) P5 105.00
ea.
4 coconut (non-bearing) P2 8.00
ea.
4 caimito (star apple) P8 32.00
ea.
2 Chesa P5 ea. 10.00
4 Kasuy P2 ea. 8.00
12 bamboos (heavy) P0.30 3.60
ea.
1 bamboo (light) P0.10 ea. 0.10
1 breadfruit P5 ea. 5.00
1 jackfruit P4 ea. 4.00
1 guayabano P1 ea. 1.00
6 orange (non-bearing) P1 6.00
ea.
TOTAL P982.70
(pp. 16-17, ROA, Vol. I, rec.).
Mr. Luis Victor, principal of the La Union Regional Agricultural School, testified that there
were around 30 fruit-bearing mango trees, once coconut fruit-bearing trees and banana
plants (p. 139, ROA, Vol. I, rec.).
Both Attys. Pablito M. Rojas and Rogelio Balagot, commissioners representing respectively
the defendants-appellants and the trial court, agreed that the value of the improvements on
the property was then P1,712.60 (pp. 163, 280-281, ROA, Vol. I, rec.).têñ.£îhqwâ£
 CONSTI LAW163

... Starting from the town proper of Bacnotan, one can reach the property by
passing through the barrios of Cabaroan, Sayoan, Salincob, Casiaman and
finally Sapilang. The place is about 2.5 kilometers north of the Poblacion along
the National Highway up to the so-called Cabaroan junction. From this junction
is about a 2-kilometer feeder road going eastward. And from this lateral road
is an unsurfaced road of approximately 1.5 kilometers leading to the site of
the Agricutural School. However, before the school took possession of the land
on May 4, 1963, the place was not accessible at all by any motor vehicles, and
that the only means was to hike over rice paddies, trails and creeks.
Topographically, the property of defendant is situated on a high elevation. It
consists of mountains and hills forming a semi-circle, and sloping on the sides
towards an elongated portion or valley like depression which is level and
developed into ridefields. Because of its high elevation or location, the climate
of the place is healthful, temperate and especially invigorating when one is
near or within the vicinity of the waterfall or spring. The climate is of the kind
which the Weather Bureau would call the Type I climate; that is, the place has
two distinct seasons, a dry season from December to June, when there are
light rains or no rains at all and wet season, from June to December, when
rains are abundant, heavy and frequent. The soil to the place is good. It has a
luxurient vegetation.
The property as per Original Certificate of Title No. 0-420 (Exh. '9-f') is divided
into 2 lots; Lot No. 1 has an area of 3,006,695 square meters and covered by
Tax Declaration No. 33043 (Exh. 'b'); and Lot No. 2 which is under Tax
Declaration No. 33043 (Exh. 'B-l') has an area of 380,785 square meters,
making a total land area of 338,7480 hectares, with an assessed value of
P42,120.00.
Aside from the waterfall or spring within the property, there are also fruit
trees, scattered bamboo groves, banana trees in patches, forest area, upland
and pasture land. The bamboo and banana lands, however, cannot properly
be considered as such because the land upon which they grow is not planted
principally for such growth. The improvements on the forestry area have been
introduced by the government, notably the Reforestation Administration of the
Department of Agriculture and Natural Resources. (Exh "D" and Exh. "I"). The
other improvements on the land have been itemized in the complaint filed
before the Court. (pp. 69-71, ROA, Vol. I, rec.).
The foregoing findings do not appear to be disputed.
Defendant-appellant Celestino Juan himself, stated in his letter of January 28, 1963 that his
property is worth P190,000.00 (including his bank loan), which he later increased to
P300,000.00 in his motion for reconsideration filed on April 24, 1963. It should be recalled
that over three months earlier, appellant Celestino Juan, in his letter dated January 2, 1963
to the Provincial Appraisal Committee, evaluated his property at approximately P329,374.00,
stating that he spent P15,000.00 for survey P5,000.00 for registration and P20,000.00 for
bulldozing and levelling; that 60 hectares are first class which should be worth P3,000.00 per
hectare; and that the remaining portion of 278.748 hectares should command at least
P500.00 per hectare (pp. 35-37, ROA, Vol. I. rec.).
The last evaluation in the amount of P300,000.00 judicially given by the defendants-
appellants is a declaration and admission binding on them (Sec. 22, Rule 130, Revised Rules
of Court), there being no showing that they were laboring under an error of fact. No
compelling reason has been advanced to justify their being relieved from the binding effects
of such admission. As We ruled in the Republic of the Philippines versus Narciso [99 Phil.
1031 (1956)], "the owners' valuation of the property may not be binding on the Government
or the Court, but it should at least set a ceiling price for the compensation to be awarded.
Moreover, the prices to be considered are those at the beginning of the expropriation, not
the increased values brought about by the improvements and actuations of the Government
after occupying the premises" (Re-affirmed in R.P. v. PNB, April 12,1961, 1 SCRA 957-963).
 CONSTI LAW164

When the defendants-appellants withdrew in 1963 the P100,000.00 deposited by the

government, they already obtained a clear profit of P10,000.00 on their alleged investment
of P90,000.00 consisting of P50,000.00, the price they allegedly paid for the property in
1957, and P40,000.00 allegedly representing expenses for levelling, surveying and securing
their Torrens title of the property from 1957 to 1959. The balance of P392,000.00 —
consisting of P200,000.00 and interest of P192,000.00 at 6% annually for 16 years from May
4, 1963 to 1979 — is all profit, even during times of inflation. From 1957 until May 4, 1963,
when the government took possession of the property, the defendants-appellants paid realty
taxes on the basis of their tax assessment of only P42,120.00 (P89,812.20 according to
Provincial Assessor Zandueta [p. 141, ROA, Vol. I, rec.]). Atty. Pablito M. Roxas and Atty.
Rogelio Balago, appraisal commissioners respectively for appellants and the trial court,
conceded that the value of the improvements was only P1,712.00 in 1963. To give them
more than a million pesos — about P1,111,360.00 — on the basis of the appraisal of
P616,000.00 by provincial agriculturist Pio Tadina, including interest for 16 years at 6% per
annum, would be to mulct the tax-paying public, as the said amount is over ten times or
over 1000% on their alleged original investment of P90,000.00 from 1957, to 1959.
Precisely, in their reply dated January 28, 1963, their selling price was only P170,000.00 net
to them, exclusive of their bank debt of P20,000.00.
The appraisal of Provincial Agriculturist Pio Tadina, Chief Agricultural Appraiser Rafael T.
David of the DBP, Commissioner Balagot and Commissioner Rojas, respectively, in the
amount of P616,000.000, P1,006,400.00, P1,044,163.70, and P1,171,369.50, is patently
extravagant, considering that the property was bough in 1957 (1956 as claimed by
appellants [pp. 112, 126, Appellants' Brie])) for P50,000.00 only and the value of the
improvements did not exceed P1,712.60 as of May 4, 1963, when the government took
possession. It is doubtful that the property would increase in value over 6 times or over 10
times or by over 600% or over 1,000% in six years, from 1957 to 1963, with the expenses
for surviving, securing the Torrens title over and bulldozing said property amounting to not
more than P40,000.00, already included in the computation (p. 36, ROA, Vol.. I, rec.).
It should be emphasized that the property is about 6 kilometers from the poblaciosion of
Bacnotan; that on May 4, 1963, when the government took possession of the same, it was
not accessible at all by any motor vehicle and can only be reached by hiking through rice
paddies, trails; and creeks; that it was not fully developed: and that it was then assessed at
P42,120.00 (P89,812.20 according to Provincial Assessor Zandueta), although it has a
waterfall or- spring,
According to Commissioner Molina, the property has 24 hectares of Unirrigated rice land and
17 hectares dedicated to upland rice with the greater portion of 297.748 hectares as pasture
land (pp, 71-72, ROA, Vol. I, rec.). Pio Tadina reported that 60 hectares are riceland, 80
hectares pasture land 120 hectares with fruit trees and 78 hectares second growth forest (p.
146, ROA, Vol. I. rec.). According to Rafael 'I. David,, who was requested by appellant Juan to
make an appraisal (p. 145, ROA, Vol. I. rec.), 70 hectares are riceland, 66 hectares for upland
rice, 38.0785 hectares for orchard, 90.6695 hectares pasture land, 5 hectares forestry
compound, 65 hectares forest land and 4 hectares barrio compound (p. 150, ROA, Vol. I,
rec.).
Even under the classification of Commissioners Balagot and Rojas, as aforestated, about
50% of the property is not improved by man nor dedicated to agriculture, for about 95
hectares are pasture land and 70 hectares are forest land.
The sales of farm lots in the vicinity of the property in question from April, 1959 to May 14,
1962 (pp. 74-75, 152-153, 156-157, ROA, Vol. I, rec.), do not provide an adequate basis for
appraisal of the property of defendants-appellants; because such sales involved very small
developed areas of less than a hectare each, which small lots usually command better prices
within the reach f the ordinary buyer. The instant case involves the condemnation of over
338 hectares.
III
It is argued that appellants judicial admission of P300,000.00 as the provisional value of
their lots, should not bind them, because said admission refers only to the provisional value
 CONSTI LAW165

of the said lots and not as an admission of the actual - fair and just - value of the lots. The
provisional value fixed by the Court pursuant to Section 2 of Rule 67 of the Rules of Court, is
the provisional value that does not bind the land-owners. But when the landowner himself
fixes the provisional value, he should abide thereby in obedience to the rule that admissions
in pleadings bind the party making them.
Section 2 of Rule 67, New Rules of Court reads:têñ.£îhqwâ£
Entry of plaintiff upon depositing value with the National or Provincial
Treasurer — Upon the filing of the complaint or at any time thereafter the
plaintiff shall have the right to take or enter upon the possessionof the real or
personal property involved if he deposits with the National or Provincial
Treasurer its value, as provisionality and promptly ascertained and fixed by
the Court having jurisdiction of the proceedings, to be held by such treasurer
subject to the orders and final disposition o)f the court...
Rule 69, Section 3 of the Old Rules of Court under which the present case was filed
contained a similar provision. (See also Visayan Refining Co. v. Camus. 40 Phil. 550-556
[1919] and Manila Railroad Co. v. Paredes (31 Phil. 118-142 [1915]).
For emphasis, We repeat that the price of P300,000.00 was the provisional value fixed not by
the trial court, but by the defendants-appellants as owners in their motion for
reconsideration filed on April 24, 1963. The provisional value fixed by the trial court in its
order of April 15, 1963, was only P90,793.70, the reconsideration of which the owners
sought from the trial court. In its order of April 26, 1963, the trial court fixed the provisional
value of P100,000.00. The trial court, in its challenged decision of September 28, 1964,
finally fixed the value at P190,000.00, which is still more than double the alleged capital
investment of P90,000.00 allegedly paid by the owners for the purchase of the property,
levelling and expenses for survey and titling of the property from 1957 to 1959. In his own
letter of January 28, 1963, where he fixed his selling price at P170,000.00 net to him (plus
P20,000.00 bank mortgage on the property), defendant-appellant Celestino, Juan stated that
the best offer he had for the property was only P200,000.00.
While it may be true that the value provisionally fixed by the trial court "... does not
necessarily represent the true and correct value of the land ..." it is equally true that the said
amount provisionally fixed may yet turn out to be the true and correct value of the lots
approximating the "just compensation" requirement of the Constitution. In fact, the same
may also turn out to be more than the true and correct value of the property condemned by
the government (see 27 AM JUR 2nd 111, footnote 16).
Furthermore, it can be justifiably inferred that when appellants themselves proposed on April
24, 1963 the amount of P300,000.00 as the provisional value of their lots, they were
referring actually to the highest value their lots could command at that time,
notwithstanding their very speculative and extravagant claim in the same pleading (where
they made the P300,000.00 proposal) that the "fair market value of (the) property should at
least be fifty centavos . . per square meter or P5,000.00 per hectare.
Consider the following circumstances: têñ.£îhqwâ£
1. In his reply dated January 28,1963 to the letter of Mr. Victor Luis, appellant
Juan stated that the selling price of his land was "P170,000.00 net to me
exclusive of the amount of my obligation to the China Banking Corporation
where the property is mortgaged", or P190,000.00 including the mortgaged
debt of P20,000.00 (pp. 382-384, ROA).
2. Appellants-spouses acquired the lots in 1956 (as claimed by appellants) or
1957 (as stated in the decision of the trial court) from Felipe Nebrija and his
children for only P50,000.00.
3. The lots in question were taxed on the basis of an assessment of only
P42,120.00.
4. In his letter dated January 2, 1963 to the Provincial Appraisal Committee,
appellant Celestino Juan evaluated his lots at approximately P319,374.00.
 CONSTI LAW166

