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METROPOLITAN MANILA DEVELOPMENT AUTHORITY, Petitioner,
G.R. No. 179554 Present: PUNO, C.J., Chairperson, CARPIO LEONARDO-DE CASTRO, BERSAMIN, and VILLARAMA, JR., JJ.
TRACKWORKS RAIL TRANSIT ADVERTISING, VENDING Promulgated: AND PROMOTIONS, INC., Respondent. December 16, 2009 x-----------------------------------------------------------------------------------------x
RESOLUTION BERSAMIN, J.: This case concerns whether the Metropolitan Manila Development Authority (MMDA) could unilaterally dismantle the billboards, signages and other advertizing media in the structures of the Metro Rail Transit 3 (MRT3) installed by respondent advertising company by virtue of its existing contract with the owner of the MRT3. The trial and appellate courts ruled that MMDA did not have the authority to dismantle. MMDA is now before the Court to assail such adverse ruling.
Antecedents In 1997, the Government, through the Department of Transportation and Communications, entered into a build-lease-transfer agreement (BLT agreement) with Metro Rail Transit Corporation, Limited (MRTC) pursuant to Republic Act No. 6957 (Build, Operate and Transfer Law), under which MRTC undertook to build MRT3 subject to the condition that MRTC would own MRT3 for 25 years, upon the expiration of which the ownership would transfer to the Government. The BLT agreement stipulated, among others, that MRTC could build and develop commercial premises in the MRT3 structures, or obtain advertising income therefrom,viz:
16.1. Details of Development Rights. DOTC hereby confirms and awards to Metro Rail the rights to (a) develop commercial premises in the Depot and the air space above the Stations, which shall be allowed to such height as is legally and technically feasible, (b) lease or sub-lease interests or assign such interests in the Depot and such air space and (c) obtain any advertising income from the Depot and such air space and LRTS Phase I…. ―LRTS Phase I‖ means the rail transport system comprising about 16.9 line kilometers extending from Taft Avenue, Pasay City, to North Avenue, Quezon City, occupying a strip in the center of EDSA approximately 10.5 meters wide (approximately 12 meters wide at or around the Boni Avenue, Santolan and Buendia Stations), plus about 0.1 to 0.2 line kilometers extending from the North Avenue Station to the Depot, together with the Stations, 73 Light Rail Vehicles and all ancillary plant, equipment and facilities, as more particularly detailed in the Specifications. 16.2. Assignment of Rights. During the Development Rights Period, Metro Rail shall be entitled to assign all or any of its rights, titles and interests in the Development Rights to bona fide real estate developers. In this connection, Metro Rail may enter into such development, lease, sub-lease or other agreements or contracts relating to the Depot and the air space above the Stations (the space not needed for all or any portion of the operation of the LRTS) for all or any portion of the Development Rights Period….
In 1998, respondent Trackworks Rail Transit Advertising, Vending & Promotions, Inc. (Trackworks) entered into a contract for advertising services with MRTC. Trackworks thereafter installed commercial billboards, signages and other
advertizing media in the different parts of the MRT3. In 2001, however, MMDA requested Trackworks to dismantle the billboards, signages and other advertizing media pursuant to MMDA Regulation No. 96-009, whereby MMDA prohibited the posting, installation and display of any kind or form of billboards, signs, posters, streamers, in any part of the road, sidewalk, center island, posts, trees, parks and open space. After Trackworks refused the request of MMDA, MMDA proceeded to dismantle the former’s billboards and similar forms of advertisement. On March 1, 2002, Trackworks filed against MMDA in the Regional Trial Court (RTC) in Pasig City an injunction suit (with prayer for the issuance of a temporary restraining order [TRO] and preliminary injunction), docketed as Civil Case No. 68864. On March 6, 2002, the RTC (Branch 155) issued a TRO, enjoining MMDA from dismantling or destroying Trackworks’ billboards, signages and other advertizing media. On March 25, 2002, the RTC issued a writ of preliminary injunction for the same purpose. Without filing a motion for reconsideration to challenge the RTC’s issuances, MMDA brought a petition for certiorari and prohibition before the Court of Appeals (CA), docketed as C.A.-G.R. SP No. 70932, but the CA denied the petition and affirmed the RTC on August 31, 2004. The CA ultimately denied MMDA’s motion for reconsiderationthrough its resolution issued on March 14, 2005. Thence, MMDA appealed to this Court (G.R. No. 167514), which denied MMDA’s petition for review on October 25, 2005. Ruling of the RTC In the meanwhile, on October 10, 2005, the RTC (Branch 155) rendered its decision permanently enjoining MMDA from dismantling, removing or destroying the billboards, signages and other advertizing media installed by Trackworks on the interior and exterior structures of the MRT3.
the CA denied the MMDA’s appeal. therefore. progress and projects for the use of thoroughfares and the promotion of safe and convenient movement of persons and goods prompted its issuance of MMDA Regulation No. this appeal by petition for review. Issues MMDA claims that its mandate under its charter of formulating. 2007. ) It is unlawful for any person/s. movie producers. and. the development of the MRT3 remained subject to . which reads in part: h. center island. private or public corporations. that the Government’s grant of development rights to MRTC was not an abdication of its right to regulate. and that MMDA had no power to dismantle. MMDA avers that the conversion of the center island of Epifanio Delos Santos Avenue (EDSA) into the carriageway of the MRT3 line did not exempt the EDSA center island from the coverage of the MMDA regulation. display any kind or form of billboards.Ruling of the CA MMDA appealed the RTC’s decision to the CA. posters. On April 30. holding that Trackworks’ right to install billboards. remove or destroy Trackworks’ billboards. advertising and promotions companies. but the CA resolution denied the motion for reconsideration on September 3. signages and other advertizing media on the interior and exterior structures of the MRT3 must be protected by a writ of permanent injunction. signs. trees parks and open space. signages and other advertizing media. professionals and service contractors to post. Hence. streamers. professional service advertisements and other visual clutters in any part of the road. install. posts. standards. coordinating and monitoring of policies. sidewalk. 96-009. 2007. MMDA moved for reconsideration.
 and that the interests of a few should not prevail over the good of the greater number in the community whose safety and general welfare MMDA was mandated to protect. MRTC owned the MRT3 for 25 years. this Court expressly recognized Trackworks’ right to install the billboards. That Trackworks derived its right to install its billboards. on the other hand. Trackworks Rail Transit Advertising. Under the BLT agreement. 2007 was valid and correct. upon the expiration of which MRTC would transfer ownership of the MRT3 to the Government. ordinances. signages and other advertizing media in the MRT3 from MRTC’s authority under the BLT agreement to develop commercial premises in the MRT3 structure or to obtain advertising income therefrom is no longer debatable. signages and other advertising media. be respected.all existing and applicable national and local laws. Trackworks maintains. rules and regulations. that Trackworks’ advertising materials were placed indiscriminately and without due regard to safety. in Metropolitan Manila Development Authority v. . signages and other advertising media pursuant to said contract. indeed. In fact. that MMDA was merely implementing existing and applicable laws. Vending & Promotions. Ruling of the Court The petition has no merit. The latter’s right should. It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of Trackworks’ billboards. therefore. MRTC’s entering into the contract for advertising services with Trackworks was a valid exercise of ownership by the former. and until this date. and that the CA’s decision dated April 30. Inc. and as such might be classified as obstructions and distractions to the motorists traversing EDSA.. Considering that MRTC remained to be the owner of the MRT3 during the time material to this case. that MMDA’s petition was defective for its failure to raise any genuine question of law.
but MRT3. Viron Transportation Co. let alone legislative power. installation and display of billboards. signages and other advertising media in MRT3. remove. viz: Sec. Nothing in Republic Act No. 88-09 did not apply to Trackworks’ billboards. . and in the process exercise regulatory and supervisory authority over the delivery of metro-wide services within Metro Manila. a ―development authority‖. implementation. Clearly. Clarifying the real nature of MMDA. Bel-Air Village Association. the Court had the occasion to rule that MMDA’s powers were limited to the formulation. signages and other advertising media installed on the MRT3 structure by Trackworks.. installing a system. signages and other advertising media. All its functions are administrative in nature and these are actually summed up in the charter itself. or destroy the billboards. The MMDA shall perform planning. 7924 granted MMDA police power. It is an agency created for the purpose of laying down policies and coordinating with the various national government agencies.MMDA simply had no power on its own to dismantle. Creation of the Metropolitan Manila Development Authority. preparation. and because it was issued a year prior to the construction of MRT3 on the center island of EDSA. 88-09 did not apply to Trackworks’ billboards. management. being private property pursuant to the BLT agreement between the Government and MRTC. without diminution of the autonomy of local government units concerning purely local matters. coordination.. monitoring. setting of policies. In Metropolitan Manila Development Authority v. 96009 and MMC Memorandum Circular No. nongovernmental organizations and the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area. Inc.xxx. and Metropolitan Manila Development Authority v.2. because it did not specifically cover MRT3. The prohibition against posting. Inc. Garin. and administration. was not one of the areas as to which the prohibition applied. MMC Memorandum Circular No. monitoring and coordinative functions.. The Court also agrees with the CA’s ruling that MMDA Regulation No. people’s organizations. the Court held: xxx The MMDA is. as termed in the charter itself. signages and other advertising media applied only to public areas. regulation. Moreover. Metropolitan Manila Development Authority v..
88-09 could not have included MRT3 in its prohibition.‖ There is also no evidence showing that MMDA had been delegated by DPWH to implement the Building Code. Responsibility for Administration and Enforcement. WHEREFORE. The power to enforce the provisions of the Building Code was lodged in the Department of Public Works and Highways (DPWH). thus: Sec. we deny the petition for review. 2007 and the resolution dated September 3. – The administration and enforcement of the provisions of this Code including the imposition of penalties for administrative violations thereof is hereby vested in the Secretary of Public Works. BERSAMIN Associate Justice WE CONCUR: . not in MMDA. 2007. 1096 (Building Code) and its implementing rules and regulations is not persuasive. hereinafter referred to as the ―Secretary. and affirm the decision dated April 30. considering the law’s following provision. LUCAS P. 201. Transportation and Communications. Costs against the petitioner. MMDA’s insistence that it was only implementing Presidential Decree No. SO ORDERED.MMC Memorandum Circular No.
REYNATO S. Article VIII of the Constitution.REYNATO S. VILLARAMA. Associate Justice CERTIFICATION Pursuant to Section 13. PUNO Chief Justice Chairperson CONCHITA CARPIO MORALES TERESITA J. LEONARDO-DE CASTRO Associate Justice Associate Justice MARTIN S. JR. PUNO Chief Justice . I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
represented by DE CASTRO. as well as pro-rated or "wash up" rates for such abbreviated stays. The petition at bar assails a similarly-motivated city ordinance that prohibits those same establishments from offering short-time admission.. vs. November 15. 2009 WHITE LIGHT CORPORATION. J. CITY OF MANILA. Jr.1 the Court affirmed the nullification of a city ordinance barring the operation of motels and inns.R. 2012 Search Republic of the Philippines SUPREME COURT Manila EN BANC G. the Court is confronted anew with the incessant clash between government power and individual liberty in tandem with the archetypal tension between law and morality. DECISION Tinga. Respondent. MAYOR ALFREDO S. Laguio. MESA TOURIST & DEVELOPMENT CORPORATION. within the Ermita-Malate area. In City of Manila v.: With another city ordinance of Manila also principally involving the tourist district as subject. among other establishments. LIM. due process . TITANIUM CORPORATION and STA. Our earlier decision tested the city ordinance against our sacred constitutional rights to liberty. Petitioners.lawphil Today is Thursday. 122846 January 20. No.
Short-time admission shall mean admittance and charging of room rate for less than twelve (12) hours at any given time or the renting out of rooms more than twice a day or any other term that may be concocted by owners or managers of said establishments but would mean the same or would bear the same meaning. It is hereby the declared policy of the City Government to protect the best interest. The facts are as follows: On December 3. I. petitioners White Light Corporation (WLC). lodging houses. the president. and Wash-Up Rate Schemes in Hotels. the business license of the guilty party shall automatically be cancelled. challenges the validity of Manila City Ordinance No. No. the Malate Tourist and Development Corporation (MTDC) filed a complaint for declaratory relief with prayer for a writ of preliminary injunction and/or temporary restraining order ( TRO)5 with the Regional Trial Court (RTC) of Manila. Title. This ordinance shall take effect immediately upon approval. 1992.) No. SEC. SEC. wash-up rate or other similarly concocted terms. and Similar Establishments in the City of Manila" (the Ordinance).4 The Ordinance is reproduced in full. hereunder: SECTION 1. 6. On December 21. Motels. Lodging Houses. The same parameters apply to the present petition. 1992. motels. short-time admission and rate [sic]. This Petition2 under Rule 45 of the Revised Rules on Civil Procedure. further. Any person or corporation who shall violate any provision of this ordinance shall upon conviction thereof be punished by a fine of Five Thousand (P5. Repealing Clause. 7. Short-Time Admission Rates. 1992. which seeks the reversal of the Decision3 in C. inns.and equal protection of law.00) Pesos or imprisonment for a period of not exceeding one (1) year or both such fine and imprisonment at the discretion of the court. Pension Houses. Pursuant to the above policy. health and welfare.A. SEC. 3. pension houses and similar establishments in the City of Manila. Enacted by the city Council of Manila at its regular session today. Definition of Term[s]. Provided. SEC. Any or all provisions of City ordinances not consistent with or contrary to this measure or any portion hereof are hereby deemed repealed. November 10. 259 to admit customers on a short time basis as well as to charge customers wash up rates for stays of only three hours. herein respondent City of Manila (the City) represented by Mayor Lim. the Mayor on December 3.-G.6 MTDC prayed that the Ordinance. S. Inns. and the morality of its constituents in general and the youth in particular. Lim (Mayor Lim) signed into law the Ordinance. Mesa Tourist and . are hereby prohibited in hotels. 1992. 1992. Branch 9 impleading as defendant.000. 4. Effectivity. or the persons in charge of the operation thereof shall be liable: Provided. "An Ordinance Prohibiting Short-Time Admission. City Mayor Alfredo S. insofar as it includes motels and inns as among its prohibited establishments. SEC.P. Approved by His Honor. motels. On December 15. Titanium Corporation (TC) and Sta. Penalty Clause. 2. lodging houses.D. pension houses and similar establishments in the City of Manila. Manila it was authorized by Presidential Decree (P. That in case of subsequent conviction for the same offense. 5. SEC. This ordinance shall be known as "An Ordinance" prohibiting short time admission in hotels. That in case of [a] juridical person. 7774 entitled. be declared invalid and unconstitutional. Declaration of Policy. 33316 of the Court of Appeals.R. MTDC claimed that as owner and operator of the Victoria Court in Malate. the manager.
1993.20 The petition was docketed as G. During the pre-trial conference. is also a valid exercise of the power of the City under Article III. 1992. 1994.13 The City filed an Answer dated January 22. The City later filed a petition for review on certiorari with the Supreme Court. thus: "to enact all ordinances it may deem necessary and proper for the sanitation and safety. on March 8. the WLC. operation and maintenance of cafes. good order. [O]rdinance No. as well as the right to operate economic enterprises. 112471. However in a resolution dated January 26. the RTC granted MTDC's motion to withdraw.9 On December 23. in view of all the foregoing. the preliminary injunction heretofor issued is hereby made permanent.11 On December 28. beerhouses. 7774 of the City of Manila is hereby declared null and void. The dispositive portion of the decision reads: WHEREFORE. the RTC issued a writ of preliminary injunction ordering the city to desist from the enforcement of the Ordinance. among other local government units."18 Reference was made to the provisions of the Constitution encouraging private enterprises and the incentive to needed investment. comfort. the RTC likened the law to the ordinance annulled in Ynot v. the RTC rendered a decision declaring the Ordinance null and void.23 . restaurants. and such others as be necessary to carry into effect and discharge the powers and duties conferred by this Chapter.19 where the legitimate purpose of preventing indiscriminate slaughter of carabaos was sought to be effected through an inter-province ban on the transport of carabaos and carabeef. the RTC granted the motion to intervene. MTDC moved to withdraw as plaintiff.16 On October 20.14 On February 8.17 The RTC noted that the ordinance "strikes at the personal liberty of the individual guaranteed and jealously guarded by the Constitution.12 The RTC issued a TRO on January 14. 1993. 1993. Accordingly. Section 4 of the Rules of Court.22 The Ordinance.8 The three companies are components of the Anito Group of Companies which owns and operates several hotels and motels in Metro Manila. peace. convenience and general welfare of the city and its inhabitants. Intermediate Appellate Court. or both such fine and imprisonment for a single offense. SO ORDERED. hotels. pension houses. lodging houses and other similar establishments. inns. 1993 alleging that the Ordinance is a legitimate exercise of police power. motels. including tourist guides and transports. the Solicitor General filed his Comment arguing that the Ordinance is constitutional. 1993.10 The RTC also notified the Solicitor General of the proceedings pursuant to then Rule 64. the City asserted that the Ordinance is a valid exercise of police power pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities. the Court treated the petition as a petition forcertiorari and referred the petition to the Court of Appeals. directing the City to cease and desist from enforcing the Ordinance.Development Corporation (STDC) filed a motion to intervene and to admit attached complaint-in-intervention7 on the ground that the Ordinance directly affects their business interests as operators of drive-in-hotels and motels in Manila. On the same date. 1992. Finally. from the observation that the illicit relationships the Ordinance sought to dissuade could nonetheless be consummated by simply paying for a 12-hour stay. and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos fine or six months imprisonment. it is argued. Section 18(kk) of the Revised Manila Charter.R.21 Before the Court of Appeals.15 A month later. No. the power: [To] regulate the establishment. the furtherance of the prosperity and the promotion of the morality. TC and STDC agreed to submit the case for decision without trial as the case involved a purely legal question.