As a matter of fact, appellant should be bound by his P190,000.00 admission. In the light of
the above-mentioned circumstances, the said amount of P190,000.00 is already just and
reasonable.
Appellants' claim that they were forced to make the P190,000.00 offer because they were
then under a pressing need for money to defray expenses in connection with certain criminal
case involving appellant Ana to settle said cases, can hardly invite belief; because (1)
appellant Celestino Juan did not aver this alleged urgent need for money in his letter of
January 28, 1963, and (2) notwithstanding appellant Juan's claim in that same letter of
January 28, 1963 that an interested buyer of the said lots was "ready to sign the contract for
a price of P200,000.00 payable in cash or at least a period of ten (10) days," appellant did
not dispose of the same to said interested buyer, despite the lapse of ten days — during
which he could have had the money — from the receipt by Victor Luis of said letter.
Moreover, the same letter belies his alleged dire need for money to settle the alleged
criminal cases against his wife for he stated therein that he had then a pending DBP loan
application for P4,102,000.00 for a dairy farm, and that by reason of his connection with DBP
officials, his application would be favorably considered for P1,000,000.00 with the
expropriated property as collateral together with the dairy farm equipment, facilities and
stock.
Being a lawyer, appellant Celestino Juan knew that the reputation of his wife and for that
matter his family would be better protected and preserved by her acquittal after trial than
by settlement of the case (see pp. 107-108, Appellants' brief). Compromise of a criminal
case, other than a private offense, does not remove the criminal liability and the
concomitant stigma. Settlement of a criminal case, unlike acquittal, will not stop the people
from talking about the guilt of the accused therein.
Of course "judicial or non-judicial admissions made by condemnees as to the value of their
properties that are to be expropriated should not be deemed conclusive if such admitted
value be unjust, because the Constitution imperatively requires the payment of 'just
compensation'". But in the instant case, it could hardly be said that the amount of
P300,000.00 is unjust to the appellants. The delay in the payment is compensated by the
liability for 6% .interest per annum, covering sixteen (16) years — from 1963 to 1979 — on
the balance of P200,000.00 (on May 7, 1963, appellants withdrew the P100,000.00 deposit)
amounting to P192,000.00. The total balance due appellants would be P392,000.00. The
total payment to them then would be P492,000.00. Beyond this price, the value would be
excessive and unjust to the State and the taxpayer (27 Am. Jur. 2d 52-53 § 266, footnote
17).
It must be pointed out that the most reliable pieces of evidence in the records relative to the
just compensation to be paid herein appellants are those hereinbefore enumerated, namely,
appellants' own evaluation in 1963, the acquisition cost the tax assessment. This is so
because the Committee failed to arrive at an acceptable valuation, not to mention the fact
that the individual reports of the commissioners of the Appraisal Committee did not undergo
the indispensable requirement of hearing before the trial court. It must be herein stressed
that almost all the evidence enumerated earlier are in the nature of admissions by the
owner, which kind of evidence under existing jurisprudence occupies a preferred position in
the realm of proof of just compensation and valuation in eminent domain.
Even the purchase price of P50,000.00 paid in 1956 or 1957 by appellants for the lots sought
to be condemned in 1963 is generally held admissible as evidence of the lots' fair market
value, unless such purchase is too remote in point of time from the condemnation
proceedings or more special consideration induced the sale at less than the true market
value (29-A C.J.S. 1203-04).
Similarly, the assessed valuation of land made by tax assessors when required by the law,
and the owner's own valuation may be considered together with other proofs in the
determination of the just value of the lots condemned (29-A C.J.S. 1201-1202).
As aforestated, appellants paid realty taxes on the property on the basis of an assessed
valuation of only P42,120.00, with improvements worth only P1,712.00. On January 28,
1963, appellants' offer was P190,000.00, then P300,000.00 on April 24, 1963, as provisional
 CONSTI LAW167

value, after extravagantly claiming that the property is worth the fantabulous price of at
least P5,000.00 per hectare or a total of P1,693,040.00. Not even the irrigated rice lands
along the national highway in Nueva Ecija, the home province of appellants, could command
that price to P5,000.00 per hectare in 1963. And the lands in the case at bar are in La Union,
hilly, and away from the national highway without direct access to any feeder road.
In our jurisdiction, the statement of the value of his property by the owner in the tax
declaration shall, since 1940 under C.A. No. 530, constitute prima facie evidence of the real
value of the property in expropriation proceedings by the Government and its
instrumentalities.
In short, it could therefore be said — taking into consideration the acquisition cost of
P50,000.00 in 1956 or 1957 of the lots subject matter of the case, the alleged cost of
P40,000.00 for levelling, surveying and titling thereof from 1957 to 1959, the assessed value
as well as the tax declarations of the appellants with respect to these lots of only
P42,120.00, the improvements worth P1,712.00 in 1963, and the several admissions or
estimates made by the appellants with respect to the value of the lots ranging from
P190,000.00 to P319.374.00 to P300,000.00 to P1,693,040.00 (P5,000.00 per hectare)—that
the amount of P300,000.00 is just to appellants, not to mention that in addition to said
amount a considerable interest of P192,000.00 for 16 years (1963-1979) would be paid on
the unpaid balance of P200,000.00 from May 4, 1963 by the Government, or a grand total of
P492.000.00, which is over five (5) times or over 500% their capital investment of
P90,000.00 from 1956 to 1959. Anything beyond this amount is grossly excessive and
patently unjust to the government and the taxpaying public (29 Am. Jur.2d 52-53 § 266,
footnote 17).
It cannot be seriously claimed by appellants that the declarations of value of the lots in
Exhibits B and B-1 were not made by them (pp. 346-347, ROA), considering that said tax
declarations were made only after the title over the lots was obtained by appellants. Exhibits
B and B-1 clearly indicate that appellants and no one else made the said declarations (p.
182, ROA).
Likewise, the valuation of Agriculturist Tadina should not be accorded too much weight for
the following reasons: têñ.£îhqwâ£
1. His valuation report is based purely on his own estimate and opinion: hence
in his letter to Atty. Ramon Zandueta which embodied his evaluation, he
therein stated that "... You will note hereunder the technical analysis of the
undersigned with regards to the area under consideration as a personal
opinion ..."
2. The factors he considered in evaluating the lots in question could hardly
justify this valuation in the amount of P616,000.00. Hence: "The 80 hectares
of pasture land if properly grazed and managed is capable of maintaining no
less than 400 heads of cattle. The 120 hectares of fruit trees is suitably
adapted to cacao, coffee, bananas, mangoes. pineapple, citrus, avocado,
rambutan, lanzones, The 78 second growth forest if only planted to "alnos
Mirando" a Japanese kind of forest tree will also increase the volume of spring
water for irrigation purposes ... The second growth forest land has been
evaluated higher than the pasture and fruit tree lands because forest lands do
not only conserve soil erosion and soil fertility but also provide organic matter
for the irrigated riceland. It will also conserve and promote the development
of spring besides the value of the, trees and other forest by-products which
are now available as sources of income (pp.39-42,ROA).
3. Tadina is not "an experienced and competent appraiser" in the field of
eminent domain or expropriation cases. When cross-examined by the Fiscal of
the Province of La Union, he declared that the appraisal he made for the
property in Damortis, La Union, and that in Aringay was only with respect to
its adaptability and suitability for agriculture and not for purposes of
determining the fair and reasonable value (tsn, pp. 505-506, pp. 201, 202,
ROA; see also pp. 108-109. ROA). His appointment as Chairman of the
 CONSTI LAW168

Appraisal Committee for public lands in La Union did not qualify him as an
"experienced and competent appraiser" in expropriation cases; because lands
involved therein are public lands and the appraisal or determination of the fair
market value of said lots are not for purposes of expropriation cases (p. 202,
ROA). Neither would his participation in the Poro Point expropriation add to his
qualifications as an appraiser in expropriation cases, because he was merely
therein consulted (p. 202. ROA).
4. His classifications were made by estimates and not by actual
measurements (tsn, p. 514; p. 204, ROA).
That the land "had potential for conversion into subdivision" should not be considered in the
valuation of the lots in question; because (1) the records of the case do not show conclusive
evidence as to the subdivision potentiality of the lots; and (2) as held in Manila Electric Co. v.
Tuason, "agricultural land should be appraised as such and not as potential building site" (60
Phil. 663 [1934], reiterated in the case of The Municipal Government of Sagay v. Jison, et al.,
104 Phil. 1026, 1033 [1958]).
Republic vs. Castelvi lends no support to appellants' position; because in the Castelvi case,
there was a finding by this Court that "... the lands in question had ceased to be devoted to
the production of agricultural crops, that they had become adaptable for residential
purposes, and that the appellees had actually taken steps to convert their lands into
residential subdivisions even before the Republic filed the complaint for eminent domain (p.
355, 58 SCRA).
As already noted above, the individual valuations made by the three commissioners are of
little value, if at all; because the same were irregularly prepared, not to mention the fact that
the same were not subjected to the indispensable hearing requirement before the trial court
— wherein the commissioners could have been cross-examined on their respective reports,
the bases thereof, how they reached their conclusions, and their qualifications, and related
matters-vital to the credibility, or lack of it, of their valuations.
It is urged that, because the value of the peso at the time of the taking in 1963 by the
government of the lots of appellants and the value of the peso today when the just
compensation to be awarded to appellants is to be paid, are no longer the same, this factor
should be considered in the determination of the final award to be given; and that even if
WE consider appellants as having judicially admitted the amount of P300,000.00 as the price
of their property, the doubling of this sum at this time is justified.
Actually, under this proposition, the amount to be doubled shou1d only be the balance of
P200,000.00, for appellants had ,withdrawn and made use of the P100,000.00 deposited by
the government at the inception of this case.
It is of course true that the value of the peso in 1963 and at present is no longer the same.
But this does not justify US in considering that factor nor in doubling the amount judicially
admitted by appellants; because such contingency is already well-taken care of by the
interest to be awarded to appellants. For that is the true role or nature of interest in
expropriation cases; because said interest is not contractual in nature nor based on delict or
quasi-delict, but one that "runs as a matter of law and follows as a matter of course from the
right of the landowner to be placed in as good a position as money can accomplish, as of the
date of the taking" (30 CJS 230). Stated otherwise: "Where the payment of compensation
does not accompany the taking of property for public use but is postponed to a later date,
the owner of the property is ordinarily entitled to the award of an additional sum which will
compensate for delay (cases cited) or which will, in other words, produce the full equivalent
of the value of the property paid contemporaneously with the taking" (29-A CJS 762). Under
this view, the interest awarded is deemed part of the just compensation required to be paid
to the owner (27 Am. Jur, 112). This appears to be prevailing view in the United States. As
aptly and clearly explained in one American case:têñ.£îhqwâ£
Article 1 § 18 of the Constitution of the State of Oregon, provides in part as
follow: 'Private Property shall not be taken for public use ... without just
cornpansation.' The Fifth Amendment to the Constitution of the United States
contains substantially the same provision, 'nor shall private property be taken
 CONSTI LAW169

for public use, without just compensation.' In construing this Identical

language of the Federal Constitution the Supreme Court of the United States
holds as follows: lt is settled by the decision of this court that just
compensation is the value of the property taken at the time of the taking
(citing cases). And, if the taking precedes the payment of compensation, the
owner is entitled to such addition to the value at the time of the taking as will
produce the full equivalent of such value paid contemporaneously.Interest at a
proper rate is a good measure of the amount to be added' (numerous cases
cited omitted). In these cases and others, the proper rate of interest is held to
be the legal rate of interest prevailing in the jurisdiction where the land is
located. The Supreme Court of West Virginia holds on the authority of these
decisions and also of Dohany vs. Rogers, 281, U.S. 362, 50 SGt. 299. 74 L.Ed
904, 68 ALR434, that denial of the right of interest would be a violation of the
fourteenth Amendment to the Federal Constitution, Simons v. Dillon, 119 W.
VA 284,193 S.E. 331, 113 A.L.R. 787. The following texts are authority for the
allowance of such interest as part of the damages sustained by the owner of
the land. Nichols on Eminent Domain 653, § 216 (3d ed.); Lewis, Eminent
Domain (3d ed.) 1320, § 742; 18 AM JUR., Eminent Domain, § 272 [State vs.
Deal, 233 P 2d 242, 251-252, emphasis supplied].
This view is also well-discussed by JAHR in his book, Eminent Domain — Valuation and
Procedure (1953 ed.), Chapter XXVIII — Payment of Compensation, pp. 286-301; and by
ORGEL in his book, Valuation Under Eminent Domain, Vol. I (1953 ed.) on the subject of
interest as part of just compensation and as a penalty for delay in payment (Sec. 5, pp. 19-
33).
In this jurisdiction, a study of the cases decided by this Court with respect to the award of
interest to the condemnee where there is a gap of time between the taking and the
payment, shows that We tend to follow the view just discussed. The first case-it would
appear-where the question of interest arose in this jurisdiction was the Philippine Railway Co.
vs. Solon, February 20, 1909, 13 Phil. 35-45. The two issues taken there in connection with
interest were: (1) From what time should interest be reckoned, from time of the taking
possession of the property by the government or from judgment of the trial court; and (2)
whether on appeal, appellant-condemnee is entitled to interest during the pendency of the
appeal. In disposing of the issues, the Court, relving heavily on American jurisprudence,
appears to treat interest as part of just compensation and as an additional amount sufficient
to place the owner "in as good a position as money can accomplish, as of the date of the
taking." Thus, the Court declared: têñ.£îhqwâ£
It remains to consider what interest the defendant is entitled to from named
date. It appears from the record that thecompany opposed the confirmation of
the award. Its objections were so far successful that the court reduced the
amount awarded by the commissioners. The owner was compelled to appeal
and in his appeal has been so far successful as to reverse the action of the
the court below. Under these circumstances we think he is entitled to interest
on the award until the final determination of this proceeding. What the result
would be if he had failed in his appeal, we do not decide. The interest thus
allowed will be interest upon the amount awarded by the commissioners from
the 2nd day of February, 1907, until payment (13 Phil. 40-44, emphasis
supplied).
The Solon case thereafter became the basis of award of interest on expropriation cases
like Philippine Railway v. Duran, 33 Phil. 159 [1916]; Manila Railroad Co. v. Alano, 36 Phil.
501 [1917]; Manila Railroad Co. v. Attorney General, 41 Phil. 177 [1920]; Alejo v. Provincial
Government of Cavite, 54 Phil. 304 1930]; Tayabas v. Perez, 66 Phil. 470 [1938]; Republic v.
Gonzales, 94 Phil. 957 [1954]; Republic v. Lara, 96 Phil. 172 [1954]; Phil. Executive
Commission v. Estacio, 98 Phil. 219 [1956]; Republic of the Philippines v. Deleste, 46 al., 99
Phil. 1035 [1956] Republic v. Garcellano, 103 Phil. 237 [1958]; Yaptinchay, 108 Phil. 1053
[1960]; Republic v. Tayengco, 19 SCRA 900 [1967],and many others, until the matter of
 CONSTI LAW170

payment of interest became an established part of every case where taking and payment
were not contemporaneously made.
And finally, We confirmed our adherence to the prevailing view in the United States when in
the case of Urtula vs. Republic, January 31, 1968, 222 SCRA 477, 480), We declared, through
Mr. Justice J.B.L. Reyes, that: têñ.£îhqwâ£
... Said interest is not contractual, nor based on delict or quasi-delict, but one
that— têñ.£îhqwâ£
runs as a matter of law and follows as a matter of course from
the right of the landowner to be placed in as good a position as
money can accomplish, as of the date of the taking'" (C.J.S. 230;
see also Castelvi case, supra, and Republic v. Nable-Lichauco,
14 SCRA 682).
In this connection, it must be pointed out that the judicial notice taken by this Court in the
Castelvi case (supra, 363) "... of the fact that the value of the Philippine peso has
considerably gone down since the year 1959," was premised not on the par value of the
peso to the dollar, but on the dollarpeso exchange rates at the time of the taking of the lots
and at the time of the payment thereof.
In the case of Manuel & Co. vs. CB (38 SCRA. 533-542 [1971]), We distinguished
between par value of the pesoand the dollar-peso exchange rate. The par value of the peso
to the dollar-two pesos to one dollar-is fixed by law and remains intact (see 48, R.A. 265,
1948; Sec. 6, CA No. 699, 1945). Hence, while there was a change of the exchange rate, the
par value of the peso as established by law remains unchanged.
Such par value can only be altered by the President of the Philippines upon proposal of the
Monetary Board with five members concurring and approved by Congress (Sec. 49[3] RA No.
265).
On the other hand, the rate of exchange or exchange rate is the "price, or the indication of
the price, at which one can sell or buy with one's own domestic currency a foreign currency
unit. Normally, the rate is deterniined by the law of supply and demand for a particular
currency" (38 SCRA 533-542).
It is submitted that the Castelvi doctrine on the value of our peso is of doubtful legality,
considered in the context of the Central Bank case, above discussed. In effect, the Castelvi
ruling has devalued our peso; a case of devaluation by judicial fiat.
In the light of the foregoing, the de facto devaluation of our peso should not be taken into
account in the final determination of the value of the lots, subject matter of the case.
In the 1970 case of Dizon-Rivera v. Dizon (33 SCRA 554-557 [1970]), WE ruled against
appellants and held that the decrease in the purchasing value of the Philippine peso
provides no legal basis or justification for completing their legitime with real properties of
the estate instead of being paid in cash, reasoning thus: têñ.£îhqwâ£
Neither may the appellants legally insist on their legitime being completed
with real properties of the estate instead of being paid in cash, per the
approved project of partition. The properties are not available for the purpose,
as the testatrix had specifically partitioned and distributed them to her heirs,
and the heirs are called upon, as far as feasible to comply with and give effect
to the intention of the testatrix as solemnized in her will, by implementing her
manifest wish of transmitting the real properties intact to her named
beneficiaries, principally the executrix-appellee. The appraisal report of the
properties of the estate as filed by the commissioner appointed by the lower
court was approved in totoupon joint petition of the parties, and hence, there
cannot be said to be any question-and none is presented-as to fairness of the
valuation thereof or that the legitimate of the heirs in terms of cash has been
understated. The plaint of oppositors that the purchasing value of the
Philippine peso has greatly declined since the testatrix death in January, 1961
provides no legal basis of justification for overturning the wishes and intent of
the testatrix. The transmission of rights to the succession are transmitted
from the moment of death of the decedent (Article 777, and accordingly, the
 CONSTI LAW171

value thereof must be reckoned as of then, as otherwise, estates would never

be settled if there were to be a revaluation with every subsequent flucluation
in the values of the currency and properties of the estate. There is evidence in
the record that prior to November 25, 1964, one of the oppositors, Bernardita,
accepted the suin of P50,000.00 on account of her inheritance, which, per the
parties' manifestation, "does not in any way affect the adjudication made to
her in the projects of partition." The payment in cash by way of making the
proper adjustments in order to meet the requirements of the law on non-
impairment of legitimes as well as to give effect to the last will of the testatrix
has invariably been availed of and sanctioned see Articles 955, 1080 and
1104, Civil Code). That her co-oppositors would receive their cash differentials
only now when the value of the currency has declined further, whereas they
could have received them earlier, like Bernardita, at the time of approval of
the project of partition and when the peso's purchasing value was higher, is
due to their own decision of pursuing the present appeal (emphasis supplied).
Additional distinction between the present case and the Castelvi case:
The proceedings before the commissioners and before the trial court in the Castelvi case
were all in accordance with the provisions of the rules, while this is not so in the present
case; because the commissioner's herein did not turn out a valid report, as the
commissioners made their own and separate reports and no consensus was reached by
them on the classification of the lots, allocation of areas to each class, and the fair market
value of each class and the lots as a whole. Furtherinore, no hearing on the reports of the
commissioners was made by the trial court in the case at bar, because of the motion of the
herein appellants to submit the same without any (hearing).
The finding of the trial court, which was sustained by this Court, that the lots involved in the
Castelvi case were residential, was supported by and based on the factual findings of the
commissioners, who were unanimous thereon, and the Provincial Appraisal Committee of
Pampanga (58 SCRA 356-359): while in the present case no one among the commissioners
classified the lots or any portion thereof as residential or one with residential/subdivision
potentiality. With respect to Provincial Board Resolution No. 13 on the report of the Provincial
Appraisal Committee of La Union, the same was disregarded tor having been passed in
haste.
In the present case, commissioner Balagot classified the two lots into irrigated riceland,
upland riceland, orchard land, pasture land and forest land, Commissioner Rojas similarly
classified the lands as above, but adding thereto forestry compound and barrio compound;
while Commissioner Molina classified the lots into unirrigated riceland, upland riceland and
pasture land. It cannot be seriously claimed that the lots involved in the present case is
suitable as, or have potentials tor conversion into, a residential subdivision simply because a
4-hectare area of the same was considered by a member of the provincial appraisal
committee as residential. In fact, said 4-hectare area was reflected in the Provincial
Appraisal Committee Report, Resolution 13 (Exh. A) as grazing land, not as a residential one
(see pp. 138, 173, ROA; pp. 67, 143, Appellants' Brief). Furthermore, none among the
commissioners believed the testimony of the said member on that point as no one among
them classified the lots or any portion thereof as residential. The fact that the tenants of
appellants previously occupied the said area and constructed houses thereon, does not
convert the whole area or the portion thus occupied into a residential one. The residential
nature of the lot is not determined alone by the presence or absence of houses thereon
(Republic v. Garcia, 91 Phil. 46 [1952]). The determination of the true nature of a lot must
take into consideration, among other things, the location topography, kind of soil fertility or
productivity, and surroundings of the lot (Manila Railroad Co. Caligsihan, 40 Phil. 326 [1919];
Republic v. Garcia, supra: Republic v. Lara, 50 O.G. 5778 [1954]). Indeed, the evidence relied
upon by this Court in concluding that the lots involved in the Castelvi case
are residential and not agricultural, shows that: têñ.£îhqwâ£
... Castelvi broached the Idea of subdividing her land into residential lots as
early as July 11, 1965 in her letter to the Chief of Staff of the Armed Forces of
 CONSTI LAW172

the Philippines (Exh. 5-Castelvi). As a matter of fact, the layout of the

subdivision plan was tentatively approved by the National Planning
Commission on September 7, 1956. (Exh. 8-Castelvi). The land of Castelvi had
not been devoted to agriculture since 1974 when it was leased to the
Philippine Army. In 1957 said land was classified as residential, and taxes
based on its classification as residential had been paid since then (Exh. 13-
Castelvi). The location of the Castelvi land justifies its suitability fora
residential subdivision. As found by the trial court, "It is at the left side and
the entrance of the Basa Air Base and bounded on two sides by roads (Exh.
13-Castelvi; paragraphs 1 and 2, Exh. 12-Castelvi), the poblacion (of
Floridablanca,) the municipal building, and the Pampanga Sugar Mills are
close by. The barrio schoolhouse and chapel are also near (Tsn., Nov. 23,
1960, p. 68).
The land of Toledo-Gozun (Lot 1-B and Lot 3) are practically of the same
condition as the land of Castelvi. They are also contiguous to the Basa Air
Base, and are along the road. These lands are near the barrio school house,
the barrio Chapel, the Pampanga Sugar Mills, and the Poblacion of
Floridablanca (Exhs. 1, 3 and 4-Toledo-Gozun). As a matter of fact, regarding
Lot 1-B, it had already been surveyed and subdivided, and its conversion into
a residential subdivision was tentatively by the National Planning Commission
on July 8, 1959 Exhs. 5 and 6-Toledo-Gozun). As early as June, 1958, no less
than 32 men connected with the Philippine Air Force among them
commissioned, officers, non-commissioned officers, and enlisted men had
requested Mr. and Mrs. Joaquin D. Gozun to open a subdivision on their lands
in question (Exhs, 8, 8-A to 8-ZZ-Toledo-Gozun)" (58 SCRA 357, emphasis
supplied).
In the present case, there is no evidence in the record warranting a conclusion that the
parcels involved have potentials for conversion into a residential subdivision. On the
contrary, the location, topography and the use to which the lots involved were, devoted at
the time of the filing of expropriation proceedings in the lower court, indicate that they have
none. In his report, Commissioner Molina described the location and topography of the lots
as follows: têñ.£îhqwâ£
... Starting from the town propwer of Bacnotan, one can reach the property by
passing through the barrios of Cabaroan, Sayoan, Salincob, Casianan and
finally Sapilang. The place is about 2.5 kilometers north of the the Poblacion
along the National Highway up to the so-called Cabaroan junction. From this
junction is about a 2-kilometer feeder road going eastward. And from this
lateral road is an unsurfaced road of approximately 1.5 kilometers leading to
the site of the Agricultural School. However, before the school took possession
of the land on May 4, 1963, the place was not accessible at all by any motor
vehicles, and that the only means was to hike over paddies, trails and creeks.
Topographically, the property of defendants is situated on a high elevation. It
consists of mountains and hills forming a semi-circle, and sloping on the sides
towards an elongated portion of valley-like depression which is level and
developed into ricefields. Because of its high elevation or location, the climate
of the place ishealthful, temperate and especially invigorating when one is
near or within the vicinity of the waterfall or spring. The climate is of the kind
which the Weather Bureau would call the Type I climate; that is, the place has
two distinct reasons, a dry season from December to June, when there are
light rains or no raisn at all, and wet season, from June to December, when
rains are abundant, heavy and frequent. The soil of the place is good. It has a
luxuriant vegetation (pp. 69-70, ROA, emphasis supplied).
The presence of the houses of twenty-three (23) tenants in a 4-hectare area at the time the
government took possession of the lots herein involved, is not sufficient proof of that
portion's potentialitv for conversion into a residential subdivision, much less of the whole
 CONSTI LAW173

parcel of about 338 hectares. There was no evidence that the houses of the tenants were
there constructed because of its residential nature. In all likelihood, the tenants were forced
by necessity to construct their Rouses therein to be close to their respective tobacco farms.
The fact that under the leasehold system of land tenure, a tenant is allotted a portion for his
dwelling does not render the entire landholding no longer agricultural and thereby convert
the same into a residential land.
WHEREFORE, THE JUDGMENT APPEALED FROM IS HEREBY MODIFIED AND THE
PLAINTIFFAPPELLEE REPUBLIC OF THE PHILIPPINES IS HEREBY DIRECTED TO PAY THE
DEFENDANTSAPPELLANTS CELESTINO C. JUAN AND ANA TANSECO THE SUM OF TWO
HUNDRED THOUSAND (P200,000.00) PESOS, WITH INTEREST AT THE LEGAL RATE OF SIX
PERCENT (6%) PER ANNUM FROM MAY 1, 1963. NO COSTS.