26 sparing as it does unnecessary interference or invalidation by the judicial branch of the actions rendered by its co-equal branches of government. petitioners also allege that the equal protection rights of their clients are also being interfered with. especially in the Philippines. They rely on the patronage of their customers for their continued viability which appears to be threatened by the enforcement of the Ordinance. Connecticut. it is clear that the business interests of the petitioners are likewise injured by the Ordinance.29 In a similar vein. In Griswold v. They contend that the assailed Ordinance is an invalid exercise of police power.27The constitutional component of standing doctrine incorporates concepts which concededly are not susceptible of precise definition. TC. Finally. the extancy of "a direct and personal interest" presents the most obvious cause. third party standing and. II. The requirement of standing is a core component of the judicial system derived directly from the Constitution. the crux of the matter is whether or not these establishments have the requisite standing to plead for protection of their patrons' equal protection rights.’ thus giving him or her a "sufficiently concrete interest" in the outcome of the issue in dispute. petitioners in essence repeat the assertions they made before the Court of Appeals.32 the United States Supreme Court wrote that: "We have recognized the right of litigants to bring actions on behalf of third parties. and redressability in Allen v. However. the litigant must have a close relation to the third party. the United States Supreme Court reviewed and elaborated on the meaning of the three constitutional standing requirements of injury. causation.28 In this jurisdiction. Second.Petitioners argued that the Ordinance is unconstitutional and void since it violates the right to privacy and the freedom of movement. the doctrine of transcendental importance. WLC and STDC come to this Court via petition for review on certiorari. Petitioners allege that as owners of establishments offering "washup" rates. There is a lawful method since the establishments are still allowed to operate. The lawful objective of the Ordinance is satisfied since it aims to curb immoral activities. the general rules on standing admit of several exceptions such as the overbreadth doctrine.30 Nonetheless. In Powers v. provided three important criteria are satisfied: the litigant must have suffered an ‘injury-in-fact. Wright. The Court held that: . The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the Ordinance.25 In their petition and Memorandum. Thus. it is an invalid exercise of police power. as it only penalizes the owners or operators of establishments that admit individuals for short time stays. their business is being unlawfully interfered with by the Ordinance. and it is an unreasonable and oppressive interference in their business. the virtually limitless reach of police power is only constrained by having a lawful object obtained through a lawful method.31 For this particular set of facts. the adverse effect on the establishments is justified by the well-being of its constituents in general. Ohio. liberty is regulated by law. the doctrine of standing is built on the principle of separation of powers. and there must exist some hindrance to the third party's ability to protect his or her own interests. The relative silence in constitutional litigation of such special interest groups in our nation such as the American Civil Liberties Union in the United States may also be construed as a hindrance for customers to bring suit.34 American jurisprudence is replete with examples where parties-in-interest were allowed standing to advocate or invoke the fundamental due process or equal protection claims of other persons or classes of persons injured by state action. City Mayor of Manila. Third."33 Herein. the concept of third party standing as an exception and the overbreadth doctrine are appropriate.24 First. taxpayer suits. We must address the threshold issue of petitioners’ standing. it held that the Ordinance did not violate the right to privacy or the freedom of movement. More importantly. Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party's participation in the case.35 the United States Supreme Court held that physicians had standing to challenge a reproductive health statute that would penalize them as accessories as well as to plead the constitutional protections available to their patients. as held in Ermita-Malate Motel Operators Association v. as well as the standard test for a petitioner's standing.
43 Police power has been used as justification for numerous and varied actions by the State. Hon. the overbreadth doctrine applies when a statute needlessly restrains even constitutionally guaranteed rights. We thus recognize that the petitioners have a right to assert the constitutional rights of their clients to patronize their establishments for a "wash-rate" time frame. are likely to be diluted or adversely affected unless those rights are considered in a suit involving those who have this kind of confidential relation to them. gender.40Ermita-Malate concerned the City ordinance requiring patrons to fill up a prescribed form stating personal information such as name. III. and (6) must not be unreasonable. has been purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response as the conditions warrant. it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute. This earlier ordinance was precisely enacted to minimize certain practices deemed harmful to public morals. These range from the regulation of dance halls. At its core. The ban is evidently sought to be rooted in the police power as conferred on local government units by the Local Government Code through such implements as the general welfare clause.. (4) must not prohibit but may regulate trade.47 The awesome scope of police power is best . but our 1967 decision in Ermita-Malate Hotel and Motel Operations Association. the facts of this case will recall to mind not only the recent City of Manila ruling.42 Police power is based upon the concept of necessity of the State and its corresponding right to protect itself and its people. the overbreadth doctrine comes into play. However."38 Assuming arguendo that petitioners do not have a relationship with their patrons for the former to assert the rights of the latter.44 movie theaters. (5) must be general and consistent with public policy. This could be described as the middle case. (2) must not be unfair or oppressive. (3) must not be partial or discriminatory. The test of a valid ordinance is well established. wherein there is no wholesale ban on motels and hotels but the services offered by these establishments have been severely restricted. A.37 wherein the United States Supreme Court held that a licensed beverage vendor has standing to raise the equal protection claim of a male customer challenging a statutory scheme prohibiting the sale of beer to males under the age of 21 and to females under the age of 18. address and occupation before they could be admitted to a motel. pressed here. Inc. In overbreadth analysis. inns and similar establishments in the Ermita-Malate area."The rights of husband and wife. The United States High Court explained that the vendors had standing "by acting as advocates of the rights of third parties who seek access to their market or function. the constitutionality of the ordinance in Ermita-Malate was sustained by the Court. We can see that based on the allegations in the petition. A long line of decisions including City of Manila has held that for an ordinance to be valid. it must not only be within the corporate powers of the local government unit to enact and pass according to the procedure prescribed by law. nationality. City Mayor of Manila. v. Generally applied to statutes infringing on the freedom of speech. while incapable of an exact definition. Police power.45 gas stations46 and cockpits. namely wash rate admissions and renting out a room more than twice a day. The common thread that runs through those decisions and the case at bar goes beyond the singularity of the localities covered under the respective ordinances. challengers to government actionare in effect permitted to raise the rights of third parties. All three ordinances were enacted with a view of regulating public morals including particular illicit activity in transient lodging establishments.41 The Ordinance prohibits two specific and distinct business practices. A purpose similar to the annulled ordinance in City of Manila which sought a blanket ban on motels. Boren.39 In this case. hotel or lodging house."36 An even more analogous example may be found in Craig v. the Ordinance suffers from overbreadth. the petitioners claim that the Ordinance makes a sweeping intrusion into the right to liberty of their clients. To students of jurisprudence. age. this is another case about the extent to which the State can intrude into and regulate the lives of its citizens.
50 The question of substantive due process. Even corporations and partnerships are protected by the guaranty insofar as their property is concerned. the due process clause has acquired potency because of the sophisticated methodology that has emerged to determine the proper metes and bounds for its application. But when we are compelled to nullify executive or legislative actions.S. Yet the desirability of these ends do not sanctify any and all means for their achievement. If due process were confined solely to its procedural aspects. Article III of the Constitution. was later adopted by the U. v. are unimpeachable and certainly fall within the ambit of the police power of the State. there would arise absurd situation of arbitrary government action. The due process guaranty has traditionally been interpreted as imposing two related but distinct restrictions on government. moreso than most other fields of law. Substantive due process completes the protection envisioned by the due process clause. It inquires whether the government has sufficient justification for depriving a person of life. The general test of the validity of an ordinance on substantive due process grounds is best tested when assessed with the evolved footnote 4 test laid down by the U. the political majorities animated by his cynicism. If the Court were animated by the same passing fancies or turbulent emotions that motivate many political decisions. liberty. liberty and property of individuals. Instead. is now confronted with a more rigorous level of analysis before it can be upheld. drug use and alike. or property. judicial integrity is compromised by any perception that the judiciary is merely the third political branch of government. "procedural due process" and "substantive due process. A third standard.51 Footnote 4 of the Carolene Products case acknowledged that the judiciary would defer to the legislature unless there is a discrimination against a "discrete and insular" minority or infringement of a "fundamental right. The primary constitutional question that confronts us is one of due process."52 Consequently. as guaranteed under Section 1. traditionally awesome as it may be. and. The vitality though of constitutional due process has not been predicated on the frequency with which it has been utilized to achieve a liberal result for. Examples range from the form of notice given to the level of formality of a hearing. sometimes even.49 Procedural due process concerns itself with government action adhering to the established process when it makes an intrusion into the private sphere. the courts are naturally inhibited by a due deference to the co-equal branches of government as they exercise their political functions.demonstrated by the fact that in its hundred or so years of presence in our nation’s legal system. provided the proper formalities are followed. Even as we design the precedents that establish the framework for analysis of due process or equal protection questions. Those means must align with the Constitution. These goals. B. or property. liberty. We derive our respect and good standing in the annals of history by acting as judicious and neutral arbiters of the rule of law. The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered establishments for illicit sex. denominated as heightened or immediate scrutiny. has reflected dynamism in progressive legal thought tied with the expanded acceptance of fundamental freedoms. and the rational basis standard of review for economic legislation. and our emerging sophisticated analysis of its guarantees to the people. Supreme Court for evaluating . The Bill of Rights stands as a rebuke to the seductive theory of Macchiavelli." Procedural due process refers to the procedures that the government must follow before it deprives a person of life. prostitution. Supreme Court in U. after all.48 The purpose of the guaranty is to prevent arbitrary governmental encroachment against the life. by themselves. the libertarian ends should sometimes yield to the prerogatives of the State.S. and there is no surer way to that end than through the development of rigorous and sophisticated legal standards through which the courts analyze the most fundamental and far-reaching constitutional questions of the day. yet another form of caution emerges. its use has rarely been denied.S. Carolene Products. Due process evades a precise definition. Police power. The due process guaranty serves as a protection against arbitrary regulation or seizure. C. two standards of judicial review were established: strict scrutiny for laws dealing with freedom of the mind or restricting the political process.
Concededly. an injury that would warrant the application of the most deferential standard – the rational basis test. rather than substantial.59 Applying strict scrutiny.61 The United States Supreme Court has expanded the scope of strict scrutiny to protect fundamental rights such as suffrage. . We expounded on that most primordial of rights. or race as well as other fundamental rights as expansion from its earlier applications to equal protection.64 If we were to take the myopic view that an Ordinance should be analyzed strictly as to its effect only on the petitioners at bar.57 Using the rational basis examination. it has in the United States since been applied in all substantive due process cases as well. Hon. as essential to the orderly pursuit of happiness by free men.classifications based on gender53 and legitimacy. these are not the sort of cherished rights that. Indeed. The term cannot be dwarfed into mere freedom from physical restraint of the person of the citizen. the focus is on the presence of compelling. The U." It said: While the Court has not attempted to define with exactness the liberty . Yet as earlier stated. to earn his livelihood by any lawful calling. would impel the people to tear up their cedulas. establish a home and bring up children. Laguio. to worship God according to the dictates of his own conscience.56 While the test may have first been articulated in equal protection analysis. Viewed cynically. to live and work where he will. In terms of judicial review of statutes or ordinances. one might say that the infringed rights of these customers were are trivial since they seem shorn of political consequence. the Bill of Rights does not shelter gravitas alone. strict scrutiny refers to the standard for determining the quality and the amount of governmental interest brought to justify the regulation of fundamental freedoms. then it would seem that the only restraint imposed by the law which we are capacitated to act upon is the injury to property sustained by the petitioners. Still. to acquire useful knowledge. and to pursue any avocation are all deemed embraced in the concept of liberty. it is those "trivial" yet fundamental freedoms – which the people reflexively exercise any day without the impairing awareness of their constitutional consequence – that accurately reflect the degree of liberty enjoyed by the people.55 after the Court declined to do so in Reed v. D. and generally to enjoy those privileges long recognized . but rather an atmosphere of freedom where the people do not feel labored under a Big Brother presence as they interact with each other. . Supreme Court in Craig.S. The rights at stake herein fall within the same fundamental rights to liberty which we upheld in City of Manila v.67[Citations omitted] . governmental interest and on the absence of less restrictive means for achieving that interest. guaranteed [by the Fifth and Fourteenth Amendments]. the term denotes not merely freedom from bodily restraint but also the right of the individual to contract. the rights of the citizen to be free to use his faculties in all lawful ways. Board of Regents.S.54 Immediate scrutiny was adopted by the U. we recognize the capacity of the petitioners to invoke as well the constitutional rights of their patrons – those persons who would be deprived of availing short time access or wash-up rates to the lodging establishments in question. to marry. is not a Ten Commandments-style enumeration of what may or what may not be done.60 Strict scrutiny is used today to test the validity of laws dealing with the regulation of speech. . subject only to such restraint as are necessary for the common welfare. but is deemed to embrace the right of man to enjoy the facilities with which he has been endowed by his Creator. when proscribed. .62 judicial access63 and interstate travel. to engage in any of the common occupations of life. Liberty." In accordance with this case. their society and nature. in a manner innately understood by them as inherent. We ourselves have often applied the rational basis test mainly in analysis of equal protection challenges. sought to clarify the meaning of "liberty. thus: Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and the right to be free from arbitrary restraint or servitude. gender. as integrally incorporated as a fundamental right in the Constitution. governmental interest is extensively examined and the availability of less restrictive measures is considered. there can be no doubt that the meaning of "liberty" must be broad indeed. In a Constitution for a free people. laws or ordinances are upheld if they rationally further a legitimate governmental interest.58 Under intermediate review. Supreme Court in the case of Roth v. Reed. without doing harm or injury to others. Jr.
as distinguished from those of a particular class.It cannot be denied that the primary animus behind the ordinance is the curtailment of sexual behavior. he surrenders himself. E.72 Lacking a concurrence of these requisites. liberty or property is affected. Entire families are known to choose pass the time in a motel or hotel whilst the power is momentarily out in their homes. A plain reading of section 3 of the Ordinance shows it makes no classification of places of lodging. Governmental powers should stop short of certain intrusions into the personal life of the citizen. its longtime home. That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and the petitioners of lucrative business ties in with another constitutional requisite for the legitimacy of the Ordinance as a police power measure. More importantly. As held in Morfe v. and the will built out of that experience personal to himself. this is not in any way meant to take it away from the vastness of State police power whose exercise enjoys the presumption of validity. for even under the guise of protecting the public interest. the invasion of which should be justified by a compelling state interest. His separateness. I cannot believe that a man no longer a master of himself is in any real sense free. his isolation. in itself it is fully deserving of constitutional protection. they are so fundamental that they are the basis on which his civic obligations are built. The Court has professed its deep sentiment and tenderness of the Ermita-Malate area. In transit passengers who wish to wash up and rest between trips have a legitimate purpose for abbreviated stays in motels or hotels.73 However. Mutuc. presence and exit and thus became the ‘ideal haven for prostitutes and thrill-seekers. It must appear that the interests of the public generally. which are. Our holding therein retains significance for our purposes: The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.74 Similar to the Comelec resolution requiring newspapers to donate advertising space to candidates. the police measure shall be struck down as an arbitrary intrusion into private rights. If he surrenders his will to others. If his will is set by the will of others. adultery and fornications’ in Manila since they ‘provide the necessary atmosphere for clandestine entry. require an interference with private rights and the means must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive of private rights.70 We cannot discount other legitimate activities which the Ordinance would proscribe or impair.76 and it is skeptical of those who wish to depict our capital city – the Pearl of the Orient – as a modern-day Sodom or Gomorrah for the Third World set. broadly speaking. Indeed. . There are very legitimate uses for a wash rate or renting the room out for more than twice a day. obstinately refusing reduction to unity. thus deems them all susceptible to illicit patronage and subject them without exception to the unjustified prohibition.71 It must also be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. Thus it prevents legitimate use of places where illicit activities are rare or even unheard of. so very aptly stated: Man is one among many. As the case of Morfe v. are indefeasible. Morfe accorded recognition to the right to privacy independently of its identification with liberty. a reasonable relation must exist between the purposes of the measure and the means employed for its accomplishment. borrowing the words of Laski. He cannot abandon the consequences of his isolation. indeed. it cannot be denied that legitimate sexual behavior among willing married or consenting single adults which is constitutionally protected69 will be curtailed as well. the exercise of police power is subject to judicial review when life. the right to privacy as a constitutional right was recognized in Morfe. The City asserts before this Court that the subject establishments "have gained notoriety as venue of ‘prostitution. Indeed any person or groups of persons in need of comfortable private spaces for a span of a few hours with purposes other than having sex or using illegal drugs can legitimately look to staying in a motel or hotel as a convenient alternative. as it was in the City of Manila case.’"68 Whether or not this depiction of a mise-en-scene of vice is accurate. this Ordinance is a blunt and heavy instrument. he ceases to be a master of himself. Mutuc.75 The Ordinance makes no distinction between places frequented by patrons engaged in illicit activities and patrons engaged in legitimate actions. that his experience is private.