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY VS LOZADA

NACHURA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to
reverse, annul, and set aside the Decision[1] dated February 28, 2006 and the
Resolution[2] dated February 7, 2007 of the Court of Appeals (CA) (Cebu City), Twentieth
Division, in CA-G.R. CV No. 65796.

The antecedent facts and proceedings are as follows:

Subject of this case is Lot No. 88-SWO-25042 (Lot No. 88), with an area of 1,017 square
meters, more or less, located in Lahug, Cebu City. Its original owner was Anastacio Deiparine
when the same was subject to expropriation proceedings, initiated by the Republic of the
Philippines (Republic), represented by the then Civil Aeronautics Administration (CAA), for
the expansion and improvement of the Lahug Airport. The case was filed with the then Court
of First Instance of Cebu, Third Branch, and docketed as Civil Case No. R-1881.

As early as 1947, the lots were already occupied by the U.S. Army. They were turned over to
the Surplus Property Commission, the Bureau of Aeronautics, the National Airport
Corporation and then to the CAA.

During the pendency of the expropriation proceedings, respondent Bernardo L. Lozada, Sr.
acquired Lot No. 88 from Deiparine. Consequently, Transfer Certificate of Title (TCT) No. 9045
was issued in Lozadas name.

On December 29, 1961, the trial court rendered judgment in favor of the Republic and
ordered the latter to pay Lozada the fair market value of Lot No. 88, adjudged at P3.00 per
square meter, with consequential damages by way of legal interest computed from
November 16, 1947the time when the lot was first occupied by the airport. Lozada received
the amount of P3,018.00 by way of payment.

The affected landowners appealed. Pending appeal, the Air Transportation Office (ATO),
formerly CAA, proposed a compromise settlement whereby the owners of the lots affected
by the expropriation proceedings would either not appeal or withdraw their respective
appeals in consideration of a commitment that the expropriated lots would be resold at the
price they were expropriated in the event that the ATO would abandon the Lahug Airport,
pursuant to an established policy involving similar cases. Because of this promise, Lozada
did not pursue his appeal. Thereafter, Lot No. 88 was transferred and registered in the name
of the Republic under TCT No. 25057.
 CONSTI LAW174

The projected improvement and expansion plan of the old Lahug Airport, however, was not
pursued.

Lozada, with the other landowners, contacted then CAA Director Vicente Rivera, Jr.,
requesting to repurchase the lots, as per previous agreement. The CAA replied that there
might still be a need for the Lahug Airport to be used as an emergency DC-3 airport. It
reiterated, however, the assurance that should this Office dispose and resell the properties
which may be found to be no longer necessary as an airport, then the policy of this Office is
to give priority to the former owners subject to the approval of the President.

On November 29, 1989, then President Corazon C. Aquino issued a Memorandum to the
Department of Transportation, directing the transfer of general aviation operations of
the Lahug Airport to the Mactan International Airport before the end of 1990 and, upon such
transfer, the closure of the Lahug Airport.

Sometime in 1990, the Congress of the Philippines passed Republic Act (R.A.) No. 6958,
entitled An Act Creating the Mactan-Cebu International Airport Authority, Transferring
Existing Assets of the Mactan International Airport and the Lahug Airport to the Authority,
Vesting the Authority with Power to Administer and Operate the Mactan International Airport
and the Lahug Airport, and For Other Purposes.

From the date of the institution of the expropriation proceedings up to the present, the
public purpose of the said expropriation (expansion of the airport) was never actually
initiated, realized, or implemented. Instead, the old airport was converted into a commercial
complex. Lot No. 88 became the site of a jail known as Bagong Buhay Rehabilitation
Complex, while a portion thereof was occupied by squatters. [3] The old airport was converted
into what is now known as the Ayala I.T. Park, a commercial area.

Thus, on June 4, 1996, petitioners initiated a complaint for the recovery of possession and
reconveyance of ownership of Lot No. 88. The case was docketed as Civil Case No. CEB-
18823 and was raffled to the Regional Trial Court (RTC), Branch 57, Cebu City. The complaint
substantially alleged as follows:

(a) Spouses Bernardo and Rosario Lozada were the registered owners of Lot
No. 88 covered by TCT No. 9045;

(b) In the early 1960s, the Republic sought to acquire by expropriation Lot No.
88, among others, in connection with its program for the improvement
and expansion of the LahugAirport;

(c) A decision was rendered by the Court of First Instance in favor of the
Government and against the land owners, among whom was Bernardo
Lozada, Sr. appealed therefrom;

(d) During the pendency of the appeal, the parties entered into a compromise
settlement to the effect that the subject property would be resold to the
original owner at the same price when it was expropriated in the event
that the Government abandons the Lahug Airport;

(e) Title to Lot No. 88 was subsequently transferred to the Republic of

the Philippines (TCT No. 25057);

(f) The projected expansion and improvement of the Lahug Airport did not
materialize;
 CONSTI LAW175

(g) Plaintiffs sought to repurchase their property from then CAA Director
Vicente Rivera. The latter replied by giving as assurance that priority
would be given to the previous owners, subject to the approval of the
President, should CAA decide to dispose of the properties;

(h) On November 29, 1989, then President Corazon C. Aquino, through a

Memorandum to the Department of Transportation and Communications
(DOTC), directed the transfer of general aviation operations at
the Lahug Airport to the Mactan-Cebu International Airport Authority;

(i) Since the public purpose for the expropriation no longer exists, the property
must be returned to the plaintiffs.[4]

In their Answer, petitioners asked for the immediate dismissal of the complaint. They
specifically denied that the Government had made assurances to reconvey Lot No. 88 to
respondents in the event that the property would no longer be needed for airport
operations. Petitioners instead asserted that the judgment of condemnation was
unconditional, and respondents were, therefore, not entitled to recover the expropriated
property notwithstanding non-use or abandonment thereof.

After pretrial, but before trial on the merits, the parties stipulated on the following set of
facts:

(1) The lot involved is Lot No. 88-SWO-25042 of the Banilad Estate, situated in
the City of Cebu, containing an area of One Thousand Seventeen (1,017)
square meters, more or less;

(2) The property was expropriated among several other properties in Lahug in
favor of the Republic of the Philippines by virtue of a Decision dated
December 29, 1961 of the CFI of Cebu in Civil Case No. R-1881;

(3) The public purpose for which the property was expropriated was for the
purpose of the Lahug Airport;

(4) After the expansion, the property was transferred in the name of MCIAA;
[and]

(5) On November 29, 1989, then President Corazon C. Aquino directed the
Department of Transportation and Communication to transfer general
aviation operations of the Lahug Airport to the Mactan-Cebu
International Airport Authority and to close the Lahug Airport after such
transfer[.][5]

During trial, respondents presented Bernardo Lozada, Sr. as their lone witness, while
petitioners presented their own witness, Mactan-Cebu International Airport Authority legal
assistant Michael Bacarisas.

On October 22, 1999, the RTC rendered its Decision, disposing as follows:

WHEREFORE, in the light of the foregoing, the Court hereby renders judgment
in favor of the plaintiffs, Bernardo L. Lozada, Sr., and the heirs of Rosario
Mercado, namely, Vicente M. Lozada, Marcia L. Godinez, Virginia L. Flores,
 CONSTI LAW176

Bernardo M. Lozada, Jr., Dolores L. Gacasan, Socorro L. Cafaro and Rosario M.

Lozada, represented by their attorney-in-fact Marcia Lozada Godinez, and
against defendants Cebu-Mactan International Airport Authority (MCIAA) and
Air Transportation Office (ATO):

1. ordering MCIAA and ATO to restore to plaintiffs the possession and

ownership of their land, Lot No. 88 Psd-821 (SWO-23803), upon payment of
the expropriation price to plaintiffs; and

2. ordering the Register of Deeds to effect the transfer of the Certificate

of Title from defendant[s] to plaintiffs on Lot No. [88], cancelling TCT No.
20357 in the name of defendant MCIAA and to issue a new title on the same
lot in the name of Bernardo L. Lozada, Sr. and the heirs of Rosario Mercado,
namely: Vicente M. Lozada, Mario M. Lozada, Marcia L. Godinez, Virginia L.
Flores, Bernardo M. Lozada, Jr., Dolores L. Gacasan, Socorro L. Cafaro and
Rosario M. Lozada.

No pronouncement as to costs.

SO ORDERED.[6]

Aggrieved, petitioners interposed an appeal to the CA. After the filing of the necessary
appellate briefs, the CA rendered its assailed Decision dated February 28, 2006, denying
petitioners appeal and affirming in toto the Decision of the RTC, Branch
57, Cebu City. Petitioners motion for reconsideration was, likewise, denied in the questioned
CA Resolution dated February 7, 2007.

Hence, this petition arguing that: (1) the respondents utterly failed to prove that there was a
repurchase agreement or compromise settlement between them and the Government; (2)
the judgment in Civil Case No. R-1881 was absolute and unconditional, giving title in fee
simple to the Republic; and (3) the respondents claim of verbal assurances from government
officials violates the Statute of Frauds.

The petition should be denied.

Petitioners anchor their claim to the controverted property on the supposition that the
Decision in the pertinent expropriation proceedings did not provide for the condition that
should the intended use of Lot No. 88 for the expansion of the Lahug Airport be aborted or
abandoned, the property would revert to respondents, being its former owners. Petitioners
cite, in support of this position, Fery v. Municipality of Cabanatuan,[7] which declared that the
Government acquires only such rights in expropriated parcels of land as may be allowed by
the character of its title over the properties

If x x x land is expropriated for a particular purpose, with the condition that

when that purpose is ended or abandoned the property shall return to its
former owner, then, of course, when the purpose is terminated or abandoned
the former owner reacquires the property so expropriated. If x x x land is
expropriated for a public street and the expropriation is granted upon
condition that the city can only use it for a public street, then, of course, when
the city abandons its use as a public street, it returns to the former owner,
unless there is some statutory provision to the contrary. x x x. If, upon the
contrary, however, the decree of expropriation gives to the entity a fee simple
title, then, of course, the land becomes the absolute property of the
expropriator, whether it be the State, a province, or municipality, and in that
 CONSTI LAW177

case the non-user does not have the effect of defeating the title acquired by
the expropriation proceedings. x x x.

When land has been acquired for public use in fee simple,
unconditionally, either by the exercise of eminent domain or by purchase, the
former owner retains no right in the land, and the public use may be
abandoned, or the land may be devoted to a different use, without any
impairment of the estate or title acquired, or any reversion to the former
owner. x x x.[8]

Contrary to the stance of petitioners, this Court had ruled otherwise in Heirs of
Timoteo Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority,[9] thus

Moreover, respondent MCIAA has brought to our attention a significant and

telling portion in the Decision in Civil Case No. R-1881 validating our
discernment that the expropriation by the predecessors of respondent was
ordered under the running impression that Lahug Airport would continue in
operation

As for the public purpose of the expropriation proceeding, it

cannot now be doubted. Although Mactan Airport is being
constructed, it does not take away the actual usefulness and
importance of the Lahug Airport: it is handling the air traffic
both civilian and military. From it aircrafts fly to Mindanao and
Visayas and pass thru it on their flights to the North
and Manila. Then, no evidence was adduced to show how soon
is the Mactan Airport to be placed in operation and whether
the LahugAirport will be closed immediately thereafter. It is up
to the other departments of the Government to determine said
matters. The Court cannot substitute its judgment for those of
the said departments or agencies. In the absence of such
showing, the Court will presume that the Lahug Airport will
continue to be in operation (emphasis supplied).

While in the trial in Civil Case No. R-1881 [we] could have simply
acknowledged the presence of public purpose for the exercise of eminent
domain regardless of the survival of Lahug Airport, the trial court in
its Decision chose not to do so but instead prefixed its finding of public
purpose upon its understanding that Lahug Airport will continue to be in
operation. Verily, these meaningful statements in the body of
the Decision warrant the conclusion that the expropriated properties would
remain to be so until it was confirmed that Lahug Airport was no longer in
operation. This inference further implies two (2) things: (a) after
the Lahug Airport ceased its undertaking as such and the expropriated lots
were not being used for any airport expansion project, the rights vis--vis the
expropriated Lots Nos. 916 and 920 as between the State and their former
owners, petitioners herein, must be equitably adjusted; and (b) the foregoing
unmistakable declarations in the body of the Decision should merge with and
become an intrinsic part of the fallo thereof which under the premises is
clearly inadequate since the dispositive portion is not in accord with the
findings as contained in the body thereof.[10]
 CONSTI LAW178

Indeed, the Decision in Civil Case No. R-1881 should be read in its entirety, wherein it is
apparent that the acquisition by the Republic of the expropriated lots was subject to the
condition that the Lahug Airport would continue its operation. The condition not having
materialized because the airport had been abandoned, the former owner should then be
allowed to reacquire the expropriated property.[11]

On this note, we take this opportunity to revisit our ruling in Fery, which involved an
expropriation suit commenced upon parcels of land to be used as a site for a public
market. Instead of putting up a public market, respondent Cabanatuan constructed
residential houses for lease on the area. Claiming that the municipality lost its right to the
property taken since it did not pursue its public purpose, petitioner Juan Fery, the former
owner of the lots expropriated, sought to recover his properties. However, as he had
admitted that, in 1915, respondent Cabanatuan acquired a fee simple title to the lands in
question, judgment was rendered in favor of the municipality, following American
jurisprudence, particularly City of Fort Wayne v. Lake Shore & M.S. RY. Co., [12] McConihay v.
Theodore Wright,[13] and Reichling v. Covington Lumber Co.,[14] all uniformly holding that the
transfer to a third party of the expropriated real property, which necessarily resulted in the
abandonment of the particular public purpose for which the property was taken, is not a
ground for the recovery of the same by its previous owner, the title of the expropriating
agency being one of fee simple.

Obviously, Fery was not decided pursuant to our now sacredly held constitutional right that
private property shall not be taken for public use without just compensation. [15] It is well
settled that the taking of private property by the Governments power of eminent domain is
subject to two mandatory requirements: (1) that it is for a particular public purpose; and (2)
that just compensation be paid to the property owner. These requirements partake of the
nature of implied conditions that should be complied with to enable the condemnor to keep
the property expropriated.[16]

More particularly, with respect to the element of public use, the expropriator should commit
to use the property pursuant to the purpose stated in the petition for expropriation filed,
failing which, it should file another petition for the new purpose. If not, it is then incumbent
upon the expropriator to return the said property to its private owner, if the latter desires to
reacquire the same. Otherwise, the judgment of expropriation suffers an intrinsic flaw, as it
would lack one indispensable element for the proper exercise of the power of eminent
domain, namely, the particular public purpose for which the property will be
devoted. Accordingly, the private property owner would be denied due process of law, and
the judgment would violate the property owners right to justice, fairness, and equity.

In light of these premises, we now expressly hold that the taking of private property,
consequent to the Governments exercise of its power of eminent domain, is always subject
to the condition that the property be devoted to the specific public purpose for which it was
taken. Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and
is peremptorily abandoned, then the former owners, if they so desire, may seek the
reversion of the property, subject to the return of the amount of just compensation
received. In such a case, the exercise of the power of eminent domain has become improper
for lack of the required factual justification.[17]

Even without the foregoing declaration, in the instant case, on the question of whether
respondents were able to establish the existence of an oral compromise agreement that
entitled them to repurchase Lot No. 88 should the operations of the Lahug Airport be
abandoned, we rule in the affirmative.

It bears stressing that both the RTC, Branch 57, Cebu and the CA have passed upon this
factual issue and have declared, in no uncertain terms, that a compromise agreement was,
 CONSTI LAW179

in fact, entered into between the Government and respondents, with the former undertaking
to resell Lot No. 88 to the latter if the improvement and expansion of the Lahug Airport
would not be pursued. In affirming the factual finding of the RTC to this effect, the CA
declared

Lozadas testimony is cogent. An octogenarian widower-retiree and a resident

of Moon Park, California since 1974, he testified that government
representatives verbally promised him and his late wife while the
expropriation proceedings were on-going that the government shall return the
property if the purpose for the expropriation no longer exists. This promise
was made at the premises of the airport. As far as he could remember, there
were no expropriation proceedings against his property in 1952 because the
first notice of expropriation he received was in 1962. Based on the promise,
he did not hire a lawyer. Lozada was firm that he was promised that the lot
would be reverted to him once the public use of the lot ceases. He made it
clear that the verbal promise was made in Lahug with other lot owners before
the 1961 decision was handed down, though he could not name the
government representatives who made the promise. It was just a verbal
promise; nevertheless, it is binding. The fact that he could not supply the
necessary details for the establishment of his assertions during cross-
examination, but that When it will not be used as intended, it will be returned
back, we just believed in the government, does not dismantle the credibility
and truthfulness of his allegation. This Court notes that he was 89 years old
when he testified in November 1997 for an incident which happened decades
ago. Still, he is a competent witness capable of perceiving and making his
perception known. The minor lapses are immaterial. The decision of the
competency of a witness rests primarily with the trial judge and must not be
disturbed on appeal unless it is clear that it was erroneous. The objection to
his competency must be made before he has given any testimony or as soon
as the incompetency becomes apparent. Though Lozada is not part of the
compromise agreement,[18] he nevertheless adduced sufficient evidence to
support his claim.[19]

As correctly found by the CA, unlike in Mactan Cebu International Airport Authority v. Court
of Appeals,[20] cited by petitioners, where respondent therein offered testimonies which were
hearsay in nature, the testimony of Lozada was based on personal knowledge as the
assurance from the government was personally made to him. His testimony on cross-
examination destroyed neither his credibility as a witness nor the truthfulness of his words.

Verily, factual findings of the trial court, especially when affirmed by the CA, are
binding and conclusive on this Court and may not be reviewed. A petition for certiorari under
Rule 45 of the Rules of Court contemplates only questions of law and not of fact. [21] Not one
of the exceptions to this rule is present in this case to warrant a reversal of such findings.

As regards the position of petitioners that respondents testimonial evidence violates the
Statute of Frauds, suffice it to state that the Statute of Frauds operates only with respect to
executory contracts, and does not apply to contracts which have been completely or
partially performed, the rationale thereof being as follows:

In executory contracts there is a wide field for fraud because unless they be in
writing there is no palpable evidence of the intention of the contracting
parties. The statute has precisely been enacted to prevent fraud. However, if
a contract has been totally or partially performed, the exclusion of parol
evidence would promote fraud or bad faith, for it would enable the defendant
 CONSTI LAW180

to keep the benefits already delivered by him from the transaction in

litigation, and, at the same time, evade the obligations, responsibilities or
liabilities assumed or contracted by him thereby.[22]

In this case, the Statute of Frauds, invoked by petitioners to bar the claim of respondents for
the reacquisition of Lot No. 88, cannot apply, the oral compromise settlement having been
partially performed. By reason of such assurance made in their favor, respondents relied on
the same by not pursuing their appeal before the CA. Moreover, contrary to the claim of
petitioners, the fact of Lozadas eventual conformity to the appraisal of Lot No. 88 and his
seeking the correction of a clerical error in the judgment as to the true area of Lot No. 88 do
not conclusively establish that respondents absolutely parted with their property. To our
mind, these acts were simply meant to cooperate with the government, particularly because
of the oral promise made to them.

The right of respondents to repurchase Lot No. 88 may be enforced based on a constructive
trust constituted on the property held by the government in favor of the former. On this
note, our ruling in Heirs of Timoteo Moreno is instructive, viz.:

Mactan-Cebu International Airport Authority is correct in stating that one

would not find an express statement in the Decision in Civil Case No. R-1881
to the effect that the [condemned] lot would return to [the landowner] or that
[the landowner] had a right to repurchase the same if the purpose for which it
was expropriated is ended or abandoned or if the property was to be used
other than as the Lahug Airport. This omission notwithstanding, and while the
inclusion of this pronouncement in the judgment of condemnation would have
been ideal, such precision is not absolutely necessary nor is it fatal to the
cause of petitioners herein. No doubt, the return or repurchase of the
condemned properties of petitioners could be readily justified as the manifest
legal effect or consequence of the trial courts underlying presumption
that Lahug Airport will continue to be in operation when it granted the
complaint for eminent domain and the airport discontinued its activities.

The predicament of petitioners involves a constructive trust, one that is akin

to the implied trust referred to in Art. 1454 of the Civil Code, If an absolute
conveyance of property is made in order to secure the performance of an
obligation of the grantor toward the grantee, a trust by virtue of law is
established. If the fulfillment of the obligation is offered by the grantor when it
becomes due, he may demand the reconveyance of the property to him. In
the case at bar, petitioners conveyed Lots No. 916 and 920 to the government
with the latter obliging itself to use the realties for the expansion of Lahug
Airport; failing to keep its bargain, the government can be compelled by
petitioners to reconvey the parcels of land to them, otherwise, petitioners
would be denied the use of their properties upon a state of affairs that was not
conceived nor contemplated when the expropriation was authorized.

Although the symmetry between the instant case and the situation
contemplated by Art. 1454 is not perfect, the provision is undoubtedly
applicable. For, as explained by an expert on the law of trusts: The only
problem of great importance in the field of constructive trust is to decide
whether in the numerous and varying fact situations presented to the courts
there is a wrongful holding of property and hence a threatened unjust
enrichment of the defendant. Constructive trusts are fictions of equity which
are bound by no unyielding formula when they are used by courts as devices
 CONSTI LAW181

to remedy any situation in which the holder of legal title may not in good
conscience retain the beneficial interest.

In constructive trusts, the arrangement is temporary and passive in which the

trustees sole duty is to transfer the title and possession over the property to
the plaintiff-beneficiary.Of course, the wronged party seeking the aid of a
court of equity in establishing a constructive trust must himself do
equity. Accordingly, the court will exercise its discretion in deciding what acts
are required of the plaintiff-beneficiary as conditions precedent to obtaining
such decree and has the obligation to reimburse the trustee the consideration
received from the latter just as the plaintiff-beneficiary would if he proceeded
on the theory of rescission. In the good judgment of the court, the trustee may
also be paid the necessary expenses he may have incurred in sustaining the
property, his fixed costs for improvements thereon, and the monetary value of
his services in managing the property to the extent that plaintiff-beneficiary
will secure a benefit from his acts.

The rights and obligations between the constructive trustee and the
beneficiary, in this case, respondent MCIAA and petitioners over Lots Nos. 916
and 920, are echoed in Art. 1190 of the Civil Code, When the conditions have
for their purpose the extinguishment of an obligation to give, the parties,
upon the fulfillment of said conditions, shall return to each other what they
have received x x x In case of the loss, deterioration or improvement of the
thing, the provisions which, with respect to the debtor, are laid down in the
preceding article shall be applied to the party who is bound to return x x x. [23]

On the matter of the repurchase price, while petitioners are obliged to reconvey Lot No. 88
to respondents, the latter must return to the former what they received as just
compensation for the expropriation of the property, plus legal interest to be computed from
default, which in this case runs from the time petitioners comply with their obligation to
respondents.

Respondents must likewise pay petitioners the necessary expenses they may have incurred
in maintaining Lot No. 88, as well as the monetary value of their services in managing it to
the extent that respondents were benefited thereby.

Following Article 1187[24] of the Civil Code, petitioners may keep whatever income or fruits
they may have obtained from Lot No. 88, and respondents need not account for the interests
that the amounts they received as just compensation may have earned in the meantime.

In accordance with Article 1190[25] of the Civil Code vis--vis Article 1189, which provides that
(i)f a thing is improved by its nature, or by time, the improvement shall inure to the benefit
of the creditor x x x, respondents, as creditors, do not have to pay, as part of the process of
restitution, the appreciation in value of Lot No. 88, which is a natural consequence of nature
and time.[26]

WHEREFORE, the petition is DENIED. The February 28, 2006 Decision of the Court of
Appeals, affirming the October 22, 1999 Decision of the Regional Trial Court, Branch 87,
Cebu City, and its February 7, 2007 Resolution are AFFIRMED with MODIFICATION as
follows:

1. Respondents are ORDERED to return to petitioners the just compensation they received
for the expropriation of Lot No. 88, plus legal interest, in the case of default, to be computed
from the time petitioners comply with their obligation to reconvey Lot No. 88 to them;
 CONSTI LAW182

2. Respondents are ORDERED to pay petitioners the necessary expenses the latter incurred
in maintaining Lot No. 88, plus the monetary value of their services to the extent that
respondents were benefited thereby;

3. Petitioners are ENTITLED to keep whatever fruits and income they may have
obtained from Lot No. 88; and

4. Respondents are also ENTITLED to keep whatever interests the amounts they received as
just compensation may have earned in the meantime, as well as the appreciation in value of
Lot No. 88, which is a natural consequence of nature and time;

In light of the foregoing modifications, the case is REMANDED to the Regional Trial Court,
Branch 57, Cebu City, only for the purpose of receiving evidence on the amounts that
respondents will have to pay petitioners in accordance with this Courts decision. No costs.
SO ORDERED.

DE OANO VS REPUBLIC
DECISION

VELASCO, JR., J.:

At the center of these two (2) Petitions for Review on Certiorari under Rule 45 is the issue of
the right of the former owners of lots acquired for the expansion of
the Lahug Airport in Cebu City to repurchase or secure reconveyance of their respective
properties.