Urban decay is a fact of mega cities such as Manila. The State is a leviathan that must be restrained from needlessly intruding into the lives of its citizens. The Ordinance rashly equates wash rates and renting out a room more than twice a day with immorality without accommodating innocuous intentions.79 To be candid about it. and vice is a common problem confronted by the modern metropolis wherever in the world. WHEREFORE. and protected by the State. that prerogative is hardly absolute. that phrase is more accurately interpreted as meaning that efforts to legislate morality will fail if they are widely at variance with public attitudes about right and wrong. for one. No pronouncement as to costs. the oft-quoted American maxim that "you cannot legislate morality" is ultimately illegitimate as a matter of law. Ordinance No. but from our recognition that the individual liberty to make the choices in our lives is innate. especially in the face of the norms of due process of liberty. However well-intentioned the Ordinance may be. SO ORDERED. Branch 9. Rather. Our democracy is distinguished from non-free societies not with any more extensive elaboration on our part of what is moral and immoral. by reason of their expression of consent to do so when they take the oath of office. The solution to such perceived decay is not to prevent legitimate businesses from offering a legitimate product. These measures would have minimal intrusion on the businesses of the petitioners and other legitimate merchants. the Petition is GRANTED. they will remain so oriented. and as long as there are widely accepted distinctions between right and wrong. . 7774 is hereby declared UNCONSTITUTIONAL. drug dealers and prostitutes can in fact collect "wash rates" from their clientele by charging their customers a portion of the rent for motel rooms and even apartments. IV. It is conceivable that a society with relatively little shared morality among its citizens could be functional so long as the pursuit of sharply variant moral perspectives yields an adequate accommodation of different interests. is REINSTATED. cities revive themselves by offering incentives for new businesses to sprout up thus attracting the dynamism of individuals that would bring a new grandeur to Manila. Moreover. And while the tension may often be left to the courts to relieve.77 The notion that the promotion of public morality is a function of the State is as old as Aristotle. and because they are entrusted by the people to uphold the law. will have its problems.Those still steeped in Nick Joaquin-dreams of the grandeur of Old Manila will have to accept that Manila like all evolving big cities. So would the strict enforcement of existing laws and regulations penalizing prostitution and drug use. even if it may foster wider debate on which particular behavior to penalize.80 Our penal laws. and the Decision of the Regional Trial Court of Manila. The Ordinance needlessly restrains the operation of the businesses of the petitioners as well as restricting the rights of their patrons without sufficient justification. it is possible for the government to avoid the constitutional conflict by employing more judicious. but also the advent of fundamental liberties as the key to the enjoyment of life to the fullest. Independent and fair-minded judges themselves are under a moral duty to uphold the Constitution as the embodiment of the rule of law. The promotion of public welfare and a sense of morality among citizens deserves the full endorsement of the judiciary provided that such measures do not trample rights this Court is sworn to protect. Less intrusive measures such as curbing the proliferation of prostitutes and drug dealers through active police work would be more effective in easing the situation.78 The advancement of moral relativism as a school of philosophy does not delegitimize the role of morality in law. less drastic means to promote morality. Further. it is apparent that the Ordinance can easily be circumvented by merely paying the whole day rate without any hindrance to those engaged in illicit activities. are founded on age-old moral traditions. The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in fact be diminished simply by applying existing laws. We reiterate that individual rights may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare. The Decision of the Court of Appeals is REVERSED.81 Even as the implementation of moral norms remains an indispensable complement to governance. since as explained by Calabresi. it is in effect an arbitrary and whimsical intrusion into the rights of the establishments as well as their patrons. Yet the continuing progression of the human story has seen not only the acceptance of the right-wrong distinction.
TINGA Associate Justice WE CONCUR: REYNATO S. NACHUR Associate Justice (On Sick Leave) ARTURO D. AZCUNA Associate Justice MINITA V. PUNO Chief Justice LEONARDO A. Section 13 of the Constitution. Associate Justice ANTONIO EDUARDO B. 12 April 2005. it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. REYNATO S. 4-41. CHICO-NAZARIO Associate Justice TERESITA LEONARDO DE CASTRO Associate Justice CONSUELO YNARES-SANTIAGO Associate Justice MA. PERALTA Associate Justice CERTIFICATION Pursuant to Article VIII. 2 . CORONA Associate Justice ADOLFO S.DANTE O. CARPIO Associate Justice RENATO C. VELASCO. QUISUMBING Associate Justice (On Official Leave) ANTONIO T. BRION Associate Justice (On Official Leave) DIOSDADO M. ALICIA AUSTRIA-MARTINEZ Associate Justice CONCHITA CARPIO MORALES Associate Justice PRESBITERO J. JR. PUNO Chief Justice Footnotes 1 G. pp. 455 SCRA 308.R. See rollo. 118127.
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 . Id. at 52.3 Id. Id. 737 (1984). Id. at 48. Rollo. Id. at 81. concurred in by Associate Justices Ricardo P. 129-145. Id. Id. at 104-105. at 82-83. at 158. Id. Id. Solicitor-General) and Antonio P. at 49. Id. pp. at 53. at 43-59. Id. Id. at 70-77. L-74457. Id. at 46. at 4-40. Lantin. 4 Id. Id. at 45-46. 20 March 1987. at 120. 148 SCRA 659. at 42-59. Id. No. Wright. Allen v. Solano. Id.S. Galvez (later. Id. at 84-99. Id. 468 U. Id. at 47. Id. Penned by Associate Justice Jaime M. at 62-69.
2d 66 (1979).S. 759. 103956. for a general discussion on advocacy groups. v. Adiong v. v. 499 U. No. 91.R. 190 (1976).. Pa. 38 Phil.R. 456 SCRA 450. 466 Phil.S. 20 July 1994. 15 April 2005. at p 410-411. 161065. 42 Ermita-Malate Hotel and Motel Operators Association. Magtajas v. 107921. 11 March 1992. 104 (1908). 845. 479(1965). Id. 127 Phil. Art. 94 (1996) citing Rubi v.S. 237. 28 29 See Domingo v. 31 August 2004. 30 468 U. 162777. Solicitor General v. 99 S. G. Inc.R. The Rights of Others: Protection and Advocacy Organizations Associational Standing to Sue. Provincial Board of Mindoro. Chan. Sanlakas v. 39 Phil. L. G. Insular Government v. 329 Phil.R. Id. Jr.Ed. Gladstone. 10 Phil. No..S. Realtors v. G. Sec. Pryce Properties Corp.R.S. Metropolitan Manila Authority. 64 Phil. National Housing Authority. at 194. at 481. Rev. 41 City of Manila v. 36 37 38 39 Chavez v. 40 127 Phil. 1601. 207 SCRA 712.. 111097. Court of Appeals. G. 87. 437 SCRA 415. No. 11 December 1991.Ct. 100. 60 L. G. 123 (1931). 429 U. 35 381 U. 40243. 15 Phil. 31 March 1992. 161.R. 306 (1967). supra note 1. 626 (1937). 31 32 33 34 See Kelsey McCowan Heilman. Pedro v. Comelec. Tatel v. See also Macasiano v. 268267. 207 SCRA 157. 482 (2004).S. 43 JMM Promotion and Management Inc. G. Executive Secretary Reyes. Municipality of Virac. See U. 224 SCRA 236. No. 400 (1991). 44 U.S. Carague. 45 46 47 48 .R. 5. Supra note 29. No. No. Earnshaw. Ling Su Fan.. Provincial Board of Rizal. 234 SCRA 255. VIII . 611 (1938). G. 660 (1919). Rodriguez. Javier v. Village of Bellwood. People v. No. 102782. 1608.27 Const. 1 July 1993. 441 U. Inc. v. 157 U. Ling Su Fan. 56 Phil. v. City Mayor of Manila. 737 (1984). Laguio. Id. 65 Phil. 204 SCRA 837. Comelec. 306 (1967). 58 (1910).
Jr. Jeter. 456 (1988). 487 Phil. 79310. 98 (2000). supra note 1 at 336-337. Thompson. 531 U. ERWIN. City of Manila v. the permissible scope of regulatory measures is wider. 190 (1976). Hon. 369 SCRA 394. 486 U. Boddie v. 2002). 144 (1938). Sandiganbayan. "Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their bonds in 66 67 68 69 . 148560. 32 (1924). Mutuc. 429 U. G. 61 Id. Clark v. Gore. 62 63 64 Shapiro v. Rollo. 523 (2002). 429 U. Connecticut. 52 53 54 55 56 Central Bank Employee’s Association v. 618 (1969).R. p. Constitutional Law. 531 (2004).. CONSTITUTIONAL LAW PRINCIPLES AND POLICIES." 57 58 Central Bank Employee’s Association v. 2nd Ed. Id. See Erwin Chemerinsky. 404 U. Laguio. supra note 1 at 330 citing CHEMERINSKY.S.S. the standard for the validity of government acts is much more rigorous and exacting. 394 U. Bangko Sentral ng Pilipinas. Id. 371 (1971). Id. 415 (1968). Concurring Opinion in Estrada v.S. 79744. supra note 57. 190 (1976). Boren.S. Jr. 1989. and 79777. 65 Morfe v. Association of Small Landowners in the Philippines v. but where the liberty curtailed affects what are at the most rights of property. Bangko Sentral ng Pilipinas. 78742. the Court in fact noted: "if the liberty involved were freedom of the mind or the person.S. 130 Phil. 19 November 2001. July 14. 175 SCRA 343. Principles and Policies (2nd ed. 47 Phil. Nos. Secretary of Agrarian Reform. 51 304 U. No. 71 (1971). In Ermita-Malate.S. Bush v. supra note 1 at 324.S. Laguio. 23. Director of Lands.. It has been opined by Chemerinsky that the use of the equal protection clause was to avoid the use of substantive due process since the latter fell into disfavor in the United States.49 Lopez v. 258.R. at 440. 50 See City of Manila v. 59 60 Mendoza.. J. G. Craig v. at 152.S. 401 U.
31 Harv. 79 Greenwalt. Steven G. Ermita-Malate Hotel and Motel Operations Association.9. Laguio. & Pub. 170656 and 170657. supra note 42.. . 130 Phil. where it was clear that the State cannot justly and successfully regulate consumption of alcohol. Constitution. Paras.. Pol'y 495. which prohibited the sale and consumption of liquor. 71 Metro Manila Development Authority v. 2007. A. et al. 85 (1910). Hon. 80 See also Posner... He writes: .R. K. June 29.S. He cites the example of the failed Twentieth (?) Amendment to the U. A big part of legal education consists of showing students how to skirt those pitfalls. v. Hon. 172 (1968). 102 (1918). G. 166494. supra note 1.S. Otherwise.. 75 Philippine Press Institute v. as long as they do not run afoul of the law.S. Liberty in the constitutional sense not only means freedom from unlawful government restraint. must devote itself to the end of encouraging goodness. 415 (1968). The law . Glenda Espiritu Mayor.R. The Problematics of Moral And Legal Theory. Hon. J. Their right to liberty under the due process clause gives them the full right to engage in their conduct without intervention of the government. 15 August 2007. a political association sinks into a mere alliance…" The law "should be a rule of life such as will make the members of a [state] good and just. if it is to be a repository of freedom.M. Alalayan v. (See Concerned Employee v. Toribio.L. cited in Hamburger. 23 November 2004) Adults have a right to choose to forge such relationships with others in the confines of their own private lives and still retain their dignity as free persons.’" Politics II. Jr. when huge portions of the population engage in its consumption. . 490 (1983). at 38. v. City Mayor of Manila.. Salaveria. 530 SCRA 341. 73 74 Carlos Superdrug v. U. 72 U. 78 "The end of the state is not mere life. The liberty protected by the Constitution allows persons the right to make this choice. v. it is. No. 131 (1995)." Therefore any state "which is truly so called. G. Nos. The Belknap Press of Harvard University Press (2002).6-8. The right to be let alone is the beginning of all freedom — it is the most comprehensive of rights and the right most valued by civilized men. 208 Phil. 314 Phil. De La Cruz. p. Laguio. a good quality of life. M. DSWD.intimate sexual conduct within the motel's premises — be it stressed that their consensual sexual behavior does not contravene any fundamental state policy as contained in the Constitution. it must include privacy as well." City of Manila v. Conflicts of Law and Morality (1989 ed. P-02-1564. Viron Transportation Co. Comelec. v. Liberty should be the rule and restraint the exception. 15 Phil. Morals and Law: The Growth of Aristotle’s Legal Theory (1951 ed.). Richard H. supra note 1 at 337-338.). supra note 1 at 338-339. et al. 24 Phil. Supra note 1. Render Unto Caesar that which is Caesars. rather. Laguio.1280 31-1280bii. and is not merely one in name. 178. National Power Corporation. 39 Phil. No.. 70 City of Manila v. Holmes warned long ago of the pitfalls of misunderstanding law by taking its moral vocabulary too seriously.. Jr." Otherwise it "becomes a mere covenant – or (in the phrase of the Sophist Lycophron) ‘a guarantor of men’s rights against one another. Inc. 76 77 City of Manila v. and unto God that which is God’s. Jr.
2012 Search Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. S. is more likely to understand – and in part. even that of stability. limiting the effects of wide swings in public opinion). that it is merely a vestige. . Pakistan.). and Afghanistan have been engaged in of late). punishing homosexual relations—what they mean is that the law neither is supported by public opinion nor serves any temporal purpose. is too limited to justify trying to align these two systems of social control (the sort of project that Islamic nations such as Iran. however. petitioner. to whom the commands of the law are addressed. the law is a flywheel. 124795 December 10. an empty symbol. No. The Lawphil Project . and for good practical reasons (in particular.Arellano Law Foundation lawphil Today is Thursday. at 218.. The overlap. still found on the statute books of many states. in part to speak a language that the laity. 2008 FORFOM DEVELOPMENT CORPORATION.R. in part to be impressive. Judging in Good Faith. (1992 ed. 81 See Burton. If often is.uses moral terms in part because of its origin. because there is a considerable overlap between law and morality. When people make that criticism—as many do of the laws. It is not a scandal when the law to pronounce it out of phase with current moral feeling. November 15.