In the first petition, docketed as G.R. No. 168770, petitioners Anunciacion vda. de
Ouano, Mario Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez (the Ouanos) seek to
nullify the Decision[1] dated September 3, 2004 of the Court of Appeals (CA) in CA-G.R. CV
No. 78027, affirming the Order dated December 9, 2002 of the Regional Trial Court (RTC),
Branch 57 in Cebu City, in Civil Case No. CEB-20743, a suit to compel the Republic of the
Philippines and/or the Mactan-Cebu International Airport Authority (MCIAA) to reconvey to
the Ouanos a parcel of land.
 CONSTI LAW183

The second petition, docketed as G.R. No. 168812, has the MCIAA seeking principally to
annul and set aside the Decision [2] and Resolution[3] dated January 14, 2005 and June 29,
2005, respectively, of the CA in CA-G.R. CV No. 64356, sustaining the RTC, Branch 13 in
Cebu City in its Decision of October 7, 1988 in Civil Case No. CEB-18370.

Per its October 19, 2005 Resolution, the Court ordered the consolidation of both cases.

Except for the names of the parties and the specific lot designation involved, the relevant
factual antecedents which gave rise to these consolidated petitions are, for the most part, as
set forth in the Courts Decision[4] of October 15, 2003, as reiterated in a Resolution[5] dated
August 9, 2005, in G.R. No. 156273 entitled Heirs of Timoteo Moreno and Maria Rotea v.
Mactan-Cebu International Airport Authority (Heirs of Moreno), and in other earlier related
cases.[6]

In 1949, the National Airport Corporation (NAC), MCIAAs predecessor agency,

pursued a program to expand the Lahug Airport in Cebu City. Through its team of
negotiators, NAC met and negotiated with the owners of the properties situated around the
airport, which included Lot Nos. 744-A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and 947
of the Banilad Estate. As the landowners would later claim, the government negotiating
team, as a sweetener, assured them that they could repurchase their respective lands
should the Lahug Airport expansion project do not push through or once
the Lahug Airport closes or its operations transferred to Mactan-Cebu Airport. Some of the
landowners accepted the assurance and executed deeds of sale with a right of repurchase.
Others, however, including the owners of the aforementioned lots, refused to sell because
the purchase price offered was viewed as way below market, forcing the hand of the
Republic, represented by the then Civil Aeronautics Administration (CAA), as successor
agency of the NAC, to file a complaint for the expropriation of Lot Nos. 744-A, 745-A, 746,
747, 761-A, 762-A, 763-A, 942, and 947, among others, docketed as Civil Case No. R-
1881 entitled Republic v. Damian Ouano, et al.

On December 29, 1961, the then Court of First Instance (CFI) of Cebu rendered
judgment for the Republic, disposing, in part, as follows:

IN VIEW OF THE FOREGOING, judgment is hereby rendered:

1. Declaring the expropriation of Lots Nos. 75, 76, 76, 89, 90, 91, 92, 105,
106, 107, 108, 104, 921-A, 88, 93, 913-B, 72, 77, 916, 777-A, 918, 919, 920,
764-A, 988, 744-A, 745-A, 746, 747, 762-A, 763-A, 951, 942, 720-A, x x x and
947, included in the Lahug Airport, Cebu City, justified in and in lawful
exercise of the right of eminent domain.

xxxx
3. After the payment of the foregoing financial obligation to the landowners,
directing the latter to deliver to the plaintiff the corresponding Transfer
Certificates of Title to their respective lots; and upon the presentation of the
said titles to the Register of Deeds, ordering the latter to cancel the same and
to issue, in lieu thereof, new Transfer Certificates of Title in the name of the
plaintiff.[7]

In view of the adverted buy-back assurance made by the government, the owners of
the lots no longer appealed the decision of the trial court. [8] Following the finality of the
judgment of condemnation, certificates of title for the covered parcels of land were issued in
the name of the Republic which, pursuant to Republic Act No. 6958, [9] were subsequently
transferred to MCIAA.
 CONSTI LAW184

At the end of 1991, or soon after the transfer of the aforesaid lots to
MCIAA, Lahug Airport completely ceased operations, Mactan Airport having opened to
accommodate incoming and outgoing commercial flights. On the ground, the expropriated
lots were never utilized for the purpose they were taken as no expansion
of Lahug Airport was undertaken. This development prompted the former lot owners to
formally demand from the government that they be allowed to exercise their promised right
to repurchase. The demands went unheeded. Civil suits followed.

G.R. No. 168812 (MCIAA Petition)

On February 8, 1996, Ricardo L. Inocian and four others (all children of Isabel Limbaga who
originally owned six [6] of the lots expropriated); and Aletha Suico Magat and seven others,
successors-in-interest of Santiago Suico, the original owner of two (2) of the condemned lots
(collectively, the Inocians), filed before the RTC in Cebu City a complaint for reconveyance of
real properties and damages against MCIAA. The complaint, docketed as Civil Case No.
CEB-18370, was eventually raffled to Branch 13 of the court.

On September 29, 1997, one Albert Chiongbian (Chiongbian), alleging to be the owner of Lot
Nos. 761-A and 762-A but which the Inocians were now claiming, moved and was later
allowed to intervene.

During the pre-trial, MCIAA admitted the following facts:

1. That the properties, which are the subject matter of Civil Case
No. CEB-18370, are also the properties involved in Civil Case R-1881;

2. That the purpose of the expropriation was for the expansion of

the old Lahug Airport; that the Lahug Airport was not expanded;

3. That the old Lahug Airport was closed sometime in June 1992;
4. That the price paid to the lot owners in the expropriation case is
found in the decision of the court; and

5. That some properties were reconveyed by the MCIAA because

the previous owners were able to secure express waivers or riders wherein the
government agreed to return the properties should the expansion of
the Lahug Airport not materialize.

During trial, the Inocians adduced evidence which included the testimony of Ricardo
Inocian (Inocian) and Asterio Uy (Uy). Uy, an employee of the CAA, testified that he was a
member of the team which negotiated for the acquisition of certain lots in Lahug for the
proposed expansion of the Lahug Airport. He recalled that he acted as
the interpreter/spokesman of the team since he could speak the Cebuano dialect. He stated
that the other members of the team of negotiators were Atty. Pedro Ocampo, Atty. Lansang,
and Atty. Saligumba. He recounted that, in the course of the negotiation, their team assured
the landowners that their landholdings would be reconveyed to them in the event
the Lahug Airport would be abandoned or if its operation were transferred to
the Mactan Airport. Some landowners opted to sell, while others were of a different bent
owing to the inadequacy of the offered price.

Inocian testified that he and his mother, Isabel Lambaga, attended a meeting called
by the NAC team of negotiators sometime in 1947 or 1949 where he and the other
landowners were given the assurance that they could repurchase their lands at the same
price in the event the Lahug Airport ceases to operate. He further testified that they rejected
 CONSTI LAW185

the NACs offer. However, he said that they no longer appealed the decree of expropriation
due to the repurchase assurance adverted to.

The MCIAA presented Michael Bacarizas (Bacarizas), who started working for MCIAA
as legal assistant in 1996. He testified that, in the course of doing research work on the lots
subject of Civil Case No. CEB-18370, he discovered that the same lots were covered by the
decision in Civil Case No. R-1881. He also found out that the said decision did not expressly
contain any condition on the matter of repurchase.

Ruling of the RTC

On October 7, 1998, the RTC rendered a Decision in Civil Case No. CEB-18370, the
dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered

directing defendant Mactan Cebu International Airport Authority (MCIAA) to
reconvey (free from liens and encumbrances) to plaintiffs Ricardo Inocian,
Olimpia E. Esteves, Emilia E. Bacalla, Restituta E. Montana and Raul Inocian
Lots No. 744-A, 745-A, 746, 762-A, 747, 761-A and to plaintiffs Aletha Suico
Magat, Philip M. Suico, Doris S. dela Cruz, James M. Suico, Edward M. Suico,
Roselyn S. Lawsin, Rex M. Suico and Kharla Suico-Gutierrez Lots No. 942 and
947, after plaintiffs shall have paid MCIAA the sums indicated in the decision
in Civil Case No. R-1881. Defendant MCIAA is likewise directed to pay the
aforementioned plaintiffs the sum or P50,000.00 as and for attorneys fees and
P10,000.00 for litigation expenses.

Albert Chiongbians intervention should be, as it is hereby DENIED for

utter lack of factual basis.
With costs against defendant MCIAA.[10]

Therefrom, MCIAA went to the CA on appeal, docketed as CA-G.R. CV No. 64356.

Ruling of the CA

On January 14, 2005, the CA rendered judgment for the Inocians, declaring them
entitled to the reconveyance of the questioned lots as the successors-in-interest of the late
Isabel Limbaga and Santiago Suico, as the case may be, who were the former registered
owners of the said lots. The decretal portion of the CAs Decision reads:

WHEREFORE, in view of the foregoing premises, judgment is hereby

rendered by us DISMISSING the appeal filed in this
case and AFFFIRMING the decision rendered by the court a quo on October
7, 1998 in Civil Case No. CEB-18370.

SO ORDERED.

The CA, citing and reproducing excerpts from Heirs of Moreno,[11] virtually held that
the decision in Civil Case No. R-1881 was conditional, stating that the expropriation of
[plaintiff-appellees] lots for the proposed expansion of the Lahug Airport was ordered by the
CFI of Cebu under the impression that Lahug Airport would continue in operation. [12] The
condition, as may be deduced from the CFIs decision, was that should MCIAA, or its
precursor agency, discontinue altogether with the operation of Lahug Airport, then the
owners of the lots expropriated may, if so minded, demand of MCIAA to make good its verbal
 CONSTI LAW186

assurance to allow the repurchase of the properties. To the CA, this assurance, a
demandable agreement of repurchase by itself, has been adequately established.

On September 21, 2005, the MCIAA filed with Us a petition for review of the CAs Decision,
docketed as G.R. No. 168812.

G.R. No. 168770 (Ouano Petition)

Soon after the MCIAA jettisoned the Lahug Airport expansion project, informal settlers
entered and occupied Lot No. 763-A which, before its expropriation, belonged to the
Ouanos. The Ouanos then formally asked to be allowed to exercise their right to repurchase
the aforementioned lot, but the MCIAA ignored the demand. On August 18, 1997, the
Ouanos instituted a complaint before the Cebu City RTC against the Republic and the MCIAA
for reconveyance, docketed as Civil Case No. CEB-20743.

Answering, the Republic and MCIAA averred that the Ouanos no longer have
enforceable rights whatsoever over the condemned Lot No. 763-A, the decision in Civil Case
No. R-1881 not having found any reversionary condition.

Ruling of the RTC

By a Decision dated November 28, 2000, the RTC, Branch 57 in Cebu City ruled in
favor of the Ouanos, disposing as follows:

WHEREFORE, in the light of the foregoing, the Court hereby renders

judgment in favor of the plaintiffs, Anunciacion Vda. De Ouano, Mario P.
Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez and against the
Republic of the Philippines and Mactan Cebu International Airport Authority
(MCIAA) to restore to plaintiffs, the possession and ownership of their land, Lot
No. 763-A upon payment of the expropriation price to defendants; and

2. Ordering the Register of Deeds to effect the transfer of the Certificate of

Title from defendant Republic of the Philippines on Lot 763-A, canceling TCT
No. 52004 in the name of defendant Republic of the Philippines and to issue a
new title on the same lot in the names of Anunciacion Vda. De Ouano, Mario P.
Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez.

No pronouncement as to costs.[13]

Acting on the motion of the Republic and MCIAA for reconsideration, however, the RTC,
Branch 57 in Cebu City, presided this time by Judge Enriqueta L. Belarmino, issued, on
December 9, 2002, an Order[14] that reversed its earlier decision of November 28, 2000 and
dismissed the Ouanos complaint.

Ruling of the CA

In time, the Ouanos interposed an appeal to the CA, docketed as CA-G.R. CV No. 78027.
Eventually, the appellate court rendered a Decision [15] dated September 3, 2004, denying the
appeal, thus:

WHEREFORE, premises considered, the Order dated December 9, 2002, of

the Regional Trial Court, 7th Judicial Region, Branch 57, Cebu City, in Civil Case
No. CEB-20743, is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.
 CONSTI LAW187

Explaining its case disposition, the CA stated that the decision in Civil Case No. R-1881 did
not state any condition that Lot No. 763-A of the Ouanosand all covered lots for that
matterwould be returned to them or that they could repurchase the same property if it were
to be used for purposes other than for the Lahug Airport. The appellate court also went on to
declare the inapplicability of the Courts pronouncement in MCIAA v. Court of Appeals, RTC,
Branch 9, Cebu City, Melba Limbago, et al.,[16] to support the Ouanos cause, since the
affected landowners in that case, unlike the Ouanos, parted with their property not through
expropriation but via a sale and purchase transaction.