3 In its Amended Answer. 741).128 square meters of its property located in San Pedro. Petitioner Forfom Development Corporation (Forfom) is a domestic corporation duly organized and existing under the laws of the Philippines with principal office at Cabuyao. occupied 100. stripped of the non-essentials. (b) P1. T-34386 and T-34387. and that it be restored to the peaceful occupation and enjoyment thereof. all of the Registry of Deeds of Laguna. Laguna. It prayed that PNR be ordered to vacate the property and to cause the eviction of all shanties and squatters that PNR had taken in as lessees.: Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court which seeks to set aside the Decision1 of the Court of Appeals dated 24 April 1996. (c) P150. Despite repeated verbal and written demands for the return of the property or for the payment of its price. and without its consent and against its will. Said parcels of land were originally registered in the name of Felix Limcaoco. with the aid of military men. On 24 August 1990.00 for actual damages on account of the destruction of crops and improvements on the property when the occupation of the property commenced plus 12% interest per annum until fully paid. predecessor-in-interest of Forfom. Laguna under Transfer Certificates of Title (TCT) Nos. Per Resolution No. T-34384.M. It further alleged that PNR rented out portions of the property to squatters along the railroad tracks. The facts. 751 dated 2 November 1972 of the PNR Board of Directors. Laguna and installed thereon railroad and railway facilities and appurtenances. while respondent Philippine National Railways (PNR) is a government corporation engaged in proprietary functions with principal office at the PNR Railway Station. several properties owned by private individuals/corporations were traversed as right-of-way. In a cabinet meeting held on 1 November 1972.4 PNR alleged that.600.000. It asserted that no crop was damaged when it acquired the property subject of the case. Tutuban.128 square-meter portion owned by Forfom covered by TCT Nos. J. Recto Avenue. then President Ferdinand E. Laguna a complaint2 for Recovery of Posssession of Real Property and/or Damages.00 per month per hectare from occupation of the property until the same is vacated as rentals plus interest at 24% per annum. (e) P100. more commonly known as the Carmona Project of the President. . denied that the property acquired from Forfom was leased to tenants.000. and (f) costs of the suit.000. respondent.000. (0-326) 0-384 and (0-328) 0-386. Cavite. Further. it denied liability for unrealized income. Forfom filed before the Regional Trial Court (RTC) of Binan. Manila. per authority granted by law (Presidential Decree No. It. It likewise denied that the acquisition of Forfom's property was made without the consent of Dr. its General Manager was authorized to implement the project. C. DECISION CHICO-NAZARIO. T-34384. During the construction of said commuter line. are as follows: Forfom is the registered owner of several parcels of land in San Vicente. It alleged that PNR. Marcos approved the Presidential Commuter Service Project.000. however.00 as exemplary damages. Binondo. It stressed that the acquisition of the properties used in the project was done through negotiations with the respective owners. PNR failed to comply. Felix Limcaoco. the former owner of the property. San Pedro. it acquired parcels of land used in the construction of the railway track to Carmona. (d) at least P100.00 as unrealized income from occupation of the property up to the present plus 12% interest per annum until fully paid. PHILIPPINE NATIONAL RAILWAYS. Among the properties through which the commuter line passed was a 100.00 plus 15% of the amount and properties to be recovered as attorney's fees. The San Pedro-Carmona Commuter Line Project was implemented with the installation of railroad facilities and appurtenances. T-34386 and 34387. under Original Certificates of Title (OCT) Nos. exemplary damages and attorney's fees.vs. It likewise asked that Forfom be ordered to pay (a) P1.
She claimed that the current price of land contiguous to the parcels taken by PNR was P1. He said he worked as overseer in Hacienda Limcaoco in San Pedro. same can be sold for P800. She added that Forfom incurred a loss totaling P2.00 in ruined sugar. Laguna. Armed men installed railroads and even used bulldozers which caused the destruction of around eleven hectares of sugar land. Limcaoco. trial on the merits ensued. She learned from her father and from Mr. In an Order dated 29 October 1990.16 Land Register Examiner of the Register of Deeds of Calamba. (3) Marilene L. corroborated the testimony of Mr. and that the owner of the properties involved be compelled to accept the amount of P1. and Mrs.25 per square meter.15 Ms. (2) Marites Dimaculangan. De Guzman said the property was still in the name of Dr.00. The armed men used bulldozers destroying 11 hectares of sugarcane and some mango trees. Gavino Rosas de Claro.000. Marilene L.200. Being a worker of Forfom.00 per square meter. the armed men did not show any court order or authority from any agency of the government. he claimed Forfom lost P2. Felix Limcaoco. She said from the time their property was taken over by PNR. excluding unrealized harvest for nine mango trees which yielded 60 kaings per tree per harvest. from 1972 to 1985. the pre-trial conference on the case was set.200. Capati were not advised to harvest their crops and were surprised by the taking over of the land. Laguna owned by Dr. De Guzman.1 kilometer railroad extension line from San Pedro. As a result.00. Felix Limcaoco. it said.6 Thereafter. then the ownership was transferred to Forfom.917. the price agreed upon was P1. Felix Limcaoco. Marcos approved what was known to be the Carmona Project -.10 She also adduced in evidence several letters11 allegedly showing that PNR occupied the property owned by the Limcaocos. Ms. Capati and Ms.00 per square meter. the amount the adjoining owners was paid. She explained that her father and Mr. Limcaoco and owner of the properties left behind by said doctor. He knew Forfom Development Corporation to be a corporation formed by the children of Dr.25 per square meter as price for the properties. At that time. Carmona. Leon Capati. (4) Gavino Rosas de Claro.PNR explained that former President Ferdinand E. She said she was not informed by Mr. It claimed that it negotiated with the respective owners of the affected properties and that they were paid just compensation. he claimed that the value of sugarcane was P200.8 an officer of Forfom. he disclosed that in 1972. and (5) Jose Elazegui. for failure of the parties to reach any agreement. Sr. Dimaculangan. Felix Limcaoco. she presented permits from the Human Settlements Regulatory Commission and from the Municipality of San Pedro. Marites Dimaculangan. corroborated the testimonies of Mr. Leon Capati. Cavite to serve the squatters' resettlement area in said localities. She presented documents9 showing that Hacienda Limcaoco was previously owned by Dr. Limcaoco. her family has been writing to PNR regarding compensation for their land.a 5. testified that he knew Dr. The following witnesses testified for Forfom: (1) Leon Capati. It claimed that the right to and just compensation for the subject property was the declared fair market value at the time of the taking which was P0.7 employee of Forfom.12 From 1972 to 1985. Mr.60 per square meter. Mr. she claimed that part of the property taken by PNR was leased to squatters beside the railroad tracks.13 Executive Vice-President of Forfom and daughter of the Late Dr.00 per square meter.000.400. Felix Limcaoco. testified as representative . She revealed that the present fair market value of land at Olympia Complex is P1.14 If the land is not developed. Said hacienda was converted to the Olympia Complex Subdivision now owned by Forfom. Leon Capati that when the armed men took a portion of their property.917. de Guzman. he said PNR used the property for its benefit and even leased part of it to people living near the railroad. Ms. As proof that Hacienda Limcaoco was converted into a low-cost housing subdivision known as the Olympia Complex Subdivision. because he worked for him since 1951 until his death. Laguna to San Jose. It disclosed that in a meeting with the representatives of Dr. Olympia Limcaoco when the PNR took over a portion of their properties. She said those taken over were used as railroad tracks and a portion beside the tracks were being leased to squatters. pre-trial was terminated and trial of the case scheduled. In all. Sr. unrealized harvest.00 per piko and that the plantation harvested sixty (60) tons annually worth P224. Since 1972. She disclosed that his father died on 25 March 1973. Capati that the PNR took the said property over pursuant to a Presidential Mandate in order to provide transportation for relocated squatters. around eleven hectares of the sugar cane plantation were destroyed.5 On 13 March 1991. It prayed that the instant complaint be dismissed. was not paid because he failed to present the corresponding titles to his properties. Dr. the PNR forcibly took portions of the property of Forfom.
and Life Realty Development Corporation were not paid for because these corporations were not able to present their respective titles. the acquisition of the right of way was with the knowledge and consent of Dr.25 per square meter for their lands. which the negotiating panel of the PNR and the representatives of the three corporations was considering then.00 for damaged sugar crops and mango trees. Catalina Sanchez. Just compensation of the subject real properties consisting of 100.00 as unearned income of plaintiff from 1972 up to the current year.30 Mrs.25The right of way was acquired to provide a cheap. 751. Per record of PNR. titles to the lands were transferred to PNR.7446 hectares or sixteen (16) lots in all owned by seven (7) private landowners and three (3) corporations. She explained that the leasing of PNR's right of way was an incidental power and was in response to the government's social housing project. with legal interest until payment is made.000 corresponding to sugarcane crops and mango trees destroyed or damaged as a result of the unlawful taking of plaintiff's real properties.24 She explained that President Ferdinand E. T-34384 and T-34386 at P10.22 The documents showed the production (average yield per area per picul) in other properties owned by Forfom other than the properties subject matter of this case. Department Manager of the Real Estate Department of the PNR. They executed Absolute Deeds of Sale in favor of the PNR. Actual damages in the amount of P150. (O-326) O-38419 and (O-328) O-386. Limcaoco and the PNR Chief Construction Engineer held at the PNR General Manager's Office on 24 July 1979.21 Supervisor. Mrs. with legal interest until payment is made. of Forfom was asking for P12. 1986-1987 and 1987-1988. Sr. and thereafter. Marcos authorized the PNR to acquire said right of way in a Cabinet Meeting on 1 November 1972 as evidenced by an excerpt of the minutes of the meeting of the PNR Board of Directors on Resolution No.25. He presented duplicate original copies of Tuos ng inaning Tubo for the years 1984-1985.128 square meters and covered by TCT Nos. Sr. 741). Felix Limcaoco.28 The unit price per square meter. In its decision dated 29 October 1992. Jose Elazegui. Edna Ramos.29 She likewise said she had the minutes of the conference between Mr. with legal interest from the time of actual taking of plaintiff's real properties until payment is made by the defendant. judgment is hereby rendered in favor of plaintiff and against defendant ordering the latter to pay the former the following: 1. de Limcaoco. T-3438417 and T-34386. For the defendant. It was acquired and established by Presidential Mandate and pursuant to the authority of the PNR to expropriate under its charter (Presidential Decree No. Mr.23 She testified that she was familiar with the acquisition by the PNR of the right of way for the San Pedro-Carmona Commuter Line. special contracts were entered into with selected parties under strict conditions to vacate the property leased upon notice.000. 2. they were paid P1. 3. premises considered. To prevent its proliferation.000. Ramos disclosed that the total area acquired by the PNR for the San Pedro-Carmona Commuter Line was 15. In a letter dated 3 October 1975. He brought in Court the originals of TCT Nos. as a result of which.27 The remaining 9 lots belonging to the three private corporations . The amount of P4. both in the name of Dr. Squatting along the right of way had never been encouraged. Leoncia Blanco. Alviar Development Manufacturing & Trading Supply Corp. the amount of P224. she said. Alejandro Oliver and Antonio Sibulo. photocopies thereof were compared with the originals which were found to be faithful reproductions of the same. Southern Tagalog Facoma. PNR employees and other persons were not allowed to settle on the PNR's right of way. Felix Limcaoco.00 per square meter for their land and P150. Jimenez. Ramos clarified that as a matter of policy. As shown by the letter26 dated 30 April 1974 of Nicanor T. former General Manager of the PNR.of the Register of Deeds. Jr.00 per square meter. T-34387.480. which had been used as loan collaterals in the Philippine National Bank and the Government Service Insurance System. was primarily for service rather than profit. took the stand. . was presented to show the production of sugar and molasses on the property of Forfom. Olympia Hemedes Vda.Forfom Development Corporation. The commuter line. 1985-1986. Inc. Tomas Oliver. Felix Limcaoco.000 yearly. to Mrs.18both in the name of Forfom Development Corporation and OCT Nos. the trial court ruled generally in favor of plaintiff. the dispositive portion reading: WHEREFORE.20 Thereafter. Mrs. was P1. efficient and safe means of transportation to the squatters who were relocated in Cavite. Among the private landowners were Isabel Oliver.
Instead. both parties appealed to the Court of Appeals by filing their respective Notices of Appeal. by its acquiescence. if there be any. However.33 Except for the deletion of the award of damages. plaintiff's prayer to recover the property cannot be granted. and this is borne out by certain communications between the parties through their respective officers or representatives.00 per square meter and not the declared value of P0. but with legal rate of interest thereon hereby specifically fixed at six (6) percent per annum starting from January of 1973 until full payment is made. the former can no longer complain at this time. xxxx Clearly.00 per square meter was the fair and equitable market value of the real properties at the time of the taking thereof. x x x. As to its right to compensation and damages. Nevertheless. by its acquiescence. What controls now is the fact that by its own act of negotiating with defendant for the payment of just compensation. the appellate court agreed the with trial court. We quote: There is no dispute that defendant neither commenced an expropriation proceedings nor paid just compensation prior to its occupation and construction of railroad lines on the subject property. waived its right. It likewise questioned the award of actual damages and unearned income to Forfom. what plaintiff actually did was to negotiate with defendant for the purpose of fixing the amount which the latter should pay as just compensation and.00 per square meter which defendant must pay to plaintiff. No pronouncement as to costs.4. from . And even if the contention of plaintiff that defendant used force is true. there is no showing that the same was opposed or questioned by plaintiff or its representatives on the ground that defendant never filed an expropriation proceedings and that no just compensation was ever paid.000 for litigation expenses plus the costs of this suit.25 paid to an adjacent owner. the appellate court disposed of the case as follows: WHEEFORE. Although the power of eminent domain was not exercised in accordance with law. The amount of P150.60 per square meter or the fair market value of P1. plaintiff had in effect made representations that it acquiesced to the taking of its property by defendant. We therefore agree with the lower court that plaintiff. the decision appealed from is hereby AFFIRMED insofar as (1) it denies plaintiff's claim for recovery of possession and (2) it awards just compensation at the rate of P10. Plaintiff's claim for recovery of possession and the other prayers in the complaint are hereby dismissed for want of merit. the RTC ruled that. Thus. Neither is there a showing that plaintiff sought to recover the property because the taking was done forcibly with the aid of armed men. The amount of P100. and PNR occupied petitioner's properties without previous condemnation proceedings and payment of just compensation. On 24 April 1996. Immediately after the occupation. or within a reasonable time thereafter. the failure of defendant to first file an expropriation proceedings and pay just compensation is now beside the point.32 PNR questioned the trial court's ruling fixing the just compensation at P10. Not contented with the decision. and is thus estopped. Forfom was estopped from recovering the properties subject of this case. 5.000 as and for attorney's fees. the appealed decision is MODIFIED in the sense that plaintiff's claim for damages is DENIED for lack of merit. damages.31 The trial court found that the properties of Forfom were taken by PNR without due process of law and without just compensation. attorney's fees and litigation expenses. The trial court declared that P10. it said that the same could not be denied. a continuing negotiation between the parties took place for the purpose only of fixing the amount of just compensation and not because plaintiff wanted to recover the subject property.
Forfom filed the instant petition for review on certiorari raising the following issues: A.00 PER SQUARE METER DESPITE THE EVIDENCE SHOWING THAT THE PRICE OF LAND IN THE ADJACENT AND SURROUNDING AREAS IS MORE THAN P1. xxxx Plaintiff's right to recover just compensation. however. x x x. remains. THE HONORABLE COURT OF APPEALS ERRED IN AGREEING WITH THE RTC IN FIXING THE COMPENSATION FOR THE LAND FORCIBLY TAKEN BY PNR AT A RIDICULOUS. THE HONORABLE COURT OF APPEALS APPARENTLY SUPPRESSED THE EVIDENCE THAT PRIVATE RESPONDENT PNR APART FROM FORCIBLY TAKING THE LAND OF PETITIONER WITH THE EMPLOYMENT OF ARMED MEN.recovering the subject property or from challenging any supposed irregularity in its acquisition. defendant should pay interest thereon at the legal rate of six (6) percent per annum from the time of occupation until payment is made. OUTRAGEOUS. THE HONORABLE COURT OF APPEALS ERRED IN AND ABUSED ITS DISCRETION IN ADOPTING DOUBLE STANDARD IN ITS EVALUATION OF THE EVIDENCE AND IN ADMITTING PNR's PATENTLY HEARSAY EVIDENCE WHILE REJECTING PETITIONER'S RELEVANT .00 per square meter valuation fixed by the trial court x x x.500. THE HONORABLE COURT OF APPEALS DEVIATED FROM ESTABLISHED JURISPRUDENCE IN UNJUSTIFIABLY IGNORING AND SETTING ASIDE THE FINDINGS OF FACTS OF THE TRIAL COURT THAT ARE IN FACT SUPPORTED BY ABUNDANT EVIDENCE: H.00 PER SQUARE METER: E." D. On this matter.MATERIAL AND ADMISSIBLE EVIDENCE: G. AND ABSURD PRICE OF P10. THE HONORABLE COURT OF APPEALS ERRED GRIEVOUSLY IN HOLDING THAT IN THIS ACTION "THE FAILURE OF DEFENDANT TO FIRST FILE AN EXPROPRIATION PROCEEDINGS AND PAY JUST COMPENSATION (FOR THE PROPERTY OF PETITIONER FORCIBLY TAKEN BY PRIVATE RESPONDENT) IS (NOW) BESIDE THE POINT. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER CANNOT RECOVER POSSESSION OF ITS LAND DESPITE THE ADMISSION THAT IT WAS FORCIBLY TAKEN (DURING THE MARTIAL LAW ERA) WITHOUT ANY EXPROPRIATION PROCEEDING OR PAYMENT OF COMPENSATION SIMPLY BECAUSE PETITIONER DID NOT OPPOSE THE ARMED AND FORCIBLE TAKING THEREOF: B.34 Still unsatisfied with the decision. xxxx With the long delay in the payment of just compensation however. THE HONORABLE COURT OF APPEALS EMPLOYED DOUBLE STANDARD OF JUSTICE IN ADMITTING HEARSAY EVIDENCE OF PNR YET REJECTING THAT OF PETITIONER WHICH IS PROPERLY IDENTIFIED WITH ABUNDANT CROSS EXAMINATION CONDUCTED ON THE BASIS OF PETITIONER'S REJECTED EVIDENCE: C. THE HONORABLE COURT OF APPEALS ERRED IN IGNORING THE EVIDENCE ESTABLISHING THE RIGHT OF THE PETITIONER TO BE AWARDED ACTUAL OR COMPENSATORY DAMAGES. AND UNREALIZED INCOME: F. we agree with the P10. ATTORNEY'S FEES. RENTED OUT PORTIONS OF SAID LAND TO ITS TENANTS WHO PAID .
the power need not be specifically conferred on the government by the Constitution. It will readily be seen that the interruption of the transportation service at any point on the right of way impedes the entire service of the . endowed with the power of eminent domain. Forfom's inaction for almost eighteen (18) years to question the absence of expropriation proceedings and its discussions with PNR as to how much petitioner shall be paid for its land preclude it from questioning the PNR's power to expropriate or the public purpose for which the power was exercised. the expropriator (PNR) entered the property of Forfom. The property of Forfom measuring around eleven hectares was devoted to public use . PNR has been in control.39 has the power of expropriation. The entrance into Forfom's property was permanent. possession and enjoyment of the subject land since December 1972 or January 1973. PNR accepted the decision of the Court of Appeals and no longer appealed. to vacate the property it had occupied without first acquiring title thereto by amicable purchase or expropriation proceedings. knowing fully well that there was no expropriation case filed at all. but only an action for damages. PNR. A number of circumstances must be present in the taking of property for purposes of eminent domain: (1) the expropriator must enter a private property. If these questions of fact be decided in the affirmative.36 Section 9. a private land. under its charter. appropriately or injuriously affected. Being inherent. if any.38 In the case at bar.40 In the case at bar. that is. it is uniformly held that an action of ejectment or trespass or injunction will not lie against the railroad company. (3) the entry into the property should be under warrant or color of legal authority. it has waived its right and is estopped from assailing the takeover of its land on the ground that there was no case for expropriation that was commenced by PNR. Paredes. It is clear from the foregoing that there was a taking of property within the constitutional sense. With the entrance of PNR into the property. facilities and appurtenances for use of the Carmona Commuter Service. we said: x x x whether the railroad company has the capacity to acquire the land in dispute by virtue of its delegated power of eminent domain. In other words. The primary question to be resolved is: Can petitioner Forfom recover possession of its property because respondent PNR failed to file any expropriation case and to pay just compensation? The power of eminent domain is an inherent and indispensable power of the State. It may be delegated by Congress to the local governments. other public entities and public utilities. (2) the entrance into private property must be for more than a momentary period. and the consequential damages. and. It can be gathered from the records that Forfom accepted the fact of the taking of its land when it negotiated with PNR for just compensation. PNR's entry into the property of Forfom was with the approval of then President Marcos and with the authorization of the PNR's Board of Directors. not for a fleeting or brief period. v. The primary reason for thus denying to the owner the remedies usually afforded to him against usurpers is the irremedial injury which would result to the railroad company and to the public in general.HEFTY RENTALS FOR THE USE OF THE SAME AS RESIDENTIAL LOTS (AND NOT FOR PUBLIC PURPOSES).35 On the other hand.41 the first case in this jurisdiction in which there was an attempt to compel a public service corporation. Forfom was deprived of material and beneficial use and enjoyment of the property. if so. Forfom argues that the property taken from it should be returned because there was neither expropriation case filed by PNR nor just compensation paid for the same. The constitutional restraints are public use and just compensation.37 The fundamental power of eminent domain is exercised by the Legislature. whether the company occupied the land with the express or implied consent or acquiescence of the owner. Article III states that private property shall not be taken for public use without just compensation. recovery of the value of the land taken. and (5) 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 Manila Railroad Co. (4) the property must be devoted to a public purpose or otherwise informally.railroad tracks.
and will be restricted to a suit for damages. in De Ynchausti v. reclaim the land. remains inactive and permits it to go on and expend large sums in the work. Manila Electric Railroad & Light Co. we held that the owners therein. should be dismissed x x x but that such dismissal x x x should be without prejudice to the right of the plaintiff to institute the appropriate proceedings to recover the value of the lands actually taken. or large expenditures have been made thereon upon the faith of his apparent acquiescence. more importantly. or to compel the railroad corporation to take the necessary steps to secure the condemnation of the land and to pay the amount of the compensation and damages assessed in the condemnation proceedings. if he ever intended to set up illegality.. Jr. From the afore-cited cases. What is left to the landowner is the right of compensation. In said case. knowing that a railroad company has entered upon his land and is engaged in constructing its road without having complied with a statute requiring either payment by agreement or proceedings to condemn. will be considered a waiver. he is not deprived of his action for damages for the value of the land. But the real strength of the rule lies in the fact that it is against public policy to permit a property owner. under such circumstances.although they knew that there had been no expropriation case commenced -.43 a case involving the takeover by the Government of two private lots to be used for the widening of a road without the benefit of an action for expropriation or agreement with its owners. it is clear that recovery of possession of the property by the landowner can no longer be allowed on the grounds of estoppel and. and will be regarded as having acquiesced therein.and therefore had no reason to impugn the existence of the power to expropriate or the public purpose for which that power had been exercised.. having been silent for more than two decades. of public policy which imposes upon the public utility the obligation to continue its services to the public. (I)f a landowner. There is also something akin to equitable estoppel in the conduct of one who stands idly by and watches the construction of the railroad without protest. Further. and sees a public railroad constructed over it. after the road is completed. His acquiescence in the company's taking possession and constructing its works under circumstances which made imperative his resistance. to interfere with the service rendered to the public by the railroad company. xxxx We conclude that x x x the complaint in this action praying for possession and for damages for the alleged unlawful detention of the land in question.company and causes loss and inconvenience to all passengers and shippers using the line. were deemed to have consented to such taking -. x x x. Under these circumstances. In Ansaldo v. cannot afterwards reclaim it free from the servitude he has permitted to be imposed upon it. x x x. if not public necessity. of for injuries done him by the construction or operation of the road.42 we ruled: The owner of land. demands that the owner of the land be denied the ordinarily remedies of ejectment and injunction. xxxx One who permits a railroad company to occupy and use his land and construct its roads thereon without remonstrance or complaint. In such a case there can only remain to the owner a right of compensation. we directed the expropriator to forthwith institute the appropriate expropriation action over the land. without objection. The non-filing of the case for expropriation will not necessarily lead to the return of the property to the landowner. The fact that the railroad company has the capacity to eventually acquire the land by expropriation proceedings undoubtedly assists in coming to the conclusion that the property owner has no right to the remedies of ejectment or injunction. so that just compensation due the owners may be determined in accordance with the Rules of Court. he is estopped from maintaining either trespass or ejectment for the entry. or enjoin its use by the railroad company. who stands by. Tantuico. can not. But while this presumed waiver is a bar to his action to dispossess the company. public policy. .
not having been made in accordance with the procedure provided for by the rules." "public benefit."46 It includes the broader notion of indirect public benefit or advantage. Under Section 5 of the 1997 Rules of Civil Procedure. While it is true that the findings of commissioners may be disregarded and the trial court may substitute its own estimate of the value. or where the amount allowed is either grossly inadequate or excessive. Having no right to further question PNR's act of taking over and the corresponding public purpose of the condemnation. The leasing out of portions of the property is already a matter between PNR and third persons in which Forfom can no longer participate. Forfom is not being denied due process. Forfom's inaction on and acquiescence to the taking of its land without any expropriation case being filed. The appointment of commissioners is one of the steps involved in expropriation proceedings. safety." "public welfare. "trial with the aid of the commissioners is a substantial right that may not be done away with capriciously or for no reason at all.Forfom argues that the recovery of its property is justified because PNR failed to pay just compensation from the time its property was taken. The same no longer has any bearing on the issue of just compensation.47 Whatever may be beneficially employed for the general welfare satisfies the requirement of public use. As ruled above. it may only do so for valid reasons. Ramos of the PNR explains that the leasing of PNR's right of way is an incidental power and is in response to the government's social housing project. She said that to prevent the proliferation of squatting along the right of way. Though the ascertainment of just compensation is a judicial prerogative. but not in an expropriation case. the court shall appoint not more than three competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property. We do not agree. What the judge did in this case was contrary to what the rules prescribe. the trial court determined just compensation. Moreover. environment and the general welfare. which is a matter of concern for the state. This being the case." and "public convenience. Thus. for it addresses the shortage in housing. as it directly affects public health."50 In the case before us. It has been given its day in court. and its continued negotiation with PNR on just compensation for the land.45 The term "public use" has now been held to be synonymous with "public interest. that is. Forfom cannot now object to PNR's lease of portions of the land to third parties. To the court.49 the appointment of commissioners to ascertain just compensation for the property sought to be taken is a mandatory requirement in expropriation cases. we find the valuation made by the trial court to be ineffectual. where the commissioners have applied illegal principles to the evidence submitted to them.44 Forfom contends that since there is enormous proof that portions of the property taken by PNR were being leased to third parties there was enough justification for the Court of Appeals to order the return to petitioner of the leased portions as well as the rents received therefrom. We find such contention to be untenable. such purpose is indeed public. The fact that its cause is being heard by this Court is evidence that it is not being denied due process. there was no appointment of commissioners as mandated by the rules. The judge should not have made a determination of just compensation without first having appointed the required commissioners who would initially ascertain and report the just compensation for the property involved. Mrs. It is settled that non-payment of just compensation does not entitle the private landowners to recover possession of their expropriated lot. where they have disregarded a clear preponderance of evidence. We do not agree. At present. prevent him from raising any issues regarding the power and right of the PNR to expropriate and the public purpose for which the right was exercised. The public-use requisite for the valid exercise of the power of eminent domain is a flexible and evolving concept influenced by changing conditions. Forfom further avers that the leasing out of portions of the property to third persons is beyond the scope of public use and thus should be returned to it. special contracts were entered into with selected parties under strict conditions to vacate the property leased upon notice.48 In the instant case. The only issue that remains is just compensation. Forfom claims it was denied due process when its property was forcibly taken without due compensation for it. We now go to the issue of just compensation. it may not be amiss to state that whatever is beneficially employed for the general welfare satisfies the requirement of public use. .
it has given Forfom the runaround. are awarded. is denied. the PNR has enjoyed possession of the land in question without the benefit of expropriation proceedings. As to the claim for the alleged damaged crops.00 and P50. as Forfom maintains. with interest at the legal rate of six (6%) percent per annum from the time of taking until full payment is made. Admittedly. SO ORDERED. The Philippine National Railways is DIRECTED to forthwith institute the appropriate expropriation action over the land in question. the just compensation should be reckoned from the time of taking which is January 1973.00. is better left to be determined by the expropriation court where the PNR will be filing the expropriation case.000. failing to pay the just compensation it rightly deserves. Unearned income for years after the takeover of the land is likewise denied. the PNR's occupation of Forfom's property for almost eighteen (18) years entitles the latter to payment of interest at the legal rate of six (6%) percent on the value of the land at the time of taking until full payment is made by the PNR. However. derived from the use of the property which is already under the control and possession of PNR.51 In the case at bar. respectively. The determination thereof shall be made in the expropriation case to be filed without delay by the PNR after the appointment of commissioners as required by the rules. the prayer for the return of the leased portions. PNR's uncaring and indifferent posture must be corrected with the awarding of exemplary damages. Having turned over the property to PNR. As explained above.000. at the time when the price is actually paid? Where actual taking was made without the benefit of expropriation proceedings. Evidence for such claim may be introduced before the condemnation proceedings. The amounts of P100. Is it at the time of the taking or. and the owner sought recovery of the possession of the property prior to the filing of expropriation proceedings. we find that the same. evidence of the same. MINITA V. the same cannot be granted. so that just compensation due to its owner may be determined in accordance with the Rules of Court.00 as attorney's fees and P50. attorney's fees and expenses of litigation. we find the award thereof to be just and equitable. It is apparent from its actuations that it has no intention of filing any expropriation case in order to formally place the subject land in its name. All these years. may be presented before the expropriation court.53 WHEREFORE. if any. CHICO-NAZARIO Associate Justice WE CONCUR: CONSUELO YNARES-SANTIAGO Associate Justice Chairperson . the Court has invariably ruled that it is the value of the property at the time of taking that is controlling for purposes of compensation. and rentals.00 as litigation expenses are reasonable under the premises. As to attorney's fees and expenses of litigation. being a question of fact. since Forfom no longer appealed the deletion by both lower courts of said prayer for exemplary damages. Forfom has no more right to receive any income.000. The petition is PARTIALLY GRANTED in that attorney's fees and litigation expenses in the amounts of P100. unearned income. No costs.52 For almost 18 years. As to actual damages corresponding to the sugarcane and mango trees that were allegedly destroyed when PNR entered and took possession of the subject land. the instant petition is PARTIALLY DENIED insofar as it denies Forfom Development Corporation's prayer for recovery of possession (in whole or in part) of the subject land. together with the rental received therefrom.000.The next issue to be resolved is the time when just compensation should be fixed. if there be any.
3 4 5 6 7 8 . 164-173. REYES Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. 2 Raffled to Branch 24. Id. concurring. CA rollo. ALICIA AUSTRIA-MARTINEZ Associate Justice ANTONIO EDUARDO B. Benipayo and Buenaventura J. pp. Id. Id. Article VIII of the Constitution and the Division Chairperson's Attestation. Brawner with Associate Justices Alfredo L. at 77-80. pp. Id. 1-6. I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. Id. CONSUELO YNARES-SANTIAGO Associate Justice Chairperson . NACHURA Associate Justice RUBEN T. at 90. at 507-510. Records. at 38.Third Division CERTIFICATION Pursuant to Section 13. at 125-129. Guerrero. PUNO Chief Justice Footnotes 1 Penned by Associate Justice Romeo A. REYNATO S.MA.
pp. Id. at 519-520. at 515-516. at 704-705. Id. Id. at 517-518. pp. at 532-549. Id. at 681-691. at 727. at 706-707. Id. Id. Records. at 599-612. Id. at 709-712. at 699-703. p. CA rollo. 513-514. 172. Id. Id. 2-17. Id. Id. 18-34. at 692-693. Id.9 Id. at 728 and 730. Id. Id. at 204-207. 591-594. at 340-344. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 . 2 October 1991. at 696. at 150-177. at 137-149. at 178-203. Id. Id. TSN. Records. Id. Id. Id. pp. at 708. TSN. pp. 2 October 1991.