The Ouanos filed a motion for reconsideration of the CAs Decision, but was denied
per the CAs May 26, 2005 Resolution.[17] Hence, they filed this petition in G.R. No. 168770.

The Issues

G.R. No. 168812

GROUNDS FOR ALLOWANCE OF THE PETITION

l. THE ASSAILED ISSUANCES ILLEGALLY STRIPPED THE REPUBLIC OF

ITS ABSOLUTE AND UNCONDITIONAL TITLE TO THE SUBJECT EXPROPRIATED
PROPERTIES.

ll. THE IMPUNGED DISPOSITIONS INVALIDLY OVERTURNED THIS

HONORABLE COURTS FINAL RULINGS IN FERY V. MUNICIPALITY OF
CABANATUAN, MCIAA V. COURT OF APPEALS AND REYES V. NATIONAL
HOUSING AUTHORITY.

lll. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THIS HONORABLE

COURTS RULING IN MORENO, ALBEIT IT HAS NOT YET ATTAINED FINALITY. [18]

G.R. No. 168770

Questions of law presented in this Petition

Whether or not the testimonial evidence of the petitioners proving the

promises, assurances and representations by the airport officials and lawyers
are inadmissbale under the Statute of Frauds.

Whether or not under the ruling of this Honorable Court in the heirs of Moreno
Case, and pursuant to the principles enunciated therein, petitioners herein are
entitiled to recover their litigated property.

Reasons for Allowances of this Petition

Respondents did not object during trial to the admissibility of petitioners

testimonial evidence under the Statute of Frauds and have thus waived such
objection and are now barred from raising the same. In any event, the Statute
of Frauds is not applicable herein. Consequently, petitioners evidence is
admissible and should be duly given weight and credence, as initially held by
the trial court in its original Decision.[19]
 CONSTI LAW188

While their respective actions against MCIAA below ended differently, the Ouanos and the
Inocians proffered arguments presented before this Court run along parallel lines, both
asserting entitlement to recover the litigated property on the strength of the Courts ruling
in Heirs of Moreno. MCIAA has, however, formulated in its Consolidated Memorandum the
key interrelated issues in these consolidated cases, as follows:
I
WHETHER ABANDONMENT OF THE PUBLIC USE FOR WHICH THE SUBJECT
PROPERTIES WERE EXPROPRIATED ENTITLES PETITIONERS OUANOS, ET AL.
AND RESPONDENTS INOCIAN, ET AL. TO REACQUIRE THEM.

II

WHETHER PETITIONERS OUANOS, ET AL. AND RESPONDENTS INOCIAN, ET AL.

ARE ENTITLED TO RECONVEYANCE OF THE SUBJECT PROPERTIES SIMPLY ON
THE BASIS OF AN ALLEGED VERBAL PROMISE OR ASSURANCE OF SOME NAC
OFFICIALS THAT THE SUBJECT PROPERTIES WILL BE RETUNRED IF THE
AIRPORT PROJECT WOULD BE ABANDONED.

The Courts Ruling

The Republic and MCIAAs petition in G.R. No. 168812 is bereft of merit, while the Ouano
petition in G.R. No. 168770 is meritorious.

At the outset, three (3) fairly established factual premises ought to be emphasized:

First, the MCIAA and/or its predecessor agency had not actually used the lots subject of the
final decree of expropriation in Civil Case No. R-1881 for the purpose they were originally
taken by the government, i.e., for the expansion and development of Lahug Airport.

Second, the Lahug Airport had been closed and abandoned. A significant portion of it
had, in fact, been purchased by a private corporation for development as a commercial
complex.[20]

Third, it has been preponderantly established by evidence that the NAC, through its
team of negotiators, had given assurance to the affected landowners that they would be
entitled to repurchase their respective lots in the event they are no longer used for airport
purposes.[21] No less than Asterio Uy, the Court noted in Heirs of Moreno, one of the
members of the CAA Mactan Legal Team, which interceded for the acquisition of the lots for
the Lahug Airports expansion, affirmed that persistent assurances were given to the
landowners to the effect that as soon as the Lahug Airport is abandoned or transferred to
Mactan, the lot owners would be able to reacquire their properties. [22] In Civil Case No. CEB-
20743, Exhibit G, the transcript of the deposition [23] of Anunciacion vda. de Ouano covering
the assurance made had been formally offered in evidence and duly considered in the initial
decision of the RTC Cebu City. In Civil Case No. CEB-18370, the trial court, on the basis of
testimonial evidence, and later the CA, recognized the reversionary rights of the suing
former lot owners or their successors in interest [24] and resolved the case accordingly. In
point with respect to the representation and promise of the government to return the lots
taken should the planned airport expansion do not materialize is what the Court said in Heirs
of Moreno, thus:
This is a difficult case calling for a difficult but just solution. To begin
with there exists an undeniable historical narrative that the predecessors
of respondent MCIAA had suggested to the landowners of the properties
covered by the Lahug Airport expansion scheme that they could repurchase
their properties at the termination of the airports venue. Some acted on this
 CONSTI LAW189

assurance and sold their properties; other landowners held out and waited for
the exercise of eminent domain to take its course until finally coming to terms
with respondents predecessors that they would not appeal nor block further
judgment of condemnation if the right of repurchase was extended to them. A
handful failed to prove that they acted on such assurance when they parted
with ownership of their land.[25] (Emphasis supplied; citations omitted.)

For perspective, Heirs of Morenolater followed by MCIAA v. Tudtud (Tudtud)[26] and the
consolidated cases at baris cast under the same factual setting and centered on the
expropriation of privately-owned lots for the public purpose of expanding
the Lahug Airport and the alleged promise of reconveyance given by the negotiating NAC
officials to the private lot owners. All the lots being claimed by the former owners or
successors-in-interest of the former owners in the Heirs of Moreno, Tudtud, and the
present cases were similarly adjudged condemned in favor of the Republic in Civil Case No.
R-1881. All the claimants sought was or is to have the condemned lots reconveyed to them
upon the payment of the condemnation price since the public purpose of the expropriation
was never met. Indeed, the expropriated lots were never used and were, in fact, abandoned
by the expropriating government agencies.
In all then, the issues and supporting arguments presented by both sets of petitioners
in these consolidated cases have already previously been passed upon, discussed at length,
and practically peremptorily resolved in Heirs of Moreno and the November
2008 Tudtud ruling. The Ouanos, as petitioners in G.R. No. 168770, and the Inocians, as
respondents in G.R. No. 168812, are similarly situated as the heirs of Moreno in Heirs of
Moreno and Benjamin Tudtud in Tudtud. Be that as it may, there is no reason why the ratio
decidendi in Heirs of Moreno and Tudtud should not be made to apply to petitioners Ouanos
and respondents Inocians such that they shall be entitled to recover their or their
predecessors respective properties under the same manner and arrangement as the heirs
of Moreno and Tudtud. Stare decisis et non quieta movere (to adhere to precedents, and not
to unsettle things which are established).[27]

Just like in Tudtud and earlier in Heirs of Moreno, MCIAA would foist the theory that the
judgment of condemnation in Civil Case No. R-1881 was without qualification and was
unconditional. It would, in fact, draw attention to the fallo of the expropriation courts
decision to prove that there is nothing in the decision indicating that the government gave
assurance or undertook to reconvey the covered lots in case the Lahug airport expansion
project is aborted. Elaborating on this angle, MCIAA argues that the claim of the Ouanos and
the Inocians regarding the alleged verbal assurance of the NAC negotiating team that they
can reacquire their landholdings is barred by the Statute of Frauds. [28]

Under the rule on the Statute of Frauds, as expressed in Article 1403 of the Civil
Code, a contract for the sale or acquisition of real property shall be unenforceable unless the
same or some note of the contract be in writing and subscribed by the party charged.
Subject to defined exceptions, evidence of the agreement cannot be received without the
writing, or secondary evidence of its contents.

MCIAAs invocation of the Statute of Frauds is misplaced primarily because the statute
applies only to executory and not to completed, executed, or partially consummated
contracts.[29] Carbonnel v. Poncio, et al., quoting Chief Justice Moran, explains the rationale
behind this rule, thusly:

x x x The reason is simple. In executory contracts there is a wide field for

fraud because unless they may be in writing there is no palpable evidence of
the intention of the contracting parties. The statute has been precisely been
enacted to prevent fraud. x x x However, if a contract has been totally or
 CONSTI LAW190

partially performed, the exclusion of parol evidence would promote fraud or

bad faith, for it would enable the defendant to keep the benefits already
derived by him from the transaction in litigation, and at the same time, evade
the obligations, responsibilities or liabilities assumed or contracted by him
thereby.[30] (Emphasis in the original.)

Analyzing the situation of the cases at bar, there can be no serious objection to the
proposition that the agreement package between the government and the private lot owners
was already partially performed by the government through the acquisition of the lots for
the expansion of the Lahug airport. The parties, however, failed to accomplish the more
important condition in the CFI decision decreeing the expropriation of the lots litigated upon:
the expansion of the LahugAirport. The projectthe public purpose behind the forced property
takingwas, in fact, never pursued and, as a consequence, the lots expropriated were
abandoned. Be that as it may, the two groups of landowners can, in an action to compel
MCIAA to make good its oral undertaking to allow repurchase, adduce parol evidence to
prove the transaction.

At any rate, the objection on the admissibility of evidence on the basis of the Statute
of Frauds may be waived if not timely raised. Records tend to support the conclusion that
MCIAA did not, as the Ouanos and the Inocians posit, object to the introduction of parol
evidence to prove its commitment to allow the former landowners to repurchase their
respective properties upon the occurrence of certain events.

In a bid to deny the lot owners the right to repurchase, MCIAA, citing cases, [31] points
to the dispositive part of the decision in Civil Case R-1881 which, as couched, granted the
Republic absolute title to the parcels of land declared expropriated. The MCIAA is correct
about the unconditional tone of the dispositive portion of the decision, but that actuality
would not carry the day for the agency. Addressing the matter of the otherwise absolute
tenor of the CFIs disposition in Civil Case No. R-1881, the Court, in Heirs of Moreno, after
taking stock of the ensuing portion of the body of the CFIs decision, said:

As for the public purpose of the expropriation proceeding, it cannot now be

doubted. Although Mactan Airport is being constructed, it does not take away
the actual usefulness and importance of the Lahug Airport: it is handling the
air traffic of both civilian and military. From it aircrafts fly to Mindanao and
Visayas and pass thru it on their flights to the North and Manila. Then, no
evidence was adduced to show how soon is the Mactan Airport to be placed in
operation and whether the Lahug Airport will be closed immediately
thereafter. It is up to the other departments of the Government to determine
said matters. The Court cannot substitute its judgments for those of the said
departments or agencies.In the absence of such showing, the court will
presume that the Lahug Airport will continue to be in operation.
[32]
(Emphasis supplied.)

We went on to state as follows:

While the trial court in Civil Case No. R-1881 could have simply acknowledged
the presence of public purpose for the exercise of eminent domain regardless
of the survival of the Lahug Airport, the trial court in its Decision chose not to
do so but instead prefixed its finding of public purpose upon its understanding
that Lahug Airport will continue to be in operation. Verily, these meaningful
statements in the body of the Decision warrant the conclusion that the
expropriated properties would remain to be so until it was confirmed
 CONSTI LAW191

that Lahug Airport was no longer in operation. This inference further implies
two (2) things: (a) after the Lahug Airport ceased its undertaking as such and
the expropriated lots were not being used for any airport expansion project,
the rights vis--vis the expropriated lots x x x as between the State and their
former owners, petitioners herein, must be equitably adjusted; and (b) the
foregoing unmistakable declarations in the body of the Decision should merge
with and become an intrinsic part of the fallo thereof which under the
premises is clearly inadequate since the dispositive portion is not in accord
with the findings as contained in the body thereof.[33]

Not to be overlooked of course is what the Court said in its Resolution disposing of
MCIAAs motion to reconsider the original ruling in Heirs of Moreno. In that resolution, We
stated that the fallo of the decision in Civil Case R-1881 should be viewed and understood in
connection with the entire text, which contemplated a return of the property taken if the
airport expansion project were abandoned. For ease of reference, following is what the Court
wrote:

Moreover, we do not subscribe to the [MCIAAs] contention that since

the possibility of the Lahug Airports closure was actually considered by the
trial court, a stipulation on reversion or repurchase was so material that it
should not have been discounted by the court a quo in its decision in Civil
Case No. R-1881, if, in fact, there was one. We find it proper to cite, once
more, this Courts ruling that the fallo of the decision in Civil Case No. R-1881
must be read in reference to the other portions of the decision in which it
forms a part. A reading of the Courts judgment must not be confined to the
dispositive portion alone; rather it should be meaningfully construed in
unanimity with the ratio decidendi thereof to grasp the true intent and
meaning of a decision.[34]

The Court has, to be sure, taken stock of Fery v. Municipality of Cabanatuan,[35] a case MCIAA
cites at every possible turn, where the Court made these observations:

If, for example, land is expropriated for a particular purpose, with the
condition that when that purpose is ended or abandoned the property shall
return to its former owner, then of course, when the purpose is terminated or
abandoned, the former owner reacquires the property so expropriated. x x x If,
upon the contrary, however the decree of expropriation gives to the entity a
fee simple title, then, of course, the land becomes the absolute property of
the expropriator x x x and in that case the non-user does not have the effect
of defeating the title acquired by the expropriation proceedings x x x.