Republic Act No. 60225-26. 203-204 (1983). 696 (1952). 3 August 1990. 49 50 51 52 National Power Corporation v.R. 603.R. G. 55. 692.. L-59603. No. 36 Phil.R. Reyes v. 70. 6366 and Presidential Decree No. 110478. G. v. G. 8 May 1992. The Lawphil Project .R. Gozun. Manapat v. pp. 443 Phil. 2 February 2007. 514 SCRA 56. 42 43 44 45 46 47 Didipio Earth-Savers' Multi-Purpose Association.34 Id. 613. 210 Phil. Angas. 156093. Reyes v. Dulay. No. G. 524 SCRA 679. Incorporated (DESAMA) v. No. 548-549. Manapat v. 90 Phil. Hon. G. 15 June 2007. National Housing Authority. 627. 479 Phil. 161836.R. 536 SCRA 32. supra note 37 at 613. 850. 41 32 Phil. No. National Housing Authority. National Housing Authority. 130 Phil. Manila International Airport Authority v. 29 April 1987. 35 36 37 38 39 40 Heirs of Mateo Pidacan and Romana Eigo v.R.R. Export Processing Zone Authority v. 50147. 537-538 (1915). Nos. Rodriguez. at 167-170. 449. Rollo. supra note 37 at 610. No. G. 28 February 2006. G. 30 March 2006. Court of Appeals. Reyes. as amended by Republic Act No. Court of Appeals. National Power Corporation v. 48 Heirs of Juancho Ardona v. 110478. No. 187. 485 SCRA 586. Reyes v. Inc. Urtula v. No. Go. 610 (2003). 162779. 149 SCRA 305. Air Transportation Office. 11-12.R. 741. v. 15 October 2007.Arellano Law Foundation . 483 SCRA 619. 686-687. Republic. 15 October 2007. G. National Power Corp. dela Cruz. G. Court of Appeals. 208 SCRA 542. 53 Philippine Oil Development Co. 311. 4156. 157882. 908.R. 536 SCRA 32. 860 (2004). 188 SCRA 300. 454-455 (1968). 47-48. 534. No. 911-912 (1917).
3 including the power of eminent domain. J. SPOUSES AGUSTIN and IMELDA CANCIO. 1979. thus enabling it to acquire private land within or adjacent to the ecozone for consolidation with land for zone development purposes. vs. 18115 which reserved certain parcels of land of the public domain in Lapu Lapu City in favor of petitioner (then Export Processing Zone Authority or EPZA) for the establishment of the Mactan Export Processing Zone. 2012 Search Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G. 2009 REPUBLIC OF THE PHILIPPINES. However.Petitioner. 2005 decision1 of the Court of Appeals (CA) in CA-G.R. SP No. Marcos issued Proclamation No.lawphil Today is Thursday.R. No. 170147 January 30. 75092. Respondents. DECISION CORONA.2 as amended.: This petition for review on certiorari under Rule 45 of the Rules of Court seeks to set aside the October 17. It is vested with governmental functions. November 15. some of the parcels covered by the proclamation. then President Ferdinand E. including that .4 On January 15. Petitioner Philippine Economic Zone Authority is a government-owned and controlled corporation created and existing under and by virtue of RA 7916. represented by the PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA).
000 for the whole property. It cited A. 2002 (second order). Thereafter.9 It is petitioner’s stance that it is not. assailing the first and third orders of the RTC.10 Consequently. petitioner commenced expropriation proceedings for respondents’ property with the Regional Trial Court (RTC) of Lapu Lapu City. The court a quo issued its September 5. On February 26. Petitioner eventually laid out the development of the economic zone and subsequently leased out respondents’ 47. (Maitland). the RTC agreed with petitioner’s position. the implementing agency shall immediately pay the owner of the property an amount equivalent to 100% of the current zonal valuation thereof for purposes of the issuance of a writ of possession. No.O. Respondents. We deny the petition. It could not be validly invoked when the property was already in the government’s possession. On May 19. 2002 order (first order).540 sq. lot to an investor in the economic zone. were private land. The issue before us is whether or not RA 8974 is applicable to this case for purposes of the issuance of the writ of possession. m.) No. 2001. . Maitland Smith Inc. Thereafter. m. Respondents filed a motion for reconsideration. Hence.of respondent spouses Agustin and Imelda Cancio. It also averred that it should be made to pay only the price of the land at the time of its taking. which requires that. if it was ordered to pay the amount required under RA 8974.8 specifically Section 4(a) thereof. Branch 54 on August 27. it would be unjustly penalized for its own improvements to the property.229. on the other hand. The letter containing the offer further instructed respondents "to consider and accept. 2001.294. applied to all actions of such nature regardless of whether the government agency was already in possession or not. petitioner filed a petition for certiorari in the CA. it sought a writ of possession for the property for which it was willing to deposit 10% of the offered amount or a total of P5. this petition.6 Accordingly. In its January 14. This time. petitioner prayed in its complaint for expropriation11 that it be issued a writ of possession upon a showing that the amount equivalent to ten percent (10%) of the offered amount has been duly deposited." Instead of accepting the offer. Petitioner moved for its reconsideration. the court a quogranted petitioner’s motion for reconsideration.7 Respondents. RA 8974 governs this case. No. Corollarily. as in this case.400 with the Land Bank of the Philippines in accordance with Administrative Order (A. petitioner offered to purchase respondents’ lot at P1. the trial court granted respondents’ motion. contending that petitioner should make the required payment under the law because RA 8974. It argued that RA 8974 was inapplicable as the payment required under the law applied only to instances where the property was still in the owner’s possession and had yet to be transferred to the government. 2002 order (third order) which reversed its second order and reinstated the first one. agree that RA 8974 is the controlling law in this case as the complaint for expropriation was instituted when said law was already in effect.O. or P52. which took effect before the commencement of the expropriation case. not A.100 per sq. however. 50. 50 as its legal authority when it offered to purchase respondents’ property in an amount equivalent to ten percent (10%) higher than the zonal value thereof. filed a motion to require petitioner to comply with RA 8974. respondents filed an unlawful detainer case against Maitland in the Municipal Trial Court of Lapu Lapu City.O. 50 as petitioner insists. upon the filing of the complaint for expropriation. The appellate court sustained the RTC’s ruling. otherwise we will initiate expropriation proceedings in the proper court.
18 In fact.] has also been described in a variety of ways as the "price fixed by the buyer and seller in the open market in the usual and ordinary course of legal trade and competition. 300 SCRA 751 ). 8974 is further highlighted by the fact that it requires a deposit based on the current zonal valuation of the property. it is the ministerial duty of the trial court to issue the writ upon compliance with the requirements . The trial court had yet to approve a writ of possession in petitioner’s favor when the issue of payment of just compensation cropped up. PHIVIDEC Industrial Authority. In its complaint filed in the RTC. the price and value of the article established as shown by sale. To apply such valuation to the instant case would be to violate the cardinal principle in eminent domain proceedings that the just compensation for the property should be its fair market value at the time of taking. Also.16 we clarified that the payment of the provisional value as a condition for the issuance of a writ of possession is different from the payment of just compensation for the expropriated property. in the ordinary way of business. it may be a factor to be considered in the determination of just compensation.13 petitioner prayed that: a. A. No. 2000. and of an indemnity for damages if the proceedings are dismissed. the fair value of the property between one who desires to purchase and one who desires to sell. the economic zone is a national government project – a matter undisputed by both parties. It is not a final determination of just compensation and may not necessarily be equivalent to the prevailing fair market value of the property." Market value[s. Of course. there is no doubt about its applicability to this case." (Emphasis in the original) There is therefore no need yet to determine with reasonable certainty the final amount of just compensation in resolving the issue of a writ of possession. we agreed with the CA’s explanation17 that: The first refers to the preliminary or provisional determination of the value of the property. It serves a double-purpose of prepayment if the property is fully expropriated. The nature and character of the land at the time of its taking is the principal criterion to determine just compensation to the landowner (National Power Corporation vs.12 Undeniably. In Capitol Steel Corporation v. is the final determination of the fair market value of the property. there was a confusion regarding the nature of the amount to be paid for the issuance of a writ of possession. In their motion to require petitioner to comply with RA 8974.A perusal of RA 8974 readily reveals that it applies to instances when the national government expropriates property for national government infrastructure projects. the complaint for expropriation was filed only on August 27. Just compensation. We note that this expropriation case is still in its initial stages. A writ of possession be issued in favor of plaintiff respecting its possession. While the provisional value is based on the current relevant zonal valuation. Henson. upon showing that the amount equivalent to 10% of the offered amount has been duly deposited. When petitioner moved for reconsideration15 after the RTC granted respondents’ aforementioned motion. Thus. public or private. on the other hand. control and disposition of the land sought to be expropriated including the power or authority to demolish. It has been described as "the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation.zw+ In that case. if any. just compensation is based on the prevailing fair market value of the property.14 respondents countered that they: x x x contest PEZA’s proferred value as it is not a just compensation for the property sought to be expropriated. 2001 or almost one year after the law was approved on November 7. (Emphasis supplied) Clearly. Both parties seemed to have confused the requirement of paying 100% of the current zonal valuation of the property (as a prerequisite to the issuance of a writ of possession) with the payment of just compensation itself. it argued that: The inapplicability of R. improvements thereon. the current price. the general or ordinary price for which property may be sold in that locality. 1avv ph!1.
25 WHEREFORE.22 Furthermore.21 Thus: Sec. SO ORDERED. It must also be just to the public which ultimately bears the cost of expropriation. (g) The price of the land as manifested in the ocular findings. shape or location. the court may consider. however. 2001. in accordance with the guidelines laid down in RA 8974 and its implementing rules. In establishing the amount of just compensation. tax declaration and zonal valuation of the land. (b) The developmental costs for improving the land. Standards for the Assessment of the Value of the Land Subject of Expropriation Proceedings or Negotiated Sale. RENATO C. 5. oral as well as documentary evidence presented. the following relevant standards: (a) The classification and use for which the property is suited.of Section 419 of the law. and thereby rehabilitate themselves as early as possible. – In order to facilitate the determination of just compensation. hold that it is still feasible to comply with the spirit of the law by requiring the trial court to make such determination within sixty (60) days fromfinality of this decision."24 In this case. (d) The current selling price of similar lands in the vicinity. (e) The reasonable disturbance compensation for the removal and/or demolition of certain improvements on the land and for the value of improvements thereon. (c) The value declared by the owners. among other well-established factors. RA 8974 provides that "the court shall determine the just compensation to be paid the owner within sixty (60) days from the date of filing of the expropriation case. and (h) Such facts and events as to enable the affected property owners to have sufficient funds to acquire similarlysituated lands of approximate areas as those required from them by the government. No costs. as provided under Section 5 of RA 8974. CORONA . We. (f) The size. This must be so as just compensation should take into account the consequential benefits and damages which may arise from the expropriation. it is well to remember that the concept of just compensation does not mean fairness to the property owner alone. No hearing is required and the court cannot exercise its discretion in order to arrive at the amount of the provisional value of the property to be expropriated as the legislature has already fixed the amount under the aforementioned provision of the law.23 Lastly. almost eight years have passed since petitioner commenced the expropriation proceedings on August 27. the petition is hereby DENIED.20 It is only after the trial court ascertains the provisional amount to be paid that just compensation will be determined. the parties may present evidence relative to the property’s fair market value.
Lanzanas (retired) and concurred in by Associate Justices Pampio A. which was promulgated in 1972. Abarintos and Vicente L. 44-52. LEONARDO-DE CASTRO Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. 553 dated January 15. 2 Otherwise known as the Special Economic Zone Act of 1995. Rollo. Article VIII of the Constitution and the Acting Division Chairperson’s Attestation. It supersedes Presidential Decree 66 (The EPZA Law). ANTONIO T. The functions of the Authority are hereby declared governmental. ALICIA AUSTRIA-MARTINEZ** Associate Justice CONCHITA CARPIO MORALES Associate Justice TERESITA J. which shall be under the direct supervision of the Office of the President. CARPIO* Acting Chairperson MA. which reads: Section 2. . 2009. 552-A dated January 15. ** 1 Penned by Associate Justice Enrico A. I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. CARPIO Acting Chairperson CERTIFICATION Pursuant to Section 13. there is hereby created a body corporate to be known as the Export Processing Zone Authority. 3 As provided for in Section 2 of PD 66. 2009. QUISUMBING Acting Chief Justice Footnotes * Per Special Order No. hereinafter referred to as Authority. Per Special Order No.Associate Justice WE CONCUR: ANTONIO T.pp. LEONARDO A. – To carry out the above policy. Yap (retired) of the Special Eighteenth Division of the Court of Appeals. Creation of an Export Processing Zone Authority.
See Section 1 of A. See Section 1. 6 December 2006. Island of Mactan. Rollo. 510 SCRA 590. Supra note 11. No. Province of Cebu. 8 "An Act to Facilitate the Acquisition of Right-of-Way. However." Dated 17 February 1999. G. both lower courts failed to differentiate between the two concepts and ruled on the matter by agreeing with respondents’ contentions. – The areas comprising an ECOZONE may be expanded or reduced when necessary. 9 The main error actually assigned to this Court was the applicability of RA 8974 to this case for purposes of determining the amount of just compensation due respondents. No. p.R. (b) Acquisition of right of way to the ECOZONE. have mistaken the payment of the provisional amount (as a prerequisite to the issuance of a writ of possession) and the payment of just compensation to be one and the same. 75.4 Section 29 of RA 7916 reads: Section 29. pp. 602. 5 "Preserving for Purposes of the Export Processing Zone Authority a Certain Parcel of Land of the Public Domain Situated in the City of Lapu lapu. pp.O. Rollo." Dated 7 November 2000. and (c) The protection of watershed areas and natural assets valuable to the prosperity of the ECOZONE. after painstakingly sifting through the records of the case. G. Regrettably. 80-83. Site or Location for National Government Infrastructure Projects and for Other Purposes. For this purpose. negotiation or condemnation proceedings.O. 515. Thus. 7 Otherwise known as "Guidelines for the Acquisition of Certain Parcels of Private Land Intended for Public Use Including the Right-of-Way Easement of Several Public Infrastructure Projects. See Section 2 of A. Eminent Domain. 50. 10 Annex D-3. any private lands within or adjacent to the ECOZONE for: (a) Consolidation of lands for zone development purposes. 60-66. 5578-L. No. 11 12 13 14 15 16 . the parties’ insistence on the resolution of the aforementioned issue as shown in their pleadings filed in the RTC. the government shall have the power to acquire. RA 8974 and Republic v. rollo. either by purchase. 169453.. 478 SCRA 462. Id. 152335. CA and this Court.R." 6 Docketed as Civil Case No. 50. 88-95. No. pp. and even the lower courts. Gingoyon. 19 December 2005. the Court found that the parties.
R. supra note 16. 72-73. No. 617. p. xxx Upon compliance with the guidelines abovementioned. See Section 4 of RA 8974. 31 March 2005. 89980. Section 4 of RA 8974 provides: Sec. CA.Arellano Law Foundation . Before the court can issue a Writ of Possession. site or location for any national government infrastructure project through expropriation. 23 Republic v. the appropriate implementing agency shall initiate the expropriation proceedings before the proper court under the following guidelines: (a) Upon the filing of the complaint. p. 603. G. 454 SCRA 516. 602-603. Spouses dela Cruz. the court shall immediately issue to the implementing agency an order to take possession of the property and start the implementation of the project. v. the implementing agency shall pay the owner the difference between the amount already paid and the just compensation as determined by the court.R.. No. (Emphasis supplied) 18 19 20 Capitol Steel Corporation v. No. 24 25 The Lawphil Project . p. PHIVIDEC Industrial Authority. 216 SCRA 584. supra note 12.. 2 February 2007. 514 SCRA 56. 536. Guidelines for Expropriation Proceedings. v. – Whenever it is necessary to acquire real property for the right-of-way. 14 December 1992. In the event that the owner of the property contests the implementing agency’s proffered value. and (2) the value of the improvements and/or structures as determined under Section 7 hereof. 602. 4. G.17 Id. 21 22 National Power Corp. the implementing agency shall immediately pay the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR). Id.. citing B. 147245. CA. Berkenkotter & Co. and after due notice to the defendant. Id. Gingoyon. 156093. G. the implementing agency shall present to the court a certificate of availability of funds from the proper official concerned.H. Republic v.R. pp. the court shall determine the just compensation to be paid the owner within sixty (60) days from the date of the filing of the expropriation case. 586-587. When the decision of the court becomes final and executory.
respondent rejected it. San Andres. petitioner Land Bank of the Philippines (LBP) offered P1. To recall. Thus.EN BANC [G. through its Provincial Agrarian Reform Adjudicator (PARAD) conducted summary administrative proceedings for the preliminary determination of just compensation in accordance with Section 16 (d) of the CARL. A petition for the fixing of just compensation docketed as Agrarian Case No. rulings and decisions of the DARAB become final after the lapse of 15 days from their receipt. the Department of Agrarian Reform Adjudication Board (DARAB). T-712 with an area of 62. Romblon. finding some marked inconsistencies in the figures and factors made as bases by LBP in its computation. 169008. No. which was docketed as CA-G. moved for the dismissal of the petition for being filed out of time. in view of the foregoing. Convinced that the proffered amount was unjust and confiscatory. more or less. assailing both the November 11. LBP primarily contended that the Office of the PARAD gravely abused its discretion when it issued the writ of execution despite the pendency with the SAC of a . 2007 Motion for Reconsiderationand November 8. 83276. Ascertaining that the petition before the SAC was filed by LBP 26 days after it received a copy of PARAD Sorita's decision. even as the motion to quash was yet unresolved. moved to quash the said February 23. contending that the orders. 2007 Decision in the instant case. pursuant to Republic Act No. 2004.492.179. which seek the reversal of the August 14.60 as just compensation. judgment is hereby rendered: Ordering the Land Bank of the Philippines to pay landowner-protestant RAYMUNDA MARTINEZ for her property covered and embraced by TCT No. PARAD Virgilio M. which the Department of Agrarian Reform intends to acquire. rendered judgment as follows: WHEREFORE. Lifted from the said assailed decision are the following antecedent facts and proceedings: After compulsory acquisition by the Department of Agrarian Reform (DAR). 2003. Petitioner opposed the motion.R. RESOLUTION NACHURA. After filing her answer to the said petition. the Office of the PARAD denied LBP's motion for reconsideration and ordered the issuance of a writ of execution on February 23. Romblon. J. which was eventually granted on November 11. respondent.5369 hectares. RESPONDENT. Meanwhile.R.5369-hectare land in Barangay Agpudlos. 1993. Aggrieved of these developments.485. 2008] LAND BANK OF THE PHILIPPINES PETITIONER. Sorita. 2004 PARAD resolution. SO ORDERED. Branch 82. on March 12. SP No. 83276. the total amount of TWELVE MILLION ONE HUNDRED SEVENTY NINE THOUSAND FOUR HUNDRED NINETY TWO and 50/100 Pesos (Php12. On April 6. On September 4. SP No. 6657 or the Comprehensive Agrarian Reform Law of 1988 (CARL).955.50). 2002. 2004. July 31. the Court in the challenged decision denied the petition for review on certiorari and affirmed the ruling of the Court of Appeals (CA) in CA-G.: Before the Court are petitioner's September 20. 2003 and the February 23. still asserting the finality of PARAD Sorita's decision.R. 2007 Supplemental Motion for Reconsideration. LBP. of respondent Martinez's 62. LBP instituted a petition for certiorari before the CA. 2004 PARAD resolutions. the Regional Trial Court of Odiongan. respondent. 2004. in the manner provided for by law. filed before the Office of the PARAD a motion for the issuance of a writ of execution. on November 16. VS. RAYMUNDA MARTINEZ. 696 was then filed by LBP's counsel before the Special Agrarian Court (SAC).
For her part. 2007 Motion for Reconsideration and the November 8. On September 14. of the 1997 Rules of Civil Procedure. which is not an initiatory pleading. that the Provincial Agrarian Reform Adjudicator (PARAD) gravely abused his discretion in issuing the writ of execution to implement his decision. Rule 7. which may both be resolved and imposed in the same case where the forum shopping is found. Most importantly. thus: ACCORDINGLY. 2003 and the February 23. 2004 resolutions. 2006. dismissed the petition on September 28. 2004. The CA. the present petition for certiorari is DISMISSED outright. willful and deliberate forum-shopping constitutes direct contempt of court and cause for administrative sanctions. Section 11 of the Department of Agrarian Reform Adjudication Board (DARAB) Rules of Procedure. that it did not commit deliberate forum shopping. among others. SO ORDERED. as aforesaid. Not persuaded by LBP's motion for reconsideration. petitioner successively filed. that respondent's defense ofres judicata or the alleged finality of the PARAD's decision was never pleaded in her answer. 2007 Supplemental Motion for Reconsideration. The Court also found petitioner to have forum-shopped when it moved to quash the PARAD resolutions and at the same time petitioned for their annulment via certiorari under Rule 65. 2005 via a petition for review on certiorari under Rule 45. 2005. LBP. the appellate court denied the same on July 15. that the PARAD had no . [Citations omitted. this Court. in view of the dismissal of the above-entitled case.petition for the fixing of just compensation. was already deemed waived. Dissatisfied with our ruling. 2002 decision on land valuation. Necessarily. we issued a temporary restraining order (TRO) restraining the appellate court and the DAR adjudicators from implementing the November 11. Further. mindful that under Sec. 2004. respondent contends that petitioner has committed forum-shopping when it filed a certiorari petition without first awaiting the resolution by the Office of the PARAD of the motion to quash. and the decision of the PARAD cannot be executed due to the pending petition for fixing of just compensation with the SAC. 5. the Court ruled that petitioner was not entitled to the issuance of a writ ofcertiorari by the appellate court because the Office of the PARAD did not gravely abuse its discretion when it undertook to execute the September 4. contending. and that petitioner has lost its standing to sue considering that it is being represented by its lawyers and not the Office of the Government Corporate Counsel (OGCC). 2005. that it did not commit deliberate forum shopping for what it filed with the Office of the PARAD was a motion to quash. The Court went on to rule that the petition for review on certiorari could not be filed without the Office of the Government Corporate Counsel (OGCC) entering its appearance as the principal legal counsel of the bank or without the OGCC giving its conformity to the LBP Legal Department's filing of the petition. hence. the September 20. finding LBP guilty of forum-shopping for not disclosing the pendency of the Motion to Quash dated March 12.] Three primordial issues were then resolved by the Court in the said decision--(1) whether or not petitioner could file its appeal solely through its legal department. and (3) whether or not the Provincial Agrarian Reform Adjudicator (PARAD) gravely abused his discretion when he issued a writ of execution despite the pendency of LBP's petition for fixing of just compensation with the Special Agrarian Court (SAC). through its legal department. The said adjudicator's decision attained finality after the lapse of the 15-day period stated in Rule XIII. In both motions. elevated the case before this Court on September 9. we are no longer in a position to act on the private respondent's motion for execution pending appeal. WARNS the counsel of record of the petitioner that a repetition of a similar act of submitting a false certification shall be dealt with most severely. petitioner contends that its lawyers are authorized to appear in the instant case for they have been issued a letter of authority by the OGCC on April 17. (2) whether or not petitioner committed forum shopping. Consequently.
is based on the doctrines laid down in Philippine Veterans Bank v. This conclusion. was decided at a time when Rule XIII. except for the alleged conflict of the August 14. Suntay. 2007 in G. Mendoza. or on October 11. counters. The Court agrees with respondent's contention and denies petitioner's motions. the Court reiterates its ruling in this case that the agrarian reform adjudicator's decision on land valuation attains finality after the lapse of the 15-day period stated in the DARAB Rules. 2008 Comment. In Philippine Veterans Bank. and with the doctrines enunciated in Philippine Veterans Bank and in Lubrica. To reiterate. the grounds raised by petitioner in the motions are identical to those stated in its previous pleadings. this case was decided on August 14. following the law and settled jurisprudence. Incidentally. Court of Appeals and Department of Agrarian Reform Adjudication Board v. We. 2007 Decision in this case is contrary to its October 11. 2007. however. as already explained in the assailed decision. The Court notes that the Suntay ruling is based on Republic of the Philippines v. This ruling. Following settled doctrine. No. 157903 [LBP v. Further. Respondent. Tinga. Lubrica. Suntay should have then remained consistent with our ruling. the Court. while Suntay was decided two months later. Court of Appeals. runs counter to the Court's recent decision in Suntay [the motions for reconsideration in Suntay were denied with finality in the January 30. Suntay. as correctly pointed out by petitioner. we ruled in this case that the PARAD's decision had already attained finality because of LBP's failure to file the petition for the fixing of just compensation within the 15-day period. Republic did not discuss whether the petition filed therein for the fixing of just compensation was filed out of time or not. however. 2007 Decision. decided in 1996 also through the pen of Justice Vicente V. In Lubrica. And these have already been considered and sufficiently passed upon by the Court in the August 14.R. decided in 2005 through the pen of Justice Dante O. not appellate. that the filing of the said motions is only dilatory considering that the arguments raised therein have already been answered by the Court in the decision sought to be reconsidered. 2008 Resolution of the Court]. Josefina Lubrica is the assignee of Federico Suntay whose property is the subject of the aforementioned October 11. promulgated our decision in this case ahead of Suntay. be filed with the SAC within the said period. 2007 Decision in Land Bank of the Philippines v. On the supposedly conflicting pronouncements in the cited decisions. 2007 Decision in LBP v. in her January 24. the Court emphasized that the jurisdiction of the SAC is original and exclusive. G. Republic. Indeed.R. Suntay]. The Court merely decided the issue of whether cases involving just compensation should first be appealed to . Mendoza. 2007 Decision with that promulgated on October 11. 2007. among others. No. especially considering that Lubrica was the representative of Suntay in the Suntaycase. The Court in that case stressed that the petition was not an appeal from the adjudicator's final decision but an original action for the determination of just compensation. citing Philippine Veterans Bank. The petition for the fixing of just compensation should therefore. however. Section 11 was not yet present in the DARAB Rules. the Court ruled that the trial court correctly dismissed the petition for the fixing of just compensation because it was filed beyond the 15-day period provided in the DARAB Rules. 157903 on the issue of whether the petition for determination of just compensation was filed out of time. and that the Court's August 14. ruled that the adjudicator's decision had already attained finality because LBP filed the petition for just compensation beyond the 15-day reglementary period. In that case. in which the Court ruled that the trial court erred in dismissing the petition for determination of just compensation on the ground that it was filed out of time.jurisdiction to issue the writ of execution due to the pending petition for determination of just compensation with the SAC. decided in 2000 through the pen of Justice Vicente V.
e. the adjudicator's decision will attain finality. must not leave the dispossessed landowner in a state of uncertainty as to the true value of his property.. This rule is not only in accord with law and settled jurisprudence but also with the principles of justice and equity. To resolve the conflict in the rulings of the Court.. . Azcuna. JR. and the HEIRS OF ROSARIO MERCADO.. Petitioners. or a year. the Court DENIES WITH FINALITY petitioner's September 20. Jr. IN THE LIGHT OF THE FOREGOING DISQUISITIONS.R. CARPIO MORALES. i certify that J. one filed a month. Corona. Tinga. CARPIO.. that the better rule is that stated in Philippine Veterans Bank. VILLARAMA. Chico-Nazario. and MENDOZA. 6657.the DARAB before the landowner can resort to the SAC under Section 57 of R. Quisumbing. Carpio Morales. DE CASTRO. CORONA. J. Ynares-Santiago. J. LEONARDO- - versus - BERNARDO L. Puno. PERALTA. SO ORDERED. Thus. the same has to be filed within the 15-day period stated in the DARAB Rules. Tinga voted in favor of the ponencia. JJ. on official leave.. C.. VELASCO. we now declare herein. Puno. SR. or even a decade after the land valuation of the DAR adjudicator. otherwise. JR. Velasco.. PEREZ. G. No. JJ. EN BANC MACTANCEBU INTERNATIONAL AIRPORT AUTHORITY and AIR TRANSPORTATION OFFICE. while a petition for the fixing of just compensation with the SAC is not an appeal from the agrarian reform adjudicator's decision but an original action. BRION. DEL CASTILLO. No.* BERSAMIN. J. Leonardo-De Castro. a belated petition before the SAC. ABAD... on leave.g. 176625 Present: PUNO.J. Austria-Martinez. 2007 Supplemental Motion for Reconsideration. namely. LOZADA. Verily.. 2007 Motion for Reconsideration and the November 8.. and Brion.J. J. 2007 Decision in this case. reiterated in Lubrica and in the August 14.A. for the guidance of the bench and the bar. concur. Reyes. C. Carpio. NACHURA.
FLORES. BERNARDO LOZADA. in CA-G. Promulgated: MARIO M.017 square meters. February 25.VICENTE LOZADA. . GODINEZ. Respondents. CV No. 2006 and the Resolution dated February 7. annul. 2007 of the Court of Appeals (CA) (Cebu City). the lots were already occupied by the U. more or less. 88). 2010 VIRGINIA L. 88-SWO-25042 (Lot No.. Army. for the expansion and improvement of the Lahug Airport. located in Lahug.R. SOCORRO CAFARO and ROSARIO LOZADA.: This is a petition for review on certiorari under Rule 45 of the Rules of Court. the National Airport Corporation and then to the CAA. represented by the then Civil Aeronautics Administration (CAA). x------------------------------------------------------------------------------------x DECISION NACHURA. DOLORES GACASAN.S. MARCIA L. the Bureau of Aeronautics. As early as 1947. with an area of 1. The antecedent facts and proceedings are as follows: Subject of this case is Lot No. and docketed as Civil Case No. initiated by the Republic of the Philippines (Republic). seeking to reverse. LOZADA. Its original owner was Anastacio Deiparine when the same was subject to expropriation proceedings. Twentieth Division. and set aside the Decision dated February 28. R-1881. JR. J. 65796. They were turned over to the Surplus Property Commission. Third Branch. The case was filed with the then Court of First Instance of Cebu. Cebu City. represented by MARCIA LOZADA GODINEZ.
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 Lozada’s 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 atP3.00 per square meter, with consequential damages by way of legal interest computed from November 16, 1947—the 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. 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. 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; In the early 1960’s, the Republic sought to acquire by expropriation Lot No. 88, among others, in connection with its program for the improvement and expansion of the Lahug Airport; 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;
Title to Lot No. 88 was subsequently transferred to the Republic of the Philippines (TCT No. 25057); The projected expansion and improvement of the Lahug Airport did not materialize; 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.
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; 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; The public purpose for which the property was expropriated was for the purpose of the Lahug Airport;
as their lone witness. and 2. Godinez. and the heirs of Rosario Mercado. Lozada. Lozada. 1989. Lozada. Lot No. upon payment of the expropriation price to plaintiffs. Lozada. namely. 2006. 20357 in the name of defendant MCIAA and to issue a new title on the same lot in the name of Bernardo L. and against defendants Cebu-Mactan International Airport Authority (MCIAA) and Air Transportation Office (ATO): 1. Jr. Jr. No pronouncement as to costs.] (5) During trial. 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[. 88 Psd-821 (SWO-23803). Bernardo L. SO ORDERED. Mactan-Cebu International Airport Authority legal assistant Michael Bacarisas. . while petitioners presented their own witness. Gacasan. On October 22. Gacasan. Dolores L. [and] On November 29. the Court hereby renders judgment in favor of the plaintiffs. Socorro L. cancelling TCT No.. in the light of the foregoing. denying petitioners’ appeal and affirming in toto the Decision of the .(4) After the expansion. Vicente M. Virginia L. Bernardo M. Godinez. 1999. Marcia L. and the heirs of Rosario Mercado. Dolores L. represented by their attorney-in-fact Marcia Lozada Godinez. Sr. Flores. Sr.. Lozada. ordering MCIAA and ATO to restore to plaintiffs the possession and ownership of their land. the RTC rendered its Decision. Lozada. then President Corazon C. petitioners interposed an appeal to the CA. the property was transferred in the name of MCIAA. disposing as follows: WHEREFORE. Bernardo M. Lozada. the CA rendered its assailed Decision dated February 28. Mario M. Cafaro and Rosario M.. Cafaro and Rosario M. Virginia L. Lozada. ordering the Register of Deeds to effect the transfer of the Certificate of Title from defendant[s] to plaintiffs on Lot No. Flores. Lozada. respondents presented Bernardo Lozada. Marcia L. Socorro L. Aggrieved. namely: Vicente M. Sr. After the filing of the necessary appellate briefs.
or municipality. The petition should be denied. 88 for the expansion of the Lahug Airport be aborted or abandoned. likewise. denied in the questioned CA Resolution dated February 7. then. being its former owners. with the condition that when that purpose is ended or abandoned the property shall return to its former owner. giving title in fee simple to the Republic. however. When land has been acquired for public use in fee simple. 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. Cebu City. 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. Petitioners cite. or the land may be devoted to a different use. unconditionally. then. it returns to the former owner. unless there is some statutory provision to the contrary. If. in support of this position. of course. Fery v. the decree of expropriation gives to the entity a fee simple title. Hence. without any impairment of the estate or title acquired. and in that case the non-user does not have the effect of defeating the title acquired by the expropriation proceedings. x x x. 2007. the former owner retains no right in the land. or any reversion to the former owner. Petitioners’ motion for reconsideration was. upon the contrary. R-1881 was absolute and unconditional. and (3) the respondents’ claim of verbal assurances from government officials violates the Statute of Frauds. (2) the judgment in Civil Case No. then. of course. a province. x x x. the property would revert to respondents. the land becomes the absolute property of the expropriator. and the public use may be abandoned. Branch 57.RTC. whether it be the State. 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. 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. when the city abandons its use as a public street. when the purpose is terminated or abandoned the former owner reacquires the property so expropriated. x x x. of course. . either by the exercise of eminent domain or by purchase. Municipality of Cabanatuan.