Fery notwithstanding, MCIAA cannot really rightfully say that it has absolute title to the lots
decreed expropriated in Civil Case No. R-1881. The correct lesson of Fery is captured by
what the Court said in that case, thus: the government acquires only such rights in
expropriated parcels of land as may be allowed by the character of its title over the
properties. In light of our disposition in Heirs of Moreno and Tudtud, the statement
immediately adverted to means that in the event the particular public use for which a parcel
of land is expropriated is abandoned, the owner shall not be entitled to recover or
repurchase it as a matter of right, unless such recovery or repurchase is expressed in
or irresistibly deducible from the condemnation judgment. But as has been
determined below, the decision in Civil Case No. R-1881 enjoined MCIAA, as a condition of
approving expropriation, to allow recovery or repurchase upon abandonment of the Lahug
airport project. To borrow from our underlying decision in Heirs of Moreno, [n]o doubt, the
return or repurchase of the condemned properties of petitioners could readily be justified as
the manifest legal effect of consequence of the trial courts underlying presumption
 CONSTI LAW192

that Lahug Airport will continue to be in operation when it granted the complaint for eminent
domain and the airport discontinued its activities.[36]

Providing added support to the Ouanos and the Inocians right to repurchase is what in Heirs
of Moreno was referred to as constructive trust, one that is akin to the implied
trust expressed in Art. 1454 of the Civil Code, [37] the purpose of which is to prevent unjust
enrichment.[38] In the case at bench, the Ouanos and the Inocians parted with their
respective lots in favor of the MCIAA, the latter obliging itself to use the realties for the
expansion of Lahug Airport; failing to keep its end of the bargain, MCIAA can be compelled
by the former landowners to reconvey the parcels of land to them, otherwise, they would be
denied the use of their properties upon a state of affairs that was not conceived nor
contemplated when the expropriation was authorized. In effect, the government merely held
the properties condemned in trust until the proposed public use or purpose for which the lots
were condemned was actually consummated by the government. Since the government
failed to perform the obligation that is the basis of the transfer of the property, then the lot
owners Ouanos and Inocians can demand the reconveyance of their old properties after the
payment of the condemnation price.

Constructive trusts are fictions of equity that courts use as devices to remedy any situation
in which the holder of the legal title, MCIAA in this case, may not, in good conscience, retain
the beneficial interest. We add, however, as in Heirs of Moreno, that the party seeking the
aid of equitythe landowners in this instance, in establishing the trustmust himself do equity
in a manner as the court may deem just and reasonable.

The Court, in the recent MCIAA v. Lozada, Sr., revisited and abandoned the Fery ruling that
the former owner is not entitled to reversion of the property even if the public purpose were
not pursued and were abandoned, thus:

On this note, we take this opportunity to revisit our ruling in Fery,

which involved an expropriation suit commenced upon parcels of land to be
used as a site for a public market. Instead of putting up a public market,
respondent Cabanatuan constructed residential houses for lease on the area.
Claiming that the municipality lost its right to the property taken since it did
not pursue its public purpose, petitioner Juan Fery, the former owner of the
lots expropriated, sought to recover his properties. However, as he had
admitted that, in 1915, respondent Cabanatuan acquired a fee simple title to
the lands in question, judgment was rendered in favor of the municipality,
following American jurisprudence, particularly City of Fort Wayne v. Lake
Shore & M.S. RY. Co., McConihay v. Theodore Wright, and Reichling v.
Covington Lumber Co., all uniformly holding that the transfer to a third party
of the expropriated real property, which necessarily resulted in the
abandonment of the particular public purpose for which the property was
taken, is not a ground for the recovery of the same by its previous owner, the
title of the expropriating agency being one of fee simple.

Obviously, Fery was not decided pursuant to our now sacredly held
constitutional right that private property shall not be taken for public use
without just compensation. It is well settled that the taking of private property
by the Governments power of eminent domain is subject to two mandatory
requirements: (1) that it is for a particular public purpose; and (2) that just
compensation be paid to the property owner. These requirements partake of
the nature of implied conditions that should be complied with to enable the
condemnor to keep the property expropriated.
 CONSTI LAW193

More particularly, with respect to the element of public use,

the expropriator should commit to use the property pursuant to the
purpose stated in the petition for expropriation filed, failing which, it
should file another petition for the new purpose. If not, it is then
incumbent upon the expropriator to return the said property to its
private owner, if the latter desires to reacquire the same. Otherwise,
the judgment of expropriation suffers an intrinsic flaw, as it would lack one
indispensable element for the proper exercise of the power of eminent
domain, namely, the particular public purpose for which the property will be
devoted. Accordingly, the private property owner would be denied due
process of law, and the judgment would violate the property owners right to
justice, fairness, and equity.

In light of these premises, we now expressly hold that the taking of

private property, consequent to the Governments exercise of its power of
eminent domain, is always subject to the condition that the property be
devoted to the specific public purpose for which it was taken. Corollarily, if this
particular purpose or intent is not initiated or not at all pursued, and is
peremptorily abandoned, then the former owners, if they so desire, may seek
the reversion of the property, subject to the return of the amount of just
compensation received. In such a case, the exercise of the power of eminent
domain has become improper for lack of the required factual justification.
[39]
(Emphasis supplied.)

Clinging to Fery, specifically the fee simple concept underpinning it, is no longer compelling,
considering the ensuing inequity such application entails. Too, the Court resolved Fery not
under the cover of any of the Philippine Constitutions, each decreeing that private property
shall not be taken for public use without just compensation. The twin elements of just
compensation and public purpose are, by themselves, direct limitations to the exercise of
eminent domain, arguing, in a way, against the notion of fee simple title. The fee does not
vest until payment of just compensation.[40]
In esse, expropriation is forced private property taking, the landowner being really without a
ghost of a chance to defeat the case of the expropriating agency. In other words, in
expropriation, the private owner is deprived of property against his will. Withal, the
mandatory requirement of due process ought to be strictly followed, such that the state
must show, at the minimum, a genuine need, an exacting public purpose to take private
property, the purpose to be specifically alleged or least reasonably deducible from the
complaint.

Public use, as an eminent domain concept, has now acquired an expansive meaning to
include any use that is of usefulness, utility, or advantage, or what is productive of general
benefit [of the public].[41] If the genuine public necessitythe very reason or condition as it
wereallowing, at the first instance, the expropriation of a private land ceases or disappears,
then there is no more cogent point for the governments retention of the expropriated land.
The same legal situation should hold if the government devotes the property to another
public use very much different from the original or deviates from the declared purpose to
benefit another private person. It has been said that the direct use by the state of its power
to oblige landowners to renounce their productive possession to another citizen, who will use
it predominantly for that citizens own private gain, is offensive to our laws. [42]

A condemnor should commit to use the property pursuant to the purpose stated in
the petition for expropriation, failing which it should file another petition for the new
purpose. If not, then it behooves the condemnor to return the said property to its private
owner, if the latter so desires. The government cannot plausibly keep the property it
 CONSTI LAW194

expropriated in any manner it pleases and, in the process, dishonor the judgment of
expropriation. This is not in keeping with the idea of fair play,

The notion, therefore, that the government, via expropriation proceedings, acquires
unrestricted ownership over or a fee simple title to the covered land, is no longer tenable.
We suggested as much in Heirs of Moreno and in Tudtud and more recently in Lozada, Sr.
Expropriated lands should be differentiated from a piece of land, ownership of which was
absolutely transferred by way of an unconditional purchase and sale contract freely entered
by two parties, one without obligation to buy and the other without the duty to sell. In that
case, the fee simple concept really comes into play. There is really no occasion to apply the
fee simple concept if the transfer is conditional. The taking of a private land in expropriation
proceedings is always conditioned on its continued devotion to its public purpose. As a
necessary corollary, once the purpose is terminated or peremptorily abandoned, then the
former owner, if he so desires, may seek its reversion, subject of course to the return, at the
very least, of the just compensation received.
To be compelled to renounce dominion over a piece of land is, in itself, an already
bitter pill to swallow for the owner. But to be asked to sacrifice for the common good and
yield ownership to the government which reneges on its assurance that the private property
shall be for a public purpose may be too much. But it would be worse if the power of
eminent domain were deliberately used as a subterfuge to benefit another with influence
and power in the political process, including development firms. The mischief thus depicted
is not at all far-fetched with the continued application of Fery. Even as the Court deliberates
on these consolidated cases, there is an uncontroverted allegation that the MCIAA is poised
to sell, if it has not yet sold, the areas in question to Cebu Property Ventures, Inc. This
provides an added dimension to abandon Fery.

Given the foregoing disquisitions, equity and justice demand the reconveyance by
MCIAA of the litigated lands in question to the Ouanos and Inocians. In the same token,
justice and fair play also dictate that the Ouanos and Inocian return to MCIAA what they
received as just compensation for the expropriation of their respective properties plus legal
interest to be computed from default, which in this case should run from the time MCIAA
complies with the reconveyance obligation. [43] They must likewise pay MCIAA the necessary
expenses it might have incurred in sustaining their respective lots and the monetary value of
its services in managing the lots in question to the extent that they, as private owners, were
benefited thereby.

In accordance with Art. 1187 of the Civil Code on mutual compensation, MCIAA may
keep whatever income or fruits it may have obtained from the parcels of land expropriated.
In turn, the Ouanos and Inocians need not require the accounting of interests earned by the
amounts they received as just compensation. [44]

Following Art. 1189 of the Civil Code providing that [i]f the thing is improved by
its nature, or by time, the improvement shall inure to the benefit of the creditor x
x x, the Ouanos and Inocians do not have to settle the appreciation of the values of their
respective lots as part of the reconveyance process, since the value increase is merely the
natural effect of nature and time.

Finally, We delete the award of PhP 50,000 and PhP 10,000, as attorneys fees and
litigation expenses, respectively, made in favor of the Inocians by the Cebu City RTC in its
judgment in Civil Case No. CEB-18370, as later affirmed by the CA. As a matter of sound
policy, no premium should be set on the right to litigate where there is no doubt about
the bona fides of the exercise of such right, [45] as here, albeit the decision of MCIAA to resist
the former landowners claim eventually turned out to be untenable.
 CONSTI LAW195

WHEREFORE, the petition in G.R. No. 168770 is GRANTED. Accordingly, the CA

Decision dated September 3, 2004 in CA-G.R. CV No. 78027 is REVERSED and SET ASIDE.
Mactan-Cebu International Airport Authority is ordered to reconvey subject Lot No. 763-A to
petitioners Anunciacion vda. de Ouano, Mario P. Ouano, Leticia Ouano Arnaiz, and Cielo
Ouano Martinez. The Register of Deeds of Cebu City is ordered to effect the necessary
cancellation of title and transfer it in the name of the petitioners within fifteen (15) days
from finality of judgment.
The petition of the Mactan-Cebu International Airport Authority in G.R. No.
168812 is DENIED, and the CAs Decision and Resolution dated January 14, 2005 and June
29, 2005, respectively, in CA-G.R. CV No. 64356 are AFFIRMED, except insofar as they
awarded attorneys fees and litigation expenses that are hereby DELETED. Accordingly,
Mactan-Cebu International Airport Authority is ordered to reconvey to respondents Ricardo L.
Inocian, Olympia E. Esteves, Emilia E. Bacalla, Restituta E. Montana, and Raul L. Inocian the
litigated Lot Nos. 744-A, 745-A, 746, 762-A, 747, and 761-A; and to respondents Aletha Suico
Magat, Philip M. Suico, Dolores S. dela Cruz, James M. Suico, Edward M. Suico, Roselyn S.
Lawsin, Rex M. Suico, and Kharla Suico-Gutierrez the litigated Lot Nos. 942 and 947. The
Register of Deeds of Cebu City is ordered to effect the necessary cancellation of title and
transfer it in the name of respondents within a period of fifteen (15) days from finality of
judgment.

The foregoing dispositions are subject to QUALIFICATIONS, to apply to these

consolidated petitions, when appropriate, as follows:

(1) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L
Inocian, et al. in G.R. No. 168812 are ordered to return to the MCIAA the just compensation
they or their predecessors-in-interest received for the expropriation of their respective lots
as stated in Civil Case No. R-1881, within a period of sixty (60) days from finality of
judgment;

(2) The MCIAA shall be entitled to RETAIN whatever fruits and income it may have
obtained from the subject expropriated lots without any obligation to refund the same to the
lot owners; and

(3) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L. Inocian, et
al. in G.R. No. 168812 shall RETAIN whatever interests the amounts they received as just
compensation may have earned in the meantime without any obligation to refund the same
to MCIAA.
SO ORDERED.