Although Mactan Airport is being constructed. 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 Court will presume that the Lahug Airport will continue to be in operation (emphasis supplied). 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. must be equitably adjusted. From it aircrafts fly to Mindanao and Visayas and pass thru it on their flights to the North and Manila. this Court had ruled otherwise in Heirs of Timoteo Moreno and Maria Rotea v. The Court cannot substitute its judgment for those of the said departments or agencies. Indeed. it cannot now be doubted. It is up to the other departments of the Government to determine said matters. While in the trial in Civil Case No. Mactan-Cebu International Airport Authority. it does not take away the actual usefulness and importance of the Lahug Airport: it is handling the air traffic both civilian and military.” 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.Contrary to the stance of petitioners. R-1881 should be read in its entirety. thus— Moreover. 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. the Decision in Civil Case No. the rights vis-à-vis the expropriated Lots Nos. 916 and 920 as between the State and their former owners. 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. wherein it is apparent that the acquisition by the Republic of the expropriated lots . petitioners herein. Then. 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.” 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. In the absence of such showing.
RY. the title of the expropriating agency being one of fee simple. respondent Cabanatuan acquired a fee simple title to the lands in question. if the latter desires to reacquire the . and Reichling v. judgment was rendered in favor of the municipality. the expropriator should commit to use the property pursuant to the purpose stated in the petition for expropriation filed. in 1915. with respect to the element of public use. and (2) that just compensation be paid to the property owner. Covington Lumber Co. Co. failing which. which involved an expropriation suit commenced upon parcels of land to be used as a site for a public market. we take this opportunity to revisit our ruling in Fery. More particularly. 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 then incumbent upon the expropriator to return the said property to its private owner. The condition not having materialized because the airport had been abandoned. It is well settled that the taking of private property by the Government’s power of eminent domain is subject to two mandatory requirements: (1) that it is for a particular public purpose. On this note. which necessarily resulted in the abandonment of the particular public purpose for which the property was taken. However. sought to recover his properties. Lake Shore & M. respondent Cabanatuan constructed residential houses for lease on the area. all uniformly holding that the transfer to a third party of the expropriated real property. Theodore Wright. it should file another petition for the new purpose. McConihay v. the former owner should then be allowed to reacquire the expropriated property. If not. is not a ground for the recovery of the same by its previous owner. 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..S. Obviously. as he had admitted that.was subject to the condition that the Lahug Airport would continue its operation. following American jurisprudence. particularly City of Fort Wayne v.. These requirements partake of the nature of implied conditions that should be complied with to enable the condemnor to keep the property expropriated. Instead of putting up a public market.
It bears stressing that both the RTC. In light of these premises. the judgment of expropriation suffers an intrinsic flaw. the particular public purpose for which the property will be devoted. we rule in the affirmative. the private property owner would be denied due process of law. if this particular purpose or intent is not initiated or not at all pursued. and the judgment would violate the property owner’s right to justice.same. Accordingly. and equity. In affirming the factual finding of the RTC to this effect. he did not hire a lawyer. namely. 88 should the operations of the Lahug Airport be abandoned. Cebu and the CA have passed upon this factual issue and have declared. subject to the return of the amount of just compensation received. the CA declared— Lozada’s testimony is cogent. Otherwise. with the former undertaking to resell Lot No. we now expressly hold that the taking of private property. consequent to the Government’s exercise of its power of eminent domain. there were no expropriation proceedings against his property in 1952 because the first notice of expropriation he received was in 1962. Corollarily. In such a case. 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. fairness. entered into between the Government and respondents. then the former owners. Based on the promise. An octogenarian widower-retiree and a resident of Moon Park. As far as he could remember. on the question of whether respondents were able to establish the existence of an oral compromise agreement that entitled them to repurchase Lot No. Even without the foregoing declaration. in no uncertain terms. 88 to the latter if the improvement and expansion of the Lahug Airport would not be pursued. This promise was made at the premises of the airport. that a compromise agreement was. as it would lack one indispensable element for the proper exercise of the power of eminent domain. Branch 57. is always subject to the condition that the property be devoted to the specific public purpose for which it was taken. may seek the reversion of the property. in the instant case. in fact. and is peremptorily abandoned. the exercise of the power of eminent domain has become improper for lack of the required factual justification. Lozada was firm that he was promised that the lot would be reverted to him once the . if they so desire.
Verily. we just believed in the government. cited by petitioners. Though Lozada is not part of the compromise agreement. 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. he nevertheless adduced sufficient evidence to support his claim. it will be returned back. if a contract has been totally or partially performed. the exclusion of parol evidence . suffice it to state that the Statute of Frauds operates only with respect to executory contracts. The objection to his competency must be made before he has given any testimony or as soon as the incompetency becomes apparent. The fact that he could not supply the necessary details for the establishment of his assertions during crossexamination. His testimony on cross-examination destroyed neither his credibility as a witness nor the truthfulness of his words. the testimony of Lozada was based on personal knowledge as the assurance from the government was personally made to him. Still. It was just a verbal promise. 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. Not one of the exceptions to this rule is present in this case to warrant a reversal of such findings. though he could not name the government representatives who made the promise. factual findings of the trial court. As correctly found by the CA. it is binding. where respondent therein offered testimonies which were hearsay in nature. he is a competent witness capable of perceiving and making his perception known. especially when affirmed by the CA. unlike in Mactan Cebu International Airport Authority v. This Court notes that he was 89 years old when he testified in November 1997 for an incident which happened decades ago.public use of the lot ceases. nevertheless. As regards the position of petitioners that respondents’ testimonial evidence violates the Statute of Frauds. He made it clear that the verbal promise was made in Lahug with other lot owners before the 1961 decision was handed down. A petition for certiorariunder Rule 45 of the Rules of Court contemplates only questions of law and not of fact. Court of Appeals. The statute has precisely been enacted to prevent fraud. are binding and conclusive on this Court and may not be reviewed. but that ―When it will not be used as intended. and does not apply to contracts which have been completely or partially performed.‖ does not dismantle the credibility and truthfulness of his allegation. However.
916 and 920 to the government with the . our ruling in Heirs of Timoteo Moreno is instructive. for it would enable the defendant to keep the benefits already delivered by him from the transaction in litigation.would promote fraud or bad faith. The predicament of petitioners involves a constructive trust. 1454 of the Civil Code. cannot apply. The right of respondents to repurchase Lot No. he may demand the reconveyance of the property to him. 88 do not conclusively establish that respondents absolutely parted with their property. invoked by petitioners to bar the claim of respondents for the reacquisition of Lot No. particularly because of the oral promise made to them. By reason of such assurance made in their favor. viz. 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. the Statute of Frauds. If the fulfillment of the obligation is offered by the grantor when it becomes due. No doubt. 88. 88 and his seeking the correction of a clerical error in the judgment as to the true area of Lot No.” This omission notwithstanding. On this note. Moreover. such precision is not absolutely necessary nor is it fatal to the cause of petitioners herein. the return or repurchase of the condemned properties of petitioners could be readily justified as the manifest legal effect or consequence of the trial court’s 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. respondents relied on the same by not pursuing their appeal before the CA. and while the inclusion of this pronouncement in the judgment of condemnation would have been ideal.: Mactan-Cebu International Airport Authority is correct in stating that one would not find an express statement in the Decision in Civil Case No. responsibilities or liabilities assumed or contracted by him thereby. one that is akin to the implied trust referred to in Art. at the same time. “If an absolute conveyance of property is made in order to secure the performance of an obligation of the grantor toward the grantee. To our mind. contrary to the claim of petitioners. petitioners conveyed Lots No. 88 may be enforced based on a constructive trust constituted on the property held by the government in favor of the former. In this case. the oral compromise settlement having been partially performed. evade the obligations. these acts were simply meant to cooperate with the government. and.” In the case at bar. the fact of Lozada’s eventual conformity to the appraisal of Lot No. a trust by virtue of law is established.
are echoed in Art. the“wronged party seeking the aid of a court of equity in establishing a constructive trust must himself do equity. Although the symmetry between the instant case and the situation contemplated by Art.” On the matter of the repurchase price. failing to keep its bargain. while petitioners are obliged to reconvey Lot No. 916 and 920. the provisions which. The rights and obligations between the constructive trustee and the beneficiary. 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. 1454 is not perfect. Of course. 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. his fixed costs for improvements thereon. 1190 of the Civil Code. “When the conditions have for their purpose the extinguishment of an obligation to give.” Accordingly. the trustee may also be paid the necessary expenses he may have incurred in sustaining the property. deterioration or improvement of the thing. plus legal . the parties. and the monetary value of his services in managing the property to the extent that plaintiff-beneficiary will secure a benefit from his acts. 88 to respondents. In constructive trusts. shall return to each other what they have received x x x In case of the loss. are laid down in the preceding article shall be applied to the party who is bound to return x x x. the arrangement is temporary and passive in which the trustee’s sole duty is to transfer the title and possession over the property to the plaintiff-beneficiary. with respect to the debtor. 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. the provision is undoubtedly applicable. upon the fulfillment of said conditions.” Constructive trusts are fictions of equity which are bound by no unyielding formula when they are used by courts as devices to remedy any situation in which the holder of legal title may not in good conscience retain the beneficial interest. For. in this case. otherwise. the government can be compelled by petitioners to reconvey the parcels of land to them. the latter must return to the former what they received as just compensation for the expropriation of the property.latter obliging itself to use the realties for the expansion of Lahug Airport. In the good judgment of the court. respondent MCIAA and petitioners over Lots Nos.
the improvement shall inure to the benefit of the creditor x x x. and . which is a natural consequence of nature and time. 88. as well as the monetary value of their services in managing it to the extent that respondents were benefited thereby. 2007 Resolution are AFFIRMED with MODIFICATION as follows: 1. plus the monetary value of their services to the extent that respondents were benefited thereby. 1999 Decision of the Regional Trial Court. 3. 88. 88. to be computed from the time petitioners comply with their obligation to reconvey Lot No. Cebu City. which provides that ―(i)f a thing is improved by its nature.interest to be computed from default. in the case of default. Following Article 1187 of the Civil Code. 88. Respondents must likewise pay petitioners the necessary expenses they may have incurred in maintaining Lot No. as creditors. 2006 Decision of the Court of Appeals. and respondents need not account for the interests that the amounts they received as just compensation may have earned in the meantime.  WHEREFORE.‖ respondents. 88. or by time. Respondents are ORDERED to pay petitioners the necessary expenses the latter incurred in maintaining Lot No. affirming the October 22. 88. Branch 87. The February 28. and its February 7. which in this case runs from the time petitioners comply with their obligation to respondents. petitioners may keep whatever income or fruits they may have obtained from Lot No. do not have to pay. 2. as part of the process of restitution. Respondents are ORDERED to return to petitioners the just compensation they received for the expropriation of Lot No. In accordance with Article 1190 of the Civil Code vis-à-vis Article 1189. 88 to them. the petition is DENIED. the appreciation in value of Lot No. Petitioners are ENTITLED to keep whatever fruits and income they may have obtained from Lot No. plus legal interest.
only for the purpose of receiving evidence on the amounts that respondents will have to pay petitioners in accordance with this Court’s decision. the case is REMANDED to the Regional Trial Court. JR. NACHURA Associate Justice WE CONCUR: REYNATO S. CARPIO Associate Justice RENATO C. CORONA Associate Justice CONCHITA CARPIO MORALES Associate Justice PRESBITERO J. which is a natural consequence of nature and time. 88. SO ORDERED. Respondents are also ENTITLED to keep whatever interests the amounts they received as just compensation may have earned in the meantime. ANTONIO EDUARDO B. Cebu City. Branch 57. In light of the foregoing modifications.4. VELASCO. Associate Justice . No costs. as well as the appreciation in value of Lot No. PUNO Chief Justice ANTONIO T.
. Associate Justice JOSE PORTUGAL PEREZ Associate Justice JOSE CATRAL MENDOZA Associate Justice CERTIFICATION Pursuant to Section 13. Article VIII of the Constitution. I hereby certify that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. JR. ABAD Associate Justice MARTIN S.TERESITA J. DEL CASTILLO Associate Justice ROBERTO A. BRION Associate Justice (on official leave) DIOSDADO M. LEONARDO-DE CASTRO Associate Justice ARTURO D. VILLARAMA. PERALTA Associate Justice LUCAS P. BERSAMIN Associate Justice MARIANO C.
46-65. 120. pp. 7. the fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated. No. at 512-514. pp. June 29. pp. concurring. 178. 1998. November 14. Vide Republic v. Gregorio Araneta University Foundation v. 225. No.  Ruling on the Motion for Reconsideration affirming the Decision. October 15. April 11. Heirs of Jose T. In case of the loss. G. 58-59. Calo v.R. February 10.   Vide the Separate Concurring Opinion of Associate Justice Presbitero J. 121 U. Lim. 1887. Lanzanas. No. 1910. upon the fulfillment of said conditions. shall retroact to the day of the constitution of the obligation.  Art. at 29-30. 2008. 121506. p. Jr. Tudtud.S. No. 174012.  Mactan-Cebu International Airport Authority v. PUNO Chief Justice * On official leave.R. Sec. Jr. at 509-510.  TSN. 580 SCRA 532.R. 232. G.  Id. at 302. 413 SCRA 502. with Associate Justices Pampio A. G. 466 SCRA 288. Art.. November 5. 263 SCRA 736. 1996. shall return to each other what they have received. 578 SCRA 226.R. . 28 (1921).  Rollo.  Rollo. 156273. Br. G. 305. The effects of a conditional obligation to give. at 22-23. 580 SCRA 575. 571 SCRA 165. 2003. x x x.R. February 4.  G. 462 SCRA 265. August 9. 2009.  Id. Calo. Supra note 11. 932.  Rollo. 544. 139672. when the obligation imposes reciprocal prestations upon the parties. Bruselas. March 4. When the conditions have for their purpose the extinguishment of an obligation to give.  Art.  Id. 1187.  Supra note 9. Regional Trial Court of Kalookan City.R. III. 2005.  G. 161656. rollo. once the condition has been fulfilled. People. 171511. G. 558. CONSTITUTION. with respect to the debtor. Abarintos and Apolinario D. March 4. the parties. No. Heirs of Timoteo Moreno and Maria Rotea v. the provisions which. Penned by Associate Justice Enrico A.  Caluag v.       132 Ind. deterioration or improvement of the thing. 156273. 9. 57 Wash. No. 583. Nevertheless.R. 2009. Velasco. 156101.  Records.REYNATO S. 1892. Mactan-Cebu International Airport Authority. 67-68. October 30.R. 175. 2005. 1190. 2009. p. pp. No.  42 Phil. June 25. G. No. Petitioners’ witness Michael Bacarisas testified that three other lot owners entered into a written compromise agreement with the government but Lozada was not part of it. are laid down in the preceding article (Article 1189) shall be applied to the party who is bound to return. 20-21.
 Mactan-Cebu International Airport Authority v . Tudtud. . supra note 22. at 177.
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